Posted on: 26 April 2018
Writing a shop business plan is one of the first steps prospective retailers should take before beginning to trade. Should retail ventures, for instance, require funding, a business plan acts as a shop window for prospective investors/lenders as it provides information to understand the company’s vision and how they plan to get there.
Each section of a retail business plan is equally important. For instance, adding a marketing strategy to your plan is an opportunity to highlight how you plan to cut through your market, while a “Company Summary” offers the chance to define the legal aspects of your business. As such, it is important for prospective companies to understand what is expected in a retail business plan, in order for it to be successful.
Here are some of the essential elements that should be included in a retail business plan.
The Executive Summary is the first, and an important, part of a retail store business plan. Within the Executive Summary, businesses should summarise the shop business plan and their key objectives. This can be split into subsections, such as “Objectives”, “Mission” and “Keys to Success”, to make the information easier to read. For the best chance of investment, it is a good idea to grab the reader’s attention within the first few sentences.
This is the section where prospective companies provide an overview of the key elements of their business. This should include legal structure, legal name, location, good or services offered, and an overview of customers and suppliers. Here, you are given the opportunity to explain the company’s history, how it operates, any company goals, as well as a brief summary of company growth (including any profitability plans).
Products and Services
This section simply describes the products and services on offer, how they are provided to the company, who the vendors are, timelines for future products, and any plans for future growth of product lines. Any patents, copyrights and trademarks should also be added here. When describing products and services, it is a good idea to use simple terms, ensuring any reader – whether knowledgeable of your industry or not - can easily understand it.
It is also a good idea to mention how the company’s products and services will differ from the competition, and how it fills a gap in the market. Here it is a good opportunity to further discuss why customers will seek the business’s product/services and, ultimately, why it is a good investment.
This section summarises what is happening in your respective market, including the company’s target customer segments. Historical, current and projected marketing data of products and services should be highlighted here, along with an evaluation of competitors. Industry statistics should also be added to reinforce points discussed in this section.
How do you plan on marketing your product(s)? This part of your retail business plan is for detailing how it will penetrate its target market. An overview of the company’s pricing strategy, along with current and potential marketing partnerships, will strengthen your shop business plan. This section provides an opportunity to discuss the company’s desired brand image and branding strategy.
This section explains how a prospective retail business has the necessary human resources to be successful. It should highlight key management personnel and their backgrounds, how the shop will be staffed, and any personnel compensation and benefits they will or currently receive. For much of the Management Plan, evidence will need to be shown to back up the statements. This will need to be added to the Appendix section, which is at the end of the retail business plan.
The Financial Plan section of your business plan should detail the company’s revenue and profitability model. This should assess the amount of capital the business needs, any proposed use of funds, and expected future earnings. Break-even analysis, sales forecasts, balance sheets and cash flow statements take up a large chunk of this section. Here you should give monthly breakdowns of the business’s financials for the first year, and then annually for the next two to five years. The more detail you put into this section, the better chance you have of making your retail business plan stand out.
To finish your business plan, you should add an appendix. This section should include relevant information which supplements the details outlined in the retail shop business plan. This might include visuals, such as charts, graphs and product illustrations; official documents, such as licences, patents, and contracts with suppliers; financial records, such as credit history; and personnel records, such as team member resumes, accountant’s contact details, etc. Appendixes can be lengthy, so a separate table of contents may be required to make the information digestible.
Looking for more business plan guidance? Take a look at these useful external resources:
- Do You Really Need a Business Plan?
- Don't Forget About Marketing
- Business Plan Templates
- Example Business Plans
Protecting your retail business
As with any company, it’s important to be insured. This will help to protect your greatest assets against liabilities such as accidents or business interruptions. With Premier BusinessCare’s retail shop insurance, businesses can find a policy that is tailored to their size and circumstances.
Head over to the Premier BusinessCare’s shop insurance page for more information.
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