Alex and Jay want to start a hardware store in Hamilton, but not just any hardware store, it would be an experience, complete with subject experts who can teach anyone handy skills to be their own handyperson and answer any questions.
They know they are competing with the likes of large hardware stores like Bunnings and Mitre 10.
They need to understand the market they are in to see if the bank will lend them the money to start this business.
They go to Business Figures and enter 'hardware retailing' and Hamilton.
+ What about their potential market?
Enterprises in the hardware and building supplies retailing industry in New Zealand
The number of businesses has dropped since 2005 but stayed fairly stable for the last 4 years, will this continue?
Looking at births and deaths of the retail industry
the retail sale value is increasing:
Sales value for the hardware, building and garden supplies retailing industry in New Zealand
Positive outlook for sales which looks good for the potential bank!
They see that their industry accounts for almost 0.3% of the businesses in their region (Waikato), which is higher than other regions but not a high percentage over all - maybe Hamilton requires more hardware than other places?
Gross profit ratio for the hardware and building supplies retailing industry in New Zealand
This means that small businesses make more (gross) profit on the revenue they make
Learning about their customers, they can see that home ownership rates are higher outside of the city centre.
So maybe setting up a shop in this area would target people who want to learn how to fix and improve their living space cheaply than pay to hire someone to do it?
More people are earning under 70k than over in Hamilton (2013 census)- we need to think about affordabilty, and price point of items.
There are more and more people with children within a residence - maybe we could look at providing something for the younger members of the family as well to keep them entertained?
Unemployment is at 8% in some areas of Hamilton (though this number is from 2013)
We have a opportunity to contribute to the economy and improve employment in Hamilton!
We know the trend of earnings for our staff so that helps us factor into our financial planning
Alex and Jay now have a whole lot of context to show the bank that they understand a lot about the industry they are getting into, and the community around them.
Thanks Amy Hooper _ Product Manager at amazing figure.nz
_ for an awesome case study!
Now, head here for some useful Getting Started with Figures tips before you start putting figures into business practice