Your Point of No Return
At what point do you say, Yes, I'm going to open the store, or No, I'm not? Fortunately, you haven't reached it yet. Your planning is still on paper and you haven't spent any money. However, you need to be aware of your point of no return because you soon will be making decisions that require financial investment. Before that point, consider the following typical stages of commitment to a retail store.
The first question you want to answer is, Will my store be profitable? You can answer the question on paper once you know how much you can invest in your business, what it will cost to start, what sales levels to realistically expect, and what your operating costs will be. Toward answering that question you can fill your retail notebook with facts, figures, calculations, and ideas without incurring much expense. Chapter 6 will guide you through developing a formal business plan.
The Decision Point
Once you've researched and compiled your investment costs and your expected profit return on that investment you can make one of these three choices:
Most people who decide they want to open a retail store of their own opt to “Go!” However, prudence says the best plan is to “Go Incrementally!” even if it looks like a sure-fire plan. No plan is perfect, and you may discover a major hurdle after a few weeks of building. The smartest way to build your retail store is incrementally, implementing the least expensive requirements first. That is, don't yet sign a lease or buy fixtures for your store. Instead, develop your business plan (Chapter 6). Do all the market research you can to understand who your customers are and what they will buy.