Six steps to write a business plan for a wholesale business
As the intermediary of most trades that involve goods and services, a successful wholesale industry is the cornerstone of a healthy economy.
Despite fierce competition and logistics-heavy business activity, opening a wholesale business can often prove to be a prosperous venture. However, no wholesale business is truly established until it has a theoretical blueprint of its mission, operations, and projections in the form of a business plan. Often referred to as your business’ roadmap, a wholesale business plan is the quintessential first step in realizing its success.
In this article, we’ll take a detailed look at creating a consummate business plan; but before we discuss the six essential ingredients of your business roadmap, let’s cover the basics.
What is a wholesale business?
The main characteristic of a wholesale business is that it transacts with other businesses by buying and selling goods in bulk, thereby making it a mediator between producers and retailers.
This B2B model of a wholesale business calls for careful planning and detailing of what the wholesale business plans to sell, how it plans to execute its sales and operations, and who will be the stakeholders of the business.
What is a wholesale business plan?
A wholesale business plan outlines the various aspects that a wholesale business needs to consider at the time of its inception, including the vision, strategy, goals, and operations.
Why is having a solid wholesale business plan important?
A wholesale business plan is similar to any other business plan and contains several sections that cover financial planning, resource analysis, management, and operational planning, which we will discuss in detail later in this article. But first, let’s look at why a wholesale business needs a solid business plan:
- For the readers of your business plan, it provides an overview of the business and how you plan to achieve your goals. When applying for wholesale financing or loans, a detailed business plan is crucial, as it’s the foremost thing that supports your research and the forecasts of your wholesale business.
- The wholesale business plan is also a step-by-step guide on how to move forward with the business. It ensures transparency and accuracy, thereby reducing any wastage of resources or unnecessary expenditures.
- Implementing lean planning in your business plan, a concept that focuses on proper resource allocation, facilitates frequent checks and changes to the original business plan.
- An in-depth market analysis, another vital aspect of a business plan, showcases where your business stands in terms of the industry and its competitors. The business plan illustrates the uniqueness of your business and how it can establish an edge over others in the market.
- The better your business plan, the better the chances of getting more people involved in your wholesale business. From manufacturers and retailers, to employees and logistics, a business plan becomes the first level of marketing that represents your company in its entirety.
How to write a business plan for a wholesale business
We now know the importance of a good business plan, so the next step is to get started with a business plan for your wholesale business. Understanding the different needs of your business and presenting them in a readable format is key to achieving a successful wholesale business plan. Also, there is no standard format to write a business plan.
Since every wholesale business has its own features, a business plan aims to present to the world that you are dedicated to achieving success through your wholesale business and the milestones you have planned for it.
Six steps to building a wholesale business plan
Here are six simple steps that you can use to build an impactful business plan
1) Conduct product research and availability
The most important part of your business is the product that you want to sell. Make a note of why you chose a good or a range of goods, and how you plan to store the goods. This essentially leads to inventory tracking and management, and any wholesale business needs to maintain a strong inventory model to track goods coming in and going out.
By keeping a record of the inventory, your business can avoid costly stocking errors, misses in inventory designated for reselling, and stock wastage. If you are the producer of the goods and directly sell them to retailers, there should be a clear record of the raw materials, work-in-progress goods, and finished goods.
2) Undertake market research and analysis
Market research includes insights into the demand and supply levels of the product in the current market structure, along with future projections of demand and supply in a statistical format. By performing such research, wholesalers can analyze the performance of the business in the long run and take necessary measures to meet market requirements and remain profitable.
Market research also includes competitor analysis. Wholesale businesses usually compete to gain more manufacturers and retailers to join their network; a SWOT analysis might help in identifying the Strengths, Weaknesses, Opportunities, and Threats of your business as compared to your competitors.
3) Start financial planning
The underlying purpose of a good wholesale business plan is often to facilitate proper wholesale financing and get banks or other financial institutions to support your business approach. Financial analysis typically involves assessments based on the capital in hand, and the capital required to carry out the various activities of your wholesale business. Financial estimates should be precise and as per universal accounting standards like a breakeven analysis or an estimated balance sheet etc.
4) Determine your business model and operations
Another crucial step is to determine an operational and business structure for your wholesale business. Simply put, this is the framework of your business; for example, it may be an e-commerce retailer or a superstore. This helps gain insight into the day-to-day operations of the business, the roles and responsibilities of staff and employees, and a pricing model for your product or inventory.
5) Plan your marketing strategy
While the demand and supply have a direct impact on the price of a product, the marketing and sales costs indirectly affect the selling price. Hence, it is necessary to have a suitable marketing strategy for your business that is budget-friendly, and at the same time, lucrative for both manufacturers and retailers.
6) Write your executive summary
Lastly, an executive summary comprises the vision and mission of your business, business strategy and goals, a description of where your business currently stands, and an overview of the milestones and action plan you have set for your wholesale business. An executive summary briefly summarizes all the necessary sub-points to give readers a better understanding of your business.
A wholesale business has unique features
A wholesale business plan showcases the level of awareness you have about your product and its market. As the mediator between manufacturers and retailers, a wholesale business has special features of its own, mostly relating to inventory management, storage of goods, and supply chain tactics. A good wholesale business plan is concise, clear, and informative.
Remember that your business plan helps in securing wholesale financing for your business, in addition to attracting more stakeholders. Also, a good business plan is always modifiable, especially when there are changes in the market or business management strategy. Thus, a consummate wholesale business plan is a malleable fine print of all the details, features, projections, and estimates of your wholesale business.