Independent Retailers: Listening to Consumer Demand and Ringing Up Profits
Posted: December 16, 2013
Independent retailers contribute to the local and national U.S. economy. According to the U.S. Economic Census and Walmart Annual Reports, they are defined as businesses with less than 10 outlets. But these savvy business professionals understand the impact of a satisfied customer and they leverage their years of experience, passion and arsenal of good business practices to create a unique niche.
Retail business operations vary widely. With the explosion of the Internet, online retail operations have become extremely competitive for the brick and mortar independent retailer.
The average independent retailer has 5+ years of managerial experience; the Internet entrepreneur may not have any experience in retail management.
Depending on the phase of the business, industry, product or service, an independent retailer’s job location may be a storefront, commercial space or home office. The following is a breakdown of responsibilities:
Financial – Handling accounting; must be familiar with profit and loss statements and other financial reports. Sets a budget and reconciles actual income and expenses.
Planning and administration- Fulfills orders, manages customer service and oversees Information Technology, etc.
Sales – Manages sales planning including sales reports and monitoring of all sales activities. Operates Point Of Sale (POS) software and creates sales displays.
Marketing – Implements advertising campaigns, social media campaigns and face-to-face events. Involved in networking, direct selling and entertaining customers.
Human resources – Hires and manages staff according to federal, state and local laws.
Inventory - Meets with service vendors and product suppliers to coordinate deliveries. Travels to select merchandise; stocks shelves.
Depending on the size of the business, the hours are based on the workload. Even though independent business owners set their own hours, they may need to work longer.
For incorporated business operations, business owners age 25 years or older accounted for 5,414,000 persons in 2009. This figure represents 22.3 percent of high school graduates with a college degree; 15.5 percent had some college but no degree. Additionally, 8.7 percent had an associate’s degree, 28.6 percent had a bachelor’s degree and 19.0 had advanced degrees.
Retail business owners can seek training or enroll in business courses from a nonprofit organization like the Small Business Administration or Service Corps of Retired Executives (SCORE) Score.org. These nonprofits can help business owners with business plans, funding, marketing and human resources. The National Association of Women Business Owners can also offer assistance.
New retailers should read, “Retail Analytics: The Secret Weapon” by Emmett Cox and “The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future” by Chris Guillebeau.
Starting a retail business can be a risky endeavor. Retail business owners should be highly knowledgeable about their product or service. They should be open to taking risk, comfortable with change, creative, assertive and communicative.
Chris Guillebeau, author of “The $100 Startup” said, “You need to care about the problem you are going to solve and there has to be a sizeable number of other people who also care.” Retail business owners should be skilled problem solvers.
Industry and geographical location affect the salary of the independent retailer. The national salary data on Payscale.com, showed that business owners earned a median total income of $68,000 in 2012.
Company size is another major factor. Business owners with fewer than nine employees can earn $35,000. Independent retailers with 10 – 49 employees can earn $90,000. Top salaries are commensurate with advanced skill levels.
The top five industries for retail businesses are child care/day care, landscaping, cleaning services, general contractor and construction
Most business owners start their businesses because they have a passion for what they do. Additionally, they have researched available options, found a lack of products or services in the marketplace and created a niche.
Sources of Jobs
Independent retail opportunities can be found with franchises and partnerships. Small Business Opportunities magazine has listings for small business startups and Entrepreneur magazine has a compilation of the top franchises. The American Independent Business Alliance and the Business Alliance for Local Living Economies have internships and jobs with independent businesses.
According to the Indie City Index, the following cities had a better than average share of spending: Ocean City, NJ; Bellingham, WA and Medford, OR. The study reported that the Mid-Atlantic, Pacific and New England were the regions with the strongest market share.
In the September 2010 issue of the Monthly Labor Review, a publication of the Bureau of Labor Statistics, self-employed workers accounted for 15.3 million jobs in 2009 and this figure represents retail operations. In 2012, the growth of specialty food stores (employing less than 20 workers), e.g., bakers and organic grocers has experienced growth at the rate of 23 percent. Currently, the overall trend in consumer spending supports the local merchant.TAGS: retail, management,