“Main Street” has now
become a generic term synonymous with U.S. small business in general. But
for many entrepreneurs, the prospect of joining Main Street in its more literal meaning –
i.e. the primary retail street of a village or town – still holds an enormous
amount of appeal as a business venture.
the right amount of market research, business planning, and financial support,
starting a retail business (and joining the more than 24 million people who
earn a living this way) can offer many rewards to the right kind of
how do you go about starting a retail business?
are some steps that you will need to follow (from a business planning,
structure, and legal perspective) to open and operate a successful retail
1. Determine which
Type of Retail Business Model is Right You
you’ve developed a business plan and have an idea of what it is you wish to
retail, you will need to decide which type of retail model is right for you.
Traditional choices include store retailing, online
retailing, non-store retailing
(such as door-to-door sales, mail order, etc.) or a combination of any of these
may also want to consider whether you want to launch your own retail business
or buy into a franchise opportunity. Both have advantages and disadvantages
(which I won’t go into in this post). But, if you consider going down the
franchising route, this guide from Business.gov offers helpful advice on buying and
evaluating a franchise and tips on how to avoid common scams.
2. Find the Right
a new retail business you definitely need to be where your customers are – and
almost certainly need to get it right first time.
location you choose should dovetail onto the type of retail trade you are
starting. For example, a jewelry store might not sit comfortably or profitably
in a suburban strip mall, whereas an organic pet food store might. Check local
demographics including employment statistics, consumer statistics, and more
using these guides
from the government.
also need to check local zoning laws,
even if you want to operate a home-based retailing business – many local
governments restrict what business can be done from home.
all, when it comes to location, you’ll want to ensure you combine visibility,
accessibility, affordability and commercial lease terms that you can live with,
through the good times and the bad.
more advice and tips from Business.gov on choosing
a business location.
3. Finance your Retail
entry costs for retail can vary. If your operation is online or home-based you
may not need as much access to capital as a Main Street store-based retailer. Either
way, you will need funds to support start-up costs such as inventory, fixtures
and fittings, marketing and advertising, as well as employee salaries, and so
you don’t qualify for traditional bank loans, you might want to look to a
government-backed loan. What this means is that the government – through the Small Business
Administration (SBA) – provides a
guaranty to banks and lenders for money lent to small businesses, rather than
lending the businesses money directly. Don’t even think about a federal
government grant as an option — the government doesn’t offer grants to
for-profit businesses; there is no such thing as free money.
are many different types of loans, including the SBA Express Loan that
offers small businesses the chance to get an SBA-backed loan of up to $350,000
to start-up or expand. The “express” piece refers to the fact that your loan
can be turned around in 36 hours.
4. Determine Your Business
Structure – Do you want to go it Alone or in Partnership?
worth thinking about. If you don’t have family or friends who can help out with
the day-to-day logistics of running a retail operation, a business partner can
help. They can also help share the risk. Check out this earlier blog post: “Is Business Partnership Right for You?”
more information about business partnerships, as well as other alternative
business entities such as corporations, LLCs, etc. – and how to go about
setting them up – refer to this Business
5. Take Care of the
Regulatory Requirements involved in Starting and Operating a Business
doesn’t matter whether you are starting a retail business out of your home or
on Main Street, there are several regulatory and legal fundamentals that you
must attend to. This is where many small business owners stumble. What laws
apply to your specific business; what licenses and permits are required; what
happens when you need to hire your first employee?
very easy to navigate guide – 10
Steps to Starting a Business
– (from the government) walks you through the essential steps you must follow
to make sure you properly plan, prepare and manage your business.