The Industry Name and describe the market or industry that you will work within in other words, the chosen sandbox where you will play. For market or industry descriptions see the North American Industry Classification System (NAICS) at www.census.gov/naics or industries at a glance at http://www.bls.gov/bls/industry.htm Talk about any trends and changes in the industry. Talk about whether the industry is growing and, if so, by how much.
The Product Talk about the product or service that you will sell. Talk about what sets the product or service apart from what is currently being sold to customers. Talk about any ways you can protect the product or service from being easily copied by the competition. Present any product pictures, drawings, or renderings you might have (on additional slides if necessary).
The Market The idea for a market study is to tell the story of the market in numbers starting with the big picture and then narrowing down the data to a more detailed view. Use as many slides as you need and don t clutter the information. Talk specifically about where your customers are located. Are they within a city, county, state, region, nation, or international place? Maps are good to use here if it makes sense. Talk about the numbers of customers in the market and possibly even what they spend on your kind of products and services. Present any community profiles for these places. The Census Bureau is a great place to find such information at www.census.gov If you are targeting business customers look at the Economic Census at http://www.census.gov/econ/census02/ for help.
The Targeted Customers Talk about your targeted customers. Remember, you can segment customers by type, buying behavior, location, and so on. Describe who they are by discussing some of the following things: (use multiple slides if needed) Demographics (characteristics they share in common) Buying Behavior (how and why they buy the product) Size (numbers of them / dollars they spend) Projected Sales Trends (growth / opportunities)
Target Market Strategy For your targeted customers, talk about how you will customize your marketing efforts to fit their needs. Remember, if this group of customers is really unique then something about your strategy must be different. Talk about The Message: What slogan or positioning statement will you use for this target market? The Pricing: Will the pricing have to be different for this type of customer? If so, what price will you charge? Product Customization: Will the product or service have to be customized for this customer? Distribution: Will the product get to this customer?
Target Market Sales Approach Talk about your specific sales and promotional ideas for this target market which might include: Contact Sphere: What other businesses or professions might naturally refer this group of customers to your business? Advertising: What specific types of media will you use and at what cost? Public Relations: What kinds of media relations, press releases, and events might you use to reach this group of customers? Personal Selling: Do you require a sales force to reach this group of customers? If so, how many and at what cost? Sales Promotions: What kinds of sales tools might you use? Discounts, coupons, loyalty programs?
Target Market Descriptions Description Target Market #1 Target Market #2 Target Market #3 Name Local Market Commuting Workers & Tourists Description People and households within 7 miles of the restaurant Demographics Consumers ages 21 to 54 / $54,000 average household income Buying Behavior Frequent but small purchases (5 times per year at about $9.00 per patron) Size (numbers/dollars) 58,600 residents / 20,000 households / $58 million local market for restaurant sales People migrating into Bartholomew County for work or tourism Workers and Tourists ages 21 to 54 Infrequent but larger purchases (1 time but spends upward of $12.00 per patron) 9,000 daily commuters / 28,000 annual tourists Commercial Events Commercial business in Bartholomew County that need catering event services Businesses from 20 to 300 employees Infrequent but very large purchases (2 events per year spending $600.00 per event) 400 businesses Projected Sales $400,000 $150,000 $100,000 Trends slow to moderate growth / spending less on meals away from home on average Good growth / new arts theatre nearby should improve traffic Excellent growth in company numbers and employment trends
Target Market Strategies Strategy Target Market #1 Target Market #2 Target Market #3 Positioning Message The Gourmet Restaurant Where You Eat With Your Hands Gourmet Burritos Fast Big Burritos For Big Crowds Pricing Entrees between $4 and $6 Entrees between $4 and $16 Per head range from $8 to $12 Product Customization Lunch time speed is largest consideration Banquet style service Distribution At retail location At retail location On-site catering set-up and service Contact Sphere Visitors center, community development, tourism bureau, hotel concierges Chamber of commerce, HR managers, event planners, public relations managers Advertising Newspaper, yellow pages, specialty publications, website Hotel brochures, tourism directory, billboards, restaurant guide Direct mail, business section of newspaper Public Relations Annual 5K charity run for diabetes assn. Personal Selling Part-time banquet sales coordinator Sales Promotions Discount coupons, samples Hotel referral fees 15% off first event promotion
Price Doctors Special Equipment Number of Treatments Availability Speed of Treatment Convenient Locations (pagers) Competitive Value Curve 100 HIGH LEVEL 75 50 25 0 LOW LEVEL Minute Clinic Typical Doctors Office Hospital
Competitive Analysis COMPANY WE CAN DO, THEY CAN T WE CAN T DO, THEY CAN Competitor X Competitor Y Competitor Z
The Marketing Schedule Media Annual Cost Yellow Pages (South Central Edition) Category: Restaurants, Restaurant Guide $3,600.00 Newspaper (The Republic: Circulation 28,000) Ad Design Costs $800.00 Media Costs (24 ads @ $328) $7800.00 Direct Mail (Brochures and Special Occasions) Distribution (5,000 @ $.50 per piece @ $.27 postage) $3,850.00 Radio (QMIX 103 / Adult Contemporary & WTIU/NPR) Media Costs (600 :30 second ads @ $6.20 per spot) $3,720.00 Total Annual Advertising and Media Costs $19,770.00
The Location Talk about where you will be located. If you are a retailer or a service business where access and visibility is important to the customer, talk about your proposed location. Provide the address and talk about the accessibility, the visibility, and the costs. Talk about the numbers and types of customers that are located near your location. These numbers are called ring studies because they detail the number of customers in 1,3 and 5 mile rings from your location. See www.easidemographics.com for free ring reports of your location. Talk about any commuting and traffic patterns around the location. Check with your state s department of transportation for these statistics.
Legal Structure Comparison Characteristics Sole Proprietorship General Partnership C Corporation S Corporation Limited Liability Company Formation No state filing required Agreement between two or more parties. No state filing required State filing required State filing required State filing required Duration of Existence Dissolved if sole proprietor ceases doing business or dies Dissolves upon death or withdrawal of a partner unless safeguards are specified in a partnership agreement Perpetual Perpetual Dependent on the requirements imposed by the state of formation Liability Sole proprietor has unlimited liability Partners have unlimited liability Shareholders are typically not personably liable for the debts of the corporation Shareholders are typically not personally liable for the debts of the corporation Members are not typically liable for the debts of the LLC Operational Requirements Relatively few legal requirements Relatively few legal requirements Board of directors, officers, annual meetings, and annual reporting required Board of directors, officers, annual meetings, and annual reporting required Some formal requirements but less formal than corporations Management Sole proprietor has full control of management and operations Typically each partner has an equal voice, unless otherwise arranged Managed by the directors, who are elected by the shareholders Managed by the directors, who are elected by the shareholders Members have an operating agreement that outlines management Taxation Not a taxable entity. Sole proprietor pays all taxes Not a taxable entity. Each partner pays tax on his/her share of income and can deduct losses against other sources of income Taxed at the entity level. If dividends are distributed to shareholders, dividends are also taxed at the individual level No tax at the entity level. Income/loss is passed through to the shareholders If properly structured there is no tax at the entity level. Income/loss is passed through to members Pass Through Income/Loss Yes Yes No Yes Yes Double Taxation No No Yes, if income is distributed to shareholders in the form of dividends No No Cost of Creation None None State filing fee required State filing fee required State filing fee required Raising Capital Often difficult unless individual contributes funds Contributions can be made from partners, and more partners can be added Shares of stock are sold to raise capital Shares of stock are sold to raise capital Possible to sell interests, though subject to operating agreement restrictions Transferability of Interest No No Shares of stock are easily transferred Yes, but must observe IRS regulations on who can own stock Possibly, depending on restrictions outlined in the operating agreement
The Legal Structure Talk about the legal structure you have chosen for the business. See the preceding chart for help. Talk about why the structure was chosen in other words, what advantages does the structure provide? A sample chart like the one below might be helpful to show the ownership structure of the business: Owner Shares Percent Owned Jack Smith 1,000 50% Loretta Johnson 500 25% Equity Investors 500 25%
Risk Management Talk about the different kinds of insurance you will need and what the cost of such coverage will be. In general there are three basic categories of insurance: Property: covers building and content losses Liability: gives you legal protection People: provides health, worker s comp, and lost income protection
The Core Scores Talk about what things you need to measure to be successful. These measures might be leading indicators of such things as customers, growth, innovation, internal operations, or financial performance. Example: The Chamber of Commerce will measure five metrics in determining our success: annual member engagement, member retention, net member growth, market penetration, and employee engagement. Example: For our restaurant to be successful, we must closely measure four activities: reservations and table turns, food costs, staff turn-over rates, and total staffing costs.
Required Start-Up Funds Item Amount Fixed Assets -Building $1,000 -Land $1,000 -Initial Inventory $1,000 -Equipment $1,000 -Furniture and Fixtures $1,000 -Vehicles $1,000 Working Capital -Salaries and Wages $1,000 -Insurance Premiums $1,000 -Leasehold Improvements $1,000 -Rent and Utility Deposits $1,000 -Advertising and Promotions $1,000 -Legal and Accounting Fees $1,000 -Supplies $1,000 -Cash on Hand $1,000 Totals $15,000
Capital Strategy Total Amount Required $907,900-4 Investors ($50,000 each will get 25% share of company) $200,000 -Commercial Bank Loan (Real Estate & 80% Building) $684,000 -Owners $23,900 Loan Payment Amounts -Principal Amount Borrowed $684,000 -Projected Interest Rate 7.25% -Term In Months 240 Total Monthly Loan Payment $5,406.17