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Before opening a dollar store, you need to investigate many avenues. You need to know the area and the needs of the public you’ll serve. In some cases, if you choose to operate in a busy and successful shopping mall, they may require a business plan before they allow you to rent the property. The business plan can also help you to estimate how successful you’ll be at that particular location. A business plan identifies many other items too. It should state how close your competition is and give reasons why you believe your store will be successful regardless of location. That reason may include your previous experience as a retailer or as a sales person. Business plans allow you to create a map on where you want to take the business. It makes you stop and think before you enter into any business arrangement and that’s good. Preplanning, looking for pitfalls, eyeing the marketing techniques of the competition and planning the store’s organization can aid in renting the appropriate amount of space at the right location. Opening a dollar store in a middle class neighborhood might mean you sell different items than one in a less prosperous neighborhood—just as other factors might create different merchandising needs. To get the best start in business, you need to identify these factors first. Other dollar stores are not your only competition. In many cases, large chains carry many of the same items you’ll carry. The prices may be in direct competition with yours. You’ll want to identify areas where you can beat or at least compete with other retailers. Knowing the cost of labor and other items necessary to run your dollar store are direct factors in whether you’ll make a profit or lose your shirt. You have to know how many items you have to move in a day at least to pay expenses and what you can do to increase business. Sometimes the floor plan has a lot to do with the popularity of your store, just as understanding the psychology of shoppers does. When you work out all the details ahead, it saves valuable time and assets once you begin business. Remember, there’s never another opportunity to make a good first impression. By estimating the potential sales and expenses before opening a dollar store, you will know where your breakeven point begins. If your estimated overhead is far higher than your estimated return at a specific location---shopping for a different location can save you money and prevent a financial disaster. Even though preplanning and looking for flaws that might doom your dollar store may sound like a negative exercise, it’s not. In fact, all you’re doing is insuring that you’ll be successful once you find the correct combination of location and marketing. Are you interested in learning more about opening a dollar store? Visit www.openingadollarstore.com for more information.
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