Optimal step order for setting up a retail shop
July 7, 2011 3:04 PM   Subscribe

I'm putting together a business plan to open a brick-and-mortar retail shop and know, in general, everything that needs to be done, but I can't find information anywhere that suggests the optimal *order* things should be done in.

So below are the high-level steps I need to take in the order I think they should be done in, but I'd love to hear from those that have been through this before to see if my thinking is correct:

1. Build a full business plan (with sales projections, etc.)
2. Get a commercial real estate agent
3. Get an accountant
4. Get a lawyer
5. Find a location
6. Approach banks for loans
7. (Once loan is approved, etc.: secure location)
8. Talk to a commercial real estate developer about interior build-out
9. Quit my desk job (and do things associated with it, like get health insurance)
10. Form the business (legal paperwork)
11. Start ordering product
12. Open, make money, live large

One of the big things slowing down my business plan is that it seems like I need to have a business plan done before I can get a loan. But before I can get a loan, I should probably have a location scouted. But if I want to get a perfect spot, shouldn't I already have money secured to pay for it? And how can I have an accurate business plan if I don't know where it is I'm setting up shop? It all seems so circular and I just can't figure out what the optimal way to go about this all is.

(Additionally, if anyone would be willing to answer follow-up questions, please e-mail me at anonaskmefiquestion@gmail.com)
posted by anonymous to Work & Money (6 answers total) 5 users marked this as a favorite
Is the exact location vital to your business plan? You can draw up a pretty good plan with just detail about the neighborhood(s) you are targeting, and estimated price/sf. Then you can attach a list of possible exact locations.

That said I am not sure if banks are loaning money out these days for new small businesses, so I would scout this out before anything.
posted by blargerz at 3:40 PM on July 7, 2011

Oh, and about "living large" -- do you know how hard retail is?
posted by blargerz at 3:42 PM on July 7, 2011

The SBA is crammed with information. Normally, I avoid government agencies, but these people have good, free things to peruse.
posted by Ideefixe at 4:56 PM on July 7, 2011 [1 favorite]

Even if you don't have a business plan - yet - get an appointment with a business manager at a bank of your choice. Talk them though what you've said here, and although they might start by trying to sell, you thier business product, they should be more than willing to give you generic business advice. They might also have a 'starting a business pack' that gives general advice.

Also don't be afraid to skim what seems like real beginners / newbie info, as they often contain nuggets of info you might overlook or think is obvious (but really isn't if you've never run a business before).

My final suggestion is check amazon for any business planing books that have had generally rave reviews, then see if they have those titles at your local library. There is a sea of business advice books, but even the bes ones will probably only be read once, so buying them is probably a waste of money. With library books you have the benefit of all the wisdom at none of the cost.

Good luck!
posted by Faintdreams at 5:16 PM on July 7, 2011 [1 favorite]

Sorry to be negative, but my family has done this 5 times, and I would not consider doing it right now.

Skip number 2. Number 4 can handle that. Number 3 will do number 10. Get a good number 3. Number 6 is probably going to be a waste of time.

Number 5 is everything. You sit outside those proposed locations and count people. You enlist your friends and cover those places to determine your hours. Unless your store is going to be a destination, you want the most foot traffic, symbiotic businesses nearby, and a bit of parking.

Avoid number 8. Find a space that already suits your needs. Rent from a real person, not a corporate entity. You'll get a lease that you can actually read. Track down the previous tenant and have coffee with them. Ask about the heat, the ac, flooding, the roof, etc.

Number 11: The sales reps are going to load you up with stuff you don't need. Don't let them. You'll learn what you need once the store is open.

Number 13: Join the relevant trade association and go to the show. 200 bucks to join and you can probably get one of the wholesalers to pay your expenses. Don't feel obligated. Talk to the other retailers. Mine them. Maybe the trade association has a mentorship program. Don't get drunk.

Number 14: You ain't getting paid for a long time, which is why you don't want number 6. A successful number six will result in a diet of rice and beans.

Number 15: spousal unit is going to have a cow on you because you are never home. Delegate something so they feel involved, or you be on the hot road to hell. Get this thing going and switch roles. The SO will get committed pretty quick.

Number 16: Lay the place out so you need a minimum of helpers. Are you good at hiring people? You know someone who is?

Good luck with this.
posted by Mr. Yuck at 5:47 PM on July 7, 2011 [9 favorites]

If you're in the U.S. try to get a free small business advisor at SCORE. If you're not in the U.S., look for a mentor in a similar local Chamber of Commerce or other small business promotional organization. These experienced volunteers can offer you tons of useful advice, at the right price, and shoot down any starry eyed dreams you have about bank loans and getting rich in retail, gently.
posted by paulsc at 8:52 PM on July 7, 2011 [1 favorite]

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