A recent survey by Business Plan Pro showed that startup companies that wrote a business plan were twice as likely to succeed as companies that wrote no plan.
You should take that with a grain of salt, because Business Plan Pro is in the business of selling its software, but the point holds, and business management professionals have said for decades that if you really want to succeed, you write a business plan. And if you want outside funding, like a loan or investor capital, don’t even bother without a business plan.
The business plan you write for your consignment shop does not have to be a book, and it does not have to be intimidating. If you can only manage five pages, that’s a great start. Here are the main parts of a standard business plan:
1) Executive summary. You actually write this last, but let’s talk about it first anyway. Think of this as an elevator speech that summarizes your business plan. In other words, if you had to summarize your entire business plan into a few paragraphs that would inspire and impress someone so much that they would give you money to start your business, that would be the executive summary.
2) Business analysis. This is where you outline what structure your business will have (LLC, limited partnership, etc) and give a high-level view of what you want to do, who your customers will be, how much competition there is and how strong or weak it is.
3) Marketing strategy. How will you promote this business? How much will it cost to promote? What advantages will selecting a specific niche give you? Frequently people do a SWOT analysis (strengthes, weakenesses, opportunities and threats) for both their business and their top 1-3 existing competitors.
4) Products and Services. Hopefully you really like what you’re going to be selling, and you are really excited about any other services you’ll be offering (like being an eBay consignment store, for example). Write about those in detail, including where you’ll get your goods and how you’ll manage inventory.
5) Management Plan. Who are you? Why would you be good at this? If you are going to have a store manager, and if you’ve already selected a couple of employees, now is the time to introduce them and sing their praises.
6) Financial Plan. Get help from an accountant if you’re anxious about doing this, but you can probably do it on your own. This is where you “do the math” to prove your consignment shop can be a financial success. You’ll need to know about costs for rent and other expenses, like advertising, payroll, electricity, a website, paying consignees and everything else. Include what you need to buy to start your shop.
And that’s it. Really, the main benefit of writing a business plan is not necessarily the final product — its the work it makes you do to get those final printed pages. By the time you are done writing your business plan, you will be keenly aware of all the details about your business. You will have a realistic idea of what you can and can not do, and you’ll know how much it will all cost. This is essential information for your first few months of business.
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