Success in retail business takes effort, resources and strategy. Interestingly, effort in retail means both hard and smart work (a departure from the “smart work” cliché prevalent in industry today!). You will also need financial resources or a good credit standing with your trade creditors (e.g. suppliers) because you will need to maintain reasonable base inventory in your warehouse or store. This is to ensure your customers can buy what they need to buy anytime they visit your shop. Finally, your strategy is what will ensure you wrap up every other resource or factor earlier mentioned in order to deliver value to both you and your customers. Strategy is your plan of action designed to achieve your long-term goal(s). A good strategy will include the implementation of these two additional factors necessary for purpose achievement. The last two factors are critically important,failing to implement them can spell doom for your retail business. The factors are: Place or Location and Capital.
Place or Location: As a retail business owner, you will be faced with the difficult reality of finding a suitable location for your business. The question to ask is: Where do I locate or position my shop to attract high sales and/or avoid excessive competition? Here,different strategies work for different folks. There are advantages and disadvantages in siting your business near your competitors or otherwise! You have to do your research or get your consultant to assist you. We always tell our clients that the first three rules of success in retail business as far as location is concerned are:
Rule 3: Location!!!
A good location guarantees high customer traffic or high footfall and sales! When your location is right, 60% of your success in retail is guaranteed!
It might seem that location doesn’t really matter these days of internet and e-commerce prevalence; that’s not true. It still does, big time! For example, many customers still want to feel and touch products before purchase; many cannot fully trust the internet because of frequent cases of internet and credit card fraud, cybersecurity issues and all that, plus many still cherish the fun of shopping in a physical shop! So, get a good location for your retail business, it will give you huge sales.
Capital: Capital refers to the money, assets and equipment you need to start your business. While capital may not be the first thing you need to start a business (we had addressed Ideation in a previous post), we believe availability of capital also enables informed ideation! In other words, the level of capital you have access to, might help determine the quality and size of business you will think of starting.
In retail, how you deploy your capital can mean all the difference between success and failure. For example, what goods are you purchasing for sale? Are they fast moving, slow or very slow moving in sales? How much stock do you hold or plan to hold in your warehouse as base stock? What about your expenses? How do you hope to manage them? What percentage of your daily sales will go into expenses? These and other questions must be asked and answered(Please get the services of a consultant like SteepleGlobal to avoid costly mistakes here). How you answer these questions will impact your capital negatively or positively!
Fast moving goods will ensure you maintain good liquidity to purchase highly demanded goods by your customers. To ensure you maintain a healthy liquidity to stock ratio, always ensure you categorize your purchases into high selling,high profit,slow selling,long dated products. Effective management of your capital will ensure you always have goods needed by your customers!
Thinking of starting a business or strengthening your existing business? Come talk to us! Send us an email here: firstname.lastname@example.org . Also visit our Facebook page @SteepleGlobalServices or our Twitter handle @steepleglobal and let’s discuss ideas and help you begin your journey towards financial freedom!
Steeple Global Services(www.steepleglobal.com.ng ) is a business consulting firm based in Uyo, Akwa Ibom State, Southern Nigeria. We help to bring your business idea into reality, set up your new business for you and/or help to turn around your ailing or struggling business(s) into profit making ventures. We help businesses grow!!!