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A Wine Retailer Business Plan: avoiding Ready-Fire-Aim

Here’s an outline or sketch of a wine store business plan. I’ll probably post a full example plan in due course but this should give you enough to demonstrate how I feel a business plan should be written.

Part of the reason I’m posting a plan, is that I’m aware I keep talking about how important it is to start with your business and marketing objectives before deciding on a specific marketing tactic (e.g. facebook, SEO, twitter, email). So it gives a good context to one of my occasional rants about starting with objectives ;). Business Plan

The plan below is based on an old Deloittes small business plan template but then altered based on my marketing experience, for a wine shop, and other various business plans and templates I’ve seen over the last couple of decades.

You’d use it to plan and monitor your business of course – the E-Myth idea of working on your business not in your business. It is also the sections of a plan that a bank or equity investors would want to see if you need to raise cash.

For background you may want to read a previous post that outlines Wine Store Financial Feasibility Analysis, and briefly covers the Project Genome market segments.

=================== Sidenote on Semantics ===================

There is a lot of disagreement over the meaning of the words: Goal, Objective, Strategy, and Tactics. Here’s how I use them.

Mission: I don’t use this cause it sounds corny to me. I accept it has its uses though.

Objective: The most important outcomes for the business e.g. profit. When I use it for marketing it is usually around revenue or volume. A General would say “win the war”. We say “make profits” – perhaps not quite as motivating. Sometimes people call this a goal – I don’t.

A Marketing Objective example: To increase revenue by 20% while maintaining Gross Margins for the period 2010 vs 2009.

Strategy: A concept or idea on how to achieve the objective. I use the 4Ps (Product, Price, Place, Promotion) as a more robust way to come up with strategies.

A Strategy example: Competing wine outlets tend to be cheap and nasty, with discounting, clueless staff and poor product range. “Image Seekers” want advice, a wide range of premium wine in a sophisticated setting. We will attract more of the “Image Seeker” segment into store by having a premium store fit-out, staffed by with knowledgeable and helpful wine experts.

Tactics: The action points on how to implement the strategy.

A Tactics example: Premium fit-out. I will brief an interior designer by Oct-10, consulting budget is $5000, timeline for designer plan is 2 months with weekly meetings in Month 2. Then you’d list other action points to do with builders etc.

Tactics tend to be more short term – a list of action points. Strategies tend to be more ideas and longer term.


Here’s the plan with a bit of commentary and a few examples to bring it to life.

Wine Retailer Business Plan

Executive Summary

  • Succinctly cover the key parts of your business plan – probably the store, key financial figures and key marketing strategies.
  • This is all most people will read – I kid you not! It should be one page. Do this last.

Business Objectives

Major Issues

What are your major issues? From this will come your business objectives.

I suggest you just write all the issues down, then work out what are the most important by using your financial model and “gut feel”. There may only be a few. You are trying to get to the heart of what drives your business and then focus on the most important issues.

Business issues and objective example:

  • Usually at least one business issue is a financial one – you’re not achieving the profit that you’d like to. So the objective might be “make a net profit after tax of $150,000 in the next year”.
    • Your strategies to do this could be growing sales by 25% (Marketing strategy) while keeping gross margins (Marketing) and fixed costs (Operations) steady.

Another objective may be to increase growth rather than profits with the view to sell the business in a few years time. Or you may be facing unprecedented losses and need to stop hemorrhaging cash.

We’ll cover Strategies in the Marketing section below.

Other business issues may include

  • Very high fixed cost – perhaps your lease is too expensive (Operations – Lease Cost)
  • Cash flow issues – due to poor trade debtors (Finance – Accounts)
  • Customer Service – perhaps your staff are just plain rude (Operations – HR)

Time to analyze the market and your store.

Marketing and Sales

The Customers

Describe your customers, their wants and needs:

  • General demographics for local area: population, % adults, % wine drinkers
  • Extent of seasonality (around holiday periods)
  • Segments: Traditionalists, Image Seekers, Enthusiasts, Savvy Shoppers, Overwhelmed, Satisfied Sippers (see Project Genome and chart below)
WIne Consumer Share

Constellation Wines US on Wine Consumer Share

  • Choose your target segment(s). As this blog is all about small wine retailers I’d suggest you want to target the customers who often buy premium wines: Enthusiasts, Image Seekers, and Traditionalists. See Wine Store Financial Feasibility Analysis for segment profitability.
  • I would suggest you don’t bother targeting Savvy Shoppers, Overwhelmed, or Satisfied Sippers as they are likely to purchase from the cheapest place possible and/or only buy budget wines. You’re likely to pick up a small percentage share of these segments regardless (convenience, special occasion).
  • It is completely okay to choose one segment. I usually have a primary segment and then 1-2 secondary segments, with most of my effort is focused on the primary segment. You’ll pick up other segments based on convenience, shopping for a special occasion etc.

The Company

Describe the company and what you think it’s “mission” or overall aim is. Write a brief summary of:

  • Financials
  • Location
  • Fit-Out
  • Range
  • Staff
  • Point of Difference

So, for example, Financials may read: profit after drawings of $100,000 in the next financial year, revenue increased by 20%, at a 30% GM, overheads increase by 2%, and owner is only working 5 days per week / 8 hours per day.

The Competition

Describe the competition within 2, 5 or 20 miles. Also look at

  • Their estimated share of each segment.
  • Internet competitors.
  • Type: Grocery, Big Liquor Chain Store, Small Liquor Store, Fine Wine Store
  • Their points of difference

Major Marketing Issues

From this commentary you’ll probably identify many issues. The idea is to concentrate your effort on the most important issue to the business – what is having the biggest effect on the bottom line? A good financial model helps identify these. Check out how I’ve split out the segments by market share, margin and volume in this wine store financial model.

Chicken Milk Business Plan

Chicken Milk Business Plan - that should work.

Here’re some examples of marketing issues and objectives:

  • No one knows your store because you have little natural foot traffic. So your objective is to increase your store awareness.
  • You have a large liquor chain store close to your store which is sucking all the wine drinkers to their discount campaigns. So your objective is to recover market share without decreasing overall margins.
  • You have lots of foot traffic and great exterior signage so people know your store – but they aren’t giving you a try. Your objective is to encourage them to trial your store at least once.
  • People seem to buy from you once but never again. Your objective is to boost repeat purchase.

Marketing Objectives to Strategies

Once you have decided on your top few issues and corresponding objectives (about 2-5) then you can start your marketing plan.

It cascades out like this:

  • Business Objective
    • Marketing Objective
    • “Enthusiast” Segment
      • Marketing Strategy 1
        • Marketing and Sales Tactic 1
        • Marketing and Sales Tactic 2
      • Marketing Strategy 2
        • Marketing and Sales Tactic 3
        • Marketing and Sales Tactic 4
    • Segment 2 …

Using this method you’re forced to start with the customer. You get into his head first before you think of how you can help him. I start off each segment section with a description for example:

Enthusiasts – Like to browse the wine section, publications, and are influenced by wine ratings and reviews

What they want is different to this segment:

Savvy Shoppers: Shop in a variety of stores each week to find best deals, and like specials and discounts

Enthusiasts want information. Savvy Shoppers want discounts – leave them to the big guys.

So you’re now completely absorbed into the segment’s world? Great, start to come up with strategies for the Product, Price, Place, Promotion and Service.

I suggest you review the sidenote above for Strategy vs Tactics.

Strategies around: Service

Tactic suggestions:

  • Staff expertise
  • Formal vs Friendly
  • Tastings
  • Information in-store
  • Info/eCommerce on website

Strategies around: Product

Tactic suggestions:

  • Varietals, Regions by Price Points.
  • Range extent and stock holding

Strategies around: Price

Tactic suggestions:

  • Pricing at normal GM%/above/below
  • Discounting: always/occasional/never

Strategies around: Place

Tactic suggestions:

  • Foot traffic
  • Parking
  • Fitout

Strategies around: Promotion

Tactic suggestions:

  • Tastings
  • Clubs
  • Internet: SEO, PPC, LPO, SM etc (i.e. major parts of this blog!)
  • Newspaper, Magazine and Radio Advertising
  • Discount Campaigns
  • Holiday Campaigns: Gift with Purchase, Prizes

Do you have a Point of Difference?

Why will your target customers buy from your store, versus the competition. Review your above strategies for points of difference from your competitors. If you’re just a “me too” store then you’ll rely on price and convenience. Both of these strategies are fraught with problems.

Benchmarks or Measurements of Success

In objectives above we had a specific objective about profit. It was reasonably SMART: specific, measurable, attainable, realistic and timely. We need to do the same for each of our strategies and tactics. If they’re not successful we need to know so we can change or drop them.

Frankly I’m usually happy with something like this Who, What, When often with a budget amount attached to it

  • This Facebook Fan Page strategy will increase website traffic by 30% in Nov-10 vs Nov-09. I’m responsible. Budget of $1000 and 8 hours of my time.
  • My Email Marketing campaign will increase average eCommerce order size from $30 to $50 in the month of Nov-10. No budget, 4 hours of my time.

So that’s marketing. Let’s move onto the less interesting parts of the business :).



  • Your Management Ability / HR Consultant; Staff #s, salaries, conditions, training
  • Goals: Customer Satisfaction, Qualified Staff, Staff Turnover

IT Systems

  • Point of Sale, Register, Inventory System, Accounting System
  • Goal: No downtime, accurate timely inventory and accounting


  • Negative cashflow, Unexpected Events (bad debt, sickness, IT failure), License issues (prosecution). Insurance.


  • CashFlow budget/actual/forecast
  • P & L, Balance Sheet
  • Cost-Volume-Point
  • Break-even analysis
  • Access to Financing (overdraft, loans, owner or third party equity)
  • Large outlays (e.g. fitout, computers)
  • Goals

The Absolute Core

Frankly if you’re doing this for yourself just grab a large piece of paper and do the following:Business Plan Sketch

  • 3Cs – Customer, Competition, Company
  • 4Ps – Product, Price, Place, Promotion and Service (okay that’s not a P)
  • CashFlow – budget/actual/forecast. Small businesses run on cash, the rest don’t matter.
  • Cost-Volume-Point leading to Break-even analysis to help monitor cash.

Not good enough for your bank but it cuts right to the heart of the matter if you’re trying to get your head around your business.

What’s your thoughts? There are lots of business plan formats, what do you use?

Photos: Business Plan, What I do at Work, How to start a Business
Sources: Deloittes, KPMG, Richard Higham

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