How to write a retail business plan for a clothing store

Whether you’re thinking about opening a brick-and-mortar fashion boutique or launching an ecommerce store, you need a retail business plan. 

Just like any other business, a clothing store is a risky venture that can quickly go off the rails if you don’t carefully plot out the details. 

No entrepreneur has ever achieved success solely by trusting their gut. They all had a business plan outlining their goals and describing the pillars of their business, from what customers they serve to how they make money. 

Besides, a business plan is the first thing investors want to see once they hear your pitch. If you don’t have a retail business plan, good luck getting funding for your project!

With that said, don’t let yourself be intimidated by the thought of having to plan out your entire business. Your business plan doesn’t need to be an object lesson: the point is to put enough time and effort into making it a useful roadmap for your business. 

And if you’ve never written a business plan before, we’re here to help!

In this part of our series on how to start a clothing boutique, we’ll walk you through the steps of putting together a retail business plan. We’ll give you a structural template to follow and include some tips on how to make every section as effective as possible. 

Let’s get started. 

Whola is a wholesale marketplace that makes it easy for fashion store owners to buy hot-selling inventory with just a few clicks. Sign up now and start shopping the latest styles from our 100+ unique Australian brands! 

What is a retail business plan?

A retail business plan is a document that contains all the essential information about your retail business. It outlines your business’s short and long-term goals and provides insight on how you plan to achieve them. It answers questions like:

• How will your business run?
• What milestones will you achieve in the next 2-3 years?
• How much money do you need to get it off the ground?
• What marketing strategies will you use to attract customers?
• What are your staffing needs?

… and more.

You shouldn’t treat your retail business plan as a static document: in fact, you should update it every year as your company grows and your goals change. 

Why do you need a retail business plan?

There are countless reasons why you need a retail business plan. 

First of all, it shows that you’re serious about starting your own business and have done the legwork – with all the necessary research and calculations – to formally plan it out. You’ll need that kind of commitment if you want to get a new venture off the ground. 

Here are some more reasons why having a retail business plan is vital:

1. Clarify your ideas: Writing a business plan is a great planning exercise. It helps you make sense of all the ideas swirling around in your head and turn them into actions. 
2. Set goals: Without goals to work towards, your business would be directionless. A retail business plan helps you establish realistic objectives for the coming years and come up with strategies to achieve them.  
3. Focus your time and energy: A business plan is like a compass. It helps you stay on course so you don’t waste time and energy on distractions that don’t serve your business goals.
4. Think strategically: A business plan helps you focus on outcomes and see the big picture instead of getting lost in the nitty-gritty of your everyday tasks as a business owner.  
5. Really get to know your customers: Writing a business plan forces you to dig deep and really get to know the customers you’ll be targeting. You’ll find yourself referring back to this research as you try to find ways to better serve your customers in the years to come.
6. Get funding for your business: A business plan is an indispensable resource to have up your sleeve when seeking financing for your venture. It helps investors judge your business’s viability and growth potential and decide if they want to invest. 

In some cases, writing a business plan can help you realise that your business idea is not as feasible as you thought it was after all. If that happens, you’re better off pivoting before you invest more time into a project that’s unlikely to bring you success.

What should a retail business plan for a clothing store contain?

Your retail business plan should include an executive summary, an in-depth description of your company, thorough market research, a detailed marketing plan, an effective operational plan and a well-thought-out financial plan. 

Below, we’ll describe each of these sections in detail and explain what they should contain.

How to write a retail business plan – Template

1. Executive Summary

The Executive Summary is a synopsis of your business plan: it highlights the key points you will address in the document.  

Our tip is to write this part last after you’ve already written the rest of your business plan. Then, you’ll have more clarity on the direction your plan will go in. 

It’s also important to make sure that your Executive Summary is compelling and grabs the reader’s attention enough that they want to keep reading. 

Here are some key points it should contain:

• Business synopsis: What does your business do? Explain the history of your company and give an overview of your business plan over the next two to three years. 
• Business goals, mission, and vision: What does your business want to do?
  State your company’s values, explain why your company exists and what it wants to achieve. 
• Product description and differentiation: What do you sell, and what makes you different? Provide a brief description of the products you sell and what makes your business stand out from other businesses that sell the same type of products.  
• Target market: Who is your ideal customer? Describe your customer avatar to give the reader an idea of who you’ll be targeting and what their behaviour will be towards your product. 
• Marketing strategy: How will you reach your customers? Explain the gist of how you will target, engage, and convert potential customers.
• Logistics and operational plan: Who’s involved in the business? Describe the steps and the players involved in getting your product to your customers. Start from product sourcing all the way to delivery.
• Current financial state: What do you currently earn in revenue? 
• Objective financial state: What do you foresee earning in revenue for the following two to three years?

2. Company Description 

The Company Description provides an overview of the key aspects of your business. Think of it as ​​a snapshot of what your company is all about. 

• Company name: What is the official legal name of your company?
• Business structure: Are you a sole trader, partnership, company, or trust? 
• Management team and organisational structure: Who are the key members of your team? What role do they play?
• Location: Where are your headquarters?
• Company history: When did you start your company and why did you launch it?
• Mission statement: What is your company’s reason for existence?
• Products and services: What are you selling?
• Target market: Who is your target customer? 
• Competitive analysis: Who are your competitors and what sets you apart? What is your competitive advantage?
• Objectives: What are your short-term and long-term objectives? What SMART goals (Specific, Measurable, Achievable, Relevant and Time-bound) have you set?
• Vision statement: What does the future of your business look like? 

Writing the business description of your business plan should be fun. Pour as much passion into it as you can. The aim is to share your enthusiasm for your business with whoever is reading your business plan. 

Here are a few tips to keep in mind when learning how to write a company description:

1. Answer the 5 Ws and 1 H (Who? What? Where? When? Why? How?)
2. Keep it simple and easy to understand.
3. Proofread.

3. Market Research

Market research is the process of collecting information about your potential customers. It helps you define your target market, understand their behaviour and build your buyer personas. Who are they? What are their shopping habits? What competitors are also targeting them?

There are two types of data you can use in your market research (if possible, you should include a mix of both):

1. Primary data: collected by you or an agency you hire.
2. Secondary data: collected from existing resources such as reports on government-funded research projects or studies done by private organisations regarding the state of specific markets or industries.

Here’s what you should include in your market research:

• Market size and competitors: A great way to calculate market size is by calculating your TAM, SAM and SOM. These acronyms stand for Total Available Market, Serviceable Available Market and Serviceable Obtainable Market respectively. They each represent a different subset of the market and help you set realistic revenue goals, taking into account factors like competition. We go into more detail in our article on starting a clothing boutique. 
• SWOT analysis: SWOT Analysis is a strategic planning technique used to understand what a company does best and what needs to be improved. It helps you identify your business’s Strengths and Weaknesses as well as the Opportunities and Threats it faces. Check out this guide on how to draw up a swot analysis matrix. 
• Market trends and forecasts: You’ve already researched what the market looks like right now, but what will it look like in the future? What trends can you see emerging that will define it 5-10 years from now? For example, in the fashion retail world, the rapid growth of ecommerce is something to take into consideration. 
• Customer avatar: A buyer persona or customer avatar is a description of your ideal customer, including everything you know about them from their interest and motivations to their spending habits. See our customer avatar workbook to learn how to create one step-by-step.  

4. Marketing Plan

The marketing plan is one of the most important sections of your retail business plan. It explains how your business will access your target market: in other words, how your customers will find your products. 

Without customers, you won’t make any money: so make sure you dedicate as much time to crafting this part of your business plan as possible.

The four Ps of marketing is a good place to start. We wrote about this in detail in our blog post on how to build an effective retail strategy but let’s do a quick recap. 

When used together, the four Ps of marketing – Product, Price, Promotions and Place – help you effectively market your products to your customers. 

• Product: Describe the items you will sell that appeal to your customer avatar and set you apart from your competitors. Include how you will source these products (from clothing wholesalers or other suppliers).
• Price: Outline a pricing strategy that will allow you to make a profit on each item you sell. 
• Promotion: Describe your branding strategy and list the marketing tactics you will use to attract customers to your store. This can include in-store and storefront marketing tactics, social media, SEO (Search Engine Optimisation), print media advertising, influencer partnerships, radio advertising, partnerships with other businesses and more. Make sure to have a budget for all the tactics you plan to use. For online stores, a good rule of thumb is to spend as much on online marketing as you would spend on rent for a physical space.
• Place: Describe your fashion boutique’s strategic location.

Your marketing plan should also include your competitive moat. Your competitive moat – or defensible competitive advantage – is what sets you apart from your competitors. Make sure it’s something that’s unique to you and can’t be easily replicated – like your brand or your social media strategy. 

5. Operational Plan

In the first section of your retail business plan, you explained your objectives and purpose. Your operational plan describes how you will make all that happen from a logistical perspective.

You can divide this section into everyday processes that include all the tasks involved in running your clothing business such as: 

• Suppliers
• Inventory
• Cleaning
• Shipping
• Customer service

If you want to learn more about the fashion supply chain and the logistics of running a clothing store, check out our article on wholesalers, distributors, and suppliers.

6. Financial Plan

The financial plan is just as important as your marketing plan – if not more important. This section describes your revenue and profitability model. 

It answers questions like how much capital you need and how much you need to sell to make a profit. 

• Startup costs: This will vary depending on whether you’re planning to start an online or an offline clothing store. See our previous article for cost comparisons. 
• Funding options: While government grants are usually hard to come by, there are alternative financing options available to fashion store owners that can help you kickstart your business. See our article on how to start a clothing boutique for ideas.
• Break-even analysis: Calculate how many sales you need to make to pay for the fixed and variable costs of running your business.
• Sales forecasts: Calculate your expected sales revenue. This involves several steps, from looking at historical sales data to anticipating market trends. If you’ve never done it before, this beginner’s guide to sales forecasting is a good place to start. 
• Balance sheets: Include a summary of all your current business assets and liabilities.
• Cash flow and income statements.

That’s it! Now you’re ready to start writing a killer retail business plan for your clothing store

Writing a retail business plan helps you focus your thoughts, set goals and lay out the strategies you’ll use to achieve them.

It’s an essential tool for all fashion entrepreneurs, whether you’re experienced or about to launch your first venture.

Using the retail business plan template above, you can put together a business plan that will help guide your actions and carry your business to success. 

Frequently asked questions about writing a retail business plan

What are the 6 main sections of a business plan?

Your business plan should include the following 6 sections: Executive Summary, Company Description, Market Research, Marketing Plan, Operational Plan and Financial Plan. First-time entrepreneurs often neglect the Financial and Marketing Plan, which can lead to problems in the future. Don’t make their mistake!

How do I write a business plan for a clothing store?

Writing a business plan for a clothing store is not complicated – you just have to invest some time and effort into doing the research. You can start by using the template above and filling it with information about your business. Take your time, don’t rush it. And most of all, don’t forget to proofread! 

What are the most common mistakes that founders make when writing a business plan for a clothing store?

The biggest mistake is not writing a business plan at all. It’s critical to have a plan so all the actions you take can work towards the goals set out in that plan. Even a canvas-style business plan is useful because it helps to focus thinking and actions. The second biggest mistake is not giving the Marketing Plan the priority it needs. 

What are the most important parts of a retail business plan?

Although every section of a business plan is essential, there are two sections you have to pay special attention to, especially when starting you’re just starting out. These are the Marketing and Financial Plans. They help you work through the process of pricing your products, determine how much stock you need, and drive traffic to your boutique. 

Whola is a wholesale marketplace that makes it easy for fashion store owners to buy hot-selling inventory with just a few clicks. Sign up now and start shopping the latest styles from our 100+ unique Australian brands!