Retail

6 Tips When Creating A Retail Business Plan

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Perhaps nothing is more heavily debated in the world of retail startups than those two seemingly innocuous words that, when placed together, cause panic and dissension among entrepreneurs: business plan.

Many business people have the perfect idea for a business, yet the thought of putting that idea down on paper is simply terrifying. How long should it be? What should it include? Do I have to have a business plan in order to run a business?

While there is no magic formula for what the perfect business plan looks like, the harsh reality is that you need something to serve as your roadmap along your journey as a retail business owner, something that can legitimize your idea in the eyes of investors and prove that your business is more than a fanciful dream.

With that in mind, the following 6 tips can help take the mystery out of creating a business plan and give you an idea as to how to get started when making a document for your retail business.

1. Keep It Short
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Even though you have the idea for the next billion-dollar business, keep your business plan conspicuously shorter than one billion words. Simply put, prospective partners and investors are not going to spend time sorting through hundreds of pages of rambling drivel. They will tune out before they ever tune in.

In addition, as the business plan is something that needs to be continually revised, amended, and updated, a weighty tome will be much more difficult to pull from your desk drawer than a small folio. Therefore, keep your business plan concise and accessible, providing room for growth as your business develops. Avoid lengthy blocks of text and use pictures and graphics to replace prose, attaching any particularly heavy content as appendices, if necessary.

2. Spend Extra Time on the Executive Summary

Even though your business plan may end up pages long, it is only as good as its introduction, or executive summary.

The executive summary provides a synopsis of your business and highlights the key points you will feature in the subsequent pages of the business plan. It will succinctly describe what your business does and introduce the reader to your value proposition, or the unique way in which your business is positioned to make money.

According to Marla DiCarlo of Raincatcher, a business valuation firm, as the first impression your business will make on potential partners and investors, its impact cannot be understated. A poorly constructed executive summary will dissuade readers before they ever give the business real consideration, while a brilliant executive summary will get the reader’s wheels spinning as they imagine the possibilities.

3. Know the Market Inside and Out

A retail business cannot exist without a market. As a result, one of the main things readers will want to see when perusing your business plan is the presence of a robust market, that there is an unfulfilled need in the market, and how your business is positioned to serve that need. This makes conducting exhaustive market research a top priority before ever drafting your business plan.

Once all of these market factors have been established, you can then introduce specifics of your business, such as its legal name, location, structure, and the line of goods and services it will offer.

4. Paint a Portrait of the Ideal Customer
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Some experts say that the purpose of business is to create a customer. With this in mind, you need to have a picture of what your ideal customer looks like and include this portrait in your business plan.

Understand that this target customer may change as your business evolves and you get a better feel for your product/market fit. For example, you may no longer have to differentiate on price once your product gets more firmly established in the public consciousness. However, no matter where your business is along its journey, no business is able to address all customers at all times, so it is essential that you keep your ideal customer up to date and stay honed in on selling to this target.

5. Have a Comprehensive Marketing Strategy

Although having a target market and ideal customer are critical, investors want to see how your retail business will penetrate the target market and reach the ideal customer. This is where marketing, those activities that facilitate exchange, is crucial.

There are a number of important factors to include in the marketing strategy. Some key points to consider for inclusion include:

* Image and branding strategy
* Social media campaigns
* Pricing strategies
* Packaging and labeling
* Potential marketing partnerships (other businesses, celebrity endorsements, etc.)

6. Numbers Speak Louder Than Words

At the end of the day, your business will ultimately be assessed on its ability to make a profit. As a result, no matter how concise and persuasive your retail business plan is worded, investors are going to want to see some numbers pertaining to your startup needs and revenue projections.

While difficult to project ad painstaking to compile, be sure to have a comprehensive financial plan for your business, with the following appendices:

* Capital needs projection
* Revenue and profit model
* Sales forecast
* Break-even analysis
* Projected balance sheet
* Projected cash flow sheet

Effective Tips for Creating a Retail Business Plan

Although it is widely accepted that a business plan is an important document in successfully navigating your retail business journey, many entrepreneurs have no idea about how to get started. While there is no magic formula that will automatically produce the perfect business plan, the aforementioned 6 tips can effectively help you get started on the right foot and provide a successful template for your retail business.

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