Deciding between an ecommerce-specific business and a flagship store can raise a lot of questions. And while there are plenty of resources available about the best way to start an ecommerce website, little information is out there about what to consider when opening a brick-and-mortar retail store.

Because of the nature of the business beast, opening a retail store can have a lot of logistics to work through. Here are the most important to consider before opening your doors:


Get Legal

If you are starting a brand-new company, first and foremost you need to establish a legal structure. It is possible to change the organization that you choose to work under at a later time, but it can be a very difficult and expensive process. So choosing the right legal structure before you start your business is important.

There are a ton of options for legal structuring. The most common are LLC, sole proprietor, and a partnership, which can be either a general partnership, a limited partnership, or a limited liability partnership. If you choose to create a corporation, oftentimes they have higher operational costs due to their need for complicated record keeping. An S corp is a good option for small business owners because the profits are seen as personal income and are taxed through a personal income tax.

No matter what you do, you will want to consider getting the company incorporated. This will help protect your family and your possessions outside of the business in the case of severe debt or company closure.
Know what permits and business licenses you need to carry by contacting your state, city, and county governments. It can be helpful to talk to a lawyer in your area to get personalized information for opening a brick-and-mortar store. Make sure that you understand the zoning and signage laws in the area.

Before you begin full operation, you want to make sure you are covered. You will need insurance coverage that includes liability, inventory protection, and workers’ compensation in the event that an employee gets hurt on the job. You will need to file for an Employer Identification Number (EIN) or a Federal Tax Identification Number. This is required if you have any employees working for you, including yourself!


Choose a Location

The location of your store will be one of the most important decisions you make. It should be inviting to consumers. The identity and success of your company depends on the location you choose for it.

When choosing a spot for your retail store, make sure to research the surrounding areas before signing any paperwork. Contact the local city government for demographic information. They can tell you where the majority of people live as well as their income and age. Since you are targeting a specific group of individuals, you want to make sure they are in close proximity to your new brick-and-mortar.

The spending habits of your customers are everything when you are opening a business. You want your store to be located in an area that has a high population of your target audience. If there is a lot of foot traffic in the area you are considering, don’t let this be the reason you pull the trigger. You will need to consider if the traffic is your target market as well as whether they have the spending habits necessary to keep your retail store afloat. Don’t confuse a lot of foot traffic with a potentially high sales rate.

It’s important to consider which businesses are located near your storefront. It can be good to be near competition because it can give your customers the opportunity to do comparison shopping. But it can also make it difficult on your marketing budget if the other company is well established. If you are looking at a location that is near a difficult competitor, look elsewhere.

Chances are you may actually benefit from other businesses in the vicinity. The more customers they generate, the more opportunity there is for their consumers to become yours. The surrounding businesses should benefit the quality of the workplace of your company. If there are a few different successful restaurants and businesses, your employees have a place to eat for lunch and you can benefit from the foot traffic the surrounding companies bring.

You want to make sure that your company is not tucked away from the street view. This leaves you likely to be overlooked as a store. Remember that even the best retail malls have dead spots in them. Visibility of your store is important. Make sure the location you are scouting is visible from the main road. The signage on the store should be legible and easy to see from traffic. The better visibility that your brick-and-mortar store has, the less money you will need to spend on advertising.

The reputation of your store will begin even before you open your doors. Take a look at the potential storefront and pay attention to what reputation the address has had in the past. If the previous businesses were all failed boutiques, consider a different place to avoid falling in the “failure trap” if you intend to have the same store type.

Sometimes when consumers see that a specific business type has failed in a specific spot, they will assume that your business will succumb to the closure. The reasons for a closure can be vastly different from company to company, so do some research to find out why the other businesses failed. By the same token, if a storefront has been successful in past years, take that address reputation into consideration as well.


Create a Marketing Plan

Branding is vital to the success of your company. No matter what, you need to have a successful logo that is instantly recognizable for your consumers. It must also be easy to see from the street as well.

A study done in the Journal Management Decision states that color is an important aspect of conveying information to customers. The study says that people determine their first impression of a product and a brand within 90 seconds of looking at it. It’s important as a marketer to understand the way that colors affect customers. This means that the psychology of color is important to take into account when crafting your brand. It should be both inviting and powerful, while conveying the message and vibe of your company. Once your branding is on point, you can begin crafting a successful marketing campaign.



Organize events in your retail space. These can be either large- or small-scale events; it doesn’t matter. The purpose is to engage loyal and potential customers in your brand. When customers are invited and attend events, they have a more personal experience with the store and are more likely to visit again. By inviting the community into your store, you get to share your company as well as the vision with them.



Email marketing campaigns can be crucial to your brand. By choosing the appropriate platform upfront, you can ensure success. Programs like Hubspot and SnapRetail provide in-depth tools to help you create the perfect campaign every time.

Typically, a successful email relationship with your customers begins with a simple “welcome” email. Thanking your customer for engaging with your brand is important when it comes to email marketing. Since the majority of people are inundated with emails all day long, it’s important to stand out.


Social Media Marketing

Utilize social media as a marketing platform. No matter how large or small your operation, you will benefit from running a successful social media campaign. Create a Facebook and Instagram page for your new brick-and-mortar. Make sure to engage regularly with your followers. Post images and videos of what is going on in your store.

Keeping business social media accounts professional while maintaining a personality is important for engagement. Keep in mind that unless you have a following on these social media accounts, you will be throwing content to the wind. Work on building up your social media following. Offer free stickers with your social media handles to customers. This helps spread the message of your company while giving them a tangible takeaway.



Offer rewards to loyal customers. Starting a program can be as simple as a punch card or an electronic reward system. However you decide to implement this is very dependent on the business plan you are working with.

You can consider offering free product once a certain amount is purchased or a gift card. Beneficial rewards can be as simple as a discount that is unlocked after a certain amount of money spent. Offer separate incentives on birthdays for your customers. This will help keep customers coming in even if they don’t necessarily need to purchase anything.


Track Your Success and Failure

Always look at reviews of your company. Customers are often making their purchase decisions based on reviews from other customers. Once your brick-and-mortar store is established, consider actively working to obtain feedback. Offer customers a discount or a free promo product if they leave a review. There are several different review platforms that customers look at, so make sure to hit all the major sites: Facebook, Yelp, Google, etc.

Track every marketing campaign you run. Since the marketing aspect of a business is where it can be the most difficult to track effective return on investment (ROI) it’s important to make sure that you are tracking what your marketing dollars and efforts are contributing to. By setting measurable goals you can both track the success and improve a campaign. A great marketing strategy is simply knowing what to stay away from and knowing what does not work. Whatever your marketing strategy is, check in afterwards to measure the success or failure.


Choose Your Tools and Platforms:

One of the most frustrating things to deal with as a retail employee can be the technology you have to interact with on a daily basis. If the tools you have don’t work consistently it can lose you money.


Accounting and Finance Tools

This tool can be a physical human or a software service, but either way, it’s vital to the financial success of your business. If you have no way of tracking your profits and losses, you are flying completely blind with your own money. Research your options and choose a platform that is both easy to use and effective at its job.


Ecommerce Platform

It may not be a part of your business plan to have an ecommerce site — and I get it. Running a website, curating new content, keeping users engaged — it’s all exhausting. But it can be vital to the success of a brick-and-mortar business in the digital age. Consider at least having an online website to show you are a real company.


Point of Sale

Processing payments is vital to your company because it reflects what you are working for: money. Your point-of-sale system should be easy to use and low cost. Since most POS systems take out a portion of every sale, it’s important to make sure you are using the most cost effective program.

Square and Paypal are two good options. They offer mobile transactions. This can be helpful if you get really busy but only have one checkout or if you plan to have a booth at community events. You will need a cash register or a secure drawer to carry your money from cash sales.


Reporting System

A reporting system allows you to monitor what your best-selling products are. It helps you determine the sell rate and overall profit/loss of a certain time frame. This can either be hardware-embedded into your POS system or it can be a separate software that you run. Some systems do all of these things but cost a pretty penny, so weigh your options to save yourself and your new business some money.



The cost of running a retail front can be exacerbated quickly if your marketing efforts fall flat. The same is true if the location you chose is a dud. Make sure to do your research thoroughly before making business decisions for your retail store. By taking the time to consider your options, you are bound to flourish as a brick-and-mortar store.



Jori Hamilton is a freelance writer residing in the Northwestern U.S. She covers a wide range of subjects and with over 8 years of professional writing experience, she has taken a particular interest in topics related to Business, Marketing, SEO Best Practices, and Productivity. You can follow Jori on her Twitter and LinkedIn.