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How To Open a Store
Starting your own retail store can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful store.
Importantly, a crucial step in starting a store is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
17 Steps To Start a Store
- Decide Which Type of Store To Open
- Choose the Name for Your Store
- Develop a Business Plan for Your Store
- Choose the Legal Structure for Your Store
- Secure Startup Funding for Your Store (If Needed)
- Secure a Location for Your Business
- Register Your Store With the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Store
- Buy or Lease the Right Retail Store Equipment
- Build Vendor and Supplier Relationships
- Develop Your Store Marketing Materials
- Purchase and Setup the Software Needed to Run Your Store
- Hire Staff
- Open for Business
1. Decide Which Type of Store To Open
There are many different types of stores that you can choose to open. The type of store that you ultimately decide to open will depend on a number of factors, including your budget, the location of your store, and the type of products or services that you plan to sell. Some popular types of stores include clothing stores, grocery stores, convenience stores, and department stores.
Just be sure to do some market research into your area to determine which type of store will work. You will also want to investigate the varying startup costs for each store to determine which ones are within your budget. You should choose a niche early on to make the rest of the startup process easier.
2. Choose the Name for Your Store
Once you have chosen which type of store to open, it is time to pick a name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your store:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your store.
3. Develop a Business Plan for Your Store
One of the most important steps in starting a new store is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your store.
- Company Overview – this section tells the reader about the history of your store and what type of retail business you operate. For example, do you sell clothing, cosmetics, or a variety of products? Do you offer online sales or only sell at a brick-and-mortar location?
- Industry Analysis – here you will document key information about stores within the industry you choose. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, where do they live? Are they in a particular income bracket? What do they look for when purchasing items like those you sell?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your store? For example, you might decide to use pay-per-click advertising, public
relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your business operations. You will also determine your staffing needs. Finally, in this
section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your store make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Store
Next you need to choose a legal business structure for your store and register it and your business name with the Secretary of State in each state where you operate your retail business.
Below are the five most common legal structures:
1) Sole Proprietorship
A sole proprietorship is a business entity in which the owner of the store and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a store together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a store include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a store is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your store, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
5. Secure Startup Funding for Your Store (If Needed)
In developing your store’s business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a store to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a store that they believe has high potential for growth.
6. Secure a Location for Your Business
The next step in opening your own store is to find the perfect retail location for your business. This can be a tricky task, as there are many factors to consider when choosing a retail space. You’ll need to find a space that is the right size for your needs and in a good location that will draw customers to your business. You’ll also need to make sure that you can afford the rent or mortgage payments for the space.
When searching for a location, it’s important to keep your target market in mind. You’ll want to choose a location that is convenient for your target customers and easy for them to find. You might also want to consider opening a store in a mall or shopping center, as this can give your new business exposure to a larger number of potential customers.
To find the right space, consider:
- Driving around to find the right areas while looking for “for lease” signs
- Contacting a commercial real estate agent
- Doing commercial real estate searches online
- Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space
7. Register Your Store With the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
8. Open a Business Bank Account
It is important to establish a bank account in your store’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
9. Get a Business Credit Card
You should get a business credit card for your store to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
10. Get the Required Business Licenses and Permits
Every state, county and city has different business license and permit requirements.
Nearly all states, counties and/or cities have license requirements including:
- General Business License – You need this to operate any type of business. The requirements vary by state, but generally you’ll need to file a short application and pay a small fee.
- Sales Tax Permit – You need this if you’re going to sell physical goods. You’ll need to register with your state’s revenue agency and collect sales tax on all applicable transactions.
- Liquor or Beer License – You need this if you’re going to sell alcohol. The requirements vary by state, but you’ll generally need to submit an application and pay a fee. You may also need to prove that your business is located in a designated “wet” area.
Depending on the type of store you launch, you will have to obtain the necessary state, county and/or city licenses. Be sure to check local guidelines and specific licensing requirements for the type of store you want to open.
11. Get Business Insurance for Your Store
Business insurance policies that you should consider for your store include:
- General Liability Insurance – You need this insurance to protect your business from risks such as slips and falls, customer injuries, and property damage.
- Product Liability Insurance – You need this insurance to protect your business from risks associated with the products you sell, such as defects and malfunctions.
- Property Insurance – You need this insurance to protect your store’s physical premises, including the building, inventory, and equipment.
- Workers’ Compensation Insurance – You need this insurance to protect your business from risks associated with your employees, such as on-the-job injuries.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
12. Buy or Lease the Right Retail Store Equipment
A store needs a variety of business equipment in order to function. This includes things like cash registers, shelving, and signs. In addition, a store might also need a computer, tablet, or another device able to run point-of-sale (POS) and/or inventory management software. Other items to consider buying include security systems, phones, store displays, cleaning and office supplies, and a credit card machine.
13. Build Vendor and Supplier Relationships
Part of the fun of running your own store is building relationships with vendors and suppliers who will help you stock your shelves and keep your business running smoothly.
You will first need to find vendors and suppliers who can provide you with the goods you want to sell. There are online directories, such as ThomasNet.com, that list manufacturers and suppliers by industry. Another option is to attend trade shows related to your industry and meet potential vendors and suppliers in person. Just be sure to research companies completely before signing any type of agreement.
Once you have some suppliers and vendors established, make sure to communicate clearly and quickly, pay your bills on time, and show your appreciation for good service. These tips go a long way in building and maintaining good relationships with vendors and suppliers from all industries.
14. Develop Your Store Marketing Materials
Marketing materials will be required to attract and retain customers to your store.
The key marketing materials you will need are as follows:
- Logo – Spend some time developing a good logo for your store. Your logo might appear on your storefront, be printed on receipts and shopping bags, and be used across all your marketing efforts. The right logo can increase customer trust and awareness of your brand.
- Website – Likewise, a professional store website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how your target market perceives you. A good website is also crucial if you plan to set up an eCommerce site to sell your products online in addition to your physical retail store.
- Social Media Accounts – Establish social media accounts in your store’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your store. Social media platforms are also great places to announce new merchandise and run promotions.
15. Purchase and Setup the Software Needed to Run Your Store
To open a store, you need to have the right software. This includes POS software and inventory management software. These programs can help you manage your store more effectively and efficiently.
POS software is important for keeping track of sales. It can also help you process transaction more quickly and accurately. Some popular POS software options include Shopify, Square, and Clover.
Inventory management software is critical for any store owner. It helps you keep track of what products you have in stock, as well as when they need to be reordered. Inventory management software options include Stockpile and Inflow Inventory.
Research the software that best suits your needs, purchase it, and set it up.
16. Hire Staff
You will probably need staff to help run your store. Employees can do things like handle customer service, stock shelves, and process sales. Start by writing a job description for each position you plan to fill. Then, post the job descriptions online and in any relevant print publications. You can also ask friends, family, and acquaintances if they know anyone who might be interested in working for you.
Once you have a few candidates, invite them in for interviews. During the interviews, be sure to ask each candidate questions about their experience and qualifications. You should also give them a chance to ask you any questions they may have. After the interviews are complete, choose the candidate you think would be the best fit for each position.
17. Open for Business
You are now ready to open a retail store. Hosting a grand opening is a great way to introduce yourself and your new store to the local community and bring in potential customers.
If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
How to Finish Your Store Business Plan in 1 Day!
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How to Open a Store FAQs
The simple answer is no, starting a store is not hard. The more accurate answer is that it depends on what you are trying to sell, how big of an operation you want to run, and most importantly - whether or not you have a good business plan.
If you want to open a small retail shop, then the process is relatively straightforward. If you're selling products that you make yourself, then you'll also need to create a product line and manufacture your goods.
The biggest challenge you'll face when opening a store is making it successful. This means attracting customers, getting them to buy from you, and then keeping them coming back. It takes a lot of hard work, dedication, and marketing savvy to make a store thrive.
If you're up for the challenge, then opening a store can be a very rewarding experience. Not only will you get to be your own boss, but you'll also get to create a space that reflects your taste and personality. Plus, you'll have the satisfaction of knowing that you built something from scratch and made it successful. Following the steps outlined above is a great place to start.
If you're wondering how to open a store with no experience, the process may seem like a challenge. However, with careful planning and execution, it is possible to start your own retail business successfully. The most important thing you can do is research. Investigate the retail industry carefully and the specific features of whatever type of store you want to open. You should also look into the area in which you want to open a store to make sure there is a good fit and customers who are willing to purchase your goods. It might also be worthwhile to look into classes or online courses for retail management.
There are many types of stores, but some are more profitable than others. Some of the most profitable stores sell items like jewelry, luggage, and clothing. These items may not work in every market, however, and the best thing you can do to increase your chances of making a profit is research what customers in your area want to buy.
The cost of starting a store can vary greatly depending on the type of business you want to open. For example, a small retail shop will have different costs than a large department store. Additionally, the location of your store will also affect how much it costs to get started. Generally speaking, it is expensive to open a store in a major city like New York or London. However, you can find cheaper locations if you are willing to open your store in a smaller town or city.To get an idea of how much it would cost to open a specific type of store, you can research the average costs for opening that type of business. Additionally, you can speak with other store owners to get an idea of how much they spent on start-up costs. Finally, you can also consult with a business advisor or accountant to get a more specific estimate of the costs associated with starting a store.
From rent and utilities to inventory and staffing, there are a lot of different factors that can affect your store's bottom line. Some of the most common expenses:
- Rent - For many businesses, rent is one of the biggest ongoing expenses. The amount you’ll pay will depend on the size and location of your store.
- Utilities - Whether you have a physical storefront or an online store, you’ll need to pay for utilities like electricity, water, and trash service.
- Inventory - In order to keep your shelves stocked, you’ll need to regularly purchase inventory. The cost of inventory can fluctuate based on market conditions.
- Staffing - If you have a physical store, you’ll need to hire employees to staff it. In addition to their salaries, you’ll also need to pay for things like workers’ compensation and payroll taxes.
- Marketing - To help drive traffic to your store, you’ll need to invest in marketing and advertising. The cost of marketing can vary depending on the type of campaign you run.
- Insurance - To protect your business, you’ll need to carry insurance. The type and amount of coverage you need will depend on the nature of your business.
These are just a few of the many ongoing expenses that you’ll need to contend with when you open a retail store. By understanding the costs associated with running a business, you can better prepare yourself for success.
There are a few different ways that stores make money. The first and most obvious is through sales of merchandise. When customers come in and purchase items, the store makes a profit off of the difference between the cost of the item and the selling price. Retail businesses also make money through services they may offer, such as gift wrapping or alterations. Finally, some stores make money by renting out space to other businesses, such as ATM machines or vending machines.
The answer to this question largely depends on the type of store you want to open, your location, and the level of competition in your area. However, with the right planning and execution, owning a store can be a very profitable endeavor. Just be sure to understand your expenses and make sure there is a market for the type of store you want to open in your area before you begin.
There are many reasons why stores fail. Often, it is because the store owners did not do their homework and research the market before opening their doors. They may have picked the wrong location, or they may have overestimated the demand for their product. Other times, retail businesses fail because they simply cannot compete with the big box stores or online retailers.
Planning for the launch of your new store requires strategic thinking about how the launch will support the ongoing operation of the store into its first year. This long-term thinking should keep the planning of the launch event from becoming simple party planning.
Coordinate the Pieces
Many different, separate projects must reach completion by the time of launch to make sure it goes off without a hitch. The improvements to the store’s space must be completed, including all interior and exterior renovations and the placement of displays and equipment. Inventory must be purchased and put on display. Staff must be trained and ready to work. The systems (software, hardware, and human) for sales, accounting, and store maintenance should all be in place and tested.
Most stores publicize a launch event, whether it is a short reception, day-long event, or sale for a week or more. For a successful launch event, always keep in mind that the purpose is not for the management and staff to celebrate, but to make customers and the community aware of your opening and to jump-start sales by encouraging them to try your products. To do this, concentrate on how to get potential customers to attend the launch event and on how to treat them when they arrive.
Marketing for the launch event can use many of the same promotion tactics that the business will use on an ongoing basis, such as:
- social media marketing
- print advertising
- public/press relations
- direct mail
Furthermore, signage on the exterior of the store in the weeks and months before the event can raise awareness, as can signage once the opening event is underway.
Also, be sure to put together an invite list weeks before the event. Invite prominent members of your community to attend and ask them to invite others.
To create a festive atmosphere, stores often use standard party decorations, like streamers and balloons. However, it may be more strategic to put this money towards free samples, gifts with purchases or some other type of enticements and thank yous to the store’s first customers. The point is not just to create buzz leading up to the launch event, but for the launch event to create buzz which builds customers as the store moves into regular operations.
The first step to opening a store is to develop your retail store business plan. Growthink provides products and services to help you develop a professional business plan and turn your dream into reality.
How to Finish Your Store Business Plan in 1 Day!
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