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Sample Business Plans -> Promotional Products and Packaging

"Promotional Products Mfr." Business Plan:

1.0 Executive Summary
Highlights
1.1 Objectives
1.2 Mission
1.3 Critical Success Factors
2.0 Company Summary
3.0 Products
4.0 Market Analysis Summary
5.0 Strategy and Implementation Summary
6.0 Management Summary
7.0 Financial Plan

 

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Business Ideas applicable for this business plan:

Advanced Bonded NdFeB magnets.

 

This business plan was originally published
by Palo Alto Software, Inc. All rights reserved.

1.0 Executive Summary

A market exists within the advertising specialty industry for velour and leatherette drawstring bags, eyeglass bags, jewelry bags & pen bags to hold various promotional products to increase their perceived value. Elsewares Promotional Products & Packaging (EPPP) has been established to supply these logo imprinted products to advertising specialty distributors who, in turn, market these products to the end user.

The Products

Elsewares intends to develop an inventory of unique products and drawstring packaging products that can add perceived value to those products. These products, which will be sourced from Mexico and the Far East, will be imprinted in-house with various company logos before they are shipped to the distributors.

By joining the Advertising Specialties Institute trade association, Elsewares will have print and electronic access to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. This ranks only behind television and newsprint in terms of advertising dollars spent. Elsewares will market their products exclusively through these distributors and will not sell directly to end users. Elsewares intends to reach those distributors through advertisements in trade publications, through an in-house sales force, and a network of salaried and commission-based sales reps.

Concurrent with our campaign to market these packaging products, we will showcase our line of unique promotional products to the same distributors, thus giving ourselves three sales opportunities: the sale of the promotional product by itself; the sale of some packaging products that the distributor can use with promotional items that are purchased from other suppliers; and the sale of our promotional product coupled with our packaging.

The Market

Sales in the advertising specialties industry have been growing at a rate of almost 7% per year since 1988 and reached over $7 billion in sales last year. This is a very mature industry that is crowded with suppliers and distributors. Within that industry, the three suppliers that offer only velour and leatherette drawstring bags did a combined $2,500,000 in sales. Those three suppliers are located on the East Coast while some of largest advertising specialty distributors in the industry are Midwest and West Coast firms. We feel that by concentrating our efforts on marketing to the West Coast distributors, many of which already have had positive business relationships with our personnel, we will acquire a significant market share of the packaging niche over the next three years.

Financial Considerations

Our initial startup costs will amount to $125,000 of which $66,500 will be used to purchase inventory, office equipment, and imprinting machinery. The balance will be used for catalog costs and initial advertising expenses. Additionally, we project the need for a financial commitment of another $75,000 to finance receivables and payroll expenses for the first 12 months of operation.

Elsewares intends to concentrate its sales force in the western United States and to reach a sales level of $500,000 by the end of 1997. With our fixed cost estimate of $18,000 per month, we need to sell 112,500 units to break-even in a month. Given the estimates, we hit running monthly break-even after the fourth month.

Elsewares is seeking a $300,000 financial package based on a note due in five years, but amortized over 15 years. The note will be personally guaranteed by the founder's assets. By amortizing the note over 15 years, the company will be afforded the opportunity to establish a healthy track record which will enable the company to seek alternate financing for the balance. It should be noted that the owners of Elsewares do not intend to take any profits out of the business until the long-term debt has been satisfied. Whatever profits remain after the above debt payments will be used to finance growth, mainly through the acquisition of additional inventory.

Highlights

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1.1 Objectives

Presently, the three leading suppliers of imprinted pouches to advertising specialty distributors are located on the East Coast and are doing a combined $2,500,000 solely in the sales of pouches. Elsewares intends to concentrate its sales force in the western United States and to reach a sales level of $500,000 by the end of 1997. Elsewares intends to factor our growth by diversifying into unique promotional product offerings which will be attractive as advertising specialties in their own right, or packaged in a drawstring pouch which we can also provide.

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1.2 Mission

Elsewares intends to develop an inventory of unique products and drawstring packaging products that can add perceived value to those products. These products, which will be sourced from Mexico and the Far East, will be imprinted in-house with various company logos before they are shipped to the distributors.

By joining the Advertising Specialties Institute trade association, Elsewares will have print and electronic access to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. This ranks only behind television and newsprint in terms of advertising dollars spent. Elsewares will market their products exclusively through these distributors and will not sell directly to end users. Elsewares intends to reach those distributors through advertisements in trade publications, through an in-house sales force, and a network of salaried and commission-based sales reps.

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1.3 Critical Success Factors

Elsewares management believes that it has the right products and the right people to attract a loyal customer base. But most importantly, it is our business philosophy that will ensure success. The advertising specialty industry demands that products be delivered on time and with high quality imprinting. Pursuant to these demands:

Elsewares will satisfy this demand by maintaining acceptable inventory levels that will be delivered on time according to pre-arranged shipping schedules.

Elsewares will institute a quality control procedure for overseeing the on-site imprinting facility to ensure an acceptable imprint quality.

In addition to offering a complete line of velour packaging products, Elsewares will offer a unique line of promotional products that will encourage advertising specialty distributors to think of our company first when looking for original products.

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