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