Business Plan for the Small Retailer

U.S. Small Business Administration MP-9

BUSINESS PLAN FOR THE SMALL RETAILER

Management and Planning Series

______________________________________________________________________________ The material in this publication may not be reproduced or transmitted in any form or by anymeans -- electronic, mechanical, photocopying or other -- without prior written permission of theU.S. Small Business Administration. "How to Write a Business Plan." Copyright 1990, LindaPinson and Jerry Jinnett. All right reserved.

All of SBA's programs and services are extended to the public on a nondiscriminatory basis.

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TABLE OF CONTENTS

INTRODUCTION

What Is a Business Plan? 1What's in This for Me? 1What Business Am I In? 1

MARKETING

Determining Sales Potential 2Attracting Customers 2In-Store Sales Promotion 4

BUYINGINVENTORYBEHIND-THE-SCENES WORK PUT YOUR PLAN INTO DOLLARS

Start-up Costs 6Expenses 6Cash Flow Projection 6Is Additional Money Needed? 6

CONTROL AND FEEDBACK

Stock Control 7Sales 7Receipts 7Disbursements 8Break-even Analysis 8

IS YOUR PLAN WORKABLE? 8IMPLEMENTING YOUR PLAN 9KEEP YOUR PLAN CURRENT 9APPENDIXES

A. Income Projection Statement 11B. Monthly Cash Flow Projection 15C. Balance Sheet 17D. How to Write a Business Plan 1E. Information Resources 25 _________________________________________________________________

INTRODUCTION

A good business plan gives the small retail firm a pathway to profit. This publication is designedto help an owner-manager develop a sound business plan.To profit in business, you need to consider the following questions: What business am I in? Whatgoods do I sell? Where is my market? Who will buy my goods? Who is my competition? What ismy sales strategy? What merchandising methods will I use? How much money is needed tooperate my store? How will I get the work done? What management controls are needed? Howcan they be carried out? When should I revise my plan? Where can I go for help?As the owner-manager, you must answer these questions as you draw up your business plan.This publication is a combination of text and suggested analyses so you can organize theinformation you gather from research to develop your plan.

What Is a Business Plan?

The success of your business depends largely on the decisions you make. A business planallocates resources and measures the results of your actions, helping you set realistic goals andmake logical decisions.

What's in This for Me?

You may be thinking, Why should I spend my time drawing up a business plan? What's in it for me? If you've never worked out a plan, you are right in wanting to hear about the possible

benefits before you do the work. Remember first that the lack of planning leaves you ill-preparedto anticipate future decisions and actions needed to run your business successfully.A business plan offers many benefits. For example:

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A business plan gives you a path to follow.

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A plan with goals and action steps allows you to guide your business throughturbulent, often unforeseen economic conditions.

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A plan gives your banker insight into the condition and direction of your businessso your business can be more favorably considered for a loan.

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A plan can tell your sales personnel, suppliers and others about your operationsand goals.

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A plan can help you develop as a manager. It can give you practice in thinkingand figuring out problems about competitive conditions, promotionalopportunities and situations that are good or bad for your business. Such practiceover a period of time can help increase an owner-manager's ability to make judgments.

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A sound plan tells you what to do and how to do it to achieve the goals you haveset for your business.

What Business Am I in?

In making your business plan, the first question to consider is, What business am I really in? Atfirst reading, this question may seem silly. If there is one thing I know, you say to yourself, it iswhat business I'm in. Hold on and think. Some owner-managers have gone broke and others havewasted their savings because they did not define their businesses in detail. A clearly defined business will not only help your planning, it could mean greater profits.Consider this example. Mr. Jet on the East Coast maintained a dock and sold and rented boats.He thought he was in the marina business. But when he got into financial trouble and asked for outside help, he learned that he was not simply in the marina business. He was in the restaurant business with a dockside cafe, serving meals to boating parties. He was in the real estate business, buying and selling lots. He was in the boat repair business, buying parts and hiring amechanic as demand arose. Mr. Jet was trying to be too many things and couldn't decide whichventure to put money into and how much return to expect. What slim resources he had werefragmented.Before he could make a profit on his sales and a return on his investment, Mr. Jet had to decidewhat business he really was in and concentrate on it. After much study, he realized that heshould stick to the marina format buying, selling and servicing boats.

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