Expansion Business Plan: Chalmers Garden Centre
Chalmers Garden Centre is a local garden centre that holds a 40% market share of a population of almost 50 thousand people. The garden centre provides cells with a wide variety of gardening tools, accessories, and plants.
A nationwide garden centre chain is setting up a competing operation in a central and high-profile location. New competition may negatively impact the market share of Chalmers Garden Centre.
Qualitative and quantitative assessments demonstrated that an extension of the service line could help to retain the current market position and attract new customers.
The expansion requires $105,000 of additional funding. While $25,000 will be taken from the current saving, additional $80,000 are needed.
- Chalmers Garden Centre is a well-established local business with stable revenue streams ($1M annual sales) and high profit margin ($100,000 annual net income);
- We have been in business for over five years;
- We have established a sustainable market presence.
Chalmers Garden Centre is a family-run business run by Anne and Ted Chalmers. It has two full-time and two part-time employees. The garden centre provides cells with a wide variety of gardening tools, accessories, and plants. It has exclusive selling rights for a popular range of garden accessories made by a renowned local craftsman. The business operates seven days, opening 9–5 pm on weekdays and 8–4 pm at weekends. The primary values of the business include giving your best, having a can-do attitude, treating customers like family, and creating an environment that everybody wants to be a part of.
Chalmers Garden Centre serves a population of approximately 49,000 people, among which 42,000 people live in the town boundaries with another 7000 people living in the outlying rural area. Apart from Chalmers Garden Centre, there two other small well-established gardening centres. Currently, our company is estimated to have 40% of the market share. However, the current market position is in danger due to a nationwide garden centre chain setting up a competing operation in a central and high-profile location.
Chalmers Garden Centre demonstrates strong financial performance in terms of profitability. Last year, the company’s revenues reached $1M per annum with a net profit of as high as $100,000. The company has a low level of financial leverage, as the only long term-debt the company has is a business loan of $200,000 secured against the land. Selected financial data along with ratio analysis for the past three years are provided in Appendix A.
Needs Assessment and Proposed Solution
The establishment of a nationwide garden centre poses a significant danger for Chalmers Garden Centre. Qualitative and quantitative analysis of possible option for addressing the problem demonstrated that expansion of the service line is the most suitable option. In particular, it is proposed to open an on-site café, run gardening classes in the evenings, and develop a mini-golf course on the land. The expansion requires $105,000 of additional funding. While $25,000 will be taken from the current saving, additional $80,000 are needed. Appendix B includes a detailed cost analysis of the proposed solution.