When you’re preparing to launch your own retail venture, there are some obvious questions you’ll need to answer; What will you sell? Where will it be? Who will run it? How will it fit alongside your current commitments?
Well, for every aspect you’ve carefully considered, there are a dozen challenges you’ve not even thought about yet – some of which don’t even have a clear answer. Here are six of the unexpected challenges you’ll face as you become a new business owner.
1. What happens with your trash?
It may not be glamorous, but what goes on behind the scenes of your shop is just as important as what’s on your shelves. Depending on the kind of waste your business produces, disposal costs can quickly add up. This breakdown by Expert Market will give you an idea of how many hundreds (or thousands) of dollars you might have overlooked in your business plans.
Are there ways you can limit these costs? Start by actively reducing your landfill waste by finding suppliers that use biodegradable or recyclable packaging. Given that consumers are increasingly seeking eco-conscious brands (both in the B2B and B2C sector, according to commercial waste recyclers, Countrystyle Recycling), better waste management helps your bottom line and boosts your sustainability credentials.
2. Cash or card?
It might seem like an innocuous question, but the answer has a far-reaching impact. While you might see the benefits of simpler accounting and no transaction fees with a cash-only business, it could cost you customers simply through the inconvenience for them to carry cash in an increasingly cash-free society.
When it comes to card payments, an MIT study found “willingness-to-pay increased when customers are instructed to use a credit card rather than cash”. So, even though card-payment systems have associated costs, they’re typically offset by faster-moving queues and customers spending more money.
3. What will you say online?
Building rapport with customers face-to-face is a valuable skill. But have you thought about how you will interact with people online? Social media conversations, answering questions on your website and responding to reviews all require a different kind of savvy.
According to experience management experts, Qualtrics, shoppers are willing to spend 31% more with a business that has excellent reviews. Plus, while 94% of consumers say they have avoided a business with bad reviews, 89% of people read a businesses’ responses to feedback.
This gives you an opportunity to build trust with potential customers, as long as you take time to be online and remember how to handle negative online feedback too.
4. How will you ensure product quality?
Product quality is a huge part of your business reputation and will influence your customers to come back again and again – or to stay away indefinitely. Choosing good, reliable products builds trust, minimizes returns and gives you a better ROI.
So, have you thought about how you will buy stock once you’re open for business? Hand-picking items from a wholesaler is ideal but, if you’re there, who is running your shop? If you move to online purchasing, how will you find reliable suppliers, and how can you respond if an inconsistent batch arrives?
5. What keeps your customers loyal?
Research repeatedly shows that attracting a new customer costs between five and 25 times more than keeping an existing one. On top of that, 57% of consumers spend more money with brands they’re loyal to. So promotions and reward schemes seem like a no brainer… but what about your profits?
Do some careful math before crafting your loyalty scheme to check you’re not setting yourself up for failure. Given that customers increasingly expect personalization, is there a way to offer a lower-cost but more personalized scheme? For example, sending emails with a personalized recommendation, based on their last purchase?
6. Can you plan for the unknown?
What’s the biggest unexpected challenge for starting a new business? Realizing that there is no way to predict the future – especially in retail. Each time you sign a contract (and you’ll be signing many) you’ll have to ask yourself: How long will my shop exist? Will this payment be easier or harder in a year’s time? What happens if I need to change premises? What does this lock me into?
Even if you were mentally prepared for the instability of earning $1000 one day and then barely scraping $500 the following week… You probably weren’t factoring the sheer amount of decision fatigue that comes from making choices while your business is in flux.
Prepare to be Unprepared
Ultimately, you can’t plan for every eventuality when you’re launching a new venture. The best strategy is to stay connected with other business owners, your suppliers and, of course, your customers and listen out for all the things you don’t know that you don’t know.