MillenniumMart
Opportunity
Advisory
Sample Plan Information
[This sample business plan is based on one from several years ago, valid then, and still useful as an illustration of what a business plan contains and what issues it covers. It is not valid for information purposes today.]
Problem & Solution
Problem Worth Solving
Grocery shopping has become common place, as simple and expected as getting gas or needing to feed yourself and your family members. People want to come in, grab things, and get out and move on with their day. Having to be polite or ask for things will only hinder their progress
Our Solution
MillenniumMart’s primary objective is to create a new and revolutionary distribution outlet that will significantly reduce prices for its customers and provide greater services with an equal level of quality. The company seeks to be first to market with this daring new idea so as to capture market share and create greater than average profits.
Target Market
Market Size & Segments
Market Analysis Summary
Our market is booming. Convenience store industry sales rose 8.6% for 20xx. Overall U.S. retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth, proving once again that the convenience store industry has become a powerful force in U.S. retailing.
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. Therefore we have segmented our market into night shoppers, quick shoppers, and others. Growth rates for these three segments match the population growth for the surrounding area.
Our main competitor is 7-11 which holds approximately 30% of the industry. Other competitors includeCircle K, Fastrip, and any of the 85 grocery establishments on the east coast.
Market Segmentation
Our target market for our test store encompasses a five mile radius in which the approximate population is 150,000 (based on census information).
The majority of the residents in this area are Caucasian (58.8%) Black (23.6%) and Hispanic (19%) with occupations classified as professional/technical, homemaker, or retired. The majority of household incomes range from $20,000 – $30,000 (50.3%), yet there are also affluent household incomes ranging from $50,000 – $100,000 (15.4%).
The median income in this area is $48,096, compared to the whole New York area which is $34,248. The typical "head of household" age is 25 – 34 (22.4%) or age 34 – 44 (23.1%) with a median age of 44.4 years old and an average age of 32 years old.
Target market segments
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.
Competition
Current Alternatives
Convenience store industry sales rose 8.6% to $86.3 billion for 20xx. Overall U.S. retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth, proving once again that the convenience store industry has become a powerful force in U.S. retailing.
Pre-tax profit margin in the convenience store industry was the highest since 1988 (1.8%). The 20xx results confirm that a new, upward trend is emerging. This upward trend is based on several factors, and occurred along with a slow rebound in the general economy.
Merchandise sales per customer increased 7.4% in 20xx suggesting that convenience stores are placing higher priority in filling the customers’ needs. Companies that align themselves properly to fill those needs will be successful in the future.
4.2.1 Competition and Buying Patterns
7-11 holds approximately 30% of the industry market, and in 20xx their net income was $160 million. Other competitors include Circle K, Fastrip, and any of the 85 chain grocery establishments on the east coast.
Our Advantages
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 advertisem*nts 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.
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.
Keys To Success
Keys to Success
In order to survive and expand, MillenniumMart must keep the following issues in mind:
- We must attain a high level of visibility through the media, billboards, and other advertising.
- We must establish rigid procedures for cost control and incentives for maintaining tight control.
- We must expend a significant amount on R&D in order to constantly be able to offer better and greater products and services.
