With the merger of Kadmus, Homer & Company and Delphi/Ouroboros, Building Blocks is a cooperative comprised of members who are entrepreneur-retailers. Building Blocks is committed to empowering the independent retailer by setting industry and market standards with their niche businesses and unique brand of creative marketing, wide product assortment, award winning merchandising and technology, and quality training and business expertise. Building Blocks’ buying power of more than $2.5 billion annually helps pass on benefits to independent members.
Building Blocks has been a world leader in the hardware industry in product selection and customer service for do-it-yourselfers since 1948.
Vision To be the best-in-class provider of products and solution choices that drive our members’ and our co-op’s profitability. Mission To provide: Choices of retail and commercial solutions to drive members’ sales and profits Assortments to support the solutions Operational excellence in the delivery of products and solutions
Building Blocks has a wealth of experience and know-how on opening new hardware stores, with 6,567 stores worldwide. Building Blocks has become a leader in determining what factors make a hardware retailer successful.
Building Blocks currently uses a service called Yorikle. This service is used to define the demographics and the expenditure potential of new markets. For Hisarlik Hardware , the report was run on a one-, two-, and three-mile radius around the proposed location. The report showed an exceptional amount of business (only reporting households, the study does not include property managers, businesses, or commuters), especially considering that there is no direct competition in the area. The reports also get very specific as far as what the potential market is for hardware overall as well as specific categories within a store. There are also numbers reports for the expected growth in the area over the next five years.
Building Blocks supplies professional design services to maximize merchandisable space and traffic flow. Services include fixture plans, interior signage and decor, merchandising plans, lighting, basic site plans, and exterior storefront elevations. These plans are custom developed for each location and each store’s footprint. The associated costs are included in the start-up costs.
A unique plan will be done for the proposed site for Hisarlik Hardware . This process will begin as soon as the lease for the property is signed.
Building Blocks provides a variety of support to all current members as well as prospects seeking to join the co-op. The support comes to members in the form of retail consultants, knowledge, profit building programs, retail automation, training, advertising & promotion, a national brand, buying power, semi-annual markets, and an operations and distribution network.
Retail Consultant
Every member and prospect is assigned a retail consultant who works with them on an ongoing basis. There is also a retail operations specialist who helps prospects open new stores. There are regional marketing staff that are available as well as individual Building Blocks staff for individual marketing programs.
All specialists share their wealth of personal knowledge as well as having access to Building Blocks’ cumulative knowledge and experience. Building Blocks has made this model work since 1948. It works very well and enables members to be very successful business people and has made Building Blocks the largest retail hardware co-operative in North America.
Proven Profit Building
Building Blocks makes available a large number of programs that entrepreneurs can choose to participate in. They include retail pricing systems, electronic order entry systems, commercial and industrial sales, category specific planograms, and direct mail circulars, just to name a few.
Building Blocks leads the industry in automating their stores. Building Blocks has brought their stores into the future with the automation which is made available to members. This is a strength of Building Blocks and a service that is available to all of their members. This automation helps the members in many different ways including inventory control, ordering, sales, and accounts receivable, all tied together in one system called Delian .
Experienced technical support personnel work with members to ensure current retail automation capabilities are compatible with Building Blocks’ existing system. Building Blocks’ existing system is Delian, an industry leading software program based on Triad Eagle for Windows platform. Delian is an easy-to-use, easy-to-learn tool that contains up-to-the-minute ordering and inventory accuracy, point of sale, accounts receivable, and much more. It contains all the daily business tools needed to manage Hisarlik Hardware .
There are five core programs for new store owners which make up the initial training. They are:
When a member opens a The Tool Room Rentals business there is also required training that applies only to The Tool Room Rentals . There is also a wide range of do-it-yourself programs that are on CD-ROM and video.
Building Blocks’ marketing programs are second to none in the industry. They include every tool needed to be successful in the retail hardware business. They include Power Events, interior and exterior signage, online programs, and custom circulars.
Every member store is assigned a field marketing manager. The marketing manager makes the members aware of the marketing tools available and how best to use them.
There are marketing strategy programs, programs that increase traffic, increase transactions, and those that merely build the brand. All are made available, and it is the savvy member who uses the right programs and spend their advertising dollars best. Based on the marketing experience Hisarlik Hardware has, this is a strength most start-up businesses do not possess.
For over 40 years, the name Building Blocks has stood for trust, service and fair prices. Building Blocks’ brand positioning statement is “ Building Blocks is the best place to get just what you need to complete home repair and maintenance projects quickly and easily.” It is a name with heritage and integrity. Consistent national media and the fact that Building Blocks is the largest co-op of independent hardware store owners, has established Building Blocks as a recognizable name in retail hardware.
The bottom line is people know that the Building Blocks name means hardware. That is an asset new businesses work for years to establish.
An independent hardware store cannot compete in the current market, without a co-op behind them. A Building Blocks member has the benefit of $2.5 billion in buying power which is passed on in savings and profits. That makes Building Blocks the largest co-op of its kind in North America.
This is the main factor in making sure all Building Blocks members are getting products at the best possible prices to enable them to maximize profits.
Building Blocks holds semi-annual markets where members can buy products and plan purchases for the upcoming seasons. Markets are held in March (Fall/Winter) and October (Spring/Summer). Members are informed of new items and trends in the industry at these markets enabling them to make good purchasing decisions. There are also programs which allow members to make purchasing commitments at large cash savings.
Building Blocks has established a network of strategically placed distribution centers throughout the United States to assure timely deliveries regardless of where the store is located. Trucks deliver at least once per week and twice if necessary. This is a huge benefit, because this process allows excess inventory to sit in the distribution center as opposed to the store shelves. Over 64,000 items can be purchased on a per piece basis enabling stores to get whatever quantity is needed at any time.
Troy Enterprises, Inc. is a privately-held S corporation, currently 100% owned by its founder and president, Hector Priamson and his wife Andromache Eetion. The company will be operating under the name of Hisarlik Hardware. There are expected to be investors in the new venture. Individual investors will own no more than 15% of Troy Enterprises, Inc. These investors will provide investment in the way of seed cash to help start the business and none of the investors will be active participants in any management decisions.
Troy Enterprises, Inc. founder and president is Hector Priamson. Hector is a resident of Ilion. He is married to Andromache Eetion who is currently a realtor with Ahhiyawa, Hatti & Company.
Hector will spend 100% of his time on this new start-up venture. Hector has a wealth of experience in business. He started his career straight out of college with a very exclusive “Big Eight” Accounting firm. While with Manapa Tarhunda and Co. Hector earned his CPA license. His interests led him to Wilusa, where he became involved in one of the city’s unique industries, Samothracing. He started on the accounting side of the racing business and soon broke out into the part of the business that generates the revenue, sponsorship sales.
His career led him to Trireme Racing Group where he served as the Vice President of Business Operations. He led the turn-around of this team and company solidifying major sponsorships with companies like Corinthian Leather, Medusa-Gorgon Oars, and Posidon Libations. He served in that position from 1996 through 2001. During that period of time, Hector also served on the CURRAGH Franchise Board (rules making board of the sanctioning body). His reputation and success led him to the top marketing position, Vice President of Sales and Marketing. Hector served in that capacity from December of 2001 through July of 2003, at which time he left the company to pursue his current business, Troy Enterprises, Inc.
Hector’s expertise in the entrepreneurial business of oarsports will be invaluable in his new venture. He has a keen sense of finance, marketing, management of inventory, accounting and bookkeeping practices, and staff management. This experience will be invaluable in leading Troy Enterprises and making sound business decisions in the future.
Hector’s resume, as Confidential and Proprietary information, has been omitted from this sample business plan.
When Hisarlik Hardware began this project the key component was the location. Hector Priamson/Troy Enterprises and Building Blocks felt several criteria were crucial to making this venture a success. The ideal size was determined to be between 7,500 and 10,000 sq.ft. The price per square foot was important because the economics obviously had to work. Adequate parking and easy access were must-have criteria while searching for locations. A location with only street parking was not considered an alternative. Being located on a major thoroughfare with visibility is important to get the store recognized as a solution for hardware. Adequate signage that traffic can recognize is key. Additionally, intangibles such as other commercial neighbors and the neighborhood makeup were considered.
Based on these criteria, a site at 310 East Anglia Street is was selected. It is part of the Troas Marketplace.
This property shares a parking lot with Scamander’s Food Market and Buckbasket Cleaners which is the most important of the intangible factors. This Scamander’s generates $12.0 million in revenue and is Scamander’s most successful store in Wilusa. Scamander’s is the only grocery store in the downtown area, and is an icon in the downtown residential community. In discussions with Scamander’s, they said the Troas store has much more traffic than their other locations. They have found the average customer visits the Troas store every two days versus once a week for the others. Hisarlik feels this is a huge advantage for its venture as this will drive more traffic, more often to the Troas parking lot. Scamander’s is in the middle of its lease for this property and seems pleased with the results. Hisarlik does not anticipate this advantage changing by a move by Scamander’s, whose lease extends through the year five.
The proposed site has plenty of parking spots and excellent access from eastbound Anglia Street and northbound Mercia Blvd.
Signage marquees sit on both streets as well as on the north, west, and south sides of 310 East Anglia Street. Furthermore, the location is perfectly set on eastbound Anglia Street, which is one of the major thoroughfares. There is a driveway entrance and exit to Anglia Street.
The proposed site is ideal in size measuring 9,509 sq. ft. and was formerly an Osco Drug store that was closed as Osco downsized their Wilusa operations. According to the landlord, the closing of this location by Osco had nothing to do with the location, but rather, a change in priority within the company. The property needs very little in tenant improvements in order to be open for business. The terms of the lease are currently being negotiated. It is anticipated that Hisarlik Hardware will retain the property within the budgeted guidelines. There were many properties that were investigated; however, for the stated reasons this is the best option as of last November.
The neighborhood has gone through major renovation over the past 10 years. It is now a rejuvenated upscale neighborhood. There is also major new development around the proposed site. There is a brand new condominium development directly across East Anglia Street. The development is called Lemnos Square.
There are three other new condominium developments under construction that are one block away. They are Troas Terrace, The Anatolia, and The Konya.
The proposed location is one block from the successful Wessex Avenue District. Wilusa has done a fantastic job in bringing in new business and culture into this area of downtown.
According to Wilusa Downtown Inc., Downtown has seen record demand and occupancy levels, driving the surge of residential development. This has led to more than 615 new residential units currently in the pipeline.
The city of Wilusa is also reviewing plans for the former Cressida Agora site. The plans all include a large number of residential and retail sites on the 29 acre site. This site is located 2 blocks south of the proposed location.
Development downtown is happening in many different ways. There is commercial, residential, as well as government development currently in process or planned. All of these things add to the desirable nature of the proposed site. We would be “right in the middle of it.”
Hisarlik Hardware will offer traditional retail hardware. These products include electrical supplies, automotive, hardware, housewares, lawn and garden, building supplies, paint, plumbing, tools and rental. There are other small services that will be offered including key cutting, glass cutting, and other small repairs.
Hisarlik will work with Building Blocks to develop the right product mix. The initial order of inventory will take into account the fact that this is an urban store and the product mix may contain different items than a suburban store. Hisarlik Hardware will rely on Building Blocks’ expertise, knowledge, and their IAIS inventory management program in developing this initial order.
Hisarlik Hardware will stock traditional retail hardware items. The product mix will be changed slightly from suburban stores. The history of the store will then be used along with IAIS to develop the right product mix that takes advantage of the available square footage and maximizes profits.
Hisarlik Hardware will open a The Tool Room Rentals store within the hardware store. This is a program that will help cash flow as well as increase sales of rental accessories and support items.
Hisarlik will also have key cutting, glass cutting, and other small services like screen repairs.
IAIS stands for Inventory Always In Stock. This is a program that was developed by Building Blocks based on feedback from their members. The members were looking for assistance in managing their departments and knowing what is selling and what is not.
This program has the following benefits to members who take part in it:
Building Blocks delivers to member stores IAIS merchandising guides, assortment guides, and recommends what inventory to carry and what not to carry.
This is an invaluable tool for a new member because the new store can rely on the history of current stores to help in their merchandising.
Hisarlik Hardware will once again rely on Building Blocks to deliver the correct pricing for the market. As discussed earlier, low cost is not one of the main factors for customers to shop at a convenient hardware store location. Hisarlik will continue to work with Building Blocks to charge the right price to maximize profits.
Hisarlik Hardware will listen to its customers to understand what other needs are not being met. Those needs could include additional store locations in the future and an expansion of products and services offered at the current location. There may be other businesses that can be offshoots of retail hardware that help service or provide convenience to Hisarlik customers.
The Market Analysis looks at potential customers and potential business. Hisarlik Hardware explored the market segments, their needs, and did a marketing analysis.
The need for this venture was looked at first. Does downtown need a hardware store? The answer was a resounding yes.
Once the need was established, Hisarlik needed to analyze the make up of its customers, who and how many. Who is the potential customer? How many potential customers are there?
Once it was determined that there was a need and who the customer is, the next step was to figure out how to make them Hisarlik Hardware customers. How to get the potential customer in the store?
There are six major market segments:
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Downtown Residents | 0% | 450,000 | 450,000 | 450,000 | 450,000 | 450,000 | 0.00% |
Property Managers | 0% | 297,000 | 297,000 | 297,000 | 297,000 | 297,000 | 0.00% |
Contractors | 0% | 255,000 | 255,000 | 255,000 | 255,000 | 255,000 | 0.00% |
Downtown Businesses | 0% | 180,000 | 180,000 | 180,000 | 180,000 | 180,000 | 0.00% |
Suburban Commuters | 0% | 110,000 | 110,000 | 110,000 | 110,000 | 110,000 | 0.00% |
Commercial Sales | 0% | 38,930 | 38,930 | 38,930 | 38,930 | 38,930 | 0.00% |
Total | 0.00% | 1,330,930 | 1,330,930 | 1,330,930 | 1,330,930 | 1,330,930 | 0.00% |
Each market segment is unique and requires different marketing to attract them.
Downtown residents have already expressed the need for a local hardware store, as is documented in the April 2003 issue of Wilusa Magazine . Residents recognize the need and will be supportive of a retailer answering their concerns. The data that has been supplied to Hisarlik Hardware (by Yorikle, a market research firm used by Building Blocks ) shows there is a population of nearly 53,000 people and more than 20,000 households within two miles of the proposed location. The analysis provided by Yorikle states the area could support a 19,000 sq. ft. store. We are proposing a 9,500 sq. ft. store. In other words, there is enough business in this area to support a store twice the proposed size. The report has also found there is more than $2.5 million of potential sales revenue, based on the number of households alone (not including any of the other segments). The potential is expected to grow to more than $3.0 million by 2007.
Hisarlik Hardware believes the key to the need analysis is that all of the research and potential was measured by households, and households only. The households only make up one segment of the potential business the store expects to generate.
When Hector Priamson initially looked at the hardware business, one of the most important factors was the fact this industry seems to be immune to significant fluctuations in the economy. Based on information from the US Department of Commerce, the home improvement retailing industry has consistently grown at a rate of 7% for the past decade and similar growth is expected for the foreseeable future.
In the 1990’s the growth in the industry was attributable to strong home sales, economic prosperity, and significant amounts of home renovation. Since 2000, growth has stayed at the same levels even though some of these factors have changed. Growth since the year 2000 was attributable to low interest rates and refinancing. According to the Federal Reserve Board, 35% of all refinancing goes to home improvement.
What does the future hold? 93% of all Americans plan to stay in their current homes and 78% of homeowners plan to undertake home improvement projects in the next year. How much will they spend? 69% of homeowners plan to spend as much or more in the coming year than they did last year. Home improvement budgets have grown 31% since the year 2000.
Hisarlik Hardware is being encouraged by Building Blocks to enter the equipment and party rental business upon opening the store. Based on conversations with other members, the rental component has been an overwhelming success adding to cash flow of the business as well as increasing traffic to the store. Reports of success unanimously talk about the fact that “renters” need tools and accessories to go with the rental equipment adding to the overall profitability of the store.
In the downtown market, the make-up of the rental inventory will vary a bit from what a suburban store might have. Hisarlik Hardware will work with the Building Blocks Rental people to determine the inventory. Hisarlik will rely on the knowledge and expertise of Building Blocks.
An investmentm is required upon opening for the initial purchase of the equipment to rent. Building Blocks has the necessary training and computer support to make this a very logical addition to the traditional hardware store.
The “Big Boxes”, such as Lowe’s, Menard’s, and Home Depot have had a significant effect on the Home Improvement industry. According to the National Retail Hardware Association, based in Wilusa, the Big Boxes have expanded the market, increasing consumer participation in home improvement. However, the National Retail Hardware Association feels that the Big Boxes are nearing a saturation point, and in the future, they cannot open many more stores without it affecting and threatening other current Big Box locations.
“This competition has not kept independent hardware stores, home centers, and lumberyards from prospering. These stores are much more professionally operated than they were just a decade ago, and most posted strong profits last year.” —NRHA, 2004 Market Measure
Independent Hardware stores need to focus on their strengths.
Service. 88% of consumers have a favorable opinion of small business vs. 61% for big business (the lowest since 1993).
Convenience. Consumers want to get everything they need in one trip to the store. The Independent hardware stores are able to do this, because they work with their customers.
“There are four ways to compete
But price is only one of them.” —M. Chandler, a retail industry consultant
There is no immediate local competition. The nearest hardware store is 1.8 miles away on South Hasan Dag Avenue. The store is a small, 4,000 sq. ft., and isn’t current in its products or presentation.
Because of the lack of product and poor shopping presentation, residents do not consider this an option for hardware. The next closest hardware store is 2.7 miles away. There are several stores that are 3 to 4 miles from the proposed site. Studies say customers do not want to travel more than 3-7 minutes to a location. While these stores could serve the need, their location does not make them a viable option to downtown residents because of distance and neighborhoods.
The “Big Box” stores such as Lowe’s, Home Depot, and Menard’s are built to serve suburban Wilusa. The closest Lowe’s is 12.5 miles and 17 minutes west of Hisarlik Hardware’s proposed location. The nearest Home Depot is 10.5 miles or 16 minutes west of Hisarlik . Menard’s is 9.3 miles and 14 minutes east of the location. There are no stores that are convenient to the downtown market. To get to any of these, customers must plan on spending 30-40 minutes of driving roundtrip at a minimum before even walking into the store. Hisarlik Hardware will be a 2-3 mile drive or 5-10 minutes maximum travel to the store. This convenience will be a major selling point for the business.
From discussions between Hisarlik Hardware and the parent company of Building Blocks , regarding the possibility of a “Big Box” store opening in the downtown area, it seems unlikely due to the size of the potential market, cost, and lack of real estate, to build such a structure in Arazawa Township.
An analysis of competitors in the equipment and party rental field is similar to that of the hardware industry. There is one competitor that is southeast of downtown, 1.5 miles from the proposed location. The company, Best Rentals, Inc., handles equipment and party rentals.
Tent rental has one competitor that is downtown. An factor in tent rental may be the clean new equipment and, once again, great service available from Hisarlik . American Tent and Awning is located 1.8 miles from the proposed location. One advantage for Hisarlik in tent/party rental is that a customer can cover more bases with the variety of equipment and supplies from a rental and hardware store versus a company that focuses solely on tent rental.
The closest tool rental company is 2.3 miles from the proposed location. Hisarlik Hardware feels that significant progress can be made into the tool rental business because of convenience. Hisarlik expects to be a fantastic solution for contractors working downtown who need equipment for the day or for the project. Residents downtown have smaller homes and condominiums, consequently they do not have room to own bulky or large quantities of equipment. This is expected to be a benefit for the rental business.
Emphasize Customer Service
Hisarlik Hardware will build a reputation of fantastic customer service, building upon what Building Blocks stores and the Building Blocks brand have already established. We will establish our business, by offering a clear cut leader in retail hardware in downtown Wilusa.
Build a Relationship-Oriented Business
Fantastic service will lead to long term loyal relationships with our customers and clients. The goal is to have our customer base become reliant on Hisarlik to stock items and have solutions for their needs. The customers will soon understand the value of the relationship.
Focus on Target Markets
Hisarlik will focus on the market segments identified earlier in this document. Each of the market segments will have sales initiatives to focus on each group.
Differentiate and Fulfill the Promise
Hisarlik Hardware can’t just market and sell products and services, we must actually deliver as well. We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have. This service has to be consistent and deliver what the customer is looking for.
The Building Blocks Power Events are advertising programs supported by national advertising during peak buying periods for planned home care products. Power Events focus on those high traffic times of the year with a multimedia campaign. A strong mix of national television and radio advertising, circulars, Sunday supplements, and POP sign kits deliver a sense of urgency to visit the store. A small 8-page and large 12-page circular are available for each Power Event to help carry the theme and promote the sale. There are four Power Events each year.
Hisarlik Hardware will also place ads in the Yellow Pages. The Yellow Pages continue to be a source of a good number of customers.
Hisarlik Hardware will also rely on the media to help spread the word about this new business downtown. Fox Television’s local morning TV show goes on location to promote local businesses. Radio can be used in many different ways, radio remotes for the opening of the store. Wilusa Magazine has already identified an issue, a follow up story is very appropriate. The Wilusa Star covers new and significant businesses in Wilusa, Hisarlik feels this store will fit that description.
Every person is a potential customer of a hardware store. Hisarlik Hardware will carry items everyone needs. The average household spends $135 per year on items found in a hardware store according to Yorikle, a research firm retained by Building Blocks . The key to getting the potential customer to spend their $135 or more in Hisarlik Hardware are include the following attributes:
All of these attributes will be present in Hisarlik Hardware. In order to be convenient, Hisarlik will have to adapt to its environment, the location will be key to making it easy for customers to get to the store. The store must also be open when the customers arrive. In addition, a delivery service will be available to make it easier for regular customers to not have to leave what they are doing to get the products they need. There will also be accounts set up to make it easier for regular customers to get items, without having to deal with petty cash, company credit cards, or company checks for each visit to the store.
Customers expect to get great service at Building Blocks Hardware stores, which is evidenced by the fact 50% of all hardware shoppers will avoid the “Big Box” retailers and opt instead for the personal service like Hisarlik Hardware . We will also need to be reliable, which means that customers will depend on us to inventory what they need and understand and anticipate their needs. Customers want to come into a hardware store having the confidence they will find what they need. The store will possess a knowledgeable and friendly staff. The staff has to understand and interpret what the customer needs and find the product that will fit that need. Hisarlik Hardware will also be progressive, by that we mean we will continue to evolve and understand what the customer needs and develop new markets where the need exists.
Hisarlik Hardware will be offering a convenient solution which all downtown residents need. Customers will be introduced to Hisarlik through targeted advertising, direct mail, signage, and word of mouth. Hisarlik will also take advantage of all the Building Blocks programs that help create loyalty and awareness among the potential customers in the market.
The direct sales force will consist of two seasoned sales people led by Hector Priamson. The focus will be on property managers and all downtown businesses to create an awareness of the store location and the fact that the store is a potential solution for retail hardware needs.
Glaucus Sarpedon will also work on the commercial accounts and government accounts located in the downtown market.
The sales projections start in the month of March, 2004. Sales steadily increase along with the awareness of the store through September. In September, there is a small dip in sales then a steady rise through the Christmas season and December the stores best month of the year. There is a traditional slow season that runs through January and February each year. The goal of Hisarlik Hardware will be to develop programs that take as much slack out of the sales as possible and get them in line with the rest of the sales year.
Sales are estimated by Building Blocks to be $125 to $175 per square foot of the total area of the store. The Gross Margin will range from 40% to 45%. There is a 25% growth predicted for the second year of sales driven by awareness, growth in rentals and growth in commercial sales.
The immediate goal is to achieve robust sales in the first year. It is thought that double digit percentage total sales increases can be achieved and maintained throughout the five years of this business plan.
Sales Forecast | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Sales | |||||
Monthly Net Sales | $1,410,502 | $1,757,402 | $2,108,883 | $2,214,327 | $2,325,043 |
Rental | $38,930 | $50,609 | $65,792 | $85,529 | $111,188 |
Other | $27,471 | $32,965 | $39,558 | $43,514 | $47,865 |
Total Sales | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Cost of Goods Sold | $818,091 | $1,019,293 | $1,223,152 | $1,284,310 | $1,348,525 |
Other | $0 | $0 | $0 | $0 | $0 |
Subtotal Direct Cost of Sales | $818,091 | $1,019,293 | $1,223,152 | $1,284,310 | $1,348,525 |
Building Blocks has loyalty programs like Building Blocks Rewards that Hisarlik Hardware will participate in. This program has been developed to build a loyal following of customers that use the card for shopping benefits.
By the second year accounts will be set up for businesses, property managers, and contractors to make shopping easy for them. This program will allow these customers to shop and make it easy for them to pay for items on account. This program will have to be managed very carefully, and Hector Priamson’s financial background will prove to be very useful in managing these accounts.
Hisarlik Hardware has already contacted Scamander’s Food Market and have the word of the General Store Manager that they would be interested in developing programs to work together with Hisarlik for the betterment of both businesses. Both will stand to benefit from each other.
Hisarlik True Value has worked with True Value to establish a realistic time line to work within to have the store open for business in March of 2004. The time line is listed in the Milestones table below.
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Research Feasibility | 9/1/2003 | 11/15/2003 | $0 | Hector Priamson | Department |
Prepare Business Plan | 10/15/2003 | 12/1/2003 | $500 | Hector Priamson | Department |
Secure Financing | 11/15/2003 | 12/15/2003 | $0 | Hector Priamson | Department |
Finalize the Lease | 12/15/2003 | 12/15/2003 | $0 | Hector Priamson | Department |
Sign Building Blocks Member Agreement | 12/15/2003 | 1/15/2004 | $6,000 | Hector Priamson | Department |
Start Work on Interior of Proposed Site | 12/15/2003 | 2/1/2004 | $4,000 | Hector Priamson | Department |
Review Fixture Layout Plan | 12/20/2003 | 1/15/2004 | $0 | Hector Priamson | Department |
Order Exterior Signage | 12/22/2003 | 1/15/2004 | $25,000 | Hector Priamson | Department |
Order Fixtures | 12/23/2003 | 12/23/2003 | $50,000 | Hector Priamson | Department |
Begin Interviewing and Hiring Employees | 1/15/2004 | 3/1/2004 | $0 | Hector Priamson | Department |
Initial Merchandise Order is Placed | 1/5/2004 | 1/15/2004 | $0 | Hector Priamson | Department |
Leasehold Improvements Complete | 1/15/2004 | 2/1/2004 | $0 | Hector Priamson | Department |
Order Interior Signage | 1/15/2004 | 2/1/2004 | $7,500 | Hector Priamson | Department |
Fixtures Arrive | 1/25/2004 | 2/1/2004 | $0 | Hector Priamson | Department |
Merchandise Arrives | 2/5/2004 | 2/15/2004 | $0 | Hector Priamson | Department |
Merchandisers Set Up Store | 2/10/2004 | 2/25/2004 | $0 | Hector Priamson | Department |
Exterior Signage Installed | 2/10/2004 | 2/15/2004 | $0 | Hector Priamson | Department |
Run Local Advertising | 3/1/2004 | 3/15/2004 | $0 | Hector Priamson | Department |
Open Informally | 3/10/2004 | 3/14/2004 | $0 | Hector Priamson | Department |
Grand Opening | 3/14/2004 | 3/15/2004 | $0 | Hector Priamson | Department |
Totals | $93,000 |
The competitive edge has been covered throughout this document. Location is the biggest key to this business. There are no true competitors in our business in downtown Wilusa. Our future customers have had to work harder to get the same or lesser service less conveniently. We will be in their back yard and be easy to work with and have products they need.
Hisarlik Hardware have staff that understand customer service and how to treat customers so that they want to shop in the Hisarlik Hardware environment.
Obviously, we are in the age of computers and the Internet. Customers are ultimately looking for the simplest, most reliable, and least consuming way to get the goods and services they need.
Therefore, a Web strategy is important to keep up with the changing world and stay ahead of potential competition. Customers that buy on the Internet do not care where a business is located, so it is important that a name and a reputation be established that customers can rely on whether it is in the store or on the Internet.
Building Blocks has a sensational program for their members. It allows a member to establish their own website with member information and use the established product background linked to buildingblockshardware.com. Customers can then go on line and order products very easily. This is a program that a normal small business could not afford to invest in.
The Internet is also a valuable communication tool with customers. The site includes a custom home page, store location along with a map, store hours, services and selection, in-store coupons, 1,000 item in-store catalog, and as many custom pages as a member needs.
Hisarlik Hardware will be managed by Hector Priamson on a day-to-day basis. He will devote 100% of his time to this venture. There are two key employees joining Hector in this venture, Penthesilea Thracian and Glaucus Sarpedon.
Hisarlik expects that there will be up to 17 employees in total, some full time and others part time.
Hisarlik Hardware will be managed, organized, and run by Hector Priamson. The company will have three key employees, Hector, Penthesilea (Penthe) Thracian, and Glaucus (Glus) Sarpedon. These three all know each other very well, Penthe and Glus having worked for Hector in the past in the oarsports industry. They bring a unique set of skills to this venture which will prove invaluable in the future.
The company will be organized with Hector Priamson as its president. He will be responsible for all of the financial affairs, inventory management, cash management, manage the cashier staff, advertising, marketing, as well as the day-to-day contact with Building Blocks . Hector will also have relationships with attorneys and accountants to stay on top of all business matters. Additionally, he will also manage the day-to-day operation of the rental business. While this seems like a lot, these are routine tasks Hector has performed for many different companies for many years. As good as Hector is, he can’t do it all. He will rely on two former employees from his.
Penthesilea Thracian has been in the oarsports business for the better part of 30 years. She is looking for a change and Hisarlik Hardware is just what she had in mind. Penthe has managed teams, and developed and run programs from the ground up. Her experience led her to winning the 1981 Salamis 500 as the crew chief of Al Cibiades’ trireme at Dardanelles Racing. Working with large companies and manufacturers that wanted absolute accountability in their programs, Penthe was the gal that was brought in to handle it. Over the past 5 years, she has added another unique skill that will nicely complement her mechanical skills; hospitality. Penthe managed the hospitality program for Corinth Racing. That job really entailed looking after people and providing great service, a skill that will be invaluable for Hisarlik Hardware .
Glaucus Sarpedon is an extremely driven young man who graduated from Hattusili University. Glus decided he wanted to work in oarsports. When he put his mind to it, that is exactly where he ended up. He joined Dardanelles Racing where he worked in the hospitality area, also gaining the valuable service quality that will be necessary for this new role. He also had the responsibility of moving, setting up, and servicing the complete hospitality fleet. He has mechanical skills that he will bring with him as well. Glus also filled the role of Team Coordinator, this role is the “quarterback” of the organization. He was responsible for anticipating what the team was going to need, when they would need it, and how much they would need. Glus will be a huge asset to the company.
Each of these folks have departments that will be assigned to them and a staff that will help them manage the departments. They will be responsible for hiring the staff that will report directly to them. Hisarlik Hardware will also develop an incentive plan rewarding successful departments and department sales growth. The experience and trust Hector Priamson has in these two individuals will allow him to focus on managing the business.
A review of potential gaps in the experience or know-how of this venture does not show any glaring weaknesses. Hisarlik Hardware ‘s Achilles heel is the lack of actual hardware store business experience. While the three key individuals do not have that direct experience, they will draw heavily upon the instruction, training, and specialist support available from the Building Blocks co-op organization. Building Blocks is in the business of passing on their experience and knowledge to assist their members to be be successful.
The personnel plan was developed in conjunction with Building Blocks and some consulting with the folks at Konya Building Blocks Hardware in Catalhoyuk.
The plan was developed so there are at least 2 managers, 1 cashier, and 2 specialists on duty at all times. The average number of people working at any one time is between 5.5 and 7.1 on busy Saturdays. All employees will have the ability and knowledge to run the cash registers.
Hector Priamson, Penthesilea Thracian and Glaucus Sarpedon will start with base pay as laid out in the following table. The cashiers will be paid $7-$8 per hour. Full-time specialist staff will be paid between $9 and $10 per hour. Other part-time help will be paid $6 per hour.
It is felt there is a pool of retired “handy men” that can fill many of these roles. The $6 per hour employees are thought to be high school or college kids.
Employee hiring will start in January, training will begin in February and work in March.
Personnel Plan | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
President (Hector Priamson) | $55,000 | $60,000 | $65,000 | $70,000 | $75,000 |
General Manager (Penthesilea Thracian) | $40,000 | $45,000 | $50,000 | $55,000 | $55,000 |
Asst. Gen. Manager (Glaucus Serpadon) | $35,000 | $40,000 | $45,000 | $45,000 | $45,000 |
Cashiers | $27,876 | $28,852 | $29,861 | $30,907 | $31,988 |
Specialists | $90,348 | $99,383 | $109,321 | $113,147 | $117,107 |
Other | $0 | $0 | $0 | $0 | $0 |
Total People | 17 | 20 | 20 | 21 | 21 |
Total Payroll | $248,224 | $273,234 | $299,183 | $314,054 | $324,096 |
The business will need substantial start-up capital. It is expected that a good portion of that amount will be secured through SBA financing.
Sales are expected to start conservatively the first year and increase steadily through the fifth year of operations. Operating income will pay back the start-up loan over a seven year amortization.
Inventory Turnover ratios are predicted to be in excess of 4.3. The goal will be to get this ratio to exceed 5.0. To do that Hisarlik will be required to purchase smartly and drive sales.
Cash will be retained in the business to cover cash operating needs as well as future expansion of other Hisarlik Hardware locations.
It is expected that dividends will be paid to the investors annually. The amount of the dividends is estimated to be 50% of profits.
After the first year of operations, it is expected that Hector Priamson will be able to trim expenses in the business as efficiency, experience, and knowledge work together and help the business operate better. Estimates are extremely conservative in the budgeting process.
Hector Priamson will invest cash, benefits and labor to the start up.
Troy Enterprises is in the process of negotiating with potential investors for the seed cash needed to start the business. It is expected that a tidy sum will be raised to start the business. It is expected that no more than 15% interest will be given to each investor.
Bank Financing
Troy Enterprises is submitting business plans and other requested documents to financial institutions in pursuit of the additional money needed to finance the rest of the company and provide operating cash for the business. It is expected that the loan will be a part of the SBA 7(a) program. It is assumed that the terms of the loan will require repayment in 7 years, at a rate of 8%.
Start-up Funding | |
Start-up Expenses to Fund | $83,332 |
Start-up Assets to Fund | $716,668 |
Total Funding Required | $800,000 |
Assets | |
Non-cash Assets from Start-up | $620,504 |
Cash Requirements from Start-up | $96,164 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $96,164 |
Total Assets | $716,668 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $0 |
Long-term Liabilities | $625,000 |
Accounts Payable (Outstanding Bills) | $0 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $625,000 |
Capital | |
Planned Investment | |
Hector Priamson | $50,000 |
Investor 1 | $75,000 |
Investor 2 | $50,000 |
Additional Investment Requirement | $0 |
Total Planned Investment | $175,000 |
Loss at Start-up (Start-up Expenses) | ($83,332) |
Total Capital | $91,668 |
Total Capital and Liabilities | $716,668 |
Total Funding | $800,000 |
The table below presents the assumptions used in the financial calculations of this business plan.
General Assumptions | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Plan Month | 1 | 2 | 3 | 4 | 5 |
Current Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
Long-term Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 | 0 | 0 |
As shown in the Benchmarks chart below, our key financial indicators are:
The Break-even Analysis has determined approximate break-even sales as shown below. There will be a constant monitor on this number in an attempt to lower it. Once again, it is believed that efficiencies, experience, and knowledge will help in decreasing the break-even number.
Sales are expected to be well in excess of this number for each month.
Break-even Analysis | |
Monthly Revenue Break-even | $102,932 |
Assumptions: | |
Average Percent Variable Cost | 55% |
Estimated Monthly Fixed Cost | $45,915 |
The Profit and Loss statement makes it very clear which areas will need attention. Payroll is by far the largest expense the company incurs (besides cost of goods sold). Staff will need to be managed and hours regulated so that hours worked correlate to sales. Emphasis will be placed on minimizing expenses that do not help generate bottom line.
The company generates a profit as sales revenue gets above the break-even line. A push on sales will be very important in generating bottom line profits. Interest expense is also a large line item that diminishes over time, but is a necessary expense on the front end of the business.
Pro Forma Profit and Loss | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Sales | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 |
Direct Cost of Sales | $818,091 | $1,019,293 | $1,223,152 | $1,284,310 | $1,348,525 |
Other Costs of Goods | $0 | $0 | $0 | $0 | $0 |
Total Cost of Sales | $818,091 | $1,019,293 | $1,223,152 | $1,284,310 | $1,348,525 |
Gross Margin | $658,812 | $821,683 | $991,081 | $1,059,061 | $1,135,572 |
Gross Margin % | 44.61% | 44.63% | 44.76% | 45.19% | 45.71% |
Expenses | |||||
Payroll | $248,224 | $273,234 | $299,183 | $314,054 | $324,096 |
Account Name | $0 | $0 | $0 | $0 | $0 |
Depreciation | $48,021 | $48,021 | $48,021 | $48,021 | $48,021 |
Advertising Expense-Circulars | $15,136 | $18,867 | $22,693 | $24,016 | $25,458 |
Advertising Expense-Newspapers | $3,397 | $4,234 | $5,093 | $5,390 | $5,713 |
Advertising Expense-Yellow Pages | $2,604 | $2,604 | $2,604 | $2,604 | $2,604 |
Advertising Expense-National | $7,680 | $9,573 | $11,514 | $12,186 | $12,917 |
Lease | $114,638 | $125,424 | $134,933 | $144,442 | $153,951 |
Utilities | $9,000 | $9,250 | $9,500 | $9,750 | $10,000 |
Telephone | $4,431 | $5,523 | $6,643 | $7,030 | $7,452 |
Accounting and Legal | $6,384 | $7,661 | $9,193 | $11,032 | $13,238 |
Store and Office Supplies | $14,769 | $18,410 | $18,821 | $19,919 | $21,115 |
Insurance | $10,032 | $10,338 | $10,648 | $10,967 | $11,296 |
Delivery Vehicle Expense | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 |
Payroll Taxes | $22,321 | $24,591 | $26,926 | $28,265 | $29,169 |
Employee Benefits | $16,428 | $18,071 | $19,426 | $20,883 | $22,449 |
State Property Tax Expense | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
Travel | $2,871 | $3,000 | $3,200 | $3,500 | $4,000 |
Other | $16,548 | $17,052 | $18,600 | $20,400 | $21,600 |
Total Operating Expenses | $550,984 | $604,353 | $655,497 | $690,957 | $721,579 |
Profit Before Interest and Taxes | $107,828 | $217,330 | $335,584 | $368,104 | $413,992 |
EBITDA | $155,849 | $265,351 | $383,605 | $416,125 | $462,013 |
Interest Expense | $47,148 | $41,783 | $35,771 | $29,260 | $22,208 |
Taxes Incurred | $18,204 | $52,664 | $89,944 | $101,653 | $117,535 |
Other Income | |||||
Interest Income | $0 | $0 | $0 | $0 | $0 |
Other Income Account Name | $0 | $0 | $0 | $0 | $0 |
Total Other Income | $0 | $0 | $0 | $0 | $0 |
Other Expense | |||||
Account Name | $0 | $0 | $0 | $0 | $0 |
Other Expense Account Name | $0 | $0 | $0 | $0 | $0 |
Total Other Expense | $0 | $0 | $0 | $0 | $0 |
Net Other Income | $0 | $0 | $0 | $0 | $0 |
Net Profit | $42,476 | $122,883 | $209,869 | $237,191 | $274,249 |
Net Profit/Sales | 2.88% | 6.67% | 9.48% | 10.12% | 11.04% |
The company generates a net positive cash flow in its first year. It is assumed that Accounts Payable will be repaid in 45 days. Repayment of debt is a significant factor in the amount of cash that gets paid out. Long-term debt is on a 7-year amortization.
Dividends are paid in December of each year. The assumption is that 50% of profits are paid out to shareholders and investors.
Pro Forma Cash Flow | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Cash Received | |||||
Cash from Operations | |||||
Cash Sales | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 |
Subtotal Cash from Operations | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 |
Additional Cash Received | |||||
Non Operating (Other) Income | $0 | $0 | $0 | $0 | $0 |
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 | $0 | $0 |
Subtotal Cash Received | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 |
Expenditures | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Expenditures from Operations | |||||
Cash Spending | $248,224 | $273,234 | $299,183 | $314,054 | $324,096 |
Bill Payments | $998,841 | $1,351,063 | $1,682,641 | $1,761,830 | $1,851,152 |
Subtotal Spent on Operations | $1,247,065 | $1,624,298 | $1,981,824 | $2,075,884 | $2,175,248 |
Additional Cash Spent | |||||
Non Operating (Other) Expense | $0 | $0 | $0 | $0 | $0 |
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $66,629 | $72,159 | $78,148 | $84,634 | $91,659 |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 |
Dividends | $21,311 | $61,442 | $104,935 | $118,596 | $137,125 |
Subtotal Cash Spent | $1,335,005 | $1,757,898 | $2,164,906 | $2,279,113 | $2,404,032 |
Net Cash Flow | $141,898 | $83,078 | $49,327 | $64,257 | $80,065 |
Cash Balance | $238,062 | $321,140 | $370,467 | $434,724 | $514,789 |
The balance sheet is very straight forward. No significant purchases of assets are expected or anticipated.
Using Building Blocks’ IAIS, online ordering, and weekly delivery systems allows Hisarlik Hardware to restock inventory in a just-in-time fashion. Inventory levels will be maintained with re-orders tied to Cost of Goods Sold. Additional inventory purchases will be made one month prior to participation in the quarterly Building Blocks nationally advertised Power Event sales. The first Power Event coincides with Hisarlik Hardware’s Grand Opening. Inventory will be allowed to drop somewhat at the end of December, after the Holiday purchasing, and for year-end tax accounting purposes.
There is a possibility of rental purchases in the future if the right products are found to add to the current inventory.
Pro Forma Balance Sheet | |||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Assets | |||||
Current Assets | |||||
Cash | $238,062 | $321,140 | $370,467 | $434,724 | $514,789 |
Inventory | $334,000 | $330,689 | $396,826 | $419,970 | $445,190 |
Other Current Assets | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 |
Total Current Assets | $602,462 | $682,229 | $797,693 | $885,094 | $990,379 |
Long-term Assets | |||||
Long-term Assets | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 |
Accumulated Depreciation | $48,021 | $96,042 | $144,063 | $192,084 | $240,105 |
Total Long-term Assets | $198,083 | $150,062 | $102,041 | $54,020 | $5,999 |
Total Assets | $800,545 | $832,291 | $899,734 | $939,114 | $996,378 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Current Liabilities | |||||
Accounts Payable | $129,341 | $171,805 | $212,461 | $217,880 | $229,679 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $129,341 | $171,805 | $212,461 | $217,880 | $229,679 |
Long-term Liabilities | $558,371 | $486,212 | $408,064 | $323,430 | $231,771 |
Total Liabilities | $687,712 | $658,017 | $620,525 | $541,310 | $461,450 |
Paid-in Capital | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 |
Retained Earnings | ($104,643) | ($123,609) | ($105,660) | ($14,387) | $85,679 |
Earnings | $42,476 | $122,883 | $209,869 | $237,191 | $274,249 |
Total Capital | $112,833 | $174,274 | $279,209 | $397,804 | $534,928 |
Total Liabilities and Capital | $800,545 | $832,291 | $899,734 | $939,114 | $996,378 |
Net Worth | $112,833 | $174,274 | $279,209 | $397,804 | $534,928 |
The Ratio Analysis looks very encouraging. Industry Profile data is based on Standard Industrial Classification code 5252, Hardware Stores.
Ratio Analysis | ||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Industry Profile | |
Sales Growth | 0.00% | 24.65% | 20.27% | 5.83% | 6.01% | 5.13% |
Percent of Total Assets | ||||||
Inventory | 41.72% | 39.73% | 44.10% | 44.72% | 44.68% | 47.00% |
Other Current Assets | 3.80% | 3.65% | 3.38% | 3.24% | 3.05% | 22.34% |
Total Current Assets | 75.26% | 81.97% | 88.66% | 94.25% | 99.40% | 82.03% |
Long-term Assets | 24.74% | 18.03% | 11.34% | 5.75% | 0.60% | 17.97% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 16.16% | 20.64% | 23.61% | 23.20% | 23.05% | 31.52% |
Long-term Liabilities | 69.75% | 58.42% | 45.35% | 34.44% | 23.26% | 21.36% |
Total Liabilities | 85.91% | 79.06% | 68.97% | 57.64% | 46.31% | 52.88% |
Net Worth | 14.09% | 20.94% | 31.03% | 42.36% | 53.69% | 47.12% |
Percent of Sales | ||||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 44.61% | 44.63% | 44.76% | 45.19% | 45.71% | 34.51% |
Selling, General & Administrative Expenses | 41.72% | 37.96% | 35.28% | 35.07% | 34.67% | 21.03% |
Advertising Expenses | 1.02% | 1.02% | 1.02% | 1.02% | 1.02% | 1.71% |
Profit Before Interest and Taxes | 7.30% | 11.81% | 15.16% | 15.71% | 16.67% | 2.01% |
Main Ratios | ||||||
Current | 4.66 | 3.97 | 3.75 | 4.06 | 4.31 | 2.22 |
Quick | 2.08 | 2.05 | 1.89 | 2.13 | 2.37 | 0.67 |
Total Debt to Total Assets | 85.91% | 79.06% | 68.97% | 57.64% | 46.31% | 56.39% |
Pre-tax Return on Net Worth | 53.78% | 100.73% | 107.38% | 85.18% | 73.24% | 4.50% |
Pre-tax Return on Assets | 7.58% | 21.09% | 33.32% | 36.08% | 39.32% | 10.32% |
Additional Ratios | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Net Profit Margin | 2.88% | 6.67% | 9.48% | 10.12% | 11.04% | n.a |
Return on Equity | 37.64% | 70.51% | 75.17% | 59.63% | 51.27% | n.a |
Activity Ratios | ||||||
Inventory Turnover | 2.38 | 3.07 | 3.36 | 3.14 | 3.12 | n.a |
Accounts Payable Turnover | 8.72 | 8.11 | 8.11 | 8.11 | 8.11 | n.a |
Payment Days | 40 | 39 | 41 | 44 | 44 | n.a |
Total Asset Turnover | 1.84 | 2.21 | 2.46 | 2.50 | 2.49 | n.a |
Debt Ratios | ||||||
Debt to Net Worth | 6.09 | 3.78 | 2.22 | 1.36 | 0.86 | n.a |
Current Liab. to Liab. | 0.19 | 0.26 | 0.34 | 0.40 | 0.50 | n.a |
Liquidity Ratios | ||||||
Net Working Capital | $473,121 | $510,424 | $585,232 | $667,214 | $760,700 | n.a |
Interest Coverage | 2.29 | 5.20 | 9.38 | 12.58 | 18.64 | n.a |
Additional Ratios | ||||||
Assets to Sales | 0.54 | 0.45 | 0.41 | 0.40 | 0.40 | n.a |
Current Debt/Total Assets | 16% | 21% | 24% | 23% | 23% | n.a |
Acid Test | 2.08 | 2.05 | 1.89 | 2.13 | 2.37 | n.a |
Sales/Net Worth | 13.09 | 10.56 | 7.93 | 5.89 | 4.64 | n.a |
Dividend Payout | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | n.a |
The long term plan is to develop a steady retail hardware business in the downtown Wilusa market. As discussed, there is currently no competition. They key will be to establish a solid business to discourage any competition from coming into the market or creating a level of loyalty that will not be fazed by competition.
After two solid years of performance and establishment of Hisarlik Hardware , there are two areas of potential expansion. First, look for opportunities in the current market. What businesses can be combined logically with what has been established that will deliver additional bottom line profit. Secondly, a second location will be developed in a new part of Wilusa. An area that will deliver a similar characteristic to the first store that appears to be headed down the road of success.
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Monthly Net Sales | 0% | $91,241 | $99,041 | $106,241 | $121,759 | $122,972 | $125,793 | $122,579 | $127,490 | $137,524 | $152,076 | $105,152 | $98,634 |
Rental | 0% | $2,845 | $2,845 | $2,845 | $3,048 | $3,210 | $3,454 | $3,292 | $3,413 | $3,820 | $4,429 | $2,966 | $2,763 |
Other | 0% | $2,007 | $2,007 | $2,007 | $2,151 | $2,265 | $2,437 | $2,323 | $2,409 | $2,696 | $3,126 | $2,093 | $1,950 |
Total Sales | $96,093 | $103,893 | $111,093 | $126,958 | $128,447 | $131,684 | $128,194 | $133,312 | $144,040 | $159,631 | $110,211 | $103,347 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Cost of Goods Sold | $52,920 | $57,444 | $61,620 | $70,620 | $71,324 | $72,960 | $69,936 | $75,104 | $79,764 | $88,204 | $60,988 | $57,208 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Direct Cost of Sales | $52,920 | $57,444 | $61,620 | $70,620 | $71,324 | $72,960 | $69,936 | $75,104 | $79,764 | $88,204 | $60,988 | $57,208 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
President (Hector Priamson) | 0% | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,583 | $4,587 |
General Manager (Penthesilea Thracian) | 0% | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,333 | $3,337 |
Asst. Gen. Manager (Glaucus Serpadon) | 0% | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,916 | $2,924 |
Cashiers | 0% | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 | $2,323 |
Specialists | 0% | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 | $7,529 |
Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 17 | 17 | 17 | 17 | 17 | 17 | 17 | 17 | 17 | 17 | 17 | 17 | |
Total Payroll | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,700 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |
Long-term Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $96,093 | $103,893 | $111,093 | $126,958 | $128,447 | $131,684 | $128,194 | $133,312 | $144,040 | $159,631 | $110,211 | $103,347 | |
Direct Cost of Sales | $52,920 | $57,444 | $61,620 | $70,620 | $71,324 | $72,960 | $69,936 | $75,104 | $79,764 | $88,204 | $60,988 | $57,208 | |
Other Costs of Goods | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $52,920 | $57,444 | $61,620 | $70,620 | $71,324 | $72,960 | $69,936 | $75,104 | $79,764 | $88,204 | $60,988 | $57,208 | |
Gross Margin | $43,173 | $46,449 | $49,473 | $56,338 | $57,123 | $58,724 | $58,258 | $58,208 | $64,276 | $71,427 | $49,223 | $46,139 | |
Gross Margin % | 44.93% | 44.71% | 44.53% | 44.38% | 44.47% | 44.59% | 45.45% | 43.66% | 44.62% | 44.75% | 44.66% | 44.65% | |
Expenses | |||||||||||||
Payroll | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,700 | |
Account Name | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Depreciation | 4% | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 | $4,002 |
Advertising Expense-Circulars | 3% | $2,783 | $293 | $293 | $2,783 | $293 | $293 | $1,953 | $293 | $2,783 | $2,783 | $293 | $293 |
Advertising Expense-Newspapers | 0% | $221 | $239 | $256 | $292 | $295 | $303 | $290 | $311 | $331 | $367 | $253 | $238 |
Advertising Expense-Yellow Pages | 0% | $217 | $217 | $217 | $217 | $217 | $217 | $217 | $217 | $217 | $217 | $217 | $217 |
Advertising Expense-National | 1% | $500 | $540 | $578 | $660 | $668 | $685 | $656 | $704 | $749 | $830 | $573 | $537 |
Lease | 10% | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 | $9,553 |
Utilities | 1% | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 | $750 |
Telephone | 0% | $288 | $312 | $333 | $381 | $385 | $395 | $379 | $406 | $432 | $479 | $331 | $310 |
Accounting and Legal | 1% | $532 | $532 | $532 | $532 | $532 | $532 | $532 | $532 | $532 | $532 | $532 | $532 |
Store and Office Supplies | 1% | $961 | $1,039 | $1,111 | $1,270 | $1,284 | $1,317 | $1,262 | $1,353 | $1,440 | $1,596 | $1,102 | $1,033 |
Insurance | 1% | $836 | $836 | $836 | $836 | $836 | $836 | $836 | $836 | $836 | $836 | $836 | $836 |
Delivery Vehicle Expense | 1% | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 |
Payroll Taxes | 9% | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 | $1,860 |
Employee Benefits | 1% | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 | $1,369 |
State Property Tax Expense | 0% | $0 | $0 | $0 | $2,500 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Travel | 1% | $1,437 | $0 | $0 | $0 | $0 | $0 | $0 | $1,434 | $0 | $0 | $0 | $0 |
Other | 1% | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 | $1,379 |
Total Operating Expenses | $47,872 | $44,105 | $44,252 | $49,568 | $44,608 | $44,675 | $46,222 | $46,183 | $47,418 | $47,737 | $44,234 | $44,110 | |
Profit Before Interest and Taxes | ($4,699) | $2,344 | $5,221 | $6,770 | $12,515 | $14,049 | $12,036 | $12,025 | $16,858 | $23,689 | $4,988 | $2,030 | |
EBITDA | ($697) | $6,346 | $9,223 | $10,772 | $16,517 | $18,051 | $16,038 | $16,027 | $20,860 | $27,691 | $8,990 | $6,031 | |
Interest Expense | $4,131 | $4,095 | $4,059 | $4,023 | $3,986 | $3,949 | $3,912 | $3,874 | $3,837 | $3,799 | $3,761 | $3,722 | |
Taxes Incurred | ($2,649) | ($525) | $349 | $824 | $2,559 | $3,030 | $2,437 | $2,445 | $3,906 | $5,967 | $368 | ($508) | |
Other Income | |||||||||||||
Interest Income | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Income Account Name | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Other Income | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Expense | |||||||||||||
Account Name | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Expense Account Name | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Other Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Other Income | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($6,181) | ($1,225) | $813 | $1,923 | $5,970 | $7,070 | $5,687 | $5,705 | $9,115 | $13,923 | $859 | ($1,185) | |
Net Profit/Sales | -6.43% | -1.18% | 0.73% | 1.51% | 4.65% | 5.37% | 4.44% | 4.28% | 6.33% | 8.72% | 0.78% | -1.15% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $96,093 | $103,893 | $111,093 | $126,958 | $128,447 | $131,684 | $128,194 | $133,312 | $144,040 | $159,631 | $110,211 | $103,347 | |
Subtotal Cash from Operations | $96,093 | $103,893 | $111,093 | $126,958 | $128,447 | $131,684 | $128,194 | $133,312 | $144,040 | $159,631 | $110,211 | $103,347 | |
Additional Cash Received | |||||||||||||
Non Operating (Other) Income | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $96,093 | $103,893 | $111,093 | $126,958 | $128,447 | $131,684 | $128,194 | $133,312 | $144,040 | $159,631 | $110,211 | $103,347 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,684 | $20,700 | |
Bill Payments | $0 | $41,380 | $79,105 | $88,519 | $92,797 | $94,318 | $104,264 | $98,138 | $101,208 | $111,491 | $99,990 | $87,632 | |
Subtotal Spent on Operations | $20,684 | $62,064 | $99,789 | $109,203 | $113,481 | $115,002 | $124,948 | $118,822 | $121,892 | $132,175 | $120,674 | $108,332 | |
Additional Cash Spent | |||||||||||||
Non Operating (Other) Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $5,352 | $5,387 | $5,423 | $5,459 | $5,496 | $5,533 | $5,569 | $5,607 | $5,644 | $5,682 | $5,719 | $5,758 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $21,311 | $0 | $0 | |
Subtotal Cash Spent | $26,036 | $67,451 | $105,212 | $114,662 | $118,977 | $120,535 | $130,517 | $124,429 | $127,536 | $159,168 | $126,393 | $114,090 | |
Net Cash Flow | $70,057 | $36,442 | $5,881 | $12,296 | $9,470 | $11,149 | ($2,323) | $8,883 | $16,504 | $463 | ($16,182) | ($10,743) | |
Cash Balance | $166,221 | $202,663 | $208,543 | $220,840 | $230,310 | $241,459 | $239,136 | $248,020 | $264,524 | $264,987 | $248,805 | $238,062 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $96,164 | $166,221 | $202,663 | $208,543 | $220,840 | $230,310 | $241,459 | $239,136 | $248,020 | $264,524 | $264,987 | $248,805 | $238,062 |
Inventory | $344,000 | $344,000 | $344,000 | $354,000 | $344,000 | $344,000 | $354,000 | $344,000 | $354,000 | $354,000 | $324,000 | $324,000 | $334,000 |
Other Current Assets | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 | $30,400 |
Total Current Assets | $470,564 | $540,621 | $577,063 | $592,943 | $595,240 | $604,710 | $625,859 | $613,536 | $632,420 | $648,924 | $619,387 | $603,205 | $602,462 |
Long-term Assets | |||||||||||||
Long-term Assets | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 | $246,104 |
Accumulated Depreciation | $0 | $4,002 | $8,004 | $12,005 | $16,007 | $20,009 | $24,011 | $28,012 | $32,014 | $36,016 | $40,018 | $44,019 | $48,021 |
Total Long-term Assets | $246,104 | $242,102 | $238,101 | $234,099 | $230,097 | $226,095 | $222,094 | $218,092 | $214,090 | $210,088 | $206,087 | $202,085 | $198,083 |
Total Assets | $716,668 | $782,723 | $815,163 | $827,042 | $825,337 | $830,805 | $847,953 | $831,628 | $846,510 | $859,012 | $825,474 | $805,290 | $800,545 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $77,588 | $116,640 | $133,129 | $134,959 | $139,954 | $155,564 | $139,121 | $153,904 | $162,936 | $142,467 | $127,143 | $129,341 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $77,588 | $116,640 | $133,129 | $134,959 | $139,954 | $155,564 | $139,121 | $153,904 | $162,936 | $142,467 | $127,143 | $129,341 |
Long-term Liabilities | $625,000 | $619,648 | $614,261 | $608,838 | $603,379 | $597,883 | $592,350 | $586,781 | $581,174 | $575,530 | $569,848 | $564,129 | $558,371 |
Total Liabilities | $625,000 | $697,236 | $730,901 | $741,967 | $738,338 | $737,837 | $747,914 | $725,902 | $735,078 | $738,466 | $712,315 | $691,272 | $687,712 |
Paid-in Capital | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 | $175,000 |
Retained Earnings | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($83,332) | ($104,643) | ($104,643) | ($104,643) |
Earnings | $0 | ($6,181) | ($7,406) | ($6,593) | ($4,670) | $1,301 | $8,371 | $14,058 | $19,763 | $28,878 | $42,802 | $43,661 | $42,476 |
Total Capital | $91,668 | $85,487 | $84,262 | $85,075 | $86,998 | $92,969 | $100,039 | $105,726 | $111,431 | $120,546 | $113,159 | $114,018 | $112,833 |
Total Liabilities and Capital | $716,668 | $782,723 | $815,163 | $827,042 | $825,337 | $830,805 | $847,953 | $831,628 | $846,510 | $859,012 | $825,474 | $805,290 | $800,545 |
Net Worth | $91,668 | $85,487 | $84,262 | $85,075 | $86,998 | $92,969 | $100,039 | $105,726 | $111,431 | $120,546 | $113,159 | $114,018 | $112,833 |
Long-term | ||||||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |
Sales | $1,476,903 | $1,840,977 | $2,214,233 | $2,343,370 | $2,484,097 | $0 | $0 | $0 | $0 | $0 |
Cost of Sales | $818,091 | $1,019,293 | $1,223,152 | $1,284,310 | $1,348,525 | $0 | $0 | $0 | $0 | $0 |
Gross Margin | $658,812 | $821,683 | $991,081 | $1,059,061 | $1,135,572 | $0 | $0 | $0 | $0 | $0 |
Gross Margin % | 44.61% | 44.63% | 44.76% | 45.19% | 45.71% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Operating Expenses | $550,984 | $604,353 | $655,497 | $690,957 | $721,579 | $0 | $0 | $0 | $0 | $0 |
Operating Income | $107,828 | $217,330 | $335,584 | $368,104 | $413,992 | $0 | $0 | $0 | $0 | $0 |
Net Income | $42,476 | $122,883 | $209,869 | $237,191 | $274,249 | $0 | $0 | $0 | $0 | $0 |
Current Assets | $602,462 | $682,229 | $797,693 | $885,094 | $990,379 | $0 | $0 | $0 | $0 | $0 |
Long-term Assets | $198,083 | $150,062 | $102,041 | $54,020 | $5,999 | $0 | $0 | $0 | $0 | $0 |
Current Liabilities | $129,341 | $171,805 | $212,461 | $217,880 | $229,679 | $0 | $0 | $0 | $0 | $0 |
Long-term Liabilities | $558,371 | $486,212 | $408,064 | $323,430 | $231,771 | $0 | $0 | $0 | $0 | $0 |
Equity | $112,833 | $174,274 | $279,209 | $397,804 | $534,928 | $0 | $0 | $0 | $0 | $0 |
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If you're considering opening a hardware store in the US, you've chosen a promising industry to enter. The hardware retail market has been steadily growing, with a projected revenue of $44 billion in 2021, representing a 3.4% increase from the previous year. With the right business plan in place, you can maximize your chances of success in this thriving market. In this blog post, we'll guide you through the nine essential steps to write a business plan for a hardware store that stands out from the competition.
Step 1: Conduct market research to identify trends, consumer preferences, and potential niche markets that your hardware store can tap into. Understanding the demand and supply dynamics of the industry will help you make informed decisions as you navigate the market.
Step 2: Identify your target market and competition . Determine who your ideal customers are and analyze the existing hardware stores in your area. Identifying gaps in the market and differentiating your store will be crucial to attracting and retaining customers.
Step 3: Develop a comprehensive business concept . Define your store's unique selling proposition, which could include offering a wide range of niche and specialty hardware products, providing consulting services, or hosting workshops to teach DIY skills. Tailor your concept to meet the needs of your target market.
Step 4: Create a detailed financial plan to estimate the startup costs, revenue projections, and profitability of your hardware store. This will help in securing funding and determining the feasibility of your business idea.
Step 5: Determine the store location and layout . Choose a location that is easily accessible to your target market and ensure your store layout is designed for optimal customer experience and efficient operations.
Step 6: Create a marketing and advertising strategy to attract customers to your store. Utilize both online and offline channels to promote your unique products and services, showcase your expertise, and engage with your target audience.
Step 7: Develop a staffing plan . Determine the number and types of employees you will need to run your hardware store efficiently. Provide relevant training and create a positive work environment to ensure employee satisfaction.
Step 8: Establish supplier relationships to ensure a reliable and diverse range of products for your store. Identify reputable suppliers who can meet your inventory needs and negotiate favorable terms.
Step 9: Obtain necessary licenses and permits to comply with the legal requirements of operating a hardware store. Research the specific permits and licenses required in your area and ensure you have all the necessary documentation in order.
By following these nine steps, you'll be well-equipped to write a comprehensive business plan for your hardware store that sets you up for success in the competitive market. With a focus on niche and specialty products, excellent customer service, and a well-executed marketing strategy, your hardware store can become a trusted destination for customers seeking specific tools and materials.
Conducting thorough market research is an essential first step when developing a business plan for a hardware store. This research will provide valuable insights into the demand for hardware products in your target market, as well as the competitive landscape and potential consumer preferences. It will help you make informed decisions and identify opportunities for differentiation.
In order to effectively conduct market research, consider the following steps:
By conducting thorough market research, you will gain valuable insights into the demand for hardware products in your target market, enabling you to develop a business plan that meets the needs of your customers and sets you apart from your competitors.
| Hardware Store Financial Model Get Template |
Identifying the target market and understanding the competition is a crucial step in developing a successful business plan for a hardware store. By thoroughly analyzing the market and researching the existing competition, you can tailor your offerings to meet the needs of your target customers and differentiate your store from competitors in the industry.
When identifying your target market, consider factors such as demographics, psychographics, and geographic location. Determine who your ideal customers are, their preferences, and their purchasing habits. This will help you develop a clear understanding of the specific needs and preferences of your target market.
Additionally, research and analyze the competition in the hardware retail industry. Identify other hardware stores in your area, both large chains and smaller independent businesses. Understand their strengths, weaknesses, and the products and services they offer. This will allow you to identify any gaps in the market that you can capitalize on and help you differentiate your store from the competition.
Developing a comprehensive business concept is a crucial step in creating a successful hardware store. This step requires careful consideration of various factors that will shape the overall direction and focus of your business. Here are some important aspects to consider:
By thoroughly developing a comprehensive business concept, you lay the foundation for a hardware store that meets the unique needs of your target market and stands out from the competition. This step serves as a guiding framework for all other aspects of your business plan, ensuring that every decision aligns with your overall vision and objectives.
A detailed financial plan is crucial for the success of your hardware store. It will help you understand the financial viability of your business idea and guide your decision-making process. Here are some important steps to consider when creating your financial plan:
Choosing the right location for your hardware store is crucial to its success. The store should be easily accessible to your target market and strategically positioned to attract customers. Consider factors such as visibility, proximity to residential areas or other businesses, and the level of competition in the area. Additionally, the layout of your store plays a significant role in creating an inviting and functional space for both staff and customers.
When determining the store location, conduct thorough research on various potential sites. Look for areas with a high demand for hardware products and a customer base that aligns with your target market. Consider factors such as foot traffic, parking availability, and proximity to complementary businesses that could attract potential customers.
Once you have selected a suitable location, focus on devising an optimal store layout. Take into account the available square footage, the type and volume of products you plan to stock, and the overall flow of customers within the store. Place often-required items in prominent areas and ensure that aisles and pathways are wide enough to accommodate shopping carts or customers with mobility aids.
Additionally, consider creating designated areas for workshops, consultations, or product demonstrations, if they are part of your business concept. These interactive spaces provide opportunities for customers to engage with your store and its offerings, fostering a sense of community and increasing the likelihood of repeat visits.
Remember, the store location and layout should not only be aesthetically pleasing but also functional, efficient, and aligned with your overall business goals and target market preferences.
Marketing and advertising are essential components of a successful business. A well-planned strategy will help you generate awareness, attract customers, and ultimately increase sales. Here are some key steps to consider when creating your marketing and advertising strategy for your hardware store:
One of the key factors in running a successful hardware store is having a knowledgeable and skilled staff to assist customers and provide expert guidance. Developing a staffing plan is crucial to ensure you have the right team in place to meet the needs of your business and customers.
Here are some important steps to follow when creating a staffing plan:
By developing a comprehensive staffing plan, you can ensure that your hardware store has a capable and dedicated team to provide excellent customer service and support the success of your business.
Once you have identified your target market and developed a comprehensive business concept, it's time to start building relationships with suppliers who will provide the products you need to stock your hardware store. These suppliers play a crucial role in the success of your business, as they will ensure a steady supply of high-quality items that meet the needs and demands of your customers.
Here are some essential steps to establish strong supplier relationships for your hardware store:
When opening a hardware store, it's essential to obtain the necessary licenses and permits to ensure compliance with local and state regulations. Failure to do so can result in legal consequences and disruptions to your business operations. Here are some key licenses and permits you should consider:
Writing a business plan for a hardware store is an essential step towards success. By following the nine steps outlined in this checklist, you can ensure that your business is well-prepared and positioned for growth. By conducting thorough market research, identifying your target market and competition, and developing a comprehensive business concept, you can create a strong foundation for your hardware store.
Creating a detailed financial plan, determining the store location and layout, and establishing supplier relationships are critical for operational efficiency and cost-effectiveness. By developing a marketing and advertising strategy, you can effectively reach your target audience and differentiate your store from competitors.
Furthermore, developing a staffing plan and obtaining necessary licenses and permits are important for smooth day-to-day operations and legal compliance. By considering these factors and implementing them into your business plan, you can set your hardware store up for long-term success.
Remember, a hardware store that focuses on providing niche and specialty hardware products, along with additional services like consulting and DIY classes, can attract a loyal customer base. By offering convenience, expertise, and unique products, you can position your store as a go-to destination for customers seeking specific tools and materials.
Writing a business plan for your hardware store may seem like a daunting task, but by breaking it down into these nine steps and using this checklist, you can create a well-thought-out plan that sets your business up for growth and success.
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This Brick Manufacturing Business Plan Template offers a comprehensive range of implementable plans and strategies for your manufacturing business. With its organized and customizable sections and subsections, the template allows you to plot your company’s future and set the stage for business success.
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Whatever construction work you do whether it be commercial construction, landscaping , maintenance or building construction, your services alone won’t be enough to attract investors and clients. With a business plan , companies will be able to attract potential investors to help get their company from the ground up. Construction companies in particular sometimes need investors to get their project up and running. How will they be able to do that? By presenting a construction business plan to them.
1. construction management business plan.
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A construction business plan is a blueprint for how a construction company runs their operations. It contains information about the company itself and the construction services it provides. This business plan also contains the goals of the construction company as well as the business strategies used to achieve them. Content of a construction business plan also include safety plans and business procedures. Like all business plans it serves as a guide for the construction company on how to navigate in the world of business.
According to a recent graph by Statista, the total spending of the United States has been going upwards from 2011 onwards. This means a lot of money can go in your company’s way especially once you get a hold of investors through an impressive construction business plan.
Everything that is important has to have a proper introduction. To get started with your business plan you need to write an introduction about your construction business first. Similar to a proposal you need to make a formal and a good impression with your readers when presenting the plan to them. Write a summary of your company; how it started, what it does, and where they currently operate. Write about the services your business provides but don’t go into the details just yet. Make it intriguing enough to make your readers want to read on.
When you are writing your construction business plan always remember to be truthful. False claims on your business plan may impress your readers at first. But when the truth is uncovered it can result in your business having a bad reputation and that can spell doom for your company . So make sure all your words are facts that can be backed up.
Keeping in line with the previous step, take the time to fact check all your statements . When you are stating things about your company especially when it involves money and confidential information, make sure they are backed up by concrete evidence. Provide documentation as well as further proof when you write about your projects in your business plan so that means including photos and construction blueprints.
This step is especially important when you are a startup company. When making your construction business plan write about the strategies that you have in order to reach the goals of your company. You can write about your marketing and financial strategies for a start. Write about the assets you have that enable you to achieve your plans such as the general contractors you have under your employ for example. Making this part allows you readers to know how you plan on bringing your company up and whether you have the means to achieve it.
Creating a well thought out business plan for your construction company can take months depending on the knowledge you have and the detail you dedicate into making it.
A well written construction plan should take about 15 minutes to skim. In that time you should be able to convey everything important about your construction company. If it takes longer to read try to rework your plan by making it less wordy.
People who have a key position in the construction company are the ones who should be involved in creating the business plan . Somewhat such as the founder or CEO should be the one who usually prepares it but they can also be assisted by consultants with relevant knowledge.
Your construction business plan serves as a written blueprint on how to run your company. Give it a lot of thought when you are writing it down especially when you are going to use it to attract investors . With a well made plan you will be able to get even the most hesitant investors to work with your company. And with their help the clients will also be drawn to the company leading to more business and profit.
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The Pre-written business plan package (PDF, Word, and Excel) costs $30 only! If you want to purchase multiple business plans at once then click here: Business Plans Store. The business plan package is a zipped compressed file containing the PDF, Word and Excel documents.
Here are a few tips for writing the market analysis section of your hardware shop business plan: Conduct market research, industry reports, and surveys to gather data. Provide specific and detailed information whenever possible. Illustrate your points with charts and graphs. Write your business plan keeping your target audience in mind. 4.
Those who plan to put up their own hardware and construction supplies business. Key Topics I. Introduction 1. Construction industry 2. Statistics a. Population b. Hardware business c. Real estate • Residential houses and condominium • Commercial establishment II. Competition (Types of hardware business) 1. Traditional hardware stores 2.
Starting a business can be tricky because of all the details you need to keep track of. These sample business plans for machinery and hardware supplies businesses will help you make sure you get your business plan right, and will set the stage for the future success of your business. Explore our library of Machinery & Hardware Business Plan ...
Follow these tips to quickly develop a working business plan from this sample. 1. Don't worry about finding an exact match. We have over 550 sample business plan templates. So, make sure the plan is a close match, but don't get hung up on the details. Your business is unique and will differ from any example or template you come across.
1. Describe the Purpose of Your Hardware Business. The first step to writing your business plan is to describe the purpose of your hardware business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers' problems.
Here's a method to spot your competition: Determine local hardware stores in your area. Analyze their product range, prices, and services. Check customer reviews for strengths and weaknesses. Look at their marketing and online presence. With this intelligence, your business plan advances from good to great.
A Hardware Store presents an opportunity to serve as a vital resource for individuals and businesses seeking tools, materials, and supplies for various projects and repairs.DIY culture continues to thrive, with many people preferring to tackle home improvement tasks themselves. By establishing such a business, entrepreneurs can provide a convenient and comprehensive selection of hardware ...
Construction Hardware: $521,500.00 : $641,236.40 : $788,464.28 : Garden Décor & Hardware: $238,000.00 : $292,644.80 : $359,836.05 : General Tools: $247,500.00 : $304,326.00 : ... As you can see from the financial part of this hardware retail franchise business plan in pdf, the hardware store can be immensely profitable if you provide unique ...
Explore a real-world hardware retail franchise business plan example and download a free template with this information to start writing your own business plan. ... Contractors: As stated earlier, there were 91 renovation permits and 615 new residential units under construction in the last year. The new residential units represented $261 ...
Those who plan to put up their own hardware and construction supplies business. Key Topics I. Introduction 1. Construction industry 2. Statistics a. Population b. Hardware business c. Real estate • Residential houses and condominium • Commercial establishment II. Competition (Types of hardware business) 1. Traditional hardware stores 2.
Step 2: Identify your target market and competition. Determine who your ideal customers are and analyze the existing hardware stores in your area. Identifying gaps in the market and differentiating your store will be crucial to attracting and retaining customers. Step 3: Develop a comprehensive business concept.
Operational Process. Help tip Hardware Shop Business Plan. Outline the processes and procedures you will use to run your hardware shop. Your operational processes may include inviting walk-ins, assisting customers, making sales, collection and payment, scheduling fittings, store maintenance, and order restocking.
This Brick Manufacturing Business Plan Template offers a comprehensive range of implementable plans and strategies for your manufacturing business. With its organized and customizable sections and subsections, the template allows you to plot your company's future and set the stage for business success. Business Download Template. Word.
Description. This business plan provides a blueprint for how to start and manage your Hardware Store business. Our detailed research and analysis, including interviews with entrepreneurs and stakeholders, will ensure that you plan your future business for success. A business plan is used for various purposes including to (a) Raise funding from ...
Whatever construction work you do whether it be commercial construction, landscaping, maintenance or building construction, your services alone won't be enough to attract investors and clients.With a business plan, companies will be able to attract potential investors to help get their company from the ground up.Construction companies in particular sometimes need investors to get their ...
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Their closest branch to our office is located at 545 First Avenue North - St. Petersburg, FL 33701 - 727-464-7000. Step 2 - File a certified copy of the Recorded Notice of Commencement with the Construction Services and Permitting office PRIOR to requesting the first inspection.
Their closest branch to our office is located at 545 First Avenue North - St. Petersburg, FL 33701 - 727-464-7000. Step 2 - File a certified copy of the Recorded Notice of Commencement with the Construction Services and Permitting office PRIOR to requesting the first inspection.