These Are The Mistakes That Doom Retail Startups

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One moment a retail store is up and running, doing business. The next, it’s boarded up, and there’s a sign outside that says, “for lease.” How does this happen? What are startup retailers doing that is dooming their businesses to failure?

Owners and managers often point to a couple of reasons for why their businesses fail. They either point to the economy and claim that there simply isn’t enough demand. Or they blame their competition, saying that it is too strong. But these stories are often just a cover. Most of the time, retail startups fail thanks to a series of avoidable mistakes.

Here, we’re going to take a look at those mistakes and offer potential solutions.

Not Managing People Correctly

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As a retail startup, it’s your job to help build a quality team. Too many entrepreneurs go into retail expecting their staff to immediately be the best salespeople they can be. The problem is that it takes time to build selling skill, and simply demanding it won’t work.

The risks of not investing in your team are arguably higher. Teams who don’t feel valued will leave after a couple of months or steal money from you. In time, their attitude towards customers will get worse, and before you know it, you’ll be putting up your store space for sale. On the other hand, if you do invest in your staff, they’ll invest in your customers.

Trying To Go It Alone

Entrepreneurs are always looking for ways to save on costs. One of the most obvious ways to save money is to save on wage bills. Saving on costs by doing the work of two or three people seems like a good idea. But there’s a problem. You might be able to do the job of two or three people, but you can’t be two or three people. You can’t be the embodiment of all their ideas or manage staff as effectively as they could.

Entrepreneurs that do this quickly run into problems. They find that they can’t effectively manage all their people. They start to get burned out. And they lose their vision for their business. Retail startups need a team of dedicated managers to make sure that all jobs get done.

Bad Sales Experience

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When customers get to the tills, they expect to be served promptly, and by somebody who is friendly. They don’t want to have to spend hours waiting in line or filling out forms.

Often startup retailers spend a lot of time focusing on their marketing and their merchandising that they forget about the sale. It’s only the sale that matters in the end – and so the sale needs to be as easy as possible.

Getting finance is one of the biggest turnoffs for customers. Filling out all those forms and getting credit checks is time-consuming and annoying.

There are, however, some promising solutions. Companies that use point of sale financing have a lower chance of losing customers at this stage. The idea here is to make getting a loan to pay in installments as easy as possible. Startup retailers that make it easier to pay stand a better chance of long-term success.

Grabbing The Wrong Employees

The problem with employing the people that you know is that you’re usually not getting the best people. As a retailer, you have to focus on attracting the best possible talent to your company as possible. Your friends might be great friends, but it’s unlikely that they also happen to be great retailers.

It’s also worth pointing out that friends can sometimes take advantage of you. They might think that because they are your friends, they don’t have to work to the same standards as everybody else. This, in turn, can bring your entire team down. As a rule, keep your professional, and personal relationships separate in retail.

Failing To Lead By Example

In business, it’s usually a good idea to lead by example. People are more likely to respect you and work hard if you yourself are also working hard. This is particularly the case in retail, where it’s obvious if you’re working hard or not. Retail employees love it when owners and managers get involved in their day to day activities. It helps break down perceived barriers and build camaraderie.

Leading by example means several things. It means not taking long lunch breaks when employees have to stick to 30 minutes or an hour. It means making sure your personal life stays where it belongs: at home. And it means not going home early, just because it suits you.