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Insurance Company Sample Business Plan

Before you start up your insurance company you will need to put together a business plan similar to this sample.

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Insurance Company Business Plan

Executive Summary

By focusing on its strengths, its present client base, and new value priced products in the next year, Acme Insurance plans to increase gross sales by 10% and profit by 15%.

Our Keys to Success and critical factors for the next year are, in order of importance:

  • Identify “Target Markets.”
  • Institute our Property inspection program.
  • Begin our “Insurance Partners” program.
  • Develop a profitable property program.
  • Provide small businesses with an affordable basic business package.

Acme Insurance Incorporated has been profitable, but recently we have had  declining market share  and this must be addressed. Therefore our goals are:

  • To re-establish Acme Insurance Inc. as the market leader in quality and value-priced insurance products in Smalltown District.
  • Establish good working relationships with our present insurance markets by meeting with their decision makers and plotting a mutual plan for success. Get commitments for support and products that we can market in our trading area starting April 1st of Year 1.
  • Investigate new markets that meet our marketing criteria by a) committing to small rural brokerage; b) providing products suitable to our economic and social climate; and c) plans for the upload and download of insurance policies.
  • Provide sales incentives to staff to meet sales goals of 10%.
  • Complete inspection of all Pilot homeowners within one month before renewal date.
  • Formulate plans to acquire another brokerage

Acme Insurance Inc. is dedicated to providing insurance products that provide quality protection with value pricing. We wish to establish a successful partnership with our clients, our staff members, and our insurance companies, that respect the interests and goals of each party.

Success will be measured by our clients choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and expertise.

In order to implement our strategic goals, we will focus on developing the following tools.

Knowledgeable, friendly staff that can empathize with our consumers needs and circumstances, especially in handling a loss.
Policies that meet or exceed the expectations of our clients, and that are affordable, available, and understandable.
Policies and endorsements delivered on time with minimal errors.
A commitment to an annual insurance review for all of our clients. A phone call is more than any direct mass marketer offers. We believe personal contact and service is the cornerstone of our success.

Acme Insurance primarily markets and services Personal Lines Insurance. Its customers are mostly rural, lower income families or long time resident senior citizens who demand value priced insurance premiums in keeping with their lower and fixed incomes.

We also provide insurance to small business, mostly family-run seasonal operations primarily focused on the tourist trade.

Acme Insurance is a privately incorporated company in the Smalltown district and is licensed to transact both Life and General Insurance. The shares are held equally by John Smith and Peter Smith.

Our Insurance and Real Estate brokerage operates from two central locations. Our modern attractive office in Smalltown, at 178 Small Street, is located in a small plaza which is owned by the principals of our brokerage. It comprises 2,000 square feet.

In Nexttown, we operate from an 800 square foot, one-story brick veneer building overlooking Lake Small, which again is owned by the principals of our firm. The office is strategically located across from the Post Office.

We have stressed to our insureds the importance of good communication between the broker and client to insure proper coverage is in place. We have noticed as our clients become better informed about insurance that there has been a tremendous increase in clients wishing in-depth discussions about their policy coverage and how they can get the most value for their insurance dollar.

Our company’s strength lies in the quality and depth of our products and staff. Our offices, unlike our competition, are open six days a week. Because of our larger staff, we are able to service our clients even when a client’s broker is busy or out of the office on inspections.

Our staff has specialists in commercial insurance that can properly service and underwrite local business. We also have some quality commercial markets unavailable to our competition.

Our Real Estate division, which is a separate company, helps with market value and replacement cost analysis when required.

The past few years have seen tremendous upheaval in the insurance industry. The number of players has decreased in both the broker and company communities. The recession has curtailed insureds from properly maintaining their homes and automobiles, and insurance fraud has become a major issue for the entire insurance industry.

Brokers are concerned that in spite of commission reductions, quotas, contract cancellations, and refusal to write new auto business by some markets, they now may find themselves in competition with some of the traditional broker distribution companies that are setting up direct marketing facilities and branches. The banks now have announced they will open stand alone insurance offices to retail insurance.

In spite of the above, we believe that the independent broker will survive. We are more automated than most service industries. We are close to the customer, regardless of some insurance companies’ attempts to sever the traditional broker-client relationship. Our clients, in most cases, still do not care or know which company we place them with. They trust our judgement in selecting the proper coverage and company to place them in.

Upload/download capabilities are in many brokers offices, including our own. This will cut costs, improve efficiency and accuracy, and help us meet the competition from banks and direct writers. Companies that truly value and trust the broker distribution system will align themselves with professional brokers and grant more underwriting authority similar to Lloyds.

Among the substitutes that are our main competition we have Local independent brokers, Agents (such as Co-operators), Mass Markets, Mass merchandise programs heavily advertised over the radio such as “Gray Power”, and Group Plans.

We have depended in the past on a small advertisement in our local newspaper, listings in the Yellow Pages, and word of mouth. However with the changes in the market today, we must begin to investigate alternate ways to put our name in front of the public. We have set out several criteria for our marketing campaign that include”

  • All advertising has to emphasize our differentiation point rather than price.
  • We must sell the company, not the product. In spite of some companies’ efforts to minimize the importance of the broker, our clients still identify with the broker, not the insurance company.
  • We must improve and increase our contacts with our clients.
  • Make contacts and support senior citizen groups and cottage associations.

Based on these changes in our goals, outlook, and company culture, we anticipate that we will be able to increase revenues substantially by year 3 of the plan and increase net profit handsomely. The company does not anticipate any cash flow problems.

1.1 Mission

Acme Insurance Inc. is dedicated to providing insurance products that provide quality protection with value pricing. We wish to establish a successful partnership with our clients, our staff members, and our insurance companies, that respect the interests and goals of each party.

Success will be measured by our clients choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and expertise.

1.2 Objectives

  • To re-establish Acme Insurance Inc. as the market leader in quality and value-priced insurance products in Smalltown District.
  • Establish good working relationships with our present insurance markets by meeting with their decision makers and plotting a mutual plan for success. Get commitments for support and products that we can market in our trading area starting April 1st of Year 1.
  • Investigating new markets that meet our marketing criteria by a) committing to small rural brokerage; b) providing products suitable to our economic and social climate; and c) plans for the upload and download of insurance policies.
  • Provide sales incentives to staff to meet sales goals of 10%.
  • Complete inspection of all Pilot homeowners within one month before renewal date.
  • Formulate plans to acquire another brokerage.

1.3 Keys to Success

We believe the keys to success in a small town insurance business are:

  • Knowledgeable, friendly staff that can empathize with our consumers needs and circumstances, especially in handling a loss.
  • Policies that meet or exceed the expectations of our clients, and that are affordable, available, and understandable.
  • Policies and endorsements delivered on time with minimal errors.
  • A commitment to an annual insurance review for all of our clients. A phone call is more than any direct mass marketer offers. We believe personal contact and service is the cornerstone of our success.

Company Summary

Acme Insurance primarily markets and services Personal Lines Insurance. Its customers are mostly rural, lower income families or long time resident senior citizens who demand value priced insurance premiums in keeping with their lower and fixed incomes.

We also provide insurance to small business, mostly family-run seasonal operations primarily focused on the tourist trade.

2.1 Company Ownership

Acme Insurance is a privately incorporated company in the Smalltown district and is licensed to transact both Life and General Insurance. The shares are held equally by John Smith and Peter Smith.

2.2 Company History

Acme Insurance was founded as a sole proprietorship in 1938 and was owned and operated by the founder Stan Smith. He originally ran the operation from his home, but moved to the business section of Smalltown when he outgrew his home based operation.

In 1972, the company constructed a new office building in the main business section and over the course of the last 15 years has purchased four other brokerages, one of which led to the establishment of our branch office in Nexttown.

In 1988, a new company was formed “Acme Insurance Inc.” which bought the insurance business from “Acme Insurance Limited.” All shares in the new company are owned by John S. Smith and Peter Smith.

Today, the fourth generation of Smiths, Stephen and Jason Smith, are working in the firm. We are also gratified to report that our founder, Stan Smith, is still in our office every day, and although still licensed, he is only active in a “goodwill ambassador” capacity.

2.3 Company Locations and Facilities

Our Insurance and Real Estate brokerage operates from two central locations. Our modern attractive office in Smalltown, at 178 Small Street, is located in a small plaza which is owned by the principals of our brokerage. It comprises 2,000 square feet.

In Nexttown, we operate from an 800 square foot, one-story brick veneer building overlooking Lake Small, which again is owned by the principals of our firm. The office is strategically located across from the Post Office.

Our Smalltown operation enjoys its own private parking lot for our clients and our staff. A second story was recently added to our office which will allow ample room for expansion. It is presently used for training, staff meetings, and conferences.

Services

Acme Insurance is committed to providing professional sales and service for its insurance customers. We have established what we consider to be an excellent reputation in our area, and are the largest multi-line insurance broker in our trading area.

3.1 Service Description

Acme Insurance provides home, automobile, and business insurance in Smalltown District. We take pride in knowing that for over 50 years we have helped our clients to find the best coverage at the right price that suits their needs and expectations. In the event of a claim, our clients know that we are there to provide help and counsel to ensure a fast, speedy claim settlement.

Like other independent brokers, we issue binders and new policies, endorsements and process renewals.

We have stressed to our insureds the importance of good communication between the broker and client to insure proper coverage is in place. We have noticed as our clients become better informed about insurance that there has been a tremendous increase in clients wishing in-depth discussions about their policy coverage and how they can get the most value for their insurance dollar.

We also provide insurance services to non-clients, such as lawyers and mortgagees, to ensure our mutual clients have proper coverage and binding notes in place for the purchase of homes, businesses, and automobiles.

3.2 Competitive Comparison

Our company’s strength lies in the quality and depth of our products and staff. Our offices, unlike our competition, are open six days a week. Because of our larger staff, we are able to service our clients even when a client’s broker is busy or out of the office on inspections.

Our staff has specialists in commercial insurance that can properly service and underwrite local business. We also have some quality commercial markets unavailable to our competition.

Since we are brokers, (not agents such as Co-operators), we have access to a range of standard and specialty markets.

Our Real Estate division, which is a separate company, helps with market value and replacement cost analysis when required.

3.3 Sales Literature

We have recently produced a pamphlet titled “Insurance Partners” which stresses that a successful insurance partnership between the client, the broker, and the company is based upon a new concept.

Not only do the broker and the company take responsibility for proper protection and indemnity in the event of loss, but in the 1990’s, the client must also take his share of responsibility to insure the safety of his property by keeping it well maintained and using qualified professionals to update or change the heating, electrical, and plumbing systems in his home. We stress that multiple claims or claims arising out of poor maintenance may adversely affect his insurance.

In addition to the above, our brokerage uses a number of boilerplate letters on our computer system that are sent along with various types of policies explaining unique features or limitations in the contracts to avoid possible Errors and Omissions claims. They also encourage our clients to contact us about reviewing their coverage and promote other products and services we provide.

3.4 Fulfillment

The key to fulfilling our clients needs is provided by our principals who have over 60 years experience between them as general insurance brokers, and our staff, many of whom have been insurance brokers well over 10 years. We have one staff member with her A.I.I.C., three staff with their C.A.I.B., and two more taking C.A.I.B. courses. One staff member is completing courses to have the restriction removed from his license so he can be an alternate designated individual.

We call upon the ample resources of our insurance markets to help with any unusual situations which occur and may present a problem finding proper coverage for our client.

When we required trained inspectors for evaluating the safety of our insured’s solid fuel heating devices and installations, we sent one of our own producers for training and who now has W.E.T.T. certification.

We are proud that Acme Insurance Inc. has never had an errors and omissions loss, but to protect our clients against that possibility, we have in place Errors and Omissions Insurance through our Insurance Brokers Association in the amount of $1,000,000 (Employer’s Reinsurance).

3.5 Technology

We have been fully computerized since 1982 and both offices and some of our producer’s homes are connected to our main computer server located in Smalltown.

As of February 1996, we have entered into an agreement with our present computer vendor, Teleglobe, to update our computer system to a Pentium server, and to Release 74, which allows upload/download capability with our companies, as well as email.

We have elected to stay with the Teleglobe Tabs system since our staff is familiar with the program. It has exhibited excellent, reliable telecommunications ability. The high speed ISDN lines required for MS Windows-based communication between our branch office as well as our home offices are not available in our trading area, so at present we will not migrate to the new MS Windows-based products available from Teleglobe or Agency Manager.

3.6 Future Services

Although Stan Smith started out as a life insurance agent, the “life” part of our business represents only 1% of our sales. We are looking to strengthen this part of our operation in the future. Due to the complexity and number of life and disability products, we are presently using an outside service: Atlantic-Smith Insurance out of North Town, although two of our general insurance producers have life agent licenses.

We are in the process of setting up a substandard property market. We feel that there is a need for this service and that it can be profitable if strictly underwritten with proper controls in place.

Market Analysis Summary

Recent demographic studies in our area reveal a total year-round population of approximately 13,000, which rises in the summer to approximately 25,000. We have a relatively high number of seniors and many younger, newly-formed families dependent on government assistance living mostly in a rural, unserviced, thinly populated area. This makes it costly to service our clients. Long distance phone bills represent our second largest expense (our two offices each have their own toll free phone numbers) and the cost of visiting our insureds to do home inspections is time consuming due to the large area we service.

We are targeting seniors which have proven to be a profitable, stable market for our brokerage in spite of our present difficult economy.

We are fortunate that we have not yet had the intrusion to a large degree of mass merchandising programs like “Silver Power.” Smaller brokers have made inroads into our traditional rural business, with low cost farm markets that sell home and auto insurance. We understand that some of these markets are in a poor financial position and may cease to be a factor in the future.

4.1 Market Segmentation

Our market consists of senior citizens, lower-income young families (many of who are on social assistance) and the small, family-run business (many of which are seasonal and based on the tourist trade). There are a few industrial risks and those that are located here are branches of larger industries which obtain their insurance through large brokers in Bigtown.

Our target market is the seniors, family business, and middle income earners in our area. Statistics show that over 42% of our permanent population is above 45 years of age. The average family income is approximately $27,000 and the unemployment rate 9%.

We are cautious about encouraging business from lower income prospects since they tend to have wood heat, homes in poor repair, and many attempt to install and repair their own plumbing, wiring, and heating systems.

Another market of concern is out-of-area clients who may have been payment or claim problems to local brokers and attempt to find a distant broker to provide coverage instead of making the necessary adjustments in their own lifestyle to prevent claims.

Clients who have moved repeatedly can be difficult to obtain proper underwriting information and past claims experience on, and we feel our staff is to be commended for their ability to properly assess if a client should be placed to our standard markets or would be better served by a specialty company.

4.2 Service Business Analysis

The past few years have seen tremendous upheaval in the insurance industry. The number of players has decreased in both the broker and company communities. The automobile product has, in the mind of the public, become unaffordable, unavailable, and impossible to understand. The recession has curtailed insureds from properly maintaining their homes and automobiles, and to exacerbate the situation, many clients have turned to wood heat and started doing their own repairs and maintenance which may have increased the number and severity of claims. Insurance fraud has become a major issue for the entire insurance industry.

Our traditional close relationship with our companies has been strained. Brokers are concerned that in spite of commission reductions, quotas, contract cancellations, and refusal to write new auto business by some markets, they now may find themselves in competition with some of the traditional broker distribution companies that are setting up direct marketing facilities and branches. The banks, even though thwarted by the federal government in its last budget to retail insurance from their premises, will continue pressure on the government and now have announced they will open stand alone insurance offices to retail insurance.

In spite of the above, we believe that the independent broker will survive. We are more automated than most service industries. We are close to the customer, regardless of some insurance companies’ attempts to sever the traditional broker-client relationship. Our clients, in most cases, still do not care or know which company we place them with. They trust our judgement in selecting the proper coverage and company to place them in.

The new federal government is close to adopting a new automobile contract that hopefully will make it affordable, understandable, and available to our clients. A profitable automobile product will entice the companies to aggressively seek new sales and more brokers will see companies offering contracts.

Upload/download capabilities are in many brokers offices, including our own. This will cut costs, improve efficiency and accuracy, and help us meet the competition from banks and direct writers. Companies that truly value and trust the broker distribution system will align themselves with professional brokers and grant more underwriting authority similar to Lloyds.

4.2.1 Main Competitors

Local independent brokers
Cal Roberts, Patrick C. Johnson, Rob Champlain
Strengths – alternate markets, especially small farm mutuals, that still continue to give low prices, still continue to write wood stoves, and allow discounts and underwriting terms such as table 1 rates on homeowners within 8 km of fire hall protection.
Weakness – most are smaller, one-man operations that do not have the backup or finances to aggressively impact the marketplace.

Agents (such as Co-operators)
Strengths – Large advertising budget and competitively priced products. Their commercial is difficult to compete against in some cases because they seem to not have the same restrictions on underwriting as our markets. Also they have large capacity to write certain risks.
Weakness- one small operation that does not have the same hours as our offices. Staff, because of salary, do not appear to be very knowledgeable or aggressive.

Mass Markets
Strengths – large advertising budget and very competitive prices.
Weakness – not local and largely unknown to our clients at the present time.

Our own Companies
Strengths – already known to our clients; will be competitively priced.
Weakness – an unknown quantity to our insureds. Also, if their people skills are similar to what they now exhibit, they will have great difficulty empathizing with the client and selling the client what he needs, not what they think he needs.

Mass merchandise programs heavily advertised over the radio such as “Gray Power”
Strengths – price.
Weakness – a still untried, unknown quantity.

Group Plans – teachers, public employees
Strength – group pricing.
Weakness – very little obviously, since we insure very few of the professions.

4.2.2 Competition and Buying Patterns

The main volume of income for our brokerage is generated by automobile premiums because they are relatively higher priced to insure than property, and because automobile insurance is mandatory in the region.

As stated previously, our success is dependent on our staff and our companies convincing our clients and prospective clients that price, although important, is not the only criteria for the purchase of insurance. Our advertising stresses that we have two offices, open six days a week with after-hours support and we have been an active, concerned, community involved, local business since 1938.

Still, price is very important and we must work with our markets to ensure that our insurance products are available and affordable to a large part of the market. It is the broker’s job to ensure the client understands what he is buying, and if circumstances dictate a lower-priced product, we must make our insured aware of the trade-off in coverage versus price.

4.2.3 Business Participants

Cal Roberts Insurance
Markets – Royal, Dominion of Canada
Patrick C. Johnson
Markets – General Accident, Canadian Surety
Rob Champlain
Markets – Farmer’s Mutual, National Frontier
Co-Operators
Silver Power
Markets – Trafalger
Con-struct Direct

4.2.4 Distributing a Service

Our trading area is rural. Premiums are relatively low and therefore not subject to large brokerages or specialty direct writers mounting aggressive advertising campaigns to bring in business. There are few group plans providing insurance coverage with the exception of our teachers. Smalltown has two independent brokers and a Co-Operators agent, Nexttown has two independent brokers, and Southtown has one. We have just started to see some move by locals to “Silver Power” and other specialty retailers who advertise on radio and television. The banks are still a future unknown.

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Services Businesses

Interior Design Business Plan Sample

Before you can start your new interior design business you will need a detailed business plan and this sample has the ideal guidelines.

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Before you can start your new interior design business you will need a detailed business plan and this sample has the ideal guidelines. Use this example to compile your own.

1. Executive Summary

Barton Interiors is a proposed venture that will offer comprehensive interior design services for homes and offices in the Boulder, Colorado area.

Barton Interiors also will provide access to products to complement the design consulting services including furniture, both new and antique, decorator fabric, and home and office accessories. This venture offers the personalised services the target market desires and can afford in a way that is unique from concept to implementation.

Download: Free Business Plan Template Download

Recent market research indicates a specific and growing need in the area for the interior design consulting services and products Barton Interiors offers the market it will serve.

The market strategy will be based on a cost effective approach to reach this clearly defined target market. Although the population of Boulder is under 100,000, the market has a significant quantity of relatively wealthy households that are conscious of the appearance and feel of their home and offices.

The approach to promote Barton Interiors with be through establishing relationships with key people in the community and then through referral activities once a significant client base is established.

Barton Interiors will focus on developing solid and loyal client relationships offering design solutions based on the client’s taste, budget, use, and goals for the space. The additional selection, accessibility of product, design services, and value-based pricing will differentiate Barton Interiors from the other options in the area.

Total revenues in the first year are projected to exceed $46,000 with a loss. The venture will show increasing profits in year two and three, with revenues projected to increase to almost $80,000.

Related: Business Plan Examples to Get You Going

This interior design business plan outlines the concept and implementation and details regarding the first three years of this venture.

Objectives

  • Realise an average of $3,870 of sales each business month for the first year, $5,720 for the second, and $6,600 for the third year.
  • Generate a minimum of 45% of revenues from product sales versus consulting billing.
  • Establish a commercial revenue client base accounting for 10% of total revenues.

Mission

Barton Interiors is an interior design service for discerning, quality-conscious clients that seek assistance in their design choices for their primary residences, vacation homes, and businesses.

This experience offers personal attention through the design process and also provides design resources and products to its clients through special purchases of furniture, fabric, and accessories.

The total experience is provided in a way to inform, inspire, and assist people through the process of transforming their home or business environment to become a unique and personalised expression of themselves and add to their enjoyment of that interior space.

Keys to Success

The primary keys to success for Barton Interiors will be based on the following factors:

  • Provide the highest quality interior design consulting experience possible.
  • Sell specially selected products to these clients to further meet their interior design needs.
  • Communicate with our client base through the website and personalised communication techniques.
  • Retain clients to generate repeat purchases and initiate referrals.

2. Company Summary

interior-design-company-summary

Barton Interiors is a start-up business that will offer comprehensive interior design services for home and office. This business will assist those that want to have guidance and council in developing a basic design concept of their project, to the person that desires someone to take it from concept to complete implementation.

Barton Interiors will offer the ability for clients to purchase new and antique furniture, art work, decorator fabric, and home accessories.

The website www.bartoninteriors.com will be used as another way to communicate the services available and provide a portfolio of the work accomplished. The business will begin as a home-based business and is expected to remain in this structure through at least the first three years.

Company Ownership

Barton Interiors, located in Boulder, Colorado is registered in the State of Colorado as a sole proprietorship owned and operated by Jill Barton dba Barton Interiors.

Company Locations and Facilities

Barton Interiors is operated from a home office located in Boulder, Colorado.  A room is dedicated to support a work area, a client contact work centre, and display samples of design concepts, products, and past work.


More On the Ideal Business Plan Format

A comprehensive business plan format guide. A full guide to the business plan contents including the standard business plan format for these 10 basic elements: The overview, executive summary; general company description; the opportunity; industry and market; your strategy; the team; a marketing plan; operational plan; financial plan and the appendix.


3. Products and Services

interior-design-products-and-services

Barton Interiors focuses on providing interior design consulting.  This is complemented by specially purchased furniture, art pieces, decorator fabric, and accessories for the home and office.

The sales process will begin with interior design consulting services, and then progress on to offer specially selected components to complement the design theme.

Products available through Barton Interiors include:

  • Furniture available through special purchase arrangements with Thomasville, Drexel Heritage, and Henredon and local craftsman.
  • A selection of decorator fabrics from Waverly, P Kaufmann, Fabricut, Ralph Lauren, Regal, Robert Allen, Latimer Alexander, Covington, and Portfolio.
  • A line of drapery hardware called “Oval Office Iron” purchased through Dept. of the Interior Decorator Fabrics in Eugene, Oregon found at www.fabric-online.com.
  • Accessory and art pieces available through wholesale shows.
  • Hunter Douglas window treatment products including a variety of hard window coverings.
  • Interior shutters made of wood and a plastic/resin product called “polywood.”
  • Antiques acquired for specific client needs through an arrangement with a local antique buyer and through direct purchases through other sources.

Product and Service Description

Our primary points of differentiation offer these qualities:

  • A unique client experience from a trained and professional interior designer that is qualified and capable of meeting the needs of discerning clients with high expectations.
  • Access to a wide and unique selection of new and antique furniture, accessories, and special-order decorator fabrics.
  • Personal assistance from a complementary product offering, including hard-covering window treatment, hardware, and home accessories that fit the look and objectives of each project.

Competitive Comparison

Our competition is primarily from other interior designers.  Looking at a broader picture, there is also competition from the “do-it-yourself” resource providers that have retail stores and websites that include the following:

  • Bed, Bath and Beyond moved into the market in the year 2000 at an excellent location.
  • Discount stores including Target, Wal-Mart and Home Depot have expanded their fabric, bedding, pillow, and ready-made drapery selections often representing lines including Waverly.
  • Norwalk continues to make purchasing “blank” furniture and making a designer fabric selection an attractive option to recovering furniture.
  • Catalog sales continue to be a strong force with a list including Pottery Barn, Calico Corners, Ballard Design, and Eddie Bauer expanding purchasing selection.
  • The list of competitors for home accessory competition includes Pier 1 and local competitors that provide an entire list of other furniture, accessory and gift stores.
  • Web sales of furniture, fabric and other interior design-oriented products has expanded dramatically and in many cases is easily available.

Sales Literature

A simple and professional looking brochure will be available to provide to referral sources, leave at seminars, and on a select basis, use for direct mail purposes.

Related: Free Action Plan Template Download


4. Market Analysis Summary

interior-design-market-analysis-summary

Barton Interiors has a defined target market client that will be the basis of building this business. This client is identical for both the residence and office spaces, but the target market is identical based on her different roles for each of those spaces.

Effective marketing combined with an optimal product offering is critical to the Barton Interiors’ success and future profitability.

The owner possesses solid information about the market and knows a great deal about the common attributes of those that are expected to be prized and loyal clients.

Related: How To Create A Marketing Strategy

This information will be leveraged to better understand who Barton Interiors will serve, their specific needs, and how to better communicate with them.

Market Segmentation

The profile of the Barton Interior client consists of the following geographic, demographic, psychographic, and behaviour factors:

Geographics

  • The geographic market is the affluent sector within the Boulder, Colorado area with a population of 94,673. (Based on the 2000 Census data.)
  • A 20-mile geographic area is in need of the products and services offered and do not intend to pursue the Denver market at this time.
  • The total target market population is estimated at 24,000 based on the following demographics.

Demographics

  • Female, married and have attended college.
  • Have children, but they are not necessarily at home.
  • A combined household annual income greater than $100,000.
  • Age range of 35 to 55 years, with a median age of 42.
  • Owns their home, townhouse and/or condominium valued at over $425,000.
  • They and/or their spouse work in a professional setting and may have interior design requirements for their office space as well as their homes.
  • Belong to one or more business, service, and/or athletic organisation including:
  • Boulder Country Club.
  • Junior League of Boulder.
  • American Business Women’s Association.
  • American Auxiliary of University Women.
  • Doctor’s Wives Auxiliary.

The following is known regarding the profile of the typical resident of Boulder:

  • 67%  have lived in the area for seven years or more.
  • 23%  are between the ages of 35 and 44.
  • 40%  have completed some college.
  • 24%  are managers, professionals and/or owners of a business.
  • 53%  are married.
  • 65%  have no children living at home.
  • 56%  own their residence.

Psychographics

  • The appearance of her home is a priority.
  • Entertaining and showing her home is important.
  • She perceives herself as creative, tasteful and able, but seeks validation and support regarding her decorating ideas and choices.
  • She reads one or more of the following magazines:
  • Martha Stewart Living.
  • Country Living.
  • Home.
  • House Beautiful.
  • Country Home.
  • Metropolitan Home.
  • Traditional Homes.
  • Victoria.
  • Elle Decor.
  • If she does seek out television as an information source for home decorating that is most likely to be “Martha Stewart” and, on a lesser basis, “Interior Motives.”

Behaviours

  • She takes pride in having an active role in decorating their home.
  • Her home is a form of communicating “who she is” to others.
  • Comparison positioning and stature within social groups are made on an ongoing basis, but rarely discussed.

Barton Interiors is providing its clients the opportunity to create a home environment to express who they are. They seek design assistance and have the resources to accomplish their goals.

They desire their home to be personal, unique, and tasteful as it communicates a message about what is important to them. Barton Interiors will seek to fulfill the following benefits that are important to our clients.


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Target Market Segment Strategy

interior-design-target-market-segment-strategy

Our marketing strategy will create awareness, interest, and appeal from our target market for what Barton Interiors offers its clients.

The target markets are separated into four segments; “Country Club Women,””Boomers in Transition,” “Professional Youngsters,” and “Home Builders.”

The primary marketing opportunity is selling to these well defined and accessible target market segments that focuses on investing discretionary income in these areas:

Country Club Women – The most dominant segment of the four is comprised of women in the age range of 35 to 50. They are married, have a household income greater than $100,000, own at least one home or condominium, and are socially active at and away from home.

They are members of the Boulder Country Club, Junior League of Boulder, AAUW, and/or the Doctor’s Wives Auxiliary. They have discretionary income, and their home and how it looks is a priority. The appearance of where they live communicates who they are and what is important to them.

This group represents the largest collection of “Martha Stewart Wanna Be’s,” with their profile echoing readers of Martha Stewart Living magazine, based on the current demographics described in the 2001 Martha Stewart Living Media Kit.

Related: Target Market Worksheet

Boomers in Transition – This group, typically ranging in age from 50 to 65, is going through a positive and planned life transition.  They are changing homes (either building or moving) or remodeling due to empty nest syndrome, retirement plans, general downsizing desires, or to just get closer to the golf course. 

Their surprisingly high level of discretionary income is first spent on travel, with decorating their home a close second.  This is what makes this segment so attractive. 

The woman of the couple is the decision maker, and often does not always include the husband in the selection or purchase process.

Professional Youngsters – Couples between the ages of 25 and 35 establishing their first “adult” household fall into this group.  They both work, earn in excess of $80,000 annually, and now want to invest in their home. 

Related: 10 Questions to Ask Before Determining Your Target Market

They seek to enjoy their home and communicate a “successful” image and message to their contemporaries.  They buy big when they have received a promotion, a bonus, or an inheritance.

Home Builders – People in the home building process, typically ranging in age from 40 to 55, are prime candidates for Barton Interiors.  This applies to both primary residences and vacations and secondary homes. 

Related: How Do You Hit The Right Target Market For Your Business?

Although only expected to occur two to fives times each year for the business, this event will be the single largest dollar transaction amount.

Market Trends

The home textile market, considered to include sheets, towels, draperies, carpets, blankets, and upholstery, accounts for 37% of all textile output. The trade publication “Home Textiles Today” estimates the size of the U.S. home textiles market at the wholesale level, excluding carpets, to be between $6.5 billion to $7 billion annually.

Related: Conducting a Business Plan Market Analysis

The industry is expected to realize a steady increase over the next few years.

The industry is driven by the number of “household formations” which is expected to continue through the first years of the new millennium. This is primarily due to the solid growth in the number of single-parent and non-family households.

This growth also comes from baby boomers needing bigger houses to accommodate growing and extended families and, as people get older, they are buying homes rather than renting to realise tax and equity building benefits. Favourable mortgage rates will also enable others to invest in their existing home.

The “do-it-yourself” (DIY) market continues to grow and closely parallels the professional home-improvement market. DIY market growth is attributed to an increased presence of products, the personal satisfaction experienced, and the cost savings clients realise.

A portion of the do-it-yourself market is the “buy-it-yourself” (BIY) market. Consumers are buying the product and arranging for someone else to do the fabrication and/or installation.

Related: Download a Free Marketing Plan Template

This is more expensive then the do-it-yourself approach, but less costly than buying finished products from other sources. It also provides similar feelings of creativity, pride, and individuality associated with direct creative involvement. This sense of “participation” in home decorating is an important factor for many of these committed clients.

Regardless of this data, the following trends and issues impact the success and challenges of Barton Interiors.

  • National economic health: The industry performs better when the country experiences “good times” regardless of its direct impact on the local economy. Sales decrease when the stock market falls and when NATO takes military action. An upbeat State of the Union address by the President correlates with an increase in sales.
  • New home construction activity: More closely related to what is taking place in our local economy, new home construction has a significant impact on sales across all product lines.
  • Shifts in design trends: Major changes in design trends increase sales. The Boulder market lags behind metropolitan design trends by six to 12 months. This offers a buying advantage for the store, offering a preview of what is coming and how we should adjust our in-stock inventory.

Market Growth

American Demographics projects the number of U.S. households will grow by 16% to 115 million by the year 2010. Almost half of the households comprised of people from 35 to 44 years old are married couples with children under the age of 18. Based on this research, households in the 45 to 65 age range will grow to 34 million by the year 2000.

These households will increase another 32 percent to 45 million in 2010 as baby boomers add to this peak-earning and spending age group. These families will either build new homes or move into existing dwellings. With approximately 46.2% of the nation’s 93.3 million dwellings built before 1960, many of these homeowners are also expected to update.

One important factor is that married couples in the 35 to 65 age range represent a growth segment and enjoy larger incomes than other family structures. They enjoy the choice to spend their disposable income on life’s amenities. They may demonstrate “cocooning” by making their home a more comfortable and attractive haven.

They choose to spend resources here rather than on vacations and other discretionary options. This group represents a larger subsegment of the target market.

These factors contribute to an increased need for home decorator fabrics for window treatment, upholstery, pillows, bedding, and other fabric accessory needs. This demand is expected to be complemented by the growth in the Boulder market.

The majority of homeowners spend a large percentage of their disposable income on home goods within two years after buying a new house. Therefore, positive trends in new housing activity represents growth and opportunity for home textiles.

Recent slow downs in the local economy have resulted in falling below sales projections and these factors will affect market growth.  Adding additional revenues through the website will hopefully add a more stable factor in to the revenue stream.

The publication, American Demographics, projects the number of U.S. households will grow by 16% between 1995 and the year 2010, an increase from 98.5 million to 115 million. Of the households comprised of people from 35 to 44 years old, almost half are married couples with children under the age of 18.

Related: The Best Ways to Do Market Research for Your Business Plan

Based on research by American Demographics, households in the 45 to 65 age range should grow to 34 million by the year 2000. These households will increase another 32 percent to 45 million in 2010 as baby boomers add to this peak-earning and spending age group. With approximately 46.2% of the nation’s 93.3 million dwellings built before 1960, many of these homeowners are also expected to update.

These factors contribute to an increased need for home decorator fabrics for window treatment, upholstering, pillows, bedding, and other fabric accessory needs.

This demand is expected to be complemented by the growth in the Boulder market. The majority of homeowners spend a large percentage of their disposable income on home goods within two years after buying a new house. Therefore, positive trends in new housing activity represents growth and opportunity for home textiles.

Related: 5 Ways To Penetrate An Already Saturated Market

One important factor is that married couples in the 35 to 65 age range represent a growth segment and enjoy larger incomes than other family structures. They enjoy the choice to spend their disposable income on life’s amenities.

They may demonstrate “cocooning” by making their home a more comfortable and attractive haven. They choose to spend resources here rather than on vacations and other discretionary options. This group represents a larger sub-segment of the target market.

Market Needs

Barton Interiors will provide its clients the opportunity to create a home environment to express who they are. They have the choice to actively participate in the design, look, and feel of their home.

Related: SWOT Analysis Examples

They desire their home to be personal, unique, and tasteful as well as communicate a message about what is important to them. Barton Interiors seek to fulfill the following benefits that we know are important to our clients.

Service Business Analysis

The industry continues to be competitive with a “commodity” concern with “designers” of all skill and background levels available throughout the market.

  • Potential Competitors: There are many other interior designers in the Boulder area and these competitors range from those that provide simple-focused services, such as draperies only, to a more full-service interior design approach similar to Barton Interiors.
  • Power of Suppliers: Moderately high in most anyone that has a business licence can have access to wholesale purchase of furniture, fabrics and accessories.
  • Power of Buyers: Very low as buyers work within the financial terms and product availability offered through the suppliers that specify the terms and conditions.
  • Substitute Products: High as many people refer to themselves as interior designers regardless of background, training, or certification. Substitute products are also high in the area of window treatment as hardcovering solutions have become available and increasingly affordable.  This includes blinds, shutters, and other “manufactured” treatments.  Substitute products are not as prevalent in the area of antiques and art pieces.
  • Rivalry: Moderately low with the “territorial” structure that the industry experiences and moderately low exit barriers.  The easy entry is accompanied with an easy exit and people get out when it is not working.

With the slow, but steady, growth of the past few years, the industry is now experiencing a “cautious optimism” regarding the future.

Related: Competitor Analysis Example

Growth and expansion activities for most areas of the interior design industry appear to be carefully considered.  Many in the industry continues to decide what to do and buy as the economy has experienced a slowdown and increased uncertainty from the more economically confident 1990’s.

Distributing a Service

Our primary method of distribution will be on a direct sales basis for each individual client.

Competition and Buying Patterns

Competition in the area is strong, with designers ranging from the home-based, no formal training individuals to the more formalized store front, American Association of Interior Designers (ASID) certified designers that have close relationships with prestigious architects.  In most cases, clients make the provider decision on the basis of three criteria in this order with these percent influences indicated after each:

  • Referrals and relationship with other professionals, particularly architects  (55%).
  • Personality and “expected relationship” with the designer  (25% ).
  • Past work  (15%).
  • ASID certification  (5%).

Understanding the influence of these factors on the prospective client will be key in the marketing strategy.

Main Competitors

Current local competition includes the following:

  • Interior Designers: There are 37 interior designers listed in the Boulder Yellow Pages (Year 2000-2001 issue) that offer fabric as a part of their services. Interior designers make profit off mark-up of fabric in addition to their hourly services charges. Their costs per yard are typically higher since they do not benefit from retail or volume discounts. Therefore, their costs to their client is often two to four times higher than the price per yard from Barton Interiors.
  • House of Fabrics: Nationwide recognition and buying power of numerous types of dated fabric with strong product availability. This store has experienced financial difficulty in recent years and has closed several locations throughout the country.
  • Warehouse Fabrics: Locally owned, offering low-cost products with a wide selection of discontinued fabrics and only a limited number of “current” fabrics. This warehouse concept offers marginal client service with what many “upper end” clients consider to be an “undesirable” shopping environment.
  • JoAnn’s: Nationwide chain with strong buying power. They have a broad fabric selection for clothing with a limited number of in-store decorator fabrics available. Their primary target markets are the clothing seamstress, with an increasing emphasis on craft items. Low prices are fabric main point of competitive differentiation.
  • Website Providers: Fabric sales over the Web are limited at this time, and this will be a source of competition for the future to watch. Currently, there is no measurable impact on our market through competitive websites.

Catalog Competitors

An increasing level of competition is anticipated from catalog sales. Recent trends, such as those demonstrated in the well established but evolving Pottery Barn catalog, indicates increased interest in offering decorator fabric, window designs, and other home decorating products through this increasingly popular channel of distribution.

Catalog sources do not offer clients the option to see, touch, and have the fabric in their homes. Price is the most significant competitive factor this product source presents.

The most aggressive catalog competitor is Calico Corners followed by Pottery Barn and other home-accessory-based providers.

Discounters

Channels of distribution continue to shift in favor of discounters, who account for a significant portion of the growth in the industry. As consumers experience lower levels of disposable income, discounters leverage frequent store promotions to entice frugal, value-oriented consumers.

Related: 6 Questions To Ask Before You Offer Discounts

One of the biggest criticism of discounters is their failure to offer a quality service experience and their failure to present inviting displays to promote sales. These discounters, along with specialty store chains, present one of the most severe competitive threats for individually-owned specialty stores. This is partially due to extensive promotional efforts, price advantages, and established relationships with their vendors.

One example of these discounters is the “home improvement” chains, such as Home Base. This aggressive retailer has adopted a strategy to include complete decorator departments in their metropolitan stores. Currently existing in the Los Angeles market, this strategy is anticipated to be introduced into the Seattle area and other select metropolitan markets within the year.

Although the Boulder Home Base store sells basic curtain rod hardware and other hard cover window treatment, there are no known plans at this time for the Boulder Home Base store to implement this in the foreseeable future. This will be an important issue to monitor for competitive purposes.

Business Participants

Industry participants in the area of interior design comes from six general categories; interior designers, traditional furniture stores, traditional fabric retail stores, catalog and Web-based sales, click and mortar discounters, and individually owned stores.

Most of these players have some type of an online presence. The following provides an overview of the type of participants that are most active and most successful in this arena.

Interior Designers

This large group makes up a substantial quantity of higher-end fabric purchases. For example, there are 37 interior designers listed in the Boulder Yellow Pages (Year 2001-2002 issue) that offer fabric as a part of their services.

Interior designers make profit off mark-up of fabric in addition to their hourly services charges. Their costs per yard are typically higher since they do not benefit from retail or volume discounts.

Therefore, their costs to the client is often two to four times higher than the price per yard from Barton Interiors. It is unusual to find an independent interior designer that has a website.

Traditional Fabric Retail Stores

The traditional retail stores are corporate stores (not franchises) that have multiple locations in select metropolitan markets.  Example of these stores include:

JoAnn’s www.joanns.com – Nationwide chain with strong buying power. They have a broad fabric selection for clothing with a limited number of in-store decorator fabrics available.

Their primary target markets are the clothing seamstress, with an increasing emphasis on craft items. JoAnn’s purchased the House of Fabric chain and has a link set up from the previous URL www.houseoffabrics.com.

Calico Corners www.calicocorners.com – This national chain was a franchise through the 1980s (no longer selling licenses) and has been purchasing those stores throughout the country. Calico Corners stores number about 90 and are in most larger cities, with a concentration in the Northeast.

Catalog and Web-based Competitors

Virtually every catalog and major retail store in the industry now has a website. The most aggressive and direct catalog competitor is Calico Corners at www.calicocorners.com which complements their 80+ retail store network. An increasing level of competition is anticipated from these catalog and Web-based sales.

Related: How To Research And Analyse Competitors

Recent trends, such as those demonstrated in the well established, but evolving, Pottery Barn catalog at www.potterybarn.com and Ballard Design at www.ballarddesigns.com indicates increased interest in offering decorator fabric for window design and upholstery through this increasingly popular channel of distribution.

Click and Mortar Discounters

Channels of distribution continue to shift in favour of discounters, who account for a significant portion of the growth in the industry and who have been extremely active on the Web. As consumers experience lower levels of disposable income, discounters leverage frequent store promotions to entice frugal, value-oriented consumers.

One of the biggest criticism of discounters is their failure to offer a quality service experience and their failure to present inviting displays to promote sales. One example of these discounters is the “home improvement” chains, such as Home Base at www.homebase.com.

This aggressive retailer has adopted a strategy to include complete decorator departments in their metropolitan stores.

Related: What’s Setting You Apart From Your Competitors?

Currently existing in the Los Angeles market, this strategy is anticipated to be introduced into the Seattle area and other select metropolitan markets within the year.

Although the Boulder Home Base store sells basic curtain rod hardware and other hard cover window treatment, there are no known plans at this time for the Boulder Home Base store to implement this in the foreseeable future.

Bed, Bath & Beyond at www.bedbathandbeyond.com has an even larger assortment of hardware with a selection of pre-made solutions for window treatments, bedding and pillows. Both of these retailers have stores in our market and with selection activity on the Web, this will be important to monitor for competitive purposes.

Individually Owned Stores

Some form of locally owned stores exist in virtually every market with a population of over 50,000. Typically, the low end begins with those that carry a limited selection of decorator fabric, often with a focus on clothing fabric and crafts.

At a slightly more sophisticated level, stores may offer low-cost products with a wide selection of discontinued fabrics and only a limited number of “current” fabrics. “Full service” individually owned stores, like Barton Interiors, are less prevalent.

An increasing number of these stores at all level do have websites, including this local competitor example: www.econosales.com.

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MLM Cleaning Products Business Plan Sample

This sample plan will provide you with important guidelines when creating a business plan for a company offering MLM cleaning products.

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This sample plan will provide you with important guidelines when creating a business plan for a company offering MLM cleaning products.

1. Executive Summary

Earthly Clean is a start-up organisation using the multi-level marketing (MLM) business model to sell environmentally friendly cleaning products.

Download: Free Business Plan Template Download

Earthly Clean has been founded by Devon McGregor. The company has been registered as an Illinois LLC.

The Products

Earthly Clean sells a complete line of non-toxic, environmentally friendly cleaning supplies for all possible household uses. Earthly Clean is finalising a contactual agreement with a major cleaning supply manufacturer for the production of a complete line of private label products. Product prices will be quite competitive since Earthly Clean is buying direct from the manufacturer.

Another feature of this relationship which is of significant value to Earthly Clean is the willingness of the manufacturer to allow Earthly Clean to place orders as small as $150. This will assist Earthly Clean in their goal of efficient inventory management.

Products that will be part of the initial product line include: all purpose soap, bathroom cleaner, basin/tub and tile cleaner, detergent, window cleaner, bleach, laundry liquid and a variety of different air fresheners. Earthly Clean is able to offer competitively priced products that are of the highest quality.

The Market

Earthly Clean will sell products to two customer segments. The first segment are individual consumers who are purchasing the products for personal (household) use.

These individuals are environmentally conscious consumers who are looking for non-toxic cleaners for their home. Demographics for this group are younger, politically liberal people who are interested in making an individual contribution to the betterment of our environment.

The second target segment is a select group from within the first segment of individual customers. Some of these individuals will be recruited to become distributors of Earthly Clean products.

Related: How Do you Find the ‘Gap’ for your Business?

A distributor is a person who sells the Earthly Clean products on their own to their own set of customers. This segment is taken from the actual consumers that purchase and use products. This creates a sales force that passionately believes in the products that they sell.

The distributors that make up this segment receive a sales commission if they are able to recruit new distributors who then make sales. This is how the MLM business model works.

Earthly Clean sells to consumers, some of those consumers then become distributors earning revenue for Earthly Clean as well as themselves. If these new distributors attract more people to sell, they then make money on their specific sales as well as money on everything that their recruited sales people sell.

An Efficient Distribution Model

This is an efficient and effective distribution model where the products are purchased private label direct from the manufacturer ensuring the highest quality and low prices. They are then sold direct to the consumer.

Related: Business Plan Format Guide

The traditional bureaucratic distribution model with huge corporate profits is eliminated. MLM businesses are often confused with pyramid schemes which are illegal in the U.S.

Pyramid schemes are business forms that offer compensation specifically for the recruitment of new sellers. People are promised economic rewards for the more people they recruit, independent of what these people sell.

Herein lies the crucial distinction that regulatory authorities analyse when determining if a business is a pyramid scheme: The way compensation is rewarded. If it is based on recruitment it is presumed illegal. Earthly Clean only compensates distributors for sales, an effective and efficient sales and distribution system.

Earthly Clean is an exciting new business that channels individuals’ passion for making a positive contribution to the environment and the ability to make money while sharing this passion with friends and colleagues.

By carefully using the efficient multi-level marketing business model, Earthly Clean will quickly generate sustainable revenue. Sales forecasts indicate that sales for years two and three respectively will be $90,000 and $125,000. Net profit for the same years will reach 4.19% and 8.66%.

1.1 Mission

Earthly Clean’s mission is the development of a environmentally friendly distribution company that uses grassroots and network marketing techniques to sell the product and make a meaningful contribution to the environment.

Related: SWOT Analysis Samples

Earthly Clean exists to support its members and to support the environment.

1.2 Objectives

  • To create a profitable company that sells environmentally friendly cleaning products.
  • Design an organisation that compensates individuals for sales made by other people that they recruit.
  • Design a more efficient marketing machine that does away with the inefficient traditional distribution systems.

1.3 Keys to Success

  • Distribute only quality, environmentally friendly products.
  • Recruit new people to assist in the sales of the products.
  • Build the company on a solid basis of integrity.

2. Company Summary

cleaning-company-summary

Earthly Clean has been formed as an Illinois registered LLC. The company has been founded by Devon McGregor. The company exists to distribute environmentally friendly cleaning supplies through an efficient, networking distribution system.

2.1 Start-up Summary

Earthly Clean has incurred the following expenses for the start-up phases of the organisation:

  1. Storage space: This will be used for the storage of product inventory. While Earthly Clean could get away with a smaller space such as a closet in Devon’s home, he is able to achieve costs breaks by purchasing larger quantities and will take these discounts and place the inventory in storage.
  2. Service provider fees: Earthly Clean has incurred both accountant and attorney fees in the set up of the business. The accountant will set up the PeachTree accounting system and the attorney will develop and register the business formation as well as draft some sale agreements for distributors.
  3. Computer system: The computer system will be used for correspondence, accounting purposes as well as to develop marketing and sales information. The system will include a laptop computer, printer, fax/scanner, and a broadband Internet connection. Earthly Clean will use Microsoft Office and PeachTree Accounting as their preferred software.
  4. Assorted types of paper and stationery: Personalised with a logo, return addresses, etc. for catalogs, and brochures.
  5. Assorted office furniture and accessories: The office will be located in Devon’s house.

2.2 Company Ownership

Earthly Clean is solely owned by Devon McGregor. In addition to his own investment Devon has received an investment from friends and family as well as a long-term bank loan.


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3. Products

cleaning-products

Earthly Clean sells a wide range of private label environmentally friendly cleaning products. All products are designed to be effective at cleaning, yet easy and non-toxic on the environment.

Earthly Clean has contracted with a large national producer of environmentally friendly products to manufacture these products with the Earthly Clean private label.

This vendor was chosen because of their quality products as well as their flexibility in offering low minimum orders ($150). The following are the initial products that Earthly Clean will offer.

Related: Product Marketability Analysis Score Sheet

As the company grows they will consider adding new items to the product list as demanded by the market:

  • All purpose soap: A concentrated formula for washing walls, floors, cabinets, and all other washable surfaces. Orange oil and sodium citrate based.
  • Bathroom cleaner: Quickly and easily removes dirt and grime, cleaning and deodorising the entire house. An all vegetable-based cleaning agent.
  • Basin, tub & tile cleaner: Effective at removing soap scum from all surfaces. Citric acid, glycolic acid and orange oil.
  • Dishwashing detergent: Easy on hands, tough on cleaning. A mild coconut oil based detergent.
  • Window cleaner: A streak free cleaner. Citrus based, either orange of lemon.
  • Oxygen bleach cleaner: A wonderful cleaner that works on sinks and bathtubs. Made from sodium percarbonate, calcium carbonate, soda ash, and sodium sulfate.
  • Laundry liquid: Concentrated, biodegradable, natural cleaner for laundry. This is a vegetable-based surfactant detergent.
  • Air fresheners: Natural, healthful, eco-mists containing essential oils, emulsifiers, and water. Available scents include, wild cherry, vanilla and hazelnut, citrus, lavender, and natural fruit.

Environmental cleaning products were chosen for a several reasons:

  1. It allows the participating individuals to make a positive contribution to the protection of the environment.
  2. The environmentally friendly cleaning industry is in its infancy in terms of growth. It is on the verge of market wide acceptance as more and more people are participating in activities that take into account environmental impacts.
  3. The MLM and environmental cleaning products is a perfect combination as it combines emotional, and economic factors in a selling opportunity to friends and other network contacts. The seller has an emotional reason for selling the products. They also have an economic incentive because if they find additional people to help sell the product then they get additional commissions on product the new people sell.

Related: 9 Different Kinds Of SME Funding

Because Earthly Clean buys private label goods direct from the manufacturer, even after paying out the sales commissions, their products are competitively priced. This is achieved through the private label procurement as well as the more efficient, grassroots system of distribution.

3.1 Business Model

Earthly Clean will use a multi-level marketing approach (MLM) to the sale of these products. An MLM approach is a grassroots networking based approach where products are sold direct from an individual (distributor) to the end consumer.

The distributor receives the products from Earthly Clean who buys direct from the manufacturer. When a distributor is able to recruit a new person to sell these products (new distributor) then the “recruiter” receives a sales commission for all of the sales made by person #2.

If person #2 is able to recruit another distributor (person #3) then both the original distributor and distributor #2 receive commissions from sales generated by person #3.

Related: How do I know that my product is market-ready?

The MLM system in essence leverages peoples relationships and networking skills. It creates the ability to be your own boss, making sales pitches to friends and associates on your time schedule. It creates a common man, grassroots implementation of a real world distribution channel.

This arrangement differs significantly from pyramid schemes which are illegal in the United States. A pyramid scheme is a system where individuals sell products and get commissions from the recruitment of new people to also sell the products. The more people they recruit, the more money they make.

Pyramid schemes are illegal and are broken up when they are found to exist. The regulatory analysis that is applied to determine if the business is a MLM or a pyramid scheme is as follows:

  1. Is the compensation merely for introduction of additional participants into the programme;
  2. Or is the compensation related to the sale of goods.

If regulators believe the business is more like #1 it will be found illegal, against public policy, and shut down.

Related: How To Pick The Business Model That Works For You

As it stands, Earthly Clean is clearly a MLM venture as participants get compensated for the products others sell, not for the specific recruitment of individuals.


4. Market Analysis Summary

cleaning-market-analysis-summary

Earthly Clean has identified two distinct type of customers. The first customer type is the end user of the cleaning products. These are people with an environmental consciousness in need of appropriate cleaning supplies.

Related: The Ultimate Marketing Tool Library for Entrepreneurs

The second customer group is comprised of a select number of people from the first group with an interest in becoming distributors of the cleaning products. The following sections will provide more detailed information regarding these two groups.

4.1 Market Segmentation

Earthly Clean has identified two groups of customers who are the most attractive marketing prospects.

  1. Consumers of environmentally friendly cleaning products.
  2. Members of the consumer group who are interested in being product distributors.

Individual consumers

These are people who are looking for products that will reduce their individual impact on the environment. Cleaning products are an excellent product category to concentrate on since they can be particularly abrasive to the environment.

Some demographic information for this group is as follows:

  • Ages 23-48
  • Median household income of $41,000
  • 22% of the people commute by bicycle or use mass transportation
  • 97% of the people are active recyclers
  • The majority routinely consider what consequences their choices or actions will have on the environment.
  • 41% are vegetarian
  • 93% are registered Democrats

Distributors

A distributor is an individual consumer who is interested in also selling the products. In the world of MLM, the sellers are called distributors because they are essentially doing the activities that a distributor would do in a more traditional distribution channel.

These individuals have a passion for the product and the time to sell the product to their friends.

  • 89% of the people will take on the role of distributor in addition to their already existing part or full time employment.
  • They see the chance of selling Earthly Clean as an opportunity to do something that they are passionate about (positive environmental actions) as well as a means of making supplemental income.
  • 87% of the distributors will have the goal of signing up more distributors and establish an additional source of revenue.

4.2 Target Market Segment Strategy

The two enumerated customer segments are particularly attractive because they represent people who are most likely to be consumers of environmentally friendly cleaning supplies. The individual consumers have a sensitive perspective toward the environment and are looking for a way that they can have a positive impact on the environment.

Recognising that so many traditional cleaning agents are toxic for the environment, it then becomes relatively easy for the individuals to make a positive contribution. This attitude follows the slogan “think globally, act locally.” Buying these products allows them to do their part.

The distributors are individual consumers who have an even stronger conviction and belief in the products as well as the time to sell the products and find potential people to recruit into the distribution effort.

Related: Free Sample Marketing Plan Template

To be a distributor does not require a huge sacrifice of time, the majority of distributors will have full-time jobs in addition to marketing Earthly Clean. This makes the job of distributor all that more attractive, the person is able to balance their already existing job with another source of revenue and personal satisfaction.

4.3 Industry Analysis

Earthly Clean arguably participates in two industries, the product industry of environmentally friendly cleaning supplies and the business model industry of MLM. The environmentally friendly cleaning supply industry is small but just now beginning to develop momentum. These supplies are typically sold in health food type stores. These stores generally sell a smaller variety than what Earthly Clean sells, they have just the basics.

Some larger retailers such as Safeway and Alberston’s are beginning to carry one or two products, typically an all purpose cleaner and a washing machine liquid. As the market demands more outlets for these products it is likely that more retailers will begin to sell environmentally friendly cleaning products.

Earthly Clean also participates within the multi-level marketing industry. However Earthly Clean does not, per se, compete within this industry. Currently, market research has yet to find an MLM company that sells environmentally friendly cleaning products.

The largest and most well known MLM company is Amway which sells a wide range of products. Amway is different from Earthly Clean in the sense that the majority of products that they sell are branded rather than private label products.

While that is beneficial for Amway in that they are able to use the manufacturer’s marketing efforts to assist in sales, Amway is often not that cost competitive.

4.3.1 Competition and Buying Patterns

Earthly Clean faces competition from several sources:

  1. Local and national health food stores: These stores typically have a small selection of cleaning products. National competitors include:
  2. Whole Foods
  3. Wild Oats
  4. Large supermarkets: These competitors have a very limited selection
  5. Mail order/Internet sales: These are remote retail companies that sell a range of products. More often than not these companies sell national brands as opposed to private label goods. Competitors include:
  6. mothernature.com
  7. thegoodearth.com

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Florist Sample Business Plan

This sample business plan is an ideal example for any florist during the start-up stages.

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Florist Business Plan

Executive Summary

“If, at any time, it comes into my head, that a present is due from me to somebody, I am puzzled what to give, until the opportunity is gone.”   Ralph Waldo Emerson “Gifts,” Essays, Second Series (1844).

In the 160 years since Emerson made this statement, certain things haven’t changed: some of the most successful businessmen still have trouble purchasing gifts – especially flowers – for their wives, fiancées or girl friends. While some things don’t change, fortunately others – such as technology that can make the gift-giving process easier – do.

Red White & Bloom believes there is an opportunity to use technology to make it simple for male executives to easily purchase custom flower arrangements, with delivery on days they determine in advance, for their loved ones. The company plans to approach its goal short term by targeting affluent executive businessmen in Midtown and Downtown Atlanta for a very upscale, Frequent Flower Gift Program and, long term, to debut the city’s first floral art gallery in a neighborhood that is building its name as the next major arts community in Atlanta. Red White & Bloom will differ from traditional florists by cultivating personal relationships through the use of technology and marketing, offering a gift program that makes purchasing flowers easy (and forgetting special dates a thing of the past), and delivering exceptional customer service. Ideally the company plans to open its gallery in March in Castleberry Hill, one of Atlanta’s historic loft neighborhoods that is less than one mile from Downtown Atlanta.

The company anticipates modest first year total revenue with the opportunity to increase Year Two revenue dramatically because of Valentine’s Day sales (excluded in Year One due to a March opening). Additional revenue growth should stem from the maturing Castleberry Hill area as a destination shopping district. At the time of opening the Castleberry Hill area will have approximately 1,500 residents. Studies indicate that a population of 10,000 is necessary to support a traditional retail florist; therefore, it is important to point out that Red White & Bloom will not be a typical retail florist. In Years One to Three of Red White & Bloom’s development, the company will not depend on retail traffic, but will instead use technology and savvy marketing programs to target ideal, repeat buyers (individuals and commercial accounts) in the more than 1,500 targeted businesses in Midtown and Downtown Atlanta office buildings.

With the anticipated expansion of Castleberry Hill as an arts district for leading Atlanta galleries, along with continued projected commercial and residential growth for the downtown area by Central Atlanta Progress, the Castleberry Hill location presents steady growth opportunities for Red White & Bloom. The company is forecasting conservative, yet healthy, revenue projections for Years Two and Three. If the company manages to this plan, revenues should consistently reach over $170,000 each additional year.

Red White & Bloom is an S-Corporation started by Jamie Muir, who is the majority owner.

1.1 Mission

Red White & Bloom will use technology to identify and serve an ideal target audience within a five-mile radius of Castleberry Hill. The company will use sophisticated marketing techniques to secure a core clientele of executive businessmen and corporate accounts, and will differentiate from other traditional retail and on-line florists by offering Frequent Flower Gift Programs with personalized service (e.g., customers can select the specific delivery dates) and custom floral designs (e.g., customers can specify flowers, colors, scents, etc.).

Red White & Bloom is dedicated to operating with a constant enthusiasm for learning, being open to implementing new ideas, and maintaining a willingness to adapt to evolving market conditions.

1.2 Keys to Success

  • Using technology to develop loyal, frequently-buying male clients instead of traditional, walk-in retail shoppers.
  • Designing and selling innovative, high quality fresh flower arrangements using a variety of design styles, flowers, and containers.
  • Creating a storefront that resembles an art gallery, with fresh, avant-garde floral arrangements displayed like art (and always for sale).
  • Offering additional products, including gourmet chocolates and original artwork from local artists.
  • Communicating with potential customers through direct mail, print advertising and an easy-to-use website.
  • Offering complimentary in-store events, such as book signings, cheese tastings, and art showings, that coincide with other neighborhood gallery openings.

1.3 Objectives

  • Generate healthy total revenue of $79,600 in Year One.
  • Maintain an average direct cost of sales 40% or lower, and a high gross margin.
  • Build pricing programs based on the assumption of 10% profit.
  • Increase sales approximately 72% in Year Two and 21% in Year Three.*

*Note: Red White & Bloom will open after Valentine’s Day and Easter/Passover in Year One. The large percentage increase in Year Two reflects a full 12-months of revenue (versus 10 months in Year One), the benefit of one year of marketing, and the inclusion of Valentine’s Day and Easter/Passover. Valentine’s Day alone typically accounts for one third of a florist’s yearly revenue.

Company Summary

Red White & Bloom will initially target two key audiences within one geographic market:

  • Affluent businessmen who work in Midtown and Downtown Atlanta: They are ideal candidates for an automatic, fresh flower delivery program that will help them keep romance alive with their spouses or significant others. The concept involves establishing flower arrangements as a way to foster romance, and the company will target men with higher levels of discretionary income who are more accustomed to spending money on loved ones. With Red White & Bloom’s floral delivery program, these men will never have to worry about missing a loved one’s special day (anniversary, birthday, holiday) and fresh flowers will also be promoted as a way to say “I Love You” on any day of the year. Also, instead of delivering flowers to a woman at home, Red White & Bloom will deliver flowers to the man who works in Midtown/Downtown Atlanta, and let him reap the benefits of delivering the flowers to his loved one in person. To address the inconvenience of transporting flower arrangements from work to home, Red White & Bloom will develop special packaging to keep containers upright and spillproof. This packaging will be well branded with the company’s logo, and will serve as an additional marketing vehicle once delivered to a customer’s workplace (office building).
  • Midtown and Downtown Atlanta: These are prime areas from which to attract a handful of commercial accounts that require weekly floral arrangements. Downtown Atlanta alone, defined as a four-square mile area centered near the intersection of Peachtree Street and Andrew Young International Blvd, is home to more than 136,000 employees daily. Almost half of the dozen Fortune 500 firms headquartered in Atlanta are either headquartered downtown or have a major office presence downtown. More than 6,500 banks, hotels, large corporations, law firms, upscale restaurants, and consulate/foreign trade offices are located in this defined area, and these businesses are prime candidate for weekly floral arrangements for their lobbies and/or reception areas.

The main selling points for buyers will be twofold:  peace of mind for the male customer, that is, never worrying about missing a loved one’s special day, and customized services for commercial accounts, including long-lasting arrangements designed to accent a specific business’ decor and delivered routinely based on an established frequency (weekly, bi-monthly).

Store Location
Because Red White & Bloom will not seek traditional retail customers, the company plans to locate in an area of Atlanta close to its downtown clients, but without the price tag of downtown retail space. Red White & Bloom plans to open a small gallery with warehouse workspace in Castleberry Hill, an up-and-coming arts district located approximately one mile from downtown Atlanta. The Castleberry Hill Arts District is currently home to several distinctive galleries, included Skot Forman Fine Art, the Marcia Wood Gallery, the Ty Stokes Gallery, 3TEN Haustudio, and the Wolf Fisher Gallery. In addition, the well-established Atlanta-based speciality furniture store, No Mas! Productions, plans to relocate its main store to the Castleberry Hill area, and create a distinctive destination shopping area for metro Atlanta shoppers. As a floral design gallery, Red White & Bloom will blend perfectly into this neighborhood, and can possibly secure some of the art galleries and stores – and their customers – as its own clients. During the first five years of operation, the company does not anticipate enough retail neighborhood foot traffic to generate desired revenue, but Red White & Bloom would be open to the public six days a week, and would offer a frequent buying program for residents.

Red White & Bloom plans to open in March, occupying approximately 600 square feet. Approximately one-third of the space would be allocated for retail use, and the other two-thirds would be used for workspace and storage. At this time, there are no other planned florists in the Castleberry Hill area.

Free parking is available for the shoppers who visit the area; however, the majority of Red White & Bloom’s revenue will come from routinely delivered floral arrangements outside of the Castleberry Hill area.

Atlanta is served by a large international airport, and access to imported flowers is excellent. Several of the city’s largest floral warehouses are located nearby: Hall’s (less than three miles); Cutflower Warehouse (less than six miles); and Floral Park (less than three miles). Red White & Bloom will also use the Internet to purchase from wholesalers throughout the country who offer a wide variety of flowers throughout the year and can drop ship directly to a retail florist.

Store Design

The exterior of a florist shop is estimated to account for the attraction of 35% of all customers. While short term the company will not have a large amount of retail walk-in traffic, Red White & Bloom will still create an inviting storefront, one designed to be distinctive and inviting, including:

  • Very simple, modern design with attractive displays
  • Spacious interior design with lots of light and accent lighting to illuminate flower designs
  • Unobstructed windows to showcase flower arrangement in a “gallery” format, with access to the store from the street
  • Clear large glass windows with dramatic lighting and clear branding
  • High visibility from the street, as well as visually pleasing at night
  • Movable floor and ceiling displays to allow easy and frequent redesign of store
  • Clearly priced merchandise
  • A variety of pre-designed floral arrangements.

Store Operation
Red White & Bloom will be open for operation Monday – Saturday, and closed on Sunday and on major holidays. Hours of operation will be 10:00 a.m. – 5:00 p.m. Monday – Friday, and from noon – 4:00 p.m. on Saturday. Hours may be extended during the holidays.

Owner Jamie Muir, who has more than 14 years of experience in corporate marketing and has trained as a florist, will create floral arrangements and run the business (manage operations, inventories, marketing and sales). She will engage the services of a part-time delivery person, and, for certain floral-intensive holidays, may employ temporary staffing.

Store Policies
The company will invest in customer relationship management software (CRM) and a simple point of sales (POS) system to track sales and collect customer information, including names, address, e-mail address and other pertinent information (pets, flower likes/dislikes, color preferences, allergies, birthday, anniversary). This information will be used with e-mail and direct mail efforts to build custom marketing programs, establish customer loyalty and drive revenue. The company will offer a 24-hour return/exchange policy to build trust with customers and to maintain retention and loyalty.

2.1 Start-up Summary

Working capital, cash sufficient to cover build out costs in the second month, and long-term assets (such as refrigeration units) will make up the majority of the start-up requirements. Start-up expenses, which are detailed in this section, comprise the remaining 12% at $11,600.

Funding
As detailed in Sources and Uses of Funds, Red White & Bloom requires $95,000 to soundly begin operations and have suitable cash reserves for a start-up company. Jamie Muir has secured a loan for $45,000, and is seeking additional funding.

2.2 Company Ownership

Red White & Bloom is an S-corporation, and is majority-owned by Jamie Muir.

Products and Services

Red White & Bloom will offer a variety of products and services.

Products

  • Original Floral Designs, Using A Wide Mix of Flowers. Each Red White & Bloom floral arrangement will be a natural, original work of art. The company is committed to making each arrangement unique and custom-designed based on each customer’s needs. Red White & Bloom’s floral arrangements will feature a wide range of seasonal flowers. All sample arrangements in the store will be available for purchase.
  • Unique Containers. Red White & Bloom will select and offer distinctive vases for the discretionary buyer or for a special occasion, as well as affordable options for routine purchases.
  • Green and Flowering House Plants. Red White & Bloom may occasionally offer a selection of seasonal green and flowering house plants.
  • Gourmet Chocolates. With consumer’s heightened awareness of chocolate brands and a seeming willingness to pay for a better product, Red White & Bloom will carry several lines of exclusive gourmet chocolate bars, that is, the brands will not be sold by other metro Atlanta retailers. The sale of gourmet chocolate is a perfect complement to flowers, and encourages consumers to indulge and experience something new because they are worth it.
  • Paintings and Artwork from Local Artists. To create a gallery environment, the Red White & Bloom store will feature paintings and/or drawings from local artists, and the artwork will be for sale. The company will collect a small percentage of each sale (5%).
  • Variety of prices. Red White & Bloom will offer a variety of arrangement sizes, and will always create a unique arrangement to meet anyone’s stated budget.
  • Hand-tied Bouquets. For customers who prefer to use their own vases, Red White & Bloom will offer hand-tied bouquets.

Services

Forget-Me-Not Club. Special occasions account for four out of every ten floral purchases made. To capture a portion of this market and to foster overall romance, Red White & Bloom will offer a Frequent Flower Gift Program called the Forget-Me-Not Club designed for men. This program will let each customer register a minimum of six days per year (birthdays, holidays, anniversaries or any day except Valentine’s Day) on which Red White & Bloom will automatically plan to deliver a floral arrangement to his place of work (which must be in Midtown or Downtown Atlanta). A courtesy call will be given or an e-mail sent to each customer 48-hours in advance. To make it as easy as possible for its customers to transport flower arrangements from work to home, Red White & Bloom will develop special packaging to keep containers upright and spillproof. This packaging will be well branded with the company’s logo, and will serve as an additional marketing vehicle once delivered to a customer’s workplace (office building). The customer must agree to the cost of each arrangement (minimum $100), in advance and the service must be guaranteed by a credit card in advance. The credit card will not be charged until the day of each delivery.

Commercial Account Program including:

  • Free initial consulting. For retail and office tenants who are interested in a weekly delivery program, Red White & Bloom will conduct an initial free, on-site visit to the customer’s office or store to determine the optimum floral design plan.
  • Priority delivery program. Red White & Bloom will work with each commercial customer to determine a weekly delivery schedule, and will assure that arrangements are delivered on the same day each week at the same time.
  • Birthday Blooms. Red White & Bloom will offer a free arrangement to each office manager for a commercial account on his or her birthday.
  • Referral Program. Red White & Bloom will offer a one-time 25% discount to each commercial customer for every additional commercial referral that becomes a customer.

Castleberry Hill Residential Program. For residents of Castleberry Hill, Red White & Bloom will offer a monthly fresh flower program with free delivery to encourage the habit of keeping fresh flowers in their homes. More frequent delivery options are available, and residents will be given a $5 discount if they pick up the flowers in the store, which will decrease delivery expenses as well as increase exposure to additional buying opportunities. Other special programs for local residents include:

  • Forget-Me-Not Club. (As defined above.)
  • Narcissus Club. For residents who desire a custom-designed floral plan for their homes, Red White & Bloom offers the upscale Narcissus Club, which includes a free in-home consultation to assess the customer’s home and the recommendation of a floral design plan; a minimum investment of $75 per month; and a minimum of a six-month commitment. The commitment must be guaranteed by a credit card in advance. This service will also be offered as a gift certificate (limited delivery).

Unique-buying experience. As the Castleberry Hill area becomes a destination shopping venue, Red White & Bloom will contribute to the experience by offering a pleasant shopping experience through the gallery-like design of its storefront, and its selection of materials and floral designs.

In-Store Presentations. In the spirit of education and event marketing, Red White & Bloom will offer periodic in-store workshops to attract potential customers. Topics will be seasonal in nature, and will feature guest artists such as regional cuisine, interior design tips from local designers, books signings, jewelry shows, and local artist showings.

Gift Cards. Red White & Bloom will offer $25, $50, $75 and $100 gift certificates, as well as gift cards for the Forget-Me-Not program that would enable women to receive the program as a gift, and then select the characteristics of each scheduled delivery.

Surveys/Comment Cards. Red White & Bloom will use in-store comment cards as well as occasional surveys to ensure products and services are meeting customers’ expectations.

Market Analysis Summary

The following section presents a broad range of market information and projections, including:

  • Who is the typical floral buyer, and who is the typical floral buyer at Red White & Bloom?
  • How and why does he or she purchase flowers?
  • What are the prevailing buying patterns in the floral industry?
  • What is the size of the Atlanta market that Red White & Bloom plans to target?
  • What is the overall buying potential/revenue for Red White & Bloom?
  • Who is the competition in the Atlanta market?

4.1 Buying Patterns

Factors that Drive Typical Floral Purchases
Holiday purchases traditionally drive the florist industry. The holidays, along with birthdays and anniversaries, are ideal dates for men to select as part of a Frequent Flower Gift Program.

Capturing Valentine’s Day Business
Valentine’s Day ranks number one in single-day holiday cut flower purchases, capturing 34 percent of transactions and 36 percent of dollar volume. Eighty percent of consumers who buy florals for the romantic holiday purchase cut flowers. According to the International Mass Retailers Association (IMRA), men are more likely to give flowers than women, and men plan to spend $95 on the average, while women plan to spend $60. The average amount spent per household is approximately $94.50, and the trend is an upward one.

To maximize Valentine’s Day revenue with add-on sales, Red White & Bloom will offer special, seasonal gourmet chocolates in addition to the store’s normal gourmet chocolates. Chocolates account for 75% of Valentine’s Day candy sales, which totaled an estimated $1.1 billion in 2002. A survey conducted by the Chocolate Manufacturers Association revealed that 50 percent of women are likely to give a gift of chocolate to a man for Valentine’s Day.

Profile of Traditional Buyers of Floral Arrangements
Which households buy fresh cut flowers, how often and how much do they spend? According to the American Floral Endowment Consumer Tracking Study, consumer spending is on the rise. For example, the percentage of U.S. households making at least one fresh cut flower purchase during the year continues to increase. The frequency of consumer flower purchases is also remaining consistent.

27.7% of all US Household purchased fresh cut flowers at least once per year.
The average floral purchase per buying household was 3.7 times.
The average purchase price per buying household was $62.63.
The most frequent purchases are women over 35, with incomes in access of $30,000 who live in metropolitan areas with populations greater than 2.5 million.
Seventy percent of floral buys are planned purchased.

Source: American Floral Endowment Consumer Tracking Study.

Profile of a Red White & Bloom Customer
As note earlier in this plan, Red White & Bloom will not be a typical retail florist, and therefore will target and serve a very different primary market, one that is described in detail in the next section.

4.2 Market Summary

Midtown and Downtown Atlanta Demographics
Red White & Bloom will primarily target businessmen who work in highly-paid professions in Midtown and Downtown Atlanta. A second market includes businesses in Midtown and Downtown Atlanta that need weekly floral arrangements.

To meet its target revenue goals, Red White & Bloom estimates that it needs the following number of clients:

2005: Five commercial accounts (businesses); 50 Frequent Flower Gift Program Members (businessmen).
2006: Eight commercial accounts (businesses); 75 Frequent Flower Gift Program Members (businessmen).
2007: Ten commercial accounts (businesses); 100 Frequent Flower Gift Program Members (businessmen).

Given the combined 6,596 businesses located in Midtown and Downtown Atlanta, and the 1,510 ideal business (banks, law firms, securities firms, real estate, insurance companies and hotels), Red White & Bloom believes it has set realistic target levels for commercial accounts. Also, given the 195,149 employees who work in Midtown and Downtown Atlanta, with 26,010 identified as ideal prospects and assuming that 50% are men, the company also feels confident about its opportunity to reach its target goal for the Frequent Flower Gift Program.

For example, to reach its goal of five commercial clients in 2005, the company needs to secure .03% of its target company market (1,510), .05% in 2006, and .06% in 2007. To meet its Frequent Flower Gift Program estimates, the company needs to secure .04% of its targeted businessmen (13,005), .06% in 2006, and .08% in 2007.

4.3 Competition

Red White & Bloom plans to differentiate through its Frequent Flower Gift Programs for businessmen, and will treat in-office deliveries to its male clients as an opportunity to establish brand awareness with office managers for potential commercial account business. From preliminary research of the competition, Red White & Bloom has not identified any traditional florist in Atlanta, nor an on-line florist, that is offering a Frequent Flower Gift Program that allows the customer to choose random delivery dates in advance. As a result, the florists listed below are considered competition for commercial accounts:

  • Carithers. 1893 Piedmont Road. Carithers is recognized as the leading florist in Atlanta, with three locations (one in town).
  • Petals: A Florist. 1422 Woodmont Lane NW. Petals offers flowers for delivery, as well as for special events such as weddings. The store uses fresh flowers to create designs with a natural garden feel. It also sells twig baskets and stone-finished containers with longer-lasting greenery and blooming plans, and offers baskets of fruit and gourmet food.
  • Lilly’s. 1197 Peachtree Street NE – Colony Square. Lilly’s is a full-service florist that serves the Colony Square retail and office clientele, along with the Sheraton Hotel.

Twelve. 976 Piedmont Avenue – at 10th Street. Located in a former Midtown residence, the store carries unusual flowers and orchids. It also carries jewelry, designer handbags and sunglasses, throw pillows and bath towels.

Fuji Designs. 1157 West Peachtree Street. Fuji Designs is a Japanese-style florist, offering silk and fresh flower arrangements, along with Japanese gifts, jewelry, glassware and handbags.

Stems. 999 Peachtree Street – at 10th Street.  Located in the First Union building, Stems serves commercial clients in the building and is also a full-service floral shop.

On-line Florists. In addition to traditional florists, floral arrangements can be purchased via the Internet. Such services are offered by Jackson & Perkins (jackson-perkins.com), Calyx & Corolla (calyxandcorolla.com), Hallmark Flowers (hallmark.com), FTD.com, Harry & David (harryanddavid.com), and many others. These companies offer a monthly delivery program; however, customers cannot select custom arrangements (they have to accept the “selection of the month”), nor can they specify a delivery date (they have to choose a “month” and the date of the delivery is determined by the company). Also, when the floral arrangements arrive, they require arranging, and often the finished product may not match the photo that drove the purchase. Deliveries present another challenge if the gift recipient isn’t home. The flowers are either returned to the shipper’s distribution center where they remain in a box, or they are left in the box on a doorstep for an undetermined amount of time. In either situation, the quality of the live, perishable flowers is reduced.

Given the lack of Frequent Flower Gift Programs by Atlanta florists and on-line florists, Red White & Bloom believes there is a positive opportunity to establish a premium, niche service.

4.4 Target Market Segment Strategy

Buyer Characteristics
Ideal characteristics of a typical Red White & Bloom customer are:

Frequent Buyer Program Subscriber

  • Male executive
  • Works in Midtown or Downtown
  • 25-60 years of age
  • Affluent
  • Married, engaged or in a long-term relationship
  • Makes $150,000+
  • Quality conscious
  • Probably works as a banker, real estate agent, lawyer or financial analyst
  • May have a preference for luxury items (cars, clothes, watches, homes, vacations)
  • Homeowner, possible multiple home owner
  • Has discretionary income

Commercial Accounts Customer Profile

  • Primarily female office or store manager
  • Professional 25-60 years of age
  • Affluent
  • Probably works for a law firm, hotel, large retail store, bank, real estate agency, foreign consulate or insurance agency

4.5 Market Projection

Using the target market numbers identified earlier in this section and the Midtown and Downtown Atlanta demographics, Red White & Bloom has made the following assessments regarding market opportunity and revenue potential:

POTENTIAL REVENUE FOR FREQUENT FLOWER GIFT PROGRAM CUSTOMERS:
13,005 Businessmen in Midtown & Downtown Atlanta x $600 (average purchase price [six deliveries per year, $100 per delivery])= $7.7 million of revenue opportunity.

POTENTIAL REVENUE FOR WEEKLY COMMERCIAL ACCOUNTS CUSTOMERS:
6,596 Businesses in Midtown & Downtown Atlanta x $150 (average cost of an arrangement each week) x 52 weeks per year = $51.4 Million. If we assume (20) competitive florists in this area, that’s still $2.5M in potential revenue per florist. Or, if examined from another perspective, if the company can capture .05% of this potential business, that’s $257,244 in revenue opportunity.

As indicated previously, Red White & Bloom needs five commercial accounts and 50 Frequent Flower Gift Program Members to meet its first year revenue goals, and, given the breadth of the target market, the company believes these targets are reachable.

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