Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts.
The point of your Executive Summary is to get the reader’s attention quickly. Tell them what kind of vape business you run and what its status is. For example, are you a new business, do you own a vape shop that you want to grow, or do you run a chain of vape shops?
Next, give an overview of each part of your plan that follows. For instance, you could give a short summary of the vape industry. Talk about what kind of vape business you have. Detail your direct competitors. Tell us about your ideal customers. Give a brief overview of your marketing plan. Find the important people on your team. And explain what your financial plan is.
In your business analysis, you will explain what kind of vape business you have.
For example, you might own one of the following types of vape shops:
- Convenience store with a vape section: this type of business will sell snacks and drinks, as well as vape products, like you’d find in a small convenience store (usually behind the register or a counter somewhere in the shop).
- Vape Lounge: This kind of vape shop sells vape products and has a room where people can hang out while vaping.
- Vape Showroom: Like a jewelry store’s showroom, this kind of vape shop is mostly about showing off the things they sell.
- This type of vape store sells products online instead of in a physical location.
In the section of your business plan called “Company Analysis,” you need to explain what kind of vape shop you will run and give some background on the business.
Answers should be given to questions like:
- When did you start your business, and why?
- What important steps have you taken so far? Milestones could include the number of customers served, the number of good reviews, the number of conventions attended, etc.
- Your legal structure. Are you set up as an S-Corporation? An LLC? A single-person business? Tell us about the legal structure of your business.
In your industry analysis, you need to give an overview of the vape business.
Even though this may seem pointless, it has more than one use.
First, learning about the vape industry gives you knowledge. It gives you a better idea of the market you are in.
Second, market research can help you make your strategy better, especially if it shows you market trends.
The third reason to do market research is to show your readers that you know a lot about your field. You do just that by doing the research and putting it in your plan.
In the industry analysis section, you should answer the following questions:
- How much money does the vape industry make?
- Is the market going down or up?
- Who are your main rivals in the market?
- Who are the main market suppliers?
- What changes are happening in the field?
- How fast is the industry expected to grow in the next 5–10 years?
- How big is the market that matters? That is, how big could your vape shop’s market be? You can figure out such a number by figuring out how big your target market is in the whole country and then applying that number to your local population.
In the customer analysis section, you must explain who you serve and/or who you hope to serve.
Ex-smokers, current smokers, and social smokers are all examples of customer groups.
As you might expect, the type of vape shop you run will depend a lot on the customer segment(s) you choose. Obviously, a former smoker would react differently to marketing campaigns than, say, a smoker who only does it sometimes.
Try to figure out who your ideal customers are based on their demographics and how they think and feel. In terms of demographics, talk about the ages, genders, locations, and levels of income of the customers you want to serve. Most vape shops mostly serve people who live in the same city or town. Because of this, it is easy to find demographic information on government websites.
Psychographic profiles tell you what your customers want and need. The better you can understand and describe these needs, the easier it will be to find new customers and keep the ones you already have.
In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.
Other vape shops are their direct competitors.
Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes tobacconists, hookah bars, and shops that sell cigars. You should also talk about this competition.
In terms of direct competition, you should talk about the other vape shops that you are in competition with. Most likely, your main competitors will be vape shops that are very close to you.
Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:
- What kinds of e-liquid do they have?
- What kinds of vaping gear do they focus on?
- How much do they charge (high, low, etc.)?
- What can they do well?
- What do they do wrong?
For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.
The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:
- Will you have a wider range of flavors for vaping?
- Will you give customers special deals or perks?
- Will you treat your customers better?
- Will you price things better?
Think about how you will do better than your competitors and write them down in this part of your plan.
Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. In your marketing plan for a vape shop, you should do the following:
Product: In the section about the product, you should repeat the type of vape company you wrote about in your Company Analysis. Then, give specifics about the products you’ll be selling. For example, in addition to retail sales, will you let your customers choose their own flavors, offer free products, or have more than one place to sit in your shop?
Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.
Place: This is the address of your vape shop. Write down where you are and how that will affect your success. For example, will you have a storefront where you sell your products directly to customers? Will you sell via an ecommerce site? Or will you sell e-juice to other stores, which will then sell it to customers? In this section, write down how you plan to sell your products.
The last part of your marketing plan is the section on promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:
- Putting ads in newspapers and magazines in your area
- Contacting local websites
- Signs and billboards
- Social media marketing
- Local radio advertising
In the other parts of your business plan, you talked about your goals. In your operations plan, you talk about how you will reach those goals. Your plan for operations should have two separate parts.
Everyday short-term processes include everything you need to do to run your vape shop, like ordering and keeping track of inventory, managing your shop, making sales, and advertising your business.
Long-term goals are the goals you want to reach in the future. These could be dates like when you expect to make your 1,000th sale or when you want to earn $X. It could also be when you plan to open a vape shop in a new location.
A strong management team is a must if you want to show that your vape shop can be successful. Showcase the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.
You and/or your team members should have managed vape shops directly. If so, talk about your experience and skills. But also highlight any experience you think will help your business succeed.
If your team is missing something, you might want to put together an advisory board. A two-to-eight-person advisory board would help your business in the same way that a mentor would. They would help answer questions and give advice on how to plan. If you need to, look for advisory board members who have managed a retail store or a small business well.
Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.
A more common name for an income statement is a Profit and Loss statement, or P&L. It shows your income and then takes away your expenses to show if you made a profit.
You need to make assumptions in order to make your income statement. For example, how many customers will you serve each week? Or 100 per day? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.
Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 building out your vape shop, you won’t start making money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.
Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realize that you can make money but still go bankrupt if you run out of money.
When making your Income Statement and Balance Sheet, make sure to include some of the most important costs of starting or growing a vape shop, such as:
- Location build-out, which includes construction, design fees, etc.
- Cost of supplies and equipment
- Payroll or salaries given to employees
- Insurance for businesses
- Taxes and licenses:
- Legal business expenses