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Realistic Expectations for a New Small Retail Business

Guest post by: Roland Petrov

Article Overview: When starting a new small retail business with a physical location for which rent is paid, it's almost built into the equation that you will probably be able to cover the rent and other expenses with sales, once the business gets known, but not much else. There are a lot of failing businesses out there, so what gives the successful ones a leg up? Here are some ideas.

Realistic Expectations for a New Small Retail Business

When starting a new small retail business with a physical location for which rent is paid, it would be very smart not to expect the business to eventually make you a living unless it is combined with another way to make money for which there is no separate physical location. Rent or lease charges are based on several factors, one of which is how much business you're likely to have. In other words, I believe that it's almost built into the equation that you will probably be able to cover the rent and other expenses with sales, once the business gets known, but not much else. There are a lot of failing businesses out there, so what gives the successful ones a leg up? Here are some ideas. The Internet: Internet sales is what can make up for the shortfall and help a store owner make a living. Now I hear you asking, “If Internet sales can make you a living, why have a store in the first place?” Good question. The answer is that many do make a living solely from Internet sales, but it isn't easy. By having a store, you have visibility in your immediate area, at least, and you have something people identify with and trust. You can use these images to enhance the website. In other words, your website will help the store and the store will help your website.

Sub-letting: When working out a lease, try to have incorporated that you may sub-let part of the premises. The other day a lady came into my store looking for a small area for her retail business, selling gemstones and jewelry. This is a business that would fit well with my store's concept, and so I could reduce the burden on my business of my monthly rent by having her subsidize it. This way, she is able to afford to have a small retail business and my business will now be putting some money into my pocket.

Two-in-One: If you could operate two businesses from one location, the burden of the monthly rent payments will be halved. For example, a lot of people walk into my Coupeville, Washington, tea store with an ice cream cone in their hands. The reason for this is that there's an ice cream shop just a few doors down from me. Their shop is only about half the size of mine, which means that if there wasn't an ice cream shop on this street, I could open one in my tea store. This way I'd have one lucrative business that's putting its monthly rent into my pocket instead of giving it to a landlord.

There are many other possibilities for reducing the rent or lease burden, such as using your space for other purposes after hours or trading with other businesses to use their facilities for barter instead of cash. My sister, for example, who wants to start a baking businesses, was recently offered the use of a commercial kitchen at a coffee shop here in Coupeville with payment to be made in baked goods instead of cash. This means that when she sells her baked goods, more cash will go into her pocket because it won't be going to a landlord. Another idea is to sell goods off premises, such as at farmers markets, swapmeets, and special events. These will increase sales and exposure.

If, on the other hand, you've done your business plan homework well, and you got a good deal on your lease to boot, you may not need an extra leg up. For the rest of us, the ideas in this article may be helpful.

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Article Tags: bartering, Internet sales, physical location, realistic expectations, retail business, subletting
Referred by: http://grasp-the-nettle.com/



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