BY: IPINMI AKINKUGBE
There are 582 million entrepreneurs in the world. People who have taken the leap and bet on themselves. This means they have decided to stop working 40 hours a week for someone else and start working 80 hours a week for themselves.
Making the decision to go without a stable income and working a set number of hours to lead the unpredictable life of an entrepreneur.
Studies show that 22.5% of businesses survive their first year and 50% make it past the 5-year mark. These statistics make people run either towards or away from self-employment.
When starting a business, there are many factors – internal and external – that will determine its success or failure. The most important thing is to recognise your strengths and focus on the elements in your control. One of these elements is building a firm foundation.
Creating a business plan is only the first step to starting your retail business. It acts as a point of reference for all activities. This allows future decision–making to be easier, faster and more effective.
What is a business plan?
A business plan is a guide for your business and its development. It details your company’s overall strategy and objectives and the actions and plans to achieve them.
Having a business plan does not mean you need to have every single detail of your business mapped out, but it does create the perfect foundation to build on, allowing you to think strategically before starting operations.
It typically includes information about products or services, target market, competition, financial projections, and management team.
Let us look at the steps you need to take in order to create your own impactful small business plan:
How to write a small retail business plan
An executive summary is at the beginning of a business plan, but it should be the last thing you write. Think of it as an “elevator pitch”, where you have to give an overview of your business, its vision, and potential financial projections in 30 seconds. It is brief, concise and it summarises the key points of the plan.
To identify a good executive summary, it should be able to stand alone as a summary of the entire plan. It should give potential investors, lenders, or other decision-makers who are short on time with a quick overview of the business and persuade them to read further. It should include:
- Product or service description: what are you selling and what makes it different?
- Target market: who will you sell to?
- Competition: who else sells something similar?
- Financial projections: how much will you make?
- Management team: who is involved?
The company overview or description needs to answer two questions: who are you and what do you plan to achieve? It should provide some context for the rest business plan and give whoever reads it a sense of what the company does, its products or services, its target market and what makes it unique and sets it apart from competitors.
The company overview is an opportunity to clarify the intangible aspects of your business like its principles, culture and values.
Products & Services
This is where you get very specific about your offerings. Whether you are selling a product or offering a service, you need to outline why anyone will buy what you are selling.
What gap in the market are you filling and how? The most important information you need here is your unique selling point – what makes your offering different and stand out above your competitors?
If your product will have variations, describe how they will be introduced down the line and be profitable to your business.
Market/ Competitor Analysis
Choosing the market, you want to play in is probably the most important decision you will make for your business. The market needs to have the right amount of demand for your business to be profitable and there also needs to be room for growth. Choosing the wrong market can often make or break your business.
This is why market research is an integral part of the business plan. It helps you assess the competitive landscape, market conditions and current and future trends as well as the target market for your products or services.
To properly gauge your competitive environment, you can use tools like SWOT & PESTLE analysis. SWOT analysis allows you to gather information on your company’s internal strengths and weaknesses and external opportunities and threats.
This can help in the creation of a well–detailed plan on how to capitalise on the strengths and improve on the weaknesses.
A PESTLE analysis is the framework used to assess the political, economic, sociocultural, technological, legal and environmental factors that can influence a company’s activities.
These factors are completely out of your control, so doing your research beforehand gives you insight into how favourable or unfavourable a market is.
A marketing plan is customer–centric. It should focus on the ideal customer and how your products or services can provide value to them better than the competitors. It bridges the gap between your organisation and customers, creating a plan on how to translate what you want to produce and what your customers actually want to buy.
A marketing plan should follow this framework – SOSTAC:
S – Situational Analysis: This is an extension of the market/ competitor analysis above. It is done to understand your company and its position at any point in time. In addition to a SWOT and PESTLE analysis, a micro audit should also be carried out, to assess all aspects of the environment under your control. Like your suppliers, distributors, customers and employees.
O – Objectives: It should ALWAYS link back to your business objectives. They should be SMART – specific, measurable, achievable, realistic and timebound – creating consistency and motivation and allowing for performance measurement.
S – Strategy: This looks at the objectives you have set and sets in the long–term how you plan on achieving them. This takes account of your human and physical resources and if they are sufficient enough to activate your objectives.
T – Tactics: It looks at how objectives can be achieved in the short term. At this stage of the plan, the marketing mix needs to be defined; 4Ps (Product, Place, Price, Promotion) for the sale of a product and the 7Ps (4Ps + People, Physical Evidence, Process) for a service.
A – Actions: the implementation phase. This details resource allocation in order for you to effectively carry out the plan.
C – Control: after the plan has been implemented, its performance needs to be monitored and assessed to identify how well it is doing and to check if any adjustments need to be made. It needs to be carried out after execution to see if the objective you set out was achieved.
Logistics & Operations Plan
A logistics and operations plan outlines how you will manage the day-to-day processes and systems needed to run your business, including the management of inventory, production, and distribution. It typically includes information on supply chain management, production schedules, and quality control procedures.
It may also include details on the company's production facilities, equipment and technology, and the personnel needed to manage these operations. Additionally, this section should also include information on how your company will ensure the timely delivery of products or services to customers.
The goal is to have a clear overview of how daily operations will be managed to ensure the business can meet its goals and objectives, and choosing the right logistics partners can be the leg up you need against competitors.
A financial plan will define the financial projections and strategies for your company and includes financial statements such as your projected income statements, balance sheets, and cash flow statements, as well as detailed information on the company's funding requirements and funding sources.
This section should also include information on your company's pricing strategy, sales forecast, and expenses budget and your plan for turning a profit.
In this stage, the financial health of your company is defined, including projected income and expenses, as well as a plan for obtaining the necessary funding to start and grow the business. It is also key in convincing investors and lenders that your business is a viable and profitable venture.