Manitoba MPNP Business Plan

Disclaimer

• This presentation has been prepared exclusively for the benefit and internal use of a qualified sophisticated global financier to whom it is directly addressed and delivered. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by XXXXX. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of XXXXX.

• The information in this presentation is based upon forecasted numbers provided in industry literature and our best estimates. These projections and estimations reflect prevailing conditions and our views as of this date, all of which are accordingly subject to change.

• In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public and private sources which were provided to us or which were otherwise reviewed by us. In addition, our analyses do not claim to be appraisals of the assets, or the valuation of any entity. XXXXX makes no representations as to the actual benefits which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction.

• A number of statements referenced in this presentation that have been granted, are forward-looking statements, and any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, and goals, assumption of future events or performance are not statements of historical fact and may be "forward-looking statements.”

• Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward-looking statements in this presentation may be identified through the use of words such as "expects,” "will,” "anticipates,” "estimates,” "believes,” or statements indicating certain actions "may,” "could,” or "might" occur. Any person or entity seeking to make an investment in the company should not rely on the information set forth in this business plan as complete.

• Any person or entity seeking to make an investment in the company should not rely on the information set forth in this business plan as complete. There exists substantial information with respect to the company, its business and its future prospects which are not set forth in the business plan and there exist a substantial number of risks associated with an investment in the company which are not set forth in this business plan.

• Any person or entity considering making an investment in the company must ensure that they avail themselves of all other information relating to the company, its business, and its financial projections, as well as all other information deemed necessary or desirable by such prospective, prior to any such investor making an investment in the company.

• Any prospective investors shall be required to represent to the company that, prior to making such investment, they have received from the company all information deemed necessary or desirable by them with respect to such investment and that such investor did not rely on any information set forth in this business plan in making any such investment.

• By accepting delivery of this plan, the recipient agrees to return this copy to the corporation at the address listed below if requested.

• Do not copy, fax, reproduce or distribute without written permission from XXXXX.

Executive Summary

A growing number of consumers have become increasingly pressed for time as more Canadians returned to work and school in the years following the recession. Consequently, the quick speed of transactions at convenience stores has proved to be valuable to busy individuals.

Despite growing costs, operators have maintained relatively healthy profit margins over the past five years thanks to consolidation and the sale of higher-margin goods. As the economy recovers and disposable income levels rise, consumers are expected to turn to the convenience of industry establishments.

Capitalizing on this trend, Mr. XXXXX intends to open a convenience store in Winnipeg, Manitoba. XXXXX will be incorporated as a Limited Liability Company with Mr. XXXXX as the 100% owner and manager of the store. The store will provide the usual convenience store products and services. In addition to this, the store will provide ethnic products to cater to the widening taste palettes of the local and immigrant community. The store will provide home delivery and other services like online ordering, order and pick-up etc. The store will have a wide range of facilities especially for the retired and disabled community. The Store will look to source both products and staff locally to give a boost to the local economy.

Mr. XXXXX will bring in CAD 250,000 to fund the initial costs of incorporating the entity and setting-up the store. The projected financial highlights of the store are as reflected below:

XXXXX–AConvenienceStoreinWinnipeg

Mr. XXXXX intends to set-up a convenience store in Winnipeg, Manitoba.

He will bring in investment of CAD 250,000 to set-up the business. The initial investment will be spent on costs like building the website, leasing premises for the store, refurbishing the premises, purchase of fixed assets, equipment etc., spending on initial marketing and promotions and other costs like legal and professional charges to incorporate the entity etc.

The business will be registered in Winnipeg as a Limited Liability Company.

The store will sell a wide range of items like groceries, packaged foods, baked goods, frozen foods, fresh produce, toiletries, magazines etc.

The store will provide services like home deliver, online order, phone order, scheduled deliveries etc.

The store will have facilities like access to and convenient shopping atmosphere for disabled people, convenient parking, in-store technology etc.

The store will target residents in the region like singles, couples, families, homemakers, working people, tourists, retired people, disabled people, students etc.

The store will seek to source products as well as people (staff) locally to provide business and employment opportunities in the region.

Business Profile

Products

XXXXX will stock and sell a wide variety of products, both edible and nonedible. A few of the products categories include:

• Groceries: Rice, wheat, breads, cereal, pasta, pickles, etc.

• Fresh produce: Fresh fruits and vegetables, frozen fruits and vegetables,

• Frozen Foods: This includes frozen fruits, frozen vegetables, frozen meats and frozen ready-to-eat meals.

• Meat & Eggs: This includes steaks, chops, chicken, bologna, ham, pickle loaf and salami etc.

• Dairy products: Milk, Yogurt, butter, milkshakes, ice-cream etc.

• Beverages: This category constitutes bottled beverages such as water, soft drinks, coffee, soda, energy drinks and alternative beverages.

• Snacks: This includes biscuits, wafers, chips, dried meat snacks, nachos, Hickory Sticks, cheezies etc.

• Alcohol: Wine, Champagne, Beer, Rum, Whisky etc.

• Tobacco & cigarettes: Marlboro, Camel, Canadian Classics etc.

• Toiletries: Soap, shampoo, hand-wash, toilet paper, tissues, kitchen paper towel, etc.

• Baby Products: This includes baby food, baby toiletries, baby diapers etc.

• Others: Other items include magazines, newspapers, paper products, party decorations, lottery tickets, tickets for events etc.

Services

The store will offer a wide range of services like the following:

Home Delivery: The store will provide home delivery of products purchased in-store, online or by phone order.

Online Order: The store will have its own website wherein customers can look at products available in store and order online, to be home delivered or picked-up by them.

Phone Order: The store will also provide phone order services wherein customers can call up the store and order the required products to be home delivered or picked up by them.

Periodic Orders: Customers can schedule periodic orders of certain items from the store to be delivered at their homes. For example; a big pack baby napkins to be delivered once a month, specific toiletries to be delivered periodically, fresh bread to be delivered weekly etc.

Coffee and snacks: The store will have a coffee counter along with fresh hot snacks for people to meet at the store, enjoy a cup of coffee while they finish their shopping.

Staff Assistance: The store will provide staff assistance for people with disabilities, retired people or others who need help with finding products etc.

Business Profile

Facilities

The store will offer a wide range of facilities like the following:

Disability Friendly: The store will be accessible to those in wheel chairs, whether old and retired people coming to shop or those with disabilities. The store entrance and layout will be designed and set-up to make it easy for this segment of the customers to have a convenient shopping experience. A few such facilities will include: a separate parking, a separate check-out line, wider aisles, product favorites of this segment at their reach in a sitting position, staff assistance etc.

Ease of Parking: The store will have ample parking for those coming in to shop. There will also be separate parking for the disabled. The store staff will also help out customers with parking, if required.

Restrooms: The store will have a well-maintained restroom for customers to use.

Seating: The store will have seats scattered across the store, for tired customers to sit down.

Eco-Friendly Bags: The store will offer eco-friendly bags to carry the groceries like paper bags, cloth bags, jute bags etc.

Cash on Delivery: The store will offer a cash on delivery facility for those opting for home delivery of products.

Mobile Card Machine: The store will also offer a mobile card machine for customers who prefer to pay by card even for home deliveries.

Clear Instructions on Website: The store will have an easy to use website with clear instruction (especially for the disabled community) regarding the layout of the store, the facilities available, the products and services provided, the latest discounts and offers etc.

Advantageofthebusinesscomparedtocompetitors

The store will offer a wide range of products, services and facilities that will enable it to gain a competitive advantage as below:

Loyalty programs: XXXXX will provide loyalty programs to its customers right from the beginning.

Reloadable cash cards: The store will provide cash cards that customers can periodically reload. This will help them in cases where they don’t have cash or change to tender.

Personalized Emails: The store will send customized and personalized emails to thank customers as well as inform them about new offers and promotions or any new stock of items in the store that they may be interested in.

Niche market: The store will appeal to a niche market segments like the immigrant population in the region, by providing ethnic foods and ingredients.

Add-on Services: Providing services in addition to the usual ones is essential to create a loyal customer base and retain customers, as well as attract newer ones. For example; accessibility and special staff assistance to handicapped and disabled people. XXXXX will provide such add on services and walk that extra mile to ensure customers always leave satisfied and come back to visit.

Pricing: The store will price its products cost effectively to ensure the store does not lose out and at the same time, customers do not feel the burden of higher price. The store will price essentials at competitive prices and premium/ethnic and uncommon products at higher prices. The store will provide ‘combo offers’ to sell essential products and premium products as a combination.

Business Profile

OrganizationChart

Roles and Responsibilities

Owner/ Manager

• Bring in investment

• Set-up the store

• Recruit and train employees

• Devise business and marketing strategies

• Tie-up with suppliers and partners

• Manage inventory

• Acquire and retain customers

• Manage cash flows and funds flows

• Analyse business and financial performance

• Achieve periodic business and financial targets

Roles and Responsibilities

Staff

• Welcome customers into the store

• Assist customers with getting products

• Suggest best products when asked for

• Inform customers about ongoing offers and discounts

• Direct customers to correct aisles

• Maintain inventory

• Co-ordinate with suppliers

• Keep the store premises clean

• Help customers with parking

• Heat and serve in-store food like snacks and coffee

• Handle incoming merchandise and ensure it is entered into the inventory system

• Assist with billing and payments

• Make home deliveries

Business Profile

ManagementProfile

XXXXX has ample experience in all the activities involved in managing a convenience store. His education, knowledge and skill sets acquired in his career span of over two decades, will be the biggest strength to this business.

His job responsibilities in his career included:

• Purchasing raw materials

• Liaising with overseas suppliers

• Staff recruitment, training, motivation

• Preparation and submission of statutory returns

• Managing cash flows

• Preparing management reports

• Using computerized accounting system

• Analyzing and explaining financial information

• Preparing bank and stock reconciliation

• Managing daily cash

• Office Administration Year Designation Organization

Sep 2013 – Now Director XXXX

Aug 2002 – May 2015 General Manager XXXX

Jan 1997 – Mar 2002

Chief Accountant XXXX

His skill sets include:

• Import of edible products

• Managing inventory

• Managing cash flow

• Analyzing financial statements

• Filing taxes

• Staff motivation

Owner’sroleinthebusiness

Mr. XXXXX will be the owner and manager of this new business. He will assume the responsibility for incorporating the entity and obtaining all licenses and permits to do business in the Province legally.

He will scout for a strategic location in Winnipeg to set-up the store. He will personally manage the setting up of the store premises, tying up with suppliers of products, deciding on the product mix and the amount of inventory required etc.

He will be actively involved in the day-to-day operations of the store and personally oversee the growth of the business. He will manage inventory, product placement, network with suppliers and partners, nurture such relationships, devise customer acquisition and retention strategies etc.

He will recruit, train and build a highly skilled and motivated team to provide the best customer service in town.

He will be involved in marketing and promoting the business by devising strategies, printing out brochures and pamphlets, networking within the industry, creating strategic tie-ups that will benefit the business etc.

He will be responsible for bringing the initial investment to set-up the store. He will negotiate with suppliers for the most beneficial terms, he will create budgets for marketing, inventory, store capex etc. He will manage funds, daily cash flows, supplier payments etc.

In the long term, he will be responsible for growth and expansion of the business through his decision making ability and networking skills.

BusinessProcesses

Procurement

Mr. XXXXX will closely monitor the procurements and purchases based on the product mix decided to be displayed and sold. The products will be made from approved suppliers.

Product Placement

The store will strategically place products to catch the eye of the customers and lure them to buy. For example: products popular with kids will be in the bottom shelves within their reach, candies and snacks at the cash counter, free samples near the cash counter etc.

Delivery

Delivery of products purchased in-store, ordered via phone or online will be provided subject to availability of stock, and staff for delivery.

Replacement

In very rare cases of faulty material, expired goods etc. replacement will be given to the customers.

Inventory Management

Inventory count will be taken on a regular basis. Any inventory item falling below the minimum will be monitored, and order will be immediately placed.

Customer Service

Attending to customers, fulfilling their needs, helping them find what they want, assisting them with their bags, ordering for items not immediately available and arranging for delivery etc. will ensure good customer service

Marketing

Marketing is an ongoing activity. Marketing will include online strategies such as SEO, as well as offline strategies such as coupons, discounts etc.

Business Profile

LocalEconomicImpact

XXXXX will benefit and provide value addition to all segments of the market:

Wide Variety of Products: The store will provide a wide variety of products that the usual Canadian grocers are not likely to include in their stock.

Ethnic Food: The store will stock ethnic food items to cater to the ethnic community in Winnipeg.

Disability Friendly: Not many convenience store are disability friendly. XXXXX will provide disability friendly services and facilities.

Local employment: The store will provide employment to the locals and benefit the community by creating such job opportunities.

Taxes to the Government: The business will contribute to the growth of the local economy by doing good business, showing revenue growth and paying taxes.

Business to suppliers: The store will increase the revenues of the suppliers to the store by providing more business to them.

MarketOverview

The convenience store market in Canada encompasses the largest food retail channel in Canada. These establishments retail general lines of food products, including fresh and prepared meats, poultry and seafood, canned and frozen foods, fresh fruits and vegetables and various dairy products. Within Canada, the three largest competitors in the landscape include Loblaw (TSX:L), Metro (TSX:MRU) and Empire (TSX:EMP.A). Combined the three companies possess nearly three quarters of the entire market share (Loblaw 30%, Empire 25.7% and Metro 10.5%).

During fiscal year 2017, Canadians spent over $85 billion on groceries, with companies capturing just shy of $2 billion in profits. The industry has grown at an annualised rate of 1.4% in the trailing five years, and analysts expect this rate of growth to persist in years moving forward. Although industry expansion in recent years, increasing competition from alternative retailers such as warehouse clubs and supercentres and lowered the volume sales of certain goods and further pressured industry operators to lower their product prices. In recent years some of Canada’s top grocers have lost market share to a variety of discount retailers, such as Costco and Walmart which have gained market share of the food-retailing sector through efforts of these mega-chains to bolster their grocery sections.

Key drivers for this industry come from per capita disposable income, consumer price indices for food and external competition from new entrants. In years moving forward, it is expected that Canadian consumers will have more discretionary income to spend on food shopping. With the consumer price food index expected to grow at a faster rate than discretionary income, this could pose a threat to the industry. Lastly, the threat of new entrants stealing market share from current players should concern all existing grocers in the market. As a result, we believe companies that can adapt to changing consumer trends and those who place freshness over prices should prosper.

Market Profile

MarketTrends

The latest trends in the convenience store industry in Canada are:

Technology integration: Self check-out kiosks, scan-and-go technology are the latest additions to the industry establishments. Currently, Walmart Canada is testing its scan-and-go technology where shoppers scan the barcode of their items using a portable scanner available in the store.

Amazon Go: Amazon opened its Amazon Go stores which incorporated its ‘Just Walk Out’ technology in Seattle to its employees. Customers with a smartphone, an Amazon account and the Amazon Go app, could simply walk into store and walk out again with their selected products, with all items automatically charged to customers’ Amazon accounts. This technology can detect when products are taken or returned to the shelves and keeps track of them in your virtual cart.

Added Convenience: Canadian retailers are trying to compete with the new offering by Amazon GO. Hence, they are providing added convenience to customers. Loblaw announced a partnership with Metrolinx to offer its new PC Express service in five GO Transit stations in the Greater Toronto Area. The service will allow commuters to pre-order groceries online for pickup during their next day’s commute.

Meal kits: Meal kits are growing in popularity due to the lack of time amongst consumers to prepare and assemble meals. Meal kits provide an all-in-one solution that includes a variety of ingredients with simple instructions. According to Mintel research on delivery services and meal kits, the number of companies offering meal kits is on the rise. As consumers today become increasingly pressed for time and key segments look to grocery retailers for time-saving offerings when it comes to preparing meals, this is likely an area where the market will see greater investment.

Source: http://www.mintel.com/blog/retail-market-news/canadian-grocery-retail-trends

Market Profile

MarketandSalesForecasts

This statistic shows the retail sales value of convenience stores in Canada as of September 2017, by segment. In 52 weeks ending in September 2017, the sales value of general merchandise segment in convenience stores amounted to approximately CAD 5,128.68 (USD 3,975.72) and that of cold beverage segment to CAD 911.85 (USD 706.86) million.

The convenience store industry in Atlantic Canada employs an estimated 28,300 people full and part-time at 3,300 convenience store locations across the region, and generates more than a half-billion dollars in annual sales.

This statistic shows the retail sales of convenience stores in Canada from 2013 to 2018.

Retail sales of convenience stores were forecasted to grow from 1.9 billion Canadian dollars in 2013 to 2.03 billion Canadian dollars in 2018.

MarketingStrategy

Website

XXXXX will have an option for customer to order online through their user friendly website with a secure payment portal, a shopping cart, description of the products with their images and prices, offers and coupons, home delivery option tab as well as click and carry option.

Print Media Advertising

The company will advertise in local print media, especially in newspapers, local dailies, and magazines in circulation. This will also help boost the brand image of the company.

Social Media Marketing

In today’s world, no business can survive without having a social media presence. XXXXX will promote its brand by using social media (primarily Twitter, Instagram and Facebook).

Local SEO

XXXXX will have a powerful SEO strategy to gain visibility and ensure it is shown on every relevant search by prospective customers. The store will use all the keywords on their website to ensure relevant searches lead to the landing page on the store’s website or social media pages.

Radio Advertising

This is the best way to reach the target customers within the local community. Advertising on the right channel at the right time will help capture the attention of youngsters and the driving population who listen to the radio. This will help this outlet become a recognized name in the community.

Print Media

Social Media Radio

MarketingStrategy

Word-of-Mouth Marketing

The business will be active on all food and travel websites, replying to guest comments and feedback. This will show the business’ commitment to customer service.

In-store Tasting events

The store will host in-store tasting events especially of items that people may not generally buy. This is a great way to showcase the products being sold at the store and help increase the purchases of items people might not typically buy.

Unique Products

Along with the usual products to cater to the day-to-day needs of the consumer, the store will also sell latest products and different and unique products which are not sold by other stores. This will help it stand out from the rest of the competition.

Freebies

The store will offer freebies like a newspaper for morning customers, free food for new samples, free coupons etc. to encourage customers to visit their store and beat competition.

Offers and Discounts

The store will provide periodic offers and discounts through social media as well as offline to keep the customers happy and satisfied. The store will also send promotional emails and SMSs through other modes of communications.

Market Profile

MajorCompetitors

The Convenience store industry is highly fragmented with numerous independent single store operators, employing less than five people, dominating the market.

This fragmented nature of the industry makes it difficult for a single c-store operator to gain significant market share leading to a low level of market share concentration in the industry.

Convenience stores compete with different retail channels and; therefore, proximity to different types of stores can hamper growth. For instance, growth has been slower in areas where there are dollar and drug stores. Hence, location of the c-store is the most important factor in deciding competitors.

There is huge competition in the Winnipeg convenience store industry. The existence of reputed established stores like Mac’s Seven-eleven, Safeway, Walmart, Whole Foods etc. along with numerous smaller ones keeps the market competitive.

7-Eleven and Mac’s are the two major convenience store chains. A few of the other popular convenience store in Winnipeg are:

• M&M Convenience Store

• Alvimar Convenience Store

• Bruce Convenience Store

• Sun Food Mart

• Mass Convenience Store

• Valour Convenience Store

• Sol Convenience Store

• Graham Convenience Store

General Resource Requirements

Location

The store will be located at a prime spot in the city of Winnipeg. The rationale behind the proposed location is to have the maximum visibility creating more footfall into the store and be easily accessible by the target customers.

Suppliers

EquipmentandTools

The store will require basic furniture that any usual retail store would require such as table & chairs. Apart from that, the store will purchase commercial refrigerators to store perishable products. It will also purchase computers & printers for storing and accessing the customer database, billing and accounting the transactions.

The primary suppliers to the store will be suppliers of non-perishable groceries, baked goods, perishable fruits and vegetables, branded beverages, dairy products, frozen foods, ethnic foods, packaged foods, snacks and candies, paper products, branded toiletries, baby foods, grocery bags suppliers etc. XXXXX will have a mix of branded and non-branded suppliers to deliver quality as well as maintain cost budgets to run the store. The store will source perishable products, baked goods, meat and dairy locally. Even with respect to other store products, the management will look to source locally to promote other local businesses. A few of the suppliers are as below:

DistributionChannel

XXXXX will distribute its products through the store in the form of in-store purchases and through its website and phone orders for in-store pick up or home delivery.

ProfessionalAdvisors

XXXXX will use the services of legal and professional advisors to set-up the entity and ensure all permits to set-up the business are obtained. After crossing the initial stage, such advisors will be approached on a need basis, for cases like tax help, accounting help and legal help.

General Resource Requirements

Risksandmitigation

Risk of Fire

Appropriate fire insurance coverage to protect the inventory and small machines will be taken.

Risk of Theft

Appropriate detection mechanisms (e.g., alarms, CCTV monitoring, etc.) Complete burglary protection insurance coverage will also ensure that risk of theft is mitigated.

Food Safety Risk

Following all the required procedures to ensure food safety like tying up with quality suppliers, ensuring food containers are sealed, storing in a temperature controlled environment etc.

New to the market

Active marketing and promotion through networking, add on services, advertising etc. and optimum product mix in inventory

Risk from existing competition

Providing top-quality products as well as ensuring in demand products are available as per market trends.

Human Resource Requirements

Financial Resource Requirements

Profitability Charts

Critical Success Factors

CriticalSuccessFactors

Location

Location is the most critical factor for a convenience store. Visibility of the store, ease of access, parking facilities are all factors that make the location a good one. Moreover, accessibility by both the residential population as well as the tourists and working population is essential for the growth of the business.

Suppliers

Tie-up with reputed suppliers who supply quality products at reasonable prices is another critical success factor. Building a long term relationship with suppliers to get favourable terms is also essential.

Service Quality

The service provided by the management and the staff to its customers is also essential for the growth in popularity of the store. This quality ensures that the customers keep coming back and also refer others to the store.

Variety

The variety of products maintained at the store is another factor that helps build a successful business in this industry. Being ahead of the market trends and offering customers with a wide range of products at the store is sure to bring in more paying customers.

Inventory Management

Managing the inventory, ensuring there is ample stock of fast moving items and restricted stock of slow moving ones, ensuring that inventory does not last in the store till it gets expires, maintaining minimum order quantity etc. are all functions of inventory management and essential for the business.

Marketing

Marketing is important especially in start-ups where the management is looking to create awareness about the store within the locality. Managing the marketing budget and ensuring that the marketing campaigns reach the right audience and also has the maximum reach is essential.

Implementation Timeline

ImplementationTimeline

December 2018 to January 2019

February 2019 to March 2019

• Finalizing Business Plan

• Submitting Visa Documents

• Obtaining Visa

• Mobilizing funds for initial investment

• Obtaining Visa

• Refurbishment of premises

• Signing up with suppliers

• Shortlisting of vendors

• Purchasing Initial inventory

• Building of website

• Setting up the store

• Procuring inventory

• Company formation

• Signing up of lease

• Lease deposit

• Creating awareness about the store

• Initial marketing and Promotions

• Staff recruitment

• Staff training

• Building list of emails for the purpose of marketing

• Branding

• Opening the store

• Ongoing procurement and sales

• Tying up with more suppliers

• Ongoing Marketing

• Issuing of coupons

• Ongoing staff training

Implementation Timeline

ImplementationTimeline

• Open the Store

• Create awareness about the store

• Acquire and retain customers

• Sustain financially

• Improve the technology in the store with selfcheckout options and instore marketing etc.

• Achieve year-end targets

• Cross target sales and profit figures

• Achieve a good growth trajectory

• Achieve year-end targets

2019 2020 2021 2022 2023

• Launch innovative products

• Integration of online sales and delivery

• Achieve year-end targets

• Increase the variety of products on offer

• Provide customized services to loyal customers

• Achieve year-end targets

AppendixA:CapitalRequirements

Mr. XXXXX will bring in investments in the form of equity to the tune if CAD 250,000 to fund the initial costs of setting-up the store.

AppendixB:Break-evenAnalysis

Break Even Analysis

AppendixC:ProjectedFinancialStatements

Projected Income Statement

AppendixC:ProjectedFinancialStatements

Projected Cash Flow Statement

AppendixC:ProjectedFinancialStatements

Projected Balance Sheet