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    More often people tend to have the impression that a business plan is more geared towards securing capital from investors to start a business. But this is only an aspect which gets spoken about which misses the larger picture.

    A business plan can be called a guiding document that covers an entire gamut of subjects associated with the business. In technical terms, it is a document that establishes the goals and the methods that shall be employed in accomplishing goals by a business.

    Going further, it identifies a future business opportunity or an existing business by identifying, describing, analysing and examining its technical, economical and financial feasibility. It is more like a business card that introduces the business to banks, investors, public bodies and any other stakeholders associated with the business.

    This write-up seeks to interest readers about the importance of a business plan for retail and online business. While the former is the most commonly known business around, the latter is relatively new and has only risen into prominence in recent times. However, the business fundamentals that govern both businesses remain the same.

    Key Components of a Business Plan for Retail & Online Business

    Having understood the scope and utility of a business plan, let’s now understand the key components that go into making a business plan. The underlying notion here is about developing an effective business plan. Here we go:

    • Executive Summary: It is considered critical to the success of a business plan consisting of an overview of the entire business plan. It brings out the key points that get elaborated in the rest of the document. This is where you get the attention of the investors and other relevant stakeholders by compelling them to read further.
    • Business Architecture: This part will describe the nature of the retail and ecommerce business and primarily covers the business structure, stakeholders involved, target customers, revenue potential channels, operations strategy along with the products or services being offered. This part of a business plan must be written in simple language for easy & better understanding with less jargon.
    • Marketing Strategy: This would spell out how you plan to penetrate your target market or go-to-market strategy and it is where you shed light on the desired image and the branding strategy. You must be able to provide details on your marketing strategies (online & offline) and potential marketing partnerships which need to be backed by documented research supporting the plan.
    • Products & Services: In this part of the business plan, you have to talk clearly about your product and service and its unique value proposition (UVP). Meaning, how do you stand out from similar products already in the market. You would have to analyse your pricing strategies and margins. In addition, investors are mostly keen on knowing why users will purchase the product and how much the company stands to make out of it.
    • Management Plan: Here you are expected to reassure the investors that you have the necessary human resources to make the business a success. Mostly, it would involve disclosing the key personnel associated with the business and their backgrounds. It would also include your staffing needs along with the compensation and associated benefits. The scope of the management plan includes organization structure and top level management team members skillset/ experience levels as well.
    • Financial Plan: This is one of the difficult parts of a business plan and relates to the company’s revenue and profitability model. It will assess the amount of capital required, how the funds are going to be allocated and the expected future earnings. The financial plan can include sales forecasts, break-even analysis, capital investment, operating costs and cash flow statements. Investors expect a financial plan to contain a monthly break down of the financials for the first year and annual details for the next 3-5 years or so.

    Importance of a Business Plan for Retail and Ecommerce

    As mentioned earlier, it is particularly important if you happen to seek investment from potential investors. It need not be a long 200-page document but should be able to inform your investors or bankers that there is a market for the ‘solution’ you are offering backed by essential financial statements and sales forecast. Let’s look at other factors that make a business plan important, here it is:

    • Streamlines Spending Decisions: The growth of the business will require you to make decisions regarding – new hires, possible expansion and impending purchase. All these decisions need to have clarity, and by closely following the forecasts mapped out in the business plan, a business owner remains in control about major and sometimes crucial spending decisions.
    • Better Understanding of Cash Flow: The cash flow statement happens to be integral to the financials of a business plan. By reviewing cash flow statements regularly as part of your business plan review will allow you to observe any changes in cash flow beforehand. This will preempt any cash crisis at the company before it becomes a major issue.
    • Helps Minimize Risk: For an entrepreneur who is starting his/ her journey, there is a lot of uncertainty about factors like customers, competition and even operations. A good way of minimizing the risk associated with the business, in general, can be through a robust business plan. By regularly reviewing your business plan will allow you to uncover your weak spots and develop contingency plans to overcome them.
    • Enables Strategic Planning & Improves Efficiency: A business plan remains a great avenue for mapping how your sales and revenue goals fit with your expense budget. By drawing a clear connection on what you are investing and the results you hope to achieve will increase your chances of success.

    Moreover, developing an effective business model enables the owners to explain their team how the company hopes to achieve its long-term goals. Making everyone aware of the long term vision will enable all to work towards the common goals with higher productivity and efficiency. From the very beginning, the company must be able to take all team members into confidence and must regularly communicate the progress towards the goals.

    • Allows achievement of SMART Goals: A good business plan will come with SMART goals (Specific, Measurable, Achievable, Relevant, & Time-Bound). Skipping on goals and milestones in a business plan can make the business plan a whole less useful. Vague goals and milestones for the company and team that aren’t aligned to the strategy spelt out in the business plan will make it daunting for team members from identifying and working on priorities associated with the business.
    • Improve the Valuation of the Company: Down the road, if you have plans of exiting the business, having a solid business plan increases your chances for a higher valuation. The business value increases, if the business model, target market and opportunities for growth are clearly specified within the business plan. It will make it easier for potential investors to make sense of the entire business and understand viability of the business model for sustainable development.

    Why YRC for Creating an “Effective” Business Plan?

    Your Retail Coach (YRC) comes with the experience of having closely worked with numerous clients with the development of a business plan from scratch for retail and online businesses. We enable businesses to create a business plan through a step-by-step process with all the necessary components required in a business plan that can impress potential investors and bankers. We are equipped with technical expertise and knowledge on business model development, business strategy planning, corporate level strategy, strategy development plans and well versed with the business plan development process

    Our in-house business plan consultants come with academic training and hands-on experience in developing business plans and understand the subtle nuances of creating one. We have worked with various industries but come with special expertise when it comes to retail business plans and ecommerce business plans. YRC remains one of the leading management consultancies in India providing business plan advice within India and around the globe. All our past clients have found success in their business through a well written and articulate business plans from YRC finance experts.

    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.