If you are opening up a new retail store or other small business this is probably an exciting and terrifying time. Of course you want to succeed, be profitable and stay afloat. These are struggles many small business owners face. So how do you not become one of the many failed small businesses out there?
Make sure you have saved enough money before taking the plunge. Depending exclusively on loans, whether from family or the bank, can be dangerous. Work to save as much of the required investment money as possible, including your living expenses for the first couple years. Your business will most likely not be profitable for 1-2 years.
If you are opening a store, start small. You don’t need to immediately rent out a huge space or a giant warehouse. Find a smaller location and only stock store shelves with what you need. Once business starts to pick up you will be able to relocate down the road.
Keep personal assets safe. If you are opening a business alone you are most likely the person that will be liable for all lawsuits and debts aimed toward your business. This includes business loans, taxes, money owed to suppliers and landlords, and lawsuits. If you haven’t taken proper precautions, a creditor can go after your personal assets, such as your car and your house, to pay for these debts. You will need business liability insurance, but this won’t save you from business debts. If you foresee your business incurring larger debts, you should consider forming a corporation or limited liability company (LLC). It only takes one person to form either of these types of businesses.
Create your business plan. For the majority of small companies, the main portions of a business plan include the break-even analysis, a profit-and-loss forecast, and a cash flow projection. You must understand your profits in order to make a business plan. You should be able to nail down how your business plans to make a substantial profit. To begin, you need to know your costs: how much inventory will cost, rent payments, pay for employees, and the many other costs you will most likely come across. This will allow you to figure out exactly how much you need to sell each month, for how many dollars, to cover those expenses and have a substantial profit.
Be the best in your industry. Obviously everyone thinks they are, or wants to be, the best, but you need to try and stay above the competition at all times. Keep a pulse on your industry, find out what is popular and what you can do better. Sell the best products, see if you are able to produce or distribute your product more efficiently. If these kinds of things are out of your control, always offer the very best customer service.
Keep documentation and pay bills on time. Any agreement you go into with a contractor, landlord, employee, etc. should be in writing and filed away. Scan in documents and keep them in a database to avoid losing track of important paperwork in a sea of files. Make sure you pay all of your bills on time if not early and be extra mindful of payroll and taxes.
Hire a trustworthy staff. Be picky when hiring employees. Ask for resumes and references and actually call those references. Work references are best because they are less biased than personal references. Treat employees fairly and with respect to keep them happy and working hard. Keep the workplace upbeat and positive. Not only will this benefit you by keeping good workers happy, it also rubs off on customers. No one wants to be shopping and hear quarreling between co-workers or a manager belittling an employee.
Remember, there are experts in the industry that can assist you with planning for your new store. Contact us today for guidance to get you started.