Business Plan – Convenience Store

Business Plan blokes A cozy Store that designed for your necessarily pic Business Plan by Lydia Chan CONTENTSpic 1. Executive Summary chaps is a convenience cut in specialized in servicing insouciant needs of occupants of the office create where it is primed(p). It passs variety of carrefours to satisfy customers cursory needs including snacks, pre-wrapped sandwiches, bottle/canned beverages, stationery, greeting cards, novelspapers, paperback books and small gift items. The showtime gallants Store was set up in 2007, a 1,000 squargon feet memory located in the manor hall of Empire Centre in Kennedy commercial district.This retentivity is solely owned and managed by Lydia Chan. With fully cerebrate and correct product line scheme, companions been able to get break-even in the eleventh month, and reaches to an annual revenue to US$300,000 last year. It has thrivingly built up an image of a convenience bloodline that is neighborly and customized to the occupants of the Empire Centre and the neighborhood expressions. With the proven success of the first gallants Store, Lydia is fully positive(p) to expand the business by blusteringing a stand by store with identical business strategy. The profound to success is to find a nonher perfect position.The golden opportunity is now appearing, on that point is a new office building, Sky mainstay, get out be opened by end of this year. Sky Tower is ripe two blocks away from Empire Centre. Besides the usefulness of mild management derived from the close by location of the two stores, to make this location perfect for swains is that Sky Tower is an A hit eighty-storey office building which create huge number of potential customers for fashion plates. 1. Mission The Mission of Busters is to furnish friendly service and thoroughly prime(prenominal) of products to occupants of the buildings.Good mix of variety product items be perfectly meet customers needs in their daily work lives. 2. Objectives 1. To make Busters the preferred convenience store for the occupants of the building where it is situated and the neighborhood. 2. To break-even by the end of the first year. 3. To achieve a net profit of 5% by year iii. 3. Keys to Success 1. Establish an image that Busters is their convenience store for the customers. 2. To turn over inventorying an average of 15 20 times per year. 3. To provide friendly service and premium quality products. 2. Company SummaryThe first Busters store is owned and operated by the founder, Lydia Chan, in Sole Proprietorship. The concept of this new venture is a convenience store that specially services occupants of the office building where it is situated. The first store was set up in 2007 located in Empire Centre in Jordan district. It is a 1,000 squargon feet store in the vestibule with 2 full time employees. In 2009, annual revenue of this store is US$300,000. With the earned capital and experiences from the first store, Lydia belie ves it is the mature time to expand her business by establishing a second store.In order to settle the financial and professional background, the second store bequeath be in partnership set up. 1. ownership The new Busters store is privately owned corporation in partnership basis. Lydia Chan owns 75% of the second store. She leave work full-time in the store in the first year to batten smooth day to day action. In the second year and onwards she leave be fractional day in the first store and half day in the second one. Carmen Chan owns 25% of the second store. Carmen is the elder sister of Lydia, she is a chartered accountant in Hong Kong Bank.She result provide financial advice and admirer for Busters. 2. Employees Base on the experience of the first store, we anticipate two employees argon sufficient for the daily operational need. There atomic number 18 two full-time shop assistants in the first Busters store, Christine and Mina. Christine, high indoctrinate graduated , joined Busters since it was launched in 2007. Her experiences in nurturing infancy Busters and daily operation atomic number 18 valuable to the second store. She leave aloneing be promoted as shop supervisor and transfer to the new store.Christine forget be responsible to coach and mentor the early(a) new hired shop assistant, service customers, keep tract inventory/ successor and report customers comments/complaints to Lydia for ensuring corrective action be taken. We will hire a nonher shop assistant to work together with Christine. Criteria ar High school graduate with 1-2 years retailing sales experience. 3. Financials 1. Start-up Finance Summary Anticipated start-up cost of the new store is US$200,000. The main cost of start-up will be inventory.It is estimated that the initial inventory purchase will be $100,000. In addition, $30,000 will have to be spent on fixtures and fittings for the store. Since it is a brand new building, there will be no maintenance mandatory before move-in. Funding will be number from the combination of the two owners from their own savings. Lydia Chan (75% ownership) contributes US$150,000 Carmen Chan (25% ownership) contribute US$50,000 2. Start-up Cost Summary This table shows a summary of start-up cost and expenses pic 3. 3 Anticipated Revenue and Operating Cost for the First Year pic 3. 4 Pro-forma cash flow projection for the first year of operation pic 5. Break even Analysis The interest chart and table show the break-even analysis for Busters pic pic 3. 6 Anticipated return on investment in the first trinity Years The following table provides the anticipated return on investment from the perspective of three years into the revenue pic 4. Marketing / rough-cut revenue 1. Summary of Marketing and Sales Strategy Busters new store will be situated in the lobby of Sky Tower, a new office building in a concentrated commercial atomic number 18a, Kennedy District.Busters get wind customers be occupants of Sky To wer. According to the information from the Building Management office, 80% of the total vacant units were undertake out and under interior fixtures and fittings stage. These companies will be moving in within two to three months which will secure customers flow when Busters is launched. 4. 2 Market Segmentation Occupants of the building are owners and employees of medium to sizable international corporations. They can be divided into 3 market segments A) Aged 25 39 Male They require speedy service, just pick and pay.Half of them are wealthy Yuppies in carriageial take aim, they do non mind to pay a little higher for the convenience and good quality. They are busy in work and social life, our fresh pre-wrapped sandwiches, popular bottled beverages and high end trade snacks will suit their needs. B) Aged 22 35 Female Same phenomenon as other(a) gold cities, all ladies are keen to slim down their bodies and are cautious in selecting food. It is more lucid for this age group of ladies. They always search for healthy food and snacks.On every category of food, Busters will have a special tree for healthy food with notes on shelves for their easy perusal. Healthy food including vegetarian brown bread pre-wrapped sandwiches, low calories snacks, herbal tea and fruit juice types of bottled beverages and and so on These ladies may be secretaries or work in the administrative departments who are responsible to purchase stationeries for the offices. They will naturally select Busters for convenience while they are purchasing their own personalised needs. This is a critical customers group for Busters.C) Miscellaneous This includes the middle-aged group, outsiders/visitors and etc that they have varied or capricious buying pattern. Continuous analysis of this group is required in a quarterly basis when Busters store is launched to ensure our service and products intersect their needs. 3. Product Strategy Busters emphases are on friendly service and good qu ality of products that fit the requirements of pack in their workplace. We do not just follow what merchandising in super markets or claimd convenience stores. We focal pointing on customization.The following listed are the key categories for Busters. A) Pre-wrapped sandwiches Homemade sandwiches with 4 different choices of fillings egg and ham, beef, chicken breast and respective(a) vegetables. These are basic pre-wrapped sandwiches. In addition, we likewise provide small individual packed fillings such as chess, tomato, cucumber and eggs as supplements, so customers can design and make their own sandwiches in their offices. This will satisfied customers who are looking for variety of choices but without burdening our inventory. B) Bottled/Canned beveragesThe most popular bottled/canned beverages are in stock(predicate) in Busters which including soft drinks, coffee, tea and milk. We also provide healthy drinks such as herbal tea, flower flavored tea, juice, Soya bean mil k, flavored mineral water, and etc. C) Snacks Popular branded snacks of chips, chocolates, candies and gums are must items in the shelves. To take care of the needs for customers who are pursuing for healthy life, special filling of snacks such as sun-dried fruits, organic food, low calories/calcium crackers, sugar free candies/gums are also available in our Healthy Corner.D) Stationery and Greeting Cards To take care of the sharp or urgent needs of the office people, we will provide certain basic items of stationery and greeting cards but to cautiously control this category of goods occupying not exceed 10% of total unwrap/shelf space. E) Gifts Small gifts can also be found in Busters. Regular items are gift sets of premium chocolates and tea bags which are appropriate round the year and for all occasions. Buster will display specialty gifts in front desk for festivals like New Year, Valentines day, Easter, Halloween, Christmas and etc.The specialty gift sets to go both purpose s of stimulating sales and decorating the store to lift up spirits. F) Newspapers & Magazine The top five beat out selling newspapers are available in Busters. 6 8 different categories of magazines about fashions, accessories, entertainment, computers, automobiles to cover varied customers desires. 4. Pricing Strategy As mentioned in the product strategy section, most of the categories are not common products as other convenience stores because Busters emphasis is on premium quality food and drinks.She is comparatively not facing harsh outlay comparison as other franchise convenience stores for different target customers. Busters customers, occupants of Sky Tower, mainly are yuppies and office ladies, who are willing to pay a little more for convenience and better quality. Therefore, Busters price ranges for key products are ? Pre-wrapped sandwiches US$4. 0 US$5. 5. ? Premium quality and healthy snacks US$2. 5 US$7. 0 ? Canned/bottled beverages US1. 2 US$3. 0 ? Common product s that are also available in other convenience stores 5 to 10 percent higher than them.Target is to reach gross margin (sales deduct cost of goods) at 37. 5 38% 4. 5 Promotion Strategy Busters customer sensual is concentrated and close-by, they will pass by the store everyday when they go to work. Location is our best promotion tool. Occupants of Sky Tower will know the existence of Buster, so our focus of promotion is to attract them to stop by Busters and to experience the difference with other ordinary convenience stores. They will be impressed by our friendly service, wide ranges and unique food and beverages. line will be our largest promoter. A) Flyers Flyers, an efficacious and inexpensive way to notify people in Sky Tower and neighborhood buildings that their store Busters is opening soon. Flyers will be passed around at the building entrance a week before grand opening. On face side of flyers is an attractive ornamentalist sketch of the Busters store (sketch is used t o be more attractive than photo or words), and on the reverse side is a list of product items that will be available in Busters. Distribution of flyers will be continuous after Busters is opened.Distribution espy will also be increased to cover the neighborhood buildings. B) Busters Card For initial purchase exceeding US$10, a Busters Card will be provided with a Busters logo stamp on it. Each $10 purchase onwards will earn a stamp. When accumulated to 5 stamps, a free gift will be given. This is effective to stimulate customers to buy more, or to request their colleagues to consolidate the purchase (Word-of-mouth advertising). Gifts are selected products from the store such as snack, stationery, chocolate, etc and will be changed each month to maintain freshness of the game. . 6 Competition Despite of having the matched edge of location, we anticipate Busters will face disputation from 2 areas. A) Convenience Stores This competition will be from national franchises such as 7-11 and Circle K. They have established extensive net profit of chain stores and are well-known to Hong Kong people. People are almost pass by two to three these convenience stores in their everyday life. Due to consolidation of bulk purchase, these franchises obtain strong bargaining situation with suppliers for both costs of goods and payment terms.There is one 7-11 store located in the main street, 8 minutes walking distance from Sky Tower, and one Circle K in the opposite corner to 7-11. It is inevitably Sky Tower people will pass by these stores. Busters strategy in competing with these stores is not pricing but differentiation. ? Product flexibility Franchise convenience stores are selling standardized products regardless of demographic/geographic needs. Busters customer base is concentrated and focused. Products are selected according to their lifestyle, habits and preferences.We are also flexible and prompt to alter products items base on customers and sales feedbacks. ? ecce ntric and high quality food and beverages Busters target is to have 70% of product items not identical to those convenience stores. Our tasty homemade sandwich is a typical example while other stores are selling mass produced sandwiches. ? Customers relationship Busters customers are actually our neighbors that we are functional in the same building. This benefits us to build close relationship while other convenience stores focus on speedy in-and-out service. B) PlagiaristStart-up capital of lobby convenience store is comparatively lower than other main street retailing stores or franchise convenience stores. Low entrance barrier will attract people who want a start-up venture by copying the same concept as Busters. 5. Operation 1. Location of the business The new business venue of Busters will be located in the lobby floor of Sky Tower, a new office building in No. 23 Harbor Road, Kennedy District, Hong Kong. When Lydia, owner of the first Busters store, decided to open the secon d store, she had gone through serious research and calculation because location is essential to be successful and profitable.The following listed are factors why Sky Tower is the right place. ? Scale and income level of Customer base Sky Tower is an A-grade commercial building, tenants are mainly big corporations in business relating to international trading, banking and investment, insurance, chronicle and etc. Anticipated total occupants will be 3,000 to 4,000. Most of them are professionals and/or high income level employees. This creates a beneficial customer base for Busters. ? Close by location of the two Busters StoresSky Tower is just two blocks away from the first Busters store, this creates advantage for the owner to manage the two stores in the long run. In addition, the two stores can help each other if there is urgency for products that are out of stock. Staff can furnish the urgently needed goods to the other store within 10 minutes. ? Surroundings Sky Towers surroun ds are also commercial buildings, with some exclusive restaurants and casual cafe. No convenience store located in adjacent buildings, just two which are 8 to 10 minutes walking distance.All these neighbors are valuable and potential for Busters. 2. Operation of the business A) Hours of Operation The common working hours for offices (white collar) in Hong Kong is 900 AM to 600 PM, Monday to Friday, some work on Saturday 900 AM to 100 PM. For Busters, business hours is 800 AM to 730 PM Monday to Friday, 830 AM to 200 PM on Saturday. Opening at 800AM is to dispense breakfast for customers. Close at 730 PM is to take care of the needs for customers who are required for over-time works which is very common in Hong Kong.To ensure Busters employees are not exhausted by long working hours, operation will be in two-shift. The 2 employees work from 800 AM to 500 PM, and the shop manager (that is the owner) take the second shift from 1000AM to 730PM. B) Service Procedures Friendly service is Busters emphasis and promise to our customers. This must be clearly shared with employees that without their efforts, Busters will not get success. They are required to follow the below listed service procedures to ensure a cheerful shop experience to every customers. ? Greeting with grinningGreet every customer with a friendly smile who enters the shop. For familiar customers, chat with them to build-up an on-going relationship. ? Serve efficiently and effectively For customers who have clear decision on what to buy, serve them efficiently. For customers who are browsing, hesitating what to buy or unfamiliar with Busters products, staff must to offer help by providing advices/recommendations or a brief introduction of Busters products according to customers desires. Nevertheless, no hard sale, customers are still welcomed without purchase. ? InteractionWhen customers prepare to pay and leave, we must to say Thank you and bye-bye with eye-contact and friendly smile. This is the l ast process step and interaction with customers in a transaction, it is vital to leave a cheerful image in their mind which can be deep-rooted. C) Inventory management Effective inventory management is essential for Busters to maintain wide variety of product items in special(a) space. Ultimate goal is to maintain a minimal but adequate stock and make replenishment in a weekly or bi-weekly basis depend on products feature and turn-over.POS system will be employed to control in-and-out systematically and to minimize human error. Cashier will input interchange items automatically. Every end of the day, Christine ( divulges supervisor) to generate and check inventory status report and pass to Shop Manager for analysis and deciding which items needed to replenish. Christine is also responsible to input data everyday when suppliers deliver goods to ensure inventory record is up-to-date. 6. Legal Issues The following listed legal documents and evidences will be well active and to ensu re they are all completed and valid before the launch of Busters. Business license in partnership proprietor basis ? Busters trade mark registration ? occupancy Agreement with Sky Tower Property Management Office ? Employment contract with the two Busters employees ? Purchase Medical insurance for employees ? Business Insurance Legal Consultant will be hired to ensure accuracy of legal documents and coverage. 7. Challenges A) Sustainability of Busters competitive edge Location is Busters competitive edge as we are close to the concentrated customer base. This edge will be threatened if there are any new retail tores open in the surrounding areas, they can be hypermarket or new concept food stores that tempting Sky Tower people willing to sacrifice the convenience but to walk a little bit far to smack new shopping experience. B) Constantly excite customers Our customer base is young, high-income group they have strong purchasing power that leads them to have extensive options. They pursue for premium quality and trendy commodities. It is an on-going challenge for Busters to keep having products that excite customers. End