Opening a retail store involves many moving parts. Without effective retail project management, these elements can be neglected, leading to complications both during the startup phase and beyond. By steering clear of these six common retail startup mistakes, you can better safeguard against failures in the first year.
1. Lack of a Clear Vision and Purpose
New operators who haven’t defined their vision or purpose will struggle to foster an environment that promotes teamwork and a commitment to excellence during the initial phase of a retail store’s launch. Establishing a business plan and cultivating a positive atmosphere from the start are pivotal in building a robust company culture.
2. Believing You’ll Start Making Money on Opening Day
It’s unrealistic to expect instant profitability. Even well-established retail chains, adept at retail project management and launching new locations, typically budget for operating deficits lasting 2 to 3 months post-opening. Building sales volume often requires time. To address this challenge, we advise engaging with an experienced real estate professional to secure a period of rent abatement during lease negotiations.
3. Lack of Documented Systems and Procedures
Operating a business requires the consistent execution of countless tasks by many individuals and teams. Effective retail project management can ensure organization and uniformity, which are vital for the success of a retail store. Franchise retailers kickstart their operations with comprehensive checklists and procedures, covering everything from stocking merchandise to cleaning restrooms and managing the cash register. Operating without established systems and protocols can prolong the chaotic and challenging initial phase of a startup. Implementing standardized procedures is crucial for long-term success.
4. Accepting a Secondary Location to Save On Rent
The location of a retail store is paramount in its visibility and ability to attract customers. A prime location can naturally draw in potential customers, amplifying your marketing efforts. Avoid settling for secondary, less-trafficked sites just to save on rent, as this often results in higher advertising costs to gain visibility. Partnering with an informed tenant advisory real estate firm can steer you away from this issue.
5. Underestimating Capital Needs
Many promising new businesses falter due to inadequate funds. Especially for first-time owners, there’s a risk of overlooking or underestimating startup costs linked to opening a retail store. With effective retail project management, one can anticipate expenses like construction overruns, change orders, and permits. Even if you’ve been through this before, it’s crucial to work closely with an experienced project management team early on to identify all potential costs and timelines.
6. Not Functioning as An Owner
During the startup phase, owners often delve deep into the trenches, from stocking shelves to coordinating designs. Yet, their primary focus should be on overarching business management — from monitoring cash flow and planning marketing campaigns to strategic decisions for long-term success. Good retail project management and the right partners can help delegate daily tasks, allowing the owner to concentrate on their primary role: effectively running their business.
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