Tableware business plan

* The calculations use the average data for the World

1. SUMMARY OF THE PROJECT

The aim of the project is to open a tableware store in a city with a population of more than 1 million people for the retail sale of tableware and household items. A feature of the project is long-term cooperation with private craftsmen and the sale of designer dishes, which is a competitive advantage.

For the implementation of the project, a room of 50 m2 located in a shopping center is leased.

The target audience is the female population of the city aged 20-60 with an average income. The price segment is medium.

The volume of initial investment is 1 000 000 rubles. Investment costs are directed to the purchase of commercial equipment, the initial purchase of goods and the formation of working capital, which will cover the losses of the initial periods. The bulk of the required investment falls on inventories, which account for 50%. Own funds will be used to implement the project.

Financial calculations cover the five-year period of operation of the project. Forecasts of revenue and net profit were made based on a sales plan of 400 sales per month and an average check of 1, 500 rubles. In accordance with the calculations, the initial investment will pay off for 12 months of work. The return on sales in the first year of operation will be 9.4% with an industry average of 8%. Integrated indicators of project performance are presented in table 1.

Table 1. Key performance indicators of the project

Payback period (PP), months

6

Discount payback period (DPP), months

7

Net present value (NPV), rub.

1 691 289

Return on Investment (ARR), %

34.15

Internal rate of return (IRR), %

27.23

Profitability Index (PI)

1, 03

2. DESCRIPTION OF THE INDUSTRY AND COMPANY

Crockery is a consumer goods and is evaluated not only as a household item, but also as an element of decor. Demand for it always remains at a fairly high level for a number of reasons. Firstly, most dishes are rather fragile and easily beat; secondly, it is interconnected with the dynamics of real estate sales, since usually newcomers prefer to buy new dishes; thirdly, dishes and services are one of the most popular gift options; fourthly, dishes are influenced by fashion trends, so many consumers want to update it; fourthly, buyers spontaneously acquire dishes that they liked. To date, the market is represented by a variety of goods of various types of dishes and price categories, which can satisfy any demand.

The dynamics of the development of the market for dishes directly depends on the welfare of the population. According to statistics, household incomes against the background of negative GDP dynamics in 2015 decreased by 4% and continued to fall in 2016. The decrease in consumer activity has led to a decrease in the volume of retail sales of dishes in various market segments. It is possible to maintain the sales level in the tableware market due to the intensity of discount promotions in retail stores. However, in 2016 there was an increase in the cost of dishes by 10%.

At the end of 2016, the volume of the tableware market in quantitative terms reached 1.47 billion pieces, demonstrating an increase of 3%. The last two years there has been a slight decline in the market, which is explained by a decrease in purchasing power and a decrease in imported products due to the exchange rate. Imports of dishes decreased in 2015 by 34%, and its share in the Russian market amounted to 46% (against 59% in 2014). Against this background, domestic manufacturers felt much more confident, which resulted in an increase in the production of dishes. So, the production of glassware in 2016 increased by 5.4%, porcelain - by 6%, while the production of ceramic dishes decreased by 3.4%.

To summarize, we can distinguish the following trends in the market of tableware in Russia:

- decrease in purchasing activity;

- the shift of customers between different price segments;

- reduction of imported products and import substitution policies;

- the growth of investment in this industry, which arose as a result of reduced competition from foreign suppliers;

- the departure of many sellers from the market;

- growth in sales of dishes in the segment of online commerce;

- a decrease in the profitability of the dishware business;

- the intensity of stocks in tableware retail to stimulate consumer demand;

- revision of assortment policy and reduction of product quality;

- reduction in the level of mark-ups for dishes.

Thus, there is a decline trend in the cookware market, which, according to analysts, should change to a positive trend during 2017.

Despite the negative market trends, this type of business is still quite in demand.

3. DESCRIPTION OF GOODS AND SERVICES

This project involves the opening of a cookware store for the retail sale of cookware and household items. The assortment of the store includes the following groups of goods: glass, porcelain, ceramics, cutlery, tableware, kitchen utensils, kitchen textiles and decor. The project provides for a multi-brand store format, which will best meet the changing demand of consumers and offer a wider range. The store will specialize only in retail.

The store will operate in a self-service format. As practice shows, such a system contributes to the growth of sales. Products in the store will be divided into categories: kitchen utensils, tableware (porcelain, ceramics, glass by segments) and kitchen textiles.

For the formation of the assortment, a thorough analysis of the manufacturers of dishes that are on the market should be carried out. A competent approach to the selection of the assortment will help to avoid unnecessary inventory, reduce the likelihood of illiquid assets and increase turnover.

When forming an assortment, the following recommendations should be considered:

- give preference to white dishes - this classic version is in greatest demand, because it is suitable for any interior and quite democratic in design;

- for the initial stage, the optimal number of suppliers is 4-5 brands;

- take into account the interest of buyers in a particular type of dishes: dishes from porcelain are most in demand, and recently the demand for glass dishes has been growing;

- the need for a variety of assortments of new products, catchy and colorful dishes. Its share in the assortment should be small, but such dishes usually attract the attention of buyers;

- the need for souvenirs, dishes for table setting and cooking - each of these segments during the year provides about a third of the income;

- In addition to well-known brands and classic cookware options, you can supplement the assortment with original and original goods made by private craftsmen. Today on the market there are many talented craftsmen who make designer dishes. Thanks to the sale of such products, you can declare the uniqueness of the range and stand out from the market.

To implement this project, the assortment has been compiled taking into account all the recommendations listed. For convenience, the entire range is structured by type of product. Table 2 shows a list of goods and manufacturers with whom you can establish cooperation.

Table 2. The planned assortment of the store dishes

Utensil Category

Description

List of manufacturers

China

Tea and coffee sets, lunch groups, serving plates, teapots, salad bowls, scissors, cups and saucers, mugs

Dulevo Porcelain Factory, Gzhel Porcelain Factory, Imperial Porcelain Factory, Kuban Porcelain, Wilmax, Twist, Claret, Lequn, ChanWave, Collage, Day, CraftWhite

Glassware

Glasses, sets for drinks, glasses, flower vases, jugs, fruit bowls, candy bowls

CrystalexCZ, Vellarti, PromSIZ, Experimental glass factory, May Day glass factory, Arcoroc, Mikasa, Luminarc, Simax

Ceramic and clay dishes

Mugs, plates, teapots, decanters, jugs

Skopinskaya art ceramics, Borisov ceramics, Dymov ceramics, Vyatka ceramics, Pskov potter

Cookware

Pots, heat-resistant dishes, pans, storage containers, cutlery

Aluminum Metallurg Rus, Neva Metal Crockery, Enamel, Don Strength, KMK, Katyusha, Demidov Plant, Pyrex, SanitetHandel, STEELEMAL, Rondell, Tramontina, Gipfel

Kitchen textiles

Tablecloths, towels, fabric napkins

Arloni, Toalla, Homequeen, DM Textiles, TM Domislav, Slavyanochka, Wellness, MonaLiza, Belarusian linen

Author's dishes

Plates, mugs, cutting boards

Claystreet, Klotis, Kukeramika, Kind shop

At the initial stage, it is planned to work with five manufacturers who have worked well in the market: Dulevo Porcelain Factory, Experimental Glass Factory, Pskov Potter, Aluminum Metallurg Rus, Belarusian Flax.

4. SALES AND MARKETING

The target audience of the tableware store is the female population of the city aged 20-60 with an average income. It is assumed that at the initial stage, the main buyers will be visitors to the shopping center that accidentally entered the store, where the outlet will be located. Over time, it is planned to form a customer base and store advertising.

To attract visitors to the store, a sound marketing strategy is needed. Before opening the store, you should place an ad on the outlet and think through event marketing. It is advisable to coincide the discount campaign on the opening day or to offer the first visitors a loyalty card. An interesting and original option for the opening action is to draw a certificate for a master class at the school of pottery. You can distribute information about the opening in the media or give out flyers with an invitation to the store. An effective advertising tool will be a decorated showcase that will attract the attention of potential customers. According to market research, 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. A bright sign will help to focus on the store. An advertising sign will cost around 15, 000, including installation.

Proper design of the trading floor is an important element of the marketing strategy. When placing products on trading shelves, the following principles of product display should be observed: dishes should be displayed systematically (taking into account manufacturers, colors, etc.) and without piling, which will reduce the perception of the assortment by the buyer.

You can also create accounts on social networks where the store’s goods, information on discounts and promotions will be posted. You can hold a campaign "circle" for repost - this will expand the audience of consumers. You can run the action "product of the week", offering customers to purchase a certain category of goods at a discount.

Another attraction tool is a unique offer, i.e. the presence in the store of a product / service that is not provided by competitors. This will make the consumer come to your store. For example, it can be handmade dishes, unusual dishes from different countries, etc.

This project provides for the following advertising tools:

- advertising sign - 15, 000 rubles;

- Creation of accounts in popular social networks and their promotion - 5000 rubles;

- an action with a drawing of a free certificate for a master class in pottery –1500 rubles;

- window dressing - 25, 000 rubles;

- distribution of leaflets with a 10% discount coupon - 3500 rubles.

Thus, the cost of a starting advertising campaign will amount to 50, 000 rubles.

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 sales volume one should take into account some seasonality of the dishware business - in the cold season they often buy utensils for tea and coffee, and in the summer months - utensils for cold drinks. During the New Year and spring holidays, sales volumes increase by 2-3 times, the greatest demand for giftware.

The planned sales volume is calculated based on the average check amount of 1, 500 rubles and the number of customers - 400 people per month. Thus, the average revenue will amount to 600, 000 rubles per month. To reach the declared sales volume is planned for the fourth month of the store.

5. PRODUCTION PLAN

The implementation of this project involves the following steps:

1) Registration of a business. No special permits are required for the retail trade of cookware. However, the dishes are included in the list of products subject to mandatory certification by decision of the State Standard. This should be considered when choosing suppliers of utensils.

To open a tableware store, you will need to collect a package of documents that includes a sanitary and epidemiological report from Rospotrebnadzor, permission from the fire inspection, and regulatory documents for the store.

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:

47.78 Other retail trade services in specialized stores.

2) The choice of location. As with any retail establishment, location parameter plays an important role. Assessing the location of the store takes into account such components as the characteristics of the area, ease of parking, foot traffic, visibility and noteworthiness, and proximity to similar enterprises. The required store area is at least 40 m2. For a store with a self-service system, an area of ​​at least 50 m2 is desirable. However, it all depends on the size of the store and the range.

This project provides for the rental of premises in a shopping and entertainment center. It is important that on its territory there is no analogue store, it reduces the level of competition. The advantage of this location is a continuous stream of potential buyers. The main disadvantage is the high rent. A retail area of ​​50 m2 costs on average about 50, 000 rubles.

3) Equipment for the retail space and the interior of the store. The interior of the store plays an important role in the perception of customers. The retail space should be bright and comfortable, imitating the home environment. When choosing the premises for the store, the criterion of suitability of the pavilion for starting work was taken into account, therefore, there are no repair costs. On the decor of the room you need 15, 000 rubles. In addition, you should purchase commercial equipment - shelving, display cases, cash register, cash register. Since the store operates in a self-service format, several racks will be required on which the goods will be placed. For the initial stage, one cash desk is equipped in the store, however, upon reaching the planned sales volume, a second cash desk will be installed. Table 3 shows the main equipment costs, which are 132, 000 rubles.

Table 3. Equipment costs

No.

Name

price, rub.

Quantity, pcs.

Total cost, rub.

one

Wall shelving

5000

eight

40, 000

2

Wall panel

6000

2

12000

3

Shelving island

7500

2

15, 000

four

Cash register counter

8000

one

7000

five

POS system with cash register

43000

one

43000

6

Fire alarm

15, 000

one

15, 000

TOTAL

132 000 ₽

4) Purchase of goods. Having decided on suppliers, you need to purchase goods for the store. Practice shows that 500, 000 rubles will be enough for a small cookware store to form the initial assortment. Based on the specifics of demand and the conditions of suppliers, it will be necessary to make an additional purchase of goods. The main thing in this matter is to correctly calculate the required volume of goods in order to diversify the assortment, but to exclude illiquid assets and oversaturation of goods shelves.

5) Recruitment. The main staff in the store are sales consultants. The success of trade largely depends on them. Portrait of a sales assistant: a middle-aged woman, smiling and polite, knowledgeable in tableware and able to convey information to the buyer in an understandable way. Practice shows that it is this type of seller that causes the greatest confidence among the average buyer. The key criteria in the selection of personnel are sociability, responsibility, courtesy, ability to work with people. For the initial phase of the store’s work, two sales assistants and two cashiers will be required. A shift schedule is foreseen; one shift sales assistant and a cashier work in each shift. The manager and accountant are assigned to the entrepreneur himself - this will save in the first months of work.

Before starting work, the staff must undergo training, having become familiar with the range of products, their characteristics and sales technology.

6. ORGANIZATIONAL PLAN

The preparatory phase lasts about two months, during which it is envisaged to go through registration procedures, establish partnerships with suppliers, search for suitable premises, select personnel, and purchase equipment and goods.

In this project, an entrepreneur performs the basic functions of a manager — he goes through all registration procedures, selects personnel, negotiates with landlords and suppliers, purchases goods, deals with the strategic promotion of the store, and controls sellers.

To carry out the trading process, shop assistants and cashiers work in the store. Since the store is open daily, a shift schedule of 2/2 should be set. A shift is a cashier serving the cashier and a sales assistant working in the hall.

The schedule of the store coincides with the opening hours of the shopping center - from 10:00 to 22:00. Исходя из этих условий, формируется штатное расписание. Фонд оплаты труда составляет 106600 рублей.

Table 4. Staffing and payroll

Position

Salary, RUB

Number of people

PHOT, RUB

Administrative

one

Supervisor

15, 000

one

15, 000

Trade

2

Продавец-консультант (посменный график)

17000

2

34000

3

Кассир (посменный график)

14000

2

28, 000

Auxiliary

four

Cleaning lady (part-time)

5000

one

5000

Total:

82 000.00 ₽

Social Security contributions:

24 600.00 ₽

Total deductions:

106 600.00 ₽

8. ФИНАНСОВЫЙ ПЛАН

Финансовый план учитывает все доходы и расходы проекта, горизонт планирования составляет 5 лет.

To start a project, you need to calculate the amount of investment. Для этого нужно определиться с затратами на приобретение оборудования, первоначальную закупку товара и формирование оборотных средств, за счет которых будут покрываться убытки начальных периодов. Первоначальные инвестиции для открытия магазина посуды составляют 1 000 000 руб. Основная часть требуемых инвестиций приходится на товарные запасы – их доля составляет 50%; 30% приходится на оборотные средства, 13, 2% на приобретение оборудование, а остальные 6, 8% - на рекламу, регистрацию бизнеса и обустройство торгового пространства. The project is funded by equity. Основные статьи инвестиционных затрат отражены в таблице 5.

Table 5. Investment costs

Name

Amount, rub.

Equipment

one

Set of shop equipment

132000

2

Furniture and decor

15, 000

Intangible assets

3

Starting advertising campaign

50, 000

four

Business Registration

2000

Current assets

five

Purchase of goods

500, 000

6

Current assets

300, 000

Total:

1 000 000 ₽

Переменные расходы состоят из затрат на приобретение товаров. Для упрощения финансовых расчетов переменные расходов рассчитывается, исходя из суммы среднего чека и фиксированной торговой наценки в 60%.

Постоянные расходы состоят из арендной платы, коммунальных платежей, фонда заработной платы, расходов на рекламу и амортизационных отчислений. 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

50, 000

2

Advertising

5000

3

Communal payments

5000

four

Depreciation

2500

five

Payroll deductions

106600

6

Other

10, 000

Total:

179100

Таким образом, были определены постоянные ежемесячные расходы в размере 179100 рублей.

8. EVALUATION OF EFFICIENCY

Срок окупаемости проекта при первоначальных инвестициях в 1000000 рублей составляет 12 месяцев. Чистая ежемесячная прибыль проекта при выходе на плановые объемы продаж составит около 50000 рублей. Выход на плановый объем продаж планируется на четвертый месяц работы. Рентабельность продаж в первый год работы составит 9, 4% при среднеотраслевом показателе 8%. Коэффициент рентабельности инвестиций составляет 13, 6%, а внутренняя норма прибыли превышает ставку дисконтирования и равна 9, 72%.

Финансовый план учитывает оптимистичный прогноз продаж, который можно ожидать благодаря выгодному местоположению магазину и высокому трафику потенциальных покупателей.

9. POSSIBLE RISKS

To assess the risk component of the project, it is necessary to analyze the external and internal factors. Специфика заведения определяет следующие риски деятельности:

- 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;

- 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. Снизить риск возможно при тщательном планировании деятельности магазина и финансовых результатов, грамотном выборе торгового помещения, проведении различных акций и скидок, стимулирование повторных покупок, гибкое ценообразование;

- the reaction of competitors. Поскольку рынок посуды достаточно насыщен и конкуренция на нем высока, поведение конкурентов может оказывать сильное влияние. To minimize it, it is necessary to create your own client base, constantly monitor the market, have a customer loyalty program and create competitive advantages;

- имущественные риски. В эту категорию включены риски, связанные с порчей и хищением. Посуда является довольно хрупким предметом, поэтому нередки случаи ее повреждения. The likelihood of this risk is increased by the self-service system. Минимизировать угрозу позволят проверка продавцом-консультантом товара, который поступает в магазин, контроль за ситуацией в торговом зале.

- 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 premium motivation of employees;

- 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

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