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So You Want to Own a Retail Store
So you want to buy and run your very own retail store? This article will cover some of the vicissitudes you will come across, as well as guidelines to live by. In the five and a half years I worked in retail, I learned all the areas of the liquor/party store business, and became very proficient at it. I began to suggest to my boss improvements in policy that could be made, as well as reinforcing the strong points.
Trials and Tribulations
No business is without its difficulties, especially when you are the owner. As the owner, if the business is successful, you will make far more money than any of the employees, but you will also bear far more responsibility.
1. Remember, when you are the owner, the buck stops with you. For instance, in the party store, if a light went out, or a cooler or freezer went down, it is your responsibility to arrange to get it fixed. Not your stock person, not your register operator. It will be your headache. If an employee calls off, you will have to find someone to cover that shift. If you are unable to find someone to cover the shift, it will be you working it. There is nowhere else to pass the buck.
2. You must pay your employees before you pay yourself. If a "customer" comes in and manages to steal merchandise and get away with it, it will come out of your profit. It will not come out of your employees' paychecks. If the store does not make a profit, it will be you losing money. As long as you retain employees, you must pay them.
3. Stay in business any length of time, and you will hire employees that will turn out to be useless and sometimes dishonest. Patrons are not the only people that might steal from you. Often times, it's done by someone you gave a job to. There will be other employees that do not steal, but also do not do their jobs. Firing an employee is often described as the least favorite part of the job by business owners.
4. There is always uncertainty. Economic times change, and your profits and profit margin will fluctuate. You don't get a steady paycheck like your employees do, you never know what you are going to bring home every month, so it will be more difficult to plan a weekly or monthly budget. This is especially true when you are first starting out.
5. Disasters can happen. Your establishment can burn down, or be flooded, or be severely vandalized. It is important to have adequate insurance.
6. Marketers from competing vendors can cause headaches. In the party store, this was most true with the beer marketers. They often acted like impish little children. When they thought I wasn't looking,the Anheuser-Busch marketer would try to hide or obscure the Miller signs when they would come in to replace their own signs, and vice versa. I had to admonish them. It got to the point where I would often warn them in advance when they came in, that if I caught them touching a sign from another company, I would kick them out.
7. As a retailer, you are a facilitator of purchase. You act as a liaison for several different companies to sell their product to the end user, without them having to go to each individual company to purchase their products. As a result, the saying, "The customer is always right" often does not apply to you by a large, heavily established vendor. Meaning, if Anheuser-Busch for whatever reason decided they needed to change their delivery day and time...they never asked us if it was OK. They informed us that they would now be delivering on this day and at this time. They didn't ask permission, because they knew they didn't need to. They knew that for us to stay competitive with other party stores, we could not be without their beer. Let me add that they weren't sadistic about it, they didn't do it just to be a pain. But because they knew we needed to buy their product, they accommodated their own schedule, not ours.
Guidelines for Owners to Live By
1. Follow your own rules and policies. Not doing so will cause more disputes with customers than you realize. We had a check cashing list for regular customers. Not all regulars were listed in it. If someone wanted to be permitted to write or cash checks, they had to be approved and their name, address, and phone number written in our check cashing book. And no second party checks were allowed to be cashed or used for purchase. The owner would frequently deviate from the procedure he set for us and cash checks from people not in the book. This caused me along with other employees to get yelled at by these same customers when we explained to them that we were not allowed to cash their checks, because they were not in the book. They would protest that the owner cashed their checks frequently. We would explain that as the owner of the money, he had the prerogative of taking that risk. You would be surprised at how many did not understand that. If you are going to deviate from the policies you set for your employees, make sure you make it clear to the customer that he is not to go to one of your employees to have the same thing done.
2. Be flexible with your employees. If you are the owner of a relatively small retail store, chances are you will not be able to afford to pay as much as a large supermarket or department store. As an owner, it is important to retain good employees. Since they could go to a larger store and make more money, it is important that you offer them a compensating quality. A lot of your employees will be young, entry level workers who are often in high school or college, and will need flexibility due to school scheduling, or exams, or a sudden change in extracurricular activities.
3. Establish a good rapport with your vendors and delivery people. This is often overlooked. If a delivery person is fond of you, they will go the extra mile to make your day easier.
4. Be absolutely aware of what the heart of your business is. I have seen businesses go under because they remove their central attraction, due to being unaware that was the main reason customers patronized their store in the first place! Know what you can and can not be without.
5. Don't open a retail business without first having worked in it, and became proficient at all areas of it. This should be self explanatory, but there are in fact many people that have bought businesses simply because they thought it was something different - usually thinking it was easier and would make them money instantly - than what it actually entails. If you're going to open a clothes store, make sure it is not torture for you to hang clothes, or unpack stock, or run a register. Because you will often have to do that when you are short on staff. It is important to know how to actually run the day to day operations before you invest money in a venture.