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BUSINESS PLAN FOR RETAIL STORE

Entrepreneurship

Prepared for:
Sir Rai Farukh
Management Sciences Department
University of Education, LMC, Lahore

Prepared By:

Ibrar Asghar Butt
Roll no. 117
Muhammad Hamid Asghar
Roll no. 124
Group: 13
Section: 02

st

Date of Submission: 1 June, 2015

while the services sector accounts for 54% of the GDP. Retail stores business is emerging as one of the good business ventures in Pakistan as it provides all the basic merchandise under one roof. Agriculture and industry sector now account for about 22% and 24% of GDP respectively. A detailed analysis reveals that there are many opportunities to capitalize and earn enormous profits through this business.000 or so new enterprises launched each year are retail operations. there is an extensive scope in growth of such retail stores. at variable price points. An approximate budget of 1Million is required for this business. The structure of Pakistan’s economy has changed from a mainly agricultural base to a service base. Pakistani economy is moving from traditional to modern era. we have considered for choosing as a startup for our entrepreneurial venture of retail store. Retail stores are part of the daily life of almost every person. As one of the nation's largest employers. This is the same area. As Retail stores offer opportunities to People who want to start new businesses with small capital (1Lac Minimum) therefore this idea of retail store is very beneficial for entry level entrepreneurs. Store will be located in Sanda Khurd Lahore.. invest their time and make a living by offering consumers something they need or want . Because of the fact.1. in all product categories. These employment opportunities will be also beneficial for economic conditions if huge amount of these stores are established around country. INTRODUCTION TO RETAIL STORE Retailing is one of the fastest-growing segments of the economy. Proposed business will offer items of daily necessities. At least one-third of the 500. Manpower of 4 people will be required for retail store business. With all this capital and manpower the business will be able to generate revenues and profits from first year of inception. and at the same time offering the consumer a choice multiple merchandise lines. the retail industry provides excellent business opportunities for you. The entrepreneurs behind these ventures risk their capital. A retail store is an establishment which specializes in satisfying a wide range of the consumer's personal and residential durable product’s needs. . The dense population of the area is an opportunity to grow.

The following factors for success of retail store business are important to operate it an entrepreneurial way. So that customers can purchase products in friendly environment at a lower price. never be come in mind I am in shopping. Stationery Items. Candies.1 million with Fixed Investment of Rs. Wheat. Tea. Diapers. This Retail store business will sell items such as Surf. Mineral Water. and versatile sales floor. 1.1. powdered milk. Thus we would like to capture 25% market share within 2 year Since we have selected Lahore for starting new venture so for now we will just consider Lahore as our target market. Total Cost Estimate of the project is Rs. Tooth paste. 0. universal. Sugar. EXECUTIVE SUMMARY To introduce a new era of business module in Pakistan. Negotiation and marketing Skills 3: Manpower requirement . we are people of four members are going to establish a retail store. Selection of products and brands to be sold 2. It generally provides almost every kind of consumer goods.. Shampoos.2 million and Working Capital of Rs. To make it successful we have chosen developing region of Lahore city to inaugurate one outlet initially. We have a value proposition a shop where “Everything at your side”. Bottles. Small Provision items. We will not only sell quality products and services but also values and trust. Branded Jams. Branded oils. Rice.8 million. 0. biscuits and chocolate / toffees etc. a unique. Soap.

Mission: We sell goods with minimum cost in friendly environment. • Target Market: We have chosen Sanda Lahore as Target Market of our retail store. • Employment Generation: The proposed project will provide direct employment for 4 people. . BRIEF DESCRIPTION OF PROJECT • Products: Proposed retail store business will offer items of daily necessities.3. We will continue to find new product lines that can be added to our inventory. A SUMMARY OF DESCRIPTION OF BUSINESS Our business is established mainly to provide consumer goods and services to people in more comfortable way where they will be able to collect their any kinds of necessities with the assurance of quality and standard in an environment friendly manner. Vision: To establish a market environment where customer will get quality products and services at a reasonable price in an environment friendly manner 2. The estimated population of this area is about more than 2Million that will be favorable for our Business. The demand for these items is directly proportional to dense population. The merchandise is purchased from a variety of well-known manufacturers such as Procter & Gamble as well as a number of other generic branded companies.

3. Personal Advertising with Customers Business of retail store is completely dependent upon sales revenues generated through sales of goods therefore it is very important to address customers. CRITICAL FACTORS Critical success factors that will distinguish our retail store business from traditional stores are. Marketing mediums .Management Summary The owners of the retail store believe very strongly that relationships should be forthright. and pay should be fair and equitable in relation to what the industry is paying.  To target potential customers  To retain long term customer relations. Personal advertising will play an important role in promoting our business. work should be structured with enough room for creativity. With the right people in place the Dollar Store will have the incentives to encourage quality people to stay. These marketing skills will help us when.          Marketing Skills Personal Advertising with Customers Marketing mediums Pricing Use of computer Store layout and presentation Suggestions from customers continually Customer focused Proper Inventory Management Marketing Skills Effective marketing skills are required for this start up.

Floor patterns. layout and presentation becomes a key-differentiating factor. Store layout and presentation Traditional retail stores display commodities poorly and their owners never care about use of space. The amount of data needed for merchandise planning would require hundreds of man-hours to produce. The proposed store would be airconditioned. Because space is costly. Today’s successful retailer is the one making the most profitable use of every square foot of space in the store and in the warehouse. whereas a well- . buy one get one free. location of merchandise.The important marketing mediums for our new venture would be  Flyer distribution  Banners  Frequent clearance sales Pricing Traditional Retail stores often do not use any pricing strategy they just follow the Principle of “Bringing and Selling”. Some pricing strategies that we intend to use are as following. This is the reason they are rated lowest at Entrepreneurial continuum. In a world where one can find identical merchandise in more than one store. Misuse of space can be as detrimental to success as poor buying. It is very important for every store to create a suitable atmosphere and appealing presentations in order to attract the consumer’s buying decision. The computer is an invaluable aid in processing the large number of transactions and vast amounts of information involved in managing a retail operation. retailers need to take a strategic approach to its use. Use of computer Traditional retail stores have no concept of use of computer in their stores.  Providing the consumer with an incentive to become a repeat customer by offering a future discount. Every entrepreneurial retailer has a basic philosophy towards pricing their product. amounts of merchandise and the appropriate displays are critical in determining space.  Frequent clearance sales  Including a gift with purchase. Goods would be properly arranged in shelves categorically.

And this rent of first month plus additional amount of advance will be paid out from our fixed investment. 4. Strengths      Sole ownership concept Work at own discretion Small capital required for start up Easy availability of resources (manpower/salesman) Dense population of area . SWOT ANALYSIS A SWOT Analysis is a strategic planning tool used to evaluate the Strengths. A SWOT for our retail store is. In addition to that building rented carriage car will be required and this amount of rent will be paid out through reserve cash in hand. suggestions from customers regarding changes that customer wants. LOCATION OF STORE Obviously Retail store’ location selection is a major decision while starting new venture. We have selected a Shop of 2 Marla’s in Sanda Khurd Lahore on rent of 4000 monthly. In contrast traditional retailers are rarely customer focused they just focus on reaping high profits which results in loss of customer. The Shop will be acquired on rent basis. We will continuously take reviews. Customer focused From day one our strategy will be customer focused profits will automatically inflow. and reviews about their satisfaction. Weaknesses. Software for inventory and sales recording and management should be used to have updated data at all the times. Suggesstions from customers on regular basis Old School Retailers don’t take reviews from customers.designed computer system can perform the task in seconds. Opportunities and threats originate from outside while strengths. This software will not only record each and every sales transaction but also will update stock and cash position after every transaction. and Threats involved in a project or business venture. 5. Opportunities. and weaknesses from inside.

Hence it is free from income taxes by Government. Intellectual property: We will designed our logo which will be our special trademark and it will differentiate us from others. Our strategies and intellectual designs are also important that would not copy. An effort to make retail store entrepreneurial venture may suppress profits. We will make registrations according to the rules of law with supporting documents for the above mentioned intellectual properties PACKAGING: . In this regard. Government polices High competition Our Entrepreneurial retail store model might be copied by competitors Easy diversification towards new product mix 7. Entrepreneur will have to sit on cash counter to avoid chances of fraud by salespersons Threats      In 2015-16 budget Government of Pakistan is considering to apply tax on retailers. But the prospective law is under consideration by Government of Pakistan to be approved in 2015-16 Budget. Weaknesses     Basic model is buying and selling.Opportunities     Effective use of Space in store Making store environment attractive Taking continual suggestions from customers Focusing on products that customer demands. Lack of experience. we will have copyrights on these facts.LEGAL STATUS Our retail store business falls in sole proprietorship business. by which all retailers will be taxed. We have introduced unique ideas which also cannot be copied by others.

Every person with income limitations or on fixed incomes is a potential customer. the people we attract. people can easily recall our brand name so that potential customer will attract as well as turn in to our loyal customer. This is the area which does not differ where we cannot use any entrepreneurial tool to become better than traditional competitors. We are selling ourselves. We want to create competitive advantages by reducing cost of supply. We want to provide the kind of customer service that will provide an atmosphere that creates a positive shopping experience for our customers. . We will present a store that is pleasant to shop in with a large variety of merchandise to choose from. and the atmosphere we create. distribution. BRANDING: Today branding has become so important that there is hardly anything that has no brand identity. we are selling more than just merchandise. 6. Women: For women we have introduced special bags with some tips of cooking Men: some beauty tips for men included in the bag for men PRICING: We are following cost leadership strategy to capture 25% share from nearby retail stores when start up. Strategy and Implementation Summary The retail store uses a strategy of total market service. Our promise is in our location and the products we sell.We will introduce four types of packages for our different levels of customers which are environment friendly: Children: We will introduce new shopping bag for children with cartoony and colorful design. Ultimately. Operating time depend on localities requirements. OPERATING TIME OF BUSINESS The store will operate for 18 hours from morning to midnight. We believe the name of our business is a unique identity. . Strategic Assumptions: 1.

2: This success is also reserved for those who provide attractive facilities to customers. Locations of Renowned names of retail sector in Lahore       City Areas Lahore Mustafa Town Johar Town Wapda Town Nespak Batala Colony Muslim Town Surgodha Ameen Park 10. Offering huge number of trolley 3.Marketing to these segments of the population will lead to an expansion in overall market growth. 1: Retail store success is reserved for those who are prepared to commit themselves to change. PRODUCTS DIVISION The store will offer the following broad categories of goods to its customer:        Wheat. Giving tag which involved price. date of purchasing .TWO MAJOR ELEMENTS FOR SUCCESS IN RETAIL STORE Two major elements for success in retail store are. 9.2. Arranging products in a discipline way 2. Flour and Dals 10% Groceries and food items 10% Baby care shampoos 10% Soaps detergents and chemicals10% Ice-cream and beverages 10% Calling cards 10% Other general items 20% Customer service: 1.

Opening complaining box 6.4. The major wholesale markets in Lahore are:     Shahalam Market/Rang Mahal Akbari Mandi Urdu Bazar Moochi Gate .MARKET INFORMATION Major Wholesale Markets Retailers can acquire retail commodities via wholesale markets in every large city of pakistan. Providing after sales services in special cases 11. Opening more than four of collection booth to minimize queue line 5. Automated direction system 7.

In late eighties a shift in grocery store occurred. Contribution to Economy Although in Pakistan the retail business is not providing employment at a large scale directly. ELECTRIC AND OTHER EQUIPMENT REQUIREMENT Following is the detail of equipment required for this project.12. but indirectly it is contributing in the employment growth.Competitors Grid City Locations Lahore Sanda Lahore Lahore Sanda Khurd Lahore Lahore Islampura Lahore Uniqeness Store Name 2% Discount Offers Discount in Ramadan Offers both retail and wholesale item Mohsin Store Khurram Store Qazi store 13. . In 2005-2006 this sector showed a growth of 9.9%. Companies are coming with top quality products and with the increase in production level the employment also increases. As more and more retail outlets are opening and consumer buying has shifted towards packaged/branded products. This sector has shown a significant growth over the last few years. DETAILED ANALYSIS OF BUSINESS Big Picture Retail stores business is emerging as one of the good business ventures in Pakistan as it provides all the basic merchandise.

it provides quick quantitative review of different aspects of retail store business 1: Sales Price Increase 7% 2: Increase in Cost of Sales 10 % 3: Increase in Staff Salaries 10 % 4: Per year Increase in Utilities 10 % 5: Per year Increase in Rent 10 % 6: Per year Increase in Office Expenses 10 % yearly 7: Carriage Van Depreciation 10 % per annum 8: Bad Debts 3% of Sales .Rs/=700. 15. of Units deep freezers 1 Inventory Softwar 1 4 Fittings ------- Total cost 40000 20000 40000 5000 14.Description Refrigerator and Computer & Racks and shelves Electric No. KEY ASSUMPTIONS Following figures are collected by surveying retailers and are helpful for our start-up.000 . Projected Income Statement for First quarter of start up Estimated Sales revenue for 3 months……………………………….

Rs/= 3.000 .Rs/=18000 Salaries …………………………………Rs/= 40000 Shop Rent………….. 000 Less: Operating Expenses………………………………………… Electricity……………………………….Less: Estimated Cost of Goods sold……………………………………..Rs/=270.00.400. 000 Gross Profit…………………………………………………….000 Expected Net Profit……………………………………….……………………Rs/=12000 Total Operating Expenses…………………………………Rs/=70.

000 Total Assets 885.000 Total Liabilities and Equities 885.000 Owner’s Equity 885.000 Accounts Payables Computers 20.000 Total Liabilities Inventory Purchased 600.000 Nil .16.000 Accrued Expenses Nil Reserve Cash 200.000 Interest Payable Nil Racks 25. Projected Balance Sheet for 3months Asset Rupees Liabilities & Owner’s Equity Rupees Refrigerators 40.