Executive Summary
Cheap Store is a retail store aiming to provide cheap bargains on clothes in the retail market. The merchandise will range from ladies clothes and kids, focusing mainly on the provision of unique clothing that matches the consumers’ needs. The shop is owned by a sole proprietor, and it is funded by private funding and, in this situation, the sole proprietor’s savings. A bank loan can be used where the company’s funding is insufficient, and this will help to ensure that the company’s operations are strengthened. A successful marketing strategy would aid in the company’s development as well as increased visibility of the store’s merchandise.
Product
The business would market women’s and children’s apparel as well as accessories. The emphasis on these items is attributed to a rise in retail demand, implying that the store’s market reception would boost. The study of consumer income patterns aids in concentrating on a single target segment. This necessitates a stronger emphasis on the consumer base, who the business finds to be sensitive to the goods sold. The goods are of a good standard, which improves consumer loyalty. There is a need to analyze the perception of the products in the market as it is through this, there is the determination of the need to improve on the performance of the products.
Customers
The store’s target customers are ladies and children, and the products offered are geared towards attracting low-income earners. The store provides convenience for the shoppers and ensures that there is self-sufficiency in the customers’ products. In order to enhance the shopping experience, an overview of the population in the target market is important, as is an emphasis on the company’s development. The store’s reputation is based on promoting creativity and assisting consumers in getting the products they need at any given moment. Many of the company’s clients are on fixed wages, meaning that the store would tend to the desires of those who cannot afford to shop in high-end establishments.
What Drives Us
The organization is motivated by a premium on low-cost products, which aids in the company’s increased profitability. Per year, the earnings are analyzed, and it is through this that the company’s ties are continually improved. The focus on the company’s needs helps increase the productivity of the employees and the needs of the community. There is dedication towards the improvement of the environment, which helps in the analysis of the need to ensure that the consumers’ satisfaction is a priority in the store.
Company Description
Mission and Vision Statements
The mission of the company is the provision of a variety of products at affordable prices. The dedication to the consumers’ needs is essential in giving the best services that they expect. The employees are respectful to the customers, which helps ensure that the business environment is conducive to the achievement of the needs of the consumers.
The company’s vision is to become one of the best bargain stores that are focused on the provision of sustainability towards the needs of the consumers. There is an analysis of the requirements to make a difference in the market as the products offered are of quality. There is the consideration of the community’s economy. The analysis of the community’s needs ensures that there is a focus on the growth of the community and the enhancement of success.
At the start-up, there are 2.2 main members. (This portion would be expanded in Unit 7 to provide medium and long-term staffing arrangements for all team members, including line staff.)
Write the proposal, especially the segment on how to present each team member and explain their history and responsibilities. You’ll begin with the leaders and managers, then move on to other employees as required.
- Accountant- The accountant will focus on preparing the company’s financial statements, helping in the improvement of the company’s efficiency.
- Sales representative- The sales representative is in charge of the company’s sales, which involves making sure that the customer experience in their shopping improves.
- Manager- The manager will ensure that there is an order in the company’s operations is focusing on the increase in profitability.
- Cleaner- Responsible for cleaning of the premises, ensuring that the store is presentable at all times.
Use this spreadsheet to show the planning
| Leaders/managers (unit 1) | When needed (number of months/years after opening) | Outside Services Needed | |||
| Key Functions | |||||
| Manager | 1 month | Ensure that the operations of the store are in order, | |||
| Sales Representative | Immediately | To help in driving of sales ensuring that the clients get the goods that they require. | |||
| Accountant | Immediately | ||||
| Add line staff (Unit 7) | |||||
| Cleaner | Immediately | Ensure that the premise is clean throughout. | |||
Legal Structure
The store is a sole proprietorship, which means that the owner has a liability to the business. They are responsible for any kind of losses and profits that the company makes. The company’s obligation in terms of the payment of taxes helps in the analysis of the structure of the business and the licenses and the permits that the company needs.
Market Research
Industry (from SBA, Business Guides by Industry – https://www.sba.gov/managing-business/business-guides-industry, and Bureau of Labor Statistics – https://www.bls.gov/iag/tgs/iag51.htm, )
- Industry Description
- Resources Used
Customers (from SBA site fill in worksheet, then use text for spreadsheets and follow-up explanations)
Add SBA part here
Then:
Fill in spreadsheet using this example from the text:
| Housewife: | Married Couple: | ||
| Age: | 35–65 | Age: | 35–55 |
| Income: | Fixed | Income: | Medium to high |
| Sex: | Female | Sex: | Male or Female |
| Family: | Children living at home | Family: | 0 to 2 children |
| Geographic: | Suburban | Geographic: | Suburban |
| Occupation: | Housewife | Occupation: | Varies |
| Attitude: | Security minded | Attitude: | Security minded, energy conscious |
| Older Couple: | Elderly: | ||
| Age: | 55–75 | Age: | 70+ |
| Income: | High or fixed | Income: | Fixed |
| Sex: | Male or Female | Sex: | Male or Female |
| Family: | Empty nest | Family: | Empty nest |
| Geographic: | Suburban | Geographic: | Suburban |
| Occupation: | White-collar or retired | Occupation: | Retired |
| Attitude: | Security minded, energy conscious | Attitude: | Security minded, energy conscious |
Beginning with the heading “Customers,” explain who you’re approaching and where they’re based. Fill in the blanks with the following information:
Information on the Market You’re Trying to Reach – Reduce the scale of the potential group to anything achievable. Often companies make the error of attempting to sell to a large number of potential audiences. The following facts regarding your competition should be researched and included:
What are the critical needs of your potential customers? Distinguishing qualities – What are the critical needs of your potential customers? Is it true that such requirements are being met? What are the group’s demographics, and where are they located? Are there any seasonal or cyclical buying patterns that could affect your company?
Scale of the main target market – What details would you provide on your market’s annual sales in your sector, in addition to its size? What is the market growth outlook for this group? See our market analysis guide for more detail, including tips and free government tools that can assist you in developing a market profile.
What percentage of the competition would you capture? – What proportion of the market share and amount of consumers do you hope to gain in a certain geographic area? Explain how you arrived at your decision.
Competitors (from SBA site fill in worksheet, then use text for spreadsheets and follow-up explanation)
Then:
Fill in spreadsheet using this example from the text:
| Estimated Market Share | Competition 60% | Home Improvements Inc. 30% |
| Product Line | 4 | 5 |
| Quality | 4 | 5 |
| Technology | 4 | 5 |
| Advertising | 2 | 5 |
| Sales Force | 3 | 5 |
| Distribution | 3 | 4 |
| Price | 4 | 4 |
| Installation | 4 | 5 |
| Ease of Use | 4 | 5 |
| Appearance | 3 | 5 |
| Design | 4 | 5 |
| Useful Life | 4 | 4 |
| Responsiveness | 3 | 5 |
| Availability | 1 | 5 |
| Technical Expertise | 4 | 5 |
| Repair Service | 3 | 5 |
| Efficiency | 3 | 5 |
| Guarantee/Warranty | 5 | 5 |
| On Time Capability | 4 | 5 |
| Industry Reputation | 3 | 5 |
Using the details from the spreadsheet, write an explanation of your results using the following guidelines:
- Share of the market
- Weaknesses and abilities
- To your rivals, how relevant is your target market?
- Are there any obstacles in the way when you reach the market?
- When is the right moment for you to reach the market?
- Are there any possible opponents that aren’t specifically dealing with you?
- What industry hurdles remain (e.g., emerging technologies, high acquisition costs, a scarcity of skilled personnel)?
Competitive Advantage
Read: Sustainable competitive advantage or temporary competitive advantage: Improving understanding of an important strategy construct.
Regulation (use SBA site to fill in blanks, and use https://www.sba.gov/managing-business/business-law-regulations as a resource)
Product/Service Line
- Product or Service
- Pricing Structure
- Product/Service Life Cycle
- Intellectual Property Rights
- Research & Development
Marketing and Sales
Plan for Development
- A development plan, as well as a consumer expansion strategy. This strategy for growing your business could include an internal system such as how to increase your human resources, and acquisition strategy such as buying another company, a franchise strategy for branching out, a horizontal strategy where you will provide the same type of products to different users, or a vertical strategy where you would continue to offer the same products but instead of course.
- Distribution channels plan Original equipment manufacturers (OEMs), internal sales forces, dealers, and stores are also options for delivery outlets.
- A communication plan. How can you communicate with your customers? Promotions, ads, public relations, personal selling, and printed publications such as brochures, catalogues, and flyers are usually the most effective strategies.
It would help if you described your sales plan once you’ve established a detailed selling strategy. This section discusses how you plan to market your items.
Two key components should be used in the overall sales strategy:
- A roadmap for a sales team. Do you want to utilize internal or outside sales agents if you have a sales force? How many salespeople are you planning to hire on the sales team? What kind of recruiting tactics would you employ? How are you going to train the sales team? What is the salespeople’s remuneration?
- The promotional efforts. It is essential to break down the sales plan into practices while developing it. You must, for example, define the opportunities. When you’ve compiled a collection of candidates, you’ll need to prioritize them, choosing the leads with the best chance of being customers first. Next, figure out how many sales calls you’ll create in a certain amount of time. Then you’ll need to find out how many deals calls you’ll need to make each delivery, how much revenue you’ll make per sale, and how much money you’ll make per seller.
Communication Strategy
- Online strategy (from the text)
- Calculating Return on Investment (ROI) from a website
- Talk about how you’ll make sure the promotion and selling strategies are legal.
Financial Projections
Profit & Loss
| Year 1 | Year 2 | Year 3 | |
| Sales | |||
| Costs/Goods Sold | |||
| GROSS PROFIT
OPERATING EXPENSES |
|||
| Salary (Office & Overhead) | |||
| Payroll (taxes, etc.) | |||
| Outside Services | |||
| Supplies (Office & Operation) | |||
| Repairs & Maintenance | |||
| Advertising | |||
| Car, Delivery & Travel | |||
| Accounting & Legal | |||
| Rent | |||
| Telephone | |||
| Utilities | |||
| Insurance | |||
| Taxes (Real Estate, etc.) | |||
| Interest | |||
| Depreciation | |||
| Other Expenses | |||
| TOTAL EXPENSES
|
|||
| NET PROFIT BEFORE TAXES | |||
| Income Taxes | |||
NET PROFIT AFTER TAX |
|||
| Owner Draw/Dividends | |||
| ADJUSTED TO RETAINED |
Cash Flow Complete section 6.3 of your business plan outline
| Pre-Startup
EST. |
Year 1 | Year 2 | Year 3 | Total Item
EST. |
|
| Cash on Hand | |||||
| CASH RECEIPTS | |||||
| Cash Sales | |||||
| Collections from CR Accounts | |||||
| Loan/Cash Injection | |||||
| TOTAL CASH RECEIPTS | |||||
| TOTAL CASH AVAILABLE | |||||
CASH PAID OUT |
|||||
| Purchases | |||||
| Gross Wages | |||||
| Outside Services | |||||
| Supplies | |||||
| Repairs & Maintenance | |||||
| Advertising | |||||
| Car, Delivery & Travel | |||||
| Accounting & Legal | |||||
| Rent | |||||
| Telephone | |||||
| Utilities | |||||
| Insurance | |||||
| Taxes (Real Estate, etc.) | |||||
| Interest | |||||
| Other Expenses | |||||
| SUBTOTAL | |||||
| Loan Principal Payment | |||||
| Capital Purchase | |||||
| Other Startup Costs | |||||
| Reserve and/or Escrow | |||||
| Others Withdrawal | |||||
| TOTAL CASH PAID OUT | |||||
| CASH POSITION |
Balance Sheet
| Assets | Start Date: | End Date: |
CURRENT ASSETS |
||
| Cash in Bank | ||
| Accounts Receivable | ||
| Inventory | ||
| Prepaid Expenses | ||
| Other Current Assets | ||
| TOTAL CURRENT ASSETS | ||
|
|
||
| Machinery & Equipment | ||
| Furniture & Fixtures | ||
| Leaseholder Improvements | ||
| Land & Buildings | ||
| Other Fixed Assets | ||
| TOTAL FIXED ASSETS
(net of depreciation) |
||
|
|
||
| Intangibles | ||
| Deposits | ||
| Other | ||
| TOTAL OTHER ASSETS | ||
| TOTAL ASSETS |
| Liabilities & Equity | ||
| CURRENT LIABILITIES | ||
| Accounts Payable | ||
| Interest Payable | ||
| Taxes Payable | ||
| Notes, Short Term (due in 12 months) | ||
| Current Part, Long-Term Debt | ||
| TOTAL CURRENT LIABILITIES | ||
|
|
||
| Bank Loans Payable | ||
| Notes Payable to Stockholders | ||
| LESS: Short-Term Portion | ||
| Other Long-Term Debt | ||
| TOTAL LONG-TERM DEBT | ||
| TOTAL LIABILITIES | ||
|
OWNER’S EQUITY |
||
| Invested Capital | ||
| Retained Earnings | ||
| TOTAL OWNERS EQUITY | ||
|
|
||
| TOTAL LIABILITIES & EQUITY Customers |
Break-Even Analysis
| DIRECT COSTS | Fixed Costs ($) | Variable Costs (%) |
| Cost of Goods Sold | ||
| Inventory | ||
| Raw Materials | ||
| Direct Labor | ||
| INDIRECT COSTS | ||
| Salaries | ||
| Supplies | ||
| Repairs & Maintenance | ||
| Advertising | ||
| Car, Delivery & Travel | ||
| Rent | ||
| Telephone | ||
| Utilities | ||
| Insurance | ||
| Taxes | ||
| Interest | ||
| Depreciation | ||
| Other Costs | ||
| Total Fixed Costs | ||
| Total Variable Costs | ||
| BREAK-EVEN SALES LEVEL: |
Financial Assumptions
- Assumptions for Profit and Loss Projections
- Assumptions for Cash Flow Analysis
- Assumptions for Balance Sheet
- Assumptions for Break-Even Analysis