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Business Plan - Example

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BENEFITS OF DOCUMENT

1. Real-life example of a business plan
2. Easy to use templates for your own presentation

DOCUMENT DESCRIPTION

Example of a BUSINESS PLAN for an online furniture business

Online retail is reaching the next stage, shaping opportunities in the home decoration industry for start-ups that change the rules of the game

With an investment of EUR 100 k, Company X will launch an online home decoration brand targeting EUR 12.5 m revenues in year 5

We have a strong team with the business knowledge, experience and contacts to make Company X a success

Our target customer is a 40+ year old woman with a passion for classical interior design

Her home is her castle and she is constantly looking for high-quality decoration items with a ?story? to create a warm and cozy family home

She loves to shop at small boutiques, but these are quite expensive, too far away and in the end the quality is not what she hoped for

Traditional home decoration retail needs breakthrough business model innovation to overcome a challenging industry situation

As an online brand, operating from Poland, Company X is able to offer high quality home decoration items at attractive prices

By selling under our own brand, we can differentiate our products, have complete freedom in price setting and exploit any trend inspired on the past

All operations will be organized in Poland ? the combination of high skills, low wages and short lead times ensures quality at low cost

We attract customers through online marketing, inspire them via our online magazine, retain them through our blog and sell to them in our webshop

We will ship our products, packaged as gifts, from our warehouse in Poland directly to our customers in Western Europe

We will start selling in the Netherlands ? Main growth priorities are the UK and Germany where we can build up scale at relatively attractive margins

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Business Plan - Example

  1. 1. Business Plan Example: Online furniture business Tools & Frameworks - v 1.0
  2. 2. 3 With an investment of EUR 100 k, Company X will launch an online home decoration brand targeting EUR 12.5 m revenues in year 5 • As an online brand with operation in Poland, Company X is able to offer high quality home decoration items at attractive prices • By adding one country per year, we can target a market of 10 m women with an interest in classical design that amounts to EUR 900 m • First projections show revenues around EUR 12.5 m in year 5, with net profits of EUR 2.6 m • We are on schedule to launch in September 2010 – next steps are to contract suppliers, develop a full webshop & webmagazine and secure funding • We are looking for a private investor with experience in online retail that invests EUR 100 k for 40% of equity to finance inventory, working capital and investments in the website EXECUTIVE SUMMARY This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  3. 3. 5 Our target customer is a 40+ year old woman with a passion for classical interior design Customer segmentation based on interior design magazine styles1) “I am a 40-60 year old woman, with a higher income and higher education” “I love classic interiors, tasteful antiques, and selected shopping addresses” “I´m constantly looking for a source of inspiration for my house and I love to read my home-deco magazine” “I can decorate my house as I wish (my husband doesn’t care). I buy whatever I like for our home” 1) See backup for full segmentation Modern & Metropolitan Do-It-Yourself decoration Classic & Country-side Luxurious living CUSTOMER This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  4. 4. 7 She loves to shop at small boutiques, but these are quite expensive, too far away and in the end the quality is not what she hoped for NEED “I like the style, I know I can always find products I like” Pros and cons of a typical real-life shopping experience at boutique1) “I love shopping here, but the boutiques are quite expensive” PROs CONs “The personal touch is great – as a regular customer I get special treatment“ “In the end the quality was not what I hoped for” “I love to exchange addresses of new boutiques with friends” “Somebody with ‘”the eye” showed me new trends and inspired me” “Boutiques I like are too far away and have limited opening hours” “When I see a nice chair they only have 1 …” 1) Based on interviews with focus group of target customers TYPICAL BOUTIQUE This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  5. 5. 9 Typical boutique Company X Business model As an online brand, operating from Poland, Company X is able to offer high quality home decoration items at attractive prices - 20% Product Personnel & housing Margin Discounts Sales & delivery 30% 30% 10% 10% 10% 40% 10% 25% 25% Wholesaler 10% 100 80 Own brand and design Manufacturing and operation in Poland Sell via online shopping experience At home delivery and local service >Differentiate with own brand >Freedom in pricing strategy >Exploit any trend that brings back a scent of the past >All items packaged as gifts >Small items can be shipped at relatively low cost >Service through local agents >No wholesale margins >Wide reach to get economy of scale >Cut out high fixed cost of housing and personnel >Suppliers with craftsmanship >Relatively low wages >Short lead time reduces need for large inventory Source: CBS BUSINESS MODEL This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  6. 6. 11 All operations will be organized in Poland – the combination of high skills, low wages and short lead times ensures quality at low cost SHORT LEAD TIMES Manufacturing and operations strategy Lublin (warehouse) Warsaw3 days 2 days 5 days 5 days 2 days > Poland has a long tradition of manufacturing items made of porcelain, glass , lace and wood > Poland is one of the most competitive furniture exporters in the world – # 3 in terms of growth – # 4 in terms of size HIGH SKILLS AT RELATIVELY LOW WAGES > Short lead times compared to production in Asia > Significantly limits inventory needs > Local suppliers still employ highly skilled workers > Relatively low wages (60-70% lower than in the Netherlands) > Highly subsidized by the European Union Source: UN Comtrade database, Polish Bureau of Statistics, Ecoparcel MANUFACTURING & OPERATION This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  7. 7. 13 We will ship our products, packaged as gifts, from our warehouse in Poland directly to our customers in Western Europe Door-to-door delivery from Poland to Western-Europe • Outsourced to logistics provider • Consumers pay EUR 4.95 delivery costs on orders < EUR 100 • If parcel cannot be delivered, we try 2x more after which it is stored for pickup • Track & trace of packages on website • Proactive after sales service call when package is delivered • Returns can be send to the address of a local agent, but at own expense • Damaged or broken goods will be replaced by local agent PACKAGE AS GIFTS • All items packaged as gifts to emphasize luxury feeling • Handwritten “with compliments” note for personal touch • Ship ready made product • Package contains flyers to hand- out to friends SHIP DIRECTLY FROM POLAND PROVIDE LOCAL SERVICE Source: Ecoparcel DELIVERY This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  8. 8. 15 By adding one country per year, we can target a market of 10 m women with an interest in classical design that amounts to EUR 900 m 2011 20122010 2013 2014 2015 Market potential of (online) classical interior design 60 m 365 m 700 m 840 m 915 m 45 m Market size 2 ) (# target customers) Market size 1) (online spend of target customers) 1 m 3.5 m 6.8 m 9.3 m 9.7 m0.6 m Local agents - 1 2 3 4- Polish employees 1 2 3 11 270.5 1) 20% of 2009 market size for each country; 2) Number of 40-60 year old women with an interest in classical interior design GROWTH STRATEGY This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  9. 9. 17 First projections show revenues around EUR 12.5 m in year 5, with net profits of EUR 2.6 m 10 100 400 1,350 4,100 12,500 2010 2011 2012 2013 2014 2015 NET REVENUES (EUR k) -10 5 65 240 800 2,600 2010 2011 2012 2013 2014 2015 NET PROFITS (EUR k) Forecasted net revenues and net profits REVENUES & PROFITS Source: Monte Carlo analysis with Crystall Ball, 10.000 trials > In 2015 we expect gross margins of 30% and net margins of 20% (after tax) > In 2015 we expect to sell 160.000 products at an average price of EUR 100 (incl. VAT) This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  10. 10. 19 Through our blog and marketing campaign we have already established contact with >500 potential customers and learned what their needs are ANALYSIS OF WEBLOGANALYSIS OF ONLINE MARKETING CAMPAIGN Key questions answered: > What are people looking for? -> most used keywords are “vintage furniture”, “living trends” and “nostalgic living” 1) > What is the Cost per Click? -> around EUR 0.20 > What is the Click Through Rate? -> around 2% Current customer contact Key questions answered: > How many visitors? -> Over 500 unique visitors in 2 months > Is the content what people look for? -> 3.3 page views / visit > Where does our traffic come from? -> 65% search engines > What is the repeat visitor rate? -> around 23% Source: Google AdWords, Google Analytics 1) Out of over 80 keywords that show our online advertisement RISK ASSESSMENT This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  11. 11. 21 We are looking for a private investor that invests EUR 100 k for 40% of equity to finance inventory, working capital and investments in the website Offer to investors FUNDING FUNDING (EUR k) USE OF FUNDS EXIT STRATEGIES > We look for a private investor with experience in online retail > If growth is higher than projected, max EUR 125 k of extra funding is needed1) > Finance inventory and working capital > Invest in website > Cover initial losses -€100 €0 €100 €200 €300 €400 €500 • Sell to offline home-deco firm • Sell to e-commerce firm • Sell to private equity firm • Management buy-out Personal loan Investor funding 1) Based on 95% certainty interval -> revenues of EUR 35 m with profits of EUR 7.5 m; 2) Personal loan already taken into account Source: Monte Carlo analysis with Crystal Ball, 10.000 trials 2010 2011 2012 2013 2014 2015 Cumulative Cash flow 2) 100 (80%) 25 (20%) EXIT 2015 > At projected revenues and profits the company could be valued at EUR 5-10 m in 2015 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  12. 12. 23 Our customer is a 40-60 year old woman that loves classic design – she can decorate her house as she wishes and is constantly looking for inspiration Target customer > 40-60 year old woman, higher income, higher education > Can decorate her house as she wishes. If she sees something she likes, she buys it. > She loves classic interiors, tasteful antiques, and selected shopping addresses > Her home is not static; she wants to make it ever more attractive and comfortable > She is constantly looking for a source of inspiration > She enjoys going to auctions, concerts, museums, eating out Customer segmentation of Dutch home decoration magazines (# of readers) 100.000 readers Country-side & classic design Metropolitan & modern design Luxurious DIY VT wonen Eigen huis & interieur Seasons Buitenleven101 Woonideeen Ariadne at Home Home and garden More than classic Landleven Residence Elle wonen Source: NOM PRINT MONITOR 2008-II/2009, company websites 445k 296k 1) Lower than the sum, as some people read more than one magazine +/- 750 k readers1) 114k 20% of total CUSTOMER This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  13. 13. 25 Online retail is evolving from transactional buying to emotional shopping MARKET 6.0 years 5.4 years 5.4 years 5.1 years 5.0 years 4.8 years 4.6 years 3.1 years 2.6 years 2.3 years 1.8 years 1.5 years 1.0 years Books Software Music, video Airline tickets Apparel, shoes Computers Electronics Toys Jewelry Sporting goods Appliances Automobiles Online sales by product group Source: North American Technographics® Retail Online Survey, Q1 2008 1) Base: US online shoppers who have seven or more years of online purchasing experience, Q1 2008 Transactional Emotional How long have you been purchasing each of the following types of products online? 1) 18% 28% 55% 15% 9% 20% 35% 44% 30% 43% 0% 10% 20% 30% 40% 50% 60% 2004 2006 2008 2010 2012 Computers, software Appliances Furniture Tickets Travel Apparel, shoes Jewelry Books Baby products Music , video Share of sales through online channels 1) Furniture Transactional Emotional This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  14. 14. 27 The ‘average’ emotional online shopper is a 44 year old educated woman with a high household income Profile of the US online fashion buyer, November 2007 Online statistics Broadband at home: 75% Technology optimist: 70% Online spend (3 months): USD 720 Demographics Female : 60% Age: 44 years Household income: USD 84 k College degree: 58% 54%37% 9%Early adopter Mainstream Sideline I often tell my friends about products that interest me 52% 48% 45% 44% 39% Attitudes and behaviors I would pay more for products that save me time/hassles I’m always willing to try or do new things Price is more important to me than brand names If I really want something, I will buy it on credit Segmentation 77% 36% 35% 18% 16% 11% Online activities (monthly) Research products for purchase Read customer ratings/reviews Track shipped packages Use social networking sites Use comparison-shopping sites Post ratings / reviews Source: Forrester, 2008 CUSTOMER This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  15. 15. 29 Women shop online for ‘emotional’ products – clothing tops the list Internet shopping habits of Dutch women 1), 2002–2008 53% 49% 44% 42% 25% 25% 20% 11% 6% 2% Clothing & apparel Travel & accomodation Tickets Books & magazines Software/hardware, electronics Films, music Furniture & home applicances Groceries & cosmetics Financial services Other Source: CBS 1) Base: all women 12-74 year old CUSTOMER This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  16. 16. 31 As the online sales channel has a much wider reach than physical stores, it offers economies of scale for niche products Home decoration retail segmentation Volume Price / Margin Discounters, DIY stores Life-style brands Specialty storesBrand dealerships & franchisers (Inter)national chains Boutiques Key selling point Price Brand Quality COMPANY X > Online channel offers economies of scale and reduces costs of personnel and housing > Cut out wholesaler/brand by selling own brand Competition COMPETITION This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  17. 17. 33 Company X is able to offer high quality home decoration items at 20% lower cost and double the margins compared to a boutique 30%40% 100% 15% 10% 3%2%3%5%2% 17% 13% 10% 10% 10% Raw material LabourSalesMarginFactory price LabourSalesMarginWhole- sale price LabourHousingSalesMarginDiscountRetail price Cost structure of home decoration value chain (% of boutique net sales price) RETAIL WHOLESALE PRODUCTION * * * * Source: CBS, CBW Kerngegevens woonzaken 2008 * Estimates 2) 32%32% 80% 16% 11% 3%2%6%2% 19% 20% 1% Company X Offline boutique COMPETITION This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  18. 18. 35 All products will be sourced from Poland, one of the most competitive furniture exporters in the world 0% 10% 20% 30% 40% 0 5 10 15 20 World furniture exports – top 25 countries Growth (CAGR ‘03–’07) Export 2007 (USD Bn) 30 Italy UPCOMING PLAYERS LOSERS OLD PLAYERS Vietnam United States Canada Mexico Romania Czech Republic Average Poland China Average Germany WINNERS Source: UN Comtrade database FINANCE This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  19. 19. 37 We expect to be cash flow positive in 2012 – EUR 100 k of external funding is needed to finance inventory and other working capital -€50 €0 €50 €100 €150 €200 €250 €300 €350 Forecasted cash flows and external funding needed CASH FLOW DEVELOPMENT (EUR k) EXTERNAL FUNDING NEEDED 2010 2011 2012 2013 2014 2015 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 300 k0 100 k 400 k 600 k Mean: EUR 95 k 200 k 500 k > We need EUR 100k of funding for inventory and working capital 1) > If growth is higher than expected, max EUR 125 k of extra funding is needed2) > We expect to be cash-flow positive in Q2 2012 > Includes personal loan (EUR 25 k) Source: Monte Carlo analysis with Crystal Ball, 10.000 trials 1) Excluding EUR 25 k personal loan; 2) Based on 95% certainty interval CASH FLOWS AND FUNDING Out of 95% confidence interval Within 95% confidence interval This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  20. 20. 39 Company X’s business model changes the rules of the game VALUE PROPOSITION High-quality authentic home decoration items sold through a unique online shopping experience to older women CORE CAPABILITIES • Market and customer know-how • Purchase/ design products • Marketing • Operations management and quality control • Communication: speak local languages ! PARTNER NETWORK • Extensive personal social network in Poland • Polish suppliers • Indian IT developers • Website designers • Magazines/bloggers/etc. CUSTOMER RELATIONSHIP • (Online) community, blog • Newsletter • Personalized login, brochure, etc • Contact center • Indirect: word of mouth, magazines, blogs TARGET CUSTOMER • 40-60 year old women • Interest in life-style and interior design • Determine 90% of home decoration purchases • Initial market: the Netherlands (#1 internet access) – expand to Western-Europe VALUE CONFIGURATION • Purchasing, design • Storage, packaging • Sales & marketing • Service & customer mgmt • Website design & content • Outsourced: production DISTRIBUTION CHANNEL • Online sales • Door-to-door delivery • Service through local contact center COST STRUCTURE • Purchasing • Operations • Logistics • Marketing & sales • IT • Customer service REVENUE STREAMS • Direct product sales • Later stage: personalized advertising • Potentially: 3th party sales INFRASTRUCTURE CUSTOMEROFFER FINANCE BUSINESS MODEL This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  21. 21. 41 Seasonality is limited besides a little peak before Christmas 113 50 60 70 80 90 100 110 120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Seasonal development volumes of home decoration shops, Netherlands (2000 - 2008) Volume (& revenue) Source: CBS MARKT This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  22. 22. 43 Labor costs are rising slightly zł2,000 zł2,200 zł2,400 zł2,600 zł2,800 zł3,000 zł3,200 zł3,400 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 CAGR 3.1% per annum Average monthly gross wages (adjusted for inflation), 2001-2009 Source: Polish Bureau of Statistics FINANCE This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/business-plan-example-1957
  23. 23. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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