A feed store sells a lot of feed at a thin margin, about $18 of every $100, because ranchers know what a bag costs. The margin is in everything around it: pet food and supplies, fencing and hardware, and garden and seed in spring. The plan turns on a big opening inventory, a forklift and a delivery truck, wages for people who can lift a 50-pound bag all day, and turning that inventory fast. In the example, a Texas feed store starts with $167,500, ends its first year about $10,800 behind before the owner's pay while sales build, and makes about $2,700 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the store in a paragraph: the ranches nearby, the lines, the goals.
- Cost each category per $100: the goods, card fees and shrink.
- Plan sales by category: feed, pet food, fencing and hardware, garden.
- Feed brings the traffic at a thin margin; the rest brings the margin.
- The opening inventory is the biggest startup cost.
- Turn inventory fast: feed has dates and mice.
- TaroStack keeps the shelves counted and the reorder list in days of cover. More below.
Part 1: the business description
Tri-County Feed & Supply, a made-up feed store in Weatherford, Texas, writes:
Tri-County Feed & Supply is a 6,000-square-foot feed store with a warehouse west of Fort Worth, selling livestock feed, pet food and supplies, fencing and hardware, and garden seed and plants, with delivery to ranches within 30 miles. In its first year it aims to reach $57,000 of sales a month.
Part 2: what $100 of sales costs
| Category | Goods | Card fees | Shrink | Cost | Margin |
|---|---|---|---|---|---|
| Livestock feed | $79.00 | $2.00 | $1.00 | $82.00 | 18.0% |
| Pet food and supplies | $58.00 | $2.00 | $2.00 | $62.00 | 38.0% |
| Fencing and hardware | $57.00 | $2.00 | $1.00 | $60.00 | 40.0% |
| Garden and seed | $50.00 | $2.00 | $3.00 | $55.00 | 45.0% |
Feed's shrink is torn bags and the odd pallet the mice found; garden's is plants that don't sell before they wilt. A pet supply shop's counts are in pet store inventory.
Part 3: customers, the warehouse and delivery
Ranchers buy feed by the pallet and have it delivered; weekend horse owners and backyard chicken keepers buy by the bag and stay for the pet aisle and the garden center. The warehouse holds about three weeks of feed, rotated oldest first, because feed carries a date and mice find the old pallets.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Livestock feed | $100.00 | $82.00 | $18.00 | 18% | 250 |
| Pet food and supplies | $100.00 | $62.00 | $38.00 | 38% | 140 |
| Fencing and hardware | $100.00 | $60.00 | $40.00 | 40% | 110 |
| Garden and seed | $100.00 | $55.00 | $45.00 | 45% | 70 |
At full speed the business sells $57,000 a month and keeps $17,370, 30.5%; pet food and supplies bring $5,320 of it.
Part 5: the first year, month by month
Fixed costs are $14,700 every month: wages ($7,500), rent and warehouse ($4,500), utilities ($900), forklift and truck upkeep ($600), insurance ($500), register and software ($200), and other costs ($500). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $28,500 | −$6,015 | −$6,015 |
| 2 | $31,900 | −$4,981 | −$10,996 |
| 3 | $35,300 | −$3,949 | −$14,945 |
| 4 | $38,800 | −$2,870 | −$17,815 |
| 5 | $42,200 | −$1,838 | −$19,653 |
| 6 | $45,600 | −$804 | −$20,457 |
| 7 | $48,600 | $116 | −$20,341 |
| 8 | $50,800 | $774 | −$19,567 |
| 9 | $53,000 | $1,439 | −$18,128 |
| 10 | $54,700 | $1,967 | −$16,161 |
| 11 | $57,000 | $2,670 | −$13,491 |
| 12 | $57,000 | $2,670 | −$10,821 |
The year's sales are $543,400, and the business ends it $10,821 behind, before the owner's pay. It breaks even at about $48,240 of sales a month, in the seventh month. The lowest cash point, −$20,457 in month 6, is covered by the $25,000 of working cash with about $4,500 to spare. Feed's thin margin is why the plan needs so much of it: 250 hundreds of feed a month bring less than half the contribution. Spring garden sales and fall feed for winter make a real year uneven.
Part 6: the startup budget
| Item | Example |
|---|---|
| Opening inventory | $80,000 |
| Delivery truck | $25,000 |
| Forklift | $12,000 |
| Shelving and pallet racks | $10,000 |
| Lease deposit and first month | $9,000 |
| Register | $3,000 |
| Signs | $3,000 |
| Licenses | $500 |
| Working cash | $25,000 |
| Total to start | $167,500 |
The $142,500 before working cash is earned back in about four and a half years at full speed. A farm shop that sells its own products is in farm store business plan, and a store with a wider mix in general store business plan.
Get the template
Download the feed store business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one shrink share. Pallets of feed age in the warehouse, the delivery truck takes from the same stock as the counter, and nobody counts the fencing aisle until a rancher wants 40 T-posts.
How TaroStack does it
TaroStack keeps the shelves counted, the reorder list in days of cover, and what was thrown out by reason.
Receiving by supplier. Each delivery is received against its purchase order, so what was ordered, what came and what it cost are on record.
Counts and the reorder list. Shelves, coolers and the back room can be counted on a phone with no signal, and the reorder list shows what runs out first in days of cover.
Shrink with a reason. Feed past its date and bags the mice got into is recorded with its reason, expired, damaged or lost, and reported by item.
| The job | Notebook | In TaroStack |
|---|---|---|
| What to order this week | A walk around the shelves | The reorder list |
| What a delivery cost | Invoices in a drawer | Receiving by supplier |
| What was thrown out | Not recorded | Shrink by reason and item |
Receiving, counts and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.