Where to set up your retail business
You may be familiar with the term ‘high street retailer’ which gives a clue about the importance of location to retail businesses. Each retail business needs to assess its market to determine the right location to set up – this can often mean the difference between success and failure.
Not every retail business can secure a pitch in a prime city centre location. In fact, such a location suits some types of retailers but isn’t necessarily the ideal location for many businesses.
Like any property search, location needs to be balanced against cost – and for a retailer, making sure your target customers can access your premises is key. Market research will help you to understand the needs and expectations of your customers.
Renting retail premises
Most people starting a retail business will need to rent premises. Renting means less capital tied up, fewer responsibilities for building upkeep, and greater flexibility to relocate depending on changing trading conditions. You’ll need to understand the practical steps and legal requirements of entering a rental agreement – see renting business premises.
You’ll also need to understand the financial commitments for paying rates. See business rates.
Types of retail locations
Prime retail spots – city and town centres, and some established retail clusters in suburban areas, can offer consistent footfall and a high profile for your retail business. However prime pitches attract premium rents and higher rates, which can be difficult for a start-up business.
Out of town developments – large retail parks can offer attractive footfall and competitive rents, but finding the right retail space can be difficult.
Business parks – enterprise centres and dedicated start-up business parks can be a good way of getting a foothold into the markets for lower or discounted rent. You need to balance this against lower footfall – can your business operate only with customers who are willing to travel to your premises?
Markets and pop-up opportunities – local markets offer a great way to start a retail business. Short-term, part-time or fixed-length pitches can give you the space to develop your retail skills and test the market. Opening a pop-up shop is another innovative way to start a retail business – see set up a pop-up shop.
Setting up your retail business in the right premises can be a big factor in successful trading – see choosing business property.
You can use our commercial property finder.
Proximity to other retailers
Pitching up beside a direct competitor might seem like a bad business move, however there can be benefits. For example a speciality household goods store could benefit from regular footfall beside a similar store as it offers greater choice and convenience to customers.
In the same way, starting your retail business near another business selling complimentary products, eg a greeting card shop near to a confectioner, can enhance your prospects of success.
Detailed advice for retail businesses
The retail sector is rich and varied and each type of business has its own set of challenges and sources of support. If you need detailed advice for the type of retail business you want to start see our Business Idea Profiles.
Ready to start in retail?
Access free start-up business support from your local council. Contact them to get one-to-one advice from a business advisor and tailored guidance to develop your business plan.