1. SUMMARY OF THE PROJECT
The purpose of this business plan is to open a shoe store for the retail sale of shoes and related products in a city with a population of more than 1 million people. The main products of the store are men's and women's shoes, mainly of domestic manufacturers. The store serves the mid-price segment and the below-average segment.
The target audience of the shoe store is retail buyers, 75% of which are female population of the city aged 18 to 50 years.
Shoes and clothes are one of the most popular products. A monthly average consumer spends 6.5 thousand rubles on shoes and clothes. The peculiarity of the Russian climate forces to change shoes depending on the season, so the shoe sales business will never lose its relevance. The main advantages of opening a shoe store are the demand for goods and a high level of profit, which is ensured by a trade margin of 100-300%.
To implement the project, a retail space is leased in a residential area of the city on a busy street. The total area is 55 square meters. m., rent - 40, 000 rubles / month. Advantages of the location: saving on the lease of retail space, remoteness from competitors, proximity to stops and location in the street retail area.
The volume of starting investments is 1, 460, 000 rubles. Investment costs are directed to the purchase of equipment, the initial purchase of goods, the organization of retail space, advertising promotion of the company and the formation of a working capital fund until the project returns to payback. The bulk of the required investment falls on the purchase of goods - 55%. Own funds will be used to implement the project.
Financial calculations take into account all the income and expenses of a shoe store; the planning horizon is 3 years. After this period, expansion of the business is expected. According to the calculations, the initial investment will pay off after 11 months of operation. Reaching the planned sales volume is planned for the 6th month of work. Net profit will be 210, 000 rubles / month. The return on sales in the first year of operation will be 18%.
The financial plan takes into account the optimistic sales forecast, which can be expected due to the favorable location of the store and the high traffic of potential buyers.
2. DESCRIPTION OF SHOE INDUSTRY
Clothing and shoes are some of the most sought after goods, second only to food. A feature of the clothing and footwear market is that it is constantly undergoing changes. This is due to the development of the fashion industry, which introduces new trends, thereby forming a high demand for goods from this category.
Every year, the number of clothing and footwear stores is growing, sales are growing, which makes this segment of the business quite attractive. Even during a crisis, Russians are not always ready to save on this type of product. Only 30% of respondents admitted that they reduced the cost of clothes and shoes. On average, Russians spend 6.5 thousand rubles a month on clothes and shoes. The average consumer buys one pair every 1-1.5 months and has a minimum of 4 types of shoes. Features of climatic conditions in Russia force to change shoes depending on the season - i.e. four (at least two) times a year. Thus, the shoe business will never lose its relevance.
Figure 1 shows the dynamics of the market for clothes, shoes and accessories. The decrease in market volumes in 2015 gave way to a slight increase in 2016. The positive trend is expected to continue.
Figure 1. Volume and dynamics of the market of clothes, shoes and accessories, trillion. rub. (source: Fashion Consulting Group)
Nevertheless, the crisis affected the Russian shoe market. In 2015-2016, the cumulative drop in market volume was 9.6%. In 2016, the volume of Russian shoe retail dropped to the level of 1260.8 billion rubles. in value terms and 270.3 million pairs - in kind. During this period, the average level of shoe consumption was comparable with the level of physical wear, namely 2.5 pairs per year per person - which is the minimum indicator for the shoe market. Before the crisis, this figure was 2.8 pairs per year. For comparison, in the EU there are 5 pairs per person per year, and in the USA - on average 7 pairs per person. According to experts, in Russia this figure should be at least five, due to the harsh climate and variable weather. Based on this, at the moment, shoe consumption is two times lower than recommended.
The middle price segment turned out to be the most sensitive to the crisis. Due to the growth in the exchange rate, products went up by 30-35%, which reduced sales. At the same time, the flow of customers in large shoe chains decreased by 20-30%.
In 2017, the market revived and felt more confident. According to Fashion Consulting Group forecasts, in 2017, the volume of shoe retail in Russia may increase by 5-10% in rubles a year due to the accumulated effect of deferred demand.
Thus, the main trends in shoe retail in Russia are:
- a shift in demand to a cheaper segment, which is due to an increase in the cost of shoes and a decrease in the income of Russians;
- reorientation of shoe stores to more universal shoe models;
- market consolidation, strengthening the position of large shoe chains and the withdrawal of small players from the market;
- Strengthening the market for Russian-made products, which is being strengthened in the context of the price advantage obtained as a result of the devaluation of the ruble and a shift in demand towards inexpensive, versatile shoes;
- an active process of import substitution. Shoe imports are declining: while in the pre-crisis period, the share of imports in the domestic shoe market was 80%, today it is less than 70%. In the next two years, the ratio of Russian and imported shoes on the market is expected to be 35% and 65%, respectively;
- Today the portrait of a shoe store customer contains the following characteristics: rationalism, reduced frequency of purchases, adherence to the prevailing idea of the quality of consumed purchases.
In a period of reduction in the share of players in the market, there is an opportunity to gain a foothold in an industry that is gradually recovering. Thus, the opening of a shoe store can become a promising business, especially if the main trends of shoe retail are taken into account. A crisis is a good opportunity to start a business when competition is lower.
Retail sales of shoes is a relevant and versatile business. Table 1 of the business plan reflects the key advantages and disadvantages of a shoe store that should be considered when planning a shoe trade business.
Table 1. Advantages and disadvantages of opening a shoe store
Benefits | disadvantages |
- demand for goods; - high level of profitability; - lack of need for special permits and licenses; - high level of profit | - high initial investment; - high level of competition in the market; - the dependence of demand for goods on the economic situation in the country |
All these conditions should be considered when planning a shoe retail business. Also, before setting up a shoe retail business, you should study the niche in detail. When planning, you must consider the features of the shoe business:
- The greatest demand is for seasonal women's shoes, the sales share of which is about 60-70% of the total store turnover; about 20% of the products sold are for shoes for children, and the rest is for men's and non-seasonal shoes. The sale of related products (accessories, shoe care products, etc.) does not exceed 5% of sales;
- every season it is necessary to update the collection of shoes, take into account the changing fashion trends and have a full range of sizes available;
- shoe sales have a pronounced seasonality. The peak of sales is in spring and autumn. This should be taken into account when planning sales and forming the assortment of store products;
- shops of highly specialized shoes (sports, designer, etc.) are advisable to open only in cities with a population of more than 1 million people. The exception is children's shoe stores, which are highly profitable, regardless of the population of the city.
Thus, a shoe store is a profitable type of business, but in order for it to function and bring a stable income, it is necessary to correctly draw up a business plan. It should reflect the following questions: how to open a shoe store from scratch, features of the shoe business, how much it costs to open a shoe store, how to choose the assortment of a shoe store, what risks should be taken into account when doing business and how much you can earn from selling shoes.
3. DESCRIPTION OF GOODS SHOES STORE
This business plan envisages the opening of a shoe store with the goal of retailing shoes and related products. The main products of the store are men's and women's shoes, mainly of domestic manufacturers. The store serves the mid-price segment and the below-average segment. This choice is due to a shift in consumer demand towards more budget shoes. At the same time, consumers make high demands on products in terms of price and quality of shoes. In order to satisfy demand, the assortment of the store is mainly formed from domestic products, the cost of which is lower than imported.
The product range is a key parameter in planning the opening of a shoe store. Before forming an assortment, a thorough analysis of the market, suppliers and assortment of competing stores should be carried out. This will determine consumer demand and select products in such a way as to create a unique offer on the market. A competent approach to the selection of assortment will help to avoid unnecessary inventory, reduce the likelihood of illiquid assets, increase sales, create competitive advantages and attract a potential buyer.
The assortment needs to be formed based on the needs and preferences of the client, and also take into account fashion trends and the climate of the region. The assortment of the store is also determined taking into account the size of the store. The main condition in this case is the full filling of shop windows, but the absence of a pile of goods. Half-empty stands can scare away customers, and in cluttered display cases it is very difficult to navigate. Do not forget about related products (shoe care products, socks, belts, slippers, etc.) - they allow you to increase sales by 5-7%.
The economic crisis affected not only the level of sales of shoe stores, but also their range. Today, shoe stores are striving to optimize their assortment, able to adapt to new conditions and meet the needs of customers. What should be the assortment of a shoe store in a crisis? Analysts note several factors that can improve shoe sales in times of crisis:
- environmental friendliness. Fashion for all natural and healthy lifestyles did not bypass the shoe segment. Many buyers take care of their body and make high demands on shoes. This category is represented by models with innovative technologies (for example, waterproof coating), sports and orthopedic shoes;
- shoes with anatomical features. The number of people with some non-standard anatomical characteristics that complicate the process of selecting comfortable shoes is growing every year. For such buyers, the main criterion when buying shoes is its convenience, therefore, the assortment should include shoes of non-standard sizes, shoes with anatomical insoles, etc .;
- fashion footwear. Shoes belong to the category of goods that are highly susceptible to fashion. Therefore, when forming the assortment, trends should be taken into account. It is necessary to diversify the range with bright, fashionable models that can attract the attention of demanding customers. However, the basis of the assortment should be classic models. In the event that part of the assortment is not sold, it will be much easier to sell classic shoes in the future rather than products that have gone out of fashion.
Thus, the right assortment policy will attract customers and maintain a position in the business even during the economic crisis. The most important thing in the retail sale of shoes - to have sufficient flexibility to quickly adapt to changing market trends.
It is planned that the assortment of this store will be represented by a wide range of shoes from different materials (leatherette, genuine leather, textiles, rubber). At the same time, emphasis will be placed on classic, multifunctional shoes. The purchase of goods will require an average of 700 thousand to 1 million rubles.
The format of customer service in the store is individual.
Thus, the project provides for the opening of a shoe store with the following competitive advantages:
- variety of assortment. It is planned that the assortment line will be presented not only classic but also fashionable models, which will satisfy the demand of different categories of customers;
- the presence in the assortment of environmentally friendly and anatomical shoes;
- price policy. A large share of the assortment will be budget goods, presented in various versions;
- excellent service, polite and competent consultants;
- customer loyalty system. In this store, a discount system of discounts and regular holding of various promotions will be provided;
- the assortment is mainly represented by domestic products, which guarantee high quality at affordable prices.
4. SHOES AND SHOES MARKETING
The target audience of the shoe store is retail buyers, 75% of which are female population of the city aged 18 to 50 years. Portrait of a consumer: average income, prefers high-quality, comfortable, functional shoes.
In accordance with a specific target audience, an advertising strategy is formed. Shoe store advertising can be divided into two types - passive and active. Passive advertising includes signs, banners, pillars, etc. Active advertising involves the distribution of leaflets, distribution of business cards, advertising on radio and television, as well as on the Internet.
Since the competition in the segment is quite large, it is necessary to carefully consider an advertising strategy. The following tools can be used to promote the market:
1) A decorated storefront that will attract the attention of potential customers. The results of market research suggest that 70% of customers go to the store because they are attracted to a beautifully designed showcase. The cost of window dressing is an average of 25, 000 rubles. The most interesting models that can attract attention and attract new customers to the store should be placed on the window.
2) Competent design of the trading floor. According to statistics, it is women who are the main audience of shoe stores, and their choice is influenced by the aesthetic design of the store. Today, every store should have a pleasant interior that will arouse the interest of customers. It is also necessary to pay attention to the location of the goods - each position should be visible, it should be conveniently accessible so that the buyer can carefully examine the goods. In shoe merchandising, there are several tricks to consider:
- products that may be of most interest to buyers should be placed to the right of the entrance. As practice shows, the vast majority of buyers (90%), when entering a store, first of all examine the windows on the right. Therefore, it is better to place the most popular models on the right side. It should also be noted that it is better to place women's shoes on the right, and men's shoes on the left;
- shelving should not be very high, so that the buyer was convenient to choose the product of interest;
- shoes should be placed in groups, in accordance with certain signs. Shoe merchandising involves structuring the placement of shoes on shelves by style, functionality, color, price, brands, size, season, size, accessories (men's, women's, children's). Separately, regardless of the chosen classification of shoes, it is customary to highlight a new collection;
- the display of shoes, regardless of the selected principle, should change at least 1 time in two weeks;
- the shoes should be well lit, but there should be no direct effect of lighting devices on the shoes, since this entails the effect of heating the shoes, which can lead to damage to the goods.
3) You can start promoting the store before it opens. This will cause interest in potential buyers in advance. Distribution of flyers with a discount coupon, advertising on the radio, on the Internet can serve as such an advertisement.
4) The distribution of promotional materials, information about promotions and sales is aimed at attracting the attention of consumers.
5) Event marketing. It is advisable to coincide with the discount campaign on the day of the opening of the store or offer the first visitors a loyalty card. You can distribute information about the opening in the media or give out flyers with an invitation to the store.
6) Creating accounts on social networks where photos of the store’s assortment will be posted, as well as information on discounts and promotions.
7) Outdoor advertising - placement of a bright advertising sign that attracts attention.
An indicative plan for promoting a shoe store is presented in table 2. In accordance with the calculations, it is planned to spend 60, 000 rubles on store promotion. Most of the promotional activities are planned for the first months of the opening of the shoe store.
Table 2. Advertising budget shoe store
Event | Description | Cost, RUB |
Print Distribution | For this, it is planned to create advertising material (flyers / booklets) and distribute it in places where the target audience is concentrated. Costs include the costs of creating and printing flyers, as well as salaries to promoters. The promotional material contains a 10% discount coupon for the first purchase | 12, 000 |
Outdoor advertising | To attract the attention of potential customers, it is necessary to place a bright sign. Costs include signage and installation | 15, 000 |
Social Media Advertising | Creating an account on the social network Instagram and its promotion among the target audience | 8, 000 |
Window dressing | Costs include expenses for payment for the work of the designer and materials for window dressing | 25, 000 |
Merchandising design of the trading floor | You can pay for one-time merchandiser services, but in this project it is planned to hire a specialist who will constantly perform the functions of a merchandiser in the store | - |
Total: | 60 000 rub. | |
An active marketing strategy allows you to speed up the payback process of funds invested in opening a store.
Calculating the income of a shoe store is quite difficult, because many factors must be taken into account (season, product margin, etc.). The margin on the product can be from 100% to 300%. In this project, the income of the shoe store is calculated based on the cost of the purchased goods (taking into account the average mark-up of 200%) and the monthly sales rate of 35% of the assortment. Then the store’s monthly income will be: 800, 000 * 3 * 0.35 = 840, 000 (rubles). To reach the planned sales volume is planned for 5-6 months of work.
It will take an average of 3 to 6 months to advance the store and reach the desired sales volumes - during this time, buyers have time to learn and get used to the new outlet. When planning the volume of sales, a certain seasonality of sales should be taken into account - the peak of sales falls in the spring and autumn months, and the drop in sales - in the winter and summer.
5. SHOES PRODUCTION PLAN
The project implementation includes the following stages:
1) Registration of a business. No special permissions are required to conduct shoe retailing. To open a shoe store, you will need to collect a package of documents, which includes: a list of products approved by Rospotrebnadzor, sanitary and epidemiological conclusion from Rospotrebnadzor, permission from the fire inspection, regulatory documents for the store. Also required are contracts for the export of solid waste, disinsection and deratization of the premises.
To conduct business, an LLC is registered with a simplified taxation system (“income minus expenses” at a rate of 15%). Type of activity according to OKVED-2:
47.72. Retail sale of footwear and leather goods in specialized stores.
When planning the opening of a shoe store, the question often arises when to start a business. The main recommendation in this case is not to plan the opening in January, when the demand for shoes is minimal. Следует рассматривать открытие обувного магазина во время смены сезона осень-весна.
2) Выбор месторасположения. Как для любого заведения, занимающегося розничной торговлей, параметр расположения обувного магазина играет важную роль. Выгодное расположение определяет 70% успешности торговой точки.
Оценка местоположения магазина учитывает такие компоненты, как характеристика площади, простота парковки, интенсивность пешеходного потока, заметность и примечательность, соседство с аналогичными предприятиями.
Наиболее подходящими для обувного магазина считается расположение поблизости от супермаркетов, продуктовых магазинов, крупных аптек и остановок транспорта.
Для обувного магазина может подойти как торгово-развлекательный центр, так и точка на оживленной улице в спальном районе или центральной части города. Преимущества размещения магазина в торговом центре: высокая проходимость, сосредоточение целевой аудитории. Преимущества размещения магазина в спальном районе: экономия на аренде торговой площади, меньшая концентрация конкурентов.
Магазин должен находиться в людном месте, с хорошим потоком клиентов, должен просматриваться с разных точек, и привлекать внимание прохожих.
Чтобы обеспечить хорошую выкладку товара необходимо использовать помещение для магазина обуви площадью не менее 40 кв.м. Кроме того следует предусмотреть подсобные помещения для персонала и склад. Таким образом, общая площадь помещения под обувной магазин должна составлять не менее 55 кв.м.
При выборе торгового помещения необходимо обратить внимание на планировку - торговый зал должен быть квадратной или прямоугольной формы, без лишних изгибов – это позволит удобнее разместить витрины и максимально эффективно использовать имеющееся пространство.
Также желательно, чтобы помещение не требовало серьезного ремонта или перепланировки, что позволит снизить расходы и ускорить процесс подготовки магазина к открытию.
В данном бизнес-плане предусматривается аренда помещения в спальном районе на оживленной улице. Расположение выгодно, поскольку охватывает широкий круг потребителей, которыми в первую очередь являются жители спального района. Удаленность от конкурентов, более низкая арендная плата, близость к остановкам и расположение в зоне стрит-ритейла являются преимуществами выбранной торговой точки. Аренда торгового помещения общей площадью 55 кв.м. в среднем стоит около 40000 рублей в месяц. Планируется, что 40 кв.м. будет выделено для торгового зала, 9 кв.м. – для склада, а 6 кв.м. – для технических помещений.
3) Оборудование торговой площади. Торговое пространство должно быть хорошо освещенным и иметь приятный интерьер, который бы выгодно подчеркивал товар. На ремонт и декор помещения закладывается сумма в 50000 рублей.
Основным элементом в оформлении обувного магазина являются торговое оборудование – стеллажи, витрины, кассовый прилавок, кассовый аппарат, а также пуфы и зеркала. При определении количества необходимого торгового оборудования, необходимо опираться на объем товара. Его не рекомендуется располагать слишком близко друг к другу, чтобы потенциальный покупатель мог беспрепятственно разглядеть каждый образец. Наиболее популярные модели следует располагать на самых видных местах витрины.В таблице 3 приведены основные затраты на оборудование, которые составляют 245 000 рублей.
Таблица 3. Затраты на оборудование
No. | Name | Цена, руб. | Кол-во, шт. | Общая стоимость, руб. |
one | Shelving | 10, 000 | four | 40000 |
2 | Пристеновая витрина | 40000 | 2 | 80, 000 |
3 | Mirrors | 5000 | 6 | 30000 |
four | Пуфы | 4000 | 6 | 24000 |
five | Полки и стеллажи для аксессуаров | - | - | 10, 000 |
6 | Прилавок кассовый | 8000 | one | 8000 |
7 | Кассовый аппарат | 10, 000 | one | 10, 000 |
eight | Мобильный терминал для оплаты банковскими картами | 12000 | one | 12000 |
9 | Охранно-пожарная сигнализация | 15, 000 | one | 15, 000 |
ten | Стеллаж для склада | 3000 | 2 | 6000 |
eleven | Other | - | - | 10, 000 |
ИТОГО: | 245 000 ₽ | |||
4) Поиск поставщиков и закупка товара. Поставщиков следует искать лично, посещая оптовые базы города, либо через интернет. Первый способ удобен тем, что при личной беседе проще договориться о партнерских условиях; второй – тем, что можно сэкономить на транспортных расходах, охватить широкий круг потенциальных партнеров, найти более выгодные условия и заключить договора с поставщиками, не представленными на местном рынке. С поставщиками рекомендуется использовать смешанный способ работы: часть товаров выкупать сразу, а часть брать на реализацию.
Установить сотрудничество с поставщиками необходимо на начальном этапе открытия магазина. В качестве поставщиков предполагаются обувные фабрики. При этом необходимо работать с несколькими поставщиками, чтобы избежать срывов поставок и невыполнения сроков.
Определившись с поставщиками, необходимо закупить товар для магазина. Планируется, что на формирование первоначального ассортимента потребуется около 800000 рублей. Исходя из специфики спроса и условий поставщиков, необходимо будет производить дозакупку товара. Главное в этом вопросе – правильно рассчитать требуемый объем товаров, чтобы разнообразить ассортимент, но исключить перенасыщение товарных полок.
5) Подбор персонала. Основным персоналом в магазине являются продавцы-консультанты. Именно от них во многом зависит успех торговли.
Портрет продавца-консультанта: женщина среднего возраста, улыбчивая и вежливая, разбирающаяся в модных тенденциях обуви и знающая характеристики ассортимента, умеющая в понятной форме донести информацию до покупателя. Практика показывает, что именно такой тип продавцов вызывает наибольшее доверие у среднестатистического покупателя. Ключевые критерии при подборе персонала – коммуникабельность, ответственность, вежливость, умение работать с людьми. Перед тем, как приступить к работе, продавцы должны пройти обучение, ознакомившись с ассортиментом продукции, ее характеристикой и технологией продаж. Продавец-консультант обязан знать ассортимент продукции и фактур ткани, а также основы организации торгового процесса. Также следует предусмотреть должность кассира. Для обувного магазина потребуется четыре продавца-консультанта и два кассира. Предусматривается посменный график работы, в каждой смене работает один продавец-консультант и один кассир.
Также планируется нанять мерчендайзера на должность старшего менеджера, который будет выполнять функцию специалиста по закупке товаров. Вспомогательный персонал (уборщицу и бухгалтера) планируется взять на аутсорсинг.
6. ОРГАНИЗАЦИОННЫЙ ПЛАН МАГАЗИНА ОБУВИ
Подготовительный этап длится около двух месяцев, в течение которых предусмотрено прохождение процедур регистрации, налаживание партнерских связей с поставщиками, поиск подходящего помещения, подбор персонала, закупка оборудования и товара, а также оформление торгового помещения.
В данном проекте предприниматель выполняет основные функции управленца – проходит все регистрационные процедуры, занимается подбором персонала, ведет переговоры с арендодателями и поставщиками, координирует первую закупку товара.
Для осуществления торгового процесса в магазине работают продавец-консультант и кассир. Поскольку магазин работает ежедневно, то следует установить посменный график работы 2/2.
График работы обувного магазина – с 10:00 до 21:00. Исходя из этих условий, формируется штатное расписание.
Таким образом, полный штат состоит из 10 человек, а общий фонд оплаты труда составляет 250 900 рублей.
Table 4. Staffing and payroll
Position | Salary, RUB | Number of people | PHOT, RUB | |
Administrative | ||||
one | Supervisor | 27000 | one | 27000 |
Торговый | ||||
2 | Старший продавец-мерчендайзер | 30000 | one | 30000 |
3 | Продавец-консультант (посменный график) | 21000 | four | 84000 |
four | Кассир (посменный график) | 18000 | 2 | 36000 |
Вспомогательный | ||||
five | Уборщица (аутсорсинг) | 6000 | one | 6000 |
6 | Бухгалтер (аутсорсинг) | 10, 000 | one | 10, 000 |
Total: | 193 000, 00 ₽ | |||
Social Security contributions: | 57 900, 00 ₽ | |||
Total deductions: | 250 900, 00 ₽ | |||
7. ФИНАНСОВЫЙ ПЛАН МАГАЗИНА ОБУВИ
Финансовый план учитывает все доходы и расходы обувного магазина, горизонт планирования составляет 3 года. По окончании этого периода планируется расширение бизнеса и открытие второй точки продаж.
To start a project, you need to calculate the amount of initial investment. To do this, you need to determine the costs of acquiring equipment, the initial purchase of goods, advertising promotion and the formation of working capital, which will cover the losses of the initial periods. The initial investment for opening a shoe store is 1, 460, 000 rubles. The bulk of the required investments falls on inventories - their share is 55%; 17% accounted for working capital, 17% for the purchase of equipment, and the remaining 11% for advertising, business registration and the arrangement of retail space. The project is funded by equity. The main items of the initial investment are shown in table 5.
Table 5. Investment costs
Name | Amount, rub. | |||
The property | ||||
one | 1 month rent | 40, 000 | ||
2 | Room repair | 50, 000 | ||
Equipment | ||||
3 | Set of shop equipment | 245000 | ||
Intangible assets | ||||
four | Starting advertising campaign | 60, 000 | ||
five | Registration of business, obtaining permits | 15, 000 | ||
Current assets | ||||
6 | Purchase of goods | 800, 000 | ||
7 | Current assets | 250000 | ||
Total: | 1 460 000₽ | |||
Variable costs consist of the costs of acquiring goods and transporting them. To simplify financial calculations, the value of variable costs is calculated based on a fixed trade margin of 200%.
The fixed costs of a shoe store consist of rents, utility bills, payroll, advertising costs, and depreciation. The amount of depreciation is determined by the linear method, based on the useful life of fixed assets of 5 years. Fixed costs also include tax deductions, which are not presented in this table, since their amount is not fixed, but depends on the volume of revenue.
Table 6. Fixed costs
Name | Amount in months, rub. | |
one | Rent | 40, 000 |
2 | Advertising | 6000 |
3 | Communal payments | 4000 |
four | Depreciation | 4100 |
five | Payroll deductions | 295100 |
6 | Other | 7000 |
Total: | 356200 |
Thus, fixed monthly expenses of 356, 200 rubles were determined.
8. EVALUATION OF SHOES STORE EFFICIENCY
The payback period of a shoe store with an initial investment of 1, 460, 000 rubles is 11 months. Net monthly profit upon reaching planned sales volumes will be about 210, 000 rubles. Reaching the planned sales volume is planned for the 6th month of work. The annual net profit for the first year of operation will be about 1, 520, 000 rubles.
The return on sales in the first year of operation will be 18%. The return on investment ratio is 12.4%, and the internal rate of return exceeds the discount rate and is 9.8%. The net present value is positive and amounts to 1, 101, 000 rubles, which indicates the investment attractiveness of the project.
The financial plan of the shoe store takes into account the optimistic sales forecast, which can be expected due to the favorable location of the store and the high traffic of potential buyers.
The integrated project performance indicators and financial plan are presented in Appendix 1.
9. POSSIBLE RISKS OF SHOES STORE
To assess the risk component of a shoe store, an analysis of external and internal factors is necessary. The specifics of the shoe trading business determines the following business risks:
- increase in purchase prices for goods, unscrupulous suppliers. In the first case, there is a risk of increased costs and, as a consequence, the selling price, which can negatively affect demand. In the second case, the risk is associated with interruptions in the trading process due to a shortage of goods. It is possible to reduce the likelihood of these threats with the right choice of suppliers and the inclusion in the contract of all necessary conditions that provide for the liability of the supplier if they are violated;
- the exit of goods from fashion, their irrelevance. Shoes are a specific product that quickly becomes irrelevant. This risk entails a reduction in purchasing value, freezing of positions and, as a result, a decrease in the overall profitability of the business. To minimize this risk, it is necessary to carefully formulate the assortment, monitor various sources of information, and also conduct regular sales in order to sell the remaining goods;
- seasonal decline in sales. It is possible to mitigate the risk with an effective advertising policy and holding various promotions to further attract the audience, discounts, special offers;
- refusal to lease commercial premises or increase the cost of rent. Loss of space threatens with losses: firstly, it is the cost of moving equipment; secondly, the move will take some time, during which the store will not function and, therefore, will not make a profit; thirdly, the loss of the usual place for customers and the additional cost of advertising to promote a new place. All these consequences can entail significant losses. To reduce this risk, it is necessary to conclude a long-term lease agreement and carefully select the landlord. In the future, it is worth considering the possibility of acquiring your own retail space;
- insufficient level of demand. This risk is one of the most probable and can arise both because of the low solvency of demand and because of high distribution costs. It is possible to reduce the risk with careful planning of the store’s activities and financial results, the competent formation of the assortment and the choice of retail space, the holding of various promotions and discounts, the encouragement of repeat purchases, flexible pricing;
- the reaction of competitors. Since the shoe market is quite saturated and the competition is high (in particular, due to large retailers), the behavior of competitors can have a strong influence. To minimize it, you need to create your own customer base, constantly monitor the market, have a customer loyalty program, create competitive advantages and create unique trading offers;
- problems with staff, which implies low qualifications, staff turnover, lack of employee motivation. It is easiest to reduce this risk at the stage of personnel selection, hiring employees who meet all the requirements. It is also worth considering the advanced training of employees and their bonus motivation;
- decrease in the store’s reputation in the circle of the target audience in case of errors in management or a decrease in the quality of services. It is possible to mitigate the risk with constant monitoring of the quality of goods and services, receiving feedback from customers of the store and taking corrective measures.
Evgenia Yurkina(c) www.clogicsecure.com - a portal to small business business plans and guides
08/18/2019