How can you ensure your sales budgeting plan is sustainable for new store development?

1 Assess your current situation

Before you start planning for new store development, you need to have a clear picture of your current sales performance, costs, and profitability. You also need to identify your strengths, weaknesses, opportunities, and threats (SWOT) in relation to your competitors, customers, and industry trends. This will help you determine your growth potential, gaps, and risks, and set realistic and measurable objectives for your new store development.

2 Estimate your revenue and expenses

Once you have your objectives, you need to estimate how much revenue and expenses you will generate and incur from your new store development. You can use historical data, market research, and industry benchmarks to project your sales volume, price, and margin for each new store. You also need to account for the fixed and variable costs of opening and operating each new store, such as rent, utilities, inventory, staff, marketing, and maintenance. You should also include a contingency fund for unexpected costs or delays.

3 Evaluate your return on investment

After you have your revenue and expenses estimates, you need to evaluate your return on investment (ROI) for your new store development. ROI is a ratio that measures how much profit you make from your investment relative to its cost. You can calculate ROI by dividing the net profit (revenue minus expenses) by the total investment (initial and ongoing costs) and multiplying by 100. A higher ROI means a more profitable investment. You should compare your ROI with your target ROI, which is the minimum acceptable return you expect from your investment. You should also compare your ROI with the ROI of other investment options, such as improving your existing stores or launching new products.

5 Communicate and execute your plan

Finally, you need to communicate and execute your plan effectively. You should share your plan with your stakeholders, such as your senior management, investors, staff, suppliers, and customers, and explain the rationale, benefits, and risks of your new store development. You should also assign roles and responsibilities, set deadlines and milestones, and track and measure your progress and results. You should also celebrate your achievements and learn from your challenges along the way.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?