How To Know When It's Time To Expand Your Business

There comes a point in time for every business owner when they must consider expanding. The fact is that businesses can only grow so much if they remain isolated in a single local area. In order to truly know the potential of your business, you must expand. But how do you know when it's the right time? If you are business owner who's thinking about expanding, you should first read some of the tips listed below.

Local Success

You should only consider expanding your business if you are already have success locally. You simply can't expect to have success elsewhere if you aren't performing well in your current location. During the first few years of your business, work solely on local performance, trying to capture as much of the marketplace as possible. This can be done through a variety of techniques, one of which is marketing. Spread the word about your business through any and all available outlets. The more people who know your business, the more successful it will become. This is essentially the principle behind branding as well -- so get your business's name out there and in front of potential customers.

Capital

Regardless of the specific industry or line of work, expanding a business takes a great deal of capital. Many owners underestimate just how much money it takes to expand a business, forcing them to close up shop in just a couple months after opening. Don't make the hastily decision to expand without fully setting aside enough capital. Some of the costs involved with expansion include leasing a new store, hiring new employees, training, purchasing product, business licenses for the respective district, etc. Go through all of these items to ensure you're business is fully capable of paying for it; otherwise, you should continue saving until a later time.

Unknown Demographic

One of the biggest hurdles when expanding a business is the fact that you don't know the demographic. Sure, you can read reports all day long, but it doesn't compare to firsthand knowledge and experience that comes from running a store in the area. While your current store location might pull profit easily, a new location could prove to be an entirely different story. The only way you'll know for sure is to test it out.

Expanding your business into a new location isn't a surefire way to increase your company's profit. On the contrary, it can oftentimes have disastrous consequences, sending some businesses underwater. But not taking the risk essentially limits your business's success.

Retail Therapy Really Does Improve Shoppers' Mood

Sometimes all it takes is a little bit of cash and a day at the mall to brighten your mood. If you feeling down or stressed out, you might be able to turn your outlook around using retail therapy. Although this term has been around for some time, it was widely disregarded in terms of accuracy. However, recent studies suggests that retail therapy does in fact improve shoppers' mood.

Let's face it, splurging and buying yourself something nice once in a while instantly lifts your spirits. Whether it's a new television, CD, DVD or just a shirt, buying stuff is sure to make you happier. According to a recent survey done by Ebates.com, 51.8% of all Americans have purchased items for the sole purpose of feeling better. With numbers such as this, there must be some kind of truth behind retail therapy.

So, what's the number one item purchased during retail therapy? According to the survey, it was clothes for women and food for men. When women are down and depressed, they will hit the mall or local apparel stores in hopes of brightening their day through retail therapy. On the other hand, men are more likely to purchase food to try and cure their blues.

The survey also reveals the leading triggers of a "retail therapy shopping spree." The number one trigger is a bad day at work. I think we've all experienced at least one bad day at work before, probably a lot more if you are like most people. Perhaps the boss is getting on your case about a deadline or maybe a coworker is trying to cause trouble. Either way, having a bad day at work will linger long after you leave the office. A simple cure for this problem is to go out and purchase yourself something at a local retail store in your area.

Store owners can take advantage of retail therapy in a number of different ways. For starters, market to your customers both outside and inside your store. Far too many store owners overlook the importance of in-store marketing, and as a result, they lose sales and profits. By throwing up some "on sale" and "clearance" signs in your store, you'll help trigger the purchasing impulse in your customers. Keep plenty of signs up in your store that highlight and draw attention to products that are currently selling well. This alone will naturally encourage more sales, especially from customers who are on a retail therapy shopping spree.

The Psychology Of a Shopper

Understanding the the psychology of shoppers will give you a huge advantage as a retailer. Knowing what triggers the "buy" response in a customer will naturally result in more sales and more profits. Practically ALL big-name national grocery stores and retailers use this technique, so why aren't you? Contrary to what some people may believe, it's actually a simple concept.

"Luxury" Items First

Ever notice how most grocery stores place snacks and junk food close to the entrance? This is because people are more likely to purchase them when they first walk into the store. Cakes, snacks, cookies and other non-essential food is considered a luxury purchase simply because people don't need it. Allowing the customer time to shop around before exposing them to luxury items will reduce the likelihood of them purchasing it. Of course, snacks and junk food is just one example of a luxury item. If you are in the retail clothing industry, then perhaps you can place some of your accessories up front.

You have to think outside of the box when it comes to luxury items. Identify your store's primary customer base and then choose luxury items that would blend well into your line of products. Perform some initial tests with these items to see which ones sell and which ones don't. At the very least you'll get some helpful data to improve your store's layout from tests such as these.

Impulse Buys

Impulse buys are similar to luxury items in the sense that they probably aren't what the reason why the customer came to your store. Nonetheless, you can still encourage customers to purchase "impulse buy" products by choosing the right type of product and the right location. The best location is typically around the cash register where customers will wait in line with nothing to do. While they are waiting, they may see an impulse buy product that catches their eye, and hopefully they will add it to their shopping cart.

So, which type of impulse buy products should you use in your store? It really depends on your store's industry. With that said, I've seen video games, movies, snacks, sodas and even art supplies in line waiting to check out at a major apparel store. These are all items that people probably wouldn't normally purchase at a clothing store, but since they are waiting in line with nothing else to do, they might feel encouraged to make an impulse buy.

4 Reasons Why Retail Businesses Fail

Running a successful and profitable retail store is no easy task. Over half of all newly opened retail businesses will close up shop within just 2 years after their initial launch. Even if you "think" you have all of your bases covered, there are dozens of other factors that could send your retail business underwater. As a store owner, it's your responsibility to identify these potential problems so you can fix them in a timely manner.

Reason #1 - Theft

It's not something most store owners want to think about, but theft is a growing problem in the retail industry. Regardless of what types of products your store sells, you need to take the necessary precautions to reduce theft. Each year, billions of dollars worth of products are stolen from retail stores in the US. Unless you want to contribute to this statistic, take action to reduce theft in your store. Installing additional security cameras, locking cables, and placing your high-end products behind glass cases can all reduce theft.

Reason #2 - Not Enough Capital

Like most businesses, retail stores require capital to maintain a constant flow of products. Without capital, you simply won't be able to purchase new products for your store. This doesn't necessarily mean that you need cash on hand, but you do need credit. Before jumping into the retail business, make sure you have a proper business plan with open lines of credit; otherwise, you could find yourself between a rock and a hard place.

Reason #3 - Poor Staff Training

Having a well-trained staff of employees is critical to your retail store's success. Employees who simply show up to work for a paycheck without any real drive will have a negative effect on your business as a whole. Only hire driven, focused individuals who are enthusiastic about the job. After hiring them, take them through every aspect of their job in a full training course. You can also encourage employees to work harder and more efficiently by rewarding them with additional "perks," such as gift certificates, free lunches, etc.

Reason #4 - Hard-To-Find Location

I can't stress enough the importance of a good location for retail stores. If customers are forced to drive around in circles trying to find your store, you'll naturally lose sales and profits. Sure, some of the non-premium locations might have a lower lease price, but you'll end up losing far more money in lost sales. Don't try to cut corners by choosing a poor location for your retail store. Instead, choose one that's near a main road where people can easily find it.

How To Obtain a Business License For a Retail Store

To legally open and run a retail store in the US, you must first acquire certain business licenses and permits. Simply overlooking this important matter could place your store in jeopardy of being fined and/or shut down. Unless you want to risk the future of your business, it's recommended that you acquire all of the necessary licenses before opening your retail store. But just where are you supposed to acquire them? Keep reading to learn more about obtaining business licenses for retail stores.

The first step in obtaining a business license is to gather all of your accounting and tax information. If your business is operating under a corporation or LLC, then it will likely have an EID. Go through your paperwork to locate this information. In the event you are unable to find it, call up your accountant for a helping hand.

Federal Licenses

Certain retail establishments will require federal licenses in addition to the basic state-level license. Federal licenses are more expensive to acquire, but they still necessary in certain situations. If your store sells tobacco, alcohol or firearms, you'll need to submit an application for a federal license. Because of the high volume of applications, the turnaround time on these is a bit longer. You can find more information about federal license by visiting sba.gov.

State Licenses

Thankfully, applying for a state license is easier, quicker and costs less money. The exact process varies depending on your regional location, so it's best to contact the city hall for more information. They'll be able to point you in the right direction towards acquiring a state license for your retail business. Acquiring one may only require that you visit the city planning office and submit all of your paperwork. Once the office has gone through the paperwork, they'll either mail your new business license or you can pick it up in person.

It's important to note that business license expire after a certain period of time. Most state business licenses are good for exactly one year, at which point you'll have to renew it for an additional year. Federal license, on the other hand, are oftentimes good for several years. Check to see how long your license lasts to ensure it doesn't expire, leaving your business vulnerable to fines or worse. You should be able to determine this information simply by reading the license. It will have an acquisition date as well as the expiration date, so refer back to this when in doubt.

Selecting a Niche For Your Retail Clothing Store

Retail fashion is a cutthroat industry that's becoming increasingly difficult to enter. With the national brand name store companies spending millions of dollars in advertising, smaller fashion stores struggle to stay afloat. The bottom line is that you have to set yourself apart from other stores by focusing on a specific niche. Doing so will give customers a reason to visit your store rather than some of the larger national stores. But just what niche should you build your clothing store around? If you are having trouble choosing one, keep reading to learn the steps to selecting a retail clothing store niche.

Why Niches Are Important For Retail Fashion

Niches are important in the retail fashion industry for a number of different reasons, one of which is the fact that it creates a specialized theme for your store. For instance, customers will feel more inclined to visit "Kim's Dresses" if they are searching for a dress rather than visiting some generic national clothing store. As a result, you'll likely gain a strong following because of your store's specialized focused. The principle of building a store around a niche works in a variety of businesses, fashion included.

Choosing a Niche That Interests You

One of the biggest mistakes entrepreneurial store owners make is choosing a niche simply because it's profitable or "in demand." While this may seem like a good idea on the surface, it ultimately ends up failing because the owner isn't knowledgeable on the subject. Instead of choosing a niche based around its "profitability," you should choose one that interests you. Doing so will allow you to apply your knowledge and experience on the niche to your business.

There are countless different options available when it comes to choosing a niche for a retail clothing store. As previously stated, you should choose one that's naturally interesting to you. Not only will this give you a knowledgeable edge, but it will also make your job more enjoyable. Check out our niche list below for some ideas. Remember, these are just a few of the MANY fashion niches available.

Here are just a couple idea for niche clothing stores:

• Swimwear
• Maternity clothes
• Big and tall men's clothing
• Baby and infant clothing
• Teen clothing
• Dresses
• Tuxedos
• Hip and trendy apparel
• Plus-sized apparel
• Custom-tailored clothes

Why Retail Clothing Boutique Stores Should Follow Trends

One of the biggest mistakes made by retail clothing store boutique owners is not keeping up with the current trends. It's no secret that apparel styles go through phases. Certain styles that are hot and popular right now might be gone next season. This is a fundamental principle of the fashion world, and it's doubtful it will change anytime soon. The bottom line is that you must account for fashion trends if you want to run a successful, profitable retail clothing store.

As a retail boutique store owner, you must not only identify current fashion trends in the market but predict them as well. Far too many store owners look at the current trends to build their store around. While this may offer you some initial success in sales and profits, it will eventually catch up to you. In order to maintain a long-lasting, successful business, future trend predictions are necessary. Of course, this is a big risk for store owners to take, especially if you are new to the fashion industry. Failing to predict the right future trends could spell disaster for your business as a whole.

So, how do you know which styles are going to be popular next season? Unfortunately, there's no crystal ball you can look into to predict the future of fashion. If that were the case, I think most retail clothing boutiques would be incredibly successful. The good news, however, is that you can still gather clues and hints for fashion trends from various sources like fashion magazines, fashion shows and even social media networking sites. Stay in tune with the fashion world so you can carefully observe the upcoming and outgoing trends.

Once you've predicted future fashion trends, you should now update your store's inventory. Try to move styles that seem to losing steam in terms of popularity. You can place them on sale, run promotions or move them over to a clearance rack to get rid of them faster. Once these items are gone, start moving in some of the new products based around your future fashion trend predictions. By keeping your store on the front lines of fashion, you'll naturally set yourself apart from competing stores.

There's no way to know exactly what direction the future of fashion will take. However, there are tons of tools out there to hep you better predict this information. Using social media networking sites, fashion shows, fashion magazines and even looking at other stores' inventory will give you a better idea as to which fashion styles are trending.