Looking for a change? Get your store ready for your new business and future as an entrepreneur…
Entrepreneurs in developing economies, such as South Africa, are driven by both opportunity and necessity. In fact, in Africa 75% of people believe that becoming an entrepreneur is both admirable and an excellent career choice.
It is. But it can be a risky undertaking. That’s why it’s important to have a good plan in place before you jump right in. Having a strong strategy can be what sets you up for success.
Here are 6 tips to help you start your retail business strategically, from Vend, a world-leader in getting retail stores up and running…
You may know what you want to sell already, but even if you’re looking at a specific theme or set of products, making the right choice on what to stock is crucial. There are three things that can help you refine this: interest, demand and margin.
Interest: Retail is complex and has its fair share of challenges so make sure you’re selling something you’re passionate about, that has an interesting story, or is unique and of value to your target customer. And do your research. Knowledge of your product will stand you in good stead when it comes to trends, business decisions and market demand as well as in selecting the best suppliers, people and pricing.
Some of the best ways of identifying the product that suits you are to look at your hobbies, your existing line of work, and to attend events and fairs to see what piques your interest (and others!).
The reality of fluctuating economies and easily distracted customers is that you can’t rely on your passion alone to build a successful business. Look carefully into whether or not your products interest your target market. You can gauge market demand by checking sites such as Amazon or Takealot and seeing which products are the most popular. Use Google’s Ads Keyword Planner to assess which products appear the most regularly on monthly searches, and then do hands-on research into customer sentiment.
It is critical that you read up on your markets, gain access to the latest statistics and studies and build a well-rounded understanding of the demand for your products. Not only will this information help you refine your product offering but it can be used as supporting evidence when you require investor backing.
How much can you sell your products for? How much will it cost to purchase or make them? To determine your margins, get in touch with suppliers, preferably those who are recommended or trusted, and work out who offers the best value. Then build your pricing structure around the existing market pricing – it may not be accurate in terms of your overheads but it does give you an idea as to whether you can make the margins work.
Assess the market and the competition
This is where things get interesting. You need to find out if there is a place in the market for your retail business. Research how big the market is, how fast it is growing or shrinking, and what percentage share of the market you could gain. High-level market data will give you a strong sense of the area you’re looking to enter.
Establish your target market
Your product research will have done a lot of this legwork for you, but it’s worth unlocking a clear picture of your perfect customer by asking some very pressing questions. Ask who they are, what they are like, what their needs are, what they are willing to pay and what products are important to them. You can do this by collecting demographic and psychographic information from surveys and census.
Make sure that you can differentiate your business from the rest, especially if you’re opting into a crowded market. Google is a great resource, as are review sites, business directories, and the Chamber of Commerce. Or you could simply ask some of your target customers through focus groups or surveys. Find out how these competitors operate and find ways of making sure that your business stands out from the crowd. Keep asking yourself – what can I do to make my store the one that customers want to visit?
These are four steps on a long and exciting road to entrepreneurial freedom, but they are just the beginning. There’s much more to consider too, such as having a nest egg that can support you in tough financial times or while you are kicking things off, finding the perfect location for your store, identifying fresh retail channels and ensuring you are compliant with local legislation. It may sound like a long journey, but it will be worth it in the end – good luck!