Behind The Counter - Buying A Retail Outlet
"Liked the shop so bought the business" - it does happen and owning your own retail outlet is a dream shared by many. After all there is huge revenue to tap into with New Zealanders spending more than $12,000 in shops each year, for every adult, child and baby.
Bear in mind that this revenue is
spent in more than 49,000 retail
outlets, including shops, service stations, cafes, restaurants and car yards.
If you are thinking about starting or buying a retail business you need to consider both the general issues involved with starting a business, as well as specific issues relevant to retailing and the retail sector. To be successful you need to operate competitively in your chosen niche, standing out and having a good understanding of your customer and the market.
Location is an important factor but equally so is determining what "drives" the customers to your store to buy. A central location with plenty of foot traffic means a steady supply of potential customers past your door. But if you have identified a niche market that is particularly sought after, then location is not of paramount importance, which could mean big savings in rent.
If the business relies on its location then you will want to be certain the lease in place is transferable/assignable and is long-term. It is advisable to negotiate additional options to give yourself at least 10 years of contract length. If there is an anchor tenant that brings customers to the location, such as a large chain store or supermarket, then investigate how long their lease is, if they are solid financially, and whether they have any plans to relocate in the near future.
It pays to think outside the square in today's highly competitive market place. Identify an attractive niche to service and consider extending your sales channels to include mail order, the Internet and possibly the wholesale or corporate marketplace.
Remember that being in business doesn't mean being behind the counter. Business ownership involves a significant amount of administrative input including prudent marketing and buying, so do your homework and know what to expect. Make it easier on yourself by employing high calibre staff, then put policies and procedures in place to ensure they get up to speed quickly. Work towards having a key person in place that can relieve you of some of the daily burdens and ensure that there is someone to step into your shoes should you want timeout from what can be long hours.
Owning a retail business can be a challenging and rewarding lifestyle, so be prepared. Check out New Zealand business for sale site www.nzbizbuysell.co.nz for informative tips and retail business opportunities.