Sample Business Plan Presentation

American Revolutions

GROUP 9 JUSTIN BELL, JUSTIN HARRISON, JAKE MOYLE, & NOAH PRICE

Business Concept‘An online marketplace for the sale, distribution, and

consignment of collectible American vinyl records and artist memorabilia.’

Specializing in American Vinyl & Memorabilia

Collectible Products

Direct Sales through Website

Consignment Agreements with London Record Stores

Sustainable Competitive Advantage

Cheap Product Sourcing Often Less than $2.00 per Record

Value-Enhancing Resources Easy Access to Events Obtain Autographs

High Profit Margin Opportunity

Demand Major Vinyl Revival

Global Sales Up 54% in 2014 Increase of 56% in UK Sales over

First Half of 2015

“Heritage Rock Acts” Successful Artists of the 60’s,

70’s, 80’s, & 90’s Contribute a Significant Portion of

Sales

Projected 2 Million UK Vinyl Album Sales in 2015

Target Markets & London, England Two Distinct Target Markets

Mature Music Listeners (Ages 28 - 50)

New Collectors (Ages 18 - 27)

Major Hub for Music Collectors Over 4,500 Record Stores Major Tourist Attraction Leader in Growing Vinyl Sales

Demographics

London has Highest Disposable Income in UK

65% of Citizens Fall into Target Age Range

Over 17 Million Tourists in 2014 Over £11m in Tourist Spending

“Vinyl Destination”

Estimated Demand

0.5% Market Share 10,000 Records (of 2 Million)

Consignment Agreement with 25 Stores 50 Records per Month to Each Store

Selling1.28 Records per Day (in 25 Stores) will Meet Estimated Demand

First Year Goals

Strategy: Business Model

Website Provides Legitimacy for Business

and Negotiations Creates ‘Price Umbrella’ Higher Prices Online Higher Margins

Two Methods of Selling Direct to Consumer (Online) Consignment

Consignment Meets Stores’ Need for Reliable

Constant Supply Established Channels to Sell

Products Capitalizes on Competition

Strategy: Marketing

Online Sales Google AdWords

Search Engine Optimization Monthly Budget = $150

Social Media Marketing Facebook & Twitter New Products, Special Promotions,

& Customer Connection

Word-of-Mouth

Consignment Careful Selection

Location Attractiveness Level of Foot Traffic Store Brand Level of Sales Management

Nature of Product Collectible Items Popular Artists Cover Art

Strategy: Promotion

Record Store Day Major Event 3rd Saturday of April

Artist Discographies 20% off

Artist Bundle 10% off

5 for $100 20% off

*Online Prices Include Shipping & Handling*

Costs: Sourcing

Sourcing $0.25 - $2.00 Per Record

Secondary Markets Garage Sales Swap Meets Thrift Stores Online ‘Lot’ Sales

Autographed (or Rare) Records, Pictures, and Posters

Cost Between $12 - $15 Willing to Pay Up to $50 for Rare

Items/Memorabilia

Costs: Shipping USPS Mail Options (Freight)

Maximum Shipment of 140 Records (70 lbs.)

3-Day Delivery in America 5-Day Delivery Overseas

UK Import Duties & Taxes Based on Product Valuation 2.5% on Items Up to £630

($945) 3.5% on Items Exceeding

£630 ($945) Duties are Not Owed if Less

than £9 ($13.50)

Method of Sale Number of

Records

Cost Insurance Valuation Taxes

and

Duties

Total Cost

per Record

Online

(America)

1 Record $2.45 $2.20 $25 $0 $4.65 $4.65

Online

(United Kingdom)

1 Record $9.20 $2.20 $25 $0 $11.40 $11.40

Consignment 50 records $98.04 $117.90 $1,250 $43.75 $259.69 $5.20

Additional $100 Insurance is Necessary for Products Shipped Overseas Weighing 15 lbs. or More

Storage Costs = $0

Pricing Pricing Differs Based

on Point-of-Sale Higher Prices Online

Online Prices will be listed in US Dollars ($) and UK Pounds (£) Based on Location

Competitive Pricing

Online Price Includes Shipping

Product Type Online Price ($) Online Price (£) Store Price (£)

Standard Record $25 – $45 £22 – £35 £18 - £25

Limited Edition Record $50 - $100 £40 – £75 £35 - £65

Autographed Record $100 - $500 £75 - £350 £70 - £300

Autographed (or Rare)

Photo

$60 - $100 £45 - £75 £40 - £60

Autographed (or Rare)

Poster

$40 - $60 £35 - £50 £30 - £45

Memorabilia Items $160 - $300 £115 - £215 £100 - £200

Current Conversion is 1 £ = $1.5

Start-Up Costs

LegalZoom LLC, Business Licenses, &

Trademarking Additional Business Services

Weebly Website Creation ($25 a Month) Free Domain for 1 Year Support and Addition Services

Sourcing $5,000 Budget for Obtaining

Records before Company Launch

Start-Up CostsSourcing Budget $5,000LLC & Business Licenses $1,199.99Trademark $799Website Creation $50

(Two Months)Total $7,048.99

Monthly & Annual Costs Total First Year Costs =

$24,538.99

Optional LegalZoom Costs Attorneys and Tax Advisors Registered Agent Tax Returns and Annual LLC

Registration

Annual Traveling and Lodging Budget = $15,000

Start-up Costs Monthly Costs Annual Costs

LLC Formation Process

(LZ)

$359

Attorneys & Tax Advisors (LZ)

$19

Registered Agent (LZ)

$159

Federal Tax ID (EIN) (LZ)

$49

Weebly Website Services

$25

Tax Returns & Annual LLC

Registration (LZ)

$320

Business License Application

Process (LZ)

$74.99

Google AdWords Marketing

$150

Estimated License Renewal

$250

Georgia Filing Fee (LZ)

$200

Annual Traveling &

Lodging Budget

$15,000

Trademarking (LZ)

$799

Sourcing Budget

(Before Launch)

5,000

Multiplied x 12 Months

Cost of Sales Sourcing

$0.25 - $2.00 per Record

Shipping Online Orders (America) –

$1.00 - $4.65 per Record Online Orders (United Kingdom) –

$5.00 - $11.40 per Record Consignment Agreements –

$3.78 - $5.20 per Record

Online Sales PayPal – 3% of All Sales

Consignment Sales Consignee – 30% of All Sales

Online (U.S.) Online (UK) Consignment$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

PriceShippingConsignmentPayPalSourcing

Margins: Online Sales (America)

ProductStandard Record

Limited Edition Record

Autographed Record

Autographed(or rare)

Photo

Autographed (or rare)

PosterMemorabilia

Items

Price $25.00 $50.00 $100.00 $60.00 $40.00 $160.00

Sourcing $2.00 $12.00 $15.00 $15.00 $12.00 $50.00

Shipping $4.65 $4.65 $4.65 $4.65 $4.65 $4.65

PayPal Expenses $0.75 $1.50 $3.00 $1.80 $1.20 $4.80

Sales Tax $1.75 $3.50 $7.00 $4.20 $2.80 $11.20

Profit Margin (Per Product) $15.85 $28.35 $70.35 $34.35 $19.35 $89.35

Profit Margin % (Per Product) 63% 57% 70% 57% 48% 56%

Assumptions: Standard Records

will Generate the Most Frequent Sales

Sourcing = $2.00 Shipping = $4.65 PayPal Expenses

= 3% of Revenues

Customer Acquisition Price Transparency Competitive Pricing Unique Products Repeat Purchases

Margins: Online Sales (United Kingdom)



Autographed Record

Autographed(or rare)

Photo


PosterMemorabilia

Items

Price £22.00 £40.00 £75.00 £45.00 £35.00 £115.00

Sourcing £1.33 £8.00 £10.00 £10.00 £8.00 £33.33

Shipping £7.60 £7.60 £7.60 £7.60 £7.60 £7.60

PayPal Expenses £0.66 £1.20 £2.25 £1.35 £1.05 £3.45

Sales Tax £1.54 £2.80 £5.25 £3.15 £2.45 £8.05

Profit Margin (Per Product) £10.87 £20.40 £49.90 £22.90 £15.90 £62.57




Sourcing = $2.00 Shipping = $11.40 PayPal Expenses

= 3% of Revenues

Customer Acquisition Price Transparency Competitive Pricing Unique Products Repeat Purchases

Margins: Consignment Sales



Autographed Record


Photo


PosterMemorabilia

Items

Price $18.00 $35.00 $70.00 $40.00 $30.00 $100.00

Sourcing $1.33 $8.00 $10.00 $10.00 $8.00 $33.33

Shipping $3.47 $3.47 $3.47 $3.47 $3.47 $3.47

Consignment Percentage $5.40 $10.50 $21.00 $12.00 $9.00 $30.00

Profit Margin (Per Product) $7.80 $13.03 $35.53 $14.53 $9.53 $33.20




Sourcing = $2.00 Shipping = $5.20 Consignee

Percentage = 30% of Revenues

Customer Acquisition Careful Selection Supplier Partnership Store Chains

Intellectual Property Rights

First-Sale Doctrine Legal to Re-Sale Products

No Interest in Duplicating Records Avoid Issues of Quality and Piracy

Photos of Actual Signing Legitimate Signatures

Critical Risks

Locating Reliable Sources for Records

In-House Website Creation Attractive Easy-to-Use

Penetrate London’s Established Record Stores UK Barriers

Create Partnerships Honest Selling Contracts

Sharing the Workload Contracting, Negotiating, Financing Website Creation, Maintenance, and

Google AdWords Storage, Inventory Control,

Purchasing Social Media and Personal Selling

Milestones

Milestones (Gantt Chart)

Finances Funded through Personal

Budgeting by Management Team $9,000 from Each Team Member

Credit Cards Used to Cover Additional Purchases

Costs: Estimated Breakeven = $36,072.00

Start-up Costs: $7,048.99 Monthly Costs: $194 Traveling & Lodging Budget =

$15,000 Sourcing, Shipping, and Cost of

Sales

BreakevenEstimated Breakeven:

1,336 Records ($36,072.00 Sales)

• Consignment of Standard Record = Most Frequent Sale

• Start-up Costs: $7,048.99

• Monthly Costs: $194

• Traveling & Lodging Budget: $8,000 (Four Months)

• Sourcing, Shipping, and Cost of Sales = $15.30 per Record

• Contribution Margin = $11.70 per Record

Why Will Our Venture Succeed?

Revival of Vinyl Growing Demand Collectible Products Proven Artists

Management Team Knowledgeable about Product In-House Website Creation Avoid Unnecessary Costs

Low Start-up Costs High Margin Product

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