Fishing Shop Business Plan
Located off Highway 126, near Oakridge Plaza, McKenzie Tackle and Bait Shop will provide a one-stop resource for fishing products to travelers heading into the McKenzie National Parks System. Highway 126 is the gateway to over 130 public fishing locations and Oakridge Plaza is the last commercial shopping and dining area before entering the McKenzie National Parks System. McKenzie Tackle and Bait Shop will capitalize on its location to attract customers by offering a wide selection of fishing products and information on fishing conditions.
Brad West, owner of McKenzie Tackle and Bait Shop, has been an avid fisherman in the area for the past 25 years. He knows all the area’s best fishing locations and has managed two fishing tackle and bait shops in the past seven years.
1.1 Objectives
– Become a familiar and essential shopping destination for travelers going fishing.
– Build a growing customer base each year.
– Provide exceptional service and products for both experienced and novice fishing enthusiasts.
1.2 Keys to Success
The keys to success for McKenzie Tackle and Bait Shop include:
– Location: Located off Highway 126, next to the new Oakridge Plaza, which serves as the last commercial shopping and dining location before entering the McKenzie National Park System. Highway 126 is the gateway to over 130 public fishing locations in the park system, making it a convenient stop for many travelers.
1.3 Mission
The mission of McKenzie Tackle and Bait Shop is to be the best, most visible fishing product and information resource in the McKenzie National Parks area. The goal is for travelers to consider stopping at our store an important step in their fishing day.
McKenzie Tackle and Bait Shop will be a one-stop resource for all fishing products for travelers heading into the McKenzie National Parks System. The shop will be open from April to November.
2.1 Company Ownership
McKenzie Tackle and Bait Shop is solely owned by Brad West.
2.2 Start-up Summary
Estimated start-up costs and expenses will be financed by Brad West’s personal investment.
Start-up Funding:
Start-up Expenses to Fund: $12,300
Start-up Assets to Fund: $12,700
Total Funding Required: $25,000
Assets:
Non-cash Assets from Start-up: $0
Cash Requirements from Start-up: $12,700
Additional Cash Raised: $0
Cash Balance on Starting Date: $12,700
Total Assets: $12,700
Liabilities and Capital:
Liabilities:
Current Borrowing: $0
Long-term Liabilities: $0
Accounts Payable (Outstanding Bills): $0
Other Current Liabilities (interest-free): $0
Total Liabilities: $0
Capital:
Planned Investment:
Brad West: $25,000
Other: $0
Additional Investment Requirement: $0
Total Planned Investment: $25,000
Loss at Start-up (Start-up Expenses): ($12,300)
Total Capital: $12,700
Total Capital and Liabilities: $12,700
Total Funding: $25,000
Start-up Requirements:
Start-up Expenses:
Legal: $500
Insurance: $0
Rent: $800
Inventory: $7,000
Display Equipment: $2,000
Store Sign: $2,000
Other: $0
Total Start-up Expenses: $12,300
Start-up Assets:
Cash Required: $12,700
Start-up Inventory: $0
Other Current Assets: $0
Long-term Assets: $0
Total Assets: $12,700
Total Requirements: $25,000
Products:
Store products include:
– Fly rods and reels.
– Lines-leaders-tippets.
– Fishing gadgets-net/retractors.
– Fishing footgear.
– Raingear.
– Maps.
– Flies and fly tying materials.
– Gear bags.
– Tubes.
– Misc: drinks, snacks, souvenirs, etc.
Market Analysis Summary:
The McKenzie National Park System is dotted with small fishing tackle and bait shops on small roads around the park system. Most of them only serve a few fishing areas and have irregular operating hours. Highway 126 is the only main traffic artery into the park system and yet there are currently no other tackle and bait shops located on Highway 126. The closest commercial center to the park system, Oakridge Plaza, is eight miles from the park’s entrance. Over 90% of the park visitors use Highway 126 to access the park system. Last year, the park system welcomed 100,000 fishing enthusiasts.
These enthusiasts were typically male between the ages of 20-45 years old. A fishing party of three to five is the norm for the area. Approximately 70% of these fishing enthusiasts visit the park system several times a year and develop strong customer relationships with the area’s businesses.
The McKenzie Tackle and Bait Shop will create a base of loyal customers with quality service and fishing information that customers will come to depend on.
Strategy and Implementation Summary:
Highway 126 is a four-lane highway running north to the park system and south to the town of Mapleton. The McKenzie Tackle and Bait Shop is located just off the northbound lanes and is next to the Oakridge Plaza. The shop will erect a large sign to grab customer attention to its location.
Once in the store, Brad West will provide exceptional service that will build a loyal customer base.
Competitive Edge:
McKenzie Tackle and Bait Shop’s competitive edge is two-fold:
– Location: McKenzie Tackle and Bait Shop is located off Highway 126, next to the new Oakridge Plaza. Highway 126 is the gateway to over 130 public fishing locations in the McKenzie National Park System. Many travelers routinely stop in the plaza at the beginning and the end of their day in the park system.
Sales Strategy:
The key to customer satisfaction is a customer-friendly store that is easy to navigate and has knowledgeable people to help customers find what they want quickly.
The following is the sales forecast for three years. The monthly estimates for the first year are included in the appendices.
Sales Forecast:
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | |||
| Fishing Products | $48,400 | $60,000 | $70,000 |
| Misc | $7,600 | $8,000 | $9,000 |
| Total Sales | $56,000 | $68,000 | $79,000 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
| Fishing Products | $7,000 | $9,000 | $10,000 |
| Misc | $1,500 | $1,750 | $2,000 |
| Subtotal Direct Cost of Sales | $8,500 | $10,750 | $12,000 |
Personnel Plan:
Brad West will operate the shop without any additional staff.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Brad West | $24,000 | $28,000 | $35,000 |
| Other | $0 | $0 | $0 |
| Total People | 1 | 1 | 1 |
| Total Payroll | $24,000 | $28,000 | $35,000 |
The following sections will outline the important financial assumptions, break-even analysis, profit and loss, cash flow, and the balance sheet.
Break-even Analysis:
The break-even analysis indicates the required monthly revenue to break even.
Break-even Analysis:
Monthly Revenue Break-even: $4,595
Assumptions:
– Average Percent Variable Cost: 15%
– Estimated Monthly Fixed Cost: $3,898
7.2 Projected Profit and Loss:
The table and charts below demonstrate projected profit and loss. The appendices contain first-year monthly P & L estimates.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales: $56,000 $68,000 $79,000
Direct Cost of Sales: $8,500 $10,750 $12,000
Other Production Expenses: $0 $0 $0
Total Cost of Sales: $8,500 $10,750 $12,000
Gross Margin: $47,500 $57,250 $67,000
Gross Margin %: 84.82% 84.19% 84.81%
Expenses:
Payroll: $24,000 $28,000 $35,000
Sales and Marketing and Other Expenses: $8,000 $10,000 $11,000
Depreciation: $0 $0 $0
Leased Equipment: $0 $0 $0
Utilities: $1,470 $1,800 $1,800
Insurance: $0 $0 $0
Rent: $9,700 $9,700 $9,700
Payroll Taxes: $3,600 $4,200 $5,250
Other: $0 $0 $0
Total Operating Expenses: $46,770 $53,700 $62,750
Profit Before Interest and Taxes (EBITDA): $730 $3,550 $4,250
Interest Expense: $0 $0 $0
Taxes Incurred: $219 $1,065 $1,275
Net Profit: $511 $2,485 $2,975
Net Profit/Sales: 0.91% 3.65% 3.77%
7.3 Projected Cash Flow
The following is the projected cash flow for three years. First year monthlies are in the appendix.
Pro Forma Cash Flow
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $56,000 | $68,000 | $79,000 |
| Subtotal Cash from Operations | $56,000 | $68,000 | $79,000 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| Subtotal Cash Received | $56,000 | $68,000 | $79,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $24,000 | $28,000 | $35,000 |
| Bill Payments | $32,132 | $35,243 | $40,920 |
| Subtotal Spent on Operations | $56,132 | $63,243 | $75,920 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $56,132 | $63,243 | $75,920 |
| Net Cash Flow | ($132) | $4,757 | $3,080 |
| Cash Balance | $12,568 | $17,325 | $20,405 |
7.4 Projected Balance Sheet
The projected balance sheet for three years is as follows. The first-year monthly projections can be seen in the appendix.
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $12,568 | $17,325 | $20,405 |
| Inventory | $1,170 | $1,480 | $1,652 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $13,738 | $18,805 | $22,057 |
| Long-term Assets | |||
| Long-term Assets | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $13,738 | $18,805 | $22,057 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $527 | $3,109 | $3,386 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $527 | $3,109 | $3,386 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $527 | $3,109 | $3,386 |
| Paid-in Capital | $25,000 | $25,000 | $25,000 |
| Retained Earnings | ($12,300) | ($11,789) | ($9,304) |
| Earnings | $511 | $2,485 | $2,975 |
| Total Capital | $13,211 | $15,696 | $18,671 |
| Total Liabilities and Capital | $13,738 | $18,805 | $22,057 |
| Net Worth | $13,211 | $15,696 | $18,671 |
7.5 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5091, Sporting & Recreational Goods, are shown for comparison.
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 21.43% | 16.18% | 11.50% |
| Percent of Total Assets | ||||
| Inventory | 8.52% | 7.87% | 7.49% | 28.00% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 29.00% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 88.70% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 11.30% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | ||||
| Accounts Payable | 3.83% | 16.53% | 15.35% | 38.00% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 9.00% |
| Total Liabilities | 3.83% | 16.53% | 15.35% | 47.00% |
| Net Worth | 96.17% | 83.47% | 84.65% | 53.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 84.82% | 84.19% | 84.81% | 23.00% |
| Selling, General & Administrative Expenses | 83.91% | 80.54% | 81.04% | 14.80% |
| Advertising Expenses | 14.29% | 14.71% | 13.92% | 0.70% |
| Profit Before Interest and Taxes | 1.30% | 5.22% | 5.38% | 2.00% |
| Main Ratios | ||||
| Current | 26.08 | 6.05 | 6.51 | 2.19 |
| Quick | 23.86 | 5.57 | 6.03 | 1.22 |
| Total Debt to Total Assets | 3.83% | 16.53% | 15.35% | 47.00% |
| Pre-tax Return on Net Worth | 5.53% | 22.62% | 22.76% | 5.30% |
| Pre-tax Return on Assets | 5.31% | 18.88% | 19.27% | 10.10% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 0.91% | 3.65% | 3.77% | n.a |
| Return on Equity | 3.87% | 15.83% | 15.93% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 9.23 | 8.11 | 7.66 | n.a |
| Accounts Payable Turnover | 61.99 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 18 | 29 | n.a |
| Total Asset Turnover | 4.08 | 3.62 | 3.58 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.04 | 0.20 | 0.18 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $13,211 | $15,696 | $18,671 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.25 | 0.28 |
| Pro Forma Balance Sheet | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Assets | Starting Balances | ||||||||||||
| Cash | $12,700 | $12,678 | $12,022 | $11,434 | $12,541 | $12,197 | $12,632 | $13,046 | $14,273 | $16,142 | $16,967 | $15,771 | $12,568 |
| Inventory | $0 | $0 | $0 | $0 | $935 | $1,100 | $1,100 | $1,210 | $1,320 | $1,320 | $1,320 | $1,570 | $1,170 |
| Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Current Assets | $12,700 | $12,678 | $12,022 | $11,434 | $13,476 | $13,297 | $13,732 | $14,256 | $15,593 | $17,462 | $18,287 | $17,341 | $13,738 |
| Long-term Assets | |||||||||||||
| Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total Assets | $12,700 | $12,678 | $12,022 | $11,434 | $13,476 | $13,297 | $13,732 | $14,256 | $15,593 | $17,462 | $18,287 | $17,341 | $13,738 |
| Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Current Liabilities | |||||||||||||
| Accounts Payable | $0 | $636 | $568 | $568 | $3,625 | $3,446 | $3,461 | $3,635 | $3,992 | $4,041 | $3,886 | $3,185 | $527 |
| Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Subtotal Current Liabilities | $0 | $636 | $568 | $568 | $3,625 | $3,446 | $3,461 | $3,635 | $3,992 | $4,041 | $3,886 | $3,185 | $527 |
| Long-term Liabilities | |||||||||||||
| Total Liabilities | $0 | $636 | $568 | $568 | $3,625 | $3,446 | $3,461 | $3,635 | $3,992 | $4,041 | $3,886 | $3,185 | $527 |
| Paid-in Capital | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 |
| Retained Earnings | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) | ($12,300) |
| Earnings | $0 | ($658) | ($1,246) | ($1,834) | ($2,849) | ($2,849) | ($2,429) | ($2,079) | ($1,099) | $721 | $1,701 | $1,456 | $511 |
| Total Capital | $12,700 | $12,042 | $11,454 | $10,866 | $9,851 | $9,851 | $10,271 | $10,621 | $11,601 | $13,421 | $14,401 | $14,156 | $13,211 |
| Total Liabilities and Capital | $12,700 | $12,678 | $12,022 | $11,434 | $13,476 | $13,297 | $13,732 | $14,256 | $15,593 | $17,462 | $18,287 | $17,341 | $13,738 |
| Net Worth | $12,700 | $12,042 | $11,454 | $10,866 | $9,851 | $9,851 | $10,271 | $10,621 | $11,601 | $13,421 | $14,401 | $14,156 | $13,211 |
Business Plan Outline
- Executive Summary
- Company Summary
- Products
- Market Analysis Summary
- Strategy and Implementation Summary
- Personnel Plan
- Financial Plan
- Appendix
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