Many people want to start a small business, but they’re unsure of what type of business to start. A survey from GOBankingRates recently revealed the most frequented small businesses in the United States, data that can help entrepreneurs narrow down which type of business might be most profitable for them.
It might not come as much of a surprise, but bars are very popular small businesses. Customers love going to bars, socializing, and having a good time. There are some challenges to starting a bar, namely high startup costs and the inventory required to run them. According to data provided by the NYU Stern School of Business, businesses in the alcohol sector have a 44.42% gross profit margin.
Customers love boutique shops, like clothing stores, gift stores, and other specialty items. Many of these shops are located in walkable shopping areas and cater to specific populations. Like bars, boutique shops require inventory and startup costs to run. However, unlike bars, they have less red tape, because they do not require liquor licenses or extended hours. General retail stores have a gross profit margin of 23.25%.
Restaurants and Coffee Shops
Restaurants and coffee shops are the most frequented small businesses according to the GOBankingRates Survey. Of the 1,000 people surveyed, 32.8% said they frequented restaurants and coffee shops, the most among the small businesses on the list. Restaurants have a gross profit margin of 30.07%. Contrary to popular belief, restaurants do not have a sky-high failure rate; it’s actually around 30%.
Even though we live in the digital age where consumers tend to prioritize social media over reading books, bookstores are still among the most frequented small businesses according to the survey. Bookstores can create a marketing buzz by partnering with authors and publishers and curating one-of-a-kind events. Of the people surveyed, 15.86% said they preferred bookstores over other small businesses on the list. Like boutique shops, bookstores are general retail stores and have a gross profit margin of 23.25%.
How Often Customers Shop at Small Businesses
When deciding what type of small business to open, it’s also important to understand customer spending patterns. GOBankingRates surveyed customers and asked them about their spending frequency at small businesses. Just over 10% said they shopped at small businesses daily, and 35.8% said they shopped at small businesses a few times a week. The majority of respondents said they shopped a few times a month.
Tips for Starting a Small Business
If you analyzed the data and decided that you’d like to move forward with starting a small business, here are some tips.
Learn Digital Marketing
Digital marketing is a crucial skill for today’s entrepreneurs. Business owners need to know how to let customers know they exist, as well as understand how to promote their businesses online. Having an understanding of copywriting and email marketing is necessary in order for a small business to become successful in today’s market.
Build Financial Management Skills
Most people aren’t taught how to manage money. And, if you didn’t go to business school, you might not inherently have the skills required to manage business finances, track inventory, manage payroll, and make financial projections about the future of your business.
The good news is, these are skills a business owner can learn. The better you understand your business finances, the more chance you have of making sound financial decisions to ensure the longevity of your business.
Focus on Customer Experience
Customers can often find items that cost less online or at big box stores, but customers enjoy shopping at small businesses for the experience. In order to be a success, focus on exceeding your customers’ expectations. Plan events that draw in the community. Offer services and perks that large businesses and big box stores cannot. If you make a customer feel welcome and like you care when they visit your small business, they are likely to come back again and again.
If you’re interested in becoming an entrepreneur and starting a small business, it’s important to do market research first. Take the time to understand your market and your community.
Starting a business is a significant endeavor that requires grit and perseverance. However, with the right planning, research, and skills you can develop along the way, it is possible to start a small business that will succeed and help your community thrive.
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