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Expanding One Store Operation To Two Store Operation Essay

Introduction and brief description of the venture Introduction

This business plan delineates a propositioned venture to undertake the expansion of Buster’s from a one-store business operation to a two-store business operation.

Description of the business

Buster’s is a small retailing business situated in the lobby of a large office building that involves the selling of mixed bag items. The products offered by the business includes items necessitated by occupants of the large office building, comprising of snacks, greeting cards, pre-wrapped sandwiches, canned beverages, newspapers, paperback books in addition to small gift items. The store occupies 1,000 square feet of space and its operations run from Monday to Saturday specifically targeting all of the individual walking through the lobby of the office building. At the present moment, Buster’s are the sole retail store providing product items necessitated by individuals on an everyday basis during business hours.

Business Aspirations

The key aspiration of Buster’s is to expand its business operations and have two functioning stores. A new office building is expected to be opening approximately two blocks away from the building presently occupied by the business. Buster’s aspires to expand its business operations to that building. What is more, the long-term objective of the business is to establish a chain of similar retail stores in major buildings situated downtown.

Organization of the business and key Players

Owner

The business has been started and supervised by the owner of the company who has worked as a sole proprietor. The owner has hired two individuals who aid in the everyday undertaking of the business operation.

Company Structure

The capital structure delineates the manner in which a business finances its general operations as well as growth and expansion by utilizing different sources of funds. At the present moment, the business has been fully financed using the personal finances of the owner. In the expansion of the business, the approach taken for financing such growth will be by having funds from friends and family, who will eventually assume an equity role in the business as investors. In total, the friends are family will invest $175,000, which will be converted into 30 percent equity stake of Buster’s.

Management Team

Presently, Buster’s operations are managed by the owner, who supervises the undertakings of the two employees. However, the long-term objective of the business is to expand its business operations into several stores that become a franchise. Taking this into consideration, it is suggested that every retail store will have a store manager who will be liable for facilitating the day to day operations, setting financial projections for the store, obtaining competitive contracts with suppliers and guaranteeing continued profitability of the business.

Employees

Presently, the store has two employees, each of whom spends 30 hours on a weekly basis at the retail store. By expanding and opening a second retail store on the new office building, it is expected that there will be an additional two employees hired for the new store. However, based on the business aspirations of Buster’s and the business projections, it is expected that each store will hire an additional employee to deal with the significantly high demand from the consumers. This is especially during rush hours such as in the morning when several individuals want beverages and newspapers as well as lunch hours to satisfy the high demand of consumers that wish to grab pre-wrapped sandwiches, beverages and other snacks.

Contractors

Financials

Operating Costs

The following are the anticipated expenses of operating the business in a typical month, which amount to the anticipated operating costs of the new business.

Expense $

Payroll 6,000

Marketing / promotion 500

Depreciation 0

Rent 2,200

Utilities 1,000

Other expenses 50

Total monthly expenses 9,750

Investment requirements

The initial funding from investors will make it possible for Buster’s to expand its business operations to a second store and purchase initial inventory. With extensive marketing and outreach to consumers who work within the building and also the individuals that go through the building, we expect to surpass the break-even point at the outset of the second year of this business plan. Buster’s plans to maintain costs to a minimum in that three full-time employees will be charged with running the shop and overseeing the operations.

START-UP FUNDING

Start-up Expenses to Fund

$75,000

Start-up Assets to Fund

$100,000

TOTAL FUNDING REQUIRED

$175,000

Revenue

The key pointers of financial accomplishment are all positive in our plan: increasing revenue, increasing control over cost of sales, and increasing profit margins

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year Total

Revenue Beverages

14,000

14,500

15,600

17,900

62,000

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It is expected that the business will start paying out dividends in the second year of operation.
Marketing / Sales

Summary of marketing/sales strategy

The sales strategy of the company is to retail five different product groups. These comprise of beverages, snacks, newspapers, sandwiches, stationary, and other items such as chargers. It includes increasing awareness in the marketplace of the products retailed by Buster’s through increased marketing initiatives. Buster’s also plans to exceed its quota simply by selling a greater number of product items in the second store as compared to the initial store.

Marketing/ Sales requirements for the business

Price of goods/services

Price encompasses the actual amount that is anticipated to be paid by the consumer for a product or service. Buster’s uses value-based pricing. This is where the determination of the price rendered to the consumers is done on the basis of the consumers’ perception of value that is provided by such products and services in relation to what is being offered by the rivals in the market. This is to ensure that the target market are not impelled to go to Starbucks or other coffee shops to get beverages and not impelled to visit food trucks to get sandwiches and snacks. Furthermore, the prices set by the business make it possible to generate a return on the investment made (Dogra, 2010).

Product

Product takes into account anything that can be offered to the end user to satisfy a need or want. This encompasses both tangible goods as well as intangible services and involves a decision regarding the number of alternatives, sizes, packaging, color, logo, as well as brand name. Buster’s has a wide range of product offering for consumers including snacks, pre-wrapped sandwiches, bottled/canned beverages, greeting cards, newspapers, paperback books, and small gift items that the building’s tenants might find attractive. Product positioning is another key aspect that is taken into consideration by Buster’s. Specifically, the business positions its products in a manner that facilitates every product group to retail better. In particular, each group of products is positioned in a way that facilitates a visual point of sale and highlights the products being sold and communicates extra information to the consumer. This ensures maximum sales for the business because consumers can easily perceive the products being retailed and cannot overlook the shop to go to other outlets.

Promotion

Promotion refers to all of the actions undertaken to make the product or service renowned and preferred amongst the users. Buster’s employs different forms of promotion to facilitate the success of its business operations. One of the promotional approaches used by the business is sales promotion. This refers to increasing the value rendered by the product or services by offering an additional incentive to buy a product. For instance, Buster’s offers consumers a packaged offer of sandwiches and beverages that are considerably cheaper than the individual products. In addition, this includes in-store demonstrations and displays. In addition, the business offers price incentives such as buy-two-get-one-free as sales promotion methods. Secondly, Buster’s employs direct selling which is a kind of advertising directly aimed at target consumers. In this case, the business targets individuals within their offices in the building such as clipping coupons and incentivizing them to visit the store. Furthermore, there is personal…

Sources used in this document:

References

Dogra, B. (2010). Rural marketing. Tata McGraw-Hill Education.

Fields, R. (2018). Legal Issues to Consider When Starting Your Business. All Law. Retrieved 9 September, 2018 from: http://www.alllaw.com/articles/legal/article15.asp

Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Kitanneh, F. (2016). 6 Growth Challenges Your Business Will Face (And How to Overcome Them). Inc. Retrieved 9 September, 2018 from: https://www.inc.com/firas-kittaneh/6-growth-challenges-your-business-will-face-and-how-to-overcome-them.html


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