One dollar or two dollars or everything is under five dollars! The prices charged for the items in a retail discount store may be low, but Statista, the statistics portal, projects the sales of discounted consumer goods and grocery items, like those sold at Dollar General and the Dollar Tree chain stores, will add up to over $27 billion dollars by the year 2016.
Location, Location, Location and Merchandise
There is money to be made in discount stores whether opening a franchise or starting a new business. The success of the store is generally based on two factors. First, the location has to be right because the store should not be in direct competition with a powerhouse chain like Walmart. Second, the discount store needs a steady supply of varied merchandise that can be sold at low prices.
The first step towards a grand opening is writing a business plan – maybe two. The first business plan is a guide for the entrepreneur. The second business plan is needed if the audience is potential investors. It is an adaptation of the original plan for success. Business plans should always be written to the audience, a fact that often gets lost in the excitement of opening a new enterprise.
Factors that Matter
Every business plan has traditional sections like marketing, operations, and financial projections, to name a few. However, it is the content in the sections that is most important. It takes more than section headings to call a document a business plan.
Beyond the details like company structure, customer demographics, and type of merchandise, there is an intersection of critical issues for the business owner and the investor that are addressed in the business plan. They include the following:
• Who will finance the startup and how much is needed?
• What neighborhood or area will the store be located in so it can cater to the most likely shoppers?
• What are the store’s objectives in terms of profitability, pricing, community participation, and so on?
• Is the mission statement concise, clearly written, and able to provide the entrepreneur direction for years to come?
• What specific factors make the entrepreneur believe this retail discount store can succeed?
• What are the planned steady sources of merchandise for the store? Without an inventory that is priced right, the store will not succeed. Typical merchandise consists of name brand products that are seconds, discontinued product lines, over-runs, and products from store close-outs.
• What is the competition and where is it located in relation to the new business? Open the store in a strip mall next to Walmart and it could be difficult to succeed. Open the store in a neighborhood in a free-standing building along a busy road, and the store is likely to stay busy and build a loyal clientele.
• What assumptions were made concerning items like interest rates, payroll expenses, customer behaviors, suppliers, and so on?
Success Factors Of A Retail Discount Store Business Plan.
Writing a retail discount store business plan requires digging deep into the factors that equate to success. It is easy to overlook important items like the business assumptions the entrepreneur is making. Success is found in the details. Entrepreneurs who are concerned they may forget one or more important success factor should get assistance with business plan writing.
Illustrative business plan samples
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.