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Retail Store
~ Business Plan
Lorelei Gress
Adele McIntosh
Karen Bowditch
Shanda Sedgwick
Outline ~
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Operations
Human Resources
Marketing Strategy
Financial Analysis
Business Feasibility
Mission Statement ~
"To support the growth and competitive advantage of the
Saskatchewan food and beverage processing industry by providing
our members with relevant and current programs and services."
Operations ~
 Location
 Retail
 Consignment
 Non-consignment
 Inventory is broken
into 5 categories
Operations ~ Organizational Structure
 COO:
SFPA Board of
Directors
 SFPA and Retail Store
 Contracted Services
9 Elected Members
3 Appointed Members
2 Associate Members
 Marketer:
Chief Operating
Officer
 SFPA and Retail Store
 Contracted Services
 Controller:
 SFPA and Retail Store
 Salary
 Store Manager:
 Retail Store
 Salary
 Staff:
 Retail Store
 Hourly
Marketer
Marketplace
Controller
Store Manager
Marketplace Staff
1 full-time, 3 part-time
Marketing ~ Targeting & Positioning
 Targeting:
 40-60 yr old Saskatchewan women
 Middle-high income, educated women
 Positioning:
 Home-grown, Home-made, high
quality products
 Wholesome image
 Marketing Mix (4P’s)
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Products
Price
Place
Promotion
Marketing ~ Channels of Distribution
 One-step channel distribution for vendors products
 Producer → Store → Consumer
 Two-step channel distribution for owned lines
 Producer → Wholesaler → Store → Consumer
 Challenges: shipping frozen food
 Sell products via:
 Direct sales
 Purchase order
 E-commerce
 All these marketing channels work well for Retail
Store and at least one of the target markets
Marketing ~ S.W.O.T.
Strengths
Weaknesses
•Association with the SFPA
•Not enough advertising
•No production costs
•Technological weakness
•Store nicely laid out, clean
•Rely on SFPA
•Friendly and knowledgeable staff
•No slogan / not catchy logo
•Supported financially by the SFPA
Opportunities
Threats
•Aging population
•Alberta made
•Upper age bracket still working
•Main streaming brings food into
bigger stores
•Higher wages = more spending
•Producers don't grow
•Ex-Saskatchewan residents
•Technology = more competition
•Have uniqueness above other
specialty shops
•Selling online
Marketing ~ Promotion and Advertising
Promote gift baskets:
Office gifts
Sponsorship
Holiday gifts
New changes:
Improve existing website and
brochures
Advertise on billboards
Tourism (hotels, airports)
Advertising
Brochures
Newspapers
Television
Radio
Billboards
Total Advertising
$450
$24,000
$19,200
$6,360
$6,000
$56,010
Promotion and Development
Promotional Goods
$527
Web Page
$5,000
Travel Expenses
$1,500
Trade Shows
$400
Total Promotion
$7,427
Total Marketing Expenses $63,437
Brochure Place amt 5000 brochures
*1.25 ad per week
*6 one-min spots/week
*6 one-min spots/week
*$500 per month
SMM 2006 budget
FundNet
SMM 2006 budget
SMM 2006 budget
Financials ~ Owner Equity
 Owner’s equity in 2007 is $81,479.
$50,000 remaining of CARDS funding.
Equity
Working Capital
Total Land & Eqipment Cost
Production Equipment Beginning Balance
CARDS Funding
Total Equity
$22,7 1 9
$1 ,500
$7 ,261
$50,000
$81,480
Financials ~ Economic Forecast
 Ten year plan
 5% annual increase in
sales for first 7 years
 3% annual increase in
sales for last 3 years
 Annual Inflation 2%
 Consignment are the
largest % of sales sold as
gift baskets
 Gift baskets are used as a
marketing tool
Financials ~ Financial Feasibility
Year
2007
2009
2011
2013
2015
Sales
$550,000
$630,873
$723,637
$830,041
$916,166
Cost of Sales
$434,370
$483,864
$525,559
$571,914
$605,563
Gross Margin
$115,630
$147,009
$198,078
$258,127
$310,603
Expenses
$264,745
$256,162
$266,542
$277,026
$288,633
Net Income (loss) Before
Tax
-$28,888
$16,000
$60,773
$115,275
$161,981
$0
$0
$6,077
$11,528
$16,198
Net Income (loss) After
Tax
-$28,888
$16,000
$54,696
$103,748
$145,783
Net Cash Flow to Equity
$29,900
$15,375
$54,338
$102,977
$145,842
Income Tax
Net Present Value (NPV)
$124,798
Internal Rate of Return on Equity Investment
(IRR)
41.2%
External Rate of Return on Equity Investment
(ERR)
24.6%
Financials ~ Breakeven Analysis
 Charge higher price in first 4 years to break-even
on a net income basis
 After year 4 prices can be lowered as seen by cash
flow and net income
SMM Breakeven Analysis
14
Consignment Price
12
10
Base Case
8
Cash Flow
Net Income
6
NPV
4
2
0
1
2
3
4
5
6
Year
7
8
9
10
Financials ~ Sensitivity Analysis
Variable
Worst Case
- 5%
Consignment Units Sold
Consignment Retail Price
Base Case
47500
$
IRR
Best Case
+5%
50000
52500
9.50 $
10.00 $
10.50
3.0%
41.2%
91.4%
 5% change in base value
 Worst case
 Retail Store not profitable
 Best case
 Small increase in price = large increase in IRR
Questions?
Saskatchewan Made ... Saskatchewan Proud
Pricing ~ Consignment Example
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1.54 x on cost, 35% on sell
Vendor brings in a jar of jam to sell for $6.50
Retail Store takes $6.50 x 1.54 = $10.00 shelf price
The vendor makes $6.50 and Retail store makes
$3.50 at this point
35% on sell refers to the $10.00 shelf price x 35% =
$3.50 SMM profit
Retail Store takes an additional 10% from the
wholesale price for admin/advertising purposes
$6.50 (wholesale price) x 10% = $0.65 therefore the
vendor actually only makes $5.85 ($6.50 - $0.65 =
$5.85)
Retail store makes $3.50 + $0.65 = $4.15
Pricing ~ Corner Gas Example
 1.77 x on cost, 43% on sell
 Wholesale price of a t-shirt $13.50
 To determine the shelf price $13.50 x 1.77 = $23.89
shelf price
 Therefore a profit of $23.89 - $13.50 = $10.40 profit
 $23.89 x 43% = $10.40