You may already have a vision of the type of business you want to create. Or perhaps you are still trying to narrow your focus on what kinds of things you want to sell. Setting up a retail store can be an exciting opportunity that is both fun and challenging.
Our handy guide will take you through some of the key steps involved in setting up your store so you can get the ball rolling on your new venture!
Step 1. Research, Research, Research
The first step to setting up a retail store is to decide what store you want to open – what are you going to sell and how will you stand apart from everyone else.
The following prompts may be useful to working out how to make sure your business stands out:
- What are you interested in and/or passionate about? Figuring out what you like will make selling it easier and more enjoyable.
- Do you want to operate an e-commerce store, a brick-and-mortar shop, or both? The type of store you have may have a flow-on effect on other business decisions you make.
- Who are your competitors? Looking at how your competitors operate their business means that you can learn from them and improve on what they are doing.
- Who is your target market? Getting to know who you want to sell to enables you to cater your approach and ensure that there is a demand for what you are offering.
- How will you make sure your store is profitable? At the end of the day, you want to make sure you can bring home some money from your retail store, so you will want to consider whether you are operating in a market that has potential for profitability. If there are no other competitors in your market, it could indicate that there is no market demand for a particular product or service.
- What are some potential obstacles? Figuring out what problems you might encounter can help you plan ahead.
Step 2. Choose Your Business Structure
The business structure you choose for your store will generally determine how your business will be taxed and the degree of protection you will be afforded from debts or losses. There are three main business structures you may wish to consider when identifying what is appropriate for your retail store:
- Sole trader – simple and cost effective business structure in which you operate the business under your own name and ABN. Under this structure, you are solely liable for any debts and losses of the business.
- Partnership – another simple and relatively cost effective business structure in which two or more people run the business as partners. The business will have its own ABN and TFN but is not a separate legal entity, meaning that each partner shares in the profits, losses and liability.
- Company – this business structure creates a separate legal entity, meaning that you will have limited liability. Setting up a company involves a more complex process and is more expensive.
You can read more about the different business structures here.
Step 3. Create Your Business Plan
Writing a business plan lets you set out what your goals are for your store. It provides you with the opportunity to create a roadmap that guides you (as well as any potential investors or stakeholders) through the steps that will lead to you becoming a successful retailer. Your business plan should define what products your retail store is going to sell, funding, as well as your brand identity and marketing strategy.
You may wish to include the following sections in your business plan:
- Executive summary
The executive summary should provide a summary of:
- What your business does
- Your target market
- Your unique selling point
- Your goals
This section should provide an overview of your organisational structure and include a list of the ideal skill and experience required for each role.
It should also outline the products and services your retail store offers, as well as your vendors, suppliers, and manufacturers.
- Market analysis
The market analysis provides an overview of what the market problem is that your retail store aims to address. Not only should it consider who your target market is, but it should also assess your competitors and any market trends (opportunities and risks).
- Risk management
This section should outline any risks you may face as a business, and the ways in which you will manage them.
- Goals and actions
Set goals to help your business grow and outline the actions needed to achieve those goals.
In this section, you should outline how much money you will need, where it is from, and what it is for. It’s a good idea to create a budget, paying close attention to the costs involved in getting your store up and running.
You should also include forecasting on profit, loss, and growth.
- Brand and marketing strategy
Your brand and marketing strategy should outline how you will attract and build your customer base.
Step 4. Make It Official
Now you have a plan in place, it’s time to register your business and make it official.
Register Your Business
Before you begin trading, you will need to apply for an ABN (Australian Business Number) with the Australian Business Register (ABR). An ABN is a unique 11-digit number that will help to identify your business, enable you to claim tax credits, and register for PAYG withholding.
If you operate your business under a company structure, you will also need to register an ACN (Australian Company Number) with the Australian Securities and Investments Commission (ASIC). An ACN is a unique 9-digit number that can be used to identify your company and must be displayed on all company documents.
Choosing Your Business Name
You’ll need to come up with a name for your retail store. Will the name of your store be different to your registered business name? It’s a good idea to choose a name that is creative, but still reflects and communicates your brand identity and product.
Perhaps even more importantly, you will need to ensure that the name you choose is available to use. You can search ASIC’s business name register here and find out if it has been registered as a trademark with IP Australia here.
Protecting your business name is important, as it allows you to build your reputation and helps your customers to tell you apart from your competitors.
There are two steps you can take to protect your business name:
- Register the name with ASIC – this can be done through the ASIC. (We can help you register your business name here).
- Register a trade mark – this can be done through IP Australia. (We can help you with trademark registration and protection here). It’ll give you exclusive legal rights to use your business name.
After registering your business name, you may want to buy a domain name and set up your website and social media accounts so you can start marketing your business as soon as possible.
Licences and Permits
Depending on the type of retail store you choose to open, you may need to apply for a licence or permit to conduct certain activities.
You can look for any licences you might need to run your business using the Australian Business Licence and Information Service (ABLIS) search here.
Insuring your business is an essential measure to protect your business, customers, and employees.
Some forms of insurance are compulsory for businesses in Australia:
- Workers’ compensation – compulsory if you have employees
- Third party personal injury insurance – compulsory if your business owns a motor vehicle and is often part of the vehicle’s registration fee
You might also want to get public liability insurance. Working out what insurance is best for your retail store will depend on your business needs. If you are unsure what insurance coverage you need for your retail store, it is best to speak to a licensed insurance broker, like our mates at BizCover, for professional advice!
Step 5. Build Your Store
What kind of retail store do you want to build?
If you’re looking to open a physical store, finding the right location can be crucial to ensuring your business’ success. Opening a store in a location with high volume foot traffic can ease some pressure when it comes to marketing your store.
But a store in a quiet or hard-to-find nook with limited parking could make it difficult for your store to thrive. When it comes to finding the right location, it can also help to keep your target market in mind.
Knowing where they like to shop or hang out can assist in narrowing down what areas you might be looking at.
Other things you might want to consider when searching for the right space:
- Layout and area – is there enough space for what you need (e.g. display areas, dressing rooms, break room, offices, storerooms)?
- Budget – how much will rent and utilities cost? Will you need to remodel or renovate the space to suit your store?
Alternatively, if you are looking to build and manage an online store, it’s a good idea to work out what kind of store you want to create and what your business needs. Do your research to work out what platform suits your needs best. Some common platforms include Shopify, Squarespace, Wix, and Etsy.
Step 6. Establish Vendor And Supplier Relationships
Another crucial element to ensuring your store is successful is finding and working with reliable and trustworthy vendors and suppliers.
When searching for vendors and suppliers, be sure to keep in mind:
- Whether the vendor/supplier will work within the budget you have established in your business plan
- The reputation of the vendor/supplier, including whether their customer service team is reliable, personable and easy to contact in the event that you run into any issues or problems
- The quality of the products and services offered by the vendor/supplier
- Whether the vendor/supplier is pers
You may also want to establish and build relationships with several vendors and suppliers. Even if your preferred vendor/supplier ticks all the boxes when it comes to reliability and costs, it’s a good idea to have a backup option in place. After all, if you do not have products to sell, you won’t be able to run your business.
Step 7. Hire Staff
Looking for staff can be an exciting yet daunting task. You want to hire someone you will be able to trust and get along well with, as they will ultimately be a representative of your store. It’s a good idea to use the interview process to gain an insight into a candidate’s attitudes as much as their experience working in retail – you can teach someone your store’s processes and systems, but it can be much harder to teach them to be more friendly or trustworthy when it comes to helping your customers
Be careful not to ask any unlawful and discriminatory questions during your interviews, as they may lead to prospective candidates taking legal action against you. Read more about what you can and can’t ask in an interview here.
Step 8. Market Your Store
Create a marketing strategy that suits your brand image and appeals to your target market. Digital marketing using social media may offer a quick and affordable way for you to reach potential customers and generate excitement before your store goes live and you open your doors.
Learn more about marketing your business online here.
Setting up a retail store may require you to wear several different hats, but we can cover the legal side.
If you’d like to get some guidance, or if you just want to talk through your options, we’re here to help! Reach out to us at firstname.lastname@example.org or call us on 1800 730 617 for a free, no-obligation chat.
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