Goals of The Retail Store
The Gourmet Food Retail Store will pursue short-term and long-term goals because it plans to establish a permanent presence in rural areas where there is no direct access to these goods currently. The short-term goals include the establishment of a presence and= successfully operating the Gourmet Food Retail Store. In the first quarter, the retail store will not be expected to make a profit, but the expectation and second short-term goal are that in the second quarter, it will break even and begin making earning profits in the third quarter. To successfully operate in the chosen location, the retail food store will offer quality food and services to customers. The strategy of offering quality products and services is aimed at ensuring repeat purchases. In the long run, the company will pursue two major goals of capturing and dominating the market in the area of operation and establishing three more Gourmet Food Retail Stores in similar areas.
Why the Opportunity is Promising
The products offered a guarantee that the retail store would be operating without any competition. Additionally, establishing the Gourmet Food Retail business will be beneficial because the business will practically introduce new products in the market. Thus, as the sole provider of some food items, the food store will have leeway in setting up their prices which will guarantee a high return on investment. Further, operating in a rural setting means that the risks and costs associated with urban areas will be mitigated, leading to savings in fixed costs such as rent and insurance. The uniqueness of the products offered by the retail food store and its status as the only retailer guarantee a ready market with massive sales potential.
Estimated Period of Operation
The business can be up and running in three months from the date when the business plan is approved. This estimate has been reached after estimating the specific time required to accomplish specific steps in the establishment of a well-functioning food retail store. In particular, it is estimated that it will take at least three weeks to establish the retail store as a legal entity. Further, it will be one week each to register the business for taxes, open business bank accounts and credit cards, and set up accounting for the business. In addition, it will take another three weeks to obtain the necessary permits and license and one and two weeks, respectively, to obtain insurance for the business and, brand the business, set up its website, and provide contact details.
Advantages of the Business
Opening and operating the Gourmet Food Retail store has several advantages. Key among these advantages is the uniqueness of the products that will be offered. Further, due to the non-availability of these products in the market where the business will be operating, a virtual exclusive market will exist, which will allow the business some flexibility in decision-making. In particular, the business will have some leeway in setting up prices, raising the possibility of a higher rate of return. In addition, the expected higher rate of return will lead to a shorter period for the business to break even. Most importantly, due to operating in a rural setting rather than an urban one, the business will be able to make fixed cost savings such as rent and insurance. There is also a greater potential for expansion in the proposed market.
Vision & Mission & Strategic Planning & Management Distinction
- Mission: To satisfy the needs of our customers by offering unique food products and personalized services
- Vision: Through our entrenched commitment to perfection, we are dedicated to offering uncompromising unique food products while offering our customers exceptional personalized services
Setting up the Food stores’ mission and vision statements are strategic planning plans because they involve setting out an aspiration that the food store will achieve in the future, starting with actions taken today. Therefore, management actions such as allocating duties to staff, purchasing products, hiring the right staff and others are needed to realize strategic plans.
Past Performance
For the purposes of establishing a Gourmet Food Retail Store in the rural area, a new special purpose vehicle or legal entity will be established. The legal entity will be a subsidiary of the parent company. The special purpose vehicle will have autonomy in terms of sourcing for the products offered in the market, personnel decisions, and some expenses. This is the first time that the parent is establishing a Gourmet Food Retail Store in a rural area. However, from pasts experiences of operating in an urban area where competition was stiff, break-even and profitability were realized in the third quarter and a fourth quarter after the opening of a store.
Tools and Services Available
To establish the Gourmet Food Retail Store, several tools and services are available. Key among the tools available for the proposed business is a large pool of retained earnings that can be drawn to finance the initial investment and support liquidity when the business is up and running. Further, due to past experience, the company has experienced staff who will help unlock the potential in the new market. Additionally, the parent company has co-opted local investors in the new market and they are ready for capital infusion of the new entity. Finally, a good rapport has been established with the local authorities and the mayor’s office.
Although a new legal entity under which the Gourmet Food Retail Store will operate will be established, it will use the reliable and strong supply chain available to the parent company. The utilization of this supply chain will ensure that the necessary products in terms of quality and quantity are sourced on time. The existing supply chain also offers the retail store another benefit of negotiated prices. Thus, the new Gourmet Retail Food Store will benefit from the economies of scale offered by the parent company. Further, there exists a strong organizational culture that the new retail store will benefit from and implement in its store. Finally, the diverse workforce available to the parent company will be at the disposal of the new store, which would boost its marketing efforts and profitability in general.
Capital, Staff & Approvals: Capital
The estimated cost of establishing a new Gourmet Food Retail Store is estimated at $200,000. The initial investment will be sourced from the parent company and local investors, who will contribute $150,000 and $50,000, respectively. The raised capital will be used for legal fees, which are estimated to cost $20,000, product purchase cost at $150,000, marketing fees at $10,000, and miscellaneous costs at $20,000.
The retail store will be headed by a manager who will report to the regional manager. The regional manager will be reporting to the parent company’s chief finance officer. Other staff will be assigned to the company as needed, including marketing staff, finance and accounting staff, and other personnel responsible for the day-to-day operation of the food store. While at the food store, they will be reporting directly to the Gourmet Store Manager, but their ultimate reporting authority is the regional, departmental head and the parent company CFO.
To effectively open and operate the Gourmet Food Retail business, several permits and licenses will need to be obtained. Among the most important licenses is the operating license. This license allows the business to start operating as going concerned. Additionally, other permits such as a sign permit from the local authorities will be required. Because the core business is the sale of food to residents, the business will be required to obtain licenses from the local and state health departments and comply with regulations on the quality of the food items sold. Further, a sales tax license will be required on top of registering with the local, state, and federal tax authorities.
Products to be Offered
Management – Why Choice Best Fit
As the consultant in drafting the business plan, I stand by the choices made on various items in the business plan. First, the choice of food products chosen is unique and does not conform to typical foods offered in rural settings giving the store a unique opportunity to offer exclusive products. Secondly, the preferred organizational structure combines elements of hierarchical structure and flat structure. This structure allows employees to understand the command structure and also offers them the benefits of the flat structure. Finally, the choice to include local investors gives the business a relatable face that is good for public relations.
Role of Strategic Planning in Decision Making
A strategic plan provides management with a framework for making operational decisions. Typically, strategic plans have a duration of three or more years and aim to achieve strategic development for the concerned company. At the operational level, strategic plans help in resource allocation and prioritization of the set goals. Strategic goals also increase operational efficiency.
Role of Strategic Planning in the Food Store’s Decisions
Strategic planning will play a major role at the new Gourmet Food Retail Store, whereby all major decisions will be expected to mirror the laid-out strategic plans. Among the decisions where strategic plans will play a key role include purchasing, hiring, inventory, and budgeting decisions. Purchases will be sources from vendors that help the food store achieve its objective of providing its client base with quality products. Further, only individuals compatible with the store’s values, mission, and vision will be hired. Additionally, internal decisions such as when to purchase new inventory will serve the strategic plan and financing in new budgets will direct resources at tasks geared towards achieving the strategic plan.
Reference
Jankelová, N. (2017). Strategic decision making and its importance in small corporations.Corporate Governance and Strategic Decision Making.