Retail business owners are entrepreneurs who start or buy their own businesses or franchise operations. They are responsible for all aspects of a business operation, from planning and ordering merchandise to overseeing day-to-day operations. Retail business owners sell such items as clothing, household appliances, groceries, jewelry, and furniture.
History of Retail Business Owner Career
Retailing is a vital commercial activity, providing customers with an opportunity to purchase goods and services from various types of merchants. The first retail outlets in America were trading posts and general stores. At trading posts, goods obtained from Native Americans were exchanged for items imported from Europe or manufactured in other parts of the country. As villages and towns grew, trading posts developed into general stores and began to sell food, farm necessities, and clothing. Typically run by a single person, these stores sometimes served as the post office and became the social and economic center of their communities.
Since World War II, giant supermarkets, discount houses, chain stores, and shopping malls have grown in popularity. Even so, individually owned businesses still thrive, often giving customers more personal and better-informed service. Moreover, despite the large growth in retail outlets and the increased competition that has accompanied it, retailing still provides the same basic, important function it did in the early years of the United States.
The Job of Retail Business Owners
Although retail business owners sell a wide variety of products, from apples to automobiles, the basic job responsibilities remain the same. Simply stated, the retail business owner must do everything necessary to ensure the successful operation of a business.
There are five major categories of job responsibilities within a retail establishment: merchandising and buying, store operations, sales promotion and advertising, bookkeeping and accounting, and personnel supervision. Merchandising and buying determine the type and amount of actual goods to be sold. Store operations involve maintaining the building and providing for the movement of goods and personnel within the building. Sales promotion and advertising are the marketing methods used to inform customers and potential customers about the goods and services that are available. In bookkeeping and accounting, records are kept of payroll, taxes, and money spent and received. Managing personnel involves staffing the store with people who are trained and qualified to handle all the work that needs to be done.
The owner must be aware of all aspects of the business operation so that he or she can make informed decisions. Specific duties of an individual owner depend on the size of the store and the number of employees. In a store with more than 10 employees, many of the operational, promotional, and personnel activities may be supervised by a manager. The owner may plan the overall purpose and function of the store and hire a manager to oversee the day-to-day operations. In a smaller store, the owner may also do much of the operational activities, including sweeping the floor, greeting customers, and balancing the accounting books.
In both large and small operations, an owner must keep up to date on product information, as well as on economic and technological conditions that may have an impact on business. This entails reading catalogs about product availability, checking current inventories and prices, and researching and implementing any technological advances that may make the operation more efficient. For example, an owner may decide to purchase data processing equipment to help with accounting functions, as well as to generate a mailing list to inform customers of special sales.
Because of the risks involved in opening a business and the many economic and managerial demands put on individual owners, a desire to open a retail business should be combined with proper management skills, sufficient economic backing, and a good sense of what the public wants. The large majority of retail businesses fail because of a lack of managerial experience on the part of owners.
Franchise ownership, whereby an individual owner obtains a license to sell an existing company’s goods or services, grew phenomenally during the 1980s. Franchise agreements enable the person who wants to open a business to receive expert advice from the sponsoring company about location, hiring and training of employees, arrangement of merchandise, display of goods, and record keeping. Some entrepreneurs, however, do not want to be limited to the product lines and other restrictions that accompany running a franchise store, or to split their profits with the franchise company. Franchise operations also may fail, but their likelihood of success is greater than that of a totally independent retail store.
Retail Business Owner Career Requirements
A high school diploma is important in order to understand the basics of business ownership, though there are no specific educational or experiential requirements for this position. Course work in business administration is helpful, as is previous experience in the retail trade. Hard work, constant analysis, innovation, and evaluation, and sufficient capital are important elements of a successful business venture.
If you are interested in owning a business, you should take courses in mathematics, business management, and in business-related subjects, such as accounting, typing, and computer science. In addition, pursue English and other courses that enhance your communications skills. Specific skill areas also should be developed. For example, if you want to open an electronics repair shop, you should learn as much about electronics as possible. Owners of small retail businesses often manage the store and work behind the counter. In such a case, the owner of a meat market is the butcher as well.
As the business environment gets more and more competitive, many people are opting for an academic degree in order to get more training. A bachelor’s program emphasizing business communications, marketing, business law, business management, and accounting should be pursued. Some people choose to get a master’s in business administration or another related graduate degree. There are also special business schools that offer a one- or two-year program in business management. Some correspondence schools also offer courses on how to plan and run a business.
Certification or Licensing
A business license may be a requirement in some states. Individual states or communities may have zoning codes or other regulations specifying what type of business can be located in a particular area. Check with your state’s chamber of commerce or department of revenue for more information on obtaining a license, or visit this Web site: http://www.sba.gov/ .
Whatever the experience and training, a retail business owner needs a lot of energy, patience, and fortitude to overcome the slow times and other difficulties involved in running a business. Other important personal characteristics include maturity, creativity, and good business judgment. Retail business owners also should be able to motivate employees and delegate authority.
Exploring Retail Business Owner Career
Working full or part time as a sales clerk or in some other capacity within a retail business is a good way to learn about the responsibilities of operating a business. Talking with owners of small shops is also helpful, as is reading periodicals that publish articles on self-employment, such as Entrepreneur magazine.
Most communities have a chamber of commerce whose members usually will be glad to share their insights into the career of a retail business owner. The Small Business Administration, an agency of the U.S. government, is another possible source of information.
Retail is reported to be the second-largest industry in the United States, employing more than 23 million Americans and generating more than $3 trillion in retail sales annually. Over 95 percent of all U.S. retailers are single-store businesses, although they generate less than 50 percent of all retail store sales, according to Retail Industry (http://retailindustry.about.com/).
Few people start their career as an owner. Many start as a manager or in some other position within a retail business. While developing managerial skills or while pursuing a college degree or other relevant training, you should decide what type of business you would like to own. Many people decide to buy an existing business because it already has a proven track record and because banks and other lending institutions often are more likely to loan money to an existing facility. A retail business owner should anticipate having at least 50 percent of the money needed to start or buy a business. Some people find it helpful to have one or more partners in a business venture.
Owning a franchise is another way of starting a business without a large capital investment, as franchise agreements often involve some assistance in planning and start-up costs. Franchise operations, however, are not necessarily less expensive to run than a totally independent business.
Because an owner is by definition the boss, there are limited opportunities for advancement. Advancement often takes the form of expansion of an existing business, leading to increased earnings and prestige. Expanding a business also can entail added risk, as it involves increasing operational costs. A successful franchise owner may be offered an additional franchise location or an executive position at the corporate headquarters.
A small number of successful independent business owners choose to franchise their business operations in different areas. Some owners become part-time consultants, while others teach a course at a college or university or in an adult education program. This teaching often is done not only for the financial rewards but as a way of helping others investigate the option of retail ownership.
Earnings vary widely and are greatly influenced by the ability of the individual owner, the type of product or service being sold, and existing economic conditions. Some retail business owners may earn less than $15,000 a year, while the most successful owners earn $100,000 or more.
Retail business owners generally work in pleasant surroundings. Even so, ownership is a demanding occupation, with owners often working six or seven days a week. Working more than 60 hours a week is not unusual, especially during the Christmas season and other busy times. An owner of a large establishment may be able to leave a manager in charge of many parts of the business, but the owner still must be available to solve any pressing concerns. Owners of small businesses often stay in the store throughout the day, spending much of the time on their feet.
A retail business owner may occasionally travel out of town to attend conferences or to solicit new customers and product information. An owner of a small business, especially, should develop a close relationship with steady customers.
Retail Business Owner Career Outlook
The retail field is extremely competitive, and many businesses fail each year. The most common reason for failure is poor management. Thus people with some managerial experience or training will likely have the best chance at running a successful business.
Increasing unemployment, the weakening of consumer confidence, increased competition from other retailers and direct-marketers, and the growth of Internet businesses are just some of the issues retail businesses will face in the next decade.