- Types Of Retail Business
- Grocery Stores
- General Merchandise Stores
- Specialty Stores
- Nonstore retailing
- Online Retailing
- How To Start A Retail Business
- Step 1: Legal Structure of Your Retail Business
- Step 2: Choose Name For Business
- Step 3: File for an EIN
- Step 4: Determine Your Products or Services
- Step 5: Determine Your Channels
- Step 6: Know The Business Laws
- Step 7: Customer Experience
- Step 8: Business Plan
- Step 9: Establishing Relationships With The Suppliers And Vendors
- Step 10: Define Your Store Policies
- Step 11: Marketing Plan
- Step 12: Soft Open and the Grand Opening
Retail Business is one of the fastest-growing segment of the Indian economy. Retail industry provides you with excellent business opportunities. Every year, many new enterprises start their business in this sector. The owners risk their capital, invest their time and effort to make their business successful. They try their best to offer their consumers something which they need or want.
Mostly, retail business involves buying goods and taking services from a wholesaler, agent, manufacturer, importer or other retailers. Then they sell these items to consumers for their personal use. They generally buy in small quantities but have a greater variety of products or service. The price includes the retailer’s expenses and includes some profit.
Types Of Retail Business
Grocery stores are one of the most popular types of retail business in India. It involves the selling of a variety of products such as meat, dairy products, health and beauty aids and cleaning products etc. A grocery store can be set up online or at any physical location.
General Merchandise Stores
General merchandise stores generally sell a variety of products. They have variety according to the demands and need of the customers. They sell clothing, furniture, sporting goods, kitchenware, electronics etc. Big Bazaar and TATA Croma are the examples of general merchandise stores.
Many retail businesses fall into this category. Specialty stores are those which specialize in a specific product. A specialty store could be a cell phone shop, home furnishing store, jewelry shop, clothing store, an auto parts store, computer store, etc.
Non-retailing stores sell their products and services through television, door to door, portable stalls, mail orders, catalogs, etc. Nowadays, the non-store retailing sector is very popular. According to the survey, it includes $123 billion in nonstore retailing sectors. They generally do not maintain stock or have minimum stock on the premises.
Amazon, Flipkart, Big Basket etc are some examples of the online business. It is also one of the fastest growing retail sectors in the market.
How To Start A Retail Business
Step 1: Legal Structure of Your Retail Business
Choosing proper legal structure of the business is the first step towards the establishment of the retail business. Choose a structure which is suits your business the most. Although you can change your structure later it may involve time, money and efforts.
Step 2: Choose Name For Business
For some of them, it can be an easy task but for some, they struggle. You should choose a name that quickly communicates who you are and what are your products. In online businesses, some retailers select a name which is difficult for organic search traffic and SEO to search. It will cost you more to win business online if more it takes to explain your name.
Step 3: File for an EIN
An EIN stands for Employer Identification Number. It is also known as a Federal Tax Identification Number. EIN is used to identify a business entity. It is required when you have employees in your retail business. It is easy to acquire.
Step 4: Determine Your Products or Services
Pick up the right merchandise to sell in your store. Select product or service. Your product or service should meet the expectations of your customers. Before that, you can research your nearby market or your competitors. It gives you an idea of what type of stock you have to maintain, trends of the market, additional services offered by stores etc. Remember, getting it in your store is easy but getting it out profitably is the hard part.
Step 5: Determine Your Channels
There are different types of channels. You have to choose by which customer can reach you out as soon as possible. Will you do catalog or phone orders? Will it directly offer to the consumer or with help of an agent? or you have a mobile app. Well, there are many questions which you have to consider. You must determine in advance which channel can help you to build a strong retail business.
Step 6: Know The Business Laws
Research and know all the laws related to your business plan. For example, Business license, tax-related laws, Accounts, and paperwork, etc. You can take help from experts and professionals such as lawyers, accountant, or any agent.
Step 7: Customer Experience
Many retailers fail because they skip this step. This step determines that what type of experience do you want your consumers should have when they buy from you. In India, most of the people prefer to buy at stores rather than online. But they demand experience which is different from the online. If we say about Customers experience, it determines by the type of product you have, type of services you are offering to them, your store design, the way you are selling your products, and type of employees you need to deliver it.
Step 8: Business Plan
It is also one of the most important steps in starting a business. You should have a business plan in writing. It will help you consider all the angles and areas of your business. However, for this, you have to do a extensive research and planning. It can take time but It will definitely direct you to the success of the store.
Here some are the key areas your business plan:
- Competitive Analysis (who is already in this business)
- Marketing Plan
- Customer Experience
- Employee Plan (who to recruit and why)
- Management Plan (hours, policies, etc)
- Financial Pro-forma (3-5 year projections of your P&L)
Step 9: Establishing Relationships With The Suppliers And Vendors
A retail business can be successful only when you are able to give the right products, at the right price and the right time. For this, you have to select the suppliers who can give you a supply of resources at a good price. Establishing relationships with the vendors is also very important. Select vendors who will partner with you.
Step 10: Define Your Store Policies
Before opening your business, set your policies and procedures. You can analyze or anticipate your problems and find the solutions for them. This will helps you to avoid mistakes and can handle them efficiently. Spent some time to train your employees.
Step 11: Marketing Plan
Create a marketing plan before you open a retail store. A good marketing plan will help you to reach to your customers. For advertising, you can use methods such as newspapers and television advertising, catalogs, billboards, magazines etc. Online marketing is now a very popular method because it can reach through a large number of peoples with less time.
Step 12: Soft Open and the Grand Opening
Conduct a soft opening before you open your store “officially” to the public. A soft opening refers to opening your business, but without an announcement to the public. It helps you and your employees to do a practice of dealing or “dress rehearsal” before the big day. However, you should take at least one week for a soft opening. It will really train your employees and able to manage the new environment.
After that, you can open your store officially.
Related Topic: Startup Company Registration India – Procedure And Documents