This business plan is intended to secure a conventional business loan in the amount of $700,000-$800,000 from a financial institution to purchase the assets of Sportsuchtig. Johnson Sporting Goods, LLC, John and Lisa Johnson’s limited liability company, will acquire it. Sportsuchtig will continue to operate the business.
Sportsuchtig is a seller of quality sporting goods equipment. It specializes in selling equipment for baseball and softball, as well apparel and accessories from major manufacturers like Easton and Louisville Slugger, Worth, Mizuno and Miken. In 1986, the company opened its first retail store. It then launched an online sports store in 1996. The company currently operates with 10 employees out of a 7,400 square foot facility which houses the combined retail store, call center, office, and product warehouse. The company has achieved an average annual sales of $2.5million and a gross profit of 25% over the last three years. 52% of its sales came from the website while 48% were generated through the retail store.
In the last 3 years, Sportsuchtig has generated verifiable pre-tax income averaging $194,000 and total owner’s benefit averaging over $323,000. This business is strong and is well-positioned to accelerate growth. We believe the business can reach revenue levels of over $5 million in 5 years by implementing this business plan. The projections for sales growth are that they will grow at 20% per year in years 2-5, while being flat in the first. This forecast assumes that the company takes advantage of these key opportunities.
- Redesign, upgrading and marketing an Internet store.
- Relocation of the existing retail shop.
- Adding additional product lines for sports played in other seasons than baseball/softball.
- Creation of an outside sales team to gain a significant share of the team sales market.
- Optimized inventory purchasing, management, and tracking
We will be moving the business to the beginning of year 2, which should position us well for increasing retail sales starting in year 2. In the first six months, the website will be completely redesigned. The Web marketing strategy will also be updated to coincide with the launch of the new site. In each year 1 there will be at least one additional product participant segment. A manager for the outside sales team will be hired during year 1. However, ramp-up of this sales team is not planned before year 2.
John Johnson, owner, will oversee the operation as President/CEO. Johnson’s background in sports and technology, combined with his entrepreneurial experience make him the ideal leader for this sporting goods retail/internet venture. He spent over 20 years leading research, development and operations for high tech giants such as Lucent Technologies or ;Motorola Systems. He also served as Vice President and founder of a hightech startup. Mr. Johnson also founded and currently owns two other businesses, Johnson Enterprises, LLC and Johnson Investments, LLC. Johnson Enterprises, LLC designs, constructs, and sells custom game courts (basketball, volleyball, etc. ), synthetic putting greens, and sporting goods products. Mr. Johnson earned a Bachelor of Science Degree in Computer Science at Stone College in Boulder Colorado and a Masters of Business Administration degree from the University of Illinois.
1.1 Objectives
- Maintain or exceed in Year 1 the levels of sales ($2.5million), gross profit (25%), and Net Margin (12%) from the past two-years.
- Realize an annual sales growth rate of 20% in years 2-5, reaching over $5 million in sales by the end of year 5.
- Improve gross margins by 25% to 35% by year end
- Enhance net margins before the end 5.
- Upgrading and redesigning the Internet ecommerce store before the end of the first calendar year.
- By investing in aggressive Web optimization and marketing, you can increase your website traffic 50% and sales 20% in the first five years.
- Relocate the existing store to a prime spot in the area. This will improve the retail store’s position in the second year.
- Establish relationships with local nonprofits to help children in need build self-esteem through youth sports programs.
- You will run the business as a family-owned business that values honesty, integrity and fun.
1.2 Mission
Our customers are our best asset. We strive to be the leading supplier of sports equipment, with a focus on quality, price, reliability, and service. By treating our customers like their family and building a relationship with them, we can become the ‘family expert’ in sporting equipment.
1.3 Keys to Success
- The website can be upgraded to make it more professional and user-friendly, to offer incentives, features and promotions that will draw customers back to it repeatedly, and to optimize for maximum search engine results.
- You can relocate the retail store in question to a location that is more densely populated.
- Negotiate with major suppliers optimal agreements that will improve margins, reduce costs, and maximize the control of and turnover for our inventory.
- You can improve inventory turnover and tracking by implementing a computerized inventory system.
- Expand the product line by offering equipment for additional sports that are typically in demand during current Sportsuchtig slow seasons.
- A sales team outside that contacts schools, leagues and associations is created. They are known for their product expertise, top service, and high-quality customer service.
- Training employees about product features and how to offer family-oriented customer service and sales.
- Train an employee already working, or hire an outsider to become a store manager.
- Market and advertise in areas where your target customers can find out about our internet and retail stores.
- A reliable operations infrastructure is built that is ready for customers to use. It also prepares accurate billing and accounts, follows up on orders, manages the Web site and keeps a close eye on expenses.
- You can be an active participant in your local community by sponsoring local sports teams, leagues or tournaments.
- Ensure through daily management practices that the values of The Sportsuchtig mission are followed, so that a successful and growth-oriented business is developed and maintained.