A store is a separate building or an isolated part of it, specially equipped and intended for the retail sale of goods to customers. Usually, it is divided into functional areas: trading floor, warehouse, administrative and amenity premises. In all corners of the planet, these trading establishments perform the same function. Signs with the inscription chop (English), boutique (French), magazzino (Italian) are easily recognized by people who do not even know the local language.
Step-by-step instructions for opening a store
Select product type and store format
Before investing time and effort into opening a store, you need to get a clear answer to the question “Why do I need this business?”. Everything else depends on it: the concept of the store, the choice of location, assortment, suppliers, marketing, and advertising policy. There are many possible answers, but usually they are:
- There is an opportunity to buy a certain product at a bargain price. This includes the situation when the entrepreneur is a manufacturer. Usually, this is a shop of narrow specifics, from which the owner receives a small but stable income.
- Achieving financial independence. Entrepreneurship acts as a means to an end. In this case, the specifics of the outlet and its assortment do not matter. Then you can sell it and do something else. Sometimes the intention is dictated by the availability of free money and the desire to invest it profitably.
- I like to trade, a specific direction is the desire to do what I love.
In the first case, the idea is based on the characteristics of the product, the main task is to find buyers for it. In the second, the goal is to receive the planned income. The main task: to find the target group of consumers who have a need for a particular product, which no one has yet satisfied. Or you can do it on more favorable terms (closer, cheaper, more convenient).
Study statistics by country, region, city
In any country, statistical authorities monitor the state of the consumer market and the distribution of retail trade turnover. The data is analyzed and published in the form of a report for public use. So, in Russia, these are the bodies of Rosstat, in Belarus – the National Statistical Committee, in Kazakhstan – the Committee on Statistics.
As an example, we can cite the statistical collection ” Trade in Russia “, published every two years, and contains a lot of useful information about the structure of goods sold. For example, from his data, it follows that 42.7% of small enterprises and individual entrepreneurs are engaged in trade (Fig. 1).
The structure of trade has remained relatively stable over the past 5 years: about 47-49% are food products (including alcohol and tobacco products), and 53-51% are non-food retail. Detailed reports make it possible to trace even the dynamics of sales by individual types (Fig. 2).
Statistics show that over the past 2 years the number of outlets of large network retailers has been decreasing (from 32 to 28%) and the share of “other format” has been growing (from 6 to 10%). The latter include stores of ecological, farm products, combined with a cafe and a bakery, and so on. Of course, the “average temperature” in the country gives only general guidelines. Nevertheless, such an analysis will help to “weed out” some ideas already at the first stage.
Rice. 2. Growth in food consumption by category in 2017 (index of physical indicators)
Analyze the activities of competitors
In market conditions, there is a constant struggle for the buyer. Meanwhile, new stores are popping up all the time, and many of them are quite successful. As a result of the analysis of competitors, a clear understanding should be formed of which “victim” you can really take away market share from, what benefits you can offer the visitor, all other things being equal. Here are three classic questions that pre-reconnaissance answers:
- How high is the level of competition in the chosen niche.
- What guides the choice of the main consumer.
- How big is the threat of appearing near direct competitors after the start.
An entrepreneur who does not know his competitors is walking on shaky ground. The key to success is knowledge of the external environment and “your” customer. The easiest (and also the most expensive) way to get information is to order market research, but a lot of it is also freely available. Store directories are compiled for each city, and competitors’ websites provide a large amount of information for preliminary analysis. With the effort, you will be able to:
- find out the number of competitors’ stores in your city (district);
- compare the external and internal appearance of these stores;
- see their range, brands of goods;
- make a description of the main group of buyers;
- determine the level of prices for typical (hot) goods from other stores;
- evaluate the convenience of the calculation, and the quality of the work of sellers.
Example: You are going to sell plumbing in the middle price category. The seller should always be ready to answer the question: why can you buy the same toilet bowl at shop X on the next street for 300 rubles cheaper? Answer. We have a high-quality certified product (we show the document), and in addition to this, we offer delivery and installation (which is generally cheaper than ordering a separate job). And if there are such benefits, they should be written in large letters on the billboard.
Choose a room, building, or site
When looking for a location, you need to take into account the narrow local needs of the buyer and the general rules for the location of stores. The specific choice is dictated by financial capabilities and the format of trade. If it fails, the very existence of the business will be in question. We list stable, historically established trends.
The best places to shop:
- Trade-in branded, high-profile, designer items prevail in the city center. For them, the buyer is ready to come from any remote area.
- On the roads from the center to the residential areas, shops are usually opened for buyers with an average and higher income. An advantageous place is their concentration: a shopping center, a metro station, a transport interchange.
- In sleeping areas, two formats are popular. Large shopping centers are concentrated points of sale of clothing, footwear, household chemicals, radio electronics, and products. Small convenience stores with daily necessities.
|In the mall||good flow of visitors target shopping attitude additional shopping center advertising||presence of competitors landlord restrictions high rental cost|
|In a separate building||conspicuous draws attention can be original many buyers prefer specialty stores||purchase, construction, refurbishment are expensive is difficult to find a free building suitable for the format bad “neighborhood” can ruin the reputation (beer stall)|
A good location takes into account the “portrait” of the main buyer as much as possible: its financial level, age, population density in the near (pedestrians), middle and far trade zone (for motorists), the presence of an entrance and parking at the store. Be very mindful of the “local” stereotypes of the target group of consumers, their habits and way of thinking.
Clue. On the SME Navigator Portal , you can select your city and the most attractive areas for retailing, based on the lowest density of competitors.
Research and select suppliers
By what criteria to evaluate suppliers? Let’s just say that it’s easy to find them. It is much more difficult to choose reliable partners. The search for companies can be started from the Internet, where a large number of sites are presented, where manufacturers and distributors from different countries offer goods. In just a few of them:
- the largest Russian marketplace Tiu.ru;
- Kompass international website (represented in 60 countries, including European countries and the CIS Kazakhstan, Belarus and others);
- the largest wholesale supplier from China Alibaba.
You can evaluate a supplier only after working with him for some time. Therefore, the golden rule says that you need to increase the volume of supplies to the store gradually. It often happens that having received excellent samples (a small pre-order), the buyer immediately orders a carload of products and receives a product of a completely different quality. We list what you need to consider when choosing a supplier:
- The final decision should not be based solely on the best price . It is necessary to calculate all the pros and cons (delivery time, distance, payment methods, percentage of defects).
- Availability of certificates and declarations of conformity . Not every supplier is ready to present them, and if they are not available, the store increases the risk of receiving penalties from Rospotrebnadzor.
The advantages of working with domestic suppliers are that document flow and logistics are simplified, it is easier to check the quality of the goods produced on the spot. At the same time, purchasing imports from Russian distributors and dealers is expensive due to high markups.
Give the store a name
A good name plays an essential role in the recognition and promotion of the store. Provided that it matches his image, it is easy to remember and pronounce. Do not forget that the buyer is already quite sophisticated and has a large selection. If 20 years ago the Vse dlya Euroremont store attracted a very specific category of customers, today this name seems pretentious and old-fashioned.
To understand how well the name you have chosen (invented) is, you can conduct a small test among acquaintances and friends. Introduce it to friends and acquaintances and ask them to quickly answer a few questions:
- what is sold in this store;
- at what level price in it;
- what buyers go to it.
This will help you understand what associations the name evokes, how it reflects the assortment and price level, and the specifics of the outlet. There are many successful examples: Clunker is an auto parts store, Kopeyka is a grocery store with low prices, Daughters and Sons are goods for children, and Diamonds of Yakutia is a premium jewelry store.
The general scenario for opening a store in different countries differs slightly since this is a universal trading format. The differences boil down to the fact that each state has adopted its own laws governing the procedure for formalizing a business. Illegal business activity is punished everywhere. The main principles of business planning are universal, just like the basic laws of a market economy.
For some stores, it is important to have your own mascot – a mascot/character that helps to additionally attract attention, recognize you from a distance. It can be a static figure, or moving.
Write or order a business plan
The business plan in a concise and specific form reveals the essence of the entire project: the purpose of the activity, the cost structure of the store, the calculation of cash flows. The planning horizon can be different, the minimum bar is two years. It is needed not only by the entrepreneur himself, but also for presentation to potential investors: partners, banks, government agencies (based on benefits and subsidies). The structure of the document may vary in detail, but the main sections always reflect the following set of information (Figure 3).
- Description of the industry and enterprise: the purpose of the project, advantages over competitors, business relevance, SWOT analysis.
- The marketing plan includes the characteristics of the market, its specifics, development dynamics, forecast for the near future, sales plan.
- The production plan contains calculations of the required area of the building (premises), the need for equipment, utilities, personnel.
- The organization and management plan reflects the organizational and legal form, requirements for personnel qualification, product quality.
- The financial plan contains a predictable calculation of the main indicators of solvency and liquidity based on the estimate, taking into account the repayment of loans.
- The summary in a concise and understandable form displays the main essential data: the geographical location of the object, the sources of financing, the planned profit from the sale, the payback period.
Rice. 3. Approximate content of the business plan.
Register your business activity
In all countries, a business enterprise, including its own store, requires registration in the public register. In Russia, they are most often opened as LLCs or individual entrepreneurs, similar organizational and legal forms are everywhere. So, our individual entrepreneurs correspond to sole proprietorships in Europe (Einzelunternehmung in Germany), Individual proprietorships in the United States. If we consider the example of Russia, then the official registration checklist looks like this:
- The organizational form is selected, and the required documents are prepared.
- An application is submitted to the registration authority (in Russia it is the Federal Tax Service), where activity codes are indicated.
- Upon receipt of a positive decision (term 3 working days), the organization is entered in the register of UGRUL (legal entities), the entrepreneur in the USRIP.
- The IFTS puts new business entities on tax records (general taxation system, when submitting a special application, you can switch to the simplified tax system).
- For small businesses and entrepreneurs, almost all states provide preferential tax regimes that reduce the burden on business (in the Russian Federation this is UTII, PSN).
In the countries of the Customs Union: Russia, Belarus, Kazakhstan, limited liability companies (LLC) and individual entrepreneurs are also provided. The conditions for doing business and forms of taxation differ, for which you should study the legislation of the country you are interested in.
Draw up a contract for the purchase/lease of premises or land
If a land plot is leased for a store, then only for a long-term period – decades.
What do you need to pay attention to? There are three possible options for the design of the building (premises). We have already talked about the nuances of transferring residential premises to non-residential premises . Let’s take a closer look at buying and renting real estate. When purchasing a detached building, you need to check a few important points:
- The seller has the right to sell. If there are several owners, which is indicated in the USRN extract, the consent of each of them must be obtained.
- On what basis is the land under the building used? If it is rented, you need to clarify its cadastral value, the amount of rental payments.
- When the premises are located on the first floor of an apartment building, it is necessary to carefully analyze it for compliance with GOST 30494-2011.
Small businesses and entrepreneurs in most cases rent space for a store, and the lease should be carefully reviewed before signing. It can hide many pitfalls:
- Low price. Take a closer look at other tenants, perhaps the shopping center is filled with unpopular goods that are not the first, and not even the second necessity. This means that there will be few visitors.
- Is there a convenient access for trucks, a place for unloading.
- Check the extract from Rosreestr: is the building (premises) under arrest, perhaps the rights to it are being disputed in court.
- Is it possible to indicate the legal address for the tax service, other supervisory organizations, the bank where you plan to take a loan.
- Look at the conclusion of the Fire Service, the inspection acts of Rospotrebnadzor. Make sure the space can be used for a shop and has all the necessary connections.
- The contract must clearly state the areas of responsibility: utility bills, fees for garbage collection, so as not to get unexpected surprises.
A long-term lease agreement (over 11 months) requires registration with the USRN. To it, it is necessary to draw up acts of the technical condition of the premises, its acceptance and transfer and an additional agreement on the division of utility bills. It is necessary to agree in advance the conditions of the move before the end of the rental period (no penalties).
Repair, refurbish or build
Numerous government standards and building codes in all countries place high demands on retail space in terms of sanitary and fire safety. Some normative documents are international, others are valid on the territory of one country. For example, in Russia it is GOST 57773-2009 (classification of trade enterprises). Compliance with the rules is strictly checked, if violations are detected, officials and legal entities are punished with a fine, the store’s activities may be suspended. Control is carried out by public services with similar functions.
|Country||Sanitary and hygienic control||Fire safety|
|Russia||Rospotrebnadzor||Fire supervision service as part of the Ministry of Emergency Situations of the Russian Federation|
|Belarus||RTsGEiOZ||Ministry of Emergency Situations of Belarus|
|Kazakhstan||Public Health Committee||Ministry of Internal Affairs of Kazakhstan, Committee for Emergency Situations|
|Ukraine||State Sanitary and Epidemiological Service||State Emergency Service of Ukraine|
When building, refurbishing your own building, you usually order a comprehensive store project from a professional organization. It includes architectural, design, engineering and technical parts (heating, ventilation, refrigeration equipment, power supply). The project of the store is being approved by the supervisory authorities. When repairing, it is necessary to control the absence of deviations in the work of builders and installers. When renting a room, it is necessary to request from the owner the inspection certificates of Rospotrebnadzor and the conclusion of the Ministry of Emergency Situations on fire safety.
A couple of tips for store design:
- Lighting . At one time, natural lighting in the ceiling helped American hypermarket Walmart increase its gross sales by up to 40% [ source ] as merchandise became better lit. That is, there should be enough light in the trading floor, but not necessarily natural.
- Departments with hot goods . The best-selling item is usually located in the store farthest from the entrance: for example, in all large grocery hypermarkets, the entrance and bakery products are located at different ends of the hall. This is done so that the buyer, while going for everyday food, turns his attention to other goods.
- The location of cash desks and goods next to them. Cash desks are located either only at the entrance, or at a distance from the entrance. The latter option can be clearly seen in many clothing stores. Small goods should be exhibited next to the cash desk, if possible and relevant. This little nuance helps to significantly increase profits, since the buyer, standing in line, always pays attention to them and many people buy them.
Buy equipment and automation equipment in the store
Trade and technological equipment is selected in accordance with the specifics of the store in specialized companies. Its quality has a direct impact on the safety of products (refrigerators, wooden showcases for bakery products). When selling non-food products, beautiful clean shop windows, fitting rooms, and mirrors are very important.
The equipment layout plan should be developed at the design stage of the store, so it must be selected in advance. In a cluttered trading floor, it will be inconvenient for store visitors to walk, and it will be difficult for employees to work. The convenient cash equipment facilitates work of the cashier, increases passability. Since 2016, online cash desks have been introduced in Russia, a list of allowed models is posted on the website of the Federal Tax Service.
After the repair, equipment and purchase of goods, can work begin? In Russia, before starting work, you need to send a notification to the authorities of Rospotrebnadzor and the Fire Service of the Ministry of Emergency Situations. Forms of such notifications can be found on the official websites of supervisory services. There is no need to wait for a response – the inspectors will check the store in a planned manner. Other countries have their own requirements.
Select and train staff
A bad salesman can ruin a store’s reputation like no other, and nullify all the work of an entrepreneur. A professional approach to the selection of employees involves two stages:
- Studying the resume of the candidate and filling out a special questionnaire, which makes it possible to assess its suitability for future job duties and accurately compose questions for a personal conversation;
- An interview is the main moment that allows you to get a live impression of a person. The manner of holding on and expressing one’s thoughts, style of clothing, gestures help to understand how it fits into the chosen format, what can be expected from it.
A separate conversation is the administrator, who plays a key role in any store. Experts say that it is possible to “grow up” a professional manager of this level in at least a year, and with the participation of an experienced mentor. When accepting an applicant, effective results are obtained by an express survey formed on the basis of “life” situations:
- how do you plan your working day, what questions do you bring to the planning meeting;
- what will you do if you see that the seller is not working properly with the buyer;
- how do you finish the work, what results do you sum up;
- what will you do if it’s time for lunch and the plan is 25% complete?
The business owner must define clear criteria for the quality of the manager’s work, expressed in numbers: sales plan by amount and in pieces, average bill, number of returns. You should not spare money and time to send a capable employee for training, an internship in a successful store (your own or a partner). Trust and loyalty to management, the perception of your business as your own are very essential factors for a successful business.
A competent approach to the organization of the work of the store is that each manager clearly knows his duties. A common mistake of novice entrepreneurs is that they try to combine all the roles in their person: administrator, buyer (purchasing specialist), PR and sometimes office manager. Such a mix usually leads to failure.
If the store owner has strong leadership qualities and likes to work with people, it may be better to find an experienced supplier manager who is responsible for the assortment. The reverse situation is equally likely. Then it is necessary to find (poach) an experienced administrator in order to be calm about business with frequent departures.
What does it take to make a store run like clockwork? A set of clear written rules and instructions for all standard business processes. Regulation does not save from violations, but allows you to quickly identify and eliminate deviations. This collection should contain:
- Rules of the labor schedule (time of work, lunch, closing, dress code, norms of behavior in the team).
- The order of inventory, self-accounting of sellers, agreements on liability.
- Internal procedures (merchandising standard, operations and rules for the movement of goods from the moment they enter the store to the sale).
Regulations are created in the form of drawn diagrams, tables, list of requirements. Each worker just has to follow the established order, and not waste time looking for a solution in a given situation. Control over compliance with the rules rests with the administrator, and the absence of violations is an indicator of the effectiveness of his work.
According to paragraph 15 of Appendix 2 of the Order of the Ministry of Health and Social Development of Russia dated April 12, 2011 N 302n, employees in trade organizations must undergo mandatory and periodic (once a year) medical examinations, that is, have health books.
Buy a product
We conclude contracts with selected suppliers, and purchase goods. We focus on the expiration date, if present. Accordingly, the purchase and / or filling of positions can be started with goods that either do not have an expiration date, or they have a long one. The shorter the term, the closer the goods are purchased/displayed closer to the start of the store.
Start promoting the store
Advertising refers to a large number of different activities, and all of them require expenses. Of course, potential buyers need to know about you, but when choosing a way to convey information, you need to take into account the purpose that is relevant at a given time.
- Informing about the opening and existence of a point. This purpose is served by messages in newspapers, magazines, on television, and on the Internet, banners. They tell about the product, promotions, and benefits, and indicate the address and directions.
- Reminder, fixing the image of the store in the memory of customers is achieved by placing advertising leaflets on transport, in the subway. For the same purpose booklets and leaflets are distributed.
- Image advertising is designed to create a favorable impression, maintain a reputation, and emphasize stability and reliability. This is participation in business meetings, city events, and interviews on local TV channels.
- PR campaigns for buyers allow them to create a maximum of positive emotions and at the same time solve urgent problems. These are various family (children’s) competitions, holidays, and drawings.
To successfully choose a specific advertising medium, you need to know your target audience well. Young people get information on the Internet, older people and housewives watch TV, and motorists listen to road radio. All promotions are aimed at different goals and complement each other. The bottom line is how to use the budget allotted for this in the most practical way.
Don’t forget to add the organization to suitable, especially local, Directories and Navigators! If a person is looking for a particular store, then he is determined to make a purchase.
Have a Grand Opening
This is a powerful newsbreak that attracts the attention of the target audience. The interest and curiosity of the public is fueled in advance by messages in the media, and social networks, placing banners on shop windows, posting and distributing leaflets in the nearest area. The first day of the store is organized as a holiday, a bright event. A gift in the form of a discount card, souvenir, various promotions, and treats form a positive attitude of visitors.
The same purpose is served by holding competitions, and lotteries for children with the involvement of animators, festive decoration of the store with balloons, and musical accompaniment. If the holiday is a success, many of those presents will come to you again, and then everything will depend on how well you satisfy the expectations of customers.
What to do after?
It is necessary to constantly improve business performance so that after a short time you will not be among the outsiders. This means conducting constant own micro-research and testing in all areas:
- Buyer flow. Even a simple regular filling out of a special observation sheet will help with this. It will help to count the number of visitors (including those who made a purchase), their distribution by day of the week, time of day and periods of promotions.
- Analysis of the average check. It is useful to study the dynamics of their number with a detailed breakdown by hours of work, weekdays and weekends. This will reveal the solvency of your customers, the most profitable group for the store.
- Shopping cart. Monitoring what is actively bought and what is not moving will help the store adjust the assortment and reduce the percentage of write-offs. For this, the simplest type of calculation is used: the top 100 sales per week/month/year.
- The quality of the sellers. Small express surveys of customers leaving the store, a review log lying in a prominent place, will relatively quickly reveal which of the staff do not know how to get along with customers, are often absent from the workplace.
What to read?
We recommend reading the book “Retail Marketing. Practices and Research”, by Nordfalt Jens.
The book provides a detailed overview of retail marketing research over the past 40 years. This book describes a retail decision making model supported by many experiments and field studies. The author shows how, based on it, to correctly manage the assortment and prices, as well as create an environment that stimulates purchases in the store.
In the Russian Federation, according to Rosstat, hypermarkets and supermarkets occupy about 45% of the market niche in trade. The rest is accounted for by discounters, convenience stores and others. For small businesses, this area is attractive due to the rapid turnover of investments, significant tax benefits. Taking into account the individual characteristics of customers, flexibility, quick adaptability to changing conditions are the advantages of small businesses. If you add desire and creativity to this , even a small store will provide stable traffic and income.