- June 25, 2020
- Posted by: matogconsulting
- Category: Business Plan
HOW TO START AN ELECTRONICS/APPLIANCES RETAILER BUSINESS
By Ayoade Apelegan
Electronic appliances like mobile phones, blenders and other appliances have become part of our everyday lives. Every household has one form of an electrical appliance in its possession and also looks forward to getting a particular type of electrical appliance to make life easier.
Electronics appliance retailer business is a type of business that is engaged in the sales and distribution of electrical appliances. They also offer other services such as repairs and maintenance.
Examples of electronic devices are DVD players, laptop, desktop computers, cameras, oven, mobile phones, fans, washing machines, refrigerators, etc.
Are you planning on starting an electronics appliances business? If yes, you will find this article useful as you prepare to take the necessary steps to start your electronics/appliances retail business.
Below are some points to consider as you ponder on this business idea.
Get a Business Plan
The business plan for your electronics/appliances retail business will contain all the necessary information required to set up the electronics/appliances retail business, the number of people the business intends to hire, the profit and loss analysis, cash flow analysis and the projected earnings from the electronics/appliance retail business.
Other ways in which the business plan is useful includes;
- Attracting investors
- Making sound decisions
- Raising money for the business
- Identifying potential weaknesses
- Communicating ideas with stakeholders
Contents of the business plan are:
- Executive Summary
- Key to success
- Company summary
- Company ownership
- Start-up summary
- Market analysis summary
- Market segmentation
- Commercial sales
- Target market segment strategy
- Industry analysis
- Buying patterns
Register the Business
In Nigeria, according to the provisions of the Companies and Allied Matters Act (CAMA) 1990, the Corporate Affairs Commission (CAC) is the statutory body legally empowered to incorporate a business.
The benefits of registering a business cannot be overemphasized. Some of the benefits are:
Building trust and reputation: Registering a business gives potential customers the confidence that they are dealing with a reputable organization.
Account Opening: In Nigeria, one of the requirements of opening and operating a corporate bank account is the certificate of incorporation. A certificate of incorporation is issued by the Corporate Affairs Commission (CAC), which is the body authorized to carry out registration of business names.
During a business transaction, people are more comfortable paying into a corporate account than an individual account. Operating a corporate account gives a business more credibility and trust from customers, suppliers and other business associates.
Register for Tax
Hire a Tax Consultant for your electronics/appliances retail business. The tax consultant helps put your books in place and advice you on the tax implication of the business to avoid sanctions and disruptions of business processes from government agencies.
Get the relevant license
When running a business, licenses act as a legal document or authorization for your business and the products you sell. It is necessary to obtain the required licenses and permits from the local, state and the federal government as well as relevant associations as the case may be, this is to ensure a hitch-free business operation.
Insurance protects your business against unforeseen circumstances and events that might occur during the running of your business. Insurance for an electronics/appliances company covers the following:
Goods in transit;
As a business owner, you must get insurance an insurance cover for your business.
Understand the Business Model
Before venturing into an electronics business, it is important to examine, study and understand the business models of existing electronics businesses.
Some of the ways to achieve this are by:
Learning how to manage supplier relations.
Customer satisfaction strategies,
Understanding how prices are charged on goods,
Consulting extensively with knowledgeable people in this field of the business venture. These people may be owners of electronic stores, sales representatives of electronic manufacturing companies, people participating in the value chain of electronic business.
Undergoing sales apprenticeship training with established electronic retail to learn the nitty-gritty of the business.
Choose a Niche
Because there are different types of electronics, you need to decide if you will be operating a multi-purpose electronics store or a store that focuses on a particular type of electronics. For example, for a multi-purpose electronics store, you can sell a combination of electronics such as; fridges, television sets, air conditions, fans, washing machines, cookers etc., while focusing on a particular type of electronics can see you dealing in only air conditions.
Study your competitors
To outperform your competitors, it is important to keep close tabs on them to know their source of supply and services being rendered to customers. You should endeavour to be a step ahead of your competitors by offering those services they aren’t offering and finding better and improved ways to offer those services that they do render. For example, you can offer delivery and installation services to your customers.
Choose a Location
A visible and accessible business premises helps spread word about your electronics store. Places that have high human and high vehicular traffic are ideal places to site an electronics store.
One way of advertising electronics and appliances is by displaying the products. You need a showroom/display room where customers can test out the products. You will have to create a real-life experience for customers in your showroom/display room. For example, you can create a mock living room where television sets and audio appliances can be tested; a kitchen where the cookers can be tested.
An electronics/appliances retailer business is a capital intensive business. The ways through which you can secure the required funds for starting a business should you not have enough savings are:
Bank loans: Bank loans are one of the most common forms of finance for small and medium-sized enterprises. It can be capital/principal repayment or interest-only and can be structured to meet the business’s needs. Bank loans can be short term or long term depending on the purpose of the loan.
Venture Capital: Venture Capital is a type of funding for a new or growing business. Equity capital or loan capital provided by private investors.
Angel Investors: Funds for starting a business can be raised through Angel Investors. Angel Investors are individuals that provide capital for a business in exchange for convertible debt or ownership equity.
Crowdfunding: This is the process of raising capital through the collective effort of a large number of people mainly through the internet.
How to Start
There are two ways in which you can start an electronics/appliances company. They are:
- Franchise: A franchise business occurs when the owners of a brand sell the rights to their business name and logo to an independent operator. Buying a franchise gets you the added benefit of brand recognition. During a franchise agreement, you will be allowed to deal in products from only a particular company. For example, having only LG products in your store.
- Buying from any supplier: buying products from any supplier affords you the opportunity of having electrical appliances from different suppliers in your store. For example, you will have products from LG, Sony, Sharp, Kenwood, etc, in your store.
- Building your brand: you can always approach an electronics manufacturing company to produce electrical appliances on your behalf and rather than putting their brand name on the finished product, they put your brand name.
Constant Power Supply
During the purchase of new electrical appliances, these appliances must be always put to test to convince the would-be buyer of its functionality. You would want to avoid a situation whereby a customer walks into your store and is interested in purchasing a TV Set but can’t check the functionality because of lack of power supply. Therefore, you must have an alternative source of power supply in your store e.g. a generator, inverter or solar source of power supply
Attending exhibitions and trade shows
Attending trade shows and exhibitions will give you the necessary exposure as an electronics appliance retailer. You get to meet a lot of industry professionals and find out about the latest electrical gadgets from the manufacturing companies.
Strong social media presence
Your electronics appliances store must have a strong social media presence. A business’ social media presence is also a marketing tool. Social media profiles on Facebook, Twitter, LinkedIn, Instagram, Pinterest, can be used to maintain existing relationships with customers, as well as to get leads and gain more customers. One of the ways through which you can keep your social media page alive is through regular posting, and engaging in user-generated content.
Build an Online Presence
People seek information online when they need they need to purchase any form of electrical appliances. This information ranges from; price, specifications, unique features, pictures of gadgets, etc. An electronics/appliances company must have a good presence online, as the internet has become a marketing tool for businesses.
From the comfort of their homes, people now compare prices when it comes to purchasing new electronics and household appliances.
You should ensure that during a search on the internet, your website comes out top in the search results. Among other things, you should ensure is that your website is easy to navigate and should be responsive for mobile devices as well as updating it regularly.
Adding a “customer assistance” page or FAQs page to your website
Speaking of making an impact, another hugely important potential addition to your electronics store is a page that helps customers with common questions or issues.
Generally, getting a hold of how electrical appliances works can be tricky. One thing that will benefit both the customer and the business owner is to create a page with some FAQs, documents that explain how to operate different electronics, links to how-to guides, or even a short length video that explains how to fix minor issues that might arise during the use of the electrical appliances.
Adding a contact form to your website also helps you to be aware of common issues that customers can face during the usage of electrical appliances.
The idea is to create an experience that differentiates you as a brand while also making these experiences as frictionless and personalized as possible.
Opening a store in online market places
Online marketplaces are fast gaining acceptance among upwardly mobile youths and adults alike. You should consider opening a store in one of the leading marketplaces, be it Jiji, Jumia or Konga. The way this works is that you get to pay the online market store a percentage of your sales proceed for any sales made through their platform.
Hiring of Staff
The number of staff to be hired will depend on the size of the electronics store. Below are some staff that are necessary for an electronics/appliances retail store.
- Floor manager
- Stock manager
- Delivery personnel
- Promotional heads
- Sales representatives
Associated costs that are related to starting an electronics/appliance company are:
Business registration fees;
Power and other services;
Professional services fees;
Equipment / inventory cost;
Interior decor and aesthetics,
The offering of Value-Added Services
Offering customers a wide range of value-added services when they purchase goods from your store builds customer loyalty and improves their shopping experience.
Examples of value-added services that can be offered by an electronics appliance company are:
Repairs and maintenance services;
Replacement of product parts.
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