If you are looking to open a retail store, a shopping mall would be the best place to open it. You will have an advantage of the crowd moving in and out of the mall. Investment in a shopping mall is straightforward but managing it successfully is very challenging. You do not need to invest in typical marketing methods like billboards, leaflets, pamphlets, and online methods.
The crowd visiting the mall will notice your store and show interest in trying your products. However, the competition will be cutthroat. Almost all stores sell similar kinds of products, so you will have to be very particular about pricing strategy. You will need to think of some ways to draw in your customers.
Tips for Investment in a Shopping Mall
If you have decided to open a store in a shopping mall, you need the following course of action:
1. Analyze the Mall
Once you have chosen the mall where you want to open a shop, you should analyze it to know the type of crowd visiting there, what other stores sell, and so on. In fact, you should visit the mall and see what kind of items is available there. You can get an idea about demographics. You must know about it to ensure the items you sell are budget-friendly for them.
For instance, a store of expensive shoes and apparel will not be successful in a mall visited by low-income group people. Each mall follows its own rules. Make sure that the mall allows you to sell what you want. You may have to follow their rules and regulations. Contact a mall owner and ask them if you are supposed to fulfill any formalities.
2. Decide whether or not to Franchise
This is the most complicated decision that you need to take before investing in a shopping mall. Any option between these two has its own advantages and possible risks. It may be a good idea to franchise if you want to attract a lot of customers from the very first day. Most mall owners rent or sell those who have a reputation and a loyal customer base.
You do not need to worry about marketing and competition, but you still have a lot of things to do to make your business successful. Note that a franchise business will restrict your freedom to make business decisions. You have to follow the rules and regulations a franchisor sets.
They will also have a share in the profit that you would earn, and you will have to pay a large upfront fee. If you want to run your own store in a mall, you would have to check if there are some other similar types of shops.
Most of the time, malls allow brands or well-known stores to open. If you have a good strategy to sell or believe that your product is tempting enough, you will not suffer any problems running your store. If things are not in favor, as of now, you should wait until your business emerges as a brand name.
3. Name your Store
If you want to open your new store, you need to consider your store name. The name you choose for it must be good, reflect your business, and be easy to remember and eye-catching. Do not use any term that has more than one meaning because it can confuse your target audience and it may affect the reputation of your business.
Note that you will have to invest in the marketing of your business if you are opening your own store. This name will be used in all marketing campaigns across all marketing channels. Do not pick a name that you end up making fun of yourself. Try to pick a word that your customers could easily relate to your business. You will have to get registered your business and its name because this will show up on all legal documents like taxes and lease contracts. If it is a sole proprietorship, your name will be the business name.
4. Understand all the Costs
Opening a retail store in a shopping mall can be expensive. Before you take the plunge, you should assess how much you are ready to spend every month to continue your business operations. Storefront lease is a major expense.
Experts suggest contacting multiple shopping mall owners and asking for the pricing. Comparison will help you get a good bargain. Bear in mind other costs like insurance and down payment. The size of the deposit may vary by mall.
Your work is not done now; it is just a preliminary cost that you are to bear to open a store in the mall. Now you need to calculate the cost of upgrading the interior. The interior cost does not just include the cost of racks, shelves, tables and chairs, but it also includes technology costs.
Apart from cash, you will be collecting payments online or by card. You must have an arrangement for that too. Plan for other expenses like employees’ salaries and marketing. It is likely that your savings are not competent to cover the initial cost, but you can apply for installment loans for bad credit direct lenders only with no guarantor.
5. Find out the Financing Source
If you need some money for the initial capital, you would have to determine the funding source. Depending on the borrowing need, you would have to determine which kind of loan is suitable to fulfill your needs.
For instance, you may need to take out a business loan if you need a significant amount of money. However, you will have to share a business plan with your lender to prove the chances of its success.
Qualifying for a business loan is not that easy. Therefore, you can consider applying for unsecured personal loans for bad credit with no guarantor. You can also look for an investor to raise money for your business.
If anyone gets ready to invest money in your business, they would like to share profits with you. Further, you will not be the sole decision-maker about your business strategies. Which funding source is worth its weight in gold depends on your needs and repaying capacity. Try to analyze carefully before reaching any conclusion; otherwise, you will end up asking for trouble.
Summing Up
Investment in a shopping mall can be very risky if it is just a start-up. A lot of things you need to look at before making a decision on it. You will have to analyze the location of the mall and the demographics, and then you need to arrange for the money for initial capital. If you are throwing your savings at it, do not exhaust it completely. Keep it for emergency expenses as well.
Before you borrow money, make sure the funding source you choose is suitable. If you are looking to franchise, you do not have the full right to decision-making and will have to share a certain percentage of profits with a franchisor. Take the help of a financial advisor if you need it.
