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Business Plan Development

One of the most important elements in planning for any retail Business plan, whether it is a startup or an existing business, is assessing the financial or commercial viability of the business idea or project. This includes accounting for capital and operating expenditure, costing, margins, pricing, projecting sales turnover, inventory purchase plan, ROI, breakeven, etc. Cutting a long story short, it is determining whether the business will be profitable or not or whether it has commercial or financial viability or not. That is an area where potential investors keep a vigil eye on in any business plan presentation and especially, in the case of startup business plans.

Shortcomings in business plan development

Even though a business plan is one of the preliminary requirements when a business idea or project is conceived, there remain shortcomings which are ignored, undermined or not addressed properly. We have listed a few of them.

Poor planning

Business is risk-taking and not having adequate financial preparedness and planning for it is even riskier. A business plan consultant could use no less volume of relevant words to ascribe the importance of a business plan in ascertaining the commercial viability and profitability of a business idea or project. This planning later on also becomes a guiding light in financial and commercial decision making. Aspects left unaddressed or unplanned for becomes a source of financial stress later.

Failing to anchor

If you are not planning well enough, you are intending to go unplanned. This cannot be put in any more subtle of a way. The same is with a business plan. With a business plan, you are anchoring your business to a planned set and sequence of activities with predetermined objectives. It could be in matters of capital expenditure, determining salary structures, making inventory purchase decisions, etc.

Lack of funds and provisions

The objective of a retail business development plan is to provide for the sustainability of the business. And to this, an important element is to create funds and provisions for various purposes like asset replacement, to write off bad debts, depreciation, pension, inventory obsolescence, etc. In the event of having to incur any such probable expenditure, lack of adequate provisions will put financial stress on the business.

Not accounting for increasing expenditure

An economy experiencing normal inflation is a common phenomenon. What it means for a business is that with every passing year, it will have to bear higher costing on materials, salaries, office supplies, taxes, service charges, etc. Even a small change in price could convert into a significantly higher bill when the quantity is large. For instance, a yearly 5% salary hike for all employees means a much fatter salary bill with every passing year. A sound business plan should account for the element of rising costs.

How YRC can help: a glimpse

We, at YRC, realize the importance of financial projections and planning in assessing the commercial viability of a business idea or project. Our team of Retail Business Development Strategy Plan experts follow a rigorous, comprehensive, and systematic process in writing a Retail Business Plan. Here’s more on what we do in business plan writing service.

We will help you identify the capital and initial expenditures to be made. These expenditures are made towards building the physical and operational foundation of your retail business, whether it is brick and mortar, eCommerce, or omnichannel. For instance, in financial plan for startup businesses, some common capital and initial investment expenditures are building/hiring the physical infrastructure (store, distribution center, logistical solutions, etc.), purchase of IT hardware and software systems, market research costs, etc.

Determining the estimated purchase and selling price per unit is important. But if there are multiple products, as in the case of retail fashion or retail grocery or supermarket, you will have to consider the overall margin coming from the entire product mix. Our Retail Business Development Strategy Plan experts will cover a comprehensive assessment of the margins associated with various products lines to arrive at the average margin percentage. This will give you a much better picture of the margin you will be likely to generate from the entire set of offerings.

How quickly a retail business is able to convert inventory into sales affects decision-making in certain other critical areas of the business like warehouse utilization, inventory purchase planning, load on production/processing/order fulfilment facility, logistical planning, and store merchandising. Our experts will carry out a thorough analysis of the internal and external factors affecting the demand and supply of goods/inventory along the supply chain and distribution channels in estimating sales turnover.

The hallmark of good purchase planning and inventory management is the consistent availability of the required stock for sale. Our experts will help you prepare a sorted purchase plan as per your demand forecasts and processing and procurement timelines so that your business consistently stays at a favourable inventory position.

The salary bill is a major cost component for any business and thus, it assumes an important place in a business plan. As a major cost of operations, ‘salaries and wages’ and increments thereof carry the potential to significantly affect the profitability of an enterprise. We lay extra emphasis on this aspect to ensure that projections are accurate as these will show up in the projected profit and loss statements.

In business plan financial projections, the projected profit and loss statement is the place where you will see how your business is likely to perform in the next five years in terms of revenue, cost of operations, and profits/losses. However, we must always bear in mind that unpredictable changes in the business environment and proactive and response business decisions made over a course of time could alter these projections. But that is what makes it a business.

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We are a boutique retail consulting firm. To know more about our services or if you have any query, drop us a message and we will get back to you.

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