Business Plan
Arnold Adolph - Benita McNeill
Lois Miller - Manuel Cavallin
Confidential Document
February 13, 2008
Agenda
•
•
•
•
•
•
•
Business Overview
Key Objectives
Operations
Human Resources
Marketing
Finances
Conclusion
2
Business Overview
• Incorporation – sole shareholder
• Hybrid grocery-convenience store
• Value added deli products
• Key success factors:
• Sales quantity
• Selling price
• Purchase price
3
Mission Statement
• Derocher’s Market will strive to
provide superior customer service
and the highest quality
groceries/convenience products
at an affordable price, while
operating as a profit and growth
oriented business.
Claude Derocher
4
Strategic Objectives
•
•
•
•
•
Establish an image and name
Capture increasing market share
Provide diverse product line
Offer value and convenience
ROE of 20%
5
Location & Hours
• Monday – Friday 7 am to 10 pm (16h)
• Saturday 8 am to 9 pm (14h)
6
Floor Plan
7
Customized
Fruit Display
Case
8
Customized
Vegetable
Displayer
9
Dairy
Displayer
Case
10
Coffee & Slush
Machine
11
Double Glass
Deli Showcase
12
Walk-In Cold
Room
&
Storage
Shelves
13
Walk-In
Refrigerator
14
H R – Organizational Structure
Manager
Claude Derocher
Assistant
Manager
Part-time (5)
Full-time (1)
15
Average
Business Day
2 shifts of 3 people
Assistant M.
Prep. dely and
bread - Register
and float
Part Time 2
Part Time 3
Floating Parper workReceiving
material
Thursday
Part Time 1
Register and
around area
Full Time 1
Serve behind
counter
Manager
Prep. dely and
bread - Serve
behind counter
Hours
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Floating Receiving
material Paper work
Time
6:00 - 7:00
7:00 - 8:00
8:00 - 9:00
9:00 - 10:00
10:00 - 11:00
11:00 - 12:00
12:00 - 13:00
13:00 - 14:00
14:00 - 15:00
15:00 - 16:00
16:00 - 17:00
17:00 - 18:00
18:00 - 19:00
19:00 - 20:00
20:00 - 21:00
21:00 - 22:00
16
Marketing Strategy
• Segmentation
– Target market
• Who we are selling to
– Contribution
• What we are selling
– (value and convenience)
– Distinction
• Our unique selling proposition
Marketing Mix
 Product
 Product mix
 Quality (value) and convenience
 Price
 Cost based profit margin
 Place
 Laurentian neighborhood
 Promotion
 Posters
 Flyers
 Street signage
Competition
• Competition
– Direct
• Convenience store in area
– Indirect
• Grocery stores
Marketing Plan
• Networking
• Direct marketing
• Advertising
Marketing Budget
Marketing Expenses
Fliers/Signage
Posters
Total Marketing Expense
2008
2009
2010
2011
2012
Input
12,000
Input 500
12,500
13,530
513
14,043
15,255
525
15,780
17,200
538
17,739
19,393
552
19,945
Marketing Goals
• Quantifiable
– Increase sales
– Track sales
– Increase customer satisfaction
–Survey customers
Capital Requirements
Debt $ 25,000.00
Equity $ 75,000.00
23
Loan Amortization
Amount: $ 25,000.00
Interest Rate: 8.3 %
Term: 5 years
24
Projected Income Statement
2008
Targeted Sale
2009
2010
80%
90%
1,290,960
1,488,638
1,695,394
Cost of Goods Sold
911,547
1,075,247
1,218,302
Gross Margin
379,413
413,391
477,092
Operating Costs
401,574
394,515
405,319
Net Income
- 22,161
18,876
71,773
Revenue:
100%
25
Projected Balance Sheet
2008
2009
2010
2011
Assets:
107,531 120,512 170,997 220,793
Liabilities:
54,692
48,797
Owner’s Equity:
52,839
71,715 126,352 180,691
44,644
40,102
26
Risk Analysis
Total Revenue
200.0%
IRR -10%
IRR 24.6%
IRR 175%
150.0%
IRR
100.0%
50.0%
0.0%
1
Worst Case
Base Case
Best Case
-50.0%
27
Dividend Policy
Based on cash minus working capital
increased by a factor of 1.15 to allow for
unexpected expenses. Any positive value
from this calculation will be paid out to
equity investors
28
Break-Even Analysis
Based on annual sales is as follows
2008
2009
2010
2011
2012
1,305,634.00
1,462,087.00
1,615,754.00
1,657,244.00
1,708,156.00
29
Financials
• IRR: 24.6 %
• ERR: 23.6%
• NPV: $ 82,196.00
30
Key Ratio Analysis
2008
2009
2010
2011
Current Ratio
-.31
.67
2.69
4.32
Debt Ratio
50.9
40.5
26.1
18.2
Debt to Equity
103.5
68
35.3
22.2
Return on Equity
-41.9
26.3
43.2
30.1
31
Conclusion
• Opportunity
– Quebec consumers
• Customers & Value Proposition
– Value-added deli products
• Competitive Advantage
– Location
• Human Resources
• Critical Variables
– Prices, quantity
• Financials
– ROI: 23.3%
32
Questions
Thanks for Shopping
Happy
Birthday
Arnold
33