Business Plan Competition December 6-7, Prison Entrepreneurship Program P.O. Box Houston, TX (832)

Transcription

1 Business Plan Competition December 6-7, 2018 Prison Entrepreneurship Program P.O. Box Houston, TX (832)

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3 Savage Society Purpose built products Business Plan December 2018 Owner & Founder

4 TABLE OF CONTENTS EXECUTIVE SUMMARY...1 PERSONAL FIT...2 OPPORTUNITY...2 SOLUTION...2 CUSTOMERS...3 DIFFERENTIATORS...4 EXTRAS...6 MARKETING...6 FINANCIAL PROJECTIONS... ATTACHED

5 EXECUTIVE SUMMARY Opportunity Purpose Solution Redefining the way skateboards are displayed, my company will focus on art whether it be on boards or the actual displays themselves. There is an opportunity to satisfy the need of skater or skateboard enthusiasts to have a functional and artistic way to display skateboards on the wall as well as art series skateboards for skating and display. We will produce hand built displays which will allow skateboards to be hung professionally and Artistic Limited Edition Skateboards will be created to display. Customers Differentiators Extras My target customer is 25-to-45 years of age and an active skater or skateboard enthusiast that collects skateboards. Use of non-existent designs, custom painting, custom ordering, and digital photo frames will set us apart. I have contacts to get materials cheaper, access to tools including a C.N.C. machine, 13 years of carpentry exp., 17 years of skateboarding exp., as well as a relationship with a skate shop owner. Marketing Start-up Costs Financials & Extras I will reach customers by attending skate contests and local skate parks, and posting information on our social media and web pages. Owner Inv. - (Cash) $ 7,560 Owner Investment (Equipment) $ - Vehicle/equipment Loan $ - Unsecured Debt/Loan $ - Equity Investment $ - Total start up costs: $ 7,560 Plan Purpose: Start Up Sales: $ 28, % COGS 8,000 28% Gross profit 20,700 72% Overhead 3,200 11% Pretax income 17,400 60% Tax expense 4,300 15% Owner withdrawals - 0% Net income $ 13,100 45% Personal Fit I am passionate about creating, especially related to my love of skateboarding and have all the business connections and relative experience needed to make this business a success.

6 PERSONAL FIT Travis founded Savage Society to combine two of his passions, skateboarding and carpentry. Travis s extreme passion, skills and valuable connections will assist him in managing the daily operations of Savage Society. Travis has over 16 years of experience in skateboarding and 14 years of custom woodwork experience. Travis will be graduating the Prison Entrepreneurship Program (PEP) in December While attending PEP, he has completed the Toastmasters International program, and gained valuable computer skills in Microsoft Word, Excel and PowerPoint. OPPORTUNITY Explanation: Something to be solved by your business to provide creative custom skateboards and displays to showcase them. Can I solve the problem given my skills and personality? Yes, combining my carpentry skills and love of skating. Is the customer looking for a more holistic solution than his or her immediate complaint? Yes, we provide a solution in excess of ones need. Do I need to do all of the work myself or can I hire others to help me and still maintain quality? I will design all products, but production can be outsourced. Is there growth potential to expand my business, or is this a dying market? This is a growing market with potential worldwide sales. How soon can I get my business up and running? One month to solidify designs, acquire tools, equipment, and connections. Is this something that will take a lot of cash to get started or is it more of a question of hustle? Initially, about $2,000 should start the business it is mostly labor on my part. Is this something I would be proud to share with my family and parole officer? Yes, it focuses on art and is very marketable to the skateboard community. Is the opportunity (Activity and Start Date) consistent with potential parole restrictions? As soon as I am released I can start production with my prior established connections assisting me. Would my business start as a part-time venture or need to be full time? Part time with the hopes to expand and become a full time venture. SOLUTION Explanation: Artistic custom displays with unique designs and high quality. Savage Society 2

7 Is what I am offering filling the customer s real need? Yes, the ability to display skateboard as art. What are the benefits (not features) that I am providing? Organization professional appearance. Why can I do this better than another business (competitor)? Customs artistic design/ unique feature. How will I deliver this better idea to my customers? Skate shops, contests, and social media. Is my delivery (retail store, home service, etc.) consistent with how I will produce the service (one-day delivery, hand-made products, etc.)? Personal delivery within Austin area. Is my solution consistent with my passion for selling? Yes, I love skateboarding. Is the price of my solution equal to or less than the customer s pain? Equal, great value for the quality. Is the approximate cost of my solution lower than the price? Yes, can be very profitable. Do I need a fixed location (Storefront) or is this a mobile business? Online business with potential sell in existing shop. Do I offer a guaranty or return policy? There will be a 30 day satisfaction guarantee if I install. CUSTOMERS Explanation: Savage Society Skate Co. will target active shatters and skateboard enthusiast from 25-to-45 years old with an income from 24k to 100k per year who display skateboards as art. Demographics: Will my service have different appeal to men versus women? My companies appeal will not differ for either sex. What is my ideal customer s age (children, young adult, middle aged, mature)? My ideal customer is 35 years old. Does my customer need to be married, single or does it matter? Relationship status should not affect my consumers. Do language or ethnicity differences improve or limit my ability to sell to my ideal customer? Language or ethnicity do not influence my sales. What aspect of my ideal customer am I appealing to (outdoors person, health conscious, nerd, their personal image, environmental concerns, recreation, etc.)? My primary customer identifies as a skateboarder. Income: Does my customer need a certain income (rich, middle class, poor)? Savage Society 3

8 Selling a variety of products allows me to reach all incomes. Does my customer need to own specific assets (car, house, boat)? My customer must have a wall that they are willing to put a hole in for display purposes. Location: Where will I sell to my customers (their home, their workplace, on the street, online, my store, an event like trades day)? All sales will be web-based. Do I go to my customer (home service) or does my customer come to me? My customer either pick up their purchase or it will be mailed to them. What neighborhood will my ideal customer live/work in (River Oaks/Highland park, a suburb, or small rural community)? My customer will live along I-35 from Austin to San Antonio. How close are my customers geographically located (live close to each other or spread all over the city)? Time is money. My customers are spread throughout the city. How easily can I find this customer (one at a time or they will provide referrals)? I believe a satisfied customer will provide referrals. Other: Can I reach these individuals as a group or do I need to find and sell to them individually? I can market to a group. Once I sell to a customer, what is the likelihood that they will buy from me again? Depending on their need or skateboard collection, a typical customer should provide return business. Savage Society 4

9 DIFFERENTIATORS My Competitors Consumer built themselves Direct or Indirect Promotion Price Their Advantages Their Disadvantages My Differentiators Direct n/a $25 Save money Spend time Quality Texas Skate Direct Word of mouth, sponsorship $35 Brick and mortar location No displays sold Artistic design Online competition Indirect Google $20+ Economies of scale No customization Custom builds C.C.S. Indirect Search engine, optimization $50 Variety No displays sold Displays and boards combination Savage Society 5

10 EXTRAS External Extras: Do you have a connection with a supplier in your industry? I have a connection for dealer pricing on material. Do you have access to a favorable location for your business? I can work out of my home initially. Are you going to be the first company of your type in your chosen area operations? I will be the first local skateboard display company but not the first skateboard company. Internal extras Do you have a new or cutting edge concept? I have cutting edge designs not currently offered Will you be able to offer specialized or flexible scheduling that your competitors cannot match initially? Production of a special order product will come with a specific deadline. Are you an especially charming or personable person? I can be personable and charming. MARKETING Message: What are three things your company name (with no other information provided) says about your company? My company name conveys a lifestyle, relevance to skateboarding and generates interest. What is your tagline? Purpose Built Products How does your name and tagline make you different than your competitors? It inspires further investigation. Can your message be effectively conveyed through multiple types of media? My message and brand are tailored for social media but can be conveyed in any form. Is your message effective across different demographics? My message is effective for my target demographic, but will not be well received across all demographics. Is your pricing consistent with the market for similar offerings? My pricing is higher than my competition but appropriate for the features offered. Is your pricing consistent with the degree of personalization? My pricing reflects the product s quality and level of customization. Media: What are three types of media you will use to reach your customers? I will use social media as well as apparel branded with our logo, prize giveaways and business cards. Savage Society 6

11 How many potential typical customers (not just total people) can you reach each month using the types listed above? I can reach people (potential customers each month depending on how many skate parks/contests I attend). Once you ve reached your typical customer, how many will actually buy from you? I believe 1 in 25 will purchase a product from me. For each of the three, what do you think the estimated cost will be? My social media will have no real cost. Prize giveaways will be $20 roughly, and business cards will be $20 per 500. For each cost estimate, is this a one-time expense up front or a recurring monthly charge? This will be a recurring cost at least monthly for prize giveaways. How will you collect customer reviews? Yelp and online reviews will provide feedback. Savage Society 7

12 START-UP COST Owner's name Company name Industry Savage Society Skate Co. Recreation Start-up Costs Year 1 Assumption 4 - Total Uses Paid or Non-Depreciable Costs contributed in 1 marketing, business cards, fliers 10 cell phone purchase car/truck down payment, if leased permits supplies, office & misc. Materials 500 Promotional Supplies 500 Cash needed for start-up expenses 1,010 Depreciable Costs Paid or contributed in 1 Equipment Financing (Additional to amount paid) Depreciable Assets company car, truck or van - company trailer - computer, printer, fax Tools 1,500 1, building/office deposit N/A N/A beginning cash balance 5,000 N/A N/A Cash needed for start-up assets 6,550-1, assumed life (months) 26 monthly depreciation Total start up cost 7,560 Assumption 5 - Total Sources Cash owner will contribute to the company 7, % Value of owner's assets contributed to company 0% Vehicle loan and other equipment debt (see note 7 for financing) - 0% Unsecured debt, if applicable (for example Kiva loan) 0% Outside equity investment, if applicable 0% Total start up cost, total sources 7, %

13 FINANCIALS dba Savage Society Skate Co. EOU, Financing, and Payroll Assumptions Year 1 Assumption 6 - Revenue Model (Economics of One Unit) Product 1 Product 2 Product 3 Product name Product description Vertical Display Design w/ stencil Horizontal Display Two (2) boards w/ compartment Price per unit % % 0% Cost of one unit hours rate hours rate hours rate Non-owner payroll exp. - 0% - 0% - 0% Non-owner payroll tax 9.0% - 0% - 0% - 0% cost 1 description MDF % MDF % 0% cost 2 description paint % paint % 0% cost 3 description metal dowell % metal dowell % 0% cost 4 description bottom plug % grip tape % 0% Total variable costs % % - 0% Income statement gross profit per unit % % - 0% hours rate hours rate hours rate Owner's labor charge % % - 0% Pro forma gross profit % % - 0% Start-up Total Year Vertical Display sold Horizontal Display sold sold - total revenue $ 450 $ 900 $ 1,350 $ 1,800 $ 2,250 $ 2,700 $ 2,700 $ 3,600 $ 4,050 $ 4,500 $ 4,500 $ 28,800 total cost of sales $ 37 $ 73 $ 110 $ 146 $ 183 $ 219 $ 219 $ 292 $ 329 $ 365 $ 365 $ 2,336 total income statement gross profit (excludes owner labor) $ 414 $ 827 $ 1,241 $ 1,654 $ 2,068 $ 2,481 $ 2,481 $ 3,308 $ 3,722 $ 4,135 $ 4,135 $ 26,464 Owner's labor hours (time spent directly related to sales) Assumption 7 - Financing Total Year Equipment financing, see Start-up Costs sheet amortization schedule Amount borrowed $ - principal, beginning Interest rate 8.0% interest expense Loan term (months) 36 principal payment ly payment - principal, ending Start-up financing, see Start-up Costs sheet Amount borrowed $ - principal, beginning Interest rate 5.0% interest expense Payback period (months) 36 principal payment Grace period (months) - principal, ending ly payment $ - Assumption 8 - Payroll, nondirect Total Year # of employees avg hours each employee(s) worked per month, not in EOU above average per hour wage salary expense, exclduing payroll taxes Assumption 9 - Equipment Purchases, after start-up Description Total Year

14 dba Savage Society Skate Co. Projected Income and Cash Flow Statements Year 1 Assumptions Start-up First Year % of Total Revenue Revenue 2 Vertical Display ,760 20% Horizontal Display ,080 1,440 1,800 2,160 2,160 2,880 3,240 3,600 3,600 23,040 80% line not used % Total revenue ,350 1,800 2,250 2,700 2,700 3,600 4,050 4,500 4,500 28, % Cost of Goods Sold 2 Vertical Display ,592 9% Horizontal Display ,504 19% line not used % Total COGS ,012 1,139 1,265 1,265 8,096 28% Gross profit ,294 1,618 1,941 1,941 2,588 2,912 3,235 3,235 20,704 72% Expenses 2 Auto or truck lease - - 0% Depreciation % Gasoline & fuels - - 0% Insurance - bonding - - 0% Insurance - vehicle - - 0% Interest - equip & start up % Marketing ,110 4% Office - rent - - 0% Office - insurance - - 0% Office - telephone - - 0% Office - utilities - - 0% Payroll - not owner and not in % COGS Payroll taxes (9%) 6 & % Permits - - 0% Supplies % Tax service - - 0% Telephone - cellular % Start-up expenses 1, ,000 3% - - 0% - - 0% - - 0% - - 0% - - 0% - - 0% - - 0% Total expenses 1, ,219 11% Taxable profit (loss) 1 (1,010) ,093 1,417 1,740 1,740 2,387 2,711 3,034 3,034 17,485 61% Tax (expense) benefit 1 - (710) (1,467) (2,195) (4,371) -15% Owner's withdrawals % Net profit (loss) (1,010) , ,740 1, ,711 3, ,114 46% Depreciation Equipment purchases 3 (1,550) (1,550) Principle, equipment loan Repay debt financing Owner contribution 3 7, ,560 Equity investor Net cash flow 5, , ,766 1, ,737 3, ,408 Cash, period start - 5,000 5,149 5,621 6,416 7,535 8,268 10,034 11,800 12,746 15,483 18,543 - Cash, period end 5,000 5,149 5,621 6,416 7,535 8,268 10,034 11,800 12,746 15,483 18,543 19,408 19,408 The accompanying assumptions are an integral part of this financial statement.