Ivan is an energetic ambivert with a passion for creative writing, music, languages and technology. He loves writing about small businesses and startups, and is on a constant mission to help you make the most informed choices about the various aspects of running your own business. In his free time, he enjoys playing and listening to music, biking, cooking, reading novels and playing video games.
If owning your own retail business is your vision of a perfect career, you are not alone. With over one million retail businesses in the US alone, retailers thrive in online and real-world environments. Moreover, the opportunities for SMEs and micro-businesses have never been greater. However, opening a small online retail business - with or without a brick-and-mortar store - requires a lot of strategic planning and hard work. So, how to start a retail business in this day and age? Check out our guide, which will take you through all of the steps needed. Is Opening a Retail Store Right For You? Before looking at names for your proposed venture, you must look at the pros and cons of retail to determine whether it is a suitable business model for you. Whether you’ve been planning to start a retail store for many years or it’s something that has emerged following career problems during the pandemic, there is a lot of potential for entrepreneurs looking to enter the arena in 2022 and beyond. Here are just six eye-opening statistics to highlight that: Total global retail sales generated over $25 trillion in 2021 and are anticipated to top $26 trillion in 2022 Total eCommerce sales for 2021 were estimated at $870.8 billion, showing a CAGR of over 14% compared to 2020. Over 98% of all retail businesses in the United States are small firms with under 50 employees. Small to mid-sized retailers have a gross margin of 51% on average. The retail industry accounts for more than 18% of America’s total gross domestic product (GDP). Small to mid-sized US retailers complete an average of 482 transactions per month. As the statistics above show, this is an excellent time to consider starting a store. Small retail businesses might not always grab the headlines, but they continue to be the backbone of the retail sector and can achieve significant and stable profits. Moreover, running a business of your own puts you in control of all important work-related matters. However, be prepared to face a number of challenges. Before looking at how to become a retailer, it’s important to be honest with yourself. There will be long days ahead, particularly in the pre-launch phases. You’ll also need a passion for what you sell and the ability to manage your team effectively. Likewise, you’ll probably have to utilize both eCommerce and traditional selling methods to achieve your business goals. Still, the best candidates for starting a retail business have never had it better. 12 Steps To Opening a Retail Store in 2022 If you are going to open a local store or a small online retail business, it’s imperative that you do it properly. After all, retail companies are prone to the same failure rates (20% in the first two years) as companies in any other industry. With the right strategy, though, your business will have a much higher chance of thriving in the highly contested retail market. When starting a retail business, these tips will point you in the right direction. Step 1: Find Your Niche Retail is a very broad term., which is why researching the industry and finding your place in the market is the first step you’ll need to take. The results will influence everything from where you look to gain inventory for retail startup stores to guiding your target consumer profile. Finding the right niche is the perfect platform to build your upon. Very few retail businesses boast a universal appeal. So before starting an eCommerce site or opening a store, you should do the following; Try to create a business you are passionate about. Working on something you love will make tough times seem more manageable, while your enthusiasm can rub off on consumers and workers alike. Think about potential obstacles, particularly in the early stages of running a company. Knowing the pros and cons of retail will make a huge difference. Research the profitability of your niche by looking at Google Trends and other online industry insights. If there is no demand, you’ll need to look elsewhere. Research the competition. Before starting a store, you can learn valuable tips about what to do - and, more importantly, what not to do - as a business owner. Consider whether there is a gap in the market or an area that has shown potential for future growth. As a business owner, whether you’re in the home decor retail, fashion or food industry, or just about any other niche, there are three main ways to attract customers. You can either bring something entirely new to the table, improve on the quality currently available on the market, or undersell the competition. Step 2: Write a Business Plan Many entrepreneurs (not only in retail) will create a basic business plan because they have no experience writing one and don’t realize its importance. In reality, the document is something that provides continued guidance and clarity as you look to turn a vision into a successful enterprise. A good business plan can increase the chances of growth by as much as 30%. You may use a lean startup business plan or a one-page retail business plan if you have a very clear idea of what you are doing. A more thorough approach is necessary if you also need funding. Your plan must: Include an executive summary with a company description and a look at the internal organization and management. It should also have a market analysis, a product line, marketing and sales information, funding requests, financial projections, and an appendix. Detail the challenges you’ll face and what makes your offline or eCommerce retail business unique. Accurately outline your retail startup costs. Detail your intended hiring process, even if you run a home-based online retail business powered by outsourced workers. Follow a suitable format. The business plan is made for your benefit as much as for finding potential backers or partners. Besides, adopting good organizational skills and an analytical approach at this stage will serve you well throughout the process to come. Step 3: Finance Your Business If you’re wondering how to open a retail store with no money, the good news is that there are options available. Making the business a legally sound operation costs next to nothing while online retail startup costs are very low too. Meanwhile, almost a quarter of retail sales are facilitated by drop shipping, which highlights an excellent opportunity to avoid stock costs. With that said, you’ll still need some funding to get the company rolling - even when you expect to see quick returns. Some good funding options include: Crowdfunding from friends, relatives, colleagues, and even strangers online Bank loans SBA business grants and loans Small retail business credit cards Private investments/angel investors. You must have a clear understanding of the total retail startup costs and always give yourself a buffer of at least 10% over the estimates. There is nothing worse than failing even before you got the venture up and running because you underestimated the expenses. Step 4: Register The Legal Entity Your ideas for a retail business are little more than wishful thinking until you’ve officially registered the company. You must first familiarize yourself with the different types of entities you could register. In most cases, it will be either a sole proprietorship or an LLC, but partnerships and corporations are options too. The registration process is these days quicker and more convenient than ever before. Nonetheless, you’ll need to complete the following steps; Check your proposed business name against trademark filings in the US Patent and Trademark Office. Establish a detailed description of the business. Register for your Federal Tax ID or Employer Identification Number so that you can work and employ a team. Satisfy any state insurance requirements. Set up a retail checking account for the business. This part of the process will impact everything from your level of legal protection to the process of receiving funding. It will also determine the way the income will be taxed. With this in mind, it is often advised to use an accountant or financial advisor to handle this part of the process, especially if it’s your first venture. Step 5: Develop Your Brand Personality There are almost two billion websites online, and many of them are from competing retailers. If you want your retail store website to stand out from the crowd, you must develop a winning brand personality that resonates with your audience. Again, knowing your niche will be essential. It takes an average of seven touchpoints to create brand awareness, and prospective leads and clients will form opinions based on several factors. So, you must look to perfect the following: The brand’s visual elements including the logo, color schemes, website design, and more. The layout of a store. When opening a storefront, you must also focus on the signage and window displays. Likewise, your website must have the right landing page. Your mission and vision statement will define what you are and how you want to serve your community. Two-thirds of customers want to use brands that share their views. Your brand story. It should present the people behind the company earnestly and be something people can relate to. Brand positioning: formal versus informal, budget-friendly versus premium products, etc. A well-defined brand will help you select the right products, target the best audience for your niche, and perform more consistently. Step 6: Gain a Business License For Retail Obtaining the appropriate business licenses for your shop or retail store website might not be the most exciting aspect of launching your company. Still, it is one of the most significant steps you will have to undertake. It will ensure compliance and help you avoid penalties ranging from fines to enforced closure. To make your business compliant even before opening its doors, you must ensure that you: Get a sales permit from the state, allowing it to actively sell products and collect sales taxes Gain an online retail license (if applicable) that reflects the type of products you are planning to sell Secure product-specific permits (if applicable) for items like alcohol Acquire any local government-issued sign permits and certificates of occupancy for your brick-and-mortar store Secure any appropriate exporting licenses if you plan on having your eCommerce retail business selling internationally. You will also need to consider issues like COVID-19 mandates and health and safety signage. While primarily thought of as an issue for physical stores, online retail companies may still need to take note for the sake of their workers. At this stage, it will be worth finding the right business insurance too. Step 7: Assemble A Winning Team New retail businesses are unlikely to have an HR team, especially when it’s a home-based online retail business. But that doesn’t change the fact that assembling a great team is one of the most important tasks you’ll face. There is a long list of workers you may need, from factory workers to shop floor assistants. When starting a retail business, this is one area where you will have plenty of options to consider. You can: Hire permanent on-site workers like store salespersons and office workers Utilize remote workers Partner with courier services and order fulfillment teams, as well as IT and cybersecurity experts Utilize the gig economy to find short-term contractors for issues like graphic design Use work placement schemes and internships to manage your staffing budget. Not all of your employees will be needed right away. Even so, it’s essential to plan ahead so that your retail business keeps running smoothly. Otherwise, you could hit numerous setbacks along the way. Step 8: Know Your Products Finding the right inventory for a retail startup can be tricky. Whether it’s a greenhouse retail business or a food venture, you need to prioritize top-shelf goods to make a dent in the market. Ultimately, you will achieve nothing if the product quality isn’t up to scratch. Returning customers spend 33% more than first-time visitors. Giving them a reason to return is vital, and products are the answer. There are various options at your disposal. If looking at how to start a fashion retail business, for example, you may wish to; Design and manufacture the products in-house Take your designs and outsource the manufacturing to another company Consider selling existing garments as a reseller Dropship or look to affiliate marketing Create a combination of two or more of the methods given above. Whether it’s fashion or not, you need to focus on quality and be able to provide a wide range of options for consumers. Don’t forget about product personalization, though. 93% of B2B professionals believe it has a significant effect on revenue growth, so it’s definitely worth considering. If using outside vendors, be sure that they are trustworthy and will represent your brand well. Step 9: Develop Your Physical & Online Stores When starting a merchandising business, you have to create the right store to attract traffic. For a brick-and-mortar store, you’ll need to find a location where foot traffic is viable without spending a fortune. It’s important that your retail store website ticks a number of boxes. You need to: Check that your web host offers excellent uptime. Nearly 90% of consumers won’t return to a site that delivers a poor user experience. Make the website visible. Search engines are the number one source of online traffic, especially from consumers prepared to do some shopping. The website uses a suitable CMS and has a layout with clear navigation to product pages. Utilize several landing pages. Creating 30 or more can bring as many as seven times more leads. Support your website with social media marketing and PPC. In short, your online store is a storefront and shop floor at the same time. If you do not make the right design and marketing choices, even the best products will fail to convert leads to sales. Conversely, an attractive-looking store that’s easy to navigate keeps users interested for longer, translating to more revenue. Step 10: Consider Third-Party Selling Even with a strong marketing strategy, it will be difficult to get people to find your store at first. Therefore, you may want to consider starting an Amazon retail store too. Around half of all US eCommerce goes through the platform. You’ll still be competing against other companies, but displaying your goods in the largest shopping window around will give you a better shot at success. You may find that consumers buy from Amazon at first because they trust it more than a newly opened store. Give them time, though. Here are some things you can do to draw potential prospects in faster: Ensure that all product images make a big impression Focus on creating backend search terms Utilize your product descriptions to tell your brand story. Look for social media integrations and social influencer marketing. Other popular options include Etsy, eBay, and Walmart. However, the right choice will depend largely on the type of products you sell. Step 11: Find The Right Retail POS If you want your in-house retail store website or physical store to perform well, you’ll need to use a variety of tactics. Partnering with another local non-competing business or playing an active role in the local retailer community will help greatly. You should also consider your retail POS system carefully. Omnichannel integration works great for retailers in both eCommerce and offline ventures. Here are some other factors that you’ll want to consider at this stage: Online consumers want multiple payment options. You never want to lose a sale because someone is unable to make a payment. eCommerce sites that offer repayment models will open their doors to bigger client bases due to the added flexibility they provide, but this could easily be a trap if your finances aren’t solid. Mobile POS terminal payments have become increasingly common, especially with local retail businesses. You will need a quality retail POS system to boost consumer satisfaction and sales. POS terminals can now integrate with customer care, order fulfillment, and other features to deliver a better UX. Even as a new retailer, you must look to set high standards right away. It is the only way to win new customers and set the foundation of a long-lasting relationship that will see them spending big on your brand in the years to come. Step 12: Make an Advertising Push Before Opening Your Doors At this stage, you are finally almost ready to open your doors and start selling products. A good local advertising campaign for a brick-and-mortar store will go a long way towards generating hype for your products. The same goes for your online store, which you’ll need to advertise well on social networks and in the relevant forums and chat groups. At this stage, you should know your target audience well and can make the most impactful advertising campaign. Further Reading Cross-selling vs. Upselling: What Is the Difference? Best LLC Service: The Top Companies The Best Website Builder: Our Top Picks Final Words Thousands of entrepreneurs will start an eCommerce retail business this year, while many more will open brick-and-mortar stores. While some will be destined for failure, those who take all the necessary steps to prepare properly and enter their niche with the right attitude will see their retail business thrive and generate profits quickly. Consumers are far more interested in quality products, customer experience, brand authenticity, and corporate responsibility than the brand's size. Find the right audience and meet their needs well, and success should follow.
Some people may confuse eCommerce with eBusiness and vice versa, but while the terms sound similar, they are in no way interchangeable. Understanding the distinction between these can make all the difference. With online retail shops generating 14.34 billion visits in March 2020, both branches of commerce are precious. In short, this article will answer the question: “What is the difference between eCommerce and eBusiness?” What Is eBusiness? With tech becoming integral to practically every aspect of our world, it's normal for businesses to implement tech-driven strategies. This may make it difficult to tell which companies are eBusinesses, but essentially, you could say most businesses are. The eBusiness definition states that any business carrying out its activities via the internet is an eBusiness. From buying raw materials, manufacturing goods, facilitating financial transactions, and product exchanges, so long as a business activity has been done through the internet, it counts as an eBusiness activity. These activities can be carried out through the internet, intranet, or extranet on apps, websites, enterprise resource planning (ERP), and customer relationship management (CRM) software. To identify an eBusiness, we can consider some case studies. Elements of an eBusiness Email Marketing Using email communication to foster relationships with existing and potential customers is a significant element of the eBusiness model. Marketing via email is an essential part of that. Digital Management Tools Digital tools take otherwise physical processes and carry them out online. For example, handling workflow processes with content teams can happen through online documents instead of a physical, paper-fueled system. Because these processes have been carried out electronically instead of physically, any business involved is essentially an eBusiness. Creating and Selling Online Tools Building systems for digitizing business activities, such as inventory management, is a form of eBusiness. The creators of such systems have facilitated the means to carry out business processes electronically, making them an eBusiness. Other eBusiness examples include setting up online stores, facilitating customer education, supply chain management, buying and selling products, and financial business transactions. If a business offers a service or product physically, it qualifies as a standard business. However, if it incorporates tech elements, such as providing services online, it's also an eBusiness. Bear in mind that there are two types of eBusiness models: Bricks and Clicks/ Bricks-and-Mortar (omnichannel) and Pure Play. Omni-channel companies use both offline and online resources to facilitate business activities. In the Pure Play model, business activities are strictly conducted online. What is eCommerce? The eCommerce definition is simple: The term refers to businesses selling goods or services online. In today's world, many products - like movies, music, and books - are bought and sold chiefly through eCommerce platforms. Popular eCommerce examples include retail platforms like Amazon or eBay. An eCommerce sale will typically include all the usual trading elements: You order a product, pay for it, and then have it delivered to you. You may also order a product and opt for in-store pickup, or decide to pay either via card online or in cash when your order is delivered. ECommerce has expanded over the years, across both websites and apps. Some businesses decide to combine their web pages and apps with virtual marketplaces as points of sale. More exposure is good, after all. No matter where a customer buys a product, it's all a part of eCommerce. Just like eBusinesses, eCommerce has various models. The types of eCommerce are: Business-to-Business (B2B) A B2B business model is a form of eCommerce where a business provides products and services to another company. For example, companies that manufacture goods like batteries, car tires, door locks, and hoses sell them to companies in the automobile industry. Another example is video production companies whose services aid the marketing campaigns of other companies, or tech companies that make accounting software for companies. The B2B eCommerce model involves a business serving another business environment. Business-to-Consumer (B2C) The B2C eCommerce model involves businesses selling products and services directly to individuals. These end-users are called consumers. An example of a B2C model is a clothing store selling fashion items to the public online. Most businesses use their own websites to facilitate these transactions, but that can be costly to design and host. Luckily, cheap effective solutions are available through eCommerce website builders. Consumer-to-Business (C2B) It might sound surprising, but the C2B relationship actually exists. In the consumer-to-business model, consumers sell services or even goods to businesses. An excellent example of the C2B model is influencers giving reviews and suggestions after using a product. Other times, paid consumer focus groups can test the products, and the business uses these suggestions to further improve the product. Consumer-to-Consumer / Customer-to-Customer (C2C) This is an eCommerce business model where consumers sell their products and services to other consumers, usually through a platform online. A famous example of the customer-to-customer model is the freelance gig market, where individuals sell services like data analysis, content writing, voice acting, web design, or even software development to other people. Platforms like Upwork and Fiverr facilitate these eCommerce transactions, charging a fee on the payments made. eCommerce vs. eBusiness Let’s break down the differences between these two seemingly intertwined terms. eCommerce eBusiness 01 The eCommerce definition refers to carrying out commercial activities and transactions over the internet. The definition of eBusiness refers to conducting all and any business activities online. 02 eCommerce is a subset of eBusiness. eBusiness is a broader concept than eCommerce. 03 eCommerce activities include the purchase and sale of products, as well as making financial transactions on the internet. eBusiness activities include buying raw materials, manufacturing goods, and facilitating financial transactions and product sales on the internet. 04 eCommerce usually requires a website or an online platform. eBusiness needs more than just a website. It needs multiple web platforms, enterprise resource planning (ERP), and customer relationship management (CRM) software. 05 eCommerce works on a Business to Customer (B2C) model eBusiness works across all models, so long as they’re on the internet. From all this, it should be clear what the differences between eCommerce and eBusiness are.
With a point of sale (POS) system, you can receive card payments from customers and optimize your daily operations, which can save you time and help increase your returns. If you’re just starting a business you should know that there are advantages and disadvantages of a POS system. We’ll show you both in this article so you can decide which approach suits your needs. Advantages You’re probably already aware of the benefits of POS systems for online and in-person transactions. But you might be surprised to find that with the right approach, they can also help you improve many other aspects of your business venture. Increased Sales Nowadays, people don’t necessarily carry a lot of cash around, which is why having a user-friendly and efficient payment system can boost your sales. Card machines allow you to make sales as soon as the customer is ready. There are also indirect ways in which these systems can help boost your sales. For example, a POS system keeps track of your stock across all of your branches. If you’re out of a certain product, you can instantly check which of your other stores have it in stock, then either send the customer there or get the product transferred. That way, they’ll still buy from you instead of your competitors. Inventory Management That brings us to real-time control of your inventory, one of the major benefits of a POS system. This automated service will keep your data synced; it removes the item from stock as the order is placed. Cloud-based POS systems provide even greater ease of access and help you manage your inventory remotely. This allows small business owners to keep their stock in check, manage their orders in a timely fashion, and provide a better service with limited resources. Team Tracking Optimizing your daily tasks means keeping track of your staff. Some POS systems provide great tools for these administrative purposes, as they allow you to track employee productivity. This way, you can easily check who’s slacking off and who’s hard at work. The right software can also let you allocate shifts and provide incentives in the form of commission structures. Employees get to track their own progress and see how close they are to earning a monthly bonus. Theft prevention is another invaluable feature of POS systems. You can control who has access to the system itself and who logs in when, and you can limit the information that each employee gets to see. You can also connect your video surveillance feed to your POS system. Customer Service Another one of the POS benefits you’ll get is an improved customer experience. The retail and hospitality industry have the most to gain from a system like this because it allows them to tailor each service to their clients’ needs. One of the main advantages of a POS system in restaurants is that you can get software and hardware that’s specifically designed with this niche in mind. You’ll be able to make quick changes to the favorites menu, add or remove items that have run out, get an overview of the tables, and see if any of your customers have been waiting too long for service. Disadvantages Modern POS systems may not suit every business; there can be hidden costs and data security concerns that could sway you towards a more basic approach. Cost POS systems can be costly. Buying or renting hardware usually involves a significant initial outlay, while you’ll probably need to pay monthly fees for software. There will be extra costs for repairs and regular maintenance. Also, some services may charge up to 3% for each transaction, and that might prove to be too much, especially if you’re a small business owner. Even if there’s no up-front fee, you should check for hidden costs and calculate how much you’ll be paying for the service you require. Security Risks One of the main disadvantages of card swipe machines is the security risk. While customers may find them very convenient to use, POS systems can be subject to malware threats. If a POS system is hit with a malware attack, this could allow hackers to steal your customers’ personal info. In order to avoid these attacks, the system will need regular software updates and almost constant maintenance. If you fail to do this and end up losing your customer data to hackers, you could face liability charges in court. Reliance on the Internet Interrupted internet connectivity is another disadvantage of POS terminals that can slow down your sales process and test your customers’ patience. Dealing with these issues may burden your team needlessly, and fixing them can take more time and effort than you’d expect. Some newer systems have an offline mode that can ensure data safety while still accepting card payments, but you won’t know if the transaction goes through until you get your system back online. Buying Used POS Systems If you’re on a budget, you might also consider getting used equipment for your business. However, you should be aware of the advantages and disadvantages of used POS systems beforehand. The lower price point looks tempting and these systems do provide the basic functionality you’ll need. However, you might not be able to receive software updates on these machines as new security requirements arise. The hardware could also cause issues as replacement parts become more difficult to obtain. Final Thoughts We hope we’ve highlighted both the advantages and disadvantages of a POS system in our article. It doesn’t matter whether you’re running an online shopping site or a brick-and-mortar store; you’ll be able to improve your service with a well-organized POS system. It’s up to you to browse through the POS packages on the market and choose the one that will be the best choice for your business.