1.0 Executive Summary
The purpose of this business plan is to raise $125,000 for the development of a scuba gear supply store while showcasing the expected financials and operations over the next three years. Scuba Supply Store, Inc. (“the Company”) is a New York based corporation that will provide a diverse array of scuba tanks, suits, and related gear to customers in its targeted market. The Company was founded i by John Doe.
1.1 Operations
Through its retail location, Mr. Doe intends to sell a broad spectrum of scuba related merchandise including wetsuits, tanks, scuba apparatuses, and other goods associated with the hobby of scuba diving and water sports. He also intends to sell other water sports equipment and apparel associated with water sports. This will be the primary revenue center of the business. The third section of the business plan will further describe the services offered by the Scuba Supply Store.
1.2 The Financing
Mr. Doe is seeking to raise $125,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate.
1.3 Mission Statement
The Company’s mission is to become the recognized leader in its targeted market for sales of scuba equipment.
1.4 Management Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the retail management industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals (scuba enthusiasts) within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Scuba Supply Store, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Scuba Supply Store requires $125,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Scuba Supply Store, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Scuba Supply Store. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Operations
Below is a description of the products offered by the Scuba Supply Store.
3.1 Sales of Scuba Equipment
The largest revenue center for Scuba Supply Store, Inc. will be the direct sale and rental of scuba and water sports equipment. Within the retail location, Management intends have a broad array of air tanks, wetsuits, flippers, goggles, and other apparatuses and accessories associated with scuba diving. Currently, Management is sourcing a number of suppliers that will provide the Company with its expansive inventory at low wholesale prices. Mr. Doe expects that the sale of equipment pieces will generate 60% margins on each dollar of revenue. Additionally, Scuba Supply Store, Inc. may develop rental programs that will allow the business to develop a predictable stream of revenue from beginner and passive scuba enthusiast. The income from this type of transaction has very few costs associated with providing the service.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the scuba supply industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate is moderate. The economy is undergoing a transition period due to changes in global trade policy. At this time, interest rates have remained steady due to appropriate and measured policies by central banks. While there has been volatility, this is expected to subside as the economy adapts to these changes.
The demand for scuba equipment remains incredibly strong among people that have a love of this hobby. The business will be able to distribute its products on a national basis through ecommerce channels.
4.2 Industry Analysis
Within the Untied States, there are approximately 2,000 businesses that specialize in the sale of scuba equipment and scuba diving classes. Among these businesses, the aggregate revenues generated on a yearly basis exceed $1.8 billion dollars and provides jobs to 20,000 people. Aggregate payrolls for the industry are approximately $200,000,000 per year.
The diving and scuba instruction industries are mature businesses, and Management expects that the continued growth rate of the business will mirror that of the general economy. For each of the last five years, the industry has grown at an average rate of about 2.2%. However, future growth may increase faster than the general economic growth as more members of the ‘baby-boomer’ population enter retirement. This could cause a significant upward shift in aggregate revenues as the aging population begins to enjoy activities with their retirement years.
4.3 Customer Profile
In this section of the analysis, you should describe the type of customer you are seeking to acquire. These traits include income size, type of business/occupation; how far away from your business is to your customer, and what the customer is looking for. In this section, you can also put demographic information about your target market including population size, income demographics, level of education, etc.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
The Scuba Supply Store intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
- Establish relationships with hotels and motels that cater to tourists within the targeted market.
- Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising
- Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the Scuba Supply Store to easily target men and women within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public.
Scuba Supply Store will also use an internet based strategy. This is very important as many people seeking local retailers, such as scuba supply stores, now the Internet to conduct their preliminary searches. Mr. Doe will register the Scuba Supply Store with online portals so that potential customers can easily reach the business.
The Company will also develop its own online website, which may feature e-commerce functionality in the future. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the scuba supplies that the Company is selling. Finally, Mr. Doe will develop ongoing referral relationships with local hotels and motels within the target market.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
- Scuba Supply Store, Inc. will have an annual revenue growth rate of 8% per year.
- The Owner will acquire $125,000 of debt funds to develop the business.
- The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
In the event of an economic downturn, the business may have a decline in its revenues. Scuba diving (and the related purchase/rental) of scuba supplies is a luxury, and as such, during an economic recession, the business may have issues with top line income. However, the high margins generated from the Company’s operations will ensure that the Scuba Supply Store can remain profitable and cash flow positive in any economic environment.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
7.9 Business Ratios
