Proposed business plan for a hardware store

Abstract

In recent years, the growth of the construction sector has been undeniable, representing 10.57% of the Gross Domestic Product (GDP), thus becoming one of the main drivers of the economy. This constant growth offers a series of opportunities for companies related to this field, highlighting especially the trade of construction supplies as one of the most favored sectors. A Hardware Store is a company specialized in the sale of construction materials and supplies, aims to increase its market share through differentiation in its services, the optimization of its processes and the execution of a marketing plan that expands its reach to new customers. The business opportunity lies in the lack of structuring of some competitors, the ability to offer distinctive services, and the ability to remain competitive in terms of prices. The hardware store markets its products through two distribution channels: direct sales from its own establishment and through outside salespeople who serve wholesale customers and distributors in various cities in Ecuador. A business plan proposal is proposed that will require an initial investment of US $296,656.74, with 60% of the financing coming from equity and the remaining 40% from debt. In a scenario without considering debt, the Net Present Value of the project amounts to US $907,358.00, with an Internal Rate of Return of 67.6% applying a discount rate of 17.17%. The project duration is estimated at 5 years.