The perception that the business of supplying groceries to urban centers and direct consumers is a preserve of the village folks and uneducated people is wrong. Every person eats vegetables, and this means that there is always a ready market for groceries. Ellise Grocery Supplier targets supermarkets, government offices and people living in urban areas. The urban population rarely gets fresh vegetables and fruits. They buy groceries from supermarkets and other stores at expensive prices. This business targets to break this cycle of suffering and bring fresh groceries close to consumers. The business plans to buy groceries from the countryside and sell them to customers in urban centers.
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Ellise Grocery Supplier plans to partner and sign contracts with agricultural farms located in the countryside for a steady supply of groceries. It requires three vehicles, 12 employees, an office and store (14, 400m2). Some money will be set aside for business registration and other miscellaneous expenses. The business requires about $100,000 to finance all its start-up and monthly operations as shown in the business model canvas document below.
|Advertising||1,000||Promotion for opening the business|
|Starting inventory||2,500||Amount of inventory required to open|
|Cash||3000||Amount needed for the cash register|
|Decorating||1,000||Estimate based on bid if appropriate|
|Deposits||1000||Check with utility companies|
|Fixtures and equipment||2100||Use actual bids|
|Insurance||1,000||Bid from insurance agent|
|Lease payments||1,500||Fee to be paid before opening|
|Licenses and permits||1,200||Check with city or state offices|
|Remodeling||1,000||Use contractor bids|
|Rent||2,500||Fee to be paid before opening|
|Services||1,000||Cleaning, accounting, etc.|
|Supplies||8,000||Office, cleaning, etc. supplies|
|Total Startup Costs||88,800|| |
Amount of costs before opening
Startup Capital Requirements – Repeating Monthly Expenses
|Bank service fees||300|
|Credit card charges||200|
|Dues and subscriptions||1,000|
|Loan payments||850||Principal and interest payments|
|Payroll other than owner||1000|
|Rent||1000||Exclude amount on preceding page|
|Repairs and maintenance||1000|
|Your salary||0||Not applicable for first six-nine months|
Total Repeating Costs
Total Startup Costs
Total Cash Needed
Food is a basic need that all people require to live healthy and comfortable lives. Ellise Grocery Supplier will operate throughout the year. The business will sign long-term contracts with farmers to ensure there is an endless supply of fresh fruits and vegetables. Most farmers use modern technology that enables them to cultivate crops without relying on rainfall water.
Building a Product Line
Groceries are in high demand in all regions, especially urban areas. Most people do not get fresh fruits and vegetables because they live far from farms. This company will build its product line by making same day deliveries of groceries so that consumers get them as fresh as they are in the farms. Most suppliers sell products that were harvested several days and kept fresh by cooling systems. However, Ellise Grocery Supplier will work hard to deliver fruits and vegetables the same day they are harvested. The prices of goods will be lower than those of the prevailing market by $0.15 per kilogram.
The business is expected to break-even after six to nine months from its inception. Estimates may change depending on the prevailing market conditions. First, there are numerous policies that control land use and agricultural practice. Issues like global warming may impact negatively on the future of the business. High costs of farming may influence farmers to increase the prices of their products. The unscrupulous use of genetically modified products may force the business to establish marketing strategies to dispel negative perceptions. The business will be forced to sell its products cheaply and may fail to achieve the targeted profits.