1.0 Executive Summary
The purpose of this business plan is to secure $125,000 of capital for the development of a golf pro shop based in Beaverhead County, Montana. Golf Pro Shop LLC (“the Company”) was founded with the intention providing a wide range of premium golf equipment spanning a large spectrum of noted manufacturers. Beyond selling these products through its retail location, the golf pro shop will also maintain an expansive online presence so that sales can occur throughout the entirety of the United States.
Operations
The primary revenue driver for the business will come from the ongoing sale of golf clubs. The business will carry a broad-spectrum of inventories which will span all major manufacturers. The location will feature in miniature indoor golf driving range so that individuals can test which brand of clubs they like the most. The Company will generate contribution margins of 65% on the sales of clubs and golf bags.
Beyond this primary product line, the Company will also provide an extensive range of golf shoes, golf balls, apparel, and other products that are commonly used during the course of the sport.
The third section of this golf pro shop business plan will discuss the operations of the business.
The Financing
The Company is seeking $125,000 in order to commence operations. The Founder will contribute $50,000 towards the venture. These funds will be principally used for the acquisition of golf product inventories, build out of the location, and working capital. Moving forward, the Company could easily secure ongoing capital in order to further its growth objectives. As golf is a sport that is played by wealthier people, this sport has the ability to maintain economic stability.
The Future
Over the next five years, the Company will continue to expand the scope of its marking operations so it becomes the most widely recognized golf pro shop within Beaverhead County. The Company will also continue to expand its online focused operations in order to drive e-commerce sales.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The startup capital will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Golf Pro Shop LLC.
2.3 Exit Strategies
In the event that the business is to be sold, the Company will coordinate with its retained CPA, attorney, and business broker in order to find a suitable buyer. Historically, retail businesses typically have a sales premium of two to three times EBITDA. The sale of the golf pro shop is not expected to occur for significant period of time.
3.0 Operations
As noted in the executive summary, this golf pro shop will be actively involved with providing a wide range of product specific for the sport. As a Founder is an experienced professional golfer, and he will be able to properly source inventories that meet the needs of golfers throughout the county. The business will maintain a curated selection of premium products across highly noted manufacturers. The primary focus of these operations will be to provide golf clubs and golf bags.
In regards to accessories, the business will provide a extensive range of golf shoes, golf balls, and apparel. The secondary revenues are important given that many people will come in to make these purchases on an ongoing basis. This will complement the larger scale revenues that are produced from golf clubs and golf bags.
The online component of the Company’s operations will also further contribute to the economic stability of the business. This will allow the Company to make sales of golf products through the entirety of the United States through its e-commerce platform as well as third-party channels. The Company will purchase inventories of preowned golf equipment that can be sold through third-party channels for significant profit.
4.0 Overview of the Organization
4.1 Registered Name
Golf Pro Shop LLC. The Company is registered as a limited liability company in the State of Montana.
4.2 Commencement of Operations
The business will launch it golf product retailing operations in the fourth quarter of this year.
4.3 Mission Statement
To cost-effectively provide a wide range of golf product inventories to the general public.
4.4 Vision Statement
To operate as a highly recognized golf pro shop that is known for its curated selection.
4.5 Organizational Objectives
Properly secure inventory across a wide range of manufacturers.
• Established extensive online marketing operations at focus on both regional and national level search engine optimization
• Establish ongoing relationships with country clubs in golf driving ranges within Beaverhead County.
• Engage in the acquisition in sale of preowned golf equipment as this will be a major revenue center.
• Properly onboard sales staff that are familiar with numerous brands of golf equipment.
• Potentially develop additional locations after the fifth year of operation.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section the golf pro shop business plan will focus on the industry, the current economic climate, the customer profile, and the ongoing competition of the business will face.
At this time, the economic climate within the United States is moderate. This is primarily due to the fact that there has been changing trade policies, which has caused inflation to increase. Numerous federal agencies are taking the appropriate measures needed in order to ensure that economy continues to grow while having inflation remaining check.
Although economic. recession can impact the operations of the business, the fact that many golfers are upper middle to upper income people will reduce the risks. The Company will also generate substantial contribution margins from each sale.
5.2 Industry Analysis
Currently, the sales of golf products is a $3.9 billion industry within the United States. The industry has enjoyed a significant amount of growth over the past twenty years as the sport has become more popular. The compounded annual grocery of the industry is expected to remain your 4.5% in the coming years.
5.3 Customer Profile
Any individual that has a love of golf as a potential customer for the business. Generally, these individuals will typically have a household income ranging from $75,000 to $200,000. They will have a budget of $1,000 to $3,000 on new golf equipment.
5.4 Competitive Analysis
The Company will face a moderate degree of competition as it establishes and expands its operations within Beaverhead County. The primary competitive advantage of the Company will maintain that the business will carry its inventory so the only premium golf products are featured at the store.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Golf Pro Shop will have sustainable operations as a result of the following:
• The Company will be able to scale operations both on a brick-and-mortar basis and through online channels.
• The Founder is an experienced golf professional that has a deep understanding of all products
• The Company will offer products among numerous noted manufacturers.
• The ability to buy and sell preowned golf equipment will further the economic stability of business.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the Company marketing campaign that the business becomes the preeminent golf retailer in Beaverhead County.
• Continue reinvestment into the Company search engine optimization campaigns.
• Integration of additional products to further drive revenue growth.
7.0 Marketing Plan
7.1 Marketing Objectives
• Continue to expand the scope of the Company’s operations and Beaverhead County through direct outreach with country clubs.
• Use multiple forms of marketing to drive sales on in an online capacity.
• Use social media to further increase the golf pro shop’s brand profile.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $488,000.
• Gross profits will reach $317,000.
Year 2
• The business will expand its operations.
• Revenue will reach $532,000.
• Gross profits will reach $346,000.
Years 3-5
• By Year 5, total revenue will reach $690,000.
• Gross profits will reach $448,000.
7.4 Marketing Strategies
The Company will use a number of marketing strategies in order to position to operations as the preeminent golf pro shop in Beaverhead County. Management is currently in the process of sourcing a retail location that is located near country clubs as well as golf driving ranges. The location will feature substantial exterior signage that speaks to the curated nature of the golf product inventories that are offered.
During the development, the Company will work with golf professionals that work at country clubs as well as golf driving ranges within the target market area. This will further expand the scope of the Company’s notoriety as a relates to receiving referrals. In further extension of these operations, the business will also conduct outreach with realtors that will provide recommendations to people that have recently moved to the area.
The Company will maintain an expensive online presence that includes both a website as well as social media. The website will feature all golf inventories offered, as well as showcasing preowned products that are available for sale. This platform will undergo both regional as well as national level search engine optimization in order to further the e-commerce objectives of the business.
Social media will also be of extreme importance to the golf pro shops operations. Here, the Company will list all inventory that are available as well as specialized deals and discounts on an ongoing basis.
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 9%.
• The Founder will contribute $50,000 towards venture.
• The Golf Pro Shop will acquire $125,000 at capital.
9.2 Financial Highlights
• The business will achieve contribution margins of 65% on all the new golf product sales.
• The golf pro shop will achieve contribution margins of 40% to 50% of preowned products.
9.3 Sensitivity Analysis
The Company’s revenues are only moderately sensitive to negative changes the economy. As golf is a sport that is played by upper middle to upper income people, these individuals are less swayed by negative changes in the economy. Additionally, the substantial contribution margin generated will fully support the underlying operating cost of this golf pro shop.
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 business will be strategically located near golfing facilities in Beaverhead County.
• Limited competition among golf pro shops that carry the same type of inventories.
• The Company will be able to sell products online which will further drive profitability.
Weaknesses
• Moderately high cost as it relates to marketing.
• A very severe economic recession could impact the demand for golf products.
Opportunities
• Development of additional locations outside of the target market area.
• Continued expansion of online marketing operation.
Threats
• Tariffs and related changing trade policies could cause the cost of revenue to increase.
Appendix B – Risk Analysis
Development Risk – Low
The primary issue that needs into face is securing the funding discussed in this document. Management is already in the process of securing a high visibility location near country clubs in golf driving ranges.
Financing Risk – Low/Moderate
A significant portion of $125,000 Satten this document will be used specifically for inventory acquisitions. The risk related to this financing or offset by the ability to sell products online as well as the economic stability of the end user.
Marketing Risk – Low
The Company will continue to use and expand on the marketing strategies. This discussed earlier with a focus on direct outreach with professionals and the target market area for referrals. This will be complemented by the use of extensive online marketing strategies.
Management Risk – Low
The Founder is a noted golf professional that will be able to properly provide recommendations for which golf equipment is most appropriate for each customer. The Founder will be able to bring this golf pro shop to profitability quickly.
Valuation Risk – Low
The valuation risk is offset by:
• The operations of this business or scalable on a brick and mortar as well as online basis.
• The Company’s target market is relatively immune from negative economic changes.
Exit Risk – Low
As needed earlier, the owner has no intention of selling this business for a significant timeframe. Numerous qualified professional professionals would be hired in order to manage the sale of this golf pro shop to a third-party.