In a world dominated by big-box retailers, it's easy to feel
like David battling Goliath if you want to start an independent
retail business. "Why bother?" you think. "I'll
only get crushed." But your small size could save your
business these days. "[Many big boxes] aren't as
invincible as they once seemed. They've gotten so big and
bloated," says Bob Phibbs, a Long Beach, California,
small-business retail consultant and author of You Can Compete! The Retail Doctor's Tools
to Doubling Your Sales. Another plus: Consumer spending and
retail have remained strong through the economic ups and downs.
Retail sales in 2001 totaled about $3.5 trillion, according to the
U.S. Census Bureau, which compiles retail statistics.
Shopping today is about time and convenience, says Tom Buxton,
president and CEO of The Buxton Company, a retail market research
firm in Fort Worth, Texas, that represents more than 500 clients,
including FedEx, Kinko's and Pier 1 Imports. "Successful
retailers are focusing on lifestyles," he says.
Look around, and you'll see retail being integrated
everywhere, from hospitals and revitalized downtown districts to
new malls and trendy urban mixed-use centers that provide a sense
of community by combining retail shops with residential and office
space in compact acreage. There are already more than 400 mixed-use
developments around the country, and the number of these projects
on more than 15 acres that were under construction or completed
increased 37 percent last year, according to New Urban
News, a publication that covers planning and development
trends.
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The costs of establishing a permanent retail location, however,
can be steep. You may spend up to $100,000 or more, with leases
spanning from three to 10 years. Carts, kiosks and temporary space
can be an easier way to get a foot in the door with a lot less
risk. The upfront investment for a kiosk or a cart can range from
$2,000 to $10,000, according to Patricia Norins, publisher of
Specialty Retail Report, a quarterly trade
publication for specialty retailers. Today, carts and kiosks are a
$10 billion industry.
Flexibility is another advantage. License agreements for carts
and kiosks are shorter and are usually renewed every month up to
one year depending on the location. This arrangement makes it easy
for entrepreneurs to "come in, try it out for a month, and if
their product isn't working, they can shift to a new product
line or close up shop and move to a new location," Norins
says.
Here are a few entrepreneurs who used a single kiosk location as
their launching pad into permanent space--and growing retail
success.
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