SADIE’S COUNTRY ‘N’ WESTERN

SADIE’S COUNTRY ‘N’

WESTERNSherry Deissner

Krista GrahnChris Harding

Zaya KadyrovaMaura Kearney

Proposal Outline Business Potential and Proposal Marketing Plan Operations Plan Human Resources Plan Financial Plan Business Value and Profitability

Potential and Proposal Sadie’s Country ‘n’ Western

Products Western wear Casual wear Rancher’s supplies and tack (saddles, bridles,

halters, leads, etc.)

Location: Champion, Alberta

Potential and Proposal

Champion

Potential and Proposal Value in the concept

One-stop shop idea Fulfills a need of working area residents (farmers

and ranchers) Convenience Low prices

Mission Statement Sadie’s Country n’ Western is a retailer of

country supplies and casual and Western wear for men, women, and children. Sadie’s is dedicated to providing convenience of a one-stop destination of choice for families of Southern Alberta at competitive prices.

Goals Short term goals: 1) Secure our desired location in the mini mall of

Champion, Alberta 2) Acquire the necessary financing 3) Enter into supplier agreements with desirable terms 4) Become profitable in the first few years of operations 5) Achieve market share of 10% in the Vulcan County

and 1-2% in surrounding counties

Goals Long term goals: 1) Monitor key ratios against industry and achieve performance that

is at least at par with industry standards 2) Become a well-recognized brand name in Southern Alberta and

Western Canada 3) Maintain healthy positive cash flows from operations 4) Maintain low overhead and other operating costs 5) By year 5 or 7 Sadie hopes to open a new location in Lethbridge,

AB. If the current location proves to be as successful as projected, a franchising plan will be created enabling us to open new locations across Southern Alberta and Western Canada.

Market Overview Target geographic area

Vulcan County and other nearby counties 61,803 people, excluding Lethbridge Aiming to get 10% market share Predominately rural

Target population Price-sensitive ranchers and farmers Visitors

Industry Overview Target geographic area

Industry Overview Competition

Lammle’s Barriers to entry No direct competition in target area

Economic trends Positive in Alberta Food prices Recession/cost of fuel

Consumer trends

Marketing Plan Place

Mini mall

Product Convenience, affordability, necessity

Promotion Catalogues Stampede Flyers Billboards

Price

Revenue and Marketing Costs

Operations Plan Organizational Structure

Incorporation

Positive net income anticipated Protection from personal liability Tax deferral opportunities

Operations Plan Site Plan

-Mini-Mall on 1st Avenue Main St, Champion

Operations Plan Floor Plan

1st Avenue

Register

Tack

ToysClothes

Change rooms

Gifts

Washroo

Storage/Receiving

Toys

Tack

Gifts

Register

1st Avenue

Clothes

Change Room

Wash Room Storage / Receiving

Operations Plan Daily Operations

Store Manager Hours of Operation Daily Activities Stampede

Operations Plan Suppliers

Traditional Western Designs Exclusive contracts (Weaver Leather) Stable well known suppliers North American Based suppliers

Operations Plan Working Capital

Cash $ 50,000.00

Accounts Receivable $ 1,104.78

Inventories $ 109,863.43

Accounts Payable $ -

Total Net Working Capital $ 160,968.21

Operations Plan Capital Budget Summary

Cash Register's and Micro's POS System $ 6,000.00

Furniture and Fixtures $ 40,000.00

Leasehold Improvements $ 20,250.00

Trailor $ 15,000.00

Leasing Deposit $ 6,000.00

Net Working Capital $ 160,968.21

Total Capital Required $ 248,218.21

Operations Plan Cost of Sales

Revenue Markup COS GPM% GMWestern wear 415,743.83$ 85% 224,726.39$ 46% 191,017.43$ Casual wear 141,968.75$ 85% 76,739.86$ 46% 65,228.89$ Gifts 61,950.00$ 65% 37,545.45$ 39% 24,404.55$ Saddles 110,477.50$ 60% 69,048.44$ 38% 41,429.06$ Tack 58,078.13$ 85% 31,393.58$ 46% 26,684.54$

788,218.20$ 439,453.73$ 44% 348,764.47$

Operations Plan Working Capital Management

Cash Management Inventory Management Accounts Receivable Accounts Payable

Operations Plan Working Capital Management

Liquidity management Inventory management AR Policy AP Policy

Operations Plan Annual Operating Expenses

Gas $ 4,515

Electricity $ 9,996

Insurance $ 4,000

Rent $ 35,000

Telephone $ 720

Office Expenses $ 6,000

Stampede Wages $ 1,360

Wages $ 72,264

Bookkeeping $ 5,040

Accounting $ 1,500

Legal $ 3,800

Site Security $ 348

CCA $ 9,775

Interest Expense $ 7,447

Marketing Expenses $ 106,810

$ 269,935

Human Resources Plan Sadie – Owner Manager

Will work full time (40 hrs) Ordering Receiving Hiring, training, and supervision Nightly cash out (when required) Bank deposits

Estimated annual salary $45,000

Human Resources Plan Sales associates

Will work part time (20 hrs) Customer enquiry and assistance Stocking goods Taking payment and cashier duties (cash out)

Wage: $10/hr Training: on-the-job

Financial Plan Highlights:

Year 1 Year 2 Year 3 Year 4 Year 5

Net income 35,555 156,624 351,491 360,382 369,764

Cash flows from operations

47,741 171,614 362,576 372,937 382,903

Debt / Equity 1.4 0.9 0.5 0.3 0.2

Current ratio 2.7 3.1 3.7 4.9 6.1

Net Present Value

Net Present Value $177,317 IRR 44%

Financial Plan

How does Sadie’s stack up? Gross margin % (GM%)

Industry average Year 1 Year 2 Year 3 Year 4 Year 5

47% 42% 41% 41% 41% 41%

Financial Plan

How does Sadie’s stack up? Pre-tax profit %

Industry average Year 1 Year 2 Year 3 Year 4 Year 5

5% 6% 17% 25% 25% 25%

Financial Plan

How does Sadie’s stack up? Inventory turnover ratio

Industry average Year 1 Year 2 Year 3 Year 4 Year 5

3.4 4 4 4 4 4

Financial Plan

How does Sadie’s stack up? Current ratio

Industry average Year 1 Year 2 Year 3 Year 4 Year 5

1.7 2.7 3.1 3.7 4.9 6.1

Financial Plan – Sensitivity Analysis

Sources of Financing Capital (financing required)

$124,000

Character Collateral Capacity

Conclusion Competitive advantage

Low prices Untapped market potential Low labour and overhead costs

Moderate risk Simple business model Profitable

Q&A