How to be a Retailer
Many Americans are entrepreneurs at heart, and spend countless frustrated hours working for someone else, making money for someone else, when all they really want to do is work for themselves. They like the idea of being the boss, of being able to put up a closed sign if they want to go fishing or meet a friend for lunch. Others simply want the status of being in charge and demanding the respect of their friends and family as a store owner. Whatever the reason, the truth is, most people do not want to spend their lives working for someone else.
The answer for many is to open their own retail business. Retail business, by definition is a business that sells goods directly to the customer or consumer. Retailers are not wholesalers or suppliers who typically sell their goods to another business. Retail businesses include large corporations and small businesses that are run independently, like a family book store or coffee shop.
For those of you who want to be in retail, but just are not sure what type of business you want to open, you will need to do some soul-searching, and identify your core interests.
Ask yourself the following questions:
What do you read about the most?
What magazines to you subscribe to?
What do you like to do in your spare time?
If you have only two to three healthy years to live, what would you do aside from spending time with friends and family?
What did you really want to be when you grew up?
Have you worked in retail?
Do you know anyone who works in retail?
Do you know anyone who owns their own retail store?
Next, list everything you have ever been interested in:
Lastly, you must rate each of the above interests based on:
(Use a scale of 1 – 5: 1 not really interested, 5 very interested.)
How interested are you?Want to learn more? Take an online course in Retail Business.
How long would it take you to become an expert?
How likely are people to pay for your expertise and products?
How likely are people to pay a lot of money for your expertise and products?
Please take your time with these questions. Once you become a retail business owner you will eat, drink, breathe, and dream about your business all day every day.
Are you a People Person?
You do not have to be overly gregarious, but you do have to like talking to people and have to be able to communicate with them. And if you are really not a people-person, is your idea really good enough to get a business off the ground, in which case you will need a people-person to be the public face of your business.
Is problem solving your forte?Retail business is fraught with problems. I have noticed that people for whom every little incident is a crisis, opening a retail business is likely not going to be a strong point for them.
I have been in retail for twelve years and we have dealt with problems such as phone lines not working, air conditioning/heating not functioning properly, fuse boxes out of code, flooding, roof leaks, burglary, broken windows, doors, and locks. We have had advertisers promise to meet a deadline for an event, and didn't. We have had orders promised by Easter that actually shipped in time for the Forth of July. Credit cards get maxed out, shipping rates increase, shoplifters take some of our most prized merchandise, kids knock things over, grumpy customers take their bad feelings out on us.
This is a typical month in the life of a retailer. Being able to handle problems on a pretty regular basis and then additionally being able to leave the problems at work can indicate that you are one of the rare retailers who will survive longer than two or three years in the business.
Can you keep cool under fire?
Or, can you keep your cool. Patience is one of your most compelling qualities. Being able to differentiate what is really an upsetting incident and one that is just an annoyance or irritating will help you become a retail business owner. Folks with hot tempers do not last long in the retail business. Mouthing off to a customer is the best way to get negative advertising for studies have shown that customers who are dissatisfied with their encounter with you in your store they will tell no fewer than six other people about their experience.
Getting Into Business
OK. You've got a business idea. You have evaluated yourself and believe you have what it takes. What next? You still have a little bit of evaluating to do.
It is true, owning and opening a new store is a truly appealing adventure. Most of us love the idea of starting from scratch with just an idea and then building it into a successful business.
Most folks go into business for the following reasons:
Because I am looking for financial freedom.
I do not want to answer to a boss anymore.
I want to spend their time the way I want to spend it.
I want to be in charge.
I want to create something special, make my mark on the world.
I want to use my skills better.
I want to be with more people.
I see a need and I want to fill that need.
Hours and Responsibilities
Much is said about being your own boss. One of the best kept secrets of retail business is that in the beginning, you will be spending quite a bit more time working than you did at your 9 to 5 job.
Your work demands will seem easy and trifling after you begin the journey into retail. Most retailers, in the beginning, work anywhere from 12 to 16 hours a day, 6 to 7 days a week, that works out to anywhere from 72 to 112 hours a week. If you are really used to a 40 hour work week and think you can open a retail business with those hours, you might just consider keeping your job.
If, however, you believe that you are willing to put that kind of effort into something of your own, knowing that down the road you will likely be able to slow down, then you likely have the makings of a retailer.
Additional responsibilities include the risk of failure and the risk of losing all the money that you have invested into the business. If you have a family, there the responsibility is to provide a living for them.
Ultimately you will be responsible for:
Ø Keeping records
Ø Paying taxes
Your Options and the Competition
Study the Market
What exactly does "Study the Market" mean?
By taking a good assessment of your interests and your expertise you come up with an idea for a store.
We're going to use Wendell Putnam as an example. Wendell has an idea to open a gardening center and nursery. He has gardened all his life and has a pretty good idea what he needs to know for this sort of a business. Wendell is matching his skills and his passions with a desire to start a business. Maybe he will even be the first in his area, or he will simply do it better than everyone else in his area. The only real way to know is to do a market study.
In order to determine the feasibility of your idea, let's consider our next step. We are going to Study the Market with regard to:
Ø Market Potential
Ø Product Industry
Ø Consumer Demand
Ø Uniqueness of Idea
There are, indeed, companies who will do this kind of market research, but the average small business owner simply cannot afford to pay the kind of money required for such a report. This is called primary market research.
Internet Market Research is easily found. You can just use your search engine and type in the name of your business, say plants, pets, cars, etc. Then you want to add words like: trends, association, statistics, sales, industry. This will give you some valuable information about your industry and market.
At the library, look up past issues of The New York Times, The Wall Street Journal, USA Today, Time, U.S. News & World Report, The Economist, Newsweek. Find articles on market trends in: Fortune, Forbes, and Business Week.
Finding Your Niche
Talk to friends, neighbors, family, and other retailers. Ask them about holes in the market that need to be filled. Identify areas of need yourself.
The inventor of Z-Coil, Alvaro Gallegos, was an avid runner for years who eventually developed knee and serious back problems that could not be solved. Because he understood the need for protection from such degenerative problems, Gallegos invented a new shoe that he launched, markets, and sells with great success.
Sizing up your Competition
The stark truth of retail is that it really does require more than just a good product and good service in order to succeed. You absolutely must identify your competition, identify their strengths and weaknesses, what their plans for the future are, what their financial situation is, their goals and who are their key personnel?
Wendell lives in a fairly small community, with a partially transient population brought in by the tourist trade of the lakes in the area, but it is spread out. They do not have a large conglomerate retailer in their area like Wal-Mart or Home Depot. This is a positive for Wendell. He finds three other gardening and nursery centers in his area. At first he is discouraged, but he decides to talk with the owners without telling them what his intentions are. This can be one of your "spying" missions.
Wendell discovers that one shop, Daisy's Dasies, is moving from a gardening and nursery focus to more of a floral focus; flowers for special occasions, weddings, etc. The owner is tired of working outside and wants more time indoors. She also wants a more consistent business throughout the year.
This is good information. A direct competitor is turning her focus to something else; she has discovered a need in the community that she wishes to fill. This may help Wendell by reducing some competition for his business idea.
At the second garden center, Roberts and Sons, an employee talks to Wendell and he finds that they currently hire the high school students to do yard work for some of the community members. They also have a very nice garden and nursery center that appears to be doing a very good business. By asking more probing questions, Wendell discovers that the owner intends to retire in about a year or so and that he is discouraged because his children do not want to take over the business. They all plan to move to a larger city about an hour and a half away.
All this information for Wendell is valuable. It tells him that he has a really good idea, and that there is a need for the service he considered offering. What he discovers is that in about a year or so there will be a great need for the service he was considering adding to his nursery and garden center idea. This is very good news for Wendell. This information helps him to decide to concentrate only on the retail end of the business and consider adding the service end of the business later when there is a greater need.
Do You Know the Business?
Once you have identified your competition, you must evaluate how they run their business. Learn their strengths. Learn their weaknesses. Is there a way that they do business you could change and make substantially better? Is there something that you do that your competitors do not do? This way, you will be able to design your business in a way that avoids the strengths of your competitors and your strengths can then be compared to their weaknesses.
Wendell has taken the time to look at his three competitors. Daisy's Dasies is changing the focus of her business, and so she is no longer a direct competitor. Roberts and Sons is looking at a very short-lived business plan. At the moment, Mr. Roberts is planning to close the doors of his business within a year. The last competitor is a small outfit The Flower Pot, but they do a booming business with basic annual plantings and a few perennial offerings. The one great advantage in Wendell's eyes is that they are only open three months out of the year.
After talking to his neighbor and his wife, Wendell assesses his idea. He is a very experienced gardener. He has worked in finance most of his life, and wants a change. His entire home is surrounded by various garden beds that he has created over the years, offering an immediate walk through garden center possibility. His neighbor reminds Wendell that the only person for hundreds of miles around who can propagate some of the natural species of plants is Wendell. This is an advantage that none of the other competitors offer. What Wendell will have to determine is whether his property is zoned as a commercial property or not. If it is not, then all his ready-made walk through garden beds will do him no good. If it is, then he has a huge advantage over any of his competitors because none of them have these attributes.
- Retail Management: Marketing Issues
- Dealing with Training and Motivating in Retail Management
- Retail Management: Structure of Your Business
- Understanding How to Handle Merchandise in Retail Management
- Understanding Common and Preferred Stock
- Enhancing Your Resume with Activities and Interests
- Business Analysis: Developing a Communications Strategy
- The Importance of Understanding Accounting
- How to Build an Investment Portfolio
- Learning Skills Needed as an Effective Administrative Assistant
- The Role of the Balance Sheet in Understanding Financial Statements
- Customer Care Tips: Developing Clarity by Creating a Customer Service Policy
- Overview of Bookkeeping and Bookkeeping Practices
- The Influence and Consequences of Persuasion