Retail Store ~ Business Plan

1. Retail Store~ Business Plan Lorelei Gress Adele McIntosh Karen Bowditch Shanda Sedgwick

2. Outline ~ • Operations • Human Resources • Marketing Strategy • Financial Analysis • Business Feasibility Mission Statement ~ "To support the growth and competitive advantage of the Saskatchewan food and beverage processing industry by providing our members with relevant and current programs and services."

3. Operations ~ • Location • Retail • Consignment • Non-consignment • Inventory is broken into 5 categories

4. Operations ~ Organizational Structure SFPA Board of Directors 9 Elected Members 3 Appointed Members 2 Associate Members • COO: • SFPA and Retail Store • Contracted Services • Marketer: • SFPA and Retail Store • Contracted Services • Controller: • SFPA and Retail Store • Salary • Store Manager: • Retail Store • Salary • Staff: • Retail Store • Hourly Chief Operating Officer Marketer Marketplace Controller Store Manager Marketplace Staff 1 full-time, 3 part-time

5. Marketing ~ Targeting & Positioning • Targeting: • 40-60 yr old Saskatchewan women • Middle-high income, educated women • Positioning: • Home-grown, Home-made, high quality products • Wholesome image • Marketing Mix (4P’s) • Products • Price • Place • Promotion

6. Marketing ~ Channels of Distribution • One-step channel distribution for vendors products • Producer → Store → Consumer • Two-step channel distribution for owned lines • Producer → Wholesaler → Store → Consumer • Challenges: shipping frozen food • Sell products via: • Direct sales • Purchase order • E-commerce • All these marketing channels work well for Retail Store and at least one of the target markets

7. Marketing ~ S.W.O.T.

8. Marketing ~ Promotion and Advertising • Promote gift baskets: • Office gifts • Sponsorship • Holiday gifts • New changes: • Improve existing website and brochures • Advertise on billboards • Tourism (hotels, airports)

9. Financials ~ Owner Equity • Owner’s equity in 2007 is $81,479. • $50,000 remaining of CARDS funding.

10. Financials ~ Economic Forecast • Ten year plan • 5% annual increase in sales for first 7 years • 3% annual increase in sales for last 3 years • Annual Inflation 2% • Consignment are the largest % of sales sold as gift baskets • Gift baskets are used as a marketing tool

11. Financials ~ Financial Feasibility

12. Financials ~ Breakeven Analysis • Charge higher price in first 4 years to break-even on a net income basis • After year 4 prices can be lowered as seen by cash flow and net income

13. Financials ~ Sensitivity Analysis • 5% change in base value • Worst case • Retail Store not profitable • Best case • Small increase in price = large increase in IRR

14. Questions? Saskatchewan Made ... Saskatchewan Proud

15. Pricing ~ Consignment Example • 1.54 x on cost, 35% on sell • Vendor brings in a jar of jam to sell for $6.50 • Retail Store takes $6.50 x 1.54 = $10.00 shelf price • The vendor makes $6.50 and Retail store makes $3.50 at this point • 35% on sell refers to the $10.00 shelf price x 35% = $3.50 SMM profit • Retail Store takes an additional 10% from the wholesale price for admin/advertising purposes • $6.50 (wholesale price) x 10% = $0.65 therefore the vendor actually only makes $5.85 ($6.50 - $0.65 = $5.85) • Retail store makes $3.50 + $0.65 = $4.15

16. Pricing ~ Corner Gas Example • 1.77 x on cost, 43% on sell • Wholesale price of a t-shirt $13.50 • To determine the shelf price $13.50 x 1.77 = $23.89 shelf price • Therefore a profit of $23.89 - $13.50 = $10.40 profit • $23.89 x 43% = $10.40