Hardware retail franchise business plan for starting your own business
Whether it be a technological thing such as a computer or a pure natural setting such as a garden, hardware installation is a must. In addition to usage of big hardware tools, smaller ones like a miniature screw driver are also increasing in demand. And the demand of sophicated hardware and tools is expected to increase even more.
So, if you are wondering whether or not you should open a hardware store, you should keep all the worries aside and read this blog. In this business plan hardware store we will be listing all the details of Sam Hardware World, a hardware retail franchise in New York City. It will help you in knowing how to put up a hardware business in.
Moreover, the financial part would give you an insight into the profits you can earn via it. You could also discover whether or not you need to also consult business plan for loan to launch the startup.
2.1 The Business
Sam Hardware World will be based in New York City. The business will operate in both B2B and B2C modes. The startup aimes at providing hardware for setting ranging from technological to household to business offices.
2.2 Management of hardware retail franchise business
To manage the hardware retail the first step is to create a business plan for hardware store. In that hardware store business plan you must enlist all the equipment to be procured and personnel you must staff to manage the operations. Since the business activity overlaps with other businesses as well, you will need to consult retail discount store business plan and toy business plan as well besides retail hardware store business plan.
In this sample business plan for retail hardware store we’ll explain how Sam conducted and managed his business. Since he underwent the procedure to get a franchise, you can also see this if you need to study business plan for a franchise.
2.3 Customers of hardware retail franchise business
Knowing the customers before starting a business will help you in understanding their demands, likes and purchasing power. The customers of hardware retail franchise business are:
- Construction Enterprises
- Educational Institutes
2.4 Business Target
Sam Hardware World aims at boosting sales at a specified rate after regular intervals that will be mentioned later in this sample. The financial targets for the first three years are given in this graph:
3.1 Company Owner
Sam has acquired a degree in management sciences. After working as a business consultant in a tech firm for two years, he decided to capitalize on hardware store franchise opportunities.
3.2 Why the hardware retail franchise business is being started
Sam started the hardware shop business to benefit from the perks of doing one’s own business. He had unique hardware business ideas thus he decided to step only in this type of enterprise.
3.3 How the hardware retail franchise business will be started
Step1: Conduct Research
The first step is to research on the types of hardware businesses with special focus on franchise hardware stores for if you want to get started from there. You must search for hardware store franchises for sale and select the best among them.
Step2: Make Hardware Business Plan
Next, you will have to devise hardware shop business plan to ensure you systematically carry out the operations of your business. In your business plan for hardware shop you should enumerate in detail the executive plan, marketing plam, sales strategy and financial plan.
Step3: Set up the Hardware Store
In the next stage you must acquire the place where you would be installing your setup. While procuring the equipment it is equally important to start recruiting talent.
Step4: Market & Establish a Web Presence
To reach your target customers, you will need to exploit the media platforms and websites to get renowned.
Step5: Manage Finance
Last, you will have to create balance sheets for cost analysis and determining prospective profits.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$278,200|
|Other Current Assets||$251,000|
|Start-up Expenses to Fund||$278,200|
|Start-up Assets to Fund||$972,320|
|TOTAL FUNDING REQUIRED||$1,250,520|
|Non-cash Assets from Start-up||$1,260,240|
|Cash Requirements from Start-up||$145,100|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$35,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$62,500|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,250,520|
|Loss at Start-up (Start-up Expenses)||$158,900|
|TOTAL CAPITAL AND LIABILITIES||$1,490,340|
Strategic/Operational Business Plan
Services of hardware retail franchise business
If you are thinking of starting a hardware business you must want to know that are hardware stores profitable. Well, running a hardware store can be extremely profitable provided you have some unique hardware store ideas. To get them, you should search for how to start hardware business or how to start hardware store, mark your location and analyze what others in the domain are doing. Your prospects will depend on your research on potential localitirs and selecting the right one for launching your franchise hardware store.
- Technical Hardware Products
Our major products will be hardware related to technological use such as computers and components, input and output devices, mobile parts and accessories etc.
- Construction Hardware
The second category of our products will include hardware that is needed during construction projects.
- Garden Décor & Hardware
We’ll also provide hardware that is generally needed by households and institutions to set up the deck, or do landscaping.
- General Tools
We’ll also provide hardware tools that are required for minor and major repairs.
Marketing Analysis of hardware retail franchise business
Before you open a hardware store you must undergo a thorough analysis of all the available markets and explore hardware store franchise opportunities related to each market. It is to first, determine your customer groups, second, identifying the market trends, and last how much price you can set provided your financial targets, the rates of your competitors in retail store hardware and purchasing power of your target customers.
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Considering the importance of an accurate marketing analysis in retail hardware store business plan, you should hire marketing expert. However, for a rough idea, you can search on your own on how to start a hardware company and best locations to open a hardware franchise.
In this hardware shop business plan pdf we are providing the details of Sam Hardware World.
5.1 Market Trends
According to IBISWorld, nearly 20k hardware stores are running successfully in the United States. If you go through the hardware store financial district and some hardware retailing magazine you can see that the market size has reached $33 billion in the US alone. Therefore, the market trends are going right and you should not worry about the prospects if you completely understand how to start hardware store and conduct it.
5.2 Marketing Segmentation
In this section you should divide the whole population into distinct groups of your target customers. Since the customer groups of hardware store overlap with other businesses, you can take help from business plan for video game store as well as business plan for farmers market.
5.2.1 Construction Enterprises
Our biggest group of customers will belong to the construction enterprise. They are expected to procure our hardware specified to their work as well as the general tools that are needed for generic tasks.
Second category of our target customers will be the offices. They will avail of our services and products mainly for setting up the office spaces. The products they would need would range from printers, computers, and electronics.
The third category of our target customers comprise of households who will need all of our products but in a minor number. Their purchases can be related to technological items as well as garden & yard tools.
5.2.4 Educational Institutes
Educational institutes will also be our target customers as they will be needing the same products that are demanded by offices and households.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
The business targets of Sam Hardware World are:
- Attaining a CSAT score of more than 90% within a year of our launch
- Expand the product line by the end of the first year
5.4 Product Pricing
For the first year, we aim at keeping our prices lower than that of our competitors. Afterwards we’ll bring them in the same range as theirs.
Marketing Strategy of hardware retail franchise business
If you are looking for a marketing plan for hardware store, you have landed on the right page. In this retail hardware store business plan sample, we’re providing detailed retail hardware store business plan of Sam Hardware World.
6.1 Competitive Analysis
- Our location is ideal for a hardware store startup. It is because we have several colleges, offices, and small businesses in our vicinity. In addition, the residential community is also not far away.
- We will be offering discounts to construction managers so that they procure the hardware from us and come into long-term partnership.
- Our strategy to keep prices low during the first year will benefit us in reaching out to the target customers.
6.2 Sales Strategy
In this sample business plan for a hardware store we are giving the sales strategy of Sam Hardware World. However, for more ideas you may also want to visit business plan for a stationery and vape shop business plan.
- We will offer small hardware products as free gifts with large purchases.
- We will run social media campaigns to get known to a wider audience.
- We will offer a 20% discount to customers who enter into long term partnership with us.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|Technical Hardware Products||4,500||4,770||5,056|
|Garden Décor & Hardware||2,000||2,120||2,247|
|TOTAL UNIT SALES||12,500||13,250||14,045|
|Unit Prices||Year 1||Year 2||Year 3|
|Technical Hardware Products||$99.00||$114.84||$133.21|
|Garden Décor & Hardware||$119.00||$138.04||$160.13|
|Technical Hardware Products||$445,500.00||$547,786.80||$673,558.65|
|Garden Décor & Hardware||$238,000.00||$292,644.80||$359,836.05|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Technical Hardware Products||$20.00||$22.00||$23.10|
|Garden Décor & Hardware||$25.00||$27.50||$28.88|
|Direct Cost of Sales|
|Technical Hardware Products||$90,000.00||$104,940.00||$116,798.22|
|Garden Décor & Hardware||$50,000.00||$58,300.00||$64,887.90|
|Subtotal Direct Cost of Sales||$295,000.00||$343,970.00||$382,838.61|
Personnel plan of hardware retail franchise business
Hiring the right people for the right job is utmost important if you’re looking for how to start hardware business. Owing to its significance, you must include the list of required people alongwith their job descriptions in retail hardware store business plan in. This will enable you to select the most talented individuals for opening a hardware store.
7.1 Company Staff
Sam will be the CEO. He will need the following people for available positions:
- 2 Sales Managers to manage hardware sales in different domains
- 1 Accountant to maintain financial record
- 1 Social Media Manager to manage online platforms
- 1 Store Operator to manage the inventory
- 1 Customer Care Executive to maintain contracts with long-term customers
- 1 Cleaner to maintain the facility
- 3 Drivers to procure and transport inventory to and from sites
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
|Social Media Manager||$33,500||$36,850||$40,535|
Financial Plan of hardware retail franchise business
You may be starting a hardware business out of passion, but you would want to know how much profit can anyone make after they open hardware stores. Practically, hardware stores earn a lot. If the business operations and financial flows are managed then the business can yield immense profit.
To ensure that the finances go as projected, you must make a comprehensive financial plan for your business. That should include the break-even analysis, projected profits on monthly and yearly basis for at least first three years, gross margin calculations, balance sheet and business ratios.
In this retail hardware store business plan pdf we are providing the financial plan of Sam Hardware World.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$295,000||$343,970||$382,839|
|TOTAL COST OF SALES||$295,000||$343,970||$382,839|
|Gross Margin %||79.69%||80.74%||82.57%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$464,700||$497,500||$539,355|
|Profit Before Interest and Taxes||$692,800||$944,524||$1,273,865|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
- How profitable is a hardware store?
As you can see from the financial part of this retail hardware store business plan pdf, the hardware store can be immensely profitable if you provide unique services. If you have competitive advantages, that would be a plus.
- How do I start my own hardware business?
If you are looking for how to setup a hardware store you must study at least one sample retail hardware store business plan. The first step is doing research and the second is documenting a detailed business plan.
- Is a hardware store a good investment?
Owning a hardware store is the best investment you can make. It is because setting up and running a hardware store are not much difficult. You can make profits right after starting a hardware store.
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