Crimp N’ Trails Outdoors Business Plan Owner: Michael Kahn Crimp N Trails Outdoors 1234 Outdoor Store Rd. Cullowhee, NC 28723 (828) 688-­‐3667 (OUTDOOR) [email protected] 1 Table of Contents Executive Summary Purpose/Mission Statement Goals and Objectives Products and Services Industry Analysis Target Market Competition SWOT Analysis Legal Form of Ownership Marketing Plan Summary of Operations Startup Expenses Capitalization Projected Income Statement/Budget-­‐1st Year Projected Income Statement/Budget-­‐2nd Year Works Cited 2 3 4 4 5 6 6 7 8 9 9 10 11 11 12 13 14 Executive Summary Crimp N’ Trails Outdoors will be a specialty outdoors store located in Cullowhee, NC. I, Michael Kahn, will be the prospective owner of the business and will be in charge of its operation. The focus of my store will be to offer climbers and hikers/backpackers in the area the equipment they need to enjoy their outdoor adventures. The products that the store offers will be of high quality and will be moderately priced. Crimp N’ Trails Outdoors will also offer a wide variety of trips and seminars that relate to climbing and hiking/backpacking. The store will mainly attract WCU students, but will also cater to the need of the surrounding community and to the many visitors of the WNC area. Crimp N’ Trails Outdoors will be very customer oriented, offering them a wide variety of product lines to ensure that the customer’s need is met on an individual basis and having a 100% satisfaction guarantee on every product in the store. Since the outdoor retail industry is a growing on, Crimp N’ Trails Outdoors will have a high probability for success.
3 Purpose/Mission Statement The purpose of starting this business is for fellow climbers and backpackers. Crimp N’ Trails Outdoors feels it is important for the people who share our love of the outdoors to have a specific store that provides merchandise and information involved in their interests and activities. Goals and Objectives Our short and long term goals include: •
Become a profitable outdoor specialties store •
Become an established climbing and hiking/backpacking gear retail store in the Western North Carolina area •
Create a website that sales our specialty products and gives information about our services •
Expand and open another Crimp N’ Trails Outdoors store in another area that is in need of an outdoors specialty store 4 Products and Services The products Crimp N’ Trails Outdoors will sell for climbers are: men and women’s climbing shoes, crash pads, holds, tape, chalk, chalk bags, cams, carabineers, webbing, top ropes, and trad/sport ropes. For hiking and backpacking the store will sell backpacks, sleeping bags, sleeping pads, cooking equipment, tents, water purification equipment, canteens, hiking boots, backpacking boots, Chacos, camping food, stoves, and lights. There will also be a book/magazine section with topics relating to our products. There will be a large variety of each of the items listed above to better suit the customers on an individual basis. The products the store will offer will be moderately priced with the main focus being quality. Different services the store will offer are: group climbing trips, climbing safety seminars, various types of technique seminars. For hiking and backpacking Crimp N’ Trails Outdoors will offer group trips ranging from afternoon trips to weeklong trips, Leave No Trace courses, safety/survival courses, and backcountry cooking seminars. It is important to me that our customers are satisfied with what my store has to offer. Crimp N’ Trails Outdoors will stand behind it’s products with a 100% satisfaction guarantee, which means that we will exchange or refund any product that the customer is not happy with. We want customer service to be the main selling point for our business. 5 Industry Analysis The outdoor industry is a growing industry due to the increased interest in recreation among the population. 81% of outdoor retailers reported that revenue was up compared to 5 years ago, with an average growth of 32% (Townley). This shows that the outdoor industry is a growing one. Specialty stores in this industry, such as Crimp N’ Trails Outdoors, face more challenges than retailers that offer a broad range of products. This is due to the leverage of the buyer. The leverage shifted from the seller to the buyer because of the Internet. Smaller outdoor retail stores have the advantage over larger stores. The retail stores that had less than $1 million in revenue averaged lower business expenses, 36%, than those larger retailers who had over $2 million in revenue, 41% (Townley). Also, the smaller specialty stores have a more loyal customer base than the larger retail stores. It is important in this industry to be customer oriented to build customer loyalty and get customers to return. Most customers in this industry are more concerned with quality than price, which makes product selection a key element for Crimp N’ Trails Outdoors. Target Market Crimp N’ Trails Outdoors will operate in Cullowhee, NC mainly targeting male and female young adults, aged 18-­‐35, in the WNC area. Western Carolina University will be very close to the store. WCU’s students will be the majority of Crimp N’ Trails Outdoors customers. WCU being one of North Carolina’s fastest growing university, 6 provides ample opportunity for Crimp N’ Trails Outdoors growth and profitability. The area is also often visited for the areas outdoor opportunities, providing the store with a larger market. Crimp N’ Trails outdoors will also target the surrounding communities in Jackson county. Competition There is only one local outdoor store that will be near Crimp N’ Trails Outdoors is Black Rock Outdoor Co. in Sylva, NC. Black Rock is not a specialty store and they have very selective product options. They carry a general selection of outdoor gear whereas Crimp N’ Trails Outdoors will carry a wide variety of products, but only in a few recreational areas such as climbing and backpacking. Crimp N’ Trails Outdoors will have a competitive advantage over the local competition because it will be the closest store to Western Carolina University. REI is large Co-­‐Op that will also be a competitor to Crimp N’ Trails Outdoors. The nearest REI is about an hour drive to Asheville, NC. REI is a chain of stores all across the nation that sells a wide variety of outdoor gear and has a large customer base. REI’s advantage is that it already has a large customer base and because of its size they have considerable buying power enabling them to maximize profits. One disadvantage to REI is their high prices. Since Crimp N’ Trails Outdoors is going to have moderate prices and high quality goods then it will have a local advantage over them, meaning that students and other residents in the Cullowhee area will find it cheaper to shop at my store. 7 The Internet is also going to be a large competitor to Crimp N’ Trials Outdoors. The Internet is a big competitor because consumers can find very cheap products online. The problem with the Internet is that the consumer cannot see the physical product when purchasing. This is an advantage to Crimp N’ Trails Outdoors because consumers will be focused on the quality of the product and will want to see a physical product. SWOT Analysis Strengths: • Nearest Outdoor store to WCU • 100% Satisfaction Guarantee • Close to an abundance of WNC attractions • Quality Products • Knowledgeable staff • Unique outdoor adventures • Specialty store Weaknesses: • Lack of buying power • Smaller competitor • Bad economy • Limited funds • Limited facilities • Lack of Managerial depth • Small starting customer base Opportunities:
• Possibility to be leading outdoor
store in WNC
• Possibility of opening a new store
in another area
• Creating an online store to reach
more consumers
• As economy recovers, consumers
will have more expendable
income
• Increased product line
Threats:
• Internet competition
• Poor economy
• Debt
• Local competition
• Slow summer months due to
college schedule
• Changing buyer wants and needs
8 Legal Form of Ownership Crimp N’ Trails Outdoors will be a Limited Liability Company (LLC). I feel this is the best form of ownership for our business because my personal assets are protected, the business will be taxed as a sole proprietorship, and we can choose how we want our company to be run. The main reason I want Crimp N’ Trails Outdoors to utilize an LLC is because my personal assets are protected. Marketing Plan I plan to advertise Crimp N’ Trails Outdoors in several different ways. I will advertise in an array of outdoor magazines, specifically in magazines for climbers and backpackers. I will also advertise on websites specific to our products. Since the business is close to a college campus we can post flyers to spread the word about our store and its services. I can also use local newspapers and magazines, which would be a cheaper alternative to the more major magazines. Our company will also sponsor the WCU Climbing team. It would also be in the interest of Crimp N’ Trails Outdoors and Base Camp Cullowhee to work together to form trips, which also promotes the business. 9 Summary of Operations Crimp N’ Trails Outdoors will operate as a LLC because of its ease of formation, low costs of formation, lower taxes, and the protection of personal assets. The facilities will include a 4500 square foot store, parking lot, and a storage space behind the store. Crimp N’ Trail Outdoors will offer high quality products with professional assistance to customers. Products will be acquired directly from the manufacturer of the specialty product. Although Crimp N’ Trails outdoors will not have the buying power of a large outdoor store, some products can be bought in bulk to reduce the price of the product to the customer. Staff will be hired according to their experience in the two different product areas (climbing and hiking/backpacking) and their ability to provide the customer with personal and professional assistance. I personally will be in charge of all operations concerning the business. I plan to hire two full time specialists, each in charge of their specialty area (climbing or hiking/backpacking). I will start each of these specialists on a salary of $30,000/yr. I also plan to hire four part time employees, most likely college students, to help these two specialists. Each of these part time workers will work around 20 hours a week at a wage of $8/hr. I will set my starting salary at $20,000/yr to save the business expenses to ensure it will be a successful venture. 10 Startup Expenses Startup Expenses include: Real Estate and 4500 sq. ft. building $150,000 Inventory $50,000 Equipment $12,000 Advertising $5,000 Contingencies (20%) $43,400 Total $260,400 Capitalization Crimp N’ Trails Outdoors will need $260,400 to begin operation. I, the owner will provide $50,000 of personal savings. Another $50,000 will be attained as a loan from family members. The remaining $160,400 will be attained in the form of a loan from the Small Business Association (SBA). The loan will be financed for a 15-­‐year period. With interest, this comes out to be around a $12,000/yr payment. 11 Projected Income Statement/Budget-­‐1st Year Crimp N' Trails
Outdoors
Fiscal Year Begins
Jun-10
Jun10
Revenue (Sales)
Climbing Gear 4,000
Hiking/Backpacking 5,000
Trips/Seminars/Books/M 3,500
aps
Total Revenue (Sales) 12,500
Cost of Sales
Climbing Gear Inventory
Hiking/Backpacking
Inventory
Trips/Seminars/Books/M
aps Expenses
Total Cost of Sales
Jul-10
Aug10
Sep10
6,000
7,000
3,500
8,000 10,000 14,000 16,000 10,000 11,000 12,000 13,000 14,000
9,000 11,000 15,000 17,000 11,000 12,000 13,000 14,000 15,000
3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500
122,000
134,000
42,000
12,500 16,500 20,500 24,500 32,500 36,500 24,500 26,500 28,500 30,500 32,500
298,000
4,000
5,000
3,500
Oct-10
Nov10
Dec10
Jan11
Feb11
Mar11
Apr11
May11
YEARLY
2,000
2,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
7,000
7,500
8,000
8,500
5,000
5,500
5,500
6,000
6,000
6,500
6,500
7,000
7,000
7,500
61,000
67,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
12,000
5,500
5,500
7,500
9,500 11,500 15,500 17,500 11,500 12,500 13,500 14,500 15,500
140,000
Gross Profit
7,000
7,000
9,000 11,000 13,000 17,000 19,000 13,000 14,000 15,000 16,000 17,000
158,000
Expenses
Salary/Payroll expenses
Accounting and legal
Loan Payments
Utilities
Insurance
Advertising
9,440
500
1,500
600
350
1,000
9,440
500
1,500
600
350
1,000
9,440
500
1,500
600
350
1,000
9,440
500
1,500
600
350
1,000
113,280
6,000
18,000
7,200
4,200
12,000
13,390 13,390 13,390 13,390 13,390 13,390 13,390 13,390 13,390 13,390 13,390
160,680
Total Expenses 13,390
Net Profit -6,390
9,440
500
1,500
600
350
1,000
-6,390 -4,390 -2,390
9,440
500
1,500
600
350
1,000
-390
9,440
500
1,500
600
350
1,000
3,610
12 9,440
500
1,500
600
350
1,000
5,610
9,440
500
1,500
600
350
1,000
-390
9,440
500
1,500
600
350
1,000
610
9,440
500
1,500
600
350
1,000
1,610
9,440
500
1,500
600
350
1,000
2,610
3,610
-2,680
Projected Income Statement/Budget-­‐2nd Year Crimp N' Trails
Outdoors
Fiscal Year Begins
Jun-11
Jun11
Revenue (Sales)
Climbing Gear 8,000
Hiking/Backpacking 9,000
Trips/Seminars/Books/M 3,500
aps
Total Revenue (Sales) 20,500
Cost of Sales
Climbing Gear Inventory
Hiking/Backpacking
Inventory
Trips/Seminars/Books/M
aps Expenses
Total Cost of Sales
Jul-11
Aug11
Sep11
Oct-11
Nov11
Dec11
Jan12
Feb12
Mar12
Apr12
May12
YEARLY
8,000 12,000 14,000 16,000 17,000 19,000 14,000 14,000 15,000 16,000 17,000
9,000 13,000 15,000 17,000 18,000 20,000 15,000 15,000 16,000 17,000 18,000
3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500
170,000
182,000
42,000
20,500 28,500 32,500 36,500 38,500 42,500 32,500 32,500 34,500 36,500 38,500
394,000
4,000
4,500
4,000
4,500
6,000
6,500
7,000
7,500
8,000
8,500
8,500 9,500
9,000 10,000
7,000
7,500
7,000
7,500
7,500
8,000
8,000
8,500
8,500
9,000
85,000
91,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
12,000
9,500
9,500 13,500 15,500 17,500 18,500 20,500 15,500 15,500 16,500 17,500 18,500
188,000
Gross Profit 11,000
11,000 15,000 17,000 19,000 20,000 22,000 17,000 17,000 18,000 19,000 20,000
206,000
Expenses
Salary/Payroll expenses
Accounting and legal
Loan Payments
Utilities
Insurance
Advertising
9,440
500
2,000
600
350
2,000
Total Expenses 14,890
Net Profit -3,890
9,440
500
2,000
600
350
2,000
9,440
500
2,000
600
350
2,000
113,280
6,000
24,000
7,200
4,200
24,000
14,890 14,890 14,890 14,890 14,890 14,890 14,890 14,890 14,890 14,890 14,890
178,680
-3,890
9,440
500
2,000
600
350
2,000
110
9,440
500
2,000
600
350
2,000
2,110
9,440
500
2,000
600
350
2,000
4,110
9,440
500
2,000
600
350
2,000
1,000
5,110
13 9,440
500
2,000
600
350
2,000
7,110
9,440
500
2,000
600
350
2,000
2,110
9,440
500
2,000
600
350
2,000
2,110
9,440
500
2,000
600
350
2,000
3,110
9,440
500
2,000
600
350
2,000
4,110
5,110
27,320
Works Cited Townley, Jay. "Outdoor Specialty Retailer Operational Report." Outdoor Industry Association. 28 Jan. 2007. Outdoor Industry Association. 20 Apr. 2009 <http://www.outdoorindustry.org>. 14