It's time to look into some key metrics!
We need to look at sales per sq ft, and sales per station. This will be crucial to determine how much of our floor space we will allocate to each service and product line. Also, calculating our sales per sq ft will help us to project sales in different sized locations.
His Man Friday is currently looking into a floor space with 2169sq ft, in Chinook Centre. With our projected annual sales of $898,000, we are looking at sales of $414/sq ft in our first year.
To calculate floor space utilization, we must use the amount dedicated to sales, and exclude the amount dedicated to storage. Since 969sq ft of this location is dedicated to unseen storage and backspace, we have 1200sq ft of usable customer-friendly space to play with.
To do this, we must calculate how much revenue will be created through each service/product offering. Doing this will allow you to accurately allocate specific amounts of floor space to specific offerings based on the amount of revenue they can bring in.
Cologne Bar - Revenue will come from sales of cologne. Note that cologne has the highest margin among all His Man Friday products, and it is crucial to create the experience of the store - tv's, stools and overall comfort and escape.
Cologne sales are projected to be responsible for 15% of annual sales ($134,700)
Shave Cave - Revenue will come from shaving services and hair cuts. Important to remember that these services, while only being responsible for a small portion of our sales, will be KEY in creating the experience that His Man Friday wants to give to it's customers.
The Shave Cave's services are projected to be responsible for 30% of annual sales ($269,400)
His Man Friday Products - Revenue will come from sales of His Man Friday's main product line: Mug Scrub Facial Cleanser, Buff Your Bod Body Wash, Maintain Your Mane Shampoo and Conditioner, Smooth Operator After Shave, TLC Face Hydrator, and Keep It Up Wax.
The main product line is projected to be responsible for 55% of annual sales ($493,900)
****Sales assumptions are based on those outlined in the Pro Forma****
With this information, His Man Friday has decided to dedicate floor space to respective offerings based on their projected revenue contributions:
1. Cologne Bar will have 12.5% of the floor space (150sq ft/15ftx10ft space in back left of store)
2. Shave Cave will have 25% of the floor space (300sq ft/20ftx15ft space in back right of store)
3. Product Shelves will have 45% of the floor space (600sq ft/displayed throughout the store)
4. The remaining 17.5% of the floor space (210sq ft) is left for walking space to ensure that our customers don't feel crowded.
Lets Launch!
6 comments:
Interesting to see the floor space breakdown but what is allocated to the 900 feet in the back?
Also where is your sales till to ring people through? I think that a quick visual mock-up might be use full here to really get the spacing down. Just some squares in MSPaint or powerpoint.
I think Chinook is a great location for your target market, the only downside with Chinook is the fact that they will require the entire first year lease up front in addition, they will take a percentage of all your sales. This was actually one of the things we discovered with our Utopia research. Downtown could potentially be a good option. I know personally I will travel pretty much anywhere in the city for a good cut that I like.
Just a couple of things to think about :)
*had a typo in the comment above, hence why I removed it and re-posted.
Good point about the space required for the checkout - I completely forgot to allocate space for that. Thanks Jordan!
In response to the visual that you recommended, there are a number of pictures further down the blog, labeled 'prototype progress' and 'one more quick snapshot'. Let us know what you think. Jared has created a wicked 3d model in Google Sketchup that we will be using for our prototype.
Oh Utopia.... such a love-hate venture. Chinook does have its flaws but we have decided to stick with it for the target market access, amount of traffic, and security. Maybe we will start a downtown location strategy once we have accumulated a loyal clientelle base that would be willing to drive downtown for our products and services. Thanks Matt!
Please see "Revised Floor Space...Again" for revised floor space plan
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