Retail business plan tips: What do you need?
Startups takes a look at creating a business plan for opening a retail store
4. Your retail business plan
Writing a retail business plan is an in-depth process that requires a lot of time and focus. But it’s certainly worth the hours you put in, as having a comprehensive, forward-looking plan together will benefit you when speaking to investors and provide a blueprint for growing your business.
Remember, while a business plan should be thorough it should also be succinctly-written and easy to read. Be careful not to ramble, and don’t assume that the reader has the same level of technical knowledge as you do – try to briefly explain any niche terminology that you use.
The whole process becomes a little less daunting when you break the plan down into sections.
Try following this plan:
- Executive summary: First, provide a succinct introduction to your business and an overview of the business plan, highlighting the key points you’re going to address. This summary is arguably the most important section of your business plan because it has to interest the reader enough to compel them to keep reading.
- Your concept and products: Explain the nature of your shop, telling the reader what products you’ll be selling, how you’re going to sell them and why you were inspired to sell them. Be clear about your shop’s USPs (unique selling points) here.
- Business model and business structure: State the type of business you’ll be setting up and briefly explain why.
- The market: What condition is the market in currently, both in your local area and industry-wide? Who are your competitors? How will your business sit within the market and how will it compete?
- Your target market: Who’ll be shopping with you? Explain who your target customers are, including their age, their gender (if relevant), where they live and their income. Tell the reader why and how your store will appeal to this type of person.
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Running the business
- Marketing strategy: Explain how exactly your business is going to attract your target customer in a comprehensive marketing plan. Discuss the channels you’ll use to promote your store (both before and after it opens), and your branding strategy and how it will fit in to this (see Section 9).
- Management plan: Write an overview of yourself – including your skills and experience – and the team you have hired or plan to hire (see Section 8). Explain how the team will operate.
- Design: Include some visuals – whether sketches, graphics or mood boards – which give an indication of what your shop’s interior will look like.
- Location: While you may not have settled on your starting location just yet, share your shortlist and explain why each place would be conducive to your success.
- Financials: This is a key section, particularly if you’re looking to secure capital from investors. It should include: a profit and loss statement covering the first three to five years of operations; sales forecasts and cashflow forecasts on a monthly basis for the first year and then an annual basis for the next two to five; a break-even analysis; and a capital requirements budget which outlines the finance your business will need and what you propose to use it for. McIntosh says: “If you are looking for investment, you must make it crystal clear to third party investors what’s in it for them – in a clear and concise way!”
In order to put accurate financial forecasts and analyses together, you’ll need to know your production costs, pricing, profit margins and overheads inside out.
You can download a free business plan template here.
It’s a good idea to keep updating your business plan as you go – as Whybro suggests: