There are any ways to operate a business in Australia, and retail is certainly a popular choice. In fact, according to the Productivity Commission,
“There are almost 140 000 retail businesses in Australia, accounting for 4.1 per cent of GDP and 10.7 per cent of employment.”
If you’re thinking about opening your own retail store in Australia, we have a handy checklist of things to consider before you take the plunge.
To start a retail business, consider the following checklist to be ready to take the plunge.
Get deep into market research
Before buying a business or opening a new one, you should know absolutely everything you can about the market you’re about to enter. For retail businesses, this means detailed research into things like:
- Direct competitors and how successful they are.
- Foot traffic numbers and demographics in your chosen location.
- Local need or desire for your products.
- Potential for new challenges including new competitors.
- How easy it is to access your potential store, including parking and public transport
- Reasonability of your price point in terms of local benchmarks.
- Success and failure rates of similar retail stores.
Create a retail store business plan
If you’re going to start a retail business, it’s crucial to start out strong with an effective business strategy – one that begins with a solid business plan and business model.
Writing a plan for your potential retail business will allow you to lay out the entire idea behind the business and work out where there are both opportunities and threats. It will also illuminate financial viability, lay a path to success, and will be a crucial piece of evidence when you seek funding.
Your retail business plan will include:
- Executive summary and business overview.
- Business structure and legal structure.
- Team and management role outline and hierarchy.
- Detailed depiction of your products and services.
- In depth market analysis.
- Comprehensive competitor analysis.
- Marketing plan.
- Sales plan.
- location of the retail space.
- Financial analysis.
- Future projections and goals.
By formally mapping your business plan out you’ll be prepared for everything that comes your way.
Develop your brand
A huge part of the appeal of a retail store is your branding. While online branding is equally important, there are more poignant challenges and opportunities for a brick-and-mortar store.
When someone passes by your retail store, you want to capture their interest, imprint your name in their psyche, and make your store is both inviting and memorable. You also want to communicate what you stand for – who you are.
Start by thinking about what you want your brand to communicate – who are you and what do you do?
Using this as a working mission statement, you can then develop a basic set of brand guidelines; which dictate a look and feel replete with colour scheme, logos, and fonts that speak to your business’s personality and identity.
Since the fit out of your retail store, including colour scheme, is wildly important, you may want to engage with a designer to really nail your logo signage and paint job.
Secure funding for your retail store
Stating a physical retail store in Australia will require a not-so-insignificant investment.
To go about funding your new venture you’ll have three main avenues available:
- Personal funding – your own money.
- Debt financing – a loan from a bank or financial institution.
- Investment financing – gaining investors to.
To secure funding from investors or through a loan of some variety, you’ll need a solid business plan to convince these third parties to grant you funds, so be sure you have your ducks in a row.
Choose a storefront location
Where is the easiest place to start shop? Have you determined the potential profitability of the area? Are the people you hope will frequent your store really interested in coming to the location you’re looking at?
Spend time exploring different neighborhoods — both to get acquainted with demographics and preferences and to look up nearby shops. Take into consideration your daily commute to your choice location and how much money is needed to do it. Select an easy area to reach from your residence.
Determine your niche and select products
Developing a unique retail market can help you distinguish yourself from competitors and corner some cash for yourself. Identify your target market and be sure you offer something unique and attractive.
Most big retail chains probably have similar products such as department stores and grocery stores. Providing a unique product selection, that has wide enough appeal to be viable is necessary.
Organise your business licenses
Every single small business needs a business license of some variety. The licenses you need will depend on your specific retail industry and operational needs.
Do some research into your field to determine what kinds of operating licenses you’ll require, then go about securing them.
Prepare a soft opening
Before you open your own retail business, arrange for a soft opening. A soft opening essentially opens up your shop to select people, such as by invite, or to family and friends, meaning you don’t have to make an important announcement (saving the balloons for big launches).
This allows you an opportunity to see what customers are saying about the store and helps your staff get comfortable with roles and systems. This also helps with the possibility of finding issues or solving problems before opening in earnest.
You can then put your effort behind a solid marketing strategy and can advertise your hard launch with confidence.
Get your POS systems in order
A POS system, or point of sale system, is the setup required to collect payments from customers. A POS can include eftpos machines, tap terminals, cash draws, receipt printers and a variety of other add-ons that make sense for your particular retail business.
To both collect and record payments, a POS system is a necessity. Once you’ve decided on what your setup will entail, be sure you integrate it with your chosen accounting software.
Why? So you can easily record and report upon sales and revenue. This will make taxes, compliance, GST, and BAS a breeze when the time comes. It also gives you a live view of your finances as you make sales.
Launch your online store
If you want to broaden your sales opportunity to sell your products, you may want to consider an online equivalent. A physical store, of course, can be rather limited in terms of sales scope, so why not sell online as well?
By offering an ecommerce alternative to in person sales, you can maximise your chances of sale for those outside of your local area, or for those who simply prefer to shop online.