10 Tips For A Retail Startup
First off, I’d like to start by saying that you are a startup even in your second and third year of business. It’s all new and exciting to be quitting your day job and venturing into a new project. However, the real work comes within the first few years of your retail startup, when it’s crucial to rethink and revise things based on your new knowledge. It’s rare that any startup will nail the ideal market niche and understand exactly who their ideal target market is right off the bat.
WHY TIP #6 IS SO IMPORTANT
The business you think you are starting will not the be the same business 9-12 months from now. I’ll almost guarantee it.
What you don’t know (and probably can’t find out without starting up) is the most important part of your road to success. Here are 10 tips for a retail startup:
#1 Focus on the Customer Experience
The customer experience includes the entire journey. How you obtain your customers to how they leave with your products or services and when they return (or don’t return). One of the first things you want to to do is create a customer-focused vision. Define that vision with a series of statements that you plan on making true to your companies brand. These will act as some of the brand guidelines.
Here are some questions that might help you get started:
Q: What is the impact that our customers will have when they purchase our products or services?
Q: What are the things that will assure that they return?
Q: What is the gap between our customers real need and want and what we might deliver?
#2 Don’t spend all your Money
Each year I help about a dozen startups review their business plan and financial projections, and every time I suggest two things no matter what the business model is.
- Save money for later in the year when you will need it the most
- Plan on spending 30% of revenues on marketing
Most Importantly, whether your an online business, home-based, mobile or a traditional brick and mortar, you will need to put a concentrated effort into your marketing strategies.
The most common advice and feedback that clients will get from lenders after they review their business plan is:
RETHINK YOUR MARKETING BUDGET
The wonderful teams at futurpreneur, women’s enterprise center and vancity, all of whom do microbusiness funding, will say the same thing. Most often their feedback after reviewing a business plan “We suggest you review and revise your budgets by increasing allowances for marketing and decreasing expected revenues.”
In addition, it’s important to have your business plan reviewed by someone outside your industry so that they can challenge perspective and help you think deeper at the unknowns.
#3 Celebrate your Uniqueness
Sara Moshurchak has a unique skill and creative eye. That’s her business. Eyewear. The original business named “Eyeland Framemakers” started on Granville Island. They sold a fabulous selection of fashion frames. But she also started hand crafting frames.
The industry was very competitive and she knew the importance of offering something unique, selective and upscale. . After 20 years on Granville Island she knew she needed to move. She wanted to change the direction and the location of her business. She faced several difficult decisions ahead of her and had so much invested and at stake.
CREATING CHANGE WAS SOMETHING SHE WANTED AND NEEDED.
Sara Moshurchak started to make a name for herself as Canada’s only maker of handcrafted eyewear (and one of 3 female framemakers in the entire world!) And In 2018 she knew she was ready to celebrate her uniqueness and launch her true identity.. MOSH!
Playing the role of mentor and business coach for Sara over the past five years has expanded my own personal growth. Watching the evolution as she builds the unique brand that is truly-her, is honoring.
#4 Ask for Feedback
Entrepreneurs seek advice and feedback from customers, mentors and advisers. But why is it that they are not ready and willing to act upon it?
- They discount the idea, immediately failing to use it as a springboard for other ideas. (I will make a suggestion here, explore the design-thinking approach where idea generation is a team sport).
- They already tried something similar and it didn’t get traction. (Re-frame: What did I learn from what I tried, how might I do things differently?)
- They failed to bridge the gap. The feedback, idea or concept was so far on the outside edge of their comprehension they deemed it as an impossible solution. (Re-frame:How might we connect the dots in the middle to give this a shot?)
#5 Keep Records
One of our clients, who was starting up her second business and put her past experiences and teaching background to work – TO WORK SMARTER
She started to document everything from the very beginning. She and her partner divided up the business into two segment. They were either working – on the business – or in it. Therefore, they documented the process into two sections, the back-end (behind the scenes ) and the front-end – (client journey/client experience) This process accelerated their growth immensely.
How many startup actually do this. Very Few.
Startups like to focus on the juicy fun stuff like brand development and marketing.
THEY NEGLECT THE TWO THINGS THAT WILL KEEP THEM
IN BUSINESS GROWTH AND SUSTAINABILITY
[/vc_column_text]- Financials (what you are earning and spending)
- Processes (what you do)
- Scheduler (what time you spend for each area of the business)
#6 Be Open to Change
Jessica and I opened the Velvet Room Boutique in Kerrisdale in 2007. It was just at the start of the #BuyLocal craze. We planned on offering everything a woman adores from a beauty bar to art, fashion and gifts – all made in Canada.
What we didn’t plan for was three big shifts in our business model and focus that all happened with the first 18 months of startup.
LESSON ONE: LEARN TO SHIFT QUICKLY
10 days before opening a major brand came to us and wanted us to carry their newly launched high end fashion line to sell on contract. This wasn’t the business model that we had planned for, however, their line was a perfect fit for our boutique.
We had already made strong connections with suppliers and had 20 lines on-board. However wanting to one structure for accounting purposes, we made a quick shift and changed our business model at the final hour. In retrospect, this proved to be a wise move.
LESSON TWO: LEARN TO SHIFT QUICKLY
We had planned on our customer profile to being professional women in their thirties. They were self aware, had a great sense of style and were passionate about buying local, ethically-made fashions.
But after 10 days in business, we were shocked to see that we had attracted a completely different clientele. They were older women with disposable income, wanting unique clothing and accessories. They were professional but entrepreneurial. They were busy middle age women who wanted to buy unique products. They were excited about one of a kind products and less about upcycled goods. Our unique, funky style boutique needed to change to suit the customers that were walking in the door – willing and wanting to buy.
LESSON THREE: LEARN TO SHIFT QUICKLY
Here is what we learned at the beginning of year two. It took the same amount of time and effort to sell a $30 lipstick as it did a $200 purse or a $300 dress. In conclusion, the 300 square foot of space that occupied our beauty section had to go. We listened to customer feedback and within the second year we were known for dresses and unique accessories. We essentially became the Mother and Daughter Dress Store.
#7 Promote Yourself
When it comes to marketing, promotion and networking, the main challenge I hear from my coaching clients is that they dislike selling. They find it uncomfortable and will do anything to avoid it. “We will just hire someone to do it”. Ouch. That’s deadly.
Were not saying that all paid marketing is bad! What we are saying is that you need to know your brand and what you stand for first. You need to struggle with finding your own ‘voice’ before you source it out to others.
Create avenues that feel comfortable so you are able to spontaneously
deliver your message in an authentic way
Q: What are the ways that you could authentically promote your products and services and yourself (as an entrepreneur)?
Q: Do you like to write, talk, draw, take pictures. How would you like your voice to be heard? What is your style?
Q: How could you share your value proposition with your potential customers, suppliers, competitors, community and peers that would be in your comfort zone.
#8 Identify your Ideal Clients
Many Entrepreneurs I have worked with are 100% confident that they know who their ideal customers are. And 50% of the time, they have not identified the target group that not only have a need for the product or service, but have a sense of urgency to buy.
By focusing on those groups of people that have an immediate need, entrepreneurs can narrow down their marketing efforts to their target group that are willing and ready to purchase.
In addition to selecting your target market, there are other things to consider when refining your business model and market niche.
Compare these two customer groups. Each were from businesses that I founded and ran for over 8 years:
- Client Group Number One; mid 40’s to mid 60’s male, most likely a foodie; enjoys entertaining, wants to make an impression, cares about quality, but likes to be frugal.
- Client Number Two: late 40’s to late 60’s, inclined to be a hoarder, wears plaid, enjoys hackling and probably fly fishing; likes bragging rights and is always frugal, borderlining on cheap.
Both client groups were super loyal and happy campers. Both client groups paid for their products and services up front before delivery. However, one client group yielded a $5 average sale the other a $135 average sale and had a slightly better bedside manners and was easier to please.
Read more about “What a WineMaster and Bargain Hunter have in common” in future blogs.
#9 Identify Opportunity
Jessica and I met Fumi Bull of Davie and Chiyo just after the opening of our Retail Startup. She and her sister Humi had a captivating story and unique business concept. But what was most interesting is that they found themselves taking advantage of an opportunity in a completely new market within the first few years in business.
In Fumi’s 4th year in business, I started working with as a her business coach. At the time, her sister was a busy mom who had limited time to put into their bustling business, which left Fumi wondering what’s next.
Not sure what direction to take, she and I explored many options. She found the real answer in partnership and her business exploded.
“Within six months I accomplished everything Deborah and I talked about” says Fumi Bull “I found the perfect business partner, which greatly increased our capacity for growth” Learn more about her entrepreneurial story.
#10 Collaborate with your Peers and Competitors
Learn, Grow and Collaborate with businesses in your community and marketplace. Adopt the abundance attitude – there are enough customers for everyone!
- Competitors who have different strengths and different clients
- Your Business twin in a different
- Businesses that started up around the same time as you
- Entrepreneurs that shares the same values and purpose
- A supplier or service provider who is invested in helping you
- Share a marketing initiative
- Exchange resources, ideas, industry connections on a regular basis
- Start a Mastermind group
- Organize a block watch program
- Hire a coach and work together on entrepreneurial and leadership skills
- Go to networking events together (it’s often easier to introduce your friend than yourself)
- There is value in referring a client to a competitor when you can not service them
- Create social media comradery