The Complete Guide to Opening Your Retail Store

01

Defining the Business

Before worrying about paint colors or display fixtures, figure out what makes your store worth visiting. If you can't explain why someone should shop with you instead of the store down the street, then having the coolest-looking store in town won’t save you. Business planning isn't glamorous, but neither is going out of business.

First steps:

• Define your store concept
• Identify your target customer
• Research competitors
• Determine your price point
• Develop a merchandising strategy
• Establish product categories
• Determine average sale goals vs. expected cost of goods and expenses. WILL YOU MAKE MONEY?
• Establish an inventory budget
• Develop first-year sales projections
• Determine staffing requirements

02

Selecting the Location

People fall in love with buildings all the time. I try to fall in love with locations. A beautiful storefront in the wrong neighborhood is still the wrong storefront. That being said, often times a very low rent in a marginal area can be a winner if you have the budget to use marketing and advertising to drive people to your store. Further, if you are a specialty store with few competitors, location will not be as important as it may be for other merchants.

Review the following to see how it fits your projected customer base:

• Demographics
• Income levels
• Traffic counts
• Parking
• Nearby retailers and competition
• Tourist traffic
• Seasonal fluctuations

03

Lease Review

Get an attorney to review your lease. Don't do this yourself. Don’t depend on the broker. I've seen retailers save a few thousand dollars by skipping legal advice and lose tens of thousands because they signed something they didn't fully understand.

Review the following:

• Base rent
• CAM charges
• Percentage rent
• Rent increases
• Lease term
• Renewal options
• Tenant improvement allowance
• Construction responsibilities
• Insurance requirements
• Exit clause
• ADA issues
• In a shopping center, competition issues. We don’t need 3 stores selling skin care in the same center.

04

Legal Requirements

Nobody opens a retail store because they enjoy paperwork. Unfortunately, paperwork comes with the territory. Handle it early so it doesn't delay your opening.

Review these issues:

• Business license
• Seller's permit
• Federal EIN
• State tax registration
• LLC or Corporation
• Payroll setup
• ADA compliance
• Building permits

05

Insurance

When you get your first insurance quote you'll probably think you picked the wrong business and should have gone into selling insurance instead. I've paid premiums for more than forty-five years and only needed a claim once. That one claim paid for years of premiums. Shop around—prices are all over the map.

Here’s what you will need:

• General liability
• Property insurance
• Workers Compensation
• Cyber insurance
• Business interruption
• Umbrella policy

06

Store Design

This is where fledgling retailers don't know what they don't know. I hear people say design is expensive. Compared to building the wrong store, it's cheap. A good layout keeps making money every day your doors are open. Find a designer who has built lots of stores of all types and seen them through construction. It’s not hard to design a great-looking store. It is much harder to design one that fits the client’s budget and timeline.

What the designer will help with:

• Design drawings
• Traffic flow
• Sight lines
• Feature displays and fixtures
• Checkout location and design
• Stock room needs
• Receiving area
• Colors and finishes
• Graphics and Video Screens

07

Interior Finishes

Finishes define the environment of a store. On a tight budget, good paint can work wonders. With a little more money, wood, stone and concrete add warmth and character customers actually remember and embrace.

Here’s the finishes to think about:

• Flooring
• Ceiling
• Wall finishes
• Paint Color palette
• Fixtures
• POS

08

Lighting

Lighting is one of the most overlooked sales tools in retail. Too bright, too dim or too harsh and customers won't tell you what's wrong—they'll simply leave. Your store designer should be able to provide a good, flexible lighting layout with fixtures and bulbs that will light the store correctly and increase sales.

Here’s the lighting you need to discuss with your designer:

• General lighting: Usually flat panel or flood lamps
• Accent lighting: Usually Track lighting
• Shelf lighting: More of a built-in specialty feature.
• Dressing room lights: Here’s where sales are made. Use the right lights in the right spot

09

Display Fixtures

Fixtures are often chosen by budget alone. That's a mistake. There are inexpensive fixtures that can tell a great merchandising story, and I almost always recommend mixing stock fixtures with a few custom pieces. Once again, this is a budget issue that can be solved by the designer in combination with the fixture provider.

Here’s the fixtures to think about:

• Wall fixtures: Recessed standards, slatwall, custom cabinets, puck wall
• Floor fixtures: Racks, tables, pinwheels, H units
• Showcases: As part of the counter or freestanding or against the wall.
• Cash wrap: This is the “kitchen” of the store. A gathering spot. Make it work for you. Take the customers’ money here but have impulse items to sell as well.

10

Graphics & Branding

How do you make your store sing? Graphics often tell your story better than merchandise alone. A few well-placed graphics resonate more effectively than a 4-way clothing rack ever will.

A few graphics issues to review:

• Logo: Behind the counter, in the ceiling or a little more subtle.
• Wall graphics
• Category signs
• Window graphics
• Digital screens

11

Technology

Technology is one of the least understood parts of building a store and one of the most important. If you have a hard time with a TV remote, hire a pro. If you're comfortable with technology, you can tackle a surprising amount yourself. Gotta love those YouTube DIY videos.

A few tech things:

• POS System
• Inventory software
• Security cameras
• Wi-Fi
• Digital signage

12

Merchandising

Unless you have merchandising experience, hire someone—even part-time. The difference between a professional merchandiser and a young store clerk can be thousands of dollars in sales every month.

The merchandiser should help with:

• Planograms
• Feature displays
• Seasonal displays
• Cross merchandising

13

Store Supplies

Nobody gets excited about pricing guns, ladders or tape guns until opening week. Then they're suddenly the most important things in the building.

Think about buying these items:

• Pricing supplies
• Packaging
• Cleaning supplies
• Office supplies

14

Inventory

A great inventory system saves time, reduces shrink and keeps your staff sane. Build good habits before your first shipment arrives.

• Purchase orders
• Receiving procedures
• SKU numbering
• Back stock organization

15

Staffing

People don't just buy products—they buy experiences. Your staff becomes the face of your brand from day one. Customers will always return to a shop where the staff treats them well. They will never return when the opposite happens.

Issues:

• Hiring
• Training
• Customer service

16

Marketing

Build your website while you're building your store and launch them at the same time. If you're building the website yourself, have a professional review it before it goes live. Good SEO isn't magic, but bad SEO can make a beautiful website almost invisible.

Marketing Possibilities:

• Website
• Google Business Profile
• Social media
• Email marketing
• Grand opening event
• Other events
• Media PR and advertising

17

Final Walk-Through

The last few days before opening are controlled chaos. Slow down, use a checklist, and don't assume someone else already checked it.

A short list:

• Lighting aimed
• Displays complete
• POS tested
• Staff trained
• Cleaning complete