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Greater Plainfield Habitat for Humanity

ReStore Business Plan

Retail Location

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Table of Contents

Executive Summary ................................................................................................................. 3

Background ................................................................................................................................. 4

Objectives for starting a ReStore ........................................................................................ 5

Business Concept ...................................................................................................................... 5

Real Estate ................................................................................................................................... 6

SWOT ANALYSIS ........................................................................................................................ 7

Donations .................................................................................................................................... 8

Marketing Plan ....................................................................................................................... 10

Paid Staff ................................................................................................................................... 12

Unpaid Staff.............................................................................................................................. 13

Financial Planning ................................................................................................................. 15

Operations ................................................................................................................................ 17

Merchandise ............................................................................................................................ 18

Pricing ........................................................................................................................................ 18

The ReStore Brand ................................................................................................................ 19

The ReStore Customer ......................................................................................................... 19

Secondary Services ............................................................................................................... 19

Operations Manual ................................................................................................................ 19

Conclusion ................................................................................................................................ 21

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Executive Summary Greater Plainfield Habitat for Humanity would like to open a ReStore because of the potential to thrive in the environment we are in. We are located in an area equivalent to the size of Charlotte, North Carolina, an area that services four ReStores. We believe we can reach our goal of earning enough profit through this ReStore to build at least one house ($100,000) a year.

We plan on using a retail location for the store. Using our formula, we project 16,750 square feet to be an optimal size. However, due to costs for space, we will likely have to find a space small than this square footage. The location will be in a prime location with heavy foot traffic among a major roadway with at least another close by. We will be located in a donor heavy area, something of great importance as these are our suppliers. In the location we have chosen, % of the homes are donor households, households that make over $ , a year. In both locations there is a great potential to form partnerships with other companies such as Lowe’s, Habitat for Humanity’s national partner, and Ashley’s furniture. This will help provide us with a constant source of inventory and will help our store thrive. The ReStore does not have any true competitors in either area. Our closest competitor is Good Will on Route 22, however they do not accept most of the items our store will carry, and we will not accept clothes, which is their major product. We hope to use this to our advantage and form a partnership with them. We intend to market heavily in the first year of opening to establish a customer base. We have allocated 3.5% of revenue for this, which is on the lower end of the recommended 3-5%. Being in a retail area with a high volume of foot traffic, we can afford to have a marketing budget that is on the lower end of the spectrum. Our projected revenues in year one are $581,597 and grow to $837,500 by year three. We estimate total expenses for year one to be $551,793 and grow to $668,117 in year three. To abide by New Jersey tax code, as an operating not for profit thrift store, 75% of the work done to operate must be done by volunteers. To maintain this figure, we will have at least 12 regular volunteers to assist of four regular employees.

The ReStore will be open for business Wednesday though Saturday, and will use Tuesday as a day to pick up donations. We anticipate furniture being our best seller,

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but will plan to accept building materials, appliances, cabinets, lighting, and home décor.

Background

Greater Plainfield Habitat for Humanity (GPHFH) was founded in 1989. It is a private, non-profit organization covered under section 501 (C)3 of the Internal Revenue Service Tax Code. Although GPHFH is an independent organization, it is an affiliate of Habitat for Humanity International (HFHI). Linda and Millard Fuller founded HFHI in 1976. Through its affiliate structure, HFHI is responsible for having built over 800,000 homes worldwide. The mission of GPHFH is: Seeking to put God’s love into action; GPHFH brings people together to build homes, communities, and hope. This is achieved by establishing a partnership between the family acquiring the home and GPHFH. The Partner Family is an integral part of the process. Family members are required to volunteer hours of sweat equity towards their building process in order to remind the families that GPHFH provides a hand up not a hand out. GPHFH is a low cost provider of affordable housing. . Volunteer labor and donated materials help keep costs at a minimum. In addition to providing homeownership for those who would not qualify for a traditional mortgage, the Habitat Building program helps to promote volunteerism, build relationships, and strengthen the community as a whole. GPHFH has three full time employees and two part time employees. It is governed by a nine-member Board of Trustees and has organized its functions into teams. These are headed by either regular employees or volunteers and are fully staffed by volunteers. In addition, GPHFH draws on hundreds of volunteers from corporations, churches, and community organizations in addition to recruiting individual volunteers to staff its building projects, development activities, and administrative tasks. GPHFH has built 35 homes since 1989 and have seven under construction during 2014-2015. Fiscal year (June 30th) revenues were approximately $298,000. GPHFH has assets worth $1,843,467. It is estimated that about 77% of revenues are derived from donations and grants from local businesses and private foundations. In addition,

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GPHFH receives monthly mortgage payments from those whom it has sold Habitat houses. GPHFH has developed and continues to develop a variety of marketing and fundraising programs targeting specific social segments including individuals, houses of worship, businesses, civic organizations and schools. These programs not only encourage contributions but also encourage personal involvement through volunteerism. While researching ways that other Habitat affiliates have increased revenues, GPHFH has learned that operating a ReStore facility can dramatically increase affiliate revenue. More than 800 Habitat for Humanity affiliates across the United States and Canada have established Restores. These are warehouse style facilities that sell donated quality used and surplus building materials, home goods and other items at prices substantially below retail prices. It is important to note, GPHFH serves an area equivalent to the size of Charlotte, North Carolina, an area that supports four ReStores.

Objectives for starting a ReStore

The benefits of a Restore operation include the following. The ReStore will:

Provide a significant source of income to support the GPHFH building program and to defray affiliate administrative costs.

Create jobs.

Offer sweat equity opportunities for partner family members under the age of sixteen. (State law prohibits anyone under the age of sixteen to work on a construction site).

Offer volunteer opportunities for those that cannot or do not prefer to work at a construction site due to age, physical limitations or interest.

Provide steeply discounted prices for home improvement materials to the general public.

Be a source of publicity for GPHFH’s goal to eliminate substandard and overcrowded housing.

Business Concept The mission of the ReStore is to operate a retail facility that sells donated, useable building materials and fixtures, home improvement items, home goods, tools, appliances, and other items at modest cost and to raise money to enable GPHFH to continue its moderate income building projects.

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This business concept is not new. It is a well documented, proven concept that has significant upside potential for GPHFH. There are approximately 800 ReStore outlets across the United States and Canada. It is common for such ReStores to experience positive cash flow within one to two years. Most ReStores do not use point-of-sale inventory tracking systems but are managed as a "garage sale" operation. This model will be used for the GPHFH ReStore. Customers will be presented with a variety of building materials needed for home improvement at low prices. The price results from the fact that ReStore exclusively sells high quality second hand and excess material donated by building supply companies, contractors, and individuals. Material will be sold on an as-is basis, but the ReStore can assure a solid level of quality because items that are taken in will be checked by trained and experienced staff. Purchases will be made on a cash and carry basis. Credit cards, checks, and cash will be accepted. Using low cost advertising, the ReStore will let people in Greater Plainfield know that it accepts donations while also informing them that the store has an ever-changing stock of materials available. While commercial donors may deliver donations, it is our understanding based on researching other ReStores that most will donate items if they are picked up by the ReStore. The experience of the Lexington, KY, Renovation Station is that 95% of the donated materials are picked up. By selling donated goods, the ReStore will not impact GPHFH's 50l(C)(3) status. As a result it will not be required to pay federal income tax under the Business Income Tax (UBIT) section of the Internal Revenue Service Tax Code. To insure that the ReStore avoids UBIT, GPHFH aims to have 100% of its inventory. Additionally, to avoid sales tax, New Jersey tax code states 75% of our inventory must be donated, and at least 75% of the work to operate the store must be performed by volunteers.

Real Estate

A large space at a reasonable cost is needed, one that can serve as both a retail facility and a warehouse for storage. In most communities, there are restrictions on retail operations in warehouse buildings therefore limiting options that are available. The alternative is to use a retail space, however our studies show us that this is a significantly more expensive option. Through our research we suggest having a retail location of roughly 16,750 square feet. This suggestion is based off the following formula. Gross Sales/Square feet = Projected sales per square foot in year three

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Which is 837,500/ x = $50 X= 16,750 When looking at this size we must take into account the occupancy cost this will create and also diminishing returns. At a certain point, our sales per square foot will decrease, and we do not want to break that threshold. That being said, it is acceptable to downsize a few thousand square feet. The geographic location of the building is the major consideration. The ReStore must be in a densely populated area we expect it to have access to major roadways. Finally, because the average donor will only drive ten minutes to make a donation, a considerably shorter amount of time than the average buyer is willing to drive, we aim to be located in a donor heavy area. After performing a market analysis in the Greater Plainfield area, we have chosen Springfield, New Jersey offers the best balance of potential donors and buyers coupled with a high volume of foot traffic.

With a median household income of $78,756, 83,759 households, or 62% of the households in this area are above our projected $50,000 household income we require to be considered a donor household in this area. This area also receives a very high volume of traffic, as it will be located on Route 22 and within driving distance of Route 78 and Route 124, both of which receive well over 150,000 daily traffic users.

SWOT ANALYSIS Strengths

Located in an area equivalent to the size of Charlotte, North Carolina, an area that has four successful ReStores.

As a thrift shop we will not have to pay sales tax, inventory, and 75% of our employees are volunteers.

Springfield is located in a donor heavy area.

Foot traffic is heavy in both areas.

Close to no competition.

A retail location will be in an area with more foot traffic than a warehouse area and may create faster inventory turnover.

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Weaknesses

Retail location may not provide enough space for storage, which will result in spending more money for storage space.

Cost of retail is roughly $150,000 more than cost of warehouse, which is 58% occupancy cost.

Opportunity

As previously mentioned, we are located in an area equivalent to the size of Charlotte, North Carolina, an area that has four successful ReStores.

There is a tremendous potential for partnerships with Lowe’s, which is already a national partner, Ashley’s Furniture, and other stores. Threats

High cost of rent eats into potential profits.

Donations

We intend to start collecting donations 4-6 months prior to opening until we have at least two rotations of product to be put on display. This will continue until we are out of storage space. Using a formula of $100,000 (amount needed to build one house) multiplied by 3.33 which creates the 30% profit margin, divided by the number of days open (250) plus an added 10 percent to account for donations that do not sell, we project to need to collect $1,466 in donations per day. In an effort to get the word out, we would like to run a small advertisement in the newsletters of all the local houses of worship. This will provide us with easy access to our target market families with incomes over $50,000. In Fanwood, Mountainside, Scotch Plains, Springfield, Summit, and Westfield there are a total of 51 houses of worship we can contact. The advertisement will give information on the store, what donations we accept, and include our need for volunteers. We can run a similar advertisement in the local public and private schools newsletters or ask them to hand out flyers. Although the kids are not our target market, their parents are the mostly likely people to read the newsletters and handouts. In those same towns, there are 36 public schools and ten private schools. These two forms of advertisement will be limited to our printing costs and will not require any major portion of our marketing budget.

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Potential Partners: A major partner for the Coastal Habitat for Humanity ReStore in Asbury Park, New Jersey is Ashley’s furniture. Their owner, Will Schafer, has gone on the record saying he would like to partner with other ReStore’s in the area. The table below shows the location and distance of Ashley’s Furniture store depending on location:

Springfield

Linden, NJ - 7 miles

Fairfield, NJ - 12 miles

Green Brook, NJ - 12 miles

Secaucus, NJ - 15 miles

Another national partner of Habitat for Humanity ReStore’s is Lowe’s. From Springfield, there are two Lowe’s within miles located in Union and Staten. We don’t usually know what Lowe’s will donate, but various items can be expected. The next group of stores we would look to partner with are lighting, vacuum, and smaller more specific shops. We would ask that when a customer wishes to purchase a new product, they ask them if they still have an older working version of the product and if so recommend they contact us. We must remember though, even though our location can support four ReStores, we will have limited storage space and although a surplus of donations is a great problem to have, we will have nowhere to put the items, so we must be careful about the intensity in which we solicit donations. Donations can be made through calls and scheduling a pick up or be dropped off. In either case, we would like the donor to fill out a form containing their information and information that can be seen on Appendix A. We will create a database with this information that we can use to solicit future donations from. To pick up donated items, we will use one of a projected two trucks. These trucks will pick up donations five days a week: the Wednesday-Saturday we are projected to open, and the Tuesday we are closed as well. These trucks will be driven by a team of one part time employee and a volunteer. The employee and volunteer responsible for picking up donations will always be equipped with tools, gloves, rain gear, and a company cell phone.

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At the store, there will be a team of at least two more volunteers waiting to help unload donations as well as handling any drop off donations. Donations will then be categorized by item, priced appropriately and stored away until they are needed. Competitor Research: Our closest competitor is Goodwill, which is located in Springfield on Route 22. However they do not accept large furniture such as couches or love seats or large appliances such as refrigerators. They do accept clothing and bedding- items we do not plan to accept. We would like to use this to our advantage and form a partnership with them in which we can refer donors to each other those products in which one store takes and the other doesn’t. Another competitor is the thrift shop Unique. Their main sales, however, is clothes. They also do carry paintings and kitchenware, two items we may choose to carry. However, we don’t anticipate either of those items being a primary source of sales, so this is not a cause for concern.

Marketing Plan Pre-Opening Plan:

To ensure that our ReStore has a successful start, we would like to budget 3.5%, which is equivalent to $20,356, of revenues for marketing. This is between the recommended 3-5%. As time goes on and the ReStore becomes popular in the area, the plan is to reduce the budget as needed. From information we have gathered about other stores, we expect to be able to cut our marketing budget in half after the first year. Our first goal is updating our website. We intend to spend around $6,400, which equates to 80 hours or work by a designer for around $80 an hour, a fairly even rate for this type of work. We must update our website so that one of the first things you see is information about the ReStore. There must also be a separate tab giving information about the ReStore. These tabs should be easy to navigate and quick to read as attention span on the Internet is about six seconds per page. While this is happening, we will create a Facebook page specifically for the ReStore and run promotions through the ReStore. These will be item specific as well as general discounts. We will link this to a Twitter Handle so that any update that is made one Facebook can simultaneously be made on Twitter with one click.

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We have also been advised by the Costal ReStore in Asbury Park, NJ to advertise rare antique items on Craigslist to help foster quicker turnover. To improve online search efficiency, we will register our ReStore on Google My Business. With this, when a person googles, Springfield New Jersey ReStore, our store days, hours, location, and phone number automatically pop up on the top of Google and are linked to Google Maps to provide quick and easy directions. Our next major cost will be for the customization of lawn signs to place throughout Greater Plainfield. At around $8.00 a sign, we safely budget $1,600 for this, with room to double this if needed. These signs will create lasting exposure and begin developing word of mouth advertising. Next we will compile an e-mail to our database of 2,000 potential customers. We will then reach out to Greater Elizabeth Habitat for Humanity and work with them to gain access to all their previous applicants e-mails. The reason for this is that they are located in Garwood, NJ, and serve an area within reasonable driving distance to our potential ReStore. Once we compile this database, we will e-mail blast our advertisement, which contains information on the grand opening of the ReStore. Simultaneously we will contact all houses of worship within our target area and ask that they include our grand opening advertisement in as many newsletters as possible leading up to the grand opening. Additionally, we will ask if they can hang a small poster in their building. The same will be done for all schools in the area. We will also ask the schools if they can forward our grand opening advertisement to their entire e-mail database, most of which we anticipate to be parents. We will reach out to public areas that receive high foot traffic such as libraries, recreational centers, etc. and ask to hang a poster and leave flyers out. We have been advised by a ReStore employee in Escondido, California to contact the Chamber of Commerce. They may help us promote the ReStore as well as set up a ribbon cutting ceremony. Additionally, this will give us the opportunity to network with businesses in the community develop partnerships. Other benefits included discounts across different mediums of advertising. Costs for this range from $200-$300 a year, depending on the number of employees. Once we have a location for the store we will know the exact cost of this expense. As part of our public relations campaign, we will contact local newspapers such as Union News Daily, Scotch Plains Patch, and The Star Ledger and see if they are interested in running a story about our grand opening. One month before the store opens for business, we will open the store to the community for people to come and view the store and its inventory. This will help

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build anticipation to the grand opening and also spread the news so we are benefiting from word of mouth marketing before we officially open. Post-Opening Plan:

Once open, many of the aspects of the marketing plan will remain the same. The biggest change will be that most advertising will now travel through word of mouth. Based on what we have heard from other ReStores, this will be our biggest source of advertisement. The Facebook page and Twitter handle will continue to be updated as needed. We will still e-mail blast our database advertisements between once every two weeks and once a month as needed. We hope to continue to be given a small space in religiously affiliated newsletters in areas that contain many of our customers. We will use our budget to run an advertisement in select newspapers that will be determined based on readership in our consumer areas as well as price for an advertisement. This will occur once or twice a month for 2-6 months until it is determined that we have enough regular foot traffic. A new strategy we can implement is the use of mass text messaging through the service Club Lemeno. With a 97% read rate, and a cost of $39 month for 600 messages, we believe this will be an affective way of advertising specific items a few times a month, for the initial months after opening. If this proves to be ineffective, which we will measure through a retention rate of customers who sign up for the text and then decide to leave, we will remove this method of advertising.

Paid Staff

We suggest having at least three full time employees (FTE) on opening day. They are at the following positions (note that the two truck drives are part time employees):

Position Number Needed Average Pay by ReStore for Position in Major Metro Area ($)

Pay Range for job by ReStore in Major Metro Area ($)

Manager 1 58,500 46,800-70,200

Assistant Manager 1 43,500 34,500-52,200

Truck Driver 2 13.70/HR 10.96-16.44/HR

*All salaries were taken from the 2013 US Affiliate Salary & Benefits. The most essential position, the Manager who will be hired by our Executive Director, has the most power and responsibility, including but not limited to: hiring

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employees, acquiring merchandise and partnerships, soliciting donations, accounting for the books and finances. The second position hired by the Manager and Executive Director is the Assistant Manager. While the manager has final say over everything, the assistant will take control of day-to-day operations including scheduling, overseeing inventory, recruiting volunteers, training, human resources, opening and closing the store, and servicing customers whenever wanted and possible. The next essential hire suggested is two part time drivers. Their responsibilities are relatively straightforward, picking up donations, and delivering donations back to the ReStore, and helping to unload the truck although ideally this latter part should be done mostly if not solely by volunteers. The suggested timeline for the hires is as follows: the Manager should be employed nine months before opening, at which time his or her main focus should be acquiring partnerships from as many relevant stores as possible, fulfilling necessary steps to upgrade the location, as well as finding a qualified and suitable candidate to hire by the 7th month as Assistant Manager. When hired, their main objectives are marketing and donation solicitation from locals. The Manager should then hire at least one driver at least six months before the projected opening. When donations become more constant and a driver is more readily needed, a second part time driver may be hired. In our budget projections, we have three months pay projected for the second driver, if needed.

Unpaid Staff As previously mentioned in the business concept section, at least 75% of the work to operate the store must be performed by volunteers. This means for year one, we must have at least 12 total volunteers. While the ReStore is open for business (Wednesday-Saturday), we would like to have 7 working volunteers at all points in time. They will be in the following positions:

Position Number of Volunteers Needed at a Given Time

Donation Pick-Up 1

Processor 1

Cashier 2

Floor Workers 3

Technology Repair Man 1

Woodwork Repair Man 1

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The responsibilities of these positions are as follows: Donation Pick-Up: This volunteer will ride along, but will not drive, with our paid truck driver when going to pick up donations. They will assist the driver in handling donations and bringing them back to the ReStore. Once at the ReStore, they will help the driver and the processor unload the items. When the processor is done with their job stated below, they will help move the item into storage. Processor: The processor will help unload items from the donation truck when they come. When finished, they will review the items, appraise them, and write a small description of the item on the price tag to help avoid price tag switching by customers. They will then find storage space for these items. They will review with the store manager the items coming in and where they are placed in storage and help replenish the items on the floor when needed. Cashier: Make the final sale of the product and accepting their money in the form of cash credit or check. They will be responsible for checking the description of the item, and making sure it matches the item in an effort to prevent price tag switching. At no point in time are they allowed to negotiate the price. The sticker price is the final price. Floor Workers: Floor Workers will help the customers as needed. They will assist in sales, answer any questions, and restock the floor. They may not negotiate any prices. Technology and Woodwork Repair Man: Inevitably, people will drop off items that need repair or are beyond repair. At least once a week, we would like to bring in two separate people, one for technology and one for woodwork, and have them review the week’s donations. They will asses the state of the item and decide if the item is repairable or worth repairing, or if it should be scrapped. If it can be fixed, it will be their job to fix it. Once fixed, they can help the processor appraise the item. On a daily basis, there will be two shifts of employees: a 9:45am-2:30pm shift, and a 2:00pm-6:00pm shift. The half hour overlap in time is set up so that if a second shift employee is late, we will not be understaffed. Once the second shift employee comes in, the first shift employee may leave. This pertains to cashiers, processors, and floor workers. When the donation pick-ups are done for the day, the volunteer assisting the driver may leave if the store manager does not need assistance with anything else. The processor may also leave at 5:00pm and any donations accepted after will be review the next morning. During the six to eight months prior to opening the store, the store Manager and Assistant manager will be in charge of the recruitment of volunteers. Once they are able to obtain volunteers, it will be up to the Assistant Manager to set a schedule for them. When a volunteer reports for work, they will sign in to our volunteer book, and when they leave they will sign out. When they sign out, we would like the

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Manager or Assistant Manager to initial their hours. The following day, we would like this information transferred into an excel spreadsheet in order to organize this information. Through our research, we have discovered that recruiting through religious communities has been largely successful. We plan to do this in the Greater Plainfield area, as well as the area around the ReStore, areas that have an abundance of religious communities. If we cannot obtain the number of volunteers needed this way, we will contact local high schools that have a Habitat for Humanity club and recruit volunteers this way. They will likely be able to volunteer during the 3:00pm-6:00pm time slot and the Assistant Manager can adjust the schedule as needed. We believe this should provide enough volunteers to staff our store. However, if it does not, we will recruit throughout the local community, leaving flyers at local libraries, schools, etc. Once we have scheduled all the volunteers, we plan to have a volunteer orientation in which volunteers can meet each other and be trained at their respective positions. To show appreciation for our volunteers, we would like to hold a small holiday party at the store where we can bring in food, beverages, and buy little gifts for our volunteers using a small portion of our profit. If we have enough profit after a few years to do this twice a year, we would like to do this.

Financial Planning Revenue Budget

A detailed Revenue Budget for year one can be found on Appendix C detailed on a month to month basis. The total first year revenue projections comes from a market analysis done for the local area by the National ReStore team. The national team projects three potential gross sales values for the end of the 3rd year: a conservative, moderate, and aggressive estimation. Due to the nature of a retail location and just to air on the side of caution, a “conservative plus” estimation is used for our projections. However, in surveying the area, and talking to other ReStores, we think that a ReStore located in Springfield can perform beyond the “conservative plus” benchmark. Using a 20% growth rate, the first year gross sales is found by working backwards from the given 3rd year amount. The projected revenue for the first year, which also includes $150 of monthly other sources of income, is $581,597. The sales pattern from month from month is taken from the original growth rates and declines the National Store template uses.

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Annual Budget

Full projections and estimations of the first year’s annual budget can be found in Appendix D. Personnel and costs will account for most of the annual costs. Barring an incredible donation of floor space, these costs are obviously unavoidable. However, these costs are stable and can be accurately predicted from year to year. These costs are estimated to be about $488,000 total, about 83% of the projected first year revenue. I cannot stress how important it is that the manager needs to do their due diligence in both the lease and employee negotiations to lower these costs. Financially this is one of the biggest factors in future success. But as implied earlier, after negotiations are done, they should not be a primary concern. The variable-like costs are what the Manager and Assistant Manager need to be consciously aware of every day. Watching these costs are key. The highest costs to be watchful of are the truck related. In the projections it is estimated that $1,200 will be spent on gasoline, depending on how many miles per the gallon, idle time, and gasoline prices, this cost will vary. Also, be wary of initially buying trucks at low costs as it may end up costing more in maintenance. Even if the maintenance cost is lower than a premium on a new truck, maintenance cost is still unpredictable in nature. When buying a new truck, you’re paying a premium to be able to plan out costs, for less everyday disruptions, and far less stress on every workers behalf. We have allocated about $50,000 to other operational costs that might incur throughout the year. This is where the frugality can help the business stay afloat.. However the exception to this is marketing. Do not skimp on marketing, in fact in the opening years the ReStore needs to be consciously aggressive in getting the name out to the community, especially because the warehouse will most likely be in a less-visible location. Do not be afraid to over spend on quality advertisement, special events, and anything that will bring in new customers, again be creative.

Three Year Projection

As said before the projected growth rate for sales from year-to-year is 20%. The margin should increase from year-to-year as well because many of the costs don’t rise as result of a growing business. An obvious one being rent and occupancy costs. In Appendix E, the white cells denote costs which are not likely to rise along with a rise is sales in business. The purple cells, indicate the opposite, costs which have been seen, by the National ReStore, to grow as sales grow. We project these costs to grow at the same rate as sales, 20%. The exception being personnel costs, we gave this a 30% bump for the second and third year, just to give reasonable amounts to hire someone. Additional hires can really affect the bottom line; take great consideration in hiring additional employees. Hire only if there’s a need and most importantly if their addition will bring additional sales amounting to their salary, otherwise do not hire.

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Capital Expenses

These expenses can be depreciated and are assets that will provide benefits for future years. In Appendix E, some common building uplifts needed are as detailed. However, true uplift costs cannot be determined until a location is set and can be properly evaluated. For now, we have allocated a total of $18,000 for building uplifts. Other capital expenses are various vehicles that may be needed for operation. For these expenses we have allocated $32,000. Total we have allocated $50,000 for capital expenses.

Pre-Opening expenses

There are plenty of expenses that must be incurred before the ReStore’s opening day. The biggest one is the personal expenses, which is calculated using the timeline detailed in the Paid Staff section. Procurement of all inventory will immediately cause a need for a tuck and gasoline. And of course extensive marketing must be done, including hiring a web designer, to insure a successful opening day. Other costs are detailed in Appendix F. The total cost allocated for pre-opening expense is $128,279.

The Breakeven Point

Our projected breakeven point is in the sixth month of the third year of operation. It is important to note that we have over allocated money for many expenses, especially pre-opening expenses, and if money is managed wisely, this date will be able to come sooner.

Operations The hours of operation we anticipate opening are as follows:

Day Hours Purpose

Tuesday 10:00am-6:00pm Donation Pick Up (DPU)

Wednesday 10:00am-6:00pm Sales, DPU

Thursday 10:00am-6:00pm Sales, DPU

Friday 10:00am-6:00pm Sales, DPU

Saturday 10:00am-6:00pm Sales, DPU

On sales days, we expect the manager and the assistant manager to report to work around 9:00am and leave when closed. Although the floor should be consistently restocked with inventory, the story should close every day with the floor stocked ready for the following day.

Merchandise

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The merchandise we aim to sell is:

Building Materials o Home Repair Items

Furniture o Couches, Tables, Desks,

Appliances o Washers, Dryers, Fridges

Cabinets

Lighting o Chandeliers

Home Décor o Paintings/Artwork

Furniture is consistently the best selling product across many ReStores so we plan to give the majority of the space to items such as tables and couches. We anticipate most if not all lighting products to be chandeliers donated by companies we will develop partnerships with. We would like to hang these products from at least one beam we plan to install in the wall, which will conserve floor space. The same will go for paintings, which will be the only home décor item we will accept. These can be hung on walls, which will also conserve floor space.

Pricing

For pricing of merchandise, the Restore rule of thumb for pricing is simple: sell the merchandise as fast as you can while getting as much money for it as you can in your market. There are many variables that will be taken into consideration when pricing merchandise. Some of those variables are: current supply, size of the store, how much national retailers are selling similar items for, and income of shoppers. A lot of ReStore pricing in the first few months is established through trial and error. The measurement as to the accuracy of pricing will be how long merchandise stays in the store. If the merchandise sells as soon as it arrives on the sales floor, we may raise the price. If it stays on the sales floor for more than a few weeks it may have been priced too high or no longer holds value. A price can always be dropped, but usually cannot be raised, so it is best to start higher and drop the price as the market demands. Negotiating prices is a common practice in other resale stores but it is the collective opinion of most ReStores that negotiating prices is a waste of the manager’s and staffs’ time. If the proper research was done during the pricing process, the staff and volunteers should feel confident that the price on the item is fair market value.

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Markdowns will be done on when needed to ensure that merchandise is turning and the square footage that it takes up is being fully used.

The ReStore Brand

By operating a retail store as part of the Habitat for Humanity International organization, affiliates are required to use the registered trademark ReStore brand name. The ReStore brand is not limited to the identifier and colors but also includes a shopping experience that is safe and enjoyable to customers. Using the ReStore brand allows ReStores to be part of collective advertising, increase their recognition in the market and using existing marketing materials that other affiliates have found effective.

The ReStore Customer There are three different customers to ReStores: donors, shoppers and volunteers. Each has their own needs and desires that must be thought about. For the donor, a ReStore is a place that will help them solve their problem. Convenience and ease of use are the most important things to donors. Our shoppers are typically of medium to low income and are searching for quality merchandise at reduced prices. Volunteers are also a ReStore customer. Learning the motivations of volunteers and matching them with jobs that match those needs is essential to the volunteer customer satisfaction.

Secondary Services Secondary Services are not recommended for ReStore startups. In most cases they are distractions from the basic operations that are essential to running a successful ReStore. However, we plan on offering once secondary service offered which is online sales. Online sales will only be used under special circumstances in which an item is a rare antique and will likely have trouble selling in the store. The recommended idea is to advertise through Craigslist. We will not sell on eBay or websites similar to eBay as you are bound the moment you auction the item and therefore cannot be sold in store at the same time.

Operations Manual In addition to the above outlined operations, our store will also develop an Operations Manual as a reference document for all staff and volunteers. The Operations Manual will be created by the Store Manager and Executive Director. In

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conjunction with Habitat for Humanity International’s best practices and guidance documents. The Operations Manual will include the following:

Operations o Staff o Store hours o Security o Insurance

Merchandise o Merchandise o Hold Items o Sold Items o Item Delivery o Staff & Volunteer Purchases o Returns & Refunds

Donations o Acceptance o Donation Pick-up o Acknowledgement of Donors o Monetary donations

Pricing o Pricing Resources o Stickers & Signage o Negotiating o Mark-downs

Cash Handling Procedures o Register Operations o Bank Deposits o Check and Balances

Volunteers o Requirements o Code of Conduct o Attendance o Dress Code o Recognition o Specific Volunteer Duties o Court Ordered CS

Customer Service

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o Customer Service Culture o Customer Service Guidelines

Collaborations and Partnerships o Other Local Organizations o Other ReStores o Non-sellable materials.

Safety o General o Trainings and Equipment o Best Practices o MSDS Sheets

Emergency Procedures o Emergency Action Plan o Administrative Duties o Types of Emergency o Evacuation Procedures o Non-evacuation Procedures

Other Policies

Conclusion We see a great opportunity for the ReStore to help make a difference in the Greater Plainfield community. Covering such a large area with both a wealthy donor population and immense customer base we are given the tools to succeed. Additionally, the combination of minimal competition and supplier partnerships will help the ReStore thrive. One of our worries about being in a retail location is high occupancy cost. Our first year projection has a 58% occupancy cost which shrinks to 40% by year three. Although it this is trending downwards, it is still remarkably higher than the idea 14-20%. After we reach our break even point in 30 the ReStore will be able to contribute regularly to the funding of houses for years to come.