6 Policies Your Retail Business Needs to Succeed
In Start Your Own Retail Business and More, the staff of Entrepreneur Media, Inc. and writer Ciree Linsenman explain how you can get started in the retail industry, whether you want to start your own specialty food shop, gift shop, clothing store or kiosk. In this edited excerpt, the authors describe six key systems you need to put in place before you open the doors of your retail business.
What goes on behind the scenes of your retail business is vitally important because the support systems you put in place are what keep your business alive and well. The following six systems can help give you an edge.
1. Store policies.
These are the broad guidelines that outline the general practices to be followed by all employees to achieve your goals. Take time to think these various details through, then schedule times for each task to be done and who is to do it. Policies are more than daily procedures and work rules; they're a road map for success.
Rather than running your business in an informal, by-the-seat-of-your-pants manner, before you open your business, write down rules that outline every one of your expectations. Once you're open for business, things will happen very quickly, so you want to be able to create the work ethic and atmosphere you want in your business before you open. By focusing on the details now—under fairly unpressured circumstances—you'll be able to meet decision-making demands when under stress, and your employees will do what you want them to do.
Retail businesses have two kinds of hours: business hours and store hours. The business hours include the many tasks that need to be done besides selling—receiving, preparing and tagging merchandise, cleaning and facing shelves, freshening displays, counting the cash in the cash drawer, ordering new merchandise, checking on special orders, notifying customers of the status of their purchases, returning damaged goods, recording markdowns, answering the phone, and a multitude of other invisible, but necessary, tasks—that you usually can’t accomplish during store hours.
Determine your hours of operation. If your business is in a shopping center you will most likely be required to remain open certain hours as part of your lease, especially if you rent in an indoor mall.
Learn to set limits for yourself. Write up a plan that includes what your realistic hours per week should be, including networking functions and online social marketing, extra time spent on the weekends spent taking up the slack from the week, casual phone conversations that turn into business, and stick with the plan. It’s easy to always be working and even if you love what you do, it’s not healthy to never have an off switch.
3. Credit policies.
Many small retailers sign up for MasterCard, American Express, or Visa and willingly pay the small percentage to let a bank operate their credit departments for them. You'll need to decide which credit cards, if any, you'll accept. Base this decision on what sort of merchandise you sell. Is it a high-ticket item your customers will be unable to pay cash for?
Also determine under what circumstances you’ll accept personal checks. Most retail businesses that accept checks ask for a form of picture identification from the customer writing the check. Other businesses ask for more detailed information, such as a home or work telephone number. Your bank may be able to recommend policies, or even offer electronic check verification services, that will help you cut down on the cost of accepting bad checks.
4. Customer service policies.
How do you want returns and exchanges handled? Will you offer gift-wrapping? What about alterations? Deliveries and special orders? Customer service can be as simple as saying hello to customers as soon as they step through your doors. Your employees are the front line of customer service. Set your policies in writing and make sure everyone understands how you expect your business to be represented.
5. Housekeeping policies.
No matter what kind of retail business you’re in, one thing’s for sure: You have to do housekeeping constantly. Retailers believe that a consistent standard for cleanliness and orderliness gives them several advantages over stores that don’t have a cleanliness standard. Customers are safer, their confidence in you is higher, and your sales are enhanced by a well-kept enterprise. Business owners all try to set an example for employees by sweeping, restocking, filing, and dusting as needed rather than waiting for a set time.
Depending on your lease, your landlord may take care of exterior landscaping and building maintenance. If you own the building, however, it’s all up to you. Add one more list of tasks to oversee. Air conditioning, elevators, lighting, and computer terminals all require technical maintenance. Floors, restrooms, and workrooms also require care and daily attention. Retailers who neglect repainting, cleaning windows, replacing worn fixtures, and basic janitorial service often pay for it in reduced customer traffic.
6. Security policies.
Each year, American retailers suffer billions of dollars in crime losses. To decrease the chances of robbery, retailers say to limit the amount of cash you have on hand. Bank deposits should be made at different times of the day so potential robbers can't be sure when cash will be leaving your business. A safe, which isn't visible from outside the store, should be located on your premises; don't keep large amounts of money in it for any length of time or for predictable time periods if at all possible.
Although many retailers don't have many problems with crime, it's certainly something you need to be on the lookout for in your daily operations. Also ask your local sheriff’s department or police agency to suggest what instructions you should include in your employee manual and training. When law enforcement agencies distribute fliers notifying you of scam artists working the area or shoplifters hitting other retailers, make sure all employees get the information right away. Keep an employee bulletin board in the back of the store where you can post important notices.