Burly Skate Shop is a new apparel, shoe, and skateboarding shop catering to the youth and young adults in the Salem/Suburb community. Our store aims to provide upper-scale apparel, shoes, boards, and accessories in an industrial-chic environment. We strive to position ourselves as the top retail store serving this market.
As the first and only skateboard shop in Suburb, our market research has shown that local skaters are frustrated with current retailers in nearby cities. Our goal is to obtain 80% market share and become a central hub for shopping, not only for the local skateboarding population but also for those interested in the latest trends and fashions. Burly will be located at 1234 Skate Rd N, Suburb, Oregon, strategically situated in the residential and social areas frequented by our target market, crucial to our initial success and long-term growth.
Burly will be owned and managed by Ollie and Nollie Casperflip. Nollie Casperflip, the merchandising manager, has been the Founder and Executive Director of Operations for a foster-care and family advocacy group for the past 18 years. Nollie holds two Masters Degrees and taught at a local college for 9 years. Ollie Casperflip, personnel and marketing manager, has been the Executive Director of Administration for the same foundation for 11 years and holds a Masters Degree in Administration. Both owners have extensive experience working with people aged 12-25. In addition, they have firsthand experience raising their own son, who was a former skateboarder, and have daily interactions with children and parents in that age range through their work in the foster-care agency.
Based on solid market research, our conservative sales forecasts predict a net profit of over $6,000 in the first year, increasing to almost $20,000 in year three. To support this plan, the owners will contribute $5,600 in cash and $1,200 in short-term assets. We are seeking an additional $50,000 in short-term loans, to be repaid over three years, to cover our start-up requirements.
Burly’s mission is to provide high-quality merchandise in an industrial-chic atmosphere for skateboard enthusiasts to meet, socialize, and learn about the latest trends. Our goal is to enhance the skateboard culture by promoting drug-free and violence-free events.
The keys to Burly’s success are:
1. Selling products that offer the latest styles and enable customers to build a positive skateboarding image.
2. Providing custom services, such as in-store grip application and tool assistance, to generate repeat purchases and referrals.
3. Communicating with customers through print and online advertising to promote skateboarding events and attract sponsored skaters.
4. Establishing a visible and accessible storefront and website to position ourselves as the premier choice for skateboard products and services.
5. Ensuring that we follow Burly’s mission through effective management practices to develop and maintain a successful and growth-oriented business.
Burly aims to achieve three objectives in the next five years:
1. Open four stores in excellent retail locations.
2. Maintain a gross margin of 45% or higher.
3. Achieve a net after-tax profit above 15% of sales.
Burly is a partnership between Nollie and Ollie Casperflip and will be located at 1234 Skate Rd. N, Suburb, Oregon. The store is conveniently situated near the Suburb skate park and the Suburb Central Chariots bus stop, making it easily accessible. Burly will be the only skate shop in Suburb.
Operating hours will be:
– Monday to Thursday: 11 a.m. – 8 p.m.
– Friday to Saturday: 10 a.m. – 10 p.m.
– Sunday: 12 p.m. – 6 p.m.
All products sold at Burly will adhere to our commitment to providing high-quality items.
At the start-up, Burly will hold three months’ worth of inventory for apparel and accessories, which are the primary revenue sources. The majority of the company’s assets will be in inventory. A $50,000 small business loan is needed to cover site preparation, inventory, and operational expenses. The owners will contribute $5,600 in cash and current assets such as racks, hangers, and shelves valued at approximately $1,200.
Successful operation and a loyal customer base will make Burly self-sufficient and profitable within a year.
Burly is a partnership between Nollie Casperflip and Ollie Casperflip. Nollie will handle merchandising and Ollie will handle administrative duties, with shared managerial responsibilities. Nollie has been the Founder and Executive Director of Operations for a foster-care and family advocacy group for 18 years, holding two Masters Degrees and serving as a Professor for 9 years. Ollie has been the Executive Director of Administration at the same foundation for 11 years, holding a Masters Degree in Administration and being an avid skateboarder since age 14.
Burly will carry internationally-recognized brands, offering skateboarding, snowboarding, and surfing products in a variety of sizes, colors, and styles to suit our target market. Shoes will comprise the largest portion of our merchandise, followed by apparel, boards, and hardware. We will utilize customer feedback, suggestions, and sales reports to make decisions regarding brand, style, and size selection.
Our primary target customers will be teens and young adults engaged in skateboarding, snowboarding, and surfing in the Suburb and greater Salem area. The store’s location in their residential community should effectively attract this demographic. Additionally, curiosity seekers from the community and seasonal purchasers are anticipated as customers.
There is an estimated target population of 2,500 junior high and high school-aged students in Suburb who participate in skateboarding, snowboarding, and surfing. We expect most of them to visit Burly as the only skate shop in the area and a new cultural experience. Our secondary target market consists of Salem youth who engage in these activities and are willing to travel outside of the Salem area. The store’s proximity to Salem, accessible by car or bus, will facilitate their patronage. Lastly, there are numerous adults who frequent skate parks throughout the Northwest. Burly’s location near the Suburb skate park will attract these enthusiasts. Other adults will visit the store to purchase fashionable school attire, shoes, boards, accessories, and gifts, and may find something for themselves while browsing. Our inviting atmosphere and excellent customer service will encourage repeat business from this demographic.
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Keizer Youth 15% 2,500 2,875 3,306 3,802 4,372 15.00%
Salem Youth 15% 1,500 1,725 1,984 2,282 2,624 15.01%
Adults 15% 500 575 661 760 874 14.98%
Total 15.00% 4,500 5,175 5,951 6,844 7,870 15.00%
4.2 Target Market Segment Strategy
Skateboarding, snowboarding, and surfing have become fast-growing industries in the Northwest. Boarding is no longer a fad but is here to stay. Movies, magazines, X-Games, Olympics, television, and video games all feature boarding sports. Burly is part of this industry.
Our marketing efforts will differ slightly for Suburb and Salem youth, and our sales strategies rely on further differentiation in our target markets. Our younger customers can be classified as trendsetters or trend followers:
Trendsetters keep up with online chats about boards, manufacturers, new wheel technology, and maneuvers. They are unafraid to pioneer the use of a new board style or clothing item if they feel it gives them an edge. They are willing to spend a great deal of money to be on the cutting edge, often ordering online or direct from the manufacturer. Our challenge with these customers is to direct them to our custom-ordering capabilities and let them feel they have “discovered” a new trend on their own.
Our older customers choose merchandise based on personal needs – preferred styles and manufacturers generally outweigh “trendiness.” We hope that our convenient location will draw them in, and our selection and flexibility, with custom-ordering, will generate repeat business.
The skateboarding industry is expanding rapidly. Skateboarding merchandise is priced at a premium but offers fashionable and durable products. In the last five years, skateboarding supplies from most manufacturers have become available online. With a click of the mouse, customers can see and compare prices on hundreds of items, from boards and accessories to clothing and protective gear. This shift has stabilized prices and increased the accessibility of new skateboarding products in rural areas.
However, online shopping happens alone, at home; it is not a social experience. Skateboarding is about seeing and being seen in the latest, coolest clothes, with a killer board, doing amazing tricks and sharing them with friends. Skateboarding is not a solitary sport, and solitary skateboard shopping goes against the grain for this sport.
The retail side of boarding is highly fragmented, although larger manufacturers homogenize the standard retailer’s inventory. Some smaller, home-grown operations both manufacture and sell boards, doing especially well in urban areas on the West Coast.
Burly combines the advantages of both models by offering a wide selection of boards, gear, and accessories from major manufacturers, with custom-ordering capabilities for more unusual items. We maintain an up-to-date catalog of all the most recent products from smaller manufacturers on the West Coast, for customers to browse in the store.
4.3.1 Competition and Buying Patterns
Skateboarders are looking for trendiness and high quality. These customers are young and easily influenced by peer pressure. They want to buy unique items that express their individuality and sophistication about the technical sides of skateboarding, but not so avant-garde that it is difficult to use or confusing.
Competitors
Burly is competing against local custom manufacturers and larger retail stores and chains. Two examples are:
Competitor #1 is a custom board carver in Suburb who works exclusively with Baltic Birch. They have a strong online presence, and their unique styles are popular with trendsetters.
Competitor #2 is a retail skate and snowboarding shop in Salem. They also have stores in Mt. Hood and Portland. Competitor #2 has experienced, knowledgeable staff and a great reputation among local skaters. We model much of our business on their success, while differentiating ourselves with custom-ordering capabilities and our suburban location.
Strategy and Implementation Summary
Burly’s goal is to provide specialty apparel, shoes, boards (skateboards, snowboards, etc.), hardware, and miscellaneous specialty items (hats, wallets, bandanas, etc.) to the underserved Suburb/Salem community. The major competitive retailers have left a hole in this market, and there are two to four competitors in the general area. Many potential customers indicate that they would welcome an alternative in their locality. This population of customers is growing.
Our intention is to gain 80% of this market share by focusing on our niche positioning, neighborhood location, popular brands, and special promotions.
5.1 Competitive Edge
Burly offers an enhanced shopping experience while being competitively priced and keeping up with the latest trends of the market. Our stellar customer service separates Burly from the rest.
Sponsorship of up-and-coming talented skateboarders throughout the community. These sponsored youth will distribute 10% off business cards while they skate at local skate parks throughout Oregon. They will also demonstrate Burly apparel and equipment.
Our marketing strategy will focus heavily on sales promotion, niche positioning in the market, and customer service with loyalty and retention in sales.
The marketing budget will range from 15% to 20% of our gross annual sales.
Our promotions will always stay in tune with our company objectives and mission statement.
Initial marketing will begin with flyers and leaflets in the skate park for two months before we open, to alert our potential customers to our new store. Our Grand Opening in May will include discount prices, and we will give away discount cards to the first 50 customers that day.
Future marketing programs include radio spots, ads in the local high school newspaper, and leafleting around other high schools and skate parks in the Salem suburbs.
5.3 Sales Strategy
We will utilize the Retail POS software with every sales transaction. With each purchase, the software will record and maintain in its database the customer’s name, address, and purchases. This information will be used with our direct mailing program to focus on the top 50% of our customers.
We will offer a 14-day return/exchange policy to build trust with our customers and maintain retention and loyalty.
5.3.1 Sales Forecast
The following table and chart give a highlight of forecasted sales. We expect sales to start off slowly but increase extensively during the summer skateboard season. We also expect increased sales during the Christmas holiday shopping season and the winter snowboarding season. Burly has planned for a growth rate of 15% annually. As we build name recognition and status in the community, we expect to gain a larger percentage of the market share, increase our customer base, and consequently see an increase in revenue.
Based on research into other skateboard and snowboard retailers, we expect COGS at 45% of retail prices for all categories.
Sales Forecast:
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | |||
| Apparel | $84,000 | $96,600 | $111,090 |
| Shoes | $62,260 | $71,599 | $82,339 |
| Boards/Hardware/Misc. | $36,190 | $39,809 | $42,660 |
| Other | $0 | $0 | $0 |
| Total Sales | $182,450 | $208,008 | $236,089 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
| Apparel/Shoes | $65,817 | $75,690 | $87,043 |
| Boards/Hardware/Misc. | $16,286 | $17,914 | $19,197 |
| Subtotal Direct Cost of Sales | $82,103 | $93,604 | $106,240 |
5.4 Milestones
The milestone chart highlights our plan with specific dates. This schedule reflects our commitment to organization and detail.
Milestones:
Milestone Start Date End Date Budget Manager Department
Grand Opening 5/1/2004 6/1/2004 $400 Ollie All Depts.
Sponsorship 5/1/2004 7/1/2004 $800 Ollie Marketing
Summer Sale 7/15/2004 8/15/2004 $250 Ollie Skateboards
Website Completion 5/1/2004 9/1/2004 $293 Sticks Web
Online Shopping 5/1/2004 10/15/2004 $250 Sticks Web
Christmas Sale 12/1/2004 12/25/2004 $500 Ollie All Depts.
Winter Sale 1/15/2005 2/15/2005 $500 Ollie Snowboards
Special Promo 3/15/2005 4/15/2005 $250 Ollie All Depts.
Totals $3,243
Web Plan Summary:
Burly plans to develop a Web presence in the first year. We will add e-commerce to the business model at the end of the first year. Burly’s website will serve as advertisement for the company and its online "home," showcasing products for purchase. Additional content will focus on gifts and gift giving, as well as providing a resource area with articles, research, product information, and website links of interest.
Burly’s website will mirror the image and brands of products showcased in the store and combine a well-designed front-end with a back-end capable of capturing customer data for future marketing.
6.1 Website Marketing Strategy:
Market strategy in an Internet retail business depends on recognition of expertise by the consumer. For Burly, it will start with our existing customer base, informing them of our Internet presence and encouraging word-of-mouth recommendations. Further awareness will be heightened by utilizing search engine marketing, banner advertising, and affiliates.
6.2 Development Requirements:
Costs that Burly expects to incur with development of its website include:
-Site Design & Implementation – Free. Burly will utilize the programming services of Sticks Casperflip, our son.
Ongoing Costs:
-Website name registration – $70 for 2 years.
-Site Hosting – $22.95 per month.
-Search Engine Registration – $200 per year.
-Site Design Changes – Free (provided by Sticks Casperflip).
Management Summary:
Employees will be encouraged to work within their creative, physical, and intellectual boundaries. Duties will be divided and delegated according to strengths and weaknesses. Customer service skills and personality are essential to our success. Nollie will handle inventory ordering and management, and accounting, while Ollie will manage marketing and sales and directly manage employees.
Nollie and Ollie Casperflip will assess employee productivity and perform informal evaluations every six months.
7.1 Personnel Plan:
The personnel plan includes the Casperflips, one full-time employee, and one part-time employee. The full-time employee will be paid $10.00 per hour and the part-time employee will be paid $8.00 per hour. All employees will receive one day paid holiday on their respective birthdays and one week of paid vacation after twelve months of employment. A 5% annual pay increase based on performance is anticipated.
At this time, medical benefits will not be offered. As profits increase, medical benefits will be offered, probably by year three.
The Casperflips plan to draw only a minimal salary in the first few years.
Personnel Plan:
The Casperflips (Owners) Year 1 Year 2 Year 3
$15,000 $20,000 $20,000
Full-Time $20,760 $21,798 $22,888
Part-Time $8,124 $8,531 $8,958
Other $0 $0 $0
Total People 0 0 0
Total Payroll $43,884 $50,329 $51,846
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