Summer 2008 Top 20 Start-up Questions for Holiday Retailers
From permits to profits, here are the top 20 start-up questions you need to ask yourself before opening day at your cart or kiosk.
1. Have I ordered inventory with enough lead-time?
A common problem in specialty retail is waiting too long to order product. When should you order? Lead times will vary depending on where you buy. If you are ordering from overseas you should order at least nine months out; through a jobber, two months out (and cross your fingers).
2. Have I ordered enough product?
Even though your peak selling days will come later in the season, your location needs to look great on day one. Nothing turns buyers off more than a sparse display. Order enough product to make your location look well-stocked and attractive from day one. Plus, keep in mind that once the season starts it will be nearly impossible to get hot items, so if you order early, you’ll have a lead over your competitors when the season heats up and they’re searching for product that’s in scarce supply.
3. Are my employees lined up?
Finding and hiring the best employees is a big challenge for all retailers, but seasonal retailers have an even bigger hill to climb. Start hiring at least two to three weeks prior to opening. Hire your manager earlier, if possible.
4. Do I have theft controls in place?
You need to have an inventory-control system (even if it’s a paper-based system) if you want to detect missing merchandise. Secure expensive small items that are easy to conceal and walk off with. Consider security cameras, which will allow you to monitor employees as well as customers. Cameras go a long way to keep down theft, no matter what the source.
5. Do I have a payroll system in place?
Decide well in advance of opening day whether you will be handling payroll internally or through a payroll service. Seriously consider a payroll service if you have no payroll/accounting skills or software to help you get the job done. Even if you do, a payroll service can save you time and money, freeing you up to concentrate on growing your sales.
6. Have I created an effective sales pitch to help my employees sell more?
A sales script can be valuable for any employee, but is very important when working with new employees. Analyze your product to determine who your best customers are and what turns them from browsers into buyers. Focus on those product features or benefits when developing your script. Then test it and tweak it as necessary.
7. Is my visual merchandising plan designed to attract customers and maximize sales?
Your location must have an eye-catching display if you want to maximize your visibility and, consequently, your sales. Most specialty leasing reps will want pre-approval of your display plans, so give them as much of a visual outline as possible (display plan-o-grams, photos, etc.). Get written approval. Also, if you’re bringing in a merchandising unit instead of being supplied one by the retail venue, center management will require photos/ detailed drawings of your set-up well in advance of opening day. Get a written O
8. Do I have synergistic retail neighbors?
The retailers around you can help generate traffic for your location. For maximum sales, make sure your retail neighbors attract your best customers.
9. Is my training program in place?
Don’t discount the importance of proper training! Create a printed manual that includes everything covered in a formal training session(s). In addition to standard training information, include contact info in case of emergencies, a copy of all mall policies, plus documentation and tech-support contact info for your POS system. Make sure banking responsibilities are clearly spelled out.
10. Do I know who my best customers are?
The best specialty retailers know everything they can about the type of customer they plan to target. Who you’re selling to will affect everything from what shopping center, airport, etc. you choose to operate in, to where you’ll want to locate within that center to how you choose to visually merchandise your product.
11. Have I selected the right location?
If you secure your location at the last minute, you’ll probably be acting out of desperation, which is not a great starting point for your new business. Start working on the mall, airport, theme park, etc. you want in February or March.
12. Do I have the right pricing strategy in place?
Your pricing strategy should aim for as much profit as possible without curtailing sales, which of course is a fine line. Investigate where your types of products are sold elsewhere and for how much. Analyze your prospective customers’ value perceptions of your product. Taking into account your cost of goods and expected launch/operating costs, crunch the numbers to make sure your profit margin is reasonable.
13. Do I have an employee-incentive program in place to generate sales?
At Retail Infusion, we’ve seen sales volumes increase by 400 percent once the right incentive program is in place. You will need to decide what the best program is for you based on your product, your customers’ buying patterns and your sales team’s skills and individual motivators.
14. Do I have the permits I need?
Waiting until the last minute to get the permits you’ll need can result in frustration if the process drags on while your opening day is looming (which is often the case). In some markets it might take four months to get a permit. Talk to the mall, airport, etc. to see what permits are required for your business and what kind of lead-time you should expect.
15. Have I obtained a local business license?
Most markets require a business license. If your business is within city limits, you’ll get your permit from the city; outside city limits, contact the county permitting office.
16. Am I registered to do business?
You must register your new business in each state where you plan to operate. Normally you can perform this on-line, on the official state’s website.
17. Do I have an authorized agent in the state where I am doing business?
If you do not live in the state in which you plan to operate, you will need to register an authorized agent with the state. The agent must be someone who lives in the state, or you can go through a business like Authorized Agents, which handles all states (www.AuthorizedAgents.com).
18. Have I filed as a fictitious corporation or DBA?
If you are going to operate under a name that is different than the corporate name that you’ve registered with the state, you’ll need to register your DBA, or “doing business as” name with the state.
19. Do I have a business banking account at a local, convenient bank?
The closer the bank, the easier it is to make deposits, which betters your chance of having your employees make their night deposits.
20. Have I coordinated my set up day/night with management?
Make sure that you confirm your setup day or night well in advance and stick to the schedule. Contact the leasing rep well in advance of your arrival on setup day/night. You may have to pay a fee for security or fill in a late-access form to get into the center during off hours. Don’t get caught staring at a locked mall door or being denied access to the airport or theme park because management didn’t expect your arrival.
Obviously, this list of top-20 questions is far from a complete list of start-up to-do’s. But hopefully it will help you focus on key items as you get the ball rolling on your new venture.
Some questions, such as “Do I know who my best customers are?” you’ll want to ask yourself again after opening day. For example, you may plan to sell to 19-to-25-year-olds, only to find that your best buyers are 12 to 18. But you won’t see that shift unless you’re paying attention to sales and refining your retail strategies accordingly.
Keep a keen eye on what’s selling and what’s not, who’s buying and who’s not. Refine your operations as you go along to make sure you don’t stay stuck in one mindset while opportunities present themselves elsewhere.
Good luck with your new venture!
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