Sample Business Plan



Business Plan

by

Carmen Aponte

Pet Pak

753 Main Street

Smallville, Indiana 47018

carmenaponte@



Prepared December 15, 2003

©Pet Pak 2003

Information contained in this document shall not be disclosed to any unauthorized individual.

________________________________ _____________________________

Signature Date

Purpose Statement

This business plan was created to interest investors by documenting Pet Pak’s plan for success. Identifying Pet Pak’s goals and its strategies for accomplishing its goals provides a standard for measuring success and guidance in making critical business decisions.

Table of Contents

Executive Summary 1

Pet Pak 1

Pet Pak’s Business Activities 1

Mission Statement 1

Business Structure 1

Product 1

History 2

Objectives 2

Location 2

Pet Pak’s Product 2

Product Description 3

Warranty 3

Pet Pak’s Location 3

Geographical Location 3

Use of Business Space 3

Pet Pak’s Product Market 4

Demand 4

Customers 4

Pet Pak’s Competition 4

Competitors 4

Prices 5

Pet Pak’s Advertising and Public Relations 5

Advertising 5

Marketing Strategy 5

Pet Pak’s Key Personnel 5

Pet Pak’s Organizational Structure 5

Employees 6

Support Services 6

Pet Pak’s Operations 6

Pet Pak’s Financial Overview 6

Business Financing 7

Supporting Documents 7

Executive Summary

Pet Pak is the answer to a unique opportunity. Smallville, Indiana, a community of 10,000 individuals, does not have a retail establishment devoted to pet products, even though the value of the market is over one million dollars. Experience, location, and demand have created the opportunity for success.

Pet Pak has been established as a sole proprietorship. It is owned and managed by Carmen Aponte, a successful businesswoman with experience in opening and operating new businesses in the pet industry.

The geographical location provides a business environment almost free of competition. The closest retail establishment specializing in pet products is 40 minutes away from Smallville. The only local competition is several grocery stores, which carry a very limited selection of pet products.

Financial projections indicate that Pet Pak will begin to earn a profit in less than a year. Carmen Aponte has invested $75,000 of her own funds in the business. Dr. Vincent Aponte has invested $25,000. An additional $125,000 is needed for the start-up period until Pet Pak can earn a profit.

Pet Pak

Pet Pak is poised for success. Many of the steps required to open its doors for business have been completed.

Pet Pak’s Business Activities

Pet Pak is preparing for its grand opening, scheduled for March 1, 2004. Its business activities have prepared Pet Pak to operate successfully, becoming profitable in the first year.

Mission Statement

The mission of Pet Pak is to educate and assist pet owners by providing high-quality food and products designed to improve the lives of cherished pets and their owners living in Smallville Township. Fulfilling this mission will create healthier pets and happier pet owners. It will also create financial success for Pet Pak, its owner, and its investors.

Business Structure

Pet Pak has been established as a sole proprietorship in Smallville, Indiana. It is owned and operated by Carmen Aponte. Ms. Aponte has valuable experience as a business executive as well as training and experience as a veterinary technician and animal clinic administrator.

Product

Pet Pak is a retail business that sells pet products, such as food, toys, and equipment. Product categories include dry and canned food; toys for dogs, cats, and other small pets; and equipment for pet care and training. In the future, Pet Pak may offer services such as grooming, obedience training, and pet boarding.

History

Dr. Vincent Aponte, Carmen Aponte’s husband, has operated the only veterinary clinic in Smallville Township for five years. Aponte Animal Clinic sold a limited line of food and pet care products for its clients. Expanding the exam rooms in the clinic required the space that was used to store and display the products. Therefore, Aponte Animal Clinic discontinued the sale of these products, creating a need for a retail business selling pet products in the Smallville community. When the retail space next to the Aponte Animal Clinic became available, Carmen Aponte took advantage of the opportunity to claim the ideal location for Pet Pak. At this time, Pet Pak has accomplished many of the tasks required to open and operate a retail establishment.

• A retail location has been leased.

• Necessary licenses have been obtained.

• Banking services have been selected.

• Most suppliers have been selected. Some negotiations with suppliers are still in process.

• Aponte Animal Clinic has agreed to announce Pet Pak’s grand opening by sending a letter to all of the clinic’s customers, providing access to a large group of targeted consumers.

• Dr. Vincent Aponte, DVM has agreed to evaluate the pet products carried by Pet Pak.

Objectives

Pet Pak will provide pet products to 50 percent of Aponte Animal Clinic’s clients by the end of the fourth quarter. The number of patrons will increase until Pet Pak fills the pet product needs of at least 75 percent of the clinic’s clients by the end of its second year of operation.

Location

Pet Pak is located at 753 Main Street in Smallville, Indiana. Its location next to the Aponte Animal Clinic provides a unique opportunity to attract the clinic’s clients by providing immediate access to the products recommended by the clinic.

The hours of operation will match the Aponte Animal Clinic’s hours of 8:00 AM to 7:00 PM Monday through Friday and 8:00 AM to 1:00 PM on Saturday. The additional hours on Sunday of 10:00 AM to 4:00 PM enable pet owners who work during the week to reach the store on weekends.

Pet Pak’s Product

Pet owners in Smallville need a local business that sells pet products. Pet Pak meets the needs of the community.

Product Description

Pet Pak meets the needs of pet owners in the Smallville community. Its merchandise assortment focuses on the needs of the most popular pets, primarily dogs, cats, birds, and fish. However, it also carries products for pets that are less common, including iguanas, rabbits, and pot bellied pigs.

Pet products include food, toys, grooming tools, beds, and kennels. Suppliers are well-known, reputable businesses whose references have been contacted. At least three pet stores or pet supply stores expressed satisfaction with the suppliers’ quality and service. Manufacturers’ products carried by the suppliers are popular with pet owners and provide high-quality products.

Warranty

Every product in the store has been evaluated and approved by Dr. Vincent Aponte, DVM. This enables consumers to purchase products without worrying that the item isn’t safe for their pets.

Pet Pak’s Location

Location is one of Pet Pak’s biggest advantages. The store site has an excellent location in Smallville near a veterinary clinic that attracts many potential customers. The building meets the storage and display needs for Pet Pak’s merchandise.

Geographical Location

Pet Pak has acquired an ideal location at 753 Main Street in Smallville, Indiana. It is next to the Aponte Animal Clinic in the Smallville Town Square. The location guarantees a steady stream of pet owners who have already demonstrated concern for their pets and a willingness to spend money on them by bringing them to the clinic for a health check-up or treatment. The location provides a unique opportunity to attract the clinic’s clients by providing immediate access to the products recommended by the clinic.

Smallville Town Square is located in a business center that is easily accessible from Smallville’s major roadways. The site offers adequate parking in a medium-sized lot in front of the retail establishments. The business center is attractive, busy, and well lit.

The nearest store that carries a full line of pet products is a 40-minute drive from the Pet Pak location. This creates an opportunity for Pet Pak to fill the community’s needs for pet products without encountering direct competition from a similar retailer in the community.

Use of Business Space

The selected retail location is 1,500 square feet. The establishment is currently divided into a display space of 800 square feet, a storage area of 500 square feet, and an office area of 200 square feet. This arrangement provides more space than Pet Pak needs during its first year of operation. As merchandise lines expand, the space will be used.

Pet Pak’s Product Market

Smallville Township in Indiana contains an easily accessible market that will help Pet Pak achieve its objectives. The proximity of the Aponte Animal Clinic and the introduction letter the clinic will send its clients provide immediate access to the target market when the store opens.

Demand

The demand for pet products in Smallville can easily support Pet Pak. In fact, the market in Smallville has been valued at $1,097,100.

• The population of Smallville is 10,000. The size of the average household, according to the U.S. Census Bureau, is 2.6.

The number of households in Smallville is 3,846.

10,000 ÷ 2.6 = 3,846

• According to the American Pet Products Manufacturers Association, Inc., 62 percent of U.S. households own a pet. Therefore, the number of Smallville households that own a pet in 2002 was 2,385.

3,846 x 62% = 2,385

• The American Pet Products Manufacturers Association, Inc. also reports that each household spends an average of $460 each year. Therefore, the 2002 market was $1,097,100.

2,385 x $460 = $1,097,100

The number of households owning a pet and the amount of money each household spends on its pets has increased each year. The current trend indicates that the demand will continue to increase.

Customers

Initially, the target market is Aponte Animal Clinic’s clients. The announcement letter the clinic has agreed to send to its clients introduces Pet Pak to the initial target market of approximately 700 pet owners in Smallville Township. After the first year, Pet Pak will spend time and money targeting pet owners who are not clinic patrons.

Pet Pak’s Competition

A major advantage for Pet Pak is the lack of strong local competition. Several retailers carry a small assortment of pet products, but Pet Pak is the only specialty pet product retailer.

Competitors

The nearest retailer that sells a large assortment of pet products is a 40-minute drive from Smallville, Indiana. Pet Pak’s local competition includes three grocery stores and Smallville Feed and Grain. Each of these retailers sells several brands of dog and cat food treats. The grocery stores also carry a limited selection of toys, collars, and leashes. In the absence of a specialty retailer, local pet owners are accustomed to buying dog and cat food at the grocery store. However, a survey of 150 clients at Aponte Animal Clinic confirmed that 75 percent of Smallville’s pet owners prefer to shop for pet products at a specialty retailer and make all of their purchases at a specialty retailer such as Pet Pak.

A brick and mortar retailer can’t provide a fair evaluation of its competition without considering its online competitors. Major online retailers specializing in pet products include PETCO Animal Supplies, Inc. () and PETsMART, Inc. (). Although these retailers carry a large assortment of pet products, the survey conducted at the Aponte Animal Clinic indicates that 90 percent of pet owners prefer to buy pet products in person. The weight of products, such as dog food, and the awkward size and shape of other products, such as dog beds or scratching posts for cats, make pet products difficult to ship to individual consumers. Therefore, online retailers are not serious competitors in Smallville.

Prices

Many items in Pet Pak’s merchandise assortment aren’t sold by other local retailers. This enables Pet Pak to set most prices without considering prices set by the competition. Prices on foods and food treats will match the prices in the grocery stores. The similarity in price will attract customers who have been purchasing pet food at a grocery store.

Pet Pak’s Advertising and Public Relations

Pet Pak is conducting very limited advertising. Publicity must be developed and carried out through inexpensive methods.

Advertising

Advertising will be limited. A story will be printed in the Smallville Press, the local newspaper, when Pet Pak holds its grand opening. A quarter-page ad will run in the Sunday edition of the Smallville Press for six months.

Marketing Strategy

A long-term relationship with Aponte Animal Clinic benefits Pet Pak and the clinic, providing a strong advantage over any competitors. The announcement letter sent by the clinic is the first step in a joint marketing strategy. The clinic will recommend Pet Pak to its clients and Pet Pak will recommend the clinic to its customers. This strategy emphasizes high-quality pet products and high-quality pet care and identifies the clinic and Pet Pak as high-quality providers.

Pet Pak’s Key Personnel

Carmen Aponte is the owner of Pet Pak. She has a Masters Degree in Business Administration. While completing her degree, she worked as a veterinary technician. After graduating, she and Dr. Vincent Aponte, her husband, established the Aponte Animal Clinic. She performed all the management and administrative tasks while Dr. Aponte provided animal care. Her education and experience provide the perfect background for establishing and operating Pet Pak.

Pet Pak’s Organizational Structure

Pet Pak operates as a sole proprietorship. The organizational structure is simple.

Employees

Pet Pak requires one part-time employee to open, operate, and close the store on Sundays. The hours on Sunday are 10:00 A.M to 4:00 PM, a six-hour shift. Additional hours may be needed occasionally. The employee will report directly to Carmen Aponte, the owner.

Support Services

Dr. Vincent Aponte, DVM currently owns and operates Aponte Animal Clinic. The clinic was established five years ago with the assistance of Carmen Aponte. The clinic serves approximately 700 clients. Dr. Aponte will evaluate pet products before they are added to Pet Pak’s merchandise assortment.

Jennifer Martins, C.P.A. is the accountant for Pet Pak. She has 15 years of experience working with small businesses in Smallville and Metropolis.

Pet Pak’s Operations

Pet Pak is scheduled to open for business on March 1. Most vendors have agreed to supply merchandise at acceptable terms. Negotiations with additional vendors are in process. Additional funding will ensure that these vendors will work with us.

Before any product is selected to become part of Pet Pak’s merchandise assortment, it must be evaluated and approved by Dr. Vincent Aponte. This approach emphasizes the importance of quality and safety for all of Pet Pak’s products.

A single part-time employee is needed to operate the store on Sundays. An advertisement has been placed in the Smallville Press. Pet Pak has received 45 applications. An applicant will be hired as quickly as possible. The new employee will provide assistance in stocking the arriving merchandise.

Pet Pak’s Financial Overview

Pet Pak requires retail space, inventory, and computer equipment to operate. Carmen Aponte has contributed $75,000 of her own funds and Dr. Vincent Aponte has invested $25,000. These funds have been used to acquire a three-year lease for the retail space and initial expenses.

An additional $125,000 is needed until the business can support itself and earn a profit. Start-up costs include the following items.

|Item |Description |Value |

|Location: |Deposit & 3 months of lease |6,000 |

|Equipment |Computer & store equipment |5,000 |

|Site preparation |Fixtures, signage |7,000 |

|Deposits for utilities |Utility services |800 |

|Fees for professional services |Lawyer and accountant |4,500 |

|Business licenses and permits |Licenses and permits |250 |

|Advertising |Ad in Smallville Press & letters |450 |

|Initial inventory |Initial merchandise |60,000 |

|Total | |84,000 |

Operating expenses include items such as salaries for the owner and part-time assistant, Internet service, and insurance. Monthly operating expenses include the following items.

|Item |Description |Value |

|Rent |Monthly lease |1,500 |

|Maintenance |Budgeted |200 |

|Inventory |Estimated cost of goods |3,500 |

|Supplies |Office supplies |200 |

|Telephone |Telephone service |120 |

|Utilities |Electric, water, and waste |500 |

|Advertising |Ad in Smallville Press |75 |

|Insurance |Insurance coverage |250 |

|Salaries |One assistant |750 |

|Taxes |Estimated |1,200 |

|Professional services |Accountant and legal |400 |

|Internet service |Basic web site |50 |

|Total | |8,745 |

The owner will draw an annual salary of $30,000. Her salary will be paid in monthly installments of $2,500. With a loan of $125,000, Pet Pak can make payments of $700 per month.

Business Financing

In the conservative scenario reflected by the previous numbers, Pet Pak requires $225,000 to operate almost a year without an income. Projections expect Pet Pak to earn a profit in 9 months. In a more optimistic scenario requiring less cash outflow in expenses, Pet Pak will begin to earn a profit in 6 months. Review the attached financial projections.

Supporting Documents

The attached documents provide more detailed information. The supporting documents include the following items.

• Financial projections

• Licenses and permits

• Customer survey conducted by the Aponte Animal Clinic

• Letter to be sent to Aponte Animal Clinic’s customers

• Advertisement for the Smallville Press

• Lease agreement

• Information about Pet Pak’s major products

• Credit history for Carmen Aponte

• Resume for Carmen Aponte

• Resume for Dr. Vincent Aponte, D.V.M.

• Resume for Jennifer Martins, C.P.A.

• Employee handbook

• Customer policies

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download