Business plan
Smith Warehouse

Las Catalinas Mall
P. O. Box 362
Caguas, Puerto Rico 00726-0362

Telephone (787) 555-7755
Fax (787) 555-7756
E-Mail SmithWarehouse@gmail.com
Table of Contents
I. Table of Contents 2
II. Executive Summary 3
III. General Company Description 4
IV. Products and Services 5
V. Marketing Analysis 7
VI. Operational Plan 8
VII. Busisness Risk and Options 11
Executive Summary
Thanks to the development of the web and its incremental use, Smith Warehouse has decided to create an online supermarket with delivery. “No waiting in line, no wasting of time”. Our business allows you to compare prices across the largest Grocery and Health & Beauty products in the PR. Visit our website; you're guaranteed to find the best prices, all the offers and the best value.
General Company Description www.SmithWarehouse.com is a shopping website will serve as guide for the best offers and best buys for food prices. It will allow you to compare the value and prices of your entire cart, comparing with others retailers in the PR. It automatically checks what's in your basket and recommends swapping items for ones of better valued products.

You can choose from five different departments:

* Grocery * Produce * Dairy * Health & Beauty * Wines & Beers

How much can you save?

You can save up to 35% on the total of your shopping’s.

Ways to Save

* Personal Shopping Companion Bar - Get the best value for your cart by using the personal shopping companion bar at the bottom of the page. Be sure to keep checking it to avoid missing out on any potential savings or anything else that requires your attention. * Saving Centre - Check out the piggy bank logo at the bottom right hand side of the page to ensure you see all saving options available and a record of how much you have saved so far. * Vouchers - Save even more from our up-to-date list of the best vouchers available among all the stores. * Messages - Your own personal message centre. Important saving tips and other helpful information will be sent to your inbox. Keep an eye out for new messages – as they are sure to help you save even more.
Products and Services
Find a great number of items among many brands, sizes and varieties, including: * Baby foods and baby-care products such as disposable diapers * Breads and bakery products (many stores may have a bakery on site that offers specialty and dessert items) * Books, newspapers, and magazines, including supermarket tabloids * Bulk dried foods such as legumes, flour, rice, etc. (typically available for self-service) * Canned goods and dried cereals * CDs, Audio cassettes, DVDs, and videos (including video rentals) * Cigarettes and other tobacco products * Confections and candies * Cosmetics * Dairy products and eggs * Delicatessen foods (ready-to-eat) * Diet foods * Electrical products such as light bulbs, extension cords, etc. * Feminine hygiene products * Financial services and products such as mortgages, credit cards, savings accounts, wire transfers, etc. (typically offered in-store by a partnering bank or other financial institution) * Flowers * Frozen foods and crushed ice * Fresh produce, fruits and vegetables * Greeting cards * House-cleaning products * House wares, Dishware and cooking utensils, etc. (typically limited) * Laundry products such as detergents, fabric softeners, etc. * Lottery tickets (where operational and legal) * Luggage items (typically limited) * Meats, fish and seafood’s (some stores may offer live fish and seafood items from aquarium tanks) * Medicines and first aid items (primarily over-the-counter drugs, although many supermarkets also have an on-site pharmacy) * Nonalcoholic beverages such as soft drinks, juices, bottled water, etc. (some stores may have a juice bar that prepares ready-to-drink freshly squeezed juices, smoothies, etc.) * Personal hygiene and grooming products * Pet foods and products * Seasonal items and decorations * Snack foods * Tea and Coffee (some stores may have a commercial-style grinder, typically available for self-service, and/or a staffed coffee bar that prepares ready-to-drink coffee and tea beverages) * Toys and novelties * Delivery to your home

Marketing Analysis
It wouldn’t be an exaggeration to say that most Puerto Ricans take food for granted. Ever since extreme poverty and hunger were eradicated in the 1940s, Puerto Ricans simply don’t think about food, assuming any food product they may want will be available at any time, more or less at stable prices. However, new food economics— dictated by rapid global population growth, emerging consumer markets (especially in Asia and Latin America), world climate change, food re-engineering technologies and complicated transportation logistics—is putting at risk the safety, quality, affordability and availability of the world’s food.

Puerto Rico isn’t exempt from these trends. Despite its solid and stable performance during the past couple of decades, many industry experts agree the local food sector has been weakened in recent years, isn’t as efficient as it could be and faces a growing number of external threats to its stability. The looming clouds are forming as industry executives increasingly look at food as a leading growth industry that could help lead Puerto Rico out of its economic crisis and into a new age of prosperity. The starting point is an industry with scale. It currently surpasses $8.5 billion and, despite a persistent recession/depression entering its sixth year, the sector has continued to grow at a steady pace during the past decade.

Total food sales represent about 25% of the island’s $35 billion annual retail sales and 15% of local consumer expenditure in an ecosystem that includes food-industry importers, distributors, retailers, wholesalers, restaurants, convenience stores and mini-markets. The industry is also an important source of employment, with a staggering 110,000 direct jobs. That represents about 12% of the local workforce, including 17.5% of private- sector employment, according to figures from the Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym). Nonetheless, the island produces only 20% of the food it consumes, when ideally it should be producing 45% to 50%. For the long-term, however, many of those interviewed feel confident Puerto Rico has the potential to grow and produce up to 90% of everything it consumes. The food industry—excluding such related sectors as agriculture, institutional food systems (hospitals, prisons, airports, school cafeterias), food research and food manufacturing— represents an estimated 6.5% of the local gross domestic product (GDP), which is roughly the same percentage as tourism.
A study, prepared by market-research firm Gaither International, included 1,350 face-to-face interviews as well as an additional 5,000 interviews from the 2007-2010 Consumer Radiograph studies. With the time-series data, the 2011 Consumer Radiograph is the first study to include forward-looking projections. The survey shows household-purchasing agents, those in charge of a family’s purchases and budget, are mostly women (80%), who are struggling to meet their family’s nutrition needs on increasingly tight budgets. Today’s consumers have to pay 40% more for gasoline, 20% more for electricity and have faced other significant cost-of-living increases over the past year. As a result, as well as in response to the local recession-turned-depression, consumers have significantly changed their purchasing habits. For the time being, or at least until the economy turns around, brand loyalty is out, and cheap products are in—60% of consumers find generic brands and private labels to be of good or excellent quality, while 85% said they plan to buy generic brands this year. However, in certain product categories, brand names such as Goya, Salchichas Carmela and Heinz Ketchup continue to reign supreme among Puerto Rican consumers.
In a first for the Consumer Radiograph, this year’s study organizes information by generations: Generation Y, those ages 18 to 30; Generation X, ages 31 to 46; the baby-boomer generation, 47 to 65; and the mature generation, those 66 years or older. While the study didn’t include the under-18 age group, Rodríguez said interviews show parents are still pressured by children to purchase brand-name lunchbox products. While this runs counter to results that show 60% of consumers find generic brands to be of good or excellent quality, Beatriz Castro, syndicated research director for Gaither International, explained there are varying degrees of brand loyalty across different market segments and demographics. Those in the under-18 age group and the lunchbox-product segment still demonstrate a high rate of brand loyalty. When asked what helped them decide which products to buy, 61% of respondents answered shoppers, the store circulars that advertise weekly specials. However, 59% of consumers answered word-of-mouth, and 53% indicated in-store samplings helped them decide (see chart).

Operational Plan
General Operating Hours
Smith Warehouse intends to operate Monday thru Saturday from 6 am to 9 pm, and Sundays from 11 am to 7 pm. Nunez Warehouse will be operational year round.
Human Resources
Smith Warehouse will employ 70 regular employees, 1 manager, and 3 assistant managers.
Mr. Wes Aaron, an experienced manager for over 12 years, will be in charge of all the store operation.
Mrs. Leanne White, Mr. Charles Pearson, and Mr. Clint Eastwood, will also be assisting the manager to perform work for the company.
Mr. John Smith, who holds a Bachelors of Business Administration, will be sub-contracted to assist with marketing functions. He will eventually be contracted as a Full time permanent employee.
Once the business reaches 60% of its operational capacity this will represent 1300 hours, Smith Warehouse will offer the above professionals full benefits. Also at this time, an extra administrative assistant will be sought.
A professional Accountant will be sought to perform accounting duties for the company. It is unknown at this time, who will fill this position, however, job advertisements will be put in the local papers and organizations to attract a good pool of respondents.
Once hired, all employees will be covered by the Workers Safety and Insurance Board and covered for Employment Benefits.
Insurance Requirements
Smith Warehouse will have to incur costs for business liability insurance. The estimated cost for this requirement is $4,000 per year.
Operating Capital Requirements
Due to the demands imposed at start up, Smith Warehouse will require that the business have sufficient working capital to meet all operational responsibilities of the business for the first three months.

It is estimated that the business will need approximately $20,000 in working capital to sustain and ensure the business meets all opening and on-going financial obligations.
Also, throughout the year there tends to be periods of low activities. Consequently, the company will experience financial pressures during these months. While much of this time will be spent developing proposals and marketing strategies, there will be a need to maintain sufficient working capital to cover these periods.
A long term strategy to maintain a positive cash flow during these periods will be to diversify the company and develop environmental training programs for certain communities. These training programs will be given during these months.
Office Requirements and Asset Acquisitions
Smith Warehouse will lease office space on located at:
Las Catalinas Shopping Center Int. Road #52 & Road #156. Caguas, PR 00725.
The office space is leased and will accommodate the necessary office equipment such as computers, fax machine, photo copier, cash registers, and other supermarket equipment. This facility will require an estimated $5,000 to renovate in a style that is aesthetically pleasing to the clients as well as the owners.
These facilities will be leased at $500 per month. In addition, Smith Warehouse will require specialized environmental equipment. These are the estimated costs associated with those investments:
Office Renovations $5,000
Office Equipment and Furniture $6,000
Specialized Field Equipment $27,000
Specialized Software $10,000
Total Capital Costs $48,000
The above noted capital purchases will increase work effectiveness, enhance professionalism and will prepare the business for the forecasted demand for services. Further, the equipment may be leased out to partner associates during times of low activity.
Operational Workflow
As with any supermarket, the operational workflow for the business is quite uniform and simple to follow. The following is an easy 3 step outline of how orders are completed by web on a regular basis:
Step 1 The Customer will purchase all products needed online.
Step 2 After the order is received; Smith Warehouse will immediately contact the customer to confirm the order, total amount of products purchased, and the address were the purchase will be delivered.
Step 3 Once the order is deliver, the customer will sign the invoice, and the process is completed.
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The above operational workflow is very standard, easy to understand and within industry's norm.
Smith Warehouse will accept cash, checks and credit card payments. These payments are well within industry standards. The business will provide credit to larger account holders. It is estimated that the length and terms of payments are net 30 for all clients. This will allow the business to avoid cash flow problems. Late payments charges are 2% of the projects outstanding balance.

Business Risk and Options
We can find people who are not interested or cannot enjoy this service and who are not advance users of the internet and do not have the necessary experience shopping online. Another factor that could arise would be the distrust that, in order pay, they may have to expose their credit card number on the web.
In case of this event occurs: * The customer can use the secure money transferring web page, Pay Pal. * Pay in check or cash when the order is received. * Pay in store within 3 days after the order is delivered.

Reference:
A new dawn for Puerto Rico’s food industry http://www.caribbeanbusinesspr.com By Frances Ryan