business successis impossible without a good plan. And in the case of retail storesthat 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 mapped out in my head?” Business plans can be so much more than just another action item. on your ever-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
Simplified inventory management
Use our easy-to-follow inventory management to streamline your processes and eliminate errors.
What are retail business plans used 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’re selling in a brick-and-mortar store or through an online store, you need to consider a combination of factors that many other businesses don’t. Think inventory, store supplies, procurement, and supply chains. And even more complex activities like 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 to put your business plan on paper.
Before Writing Your Retail Business Plan
But let’s pump the brakes for a second. It can be tempting to dive right in and start writing your business plan as soon as possible. But consider these suggestions before doing so.
Study your market first
“Without a market, a retail business cannot exist,” said Susan Smith, marketing manager at Velden Engineering. “One of the first things readers will look for when reading your business plan is proof of a healthy marketa unmet needsin the market and how your business is positioned to meet that need. Doing thorough market research before developing your business plan should be a top priority,” she said.
Understand your competitors
“Most industries become 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 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 bolster your business plan, suggests Michelle Ebbin, owner of the 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 doable route, you may also wish to explore product developmentintroducing new innovative products to existing customers.”
“There is also market developmentwhere you try to find new markets for your existing products and diversificationfor the introduction of new products in new markets,” she said. Ebbin believes that determining a clear growth strategy can increase retailers’ chances of winning over potential investors, who essentially want to know how you’ll grow your business once it’s up and running.
POINT: Accountants and financial advisors can help you prepare your retail business plan.
What to Include in Your Retail Business Plan
As for details, include those details.
Give an overview of the company
Give a detailed description of your retail business. You can mention your business structure, legal name, location, and the products or services you will be selling. Describe whether you will be selling in-store, online, or through different channels. Keep this section simple. Use easy to understand language.
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 gaming and streaming cameras for San Francisco teens within 18-24 months.”
You can also cover all your objectives regarding locations, product lines or online stores.
Showcase your experience in the industry
This section is more about you, the owner. Again, keep it brief, but say why you’re 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 (DTC) is also an option.
- All management positions in well-known national or regional retail companies
- Sales or lead generation goals you’ve already achieved
- Successful growth initiatives, such as new store openings.
Simply put, this is the section where you present 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 strategy. Coverage of some of the fundamentals of retail marketing, including your plans for the 4Ps of retail marketing. Here is a little reminder of what they are:
- Product: What you will sell and your Unique Selling Proposition (USP).
- Pricing:How much your products will cost and why you have chosen these price points.
- Place: Where you will sell your products (online, in-store or omnichannel).
- Promotion: How you will promote both your store and the products you will sell.
Again, this section doesn’t need to be too long or complex. If you want to dive into the details or provide a full description marketing plan-you can do this in an appendix at the end of the plan.
Financial strategy and forecasts
Nine times out of 10, this is what people reading your business plan will want to see the most.
“Ultimately, your business will be judged on its ability to generate profits,” said Will Cannon, CEO of Signaturely, an electronic signature software company. “Investors will want to see certain data related to your startup applications and revenue estimates, no matter how succinct and attractive your retail business plan is,” he said.
Consider including your:
- Estimated capital needs
- Profit and revenue model
- Estimated sales volume
- A calculation of the break-even point
- Balance sheet projections
- Cash projections.
Above all, anchor these figures in reason.
Detail the management structure
Explain your management setup. This will make things much easier to do throughout the early installation period. Everyone will understand where they are and you will know how you plan to manage 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.
Too many details
“Potential partners and investors won’t waste time poring over hundreds of pages of rambling nonsense,” said Nick Edwards, principal at snow finders, a UK ski holiday company. “Long blocks of text should be avoided, and instead visuals and graphics should be used to replace prose, with any exceptionally heavy content being appended as necessary.”
Bad financial planning
For example, some landlords take a percentage of sales as part of the rent. And it is common for the rent to increase every year. Your retail business plan must take into account rising expenses, taxes, and broader market influences.
Spelling and grammar
Remember the basics. Grammar and spelling errors show that you were not diligent in the planning process. And it can undermine how partners and potential investors perceive the plan.
How to strengthen your business plan
As you will have noticed, there are a few different audiences you need to keep in mind when writing your business plan. In most cases, there are three:
- Potential investors: Individuals or companies who wish to support your business with capital, in exchange for future profits or co-ownership.
- Potential business partners: Suppliers, brands and business partners who may 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 overstating your numbers or presenting things that are too difficult or impossible,” said Stacey Kane, business development manager at Merchant easy. “You want the investor who finds flaws in your plan to be the exception, not the norm. With that perspective, you can reinforce your view of what can be done with research and transparent results. Find ways to showing the value of your idea also makes them more likely to invest,” she said.
Finalize 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 writing your retail business plan on the back burner – 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 you mean business.
Lightspeed Commerce Inc. published this content on November 22, 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on November 22, 2021 11:13:23 AM UTC.