Free Starting a Business Books

Free Book: How to Open a Store

 

How to Open a Store

A Step By Step Guide to Starting a Retail Shop Business

How to Open a StoreThis guide will walk you step by step through all the essential phases of starting a successful retail business. To profit in a new store, you need to consider the following questions: What goods do I sell? Where is my market? Who will buy? Who is my competition? What is my sales strategy? What merchandising methods will I use? How much money is needed to operate my store? How will I get the work done? What management controls are needed? This guide will help you answer all these questions and more.

Table of Contents

1. Basic considerations and requirements
2. Planning your marketing
3. How to attract customers
4. Planning your advertising activities
5. How much money will you need
6. Break-even analysis
7. How to find the best location for your store
8. How to choose a good shopping center location
9. Retail marketing essentials
10. How to set prices for optimal profitability
11. How to improve personal selling in your store

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Sample Content

As the owner, you have to answer these questions to draw up your business plan. The pages of this Guide are a combination of text and suggested analysis so that you can organize the information you gather from research to develop your plan, giving you a progression from a common sense starting point to a profitable ending point.
What Is a Business Plan?
The success of your business depends largely upon the decisions you make. A business plan allocates resources and measures the results of your actions, helping you set realistic goals and make logical decisions.

You may be thinking, "Why should I spend my time drawing up a business plan? What's in it for me?" If you've never worked out a plan, you are right in wanting to hear about the possible benefits before you do the work. Remember first that the lack of planning leaves you poorly equipped to anticipate future decisions and actions you must make or take to run your business successfully. A business plan Gives you a path to follow. A plan with goals and action steps allows you to guide your business through turbulent often unforeseen economic conditions.
A plan shows your banker the condition and direction of your business so that your business can be more favorably considered for a loan because of the banker's insight into your situation.
A plan can tell your sales personnel, suppliers, and others about your operations and goals.
A plan can help you develop as a manager. It can give you practice in thinking and figuring out problems about competitive conditions, promotional opportunities and situations that are good or bad for your business. Such practice over a period of time can help increase an owner-manager's ability to make judgments.
A second plan tells you what to do and how to do it to achieve the goals you have set for your business.

What Business Am I In?

In making your business plan, the first question to consider is: What business am I really in? At first reading, this question may seem silly. "If there is one thing I know," you say to yourself, "it is what business I'm in." Hold on and think. Some owner-managers have gone broke and others have wasted their savings because they did not define their businesses in detail. Actually they were confused about what business they were in.
Look at an example. Mr. Jet maintained a dock and sold and rented boats. He thought he was in the marina business. But when he got into trouble and asked for outside help, he learned that he was not necessarily in the marina business. He was in several businesses. He was in the restaurant business with a dockside cafe, serving meals to boating parties. He was in the real estate business, buying and selling lots. He was in boat repair business, buying parts and hiring a mechanic as demand rose. Mr. Jet was trying to be too many things and couldn't decide which venture to put money into and how much return to expect. What slim resources he had were fragmented.
Before he could make a profit on his sales and a return on his investment, Mr. Jet had to decide what business he really was in and concentrate on it. After much study, he realized that he should stick to the marina format, buying, selling, and servicing boats.
Decide what business you are in and write it down - define your business.
To help you decide, think of answers to questions like: What do you buy? What do you sell? Which of your lines of goods yields the greatest profit? What do people ask you for? What is it that you are trying to do better or more of or differently from your competitors? Write it down in detail.

Planning Your Marketing
When you have decided what business you are in, you are ready to consider another important part of your business plan. Marketing. Successful marketing starts with the owner-manager. You have to know the merchandise you sell and the wishes and wants of your customers you can appeal to. The objective is to move the stock off the shelves and display racks at the right price and bring in sales dollars.
The text and suggested working papers that follow are designed to help you work out a marketing plan for your store.
Determining the Sales Potential
In retail business, your sales potential depends on location. Like a tree, a store has to draw its nourishment from the area around it. The following questions should help you work through the problem of selecting a profitable location.
In what part of the city or town will you locate?
In the downtown business section?
In the area right next to the downtown business area?
In a residential section of the town?
On the highway outside of town?
In the suburbs?
In a suburban shopping center?
On a worksheet, write where you plan to locate and give your reasons why you chose that particular location.
Now consider these questions that will help you narrow down a place in your location area.
What is the competition in the area you have picked?
How many of the stores look prosperous?
How many look as though they are barely getting by?
How many similar stores went out of business in this area last year?

How many new stores opened up in the last year?
What price line does competition carry?
Which store or stores in the area will be your biggest competitors?
Again, write down the reasons for your opinions. Also write out an analysis of the area's economic base and give the reason for your opinion. Is the area in which you plan to locate supported by a strong economic base? For example, are nearby industries working full time? Only part time? Did any industries go out of business in the past several months? Are new industries scheduled to open in the next several months?
When you find a store building that seems to be what you need, answer the following questions:
Is the neighborhood starting to get run down?
Is the neighborhood new and on the way up? (The local Chamber of Commerce may have census data for your area. Census Tracts on Population, published by the Bureau of Census, may be useful. Other sources on such marketing statistics are trade associations and directories).
Are there any super highways or through-ways planned for the neighborhood?
Is street traffic fairly heavy all day?
How close is the building to bus lines and other transportation?
Are there adequate parking spaces convenient to your store?
Are the sidewalks in good repair (you may have to repair them)?
is the street lighting good?
Is your store on the sunny side of the street?
What is the occupancy history of this store building? Does the store have a reputation for failures? (Have stores opened and closed after a short time)?
Why have other businesses failed in this location?
What is the physical condition of the store?
What service does the landlord provide?
What are the terms of the lease?
How much rent must you pay each month?
Estimate the gross annual sales you expect in this location.
When you think you have finally solved the site location question, ask your banker to recommend people who know most about location in your line of business. Contact these people and listen to their advice and opinions, weigh what they say, then decide.

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