Routes to Finding Funds for a New Retail Store [Guest Article]

Getting a business off the ground isn’t easy. Whether you want to own a boutique or are looking to run a brand new designer retail store, finding the right funding is a necessity. Starting a new business is expensive and in order to get your retail store up and running, you’ll need enough in the bank to start and stay in business.  While this is a process that requires many considerations, here are 3 of the routes you can take to find capital for your new retail store.


Credit Cards
While it is important for small business to accept credit cards, having a credit card for your business is one way to fund necessary expenses. Using a credit card can be risky if you don’t anticipate being able to pay off your balances in the near future, e.g. 90 days. A business credit card is how some small businesses have been able to fund operations and choosing the right card is important. Make sure you look for a business credit card with permanent rates that are low and an introductory rate that is even less. To keep the credit card debt you will acquire until you are able to pay it all off, be frugal and buy only what you need.


Bank Loans
There are a few different places new businesses can look for a business loan. Acquiring a loan can be a bit of a challenge, however, if your credit score is low. You’ll also need a well-put-together business plan to present to financial lenders that incorporates financial predictions to demonstrate you’ll be able to make your loan repayments. The SBA(Small Business Administration) backs loans – from the 7(a) Loan to Microloan programs – that are open to any small business, but there are a number of qualifications. In recent times, small banks are more likely to take chances on small businesses such as a new retail store.

Personal Investment
Some startups and new businesses are able to fund a new business on their own, from life savings or other means. If you can’t, turning to friends and family is an option. When you turn to your loved ones for financial backing, you’re risking your future success and their financial future. Make sure you have a business plan in place with financial projections and are able to have a contract in place. Letting those who support your new retail store ventures should be made aware of when they will receive their money again, though it could be lost, and have a clear understanding of what their financial contribution’s status is as a loan or if you’ll offer equity.
Taking these steps can help you avoid miscommunications down the road.

One of the most important things when finding funds for your retail store is making sure you estimate correctly so you don’t end up with less capital than you need or too much that results in greater debt. While it is often difficult for new business owners to get a business loan, plan out your business’s estimated startup costs, financial projections and crunch some number. Make sure you are ready to present your business plan to lenders and investors, no matter whether they are a family member or major banking institution.

 

Author Bio: Erica Bell is a small business writer who focuses on topics such as comparing small business loans and small business credit card offers. She is a web content writer for Business.com. Find them on Facebook!

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A Point of Sale's Value is in the Using [GUEST BLOG]

By Evan Wise
Managing Director- Management One®

Point-of-Sale (POS) systems are a valuable tool and a necessity for running a retail store today.  YOU CAN'T WIN THE GAME IF YOU CAN'T KEEP SCORE! ALTHOUGH RETAILERS SHOP FOR A SYSTEM WITH THE MOST BELLS AND WHISTLES AND NEAT FEATURES,  many have not progressed  beyond printing price tags and ringing up customer purchases.

Customer tracking
While all POS systems have the ability to track basic customer information like Name, Address, Phone Number and Email address, most systems have the ability to track customer types (Surf, Skate, Snow, Bike), birthday, anniversary, etc.

Use your POS system to  track your customers buying habits.  Your customer's purchases will give you a wealth of information from which to do selective marketing.  Here are some examples:

·         Reward your best customers by sending a thank you gift card or certificate. Invite customers that haven't made a purchase in the past 12 months back to your store
·        Send a  Birthday card with a special offer or incentive.
·        Specific merchandising  to customers that bought a specific item, vendor, style, color or size  There are many creative variations of ways to use POS information  to enhance sales,  loyalty and rewards programs.

Merchandising Analysis
Your POS system  gathers data that feeds a merchandise planning system which is the foundation for your assortment planning.  Use your POS system  to identify groups of like merchandise (Departments, Classes or Subclasses) and drill down from there.  Develop or find the reports that will provide that information:
·         Sales and Inventory Report to evaluate your sales, markdowns and inventory levels.
·         Best Sellers/Worst Sellers Reports to find items that need to be replenished (Best Sellers) or to identify items to promote or markdown (Worst Sellers).  It is best to make these decisions based on gross margin dollars or sell through percent.   Unit sales can be distorted as a best seller is not something that was sold through markdowns.
·         Vendor Analysis Report to find  the vendors that performed the best within a group of vendors within a department, class or subclass.
·         Vendor Performance Report (shipment) report to help identify vendors that ship the highest percentage of what you order.  Size Analysis Report could be a helpful report to compare the sizes you sell to the sizes that are remaining in your inventory.
·         Many other reports will help make the right decisions for your business!

Success means knowing the right amount to buy in each classification.  That is called open-to-buy (OTB) planning and depends on accurate sales forecasting in each category. Many POS systems offer an option to develop OTB plans. A caveat is that these systems are very simplistic in their ability to forecast sales accurately and therefore the OTB plans can be way off.  An OTB planning professional can develop more accurate forecasts and OTB plans to assure you not only get the right goods, but that you get the right amounts (correct stock to sales ratio for each classification each month)  and flow them into the store at the right times. That assures fewer stockouts, lower markdowns and the availability of cash to pay the bills when they come due.

Store Management
Most POS systems offer analytical reports to help you fine-tune the operational functions of your store including tender types, salesperson productivity and sales by day and/or hour.
·         compare actual store deposits to recorded tender transactions to help you identify losses, theft or bank errors.
·         Salesperson Report would help identify your best salesperson by amount sold, number of items sold and even number of transactions.  Use this to track sales performance against the goal set for each salesperson each month.  When you measure results you improve results.
·         Time Period Reports could help identify the best days and times during the day for store activity.  A great report for planning days off and break times as well as scheduling sales staff.

Your POS system is a great data collection vehicle, and if used properly can be used to lead you to develop information that can impact the actions you take when running  your business.  But remember, it is only a machine that relies on human interaction.  Maintaining accurate information is paramount and that only happens when the input is accurate.

Your POS system is the start of success.  If you drop the ball before the goal line you won’t score.

 

 

 

For more information on point of sale systems and to receive a free consultation CLICK HERE

Management One® specializes in independent business success by showing any company how to get a better return on their investments in inventory and people. For more information, CLICK HERE

 

One Step Retail Solutions is ranked as one of the top resellers and service providers for some of the most comprehensive and state of the art retail POS software solutions in the industry. For a free retail technology consultation, click HERE.

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