1.0 Executive Summary
The purpose of this business plan is to secure $65,000 a capital for the development of a candy store based in Union County, Arkansas. Candy Store LLC (“the Company”) was founded with the intention of providing a wide range of both domestically and internationally produced candies through its retail location as well as through online sales.
Operations
The primary revenue center for the business will come from the ongoing sale of a number of candies produced from a wide spectrum manufacturers based in the United States as well as international markets. This will create a major differentiating factor for the candy store in the coming months and years.
To complement the sales of candy through the brick-and-mortar location, the Company will also maintain an expansive online presence through an e-commerce enabled website. This will significantly increase revenue while also contributing to the economic stability of the candy store.
The third section of this candy store business plan will further document the operations of the business.
The Financing
As noted above, the Company is currently seeking $65,000 in order to establish the business’ operations. These funds we primarily use for the build out of the location as well as inventory sourcing. The owner will contribute $35,000 towards venture.
Moving forward, the Company could acquire additional rounds of capital if additional candy store locations are to be established. This document assumes that no further funding will be used during the first five years of operation.
The Future
The Company will continue expand the scope of its marketing campaigns through numerous online channels with the focus on search engine optimization, targeted social media marketing, as well as establishing ongoing relationships with event planners. This will allow the business to sell large quantities of inventories that are used for gifts at major events.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $100,000 of funding will be allocated as follows:
2.2 Management and Investor Equity
The Founder retains a 100% ownership stake in Candy Store LLC.
2.3 Exit Strategies
Given the substantial contribution margin generated from the sales of candy, there would be a significant demand for this type of enterprise. If the business is to be sold, the Company will coordinate these efforts with a business sales specialist that has a focus on retail stores. Historically, candy stores have a price for earnings multiple of two to three times EBITDA.
3.0 Operations
As noted in the executive summary, the Company will be actively involved for providing a wide range of domestically and internationally produced candies from its easy to reach location in Union County. The Company will generate substantial contribution margins from these operations.
In regards to sales, these products will be sold on a per ounce basis. This will allow individuals to make selections across the number of different candies that they can place in a bag, which is then weighted and sold based on weight. This will allow individuals to experience a number of different candies produced across a number of different countries.
The Company’s online sales operations are a significant importance to the business as well. This will allow the Company to make sales of its candies throughout the entirety of the United States, using numerous e-commerce channels. The Company will continue to expand the scope of e-commerce operations on a yearly basis.
4.0 Overview of the Organization
4.1 Registered Name
Candy Store LLC. The Company is registered as a limited liability company in the State of Arkansas.
4.2 Commencement of Operations
The Company will commence revenue generating operations in the first quarter of this year.
4.3 Mission Statement
To provide a wide selection of domestic and international candies that are affordably priced for the Union County community.
4.4 Vision Statement
To operate as a highly respected candy store within the target market.
4.5 Organizational Objectives
• Properly work with purveyors in order for candies across a wide range of countries.
• Use multiple forms of online marketing to drive traffic to the candy store’s website.
• Adhere to all regular regulatory frameworks regarding the sales of candy and related products to the general public.
• Establish ongoing relationships with event planners that will purchase large quantities of candy for their clients’ gatherings.
• Maintain fiscal protocols that will ensure the profitability in longevity of the Company.
• Continue expand the scope of inventory carry by the business to foster repeat patronage
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the candy store business plan will focus on the current economic climate, the industry, the current competition, and the customer profile.
At this time, the economic climate within the United States is moderate. As result of drastically changing trade policies or has been a significant amount of inflation introduced to the economy. The Federal Reserve is taking appropriate measures to address this matter on an ongoing basis.
In the event of a very severe economic recession, this is expected to only have a modest impact on the candy stores revenues. The cost of candy is relatively low and is affordable even during a challenging economic climate.
5.2 Industry Analysis
As of this year, the sales of candy through retail stores generates $3 billion a revenue. It should be noted that this revenue is specific for dedicated candy stores and does not include confectionery goods that are sold at grocery stores. The ongoing growth of the industry will remain similar to that the economy.
5.3 Customer Profile
Candy is universally enjoyed, and has such it as hard to determine the average customer profile. It is expected that people from the entire economic spectrum will come to the location. Generally, these individuals will have a household income exceeding $60,000 and will spend $20 per visit.
5.4 Competitive Analysis
At this time, the Company will face only a modest degree of competition as a establishes it operations in Union County. The business will face significant competition as it relates to online sellers of candy. The Company will maintain a differentiating factor by offering a wide spectrum of international candies.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Candy Store will have sustainable operations as a result of the following:
• Significant and ongoing demand within the target market for cost-effective candies.
• The Company will offer a wide range of selection, which will create a major differentiating factor.
• Limited competition among companies that operate in a similar capacity.
• The Company can scale operations, especially as it relates the online sales of candy.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued reinvestment into the Company, search engine optimization campaigns to drive e-commerce sales.
• Continued expansion of the Company’s inventory on a yearly basis.
• Potential to establishment of additional candy store locations.
7.0 Marketing Plan
7.1 Marketing Objectives
• Implement a wide-ranging pre-launch marketing campaign within Union County.
• Use social media to promote discount and deals on an ongoing basis.
• Source a high visibility location for the Company’s first facility.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $469,000.
• Gross profits will reach $375,000.
Year 2
• Revenue will reach $516,000.
• Gross profits will reach $413,000.
Years 3-5
• In Year 5, revenue will reach $687,000.
• Gross profits will reach $550,000.
7.4 Marketing Strategies
Management will use a number of marketing strategies that will drive significant interest in traffic to the candy store. The Company is currently working with a qualified commercial real estate brokerage in order to ensure that the Company can source a high visibility location in Union County that will be seen by thousands of people on a daily basis. The candy store will have extensive exterior signage that showcases the diverse range of domestic and international candies that are available.
The Company will also conduct extensive direct outreach with event planners within the target market area. This will allow the business to sell substantial inventories of candies when event host want to provide this product as a party favor.
The Company will also continue to expand its social media presence on a yearly basis spending all major platforms. Ongoing deals, discounts, and specials we offered on a monthly basis in order to drive revenue.
The Company will also establish ongoing relationships with local schools in order to provide discounted candy as well as free candies among students that excel academically. This will further position the candy store as a community minded enterprise.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The business will have a compounded annual growth rate of 10.1%.
• The Candy Store will acquire a $65,000 business loan.
• Management will contribute $35,000 towards venture.
9.2 Financial Highlights
• The Company will produce contribution margins of 90% on all in-store sales.
• The Company has controllable operating costs as a function of its revenue.
9.3 Sensitivity Analysis
The businesses revenue is only modestly sensitive to negative changes in the economy given that candy is relatively affordable among all people. The Company will be able to reduce economic risks by establishing an expensive online presence.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• The Company will be the only distributor of selected international candies within the Union County market.
• The Founder has extensive experience operating candy stores and other retail focused enterprises.
• The Company has numerous sources of inventory in place in order to provide a diverse selection.
Weaknesses
• The Company will face significant competition from online sellers of candy.
• Modest high costs related to marketing.
Opportunities
• Potential development of additional candies to locations.
• Continued to expansion the Company’s candy inventories.
• Reinvestment into search engine optimization campaigns to drive e-commerce sales.
Threats
• Severe inflation could cost the cost of revenue to increase.
Appendix B – Risk Analysis
Development Risk – Low
Management is in the process of sourcing a high visibility location in Union County. The principal matter needs to be addressed is securing the funding discussed in this document.
Financing Risk – Low/Moderate
The $65,000 of capital will be principally used for the acquisition of inventories in the build out of the Company’s retail location. These risks are offset by the substantial traffic that will come to the brick-and-mortar location as well as through online sales.
Marketing Risk – Low
Management will continue to expand the scope of its marketing campaigns on a yearly basis. A significant focus will include driving additional e-commerce sales. The Company will also conduct extensive direct outreach with academic institutions and event planners.
Management Risk – Low
The Founder is a highly experienced retail entrepreneur. He will be able to bring the operations of the candy store to profitability very quickly.
Valuation Risk – Low
The valuation risk is offset by:
• The Company will be able to thrive in any economic climate given a low cost of candy.
• The Company can easily scale operations to include additional stores as well as expansion of e-commerce operations.
Exit Risk – Low
In the event that the business is to be sold, the business will coordinate with a qualified business broker in order to arrange this transaction. As noted earlier, this is not expected to occur for significant period of time.