When considering a small retail business, there are many things to consider such as the type of retail business and the type of products to be sold, how many retailers in and around the area you choose, how these businesses are doing in today’s economic climate. Where will the products come from in order to be competitive price wise and in the respect to quality? How long have these other establishments been in the area to see how deeply they have been embedded into the community? What percentage of the public would be interested in this type of product and is it seasonal and what percentage of that market lives in the area demographically speaking? Another important factor is what is the median income in the chosen area.
Determine the total cash on hand, the ability to acquire more cash through the use of equity in property, assets that can be used as collateral to secure a loan, stocks, bonds, mutual funds, IRAs and term life insurance policies. Now it has been established how much money there is to work with.
Find a location that affords the best visibility, access, parking, the correct image, the right amount of walk in traffic, and the right cost and terms. The location can be a rental or you can purchase the location. Always remember that when choosing a location for a business that location is everything and can make or break a business.
Purchase several double entry journals, one for cash on hand and personal taxes, one for business expenses, one for payroll, and another for sales and sales tax collected due to the IRS. If you are familiar with accounting programs, you can also use a simple accounting program to keep your records.
Determine the classification for the business, weighing all the pro and cons as associated to the business – an L.L.C. or limited liability corporation., an S corp., a sole proprietorship or a profit corporation and who the officers will be.
Obtain an employer identification number and a sales tax license. You will also need county and city occupational licenses and a employee tax permit. Register the business as the entity decided on and file a DBA fictitious name.
Start looking for a good insurance company for business insurance. This is a must have and can be pretty expensive. It may take a bit of shopping prices as they differ considerably. The problem with many of them is that they are not only high but want 50 percent or better down and only give six months to pay the difference.
Once you have all the required licenses and certificates (they vary from state to state and even from county to county) and the proper insurance, you are ready to purchase inventory. Find a wholesaler for the items you are going to sell. Shop around, as prices differ from wholesaler to wholesaler. Set up accounts with them and order your product. Make sure to do an inventory check as the product is delivered. Keep track of the inventory and how fast it sells. For fast-selling products, you may want to purchase more of that product on the next order, but for slow-selling products, you may want to purchase a bit less or remove that item from the inventory.
