Help with business plan please!!

katie1630

I am currently writing up a business plan for starting up a shoe boutique but I am struggling horrendously with the cash flow projections.
I have researched as much as I thought I could but it doesn't make sense to me to be able to guesstimate the sales.
Is there anyone who has experience of anything similar who could offer me advice please?

paddyrg

This is great - it's the whole point of a plan for you to realise what you do and don't know, work out what you're basing figures and assumptions on, etc. Of course you can extrapolate from the size of the shop and number of staff. Maybe it's just you in a small store, selling something special, you're not going to be serving more than one customer at a time, allow 30 minutes for each, your guess at how many per day. If there are three staff in a large store doing school shoes it'll be different. That's what you're trying to work out...if you're viable!

katie1630

Thanks for your reply. This is where I'm struggling, I'm no good at guessing!! It will be myself working in a small shop I've been in several local shops that are similar; I've researched who would buy what sort of shoe, how often and at what price. I've put out a questionnaire to local shoppers etc etc but I don't know how to put figures on to paper!
You're right regarding business plans. As much as I've cursed trying to put one together it has given me a great insight in to retail aspects I would probably wouldn't have given thought to beforehand..

Savvy_Sue

On one level, you need to do a 'worst case' scenario. You might do a more upbeat one as well, but you need to work out how many 'bad days' you can have before you call it a day.

Because if you're renting premises on your own, then you're responsible for the rent, rates, utilities, refuse disposal, phone, cleaning and they'll need to be paid whether or not you make any sales. And if you employ staff the same applies - and if you DON'T employ staff how do you cover lunchtimes, loo breaks, sickness, emergencies etc?

Get your lease checked out by a solicitor who deals with commercial matters too, you can't afford not to ...

katie1630

Sound advice, thank you very much.

InsideInsurance

First of all, well done for planning, far too many dont.

Secondly, planning can be done as both top down and bottom up.

If you say the only figure you are struggling on is the number of sales then do a top down first. You know your total cost, you know your sales price and margin and so calculate how many units you need to shift a week for that to be viable. Given you say you've worked in other similar stores before, does that then look a realistic number?

You can add further detail by considering footfall for your location, you say you've worked out your target market, desirability of your goods etc and so would have an OK idea of how many you'll get in the shop a day. Use this number against the number of units you have to sell a day and does this sales rate look normal compared to your previous experience?

colino

Get on to Business Link or Business Gateway depending where you are. Business plans can be frustrating, but cheaper to wear out some pens and pencils than hard cash. Good point about doing a sensitivity analysis too. Surprising how 20% greater sales can badly affect the business as much as 20% less!

paulwf

Have you worked in a shoe shop before? That will give you a feel for trade as well as learning endless valuable tips...avoid mistakes by learning whilst getting paid!

At the end of the day you will never be able to get sales projections that accurate for a new business which is why as others have said you need to consider the worse case scenario to make sure it is at least viable. I follow some new local businesses on facebook and twitter and it is fascinating watching them find their feet, their opening hours and opening days are all over the place and their actual operations must have changed so much from what they put in their business plans a short while ago.

One of your key considerations will be stock, you're going to have a lot of money sitting there in stock as there could be several colours and sizes for one model of shoe. If the shoe model changes once a year then you'll have lots of stock to shift at cost price or less and some of it may never really sell. You're going to want quite a few thousand that you can "write off" in initial stock. If you don't have much spare cash and need a quick turnaround of stock I'd be very careful.