How to set up and manage an independent retail business

Want to set up and manage your own independent retail business? You’re not alone. The UK is known as a nation of shopkeepers and the retail sector is the largest employer in the UK.

Despite challenges to the retail industry, notably due to the rise in online shopping, challenging economic conditions, business rate increases and issues such as rising costs for town centre parking, there is still a lot of interest in owning and running a shop.

There were 319,000 retail businesses in the UK in 2018, while in 2017, UK retail sales totalled £395bn.

Whatever kind of business you are opening, whether it’s a coffee shop, a butcher or a clothing store, doing your groundwork will make setting up and managing your retail business easier and bode well for a stable future.

Here are the key areas that make up a retail business and suggestions for managing each element well.

Create a business plan

A business plan will help you in your bid to get your company up and running and stay on track.

Use it to explain your business goals and what you want to achieve with your retail business. It will also help with your business decision making.

This will come in handy when you’re researching your business idea and determining if your plans are financially viable and in demand.

You can also use your business plan to gain access to loans, grants, investors and other forms of funding. This will be essential especially as you’ll be looking for the right premises for your company and it’s likely you’ll need access to finances to pay for them.

Find and keep the right premises

There are many considerations to make when finding the right premises for your retail business. Footfall is a primary consideration for retail. It is best to visit the area at different times of the day to see how many people pass by.

Consider how deliveries will be received, how easily staff can commute to work, public transport links, parking and proximity to competitors.

If you are opening a furniture shop, for example, think about how customers will transport their items home and whether you can receive deliveries of large items.

Or if you move to a location out of town, your overheads might be cheaper but are there enough outlets of interest around you to make it worth the trip for your customers?

On a financial level, you will need to consider insurance, planning restrictions, building improvements and business rates.

Build supplier relationships

Supplier relationships are vital for small retail businesses, because it is these people who make your product offering stand out from chain stores.

Building up a network of suppliers can help you stock your shop with items that your customers can’t easily find elsewhere.

Approach them early, set out your objectives and above all, pay them promptly. You may find as you work together they’ll come to you with new products first and even ask you for advice on new lines based on what sells.

Hire the right staff

A team with good product knowledge is the cornerstone of an independent shop. Why? They make your business different because they offer a personal touch. So finding the right staff is vital.

As your business becomes established, excellent staff can help shape its growth, encouraging loyalty among customers so they want to make a return visit and offer their own insights to help you expand or improve.

Set up your accounts

Retail is a numbers game, which is why we have already talked about the importance of footfall and a competitive advantage.

Successful retail businesses are the ones that keep an eye on the finances. The way you do this is by putting the right tools and processes in place from the beginning.

This means you can enjoy the creative aspects of their business too.

Here are a few easy steps to set up your accounts and organise yourself:

Manage your cash flow

This will help you make better business decisions. You can see what is going in and out, helping you judge when to replenish stock and staff your shop accordingly.

By managing your cash flow in the right way, you will have a good idea of when you can invest in new equipment or if certain promotions or product lines are increasing revenue.

Offer multiple payment options

This make it easy for customers to shop with you, so set this up early. Cash, card payments and mobile payments will offer your customers choice and flexibility.

Stay on top of your records

Make admin a breeze by getting into the right habits to record everything that happens in your shop.

Supplier payments, incoming money, staff wages, timesheets, rates and tax are all items you’ll need to track.

If you get into a good system early on, it will take minutes each day rather than building up over the month.

Choose the right bank account for your business

You’ll need an account than can handle incoming money, cash deposits after closing time, supplier payments and internet banking.

Your bank may also be able to give you advice about setting up your business and any startup finance that may be available.

How accounting software can help

To manage the whirlwind of retail you need secure and accessible, cloud-based online accounting software, as you are on your feet most of the day rather than at a desk.

Good accounting software will help you keep on top of your finances alongside your day-to-day activities. Connect with your bank account to manage incoming payments, cash deposits and costs as well as reducing the amount of admin you need to do.