Joan writes:
How much money (do I need) to start a small retail business? What are the pros and cons I should be looking out for?
You could start a retail business for as little as $10 or as much as $1.5 million for a national fast food franchise.
Other questions to consider are do you want to sell on the Internet or brick and mortar?
Your first step should be to ask. “Is retail the right opportunity for me?”
Weighing several factors will help you answer that question. Personality, motivations, your strengths and weaknesses, money, and experience should be at the top of your checklist.
Many people successfully make the transition from being an employee to an employer, but many do not. Do you have what it takes to be in business for yourself?
Answer the following questions honestly. Talk to your spouse, best friend or prospective partner about your answers as a reality check.
1. Are you good at multitasking? In your own business, you have to be willing and able to do everything yourself. When you work for someone else, you are usually responsible for just one thing and have limited control. You are supported by others with expertise or experience in different roles and functions. In retail, every day can be a stretch, as you encounter customers, employees, vendors and landlords. You can’t say, “That’s not my job.” It’s all yours.
2. What is your risk tolerance? In a startup retail business, you worry about being in the right place at the right time with the right goods and services for the right people at the right price. Do you adjust quickly to unplanned events or prefer more predictable, organized projects? Do you see risk as a threat or an opportunity?
3. Do you count on a paycheck? New business owners can rarely count on a regular paycheck. Startups frequently require more capital than planned. Something’s bound to go wrong or change even though everything is penciled out in your plan. If you break out in a cold sweat if you aren’t paid on the same day every month, you may want to rethink going out on your own. Most of the money you make will go right back into inventory and other costs of doing business.
4. Are you a self-starter and comfortable being alone? Or do you draw your energy from being around others and count on colleagues for support and advice? In your own business, you must lead, knowing what to do and when to do it, and be fully accountable for everything that happens. The buck stops with you. Sometimes that’s a lonely place.
Still interested in starting a retail business?
You’ll need more information than we can possibly include in this post. I suggest you get the following books at Amazon or your local library.
Start Your Own Successful Retail Business by Jan Kingaard
Start and Run a Retail Business by James E. Dion
Retail Business Kit for Dummies by Rick Segel
Photo by bookrack.org.
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