Business Plan

for a Retail Store Of DECENT WINE SHOP

Business Plan of DECENT WINE SHOP

General Description Mission DECENT WINE SHOP mission is to develop into the best location to buy wine in Delhi, which will be measured by our growth in sales, and in opinions and ratings published in the media. Inventory and sales records will be computerized, to allow the company to identify and exploit best selling products, match volumes and profitability to service levels, anticipate demand, manage cash flows, assist with revenue growth plans, and optimize supplier/distributor relationships. DECENT WINE SHOP mission is to offer its customers the highest quality products and services. Our staff will have strong vendor relationships with the product suppliers and will be able to meet customers' demand. We believe it is important to remain an active member of the community, and to impact people's lives in more ways than deriving a profit from them. Objective: Decent Wine Shop will be a full-service retail merchant of fine wines and spirits in Delhi. It will distinguish itself from the competition and capture market share by securing a prime storefront location in a newly forming residential neighborhood. It will follow the best practices of its retail category leaders, with particular emphasis on excellent customer service, a broad selection of quality inventory, and competitive pricing. Goals: Earn and maintain Decent Wine Shop rating as one of the best stores in the Delhi wine and spirits retail trade business. Establish 30% minimum gross profit margins (retail price less wholesale cost) from inception. Achieve a profitable return on investment within three years. Earn a 15% internal rate of return for investors over the life of the lease. Attract talented and motivated staff.

Marketing Objectives Increase marketing efforts Expand market area Expand marketing reach Brand recognition Increase telemarketing efforts

ABOUT WINE INDUSTRY:Indian wine industry in terms of the area, production and marketing of wines in the country. Approximately 38 wineries are presently operating in the country with a total production of 6.2 million liters annually. Maharashtra is leading among the states with 36 wineries and 5.4 million liter production. Apart from this, 72,000 wine cases are imported mainly by ITDC, Sansula, Brindco, E&J Gallo and other private companies. At present 7,62,000 wine cases are sold every year, which includes 46,000 cases of sparkling wines. Which is in contrast to the much higher figures of other drinks such as whisky, brandy and rum sold in the country. Eighty percent of wine consumption in the country is confined in major cities such as Mumbai (39%), Delhi (23%), Bangalore (9%) and Goa (9%). There is growing awareness about the wine as a product in the domestic market. Poor storage and transport facilities inspite of tropical climate are the main problems of wine marketing in the country. Other constraints are the lack of promotional activities for wine consumption in the country and unfavorable rules for domestic marketing of wines except in few states. These and other factors contributed to Indias low wine consumption which is hardly 0.07 L per capita. Certain promotional strategies, such as easing of tariff barriers for the wines, developing awareness on health benefits of wine and to supply good quality wines in reasonable prices in the domestic market are emphasized. PRODUCTS AND SERVICE:Red Wines: Barbera, Cabernet Sauvignon, Chianti, Merlot, Nebbiolo, Petite Sirah, Pinot Noir, Sangiovese, Syrah/Shiraz, Tempranillo, Zinfandel. White Wines: Chablis, Chardonnay, Chenin Blanc, Gewurztraminer, Muscat, Pinot Blanc, Pinot Gris, Riesling, Savignon/Fume Blanc, Semillon, Viognier. Dessert/Fortified Wines: Madeira, Port, Sherry, Vermouth. Other Wines: Champagne/Sparkling Wine, Kosher Wine, Rose, White Zinfandel. Non-Alcoholic: Brut Sparkling, Cabernet Sauvignon, Chardonnay, White Zinfandel. Beers: Kingfisher, Haywards, Royal Challenge, Kalyani Black Label, Kings.

Marketing Plan
Target Market Segment Strategy

The target market profile consists of Hissar residents who are educated, successful professionals, with high disposable income, and who are regular consumers of alcoholic beverages. Most of the consumers in this category rely on assistance in selecting wines and spirits. Consequently, they tend to reward the most capable merchants with loyalty and word-of-mouth advertising. This is an area that Decent wine shop will work to develop as a keystone of its marketing strategy. Other potential segments (geographic, demographic, preferences): Bulk volume: private and business. Much of this business needs to be cultivated through opportunistic networking, and diligent follow-ups of in-store inquiries and leads. Direct deliverables: (outside immediate store neighborhood) viable only as the store earns its way into a position in which it can invest in vehicle delivery operations and line up target customers that would sustain such an operation. Intra-state shipments: contingent on expansion following the successful implementation of this business plan in the first year or two of operations. This business would develop through directmail catalog marketing, and an Internet sales operation. Target Audience Age 21-29 30-39 40-49 50-59 60+ Market Needs Other than the market segment carved out by Raman Wine shop and a handful of major players, little attention is paid to the opportunities of geographic extensions through direct shipments of wine & spirits throughout. As a goal, our company will seek to capture of piece of the apparently substantial demand for direct shipment sales. It is important to note that if current lobbying efforts are successful in influencing state and national liquor authorities to allow interstate shipments, our company intends to be in a good position to capture a piece of this outstanding potential growth opportunity. Even without interstate sales, a successful penetration of the intra-state marketplace would mean substantial growth for a neighborhood business. Market Trends Our market has finally grown to recognize the disparity between most of the standard office furniture sold through channels, and our own products. The development of the high-end office worker, office owners, and baby-boomer executive is an important trend for us. We now have people who are using computers who also appreciate the oldfashioned workmanship of good furniture.

Market Growth According to the market for wine is growing at double digit percent per year, and is projected to increase. Most important is the growth in alcohol and non-alcoholic products.

3.1 Market Segmentation The following chart and table show the market analysis for Wine Shop .

Market Segmentation
our market indicates about 10,000 potential customers who are managers in corporations of more than 50 employees. The target customer is going to be at a high executive level, in most cases, because the purchase price is relatively steep compared to standard office furniture.

Market Analysis Summary Indias sales of wines priced at Rs. 210 to Rs. 4000 a bottle have climbed 14 percent over the past 12 months Wine consumption is on the increase in the India and customers are trading up. Better still for the wine industry, wine overtook coffee as the most popular meal time beverage in the India. Indians spent more than 20 billion on wine in 2008 Consumption trends and demographics point to robust wine sales growth for the next 15 years. Wine demand is likely to be boosted strongly by the aging of the Indian population. Per capita consumption of wine increases with age, with early consumers drinking only 6.6 bottles per year. Consumption peaks at 16.4 bottles annually among adults 50-59 years old. "Baby boomers, more than any other previous generation, view wine as a simple, affordable luxury." Given that the

strongest growth in population over the next 10 years will be among these adults, who currently consume about 40 percent of all wines, it is easy to understand Motto's bullish outlook. "The aging demographic transformation is going to continue for the next 15 years, and the traits of this population as they shift into their older years of life fit wine to a T'" said Motto. Interestingly, their children, today's echo-boomers, make up another population group that will experience rapid growth over the next decade. The influence of demographics on wine consumption is so strong. The current growth rate in wine sales were adjusted to account for the population changes, then Indian wine consumption potentially could increase 80 percent by 2015 due to demographics alone. Indian per Capita Wine Consumption by Age: 21-29 6.6 bottles 30-39 9.7 bottles 40-49 50-59 60+ Industry Analysis Due to regulatory constraints, the retail wine and spirit trade in India is comprised of many independent participants. Chain stores are not allowed. No change is seen in this structure for the foreseeable future, although some changes are afoot in Internet-driven distribution operations, particularly for wholesalers. Market Segmentation Our market indicates about 10,000 potential customers who are managers in corporations of more than 50 employees. The target customer is going to be at a high executive level, in most cases, because the purchase price is relatively steep compared to standard office furniture. Competitors:

13.6 bottles 16.4 bottles 14.5 bottles

Raman Wine Shop is about 1,500 feet from our proposed storefront. It is our primary local competitor, although not a serious threat to our main residential base of customers within Hissar, who will find our location much more convenient to their needs. Another important factor is that our selection and product knowledge will appeal to the high-income in the hissar . While Raman Wines has more of a neighborhood grocer approach with less focuses on product knowledge. Decent Wines on Packard Street is the next nearest competitor, about 2,500 feet north of our location. Although Stillman is a high-volume shop with strength in pricing power, it remains far beyond the practical boundaries for shoppers who live in our neighborhood. Non-local stores that are in commuter paths of our neighborhood residents are also competitors, which will make us ever aware of the importance of cultivating relationships with our neighborhood residents so we can develop a long-term loyal customer base

Strategy and Implementation Summary: Location is critical to attract the traffic and customer profile required to generate planned sales volumes. The business is highly territorial. We have mapped the location of every retail liquor store in Hissar, and we have been working with executives of Castle Real Estate Company to determine the best possible location for the store. Four target areas were identified: the newly developing Southside residential complex, the Sun city Park area and the Model Town. Among these target areas, Southside Towers has been identified as our most promising business opportunity. Exclusivity within Southside Towers is a significant competitive edge. It gives decent wine shop geographic and protected domain as the most convenient source of fine wines and spirits for over 3,000 current residents and up to 14,000 additional future residents. Seasoned executive management professionals, sophisticated in business knowledge, experienced in the wine and spirits trade. Sales staff with wine and spirit education credentials.

Marketing Strategy Product pricing will be based on competitive parity guidelines. Prices will be consistent with those of the retail stores in our area, with the exception of very high-volume operations who have more powerful pricing leverage. Pricing will be monitored continuously against neighborhood and other competitive sources (market leaders) who we can readily research. Sales Strategy Management will focus on daily sales revenue goals. Best value products will be identified to assist customers with smart selections. Deliveries will be geared to the customer's convenience. The situation will be monitored to insure that the company invests adequately in its own delivery operations. Sales feedback will be elicited to stimulate ideas, approaches, relate success stories, instruct in new techniques, share news, and implement improvements. Major accounts will be solicited through networking, neighborhood solicitations, and opportunistic encounters at any time by management. Sales Forecast Sales projections for Decent wine shop are based on: actual sales of Season's Best Wine & Spirits, A&A Wines, Avenue Wines, interviews with liquor store owners and managers, observations of store sales and traffic at Friendship Wines, Pelican Place, and various other retail stores in Hissar , government and industry trade statistics, and population demographics and projections envisioned in Southside Towers construction plans.

Regarding wine revenue potential, we are forecasting average sales of 15 bottles per capita per year for residents of Southside Towers, and an average retail price of 300 per 750 ml bottle. Trade statistics show that, on a national basis, 10% of the population is responsible for 90% of alcoholic beverage consumption. The "average" Southside Towers customer, representing 10% of the Southside Towers population, therefore, would be expected to purchase three bottles of wine per week from our store. With Southside Towers growing from a base of 3,000 to 17,000 residents. The balance of our forecasted wine sales, representing some 20% of total wine sales, will come from sources external to Southside Towers: catering services, corporate accounts, deliveries to consumers outside Southside Towers, and visitors to the Southside Towers complex of residences, stores, and park situated on the National Highway. Sales revenue of spirits are projected to be 10% of wine sales, based on interviews with Boston store owners with a similar array to the product mix we have planned. About 40% of annual sales are expected to occur in the November-December holiday period. This is in-line with the retail liquor store norm and confirmed by owner interviews and trade statistics.

Sales Programs

Sales staff will have a level of wine and spirits knowledge that will position Decent wine shop to address customer needs better than our competition. The company will support high potential sales staff with education tuition assistance, and we will recruit our sales staff from students of wine education institutes. One of the managing partners is musically talented and will use his skill to create programmed background music to enhance store ambience and stimulate sales. This music will have the potential to be copyrighted and tested as a stand-alone marketable product; similar to CD's sold by Starbucks and Pottery Barn. The store layout will be planned with a commercial interior designer, to present an upscale, festive, cosmopolitan and culturally sophisticated image. A proprietary website address has been registered, and a website will be built to enhance customer service, supplier commerce, and direct sales. Decent wine shopwill take advantage of this opportunity as much as possible within budgetary limits. Peripheral sales and marketing collaterals will be used to expand product lines and customer awareness of our store: wine glasses, recipes (that match wine with food), corkscrews, umbrellas, calendars.

Strategic Alliances Decent wine shop will seek out opportunities to establish viable strategic alliances, such as co-marketing with gourmet food operations, wine and spirits distributors, importers, and producers. One such opportunity, and a natural fit, is an alliance with the upscale goumet food market that will occupy a neighboring retail storefront on Mainline Avenue, within about 100 feet from our storefront. Packaging party catering and event food services with a

complement of fine wines and spirits from Decent wine shop will help promote both businesses and provide an extra measure of service to our neighborhood customers. Coordinating gift baskets with wine orders in a single delivery package presents another compelling co-marketing opportunity. Information specific to pairing wines with food can be used to stimulate sales as well.

OPERATIONAL PLAN:Company Locations and Facilities

Decent Wine Shop will be located in the newly developing in Hissar . The site is one of the densest and wealthiest markets in the Haryana. When fully completed (in approximately seven years), Our storefront will be prime retail space in the Hissar , facing Excelsior Place, a main artery for vehicles and city buses coming and going from the complex. Key suppliers:-

1- Imperial spirits ltd. 2- M.R. Exports and Imports

3-

Marma Goa Inc.

Layout

Credit policy:Yes we have a credit policy with all three supplies of Wines. We payment them for the first delivery on the second delivery means there is relief for us of one delivery. And to customers we are also providing the credit policy for their payments, customers can pay us the amount of shopping in the three easy installments after every month. We can provide this facility to customers for to make with them a customer relation management and for to retain them for longer time. This strategy also help us as a word-of-mouth publicity because if a customer firstly comes to us and fell the quality of our products we are proving he/she will surely tell this thing to others and promote our business.

Store management:-

Retail store managers should have organizational skills which includes the ability of paying attention to detail as well as following-up matters. The job also involves the capability of managing multiple priorities along with management skills like communication, recruiting, training, and coaching. According to these requirements we place 2 members who will be responsible for store management with store manager. Some tips for successful store management:The customer is always right: Yes, that age-old saying holds true even today. The customer is the most important facet of any business. Hence, as a retail store manager you need to ensure that the whole team comprehends that, and behaves as if they do. Make the customer feel special: Everybody likes feeling special. So, when you are with a customer, give him or her your exclusive attention, listening closely to whatever they may be saying to you. During that time dont let anything else interrupt you. Please the customer: Although this is touted often, it is seldom practiced. As a retail store manager, see to it that the sales staff does that extra bit to make the customer feel pleased, especially as a measure of calming their displeasure about something. For instance, some special store giveaways can be packed with their purchases. Promise less and deliver more: You have heard of the old saying Dont promise what you cannot deliver. Well, by giving more than whatever you may have promised, you can build a strong customer rapport, both inside as well as outside the retail store. Appearances do matter: Although you may dismiss it as a superficial aspect of a superficial consumerist society, however, there is no escaping the fact, that the first impressions of the store, including the staff how they are dressed and how they behave do matter. People do care about the ambience of where they shop. Merchandising management:Merchandising management is same as part of store management for to merchandise Decent Wine Shop as I tell u before we place two skilled person who are responsible for to merchandise the store in a better way so that Display merchandise attractively: A vital part of retail store management is seeing to it that the merchandise is displayed properly. If the items are not displayed or seen properly, they wont be sold in the numbers that they ought to be. Merchandise should look crisp and new at all times. If the items are shop-worn, they should be put in the bargain section. Items that are usually bought on impulse should be placed on display close to the cash out area. Also, appropriate sections should

be made for merchandise, and the items should be placed in the correct sections. Items that are similar in nature should be placed in the same area. Items should be shown to advantage: Apart from displaying merchandise attractively, as a retail store manager, you should also make sure that the items are placed in such a way that they draw the customers attention. Hiding or stacking merchandise will not attract the attention of the customer. When thinking about how to display items, try to imagine what the customers will view with the display. Placing merchandise at eye level, or a little lower than that, is the best way to display specials. Placards and signs are also another method of grabbing the eye of the customer. Get rid of unsold merchandise: The bottom 10 to 20 percent of the product lines should be gotten rid of every year to be replaced by new products. The product lines that are not selling well should be marked down to half their price in order to sell them off fast.

FINANCIAL PLAN
Start-up Amount Requirements Start-up Expenses Legal Stationery etc. Marketing Computer Systems Security Store Layout Pre-opening Staff and Training Total Start-up Expenses Amount 15,00,000 3,00,000 1,00,000 15,000 1,00,000 4,00,00 15,000 1,00,000 50,000 22,20,000

Start-up Assets Cash Required Start-up Inventory Long-term Assets Total Assets Total Requirements 4,00,000 5,00,000 6,00,000 15,00,000 37,20,000

Projected Trading and Profit and Loss a/c Particular Amount

Sales Direct Cost of Sales

20,00000 500000

Total Cost of Sales

2500000

Expenses Payroll 500000

Depreciation

250000

POS computer software lease 60,000 Rent Insurance Vehicle Delivery Expenses 400000 25000 60,000

Advertising/Marketing

150,000

Total Operating Expenses

1445000

Profit Before Taxes

Interest

and 1055000

Interest Expense Taxes

400000 100000

Net Profit

500000

Projected Balance Sheet

Assets

Current Assets Cash Inventory Total Current Assets 100000 1000000 1100000

Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets 180,0000 1500000 3300000 44,00000

Liabilities

Current Liabilities Bills Payable Total Current Liabilities 700000 700000

Long-term Liabilities Total Liabilities

4000000 47000000

Total Capital

1000000

Total Liabilities and Capital 5700000

Projected Cash Flow

Cash Received

Cash from Operations Cash Sales 2000000

Expenditures

Expenditures from Operations Cash Spending Bill Payments Total Spent on Operations 800000 700000 1500000

Long-term Liabilities Repayment

Principal 400000

Cash Balance

100000

Break Even Point Total sales =Rs. 2000000 p.a Contribution = Sales- Variable Cost 20,00,000-11,0000 =900000 BEP = Total fixed cost/contribution = 600000/900000 = 6.6 month (appx.)

Appendices: Idea taken from the BusinessPlan.com

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