U.S. statistics for e-commerce indicate that annual internet sales are steadily increasing. In fact, U.S. sales doubled between 2006 and 2013 and were an estimated $210 billion in 2013 for business-to-consumer (B2C) and business-to-business (B2B). Globally, the best estimates report B2C e-commerce sales of approximately $638 billion, and that excludes travel sales. It is not surprising that millions of entrepreneurs are preparing their online retail store business plan so they can capture the great opportunities.
Approximately a third of all internet sales are for travel and flight bookings which means internet-based store for goods and services account for two-thirds of the revenue generated. How can an entrepreneur take advantage of the opportunities? It is to get on the internet and start a web based shopping enterprise.
However, it is not so easy to generate sales and grow a startup because shoppers must find the website among the billions already operating. The owner must know how to get attention through marketing and search engines. The startup needs an online retailer business plan that lays out the operating model and the critical success components like marketing, operations, and financials.
Business plan for retail
You should think the following before writing the plan:
- Who will be your potential customer for online business? You must think about your potential customers. For, example if you are dealing with clothes, you must think it would attract young, middle age or elderly people, gender, etc.
- Who could afford your product? You must think who can buy your goods. e.g if you are dealing with high class branded clothing then your target population must be people with high social, economic class.
- Who live near the retail business location. You must think where your shop is exactly located. e.g. if you are thinking branded clothes but people living close to your shop is people with meager financial resources.
Pre-requisites of business plan for retail shop
- Before writing a retail plan, you should do research. There are many online websites that provide information related to online retail business. It is always good to take information about what is good and what is what isn’t for this business. You must consult before opening a retail store business plan.
- You should know from where you should buy the good to sells. Your online retail business planning should include the list of the manufacturer from you would like to buy your goods or the company that may directly ships items to you. You should review the term and conditions, payment strategies prices, etc. before selecting any one.
- Knowing your expenses and budget is essential before writing the business plan of retail store. You must calculate initial expected expenses. You must understand how to invest the money before writing a retail business plan of the retail. Some experienced people suggest not to spend all you amount in business. You must also consultancy or knowledge related to bank loans. It is also good to have a good security system if you are retailing online with expensive items like jewelry.
- Think of eco-friendly branding strategies and write in your online business plans for retail stores. Many stores are using green color or plastic free bags etc. for the promotion of their business.
Thus, and effective business plan for retail is important to start a successful business. You can also review sample business plans for retail to have the general idea about what retail business strategy includes. An effective plan includes a good executive summary, market strategy, and financial strategy and SWOT analysis.
Setting sites on Success
A professional business plan for online retail store used for many purposes. They include setting the path for successful operations, finding interested investors, setting short and long-term goals, documenting market research and more. It plays such an important role in the entrepreneur’s success that it should be considered a “living” document that keeps decision-making on track.
Every section needs to be thorough, accurate, and based on in-depth research, covering information like the following:
- What are the products and/or services that will be sold on the internet? They can be quite diverse, ranging from computer equipment to books and music to clothing and shoes. The source of products sold retail can vary too. Are the items produced by the entrepreneur or sourced from distributors? Are they domestic or global suppliers? How will the online retail business ensure it can supply customer orders? Will an inventory be carried in a warehouse or will items be drop shipped directly from supplier to customer?
- Describe the required retail facilities for online and local store which can be as simple as a home office or as complex as leased office space and a warehouse for storing inventory. The type of facilities or space needed largely depends on how goods will be delivered to customers.
- Describe the merchant business model and how sales are generated, i.e. direct internet-based selling, catalog sales through a web store, click and mortar (web store added to existing brick-and-mortar business), internet auctions, and/or bit vendor. A bit vendor sells and distributes only digital products and services on the internet.
What retail sales program software was selected, and how will it be maintained? There are many possible options today. The entrepreneur can set up a retail store on eBay or Amazon. There are also numerous SaaS options. Yet another possibility is hiring technical people to write a unique sales program.
- Will the online retail company sell cross border? If so, what cross border payment systems are utilized? What are the licensing requirements? It is important to hire professionals to manage the accounting and legal aspects because of the complexity of cross border selling.
- What is the estimated average ROI for the online Internet retail store? If the entrepreneur does not know how to figure ROI, it is wise to take advantage of professional consulting services. The financial calculations and financial statements projecting revenues and costs are important to the entrepreneur and potential investors.
- Who is the defined target customer? Is it a B2C, B2B enterprise, or will both consumers and businesses become customers? What does the market analysis indicate about the industry and needs of the target market?
- What marketing strategies are employed to reach to the target market? In-depth research is needed to identify the customer demographics of the target market and how to best appeal to customer interests and needs. Once again, many people do not know how to do market research and need to hire a consulting company to get the right kind of help.
How to write a Sample business plan for a retail store?
The retail work mainly includes general merchandise etc. The retailers buy products directly from their producers and sell those products to the common people. These products in the online retail business can be long lasting and non-durable items. Durable retail items mainly include electronic items and other whereas non-durable retail involve food, drinks, shoes, cosmetics and clothing. Further, the retail business is a rewarding business if done properly. Properly drafted retailing business plans would help you to achieve success in the business. You can open many retail outlets in major cities. You should write the separate business plan if you are dealing with specific retail business like garment retail business plan.
Sample business plan for a retail shop
Below is the sample business plan for retail store to assist you:
- Write down the executive summary of your retail shop. Your business plan should include a location of your shop. Consider opening shops in the central market of your locality. Further, write whether you should deal with the durable items or non-durable items. You should write the names of manufacturers you will deal. Decide whether you will start an online or local store. You can also get profit through online shop and it requires to write a business plan online retail. The online sample business plan would also guide you to write a plan.
- Write down the mission statements along with vision of your retail business. You should be clear about your mission and vision for your online business. Your vision could be opening retail shops in your city and mission could be providing branded items to the people at reasonable prices. Review online sample business plan of other websites.
- Write down the employee structure in your plan. A proper retail business structure and a good employee is key to your success. You can hire the CEO, merchandize manager, accountants, information technologist and sweepers or cleaners. The CEO of the retail shop would be responsible providing guidelines for the business, implements organizational strategy, signing the deals, recruitment of the staff and evaluates the company achievements and targets. The manager of the retail shop would be in charge for the daily management of the activities and ensure that items are properly arranged or do any duty assigned by the hiring authority. The merchandise manager of the retail shop would be response for vendor relations, buying of products on behalf of the firm and ensuring that organization works with in the assigned budget. Sales manager deals with the data to organize business information and attract the new customers and evaluates transactional data. The accountant of the retail would be responsible for receiving the payments, issuing of the receipts, financial transaction, other duties assigned to him/her. Hire well qualified and experienced employees for your retail business. You can also hire other professionals for your online business. Check other online sites as a sample for the understanding of the type of professional required.
- Write down strengths, weakness, opportunities and potential threats to your online retail business. Your strengths might be operating both local and online, the number of products and customers. Your weakness could be the competition with the larger stores due to limited financial resources. Your business opportunities could be expanding your shops to other. Cities of the province and country. Your potential threat could be economic depreciation and an opening of any new shop. A good SWOT analysis in the business plan retail shop would guide to how to work effectively. Similarly, SWOT analysis should be written for online business.
- Write down the market analysis in the retail plan for the online business. Write down the potential target customers like a household, corporate executives newly wed couples, expected mothers and students. Your competitive advantage would be the online shop, the range of items, and availability of different payment methods. Online sample plans would also assist you to write in-depth market strategy.
- Write down the marketing strategy of your retail shop to increase the sales in your business plan retail store. You should write sales forecast of at least three years. You can market your shop through advertisements in local newspapers, radio stations, introductory letters, yellow pages ads and direct marketing. Online available sample plans for online business also define many online marketing strategies.
- Write down the financial strategy of your online retail store in business plan retail. You must include the initial prospective expenses like legal expenses, rents, the expense of consultants, insurance, promotional expense, the expenditure for equipment purchasing, installation of the security system, operational costs and other miscellaneous expenses. A good pricing strategy is important for retail business because customer visits retail centers to buy cheaper items. Select that prices that would be helpful for the customer satisfaction as well as for the benefits of your business. You should mention same prices for online business and write about delivery charges etc.
- You must formulate a business expansion strategy of an online retail business. The success of your retail business depends on your competency, worker’s efficacy and lastly your business strategies. Online retailing has a wide scope of expanding. Review other online business plan as a sample and create your customized expansion strategy of the online business.
Thus, you must elaborate complete description of your business plan. You must take guidelines from the retail business plan UK. The above-given sample key points would also help you to customize your online business plan.
Appealing to the Investor
Even a small internet retail business needs capital to cover startup and operating expenses the first year. It is important to know how to identify outside funding needs and to include a perspective in the online retail business plan that appeals to the type of investor most likely to be interested in the businesses. Fact-based financial statements are instrumental to long-term success and for landing investors. Investors are savvy and easily recognize inflated numbers or financial information that is not based on high quality research.
Since 2006, OGS Capital consulting professionals have successfully help SMEs with the development of quality business plans and with raising capital. Each document is customized and retail business plan templates are used. When ready to startup or grow a online retail business and in need of a customized business document, simply send your information on a completed contact form.
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