Business Name: Buster’s
P.O. Box 00011
Telephone: (555) 555 112
Fax: (555) 626 636
Introduction and brief description of the venture
This business plan describes a proposed venture to expand Buster’s from a one-store to a two-store operation. Starting a business is not simple and opening a new branch of an already existing is equally not easy. The intention of this business plan is to evaluate the current business operations of Buster’s and then map out proper plans for expansion while matching the operations of the current store with those of the new store.
One of Buster’s main goals is to raise the necessary start-up capital possibly through bank loans, loans from friends and family and equity injections emanating from family and relatives who would have an interest in being investors in Buster’s. The business plan is also targeted at those who see the potential of the store in this industry and would like to do business with it in the near future. The plan also seeks to provide the necessary information on Buster’s current operations and the future expansion operations to those with whom the store wishes to do business now and later.
Buster’s is a small store located in the lobby of a large office building. It covers about 1000 square feet of space with its products displayed on shelves and glass cupboards. The durable products like soft drinks and food items are refrigerated. The store’s main product line include snacks, pre-wrapped sandwiches, bottled and canned beverages, greeting cards, newspapers and magazines, paperback books, and small gift items that the tenants of the building find attractive.
The main aim of the business is to provide convenience to those working in the offices occupying the building by selling a number of fast moving consumer goods. There are a number of FMCG products that clients do not necessarily need to go to the big stores and supermarkets to buy. Buster’s has set out to bring these goods closer to clients right at the doorstep so that they can conveniently manage their time without having to leave the comfort of the office buildings. The business’s list of clientele includes those who work in this office block and the nearby office blocks. One of the objectives of Buster’s is to ensure that the needs of these clients are met in the most satisfactory ways. This is fully achieved, not just by selling products but also providing the desirable customer service to clients. Buster’s also has to ensure that the products sold remain of high quality. As such, suppliers have to also be prevailed upon to bring in high quality products, whether they are in the form of edible goods or non-consumable products.
Ultimately, we hope to expand Buster’s so that it changes from a one-store operation to between 10 and 15 stores within office buildings in the downtown area. Apart from the store chain, Buster’s also hopes to increase its product line as it ventures into opening up new stores in new locations.
The most immediate aim is to open up another store in a new office building coming up two blocks away from the location of the current store. There are plans to hold talks with the property agent of this office block to discuss the setup of the business in their premises, the rental fees and any other legal and financial requirements that may be needed. Since Buster’s new store is a start-up venture, every cost should be manageable. Therefore, the rental fees should be affordable, but the space within the lobby spacious enough to allow room for expansion of products and accommodate the growing number of Buster’s clientele.
Organization of the business and key players
The owner and principal manager of Buster’s is Robbie Keane. The current store employs two people who dedicate up to 30 hours a week in the business. Once the new Buster’s store is open and operational, one of the employees in the current store will be prompted to go and manage the new store. At the same time, three new employees will be hired. One of them will take up the position left open by the promoted employee. The other two new employees will go to make up part of the personnel in the new store.
Since it is still part of the original Buster’s, the new store will still be fully owned by Robbie Keane who has up to fifteen years’ experience in retail business. Mr. Keane rose through the ranks from a supermarket attendant, to retail store supervisor before getting into managerial positions. He managed a number of mid-level and top-level retail stores around the country before deciding to venture out on his own. Though Buster’s is a much smaller business venture compared to the large stores that Mr. Keane was in charge of, he is still highly determined to make the small store a success story and open many branches around the downtown area, and probably in other areas in the long term.
The current employs also have a few years of experience in retail. They took up the offer of employment from Mr. Keane because of the challenge it offered. They are determined to try and make Buster’s expanding and highly successful. They see the potential that the business has and want to be part of that future expansion and success.
The business also employs the services of a number of suppliers and vendors from whom Buster’s gets its supplies. Due to the business relations that have already been created between the first store and the suppliers, these same suppliers will be used to provide inventory products to the new store. If there is any expansion of the product line, new suppliers will be set to cover the gap that is created by the new product line that is not supplied by the current suppliers.
The anticipated expenses of operating the new business in a typical month will be a percentage of the profits from the current store for a start. Later, when the new store gets profitable, the operating costs will be taken from its own operating capital.
The expected investment requirements will be limited to the amounts that can be easily managed. Aside from the monthly rental rates, the inventory purchases of products and meeting the payroll during the first few months of the start of the new store, the other expenditures will be limited to strict necessity until the store can realize full profitability, preferably during the first six months.
Not much revenue is expected in the first three months after the beginning of operations of the new store due to the operating costs that will virtually dig into the starting capital. Gain in revenue can possibly be noted from the fourth month where little profits can be realized, but not to the level of arbitrary expenditure or expansion. The operations of the new store will still have to be limited to the operating capital as the business tries to accumulate as much profit as possible.
The payback point will be from the profits realized from the net cash flow after deducting the expenditure from the profits realized. The payback point plan is only possible after three months of operations once the store picks up business and starts realizing some form of profit. Otherwise, no paybacks can be made before if the business is still running on negative accounts.
The anticipated return on investment in the new venture from the perspective of three years looks positive and may be in double digits than those realized during the opening of the first store. This is occasioned by the fact that the business waters had already been tested from the establishment of the first store. The first store also has an established customer base that can be referred to the new store whenever the need arises. As long as the two stores share the same name, the loyal clients of the first store will always find it easy to purchase products from the second store despite the fact that it is new.
Marketing & Sales Strategy
Before conducting any marketing or sales strategy, it is first important to undertake a marketing research. Marketing research is normally done due to a number of reasons. First, this is done to ensure that the business is on the right track by looking at the customer base and comparing it to the other competing stores that sell the same products in the nearby client base. Conducting a marketing research is also an opportunity to uncover data that are related to the operations of the business and also to question any undesirable marketing efforts that are being employed by the business but may not really translate to profitability.
Therefore, Buster’s will try to employ a number of ways in its marketing and sales efforts to attract new customers, retain the old ones and also earn their undying loyalty. In the initial stages after the opening of the new store, it is natural that there should be some level of aggressiveness in trying to popularize the store and getting it known. It is important to use those advertising techniques that will reach the immediate customers first. For a small store like Buster’s, the immediate clientele will be those people working within the office building and neighboring office buildings. Hence, the use of posters and flyers to market, advertise and make sales can greatly suffice. Advertising can be an expensive engagement, and since Buster’s is a small start-up operation, the advertising costs have to be as minimal as possible.
Later during the progress of the new venture, the business can also create an advertisement for the Internet and especially for forums like the social media engines including Facebook and Twitter. Another important platform in the Internet is the e-marketing sites. Being a small venture also means the advertisements cannot be overambitious, and the tone has to be kept at a manageable level. The use of the word of mouth will be an important way of getting the store known by new and potential clients.
The marketing and sales requirements for the business include making information available on where the store is located, the kinds of products being sold and prices of the products. Other information that should be made available for marketing purposes is any discounts available on these products, the sort of promotions being carried out by the store and if there are any customer loyalty discounts.
A marketing and sales strategy will also put into account the competition. This looks at the other stores that offer the same products and services, especially in the vicinity of the new store. To be put into account is also prices of their products, any promotions they may be carrying out, and if there are any special incentives they offer to their clients like special discounts or credit facilities.
The store is located in the lobby of a large office building just like the first store. However, it will cover considerably more space than the first store in a bid to meet some level of expansion. The store will be open weekdays from 8a.m., when the office building is open, to 5p.m.; when the building is closed. The store will remain closed over the weekend.
The store will use different supplies to get its variety of products. These items will be bought wholesale, and their payments made at the end of every month or as agreed with the suppliers. There are no special operations issues to be considered. Security, which would have been, and area of concern is already provided for by the management of the building.
Legal and Sundry Issues
Once all the business operation license fees have been paid, and insurance cover sort, any other legal issues can be looked at during a later time as they arise. A landlord-tenant contract will be signed between the business and management of the building so that the agreement can be legal and binding. Any future structuring of the business will be accordingly planned and all the strategies designed in a business plan of a similar nature. The business will also seek the services of a lawyer in case any legal issues arise regarding the products sold by Buster’s or inconsistency with one of the suppliers, or if any issues arise with the management of the building hosting the store. Since, at the beginning, the business may not be able to hire the services of a permanent business lawyer, the use of outside legal services will be sorted when the need arises.
Like any other new business venture in any industry, Buster’s is sure to face various challenges when trying to put its footprint into the business it has set out to venture into. One of these challenges is high capital costs to open the new store. Since the new store is being started from scratch, the business requires starting capital to take care of the different financial obligations that accompany the launching of a new business. Another challenge is the competition from other stores; which may be based in the same building or different nearby office buildings but carry out the same business. They may offer stiff competition especially if they have been in the business for a while and have acquired a considerable customer base.
Other challenges that may be faced by Buster’s are also high marketing costs. These are normally a hindrance to any small start-up business. Not much money can be set aside for marketing efforts because every single cent is required for the more major acquisitions that are going into business. At the same time, building of a customer base for the new store may take time as would be for any new business. This is the function of marketing, but if only a little amount of finances can be set aside for this course, then the building of a trusting customer base can also take quite a bit of time. Nonetheless, for those who get to use the store, the customer service provided can be a way of marketing the business. Good service means even the new customers will want to come back.
The competence of the new employees that will be hired to work in the new store could also be another challenge. If the team of employees is not dedicated and committed, especially during those first few months of the beginning of operations, success and profitability may not be easily realized. Also, the taxes imposed on the business, tax returns and tariff barriers could pose a challenge to the start of a small store like Buster’s because funds have to be gathered to pay for all these aspects of the business.
Another main challenge the store is likely to face in the future is the lack of enough space inside the store to display the ever increasing array of new products. The space the store will occupy does not necessarily project room for future expansion. However, initial operational funds are not enough for the store to occupy bigger space. This will be looked into as future long term plans.