How to write a business plan for a watches and jewellery wholesaler?
Creating a business plan for a watches and jewellery wholesaler is an essential process for any entrepreneur. It serves as a roadmap that outlines the necessary steps to be taken to start or grow the business, the resources required, and the anticipated financial outcomes. It should be crafted with method and confidence.
This guide is designed to provide you with the tools and knowledge necessary for creating a watches and jewellery wholesaler business plan, covering why it is so important both when starting up and running an established business, what should be included in your plan, how it should be structured, what tools should be used to save time and avoid errors, and other helpful tips.
We have a lot to cover, so let's get to it!
Why write a business plan for a watches and jewellery wholesaler?
Having a clear understanding of why you want to write a business plan for your watches and jewellery wholesaler will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create a watches and jewellery wholesaler business plan.
To have a clear roadmap to grow the business
Small businesses rarely experience a constant and predictable environment. Economic cycles go up and down, while the business landscape is mutating constantly with new regulations, technologies, competitors, and consumer behaviours emerging when we least expect it.
In this dynamic context, it's essential to have a clear roadmap for your watches and jewellery wholesaler. Otherwise, you are navigating in the dark which is dangerous given that - as a business owner - your capital is at risk.
That's why crafting a well-thought-out business plan is crucial to ensure the long-term success and sustainability of your venture.
To create an effective business plan, you'll need to take a step-by-step approach. First, you'll have to assess your current position (if you're already in business), and then identify where you'd like your watches and jewellery wholesaler to be in the next three to five years.
Once you have a clear destination for your watches and jewellery wholesaler, you'll focus on three key areas:
- Resources: you'll determine the human, equipment, and capital resources needed to reach your goals successfully.
- Speed: you'll establish the optimal pace at which your business needs to grow if it is to meet its objectives within the desired timeframe.
- Risks: you'll identify and address potential risks you might encounter along the way.
By going through this process regularly, you'll be able to make informed decisions about resource allocation, paving the way for the long-term success of your business.
To get visibility on future cash flows
If your small watches and jewellery wholesaler runs out of cash: it's game over. That's why we often say "cash is king", and it's crucial to have a clear view of your watches and jewellery wholesaler's future cash flows.
So, how can you achieve this? It's simple - you need to have an up-to-date financial forecast.
The good news is that your watches and jewellery wholesaler business plan already includes a financial forecast (which we'll discuss further in this guide). Your task is to ensure it stays current.
To accomplish this, it's essential to regularly compare your actual financial performance with what was planned in your financial forecast. Based on your business's current trajectory, you can make adjustments to the forecast.
By diligently monitoring your watches and jewellery wholesaler's financial health, you'll be able to spot potential financial issues, like unexpected cash shortfalls, early on and take corrective actions. Moreover, this practice will enable you to recognize and capitalize on growth opportunities, such as excess cash flow enabling you to expand to new locations.
To secure financing
A detailed business plan becomes a crucial tool when seeking financing from banks or investors for your watches and jewellery wholesaler.
Investing and lending to small businesses are very risky activities given how fragile they are. Therefore, financiers have to take extra precautions before putting their capital at risk.
At a minimum, financiers will want to ensure that you have a clear roadmap and a solid understanding of your future cash flows (like we just explained above). But they will also want to ensure that your business plan fits the risk/reward profile they seek.
This will off-course vary from bank to bank and investor to investor, but as a rule of thumb. Banks will want to see a conservative financial management style (low risk), and they will use the information in your business plan to assess your borrowing capacity — the level of debt they think your business can comfortably handle — and your ability to repay the loan. This evaluation will determine whether they'll provide credit to your watches and jewellery wholesaler and the terms of the agreement.
Whereas investors will carefully analyze your business plan to gauge the potential return on their investment. Their focus lies on evidence indicating your watches and jewellery wholesaler's potential for high growth, profitability, and consistent cash flow generation over time.
Now that you recognize the importance of creating a business plan for your watches and jewellery wholesaler, let's explore what information is required to create a compelling plan.
What information is needed to create a business plan for a watches and jewellery wholesaler?
Writing a watches and jewellery wholesaler business plan requires research so that you can project sales, investments and cost accurately in your financial forecast.
In this section, we cover three key pieces of information you should gather before drafting your business plan!
Carrying out market research for a watches and jewellery wholesaler
Before you begin writing your business plan for a watches and jewellery wholesaler, conducting market research is a critical step in ensuring precise and realistic financial projections.
Market research grants you valuable insights into your target customer base, competitors, pricing strategies, and other crucial factors that can impact the success of your business.
In the course of this research, you may stumble upon trends that could impact your watches and jewellery wholesaler.
Your market research may reveal that customers may be looking for items with a more modern aesthetic. They could be seeking out watches with a contemporary design that incorporates different materials, such as stainless steel and rose gold. Additionally, customers might be interested in jewellery with bold, eye-catching designs that incorporate multiple textures and colors.
Such market trends play a pivotal role in revenue forecasting, as they provide essential data regarding potential customers' spending habits and preferences.
By integrating these findings into your financial projections, you can provide investors with more accurate information, enabling them to make well-informed decisions about investing in your watches and jewellery wholesaler.
Developing the marketing plan for a watches and jewellery wholesaler
Before delving into your watches and jewellery wholesaler business plan, it's imperative to budget for sales and marketing expenses.
To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.
Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.
By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.
The staffing and capital expenditure requirements of a watches and jewellery wholesaler
Whether you are starting or expanding a watches and jewellery wholesaler, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.
Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.
The staffing costs that a watches and jewellery wholesaler might incur include salaries for sales associates, administrative personnel, and customer service representatives. They may also require the services of a security guard to monitor the premises. Equipment costs can include a point-of-sale system, computers, printers, copiers, and other office supplies. Additionally, they may need to purchase specialised display cases for their jewellery and watches, as well as tools to repair and adjust them.
In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.).
Once you have all the necessary information to create a business plan for your watches and jewellery wholesaler, it is time to start creating your financial forecast.
What goes into your watches and jewellery wholesaler's financial forecast?
The financial forecast of your watches and jewellery wholesaler's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.
The four key outputs of a financial forecast for a watches and jewellery wholesaler are:
- The profit and loss (P&L) statement,
- The projected balance sheet,
- The cash flow forecast,
- And the sources and uses table.
Let's look at each of these in a bit more detail.
The projected P&L statement
The projected P&L statement for a watches and jewellery wholesaler shows how much revenue and profits your business is expected to generate in the future.
Ideally, your watches and jewellery wholesaler's P&L statement should show:
- Healthy growth - above inflation level
- Improving or stable profit margins
- Positive net profit
Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established watches and jewellery wholesaler. And similarly, an established company should showcase a higher level of profitability than a new venture.
The projected balance sheet of your watches and jewellery wholesaler
The balance sheet for a watches and jewellery wholesaler is a financial document that provides a snapshot of your business’s financial health at a given point in time.
It shows three main components: assets, liabilities and equity:
- Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
- Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.
Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your watches and jewellery wholesaler's liquidity and solvency:
- Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
- Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.
Looking at the balance sheet can also provide insights into your watches and jewellery wholesaler's investment and financing policies.
In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).
The cash flow forecast
A projected cash flow statement for a watches and jewellery wholesaler is used to show how much cash the business is generating or consuming.
The cash flow forecast is usually organized by nature to show three key metrics:
- The operating cash flow: do the core business activities generate or consume cash?
- The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
- The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?
As we discussed earlier, cash is king and keeping an eye on future cash flows an imperative for running a successful business. Therefore, you can expect the reader of your watches and jewellery wholesaler business plan to pay close attention to your cash flow forecast.
Also, note that it is customary to provide both yearly and monthly cash flow forecasts in a business plan - so that the reader can analyze seasonal variation and ensure the watches and jewellery wholesaler is appropriately funded.
The initial financing plan
The sources and uses table or initial financing plan is a key component of your business plan when starting a watches and jewellery wholesaler.
It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).
This table helps size the investment required to set up the watches and jewellery wholesaler, and understand how risks will be distributed between the business owners, and the financiers.
The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.
Now that you have a clear understanding of what will go into the financial forecast of your watches and jewellery wholesaler business plan, let's have a look at the written part of the plan.
The written part of a watches and jewellery wholesaler business plan
The written part of a watches and jewellery wholesaler business plan is composed of 7 main sections:
- The executive summary
- The presentation of the company
- The products and services
- The market analysis
- The strategy
- The operations
- The financial plan
Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.
Let's go through the content of each section in more detail!
1. The executive summary
The first section of your watches and jewellery wholesaler's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.
When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.
Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.
Then you should follow with an overview of the addressable market for your watches and jewellery wholesaler, current trends, and potential growth opportunities.
You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.
Finally, you should detail any funding requirements in the ask section.
2. The presentation of the company
In your watches and jewellery wholesaler business plan, the second section should focus on the structure and ownership, location, and management team of your company.
In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.
Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.
When describing the location of your watches and jewellery wholesaler, you could emphasize the accessibility of the area. It may be situated close to major transportation routes, which could help increase the efficiency of any deliveries and pickups. Additionally, it could be located in a bustling area that could help drive customer traffic and draw in potential buyers. The area could have a diverse economic landscape, which could help maximize the business potential of the wholesaler. Finally, it could be located in a region known for its high standards in production, which could help reassure a financier of the quality of the goods.
Finally, you should introduce your management team. Describe each member's role, background, and experience.
Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.
3. The products and services section
The products and services section of your business plan should include a detailed description of what your company offers, who are the target customers, and what distribution channels are part of your go-to-market.
For example, your watches and jewellery wholesaler might offer a wide selection of watches and jewellery to their customers, with competitively priced items to suit any budget. Additionally, they might offer custom jewellery design services, allowing customers to design their own jewellery pieces. Finally, they might offer repair and maintenance services, ensuring their customers' watches and jewellery stay in top condition for years to come.
4. The market analysis
When you present your market analysis in your watches and jewellery wholesaler business plan, it's crucial to include detailed information about customers' demographics and segmentation, target market, competition, barriers to entry, and any relevant regulations.
The main objective of this section is to help the reader understand the size and attractiveness of the market while demonstrating your solid understanding of the industry.
Begin with the demographics and segmentation subsection, providing an overview of the addressable market for your watches and jewellery wholesaler, the key trends in the marketplace, and introducing different customer segments along with their preferences in terms of purchasing habits and budgets.
Next, focus on your target market, zooming in on the specific customer segments your watches and jewellery wholesaler aims to serve and explaining how your products and services fulfil their distinct needs.
For example, your target market might include independent jewellery and watch retailers. These customers are likely to be looking for high-quality, affordable products to stock in their stores. They may be interested in bulk orders and discounts, as well as specialised customer service.
Then proceed to the competition subsection, where you introduce your main competitors and highlight what sets you apart from them.
Finally, conclude your market analysis with an overview of the key regulations applicable to your watches and jewellery wholesaler.
5. The strategy section
When crafting the strategy section of your business plan for your watches and jewellery wholesaler, it's important to cover several key aspects, including your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.
In the competitive edge subsection, clearly explain what sets your company apart from competitors. This is particularly critical if you're a startup, as you'll be trying to establish your presence in the marketplace among entrenched players.
The pricing strategy subsection should demonstrate how you aim to maintain profitability while offering competitive prices to your customers.
For the sales & marketing plan, outline how you plan to reach and acquire new customers, as well as retain existing ones through loyalty programs or special offers.
In the milestones subsection, detail what your company has achieved thus far and outline your primary objectives for the coming years by including specific dates for expected progress. This ensures everyone involved has clear expectations.
Lastly, in the risks and mitigants subsection, list the main risks that could potentially impact the execution of your plan. Explain the measures you've taken to minimize these risks. This is vital for investors or lenders to feel confident in supporting your venture - try to proactively address any objection they might have.
Your watches and jewellery wholesaler faces a variety of potential risks. One example of risk could be theft. The valuable products on display or in the store could be targeted by criminals, which could lead to a significant financial loss. Additionally, the products could be damaged or destroyed in a fire or other natural disaster. Such an event could lead to a lack of inventory and a decrease in sales, which could ultimately hurt the business’s profitability.
6. The operations section
The operations of your watches and jewellery wholesaler must be presented in detail in your business plan.
The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).
You should then state the operating hours of your watches and jewellery wholesaler - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.
The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.
You could have key assets such as the exclusive rights to the designs of certain watches and jewellery, as well as the exclusive right to the brand. This may give you a competitive edge over other wholesalers in the industry. Additionally, you might have intellectual property, such as trade marks, copyrights, and patents, which protect your products from being copied or reproduced without your permission. This could be incredibly valuable for your business in the long-term.
Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).
7. The presentation of the financial plan
The financial plan section is where we will include the financial forecast we discussed earlier in this guide.
Now that you have a clear idea of what goes into a watches and jewellery wholesaler business plan, let's look at some of the tools you can use to create yours efficiently.
What tool should I use to write my watches and jewellery wholesaler's business plan?
In this section, we will be reviewing the two main options for writing a watches and jewellery wholesaler business plan efficiently:
- Using specialized software,
- Outsourcing the drafting to the business plan writer.
Using an online business plan software for your watches and jewellery wholesaler's business plan
Using online business planning software is the most efficient and modern way to create a watches and jewellery wholesaler business plan.
There are several advantages to using specialized software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.
Hiring a business plan writer to write your watches and jewellery wholesaler's business plan
Outsourcing your watches and jewellery wholesaler business plan to a business plan writer can also be a viable option.
Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.
However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.
From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).
You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.
The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.
For these reasons, outsourcing the watches and jewellery wholesaler business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.
Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.
Why not create your watches and jewellery wholesaler's business plan using Word or Excel?
I must advise against using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write your watches and jewellery wholesaler business plan. Let me explain why.
Firstly, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is highly technical and requires a strong grasp of accounting principles and financial modelling skills. It is, therefore, unlikely that anyone will fully trust your numbers unless you have both a degree in finance and accounting and significant financial modelling experience, like us at The Business Plan Shop.
Secondly, relying on spreadsheets is inefficient. While it may have been the only option in the past, technology has advanced significantly, and software can now perform these tasks much faster and with greater accuracy. With the rise of AI, software can even help us detect mistakes in forecasts and analyze the numbers for better decision-making.
And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Moreover, software makes it easier to compare actuals versus forecasts and maintain up-to-date forecasts to keep visibility on future cash flows, as we discussed earlier in this guide. This task is cumbersome when using spreadsheets.
Now, let's talk about the written part of your watches and jewellery wholesaler business plan. While it may be less error-prone, using software can bring tremendous gains in productivity. Word processors, for example, lack instructions and examples for each part of your business plan. They also won't automatically update your numbers when changes occur in your forecast, and they don't handle formatting for you.
Overall, while Word or Excel may seem viable for some entrepreneurs to create a business plan, it's by far becoming an antiquated way of doing things.
- A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
- Having an up-to-date business plan is the only way to keep visibility on your watches and jewellery wholesaler's future cash flows.
- Using business plan software is the modern way of writing and maintaining business plans.
We hope that this practical guide gave you insights on how to write the business plan for your watches and jewellery wholesaler. Do not hesitate to get in touch with our team if you still have questions.
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