Steps for starting a retail business

Choose a business legal structure

The type of business structure you choose should be determined by the following three factors: liability, taxation and record-keeping.

The following gives a basic idea of the most common forms of business structure:

• A sole proprietorship is the most common form of business organization. It's easy to form and offers complete managerial control to the owner. However, the owner is also personally liable for all financial obligations of the business.
• A partnership involves two or more people who agree to share in the profits or losses of a business. A primary advantage is that the partnership does not bear the tax burden of profits or the benefit of losses-profits or losses are "passed through" to partners to report on their individual income tax returns. A primary disadvantage is liability-each partner is personally liable for the financial obligations of the business.
• A corporation is a legal entity that is created to conduct business. The corporation becomes an entity-separate from those who founded it-that handles the responsibilities of the organization. Like a person, the corporation can be taxed and can be held legally liable for its actions. The corporation can also make a profit. The key benefit of corporate status is the avoidance of personal liability. The primary disadvantage is the cost to form a corporation and the extensive record-keeping that's required. While double taxation is sometimes mentioned as a drawback to incorporation, the S corporation (or Subchapter corporation, a popular variation of the regular C corporation) avoids this situation by allowing income or losses to be passed through on individual tax returns, similar to a partnership.
• A hybrid form of partnership, the limited liability company (LLC), is gaining in popularity because it allows owners to take advantage of the benefits of both the corporation and partnership forms of business. The advantages of this business format are that profits and losses can be passed through to owners without taxation of the business itself while owners are shielded from personal liability.

For more in depth information (as provided by the SBA)  click here.

Select a name for your business

Although this may sound simple, coming up with a catchy name that is easy for customers to remember and also describes the product or service you will sell is not always an easy task. Further, if you plan to operate a website, good domain names are getting hard to find. Once you have come up with a name, run it by as many people as possible to gauge their reaction.

Article: How to Name Your Business

Apply for an Employer Identification Number

You can read more about why you need an EIN and also apply for one online here.

Decide what products/services to sell

To dream up a product idea and then attempt to find a customer base for that product is not only backwards thinking, it may spell financial doom. The correct way to approach a new business is to find an area of consumer need and become the company to supply the solution.

It is also important to keep in mind that entrepreneurs who love the type of work they are involved in are much more likely to succeed. The best scenario, then, is to find a niche market wherein you will be doing the things you naturally love to do.

Need help finding a niche market? We’ve listed some helpful resources below:

NicheFinder
This marketing tool will give you a lot of valuable information about the demand for specific products or services in your field, as well as other exciting information and business ideas.

Great article with step-by-step instructions on how to use Google to generate new business ideas

StartUpNation.com
Find a Niche for Your business, fill it and win

Write a business plan

Writing a business plan is crucial to new business start-up. Not only does it clarify your vision and goals for the business thereby reducing the odds of failure, it is also required by most financial lenders when applying for business loans and grants.

The process of preparing a quality business plan can be daunting, but many resources exist to make the job easier. We’ve listed a few below:

Inc.com
Provides an excellent, thorough section touching on almost every aspect of creating a business plan.

Planware
Business planning software and a great quantity of other information and resources

Bplans.com
Over 500 sample business plans with searchable database

Learn the laws surrounding your business

What city, county or state business licenses or permits will you need to obtain before starting your retail business? You will need to contact each agency individually to acquire this information. Some entrepreneurs choose to hire and accountant or attorney at this point to ensure that everything is in order before opening.

Choose a location for your business

The location of your retail business can many times mean the difference between failure and success, so it is essential that you do your homework. Some factors to consider are state sale taxes, city regulations and economic incentives, commute, image, visibility, traffic/accessibility, type of space required (office, warehouse, store front, etc.), cost, convenience and zoning.

See Entrepreneur & NPRC’s 2006 list of  Hot Cities for Entrepreneurs

Articles:

Choosing a Location for Your Business

Thriving in a bad location

How to Select a Shopping Center Location

Evaluating potential locations for your retail business

Establish your business policies

The best time to establish policies and procedures is before you open the doors to your new retail business. Anticipating problems and developing solutions ahead of time, as well as defining normal day-to-day policy will reduce confusion and emphasize your professionalism.

Market your business early

Create an advertising plan and begin promoting your business well before you open. Let people know you are coming! Brainstorm ideas and take advice from various marketing resources and leaders.

110+ Marketing Ideas (Small Business Administration)

ideabook.com
Comprehensive archive of free tutorials offering insights on design, page layout, the use of color, illustration, photography, and typography, print and web design, and the business of design.

Duct Tape Marketing
Practical business marketing advice

 

It has never been easier to open a merchant account for your business. Please contact us to assist you in choosing the best merchant account package for your business needs.

TOLL FREE 1-800-896-6501