14 June 2020
Opening your own store is not as easy as it seems. Many entrepreneurs have no idea what's coming after the opening. We have prepared 5 basic rules to consider when opening a retail store. Check if you have taken everything into account.
Ilya Guzhov, Head of the JoinPAY direction, tells us.
What should I consider when opening a store?
1. Location
The first thing to consider when opening a store is the correct combination of the store's profile, target audience, and location. The old 3L rule - "Location, Location, and Location again" - works just fine for retail. Here it is very important to determine what the store is, what assortment it is going to sell and what its target audience is.
I will explain by example how to select and what risks there may be.
For example, you found a great place to open a store and there is excellent pedestrian traffic. But if you are going to sell construction and finishing materials, then I can disappoint you - pedestrian traffic is not suitable for you because construction materials are bulky and heavy goods. On foot or on the bus it can only be transported only by our self-sacrificing grandmothers and only in few cases. That's why you need car traffic for such a store, somewhere on the motorway. The same story with hypermarkets: the days when they were a novelty and people went there to wander for hours between the shelves to stare and buy a pack of butter are long gone. People go to hypermarkets on weekends, by car, to stock up.
Or another story – you decided to open a butcher shop in a place with excellent pedestrian traffic, but – in the center of the city. It would seem to be excited about sales. But: in the center, people usually work, and it is a strange story to buy meat "on the way from lunch" so that you can carry it with you all day or keep it at your workplace. It is better to open a butcher shop in a residential area. But if you open a gift shop in the center, everything will be different: people on their way from work in the evening on their birthday will go for gifts and even on weekends they can specially come to the city center, because there are usually such stores and buy a gift more likely than in a residential area.
2. Environment
The second thing to consider when opening a retail store and carefully analyze is the environment.
For example, we realized that we wanted to open a fish store and chose the right place. Now you need to look at what is being sold around you to see if your neighborhood will increase or decrease your sales. A good traffic booster for a fish store will be the neighborhood with a bread store, or a wine store because your product neighborhood fits perfectly into one consumer basket. The buyer will buy a set of some goods in close stores and will definitely look at you. There are some risks. And not just because of the customer's need, which he came to meet here. For example, for a store that has alcohol in its assortment, there is a risk of being in the neighborhood of a kindergarten or clinic and being safely closed or redeveloped. Because according to legal requirements, alcohol can only be sold at a certain distance from these public institutions.
3. Staff
Also, the risks of opening a store can include staff. The fact is that high-quality staff in the store, who are able to smile normally when communicating with customers, maintain cleanliness, and put goods on the shelves on time, can increase the store's revenue up to two or three times. And to lower it by the same amount if he is not able to do so.
4. Suppliers
The risks of opening a retail store can also include suppliers of products that you have decided to work with. They may fail to deliver and you will find yourself with empty shelves, or put low-quality goods. Careless supplier selection can kill the entire operating profitability of any store. Therefore, it is important to choose a supplier that is sufficiently modern and technological, which will be able to provide you with the right assortment at the right speed.
Many suppliers currently use modern technologies for this purpose. For example, they can use data about sales from the Cash Register and product balances in the store for the timely replenishment of a certain category of products. They can get all the necessary data from your inventory program and remove the entrepreneur's supply headache by taking over this function entirely.
5. The specifics of the region
We can also talk about some regional specifics, which should also be taken into account when opening a store. For example, Moscow traffic and Moscow specific consumption patterns are very different from the regions. In Moscow and major regional cities, the "to go" format of food consumption is developed, because there is sufficient customer traffic, and there are many visitors who would like a quick ready-made meal.
Or, for example, the opening of the restaurant of extra class or with a specific food (Mexican). In a large city, the financial capabilities of residents are different – they can afford to visit such a restaurant often enough. But in any city of the second or third echelon, you are unlikely to find hotdogs and coffee booths at every step, and the opening of "Astoria" is unlikely to justify itself. And this should also be taken into account when starting a retail business.
Conclusion
Your business requires careful consideration of every detail, and sometimes the entrepreneur does not have time to collect sales data and compile reports. JoinPAY Smart Cash Register will help you solve this issue.
JoinPAY Smart Cash Register is an online sales register (with or without hardware) with the ability to manage sales, keep product records, and a cloud-based personal account for the manager, where reports on sales, revenue, profit, and product balances are available.