The current retail environment can be an excellent opportunity for new entrepreneurs. There are many resources you can utilize on your road to opening your business and ecommerce can open you up to a thriving global marketplace. Yet, data from the Small Business Administration (SBA) suggests around half of small businesses — retailers among them — fail within the first 5 years. This can be an overwhelming and disheartening statistic to be confronted with when you’re just starting out; it can seem as though your chances of longevity can almost be determined by a coin toss.
Yet, there are steps you can take to help give you the best possible chance of being in the half that sees their small retail enterprise thrive beyond the first half-decade. One of the most important among these is creating a robust and actionable retail business plan. When produced in a way relevant to the contemporary retail marketplace, this can be a tool with a positive impact on various areas of your business.
Let’s take a moment to look at why a plan is so important and the keys to making one that works for you.
Understand the Value
There are various reasons some retail business owners choose not to make a business plan. Often this is a lack of confidence; they’re passionate about the idea of their business but don’t feel they can scrutinize it too closely in case it falls apart. Alternatively, they might consider themselves to have a lot of expertise from previous experience in retail and therefore don’t need to plan. Then, of course, there’s the myth that good entrepreneurs take risks. Yet, each of these ignores the fact that part of making a good plan is first understanding how it can be valuable.
In essence, a business plan acts as a solid foundation upon which to build your retail company. It helps provide clarification on your ideas and operational approach not just for you but also the various stakeholders you’ll need to collaborate with. A plan providing clarity on your financial needs and expectations helps to build confidence in banks or investors you expect to help fund your enterprise. Details on the style of retail business you’re building also help to provide other members of your company leadership with knowledge of the objectives, priorities, and values of the business to better inform their actions.
From a personal perspective, your business plan can act as a roadmap guiding your actions during the first few years of your journey. The initial period of a retail operation can be filled with uncertainty. A detailed plan of action helps you to formulate a step-by-step process of opening your business, gaining the finances you need to operate, and allocating where you should be spending your money. Importantly, it also helps you to better understand the common problems impacting retail businesses alongside those specific to your particular model, so you can prepare solutions in advance.
Keep It Simple
There’s little doubt that a business plan will be one of the most important tools in building your retail business. But you don’t need to create a complex document with a huge amount of detail. By placing too much unnecessary information in your business plan you run the risk of putting off potential investors due to a lack of clarity and also overwhelming yourself with a lot of conflicting expectations. Keep it simple.
Start with just the basics of a business plan. This requires some understanding about what a retail company needs to function for the first handful of years. If you’re not sure about what these elements are, it can be a good sign you might need to brush up on some entrepreneurial knowledge. Heading back to school to follow a master’s degree in business administration course can give you valuable insights into the principles and experiences that can inform a positive start to your business. The curriculum will guide you through the steps any entrepreneur needs to follow to create a business plan that results in a stable beginning to an enterprise. You’ll also often have access to mentors who can enlighten you on what you should be including in a plan.
Whether or not you’re planning to attend formal training, it can be wise to make use of a business plan template. These are readily available online and while not every aspect might be relevant to the specific type of retail company you’re starting, they will cover most of the basics. Use it as a jumping-off point.
Aim for Agility
The retail market is frequently changing. This can include elements like the changing needs of consumers, their attitude toward online platforms (particularly as a result of COVID-19), and even technological trends like the switch to cashless sales. As such, it’s important to remember that while your retail business plan should be strong, it should also not be rigid. To succeed as a small business owner in the contemporary environment you should aim for agility.
The primary aspect of this is making space in your step-by-step process for regular reviews. The last thing you want is to keep running for years only to realize things aren’t working when it is too late to respond. Formalize protocols for your assessments in your business plan. Detail their frequency, the methods you’ll be using, and what resources you’ll need. This not only helps to make your business more functionally agile but also communicates to your potential investors that you have a process to mitigate potential problems.
You shouldn’t just be thinking of your retail business plan as another hurdle to achieving your goals. When you take its creation and us seriously it can be a powerful tool in influencing your success and longevity. Take the time to understand why it can be valuable to your particular retail business and achieve clarity through simplicity. These, alongside a focus on agility, can help you take the first steps toward your retail enterprise goals.