The CoVid pandemic has created lots of challenges for business owners, across the world. In particular, for retailers. Many of them had to shut down for long periods. Then, had to cope with reduced foot traffic because of social distancing and restricted opening times.
At one point, in the UK, the High Street was losing an average of 48 stores per working day. Around 17,500 chain stores did not open once lockdowns were lifted. In the USA, a record 12,200 store owners filed for bankruptcy.
The pandemic has created space for new retail players
Yet, quite rightly, this is not putting entrepreneurs off of opening new retail outlets. Far from it. They recognize that gaps on the High Street, Main Street, or in malls represent a huge opportunity.
- The cost of retail outlet leases is low
- Many local councils are offering incentives to encourage entrepreneurs to open new stores
- There is less competition
- Studies show consumers are planning to return to making a significant percentage of their purchases in physical retail outlets
- People will always prefer to touch and try out certain categories of products before buying
Leverage your advantage
Our first tip is to recognize that right now it is a buyer´s market. Property owners are desperate to fill their empty units, so it is far easier than normal to negotiate a good deal on your rent. As it is on the purchase price of most retail units.
Related: 7 Things to Keep in Mind Before Opening A Sunglasses Store
Getting the basics right still matters
However, that does not mean that an entrepreneur can afford to throw caution to the wind. It is still vital to take your time when deciding where to locate your new store. You need to consider the following:
- Location – it needs to be somewhere the people who are likely to buy your products or services regularly go to. New businesses are always heavily reliant on passing foot traffic.
- The right facilities – you need to be close to good transport links and/or parking. Your store has to be able to easily accept deliveries, have a reliable power connection, a layout that works for your business, and room for expansion.
- Low enough overheads – it is all too easy to get carried away and lease an outlet that is too expensive. Doing this is a recipe for disaster. There´s a bit more advice about managing costs in the financing section of this article.
- The right contract – modern businesses need to be able to quickly pivot when market conditions change. Consider this before signing a long-term lease that may be difficult to get out of.
Financing your retail outlet
Buying a retail outlet or leasing one is a huge investment. So, it is vital that you do your research and cost everything out in full. Then, set a budget for finding an outlet, kitting it out, and opening it. Including some contingency cash. It is virtually impossible for this process to go 100% to plan. So, you need to have funds to fall back on and build some breathing space into your budget.
Be careful about finances if your business is a seasonal one
It is important to factor in cash flow. In particular, if your business is a seasonal one. Unless you have the money in the bank, you do not want to try to spend a lot at a time when you do not have much cash coming in.
You also need to think about how you will cover the rent and other expenses each month. Proprietors do not wait for months before taking legal action against business tenants who do not pay the rent. So, if you are used to delaying the payment of certain invoices until a time of the year when sales naturally rise, be careful. Don´t just assume you will be able to do that with rent and store utility bills.
Create a step-by-step checklist
Opening a retail outlet, especially your first one is a manic experience. The list of things that need to be done is huge. Often, timescales are tight. So, you have to be organized to stay on schedule and budget. But be aware that you will have to add to it. For example, if you are opening a restaurant and are planning to use gas you will need to get the relevant certification to do so. That kind of detail is not included in this list. It is a catch-all checklist that will act as a guide.
Market your store effectively
The above is an overview of what you need to consider and do when opening a physical business outlet. If you are looking for the ultimate guide for opening a retail store, simply click the link. It covers in-store marketing using digital signage and other tools in great depth.
