BusinessHABMachinery & Parts Shop: If you are an aspiring or established entrepreneur looking to open a small retail business.
There are many things to consider before opening your doors.
Options abound with regard to location, types of merchandise you will sell.
And other factors that will ultimately affect the success of your store.
It is important that you or someone you will partner with has extensive experience.
Working in various roles within a small or large retail business to navigate.
Through the process of opening a retail business.
Opening a shop is a challenging task that requires time, money, and dedication.
If running your own business is your dream, though, the effort will be well worth it!
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1. Choose a product in which you have interest and knowledge.
You don’t have to be an expert, but you should have a working knowledge of and a genuine interest in the product you will be selling.
Understanding your product will help you to make good business decisions in the future.
Also, you may already have contacts with suppliers and other professionals in the business who can help you get yours up and running.
To decide what to sell, you can:
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2. Evaluate your hobbies.
If you have a hobby about which you are passionate.
Investigate whether it could turn into a retail opportunity.
If you already spend a lot of time on something, chances are you know a lot about it.
Your excitement for and knowledge about the product could help you to educate customers.
Which translates into more sales.
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- If you are an avid gardener, consider selling gardening supplies.
- If you like to refurbish items purchased from flea markets.
- Consider running an art and antiques store.
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3. Find out what is in demand in your city.
If you don’t already have aspirations about what kind of shop you want to own.
You can take a more practical approach to figuring out what your city or town is missing.
- Walk or drive around your city. Bring a pen and paper with you to write down the businesses you see.
- Make a tally mark next to each business as you come across more than one.
4. Use your line of work and education to inspire you.
Your education and work experience have likely imparted useful knowledge that you can use to run a retail business.
Think about the skills and practical knowledge you have acquired while building your career.
Ask yourself if could see yourself selling related products.
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5. Construct a sound business plan.
A business plan is typically a projection of how your business will generate revenue over the next three to five years.
It should include information about what your business will sell.
A description of your company, an analysis of the market for your business.
And plans for how you will market your request.
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6. Find out about what is necessary to become a business owner.
Different kinds of businesses require different permits and follow different tax laws.
Before opening your business you will need to find out what is required to legally operate in your city.
The best way to find out this information is to visit your local chamber of commerce.
There, they can advise you on what is important to take care of.
- You can also search online for state and county government websites.
See also: 20 Ways to Get a Government Business Loan in Nigeria
7. Get the Machinery & Parts
- Recycling machines
- Farm implements
- Fumigating machines
- Vacuum cleaners
- Generators
- Generator parts
- Construction equipment
- Car batteries
- Car stereo
- Vehicle and motorcycle tyres
- Vehicle and Motorcycle spare parts
- Car Trackers
- Sealing machine
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8. Find suppliers.
You will have to figure out where you will get the product you want to sell.
Or the components of the final product to sell. However, there is no good way to do this.
- You can ask around at shops who sell similar products to see if they will help.
- Especially if it is a store that is unlikely to be a big competitor because they focus on a different market.
- Search the internet. For example, search for “wholesalers and suppliers” + your industry + your city”. If you have specific requirements you can also include that in your search terms. For example, if you want to offer organic products, include “organic” in your search terms.
- Look in trade journals. Find the most popular trade journals for your industry, and buy a recent issue of the journal. Not only will you find lots of interesting information about your business, but there are likely to be lots of advertisements for suppliers too.
9. Gauge the demand for a product.
No matter how much you love something, it will not sell if there is not a real need or desire for it.
Do some market research. This will allow you to determine whether or not people will purchase your product.
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10. Scrutinize your city.
You will need to think about the best place to sell your shop based on what you want to sell.
Putting your shop in a bad location almost guarantees that your shop will fail.
- Think about what areas are trendy for shopping.
- These areas may have more expensive rent, but may have the exposure necessary for success.
- On the other hand, if you can’t afford a shop in the best part of the city, try thinking about what areas of the city are “up and coming”. These areas are likely to be less expensive, but can still be good for becoming successful because the trendsetters of the city are likely to visit these areas.
11. Investigate whether people are purchasing a product.
Visit online marketplaces like Amazon or eBay.
Amazon has a Best Sellers Page that lists products that sell well.
On eBay, you can do a search for completed sales within a category.
Study how well products did in auctions.
If it sold quickly or there was a bidding war for the item, it might be a product worth selling.
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12. Visit Google Adwords Keyword Planner.
Type in keywords related to the products you want to sell.
And see how many searches have been done on these terms.
This can help you to assess demand for a product.
- Visit retail stores that already sell the product you’re thinking of selling.
- Evaluate performance by noticing how long the products have been on the shelf .
- And if they sell for full price or only when they’re marked down. Ask proprietors what their bestsellers are.
13. Visit trade shows and read business magazines.
These provide yet another source of information about business trends in the country.
And maybe even specifically in your city, depending on where you live.
They may also inspire ideas you hadn’t previously considered.
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14. Search online.
You can search for things such as small businesses.
The neighborhood you’re interested in and the name of your city to find other databases and potentially even academic information about business trends in your local area.
15. Read trade magazines and academic journals related to your industry or target market.
These will give you a well-rounded understanding of the market.
Learn about trends in the market. Find feedback about the product you want to sell.
Evaluate the ads that are displayed in the publications.
If someone was willing to purchase ad space for a product, chances are it’s a good seller.
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16. Make your product unique.
Once you have decided on what you want to sell in your shop.
Take the extra step to put a twist on convention.
17. Search for actual facts and figures.
This information will not only help you to gauge the market.
But it will also be useful for creating the financial projections you need in order to obtain financing.
Read retail trade reports published by the country’s Census Bureau.
These are updated every five years and present information about sales trends in different industries.
Also, join a trade organization such as the National Retail Federation.
Their Retail Insight Center lists industry and consumer data gathered from government agencies and consumer surveys.
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18. Write a Company Description and Market Analysis.
Provide a high-level review of the type of store you want to open.
Describe the kinds of items you intend to sell.
Identify your target customers their distinguishing characteristics.
And how you are going to meet your customers’ needs.
Identify your competition and explain how you have a competitive advantage.
- For example, suppose you want to open a small pastry shop.
- The items you will sell are gourmet coffee and pastries.
- Your target customers might be commuters on their way to work, or diners from nearby restaurants looking for a place to enjoy dessert.
- You may plan to meet your customers’ needs by offering quick service, special seating or even a drive-through window.
- Advantages over your competition might include your location.
- A well-known pastry chef or a special recipe you use.
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19. Describe your organizational structure.
Provide details about ownership of the store and information about your management team.
Including their qualifications and how these qualifications complement your skills.
Write an organizational chart with narratives about who is doing what and who is in charge of every function.
Ownership information should include the names of owners and the percentages of the business they own.
Include the legal structure of your business.
20. Describe your marketing strategy.
Explain how you are going to promote your store on a limited budget and fill it with paying customers.
These strategies may include ads in the paper or direct mail and flyers.
In addition, you could offer coupons or discounts for bringing in new customers.
Finally, networking is a powerful marketing strategy.
Introduce yourself in person to local businesses, join the local chamber of commerce.
Small business associations or local charities.
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21. Explain your plan to fund start-up expenses.
If you are going to be requesting funding.
Provide specifics about the amount you are requesting and how it will be used.
Specify the amount requested. Explain in detail how the funds will be used.
Such as for capital purchases, marketing or start-up inventory.
Define the type of funding requested.
Such as a debt you intend to repay or an offer of equity in the company.
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22. Provide financial projections.
Write about how you expect your cafe to perform over the next five years.
Draw up forecasted income statements, balance sheets and cash flow statements.
Write a budget for capital expenditures, including food service and counter area equipment, storage, and office equipment.
Explain your pricing structure, including the cost to produce menu items.
And the prices you will charge to make a profit.
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23. Describe discount pricing strategies.
- Discount pricing strategies include price bundling.
- Offering a discounted price for multiple items purchased together.
- Complementary pricing (charging low prices on one common item.
- Such as coffee, and higher prices for others) and customer loyalty discounts.
Read on: Top 101 Capacity Plan Business in Nigeria
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24. Work with a commercial real estate agent.
An agent experienced in retail businesses will be able to show you properties that might meet your needs and are available for lease within your budget.
You could also contact the commercial real estate development company that owns a specific property that interests you.
- A good alternative would be to take over an existing retail store that has a loyal client base.
- A commercial real estate broker will know about these opportunities as well.
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25. Conduct research on your potential business location.
Search public records of how the location was used previously and statistical data.
Such as the average income in the area.
Find out if there are competitors and similar ventures nearby.
- When you find a potential location, observe the area for a few hours and analyze the foot traffic in the neighborhood. Is it near public transportation or highways? Is there enough parking? Being near the competition can help attract the right customers if you believe your products will be superior.
- You will want to also analyze the demographics of the area. Does the income level match the type of clientele you hope to attract? Your local librarian or commercial real estate broker can help provide this information.
- Once you find a location purchase insurance policies for general liability and fire insurance.
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26. Contemplate the likelihood that you will be seen.
Is there a lot of foot traffic in the area you want to open your shop?
Will your shop be hidden behind other buildings or bigger, more well-known shops?
It is ideal if you are in an area with people walking by.
Who can just drop by because they noticed your shop.
- The best way to learn about how much exposure the shop will receive is to spend time observing the behavior of the people who come through the neighborhood. For example, how many people can you count walking around in the neighborhood in an hour? Are there lots of other shops that people come in and out of? Do people seem to do a lot of window shopping on this street, or are most people walking hurriedly?
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27. Determine your needs.
Find a location that exposes you to your customers and is consistent with your image.
Make a floor plan and look for a location with suitable space and layout.
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28 . Consider proximity to suppliers.
Evaluate the local labor market to determine if the area has potential employees.
Research the local zoning regulations.
Research the local crime rate to ensure the safety of your customers and employees.
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29. Develop a budget.
Determine what you can afford to spend on rent each month.
Be aware of hidden costs, such as repairs.
Start-up costs may include renovations and decorating your space.
Budget for local property taxes.
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30. Plan for future growth.
If you plan on expanding your store within the next few years, find a building with extra space.
Communicate with the landlord about the availability of extra space in the future.
Extra space may include a second floor or outdoor space.
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31. Purchase your inventory.
This is perhaps one of the most important steps.
Before you can open your shop, you have to purchase inventory.
What this means exactly depends on your shop.
You may need to order the inventory that you will then sell directly.
Or you may need to order the ingredients for your baked goods or your sandwiches.
- One rule of thumb is to always have enough inventory on hand so that any customer can purchase whatever they want, whenever they want. However, this applies best to businesses that don’t sell perishable goods.
- Contact trade associations to find out the industry standards.
- In your first months, you may have to go through some trial and error to get your inventory on track. This requires that you keep accurate records of how much you sell and when you sell it. Hopefully, over time the amount of inventory you need will grow, making it doubly important to keep good records of your sales. This may also require you to take inventory at least once per quarter to see how much you have of each product.
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32. Determine your expenses.
Lists all of the expenses your business will incur when starting out.
You may have to lay out a lot of money at first before you start making any money.
Planning how to spend money will help you spend it wisely and start earning money sooner.
- Rent and operation expenses include your rent and, in the beginning, any security deposit you need to put down.
- Other expenses in this category include utilities and staffing.
- Property improvements and customizations include construction costs, furniture and fixtures, equipment and office supplies.
- Technology and communications expenses include computers, phones, internet, point of sale (POS) terminals, card readers, scanners and printers.
- Calculate how much you need to spend in inventory to start your business.
- Marketing and advertising expenses include print, online, television and radio advertising, grand opening expenses, print marketing materials like posters, flyers and coupons, and design work for your logo and signage.
- Other required fees include licenses, permits, taxes, registration, legal fees and accounting fees.
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33. Identify funding sources.
Know where to look for financing to help kickstart your retail business.
If borrowing money from friends or family members.
Preserve your relationship with a written agreement that specifies the terms of the loan.
Banks offer traditional commercial loans, and the Small Business Administration (SBA) partners with the government to offer several loan programs for entrepreneurs.
State, county and municipal economic development offices support small businesses.
That boost the local economy by offering financial resources, loans and grants.
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34. Determine how many employees you need to run your store.
Write job descriptions that define each person’s role, responsibilities and work hours.
If possible, plan to avoid hiring too many part-time employees.
Instead, design a schedule that gives employees more shifts or longer hours.
- Part-time employees are disengaged from your store’s success.
- Full-time employees are more likely to be committed to the success of your store.
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35. Have a grand opening.
This is another way to draw attention to your business.
After your business is up and running for a few weeks or months, have a grand opening party.
At your party, you can have drawings for free stuff, cheaper than usual prices, games for kids, etc.
This will be a party where you welcome customers to your shop.
- Although the grand opening may end up costing you money in the beginning.
- If you have a good grand opening you will make up for it in new business.
- Make sure to advertise the date and time of your grand opening! Have flyers sent out, post an additional ad in the local paper, create a social media account for your business.
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