The world of retail is a fast-paced and exciting industry that can go in many different directions. Whether you are dreaming of opening your own food outlet, gift store or surf shack, our simple guide covers all the basics you need to consider before flipping that open sign over.
Finances and stock
Ensuring that your finances are in order and ready for your new retail store business are essential. It’s a big commitment starting a business, and a common mistake many small business owners make is under-estimating the actual costs that are involved.
That’s why it pays to do your research and have a chat to finance experts like your accountant, business banker and financial advisor.
Being a retail store, stock is essential to help keep your business going. Managing stock levels, knowing your suppliers, delivering time frames and things like shipping are some of the elements of your retail business that may take some time to get the hang of.
You may have your own funds tied up in your inventory which can lead it to being both your biggest asset and liability. Following a few simple steps can help make the process that bit easier.
- Ordering your stock– make sure you get the balance of ordering just the right amount, you don’t want to be overflowing in too much stock because then you face storage issues, but you also don’t want a shortage with nothing to sell.
- Payment of stock– keeping a good relationship with your suppliers is important, so make sure you have the funds to pay all your invoices on time
- Stock value– your stock plays an important role when it comes to the financial position and value of your business. Understanding the true value of your stock can affect your tax return and is required when insuring your stock with business insurance.
Sales process
Before you start selling your stock like hotcakes, you need to make sure all your point of sale processes are in place and running. Not only will this help when it comes to things like managing your inventory and finances, but will create an easy transaction experience for your new customers.
Some of the things you need to think about:
- What devices or systems do I need to take sales? Will you use a tablet for your point of sales (POS)?
- Have a chat to your business banker about merchant banking facilities and services- make sure you compare the fees and charges involved and that you are getting the best option to suit your business needs.
- Invest in a good POS system that can provide valuable insights into aspects of your business like what products are most popular, when you need to order more stock and how your business is tracking financially
Drive your customers
Spend some time arranging a marketing plan to help get your business out there and known in the retail community sphere. You don’t need to be a marketing expert to help connect with your customers, but using the right channels like social media and creating online business listings are all going to help.
It is common these days for retail businesses to not have a website and operate purely off social media sites like Facebook and Instagram. These platforms also offer the option sell your products through the sites too, giving you another opportunity to bank those sales beyond your physical retail shopfront.
Putting a few dollars behind some adverts to help promote your business is another marketing strategy that is easy enough to do, and something you will have full control of.
The formalities
Now that you have a physical shopfront, operating POS systems and customers getting excited to visit, you need to make sure all the formal stuff of your business is sorted.
These include things like:
- Understanding what business structure you want to set up as, for example a sole trader or company
- Get a business number
- Arrange your tax number with the IRD
- Make sure that the systems you have in place for your accounting and stock management are all organised and working
Protect your retail business
Your retail business offers products to suit your customers’ needs and no matter how well you secure your retail business, your shop is still susceptible to certain risks. Things that are out of your control like accidents, fire and theft are some of the very real risks that retail businesses face, and something that business insurance can help protect.
Some of the typical kinds of business insurance policies a retail business may need to consider include:
Public Liability insurance*-. Public Liability insurance is designed to provide protection for you and your business in the event a
customer, supplier or a member of the public are injured (and not covered by the Accident Compensation
- Commission) or sustain property damage as a result of your negligent business activities. If you lease your premises, then your landlord will more than likely insist on you having Public Liability insurance.
- Business Insurance-* there are a variety of coverage options that can provide cover for things like your business contents, stock, building and business interruption in the event they are damaged by fire, storm, theft, accidental damage or some other insured event.
- Cyber Liability insurance* isdesigned to help protect you from claims and support your profitability in the event of a cyber breach or attack. Costs associated with defending a cyber claim are also covered.
Sorting out your business insurance has never been easier. With BizCover, we provide a hassle-free online insurance experience providing multiple quotes from a great range of trusted leading insurers, so you can compare and save on your policy in minutes.
*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.
