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 Thinking inside the box Business Plan December 2018 Owner & Founder

4 TABLE OF CONTENTS EXECUTIVE SUMMARY...1 PERSONAL FIT...2 OPPORTUNITY...2 SOLUTION...3 CUSTOMERS...3 DIFFERENTIATORS...3 EXTRAS...7 MARKETING...7 FINANCIAL PROJECTIONS... ATTACHED

5 EXECUTIVE SUMMARY Opportunity Purpose Solution We produce handmade keepsake boxes and urns for our customers. There is need for affordable keepsake boxes and cremation urns for family pets. We provide a unique keepsake product to remember your loved family pets. Customers Differentiators Extras I will be serving other businesses as opposed to individuals which will include veterinary clinics, cremation services, and funeral homes. My differentiators are specializing in one product line and material. Also, being local offers more personalization. I have a positive relationship with similar firms and competitors in a different geographic area that will offer me advice. Marketing Start-up Costs Financials & Extras I will reach my customers through virtually free marketing channels such as s, brochures, and business cards. Owner Inv. - (Cash) $ 10,000 Owner Investment (Equipment) $ 5,000 Vehicle/equipment Loan $ - Unsecured Debt/Loan $ - Equity Investment $ 20,000 Total start up costs: $ 35,000 Sales: $ 99, % COGS 11,400 11% Gross profit 87,900 89% Overhead 34,900 35% Pretax income 52,900 53% Tax expense 13,200 13% Owner withdrawals 32,000 32% Net income $ 7,700 8% Personal Fit I have over two years of wood working experience, specializing in cedar box manufacturing. As a shop foreman and manager, I have developed streamline production techniques and concepts. I am willing to invest all available resources to this venture.

6 PERSONAL FIT Travis is the founder and owner of. He will be responsible for the day to day operations including marketing and the hiring and training of new employees. Travis brings over two years of experience in the wood working industry to, which he gained at Cedar Valley Box Company as an associate and shop foreman. While there, Travis contributed to box designs and production techniques as well as gained valuable skills in employee training and shop management. Additionally, Travis has two and a half years of experience in structural ironworking which includes steel erection, welding and detailing. While in prison, Travis earned his GED and received on-the-job-training as a boiler operator. Travis is currently attending the Prison Entrepreneurship Program and is looking forward to completing this program in December OPPORTUNITY Explanation: There is a need for quality handcrafted cremation urns and keepsakes at an economically reasonable price. Can I solve the problem given my skills and personality? I have over two years in the wood working industry which includes developing stream line manufacturing techniques. Is the customer looking for a more holistic solution than his or her immediate complaint? We will be able to provide personalized products. Do I need to do all of the work myself or can I hire others to help me and still maintain quality? I will be able to hire and train others to my standards which will maintain quality control. Is there growth potential to expand my business, or is this a dying market? There is not only expected growth in the market but my business will be able participate in other similar markets. How soon can I get my business up and running? I expect it to take about a year to save up necessary funds and accumulate the proper financials. Is this something that will take a lot of cash to get started or is it more of a question of hustle? I could possibly utilize on incubator at first, so I suppose a little bit of both hustle and cash. Is this something I would be proud to share with my family and parole officer? There are no moral or judicial reasons not to do this sort of work. Is the opportunity (Activity and Start Date) consistent with potential parole restrictions? It will be local and normal operating hours. Would my business start as a part-time venture or need to be full time? Realistically it could be a part time business at first, but it will grow into a full-time venture. 2

7 SOLUTION Explanation: We are well trained in streamlining manufacturing techniques to guarantee perfect quality and customer satisfaction. Is what I am offering filling the customer s real need? We are offering keepsakes that will match the beautiful memories they contain. What are the benefits (not features) that I am providing? Single handcrafted quality at a large scale output with options of personalization. Why can I do this better than another business (competitor)? Years of experience in perfecting quality control during the manufacturing process How will I deliver this better idea to my customers? We will have a constant line of communication with our customers for personalized orders. Is my delivery (retail store, home service, etc.) consistent with how I will produce the service (one-day delivery, hand-made products, etc.)? We will be relatively local to most of our customers, but shipping wi9ll bot be a problem either. Is my solution consistent with my passion for selling? Our production output will provide the possibility for competitive selling. Is the price of my solution equal to or less than the customer s pain? Our prices will vary depending on me design and materials used. Is the approximate cost of my solution lower than the price? The craftsmanship and personality is mostly responsible for the price which is higher than cost of materials on production. Do I need a fixed location (Storefront) or is this a mobile business? We will need a shop for all or manufacturing in inventory. Do I offer a guaranty or return policy? There will be an on delivery return option for any shipped orders. CUSTOMERS Explanation: This firm is targeting other businesses directly not the individual. Demographics: Will my service have different appeal to men versus women? I suppose indirectly, women will appeal to my products more than men. What is my ideal customer s age (children, young adult, middle aged, mature)? Indirectly it will be mostly middle aged to mature people. Does my customer need to be married, single or does it matter? The marital status does not matter. Do language or ethnicity differences improve or limit my ability to sell to my ideal customer? No, there is no language or ethnicity preferences. 3

8 What aspect of my ideal customer am I appealing to (outdoors person, health conscious, nerd, their personal image, environmental concerns, recreation, etc.)? I will be appealing to their emotional sentimental values. Income: Does my customer need a certain income (rich, middle class, poor)? Typically middle class and the rich will only be interested. Does my customer need to own specific assets (car, house, boat)? Yes, they will most likely be homeowners. Location: Where will I sell to my customers (their home, their workplace, on the street, online, my store, an event like trades day)? I will sell my products through the company which will be using them. Do I go to my customer (home service) or does my customer come to me? My customers will come to me. What neighborhood will my ideal customer live/work in (River Oaks/Highland park, a suburb, or small rural community)? Probably, mostly in suburbs or upscale apartments. How close are my customers geographically located (live close to each other or spread all over the city)? Time is money. I reckon they are pretty spread out. How easily can I find this customer (one at a time or they will provide referrals)? They will mostly be reached one at a time. Other: Can I reach these individuals as a group or do I need to find and sell to them individually? I may be able to sell to them as a group in certain circumstances, but mostly individually. Once I sell to a customer, what is the likelihood that they will buy from me again? Most of my future business will be repeat customers. Am I selling to a wholesaler, retailer or does it matter? I am selling to retailers. What industry is my customer in? My customers are the pet loss industry. What size customer do I want to serve (large/small, single/multiple locations)? I would like to serve mostly small and single locations. Will my customer require special insurance (construction bonding, liability insurance)? No, I don t believe any bonding or liabilities are necessary. Does my customer require 24/7 service? No, they do not require 24/7 service. Do I have the capacity to meet the customer s demands? Yes, I will have the capacity to meet my customers needs demands. 4

9 Will the size of a customer allow me to develop other clients or will I be hostage to one company? I don t expect there to be a customer so large that I will be hostage to any one firm. 5

10 DIFFERENTIATORS My Competitors Direct or Indirect Promotion Price Cedar Valley Box Co. Direct Webpage, and trade shows $80- $200 Their Advantages Larger and well known Their Disadvantages Less flexibility Not local My Differentiators Local and flexible Personalization The Individual Indirect Self Sufficient Cost of material 100% personalized Prices for materials high as a consumer Local and flexible Personalization, Affordable and well equipped Perfect Memorials Indirect Internet ads $30- $500 Multiple styles of Urns Lack of personalization Local and flexible Personalization Urnmanufacturer/ Cremation services Direct Internet ads, and word of mouth $30- $500 Already established customers base. Lack of personalization Local and flexible Personalization 6

11 EXTRAS External Extras: Do you have a connection with a supplier in your industry? I could possibly acquire a trusted connection with a supplier through a competitor. Do you have access to a favorable location for your business? I don t have access to any one specific location. Are you going to be the first company of your type in your chosen area operations? I believe I will be the first company to specialize in one type of material. Internal Extras: Do you have a new or cutting edge concept? I don t believe I have a new concept, but with my personal skills, I will have an optimized concept. Will you be able to offer specialized or flexible scheduling that your competitors cannot match initially? I will be offering flexible scheduling, but it will probably be consistent with my competitors. Are you an especially charming or personable person? I am very personable and try my best to be charming and likable. MARKETING Message: What are three things your company name (with no other information provided) says about your company? We provide crematorium vessels, utilizing cedar wood, and handcraftsmanship. What is your tagline? Thinking outside the box with the inside in mind. How does your name and tagline make you different than your competitors? My tagline suggests that we are mindful of what will be contained within the box. Therefore, we will craft it accordingly. Can your message be effectively conveyed through multiple types of media? I believe our message could be conveyed through many types of media. Is your message effective across different demographics? I believe our message is universal. Is your pricing consistent with the market for similar offerings? My pricing is consistent and competitive with the rest of the market. Is your pricing consistent with the degree of personalization? Each product will be of the best quality; however, personalization options will be an additional cost. Media: What are three types of media you will use to reach your customers? I will use s, brochures/business cards and social media. 7

12 How many potential typical customers (not just total people) can you reach each month using the types listed above? I don t expect to reach more than 150 potential customers a month. Once you ve reached your typical customer, how many will actually buy from you? Being a small firm manufacturing shop, I don t expect to serve more than 20-to-30 customers. For each of the three, what do you think the estimated cost will be? s are pretty much free; brochures/business cards, possibly $20-to-$30 for printing and stamps; social media is also fairly of no cost. For each cost estimate, is this a one-time expense up front or a recurring monthly charge? I suppose the brochures/business cards will be a recurring expense that has to be paid as needed. How will you collect customer reviews? I will ask for them to post reviews on our web page. 8

13 START-UP COST Owner's name Company name Industry Wood Working / Pet Loss Start-up Costs Year 1 Assumption 4 - Total Uses Paid or Non-Depreciable Costs contributed in 1 marketing, business cards, fliers 1,000 cell phone purchase car/truck down payment, if leased permits supplies, office & misc. 1,000 Cash needed for start-up expenses 2,000 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 1,500 1,500 shop equipment 25,000 25, building/office deposit 6,500 N/A N/A beginning cash balance - N/A N/A Cash needed for start-up assets 33,000-26, assumed life (months) 442 monthly depreciation Total start up cost 35,000 Assumption 5 - Total Sources Cash owner will contribute to the company 10,000 29% Value of owner's assets contributed to company 5,000 14% 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 20,000 57% Total start up cost, total sources 35, %

14 FINANCIALS dba 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 Traditional Cedar Box Box w/ hinge, clasp and locket Monument Urn Monument style w/ wide base Tower Urn Tower style w/ wide base Price per unit % % % Cost of one unit hours rate hours rate hours rate Non-owner payroll exp % % % Non-owner payroll tax 9.0% % % % cost 1 description raw cedar wood % raw cedar wood % raw cedar wood % cost 2 description wood glue % wood glue % wood glue % cost 3 description hardware % hardware % hardware % cost 4 description 0% 0% 0% Total variable costs % % % Income statement gross profit per unit % % % hours rate hours rate hours rate Owner's labor charge - 0% - 0% - 0% Pro forma gross profit % % % Start-up Total Year Traditional Cedar Box sold Monument Urn sold Tower Urn sold total revenue $ 4,125 $ 4,125 $ 4,125 $ 10,875 $ 10,875 $ 10,875 $ 10,875 $ 10,875 $ 10,875 $ 10,875 $ 10,875 $ 99,375 total cost of sales $ 483 $ 483 $ 483 $ 1,253 $ 1,253 $ 1,253 $ 1,253 $ 1,253 $ 1,253 $ 1,253 $ 1,253 $ 11,472 total income statement gross profit (excludes owner labor) $ 3,642 $ 3,642 $ 3,642 $ 9,622 $ 9,622 $ 9,622 $ 9,622 $ 9,622 $ 9,622 $ 9,622 $ 9,622 $ 87,903 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 interest expense Loan term (months) principal payment ly payment - principal, ending Start-up financing, see Start-up Costs sheet Amount borrowed $ - principal, beginning Interest rate interest expense Payback period (months) 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

15 dba Projected Income and Cash Flow Statements Year 1 Assumptions Start-up First Year % of Total Revenue Revenue 2 Traditional Cedar Box 6-1,500 1,500 1,500 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 28,500 29% Monument Urn 6-1,125 1,125 1,125 3,375 3,375 3,375 3,375 3,375 3,375 3,375 3,375 30,375 31% Tower Urn 6-1,500 1,500 1,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 40,500 41% Total revenue - 4,125 4,125 4,125 10,875 10,875 10,875 10,875 10,875 10,875 10,875 10,875 99, % Cost of Goods Sold 2 Traditional Cedar Box ,743 4% Monument Urn ,497 4% Tower Urn ,232 4% Total COGS ,253 1,253 1,253 1,253 1,253 1,253 1,253 1,253 11,472 12% Gross profit - 3,642 3,642 3,642 9,622 9,622 9,622 9,622 9,622 9,622 9,622 9,622 87,903 88% Expenses 2 Auto or truck lease - - 0% Depreciation ,858 5% Gasoline & fuels - - 0% Insurance - bonding - - 0% Insurance - vehicle - - 0% Interest - equip & start up % Marketing 1, ,800 2% Office - rent - 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 11,000 11% Office - insurance ,200 2% Office - telephone - - 0% Office - utilities ,300 3% Payroll - not owner and not in % COGS Payroll taxes (9%) 6 & % Permits - - 0% Supplies 1, ,800 10% Tax service - 2,000 2,000 2% Telephone - cellular - - 0% Start-up expenses % - - 0% - - 0% - - 0% - - 0% - - 0% - - 0% - - 0% Total expenses 2,000 2,942 2,742 4,742 2,942 2,742 2,742 2,942 2,742 2,742 2,942 2,742 34,958 35% Taxable profit (loss) 1 (2,000) (1,100) 6,681 6,881 6,881 6,681 6,881 6,881 6,681 6,881 52,945 53% Tax (expense) benefit 1 - (3,015) (5,110) (5,110) (13,236) -13% Owner's withdrawals 1 - (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (32,000) -32% Net profit (loss) (2,000) (1,100) 2,681 (135) 2,881 2,681 (2,230) 2,881 2,681 (2,230) 7,709 8% Depreciation ,858 Equipment purchases 3 (33,000) (33,000) Principle, equipment loan Repay debt financing Owner contribution 3 15, ,000 Equity investor 3 20, ,000 Net cash flow - 1,142 1,342 (658) 3, ,322 3,122 (1,788) 3,322 3,122 (1,788) 14,567 Cash, period start - - 1,142 2,484 1,825 4,948 5,254 8,577 11,699 9,911 13,233 16,355 - Cash, period end - 1,142 2,484 1,825 4,948 5,254 8,577 11,699 9,911 13,233 16,355 14,567 14,567 The accompanying assumptions are an integral part of this financial statement.