With the current economic climate and a move towards online-based business has made it more difficult than it used to be when it comes to making physical stores a success. Retail, however, is far from a thing of the past, and prospective store owners shouldn’t be put off by the trend.
Although there are plenty of opportunities for success, opening a shop has its fair share of challenges along the way. From picking your location and perfecting your product offerings to defining a legal structure, there’s a lot of things to consider before the grand opening.
To help you with what is an arduous but rewarding process, this resource is here to guide you through what you need to know and where to start when it comes to opening a physical store.
The location of your shop is a huge difference-maker, having a major impact on whether or not operations are a success. Before you sign the lease, consider the location first; without a framework to make your decision, the options available to you can get confusing.
Do you want to lease in a shopping centre? Somewhere in an up-and-coming neighbourhood or a development next to a shop with major footfall such as a supermarket? Perhaps you’re bound by a budget and have to settle on a less pricey location away from busier areas?
In making a decision, you’ll have to weigh up a few different options. If your product is unique, then people may be willing to make the trip to your location, so you might not have to worry about being located in a low-traffic area. If your product isn’t differentiated enough from competitors, then a high-exposure area is preferable.
Look into your customer demographic, too. Through census data, you can analyse the demographics in your area and compare it with the customer you have defined in your business plan. This gives you a better idea of whether you’re looking in the right area.
For a more detailed resource on choosing commercial premises, check out our list of things to consider here.
One of the most important things you’ll need to do is choose a legal organisational structure for your business. This is necessary because it affects how you pay taxes, the amount of liability for debt, how you raise capital and the possibility of having shareholders. All of these have a large impact on how your business operates, so it’s essential you make the right decision. And while it is possible to change the legal structure at a later date, it’s a difficult and expensive process - make sure you choose wisely. Here are the most common legal structures shop owners in the UK could potentially choose:
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Whatever the product you’re selling, setting up a shop requires money. It may be the case that you’ll finance the store yourself, but many require extra capital to get things off the ground. Thankfully, there are a few different options available to you:
It’s important to keep track of your finances, too; using a business bank account helps separate your personal expenses and income from your business finances.
You might have an idea of what you want to call your shop, but it may be worth thinking twice about. The name you have in mind might be special to you, or be a clever bit of wordplay, but consider whether it will work against you when it comes to marketing it online and offline. Something unique that’s memorable, clear and communicates what you sell will serve you well when it comes to netting business both off- and online.
Closely linked to the naming of your shop, is the way you brand the business. This includes the interior design of your shop, the tone of voice in communications and advertising, and your social media presence, among many other things. This must be done in a way that communicates your personality, represents the preferences of your target audience and promises both a quality product and a positive shopping experience.
For more on how to craft a brand identity, be sure to check out our interview with creative expert Richard Meads here.
Put simply, a business plan is one of the steps of starting any business that you cannot afford to skip. Though it takes a large amount of planning and research, creating a business plan is invaluable, plotting a course for you to follow on the way to success. A proper plan makes the objectives of your business clearer, illuminates any potential pain points, sets achievable targets and many, many other benefits. Avoid creating one at your peril.
A physical retail store may need the necessary licenses and permits to do business. Failing to obtain these documents can result in a criminal offence and large fines. Not all small businesses require one, and in many cases, you can trade without one as long as you’re set up with HMRC and have chosen a legal structure for your business. However, you’ll need to obtain a specific license if you’re doing any of the following:
Although you probably won’t be able to hire immediately, as your shop grows and the workload increases, you’ll need a bit more people power to deal with everything coming your way. Before you start advertising anyvacancies, there are a few things to consider. For a start, you’ll need to decide how much to pay them – legally this has to meet or surpass minimum wage. Make sure your candidates have the legal right to work in the UK too; you’ll need a copy of their passport or their National Insurance Number to check. You’ll also have to register as an employer with HM Revenue and Customs – you can do this up to four weeks before you start paying your staff.
When you started the business, it’s likely that you’ll have an idea in your head of the company culture and the kind of person that will fit into the culture. Do you want people with the proper experience or those with softer skills who will add to the company in other ways? Finding fresh talent is important, and there are many different ways you can go about doing it.
Like a business plan, a marketing strategy is an important part of running a shop profitably. This is where you outline your target market and how you plan to reach them. What channels will you use to contact your intended customers? How will you present your messaging? What promotional strategies will you employ?
Don’t forget to monitor and evaluate the results of your marketing efforts so you can see what is and isn’t working. It can often be a case of trial and error, so don’t fret if things don’t go according to plan the first time.
In the early days of opening your store, you might want to try some of the following to increase your brand awareness with new customers:
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