5 Operational Challenges Most Local Retail Businesses Will Eventually Face
Starting a business from the ground up isn’t easy, especially in today’s ultra-competitive retail sector. Regardless of the industry you step foot in, you can be sure there will be a decent amount of competition to contend with. In addition to competing with other local outlets that may already provide some of the same products and services you’ll be offering, you’ll also have to compete with the fundamental challenges of running a retail shop, which include but are not limited to:
1. Finding an Ideal Supplier or Manufacturer
This is a step that should be completed in the initial stage of the planning phase. Every company should have a sound business model to operate from, and a key component of every plan should be product sourcing. Ultimately, since the decision is up to the company’s management and ownership, selecting suppliers, manufacturers, and/or distributors will be the first challenge faced by most local retail businesses.
2. Locating Appropriate Promotional Opportunities
Once a solid business model is in place and the necessary product sourcing has been conducted, most of the remaining obstacles will be encountered during the process of launching and marketing the business. However, overaggressive and under targeted marketing can lead to a wasted advertising budget, so doing things like blasting your company’s name all over town on flyer’s, or handing out business cards to random people, might not be the most efficient route. Instead, look for opportunities to expose your brand to a more targeted local audience. This can be achieved through networking with other local businesses, investing in TV or radio advertising, strategic sign placement, and so on.
3. Securing and Streamlining the Supply Chain
Another crucial aspect of product intake and inventory tracking is management of the supply chain, which is essentially the process of your product coming from the supplier/manufacturer, arriving at your facility, and being prepared for usage in your retail store. Ensuring that all items are accounted for and safely delivered is a top priority in any supply chain. Therefore, adequate supervision and even surveillance may be necessary for some shops, depending on the value of the merchandise. Retail outlets that begin to intake a large volume of product will eventually need a loading dock and the appropriate loading dock equipment (i.e. – lifts, dock boards,etc.) to streamline product unloading tasks.
4. Hiring the Right Employees
Any retail store that expands beyond the scope of a few employees will eventually need to start investing time and/or money into improving employee screening and hiring methods. This is especially important in the local retail sector, as your employees will be the face of your business, being that they’ll be physically interacting with local customers in a face-to-face environment. Thus, retail employees should be people-friendly and trustworthy before all else.
5. Expanding into a Larger Space or Opening a Second Shop
The goal of most retail stores is to either expand into a larger space or open up a second outlet. If this is a long-term goal of the business, why not start taking action to bring it into fruition now? Acting with this mind-set can push a business to expand faster, but only if all of the proper checkpoints are met at the initial location.
After all, there’s no point in opening a second store if the first one is not yet performing optimally. Once you have an optimal model in place in one area and it’s working there, then you move on to another area and try to replicate that success.
In closing, we should emphasize that these are certainly not the only challenges that local retailshops face i n everyday operations, but they are the most unavoidable for most retail startups. With that said, you’ll still have to learn as you go, because preparation and planning simply cannot replace experience.