Home Accessories and Gifts Business Plan
Dan Carithers, a top interior designer in Atlanta, believes that accessories are the most important ingredient in decorating a room. He says, "A sofa’s a sofa, a rug a rug, but accessories are how you can sense what a person is all about. They create the ‘I’m home’ feeling." (Source: Atlanta Magazine Shops Fall 2001)
The Scarlet Tassel is a start-up retail store in the Sandy Springs/Lower Roswell area of Atlanta, Georgia. We offer eclectic home accessories and gifts to middle- and upper-class consumers who seek unique expressions of their individual style. We aim to provide exceptional customer service, quality, and value to enhance the customer experience. In Year Two, we will establish our online presence at www.thescarlettassel.com. In Year Three, we will transition to e-commerce and ship directly to our web customers. Our website will serve as a virtual business card and portfolio for our company.
Our growth plans for The Scarlet Tassel include a projected comfortable total revenue in Year One. In Year Two, we will focus on developing services, marketing plans, and our web presence to achieve a 30% growth rate. We anticipate approximately 20% further growth in Year Three through the development of e-commerce and increased consumer awareness. We believe these expectations are realistic and attainable.
The founders of The Scarlet Tassel, Deirdre Staab and Shelly Dozier-Mckee, bring a combined 36 years of experience to the business. Their expertise covers merchandising, marketing, purchasing, forecasting, operations, and direct import sourcing. The Scarlet Tassel, Inc. is an S corporation, with Deirdre and Shelly each owning a 50% share of the business and equity investment. We are seeking additional funding for asset purchases and start-up costs to make The Scarlet Tassel a reality.
1.1 Mission
The Scarlet Tassel is a store for the quality- and style-conscious consumer. We provide unique, affordable home accents and gifts, with the goal of generating a fair return to finance continued growth and expanded community involvement.
Customer Creed
The Scarlet Tassel will inform, inspire, and show our customers how to create an expression of themselves within their home. Through custom services, smart pricing, and trust, we aim to be their valued resource to achieve a personalized home environment.
Employee Pledge
Our employees will enjoy a friendly, fair, and creative work environment that respects diversity, new ideas, and hard work.
1.2 Keys to Success
The primary keys to our success will be based on selling products that provide quality and value to the consumer while meeting their needs for personal style.
1.3 Objectives
– Maintain a direct cost of sales of 45% or less and a gross margin of 55% or greater.
– Maintain operating expenses to equal or less than the planned amount.
– Generate total revenue of $626,000 in Year One.
– Develop an Internet presence in Year Two.
– Take Internet presence to e-commerce in Year Three.
– Realize an annual growth rate of approximately 30% in Year Two.
– Realize an annual growth rate of approximately 20% in Year Three.
Privately owned and operated by Deirdre Staab and Shelly Dozier-Mckee, The Scarlet Tassel is a retail store offering stylish, affordable home accessories and gifts to consumers wanting to create a personalized home environment.
Located in the Sandy Springs/Lower Roswell area of Atlanta, Georgia, The Scarlet Tassel caters to middle- and upper-class consumers who look beyond national chain stores for home accessories and gifts.
After establishing a successful and growth-oriented business, we plan to expand to e-commerce during our third year of operation. This additional business channel will allow us to reach a broader customer base and expand the level of customer service and personalized services we offer.
STORE LOCATION
The Scarlet Tassel will be located in the Sandy Springs/Lower Roswell area of Atlanta, Georgia. With easy access from Interstate 285, the Sandy Springs/Lower Roswell area attracts shoppers from many parts of the city. It offers a diversity of business venues, including national chains like Target and K-Mart, as well as local service establishments such as coffee houses, restaurants, and unique specialty shops. Our store will be in an urban lifestyle strip mall with high visibility and established foot traffic.
STORE OPERATION
The Scarlet Tassel will be open Monday-Sunday, closed on major holidays. Our hours of operation will be 10:00 a.m.-6:00 p.m. Monday-Saturday and 12:00 p.m.-5:00 p.m. Sunday. During the holidays, our hours will be extended to 7:00 p.m.
We will initially have one full-time employee working 40 hours a week and one part-time employee working 30 hours or less a week. Both owners will be on site daily and will provide additional sales and customer support assistance.
STORE POLICIES
To most effectively service the customer, The Scarlet Tassel will accept cash, check, credit card (Visa, Mastercard, American Express), debit card, traveler’s checks. Merchandise returns will be granted a full refund within 14 days of purchase with a sales receipt. Within 30 days of purchase, store credit will be granted with or without a sales receipt. Gift recipients can return items for exchange or store credit. Damaged and defective items can be returned for exchange or refund via the original form of payment.
2.1 Company Ownership
The Scarlet Tassel is a privately-held S corporation owned by Deirdre Staab and Shelly Dozier-McKee, each with 50% ownership in the company.
2.2 Start-up Summary
Total current and long-term assets will make up 86% of start-up requirements. Start-up expenses, detailed in the following table, comprise the remaining 14%.
Start-up funding will be a combination of equal investment by the two owners and a long-term commercial loan calculated at 10.5% for six years.
Capital Equipment Listing
– 1 4-Line Phone system, Panasonic KXTG4000B: $500
– 1 All-In-One Printer-Fax-Scanner-Copier, Hewlett Packard, D135: $500
– 1 Barcode Label Printer, Eltron: $575
– 1 Local Appserver, Pentium 4, 1.8 GHz, 512 RAM, 40 GB Harddrive, 10/100 NIC, 48x CDRW, 17” Monitor, Keyboard, Mouse, Windows XP Professional, Norton System Works 2002, PCAnywhere Host & Remote 10.5, Dell Dimension 4500S: $1,329
– 2 Point-of-Sale Systems, Pentium 3, 700 MHz, 256 RAM, Windows 2000, 12” Touchscreen, Thermal Receipt Printer, Cash Drawer, Credit Card Reader, Hand Scanner, Customer Display, Keyboard, Mouse
Posiflex, JIVA PL Series: $6,790
– 3 Battery Power Backup, 3-500 VA UPS APC: $480
– 2 Laptop Computers, Pentium 3, 1.2 GHz, 512 RAM, 30 GB Harddrive, CDRW, Double Capacity Battery, Windows XP Professional Sony, VAIO R505GC: $4,360
– 1 Digital Camera, 3.3 Megapixel Sony, Cybershot DSCS75: $500
– 1 Camera Battery, Lithium Ion Sony: $60
– 2 Camera Memory Sticks, 128 MB Sony: $120
– 1 Camera Carry Pouch LowePro: $11
– 1 Retail Management Software, POS & Inventory Management Celerant ARMS: $5,560
– 1 Accounting Software, QuickBooks Pro Quicken: $249
– 1 Credit Card Software, PCCharge Pro Go Software: $299
Total: $21,333
Start-up Requirements
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Baby Boomers 3% 41,281 42,519 43,795 45,109 46,462 3.00%
Generation X 4% 50,723 52,752 54,862 57,056 59,339 4.00%
Echo Boomers 3% 31,608 32,430 33,273 34,138 35,026 2.60%
Total 3.31% 123,612 127,701 131,930 136,303 140,827 3.31%
4.2 Service Business Analysis:
The home decorative and gift industry is experiencing continued success as Americans refocus their priorities and place more emphasis on the core values of home and family. Consumers are looking for stores that offer quality and value in both their products and services. They seek products that enhance their lifestyle, make their lives more comfortable, and provide unique selections. Many consumers prefer independent retailers that offer a personalized shopping experience. Personalization and uniqueness are highly valued, as well as convenience and easy return policies. Retail stores have become increasingly similar, and consumers are looking for more personal and interesting products that reflect their individual style and taste.
Competition and Buying Patterns:
The Scarlet Tassel faces competition from various stores in the Sandy Springs/Lower Roswell areas. Each store has its own unique offerings and target market:
Hospitality House: This store specializes in traditional decorative accessories and dining items. They cater to older customers and have a formal decorating style.
What Fun: This store offers whimsical and eclectic gifts for all occasions. They have a playful and fun store environment.
Store House: This retail furniture chain offers modern and contemporary furniture pieces along with decorative accessories.
Paper Affair: This store focuses on paper products such as stationery, cards, gift wrap, and invitations. They also offer a small selection of personal gifts.
The Beaded Lizard: This independent jewelry and gift store offers handcrafted and beaded jewelry along with small gifts. They attract a younger audience.
Ross Dress for Less: This national discount store offers a range of apparel and accessories along with discounted home decorative accessories.
K-Mart: This national chain discount store offers a diverse range of products including clothing, furniture, and decorative accessories.
Marshall’s: Similar to Ross Dress for Less, Marshall’s offers discounted clothing, footwear, and home products.
Target: This multi-channel discount store offers a wide range of products and styles. They focus on the latest trends and styles in home decor.
Lakewood Antiques Mall: This antiques mall specializes in antique furniture, accessories, rugs, and garden decor. They cater to customers with a unique decorating style.
The Scarlet Tassel differentiates itself by offering unique products in design and style, along with personalized services and a trustworthy shopping experience. The goal is to target quality-conscious homeowners who seek personal service and smart pricing.
Web Plan Summary:
In Year Two, The Scarlet Tassel plans to develop a website showcasing its products and providing design and trend information. The website will also offer resources such as articles, research, and product information to provide value to customers. The website will mirror the store’s image and branding while incorporating the latest trends in user interface design.
Website Marketing Strategy:
The Scarlet Tassel will leverage its existing customer base to promote its website and encourage word-of-mouth recommendations. Search engine marketing, banner advertising, and affiliate marketing will also be utilized to drive traffic to the website.
Development Requirements:
The development costs for the website include upgrading to Celerant ARMS Internet Engine and site design. Site implementation will be done by Andy Staab, who has extensive experience in software development and web development. Ongoing costs include website name registration, site hosting, search engine registration, and site design changes.
Strategy and Implementation Summary:
The Scarlet Tassel will leverage its expertise, product offering, and marketing strategy to increase customer base, sales, and profit. The competitive edge will be established through unique products, personalized services, and knowledgeable employees.
Marketing Strategy:
The Scarlet Tassel will utilize local and regional magazine publications, direct mail postcards, and website marketing to promote its products and services. Seasonal promotions and anniversary sales events will encourage additional sales. The goal is to establish recognition of expertise and increase awareness of The Scarlet Tassel within the retail consumer marketplace.
Sales Strategy:
The sales strategy of The Scarlet Tassel emphasizes building relationships with customers through personalized service and gathering customer feedback. The product range will be sourced through international trade shows to ensure a current and up-to-date offering. Merchandising will focus on creating a strong visual impact. Pricing will be competitive, and employees will be trained to provide excellent customer service.
Technology:
The Scarlet Tassel has chosen Celerant ARMS as its retail management software. It offers real-time data access, point-of-sale capabilities, transaction tracking, customer management, and inventory management. The use of technology will enhance the customer experience and support the growth of the business.
The sales forecast is based on The Scarlet Tassel’s planned retail space and the average sales per square foot expected. Monthly sales have been adjusted to account for seasonal fluctuations, with dips in sales expected in the first quarter. Quarterly sales will be driven by major categories and supported by seasonal promotions.
Decorative Accessories – 70%
Accent Furniture – 3%
Wall Decor – 6%
Home Textiles – 2%
Special Occasion Gifts – 7%
Personal Accessories – 5%
Seasonal Decor – 3%
Garden Decor – 4%
2nd Quarter
Mother’s Day, Father’s Day, Memorial Day, 4th of July
Decorative Accessories – 70%
Accent Furniture – 3%
Wall Decor – 5%
Home Textiles – 2%
Special Occasion Gifts – 8%
Personal Accessories – 5%
Seasonal Decor – 3%
Garden Decor – 4%
3rd Quarter
Labor Day
Decorative Accessories – 70%
Accent Furniture – 4%
Wall Decor – 6%
Home Textiles – 2%
Special Occasion Gifts – 8%
Personal Accessories – 5%
Seasonal Decor – 2%
Garden Decor – 3%
4th Quarter
Halloween, Thanksgiving, Christmas, New Year’s
Decorative Accessories – 70%
Accent Furniture – 4%
Wall Decor – 4%
Home Textiles – 3%
Special Occasion Gifts – 8%
Personal Accessories – 5%
Seasonal Decor – 4%
Garden Decor – 2%
Growth rates for Years One through Three are planned as follows:
– 2003 to 2004 (Year One) – $179 per square foot
– 2004 to 2005 (Year Two) – $237 per square foot; 32.40% growth
– 2005 to 2006 (Year Three) – $284 per square foot; 19.83% growth
With the industry average estimated at $300 per square foot, growth planned is attainable. These projections are supported by the strength in the Atlanta home decor market (Source: Home Accents Today, Spring 2002).
Sales Forecast:
Year 1 Year 2 Year 3
Sales
Revenue $589,000 $829,000 $995,000
Other $0 $0 $0
Total Sales $589,000 $829,000 $995,000
Direct Cost of Sales:
Year 1 Year 2 Year 3
Inventory $217,930 $306,730 $368,150
Inbound Freight $47,120 $66,320 $79,600
Other $0 $0 $0
Subtotal Direct Cost of Sales $265,050 $373,050 $447,750
6.4 Milestones:
The following table lists important milestones, with dates and persons primarily responsible for planning, as well as budgets where applicable. Mentioned by first name in the table are a few persons whose expertise in their field of work are required to make The Scarlet Tassel a reality. They include:
– Bob Levine – Real Estate Agent, Coldwell Banker Commercial
– Jeff Burkholder – Graphic Artist, Burkholder Designs
– Victor Moldovan, ASID – Store Planner & Designer, Moldovan Interior Design
– Barry Brouner, CPA – Accounting & Tax Consulting
– Steve Anderson – Attorney, Anderson & Dailey
Management Summary
The Scarlet Tassel has a strong, experienced management team in Deirdre Staab and Shelly Dozier-Mckee, with 36 years of combined experience. Each brings expertise to the business.
Shelly Dozier-Mckee, Co-Owner/Manager – Merchandising & Marketing
Shelly has 17 years of experience in the retail and catalog industry, with expertise in apparel, footwear, accessories, gifts, and home decor. She spent 10 years with a leading international retail and catalog company in Seattle. Shelly has strategic planning experience, business management experience, and offshore sourcing and product development experience.
Deirdre Staab, Co-Owner/Manager – Operations & Finance
Deirdre is a 19-year veteran of the catalog industry, with experience in footwear, accessories, gifts, and home decor. She has experience in strategic planning, policy development, merchandising, purchasing, forecasting, vendor management, warehouse and call center operations, transportation, and software development. Deirdre is recognized for her expertise in inventory management and forecasting.
Decision-making will be divided as follows:
Shelly Dozier-McKee
– Merchandising & Store Planning
– Marketing & Advertising
– Workshop Development & Instruction
– Web Development: Front End
Deirdre Staab
– Purchasing & Numerical Analysis
– Operations & Accounting
– Software & Computer Systems
– Web Development: Back End
Shared Responsibilities
– Hiring, Employee Development & Policies
– Customer Services & Policies
Personnel Plan
The Scarlet Tassel store hours are Monday-Saturday, 10:00 a.m. to 6:00 p.m., and Sunday, 12:00 p.m. to 5:00 p.m. The Personnel Plan has been developed to support these hours and expected volumes.
Assumptions for personnel are as follows:
Year One: Owners, Deirdre Staab and Shelly Dozier-Mckee, will not take a salary for the first three months. Starting in July, their salaries will increase incrementally every two months until the planned annual salary is reached by January 2004. One full-time employee and one permanent part-time employee will be hired to start work the first week of April 2003. One temporary part-time employee will be hired for the Holiday season. The full-time employee hired is expected to have retail management experience or be promotable to assistant manager or manager within a few years. The permanent part-time employee will be hired at the Atlanta average of $10.00 per hour, and the temporary part-time employee will be hired at $9.00 per hour.
Year Two: Salaries for owners will increase starting in July 2004. Current employees will receive salary reviews and appropriate increases.
Year Three: Salaries for owners will remain the same. Current employees will receive salary reviews and appropriate increases. A second full-time employee will be hired in April 2005, and a temporary part-time employee will be hired for the Holiday season if needed.
Personnel Plan
Year 1 Year 2 Year 3
Co-Owner/Manager–Merchandising & Marketing $22,506 $37,500 $60,000
Co-Owner/Manager–Operations & Finance $22,506 $37,500 $60,000
Full-Time Sales Associate / Manager Trainee $30,000 $32,000 $35,000
Full-Time Sales Associate $0 $13,402 $26,000
Part-Time Sales Associate $15,776 $16,410 $17,063
Part-Time Sales Associate $0 $11,875 $12,350
Part-Time Sales Associate / Holiday Temp $3,549 $3,904 $4,294
Total People: 4 in Year 1, 5 in Year 2, 7 in Year 3
Total Payroll: $94,337 in Year 1, $152,591 in Year 2, $214,707 in Year 3
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