Business planning for retailers made easy: translating revenues and profits into product volumes
Accurate, targeted costing is integral to your business plan. Many businesses in the retail sector face the challenge of aligning their product volumes with their revenue and profit for the fiscal year. This alignment is important if you are going to accurately transform your revenue and profit into predictable product volumes for the year to come. It can be tricky, however, to ensure that your revenues and product volumes are integrated. Here are some key things to consider:
1. Automating your retail business plan
A retail business plan encompasses key aspects of the retail trade, including financial planning, seasonal planning, merchandise and pre-season business planning, and open-to-buy planning. Business planning should track these events and present scope for financial planning, for both short-term and long-term sales goals.
Business planning for a retail store should involve a (flexible) business model, forecast, and strategy for the management of revenues. Using automated processes to log and analyse historical data can provide a revenue forecast. This data can be automated to include seasonality and the impact of holidays and expenses. Using top-down targets, managers can fine-tune the trickier aspects of a retail business plan to include periods of closure, maintenance, and employee concerns.
3. Product category volume
This is based on store sales and is the weighted measure of distribution within a specific product category. Information on product category volume helps managers examine the share of certain products sold within a category. All-commodity volume is the total sales volume for the year, including data from the store level up to wider geographical areas. Template-based software systems, and automated cloud-based features, are used by businesses to further personalize their business plan for retail stores.
4. Product volume variance
What is exactly "Product volume variance"? This value measures the overhead costs relative to the number of units sourced. In other words, it is the difference between forecasts and actual units sourced in a certain period. Being able to automatically calculate short-term and long-term produc volume variance makes it easier to track your progress and include forecasts in your business planning. If your business planning involves trying to reduce sourcing cost, it may be critical to modernise your budgeting software in order to effectively pinpoint areas for reduction.
5. Envision, plan, and execute your retail business plan
Using tailor-made software business planning solutions allows businesses to communicate and integrate with various online systems, including cloud software, and set up multiple work streams from a full range of inputs. When you standardise the inflow and outflow of information (such as the ability to call an API or query a SQL database), you are providing support for modern data standards and making use of predictive analytics, meaning that retailers can plan and manage their unique inventory as well as seasonal and annual promotions, and apply this knowledge to the merchandising plan for the following year.