Developing an organized and strategic retail business plan can be a difficult task for new owners. But when the success of your business depends on the quality of this planning document, you can’t skimp on the details.
Of course, building a successful retail business doesn’t happen overnight. For this reason, careful planning and preparation are paramount. However, for many first-time business owners, finding the time to prepare a proper retail business plan is easier said than done. Beyond day-to-day requirements, there are so many other business-related tasks that new business owners are responsible for.
Thankfully, we’ve made the process easier for you. If you don’t know where to start, check out our comprehensive business plan build checklist.
How to Create a Great Retail Business Plan in 6 Simple Steps
Who is a business plan written for anyway? What is its purpose? A traditional business plan is a comprehensive document that outlines the goals of your business, the methods you’ll use to reach those goals, and the time frame for achieving those goals.
The goal is to create an effective strategy for the growth of your retail business. Whoever will have a stake in the business will refer to this document, including banks, investors, partners, and more official roles, so it must be clear and thorough.
1. Write an Executive Summary
An executive summary is a snapshot of your business plan as a whole. In this section, you should include a company profile and a clear description of your target goals. Dave Lavinsky, the president of GrowThink, claims that “[t]he most important part of an executive summary is the first paragraph that clearly explains what the company does,” said Eric Marowitz in an interview with Inc.
To get started, consider the following questions:
- How would you describe your business in one sentence?
- Who is your competition?
- Which market(s) are you trying to enter?
- What is your vision for the future growth of your business?
- What are your financial needs?
The best advice for this section is simple: write it last. Sometimes, like other professional documents, writing this introductory section may be easier after the bulk of the business plan is already outlined.
Whichever order you choose to write your business plan, just remember that an executive summary can pull in further or completely lose your audience’s attention with the first page. Make sure your executive summary is memorable, concise, and accurate.
2. Refine Your Business Description and Goals
Provide detailed information about your business by writing a description and goals document. Explain the problems your business will solve and the people you plan to serve. Explain the competitive advantages that will make your business a success. Use your business description to highlight your unique strengths and market edge.
- What makes your business unique compared to competitors?
- Are there experts on your team?
- Have you found the perfect location for your store?
Ensure this section of your business plan includes clearly-defined target market data and tangible future milestones. At one glance, the reader should be able to understand the direction your business is going and how you’ll operate differently than others.
3. Perform Marketing Analysis and Create a Strategy
Developing a surefire marketing strategy for your new retail business comes from meticulous marketing research and analysis. A business plan marketing strategy should state your business mission, including Key Performance Indicators (KPIs). KPIs are measurable values that demonstrate how effectively a business reaches its goals.
Once you’ve identified those KPIs, next identify your buyer personas. Who are your customers, and what do they need from your business? Buyer personas can then help you describe which content marketing initiatives and strategies your business will use to reach those customer personas.
Next, define your marketing budget, taking into account your competition as well as marketing initiatives that aren’t possible until down the road. Questions to consider:
- Demographics and Segmentation
- Target Market
- Market Need
- Barriers to Entry
The objectives of the market analysis section of a business plan are to show investors that you know your market and that it is large enough and vibrant enough to build a sustainable business. Overall, your marketing plan within your business plan should give readers a clear picture of how your retail business will market its products to customers.
4. Define Your Products and Services
Clearly define what your product or service is, as well as who is responsible for selling, marketing, or servicing your products or services. What is your “core offering”? What are its strengths and weaknesses? Which “pain points” does your product or service solve for? In this section, make sure it’s clear what your retail business is offering, what it does, and why it matters.
5. Outline a Management Plan
Creating a management plan encourages more effective management by ensuring that management decisions are based on a clear understanding of the systems, communication channels, and responsibilities set in place by the business.
An excellent management plan provides purpose, guidance, and resources for managers with a framework for day-to-day operations and long-term management. This section of your business plan can also help identify and define management effectiveness with management-focused KPIs. Accountability is key and will reassure potential investors that responsibility bumpers are in place before launch.
6. Develop a Financial Plan
A financial plan is a critical component to include in a retail business plan. It helps you provide an estimate of your start-up costs and a vision of your financial future. A financial plan should outline how much financing your business needs to be successful. It will also help convince investors and lenders to fund your business by confirming that your new business is a sound investment.
Your financial plan should include elements that clarify your future financial needs, attract funding (investors or lenders), analyze financial risks, and determine the likelihood of making a good profit. Within this section, be sure to cover:
- A break-even analysis
- Profit and Loss statements
- Cash flow projections
- Balance sheet
- Industry ratios
- A section addressing all possible risks
A Modern POS System as the Hub of Your Business Plan
If you follow this checklist, you’ll have a comprehensive retail business plan in no time at all. Remember, if you miss a critical element, it can spell disaster in the form of a lack of funding. Take your time and make sure you’ve addressed all the areas above while developing your business plan.
Once you have a better understanding of your new business’ needs, make sure to consider the valuable addition of an inclusive, integrated POS software system into your business plan.
Whether you choose our best-in-class point of sale system or not, here at POS Nation, we love offering valuable resources to new business owners to get them on their feet. That’s why we developed a Retail POS System Buyers’ Guide to help you decide which retail POS software tools are the right fit for your new retail business.