A well-prepared business plan is one of the key challenges in successfully opening your own store. Every establishment requires a good knowledge of the market situation and target group. These and other factors must be considered in the business plan. Especially in sectors with a high level of competition, a well thought-out business concept is vital to survival. A convincing business plan is also a significant argument for investors.
Shop opening: requirements of the retail trade to be observed
With the opening of their own shop, founders become part of a competitive industry. Retail is characterized by high growth in many products. Customers and end consumers are becoming more demanding, and the challenges in this sector are growing. Purchasing and sales require a precise preparation especially for start-up founders. In addition to the business requirements, prospective traders also face a number of legal challenges. Also tax requirements want to be mastered. The retail industry is first and foremost a world of specialist shops. Shops often specialize in the needs of a specific clientele. This requires a correspondingly exact knowledge of these products in their field of expertise. A detailed analysis of the industry as well as detailed information on the respective markets are important prerequisites for success. Solid founders have founders in retail, for example, by a training or education as retailers in retail. But intensive work on the products to be sold and precise knowledge of the target group also help start-ups in this sector.
Founding in retail and their possible start-up difficulties
In any case, business start-ups in retailing are subject to certain initial difficulties. An overview of the typical startup problems helps founders to partially avoid or contain them.
Among the main causes from which even ambitious business projects in retail often fail, include:
- missing or insufficient seed capital
- Ignoring risks such as illness or sales slumps
- lack of knowledge of the industry
- lack of business know-how
- lack of planning in advance
- lack of liquidity or insufficient seed capital
- Errors in the cost calculation or bad investments
- undefined marketing
A good business plan contributes to the reduction of these typical hurdles. Extensive information about the market and industry as well as their assessment are prerequisites for success in every segment. The business plan therefore includes many factors, ranging from the assessment of one’s own abilities to the analysis of market factors and target groups to financial planning.
Business plan: content and requirements
The primary goal of business plan creation is to pin down the business plan. The idea is realistic and to be designed taking into account market and target group. All start-up or business projects must take account of numerous factors that are of varying importance depending on the industry. In terms of retail, there are some peculiarities to other business plans. Here is a special focus on location and target group related factors. Selection and analysis of the location for the business project are crucial to success here. Furthermore, retailers are particularly dependent on good marketing with a sophisticated marketing mix.
Selection of the location
The explanation of the choice of location in the business plan takes into account factors such as accessibility and purchasing power. The site analysis includes comprehensive information on the possibilities and forecasts at the chosen location. The competition situation is of particular importance. Competitors, their strength and their position in the market must be considered. If it is established and attractive competitors at the site, the establishment of a new store can be problematic. Basically, the analysis of a location requires reliable data sources. In the case of questionable data, independent data collection by founders may be advantageous.
Target group selection
Audience analysis is another important cornerstone in the business plan. The knowledge of potential customers is important with regard to their own offer. The definition of the target group includes information such as age, gender, number and mobility. When it comes to the selection of the products and services offered, the offer must be geared towards the more demanding target groups. Unique selling propositions are becoming more and more important, especially in the case of segments with a high degree of competition. With a USP (Unique Selling Proposition), founders in the retail sector can set themselves apart from competitors and possibly best serve a specific target group.
Marketing and pricing structure
Of great importance is the design of the price structure as well as the marketing of the own products. Different market segments show significant differences in the margins. When forecasting and estimating margins, the product type as well as the competitive situation must therefore be taken into account.
In terms of attracting new customers and retaining existing customers, a thoughtful marketing mix is important. Also marketing measures belong to the preliminary planning and thus into the business plan. An important marketing trend in retail is the so-called cross-channel marketing, which relies on a mix of digital and analogue marketing measures. Printed advertising is used as well as marketing in modern communication channels such as social media . In any form of marketing, it is important to constantly check the effectiveness and, if necessary, correct the measures.