Free Check Cashing Store Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
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Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $100,000 for the development of a check cashing and payday lender business while showcasing the expected financials and operations over the next three years. Check Cashing – Payday Lender, Inc. (“the Company”) is a New York based corporation that will provide cashing of checks while concurrently providing short term small denomination loans to customers in its targeted market. The Company was founded by John Doe.
1.1 Products and Services
The first revenue center for the business will be check cashing services of payroll or government issued checks to people within the target market. In exchange for this service, the Company will receive a 1.5% fee equal to the face value of the check. Management expects that 40% of the Company’s revenues will come from check cashing services. The second revenue center for the business will be short term payday loans (under $1,000) that will have a term of two weeks. The Company will receive substantial interest fees on these loans (in excess of 300% APR). It should be noted that Check Cashing – Payday Lender, Inc. will comply with all state and federal lending laws (including the Truth in Lending Act) regarding its payday loan operations. The third section of the business plan will further describe the services offered by Check Cashing – Payday Lender, Inc.
1.2 The Financing
Mr. Doe is seeking to raise $100,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following: • Development of the Company’s Check Cashing – Payday Lender location. • Financing for the first six months of operation. • Capital to finance short term payday loans. Mr. Doe will contribute $10,000 to the venture.
1.3 Mission Statement
The Check Cashing – Payday Lender’s mission is to become the recognized local leader in its targeted market for check cashing and small loan financial services
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the retail management industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Check Cashing – Payday Lender, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, Check Cashing – Payday Lender requires $100,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of Check Cashing – Payday Lender, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of Check Cashing – Payday Lender. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Products and Services
Below is a description of the check cashing and small loan services offered by the Company.
3.1 Check Cashing Services
The Company will cash checks for a fee of 1.5% of their face value. The business will only cash checks that are from payroll services, and thus the rate of check failure will be significantly reduced. The business will also require a valid driver’s license before a cash disbursement will be made to a customer. The business will keep this on file within its check cashing and lending computer suite.
3.2 Payday Loans
Payday loans are made for people that need fast access to capital. The Company will allow borrowers that have employment for six months at the same location and an active checking to obtain small two week credit loans. The Company will use the automated clearing house system to ensure that on the date that the loan is due; the business can immediately withdraw funds on the date that the customer is paid. This will ensure that the client does not default on their loan. Customers may opt to roll over their loan by only paying the interest portions of the loan and carrying the balance over for an additional two week period. A customer will only be able to do this three times before the principal becomes due immediately. The business also furnish each customer a truth in lending advisory notice informing them that the loan that they are about to use is a high interest rate loan. Currently, there are several pieces of legislation that are being considered on both the federal and state level that will sufficiently limit the interest rates charged to low income borrowers for emergency credit services. The payday, title, and signature loan industry generates interest rates of 300% to 600% (on an annual rate) from its customers. These businesses are able to charge these rates of interest as many states do not have upper limits on the interest rates charged on small loans.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the check cashing and payday loan industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2010, at which point the economy will begin a prolonged recovery period.
4.2 Industry Analysis
There are approximately 9,000 check cashing businesses that operate among an average of 6 locations per business. Each year, these businesses generate $7 billion dollars of gross income from fees generated from check cashing. The growth trend of this business has been marked over the last ten years are more unbanked people have entered the country.
4.3 Customer Profile
In this section of the analysis, you should describe the type of customer you are seeking to acquire. These traits include income size, type of business/occupation; how far away from your business is to your customer, and what the customer is looking for. In this section, you can also put demographic information about your target market including population size, income demographics, level of education, etc.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
Check Cashing – Payday Lender intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.
5.2 Marketing Strategies
Mr. Doe intends on using a number of marketing strategies that will allow the business to easily target men and women within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public. Check Cashing – Payday Lender, Inc. will also use an internet based strategy. This is very important as many people seeking local services, such as check cashers/payday lenders, now the Internet to conduct their preliminary searches. Mr. Doe will register the Company with online portals so that potential customers can easily reach the business. The Company will also develop its own online website showcasing the services offered by Check Cashing – Payday Lender, Inc., its location, and contact information. Check Cashing – Payday Lender, Inc. will maintain a sizable amount of print and traditional advertising methods within local markets to promote the check cashing and payday loan services that the Company is offering.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• Check Cashing – Payday Lender, Inc. will have an annual revenue growth rate of 10% per year.
• The Owner will acquire $100,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
The businesses’ revenues are not sensitive to the overall change in the general economic market. Payday loans are primarily used as emergency lending vehicles, and as such, the people obtaining these loans are in a serious financial situation. As such, as the economy recesses the business may actually notice a marked increase in the business generated by the Company. However, severe turns in economic stability may increase the defaults experienced by the business. Management would compensate this higher risk by increasing the fees associated with each loan. Check cashing services tend to operate with a great deal of economic stability as people who do not use normal depository institutions for banking will continue to use the Company’s check cashing services.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis