Retail Discount Store Business Plan
The Dollar Store is a start-up retail store in Bend, Oregon that provides interesting merchandise options at bargain prices. Financing will come from the private investments of owners Ted Brinkman and Jim Spencer. They will donate equity that will be cleared at the end of 36 months. Dividends will be paid quarterly on the outstanding equity.
The Dollar Store will be incorporated as an LLC corporation. This will shield the owners from issues of personal liability and double taxation. The investors will be treated as shareholders and therefore will not be liable for more than their personal investments. The majority owner Ted Brinkman, will contribute from his personal savings toward this business venture. With an agressive marketing plan The Dollar Store expects to experience steady growth as it becomes more familiar to the general public.
With the financing in place The Dollar Store will be able to successfully open and maintain operations through year one. The large capital investments of the owners will provide the public with a unique and innovative store that will cater to the needs of those on fixed incomes such as low income families, the elderly, and the large student population in the Bend area. The successful operation of the Dollar Store will provide a customer base that will allow it to be self-sufficient.
- To provide a wide range of merchandise at reasonable prices.
- To achieve a healthy profit margin within the first year.
- To achieve a modest net profit by year two.
- To be an active and vocal member of the community, and provide continual re-investment through participation in community activities and financial contributions.
The Dollar Store provides a variety of interesting merchandise options at bargain prices. Dedicated to customer service the Dollar Store will give its patrons the kind of service that is respectful and prompt. Employees of the Dollar Store will also be treated in a professional manner with a rewarding work environment and fair compensation. The Dollar Store wants each customer to feel as though he/she has gotten Fifth Avenue treatment at a bargain price.
1.3 Keys to Success
To succeed in this business we must:
- Sell a broad range of products.
- Provide for the satisfaction of 100% of our customers.
- Be an active member of the community.
- Encourage customer input.
The Dollar Store sells products and provides excellent customer service for the general public. We have leased a retail store which we use to market and merchandise our products. It is located one mile from Main St. on River Way in Bend, Oregon. The company was incorporated on January 2.
2.1 Company Ownership
The Dollar Store is a privately held corporation. It will be registered as a Subchapter S, with ownership Ted Brinkman (60%), Jim Spencer (40%).
2.2 Start-up Summary
The building will be leased with a down payment of $3,000 on a four year lease.
Start-up costs will be financed through a combination of owner investment and short-term borrowing. The start-up chart shows the distribution of financing.
Other miscellaneous expenses include:
- Marketing/advertising consultancy fees for assistance in designing our grand-opening ads and brochures.
- Legal fees for corporate organization filings.
- Retail merchandising/designing fees for store layout and minor renovations.
The Dollar Store sells a variety of quality discount merchandise. The types of merchandise we will carry will include items such as dishware, household goods, toys, cosmetics, candy, greeting cards, and a list of items too exhaustive to list here. A dedicated staff is committed to providing excellent customer service.
The merchandise is purchased from a variety of well-known manufacturers such as Procter & Gamble, General Mills, American Greetings as well as a number of other generic branded companies. Shipments arrive on a daily basis. We will continue to find new product lines that can be added to our inventory.
We are able to sell products at very low prices, because we will purchase items from discontinued lines, seconds, over runs, etc., that cannot be sold to a manufacturer’s usual retail customers.
Market Analysis Summary
We expect sales to increase steadily as consumers find that they can purchase a variety of quality items at bargain prices. We intend to tap into the retail market with pricing that will encourage quantity buying, and our pricing will attract consumers on fixed budgets.
Our target market is the lower income portion of the Bend and Redmond community. This includes working class individuals, the elderly, and students, many of whom are price conscious and looking to find a value for their dollar.
4.1 Market Segmentation
The market analysis pie chart shows potential customers and the company’s target markets. The Dollar Store intends to provide affordable shopping alternatives to working class families with incomes under $25,000, for elderly people on fixed incomes, and also a large student population that tend to be on strict budgets. Bend makes up the largest market segment. We expect this market to grow at a rate of 10% per year. This market constitutes the general public who are looking for affordable merchandise at bargain prices. Redmond constitutes the second largest market with a fast growing retirement community. There are also many bedroom communities that shop in the Bend area that will add to the percentage of consumers.
4.2 Target Market Segment Strategy
We focus on the price conscious consumer who is looking for value as well as quality. Both the Bend and the Redmond groups will be marketed to as they are isolated populations which do most of their shopping in the greater Bend area. If we can attract and keep these consumers the word will continue to spread about what our store has to offer.
4.3 Industry Analysis
In an ever changing economy the discount store model is becoming more popular with the consumer. Providing a large selection of bargain-priced items is our intended goal.
4.3.1 Competition and Buying Patterns
Consumers demand quality customer service, fair pricing, and a convenient location.
Competition is very tough with customer service and location key components. The selection of merchandise a store provides is also very important.