While it may be tempting to set up a retail location for your business, you really need to consider the pros and cons of such a decision. Especially in today’s tough economy and competitive marketplace, a business owner has to know what the inherent risks of opening a retail store really are before diving in and making a huge investment of time and money.
So how can you determine if your business really needs a retail storefront or not? Check out some of the helpful tips below for some guidance.
Are you able to afford the rent?
One of the biggest challenges that business owners face when they open a retail location is being able to afford the rent, especially since rates can rise over time, regardless of whether or not your profit increases at the same rate. A lot of rental contracts for retail stores are fixed, so if you don’t generate enough revenue to cover these monthly costs, you should consider another way to sell your products and/or services to the public.
If you must have a retail store, be sure to take the time to work with a realtor to find a commercial property with the lowest rent possible, and a rate that’s comfortably within your budget. See if you can snag a great deal, such as a few months rent-free, and don’t be afraid to negotiate.
Can you afford the upfront costs and maintenance Costs down the road?
In addition to affording rent, you also need to afford the costs of setting up your retail location. When you find a spot to work with, you’ll need to fix it up, clean it out, and add to it so that it can mirror your brand and provide customers with what they want and need.
This can be very costly, especially since you may have to hire professionals who know how to use expensive equipment, such as welding equipment. While you may be able to head out and find some of this equipment to use on your own including welding equipment for sale, if you don’t know what you’re doing, it’s best to leave these tasks to professionals.
And on top of being able to afford the upfront costs of setting up your retail store, you also need to be prepared to make repairs down the road to keep your location in tip-top shape. If you’re concerned about being able to afford it all, an ecommerce shop could be the ideal alternative, as it has far fewer costs when compared to a brick-and-mortar location.
Can You Manage to Work Online Only?
Consider how much business you’re able to generate online. Do you do very well in the virtual environment? If so, what’s the real point of opening up a retail store? Do you really need to open a retail location, or can you instead save a lot of money and keep doing what you’re doing by shipping items that people order online? Answering these questions should help you determine the appropriate path for your company.