Retail business plan: how to write a business plan for a retail store
Creating a business plan is a daunting prospect, but don’t be afraid – we’ve written this helpful guide to get you started
Putting together a business plan can be intimidating, but having one in place will help to keep you on the right track. There’s a lot to consider, which is why we’re here to guide you through the process.
Once you have a business plan, you’ll be able to see whether your concept is feasible, and whether your great idea is the right career choice for you. You’ll also be arming yourself with the information you need to apply for business loans and other additional funding in the future.
There’s no denying that writing a business plan will take time and attention, but you can use the sections in this guide to help you create one to be proud of. We’ve also got some hints and tips from successful retail business owners to help you get on your way.
Retail business plan template UK: what you need
According to Karen Whybro, owner of bridal store Rock the Frock, “A good business plan will be a working document. It’s not enough to simply write one and put it in a drawer to be forgotten about.” Keep this in mind when you’re putting yours together.
The executive summary serves two purposes. Firstly, it allows you to lay out all the key points you’re going to address in your business plan. Secondly, it gives you the chance to hook your reader, which is especially important if you’re wanting investment or a business loan.
Make sure you include your objectives, mission, and keys to success in your opening few paragraphs. Someone who’s done this really well is the owner of Cicano Stylez, a US-based business.
Below is an extract from its business plan. We’ve highlighted where the owner has mentioned objectives, mission, and keys to success.
Once you’ve lured your reader in with strong opening paragraphs, you’ll need to create subsections that list your objectives, mission, and keys to success in more detail.
Your business analysis section should cover your business model and structure, and research on your competitive scene, and target market.
When you’re analysing your industry, make sure you include stats that justify why opening your retail business is a viable option. You should also look to include stats that prove your market is growing – or at least stable – and then justify why there’s a gap for your business.
You can do this by stating competitor brands and their market share, then explaining how your business is going to claim some of that share.
An example of this comes from Flyleaf Books, which sells second hand books:
Target market research is also an imperative part of your business analysis section. You can’t begin to think about your shop’s branding or marketing campaigns without knowing who you’re reaching out to.
As Mayna McIntosh, founder of specialist fashion shop Hope, says: “It’s important to conduct thorough and in-depth market research on your core target consumers. Find out what they read, where they shop, [and] how much they spend on outgoings.”
This is key to proving that your business idea is going to be a success. Without this stage, you won’t know where to market your business, how to brand your business, or whether there will be enough of a demand for your products in your area.
While you should be able to get a fair amount of information from desk research, heading to the high street and asking people to fill out questionnaires – or even setting up a temporary pop-up stall – will help towards conducting thorough marketing research.
Brand image and brand strategy are an integral part of your overall marketing strategy, so make sure you start this section off by explaining how your branding is going to appeal to your target audience.
You may want to state which design agencies you plan to work with to create your branding, and the costs involved.
After this section, you should tell your readers exactly how you intend to raise brand awareness. Erica Wolfe-Murray, a leading business expert and founder of Lola Media, advises: “A really good marketing plan has an inventive combination of both digital and real world activity.”
So make sure you research both digital and traditional marketing channels, and get an idea of how much different marketing campaigns could cost you.
On creating a digital plan, Wolfe-Murray advises:
When thinking about which marketing campaigns to run, it’s always a good idea to refer back to your target audience. You may want to look at how your audience interacts with social media, and look at the success of marketing campaigns carried out by similar retail businesses.
Products and services
Use this section to explain the nature of your shop. Tell the reader what products you plan to sell, and why you’re inspired to sell them. Make sure you explain how these products set your shop apart from others in your area.
If you are looking for investment, this is a really good opportunity to sell your product. Explain why the products you stock represent a great investment, and include any stats or research to back up your points.
In addition to naming the products that you’re stocking, you should also provide your reader with information on your suppliers. The Prince’s Trust, a charity that helps unemployed young people up to the age of 30, has a useful template that you could use:
If you’re planning on selling your own inventions or handmade products, you should include any patent or copyright information.
You may also want to include a section on your plans for future growth. For example, will you expand your range, or start using additional suppliers after a certain time period?
Management plan (i.e. recruitment and staff)
Your shop won’t be successful if it doesn’t have the right human resources. This is why you need to convince the reader that you have the skills to manage your shop, or explain how you’re going to go about employing a manager who does have the skills.
Start this section off by selling yourself. List all of your relevant qualifications, and explain how your experience has helped you to gain the skills you need to start a shop. This could be experience in management, specific leadership training, and even interview and hiring experience.
If you already have a manager in mind other than yourself, don’t hold back on writing down all of their relevant qualifications and experience, too.
Next, think about how you’re going to recruit potential shop assistants. It may be that you’ll sign up to the government’s apprenticeship scheme, or perhaps you have the recruitment experience to know who’ll make a good hire and who won’t.
Include CVs and any other qualification certificates in the business plan appendix.
Lastly, you’ll need to state any personnel compensation and benefits that staff will receive. This includes:
- Guaranteed pay
- Performance-based pay (commission or bonus)
- Pay supplementations, such as paid time off, insurances, and company vehicles
- Stock or pseudo stock options
There’s lots to think about here, so you may want to use a checklist to ensure you’ve covered all bases.
First of all, you’ll need to show that you’ve assessed how much capital the business needs to get off the ground. You’ll want to show how you’re going to use those funds, and clearly explain what potential investors will get from lending you their cash.
This means you’ll need to include a table that lists the costs of all of the equipment you need to purchase, such as shelving, racks, and an EPOS system.
You’ll then need sections that cover the costs of:
Once you’ve done that, it’s down to the figures. You should include:
A sales forecast
In addition to inputting all of your figures into a sales forecast table, you may wish to show your forecast in graph form – this is a good way to draw your readers’ eye to the good stuff.
Profit and loss statements
If you have been trading for a while, include any profit and loss statements, as this will give any potential investors an idea of the financial health of your company.
Working out your cashflow forecast for every element of your business can be a fairly hefty process, but to make things easier, you can split each element into different tables. We’ve compiled a page that’s dedicated to helping you work out your cashflow forecast.
You’ve officially broken even when you’ve produced enough revenue every month to cover your fixed and variable costs. There are lots of factors that you need to include to work out whether you’re breaking even or not, so we’ve dedicated an entire page to help you.
Personal survival budget
A personal survival budget helps you to keep an eye on your personal outgoings. This means you’ll know exactly how much money you’ll have left each month to inject into your business if required.
Don’t worry… it does get easier
If you choose to invest in an EPOS system, you’ll have all the accounting software you need to make sifting through your finances a comparative breeze. EPOS systems integrate with bookkeeping apps such as Quickbooks, meaning you can set up auto-generated financial reports.
Why not head over to our dedicated small business EPOS system page to discover which system is best for your business?
Pricing a shop
Before you put together the financial forecast of your business plan, you need to decide on the costs of your goods.
Pricing a shop is a delicate balance between instilling a sense of value and getting the most out of your profit margin.
If you can’t find that balance, investigating competitor pricing is a good place to start. Just make sure that you don’t undervalue your products, especially if you want your audience to perceive your business as high end. Equally, don’t scare your customers away with over-inflated price tags.
Another way to work out your pricing is to refer back to your target market research. For example, if your audience is typically younger, you’ll want to ensure your pricing is suitable for young people’s pockets.
And don't forget to consider VAT when pricing a shop. As Whybro states, “VAT is always a headache, but definitely always worth preparing for when you start out. Putting money aside for your VAT bill is a boring, but essential part of managing cashflow.”
VAT is typically 20%, although some goods – such as children’s safety products – typically have a reduced VAT rate of 5%.
Why have a business plan?
Every business needs a direction. Creating a business plan won’t just help you to clarify the direction you want to take your business – it’ll help you to remain on the right track, too.
Not only that, but a business plan is vital if you want to get investors on board in the future. The first thing they’ll do is look through your business plan – firstly to ensure you’re worth investing in, and secondly to ensure your business is worth investing in.
But for all the sincerity of a business plan, it shouldn’t be rigid. While goals are a necessary feature of any plan, as John Machon, founder of Re:sure Security says: “You need to make sure that you have the ability to stay adaptable and pivot into new areas if you wanted to, while following a structure.”
Retail business planning: a summary
Although a business plan will take time and attention to write, there’s no denying how hugely beneficial they can be for anyone looking to start a retail business.
While not the most straightforward document to write, there’s heaps of advice, templates, and example business plans on the internet to help you.
In fact, in addition to this page, we’ve partnered with Start Up Loans to provide prospective new business owners with a business plan template to help you get started on your journey.