Retail Hardware Store Business Plan

Clara's Hardware Store

Executive Summary

Opportunity

Problem

Today, over 40% of the area’s homes are owned by women.  In addition, 60% of the area’s rentals are owned by women.  More often than not, it’s a woman who will now head to the hardware store for repair parts and advice. Today’s hardware store, which more and more are dominated by the mega-store chains, are cold, uninviting and usually involve more driving time.  

Solution

Clara’s Hardware will offer quality hardware products in a customer-friendly, shopping environment. Our customers will get assistance quickly and will leave the store prepared to get the job done right the first time. Clara’s Hardware will also focus on anticipating the seasonal needs of its customers and providing the best products at competitive prices.  Most importantly, Clara’s Hardware will make the additional 15 minute drive to a mega-hardware store, too far to go and too expensive to entertain.

Market

The demographics of home ownership has changed radically in the South Gate section of Gilmore.  Today, over 40% of the area’s homes are owned by women.  In addition, 60% of the area’s rentals are owned by women.  More often than not, it’s a woman who will now head to the hardware store for repair parts and advice. Today’s hardware store, which more and more are dominated by the mega-store chains, are cold, uninviting and usually involve more driving time.  Clara’s Hardware is uniquely positioned to take advantage of this new fact of life.  Conveniently located to serve the South Gate area, Clara’s Hardware offers parts, material, and advice to tackle any home repair, as well as lawn care. The focus is on helping the customer identify what they want as soon as they enter the store. 

 

Competition

Clara’s hardware will be competing against: 

Chain stores like True Value Hardware:New True Value hardware stores are specifically designed to appeal to female customers. In addition to better lighting and organization, there’s "an expanded assortment of decorative door knobs and drawer pulls." 

Mom and pop owned stores like McGukin Hardware. This store has chosen to have hardware needs  as well as other things  so that women only have to go to one store to get everything they need. 

There are other stores in the area, no one has the same view on this that clara does. 

 

Why Us?

Clara believes that a local hardware store can provide a reasonable selection in the most important product areas, be competitive in pricing, and offer the customer a shopping environment that will assure repeat business.

Expectations

Forecast

The store will efficiently lay out the store to increase sales and give the customers the upmost in attention. The projected growth rate for Clara’s Hardware is quite steady. The store will reach profitability by month six.

Financial Highlights by Year

Financing Needed

We will be getting from our founder $80,000 Clara Johnson. 

 

Opportunity

Problem & Solution

Problem Worth Solving

Today, over 40% of the area’s homes are owned by women.  In addition, 60% of the area’s rentals are owned by women.  More often than not, it’s a woman who will now head to the hardware store for repair parts and advice. Today’s hardware store, which more and more are dominated by the mega-store chains, are cold, uninviting and usually involve more driving time.  

Our Solution

The mission of Clara’s Hardware is to offer quality hardware products in a customer-friendly shopping environment. Our customers will get assistance quickly and will leave the store prepared to get the job done right the first time. Clara’s Hardware will also focus on anticipating the seasonal needs of its customers and providing the best products at competitive prices.  Most importantly, Clara’s Hardware will make the additional 15 minute drive to a mega-hardware store, too far to go and too expensive to entertain.

Target Market

Market Size & Segments

Clara’s Hardware will focus on three significant customer groups:

• Women home owners:  Many women home owners perform their own home repairs and home improvement projects.  Clara knows this first hand since she has helped many of these women in mastering the skills needed to do the work successfully. Clara’s Hardware will be uniquely designed to be responsive to the shopping environment that will attract and retain this important customer group.

• Customers who need assistance in planning a project/repair: This customer group can have the most frustrating experience in the hardware mega-stores. If they can’t make the scheduled demos or trainings, they are left to sort thing out with whoever they can flag down in the store help them. Clara’s Hardware will be set-up to provide resources and assistance as soon as they walk into the store.

• Local repair and home improvement professionals: The South Gate area supports a good number of repair and home improvement professionals. Currently, the hardware mega-stores have their business but Clara’s Hardware can win a increasing share of this customer group through aggressive marketing.  Time is money and if Clara’s Hardware can save them a trip outside the area, they will buy there.

Competition

Current Alternatives

In the past ten years, most local hardware stores have closed due to the success of large hardware mega-stores drawing away local customers. The attraction of the larger stores has always been price and and a large inventory. Customers would rather drive 20 minutes and make sure they will find what they want rather than drive five minutes and hope the local store will have it at a low price. Yet these same hardware mega-stores are sterile and not customer-friendly.  Customers can wander the aisles, aimlessly lost, looking for a two dollar item.  And when they do find the right section, they will most likely select the most popular brand no matter how large the selection is. What these store offer in price and selection, they lose in creating a confusing, frustrating maze for their  customers.

Clara believes that a local hardware store can provide a reasonable selection in the most important product areas, be competitive in pricing, and offer the customer a shopping environment that will assure repeat business.

 

 

Our Advantages

Clara’s Hardware’s competitive edge is:

• Location:  Clara’s Hardware is located in South Gate Plaza.  The foot traffic in the plaza is very strong. The closest hardware store to the South Gate area is a twenty minute drive.

• Seasonal Products: Each season has it own unique demand on a homeowner.  Clara’s Hardware will focus on this pattern and bring in local customers by marketing these items at competitive prices.

• Repair/Project Resource Area: The first section customers will find when they enter the store is a repair/project resource area that they can use to plan repairs or projects.  There will be a repair/project resource person there to answer their questions and direct them to the section of store where the needed products are. 

• In-Store Expertise: Store employees will be knowledgeable in home repairs/projects.  In addition, the repair/project resource area will be used to conduct short trainings and demonstrations in home repair and home projects.

Keys to Success

Keys to Success

Keys to Success

• Location:  Clara’s Hardware is located in South Gate Plaza.  The foot traffic in the plaza is very strong.  The plaza’s primary tenants are the area’s successful supermarket, drug store, and appliance store.  South Gate Plaza has easy access points on both of the area’s major cross streets and is the biggest shopping center in South Gate’s  residental area. The closest hardware store to the South Gate area is a twenty minute drive.
• Seasonal Products: Each season has it own unique demand on a homeowner.  Clara’s Hardware will focus on this pattern and bring in local customers by marketing these items at competitive prices.

• Repair/Project Resource Area: The first section customers will find when they enter is a repair/project resource area that they can use to plan repairs or projects.  There will be a repair/project resource person to answer questions and direct them to the section of store where the needed products are. 

• In-Store Expertise: Store employees will be knowledgeable in home repairs/projects.  In addition, the repair/project resource area will be used to conduct short trainings and demonstrations in home repair and home projects.

Execution

Marketing & Sales

Marketing Plan

We will be using a website, Facebook posts and videos, Twitter, Signage and well placed local radio and newspaper adds to get the word out and customers in the store. 

Sales Plan

The sales strategy of Clara’s Hardware is simple. First, create a shopping environment that will create confidence in the customer that he or she will get the needed material, part, or instructions to get the job done right the first time. Second, make the store easy to navigate, so customer can get in and out as quickly as possible. Third, know your customer’s seasonal hardware needs and offer it at competitive prices.

Operations

Technology

Clara’s Hardware offers the parts, material, and advice to tackle any home repair, as well as lawn care. The primary focus will be to satisfy the seasonal needs of the area’s customers.

• Fall/Winter: Weatherization projects.
• Spring: Garden/lawn projects/home improvement projects.
• Summer: Outdoor building projects.

Milestones & Metrics

Milestones Table

Key Metrics

Our key metrics: 

• # of customers who are within walking distance. we will know this by having them fill out forms for a minor discount
• inventory turnover – we must be fully empty every 45 to 60 days 
• clerk training – invest in specific programs so that we can provide certain services and keep track of how many customers want the services 
• favorite products and requests 
• tweets and retweets 

 

Company

Overview

Ownership & Structure

Clara’s hardware is a sole proprietorship founded by Clara Johnson 

Team

Management Team

Clara’s Hardware offers the parts, material, and advice to tackle any home repair, as well as lawn care.  The store’s owner, Clara Johnson, has worked in the hardware industry for over ten years.  Most recently, she was the shift manager at Home Depot located in Waterfront Shopping Center.  Her area of expertise was home repairs. She conducted four presentations a week on all manner of home repair. 

Personnel Table

Financial Plan

Forecast

Key Assumptions

Our key assumptions: 

• Our customers appreciate better lighting and brighter colors
• If they feel welcome they customers will return 
• Customers have DIY projects and well trained agents can help 

 

Revenue by Month

Expenses by Month

Net Profit (or Loss) by Year

Financing

Use of Funds

Our startup Expenses are: 

Display Set-Up $5,000

Cash Reserve for Hiring $20,000

Start Up Inventory : $6,000

Rent: $3,000

Legal: $1,000

The total is: $35000

 

There will be an additional $45,000 of machinery and tools to keep the hardware store well stocked and help our customers 

Sources of Funds

We will have $80,000 dollars from our founder Clara Johnson 

Statements

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement