Business Plan Competition June 4-5, 2015

Transcription

1 Business Plan Competition June 4-5, 2015 Prison Entrepreneurship Program P.O. Box Houston, TX (832) Printing donated by Jita Printing Jeff Offutt, Owner and PEP Class VIII Graduate

2 The All-in-one mover to make your life a whole lot smoother Business Plan June 2015 Owner & Founder

3 TABLE OF CONTENTS EXECUTIVE SUMMARY...1 LEADERSHIP...2 PRODUCT/SERVICE OFFERING...2 MARKET...2 COMPETITION...3 DIFFERENTIATION...3 MARKETING STRATEGY...3 VISION AND OBJECTIVES...4 FINANCIAL SUMMARY...7 FINANCING STRATEGY...7 RÉSUMÉ... ATTACHED FINANCIAL PROJECTIONS... ATTACHED

4 EXECUTIVE SUMMARY Management: Company Name: Industry: Owner investment - cash $ 20,000 Owner investment - equipment - Vehicle and/or equipment loan - Start up financing 20,000 Total start up costs: $ 40,000 Plan Purpose: Smooth Moves Relocating Services Moving Services Business advisors and funding Overview: In every way possible striving to help move forward the lives of honest working Americans by providing superior moving services and unprecedented customer satisfaction. Product/Service Offering: Smooth Moves is an affordable all-in-one moving company, offering residential moving services and relocating of larger items. Our four primary services are moving any items or belongings to your desired destination, disassembly and assembly of any electronics and furniture, dismounting and mounting of shelves and TV s, packing and unpacking services, and extensive cleaning. Market: In the United States in 2014, 35.9 Million people moved their home or business from one location to another due to occupational or other reasons. This is a $12.6 Billion industry in the United States and a $2.1 Billion market in the Dallas/Ft. Worth area. Every year the moving industry grows by 12%. Competition: There are several other moving services competing for business in Dallas/Fort Worth. Major local competitors include Two Men and a Truck, All my sons moving, and United Van Lines to name a few. Perhaps the most serious competition is the do-it-yourselfer who can rent transportation, purchase supplies and even employ temporary labor to move on their own. Differentiation: Smooth Moves guarantees that clients will be able to achieve all the tasks that moving a home requires all in one place. Smooth Moves differentiates from all competitors because we provide disassembly and reassembly for all furniture and electronic as well as dismounting and mounting of shelves and T.V.s. We will give every client a discount on boxes, bubble wrap, and packaging tape to aid in the moving process once booking the move is finalized. We also provide an extensive complimentary cleaning service that other companies do not provide which includes vacuuming, sweeping/mopping, and picking up trash at both locations. Marketing Strategy: Smooth Moves will use competitive pricing to ensure not only profit but customer satisfaction as well. Smooth Moves will be located in Ft. Worth Texas. Smooth Moves will operate our moving services through multiple pathways. We will post fliers at local colleges, apartment complexes and in target neighborhoods. Revenue Model and Financial Projections: Local Moving Packing Supplies Packing Services Per Unit Dollars Sales price $ % $ % $ % Non-owner labor cost (52.00) - - Other variable costs - (12.00) - Fin. stmt. gross profit % % % Owner labor value Pro forma gross profit $ % $ % $ % Year 1 total units sold Year one summary income statement: Sales: $ 125, % COGS 17,200 14% Gross profit 108,100 86% Overhead 53,300 43% Pretax income 54,800 44% Tax expense 13,700 11% Owner withdrawals 27,500 22% Net income $ 13,600 11% $60,000 $40,000 $20,000 $- $(20,000) Mon 1 Mon 2&3 Qtr 2 Qtr 3 Qtr 4 Revenue Net Profit (Loss) Cash Flow In (Out)

5 LEADERSHIP is the founder and day-to-day operator of. Mr. C. will be responsible for every aspect of the business including labor, advertising and creating customer success. Mr. C. has accumulated two years of moving and delivery services experience. During this time he has obtained the necessary skills and knowledge to ensure the success of a professional and competitive moving company. He also brings a total of five years in sales and customer service experience in various industries to aid in running a successful moving service. Mr. C. successfully earned his high school diploma in 2008 from Central High School in Keller, Texas. He has also received nine months of on-the-job training as a supply stock clerk. While incarcerated, Brent has completed Voyager, Overcomers and The Authentic Quest for Manhood life transformation programs. PRODUCT/SERVICE OFFERING Smooth Moves is an affordable all-in-one moving company, offering a wide array of moving services - from residential relocations to moving larger items from one area to another. Our four primary services are moving any items or belongings to your desired destination, assembly of any electronics and furniture as well as dismounting and mounting of shelves and TVs, packing and unpacking services, and extensive cleaning. Our residential moving services will make up 89% of our annual revenue, selling packing supplies will make up 9% and packing and unpacking will make up 2%. We will be open for business in the fall of Smooth Moves will take great care in moving anything you desire from point A to point B and also provide rearrangement of any furniture in your current home. Our packing and unpacking services will guarantee the safety of your possessions and we will also offer boxes, bubble wrap, and packing tape to support your moving process. Our extensive cleaning services will include vacuuming, trash removal, sweeping, mopping and glass cleaning. We are more than happy to aid you with assembly and installation of furniture, electronics, and mounting of any shelves or T.V. s anywhere in your home or business. Our moving services are unlike any other because we are a one stop shop moving company. We will move anything for you, pack and unpack for you, assemble anything you may need help with and also provide quality cleaning services. Smooth Moves will ensure the safety of your belongings and provide professional quality for an affordable price. As business develops, we plan to expand our services throughout the Dallas/Fort worth Metroplex and surrounding cities. MARKET In the United States in 2014, 35.9 Million people moved their home or business from one location to another due to occupational or other reasons. This is a $12.6 Billion 2

6 industry in the United States and a $2.1 Billion market in the Dallas/Ft. Worth area. Every year the moving industry grows by 12%. More citizens move in the summer than any other time of the year. If anyone wants to move at any other time of the year we will be able to accommodate them as well. There are dozens of local college campuses in Dallas/Fort Worth and every year at least 65,000 students move to and from campuses and are more than likely in need of moving services. COMPETITION There are several other moving services competing for business in Dallas/Fort Worth. Major local competitors are Two Men and a Truck, All my Sons moving and United Van Lines to name a few. Perhaps the most serious competition is the do-it-yourselfer who can rent transportation, purchase supplies and even employ temporary labor to move on their own. The barriers to entry into this industry are low, considering the relatively low start-up costs and overhead. However, obtaining licensing, insurance and certification pose a threat to some less serious market entrants. DIFFERENTIATION Smooth Moves guarantees that clients will be able to achieve all the tasks that moving a home or business requires all in one place. Smooth Moves differentiates from all competitors because we provide disassembly and reassembly for all furniture and electronics. We will give every client a discount on boxes, bubble wrap, and packaging tape to aid in the moving process once booking the move is finalized. We also provide an extensive complimentary cleaning service that other companies do not provide which includes vacuuming, sweeping/mopping, and picking up trash at both locations. To guarantee the safety of all our clients belongings from point A to point B, we offer a free downloadable app which is linked to a gps tracking device in all of our moving trucks which monitors the drivers speed, driving performance and location at all times during the move. We will always guarantee our services to satisfy our clients by always being on time, creating a relationship with our clients by offering service satisfaction surveys after each move and giving discounts to clients who refer family and friends to our moving services. MARKETING STRATEGY Price Smooth Moves will use competitive pricing to ensure not only profit, but customer satisfaction as well. Our Professional package starts at $100/hour and includes two professional movers, moving truck, disassembly/assembly of all electronics and furniture, dismounting/mounting of all shelves and T.V.s, and cleaning services. Our Gold package starts at a rate of $75/hour and includes two professional movers and a moving truck. Packing starts at $20/hour and there is a two hour minimum for each move. 3

7 Place Smooth Moves will be located in Ft. Worth Texas. There are multiple colleges and apartment complexes in the metroplex, making this a prime location for our services. To have an advantage over our competitors we offer professional electronics disassembly/assembly, mounting/dismounting of all shelves and T.V.s, and cleaning services along with our moving packages. The state of Texas requires all moving companies to have moving licenses to legally operate through the Department of Transportation as well as insurance. Promotion Smooth Moves will operate our moving services through multiple pathways. We will post fliers at local colleges, apartment complexes and in target neighborhoods. We will promote through social media websites such as Facebook are free to use. We will also be advertising at college fairs and giving discounts to clients who refer their friends and family to our business. Renting exhibit space at local college fairs is inexpensive and will bring great recognition from college students who will receive discounts for using our services if they are full-time students. VISION AND OBJECTIVES Two Months Before Starting Research/Advisory Research (in detail) startup costs (materials, equipment, space) Check city business requirements (filing, zoning, licenses, fees, etc.) Consider gaining employment with existing moving company to increase my knowledge of the industry Choose business name Finalize business plan Marketing Create marketing strategy (define target customers, best way to reach them) Develop marketing materials (business cards, fliers, brochures, website) Post ads on help wanted website Develop plan to assess marketing effectiveness Print marketing materials Develop sales script Write 100 objections and responses Practice sales script Set sales goals (Sales Metrics) Obtain graphics for personal truck and moving truck Register with Chamber of Commerce (Central listing of businesses, potential referrals, expos/conventions) Compliance 4

8 Other File DBA (county clerk, $16 for 10 years, provide more than one name) Get employer ID from IRS Check the Texas Comptroller web site for what sales are taxable Get Texas sales tax ID Open business checking account (why separate account) Obtain any permits/licenses from city, county, state or federal Obtain a phone (need telephone number for marketing materials) Acquire appropriate insurance (bonding, liability, car, etc.) Buy needed tools, vehicles, phones (dollies, straps, blankets, etc.) Obtain financing First Two Months After Starting Obtain first customer Assess marketing strategy effectiveness Write 200 more objections and responses Generate publicity First Year Make a sales goal of 280 customers and $125,000 Hire first employee Web site Be profitable for first year Expand marketing Expand equipment, truck, tools Develop plan for, philanthropy Establish retirement goals Update business plan Expanding product line Second Year Adjust strategies to meet demand Update sales goal Expand employees Implement volunteer program for employees Fifth Year Update sales goal Expand into other major cities Tenth Year Update sales goal 5

9 Philanthropy We at Smooth Moves plan to give two to three free moves per year. These free moves will be given to low income citizens who have been given a house from the Habitat for humanity organization and need their belongings moved into the new home. We will also help build these new homes with Habitat for Humanity at least twice a year. Our company will also partake in cancer research walks twice a year and donate towards the organization sponsoring the walk. To give back to the organization that helped make this possible we will give monthly donations to the Prison Entrepreneurship Program and provide discounted moving services to all PEP staff, participants and executives. Community Impact Smooth Moves will provide quality jobs with retirement plans for management positions. We will volunteer at local colleges to speak on developing entrepreneurial skills to students interested in starting their own business. We will sponsor a little league baseball or football team in the community. We will donate money each year to local schools to help pay for school supplies such as folders, pens, etc. 6

10 FINANCIAL SUMMARY revenue model 1 is based on selling the following three product/services: Local Moving at an average price of $400. This service has a direct labor cost of $52 and produces a gross profit of $348 for each unit sold. Materials include fuel. We project selling 280 of these in the first year for revenues of $112,000. Packing supplies at an average price of $50. This product has a material cost of $12 and produces a gross profit of $38 for each unit sold. Materials include boxes, tape and blankets. We project selling 225 of these in the first year for revenues of $11,300. Packing service at an average price of $25. This service has a produces a gross profit of $25 for each unit sold.. We project selling 88 of these in the first year for revenues of $2,200. This will generate more than $125,000 in first-year revenues with a net profit of more than $13,000. This is an 11% net margin after deducting $41,200 in total owner compensation ($27,500 cash withdrawals and $13,700 income taxes). Smooth Moves Relocating Service will have a positive cash flow in the second month of operations. FINANCING STRATEGY will start in Total start-up funding is $40,000. This amount will cover all marketing, supplies and other start-up costs. Brent will save $20,000 in 12 months of employment in the moving industry. The company will have an additional $20,000 in debt financing that will be repaid in 60 months at 15%. 1 The revenue model in the Executive Summary includes money paid for non-owner labor plus the economic value of the owner s labor (not necessarily cash paid). Initially, the business will be unincorporated and, as such, receives no tax deduction for money paid to the owner. A deduction for owner s labor is included in the Executive Summary so the reader can assess the pro forma gross profit of the products and/or services. Estimating this pro forma gross profit requires the PEP participant to value his time in calculating a realistic sales price for his company s services. The attached financial projections differ in that non-owner labor is included in cost of goods sold, and money withdrawn by the owner is shown as owner withdrawals after calculating the business s tax expense but before net income. 7

11 DBA Assumptions Used in Projected Income and Cash Flow Statements Year 1 Note 1 Business Organization and Taxation The business is a sole proprietorship and, accordingly, all taxes are the personal liability of the owner. The revenue model (note 4) includes a deduction for the owner's labor to mirror the cost structure of an incorporated business. This owner labor charge is deducted in calculating pro forma gross profit but is not included in the income statement presentation in arriving at taxable income. The income statement reports owner withdrawals after calculating tax expense and before net income. The income statement assumes a flat 25% federal tax rate (10% personal income tax and 15% self employment tax). Federal taxes are paid quarterly. Note 2 Accounting Method The financials assume that all revenues are collected in the month of sale and all expenses are paid in the month the obligation is incurred. The financial statements assume there will be no accounts receivable and no accounts payable. Note 3 Start-up costs The projected financials assume the business will secure initial financing and pay start-up expenses in month 1. Sales and normal operating activities will begin in month 2. Paid or contributed in Month 1 marketing, business cards, fliers 5,000 cell phone purchase car/truck lease down payment permits 1,000 supplies, office & misc. 3,000 legal 3,000 Cash needed for start-up expenses 12,000 Paid or contributed in Month 1 Equipment Financing Depreciable Assets company car, truck or van - company trailer - computer, printer, fax 2,000 2, building/office deposit N/A N/A beginning cash balance 26,000 N/A N/A Cash needed for start-up assets 28,000-2, assumed life (months) 33 monthly depreciation Total start up cost 40,000 Funding sources Cash owner will contribute 20,000 Value of assets owner currently owns and will contribute to the company Total owner contribution 20,000 Vehicle loan and other equipment debt (see note 5 for financing) - Start-up financing owner needs (see note 5 for financing) 20,000 Total start up cost 40,000

12 DBA Assumptions Used in Projected Income and Cash Flow Statements Year 1 Note 4 Revenue Model Product name Product description Product 1 Product 2 Product 3 Local Moving Packing Supplies Packing Services Within DFW metroplex. 2 hour minimum Boxes, tape, bubble wrap, blankets Packing/Unpacking services Price per unit % % % Cost of one unit hours rate hours rate hours rate Non-owner payroll exp % - 0% - 0% Non-owner payroll tax % - 0% - 0% cost 1 description fuel 0% supplies % 0% Total variable costs % % - 0% 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 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Year Local Moving sold Packing Supplies sold Packing Services sold total revenue 8,950 8,950 8,950 11,200 11,200 11,200 11,200 13,450 13,450 13,450 13, ,450 total cost of sales 1,220 1,220 1,220 1,540 1,540 1,540 1,540 1,860 1,860 1,860 1,860 17,260 total income statement gross profit (excludes owner labor) 7,730 7,730 7,730 9,660 9,660 9,660 9,660 11,590 11,590 11,590 11, ,190 Owner's labor hours (time spent directly related to sales) Note 5 Financing Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Year Start-up financing, see Note 3 Amount borrowed 20,000 principal, begin ,000 19,774 19,546 19,314 19,080 18,842 Interest rate 15% interest expense , Payback period (months) 60 principal payment , Grace period (months) 6 principal, end ,774 19,546 19,314 19,080 18,842 18,602 Monthly payment 476 Note 6 Payroll - nondirect Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Year # of employees average hours each employee worked per month average per hour wage salary expense 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 15,840

13 DBA Projected Income and Cash Flow Statements Year 1 Assumptions Start-up Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Year % of Total Revenue Revenue 2 Local Moving 4-8,000 8,000 8,000 10,000 10,000 10,000 10,000 12,000 12,000 12,000 12, ,000 89% Packing Supplies ,000 1,000 1,000 1,000 1,250 1,250 1,250 1,250 11,250 9% Packing Services ,200 2% Total revenue - 8,950 8,950 8,950 11,200 11,200 11,200 11,200 13,450 13,450 13,450 13, , % Cost of Goods Sold 2 Local Moving 4-1,040 1,040 1,040 1,300 1,300 1,300 1,300 1,560 1,560 1,560 1,560 14,560 12% Packing Supplies ,700 2% Total COGS - 1,220 1,220 1,220 1,540 1,540 1,540 1,540 1,860 1,860 1,860 1,860 17,260 14% Gross profit - 7,730 7,730 7,730 9,660 9,660 9,660 9,660 11,590 11,590 11,590 11, ,190 86% Expenses 2 Auto or truck lease - - 0% Depreciation % Gasoline & fuels ,100 1% Insurance - bonding ,500 4% Insurance - vehicle ,300 3% Interest - equip & start up ,457 1% Marketing 5, , ,000 10% Office - rent - - 0% Office - insurance - - 0% Office - telephone ,100 1% Office - utilities ,200 2% Payroll - not owner and not 6-1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 1,440 15,840 13% in COGS Payroll taxes (9%) ,426 1% Permits 1,000 1,000 1% Supplies 3,000 3,000 2% Tax service - - 0% Telephone - cellular ,100 1% Start-up expenses 3, ,000 2% Total expenses 12,000 3,403 3,403 3,403 3,403 3,403 6,153 3,650 3,647 3,644 3,641 3,638 53,389 43% Taxable profit (loss) 1 (12,000) 4,327 4,327 4,327 6,257 6,257 3,507 6,010 7,943 7,946 7,949 7,952 54,801 44% Tax (expense) benefit 1 - (3,374) (4,365) (5,961) (13,700) -11% Owner's withdrawals 1 - (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (2,500) (27,500) -22% Net profit (loss) (12,000) 1,827 1,827 1,827 3, ,007 3,510 1,078 5,446 5,449 (510) 13,601 11% Depreciation Equipment purchases 3 (2,000) (2,000) Principal, equipment loan Repay debt financing 5 20, (226) (229) (231) (234) (237) (240) 18,602 Owner contribution 3 20, ,000 Net cash flow 26,000 1,860 1,860 1,860 3, , ,245 5,245 (717) 50,569 Cash, period start - 26,000 27,860 29,721 31,581 35,372 35,788 36,603 39,917 40,797 46,042 51,286 - Cash, period end 26,000 27,860 29,721 31,581 35,372 35,788 36,603 39,917 40,797 46,042 51,286 50,569 50,569 The accompanying assumptions are an integral part of this financial statement.