10 mistakes to avoid in developing a business plan
The Wine & Spirits industry is a capital intensive business with an average store set up investment between $450,000 to over a million dollars. A small variance compared to your plan/budget can lead to tremendous costs overruns from $10,000 to $100,000 or delays in the opening date due to operational or financial factors including possible delays in securing financing.
Exhibit 1.0 – There Performance Group’s 10 mistakes to avoid when operating a wine & spirits store
Mistakes:
1. Poor site selection
Result: Lack of store traffic or high marketing expense to compensate
Cost indice: $ $ $ $ $ $
2. Lack of market research
Result: over/under estimating your financial projections
Cost indice: $ $ $ $ $
3. Poor product mix (wine/liquor/beer)
Result: Lack of momentum on store traffic, sales and margins
Cost indice: $ $
4. Poor inventory management
Result: Stock outs or over spending and increase in bad inventory
Cost indice: $ $
5. Lack of strategy to increase Gross Profit Margin (GPM)
Result: Loss of precious profit points required to increase marketing and training expenses
Cost indice: $ $ $ $
6. Lack of merchandising solutions to push in store products with highest GPM
Result: Lower store profitability
Cost indice: $ $
7. Lack of management tools and process (inventory, sales, marketing, product selection)
Result: Lower sales and margins and higher operating expenses
Cost indice: $ $ $ $
8. No Branding strategy – lack of a Unique Selling Proposition
Result: Lack of defined market positioning and brand awareness
Cost indice: $ $ $ $ $
9. No Marketing strategy in place to increase store traffic
Result: Lack of consistent growth momentum
Cost indice: $ $ $ $
10. No regular data tracking and analysis
Result: Lack of clarity in problem definition and SMART goals
Cost indice: $ $ $ $ $
