Let’s agree on one thing. Traditional retail isn’t dying. It’s evolving. With the digital age, retail stores have a new avenue to reach customers, more work and more decisions.
Selecting the right business plan, having a detailed business structure, and planning how to sell omnichannel is crucial before you cut the ribbon on your store.
Here are some essential elements to think about:
1. Decide on the legal structure for your business
The legal structure you decide on will affect how you pay your taxes, the personal liability on debts, raise capital, and have shareholders. Here are the different options available for you.
- Sole proprietorship
- Limited Partnership (LP)-
- Limited Liability Partnership (LLP)
- C Corp
- S Corp
- Limited Liability Company (LLC)
In addition, your retail store may also be part of a franchise. Franchises operate differently from other types of business, requiring various legal agreements and documentations. It’s best to contact franchise lawyers to help you set up the business through the correct channels.
Once you have decided on a legal structure, the next step is to register your business. This involves filing paperwork with your state’s Secretary of State Office, a Business Bureau or a Business Agency.
2. Write a business plan
You can start drafting a business plan with a legal structure in place. To begin writing your business plan, start with your store’s vision and purpose. Your business plan should act as a guideline that includes your goal. It’s also a roadmap to plan your business every year. With a business plan in place, you know the steps you need to take each year to reach your business goals. Here’s a list of what to include in your business plan:
- Products and services
- Target market
- Marketing strategies
- Employees and staff
- Financial forecast
A business plan also needs a financial forecast to estimate your revenue and expenses.
3. Pick your business name
It’s essential to pick one that reflects the brand values and identity and the customers you are trying to reach. Once you have decided on a business name, make sure that it isn’t in use. If it isn’t, then get the name trademarked. This ensures that no one else can take it while you set up other elements of the business, such as working on legal paperwork and creating your social media presence.
4. Get licensing and permits
You need the correct permits and licenses to operate. Not doing so is a criminal offense, and you’ll have a hefty fine depending on the laws of the state you’re working in.
5. Employer identification number (EIN) or Business number
If you are based in the US, you need an EIN. If you are based in Canada, you need a Business Number Registration.
6. State and local, provincial licenses
Each federal government, state, province, city and county have its requirements for a business license. To know what licenses you need, check the Small Business Administration (SBA) or the Government of Canada website for the right resources in business requirements.
7. Resale certificate and seller permit
You also need a resale certificate since you will be purchasing products from vendors and distributors to resell them to your customers. With a resale certificate, you have the right to buy these items without paying tax to the seller. With a seller permit, you can sell your products in the state you are operating in, and it also recognizes you as a business that collects sales tax.
8. Certificate of occupancy (CO)
A CO ensures that your store’s building has all the proper compliance with building codes and other necessary laws. This means it makes it safe for employees and customers to visit.
9. Choose your business tools
Having your business registered and your business plan is just the tip of the iceberg. You also need to start getting your business running and growing. Here are some essential tools to have:
Retail point of sale (POS) system: Get a cloud-based POS as it allows you to process transitions on all major payment types and gives you access to advanced reporting and inventory management.
Payment processing: You want a payment processor to take in credit card payments at the cashier. Make sure to choose one that has a low transaction fee.
Security: With plenty of customers using contactless payment, you want to keep them safe by subscribing to payment plans that are contactless, signature-free and have screen guards.
Accounting: You can either hire an accountant or sign up for accounting software to help you manage your POS system and streamline all your accounting needs.
Marketing: Marketing is an essential aspect of any business. You want to create your online presence as quickly as possible across sites like Facebook, Twitter, Google and Yelp.
Ecommerce: You also need a website. In today’s world, online stores are a must. Many eCommerce platforms have built-in templates and plug-ins designed for a retail business to quickly and easily set up a website.
Now that you’ve covered some of the essential elements of setting up a retail store, you’re ready for opening day!