Retailing is one of the fastest-growing segments of the economy. As one of the nation’s largest employers, the retail industry provides excellent business opportunities for you. New enterprises launched each year are retail operations. The entrepreneurs behind these ventures risk their capital, invest their time and make a living by offering consumers something they need or want.
Retailers provide the goods and services you and I need, from food, auto parts, apparel, home furnishings, appliances, hardwares and electronics.
Most retailing involves buying merchandise or a service from a manufacturer, wholesaler, agent, importer or other retailer and selling it to consumers for their personal use. The price charged for the goods or services covers the retailer’s expenses and includes a profit.
Storefront ventures run the gamut from clothing boutiques and health-food stores to hardware stores, coffee shops, bars, laundromats, convenieance stores and so on. Among the more recent arrivals on the scene are cellular phone outlets, video and DVD rental stores, cybercafes and just about anything else you can imagine. The diversity is amazing!
The typical store is run by the owner alone or by a husband-and-wife team. Such small enterprises naturally lack the substantial resources, purchasing muscle and sophisticated operations of the large-scale retailers. For the small retailer, there may be a few employees, and one or two may be part-time workers. The store’s size is, of course, related to the type of establishment: Furniture outlets, for example, require much more space than shoe stores and neighborhood groceries.
There is always room for the right kind of store. Geographic shifts of large numbers of consumers are characteristic of our mobile population; stores need to be wherever people live. Fashions, changing lifestyles, increasing concern about health care and technological advances all contribute to the need for new variations on old retailing themes. Finally, retail openings continue to occur as established merchants retire, sell their businesses, or close down because of poor management practices or changes in the local environment. Your small store launched today may become the next SM’s or Robinsons in a few decade.
When exploring your options, consider combining one or more retail opportunities. For example, if having a store is the object of your desire, think about adding an e-load or cellphone accessories among others as an extra revenue stream.
In your travels down remote roads and through the countryside, you’ll find roadside stands offering ripe tomatoes, fresh corn by the bushel, mangoes, freshly laid eggs, and other agricultural and dairy products. You might also see handcrafted items, artwork, souvenirs, holiday gifts, regional tokens and novelties. Many of these businesses sell year-round, though some are seasonal by nature. Carts in malls and by roadways, swap meets, spontaneous garage sales, holiday or summer retail operations, and weekly farmers’ markets are additional outlets for the ambitious retailer.
Whether you are interested in a store, service or hybrid operation, the deciding factor in your success or failure will be your relationship with the consumer. Get to know your prospects. Consider testing your business concept from home to control overhead costs. After gaining encouraging sales from friends, relatives and neighbors, you can extend your reach through catalog, fax and phone sales. From there, you might want to sell from a cart in a local mall or through a short rental in temporary space to test walk-in traffic and promotional efforts. Then you can determine if your sales and management skills justify start-up costs and long-term commitments. With a realistic view of what you’re getting into, you can examine your options for location, size and format – that is, can you sell more, and more profitably, through one distribution channel over another? Which form would that be – catalog, physical or virtual store, or television and radio sales?
Retail businesses exist to make people happy. To the extent that you satisfy customers, you fulfill your company goal. After that’s said and done, retailers are in the business of customer satisfaction. This is the key to growth and profits.
The industry continually strives to shift its image from one that profits from others to one that serves people’s interests. Image has many sides to it: friendliness of personnel, quality of merchandise, level of service, and ease of access. You must be ever-conscious of the perceived risk the consumer has of doing business with you. One is social risk: What someone buys affects how others view that person – fashionable and smart, or behind the times and ignorant. The second risk is economic. This is the possibility that a purchase decision will greatly reduce the consumer’s budget and not yield substantial satisfaction or value.
Windows of Opportunity
Today, finding the right goods or services and creatively marketing them no longer assures that a retail firm will grow and prosper. You must run your business with a constant eye on the consumer. You must have a strategic view of your business and focus on your positioning, changing consumer lifestyles, technological advances and competitive business concepts.
Of all the habits of highly successful businesses that sell directly to the consumer, the ability to assess relationships with the marketplace is perhaps the most crucial. Being able to anticipate and adapt to constant changes in the retail environment more quickly and effectively than the competition is every retailer’s goal. The ability to harness the energy of change is what separates innovative, energetic, growing, profitable companies from obsolete, static failures.
Store retailing offers you the kind of business in which you get to meet lots of people. The retail store is a cash-and-carry operation. The day you open your store to the public, you begin taking in money at your cash register. Capital requirements are characteristically lower than for either manufacturing or wholesaling. This ease of entry is very attractive and explains the large number of new stores launched every year.
Consumers 40 and older are more familiar with retail stores than with all other business types because they have shopped in stores all their lives. Younger consumers have a broader perspective on shopping, which incorporates various electronic outlets (telecommunications devices, the Internet and TV) for purchasing goods and services.
The best retailers are outgoing, verbal people who like to live in the fast lane. Most retail jobs present continual variety, meeting and mixing with people, creating your own opportunities, and generally engaging in self-promoting activities.