1.0 Executive Summary
The purpose of this business plan is to secure $65,000 at debt capital for the development of a skateboard store based in Northwestern Ohio. Skateboard Shop LLC (“the Company”) was founded with the intention of providing a wide range of both skateboards and skateboard apparel to the general public. In addition to operating a brick-and-mortar retail store, the Company will also conduct extensive online sales.
Operations
The primary revenue center for the business will come from the ongoing sale of skateboards across the number of manufacturers. The business will also offer a number of accessories, including bearings and wheels to complement the skateboard decks that will be sold through the store and online platform.
To complement the sales of skateboards, the business will also offer a wide range of skateboard apparel, kneepads, elbow pads, and helmets. The Company is expected to generate contribution margins of 65% on all sales through the location.
The third section of the skateboard store business plan will further document the operation of the business.
The Financing
As noted above, the Company is currently seeking $65,000 in order to commence revenue generating operations. The founder will contribute $35,000 towards the venture.
Moving forward, the Company could easily acquire ongoing rounds of capital to further expand the operations of the business. This business plan assumes that the Company will use its retained earnings to finance its growth in the coming years.
The Future
There is the possibility that a second retail location may be developed within the life of the business. This event is not expected to occur until after the fifth year of operation. In regards to the Company’s online sales, the business will continue to make ongoing reinvestment in regards to search engine optimization, targeted social media, and sales of products on third-party platforms.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funding discussed the executive summary will be allocated as follows:
2.2 Management and Investor Equity
The founder is the 100% owner of Skateboard Shop LLC.
2.3 Exit Strategies
Skateboard shops are reasonably economically stable enterprises, and there would be a significant demand to acquire this type of business by a third-party entrepreneur. In this event, a qualified business broker would be hired to first conduct a valuation prior to marketing the business for sale across numerous online platforms. This event is not expected to occur for at least seven years.
3.0 Operations
As noted in the executive summary, Skateboard Shop will be actively engaged with providing a wide range product specific for the sport. The primary revenue centers will almost always come from the sale of skateboard decks, wheels, trucks, bearings, and other components of a skateboard. The Company will offer products across numerous manufacturers that will be sourced, both domestically and internationally.
In regards to apparel, the Company will have a number of jeans, hooded sweatshirts, T-shirts, as well as accessories including kneepads, elbow pads, helmets, and related safety gear.
It is expected that approximately 60% of the Company’s revenues will come from brick-and-mortar retail sales. The Company will also maintain an expansive online presence through its e-commerce enable website. This will allow for nationwide sales. The Company will also use third-party platforms to make sales of available inventory.
4.0 Overview of the Organization
4.1 Registered Name
Skateboard Shop LLC. The Company is registered as a limited liability company in the state of Ohio.
4.2 Commencement of Operations
Revenue generating operations will commence in the fourth quarter of this year.
4.3 Mission Statement
To provide a wide range of skateboards and skateboard accessories at a cost-effective price.
4.4 Vision Statement
To operate as the preeminent skateboard store in Northwestern Ohio.
4.5 Organizational Objectives
• Properly source of wide range of skateboards and skateboard accessories from numerous manufacturers.
• Provide gainful employment opportunities for the Company staff, especially among those that work in a sales capacity.
• Use multiple forms of online marketing and advertising to drive traffic to the e-commerce website.
• Adhere to all laws and regulatory frameworks regarding the operation of this retail store.
• Continue to expand the Company’s inventory on an ongoing basis in order to further drive revenue.
• Implement fiscally sound protocols to ensure that the business can remain profitable even during an economic pullback.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the business plan will document the skateboard industry, the current economic climate, the customer profile, and the ongoing competition that the business will face moving forward.
At this time, the economic climate within the United States is moderate. Over the past year, numerous adjustments to international trade policy, have caused the price of goods and services to increase. The Company will remedy this risk by increasing its pricing commensurate with the rate of inflation.
It should be noted that the revenues of the business will remain relatively secure during economic challenges given that skateboards are primarily used among young people that have a greater degree of discretionary income. The Company will produce a significant contribution margins on each sale.
5.2 Industry Analysis
As of this year, the sale of skateboards and skateboard related accessories is a $1.2 billion industry. This is a mature industry in the compounded annual growth rate is expected to be similar to that the economy as a whole.
5.3 Customer Profile
Any individual that has an interest in skateboarding as a potential customer of the business. It is expected that most customers will be under the age of 30 with a median household income of $75,000. It is further expected that each transaction will generate $100 of revenue.
5.4 Competitive Analysis
The business will face modest competition as a establishes its operations. The Company will maintain a differentiating factor by sourcing a wide range of skateboards and related products across a number of noted brand name manufacturers.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The business will have sustainable operations as a result of the following:
• The Company will be able to effectively market its wide range of skateboards to a diverse audience within Northwestern Ohio.
• The use of online sales channels will further reduce the risks associate with this business.
• Significant demand among younger demographics for access to cost-effective stores where they can purchase skateboard products.
• The Company can easily scale its operations to include multiple retail stores in the coming years.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the Company’s inventory holdings.
• Aggressively use search engine optimization to drive sales through the e-commerce website.
• Potential development of additional retail locations.
7.0 Marketing Plan
7.1 Marketing Objectives
• Conduct extensive direct outreach with operators a skateboard parks within the target market area.
• Use multiple forms of online marketing with a focus on social media to drive sales.
• Implement search engine optimization techniques for the Company’s website.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $385,000.
• Gross profits will reach $269,000.
Year 2
• Through greater marketing efforts, revenue will reach $420,000.
• Gross profits will reach $294,000.
Year 3
• By the fifth year of operation, total revenue will reach $534,000.
• Gross profits will reach $374,000.
7.4 Marketing Strategies
The ongoing marketing required by the business will be moderate in nature. The Company is sourcing a highly visible retail store within the Northwestern Ohio market area to conduct its operations. This location will feature an extensive amount of exterior signage which will draw patrons to the location.
The Company will also have a wide range of online marketing strategies that will be implemented throughout the life of the business. This will include the aggressive use of search engine optimization so that when searches for skateboard shops with Northwestern Ohio are conducted the website will appear frequently within the search. It should be noted that the Company will engage this type of marketing strategy throughout the life of the business. This will also be extended to include national level marketing strategies so that the business can drive e-commerce sales.
To that end, the Company will use a number of third-party platforms in order to further drive online sales of skateboards and skateboard related accessories.
The Company will also use social media in order to create a significant amount of brand name awareness will also contributing to the efficacy of the Company search engine optimization campaigns. The business will maintain profiles on all major social media platforms. Ongoing targeted advertisements will be implemented in order to further brand awareness.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will have a compounded growth rate of 9%.
• Management will secure $65,000 a debt capital she established the business.
• They founder will contribute $35,000 towards the venture.
9.2 Financial Highlights
• The Company will produce contribution margins of 65% on skateboards and skateboard related accessories.
• Approximately 40% of the Company sales will come through online sales channels.
9.3 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economy. As noted earlier, the Company is targeting a younger demographic typically has a greater degree of discretionary income for making purchases for products like skateboards. As a function of revenue, the Company of highly controllable operating costs, which will further contribute to the economic stability of the skateboard store.
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
• Strong demand in any climate for high-quality skateboards.
• The ability to sell products online will further reduce risk while increasing profit.
• The founder has extensive experiencing operating skateboard stores.
• Substantial contribution margins on all sales.
Weaknesses
• Moderately high cost related to marketing.
• A severe economic recession could impact revenues.
Opportunities
• Ongoing development of skateboard stores in Ohio.
• Continued expansion of the Company’s online marketing campaigns.
• Continued expansion of the Company’s inventory to potentially include products for other sports.
Threats
• Ongoing issues with inflation and tariffs could cause the cost of revenue to increase.
Appendix B – Critical Risks
Development Risk – Low
The primary development matter that needs to be addressed the securing the funding sought in this document. Management is in the process of sourcing a high visibility location in Northwestern Ohio.
Financing Risk – Low/Moderate
The $65,000 of debt capital so will be principal used for the acquisition of tangible inventory. The risks related to this funding or offset by the substantial contribution margins generated from the sale of skateboards and skateboard accessories.
Marketing Risk – Low
The Company will continue to use an expand upon on the marketing strategies discussed earlier. Given the demand for skateboarding among younger demographics, the Company will be able to take a highly targeted approach in order to drive sales in the coming months and years.
Management Risk – Low
The founder is a highly experienced retail entrepreneur that will be able to effectively launch and expand this business. He has worked across numerous skateboard focus enterprises over the past ten years.
Valuation Risk – Low
The valuation risk is offset by:
• A significant portion of the Company’s capital will be placed in inventory.
• The Company will generate significant sales from online channels.
Exit Risk – Low
As noted earlier, there are no longer ranging plans to sell the skateboard shop to a third-party. In this event, they qualified business sales specialist will be hired in order to manage the transaction.