Business Plan of Buster’s Convience Store
1) Brief of the business a) Introduction: A new office building will open two blocks away from my store. I am planning to expand my business by launching a second store at that location. Now I am going to make my one-store business to two-store operating business. I decided to call the chain store Buster’s. It will offer a variety choice of daily need, such as snacks, pre-wrapped sandwiches, bottled or canned beverages, greeting cards, newspapers, paperback books, and small gift items. b) Company History
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My store Buster’s are established since 2008, a small retailing business in the lobby of a large office building. It’s occupies 1000 square feet of space. I spend fifty hours a week at the store and hire two employees, each of whom spends thirty hours a week at the store. The annual revenues are between: $150,000 – $300,000. The store is solely owned and managed by Morgan Chan, who successfully run and keep the revenues stably growth at the pass few years. We provide the convenience and friendly service to our neighborhood then successfully build up the brand and reputation of Buster’s around the district.
I am going to apply my experience with even more successful business strategy to expand my business, by operating my second store. c) Locating the second store The location is the essential of the business successes, the new building which erect two blocks away recently is my best choice. Not only for easy manage, but there is a new Grade A commercial building in town, it is critical for my store’s branding and image. Beside the Grade A building is providing a larger amount of potential customers then will bring higher consumption volume to us. d) Business aspiration:
I will make my store to be the most professional convenience store in town. We will always providing the friendly service and care, wide variety of goods and services, excellent quality food products, reasonable price and attractive image. Ultimately, I hope to expand my business to 10 to 15 stores to suitable for downtown market. And proactively occupy more market share and stronger the branding. 2) Organizational Structure a) Owners: The Company is formed by partnership, after Morgan Chan’s brother join the business. Morgan Chan’s elder brother — the investor — Mosses Chan will be the “Sleeping partner”.
That mean, he will not involve the operation and management of the business, but he still can share a profit. b) Manager: Morgan Chan, Bachelor of Business and administration, University of Management and Technology (USA). Mr. Chan has 3 years convenient store operation experience. The store got break-even 10 month after its opening. c) Employee: The business has two employees initially. They are responsible to shop keeping, stock managing and general daily operation. They are Lucas and Yan. They are high school graduated, with at least one year shop keeping experience.
So that they can handle the daily operation by their own. As my experience, 2 staffs are the minimum amount of shop keepers. If the second store got opened, I will promote both to shop supervisor, and employ more new shop assistant staff to fill the vacancy. Lucas and Yan will response to train the new staff and manage the stores, customer service, keep tract inventory or replenishment and report customers’ comments and complaints to the owner. And I will hire 4 new staff for the expanding. They will work on shift, because we will open for whole week. 3) Financing Mean Anticipated start-up cost of the new store is US$260,000.
The main cost of the start up of the second store is the decoration and the inventory. It is estimated that the decoration and fixture are cost a hundred thousand and the initial inventory will cost the other hundred thousand dollar. And the 60 thousand dollar is spare for operation of urgency use. The funding will come from my elder brother Mosses Chan’s assets. I will get the budget by him, to mortgaging his property; he will get 70% of the market price of the property. The property is a flat in Po Fu Lam, Chi Fu Estate. The current market price is around HKD $3 million. It certainly fulfills my budget.
I will get 70% about HKD$2,900,000 by mortgaging the property and use HKD$2,028,000 equivalent USD$260,000. * Morgan Chan will be the larger holder of the business. The proportion of benefit sharing is Morgan Chan=74. 3%, Mosses Chan=25. 7% i. Morgan Chan: USD$664,230 ii. Mosses Chan: USD$260,000 4) Industry analysis a) Industry outlook The main purpose and market of grocery store or convenience store is to provide a convenience but good variety goods and services in the one location to the local consumer due to, they sharing the function of super market, restaurant, newspaper stand, and stationary store.
Now a day, convenience store not only providing dry pre-packed food and beverage, but the new life style and choice, such as freshly made foods and drinks—-The alternative of the take-away meal and restaurant, this spends your time and not healthy enough. b) Analysis competitor My business mainly facing 3 competitors —- 7-11, Circle K and Gas station store. The 7-11 and the Circle K are the national franchise convenience store. They have the strong network across the country and well established the branding, trust and depend amount the customers.
The gas station store basically is the same business as us but the scale is smaller and slightly far away from the center of the town customers won’t go there if they are not going to use the gas station. 5) Marketing Plan The new office building is the new commercial centre of the town. My second store of Buster’s will have an advantage of the location. It is because the located on the ground floor and the escalator nearby. Our promotion stands can easily catches the eyes both inside and outside the mall. a) Market segment The services and products provide by the convenience store are suitable for ll ages no matter men or women, but we have to make a pin point marketing strategy for each group of customers. I separated the population in 3 groups by their ages, to analyst their needs. * 11-25 year-old (Male and Female) Half of the population is student and half is fresh graduated junior labors. They mostly lack money but have fewer economic burdens, and they are the largest population of those 3 groups with certain consumption power. They are interested in playful, trendy, interesting things such as little toy, fancy stationary, snacks, sweets, street foods, and the entertaining magazines and popular literatures.
The population is from the schools nearby — St. Johanna College, King’s Elementary school, Ritz hospitality school of career. And the elders like 20-25 years old customers are mainly the junior position of the office tenants’ of the building. They have lower income, mostly live alone. They have certain demand of instant or canned food, alcoholic drinks, and soft drinks. * 25-39 year-old (Male and Female) This section of customer is mostly managerial levels with higher purchasing power, stable economic condition. They are living in intense life style, longest working hour and active social life.
They have higher concern about health and food quality but they are too busy when the daytime, so the higher quality healthy sandwiches or high quality instant food is essential. And then, they need some services to saving their time, so the paying services of the household compulsory such as, water supply, network fee, gas, electricity. They are demanding more informative publications, such as newspaper, economic-related and life style magazines. * 40< They have similar need as the 25-39 year-old group. They are mature and they commonly have family, even being a parent.
They require the price more bargaining. And they require more goods and services for household purposes. For example, the self-care hygiene products and baby care products, self-fix tool box. b) Promotion Strategies * Advertisement stand A colorful banner stands on the street nearby. This is a cheap way to promotion our stop. The banner will have the information of our stop such as the number and address, and also have the seasonal discount details. * Leaflets Leaflets are contributed around the community and surrounding the building that we located. Especially, two days before our grand opening.
The leaflets not only have an attractive design and memorable images, but also contain the products catalog and coupon for seasonal greeting. * Social network The free social networks like facebook or twitter are the massive, trendy but free promotion mean. We can use those to collect and union our members and can contribute newsletter to them but free of charge. * E-mail The official newsletter, customer service contact and the e-mail survey are essential. So we will assign a e-mail management company to do so. They will responsible to manage the e-mail server, sending newsletter and survey, special coupon. TV advertisement This is the most effective way to promote our business. But it is expensive, so I plan to buy one seasonal first. Then see the result. And the budget is about USD$2,000 6) Signature Products A. Pre-wrapped sandwiches Home-made high quality sandwiches filled with low fat cheese, lean meat and fresh vegetables. That can be satisfying the healthy concerning and busy customers. We will not leave the sandwiches overnight, so we will launch a price cut sales every evening 7:30pm, to make sure all stock been sold and show to our customers our fresh foods are freshly made and sell every day.
B. Bottle & canned beverage We can separate 2 group of beverage, alcoholic and non-alcoholic. The non-alcoholic drinks are generally the soft drinks, sport drinks, bottled juice, milk (from local farm), canned coffee, bottle herbal or flower tea. The alcoholic drinks will slightly more choices than the original convenience store. Not only the common beer and sparkling wine, but we sell some exotic spirits and low to medium priced house wine. C. Snacks * It mainly 3 big types of snacks. Those are especially for younger market. i. Popular branded snacks We sell chips, chocolate, candies and gums etc. ainly from Japan and Europe. Which countries have the most interesting and trendy snacks packing, those attract youth and can build our young and innovative image. ii. Micro wave meal and snack We provide micro-wave meal and street side food, TV meal, frozen hot dog, pizza, fish ball, dim sum, wing, frozen pastry. Those delicious pre-packed instant food are the comfort for the busy urban people. iii. Healthy snack We found some health tasty snack. For example sundries fruits and nut, low-fat cracker, yoghurt, cereal, diabetic snacks, diet jelly, meal subsidy energy bar. D. Stationary and Greeting cards
We will have some fancy cartoon stationary for the youngster, and the common stationary and greeting cards are for the offices needs. I decided to keep in 2 shelves. E. DIY tools That is taking care of resident nearby; we will have basic tool box set and simple electric drill and needle puncher. We leave one shelf for those. F. Publications Newspaper and magazine is essential, we sell the best-selling magazine no matter weekly or monthly, national newspaper, local tabloid newspaper. 7) Pricing strategy Pre-wrapped sandwiches USD$2. 5-$6. 0 Microwave food USD$1. 0-$8. 0 Snacks USD$0. 8-$7. 0
Healthy snacks USD$2. 0-$7. 0 Beverages USD$1. 2-$38 Stationary & DIY tool USD$1. 0-$40 8) Operation Plan 1) The Second store of Buster’s is a big investment, so I need to do anything to make it successful and profitable. The following is the analysis of reasons I choice this new office building for my new store. * The building is a grade A commercial building in town there will have lot of international big corporations to be tenants. According to the statistic properties management and servicing company, there will be up to 5,000 people working in the building in the future summer.
Those are professionals and high income levels. That is ideal for our business. * Another advantage is there have no convenience store or similar business in a 100 diameter. Their also have some middle class residential building surrounding and 3 schools in 150 diameter from location. That is a huge market. * My first store is close, it only 2 blocks away. I can more easy to shift between both store, that can be assured the efficiency of my management. In addition, if one of my stores has any emergency situation, both can help each other in 10minutes walking distant.