Essay on Small Business Plan
Introduction
‘Business plans are often the starting point for would-be entrepreneurs as they outline their business ideas and develop a plan to seek financing. It is a formal document which describes a good opportunity and outlines a strategic approach to pursue the opportunity.’ (Becherer and Helms 80)
Fashion industry is one of the most lucrative industries in the world amounting to billions of dollars in revenue. In accordance to the trends of the fashion industry consumers enjoy visiting not only large shopping centres but also small boutiques as well. But in order for a small fashion shop to be successful and profitable, the best possible solution may be to choose its location wisely: in a small town where only few competitors operate.
- The purpose of business
The purpose of the present small business plan is to outline the strategy of the small boutique establishment. It has to be noted that the strategic concept of this business includes not only brick and mortar business, but also online presence.
The major strategic goal of the fashion boutique is to become the favorite shopping point of the local community. This boutique would like to attract the public by the great range of fashion and design items and by its cozy atmosphere and friendly staff. In addition, kids fashion boutique will have a strong online presence: items will be sold online.
- Analysis of the internal and external stakeholders and environment
In the process of strategic planning a few major tasks should be considered by a manager. The strategic analysis is among them. Strategic analysis means “a review of the organization’s environment, both internal and external.” (Garner 6)
In order to determine where an organization is going to be in the future, its current position should be thoroughly assessed. SWOT analysis was originally designed to help in “assessment of organizational strengths, weaknesses, opportunities, and threats. It constitutes one of the most important aspects in the overall strategic planning process.” (Garner 9)
Advanced version of this method is called SWOTT analysis and it will be used in this paper. In addition to strengths, weaknesses, opportunities, and threats, it includes trends as an additional element as well. Advanced analysis of environment will ease the assessment of the competitive situation, new trends emergence, changes in customers’ or suppliers’ behaviors, etc.
Trends should be studied carefully. In order to learn more about them, the company could order special surveys on the fashion industry in general, on the local business, customer studies, product range performance, knowledge of this boutique’s brand, and also its current image and perception in the eyes of local people. (Hines & Bruce 20)
Additionally to the strengths, weaknesses, opportunities, and threats analysis, another SWOT analysis approach may be used. It divides environmental forces into two categories: internal and external forces. I would like to present SWOTT analysis created for a small local boutique that specializes on clothing and décor trade.
Let’s start this analysis with external forces. I will research these external factors that are of the real importance for a small fashion business. These are economic, competitive analysis, regulatory and social. Other factors do not have the substantial influence on this business.
The first one and the most influential factor is a competitive analysis. Among competitive analysis strengths the major one is a low level of competition. There are only a few competitors that operate in the same area, and their product ranges are not alike.
It’s critical to define the possible areas where boutique’s strengths were not fully used. Competitive opportunities are combined with internal factors such as strategic goals and innovations. It is both external and internal environment combination. Company’s opportunities include:
- Online access to the shop’s products and delivery of ordered items to the neighboring towns and villages will make this small fashion business even more profitable;
- There is an opportunity to suggest shop’s client another services – for instance, a café or a salon. It will make their visits more pleasant, they will last longer and these additional services will help to increase customers’ loyalty;
- Advertising in local media is advisable in order to increase boutique’s popularity and its brand knowledge among the local community.
Threats mean the possible damages for the business. Among the possible threats of a small local boutique are:
- The rise of existing competitors;
- Appearance of new competitors on the local market.
Legal, domestic economic and social factors are important for this fashion shop. The threats include, for instance, a high level of unemployment, which decreases demand for fashion and design items and changes people’s life style. Among the economic factors, there are such variables as rate of inflation and the level of domestic interest rates that may influence the success of the small local business. Among the possible threats of a small local boutique the possible financial troubles could be named as well (for instance, these threats may be caused by tax policy changes or credit rate increasing).
Among the social and cultural elements that should be considered for a fashion business the ethnic and social differences could be mentioned. Different ethnic and social groups usually have different tastes in fashion and design; therefore shop’s owner should define local customer demand in style and design and follow it.
Obviously, internal factors that have an impact on the small fashion business are: strategy, strategic capabilities, processes, and resources.
Small shops usually easily adapt to change, due to the nature of the small business (as there is no huge organizational structure that is so hard to change).
Processes such as delivery schedule and supply chain are designed especially for a small fashion business. This shop has only a few reliable suppliers of the cloths and design items.
Strategic capabilities for the small fashion boutique include the following strengths:
- Availability of clothes and décor items ranges;
- Affordability of products;
- Good choice of vintage items (it is impossible or hard to find the same items in the other shops)
- Comfy atmosphere and pleasant staff;
- Special discounts for students and retired people are offered by our shop (it helps shops’ administration to demonstrate its respect to local community).
The strengths and opportunities for the type of small local business were reviewed prevail over possible weaknesses and threats. Company’s competitive and strategic capabilities are quite strong, but there also some elements of it that need to be improved.
- The type of business functions will be established
The following types of the business functions will be established: business functions (including marketing and sales), finance function, Human Resource Functions, Administration Function (including IT) and customer service function.
- The type of structure the business will adopt
The type of business structure that is chosen for the present small business is the easiest one – sole proprietorship, because this form is the most appropriate for the administration of the small shop.
- Selection of the required human resources
In order for the retailer to operate efficiently it requires qualified human resources for store-based and non-store positions.For instance, job opportunities in the small shop include customer assistants (who directly assist customers or prepare orders for delivery to customers who have ordered online), manager (who manage a team of assistants), warehouse workers (who help catalogue and store various goods).Non-store positions include business personal (such as marketing manager and sales manager),and logistic personnel (who plan and carry out the distribution of clothes to the shop).
- The marketing approach
The focus of the marketing strategy in this case will be focused ondigital marketing and company’s online presence. In addition, some non standard promo activities may be held outside the shop in order to attract the audience to enter. Also, advertising in local media is advisable in order to increase boutique’s popularity and its brand knowledge among the local community.
In terms of digital marketing, fashion industry was quite conservative in it relation towards the digital marketing, but in the recent period fashion companies have understood the opportunities of interactivity and personalization provided by the brand’s digital presence and the advantages of digital platforms for the fashion brands and they began to introduce their digital marketing innovations aiming to build a powerful digital presence.
The target audience of the fashion boutique is the women and men, 25 – 55 y.o. with the average+ income. It should be noted that the people with high income usually aren’t interested in the participation the internet audience researches and therefore their share in the certain website audience is hard to assess. The choice of websites for using in the digital marketing campaign for fashion shop therefore should be based on the general media indexes of the websites such as a monthly number of visitors, unique visitors, frequency of visits and also on the affinity index which characterizes the level of correspondence of the site audience to the target audience.
The company will have an online shop as well. Company’s Website often starts out its life as just one more way to ‘advertise’ and provides a point of contact with potential and existing customers. But pretty soon it gets to be more than that. The focus builds on ways for visitors to enjoy the experience and the site is used to try to build closer relationships with them. Attractive website is vital for any fashion company because it forms customers’ perceptions. In addition, it is considered that the Web is perhaps a natural home for advertisers who sell directly through the Internet.
The usage of social media will allow the shop to attract the attention of the target audience immediately and also to distribute it further to other users without the support of the company-producer. Other social media opportunities for the fashion boutique include fashion and life style podcasts, participation in the fashion forums and especially fashion blogs, picture and video sharing, and others. The recommendation to develop the presence of the brand in the social media is a wise one, because it’s potential is tremendous, and the better brand will feel itself in this new social relations, the better brand-knowledge, brand reputation, customers’ loyalty the brand will obtain.
Additionally, company will use context advertising which allows targeting specifically those users that are interested in fashion shops (the decision of the textual advertising appearance to the certain user will be made by automated systems based on the content displayed to the user).
- Required budget for the business
Estimated budget required for the launch of small fashion boutique in one of the UK’s cities is GBP 30 000. Obviously, the final coast will depend on the chosen location of the shop (different areas even in the same city have different values). Monthly expenditures will consist of wages, tax and national insurance, insurance, rent, utilities, telephone and other necessary costs.
- Possible risks involved in this business
Possible risks that may emerge were described in the analysis of environment include the rise of existing competitors and possible appearance of new competitors. Also threats may include a high level of unemployment, rise of inflation and the level of domestic interest rates, tax policy changes or credit rate increasing.
