Ecommerce may be booming but opening and running successful shops and retail companies of the bricks-and-mortar variety is still a life goal for many.
If you’re planning to make that dream a reality, writing a thorough business plan should be at the top of your to-do list — here’s why.
What is a business plan?
Your business plan is essentially your company’s strategic blueprint. It explains what your business idea is and sets out your goals and how you will achieve them, while considering the environment you’ll operate in.
Typically, it’s the first proper step of getting your retail business off the ground and can be used to get investors, grants, loans or other funding for your company before you open your shop doors.
Something that can also help your planning is a Business Model Canvas. It is a handy tool to help you build out your business plan.
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Do independent shops really need a business plan?
The short answer is yes. Of course it’s possible to do well with a good idea and a bit of luck but you’re more likely to succeed with a solid business plan to help guide your decision-making. Researching your plan will also help you figure out if your products or services are financially viable and in demand before you launch. Here are three things to consider as part of your business planning process:
1. Location, location, location
For shops and retail companies, whether you’re opening a community greengrocer or an exclusive boutique, one of the most important aspects of your business model is your location. Pulling a plan together will encourage you to think about the most viable location for success, as well as the cost implications.
When creating your business plan, you’ll need to research your potential customers. Documenting who they are, how they behave and the circumstances in which they will shop with you will aid you in determining the stock you will carry and how to effectively promote your store to customers.
3. Pricing model
A big part of any business plan is the financial figures that are included. As part of the planning process, you should be doing detailed research on potential competitors and their prices as well as all the expenses that running your business will incur. This will help you determine the prices that you will charge for the products you sell.
What are the other benefits to having a business plan?
- It looks good to potential partners, investors, lenders and funding bodies, and if you want to apply for a business loan, you’ll most likely need a business plan.
- It will help you work out what your unique selling proposition is, identify threats and challenges, and come up with solutions and coping strategies.
- It will make you set short and long-term SMART goals, such as launching a new website within three months or opening a second shop in year three of trading.
- You can use it to benchmark your performance by comparing your company’s results and achievements with the goals set out in your plan.
How to write a business plan for your shop
Your business plan doesn’t have to be a boring document. Given some investors make their decision to provide funding to start-ups and existing firms based on the people as much as the business itself, your business plan should showcase your passion and personality.
However, certain bodies or individuals who can provide funding will expect you to include specific information. Putting your plan together using the following sections can help you make a strong case for securing the required finance:
- Executive summary
- Business overview
- Audience and market
- Products and services
As we’ve discussed, your business plan will be critical to you running a profitable shop, which is all the more reason to ensure that you are thorough in your approach. Here are some top tips for writing your plan:
It’s unlikely that you will be profitable straight away and sales may show steady growth rather than a massive spike. If your plan includes figures that seem unrealistic, you should justify them.
Accuracy is key
As your business plan will help you make decisions, it’s important the information you base those decisions on is correct. Double check everything. We have some great advice on how to get more accurate figures for your business plan.
As your plan will be used to help you manage your retail business and potentially be shared with others, it’s important to avoid waffle. You can always make use of appendices for supplementary information.
Want help with business plan for shops and retail companies?
Your accountant may be able to give you tips and ideas, or ask your bank if they have a small business adviser you could talk to. If you’re ready to start your research and writing, why not use an online template?
To help you out, we’ve created a business plan template specifically for shops and retail companies with physical stores. It’s free to download and takes you through the process step by step with detailed guidance notes.
Don’t forget that your plan should evolve with your business, so you should revisit and update it regularly. Good luck!
Business plan template for shops and retail companies
Want to create a business plan for your shop or retail company but not sure how to do it? Download our free and easy-to-use business plan template and you can get started.