Sample Retail Business Plan
This business plan format for a retail business relies on time-tested planning techniques, and all UK banks approve the template used in this section.
It has many examples for retail research taken from opening available data sources as well as ideas you can use for your own business plan to secure bank finance.
The executive summary as the title says summarises the overall plan for your retail business. It includes the following elements
- Business vision
- Products and services
- Financial summary
- Loan and investment requirements
The external research includes factors about the economy. You'll need to describe the past, present and future over the course of your plan. Example trends you can use are as follows:
- UK GDP is projected to fall by just over 3% in 2010 with gradual recovery over the course of that year and the recession is likely to persist throughout 2009 and affect all regions.
- Consumer spending growth is also likely to turn negative at -3% during 2009 due to the severe squeeze on consumer spending from the high street, rising unemployment and falling housing wealth. There is also forecast a slight reduction in consumer spending in 2010 with a gradual recovery thereafter as households look to reduce spending and increase savings.
Source: PWC economic report
Up to date market research is important in your plan. You should include overall data and data specific to your region. Here's some information about the retail sector:
The Retail Market Environment
The UK retail market is set to increase in size by 15% over the next five years, taking its value to just over £312bn (UK Retail Futures 2011: Sector Summary, Datamonitor). However this represents a slowing down of annual growth and with operating costs and the cost of credit set to rise, the retail sector faces challenging times.
Companies who cannot compete against shrinking margins will suffer. The electricals sector is currently the best performer, with a predicted growth of 24% (UK Retail Futures 2011: Sector Summary, Datamonitor), while the home sector retailers face a tough period as falling house prices make people more cautious about moving home.
Consumer debt, rising interest rates, inflation, house prices and job security all affect how much people shop, and the current economic climate indicates that consumer spending will slow down. Customer confidence is a key issue: if people feel optimistic about their situation, they will spend more. If they are nervous about their own financial security, they will spend less.
Employment in the Retail Industry
The retail industry employs over 3 million people (data collected March 08). This amount equates to 11% of the total UK workforce (UK Retail Futures 2011: Sector Summary, Datamonitor). The retail section generates the retail sector generates almost 8% of the Gross Domestic Product (GDP) of the UK.
UK retail sales were approximately £265 billion in 2007, which is larger than the combined economies of Denmark and Portugal (UK Retail Futures 2011: Sector Summary, Datamonitor).The retail industry and the jobs within it are susceptible to economic and consumer trends.
From this research you create opportunities and threats. Of course the biggest threat to any retail business currently is the recession.
This area is where you concentrate on your own retail business and develop your strengths and weaknesses. Example strengths may be your sales force, the location of premises or relationships with suppliers, whereas weaknesses may be your lack of skills and the fact you may be a new brand entering the marketplace.
Your SWOT is simply a summary of your strengths, weaknesses, opportunities and threats you have discovered from the work above.
Plan out the main 6-8 objectives for your retail business over the next 12 months. These may be to launch the business, launch new products and services, enter a new market or open a new store. What ever they are work through the SMART principles so that your objectives are:
- Specific - i.e., open a new store
- Measurable - i.e., recruit 6 people rather than recruit staff
- Accountable - i.e., you must assign the objective to someone
- Realistic - i.e., not to triple turnover in 2 months
- Time-bound - i.e., you set a target date for completion
Your marketing plan is where you detail what marketing promotional activities you'll undertake over the next 12 months in detail. Put together exactly who you are going to target with what type of marketing and what you expect the results to be. Add a cost against each item.
Staff and Management Team
Every business succeeds because of the people involved within it so add in brief CVs for the main management team members and senior members of staff. Anyone investing in your business is investing in the team as well as the ideas.
You'll need to prepare details financial plans for the next 12 months and yearly thereafter. You'll need the following statements:
If you can't do these financial statements yourself, find someone who can because the bank or investor will go through these reports in detail.
Those are the basic sections of any retail plan. Remember to keep it concise and run to about 20 pages in total.