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Convenience Store Business Plan

Convenience Store Business Plan

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06/09/2013

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Convenience Store Business Plan
Executive Summary
Introduction
MillenniumMart is the convenience store of the 21st Century future, fulfilling a needthat will continue to exist into the future - the need for speed. MillenniumMart will bethe first fully automated, 24 hour convenience store that is more like an enormousdispensing machine than the traditional store.The company expects to capture market share by becoming the low cost leader in theconvenience store industry by significantly reducing one of the primary expenses,which is labor. Through our completely automated shopping experience, customerswill have the chance to shop for everyday items at reduced prices, thus undercuttingcompetition such as 7-11, AmPm, Circle K, and other local convenience store chains.The possibilities for expansion are excellent not only in the local area, but inneighboring communities as well.
The Company
The company is a joint venture start-up company between the principals, Mr. Beanand his associates, and the management of Martin-Bower, one of the country's largestand most successful food distributors. The company will be incorporated as a class Ccorporation in the state of Delaware with all shares held by private investors.Martin-Bower will own 29% of MillenniumMart's initial private shares with an optionto acquire a further 11% shares based on growth and profitability after the first fiveyears. MillenniumMart is expected to open its first store in downtown Manhattan inMarch of Year 1.The company will be set up with a board of directors. Mr. James Bean, a former senior manager of Martin-Bower is slated for the position of CEO. Mrs. Linda Tuck has accepted the position of CFO.
The Products/Services
MillenniumMart will sell the same products as other convenience stores in the same packaging sizes, quality, and quantity as other stores. This includes newspapers,magazines, soft drinks, fruit juices, sport drinks, hot and cold snacks, a limitednumber of grocery items such as canned soups, microwaveable meals, condiments, bread, auto products such as fuel additives and cleaning supplies, pet supplies, paper  products, toothpaste, etc.All products will be locally or nationally branded such as Frito-Lay, Coca-Cola, JollyGreen Giant, Charmin, Stouffer's, etc. In addition each computerized transactionmachine can dispense cash, stamps, Lotto and phone cards and other coupons and willhave the ability to create personal accounts that can display preferred items, retainshopping lists and other services. An automated, interactive "customer service rep"will be able to answer questions and pass on comments to the company'smanagement.
 
In addition, the company is looking into ways to sell restricted items such as beer,wine and cigarettes and to set up a separate Internet area for remote access to the Weband email for its customers.
The Market
Our market is booming. Convenience store industry sales rose 8.6% last year. OverallU.S. retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth, proving once again that the convenience store industry has become a powerful forcein U.S. retailing.Convenience stores serve the entire purchasing population of its geographical area butfocuses on customers who need to purchase items outside of normal working hourssuch as swing shift employees and quick shoppers looking for snacks and relateditems. Therefore we have segmented our market into night shoppers, quick shoppers,and others. Growth rates for these three segments match the population growth for thesurrounding area.Our main competitor is 7-11 which holds approximately 30% of the industry. Other competitors include Circle K, Fastrip, and any of the 85 grocery establishments on theeast coast.
Financial Considerations
Our start-up requirements come to $453,000, which are largely single time feesassociated with opening the store. These costs are financed by both private investorsand the investment of Martin-Bower. It should be noted that we expect to be operatingat a loss for the first six months before advertising begins to take effect and draw incustomers.MillenniumMart will be receiving periodic influxes of cash in order to cover operating expenses during the first two years as it strives toward sustainable profitability. Almost all of this funding has been arranged through lending institutionsand private investors already. We do not anticipate any cash flow problems during thenext three years.
 
1.1 Objectives
These are the goals for the next three years for MillenniumMart:
Achieve profitability by July Year 1;
Earn approximately $200,000 in sales by Year 3;
Start paying dividends by Year 3;
Start up second store by Year 4.
1.2 Mission
MillenniumMart's primary objective is to create a new and revolutionary distributionoutlet that will significantly reduce prices for its customers and provide greater services with an equal level of quality. The company seeks to be first to market withthis daring new idea so as to capture market share and create greater than average profits.
1.3 Keys to Success
In order to survive and expand, MillenniumMart must keep the following issues inmind:
We must attain a high level of visibility through the media, billboards, andother advertising.
We must establish rigid procedures for cost control and incentives for maintaining tight control.
We must expend a significant amount on R&D in order to constantly be ableto offer better and greater products and services.
Company Summary
Automated stores such as MillenniumMart are not new, they have existed in Asia,especially in Japan for a number of years now and have been quite successful there.Mr. James Bean, MillenniumMart's founder and the driving force behind the jointventure, has been intrigued with the idea of bringing this new type of store to the U.S.since it can significantly reduce costs and the ability of an automated store to provide products and services is only limited to the imagination of management.The company is a joint venture start-up company between the principals, Mr. Beanand his associates, and the management of Martin-Bower, one of the country's largestand most successful food distributors. The company will be incorporated in the stateof Delaware with all shares held by private investors.
2.1 Company Ownership
We will be structured as a C-Corporation which operates as a standard corporation.This form was chosen by the Board of Directors because of various tax advantages.Retained earnings will not be distributed as dividends for at least five years, thus

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