With increasing real estate prices/rent for retail space and ever increasing competition, it is getting more and more important to plan your retail business well. The location plays a very important role but at what cost, what is the revenue per square foot required for break-even and for profitable operations. Given the gross margin in your business and the average ticket [bill value] size for your type of business, what are the number of sales transactions to be done each day, what is the footfall required to achieve the sales target etc; are becoming very critical.
In addition to these, the nature of shopping experience you wish to provide your customers determine the investment required [interior design is a major factor] for your business and the operating cost [number of customer service/sales agents] for your business. It is important that from the store design to the staff in the shop are determined based on the footfall, average ticket size, number of customers handled each day. It is also important to plan the number of checkout counters, the checkout process etc. is also a designed to suit your needs.
To make the job of business planning and measurement easier, GoFrugal has launched a retail business planner and a retail health meter.
The purpose of the business plan is to provide the break-even average sales per day, target average sales per day for profitable operations based on the gross margin, investment and operating costs. The business planner is aimed at making sure the retailers earn enough to sustain and grow their business. It is important to understand that to grow their business, retailers need to invest on technology and shopping experience on a continuous basis and it is not enough to set the store up and earn a livelihood from the operations. As most successful retail business owners are planning to relaunch their operations, in tune with consumer preferences and taste, I am sure the retail business planner will help them fine tune their plans The purpose of the retail health meter is to give a perspective on a retail operation to the retail business owner. The health meter shows the profitability and the net return on investment for the current revenue and investments. This will help retail business owners understand how their business is doing and what they have to do to improve their returns.
We are planning to improve both the retail business planner and the retail health meter with more analysis and tips on setting up and growing retail businesses. We are also planning to support these analysis as part of our retail solutions.
Please feel free to share your feedback and comments to improve our business planning and analysis tools.