Recently I was asked for help putting a business plan together. The client; a mature lady who wants to open a retail outlet in the heart of Gloucester City Centre.
The business owner knows what she wants to do and can see it in her minds eye but putting it down onto paper has proven challenging for her. Having your plan contained within your head is always likely to be problematic, goal posts move and memories fade.
In this instance, although no finance needs raising, my job is to help her consider all the things she is most likely to encounter before she invests a sizeable amount of money. The risks are high, there are no guarantees in business, but we should be informed as much as possible before we jump in.
That being said, there are still exciting opportunities within retail, rent and rate reductions are offered to attract businesses back onto the high street, it all sounds great but beware! Trading conditions in the high street are tough and the rampant rise of the internet and online shopping has stopped even the biggest firms in their tracks.
As a Trusted Advisor and being able to speak frankly with her, The client will need to hear some truths and really convince me that she has thought through the business as a whole, most importantly its continuous revenue stream and how it intends to bring customers through the door throughout the year. Her best interests and the long-term survival of this retail outlet are my top priorities in what are challenging times.
If you have written a business plan and about to invest large sums of time and money, before you take the leap of faith then it’s worth considering taking your plan to a business advisor who will challenge you about your plans, give you fresh insight, ideas and lots of helpful advice.
Here is a quick rundown of the main elements you will need in preparing your Retail Business Plan.
1. Exec Summary
Write a quick intro into the business, what does/will your business do? how did you arrive at this business idea? Write a summary of the business plan and their key objectives. Sometimes it can be helpful to split this into subsections such as the Objectives, Mission and Keys to Success to make it easier to read.
2. Company Analysis
Analyse your business and set out its key elements. Background information such as the legal name and structure, the location of the business, any goods or services offered, and an overview of customers and suppliers. Also explain a bit about the company’s history if it has any, how it operates, any goals, and a brief summary of company growth and profitability plans.
3. Industry Analysis and Trends
Do your homework and relay this as simply as possible! This could be with the use of graphs and charts. Business plans should be easy to read and someone with no knowledge of your trade should be able to understand the information you present, especially pertinent if you are looking to raise finance.
4. Products and Services
Provide a brief description of the main activities of your business. List the different ranges of products you sell or services you offer. How are these provided to the company and by whom? Do you have plans for growth? Are you going to be introducing any new product lines? Do you own a patent, copyright or trademark? if so; they should be added here.
You should also spell out how your product or service differs from the competition? how does it fill a gap in the market space and why will people be looking for your product or service? Basically, convey clearly and concisely why your business is a good investment.
5. Customer Analysis
Make it in-depth and give this section some careful consideration, going blindly into business without a clear target customer or customer segment in mind is not a good idea. Your business is likely to be in demand from certain segments so do your research and summarise it in this section.
Try to identify different groups of customers. e.g. you may sell to a certain segment of the general public, but also be able to agree contracts with organisations – these would be considered two different groups of customers.
6. Market Analysis
This section should include information about the industry and the overall outlook, size growth and outlook should also be included, who your target market is, the competition you face and how you intend to seat yourself amongst it all.
Stats should be included within this section, but a more detailed analysis should be included in the appendix. Lead times for products and services should also be included and any results from market research. A SWOT (strengths weakness, opportunities and threats analysis should also be completed here.
7. Competitive Analysis
It is important to analyse the competition, in doing this, it will allow you to track how your business compares in terms of product or service, the market share, customers, pricing, financial resources, any staffing, location, financial data and marketing methods.
Once you have completed the competitor analysis, you will be able to form a strategy and make the most of the opportunities that present themselves to you. You will also be able to deal with threats before they arise.
8. Marketing Strategy
Describe how customers will find out about your product/service, details of your pricing strategy, what methods or partnerships you will use to promote the business, provide details of target audience, medium chosen, costs and frequency. This section also gives you the opportunity to talk about your brand image and branding strategy.
9. Operations Plan
How will you run your business? Does your business require premises? If so, what are the costs involved and the current status of discussions with the landlord. Do you have a draft lease agreement for review? Do you or your business require any specialist training, licences, certificates or insurances to trade? (e.g. health & safety certificates, food hygiene, public liability insurance, trade qualifications, certificates from training courses). This section gives you the opportunity to really think about how your operation will run and the costs associated.
10. Management Plan
This section sets out what necessary human resources are required to run the retail business. It should give detail of any key management with copies of CV’s if available. A detailed write up of backgrounds should be offered, Investors will be assessing your abilities so make it good.
What plans do you have to man the shop? will it be open seven days a week? What sort of salaries are you looking to employ and what benefits will they receive? Any evidence required will need to be added in the Appendix section.
11. Financial Plan
Here is the important part. Ensure your numbers stack up!
Give close thought on the amount of capital your business requires, how you will use those funds? and project your future earnings. Start with a sales forecast and project your future sales for the next three years. Create balance sheets and cash flow statements. Don’t forget to factor in any assets and liabilities.
Ensure you breakdown all your costs for the first year and then annually for the next two years as a minimum. Finally, the “break even” analysis, so crucial to know where you are on your projected plan. The more detail you put into the financial section the better. Any supporting information is to be contained within the Appendix.
Once you have completed your business plan then check it thoroughly, ask someone not connected to you to review it for you before you proceed. Ideally someone with all round knowledge of the business world and good with numbers. Sometimes those closest to us want us to succeed no matter what the reality is. The intentions are honourable, but the outcomes can sometimes be catastrophic.
If you need assistance with coming up with ideas for your business or assistance in creating your Retail Business Plan, then please do contact me.