Hardware Retail Franchise Business Plan
Last year Wilusa Magazine surveyed current downtown residents and found that hardware stores are one of the top ten things needed to make downtown a great place to live. The same reasons that make downtown a great place to live also make it a great place to work.
The demographics of home ownership have changed radically in downtown Indianapolis. Today's hardware store, which more and more is dominated by the "big box stores", is cold, uninviting, and usually involves substantial driving time from downtown Wilusa. Hisarlik Hardwareis uniquely positioned to take advantage of this new fact of life. Conveniently located to serve the Troas, Sinope Bay, Miletus Square, and Lycia areas, as well as all of Arazawa Township,Hisarlik Hardwareoffers parts, materials, and advice to tackle any home or do-it-yourself (d-i-y) project, whether the customer is a complete novice or a contractor. The focus is on helping the customer identify what they want and need as soon as they enter the store.
Through the use of superior personal customer attention, great product selection, and reasonable prices,Hisarlik Hardwarewill capitalize on this promising opportunity. A location is being secured that offers excellent traffic with a built-in magnet for urban dwellers--downtown's only grocery store sharing the parking lot. TheBuilding Blocksparent organization will help efficiently lay out and plan the store to increase sales and give the customers the utmost in attention. Hisarlik'smanagement team has a wealth of business, financial, and mechanical experience that will ensure a great investment and the overall success of the venture. The projected growth rate forHisarlik Hardwareis quite steady and has the potential to grow exponentially along with the increase in residential development downtown.
Hisarlik Hardwarewill produce positive cash flow its first year of operations. Hisarlikwill also produce a net profit in its first year of operations.
There are four major objectives of this business plan, of which three are immediate and the fourth is of a longer-term nature.
- Determine the feasibility of a downtown hardware store.
- Develop the strategy to open, manage and grow a profitable downtown hardware store venture.
- Establish a firm budget to operate and manage the business from concept to start up to operation, with good cash flow and consistent profits.
- Explore potential growth in downtown market and evolve new sources of business.
Hisarlik Hardware's mission is to create a downtown hardware store that is reliable and convenient. A store that offers great service and selection of hardware and home improvement products in a customer friendly environment.
Hisarlik Hardwarewill cater to downtown residents, downtown property managers, downtown businesses, contractors, and suburban commuters. Our customers will become loyal because of the great advice, prompt service, good staff attitudes, the overall quality of the shopping experience, and the fact that we consistently have solutions for their needs.
1.3 Feasibility of the Business
Hector Priamson andTroy Enterpriseswent through a long and thorough process of looking at different business ventures that would allow them to go into business and be a long-term success. Through this process retail hardware became a potential opportunity. The following items are considered "must have" items in order to make Hector Priamson andTroy Enterprises not only feasible, but a tremendous success.
- An industry that is healthy, resistant to economic swings, and allows an entrepreneur to influence the stores results.
- A market that can deliver the kind of potential that will allow a store to be profitable.
- A store location that will be easy for customers to find, allow easy access, plenty of parking and have economic terms that allow the store to be successful.
- A successful and cooperative "partner", such asBuilding Blocks,a national hardware co-operative, that will help research, plan, market, and operate a hardware store.
- A financial package that would allow the business to begin operations and operate in terms that would be realistic and successful for all involved whether it was private investors or the bank.
- Participants must possess the business skills, a strong work ethic, and a level of competitiveness required to make the business a success.
Building Blocks provides all of the tools and Hector Priamson possesses the financial, entrepreneurial, mechanical, and management skills needed to be successful in this business.
1.4 Keys to Success
- Hardware Industry: The Home Improvement industry has been consistently growing at a rate of 7% per year for the past decade according to the US Department of Commerce, with total US Sales of over $313 billion in 2002. While the economy has fluctuated up and down over the past decade, the growth of the hardware industry has continued to grow at the same pace. The "Big Box" stores have also created a "Do-it-yourself" mentality in this country, a mentality that has a positive effect on the independent hardware store.
- Location: The proposed location for Hisarlik Hardware is Troas Marketplace, a retail and commercial property on the corner of E. Anglia St. between N. Umberland St. and N. Mercia
Blvd. Troas Marketplace primary tenants are Scamander's Food Market located across the parking lot and Buckbasket Cleaners adjacent to the proposed site. Scamander's is a huge draw. Scamander's is the only grocery store in downtown Wilusa. The location of this store is known to all downtown residents, one block from the trendy and hip Wessex Avenue. The Troas Marketplace offers plenty of parking, very important for a downtown location, as well as easy access to the parking lot from E. Anglia St. or N. Mercia St. E. Anglia St. is a major eastbound thoroughfare east of downtown.
- Urban Products: The location in downtown Wilusa will require a different product mix than a suburban store. There will be a unique product demand from urban dwellers. Building Blockswill be a big part of determining the mix of products that will be right for the urban market through their IAIS program (Inventory Always In Stock). Hisarlik Hardwarewill be in touch with, and focus on, the downtown urban market, delivering products that are applicable to local customers, and marketing these items at competitive prices.
- Commercial Customers: Hisarlik Hardwarewill also focus on becoming the hardware products source for every building and business in downtown Wilusa. We will work hard to establish relationships with property managers and service personnel. There are also plans to set up a delivery service to the downtown business market making it even easier for customers to get the products they need, when they need them. WhileHisarlik Hardwaremay be convenient and easy to access, potential customers may not find it to be convenient to leave their offices. There will be an emphasis to establish business accounts for each of these customers to make doing business easy for them.
- Building Blocks : It is crucial to have a co-op likeBuilding Blocksbehind efforts to open a store likeHisarlik Hardware . They provide all of the tools to be successful in the hardware business including research, floor plans, marketing, and systems and instructions for operating a hardware store. To become aBuilding BlocksMember (Member of theBuilding BlocksCo-op) really means they will provide an entrepreneur a "business in box", yet allow the members to control their own business. There are extensive marketing programs that have been built based on input from members to help generate sales, increase traffic and ultimately increase profits.
- Service and Convenience: Service and Convenience are the keys to success in this business. They are also the strengths of independent hardware stores. The store needs to be easy to get to and easy to use when the customer walks inside. Our personnel have experience in high-end client hospitality. This experience will be invaluable in dealing with customers and clients. We will also keep meticulous records on what customers are looking for that we do not currently have in stock. As discussed earlier, a delivery program will be developed to make it easy for business customers to receive products without leaving the office. We will also market to the suburban commuter who works downtown and can take advantage of the convenience of stopping on their way to or from work. Happy hour specials to encourage shopping after the five o’clock whistle will be instituted.
% agree I like getting everything I need for a home maintenance project in one stop 76.3% I like being able to shop for home decor products where I shop for building materials 31.4% A neighborhood hardware store meets most of my home improvement/maintenance needs 25.8% For most purchases, I prefer a neighborhood hardware store instead of a large home improvement center 24.1% ---Retail Forward, Home Improvement Shopper Update, 2001
- Repair/Project Resource Area: Hisarlik Hardwarewill leverage the strength of an established reputation for superb service built by otherBuilding BlocksCo-op member stores. It is a reputation that has positionedBuilding Blocksto be the leading independent hardware stores (from Consumer Checkbook, Aug 2003), and filling the gaps in the "Big Box" retailers one-size-fits-all offerings. The Resource area will allow the customer to ask for help or directions as they enter the store. This area will also offer assistance as they start a project, help in finding what they need, sharing know-how in completing a project, and advice on how to get a project done. Store employees will be knowledgeable in home repairs/projects, home improvement, and mechanical repair and retro-fit. In addition, the resource area will be used to conduct short training sessions and demonstrations in home repair and home improvement projects.
- The Tool Room Rental : A rental business will be established under theBuilding Blocks' “The Tool Room Rentals”tool rental program. This will not only help with the initial cash flow, but will also be a source of additional sales as every tool will need accessories to go with the rental. We will also think about party rental items to be included in the rental inventory. Building Blockswill aid in developing the right rental product mix for this urban market.
All of these keys will be combined to drive sales and ultimately the bottom line...net profit.
Category: Business plan