How to Start a Retail Business

Also I find this interesting article for you….. hope could be useful for all of you.

How to Start a Retail Business... Even If You Know Nothing About Retail
By Michael Masterson

Lots of people who want to get into business for themselves come up with the idea of opening a store. They hope it will provide them with income and, presumably, some equity that they can "cash in" or perhaps leave to their children. This is a common entrepreneurial dream. It seems pretty simple. People come in. You help them shop. They buy stuff. You make a profit.

Of course, it's not that easy.

Kristie Parks knows that, and that's why she wrote to me recently. She's a 48-year-old woman who doesn't have any business background. But her plan is to open a shop where she can sell clothes and other related products.

"Something went wrong when my husband and I purchased a house. I have less funds now. But I was just about to rent a shop and fill it with clothes and start to sell," Kristie wrote. "Then I read something in ETR that made me think I might go wrong again."

My first recommendation for Kristie - and anyone else who wants to make a living with a retail operation - is to buy a copy of my newest book, Ready, Fire, Aim. (It will be published in January.) It explains what I know about launching and growing all kinds of entrepreneurial businesses.

As I point out in the book, most retail businesses fail. The main reason they fail is because they are opened by people who have no experience. They don't know which products will sell and which won't. They don't know how to price their merchandise. They don't know anything about the management side of the business. But most of all, they don't know how to get enough customers to walk through their door.

That's the biggest problem. Not knowing how to bring in prospects and turn them into cash customers. There are many examples in the book that will give you ideas about how to do that. There are also some important rules and principles to follow during the first, critical stage of your business's growth. But rather than have you wait till the book comes out in two months, here are a few steps you can start taking now:

Step 1. Figure out how many dollars' worth of products you will need to sell in order to pay all your expenses every month. Not just product costs but overhead as well. Let's say that number is $10,000.

Step 2. Find out how much the average customer spends on a purchase in similar stores in your local area. You can do this by making friends with shop owners and asking them. Let's say the average customer spends $25.

Step 3. Divide the total dollars you need by the amount of the average sale. That will tell you how many paying customers you need to bring in every month to survive. $10,000 divided by $25 is 400. So you need to bring in 400 paying customers every month.

Step 4. During the start-up phase of your business, you should be spending most of your time on advertising. So now develop a marketing plan that will attract that many customers. Run this plan by anyone you know who has retail experience to make sure it is sound.

Step 5. Make any needed revisions to your marketing plan, and then get to work implementing it.

There are plenty of other things I talk about in Ready, Fire, Aim that may be helpful to you. Among them:

• Don't sign a long-term lease or buy a shop during your first year. In fact, try not to get yourself into any sort of debt.
  
  
• Choose a strong retail location with good pass-by traffic - traffic that would be interested in the type of products you will be selling.
  
  
• While you are still testing your marketing plan, keep your advertising expenses as low as possible. It may take several years to arrive at a strategy that works. Make sure you have enough money in the bank to last until you can figure that out.
  
  
• Come up with a USP (unique selling proposition) for your store. What can you offer customers that nobody else in the neighborhood can?
  

Those are just a few ideas to get you started. You'll find lots more in the book.

Why Would Someone Want to Buy What You're Selling?

Today, as I am looking for ideas, I find this interesting article by my favorite writer on my collection.

I think this article could be useful for you who looking for something to sell, at least you have to find out what kind of product are you going to getting involved with.

Why Would Someone Want to Buy What You're Selling?
By Michael Masterson

There are two kinds of products: need-to-have products and want-to-have products. Knowing which kind you are selling is critically important to your success.

Need-to-have products include houses, furniture, food, water, and electricity. Selling these products is usually a matter of providing good value. The great thing about need-to-have products is that customers keep on buying them. The difficulty is that you are usually competing against a host of like products - so the pressure to keep rates low is enormous. (Think airline travel. Think coffee.)

Want-to-have products include jewelry, perfume, draperies, and art. To sell these products, you need to create a perceived value for them. You also need to create the desire in your customers to own them - and that takes a great deal of skill. What's great about want-to-have products is that they tend to be viewed as being unique. So if you promote them properly, you can charge a lot of money.

Most products are not clearly one way or the other. In that case, you need to make a decision as to which way you are going to push your marketing.

Take coffee, for example. If you want to sell your coffee beans to the need-to-drink market, you'll have to accept very small profit margins. You'll have to cut big deals and move a ton of beans. Once locked in with vendors, you might enjoy very good ongoing business and very nice (though small, percentage-wise) profits. But you won't have to keep on selling very hard.

If, on the other hand, you want to position your coffee beans to the want-to-drink market, you will have to come up with a good reason why people should pay a premium price for them - and you'll have to keep the creative process going to continue to support your argument.

Accelerating Your Retirement: Start Your Own Business (2)

By Michael Masterson

8 Important Things to Know About Business

Apart from starting (and sticking to) a what is already working (and not getting too fancy), I've discovered eight secrets to making a start-up business work.

1. Business doesn't happen until you make the first sale.Buying office furniture and printing cards doesn't make the business go. Selling product does. Yes, there are some initial preparations you need to make - but until you have that first check in hand, all you're really doing is spending money.
2. The single most effective way of entering a new market is to offer a popular product at a significantly reduced price. In every industry, there is a good market for specialty and high-quality product producers - but capturing a reasonable share of those niche market segments takes money, time, and experience. When starting a new business, you are usually short in these three essentials. That's why it's better to resist the allure of high-priced, prestige products in favor of selling the most desired products and services at ludicrously cheap prices. If you can figure out how to undersell the giants, you will be in a very happy starting place.
3. It's ultimately about selling. Conventional business wisdom says you make money when you buy, not when you sell. I disagree. Great businesspeople make their fortunes by increasing the perceived value of their products, thus inflating prices and measurably increasing profit margins. (Think Chanel, Rolex, Range Rover.)
4. When choosing a business, select one that can be grown without your personal involvement. Many businesses - especially those built around the personality or drive of a single person - depend for their growth on the commitment of the founder. Avoid this type of business. It severely limits your growth potential. Make sure your business can expand with the addition of more money, property, or people - but not more of you.
5. Have an exit plan.Before you invest your time or money in any business (or anything else, for that matter), know exactly how much you are willing to lose - and get out if you hit that stop-loss point.
6. Focused effort is more effective than a diversified approach to business building. Ambitious people tend to fall into two groups: those who focus on one project at a time and those who spread themselves out on many projects. The focused approach allows you to acquire mastery faster. The diversified approach gives you more balance. I've done both. And although I'm naturally inclined toward diversification, I've had the most success and made the most money from the focused work.
7. Let your winners run and cut your losses short. Most business ideas or ventures that begin poorly, fail. This is a very important to learn. It's easy to get emotionally attached to projects/investments we believe in. But, when the marketplace tells you that your great idea is a loser, you shouldn't keep pushing. Close the project and minimize your losses. If you really have a good idea, it will come back to you in the future in another, perhaps better, set of clothing.
8. Pareto's Principle (the 80-20 Rule): 80% of your success comes from 20% of your resources.Most of the success/income/satisfaction you will get in your career will come from a small portion of your skills/projects/efforts. Make it a habit to ask yourself, "Where am I getting most of the benefit here?" and compare that to where you are putting in the most work.

Having your own business is the fastest (and most satisfying) way to a happy, wealthy retirement. So if you don't already have a good idea for starting a side business spend some time thinking about it.

To give yourself the best odds of being successful, either start a business that is already very close to the work you do now, or get a job working for a business in the industry you want to enter.

Accelerating Your Retirement: Start Your Own Business (1)

By Michael Masterson

How to Make Your Start-Up Business Profitable in Year One

You can invest a small amount of money (and a lot of hard work and well-spent time) in a small business and see it grow into a business that is worth a million in seven years. And you'll greatly increase your chances for success by having a plan - by knowing exactly what you need to do.

A typical start-up business that's close to what you already know should break even or lose a little money in year one, make a decent "salary" for you in year two, and provide a substantial bonus for you - in additional to a good, arm's-length management salary - in year three.

To make your business profitable in year one, figure out what you need, in terms of new customer revenue, to bring a profit to the bottom line. Then devote at least 80% of your resources - your time and money - to achieving that new customer revenue goal.

The key is to follow a program that breaks long-term goals down into shorter-term objectives and finally specific tasks. Each individual task should be something that can be accomplished fairly quickly. In terms of your marketing objectives, for example, individual tasks might look something like this:

1. Stop by three offices and leave brochures.
2. Call up such-and-such group and see if they would like to have you give a talk.
3. Buy a quarter-page ad in the local newspaper.

Put all of these small achievements together and you can achieve remarkable success in a very short period of time.

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Accelerating Your Retirement: Start Your Own Business

By Michael Masterson

While many people fail in business, many more succeed. If you subtract the foolish failures - restaurants being the most foolish, followed by any sort of glamour business (think travel, bed & breakfast, sports, celebrity) or retail business - the number of successes far outweigh the failures.

When starting a business, you can drastically reduce your risk of failure by becoming an expert in two areas:

1. First you must understand everything you can about the products and/or services you will be selling.
2. Second, you must become competent (and eventually masterful) at the specific marketing skills you need to sell them.
   

How do you become an expert in two things simultaneously?

The best way I know is to get a job working for the type of business you want to start.

Think of your employment as a paid training program. Work fifty or sixty hours a week (even if they don't pay you a nickel extra) absorbing everything you can. Pay particular attention to people and situations that help you understand how the business works.

By learning "on the job," you'll develop skills and accumulate ideas that will make starting your own business a hundred times easier. Some of these skills will be of a more general kind, like writing effective memos, pitching ideas at meetings, handling troublesome people, etc. Some of them will be more targeted: such as how to write persuasive copy or how to select lists of names to send promotions to.

The same will be true of the ideas you get. Some will be small - a clever way to run a meeting, a useful technique for following up on delegations, etc. And some will be big, powerful and very exciting.

The more you learn, the easier it will be to add to your knowledge and the more eager you'll become to start your own business. Try to resist that temptation until you've invested at least 600 hours in learning the product/service side of the industry and another 600 learning the marketing.

Remember, any complex skill takes about 1000 hours to learn and even if you have good teaching, you still need at least 600 hours before you know enough to avoid the obvious mistakes.

When it comes to launching your business, don't reinvent the wheel. Come up with a product and a marketing position that is 80% to 90% the same as what your most successful competitors are doing.

Remember, there is a good reason that they are successful. By investing 600+ hours into learning the product/service part of the business and another 600+ hours on the marketing, you should already have a good idea about why things work. But you aren't yet an expert. It takes much more time (about 5000 hours) to do that.

And that's why you have to proceed with caution - one small step at a time. Yes, you should try new things, but as I said they should be only 10% to 20% new. Taking this sort of conservative approach will not limit your growth because you will be able to "catch up" later. If you aren't careful and try something entirely new and different, chances are it will fail - however good you think the idea is. Remember: the key idea is this: until you've had 5000 hours of experience, you are not an expert. Don't act like one.

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