Student ID 000942438 Platt Business Capstone Business plan Version page 1

The Gem Miner Business Plan

Matthew J Platt

Owner/CEO
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A. Executive Summary.............................................................................................................................................4

A1. Company Identification.......................................................................................................................................4

A2. Mission of the Company......................................................................................................................................4

A3. Business Goals.....................................................................................................................................................4

A4. Keys to Success...................................................................................................................................................5

B. Company Summary.............................................................................................................................................6

B1. Industry History...................................................................................................................................................6

B2. Legal Form of Ownership....................................................................................................................................6

B3. Location and Facilities.........................................................................................................................................6

B4. Management Structure.........................................................................................................................................7

B5. Products and Services..........................................................................................................................................8

C. Market Analysis...................................................................................................................................................9

C1. Target Market......................................................................................................................................................9

C2. Industry Analysis................................................................................................................................................9

C3. SWOT Analysis................................................................................................................................................10

Strengths......................................................................................................................................................................11

D. Market Strategy.....................................................................................................................................................12

D1. 4Ps.....................................................................................................................................................................12

D2. Price List...........................................................................................................................................................14

D3. Promotional Strategy........................................................................................................................................14

D4. Sales Forecast...................................................................................................................................................15

E. Implementation Strategy.......................................................................................................................................17

E1. Overall Strategy.................................................................................................................................................17

E2. Monitoring Plan.................................................................................................................................................18

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F. Financial Statements and Projections..................................................................................................................20

G. Financial Report....................................................................................................................................................21

G1. Financial Projections.........................................................................................................................................21

G2. Financial Position..............................................................................................................................................22

G3. Estimated Capital/Investment Needs.................................................................................................................22

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A. Executive Summary

A1. Company Identification:

This is to serve as a business plan for a new, innovative, and multi-channel retailer of

rocks, crystals, and jewelry related items. I say multi-channel because after careful research we

have determined that it is best to not be limited in how we will be selling to our customers. We

will be launching the business on April 1, 2020

We are The Gem Miner, a retailer based in Philadelphia, PA. We have chosen

Philadelphia for our start-up location due to the population density of the east coast, which

additionally allows for greater expansion possibilities within a short distance of our home base.

A2. Mission of the Company:

Mission Statement: The mission of The Gem Miner is to provide a unique product while

providing the educational knowledge as part of the sale

A3. Business Goals:

 We want to be able to reach our customers no matter how they shop

o The Philadelphia area has many fairs and street festivals which present an

opportunity for us to sell to customers, additionally we will have a permanent

physical location at a regional shopping mall, as well as an extensive online store.

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 We want to be able to educate our customers on our products.

o In our research, we have found that we appeal to both collectors of rocks, as well

as people who are into the healing aspect. While these are two different customer

types, our goal is to be able to appeal to both.

A4. Keys to Success:

 Have an employee starting wage of $15/hr.

o The discussion in the country is of creating higher wages. We intend to lead on

this. Additionally, we feel it is trending towards becoming law, so taking this

action now, prevents us from having to make fundamental changes at a later date.

 Sell at a price point that appeals to everyone.

o Rocks, and crystals come in a variety of sizes, and therefore we will be able to

offer items at lower price points for kids, as well as larger pieces at higher points.

 Provide the best possible customer service.

o Since part of our plan is to provide the educational aspect as part of the sale, then

we need to create lifetime customers.

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B. Company Summary

B1. Industry History:

The first street vendors, or “mobile vendors” as I like to refer to them showed up on the streets of

New York in the late 1800’s. Fast forward another 75 years and you get to the creation of the

large indoor mall. Now, of course we are seeing a dynamic shift towards online selling. The Gem

Miner will utilize all 3 of these modes of selling in order to reach the most customers possible.

B2. Legal Form of Ownership:

The Gem Miner will be a Limited Liability Company. This will help protect the owners from

liability regarding the business, as well as numerous tax advantages and an easier corporate

structure to maintain.

B3. Location and Facilities:

We will operate a 3,000 sq. ft. facility to be located within a 15-mile radius of Philadelphia, PA.

This facility will house our corporate offices, in addition to providing warehousing space to store

inventory that will be pulled when attending a street fair, shipping to one of our retail stores, and

being able to fulfill online orders. This facility will have a loading dock for semi-trucks to be

able to deliver merchandise to the warehouse.

For our street fair vending opportunities, we will have a company van to transport

supplies and product from our warehouse. Additional materials needed will be our 10’X10’ pop

up tent, and related signage, display materials, and other needed items.

Our mall location will be no larger than 700 sq. ft. and contain several glass display

cases, as well as other display items necessary to conduct retail sales.

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B4. Management Structure:

The Gem Miner will operate under a team-based management structure.

 CEO

o Will oversee all operations as well as making strategic decisions regarding the

company

 Warehouse Manager

o Will oversee incoming freight and outgoing product to stores, and customer

fulfillment.

 Retail Manager

o Will oversee all aspects of the retail store including employees and selling. Will

assist on creating promotional displays and sales regarding the retail store.

 Mobile Selling Manager

o Will oversee aspects regarding the sales at fairs and festivals including staffing,

helping to select which events to sell at, and product selection.

 Office Manager

o Responsible for payroll, basic accounting, human resource, and other needs.

 Departments to be contracted out

o Legal

o Marketing

o Major Accounting work

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B5. Products and Services:

The Gem Miner will be offering for retail sale various rock, gemstone, and

crystal products. This will include rough (natural) pieces, finished (decorative)

pieces, and jewelry items including rings, necklaces, bracelets, etc. In this mix of

products, we will cover a wide range of price points ranging from 25 cents

upwards to a maximum of $1,000. We will provide an extended warranty option

on all jewelry items, in addition to offering minimal repair/exchange service.

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C. Market Analysis

C1. Target Market:

The Gem Miner has primarily two target customer types:

 Rockhounds (People who collect rocks, and minerals generally looking for

harder to find and more obscure products).

o 40-60 years old

o College Educated

 Healers (People who believe in the healing power of gemstones and

crystals)

o 18-50 years old

o May have some College experience

C2. Industry Analysis:

By some estimates, crystal sales are a billion-dollar industry. (Raphael, 2017) Big box

stores such as Target have taken notice and now stock selected products. For the Christmas

season of 2018, salt crystal lamps showed up at every major retailer, which in turn pushed prices

down significantly.

Although many crystal and gemstone pieces are mined in countries such as Brazil, they

are fashioned into specific products in China. This could complicate the pricing and importation

of needed product. In terms of any country that mines or produces our product, any kind of

political or other forces could disrupt supply.

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C3. SWOT Analysis:

S (Strengths) W (Weaknesses)

1. Multi-Channel Selling format 1. New business concept

2. Owner has 20 years’ experience 2. Finding knowledgeable employees

3. Flexible Team structure 3. Small products = High theft potential

O (Opportunities) T (Threats)

1. Able to buy in bulk 1. Competition in trends

2. Broader Marketplace 2. Government tariffs

3. New sourcing opportunities 3. Importing problems

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Strengths

 Our multi-channel selling format will allow us to reach more customers than we

would if we were just a store-front retailer.

 Our owner and C.E.O. has over 20 years of experience working with rocks and

crystals. He has been selling at fairs and festivals for 10 years, and managed retail

stores for 10 years prior, and has extensive experience in the procurement process.

 We have chosen a flexible team structure for our management in order to be able

to cross-train key employees to help where needed. For example, I feel the

warehouse staff should have an idea what it’s like when the retail store receives

product.

Weaknesses

 We will be a new business concept. Most retail stores do not do mobile vending,

so actively doing both mobile and physical locations could create challenges.

 Finding knowledgeable employees, who at least have a desire to learn about rocks

and crystals will be a concern. This will more than likely require a more extensive

training program.

 I would estimate that 60% of our product offering will be pocket sized items. This

would be a theft problem in a controlled retail store. In an outdoor festival setting

it creates additional issues that would need to be addressed.

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Opportunities

 Rocks and crystals are typically bought from smaller suppliers. Considering the

weight of the product, there are usually significant discounts when purchasing

larger quantities of product.

 Because we are selling in the multi-channel environment this opens the company

to a broader marketplace. With being able to sell out of a 10’X10’ tent, we can

open a storefront anywhere.

 The rock and crystal business can be a very social business to be in. When

attending trade shows and buying opportunities, you can discover new suppliers

and sourcing opportunities.

Threats

 If a product suddenly becomes trendy, big box stores, and other mass retailers

can begin selling which would add a significant competition level.

 Government tariffs can be a significant threat to our business. Many products we

sell are inexpensive in cost, so a 20-30% tariff jump would have a negative

impact.

 Roughly 70% of our products are sourced from outside the United States, so geo-

political problems in these other countries could have major implications on our

business.
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D. Market Strategy

D1. 4Ps:

Price

We plan to be somewhat of a value price leader. Since our profit margin on many of our items is

significant, coupled with the fact that we get volume discounts from our suppliers, we can afford

to keep items at a lower price point. In the festival sales we attract a lot of kids, so we keep our

pricing to fit that clientele. In the mall-based retail store we will sell some more expensive

jewelry items that could be more in the $20-100 range.

Product

Our goal for product is to carry items that have a bit of a “WOW” factor. Since we operate in an

impulsive retail environment, we as a company must create a factor that will result in an impulse

sale. As discussed previously we cater to Rockhounds who will be looking for a more obscure

piece to add to their collection. And we also cater to healers who are looking for a crystal that

has a specific property, and if we can educate the customer, we are more likely to create the sale.

Promotion

We intend to make heavy use of Instagram, and to a lesser extent, Facebook. Our products lend

themselves to excellent photography so with Instagram we will be able to really show it off. Our

website to visit for online shopping will be www.WeDigRocks.com We also will utilize a

rockhound/healer printed chart that will be a tool to educate our customers. A rockhound wants
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to know where it came from, a healer wants to know its healing properties. All sales directly to

the consumer will have branded packaging.

Place

We intend to have all our merchandise and related products shipped to our central warehouse.

Once it is received and organized it will be shipped to either the retail store or to an individual

customer. We anticipate shipping the retail store one or two boxes per week, depending on sales.

Customer orders will be shipped directly to the customer in our branded packaging. For product

to sell at a festival, we will have a company van that will contain product to sell, and all required

display items needed.

D2. Price List: Develop a price list for the company’s products and services.

Assorted rough minerals/20 varieties $1-3 Carved Peruvian Figures/ 10 styles $5

Finished Selenite pieces $3-20 Crystal Balls $3-50
Gemstone rings/4 styles $3 Fill the bag with rocks $4
Bracelets/5 styles $5 Gem Trees/ 3 varieties $5-20
Necklaces/ 10 styles $5-10 Keychains/ 10 varieties $3-10
Treasure Excavation Kit $10 Gem books/ 5 varieties $10-30
Salt Crystal lamp $15 Gemstone pendants/ 10 varieties $3-30
Amethyst/ 5 assorted shapes $5-50 Extended Warranty on jewelry items varies

D3. Promotional Strategy:

TASK RESPONSIBLE DATE

Create Rockhound/Healer card and have printed owner 3/15
Create and print business cards owner 11/01
Have pop-up tent designed and built owner 12/01
Print pricing signs for festivals and retail sales owner 4/01
Research and apply for festival events owner ongoing
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Create social media “teaser” ads owner 3/20

D4. Sales Forecast:

Apr May June July Aug Sep Nov Jan Feb Mar

Oct Dec
Online Sales 1200 1260 1323 1389 1458 1530 1606 1846 2307 1606 1686 1770
Festival Sales 1200 1400 1800 2000 1800 1800 1600 0 0 0 0 0
Storefront 9000 9000 9000 9000 10500 11000 11000 18000 25000 10500 12500 11500

Sales
Total Sales 11400 11660 12123 12389 13758 14330 14206 19846 27307 12106 14186 13270

With our online sales I started with a modest $30/day average and am planning on a 5%

increase per month with a 15% increase for November, and 25% in December to account for

extra holiday sales. January it falls back to October’s total before resuming anticipated 5%

monthly increases.

Since I have experience in festival sales, I had a good benchmark to begin with. This

assumes one festival event each week in April through October. I started with $300/sales per

event in early months in anticipation of cooler weather. July has more music and other larger

festivals so that explains the higher total for that month.

Our retail storefront will begin as a kiosk inside a regional shopping mall. We will not

have direct competition for the rocks and crystals but will have some competition for jewelry

related product. Since April is the opening month, the anticipated a $300/day average holding
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steady through the slower summer months with increases starting with back to school season,

and a major increase for the November/December holiday shopping season.

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E. Implementation Strategy

E1. Overall Strategy:

The following tasks need to be completed prior to launch date for The Gem Miner of April 1.

 Meet with the lawyers to register the business as an L.L.C. This will be completed by

October 1. Responsible party: Owner

 Open a checking account at the bank. This will be completed when we have the required

paperwork for the L.L.C. anticipate October 15th. Responsible party: Owner

 Begin meeting with leasing agents to secure space for the warehouse as well as meeting

with shopping mall leasing agents to line up space. This has a timeframe of between

October 15th-December 15th Responsible party: Owner

 Meet with graphic designer to finalize logo design with a completion date of

November 1. Responsible party: Owner

 Begin placing help wanted ads for both the Office, and Warehouse Manager positions.

Target completion date of January 1. Responsible party: Owner.

 Make decision on hiring for Office, and Warehouse manager positions. Target

completion date of March 1. Responsible party: Owner.

 Begin recruitment for retail store employees. Target completion date of March 15.

Responsible party: Office Manager

 Have training program ready to implement with a completion date of April 1.

Responsible party: Owner

 Have orders for merchandise placed with a completion date of March 15. Responsible

party: Owner
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 Receive merchandise at the warehouse beginning March 20th. Responsible party:

Warehouse Manager.

E2. Monitoring Plan:

 Culture

o Since our corporate structure is that of a team-based approach, we believe that any

employee is empowered to problem solve. We will work with our staff on an

ongoing basis to make sure that they are aware that we have a high commitment

to customer satisfaction and that they can resolve problems that arise.

 Customer Satisfaction

o Online review sites will be monitored on a weekly basis to ensure that we are

maintaining our customer service focus.

o We will respond to customer e-mails and messages via our social media platforms

in a instantaneous fashion and ensure that all problems are resolved quickly.

 Financial Review

o The owner will meet with the management team on a monthly basis to discuss

departmental budgets and how they may need to be adjusted.

o Store management will get a weekly report and have a monthly meeting to discuss

financials for the retail store.

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 Marketing Updates

o Since we will be relying significantly on social media advertising, we will

review reports on a weekly basis so that we can better understand our

reach and effectiveness.

o Major ad campaigns will be discussed on a quarterly basis.

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F. Financial Statements and Projections

See Attached Spreadsheets

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G. Financial Report

G1. Financial Projections:

Wage Expense

My wage expense of $7,980 is calculated on 73 hours/week of retail store operating time, with

the office manager and warehouse manager positions starting at part time of 30 hours/week, and

the owner running the festival side of the business. Since the festivals is where all the internal

marketing will originate, the owner is the best person to convey that message.

Supply Expense

I have calculated a modest $250 per month for supplies. These would include necessary packing

needs for both the retail and the online sides of the business.

Cost of Goods Sold

Due to our ability to buy in bulk quantity’s and the fact that many of our products have a high

mark-up I have calculated the cost of goods sold at 20% of projected total revenue.

Pre-Launch Expense

I have estimated a $3,000 pre-launch expense for printing needs, and sign making expenses as

well as some needed display equipment.

Rent Expense

To calculate the rent expense, I have budgeted $1,000/month for the mall kiosk space. The

festival events cost an average of $75/event with an event each week in April-October. And

finally, I budgeted $1,500/month for the warehouse space.

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Advertising Expense

Since most advertising will be done via customer outreach at the festivals, I have budgeted

$500/month for online advertising to build the online sales. Although digital billboards would be

another medium under consideration.

I.T. Expense

The $200/monthly calculation is for the cost of maintaining the website for online sales.

G2. Financial Position:

While we begin with significant losses, we can narrow them as we approach major

holiday seasons for the retail store. The festival sales are unpredictable due to weather alone. If

we have favorable weather through the summer months and receive higher attendance which

would result in higher sales, then we would be able to narrow the loss further.

I believe in year 2, we could see significant profit growth after adjustments are made

based on first year results. I have projected online sales at a steady increase since there does not

appear to be any slowdowns in that area.

G3. Estimated Capital/Investment Needs:

The owner’s contribution of $50,000 comes from money saved for retirement after a

successful 25-year career. My goal is to avoid loans in year 1 so that we can concentrate on

building sales. Again, the more inventory we purchase, the fewer costs we incur in shipping in

addition to bulk discounts. So, starting with year 2, expansion into additional malls would be a

significant possibility.
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H. References

Gentry, C. (2008). Adventures in Global Sourcing. Chain Store Age, 84(6), 22–24. Retrieved

from http://search.ebscohost.com.wgu.idm.oclc.org/login.aspx?

direct=true&db=buh&AN=32589977&site=eds-live&scope=site

Bix, C. O. (2014). Spending spree : the history of American shopping. Twenty-First Century

Books. Retrieved from http://search.ebscohost.com.wgu.idm.oclc.org/login.aspx?

direct=true&db=cat07141a&AN=ebc.EBC5441656&site=eds-live&scope=site

Serkin, R. (2018). ON THESE STREETS: The pushcarts of New York’s Lower East Side

epitomised its bustling immigrant community. The drive to Americanise brought about their

demise and changed the streets forever. History Today, 68(5), 32–37. Retrieved from

http://search.ebscohost.com.wgu.idm.oclc.org/login.aspx?

direct=true&db=rgm&AN=128985555&site=eds-live&scope=site

Raphael, R. (2017, May 5). Is There A Crystal Bubble? Inside The Billion-Dollar “Healing”

Gemstone Industry. Retrieved from Fast Company website:

https://www.fastcompany.com/40410406/is-there-a-crystal-bubble-inside-the-billion-dollar-

healing-gemstone-industry