How do I start my own retail business?
Starting a retail business has been one of the most difficult ways to start a business, and the statistic that “98% of businesses fail in their first year” has a lot to do with this business model.
This is why … Retail companies as usual requires a large sum of money to get started. I am going to share with you a method of starting a retail business that is not that expensive, but let’s first see how retail businesses were operated before.
In addition to having to pay your monthly lease, you have to worry about hiring employees, hiring a manager (if you don’t want to be in the store every day), buying stocks, getting commercial service and a computer system … not to mention having to worry that your employees will accept you for whatever you have in your stock or on your cash register.
All these risks and expenses end up affecting the business owner if they are not prepared to handle them … and unfortunately, 98% of business owners never think about the true importance of managing these things.
The basic rule of thumb is that if you are trying to start a retail business, you should have AT LEAST 6 months of your monthly overhead in storage and available for use.
However, the interesting thing is that most of these obstacles can be easily overcome … IF you think about them in advance and prepare for each of them.
And to give you a better perspective, I am going to tell you a story about a well-known businessman named T. Harv Eker.
He is known for a wide range of accomplishments, but this will be specifically about when he started his first business, Fitness Land.
Fitness Land was an exercise equipment retail store that routinely sold fitness equipment to people. With his system, he was able to open 11 locations in less than 3 years and sold half of his shares to the Heinz corporation (the ketchup people) for $ 1.6 million.
Here’s the full story …
When Harv decided to launch Fitness Land, he was completely broke. He had absolutely no money to start his business … so he borrowed $ 2,000 from one of his credit cards to pay for the first month and last month’s rent on his business premises.
And since he had no money for his products, he went to the manufacturer of the product with a very clever offer.
He asked the manufacturer if they could lend He bought one of his machines for a couple hundred bucks and promised he’d be back soon with a large order.
So the manufacturer decided to test it and then loan you the only machine. This is what Harv did with that machine … (this is the power of creativity)
It had about 600 square feet of work space, so what it did was cut most of the space so that people couldn’t access it. He put the machine behind the line that people couldn’t cross, put up a sign (which was just a piece of cardboard with a permanent marker), and anyone who walked into his store interested in the product would see a demonstration of how it worked.
Harv would get on the machine behind the dividing line, show the potential customer how it worked and if they were interested, this is what he would say …
“Well as you can see we only have this machine in stock because we JUST ran out of stock … so here’s what I can do for you. A shipment is coming tomorrow and you can have one of those machines for the price of $ 567 .. .or you can reserve one of the next shipment for $ 100 but that will come in two weeks. “
So naturally most people wanted the earlier shipment. He would collect the full payment BEFORE placing the order with his manufacturer and delivering the product to the customer. (This concept is very important … It’s called “no accounts receivable.” Collect payment BEFORE delivering your product)
He told all the people who wanted the machine to come on Saturday between 1:00 p.m. M. And 2:00 p.m. M. To be picked up.
Now this is where the cool part comes in …
When people showed up to collect their gear, they found themselves in the middle of a battle zone-like environment, trying to find an opening in the large crowd of people so they could collect their things. And I’m willing to bet that 100% of all those people were thinking in the back of their minds: “Wow … I’m so glad I made it in time to get mine. This MUST be a good product if they have THIS a lot of people. here “
And everyone who hadn’t bought the product yet was staring at the crazy crowd of people huddled in a small 600-square-foot space, thinking, “What the heck is going on there? I should check it out once the dust settles.”
Those two thought processes were EXACTLY what Harv was trying to build. An intense curiosity about what he was selling.
However, it gets better …
Within weeks, the police told Harv that he couldn’t do business if he didn’t have a few police officers there to direct traffic in and out of his little shop. Can you imagine what that means for your marketing? Have police officers directing traffic in and out of your store?
That’s great.
So, using this same system, he brought in several different pieces of exercise equipment and sold them like a watch. And seeing that his system was working, he decided to open a similar location in a different part of town and have his managers run it.
Using this simple but ingenious system, he was able to open 11 locations and the rest is history …
There are some amazing gold nuggets in this specific article. My recommendation is that you go back and read everything again … take notes when necessary.
If I ever had to start my own retail business I would follow this system. In my opinion, as long as you are willing to work, there really is no way this system can fail a retail business.
You DO NOT need a lot of cash to start a retail business. All you need is ambition and hard work.