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An Effective Business Plan for a Boutique to Propel Your Business to Success

If you are passionate about fashion and know enough about the latest trends, then you might want to operate your own boutique. Being knowledgeable about fashion is a good starting point but it is not enough to make your boutique a successful business. You need an effective business plan for a boutique so you can lay out everything in details for you to study. First, you need to know what entails a boutique business. You need to buy products, usually from wholesalers, and retail the items to your customers. You can open a shop in malls where there is a huge potential of attracting numerous customers or you can choose a site where there is a convergence of your target customers.

There are plenty of salable items that you can choose to retail in your boutique. You can concentrate on a specific niche or sell different items for variety. You can retail shoes, apparels, accessories, bags, sporting goods, or any items that are considered fashionable at the moment. Whatever item you choose to retail, you need to have an eye for fashion. However, trends are one thing; your customers’ needs are another. The current trend may prove to be too fancy for your customers so you need to consider your target market or the neighborhood where your shop is located. If you aim to cater to working mothers, then make sure that your store displays items that they will find useful and at the same time, fashionable.

You can create a better business plan for a boutique by looking at other shops and observing how they operate. You also need to get acquainted with your competitions so you can provide what they cannot. For your boutique to stand out and get noticed, you need to hone your sales skills. Your sales will come from both new and repeat customers so you have to develop a relationship with them and make sure that they will always find essential products in your store.

Basic business knowledge is needed when creating a business plan for a boutique. You need to create competitive prices for your items so you will not be left behind by your competitions and at the same time, making sure that you are still gaining profit. Knowing how to display your products to make them appealing to a potential customer is a very important aspect in running a boutique. This is where your fashion skills become most useful. You also need to find suppliers that are reliable and hire trustworthy people to assist you if necessary. An inventory is a vital part in any kinds of business to keep track of your sales so make sure that you have developed a well-organized system for this.

Interdependence: A Better Business Plan for Our Thirties

Last year when I turned thirty, I had an idea that I was going to like this new decade, but at the time it was just a thought, perhaps an optimistic wish. After all, when my mom said, as only a mom can, “Thirty’s going to be your year, honey,” I was pretty sure she was hoping I’d meet Mr. Right and start working on her grandbabies. That, unfortunately, didn’t happen, but in many ways thirty was my year. At thirty I was able to travel and study abroad, something I never had the guts or money to do in my twenties. I also completed a novel and stopped seeing writing as a hobby or a dream and started accepting it as a part of who I am equal to my teaching career, even if it’ll never pay the bills as teaching does.

So now at thirty-one, I could wonder what’s left (other than the whole Mr. Right and grandbabies task). Or I could worry that what the rest of my thirties has to offer won’t be as exciting. I’m doing neither. Because I’m facing my thirties armed with a decade’s worth of wisdom and experience I didn’t have for my twenties-funny how that happens, huh?

In my twenties I was all about proving my independence. College degrees: check. Home-ownership: check. Knowledge of small power tools after accepting the males in my family weren’t much help: sorry, guys, but check. Despite all the support I had available to me, I wanted to do as much on my own as possible. I was my own woman, an adult, capable of holding the door for myself, making my own decisions, and making my own mistakes, thank you very much. And being too independent to ask for help and advice at times, I made a few good ones, like putting grad school on my credit cards, which seemed so smart when zero-interest offers were as plentiful as shady mortgages. Ah, the good ole days. Luckily, our past mistakes offer some guidance for the present.

By our thirties most of us are getting settled in a career. We’re living on our own, though perhaps still close enough to sneak a load of laundry and a home-cooked meal every now and then. We’ve proven, mostly to ourselves, we can make it on our own. But hopefully we’re smart enough to realize we don’t have to, and sometimes it’s better if we don’t. Just because I’ve figured out a way to clasp my bracelets without help (scotch tape one end to your arm), doesn’t mean I wouldn’t appreciate having a friend or significant other do it for me. And sure, it’s comforting knowing I can confidently make important decisions for myself, but it’s more so knowing I have the supportive ear of family and friends, whose advice I’ve learned to appreciate, whether or not I choose to take it. This is the decade of our lives when we can choose our friends based on common interests and values, not because we were tossed into a dorm with them. We’ll meet life partners, start families. Our teens and twenties were about discovering ourselves, and that was important, but now it’s time to appreciate others in our lives.

While I’m not about to foreclose on my independence in my thirties, I am hopefully wise enough to accept interdependence is a better business plan. I don’t even need millions in tax-payer’s bailouts to help me reform, though now that I’m all about accepting help, I wouldn’t say no to someone paying off that grad-school debt.

Why Make a Business Plan?

In many cases business plans are very important but so much of the time it’s a plan to try to convince someone else that you know what you are doing with your business like banks, investors, partners, etc. Now it’s true that a well written business plan can also be a major benefit to your success as well if done right. It can guide you and keep you on track and can be the vehicle to get you were you want to be especially with so many outside forces now days that bombard you. A plan can be extremely important to your success especially when you look at the statistics that says 51% of small businesses fail sometime during their first 5 years.

So why make a business plan? I want to show you a totally different kind of business plan. What if you made a business plan that focused only on what you want for your life? You have dreams about what you would like your lifestyle to be, right? Why not make a business plan that could give you those dreams? What would your business look like if it gave you exactly what you want in life. What kind of salary would your business need to give you? Why not build a business plan around that? Decide how much salary you would need to support your dreams and then build a business plan that would show exactly how your business could give you that. Wouldn’t it be better to have your business work for you instead of the other way around?

Did you ever stop and think what a unique position you’re in as a business owner? I don’t know of any other way you can have as much control over your success than owning a business. When you work for someone else, you are totally at their mercy as to what your future may be like. It doesn’t matter whether it is a private business you work for or a large corporation. Your future is in their hands. The only thing that might qualify other than owning a business would be to inherit or win a lot of money that would give you everything you want in life.

So, why make a business plan the normal way when you could first make one that could give you what you want in life? Have you ever thought about doing a plan like that? Would you know how? Would you have the time to do it?

Well if you don’t or not sure, let’s at least see what’s involved.

Here are the steps you would need to take.

First, you would need to know all your current business numbers. This will be the basis for the plan. You’re going to need to know:

1. What your current average monthly sales are
2. What your current average monthly material cost is
3. What your current average monthly labor cost is
4. What your current average monthly fixed expenses are
5. What your current average monthly variable expenses are
6. What your average number of transactions per customer per month are
7. What your average dollar sale per transaction is
8. What your average monthly profit is
9. What your average monthly profit margin is
10. And what % capacity your business is at right now

Second, decide what you want your salary to be

Third, determine how many years in the future you want to plan for

Fourth, you will need to know:

1. What % is your material cost of sales?
2. What % is your labor cost of sales?
3. And what % is your variable expense of sales?

Why do you need to know these percentages? As your sales increases or decreases, your material cost, labor cost, and variable expenses will track accordingly. They will track very close to the same % as your current business. As an example, let’s say your current sales is averaging $100,000 per month and your material cost is averaging $20,000 per month. That’s 20% of your sales ($20,000 รท $100,000 = 20%). So, what would your material cost be if your sales were averaging $200,000 per month? It would still be 20% but it would be 20% of $200,000 or $40,000. So with these percentages, you can project your material, labor and variable expenses. See how it works?

But your fixed expenses don’t do this. They remain the same no matter what sales does. That’s why it’s call fixed. These are expenses like rent, taxes, utilities, phone, salaries, insurance, etc. A lot of business owners never consider this. They just lump all their expenses together. But you could never make an accurate plan if you combine all your expenses together. If you project your sales higher and want to know what your expenses will be, you have to separate your fixed and variable.

So, thinking about this principle, let me ask you a question. If your sales grew 10% and nothing else changed, would your profit margin be higher, the same, or less? Profit margin is % of profit against sales

If you said the profit margin would be higher, then you are right. Why would your profit be higher? If you said because of the fixed expenses, you would be right. Your material cost, labor cost, and variable expenses would have gone up 10% but your fixed expenses would have remained the same. You brought in more revenue because of more sales and you spent 10 % more on material, labor, and variable expense to cover the extra sales, but you didn’t spend any more on your fixed expenses. So, less overall expenses, would give you higher profit margin. Make sense?

So, let’s see how we would make a business plan that would show exactly how your business could give you the salary you want.

First you would determine what you would like your salary to be. You’ve dreamed about having a nice income to support your dreams I’m sure. Let’s say right now you only make what your profit is giving you which might not be much. So let’s say the first year, next year, you would love to have a consistent monthly salary of $4,000 a month, every month. And every year you would like to be able to increase it so that after 10 years it would be at $10,000 per month. And let’s say you would like to grow your business 10% each year.

So, what would your business look like over the next 10 years to give you that?

Could you build a plan that would show exactly how your business could do that?

It would show what your sales, fixed expenses, material cost, labor cost, and variable expenses would need to be. It should also show you how many customers you would need and would show you what your profit and profit margins would be each year.

All it takes is your current business numbers as we listed earlier and you can make a business plan as many years out as you like.

Now, in addition, when you know the average number of transactions per customer and you know your average dollar sale per transaction, you can also project how many customers you would need over those 10 years as well. This would tell you everything about what your business would need to do to give you the salary you want.

So, wouldn’t it be nice to see what a plan like this would look like? Could you do it? It might not be as tough as you might think.

There is no doubt it would take some time and would require a lot of calculations, but when you understand these principles and know how to put it together, you could probably do it. What do you think? Have you ever thought about doing a plan like this? It’s actually kind of in reverse. You decide what you want and let your business give you that.

Now assuming you did do this and it looked reasonable to you, how would you go about making it happen? What approach would you use? This could be a little harder. Well let me show you something. It might be easier than you think.

Did you know there are 7 ways to increase profit in business? If we decided to grow our business, most likely the first thing we would think about would be to add more customers. Adding customers will increase sales and as we seen above can increase profit as well, but it might not be the most effective way to increase profit. Take a look at these and see which ones you think could work for you. Would it be to:

1. Add more customers?
2. Increase your transactions per customer?
3. Increase your average dollar sale per transaction?
4. Decrease your fixed expenses?
5. Decrease your variable expenses?
6. Decrease your material cost?
7. Or decrease your labor cost?

What’s more important, sales or profit? Profit is what generates your salary. You could actually make more profit with less sales. Less sales could actually be less work. The most important thing for a business is to make money. That’s profit. Now some might say, I don’t care so much about making a lot of money. I like the freedom of owning a business. Well that is probably true, but if you don’t watch your profit, you might lose that freedom.

It’s always amazed me how most businesses, even very large ones, talk about how much their sales are. You hear comments like, that’s a $10,000,000 company. But what’s a $10,000,000 company if it has no profit. Now I do admit that 2% net profit of $10,000,000 is a lot bigger than 2% of $1,000,000 but most likely the large one carries a lot more headaches too.

Maybe it would be much better to have focused on profit than sales. What if profit had been the focus instead of sales. What if this could have been the result?

$10,000,000 x 2% = $200,000 profit
$1,000,000 x 25% = $250,000 profit

So when using one or more of these 7 ways to increase profit, the first one (adding more customers) might be the one you want to focus on last. It’s probably more expensive

Now, if you had your plan completed and it showed what your business needed to do over the next 10 years to give you the salary and profit you wanted, the next thought would be how do I make it happen. Well the best way would be to take it one year at a time. Concentrate on next year first and then choose one or more of 2 through 7 to work on before trying to add customers.

As an example, let’s say your current average number of transactions per month per customer is 3.0. Which says on average each customer does business with you 3 times each month. You could calculate how much more profit you would get if you could increase it to 3.5. And I can tell you that would probably be enough to meet your plan. And if that did generate enough profit, all you would have to do is maintain everything else; sales, expenses, labor, average dollar sale, etc, and then just figure out how you could increase your transactions from 3.0 to 3.5. Maybe it could be with some type of promotion that would get customers to come in more often.

Once you chose which one or more of the 7 you want to use and calculate exactly how much impact they have on meeting your plan, you would now have a definite approach on how to make your plan work.

It seems simple. At that’s what it’s all about. It’s about how to make your plan work the easiest and smartest way you can eliminating all the guesswork or trial and error methods. Want to increase your profit? This is a good way to do it.

So, you see, once you decide which of the 7 ways you’re going to do, then the only thing left for you to do is figure out how to make the one or ones you have chosen work.

No doubt there would be a lot work to do to do a plan like this. You would need to figure out how to put it all together, do all the calculations, do a lot of what if’s, etc.. And I’m sure one of the biggest things would be, would you actually take the time to do something like this or even have the time to do it? You could pay someone to do it but that would probably cost you a lot. Plus if you did that, most likely it would require a lot of back and forth work to get it just like you wanted it which would be even more expensive. But even then, would you spend the money to do it?

There is a better way. If you would like to develop a nice plan like this for yourself and give yourself a good shot at making your life better, then find a planning software that does it all for you.

One place and probably the only place I’ve found is