1 Sample Business Plan: Weddings With Panache Table of Contents 1.0 Executive Summary 1.1 Objectives 1.2 Mission 1.3 Keys to Success 2.0 Company Summary 2.1 Company Ownership 2.2 Start-up Summary 2.3 Company Locations and Facilities 3.0 Services 4.0 Market Analysis Summary 4.1 Market Segmentation 4.2 Target Market Segment Strategy Market Needs 4.3 Competitive Analysis Local Competitors 5.0 Strategy and Implementation Summary 5.1 Competitive Edge 5.2 Sales Strategy 6.0 Management Summary 6.1 Personnel Plan 7.0 Financial Plan 7.1 Break-even Analysis 7.2 Projected Profit and Loss 7.3 Projected Cash Flow 8.0 Summary / Conclusions 1.0 Executive Summary Weddings With Panache (WWP) is a full service company that provides consulting services for weddings, commitment ceremonies and anniversaries. Our consultants are experienced and dedicated professionals with many years of event planning experience. WWP is unique because we give our clients our undivided attention. We listen to their needs and work with them to create the event of their dreams; consequently, our clients' wishes become our commands.
2 Whether our client wants a western, tropical, Las Vegas or more traditional type of wedding, we can help. We arrange weddings, honeymoons, receptions, anniversary consultations, budget planning, answers to etiquette questions, as well as full-service referrals to florists, hair stylists, entertainers and musicians. 1.1 Objectives Whether this is our client's first wedding, a renewal of their vows or an anniversary celebration, we want their event to be both a pleasurable and a memorable experience. Therefore, we offer a host of packages and services specifically tailored to the needs of each couple. We are confident that this business venture will be a success. By our second year, we estimate that our net income will increase more than 10%. 1.2 Mission Weddings With Panache (WWP) is a full service company that provides consulting services for weddings, commitment ceremonies and anniversaries. Our consultants are experienced and dedicated professionals with many years of event planning experience. WWP is unique because we give our clients our undivided attention. We listen to their needs and work with them to create the event of their dreams; consequently, our clients' wishes become our commands. Whether our client wants a western, tropical, Las Vegas or more traditional type of wedding, we can help. We arrange weddings, honeymoons, receptions, anniversary consultations, budget planning, answers to etiquette questions, as well as full-service referrals to florists, hair stylists, entertainers and musicians. 1.3 Keys to Success Our keys to success: 1. We will service our clients' needs promptly and efficiently. 2. We will maintain excellent working relationships with vendors, including florists, hair salons and bridal shops. 3. We will maintain a professional image in our industry and community 2.0 Company Summary Weddings With Panache is a start-up company that provides wedding, commitment ceremony, and anniversary consulting services to brides, grooms and other family members. We are a fullservice bridal consulting group whose goal is to put the "fun" back into planning a wedding. From our experience, too many people become overly stressed and frustrated when planning these wonderful events. We are experienced consultants who will use our expertise to help create memorable and stress-free events for our clients. By doing this, our clients can sit back and enjoy their event. The result? We create weddings that are suited to the couple's unique style: a true expression of their relationship and individuality as a couple.
3 2.1 Company Ownership This business will start out as a simple proprietorship, owned by its founders, Angelina and Aidan Hyatt. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suit the future business needs. 2.2 Start-up Summary The company founders, Angelina and Aidan Hyatt, will handle day-to-day operations of the plan and will work collaboratively to ensure that this business venture is a success. We estimate that our start-up costs will be $3,000 (including legal costs, logo design, advertising, direct mail and related expenses). An additional $5,000 will be required in the bank account as an operating capital for the first two months of operation. The start-up costs are to be financed in equal portions by the owners' personal funds (i.e., Angelina and Aidan Hyatt are investing $4,000 each). Start-up Expenses Legal $200 Stationery etc. $450 Brochures $450 Insurance $300 Research and development $200 Expensed equipment $900 Other $500 Total Start-up Expenses $3,000 Start-up Assets Needed Cash Balance on Starting Date $5,000 Other Current Assets $0 Total Current Assets $5,000 Long-term Assets $0 Total Assets $5,000 Total Requirements $8,000 Funding Angelina Hyatt $4,000 Aidan Hyatt $4,000
4 Total Investment $8,000 Current Liabilities Accounts Payable $0 Current Borrowing $0 Other Current Liabilities $0 Current Liabilities $0 Long-term Liabilities $0 Total Liabilities $0 Loss at Start-up ($3,000) Total Capital $5,000 Total Capital and Liabilities $5, Company Locations and Facilities Initially this will be a home-based business; however, by 2005, we intend to expand our facilities into a well-equipped and operational office. 3.0 Services We are a full-service wedding consultant group and provide the following services: etiquette advice, event scheduling, discounted invitations and products, vendor confirmation, rehearsal attendance, supervision of both ceremony and reception setup and budget planning. 4.0 Market Analysis Summary Nearly $35 billion are spent every year on weddings and receptions in the United States, making professional wedding consultants an essential commodity. Weddings With Panache hopes to tap into all aspects of that market by offering a variety of packages to suit every client's needs (whether large and small, upscale or low-key). Considering the size of the industry, just about everyone we meet is a potential client. However, we mostly advertise to prospective brides, grooms and their family members. 4.1 Market Segmentation Although the flash and excitement of impending nuptials can be intoxicating, it can also be overwhelming. Therefore, we primarily market our services to the people who need them most-- brides and grooms. In 1997, 2.4 million marriages took place in the United States. According to the Encarta Encyclopedia, the current US marriage rate of nine marriages per 1,000 people is still the highest rate among the industrialized countries and is expected to remain at the same level in
5 the near future. In the Madison, WI area, where Weddings With Panache plans to operate their business, over 1,500 marriages are registered each year, which creates a sizable market potential. Besides the wedding arrangements, which Weddings With Panache believe to be their major client assignments, other events the company will provide services to include corporate retreats, etiquette training, etc. This customer segment is estimated to have the annual volume of 1,000 orders in the Madison, WI area. Market Analysis Potential Customers Brides & Grooms Family Members Growth CAGR 5% 1,500 1,575 1,654 1,737 1, % 5% 5,000 5,250 5,513 5,789 6, % Other 5% 1,000 1,050 1,103 1,158 1, % Total 5% 7,500 7,875 8,270 8,684 9, % 4.2 Target Market Segment Strategy Weddings With Panache will offer its services mostly to the brides and grooms, as well as to their family members. The company will position itself as an experienced provider of wedding planning services. Unlike most of its competitors, WWP will offer a full range of services and thus provide the convenience of one-stop shopping for its clients. This will significantly reduce the customers' time and efforts preparing for such an important event as a wedding. Moreover, by utilizing numerous supplier contacts that the company owners have established, Weddings With Panache will be able to pass on its sizable cost savings to its customers Market Needs The market needs for wedding planning services are strongly shaped by the customers' desire to have a perfectly planned and executed wedding ceremony. Although both major customer segments (brides and grooms and family members) plan and budget for the wedding ceremony a year or more in advance, they often realize that they cannot make all the necessary preparations by themselves in a cost effective manner. Strongly affected by the established social values, such customers seek professional advice to ensure that all the important aspects of the wedding ceremony meet or exceed perceived expectations.
6 4.3 Competitive Analysis The wedding services market in Madison is fragmented with the overwhelming majority of the incumbents offering only a limited line of services. There are numerous florists, hair stylists, and caterers to choose from, yet few companies provide the full range of services associated with the wedding planning and execution Local Competitors Competitive analysis conducted by the company owners has shown that 20 companies currently offer some sort of wedding planning services in the Madison area. However, the majority of the incumbent competitors offer only a limited line of services like catering, flower arrangements or gifts. In fact, of these 25 competitors, only three offered a range of services comparable with what Weddings With Panache plans to offer. The following is the list of the major competitors with a brief description of their services: Gracious Moments offers ceremony preparation, rehearsing and execution services. Miraculous Memories, Inc. provides flower and catering arrangements and wedding consulting services. Myers Wedding Consultants offers its clients entertaining, catering, floral design and hair styling services. Our market research shows that customers anticipate the complete wedding consulting services to be expensive and they budget accordingly. In fact, lower prices are very often associated with poor service quality. By aggregating a complete range of wedding services under one roof, Weddings With Panache will offer its customers the ease of one-stop shopping. 5.0 Strategy and Implementation Summary Our strategy is simple; we intend to provide our customers with a wide range of services that are custom-tailored to their individual needs. Therefore, whether they require a complete package, or simply consulting on a particular service, we can help. 5.1 Competitive Edge By aggregating a complete range of wedding services under one roof, Weddings With Panache will offer its customers the ease of one-stop shopping. The company will leverage its owners' expertise in planning such events to competitively position itself as a premier provider of wedding services. Both owners have very strong communication skills that will help develop the 'buzz' about the high quality of the services offered by Weddings With Panache. 5.2 Sales Strategy The company's sales strategy will be based on the following elements:
7 1. Advertising in the Yellow Pages - two inch by three inch ads describing the services will be placed in the local Yellow Pages. 2. Placing advertisements in the local press, including the Chicago Sun Times, the Madison Weekly, the Wisconsin Daily News. 3. Developing affiliate relationships with other service providers (florists, hair stylists, caterers) who will receive a percentage of sales to the referred customers. 4. Word-of-mouth referrals - generating sales leads in the local community through customer referrals. Sales Forecast Sales FY 2001 FY 2002 FY 2003 Brides & Grooms $54,200 $64,040 $71,544 Family Members $25,800 $30,960 $34,056 Other $15,300 $18,360 $20,196 Total Sales $95,300 $114,360 $125,796 Direct Cost of Sales FY 2001 FY 2002 FY 2003 Row 1 $0 $0 $0 Row 1 $0 $0 $0 Other $0 $0 $0 Subtotal Direct Cost of Sales $0 $0 $0 6.0 Management Summary Our wedding consultants are Angelina and Aidan Hyatt, who have collaboratively planned and serviced over 200 weddings and receptions. Both in theory and in practice, they are knowledgeable about all areas of planning, decorating and budgeting. Angelina has a BS in Communications and has been a wedding consultant for eight years. Like many in her field, she became interested in providing consultant services when she successfully planned her first five weddings for family and friends. Since then, Angelina has received extensive training in wedding planning, including her certification from the National Association of Wedding Consultants and Professional Wedding Planners. Aidan has a Bachelor's Degree in Business Administration, and, like Angelina, he became interested in becoming a consultant when he successfully planned a large family wedding. Aidan received his certification from the National Association of Wedding Consultants and has been a
8 wedding planner for three years. Aidan enjoys all aspects of planning traditional and nontraditional weddings. 6.1 Personnel Plan Initially, Weddings By Panache's personnel will include only the two owners, both of whom will be working full-time. As the personnel plan shows, we expect to hire an additional wedding consultant in the next year This person will work full time, but will not be included in the management decisions. Personnel Plan FY 2001 FY 2002 FY 2003 Name or Title $0 $0 $0 Other $0 $0 $0 Total People Total Payroll $0 $0 $0 7.0 Financial Plan The following subtopics represent the financial plan of Weddings By Panache. General Assumptions FY 2001 FY 2002 FY 2003 Plan Month Current Interest Rate 10.00% 10.00% 10.00% Long-Term Interest Rate 10.00% 10.00% 10.00% Tax Rate 25.42% 25.00% 25.42% Sales on Credit 60.00% 60.00% 60.00% Other Break-even Analysis The following table and chart summarize our break-even analysis. Break-Even Analysis:
9 Monthly Units Break-Even 7 Monthly Revenue Break-Even $4,000 Assumptions: Average Per-Unit Revenue $ Average Per-Unit Variable Cost $0.00 Estiamted Monthly Fixed Cost $4, Projected Profit and Loss Our projected profit and loss is shown in the following table. Pro Forma Profit & Loss FY 2001 FY 2002 FY 2003 Sales $95,300 $114,360 $125,796 Direct Cost of Sales $0 $0 $0 Other $0 $0 $0 Total Cost of Sales $0 $0 $0 Gross Margin $95,300 $114,360 $125,796 Gross Margin % 100% 100% 100% Expenses: Payroll $0 $0 $0 Sales & Marketing & Other Expenses $4,550 $1,000 $2,000 Depreciation $0 $0 $0 Leased Equipment $0 $0 $0 Utilities $0 $0 $0 Rent $0 $0 $0 Payroll Taxes $0 $0 $0 Other $0 $0 $0 Total Operating Expenses $4,550 $1,000 $2,000
10 Profit Before Interest and Taxes $90,750 $113,360 $123,796 Interest Expense $0 $0 $0 Taxes Incurred $22,918 $28,340 $31,465 Net Profit $67,833 $85,020 $92,331 Net Profit/Sales 71.18% 74.34% 73.40% 7.3 Projected Cash Flow The following chart and table show our cash flow projections. Pro Forma Cash Flow FY 2001 FY 2002 FY 2003 Cash Received Cash from Operations Cash Sales $38,120 $45,744 $50,318 Cash from Receivables $51,322 $67,444 $74,775 Subtotal Cash from Operations $89,442 $113,188 $125,093 Additional Cash Received: Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $89,442 $113,188 $125,093 Expenditures FY 2001 FY 2002 FY 2003 Expenditures from Operations: Cash Spending $1,396 $1,029 $1,150 Payment of Accounts Payable $24,951 $28,606 $32,218
11 Subtotal Spent on Operations $26,347 $29,635 $33,368 Additional Cash Spent: Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $26,347 $29,635 $33,368 Net Cash Flow $63,095 $83,554 $91,725 Cash Balance $68,095 $151,648 $243, Summary / Conclusions With our extensive experience in the field and our commitment to providing one-stop shopping for harried brides and grooms, we are certain that we will capture the necessary market share to achieve our financial goals. Armed with a competitive spirit and a genuine love for our work, we are eager to serve the Madison, WI bridal market for many years to come.
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