How To Decide What Type of Retail Store to Open

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Owning and operating a retail store can be an opportunity to make money, work directly with customers, and provide a product that you care about to a clientele who can benefit from it. You can decide on a particular type of retail store to open by considering your interests and passions, as well as the business climate and customer demographics in the area where you intend to open your store. The theme of your retail store should provide you with the means to make a profit and also keep you interested enough to find your endeavor satisfying and engaging.

List your skills and interests. Think of types of retail stores that might be suitable for your particular skill set and knowledge base. If you love clothing and you care about the needs of underserved communities, you could consider a retail clothing outlet geared towards people who don't fit well into conventional clothing sizes. If you have a solid grasp of technology and have well-developed communication skills, you might do well opening a technology store that you market to people who are intimidated by technology.

Evaluate your budget, and the expense of evaluating the type of retail store that you are considering. Some types of retail stores, such as computer stores or jewelry stores, require you to invest substantial sums of capital in order to build a sufficient inventory to draw potential customers. Other types of retail establishments such as discount outlets or thrift stores require a smaller capital outlay. Consider available sources of financing and decide whether you have the means to open an expensive retail store, and whether it is worth it to you to borrow the money to do so.

Research the demographics in the surrounding neighborhood if you already have a retail storefront and you are deciding what type of store to open. Consider variables such as the income bracket of the people who live nearby as well as their average age group. Also choose a focus appropriate to the size of your store. For example, you can operate a successful jewelry store in a small space because your inventory doesn't take up much room, but a very small store would not be appropriate for exercise equipment, which tends to be large. If the rent on your retail storefront is high, you will need to either offer expensive products for sale, or turn over a large amount of inventory. Choose a type of retail store that can accomplish either of these objectives.

Warnings

  • Research the need or want for the products you are considering selling. You might be an expert at turtles, but not enough people in your area may be interested enough to economically sustain a business.

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.

Photo Credits

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