{"id":1491,"date":"2019-05-28T20:20:16","date_gmt":"2019-05-28T20:20:16","guid":{"rendered":"https:\/\/www.oconnorcpafirm.com\/blog\/?p=1491"},"modified":"2019-06-04T15:29:36","modified_gmt":"2019-06-04T15:29:36","slug":"starting-a-retail-business","status":"publish","type":"post","link":"https:\/\/www.oconnorcpafirm.com\/blog\/2019\/05\/starting-a-retail-business\/","title":{"rendered":"Starting a Retail Business?"},"content":{"rendered":"\n

Here are things to think about when considering opening up your doors<\/strong><\/h2>\n\n\n\n

Owning and running a retail business is much more involved than you might think.\u00a0 Just because you have great taste in clothing or interior design does not mean you will be able to run a company in the business of selling clothing or furniture.\u00a0 You may have a great eye, but do you know how to find customers for your store, do you understand how to manage inventory, know how to buy months in advance and have the cash flow that will allow for that?\u00a0 Owning a store is time-consuming.\u00a0 First, you have to man the store for 7 to 9 hours a day (or supervise the staff that does) and then you have to manage behind the scenes, get the bookkeeping done, keep ordering and controlling inventory, training employees, etc.\u00a0 You may have incredible taste and style, but how well do you manage employees, understand financial statements, know how to manage your cash flow? You are going to need some help<\/a> from people you have experience in the retail business.<\/p>\n\n\n\n

Plan and Think Ahead<\/strong><\/h3>\n\n\n\n

Before you open\nyour doors, you need to know what your average profit margin will be:  what will be the markup of the inventory you\nbuy and what average daily sales do you need to pay the rent, utilities,\nemployees and have profit left over to pay yourself?  A business plan is really essential.<\/p>\n\n\n\n

Crunch the Numbers<\/strong><\/h3>\n\n\n\n

You need to run a\nbunch of numbers.  How much inventory\nwill I own on a daily basis?  That amount\nof money will be tied up in inventory until you sell it.  So you need to know what projected sales will\nbe, what is the gross profit on those sales and will that gross profit margin\nand a reasonable expectation of daily sales keep the doors open.  Planning for the best, but knowing what the\nworst could be is important in financial projections so you can determine if\nyou can survive the worst case scenario long enough for things to turn\naround.  And what will you strategy be if\nthe worst case scenario presents itself? \nWithout a business plan that forces you to consider all of the other\nchallenges of running a retail business besides selecting fabulous things to\nsell.<\/p>\n\n\n\n

You will need Employees, Operational Procedures and Technology<\/strong><\/h3>\n\n\n\n

How will you find\nand hire good, trustworthy employees? \nWhat controls will you have in place to limit theft and loss of cash or\nmerchandise?  You need operational\nprocedures from the start.  You need\ntechnology that can combine controls, a point of sale system and an inventory\ntracking feature so you know when and what to order.  You will want good reporting so you know what\nis selling, what has the best profit margin, when should things go on sale, how\ndo I use my store square footage to its best potential.<\/p>\n\n\n\n

Marketing will be key<\/strong><\/h3>\n\n\n\n

What is your\nmarketing plan?  How will you reach them\nand how well do you compete with others in the marketplace?  How will you track customers so you can\ntarget people that have already been in your store and get them to buy from you\nagain?  Good systems that track\ncustomers, what they bought, etc will help you reach out to them and build\nloyalty.  Who will run your website, how\nwill you get great SEO, how will it drive sales.  Marketing is a multi-faceted full contact\nsport these days\u2026.you need time to build or someone to do that for you while\nyou run the store.<\/p>\n\n\n\n

Seek Advice…No one is an expert on all things<\/strong><\/h3>\n\n\n\n

Don\u2019t rush to\nlease that space, open your website for online orders.  Get advice from people who know how to run a\nsuccessful retail business.  Build a team\nof people that can help you navigate the pitfalls.  You need people with a background in business\n(retail specifically if you can find it). \nYou need strong accounting help, people who can help you keep the\nbookkeeping current and accurate so you know your financial situation and can\nmake timely decisions before your situation becomes too challenging to dig you\nway out of.  You cannot run a retail\nbusiness without timely financial information.<\/p>\n\n\n\n

There are\nconsultants that can assist you in all the aspects of creating your brand,\nopening you doors and doing it with a mindset for success with good\nplanning.  If you do not feel comfortable\nwriting a business plan, get your accounting team together and ask them to help\nyou.  They will ask the right questions\nand if you answer them in detail, your business plan will write itself.  That is really the start, really understand\nwhat it takes to first open and then run a retail business.  A business plan is the best way to accomplish\nthat and you will save yourself sooooo much time, effort, frustration and\nfailure if you take the time to do your homework before you jump in.<\/p>\n\n\n\n

Our blog has a series of posts on how to write a business plan.\u00a0 We are business consultants<\/a> and business coaches with 37 years of finance and accounting behind us and CPA behind my name.\u00a0 We can help<\/a> and we love retail clients.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here are things to think about when considering opening up your doors Owning and running a retail business is much more involved than you might think.\u00a0 Just because you have great taste in clothing or interior design does not mean you will be able to run a company in the business of selling clothing or […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23,4,7],"tags":[63],"yoast_head":"\nStarting a Retail Business? - O'Connor CPA Firm %<\/title>\n<meta name=\"description\" content=\"Here are things to think about when considering opening up your doors\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.oconnorcpafirm.com\/blog\/2019\/05\/starting-a-retail-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Starting a Retail Business? 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