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Retail Business Plan

The retail industry paves the way for an exciting way of life for millions of people across the world – providing goods and services that you and I need including food, home furnishings, medical supplies, electronic items, skilled labour etc. to name a few. Most new entrepreneurs dream of owning a small or large retail store; however, it is more important that you understand what you are in for. Retail business entrepreneurs, as in any business, should be willing to risk capital and invest time by and hence make a living by offering customers something key to their daily needs. Consumers today have a plethora of options with an overwhelming sense of luxury and well-being. However, you should always keep an eye out for unexpected declines in demand due to market crash or slowing economy which could result in curb buying behaviour of the consumers.

You may believe that your business has a distinct concept and is better than any other competitors, but are you sure about how you would launch your business into the market and satisfy the expectations of your customers? How would you drive your unique propositions to the target market? Therefore, one of the most important tasks that any entrepreneurs who wishes to start a retail business should do is to create a business plan. Curating a business plan is crucial as it gives you a one-stop comprehensive view of your business and proves to you and others involved if your business idea would work or not work out in the target market and what needs to be modified.

What is a Retail Business Plan?

A business plan is a one-stop guide for your business and details all aspects of your business including what you would sell, how your business would be structured, what is your unique proposition, your retail store business model, your target market and your financial plan. A retail store business plan includes the strategic, financial and operational plan and the industry analysis for your business. You can use your retail business plan as a roadmap that presents the growth plan of the business, its short-term and long -term goals, and how it plans to accomplish these.

The essential parts of a retail business plan include the following:

1. Executive Summary

This section offers the synopsis of your business with a description about all the key components of your business. This is where you capture the reader’s interest about your business.

2. Business Analysis

This section offers description on the goods and services your business offers in the market, legal structure, location, target market, target customers and key competitors in the market.

3. Marketing Strategy

This section describes your key finding and analysis on your target market and customers, how you plan to penetrate your market, brand position and strategy, marketing plan etc.

4. Products and Services

This section describes what products or services you plan to provide, supply chain network, how you plan to transport the goods or services offered, information about vendors etc.

5. Management Plan

This part includes details about your human resources, skills that you would require, explains how the store intends to be staffed etc.

6. Financial Plan

This part analyses and details the business profitability model and financial plan. It includes the cash-flow statements, income-expenditure sheet etc.

Importance of a Retail Business Plan

A retail store business plan, Apart from being a critical document for securing funding or loan from investors or banks, there are many other reasons for writing a business plan in the early stage of your business. Curating a business plan for most entrepreneurs is a splendid opportunity to take a step back and evaluate your business idea and vision, research it, understand your target market and customers and also understand the scope and strategy of your retail store business model. Here we put down a list of reasons why you should sit down to curate a business plan for the success of your business:

1. Validate Target market and Customer Analysis

Before you take your retail business off the ground, it is imperative to get to know the playground you are in. This requires a deep look into your retail industry, competition, and geography. Defining your target market and drawing out the preferences, tastes and behaviour of your target customers enable you to see who your audience is and how you can market your products/services to them. All these details would need to be chalked out in the retail business plan so that investors would have a full overview of what your business is and where exactly it places you in the large retail market.

2. SWOT Analysis

This takes a shot at the strengths, weaknesses, threats, opportunities your brand can capitalize on and even help identify threats from nearby competitors. SWOT analysis in your business plan acts as reference to isolate your strengths and weaknesses when making crucial decisions and enables you to stand out from your competitors.

3. Set Milestones

Writing a business plan ensures you lay out milestones to shoot for in the short, mid, and long term. It defines your plan of action before you jump into setting impulsive goals at the spur of the moment. Defining your goals also ensures you conduct your business with greater agility and identify any changes you may need to make to accomplish these goals.

4. Organize Resources and Skills

Writing this section in your business plan helps you realize how feasible it is to open a retail store, hire required staff, what skills you would need for daily functioning and dive into operating costs. The business plan will serve as a primary guide to how you will structure your resource management and allocate staff for your retail business core processes. You will also need to chalk out your hiring processes? How do you plan to recruit staff? What are the key skills you would need to look for? What is the responsibility given for each role?

5. Validate your Financial Plan

Planning out your finances and charting them out in your business plan is one of the most crucial functions of this document if you are playing for a loan or looking into bringing on investors. Business budget is what every lender or investor would take a deep look at. You will need to detail out every nook and corner of your expenditure from our budget from insurance, rent, expense for machinery, to your own salary. Defining your break-even analysis in your business plan at this stage, allows you to refer in the future to understand if your business is running on profits as planned. Your financial plan will include all essential documents that will help investors assess for themselves if you would be able to pay back your loan.

How YRC is helping retailers to build a sustainable business plan?

Once you are set on taking the bumpy road to grow your retail business into a huge success, your business plan would become your closest ally. Hence it is vital you find the right partner like YRC to help you shine new light into your business vision and pinpoint you to your most relevant success pathways. YRC has helped bring out the best suited viable business models to many retail clients by reshaping how they look at their business. The experts at YRC work with the client and their partners in the planning stage to establish the necessary research to understand the trends affecting your business under the current market condition to lay the groundwork for and improve the potential for success by suggesting the most suitable retail store business model for your business.

If you would like to have a clearer perception on the path towards success but are unsure on how to achieve it, YRC can help guide you through the process and set your business on the right track. By choosing to work with the experts at YRC, you would enable the financial growth of your business as well your growth as an entrepreneur. You will gain much confidence in building your business for future growth and challenges as we help you unleash the true potential of your business by zeroing in on the most viable strategic business model that would guarantee the success of your business.

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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.