5 Obstacles Faced by Small Retail Businesses

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Small retail business

Owning a small retail business can be difficult. One can likely feel it is impossible to keep up with consumer demands because of the increasing competition in the online business sector. Small retailers have to face financing pressure and marketing challenges.

A small retail business is a set of entrepreneurial activities that involve the sale of goods directly to the customer. Small Retail business can take place in a variety of forms, for example, in personal sales, trade-in specially designated areas, or through communications (Internet, TV). Check out America's Best Bookkeepers

A small retailer should be able to perform the following functions.

  • To organize active commodity circulation to points of sales.
  • Form stocks of products and maintain them at the required level.
  • Produce trade and technological operations with the goods.
  • Stimulate sales through marketing activities.
  • Investigate the demand for a particular product and analyze the level of the current market supply. The market price depends on the relationship between supply and demand.
  • Analyze the effectiveness of various forms of trade and focus on the most effective.
  • Organize a service that facilitates the buyer’s purchase of goods (for example, accepting applications by phone, credit offers).
  • Improve the methods of trade and regularly improve professionals’ skills working directly with the buyer (through training, master classes). Check out America's Best Bookkeepers

Problems Faced by Small Retail Businesses

The retail sector is vital for the country’s economy, represented by a large number of enterprises, mainly small and medium-sized businesses. Small retail businesses usually face many problems that are difficult to solve alone. Starting with the location and attracting the buyer to it and ending with the issues of personnel management. The owners of small retail businesses sometimes do not have the critical information they need to carry out commercial activities and planning for long-term retail business development.

If you own a small retail business, you must be struggling with many challenges and consequences. The top five problems that a retail small business owner consistently face are:

  • 40% of unsold goods occupy an essential place in the warehouse of small retail businesses.
  • The funds invested in unsold goods settle in the form of unclaimed stuff.
  • The market associated with clothing and footwear is dynamic, which means it focuses on changing fashion trends. The value of a fashionable product falls with each month, often the term “peak” value is calculated in weeks. As a consequence, the small retail business faces a progressive increase in losses.
  • The mechanisms of discount and sales systems are still a mystery for the small retail businessman.
  • “Floating” quantity of the goods in the warehouse, as a result of imperfect accounting systems, leads to bookkeeping’s impossibility for “conserved” money. Check out America's Best Bookkeepers


In addition to this, the inability to cope with problems prevents retail outlets of small retail businesses such as clothing and footwear from pursuing a more flexible and efficient assortment policy. The overcrowded warehouse and lack of available funds in the small retail stores are some of the most common problems. Customer loyalty largely depends on the constant presentation of the current fashion collections. The small retailers are unable to afford them usually.


Another problem in small retail businesses is the lack of attention to regular customers. The modern consumer focuses on the quality of service and the personal attention paid to him. The current urban environment, depersonalized and indifferent, needs compensation. A good entrepreneur provides such benefits as an individual approach to every potential customer.

The owners of the small retail business should be able to maintain a good sense of the products that they have in stock. They must know where their inventory is low and how they can improve it. Due to limited funds and space, keeping the inventory well-organized and well-stocked can be difficult for the retail small business owners.

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