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Hardware Store Business Plan

Published Nov.25, 2023

Updated Apr.23, 2024

By: Jakub Babkins

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Table of Content

A hardware store is a retail business that sells tools, materials, and equipment for home improvement, construction, and maintenance projects. Hardware stores can cater to different segments of customers and can also offer services such as installation, repair, and consultation, as we explained in our Hardware Retail Franchise Business Plan .

What is the Business Plan for a Retail Hardware Store?

A business plan for a retail hardware store is a document that outlines the goals, strategies, and financial projections of a store that sells hardware products and supplies to customers. A business plan typically includes the following sections:

• Executive summary
• Company description
• Products and services
• Market analysis
• Competitive analysis
• Marketing and sales strategy 
• Management and organization
• Financial plan

Why Do You Need a Business Plan Sample for a Hardware Shop?

A hardware shop needs a business plan sample to outline its vision, goals, and strategies. It can show how the shop will operate, what products and services it will offer, and how it will reach its target market. A business plan sample, like a Computer Software Business Plan , can also demonstrate the financial viability of the shop and attract funding and support from various stakeholders. A business plan sample is a vital document for any hardware shop owner who wants to start or grow their business.

Here is an example of a retail hardware store business plan sample:

Executive Summary

Ace Hardware is a new hardware store that will be located in San Diego, California. Ace Hardware will operate as a sole proprietorship owned by Alex Hales, an experienced and certified hardware professional.

Ace Hardware will target residential and commercial customers in the San Diego area who are looking for a convenient, reliable, and friendly hardware store. Ace Hardware will focus on the following customer segments:

• DIY enthusiasts
• Contractors

Ace Hardware will require a total of $500,000 to start and operate the business. Ace Hardware is seeking a $300,000 loan from a reputable bank to finance the startup and operating costs of the business. The loan will be repaid in 5 years with an interest rate of 10%. Ace Hardware will also contribute $200,000 of the owner’s savings as equity.

Company Overview

Ace Hardware is a new hardware store that will be located on Main Street, San Diego, California. The store will occupy a 5,000-square-foot space in a busy and convenient shopping plaza, with ample parking and visibility. The store will be open from 8 a.m. to 8 p.m., seven days a week.

Ace Hardware will be registered as a limited liability company (LLC) in the state of California and will comply with all the relevant federal, state, and local laws and regulations. The store will be owned and operated by Alex Hales, who will also serve as the manager and the chief executive officer (CEO) of the company. Alex Hales will own 100% of the company’s shares and will have complete control over the business decisions and operations.

Industry Analysis

The hardware store industry is a segment of the larger home improvement industry. It includes businesses that sell tools, materials, and equipment for home improvement, construction, and maintenance projects.

Here are some interesting market insights for DIY & Hardware Store in the United States:

• The global hardware market size amounts to $121.34 bn in 2023 and is expected to grow to $164.21 bn in 2027. (Source – The Business Research Company )
• The revenue generated in the DIY & Hardware Store market in 2023 amounts to $641.80 bn. (Source – Statista )
• It is projected that the hardware market will experience an annual growth rate of 2.63% from 2023 to 2028. (Source – Statista )

Customer Analysis

Ace Hardware’s target market is the home improvement market in San Diego, California. This market consists of customers who are looking for products and services for home improvement, construction, and maintenance projects. 

According to the US Census Bureau, there were 1,419,845 housing units in San Diego County in 2020, of which 56.4% were owner-occupied and 43.6% were renter-occupied. The median value of owner-occupied housing units was $632,000, and the median monthly rent was $1,647. The median household income was $85,507, and the per capita income was $38,923.

Ace Hardware’s customer segments are:

1. Residential customers

• These are homeowners or renters who are looking for products and services for their own home improvement, construction, and maintenance projects. 
• They have different levels of skills, budgets, and tastes and may seek advice, guidance, and assistance from hardware store staff. 
• They also value convenience, quality, and variety in their purchases. 

Ace Hardware will target residential customers who live or work within a 10-mile radius of the store location and who have a household income of $50,000 or more . Ace Hardware estimates that there are about 500,000 potential residential customers in this segment.

2. Commercial customers

• are contractors, builders, landscapers, decorators, and other professionals who are looking for products and services for their clients’ home improvement, construction, and maintenance projects. 
• They have specific requirements, standards, and deadlines and may seek reliability, efficiency, and flexibility from hardware store staff. 
• They also value price, quality, and availability in their purchases. 

Ace Hardware will target commercial customers who operate within a 20-mile radius of the store location and who have an annual revenue of $100,000 or more . Ace Hardware estimates that there are about 10,000 potential commercial customers in this segment.

Competitive Analysis

ABC Hardware faces competition from other hardware stores in the area, such as:

• Home Depot – Home Depot is the largest home improvement retailer in the US, with over 2,300 stores nationwide, including 20 stores in San Diego County. Home Depot offers a wide range of products and services for home improvement, construction, and maintenance projects. Home Depot’s strengths include its large scale, brand recognition, loyal customer base, and online presence. Home Depot’s weaknesses include its high operating costs, low customer service, and generic product selection.
• Lowe’s – Lowe’s is the second largest home improvement retailer in the US, with over 1,700 stores nationwide, including 15 stores in San Diego County. Lowe’s offers a similar range of products and services as Home Depot but with a focus on home decoration and design. Lowe’s strengths include its brand recognition, loyal customer base, and online presence. Lowe’s weaknesses include its high operating costs, low customer service, and generic product selection.
• Menards – Menards is the third largest home improvement retailer in the US, with over 300 stores in 15 states, including 5 stores in California. Menards offers a similar range of products and services as Home Depot and Lowe’s but with a focus on price and value. Menards’ strengths include its low prices, loyal customer base, and online presence. Menards’ weaknesses include its limited geographic coverage, low customer service, and generic product selection.

ABC Hardware assesses and rates its competitive advantages and disadvantages based on a 1-5 scale rating. ABC Hardware’s competitive advantages and disadvantages are as follows:

Marketing Plan

ABC Hardware’s marketing objectives and goals are to:

• Increase the brand awareness and recognition of ABC Hardware in the local market and online platforms
• Attract and retain at least 1,000 loyal customers by the end of the first year
• Achieve a monthly sales revenue of $100,000 by the end of the first year
• Increase the customer engagement and loyalty by 10% by the end of the first year
• Generate at least 100 referrals and word-of-mouth per month by the end of the first year

ABC Hardware’s marketing mix is based on the following four Ps:

• Product – ABC Hardware offers high-quality tools, materials, and equipment for home improvement, construction, and maintenance projects at affordable prices. ABC Hardware also offers installation, repair, and consultation services to its customers.
• Price – ABC Hardware sets its prices based on the cost-plus pricing strategy, which adds a markup percentage to the cost of the products and services. ABC Hardware’s markup percentage is 30%, which covers its overhead and profit margin.
• Place – ABC Hardware sells its products and services through its physical store and its online store. The physical store is located in a busy and central area with high foot traffic and visibility. The online store is accessible through its website, which is user-friendly, secure, and responsive.
• Promotion – ABC Hardware uses a combination of online and offline channels to promote its brand, products, and services to its target customers.

ABC Hardware’s marketing budget and allocation are based on the following assumptions and estimates:

• ABC Hardware allocates 10% of its monthly sales revenue to its marketing budget
• ABC Hardware spends 60% of its marketing budget on online channels and 40% on offline channels
• ABC Hardware tracks and measures the return on investment (ROI) and cost per acquisition (CPA) of each marketing channel

ABC Hardware’s marketing budget and allocation for the first year are represented in the following chart:

Operations Plan

ABC Hardware’s operations plan covers the following aspects of its business:

• Location – The store location is 123 Main Street, Los Angeles, CA 90001, which is a busy and central area with high foot traffic and visibility. It is close to its target customers, has low rent and utilities costs, and has ample parking space and public transportation access.
• Size – The store has a size of 5,000 square feet, which is enough to accommodate its products, services, staff, and customers. ABC Hardware plans to expand its store size to 10,000 square feet by the end of the third year.
• Layout – The store is divided into four main sections: tools, materials, equipment, and services. ABC Hardware also has a checkout counter, a customer service desk, a storage room, and a restroom.
• Inventory management – ABC Hardware uses a barcode scanner and a point-of-sale (POS) system to record and monitor sales and inventory transactions. ABC Hardware also uses a software program and a database to analyze and forecast inventory levels and trends. Refer to our SaaS Business Plan for a better understanding.
• Procurement – ABC Hardware sources its products and services from reliable and reputable suppliers and vendors. ABC Hardware has established long-term and mutually beneficial relationships with its suppliers and vendors.
• Barcode scanner
• Security camera
• Alarm system
• Fire extinguisher

Organization and Management

Ace Hardware will have a simple and flat organizational structure, where the owner and manager will have direct and close supervision and communication with the staff. The organizational structure will consist of the following positions:

• Owner and Manager – Alex Hales, the owner, manager, and CEO of the store, will oversee all aspects of the business, from planning and budgeting to hiring and reporting. He has a business degree and 10 years of experience in the hardware store industry.
• Sales Staff – 10 sales staff will be hired to assist and serve the customers, as well as sell and provide various services on the sales floor. They will have 2 years of experience and a high school diploma and will work in shifts of 5 under the owner and manager.
• Cashier Staff – 3 cashier staff will be hired who will process and complete the transactions, as well as perform checkout and customer service tasks. They will have 1 year of experience and a high school diploma and will work in shifts of 2 or 3 under the owner and manager.

Financial Plan

Startup costs.

Ace Hardware will require a total of $500,000 to start and operate the business. The startup costs will include the purchase of inventory, equipment, fixtures, signage, and leasehold improvements, as well as the initial marketing, legal, and administrative expenses. The breakdown of the startup costs is as follows:

Operating Costs

Ace Hardware will incur monthly operating costs to run and operate the business. The operating costs will include the rent, utilities, payroll, taxes, insurance, and maintenance expenses. The breakdown of the operating costs is as follows:

Ace Hardware will generate revenue from the sale of products and services, such as paint, plumbing, electrical, gardening, hardware, lumber, cutting, installation, repair, and delivery. Ace Hardware will use the following assumptions to project its revenue:

• Average sale per customer: $50
• Average number of customers per day: 100
• Average number of days per month: 30
• Average revenue per month: $50 x 100 x 30 = $150,000
• Average revenue growth rate per year: 10%

Based on these assumptions, Ace Hardware projects to generate $1.2 million in sales revenue in the first year, $1.8 million in the second year, and $2.4 million in the third year.

Break-Even Analysis

Ace Hardware expects to achieve break-even in the first year of operation, where its total revenue will equal its total costs. Ace Hardware will use the following formula to calculate its break-even point:

Break-Even Point = Fixed Costs / (Revenue per Unit – Variable Cost per Unit)

• Fixed Costs: $32,000 per month, or $384,000 per year.
• Revenue per Unit: $50 per unit.
• Variable Cost per Unit: $25, or 50% of the revenue per unit.

Based on these figures, Ace Hardware’s break-even point will be:

• Break-Even Point = $384,000 / ($50 – $25) = 15,360 units
• Break-Even Point in Sales = 15,360 x $50 = $768,000

This means that Ace Hardware will need to sell 15,360 units or generate $768,000 in sales revenue to cover its costs and break even.

Cash Flow Statement

Income Statement

Balance Sheet

Why Choose OGSCapital for Your Hardware Store Business Plan?

At OGSCapital, we are the leading provider of business plan services for businesses of all sizes. We have a team of senior business experts with 15+ years of experience in 45 industries who can create customized and unique business plans that meet the highest standards of quality, professionalism, and effectiveness. We also offer comprehensive and in-depth market research, fast and reliable results, a proven track record of success, and access to a wide network of contacts. For reference, check our Computer Repair Business Plan .

Contact us today and get a free consultation from one of our business plan experts. We will help you achieve your business goals and become a market leader.

Frequently Asked Questions

Is a hardware shop profitable.

Hardware shop business is profitable in the US, as it sells essential tools and materials for home improvement and construction projects. The profit margin in hardware stores in the US is estimated to be around 15% to 30%, depending on the type and category of products sold. Check our iPhone Repair Business Plan here.

How do I start a hardware business?

To open a hardware store business, you need to conduct market research, write a hardware business plan, choose a suitable location, obtain the necessary licenses and permits, source your products, hire and train your staff, promote your business, and provide quality products and services.

How do I write a business plan for a hardware store?

A small hardware store business plan is a document that describes the details and objectives of your business and how you plan to achieve them. It should include the sections of executive summary, market analysis, products and services, marketing plan, operational plan, financials, and appendix. Refer to our Web Hosting Business Plan to learn more.

What is the business category of a hardware store?

A hardware store is a type of retail store that sells a variety of tools, materials, and supplies for home improvement, construction, gardening, and other activities. Hardware stores are usually classified under the NAICS Code 444130, SIC Code 5251, and Business Activity Code 444000.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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Hardware Retail Franchise Sample Business Plan

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Hardware Retail Franchise Business Plan

Executive summary.

Last year Wilusa Magazine surveyed current downtown residents and found that hardware stores are one of the top ten things needed to make downtown a great place to live. The same reasons that make downtown a great place to live also make it a great place to work.

The demographics of home ownership have changed radically in downtown Indianapolis. Today’s hardware store, which more and more is dominated by the “big box stores”, is cold, uninviting, and usually involves substantial driving time from downtown Wilusa. Hisarlik Hardware is uniquely positioned to take advantage of this new fact of life. Conveniently located to serve the Troas, Sinope Bay, Miletus Square, and Lycia areas, as well as all of Arazawa Township, Hisarlik Hardware offers parts, materials, and advice to tackle any home or do-it-yourself (d-i-y) project, whether the customer is a complete novice or a contractor. The focus is on helping the customer identify what they want and need as soon as they enter the store.

Through the use of superior personal customer attention, great product selection, and reasonable prices, Hisarlik Hardware will capitalize on this promising opportunity. A location is being secured that offers excellent traffic with a built-in magnet for urban dwellers–downtown’s only grocery store sharing the parking lot. The Building Blocks parent organization will help efficiently lay out and plan the store to increase sales and give the customers the utmost in attention. Hisarlik’s management team has a wealth of business, financial, and mechanical experience that will ensure a great investment and the overall success of the venture. The projected growth rate for Hisarlik Hardware is quite steady and has the potential to grow exponentially along with the increase in residential development downtown.

Hisarlik Hardware will produce positive cash flow its first year of operations. Hisarlik will also produce a net profit in its first year of operations.

1.1 Objectives

There are four major objectives of this business plan, of which three are immediate and the fourth is of a longer-term nature.

• Determine the feasibility of a downtown hardware store.
• Develop the strategy to open, manage and grow a profitable downtown hardware store venture.
• Establish a firm budget to operate and manage the business from concept to start up to operation, with good cash flow and consistent profits.
• Explore potential growth in downtown market and evolve new sources of business.

1.2 Mission

Hisarlik Hardware’s mission is to create a downtown hardware store that is reliable and convenient. A store that offers great service and selection of hardware and home improvement products in a customer friendly environment.

Hisarlik Hardware will cater to downtown residents, downtown property managers, downtown businesses, contractors, and suburban commuters. Our customers will become loyal because of the great advice, prompt service, good staff attitudes, the overall quality of the shopping experience, and the fact that we consistently have solutions for their needs.

1.3 Feasibility of the Business

Hector Priamson and Troy Enterprises went through a long and thorough process of looking at different business ventures that would allow them to go into business and be a long-term success. Through this process retail hardware became a potential opportunity. The following items are considered “must have” items in order to make Hector Priamson and Troy Enterprises not only feasible, but a tremendous success.

An industry that is healthy, resistant to economic swings, and allows an entrepreneur to influence the stores results. A market that can deliver the kind of potential that will allow a store to be profitable. A store location that will be easy for customers to find, allow easy access, plenty of parking and have economic terms that allow the store to be successful. A successful and cooperative “partner”, such as Building Blocks, a national hardware co-operative, that will help research, plan, market, and operate a hardware store. A financial package that would allow the business to begin operations and operate in terms that would be realistic and successful for all involved whether it was private investors or the bank. Participants must possess the business skills, a strong work ethic, and a level of competitiveness required to make the business a success.

Building Blocks provides all of the tools and Hector Priamson possesses the financial, entrepreneurial, mechanical, and management skills needed to be successful in this business.

1.4 Keys to Success

• Hardware Industry: The Home Improvement industry has been consistently growing at a rate of 7% per year for the past decade according to the US Department of Commerce, with total US Sales of over $313 billion in 2002. While the economy has fluctuated up and down over the past decade, the growth of the hardware industry has continued to grow at the same pace. The “Big Box” stores have also created a “Do-it-yourself” mentality in this country, a mentality that has a positive effect on the independent hardware store.
• Location: The proposed location for Hisarlik Hardware is Troas Marketplace, a retail and commercial property on the corner of E. Anglia St. between N. Umberland St. and N. Mercia Blvd. Troas Marketplace primary tenants are Scamander’s Food Market located across the parking lot and Buckbasket Cleaners adjacent to the proposed site. Scamander’s is a huge draw. Scamander’s is the only grocery store in downtown Wilusa. The location of this store is known to all downtown residents, one block from the trendy and hip Wessex Avenue. The Troas Marketplace offers plenty of parking, very important for a downtown location, as well as easy access to the parking lot from E. Anglia St. or N. Mercia St. E. Anglia St. is a major eastbound thoroughfare east of downtown.
• Urban Products: The location in downtown Wilusa will require a different product mix than a suburban store. There will be a unique product demand from urban dwellers. Building Blocks will be a big part of determining the mix of products that will be right for the urban market through their IAIS program (Inventory Always In Stock). Hisarlik Hardware will be in touch with, and focus on, the downtown urban market, delivering products that are applicable to local customers, and marketing these items at competitive prices.
• Commercial Customers: Hisarlik Hardware will also focus on becoming the hardware products source for every building and business in downtown Wilusa. We will work hard to establish relationships with property managers and service personnel. There are also plans to set up a delivery service to the downtown business market making it even easier for customers to get the products they need, when they need them. While Hisarlik Hardware may be convenient and easy to access, potential customers may not find it to be convenient to leave their offices. There will be an emphasis to establish business accounts for each of these customers to make doing business easy for them.
• Building Blocks : It is crucial to have a co-op like Building Blocks behind efforts to open a store like Hisarlik Hardware. They provide all of the tools to be successful in the hardware business including research, floor plans, marketing, and systems and instructions for operating a hardware store. To become a Building Blocks Member (Member of the Building Blocks Co-op) really means they will provide an entrepreneur a “business in box”, yet allow the members to control their own business. There are extensive marketing programs that have been built based on input from members to help generate sales, increase traffic and ultimately increase profits.
• Service and Convenience: Service and Convenience are the keys to success in this business. They are also the strengths of independent hardware stores. The store needs to be easy to get to and easy to use when the customer walks inside. Our personnel have experience in high-end client hospitality. This experience will be invaluable in dealing with customers and clients. We will also keep meticulous records on what customers are looking for that we do not currently have in stock. As discussed earlier, a delivery program will be developed to make it easy for business customers to receive products without leaving the office. We will also market to the suburban commuter who works downtown and can take advantage of the convenience of stopping on their way to or from work. Happy hour specials to encourage shopping after the five o’clock whistle will be instituted.
• Repair/Project Resource Area: Hisarlik Hardware will leverage the strength of an established reputation for superb service built by other Building Blocks Co-op member stores. It is a reputation that has positioned Building Blocks to be the leading independent hardware stores (from Consumer Checkbook, Aug 2003), and filling the gaps in the “Big Box” retailers one-size-fits-all offerings. The Resource area will allow the customer to ask for help or directions as they enter the store. This area will also offer assistance as they start a project, help in finding what they need, sharing know-how in completing a project, and advice on how to get a project done. Store employees will be knowledgeable in home repairs/projects, home improvement, and mechanical repair and retro-fit. In addition, the resource area will be used to conduct short training sessions and demonstrations in home repair and home improvement projects.
• The Tool Room Rental: A rental business will be established under the Building Blocks’ “The Tool Room Rentals” tool rental program. This will not only help with the initial cash flow, but will also be a source of additional sales as every tool will need accessories to go with the rental. We will also think about party rental items to be included in the rental inventory. Building Blocks will aid in developing the right rental product mix for this urban market.

All of these keys will be combined to drive sales and ultimately the bottom line…net profit.

Company Summary

In the company summary section, we will review the Troy Enterprises business and corporate entity and ownership, the role of Building Blocks in the business, the proposed location, and the start-up costs and funding.

2.1 Start-up Summary

Hisarlik Hardware has worked very closely with Building Blocks Hardware to establish a detailed start-up cost list. Building Blocks’ knowledge, track record and expertise have been invaluable in setting up this venture.

2.1.1 Start-up Expenses

The start-up costs of Hisarlik Hardware, as detailed below, will consist primarily of inventory, equipment and fixtures. Hector Priamson will invest cash, benefits and labor to the start up. Investors will contribute substantially. The company will secure an SBA 7(a) loan to be paid back on a 7-year amortization.

There is an amount budgeted for leasehold improvements which is intended to make minor modifications to the proposed site to prepare it for opening. These improvements include replacing missing ceiling tiles and cleaning, polishing, or redoing the floor tile. It is anticipated that the new floor tile can be laid over the existing tile at a substantial savings with no loss in quality or durability.

2.2 Building Blocks’ Role

With the merger of Kadmus, Homer & Company and Delphi/Ouroboros, Building Blocks is a cooperative comprised of members who are entrepreneur-retailers. Building Blocks is committed to empowering the independent retailer by setting industry and market standards with their niche businesses and unique brand of creative marketing, wide product assortment, award winning merchandising and technology, and quality training and business expertise. Building Blocks’ buying power of more than $2.5 billion annually helps pass on benefits to independent members.

Building Blocks has been a world leader in the hardware industry in product selection and customer service for do-it-yourselfers since 1948.

Vision To be the best-in-class provider of products and solution choices that drive our members’ and our co-op’s profitability.

Mission To provide:

• Choices of retail and commercial solutions to drive members’ sales and profits
• Assortments to support the solutions
• Operational excellence in the delivery of products and solutions

2.2.1 Market Reseach

Building Blocks has a wealth of experience and know-how on opening new hardware stores, with 6,567 stores worldwide. Building Blocks has become a leader in determining what factors make a hardware retailer successful.

Building Blocks currently uses a service called Yorikle. This service is used to define the demographics and the expenditure potential of new markets. For Hisarlik Hardware, the report was run on a one-, two-, and three-mile radius around the proposed location. The report showed an exceptional amount of business (only reporting households, the study does not include property managers, businesses, or commuters), especially considering that there is no direct competition in the area. The reports also get very specific as far as what the potential market is for hardware overall as well as specific categories within a store. There are also numbers reports for the expected growth in the area over the next five years.

2.2.2 Planning

Building Blocks supplies professional design services to maximize merchandisable space and traffic flow. Services include fixture plans, interior signage and decor, merchandising plans, lighting, basic site plans, and exterior storefront elevations. These plans are custom developed for each location and each store’s footprint. The associated costs are included in the start-up costs.

A unique plan will be done for the proposed site for Hisarlik Hardware. This process will begin as soon as the lease for the property is signed.

2.2.3 Support

Building Blocks provides a variety of support to all current members as well as prospects seeking to join the co-op. The support comes to members in the form of retail consultants, knowledge, profit building programs, retail automation, training, advertising & promotion, a national brand, buying power, semi-annual markets, and an operations and distribution network.

Retail Consultant Every member and prospect is assigned a retail consultant who works with them on an ongoing basis. There is also a retail operations specialist who helps prospects open new stores. There are regional marketing staff that are available as well as individual Building Blocks staff for individual marketing programs.

Knowledge All specialists share their wealth of personal knowledge as well as having access to Building Blocks’ cumulative knowledge and experience. Building Blocks has made this model work since 1948. It works very well and enables members to be very successful business people and has made Building Blocks the largest retail hardware co-operative in North America.

Proven Profit Building Building Blocks makes available a large number of programs that entrepreneurs can choose to participate in. They include retail pricing systems, electronic order entry systems, commercial and industrial sales, category specific planograms, and direct mail circulars, just to name a few.

2.2.4 Retail Automation

Building Blocks leads the industry in automating their stores. Building Blocks has brought their stores into the future with the automation which is made available to members. This is a strength of Building Blocks and a service that is available to all of their members. This automation helps the members in many different ways including inventory control, ordering, sales, and accounts receivable, all tied together in one system called Delian.

Experienced technical support personnel work with members to ensure current retail automation capabilities are compatible with Building Blocks’ existing system. Building Blocks’ existing system is Delian, an industry leading software program based on Triad Eagle for Windows platform. Delian is an easy-to-use, easy-to-learn tool that contains up-to-the-minute ordering and inventory accuracy, point of sale, accounts receivable, and much more. It contains all the daily business tools needed to manage Hisarlik Hardware.

• Inventory: Building Blocks’ industry leading retail merchandise approach is designed to organize a store’s departments, maximize space by removing non-selling inventory, ultimately freeing up valuable floor space. This unique concept accommodates the needs of customers by featuring the right merchandise assortment proven to increase overall profits. Category specific guidelines and planograms maximize retail sales and inventory turns. IAIS is based on the best selling items from the most successful Building Blocks stores.
• Ordering: Building Blocks has made ordering easy. The Delian program helps track the needs and generates the necessary inventory levels. Orders can be placed through the Building Blocks electronic order Entry System.
• Pricing: Building Blocks’ Retail Pricing System enhances the ability of each store to maintain a competitive price image while maximizing profitability. Building Blocks’ Retail Consultant will help establish retail pricing which results in increased sales opportunities and profit margins based on downtown Wilusa.

2.2.5 Training

Building Blocks has educational programs which they call Building Blocks University. Programs have been growing year after year and last year they offered certificate programs for new members. There are four required courses and four Building Blocks University workshops and seminars. There is also required course work for any member that is opening a The Tool Room Rentals as part of their program.

There are five core programs for new store owners which make up the initial training. They are:

• Certificate of Business Management
• Certificate of Marketing Management
• Certificate of Ownership Management
• Certificate of Retail and Sales Management
• Certificate of Human Resource Management

When a member opens a The Tool Room Rentals business there is also required training that applies only to The Tool Room Rentals. There is also a wide range of do-it-yourself programs that are on CD-ROM and video.

2.2.6 Advertising and Promotion

Building Blocks’ marketing programs are second to none in the industry. They include every tool needed to be successful in the retail hardware business. They include Power Events, interior and exterior signage, online programs, and custom circulars.

Every member store is assigned a field marketing manager. The marketing manager makes the members aware of the marketing tools available and how best to use them.

There are marketing strategy programs, programs that increase traffic, increase transactions, and those that merely build the brand. All are made available, and it is the savvy member who uses the right programs and spend their advertising dollars best. Based on the marketing experience Hisarlik Hardware has, this is a strength most start-up businesses do not possess.

• Marketing Strategies: The field marketing managers work with each member to determine the needs and issues for each store. They look at the market penetration and awareness in the market. As this information is gathered, a list of strengths and weaknesses is developed and programs designed to work on each of the objectives. A very basic local store marketing tool kit is given to each member. This is designed to show members what has been successful and basic marketing information that can be used on the local level. There are also national programs that support what is done on a local level. They include national television, radio, and newspaper.
• Increasing Traffic: Building Blocks has also developed programs designed to drive traffic to the stores. They include bargain of the month, circulars, Yellow Page programs, and local television, radio and newspaper. Circulars play a huge role in local advertising. There are three ways to get the circulars in the hands of the consumer, newspaper insertion, ADVO circular distribution and direct mail. Each of these programs have different costs associated with them and different penetration in the market. Circulars can be designed for an individual store. They are all customizable and can be generated in any volume necessary. Building Blocks also plans four Power Events throughout the year which are nationally advertised programs supported by television, radio and print. In 2003, Building Blocks saw a significant increase in traffic and bottom line during each of the Power Events.
• Increasing Transactions: Programs have been developed to increase the amount of each transactions. There are display shelving end caps, wing panels, and clip strips that help increase sales on these specially priced items. There are also online sign making programs that help members produce professional signs and save money on creative and printing jobs. Muzak is a program of in-store audio and messaging which customers cannot ignore, and that drives them to specials and promotions they may not have been aware of.
• Brand Building: The brand building programs are designed to reinforce the established Building Blocks name, both on the interior and exterior of the store. Programs have also been designed for vehicle graphics.

2.2.7 National Brand

For over 40 years, the name Building Blocks has stood for trust, service and fair prices. Building Blocks’ brand positioning statement is “Building Blocks is the best place to get just what you need to complete home repair and maintenance projects quickly and easily.” It is a name with heritage and integrity. Consistent national media and the fact that Building Blocks is the largest co-op of independent hardware store owners, has established Building Blocks as a recognizable name in retail hardware.

The bottom line is people know that the Building Blocks name means hardware. That is an asset new businesses work for years to establish.

2.2.8 Buying Power

An independent hardware store cannot compete in the current market, without a co-op behind them. A Building Blocks member has the benefit of $2.5 billion in buying power which is passed on in savings and profits. That makes Building Blocks the largest co-op of its kind in North America.

This is the main factor in making sure all Building Blocks members are getting products at the best possible prices to enable them to maximize profits.

2.2.9 Semi-Annual Markets

Building Blocks holds semi-annual markets where members can buy products and plan purchases for the upcoming seasons. Markets are held in March (Fall/Winter) and October (Spring/Summer). Members are informed of new items and trends in the industry at these markets enabling them to make good purchasing decisions. There are also programs which allow members to make purchasing commitments at large cash savings.

2.2.10 Operations and Distribution Network

Building Blocks has established a network of strategically placed distribution centers throughout the United States to assure timely deliveries regardless of where the store is located. Trucks deliver at least once per week and twice if necessary. This is a huge benefit, because this process allows excess inventory to sit in the distribution center as opposed to the store shelves. Over 64,000 items can be purchased on a per piece basis enabling stores to get whatever quantity is needed at any time.

2.3 Company Ownership

Troy Enterprises, Inc. is a privately-held S corporation, currently 100% owned by its founder and president, Hector Priamson and his wife Andromache Eetion. The company will be operating under the name of Hisarlik Hardware. There are expected to be investors in the new venture. Individual investors will own no more than 15% of Troy Enterprises, Inc. These investors will provide investment in the way of seed cash to help start the business and none of the investors will be active participants in any management decisions.

In order to make Troy Enterprises, Inc. financially viable, there are three major factors necessary to get the business up and running. First, a feasible concept. We have found that with Building Blocks in the downtown Wilusa market. Second, the business needs someone to manage it. It needed a professional with a good deal of experience to operate and manage the business. This manager needs a sound financial background as well as an entrepreneurial spirit. Third, the business needs financial support. This support will come from three different sources. Hector Priamson will invest time and some capital to start the business. There is a need for investors to help with the initial capital to allow the business to have enough equity to get off the ground. The final piece of financial support is the faith and commitment of a financial institution to loan the remaining funds that are needed to operate the business.

2.3.1 Hector Priamson

Troy Enterprises, Inc. founder and president is Hector Priamson. Hector is a resident of Ilion. He is married to Andromache Eetion who is currently a realtor with Ahhiyawa, Hatti & Company.

Hector will spend 100% of his time on this new start-up venture. Hector has a wealth of experience in business. He started his career straight out of college with a very exclusive “Big Eight” Accounting firm. While with Manapa Tarhunda and Co. Hector earned his CPA license. His interests led him to Wilusa, where he became involved in one of the city’s unique industries, Samothracing. He started on the accounting side of the racing business and soon broke out into the part of the business that generates the revenue, sponsorship sales.

His career led him to Trireme Racing Group where he served as the Vice President of Business Operations. He led the turn-around of this team and company solidifying major sponsorships with companies like Corinthian Leather, Medusa-Gorgon Oars, and Posidon Libations. He served in that position from 1996 through 2001. During that period of time, Hector also served on the CURRAGH Franchise Board (rules making board of the sanctioning body). His reputation and success led him to the top marketing position, Vice President of Sales and Marketing. Hector served in that capacity from December of 2001 through July of 2003, at which time he left the company to pursue his current business, Troy Enterprises, Inc.

Hector’s expertise in the entrepreneurial business of oarsports will be invaluable in his new venture. He has a keen sense of finance, marketing, management of inventory, accounting and bookkeeping practices, and staff management. This experience will be invaluable in leading Troy Enterprises and making sound business decisions in the future.

Hector’s resume, as Confidential and Proprietary information, has been omitted from this sample business plan.

2.4 Company Locations and Facilities

When Hisarlik Hardware began this project the key component was the location. Hector Priamson/Troy Enterprises and Building Blocks felt several criteria were crucial to making this venture a success. The ideal size was determined to be between 7,500 and 10,000 sq.ft. The price per square foot was important because the economics obviously had to work. Adequate parking and easy access were must-have criteria while searching for locations. A location with only street parking was not considered an alternative. Being located on a major thoroughfare with visibility is important to get the store recognized as a solution for hardware. Adequate signage that traffic can recognize is key. Additionally, intangibles such as other commercial neighbors and the neighborhood makeup were considered.

Based on these criteria, a site at 310 East Anglia Street is was selected. It is part of the Troas Marketplace.

This property shares a parking lot with Scamander’s Food Market and Buckbasket Cleaners which is the most important of the intangible factors. This Scamander’s generates $12.0 million in revenue and is Scamander’s most successful store in Wilusa. Scamander’s is the only grocery store in the downtown area, and is an icon in the downtown residential community. In discussions with Scamander’s, they said the Troas store has much more traffic than their other locations. They have found the average customer visits the Troas store every two days versus once a week for the others. Hisarlik feels this is a huge advantage for its venture as this will drive more traffic, more often to the Troas parking lot. Scamander’s is in the middle of its lease for this property and seems pleased with the results. Hisarlik does not anticipate this advantage changing by a move by Scamander’s, whose lease extends through the year five.

The proposed site has plenty of parking spots and excellent access from eastbound Anglia Street and northbound Mercia Blvd.

Signage marquees sit on both streets as well as on the north, west, and south sides of 310 East Anglia Street. Furthermore, the location is perfectly set on eastbound Anglia Street, which is one of the major thoroughfares. There is a driveway entrance and exit to Anglia Street.

The proposed site is ideal in size measuring 9,509 sq. ft. and was formerly an Osco Drug store that was closed as Osco downsized their Wilusa operations. According to the landlord, the closing of this location by Osco had nothing to do with the location, but rather, a change in priority within the company. The property needs very little in tenant improvements in order to be open for business. The terms of the lease are currently being negotiated. It is anticipated that Hisarlik Hardware will retain the property within the budgeted guidelines. There were many properties that were investigated; however, for the stated reasons this is the best option as of last November.

The neighborhood has gone through major renovation over the past 10 years. It is now a rejuvenated upscale neighborhood. There is also major new development around the proposed site. There is a brand new condominium development directly across East Anglia Street. The development is called Lemnos Square.

There are three other new condominium developments under construction that are one block away. They are Troas Terrace, The Anatolia, and The Konya.

The proposed location is one block from the successful Wessex Avenue District. Wilusa has done a fantastic job in bringing in new business and culture into this area of downtown.

According to Wilusa Downtown Inc., Downtown has seen record demand and occupancy levels, driving the surge of residential development. This has led to more than 615 new residential units currently in the pipeline.

The city of Wilusa is also reviewing plans for the former Cressida Agora site. The plans all include a large number of residential and retail sites on the 29 acre site. This site is located 2 blocks south of the proposed location.

Development downtown is happening in many different ways. There is commercial, residential, as well as government development currently in process or planned. All of these things add to the desirable nature of the proposed site. We would be “right in the middle of it.”

Products and Services

Hisarlik Hardware will offer traditional retail hardware. These products include electrical supplies, automotive, hardware, housewares, lawn and garden, building supplies, paint, plumbing, tools and rental. There are other small services that will be offered including key cutting, glass cutting, and other small repairs.

Hisarlik will work with Building Blocks to develop the right product mix. The initial order of inventory will take into account the fact that this is an urban store and the product mix may contain different items than a suburban store. Hisarlik Hardware will rely on Building Blocks’ expertise, knowledge, and their IAIS inventory management program in developing this initial order.

3.1 Product and Service Description

Hisarlik Hardware will stock traditional retail hardware items. The product mix will be changed slightly from suburban stores. The history of the store will then be used along with IAIS to develop the right product mix that takes advantage of the available square footage and maximizes profits.

Hisarlik Hardware will open a The Tool Room Rentals store within the hardware store. This is a program that will help cash flow as well as increase sales of rental accessories and support items.

Hisarlik will also have key cutting, glass cutting, and other small services like screen repairs.

IAIS stands for Inventory Always In Stock. This is a program that was developed by Building Blocks based on feedback from their members. The members were looking for assistance in managing their departments and knowing what is selling and what is not.

This program has the following benefits to members who take part in it:

• ORGANIZE departments with a more consistent merchandise assortment
• REMOVE non-selling inventory
• FREE UP valuable floor space
• INCREASE a store’s overall profits.

Building Blocks delivers to member stores IAIS merchandising guides, assortment guides, and recommends what inventory to carry and what not to carry.

This is an invaluable tool for a new member because the new store can rely on the history of current stores to help in their merchandising.

3.1.2 Retail Pricing System

Hisarlik Hardware will once again rely on Building Blocks to deliver the correct pricing for the market. As discussed earlier, low cost is not one of the main factors for customers to shop at a convenient hardware store location. Hisarlik will continue to work with Building Blocks to charge the right price to maximize profits.

3.2 Future Products and Services

Hisarlik Hardware will listen to its customers to understand what other needs are not being met. Those needs could include additional store locations in the future and an expansion of products and services offered at the current location. There may be other businesses that can be offshoots of retail hardware that help service or provide convenience to Hisarlik customers.

Market Analysis Summary

The Market Analysis looks at potential customers and potential business. Hisarlik Hardware explored the market segments, their needs, and did a marketing analysis.

The need for this venture was looked at first. Does downtown need a hardware store? The answer was a resounding yes.

Once the need was established, Hisarlik needed to analyze the make up of its customers, who and how many. Who is the potential customer? How many potential customers are there?

Once it was determined that there was a need and who the customer is, the next step was to figure out how to make them Hisarlik Hardware customers. How to get the potential customer in the store?

4.1 Market Segmentation

There are six major market segments:

• Downtown Residents: Downtown Residents will make up as much as 40% of the potential business of the store. This is an ever growing and expanding group. Downtown Resident levels are at an all-time high. There are also major projects like the former Cressida Agora site and the Troilus Townhomes in downtown Wilusa that will increase the numbers of residents. Wilusa Downtown, Inc. estimates there are currently 615 new residential units currently in the pipeline. In addition, 91 renovation permits were issued last year on existing downtown residential structures.
• Property Managers: Every residential building and every commercial building downtown has a property manager that keep the properties in good repair. These property managers all need supplies and materials that are conveniently available. These managers will be able to rely on Hisarlik Hardware to stock what they need. Hisarlik feels the store will prove to be a quick, easy, and convenient way to fulfill the needs of these property managers. Hisarlik and Building Blocks both feel paint and paint supplies will be a big percentage of what these property managers will buy. The City of Wilusa estimated there was $18.0 million in paint and wallpaper Retail Sales in 2002 (within a three mile radius of the proposed location).
• Contractors: As stated earlier, there were 91 renovation permits and 615 new residential units under construction in the last year. The new residential units represented $261 million investment in downtown. Hisarlik Hardware will work to become a reliable supplier to these contractors working in the area. We will also open early in the morning to help supply and be a convenient source for the contractors who start work early each day.
• Downtown Business: Every downtown business will need supplies from time to time. The City of Wilusa states there are 2,861 businesses located within one mile of the proposed location. As of the time of opening the focus will be to sell this group traditional retail hardware supplies. As the business is established, Hisarlik will work to develop the Commercial Supply Network for these businesses.
• Suburban Commuters: Since the proposed location is on a major Eastbound thoroughfare (E. Anglia Street) out of the downtown, the potential is encouraging for Suburban Commuters to stop on their lunch hour or on their way home from work. Research tells us that these commuters will be in search of good service and convenient shopping, things they may not find in their suburban neighborhoods.
• Commercial Sales: This could be the largest growth area of business that Hisarlik Hardware will have. As Hisarlik develops a positive reputation, there will be a push to activate the MRO (Building Blocks’ commercial and industrial supply network). Once again with so many businesses located downtown there is an infinite amount of business. There are also a large number of Federal, State and Local government entities located downtown. These is also one major university and several major hospitals within two miles of the proposed location.

4.2 Target Market Segment Strategy

Each market segment is unique and requires different marketing to attract them.

• Downtown Residents: The proposed location really takes care of this segment by itself. Because the proposed location shares the parking lot with Scamander’s (the only grocery store downtown) it will act as a magnet to bring people to Hisarlik Hardware. Scamander’s estimates customers visit their store every 2-3 days, which is fantastic for traffic. Based on discussions with Scamander’s they are willing to work with Hisarlik to develop co-op programs to work together to build both businesses. There will also be direct mail programs and circulars to downtown residents to convert old habits as the business is started. There will also be a Building Blocks loyalty program implemented called Building Blocks Rewards. This program not only gives valuable research data, but also helps the store learn buying habits of the regular customers.
• Property Managers: It is expected that this group also has a significant need for downtown hardware and will find the store by word of mouth. Hisarlik will not rely on that. There will be a sales program to set up accounts with property managers and let them know about great service that is available. A list will be developed to pursue and court in order to build this business. Keeping in mind this group is in search of convenience and ease of shopping, having a delivery option will also be important to this group.
• Contractors: Hisarlik Hardware will have to go out and pursue this group. Hisarlik will have to visit job sites and let contractors know that Hisarlik is an option and the most viable option available. Delivery and hours of operation will be very important to this group.
• Downtown Businesses: There will be a direct mail program set up to make these businesses aware of the store and that it is an option for their hardware needs. The key to this group is awareness. They will also be looking for an easy and convenient way to get hardware items.
• Suburban Commuters: The direct mail program to offer hardware convenience to businesses will also create awareness with the suburban commuters. However, it is thought that the biggest attraction will be the outdoor signage. There will be signs on E. Anglia St. and Mercia Blvd. Both streets are high traffic areas and should create a good deal of awareness. Awnings are also thought to be an option on the Anglia St. side of the building. The color will not only be a change to what traffic is used to seeing but also exposure for the business.
• Commercial Sales: This segment is going to come down to hard work. It will require a dedicated sales person calling on potential customers and developing relationships with Commercial customers to turn this segment into a strong revenue stream.

4.2.1 Market Needs

Downtown residents have already expressed the need for a local hardware store, as is documented in the April 2003 issue of Wilusa Magazine. Residents recognize the need and will be supportive of a retailer answering their concerns. The data that has been supplied to Hisarlik Hardware (by Yorikle, a market research firm used by Building Blocks ) shows there is a population of nearly 53,000 people and more than 20,000 households within two miles of the proposed location. The analysis provided by Yorikle states the area could support a 19,000 sq. ft. store. We are proposing a 9,500 sq. ft. store. In other words, there is enough business in this area to support a store twice the proposed size. The report has also found there is more than $2.5 million of potential sales revenue, based on the number of households alone (not including any of the other segments). The potential is expected to grow to more than $3.0 million by 2007.

Hisarlik Hardware believes the key to the need analysis is that all of the research and potential was measured by households, and households only. The households only make up one segment of the potential business the store expects to generate.

4.2.2 Market Trends

When Hector Priamson initially looked at the hardware business, one of the most important factors was the fact this industry seems to be immune to significant fluctuations in the economy. Based on information from the US Department of Commerce, the home improvement retailing industry has consistently grown at a rate of 7% for the past decade and similar growth is expected for the foreseeable future.

In the 1990’s the growth in the industry was attributable to strong home sales, economic prosperity, and significant amounts of home renovation. Since 2000, growth has stayed at the same levels even though some of these factors have changed. Growth since the year 2000 was attributable to low interest rates and refinancing. According to the Federal Reserve Board, 35% of all refinancing goes to home improvement.

What does the future hold? 93% of all Americans plan to stay in their current homes and 78% of homeowners plan to undertake home improvement projects in the next year. How much will they spend? 69% of homeowners plan to spend as much or more in the coming year than they did last year. Home improvement budgets have grown 31% since the year 2000.

4.3 Service Business Analysis

Hisarlik Hardware is being encouraged by Building Blocks to enter the equipment and party rental business upon opening the store. Based on conversations with other members, the rental component has been an overwhelming success adding to cash flow of the business as well as increasing traffic to the store. Reports of success unanimously talk about the fact that “renters” need tools and accessories to go with the rental equipment adding to the overall profitability of the store.

In the downtown market, the make-up of the rental inventory will vary a bit from what a suburban store might have. Hisarlik Hardware will work with the Building Blocks Rental people to determine the inventory. Hisarlik will rely on the knowledge and expertise of Building Blocks.

An investmentm is required upon opening for the initial purchase of the equipment to rent. Building Blocks has the necessary training and computer support to make this a very logical addition to the traditional hardware store.

4.3.1 Competition and Buying Patterns

The “Big Boxes”, such as Lowe’s, Menard’s, and Home Depot have had a significant effect on the Home Improvement industry. According to the National Retail Hardware Association, based in Wilusa, the Big Boxes have expanded the market, increasing consumer participation in home improvement. However, the National Retail Hardware Association feels that the Big Boxes are nearing a saturation point, and in the future, they cannot open many more stores without it affecting and threatening other current Big Box locations.

“This competition has not kept independent hardware stores, home centers, and lumberyards from prospering. These stores are much more professionally operated than they were just a decade ago, and most posted strong profits last year.” —NRHA, 2004 Market Measure

Independent Hardware stores need to focus on their strengths.

Service. 88% of consumers have a favorable opinion of small business vs. 61% for big business (the lowest since 1993).

Convenience. Consumers want to get everything they need in one trip to the store. The Independent hardware stores are able to do this, because they work with their customers.

“There are four ways to compete

Assortment & Variety Service & Experience Convenience Price

But price is only one of them.” —M. Chandler, a retail industry consultant

4.3.2 Main Competitors

Hardware There is no immediate local competition. The nearest hardware store is 1.8 miles away on South Hasan Dag Avenue. The store is a small, 4,000 sq. ft., and isn’t current in its products or presentation.

Because of the lack of product and poor shopping presentation, residents do not consider this an option for hardware. The next closest hardware store is 2.7 miles away. There are several stores that are 3 to 4 miles from the proposed site. Studies say customers do not want to travel more than 3-7 minutes to a location. While these stores could serve the need, their location does not make them a viable option to downtown residents because of distance and neighborhoods.

The “Big Box” stores such as Lowe’s, Home Depot, and Menard’s are built to serve suburban Wilusa. The closest Lowe’s is 12.5 miles and 17 minutes west of Hisarlik Hardware’s proposed location. The nearest Home Depot is 10.5 miles or 16 minutes west of Hisarlik. Menard’s is 9.3 miles and 14 minutes east of the location. There are no stores that are convenient to the downtown market. To get to any of these, customers must plan on spending 30-40 minutes of driving roundtrip at a minimum before even walking into the store. Hisarlik Hardware will be a 2-3 mile drive or 5-10 minutes maximum travel to the store. This convenience will be a major selling point for the business.

From discussions between Hisarlik Hardware and the parent company of Building Blocks, regarding the possibility of a “Big Box” store opening in the downtown area, it seems unlikely due to the size of the potential market, cost, and lack of real estate, to build such a structure in Arazawa Township.

Rentals An analysis of competitors in the equipment and party rental field is similar to that of the hardware industry. There is one competitor that is southeast of downtown, 1.5 miles from the proposed location. The company, Best Rentals, Inc., handles equipment and party rentals.

Tent rental has one competitor that is downtown. An factor in tent rental may be the clean new equipment and, once again, great service available from Hisarlik. American Tent and Awning is located 1.8 miles from the proposed location. One advantage for Hisarlik in tent/party rental is that a customer can cover more bases with the variety of equipment and supplies from a rental and hardware store versus a company that focuses solely on tent rental.

The closest tool rental company is 2.3 miles from the proposed location. Hisarlik Hardware feels that significant progress can be made into the tool rental business because of convenience. Hisarlik expects to be a fantastic solution for contractors working downtown who need equipment for the day or for the project. Residents downtown have smaller homes and condominiums, consequently they do not have room to own bulky or large quantities of equipment. This is expected to be a benefit for the rental business.

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Hardware Store Business Plan Template

•   Hardware Store Business Plan Template (Microsoft Word)  –  $47.00
•   +Add Excel Worksheet (Recommended)  –  $35.00
•   +Add PowerPoint Template and 4 Funding eBooks  –  $65.00
•   +Add Business Startup, Finance, Marketing Documents 781 Templates  –  $185.00
•   +Add Operational, Employee and Policy and Procedure Templates  –  $35.00

How to get funding for your Hardware Store business!

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A Hardware Store business is a great business for those interested in entrepreneurship.

A Hardware Store presents an opportunity to serve as a vital resource for individuals and businesses seeking tools, materials, and supplies for various projects and repairs.DIY culture continues to thrive, with many people preferring to tackle home improvement tasks themselves. By establishing such a business, entrepreneurs can provide a convenient and comprehensive selection of hardware products, enabling customers to find everything they need under one roof. Operating a Hardware Store allows for the cultivation of expertise and personalized service, as staff members can offer valuable advice and guidance on product selection, usage, and maintenance. A Hardware Store serves as a cornerstone of the community, fostering connections and relationships among customers and supporting local initiatives and projects. By stocking quality products and maintaining a commitment to reliability and customer satisfaction, a Hardware Store can become a trusted partner for individuals and businesses alike, ensuring their success in completing their projects effectively and efficiently.

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As part of this package, you will receive our Hardware Store business plan template, which contains the following sections:

• Executive summary
• The enterprise
• The business concept and need
• Industry/market overview.
• Growth strategy and implementation summary
• Management plan
• Risk factor
• Use of proceeds

Click here to view sample pages of this exact plan.

Depending on which version of the business plan options you purchase (more on that in a moment), you’ll receive the following:

36 page Hardware Store business plan template with references.

• This Hardware Store business plan template will be delivered via digital download in fully editable Microsoft Word and includes a Hardware Store business pre-written example text, general industry research, references, and narrative already completed for you.
• Red instructional text above each section is included to let you know what to insert in that section. In some areas, you can just add your information, in others you will need to use the example text as a basis to write your own business specifics such as what sets you apart, your local market, your business team, etc.

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Hardware Store Financial Template in M icrosoft Excel (recommended )

This Excel template will allow you to enter financial data specific to your business and will produce proforma financial statements for use in your business plan. The worksheets (Set-up, Start-up, Sales, Headcount, Inventory, Operating Expenses, Capital Budget, Equity & Debt, and Amortization Schedule) contain instructions, questions for you to answer, and boxes (cells) for data entry. Cells in which you are to answer questions or enter data are yellow. Purple cells contain formulas that will be calculated automatically.

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Business Funding Package with PowerPoint and 4 eBooks

(A must-have if actively seeking investment). Includes a business Microsoft PowerPoint slideshow template “Pitch Deck” to show lenders and investors your concept at a glance. It includes 12 slides with instructional text for you to insert your specific business images and information into.

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Business Startup, Finance and Marketing Templates to show investors that your business is prepared to launch

Business Assessment Documents. Vital documents to make sure you are prepared for your venture. Includes: Business Plan Guidelines, Strategic Planning Checklist, Trend Analysis Checklist, Executive Summary Template, Market Study Outline and Business Analysis Worksheet. 6 Documents to help get you organized.

Business Startup Documents. Essential Documents to Help Launch Your Venture. Includes: Board of Directors Documents, Confidentiality Agreements, General Administration, Basic Financial Checklist, Franchise Feasibility Test, Startup Cost Worksheet, Franchise Comparison Worksheet, Strategic Management, Organization-Wide Goals and much more. 66 Documents to help you get started.

Raising Capital Documents. Practical documents to help you get started raising capital. Includes: Government Grants and Program Worksheets and Guide, Loans and Borrowing Documents, Investment Analysis Summary, Bank Loan Request Sheet, Loan Application Review Form, Loan Calculator, Pledge of Shares of Stock, General Continuing Guaranty, Due Diligence Checklist, Promissory Notes, Investment Analysis Summary, Term sheet for potential investment and much more. 51 Documents to help you obtain funding.

Online Startup Documents. Key documents to establish your online presence. Includes: Advertising and Marketing Online documents, Confidentiality Agreements, Content and Copyright Agreements, Hosting Agreements, Software and License Agreements, Website Development Agreements, Website Notices and Checklists and much more. 72 Documents in total to help you online.

Finance and Accounting Documents. Vital documents for your finance and accounting business needs. Covers: Banking, Bookkeeping, Buying and Selling of Shares, Financial Statements, Government Grant Programs, Insurance, Investments, Investors Relations, Invoices and Billing, Loans and Borrowing, Raising Capital and much more. 169 Documents in total to help with your business finances and accounting.

Employment and HR Documents. Key documents you need as you grow your venture with employees. Covers: Compensation and Benefits, Contractors and Consultants, Employee Records, Employee Reference Letters, Firing and Termination, Hiring Employees, Insurance, Managing and Motivating Employees, Policies and Documentation and much more. 267 Documents in total to help manage your workforce.

Sales and Marketing Documents. Crucial documents as you grow your venture with marketing and sales. Covers: Addressing Complaints, Customer Relations, Market Analysis, Purchase orders and price quotes, Sales and Marketing Management, Sales Agreements and Contracts, Sales letters and much more. 142 Documents in total to help grow your venture.

Advertising and Marketing Online Documents. Documents to get your name and brand online effectively. Includes: Affiliate Program Agreement, Agreement for Internet advertising services, Co-branding agreement terms and provisions checklist, Co-branding agreement, Free linking agreement, Press release template, Website Cross Sponsorship Agreement, Website Linking Agreement. 8 Online Marketing Documents to help develop your online presence.

Business Operational Plan, Employee Handbook, and Policies and Procedures Templates

Show your investor that you are ready to launch by completing these vital foundational documents prior to starting. They include:

Operational plan template for you to describe your business’s mission and operations, including information on your strategic content, company objectives, key performance indicators, key assumptions and risks, goals, and more.

Employee handbook template to create for your current or future employees explaining your policies and what you expect from them and what they should expect from you.

Policies and procedures template (an addition to your employee handbook) to communicate the culture of your business, your standards on employment, schedules, compensation, benefits, hiring policies, and other workplace policies to protect not just your business but also your employees.

*These are templates for you to complete as operations and employee requirements vary per business. Please view the sample pages.

(Delivered in digital Microsoft Word format)

That’s a lot of information! But don’t be overwhelmed. We have offered each item individually so you can choose what you need or all of them. Scroll down to learn more.

See what our customers are saying about our business plan templates.

“The plan had some great points that were very beneficial and important to my business. I hope other clients are able to see the value you are able to provide in their business plans, just like myself. I would highly recommend you to other prospective entrepreneurs. It’s been a pleasure and I look forward to execute my business plan.”

Kristina K.

“Honest Business Plans has given me the tools and inspiration to pursue my business venture. Not only was the template helpful in helping me form my business idea it really explains how it would benefit my company.”

Mikio VanDrunen

“Shawn has been a tremendous help to me and my business ventures. His templates were extremely helpful to me with regard to moving my business from the conceptual phase to something that could be successfully implemented. Furthermore, his business plan example and associated materials allowed me to organize and structure my venture according to how I wanted to run and grow my business. I also found the process much easier with the materials (as opposed to doing everything on my own), since they provided a solid blueprint for my business.   I would recommend Shawn and his team to other entrepreneurs and business owners without hesitation. They have been great to work with!”

Kevin Cisney

The best part about our plans is that the TIME-CONSUMING parts are DONE for YOU.

Our Hybrid Fusion Business Plan Templates save you time as most portions are already completed for you, including the general narrative, market research and format are already researched and written for the Hardware Store industry.

What makes our Hybrid Fusion Business Plans Different?

Here are just a few reasons why our Honest Business Plan Template is the best solution to begin planning your venture:

• Formatted layout for investor and lender use.
• A full narrative written from scratch for your industry.
• Red instructional text guides you through each section of the business plan, explaining what each section is about and what to include, ensuring a polished, professional plan.
• Written in a persuasive way to show investors the true potential of your venture.
• Hybrid Fusion Cross between a business plan sample and template to make customization more realistic.
• Simple Pricing: Straight forward pricing no long-term subscription or obligation. Purchase and instantly download and edit.

Click here for sample pages of this Hardware Store business plan template.

But we don’t want to sell you on EASY.

We want to make sure you obtain a researched market-specific business plan template you are able to build a realistic and truly investor-friendly business plan upon.

Real investors and lenders see 3 to 15 business plans a day.

With the big “Corporate” business plan template companies luring you in with an “Easy” business plan those very lenders see right through them.

With our plan templates, you will have something extensive, unique as well as researched to set you apart from the “Corporate” generic business fill-in-the-blank plan templates.

Know exactly what you will be receiving by viewing our sample pages for this business plan here.

Do it yourself and not only save but learn more about your business as well.

• Each complete plan takes us about 160 to 200 hours to research , write and create and is written in a way to make it easy to understand yet investor friendly. A professional business plan writer would charge a minimum of $650 to create a unique business plan of our length.
• This is the viable solution you have been looking for. A comprehensive template with full narrative specifically for your industry. Our business plans are investor friendly, and offered at a fraction of the cost of a professional business plan writer.
• We stand behind our quality. Our plans are in-depth and researched. If you are able to find a more researched, referenced, comprehensive, Hardware Store business template for the Hardware Store industry for a lower price we will refund your money.
• Don’t believe the MYTH of “Fill in the blanks” business plan templates. Each venture is unique as is each market. If someone promises you a “fill-in-the-blanks” template or automated way to create your business plan then you are effectively getting a generic plan. Our hybrid business plan offered here is researched written and formatted specifically for the Hardware Store industry.
• Before purchasing, please understand the usage of this document (Yes, you will have to put in some work)  we are honest about what we offer and provide screenshots of the documents you will be receiving so there is no misunderstanding.

A customized or turn-key document from a reputable professional business plan writer starts at $950 and a cost upwards of $5,500 or more (A Google search will show you this).

We are attempting to help you get started on a budget hence we are providing our extensive hybrid fusion business plan documents as a starting point for you to build your plan upon.

30-DAY MONEY-BACK GUARANTEE.

Like any business, there are risks. I am so confident that this is the most comprehensive Hardware Store business offering out there that if you are able to find a more comprehensive Hardware Store business plan package that includes a 35+ page business plan template and matching Excel worksheet for a lower price, I will refund your money. Click here for terms and conditions.

*PLEASE NOTE THAT THIS PRODUCT IS NOT A TURN-KEY SOLUTION, BUT AN EDITABLE TEMPLATE THAT IS MEANT TO SERVE AS A FOUNDATION/BASIS/OUTLINE ON WHICH YOU CAN DEVELOP YOUR OWN PROFESSIONAL HARDWARE STORE BUSINESS PLAN WITH SOME EFFORT.

THE BEST TIME IS NOW

There is never a better time than the present to start your Hardware Store as the demand for home improvement and DIY projects continues to rise, with more individuals investing time and resources into enhancing their living spaces and tackling repairs and renovations. The resources we provide will help jump-start you. However, in the end, only you can choose to make a difference in your life.

*This is a Business Plan Template/Outline in Unlocked and Editable Microsoft Office and should only be used as a starting point/foundation to write your own plan. You will need to edit it for your needs.

CHOOSE THE OPTIONS THAT WORK BEST FOR YOU. SSL Secured Checkout via PayPal or Credit Card. Your future Hardware Store customers are waiting.

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Disclaimers (Please read prior to purchase)

-This is an editable example business plan template, which is in between a business plan template and a sample. This is NOT a complete Turn-key business plan. Modify and use this Hybrid business plan template as a foundation to create your own plan. View Sample pages to see exactly what you will be receiving.

-We are unable to make any changes to this plan or excel sheet or pitch deck or documents for you.

-By purchasing these documents, you agree not to resell, copyright, or post them online.

-Digital Download for Microsoft Office XP 10.0 in Windows XP and higher versions.

-Will also open in Microsoft Office for Mac, however, some formatting issues may be present and will need to be corrected. For this reason, we are unable to guarantee 100% direct compatibility with Microsoft Office for Mac.

-This is a large Microsoft Word file. Please keep in mind that we are not responsible if your computer processor is unable to render them quickly. We have tested these files on multiple MACs and PCs and they render fine on our end. However, we are unable to account for or guarantee how the files will perform on your end due to various extensions and operating system performance. Although rare, if you are having rendering issues you may need to attempt to open and work on the Microsoft Word files on an alternative, newer or faster computer.

The best time to start is now. Purchase with confidence. SSL Secured Checkout and 30-Day Money Back Guarantee if you are able to find a more comprehensive and up-to-date plan and funding package combination for a lower price point.*

Thanks for scrolling down to the bottom of this page! Whether you purchase from us or not I wish you much success in your Hardware Store business venture!

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Ultimate Guide to Creating a Hardware Store Business Plan

Crafting a robust hardware store business plan is pivotal for securing financing and guiding operations. It serves as a strategic framework for launching and growing your store.

Entering the competitive world of retail hardware requires a sound business strategy and an effective plan that can adapt to market changes. Embarking on this venture means you’ll need a document that addresses critical elements such as market analysis, product offerings, marketing strategies, staffing, and financial projections.

A comprehensive business plan not only helps to attract investors or lenders but also provides a clear roadmap for your hardware store’s success. It should include realistic goals, identify your target market, and differentiate your services from competitors. We’ll outline the essential steps and considerations for developing a business plan that positions your hardware store for long-term profitability and sustainability.

Crafting Your Executive Summary

When launching a hardware store, a well-crafted business plan is vital. The executive summary stands as your plan’s first impression , setting the stage for potential investors and partners. An effective summary can make or break your business pitch.

What Is An Executive Summary?

A business plan’s introduction is the executive summary. It maps out your hardware store’s mission, strategy, and goals . Think of it as a trailer for a movie. It brings to light the most exciting parts of your plan to spark interest. A gripping executive summary is crucial for capturing attention quickly.

Key Components To Highlight

In your executive summary, focus on main points. Let’s unpack these essentials:

• Business Concept: Describe your hardware store, the products you’ll sell, and what makes it unique.
• Market Analysis : Present an overview of the industry, target market, and competition.
• Leadership: Highlight your management team’s experience and skills.
• Financials: Provide a snapshot of projected finances, including profits and costs.
• Growth Potential: Outline future plans and how the business will scale.

Remember, your executive summary should be clear and concise. A one-page limit is best. Use simple, accessible language to ensure readability.

To conclude, your executive summary is a cornerstone element. Ensure that each component shines brightly. Craft it with care to set the tone for a successful hardware store business plan.

Analyzing The Hardware Industry

Before you jump into the nuts and bolts of drafting a business plan for your hardware store, it’s vital to understand the landscape of the hardware industry. This means taking a close look at market trends and identifying who you’re up against. Keep reading to sharpen your insight into the hardware sector, ensuring your business plan is as robust as the tools you aim to sell.

Current Market Trends

Knowing the pulse of the market sets a firm foundation. Here’s what’s trending:

• DIY Boom: DIY projects are soaring. More people prefer fixing things themselves.
• Eco-conscious Products: Green tools and sustainable materials draw attention.
• Smart Home Integration: Customers seek tools compatible with smart home tech.
• Online Sales Growth: Online hardware sales see significant increases.

This knowledge guides your inventory choices and marketing strategy.

Identifying Your Competitors

Recognizing who you’re up against helps tailor your unique selling points. Here’s a method to spot your competition:

• Determine local hardware stores in your area.
• Analyze their product range, prices, and services.
• Check customer reviews for strengths and weaknesses.
• Look at their marketing and online presence.

With this intelligence, your business plan advances from good to great.

Establishing Your Business Identity

Establishing Your Business Identity is a crucial step in crafting your hardware store’s public face. It’s the foundation upon which customers will build their trust and recognition. By selecting a memorable name, you lay the cornerstone of your brand. Moreover, a well-thought-out brand strategy sets you apart in a competitive market. Let’s delve into the specifics of naming your store and developing a brand strategy that resonates with your target audience.

Naming Your Hardware Store

Finding the perfect name for your hardware store can be a thrilling journey. It’s the first hint of your business’s personality, and it should grab attention. Here are key points to consider:

• Keep it simple and easy to remember.
• Ensure the name reflects your hardware store’s ethos.
• Check for domain availability; a matching website strengthens your brand.
• Avoid names that limit future expansion.
• Search for trademarks to avoid legal troubles.

Developing A Brand Strategy

Once you have a name, it’s time to build a brand strategy that tells your story. A solid brand strategy will guide every interaction with your customers.

• Define your unique selling points (USPs): What makes your hardware store stand out?
• Identify your target audience: Who are you trying to reach?
• Create a visual identity: Logo, colors, and typeface should align with your business values.
• Develop a brand voice: This is how you communicate with your audience, be it friendly, professional, or informative.
• Consistency is key: Ensure that all marketing materials reflect your brand strategy.

Remember, effective branding leads to a strong identity and customer loyalty. Use these guidelines, and watch your hardware store’s brand flourish.

Exploring Your Target Market

Starting a hardware store hinges on who you sell to. A clear picture of your buyer is crucial. It informs stock, services, and marketing. Who needs tools? Who fixes homes? Knowing your audience gives your hardware store a solid foundation.

Demographics Of Your Ideal Customer

Demographics spell out who your customer is. Age, job, income, and location tell you who enters your store. Are they homeowners, contractors, or DIY enthusiasts? Below, demographic details illuminate your target customer:

Understanding Customer Needs

What drives a customer to buy? Quality, price, and variety matter most. Use surveys, feedback, and trend analysis to learn. Local contractors may need bulk items. Homeowners might seek eco-friendly products. Catering to specific needs sets your store apart.

• Quality tools draw professionals
• Competitive pricing attracts budget-conscious buyers
• Diverse inventory appeals to a broad audience

Outline Of Products And Services

Crafting the perfect Outline of Products and Services is a linchpin in plotting your hardware store’s success story. This guide will detail how to select a robust inventory and propose customer-centric services. Let’s delve into strategies to ensure your hardware store stands out in a competitive market.

Inventory Selection Strategies

Choosing the right products is crucial. Think about your target customers. What tools and materials will they seek out? Use a mix of data analysis and market trends to help decide.

Consider the following inventory selection strategies :

• Consumer Demand : Stock top-notch goods that customers frequently request.
• Quality Over Quantity : Choose durable, reputable products over a vast array of lesser-quality items.
• Niche Products : Stand out by offering specialty items that aren’t available in general stores.
• Seasonal Availability : Keep in tune with seasons and regional events to supply timely products.

Complementary Services To Consider

A hardware store is not just about selling items; it’s about solving problems. Think beyond the cash register to offer valuable services.

Explore these complementary services :

• Tool Rentals : Offer a selection of tools for rent to your customers, for jobs big and small.
• Installation Services : Provide local experts who can install and assemble products sold in-store.
• DIY Workshops : Conduct classes that teach home improvement skills and use of tools.
• Custom Orders : Allow customers to request special order items not typically stocked.

Marketing And Sales Strategies

Marketing and Sales Strategies are the engines of business growth. They turn the gears of public awareness, customer interest, and revenue generation. A robust plan in these areas can set a hardware store apart in a competitive market. Here’s how to capture customer attention and keep them coming back.

Effective Advertising Techniques

In today’s bustling market, effective advertising stands out. It’s essential to craft messages that resonate with your target audience. Start by identifying the unique selling points of your hardware store. Consider these strategies to get your message out:

• Local SEO: Optimize your online presence so local customers find you first.
• Social Media Marketing: Engage with the community through helpful DIY tips and promos.
• Email Campaigns: Keep in touch with customers about new products and deals.
• Community Involvement: Sponsor local events for brand visibility and networking.

Building Customer Loyalty Programs

A customer loyalty program can turn one-time shoppers into repeat customers. These programs reward clients for their continuing business. Below are steps to develop a successful loyalty program:

• Identify rewards that excite customers, like discounts or early access to new items.
• Use a simple points system to track customer purchases and rewards.
• Encourage sign-ups with a bonus reward for joining the loyalty program.
• Regularly analyze the program’s success and make adjustments as needed.

Remember, successful marketing and sales strategies require creativity and consistency. Instill trust, maintain engagement, and reward loyalty for long-term success.

Operational Plan And Logistics

A robust Operational Plan and Logistics strategy forms the spine of any successful hardware store. It ensures the seamless day-to-day management and supports the growth of your business. Effective planning leads to happy customers, efficient operations, and increased profitability.

Daily Operations Management

Run your hardware store like a well-oiled machine with a strong focus on daily operations. This includes opening hours, staff roles, customer service, inventory management, and order processing. Your plan should detail each aspect and how it contributes to smooth operations. Use bullet points for easy understanding:

• Store Hours: Set times that match customer demand.
• Roles & Duties: Define tasks for each team member.
• Customer Services: Prioritize fast, friendly assistance.
• Inventory Tracking: Use systems to manage stock levels.
• Order Procedures: Streamline for quick turnaround.

Supply Chain And Vendor Relations

Building strong supply chain and vendor relations is critical. The right partnerships ensure quality products and consistent supply. Highlight these relationships with an easy-to-follow table format:

Keep these points in your plan:

• Evaluate Vendors: Assess for reliability and quality.
• Negotiate Terms: Aim for beneficial agreements.
• Monitor Deliveries: Track to avoid stockouts.
• Build Relationships: Maintain open communication.

Ensure your hardware store thrives by laying down a concrete operational plan and nurturing solid vendor ties. Stick to this roadmap and watch your enterprise soar to new heights of efficiency and customer satisfaction.

Financial Planning And Projections

Creating a solid Financial Planning and Projections section is vital for your hardware store business plan. This section acts as the navigational star for your enterprise, guiding you through the financial challenges ahead. Lucid and accurate planning ensures you are ready for the journey of entrepreneurship.

Startup Costs And Funding

Estimating startup costs sets the stage for a successful launch. List every expense, no matter how small. Your list should include:

• Rent or purchase of property
• Inventory stocking
• Equipment and fixtures
• Licensing and permits
• Marketing and advertising
• Insurance and security

Funding sources may consist of:

• Personal savings
• Investor capital
• Government grants

Balance initial costs with funding to plan your financial runway.

Sales Forecasts And Profit Margins

Your sales forecasts reflect potential earnings. Be prudent and realistic. Here are steps to forecast sales:

• Analyze market demand
• Set achievable sales targets
• Examine competitor pricing strategies
• Estimate monthly sales volumes

Understanding profit margins is crucial for sustainability.

A simple calculation:

(Net Sales - Cost of Goods Sold) / Net Sales = Profit Margin

Boost margin by increasing efficiency or adjusting prices.

Planning and projections are your blueprint to financial success. They outline the financial roadmap and help in steering your enterprise on the path to profitability and growth. Regular reviews and updates keep you on track.

Building A Strong Team

Building a Strong Team is a pillar of success for any hardware store business plan. A dedicated team turns daily challenges into opportunities. Excellence in service and operations rests upon the shoulders of skilled individuals. Crafting a solid team means selecting the right people and investing in their growth.

Hiring Skilled Employees

Key to any business is its workforce. In the hardware sector, knowledge and expertise drive sales. Identifying candidates with the right skill set is a must. They need to understand products, handle tools, and provide stellar customer service.

• Post jobs where industry professionals gather.
• Describe roles clearly to attract qualified applicants.
• Conduct thorough interviews to uncover aptitude and attitude.

Training And Development Programs

Investment in your team goes beyond the hiring process. A continuous learning environment fosters expertise and innovation. Tailored training equips your staff with the latest industry know-how.

• Create a training roadmap that aligns with business goals.
• Implement mentorship programs for hands-on learning.
• Equip employees with certifications and courses.

Exceptional teams are built on a foundation of growth and learning. A robust plan considers employee development a continual journey.

Legal And Regulatory Considerations

Starting a hardware store involves careful planning and understanding the legal framework. Legal and regulatory considerations can seem daunting, but they protect your business, employees, and customers. From permits to insurance, we’ll unravel these complexities into manageable tasks, so you can build a compliant and secure hardware store.

Required Permits And Licenses

Every hardware store needs specific permits and licenses to operate legally. These vary by location and the scope of your operations. To avoid penalties, familiarize yourself with the necessary legal documents:

• Business License: This is the basic permit to operate your hardware store.
• Seller’s Permit: You’ll need this to sell goods and collect sales tax.
• Building Permits: If you plan on construction, these are a must.
• Health and Safety Inspections: Ensuring your store meets health codes.
• Signage Permits: Required for outdoor signs.

Insurance And Liability Protection

Insurance shields your business from unforeseen events. It’s crucial for safeguarding your financial stability:

It’s not only about compliance; strong insurance coverage is your safety net against many risks. Consult with an insurance professional to find the best options for your hardware store.

Formulating An Exit Strategy

An exit strategy is a key component of any business plan, especially for a hardware store where investments in inventory, equipment, and real estate can be substantial. Preparing for the future is crucial whether you plan to retire, pass the business on to a family member, or sell it for a profit. In this section, we discuss two critical aspects of an exit strategy: understanding business valuation and planning for a future sale or succession.

Understanding Business Valuation

Knowing the value of your hardware store sets the stage for a successful exit. Business valuation hinges on multiple factors, including revenue, profits, market position, and assets.

• Earnings : Potential buyers focus on profitability.
• Assets : Inventory, tools, and real estate add to the store’s worth.
• Brand value : A well-known local brand can increase valuation.

Regular valuation updates keep you informed about your business’s health and growth, which support effective exit planning.

Planning For Future Sale Or Succession

A tailormade plan is necessary to ensure a smooth transition. Succession planning guarantees business continuity, while sale preparations maximize financial return.

Whether transitioning to a family member or selling to an outside buyer, preparation starts years in advance. Build a strong management team and maintain meticulous financial records . These efforts result in a smoother, more profitable exit.

Frequently Asked Questions

How do i write a hardware store business plan.

To write a hardware store business plan, start with an executive summary. Next, describe your business, market analysis, organizational structure, and product line. Detail your marketing and sales strategies, funding requests, and financial projections. Keep language clear and concise.

Is A Hardware Store A Profitable Business?

A hardware store can be profitable with effective management, location, and market demand alignment. Strong customer service and inventory knowledge boost success.

What Do I Need To Start A Hardware Business?

To start a hardware business, you need adequate funding, a solid business plan, a suitable location, strong supplier relationships, and the necessary licenses and permits.

What Makes A Successful Hardware Store?

A successful hardware store offers diverse, high-quality products, provides exceptional customer service, maintains a well-organized layout, keeps competitive pricing, and harnesses effective marketing strategies. Knowledgeable staff and a strong online presence also contribute to success.

Embarking on your hardware store venture requires careful planning and strategic thinking. With the insights gleaned from this guide, you’re now equipped to craft a robust business plan that lays the foundation for success. Ensure your milestones are clear and financials are thorough.

It’s time to turn that blueprint into a profitable reality. Forge ahead, apply these principles, and build a thriving hardware business.

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How To Start Hardware Store Business [PLAN]

Do you wish to develop a hardware store business plan?

The success of such a great business idea largely rests on a strategy or plan .

The absence of such a plan is bound to affect the business development. As a crucial tool to business success, we’ve provided a template to follow in writing your hardware store business plan.

HARDWARE STORE BUSINESS STARTUP GUIDE

By following the key sections included you’re able to put in place a streamlined plan of action. Of course, your hardware store business plan needs to be implemented in the letter.

Here, we’ll be discussing all of that and more. We welcome you to read on to find such details.

A Good Hardware Store Business Plan Must have these Sections

Before we go any further, it’s pertinent to provide a framework around which the plan will be written. Here, we’re talking about must-have sections that are key to a good plan.

These include the executive summary, company description, and the products & services sections.

Others are the market analysis, strategy & implementation, organization & management team as well as the financial plan & projection sections.

i. Executive Summary

As a brief introduction and summary of your hardware store business plan, this section should be concise enough to grab the attention of your reader.

Here, you want to give them a reason why they should read through your entire plan.

The executive summary clearly defines whether the business idea is viable or not.

More importantly, it provides an implementable plan of action that is systematically followed. To make it quick and easy to read, your executive summary should have an average of one to four pages.

You want your executive summary to make up about 10% of your entire business plan. Within this section are key subsections such as the business name & location as well as the products & services sections.

Others include the mission & vision statements, and the purpose of the plan.

Business Name & Location

What’s the identity of your hardware store business? Of key importance is the name it will go by. Another detail that needs to be included in its location.

With this information, the reader understands your business from very scratch.

Products & Services

Although there’s a product and services section in the wider plan, this must also be included in your executive summary. Now, only the basics need to be captured here.

For a fuller detail of all products and services offered by your hardware store, the reader will need to read the plan.

You’re expected to have worked out all your hardware store products and/or related services well in advance. This may require research on your part. Ensure the basics are captured under this section.

Mission & Vision

This section explains crucial areas of your plan. The mission and vision statements set the performance standards for your hardware store business plan. What more?

They help provide employees with set goals to attain, thus promoting efficiency.

Your mission statement should be action-oriented in nature.

Here, an explanation of your business’s purpose and what benefits it has for clients is provided. It should also include your business’s goals and its core functions.

Your vision statement should give a vivid mental image of your hardware store business. Here, the image of what you intend to be at some point in the future is provided. This is largely based on your goals and aspirations.

Purpose of the Plan

What’s the purpose of your plan? Every business plan has a purpose and yours shouldn’t be any different.

Whatever it is, it must include set strategies and attract investors.

ii. Company Description

The company description section of your hardware store business plan focuses on key areas such as the legal structure, the business’ history, as well as the needs you intend to meet. What more?

Consider including an overview of products and services and also a company growth summary.

Another detail that must be added is your short and long-term business goals. More importantly, you’ll need to show investors your plans for making a profit.

iii. Products & Services

This was earlier discussed as a subsection under the executive summary.

Here, you’ll need to add all the important details like the description of such services and products. Information on the market role of your products as well as its advantages must be stated.

What’s the life cycle of your hardware products? All relevant information on patents, copyright, or trade secrets should be added. Are new products in the works?

Include information on any or other ongoing developmental activities.

iv. Market Analysis

In this section of your plan, you’ll need to show significant industry knowledge.

This level of understanding largely depends on thorough market research. Here, you’ll be providing a representation or sketch of targeted market segments.

A description of the hardware store industry will also be in order. Its outlook, as well as supporting statistics, are also necessary to gain a fuller and more robust understanding of what your business is about.

Also include information on historical, current, and projected marketing data for services and products.

An assessment of your competitors is also in order. Here, you’re looking at their strengths as well as weaknesses.

v. Strategy & Implementation

With the help of an operating plan, you’re able to implement your sales and marketing strategy.

Under this section, you’re looking at costing details, pricing, promotion as well as distribution or logistics. Your strategy and implementation section must also provide promotion details and how your products will enter the market.

How will your hardware store business function? Include details on labor sources as well as the number of employees.

vi. Organization & Management Team

This is the bedrock upon which every business is structured.

Your hardware store business will need an efficient management team in place. Provide details on this by including an organizational chart with key employees highlighted.

There should be additional information on owners, their names, percentage ownership, as well the extent of their involvement. Include a profile of your management team with names, positions, responsibilities, and experience provided.

vii. Financial Plan & Projections

The financial plan and projections section is a crucial component of your hardware store business plan. Here, the help of a financial expert such as a professional accountant is needed.

Details to include are the historical financial data with balance sheets, income statements, and cash flow statements spanning the past three to five years.

There should be realistic prospective financial data. This includes balance sheets, forecasted income statements, cash flow statements, and capital expenditure.

With all of these key sections and details included in your hardware store business plan, your chances for success are greatly improved.

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How to Start a Hardware Store Business

By: Author Tony Martins Ajaero

Home » Business ideas » Wholesale and Retail Industry

Do you want to start a hardware store company? If YES, here is a detailed guide on how to start a hardware store business with no money and no experience plus a sample hardware store business plan template.

Hardware Stores are businesses that provide huge profits and revenue when planned and ran well. This industry which was once dominated by small independent businesses has now been overrun by large enterprises.

It should be noted that today’s hardware consumers now understand the limitations of chain retail hardware, thus creating opportunities for independent startups to capture market shares.

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Reports have it that 60% of hardware shoppers intend to increase online purchasing as a way to compensate for their disappointment with brick-and-mortar ventures, which spotlights the importance of having a quality business website.

Starting and running this business to the point of financial stability won’t be an easy task. A business plan helps to organize the direction of the hardware store.

In your business plan, you will have to extensively state the mission of your hardware store and how you plan to market to the community.

We strongly recommend that you establish a budget that reflects the size of the potential location, along with a map of the store including the type of inventory you plan to maintain.

Also if you don’t have access to the needed funds to start and run this business, then you need an investor or a small business loan. Have it in mind that an investor might be family, friend or a local angel investor.

It will take more than just being a good entrepreneur to run a hardware store, you need to possess excellent communication skills and have patience to listen and serve the needs of your clients.

19 Steps to Starting a Hardware Store Business

1. understand the industry.

Businesses in this industry primarily retail a large range of new home renovation equipment and supplies. Hardware, plumbing, electrical and paint-related tools are the most commonly stocked goods.

Reports have it that this industry has steadily built up over the five years to 2017, and with the housing market strengthened and consumer confidence revived; people have started spending money on home improvement projects that had been put on hold during the recession.

We also believe that the mortgage rates experienced during the period have also encouraged individuals to buy and renovate new and existing homes. With this growing need and the steady construction activity, demand in this industry has been boosted.

Experts believe that within the five years to 2022, industry revenue will grow at a slower rate and external competition will slightly dampened both industry revenue and profit growth. It’s very important to state that the Hardware Stores industry is in the mature phase of its life cycle. Also have it mind that the industry experiences low levels of technological change, also indicating its maturity.

According to industry reports, the industry’s contribution to the overall economy, as measured by IVA, is expected to grow at an average annual rate of 0.9% within the 10 years to 2022, compared with expected GDP growth of an annualized 2.1%.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

We believe that this business is usually exciting for handymen, tradesmen, and those who enjoy home improvement activities, especially since the owner of a hardware store should be able to advise customers on purchases and have experience with the products being sold in the store.

Have it in mind that long hours aren’t always needed, but weekends might be. Having a flexible schedule helps, especially during the first few years of operation. Note that a hardware store makes money by charging customers for tools and supplies. Usually, there are fixed prices for the items, but in the case of items like rope or chain, the store may sell an item by the foot or priced by the yard.

A lot of your customers will pay by credit or cash, which is why it’s very crucial to the health of your business to offer customers a variety of ways to pay you as some volume customers may need credit terms in order to do business with you. Volume orders/clients also allow you to include finance charges or terms in your purchase price.

We believe it’s not uncommon for a hardware store to offer terms of 30 to 60 days for a well-established client. However, these terms can be extended with or without interest. Also, note that you can create a policy of charging interest after 30 days to collect more money from customers who need more time.

3. Decide Which Niche to Concentrate On

Have it in mind that small hardware stores, just like their counterparts in every industry, face cutthroat competition, not just from other local businesses but big box stores like Home Depot, and e-commerce giants like Wal-Mart and Amazon. But with good expertise and passion for operating a hardware store, you can grow it to become very successful.

But first you will have to choose a niche to focus on. You can’t possibly decide to become a jack of all trade in this industry; you have to decide on a suitable niche for you. We suggest you go on an extensive Feasibility research and understand the best niche to focus in before you start buying or paying for anything. These niches may include…

• Tools and equipment
• Plumbing fixtures and fittings
• Electrical supplies
• Paint and supplies
• Garden products and equipment
• Urban farming
• Organic farming
• Emergency preparedness
• Rain water management

The Level of Competition in the Industry

In a more explicit explanation, hardware stores are stores that sell a wide variety of home maintenance and repair items. Hardware stores also often sell structural material and different forms of lumber for any home repair, renovation, or construction.

They buy products from manufacturers and wholesalers, and then move to retail the goods to independent consumers as well as professional contractors. You need to understand that distributors in this industry serve as liaisons between the consumers and manufacturers.

We believe that companies buy products in bulk from a lot of manufacturers, and then retail them in smaller quantities to consumers. In this way, consumers can buy different items from different manufacturers.

Reports have shown that a lot of factors help drive demand and profit in this industry: home remodeling and repair, construction, hardware retailing, new home building, and telecommunications all need products retailed in this industry. It is also believed that revenue depends on efficient management of a company’s inventory, as well as use of effective advertising strategies.

We noted that large companies have an advantage in that their distribution networks are very fast and big, giving the chance to provide consumers with a wide selection of products and services. Businesses prioritize providing specialty items, stocking products they know their consumers need, and providing excellent customer service.

4. Know Your Major Competitors in the Industry

• Do It Best Corp
• True Value Company
• Ace Hardware
• Lowe’s
• Leroy Merlin

Economic Analysis

We believe there are nearly 20,000 hardware stores in the united states today, producing about $24 billion in revenue and employing just over 148,000 people. Analysis has shown that as the economy has improved over the last five years, the housing market has grown, leading to an increase in the number of home improvement projects that needs trips to the hardware store.

Also low mortgage rates have encouraged people to buy and renovate homes. Note that ideal customers are usually DIY customers or handymen.

Have it in mind that your clients will be typically local, which is why advertising for a hardware store can be done using one of several ways, including billboards, Yellow Page ads, pay-per-click local online ads, fliers, and email marketing to an existing customer list. Also email marketing is an underutilized strategy in this industry because a lot of hardware stores depend on word of mouth and foot traffic.

But, by emailing your existing customers on a regular basis, you can generate significantly higher revenues than depending on people randomly coming into your store anytime they have a need to. Hardware stores can be run as a small local shop or as a chain store. For example, Lowes, Home Depot, and other similar stores are large chain stores that operate all over the U.S.

5. Decide Whether to Buy a Franchise or Start from Scratch

Business is all about researching and making decisions that will favour your dreams for the business. If you are a control freak who wants to make 100% of the decisions about how your business operates, then you might feel good about opening your own shop.

Also starting from the scratch is less expensive. But also you can start a hardware store with a popular franchise, which gives you access to an established name, as well as a proven operational model and efficient supply chain. Note that you can still be the owner of the store with plenty of latitude to make business decisions.

You need to know that both ownership strategies have their advantages and disadvantages. For first-time business owners, it makes more sense to buy an existing hardware store than to attempt to build one from the ground up. The benefit of buying a franchise is the recognized name and the loyal customer base that comes with it.

6. Know the Possible Threats and Challenges You Will Face

Just like we stated above, starting and running this business successfully won’t be an easy task. Your first year will be critical for your hardware store. Your success or failure will largely be determined by your ability to navigate a handful of essential issues and requirements during that period…

Have it in mind that the individual or personnel you hire at the beginning of your start up’s life will set the tone of your business. Ideally, you’re looking for hires that have both the retail and hardware experience necessary to sustain your customer service emphasis.

Customer Service

In the hardware store business, customer service has life and death implications because hardware shoppers expect store personnel to be able to give expert advice about a wide range of hardware projects. To stay afloat in this industry and differentiate yourself from your competitors, you need to have a good customer approach to business.

You can’t start a hardware store and expect it to be empty of good products anytime someone walks into your business. During the economic downturn, a lot of hardware retailers cut back on inventory and subsequently lost customers. Industry estimates peg the initial inventory investment at around $35 per square foot of retail space.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

The LLCs is the best legal entity when starting a Hardware store because of its various benefits. LLCs can be owned by one or more people who are known as LLC “members.” An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is known as a multi-member LLC.

It’s important to state that an LLC is managed by its members , also known as member-managed. But in some cases, the members will appoint a manager to handle the LLC’s daily operations, and this is called manager-managed. LLCs offer the right mix of personal asset protection and simplicity.

Unlike sole proprietorships and general partnerships, LLCs can protect your personal assets if your business is sued. Unlike corporations, LLCs are relatively easy to form and maintain, and are not subject to double taxation. LLCs also offer the easiest way of choosing the S-Corp tax designation, because they are simpler to maintain than a standard C-Corp.

8. Choose a Catchy Business Name

• Tools stores
• Diamond stores
• Green organic
• Stratford store
• Natural Dry
• CleanSource
• Continental stores
• Sustainable providers
• Crystal Angel shops
• Dependable enterprise
• Fenton Sew & Vac
• Simple tools Ltd
• Sycamore stores
• Flatiron Ventures

9. Discuss with an Agent to Know the Best Insurance Policies for You

Don’t be deceived into believing that you don’t insurance when starting a business. Insurance help protect your business against lawsuits and financial losses resulting from a number of situations. A customer can fall and injure themselves; property could become damaged or stolen, employees could become injured or sick. Below is the list of insurance needed for a hardware store

• Business liability insurance
• Property insurance
• Building coverage
• Business income and extra expense coverage
• Employee dishonesty coverage
• Employee Benefits Liability Coverage
• Hired and Non-Owned Auto Liability Coverage
• General Liability Insurance
• Product liability insurance
• Crime and Fidelity insurance business interruption insurance
• Workers Compensation Insurance
• Vehicle insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

The proper understanding, exploitation and protection of intellectual property (IP) rights are fundamental to the success of a lot of retailers. In the retail industry, intellectual property protection and Trademark are needed to serve as;

• Anti-counterfeiting and piracy
• Copyright laws
• Brand and image rights
• Protection and registration of designs
• Enforcement and dispute resolution
• Data and database rights
• Competition law
• Protection of technology and innovation
• Advertising and marketing issues.
• Patents laws
• Trade mark filing and opposition
• Brand audits and watching services
• Securing trademarks and passing off
• Domain name strategies and disputes

The world generally now understands the need to protect this intangible product that defines our business and struggles. Protecting your intellectual property is like protecting the values and means that provide revenue for your business. Ways to protect them may include…

Understand your ideas and properties

Have it in mind that once you have a great idea for your service, there will always be people who will want to duplicate your success and sell your ideas as their own. It all depends on individual circumstances; you can use patents, trademarks or copyrights – all of which cover different areas of intellectual property. These can be used to prevent competitors or anyone else from using your ideas for their own profit without your consent.

Guide and protect business growth

It’s important that you protect the services that you own as competitors can use your success to take away market share, resulting in slow growth or loss of revenue. Giving away market share early in a business’s development can be devastating and time consuming if trying to chase up the guilty party without any legal protection.

It’s important to remember that no one else will check to see if your intellectual property has been infringed; it’s your responsibility to ensure that no one else is using your assets.

11. Get the Necessary Professional Certification

Professional certifications are not necessarily needed to start a hardware store but it will help you in the long run if you can acquire one or two. Individuals who plan to start their own retail businesses or who are currently majoring in marketing or information systems could benefit from earning a retail certificate. These certifications include;

• Retail Management Certification (RMC)
• Retail Business Credential (RBC)
• Customer Service and Sales Certification (CSCS)
• Advanced Customer Service and Sales Certification (ACSSC)

12. Get the Necessary Legal Documents You Need to Operate

There are legal requirements for every business and it will be an offence punishable by law if you choose to start a business without the complete documents. In most states, it is necessary to obtain a retail Store license. Most businesses are required to collect sales tax on the goods or services they provide.

Hardware Stores may also wish to look into applying for a resale certificate, which allows retailers to purchase goods intended for resale without paying sales tax. Other legal documents you may need include;

• Business license
• Employment agreements
• Federal license
• State license
• Local license
• Proof of Insurance
• Intellectual property protection right
• Federal tax identification number

13. Raise the Needed Startup Capital

If you lack the funding to run this business successfully, then we suggest you identify potential sources of funding, make sure you meet all their requirements, and prepare your applications or pitches to be able to land funding to grow your retail business. The retail industry just like many industries require adequate funding to be able to flourish. Sources for funds available to a retailer are:

• Asset-based lending
• Cash advances
• Bank overdrafts
• Family loans
• Community schemes
• Peer-to-peer loans
• Micro loans
• Crowdfunding
• angel investors

14. Choose a Suitable Location for your Business

Whether you believe it or not, the competitive landscape of the hardware store industry offers a great opportunity, especially if you are going into a conventional brick-and-mortar business. Don’t let higher lease or rent payment scare you.

If a location truly offers prime foot-traffic, walk-ins and easy access for your customers, it may be well worth the investment. In this context, your lease is simply part of your overall marketing spending to get people in the door. Rather than going solely by price, here are three important factors to consider when choosing a location for your hardware store:

Location as a marketing tool

Facts have proven that one of the most expensive ways to get a new customer is advertising. You can use what could have been outside marketing or advertising money to fund internal rewards and referral programs.

Store space and accessibility

What does your target buyer look like? What do they do? Where do they live, work and play? You need to have a space that’s easy to see and get to. In choosing a location, an entrepreneur needs to put himself/herself in the customer’s shoes and decide what fits in and what doesn’t.

Business freedom

First we suggest you become conversant with local laws, zoning ordinances and potential highway or shopping centre constructions that might affect you. You also need to consider rules that might inhibit you on everything from signage to your ability to hold special events to operating during certain hours.

15. Hire Employees for your Technical and Manpower Needs

Just like in every other retail business, your customers might impatient and frustrated when they have trouble getting served. Even after they buy something, they may leave dissatisfied with the quality of service they got at your store.

It won’t do you or your store any good if you start losing customers due to inadequate manpower or inventory. Satisfaction and convenience are very crucial aspects of starting up and running any retail business. It’s your duty as the owner of the hardware store to make sure that you make purchasing easy for your customers.

Also note that a hardware store just like other retail businesses need managers and supervisors to make sure that everything runs smoothly. A hardware store depending on the size and services needs essential manpower to run smoothly.

These workers may include a retail manager, a customer care assistant, retail security, sales assistant, store manager, night manager etc. A hardware store has no pronounced number of employees or technologies but we strongly advise you employ individuals who are well experienced with tools and industry equipment.

The Services Delivery Process of the Business

Hardware stores just like almost all retail businesses perform a number of operational processes on a continual basis. Knowing and understanding the basic operational processes and workflow of a hardware store can help you to structure operations and lay a concrete foundation for your own retail business. The service processes of hardware stores are systematically outlined as follows;

Buying of inventories

It’s the job of a store manager to regularly take stock of the inventory they have at hand as well as inventory in storage areas. Managers place orders with manufacturers either on a regular basis or when they reach an optimum re-order point for a specific item.

Managing inventory

It’s very important to state that this is a part of everyone’s job in a hardware store. Have it in mind that it begins with receiving shipments which includes unpacking boxes, sorting received items, and disposing of boxes and packing materials.

Client service

Indeed the key purpose of a hardware store is to provide an avenue for customers to view, handle and purchase items, which means all activities in a hardware store definitely revolve around customer service.

We believe that customer service in a hardware store can be broken down into three categories: in-store assistance, transaction processing and handling complaints. In-store assistance is about helping customers to find what they are looking for without hassle.

Transaction processing includes ringing up transaction totals, accepting payments and packaging items for the customer to take home. Handling complaints includes dealing with product returns; short-change claims, potential issues arising between customers and store staff, and general dissatisfaction with the store’s service or products.

One crucial process in any retail business workflow is regularly reporting financial information to the accounting department. Store managers send daily updates to report sales numbers, refunds, lost inventory, hourly payroll data and information on bank deposits before the workflow cycle begins again the next day.

16. Write a Marketing Plan Packed with ideas & Strategies

A lot of entrepreneurs think marketing is irrelevant in their business. That’s a mistake because without marketing, your brand messages aren’t being heard. Have it in mind that great marketing is a real possibility for a hardware store willing to adapt its strategy to the demands of the marketplace.

Diversify Your Advertising Options

When it comes to hardware stores, the challenge is understanding the advertising solutions that are appropriate for your customers. Recently, hardware stores have gotten solid marketing results from online channels. In general, if your competitors know more about promoting their business online than you, you may lose market share.

Marketing Collateral

You need to have at the back of your mind that any piece of collateral your hardware store creates is a tangible reflection of your brand distinctive and core values. Those pieces of collateral can be customized for recipients, while others serve a more generic purpose.

Either way, you have a stake in making sure it gets into the right hands. A lot of entrepreneurs make the mistake of investing substantial resources in the creation of quality collateral. If you don’t invest similar resources in mailing lists and other distribution channels, your hardware store’s investment in collateral will be pointless.

Business Discounts

Facts and reports have shown that a lot of consumers respond positively to discounts whether they are perceived or real; hardware store shoppers treat value as an invitation to buy. We believe that orchestrated discount programs communicate value because they build the perception that the customer is getting more for less. But for consumers located in the hardware store sector, you won’t get far with discounts unless you communicate clear value.

17. Develop Iron-clad Competitive Strategies to Help You Win

We discussed the level of competition in this industry, which is why you have to understand and strive to overcome the constant competition that arises every now and then. Since competition is inevitable in the hardware store industry, you need to research and implement strategies that will put you steps ahead your competitors. Here are few tips on how to stay ahead of your competitors.

• Update your image
• Look after your existing customers
• Target new markets
• Know your customers
• Differentiate yourself from your competitors
• Step up your marketing
• Explore new markets
• Be the best employer
• Look at the future
• Understand the competition

18. Brainstorm Possible Ways to Retain Clients & Customers

Experts have stated times without number the importance of existing customers and how they are the best asset a hardware store can have. This is because they already know the brand, they know the products and they know their service.

We suggest you focus your time and energy on these individuals as opposed to always trying to find new customers. We believe this can be a powerful way to supercharge revenues for your store, especially over the holiday season. You can use;

• Help desks and support systems
• Customer feedback survey
• Loyalty and reward programs
• Gamification
• Light personalization
• Satisfy your customers
• Patronage discount and coupons

19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Having an excellent brand awareness will help your store attract good and loyal customers. It will also encourage your existing customers to trust you more. To be able to achieve a good brand awareness in this business, your brand awareness campaign needs to be flexible enough to grow with the company and adjust if needed.

You may start by holding an event, exhibiting yourself, sponsor something, create an experiential stunt, take to social media, organize a public relation campaign, invest in promotional merchandise, join forces with other businesses etc.

Cementing a good corporate identity through good brand awareness strategies with a little imagination and an understanding of your customers, the sky (and your budget) is the limit when it comes to getting in front of your competitors. You should;

• Attract and engage your target market
• Enhance and reinforce your brand
• Quantify the Value of Client Satisfaction to Your Firm
• Deliver what’s important to your clients
• Find and Fix Problems with Client Satisfaction
• Position yourself as a trusted advisor and go-to resource
• Generate and identify leads for more business
• Develop more profitable relationships with clients, prospects and referral sources

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How To Start a Hardware Business: A Complete Guide

Like all small businesses , the biggest hurdle to opening a hardware store is competing with eCommerce giants and brick-and-mortar retailers. The competition is fierce, from Home Depots and Lowe’s to sole proprietorship hardware retailers. However, hardware business are still emerging for small businesses nationwide. 

With the housing industry lately evolving, there is an increase in demand for overall construction equipment daily. 

Thus, initiating a hardware shop business can be a lucrative venture for business if you have a background in construction or are into home improvement. 

In this article, you will discover the steps required to undertake while opening a hardware business of your own. 

Steps To Start A Hardware Store Business 

Here are the steps to start a hardware store business. 

1. Determine The Target Market 

It is vital to carefully consider the location of your hardware store and the local community’s requirements. 

Are you targeting construction business owners, homeowners, or both? This anticipation will help you determine the type of products you need to carry and the price strategy you should adopt. 

For instance, if you target business contractors, you should delegate more specialized products, such as construction materials or industrial-grade tools. 

On the other hand, if you are targeting homeowners, they will heavily include them in DIY projects. This will ensure you keep equipment such as paint, electrical, and other tool supplies. 

Therefore, depending on the target market, your hardware business can have different segments depending on the business you will cater to. They are:

• Repair items. 
• Electrical.
• Agriculture.
• Tools. 

2. Decide To Open A Franchise Or Independent Store 

If you plan to start your own independent store, you can completely take control of the business. Here, you will be responsible for sourcing products, marketing, and setting up the store. 

Thus, this option needs a significant investment of money and time. But it also generates greater profit. 

You can also opt to open a hardware franchise to change that. This will require you to include partners with established hardware store brands and pay a franchise fee in exchange for using the company’s name, business model, and products. 

Therefore, one of the major benefits of a hardware shop franchise is that you get access to a proven business model and establish brand recognition, thereby making it easier to attract customers. 

3. Create A Business Plan 

A business plan is an important document that assists you in determining your objectives and goals, accessing the rival market, and creating your marketing and financial approaches. 

Therefore, your business plan should further include an executive summary, a description of your products and services, a financial plan, a marketing plan, and a market analysis. 

However, it is a good idea to conduct market research. This will help you understand your products’ market size and potential demands. 

In addition, the business plan will help you make informed decisions about the hardware business’s target market budget and efforts. 

4. Select A Legal Entity 

Selecting a business entity is another early step that you need to consider when opening a hardware store. 

Thus, it is critical because it creates an overall impact on both tax reductions and business debt. 

Therefore, when opening your hardware store, you can choose from a few business structures: a partnership, a limited liability company, or a sole proprietorship. 

Unlike a partnership or sole proprietorship. An LLC offers personal liability protection to avoid the risk of individual assets if anything happens to the company. 

The company’s name will be decided based on its nature. Thus, your business would require a signboard to indicate that people should visit. With Sign Makerz, you will get the best board and customizable services that fit your preferences. 

5. Choose Suppliers 

The supply chain is an important factor to consider prior to opening. This can also be conditioned on whether you are operating independently or in a franchise. 

Either way, organizing a productive stock needs to be a major focus. 

Furthermore, many constructors look for materials they plan to utilize throughout the construction project. This requires you to stock up your inventory so that clients do not face a shortage of materials. 

To ensure smooth logistics and manage stocks, contact a trustworthy vendor. 

6. Source Products 

When opening an independent hardware business, you need to determine the types of products you will carry and where you will source them.

Therefore, you can plan to work with distributors or wholesalers to obtain the best process for bulk purchases. 

Similarly, it is essential to offer a wide range of products to meet customers’ needs. However, be sure to emphasize high-quality items that will differentiate your hardware business from the rival market. 

In addition, you can also plan to offer exclusive discounts on branded items to attract customers. So, to make your store stand out, you need a good signboard that will make the store visible. Thus, you can create Custom Signs and design an attractive board for the store. 

7. Open A Business Bank Account 

When you have already registered for the trade license, separating the business expense from the personal one is vital. 

In order to do so, you need to open a new business bank account. Some banks might not allow you to use a personal account for business transactions. In this situation, it becomes crucial to have a business bank account. 

Unlike a personal savings account, a business account lets you manage your finances with a debit card. 

So, be mindful of the business bank accounts that may be quite strict regarding account balance and manage them regularly. 

8. Promote The Business 

Marketing strategies play a crucial role in the success of any business, including a hardware store. 

Thus, advertising in local publications can significantly increase the store’s visibility among the community, making more potential customers aware of its offerings. 

Similarly, creating a user-friendly and informative website is another vital strategy. It serves not only as a marketing tool but also to provide potential customers with necessary information about the products and services offered. 

In addition, networking with local contractors and businesses can help establish a referral system. This system potentially leads to repeat business and stronger community ties. 

Conclusion: Manage Your Store Successfully 

Thus, following the above-mentioned steps can help you get off the right foot with how to start a hardware store. But, if you want to open your store to be profitable, consider consistent fixtures in your business, as you need the right tools and processes in place. 

In addition, you need a robust system and tools to manage inventory, pricing, store operation, purchasing, and managing reports. 

So, consider the steps and initiate your business plan from today.

ADDITIONAL READING:

• How To Start An Event Planning Business?
• How To Start A Pest Control Business?
• How To Start A Handyman Business?

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Russia: Franchising in the largest country on Earth

Russia may win in terms of sheer land mass, but when it comes to franchising potential, the country’s story gets a little more complicated

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Russia may win in terms of sheer land mass, but when it comes to franchising potential, the country’s story gets a little more complicated.

Words by Kieran McLoone, deputy editor for Global Franchise

Politically, socially, and financially, Russia is often viewed as a literal world apart from what we’ve come to understand as western culture. This could be due to the fact that Russian culture and news isn’t widely publicized in the West, which extends to the current positioning of its burgeoning franchise industry.

You may be surprised, then, to learn that past its mysterious exterior, the Russian franchise industry isn’t just similar to what can be found in the West; it arguably borrows many lessons and best practices from the market, too.

A business behemoth

Before we dive deep into what franchisors and entrepreneurs can expect from Russia’s business landscape, it’s important to understand what kind of country we’re dealing with in the first place.

Russia is almost double the size of the U.S. and covers a whopping 17 million square kilometers, making it the largest country in the world. Russia is so large, in fact, that its surface area makes up one-eighth of the earth’s total. Across that vast expanse are around 144.5 million people, situated in several key cities around the country. The capital, Moscow, is home to roughly 12.7 million residents and is often regarded as one of the main franchise markets within Russia.

“You may be in demand and trendy in somewhere like the U.K., but because nobody knows you in Russia, it’s all about providing value”

To ignore Russia’s other large cities would be a mistake, however, and these include St. Petersburg (with around 5.5 million inhabitants), Novosibirsk (1.66 million), and Nizhniy Novogorod (1.25 million). In total, Russia has 12 cities with over one million inhabitants and a further 201 smaller cities that contain between 100,000 and one million people. As expected from a country so large, the on-paper opportunity for franchisors in Russia stretches as far as the eye can see – and then some.

Russia’s franchise industry was first established in the early 1990s, following the collapse of the Soviet Union. Despite the past decade seeing considerable instability in the Russian economy, the country’s franchise industry is estimated to be worth around $7.5bn, and consists of roughly 1,450 different franchise brands; with more than 50,000 individual franchisees operating in Russia.

65 per cent of brands within the country are of Russian origin, and of the remaining 35 per cent, nearly half of that figure is comprised of U.S. organizations.

The universal appeal of the golden arches

Many of the franchises currently operating in Russia could be considered relatively young, with 45 per cent having been established in the market for less than five years.

There are of course some notable outliers of this trend; namely, the brand that arguably started it all: McDonald’s. Known as the first major success story for franchising within Russia, McDonald’s was introduced after a partnership between the Moscow city government and the brand, which saw the government take a 49 per cent stake in the Russian entity. McDonald’s launch in January 1990 was something to behold and saw more than 30,000 people queuing around the block from 4:30 am to get their first taste of American fast food.

“The Russian market could be second to America – trust me”

Unlike other U.S. concepts that have come and gone since then, McDonald’s remains a popular investment choice in Russia and has seen exponential growth in the 30 years that it has operated. Just this year, in fact, the organization announced that it would open new locations in Russia’s far east in December 2020, in cities such as Khabarovsk and Vladivostok for the first time. With these openings, McDonald’s hopes to launch its 800th site in Russia; showcasing a true success story of a foreign brand within the country.

But proven success in the U.S., and even a wider international market, doesn’t always guarantee prosperity in Russia. Square burger favorite, Wendy’s, encountered this in 2014 when it announced that it would be closing all eight of its Russian locations. This announcement came only four years after Wendy’s first entered Russia, and at the time, the brand planned to open 180 locations throughout the country.

With the announcement of these closures, a spokesperson for Wendy’s told Bloomberg that its Russian franchisee “has not expressed interest in growing Wendy’s business in Russia, nor have they shown that they have the resources to successfully operate the existing restaurants on a long-term basis.”

Gary Chaglasyan, the World Franchise Associates’ Russian representative, emphasizes the need for caution, and not letting the success stories of brands like McDonald’s cloud strategic thinking: “A brand could be huge in your country, but in Russia, nobody knows about it. You may be in demand and trendy in somewhere like the U.K., but because nobody knows you in Russia, it’s all about providing value. Brands should definitely think about promotions and marketing before entering the Russian market.”

Local success story

So what kind of approach works well in the Russian market? If Wendy’s struggled to gain a foothold half a decade ago, what could the brand have done differently today to instead prosper and develop throughout the region? The answer can be found in a local Russian pizza chain, which has used this past decade to exponentially grow; both within Russia, and in 13 countries around the world.

“Some brands find that Moscow is too hard to crack with all the competition, so they start from some other regions”

Dodo Pizza was founded as a brick-and-mortar restaurant brand in 2011 and has since pivoted to being a delivery-first operation centralized by a proprietary tech platform called Dodo IS. With 550 locations in Russia and many more overseas, it’s something of a domestic success story and can provide some key insight into the Russian consumer mentality.

“Fyodor Ovchinnikov, the founder of Dodo Pizza, saw huge potential in the pizza market – in Russia and globally,” says Max Kotin, chief storyteller for the brand. “He wanted to revolutionize the way this business is managed by developing a proprietary cloud-based tech platform that would be deeply integrated with the brand’s managing system.

“There was also very little competition across Russia since Domino’s Pizza and Papa John’s focused their efforts on Moscow and left the rest of the country almost unattended. This allowed Fyodor to launch his first highly successful unit, scale the network fast through franchising, and use profits to reinvest them in the development of Dodo IS, Dodo’s tech platform that allowed the brand to achieve outstanding results in less than a decade.”

While some of the key differentiators offered by Dodo Pizza don’t seem exclusive to the Russian market, they serve as important reminders to international franchisors that nailing the basics can make all the difference when entering a new region: “Dodo developed a format that was better suited to the market with well-designed dine-in areas and more balanced mix of dine-in/ delivery operations,” explains Kotin. “Also, the brand’s radical transparency and commitment to the win-win principle in building partnerships attracted the most gifted and ambitious franchisees and suppliers; this also allowed us to connect our franchisees with investors and help them raise capital that would otherwise be hard to attain given the state of the financial market in Russia.”

The key takeaways from this take-away success story? Find a niche in the market, don’t be afraid to pivot to suit evolving trends, and make sure franchisee relationships are at the forefront of all ongoing strategies. Not exactly revelatory observations, but crucial pillars that some foreign brands seem to forget when attempting Russian growth.

Moscow or bust?

One of the other lessons that can be learned from the success of Dodo’s Pizza is that while Moscow is the capital of Russia and often regarded as its prime franchise market, incoming brands would do well to explore other areas as part of their national strategy.

“Previously, brands just focused on Moscow. Moscow and St. Petersburg were the main cities,” says Gary Chaglasyan. “Moscow is comparable to New York, and St. Petersburg is like California. The rest of the country was less developed a few years back, but now, all of the cities that have over one million inhabitants are nicely developed and can be approached with a good strategy.

“Some brands find that Moscow is too hard to crack with all the competition, so they start from some other regions. They slowly grow outside of Moscow, and then develop into the city. The reason brands tend to look at these main cities, though, is that they have better supply chains, distribution, and large markets.”

Fortune favors the prepared

Give or take a few high-profile failures, franchising in Russia may seem a surefire way to develop your brand. After all, household names like McDonald’s, Subway, and Burger King reportedly open around 70 to 100 new locations in the country every year, and the proven growth in both international and domestic tourism means that brand awareness is organic and reliable.

As it turns out, though, there’s one main barrier to entry when it comes to Russian franchising: the economy. And while this can be a challenge in every single country a franchisor may try to penetrate, there’s some unique problems presented by Russia’s unpredictable and volatile financial situation.

“The main problem is exchange rates, which are a huge issue that stop a lot of brands from entering Russia,” says Chaglasyan. “Brands are usually western, based in the U.S. or Europe, and all of their fees are in USD or Euro. Many of them have their own products which aren’t manufactured in Russia, so they need to import them from their own suppliers overseas. Due to that, they need to pay shipping and transport fees, which increase prices.

“What’s worse is that you’re working in Russia so it’s based on rubles. Just this year, the ruble fell down by 20 per cent. Over the last four years, that was almost 50 per cent. But we still have to pay the USD figure for royalties; the spending power here went down, but the cost to work with brands doubled.”

Baskin-Robbins was faced with high import fees when it first attempted Russia in 1988, as it found that Russian sources of supply didn’t meet its high standards. As a result, the ice-cream franchisor built its own $30m factory in Moscow’s Ostankino district in 1996, which produced 70 tons of ice-cream every day upon opening. This was certainly a solution, but not necessarily one that smaller brands could enact at a moment’s notice.

Overcome these issues, however, and Russia can be a fertile market for the right brand to mop up swathes of customers, who are hungry for international concepts and their best practices.

While franchising is still a relatively new concept to Russia, there’s starting to become a national understanding of the model’s benefits. Case in point: in the first four years of franchising in Russia, 42 brands opened in the country, which is approximately 10 new concepts per year. By 2018, this number had increased by more than 50 times. By 2030? Russia could become a world contender on the franchise stage.

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