The latest research from the national enterprise campaign has shown positive signs that the retailing industry is beginning to finally emerge from the economic downturn. This shows there are more entrepreneurs who are willing to try their luck in succeeding in running their own business, however, with so many new businesses being set up competition is fierce.

With this in mind small business owners are going to have to be savvier than ever in order to obtain a competitive advantage over their competitors if they want increase growth and market share in their relevant industries but even more so in retail markets.

A Clear Business Plan

This may seem straight forward but according to Bloomberg 8 out of 10 businesses fail within the first 18 months of trading. Therefore it is imperative that any start-up business owner has a clear concept of what they want to achieve when they set up the company. The impact this has is it allows the business to have a solid strategy when entering a market rather than just trading without a set vision.

This is especially important in a highly competitive retail industry because a well written business plan will have you prepared for any difficulties you encounter within your first couple of years of trading. Therefore if plan A doesn't work you can always turn to plan B or C rather than panicking.

Brand

For retail businesses brand is everything, which adds weight to the benefits of writing a solid business plan, as you want to appeal to your target audience as effectively as possible. A well thought out brand strategy can make the difference between a start up being a success or a failure. The reason behind this is if people do not engage with your brand whether that is online or offline then it will have an extremely detrimental impact on sales and will ultimately end up in your costs outweighing your incomings.

A case of where this can go severely wrong is Burberry. Once they were considered one of the most fashionable luxury brands, however, due to football hooligans wearing the Burberry label it began a slippery slide from luxury to being seen as a brand that chav's would wear. Burberry has since had to rebrand in order to regain their position as a luxury brand but this highlights how dangerous a negative brand image can impact a company in the retail sector.

Location, Location, Location

This is without a doubt one of the most important things for a retail business to consider, especially if you are involved in selling goods such as fashionable clothing. This is where you have to really understand your brand and the type of audience you wish to target before deciding on a location to sell people your products.

For example a start-up business that wants to sell boutique fashion items would not position themselves in an area where there is a low disposable income. In addition as shown from the Burberry example above the location of where you sell your products can have an extreme impact on your brand. In the example of a high end fashion retailer you would want to limit the amount of products and stores your goods are sold in, in order to keep the prices high and maintain the exclusivity of your brand.

Unique Selling Point

This is hugely important for a start-up retail company for it is highly likely that you will be competing against some large brands within your sector. Therefore in order to succeed you will have to find a niche in which you can increase your brand awareness to your target audience. It's all well and good having a brilliant business idea, however, if there is an established brand that currently produces the same product as you then it is likely consumers will choose them over you as they recognise the brand. Therefore if you can differentiate yourself from the competition than you have a much higher chance of you start-up succeeding.

Ensure you can manage demand

Managing demand is hugely important for a retail company particularly if you have a physical and online store. With the correct marketing strategy in the build up to the website launch or store opening there could be an increase in sales; in addition the build up to Christmas is a period of high demand for the retail industry. This means that in many cases a business will need to increase their inventories in order to cope with the excess demand or risk potentially missing out on sales. This may require a business to consider additional storage solutions in order to house their products in the build up to these events in order to meet their customers demand.

One way in which a company can do this is by opting to get a logistics solution which will house their products in anticipation for times of high demand. Although on a larger scale to start-up businesses if Sony had an improved worldwide logistics solution it would have been extremely beneficial for them when they launched the PS4. Not anticipating the huge consumer need for this product they had monumental stock issues in the Christmas of 2013 which meant that there were a lot of unhappy people without a PS4 on Christmas day. This allowed competitor Microsoft to gain an advantage in the gaming industry moving into 2014.

For a small business having a logistics solution in place can also have additional benefits to a business owner as it allows them to concentrate on expanding their company rather than dealing with the process of managing their stock and supplying goods to their customers.

Retailers Forum, the leading magazine for wholesale merchandise, celebrates 33 years servicing the retail/wholesale community.