For most people the words "business plan" bring to mind a thick document written for banks, full of market analysis and grand sentences. If you are opening a corner grocery, a small bakery or a general store, you don't need that. What you do need, before you sign the lease, is a written answer backed by numbers to one question: will this shop make a living in this spot?
The good news is that a shop's business plan is simpler than most. Revenue can be built from a handful of figures you can largely observe yourself: how many people walk past the door, how many come in, how much they buy. Most of the costs are known before you open. The hard part is honesty: working through the cautious scenario as well as the expected one, and writing in the lines that are not pleasant.
This article is the third part of our series on opening a shop. The costs are covered in How much does it cost to open a small shop?, the paperwork in What licences and permits do you need to open a shop? — here we look at how it all comes together in a plan. You get a template structure, a worked example in neutral units, and a one-week schedule for writing it.
Who are you writing the plan for?
The same shop, the same numbers — but the emphasis of the plan depends on who reads it. It is worth writing one honest version for yourself and drawing out of it whatever the other reader cares about. If you write three different plans for three readers, sooner or later you won't know which one is real either.
- For yourself: this is the most important version. The uncomfortable numbers go in here too — the cautious scenario, your own pay, the waste — because this is what you base the decision to go ahead on.
- For a bank or lender: they want to know whether you can repay the money even if things go worse. The reserve, the break-even point and the repayments are what matter, not the enthusiasm.
- For a grant or funding scheme: the structure and format are usually fixed. Fill in the content from the same plan of your own, and make sure the figures don't differ from what you have written elsewhere.
- For a landlord: many landlords want to see what you will do in the premises and whether you can pay the rent. A short summary of the shop, the range and the opening hours is enough for them.
- For a partner or family member putting money in: they should see the risks and the fallback plan too, not just the good scenario.
The chapters of the plan: a template structure
The structure below is enough for the business plan of a small shop, bakery or general store, and it is a good starting point for the skeleton of a bank or grant plan too. Not every chapter needs to be long — most are one or two pages. The third column matters most: these are the points where most plans go wrong.
| Chapter | What to put in it | Typical mistake |
|---|---|---|
| 1. Summary | One page: what the shop is, where it will be, who it is for, how much money it needs, and when it breaks even | Written first, so it turns into advertising copy — write it last, from the finished numbers |
| 2. The shop and the owner | Range, opening hours, the shopkeeper's experience, who stands behind the counter | Only about enthusiasm, not about experience and working hours |
| 3. Location and customers | Counted passers-by, the residents and workplaces nearby, competitors and their opening hours | "A busy street" — with no number |
| 4. Range and pricing | Categories, their expected share of sales and their typical margin | One average margin for everything, although milk and sweets bring in very different amounts |
| 5. Revenue plan | Customers × average basket × trading days, in three scenarios, including the ramp-up months | Top-down ("2% of local spending"), and only one scenario shown |
| 6. Cost plan | Monthly fixed costs item by item, variable ones as a share of sales: waste, card fees, own use | Waste, own use and the owner's pay are missing |
| 7. Break-even | The monthly sales and daily customer count at which the shop is at zero | Left out, or only as a yearly average that hides the hard month |
| 8. Start-up capital and funding | Fit-out, opening stock, deposit, cash reserve — and where all of it comes from | The reserve is left out, or covers one month |
| 9. Risks and fallback plan | What happens if sales stay at the cautious level, if a competitor opens, if the fridge breaks | "No significant risks" — nobody believes that, you included |
| 10. Monthly follow-up | Which figures you check each month, and what you do if they differ | Missing, and the plan goes into a drawer after opening |
Location and customers: count, don't guess
The revenue plan rests on how many people come in each day. You can't make that up, but you can observe it. Sit opposite the premises you have in mind — on a bench, in a café window — and count how many people walk past the door. Not all day, but at several times of day and on several days: a Tuesday morning and a Friday afternoon give a very different picture.
- Count on at least three days, each in three slots: the morning commute, the middle of the day, and the afternoon-evening journey home. Half an hour per slot is enough; scale it up.
- Watch which way people go: on your side of the street or the other? Are they hurrying or strolling? A crowd heading for a bus stop rarely stops to shop.
- Visit the competitors within walking distance for your customers: what they sell, how late they open, how many people queue at the counter at six in the evening.
- Look at what is around: flats, family houses, offices, a school, a surgery. These tell you when people will buy from you and what.
- If you are moving into a unit where a shop has closed, ask the neighbours why it closed. The answer is often worth more than any calculation.
Revenue from the bottom up — a worked example
The revenue plan is a single formula: customers per day × average basket × trading days in the month. You estimate the customer count from watching the location, and the average basket from your range and the experience of similar shops. Where your data is thin, the three scenarios keep you honest: you are not claiming one number, but a range.
The example below is a small grocery on a housing estate, open 26 days a month. The amounts are in neutral units, and every figure is net, excluding sales tax — in your own currency the magnitudes will differ, but the logic is the same. Based on its range, the shop's blended margin is 28%; waste takes roughly 2 percentage points of that and card fees roughly 1, so in the example 25% actually stays with the shop.
- The blended margin is the weighted average of the categories: if half of sales is staple food at a low margin, a quarter is bakery and fresh goods, and a quarter is drinks, sweets and household goods at a higher margin, the average comes from those shares, not from the best category.
- Low-margin staples bring customers in; the higher-margin categories provide the profit. You need both, but the plan should show how much each contributes.
- Don't estimate the average basket from the biggest shop: in a small shop most customers take a few items — bread, milk, a drink.
- If you don't know what the exact blended margin will be, work with a few points less than you expect. Waste is higher in the opening weeks than later.
| Scenario | Customers per day | Average basket | Monthly sales (26 days) | Margin (25%) | Monthly fixed cost | Monthly result |
|---|---|---|---|---|---|---|
| Cautious | 200 | 9 units | 46,800 units | 11,700 units | 15,300 units | −3,600 units |
| Expected | 240 | 10 units | 62,400 units | 15,600 units | 15,300 units | +300 units |
| Good | 280 | 11 units | 80,080 units | 20,020 units | 15,300 units | +4,720 units |
Look at what this table says. In the expected scenario the shop covers its costs and the owner's pay, but there is no real profit left. In the cautious one, money has to be put in every month. In the good one there is room to manoeuvre. A plan like this doesn't tell you not to open a shop; it tells you that the reserve has to be sized for the cautious case, and that the rent or the wage bill is still worth negotiating.
„A plan is not good because the expected scenario looks nice, but because you would survive the cautious one.”
Costs — and what always gets left out
Most people list the monthly fixed costs well, because they come with a bill: rent, wages, energy, the accountant. The trouble is with the lines that don't. Waste costs nothing at the till, own use doesn't show on the bank statement, and the owner tends to act as if they worked for free. All three are real costs, and together they can easily decide whether the shop breaks even or makes a loss.
| Cost line | Example per month | What many people forget |
|---|---|---|
| Rent | 4,000 units | Service charges, utility contributions, the yearly rent increase |
| Wages and contributions (one employee) | 5,500 units | Cover during holidays and sickness |
| The owner's own pay | 3,000 units | If it isn't in the plan, the plan claims you work for free |
| Energy | 1,500 units | Refrigeration uses more in summer, and winter heating belongs here too |
| Accountant | 400 units | The year-end close and the fee for extra requests |
| Other: insurance, waste collection, internet, maintenance | 600 units | Fridge servicing and small repairs |
| Own use | 300 units | The family's coffee, the assistant's snack, the "just one soft drink" |
| Total monthly fixed | 15,300 units | This is the figure you need for break-even |
| Waste | about 2% of sales | Expired, damaged, stale goods — more in the opening weeks |
| Card fees | about 1% of sales | Grows with the share of card payments, and not only for big shops |
Waste and own use are worth their own lines because they are the fastest-growing and least visible items. In the example, at expected sales, waste is more than a thousand units a month — over four times what the shop keeps as profit in the expected case. If waste turns out to be four per cent instead of two, the expected scenario tips into a loss without a single customer fewer walking in.
Break-even, simply
The break-even point is the monthly sales figure at which the shop neither makes nor loses money. Working it out takes one division: the monthly fixed cost divided by the margin left after leakage. In the example, 15,300 ÷ 0.25 = 61,200 units of monthly sales. Below that the shop loses money, above it the shop makes a profit — with the owner's pay already included.
Monthly sales, though, is an abstract number. It says much more once you convert it back into customers: 61,200 units ÷ 26 days ÷ a 10-unit average basket ≈ 236 customers a day. That number you can set against what you counted on the street. If the location suggests 200 customers is realistic and you need 236, you know it isn't down to your enthusiasm but to the rent, the opening hours or the range.
It is worth moving the break-even point in both directions. How much lower does it get if you manage to negotiate the rent down? How much higher if the blended margin is two points lower because customers buy more staples? These small calculations show which factor is sensitive — and where to put the most work in before opening.
Start-up capital and a cash reserve
Start-up capital is not just the fittings and the first stock order. A new shop does not reach its expected sales on day one: the curiosity of opening is usually followed by a dip, and a regular customer base takes months to build. The losses of those months have to be funded in advance too. If the example shop only reaches the cautious level on average over its first six months, that is a shortfall of 3,600 a month, 21,600 units over six months — before anything breaks down.
- One-off investment: refit, shelving, fridges, till, sign. Our article on costs covers this in detail.
- Deposit and rent paid in advance: not a cost, but it is just as absent from your account at opening.
- Opening stock: goods on the shelf are money tied up. If suppliers only deliver against immediate payment at first, you have to pre-finance the full value of the stock.
- A cash reserve for the ramp-up: the monthly shortfall of the cautious scenario, multiplied by the number of months it could realistically last.
- A reserve for the unexpected: a broken fridge, a delayed permit, an unplanned alteration. This is a separate line, not part of the previous one.
Risks and a fallback plan
The risk chapter is not there to reassure the reader, but to make you think ahead: what will you do if something doesn't go to plan? In a small shop the risks are very concrete, and for each one you can write a sentence on what your response will be.
- Sales stay at the cautious level for a long time. Fallback: which cost can you cut quickly — shorter hours in the weak slots, fewer paid shifts, a narrower range.
- A discounter or a chain opens nearby. Fallback: what will make you different — fresh goods, proximity, longer hours, personal service — and how you will show it.
- A fridge breaks down, or energy prices rise. Fallback: the separate line in your reserve, and a service engineer you can call.
- Your assistant drops out, or you fall ill. Fallback: who can step in, and have they been trained on the counter.
- Waste is higher than planned. Fallback: smaller orders of perishables, and a weekly look at what is coming off the shelf.
- The landlord raises the rent or doesn't renew. Fallback: what the lease says, and how much time you would have to find a new place.
The plan is not a one-off: a monthly comparison
Most business plans die on opening day: written for the bank, then put in a drawer. Yet it is after opening that the plan becomes really useful, because from then on there is something to measure reality against. Once a month, in a quiet hour, compare the plan with the actual figures: sales, customer count, average basket, margin, waste, own use.
The question is not whether the numbers match exactly — they almost never will — but which one differs, and in which direction. If the customer count is fine but the basket is smaller, your range needs work. If sales are good but the margin is weak, look at waste and pricing. If the evening hours are empty, opening hours are the question. For that you need records that show the figures by product, by category and by hour; Boltom App's reports, for example, can put two periods side by side, so the planned and the actual month can be compared quickly.
Common mistakes in a business plan
| Mistake | What it leads to | How to avoid it |
|---|---|---|
| Top-down revenue estimate | One per cent of a big number always looks like plenty — and nothing backs it up | Customers × basket × trading days, from counted passers-by |
| Only one scenario | No answer to what happens if things go worse, and the reserve is too small | Cautious, expected and good — size the reserve on the cautious one |
| Waste and own use missing | The plan shows a profit, the shop is at zero or below, and you don't understand why | A separate line for each, with a higher figure for the opening weeks |
| The owner works for free | The shop is profitable on paper, but you can't live on it | Your own pay among the fixed costs |
| One month of reserve | The money runs out in the second or third month of the ramp-up, and you start living off the stock | A reserve for the whole ramp-up, plus a separate line for the unexpected |
| The plan stays in a drawer | Deviations stay hidden for months and come to light too late | One hour a month: plan and reality side by side |
How to write it in one week
- 1Day 1: purpose and readerWrite down in one sentence what shop you are opening, where, and for whom. Decide who else will read the plan — a bank, a grant scheme, a landlord — and check what format they expect. Gather what you already know: quotes, lease terms, supplier price lists.
- 2Day 2: count on the streetCount passers-by in front of the premises for half an hour at three times of day, and do the same at a similar shop that is already trading. Visit the competitors: range, prices, opening hours. Write the numbers down in the evening, before you forget which was which.
- 3Day 3: range and margin mixPut the categories together, estimate what share of sales each brings and what margin it makes. Work out the blended margin from that, then subtract the estimated share of waste and card fees.
- 4Day 4: revenue in three scenariosCustomers × average basket × trading days — in a cautious, an expected and a good version. Add the ramp-up alongside: the first months don't start at the expected level.
- 5Day 5: costs and break-evenThe monthly fixed costs item by item, including your own pay and own use. Divide by the margin after leakage, and convert it back into customers per day. Compare that with what you counted on day 2.
- 6Day 6: start-up capital, reserve, risksAdd up the fit-out, the deposit, the opening stock and the ramp-up shortfall of the cautious scenario, plus a line for the unexpected. Write down the six biggest risks, each with a one-sentence fallback plan.
- 7Day 7: summary and an outside eyeNow write the one-page summary, from the finished numbers. Then give it to someone who isn't excited about it — an accountant, a shopkeeper you know — and ask them to find the weakest point.
Summary
- The first reader of the business plan is you — write one honest version, and draw from it whatever the bank, the grant scheme or the landlord asks for.
- Estimate revenue from the bottom up: counted customers × average basket × trading days.
- Always work with three scenarios, and size the reserve for the cautious one.
- Waste, own use and your own pay each get their own line among the costs.
- Convert break-even into customers per day, and compare it with what you saw on the street.
- After opening, compare the plan with reality every month — that is what turns it into a tool.
Frequently asked questions
What should a shop's business plan include?
For a small shop, ten chapters are usually enough: summary, the shop and the owner, location and customers, range and pricing, revenue plan, cost plan, break-even, start-up capital and funding, risks and a fallback plan, and monthly follow-up. Most chapters are one or two pages. The substance is in the numbers: how many customers come, how much they spend, what the monthly costs are, and how much money you need for the ramp-up months. Once those are worked out honestly, the written sections are easy.
How long should the business plan be?
A small shop's plan for your own use can be eight to ten pages, including the calculation tables. If a bank or a grant scheme asks for it, the length and format are often fixed, and you find that out from the call or the lender. Length is not a virtue in itself: a short plan with well-founded numbers is worth more than a thick document full of general market analysis. The one-page summary is always needed, though, because many people read nothing else.
How do I know how many customers I will have?
Nobody knows exactly, but you can make a good estimate by observation. Count the passers-by in front of the premises on several days and at several times of day, and at a similar shop that is already trading, see what share of passers-by go in. Carry that ratio over to your own spot, rounding down, because nobody knows you yet when you open. In the revenue plan, write a range rather than one number — with a cautious, an expected and a good customer count.
What average basket should I work with?
In a small shop most customers take a few items: bread, milk, a drink, something small. So don't estimate the average basket from the big weekend shop, but from quick weekday purchases. A good starting point is to watch at a similar shop what customers put on the counter, and price it with the typical prices of your range. After opening you will see it in your own data within the first weeks, and can adjust the plan to it.
How do I calculate the break-even point?
Divide your monthly fixed costs by the margin left after leakage — that is, the margin that remains once waste and card fees are taken off. If the monthly fixed cost is 15,300 units and the real margin is 25%, break-even is 61,200 units of monthly sales. It is worth converting that back into customers per day: divide by the number of trading days and by the average basket. The daily customer count is something you can compare with what you counted at the location.
How much start-up capital and reserve do I need?
There is no general figure, because the location, the range and the fit-out override everything. The structure is always the same, though: one-off investment, deposit, opening stock, a cash reserve for the ramp-up, and a separate line for the unexpected. Work out the ramp-up reserve from the monthly shortfall of the cautious scenario, for as many months as it could realistically take the shop to reach the expected level. One month of reserve is almost always too little.
What does a bank look for in a shop's business plan?
Typically whether you can repay the loan even if things go worse than expected. That is why the break-even point, the cautious scenario, the reserve and your own contribution tend to get the most attention. It also matters a lot whether there is observation behind the numbers, and whether you have experience in retail. The exact expectations differ by bank and by country, so it is worth asking in advance what format and attachments they expect.
Do I have to include my own pay?
Yes, and it is one of the lines most often left out. If the plan doesn't include the cost of the owner's work, the shop will be profitable on paper while in reality you work ten or twelve hours a day for nothing. Put your own pay among the fixed costs, at an amount you could live on in the longer run. If the expected scenario no longer works out that way, it is better to know now than in a year's time.
How much waste should I plan for?
It depends heavily on the range: far more with fresh bakery goods, vegetables and chilled products than with tins or drinks. In the plan it is worth calculating it as a share of sales, and writing a higher figure for the opening weeks, because then you don't yet know how fast things sell. One thing is certain: waste is not zero, and compared with a small shop's profit it is a big item. After opening, record it with a reason, so you can see whether the planned share holds.
Can I use a ready-made business plan template?
Yes, for the structure by all means — the order of chapters and the questions are much the same everywhere. But never copy the numbers from a template, because they belong to another shop, another location and another market. A filled-in example is useful for showing how much detail to work in. In your own plan every number should have a source: observation, a quote, a bill or the experience of a similar shop.
What if even the expected scenario doesn't break even?
Then the plan has done its job, because it warned you in time. Look at which factor is the most sensitive: the rent, the wage bill, the blended margin or the opening hours. Often a lower rent, shorter hours in the weak slots or adding a higher-margin category is enough to turn the numbers round. If nothing helps, that is a valuable result too — a no before signing is far cheaper than a closure afterwards.
What should I do with the plan after opening?
Compare it with the actual figures every month: sales, customer count, average basket, margin, waste and own use. Don't look for a match, look for the direction of the deviation, because that tells you where to step in. For that you need records that show daily sales by product and by category, and that can put two periods side by side. And at the end of the first year, rewrite the plan with the real numbers — for the following year, that will be your best starting point.
Say the product's name and it's there on the till.
Boltom App takes the work behind the counter off your hands. You find a product by looking at its photo or saying its name out loud — no codes, no scraps of paper. Whatever leaves the shelf or goes in the bin is recorded right there, not in a notebook. It works alongside your existing till, not instead of it.
- A quick code with a photo — or just say the product's name and the till finds it.
- Staff consumption in three taps, recorded under the person's name.
- Daily waste with its reason: expired, broken, unsellable — totalled up in money.
No card needed · 2 minutes
