Opening a business or restrategizing in a new direction can be exciting. Writing a business plan for it? Not so much. But laying the foundation in clear terms is an important step so that you can move fearlessly toward your company’s future success. Plus it pays to plan: those that write formal plans are 16% more likely to achieve viability than others.(1)
While building a retail business plan might not be as shiny as your merchandise, you can sprinkle a little fairy dust into it. We’ll show you the key elements of any plan and teach you how to make it enticing to potential investors, business partners, banks, and your own peers.
What is a retail business plan?
Especially if this is your first venture, you’re going to need to know the basics. So what is a business plan, anyway?
A retail business plan is a forecasting document that includes must-know info about your ecommerce or brick-and-mortar company. It’s a roadmap that tells your audience how you plan to take your store from an idea on paper to a profitable business IRL.
Why do you need one?
You’ve got it all in your head and you’re eager to get started. Why can’t you just hit the ground running?
For starters, it takes more than just one person to run a business. Things may be simple and under control now, but retail businesses have a lot of moving parts. Gaining a comprehensive view on paper helps to ground you and your stakeholders as your business grows and becomes more complex.
Here are some of the main benefits of creating a formal retail business plan:
- To clarify: Your business plan is your map to success and contains multiple steps along the way. Having this journey on a page can help you gain a holistic view and organize priorities in a digestible way. Doing this also forces business leaders to define, in clear terms, their intentions and the steps they’ll take to carry them out.
- To gut check: The process of writing out your plans always uncovers those little roadblocks you might not have foreseen if you’d kept it all in your head. As a business leader, you always want to be a few steps ahead of any issue so that you can course correct or rethink your approach entirely before wasting time and resources on a plan with little chance of liftoff.
- To secure the bag: Securing funding is one of the main reasons leaders roll up their sleeves and start writing a business plan. If the success of your store is dependent on investments or loans, developing a plan is absolutely critical. These stakeholders will require a formal document to understand your plan and decide whether or not to provide the backing you need.
What to include in your business plan
Executive summary: The executive summary should come first on your document, but be written last. Its purpose is to summarize everything that follows in a high-level overview with persuasive power to move your readers on to the next section. This component might answer questions like:
- What does your business do?
- What are your business goals?
- What do you sell, and what is the differentiator?
- Who is your customer?
- How do you plan on reaching your audience?
- What are your current earnings?
- What are your projected earnings?
- How much money are you requesting?
This is a great section to really sell it. You’re in the retail sector, after all!
Company overview: This section should tell your audience who you are and what you’re aiming to do. The hard facts, of course, but also the fun details. You’ll want to communicate your purpose and mission in this area, which is a great opportunity to show the passion and personality behind the product, service, and company as a whole.It’s a good one to sit with, because it’ll be at the center of everything your business does. For us at Zip, our purpose is to create a world where people can live fearlessly today, knowing they’re in control of tomorrow.Here are some other things to consider including in this section:
- Business structure and model
- Your industry
- Your company’s vision and mission statement
- Short- and long-term business goals (more in depth than in the executive summary)
Industry analysis: Investors love companies that do their research. In this section you’ll show you’ve done your homework by outlining the size of the market, your direct competitors, and market trends and forecasts that are relevant to your industry.You should also demonstrate that you know your customer with demographic and psychographic info. Add the basics, like age, gender, income, and education level, but also their values, desires, and lifestyles.
Marketing strategy: Now that you’ve outlined the industry, your audience will want to understand how you’re planning to engage and sell to this target market. There are a lot of elements to think about here, but the main checkboxes to tick are:
- Current market position
- Competitive edge
- Branding strategy
- Pricing strategy
- Place strategy (online, in store, omnichannel)
- Promotional tactics
Management strategy: Don’t forget about the people that’ll keep your company running. Include those you’ll hire and what the management structure will look like. Include a hierarchy or flowchart of integral teammates, especially c-level execs. If you’re still a party of one, you can always outline the roles you intend to fill.
Financial strategy: We won’t BS you here: this section isn’t the fun one, but it’s what the majority of your audience will be most interested to see. Linda Pinson, author of nine books on business, says that this area is “what will tell you whether the business will be viable or whether you are wasting your time and/or money.”(2) So you’ve got to get it right.Some things the reader will be looking for: are you accurately forecasting future finances? Properly budgeting for expenses? All in all, they want to see that you’ve set your business up for profitability by making sound money moves. Include no-nonsense figures and calculations to lend credibility to this section.
Building a fearless foundation for the future
A retail business plan is more than just a pitch to investors (although we do hope you get that $$$). It’s also an opportunity to check yourself and gain clarity on your retail business ideas, hopes, and dreams.
Whether you’re writing for funding or to align with your leadership team, have some fun with it. And while some sections require facts and figures, others are simply an opportunity to tell your story. Take time to delve into the work to build a solid foundation so that you’ll be ready for whatever the future holds.
KrisAnne Madaus is a NY-based copy and content writer at Zip who has served various clients in the tech, data analytics, and consulting arenas throughout her writing career. She enjoys creating content that helps business leaders foster innovation in retail, ecommerce, and management.