MillenniumMart

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Convenience Store Business Plan

Strategy and Implementation Summary

MillenniumMart's competitive edge will be the lower prices we will charge our customers and the novel purchasing experience that will draw shoppers.

The most critical element of MillenniumMart's success will be its marketing and advertising. In order to capture attention and sales MillenniumMart will use prominent signs at the store locations, billboards, media bites on local news, and radio advertisements to capture customers.

Many of the initial customers will be drawn to the unique nature of the store and will then have the opportunity to realize the cost savings of MillenniumMart. We expect an average 27% increase in sales from year to year. This may seem very high, but considering the level of initial sales and the growth possibilities, management actually considers this to be conservative.

5.1 Competitive Edge

MillenniumMart's competitive edge will be the lower prices we will charge our customers and the novel purchasing experience that will draw shoppers. In the convenience store industry, low cost and availability are the two success criteria. We plan to create these advantages in a new, high-tech environment that will retain customers.

5.2 Marketing Strategy

The most critical element of MillenniumMart's success will be its marketing and advertising. Convenience stores serve the entire purchasing population of its geographical area but focuses on customers who need to purchase items outside of normal working hours such as swing shift employees and quick shoppers looking for snacks and related items. In order to capture attention and sales MillenniumMart will use prominent signs at the store locations, billboards, media bites on local news, and radio advertisements to capture customers. Many of the initial customers will be drawn to the unique nature of the store and will then have the opportunity to realize the cost savings of MillenniumMart. Since automated shopping is still in its infancy, the firm expects to invest a great deal of its available cash and revenues in marketing efforts.

5.3 Sales Strategy

Since our store will be a stand-alone, remote facility, there is little in the way being able to directly influence how we close the sales other than to have an attractive storefront with our low prices and easy-to-use system. We believe that this in itself is its own seller. One critical procedure to ensure top customer service and reliability will be establishing a method for keeping enough inventory of all our products. We will be using industry data on inventory for other convenience store chains to assist us.

5.3.1 Sales Forecast

Based on a 20% mark-up, our forecasted sales for years one, two, and three respectively are: $2,480,106; $3,149,735; $4,000,163. This gives us an average 27% increase from year to year. This may seem very high, but considering the level of initial sales and the growth possibilities, management actually considers this to be conservative.

These sales figures are based on a conglomerate of commuter and walk-by traffic with an average $3.00 purchase amount conforming to industry averages. The target profit margin was defined as an average net profit of all merchandise.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Drinks $978,070 $1,242,149 $1,577,529
Snacks $873,277 $1,109,061 $1,408,508
Magazines/newspapers $209,586 $266,175 $338,042
General grocery items $279,449 $354,900 $450,723
Other $139,724 $177,450 $225,361
Total Sales $2,480,106 $3,149,735 $4,000,163
Direct Cost of Sales Year 1 Year 2 Year 3
Drinks $753,114 $956,455 $1,214,697
Snacks $672,423 $853,977 $1,084,551
Magazines/newspapers $161,382 $204,955 $260,292
General grocery items $215,175 $273,273 $347,056
Other $107,588 $136,636 $173,528
Subtotal Direct Cost of Sales $1,909,682 $2,425,296 $3,080,125