Opening a new retail business is an exciting venture and can bring you long term success if you know what you’re doing. Many new business owners make the mistake of not doing their research or understanding who their target audiences are before they launch their new business. Here are five mistakes new business owners make and what you can do to avoid them.
1) Not having a business plan
Writing a business plan is the first thing you should do as a new business owner. It comes before you choose your retail location, before you identify your target audience, and even before you look for investors. A business plan is a corporate document that details all the aspects of your business. It will stay by your side as a handy guide as you grow and expand your retail business.
Investors and lenders will always ask for your business plan before they agree to provide you with funding. A business plan consists of an executive summary that is a one-page company profile and overview.
After that, you need to write your product overview. Here, you need to consider the following things:
- What do you want to sell?
- Who do you want to sell to?
- Is there a need for your product in the market?
- How much will you charge for your products?
- Are you offering competitive prices?
To get the answers to these questions, you’ll need to do market research. How you market your products, your business’ organizational structure, financial statements, patents (if any) should all be listed in your business plan.
2) Not understanding the market
To properly predict whether your product will make a name in the marketplace or not, you need to understand the market. Look at your competition and what they’re doing – are they making good profits? Is there a niche within your industry that your products could fill? Who are your target audiences?
You should have the answers to these questions before you find a physical location for your retail business. If you choose a location that is far away from places frequented by your target audience – you stand to lose money. An example of this would be opening a pizzeria in a neighborhood where most people turn out to be elderly and lactose intolerant. Don’t take the risk and locate your target audience before you pick a retail location.
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Another tip you can try is utilizing pop up stores. Pop-up stores let you test out how lucrative an area could be before opening a brick and mortar location there. You can test out multiple areas and find your perfect match.
3) Not making use of available technology and software
When you’re just starting out with your new retail business, you’ll be setting up logistics, the point of sale system, accounting, bookkeeping, and other parts of setting up a business. Most of this can be made super easy and effective with the help of modern technology. Analytics software, accounting software, and other marketing and business-related tech make building an integrated sales strategy very easy. For example, you can set up a system that automatically sends your customers an email from you every time they purchase a product from your store. The emailer can contain other products they may be interested in buying. Categorize your regular customers by separating them into lists based on their spending habits and interests.
Personalizing your approach to customer engagement can increase sales and bring you returning customers. The more you leverage available technology, the more time you and your employees will have available to focus on assisting your customers, taking care of your retail shop, and more.
4) Forgetting about forging relationships with customers
As a retail business, one thing that separates you from e-commerce portals is the presence and availability of human help. Customers who visit your retail business can take advice from you or your employees, develop connections, and build loyalty to your brand. The more positive experiences you can give to your customers while they’re in your store, the more likely they will come back.
Another way to develop brand loyalty is by using social media to generate customer engagement. On the social media page of your retail business, upload quality content relevant to your business, answer questions and queries and promote upcoming sales and discounts.
5) Not having their retail business insured
You never need to use your insurance cover until one day when you do. If your retail business faces an accident, then your business operations can be disrupted. You can also be sued by a customer or third party. If during work your negligence or mistake resulted in another person becoming injured or their property getting damaged, they can sue you. Protect your business for the right cost by comparing multiple insurers online now and get the right shop insurance by clicking here.
