Are you about starting an electrical shop? If YES, here is a detailed sample electrical shop business plan template & FREE feasibility report.
Businesses that are worth going for are businesses that you are certain people would need your services or products regularly. An electrical shop falls into this category. Part of what you need to do to make headway in this line of business is to ensure that your store is intentionally positioned and you a have good business relationship with construction contractors and key players in the real estate industry.
One good thing about this type of business is that you don’t need to enroll in a conventional school to learn how to start and run this type of business; you just require basic business skills such as knowledge of electric equipment, customer service, accounting skills, bargaining skills, people skills cum networking skills and of course overall business management skills.
Over and above, if you have decided to start an electrical shop business, then you should ensure that you carry out your feasibility studies and also market survey. Below is a sample electrical shop business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Electrical Shop Business Plan Template
1. Industry Overview
Electrical store 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 and those companies invest in equipment, they purchase industry goods to both outfit their factories and to act as intermediary components.
If you are a close 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 engaged 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.
Statistics has it that in the united states of America alone, there are about 17,709 registered and licensed electrical supply stores responsible for employing about 226,258 people and the industry rakes in a whooping 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.
If you are contemplating opening an electrical shop business in the United States, you should ensure that you carry out a thorough market survey and feasibility studies so you that you will be able to get the ideal location to launch your electrical shop business.
The truth is that, if you get some key factors wrong before starting your own business, then you are likely going to struggle to stay afloat.
2. Executive Summary
Allan Pearson® Electrical Shop, Inc. is a registered electrical equipment store business that will be located in one of the busiest streets in Kansas City – Missouri. 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 store that we intend launching and the facility is located in the heart of Kansas City – Missouri.
Allan Pearson® Electrical Shop, Inc. will retail electrical equipment and materials, such as wiring supplies, electrical light fixtures, light bulbs, security systems, electrical power equipment, switchboards, circuit breakers and fuses et al to customers.
We are set to service a wide range of clientele in and around Kansas City – Missouri. We are aware that there are several electrical equipment stores all around Missouri, 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 with all our competitors.
We have an online – service option for our customers, and our outlet has various payment options. Allan Pearson® Electrical Shop, 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 may grow to. We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions.
Allan Pearson® Electrical Shop, Inc. is a family business that is owned by Allan Pearson and his immediate family members. Allan Pearson 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 Kansas City – Missouri, but there is a plan to open other outlets around major cities in the United States of America.
3. Our Products and Services
Allan Pearson® Electrical Shop, Inc. is in the electrical equipment wholesaling industry to service a wide range of clients which is why we will ensure we make available a wide range of electrical equipment from top manufacturing brands in the United States and other countries of the world.
We will do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Some of the products in our store are listed below;
- Lighting fixtures and light bulbs
- Relay and industrial controls
- Switchgear and switchboard apparatus
- Motors and generators
- Power and distribution transformers
- Major appliance
- Programmable logic controller
- Small appliances
- Other electrical equipment.
4. Our Mission and Vision Statement
- Our vision is to become the leading brand in the electrical equipment wholesaling industry in Missouri and to establish a one stop electrical equipment store chains in Kansas City and in other key cities in the United States of America.
- Our mission is to establish a world – class electrical equipment store that will make available a wide range of electrical equipment from top electrical manufacturing brands at affordable prices in Kansas City – Missouri and other key cities in the United States of America via franchising.
Our Business Structure
Allan Pearson® Electrical Shop, Inc. is looking towards building a standard business that can be listed among the top – flight electrical supply stores not just in Kansas City – Missouri but throughout the United States of America. For that singular reason, we will make sure that establish the business on a solid structure.
We will ensure that we hire people who are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all our 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
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- 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.
- 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
- Interfaces with electrical equipment manufacturers
- 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
- Ensures that the organization operates within stipulated budget.
Sales and Marketing Manager
- 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
- 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
Truck and Van Drivers
- 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.
- 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
- 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 or a business with prospects 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 stores all over Kansas City 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.
Allan Pearson® Electrical Shop, Inc. employed the services of an expert HR and Business Analyst with bias in supply store chain business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our goals and objectives. This is the summary of the SWOT analysis that was conducted for Allan Pearson® Electrical Shop, 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 and construction contractors in and around Kansas City – Missouri.
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 store and we don’t have the financial capacity to compete with multi – million dollars electrical equipment stores when it comes to retailing electrical equipment at a rock bottom price.
The fact that we are going to be operating our electrical equipment store in one of the busiest construction locations in Kansas City – Missouri 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’ decline, 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 stores Industry, you will quite agree that the changes in disposable income, consumer sentiment, ever changing trends and of course the rate of homeownership are major growth drivers for this industry.
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 stores keep prices low to attract more sales amid growing competition.
A close watch of industry activities reveals that, the retail market for electrical equipment was hit hard by the recent economic downturn and experienced a decline in revenue in recent time. The construction of new homes is a primary market for industry products, so as housing stats 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 stats increased, presenting a potential opportunity for the industry. As part of marketing strategies, electrical equipment 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 store to service the construction industry in Kansas City – Missouri. 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
- Facility managers
- Households in and around our store locations
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 stores in Kansas City – Missouri and throughout the United States.
Allan Pearson® Electrical Shop, Inc. is launching a standard electrical equipment store that will indeed become the preferred choice for key players in the construction cum real estate industry in Kansas City – Missouri. Our electrical equipment store is located in a corner piece property in the largest electrical equipment market in Kansas City – Missouri.
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 Allan Pearson® Electrical Shop, Inc. a one stop electrical equipment shop for customers at all levels. 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
Allan Pearson® Electrical Shop, Inc. will retail a wide range of electrical equipment to businesses in Kansas City – Missouri. We are in the electrical equipment wholesaling industry to maximize profits and we are going to ensure that we achieve or business goals and objectives.
Allan Pearson® Electrical Shop, Inc. will generate income by;
- Lighting fixtures and light bulbs
- Relay and industrial controls
- Switchgear and switchboard apparatus
- Motors and generators
- Power and distribution transformers
- Major appliance
- Programmable logic controller
- Small appliances
- Other electrical equipment.
10. Sales Forecast
One thing is certain when it comes to electrical equipment 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 translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Kansas City – Missouri and we are quite optimistic that we will meet our set target of generating enough income/profits from our 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 Allan Pearson® Electrical Shop, Inc., it is based on the location of our business and other factors as it relates to electrical equipment stores startups in the United States;
- First Fiscal Year: $350,000
- Second Fiscal Year: $550,000
- Third Fiscal Year: $750,000
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 Allan Pearson® Electrical Shop, Inc., we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for key players in the industry in Kansas City – Missouri.
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 stores 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 Kansas City – Missouri.
In summary, Allan Pearson® Electrical Shop, Inc. will adopt the following sales and marketing approach to win customers over;
- Open our electrical equipment store in a grand style with a party for all.
- Introduce our electrical equipment store by sending introductory letters alongside our brochure to construction companies, construction contractors, home remodeling companies and other key stake holders in Kansas City – Missouri
- Ensure that we have a wide range of electrical equipment from different manufacturing brand at all times.
- Make use of attractive handbills to create awareness and also to give direction to our electrical equipment store
- Position our signage/flexi banners at strategic places around Kansas City – Missouri
- 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 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 store.
Allan Pearson® Electrical Shop, Inc. has a long – term plan of opening outlets in various locations all around Missouri and key cities in the United States which is why we will deliberately build our brand to be well accepted in Kansas City before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Allan Pearson® Electrical Shop, 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 Kansas City – Missouri
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our electrical equipment 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 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 attract loads of clients.
We know we don’t have the capacity to compete with multi – million dollar electrical equipment supply 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 stores within our level.
- Payment Options
The payment policy adopted by Allan Pearson® Electrical Shop, 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 Allan Pearson® Electrical Shop, 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 purchase 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 for establishing a standard electrical equipment supply business in Kansas City – Missouri and here are the key areas where we will spend our startup capital;
- The total fee for registering the Business in Kansas City – Missouri – $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 Allan Pearson® Electrical Shop, 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 $450,000 to successfully set up our electrical equipment store in Kansas City – Missouri.
Generating Funds/Startup Capital for Allan Pearson® Electrical Shop, Inc.
Allan Pearson® Electrical Shop, Inc. is a private business that is solely owned and financed by Allan Pearson and his immediate family members. They do not intend to welcome any external business partners which is why 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 $150,000 (Personal savings $100,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 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
Part of the plans we have in place to sustain Allan Pearson® Electrical Shop, Inc. is to ensure that we continue to make available a wide range of electrical equipment, retail our products at competitive prices, improvise on how to do things faster and cheaper. We are not going to relent in providing conducive environment for our workers
From our findings, another factor that kills new business is financial leakages. In order to plug financial leakages, the management of Allan Pearson® Electrical Shop, Inc. adopt the use of payment machine and accounting software to run the business.
Allan Pearson® Electrical Shop, 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.
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.
- 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, such as wiring supplies, electrical light fixtures, light bulbs, security systems, electrical power equipment, switchboards, circuit breakers and fuse: 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