By: Michael Keenan
Introduction
Whether you are opening a retail store in the United States or starting a retail business in the United Kingdom, this guide is for you.
Small businesses have been significantly impacted during the COVID-19 pandemic. About one-third of small businesses in the United States have closed since the start of the pandemic. In the United Kingdom, the rate of business closures increased by 43%, from 71,600 in 2019 to 102,700 in 2022.
However, physical stores have begun to change the situation: the percentage of new store openings rose by 58% year-over-year in the United States, and retail sales in the United Kingdom increased by 2.2% since February 2020.
This renewed optimism for retail businesses may be the perfect opportunity to achieve your dreams of opening your own store!
Have you ever wanted to launch a new business? This guide will help you understand what it takes to open a retail store, from costs and registration requirements to tips for promoting your store.
How Much Does It Cost to Open a Retail Store?
One of the biggest questions you might have is how much it will cost to open a store. Unfortunately, there is no definitive answer. While the list of expenses we will cover is typically similar for most retailers, your costs will vary depending on your location.
Thalia Toh, CEO of Good Grow Great and business consultant and Princeton University graduate, explains that costs can vary by region “and more specifically, the type of space (whether in an indoor mall or a luxury outdoor shopping center or a new space or an existing space, and other factors).”
“It also depends on the quality of interior construction, shelving/display, inventory space, and whether you will need public restrooms and commercial kitchen space for displays and water/power lines, etc. Opening an average retail space in the U.S. can cost anywhere from $80 to $500 per square foot, or more.”
“To open an average retail space in the U.S., costs can range from $80 to $500 per square foot, or more.” The biggest variable is rent, which depends on the retail location. According to SPEED Commercial Real Estate, you could pay anywhere from $15,000 to $42,000 per year ($1,250 to $3,500 per month) or more when renting a 1,500-square-foot space.
According to research from Zoopla, a similarly sized space in the United Kingdom can cost anywhere from £4,000 to £115,000 per year (£333 to £9,500 per month) in rent. According to Quote My Energy, setting up a retail business in the UK will cost about £172,000.
How to Start a Retail Business
Now that you are more familiar with the costs of opening a retail store, let’s take a closer look at how to start a retail business by defining your unique identity, registering your business, finding a suitable location, building relationships with suppliers, choosing the right payment system, promoting your store, and opening your retail store.
Defining Your Unique Identity and Registering Your Business
The first step you need to take before you start selling anything is to register your business. To achieve this, you will need to:
Write a Business Plan
The main reason you’ll want to write a business plan is to apply for business loans. However, even if you are funding from your own pocket, the business plan will help solidify your ideas and highlight business needs you may not have considered initially.
Business plans vary in depth and detail, but most include the following information:
- Business name and description
- Executive summary
- Business structure
- Products and services
- Target audience
- Market research and marketing strategy
- Forecasts
- Cash flow
- Logistics and manufacturing details
- Details of any lenders or grants secured
- Protecting your personal assets
- Potentially reducing taxes
- Securing financing more easily
- Setting up your retirement plans
- Sole proprietorship
- Partnership (either limited liability or limited partnership)
- Corporation
- S Corporation
- Limited Liability Company (LLC)
- Sole traders
- Limited companies (limited by shares or limited by guarantee)
- Partnerships
- Planning permit. Some geographic areas regulate the types of businesses that can operate in certain areas.
- Health permits. If you plan to handle any food, you may need health permits.
- Environmental permits. If your business could pollute air or water, you may need a special anti-pollution permit.
- Sign permits. Some authorities may require a permit before putting up a sign in public places.
If it seems overwhelming and you don’t know where to start, feel free to check out this business plan template to help guide you through the process.
Determine the Legal Structure
Another decision you need to make is how to legally organize your business. The legal structure of your business determines how you are taxed, how you raise capital, your liabilities, and other factors.
Factors to consider when organizing your business include:
Each legal structure has different implications regarding taxes, ownership, liability, financing, and other aspects of the process.
You have a choice of five main structures in the United States:
The choice is similar in the United Kingdom, but there are only three main structures:
The Small Business Administration (SBA) provides many tips for small businesses on choosing the right structure in the U.S., and there are various support networks for each country in the U.K. on the gov.uk site. Make sure to carefully research your options, as changing structures later, while possible, can be cumbersome.
Once you decide on a legal structure, look for a registered agent and register your business with government entities or share companies in the U.K., if required.
To learn more about the different business structures and how to choose one, read Business Types: Which Legal Structure Is Right for You?
Obtain Necessary Licenses and Permits
The final piece of the legal puzzle is obtaining the right licenses and permits.
For any store, you will need a sales permit from your county, municipality, and/or state, a general business license, and a business name (if your business name is fictitious).
You will also need special licenses for selling restricted items like pharmaceuticals, alcohol, live animals, firearms, and adult materials.
Depending on your location, you may also need to apply for specific licenses for your retail store at the physical location:
In the U.K., you may sometimes need specific licenses in each of the four countries of the union. For example, food site licenses cover England, Scotland, Wales, and Northern Ireland separately. Don’t forget about things that might be copyright protected, like music. There is plenty of useful information about licenses on the British government website.
Researching the need for any of these specific licenses and permits should be part of your business plan preparation.
Learn Tax Regulations
Tax regulations vary depending on where your business is registered, where it operates, and its legal structure. For example, a sole proprietor in the U.S. typically files taxes by April 15 each year. For a partnership, it is usually by March 15. The IRS (Internal Revenue Service) website provides more information on this topic.
The corporate tax filing deadline in the U.K. is 12 months after the end of the accounting period it covers. The accounting period will vary for each business and is based on the date the company was formed. There are also differences for sole traders and other legal structures. Do your own research to find out what is relevant for you.
In
the cheapest units may not have the same foot traffic as more expensive locations, which could lead to lower sales volume. It’s important to weigh your options carefully and consider the long-term impacts of your location choice.
التخطيط لتجهيزات المتجر
التخطيط الجيد لمتجر التجزئة هو أمر حيوي لنجاح الأعمال. يجب أن يتضمن تصميم المتجر تنظيماً يسهل حركة العملاء ويجعل تجربة التسوق مريحة.
تصميم المتجر
تأكد من أن يتم تصميم المساحة الخاصة بك بطريقة تجعل العملاء يشعرون بالراحة. يجب أن يكون هناك ممرات واسعة وسهولة في الوصول إلى المنتجات. استخدم الألوان والإضاءة الجيدة لإضافة جو مريح وجذاب.
المرافق الضرورية
تأكد من توفير جميع المرافق الأساسية مثل خزائن الأمان والأنظمة الأمنية. تحتاج أيضًا إلى نظام نقطة البيع فعّال وقادر على دعم العمليات التجارية اليومية.
استراتيجيات التسويق
بمجرد أن يتم تجهيز متجرك، ستحتاج إلى تنفيذ استراتيجيات التسويق لجذب العملاء. سواء كان ذلك عبر وسائل التواصل الاجتماعي أو الإعلانات المحلية، يجب أن تركز على خلق جذب قوي لعملائك المحتملين.
تعزيزات التسويق الرقمي
تعتبر الحملات الدعائية عبر الإنترنت وسيلة فعالة لجذب العملاء. استخدم وسائل التواصل الاجتماعي، إنشاء موقع ويب جذاب، وتحسين محركات البحث لمساعدتك في الوصول إلى جمهور أوسع.
برامج الولاء
يمكن أن تساعدك برامج الولاء في تحفيز العملاء على العودة. فكر في تقديم خصومات أو عروض خاصة للزبائن المتكررين.
High-density areas generally have higher earning potentials, attracting more curious shoppers. However, these units are more expensive, so you’ll need those additional customers to cover the costs.
There is no wrong or better approach than the other. However, it is better to ensure that you have enough capital to pay for rent for the first year in any case.
Business rates are another thing to consider in the UK. They depend on the “open market rental value.” They are not calculated every year, and local councils also offer relief from business rates in certain cases. Do your research on this before deciding on your store’s location.
Promoting Your Store
By this point, you will have registered your business, chosen your location, suppliers, employees, and payment systems. All that’s left to do is promote your store and get ready for your grand opening!
While you wait for your initial stock to arrive (and prepare the store for customers), think about how to market your store to locals.
In terms of online presence, there are two areas to consider: social media and local search engine optimization. On social media, try to find local groups or pages on platforms where you can participate while promoting your new store (in addition to sharing your business page with your network).
Setting up local SEO is a long-term plan, but it starts with listing your store on Google My Business. When listing your business, provide as many relevant details as possible so local searchers can find you.
You can also promote your business by forming local partnerships, organizing promotional events, or even hosting a “lock-in” shopping event.
Opening Your Retail Store
After planning and marketing, and following the steps outlined in this guide, you will be ready to open your retail store!
There will be inevitable obstacles before you officially start your business, so a strong support network around you will help put all the pieces together. In addition to people, having the right tools can take your business to the next level.
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Frequently Asked Questions About How to Open a Retail Store
How do I open a retail store?
Before you open a retail store, you need to do a
Source: https://www.shopify.com/retail/how-to-open-a-retail-store
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