Items To Be Covered• Planning a Store: • Think it Through • Physical Planning • Business Organization • Professional Services • Why Do Retail
Items To Be Covered• Improving My Existing Store: • Vary your external appearance • Know your customers • Product of the month • Seasonal specials • Birthday specials • Frequent buyer rewards
Think it Through…• Be SURE you are committed to running a retail store. – It is like a marriage – you are committed to it every day it is open – Plan to be the primary person in the store for at least the first 6 – 12 months – Do NOT expect to take a salary or owner’s distribution for 6 – 12 months. If you are able to take one sooner, that is a bonus.
Physical Planning Items to Consider• Location• Layout• Lease• Product• Appearance and Operation
Location, Location, Location• As in any real-estate based venture, your location is critical. Since Nature’s Sunshine is such a high quality product, the retail price is naturally going to be higher than the “big box” discount stores.• Try to locate in an area not associated with bargain basement stores. While these do bring a fairly large flow of traffic, they tend not to bring people looking to purchase premium products at a premium price.
Layout• Before you begin to look for retail space, you should determine what kind of marketing activities you will emphasize. Some needs you should consider are: • The need for private office space for personal consultations. • How much administrative office space you will need for accounting, and filing of important documents? • How much storage space will you need for back stock of inventory, or for quantity orders and for other marketing supplies?
Layout (Continued)• How will you set up your sales area for merchandise display, marketing material display, and the overall atmosphere you want to establish?• What is the initial impression you want to give customers upon entering the store?
Lease Term and Cost• You should negotiate for a lease term that will allow you to control the costs for long enough to be able to establish the business, but no so long that you are unable to consider expanding or moving should you find a need to do so.• Engage the services of a licensed realtor to assist with the lease negotiations
ProductYou should consider which products youplan to carry. The number of productsoffered will affect the amount of shelf spaceyou will need, as well as the size of theinvestment you will need to make to acquirethe inventory.
Appearance and OperationOther items to consider are: – Shelving (what kind and what general décor do you want) – Sales counter (where will you house your sales terminal, customer bags, other sales supplies) – Computer system (will you use a desktop or laptop computer)
Appearance and Operation (cont.)• Point of sale and inventory control system (What software system will you use to track sales etc.)• Decorating items, etc.• Signage – VERY IMPORTANT (What kind of signs can you display inside and out. This may be influenced by your lease and available wall/floor space inside)
Business Organization• Determine the structure under which you wish to operate.• One critical mistake made by many small business owners is that they fail to consider what form their organization should take before beginning operations. Although you can change structural forms it is much easier to start with the structure you want to use.
Business Organization (cont.)• Forms include: – Sole proprietorships – Partnerships – Limited Liability Companies – Limited Liability Partnerships – Sub Chapter S Corporations – Subchapter C Corporations
Business Organization (cont.)• Each of these different forms of organization offer advantages and disadvantages• Some require the assistance of an attorney to set up• You should consult with an attorney or CPA to learn how each work, and determine the organization that will best suit your business needs.
Professional Services• Another critical mistake many small business owners make is that they fail to secure the services of professionals such as accountants and attorneys. – Don’t believe the myth that you can’t afford to hire professional help. – In most cases, the services of a competent CPA and Attorney will save more than they cost
Professional Services• Trying to go it alone can lead to many headaches down the line. – As a practicing CPA, I have seen the havoc that is reeked on a business when the business records are not maintained on a current basis
Professional Services (cont.)• Stay Current – The best strategy is to keep your books current daily. Trying to assemble accounting records at the end of the year is a recipe for disaster. The result is usually: • Missed deductions • Errant income reporting • The unavailability of data required by IRS to file a complete and accurate tax return.
So Why Should You Consider Retail?• Potential for good returns• Great way to meet clients you would never find otherwise• Great way to grow your success line quickly• Each day is a new adventure
Improving My Existing Store• Vary your external appearance. As much as possible, change out your window signs periodically. This will tend to catch the eye of frequent visitors to your area more than just keeping the same look all the time.
Improving My Existing Store• Know your customers. If you are not currently doing it, try to capture the following information from every customer you sell to – Name and address – Cell phone or daytime phone – E-mail address – Birthday (at least month and day) – How they heard about you
Improving My Existing Store• Product of the Month. Select a product to be featured each month. Place it near the register and offer it to every customer. We always offer a discount on it when it is featured.• Seasonal Specials. As space allows, set up special displays of products for the monthly theme. For example, we usually do back to school in August.
Improving My Existing Store• Birthday Specials. We collect the birthday (month and day) of our customers. We send out a birthday coupon each month for all customers whose birthday falls in that month. With it, they receive a 25% discount on any following visit.
Improving My Existing Store• Frequent Buyer Rewards. Consider using some kind of frequent buyer card for retail customers. When they reach a stated total of purchases, they receive a dollar amount off their next purchase.