Meadowview$\_$Marketplace$\_$Renovation$\_...$

Case Overview

Approaching its $7$th anniversary, Meadowview Marketplace has become a key player in the local community, showcasing resilience and growth.

Under Liam Nguyen's leadership, this family$-$operated business is considering an ambitious renovation to enhance its market presence and customer experience. Liam seeks to understand the economic feasibility of this venture, crucial for securing the necessary funding. This analysis will explore the expected benefits and costs, complete with detailed projections and a break$-$even analysis.

Renovation Plan

Meadowview Marketplace has established itself by offering an extensive selection of high$-$quality groceries. Facing competition from larger retailers, Liam sees a critical need for a significant update to maintain and enhance the store's appeal. The renovation plans include a $3500$ square foot expansion to accommodate a wider array of products, especially focusing on local and organic options. Additionally, the project will upgrade the store layout for better flow and implement advanced refrigeration technology to improve product freshness.

Financial Implications

The renovation involves significant investment in both capital expenditures and ongoing operational costs. For Meadowview Marketplace, estimated capital costs include $$45,000$ for design and engineering, $$28,000$ for site preparation, $$130,000$ for construction, $$22,000$ for electrical and lighting, $$14,000$ for plumbing, $$11,000$ for interior lighting, $$25,000$ for flooring, $$15,000$ for display units, and $$35,000$ for new refrigeration systems.

Operational costs will see adjustments to accommodate the expanded operations, including $$12,000$ annually for maintenance, $$3,000$ for eco$-$friendly lighting, $$7,000$ for utilities, $$2,000$ for restocking, $$4,500$ for landscaping, $$3,000$ for marketing, $$2,000$ for property taxes, and $$1,500$ for miscellaneous costs. The monthly payroll is set at $$10,000$ to reflect the commitment to staff and the expanded business size

Conclusion

With sales in the previous year reaching $$1\mathrm{.}2$ million and an expected annual growth of $30\%$ following the renovation, Meadowview Marketplace stands at a pivotal moment. The proposed changes, supported by strategic financial planning and a $10\%$ discount rate, signify not just a physical upgrade but a critical move to secure the store's future success in a competitive landscape.