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Carrie’s Candy Shop

Handout 1: Carrie’s Candy Shop
History
Carrie Jube has worked in the confectionery industry for over 25 years. It has always been her dream to own and operate a retail confectionery store. Carrie imagines her store to be filled with glass jars of lollies and chocolates, and wants to be recognised as a boutique confectionery store specialising in high quality products.
Strategic plan goal
Carrie’s Candy Shop will be recognised as the number one boutique confectionery retailer
in NSW.
Operational plan goal
Carrie’s Candy Shop will obtain 15 % of the market in the first three years of operation.
General information
Carrie has completed her market research, which indicated a void in the market of retail outlets selling high quality confectionery products. Supermarkets and convenience stores dominate the confectionery retail market, owning over 95% of the market share between them, however, they only sell everyday household brands such as Cadbury and Nestle.
Carrie wants to take advantage of this void in the market by opening ‘Carrie’s Candy Shop’. She has made a decision that, in order to segment her market, she will not sell everyday household brands and instead focus on high quality products, which retail at a much higher price than the everyday brands.
Carrie has located a site within the main street of the mountains tourist village. The street is lined with boutique type retailers including clothing, cakes and pastries, cafes and restaurants, homewares and gift shops. The rent is $2,800 per month.
The Council has very strict rules regarding the signage that stores use on their shop fronts. It wants to maintain a ‘mountain village feel’, as they believe this is what tourists find attractive. The Council also stipulates that all stores in the main the street must be open 7 days per week, from 9am to 6pm, to cater for tourists.
Carrie is very keen on this location, however, she is concerned about how many staff she will need to meet the Council’s opening hours requirement. When Carrie first thought about opening her own store, she decided she would not employ anyone and just manage her opening hours depending on how busy she was.
As the Council now requires her to be open every day from 9am to 6pm, she will need to hire retail assistants. Carrie believes this could be a big risk to her success, as during winter it can snow in the village which means customer numbers reduce substantially. If this happens she could be paying people to run a store that has no customers.
Financial information
Carrie has identified the following costs involved in starting her own business.

Carrie’s Candy Shop: Start-up costs

Stock
$50,000

Legal
$2,000

Property bond
$4,000

Cash register
$2,000

Fixtures and fittings
$10,000

Signage
$5,000

Software (Retail management system)
$5,000

Marketing materials
$3,000

Insurance
$4,000

Stationery
$100

Carrie has also identified the following ongoing expenses for her business.

Carrie’s Candy Shop: Ongoing expenses

Loan repayments
$1,000

Printing and stationery
$50

Miscellaneous
$100

Insurance
$4,000

Postage
$50

Retail management system maintenance
$1,500

Fixtures and fittings maintenance
$500

Telephone
$200

Rent
$2,800

Payroll and liabilities
$6,500

Advertising
$500

Licence and permits
$100

Security
$250

 
Carrie has also completed the following monthly average sales forecast. The figures take into account that sales will go down during the winter months (due to the snow), but pick up again over November/December for the summer and Christmas holiday periods.

Carrie’s Candy Shop: Monthly average sales forecast

July
$15,000

August
$15,000

September
$20,000

October
$20,000

November
$25,000

December
$25,000

January
$25,000

February
$20,000

March
$20,000

April
$20,000

May
$20,000

June
$15,000

Carrie has $30,000 in savings that she is going to invest in the business. She wants to borrow $120,000 from the bank to fund her business idea.
Carrie has spoken to the bank and they have advised that she needs to provide them with a business plan, so that they can assess her business idea and decide whether they would be willing to provide her with a loan.
 
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