Now that you have invested the money, gone through the legalese, found your shop area (rented or virtual), and you have established your inventory, how do you keep a retail business going? It’s not just “if you build it, customers will come.” You have to work hard and work smart if you don’t want to hang the “closed” sign on your door permanently.
Here are a few pointers on how to run a retail business:
Continuous Market Research
Your target market is ever so fickle. Even if you’ve done the preliminary research before opening your shop doors, you have to make sure that you are always keeping up with the market. Find out about emerging trends and see how this applies to your products. After some time, you may even be able to predict the market movement across a set time, and adjust your product inventory accordingly.
Just like market research, pricing is a continuous process. A good rule of thumb is to monitor your inventory acquisition costs, and at the same time, check on your expenses. It may mean that on lean months, you should be happy if you can get to pay all the expenses and just a little bit for yourself, but not much else. The key here is to always adjust your prices so you can keep people coming in, without losing money in the process.
Be it a sole proprietorship, a partnership or a small corporate entity, money management should be transparent to all involved. If you are a sole owner, make sacrifices when you have to – no successful business comes without sacrifices. If you are not the sole owner, then you should still be very honest and up-front with your partners and investors, particularly if there are financial concerns to worry about.
This means that you have to carefully weigh all the costs for the shop, including payroll. Finding the right balance of maintenance and crew size might spell the difference in making a profit for the month.
PR, Advertising, and Promotions
Some retail business owners think that simply providing quality service, a shop (virtual or real) will create a good buzz by itself. The fact is, it could, but it would be a very slow process. Consider PR and advertising avenues, even if it’s as simple as inviting some friends to write about your place, or having a Facebook business page. Regarding promotions, do remember that they can be one way to lessen inventory in storage, while at the same time provide your target market with an incentive to visit your shop. Just remember to weigh the promotion costs versus your calculated income.
E-Commerce and Customer Data
Finally, you have to remember that it just isn’t about bricks-and-mortar establishments anymore. Even if your product is location-bound or perishable, like personal services and food, an online presence is necessary. You can establish an online presence that can benefit you in two big ways:
If it fits your product inventory, then an online storefront is something you should look into. Do take into account that you may have to consider online money transfers, and possibly shipping. Even if the initial outlay may be considerable, an online e-commerce shop might be a big boost to your profits. In some cases, you may not even need a physical store.
2) Social Media as Advertising, PR, and Promotions
Setting up accounts in all the larger social media networks online will allow you to reach a larger market, and makes for positive interaction with your target audience. However, do be aware that you have to deal with negative feedback, and that you may have to consider creating a marketing strategy for your online presence – and if the shop is profiting well, you might even have to see if you can get someone to take care of your online social presence.