BUSINESS PLAN MARCH 2007
Strictly Private & Confidential
Directors: Mr Stephen Osborne Mr Stephen Bytheway Mr Daniel Pinkney Bytheway Stores Limited 10 Sutton Road Thirsk North Yorkshire YO7 1DJ
EXECUTIVE SUMMARY Company Information Business Name: Bytheway Stores Limited (note that the store is currently trading as 'Supasavas') Address: 10 Sutton Road, Thirsk, North Yorkshire YO7 1DJ Business Structure: Limited company - registration number 06160950. Company Directors: Mr Stephen Osborne, Mr Stephen Bytheway and Mr Daniel Pinkney Initial Shareholding: 300 Shares of ÂŁ1 distributed as follows: Mr Stephen Osborne (100 shares) Mr Stephen Bytheway (100 shares) Mr Daniel Pinkney (100 shares) Primary Contact: Mr Stephen Edward Bytheway Telephone: 01642 595761 Email: stephen.bytheway@ntlworld.com Secondary Contact Mr Daniel Scott Pinkney Email: dan@infinity76.co.uk Mobile (text only): 0797 161 2965 Brief Introduction Supasavas is a well established convenience store in the popular North Yorkshire market Town of Thirsk. Situated on the edge of the town, it is in a prominent position leading to a very large residential estate and next to a popular road (A170) which leads to several tourist hotspots including Scarborough, Pickering, White Horse and Flamingo Land. Being the closest shop to Thirsk Industrial Estate it also helps to attract many of the estate's workforce. Established for nearly 40 years (15 in the hands of the incumbent owners) it is the only shop on the east side of Thirsk and as such, has no competition. The shop is open seven days a week and is currently run by a husband and wife team (the owners) and 3 part-time staff . WIth a floor area of some 600sq.ft (plus 180sq.ft of storage space) the shop currently provides groceries, off-licence goods, counter news and is a registered pay-point agent. An absence of National Lottery, Post Office and magazine sales provide initial scope for retail expansion, while the layout and size of the site (which includes a spacious 3-bedroom house as owner accommodation) shows tremendous potential for overall expansion which could ultimately provide additional streams of income (rent or otherwise) to the business.
Bytheway Stores Limited Business Plan - March 2007
Supasavas boasts steadily increasing sales of over £10,000 per week and Pay-point takings of circa £6,500 per week. This equates to an annual turnover of almost £800,000 with net profits of around £50,000. We estimate that the introduction of just the Lottery terminal will help turnover to surpass the £1million mark which may then attract the attention of one of the major supermarket chains such as Tesco Express or an established UK newsagency network such as Martins*. Although it is not our plan to sell to such a company it would give provide additional options and financial security for the future. *Martin McColl is the country’s largest chain of Newsagents with over 900 stores; in addition there are over 300 convenience stores and 100 + High Street stores trading throughout England, Scotland and Wales (http://www.tmretail.co.uk/Company.asp).
Business Objectives* We aim to build upon the existing success of the the store by: Updating the till, stock control and payment systems Introducing National Lottery and magazine sales Providing more sandwich and savoury products Refurbishment, restructuring and re-branding Introduce an ATM for cash withdrawals Provide other 'community' based services Explore viability of a same-day delivery service Provide an in-store feedback box Compile and submit plans for extending both the property and store Expand marketing and advertising activity *See section entitled 'Business Objectives' on Pages 7-8 to see how we intend to meet these objectives.
Why Supasavas? The local convenience store has enjoyed a resurgence in recent times, thanks in no small part to the major Supermarket chains venturing into the market. These can be characterised by the introduction of 'Tesco Express' style stores that have brought the supermarket experience much closer to home. In fact, the convenience store sector according to thelocalshop.com is growing at twice the rate of the grocery market. With a society that is becoming far more health conscious, value oriented and time-hungry, the local convenience store is fast becoming an essential ingredient of modern day life. As prospective purchasers of such an establishment we all have the necessary business skills, management experience and a valuable knowledge base to be able to build upon what has already been a successful enterprise for almost 40 years - Mr Bytheway and Mr Osborne currently co-own Stainton Store (a convenience/newsagency in Stainton, Middlesbrough), Mr Bytheway also owns a food and catering company and Mr Pinkney has over 8 years experience as director/co-owner of a successful design, advertising and marketing business. However Mr Pinkney is now looking to diversify and explore other business avenues that will benefit from his accumulated experience. As Supasavas also provides living accommodation, this is an ideal opportunity as Mr Pinkney will be able to immerse himself in day-to-day management of the business along with his Fiance, Miss Stephanie Bytheway (who is also the daughter of Mr Bytheway). Mr Bytheway and Mr Osborne who are both in full-time employment have proved that this is no obstacle with the continuing success of Stainton Store and other business endeavours. Bytheway Stores Limited Business Plan - March 2007
Together as three equal partners with a committed working family unit behind us, we hope to increase perception of this convenience store as well as providing more community services creating a sound and growing business and brand identity whilst also providing a long-term investment opportunity in the form of freehold property. The Market Opportunity The store is currently the only shop on the east side of Thirsk opposite the local Industrial estate and at the entrance to the largest residential estate in the town - occupying 75% of the town's population (approximately 3,375 people*). It has contined to capitalise on it's substantial market share and proved a successful enterprise for almost 40 years. In taking the business and store to the next level whilst also serving the local residents and their needs as best we can, we aim to secure this market share indefinately. *http://en.wikipedia.org/wiki/Thirsk
Mission Statement To provide a superior community service, while operating as a profit and growth oriented business. Finance Requirements We have had an offer accepted by the vendor at £378,000 +SAV. With SAV equating to approximately £9,000, associated fees amounting to £4,500 and Stamp Duty Land Tax at £8,250 we have forecasted that the purchase will cost in the region of £400,000. We have secured a £300,000 commercial mortgage from Alliance & Leicester Commercial Bank which means a deposit of £100,000 (or thereabouts) will be required. With a net profit of £42,175 (in 2006) equating to £3,515 pcm, and a predicted monthly repayment of £2,342 (£1,725 for interest only) we should be able to meet the repayments of a commercial mortgage quite comfortably. However, given our plans for the store coupled with our experience in this field and proven business acumen, we expect even better returns and bigger margins making the mortgage repayments a mere formality and our plans for expansion a short-term reality.
Bytheway Stores Limited Business Plan - March 2007
TABLE OF CONTENTS Executive Summary 2 Table of Contents
5
Business Introduction
6
Business Objectives
7
Products & Services
9
Management & Personnel
10
Preliminary Organisational Structure
11
The Market
12
Competitive Business Strategy
13
Marketing Plan
15
Brand Identity
16
Proposed Extensions 20 Future Prospects 24 Stainton Store Case Study 25 Financial Information 29 Including Financial Performance Tables & Profit/Loss Accounts
Key Contacts
34
Appendices 1. Thirsk Rural Business Centre 2. Thirsk Location Map 3. Location of shop and competition 4. Sales Particulars 5. Supplied Ground Floor Plan 6. H.M Land Registry Title Plan 7. Planning Applications 8. Convenience Store Articles 9. Alliance & Leicester ATM 10. Curriculum Vitaes (all 3 Directors) 11. Personal Licence Certificate (Stephen Bytheway) 12. E&P Press Release 13. E&P Design Portfolio 14. Subscriptions (Convenience Store, Retail Newsagent, Retail Express & Shop-Equip) 15. Stainton Store Management Sheets
Bytheway Stores Limited Business Plan - March 2007
BUSINESS INTRODUCTION Location Supasavas is situated on the east side of the popular North Yorkshire market Town of Thirsk. Situated at the foot of the Hambleton Hills, Thirsk sits at the centre of the largest English county of North Yorkshire. It is a very well established market town with its own racecourse and plenty of history enbodied in the stories of James Herriot. It is a thriving rural community with a substantial Industrial Estate and Rural Business Centre1. The store is in a prominent position on the edge of the town leading to a very large residential estate and next to a popular road (A170) which leads to several tourist hotspots including Scarborough, Pickering, White Horse and Flamingo Land. It is also the closest shop to Thirsk Industrial Estate and within easy access of the busy A19 trunk road connecting Thirsk to Middlesbrough and further south to the A1 and M1 motorway network2. Trading Address: 10 Sutton Road Thirsk North Yorkshire YO7 1DJ Business History Established for nearly 40 years (15 in the hands of the incumbent owners) it is the only shop on the east side of Thirsk and as such, has no competition. The shop is open 7 days a week (Monday - Saturday 8.00am - 9.00pm and Sunday 8am - 8pm) and is currently run by a husband and wife team plus 3 part-time staff. The shop currently provides groceries, off-licence goods, counter news and is a registered pay-point agent. An absence of National Lottery, Post Office and magazine sales provide initial scope for retail expansion, while the layout and size of the site (which includes a spacious 3-bedroom house as owner accommodation) shows tremendous potential for overall expansion which could ultimately provide additional streams of rental income to the business. Supasavas boasts steadily increasing sales of over £10,000 per week and Pay-point takings of circa £6,500 per week equating to a annual turnover of almost £800,000 with net profits of circa £50,000. Property Details (Freehold) Owner Accommodation A spacious 3 bedroomed semi-detached house with large front garden, nice size rear with large centrally heated outbuilding. Convenience Store A single storey building of approx 600sq.ft with additional connected storage building of circa 180sq.ft. The shop comes with many fixtures and fittings including several fridges, freezer units, display areas and shelving units.
Bytheway Stores Limited Business Plan - March 2007
BUSINESS OBJECTIVES We aim to build upon the existing success of the the store by: Updating the till, stock control and payment systems Introducing National Lottery and magazine sales Providing more sandwich and savoury products Refurbishment, restructuring and re-branding Introduce an ATM for cash withdrawals Provide other 'community' based services Explore viability of a same-day delivery service Provide an in-store feedback box Compile and submit plans for extending both the property and store Expand marketing and advertising activity How we aim to do this Updating the till, stock control and payment systems: By installing a new electronic till system with barcode scanning facilities that can act as a stock control & review item as well as speeding up current transactions thus increasing thoroughfare of custom and improve service to the community. We will also be looking to install a credit/debit card payment option. Introducing National Lottery and magazines The existing owners have been approached by Camelot regarding the installation of a Lottery terminal and have completed the initial paperwork for processing. As potential purchasers Mr Bytheway and Mr Osborne already own Stainton Store (a newsagent/convenience store) which harbours a Lottery terminal, they have the experience and knowledge to introduce and maintain this system accordingly. An additional till will be introduced to cater for Lottery Sales so as not to interfere with shop sales accounting systems. Stainton Store also provides magazines, so again they have the background to successfully implement this to Supasavas. Providing more sandwich and savoury products WIth Mr Bytheway also owning Snack Shack (a sandwich/catering business) he and his wife have the necessary qualifications and experience to provide this secondary service to the store and also expand to deliveries to the local industrial estate if this avenue is deemed profitable. Refurbishment, restructuring and re-branding Restructuring layout to accommodate both magazine sales and National Lottery and renewing decor to produce a fresher, cleaner and brighter environment. A new name (Bytheway Stores), identity and brand will be created to draw more attention to the store and lift customer perception thereby attracting more custom - this new identity can be applied to signage, van livery and any subsequent advertising or marketing collateral.
Bytheway Stores Limited Business Plan - March 2007
Introduce an ATM for cash withdrawals In order to increase footfall to the store we will be looking to introduce an ATM service. With several organisations including various financial institutions able to provide this option, we should be able to adopt a system that both serves the community and helps increase day-to-day trade. Provide other community based services This can include dry-cleaning, key-cutting and photocopying. We may even consider services that provide entertainment such DVD or games rental should feedback be positive. Such services help provide for the local community and has the additional benefit of again increasing custom. Explore the viability of a same-day delivery service This could take the form of groceries to the local residential estate and/or catering to the nearby industrial estate. Feedback from the local custom will tell us whether this is a viable (and ultimately profitable) option or not. We would refrain from offering a news-delivery service as experience has taught us that this proves to be an extremely timely and costly exercise that will ultimately detract from other services offered by the store. Provide an in-store feedback box This will help us to keep abreast of the needs and wants of the local community and may also help us generate other business ideas and opportunities. Compile and submit plans for extending the property and store With a 3-bedroomed semi-detached house and a one-storey store on a spacious plot, there is tremendous scope to extend the accommodation and store area. By building an additional storey above the store this could be subsequently rented or leased to a 'community' based business such as a General Practitioner, Dentist, nursery or unisex hairdressers. By providing more services to the community we would hope that the planners would look favourably on such an application. If this fails we also have the option of changing the usage to residential and thereby creating a 3-bedroomed flat to bring in a rental income. Expand marketing and advertising activity As the store does not currently partake of any marketing or advertising activity this is an area we can begin to pursue and with great effect. This can be implemented in a variety of ways including leaflet drops or direct mailers to local residents (highlighting special offers, new services etc), providing advertising to local businesses and residents (either in store or window advertising), A-board hoardings on the A170 Main road and even promotional materials such as 'Thirsk' themed Christmas cards and calendars. One of the prospective purchasers, Mr Daniel Pinkney, has an extensive background in this business arena having been a creative director in a successful design and advertising agency for over seven years and qualified to 1st Class Degree standard in Graphic Design.
Bytheway Stores Limited Business Plan - March 2007
PRODUCTS & SERVICES Products: Current products in store include groceries, off-licence (cigarettes and alcohol) and newspapers as well as general convenience and household goods. We aim to expand these offerings by bringing in magazines and greetings cards, and more fresh goods (such as a greater range of fruit, vegetables, meats, breads and sandwiches). Local farms may be the source of many of these products allowing us to both support local business and supply up-to-the-minute fresh produce to local residents. Restructuring the the layout of the store will be necessary to be able to encompass these additional products in a user friendly manner. Typical suppliers for the store include Bookers and Batleys, both Cash and Carry type retailers situated in the Portrack Lane area of Stockton-on-Tees. These happen to be the same suppliers that provide goods for Stainton Store and Snack Shack and as such will result in us employing more productive and cost effective shopping strategies. Services: There is a Paypoint system in place allowing customers to pay for various utility bills and phone cards. However, we will be looking to implement a National Lottery terminal, an ATM facility and perhaps a same-day delivery service. Post office status may also be a possibility although given the uncertain future of these, this may not be a viable option. One way around this would be to adopt a post-office style franchise such as Mail Boxes Etc (see http://franchise.mbe.co.uk/index.asp) and incorporate this into the store. Other small, but valuable services to include could include key-cutting, photocopying, DVD/Games rental and dry-cleaning (albeit using a third-party provider). With plans to extend the shop and property (see pages 20-22) we can also look to provide secondary services by renting out parts of the property to other businesses. These would be limited to those that can provide a key service to the local community, which could include a GP, dentist, pharmacy, nursery or unisex hairdressers. Such a scheme is the embodiment of the Bytheway Stores Mission Statement 'To provide a superior community service, while operating as a profit and growth oriented business'.
Bytheway Stores Limited Business Plan - March 2007
MANAGEMENT & PERSONNEL Existing Staff: Mr Gary Jackson and Mrs Julie Jackson (present owners) 3x part-time staff on a rotational basis. New Owners/Directors: Mr Stephen Bytheway* A well as being fully-employed as an Operations Coordinator for Sabic UK (formerly Huntsman) Stephen currently has two successful businesses including Snack Shack (a cafe/takeaway business) and Stainton Store (a newsagents/off licence/convenience store). He also holds the required food and off-licence trading qualifications. Mr Stephen Osborne* As well as being fully-employed as a project manager and engineering professional at Cleveland Bridge, Stephen also co-owns and manages Stainton Store with Stephen Bytheway. He has a wealth of engineering, construction, business and DIY skills that can be called upon to enhance any business operations. Mr Daniel S. Pinkney* A former director of Ellahi & Pinkney Limited (a design/advertising agency based in Stainton Village, Middlesbrough), Daniel has a wealth of business experience and marketing/design skills that can be called on to realise the full potential of Bytheway Stores Limited. He has worked alongside both Stephen Bytheway and Stephen Osborne with regards to day-today operations at Stainton Store. He has recently passed the BIIAB Level 2 National Certificate for Personal Licence Holders which will enable him to apply for a Personal Licence and subsequently be appointed as the Designated Premises Supervisor (DPS) for the Thirsk store. Daniel will be assuming the role of owner occupier together with his fiance, Miss Stephanie Bytheway (also daughter of Mr Bytheway). *See full CVs in the appendices section
Other Key Personnel: Miss Stephanie Bytheway Stephanie has worked in both Stainton Store and the Snack Shack (businesses owned by her father) so has extensive experience to bring to the venture. Mrs Karen Bytheway Currently co-owner and manager of the Snack Shack (Catering establishment), Karen has the necessary experience and contacts to help build up the food and hot snack offerings at the store. Mrs Barbara Pinkney Currently Catering Assistant at Makro Wholesalers for over nine years (has all the necessary food and hygiene certificates). Can help implement a greater range of food offerings at the store for lunches and takeaways if required. Part-time Staff We will be looking to retain the three existing part-time members of staff, enabling the directors to manage, oversee and engage in future planning and direction of the business(es). Bytheway Stores Limited Business Plan - March 2007
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PRELIMINARY ORGANISATIONAL STRUCTURE
Mr Stephen Bytheway Director / Owner / Management
Mr Daniel Pinkney Director / Owner / Management (Designate Premises Supervisor)
Accounts, Operations, In Charge of Purchases, Business Planning & Development
Accounts, Operations & Marketing/Advertising, Business Planning & Development. Plus Day-to-Day Management. He will also be residing at the residential house that is attached to the shop.
Mr Stephen Osborne Director / Owner Accounts, Spatial Design and Construction, Business Planning & Development
Miss Stephanie Bytheway Management / Shop Assistant Role: Day-to-Day Management: Will be working alongside Mr Pinkney and also as a part-time shop assistant. She will also be residing at the residential house with Mr Pinkney. Experience: PT assistant in Snack Shack and Stainton Store (Newsagent).
Part time Shop Assistants (EXISTING SUPASAVAS x3) Role: Day-to-Day shop sales Experience: Existing Part time staff currently working under present owners
Backup Shop Assistants (STAINTON STORE x4) Role: Backup / Temporary Staff Experience: Existing Stainton Store staff - also includes Mr Bytheway's other daughters.
Bytheway Stores Limited Business Plan - March 2007
Mrs Karen Bytheway Catering & Food Management Role: Food and Catering Support Experience: 10 years as Owner/ Manager of Snack Shack - providers of hot/cold food plus outside catering and deliveries
Mrs Barbara Pinkney Catering & Food Management Role: Food and Catering Support Experience: 9 years as Catering Assistant at Makro Coffee Shop including food-preparation, cooking, serving, till-operation, sandwich preparation and cashing-up
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THE MARKET Residential Market Supasavas is the only shop on the east side of Thirsk, on the entrance to the largest residential estate in the town. This estate accounts for almost 75% of the total residential population in Thirsk and with a couple of garages over half a mile to the west with limited products, services and no Lottery, this store covers a vast market opportunity. With such a large catchment area, this could bode well for future expansion of the business. For example in extending above the store we envisage creating a secondary space of at least 1000 sq.ft that could be used for either residential (3 bedroomed flat) or more likely for community service businesses (such as a GP, Dentist, nursery or a unisex hairdressers). This would help drive further traffic to the store thus boosting turnover and profits. Although this would be subject to planning permission we would hope, as it is aimed at providing a service to the community, it would be looked upon favourably. Commercial Market The store is also directly opposite Thirsk Industrial estate, which is a 36 acre Industrial Park occupied by a variety of more than 40 manufacturing and service companies, including Madeira Threads, Multidrive and Talking Pictures. Many of the workforce reside on the local residential estate and as the shop opens at 8am on weekday mornings, it is perhaps neglecting this early morning custom. These are individuals who are likely to pick up a newspaper, snack, bread, or milk on the way to work. By also providing more hot and cold foods we may also be able to cater for breakfast snacks as well as lunchtime meals. Through advertising and marketing we could promote the supply of sandwiches and hot food, and if successful could expand to lunchtime deliveries to the estate. Further down the line we may even look to acquire a unit on the estate solely to provide food and catering services to the local community. There is a Thirsk & District Business Association which involves many of the town's prominent business people. Gaining membership of such an association will result in many networking events, news updates regarding local businesses, raise awareness of the store/brand and present us with other business opportunities. It also enhances our mission of a 'community led business'.
Bytheway Stores Limited Business Plan - March 2007
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COMPETITIVE BUSINESS STRATEGY Analysis of Industry Structure (Porter’s Five Forces) Threat of New Entrants Having been established for almost 40 years any new entrants will be faced with a hard task to compete. There are two small garages just over half a mile away that have small shops on site but nowhere near the size and product range of Supasavas. There is also a derelict garage on the edge of the residential estate that could be purchased and developed by a major retailer (i.e Tesco) thus creating competition. However upon further investigation we have found this site to have approved planning permission to build 9 flats (see appendices) - so rather than competition we have actually increased our market share. We feel if we build upon and adapt constantly to the needs and wants of the community in developing the store, then any future new entrants will have minimal disruption to the shop sales and income. Threat of Subsitute Products As a convenience store there are all manner of products and services so the threat of substitute products can only be instigated by a rival convenience store set up in the immediate vicinity - an unlikely prospect given the established history of the store. Power of Buyers With a Tesco store to the east of town, these will undoubtedly have far greater buying power. However through products bought for Stainton Store we have discovered that although these retailers can buy for far less they still invariably charge more for products than we do - this is perhaps due to increasing overheads borne by these stores. By highlighting this fact through marketing and promotions we can persuade the local community to buy more of their weekly shop from Supasavas. Power of Suppliers The power of our suppliers is weak as there are a large number of suppliers and intense competition between them. Rivalry Amongst Existing Players With no shops within half a mile there is no immediate competition and the two garages just outside this vicinity have a much smaller size and range of products in comparison. SWOT Analysis The internal Strengths & Weaknesses of the company and the External Opportunities & Threats, can be summarised as follows: Strengths Established and profitable business for 40 years (15 in the hands of current owners) Situated at entrance to the largest residential estate in Thirsk (75% of the population) Situated directly opposite Thirsk Industrial Estate No competition within 0.5miles Experienced management (in both convenience store and business arena) Ability to conduct marketing, design and advertising in-house
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Weaknesses Difficult to expand premises without disrupting day-to-day sales Opportunities No competition in area Scope to increase business hours (early morning hours or even 24/7) Scope for spatial expansion (subject to planning permission) Possible expansion of the food and catering aspect of the business Potential to employ more local people thus contributing to Thirsk economy No current promotion or advertising activity (including cross promotions) Brand identity is non existant No 'community' services offered such as dry-cleaning and key-cutting etc. Threats New entrant into the market such as a major supermarket chain opening in immediate area. Our strengths will allow us to exploit opportunities in the market: Our experience in the field of managing and running convenience stores and other business endeavours will allow us expand upon the store's range of products and services. Our ability to provide marketing, advertising and design in-house will allow us to promote Supasavas' wares and services cost-effectively whilst also enhancing the brand identity of the new 'Bytheway Stores' moniker through various marketing activities. We are mitigating against weaknesses and threats: Although the threat of new entrants to the market will always exist, we feel our commitment to providing additional services and a community orientated approach will help build a convenience store brand that embodies a personal and community feel and so command continuing loyalty. Risk Assessment Mr Bytheway and Mr Osborne are continuing in their established (30+ years service) full-employment roles which will help ensure financial obligations are met. Mr Pinkney although an equal shareholder in the business, will be paying rent for the 3-bedroomed house ensuring that profits from the business are constantly reinvested thus contributing to positive cashflow and growth of capital funds.
Bytheway Stores Limited Business Plan - March 2007
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MARKETING PLAN Brand identity* The brand identity for the store is currently non-existant so we would be looking to introduce a new name and brand to build upon. We have chosen the name Bytheway Stores as this not only reflects the surname of one of the directors but evokes imagery of a local (By-the-way) and friendly store. We would not need to commission in the services of an outside advertising, design or marketing agency as we have the personnel to execute all this to a high standard in house. The new image and brand presence can then be carried through to a variety of mediums including: Exterior signage and advertising hoardings Van livery (if deliveries becomes prevalent) Any subsequent advertising or promotional literature Interior signage Display areas *See Pages 17-19 for and in depth look at Brand Identity and our proposals
Electronic & Barcode Till System At the moment Supasavas operates a fairly standard till to manage the takings. Having introduced a more sophisticated system at the Stainton Store, we will be looking to introduce a similar one here. This system, which includes barcode scanning software will enable us to manage the stock and also experiment with different products and foodstuffs to see which are the bestsellers and which are not. This gives us the ability to constantly refine the stock as a route to increasing turnover of stock and subsequently the profit margins. Typical screenshot of EPOS system currently in operation at Stainton Store
Bytheway Stores Limited Business Plan - March 2007
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Internal Restructure and further services The current setup incorporates many products including groceries, household goods, drinks, cigarettes and newspapers. In pursuing the installation of a Lottery terminal, ATM terminal, magazines and increasing the catering and food section we envisage restructuring the layout to one that is clear, concise and easily accessible*. In doing so we will be adopting marketing and placement strategies employed by the 'nationals' to ensure the best returns. One such example of a strategy is having the payment counter at the furthest point from the entrance so customers have to walk by more products thereby ensuing greater chances of impulse buys. We also have preliminary plans for extending the shop and property that will allow us to utilise the space far more effectively - see pages 20-23 for further details. *See pages 25-28 which show the present layout of Stainton Store (owned by Mr Bytheway and Mr Osborne).
Promotional Strategy As the existing owners do not participate in any marketing or advertising activity this is an area we can explore and excel at. By keeping local custom (both business and residential) aware of our services and products we ensure continued custom. We will also be introducing offers and savings schemes which will be promoted inside the shop, on the exterior (in the form of posters or advertising hoardings and Aboards), via leaflet drops and if cost effective, via local press. Public Relations Once the new identity is established, the internal restructure is complete, the Lottery and ATM terminals have been incorporated and we have applied for planning permission to extend the property we will compile a press release to help highlight our commitment to the community, gain support from them, and advertise that there may be commercial rental space available for 'community' based businesses. A feedback box will also be provided in store to gauge the mood, wants and needs of the local residents. This may also give us ideas and opportunities for other services and business prospects. Online Retailing In order to excel at customer service in this day and age an online service may prove essential. In the first instance we would look to have an email contact address to gauge the viability of this. If feedback is positive we may look to set up an online shopping/order facility. Preliminary research shows that www. bythewaystores.co.uk is currently available and will be our URL of choice. As well as our own online service and shopping facilities we can also benefit from those offered by wholesalers (i.e www.booker.co.uk). Such companies are beginning to offer services that may be extremely beneficial to us in terms of cost and time savings. For example they have delivery services (save time and cos, i.e motor/DERV) and also systems in place that allow us to scan stocktake items (barcode scanner) and automatically add to our shopping basket. This is a facility that aids time and stock management.
Bytheway Stores Limited Business Plan - March 2007
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BRAND IDENTITY Existing Retail Brandscape In designing a brand identity for 'Bytheway Stores' it is necessary to research current brands among the existing convenience store market. Below are some examples of some well known supermarkets and convenience stores, but what do these logos actually say about them? Supermarket Brands
Convenience Store Brands
Overall we can see that all of these companies have very general and open brands. There is not much to them, apart from text, which is one of the simplest ways of designing an open brand. This simplistic form makes them non-obtrusive and non-offensive to their very wide target audiences. Also the names of these brands do not mean much to the customer – no inspirational buzz brands like “nice ‘n fresh”, just simple names and abbreviations. Take for example ASDA – this is an abbreviation of “ASquith and DAiries” who merged to form the chain. Do customers know this? No. Do they care? Maybe not. Do they respond to the brand? Yes – although they may not realise it. The point being, is that a brand name does not need to be understood to be successful. Most of these logos have not been updated for a while and therefore from a design perspective they look outdated and old fashioned (for example we refer to Tesco and Costcutter). Old style spacing, typefaces and shapes (e.g. Morrisons, Netto and One Stop) are also prominent.
Bytheway Stores Limited Business Plan - March 2007
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Those that have recently updated their brands such as Sainsbury’s and M&S have done well. The M&S branding is open, friendly and fresh. It's instantly recognizable and judging by their recent form, is doing well. Sainsbury’s again is a very strong, modern brand – perhaps due to the alternative use of colour and typeface. It's interesting that these two higher end chains have been more bothered about their brand updates than the others – do higher paying customers respond more to modern branding? We suspect so. The colours of these logos are vast and various. One thing that is surprising is the lack or organic colours (greens and browns) seeing as the majority of their stock is food. One thing to refer to in this case is a recent poster campaign done by Tescos in which they abandoned their traditional red and blue for more earthy tones – this is perhaps due to the brighter primary colours not sitting comfortably with food photography compared to more natural colours. Below are some examples of these posters.
Also there is a colours psychological connotations – lime greens are fresh and healthy – browns and oranges are warm and inviting. These colours are few and far between in the original selection of logos. So should Supermarkets make more of an effort with their branding? On one hand it may help to attract a higher paying customer - but on the other hand, familiarity may be lost.
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Bytheway Stores Brand Identity The name 'Bytheway'' is simply an adoption of one of the company Director's surname. In choosing an individual's name this gives the store a friendly and approachable personality thus enhancing the community spirit that we are striving for. The name Bytheway is also suited to the convenience store sector in that roads in towns and villages are often named 'Way'. For example in the estate that the store actually resides we have: Herriot Way, Craigs Way, Dowber Way, Saint Mary's Way, White Rose Way and Drovers Way. Hence the store is By-the-way. As you can see below we have chosen to adopt the colours of green and brown which will stand out in the current market place whilst also encompassing many beneficial qualities. Green is known to symbolise nature, spring, fertility, youth, environment, natural abundance, growth, health, balance, harmony, life and stability. Whilst brown represents calm, depth, natural organisms, nature, richness, rusticism, stability and tradition. Brown can also stimulate the appetite, through evoking imagery associated with wholesomeness, steadfastness, simplicity, friendliness, and dependability. All these qualities will help complement the inherent values associated with 'Bytheway Stores'. As with the majority of supermarket and convenience store brands we have chosen to adopt a typeface only design. As mentioned previously this is a non-obtrusive and non-offensive approach that appeals to a very wide target audience. We have adopted a typeface that is clear, concise and yet still has a modern feel. A lowercase format has been introduced rather than UPPERCASE as this is a more subdued, friendly and informal approach.
Primary Logotype: Typeface used: Poynter Gothis Text Black Green: c50 m0 y100 k0 or Pantone 375CV Brown: c43 m52 y180 k38 or Pantone 463CV
Secondary Logotypes:
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PROPOSED EXTENSIONS Existing Plan
3-bedroom semi-detached accommodation
Attached store room/garage
Supasavas shop / store
Existing Plan Looking at the existing plan we see the current layout of the shop, storage facility (garage) and attached 3-bedroomed house occupying a sizeable corner plot. With the shop being only one storey and not making full use of the ground space it therefore has tremendous potential for spatial expansion.
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New upstairs accommodation - over 1000 sq.ft
Proposed Plan 1 (Draft only)
3-bedroom semi-detached accommodation
ATM Revised boundaries Bytheway Stores
Separate upstairs entrance Additional parking and recycling bins
Proposed Plan 1 Our preliminary plan shows the store ground space extended to meet the front of the house and the garage/storage space extended to meet the front elevation of the store. Based upon our current estimates this will give an increased floor space of between 30-40%. This will help accommodate the Lottery and ATM machines, magazines, greetings cards and key-cutting services as well as extending the existing product range. By redefining the land boundaries at the front we help to separate the house from the shop and also generate further parking areas for visiting custom or staff. This space could also accommodate bottle banks providing recycling schemes for the local residents - this may also mean the proposals are looked upon more favourably by council planners. To make full use of the site we plan to build above the store creating a second floor of over 1000 sq.ft. The advantages that such an extension could bring are: Increased property value (over and above the cost of building the extension) Rental income (residential or commercial) Increased traffic to the store, especially if a 'community' minded business such as a GP, Dentist, nursery or unisex hairdressers is chosen to reside and operate there. This could generate further business growth for the store (i.e. a Pharmacy to complement a GP surgery) Better community perception and awareness More wall space for advertising and promotion The option to utilise the space for a cafe and catering, serving the nearby Thirsk Industrial Estate
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Proposed Plan 2 (Draft only)
Private offices on 1st and 2nd floors giving a minimum of 1500 sq.ft
Private accommodation (3-4 bedrooms)
ATM
Storage or drive through to private resident parking
Sign to improve visability from main road
Main Entrance to Convenience Store
Cafe Bytheways
Front entrance to upstairs offices Dedicated Cafe entrance
Proposed Plan 2 This builds upon the first plan still further by creating additional space to the left side of the shop frontage. We envisage this space to be utilised as an in-store cafe/bakery, similar in style to the Bake & Bite® franchise offered by Country Choice (http://www.brake.co.uk/country_choice/index.htm). However with the extensive catering experience offered by several members of the family (10 years plus service) we will be able to implement such a service without the need to buy into a franchise operation. This also gives us more freedom to develop our own lines and enhance the 'Bytheway' community brand. Given the close location of Thirsk Industrial Estate, such an offering we believed will go down well and help increase footfall to the premises. This extension also gives rise to more office space upstairs - we estimate that in total the generated office space would be over 1500sq.ft. With current office prices ranging from £13-£50 per square foot, this would help generate an income of between £19,500 and £75,000pa. We would aim to incorporate modern facilities (i.e built in broadband and computer networking and disabled facilities where required) which will help to secure a good rental price. Such a plan would be initially drafted after discussion with local authorities and business community to gauge the response and demand for such office space. This will also enable us to tailor the plans to any prospective tenants.
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Alternate Plans (Draft only)
Hoardings for self promotion or paid advertising.
Planning Application Having visited the public access site on the Hambleton Borough Council website (http://planning. hambleton.gov.uk/publicaccess/) we have discovered that there have been no planning applications for 10 Sutton Road. There is only one listed constraint to planning permission for the property which is that 'Special consultation may be required to ensure development does not interfere with aircraft safety.' Upon further investigation we also saw that planning approval has been granted for a development two doors down at 6 Sutton Road. According to the planners the development consists of a 'Single storey and two storey extension to existing dwelling as amended by plans as received by Hambleton District Council on 30 January 2007'. Further details of this application can be seen in the Appendices section. All the above bodes well for future applications made for and on behalf of 10 Sutton Road, Thirsk.
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FUTURE PROSPECTS Short-Term (1 year) Year one will be spent consolidating the existing business and improving profits by: Completing and following through the application for a National Lottery terminal Apply for the introduction of an ATM cash dispenser Implementing a barcode/electronic till and stock management system (EPOS) Looking to install a credit/debit card payment system Incorporating magazine sales Gaining feedback from Industrial Estate with regards to food and catering services Restructuring interior to accommodate all the above changes Implementing the new name and brand to the exterior signage Applying for permission to place A-board advertising on main A170 road Applying for planning permission to extend property and store Medium Term (2-3 years) Year two will be looking to build upon the first year's work by: Extending catering and food supply if local feedback is positive Increasing turnover of the business to over the ÂŁ1million mark Explore the viability of a delivery service (groceries or hot food/snacks) to both residential and commercial markets Commencing and completing building work if planning permission is granted Increase marketing and advertising activities to boost awareness Long-Term (3 years +) After year three we are looking to have a friendly local convenience store that has become the hub of the community but with a big store brand identity synonymous with quality, value and service. Planning permission hopefully granted we hope to have one or two businesses occupying the second floor of the store that are beneficial to the community and enhance the 'community' brand that epitomises the mission statement of Bytheway Stores. With proven systems and a unique brand identity in place we may look to purchase a similar setup in another location and apply the same protocols thereby instigating a chain of Bytheway Stores and/or Cafe Bytheways.
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STAINTON STORE CASE STUDY Bought in August 2005 by Mr Stephen Bytheway and Mr Stephen Osborne, Stainton Store is situated in a small picturesque village to the south of Middlesbrough. The shop currently provides confectionery, drinks (including off-licence sales), national lottery, newspapers (including news deliveries), magazines, greetings cards and a small selection of household convenience goods and boasts an annual turnover in excess of ÂŁ350,000. Gross profits are around the 20% mark which is slightly more than Supasavas in Thirsk. As a Project Manager at Cleveland Bridge, Mr Osborne also harbours extensive qualifications in both civil engineering and construction engineering. This has enabled him to design and implement alterations for Stainton Store without the need for other contractors or builders. Mr Osborne's knowledge and skills will be invaluable in internal restructuring of the Thirsk store, future planning applications for extending the property and subsequent building/construction work. The ground floor of Stainton Store has been altered to provide extra office space, more storage and dedicated bathroom and toilet facilities. The first floor accommodation which could previously only be accessed from the shop, has since been developed, and a dedicated outside entrance has been put in place. This accommodation is currently rented out to an accountancy firm. The store also has a large rear garden and garage which is presently used as an additional storage area.
Above: Front elevation of Stainton Store. Left: New side entrance to first floor accommodation.
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Interior photographs of shop floor
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More interior photographs of shop floor
Back office
Kitchen
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Toilet and washbasin
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First Floor - Office no. 1
First Floor - Office no. 2
Second Floor - Office no. 3
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FINANCIAL INFORMATION Purchase Price £378,000 +SAV (Freehold). Breakdown of Associated Fees / Costs Purchase Price: £378,000 Estimated SAV: £9,000 Solicitor (Legals plus local searches): £1,500 Accountant (inc. Limited company and VAT registration): £250 (est) Stamp Duty: £8,250 Lending fees: £3,000 Total Cost (estimated): £400,000 Note: Pinders valuation (£1,100+VAT) has already been paid by Mr D S Pinkney.
Finance requirement: With SAV equating to approximately £9,000, associated fees amounting to £4,750 and Stamp Duty Land Tax at £8,250* we have forecasted that the purchase will cost in the region of £400,000. Our contribution is expected to be £100,000 (or thereabouts) with the remainder representing the finance element. We have received credit approval from Alliance & Leicester for a commercial mortgage of £300,000 which is expected to be a capital and interest repayment mortgage over a 20 year term. We will also be taking advantage of interest only payments for the first year giving us to time to acclimatise to the new business and weather any storms during the initial handover phase. This also enables us to build up additional funds in anticipation of future growth and drafting plans for expansion. *On £275,000 property valuation. From initial research we thought that SDLT may be due on the full £378k purchase price (http:// www.tltsolicitors.com/legal-update/Commercial-Update/2006/P6518.asp) and originally based our financial calculations on this as a precautionary measure. However we have since been advised by our solicitor that this is not the case hence the revised figure.
Commercial Lending (Alliance & Leicester Commercial Banking) Loan Value: £300,000 Term: 20 years Rate: 1.65% above BoE base rate (equates to 6.9%) Arrangement fee: 1% (£3,000) No security fees for legal charge Free Business account Payable per month (Capital Repayment): £2,341.51 Payable per month (Interest Only): £1,725.00 Joint & Several Guarantee Alliance & Leicester have also informed us that they require a £60k Joint & Several Guarantee as security as well as a Debenture and a Charge over the said property.
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VAT (TOGC) As the vendor is registered for VAT, the purchase (and property) may be liable for VAT. However we have been informed by our solicitor that the transaction can be treated as a TOGC (Transfer of a Going Concern). This in effect means that VAT is charged at 0% (as long as both parties are VAT registered) which reduces the financial burden on us (as we would have had to finance the VAT for three months).
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Financial Performance (September 2005-Present) Takings in 2005/06:
Takings in 2006/07:
In comparing figures from September to November 2005 together with the same months in 2006 we can see that year on year the figures are increasing on average by 8%.
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Profit & Loss Forecast
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Overview Looking at the official Profit & Loss accounts for 2005/2006 we can see a gross margin of approx 20% (slightly less than industry standard for newsagents and convenience stores) and a net profit in 2006 of £42,175. With the net profit equating to £3,514.58 pcm and an estimated mortgage repayment of £2,341.51 (based on capital repayment on £300,000 borrowings) we find there is a £1,173.07 excess. With an interest only repayment (for the first year only) this excess increases to £1,789.58. On the surface this means that the mortgage repayments should be met comfortably. On Site Managers After looking through the commissioned Pinders report we have deduced that the part-time staff account for only half the 90 hour working week (costing approx £12,500 in wages). This means that as well as managing the business, Daniel Pinkney and Stephanie Bytheway will be effectively working the other 45+ hours. As such they should be entitled to £12,500 between them (£6,250 each). However as the first year will be a time for building up the business we have decided that we will assign a wage of £5,040 each (£10,080 in total) as this is also a tax-efficient figure for us to work with. This will be reviewed after the first 6 months of trading. This means that the net profit per month will be reduced by £840 to £333.07 (on the capital repayment mortgage) which is not as comfortable as we would like. However, these figures do not take into account increased turnover during the last six months nor the rental payments that will be made by Mr Daniel Pinkney and Miss Stephanie Bytheway as occupiers of the house - we have opted for a preliminary rental figure of £400pcm. This gives us, and the lenders additional security as well as income that can be reinvested into the business to fuel our ambitions for future expansion and growth. A detailed breakdown of the proposed costs are shown below. Breakdown of figures (per month) Year Two Onwards
Year One Net Profit
£3,514.55
Net Profit*
£5,666.67
Rental Income
£400.00
Rental Income
£600.00
Total Income
£3,914.58
Total Income
£6,266.67
Mortgage Repayments (Interest only) Wages (Daniel & Stephanie)
£1,725.00 £840.00
Mortgage Repayments (Capital & Interest)
£2,341.51
Wages (Daniel & Stephanie)
£1,700.00
Total Outgoings
£2,565.00
Total Outgoings
£4,041.51
Reconstituted Net Profit
£1,349.58
Reconstituted Net Profit
£2,225.16
*Income figures for the 2nd year based upon Pinders estimate of £68,000 net profit. This takes into account the installation of a National Lottery Machine and other endeavours as detailed in this business plan.
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KEY CONTACTS Stephen Bytheway (Director) 10 Blackthorn Coulby Newham Middlesbrough Cleveland TS8 0XD Tel: 01642 595761 Mobile: 07727 603828 Email: stephen.bytheway@ntlworld.com Email2: Steve.E.Bytheway@SABIC-Europe.com Daniel Pinkney (Director) 24 Ampleforth Avenue Eston Middlesbrough Cleveland TS6 9DH Mobile: 0797 161 2965 (text only) Email: dan@infinity76.co.uk Email2: dan.pinkney@itp-properties.uk.com Stephen Osborne (Director) 2 Celandine Close Marton-in-Cleveland Middlesbrough Cleveland TS7 8RX Tel: 07725 676612 Email: stephen.osborne@clevelandbridge.com Bank (also Mortgage Lenders) Philip Hex Business Banking Manager Alliance & Leicester Commercial Bank plc Yorkshire Business Centre 44 Merrion Street Leeds LS2 8JQ Tel: 07753 712138 Fax: 0113 285 6123 Email: Philip.Hex@alliance-leicester.co.uk
Bytheway Stores Limited Business Plan - March 2007
Accountant Russ Teasdale Beaumont Accountancy Services Unit 306, The Innovation Centre Vienna Court Kirkleatham Business Park Redcar TS10 5SH Tel: 01642 489045 Fax: 01642 492727 Email: russteasdale@hotmail.com Solicitor Stephen Haigh Punch Robson 35 Albert Road Middlesbrough TS1 1NU Tel: 01642 230700 Fax: 01642 353720 Email: shaigh@punchrobson.co.uk Vendors Gary and Julie Jackson Supasavas Thirsk 10 Sutton Road Thirsk North Yorkshire YO7 1DJ Tel: 01845 526127 Email: garyjulie@shop55.fsnet.co.uk Vendors’ Solicitor Joanne Oldfield David J Cole & Company Parkway House East Road Northallerton DL6 1ND Tel: 01609 780717
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APPENDICES 1. Thirsk Rural Business Centre 2. Thirsk Location Map 3. Location of shop and competition 4. Sales Particulars 5. Supplied Ground Floor Plan 6. H.M Land Registry Title Plan 7. Planning Applications 8. Convenience Store Articles 9. Alliance & Leicester ATM 10. Curriculum Vitaes (all 3 Directors) 11. Personal Licence Certificate (Stephen Bytheway) 12. E&P Press Release 13. E&P Design Portfolio 14. Subscriptions (Convenience Store, Retail Newsagent, Retail Express & Shop-Equip) 15. Stainton Store Management Sheets
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Directors: Mr Stephen Osborne Mr Stephen Bytheway Mr Daniel Pinkney Bytheway Stores Limited 10 Sutton Road Thirsk North Yorkshire YO7 1DJ