Business successis impossible without a good plan. And in the case of retail stores, that means putting time and effort into your retail business plan.
Now you might be thinking, “Why do I need a business plan, if I have it all planned in my head?” Business plans can be more than just another action item on your growing to-do list.
- The Purpose of a Retail Business Plan
- How a retail business plan differs from other business plans
- Before you start
- What to include in your plan
- Mistakes to avoid
- How to differentiate your plan
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What are retail business plans for?
They are planning and forecasting documents. Retail Business Plans explain your business model, who your customers are, and how you plan to take your store or online store from an idea to a profitable reality.
Why are retail business plans different?
Because retail businesses are different. You know that. Whether you are selling in a physical store or through an online store, you need to consider a combination of factors that many other businesses don’t. Think about inventory, store supplies, procurement, and supply chains. And even more complex activities such as order fulfillment, deliveries and customer returns.
You don’t need to write a tome that covers all of these areas, but they will tell you how you will put your business plan on paper.
Before you write your retail business plan
But let’s pump the brakes for a second. It might be tempting to go out there and start writing your business plan as soon as possible. But think about these suggestions before you do so.
First research your market
“Without a market, a retail business cannot exist,” said Susan Smith, director of marketing at Velden Engineering. “One of the first things readers will look for when reading your business plan is proof of a healthy market, a unmet needsin the market and how your business is positioned to meet this need. Conducting in-depth market research before developing your business plan should be a top priority, ”she said.
Understand your competition
“Most industries get oversaturated at this point, so investors want to know what sets you apart. What makes you unique. Do as much research on your competitors as you do on your own business“said Gabriel Dungan, CEO and Founder of Mattress Topper Company ViscoSoft. This will give you valuable insight into your own products and services.
Have a growth strategy
Identify a clear growth strategy to strengthen your business plan, suggests Michelle Ebbin, owner of an Australian clothing brand. JettProof. “Most companies focus on market penetrationwhere they sell current products to an already existing market, “Ebbin said.” While this is a possible avenue, you can also explore product developmentby presenting new innovative products to existing customers. “
“There is also market developmentwhere you are trying to find new markets for your existing products and diversificationto introduce new products into new markets, ”she said. Ebbin believes that determining a clear growth strategy can increase the chances of retailers convincing potential investors, who essentially want to know how you will grow your business once it is up and running.
TRICK: Accountants and financial advisors can help you prepare your retail business plan.
What to include in your retail business plan
As for the details, include those details.
Provide an overview of the company
Provide a high level description of your retail business. You can mention your business structure, legal name, location, and the products or services you sell. Describe whether you will be selling in-store, online, or through various channels. Keep this section simple. Use language that is easy to understand.
Explain your business goals
In this section, you should talk about what you plan to accomplish. It doesn’t have to be long or complex. And the goal doesn’t have to be huge either. For example:
“Our goal is to become the go-to provider of HD streaming and game cameras for San Francisco teens within 18 to 24 months.”
You can also cover all your goals regarding locations, product lines or online stores.
Showcase your experience in the industry
This section is more about you, the owner. Again, be brief, but say why you are the right person to take this retail business from idea to reality. Mention:
- Your specialty, such as brick and mortar, e-commerce, or both. Direct to Consumer Selling (DTC) is also an option.
- Any managerial position in well-known national or regional retail companies
- Sales or lead generation goals you’ve already set
- Successful growth initiatives, such as new store openings.
Simply put, this is the section where you show your personal and professional motivation to move the business forward.
Define your marketing strategy
This is where you talk about your store’s image and branding. Coverage of some of the fundamentals of retail marketing including your plans for the 4Ps of retail marketing. Here’s a quick reminder of what they are:
- Product: What you are going to sell and your Unique Selling Proposition (USP).
- Price :How much will your products cost and why you chose these price points.
- Place: Where you will sell your products (online, in-store or omnichannel).
- Promotion: How you are going to promote both your store and the products you are going to sell.
Again, this section doesn’t have to be too long or complex. If you want to dive into the details or provide a marketing plan– you can do this in an annex at the end of the plan.
Financial strategy and forecast
Nine times out of 10, that’s what people who read your business plan will want to see the most.
“Ultimately, your business will be judged on its ability to generate profit,” said Will Cannon, CEO of Signature, an electronic signature software company. “Investors will want to see data related to your startup requests and income estimates, no matter how succinct and attractive your retail business plan is,” he said.
Consider including your:
- Estimated capital requirements
- Profit and revenue model
- Estimated sales volume
- A calculation of the breakeven point
- Balance sheet projections
- Cash flow projections.
Above all, base these numbers on reason.
Detail the management structure
Explain your management configuration. This will make things much easier throughout the first installation period. Everyone will understand where they stand and you will know how you intend to deal with people on a daily basis. This strategy should include information such as how many team members you will hire, their roles, and how those roles fit into the larger plan.
Avoid these common mistakes
A good business plan is as much about what you leave out as what you put in it.
Too many details
“Potential partners and investors won’t waste time poring over hundreds of pages of rambling nonsense,” said Nick Edwards, director of Snow detectors, a UK ski holiday business. Long blocks of text should be avoided, and instead, visuals and graphics should be used to replace prose, with exceptionally heavy content being appended as necessary. “
Poor financial planning
For example, some landlords take a percentage of sales into the rent. And it is common for the rent to go up every year. Your retail business plan should take into account growing spending, taxes, and broader market influences.
Spelling and grammar
Remember the basics. Grammar and spelling mistakes show that you haven’t been diligent in the planning process. And that can undermine the way partners and potential investors view the plan.
How to strengthen your business plan
As you have already noticed, there are a few different audiences that you should keep in mind when writing your business plan. In most cases, there are three:
- Potential investors: People or businesses who want to support your business with capital, in return for future profits or partial ownership.
- Potential business partners: Suppliers, brands and business partners who want to provide goods or services to your business, or even help you run the entire show.
- Banks, lenders and insurers: Financial institutions you may need for credit cards, overdrafts, loans, or revolving credit facilities.
“Beware of exaggerating your numbers or exposing things that are too difficult or impossible,” said Stacey Kane, business development manager at Easy merchant. “You want the investor who finds flaws in your plan to be the exception, not the norm. From this perspective, you can strengthen your vision of what can be done with research and transparent results. Finding ways to show how valuable your idea is will also help make them more likely to invest, ”she said.
Complete your retail business plan
Done well, business plans are more than a helpful written guide to your business strategy. They are a resource for attracting future business partners, and even a basis for obtaining external financing. Don’t put the writing of your business plan on the back burner for too long, it could be one of the first stepping stones to your own thriving retail business.
Ready to write your retail business plan?Talk to a Lightspeed product expertto find out how the right point of sale technology can help you show investors and partners that you are serious.
Lightspeed Commerce Inc. published this content on 22 November 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on November 22, 2021 11:13:23 AM UTC.