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EcoShop Renovations Business Plan

Business Plan EcoShop Renovations

Executive SummaryHome energy-efficiency is an increasing concern for many homeowners. As homes age, the standard to which they were built gets increasingly out-of-date. Although current building codes require that houses are built to reasonably energy-efficient standards, older codes did not. Owners of homes built in the 1970s and 80s (and earlier) can see drastically reduced utilities costs by replacing and upgrading the low-efficiency portions of their home. Furthermore, many consumers are concerned with the environmental impact of the products they use, including home renovation products.

Business Overview

EcoShop Renovations is able to address both these concerns. As a provider of high-efficiency, sustainable building products and renovation materials, EcoShop Renovations intends to assist customers in achieving their renovation goals while lowering their energy consumption and environmental impact. To meet this goal, EcoShop Renovations will be a “one-stop shop” for environmentally-conscious homeowners. Not only will they be able to purchase the products and materials to upgrade their homes, but they will also be able to benefit from our professional installation service and our renovation consultants. The advice our renovation consultants provide will help consumers make great renovation choices while saving time and money.

Operations

In order to better meet the needs of Saskatoon homeowners, we are planning to design and build our own store in the north end of Saskatoon, off of Wanuskewin Road. This location is great for several reasons. Many of the neighbourhoods in that area of Saskatoon are reaching the thirty-year-old mark, meaning the houses are ready for energy-efficiency upgrades. As well, our location is easily-accessed from Highway 11, which opens us to the communities north of Saskatoon like Warman and Martensville. Finally, having our location purpose-built will ensure that it is tailored to our business and to our desired customer flow, which will contribute to improving the experience of customers within the store.

We have contacted all of our suppliers, and they are interested in working with us to provide their products to Saskatoon and area. Currently we only feature one or two suppliers in most departments; as the business grows, we will research more suppliers to fill out departments. Many of our products will be ordered at the customer’s request, which helps offset the need for a significant inventory. Furthermore, we plan to form lasting relationships with our suppliers (many of whom are smaller companies themselves); this will help mitigate the risk of being undercut by our larger competitors.

Human Resources

EcoShop Renovations will employ highly-motivated, environmentally-conscious sales and support staff. By emphasizing quality service, offering staff incentives, and through our employee

EcoShop Renovations Business Plan Page 1


ownership program, we intend to have the industry standard in customer service and satisfaction. As the business develops, we plan on implementing a “management-in-training” program to interested employees; this will help maintain continuity in our management and to reinforce our core competencies throughout our business.

Marketing

Our opening product line features many energy-efficient and environmentally-friendly options, which will be emphasized in our advertising efforts. Two products we are especially proud to offer are Therma-Tru Doors and YOLO Colorhouse Paints. Therma-Tru offers fibreglass doors in a variety of colours and styles, and their doors are currently only sold in Lowe’s stores in Ontario and in the United States. YOLO Colorhouse sells interior and exterior paint in various colours and finishes; no one else in Canada is currently selling their paint.

Our marketing plan focuses on informing our target market about our store and what we offer, including our exceptional customer service. Advertising will also inform potential customers about how upgrading their home’s energy efficiency can save them money and increase the value of their home.

Financials

The capital investment EcoShop Renovations requires to start is $3,739,966, which we expect to be 50% equity. At a required rate of return of 15%, this results in an internal rate of return of 27%, and an external rate of return of 21%.

Conclusion

Ultimately, EcoShop Renovations wants to meet the needs of homeowners who want to go green, but don’t know where to start. By providing a variety of ecologically-friendly products, outstanding customer service, a renovation consultation service, and professional installation service, we intend to be our customers’ first choice in home renovation. Although the business is high-risk and requires significant capital investment, there is potential for significant future growth and respectable return on investment.



Table of ContentsExecutive Summary...................................................................................................................................................................1

Table of Figures........................................................................................................................................................................... 6

1 Business Overview................................................................................................................................................................. 8

1.1 Introduction......................................................................................................................................................................8

1.2 Mission Statement..........................................................................................................................................................8

1.3 EcoShop Renovations Overview..............................................................................................................................8

1.4 Goals of EcoShop Renovations.................................................................................................................................8

1.5 Going Green and the Home Renovation Industry............................................................................................9

2 Operations Plan....................................................................................................................................................................... 9

2.1 Location.............................................................................................................................................................................. 9

2.2 Site Plan........................................................................................................................................................................... 10

2.3 Building Floor Plan.....................................................................................................................................................11

2.4 Quality Control Program..........................................................................................................................................12

2.5 Organizational Tasks..................................................................................................................................................13

2.5.1 Daily Tasks.............................................................................................................................................................13

2.5.2 Weekly Tasks........................................................................................................................................................ 13

2.5.3 Monthly Tasks...................................................................................................................................................... 13

2.5.4 Yearly Tasks..........................................................................................................................................................14

2.6 Supply Analysis.............................................................................................................................................................14

2.6.1 Appliances..............................................................................................................................................................14

2.6.2 Flooring...................................................................................................................................................................15

2.6.3 Windows and Doors...........................................................................................................................................15

2.6.4 Plumbing.................................................................................................................................................................15

2.6.5 Lighting and Electrical......................................................................................................................................15

2.6.6 Paint..........................................................................................................................................................................16

2.6.7 Seasonal Items......................................................................................................................................................16

2.7 Service Providers.........................................................................................................................................................16

2.8 Capital Budget............................................................................................................................................................... 16

2.9 Cost of Sales....................................................................................................................................................................16

2.10 Operating Expense...................................................................................................................................................17



2.11 Working Capital.........................................................................................................................................................17

2.11.1 Cash........................................................................................................................................................................ 17

2.11.2 Inventory..............................................................................................................................................................17

2.11.3 Accounts Receivable.......................................................................................................................................17

2.11.4 Accounts Payable..............................................................................................................................................17

3 Human Resources Plan......................................................................................................................................................17

3.1 Organizational Structure..........................................................................................................................................17

3.2 Job Descriptions and Qualifications....................................................................................................................18

3.2.1 General Manager – Management Staff.......................................................................................................18

3.2.2 Operations Manager – Management Staff................................................................................................19

3.2.3 Sales Manager – Management Staff.............................................................................................................19

3.2.4 Yard Supervisor – Management Staff.........................................................................................................20

3.2.5 Installer/Handyman – Service Assistant Staff........................................................................................20

3.2.6 Lumber Yard Attendant – Service Assistant Staff.................................................................................21

3.2.7 Renovation Consultant – Customer Service Staff..................................................................................22

3.2.8 Cashier – Customer Service Staff..................................................................................................................22

3.2.9 Paint Desk Attendant – Customer Service Staff.....................................................................................23

3.2.10 Returns Desk Attendant – Customer Service Staff.............................................................................23

3.3 Human Resource Costs..............................................................................................................................................24

3.4 Human Resources Strategy.....................................................................................................................................25

3.5 Shareholders’ Agreement........................................................................................................................................26

4 Marketing Plan...................................................................................................................................................................... 26

4.1 Target Market................................................................................................................................................................26

4.1.1 First-time Homeowner.....................................................................................................................................26

4.1.2 Long-term Homeowner....................................................................................................................................26

4.1.3 Soon-to-retire Homeowner............................................................................................................................26

4.1.4 Market Categories Summary..........................................................................................................................27

4.2 Purchasing Patterns of Customers.......................................................................................................................27

4.3 Marketing Mix............................................................................................................................................................... 28

4.3.1 Products..................................................................................................................................................................28

4.3.2 Pricing......................................................................................................................................................................41

4.3.3 Promotion.............................................................................................................................................................. 41



4.3.4 Place..........................................................................................................................................................................42

4.4 Competitive Analysis..................................................................................................................................................42

4.5 Marketing Expenses...................................................................................................................................................43

5 Financial Plan.........................................................................................................................................................................43

5.1 Capital Requirements................................................................................................................................................43

5.2 Summary of Projected Income Statement........................................................................................................43

5.3 Summary of Projected Balance Sheet.................................................................................................................44

5.4 Risk Analysis..................................................................................................................................................................44

5.4.1 Critical Variables.................................................................................................................................................44

5.4.2 Contingency Plan.................................................................................................................................................44

5.5 Dividend Policy.............................................................................................................................................................45

5.6 Economic Forecast......................................................................................................................................................45

5.7 Ratio Analysis................................................................................................................................................................45

5.8 Break-Even Analysis...................................................................................................................................................46

5.9 Net Present Value........................................................................................................................................................46

5.10 Internal Rate of Return...........................................................................................................................................46

5.11 External Rate of Return..........................................................................................................................................46

6 Summary.................................................................................................................................................................................. 46

Appendix A: Products.............................................................................................................................................................47

Appendix B: Human Resources Requirements...........................................................................................................51

Appendix C: Financial Projections....................................................................................................................................54

Bibliography...............................................................................................................................................................................60



Table of Figures

Figure 1: Site Location...........................................................................................................................................................10Figure 2: Site Plan.................................................................................................................................................................... 11Figure 3: Customer and Delivery Flow...........................................................................................................................11Figure 4: Building Floor Plan..............................................................................................................................................12Table 1: Operating Expenses...............................................................................................................................................17Figure 5: Organizational Structure...................................................................................................................................18Table 2: Wage Costs................................................................................................................................................................ 24Figure 5: Whirlpool Refrigerators....................................................................................................................................28Figure 6: Whirlpool Washers..............................................................................................................................................28Figure 7: Whirlpool Dryers..................................................................................................................................................29Figure 8: Whirlpool Dishwashers.....................................................................................................................................29Figure 9: Teragren Flooring Styles...................................................................................................................................29Table 3: Competitor Analysis..............................................................................................................................................42Table 4: Marketing Expenses..............................................................................................................................................43Table 5: Capital Investment.................................................................................................................................................43Table 6: Projected Income Statement Summary........................................................................................................44Table 7: Projected Balance Sheet Summary.................................................................................................................44Table 8: Ratio Analysis..........................................................................................................................................................45Table 9: Break-even Analysis..............................................................................................................................................46Table 10: Whirlpool................................................................................................................................................................47Table 11: Teragren Bamboo Flooring.............................................................................................................................47Table 12: Therma-Tru Fibreglass Exterior Doors.....................................................................................................48Table 13: Therma-Tru Hinged French Style Patio Doors.......................................................................................48Table 14: YOLO Colorhouse Paint.....................................................................................................................................49Table 15: American Standard Plumbing Fixtures......................................................................................................49Table 16: Good Earth Lighting Fixtures.........................................................................................................................49Table 17: Weekly Cashier Schedule.................................................................................................................................51Table 18: Weekly Renovation Consultant Schedule.................................................................................................51Table 19: Weekly Return Desk Attendant Schedule................................................................................................51Table 20: Weekly Paint Desk Attendant Schedule....................................................................................................52Table 21: Weekly Lot Attendant Schedule....................................................................................................................52Table 22: Weekly Handyman/Installer Schedule......................................................................................................52Table 23: Weekly Sales Manager Schedule...................................................................................................................52Table 24: Weekly Yard Supervisor Schedule...............................................................................................................53Table 25: Weekly Operations Manager Schedule......................................................................................................53Table 26: Weekly General Manager Schedule.............................................................................................................53Table 27: Projected Income Statement..........................................................................................................................54Table 28: Projected Balance Sheet...................................................................................................................................55Table 29: Projected Retained Earnings Account........................................................................................................55



Table 30: Projected Statement of Cash Flows.............................................................................................................56Schedule 1: Economic Variables........................................................................................................................................57Schedule 2: Revenues.............................................................................................................................................................57Schedule 3: Cost of Goods Sold..........................................................................................................................................58Schedule 4: Operating Expenses.......................................................................................................................................58Schedule 5: Capital Budget..................................................................................................................................................59Schedule 6: Financing Budget.............................................................................................................................................59Schedule 7: Debt Amortization..........................................................................................................................................59



1 Business Overview

1.1 IntroductionEcoShop Renovations is your one stop shop for all your green home renovation needs. First and foremost we are a retail store. However, we want to be known not just for our products, but for our amazing customer service. We will be offering a number of green products to our customers but we also want to give them the best experience and the best advice. We will be offering some products that will be exclusive to EcoShop Renovations and currently are not sold anywhere else in Canada. We understand that going green and being energy efficient is important to our customers; therefore, we at EcoShop Renovations are here to provide you the products, but also the knowledge and service to help you achieve whatever your home renovation projects may be.

1.2 Mission StatementWe are committed to outstanding customer service, knowledge, and assistance, by providing ecologically-friendly building materials and products to our customers, for all renovation project sizes.

1.3 EcoShop Renovations OverviewEcoShop Renovations has three operational goals:

To provide Saskatoon community with a variety of ecologically-friendly products all in one store

To provide high quality customer service when assisting customers To act as a point-of-contact between customers and other green renovation product

providers

1.4 Goals of EcoShop RenovationsYear 1

Establish store and customer base within Saskatoon Have $4,620,000 in sales in the first year Low employee turnover High customer satisfaction Build a strong brand and loyal customer base

Year 5

Begin the process of franchising EcoShop Renovations Based on sales, open a second store in Regina Established brand Begin planning for expansion into other provinces through Franchisee Begin planning for offering an EcoShop Renovations in-store credit card program When feasible, start offering the credit program by year 7



Research the feasibility of an employee-ownership program

1.5 Going Green and the Home Renovation IndustryWith the rise of the environmental movement, and growing concern over potential climate changes, many consumers are seeking products that are environmentally-friendly. Not only can products be built using less wasteful or less harmful techniques, but they can be shipped more efficiently, can have reduced emissions or by-products, or can operate more efficiently, leading to a reduction in resource consumption.

Consumers may be motivated by a desire to help save the planet, or can be motivated by simple economics. More efficient products will save utility costs, eventually paying for the original purchase in savings. As well, there are many government incentives to purchase efficient products, or upgrade existing appliances with high-efficiency models. In short, purchasing energy-efficient, environmentally-friendly products not only helps protect the environment, it helps consumers save money.

According to the Canadian Mortgage and Housing Corporation, 50% of over 4.3 million households in 10 metropolitan areas throughout Canada undertook renovations in 2009. Of those, 73% of households made improvements or alterations, with an overall average cost of $12,099 (Canadian Mortgage and Housing Corporation, 2010). These statistics hint at a larger picture: that many Canadian households are making renovations, and that the bulk of those renovations are in improving aging homes. As ecologically-friendly options become more commonplace, more Canadian homeowners will begin incorporating them in their home-renovation plans.

2 Operations Plan

2.1 LocationEcoShop Renovations will be located in the north end of Saskatoon near the Silver Wood Golf Course. The proposed site is at the corner of Wheeler Place and Wheeler Street. Located just off of Wanuskewin Road, EcoShop Renovations will be built in a newly expanding part of the city. This area is just beginning to be developed, and therefore will make a great site since it is close to the highway for inventory deliveries, as well with many other businesses being developed on the same site will draw a lot of traffic. Figure 1 shows the proposed location of EcoShop Renovations.



Figure 1: Site Location

The amount of land to be purchased is 275’ x 250’, for a total of 1.58 acres, or 6,387 m2. The total capital cost of the land is $52,083, or $8.15 per square metre.

2.2 Site PlanOnce the land has been purchased, we will put the site development up for tender. Figure 2 below shows the proposed site plan which includes a lumber yard, parking lot and the building.

As shown in Figure 2, the parking lot is 75’ x 275’ while the lumber yard is 175’ x 100’. This leaves a space of 175’ x 175’ for the store itself, which would be internally divided into the retail space, and the inventory storage and office space.

The store should face east, to allow optimal customer and delivery access. Figure 3 shows the site plan with customer and delivery flow.



Figure 2: Site Plan

Figure 3: Customer and Delivery Flow

2.3 Building Floor PlanEcoShop Renovations will have the following sections within the store: Appliances, Flooring, Paint, Windows and Doors, Plumbing, Lighting and Electrical, and Seasonal Items. Figure 4 shows the location of all departments as well as placement of store tills, returns desk, staff room, and offices.



Figure 4: Building Floor Plan

2.4 Quality Control ProgramEcoShop Renovations will not need ISO or HACPP, since many, if not all of our products will have to meet supplier or manufacturer requirements before they are sent to us. However, EcoShop Renovations takes pride in its products and service. Therefore, inventory will be inspected upon delivery to the store.



2.5 Organizational Tasks

2.5.1 Daily TasksThe operating hours for EcoShop Renovations are Monday to Saturday, 10 am – 9pm. These hours may be adjusted for peak production times of the year.

The management staff will be the first to arrive and open the store. They are responsible for organizing their respective departments to ready the store for the day. Tasks may include cleaning areas within the store or stocking departments. Managers are responsible for ensuring proper cash floats before a till is signed out for the day.

Before the store opens there will be a quick 20 to 30 minute meeting that the managers are responsible for leading. Each morning meeting will outline the tasks and duties for the day, any new promotions, or new products. It may also include contest or incentive announcements for all staff members. The main focus of the meeting is to let employees know of the sales goals for the day as well as give recognition to staff who are performing well or above average.

Once the meeting is adjourned, all staff will continue on with the regular duties and responsibilities based on their job descriptions. From the time the store opens to closing all employees will be focused on helping customers and meeting customer needs.

After the store closes, all employees will carry out their closing responsibilities, which include such tasks as closing tills, counting out floats, and returning any misplaced items back to their proper positions. These responsibilities will be outlined in the employee manual.

Management staff will complete a returns audit, which includes all items that customers have returned that day. The manager must ensure all items have been returned properly and that they go to their designated location. Depending on the item, this may be back on the floor for sale, or into inventory storage. Items moved to inventory are to be returned to the manufacturer due to defects or for repairs.

Management will also recount employee tills to ensure they calculate the same amount as the employee who submitted it. They are also responsible to lock up the store once all employees have left for the evening.

2.5.2 Weekly TasksWeekly responsibilities are only applicable for the General Manager and the Operations Manager. Both the General Manager and the Operations Manager will look at sales figures, inventory levels, and inventory shipments for the week. These figures will be used to produce the weekly sales report, which ensures that the store is operating efficiently and meeting its sales goals. The weekly sales report will be used to track sales progress throughout the year, as well as maintaining optimal inventory levels and identifying departments with above or below average performance.

2.5.3 Monthly TasksEvery employee will receive a monthly evaluation from his or her direct supervisor, which will help ensure that every employee within the store is providing the best customer service possible.



Starting on the first of the month, management staff will receive their evaluations. Each manager will meet with both the General Manager and the Operations Manager to be evaluated on their performance for the past month. This evaluation will include accomplishments and new qualifications attained, as well as areas for development. The evaluation will conclude with the setting of goals for the coming month.

Customer Service and Service Assistant staff will receive their evaluations starting in the middle of the month. Customer Service staff will meet with the Sales Manager, while Service Assistants will meet with the Yard Supervisor. As with management evaluations, these will include accomplishments and areas for development. Each individual will also set goals for the coming month.

Regular performance evaluations are important in any business. Outstanding employees will be recognized for their efforts, and goal-setting and review will assist employees in meeting their potential within EcoShop Renovations.

2.5.4 Yearly TasksAt the end of the fiscal year, all management staff will meet to discuss and evaluate the past year. This will be a chance to reflect on the things that have gone well and things that require improvement. It will be a chance to set new goals for the next year as well to make adjustments as required. For example, this may mean changing advertising and promotion strategies. They will be able to suggest new ideas, incentives, or products within the store. This meeting is a chance to brainstorm ideas based on the past year of activities.

2.6 Supply AnalysisEcoShop Renovations will carry a number of eco-friendly products within each department. As each department carries significantly different products, most departments have their own supplier or suppliers. Each department and its products are described in greater detail below. For a full list of all products offered, see Appendix A: Products.

2.6.1 AppliancesEcoShop Renovations will be offering Energy Star Efficient appliances and all of them will be supplied by Whirlpool. EcoShop Renovations will carry the following types of appliances:

Refrigerators Washers Dryers Dishwashers

Each type of appliance has a number of different models that will be available.



2.6.2 FlooringIn the flooring department, EcoShop Renovations will be offering bamboo flooring from Teragren. Teragren’s bamboo flooring is developed and manufactured at their plant in the United States, and is made from mature bamboo that has been sustainably harvested, which avoids problems typically associated with young bamboo. In addition, all of Teragren’s flooring products have the FloorScore®-certification, which ensures that the products do not emit volatile organic compounds (VOCs)(Teragren, 2010).

It is because of Teragren’s great attention to detail, high standards, and low VOC products that EcoShop Renovations is excited to work with Teragren and offer Teragren’s exceptional bamboo flooring.

2.6.3 Windows and DoorsIn the Windows and Doors department, EcoShop Renovations will be offering energy efficient doors from Therma-Tru Doors. Currently, Therma-Tru doors are only offered in Lowe’s Hardware Stores in Ontario.

2.6.4 PlumbingAs with other departments, the Plumbing department is focusing on a single supplier to start with. American Standard has been supplying bathroom fixtures to Canadians since 1907. American Standard recognizes the need for ecologically-friendly water fixtures, and has several product designs that help improve efficiency and reduce consumption without sacrificing quality.

EcoShop Renovations is offering a variety of toilets and shower faucets that reduce water consumption and cover an array of styles and colours.

2.6.5 Lighting and ElectricalAccording to Philips, lighting consumes 19% of all electricity in the world, and two-thirds of all lighting is based on older, less-energy efficient technology. Energy-efficient lighting has the potential to save 40% of energy consumed; this is approximately $160 billion in utility costs (Philips, 2010). EcoShop Renovations will be offering lighting products from two suppliers: Good Earth Lighting, and MaxLite. Both companies were named as an Energy Star Partner of the Year for their commitment to energy-efficient products and technology and their advocacy of energy-efficient design.

As the provider of all of EcoShop Renovations’ light fixtures, Good Earth Lighting is committed to providing high-efficiency, ecologically-friendly light fixtures. Available in a variety of styles, the



light fixtures carried by EcoShop Renovations incorporate high-efficiency technology, and many are certified as Energy Star compliant.

MaxLite provides all of the light bulbs sold by EcoShop Renovations. These include several types of compact fluorescent (CFL) with screw-type bases, several LED-based light bulbs with screw-type bases, and CFL bulbs featuring the new GU24 energy-efficient base.

2.6.6 PaintEcoShop Renovations is offering a range of paints from YOLO Colorhouse. All of YOLO Colorhouse’s paints are zero VOC, meaning they contribute to measurably better air quality and can reduce illness. While many paint companies offer “low VOC” paints, these paints can have as much as 50 times as much VOCs as zero VOC paint. YOLO Colorhouse also uses environmentally-friendly packaging, shipping methods, and promotional items (YOLO Colorhouse, 2010).

YOLO Colorhouse offers a diverse palette of colours. Most importantly, YOLO Colorhouse paints are currently not sold in Canada.

2.6.7 Seasonal ItemsThe seasonal items department is a place for the management staff to gauge interest in new products by offering small amounts of new stock that is only sold for a limited time. In the spring and summer, this could include a variety of lawn and yard care products, including fertilizers, herbicides/pesticides, soils, plants, and composting equipment. In the fall and winter, the most significant items would be Christmas lighting and decorations.

2.7 Service ProvidersEcoShop Renovations will not have any service providers (accountants, lawyers, tradespeople, etc.) on staff, so most professional work will be contracted out. However, we will employ a skilled installer/handyman team, so minor repairs and maintenance can be completed in-house.

2.8 Capital BudgetAs a medium-sized brick-and-mortar retail store, EcoShop Renovations will require a significant initial capital investment, as well as periodic capital expenditures to maintain operations. The initial capital required is $3,739,966. This includes capital purchases such as the land and building, as well as office furniture and equipment, sales equipment, shelving, inventory handling equipment, a forklift, and two vehicles for the installation staff. It also includes working capital requirements.

2.9 Cost of Sales



Sales in year one are expected to be $4,620,000, increasing to $6,078,548 in year 5. The cost of goods sold is fixed at 66% of sales price in our financial projections, leading to a fixed gross profit margin of 34%. In year one, the cost of goods sold is $3,049,200.

2.10 Operating ExpenseA five-year projection for operating expenses can be seen in Table 1. The largest operating expense is wages and benefits; see section 3.3 for further detail on wage costs.

Table 1: Operating Expenses

2011 2012 2013 2014 2015Advertising 23,500 23,970 24,449 24,938 25,437Capital Cost Allowance 81,026 157,142 151,835 146,731 138,073Debt Interest 179,920 168,631 156,213 142,553 127,527Utilities 30,000 30,600 31,212 31,836 32,473Wages and Benefits 744,726 797,601 854,231 914,881 979,838Other Variable Costs 178,620 187,299 197,606 208,585 220,282Total 1,237,792 1,366,263 1,416,586 1,470,586 1,524,712

2.11 Working Capital

2.11.1 CashLiquidity in assets is important for any business, given that unexpected costs can arise quickly, and may require a significant payment. The initial capital investment includes $200,000 in start-up cash.

2.11.2 InventoryThe inventory of the store is expected to turn over every 25 days. With a cost of goods sold in the first year of $3,049,200, the value of inventory should average $208,849.

2.11.3 Accounts ReceivableAt start-up, EcoShop Renovations will not be offering credit. In year five, if demand is significant, a store credit card option will be studied for feasibility.

2.11.4 Accounts PayableAccounts payable is projected to include accounting and legal costs, advertising costs, wages and benefits, insurance, property taxes, and utilities, as well as cost of goods sold. At 25 days, the value of accounts payable should average $267,289.

3 Human Resources Plan

3.1 Organizational StructureThe organizational hierarchy for EcoShop Renovations is shown in Figure 5. The corporation is managed by a Board of Directors whose members include the general manager, yard supervisor,



and sales manager. Additional members will include a lawyer, and two experts in home renovations that have a minimum of five years’ experience in the home renovation/construction industry.

The store will be open Monday to Saturday, 10 am to 9 pm. The opening shift begins an hour before the store opens, while the closing shift ends 30 minutes after the store closes.

Figure 5: Organizational Structure

3.2 Job Descriptions and Qualifications

3.2.1 General Manager – Management StaffThe General Manager is responsible for the overall success of EcoShop Renovations. The GM works closely with the rest of management staff and oversees the daily operations of the business. The GM will mentor and develop the management staff, resolve any customer/employee conflict, and maintain the relationships with existing suppliers while researching new products and suppliers.

Tasks:

Dailyo Oversee all business operationso Resolve conflicts with management staffo Resolve conflicts with customers as requiredo Approve expenditures

Monthlyo Hiring/firing as requiredo Develop and evaluate management

Yearlyo Compile financial statements


Board of Directors

General Manager

Operations Manager

Sales Manager

Return Desk Attendant

RenovationConsultants Cashiers

Paint Desk Attendant

Yard Supervisor

Lumber Yard Attendant

Installer/ Handyman


o Analyze past year, set strategy for upcoming yearo Evaluate yearly performance of store and employees

3.2.2 Operations Manager – Management StaffThe Operations Manager will work closely, and report to the GM. The Operations Manager is responsible for the hiring, development, and scheduling of the management staff. He or she will also hire, schedule, and fire (as required) regular employees.

The Operations Manager is also responsible for maintaining proper inventory levels within the store, managing and processing inventory orders, and ensuring that customer demands are being met. While not as visible a position as others in the management staff, the Operations Manager is vitally important to the efficient operation of the business.

Tasks:

Daily o Oversee operations and manages in-store inventory levelso Available to staff for help and questions o Responsible for opening and closing store during applicable shift

Monthly o Hiring and firing employees and management staffo Development of management staffo Set work schedules for all staffo Oversee inventory ordering, shipping, and receivingo Evaluate management and staff

Yearo Organize and ensure accuracy of inventory counto Manage and lower shrinkage

3.2.3 Sales Manager – Management StaffThe Sales Managers will be responsible for supervising, managing, and developing the customer service staff, including cashiers, returns desk, paint desk, and renovations consultants. Customer service employees deal directly with customers; therefore, it is crucial that the sales managers ensure that all customer service staff are professional, helpful, and engaging to customers that enter the store. Sales Managers are also responsible for setting goals for the customer service staff and communicating these goals during the morning meetings. Sales Managers also enforce safety standards within the store. Sales Managers report to the Operations Manager.

Tasks:

Dailyo Run morning meetings and set goals for customer service staffo Assist staff when requiredo Open/close store, depending on shift

Monthlyo Monitor and develop customer service staffo Perform monthly evaluations (including goal-setting) for all customer service staff



o Organize and facilitate training seminars for problem areas as required Yearly

o Evaluate customer service staffo With the rest of the management, meet with the General Manager and Operations

Manager to discuss new sales strategies, areas for improvement, and successes from the previous year

3.2.4 Yard Supervisor – Management StaffThe Yard Supervisor will be responsible for managing and developing the Service Assistants, including the Lumber Yard Attendants and the Installer/Handyman. Service Assistants can interact directly with customers, but also stock shelves and unload inventory deliveries. The Yard Supervisor therefore is ultimately responsible for managing and supervising inventory shipments; as such, the Yard Supervisor will work closely with the Operations Manager to ensure that inventory levels are maintained, and that inventory is delivered and shelves are stocked in an efficient and timely manner. The Yard Supervisor is also responsible for monitoring and enforcing safety standards within the lumber yard and the inventory storage area. The Yard Supervisor will meet with the Service Assistants in the morning to outline tasks, goals, and inventory shipments for the day.

Tasks:

Dailyo Run morning meetings and set goals for service assistant staffo Monitor and enforce safety standards within the lumber yard and inventory storage

areao Monitor and supervise inventory deliverieso With the Operations Manager, monitor store inventory levels and coordinate

deliveries Monthly

o Develop and train Service Assistantso Ensure proper safety training for all staffo Evaluate and set goals for all Service Assistants

Yearlyo Assist Operations Manager in organization of inventory counto Meet with Operations Manager to discuss and evaluate current suppliers and

supplier relationso Evaluate Service Assistants

3.2.5 Installer/Handyman – Service Assistant StaffThe Installer/Handyman reports to the Yard Supervisor daily to be given directions for the day. The Installer/Handyman is responsible for installation and renovation work contracted by EcoShop Renovations customers. Therefore, the Installer/Handyman is responsible for meeting scheduled customer appointments and providing high-quality work to the standard required by EcoShop



Renovations. Installation jobs vary with customer demand, but could include: appliance delivery and installation, door/window installation, toilet/shower installation, interior or exterior painting, flooring installation, and light fixture installation. Renovation work outside of installation will be taken on a case-by-case basis.

There will be two Installers/Handymen on staff: one Journeyman carpenter, and one Apprentice carpenter. The Journeyman will be certified to perform all possible installation tasks, and will work closely with the Apprentice to ensure jobs are performed correctly.

Tasks:

Dailyo Report to Yard Supervisor to review installs for the dayo Schedule upcoming service callso Meet with customers at appointed time, and complete service tasks on time and to

standard Monthly

o Meet with Yard Supervisor for monthly evaluationo Order supplies through Yard Supervisor

Yearlyo Communicate suggestions for improvement to Yard Supervisoro Assist in annual inventory counts as required

3.2.6 Lumber Yard Attendant – Service Assistant StaffThe Lumber Yard Attendant is responsible for organizing and maintaining the lumber yard inventory, and maintaining the store inventory. In the lumber yard, Attendants are responsible for ensuring inventory is organized and stocked properly. Inventory in the lumber yard will be moved using forklifts (when needed), so Lumber Yard Attendants must be certified to use such equipment, and must use it in a safe manner. Lumber Yard Attendants also unload store inventory deliveries into the inventory storage area, and stock store shelves as required. Store deliveries may also require the use of heavy equipment, which Lumber Yard Attendants must be trained on and must use safely.

The main focus of a Lumber Yard Attendant is to move and organize inventory, but he or she must also be able to assist customers when necessary. Customers may ask a Lumber Yard Attendant for assistance in the store or in the yard, or the Attendant may need to assist customers in loading their vehicles.

Tasks:

Dailyo Report to Yard Supervisor to receive duties (including inventory deliveries) for the

dayo Stock and organize lumber yardo Unload any inventory shipments



o Stock store shelves as inventory is deliveredo Assist customers as necessaryo Unlock/lock lumber yard during appropriate shift

Monthlyo Meet with Yard Supervisor for monthly evaluationo Inform Yard Supervisor of and shortages in inventory or shop supplieso Inform Yard Supervisor of problems with forklifts, pallet jacks, etc.

Yearlyo Communicate suggestions for improvements to Yard Supervisoro Assist in annual inventory counts

3.2.7 Renovation Consultant – Customer Service StaffThe job of the Renovation Consultant is to assist and support the customer in planning and organizing their renovation projects. The Renovation Consultant acts as a point-of-contact within the store, assisting the customer to assess their needs and providing expert advice on renovation options. Consultants must be able to assess the costs and benefits of different renovation scenarios, and provide some degree of financial analysis to the customer (including break-even, payback period, etc).

Customers may approach the Renovation Consultant with no plan in mind; in this case, the Consultant must assist the customer in evaluating needs and deciding on options, as well as informing the customer of ways to improve energy-efficiency and of ecologically-friendly products to be used. Other customers may meet with the Consultant and have a firm renovation plan in mind; in this scenario, the Consultant acts as a facilitator by providing specific options and prices. Finally, some customers may know exactly what they want to purchase; the Consultant needs only to show the customer where the product is, and answer any questions the customer may have.

The Renovation Consultants should have a good working knowledge of all of the products in the store, as well as knowledge about tax incentives, government grants, and other opportunities for the customer. Consultants meet with the customer in the in-store offices.

Tasks:

Dailyo Report to Sales Manager for daily taskso Meet with customers (by appointment or drop-in), and provide information and

options to customer based on specific needso Assist customers with the purchase of products as requiredo Book service/installation appointmentso Provide exceptional customer service to all customers

Monthlyo Meet with Sales Manager for monthly evaluation

Yearly



o Maintain up-to-date knowledge of tax incentives and government grants for the next fiscal year

o Communicate suggestions for improvement to Sales Manager

3.2.8 Cashier – Customer Service StaffCashiers are responsible for assisting customers in their purchases. If a customer is unable to find what they are looking for, the cashier will be able to inform them where to look. They will also call Yard Attendants to assist customers with their purchases if desired. If a customer is purchasing something that is stored in the Lumber Yard the Cashier will tell them where to go in the lumber yard. The Cashier is also responsible for the float that is in their till. They must balance the till before and after their shifts.

Tasks:

Dailyo Attend morning meeting to receive daily taskso Assist customers as requiredo Count till float before and after shift, cash in and out of till for shifto Direct other staff to assist customers as necessary


Yearlyo Assist in annual inventory counts as requiredo Communicate suggestions for improvement to Sales Manager

3.2.9 Paint Desk Attendant – Customer Service StaffThe Paint Desk Attendant is responsible for assisting customers within the Paint department. This can include advising the customer on paint options and colours, and making suggestions for renovation options. The Attendant may also inform the customer of the in-house professional painting service. The Attendant is responsible for mixing paint once the customer has made a decision.

Tasks:

Dailyo Attend morning meetings to receive daily taskso Assist customers within the Paint department as required, including providing

advice on paint optionso Mix paint as required


Yearlyo Assist in annual inventory counts as requiredo Communicate suggestions for improvement to Sales Manager



3.2.10 Returns Desk Attendant – Customer Service StaffThe Returns Desk Attendant is responsible for assisting customers with returns and refunds, subject to EcoShop Renovations’ Returns and Exchanges Policy. The Attendant is also there to help direct the customer within the store, or provide information as required. The Attendant is also responsible for cashing in and out during their shift, and is responsible for the cash in their till.

The Returns Desk Attendant is also responsible for running the EcoShop Renovations paint recycling program. Customers can bring in their unused paint, and receive store credit for the amount they turn in. The Attendant must therefore have a working knowledge of the paint recycling program’s pricing strategy. As recycled paint accumulates, the Returns Desk Attendant must inform the Paint Desk Attendant of paint to be picked up.

Tasks:

Dailyo Attend morning meetings to receive daily taskso Assist customers as required

Provide help, answer questions Assist in returns, issue refunds Administer the recycled paint program, and issue store credit

o Assist Sales Manager with returns audito Inform Sales Manager of recycled paint program statuso Count till float before and after shift, cash in and out of till for shift

Monthlyo Meet with Sales Manager for monthly evaluationo Suggest improvements for recycled paint program

Yearlyo Assist in annual inventory counts as requiredo Communicate suggestions for improvements to Sales Manager

3.3 Human Resource CostsTable 2 shows the weekly and yearly wage costs (for the first year of operations) for all staff positions, as well as the sales managers and yard supervisor.

Table 2: Wage Costs

Full-time Employees Part-time EmployeesPosition Hours

/wkWage Wage/

wkWage/yr Position Hours

/wkWage Wage/

wkWage/yr

Cashier #1 40 $9.50 $380.00$19,760.0

0Cashier #1 17 $9.50 $161.50 $8,398.00

Cashier #2 40 $9.50 $380.00$19,760.0

0Cashier #2 17 $9.50 $161.50 $8,398.00

Renovations Consultant #1

40 $10.00 $400.00$20,800.0

0Cashier #3 18 $9.50 $171.00 $8,892.00

Renovations Consultant #2

40 $10.00 $400.00$20,800.0

0Cashier #4 18 $9.50 $171.00 $8,892.00

Return Desk #1 40 $9.50 $380.00 $19,760.0 Renovations 17 $9.50 $161.50 $8,398.00


Business Plan EcoShop Renovations 0 Consultant #1

Paint Desk #1 40 $9.50 $380.00$19,760.0

0Renovations Consultant #2

17 $9.50 $161.50 $8,398.00

Lot Attendant #1 40 $9.50 $380.00$19,760.0


18 $9.50 $171.00 $8,892.00

Lot Attendant #2 40 $9.50 $380.00$19,760.0


18 $9.50 $171.00 $8,892.00

Lot Attendant #3 40 $9.50 $380.00$19,760.0

0Return Desk #1 17 $9.50 $161.50 $8,398.00

Journeyman Carpenter

40 $24.00 $960.00$49,920.0

0Return Desk #2 18 $9.50 $171.00 $8,892.00

Apprentice Carpenter

40 $12.00 $480.00$24,960.0

0Paint Desk #1 17 $9.50 $161.50 $8,398.00

Sales Manager #1 40 $14.00 $560.00$29,120.0

0Paint Desk #2 18 $9.50 $171.00 $8,892.00

Sales Manager #2 40 $14.00 $560.00$29,120.0

0Lot Attendant #1 18 $9.50 $171.00 $8,892.00

Sales Manager #3 40 $14.00 $560.00$29,120.0

0Lot Attendant #2 18 $9.50 $171.00 $8,892.00

Yard Supervisor #1 40 $14.00 $560.00$29,120.0

0Lot Attendant #3 17 $9.50 $161.50 $8,398.00

Lot Attendant #4 17 $9.50 $161.50 $8,398.00

Totals $371,280 $138,320

The total yearly wage cost without the salaried employees is $509,600. Both the operations manager and general manager receive a yearly salary of $50,000; when that is included, the total yearly wage cost for the first year is $609,600. See Appendix B: Human Resources Requirements for a breakdown of weekly schedules.

3.4 Human Resources StrategyEcoShop Renovations will employ a human resources strategy based on employee pride for the company. We want our staff to enjoy working at EcoShop Renovations and for them to take pride in helping customers achieve their renovations goals. We want our employees to be knowledgeable and professional, because great customer service is something that we take seriously and want to be known for. Our outstanding customer service should be our competitive advantage.

There will be daily meetings where management will have a chance to communicate the goals for the day, bring forth any problems that need to be addressed, but also it is also a chance to recognize the staff for their hard work and achievements.

Training will be performed internally as much as possible, and the training will be focused on individual growth and helping a person to reach their potential. Training is meant to prepare an individual to move up within the company, which is why they will work closely with their supervisors to improve and grow their skills. This is done through monthly evaluations, which is done for all staff. The monthly evaluations allow for a supervisor to evaluate the work and progress of the individual. During the meeting, supervisors will evaluate performance and progress, as well as identify areas of strength and areas for development. They will help the individual set goals and assist them in developing their skills and talents.

Promotions to management will not be available immediately. However, through the training and evaluations, management will be able to nominate customer service staff or service assistant staff



into the Management-in-Training program. This program is separate from monthly evaluations and allows individuals to learn how to be a future manager and they will be given more responsibilities and authority. EcoShop Renovations will train people to move higher within the company but still be able to understand the company’s core competencies and culture. In year five, when EcoShop Renovations begins to franchise and expand, new management positions will open up. Therefore, it is crucial that current employees are up for the challenge and are willing to relocate. Once they do, the management positions in Saskatoon will need to be filled. These will be filled internally by the Management-in-Training candidates, which will leave the entry-level positions to be filled. With this strategy, employees will feel empowered to work hard in order to be nominated for the programs, and will appreciate being given more responsibility.

3.5 Shareholders’ AgreementBefore accepting any equity financing, the EcoShop Renovations management team will consult with lawyers and business advisors, as well as the potential investors, in order to draft a shareholders’ agreement. This will outline the structure of the company, including the board of directors; rules outlining the ownership and purchase of shares; compensation for the board, as well as dividend payment rules; and other details.

4 Marketing Plan

4.1 Target MarketThe target audience for EcoShop Renovations are well-educated males or females between the ages of 30 and 65. They own their own homes, and have a minimum annual household income of $60,000. This indicates that they possess the disposable income to spend on renovating or upgrading their homes. These individuals will be married and may or may not have children. The target market can be divided into three distinct categories: first-time homeowners, long-term homeowners, and soon-to-retire homeowners.

4.1.1 First-time HomeownerThis customer is aged 30-40 years old, and may be male or female. They are married or soon-to-be married, and are well-educated. They may or may not have children. They will be established within their career, and have a total household income of $60,000. They will have recently purchased their first home, which is a starter and requires a number of renovations. Given the lower annual income, they will not be able to afford all desired renovations, and will have to prioritize renovation goals. They understand the lifecycle costs associated with cheaper, lower-quality products, and will spend more on higher-quality items on the assumption that money will be saved in the long term. This customer is willing to make sacrifices to save for larger purchases.

4.1.2 Long-term HomeownerThis customer is aged 40-55 years old, and may be male or female. They are married and will have children. They will be well-established in their home. This is likely their second home, having upgraded from their first home to a larger one. Their current home is likely in better shape than their first home, and has fewer renovation requirements. Their children will be fairly independent,



giving the couple more time and money to invest in home renovations. As with the first group, the long-term homeowner is willing to save in order to purchase higher-quality products, given the expectation of a return on the investment.

4.1.3 Soon-to-retire HomeownerThis customer is aged 55-65 years old, and may be male or female. They have been married for several years, and their children have moved out or will soon. This gives them the opportunity to spend money on themselves. Home renovation plans that have been put on hold are now a possibility. This group may be undertaking major home renovations. They appreciate high-quality items, and have the disposable income to afford them.

4.1.4 Market Categories SummaryAll three target categories are viable and have the potential to be worthwhile customers; however, the best target customer is the long-term homeowner. This group has the disposable income to spend, but also have the potential to become repeat customers. First-time homeowners have less money to spend, but may patronize EcoShop Renovations for many years; soon-to-retire homeowners have the most disposable income, and are likely planning larger renovation projects, but may only make a few purchases. Therefore, EcoShop Renovations will focus on advertising to the long-term homeowner.

4.2 Purchasing Patterns of Customers We believe that there will be three types of purchasing patterns shown by our customers: low priority consumers, medium priority consumers, and high priority consumers. The low priority consumer is the type of person who has done their research and knows exactly which type of product they want. The employees of EcoShop Renovations will be responsible to help them find the product in question and answer any additional questions they may have about it. The individual will not spend a significant length of time in the store.

The second type of pattern will be the medium priority consumers. These customers will have an idea of the type of product they would like, but also want additional professional information. The employees of EcoShop Renovations will be responsible to show them the products but also to give them more detailed information about that product and its competitors. For example, if a customer was looking to purchase an energy efficient door, the renovations consultant would outline the different types of doors, but would also go into greater detail the benefits of an energy-efficient door. This customer will be in the store for some time but would appreciate the assistance and knowledge of the staff member helping them out. They would like to make an informed decision when buying and would appreciate reassurance that they are making the right decision.

The third and final pattern will be the high priority consumer. This customer has an idea in mind for a renovation project but does not know where to begin and would like assistance throughout the project. This customer will spend a great deal of time in the store and would be the type of customer who would sit down with a renovations consultant one on one and discuss their options. They like to be informed of all their options and will make a final a decision once they have weighed



all possible scenarios. They enjoy working with someone who is knowledge and informative, and are open to suggestions and new ideas.

There will times of the year that will be busier than others because of seasonality. This means that sales will increase at the start of each new season depending on the products available at the time. For example, sales of fertilizer and landscaping products will increase during the spring, while sales of LED Christmas lights will increase during the winter as customers begin to prepare for the Christmas season.

4.3 Marketing Mix

4.3.1 ProductsEcoShop renovations will be offering ecologically friendly products in the following departments:

Appliances Flooring Windows and Doors Plumbing Lighting and Electrical Paint Seasonal Items

4.3.1.1 AppliancesAs mentioned previously, all appliances will be supplied by Whirlpool. The types of appliances we will be carrying in the store are as follows:

Refrigerators Washers Dryers Dishwashers

Each type of appliance has a number of different models that will be available.

4.3.1.1.1 RefrigeratorRefrigerators will be available in three different styles: French Door Bottom-Freezer, Freestanding Side-by-Side, and Top Freezer. All models within each style will have

the Energy Star seal and will also come in a variety of different colors, including black, white, and stainless steel.


Figure 6: Whirlpool Refrigerators


4.3.1.1.2 WasherWashing Machines will be available in two different styles: the Duet Capacity front loading washer, and the Cambrio top loading washer. All models within each style will have the Energy Star seal and will also come in a variety of different colors, including black, white, red, and stainless steel.


Figure 7: Whirlpool Washers


4.3.1.1.3 DryerDryers will be available in two different styles: the Duet Capacity front loading dryer, and the Cambrio dryer. Each dryer has the option of being steam electric or gas. Dryers are the only appliance that is not Energy Star certified. Whirlpool does offer other energy saving features depending on the model. Each model is also offered in a variety of different colors, including black, white, stainless steel, and red.

4.3.1.1.4 DishwasherDishwashers will be available in two different styles: the Tall Tub, and the Built-in. All models within both styles will have the Energy Star seal and will come in a variety of different colors, including black, white, and stainless steel.

4.3.1.2 FlooringAs mentioned previously, all flooring will be supplied by Teragren. Teragren offers a wide variety of different plank types as well as colors. The bamboo flooring lines we will be carrying in store are as follows:

Portfolio Collection - Wide plank, high-traffic strand bamboo with Xcora™ technology

Synergy™ - Solid-strip, multiple lengths strand bamboo flooring with Xcora™ technology

Synergy™ - Wide-plank High-traffic, strand bamboo with Xcora™ technology and glueless, self-locking system

Craftsman II Collection - Long-plank bamboo flooring

Studio Collection - Wide-plank floating floor with Välinge-patented glueless, self-locking system

Signature Naturals - Prefinished Solid-strip bamboo flooring


Figure 8: Whirlpool Dryers

Figure 9: Whirlpool Dishwashers

Figure 10: Teragren Flooring Styles


Signature Colors - Solid strip in stain colors

Elements - Solid-strip bamboo flooring in 3' lengths

4.3.1.3 Windows and DoorsAs mentioned previously, all windows and doors will be supplied by Therma-Tru Doors. Therma-Tru offers a wide variety of entry and patio doors that come in different styles, colors, and wood types. The selection of doors we will be carrying within in the store is as follows:

Entry Doors:

Fibreglass Classic-Craft American Series

Fibreglass Classic-Craft Mahogany Series

Fibreglass Classic-Craft Oak Series



Patio Doors:

French/ Hinged Classic-Craft Mahogany Series

French/ Hinged Classic-Craft Oak Series

Within each series customers will have the choice of the glass style to fit inside the entry door.



4.3.1.3.1 Entry DoorsThe fibreglass entry doors in all series are energy star efficient and customers have the choice of a number of different glass styles to fit their doors. The chosen glass style will then also be fitted for the proper transom and sidelights to fit around the door.

In terms of the Classic-Craft American Series, customers can choose from five different glass styles. The glass styles are as follows:

Hazelton Savannah Villager Homeward Clear

In terms of the Classic-Craft Mahogany Series, customers can choose from six different glass styles. The glass styles are as follows:

Arcadia Ashurst Bella Longford Central Park Clear

In terms of the Classic-Craft Oak Series, customers can choose from seven different glass styles. The glass styles are as follows:

Arcadia Bella Provincial Cambridge Central Park Grilles Clear



4.3.1.3.2 French/Hinged Patio DoorsThe fibreglass patio doors in both series are energy star efficient and customers have the choice of a number of different glass styles to fit their doors.

In terms of the Classic-Craft Mahogany Series, there is only one style of glass that will currently fit and that is the clear style glass.

In terms of the Classic-Craft Oak Series, customers can choose from the clear style or grilles style of glass to fit their door.

4.3.1.4 PlumbingAs mentioned previously, all plumbing products will be supplied by American Standard. American Standard offers a wide variety of low flow ecologically friendly products. EcoShop Renovations will be focusing on a number of different models in the following categories:

Toilets Faucets Showers Sinks

4.3.1.4.1 ToiletsThe toilets that EcoShop Renovations will carry are all high efficiency low flow toilets that use up to 20% less water. There a five different styles of low flow toilets to choose from and they are as follows:

Boulevard FloWise Cadet 3 FloWise Tropic FloWise H2 Option FloWise Dual Flush

Each style can also be purchased in a number of different colors, the most common being Bone, Linen, and White.



4.3.1.4.2 FaucetsThe faucets that EcoShop Renovations will carry are stylish and practical. Customers will have three styles to choose from and they are as follows:

Colony Soft Reliant 3 Amarilis Jasmine

Each style can also be purchased in a number of different colors. The most common colors are Polished Chrome and Satin.

4.3.1.4.3 ShowersThe showers that EcoShop Renovations will carry can be found in two different styles. Both are low flow water shaving show heads that can reduce water consumption by up to 40%. The two different styles are as follows:

Colony Soft Reliant 3

Each style can also be purchased in a number of different colors. The most common are Polished Chrome, Satin, and Stainless Steel.

4.3.1.4.4 SinksThe sinks that EcoShop Renovations will carry can be found in three different styles. All three options are very stylish and can be either above counter, below counter, or can stand alone. The three stylish options are as follows:

Colony Piazza Boulevard

Each style can also be purchased in a number of different colors. The most common are Black, Bone, Linen, and White.



4.3.1.5 Lighting and ElectricalAs mentioned previously, all lighting and electrical products will be supplied by Good Earth Lighting. Good Earth Lighting offers a wide variety of lighting fixtures for residential projects but also hospitality/specification projects as well. EcoShop Renovations will be offering a variety of residential fixtures in the following categories:

Indoor Outdoor Security Lights Portable Lights Light Bulbs

4.3.1.5.1 Indoor FixturesIn terms of the Indoor lighting fixtures, all models are Energy Star Certified and depending on the model chosen come in a variety of different finishes. Indoor fixtures can be found in three different styles:

Flush Mount Semi Flush & Pendant Linear & Utility

Once a customer chooses from the three styles they can then choose from a variety of different models. In the Flush Mount style EcoShop Renovations will be carrying the following ten models:

Taverna Barrington Glencoe Tuscany Andiamo Tavallo Etruscan Allison Mushroom Globe



In the Semi Flush and Pendant style EcoShop Renovations will be carrying the following ten models:

Taverna Barrington Lucerne Taos Avalon Capitol Tuscany Glencoe Trieste Metropolitan

In the Linear and Utility style EcoShop Renovations will be carrying the following four models:

Modena Jupiter Valentina T8 Wrap

4.3.1.5.2 Outdoor FixturesIn terms of the Outdoor lighting fixtures, all models are Energy Star Certified and depending on the model chosen come in a variety of different finishes, such as rust, polished brass, or brushed nickel. Outdoor fixtures can be found in five different styles:

Cambria



Birch II Birch II Post Elm Pine

4.3.1.5.3 Security LightsIn terms of the Security Light fixtures, all models are Energy Star Certified and generally come in two color choices, those being either black or white. Security Light fixtures can be found in three different styles:

Dusk-to-dawn Flush Light

Dusk-to-dawn Mounted Light

High Abuse Light

4.3.1.5.4 Portable LightsIn terms of the Portable Light fixtures, all models are Energy Star Certified and generally come in two finishes (antique bronze and brushed nickel). Portable Light fixtures can be found in three different styles:

Table & Desk Lamps Floor Lamps Torchiere

Once a customer chooses from the three styles they can then choose from a variety of different models. In the Table and Desk Lamp style EcoShop Renovations will be carrying the following three models:

Glencoe Taverna Barrington

In the Floor Lamp style, EcoShop Renovations will be carrying the following three models:

Taverna Barrington Reading



In the Torchiere style, EcoShop Renovations will be carrying the following three models:

Glencoe/ Laguna Niguel

Lincoln Park Tuscany

4.3.1.5.5 Light BulbsIn terms of the Light Bulbs that are carried and sold within EcoShop Renovations, they will be supplied as mentioned before by MaxLite. MaxLite offers many energy efficient lighting products, we will however be focusing on the following types:

Compact fluorescent (CFL) with screw-type bases

LED-based light bulbs with screw-type bases

CFL bulbs with the new GU24 energy-efficient base



4.3.1.6 PaintAs mentioned previously, EcoShop Renovations will be offering Yolo Colorhouse Paint. Yolo offers a great selection of paint that is not only ecologically friendly but also has low VOC’s. EcoShop Renovations will be offering different types of Interior and Exterior paint.

In terms of the Interior paint, customers can choose from four different styles/finishes. Those styles are as follows:

Flat Eggshell Semi Gloss Primer

In terms of the Exterior paint, customers can choose from three different styles/finishes. Those styles are as follows:

Velvet Flat Satin Primer

Once a customer has chosen the proper style of paint, they then have a large color palette to choose from to suit their decorating needs. For full paint palette please see diagram below.



4.3.1.7 Seasonal ItemsThe Season Item department will be based on customer interest and products will only be sold for a limited time. The season products can be broken down into two major groups as follows:



Spring/Summer Items Fall/Winter Items

During the spring/summer months EcoShop Renovations will focus on outdoor items for the garden and yard. These will be items such as ecologically friendly fertilizers, herbicides/pesticides, soils, plants, and composting equipment.

During the fall and winter months EcoShop Renovations will focus on Christmas lighting and decorations.

At this time, no suitable supplier has been found. It will be the responsibility of the General Manager and the Operations Manager to find a suitable supplier during the respective times of the years.

For a full inventory list, please see Appendix A.

4.3.2 PricingOn products that are also carried by competitors, EcoShop Renovations’ pricing strategy will be competitive. However, we will price our products slightly higher than competitors due to our superior customer service and professional advice. Finally, we will also carry several exclusive products; these will be priced at a premium.

4.3.3 PromotionThe promotion strategy for EcoShop Renovations focuses on three areas: billboards, radio ads, and a corporate website. Magazine advertisements and targeted newspaper flyers are also being considered. See Table 4: Marketing Expenses for a breakdown of advertising costs.

First year of businesso 2 billboards

One downtown, run for initial 6 months One in southern Saskatoon, run for next 6 months

o 3 radio ads First promotes grand opening Second is a catchy jingle promoting the store Third is played seasonally to promote special items

o Website Information about all products and models available Store information, hours of operation, etc

o Magazine ad Saskatoon Home Magazine, circulated quarterly

After 3-5 yearso Newspaper flyers distributed to specific communities

Sutherland Silverwood/Lawson Heights 8th St Area (Holliston, Greystone Heights)



Martensville Warman Dalmeny

4.3.4 PlaceAs mentioned previously, EcoShop Renovations will be located on the corner of Wheeler Street and Wheeler Place, which is just off of Wanuskewin Road. This is an optimal place for EcoShop Renovations because it is a new area that is being developed. These new developments and businesses will naturally draw people. As it is located on the north side of the city, with easy access to Highway 11, we will also have access to commuters coming in from the communities north of Saskatoon, including Warman, Martinsville, Osler, Hague, and Dalmeny. EcoShop Renovations is also in an area of the city that has a high concentration of homes that will be in need of renovations. According to Statistics Canada, the Saskatoon are has over 70,000 dwellings built before 1986 (Statistics Canada, 2006). Due to their age, many of these houses are in need of renovations and updates. We at EcoShop Renovations are then in a great location to service them. Also, being close to the highways makes it easy and efficient not only for local traffic but for inventory deliveries as well.

4.4 Competitive AnalysisThe direct competitors for EcoShop Renovations include all major hardware and home building supply stores, such as Home Depot, RONA, and J&H Builders. There is some variance in the prices charged, depending on the quality of product and the degree of customization. Prices seem to increase over time, indicating steady demand.

Indirect competitors include appliance retailers, paint and wall covering stores, flooring stores, and electrical/plumbing supply stores. These stores have the advantage of greater depth of knowledge, but generally have higher prices, and carry a much narrower product mix.

A summary of the traits of both direct and indirect competitors can be seen in Table 3.

Table 3: Competitor Analysis

Business Competitive Advantage Price ComparisonHome Depot Large

Well-knownOnline shopping

Lower

RONA CanadianOnline shopping

Lower

J&H Builders Locally owned SimilarLocal hardware stores Personal attention

Convenient locationsSimilar

Appliance dealers (Saskatoon Appliance, Future Shop, Sears)

Greater selection Similar

Paint/wall covering stores Greater selectionVariety of styles

Higher



Flooring stores Greater selectionVariety of styles

Higher

4.5 Marketing ExpensesEffective and timely marketing is required to meet projected sales figures. Yearly advertising costs are projected to start at $23,500 in year one, and increase with inflation; this is a conservative estimate, as actual costs are predicted to decrease to $16,000 yearly after year one, increasing to $21,000 in year five. A summary of marketing expenses is shown in Table 4.

Table 4: Marketing Expenses

2011 2012 2013 2014 2015Website 8,000 500 500 500 500Billboard 10,000 10,000 10,000 10,000 10,000 Radio Ads 4,500 4,500 4,500 4,500 4,500Magazine Ad 1,000 1,000 1,000 1,000 1,000Newspaper Flyers - - - - 5,000 Direct Advertising Costs 23,500 16,000 16,000 16,000 21,000

5 Financial Plan

5.1 Capital RequirementsEcoShop Renovations requires a capital investment of $3,598,406, which is projected to be 50% debt financing and 50% equity financing. A breakdown of the 5-year capital investments required can be seen in Table 5.

Table 5: Capital Investment

2011 2012 2013 2014 2015Land 52,083Building 3,451,323Furniture & Fixtures 45,000 10,000 10,000 10,000 10,000Vehicles 50,000 25,000Total 3,598,406 10,000 35,000 10,000 10,000

5.2 Summary of Projected Income StatementThe five-year project income statement is based on 10 customers per hour of business, with an average purchase of $120. The number of customers grows at 5% per year, while the average purchase value grows at 2% per year. A summary of the projected income statement can be seen in Table 6, while the full projected statement can be seen in Appendix C: Financial Projections.


Business Plan EcoShop Renovations Table 6: Projected Income Statement Summary

For the year ended 2011 2012 2013 2014 2015Sales 4,620,000 4,948,020 5,299,329 5,675,582 6,078,548COGS 3,049,200 3,265,693 3,497,557 3,745,884 4,011,842Gross Profit 1,570,800 1,682,327 1,801,772 1,929,698 2,066,706Operating Expenses 1,237,792 1,366,263 1,416,586 1,470,586 1,524,712Taxable Income 333,008 316,064 385,186 459,112 541,994Income Taxes 0 51,616 48,990 59,704 71,162Net Income 333,008 264,448 336,196 399,408 470,832

5.3 Summary of Projected Balance SheetThe five-year projected balance sheet is based on the capital requirements and income statement given earlier. A summary of the balance sheet is given in Table 7.

Table 7: Projected Balance Sheet Summary

As at 2011 2012 2013 2014 2015Current Assets 568,432 674,439 710,783 717,981 774,424Noncurrent Assets 3,517,380 3,370,238 3,253,402 3,116,671 2,988,598Total Assets 4,085,811 4,044,677 3,964,185 3,834,652 3,763,022

Liabilities 1,953,601 1,848,018 1,731,331 1,602,389 1,459,928Equity 2,132,211 2,196,659 2,232,855 2,232,262 2,303,094Total Liabilities and Equity 4,085,811 4,044,677 3,964,185 3,834,652 3,763,022

5.4 Risk Analysis

5.4.1 Critical VariablesAs with most retail businesses, EcoShop Renovations has two main critical variables: quantity of sales, and gross profit margin. In addition, wages and benefits are critical, as they constitute approximately 60% of operating expenses.

5.4.2 Contingency PlanQuantity of sales could be adversely affected in a number of ways. Despite our marketing, customers may not choose to shop at EcoShop Renovations. Larger competitors may decide to compete more directly, and could potentially undercut our prices, drawing our customers away. To help prevent this, we must focus on an effective, visible marketing campaign, emphasizing our competitive advantages (like exclusive products and an emphasis on customer service). Furthermore, we must improve those advantages by researching innovative products and by maintaining a high standard of customer service (by offering staff incentives and critical feedback).



Gross profit margin could decrease in two ways: by a reduced selling price, or by an increased cost. By maintaining high-quality relationships with our exclusive suppliers, EcoShop Renovations can minimize cost increases. We can maintain our premium selling price by offering exclusive products and quality customer service.

Wages can be managed by two strategies: minimizing employee overhead, and maintaining high productivity. Employees that aren’t used to their potential are a waste of EcoShop Renovations’ wage budget. They should be assigned to new areas, given more responsibilities, or downsized as necessary. Furthermore, employees should be encouraged to maximize their productivity through incentives and bonuses.

5.5 Dividend PolicyIt can be seen in Table 29: Projected Retained Earnings Account that dividends are projected to be paid in years 2-5, starting at $200,000 and increasing to $400,000. The dividend payment policy is to pay dividends required to maintain a cash balance of $500,000.

5.6 Economic ForecastIn setting up the financial projection model for EcoShop Renovations, several values were assumed. The interest rate on debt was assumed to be 10% for all years, while inflation was set at 2%. Customer growth rate was set at 5%. Gross profit margin on all products was consistent across years; appliances were assumed to have a gross profit margin of 10%, while all other products had a gross profit margin of 20%. Most operating costs were assumed to increase with inflation, with the exception of cash short, wages and benefits, repair and maintenance, and other variable costs, which are all based on yearly revenues. Debt financing was set at 50% of capital required, amortized over 10 years. To facilitate profitability analysis, required return on investment was set at 15%.

5.7 Ratio AnalysisThe ratios used to evaluate this business are the debt-to-equity ratio, net profit margin, and return on equity. It can be seen that over the five-year projection, all ratios are improving; debt-to-equity decreases from 0.92 to 0.63, net profit margin increases from 0.07 to 0.09, and return on equity increases from 0.16 to 0.24. This indicates that the business is profitable over the five-year projection period, and by year 5, is in a position to expand the business. See Table 8 for more detail.

Table 8: Ratio Analysis

2011 2012 2013 2014 2015Debt-to-Equity 0.92 0.84 0.78 0.72 0.63Net Profit Margin 0.07 0.06 0.07 0.08 0.09Return on Equity 0.16 0.14 0.17 0.21 0.24



5.8 Break-Even AnalysisBreak-even analysis was performed for each of the five years in the projection. The gap between break-even revenues and projected revenues increases over the years, indicating stronger sales performance. For a summary of break-even revenues, see Table 9.

Table 9: Break-even Analysis

2011 2012 2013 2014 2015Break-even Revenues 2,440,687 2,924,537 2,778,547 2,671,003 2,531,558Projected Revenues 4,620,000 4,948,020 5,299,329 5,675,582 6,078,548Difference 2,179,313 2,023,483 2,520,782 3,004,579 3,546,990

5.9 Net Present ValueThe initial capital investment required is $1,799,203, assuming 50% equity financing. Given the projected cash flows, the net present value of that investment with a required return on investment of 15% is $837,835.

5.10 Internal Rate of ReturnThe internal rate of return with 50% equity financing is 27%.

5.11 External Rate of ReturnThe external rate of return with 50% equity financing is 21%, subject to actual dividends paid.

6 SummaryEcoShop Renovations addresses a pressing need to many consumers: the desire to save money. Many houses in the Saskatoon area were built before increased energy-efficiency was incorporated into house design. These older houses can benefit greatly from energy-efficient renovations; in some cases, utility costs can decrease by as much as 35%. By investing in upgrades to their homes, consumers can save a great deal of money in the long term.

In addition to providing Saskatoon-area homeowners with the products to boost their home energy-efficiency, EcoShop Renovations intends to act as a point-of-contact for customers who are seeking more information. Our dedicated consultants will provide our customers with renovation ideas, potential upgrades and their associated utilities savings, and tax incentives, grants, and rebates that they may be eligible for. When a customer enters EcoShop Renovations, he or she will feel comfortable approaching our staff with any questions they might have, and can be confident that they will be given great advice.

The analysis shown in this business plan indicates that although EcoShop Renovations requires a significant capital investment, potential returns are significant, and future expansion could make the business very successful.



Appendix A: ProductsTable 10: Whirlpool

Style Size Model Number Colour OptionsRefrigeratorsFrench Door 27 cu ft GI7FVCXW StainlessFrench Door 24.8 cu ft GX5FHDXV S,B,WFrench Door 22 cu ft GX2SHBXV S,B,WFree Standing 26 cu ft GSS26C4XX S,B,WFree Standing 21.8 cu ft ED2FHEXV S,B,WFree Standing 25.3 cu ft ED5FHEXV S,B,WTop Freezer 20.9 cu ft W1TXEMFW S,B,WTop Freezer 18.2 cu ft ET8FTEXV B,WWashersCapacity Duet 4.5 cu ft WFW9750W R,W,SCapacity Duet 4.0 cu ft WFW9150W WTop Load 5.2 cu ft WTW7800X S,W,BTop Load 4.3 cu ft WTW5700X S,WDryersSteam Electric 7.2 cu ft YWED9550W R,S,WElectric 6.7 cu ft YWED9270X R,S,WCabrio Electric 7.6 cu ft YWED7800X S,W,BSteam Gas 7.5 cu ft WGD9750W R,S,WCabrio Steam Gas 7.6 cu ft WGD7800X S,W,BDishwasherTall Tub Style 24x34x23 GU3200XTX S,W,BTall Tub Style 24x34x23 DU1015XTX S,W,BTall Tub Style 24x34x23 GU2300XTV S,W,BTall Tub Style 24x34x23 GU2475XTV S,W,B

Table 11: Teragren Bamboo Flooring

Style Size Model Number Colour OptionsPortfolio Collection Wide plank n/a Multiple colorsSynergy™ Solid-strip n/a Multiple colorsSynergy™ Wide-plank n/a Multiple colorsCraftsman II Collection Long-plank n/a Multiple colorsStudio Collection Wide-plank n/a Multiple colorsSignature Naturals Solid-strip n/a Multiple colorsSignature Colors Solid-strip n/a Multiple colorsElements solid-strip n/a Multiple colors


Business Plan EcoShop Renovations Table 12: Therma-Tru Fibreglass Exterior Doors

Style Size Model Number Colour OptionsClassic Craft American CollectionHazelton 3'0" x 6'8" CCA234 n/aHazelton 3'0" X 8'0" CCA8234 n/aSavannah 3'0" x 6'8" CCA213 n/aSavannah 3'0" X 8'0" CCA8213 n/aVillager 3'0" x 6'8" CCA232 n/aVillager 3'0" X 8'0" CCA8232 n/aHomeward 3'0" x 6'8" CCA231 n/aHomeward 3'0" X 8'0" CCA8231 n/aClear 3'0" x 6'8" CCA230 n/aClear 3'0" X 8'0" CCA8230 n/aClassic Craft Mahogany CollectionArcadia 3'0" x 6'8" CCM309 n/aArcadia 3'0" X 8'0" CCM894 n/aAshurst 3'0" x 6'8" CCM305 n/aAshurst 3'0" X 8'0" CCM893 n/aBella 3'0" x 6'8" CCM310B n/aBella 3'0" X 8'0" CCM895B n/aLongford 3'0" x 6'8" CCM303 n/aLongford 3'0" X 8'0" CCM892 n/aClear 3'0" x 6'8" CCM300 n/aClear 3'0" X 8'0" CCM891 n/aClassic Craft Oak CollectionArcadia 3'0" x 6'8" CC59 n/aArcadia 3'0" X 8'0" CC889 n/aProvencal 3'0" x 6'8" CC57 n/aProvencal 3'0" X 8'0" CC887 n/aCambridge 3'0" x 6'8" CC58 n/aCambridge 3'0" X 8'0" CC886 n/aClear 3'0" x 6'8" CC50 n/aClear 3'0" X 8'0" CC880 n/a

Table 13: Therma-Tru Hinged French Style Patio Doors

Style Size Model Number Colour OptionsClassic Craft Mahogany CollectionClear 3'0" x 6'8" CCM100 n/aClear 3'0" X 8'0" CCM891 n/aClassic Craft Oak CollectionGrilles 3'0" x 6'8" CC102 n/aGrilles 3'0" X 8'0" CC882 n/aClear 3'0" x 6'8" CC100 n/aClear 3'0" X 8'0" CC880 n/a


Business Plan EcoShop Renovations Table 14: YOLO Colorhouse Paint

Style Size Model Number Colour OptionsInterior PaintFlat 3.75 qts n/a See full color paletteEggshell 3.75 qts n/a See full color paletteSemi Gloss 3.75 qts n/a See full color palettePrimer 3.75 qts n/a See full color paletteExterior PaintVelvet Flat 3.75 qts n/a See full color paletteSatin 3.75 qts n/a See full color palettePrimer 3.75 qts n/a See full color palette

Table 15: American Standard Plumbing Fixtures

Style Size Model Number Colour OptionsToiletsBoulevard FloWise 12" (305mm) 2891128 Bone, Linen, WhiteCadet 3 FloWise 12" 2829513 Bone, Linen, White, BlackTropic FloWise 12" 2786128 Bone, Linen, WhiteH2 Option 12" 2886516 Bone, Linen, WhiteFloWise Dual Flush 12" 2489516 WhiteFaucetsColony Soft n/a 2175565 Polished ChromeReliant 3 n/a 7385000 Polished Chrome, SatinAmarilis Jasmine n/a 3801432 Polished Chrome, SatinShowersColony Soft n/a T675567 Polished ChromeReliant 3 n/a T385507 Polished Chrome, SatinSinksColony n/a 113811 Bone, Linen, WhitePiazza n/a 478403 Bone, Linen, White, BlackBoulevard n/a 641001 Bone, Linen, White, Black

Table 16: Good Earth Lighting Fixtures

Style Size Model Number Colour OptionsIndoor Flush MountTaverna 12", 15", 19" n/a Brushed NickelBarrington 12", 15", 19" n/a Antique BronzeGlencoe 12", 15" n/a Brushed NickelTuscany 15" n/a Antique BrassAndiamo 14" n/a Brushed NickelTavallo 15", 19" n/a Oil Rubbed Bronze



Etruscan 19" n/a AntiqueAllison 12" n/a Textured WhiteMushroom 9" n/a Brushed NickelGlobe 6" n/a Brushed NickelIndoor Semi-Flush & PendantTaverna 13",19" n/a Brushed NickelBarrington 19" n/a Antiqued BronzeLucerne 13" n/a Oil Rubbed BronzeTaos 16"x15" n/a Aged BronzeAvalon 23"x22" n/a RustCapitol 11"x9" n/a Oil Rubbed BronzeTuscany 15",19" n/a Antiqued BronzeGlencoe 19" n/a Brushed NickelTrieste 19" n/a Polished BrassMetropolitan 16",18" n/a Antiqued BronzeIndoor Linear & UtilityModena 46" n/a StainlessJupiter 15" n/a WhiteValentina 1"x4"x18" n/a WhiteT8 Wrap 4', 2' n/a WhiteOutdoorCambria 10"x9"x3" n/a Brushed NickelBirch II 16"7"x5" n/a Rust, Polished BronzeBirch II Post 15"x7"x7" n/a Rust Elm 9"x7"x4" n/a Rust, Brushed NickelPine 6"x5"x7" n/a Black, WhiteOutdoor Security LightsDusk-to-dawn Flush 7"x4"x2" n/a Black, WhiteDusk-to-dawn Mounted n/a G8923 Black, WhiteHigh Abuse Light n/a G8526 WhitePortable Table and Desk LampsGlencoe 13"x7"x9" n/a Brushed NickelTaverna 14"x8"x24" n/a Brushed NickelBarrington 14"x6"x28" n/a Antiqued BronzePortable Floor LampsTaverna 17"x11"x62" n/a Brushed NickelBarrington 16"x10"60" n/a Antiqued BronzeReading n/a G6024 Antiqued BronzePortable TorchieresGlencoe 12"x11"x72" n/a Brushed Nickel, Antique BronzeLincoln Park 12"x11"x72" n/a Black, WhiteTuscany 12"x11"x72" n/a Antiqued Bronze



Appendix B: Human Resources RequirementsThe following are proposed schedules for employee hours.

Table 17: Weekly Cashier Schedule

Position Monday Tuesday Wednesday Thursday Friday Saturday Total Hours

Wage Total Cost

Full time #1

8 8 8 8 8 40 $9.50 $380.00

Full time #2

8 8 8 8 8 40 $9.50 $380.00

Part time #1

4.5 4.5 8 17 $9.50 $161.50

Part time #2

4.5 4.5 8 17 $9.50 $161.50

Part time #3

4.5 4.5 4.5 4.5 18 $9.50 $171.00

Part time #4

4.5 4.5 4.5 4.5 18 $9.50 $171.00

Table 18: Weekly Renovation Consultant Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $10.00 $400.00

Full time #2

8 8 8 8 8 40 $10.00 $400.00

Part time #1

4.5 4.5 8 17 $10.00 $170.00

Part time #2

4.5 4.5 8 17 $10.00 $170.00

Part time #3

4.5 4.5 4.5 4.5 18 $10.00 $180.00

Part time #4

4.5 4.5 4.5 4.5 18 $10.00 $180.00

Table 19: Weekly Return Desk Attendant Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $9.50 $380.00

Part time #1

4.5 4.5 8 17 $9.50 $161.50

Part time #2

4.5 4.5 4.5 4.5 18 $9.50 $171.00


Business Plan EcoShop Renovations Table 20: Weekly Paint Desk Attendant Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $9.50 $380.00

Part time #1

4.5 4.5 8 17 $9.50 $161.50

Part time #2

4.5 4.5 4.5 4.5 18 $9.50 $171.00

Table 21: Weekly Lot Attendant Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $9.50 $380.00

Full time #2

8 8 8 8 8 40 $9.50 $380.00

Full time #3

8 8 8 8 8 40 $9.50 $380.00

Part time #1

4.5 4.5 4.5 4.5 18 $9.50 $171.00

Part time #2

4.5 4.5 4.5 4.5 18 $9.50 $171.00

Part time #3

4.5 4.5 8 17 $9.50 $161.50

Part time #4

4.5 4.5 8 17 $9.50 $161.50

Table 22: Weekly Handyman/Installer Schedule


Wage Total Cost

Journeyman Carpenter

8 8 8 8 8 40 $24.00 $960.00

Apprentice Carpenter

8 8 8 8 8 40 $12.00 $480.00

Table 23: Weekly Sales Manager Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $14.00 $560.00

Full time #2

8 8 8 8 8 40 $14.00 $560.00

Full time #3

8 8 8 8 8 40 $14.00 $560.00


Business Plan EcoShop Renovations Table 24: Weekly Yard Supervisor Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 $14.00 $560.00

Table 25: Weekly Operations Manager Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 Salary n/a

Table 26: Weekly General Manager Schedule


Wage Total Cost

Full time #1

8 8 8 8 8 40 Salary n/a



Appendix C: Financial Projections

Table 27: Projected Income Statement

For the year ended 2011 2012 2013 2014 2015

Sales 4,620,000 4,948,020 5,299,329 5,675,582 6,078,548COGS 3,049,200 3,265,693 3,497,557 3,745,884 4,011,842Gross Profit 1,570,800 1,682,327 1,801,772 1,929,698 2,066,706

Operating ExpensesAccounting & Legal 20,000 20,400 20,808 21,224 21,649Advertising 23,500 23,970 24,449 24,938 25,437Cash Short 4,620 4,948 5,299 5,676 6,079Wages 646,800 692,723 741,906 794,581 850,997Employee Benefits 97,926 104,878 112,325 120,300 128,841Insurance 25,000 25,500 26,010 26,530 27,061Debt Interest 179,920 168,631 156,213 142,553 127,527Capital Cost Allowance 81,026 157,142 151,835 146,731 138,073Property Taxes 10,000 10,200 10,404 10,612 10,824Repair & Maintenance 46,200 49,480 52,993 56,756 60,785Tools & Equipment 2,500 2,550 2,601 2,653 2,706Uniforms 1,000 1,020 1,040 1,061 1,082Utilities 30,000 30,600 31,212 31,836 32,473Other Variable Costs 69,300 74,220 79,490 85,134 91,178Total Operating Expenses

1,237,792 1,366,263 1,416,586 1,470,586 1,524,712

Taxable Income 333,008 316,064 385,186 459,112 541,994Income Taxes 0 51,616 48,990 59,704 71,162Net Income 333,008 264,448 336,196 399,408 470,832


Business Plan EcoShop Renovations Table 28: Projected Balance Sheet

Year 2011 2012 2013 2014 2015Current Assets Cash 359,583 450,762 471,224 461,413 499,640 Inventories 208,849 223,678 239,559 256,567 274,784 Total Current Assets 568,432 674,439 710,783 717,981 774,424

Non-Current Assets Land 52,083 52,083 52,083 52,083 52,083 Building 3,451,323 3,451,323 3,451,323 3,451,323 3,451,323 Furniture and Fixtures 45,000 55,000 65,000 75,000 85,000 Vehicles 50,000 50,000 75,000 75,000 75,000 Accumulated CCA -81,026 -238,168 -390,004 -536,735 -674,808 Total Non-Current Assets 3,517,380 3,370,238 3,253,402 3,116,671 2,988,598

Total Assets 4,085,811 4,044,677 3,964,185 3,834,652 3,763,022

Liabilities Accounts Payable 267,289 285,888 305,799 327,117 349,940 Long Term Debt 1,686,311 1,562,130 1,425,531 1,275,273 1,109,988 Total Liabilities 1,953,601 1,848,018 1,731,331 1,602,389 1,459,928

Common Shares 1,799,203 1,799,203 1,799,203 1,799,203 1,799,203 Retained Earnings 333,008 397,456 433,652 433,059 503,891 Total Equity 2,132,211 2,196,659 2,232,855 2,232,262 2,303,094

Total Liabilities & Equity 4,085,811 4,044,677 3,964,185 3,834,652 3,763,022

Table 29: Projected Retained Earnings Account

For the year ended 2011 2012 2013 2014 2015Beginning RE 0 333,008 397,456 433,652 433,059Net Income 333,008 264,448 336,196 399,408 470,832Dividends Paid 0 -200,000 -300,000 -400,000 -400,000End RE 333,008 397,456 433,652 433,059 503,891


Business Plan EcoShop Renovations Table 30: Projected Statement of Cash Flows

For the year ended 2011 2012 2013 2014 2015

Net Income 333,008 264,448 336,196 399,408 470,832CCA 81,026 157,142 151,835 146,731 138,073Operating Cash Flow 414,034 421,590 488,031 546,139 608,904

Changes in Working CapitalInventories -208,849 -14,828 -15,881 -17,009 -18,216Accounts Payable 267,289 18,599 19,911 21,317 22,823Total 58,440 3,770 4,030 4,309 4,607

Investment ActivitiesLand -52,083 0 0 0 0Buildings -3,451,323 0 0 0 0Furniture and Fixtures -45,000 -10,000 -10,000 -10,000 -10,000Vehicles -50,000 0 -25,000 0 0Total -3,598,406 -10,000 -35,000 -10,000 -10,000

Financing ActivitiesLong Term Debt 1,686,311 -124,181 -136,599 -150,259 -165,285Common Shares 1,799,203 0 0 0 0Dividends 0 -200,000 -300,000 -400,000 -400,000Total 3,485,514 -324,181 -436,599 -550,259 -565,285

Net Cash Flow 359,583 91,179 20,462 -9,811 38,227Cash Balance Beginning of Year 0 359,583 450,762 471,224 461,413Cash Balance End of Year 359,583 450,762 471,224 461,413 499,640


Business Plan EcoShop Renovations Schedule 1: Economic Variables

2011 2012 2013 2014 2015Debt Interest Rate 10% 10% 10% 10% 10%Inflation 2% 2% 2% 2% 2%

Schedule 2: Revenues

2011 2012 2013 2014 2015Number of Customers/Day 110 116 121 127 134Growth Rate of Customers 5% 5% 5% 5% 5%Number of Days/Year 350 350 350 350 350Average Purchase Value 120 122 125 127 130Total Sales 4,620,000 4,948,020 5,299,329 5,675,582 6,078,548

Revenue Mix Appliances 0.2 0.2 0.2 0.2 0.2 Electrical & Lighting 0.2 0.2 0.2 0.2 0.2 Flooring 0.15 0.15 0.15 0.15 0.15 Installations 0.2 0.2 0.2 0.2 0.2 Paint 0.1 0.1 0.1 0.1 0.1 Plumbing 0.1 0.1 0.1 0.1 0.1 Seasonal & Small Items 0.05 0.05 0.05 0.05 0.05

Revenues Appliances 924,000 989,604 1,059,866 1,135,116 1,215,710 Electrical & Lighting 924,000 989,604 1,059,866 1,135,116 1,215,710 Flooring 693,000 742,203 794,899 851,337 911,782 Installations 924,000 989,604 1,059,866 1,135,116 1,215,710 Paint 462,000 494,802 529,933 567,558 607,855 Plumbing 462,000 494,802 529,933 567,558 607,855 Seasonal & Small Items 231,000 247,401 264,966 283,779 303,927Total Revenues 4,620,000 4,948,020 5,299,329 5,675,582 6,078,548


Business Plan EcoShop Renovations Schedule 3: Cost of Goods Sold

2011 2012 2013 2014 2015Gross Profit Margin Appliances 0.1 0.1 0.1 0.1 0.1 Electrical & Lighting 0.2 0.2 0.2 0.2 0.2 Flooring 0.2 0.2 0.2 0.2 0.2 Paint 0.2 0.2 0.2 0.2 0.2 Plumbing 0.2 0.2 0.2 0.2 0.2 Seasonal & Small Items 0.2 0.2 0.2 0.2 0.2

Cost of Goods Sold Appliances 831,600 890,644 953,879 1,021,605 1,094,139 Electrical & Lighting 739,200 791,683 847,893 908,093 972,568 Flooring 554,400 593,762 635,920 681,070 729,426 Paint 369,600 395,842 423,946 454,047 486,284 Plumbing 369,600 395,842 423,946 454,047 486,284 Seasonal & Small Items 184,800 197,921 211,973 227,023 243,142Total Cost of Goods Sold 3,049,200 3,265,693 3,497,557 3,745,884 4,011,842

Schedule 4: Operating Expenses

2011 2012 2013 2014 2015Accounting & Legal 20,000 20,400 20,808 21,224 21,649Advertising 23,500 23,970 24,449 24,938 25,437Cash Short 4,620 4,948 5,299 5,676 6,079Wages 646,800 692,723 741,906 794,581 850,997Employee Benefits 97,926 104,878 112,325 120,300 128,841Insurance 25,000 25,500 26,010 26,530 27,061Debt Interest 179,920 168,631 156,213 142,553 127,527Capital Cost Allowance 81,026 157,142 151,835 146,731 138,073Property Taxes 10,000 10,200 10,404 10,612 10,824Repair & Maintenance 46,200 49,480 52,993 56,756 60,785Tools & Equipment 2,500 2,550 2,601 2,653 2,706Uniforms 1,000 1,020 1,040 1,061 1,082Utilities 30,000 30,600 31,212 31,836 32,473Other Variable Costs 69,300 74,220 79,490 85,134 91,178Total Operating Expenses 1,237,792 1,366,263 1,416,586 1,470,586 1,524,712

Schedule 5: Capital Budget

2011 2012 2013 2014 2015Land 52,083



Buildings 3,451,323 Furniture & Fixtures 45,000 10,000 10,000 10,000 10,000Vehicles 50,000 25,000 Total 3,598,406 10,000 35,000 10,000 10,000

Schedule 6: Financing Budget

2011 2012 2013 2014 2015Bank Debt (50%) 1,799,203Equity (50%) 1,799,203 Total 3,598,406 0 0 0 0

Schedule 7: Debt Amortization

2011 2012 2013 2014 2015Beginning Balance 0 1,686,311 1,562,130 1,425,531 1,275,273Addition 1,799,203 0 0 0 0Payment 292,812 292,812 292,812 292,812 292,812Interest 179,920 168,631 156,213 142,553 127,527Principal Reduction 112,892 124,181 136,599 150,259 165,285End Balance 1,686,311 1,562,130 1,425,531 1,275,273 1,109,988



BibliographyCanadian Mortgage and Housing Corporation. (2010). Renovation and Home Purchase Detailed Tables.

Good Earth Lighting. (2010). Brighter Idea. Retrieved November 27, 2010, from Good Earth Lighting: http://www.goodearthlighting.com/brighteridea.aspx

Philips. (2010). Green and Lighting. Retrieved November 27, 2010, from Philips: http://www.lighting.philips.ca/en/lightcommunity/trends/green/green_and_lighting.wpd

Statistics Canada. (2006). Saskatoon Community Profile. Retrieved November 27, 2010, from Statistics Canada: http://www12.statcan.gc.ca/census-recensement/2006/dp-pd/prof/92-591/details/page.cfm?Lang=E&Geo1=CMA&Code1=725__&Geo2=PR&Code2=47&Data=Count&SearchText=Saskatoon&SearchType=Begins&SearchPR=01&B1=All&GeoLevel=&GeoCode=725

Teragren. (2010). Environmentally Smart & Friendly Flooring. Retrieved November 26, 2010, from Teragren Bamboo Products: http://www.teragren.com/environmental.html

YOLO Colorhouse. (2010). Paint FAQs. Retrieved November 27, 2010, from YOLO Colorhouse: http://www.yolocolorhouse.com/learn-home/frequently-asked-questions/


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