Top Retail Businesses Financial Models
Retail businesses are everywhere around us. At first glance, it is easy to mistake them for retail chains or franchises. But in reality, they are all individual businesses with their unique products or services. Some successful, some not so much. To start a retail business is no easy task, but it can be rewarding if done right. But, of course, you will need a retail business financial model for that.
You will need much more, but first, let’s look at the basic definition of a retail business.
What is Retail Business?
A retail business is usually an establishment that sells directly to the consumer for their use or consumption. They are called retailers. Their products are differentiated from others by branding and marketing. However, most people mistake retail businesses only to sell products. In reality, a retail business can also be selling services.
There are primarily four categories into which all of the retail businesses fall:
- Soft Goods (Consumables)
Soft Goods (Consumables)
As the name suggests, these can be consumed or used up in the future. So these goods are usually not things you buy intending to preserve them for long. Such goods include clothing, shoes, toiletries, etc.
The word ‘hard’ itself defines these kinds of retail businesses. Hardlines consist of tangible durable goods that will last longer, like home improvement equipment, furniture, appliances, tools, etc.
Retail businesses that sell products with a short shelf-life, especially edibles, are food retailers. These include groceries, bakeries, cafes, restaurants, meat shops, etc.
This category mainly deals with services more than products. For example, art retail businesses help artists sell their work or services directly to the public through galleries, exhibits, fairs, etc.
Now that you know what categories of retail businesses there are, it’s time you learn about their different business models.
Business Models in Retail
At the end of the day, retail is all about bringing customers to your business and then converting them into loyal regular buyers (or, in some cases, just convincing them to buy once), either by providing them good quality products at reasonable prices or giving them a pleasant experience.
There are many ways one can go about this:
Direct Sales or Pure Retail (B2C)
This means buying your goods straight from the manufacturer and selling it directly to the consumers. Direct sales also allow manufacturers to test out new products with smaller retailers before launching them on a larger scale. These businesses are primarily B2B, which means the same thing as directly selling to consumers.
This business model sells your goods to other businesses, not consumers. They then sell these products to their respective customers. This is exactly what B2B means – business to business.
E-commerce (B2B or B2C)
For many businesses, the best way to increase sales is through e-commerce. You can sell your products or services globally without having a physical retail store. E-retailers can either be B2C, selling to the customers, or B2B. In B2B, e-retailers sell their services or products to other businesses.
Marketplaces/Online Retail Product Sales
This is one of the most commonly used business models for selling retail products. Here, you list your products on a site like eBay or Amazon. Then buyers can come and purchase them directly from there.
Now that you know the fundamentals of retail businesses, here are some of the retail businesses we have chosen to guide you about.
The following section entails a guide on starting each of these businesses from scratch.
1. Grocery Marketplace | Retail Business Financial Model in Excel
The first business is a grocery marketplace. You can do this through online or offline means, depending on which you prefer. Many grocery stores simultaneously use online and offline mediums to increase their customer base. However, whatever the grocery business’s approach, they will always have one dominant area. For example, Instacart is a grocery store that drives a significant portion of its profits from its online sales.
Another example is Walmart. We all know about Walmart and its business model. Walmart is known for its giant in-house shopping experience. But again, both of these establishments combine online and offline selling methods while each focuses more on one method.
So, here is how you can start your grocery store.
Step 1: Conduct Thorough Market Research
Before anything else, you must conduct thorough market research on what your competitors are doing and how they do it. This will give you insight into their strengths and weaknesses in terms of products and marketing. Then, if possible, contact people who have bought from these retailers before to know more about their shopping experience. From hereon, learn about the products offered and why they are helpful.
Step 2: Choose a Niche Market
Next, choose a niche market or product line that larger retailers do not currently dominate. A niche market will allow you to focus on your business’ performance in terms of sales and marketing without worrying too much about competition. But that is only possible when you acquire the mastery within your niche.
Step 3: Select an Online Marketplace
Choose an online marketplace where you can list your grocery store. Sites like Amazon, eBay, etc., are suitable for this purpose. Establishing your presence on these sites allows you to maximize profits and reach out to customers all over the world (if you sell products internationally).
Step 4: Select a Domain Name and Hosting Site for Your Business
To create an online presence, your grocery business needs a website. You can decide to buy an already existing domain name or register a new one. If you want a unique domain name, try looking it up on Google as the first result. After this, find a hosting site that can host your e-commerce site. This will be where all the products are going to be listed.
Step 5: Market the Grocery Marketplace
By now, you should have marketed your grocery store offline and online through social media marketing and other mediums relevant to your niche market. The next step is to advertise your online grocery store’s presence by creating accounts on major e-commerce websites.
Step 6: Get a Financial Model in Place
Finally, get a financial model in place for your business. This will give you a better idea of the profitability of your grocery store business. Finally, get a financial model in place for your business. This will give you a better idea of the profitability of your grocery store business. The financial model will also help you make critical decisions. For example, let’s say your research shows that the average grocery store has a profit margin of 1%. You consider opening a grocery store, and your financial model shows that you’ll need a 5% profit margin to be profitable.
You can then explore ways to achieve that margin, such as raising prices or reducing costs. But you don’t need to do all of this because Oak Business Consultant has already done the hard part. We have created a specific financial model for the grocery marketplace. You can utilize this financial model in excel and be on your way to success.
2. Homeware Marketplace | Retail Business Financial Model
If you’re looking for a way to break into the retail world, then starting and running your homeware marketplace might be just what you’re looking for. Homeware is a general term that includes all products in the home, such as furniture, dishware, or textiles. Starting your own business selling these types of items could give you greater freedom than working at someone else’s store. In addition, it will allow you to become an entrepreneur with an online storefront.
Deciding the Type of Products
The first thing you’ll need to decide is the type of product(s) you want to sell. Are there certain brands that resonate most with your target market? What price point will work best? You may already have some ideas about where this can lead- if not, start by brainstorming with family or friends to get some ideas. You could also simply do an internet search for the different types of homeware products so you can see what’s currently available and popular.
While you’re doing this research, consider other aspects that go into picking your product, such as determining if any items should be excluded since they might not coincide with your target market. For example, hanging art pieces may not be the best product option if you’re looking for an older demographic to sell your items to. Also, consider the geographic location of where you’ll be selling- do some research on what type of stores are already in this area and how they cater to a specific clientele.
This will help immensely develop a niche that can decide what type of homeware retailer business you want to start.
Deciding a Niche
Once you decide on the type of products you want to sell, figuring out a customer base through a niche becomes more accessible since there’s less competition from other types of retailers selling similar products. This is important because it means that customers who might be interested in your specific products would already be looking online. As a result, you’d be able to stand out more than if you were simply selling the same items as everyone else.
Setting Up Online Storefront
No matter what your niche, you will most likely want to set up an online storefront so you can reach a broader audience. While some people sell their homeware products through brick-and-mortar stores, some businesses are exclusively online or have online and physical stores.
Determining the Target Market
Start by determining your target market, including gender, age, income level, marital status, etc. You should also consider where they live since this could influence their social media platforms or local events that might draw in customers. The time of year could also be a factor since you’ll want to plan your marketing efforts accordingly.
Finding Product Suppliers
Now that most of the company is set up, it’s time to find product suppliers. There are many different ways to find product suppliers, including companies that may already be wholesalers or retailers but don’t currently sell online or by catalog. You can also find an individual already selling their homeware products and see if they would like to team up on this project with you.
Marketing Your Business
Now that you have your business ready, it’s time to market it! Many marketing options are available, including social media campaigns or targeted online advertising. Figuring out which options will work best for your business will help bring in more customers and grow your brand.
Getting Your Retail Business Financial Model
Determining how much money your business needs will depend on various factors, such as whether you need help with purchasing inventory or other expenses involved. A financial model in excel is best for determining how much capital your business will need and whether or not your venture is feasible. But doing it without expertise isn’t possible. You will need financial modeling experts to get the best results. This is where Oak Business Consultants comes in. Our financial experts have already prepared your homeware marketplace financial model.
3. Massage Products | Retail Business Financial Model
So many people are turning to massage products to deal with stress and physical pain. This has led to an increased demand for these types of products. Which also means that starting your own business in this industry will be lucrative. Massage is becoming more popular because it’s seen as a luxury anyone can enjoy every day. Although there are many different kinds of businesses you could start, research shows that starting a retail business is the most profitable option. There are several steps involved with starting this type of venture.
Deciding a Niche
One of the first decisions you need to make is what type of massage products you will sell. You should decide if you want to provide only products for a specific niche, such as aromatherapy products, products for pregnant women, or foot massagers. Or whether you want to market your business more broadly and offer a wide selection of different kinds of massage goods. Deciding this early on will make setting up your business at a later stage much easier and quicker to do.
Target Audience Research and Market Study
You need to find out who you are selling your massage items to and where to find them. You can do this by carrying out target audience research. For example, you should look at where your potential customers spend online (forums, social networking sites) and offline (local events). You should also conduct a market study to determine the number of competitors you will be up against.
Setting Up Your Storefront
When deciding on how you sell your massage products, it’s essential to consider if people would prefer to shop online or offline (in person) for these products. There are many advantages to both options, but there are some factors you need to consider before making this decision. For example, which location do you want your store located in? What makes the most sense financially? When it comes to selling online, what types of payment do you accept when it comes to selling online? Will you be shipping internationally or just domestically? Do your research on what marketplace makes the most sense for your business.
Develop a Marketing Strategy
Although there are many options for marketing massage products, it’s essential to market yourself more generally before moving on to more specific things like SEO and affiliate marketing. One option, of course, is the word of mouth marketing or referral marketing. In this method, you sell more products by encouraging people who have bought from you previously to tell others about your store.
Social media has made this even more effective than ever before since referrals can go viral so quickly. But don’t forget that developing an effective email list of customers is still one of the best ways to get sales online. If your revenue is high enough, you should invest in SEO or PPC.
Here is Your Retail Business Financial Model
A financial model can be a great way to see if your business will make money. Even the most basic models can give you some insight into how much your profit margins will be. There are different models for different kinds of businesses, but the main thing is that it needs to include all your expenses and a realistic estimate of income from sales. But doing it all on your own may not come naturally to some, which is why hiring an expert to help you with this part can be beneficial. So, you also don’t need to hire anyone for this because Oak Business Consultant has done the job for you. We bring you the best financial model in excel for your retail business.
This is the exact financial model you need for your massage products retail business. It has everything you will ever need regarding expenses and income projections.
4. Golf Equipment | Retail Business Financial Model
Golf is a sport that has been around for centuries. It continues to be played in virtually every corner of the world. It is a fantastic sport because it does not require much athleticism but still offers lots of physical activity. It’s also fun for people who may not enjoy other sports because it is mental and physical.
If you are interested in starting your own golf equipment retail business, the steps below will be constructive for you to get started.
Deciding a Niche Market
There are dozens of different types of golf equipment available, so it’s essential to narrow down your search to just one or two categories that you’ll sell in your store. For example, if you’re planning on selling putters, then study what makes one putter better than another and why customers should purchase certain brands instead of others.
Target Audience Research
Before you start your store, think about who will be shopping here. Who are the customers that would participate in some of these niche markets that you’ve chosen? Of course, you’ll more than likely end up adapting to your market once you open, but having a good idea beforehand is never a bad thing. For this purpose, start studying demographics, socioeconomic status, location, age, ethnicity/race, etc.
Location Selection and Storefront
Like with any business, you want your storefront to be easily visible to see when they are walking by when it comes to retail. Therefore, it’s essential to find a good location for your golf equipment business. Since most golf equipment is expensive, you’ll want locations in upscale neighborhoods or corporate office parks where the average income is higher than the rest of the city. For example, if you’re located in an area with primarily lower-income families, your potential customers will not have enough disposable income to purchase the products you are selling.
Market Study or Competitor Research
You may already know who some of your competitors are but think about who you’d like your customers to compare your store with. If you want customers to come to you instead of a competitor next door, then do some research and find out what products they sell, how much their items cost, and how they price their items.
If there are already retail stores like yours in town, try visiting them and finding out about their sales strategies, etc. This way, you can get an idea of what has sold well for them recently or what they believe will sell well soon. Furthermore, if they carry many of the same items as you plan on carrying, then make sure to create your spin on it so that customers have a reason to buy from you instead of the competitors.
After you’ve launched your store, it’s time to start marketing it so that people learn about it and shop there. You’ll want to be proactive because if you wait, someone else will already have discovered your hard work by then. There are many different strategies for marketing, but whatever method(s) you choose should correspond with your location selection. For example, if you’re in a professional office park, direct mail flyers might be perfect for posting on employees’ cars or hung outside of buildings around the park. On the other hand, if you’re located in an upscale neighborhood, sending out direct mail flyers to all houses in the area may be better suited for getting your store noticed.
Financial Model/ Financial Analysis
This is one of the essential parts of ensuring your store will succeed. First, it’s essential to know how much money you’ll need to start up and make a list of all expenses you expect to have at least once or twice per week. Then compare that with sales projections, item prices, etc. Finally, you need to know when inventory will be ordered before it runs out so that you can order more in advance instead of having not enough on hand.
Furthermore, if you’re trying to pick between three different items, then study the financial model behind each option, especially if they are similar in price. The cost is very closely related to profit margin, which determines whether you’ll actually make money off of the sale or not. If two products are very similar in price, you’ll need to find something unique about one of them that would make the customer choose the more expensive one. If not, it’s probably best to go with the lower-priced option.
Financial Modeling is essentially a financial plan for your business. It’s important because you should expect certain costs every month and calculate whether or not they will be covered by income made within that month. Furthermore, if there are times when you don’t know how extended inventory will last, then create another section on your spreadsheet where it assumes that you have enough money saved up to keep buying inventory as often as needed, which allows the rest of your schedule to stay accurate just like with standard projections. But you need not worry about it all because your Golf Equipment Retail Financial Model is right here.
5. Tattoo Shop | Retail Business Financial Model in Excel
Tattoo artists are often considered to be an artist and a nurturer. They can help people feel better about themselves and their skin by using their creativity and artistic skills. As a tattoo artist, you can make money in various ways: through commissions from clients, renting out your space for other professionals such as piercers or jewelry makers, or even starting your shop.
There are many different paths that you can take with this profession, so it’s essential to find what best fits your personality. For example, if you want more of a social job with less pressure than being self-employed, finding employment at a studio might work well for you. However, if running your own business is something that interests you, creating your shop will be a great fit.
Starting your tattoo shop is an exciting adventure that you should not take lightly. Because of this job’s hours and demanding nature, it’s essential to ensure you enjoy what you do and have a sound financial plan in place before starting up.
You need to take several steps to make sure your business is booming. So, let’s get started.
Deciding a Niche
First things first, you’ll need to decide on a niche. You can do this by reading articles and books about tattooing techniques that interest you, attending trade shows where potential consumers and clients come and go and ask questions, talking with other artists for ideas of what is popular and what isn’t, and developing your own style.
You also want to consider the type of clientele you want to work with. For example, many artists specialize in a particular style like realism, neo-traditional, lettering tattooing, Gothic, or black and gray (monochrome) tattoos.
Identifying the Right Target Audience
Now that you have decided on a niche, it’s time to narrow down your target audience. Identifying and understanding your potential clients allows you to better organize and plan for your business’s future growth and success.
You should create a list of the demographic traits that best describe your potential client base. For example, location – city, state, and country; age group; income level; marital status; education level. You also want to consider where your clients work, whether they have tattoos themselves, are married or single, etc.
Doing Market Research
Now that you have a list of potential demographic traits, it’s time to do some research using the internet. The best place to start is by researching your competition. Find out how many shops are in your area and what makes you different from them. Take into consideration their social media presence and following. Also, what types of promotions or deals they offer, how their prices compare to yours, and what makes them different.
A great way to analyze your competition is through SWOT analysis. This will help you see your competitors’ strengths and weaknesses, along with the opportunities they have in the market and their threats. You can then use this information to set yourself apart from them.
Setting Up a Storefront
Now that you have your target audience and niche and have done market research on your competition, it’s time to create an effective marketing strategy. This should include setting up a storefront, whether online or in person. Creating brand awareness is vital for any business to succeed.
For example, you can set up a website and begin building a following through social media platforms such as Facebook and Instagram, where people can see your work and fall in love with it.
Developing Your Marketing Strategy
After creating an online presence, there are countless ways you can market yourself, including group discounts. For example, suppose one of your friends brings someone new into your shop who becomes a client at your shop. In that case, you both get a discounted price on your next service.
You can also do promotions for specific events relevant to your demographic or niche—for example, Halloween specials or Memorial Day weekend, where you give out free tattoos.
Getting Your Retail Business Financial Model in Excel
When starting a business, it’s also important to have a solid financial model with an accurately projected revenue stream. This allows you to budget out all of your expenditures each month so that you know how much money will be coming in and how much is going out. There are many useful online templates to upload sales information directly into this template for expenses such as rent, supplies, equipment, etc. With art being subjective, there isn’t one set price, but rather, what you charge per hour is most likely based on the average price per hour at other shops in your area.
But obviously, a specifically designed financial model is much better than free online templates. This is where Oak Business Consultant comes in. Our financial experts have spent hours carefully auditing, designing, and perfecting this model to best suit your business needs. This way, you can free up more of your time to focus on what matters most – your craft. And here is your Tattoo Shop Financial Model.
6. Barber Shop | Retail Business Financial Model in Excel
Barbers have evolved from being just a guy that cuts hair to someone who can do many things for their customers. As a result, the industry has become lucrative, and the demand is high because the barber shop experience is becoming more popular.
Barber shops are now evolving into something much larger than they used to be: Trendsetting fashionistas and style experts in addition to snipping scissors.
In fact, according to Michelle Obama’s hairstylist Johnny Wright, people are going out of their way for a haircut — even New York City’s mayor Bill de Blasio traded his longtime stylist for one who could come to his office.
If you’re thinking of opening your own barber shop, you might be asking yourself: How to start a barber shop? Here are some helpful steps and information on how to get started.
Deciding A Niche
When it comes to opening your own barber shop, you’ll need to decide what kind of clientele you want to serve. For example, do you want to serve kids or adults? Maybe you specialize in cutting women’s hair. Some men come in for “bro” haircuts, while others want the latest style trends.
Due to this diversity, open a niche barbershop where one can get anything from a straight razor shave, deep conditioning treatment, and even a hot towel wrap. Then again, if there is a high demand for trendy haircuts or traditional haircuts with straight-edge razors, then consider starting a general shop that does all sorts of hair services from nose ear trims down under. But, again, what you specialize in is not important as long as there is a demand for it and your business does not go under.
Target Audience Research
Knowing who you want to target is important, so researching potential customers is critical. If you already know the kind of people you wish to serve, do research on them and find out more about their likes and dislikes, needs, and wants.
You can also do this by first looking at other barber shops’ target audience research. Note what other barbershops are doing to target their audience and how they’re doing it. This information can help you develop your marketing strategy further and make it more effective.
Market Research / Competitor Research
Knowing who your competitors are and their market share is essential as well. What services does each competitor offer, and how does each service compare to yours? Is there something unique about you that makes you stand out from the rest? Are you targeting a large market or niche?
Setting up a Creative Storefront
To have a successful business, you’ll have to set up a creative storefront that will attract potential customers.
There should be a sign outside with your name and what you specialize in. Suppose there are other businesses around your barber shop. In that case, make sure to put yourself first on the sign or find something unique that makes yours stand out. You can also include language about targeting specific age groups and excellent customer service.
Getting Your Retail Business Financial Model in Excel
Once you’ve passed these steps, it’s time for the essential step: Getting financial projections in place. You’ll need to do this first before getting your shop up and running.
If you want help with this step, consider using a professional business consultant service. That way, you can ensure that your numbers are accurate, so you don’t have any surprises later on down the road. Once it’s completed, be sure to have an accountant look at it as well so they can point out potential flaws or issues with the model. But actually, you can skip this step because Oak Business Consultant has created a specific financial model just for you. Yes, it’s a financial model for your barber shop. This financial model will help you get started with your barber shop.
7. Appliances Store | Retail Business Financial Model in Excel
Appliances stores are retail business that sells home appliances and consumer electronics. These include refrigerators, ovens, water heaters, dishwashers, clothes washers, and more. Consumer electronics include televisions, smartphones, tablets, and laptops. Various retailers offer these products at different price ranges for various needs, such as affordable to the average family or high-end luxury items for those with more money to spend.
If you want to enter this lucrative industry, here are some steps to follow when starting your appliances store retail business.
Decide on a Niche Market
One of the first steps to start any type of retail business is to decide on your niche market. A niche market consists of customers with common demographics, interests or needs that you can target using efficient distribution channels for efficient marketing and distribution. To maximize profit margins, it’s important that once you do choose a niche market, narrow it down to its specific sub-niches within your industry. For example, if you’re opening an electronics store instead of selling all types of electronics products, specialize in selling high-quality cameras at affordable prices only because the demand for this product has increased over time.
There are several factors to consider when choosing a niche, such as the size of your industry, ease of entry into the market, and profitability.
Determine Target Audience
After determining your niche, the next step is to conduct target audience research using primary or secondary data collection methods. When deciding on your target customers, it’s important to narrow down who you plan to sell products to create appropriate marketing strategies that will yield positive results. Primary or secondary data collection refers to gathering information through surveys, focus groups, interviews, and other direct means versus collecting published demographic data available from government agencies or statistical bureaus via the internet.
Market Study/Competitor Research
Before opening an appliances store, it’s best if you do some level of market study or competitor research to determine what your competition is offering. The market study involves the analysis of the products, prices, quality, value, and overall customer satisfaction in order to determine market demand for different types of appliances stores.
Competitor research, on the other hand, involves looking into your competitors’ marketing strategies, pricing models, and methods of distribution that you may be able to replicate in order to increase sales. Competitors can also inspire new cost-saving ideas for business operations, such as advertising strategies and human resources management.
Set Up Shop
The next step after deciding on which niche market you plan on targeting is opening up shop by leasing or buying a storefront, depending on how much money you have saved up for this venture. If possible, find an area that is accessible to your target audience for them to come into your retail store easily. For example, this means that if your specialty is cameras, then you should open up a shop near a large shopping mall or entertainment center where people with money go.
Developing Your Marketing Strategy
It’s important to develop a marketing strategy after opening up shop to create visibility and attract customers, resulting in more sales and market share. There are many ways you can market your appliances store such as advertisements on social media, search engine optimization on company websites, mobile apps for smartphones, online video advertising networks like YouTube, or by placing direct mailers in the post office addressed directly to potential customers who fit within your niche market.
Get a Retail Business Financial Model
The final step to starting your own appliances store is developing a financial model for the business. This should be based on expected revenue, expenses, and risk assessment. A financial model is used to calculate possible business scenarios of different marketing strategies to get an idea of how much profit you can generate within a certain time frame of operation. This is where Oak Business Consultant comes in. Our financial experts have already prepared a financial model for your appliances store business. This financial model is a ready-made excel file that has been created using our years of expertise in managing corporate finance for businesses.
Who is Oak Business Consultant?
Oak Business Consultant is a professional business consultancy firm that provides clients with high-value financial consulting services. Our consultants are professionals contracted out from the best accounting firms. They have years of experience in the financial sector working for corporations. We provide financial planning, financial analysis, CFO services, and many other SMEs finance services to companies around the world.