Five Fatal Mistakes for Small Retailing

Small retailers cannot effectively compete with big-box retailers and the Internet on many standard over-the-counter products like small appliances and electronics and should concentrate instead on more individualized products and services. You can offer more personal service and more choices on custom-made and one-of-a-kind products, such as lamps, rugs, furniture, and locally produced merchandise.

3. Failure to change with the market environment: This is somewhat related to No. 2 above, but it's focused more on selling methods and media. Only a few years ago, movies were rented and returned at local video stores. Today, they're mostly rented online and/or by mail, or by downloading them directly to your computer. The latest trend is the $1 movie rental and return boxes at fast-food restaurants. The Internet has dramatically changed many of our shopping practices, and customers are demanding more specialized and customized products and services, as well as comfortable venues in which to shop. Selling standard products off the rack from a plain-vanilla store environment rarely works anymore.

4. Underestimating the demands of retailing: Retailing is not for sissies. The demands of operating a successful retail store are many, constant and, frankly, all-consuming at times. Some would-be retailers mistakenly assume they can open and operate a retail store in their spare time. Retailing involves an endless cycle of buy, market, display and sell that can be extremely tiresome and demanding, especially for some personality types. It also means lots of long days and/or nights in the store selling and in the office ordering and paying bills. Of course, with success comes an increasing quality of life if you hire more employees to provide relief, but this in itself carries its own set of problems and demands.