How to Open a Retail Store in 12 Steps (2024)

You’ve always dreamed of owning your own retail business, and now you’ve decided it’s time to make those dreams a reality.

Whether you’re opening a traditional brick-and-mortar store, building an online retail business, or starting a boutique, there are certain steps you’ll need to follow to ensure the long-term success of your retail store.

With that in mind, we’ve put together twelve steps you’ll need to take before you can launch and open your retail store.

12 steps to open a retail store:

• Draw up a business plan
• Get deep into market research
• Check out your finance options
• Organize your business licenses
• Choose your channels
• Define your branding
• Think about the customer experience
• Find your location
• Build your retail tech stack
• Start marketing your store
• Prepare a soft opening
• Get ready to launch your store

1. Draw up a business plan

Documenting your business plan is one of the most important steps you’ll take toward opening your retail store. Your retailer business plan will help you identify exactly which direction to take your business in and prompt you to consider the business from all angles, including your products or services, retail management structure, and financial operations.

If you’re looking for investors, your business plan is especially important in helping your proposal win investors over.

Your business plan doesn’t need to be set in stone -- in fact, it’s more beneficial for it to be a living document that you can refer back to and change with the evolution of your business. Here are just a few of the things to include in your initial business plan:

• Executive summary (includes a description of your business, products or services, and your target market)
• General company description
• Operational plan
• Marketing plan
• Financial plan

You can also read our full guide on how to write your own small business plan.

2. Get deep into market research

Before investing money into your retail store, you’ll need to know that your business idea is viable. The best way to discover whether your business will attract customers is by conducting market research.

Market research also helps you:

• Shape your marketing strategy
• Plan your store layout
• Decide which products/services to sell
• Set product pricing
• Determine what loyalty programs to offer
• Decide on a location for your retail store

If you plan on opening a physical retail store, think about the following questions:

• Are there any other stores in your area operating the same business model? If so, is there a large demand for this type of store, or is the local market saturated?
• What would separate your business from your competitors? What is your unique selling point (USP)?
• How can you fill a gap in your future industry’s market?

Then, you can get started with your market research. There are a few ways to conduct market research, including:

• Taking a look at what your direct competitors are doing -- what products they sell, their branding, and the customer experience they offer.
• Conducting online surveys aimed at potential customers. You can even do this via Craigslist and offer compensation for people’s thoughts and ideas.

3. Check out your finance options

Opening a retail store comes with a ton of expenses -- inventory, premises, staffing, marketing -- the list goes on. Many first-time, and even some seasoned business owners, will need to find extra capital to support these costs.

To ensure the long-term success of your retail store, you’ll need to consider what financing options are available to you.

There are plenty of small business finance options, including:

• Traditional bank loans
• Business line of credit
• Merchant cash advances
• Secured loans

Click here to read our guide on finding a small business loan that’s right for you.

4. Organize your business licenses

Even the smallest of retail businesses need certain business licenses. It can be a confusing process for those who haven’t sought licenses before, and it’s essential that you obtain the right ones. In some states, running a business without proper licensing is considered a criminal offense, while in others you could be liable for significant fines.

Make sure you contact your city, county, and state government offices to find out exactly what licenses you will need for your specific business. You can also check out our six-step guide to getting a business license.

You’ll also need specific licenses if you’re planning to sell online. Click here to read our legal and regulatory expert’s advice on obtaining a business license to sell online.

5. Choose your channels

Even if you’re opening a physical store, you need to also think about what other channels you’ll also sell through. Given the omnichannel nature of retail today, even if you hadn’t thought about going down the road of online retail, it’s a good idea to have a website for your store that will offer customers more information about you -- where they can find you, your background, your products, etc.

6. Define your branding

Your store’s branding will essentially be your business’s identity. This is what customers will come to associate you with, remember you by, and will (hopefully) help them recommend you to others.

Branding includes everything: your store’s name, logo, color schemes, retail merchandising choices, customer experiences, signage, storefront ideas, and even the smell of your store. The important thing to note is that you should keep your branding consistent, and let your initial market research guide your choices. Creating a balance between your brand’s personality and the needs of your target audience is key.

Although the Lush branding concept is simple, it’s instantly recognizable. Image source: Author

Source: insider.com.

7. Think about the customer experience

These days, the customer experience you deliver must be memorable, or you’ll fail to retain customers.

The customer experience, or retail experience, covers the following things:

• The customer’s experience while in your store: This covers everything from the way you greet them to how they experience the layout of your store, their ability to find products easily, and the ways they can interact with your products in-store.
• The benefits you offer customers: Aside from great products, what else do customers get from shopping with you? Creating valuable loyalty programs and special offers also give customers a memorable experience.
• The post-purchase experience: Perhaps a customer has bought an item, and once they’ve returned home and taken it out of the packaging, it’s not quite what they had in mind. The way you deal with returns or questions about products will also be a part of the customer experience.

8. Find your location

Where you locate your retail store will have a huge impact on the success of your business. There are a few things to keep in mind while searching for the right premises:

• Business rates: Research the average business rates in the area before committing. These rates include rent, utilities, and taxes, as well as other “hidden” costs, such as deposits, parking, and maintenance costs.
• Footfall: Are there other retail businesses in the area that will bring potential footfall to your door? If you’re opening a store that sells items for babies and toddlers, have you considered the demographic of the area?
• Competitors: How many stores with similar business models/products are open in the area? How can you effectively compete with them?

9. Build your retail tech stack

Selecting the right retail software for your business is one of the most important choices you’ll make.

There are multiple options for retailers to choose from when it comes to the software they can use to run their business, but the most important will be their retail POS system.

Here’s what to consider when choosing a POS solution:

• Feature set: Multiple payment options, inventory management, reporting and analytics, and employee management are all important POS features. Make a list of must-have and nice-to-have POS features before starting your software search.
• Cost: Don’t just choose the cheapest option available, as this can lead to selecting a tool that’s not the right fit for your business. Remember to explore each system’s hardware costs, transaction fees, and software subscription rates.
• Reporting capabilities: The best POS systems will give you insights into sales trends that will help you make informed business decisions. For example, Square POS provides users with real-time analytics so that they can adjust their sales tactics in good time.

Square’s sales analytics feature provides real-time insights to help businesses identify sales trends. Image source: Author

Source: Square POS.

10. Start marketing your store

Don’t wait until your store is open to start engaging customers, sparking interest in your new business, and building a reputation.

These are our top tips for creating an integrated marketing strategy to promote your store:

• Embrace social media: It’s always a good idea to create a website for your store, but also use platforms like Instagram and Facebook for targeted ads and for creating a buzz around the opening of your store.
• Offer sales promotions: In your early days, the first step in securing loyal customers is getting them through the door. Offering buy-one-get-one-free deals, 20% off for the first 20 customers, and free gifts with purchases are great ways to generate interest in your store before launch.
• Utilize local businesses: Ask stores in your area (avoid your competitors!) to put up posters or display business cards at the counter to promote your store. Be sure to reciprocate the gesture once your store is open, or offer the owner a goody box or coupons for your products.

11. Prepare a soft opening

Before you officially open your store, organize a soft opening. A soft opening means you open your store to the public, but without making a grand announcement (save the balloons for the big launch). This gives you an opportunity to see how customers interact with your store, to talk to your customers and solicit their opinions, and to generally give your store a trial run.

This also gives you the opportunity to identify issues and iron out kinks before you officially launch your store.

12. Get ready to launch your store

Choose a date and time to launch your store well in advance so that you can prepare everything with precision. Before you open your doors, you’ll need to make sure everything is in place, that your staff are trained to use your software, and that your inventory is well organized (remember what you learned during the soft opening!).

Make the most of your storefront to attract customers -- balloons, banners, staff outside handing out flyers or freebies -- but also remember to take the time to take notes on what went well and what could be improved.

Preparation is key to opening your dream retail store

Opening a retail store is no easy feat. There are multiple moving parts that need to come together before launch day, and it's the behind-the-scenes work that will ensure the success of your retail store.

Don’t rush the preparation -- the wait and rewards will be all the more worthwhile when you’re completely prepared for running your own retail store.