Real Estate Investor Magazine South Africa June 2015 | Page 48

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How To Open A Small

Retail Business
Five Steps To Opening
A Mom And Pop Shop

BY MARK SOURIS

A

small independent business, often referred to
as a ‘mom and pop shop’, is gaining popularity
in the emerging market segment of the South
African retail sector. Here is some insight into what
needs to be considered before opening this type of
store:
1 Research
It is essential to research and prove, using reliable
information, that the product and service you are
offering is needed by the target market. Gaining
perspective and being well informed is fundamental
to market research. Arming your business with
information on your target market is key to its success.
2 Finding the right location
Once you have established if the product and service
you are offering is viable and in demand by your target
market, finding a suitable location is the next important
step. When choosing the right spot, you need to consider
the demographics and lifestyle patterns of the people in
the surrounding areas. You also need to ensure you are
selecting a shop that meets your space requirements.
Every m2 needs to be viable and appropriate in order
to maximize turnover and to ensure a higher trading
density. Understanding competitors in the location is
also important as this allows you to gain insight into
how you can offer a better shopping experience for
your customers. Visibility and foot traffic are important
considerations.
3 Work out your costs
Calculating your startup cost and monthly expenses is
imperative in ensuring long-term return on investment.
By reviewing your business plan, on a high, medium
and low road basis you will be able to determine your
major expenses. The business plan helps you to identify
costly items such as rent, salaries, marketing, shop
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JUNE 2015 SA Real Estate Investor

establishment etc. It is often overlooked, but make sure
you understand the occupational costs of renting the
shop in its entirety. Electricity costs are more costly
that salaries and rent. Therefore, electricity usage and
planning is key in managing these operational costs.
4 Marketing plan
So many businesses invest capital into the startup of
their business but do not consider how they will get
their customers through their doors. Developing a
good marketing plan ahead of time will assist you in
identifying ways to attract your customers. Marketing
your business can be a costly exercise but look at
creative ways such as social networking to do this more
effectively.

“Every m2 needs to be viable
and appropriate in order to
maximize turnover.”
5 Professional advice
Being able to talk to a professional that is knowledgeable
in the retail industry is an advantage. Engage in the
services of a professional retail leasing agent when it
comes to renting a shop as they will be able to assist you
in understanding the dynamics of the shopping center
and to ensure that your store remains relevant in terms
of store design. They will also be able to share insight
into the market segment and will be able to inform you
of the patterns of th H