How to Open a Retail Store: Starting a Retail Store Checklist (2024 Guide)

What Do You Need to Open a Retail Store 

The retail industry in the United States has experienced significant growth over the past few decades, with total sales skyrocketing from under three trillion U.S. dollars in 2000 to over seven trillion dollars in 2022. While growth is expected to slow slightly, forecasts suggest that retail sales will reach approximately 7.9 trillion U.S. dollars by 2026, according to Statista. 

This robust growth presents a prime opportunity for aspiring entrepreneurs to venture into the retail sector. With a strategic business plan, market research, and an understanding of consumer trends, now is an ideal time to open a retail store and capitalize on the industry's continued expansion.

How to Start a Retail Store: Your Complete Checklist

The checklist to starting a retail store is similar to starting any brick-and-mortar business. You’ll need to develop a strong concept and brand, raise capital, source products, and prepare to market your business to the community.

Choose your concept

When choosing a retail store concept, consider different options to define your niche and attract specific customer preferences:

• Traditional Concept: Emphasizes authenticity and high-quality products sourced locally, offering personalized service and expertise.
• Specialty/Gourmet Concept: Offers premium and exclusive products, appealing to consumers seeking unique shopping experiences.
• Sustainable Concept: Prioritizes ethically sourced and environmentally friendly products, resonating with environmentally conscious shoppers.
• Neighborhood-Focused Concept: Builds community connections by offering everyday products, personalized recommendations, and a welcoming atmosphere.

Selecting the right concept that aligns with your target audience and values ensures differentiation and success in the retail market.

Set up your business structure

US businesses may choose between five business types: Sole proprietorship, partnership, limited liability company (LLC), S Corporation, or C Corporation.

Solo founders or small partnerships tend to opt for solo proprietorship or partnerships, although they can also choose to be LLCs or S Corps. Most small independent businesses choose to incorporate as an LLC to achieve maximum business flexibility and legal protection.

You can learn more about business structures here.

Write your retail store business plan

Every new business should have a business plan. This formal document outlines your retail store’s mission and concept, and communicates to investors and other potential stakeholders how the business will function. It should include:

• Executive summary: The opening section of your business plan should include your mission statement, explain the retail store’s concept, and provide an overview of potential costs, operational plans, and marketing plans.

• Company overview: The important details about your business, like the ownership structure, location, and key stakeholders go here.

• Industry analysis: Food retail stores are a bit less competitive than grocery stores or other retail verticals like clothing. Nonetheless, your industry analysis should examine local competition from restaurants, groceries, and other food establishments. This shows potential investors (and yourself) that you understand your target market, know how to pull them away from the competition, and can take advantage of a potential opportunity in the market.

• Marketing plan: As your business evolves, your marketing plan will change. Still, your business plan should include a marketing plan to outline your general marketing strategies, like taglines, brand voice, and advertising channels you plan to use. These guidelines will help future employees and stakeholders understand how to talk about your brand and make a positive impression on customers.

• Operations plan: The operations plan breaks down how your retail store will run each day. It includes staffing needs, discusses customer service policies, examines takeout and delivery options, details technology you’ll use each day like point-of-sale systems, and more. It will also provide more information about suppliers and expected operating costs that will inform your financial plan.

Finances, sales forecasts, and operating expenses

Speaking of a financial plan, this separate document goes beyond your business plan to dig into the numbers that will make your business successful. The business plan may include some general sales forecasts and expected expenses, but the financial plan should get more granular. You should get some help from your accountant to complete this plan as it will be a very important guideline once you launch the business.

Retail stores have thin margins and it’s crucial to keep detailed records and make honest, accurate forecasts to make sure you’re staying under budget each month. The financial plan will help inform all your budgetary decisions, from hiring to choosing suppliers.

The financial plan should calculate estimates for both fixed and variable operating expenses to give you an idea of where you’re spending money and how much you need to earn each month to remain profitable and eventually break even on your investment.

Figure out funding

Securing funding for a new retail store requires careful planning and strategic approach:

1. Personal Investment: Consider investing personal savings or assets to demonstrate commitment and confidence in the business.
2. Small Business Loans: Explore options for small business loans from banks, credit unions, or online lenders tailored to retail startups.
3. Grants and Government Programs: Research grants and government programs available for small businesses, particularly those focused on retail or entrepreneurship.
4. Friends and Family: Consider approaching friends and family members for loans or investments to help kickstart your retail venture.

By combining various funding sources and demonstrating a solid business plan, you can secure the necessary capital to launch and grow your new retail store.

Follow the legal requirements

Understanding the licenses and legal requirements for opening a retail store is crucial for compliance and operational success. Here are the key aspects to consider:

• Business Structure: Decide on the legal structure of your retail store, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each structure has different legal and tax implications, so it's essential to choose the one that best suits your needs.
• Business License: Obtain a business license or permit from your local government or municipality. This license allows you to operate legally within your jurisdiction and may vary depending on the type of retail business you plan to open.
• Sales Tax Permit: Apply for a sales tax permit from your state's department of revenue or taxation. This permit authorizes you to collect sales tax on taxable goods sold in your retail store and remit it to the appropriate government agency.
• Zoning and Land Use Permits: Ensure that your retail store complies with zoning regulations and land use requirements in your area. Obtain any necessary permits or approvals from local zoning boards or planning commissions before opening your store.

By fulfilling these initial requirements, you can establish a solid legal foundation for your retail business and operate with confidence within the bounds of the law. It's advisable to consult with legal professionals or regulatory authorities to ensure compliance with all applicable regulations and requirements specific to your industry and location.

Choose a location

Food retail stores rely on foot traffic and repeat customers. Location, then, is crucially important. Your retail store should be in an area where there’s a lot of foot traffic and, ideally, where there’s not a lot of competition. A college campus is an outstanding location for a retail store, for instance.

When searching for real estate, you will most likely have three options:

• Commercial lease: Most businesses lease commercial space, and retail stores are no exception. While leases may come with some restrictions to the material changes you can make to the space or business activities you can pursue, they’re typically the most affordable option for businesses.

• Buy a space: Retail store owners may prefer to buy a space to fully customize it to their preferred specifications. This will cost you more upfront, but buying tends to be a better long-term investment for your business.

• Building a location: Building a new location likely isn’t your best option unless you’re trying to be the first retail store in a new development in a city or on a campus. Even then, developers will likely snap up the land quickly. Building a new store isn’t just expensive upfront, it’s taking a serious gamble that people will show up to a store that just popped up in a previously vacant location.

Design your layout

Optimizing the design layout of a retail store is crucial for enhancing both customer experience and sales performance. Here are key considerations for achieving this:

• Customer Flow: Design the layout to facilitate a smooth and intuitive customer flow throughout the store. Ensure clear pathways and signage to guide customers through different sections and product categories, minimizing congestion and improving navigation.
• Product Placement: Strategically position products to capture customer attention and encourage exploration. Place high-demand or impulse items at eye level and within easy reach, while using prominent displays or endcaps to showcase featured or seasonal products.
• Visual Merchandising: Use effective visual merchandising techniques to create attractive and engaging displays that highlight product features and benefits. Incorporate elements such as color, lighting, signage, and props to create visually appealing vignettes that draw customers in and encourage browsing.
• Comfort and Accessibility: Create a comfortable and accessible environment for customers by providing adequate seating, lighting, and ventilation. Ensure that aisles and pathways are wide enough to accommodate wheelchairs, strollers, and shopping carts, making it easy for all customers to navigate the store.

By optimizing the design layout of your retail store with these considerations in mind, you can create a welcoming and engaging environment that enhances both customer satisfaction and sales performance. Regularly solicit feedback from customers and monitor key performance metrics to continuously refine and improve the store layout over time.

Hire staff

Staffing is a top priority whether you want a small boutique or large warehouse store. Use this section to design a scalable staffing plan that prepares for both immediate and future staffing needs.

The team and management section of your retail store business provides a detailed look at the store’s staffing needs and management structure. This information will influence other elements of your business plan, such as the budget, so it’s important to nail down these details.

Consider what kind of jobs you plan to create. Will you hire full-time or part-time employees? What kind of benefits you are required to provide? This section is also where you can make a plan for hiring, training, retention, and promotion.

Write about how many employees you’ll need in the retail store and how many shifts you’ll need per day. Then, calculate how many managers are needed to keep things running smoothly. Will you need a general manager to oversee department managers? Your staff is responsible for your customer’s experience. Creating a strong staffing structure is a vital move toward success.

Create your marketing plan

The marketing and publicity section of your retail store business plan will offer a comprehensive view of your marketing strateg. Setting your store up is only half the work–becoming profitable requires brand awareness to drive sales.

Building hype for your store on social media, radio, and TV can ensure that your business’s launch is a hit. Offering promotions, loyalty programs, or discounts can create regular customers and consistent sales.

It’s a good idea to allocate a specific percentage of your sales to marketing. Investors want to know how you plan to become and remain profitable. Marketing and publicity are important parts of that equation. Consider including specific examples in your business plan like the following:

• Loyalty Programs: Implement a loyalty program to reward repeat customers with discounts, special offers, or exclusive access to sales and events.
• Email Newsletters: Send regular newsletters to subscribers with updates on new products, promotions, and upcoming events to keep them informed and engaged.
• In-Store Events: Host in-store events such as product demonstrations, workshops, or pop-up shops to attract customers and encourage them to visit your store.
• Influencer Partnerships: Collaborate with influencers or bloggers in your niche to promote your products to their followers and reach a wider audience.
• Cross-Promotions: Partner with complementary businesses or local organizations to cross-promote each other's products or services and expand your reach.
• Online Advertising: Use online advertising platforms like Google Ads or Facebook Ads to target potential customers based on their interests, demographics, and online behavior.
• Referral Program: Encourage satisfied customers to refer their friends and family to your store by offering them discounts or rewards for successful referrals.
• Seasonal Promotions: Run seasonal promotions and sales for holidays, back-to-school season, or other relevant events to capitalize on increased consumer spending.

Licenses and Permits Needed to Open a Retail Store

Opening a retail store requires navigating various legal requirements to ensure your business operates within the law. The specific licenses and permits needed can vary depending on the location and nature of your business, but generally, you will need the following:

1. Business License

A business license is mandatory for legally operating a retail store. This license is obtained from the local city or county government. It authorizes your business to operate within the jurisdiction and ensures compliance with local regulations. The application process typically involves filling out forms with details about your business, such as its name, address, and type of business activities. You may also need to pay an application fee and renew the license annually.

2. Seller’s Permit

A seller’s permit, also known as a sales tax permit, allows you to sell products at the retail level and collect sales tax from customers. This permit is typically issued by the state’s Department of Revenue or Taxation. To obtain a seller’s permit, you need to apply through the state’s tax authority, providing information about your business, including its federal tax ID number (EIN), business structure, and estimated sales. This permit must be displayed prominently in your store and is usually free or requires a nominal fee.

3. Employer Identification Number (EIN)

An EIN, issued by the IRS, is required if you plan to hire employees. It serves as a federal tax identification number and is used for reporting employment taxes, opening business bank accounts, and filing business tax returns. You can apply for an EIN online through the IRS website. The process is straightforward and free of charge. Once obtained, the EIN remains with your business for its entire lifespan.

4. Zoning Permits

Zoning permits ensure your retail store location complies with local zoning laws. These laws regulate land use and determine which types of businesses can operate in specific areas. Before signing a lease or purchasing property, check with the local zoning office to ensure your retail store activities are permitted at the chosen location. You may need to submit a zoning application, site plans, and pay a fee. Approval may involve inspections and public hearings.

5. Certificate of Occupancy

A Certificate of Occupancy (CO) is a document issued by the local government that certifies a building's compliance with building codes and other laws, indicating it is safe for occupancy. This certificate is necessary for any new construction, renovations, or when changing the use of a building. To obtain a CO, you must pass inspections by building, fire, and health departments. This process involves submitting an application, scheduling inspections, and addressing any identified issues before approval.

Why Toast Retail is Perfect for Retail Stores

In today's competitive retail landscape, selecting the right technology is essential for both new ventures and established businesses aiming for success. Solutions like Toast retail not only streamline operations, making them more efficient, but also provide invaluable insights to optimize the financial health of the business. 

By harnessing the power of point of sale technology, retailers can gain a competitive edge, improve customer satisfaction, and drive sustainable growth. Choosing the right technology sets the foundation for long-term success, empowering businesses to adapt to evolving market demands and thrive in an increasingly digital world.

The tech that redefined restaurants is now here to transform retail. Supercharge your store with the POS built for high volumes and complexity, offering everything you need to run your business on one platform. Toast's retail offering is a game-changer for businesses like convenience stores, liquor stores, and retail stores, revolutionizing how they operate and interact with customers. Here's why Toast is the perfect fit for these retail environments.

1. Helps Modernize How You Sell

Toast's intuitive, cloud-based system simplifies daily operations. Its user-friendly interface makes staff training a breeze, ensuring seamless adoption across your team. Whether it's processing payments in-store or integrating with online sales channels, Toast ensures a smooth and consistent experience for your customers regardless of how they shop.

• Intuitive Cloud-Based System: Our intuitive, cloud-based system is easy to learn and easy to use. Say goodbye to complicated interfaces and hello to streamlined processes. Toast is designed to simplify your day-to-day operations, from staff training to consolidated operations, ensuring maximum efficiency and productivity.

• Seamless Payment Processing: Toast’s seamless payment processing easily integrates with online payments for smoother sales every time, no matter how your customers are shopping. This integration ensures a hassle-free experience for both customers and staff, leading to increased satisfaction and faster transactions.

• Flexible Order and Checkout Options: Offer flexible and efficient order and checkout options with reliable hardware including handhelds, kiosks, and guest-facing terminals. Adapt to the diverse needs of your customers and reduce wait times at checkout with Toast's versatile hardware solutions, enhancing the overall shopping experience.

2. Streamline Retail Management

Efficiency is key in retail, and Toast delivers with automated, mobile-first inventory management. Say goodbye to manual inventory tracking and hello to SmartScan, a feature that enables quick product scanning and shelf placement. Managing thousands of SKUs becomes effortless with Toast's intuitive product database and bulk update capabilities.

• Automated, Mobile-First Inventory: Experience the freedom of automated, mobile-first inventory management with Toast. Create and print barcodes in bulk, and take new products from scan to shelf in seconds with our SmartScan feature. Say goodbye to tedious manual inventory tasks and hello to streamlined operations.

• Efficient SKU Management: Easily manage thousands of SKUs with our intuitive product database and bulk updates feature. Modify, reprice, and import multiple products at once, saving valuable time and resources. With Toast, keeping track of your inventory has never been easier.

• Retail-Enhanced Dashboards: Stay on top of your business with retail-specific dashboards and cost-tracking reports. Monitor trends, maximize margins, and ensure your top-selling products are always stocked, empowering you to make data-driven decisions that drive profitability.

3. Tailor Your Customer Experience

Toast empowers you to tailor the customer experience to fit your unique retail concept. Whether you're considering adding food service or expanding your offerings, Toast's flexible platform accommodates creative expansion.

• Creative Expansion Opportunities: Thinking of adding food service to your retail concept? Including Kitchen Display Systems and Order Ready Boards, our flexible platform allows for creative expansion. Explore new revenue streams and enhance the overall customer experience with Toast's versatile features.

• Online Ordering and Delivery Integrations: Give your guests the option to order from home with Toast’s Online Ordering and our third-party delivery integrations. Meet your customers where they are and provide convenience that keeps them coming back, increasing customer loyalty and satisfaction.

• Loyalty Rewards and Personalized Offers: Be your neighborhood's favorite shop (and incentivize repeat visits) with loyalty rewards and personalized offers. Transform one-time shoppers into loyal patrons by engaging with your community and offering enticing rewards, making your store the go-to destination for your customers.

In conclusion, Toast's retail solution is more than just a point of sale system; it's a comprehensive toolkit designed to elevate your retail store to new heights. From modernizing sales processes to streamlining management and enhancing the customer experience, Toast empowers retail businesses to thrive in today's competitive market.

Related Resources

• Best Retail POS Systems
• Retail Store Business Plan
• Retail Store Equipment
• Retail POS Software
• Retail Store Marketing Ideas
• How to Design a Retail Store
• Retail Store Ideas and Concepts
• Retail Store Inventory Management
• Cost to Open a Retail Store
• How Much Do Retail Stores Make
• How to Run a Retail Store