A department store is a small neighbourhood store that provides all the basic household items. Are you interested in starting a department store in your area? If so, we’re here to help. The process of starting is not easy, and maintaining it is equally challenging. The following are some crucial things you need to consider before opening a department store:

1. A well-thought Business Plan 

Market changes are very challenging to keep up with. Without a well-thought-out business plan and strategy, no firm can sustain itself for an extended time. For instance, identifying the target market and the average income in the area where you want to serve is the first step to properly pricing your products. As well, you’ll need to determine how many employees your store will need for shipping, packing, and other things.

2. Get your Business Registered

After analyzing your business plan, the next step is to register your store. The necessary legal papers and registration can be completed once you have determined the size and scope of your business. Get an objective and accurate opinion from experts and ensure you have the right legal advice when it comes to registering a department store.

3. Documentation and Licensing

To start a department store, several types of licenses and documentation may be required, a few of which are mentioned below:

  • Identity Proof
  • Registered Office address proof
  • Address proof
  • FSSAI License – for food products
  • Shop and Establishment license
  • Fire Licence
  • Other Licences according to local regulatory laws

 4. Decide on a Location

Starting a business requires a good understanding of the importance of location. A good location can indeed help you succeed, but a bad one can also ensure failure. You should choose a location for your store that has low competition, is near a residence, got access to public transport and has a low rental cost. These factors are all important and must be considered.

5. Plan your Investments 

After deciding on your location, investment is the next step. You can either get a franchise for a department store or open your own. 

Consider these things before deciding on a franchise model for a departmental store:

  • An initial fee and ongoing royalties are paid to a franchisor when you purchase a franchise.
  • In return, the franchisee receives a trademark, ongoing support from the franchisor, and the right to use the franchisor’s business and sales methods.
  • There are other advantages to buying a franchise that people can’t get when starting a business from scratch on their own.

These are the things you need to know if you plan to open your departmental store:

  • Self-starting a department store is less expensive than buying a franchise.
  • Your investment depends on the location you choose, so pick wisely. 
  • Find distributors who offer quality products at reasonable prices.
  • Another important aspect of your business is maintaining a good relationship with your customers. 

6. Inventory Planning

You should make a list of the brands and items that you would like to have in your departmental store. Alternatively, if you prefer, you can go to all of the stores near you and make a list of everything they have in stock. Various inventory management apps are available for free which will make it easy for you to keep track of your inventory and reduce operational costs.

7. Contact the Local Suppliers

In every business, there are always intermediaries that link you to the manufacturer. Ideally, you must get in touch with direct suppliers to cut out the middleman. As a result, your profit margin increases and delivery time is also reduced. Choosing the right sourcing strategy is crucial to a store’s profitability. Make sure your store has a variety of products, but also consider your target audience’s needs.

8. Hiring and Staff Requirements

It is imperative to determine how many and what type of staff should be employed in a department store depending on the size of the store and the volume of business. Among the many positions required by the store are sales staff, billing staff, security staff, and inventory staff. There may even be a seasonal requirement for contractual staff during certain times of the year.

9. Competitor Research

It is a good idea to visit nearby department stores and supermarkets to get a feel for how operations and management are handled there. Consider taking key notes on how the store is laid out and which brands are the most often available in the store. It is important to research and look for new opportunities and ideas all the time.

10.  Marketing Strategy

For any business to achieve success, marketing is undoubtedly one of the most important activities it needs to carry out. Using direct and indirect marketing methods, print advertising, and social media marketing to engage the target audience and potential customers is crucial to the success of any business.

About YRC Consultants

We, at YRC, are always on the lookout for ways to ensure the success of our clients. SOPs, market research, business plans, and IT solutions are some of the most significant retail management consulting services we offer. As a service provider, we help small and big department stores eliminate their dependency on undefined ways of working by helping them become process-oriented enterprises from the inside out.


What is a Departmental Store?

In the world of retail, a department store is an establishment that sells a wide range of consumer goods, which are separated into different sections, with each section (“department”) focusing on a certain type of product. While some stores are part of a larger chain, others are independent. The check-out area in small department stores is near the front, while traditional high-end department stores include sales counters within each department.

What are the Requirements of a Successful Departmental Store?

For a department store to succeed, it’s important to have a solid business model, business strategy, market research, an effective inventory system, a competent staff, retail software that’s easy to use, standards of policy, competitor research, investment planning, location strategy and an excellent third-party vendor.

Is opening a departmental store profitable?

There is no doubt that the department store business is profitable in the long run. The fact that you can start on a smaller market will allow you to get a feel for market conditions and limit the chances of you failing. This will help you in identifying different ways to enhance your profits as you progress through the process.