Starting a Retail Store? Here’s Everything You Need to Know

Starting a new business is an exciting (but sometimes stressful) time. Here’s our guide to the basics, if you’re ready to get into retail.

• 1.Choose a Business Structure

You can set up your business as a sole trader, a partnership or a private limited company (PLC) in the UK. Becoming a sole trader is simplest, requiring the least accounting and record keeping duties, but if your business fails, your home and other assets will be at risk to repay any debts.

Limited companies protect your personal assets, but require more administration and different taxes to be paid. There are potential benefits for incentives and tax breaks with limited companies.

Partnerships allow resources and skills to be shared with others, but partners can be jointly liable if the business fails.

Consider your tax setup, overheads, ownership structure and personal risk when deciding what’s best for you. If you’re unsure, speak to a legal professional or accountant to discuss your options.

• 2.Register Your Company With HMRC

Register promptly with HMRC, to obtain your Unique Taxpayer Reference (UTR) number. This is used for all tax reporting obligations like Income Tax, National Insurance, Corporation Tax, PAYE (Pay As You Earn – for employees) and VAT (Value Added Tax). If your turnover is set to exceed £80,000 a year, you’ll need to register for VAT and submit quarterly VAT returns.

Keep meticulous records for submitting Self-Assessment returns and VAT reporting.

• 3.Arrange Your Workplace Pensions

Even with a business to run, it's crucial to set up a personal pension early on. This will ensure your long-term financial security after you retire or sell your business.

Under UK law, employers must automatically enrol all staff aged 22 and over who earn over £10,000 a year into a workplace pension scheme. Contributions are made jointly, with employers legally required to contribute a minimum of 3% of the employee's qualifying earnings. Be sure to choose a pension provider (your accountant can advise you) and scheme before the staging date dictated by The Pensions Regulator.

• 4.Finding Your Ideal Shop Location

Finding the best location can be tricky. Where do your customers shop? Is there a good amount of passing traffic? Is parking easy? Is it well served by public transport? Is there any local competition?

Once you’ve found your ideal spot, you need to ensure that the space will work for you. Will you be able to fit the shop our as you like? Is there enough space for everything?

You’ll also need to check that the planning license is correct for the type of shop you want to have. If not, you may have to apply to the council for a change of use permission. Your estate agent should be able to advise you. Check if you’ll need any other licenses too, such as music, TV, tattooing, alcohol and more.

• 5.Setting A Budget and Arranging Finance

Calculate your required startup funding beyond any personal investment. See what small business loans, retailer credit lines, commercial mortgages and grants are available to you. Only once you know that you can afford everything should you sign a property lease.

• 6.Health & Safety at Work

You’ll need to get up to speed with current workplace Health and Safety policies and processes. Once your business is set up, you’ll need to conduct employee risk assessments, fire safety drills and first aid protocols. You’ll also need to understand disability/wheelchair access requirements inside the premises and provide staff training.

• 7.Don’t Forget Insurance!

Having good insurance is critical. Your insurance should include public liability insurance, buildings insurance that covers leased premises, employers’ liability insurance, stock inventory cover and business interruption insurance.

• 8.Staff Hiring and Training

If you’re going to be employing staff, you’ll need to think about your management structure and whether you want your team to be full or part time (or both). You’ll ned to consider employment contracts, payroll setups, work rotas and staff training for each employee.

• 9.Shop Fit Out and Fixtures

Your shop layout needs to be carefully considered. Measure your floorspace and configure your shop layout in a practical, but attractive way. Make sure your walkways give people plenty of room. Place high margin impulse buy items near the till, and regularly purchased essentials along perimeter walls to get customers walking the entire store.

You’ll need a staff break room and bathroom facilities, if there aren’t those already. Make sure your stock room is secure, easy to access and can meet your inventory needs. If you’re going to be fulfilling online orders, you’ll need a packing bench and packing and printing space there too.

Have a contractor fit non-slip, durable flooring – you’ll be amazed how quickly it can wear out. You’ll also need to consider security alarm systems, fire extinguishers and possibly automatic door entry systems or security grilles.

Think about where you’re going to place your till and ensure you have plenty of electrical sockets nearby. Ideally, your till should be somewhere in clear view, to deter any shoplifters, but not too near the door to encourage opportunist thieves.

• 10.Accounting, Cash Flow and Inventory Systems

Setup your cash register with integrated credit/debit card EPOS terminal systems. Once ready, catalogue all starting inventory into accounting system and stock products on shelves with pricing labels or add barcodes to your payment system.

Modern point of sale tools can help you to manage and track your stock, but it’s always worth carrying out a manual stock check a few times a year too. Backup your digital accounting tools and if you use apps, update them regularly for security.

• 11.Consumer Rights and Returns

You and your team will need to understand the Sale Of Goods Act 1979, to ensure refunds and returns policies are fair and legal. Reputation is everything, especially for a new business, so respond promptly and fairly to any customer complaints.

As you can see, there’s an awful lot to consider when it comes to setting up your own retail store. But the rewards of running your own business, doing something you love are immense. Clear planning, accurate money management and a great team are the vital keys to success.