Hardware Retail Franchise Business Plan Sample

Hardware retail franchise business plan for starting your own business

Whether it be a technological thing such as a computer or a purely natural setting such as a garden, hardware installation is a must. In addition to the usage of big hardware tools, smaller ones like miniature screwdrivers are also increasing in demand. And the demand for sophisticated 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 the United States. 

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.

Executive Summary

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 aims at providing hardware for setting ranging from technological to household to business offices.

2.2 Management of hardware retail franchise business

To manage hardware retail the first step is to create a business plan for a 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 a 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 a 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 the hardware retail franchise business are:

• Construction Enterprises
• Offices
• Households
• 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:

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Company Summary

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 into this type of enterprise.

3.3 How the hardware retail franchise business will be started

Step1: Conduct Research

The first step is to research the types of hardware businesses with a special focus on franchise hardware stores. 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 a 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 plan, 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.

Start-up Expenses
Legal	$152,200
Consultants	$0
Insurance	$25,200
Rent	$35,200
Research and Development	$10,000
Expensed Equipment	$52,200
Signs	$3,400
TOTAL START-UP EXPENSES	$278,200
Start-up Assets	$252,400
Cash Required	$181,000
Start-up Inventory	$35,520
Other Current Assets	$251,000
Long-term Assets	$252,400
TOTAL ASSETS	$972,320
Total Requirements	$1,250,520
START-UP FUNDING
Start-up Expenses to Fund	$278,200
Start-up Assets to Fund	$972,320
TOTAL FUNDING REQUIRED	$1,250,520
Assets
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
TOTAL ASSETS	$1,490,340
Liabilities and Capital
Liabilities	$18,420
Current Borrowing	$0
Long-term Liabilities	$0
Accounts Payable (Outstanding Bills)	$62,500
Other Current Liabilities (interest-free)	$0
TOTAL LIABILITIES	$80,920
Capital
Planned Investment	$1,250,520
Investor 1	$0
Investor 2	$0
Other	$0
Additional Investment Requirement	$0
TOTAL PLANNED INVESTMENT	$1,250,520
Loss at Start-up (Start-up Expenses)	$158,900
TOTAL CAPITAL	$1,409,420
TOTAL CAPITAL AND LIABILITIES	$1,490,340
Total Funding	$1,250,520

Strategic/Operational Business Plan

Services of hardware retail franchise business

If you are thinking of starting a hardware business you must want to know 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 localities and selecting the right one for launching your franchise hardware store.

• Technical Hardware Products

Our major products will be hardware related to technology 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, and second, identify the market trends and the price you can set provided your financial targets. The rates of your competitors in retail store hardware businesses and purchasing power of your target customers should also be catered to in the analysis.

Considering the importance of accurate marketing analysis in retail hardware store business plan, you should hire a marketing expert. However, for a rough idea, you can search on your own on how to start a hardware company and the 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 magazines 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 a 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 stores 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 for their work as well as the general tools that are needed for generic tasks.

5.2.2 Offices

The 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 and computers to electronics.

5.2.3 Households

The third category of our target customers comprises 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 a group of our target customers as they will be needing the same products that are demanded by offices and households.

Market Analysis
Potential Customers	Growth	Year 1	Year 2	Year 3	Year 4	Year 5	CAGR
Construction Enterprises	39%	44,200	53,040	63,648	76,378	91,653	10.00%
Offices	34%	34,200	41,040	49,248	59,098	70,917	10.00%
Households	16%	24,400	29,280	35,136	42,163	50,596	10.00%
Educational Institutes	11%	10,400	12,480	14,976	17,971	21,565	11.00%
Total	100%	113,200	135,840	163,008	195,610	234,732	10%

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. Afterward, we’ll bring them in the same range as theirs.

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Marketing Strategy of hardware retail franchise business

If you are looking for a marketing plan for a hardware store, you have landed on the right page. In this retail hardware store business plan sample, we’re providing a 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 a 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 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 a long-term partnership with us.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

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Sales Forecast
Unit Sales	Year 1	Year 2	Year 3
Technical Hardware Products	4,500	4,770	5,056
Construction Hardware	3,500	3,710	3,933
Garden Décor & Hardware	2,000	2,120	2,247
General Tools	2,500	2,650	2,809
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
Construction Hardware	$149.00	$172.84	$200.49
Garden Décor & Hardware	$119.00	$138.04	$160.13
General Tools	$99.00	$114.84	$133.21
Sales
Technical Hardware Products	$445,500.00	$547,786.80	$673,558.65
Construction Hardware	$521,500.00	$641,236.40	$788,464.28
Garden Décor & Hardware	$238,000.00	$292,644.80	$359,836.05
General Tools	$247,500.00	$304,326.00	$374,199.25
TOTAL SALES	$1,452,500.00	$1,785,994.00	$2,196,058.22
Direct Unit Costs	Year 1	Year 2	Year 3
Technical Hardware Products	$20.00	$22.00	$23.10
Construction Hardware	$30.00	$33.00	$34.65
Garden Décor & Hardware	$25.00	$27.50	$28.88
General Tools	$20.00	$22.00	$23.10
Direct Cost of Sales
Technical Hardware Products	$90,000.00	$104,940.00	$116,798.22
Construction Hardware	$105,000.00	$122,430.00	$136,264.59
Garden Décor & Hardware	$50,000.00	$58,300.00	$64,887.90
General Tools	$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

If you’re looking for how to start a hardware business, you must know that hiring the right people for the right job is of utmost importance. Owing to its significance, you must include the list of required people along with their job descriptions in retail hardware store business plan in any format. 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

Personnel Plan
	Year 1	Year 2	Year 3
Sales Managers	$64,500	$70,950	$78,045
Accountant	$33,500	$36,850	$40,535
Social Media Manager	$33,500	$36,850	$40,535
Store Operator	$30,500	$33,550	$36,905
Customer Executive	$33,500	$36,850	$40,535
Cleaner	$25,500	$28,050	$30,855
Drivers	$64,500	$70,950	$78,045
Total Salaries	$285,500	$314,050	$345,455

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 a monthly and yearly basis for at least the 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.

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8.1 Important Assumptions

General Assumptions
	Year 1	Year 2	Year 3
Plan Month	1	2	3
Current Interest Rate	8.12%	8.20%	8.26%
Long-term Interest Rate	8.40%	8.44%	8.47%
Tax Rate	24.03%	24.21%	24.60%
Other	0	0	0

8.2 Break-even Analysis

Break-Even Analysis
Monthly Units Break-even	5340
Monthly Revenue Break-even	$132,500
Assumptions:
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
Sales	$1,452,500	$1,785,994	$2,196,058
Direct Cost of Sales	$295,000	$343,970	$382,839
Other	$0	$0	$0
TOTAL COST OF SALES	$295,000	$343,970	$382,839
Gross Margin	$1,157,500	$1,442,024	$1,813,220
Gross Margin %	79.69%	80.74%	82.57%
Expenses
Payroll	$285,500	$314,050	$345,455
Sales and Marketing and Other Expenses	$145,000	$148,000	$156,000
Depreciation	$2,300	$2,350	$2,500
Leased Equipment	$0	$0	$0
Utilities	$2,900	$3,000	$3,100
Insurance	$2,100	$2,100	$2,100
Rent	$2,900	$3,000	$3,200
Payroll Taxes	$24,000	$25,000	$27,000
Other	$0	$0	$0
Total Operating Expenses	$464,700	$497,500	$539,355
Profit Before Interest and Taxes	$692,800	$944,524	$1,273,865
EBITDA	$692,800	$944,524	$1,273,865
Interest Expense	$0	$0	$0
Taxes Incurred	$138,560	$188,905	$254,773
Net Profit	$554,240	$755,619	$1,019,092
Net Profit/Sales	38.16%	42.31%	46.41%

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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 Sales	$51,000	$55,080	$59,486
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
Cash Spending	$42,000	$42,000	$45,000
Bill Payments	$27,000	$28,000	$31,000
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
Dividends	$0	$0	$0
SUBTOTAL CASH SPENT	$69,000	$74,520	$80,482
Net Cash Flow	$21,000	$23,000	$25,000
Cash Balance	$27,000	$30,000	$33,000

8.5 Projected Balance Sheet

Pro Forma Balance Sheet
Assets	Year 1	Year 2	Year 3
Current Assets
Cash	$275,000	$308,000	$338,800
Accounts Receivable	$24,000	$26,880	$30,213
Inventory	$4,300	$4,816	$4,900
Other Current Assets	$1,000	$1,000	$1,000
TOTAL CURRENT ASSETS	$282,000	$315,840	$355,004
Long-term Assets
Long-term Assets	$10,000	$10,000	$10,000
Accumulated Depreciation	$19,400	$21,728	$24,444
TOTAL LONG-TERM ASSETS	$24,400	$27,328	$30,744
TOTAL ASSETS	$294,000	$329,280	$370,440
Liabilities and Capital	Year 4	Year 5	Year 6
Current Liabilities
Accounts Payable	$18,700	$20,944	$23,541
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
SUBTOTAL CURRENT LIABILITIES	$19,000	$21,280	$23,919
Long-term Liabilities	$0	$0	$0
TOTAL LIABILITIES	$15,000	$16,800	$18,883
Paid-in Capital	$30,000	$30,000	$31,000
Retained Earnings	$53,000	$57,770	$63,547
Earnings	$193,400	$210,806	$231,887
TOTAL CAPITAL	$285,000	$310,650	$341,715
TOTAL LIABILITIES AND CAPITAL	$300,000	$329,280	$370,440
Net Worth	$293,400	$319,806	$351,787

8.6 Business Ratios

Ratio Analysis
	Year 1	Year 2	Year 3	INDUSTRY PROFILE
Sales Growth	7.25%	8.03%	8.90%	3.00%
Percent of Total Assets
Accounts Receivable	9.21%	10.20%	11.31%	9.80%
Inventory	5.39%	5.97%	6.62%	9.90%
Other Current Assets	2.11%	2.34%	2.59%	2.40%
Total Current Assets	149.80%	151.00%	152.00%	158.00%
Long-term Assets	11.55%	11.60%	11.64%	12.00%
TOTAL ASSETS	100.00%	100.00%	100.00%	100.00%
Current Liabilities	4.90%	4.94%	4.98%	4.34%
Long-term Liabilities	0.00%	0.00%	0.00%	0.00%
Total Liabilities	7.59%	7.65%	7.72%	7.38%
NET WORTH	100.45%	101.25%	102.19%	110.00%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	94.60%	97.15%	99.87%	99.00%
Selling, General & Administrative Expenses	93.56%	96.09%	98.78%	97.80%
Advertising Expenses	1.52%	1.56%	1.60%	1.40%
Profit Before Interest and Taxes	41.50%	42.62%	43.81%	33.90%
Main Ratios
Current	34	35	36	32
Quick	33	33.8	34.645	33
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.
Activity Ratios
Accounts Receivable Turnover	7.7	7.8	7.8	N.A.
Collection Days	100	100	100	N.A.
Inventory Turnover	32.4	34.02	35	N.A.
Accounts Payable Turnover	15.6	16	16.3	N.A.
Payment Days	27	27	27	N.A.
Total Asset Turnover	2.5	2.5	2.6	N.A.
Debt Ratios
Debt to Net Worth	-0.04	-0.03	-0.04	N.A.
Current Liab. to Liab.	1	1	1	N.A.
Liquidity Ratios
Net Working Capital	$244,000	$257,664	$272,093	N.A.
Interest Coverage	0	0	0	N.A.
Additional Ratios
Assets to Sales	0.85	0.87	0.89	N.A.
Current Debt/Total Assets	1%	0%	0%	N.A.
Acid Test	29	29.12	29.16	N.A.
Sales/Net Worth	2.1	2.2	2.2	N.A.
Dividend Payout	0	0	0	N.A.

FAQ

• 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 set up 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 is not much difficult. You can make profits right after starting a hardware store.

Download Hardware Retail Franchise Business Plan Sample in pdf