A Food Grade Warehouse Business Plan

473 3rd Avenue, Prince George, British Columbia market

1. Introduction:

Prince George is the largest city in northern British Columbia, Canada, with a population of
86,622 in the metropolitan area. It is often called the province's "Northern Capital" or sometimes
the "Spruce Capital" because it is the hub city for Northern BC. It is situated at the confluence of
the Fraser and Nechako rivers, and at the crossroads of Highway 16 and Highway 97. In Prince
George, the summers are comfortable and partly cloudy and the winters are freezing, snowy, and
overcast. Over the course of the year, the temperature typically varies from 12°F to 76°F and is
rarely below -15°F or above 86°F.

2. Executive Summary
This report is developed to explain the business plan of the food grade warehouse in order to
provide high-quality of food items to all the customers by ensuring full service distribution of
food including vegetables, grains, dairy products throughout the market situated around Prince
George, British Columbia. In this business plan, we show continuous focus on service, quality,
and efficiency, we will set industrial standards in service excellence by partnering with different
vendors/customers who want to store their food products in this warehouse to execute an
effective distribution of their food products. This food grade warehouse will provide facility of
any size, storing both small and large amounts of food for either shorter or longer period of time.
The most common types include dry storage and refrigerated or chilled storage.
We will provide the best facility to our customers by protecting their food stored within the
warehouse by maintaining superb sanitation and health standards, such as, use of pallets to keep
food from coming into contact with the floor.
For the proper distribution of the all food items, we have hired employees that are well
experienced in logistics because logistic professionals are very good at arranging track and
shipping products to their destination point. We also hired employees who will physically
operate forklifts and lift items in your warehouse facility as well. The hired employees have
allocated the tasks of overseeing items entering the facility, as they are the ones responsible for
tracking when food products and which type of food is entering the warehouse. As a warehouse
owner, employ an experienced shipping and receiving person who will assist checking items in
as they arrive. This person can set up specific locations in the warehouse where storing each
client’s item can be done. Moreover, for the accurate management of all food products, we have
labeled sections with letters A to Z.
2.1 Objectives
Distribution businesses play an important role in the development of an economy. Products
involved are mostly finished goods that are distributed to end-users or consumers. Our main
objective while constructing warehouse food storage is "know your product." A thorough
labeling system will be done to avoid storing incompatible products together, reduce cross-
contamination and ensure you don't end up triggering your customers' allergies.
Moreover, being a leading food products distributor, our commitment is to provide quality
products and services in a cost-effective manner, enabling retailers to excel in serving their
customers. The following points explain the other main objectives of our opening a warehouse:

1) To achieve clean environment which will enable the customer to buy or store the food
products.
2) To get registration with the FDA and in compliance with local food safety inspections. 
3) To attract maximum customer by assuring them a safe place for food storage
4) To provide friendly services.
5) To offer less food storage rates to the retailers.
6) To ensure the retailers on-time and safe distribution of their food items
7) To open and operate a successful food distributorship in the market situated around
Prince George location, employing five to seven employees the first year.
8) To obtain a minimum of 100 regular customers/retailers in the Prince George market the
first year of operation.
9) To achieve first year sales of $200,000.

2.2 Mission
The Food grain Warehouse intends to become a recognized distributor of all types of food items
to nearby grocery store, houses, etc. throughout Prince George. The Food grade Warehouse plans
to develop strong relationships with key customers so we will be viewed as indispensable
partners, rather than just another supplier. We will work closely with each customer to
recommend product assortment unique for their retail base, appropriate stocking levels, pricing
and display assortments, as well as promotional ideas and material to increase sales. The Food
grade will seek out and work with the manufacturers we represent to deliver the most innovative
and exciting products possible to the customers we serve. We are not only selling product, we are
selling service.

We believe that our responsibility for customer satisfaction is not focused solely on the sale of a
product, but rather is the total relationship a customer experiences when interacting with our
organization. We believe in honesty and truth in all transactions and in providing products of the
highest quality and at fair prices. We should do everything possible to provide outstanding
service in marketing the products we sell.
We at Prince George warehouse are committed to bringing you the best all-around shopping
experience. Our nice pledge campaign includes an intense training session for all of our
employees, and a firm understanding and commitment to deliver these pledge points at the
Grocery Lounge.
3. Demography

According to 2016 Canadian census report, total population is 72,550.

 Canada 2016 Census Population % of Total Population

South Asian 2,525 3.5%

Chinese 945 1.3%

Black 710 1%

Filipino 1,035 1.4%

Latin American 265 0.4%

Arab 155 0.2%

Visible
minority group
Southeast Asian 235 0.3%

West Asian 80 0.1%

Korean 165 0.2%

Japanese 215 0.3%

Another visible minority 85 0.1%

Mixed visible minority 130 0.2%

Total visible minority population 6,495 9%

 First Nations 6,465 8.9%

Aboriginal group
Métis 4,365 6%

Inuit 25 0%

Total Aboriginal population 11,160 15.4%

European 54,895 75.7%

Total population 72,550 100%

4. COMPANY DESCRIPTION

The Warehouse will be located at 473 3rd Avenue, Prince George, British Columbia market. The
total area of the location is 4100 sq ft. The building is in an amazing location in great condition
has an additional compound lot in the back. 
This warehouse will be open 7 days a week with hours as follows:

Monday: 7:00 a.m. to 8:00 p.m.

Tuesday: 7:00 a.m. to 8:00 p.m.
Wednesday: 7:00 a.m. to 8:00 p.m
Thursday: 7:00 a.m. to 8:00 p.m
Friday: 7:00 a.m. to 8:00 p.m
Saturday: 7:00 a.m. to 10:00 p.m.
Sunday: 7:00 a.m. to 10:00 p.m.

4.1 Main competitors

Most of the existing warehousing automation companies today develop large scale products.
They intend to have a warehouse run entirely from automation, and design palletizing robots that
can handle very large loads. However, these systems often require millions of dollars to install
and run, a lot of space to maneuver, and a long factory downtime to install. It is possible,
however, that these large businesses are capable of quickly reducing the scale of their current
product to create a shorter time to develop a similar product.
The below outlines the current competition with respect to the intended small-scale market only.
Store Name Store Location
Interior Warehousing Ltd 1024 Great St, Prince George, BC V2N 2K8,
Canada
Costco Wholesale 2555 Range Rd, Prince George, BC V2N
4G8, Canada
Warehouse One 1600 15th Ave #179, Prince George, BC V2L
3X3, Canada
Liquor Warehouse 4182 15th Ave, Prince George, BC V2M
1V8, Canada

5. Implementation of the food storage safety regulations to attract customers/retailers.

To attract maximum vendors, retailer or customers, we will develop a proper sanitation schedule
to ensure them that the entire facility is tidy and cleaned properly at all times. Moreover, we have
strictly instructed every person employed in a food grade storage warehouse to wash their hands
thoroughly with soap supplied by the company. This will be done in a sink that is hygienic dry
system equipped. To ensure inventory rotates on a “first in, first out” basis, we have introduced
an in-house system to trace product date and lot codes. Also, we get take proactive approach to
pest control both inside and outside (e.g., traps, spraying, etc.).
5.1 Incentives for customers:
 Offer extra reward points/ cash
 Offer discount on bulk or next purchase
 Offer free sample products
 Reward customers on individual level
 Membership (loyalty program)
 Promotional items
 Cash back
 Free delivery within 5Km radius
 Rebate

6. Location and facility

We have located the ideal location for our operation. Our store will be located at 473 3rd Avenue,
Prince George, British Columbia. Total area of grocery store is 4,100 square feet. Monthly rent
of the facility is 2100 CAD per month and 25,200 CAD per annum.
7. Inventory
Condiments
Warehouse Products Quantity Price Units
Pepper hot sauce 10 $11.81 lb
Sea Salt 12 $8.99 lb
Vinegar 11 $12 lb
Soy Sauce 11 $9 lb
Ketchup (Tomato) 14 $6.59 lb
Mustard 13 $11.2 lb
Sugar 12 $12 lb

Dairy
Warehouse Products Quantity Price Units
Cheese 20 $14.27 lb
Milk 30 $4.26 lb
Eggs 100 $3.59 (one dozen) lb
Yogurt 3 $5.06 lb
Butter 32 $3.94 lb

Meat
 Warehouse Products Quantity Unit Price Units
Beef Brisket 4 $4 to $5 lb
Beef Shank 33 $9.70 lb
Sirloin 4 $5.99 - $ 7.99 lb
Ham 24 $ lb
Bacon 100 $6.93 lb
Chicken 33 $3.50 lb
Steak Tips 100 $8.40 lb

Fruits
Warehouse Products Quantity
Apple 44
Banana 33
Guava 34
Grapes 34
Kiwi 11
Orange 13
Cheery 12

Grains
Warehouse Products Quantity
Wheat 150
Flour 25
Corn Meal 25
Oats 25
Rice 50
8. Start-up summary
Start-up costs will be financed through owner investment. The start-up chart shows the
distribution of financing.
ONE TIME START UP EXPENSES AMOUNT
   
One Time Start-Up Costs:  
Rent Deposit $25,200 
Software and Hardware’s  $7000
Buildout/ Renovations  $ 8000
Decorating, Painting and Remodeling  $5000
Starting Inventory  $40,000
License from FDA and Permits $2000 
Advertising and Promotion  $6000
Shelves and display cases for displaying items  $25,000
Carts or baskets $15,000 
Forklift $,9,850 
Total One Time Start-Up Costs: $143,050 
   
Monthly Expenses:  
Bank Charges $800 
Insurance  $200
Maintenance & Repairs  $1000
Marketing & Promotion: Advertising  $2000
Payroll: Wages (Owner/ Manager)  $2,906
Payroll: Wages (Employees)/Night Gurard  $450
Credit card processing machine  $500
Security system  $3500
Telephone $2000 
Total Monthly Expenses:  $13,356

9. Warehouse Operation
Retail operations can encompass everything about how a store operates each day. These six
sections provide a more detailed overview of responsibilities that may fall under the field of
retail store operations:

 Design
 Customer Service
 Product Inventory
 Administration
 Warehouse Management
10. Customer Service Functions

Much of a warehouse success depends on customer service - how it treats its customers.
Customers may not always be right, but they are always the customer, representing a potential
sale and potential review. With excellent customer service, stores can increase their
competitiveness, and even make up for shortfalls in other areas, such as convenience or pricing.
Positive, personalized customer service can help the small stores compete against the big stores.
Returns and refunds are another vital area of customer service. A store buys faith and loyalty
with customers when it handles returns easily and without hassle. Customers want to know that if
they make a mistake with a purchase, the store will not penalize them. Stores should also
carefully track returns to understand patterns and resolve problems.

11. Product Inventory Management

Inventory management is a systematic approach to sourcing, storing, and selling inventory—both

raw materials (components) and finished goods (products). In business terms, inventory
management means the right stock, at the right levels, in the right place, at the right time, and at
the right cost as well as price. For a warehouse business succeed, it needs to have the products to
satisfy its customers and small-scale groceries store. For the proper management of all inventory
products, we will use Inventory management software i.e. Cin7 which will keep inventory in
line with orders wherever you sell and hold your products.
Moreover, we will also manage our inventory by the following ways:
1. Prioritize your inventory.
We will be categorizing the inventory into priority groups which can help in understanding
which items you need to order more of and more frequently, and which are important to your
business but may cost more and move more slowly
2. Track all product information.
We will make sure to keep records of the product information for items in your inventory. This
information should include SKUs, barcode data, suppliers, countries of origin and lot numbers. 
3. Conducting auditing for the inventory.
4. Analyze supplier performance.
5. Track sales.

12. Retail Administration Responsibilities

These functions fall under administration, the fifth major area of operations.
 Maintain the warehouse in good working order. Make sure customers aren’t turned off by
inadequate facilities or poor maintenance.
 Managing budgets and keep the statistical and financial records
 Ensuring storage of all food products in compliance with the health and safety rules and
regulations
  Preparing promotion materials and displays
 Increase the promotions to enhance the business of the warehouse.
 Ensured proper licensing with the FDA

13. Market Analysis

By household size, grocery spending ranges from an average of $120 per week in two-person
households to $210 per week in households of five or more. Per-person spending is inversely
correlated with household size: per-person weekly expenditures are only $45 in households with
five or more members but $58 in one-person homes, according to the Food Marketing Institute.
Following factors directly or indirectly effects wholesale grocery/ continence store market
13.1 Target market
 Sell our products to Grocery store (both small and large)
 Vendors
 Household person who wants to buy products in bulk quantity

14. Marking through Social Media

14.1 Promotions

The strategy we have adopted to attract the customers to store their food products in the
warehouse is by advertising in a good trade publication like ‘THE BOOKSELLER’ in which
clients are most likely to read. We will list all the services which will be presented to them,
explaining all the benefits we can offer. Leave business cards with different business owners
who may need a warehouse for storing their products. Also, we will create websites while
promoting it through local online yellow pages and search engines can be done.
14.2 Community service
Our warehouse will serve community by giving out products to different religious places
(mosque, gurdwara, church) before 3-4 days of expiry of products as a good will gesture. If we
unable to sell customers/vendors products then we will charge no money.

15 Strategy & implementation

Swot analysis

We realize the success of warehouse will have to be achieved by doing more that serving great
products, and providing friendly service. We will utilize a marketing plan to build customer
traffic. We will continually strive to win more customers by being proactive rather than reactive
in our marketing efforts and stay current with popular industry trends.

Swot analysis
 STRENGTHS
1. Successful track record of storing
new food products – product
innovation.
2. Reliable suppliers
3. High level of customer satisfaction:
the company with its dedicated
customer relationship management
department has able to achieve a
high level of customer satisfaction
among present customers and good
brand equity among the potential
customers.
OPPORTUNITIES
1. The fruits category is expected to
grow at 6% annually until 2021
which will more opportunities for the
food grade warehouse to introduce
more fruits and fresh vegetables.
2. Customers around the Prince George
area are more interested to purchase
products from warehouse which will
increase the net profit

WEAKNESSES THREATS
1. Lack of marketing expertise. 1. Rising operating costs
2. Limited budget for marketing 2. Building/maintaining sales volume
and advertising 3. Business competitors

16. Management

People are our most valuable asset and Grocery Lounge provides a complete line of human
resource services designed to help us develop the greatest potential from our associates. The
people we employ are also a major investment in our company. It is their goal to help us fully
capitalize on this investment. Staff is highly experienced in the retail supermarket industry and
familiar with its unique problems and opportunities.
Our store will hire one Manager (owner), one Cashier, one Laborers/ Stockers. Our Store
Manager will have a college degree and several years of experience with managing a retail store.
Basic salary of cashier (Canadian national) will be $15 CAD per hour, laborers salary will be
$11 CAD per hour.

17. Financial Plan

17.1 Startup cost

The estimated startup cost of Grocery Lounge store is $143,050 which is already explain in the
above-mentioned start-up table.

17.2 Source and use of funds

Total start-up costs are estimated to be $143,050. The majority of the costs are associated with
the renting site for grocery store, product inventory and store equipment. Owner Omaya Tariq
will contribute $143,050 to startup small warehouse for food storage.

Source of funds Amount

Owner Investment $143,050

Use of funds

Site renting (1 year) $25,200

Inventory products $40,000
Store Equipment’s (carts, shelves etc.) $40,000
Vending and atm machines $20,000
Total use of funds $143,050

17.3 Inventory Turnover Ratio Calculation

By household size, grocery spending ranges from an average of $120 per week in two-person
households = $120 x 4 = $480 per month

Out of 72,550 Population, our aim is to attract at least 25,000 people towards our store. So,
 $480 x 25,000 = $ 12,000000

So, the inventory turnover per month will be $12,000000