I decided I wanted to post this to get any kind of opinions or suggestions I can. It is rather lengthy so I don't expect anyone to give a full analysis of the plan . If you could just scan it over and help me point out any loose ends or holes I would greatly appreciate it . I clouded my identity and my business name , I hope it isn't confusing. Again thank you for any input or suggestions you may have.
(Please keep in mind I am aware some of the pricings are not realisitic) ... and is being addressed..
Feel free to throw rocks at my plan ! It won't hurt me : )
Blank&Jones Career Services
Date:
August 31st, 2011
Consumer:
Marvin The Martian
P.O.
Blank & Jones Representative:
Rita Mcfeegle
Service Provided:
Small Business Feasibility Study
Marvin and I met several times in order to gather information for this Business Feasibility Study. Marvin was late to one appointment, but did call ahead of time to let me know. At our meetings, Marvin often spoke very quickly and sometimes had difficulty separating thoughts and focusing on one small thing at a time. Marvin has a lot of large ideas for this business, but difficulty organizing them. Marvin showed good follow through at our meetings and completed assignments given to him.
Marvin is self-taught in screen printing though he states he has also had mentors along the way. Marvin already owns a lot of screen printing equipment and has been utilizing this equipment to increase his skill and knowledge. In addition, Marvin also has valuable experience in sales, marketing, retail, and cold calling. His Aunt used to own an embroidery shop so he also has some knowledge about self-employment.
Marvin would like to take the above experience and turn it into a business venture. The business would be titled "PRINTING FROM MARS, LLC" . The focus of this business would be to provide affordable screen print and graphics services to its customers. PFM would have a heavy online presence and Marvin would eventually like to find a rental location in the (Target City) area and service that area as well.
PFM would be formed as an LLC. Marvin would like for this to be a full-time business and for this business to be his primary source of income. Marvin states that he is willing to work 14+ hours a day in order to make this business work. Marvin's monthly expenses are $690. He would consider the business a success if he could at least pay himself this amount in order to cover bills.
II. BUSINESS DESCRIPTION
A. Services
PRINTING FROM MARS, LLC would offer several different services including:
Screen Printing
Artwork Setup / Graphics Design
Team Logo Placement
Heat Pressing
Custom Retail Item Sales (sweatshirts, jackets, hats, etc)
Sublimation (prints on promotional materials)
Business Card Printing
Vinyl Sign Printing and Design
Basic Web Design (contracted out)
B. Hours and Location
PFM would be a full-time business but hours would vary depending on demand and based on the customer's needs. Marvin states he would be willing to work 14 hours a day if needed. The shop would likely be closed on Sunday. Plans are to start up an online portion of the business as soon as possible. This portion of the business will be registered to Marvin's home address at:
xxxxxxxxxx
Marvin would also like to open store space in the (Target City) area. A rental location has not yet been decided on.
C. Fees
Fees for different services are still to be determined. Marvin will conduct market research to gauge what competitors are charging for similar services. Pricing will remain competitive.
D. Division of Business Responsibilities
Marvin would not hire outside employees initially, but once the retail area is up, may hire one employee. Marvin would be responsible for the technical aspects of the business including artwork preparation, screen setup, ink mixing, printing and curing shirts, making customer samples, cutting and weeding vinyl for signs. In addition, Marvin would be responsible for the day to day operations including sales, marketing, advertising, customer service, and customer tracking.
Some business responsibilities would be contracted out. Marvin's mother would assist with the accounting duties. (A good friend of Marvin's) will assist with web design and maintenance. Marvin has another graphic artist he works with in (another location) if needed also. Marvin's aunt could also provide embroidery services if customers request them.
E. Current Contracts
Marvin does not currently have any customer contracts. However, he is working with local businessmen who have experience in retail store ownership and screen printing to determine the best way to market his business.
III. LICENSING
A. Federal Licensing
A Federal ID# is required by the Federal Government for tax reporting purposes:
Federal ID # (EIN - Employer Identification Number) - Marvin would need to obtain a Federal Identification Number. Marvin could do this online at
http://www.irs.gov. It can also be acquired by calling 1-800-xxx-xxxx or by mail.
LLC Registration would also need to be completed. This registration is generally completed with the assistance of a local attorney. The filing fees cost around $250 and lawyers will also charge an hourly fee on top of the filing fees. The registration can also be done online at
http://www.incorporatefast.com or similar websites.
B. State Licensing
A Tax Permit or "Seller's Permit" would need to be acquired because Marvin would be selling retail goods / services.
There is a $15 fee. You can completed registration for this permit by calling 1-608-266-2776 or online at:
https://tpppsoodooddo.comThere are no other State Licenses required for this business.
C. Local Licensing
Mars - The City of Mars does not list any requirement for a business license for a business of this type. More information can be found at
http://www.xxxxxxx.comor by calling the City Clerk, Ignus Erkel, xxx-xxx-xxx.
(Target City) - The City of (Target City) requires an Occupancy Permit for a new business. This is issued by the City of (Target City), Community Development Department located at City Hall, Room 200, 201 Simpsons St, (Target City), xxx-xxx-xxxx. This permit can also be acquired online at:
www.xxxxxxxx.comIV. INSURANCE
A. General Business Liability Insurance
General Business Liability insurance would be recommended for PFM. This would help to protect the business in the event of lost or damaged property or general liability concerns. Due to the high value of printing equipment, and the potential of a storefront which adds liability concerns, insurance for this type of business may run in the high range.
Marvin obtained a quote for about $1900/year for General Business Liability insurance for a screen print shop. Marvin has not yet decided on an insurance provider, but states that he will likely go with his current car insurance provider: Blank Insurance out of Paris, France.
There are no other forms of insurance that would be required for this type of business.
IV. LOCAL COMPETITION INFORMATION
There are several businesses that will compete directly with PFM. Both (Target City home location), and Online areas were looked at to gauge the amount of competition. Information used in these tables was gathered by reviewing this year's yellow pages for companies listed under "screen printing" and other listed categories in each respective area. There may be even more competitors who are smaller and do not list themselves in the yellow pages. Population is taken from the 2009 census (the most recent verified numbers available).
Here are the results:
I deleted these results for the sake of not confusing anyone, and the results are currently being scrutinized (by me) due to the results containing commercial and unrelated screen printing services. It looks like renting a storefront in the (Target Area) area and marketing the business to locals within 15 miles would be the best bet, with the least amount of competition overall. Online marketing is also a possibility, since setting yourself apart online is just a matter of getting recognized quickly by search engines.
However, in every area there are at least 5 or more competitors (with the exception of web design in Jupiter - but that is not the focus of this business). In addition, as soon as you go 15 miles outside(target city's) city limits, there is much more competition in each of the areas since you are getting closer and closer to ( a major city). This means that if new competitors move into the area they will continue to close off the existing business that will be available, and leave PFM with little room to expand its services outward. The good news is that (target area ) is an area with a growth in population which may help to somewhat offset this.
It will be difficult to distinguish this business from the competition. Screen printing is a HIGHLY competitive market.
V. MARKETING
Marvin has previously worked in sales and marketing and has experience with cold calling and soliciting business. This background will be a great asset for this business. Marvin has already brainstormed several excellent marketing ideas including:
Working with schools to develop team logo attire
Heavy online marketing via a business website (with shopping cart and checkout)
Online marketing through free social sites such as facebook, craigslist, twitter, etc
Cold calling to solicit business
In person marketing to area businesses
Networking with family business resources
Developing and maintaining social business contacts
Creating business cards and print advertising to post in various locations or hand out
Other ideas offered to Marvin by Blank&Jones include:
Referral Bonuses - Marvin could offer referral discounts to returning customers who bring in friends and additional customers, this is another way to use Word of Mouth advertising. Or Marvin could offer bonuses to those customers that bring in a business card and tell him where they acquired it. This would help him to know which locations his print advertising is being most effective in.
Customer Tracking Logs - Marvin could have customers complete satisfaction surveys with addresses and phone numbers, or create a different system for tracking customers. This would allow him to keep in touch with past customers. He could then do yearly mailings (or e-mailings). These mailings could remind these past customers of the services he offers and provide discounts to entice repeat business.
Press Releases - Local newspapers often do press releases for businesses that are just starting up, sometimes these are at discounted or no cost if the newspaper decides to do an article on the business.
Volunteering Services for Charity - For instance, many times there are often race for the cure events, or other local events where screen printed t-shirts (or hats, etc) are used to reflect participation in the event. Marvin could volunteer his services to one of these events per year and get positive PR out of this type of marketing. Otherwise, he could offer just a portion of the amount of shirts needed for free, and contract for payment for the remainder.
Additional Free Online Advertising - Other potential free online spots to advertise that Marvin did not mention include: superpages.com, merchantcircle.com, linkedin.com, and wikipedia.com (create your own entry defining what your business does).
Other more expensive marketing techniques that can be used once the business has revenue to support them include:
Local Radio Ads - Though this can be expensive, it can be an effective marketing tool, since nearly everyone listens to the radio on their commutes to and from work, you are reaching a large (and local) potential customer base.
Yellow Pages - This is a good way to advertise mainly because many LOCAL customers use this as the first place they look when seeking out a specific service. This would be a good way to market directly toward the target which is the immediate (Target City) city area. However, this can be costly, well over $500 per year, depending on the service carrier.
Local Magazines / Newspaper - Local magazines and newspapers are good, but expensive advertising avenues also.
Search Engine Optimization (SEO) Marketing - This is a particular technique used to make a business website more noticeable to online customers. Most search engines (google, etc) use a formula to determine how relevant your site is to any given search. The more you learn about SEO the more you can control how much traffic gets to your website to start with. More information can be found at the following website:
http://www.2createawebsite.com/traffic/search-engine-traffic.htmlVI. BUSINESS ITEMS MARVIN ALREADY HAS
Marvin has several assets that could be used for the start up of PFM. Current investments total approximately $12,600 and include:
Screen Printing Equipment Value
4 Color 2 Station Atlas table top press, $2100
Flash dryer $200
50 Screen printing screens with mesh $1,000
Bolt of mesh (58 yards) $300
Epson 1400 wide format printer $200
Computer used for t-shirt design $200
Fast rip Screen printing Software $400
Illustrator/Photoshop (design software) $600
Assortment of different inks $200
Home made UV exposure unit. $150
Ink jet transparency film 100 sheets $80
Home Made screen storage racks $75
Inventory –150 shirts 200 hats $600
Jacket hold down $100
Makeshift washout booth $75
Pressure washer $100
Various chemicals $40
Vinyl Sign and Heat press Lettering Equipment
Graphtec CE-3000-60 vinyl cutter (24") $1500
Computer set up with Vinyl cutting software $1000
Hix Ht 1400 15x15 heat press $800
Several rolls of t-shirt Vinyl $300
Hat press $200
Office Equipment
Epson nx 420 all in one printer $65
Office chair $100
Computer for general office/filing needs $200
(and for letting customers chose their designs)
Web Design and Logo Creation
Web Site Design/Creation $1500.00
Logo Creation $500.00
Total Start-up Assets $12,600.00
VII. BUSINESS ITEMS “MARVIN” MAY NEED
Marvin already has the majority of equipment that he would need for start up. However he would need some help with other start up costs. Some things that Marvin listed as Start-Up Needs and Expenses include:
Items with Immediate Need
Complete Screen Printing Business Course $395+
Stationary & Brochures $500
Cash Register & Displays $500
Conveyor Dryer (for mass production) $2,000
Various Production Chemicals $200
Assortment of Sign Vinyl $500
$4095
A Screen Printing Business Course is being offered Sept 24 & 25 in(about 2 hours away) (Price Starts at: $395.00). It is ran by industry leaders and could give the business a serious edge and benefit the quality of production.
Items Needed in Early Stages of Development
Sublimation Printer $300 to $2,500 (Estimated $1500)
6 Color 6 Station Press $1200
Total $2700
Marvin states that: "These items (listed under equipment) would be nice to have directly at start up (but can be acquired with profits and as soon as the need is justified). In my opinion the 6 color press will be a needed asset to have (almost right away). However, once that is acquired I could then sell my 4 color press to recover the majority of the cost (my 4 color press has a lot of value due to features and brand). Being able to set up multiple jobs on one press to handle volume production will be essential. Also it may be beneficial to keep the 4 color press around to set up more jobs on. The sublimation equipment could also be a great addition, but again can be acquired once needed and with re-invested income."
Additional Start Up Costs
Include rent deposits and rent, legal (filing fees, etc), insurance, and contracted help (to maximize profit potential). These start up costs will be further calculated once a location is decided upon, but may be in the $4,000 range or more.
Long Term Equipment Needs
DTG (Automatic Direct to Garment Printer) $5000+
Automatic Screen Printing Press $6000+
Total $11,000+
Marvin states that: "These may be projected in the long term goals of the Business plan. Or could potentially be financed with future business capitol and payments made (again if/when the service is justified."
VII. SUMMARY - Steps Already Taken & Strengths
Marvin has decided on a name for the business " PRINTING FROM MARS, LLC" and said he would form the business as a Limited Liability Corporation (LLC).
Marvin has previous experience working in customer service, sales, and cold calling. Marvin also has some self-taught experience in screen printing.
Marvin already has many pieces of the equipment that would be needed for this business. He has invested a significant portion of his own capital, over $9,430, to acquire this equipment.
Marvin has excellent computer skills, knowledge of online advertising options, and some experience with search engine optimization. He also has a good friend who will be contracted to assist with this aspect of the business. All of this knowledge will help the business create a strong online presence.
Marvin has a friend that is in the process of creating a website for the business, and this should be up and running very soon.
Marvin has some basic marketing ideas already in place for the business.
There are very few licensing requirements for this business. Marvin would need to file for a Seller's Permit from the State and an Occupancy Permit from (Target City). Both licenses are inexpensive and easy to acquire.
Marvin seems to have a lot of family support as well as support from friends. He also states that his mother, a CPA, could do the accounting for the business if needed, so he will not have the added expense of an accountant.
Marvin has already done a lot of research on his own as far as this business is concerned. He has purchased a sba / entrepreneur book in order to become further educated in small business ownership. He has contacted area businessmen who may be of assistance. It is clear that he has invested a lot of time in developing his plans and just needs help organizing them now.
Marvin also states that he can do some of the maintenance and repairs on his own machines, so this should cut back on the maintenance costs.
Marvin has moderate earnings expectations. He states that he needs to be able to pay himself about $600/month in order to cover personal living expenses.
VIII. SUMMARY - Areas that Need to Be Addressed
Ongoing shop costs for any business can be quite high if not operated from a home environment. This business in particular is likely to have high overhead costs due to general shop costs (electricity, rent, etc), ink and chemical costs, machine maintenance / updating / repair costs, insurance, and website hosting and maintenance (though discounted) costs.
Marvin presents a lot of great ideas for the business but is taking on a very large and aggressive goal with this business. Marvin and I spoke about the potential of opening up a home-run shop first primarily through internet sales, and gauging the public's interest in his product first. Particularly since Marvin only needs to make about $600/month to cover his expenses. However Marvin is very much wanting to get a physical shop up and running. Marvin has already discussed contracting help, doing large print orders, having a potential retail area, and hiring an employee.
While (Target area) appears to be one of the least saturated areas as far as screen print shops go, competition is still a large factor for this business. If you go more than 15 miles outside of (target area) (toward “larger city”) there are many more competitors. In order to do the large volume of business that Marvin is hoping for it may be inevitable that he is competing with these businesses as well. Online, custom screen printing is even more common, and setting yourself apart is that much harder.
Marvin would need to find an affordable space in downtown (Target area) that will work for his budget and his vision of what he wants the business to be. Marvin will also need to assess the impact of driving here daily from his home in XXX, (45 minute drive one way).
Marvin needs to assess the high costs of hiring an employee. These costs include worker's compensation, benefits, salary, and potential payroll expenses. In meetings, Marvin states that he feels running a shop may be near impossible by himself and that an employee will be necessary. This is a fair assessment, given the scope of the business that he would like to create. However, all of these costs mean that the business has to make even more in gross sales to cover them and make a profit.
Marvin would still need to find insurance, register as an LLC, obtain a federal id# and seller's permit, and obtain a business bank account.
Marvin states that he currently does not have any debt other than medical bills, but that he has a poor credit rating and without a cosigner would not have access to a bank loan to supplement start up costs. Marvin may have access to $600 to $800 in savings but the rest of the funding would need to come from grants, DVR, etc. Marvin is very willing to put off the purchase of some larger equipment (and purchase it with store profits later on) but start up costs are still likely to be moderately high.
