8 Winning Retail Ideas – And How to Get Started
Have you always harbored a romantic dream of owning your own bookstore or boutique? While the retail industry looks radically different in the age of online shopping, it is still possible for small shops to thrive. In fact, more than 42 million Americans make a living in the retail industry according to the National Retail Federation. The retail industry creates profits of more than $3 trillion each year, representing 38 percent of the nation’s gross national product according to data reported by The Balance. The key to developing a thriving retail business is separating profitable retail business ideas from the product niches that are past their prime.
Industries to Consider
The best retail business ideas have minimal start-up costs and equipment along with a thriving market for the proposed product or service. The following eight types of shops fit both of these criteria; the next step is deciding which of these inspirational ideas best fits your skill-set.
Pet Grooming and Boarding
If the popularity of the pet industry tells us anything, it is that Americans spend a lot of money on their furry friends. As of 2016, more than 80 million United States households have at least one pet and spend a total of $60 billion on pet care annually according to data reported by Fortune magazine. And according to Inc., pet industry revenue is due to increase by more than 7 percent annually in each of the next five years. Animal lovers can get a piece of the pie by establishing a pet grooming and boarding business. Convenience is a critical part of this industry, so you will likely have a dedicated market if you are the only boarder and groomer in town. This makes this a great retail business choice for those who live in relatively rural areas. You can expand to pet toys and supplies to create an additional income stream, especially if no major pet store chain exists in your area.
An art supply store that provides popular, high-quality products will enjoy a high-profit margin. This is an ideal retail business for a person who is passionate about art and knowledgeable about the market. This type of retail business also offers substantial opportunity for additional income streams. In addition to selling art supplies, you can teach classes at the store location, host fun paint and sip nights and private parties and even host a gallery with an integrated coffee bar. If you live in a large area, consider meeting a specific niche. For example, in an article about the coolest small businesses in America, Business Insider wrote about a Detroit gallery and art supply store that only hosts work that celebrates the city.
Mobile Auto Repair
Fundera named mobile businesses as one of the biggest growth areas for small entrepreneurs, and auto repair was at the top of their list for the most profitable choices. Whether you are a certified mechanic or an experienced hobbyist, you can offer basic maintenance tasks while saving customers the wasted time of sitting around an auto body repair shop or being stuck without a car. Examples of services you could perform include oil changes, new batteries, headlight repair, fluid refills and more, wherever your client happens to be. This is an especially profitable service if you live in an area with a lot of busy professionals. Not handy but good at cleaning? Consider mobile auto detailing; you can purchase a wholesale turnkey kit with everything you need and rely on social media marketing to develop a following.
Cloth Diaper Delivery Service
As more parents become aware of the environmental impact of disposable diapers, cloth diapers are increasing in popularity. If you live in an affluent area with many young families, consider starting a home-based business to sell cloth diapers. Many parents pay for pick-up and delivery services that pick up dirty diapers, launder them and deliver clean ones. Because of the range of cloth diaper styles to choose from, you can also serve as a consultant for parents who want to adopt a green lifestyle by using cloth diapers. If you expand into a retail location, you can offer boutique baby items, parenting seminars and classes, playgroups and related activities that can increase your income and create a following in your community.
This can be a lucrative business for parents who have personal experience with cloth diapers and want a part-time, home-based venture. In fact, Inc. named child-related enterprises as one of the most profitable industries for small businesses. Start-up costs are relatively low as long as you have a reliable vehicle. You may be eligible for tax incentives for starting an environmentally friendly location, depending on your state and municipality. In addition, most customers will stick with you for three to four years until their children are potty-trained, as well as use your service if siblings are born.
Specialty Food Store
If you live in an area where grocery selection is limited to big box stores, consider starting a niche business offering imported food, gourmet items and even gift baskets for special occasions. This business is best for foodies who have the knowledge, can source unique specialty items, and can discuss the finer points of food and wine with their customers. You could even offer light catering, such as party trays or wine and beer selections, and menu consultation for big events. Organic produce and health food is an underserved market in many small towns, and more people than ever are modifying their diets to prevent or treat chronic conditions.
If you live in one of the growing number of states where recreational marijuana is legal, this industry is expected to be one of the most profitable in the coming years. NerdWallet reports that profits for legal marijuana will increase by more than 33 percent over the next five years. Opportunities exist for both dispensary owners and growers, so if you have been looking for a way to put that horticulture degree to work, here is your chance. If you love to bake, consider experimenting with edibles that you can sell to a dispensary location nearby.
Thrift, Vintage and Consignment
Opening a consignment boutique keeps unwanted clothes out of the landfills. It also provides community members with a way to recycle their gently used items while getting bargains on new garments. This is especially beneficial in areas with many young families and few resources. Since babies and children grow so quickly, their clothes often have a lot of use left in them. You can even get started by selling donated items.
Baby clothes, not your bag? Put your shopping skills to work and start a fashion boutique within a specific niche, such as vintage designer clothing or gently used formal wear. Prom dress consignment can earn you a healthy bundle if you live near several high schools or in a college town with a large Greek presence (think of all the fraternity formals).
If you are handy, think about purchasing and refinishing antique furniture. Those who have an eye for pieces that are popular with collectors can stand to make a big profit, especially if they expand into online sales.
This type of business also offers ample opportunity to expand. For example, a children’s clothing consignment shop could have sections devoted to toys and books, while a designer consignment shop could start a community drive offering professional clothing for low-income women seeking employment. In fact, a dedication to community service was named as one of the biggest business trends of 2018 by Forbes.
If your town does not have a shop that sells fresh flowers, a great business opportunity awaits if you have flower arranging skills, an eye for detail and the ability to provide outstanding customer service. Compared to other types of retail businesses, a flower shop has relatively low starting costs, though you will need a cooler to keep fresh flowers looking their best.
Starting Your Retail Venture
Even if you do not have any experience starting your own business, that does not mean your dream of having a retail shop is out of reach. Once you have a business idea in mind, these are the steps you will need to take to make it happen.
Choose a Name and Develop a Brand
Your business name should be different from the names of similar businesses while establishing your brand. If you plan to register your retail store name as a trademark, it should be unique and not descriptive of the products and services you sell. Create a logo and a color palette for your website, store and marketing materials.
Meet Legal Requirements
Find out what type of registration you will need to open a business in your community. You will need to create a legal entity for your business so that you would not be personally liable for debts or lawsuits related to the store; this protects assets like your home and vehicle. The most popular structure for small businesses is an LLC or limited liability company, but a tax professional can advise on the best structure for your specific venture. Next, if you plan to hire employees for your retail location, you will need to file with the IRS to receive an employer identification number (EIN).
Write a Business Plan
The act of researching and writing a business plan will help you clarify the vision for your retail store as well as develop important documents that will guide you on your journey as a new entrepreneur. The business plan should include:
- A market analysis that explores the competition in your area and describes how you will set yourself apart, whether that is a brand-new service or a specific niche
- A comprehensive marketing plan that considers both traditional and online channels
- A description of the experience you will provide your customers
- A plan for future hiring with justifications for each new position
- Management plans and policies
- A profit and loss project that spans the next three years
Depending on the type of retail business you plan to start, you will likely incur some of the following costs:
- Retail location rental, unless your venture can be based in your home or is largely mobile. Find out the average cost for commercial space rental in your area, then plan to put down a security deposit and the first month of rent in advance. The utility company will likely require a deposit as well.
- Updates and fixtures needed for your location, such as new paint, installation of shelving and displays and decor to make the space look appealing.
- Inventory costs
- General office expenses, such as liability insurance for the space, cleaning supplies, office supplies and accounting software and systems
- Computer and phone service
- Domain and email services
- Website hosting and development
- Point of sale system (POS) software
- Exterior and interior signage
- Trademark registration, business registration and related legal services
- State and local small business licenses
- Logo design
Choosing a Location
New retail store owners must balance the ideal location with their budget. Will your business rely on foot traffic? If so, a location on a busy street with established shopping is your best bet. Other types of retail might work well in a more out-of-the-way location that costs less. Before signing a lease, drive by at different times of day and days of the week to ensure that the spot is safe and well-trafficked.
Retail could be the right business for you if you are not averse to a little risk, love to multitask and thrive when you are working as an independent problem-solver. If you need funding to cover the cost of a retail business venture, consider applying for a loan with an online small business lender. Funds can be used for everything on the list above, allowing you to grow your mom and pop shop.