Starting a business can be tough, especially if you enter a competitive market space such as retail. This is especially difficult in the existing market, as retail sales came in lower than expected during July against the back-drop of rising three-monthly borrowing figures. Sales rose by just 0.1% between June and July, for example, and while this is higher than the corresponding figures from last year it still fell short of the projected 0.4% month-on-month growth.
Retail Start-up: How a Temporary Location can boost your Chances of success
Given the challenging nature retail, it may be worth testing your proposed business model and venture in a simulated environment. The best way to achieve this is to sell from a temporary location or structure, but what are the exact benefits of this? Consider the following: –
1. Cut Overhead and Start-up Costs
As a general rule, establishing a retail estate venture requires a huge initial investment and high levels of expenditure. This can be difficult for some entrepreneurs to manage, as credit is increasingly hard to come by in a slightly volatile and uncertain economic environment. Investing in a temporary structure with a fixed, short-term contract helps to negate some of these costs, however, as they are far cheaper to source than standard commercial lease agreements. In addition to reducing start-up costs, this also minimises overheads for the time that you are trading.
2. Control your Stock Holding
Another common mistake made by retail businesses relates to the procurement of goods for sale, as many invest heavily and create a large stock holding that ties up the majority of available capital. This not only creates additional pressure to sell produce quickly (and potentially for a reduced price) but it also incurs additional costs in terms of storage. Having a compact and temporary retail space will encourage you to curb your investment in stock, however, as you can grow your business organically and order just enough produce to fulfil your initial needs.
3. Experiment with your Store Layout
In many ways, your temporary retail structure enables you to trial your business ideas in a low-risk environment. Whether you wish to sell for a fixed period of time or test your products at a professional exhibition, temporary spaces enable you to test your concept and experiment with the layout of your store in a bid to ultimately optimise profitability. As you begin to understand your market and the numerous rules of consumer behaviour, it is possible to refine the appearance of your retail space in a way that encourages individuals to spend more during their visit.
Photo credit: MTA Photos / Flickr
