Retail Discount Store Business Plan

Dollar Store

Executive Summary

Opportunity

Solution

We’re the solution. The dollar store. 

Market

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.

Competition

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.

Why Us?

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.

Expectations

Forecast

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.

Financial Highlights by Year

Financing Needed

We will be getting $120,000 broken down as follows: 

Ted Brinkman $60,000

Jim Spencer $40,000

Other $20,000

Opportunity

Problem & Solution

Problem Worth Solving

Some people want to live life large on a very small budget. We help them do that. 

Our Solution

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.

Target Market

Market Size & Segments

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 that 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.

Competition

Current Alternatives

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.

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.

Our Advantages

Our location is a very important competitive edge. We are located in the popular Riverway Mall which has a high appeal to many different kinds of consumers. There is a good mix of high and low-end shops with several quality restaurants nearby. With easy access from Main St. the Riverway Mall is a popular destination not only for Bend residents, but for people commuting from Redmond and the outlying areas.

Another competitive edge we will have over our competition is the large variety of merchandise we will carry. With the sources we are working with it will be possible to carry many name brand items at a discount price. Add a staff committed to providing great customer service and the Dollar Store will be an attractive stop for the consumer.

Keys to Success

Keys to Success

Our keys to success are:

• 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.

Execution

Marketing & Sales

Marketing Plan

The Dollar Store will benchmark our objectives for sales promotion and mass selling.

We are focusing our marketing effort on the community of consumers that want a store that has an interesting variety of merchandise at bar gin prices. We will implement a strategy that treats these customers as a community. This means our marketing resources will be centered around both sales promotions (events, displays) and personal sales (customer service, friendly atmosphere).

• We will stay within our marketing budget.
• Marketing promotions will be consistent with the Mission Statement.

Social media is essential. Our target market is the community so we’ll inform people about events, happenings, weather, all general interest, for the most part. And only rarely about specifics of the store. 

Sales Plan

Employees are paid a straight wage but can achieve a semi-yearly bonus based on profits and customer satisfaction rates.

All potential sales will be attended to in a timely fashion and long-term salesperson-customer relationships will take precedence over sales closure.

Operations

Locations & Facilities

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 last year on January 2.

Milestones & Metrics

Milestones Table

Key Metrics

Our Key Metrics are: 

• The most popular products from one months to the next 
• the # of our customers that return 
• The reviews and tweets with our name 
• inventory turn over 
• staff satisfaction and turn over 

Company

Overview

Ownership & Structure

The Dollar Store is a privately held corporation. It will be registered as a Subchapter S, with ownership Ted Brinkman (60%), Jim Spencer (40%).

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 aggressive marketing plan, The Dollar Store expects to experience steady growth as it becomes more familiar to the general public.

Team

Management Team

The owners of the Dollar Store believe very strongly that relationships should be forthright, work should be structured with enough room for creativity, and pay should be fair and equitable in relation to what the industry is paying. With the right people in place, the Dollar Store will have the incentives to encourage quality people to stay.

Ted Brinkman and Jim Spencer worked together as managers of a group of large regional retail operations (name omitted) before starting the Dollar Store. Over the past 10 years, under their direction, the organization became the largest and most well-known in their area. The owners of the company were looking to sell the company to a national organization and it was at that point that Jim and Ted decided to branch out on their own. Both bring extensive retail marketing and finance knowledge to the company. They have the knowledge, experience, and contacts to make the company a success.

Personnel Table

Financial Plan

Forecast

Key Assumptions

The personnel burden is very low because benefits are not paid to part-timers. And the short-term interest rate is extraordinarily low because of Mr. Brinkman’s long-standing relationship with High Desert Credit Union.

Other assumptions: 

1. Growth will be moderate; cash flows steady.
2. Marketing costs will remain below 15% of sales.
3. The company will invest residual profits into financial markets and not company expansion (unless absolutely necessary).
4. Future cash investments will use NOV projections to achieve maximum return with limited risk.

Revenue by Month

Expenses by Month

Net Profit (or Loss) by Year

Financing

Use of Funds

Start-up costs will be financed through a combination of owner investment and short-term borrowing.  They include starting expenses of $13K and starting assets of 

The building will be leased with a down payment of $3,000 on a four year lease. That amount shows up on the balance sheet, at launch, as part of other current assets. 

Startup expenses

Our other expenses to get the office open are:

• Legal $300
• Stationery, etc. $200
• Brochures $500
• Marketing consultants $1,000
• Insurance $200
• Rent $3,000
• Building renovations $5,000
• Expensed equipment $1,500
• Other $1,300 

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

TOTAL START-UP EXPENSES  $13,000

This amount shows up as -$13,000 in negative retained earnings at launch. 

Startup assets:

Startup assets include

• $3K in other current assets for the rent deposit,
• $11.5K in fixtures, shelving, etc. 
• $5.5K starting inventory
• $95.6K cash in the bank as reserve. 

These show up in the balance sheet at launch. 

Sources of Funds

Our sources of funds are: 

Ted Brinkman $60,000

Jim Spencer $40,000

Other $20,000

Statements

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement