Setting up a retail business

Anyone starting a retail business in 2016 would be forgiven for thinking that the only route is online, however businesses can still have a high street presence and for many businesses there is no reason why ‘virtual’ shopping and ‘physical’ shopping cannot exist side by side.

Setting up a retail business

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Things to consider

The recent recession led to the end of the road for some well known high street retailers. According to the Centre for Retail Research in 2008, 54 retailers failed with nearly 75,000 employees affected. These were mainly larger high street brands, however as recently as 2012 there were also 54 failing companies, although with fewer employees. In the months to August 2016 however, the positive news is that there have only been a handful of failed retailers.  The most public of course being BHS.

The lesson to be learnt from this is that there are many things to consider before deciding to have a high street presence with a product or brand. Beginning with an online presence is a sensible approach as it minimises risks and costs and allows a brand to build a loyal following. In addition, depending on the product it is worth trying to get your products for sale in other people’s stores, ie department stores, which again will minimise risk and cost.

Product and who will buy it

Before starting any sort of business you need to have a ‘viable’ product that people will want to buy. Getting the product offering right is a key consideration. It is also important to do research about the potential customer base. This will enable marketing to be clearly targeted towards potential purchasers. Try out the product on friends and family and see if it is something they think they would purchase either for themselves or for someone else and before deciding to have a retail outlet definitely try the idea out online if this is suitable.  For example if you were in the cotton fabrics industry like you may wish to consider going to trade shows to both look at up and coming designs as well as those you could offer out to potential suppliers to keep you up to date and make new contacts.

Location and type of outlet

If you decide to open a retail outlet then the type of product and consumer should drive your decision about where to locate, whether it is on a high street or within a covered mall. Wherever you locate, one of the main risks is theft. According to Retail Week professional shoplifters are responsible for around 20% of all retail thefts. There is also more scope for having a pop up shop or a market stall style outlet which offer cheaper rents and are lower risk. Alternatively a high street presence means it is easier to build up a regular customer base and product following.

Although there is much to consider when setting up a retail outlet or starting a business that could have a retail presence there is no doubt that it can be a rewarding and fulfilling venture for anyone willing to take a chance and give it a go.

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