1.0 Executive Summary
The purpose of this business plan is to raise $100,000 for the development of a skateboard and apparel retailer while showcasing the expected financials and operations over the next three years. Skateboard Shop, Inc. (“the Company”) is a New York based corporation that will provide sales of skateboards, apparel, and other related products to customers in its targeted market. The Company was founded by John Doe.
1.1 Operations
The primary revenue centers for the Company will come from the sale of skateboards and apparel. Mr. Doe is currently sourcing a number of wholesalers and manufacturers that will be able to provide the Company with an extensive line of products for sale to the Company’s targeted demographic of teenagers living within the target market. The Company will also generate secondary streams of revenue from the sale of bottled water, energy drinks, and small packaged snacks. The Company will also maintain an expansive online sales platform. The third section of the business plan will further describe the services offered by the Skateboard Shop.
1.2 The Financing
Mr. Doe is seeking to raise $100,000 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
Skateboard Shop’s mission is to become the recognized leader in its targeted market for providing an extensive line of skateboards and apparel.
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 (primarily teenagers) within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Skateboard Shop, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Skateboard Shop requires $100,000 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 Skateboard Shop, 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 Skateboard Shop. 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 Skateboard Shop.
3.1 Sales of Skateboards and Skateboard Apparel
As stated in the executive summary, the Company intends to acquire a substantial amount of retail skateboard, skateboard apparel, and related accessories which it will sell through its retail store and online sales platform. Management expects that the business will generate gross margins of 68% on each item sold by the Company. The Company, to a minimum extent, will also generate income from the sale of bottled beverages and packaged snack goods.
3.2 Online Sales of Products
In addition to the retail facility, Management intends to develop an online platform which would allow the business to aggressively sell its products on the Internet. As many people now use the internet to purchase goods, Mr. Doe sees a significant opportunity to develop a secondary sales channel that is not overly expensive to maintain. Once the retail operations of the business are functional, Management will hire a web development firm to develop the online ordering platform. The marketing plan for this aspect of the business can be found in the seventh section of the business plan.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the skateboard retailing 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.
However, skateboard remains a popular and low cost hobby among young people. The demand for skateboards will remain relatively strong even during challenging economic climates.
4.2 Industry Analysis
The aggregate sale of sporting goods in the United States (which includes the sale of skateboards and skating accessories) is a $25 billion a year business. As of the last economic census, the industry employed more than 188,000 people working among 22,000 retail establishments. This is a mature industry, and the excepted future growth rate of the industry will remain in lockstep with that of the general economy.
4.3 Customer Profile
The Skateboard Shop’s average client will be a middle to upper middle class teenaged to early 20’s male living in the Company’s target market. 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 Skateboard Shop 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 Skateboard Shop.
5.1 Marketing Objectives
- Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
- Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the Skateboard Shop to easily target its demographics 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. The Skateboard Shop will also use an internet based strategy. This is very important as many people seeking local retailers, such as skateboard shops, now the Internet to conduct their preliminary searches. Mr. Doe will register the Skateboard with online portals so that potential customers can easily reach the business. The Company will also develop its own online website, which will feature e-commerce functionality so that the business can generate sales from outside of its retail location. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the skateboard and apparel products that the Company is selling.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
- The Skateboard Shop will have an annual revenue growth rate of 8% per year.
- The Owner will acquire $100,000 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. Skateboard and skateboard apparel are non-essential items, and as such, customers will have less discretionary income to purchase these goods in an economic recession. However, the high gross margins generated from sales (both retail and online) will ensure that the Skateboard Shop can remain profitable and cash flow positive in any economic climate.
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
