4 Tips on Successfully Managing a Retail Business
A challenging yet rewarding type of small business to open and maintain over time is a retail business. From inventory to employees to the overhead of a brick-and-mortar location, there are countless responsibilities involved in such a for-profit enterprise. If you currently run a retail business or intend to launch one, consider these tips to make it successful:
1) Use targeting methods to hone in on your customer base.
For any small business or startup that sells goods, a top priority is to target a specific base of potential customers – and then to market to this group using appropriate marketing strategies. This process involves determining who would want to purchase the items you sell, where these consumers reside, the amount of money they are willing to spend, and how to most efficiently get your products into their hands. This could be done by selling items online or at a physical brick-and-mortar retail store.
2) Take ample time to manage your inventory, prices, profits, and customer data.
It can be a bit overwhelming to manage the financial aspects involved in a retail business. Because of this, it is critical to devote enough time to managing these tasks. Always be up-to-speed on your inventory so that you have enough products in stock for potential purchases. As far as how to put price tags on your offerings, be sure to conduct some in-depth research to come up with the most appropriate prices. If your store offers multiple items, keep a close eye on which ones are most popular based on profit figures. It’s imperative to strike the perfect balance between being fairly compensated for your items while not overcharging your customers to the point where they’ll shop elsewhere. In addition, always be cautious when handling customer information. This may include debit or credit card numbers, checks, PayPal orders, and other payment information or financial statements. Don’t forget your role in the shipping and handling process, either, if you mail items to customers. There are so many minor details and kinks to work out when selling items through a retail business, so stay organized and document everything.
3) If you oversee a retail location, make cautious and sound decisions.
Selling products at trade shows or online is great. But how would you like to open your own brick-and-mortar store on Central Avenue in your town? While opening a store is very exciting, it comes with its fair share of challenges. Conduct market research to select the best place for your store. Negotiate a price you can afford to either rent or buy property, which can certainly take some time and effort. Don’t forget about property taxes, property insurance, and other expenses that can take a bite out of your budget. Remember to put safety and security measures in place as well.
4) Be sure you’re properly handling all tax requirements.
If you sell tangible items, you’ll probably have to collect a state or local sales tax on each purchase someone makes from you. This often plays a role in where entrepreneurs choose to register their businesses since certain states, cities, counties, and municipalities have lower sales tax rates on the books than others. With an ever-changing Internet sales tax landscape, make sure you are fully aware of the tax laws involved in selling products online in your state – and to customers in other states or countries. Finally, having knowledge of the basic tax requirements of small business ownership is essential. If you own an LLC, S corporation, or C corporation, your tax requirements will differ based on the rules attached to each business entity structure. Consider working with an accountant to ensure you fulfill all of your IRS business tax obligations.