Adelaide Convenience Store: MBA601 New Venture Short Business Plan

This business plan outlines the establishment of a convenience store, "ConTlet", in Adelaide, Australia. It begins with a description of the venture, including its products (ready-to-eat foods, beverages, household staples) and services (click and collect, home delivery). The plan analyzes the competitive retail industry in Australia, highlighting the growth of convenience stores and key trends like premium and smaller stores. It includes a technology plan (ERP inventory system), a detailed marketing plan (target market, product, pricing, place, and promotion), and a comprehensive financial plan with income statements, cash flow projections, and balance sheets. Procurement, production, organizational, and operational plans are also presented, including machinery, suppliers, outsourcing, organizational structure, and an exit strategy. The plan concludes with recommendations and references to support the venture's viability in the competitive Australian market. The financial plan provides three-year projections and breaks down the break-even point. The plan also covers the machinery and equipment for the store, suppliers of raw materials, and outsourcing aspects.

MANAGEMENT OF
ENTREPRENEURSHIP

TABLE OF CONTENTS
DESCRIPTION OF BUSINESS.....................................................................................................1
Venture description.....................................................................................................................1
Products and services..................................................................................................................1
Industry type...............................................................................................................................1
Mission statement.......................................................................................................................1
Business model...........................................................................................................................1
DESCRIPTION OF INDUSTRY....................................................................................................2
TECHNOLOGY PLAN...................................................................................................................3
MARKETING PLAN......................................................................................................................3
FINANCIAL PLAN.........................................................................................................................4
Income statement........................................................................................................................4
Cash flow....................................................................................................................................5
Balance sheet...............................................................................................................................6
PROCUREMENT AND PRODUCTION PLAN............................................................................8
Machinery and equipment...........................................................................................................8
Suppliers of raw materials...........................................................................................................8
Outsourcing aspects....................................................................................................................8
ORGANIZATIONAL PLAN..........................................................................................................9
Organizational Structure.............................................................................................................9
Roles and responsibilities of members of organization..............................................................9
Overview of plan.........................................................................................................................9
OPERATIONAL PLAN................................................................................................................10
Description of company’s operations........................................................................................10
Exit strategy..............................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

DESCRIPTION OF BUSINESS
Venture description
The “ConTlet” is a convenience store which will be located at Adelaide in Australia. This is
retail outlet which sells a particular range of ready to eat and prepared foods, bottled, household
staples, fountain beverages and tobacco products and many more. The size of the store is around
44000 ft square and will be operating 24 hours in effective manner.
Products and services
The “ConTlet” would sell similar products to the convenience stores in similar packaging sizes,
quantity and quality as compared to other stores. It consists of magazines, newspapers, fruit
juices, soft drinks, hot and cold snacks, sports drinks along with limited number of grocery
articles like microwaveable meals, canned soups, bread, condiments, auto products such as
cleaning supplies paper products etc. With reference to this, it offers “Click and Collect” service,
home delivery and online payment services.
Industry type
The convenience store industry is comprised in retail industry which has laid emphasis on
offering the public with convenient location for quickly purchasing through an array of different
consumable products, food and beverages, services. This industry has attained growth which has
outperformed the supermarkets as per AACS State of Industry report Andriani (2017).
Throughout the world, each store could sell Alcohol but Australia is one of few countries where
it is not legal.
Mission statement
The primary objective is to develop innovative and revolutionary distribution outlet which
significantly decrease prices for its customers and offer best services with systematic level of
quality. The “ConTlet” seek to be at top within market and daring innovative idea to gain market
share and developing more than average margin.
Business model
There will be implication of revenue based model which is a basic framework to produce
revenues. It determines revenue source for pursuing value to offer, pricing value and one who
pays for value.
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DESCRIPTION OF INDUSTRY
This industry is highly competitive in Australia which has rapid growth of German company
ALDI within 5 years in the industry. It is observed as one of the strongest in the world and in
year 2016 and long and short term outlook with this industry could not be undeniable positive
outcome and value proposition in Australian retail landscape. The customer first approach has
been ensured and optimises the performance of stand-out categories like beverages, food and
coffee would underpin bright future for this convenience channel White and Muldoon (2015).
These Australian stores are raised capitalising on significant growth categories and quality
elevating, freshness and variety of offering food. There is increment in Australians who opts
gluten free products and with absence of diagnosis of celiac disease. Moreover, there is
increment for preference of premium or gourmet food products within certain customers. With
context to trends and price competition, Woolworths and Coles lays emphasis on quality via
private label products for fending competition through global competitors like Costco and Aldi.
Numerous grocery companies are expected for shrinking 1.4% in 5 years to June 2020, with
establishment would attain growth by 1%.
However, smaller stores in areas of strong competition might be required for rethinking
value proposition and lays focus on customer segment as niche and offering products which are
highly specialised. The retail grocery market’s trend is shaken up by three major trends which
are local and sustainable, premium and smaller stores. With context to local and sustainable,
expertise store promotes local produce by laying special emphasis on sustainability. On basis of
premium, Australians are willing for paying premium for organic articles and perceived through
health benefits related to superior quality (Future of retail, 2018). Henceforth, smaller stores
leads to different supermarket giants are launching smaller format stores within metro area and
competing with convenience stores.
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Figure 1 Australian fresh fruit and vegetable market share
(Source: Future of retail, 2018)
While analysing, it major competitors are Woolworths and Coles together has grabbed
great market share of fresh fruit and vegetable sector in year 2018 as compared to combined
groceries. During observance of past year, Woolworths had seen a net 1.3% increment in market
share and driven through shopping convenience and competitive pricing.
The future trends in this sector is Organic food, packaging products which are environment
friendly, functional food articles with claim of benefits regarding health, healthier drinks which
leads to digestive benefits.
TECHNOLOGY PLAN
The company would adopt ERP inventory system for tracking the inventory, reorder level
whereas this data technology plays very essential role within retail supply chain for driving
efficiency. Digitisation is also very significant for advertising and even to measure effectiveness
of consumer advertising through popular search engines.
MARKETING PLAN
The target market for this business is of every age person especially residential area with income
range which underlies in middle class. This store will serve whole population of its geographical
areas but lays emphasis on customer with requirement of purchasing items in normal working
hours like swing shift employees, shoppers who are looking to snacks and substitutable items. It
is positioned by offering 24/7, click and collect and home delivery service.
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Product: The ConTlet offers fresh meal, groceries, fuel and expertise in organic meal. It has
presence of varietal product range which comprises confectionery, coffee, snack foods, toiletries,
newspapers, soft drinks and magazines along with over the counter drugs as well. Apart from
this, freezer goods such as Frozen fruits, Ice creams, Frozen Meat, Wedges and chips and Frozen
gluten free.
Price: This organization would be giving qualitative product at affordable or lower prices. Its
main objective is to lower cost of weekly basket articles however, Australia’s cost of living is
very high so it is a unique positioning of ConTlet. This will also give additional advantages such
as discounts and incentives on fuel prices.
Place: It has presence of 1 outlet but strong distribution reach to its users especially to locality
people. It strives for building network with aim to target the growth according to objective.
However, it is a single store but home delivery service is available along with Click and collect.
There is an online platform as mobile app for shopping so in this context, it will have to deliver
at home as it leads to ease in availability and to be accessible.
Promotion: This is a start-up which is comprised in small enterprises as this revolves around less
prices offered through supermarket. There will be implication of tagline like Buy 1 get 1 free and
cash back offers as well. Apart from this, company could use different packaging bags which are
eco-friendly and launch of various other campaigns which gives message of pollution free and
health environment Hidayat (2015). The most common mode could be used for advertising is
newspapers, magazines, social networking websites such as YouTube, Twitter or Facebook page
through positive marketing.
FINANCIAL PLAN
(In AUD)
Income statement
YEAR 1 YEAR 2 YEAR 3
Total Sales 24801.06 31497.35 40001.63
Direct Cost of Sales 19096.82 24252.96 30801.25
COST OF SALES 19096.82 24252.96 30801.25
Gross Profit margin 5704.24 7244.39 9200.37
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Gross Margin % 23% 23% 23%
Total expenses
Salaries 1674 2140 2380
Sales and Marketing Cost 600 1300 1300
Depreciation 72 72 72
Leased equipment 500 600 600
Rent 840 840 840
Utilities 288 300 300
Accounting cost 65 90 90
Insurance 144 144 144
Payroll Taxes 0 0 0
Other 380 450 450
Total Operating cost 4563 5936 6176
Earnings Before Interest and Taxes 1141.24 1308.39 3024.37
EBITDA 1213.24 1380.39 3096.37
Interest Expense 162.5 164 146.5
Taxes Incurred 293.62 343.32 863.36
Net Profit 685.12 801.07 2014.51
Net Profit/Sales 2.76% 2.54% 5.04%
Cash flow
PRO FORMA CASH FLOW
YEAR 1 YEAR 2 YEAR 3
Cash Received
Cash from Operations
Cash Sales 24801.1 31497.4 40001.6
CASH FROM OPERATIONS 24801.1 31497.4 40001.6
Additional Cash Received
Current Borrowing 50 0 0
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Long-term Liabilities 500 0 0
Investment Received 540 780 0
SUBTOTAL CASH RECEIVED 25891.1 32277.4 40001.6
Expenditures
Operating expenditures
Cash Spending 1674 2140 2380
Bill Payments 21778.8 31348.7 36206.9
MONEY SPENT ON OPERATIONS 23452.8 33488.7 38586.9
Additional Cash Spent
Principal Repayment of Current Borrowing 0 70 130
Long-term Liabilities Principal Repayment 0 50 100
Purchase Long-term Assets 0 0 300
Dividends 0 0 500
SUBTOTAL CASH SPENT 23452.8 33608.7 39616.9
Net Cash Flow 2438.29 -1331.3 384.75
Cash Balance 3576.49 2245.19 2629.94
Balance sheet
YEAR 1 YEAR 2 YEAR 3
Assets
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Current Assets
Cash 3576.49 2245.19 2629.94
Inventory 3714.02 4716.8 5990.34
Other Current Assets 80 80 80
TOTAL CURRENT ASSETS 7370.5 7041.99 8700.27
Long-term Assets 720 720 1020
Depreciation 72 144 216
TOTAL LONG-TERM ASSETS 648 576 804
TOTAL ASSETS 8018.5 7617.99 9504.27
Liabilities and Capital
Current Liabilities
Accounts Payable 4285.18 2423.59 3025.37
Current Borrowing 200 130 0
Other Current Liabilities 100 100 100
TOTAL CURRENT LIABILITIES 4585.18 2653.59 3125.37
Long-term Liabilities 1500 1450 1350
TOTAL LIABILITIES 6085.18 4103.59 4475.37
Paid-in Capital 3740 4520 4520
Retained Earnings -2491.8 -1806.7 -1505.6
Earnings 685.12 801.07 2014.51
TOTAL CAPITAL 1933.32 3514.39 5028.91
TOTAL LIABILITIES AND CAPITAL 8018.5 7617.99 9504.27
Net Worth 1933.32 3514.39 5028.91
Break Even point
Monthly break down of revenue: 1653.26
Assumptions:
Variable cost (average percent): 77%
Estimated fixed cost on monthly basis: 380.25
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PROCUREMENT AND PRODUCTION PLAN
Machinery and equipment
This aspect is essential in store management with better storage and installation of
machinery for proper maintenance of quality and standards of many products. ConTlet
convenience store will be implementing a series of equipment for proper security and storage
aspects. It includes electronic equipment such as computers, printers, Debit machine, software
etc. and fixtures with furniture like Cash counter, Cash register, Store shelving, chairs and
shopping baskets. These are mainly prominent for giving a better experience to the customers
and clear instructions to avoid any manual assistance (Alliance, 2016). Furthermore, this will
also keep storage machines like freezer and few door coolers for maintaining the shelf lives of
several diary and groceries products.
Suppliers of raw materials
The store’s owner will be attaining a membership of Adelaide Convenience Buyers to
have better deals with good negotiation skills among a group of vendors and enhance the buying
capacity through reducing the overall operating costs. Additionally the focus will be to connect
with well established suppliers in order to provide authenticate and the best products with high
levels of quality. Such move will be beneficial to establish their brand or company among the
eyes of the prominent players like suppliers, wholesalers and more.
Outsourcing aspects
This ensures about streamlining all the operational activities of the business of
establishing a convenience store (Reid & Wettenhall, 2015). It will also help the owner of
ConTlet convenience store to strategically allocate the resources, divide the designations of staff
on the basis of expertise and experience to optimise the energy and time efficiency. For instance,
the company might be using the saved up funds on investing on commodity tasks like janitorial
services or customer services. This will be useful in creating a reputation and credibility among
the interested shareholders and also gain the customers’ attention.
ORGANIZATIONAL PLAN
Organizational Structure
Any organizational plan outlines the staffing aspect in terms of proficiency and
experience and allocation of resources to maintain the quality and operating procedure (Nielsen,
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Luppe & da Silveira, 2014). This convenience store will be based in Adelaide and is going to
have three employees with a horizontal structure.
Roles and responsibilities of members of organization
The primary operator will be the sole owner to overlook all the operations including
budgeting, merchandising, accounting, ordering, receiving and daily report making. This will
assist in single and unified ownership and minimise the queries or confusions regarding
communication with customers or suppliers or distributors. Next is the Manager who is going to
oversee the daily operations in the store and also support in maintaining the financial reporting
and bookkeeping for better execution. Lastly, an assistant manager cum personnel has the major
responsibilities of looking after merchandising, maintenance and warehousing departments.
Their line of responsibility is to report to the Manager who in turn submits daily reports to the
Owner and such structural arrangement is beneficial to attain the overall goals.
Overview of plan
In regard to the above, the prime objective is also to synchronise the departmentalization
with this company’s resources that involving wide range of materials. It is that step to understand
the requirements and demands of the customers to have better visibility among the competitors.
Moreover, this allocation will also aid in fulfilling the expectations in terms of the legal and
ethical standards and in accordance to the Australasian Association of Convenience Stores
(AACS) that have been associated with the appropriate guidelines to establish a convenience
store in Australia (Costa, 2018). Herein, the Functional Departmentalization will be suitable to
utilize the expertise and incorporate it with the resources by moving towards a common goal of
profitability and productivity as well. Thus, this plan must be executed with detailing and in
connect with the business scenarios.
OPERATIONAL PLAN
Description of company’s operations
This store will be focusing on providing the best services by limiting the floor area
through proper segregation of a small office at the back, store area, stock or storage room and
washroom. It will optimise the time for the temporary jobs like janitor, personnel etc. by
restricting the cleaning zones and clearing the routes via proper signage. Here the aim is to
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recognise the challenges and problem areas by outlining the day to day operations in more
synchronised order for better managerial functionalities (Davies, 2012). Nevertheless, the setting
of the store areas by keeping the shelves, baskets, etc. sequentially must be executed efficiently
and also consists of proper installation of the necessary equipment. It is significant to fulfil the
overall requirements and other installations for material handling to be done by all the three
employees.
Exit strategy
This is imperative for the small entrepreneurial ventures to minimise the risks and
constantly controlling the unregulated investments or working practices in any business to have
better growth rate. The convenience store will be using few strategies to have a gripping effect
for complete control over the goals. Primarily, the owner must promote collaborative nature of
partnership with suppliers, wholesalers, and clients as well (Montoya-Torres, Muñoz-Villamizar
& Vega-Mejía, 2016). Moreover, the emphasis is on creating the brand image so that in the near
future, this company can be sold in the open markets. Henceforth, this stage will help this store’s
owner to resale the profitable business in future at faster pace especially due to the earned
goodwill and will support in increasing the returns effectually.
CONCLUSION
It is clearly summarised the new venture short business plan of opening a convenience
store in Adelaide by the name ‘ConTlet’. Here an elaborate planning of marketing, finances,
technology, operations, procurement and production and organizational structure is outlined to
have an access and utility of the available resources and staffing. In addition, the focus is on
gaining insights about each aspect to have a better viewpoint to handle the materials and
connecting with right vendors or suppliers in organised manner. These steps proved to be useful
and give an upper hand in creating a draft before the head start and managing the effectiveness
on all the levels.
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REFERENCES
Alliance, S. C. (2016). Contactless EMV Payments: Benefits for Consumers, Merchants and
Issuers. Smart Card Alliance, US, 4-6.
Andriani, M. (2017). The Influence of Store Image, Service Quality, Private Label Brand Image,
Perceived Risk, and Price Consciousness on Purchase Intention. Jurnal Ilmu Manajemen
& Ekonomika, 9(1), pp.73-90.
Costa, A. P. D. (2018). New trends in convenience stores (Doctoral dissertation).
Davies, R. (2012). Retail and Commercial Planning (RLE Retailing and Distribution).
Routledge.
Future of retail. (2018). [Online]. Available through <
https://business.nab.com.au/wp-content/uploads/2017/09/The-future-of-retail-September-
2017.pdf>.
Hidayat, P.H.M. (2015). THE INFLUENCE OF PRODUCT QUALITY, PRICE, STORE
ATHMOSPHERE, AND PROMOTION EFFECTIVENESS ON CONSUMER
PURCHASE DECISION OF FLINDERS LANE ESPRESSO MANADO. JURNAL
BERKALA ILMIAH EFISIENSI, 15(5).
Montoya-Torres, J. R., Muñoz-Villamizar, A., & Vega-Mejía, C. A. (2016). On the impact of
collaborative strategies for goods delivery in city logistics. Production Planning &
Control, 27(6), 443-455.
Nielsen, F. A. G., Luppe, M. R., & da Silveira, J. A. G. (2014). Horizontal Alliances among
independents and non-integrated food retailers: a worldwide analysis. International
journal of Business and Commerce, 3(10), 21-50.
Reid, R., & Wettenhall, R. (2015). Shared services in Australia: is it not time for some
clarity?. Asia Pacific Journal of Public Administration, 37(2), 102-114.
White, G.F. and Muldoon, C.V. (2015). Convenience stores and routine activities in a summer
tourist destination. Criminal justice studies, 28(3), pp.280-296.
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