How to Attract Customers

When you have a location in mind, you should work through another aspect of marketing. How will you attract customers to your store? How will you pull business away from your competition?

It is in working with this aspect of marketing that many retailers find competitive advantages. The ideas that they develop are as good as and often better than those that large companies develop. The work blocks that follow are designed to help you think about image, pricing, customer service policies, and advertising.

Image

A store has an image whether or not the owner is aware of it. For example, throw some merchandise onto shelves and onto display tables in a dirty, dimly lit store and you've got an image. Shoppers think of it as a dirty, junky store and avoid coming into it. Your image should be concrete enough to promote in your advertising and other promotional activities. For example, "home-cooked" food might be the image of a small restaurant.

Write out on a worksheet the image that you want shoppers and customers to have of your store.

Pricing

Value received is the key to pricing. The only way a store can have low prices is to sell low-priced merchandise. Thus, what you do about the prices you charge depends on the lines of merchandise you buy and sell. It depends also on what your competition charges for these lines of merchandise. Your answers to the following questions should help you to decide what to do about pricing.

In what price ranges are your line of merchandise sold

High _____ , Medium _________, or Low _____?

Will you sell for cash only?

What services will you offer to justify your prices if they are higher than your competitor's prices?

If you offer credit, will your price have to be higher than if all sales are for cash? The credit costs have to come from somewhere. Plan for them.

If you use credit card systems, what will it cost you? Will you have to add to your prices to absorb this cost.

Customer Service Policies

The service you provide your customers may be free to them, but you pay for it. For example, if you provide free parking, you pay for your own parking lot or pick up your part of the cost of a lot you share with other retailers.

Make a list of the services that your competitors offer and estimate the cost of each service. How many of these services will you have to provide just to be competitive? Are there other services that would attract customers but that competitors are not offering? If so, what are your estimates of the cost of such services? Now list all the services you plan to offer and the estimated costs. Total this expense and figure out how you can include those added costs in your prices without pricing your merchandise out of the market.

Planning Your Advertising Activities

Advertising was saved until the last because you have to have something to say before advertising can be effective. When you have an image, price range, and customer services, you are ready to tell prospective customers why they should shop in your store.

When the money you can spend for advertising is limited, it is vital that your advertising be on target. Before you think about how much money you can afford for advertising, take time to determine what jobs you want to do for your store. List what makes your store different from your competitors. List the facts about your store and its merchandise that your advertising should tell shoppers and prospective customers.

When you have these facts listed and in hand, you are ready to think about the form your advertising should take and its cost. Ask the local media (newspapers, radio and television, and printers of direct mail pieces) for information about the services and results they offer for your money.

How you spend advertising money is your decision, but don't fall into the trap that snares many advertisers who have little or no experience with advertising copy and media selection. Advertising is a profession. Don't spend a lot of money on advertising without getting professional advice on what kind and how much advertising your store needs.

The following work sheet can be useful in determining what advertising is needed to sell your strong points to prospective customers.

When you have a figure on what your advertising for the next twelve months will cost, check it against what similar stores spend. Advertising expense is one of the operating ratios (expenses as a percentage of sales) that trade associations and other organizations gather. If your estimated cost for advertising is substantially higher than this average for your line of merchandise, take a second look. No single expense item should be allowed to get way out of line if you want to make a profit. Your task in determining how much to spend for advertising comes down to the question, "How much can I afford to spend and still do the job that needs to be done?"

In-store Sales Promotion

To complete your work on marketing, you need to think about what you want to happen after prospects get inside your store. Your goal is to move stock off your shelves and displays at a profit and satisfy your customers. You want repeat customers and money in your cash register.

At this point, if you have decided to sell for cash only, take a second look at your decision. Don't overlook the fact that Americans like to buy on credit. Often a credit card, or other system of credit and collections, is needed to attract and hold customers. Customers will have more buying confidence and be more comfortable in your store if they know they can afford to buy. Credit makes this possible.

To encourage people to buy, self-service stores rely on layout, attractive displays, signs and clearly marked prices on the items offered for sale. Other stores combine these techniques with personal selling.

Getting the Money Required to Starting a New Small Business. Now that You have computed your first capital requirements, where are
you going to get the money? The primary source is the personal savings. Subsequently relatives, friends, or other people may be
found who are willing to"enterprise" their savings in your company. Before getting too big a share of money from outside sources,
remember you should have private control of sufficient to guarantee yourself possession.

After you can show that you have closely worked out your financial Requirements and can demonstrate experience and ethics, a
lending institution might be willing to finance a part of your working requirements. This may be done on a short term basis of
from 60 days to as much as one year. Any institution which has money to lend is primarily concerned with security. The safety
might be a business advantage, but if you are just starting the best safety is usually your house or any other personal asset.

The second thing the lender will want to see is some sort of Business plan. If you finish a business strategy - which includes a
cash flow forecast - that the lender will see you have completed some realistic and serious thinking about your business and be
more inclined to think about your request.

Be familiar with your banker. In picking a banker consider Progressiveness, attitude toward your business, credit services
offered, and the dimensions and management policies of the bank. Is your bank progressive? The physical look of the bank may
provide you some indication. When the employees are reasonably young, considering your problems and active in civic affairs the
bank is very likely to be progressive. The nature of the bank's advertising may also be a clue for its progressiveness.

To succeed the banker Ought to Be interested in Assisting You to Become a better manager, and build a lasting relationship which
will mean rewarding business for you and the lender through the years.

Will the lender offer you the kind of credit you need? By Way of Example, If seasonal accumulations of stock turned into an issue
will the bank create a loan against public or field warehouse receipts? If your capital is tied up in accounts receivable
throughout your hefty selling season, will the bank take these receivables as collateral for a loan? Will the bank consider a term
loan?

Finally, know the size and direction policies of the bank. Will Your maximum requirements fall nicely inside the lender's"legal
limit"? If you intend to do some export business, does it have a currency department? If you or your traders sell on installation
terms does the lender have facilities for managing installment paper? How profoundly is the lender concerned with the rise and
prosperity of the local community?

When you deal with your banker, then sell your self. Whether or not you Want a bank loan, make it a practice to stop by your
banker at least once a year. Openly discuss your plans and difficulties. It's the bank's company not to betray a confidence. If
you require financial assistance carefully organize, in written form, complete information that will present a thorough
understanding of your whole proposition. Many business-people or prospective business operators destroy their chances of getting
financial aid by failing to present their proposal properly.

Trade creditor or equipment manufacturer, Companies from which you Purchase equipment or product may also provide capital for you
in the form of extended credit. Producers of store fixtures, cash registers, and industrial machines frequently have financing
plans under which you may purchase in an installation basis and cover out of future income. You don't need to cover the goods
simultaneously. If products are for resale, no security other than repossession rights of the unsold merchandise is involved. But
too long a use of charge may prove expensive. Usually cash discounts are offered if a bill is paid in 10, 30, or 60 days. For
instance, a duration of sale offered because"2-10; net 30 days" means that a cash discount of two percent will be granted if the
bill is paid within 10 days. If not paid in 10 days, the entire amount is due in 30 days. If you don't take advantage of the money
discount, you're paying 2% to use money for 20 days, or 36 percent each year. This is high interest. Avoid it.

Among the principal causes of failures among businesses is Inadequate funding. If you do go into business, remember it is your
obligation to provide, or obtain from other people, sufficient money to supply a firm foundation for the enterprise.

Sharing Ownership With Others. Now that you have decided what Company to start and about how much funds will be required, you may
find it necessary to join with a couple of associates to launch the enterprise.

If you lack specific technical or management skills which are of Major importance to your chosen company a spouse with these
abilities may prove a most satisfactory means to pay the deficiency. If you are extremely proficient in your particular area but
lack management training and skills, you might search for a partner using a background in management. If you might need more
start-up money, sharing the ownership of this company is 1 way to obtain it. Fantastic care ought to be taken in deciding upon a
spouse. Personality and character, as well as ability to render technical or financial aid, affect the achievement of a pa333ship.

A partnership may be a mixed blessing. A partner who puts in time Or cash has got a right to expect a share in conducting the
business.

In a venture the liability for the debts of the firm is Unlimited, as it is in one proprietorship. This means the owners are
Personally responsible for the firm's debts, even in excess of the amount they Have invested in the business. In a business the
accountability of the owner is Limited To the amount that they pay for their shares of stock. A partnership, such as a single
proprietorship, lacks continuity. Thus, the Company terminates upon the Death of the owner or a spouse, or upon the withdrawal of
a partner.

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