BUSINESS PLAN FOR SPORTS EQUIPMENT RETAIL
SUBMITTED BY: NAME: Sachin Singal CLASS: MBA -2C ROLL NO. 129 E-MAIL: firstname.lastname@example.org
the owner and operator will invest the rest. job enjoyment. with a first year growth rate of 12%. An exact location has yet to be set. Many businesses start under the same assumption but due to work ethic. We have forecasted the need for 60% debt.Executive Summary
Keith's Sporting Goods (KSG) will be in the business of selling athletic equipment to people at every fitness level. from aspiring college athletes to weekend warriors. Based in Delhi. This assumption appears to be accurate given the fact that the sporting goods wholesale industry is growing at an 11. KSG is expecting to make a profit in the early stages of its life. Ideally that location would be in central Delhi where anyone can travel a short distance to find our store. We fully expect to grow quickly. we expect to have the store open by January next year and to produce strong profits by the end of that same year. In the early stages of business. Depending on the timing of financing. but owners are avidly searching for a high foot traffic location. we will be primarily debt financed through a local bank and the Small Business Association (SBA).5% annual rate. Keith's Sporting Goods will be filed as an S Corporation where owners will be protected from various forms of liability and tax shields. With our knowledgeable staff we will provide an environment where everyone feels comfortable coming in and asking for training advice and discussing equipment needs. Sales are forecasted to be conservative in the first month but are expected to increase by 2% each month thereafter. desire.
. KSG wants to be a recognized sporting goods store.
. To be operating at a profit by the end of the first year of business. and encouraging the additional education of our employees will be constantly emphasized by store management.5% growth rate thereafter. 3.
KSG strives toward building long-term relationships with our customers and employees. Working within the community.Objectives
The primary objectives for the store are: 1. 2. Brand recognition. KSG will be a recognized sporting goods and fitness store in Delhi. promoting community service. and then maintain no less than a 11. Achieve a 15% growth rate in sales from years one and two.
A large portion of the initial investment will be spent on beginning inventory (70%).000
Marketing/ Advertising . 25. at which time the owner has reserved the option of buying out his shares.000 Rs. The investor will receive dividends starting in year 2. 1. and the fact that the investment is a relatively small undertaking. KSG will be filed as an S Corporation. I will not be the only one with a capital investment in the company.0 Rs. 0 Rs. Total assets will amount to 80% of the initial investment. We will be located in Delhi where there is a high concentration of health conscious individuals and a devoted following to both high school and college athletics. Company Ownership With the intent to operate the store I will be considered the owner of Keith's Sporting Goods. until he has recouped his initial investment.Grand Opening Rs. Start-up Summary Keith's Sporting Goods will be financed through a combination of 60% debt and 40% equity. 60.000
. and the rest will be debt financed.000 Rs.Company Summary
KSG intends to provide customers with the quality products they need to maximize athletic performance and accomplish their physical and mental goals. The ownership will be split up evenly between myself and the other investor. which we forecast to be sold within the first two months. 0 Rs. Under these circumstances.40. We will provide our customers with a knowledgeable staff that enjoys working in an athletic atmosphere and helping others. 0 Rs. A local investor will have equal shares in the business.0 Rs. However. 50. Start-up
Requirements Start-up Expenses
Legal Operating Assets Brochures Consultants Insurance Rent Renovation Other Total Start-up Expenses Rs. A local bank will provide the debt while the equity will be provided by an equal combination of owner investment and an angel investor. 5000 Rs.
Keith's Sporting Goods will be a high quality fitness store that focuses on athletic performance and maximization of athletic potential. 0 Rs.000 Rs. The core products we will carry are:
• • •
Shoes Apparel Athletic equipment
To complement these goods.000 Rs. 800.000 Rs. In other words. 100. KSG will be designed to supply athletes with the essential products that are necessary for active lives. 40. we will also carry training equipment like:
• • • •
Polymeric boxes Medicine balls Health supplements Training literature
. 6.000 Rs. 5.Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements Rs.
personal relationships with our customers. Capturing the market at a young age will lead to future sales when athletes spend more money on their athletic needs. in order to do this. We strive to build long-term. Data has indicated that youth sports has the highest growth rate of any segment within the athletic industry. Focusing on college students and active adults will also be key.
. Therefore. we will need to attract customers at young ages. By building a trust relationship. Young parents and high school students will not be the only groups that we will focus on because they also make up the smallest population. we may be able to maintain a family right up through the child's college years. It will be important to target these groups because youth sports are growing at an incredible rate. we will provide a marketplace that satisfies the needs of each group.Market Segmentation
• • • •
Parents (Elementary & Middle School) High School Athletes College Students Middle-aged Adults (35+)
Target Market Segment Strategy Because there are so many different sports and levels at which to compete. there is a broad range of markets for the company to target. our primary target market will be parents with young children. At KSG. We will stock a variety of goods for the wide variety of our customers.
Competition and Buying Patterns To an athlete who is serious about achieving particular goals. not only will they more likely be repeat customers. having the correct athletic equipment is integral. Copeland's tries to sell products more on a cost basis using their capitol power to sell products at the lowest price. When doing this. it is tough to find polymeric equipment. It is the same for a basketball player who needs to wear light clothing that allows him/her to move freely.
. the athlete is looking for the best equipment and is always open to try new. The type of equipment that KSG will provide will also be a source of competitive edge.
Strategy and Implementation Summary
At KSG. Once this trust is built our competitive advantage can be sustained. they sacrifice the customer service and support that many athletes are looking for. In the sporting goods retailing many companies compete in different ways. Providing a group of knowledgeable employees who enjoy what they are doing is the only way that KSG can provide the best customer service. Being seen at various sporting events will be an integral part of getting our name out in the community. KSG will provide quality equipment and will be able to educate customers on why certain equipment is better than the typical mainstream brand equipment. Somebody who runs many miles over the course of a week needs to have shoes that not only last over time. Much of the equipment found at Keith's will not be found at larger chain stores. As a smaller company we intend to provide customers the support and knowledge they need to fulfill their goals. In either case. but also protect joints from over use. If customers have a good experiences with what they purchase. We want them to know all the information about what they are buying and what is best for them. We want to be seen as a business that cares for our customers and wants to see them accomplish all of their goals. We want our customers to have complete trust in what our employees are saying. Trendy shoes are not a sign of high quality. For example. we will use a marketing strategy of developing long-term relationships with our customers. For example. but also they will tell friends about the quality of operations at KSG. innovative products that might help reach peak performance. In fact the only way one can buy highquality equipment is through catalogs. It is the same for many types of shoes. they are a sign of great marketing. Competitive Edge The number one competitive edge KSG enjoys is providing customers with unparalleled service. Various stores tend to only sell shoes that are trendy.
sales people will take care of customers on a first come first serve basis. Finally.50% per year. After the store has a history.Sales Strategy Our sales strategy will be built around fully educating customers about their purchases. We want to build customer relationships without discriminating other potential future customers. With that in mind. Sales Forecast The primary products at KSG will include athletic shoes and apparel. Employees will be paid on an hourly wage with no commissions at the beginning of operations. It is important for the customer to be fully aware of the repercussions of the activity and how each piece of equipment effects him/her. Many of the activities that our store is promoting impacts the human body. supplements. all sales will be in cash to prevent the problems brought along by late accounts receivable payments.
. We will also sell equipment. and health literature. but we forecast shoes and apparel to drive sales. a commission package based on sales and education advancement can be implemented. We expect strong growth in the first year due to intense marketing and exposure in the Delhi market. Forecasted sales are expected to increase by 2% from month to month in the first year and then grow at the industry average of 11. KSG will carry a relatively low amount of inventory and have frequent order repurchases in an attempt to maintain inventory levels and storage costs.