Documente Academic
Documente Profesional
Documente Cultură
Authors
1. Syed Abdullah Mohammed Munim Ahmed (36-20)
2. Raqibul Islam Chowdhury (36-34)
3. Md. Nabil Barket (36-45)
4. Amit Islam (36-36)
5. Md. Sayeed Billah (36-12)
BUSINESS PLAN OF THE GROCERY SHOP
Table of Contents
Executive Summary
“The Grocery shop” is a business we are planning to do, is as like every shop beside houses in
Dhaka city street. In our Introduction to business subject we are supposed to plan for a unique
business. Now you may ask what so unique about a Grocery business that anyone can start over
night? That’s what we planned for in this research of ours. We want to make a unique grocery
convenience shop in an upper middle class area in Dhaka that no one thought off before. As we
know even though there are many grocery shop in our town none of them are very innovative
when it comes to focusing on buyer group. We always think about end customer, but in higher
and higher middle class family use a group of people like Security guard, Driver’s, Maid’s and
care-taker type people to buy their product. Thus we want to start a commission based system for
these people to buy our product more. We discussed about the plan of executing this business in
the this “Business Plan”.
As per the Google.com mission statement is – “A formal summary of the aims and values of a
company, organization, or individual.” So to create our mission statement we thought of putting
our focus on buyers in a written manner this we thought of the below-
Mission Statement: “We strive to offer our customers & buyers the ultimate commission and
discount, the best available product, and the utmost convenience.”
Now vision as per the Wikipedia - “A vision statement is a company's road map, indicating both
what the company wants to become and guiding transformational initiatives by setting a defined
direction for the company's growth.” Our roadmap of “The Grocer Shop” in statement is-
Vision Statement: “At The Grocery Shop our vision is to enrich the life of all the buyers and
customers in Dhaka by giving them the best value in every product they buy.”
Our Goals
We would like to change the way customers and buyers think about “Grocery Shopping
Experience”. We will introduce a new dimension to this small business and make profit at the
same time. As innovators we will learn from the big players and also add our own thoughts into
it to make it the ultimate example of grocery shopping. Our main motto is to bring out the best
combination of service and products.
For buyers like security guard, driver’s, maid’s and care-taker who buys for the ultimate
customers in our target segments. We will introduce cash back. Like after every 25 products we
will give they buy in three months we will give the one-time cash back of TK50. These 25
products has to be priced more then Tk40 each at least.
Customers we will introduce a weekly day to sell each product in a discounted rate if they buy
product of more then TK 500 all together.
Thus our target is to sell in bulk rather then earning profit in individual product as usual retail
price. We will provide this discounts and commission from our own profit of product to sell
more. So that ultimately our excess selling results in better profit then competitors.
The Grocery Shop–Dhaka, will be located in the central of Dhaka city, Located at 36 South
Johnson Street, in the heart of Mohammadpur Dhaka. This business plan is prepared to obtain
joint financing in the amount of 2,50,000 taka begin work on site preparation and modifications,
purchase equipment, and to cover expenses in the first year of operations. We are arranging
money all our self as we are five people start the business and everyone contributing equally.
The Grocery Shop will be incorporated initially as a partnership business. This will shield the
owners from issues of personal liability. We the five investors will be treated as shareholders and
therefore will not be liable for more than their personal investment. The financing, in addition to
the capital contributions from the owner and shareholders, will allow our store to successfully
open and maintain operations through the year. A large initial capital investment will allow our
store to provide its customers with a fully featured grocery store. A unique, upscale, and
innovative environment is required to provide the customer with an atmosphere that will inspire
continued use. The successful operation of year one will provide our store with customers that
will allow it to be self-sufficient in year two.
The Grocery Shop concept, as shown in our plan, has an excellent profitability level and growth
rate. Our competitive edge, along with new retail techniques and technology, puts our store in
the forefront of the retailing of perishable and nonperishable consumer goods. We are living in
an age where unique grocery store environments are in great demand. Our store will differ from
the traditional grocery store because of our added personal touch.
Buying used equipment, or a combination of new and used, can substantially reduce start-up
costs. However, new equipment also carries warranty and service agreements. Again, shopping
around is simply smart business. While the advantage of leasing is a significantly smaller initial
cash outlay, the disadvantage is that you do not acquire equity and build a balance sheet. A
financial statement showing a healthy net worth is good for any business and it may be to our
advantage to purchase the real estate for the business, a much better asset, and lease the
equipment that will depreciate with time. On the other hand, changes in tax laws regarding
depreciation have made purchasing equipment more advantageous. If the equipment is needed
short-term, a leased item ceases to be an expense when it is no longer needed. There are many
variables to consider. In contrast, the efficiency of new equipment can sometimes offset the initial
cost. As discussed above, the electrical use of a grocery store’s freezer and refrigeration units can
be one of the largest expenses for the business. Any money spent on efficiency now will pay
monthly dividends on your electrical bill for years to come. Spend some time with a
refrigeration/electrical expert discussing the most efficient layout of equipment, compressors and
lines.
Office equipment
Used desks, chairs, file cabinets, and book shelves can be a source of savings that has no effect
on the atmosphere of the sales floor. However, the office computer system is one of the most
important parts of your management system. Reliability is important, so purchase accordingly.
There are many software systems available for accounting, inventory, scheduling and marketing
(e.g., Quick Books from Intuit). These programs can greatly improve our efficiency as a store
owner. Due to the changing nature of computer technology, care should be used when purchasing
a system to make sure that it allows adjustments to changing technology. Other general office
equipment and supplies will be needed. Sales receipts can be printed or standardized forms can
be used. A few thousand taka should buy letterhead stationery, envelopes, business cards, bags,
boxes, cash register tape, writing supplies, and other minor supplies.
Start-up Expenses
Start-up expenses include any expense the business may face during the first few weeks and
months of the businesses life. Some may be one-time costs while others may be the first month
of an extended contract. Below are examples of some of the initial costs that may be incurred.
Each situation is unique but this list is representative of typical start-up expenses for our grocery
stores.
• Initial Inventory
• Rent
• Equipment/Fixtures/Security
• Leasehold Improvements
• Licenses/Permits
• Grand Opening/Advertising
• Utilities/Phone Deposits
• Accounting/Legal
• Owner/Operator Salary
• Payroll
• Supplies
• Insurance
Operation hour
Setting hours of operation for a store is as important to customers as to the owner. Residents who
commute outside the community to work cannot shop if the store closes before they return home.
Determine if the store hours need to provide for early morning shoppers on their way to work or
customers wanting lunch items. Supper time is important for last minute items, and evening and
weekend hours provide a service for those customers involved in work or other business during
the day. However, long store hours must be covered by us 10 a.m to 10 p.m. Customers will not
shop if they perceive they will not get the same good service during certain hours, if at all.
Service
High-quality service is extremely important in a small store like us. In order to compete with
larger stores, we provide quality personal service and be continually looking for ways in which
to improve. We also can provide complementary services in addition to grocery-related service
to add value to shopping. We start different new Ways to attract customer traffic may include
gasoline, lottery tickets, dry cleaning and, photo copying, deli or restaurant items, and bakery
goods. Other ways to increase revenue may include catering or home delivery.
Social Responsibility
A business can use the concept of social responsibility to help benefit society as a whole. Though
common in practice for many large corporations, social responsibility is not always on the agenda
for our grocery businesses. However, our businesses can benefit greatly from showing social
responsibility, provided it is done right. There are several ways of showing social responsibility,
including in-house activities and initiatives in the community.
To boil it down, visibility of these key elements can be achieved following a set of seven clear
steps and activities:
• Go local to insure traceability, freshness, and nutrition. Engage with local farmers wherever
possible.
• Protect nature, and save fish. Be sure your fish and food is from sustainable sources.
• Think welfare and treat our employees and suppliers well: Employee attitude is important. Word
gets out
• Eliminate and recycle food waste. Be sure we have a clear procedure to dispose of compostable
waste separately from trash. Engage with a local community group that will take unsellable and
post-expiration date food for food banks.
• Provide options for customers who wish to avoid processed food and products.
• Make our facility sustainable with energy efficient design, lighting, and Leed design. Some
stores, such as Shapno, have even implemented energy efficient hydrogen fuel cells for their
handling equipment.
• Provide a sustainable solution for our customers to get their food home. Many shoppers now
bring their own bags to carry their groceries. However, for those that don't, a sustainable carryout
bag will be your emblem to show customers and the community that you care about the
environment. Instead of paper or plastic, which are both energy resource intensive (and expensive
in the case of paper), consider offering your customers a product such as ECO grade Degradable
bags. These bags cost the same as plastic, but solve the plastic bag pollution issue, as they will
photo-degrade to a non-toxic residue from sunlight exposure within 240 days if littered. In
addition, they are recyclable with plastic and use less energy and produce fewer greenhouse
gasses in production than plastic or paper. As a follow-up to all we do in-store, ECO grade bags
provide a medium to send the message that we care about the environment home with our
customers.
Products
As the most sustainable business in the industry, “The Grocery Shop” plans to offer a greater
number of products and services in the future so as to create another dimension of competitive
advantage. So that our customers will feel secure, we will subscribe to the security services
offered by the shopping center of which we are a part. This will cut down on graffiti and loitering
and insure the safety of both owners and customers.
All products will be locally or nationally branded such as Pran, Fresh, Uniliver, Coca Cola, Pepsi
etc. In addition, each transaction will add to create personal accounts that can display preferred
items, retain shopping lists and other services. An interactive "customer service rep" will be able
to answer questions to the customers.
We will also on a weekly basis introduce a day call “Grocery Haat Baar”. It means on a particular
day of the week we will send products list to the customer with discounted price in each product.
That list will have a place where the can mark what do they need and send it back to us, writing
their details. What we will do is, directly send the products at their home to use and collect the
money likewise. In this case the “Cashback” benefit will not be valid.
We will also take the product back within one day if they face any issue and ensure that we
change the product similarly.
Differentiated product
We are not producing any commodity or differentiated product but our target is to provide a
service to the consumer. That are good different then rest of our competitions and in the mean
time provide a nice experience to the consumer. We are differentiating ourselves by offering a
value service that no one else been able to pull of in this granular level retail business of grocery
shop.
Market Assessment
Market Segments
We can divide the whole market of into seven segments when it comes to grocery shopping. All
these segments are described below.
Fast and Furious: This type of consumers are quick shoppers, perhaps family persons and job
holders. This segment is one of the most important segment for our shop as they tend to be very
loyal to the grocery shop.
Budget conscious: They tend to seek for low priced or low branded products. They seem to be
the people who are mostly attracted to the promotional offer of the products. They are price
sensitive, focus on Everyday low pricing and can be very loyal to the shop.
A day out: A very crucial segment for our shop. They tend to spend a lot of times browsing and
selecting their products. They are usually female, most likely housewives, who enjoy bargaining
for a certain product.
Gourmet focus: They are the premium consumers of our shop. They are attracted to the branded
and premium products and do not compromise with quality. These consumers are upper middle
to upper class, characterized by the upper level of both education and employment status.
Smart shoppers: This segment is the most critical portion of the consumers we can have who are
seeking for the best value product offer. They are neither budget conscious people nor the
Gourmet focus. To be the market leader of the certain area, we need to grab this segment as many
as possible.
Here we go again: They are kind of the opposite of the "A day out" segment. They are convenient
shopper, don't come to the shop physically if they do not have to. They usually send their drivers,
housekeepers or house guards to shop for them. In Dhaka city, this segment can be very crucial
for our shop and we must grab the attentions of this segment as we have a lot to offer for them.
Variety seekers: This is the lease important but yet a significant segment for our shop. They are
quite responsive to the new tastes and flavors, especially for the foods. They are the higher social
class, most likely the students. A deep market analysis is very important to grab these consumers.
Segments Potential
Fast and There are a lot of job holders and family persons living in our prescribed area as the
Furious location of our business is in the middle of residential and commercial area. Thus, there
is a potential market for “Fast and Furious” people.
Budget Most of the people living in our location is middle class. They are very budget conscious
conscious when it comes to grocery shopping. Besides, frequent price hiking also concerns these
people. So we have to provide the needs and wants of a lot of people of this segment in
a considerable price.
A day out Now a days, most of the housewives come to grocery shops to buy their daily necessities.
Moreover, the location of our business is located in a secured area with a healthy and
sound neighborhood. It will encourage these people to come to our grocery shop and to
spend their times here as long as they want.
Gourmet focus We do not compromise with quality which this segment are very much aware of. We
provide both the normal and premium products ensuring the highest quality. The people,
both middle and higher class living here, will be ensured the quality products from us.
Otherwise, they can return and get refund for the products they bought from here.
Smart shoppers We also value the needs and wants of smart shoppers. We frequently perform market
research about the potential new products before our competitors. As it is a partnership
business, we do not compromise with the varieties of products and the scopes to expand
our product lines and mixes.
Here we go Now a days, there is a culture practiced in Dhaka city which is performing shopping by
again the house guards, drivers or housekeepers. We appreciate this practice and providing a
coupon system for these secondary customers.
Customer Needs
There are certain customer needs the market is not currently fulfilling. Now a days, the customers
do not just concern about only price or only quality. They want the quality product with a
considerable price because of unstable economic condition of Bangladesh. Thus, maintaining a
balance between the price and quality is very essential.
Secondly, there are not sufficient marketing researches conducting for the grocery shops. The
owners of grocery shops provide very common products with less varieties without conducting
any research. There are a lot of grocery shops situated in Dhaka city which allows the consumers
to browse many options to buy their desired products. For that reason, to survive in a very
competitive market, the shop owners need to conduct market research to meet the expectations
of consumers.
Furthermore, people now a days are very concerned and intelligent while responding to the
market offers. If you think you can put the price of a product with “99” digit and people will fall
for it, you will be living in fool’s dream. The consumers are now well aware of these marketing
tricks and they carefully choose the discounted products. Thus, there is no place for unnecessary
and cliché marketing offers like fake discounting (increasing the price and then offer discount).
Finally, the shop owners do not always consider the economic, political, social, environmental
or ethical conditions before pricing and offering products. They need to think about what
conditions are affecting the market, how much money the customers have, what makes them feel
good about buying, what they expect of you, what they think about you and your competitors.
Opportunities
2. More services and offerings for customers and focus on advertising to build image
further.
4. More young professionals and students start living here who prefer varieties of
products, particularly good products in competitive price.
5. With the recession setting in most people are turning to value for money products, the
store can position itself as the best quality products at low prices
6. Improve its Brand image buy creating better shopping experience through sales staff
training, better store layouts and better quality products
Threats
2. Less prices offered by big retailers for similar products create intense competition.
4. Robbery attempts and other threats led by local mastans lead to concerns for property
loss.
Bargaining High
Concious
power of Buyers
Bargaining
buyers Power
The intensity of competitive rivalry in the grocery retail industry is very high. In grocery industry
competitors are really strong and they have been working in this industry for a long period of
time. Our shop might face intense competition from its local competitors. Besides, some
supermarket chains like Agora, Swapno, Meena Bazar might hamper our productivity flow by
offering excessive promotional offer as they have got huge investment and brand values behind
them. Our business location has many local rivals that want to maintain a consistent stronghold
in Dhaka city which will be a big challenge for us. So it is High.
13 Prepared for “Introduction to Business” (EM 501.01)
BUSINESS PLAN OF THE GROCERY SHOP
The bargaining power of suppliers is low. We have strong leverage among its suppliers as we
provide verities of products. Since we mainly target middle to upper-middle income families, we
have to make sure its prices are moderate yet affordable to the market it is positioning itself. Our
shop is also in a better position as it has a multitude of suppliers for various products.
Furthermore, because of the abundance of suppliers, we can capitalize on the switching costs of
firms in the industry and the presence of available substitutes.
The bargaining power of buyers is fairly high. As there are some grocery shops and supermarkets
located in our area, customers have many alternatives to purchase and meet their necessities. In
addition, the consumers of Dhaka city are very price sensitive and attracted towards the low
prices, in addition with the availability of online retail shopping, the prices of products are easily
compared and thus selected. Thus, the customers can switch loyalties with its supermarkets
especially if they don’t get the service they want. However, most likely, shoppers will stay loyal
to supermarkets nearest their homes, for convenience purposes.
The threat of substitutes in the grocery shop is considerably low for food items and medium to
high for non-food items. In the food retail market, the substitutes of major food retailers are small
chains of convenience stores, off license and organic shops which are not seen as a threat to our
grocery shop. Our grocery shop offers a broad range of product and service offerings. In this
diverse nature of business, we cannot stop customers to switch from one brand to another brand
but the extreme quality and excellence can compel the customers to stick to a single brand for a
longer period of time. Moreover, online shopping has already made a foothold in Dhaka city, and
is very popular in selling daily necessities. Still it hasn’t filtered down to buying goods from the
grocery shop as people of Dhaka still prefer to do their shopping themselves and pick the items
themselves from the shelves – which is a good sign for our business.
The threat of entry of new competitors for our business is High. It requires small capital
investments in order to be competitive and to establish a brand name. Gaining planning
authorization from local government does not take a considerable amount of time and resources
to establish new shop.
14 Prepared for “Introduction to Business” (EM 501.01)
BUSINESS PLAN OF THE GROCERY SHOP
Change in per Capita Income: Per capita income has increased to above USD 1,602 in this
fiscal year 2017 and is expected to grow further, especially in urban areas. This change in socio-
economic structure has given rise to a new breed of middle-class who are willing to spend their
higher disposable income in supermarkets rather than wet markets in pursuit of convenience and
social status.
Change in Taste and Fashion: Globalization through internet penetration, international trade
and international television channels have exposed consumers to new ideas. Shopping from
supermarkets, long considered a Western concept, is slowly being accepted by mainstream
consumers in Bangladesh.
Online grocery shopping: Who could tell that a day will come when you would only have to lift
your finger and your grocery will arrive at your door step? Online grocery shops like chaldal.com
not only allow people to get everything that they do at the ordinary grocery store, but they also
get their orders delivered right to their doorstep. Even though it will take a little time for people
to change their mindset about online grocery shopping, but this will eventually be a popular way
of doing grocery in future.
Consumer Awareness: Due to widespread media coverage over usage of formalin and chemical
contaminated consumable products; consumers are more aware of possible health repercussions
of consuming these products. Moreover, since supermarkets promise unadulterated produce,
many conscious customers are slowly turning away from the traditional wet markets.
Marketing Methods
Direct Marketing
Since our business is all about buyers and retail customer, for starter we will introduce direct
marketing. Our business of selling products or services directly to the public, so we will go to
the nearest houses to let people know about our offers. We will talk to people like Security
guard, Driver’s, Maid’s and care-taker in nearest houses and offer them free membership in our
shop and explain the cash back system to them.
We will also make our self introduce about our Haat Baar system to the flat people and send the
leaflets with paper introducing Haat Baar at their door step.
Financial Plan
Start-up Requirements
Consultants 3,000
Insurance 10,000
Others 15,000
Depreciation 20,000
Start-up Funding
Start-up Funding
Year 2017
COGS 340,000.00
EBIT 370,000.00
4,000,000.00
3,500,000.00
3,000,000.00
2,500,000.00
2,000,000.00
1,500,000.00
1,000,000.00
500,000.00
0.00
2017 2018 2019 2020 2021 2022
Assets:
Current Assets:
Cash 260,000
Inventory 100,000
Receivables 80,000
Fixed Assets:
Depreciation 20,000
Current Liabilities:
Accounts Payable 0
Total Liabilities 0
Assets:
Current Assets:
Fixed Assets:
Current Liabilities:
Total Liabilities and Owners' Equity 589,300 631,415 676,547 724,913 776,746
Break-Even Analysis
The following table and chart show our Break-even Analysis. Although our break-even
point seems quite high, we are expecting to have higher than average fixed costs and reach in
break-even point after 24 months from the starting point of our operation. Moreover, we expect
to have a more reasonable positive retained earnings point around year 5.
= 65,000/800,000
= 8.13%
= (25000/0.0813) Taka
= 307503.08 Taka
Ratio Analysis
Ratios 2017 2018 2019 2020 2021 2022
Total Debt to Total Assets 0.00 0.80 0.81 0.82 0.82 0.83
In our first year of our operation, we will not go for any kinds of borrowing – whether it is short
term or long term. That means 100% equity financing will be ensured which will be provided by
the five partners equally (110,000 taka each). From the second year, we are planning to borrow
money from different sources.
i) Banks
ii) Family and acquaintances
iii) Outside investors
At the same time, we will reduce the equity finance significantly from the second year. The
Debt-to-Equity ratio stated above shows how the debt position will be increase from the second
year, from 4.01 to 4.87 in five years. In 2018, the debt-to-equity ratio is projected as 4.01 which
means, the assets of the company will be funded 4.01-to-1 by the investors to creditors.
Here is the expected Return on Equity and Return on Assets for the five years of our business
from the starting date.
As we are performing 100% equity financing in 1st year of our operation, it is definite that out
ROE (return on equity) is very low. From the 2nd year, we are expecting to increase our net
income in positive and accelerating manner, so are our ROE. At the same time, the accelerating
ROA shows how our efficient management is at using its assets to generate earnings.
We will monitor the financial aspects of the business in terms of the provisions of section 184 of
the Companies Act 1994, Rule 12 of the Bangladesh Securities and Exchange Rules 1987, BSEC
Notification dated 07 August, 2012 and IAS (International Accounting Standards) codes as
adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). We will follow the
standard and universal rules for the recording of financial information and the presentation of
results.
Strategic Implementation
As we want to make the “The Grocery Shop” the next big thing in the area that we will be doing
business in, we will have a lot of competitors trying to do the same thing and distract our buyers
and customers.
In order to tackle them we will do the below things to ensure they cannot reduce our business-
• We will keep our customers and buyers warm by keeping us the owner connected with
them continuously by phone and direct means.
• Our strategy will be to keep a warehouse and keep a lot of product of our own and keeping
us connected with our supplier on a continuous basis so that we do not have short of
product.
• We will also maintain a good relationship with our competitors so that they can act as a
supplier in our dire needs.
• We will also be planning for 24/7 grocery shop to increase the activity of our shop.
• After some years our plan is introduce franchisee of our system where people can start
shop under our name and give customers and buyers value through our product and start
building competitive advantage through that. That’s how will try to get closer to our goal.
Monitoring
We will monitor our business individually as owner initially. We will divide time and among
ourselves to maintain the shop. We will ensure all the activates of our shop is maintained and
served well to the customers and buyers needs. We will also maintain Excel worksheet for the
product sales and income so that we get real time update over how we are doing in terms of
business. We will also have easy access to our inventory as well.
We would like to keep an 18 years old 2 boys at our shop as a part timer for helping us with home
delivery during Haat Baar days. As well as regular days activities. That is how we are planning
to monitor our activates for now.
Conclusion
In conclusion “The Grocery shop” business that we are planning to do is not a usual business like
all others. In our “Introduction to business” course we have learned a lot while researching on
this particular retail business. I hope someday we will be able to give this a real try once we
complete our MBA. We want to make this unique grocery convenience shop a big name if we
ever can start it. We think our marketing strategy will be a deciding factor for it. As well as our
individual contribution is very much needed to ensure this business a life. The sole purpose of
this business was to create an innovative touch to the existing grocery business that we usually
see. To our knowledge we feel by above business plan it is a fantastic idea in terms of innovation.
Now the only thing remain is to give it a life a true entrepreneur.