How to Write a Brilliant Retail Business Plan for Your Store
Every thriving startup business has a robust retail business plan to help them grow and scale operations. It is one of the first details many bank loan funding partners and investors ask for when requesting information about your business, whether you are a startup or an established company. What benefit do you get from developing a business plan, you ask? A business plan gives the reader a view of your short-term goals (the next 6-12 months), the longer-term growth goals, and the operational strategies, funding, and financial requirements expected to achieve those objectives.
We have summarized what you should add to your retail business plan to support you in writing your business plan. If you use these recommendations, you will be on your way to forming a solid organization for your thriving retail business.
Give an overview of your company
Your company overview section is one of the most critical fragments of your retail business plan. This segment must show how you desire people to visualize your business. It should include the brand guidelines, logo design, vision/ mission statement, proprietorship and business legal structure, design, and layout. List the leadership members for the team and include any company ownership/ % shares. If you struggle with the value proposition, reflect on a unique retail shop you love. What aspects of that local retail business did you enjoy, and what is their position that you would like to include within your retail business plan?
Create an organizational structure
Suppose you are going to operate a thriving retail business. In that case, the bank and funding partners will want to know your entity status, company type, entity ownership, formation date, and legal structure. Will you operate as a nonprofit, self-employed, sole trader, partnership, private limited, or limited liability company? Choosing a business entity determines leadership responsibilities, business model profitability, and tax declaration requirements.
Additionally, you must include your hiring plans and how many team members your retail shop employs, whether on a full-time, part-time, or contract basis. Who will serve on the management team? Who will collaborate with the leadership? How will the unit operate daily (i.e., with daily team huddles, weekly cash flow reviews, and monthly development plans)? What ongoing governance oversight is needed to support the company's operational structure?
Describe your business model, products, and services
Your business model is how you create income. Most of your readers, especially banks and investor partners, want to know what type of retail business you operate, what customers will buy, and what additional services you will offer at your retail store. Within your retail business plan, you should provide comprehensive details on the items you will be retailing and how you expect customers to purchase the products (i.e., debit card, gift cards, buy now pay later Klarna).
For example, if it is a pet store, include whether there will be food, beds, toys, accessories, and other onsite retail services (i.e., grooming suite, vets, doggy daycare, product delivery to home service). Will customers be able to buy medicines and larger bulk pet supplies at your store? What range of products will you have in stock (i.e., Mars Pedigree, bird food)? What about farming animals' feed supply and hay? You aim to show that you have a good grasp of your retail business product offering and can comfortably describe your store layout and product catalog so the reader gets an idea of your retail business.
In addition, you should ideally provide the reader with details of strategic partners, local suppliers, wholesale companies, and initial contract conditions that you will need to meet your retail business shelf fulfillment targets. Will your items be sourced locally or shipped from abroad? Do they require any holding period before you can sell the goods? How will you control stock, waste, and damage? What is the plan for any short-shelf-life product or slow sellers – will you sell at a discount price? For pricing strategy overall, you must have a good grasp of the costs to purchase the goods and the retail price so you can describe your margins. How much will the products cost? Will you offer promotional discounts and seasonal sales? Will you be offering a retail store membership and loyalty scheme? Will you offer customers at-home delivery or online ordering for store pickup service?
It is critical that within your financial plan, you show your expected sales forecast to detail your daily/ monthly/ annual revenues.
Include market research for the target market, competition, and industry analysis
A retail business plan market analysis investigates your primary sector, ideal customers, direct competition, and geographical scope (i.e., location). All these elements should be understood to demonstrate sufficient market demand for your retail business and reassure banks and investor funding partners that your business proposal fits within the local economic landscape and that your retail business is an attractive proposition.
Knowing your target market and ideal customers: We know from talking to our clients that most retail business owners say that their target customer is everyone locally, and in this retail business plan example, it would be everyone who owns a pet, but there is probably a way to reduce the scope to more specific to appeal to a discrete group of customers that you want to attract to your business proposition. However, defining your customers and desired target market makes it much simpler to see who your audience is and how to best market your company to that audience. When investigating and evaluating your ideal customers, it is essential to determine your target market customer's attributes and desire to buy (so their habits). You want to gather data to help you to describe your customer demographics (age, gender, marital status, qualifications, job level) and purchasing habits (local store, weekly, monthly, likes to browse, sales shopper, bulk buyer).
Industry analysis and sub-segment: An industry analysis is a qualitative and quantitative evaluation of your retail market. It looks at the industry market size, upcoming retail trends and opportunities, what is selling and not, and how you may want to differentiate your business model (i.e., cheap, bargain bulk, luxury goods). As you grasp the industry overview, you can reduce the information further to show how different products and categories will benefit your retail business. Taking the insights from the customer analysis, how will you develop the product mix to suit the industry trends (i.e., organic, plant-based foods)? How will you leverage different selling channels (social media, website, in-store POS for wholesale orders) to demonstrate the profitability and success metrics to funding partners?
Competitor analysis: a good retail business plan will include a competitor analysis. At a minimum, you would want to review two competitors to see how your business fits the market demand. These could be direct (other pet stores) or non-direct (supermarkets selling similar products). When analyzing your target retail market and location, research which of your competitors has the most significant market share, how close competitor retailers are to your retail location, and what are competitive advantages your company brand has over these competitors.
SWOT analysis: Another good idea is to include a SWOT analysis. This strategy tool helps you review your internal capabilities, strengths and weaknesses, and any external opportunities and threats your company can address. As you include the SWOT analysis in your retail business plan, it will help you to reflect on your focus points, prioritize your strengths, and mitigate against weaknesses and external threats (i.e., cost of goods, competition) while demonstrating the growth potential with the opportunities (partnership with specific brands, new locations)
Evaluate marketing, pricing, and sales
Here, we show how you market your services to customers and develop sales activities for your retail business plan. Typically, you will include a situational analysis of your current state, marketing goals, retail marketing strategy, and tactics. You want a positioning statement explaining how you want your customers and the broader network to recognize your retail business and brand. For your positioning statement, describe how your retail shop differs from key market players, what customers will enjoy about your retail business, how the pricing will work, how unique your category is, how your products and services are differentiated from the competition, and any persuasive rationale why your retail business is the best place for your target customers to shop.
You would want to know the activities you will complete for your marketing plan, generally over a month. So, it may work for you to create an annual plan with monthly promotional activities, which you can connect with your advertising, direct mail campaigns, and in-store promotions. For example, before summer, you want to push on medication for 'ticks' and cooling mats.
Additionally, you want to include which sales activities you will use to operate your retail business (i.e., traditional checkout, instore POS, order online) and promotional channels, which will likely include various digital channels such as a store website, Facebook/Instagram social media platforms, direct mail vouchers, instore rewards and membership loyalty programs (i.e., exclusive promotional events, reward points, free products, delivery services).
Define operating structure
When you start your retail business, how the business operations will run is essential, as it helps fuel your growth plans. Therefore, assessing several local retailers is worthwhile to help determine a custom strategy for your retail business and how customers complete their journey around your store. After all, changing the store planogram becomes much more complex once the shelves and stock are in place.
Supply chain management: Within this aspect, you will forecast, procure, store, and manage your inventory management. Ensuring your supply chain runs smoothly is the best way to ensure profits. Incorporate how you will control, order, deliver and address inventory needs, store that inventory in-store or offsite at a warehouse, and manage the product portfolio to ensure you have no empty shelves or redundant products for sale, which helps to ensure you never run out of products or overpay for them. How will you manage the product development lifecycle? How will you introduce new stock-keeping units (SKUs) to your portfolio? How will you keep the store secure?
Technology: This is an essential part of a retail business. You can do everything manually or leverage technology solutions to streamline your day-to-day operations, from customer relationship (CRM), stock ordering, accounting software (i.e., QuickBooks, Xero, Sage), and customer payments to inventory management.
Data Security: As a retail business, a plethora of data will be exchanged between your store, suppliers, and customers. Therefore, ensuring you have sufficient data stored securely and compliant with your market legislation (i.e., GDPR) is crucial.
Provide a financial plan
Your financial plan helps banks and investors appreciate how your company will make money to realize its growth plans and future goals. For your retail shop, you must complete a thorough financial analysis by analyzing your startup budget needs, ongoing operational expenses, projected sales forecast, salary costs, funding options, break-even point, cash flow needs, and projected profit and loss. A good grasp of your cash flow helps you balance your inventory and staffing needs with available funds.
When analyzing your operational costs, you should consider all aspects of operating your retail store successfully. That includes all resources, inventory, marketing materials, staff uniforms, security, website, supporting technology (i.e., CRM, POS, Email, stock control), and ongoing store maintenance costs. Banks and funding partners would like to know how much your retail store will cost upfront and when you will reach a point demonstrating a return on investment (ROI) and are comfortable with any debt repayment plans (i.e., loans).
Your financial plan is typically created in Microsoft Excel, or you can use business planning software like Liveplan. As a minimum 24-month cash flow forecast, some banks and investors may require up to five years of forecast projections. So, checking with your funding partners or the bank's website first is always worthwhile to develop a robust forecast.
How to Write a Retail Business Plan
Controlling a business is no easy feat, but Noirwolf is here to help write your retail business plan. We have an expert team of UK-based business consultants with all the knowledge and proficiency you need to start, control, and grow your retail business, whether selling in person, online, or both. And we have streamlined our business planning, helping you save money and time and making decisions more straightforward. So, you can return to doing the work you love and focus on whatever is next for your retail business growth plans. See how Noirwolf business plan consultants work.
Feel free to contact the team via email - enquiries@noirwolf.com, and we can schedule a call to discuss your business plan project.
We look forward to talking to you soon!