Plastics Recycling Business Plan
The growing utilization of plastics in industrial and consumer applications, combined with increased consumer awareness surrounding solid waste recycling, has led to an increased demand for recycled plastic resins and products. One of the fastest growing types of collected plastic materials for recycling is polyethylene terephthalate (“PET”) from post-consumer beverage and water bottles. Replay Plastics will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions: a Recycling Division and a Packaging Division.
The Company will create a PET cleaning and refining plant located in the western United States (all 16 major North American PET recycling plants are currently located in the eastern United States or Canada). Its initial capacity will be 46 million pounds, and it will utilize post-consumer bottle feed stock presently collected in California, Oregon and Washington States, which collect over 200 million pounds per year. The Company will be vertically integrated, and use almost all of its recycled material in its Packaging Division. Any surplus materials (clean flake) produced will be sold to outside companies. The extruded sheet may then be sold to manufacturers, who will thermoform it into high-visibility packaging or use it in other high value added manufacturing operations. The strapping will be sold to companies who ship large packages or pallets, such as the lumber milling industry. The Company currently has commitments available from customers to purchase all of the product produced.
Ben Braddock, President, has a 30-year history of experience encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. He has founded successful ventures in the plastic converting industry, and assisted in the launch of five plastic converting manufacturing plants. Sam McGuire, Executive VP and COO, is a graduate Engineer with over 20 years experience in the post-consumer plastics recycling industry and is the inventor of the primary cleaning & refining technology used in the process for this project. He has received a patent for his technology and has been directly involved in over twenty-five major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 years investment and merchant banking and management experience. He has assisted in raising over $500 million and served as board member and/or officer in over 40 public and private companies.
- Sales passing $15 million in first year, $31 million in year 2, growing to $43 million.
- Gross margin of 35% or more in first year, 45% in second year then 50% or more.
- Net profit of 13% in year one, then exceeding 20% annually starting in year two.
Replay Plastics is a manufacturing company dedicated to converting waste plastic materials into commercially viable products, utilizing environmentally friendly recycling and manufacturing methods. We intend to make enough profit to generate a significant return for our investors and to finance continued growth and continued development in quality products. We will also maintain a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work.
1.3 Keys to Success
The main keys to the success of the Company are:
- Secure Supply- Contract for supply of post-consumer bottles and post-industrial manufacturing waste for PET raw material feed stock.
- Marketing – Contractual arrangements for the sale of virtually all initial production.
- Management – Strong senior management with extensive, broad-based, industry-specific experience.
1.4 Potential Risks
Unavailable or scarce raw material feed stock for production
- Replay is confident that it has secured good availability of low cost post-consumer PET bottles (feed stock) derived from post-consumer beverage bottles from California based recycling collectors, and has back up sources identified.
Technology employed may be unreliable or unprovenReplay will use a proven, patented technology that was developed by one of its principals for the cleaning and recycling phase. The extrusion division will employ commercially proven technology – the industry is employing unique recycled PET technology which is used by prominent eastern U.S. manufacturers of PET extrusions.
- There may not be a market for the Company’s products
The Industry-wide experience of the Management Team has allowed them to identify markets for the Company’s products. Their expertise and reputations have allowed them to obtain commitments for virtually all of the planned initial production.
- The location may not be near enough to markets
The markets that have been identified are primarily in the western U.S., which will provide a distinct advantage to the Company because of freight costs and delivery timing.
- The Company may not be able to attract top management
The Company has assembled a world class management team with proven ability and direct experience in the Company’s market segments.
- Company may not meet environmental standards
This environmentally-favorable venture provides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and return nearly all of the process water to the production lines.
- The Company may not be able to sell all of its production capability
Through the Senior Management’s industry-wide contacts, the Company has identified potential customers and received commitments for all of the production potential of the initial facility.
The Company will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions: a Recycling Division and a Packaging Division.
Using a patented process, the Company will create a PET cleaning and refining plant located in the western United States; we have chosen this region because all 16 major North American PET recycling plants are currently located in the eastern United States or Canada, despite western states’ favorable recycling attitudes among consumers. Its initial annual capacity will be 46 million pounds and it will utilize bottle feed stock from California, Oregon and Washington States, which collect over 200,000,000 pounds per year. The Company will become totally vertically integrated, and use all or almost all of its recycled material in its Packaging Division. Any surplus material produced will be sold to outside companies.
We will create a plant (actual facilities to be shared with the Recycling Division) to manufacture extruded plastic roll stock sheet or high-strength strapping, employing state-of-the-art technology developed to utilize recycled PET resin. The extruded sheet will be primarily sold to thermoformers who will convert it into high visibility packaging, as well as laminators and fabricators. The strapping will be sold to commercial users for use as package or pallet strapping. The Company currently has commitments from customers to purchase all of the initial production capacity. Excess flake will be sold to outside customers.
2.1 Company Ownership
Replay Plastics is owned by the initial founders, B. Braddock, S. McGuire and C. Smith, who are the proposed three executives of the operating entity. The plan was conceived and developed by these individuals, with the intent to apply their extensive experience and contacts in the industry to building a successful profitable corporation.
2.1.1 Potential Conflict
Our COO, Mr. Sam McGuire, the inventor and patent holder of the recycling process to be used by the Company, is a principal in Company A of Chicago, IL. For many years, Company has designed, manufactured and assembled plastic recycling equipment, and has given us quotes on meeting our needs in this area.
After a thorough investigation, Replay has found that Company A is able to source or supply the required equipment at considerably lower cost than any other company from which a quote was available. Mr. McGuire has disclosed that Company A has included a smaller than normal margin in their quote on goods they will manufacture, to cover overhead, contingency and profit which might result in a small benefit to him. They have agreed to source all of the equipment possible with no added margin.
Replay has concluded that the savings available outweigh any other consideration and that we will purchase the cleaning and refining equipment from Company A.
2.2 Start-up Summary
Our start-up expenses are budgeted at $210,000, which is mostly for on-site contractor services during facility preparation. $50,000 has been set aside for legal and accounting, $25,000 for special consulting that may be required during start up and $50,000 each for local engineering and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period.
Our largest Start-up Requirement is the building of the recycling and extrusion facility. Its final value at completion is listed below as a long-term asset of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year.
Replay Plastics will utilize two processes in the same facility to produce:
- Cleaned and recycled plastic PET flake (RPET), recovered from post-consumer beverage bottles and manufacturing waste produced by its sheet customers
- Extruded roll stock sheet PET.
- Extruded PET high-strength strapping for securing large packages or pallet loads; each using 100% RPET produced in-house
3.1 Product Description
Roll stock sheet will be sold to custom thermoformers primarily to be used to produce high-visibility packaging. It will also be sold to manufacturers of laminates and fabricated plastic products.
High strength PET packaging strapping is used to secure packages or pallets in such industries as lumber milling and corrugated and other paper production.
Both products will be extruded from post-consumer polyethylene terephthalate (PET) bottles. The recycling programs in California, Washington and Oregon collect in excess of 200,000,000 pounds of PET bottles per annum. Replay’ initial capacity will be 46,000,000 pounds.
Using a patented process, Replay will clean and refine the PET material from the post-consumer bottle stock and post-industrial manufacturing waste. The PET flake resin produced will be extruded into roll stock sheet or high-strength strapping.
Although the Company expects to convert all of its bottle feed stock into extruded products, any surplus flake will be sold to outside manufacturers.
3.2 Competitive Comparison
While quality and delivery are important factors to our potential clients, price is most often the determining factor in a buying decision. Good-quality packaging products manufactured from recycled (less expensive) resins, as close as practical to the end customer’s operations, will be most competitive and achieve a significant market share. These factors have helped to determine the business parameters of Replay Plastics.
In excess of 200,000,000 pounds of post-consumer PET beverage bottles are collected and available as feed stock for manufacturers who can re-process this material into commercial products. The Company has excellent relations with the firms and associations that collect and distribute these materials and has been assured that its requirements will be available for the foreseeable future.
The Company has entered negotiations with a California based source of post-consumer bottles and is confident that sufficient volumes are available on a contract basis from this source to satisfy its requirements. In addition, the Company intends to purchase production waste from its sheet customers and blend it into its feed stock.
Currently, the majority of the post-consumer PET bottles collected in California, Oregon and Washington are exported to China. The Chinese have absorbed the amounts surplus to the use in North America. Their interest has kept the industry in the position of being able to maintain a steady price range for this bottle stock. A significant percentage of all sales of such bottle stock are managed by Plastics Recycling Corporation of California (PRCC), an industry funded marketing agency which operates similarly to a co-operative. They accept bids from potential buyers on behalf of the firms which act as “consolidators,” which accumulate stocks from the smaller, individual bottle-recycling depots. Some amount of the available stocks are regularly bought by recyclers in eastern North America who focus on the carpet manufacturers who use RPET resin in their process, but the high cost of transport from the western U.S. makes eastern sources more desirable.
Replay has a good relationship with Company B, one of the larger consolidators in California. Company B has indicated a desire to contract to supply Replay with all of its raw material needs. They prefer to deal with a local consumer such as Replay, rather than the uncertainty and extra preparation requirements of the export market.
There are other sources of post-consumer feed stock known to Replay, and we are confident that we will have sufficient materials available for our production needs.
Sam McGuire, a key member of our Management team, is one of the original innovators of cleaning and refining technology for post-consumer PET, and we will be utilizing his patented process in our recycling facility. Sam has worked in the establishment and operation of facilities employing similar technologies over the last several years.
On the manufacturing side, Management has been an integral part of the advancement of industry practices over the last twenty years or so, and includes in their knowledge base most, if not all, of the state-of-the-art available equipment and manufacturing techniques.
Market Analysis Summary
Strong demand for recycled plastics is working in the industry’s favor. Major users of plastic packaging, apparently responding to consumer desires, have begun incorporating at least some recycled plastic content in their products as part of the growing interest in recycling. Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold value or appreciate against their virgin counterparts.
In volume, PET is currently the number one recycled resin. Supply of recycled PET is in excess of 800 million pounds per year. This figure is expected to grow, reaching over 1 billion pounds during the next few years. The plastics industry has developed new markets and applications for recycled resins from both post-consumer and post-industrial sources.
PET leads the recycled recovered resins as the most visible and valuable, and its use is increasing. Of the total 3.7 billion pounds of PET consumed in 1997, just 16% was from recycled sources. Of the more than 90 billion pounds of plastics produced annually in the United States, less than 5% is from recycled sources. Plastics, after aluminium, represent the second highest value material in the waste stream and have the highest projected growth rate.
Markets and uses for recycled plastics are rapidly expanding. Plastic containers are being collected at the curb for recycling in nearly 500 communities, representing more than 4 million households. U.S. demand for recycled plastic will continue to expand and new markets will develop as technologies permit the efficient segregation and reprocessing of high-purity resins. Improved quality of resins, environmental issues and higher prices for virgin resin will contribute to growth.
Packaging is expected to be the largest market segment for recycled plastics, with sheet and lumber following. Surveys indicate that Americans are increasingly willing to collect and separate discarded packages, foregoing a degree of convenience to make products more disposable, and even paying a premium for a recycled item.
Increasingly, communities are refusing to consider incineration until every effort is made first to recycle; public sentiment is strongly in favor of products that can be recycled or are made of recycled materials. In recent years, the household recycling rate of PET bottles has more than doubled to 30% of all PET soft drink bottles sold. In fact, PET’s recycling rate is the fastest growing among all beverage containers. The future of PET recycling is even brighter than it has been in the past. PET intrinsic scrap value is second only to aluminium among container materials. The plastics industry has launched a research and development program aimed at increasing PET recycling. According to the U.S. Environmental Protection Agency (EPA), plastic soft drink bottles account for approximately 2% of the solid waste discarded in America. The EPA has set a national goal to recycle 25% of the municipal solid waste stream and the industry is committed to achieving its share of that important goal.
The recycling industry intends to accelerate the rate of plastic recycling as part of its commitment to develop solutions to the solid waste problem. Industry analysts have projected that 50% of all PET containers will be recycled by the year 2007. More plastics will be recycled annually than any other recyclable material. Replay believes a significant answer to America’s waste problem lies in creating high value, recycled thermoformable sheet and other extruded products for the packaging market.
Although more than 200 million pounds of PET post-consumer materials are collected in the western United States each year, there is presently no local cleaning and refining facility converting the bottles into resins suitable for re-manufacturing. Originally, recycled PET (RPET) was used primarily in the carpet fiber industry, which is located along the eastern seaboard. The early development of the RPET industry was therefore focused in the eastern USA, with eastern states adopting the first bottle deposit laws that resulted in collection of post-consumer bottles that can be recycled. Recently, California, Oregon and Washington have adopted bottle deposit programs, and accumulation of recyclable materials in those states has begun. With all of the cleaning and recycling plants and the majority of consumers traditionally located in the eastern part of the country, development of consumers of recycled flake and down-line products, such as film and sheet, has been slow to develop in the West. A strong demand for post-consumer bottles from Asia has prevented the buildup of inventories and reduced the pressure for the collection industry to find or develop western markets.
There is currently no independent extrusion plant of recycled polyterephthalate (PET) sheet in the western United States or Canada that services the roll stock requirements of major custom and proprietary formers. With the development of the recycling industry for PET starting in the eastern part of the country, and the preponderance of consumers of sheet there as well, development of independent extrusion facilities using RPET has been slow to develop. It appears that in order to attract such companies, local sources of RPET would have to available. While there are customers in the West for the products, contracting a supply and shipping it from the East makes the venture unattractive.
Our founders recognize that an opportunity exists and propose a vertically integrated conversion facility that will employ state-of-the-art technologies to produce extruded sheet and high strength strapping from 100% recycled PET post-consumer bottle stock, cleaned and refined in our own facility.
4.1 Target Market Segment Strategy
The Company has chosen its target markets because recycled PET (RPET) is in high demand as flake resin by converters, as roll stock sheet used to produce high visibility packaging and as high strength strapping for the lumber industry. Sales are price-sensitive, so that proximity to markets and feed stock source provide a competitive edge. Replay Plastics identified an opportunity to take advantage of both circumstances in the western United States.
Total market demand is reported as 1.2 billion pounds per year. Since only 800 million pounds are processed in the USA, consumers are forced to look at wide spec virgin PET (virgin resin that is outside of spec but still usable) which is normally sold at a discount to virgin prices, but still higher than recycled (RPET) pricing. Some manufacturers are also forced to import materials from Mexico, India and South America. Some converters are being forced to use more expensive virgin resin.
The current pricing for virgin resin is $0.65-0.73 per lb. and $0.42-.53 for RPET flake. The spread between the two has traditionally been maintained at approximately $0.20 per lb.
PET Film & Sheet
The total reported market of extruded film and sheet is 872 million pounds, of which identified industry usage of RPET is 160 million pounds.
The reported market demand (to replace virgin PS, PVC and PET) if RPET was available is estimated at 1 billion pounds.
Current pricing for RPET sheet is $0.70-0.79 per lb.
The total reported domestic plastic strapping market is 240 million pounds. Of this market, industry usage of virgin polypropylene is 132 million pounds and of PET is 108 million pounds.
It is generally accepted in the industry that less expensive strapping made from RPET could not only take over the polypropylene strapping market, but convert as much of the much larger and more expensive steel strapping market as RPET strapping was available.
Current pricing for RPET strapping is $0.90 -1.08 per lb.
4.2 Market Segmentation
The primary market can be broken down as follows.
Consumers of PET in:
Consumers of HDPE in:
4.3 Industry Analysis
Currently there is no direct competition in the western United States for either of the two divisions of the Company. Any production in the trading area remains captive and not available to our target market.
The ability of the Company to obtain a source of post-consumer bottle stock is an integral component of the strategy to vertically integrate operations and manufacture products in demand by western consuming industries. Without the cleaning and refining division, it would be difficult to source sufficient RPET flake resin at costs that would allow the Company to be competitive.
4.3.1 Barriers to Entry
Limited Supply of raw material
Recycled PET (RPET) resins are in high demand, and demand is currently under-supplied. Many manufacturers are delaying expansion because of uncertainty of supply. Entrants would have to consider sourcing post-consumer or post-industrial waste and clean and refine it rather than attempting to purchase flake on the open market. Even at that, there is not an over-abundance of post-consumer or post industrial material in the marketplace.
Equipment costs are high and industry specific, resulting in a high exit cost.
Because of the scarcity of RPET flake, entrants may be forced to establish cleaning and refining facilities for post-consumer bottles. The equipment required is costly and very industry specific. It would not easily be re-sold as a system.
There is a market for used extrusion equipment, which normally sees 60-70% of new value being realized.
Vertical integration is an important consideration and difficult to accomplish successfully.
Because of the scarcity of RPET resin, and to maximize profit potential, entrants must consider a two-stage production facility. Cleaning and refining post-consumer bottles and extruding the resulting flake into commercial products requires a management team such as Replay has, with a broad range of expertise, experience, industry contacts and knowledge in both areas.
Firm contracts for supply and sales.
Replay Management’s industry contacts will allow us to secure contracts for both supply of feed stock and sale of finished goods.
Freight is a major cost of operations; proximity to source of supply and markets is crucial.
Hauling plastic materials is expensive so entrants will have to consider establishing facilities close to materials and markets. Entrants with existing operations would have to consider new separate facilities in many cases, reducing economies of scale and making management more difficult.
4.3.2 Competition and Buying Patterns
There has been a strong demand (sellers’ market) for our products for several years. Traditional buying patterns in this industry are based on quality, price, reputation of manufacturer, freight costs, delivery times and proximity to markets. During such a sellers’ market, buying patterns are often more influenced by availability.
4.3.3 Main Competitors
Currently in the western United States, there is no direct competition for cleaning and refining post-consumer or post-industrial PET. Nor is there any non-captive extrusion of roll stock sheet.
The extruded sheet required by thermoformers is currently supplied by:
- Advance Extrusion, Becker, MN
- Kama, Pittsburgh, PA
- Plasti-Shell Packaging, Gonzales, LA
- Petco, Montreal, Canada
- Klockner, VA
In a news release dated September 10, 2004, Itec Environmental Group, Inc. announced their intention to open a PET and High Density Polyethelene (HDPE) recycling operation in Riverbank, CA (east of San Francisco). The news release states that the Company’s new and yet unproven technology lets it work with bottle streams that others have to reject as too dirty. This Company is familiar to our Management, and is not considered a significant factor in any of our markets.
Security Guard Business Plan Sample
Protect your community by starting a security business using a security guard business plan similar to this one.
Protect your community by starting a security business using a security guard business plan similar to this one to compile your own.
1. Executive Summary
Batten-Hatchez Security is a start-up security company founded by Chindit Batten, an experienced former police sergeant and security company manager.
Located in Coastalburg at its launch, the business will provide security guards, security audits, and referrals to equipment providers to commercial buildings, retail businesses, and, eventually special event venues and other clients.
The business seeks to acquire capital from an angel investor and will expand to additional cities in our state and beyond if successful.
Related: Free Business Plan Template Download
In the current political climate, with increasing fears of terrorist activity, and the current economic climate, which promises an upswing in general and in outsourced services especially, this business is launching at the right time.
The business will target large retail stores and building management companies first in order to establish a strong base of clients in Coastalburg.
Batten-Hatchez will grow its employee base of security guards carefully, based on client contracts, and use both full-time and part-time guards. The business expects respectable sales of in the first year, almost doubling by the end of the third year. Gross margins will be similar to the industry average, based on guard labor costs vs. billings.
After the initial investment and launch, a lean first year, and the establishment of an office and training space in the second year, the business will be poised to expand through its own financing after three years. After the business is proved replicable in additional cities, the business may be sold to provide an exit for the initial investor and founders.
Batten-Hatchez Security will base its success on meeting the following objectives:
- Employ 25 full-time equivalent security guards by the end of the third year of operation
- Supply security guards to 15 buildings on a full-time basis by the end of the third year of operation
- Earn $2 million in revenue with net profit over $300,000 in its third year of operation
Batten-Hatchez Security will remove worries for clients who require security guards for their buildings, facilities, and events by providing excellent customer service for clients and in-depth training for their employees.
Keys to Success
Batten-Hatchez Security believes the keys to success in its industry include:
- Listening carefully to client concerns and objectives to create customized security guard packages
- Knowing what the client does not know (bringing deep security expertise as well as knowledge of legal regulations and liability to the table)
- Training security guards carefully and maintaining their training and certifications (e.g. to carry firearms)
- Monitoring the quality of security guard service to offer quality assurance
The creation of SAB KickStart, SAB Foundation, SAB Accelerator and SAB Thrive, provides the opportunity for a tangible and sustainable future for South Africans by providing invaluable guidance and support to new business.
2. Company Summary
Batten-Hatchez Security is a startup security company founded by Chindit Batten, a former police sergeant and security company manager with fifteen years in law enforcement and ten years in security work.
Related: 21 Steps To Start-Up
The business will provide security guards to commercial buildings, retail businesses, and special events. The business will launch in Coastalburg but will expand to additional cities if successful.
Chindit Batten is CEO and founder of Batten-Hatchez Security.
He currently owns 60% of the business and the remaining 40% of shares are owned by his partner and co-founder, Viipuri Hatchez, COO. The business is incorporated as an S Corporation to enable additional investment for its launch.
The founders shares will be diluted as up to 40% of shares will be given to investors.
Batten-Hatchez Security will launch as a home-based business out of the home office of Chindit Batten. Initially, this will reduce the cost of rent and equipment.
Training for security guards will be provided in temporarily rented office space as needed.
Other start-up costs include the costs of incorporation and permits, such as concealed weapons permits, business license, and police clearances (legal fees), the initial website and brochure design and printing, and the first insurance premium for the business, including liability insurance for the guard’s work and carrying of firearms.
Long-term assets include mobile phones and headsets for all guards and employees, as well as two-way radios for guards working as teams.
Batten-Hatchez Security will provide well trained guards for one or more of the following purposes:
- To guard entrances and screen guests/employees
- To monitor clients’ premises with video surveillance equipment
- To protect clients’ assets, employees and guests
- To deter crime with visual presence
- To organize response in the case of fire, evacuation, or other emergency
- To respond to customer and employee health emergencies and accidents
- To eject unwanted customers or trespassers
- To liaison with police and city emergency responders
In addition, the principals of the firm will offer the following:
- Security audits and recommendations for security plans
- Referrals to providers of security technology (camera systems, etc.)
Batten-Hatchez will be a licensed, insured, and bonded business and will offer both armed and unarmed guards, based on client needs and budgets.
All guards will be certified for security work and to carry firearms. Whenever possible, the same guards will be sent consistently to the same clients. However, substitutes will be necessary from time to time and the business will ensure that detailed data about the job is transmitted to substitute guards on those occasions.
Batten-Hatchez Security will build trust with clients as a partner, rather than simply in the specific guard or guards they grow comfortable with. Guards will keep in constant communication with their team via portable two-way radios and with the Batten-Hatchez office, as necessary through mobile phones.
The Batten-Hatchez office will be not be staffed full-time at launch, but the CEO and COO will be within reach by phone wherever they work. Guards who encounter criminal activity will alert the authorities immediately rather than going through a communications centre.
Once the Batten-Hatchez office is established outside of the home of Chindit Batten, it will be staffed full-time with a rotation of three call centre personnel who will cover the dispatches. Guards will either be stationed at desks or patrol on foot at all facilities.
Clients must provide vehicles if their jobs require vehicle patrol (i.e., a facility with several buildings), but this will not be a focus of Batten-Hatchez Security.
Knowing how to write a funding proposal properly can make or break your business idea before it even gets off the ground.
4. Market Analysis Summary
The market for security guard services includes building management companies, retail businesses, event venues, and other businesses. IBISworld.com reports that the security services industry as a whole was $29.7 billion in 2008.
While this number includes investigative services and armoured car services, it is estimated that security guards accounted for $22.3 billion. This represents approximately 540,000 employees in the security guard industry.
While market revenue has dropped 2% in 2008 due to the recession, it is expected that the market will rise again due to increasing outsourcing of security services by companies who will delay hiring their own full-time employees as the recession ends.
The continuing and growing concerns about security brought on by international terrorism are also expected to contribute to growth in the industry.
Of the potential targets available in Coastalburg Batten-Hatchez Security will focus on building management companies and retail businesses at the outset.
These businesses require steady security needs and serving them is simpler than serving special events.
The market analysis table shows the market segmentation for Coastalburg among the major market segments for security guard services. Growth is slow among these markets as new development is not prevalent in Coastalburg currently.
Building management companies generally install surveillance equipment and employ security guards to monitor that equipment, to staff front desks/security checks, and sometimes for general patrol.
These companies often work with a number of commercial or residential buildings and look to establish a relationship with one reliable vendor for all of their security guard needs. While some buildings require night-shift guards, others require only day coverage.
Large retail businesses use security guards to deter theft and to provide safety. These include department stores and other retail stores over 4,000 square feet, although some smaller stores may use security guards if they sell high-priced items (designer fashion, jewelry, technology, etc.).
Retailers require more guards during the day. Some simply lock the store at night while some larger department stores use night patrols as well.
Event venues use security guards to monitor guest lists and fire capacities and to organize emergency response. Nightclubs and bars may be included in this category. However, most nightclubs and bars employ their own security personnel (or “bouncers”) directly and do not use vendors.
Event security has the same risks as other security, but there is limited time for security audits and situations change fast, making this a higher stress business that requires better trained guards. Events tend to happen in the evenings with weekday nights for corporate events and weekend nights for private events.
Educational institutions, such as primary and secondary schools and colleges, generally employ security officers to guard and patrol their buildings and campuses. Often these institutions employ their own in-house security staff, but they will sometimes use outsources security vendors. These institutions require night and day patrols.
There are two kinds of security companies, one that sells products and one that sells services or you can combine both.
Target Market Segment Strategy
Batten-Hatchez Security will target the first two of these target markets initially, building management companies and retail businesses. Both segments require ongoing security vendors and are eager to establish long-term relationships.
Once relationships are established, good customer service, quality assurance, and competitive pricing can ensure that the relationships are retained and that the security provider is considered a true partner in the protection of the building or businesses’ assets and people.
Furthermore, the other two target markets listed will be taken on at a later date, if at all. Event venues require more specialised services and may be a slower market to tackle.
Related: Target Market Worksheet
Educational institutions are often eager to establish their own security staffs, making this a difficult market to establish a strong foothold in as well.
Service Business Analysis
According to IBISWorld, there were 41,000 security services firms in the U.S. in 2008 running 56,000 establishments. The average size of a firm was $700,000 revenue per year based on these numbers, meaning that the industry includes both small and larger companies.
There are few barriers to entry, as long as basic legal requirements are met, as the capital investment in the business is very low. The industry depends on a supply of labor, often using retired police officers as security guards.
As security guard services are sold business-to-business, marketing and advertisement is generally targeted on the markets and industries the security companies seek to serve. Businesses generally search for security guard providers on the Internet or through referrals from other companies they trust.
Competition and Buying Patterns
Top players in the industry include Securitas AB, Allied Security LLC, The Brink’s Company, and G4S plc.
Huge players provide services for a huge range of markets, including governments, chemical and petrochemical, colleges and universities, commercial real estate, financial institutions, health care facilities, manufacturing and industrial, residential communities, shopping centers, and temporary security services.
Smaller security companies achieve success based on the expertise and reputation of their founding managers and the growth of a team with a similar track record. The continued success of a company depends on client satisfaction, leading to referrals.
Larger institutions and governments may receive several bids for security contracts, while smaller businesses (such as many that Batten-Hatchez Security will target) often prefer to try out security companies and move on if they do not meet expectations.
The smaller the amount of assets being protected, the more willing a company will be to risk their security on educated hunches about a security company without feeling the need to do due diligence on a number of options.
IBISworld reports the following about the security industry:
- While the public’s perception of the rising crime rate assists revenue, the most significant factor which increases the demand for this industry’s services is a breach of an existing security system, a break-in or a near break in. The economic crisis has hurt demand over the past two years but things will soon begin to improve.
- In Coastalburg, security guard service competitors include securityguard.com, Top Guard Security, US Security Guard Services, and Trend Security Corporation.
Vending Services Sample Business Plan
Every start-up business that offers vending services requires a professional business plan.
Vending Services Business Plan
Chef Vending, LLC is a family start-up business that specializes in importing vending machines and commercial food & beverage equipment from Spain. We will penetrate the vending industry with innovative, first to market, high quality vending machines. We will establish our own vending routes in the Southern and Central Florida region. We also plan to participate in the $321 billion food & beverage industry by supplying high-quality innovative equipment. With the establishment of one strategic alliance with a national brand name in either of our vending lines, we expect to easily exceed our financial forecasts.
Chef Vending’s mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can.
Chef Vending, LLC, is a privately-held Florida corporation and maintains an office and a small warehouse in a mixed-use area of North Miami Beach, Florida.
Three of the four investors in the company have full operational responsibility. Mauricio Ordonez and Javier Palmera, the co-founders, have both entrepreneurial and industry experience. Charles Mulligan brings operational management and financial skills to the operation.
Chef Vending will have two product lines, each for the various markets it serves. Our vending products line will include our unique Sandwich Express machine, our Fresh Orange Juice machine and our Multi-line Dispenser. Our restaurant equipment products will be toasters, espresso makers, and fresh juice squeezers.
Most of our products, such as Sandwich Express are innovative machines that have functions and advantages not found in today’s common vending machines, thus providing Chef Vending a competitive advantage over more established competitors.
We plan to aggressively enhance our existing line in the future. Our immediate plans are to include a larger model of Sandwich Express that will offer a greater variety of sandwiches, and a more diverse product line, such as pizza. Other products are in the exploratory phase.
We are also pursuing supplier relationships with large nationally-branded juice and sandwich manufacturers, to customize our machines to their products. This would enable Chef Vending to supply machines to national companies and allow them to brand the machines with their product lines.
Revenue from U.S. vending consumable merchandise was $24.5 billion last year, an increase of 4.9% over the previous year, according to the Automatic Merchandiser magazine’s latest State of the Vending Industry Report. Small companies, with sales of less than $1 million, accounted for 5.8% of the market and had projected sales of $1.35 billion. Three quarters of all vending operators are classified in the small category.
Within the industry, snacks and cold beverages are the largest product segments and these two categories are the driving force of the industry. The food category grew at a rate of 7% last year, according to the Automatic Merchandiser. Cold storage machines grew at an even more impressive 42% last ylear, with this growth coming at the expense of shelf-stable products.
According to the National Restaurant Association, revenues from restaurants are expected to reach $321 billion. This is a large and healthy industry in our economy, and suppliers to this industry are expected to benefit from this growth.
All of this indicates that a fast moving, innovative company that can introduce enhanced products to vending machine/restaurant equipment customers stand to gain significant market share in a relatively short time span.
Chef Vending will market its machines to three distinct market segments including; distributors, branded sandwich and juice manufacturers, and end users. For our restaurant equipment business we will focus on restaurants and hotels and equipment supply companies.
Chef Vending’s objectives in our first year of operation are:
- Sell 400 vending machines.
- Directly place 10 vending machines, that we will operate, in the South Florida area.
- Achieve $500,000 in sales in our restaurant equipment line.
For the following two years our growth objectives are:
- Grow our vending machine and equipment business by 20% each year.
- Grow revenues by 25% in our directly operated vending machines.
Chef Vending’s mission is to be the leader in introducing innovative, quality vending machines and restaurant equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can. Chef Vending will secure sufficient profits from free cash flow from operations, to sustain its stability and finance future growth. We will add value to our community by maintaining a friendly, familial work environment.
1.3 Keys to Success
As a start-up company, new to the industry, and introducing new products, we must be focused and work hard to create acceptance for ourselves and our products within the marketplace. The keys to our success are:
- Quality support and service, recognizing that Chef Vending’s success depends most critically on the relationships it’s able to create.
- Innovative, quality products that are able to both expand existing markets and create new ones for our customers.
- Steady, disciplined pattern of growth.
- Our customers and keeping them happy.
Chef Vending, LLC, is a family-owned and operated import company that focuses on importing innovative vending machines and restaurant equipment from Spain. By serving a niche segment of the $24.5 billion dollar vending industry, we will position Chef Vending as a high-quality, innovative company, that creates value for its customers.
Located in North Miami Beach, Florida, three of the four investors have full operational responsibility. Mauricio Ordonez and Javier Palmera, the co-founders, have both entrepreneurial and industry experience. Charles Mulligan brings operational management and financial skills to the operation.
2.1 Company Ownership
Chef Vending, LLC, is a privately-held Florida corporation. Chef Vending is owned by three of its key employees, and one financial investor. The ownership breakdown is as follows:
Mauricio Ordonez- 40%
Javier Palmera- 20%
Charles Mulligan- 20%
Pedro Herrera- 20%
2.2 Company Locations and Facilities
Chef Vending maintains an office and a small warehouse in a mixed-use area of North Miami Beach, Florida. We maintain a showroom, where we provide customers with product demonstrations, a warehouse, where we keep an inventory of machines and supplies, and an administrative area to handle the business functions.
Chef Vending imports a variety of innovative products that serve the needs of special segments of the market. These machines all aim to expand existing sales and open new lines of sales for our customers.
3.1 Product Description
Chef Vending has three vending machines and three lines of restaurant equipment.
Our vending products are:
- Sandwich Express- This machine stores, in a refrigerated unit, up to 140 pre-packaged sandwiches. When an order is placed, the machine sends a sandwich from the refrigerator to the toaster, toasts the sandwich for a pre-determined time, and at a predetermined temperature. In approximately 60 seconds, a fresh, delicious, hot sandwich is served.
- Fresh Orange Juice (OJ) Machine- This machine, as its name implies, delivers a chilled 7 oz. cup of fresh squeezed orange juice. In a refrigerated unit, the machine stores up to 140 lbs. of juice oranges. This will yield approximately 110, 7 oz. cups. When an order is placed, the machine will dispense, from its refrigerated container, whole oranges that will be sliced in half, and then each half is pulverized for its juice. The juice will run through a filtering system to keep out the seeds and most of the pulp, to finally provide the customer with a 100% all natural cup of OJ in approximately 30 seconds.
- Multi-line- These versatile, low-cost, easy-to-maintain machines provide the end user with a variety of vending options, from phone cards to disposable cameras. Chef Vending is able to provide customers with machines that have either two, three, or four product lines; this will provide flexibility to maximize unit revenue.
Our restaurant equipment products are:
- Toasters- Coming with either a single or double toaster, these panini-type toasters provide the commercial establishment with an automatic machine that frees up service personnel for other customer service tasks. These machines will toast sandwiches, pastries, and a variety of other menu items, in a predetermined time and temperature, automatically dispensing the food item when done.
- Espresso Maker- This high-quality espresso maker makes single-serve cups of delicious gourmet coffee from pre-packaged coffee pods. These pods provide great benefit to the owner by reducing the cost of measuring for each new order, and eliminating the waste associated with the traditional methods.
- Fresh Juice Squeezer- This commercial grade machine will squeeze fresh, whole-juice oranges to allow the owner to sell a cup of fresh-squeezed orange juice.
3.2 Competitive Comparison
Both our Sandwich Express and Fresh OJ machines will be first to market. Currently, the market only provides a sandwich, or other hot meals, that must then be microwaved. We will be the first to market a vending machine that both toasts the sandwich, and then delivers it hot to the customer. Our machine’s products will enjoy a qualitative advantage over microwaved products as well.
For juice drinks, the market only offers bottled or canned juices for a customer to purchase. Our OJ machine will literally squeeze a fresh cup each and every vend. A qualitative advantage over other machines is the fact that the product is free of additives and refined sugars.
There are a number of similar multi-line machines on the market today. We will offer the customer a quality product at prices below the prevailing market rates. Our machines also enjoy distinctive packaging that will compete favorably with the products currently in the market.
We will also be first to market a fully automated line of toasters. Currently, the toasters on the market require the food service worker to manually monitor the cooking process, where ours automatically toast and dispense, freeing the service worker to engage in other customer service tasks.
Our espresso coffee makers will compete with the existing espresso makers on the market today. Our machines will offer the pre-packaged coffee pod which will be a cost savings to the end user. We will also compete with an aggressive pricing strategy.
Our fresh juice machines will be priced aggressively as well, in order to better compete in the market.
3.3 Sales Literature
Sales brochures have been developed as part of our start-up expenses.
Chef Vending imports its machines from Spain. For oranges and sandwiches, we contract with local suppliers.
Chef Vending’s mission is to be the company that introduces innovative products to the market. To achieve this, we will search out the latest in food preparation technology in the vending and equipment business. As first to market, we currently enjoy a technological advantage over the competition.
3.6 Future Products
To enhance our existing line, we are looking at a larger model of Sandwich Express that will offer a greater variety of sandwiches, and a more diverse product line, such as pizza.
We are also pursuing supplier relationships with large nationally-branded juice and sandwich manufacturers, to customize our machines to their products. This would enable Chef Vending to supply machines to national companies and allow them to brand the machines with their product lines.
As we increase our presence in the equipment business, we will continuously search out products to expand our existing line. A key component of this will be the feedback from our customer base.
Market Analysis Summary
Revenue from U.S. vending consumable merchandise was $24.5 billion in 1999, an increase of 4.9% over 1998, according to the Automatic Merchandiser magazine’s State of the Vending Industry Report in August 2000. This figure includes both machines and products. Small companies, with sales of less than $1 million, accounted for 5.8% of the market and had projected sales for 1999 of $1.35 billion. Three quarters of all vending operators are classified in the small category.
Within the industry, snacks and cold beverages are the largest product segments, representing 29% and 25% of the industry, respectively. These two segments are the driving force of the industry. The food category grew at a rate of 7% last year, according to the Automatic Merchandiser. Cold storage machines grew at an even more impressive 42% in 1999, with this growth coming at the expense of shelf-stable products.
Broader economic and cultural trends are also positively impacting the industry. Food sales away from home have become a larger part of total food sales in the U.S. since the 50’s, according to the Department of Agriculture. Technomic, a Chicago-based research firm, reports an increase in demand for takeout meals as the percentage of two-parent households declines, along with the decline of the three regular sit down meals per day.
Consumer preferences about taste, price, nutrition, convenience, and technology are changing. These changes favor the vending industry, which now has the opportunity to spot these trends and develop their markets.
According to the National Restaurant Association, revenues from restaurants are expected to reach $321 billion in 1999. This is a large and healthy industry in our economy, and suppliers to this industry are expected to benefit from this growth.
4.1 Market Segmentation
Chef Vending will market its machines to three distinct market segments:
- End Users- Operators that have their own vending routes who wish to expand their product selections. Included in this category are large institutional food service companies that engage in vending operations as part of their overall food service business.
- Distributors- Companies that supply operators with machines and supplies for their operations.
- Branded Sandwich Manufacturers and Branded Juice Companies- By working closely with these companies, we will customize our machines to meet their specifications and to allow them to “brand” our machines with their products. They will either supply the machines or sell them to their customers who will buy product supply for the machines from these companies.
We have two markets for our equipment business:
- Restaurants and Hotels – End users who benefit from the equipment purchased.
- Equipment Supply Companies- These are large supply houses that offer a variety of equipment to the food & beverage industry.
4.2 Industry Analysis
The U.S vending industry is divided into three main segments:
- Operators- Companies that buy and place vending machines on their routes, sell the product and service the machine, and range from small family businesses to large national companies.
- Manufacturers- Companies that manufacture machines for sale to operators.
- Distributors- The link between the manufacturer and the operator. Supplies the market with both machines and products for operators.
The food & beverage industry is divided into similar segments:
- Food & Beverage Establishments- This segment covers the entire spectrum of bars and restaurants.
- Suppliers- Companies that supply the establishments with all of their food, paper, and equipment needs.
- Supply Houses- Acting as a distributor, these firms supply an area with their required supply needs.
4.2.1 Competition and Buying Patterns
Both the food & beverage and vending industries are highly competitive. Price, Return On Investment (ROI), reliability, and customer service are the factors most effecting a buying decision.
There are many large name brand companies with vending machines in the market. We will focus on creating a niche market for our innovative machines, to compete with larger more recognizable names. By being first to market, we have a unique opportunity to brand ourselves and our machines.
Buying patterns are fairly consistent across the year.
4.2.2 Distribution Patterns
Distribution in the vending industry typically runs through a distributor. These distributors will carry a brand of machine for sale in a defined geographic region. In some instances, manufacturers sell direct to operators or end users. Another form of distribution is to be a supplier to a nationally branded company. Similar distribution patterns are established in the food & beverage industry.
4.3 Target Market Segment Strategy
Chef Vending’s initial strategy is to offer all of our products to all segments of the market. We will focus on both the end user and the distributor initially, as the strategy to secure accounts with the nationally branded companies will take some time to realize. We will reach our target market in one of three ways. First, we have begun a small advertising scheme in industry trade publications highlighting the many features and benefits of our products. Secondly, we have joined the National Automatic Merchandiser Association (NAMA) and have introduced ourselves and our products to distributors and end users at the NAMA annual convention in October, 2000; we will also participate in their Southeast regional show in South Carolina and in their national show next year. Finally, we will pursue personalized relationships with contacts developed at these shows and with regional companies in the South and Central Florida area.
For equipment sales, we will focus on end users and distributors in the South and Central Florida regions. As we gain market share in these markets we will expand geographically.
4.3.1 Market Needs
The principle market need we will be addressing will be revenue. Each of our machines will act to expand existing sales for operators, and in many cases will create new markets entirely. For the operator that is already vending snacks, a high end sandwich will enable this operator to expand his or her sales without cannibalizing existing sales. For the coffee vendor, a perfect compliment to a gourmet cup of vended coffee will be a fresh cup of orange juice. By creating a new untapped market, the operator will be able to expand revenue streams beyond their existing accounts. Another important need we will fill with our multi-line machines and our equipment, will be price. As we will be competing with existing supplies already in the market, we will price our products to be highly competitive in order to attract clients.
4.3.2 Market Trends
Growth rates in both the vending industry and the restaurant industry remain strong. This growth is fueled by the changes in the workplace and workforce that are causing workers to consume more of their meals away from home. Away from home food sales are expected to increase by 53%, according to NAMA.
As more and more consumers eat away from home, the demand for higher quality is also growing. Vendors are now offering a full line of packaged frozen meals in their machines. Margins will increase as premium prices are being placed on branded, high-quality products.
Demographic trends are affecting the industry. A large group of young adults, who mainly grew up on fast food, have emerged as an economic force. This group’s perceptions on fast food, technology, and vending, will have a positive impact in the vending business. Furthermore, overall population growth rates, and immigration trends particularly, will also have a tremendous economic impact on the vending industry. Much of the growth in both of these areas will be in the Southeast, where Chef Vending is poised to capitalize on these trends.
4.3.3 Market Growth
Studies by Automatic Merchandiser reflect an industry growth rate of approximately 4.8% over the last five years, matching the overall growth of the U.S. economy.
Gift Baskets Sample Business Plan
If you are beginning a business that specializes in gift baskets then you will find this sample business plan most useful.
Gift Baskets Business Plan
Basket of Goodies (BOG) is a premier gift basket retailer. BOG is concentrating on making gourmet gift baskets out of a wide range of high-quality ingredients. In addition to having several flagship baskets, BOG will also offer the option of a custom basket allowing the customer to choose the ingredients themselves. BOG will be selling to individuals as well as corporations. Initially the bulk of BOG’s business will be generated by individuals from word-of-mouth referrals, but as time passes, corporations will become a growing percentage of sales.
Once up and running with some momentum, BOG will be steadily producing profits. It is projected that BOG will be making a profit by December. By the end of year three, it is projected that BOG will be generating a net profit of approximately $21,000.
The Basket of Goodies’ mission is to create the finest gift baskets available. BOG, soon to be located in Salem, OR, will be hand assembling our products out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee.
Susan Presento, founder and owner, managed a flower shop in Salem for three years and this has given her insight to the gift giving practices of Oregonians. The primary gift baskets that will be offered are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allows customers to pick items from a list and BOG will assemble the basket with its custom ingredients.
The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.
BOG’s competitive advantage will be based on two factors, low overhead which allows reasonable prices, and an unrelenting desire for the highest quality product and service.
- Low overhead
- Highest quality product and service
BOG’s sales strategy will be targeted at obtaining both the individual and corporate clients through word-of-mouth referrals. Customers will be able to place an order at the office, over the phone or via the website.
The Basket of Goodies’ mission is to create the finest gift baskets available. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our products and services will exceed the expectations of our customers.
The objectives for the first three years of operation include:
- To create a home-based company whose primary goal is to exceed customer’s expectations.
- To increase the number of clients served by at least 20% per year through superior performance and word-of-mouth referrals.
- To develop a sustainable home business, surviving off its own cash flow.
BOG, soon to be located in Salem, OR will offer a wide range of gourmet gift baskets, production as well as custom units. BOG will be hand assembling the baskets out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee. If the business goes per the forecasted plan, the business will achieve profits by the end of year one.
2.1 Company Ownership
The Basket of Goodies will be a sole proprietorship, owned by Susan Presento.
2.2 Start-up Summary
BOG’s start-up costs will include all the equipment needed for the home-based office, legal fees, website creation, and start-up advertising. The home office equipment will be the largest chunk of the start-up expenses. This equipment includes a computer system, fax machine, office supplies, cellular phone, and pager. The computer should have a 500 megahertz Celeron/Pentium processor, 64 megabytes of RAM (preferably 128), 6 gigabyte hard drive, and a rewritable CD-ROM for backing up the system. Additionally, there will be the expense installation of a broadband connection. While a broadband connection is not totally necessary, it only costs between $40-50 per month for service and will make working on the Internet significantly faster and easier.
The home office will also require a few pieces of furniture such as a desk, chair, and bookshelf to transform a standard room into an office. Lastly, an additional land phone line will be required. The legal fees are used for the formation of the business as well as for reviewing/generating standard client contracts. The Web creation fees at start-up costs are for design and creation of the website. The start-up advertising will be the production of brochures.
BOG sells gourmet, hand-assembled gift baskets. Their premier baskets are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allow customers to pick items from a list and BOG will assemble the basket with their custom ingredients.
For the customer baskets, BOG will provide a list of options grouped into four different categories. The customer then chooses two items from each of the four categories and the gift basket is made for them. BOG highlights four previously mentioned premier baskets. In addition to these, BOG will typically have one or two specials, often seasonally based.
Market Analysis Summary
BOG will be going after two distinct market segments, individuals and corporations. Both groups buy gift baskets as a goodwill gesture, typically for different reasons. Individuals typically buy the baskets as a present with over half of sales occur during holidays. Corporations buy the baskets as presents as well, but usually for events unrelated to the holidays. By going after both of these groups, sales will be less seasonal (relative to if only the individuals were targeted).
There are many different “gift basket” retailers in Salem. BOG will differentiate themselves through the use of premium ingredients in their baskets. The gourmet baskets, coupled with a custom option and reasonable prices (attributed to low overhead) will spell success for BOG.
4.1 Market Segmentation
BOG’s has two distinct groups of customers, individuals and corporate customers:
- Individuals- The individuals are people who are looking to give a friend, relative, colleague, etc., a gift basket as a gesture of goodwill. These customers typically do not have a specific type of gift basket in mind when they look at BOG’s product offerings, they just want to give a gift.
- Corporate- The corporate customer is typically buying the basket for a colleague at work, either as a sign of appreciation, for a special event, or as a thank you for a customer. The corporate market can be further broken down to banks, health care, employment gifts, real estate, apartments, special events/promotions, corporate headquarters, hotels/vacation resorts, and automobile dealerships.
4.2 Target Market Segment Strategy
BOG is focusing on individuals and corporate customers because they are the largest segments of purchasers for gift baskets. Individuals are the target purchaser of gift baskets. They purchase baskets typically as a thank you in response for something the recipient did or just to be nice. The gift basket is unmistakingly a gift so upon receipt there is no ambiguity why it was sent or at least what it is trying to accomplish. Within the individual category, women are 69% more likely to be the purchaser of a gift basket compared to men. This is not to say that women more often purchase gifts, it just indicates women are more likely to buy gift baskets.
BOG is focusing on the corporate customers as they currently represent approximately a third of the purchasers of gift baskets. The corporate customer could be buying the basket for someone within their company, or they could be buying it for a customer, vendor, etc. The trend for the corporation to purchase gifts is not a new phenomenon and therefore would appear to be a solid market segment to pursue.
4.3 Industry Analysis
There are many different forms of competition in the gift basket business:
- Similar gift basket type retail stores: There are several of these stores located in Salem. These competitors offer a wide range of gift baskets, however none of them are concentrating on the higher end, gourmet product line.
- Nut/fruit companies: There are several stores that concentrate on nuts and or fruit baskets.
- Bath product gift basket companies: There is currently one gift basket company that concentrates on bath products. Bath products have a slightly smaller population of people who appreciate these products (as women predominately appreciate bath products more then men do).
- Regional gift basket: There is one retailer that sells gift baskets composed of local products. These type of baskets tend to appeal to people that are buying gifts for people that are not from this area.
- Candy gift baskets: There are several candy stores that offer, as one on their products, a candy gift basket. Similar to the bath products basket, candy typically appeals to women a bit more so then men.
- Florists: Flowers are a similar product that competes with gift baskets. Once again flowers tend to appeal to women more so then men.
The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.
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