Deciding to become a business owner is incredibly exciting but can quickly become overwhelming as you begin to research different industries, figure out financial constraints and prepare to open your doors to the community.
Formulating a business plan can help put everything into perspective and is one of the most crucial components of being able to successfully run your business. Your business plan plays a pivotal role in securing funding for your business: it shows potential lenders you’ve taken the time and done the research behind every aspect of your operation, and is taken into account when determining whether or not their investment is a smart choice.
While creating a strong, informative business plan is straightforward in structure, the more time you put into including every detail, the better. Here’s what to expect when creating a resale retail business plan – making sure your transition into entrepreneurship is as smooth and stress-free as possible.
Executive Summary
Your executive summary provides the reader or potential lender with an overview of your business. It should explain your reasoning behind the particular business and what your goals are, as well as your business synopsis, mission and vision and objectives.
The business synopsis is all about what your business is, and shouldn’t be more than a paragraph or two. When it comes to stating your mission and vision, focus on the purpose of your business and your biggest goal you’d like to achieve. As a Winmark franchisee, your mission and vision will vary depending on the brand you choose, but make sure it aligns with the products you’ll be selling within the community. Your company objectives should be in a succinct, well-thought-out bullet point list of your key goals – make sure to keep them short and to the point.
Company Description
This section is dedicated to showcasing your vision for your business and acts as one of the most important aspects of your business plan. It should include the logo, concept, ownership and business structure, design and layout. Use this section to set your business apart from local competition.
Your company description is essentially an elevator pitch on your business – this is time for you to shine! This business plan will be for a specific brand of the Winmark portfolio, especially since each of our brands are incredibly unique in both what they offer and who their target market is.
For example, if you are awarded a Play It Again Sports franchise location, you’d want to talk about how sports and extracurricular activities are becoming increasingly expensive, and many children with parents on a budget are unable to participate. Having a Play It Again Sports within the community allows families the ability to provide their kids with the equipment they need at a reasonable price – ensuring every child has the opportunity to play.
Target Customer Market
Once you’ve figured out your vision for your store, take some time to research and choose your target market. Analyze how other local resale shops are meeting the needs of your market – whether it’s children’s clothes or sporting equipment. This section serves as proof to potential lenders that there’s enough demand for your products and services in the community and that your business is a safe investment.
Depending on the Winmark-specific brand you choose, you’ll need to carefully outline your target market. Under the Winmark umbrella, you have five different brands to choose from: Play It Again Sports, Music Go Round, Once Upon A Child, Plato’s Closet and Style Encore.
Each of these brands has a unique target customer market – and you’ll be able to showcase that through your research. Play It Again Sports appeals to parents looking to get their kids into extracurricular activities while staying within budget, thanks to the increasing costs of youth sports, whereas Once Upon A Child appeals to families that are looking to save money on children’s clothing since they have a tendency to quickly outgrow articles of clothing, and want to be able to dress their children in high-quality products without the high price tag.
Industry Analysis
While an industry analysis may seem repetitive, it serves multiple purposes. Overall, researching the retail industry can be a great education tool and help you better understand the industry within you’ll be operating. Additionally, this research can improve your strategy for marketing and engaging within the community. Lastly, this section proves that you are an expert on the industry, and have taken the time to learn as much as you can and research everything you might need to know. This knowledge can play a pivotal role in whether or not a potential lender decides to invest in your dream.
Competitive Analysis
Just like your industry analysis, this section covers the research you’ve done on indirect and direct competitors of your business – direct competitors are most likely going to be local businesses who sell similar products, whereas indirect competitors are the other options consumers have access to, like online competitors.
For each direct competitor you include, ensure you have an overview of their business, along with a list of their strengths and weaknesses, as well as their pricing and how they meet customer needs. Finally, your business plan should include how you plan to hold an advantage over the competition, mentioning aspects like superior products and services, unmet needs that your target market is looking for, convenience, accessibility and price.
Products and Services
This section is solely focused on discussing the details of what you’re planning on selling. Make sure you include who your suppliers will be, as well as payment terms, how you’ll manage inventory and what your profit margin will be. Usually, investors want to see a profit margin of 25 to 50 percent, so discuss how you plan to price your items.
As a Winmark franchisee, your point-of-sale (POS) system will keep track of your inventory instead of manually updating it every day. Additionally, your suppliers also serve as customers, and with your resale retail shop placed in the community, you get to create an economic cycle and have a positive impact on the environment.
Marketing and Sales Strategies
Potential financial lenders need to know that you have plans in place to maximize your engagement within the community. Research other resale shops in your area and look for how they price their items to determine the right price range for your products, making sure to also include how you plan to draw customers to your store. Winmark’s point-of-sale system automatically calculates cost and retail prices based on certain criteria.
Human Resources
Use this section to show that your business will have the necessary human resources to be successful. Discuss your key management personnel, their backgrounds and how your store will be staffed. Make sure to include personnel compensation and benefits, as well as employment policies and procedures.
Financial Plan
While this section can be one of the most difficult aspects of the business plan, it plays an incredibly integral role in how you come off to your reader. This section is dedicated to fleshing out your company revenue and profitability model, assess the amount of capital your business needs in order to get going and addressing the individual purposes for these funds and your expected future earnings. Don’t forget to include a break-even analysis, balance sheets and cash flow statements – ensuring your reader can see how much work you’ve put into planning your business and that an investment with you is a step towards success.
The jump in the world of business ownership is a big step, but will set you on an exciting new journey as a first-time entrepreneur. Having a business plan in place not only takes away the stress of potentially forgetting a crucial element before opening your doors, but also acts as a guide throughout the entire process.
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