Furniture store business plan
Who has not dreamed of opening a company, then entering the regions, and then conquering the whole world ?! But in reality, the scaling process turns out to be not as simple and rosy as it seems at first glance - otherwise, so many branches would not have closed, barely having time to open. Failures happen due to various reasons: incorrectly chosen model, poorly planned opening, lack of competent communication with the head office, problems from the legal side, and much more. So, how to avoid unnecessary mistakes and competently open a branch in the region, we tell below:
1. Scaling As American entrepreneur and investor Andrew Chen (who has had a hand in projects such as Dropbox, AngelList, and others) says: “The only thing that matters is the company's rapid growth. If you don't grow, you will cease to exist. " When the main business processes are debugged, the company owns a market share, there are resources for expansion, then the management usually begins to think about expanding the company. In addition, sometimes the goal of entering the regions is due to the fact that the regional market is favorable from the point of view of competitors, so that the position of the company will be more confident. Among the most popular are four:
- Opening your own branch. The advantages of this method are that you will fully control income and expenses, as well as monitor the quality of the product or service. Total control over everything is guaranteed. But it also has its drawbacks - all the opening costs will have to be borne by yourself.
- Building a remote sales system. n is less expensive than the previous one, but not for everyone. The implementation scheme is something like this: you create a website, do geographic targeting, and then arrange delivery. Small goods can be sold in this way, but cars cannot be sold.
- Franchising. We talked about this type of scaling and its tendencies in our article "Franchising Trends". The main role here is played by brand recognition and its reputation. The advantages are that you can quickly and inexpensively build a network with regional coverage. And disadvantages: problems of control over franchising enterprises.
- Building a dealer, partner network. Also an inexpensive way. If you are not ready to build your own sales network, invest in logistics, then indirect sales will be optimal, that is, sales through a dealer, partner network. Partnership agreements include the following clauses: conditions for the volume / turnover of sales for enterprises wishing to become dealers; basic rules of interaction; price conditions; sales area of responsibility (territorial scope, product range); options for resolving conflict situations; dealer support (training programs, marketing activities); rewards, bonuses, affiliate programs (as conditions for receiving rewards, privileges).
Since entering the regions through the opening of branches is one of the most popular ways in our country, let's talk about it.
2. Feasibility of opening a branch in a specific region. Fim Katz, CEO of the largest kitchen furniture factory in Russia, Maria, says that deciding whether to open a branch usually starts with analytics and detailed calculations. You should know well: how many people live in a given region, the level of income of residents, the number of competitors in your segment, as well as the position of the infrastructure for your business. The following research helps in deciding whether to enter a specific region:
- Competitor analysis. In this matter, you can resort to SWOT analysis of business players, thanks to which you can offer more favorable conditions for customers than competitors.
- PEST analysis - it shows the impact of the external environment.
- Market capacity analysis. To understand the market capacity, you will most likely need data on the consumption of your product or service from ROSSTAT or other analytical materials. The bottom line is that you need to find out: how much product or service the average Russian consumes per year, and calculate the volume of consumption per residents of this particular region where you are going to open your branch.
- Customer Development. You will receive complete information about the desires and needs of your potential users. Moreover, you will build communication channels in advance and prepare the audience for the release of a new product. Customer development is directly embedded in your sales chain, acting as a pre-sales element. You can learn more about this method in our article "How to create a product that will buy: customer development methodology"
“First of all, when opening a branch, we chose cities with a population of one million,” says Katz, “Then we found large cities that were as close as possible to the selected millionaires. Then an investment plan is drawn up, where costs were taken into account, and the payback period of the studio was calculated and sales plans were set. " At the moment, the payback period for one Kitchen Studio "Maria" is 18 months, the average studio yield is 7%.
Bringo CEO Mark Kapchits, who opened four branches: in Vladivostok, Novosibirsk, Yekaterinburg and Samara, also admits that in opening branches he focuses mostly on the population of the city. However, the saturation of the city with various types of business also plays a decisive role. “Vladivostok is not a millionaire, but the business life in the city is so active that it is one of the most attractive cities for the development of our business,” explains Kapchits.
3. Interaction with the head office Regional branches employ exactly the same employees as in the head office. The only difference is that they are geographically remote. But often the management thinks that they are difficult and impossible to manage. In managing remote employees, you will be helped, first of all, by the electronic tools, which we talked about earlier in the article "How to manage a remote team". In managing employees in branches, it is important to remember that you will need to manage not only their activities, but also the status in relation to the company as a whole, as well as the boundaries of their powers. This must be done because, as practice shows, sometimes the heads of regional branches can make the following mistakes:
- In negotiations with regional authorities, they may begin to claim that they are making the final decisions.
- With the best of intentions, they may try to increase the workload of subordinates without coordination with the head office.
- They try to take full responsibility solely on themselves.
However, the head office employees are also not perfect and make mistakes:
- They are looking for partners in the regions, bypassing the branch employees.
- Dispose of salaries without notifying the director of the branch.
- Begin to monitor each step. In some branches, the situation reached the point that employees had to spend about a third of their time not on the main activity, but on informing the head office about it.
Efim Katz (Maria Kitchen) says that the main function of the head office is “informational”: “The head office informs the branches by mailing. We also use CRM - customer relationship management systems and regularly post news on the corporate website and in the company's social networks. In addition, for the managers-designers working in the branches, the company necessarily organizes training and excursions to production, where they not only receive the necessary information on products, sales tools, but also exchange experience.
Step-by-step plan for opening your branch
According to statistics, 95% of new businesses are closed in the first year. Another 3% in the second year. And only 2% stay on the market and make a profit.
Are you tired of running a small business, constantly worrying that federal chains and giant companies are about to eat your business for breakfast?
"Why do I need a branch?"
This is probably the question you want to ask me. "Why should I open a branch if everything is fine with me?"
“I have a stable company that generates stable profits. I have a close-knit team of professional employees, proven partners, a steady level of sales ... Everything is already very good! " - you say.
And if you think about it? If you take and analyze, what next?
How are you going to develop your business?
After all, you yourself perfectly understand that stagnant water is a swamp. And in the swamp, as you know, there is no life. There is life and prosperity only in running water. So is your business. It should not stand still, the business should grow and develop.
Open your own branch. It would seem a simple and common desire of any businessman. But not everyone is able to fulfill the dream of a full-fledged branch, created smoothly and without obstacles.
The reason for the "sterility" of a business can be problems with recruiting, incorrect hierarchy and career growth system, lack of employee training system and much more.
You can talk about "infertility" after 1-2 years of stable existence of your business, which has grown stronger during this time, but is not able to duplicate itself, expand.
Furniture store financial model
Brief Investment Memorandum
Furniture belongs to that group of goods of mass demand, without which the existence of a modern person is impossible. In addition, existing technologies for the production of furniture, a variety of styles and designs, as well as logistics, have made available to the majority of the country's population types of furniture that were previously the privilege of wealthier citizens.
When developing this business plan, two main trends in the furniture market in Russia were used as a business case for the project:
- Over the past 20 years of a free economy and market, a European culture of choosing a style and standard of life has developed among Russian consumers, where not the last place is occupied by the arrangement of their home and its interior. People have become more discriminating in the choice of furniture, its design and quality. Moreover, the majority of Russians no longer consider the purchase of furniture as something capital in terms of investment and are not going to pass on the purchased furniture by inheritance to their children, grandchildren and great-grandchildren. T. there is a purely practical approach to furniture, and, for example, when changing a place of residence or purchasing an apartment, preference is given to buying completely new furniture. Thus, the existing diversity on the market encourages customers to change their furniture interiors more frequently, which is directly reflected in the fact that the Russian furniture market is growing by about 5% per year.
- The second point is related to the fact that new opportunities for inexpensive delivery of high-quality furniture from almost any country in the world allow entrepreneurs working in the furniture market not only to quickly adapt to consumer preferences of buyers, but also to some extent create demand for different types of furniture products. A clear confirmation of this trend is the fact that almost 45% of the Russian furniture market is occupied by foreign furniture.
In addition, the fact that the policy of import substitution is bearing fruit and there are already quite a few furniture factories and companies working entirely on the Russian market using domestic timber raw materials speaks in favor of working on the furniture market.
The payback period is 10 months.
The initial investment will be equal to 1,720,000 rubles.
The break-even point is reached for 3 months of the store's operation.
Average monthly profit 195,000 rubles.
Description of business, product or service
Despite the huge number of private offices and large companies that provide legal support, your own law firm remains a promising business. You can open such a company yourself or buy a franchise. Below we will present a ready-made business plan of a law firm with calculations.
The legislation of the Russian Federation often changes, it can be difficult for a non-specialist to understand all the intricacies. Here, legal experts come to the rescue, the demand for which continues to grow, but we are still far from the demand for lawyers in the west (where almost everyone has their own lawyer). Therefore, the market has room to grow.
More than 100,000 law firms of various profiles are currently operating in Russia. But the competition in this area is very high, because there are also many graduates with degrees from law schools. Only a few specialists make good money in this area. According to statistics, more than a third of law firms in Russia have revenues ranging from 150,000 to 1 million rubles, and 28% earn from 2 million to 5 million. / P>
This business is most relevant in large cities with a population of half a million people.
The key to success for a law firm is its reputation. If you are customer-oriented, have good business ethics, and have professionals, the company has every chance of success.
Types and specialization of law firms
Despite the huge number of law firms and agencies, it can be difficult to find quality legal support. Many seek to open a luxurious office, not realizing that this is only the outer side of the matter. It is much more important to immediately determine what services the firm will provide. It is better to choose a specialization - for example, representing the interests of the military, sailors, providing advice and handling cases in the field of property relations, protecting clients in criminal cases.
To choose a direction, consider your own specialization and the specifics of the region where you will work. Monitor competitors to determine what existing law firms are doing.
Tax, family, corporate and labor law is in demand today.
The list of the most demanded legal services is as follows:
- criminal cases;
- consulting in tax law;
- corporate law;
- legal expertise; <
- development of shareholder agreements, contracts;
- support of equity transactions;
- registration and liquidation of business entities;
- support of bankruptcy processes; li >
- consultations and legal support in the field of economic activity.
By the scale of the company, it can be divided into three types: