Retail Business Plan

SAMPLE BUSINESS PLAN FOR ABC LIMITED 2005-7 (RETAIL BUSINESS)

Business plan for ABC Retail Limited

2005 - 2007

Copyright Teneric Limited 2005 – all right reserved.


TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

BUSINESS MISSION 4

COMPANY OWNERSHIP/ LOCATION 4

EXTERNAL ANALYSIS 5

The economy & business environment 5

The local market place 6

Target Customers/ market dynamics 7

Competition 8

SWOT ANALYSIS 9

Strengths 9

Weaknesses 9

Opportunities 9

Threats 9

OBJECTIVES 10

Objective 1: To develop retail business 10

Objective 2: Recruit and train staff 10

Objective 3: Launch 10

Objective 4 : Marketing plan 10

KEY ACTIONS PLANNED FOR THE NEXT 12 MONTHS 11

MANAGEMENT TEAM/ HR 12

FULL FINANCIAL STATEMENTS 12

Year 1 sales forecast 1

Year 1 – costs forecast and profit and loss account 2

Year 1 cashflow 3



Year 1 balance sheet 4



EXECUTIVE SUMMARY

Summary

ABC Limited is a new company who are planning to open a new retail business in the centre of a local village selling fashion women’s clothes and accessories.

ABC Limited is founded by three entrepreneurs who have 18 years retail business experience between them.

The market and business

The main market sectors ABC will penetrate are women between the ages of 25 to 55 in the local area, tourists and within a radius of 10 miles. We wish to become a recognised regional name in the next year but this is our starting point.

ABC will concentrate on the latest fashions at reasonable prices. We will always have an excellent selection of fashionable accessories to entice our customers into our shop on a regular basis.

Core product offerings

The retail business will be a women’s fashionable establishment offering three types of product:

Business fashion for the new business women Fashion for middle age women who want something different Accessories for all

Revenues and profitability

Revenues forecasting for the first year of operation are £343,000 with this increasing by 8-9% for the subsequent two years. Net profits are forecast to be 33% before the salaries of the directors and before tax and interest.

Management team

ABC limited is a new company set up and run by Mrs Jones, Mrs Smith and Mr Brown who have 18 years experience in the retail business business.

The directors will invest £70,000 into the business at the beginning and repay these loans by the end of the first year. The retail shop unit is secured and will be leased for 15 years with a break at 7 if so desired.



BUSINESS MISSION

ABC's mission is to become a leading well-known woman’s fashion retail business in the local area and be first choice for fashionable business attire.

COMPANY OWNERSHIP/ LOCATION

ABC Limited started trading in 2004 and is jointly owned by Mrs Jones, Mrs Smith and Mr Brown and are trading as a limited company.

ABC Limited are based at their premises at :

12 anystreetanytownanyshireAB12 99XYUK

Telephone 0134 445600



EXTERNAL ANALYSIS

The economy & business environment

The UK economy has steady growth and the outlook is for this to continue.

General retail sales continue to improve although recent interest rate rises are set to cool demand.

LONDON RETAIL SALES MONITOR CENTRAL LONDON RETAIL PERFORMANCE STILL AHEAD OF UK MAY 17, 2004

Retail sales in Central London during April increased by 3.5% on a like-for-like basis compared with April 2003, when sales were still affected - though less than in March 2003 - by the Central Line closure and the Iraq war. The three-month trend rate of growth edged down from 5.3% in March to 5.1% in April for like-for-like sales in Central London. London sales were still slightly better than in the UK as a whole, but comparisons are distorted by the 2003 figures which showed London sales still depressed but a rebound in the UK. Improved footfall, helped by an increase in tourist numbers, boosted signature products and instore restaurants

RSM - RETAILERS REMAIN CAUTIOUS IN A CONTINUING COOL CLIMATE MAY 11, 2004

Retail sales in the UK during April increased by 1.9% on a like-for-like basis, and showed growth of 4.9% on a total basis, compared with a year earlier. The three-month trend rates of growth decreased from 2.6% in March to 1.7% in April for like-for-like sales, and from 5.9% to 4.8% for total sales. Year-on-year comparisons were still being artificially boosted by the weak April 2003, when trade was hit by the Iraq war – though to a lesser extent than in March. Cooler weather this April compared with last year's warm spring also hit sales, particularly those of lighter clothing, sandals and gardening products. Easter boosted sales of perfumery, home accessories and flowers

Source: BRC

RETAIL KEY FACTS

There are some 188,700 VAT-registered retail businesses in the UK operating in more than 310,000 retail outlets.

UK retail sales were approximately £235.6 billion in 2003. Retail accounted for 5.6% of Gross Value Added (GVA) in 2001.

(Data for 2002 yet to be released) Over a third of consumer spending goes through shops. The retail industry employed over 2.7 million people, as at the end of September 2003. This equates to 1 in

9 (11%) of the total UK workforce. Over the last five years, employment in retailing has grown by over 140,000. During the last decade, the price of shop goods rose by 20 percentage points less than the overall level of

inflation.

Source: Office for National Statistics



The local market place

Research shows that there are 25,000 women aged between 25-55 earning over £35,000 per year in the catchment area we are targeting.

There are 1,250 local businesses we have targeted for the marketing launch for business attire.

Target Customers/ market dynamics

Customer group 1

End customer is Business women

End customer need Stylish and practical business clothing Excellent personal service and value for money

Products targeted to this group Business clothing Accessories

Customer group 2

End customer is Women between the ages of 25 to 55

End customer need Fashionable clothing Excellent personal service and value for money

Products targeted to this group Fashionable clothing within the seasons Accessories

We will target customer group 1 with customer group 2’s product



Competition

Competitor summary

There are many retail businesses in existence today.

We aim to flourish on reputation.

In the immediate area there is no retail business that is catering for our target audience.

In the next town there is an established outlet but there is a need for a new and exciting venture.



SWOT ANALYSIS

Our strengths and weaknesses are shown relative to our competitors. Strengths are shown if they are better than the competitors. Weaknesses are weaker than the competitition.

Strengths

1. 3 retail business professionals with 18 years experience2. Excellent location for presence of building3. Excellent links with suppliers from current experience4. Start-up funds of £37,000 in addition to the building

Weaknesses

1. No presence2. No credibility with target audience

Opportunities

1. To be the business women and fashion conscience clothing retail experience in the local area

Threats

1. More similar retail businesses open due to our success



OBJECTIVES

Objective 1: To develop retail business

The location is already signed up for the lease to begin in two months time and has been used as an existing retail business previously.

The total fitting is estimated to cost £13,000 as we will use contractors who we know and will charge much less and produce an excellent results.

We will purchase £20,000 of stock (cost price)

Operations:

The retail business will be open from 9am to 18.30 Monday to Saturday and 11.00am to 17.00 on Sundays. As our target audience is business women we need to be opened when they are not at work.

Objective 2: Recruit and train staff

We will recruit two shop assistants as well as a shop manager.

To ensure our customers have a positive experience we will not be using part time labour.

We will recruit three weeks before opening so there is enough time for training everyone.

Objective 3: Launch

The launch event is all too important for every retail business.

The launch event can make or break you.

We will have the launch event on September 15th in the evening.

We will invite local and national business women and prominent business men’s wives as well as local press.

Objective 4 : Marketing plan

In addition to the opening night, we need to ensure we have good presence in the local market place to kick start our business. We will therefore put into place a comprehensive marketing plan to commence 4 weeks before launch. This will develop interest and communicate that we will be open for business:

Local/ free press – Teaser adverts 4 weeks before opening moving to stronger advertising closer to launch

Location – Large board advertising opening night

Local businesses – Direct mail to directors of local companies and local business women

Local magazines – There are three local glossy magazines we will take advertising and have the editor write a feature about the new retail business.

We have allowed £4,000 for the opening night and initial marketing plan



Key actions planned for the next 12 months

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Develop retail businessRecruit/ train staffMarketing planLaunch night

Strategies Cost Responsible Completion date

1. Develop retail business2. Purchase stock3. Recruit/ train staff4. Marketing plan/ launch night

£13,000£20,000£ 0£ 4,000

Mr JonesMr BrownMr JonesMr Smith

AugSepSepSep



Management Team/ HR

Mr smith is CEO and PR spokesperson/ media developer

Mr Brown is operations officer

Mrs Jones is Marketing Officer

Full financial statements



Year 1 sales forecast

Month 0 month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12 TotalRevenues

Days open in month 26 26 26 26 26 26 26 26 26 26 26 26

Clothing

Buying customers per day 10 10 10 10 10 10 10 10 10 10 10 10Average purchase price 65 65 65 65 65 65 65 65 65 65 65 65

Total clothing 16,900 16,900 16,900 16,900 16,900 16,900 16,900 16,900 16,900 16,900 16,900 16,900 202,800

Accessories

Buying customers per day 18 18 18 18 18 18 18 18 18 18 18 18Average purchase price 25 25 25 25 25 25 25 25 25 25 25 25

Total accessories 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 140,400

Total revenues 28,600 28,600 28,600 28,600 28,600 28,600 28,600 28,600 28,600 28,600 28,600 28,600 343,200

Copyright Teneric Limited 2005 – all right reserved


Year 1 – costs forecast and profit and loss account

Month 0 month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12 Total

Costs incurred

Direct costAverage cost of sale (40%) 11,440 11,440 11,440 11,440 11,440 11,440 11,440 11,440 11,440 11,440 11,440 11,440 137,280 Credit card fees 3% on 80% 686 686 686 686 686 686 686 686 686 686 686 686 8,237 Start-up costs 17,000 -

- Staff (2 members + manager) 4,125 4,125 4,125 4,125 4,125 4,125 4,125 4,125 4,125 4,125 4,125 4,125 49,500

- Misc 50 50 50 50 50 50 50 50 50 50 50 50 600 Rent 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000 Rates/ elect etc 500 500 500 500 500 500 500 500 500 500 500 500 6,000 Insurance 250 250 250 250 250 250 250 250 250 250 250 250 3,000 Marketing 250 250 250 250 250 250 250 250 250 250 250 250 3,000 Accountancy/ legal 146 146 146 146 146 146 146 146 146 146 146 146 1,750

Total costs 17,000 19,947 19,947 19,947 19,947 19,947 19,947 19,947 19,947 19,947 19,947 19,947 19,947 239,367

Net profit - 17,000 8,653 8,653 8,653 8,653 8,653 8,653 8,653 8,653 8,653 8,653 8,653 8,653 103,833

Tax 1,731 1,731 1,731 1,731 1,731 1,731 1,731 1,731 1,731 1,731 1,731 1,731 20,767 Dividends 0 0 0 0 0 0 0 0 0 -

Net profit after tax - 17,000 6,922 6,922 6,922 6,922 6,922 6,922 6,922 6,922 6,922 6,922 6,922 6,922 83,067



Year 1 cashflow

Month 0 month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12 TotalCashflow

Opening balance - 3,000 3,773 4,546 3,198 1,851 504 4,157 2,809 1,462 5,115 8,768 12,420 - -

Directors loans 40,000 15,000 15,000 70,000

Loan repayments - - - 10,000 - 10,000 - 10,000 - 5,000 - 10,000 - 10,000 - 5,000 - 5,000 - 5,000 - - 70,000 Credit card income + 8 wks - - 22,880 22,880 22,880 22,880 22,880 22,880 22,880 22,880 22,880 22,880 228,800 80% cash receipts 5,720 5,720 5,720 5,720 5,720 5,720 5,720 5,720 5,720 5,720 5,720 5,720 68,640 Stock purchase - 20,000 - 20,000 Costs - instant - 17,000 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 19,947 - 256,367

Tax - next year

Dividends instant - - - - - - - - - - -

Closing balance 3,000 3,773 4,546 3,198 1,851 504 4,157 2,809 1,462 5,115 8,768 12,420 21,073 21,073

Year 1 balance sheet



Month 0 month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12Balance sheet

Cash 3,000 3,773 4,546 3,198 1,851 504 4,157 2,809 1,462 5,115 8,768 12,420 21,073 Stock 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Debtors 22,880 45,760 45,760 45,760 45,760 45,760 45,760 45,760 45,760 45,760 45,760 45,760 Current assets 23,000 46,653 70,306 68,958 67,611 66,264 69,917 68,569 67,222 70,875 74,528 78,180 86,833

Tax creditor - 1,731 - 3,461 - 5,192 - 6,922 - 8,653 - 10,383 - 12,114 - 13,844 - 15,575 - 17,306 - 19,036 - 20,767

Assets - liabilities 23,000 44,922 66,844 63,767 60,689 57,611 59,533 56,455 53,378 55,300 57,222 59,144 66,067

Shareholders funds

P&L account - 17,000 - 10,078 - 3,156 3,767 10,689 17,611 24,533 31,455 38,378 45,300 52,222 59,144 66,067

Directors loans 40,000 55,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 repayments - - - - 10,000 - 20,000 - 30,000 - 35,000 - 45,000 - 55,000 - 60,000 - 65,000 - 70,000 - 70,000 net loan 40,000 55,000 70,000 60,000 50,000 40,000 35,000 25,000 15,000 10,000 5,000 - -

Total 23,000 44,922 66,844 63,767 60,689 57,611 59,533 56,455 53,378 55,300 57,222 59,144 66,067


Retail Business Plan

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