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5 steps to opening a mom and pop shop

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A small independent business often referred to as a mom and pop shop is gaining popularity in the emerging market segment of South African retail sector.  This is the perfect set up for entrepreneurs that have small business volumes and are looking to penetrate the market by testing the potential and feasibility of a product or service. 

No matter how big or small, all business models require substantial planning.  It has been found that 8 out of 10 businesses fail due to lack of planning as well as adequate funding.  Mark Souris, Managing Director of Periscopic Masingita, one of the country’s most prominent commercial property development and management companies shares some insight into what needs to be considered before opening this type of store. 

Research

In order to take your entrepreneurial dream to the next level, it is essential to research and prove using reliable information that the product and service that you are offering is wanted or needed by the target market.  “Gaining perspective and being well informed is fundamental to market research and arming your business with as much information on your target market is key to its success,” Souris explains.

Finding the right location

Once you have established if the product and service that you are offering is viable and in demand by your target market, finding a suitable location is the next most important step of your startup.  “When choosing the right spot for your small business you need to consider the demographics and lifestyle patterns of the people in the surrounding areas.  You also need to ensure that 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.

Work out your costs

It goes without saying that 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 Souris advocates that you will be able to determine your major expenses.  “The business plan helps you to identify the cost items such as rent, salaries, marketing, shop set up etc.”  Souris cautions “it is often overlooked but make sure that you understand the occupational costs of renting the shop in its entirety.”  Electricity costs are in many instances more costly that salaries and rent. Therefore electricity usage and planning is key in managing these operational costs.

Marketing plan

“So many businesses invest so much 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 with digital technology, look at creative ways such as social networking to do this cost effectively,” explains Souris. 

Professional advice

Being able to talk to a professional that is knowledgeable in the retail industry is an advantage.  Souris advises “engaging in the services of a professional and knowledgeable 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 centre 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 the foot traffic in the centre.  The managing agents have access to information pertaining to the shopping centre and will be able to advise you with regards to trading hours as well as the rules and regulations of the shopping centre,” Souris concludes.  

Categories: Customer Releases | Tags: Periscopic Masingita , retail sector , entrepreneurs , mom and pop shop | Comments: (0) | View Count: (1773) | Return

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