electrical hardware business plan

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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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Starting Hardware Store Business Plan (PDF)

Starting a hardware store business is an incredibly lucrative venture, boasting robust profit margins and a constant demand for its products and services. As the backbone of any community’s building and repair needs, hardware stores serve as essential hubs where customers can find a wide range of tools, construction materials, and home improvement supplies. These stores are more than just places to purchase tools, supplies, and building materials—they are hubs of knowledge, expertise, and essential resources for homeowners, contractors, and DIY enthusiasts alike. In an era of rapid urban development and increasing home renovation projects, the hardware store industry remains resilient and holds significant growth potential.

It is projected that the 21 st century will continue to be characterized by concerted construction activities. That stems, in part, from the projected increase in the global population. Plus, regions that have had mostly archaic infrastructure are being upgraded. Governments and the private sector are stepping up property and infrastructure development projects. Overall, residential, commercial, and industrial domains are experiencing a construction boom. For instance, the most sought-after materials right now are concrete, steel, and wood. All these dynamics are creating a huge market for hardware supplies. Thus starting a hardware retail store is bound to be lucrative owing to the ever-expanding market.  This article will outline how to start the hardware store business, and the hardware store business plan – PDF, Word and Excel.

Market Research

Carrying out market research is essential before starting the hardware store business. Market research involves identifying a market for hardware products and services, including important measurable characteristics. Seek to find out the market size for hardware products and services. Whilst doing that find out the popular products or services being offered. Check out up to date hardware industry statistics to help you in those regards. There are usually major players already operating and you should study them. Find out what kind of hardware products and services they offer. Find out about the market shares they own and control. Take time to also evaluate their customer dynamics. All this will help you zone in on a strategic target market. That is why the other area to look into is consumer attributes. What are the general hardware buying habits of consumers in your intended target market? What do they buy, how often, and how much do they spend on average? What are their source of incomes and their average incomes? Whilst you can get ready-made reports on these details, it would be wise to also conduct surveys yourself. You can unearth more details this way. By putting all these together you get a comprehensive understanding of the market. You should ensure that you have a hardware business plan before you venture into this business.

Location And Premises for a Hardware Store

A significant percentage of the demand for hardware products and services stems from the construction industry. So you can identify a location at or near a steadily growing residential area where people are at various stages of constructing their houses. It isn’t enough to only look at the steady growth of such areas alone. These must be people who generally have substantial income levels such that they can afford to buy your products. So that shouldn’t be overlooked because you might regret it later if you don’t find out about it prior.

Your location must be spacious enough to have parking space that adequately accommodates any type of vehicle i.e. for customers and suppliers. The interior of the hardware complex will also have to be spacious with products well arranged in a way that optimizes customers’ buying experience. The road network surrounding or leading to the complex must be well networked and in good shape to promote ease of access for both vehicles and those walking in on foot. Your hardware store business plan should take into account the cost of purchasing or renting premises.

Permits/Licenses, Insurance & Business Bank Account

It depends on where you will be operating from but a hardware store business has to be licensed. In most cases it starts from the basic business or company registration that is mandatory. Then you will usually need a hardware store license. You will also have to be registered with the applicable revenue authority for tax purposes. Other types of permits or licenses might be needed depending on the nature of the hardware products or services you deal with. There are countless risk factors associated with running a hardware store. Your hardware store would need insurance cover for at least general liability, property, crime, and workers. You can get more comprehensive details from reputable insurance providers. In addition to all this you must open a business bank account for your hardware store. Desist from using your personal bank account for your hardware store operations. Having a dedicated business bank account streamlines taxation and bookkeeping. It also presents an authentic brand image. It shields you from business debt liability thus protecting your personal assets. In cases where you need to apply for funding it increases your chances of being considered. Costs of insurance and licenses should be included in your hardware store business plan.

Products for a Hardware Store Business

There’s a very broad range of hardware products that you can sell in your hardware store. Some of the broad categories are agricultural implements, tool sets, protective clothing, building materials, electrical items, plumbing supplies, ironwork materials. So the range of products you can sell is quite diverse e.g. cement, bricks, paint, steel rods (or bars), pipes, adhesives, timber products, door frames, window frames ceramics, various kinds of associated accessories, water reservoirs, glassware, safety shoes, nuts, bolts, nails, screws, work suits, various assortments of hand tools and so on.

Your product range can start relatively small and grow as you add more products informed by recurring customer needs. Earlier we discussed about doing market research because it greatly helps you in knowing what to put in stock. Obviously your hardware store business plan should include money for purchasing the hardware products. Usually as a business person you might be having financial challenges to startup the business so it would be important to know what’s in demand and start off with that.

Inventory Management

Inventory management (or inventory control) refers to the recording and tracking of hardware stock in your store.  Proper inventory management is key to having a profitable hardware store business. The goal is to maintain an optimum number or amount of all inventory items. You should be able to have in stock what a customer seeks. You should be able to detect in good time hardware items that need to be replenished. If this is not properly done it leads to disruptions in sales thus negatively affecting the profitability of your hardware store business. In this day and age you are better off using inventory management software than using manual approaches. The ideal setup is to have an electronic point of sale system or software (EPOS) for your hardware store business. An EPOS with an integrated inventory management function is the best.

Business Model

The business model is the fundamental framework that outlines how a hardware store operates, generates revenue, and creates value for its customers. In the hardware store industry, the most common business model involves the sale of a wide range of tools, building materials, hardware, and related products to both individual consumers and contractors. This model often relies on maintaining an extensive inventory of products to meet the diverse needs of customers. Revenue is primarily generated through the sale of these products, with profit margins varying based on the type of items sold.

To enhance profitability, hardware stores often adopt a mix of strategies. They may offer additional services such as tool rental, key cutting, paint mixing, or even repair services for certain tools and equipment. These supplementary services not only generate additional income but also create a more comprehensive customer experience, making the store a one-stop destination for various hardware-related needs.

In recent years, hardware stores have also embraced digital transformation by establishing an online presence. This allows customers to browse products, check inventory, and place orders online, which can significantly expand the store’s reach and customer base. Some hardware stores may also explore e-commerce as a complementary revenue stream, allowing them to tap into a broader market beyond their physical location. Overall, the hardware store business model continues to evolve to meet the changing needs and preferences of customers while remaining grounded in providing essential products and services for home improvement and construction projects.

Competitive Analysis

Competitive analysis is the assessment of the differences between your hardware store’s performance and that of its competitors. The goal is to detect and examine the factors that cause those differences. In essence you are studying your competition in order to outsmart them. What you unearth from competitive analysis informs your business strategy. Identify who your competitors are and segment them e.g. primary (major focus), secondary, and tertiary. Assess their place or stake in the market. Then do a comparison of what they offer and what you intend to offer. When doing competitive analysis for your hardware store business, you are not just assimilating information. The thrust is to identify market gaps which will be the openings you need. Lacking in skillsets and experience on the current players can be a market gap. You will also get to notice some outstanding pain points consumers still struggle with. Maybe there could be a hardware niche or niches that are underserved – those are market gaps. Regulatory and legislative aspects can also provide insights into market gaps. The marks of a well done competitive analysis will be you identifying market gaps.

Staff And Management

The effective running of a hardware business requires a significant workforce. As a rule of thumb staffing needs are always informed by your intended scale of operations. Some of the key areas in this business are operations management, supply chain management, financial management and inventory management. You’ll need cashiers/till operators, general hands, supervisors, shop attendants and customer attendants as some of the vital components of your operations management team.

The operations team will be central to overseeing the supply chain and inventory management aspects. You must understand that smooth flow of a hardware store business entails consistent monitoring and evaluation of stocks. There’s also a need for a seamless framework for timeous sourcing and receipt of stock from suppliers. Financial accounting is critically important for a hardware business so as to empirically keep track of all transactions.

A hardware shop business also draws more customers when it offers delivery services. Having marketing agents is also strategic because marketing needs serious attention in light of the existence of competitors. As you can see, synching and optimizing all these components together requires a strong and dedicated team. The top management will, depending on scale of operations, constitute of either qualified hired personnel or family members. The hardware business plan should include provisions of salaries for all your workforce.

The major causes of failure of hardware stores include poor financial management resulting in losses. No wonder financial accounting must be thoroughly done when running this business. It’s also encouraged that you conduct stock takes regularly, an exercise that’ll feed into your financial management efforts.

Marketing Plan

Digital marketing must be your biggest focus. Get a website developed for the business to have brand visibility online. Buttress this by setting up active social media accounts on Facebook, LinkedIn, WhatsApp, Instagram and Twitter. Leverage on those platforms’ features such as stories, reels, and status updates to daily send out brand awareness content. Take advantage of print (e.g. fliers, posters, banners) and digital (e.g. e-fliers) media for brand awareness. Aim at exhibiting or being at strategic events such as trade fairs, expos, and the like. Explore options to get featured in strategic publications such as blogs, newspapers, podcasts, radio shows, and so on. Come up with promotionals e.g. discounts. Institute a customer loyalty programme which will be instrumental in boosting word of mouth marketing. Engage social media influencers to tap into large pools of potential customers. Overall, strive to devote at least 5 percent of your revenue towards marketing initiatives. The hardware store business plan should include a proper marketing plan for your business.

Market for Hardware Products

There are several customer sources for a hardware shop. These include building and construction (both new constructing projects and renovations), Do It Yourself (DIY) projects, agriculture industry, electrical and plumbing projects, and maintenance work. Property owners carry out renovations, upgrades, repairs on their properties, and to do that they need hardware products.  Other potential customers for a hardware store business include construction companies, organisations, housing cooperatives, schools, private companies, individuals, farmers and the government.

Keys To Profitability

Starting a hardware store business can be a lucrative venture, but like any other business, success depends on various factors. To ensure profitability in your hardware store, it’s crucial to focus on a few key strategies. First and foremost, effective inventory management is essential. Maintaining the right balance of products, avoiding overstocking or understocking, and regularly reviewing your inventory can help reduce carrying costs and increase your bottom line. Additionally, understanding your target market and offering products that cater to their specific needs and preferences can set you apart from the competition and boost sales. Diversifying your product range is essential. Offering a diverse selection of products, including traditional hardware items, seasonal products, tools, gardening supplies, and home improvement materials, can attract a broader customer base and increase sales opportunities throughout the year. Cost control is another crucial aspect of profitability. Carefully monitor expenses and overhead costs, and regularly review your financial statements to identify areas where you can cut unnecessary spending. Negotiating favorable terms with suppliers, considering bulk purchasing for commonly sold items, can help you secure better pricing on products, increasing your profit margins.

An efficient store layout and visual merchandising are critical. Creating an organized and visually appealing store layout that makes it easy for customers to find what they need can encourage impulse purchases and boost overall sales. Proper signage and strategic product placement can further enhance the shopping experience. Provide exceptional customer service. Customers often return to stores where they receive personalized assistance, expert advice, and a pleasant shopping experience. Well-trained and knowledgeable staff can make a significant difference in customer satisfaction and loyalty. Embracing technology and modernizing your hardware store operations can contribute to profitability. Implementing point-of-sale systems, inventory management software, and an online presence can streamline processes, improve efficiency, and attract a wider customer base. Marketing and promotion are indispensable for drawing customers to your hardware store. Utilize a combination of traditional advertising methods, such as local newspapers and flyers, along with digital marketing techniques like social media, email campaigns, and a user-friendly website. Offering promotions, discounts, and loyalty programs can incentivize repeat business and increase revenue.

Advantages Of A Hardware Store Business

Starting a hardware store business offers several compelling advantages that make it a promising venture in the retail industry. First and foremost, hardware stores benefit from a steady and consistent demand for their products. Whether it’s for routine home maintenance, DIY projects, renovations, or construction work, people rely on hardware stores year-round, providing a reliable customer base that can help stabilize your store’s revenue over time. Providing excellent customer service and a well-stocked inventory can lead to repeat business. Many customers return to hardware stores for ongoing projects, maintenance, or additional supplies. Building a loyal customer base can contribute significantly to long-term success.

Another significant advantage is the diverse product range that hardware stores typically offer. From basic tools and fasteners to power equipment and building materials, these establishments cater to a broad spectrum of customers, including homeowners, contractors, do-it-yourself enthusiasts, and hobbyists. This diversity not only broadens your customer base but also increases sales opportunities, as customers often find a wide array of products under one roof, making their shopping experience more convenient. The business is also very profitable. While individual items may have lower profit margins, hardware stores often make up for it through the volume of sales. High inventory turnover and a consistent flow of customers results in healthy overall profit margins.

Additionally, hardware stores tend to be recession-resistant businesses. During economic downturns, people often prioritize home maintenance and smaller-scale improvement projects, rather than undertaking major renovations or new construction. This inclination toward more modest projects can lead to increased sales for hardware stores, making them relatively resilient in challenging economic times. This stability is a compelling advantage for entrepreneurs looking to invest in a business with long-term sustainability.

Why You Need A Hardware Store Business Plan

A business plan is instrumental in helping you comprehend the profitability of your hardware store business by providing a detailed financial analysis. It outlines the expected revenue streams, including sales projections, pricing strategies, and market demand analysis. Moreover, it delves into the various factors that impact profitability, such as operational costs, volumes sold and markup margins. By quantifying these variables and examining their interplay within the plan, you can gain a comprehensive understanding of the financial landscape, enabling you to make informed decisions, identify potential areas for cost optimization, and ultimately enhance the profitability of your hardware store.

A business plan is also an essential tool for securing funding for your hardware store business. It serves as a detailed blueprint that demonstrates your business’s viability, growth potential, and financial projections to potential investors, lenders, or partners. A well-structured business plan showcases your understanding of the market, competition, and target audience, instilling confidence in financiers about the soundness of your venture. It provides a clear roadmap for how you intend to utilize the funding and achieve your business objectives, giving investors assurance that their investment will be wisely used. In essence, a business plan is your persuasive document that not only attracts financial support but also establishes a sense of trust and credibility, making it a vital tool in securing the funding needed to launch or expand your hardware store.

A comprehensive hardware store business plan is an indispensable asset for those embarking on or expanding their hardware store ventures. It provides clarity of vision, enabling you to define your store’s mission, vision, and objectives clearly. Articulating your business’s purpose and outlining your goals ensures that you and your team are on the same page, working towards a common vision. It also serves as a strategic roadmap, delineating the strategies and tactics essential for your hardware store’s growth and development. This roadmap helps in making informed decisions and acts as a reference point for measuring progress and making necessary adjustments in a dynamic market landscape.

Pre-Written Hardware Store Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements

For an in-depth analysis of the hardware store business, we encourage you to purchase our well-researched and comprehensive hardware business plan. We introduced the business plans after discovering that many were venturing into the hardware business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.

The StartupBiz Global hardware shop business plan will make it easier for you to launch and run your hardware store business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the hardware business.

Uses of the Hardware Business Plan (PDF, Word And Excel)

The hardware shop business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your hardware retail business
• As a hardware store business proposal
• Assessing profitability of the hardware business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the Hardware Store Business Plan (PDF, Word And Excel)

The hardware business plan include, but not limited to:

• Industry Analysis
• Marketing Strategy
• Market Analysis
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in the hardware business fail, so that you can avoid their mistakes
• Ways to raise capital to start your hardware store business

The hardware business plan package consists of 4 files

• Hardware Store Business Plan – PDF file (Comprehensive Version – 70 Pages)
• Hardware Shop Business Plan – Editable Word File (Comprehensive Version – 70 Pages)
• Hardware Store Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 44 pages)
• Hardware Store Business Plan Automated Financial Statements – (Editable Excel File)

The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the percentage markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

Click below to download the Contents Page of the Hardware Store Business Plan (PDF)

Testimonial 1

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Testimonial 5

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Get the Hardware Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your hardware store business! Check out our collection of business plans  , and more business ideas .

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Table of contents, strategies for a successful hardware store business plan.

• 29 March, 2024

Starting a Hardware Business: An Overview

Before diving into the intricacies of creating a business plan for a hardware store, it’s essential to have a comprehensive understanding of the hardware industry and consider key factors that are crucial for hardware store owners.

Understanding the Hardware Industry

The hardware retail industry is a significant sector within the retail market, valued at approximately $220 billion per year, with products alone estimated at $120 billion ( Mountain Mojo Group ). This industry experienced substantial growth during the first half of 2021, becoming the second-fastest growing sector among retailers. This trend was driven by the increased focus on home living spaces during the COVID-19 pandemic ( Mountain Mojo Group ).

In 2020, total sales in US hardware stores reached approximately $60 billion, marking a substantial increase of nearly $10 billion from 2019. This growth was further exemplified by the surge in online spending at Ace Hardware stores, which saw a remarkable 647% increase between January and May 2020 ( Mountain Mojo Group ).

Looking ahead, the hardware retail industry in the US is projected to reach a value of $303 billion by 2026, with a compound annual growth rate (CAGR) of 4.9% from 2021 to 2026 ( Growrk ). This growth can be attributed to factors such as the DIY (Do It Yourself) trend, home improvement projects, gardening, and the rebounding housing market. As consumers continue to invest in home maintenance and renovation projects, the hardware store industry is expected to maintain a stable growth rate ( OSUM ).

Key Considerations for Hardware Store Owners

When starting a hardware business, there are several key considerations that store owners should keep in mind:

Market Research : Conduct thorough market research to identify potential opportunities, target markets, and customer segments. Understanding the needs and preferences of your target audience will help you tailor your offerings and marketing strategies accordingly.

Location : Selecting the right location for your hardware store is crucial. Consider factors such as accessibility, proximity to your target market, competition, and the overall business environment in the chosen area.

Product Selection : Determine the range of products you will offer in your hardware store. Consider stocking a variety of tools, building materials, home improvement supplies, gardening equipment, and other hardware-related items based on the needs of your target market.

Competitive Analysis : Conduct a thorough analysis of your competitors in the hardware industry. Identify their strengths, weaknesses, pricing strategies, and customer service approaches. This analysis will help you differentiate your business and develop unique selling propositions.

Supplier Relationships : Establish strong relationships with reliable suppliers to ensure a consistent and diverse product inventory. Negotiate favorable terms, such as competitive pricing and timely delivery, to maintain an edge in the market.

Customer Service : Provide exceptional customer service to build customer loyalty and differentiate your store from competitors. Train your staff to offer knowledgeable assistance, answer customer inquiries, and provide guidance in selecting the right products.

By understanding the hardware industry landscape and considering these key factors, aspiring hardware store owners can lay a solid foundation for their business.

Creating a Hardware Store Business Plan

A well-crafted business plan is essential for anyone looking to start a hardware store. It serves as a roadmap for success, outlining the objectives, strategies, and financial projections for the business. In this section, we will explore the importance of a business plan, the essential components it should include, and the financial projections necessary for a hardware store business plan.

Importance of a Business Plan

A business plan is a crucial document that outlines the vision and goals of your hardware store. It provides a clear roadmap for the future, helping you stay focused and make informed decisions. A well-written business plan can also be instrumental in attracting investors, securing loans, and demonstrating the viability and profitability of your hardware store.

By outlining your business objectives, target market, competition analysis, marketing strategies, and financial projections, a business plan serves as a comprehensive guide for managing and growing your hardware store business. It helps to identify potential challenges and opportunities, enabling you to proactively address them.

Essential Components of a Hardware Store Business Plan

To create a comprehensive business plan for your hardware store, certain essential components should be included. These components provide a holistic view of your business and help stakeholders understand your objectives and strategies. Here are some key components to consider:

Executive Summary : This section provides an overview of your hardware store business, highlighting the main points of your plan, including your mission, vision, and goals.

Company Description : Describe your hardware store, its location, key features, and unique selling proposition. Include information about the products you plan to offer and your target market.

Market Analysis : Conduct a thorough analysis of the hardware industry, evaluating the market size, trends, and customer needs. Identify your target market and perform a competition analysis to understand your competitors’ strengths and weaknesses.

Marketing and Sales Strategies : Outline your marketing and sales strategies to attract customers and drive sales. Include details about your online presence, effective marketing channels, and customer relationship management strategies.

Store Setup and Operations : Describe the layout and design of your hardware store to create an inviting and organized space for customers. Discuss staffing and training requirements to ensure efficient operations. Additionally, outline your inventory management strategies to maintain adequate stock levels and minimize costs.

Financial Projections : Financial projections are vital for assessing the feasibility of your hardware store business plan. Include sales forecasts, cost of goods sold, operating expenses, capital expenditure, and details of financing activities. These projections should cover a period of three to five years to provide a comprehensive overview of the expected financial performance of your hardware store.

For a detailed guide on financial projections, you can refer to our article on financial projections for hardware stores .

Financial Projections for a Hardware Store Business Plan

Accurate financial projections are crucial for assessing the feasibility of your hardware store business plan, attracting investors, securing loans, and maintaining the financial health of your business. These projections should cover a period of three to five years and provide a detailed overview of your expected revenue, costs, profitability, and cash flow.

To create accurate financial projections, it is advisable to use software tools such as accounting software or dedicated financial planning software. These tools can help you perform calculations, generate reports, and ensure the accuracy of your projections.

By including detailed financial projections in your business plan, you can demonstrate the potential profitability of your hardware store and gain the confidence of investors and lenders. It also helps you make informed decisions regarding investments, pricing strategies, and cost management.

Remember that financial projections are not set in stone and should be regularly reviewed and adjusted based on the actual performance of your hardware store. By continually monitoring and analyzing your financials, you can make informed decisions to ensure the long-term success and profitability of your hardware store.

Market Analysis for a Hardware Store

Before launching a hardware store, conducting a thorough market analysis is crucial to understand the target market and competition. In this section, we will explore two key aspects of market analysis for a hardware store: evaluating the target market and conducting a competition analysis in the hardware industry.

Evaluating the Target Market

To create a successful hardware store business plan, it is essential to evaluate the target market. Understanding the needs, preferences, and demographics of your potential customers will help you tailor your offerings and marketing strategies.

The hardware retail industry has experienced significant growth and potential in recent years. In the first half of 2021, the hardware retail sector exhibited the second-fastest growth among retailers, benefiting from the increased focus on home living spaces during the COVID-19 pandemic ( Mountain Mojo Group ). Home improvement projects and the demand for construction and renovation have contributed to the growth of the industry.

Here are some key factors to consider when evaluating the target market for your hardware store:

Industry Size and Growth : The hardware retail industry is valued at approximately $220 billion per year, with products alone estimated at $120 billion ( Mountain Mojo Group ). The global hardware market is forecasted to reach $1.5 trillion by 2025 with a Compound Annual Growth Rate (CAGR) of 5.7% ( Upmetrics ). These figures indicate significant growth and potential for the industry.

Consumer Trends : Consumer spending on home improvement projects, DIY (Do It Yourself) endeavors, and gardening has increased. Searches for home appliances and home remodeling have surged, highlighting the interest in making life more comfortable and enhancing living spaces ( Mountain Mojo Group ). The rebounding housing market and increased consumer spending on home maintenance and renovation projects contribute to the stable growth of the hardware store industry ( OSUM ).

Target Customer Profiles : Identify the demographics, preferences, and needs of your target customers. Consider factors such as age, income level, homeownership rates, and local housing trends in your area. This information will help you tailor your product selection, marketing messages, and customer service to meet their specific needs.

Local Market Analysis : Analyze the local market where you plan to establish your hardware store. Evaluate the population size, competition, and any existing gaps in the market. Assess the potential demand for specific products and services in your target area.

Competition Analysis in the Hardware Industry

Conducting a competition analysis is essential to understand the landscape of the hardware industry and identify opportunities for differentiation. While the industry is highly fragmented, with independent hardware stores making up the majority, there are also big-box retailers and online marketplaces that pose competition.

Consider the following factors when conducting a competition analysis:

Key Players : Identify the major players in the hardware store industry, such as Home Depot, Lowe’s, Menard Inc., and Ace Hardware ( OSUM ). These companies have a significant market share, but independent hardware stores remain a vital part of the industry.

Competitive Advantage : Assess the strengths and weaknesses of your competitors. Understand what sets your hardware store apart from big-box retailers and online marketplaces. Focus on offering specialized products, exceptional customer service, expert advice, or unique niche offerings to differentiate your store.

Customer Experience : Evaluate the customer experience provided by your competitors. Identify areas where you can excel, such as personalized assistance, convenient store layout, wide product variety, or value-added services.

Online Presence : Consider the online presence of your competitors. Assess their e-commerce capabilities, online marketing strategies, and customer engagement. Build your own online presence and leverage digital marketing channels to reach a wider audience.

By thoroughly evaluating the target market and competition within the hardware industry, you can develop effective strategies to position your hardware store for success. This analysis will inform your marketing, product selection, pricing, and customer service efforts, enabling you to meet the needs of your target customers and stand out in a competitive market.

Store Setup and Operations

When it comes to running a successful hardware store, store setup and operations play a crucial role. In this section, we will explore three key aspects: store layout and design, staffing and training, and inventory management strategies.

Store Layout and Design

The layout and design of a hardware store can significantly impact the customer experience. An organized and well-designed store can enhance customer satisfaction, improve navigation, and increase sales. Consider the following tips when planning your store layout and design:

Categorize Products: Group similar products together to make it easier for customers to find what they need. Divide your store into sections such as plumbing, electrical, tools, and hardware.

Clear Signage: Use clear and visible signage to guide customers to different sections and highlight special offers. Make sure the signage is informative and easy to read.

Aisles and Pathways: Ensure there is enough space between aisles for customers to move comfortably and browse products. Wide and unobstructed pathways make the shopping experience more enjoyable.

Product Display: Use attractive displays to showcase popular or new products. Highlighting featured items can help draw attention and increase sales.

Remember, a well-organized and visually appealing store layout can contribute to a positive customer experience, encouraging repeat visits and customer loyalty.

Staffing and Training for a Hardware Store

Having knowledgeable and friendly staff is essential for providing excellent customer service in a hardware store. Here are a few considerations for staffing and training:

Product Knowledge: Ensure your staff has in-depth knowledge of the products you sell. They should be able to assist customers with their questions, provide recommendations, and offer solutions to their hardware needs.

Customer Service Skills: Train your staff to provide exceptional customer service. This includes being friendly, approachable, and attentive to customer needs. Effective communication and problem-solving skills are also crucial.

Ongoing Training: Invest in continuous training to keep your staff updated on new products, industry trends, and customer service techniques. Regular training sessions and workshops can help your team stay motivated and provide the best support to customers.

Remember, well-trained and customer-focused staff can contribute to a positive shopping experience, build customer loyalty, and generate positive word-of-mouth referrals.

Inventory Management Strategies for Hardware Stores

Efficient inventory management is vital for hardware stores to optimize costs, streamline operations, and meet customer demand. Consider implementing the following strategies:

Utilize Inventory Management Software: Implementing inventory management software can help you maintain an accurate count of stock, reduce excess inventory, and minimize stockouts. This improves overall efficiency and customer satisfaction ( Growrk ).

Strategic Procurement: Secure reliable suppliers, negotiate fair prices, and establish favorable payment terms to ensure a steady supply chain and competitive pricing for customers ( Growrk ).

Demand Forecasting: Analyze historical sales data and market trends to forecast customer demand accurately. This helps you optimize your inventory levels and prevent overstocking or understocking situations.

Centralized Data Systems: Implement centralized data systems that integrate purchasing, inventory management, and customer data. This enhances inventory management practices and provides real-time visibility into stock levels and customer preferences ( NetSuite ).

By implementing effective store layout and design, investing in staff training, and adopting robust inventory management strategies, you can enhance the overall operations of your hardware store. These efforts contribute to a positive customer experience, increased profitability, and long-term success in the hardware industry.

Marketing Strategies for a Hardware Store

To ensure the success and growth of your hardware store, implementing effective marketing strategies is essential. By reaching your target audience and showcasing the unique value your store offers, you can attract customers and build brand loyalty. In this section, we will explore three important marketing strategies for a hardware store: building an online presence, utilizing effective marketing channels, and implementing customer relationship management (CRM) practices.

Building an Online Presence

In today’s digital age, having a strong online presence is crucial for any business, including hardware stores. With the increasing popularity of eCommerce and the impact of the COVID-19 pandemic, online channels have become even more important for retailers. According to Mountain Mojo Group , online spending at Ace Hardware stores alone surged by 647% between January and May 2020.

To build an effective online presence, consider the following strategies:

Website : Develop a user-friendly and visually appealing website that showcases your store, products, and services. Include detailed product descriptions, pricing, and availability information. Optimize your website for search engines to improve its visibility and attract organic traffic.

E-commerce : If feasible, offer an e-commerce platform on your website to allow customers to conveniently purchase products online. Provide secure payment options and ensure smooth order fulfillment and delivery processes.

Social Media : Leverage social media platforms to engage with your target audience. Create compelling content, share product tips and tutorials, and respond to customer inquiries and feedback. Platforms like Facebook, Instagram, and YouTube can help you showcase your products and expertise.

Online Advertising : Consider online advertising options such as search engine marketing (SEM) and social media advertising to reach a wider audience. Target specific keywords, demographics, and geographic locations to maximize the effectiveness of your campaigns.

Effective Marketing Channels for Hardware Stores

When it comes to marketing your hardware store, it’s important to identify the most effective channels to reach your target audience. While traditional marketing methods like print advertisements and local radio can still be effective, focusing on digital marketing channels can provide a broader reach and better return on investment.

Consider the following marketing channels:

Search Engine Optimization (SEO) : Optimize your website and online content to improve its visibility in search engine results. Target relevant keywords, create high-quality content, and ensure your website is mobile-friendly.

Email Marketing : Build an email list of customers and prospects and send regular newsletters or promotional offers. Provide valuable content, product updates, and exclusive discounts to keep your audience engaged.

Local SEO : Implement local SEO strategies to target customers in your area. Optimize your Google My Business profile, list your store in online directories, and encourage customers to leave reviews.

Content Marketing : Create informative and engaging content related to hardware and home improvement. This can include blog posts, how-to guides, videos, and tutorials. Share this content on your website, social media platforms, and through email newsletters.

Customer Relationship Management (CRM) for Hardware Stores

Building strong relationships with your customers is crucial for the success of your hardware store. Implementing effective CRM practices can help you retain customers, encourage repeat business, and generate positive word-of-mouth referrals.

Consider the following CRM strategies:

Customer Loyalty Programs : Implement a customer loyalty program to reward repeat customers. Offer exclusive discounts, special promotions, or points-based reward systems. This can incentivize customers to choose your store over competitors.

Personalized Customer Service : Train your staff to provide personalized and knowledgeable assistance to customers. Encourage them to build relationships, offer product recommendations, and provide expert advice.

Feedback and Reviews : Encourage customers to leave reviews and provide feedback on their experience with your store. Monitor and respond to reviews promptly, whether they are positive or negative, to show that you value customer opinions.

Post-Purchase Engagement : Follow up with customers after their purchase to ensure satisfaction. Send thank-you emails, request feedback, or offer assistance with any issues they may have encountered.

By implementing these marketing strategies and focusing on building an online presence, utilizing effective marketing channels, and implementing CRM practices, you can attract and retain customers, drive sales, and position your hardware store for long-term success. Remember to regularly evaluate and adjust your marketing efforts based on customer feedback and market trends to stay ahead of the competition.

Financial Management for a Hardware Store

When it comes to running a successful hardware store, effective financial management is essential. This section will explore key aspects of financial management for hardware store owners, including funding options, managing cash flow, and key financial metrics.

Funding Options for Hardware Store Owners

Obtaining the necessary funding to start or expand a hardware store is a crucial step in the business planning process. There are several funding options available to hardware store owners, including:

Personal Savings: Many entrepreneurs choose to use their personal savings to fund their hardware store. This option provides complete control over the business and avoids the need to pay back loans or give up equity to investors.

Traditional Bank Loans: Hardware store owners can explore loans from banks or other financial institutions. These loans typically require a detailed business plan, collateral, and a strong credit history.

Small Business Administration (SBA) Loans: The SBA offers loans specifically designed for small businesses, including hardware stores. SBA loans often have favorable interest rates and terms, but they may require additional paperwork and eligibility criteria.

Investors: Some hardware store owners seek funding from angel investors or venture capitalists who are willing to provide capital in exchange for a share of the business. This option can provide not only funding but also access to expertise and resources from experienced investors.

Crowdfunding: Crowdfunding platforms allow hardware store owners to raise funds from a large number of individuals who believe in their business idea. This approach can be particularly effective for attracting community support and generating pre-sales.

Each funding option has its own advantages and considerations. It’s important for hardware store owners to carefully evaluate their financial needs, risk tolerance, and long-term goals to determine the most suitable funding option for their specific circumstances.

Managing Cash Flow in a Hardware Store

Effective cash flow management is crucial for the day-to-day operations and long-term success of a hardware store. Here are some strategies to help manage cash flow effectively:

Monitor and Project Cash Flow: Regularly monitor cash flow by tracking inflows and outflows of cash. Create cash flow projections to anticipate any potential shortfalls and plan for periods of increased expenses or reduced revenue.

Streamline Inventory Management: Efficient inventory management is key to optimizing cash flow. Regularly analyze sales data to identify fast-moving products and adjust inventory levels accordingly. Utilize hardware store inventory management techniques and software to streamline the ordering and tracking process.

Negotiate Supplier Terms: Work closely with suppliers to negotiate favorable payment terms. Request extended payment periods or explore early payment discounts to improve cash flow.

Control Expenses: Regularly review expenses to identify areas where costs can be reduced or eliminated. This can include renegotiating contracts with service providers, optimizing energy usage, and implementing cost-saving measures.

Maximize Revenue Opportunities: Explore opportunities to increase revenue, such as offering additional services or expanding product lines. Regularly evaluate pricing strategies to ensure profitability without compromising competitiveness.

By implementing effective cash flow management strategies, hardware store owners can maintain a healthy financial position and ensure the smooth functioning of their business.

Key Financial Metrics for Hardware Stores

Monitoring key financial metrics is crucial for assessing the financial health and performance of a hardware store. Some key metrics to track include:

Gross Profit Margin: This metric measures the percentage of revenue that remains after deducting the cost of goods sold. It helps evaluate the profitability of the hardware store’s products and pricing strategies.

Operating Expenses Ratio: This ratio compares the operating expenses of the hardware store to its revenue. It provides insights into the efficiency of cost management and the overall financial performance.

Inventory Turnover Ratio: This ratio measures the number of times inventory is sold and replaced within a specific period. It helps assess the efficiency of inventory management and the effectiveness of purchasing and sales strategies.

Debt-to-Equity Ratio: This ratio compares the amount of debt a hardware store has to its equity. It indicates the proportion of financing provided by creditors versus the owners’ investment. A lower ratio generally indicates a lower financial risk.

Return on Investment (ROI): ROI measures the profitability of investments made by the hardware store. It helps evaluate the effectiveness of capital investments and indicates the return generated on each dollar invested.

By regularly tracking and analyzing these key financial metrics, hardware store owners can make informed decisions to improve profitability, manage costs, and ensure the long-term financial success of their business.

Financial management is a critical aspect of running a hardware store business. By exploring various funding options, managing cash flow effectively, and monitoring key financial metrics, hardware store owners can ensure the financial stability and profitability of their business.

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Electronics Store Business Plan PDF Example

• May 23, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful electronics store business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your electronics store business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of an electronics store business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the recreation industry, this guide, complete with a business plan example, lays the groundwork for turning your electronics store business concept into reality. Let’s dive in!

Our electronics store business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the store’s operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

• Executive Summary : Offers an overview of your electronics store’s business concept, market analysis , management, and financial strategy.
• Store & Location: Describes the store’s design, key features, and the benefits of its location (e.g., foot traffic, accessibility).
• Products & Supply: Lists the types of electronics you will sell (e.g., smartphones, laptops, accessories) and outlines your supply chain and sourcing strategy.
• Operations: Details the day-to-day operations of your store, including staffing, inventory management, and customer service.
• Key Stats: Provides data on the electronics market size , growth trends, and other relevant statistics.
• Key Trends: Discusses current trends affecting the electronics sector, such as technology advancements and consumer preferences.
• Key Competitors : Identifies your main competitors and explains how your store will differentiate itself.
• SWOT : Strengths, weaknesses, opportunities, and threats analysis.
• Marketing Plan : Strategies for attracting and retaining customers, including promotions, advertising, and customer service initiatives.
• Timeline : Key milestones and objectives from start-up through the first year of operation.
• Management: Information on who manages the electronics store and their roles.
• Financial Plan:  Projects the electronics store’s 5-year financial performance, including revenue, profits, and expected expenses.

Electronics Store Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your electronics store’s business plan, offering a concise overview of your store and its offerings. It should detail your market positioning, the range of electronic products and services you offer, its location, size, and an outline of day-to-day operations.

This section should also explore how your electronics store will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your store’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the store’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your store’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

For an electronics store, the Business Overview section can be concisely divided into 3 main slides:

Store & Location

Briefly describe the store’s physical environment, emphasizing its layout, design, and the overall atmosphere that makes it inviting for customers. Mention the store’s location, highlighting its accessibility and the convenience it offers to customers, such as proximity to major shopping centers, public transportation, or ample parking facilities. Explain why this location is advantageous in attracting your target clientele.

Products & Supply

Detail the range of electronic products and services offered, from consumer electronics like smartphones, laptops, and home appliances to specialized items such as gaming consoles, smart home devices, and professional audio equipment. Outline your pricing strategy , ensuring it reflects the quality of products provided and matches the market you’re targeting. Highlight any exclusive products, warranty services, or membership programs that provide added value to your customers, encouraging repeat business and customer loyalty.

Provide an overview of the daily operations of the store, including store hours, inventory management, customer service protocols, and sales processes. Explain the supply chain and vendor relationships that ensure a consistent stock of popular and in-demand electronics. Mention any technology or systems in place for efficient operations, such as point-of-sale systems, inventory tracking software, and customer relationship management tools.

Make sure to cover here _ Store & Location _ Products & Supply _ Operations

Market Overview

Industry size & growth.

In the Market Overview of your electronics store business plan, start by examining the size of the electronics industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing consumer interest in smart home devices, wearable technology, and sustainable electronics. For example, highlight the demand for products that offer enhanced connectivity, energy efficiency, and cutting-edge technology. Discuss the growing popularity of e-commerce and the trend towards integrating online and offline shopping experiences.

Key Competitors

Then, consider the competitive landscape, which includes a range of stores from large electronics chains to specialized boutiques, as well as online retailers. Emphasize what makes your store distinctive, whether it’s through exceptional customer service, a unique range of products, or specialization in certain technology segments. This section will help articulate the demand for electronics, the competitive environment, and how your store is positioned to thrive within this dynamic market.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

SWOT Analysis

First, conduct a SWOT analysis for the electronics store , highlighting Strengths (such as a diverse product range and knowledgeable staff), Weaknesses (including high operational costs or strong competition), Opportunities (for example, a growing demand for smart devices and e-commerce expansion), and Threats (such as economic downturns that may decrease consumer spending on non-essential electronics).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, promotional discounts, engaging social media presence, and community involvement.

Finally, create a detailed timeline that outlines critical milestones for the electronics store’s opening, marketing efforts, customer base growth, and expansion objectives, ensuring the business moves forward with clear direction and purpose.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the electronics store’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the electronics store toward its financial and operational goals.

For your electronics store business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your electronics store’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs , and capital expenditures.

For your electronics store business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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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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Hardware Business Plan Template & Guidebook

Being successful in the hardware industry requires careful planning and a well-crafted business plan that lays out the details of your goals and strategies. Writing a business plan can be a daunting task, but with the #1 Hardware Business Plan Template & Guidebook, you can create a comprehensive plan tailored to your specific needs quickly and easily. Learn how to use this powerful tool to ensure the success of your own hardware business.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Hardware Business [11 Steps]
• 10+ Best & Profitable Hardware Business Ideas [2023]

How to Write a Hardware Business Plan in 7 Steps:

1. describe the purpose of your hardware business..

The first step to writing your business plan is to describe the purpose of your hardware business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a hardware business:

Our mission is to provide the highest quality hardware products and services to our customers; to foster a safe, welcoming, and inclusive environment where our team can thrive; and to be a leader in thought, innovation, and environmental stewardship in the hardware industry.

2. Products & Services Offered by Your Hardware Business.

The next step is to outline your products and services for your hardware business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your hardware business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your hardware business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your hardware business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a hardware business?

• Accounting software
• Permits to operate a business in the local jurisdiction
• Hardware inventory
• Point of sale system
• Cash register
• Tax permits or certificates
• Shop tools and supplies
• Work tables or benches
• Safety equipment and supplies

5. Management & Organization of Your Hardware Business.

The second part of your hardware business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your hardware business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Hardware Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a hardware business varies based on many different variables, but below are a few different types of startup costs for a hardware business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your hardware business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your hardware business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your hardware business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Hardware Business Plans:

Why do you need a business plan for a hardware business.

A business plan for a hardware business is important to outline the goals and objectives of the business, such as determining the target market, defining product offerings, creating operational plans and setting financial goals. It also provides a roadmap for the future of the business, helping to ensure that decisions are made in line with those plans. Creating a business plan allows potential investors or lenders to assess the viability of the hardware business before committing funds.

Who should you ask for help with your hardware business plan?

You should ask a business consultant, entrepreneur mentor, or relevant industry experts for help with your hardware business plan.

Can you write a hardware business plan yourself?

Writing a business plan for a hardware business is a complex task that requires research, market analysis, and financial planning. Depending on your skill set and knowledge of the industry, you may be able to write your own business plan for a hardware business. If you decide to take on the project yourself, it is important to do thorough research and market analysis to understand the industry, be aware of any potential competition, and understand the key success factors for success in the hardware sector. Additionally, you should also familiarize yourself with writing a basic business plan, as well as use reliable financial projections to create realistic projections for your venture. Ultimately, it is recommended that you at least consult with an experienced business consultant or accountant before finalizing any decisions related to your business plan so that you can rest assured knowing that your plan adheres to best practices.

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We're newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

How to Start a Hardware Store

Main Sections In This Post Steps To Starting A Hardware Store Points to Consider Knowledge Is Power Featured Video

This article provides a comprehensive blueprint for initiating a hardware store. Within, you’ll find an array of examples and samples.

Access the latest information in our “Knowledge Is Power” section, tailored for startup stages and ongoing operations.

Considering the extensive information, consider sharing and saving this post for future reference.

Let’s get started with the steps.

The Steps to Take To Start Your Hardware Store

Below are the steps to starting a hardware store.

Each step is linked to a specific section, allowing you to jump to your desired section or scroll to follow the steps in order.

• An Overview of What You’re Getting Into
• Hardware Store Overview
• Researching Your Hardware Store
• Looking at Financials
• Creating Your Mission Statement
• Creating A Unique Selling Proposition (USP)
• Choose a Hardware Store Name
• Register Your Company
• Create Your Corporate Identity
• Writing a Business Plan
• Banking Considerations
• Getting the Funds for Your Operation
• Software Setup
• Business Insurance Considerations
• Supplier and Service Provider Considerations
• Setting Your Prices
• Physical Setup
• Creating a Website
• Create an External Support Team
• Hiring Employees
• Getting Customers Through the Door

1. An Overview of What You’re Getting Into

Engaging in a profession that aligns with one’s passions is a blessing. The degree of passion you possess can significantly determine your success, especially in owning and operating a hardware store.

Passion serves as a compass during challenging times. A passionate individual seeks solutions when confronted with issues, while one without it might consider an exit strategy .

Consider this scenario:

Imagine a life where you’re financially secure, owning every desired asset, free from debts, with a robust savings account and a consistent monthly income from wise investments.

Here’s a pivotal question: Would you willingly run a hardware store without any monetary gain if financial constraints were non-existent?

A ‘yes’ indicates a genuine passion for the hardware store business. Conversely, a ‘no’ invites introspection. What endeavor truly captures your heart? Perhaps it’s wiser to chase that dream.

To conclude, a genuine passion for the hardware business can strongly predict success. Before diving in, ensure your heart and intentions align with the venture.

For More, See How Passion Affects Your Business . Also, see Considerations Before You Start Your Business to identify key points for a new business owner.

2. Gaining an Overview of Owning a Hardware Store

Next, let’s spend some time on key issues to give you an overview of what to expect from owning and running your business.

a.) A Quick Overview of Owning a Hardware Store

A hardware store is a retail establishment primarily selling tools, equipment, and supplies necessary for home improvement, maintenance, and repair projects. This can include nails, screws, hand and power tools, plumbing and electrical supplies, gardening products, and paint.

The daily operations of running and managing a hardware store encompass a range of tasks:

• Inventory Management: Regularly checking, restocking, and organizing inventory. This ensures products are readily available and easy to find for customers.
• Customer Service: Assisting customers by answering questions, offering product recommendations, and helping locate items. Ensuring customer satisfaction is paramount.
• Sales and Checkout: Managing point-of-sale transactions, handling cash, processing electronic payments, and issuing receipts.
• Staff Supervision: Overseeing staff, assigning tasks, and ensuring they are adequately trained on store products and equipment.
• Store Maintenance: Keeping the store clean, orderly, and safe for customers and employees. This includes tidying up aisles, ensuring neat displays, and promptly addressing safety concerns.
• Bookkeeping and Administration: Tracking sales, expenses, and profits. This also involves handling any required paperwork or permits and ensuring compliance with local regulations.
• Marketing and Promotion: Implementing strategies to attract customers, including sales promotions, advertisements, or loyalty programs.
• Supplier Relations: Regularly communicating with suppliers, placing orders, and negotiating prices or delivery terms.

Running a hardware store requires balancing customer service, inventory management, staff supervision, and administrative tasks.

The ultimate goal is to ensure customers find what they need, receive excellent service, and leave satisfied, all while maintaining a profitable operation.

b.) Hardware Store Models

While offering a similar core product range, hardware stores can be differentiated by their setup and business model.

Here’s a concise list of hardware store types and their respective business models:

• Traditional Brick and Mortar: This is the most common setup, where the store is in a physical space. The revenue is generated primarily through in-store sales, often with the addition of services such as tool rentals or repair services.
• Franchise Model: Entrepreneurs buy into a known brand and follow their established business operations. The upfront investment is higher, but there’s the advantage of brand recognition and an established customer base.
• Online Hardware Stores: A purely digital presence where products are sold online and shipped to customers. The primary revenue is generated through online sales, potentially augmented by affiliate marketing or advertising.
• Specialty Stores: These stores focus on a particular niche within the hardware domain, e.g., only plumbing or electrical supplies. The business model often involves high expertise in the chosen niche and may offer specialty services related to the products.
• Warehouse-Style Stores: Larger than traditional hardware stores, these establishments operate on a bulk buying and selling model. They often offer a broader product range at competitive prices.
• Membership-Based Wholesale Stores: These cater primarily to professionals in the trade and require membership for shopping. The business model relies on annual membership fees and bulk sales.
• Mobile Hardware Vans: These are mobile stores, often catering to specific job sites or areas without a nearby hardware store. The model revolves around the convenience of bringing products directly to the customer.

Choosing a suitable business model from the beginning is crucial, as switching your model later is more challenging.

Identifying a business model that feels right for your hardware store is essential for a smooth and structured startup phase.

c.) Making Your Hardware Store Stand Out

• Specialized Knowledge: Staff should be well-versed in the products they’re selling. Free workshops on basic home repairs or DIY projects can create a loyal customer base that appreciates the extra value.
• Eco-Friendly Products: Dedicate a section to sustainable and eco-friendly products, showcasing your store’s environmental commitment.
• Innovative Displays: Use interactive displays that allow customers to test tools or see demonstrations of how certain products work.
• Loyalty Programs: Implement a points system or discounts for regular customers to encourage repeated business.
• Local Artisan Corner: Dedicate a corner for local artisans to display their hand-crafted items, turning part of your store into a mini marketplace.
• DIY Kits: Offer curated DIY kits with all the necessary items for specific projects, simplifying customer shopping.
• Customization Services: Offer paint-mixing stations where customers can choose custom colors or engraving services for tools.
• Seasonal Themes: Rotate product displays based on seasons or upcoming holidays, showcasing relevant products prominently.
• Interactive Mobile App: Develop an app to help users visualize their DIY projects, create shopping lists, or locate items within the store.
• Community Engagement: Host community events or sponsor local initiatives, making your store a recognized and respected part of the community.

d.) Add-ons for a Hardware Store

• Tool Rental Service: Not everyone wants to buy tools for one-time use. A rental service can cater to these customers and bring in additional revenue.
• Repair Services: Set up a corner where customers can bring damaged tools or equipment for repair.
• Home Improvement Consultation: Collaborate with interior designers or carpenters who can offer in-store consultations for home improvement or redesign projects.
• Delivery and Installation: Offer home delivery for bulky items. Add an option for professional installation, especially for complex equipment or fixtures.
• Recycling Point: Set up a point where customers can return used batteries, light bulbs, or old tools, emphasizing your commitment to sustainability.
• Workshop Spaces: Designate spaces where customers can attend workshops or even rent the space for their DIY projects if they lack space at home.
• Custom Wood Cutting: Offer wood cutting services where customers can get wood cut to their specified dimensions.
• Gardening Center: Expand into a gardening section where you offer plants, garden tools, and accessories. You could also offer landscaping consultation services.
• Coffee Corner: A small coffee shop or kiosk inside the store can be a welcome addition for customers looking to take a break.
• Gift Cards and Kits: Offer gift cards for those looking to gift shopping credits to others. Additionally, curated gift kits for DIY enthusiasts can be a hit during the holiday season.

In both endeavors – making your hardware store stand out and thinking of add-ons – it’s crucial to gauge the needs and preferences of your target audience.

Regularly collecting feedback and staying attuned to industry trends will aid in implementing the most effective strategies.

e.) Pros and Cons of Owning a Business

Owning a business brings both rewards and challenges. While many focus on the benefits, it’s essential to consider potential obstacles.

By understanding potential issues, you can anticipate and mitigate surprises, ensuring better preparedness.

For more, see Pros and Cons of Starting a Small Business.

f.) Challenges You Could Face When Starting and Operating a Hardware Store

Challenges When Starting a Hardware Store:

• Capital Investment : One of the primary challenges is securing enough capital. Opening a hardware store requires a significant investment in inventory, equipment, and a suitable location.
• Location Decisions : Finding the right location is crucial. It should be accessible in an area with potential customers but also consider competition proximity.
• Inventory Management : Deciding what products to stock can be daunting. Too much inventory can tie up funds, while too little can lead to missed sales opportunities.
• Supplier Relationships : A significant challenge is establishing reliable supplier connections to ensure a consistent stock of quality products.
• Licensing and Permits : Navigating local regulations, obtaining necessary licenses, and staying compliant with zoning laws can be complicated and time-consuming.
• Staff Hiring and Training : Recruiting the right team and ensuring they are adequately trained in customer service and product knowledge is essential for a positive store image.
• Competition : The market might already have established hardware stores, initially making it difficult to secure a customer base.

Challenges When the Hardware Store is in Full Operation:

• Customer Retention : Keeping customers loyal in a competitive market requires continuous effort in service, pricing, and product availability.
• Inventory Turnover : Efficiently managing inventory so that products aren’t sitting on shelves too long, thereby tying up capital, can be an ongoing struggle.
• Seasonal Demand Fluctuations : Hardware stores often experience seasonal variations in sales, which can challenge cash flow and inventory management.
• Operational Costs : Rising rent, utility bills, or supplier costs can erode profit margins if not monitored and adjusted for.
• Staff Turnover : The retail industry can have high turnover rates, leading to recurring hiring and training costs.
• Keeping Up with Trends : The hardware industry can evolve with new products and technologies. Keeping updated and stocking modern items is essential.
• Marketing and Promotions : Regularly devising effective marketing strategies to attract new customers while retaining the existing ones is a continual challenge.
• Regulatory Changes : Local or national regulations might change, requiring adaptations in operations or products.
• Unexpected Maintenance : Whether it’s a broken cash register or a malfunctioning HVAC system, unforeseen issues can arise that disrupt business and require unplanned expenses.
• Economic Fluctuations : Economic downturns can decrease consumer spending on home improvement and hardware items.

In conclusion, starting and running a hardware store comes with various challenges.

Whether in the startup phase or full operation, understanding potential pitfalls is crucial to navigating them effectively and ensuring the business’s longevity.

g.) Questions You Need to Consider for Your Hardware Store

Starting a hardware store can be a rewarding endeavor, but it requires meticulous planning and foresight.

By answering the following questions, you will prepare yourself for some of the issues you may encounter if you start your hardware store.

• Business Model : What type of hardware store model are you considering?
• Skill Set : Do you have the skills to manage and operate a hardware store?
• Workforce : Will you do all the work alone or hire employees? Do you intend to manage your business, or are you planning to hire a manager?
• Customer Acquisition : How will you get customers?
• Customer Retention : How will you keep customers coming back?
• Partnerships and Investment : Are you interested in finding partners or investors?
• Financing : How will you finance your startup costs?
• Profitability Timeline : Have you considered how long it will take to become profitable?
• Personal Finances : How will you support yourself during the early stage of operation, which can be financially challenging?
• Product Lineup : What products and services will you offer?
• Market Demand : How do you know people will want what you have to offer?
• Unique Selling Proposition : What will you provide to differentiate you from your competition?
• Positioning : How will you position your Hardware Store: High-End, Average, or discount operation?

These questions are fundamental starting points to evaluate your readiness and the viability of your hardware store venture.

3. Research

Inside information hardware store research.

Before embarking on your journey to start a hardware store, meticulous research is non-negotiable. Comprehensive information equips you with foresight, guarding against unforeseen setbacks.

One invaluable resource is the counsel of seasoned hardware store proprietors. Their experiential insights are reliable and enlightening, making time spent with them invaluable.

Identifying and approaching such individuals requires strategy and tact, topics extensively addressed in a dedicated article.

For a comprehensive guide on connecting with industry veterans, refer to An Inside Look Into the Business You Want To Start for all the details.

Supply, Demand, and Your Location

Determining market demand is a pivotal step before starting a hardware store, regardless of whether it is a physical location, an online venture, or a combination of both.

The absence of demand, irrespective of product quality or pricing, spells imminent business failure. A lack of demand equates to unsold inventory, unsustainable operations, and potentially insurmountable debts.

Competition Analysis:

Thoroughly analyze your competitors. Engaging with well-established competitors is an uphill battle unless you offer distinct and unparalleled services.

Maintaining a competitive edge becomes arduous if competitors can easily replicate your offers.

Location Choice for Physical Stores:

Ideally, your store’s location should be a confluence of ample demand and minimal competition.

While populated locations promise more foot traffic, ensuring the location’s rent or purchase cost doesn’t devour your potential profits is vital.

Conversely, while remote or less-populated areas might seem financially appealing, they might not offer the customer base needed for profitability.

Online Ventures:

In the digital realm, understanding market demand and competition is equally pivotal. Sole reliance on search engines for traffic in a saturated market might yield little to no visibility.

Simultaneously, traffic generation becomes a challenge if your product’s search volume is negligible.

Furthermore, international shipping considerations, like high costs and customs delays, become pertinent. Using local distributors in high-demand regions can be a solution.

Strategies to Determine Market Demand:

• Surveys and Questionnaires: Deploy these in your target area to measure interest.
• Analyze Competitor Sales: High sales figures in a region indicate demand.
• Local Trade Shows and Exhibitions: Engage with potential customers and get firsthand insights.
• Google Trends: Check for product search trends in specific regions.
• Use Analytics Tools: Employ tools like SEMrush or Ahrefs to identify the search volume for your products.
• Pilot Launch: Initiate a small-scale launch to assess demand before fully investing.
• Feedback from Local Communities: Engage with local forums and communities to ascertain interest and demand.

In conclusion, knowing your market’s pulse is instrumental for business longevity and success.

Whether you choose a brick-and-mortar approach, an online store, or both, a calculated understanding of demand and competition is non-negotiable.

For more, see the Demand for Your Products and Services and Choosing The Best Location for Your Business.

Target Audience

The benefits of understanding your target audience are profound. A comprehensive knowledge of your target market facilitates tailored products and services.

Instead of casting a wide net and offering an extensive range of products, you can zero in on precisely what your customers want, optimizing inventory and marketing efforts.

Target Market Ideas for a Hardware Store:

• Homeowners and renters undertaking DIY projects.
• Local contractors and builders.
• Landscapers and gardeners.
• Property management companies.
• Home improvement professionals.
• Interior designers.
• Local schools for craft and technical projects.
• Local businesses needing maintenance supplies.

For more, see How To Understand Your Target Market.

4. Looking at Financials:

Understanding the numbers and making good decisions is a crucial factor in succeeding.

You will struggle to manage a successful operation without putting in the time and effort to understand and monitor the financials of your hardware store.

Let’s look at startup costs, operating costs and profits.

Start-Up Costs:

Startup Cost:

Accurate estimation of startup costs is paramount for a smooth transition from planning to opening your hardware store.

Underestimation can lead to budget shortages, halting your startup, while overestimation portrays high risk.

Your costs hinge on factors like operation size, location, employee hiring, equipment type, and your online, rented, leased, or home-based business setup.

To estimate costs:

• List requisites and obtain their prices.
• Continual research might bring up overlooked expenses.

However, relying solely on sample estimates is not foolproof. No single source, including this, can provide precise costs—each business model is unique.

Operationally, online ventures are cost-effective, both in initiation and running. Whether it’s your primary operation or a home-based adjunct, it’s financially leaner than conventional brick-and-mortar setups.

For an accurate cost prediction, thorough research and obtaining precise estimates ensure that starting a hardware store is financially feasible for you.

Sample Startup Cost For a Hardware Store 

The purpose of the list below is to focus on the items in the list more than the numbers because these are general samples, and your figures will be different.

SAMPLE Estimated Startup Costs for a MID-Sized Hardware Store in the USA

Lease/Rent for Location

• 12-months lease (monthly costs may vary based on location and size)
• Lower Value: $3,000/month – Total: $36,000/year
• Upper Value: $5,000/month – Total: $60,000/year

Store Build-Out & Interior Setup

• Shelving, display counters, interior decor
• Lower Value: $10,000
• Upper Value: $50,000

Initial Inventory Purchase

• Tools, building materials, paint, plumbing supplies, electrical items, etc.
• Lower Value: $100,000
• Upper Value: $200,000

Point of Sale System & Software

• Lower Value: $1,000
• Upper Value: $5,000

Licensing and Permits

• Business license, special permits for certain products, etc.
• Lower Value: $500
• Upper Value: $2,000

Insurance (1st Year)

• Liability, property, workers’ compensation (if hiring from start)
• Lower Value: $3,000
• Upper Value: $7,000
• Outdoor sign, indoor branding, department signs
• Upper Value: $10,000

Marketing & Promotion

• Grand opening advertising, flyers , initial online ads, etc.
• Lower Value: $5,000
• Upper Value: $15,000

Fixtures & Equipment

• Cash registers, security system, trolleys, etc.
• Lower Value: $15,000
• Upper Value: $30,000

Professional Fees

• Accountant, lawyer for setting up the business structure
• Lower Value: $2,000
• Upper Value: $6,000

Miscellaneous & Contingency

• Unexpected costs and other minor expenses

TOTAL ESTIMATED STARTUP COSTS:

• Lower Value Total: $180,500
• Upper Value Total: $400,000

Note: These values are SAMPLE estimates and can vary based on a myriad of factors, including the specific location within the USA, current market conditions, and specific choices made by the business owner.

For more, refer to my article on Estimating Startup Costs.

Monthly Operating Costs:

Monthly operational costs for a hardware store can vary considerably based on numerous factors.

For instance, operating solo or with an entire staff can significantly shift monthly expenditures. Your location choice also plays a role: prime, high-traffic areas have a heftier price tag than less frequented spots.

Additional variances may arise from loan repayments, ambitious marketing endeavors, unforeseen repairs, etc. The concept is that numerous elements dictate your monthly outgoings.

Maintaining minimal expenses is pivotal to ensuring smooth business operations and managing revenue dips. However, curbing costs shouldn’t compromise quality, service, or efficiency.

SAMPLE list of estimated monthly expenses for a MID-sized hardware store

Again, the purpose of the list below is to focus on the item in the list more than the numbers. The numbers are a general idea, and your numbers and list will differ. 

Sample Monthly Expenses for a Mid-sized Hardware Store in the USA:

• Upper Value: $1,200
• Lower Value: $12,000
• Upper Value: $20,000
• Upper Value: $3,500
• Lower Value: $800
• Upper Value: $1,500
• Upper Value: $3,000
• Upper Value: $25,000
• Lower Value: $300
• Upper Value: $1,000
• Lower Value: $200
• Upper Value: $500
• Miscellaneous (unexpected expenses, equipment replacement, etc.):

Total Monthly Expenses:

• Lower Value: $29,300
• Upper Value: $63,700

(Note: These values are hypothetical and can vary based on location, business decisions, market conditions, and other factors. Always consult with a financial expert when budgeting for a business.)

Looking at Profits

Understanding profit margins is crucial, but operational decisions largely determine your net profit. High overhead costs can substantially reduce profits, even with impressive sales figures.

Accurately estimating the profit of a hardware store is challenging due to myriad variables.

The setup, management style, and operational nuances are unique to each business, making the owner the most suitable person to estimate potential profits.

Your store’s high-end, standard, or discount positioning will directly affect your profit margin.

To get an idea of potential earnings, calculate the cost per sale, estimate monthly sales, and subtract your overhead.

Your sales strategy is also pivotal. A high-profit-per-item approach may fall short if sales volume is low.

Conversely, a strategy based on high volume with smaller profit margins demands ensuring each sale covers costs and still turns a decent profit.

For More, See Estimating Profitability and Revenue.

Final Thoughts on Financials 

The financial health of a hardware store is a critical component of its operational success.

Beyond the requisite tracking and recording of transactions for legal and tax obligations, there’s immense value in actively analyzing these financials.

You can discern underlying trends and patterns by consistently monitoring profits and expenses and generating insightful reports.

For instance, if there’s a noticeable dip in weekly sales, it prompts a deeper dive. Did market dynamics shift? Is there an issue with your product line or service quality? Has a new competitor emerged in the locality?

A passive approach to your hardware store’s finances can be perilous. When issues become overtly evident, rectifying them might be challenging, if not impossible.

Monitoring and proactive analysis of your financials can preempt potential problems, allowing for timely intervention.

Consider revisiting Step 3. Researching your hardware store , where there is a technique to get inside information, will benefit you in this step.

5. Create Your Mission Statement

A mission statement is pivotal in clearly defining the overarching purpose and objective of your business.

It acts as a compass, guiding every action and decision by highlighting the core values and primary goals.

For a business owner, it provides clarity, ensuring the organization remains aligned with its foundational principles.

It communicates the chief benefit they can expect from the business for customers and the community.

Examples of a mission statement for a hardware store:

• “Empowering communities by providing high-quality tools and resources for every home project.”
• “Delivering trust, reliability, and expertise in every product, every time.”
• “Bridging the gap between ambition and accomplishment with the right hardware solutions.”
• “Your neighborhood partner in building dreams and fixing challenges.”
• “Commitment to quality, service, and community – one tool at a time.”

For more, see How To Create a Mission Statement.

6. Creating A Unique Selling Proposition (USP)

A Unique Selling Proposition (USP) pinpoints the distinct advantage or characteristic that makes a business stand out from its competitors.

Businesses must identify their USP, as it differentiates them in the market and communicates to customers the primary reason they should patronize that specific business over others.

A strong USP can command attention, foster customer loyalty, and drive sales, making it an essential aspect of a business’s strategy.

Examples of a USP for a hardware store:

• “Get expert advice with every purchase – we hire professionals, not just salespeople.”
• “24-hour delivery guarantee or your money back.”
• “An unmatched range of eco-friendly tools and products for the conscious builder.”
• “Every tool rented is a tree planted – building with a cause.”
• “Specializing in rare and hard-to-find hardware parts – if we don’t have it, it doesn’t exist.”

7. Choose a Business Name

When selecting your business name, prioritize a memorable and pertinent name to the hardware industry. It should be easy to pronounce and evoke the trustworthiness and reliability customers expect from a hardware provider.

The long-term impact of your chosen name cannot be overstated, as it’s a moniker you’ll likely carry throughout your business’s existence.

Furthermore, a congruent domain name is crucial when establishing an online presence. It’s essential to ensure your desired name isn’t already in use by another entity.

Here Is a List of Sample Hardware Store Names:

• BuildMate Hardware
• UrbanEdge Tool Supply
• ProCrafters Hardware Hub
• TrueBlue Builders’ Mart
• MetroMend Hardware Haven
• CityScape Tool Center
• EverBuild Hardware Emporium
• PrimeGrade Tool Supply
• FirstPick Builders’ Boutique
• HandyHive Hardware House
• PinnaclePro Hardware Haven
• UrbanNest Tool Supplies
• EliteEdge Hardware Outlet
• CraftedCave Hardware Hub
• SolidStone Tool Supply
• ToolTrust Hardware Co.
• ModernMend Hardware Market
• TrustTech Tool Mart
• MetroMaster Hardware Shop
• Builder’s Bliss Tool Center
• PeakCraft Hardware Point
• UrbanElite Tool and Fix
• EnduraEdge Hardware Solutions
• BuilderBuddy Mart
• Craftsmen’s Corner
• EverTrust Hardware Center
• CityCrafters Tool and Supply
• PureCraft Hardware Shop
• ToolTrend Hardware Boutique
• BuildNest Hardware Solutions.

For more, see the following articles:

• How To Register a Business Name
• Registering a Domain Name For Your Business

8. Register Your Company

Ensuring the legality of your business is paramount before starting operations. Failure to adhere to local, state, and federal regulations can lead to penalties, fines, or even a business shutdown.

Consulting a legal professional or business advisor is highly advisable to ensure compliance and maximize tax benefits and liability protection.

These experts can provide guidance tailored to your unique business model and location.

Common Types of Registrations for a Hardware Store:

• Business Entity Registration (LLC, Corporation, Sole Proprietorship)
• Employer Identification Number (EIN)
• Sales Tax Permit
• Doing Business As (DBA) Name

Permits and Licenses to Consider for a Hardware Store:

• Business License: Required to operate legally within your municipality.
• Sales Tax Permit: Necessary for selling goods in most states.
• Sign Permit: If you’re putting up signage outside your store.
• Health and Safety Permits: Ensuring the safety of your customers and employees.
• Home Occupation Permit: If running a part of your business from home.
• Seller’s Permit: Depending on your state, this may be necessary for retail operations.
• Fire Department Permit: Required if you handle flammable materials.
• Environmental Permits: If dealing with hazardous materials.

Registration:

• How to Register Your Business
• How To Register a DBA
• How to Register a Trademark
• How to Get a Business License

Business Structures:

• How to Choose a Business Structure
• Pros & Cons of a Sole Proprietorship
• How To Form an LLC
• How To Register a Business Partnership
• How To Form a Corporation
• How To Choose a Business Registration Service

9. Create Your Corporate Identity

A Corporate ID, or Corporate Identity, is a cohesive visual representation of your business. It includes your logo, business cards, website, business signage, stationery, and promotional materials.

These components collectively present a consistent and professional image to prospective and existing customers.

This uniformity not only builds brand recognition but also instills trust and credibility in the eyes of your clientele.

You can see our pages for an overview of your logo , business cards , website , and business sign , or see A Complete Introduction to Corporate Identity Packages.

10. Writing a Business Plan

A Business Plan Is Essential:

A business plan is a foundational tool for startups, critical for securing financing and attracting investors.

Beyond these initial uses, it serves as a roadmap, guiding you through establishing and growing your business.

It Takes Time and Effort to Create an Effective Business Plan:

Crafting a business plan demands both time and diligence. It visualizes your future business, requiring careful thought and articulation.

The investment in time pays off, offering clarity on startup requirements and operational strategies.

Options Are Available:

There’s flexibility in how you approach your business plan. You can start from zero, employ a professional, use predefined templates, or leverage business plan software.

Regardless of the method, your active involvement is paramount. Engaging an expert ensures your vision and operational ethos are effectively conveyed.

There Is a Good Chance That Your Business Plan and or Operations Will Change:

A business plan is not set in stone. With growing experience and evolving market conditions, adjustments might be necessary.

Business Plan Template for a Hardware Store

Executive Summary

• Introduction: Briefly describe the hardware store, location, and target audience.
• Mission Statement: Convey the store’s core purpose and its benefit to the community.
• Objectives: Outline short and long-term goals, e.g., reaching X sales in the first year.

Business Description

• Nature of the Business: Elaborate on the hardware store’s primary operations and products/services.
• Industry Background: Discuss current trends, market size, and growth potential.

Market Analysis

• Target Market: Describe your ideal customers, demographics, and buying patterns.
• Competitive Analysis: Analyze the strengths and weaknesses of competitors and your store’s unique selling proposition.

Marketing and Sales Strategies

• Product/Service Strategy: Detail your range of products or services.
• Pricing Strategy: Explain your pricing model, considering market demand and competitor prices.
• Promotion and Advertising: Outline plans for advertising, promotions, and customer loyalty programs .

Organizational Structure

• Management Team: Highlight key team members, roles, and experiences.
• Employee Roles: Describe roles, responsibilities, and potential salaries.

Operational Plan

• Location: Discuss the location, considering factors like customer accessibility and rental costs.
• Suppliers: List major suppliers and backup options.
• Inventory Management: Describe the process for inventory control, restocking, and minimizing waste.

Financial Projections

• Startup Costs: Break down initial costs like inventory, licensing, and location setup.
• Sales Forecast: Project monthly sales for the first year, considering seasonal fluctuations.
• Profit and Loss Statement: Provide a monthly P&L projection for the first year.
• Break-Even Analysis: Calculate the point where the business will start making a profit.

Legal Considerations

• Business Structure: Determine whether the store will operate as a sole proprietorship, partnership, LLC, etc.
• Licenses and Permits: List required local, state, and federal permits.
• Insurance: Describe the types of insurance needed, e.g., liability, property, workers’ compensation.
• Resumes: Attach resumes of key management team members.
• Supplementary Data: Include any additional information or studies that support the business plan.

Suggestions:

As you populate each section, remember to provide realistic data, backing claims with research where possible.

For financial projections, consider seeking assistance from an accountant familiar with the retail industry.

The more thorough and fact-based your business plan is, the more effective it will be for decision-making and securing investments.

See How to Write a Business Plan for information on creating your business plan.

11. Banking Considerations

Choosing a local bank that prioritizes small businesses can be advantageous.

A business account segregates personal and business transactions, simplifying expense tracking and accurate report generation for tax purposes.

Building a professional rapport with your banker can provide valuable insights and facilitate access to financial services.

Additionally, a merchant account or online service to process credit and debit card transactions is imperative, enhancing sales by offering convenience to customers.

For more, see How to Open a Business Bank Account. You may also want to look at What Is a Merchant Account and How to Get One.

12. Getting the Funds for Your Operation

Various options exist when seeking financing for your hardware store, including traditional banks, private loans, securing investors, or liquidating personal assets.

Additionally, government grants tailored for startups might be available to assist in your endeavor.

Considerations When Meeting a Loan Officer:

• Be punctual and professional.
• Research and understand the bank’s lending criteria.
• Be prepared to articulate your business plan and vision.
• Anticipate questions regarding the loan’s purpose and amount.
• Be honest about potential risks and your mitigation plans.

Sample List of Documents Needed for a New Business Loan:

• Detailed business plan.
• Personal financial statement.
• Credit report.
• Cash flow projections for at least a year.
• Personal and business income tax returns.
• Resumes of key business personnel.
• Legal documents: business licenses, articles of incorporation, franchise agreements, if applicable.
• Collateral documentation if required.

For more, see the following:

• Getting a Small Business Loan
• SBA Small Business Grants
• Search: Hardware Store Start-up Loans
• Search: Grants For a Hardware Store

13. Software Setup

Selecting the right software from the outset is crucial for your hardware store. Implementing a system initially is more straightforward than transferring data between different platforms later.

Always opt for established software companies to ensure future support.

Use demos when offered to get a feel of the system before investing.

Peruse software reviews and forums to gain insights into others’ experiences. For accounting purposes, consult your bookkeeper or accountant to select the best software tailored to your needs.

Types of Software a Hardware Store Owner Might Use:

• Inventory Management Software: To track and manage stock levels.
• Point of Sale (POS) System: For processing sales and transactions.
• Accounting Software: For managing financials and taxes.
• Employee Scheduling Software: To handle staff shifts and hours.
• Customer Relationship Management (CRM) Software: For managing customer interactions.
• E-commerce Platform: If offering online sales.
• Security Software: To protect against theft and unauthorized access.
• Supply Chain Management Software: To manage supplier relationships and orders.

Check out Google’s latest search results for software packages for a hardware store.

14. Get The Right Business Insurance

Ensuring your hardware store is adequately insured is paramount, as unforeseen incidents can occur without warning.

The right insurance safeguards your business assets and the well-being of customers, employees, and visitors on site.

Professional liability insurance can shield you from potential lawsuits arising from operational mishaps.

Moreover, Interruption Insurance can prove invaluable, providing financial support if an unexpected event forces your business to close temporarily.

Engaging a skilled insurance broker is advisable to navigate the complexities of insurance policies, ensuring you obtain comprehensive coverage tailored to the unique risks of running a hardware store.

For more, see What to Know About Business Insurance . You can also browse the latest Google search results for hardware store insurance .

15. Suppliers and Service Providers

Choosing suitable suppliers and service providers is foundational for a hardware store.

Dependable suppliers ensure consistent inventory, enabling smooth operations and satisfied customers.

Securing competitive prices from them can enhance your profit margins, benefiting the business and its clientele. A symbiotic relationship, where both parties benefit, promotes longevity and trust.

Items and Services from Suppliers:

• Power tools and hand tools
• Paints and solvents
• Fasteners (nails, screws, bolts)
• Lumber and building materials
• Electrical and plumbing supplies
• Gardening tools and supplies
• Safety equipment
• Cleaning products

Services from Providers:

• Equipment maintenance and repair
• Point-of-sale system services
• Delivery and logistics
• Shelving and storage solutions
• Marketing and promotional materials
• Professional training for employees

Maintaining mutual respect and ensuring financial advantages for both parties solidifies the business relationship, ensuring steady support when needed.

For More, See How To Choose a Supplier.

16. Setting Prices

Thoroughly researching pricing when initiating a hardware store is pivotal. Appropriate pricing not only influences your profit margins but also dictates market positioning. Overpricing may deter potential customers, rendering you uncompetitive.

On the other hand, underpricing, while potentially increasing customer volume, can endanger sustainability by diminishing profits and potentially preventing you from covering operational expenses.

Striking a balance is paramount. This involves understanding the market landscape, competitor pricing, and the intrinsic value of your products and services.

A well-calculated price should reflect the current market conditions and the distinct value your hardware store provides, ensuring profitability and market relevance.

See the following for more:

• Setting the Price of Your Products and Services
• Search Results for Pricing Strategies for a Hardware Store.

17. Physical Setup

Inventory Management:

Effective inventory management is paramount to success in the realm of hardware stores.

This entails a careful balance between purchasing and displaying products that customers genuinely desire instead of trying to push items that hold little appeal.

The primary objective here is to offer a diverse range of products that augment the value proposition for your clientele.

Controlling your inventory quantity is the fine line to tread in this aspect. An excess of stock can lead to financial resources being tied up unnecessarily, which could be better allocated elsewhere in your business.

Conversely, insufficient inventory will result in missed sales opportunities. Therefore, meticulous inventory control is a requisite for any hardware store owner.

Strategic Product Display:

How you present your products is just as significant as what you choose to stock.

To maximize sales, it is essential to strategize your product displays. Experimentation and record-keeping of various display setups will help pinpoint the most effective methods.

Expiry Dates Consideration:

While managing inventory, be mindful of expiry dates, particularly for items subject to such constraints.

Avoid stocking products with impending expiration dates, as these can lead to losses due to unsold goods. Striking the right balance here is key to minimizing waste while satisfying customer demand.

Layout and Setup:

The layout and setup of a hardware store play a pivotal role in customer experience. Ensure that your store is organized logically, with products categorized sensibly.

This facilitates ease of navigation for customers and helps them quickly find what they need. Adequate signage and labeling can enhance the overall shopping experience.

Signage Placement:

A well-thought-out signage strategy is integral to your hardware store’s professionalism. Your main business sign should be prominent and easily visible from a distance, serving as a beacon for potential customers.

Additionally, directional signs in parking lots, clear exit signs, and specialized area markers contribute to a seamless shopping experience. These signs aid customers and demonstrate your commitment to professionalism and customer service.

Office Organization:

Running a hardware store is time-consuming and necessitates a well-organized office space. An efficient office setup enhances your productivity by effectively managing various aspects of your business, such as inventory tracking, financial management, and customer service.

Equip your office with the necessary tools, technology, and supplies to ensure smooth operations.

In conclusion, the hardware store business demands meticulous attention to inventory, product display, expiry dates, layout, signage, and office organization.

Striking the right balance and optimizing each aspect is essential for long-term success and customer satisfaction in this industry.

See Here are Considerations for The Setup of Your Office for tips and ideas to make your office work for you. Also, have a look at our article About Company Signs.

18. Creating a Website

A website is an essential asset for your hardware store, serving as the primary point of contact with potential customers.

Unlike a social media account, a website is under your ownership and control when you host and register a domain name. This freedom allows you to convey crucial information about your business.

Furthermore, your website can be a potent marketing tool. By regularly blogging about your industry and offering valuable tips and insights tailored to your customer base, you can earn their trust and establish yourself as an industry expert.

This enhances your credibility in their eyes, potentially translating into increased patronage. In today’s digital age, a well-maintained website is an indispensable tool for the growth and success of your hardware store.

For more, see How to Build a Website for Your Business .

19. Create an External Support Team

An external support team for your hardware store is a dependable group of professionals who offer advice and services crucial to your business.

It’s essential to clarify that these individuals are not on your payroll but are engaged as needed.

You can utilize their services for various purposes, including specific projects, tasks on a contractual basis, hourly rates, or even retainers.

While you may already collaborate with some of these professionals, acknowledging them as part of your team underscores their significance and opens the door to potentially expanding your network.

It’s unnecessary to assemble this team all at once, as building strong professional relationships takes time, but it’s an ongoing effort.

Your team can comprise experts such as accountants, lawyers, financial advisors, marketing specialists, technical advisors, and consultants.

Cultivating this support network ensures you have reliable resources to turn to when your hardware store needs their expertise.

For more, see Building a Team of Professional Advisors for Your Business.

20. Hiring Employees

Running your hardware store alone in its early stages can help control costs, as payroll is a substantial expense during startup.

However, the workload may become overwhelming as your business expands, necessitating employee hires.

It’s crucial to focus on recruiting qualified individuals with strong work ethics who fit their respective roles.

The following are job positions or outsourced services you may want to consider as your hardware store grows:

• Store Manager
• Sales Associates
• Inventory Manager
• Purchasing Manager
• Marketing Specialist
• Customer Service Representatives
• Warehouse Staff
• Accounts Manager
• Maintenance and Repair Personnel
• Delivery Drivers
• Security Personnel
• Cleaning and Maintenance Services
• Legal and Financial Advisors
• External Accountant/Bookkeeper

Expanding your workforce strategically is vital for maintaining efficient operations and catering to the evolving needs of your growing hardware store.

For more, see How and When to Hire a New Employee.

21. Getting Customers Through the Door

When you have reached this step, your business is set up and ready to go, with one more final step, which is important: getting customers through the door.

There are numerous ways to do this, like advertising, having a grand opening , word of mouth, etc.

Let’s dig a little deeper into the following sections.

Marketing Considerations

A hardware store without customers is merely a premise. Success hinges on attracting the right clientele, which can be challenging initially as your operation is new and relatively unknown.

Building a solid reputation over time will make this endeavor more manageable and bolster your marketing prowess.

Marketing your hardware store is an ongoing effort. The more you invest in effective marketing strategies, the greater your revenue potential.

While you don’t always need a marketing agency or expert, it’s an option worth exploring when the right fit arises.

Simplify your marketing approach by considering it as a means to raise awareness about your business, seizing opportunities as they come.

Simple Methods to Promote Your Hardware Store:

• Local Advertising: Utilize local newspapers, radio, or online classifieds to announce your store’s presence.
• Social Media: Create and maintain active social media profiles to engage with potential customers.
• In-Store Promotions: Offer special discounts or promotions to attract foot traffic.
• Networking: Attend local business events and join community organizations to establish connections.
• Customer Referral Program: Encourage satisfied customers to refer others to your store in exchange for rewards.
• Flyers and Direct Mail: Distribute flyers or postcards in your neighborhood to promote special offers.
• Online Listings: Ensure your store is listed on online directories and review platforms like Google My Business.
• Partnerships: Collaborate with complementary local businesses to cross-promote each other.
• Community Involvement: Participate in community events, sponsor local initiatives or host workshops.
• Signage: Invest in clear and eye-catching store signage to attract passersby.

Implementing these methods can help raise awareness of your hardware store and draw in the right customers.

See How To Get Customers Through the Door and our marketing section to provide ideas to help you bring awareness to your business.

Sample Ad Ideas:

Display Ad 1:

Headline: “Upgrade Your Home with Quality Tools!” Unleash your DIY potential at [Store Name] – Your Trusted Hardware Store. Find top-notch tools and expert advice for your home improvement projects today.

Display Ad 2:

Headline: “Save Big on Hardware Essentials!” Discover unbeatable deals on hardware essentials at [Store Name]. From nuts and bolts to power tools, we’ve got you covered for all your DIY needs.

Display Ad 3:

Headline: “Turn Your Projects into Masterpieces!” Transform your ideas into reality with premium hardware from [Store Name]. Visit us now for the tools and supplies that make dreams come true.

Display Ad 4:

Headline: “Your Hardware Store, Your Solutions!” Get the right solutions for every project at [Store Name]. We’re here to equip you with quality products and expert guidance.

Display Ad 5:

Headline: “Find Inspiration in Aisle A, Innovation in Aisle B!” Visit [Store Name] for an unmatched selection of hardware and tools. Explore endless possibilities for your next home project today.

To expand your customer base and forge valuable partnerships, collaborating with complementary businesses through referral programs can be a strategic move.

Here are some types of businesses you could approach for potential partnerships, along with ways you can structure mutually beneficial arrangements:

• Offer a referral fee for contractors who recommend your hardware store to their clients for purchasing materials and tools. In return, you can refer your customers to their services, strengthening both businesses.
• Real estate agents often encounter homeowners in need of home improvement supplies. Establish a referral program where they refer their clients to your store for any necessary repairs or upgrades and reciprocate by referring customers looking for new homes or renovations.
• These professionals have a consistent need for plumbing and electrical supplies. Provide them with a discount on their purchases in exchange for referring their clients to your store for additional hardware needs.
• Collaborate with interior designers by offering a referral fee when they recommend your store for home improvement projects. You can also refer your customers to their design services for a comprehensive home makeover.
• Create a symbiotic relationship with landscaping businesses. They can send customers your way for outdoor hardware and gardening supplies, and you can refer your customers to their landscaping services.
• Partner with home insurance companies and offer home safety and maintenance supplies discounts to their policyholders. In return, they can promote your store as a trusted source for these products.
• Home inspectors can refer home buyers or sellers to your store for repair or maintenance materials. You can refer your customers to their inspection services to ensure the quality of their homes.
• Collaborate with kitchen and bath showrooms to cross-promote your products. They can refer customers needing hardware and tools for remodeling, while you can recommend their showroom for fixtures and appliances.
• Establish a reciprocal arrangement with building supply companies, referring clients to each other based on specific needs. This can create a network of businesses catering to different construction and renovation aspects.
• Handyman Services:
• Partner with local handyman services, offering discounts on supplies in exchange for referring their clients to your store. You can also direct your customers to their services for minor repairs and installations.

Approaching these businesses with well-structured referral programs can foster mutually beneficial relationships, expand your customer base, and create a network of trusted partners in the home improvement industry.

Remember to clearly outline the terms and benefits of the partnership to ensure its success.

Points To Consider

Next, let’s review essential points for more tips, insights, and considerations before starting your hardware store.

We will cover sections, including skills to consider, points to focus on, and equipment. Then you’ll reach the “Knowledge Is Power,” section, where you will want to use the resources for valuable information.

Hours of Operation:

Hours of Operation: Consider operating your hardware store during the following hours:

• Monday to Saturday: 8:00 AM – 6:00 PM
• Sunday: 10:00 AM – 4:00 PM

Tasks Outside Regular Hours: Certain tasks may require additional time before and after regular hours:

• Inventory Management: Allocate 1-2 hours before opening and after closing for stock assessment and restocking.
• Maintenance: 1 hour daily for store upkeep.
• Bookkeeping: Weekly, allocate 2-3 hours post-closing for financial record-keeping.
• Marketing: Periodically, allocate time for marketing planning and online updates.

Equipment and Supplies

A List of Equipment and Supplies to Consider for a Hardware Store:

Setting up a hardware store requires various equipment and tools to facilitate operations. Here is a comprehensive list of essential equipment and items you may need:

• Shelving Units: To display and organize products efficiently.
• Cash Registers or Point-of-Sale Systems: For processing transactions.
• Shopping Carts and Baskets: For customer convenience.
• Display Racks: To showcase merchandise effectively.
• Security Cameras and Surveillance Systems: To deter theft and enhance security.
• Computer Systems: For inventory management and administrative tasks.
• Label Printers: To create price tags and labels.
• Pricing Guns: For quick and accurate labeling.
• Barcode Scanners: To streamline inventory tracking.
• Handcarts and Dollies: For moving heavy items.
• Pallet Jacks: For handling bulk shipments.
• Scales: To weigh bulk products.
• Locks and Safes: To secure cash and valuable inventory.
• Office Furniture: Desks, chairs, filing cabinets, etc.
• Phones and Communication Equipment: For customer service and inquiries.
• Signage: Exterior and interior signage for branding and directions.
• Lighting Fixtures: To ensure adequate in-store lighting.
• Power Tools: For store maintenance and assembly.
• Ladders and Step Stools: For accessing high shelves.
• Cleaning Supplies: To maintain store cleanliness.
• Fire Extinguishers and Safety Equipment: For safety compliance.
• First Aid Kits: For emergencies.
• HVAC System: Heating, ventilation, and air conditioning for customer comfort.
• Restroom Facilities: To provide convenience to customers and staff.
• Trash and Recycling Bins: For waste disposal.
• Paint Mixing Station: If offering paint products.
• Key Cutting Machine: For offering key-cutting services.
• Shelving Accessories: Hooks, brackets, dividers, and pegboards.
• Store Fixtures: Display cases, bins, and hangers.
• Shopping Bag Dispensers: For customer use.
• Price Checking Stations: To allow customers to verify prices.
• Shopping Cart Corrals: For cart collection and organization.
• Loading Dock Equipment: If handling larger deliveries.
• Material Handling Equipment: For moving bulk materials.
• Inventory Management Software: To track and manage stock efficiently.
• Safety Signs: For indicating hazards and safety instructions.
• PPE (Personal Protective Equipment): For staff and customer safety.
• Cash Handling Supplies: Money trays, coin rolls, and cash bags.

The specific equipment you’ll need may vary based on the size and focus of your hardware store, but this comprehensive list should serve as a good starting point for your hardware store setup.

Key Points To Succeeding in a Hardware Store

Succeeding in the operation of a hardware store is a multifaceted challenge that demands careful attention to various key points:

• Focusing on a Niche: Specialization can set your hardware store apart. Concentrate on a particular niche, such as tools, building materials, or home renovation , to attract a specific customer base.
• Building a Customer Base: Establishing a loyal customer base is challenging during startup. Offer exceptional products and services to entice early patrons.
• Building Relationships: Forge strong connections with customers, suppliers, and employees. Nurture these relationships as they are vital for long-term success.
• Providing Desired Products and Services: Stock products and services that cater to your customers’ needs and preferences. Regularly solicit and act upon customer feedback.
• High-Level Customer Service: Prioritize exceptional customer service, as your customers are the lifeblood of your business. Go above and beyond to meet their needs.
• Providing Value: Consistently offer value to your customers through competitive pricing, quality products, and knowledgeable staff.
• Hiring the Right Team: Assemble a competent and dedicated team. The right personnel are instrumental in your business’s triumph.
• Effective Staff Management: Treat your staff respectfully and promote a healthy work environment. Effective management and teamwork enhance staff retention.
• Managing Cash Flow: Vigilantly manage your finances to ensure a healthy cash flow sustains your business operations.
• Cost Control: Keep costs in check without compromising product quality or customer service.
• Adapting to Change: Embrace change, whether it involves industry trends, business processes, or technology advancements. Adaptation is critical to staying relevant.
• Handling Revenue Fluctuations: Develop strategies to navigate revenue fluctuations, including seasonal variations.
• Competition Management: Effectively address competition by differentiating.
• Effective Marketing: Invest in effective marketing strategies to increase awareness of your hardware store. Whether you handle it in-house or hire professionals, marketing is essential for attracting customers.

Operating a hardware store requires meticulous attention to detail and a commitment to ongoing improvement.

Success hinges on balancing customer satisfaction, efficient operations, financial stability, and adaptability to industry changes.

Addressing these critical points, you can position your hardware store for enduring success in a competitive marketplace.

It’s vital to assess your skill set when running a hardware store. Ensure you possess the necessary skills or consider learning them.

If a crucial skill is lacking, hiring someone with expertise in that area is an option.

Essential Skills for a Hardware Store Owner:

• Product Knowledge: A deep understanding of hardware and construction materials.
• Customer Service: Excellent interpersonal and communication skills.
• Inventory Management: Ability to manage stock efficiently.
• Financial Management: Budgeting, accounting, and financial analysis.
• Marketing: Strategies to promote the business.
• Team Management: Leadership and personnel management.
• Technical Skills: Familiarity with hardware tools and equipment.
• Problem-Solving: Quick decision-making and creative solutions.
• Adaptability: Staying updated with industry trends and technology.
• Negotiation: Effective negotiation with suppliers and customers.

Knowledge Is Power if You Use It!

Knowledge, when applied, empowers businesses. Explore industry-specific information via the provided links for startup guidance and sustained operational success.

Trends and Statistics

Analyzing industry trends and statistics offers foresight, aids strategic planning, and positions hardware stores for market success.

See the latest search results for trends and statistics related to the hardware stores industry.

Hardware Store Associations

Trade associations provide industry news updates and valuable networking opportunities, offering members a competitive edge.

See the search results related to hardware store associations and the benefits of Joining the Chamber of Commerce.

The Top Hardware Stores

Studying established hardware stores reveals industry gaps, competitive advantages, and potential oversights for new entrants.

See the latest search results for the top hardware stores.

The Future of the Hardware Stores Industry

Researching the industry’s future aids in understanding market trends, ensuring informed decisions and strategic positioning for a new hardware store.

See the search results for the future of the hardware store industry.

Find a Hardware Store For Sale

Purchasing an existing business carries its advantages and drawbacks.

Benefits of acquiring an established hardware store:

• Immediate revenue generation upon acquisition.
• Avoidance of initial startup challenges.
• Established operational procedures.
• Transparent financial data, including revenue, profit, and expenses.
• Instant access to a pre-existing customer base.
• Benefits from an already established reputation.
• A higher purchase price is often due to goodwill, accounting for the established customer base.
• Altering operational processes may alienate existing customers.
• Acquisition includes both the positive and negative reputation of the business.

While a perfect hardware store might not be on sale, exploring the broader industry for potential acquisitions remains worthwhile.

Prospective buyers can venture into the provided link to discover available opportunities in the sector.

The latest search results for a hardware store for sale and others in the same category.

Franchise Opportunities Related to a Hardware Store

Owning a hardware store franchise warrants consideration before business initiation. Exploring such opportunities might introduce unforeseen prospects within the hardware domain.

• Adopt a tried-and-true business model provided by the franchisor.
• Leverage an established reputation and benefit from existing marketing.
• Obtain comprehensive knowledge about the operational aspects upfront.
• Receive consistent support from the franchise’s corporate office.
• Initial and ongoing costs can be high.
• Restrictions on implementing significant changes without the franchisor’s consent.
• Limited to approved products or services.
• Must strictly adhere to the franchise agreement’s stipulations.
• Periodic franchise fees are a recurring expenditure.

While a perfect match may not always be available, exploring franchises within the broader industry might prove beneficial.

Seek related franchise opportunities in the given industry through the specified link.

See the latest search results for franchise opportunities related to this industry.

Customer Expectations

Examining search results on customer expectations offers insight into hardware store shopping experiences.

It reveals potential oversights and opportunities to exceed expectations. Ensure all aspects are addressed.

See the search results related to customer expectations for a hardware shopping experience.

Expert Tips

Expert tips benefit all skill levels. Experts discover refined methods, while novices gain foundational knowledge and skill enhancement.

See the latest search results for hardware sales to gain tips and insights.

Hardware Store Insights

Reviewing tips and insights aids in identifying best practices and pitfalls for hardware stores, enhancing industry knowledge.

See the latest search results about insights into running a hardware store.

Hardware Stores Publications

Publications provide essential updates and ideas on hardware stores, ensuring you remain informed on industry trends.

See the search results for hardware store publications.

Hardware Stores Forums

Visit hardware store forums to engage in industry discussions. Gain insights from customer perspectives to understand their needs.

See the latest search results related to hardware store forums.

Online or local courses enhance skills and knowledge, benefiting your hardware store.

See the latest courses that could benefit a hardware store owner . Also, see our management articles for tips and insights for managing your business.

Hardware Store Blogs

Subscribe to leading hardware blogs. Filter out inactive or non-valuable ones. Achieve a refined, informative blog collection.

Look at the latest search results for top hardware blogs to follow.

Hardware Stores News

Consult news outlets for current media coverage on hardware stores. Stay informed.

See the latest results for hardware store news.

Explore YouTube for hardware store insights. Enhance your knowledge by clicking the link below.

YouTube videos related to hardware stores.

Privacy Overview

How to Start a Hardware Store Successfully + Complete Guide

Hardware stores are one of the cornerstones of a community. The products that hardware stores provide, contribute to the building of furniture, equipment, houses, stores, and infrastructure in a town or an area. These businesses are extremely important because they are places where professionals and DIYers gather and talk about the latest trade secrets.

These stores are also lucrative businesses because of their high profit margins. If you want to enter into the hardware business market, right now is especially a good time because of how DIY culture has grown and become popular among millennials.

In the next section of this article, we will go through all that you need to know on how to start a hardware store and the steps you need to take, to set up and run a professional business in this market.

How to Make A Hardware Store Successful

Like with anything, the first step is preparation and planning. This step involves many things the most important of which is doing market research to find out the hardware needs of your target customers in your locality and how you can turn those needs into a profitable business. Another thing to take care of during the preparation phase is finding the right location for your business.

After we’ve given you all the information you need to prepare and plan your hardware business, the next step is taking care of legal stuff and finances. Follow us along as we delve deeper into this subject and give you detailed information on how you can start a hardware business and turn it into a success.

Plan your Hardware Shop

Starting any business in a new market requires planning and preparation, even if you are experienced in starting and running businesses. If you want to know how to start a hardware business, it’s no different than any other business. So, what does it actually mean to plan and prepare for your hardware business? This step involves doing market research, finding a market niche, developing a business plan, finding a location, staffing, and designing the layout of your shop.

• Market Research is an important step in the planning of any business. Market research is the process of collecting data and information to assess the viability and profitability of providing a product or service in a new market. This step involves assessing the demands of a product or service in your area as well as analyzing the competition. You also need to find ways to target your target demographic.
• Finding a Market Niche is an important part of any business, especially in the case of hardware stores. This step is a result of doing thorough market research. There are many items that hardware stores provide such as power tools, hand tools, fasteners, pipe fittings, electrical supplies, compressors, locks, accessories, storage solutions, and even building materials. So, it’s important to find the right niche and eventually, expand your business from there.

• Developing a Business Plan in this field is the next natural step in the planning of your hardware business. After you’ve accomplished all the previous steps you need to figure out what your business model is going to be. Do you want to have a hardware shop that is completely your own? Or do you want to have partners? Or do you want to start a franchise store? What are your goals and visions for this business going to be?
• Finding a Location is an important step in setting up a hardware shop. To choose the right location to set up your hardware shop you need to find a place that has enough foot traffic and is close to your target audience. You should also need to consider the amount of space you are gonna need to display all your inventory items.
• Staffing is a significant part of any business. You need to figure out how many employees you will need and you need to make sure that your employees have sufficient training to help your customers.
• Designing the Layout of Your Shop is the next step once you’ve gone through all the previous steps. Make sure your layout is designed in a way that can assist your customers in finding whatever product they need. You should also make sure that the layout you have designed matches your inventory.

• Think about what items and from what company you want to order your initial inventory . Think about the variety of items that you want to sell at your shop and find a good brand or store to order from. If you want to order a wide range of high-quality products at an affordable price, Ronix can help you with that.

Form your Hardware Shop into a Legal Entity

After you have followed everything in our “How to Start a Hardware Store” guide, the next step is taking care of the legal status of your business. This step is different in every country and every locality. Therefore, our best advice in this regard is to consult a lawyer who specializes in commercial law. Alternatively, you can research laws for setting up a business in your locality.

The first and most important step in this regard that needs to be figured out is choosing a business structure. Common options are the following:

• Sole Proprietorship
• Partnership

 Each structure has its own legal and tax advantages and disadvantages. You need to research all these different steps to conclude your best option. It’s worth emphasizing that the best course of action in this regard is always getting a lawyer.

This section does not conclude all there is to read in this article about actions to take in setting up the legal status of your hardware store. Read the following sections to get all there is to know in terms of all the legal and financial actions that need to be taken care of if you want to know how to open a hardware store.

Register your Hardware Store for Taxes

As Benjamin Franklin once said, “Nothing can be said to be certain except death and taxes.”

If you own any business, you need to register for taxes. A hardware store is not any different. After you’ve taken the preliminary step of making the legal status of your hardware store official, you need to research your local laws to figure out the next steps for registering your business for taxes.

It’s worth noting that your business structure determines your tax obligations. If your company is an LLC, your tax obligations are different from a partnership, or a sole proprietorship. There are usually other tax-related steps you need to take depending on where your business is located. In the US for example, if you own a business and have employees, you need to get an employee identification number (EIN) from IRS.

As always, your best option for figuring out taxes is talking to a lawyer or a professional. It takes a lot less time than having to research all of the laws and requirements all by yourself and you will save yourself a lot of headaches.

Other steps for opening a hardware store, which is also related to taxes, are opening up bank accounts, taking care of accounting, and getting the required permits and licenses. In the next sections, we will talk about all these steps in detail.

Opening a Business Bank Account and Credit Card

Opening a business bank account and credit card is essential for any business owner. As with every other step in this guide on “How to Start a Hardware Business”, you need to research the options in your locality or area.

Again, your best option is to consult a professional. But here are the steps you need to take to open a business bank account and get a business credit card for your hardware business:

• Choose a Bank after doing thorough research about all the banks in your area that can provide you with your required service. Do research on what the terms and the fees are for opening up a business account. You can do this step by contacting the bank itself or via their website. Make sure you don’t miss the benefits, such as loans, that you can get if you open up an account in the bank you are researching.
• Take Care of Documents you would need to open a business account such as your required business licenses and permits, your identification documents, and proof of address. We will talk more extensively about business licenses and permits you would need to start a hardware business.
• After Filing your Application, the bank will review your application and if your application goes through, the bank will ask you to put in a deposit. You usually need to deposit a minimum amount of money in the bank to be able to finalize the process of making a bank account.
• Getting a Business Credit Card requires extra steps and you usually need to provide the bank with documents about your previous business history and your credit score. Alternatively, if you can not get a business credit card, you can usually use your credit card.

Set up Accounting for your Hardware Shop

When you set up any business, one of the most important things you need to take care of is accounting. It should come as no surprise that our top recommendation related to doing accounting is hiring a professional. Submitting an incorrect tax reform for example can have dire consequences. So always make sure your accounting is taken care of in the best way that you can manage.

A lot of small businesses usually do the bulk of their accounting and rely on professionals to give them their accounting reports. It’s always a good idea to do your research on the following topics whether you hire an accountant or not:

• Do research about different accounting methods like accrual basis accounting or cash basis accounting
• Choose an accounting software for your business. You can do your research and find the proper software for your own accounting needs.
• Tracking your inventory is an essential step in the accounting of a store. Make sure you have a system set up for tracking your inventory.

Get the Necessary Permits and Licenses for your Hardware Store

One of the main requirements for opening up a hardware business is getting the required licenses and permits. Depending on where you set up your business, you will need different business licenses and permits for your business. Each country, state, or city is markedly different in this regard.

You can ask officials in your city or hire a professional to help you get the required permits and licenses for your hardware store. Your required permits and licenses may include the following:

• Business License
• Sales Tax Permit
• Building Permits and Zoning Permits
• Signage Permits
• Permits from the Fire Department and the Health Department

Get Hardware Shop Insurance

After you have gone through all the previous steps, you need to take care of insurance. Depending on what your needs are you need a range of different insurances. Most businesses will need general liability insurance . A general liability insurance takes care of any bodily injury, property damage, or personal injury that is caused in your area of business as well as any medical payments or legal costs.

Depending on the unique situation of your business and your store, you might need the following insurance:

• Product Liability Insurance
• Worker’s Compensation Insurance
• Property Insurance
• Cyber Liability Insurance

You should always consult with professionals about what types of insurance you will need for your business. So, always talk to an insurance broker or a lawyer to see what type of insurance policy you will need for your hardware business.

Define your Hardware Store Brand

One of the most important steps in the branding of a hardware store is choosing a name for your business. Be careful when choosing a name for your business. It’s usually hard to change the name of your business once you have chosen a name and made it official.

Another step in defining the brand of your business is choosing a logo. Make the logo interesting and relatable for your customers. You also need to think about your brand values and find ways to share the story of your brand. To bring awareness to your brand you can utilize the following:

• Signs: Using eye-catching signs in public is one of the oldest advertising and branding techniques.
• Social Media: Using social media has become a staple for every business nowadays, whether small or big. Taking advantage of social media is an essential part of garnering attention to your brand, attracting customers, and creating a community.
• Website: Having a website and hiring SEO (Search Engine Optimization) services can significantly boost your brand recognition and send potential customers your way.

If you ever order tools and equipment from Ronix, you will get advertising and branding services on the house! We provide all of the advertising materials our customers need such as signs, banners, business cards, etc.

Create your Hardware Shop Website

Now that you know most of what there is to know in general on how to start a hardware shop, you should make sure that you don’t skip this step. Making a website is something that can easily skyrocket your hardware business.

You have a lot of options for creating and managing websites nowadays. The first step is getting a hosting service and buying or renting a domain name. What you need to do next is set up your website. Some platforms give you layouts for your commercial needs, sometimes without the need for any knowledge about web development. But if you want the most professional result, you can always hire a web developer.

Depending on the functionality that you want for your website. If you want to sell products from your website, you need different services set up on your website such as e-commerce and payment functionalities.

Managing your website is the next logical step. Depending on how you want to run your website and what you want to use it for, you might need SEO services or you might need to create content for your website.

Set up your Business Phone System

Now that you know how to set up a hardware store, do not forget this last step. You might need a business phone system.

A business phone system is a system that allows businesses to satisfy all their communication needs within an internal network. What you need to do is figure out what your needs are. Your specific needs for a business phone system include the number of employees, your desired features, as well as expected call volume.

After you have determined your specific applications for a business phone system, you can then choose a phone provider and a method for proving a business phone system. The most popular method for setting up a business phone system is a VoIP (Voice over Internet Protocol) system which uses your internet.

How Much Does It Cost to Start a Hardware Store?

Now that you know how to start a hardware business including all the steps, you might want to know what the cost of all these tasks is. There are different estimates based on your location. The lowest estimate in the US is around 80,000 dollars. You should always do your research, talk to a professional, and get your estimate based on your location.

 The first thing that we’ll do is give you a list of all the different costs. The amount of the cost depends on your specific situation including your location, how big of a store you want, and how big of an inventory you want to start with. The major costs are at the top of the list. You can also hire a professional to assess all of the costs of your business.

• Purchasing or leasing a space
• Your starting inventory
• Staffing and training
• Costs of permits and licenses
• Store Equipment
• Marketing and Advertising

If you want to buy a large inventory from a brand that produces a wide range of high-quality products at an affordable price that can not be competed with, you can order from Ronix. We also offer free advertising services to our customers.

How to Start a Small Hardware Business

Starting a small hardware business is not any different from starting a bigger business. All the steps are similar. There are plenty of profitable small hardware stores which also play a pivotal role in their respective communities. Every step is the same but perhaps their initial costs are not as heavy as bigger stores.

If you are a small business you should make sure of plans and preparation. You should do all of your research so that you can find the right place, the right market, and the right brand to order from. Ronix can provide you with a wide range of high-quality items at an affordable price. We also provide our customers with free branding and advertising services.

This concludes the end of our “How to Start a Hardware Business” Guide. If you want to order from us, you can get more information by browsing through our catalogs, and websites. You can also contact our sales experts to get more information.

What are the initial steps I need to take to start my own hardware store business?

The first step is planning by doing market research. Depending on your local laws, you have to take care of legal and financial aspects of your business which includes registering your business entity, setting up a business account, getting insurance, and marketing. Also, think about your initial inventory.

What types of products should I stock in my hardware store, and how do I decide on the range of items to offer?

It depends on your market niche and the customers that you are trying to target. Power tools, hand tools, attachments, fasteners, pipe fittings, safety equipment, and building materials are some of the products that hardware stores sell.

29 October 2023

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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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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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Did you know that a well-written and researched business plan is the key to getting funding for your Hardware Store business?

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Our Hybrid Business Plan Template is not just high quality, in-depth and researched, but also a business plan that has examples for you to insert your own market and business specifics into.

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.

And with our business plan template, you’ll be able to seek funding from investors and be up and running in no time.

With modifications (Like the name of your company and owner’s bio, market, financials, company images and location specifics) you can customize this business plan for your exact needs.

Here’s why a free business plan template can risk your chances of funding:

Lenders and investors see thousands of business plans and they know when you’re using a generic free template because the “Wording is just not right.”

You can have the best idea for your venture and pitch it to them perfectly, however when you leave and they review your plan what will it really say about you?

And free isn’t really free if it costs you your funding .

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Start your business off the right way with our comprehensive Hybrid business plan template.

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

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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.

Click here for screenshots of the plan you will be receiving.

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.

Click here for screenshots of these documents.

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.

This funding package also includes the Funding eBook bundle to educate you on your funding options and how to best present your business concept. These 4 eBooks guide you through individual interventions, second-party arrangements, corporate funding options, government interventions, managing business cash flow, quick start funding overview, exit strategy, common mistakes to avoid when pitching your concept, and much more.

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.

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“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.”

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“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!”

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

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

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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.
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• 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).

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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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Electrical Supply Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Construction & Engineering

Are you about starting an electrical supply business? If YES, here is a complete sample electrical supply business plan template & feasibility report you can use for FREE .

Okay, so we have considered  all the requirements for starting an electrical supply business. We also took it further by analyzing and drafting a sample electrical supply business marketing plan template backed up by actionable guerrilla marketing ideas for electrical supply businesses. So let’s proceed to the business planning section.

As an aspiring entrepreneur who wants to delve into a business with huge returns on investment, one of your options is to venture into the construction industry. There are several money-spinning business opportunities in the construction industry and one of them is to start an electrical supply business.

Just like other investment vehicles, there are potential down sides that you need to look out for if you want to be successful in this business. One of the major risks in electrical supply is a sudden downturn in the economy.

Part of what you need to do to make headway in this line of business is to ensure that your store is properly positioned and you a have good business relationship with construction contractors, constructions companies and key players in the real estate industry.

If you are truly convinced that starting an electrical supply business is the right business for you, then you need to write your own business plan . The essence of writing a business plan before starting any business is for you to have a roadmap of how you want to setup, manage and expand your business.

Below is a sample electrical supply business plan template that will help you successfully write yours with little or no stress.

A Sample Electrical Supply Business Plan Template

1. industry overview.

Electrical supply business is part of the Electrical Equipment Wholesaling industry and this industry consists of businesses that are into the sale and supply of wiring, lighting fixtures and light bulbs, relay and industrial controls, switchgear and switchboard apparatus, motors and generators, power and distribution transformers and other electrical equipment.

On the average, an electrical supply company distributes electrical construction materials, such as wiring supplies, electrical light fixtures, light bulbs, security systems, electrical power equipment, switchboards, circuit breakers and fuses to construction companies. Hence, demand from building, developing and general contracting largely determines industry revenue growth.

In addition, demand for many of the industry’s products depends on industrial production and electrical power consumption. As manufacturing activity in the economy increases, they purchase industry goods to both outfit their factories and to act as intermediary components.

If you are a closer watcher of the Electrical Equipment Wholesaling industry, you will agree that over the past five years, the Electrical Equipment Wholesaling industry has struggled to rebuild itself, even as the overall economy strengthens.

Industry goods are purchased by professional contractors and consumers engage in remodeling and construction projects.

Rising consumer confidence and household income have helped ignite remodeling activity forestalled during the recession, providing additional demand for electrical equipment used in home improvement projects. Even so, rising competition from large home improvement stores has stifled revenue growth for electrical supply stores.

The Electrical Equipment Wholesaling industry is indeed a large industry and pretty much active in most countries of the world. Statistics has it that in the united states of America alone, there are about 17,709 registered and licensed electrical supply stores scattered all across the United States responsible for employing about 226,258 people and the industry rakes in a whopping sum of $179 billion annually.

The industry is projected to grow at 2.2 percent annual growth within 2013 and 2018. It is important to state that The Electrical Equipment Wholesaling industry has no companies with major market shares.

A recent report published by IBISWORLD shows that over the past five years, the Electrical Equipment Wholesaling industry has grown by 2.2 percent to reach revenue of $179bn in 2018. In the same timeframe, the number of businesses has grown by 0.7 percent and the number of employees has grown by 3.6 percent.

The Electrical Equipment Wholesaling industry is highly regulated in the United States of America and anyone who aspires to start an electrical supply business must apply and obtain a license before they can legally operate in the industry.

No doubt, the Electrical Equipment Wholesaling industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business.

2. Executive Summary

Mac Bruce™ Electrical Supply Store, Inc. is a registered electrical equipment supply store business that will be located in one of the busiest streets in Albuquerque – New Mexico. We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the kind of standard electrical equipment supply store that we intend launching and the facility is located in the heart of the city.

Mac Bruce™ Electrical Supply Store, Inc. will supply electrical construction materials such as wiring supplies, electrical light fixtures, light bulbs, security systems, electrical power equipment, switchboards, circuit breakers and fuses et al to construction companies.

We are aware that there are several electrical equipment supply outlets all around New Mexico, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete in the industry. We have an online service option for our customers, and our outlet has various payment options.

Mac Bruce™ Electrical Supply Store, Inc. will ensure that all our customers are given first class treatment whenever they visit our electrical equipment store. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they grow to. We will ensure that we get our customers involved in the selection of brands that will be on our store.

Mac Bruce™ Electrical Supply Store, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a business, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products.

Mac Bruce™ Electrical Supply Store, Inc. is owned by Mac Bruce and his immediate family members. Mac Bruce has a B.Sc. in Business Administration, with over 10 years’ experience in the electrical equipment wholesaling industry, working for some of the leading brands in the United States.

Although the business is launching out with just one outlet in Albuquerque – New Mexico, but there is a plan to open other outlets all around major cities in the United States of America.

3. Our Products and Services

Mac Bruce™ Electrical Supply Store, Inc. is in the electrical equipment wholesaling industry to service a wide range of clients and of course to make profits, which is why we will ensure we go all the way to make available a wide range of electrical equipment from top manufacturing brands in the United States.

Our product offerings are listed below;

• Lighting fixtures and light bulbs
• Relay and industrial controls
• Switchgear and switchboard apparatus
• Motors and generators
• Power and distribution transformers
• Other electrical equipment.

4. Our Mission and Vision Statement

• Our vision is to become the leading brand in the electrical equipment wholesaling industry in New Mexico and to establish a one stop electrical equipment supply store in Albuquerque.
• Our mission is to establish a world – class electrical equipment supply store that will make available a wide range of electrical equipment from top manufacturing brands at affordable prices in Albuquerque – New Mexico.

Our Business Structure

Mac Bruce™ Electrical Supply Store, Inc. is looking towards building a standard business that can be listed among the top – flight electrical supply stores in Albuquerque – New Mexico. For that singular reason, we will make sure that we establish the business on a solid business structure.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager
• Human Resources and Amin Manager

Merchandize Manager

Sales and Marketing Manager

• Accountants / Cashiers
• Customer Services Executive

Truck and Van Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

Admin and HR Manager

• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.

Store Manager:

• Responsible for managing the daily activities in the store / warehouse
• Ensures that proper records of electrical equipment are kept and warehouse does not run out of products
• Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate
• Controls electrical equipment distribution and supply inventory
• Supervises the workforce in the electrical equipment sales floor.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of electrical equipment are purchased and retailed/supplied in good price that will ensure we make good profit
• Responsible for the purchase of electrical equipment for the organizations
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization
• Assists in loading and unloading goods/electrical equipment
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment, such as hazardous material placards.
• Assists the transport and logistics manager in planning their route according to a pick – up and delivery schedule.
• Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries

6. SWOT Analysis

Any profitable business is bound to be competitive and as a new business, you must be ready to compete in the industry and competing in the industry means that you must follow due process in establishing a business. We are quite aware that there are several electrical equipment supply stores all over Albuquerque and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Mac Bruce™ Electrical Supply Store, Inc. employed the services of an expert HR and Business Analyst with bias in supply chain business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Mac Bruce™ Electrical Supply Store, Inc.;

Our business is located in a city with heavy construction and real estate activities and also, we can boast of having good business relationship with top manufacturers in the electrical equipment manufacturing industry.

A major weakness that may count against us is the fact that we don’t have our own electrical equipment production plant, we are a new electrical equipment supply outlet and we don’t have the financial capacity to compete with multi – billion dollars electrical equipment supply stores when it comes to supplying at rock bottom prices.

• Opportunities:

The fact that we are going to be operating our electrical equipment supply store in one of the busiest construction locations in Albuquerque – New Mexico provides us with unlimited opportunities to sell our electrical equipment to a large number of construction contractors.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they order electrical equipment from us; we are well positioned to take on the opportunities that will come our way.

A major threat that we are going to face as an electrical supply business operating in the United States of America is uncertainty in government policies as it relates to price control and influx of electrical equipment manufactured outside the United States of America.

When the prices charged by manufacturers to wholesalers’ declines, wholesalers typically have to reduce their selling prices to retailers. This results in subdued revenue growth for wholesalers, even if demand expands.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the electrical equipment supply Industry, you will quite agree that the changes in disposable income, consumer sentiment, ever changing trends and of course the rates of homeownership are major growth drivers for this industry.

No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth.

So also, the rising demand for both building renovations, as a result of increasing disposable income and consumer sentiment, will result in revenue growth, but profit margins will stagnate as electrical equipment supply stores keep prices low to attract more sales amid growing competition.

A close watch on industry activities reveals that the retail market was hit hard by the recent economic downturn. The construction of new homes is a primary market for industry products, so as housing starts, increase demand tends to follow.

Moreover, as home builders have increased their use of electronics, demand for complementary electrical equipment has risen. In 2018, housing is expected to increase, presenting a potential opportunity for the industry. As part of marketing strategies, electrical equipment supply stores partner with key players in the construction and real estate industry. They are in the best position to offer you electrical equipment supply contract.

8. Our Target Market

We have positioned our electrical equipment supply store to service the construction industry in Albuquerque – New Mexico. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We are in business to supply a wide range of electrical equipment to the following;

• Construction Companies
• Construction Contractors
• Home Remodeling Companies
• Small Electrical equipment Retail Stores

Our competitive advantage

A close study of the industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are prepared to compete favorably with other leading electrical equipment supply stores.

Our electrical equipment supply store is located in a corner piece property in the largest electrical equipment market in Albuquerque – New Mexico. We have enough parking space that can accommodate over 10 cars/trucks per time.

One thing is certain, we will ensure that we have a wide range of electrical equipment available in our store at all times. It will be difficult for customers to visit our store and not see the type of electrical equipment that they are looking for.

One of our business goals is to make Mac Bruce™ Electrical Supply Store, Inc. a one stop electrical equipment shop for customers. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

We are in the electrical equipment wholesaling industry to maximize profits and we are going to go all the way out to ensure that we achieve or business goals and objectives. Mac Bruce™ Electrical Supply Store, Inc. will generate income by;

10. Sales Forecast

One thing is certain when it comes to electrical equipment supply stores, if your store is stocked with various types of electrical equipment and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Albuquerque – New Mexico and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.

We have been able to examine the electrical equipment wholesaling industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.

Below is the sales projection for Mac Bruce™ Electrical Supply Store, Inc., it is based on the location of our business and other factors as it relates to electrical equipment supply stores startups in the United States;

• First Fiscal Year: $450,000
• Second Fiscal Year: $950,000
• Third Fiscal Year: $1. 9 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor retailing same electrical equipment and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Mac Bruce™ Electrical Supply Store, Inc., we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for key players in the construction and real estate industry.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the electrical equipment supply industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Albuquerque – New Mexico.

In summary, Mac Bruce™ Electrical Supply Store, Inc. will adopt the following sales and marketing approach to win customers over;

• Introduce our electrical equipment supply store by sending introductory letters alongside our brochure to construction companies, construction contractors, home remodeling companies and other key stake holders in Albuquerque – New Mexico
• Ensure that we have a wide range of electrical equipment from different manufacturing brand at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our electrical equipment supply store
• Position our signage/flexi banners at strategic places around Albuquerque – New Mexico
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our electrical equipment supply store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our electrical equipment supply store.

Mac Bruce™ Electrical Supply Store, Inc. has a long – term plan of opening outlets in various locations all around New Mexico and key cities in the United States which is why we will deliberately build our brand to be accepted in Albuquerque before venturing out.

Here are the platforms we intend leveraging on to promote and advertise Mac Bruce™ Electrical Supply Store, Inc.;

• Place adverts on community – based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Albuquerque – New Mexico
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our electrical equipment supply store business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to electrical equipment supply stores, it is normal for consumers to go to places where they can get electrical equipment at cheaper price which is why big players in the industry will attract loads of clients.

We know we don’t have the capacity to compete with multi – million – dollar electrical equipment stores but we will ensure that the prices and quality of all the electrical equipment that are available in our store are competitive with what is obtainable amongst electrical equipment supply stores within our level.

• Payment Options

The payment policy adopted by Mac Bruce™ Electrical Supply Store, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Mac Bruce™ Electrical Supply Store, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for supply of our electrical equipment without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for products purchased.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and one stop electrical equipment supply business in Albuquerque – New Mexico and here are the key areas where we will spend our startup capital;

• The total fee for registering the Business in Albuquerque – New Mexico – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of Mac Bruce™ Electrical Supply Store, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring Business Consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $65,600.
• The cost for shop / warehouse remodeling (construction of racks and shelves) – $20,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of electrical construction materials, such as wiring supplies, electrical light fixtures, light bulbs, security systems, electrical power equipment, switchboards, circuit breakers and fuses) – $250,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs – $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
• The cost of launching a Website – $600
• Miscellaneous – $10,000

We would need an estimate of $750,000 to successfully set up our electrical equipment supply store in Albuquerque – New Mexico.

Generating Funds/Startup Capital for Mac Bruce™ Electrical Supply Company, Inc.

Mac Bruce™ Electrical Supply Company, Inc. is a private business that is solely owned and financed by Mac Bruce and his immediate family members. He has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about $250,000 (Personal savings $200,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Mac Bruce™ Electrical Supply Company, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of quality electrical equipment a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Mac Bruce™ Electrical Supply Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check : Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the shop: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Purchase of initial supply of electrical construction materials: In Progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Compilation of our list of products that will be available in our store: Completed
• Establishing business relationship with vendors – manufacturers of electrical equipment and construction contractors: In Progress

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Hardware Retail Franchise Business Plan

Start your own hardware retail franchise business plan

Hisarlik Hardware

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

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.

• 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.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

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.

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 e lectronic 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

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. 

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 how to do a market analysis for your business plan.">

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

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

4.3.2 Main Competitors

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.

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. 

Strategy and Implementation Summary

Emphasize Customer Service

Hisarlik Hardware will build a reputation of fantastic customer service, building upon what Building Blocks stores and the Building Blocks brand have already established.  We will establish our business, by offering a clear cut leader in retail hardware in downtown Wilusa.

Build a Relationship-Oriented Business

Fantastic service will lead to long term loyal relationships with our customers and clients.  The goal is to have our customer base become reliant on Hisarlik to stock items and have solutions for their needs.  The customers will soon understand the value of the relationship.

Focus on Target Markets

Hisarlik will focus on the market segments identified earlier in this document.  Each of the market segments will have sales initiatives to focus on each group.

Differentiate and Fulfill the Promise

Hisarlik Hardware  can’t just market and sell products and services, we must actually deliver as well.  We need to make sure we have the knowledge-intensive business and service-intensive business we claim to have.  This service has to be consistent and deliver what the customer is looking for.

5.1 Marketing Strategy

The Building Blocks Power Events are advertising programs supported by national advertising during peak buying periods for planned home care products.  Power Events focus on those high traffic times of the year with a multimedia campaign.  A strong mix of national television and radio advertising, circulars, Sunday supplements, and POP sign kits deliver a sense of urgency to visit the store.  A small 8-page and large 12-page circular are available for each Power Event to help carry the theme and promote the sale.  There are four Power Events each year.

Hisarlik Hardware will also place ads in the Yellow Pages.  The Yellow Pages continue to be a source of a good number of customers.

Hisarlik Hardware will also rely on the media to help spread the word about this new business downtown.  Fox Television’s local morning TV show goes on location to promote local businesses.  Radio can be used in many different ways, radio remotes for the opening of the store.  Wilusa Magazine has already identified an issue, a follow up story is very appropriate.  The Wilusa Star covers new and significant businesses in Wilusa, Hisarlik feels this store will fit that description.

5.1.1 Potential Customers

Every person is a potential customer of a hardware store.  Hisarlik Hardware will carry items everyone needs.  The average household spends $135 per year on items found in a hardware store according to Yorikle, a research firm retained by Building Blocks .  The key to getting the potential customer to spend their $135 or more in Hisarlik Hardware are include the following attributes:

• convenience
• reliability
• knowledgeable
• progressive
• exceed customer expectations

All of these attributes will be present in Hisarlik Hardware.  In order to be convenient, Hisarlik will have to adapt to its environment, the location will be key to making it easy for customers to get to the store.  The store must also be open when the customers arrive.  In addition, a delivery service will be available to make it easier for regular customers to not have to leave what they are doing to get the products they need.  There will also be accounts set up to make it easier for regular customers to get items, without having to deal with petty cash, company credit cards, or company checks for each visit to the store. 

Customers expect to get great service at Building Blocks Hardware stores, which is evidenced by the fact 50% of all hardware shoppers will avoid the “Big Box” retailers and opt instead for the personal service like  Hisarlik Hardware .  We will also need to be reliable, which means that customers will depend on us to inventory what they need and understand and anticipate their needs.  Customers want to come into a hardware store having the confidence they will find what they need.  The store will possess a knowledgeable and friendly staff.  The staff has to understand and interpret what the customer needs and find the product that will fit that need.  Hisarlik Hardware will also be progressive, by that we mean we will continue to evolve and understand what the customer needs and develop new markets where the need exists.

5.2 Sales Strategy

Hisarlik Hardware  will be offering a convenient solution which all downtown residents need.  Customers will be introduced to Hisarlik through targeted advertising, direct mail, signage, and word of mouth.  Hisarlik will also take advantage of all the Building Blocks programs that help create loyalty and awareness among the potential customers in the market.

The direct sales force will consist of two seasoned sales people led by Hector Priamson.  The focus will be on property managers and all downtown businesses to create an awareness of the store location and the fact that the store is a potential solution for retail hardware needs.

Glaucus Sarpedon will also work on the commercial accounts and government accounts located in the downtown market.

5.2.1 Sales Forecast

The sales projections start in the month of March, 2004.  Sales steadily increase along with the awareness of the store through September.  In September, there is a small dip in sales then a steady rise through the Christmas season and December the stores best month of the year.  There is a traditional slow season that runs through January and February each year.  The goal of Hisarlik Hardware will be to develop programs that take as much slack out of the sales as possible and get them in line with the rest of the sales year. 

Sales are estimated by Building Blocks to be $125 to $175 per square foot of the total area of the store.  The Gross Margin will range from 40% to 45%.  There is a 25% growth predicted for the second year of sales driven by awareness, growth in rentals and growth in commercial sales. 

The immediate goal is to achieve robust sales in the first year.  It is thought that double digit percentage total sales increases can be achieved and maintained throughout the five years of this business plan.

5.2.2 Sales Programs

Building Blocks has loyalty programs like Building Blocks Rewards that Hisarlik Hardware  will participate in.  This program has been developed to build a loyal following of customers that use the card for shopping benefits. 

By the second year accounts will be set up for businesses, property managers, and contractors to make shopping easy for them.  This program will allow these customers to shop and make it easy for them to pay for items on account.  This program will have to be managed very carefully, and Hector Priamson’s financial background will prove to be very useful in managing these accounts. 

5.3 Strategic Alliances

Hisarlik Hardware has already contacted Scamander’s Food Market and have the word of the General Store Manager that they would be interested in developing programs to work together with Hisarlik for the betterment of both businesses.  Both will stand to benefit from each other.

5.4 Milestones

Hisarlik True Value has worked with True Value to establish a realistic time line to work within to have the store open for business in March of 2004.  The time line is listed in the Milestones table below.

5.5 Competitive Edge

The competitive edge has been covered throughout this document.  Location is the biggest key to this business.  There are no true competitors in our business in downtown Wilusa.  Our future customers have had to work harder to get the same or lesser service less conveniently.  We will be in their back yard and be easy to work with and have products they need. 

Hisarlik Hardware have staff that understand customer service and how to treat customers so that they want to shop in the Hisarlik Hardware environment.

Web Plan Summary

Obviously, we are in the age of computers and the Internet.  Customers are ultimately looking for the simplest, most reliable, and least consuming way to get the goods and services they need. 

Therefore, a Web strategy is important to keep up with the changing world and stay ahead of potential competition.  Customers that buy on the Internet do not care where a business is located, so it is important that a name and a reputation be established that customers can rely on whether it is in the store or on the Internet.

6.1 Website Marketing Strategy

Building Blocks has a sensational program for their members.  It allows a member to establish their own website with member information and use the established product background linked to buildingblockshardware.com.  Customers can then go on line and order products very easily.  This is a program that a normal small business could not afford to invest in. 

The Internet is also a valuable communication tool with customers.  The site includes a custom home page, store location along with a map, store hours, services and selection, in-store coupons, 1,000 item in-store catalog, and as many custom pages as a member needs.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Hisarlik Hardware will be managed by Hector Priamson on a day-to-day basis.  He will devote 100% of his time to this venture.  There are two key employees joining Hector in this venture, Penthesilea Thracian and Glaucus Sarpedon. 

Hisarlik expects that there will be up to 17 employees in total, some full time and others part time.

7.1 Organizational Structure

Hisarlik Hardware will be managed, organized, and run by Hector Priamson.  The company will have three key employees, Hector, Penthesilea (Penthe) Thracian, and Glaucus (Glus) Sarpedon.  These three all know each other very well, Penthe and Glus having worked for Hector in the past in the oarsports industry.  They bring a unique set of skills to this venture which will prove invaluable in the future. 

The company will be organized with Hector Priamson as its president.  He will be responsible for all of the financial affairs, inventory management, cash management, manage the cashier staff, advertising, marketing, as well as the day-to-day contact with Building Blocks .  Hector will also have relationships with attorneys and accountants to stay on top of all business matters.  Additionally, he will also manage the day-to-day operation of the rental business.  While this seems like a lot, these are routine tasks Hector has performed for many different companies for many years.  As good as Hector is, he can’t do it all.  He will rely on two former employees from his. 

Penthesilea Thracian has been in the oarsports business for the better part of 30 years.  She is looking for a change and Hisarlik Hardware is just what she had in mind.  Penthe has managed teams, and developed and run programs from the ground up.  Her experience led her to winning the 1981 Salamis 500 as the crew chief of Al Cibiades’ trireme at Dardanelles Racing.  Working with large companies and manufacturers that wanted absolute accountability in their programs, Penthe was the gal that was brought in to handle it.  Over the past 5 years, she has added another unique skill that will nicely complement her mechanical skills; hospitality.  Penthe managed the hospitality program for Corinth Racing.  That job really entailed looking after people and providing great service, a skill that will be invaluable for Hisarlik Hardware . 

Glaucus Sarpedon is an extremely driven young man who graduated from Hattusili University.  Glus decided he wanted to work in oarsports.  When he put his mind to it, that is exactly where he ended up.  He joined Dardanelles Racing where he worked in the hospitality area, also gaining the valuable service quality that will be necessary for this new role.  He also had the responsibility of moving, setting up, and servicing the complete hospitality fleet.  He has mechanical skills that he will bring with him as well.  Glus also filled the role of Team Coordinator, this role is the “quarterback” of the organization.  He was responsible for anticipating what the team was going to need, when they would need it, and how much they would need.  Glus will be a huge asset to the company. 

Each of these folks have departments that will be assigned to them and a staff that will help them manage the departments.  They will be responsible for hiring the staff that will report directly to them.  Hisarlik Hardware will also develop an incentive plan rewarding successful departments and department sales growth.  The experience and trust Hector Priamson has in these two individuals will allow him to focus on managing the business.

7.2 Management Team Gaps

A review of potential gaps in the experience or know-how of this venture does not show any glaring weaknesses.  Hisarlik Hardware ‘s Achilles heel is the lack of actual hardware store business experience.  While the three key individuals do not have that direct experience, they will draw heavily upon the instruction, training, and specialist support available from the Building Blocks co-op organization. Building Blocks is in the business of passing on their experience and knowledge to assist their members to be be successful.

7.3 Personnel Plan

The personnel plan was developed in conjunction with Building Blocks and some consulting with the folks at Konya Building Blocks Hardware in Catalhoyuk. 

The plan was developed so there are at least 2 managers, 1 cashier, and 2 specialists on duty at all times.  The average number of people working at any one time is between 5.5 and 7.1 on busy Saturdays.  All employees will have the ability and knowledge to run the cash registers. 

Hector Priamson, Penthesilea Thracian and Glaucus Sarpedon will start with base pay as laid out in the following table.  The cashiers will be paid $7-$8 per hour.  Full-time specialist staff will be paid between $9 and $10 per hour.  Other part-time help will be paid $6 per hour. 

It is felt there is a pool of retired “handy men” that can fill many of these roles.  The $6 per hour employees are thought to be high school or college kids. 

Employee hiring will start in January, training will begin in February and work in March.

Financial Plan investor-ready personnel plan .">

The business will need substantial start-up capital.  It is expected that a good portion of that amount will be secured through SBA financing. 

Sales are expected to start conservatively the first year and increase steadily through the fifth year of operations.  Operating income will pay back the start-up loan over a seven year amortization. 

Inventory Turnover ratios are predicted to be in excess of 4.3.  The goal will be to get this ratio to exceed 5.0.  To do that Hisarlik will be required to purchase smartly and drive sales. 

Cash will be retained in the business to cover cash operating needs as well as future expansion of other Hisarlik Hardware locations. 

It is expected that dividends will be paid to the investors annually.  The amount of the dividends is estimated to be 50% of profits. 

After the first year of operations, it is expected that Hector Priamson will be able to trim expenses in the business as efficiency, experience, and knowledge work together and help the business operate better.  Estimates are extremely conservative in the budgeting process.

8.1 Start-up Funding

Hector Priamson will invest cash, benefits and labor to the start up.

Troy Enterprises  is in the process of negotiating with potential investors for the seed cash needed to start the business.  It is expected that a tidy sum will be raised to start the business.  It is expected that no more than 15% interest will be given to each investor.

Bank Financing

Troy Enterprises  is submitting business plans and other requested documents to financial institutions in pursuit of the additional money needed to finance the rest of the company and provide operating cash for the business.  It is expected that the loan will be a part of the SBA 7(a) program.  It is assumed that the terms of the loan will require repayment in 7 years, at a rate of 8%. 

8.2 Important Assumptions

The table below presents the assumptions used in the financial calculations of this business plan.

8.3 Key Financial Indicators

As shown in the Benchmarks chart below, our key financial indicators are:

• Projected Sales:   Projections are based on estimates calculated by Building Blocks based on demographics and potential in the market place.  Sales will consistently increase as the store gains experience, in addition to the consistent growth expected in the home improvement category nationwide. 
• Gross Margins:   Building Blocks expects that the Gross Margin can increase in years 2-5, however for this analysis, the gross margin was kept consistent at 42% on inventory sales.  Overall, the rental and other income have driven the gross margin up by 2 points.  Building Blocks expects that Gross Margin on inventory could rise as high as 44%. 
• Operating Expenses:  Operating expenses growth is primarily caused by an increase in salaries as the business gets established, as well as a small percentage increase for COL over the next five years.  Operating expenses are expected to increase at a rate of 6-8% per year. 
• Inventory Turnover:   Hisarlik Hardware  will maintain just-in-time inventory levels.  Building Blocks distribution will help maintain those levels.  Inventory is projected to turn 4.3 times per year.  The goal is to get inventory turns to exceed 5.0, through good purchasing decisions.

8.4 Break-even Analysis

The Break-even Analysis has determined approximate break-even sales as shown below.  There will be a constant monitor on this number in an attempt to lower it.  Once again, it is believed that efficiencies, experience, and knowledge will help in decreasing the break-even number. 

Sales are expected to be well in excess of this number for each month.

8.5 Projected Profit and Loss

The Profit and Loss statement makes it very clear which areas will need attention.  Payroll is by far the largest expense the company incurs (besides cost of goods sold).  Staff will need to be managed and hours regulated so that hours worked correlate to sales.  Emphasis will be placed on minimizing expenses that do not help generate bottom line. 

The company generates a profit as sales revenue gets above the break-even line.  A push on sales will be very important in generating bottom line profits.  Interest expense is also a large line item that diminishes over time, but is a necessary expense on the front end of the business.

8.6 Projected Cash Flow

The company generates a net positive cash flow in its first year.  It is assumed that Accounts Payable will be repaid in 45 days.  Repayment of debt is a significant factor in the amount of cash that gets paid out.  Long-term debt is on a 7-year amortization. 

Dividends are paid in December of each year.  The assumption is that 50% of profits are paid out to shareholders and investors.

8.7 Projected Balance Sheet

The balance sheet is very straight forward.  No significant purchases of assets are expected or anticipated. 

Using Building Blocks’ IAIS, online ordering, and weekly delivery systems allows Hisarlik Hardware  to restock inventory in a just-in-time fashion.  Inventory levels will be maintained with re-orders tied to Cost of Goods Sold.  Additional inventory purchases will be made one month prior to participation in the quarterly Building Blocks nationally advertised Power Event sales. The first Power Event coincides with Hisarlik Hardware’s  Grand Opening.  Inventory will be allowed to drop somewhat at the end of December, after the Holiday purchasing, and for year-end tax accounting purposes.

There is a possibility of rental purchases in the future if the right products are found to add to the current inventory.

8.8 Business Ratios

The Ratio Analysis looks very encouraging.  Industry Profile data is based on Standard Industrial Classification code 5252, Hardware Stores. 

• Gross margin : Increases each year and peaks at 45%.  It is anticipated that after year two, the gross margin percentage could be increased by as much as 2 points.  The Gross Margin is a little high due to the fact that the rental income is included in this calculation with no cost of sales.
• Selling, General and Administrative Expenses : It is encouraging that these expenses as a percentage of sales are decreasing.  These expense will continue to be looked at to find new savings to deliver bottom line.
• Quick Ratio : The Quick Ratio is good staying in the 2 range for the entire first 5 years.
• Net Profit margin : Net profit margin continues to grow.  The goal will be to minimize expenses and get the Net Profit margin in the 15 range.
• Inventory Turnover : Inventory turnover as calculated here is 2.3 to 3.5 times.  The goal will be to get that percentage to exceed 5 times per year.  The calculation is skewed on this table because of rental income being included in sales.

8.9 Long-term Plan

The long term plan is to develop a steady retail hardware business in the downtown Wilusa market.  As discussed, there is currently no competition.  They key will be to establish a solid business to discourage any competition from coming into the market or creating a level of loyalty that will not be fazed by competition. 

After two solid years of performance and establishment of Hisarlik Hardware , there are two areas of potential expansion.  First, look for opportunities in the current market.  What businesses can be combined logically with what has been established that will deliver additional bottom line profit.  Secondly, a second location will be developed in a new part of Wilusa.  An area that will deliver a similar characteristic to the first store that appears to be headed down the road of success.