In business, the distribution channels include the manufacturer, the wholesaler, the retailer, and the final consumer. The manufacturer produces the goods or services, while the wholesaler buys from the manufacturer and sells to the retailer. After purchasing from the wholesaler, the retailer then sells to the consumers.
Retail businesses are important in the chain of distribution. They sell goods and services to final users for their consumption. However, they stand as intermediaries between the producers or wholesalers, and the consumers.
Retail businesses can be run online, in physical stores, or through direct sales. Also, retail businesses can range from boutiques to grocery stores, drugstores, makeup, and electronic outlets. Some advantages of a retailer are:
- High-profit margin
- Credit facility
- Selling a variety of products
- Better customer relationship
- More supply options
Ways You Can Fund Your New Retail Business
Starting a new retail business can be exciting, but you need finances to set up even with your brainstorming ideas. You need funds to get your shop, goods, and equipment. There are various ways to raise the money you need for your new business.
Loans From FinTechs
Another way to finance your new retail business is getting loans from Financial Technology. You can get flexible small business loans from FinTech companies to start your retail business. Thanks to FinTechs, borrowing has taken a new shape. FinTechs have a supreme user-friendly interface that makes the borrowing process smooth. You can now access loans through your phone and laptop screens. There is no queuing up or waiting long hours to meet the manager. All you need to do is to open a bank account online. With your business account, you can apply for a small business loan.
Applying for loans has never been easier and swifter. Also, your loan application can be granted in hours if you meet the requirements. In addition, getting loans from FinTech does not require paperwork, since every transaction is digital.
The funded online loans can be repaid according to your plan. You can choose to pay back monthly, quarterly, or however you can. All that matters is that you pay back within the agreed time. You can withdraw the funds or use them gradually, like in a line of credit.
You should always be your number one fan and believer. You need to prove to yourself and others that you take your business seriously. No matter how little, funding yourself shows confidence and encourages others to support you.
The first person that should fund a retail business is the owner. If you are buoyant and have all the finances needed, you should fund your own business.
One way to fund your business is to save. You can get a job in a company or as a freelancer. While working, have your business in mind and save the bulk of your earnings. The process may be long and stressful, but it will be worth it if you succeed.
You can also fund your new retail business by liquidating your assets. Selling valuable properties is a quick way to raise money. You can sell your car, furniture, jewelry, gadgets, etc.
Help From Friends And Family
Getting your friends and family to support you by financing your business is a viable option. They are more likely to fund your new retail business than total strangers.
You know your friends and family members. Who are those that are more likely to lend or share funds? Which of them has more faith in your business? They can send you money as an investment or as their contributions.
Have a solid business plan and proposal, and make them see that you have things under control. As much as they are your family members or friends, they wouldn’t want to put their resources into a futile business venture. If the money is a loan or an investment, decide and agree on a repayment plan.
New retail business owners can also finance their businesses by applying for grants. Getting a grant is better than a loan because grants are not paid back. Grants can be from the government, charitable bodies, or individuals.
These sources often provide small business grants to support start-ups and growing businesses. Your plan and business proposal should be excellent because grants can be competitive.
Retail business owners can get finances from crowdfunding. Crowdfunding is when multiple persons raise funds for a common goal. Instead of getting bulk money from a few investors, you can get smaller sums of money from many people.
Let’s say you want to raise $20,000 for your business. Instead of getting it from one investor, you can get $200 from 100 people instead.
You have to convince the crowd to contribute for your crowdfunding to succeed. Make them see your cause as worthy and productive. Crowdfunding can be in the form of donations, rewards, debt, and equity.
Things to remember:
- Crowdfunding donations are free, and nothing is expected in return.
- For reward crowdfunding, the donors receive a gift or discount sales.
- Debt crowdfunding is when the donors are to be paid back with interest.
- Equity crowdfunding is when the donors get a part of the business.
Two heads, they say, are better than one. Sometimes business owners want to run their businesses alone, but having a partner might be the best option. Getting a business partner can be rewarding, especially when they have the money, and you don’t.
The partner does not need to be physically present. They may have a full-time job and not have any business knowledge or skills. But you can bring the idea and do the legwork, while your partner funds the projects and provides moral support.
The challenge is that having the wrong partner can ruin the business. Partners can start a new retail business and succeed with proper evaluation and planning.
Starting a retail business is a big deal. It requires all the time, effort, and resources available. Retail businesses are major distribution channels, and they make goods and services available to end users.
Setting up a retail business requires capital. As such, you should be your first investor. You can put in your funds and savings or you can get a job and save if you have to. You can also choose to sell some valuable assets to raise funds. You can also ask your loved ones to support you.
FinTechs are also an option for loans, since their services are fast and digitalized. You can access these loans online. Lastly, there is the option of crowdfunding and partnerships. Go for whatever finance option you deem fit. The main goal is to set up your retail business and run it successfully.