Start on the right foot and build your small business with strategic planning.

There’s no secret formula to starting a profitable business but, in the retail industry, a retail store business plan is the closest thing to it.

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All good retail stores need a strong base, and we're not just talking about location. 

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A retail business plan ensures you've left no stone unturned when defining your roadmap, ensuring a competitive advantage, predicting cash flow, and handling inventory management.

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Without a good business plan, your retail store might:

• Struggle to manage retail operations, including inventory.
• Find it difficult to make financial projections (and secure funding).
• Have misaligned business goals amongst the management team.
• Discourage potential investors.
• Forget key operational in-store needs, like a POS system.

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And that could just be the tip of the iceberg! 

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Yet knowing how to create a plan is tough, especially if you’re trying it for the first time.

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In this article, you'll find out how to hone your business idea with detailed planning. This includes a retail business plan template to help you set up a successful business and vital formulas like how to calculate ROI for a retail store.

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Table of contents

1. Why do I need a retail store business plan?
2. What do I need before writing a retail store business plan?
3. What to include in a retail store business plan
4. How Kem simplifies operations for retail stores

[All great business plans need a fast and secure payment solution. Kem handles the heavy lifting for small retail businesses in Kuwait. Sign up now and download the Kem app for free on Google Play and Apple today!]

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1. Why do I need a retail store business plan?

Many entrepreneurs in Kuwait are asking ¨how do I start a successful retail business in Kuwait¨ right now. That's because retail is booming in the Middle East, with plenty of profits to be gained. 

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You might feel that your business idea is ready to go, but sitting down to write a retail business plan will make all the difference. Here's why:

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A good business plan creates a stronger strategic approach when opening a retail shop. It helps you better navigate start-up costs, lay out a step-by-step action plan, trump potential competitors, and ensure you have a sound business model.

If you open a retail store without a business plan, they may find success much more challenging, even with a favourable market. Poor planning can stop you before you even begin, especially if you're trying to lure in potential investors or secure a start-up loan.

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Make no mistake, a successful business hinges on a solid retail business plan.

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2. What do I need before writing a retail store business plan?

Before you start putting pen to paper, there are four major components you should prepare for your retail store business plan.

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Managing an SME in Kuwait is no small feat, so being strategic and thorough is vital.

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Market research

The insights you find from market research will help shape your business strategy and formulate a roadmap. 

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As Josh Kaufman, author of international best seller, The Personal MBA: Master the Art of Business, said ¨Market research is the business equivalent of look before you leap¨.

¨Market research is the business equivalent of look before you leap¨ - Josh Kaufman, Author 

Without knowing everything about your target market, be it a clothing shop or convenience store, you risk starting a business blind. If you're struggling to find profitable business ideas, Kuwait's growing entrepreneurial culture right now can inspire you.

If you already know which market you’d like to target, you can start conducting your market research by:

• Studying market trends and looking for gaps in the market.
• Finding qualitative and quantitative online data.
• Understanding the expectations of your target audience.
• Speaking with industry experts and business owners.

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Competitors

 It’s common for rivals to share a good business idea.

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But don't let that scare you, use your competition to your advantage! By conducting a competitor analysis, you learn a lot about strengths you want to emulate and weaknesses you'd like to improve upon.

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Here's how you can better understand your competitors:

• Use their services, there's nothing like hands-on experience.
• Conduct a SWOT analysis to understand your competitors' strengths, weaknesses, opportunities, and threats.
• See what people are saying online, particularly in the news or on social media.
• Dive into their wider operations, like existing marketing plans and how they execute loyalty programs.
• Benchmark your competitors' pricing for future reference.

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Location

With physical retail stores, it's all about location! Getting a better understanding of where you want your shop to be should be a part of any business plan for retail stores.

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• Find where your target demographic shops.
• Gauge the popularity of different neighborhoods in Kuwait.
• Find numbers or observe the levels of foot traffic.
• Note the surrounding stores in the area.
• Get a better understanding of rental costs.

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Your retail business will be tied to your business license so being proactive with your location search will make starting your business less stressful.

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Growth strategy

Setting short-term goals and a long-term roadmap helps business owners manage their SMEs more effectively. 

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Don't get caught up with just the launch of your retail store, any good business plan needs long-term sustainability.

Potential investors may be particularly interested in how your business plans to grow its customer base, merchandising and retail operations. They may look at models such as Kurve’s Four Growth Strategies, which look at growth areas for new and existing markets.

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An overview of a new business’s four growth areas

Source: Kurve

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Here are some specific growth opportunities that you can start exploring:

• Expanding product lines.
• Opening a secondary retail store.
• Developing a new marketing strategy.
• Building strategic partnerships.
• Reducing costs through technology and operational efficiency. 

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3. What to include in a retail store business plan

The big question you have might be ¨How do I write a business plan for a retail store? ¨. 

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You’ll need to address several main topics to communicate your plans efficiently.

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Using this retail business plan template, you can lay out all the fundamentals of your business and ensure your startup has water-tight operations.

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Executive summary

Ever heard of an elevator pitch? That's exactly what your executive summary should be: a quick synopsis of the most important points within your retail store business plan.

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This may be the most important page because not everyone, including potential investors, will take the time to read your business plan cover to cover. Your summary should give them a good glimpse at a glance.

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Ensure you fit the following onto a single page:

• Overview of products and services.
• Introduction to business owners and management team.
• Summary of financial projections.
• Your marketing strategy at launch.
• The current market landscape and competitive analysis.
• Who your customer base is.

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Business description

In this section, you can go more in-depth about your business goals. Here are two main questions you should focus on answering:

• As an entrepreneur, why did you want to start this business?
• What is the ultimate mission of your retail shop?

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You might use data to demonstrate the motivation behind your retail business, for example:

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“In recent years, I've observed an 11% growth in the home gardening industry, with target customers continuing to grow.”

You can expand by crafting a mission for the first few years of operations: “Our ultimate goal is to be the Apple of houseplants, with retail operations spanning 5 locations in 3 years.”

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This section should ultimately package the ‘why’ and ‘what’ of your business.

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Market analysis

When you started crafting your business plan, you may have wondered how to do market research for a retail store. Now's the time to show off all the knowledge you've gathered!

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Ensure the research you have conducted aligns with your business description and goals. In this section, you can show how your retail store would cater to a gap in the market. This can be in the form of:

• Data collected
• News sources
• Testimonials
• Competitor analysis

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Financial plan

Here's where the rubber meets the road. Business partners, banks and investors want to see the numbers associated with start-up costs and financial projections. To do this, you’ll need to know things like how to calculate your break-even point. 

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Here are a few calculations that should feature in your retail store business plan:

• Your SME's chosen revenue model
• Upfront costs for setting up a business in Kuwait.
• Projected cash flow and balance sheet
• Break-even calculations

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You'll also have to know how to calculate ROI for a retail store as this will let you gauge what you've gained vs what you've put into the business. The formula is simple:

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ROI = ( Net Profit ÷ Total Investment ) x 100%

For example, if your net profits were 1,000 KD and total investments came to 2,000 KD:

ROI = (1,000 ÷ 2,000​) ×100%

ROI = (0.5) ×100%

ROI = 50%

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In this case, the retail store's ROI is 50%. This means that for every Kuwaiti dinar invested, the business gained 0.50 cents in profit.

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Company hierarchy

Your management structure and team members say a lot about your business! 

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You can introduce the different titles, roles and responsibilities that will make up your retail business. Think of this like a mock organization chart.

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For example, along with your upper management team, your retail store might include:

• Store manager
• Sales associates
• Cashiers
• Customer service representatives
• Security officers
• Stockroom associates
• Marketing coordinators

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Providing this clarity helps with how day-to-day operations will eventually work.

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Products and services

Dive deep into your product offerings and their appeal to your target demographic. This can cover products or services at launch and plans for future expansions.

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Beyond that, within your retail business plan, it's crucial to tease out the specifics of acquiring, managing, and selling your products. For example, business owners should be able to answer these questions:

• Where will you source your products?
• How to control inventory in retail stores?
• Will you require warehousing or storage?
• How will logistics be managed?
• What quality control measures will you implement?
• What happens if your supply chain is disrupted?

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Now would also be the time to ask yourself how to identify a KPI of a retail store and include this in your retail business plan. Relevant parties will want to know what you´ll be looking at within your products and services to show growth beyond sales.

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For example, you might also focus on recurring revenue, inventory turnover or average transaction value. All these data points help you to benchmark growth and success.

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Marketing and sales strategy

How you plan to sell products and market your retail business is key.

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Brian Halligan, co-founder of HubSpot, shares some food for thought on marketing strategies: "To be successful and grow your business and revenues, you must match the way you market your products with the way your prospects learn about and shop for your products."

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"You must match the way you market your products with the way your prospects learn about and shop for your products."  - Brian Halligan, co-founder of HubSpot

These efforts will tie into the KPIs of your retail store. Here, you'll need to outline your overall plan at launch and beyond. This includes:

• Defining your brand and product USPs.
• Pricing and your justification behind it.
• How you'll leverage your location and if you'll supplement your retail store by utilizing e-commerce platforms.
• Promotional strategies, including how you might leverage social media.
• Merchandising displays and loyalty programs.

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When considering how to identify a marketing KPI of a retail store, you can measure foot traffic, customer retention, brand awareness and which marketing channels are most effective.

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Operational plan

Last but not least, an operational plan helps to highlight how everything within your retail store and beyond will work. 

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This will include everything from staffing and machinery used, to vital technologies and supplier relations.

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Be thorough in every department, you´ll have to consider things like how to control inventory in retail stores and what insurance your retail employees need.

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This can include but is not limited to, defining:

• Layout and design of the retail space.
• Maintenance and repairs.
• Point-of-sale (POS) systems and the checkout process.
• Managing supplier quality and vendor relationships.
• Regulatory compliance with the Kuwaiti government.
• Staff scheduling and training.
• Customer service protocols.
• Security and surveillance.

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Additional information you can include

Retail store business plans don't have to follow a rigid format, there are supplemental things you can include to help build your case when pitching for financial services or to investors.

• Highlight any expertise or background that might make an impression.
• Emphasize your commitment to innovation and emerging technologies.
• Include sustainability initiatives or practices that your retail store might engage with.
• Incorporate health and safety standards that will be observed.

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It’s all about showing your retail store business plan is well thought out and putting your best foot forward.

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4. How Kem simplifies operations for retail stores

When starting a new retail business, getting everything just right can feel like threading a needle. Along with a solid retail business plan, daily operations need to be fine-tuned.

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There's nothing that makes a small business suffer like issues with payment gateways and mishaps with inventory.

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Kem's new POS system removes all these worries by:

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• Streamlining retail operations with easy inventory management.
• Powering hassle-free instant payments.
• Providing an overview of financial projections and retail cash flow.
• Offering CRM tools to build customer loyalty.

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Use Kem's arsenal of tools to make your retail operations more intuitive. With instant payments, inventory management and financial insights you have everything you need to save time and money.

Work smarter not harder with Kem!

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[Kem powers small businesses by making payment and retail inventory admin more manageable. Start sending, requesting, and receiving payments with just a tap. Download the Kem app for free on Google Play and Apple today!]