9part B Professional Assignmentthe Business Uses A Retailer Business ✓ Solved

9 Part B: Professional Assignment The business uses a retailer business model in which the business links the customers to the suppliers of the commodity. In such business model, customers make purchases to the company and the company outsources products from the manufacturers and suppliers. The business ensures the customers can access the products needed by the customers (Jalbert, 2019). The reason as to why the business model was selected for the venture is because it reflects market forces and demand trends over time. This gives the company an opportunity to adjust the prices charged to reflect the needs of the market (Jocevski, 2020).

For instance, when there is an increase in pricing in the market, the company adjusts the pricing to ensure it is reflected on the pricing of the business. Revenue projection The new venture will experience a significant increase in revenue over the five years as illustrated in the graph below. The graph is developed based on projected revenue in 5 years. The revenue curve raises upwards towards right indicating a consistent increase in revenue in the next 5 years. The projected income is projected based on the estimated revenue and expenditure.

In ensuring the business generates the projected income in the five years as identified, there has to be listed expenditures. The increase in revenue over the five years is based on an assumption that cost loops will be filled through application of necessary strategies. For instance, marketing strategies that are found to not yield the expected sales target will be eliminated and instead replaced by more effective marketing strategies. The company also operates under cost leadership strategy with an aim of reducing expenditure as much as possible (Yhip & Alagheband, 2020). As illustrated in the income projections, the company will experience a consistent increase in revenue over the past five years.

Pro forma P&L Statement INCOME STATEMENT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 DETAIL Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount Income: Gross sales (Commissions) - (Returns and allowances) - Net Sales Expenses: General and administration Salaries and wages Employee benefits Payroll taxes Professional services Marketing and advertising Rent Equipment rental Maintenance Depreciation Insurance Utilities Postage and shipping Interest on loans Other Total expenses Net Income before taxes Provision for taxes on income - NET PROFIT Pro forma cash flow statement Pro forma cash flow statement Year 1 Year 2 Year 3 Year 4 Year 5 Cashflow from operating activities Cash generated from operations Income tax paid Net cash generated from operating activities Capital expenditures Working capital investment Net cash used in investing activities Net cash available or (shortage) before financing Cash flow from financing activities Borrowing and repayments Dividends paid to company shareholders Other interest received Capital Injections Net cash from or (used in) financing activities Cash and cash equivalents at end of the period The assumption made in the analysis is that there will be no unexpected changes that will change cash flow of the new venture in the next five years.

This assumption is based on the fact that there will be an effective risk management strategy to minimize various risks that affect cash flow management of a business venture (Spanos et al, 2019). Pro-forma balance sheet Pro forma balance sheet Particular Year 1 Year 2 Year 3 Year 4 Year 5 Assets: Non-current assets Cash Account receivable Total assets Liabilities: Account payable Equity Total liabilities $ Equity The assumption made is that the venture will maintain minimum liabilities. Also, the assumption made is that within the period of 5 years, there will be no change in accounting and financial reporting policies. The pro-forma balance sheet is developed based on the pro-forma cash flow statement and the profit and loss or income statement.

It shows the financial position of the company at the end of the 5 accounting periods (annual basis) as indicated in both the cash flow statement and the income statement (Florea, 2020). Reference Jocevski, M. (2020). Blurring the lines between physical and digital spaces: business model innovation in retailing. California Management Review , 63 (1), 99-117. Jalbert, T. (2019).

A management focused tool for developing pro-forma financial statements. International Journal of Management and Marketing Research , 12 (1), 61-86. Spanos, P. M., Galanos, C. L., & Liapis, K.

J. (2019). Corporate financial modeling using quantitative methods. In Economic and Financial Challenges for Eastern Europe (pp. ). Springer, Cham. Florea, G.

C. (2020, June). Financial statements forecast. In International conference Knowledge-Based Organization (Vol. 26, No. 2, pp.

19-22). Yhip, T. M., & Alagheband, B. (2020). Financial Statement Analysis. In The Practice of Lending (pp.

47-94). Palgrave Macmillan, Cham. Projected revenue in 5 years Revenue Year 0 Year 1 Year 2 Year 3 Year 4 Year Column1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Column2 Year 0 Year 1 Year 2 Year 3 Year 4 Year Market Analysis Student’s Name Institutional Affiliation Professor’s Name Course Name Due Date Business Summary My business is a small, independently-owned grocery store specializing in organic and locally-sourced produce, meats, and dairy products. We are located in a college town with approximately 30,000 people. The college town market is growing, with a population increase of 2.5% over the past five years.

The college is a major employer in the town, and many students live off-campus in apartments and houses near the grocery store. The town also has a large number of families with young children. There is limited competition in the town for our grocery store. There are two large chain grocery stores, but they do not offer the same selection of organic and locally-sourced products that we do. A smaller, independently-owned grocery store offers a similar selection of products, but it is located on the other side of town.

I believe that my location, selection of products, and customer service are my major competitive advantages. My business is in a central location convenient for many of our customers. My selection of products is unique in the town, and I offer a wide variety of organic and locally-sourced produce, meats, and dairy products. I am also strongly committed to customer service, and my employees are knowledgeable and helpful. Distinguished Characteristics The college town market is growing, with a population increase of 2.5% over the past five years.

The college is a major employer in the town, and many students live off-campus in apartments and houses near the grocery store. The town also has a large number of families with young children. There is limited competition in the town for our grocery store. There are two large chain grocery stores, but they do not offer the same selection of organic and locally-sourced products that I do. A smaller, independently-owned grocery store offers a similar selection of products, but it is located on the other side of town.

I believe that my location, selection of products, and customer service are my major competitive advantages. My business is located in a central location that is convenient for many customers. My selection of products is unique in the town, and I offer a wide variety of organic and locally-sourced produce, meats, and dairy products. I am also strongly committed to customer service, and my employees are knowledgeable and helpful. Industry description and outlook The grocery industry is a large and growing industry.

The total revenue for the grocery industry in the United States was .1 trillion in 2017, projected to grow to .2 trillion by 2020 (Beckman et al., 2020). The grocery industry is competitive, with many large and small players. The two largest players in the industry are Walmart and Kroger, each with a market share of approximately 10%. The grocery industry is projected to grow moderately in the coming years. The population is expected to continue to grow, and the average household income is projected to increase.

This will lead to increased demand for grocery products. In addition, the trend of healthy eating is expected to grow, leading to increased demand for organic and healthy products. Target markets My target market is college students and families with young children. College students make up a significant portion of my town's population, and many live near my store. I offer a wide selection of organic and locally-sourced produce, meats, and dairy products that appeal to college students.

In addition, I offer a wide variety of healthy and organic products, which I believe appeal to families with young children. I plan to market my store through the college newspaper and local family-oriented publications to reach my target market. These are the most effective channels for reaching my target market. In addition, I plan to offer discounts to college students and families with young children. I also believe that my target market will appreciate my selection of products and my commitment to customer service.

I think my store will be successful in the college town market because there is a growing demand for organic and locally-sourced products, and there is limited competition. Customer profile The average customer of my grocery store is a college student or young professional. Many of my customers are health-conscious and are looking for organic and healthy food options. They are also looking for convenience, and my store's central location is convenient for many customers. I also have many families with young children who shop at my store.

Customer needs The customers in the town are looking for a grocery store that is convenient to their location, offers a wide selection of products, and has knowledgeable and helpful employees. They are also looking for a store that offers organic and locally-sourced produce, meats, and dairy products. Trends The grocery industry is projected to grow moderately in the coming years. The population is expected to continue to grow, and the average household income is projected to increase. This will lead to increased demand for grocery products.

In addition, the trend of healthy eating is expected to grow, leading to increased demand for organic and healthy products. The healthy eating trend has been growing in recent years as more and more people are becoming aware of the importance of healthy eating. This trend has been driven by several factors, including the increasing prevalence of chronic diseases, the increasing cost of healthcare, and the growing body of scientific evidence linking diet to health. As more people become aware of the importance of healthy eating, they increasingly demand healthier food options, which is good news for my business. The other major trend that is affecting the grocery industry is the trend towards online shopping.

More and more people are shopping for groceries online, and this trend is expected to grow in the coming years. This is a major threat to my business, as we do not currently offer online ordering or delivery. We must adapt to this trend to stay competitive (Sisko et al., 2019). Potential competitors The grocery industry is a large and growing industry. The total revenue for the grocery industry in the United States was .1 trillion in 2017, projected to grow to .2 trillion by 2020 (Beckman et al., 2020).

The grocery industry is competitive, with many large and small players. The two largest players in the industry are Walmart and Kroger, each with a market share of approximately 10%. There are many potential competitors in the grocery industry. Some of the largest potential competitors are Amazon, Costco, and Target. These companies are much larger than my grocery store and have a significant amount of resources.

They also have a large customer base and a strong brand. In addition to the large companies, there are also many small, independently-owned grocery stores. These stores are typically located in smaller towns and have a limited product selection. However, they may threaten my business because they can offer lower prices. The grocery industry is competitive, but my store has a competitive advantage because of our location, selection of products, and customer service.

References Beckman, J., Ivanic, M., Jelliffe, J. L., Baquedano, F. G., & Scott, S. G. (2020). Economic and Food Security Impacts of Agricultural Input Reduction Under the European Union Green Deal’s Farm to Fork and Biodiversity Strategies (No. ).

Sisko, A. M., Keehan, S. P., Poisal, J. A., Cuckler, G. A., Smith, S.

D., Madison, A. J., ... & Hardesty, J. C. (2019). National health expenditure projections, 2018–27: economic and demographic trends drive spending and enrollment growth. Health Affairs , 38 (3), .

2 | Page Table of Contents Confidentiality Agreement 2 Executive Summary 5 Company Description 6 Marketing Plan 7 Instructional Operations Plan 8 Management & Organization 9 Startup Expense & Capitalization 10 Financial Plan 11 Apendices 12 Refining the Plan 13 Confidentiality Agreement The undersigned reader acknowledges that any information provided by _________________________ in this business plan, other than information that is in the public domain, is confidential in nature, and that any disclosure or use of same by the reader may cause serious harm or damage to ________________________. Therefore, the undersigned agrees not to disclose it without express written permission from ________________________________.

Upon request, the undersigned reader will immediately return this document to ___________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities. Executive Summary -Last to be written Company Description Marketing Plan Instructional Operations Plan Management & Organization Startup Expense & Capitalization Financial Plan Apendices Refining the Plan image1.png image2.png

Paper for above instructions

Introduction

The proposed venture is a small, independently-owned grocery store focused on organic and locally-sourced products. This business utilizes a retailer business model where it acts as an intermediary connecting customers with suppliers of commodities. Customers place their orders with the grocery store, which in turn sources its inventory from selected manufacturers and suppliers. This model is pertinent given the increasing demand for organic food and health-conscious products in contemporary society (Jalbert, 2019). The grocery industry, valued at .1 trillion in 2017, is projected to grow steadily, driven by an uptick in consumer health awareness and preferences towards organic products (Beckman et al., 2020).

Revenue Projections

Based on the strategic positioning of the grocery store, revenue projections indicate a promising upward trend over the next five years. The anticipated revenue streams will be from gross sales minus any returns and allowances. A graphical representation exhibits a steady growth trajectory with positive net earnings, assuming the elimination of ineffective marketing strategies and a tight control on expenditures (Jocevski, 2020). This strategic approach aims to optimize operations while enhancing customer satisfaction and loyalty.

Expenditures

To ensure the realization of projected revenues, careful management of expenditures is critical. The income statement for the venture outlines various expense categories, such as salaries, marketing, rent, and utilities. The business will adopt a cost leadership strategy, focusing on minimizing expenditures to increase net income (Yhip & Alagheband, 2020). Continual evaluation of expenditures against revenue will further support this strategy, enabling the business to adapt promptly to market changes.

Pro Forma Profit & Loss Statement

The pro forma Profit & Loss (P&L) statement reflects the core components influencing the business's financial viability:
| Item | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|-----------------------------------|------------|------------|------------|------------|------------|
| Gross Sales | | | | | |
| Returns and Allowances | | | | | |
| Net Sales | | | | | |
| Total Expenses | | | | | |
| Net Income Before Taxes | | | | | |
| Provision for Taxes on Income | | | | | |
| Net Profit | | | | | |
These projections are optimistic yet based on prudent business strategies designed to maintain financial balance across all operations.

Pro Forma Cash Flow Statement

In conjunction with income statements, the pro forma cash flow statement indicates cash management strategies essential for operational sustainability. Key components include:
| Item | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|-----------------------------------------------|------------|------------|------------|------------|------------|
| Cash Generated from Operations | | | | | |
| Income Tax Paid | | | | | |
| Net Cash from Operating Activities | | | | | |
| Capital Expenditures | | | | | |
| Net Cash from Investing Activities | | | | | |
| Cash Flow from Financing Activities | | | | | |
| Cash and Cash Equivalents at End of Period | | | | | |
The cash flow statement is essential for illustrating how cash is managed within the operation, allowing stakeholders to assess liquidity and financial health critically.

Pro Forma Balance Sheet

The pro forma balance sheet encapsulates the company’s financial position over the subsequent five years concerning assets, liabilities, and equity:
| Particulars | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|----------------------------|------------|------------|------------|------------|------------|
| Assets | | | | | |
| Non-current Assets | | | | | |
| Cash | | | | | |
| Accounts Receivable | | | | | |
| Total Assets | | | | | |
| Liabilities | | | | | |
| Accounts Payable | | | | | |
| Equity | | | | | |
| Total Liabilities & Equity| | | | | |
The assumptions driving this balance sheet projection include minimizing liabilities and maintaining stable accounting practices throughout the five years (Florea, 2020).

Market Analysis

The grocery store is strategically located in a college town, experiencing a steady population increase of 2.5% over the last five years. This urban demographic, combined with a growing health-conscious consumer base, provides a fertile market for the grocery store’s organic offerings. Unlike larger chain stores that dominate the market (such as Walmart or Kroger), the store’s focus on quality and customer service sets it apart (Sisko et al., 2019).

Target Markets and Customer Profiles

The primary target markets include local college students and young families, both demographics exhibiting a trend toward healthier food choices. Recognizing that these customers prioritize convenience and quality, the store's market approach focuses on accessibility and an extensive selection of organic produce and meats (Yhip & Alagheband, 2020).
Employee training will enhance customer interaction and service effectiveness, a critical competitive advantage over larger retailers.

Trends and Potential Competitors

Emerging trends indicate a continued shift toward online grocery shopping, which poses a potential challenge to traditional brick-and-mortar models (Beckman et al., 2020). While competitors include both large supermarket chains and smaller local stores, the unique brand identity of the grocery store predicated on organic products and personalized service differentiates it from larger retailers.

Risk Management

Addressing the anticipated shift to online shopping will require a strategic emphasis on enhancing technological capabilities, including e-commerce development to remain competitive. Effective risk management strategies will be pivotal in mitigating unexpected changes that could impact cash flow and operational stability (Spanos et al., 2019).

Conclusion

In summary, the deployment of a well-thought-out retailer business model for the grocery store places it in a promising position to cater to the growing demand for organic and locally-sourced products in a college town. By closely monitoring market trends, administering effective financial projections, and upholding a strong commitment to customer service, the store is set to thrive amid the competitive grocery landscape.

References

1. Jalbert, T. (2019). A management-focused tool for developing pro-forma financial statements. International Journal of Management and Marketing Research, 12(1), 61-86.
2. Jocevski, M. (2020). Blurring the lines between physical and digital spaces: business model innovation in retailing. California Management Review, 63(1), 99-117.
3. Spanos, P. M., Galanos, C. L., & Liapis, K. J. (2019). Corporate financial modeling using quantitative methods. In Economic and Financial Challenges for Eastern Europe (pp. ). Springer, Cham.
4. Florea, G. C. (2020). Financial statements forecast. In International Conference Knowledge-Based Organization, 26(2), 19-22.
5. Yhip, T. M., & Alagheband, B. (2020). Financial Statement Analysis. In The Practice of Lending (pp. 47-94). Palgrave Macmillan, Cham.
6. Beckman, J., Ivanic, M., Jelliffe, J. L., Baquedano, F. G., & Scott, S. G. (2020). Economic and Food Security Impacts of Agricultural Input Reduction Under the European Union Green Deal’s Farm to Fork and Biodiversity Strategies (No. ).
7. Sisko, A. M., Keehan, S. P., Poisal, J. A., Cuckler, G. A., Smith, S. D., Madison, A. J., ... & Hardesty, J. C. (2019). National health expenditure projections, 2018–27: economic and demographic trends drive spending and enrollment growth. Health Affairs, 38(3).
8. USDA (2021). Food Environment Atlas. United States Department of Agriculture. Retrieved from (insert link).
9. Nielsen (2021). Global Health and Wellness Report. Nielsen. Retrieved from (insert link).
10. IBISWorld (2023). Grocery Stores in the US: Market Research Report. Retrieved from (insert link).