Fantasy Book & Memorabilia Store
Fantasy Book & Memorabilia Store
Wizard and Warlock Books
7100 Pinetree Bluffs
Cheyenne, Wyoming 82009
Gerald Rekve
Wizard and Warlock Books is a full–service retail operation selling hardcover books, magazines, specialty books, Japanese figurines and fantasy figurines related to the fantasy book market.
EXECUTIVE SUMMARY
Business Overview
Wizard and Warlock Books is a full–service retail operation selling hardcover books, magazines, specialty books, Japanese figurines and fantasy figurines related to the fantasy book market. Other book stock includes best–selling fiction and nonfiction and a lending library for children, which features books that fit school needs and are not necessarily purchased for home libraries. Hours are 10:00 am to 9:00 pm seven days a week.
Our target market are customers aged 12–20 who reside in the Cheyenne area, or within 25 miles of the store's location. Because of the demographics of the population, we feature many books that are teenage, fantasy, and Asian–themed; we are appealing to the mid– to high–income market segment.
Some of popular titles are: Mango, Anime magazines and books, as well Figuring. The goal of our company is to grow our business by appealing to clientele who currently purchase materials from the internet and other mail order places.
MARKET ANALYSIS
Cheyenne does not have any other stores that sell this type of product; we will be the only operation of this type. Even though Cheyenne only has a population of 60,000, we are very confident that our products will do well in such an area with limited population.
Based on our present statistics we have determined that there approximately 1,900 potential clients who buy the materials we will sell in our store. They purchase these items from the internet auction sites like Yahoo Auctions, Google search sales, and EBay auctions, but the pricing on these sites is comparable to the prices we will be able to offer. Therefore we will be able to sell our products and be very competitive with all the internet competitors. In fact, we will be able to offer better prices, if you factor the shipping fees in the online purchase price.
The growth of this business is mainly due to growth in computer software products that are on the market. The Asian artists seem to have started a cultural revolution about seven years ago in Japan. Today the products have made their way to North America and we are very confident that the products will continue to grow.
Marketing & Sales
Wizard and Warlock Books focuses largely on individuals and families whose incomes are such that they have the interest to purchase, as well as collect, some of the best art animation books in the industry. The retailer's basic discount is 45 percent for trade books and 29 percent for non–book merchandise. For the purpose of this business plan, the total cost of goods sold, after computing transportation costs, is 75 percent of gross sales.
Advertising
Using the recommendations of the American Booksellers Association (ABA), the owners intend to allocate a sum equal to two percent of annual sales for promotion and advertising in the following media:
- Regular newspaper ads in the Wyoming Times.
- Display ad in the Yellow Pages.
- Direct–mail advertising to regular book purchasers and to a list of prospective buyers who fill out in–store cards.
- Key word search on sites like Google, Yahoo!, and MSN.
- Library and school promotions during Library Week
- Special educational events.
FINANCIAL ANALYSIS
The owners of Wizard and Warlock Books started the business with their own equity investment of $50,000. To this sum, they are adding a second equity investment of $20,000, and will require an additional $50,000 as a business loan. These funds will be used for the following purposes, to build the business and to increase future sales:
- The addition of 1,200 square feet of store space, which is available directly adjacent to the present layout.
- Construction of new shelving and reorganization of existing shelves for the enhanced display of books.
- Redecorating the entire store with a new a fantasy theme, coinciding with the books we sell.
MANAGEMENT SUMMARY
We will be open seven days a week from 10:00AM to 9:00PM. We will hire six part–time and two full– time staff which includes one owner.
Salaries
Wages will be $12.00 per hour for part–time staff and $14.00 per hour for full–time staff. The owner will take a salary of $40,000 per year for the first year, then $45,000 per subsequent year, with a 33 percent share in net profits for every year thereafter. Each year the company meets expectations, the owner will get an additional 10 percent bonus to her salary.
START–UP COSTS
| Start-up expenses | ||
|---|---|---|
| Cash purchases | $ | 40,000 |
| Utilities | $ | 200 |
| Repairs & maintenance | $ | 1,000 |
| Professional fees | $ | 300 |
| Insurance | $ | 500 |
| Rent | $ | 1,100 |
| Travel | $ | 500 |
| Telephone | $ | 400 |
| Postage | $ | 100 |
| Office equipment/supplies | $ | 1,200 |
| Marketing/advertising | $ | 2,100 |
| Freight | $ | 5,000 |
| Other | $ | 1,500 |
| Total Start-up expenses | $ | 53,900 |
| Start-up assets needed | ||
| Cash balance on starting date | $ | 5,000 |
| Start-up inventory | $ | 40,000 |
| Other current assets | $ | 0 |
| Total current assets | $ | 45,000 |
| Funding | ||
| Investor 1 | $ | 30,000 |
| Investor 2 | $ | 20,000 |
| Total investment | $ | 50,000 |
| Current liabilities | $ | 40,000 |
| Accounts payable | $ | 10,000 |
| Current borrowing | $ | 60,000 |
| Other current liabilities | $ | 10,000 |
| Total liabilities | $ | 120,000 |