Office Supplies Retail Business Plan

Green Office addresses the market need for environmentally-friendly office supplies. It has been formed as an Illinois Corporation with Stan Cooksey as the main shareholder. Green Office will serve a wide range of customers, including corporations and government agencies.

Products
Green Office will sell eco-friendly products that use recycled materials, “recharged” parts, or non-toxic alternatives. This includes recycled paper (notepads, envelopes, copier paper), laser toner, inkjet cartridges, and common office supplies like correction fluid.

Customers
Green Office has identified three market segments: corporations, government agencies, and assorted customers. Corporations have an 8% growth rate and 12,000 potential customers. Government agencies have an 11% growth rate and 7,886 possible customers. Assorted customers have a 7% growth rate and 56,888 potential customers.

Competitive Edge
Green Office will offer a complete range of office supplies, becoming a one-stop shopping destination. It will also provide exceptional customer attention to foster long-term relationships.

Management
Green Office will be led by Stan Cooksey, who holds an undergraduate degree from the University of Chicago and has experience as the Regional Sales Manager for the Government Agency Unit at Symantec Software. Stan also earned an Executive MBA while working at Symantec.

Green Office is supported by a proven business model, carefully identified market segments, and a top-notch management team. Sales are projected to reach $818,000 in year two and $1,004,000 in year three, with profitability expected in the second year.

Office Supplies Retail Business Plan Example

1.1 Objectives:

– Become the premier source of eco-friendly office supplies.

– Offer green office supplies at the same or lower prices compared to non-eco-friendly supplies.

– Achieve significant growth and profitability within the first two years.

1.2 Mission:

Green Office aims to be the leading vendor of eco-friendly office supplies, providing a wide selection at competitive prices and exceptional customer service.

1.3 Keys to Success:

– Provide competitively priced eco-friendly office supplies.

– Secure major contracts with corporations and government agencies.

– Maintain fiscal efficiency through strict financial controls.

Company Summary:

Green Office is an Illinois corporation founded by Stan Cooksey.

2.1 Start-up Summary:

Green Office’s start-up expenses include:

– Office desk sets, chairs, and supplies (6).

– Workstations, a central file server, two laser printers, and an Internet connection (6).

– Copier and fax machine.

– Assorted office furniture.

– Assorted shipping material.

– Unit phone system with an answering service (7).

– Shelving units for storage.

– Used forklift.

– Intercom system.

– Warehouse build-out.

Start-up funds will mainly come from equity investment, with Stan obtaining a $50,000 SBA-backed loan to help purchase start-up inventory.

Office Supplies Retail Business Plan Example

Start-up

Requirements

Start-up Expenses

Legal: $3,000

Stationery: $500

Brochures: $500

Insurance: $300

Web Site Development: $5,000

Research and Development: $2,000

Other: $30,000

Total Start-up Expenses: $41,300

Start-up Assets

Cash Required: $128,700

Start-up Inventory: $46,000

Other Current Assets: $3,500

Long-term Assets: $43,500

Total Assets: $221,700

Total Requirements: $263,000

Start-up Funding

Start-up Expenses to Fund: $41,300

Start-up Assets to Fund: $221,700

Total Funding Required: $263,000

Assets

Non-cash Assets from Start-up: $93,000

Cash Requirements from Start-up: $128,700

Additional Cash Raised: $0

Cash Balance on Starting Date: $128,700

Total Assets: $221,700

Liabilities and Capital

Liabilities

Current Borrowing: $0

Long-term Liabilities: $50,000

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $50,000

Capital

Planned Investment

Investor 1: $95,000

Investor 2: $68,000

Other: $50,000

Additional Investment Requirement: $0

Total Planned Investment: $213,000

Loss at Start-up (Start-up Expenses): ($41,300)

Total Capital: $171,700

Total Capital and Liabilities: $221,700

Total Funding: $263,000

2.2 Company Ownership

Green Office is a privately held corporation owned by Stan Cooksey. Green Office has been incorporated in Illinois.

Products

Green Office offers environmentally friendly office supplies, including:

– Recycled clip boards

– Non-toxic correction fluid

– Recycled note pads (small and legal size)

– Recycled paper clips

– Recycled copier and printer paper

– Recycled envelopes

– Erasable boards

– Reusable coffee filters

– Recycled, refillable laser toner cartridges and inkjet cartridges

– Solar calculators

– Refillable pens and pencils made out of recyclable materials

– And many other items

Market Analysis Summary

Green Office believes it faces significant demand and many opportunities in the office supply industry. Its main customer segments are corporations, government agencies, and others.

Corporations: This customer group consists of companies with at least 35 employees. They purchase supplies for the entire organization, sometimes individually by different groups within the organization. These customers are interested in environmentally-friendly supplies due to personal/corporate belief reasons or as part of a PR program that showcases their commitment to the environment.

Government Agencies: This segment is expanding due to legislation such as Former President Clinton’s Executive Order 13101, which requires federal government agencies to buy environmentally-friendly products. Similar legislation exists in the majority of states for their governmental agencies, creating a large market for Green Office.

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Other: This segment includes small companies, individuals, school districts, and more.

Office Supplies Retail Business Plan Example

Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Corporations 8% 12,009 12,970 14,008 15,129 16,339 8.00%
Government Agencies 3% 7,886 8,123 8,367 8,618 8,877 3.00%
Other 7% 56,888 60,870 65,131 69,690 74,568 7.00%
Total 6.77% 76,783 81,963 87,506 93,437 99,784 6.77%

4.2 Target Market Segment Strategy

As mentioned previously in the Market Segmentation section, three customer groups have been identified. Two of these, corporations and government agencies, are attractive customer segments. The third is used as a “catch all” category. The strategy will be a targeted sales campaign using specific sales agents, each responsible for a customer group.

The hiring process for these sales agents will be done with the specific group in mind. The agent responsible for government agencies will be chosen based on experience and proficiency in selling to government agencies if possible. Green Office will provide each experienced salesperson with an exclusive territory to achieve high sales marks for the respective customer group.

4.3 Industry Analysis

Green Office competes in the office supplies industry. Within that industry, several market leaders are Staples, OfficeMax, and Office Depot. These companies offer local retail stores and mail order/Internet sales. They have a combined 59% market share. The remaining players in the market include mail order/Internet competitors and local retailers. Within this market is a newly developed niche of environmentally-friendly suppliers, primarily mail order/Internet based.

4.3.1 Competition and Buying Patterns

Competition comes from two sources: direct and indirect competitors. Direct competitors offer similar lines of environmentally-friendly products, such as Ecomall, EcoProducts, and The Good Humans. Indirect competitors are companies within the office supplies industry that offer eco supplies but do not primarily focus on these products. Customers’ buying patterns are based on the price comparison to standard office supplies and eco-friendly ones, as well as convenience in ordering, shipping schedule, and variety of products.

Strategy and Implementation Summary

Green Office aims to become a major vendor of environmentally-friendly office supplies. They will leverage their competitive edge of a wide selection of green office supplies and a strong customer service-oriented organization. The marketing strategy seeks to develop awareness of Green Office and its ability to offer a wide selection of eco-friendly office products. The sales strategy focuses on converting qualified sales leads into paying customers through excellent customer service and creating long-term relationships.

5.1 Competitive Edge

Green Office’s competitive edge is twofold. They offer a wide selection of office supplies, making it a convenient one-stop shopping place. They also prioritize customer service and aim to provide the finest service to build a loyal customer base.

5.2 Marketing Strategy

The marketing strategy will communicate Green Office’s competitive edges of selection and customer service. They will undertake a marketing campaign primarily through print advertising to develop awareness among targeted customers.

5.3 Sales Strategy

Green Office’s sales strategy focuses on converting qualified sales leads into paying customers by providing exceptional customer service. Each customer will be assigned a specific account manager/sales agent based on their customer type. Account managers will be incentivized to develop long-term customer relationships.

5.3.1 Sales Forecast

Green Office has adopted a conservative sales forecast to ensure financial stability as a start-up organization. The forecast predicts sales to increase at a steady rate over time.

Office Supplies Retail Business Plan Example

Office Supplies Retail Business Plan Example

Sales Forecast
Year 1 Year 2 Year 3
Sales
Corporations $92,892 $298,887 $366,544
Government Agencies $107,470 $358,664 $439,853
Other $59,362 $161,399 $197,934
Total Sales $259,724 $818,950 $1,004,331
Direct Cost of Sales Year 1 Year 2 Year 3
Corporations $47,380 $194,277 $238,254
Government Agencies $56,856 $233,132 $285,904
Other $25,585 $104,909 $128,657
Subtotal Direct Cost of Sales $129,821 $532,318 $652,815

5.4 Milestones

Green Office has identified four specific milestones as goals to achieve. While the milestones are qualitative and have a deadline, they are achievable.

  • Business plan completion.
  • First major government agency account.
  • $200K in sales.
  • Profitability.
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2004 2/15/2004 $0 Stan Business Development
First major government agency account 1/1/2004 4/1/2004 $0 Sales Manager Sales
$200K in sales 1/1/2004 2/15/2005 $0 Sales Manager Sales
Profitability 1/1/2004 6/1/2005 $0 Stan Entire company
Totals $0

Web Plan Summary

The website will offer customers a product catalog for online orders. The design philosophy of the site is ease of use. Green Office aims to make placing an order easy and fast, encouraging increased sales. Special features include a section for each customer to easily purchase repeat items, speeding up the ordering process. This ease-of-use feature will help increase sales as customers become familiar with the site and appreciate its simplicity.

6.1 Website Marketing Strategy

The marketing strategy for the website will include search engine submissions and the use of pay-per-clicks, where the company pays the search engine for each click to the Green Office site.

6.2 Development Requirements

Green Office has secured a start-up website design company for the development and maintenance of the site at a favorable rate.

Management Summary

Green Office is led by Stan Cooksey, who has an undergraduate degree in business from the University of Chicago. Stan has extensive experience in sales and management. He started Green Office after achieving a vice president position at Symantec.

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7.1 Personnel Plan

  • Stan: Operations, business development, finance, and accounting.
  • Willma (Stan’s wife): Procurement and marketing.
  • Sales: Account manager functions.
  • Accounting: Part-time accounting clerk.
  • Shipping: Responsible for order filling.
  • Administrative/customer support.
Personnel Plan
Year 1 Year 2 Year 3
Stan $20,000 $22,000 $24,200
Willma $20,000 $22,000 $24,200
Sales $15,000 $16,500 $18,150
Sales $12,000 $13,200 $14,520
Sales $9,000 $9,900 $10,890
Accounting $6,400 $7,040 $7,744
Shipping $15,000 $16,500 $18,150
Shipping $12,000 $13,200 $14,520
Shipping $7,000 $7,700 $8,470
Admin/customer support $10,000 $11,000 $12,100
Admin/customer support $4,800 $5,280 $5,808
Total People 11 11 11
Total Payroll $131,200 $144,320 $158,752

Financial Plan

The following sections outline important financial information.

8.1 Important Assumptions

The following table details important Financial Assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 8.00% 8.00% 8.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The following table and chart show our break-even analysis.

Office Supplies Retail Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: $31,303

Assumptions:

– Average Percent Variable Cost: 50%

– Estimated Monthly Fixed Cost: $15,657

8.3 Projected Profit and Loss

The table below shows the Projected Profit and Loss.

Office Supplies Retail Business Plan Example

Office Supplies Retail Business Plan Example

Office Supplies Retail Business Plan Example

Office Supplies Retail Business Plan Example

Projected Cash Flow:

The chart and table below show the Projected Cash Flow.

Chart:

Year 1 Year 2 Year 3

$0 $0 $0

Table:

Sales $1,004,331

Direct Cost of Sales $652,815

Other Costs of Goods $0

Total Cost of Sales $652,815

Gross Margin $351,516

Gross Margin % 35.00%

Expenses:

Payroll $158,752

Sales and Marketing and Other Expenses $2,400

Depreciation $8,700

Rent $12,000

Utilities $6,000

Insurance $2,400

Payroll Taxes $28,080

Website Maintenance $7,500

Total Operating Expenses $225,832

Profit Before Interest and Taxes $125,684

EBITDA $134,384

Interest Expense $3,500

Taxes Incurred $36,655

Net Profit $85,528

Net Profit/Sales 8.52%

Office Supplies Retail Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations $64,931 $204,738 $251,083
Cash from Receivables $151,445 $520,877 $722,308
Subtotal Cash from Operations $216,376 $725,615 $973,390
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $3,000 $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 $36,000 $0
Subtotal Cash Received $216,376 $764,615 $973,390

Projected Balance Sheet

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $79,527 $95,062 $155,369
Other Current Assets $3,500 $3,500 $3,500
Total Current Assets $141,788 $269,506 $368,509
Long-term Assets
Long-term Assets $43,500 $43,500 $43,500
Accumulated Depreciation $8,700 $17,400 $26,100
Total Long-term Assets $34,800 $26,100 $17,400
Total Assets $176,588 $295,606 $385,909
Liabilities and Capital
Total Liabilities $66,719 $98,356 $103,131
Paid-in Capital $213,000 $249,000 $249,000
Retained Earnings ($41,300) ($103,131) ($51,750)
Earnings ($61,831) $51,381 $85,528
Total Capital $109,869 $197,250 $282,779
Total Liabilities and Capital $176,588 $295,606 $385,909
Net Worth $109,869 $197,250 $282,779

Business Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 215.32% 22.64% 1.50%
Percent of Total Assets
Accounts Receivable 24.55% 46.24% 43.44% 38.65%
Inventory 8.73% 11.59% 10.89% 28.15%
Other Current Assets 1.98% 1.18% 0.91% 18.82%
Total Current Assets 80.29% 91.17% 95.49% 85.62%
Long-term Assets 19.71% 8.83% 4.51% 14.38%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 11.39% 18.63% 16.37% 43.40%
Long-term Liabilities 26.39% 14.65% 10.36% 11.10%
Total Liabilities 37.78% 33.27% 26.72% 54.50%
Net Worth 62.22% 66.73% 73.28% 45.50%
Percent of Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.02% 35.00% 35.00% 22.64%
Selling, General & Administrative Expenses 96.00% 31.88% 28.47% 13.42%
Advertising Expenses 0.00% 0.00% 0.00% 0.26%
Profit Before Interest and Taxes -22.32% 9.42% 12.51% 1.70%
Main Ratios
Current 7.05 4.89 5.83 1.77
Quick 6.28 4.27 5.17 1.07
Total Debt to Total Assets 37.78% 33.27% 26.72% 5.52%
Pre-tax Return on Net Worth -56.28% 37.21% 43.21% 59.64%
Pre-tax Return on Assets -35.01% 24.83% 31.66% 13.69%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -23.81% 6.27% 8.52% n.a
Return on Equity -56.28% 26.05% 30.25% n.a
Activity Ratios
Accounts Receivable Turnover 4.49 4.49 4.49 n.a
Collection Days 56 53 74 n.a
Inventory Turnover 5.91 21.43 17.12 n.a
Accounts Payable Turnover 7.51 12.17 12.17 n.a
Payment Days 27 21 28 n.a
Total Asset Turnover 1.47 2.77 2.60 n.a
Debt Ratios
Debt to Net Worth 0.61 0.50 0.36 n.a
Current Liab. to Liab. 0.30 0.56 0.61 n.a
Liquidity Ratios
Net Working Capital $121,666 $214,446 $305,351 n.a
Interest Coverage -15.04 20.67 35.91 n.a
Additional Ratios
Assets to Sales 0.68 0.36 0.38 n.a
Current Debt/Total Assets 11% 19% 16% n.a
Acid Test 4.13 1.79 2.52 n.a
Sales/Net Worth 2.36 4.15 3.55 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Corporations $0 $0 $7,645 $8,212 $8,455 $8,747 $9,212 $9,454

Personnel Plan:

Stan 0% $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Willma 0% $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Sales 0% $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Sales 0% $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Sales 0% $0 $0 $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Accounting 0% $0 $0 $0 $0 $800 $800 $800 $800 $800 $800 $800 $800 $800

Shipping 0% $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Shipping 0% $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Shipping 0% $0 $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Admin/customer support 0% $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Admin/customer support 0% $0 $0 $0 $0 $0 $0 $800 $800 $800 $800 $800 $800 $800

Total People 0 0 5 5 8 9 11 11 11 11 11 11 11

Total Payroll $0 $0 $8,000 $8,000 $11,800 $12,800 $15,100 $15,100 $15,100 $15,100 $15,100 $15,100 $15,100

General Assumptions:

Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%

Long-term Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss:

Sales $0 $0 $21,467 $23,021 $23,687 $24,487 $25,761 $26,424 $27,884 $28,227 $29,054 $29,712

Direct Cost of Sales $0 $0 $10,054 $11,064 $11,496 $12,016 $12,845 $13,276 $14,225 $14,447 $14,985 $15,413

Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $10,054 $11,064 $11,496 $12,016 $12,845 $13,276 $14,225 $14,447 $14,985 $15,413

Gross Margin $0 $0 $11,414 $11,957 $12,190 $12,470 $12,916 $13,148 $13,660 $13,779 $14,069 $14,299

Gross Margin % 0.00% 0.00% 53.17% 51.94% 51.46% 50.93% 50.14% 49.76% 48.99% 48.82% 48.42% 48.13%

Expenses

Payroll $0 $0 $8,000 $8,000 $11,800 $12,800 $15,100 $15,100 $15,

Pro Forma Cash Flow

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Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $0 $0 $5,367 $5,755 $5,922 $6,122 $6,440 $6,606 $6,971 $7,057 $7,264 $7,428
Cash from Receivables $0 $0 $0 $537 $16,139 $17,282 $17,785 $18,397 $19,337 $19,854 $20,922 $21,191
Subtotal Cash from Operations $0 $0 $5,367 $6,292 $22,061 $23,404 $24,225 $25,003 $26,308 $26,911 $28,185 $28,619
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $5,367 $6,292 $22,061 $23,404 $24,225 $25,003 $26,308 $26,911 $28,185 $28,619
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $0 $0 $8,000 $8,000 $11,800 $12,800 $15,100 $15,100 $15,100 $15,100 $15,100 $15,100
Bill Payments $74 $2,248 $2,770 $3,928 $3,945 $4,854 $15,401 $18,659 $18,739 $20,139 $19,678 $20,511
Subtotal Spent on Operations $74 $2,248 $10,770 $11,928 $15,745 $17,654 $30,501 $33,759 $33,839 $35,239 $34,778 $35,611
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $273 $275 $277 $279 $281 $283 $284 $286 $288 $290 $292 $294
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal

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