We all know that the pandemic has created enormous challenges for the retail industry. Lockdowns, supply chain disruptions, social distancing and safety guidelines added costs and caused many retailers to shut their doors permanently. Looking to the future, however, I see two distinct types of opportunities emerging in retail.
To start, current retailers have high levels of job openings. Retailers need to rebuild staff, follow new operating policies, and even relocate or restructure the stores. All of that is driving demand for qualified associates. There are open positions in retailing as underscored by Walmart’s
What I find even more interesting is the opportunity for fresh entrepreneurial thinking. New customer habits and retail operating models are also creating new business opportunities as well – a need more and different retailers, vendors, and related service partnerships.
There are many aspiring entrepreneurs focused on retailing. Last year more than 600,000 persons became self-employed after losing their job due to the pandemic. Many of them found opportunities in and around the retailing sector, while others turned to hospitality and health service.
Retail has many opportunities for entrepreneurs eager to rebuild a business or start one. I found numerous store listings posted; looking more carefully, I noticed that searches for Florida popped up as one of the favorite states. The warm weather makes it a year-round destination for young and old. Young people starting a business in Florida find the lack of state income tax a big help as they work to become profitable. Some of their effort is directed at support for older people as they are a big customer segment in the state. Post pandemic, they have needs for products and services (coupled with service support and the convenient delivery of their purchases) as they venture out and about again in a safe way. Health clinics abound in Florida, and they have needs for reliable products and services as well.
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The favorable climate also favors Texas; it too has an aging population that needs additional care. There is no state income tax in Texas and opportunities to assist shopping for the elderly have employed many in the state. Tennessee is another state that has zero personal income tax, a favorable factor for self-employment. In addition, the state is business friendly, and since there is the influx of many new businesses, the state now claims to be “the no. 1 place in the Southeast to start and grow a business.”
I recently had a conversation with Tra Williams, an expert on entrepreneurship, franchise solutions and strategic leadership. He used himself as an example of a new entrepreneurial spirit responding to the changing retail environment and described how he started a new business. He started a truck driver school in Florida. He found that it had great appeal due to the shortage of drivers in the state needed to support delivery of all sorts of retail products and services – especially home delivery. He stressed that he perceived an unmet need, and he could fill the need with qualified drivers. He points out that when you perceive a need, you may be able to set up a successful new venture.
One of the most helpful resources for entrepreneurs is the Small Business Administration (SBA) who guides investors on how to start a new business. Through the SBA, the federal government has made stimulus funds available which can be applied for.
How to start a retail business?
· Validate the opportunity: The first step would be to conduct market research and find out if there is a need for the business you want to create. You have to find out what competition there is selling the product and whether it can be sold it at a competitive price.
· Write a business plan: Once you know that the product will sell, that there is a real need for it, the next step is to write a business plan. The plan should define the kind of store needed, who will run the store and how it will grow. This will be the roadmap for the venture and should incorporate some definite growth goals. Be sure to include measurable sales plans, number of stores, and staffing needs. It should extend over 3 or 5 years.
· Line up funding: To start a viable business, you must fund it. It can start with family seeding the venture, but additional sources most likely must be tapped depending on the scope of the project. At the same time, you must look for your first location. Remember “location, location, location”. It is a slogan that resounds in every retailer’s head. The first location must be visible, in a trafficked spot and near public transportation or public parking.
· Name your business: Naturally, your business must have a name. It is not easy to pick the perfect name You want a name that reflects your brand and captures your spirit. Dick Sporting Goods, the Sports Authority (now defunct), Academy Sports & Outdoors are some examples of descriptive names. Find one that consumers will be able to remember and associate with you.
· Complete all legal registration forms: Next, you have to register your business. As a first step, you have to decide on your legal structure – define how you will run the business because that must be presented in the paperwork various government agencies require. Then comes the actual registration; the specific information needed is defined under the laws of your state. You must get federal and state identification numbers, and finally you must apply for licenses and permits to keep your business running smoothly. For instance, in the sports stores mentioned above you need permits to carry firearms, guns or ammunition. In the case of firearms, you must also keep records of what firearm you sold to whom. Oh yes, you must get federal and state tax IDs. Your business will run smoothly if you keep everything legally compliant. Some states do not have a state income tax, but there may be real estate taxes that must be paid.
· Set up a business banking relationship: Lastly, you will need a business bank account. A small business checking account can help to keep all activities legal and separate from personal banking activities. You may also find your banker is another helpful resource.
Post Script: The help of the SBA can be invaluable for a new company. Their assorted guides and resources can help to define the store, the merchandise in the store, and identify the target customer you want to attract and who will buy the offering. Choosing a state to start the business can be very hard, since personal considerations will likely influence any decision. A young entrepreneur with a family wants a good school system, a middle-aged family wants good outdoor activities, and an older family wants good health care facilities. Bottom line, the challenges can be enormous, but the rewards can be great in retail – the new retail of the future.
This report was originally published on Monday, September 6, 2021. It has been revised and has been republished at 7:15 a.m. on Thursday, September 9, 2021.