Free Music Shop 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
purposes only. If you are interested in purchasing the completed editable MS Word
and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
It should be noted that there is no special software required to use these
templates. All business plans come in Microsoft Word and Microsoft Excel format.
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 $150,000 for the development of a music shop while showcasing the expected financials and operations over the next three years. The Music Shop, Inc. (“the Company”) is a New York based corporation that will provide music lessons and sales of musical instruments (and some musical albums) to customers in its targeted market. The Company was founded by John Doe.
1.1 Products and Services
The primary revenue center for the business will come from the sales of musical instruments to the general public. The Music Shop will carry a diverse inventory of guitars, violins, cellos, pianos, violas, drums, and other musical instruments. The Company will advertise both to the general public while concurrently developing relationships with local schools to supply instruments for orchestra and band classes. The secondary revenue center for the business will come from the sale of music lessons that will be rendered onsite by both trained customer service employees and independent contractors that will come to the Music Shop to render these services to customers. This is an extremely important revenue center for the business as the contribution margins generated from providing these services is extremely high. The third section of the business plan will further describe the services offered by the Music Shop.
1.2 The Financing
Mr. Doe is seeking to raise $150,000 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.
1.3 Mission Statement
The Music Shop’s mission is to become the recognized leader in its targeted market for sales of musical instruments and musical lesson 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 (and schools with instrument buying needs) within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Music Shop, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Music Shop requires $150,000 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 the Music Shop, 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 the Music Shop. 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 products and services offered by the Music Shop.
3.1 Sales of Musical Instruments
The primary source of revenue for the business will come from the sale of musical instruments. To a limited extent, the business will also sell books related to music and a limited selection of music CDs/DVDs that are geared towards learning how to play an instrument. Mr. Doe anticipates that for each dollar of revenue generated through the sale of musical instruments, the business will earn 60 cents of operating income.
3.2 Sales of Musical Lessons
The Company will also generate substantial streams of secondary revenue through the sale of musical lessons to local students and people wanting to learn how to play a certain instrument. The business will use both in-house staff (that are properly trained to provide lessons) as well as third party independent contractors that will come to the Music Shop to render these services on behalf of the Company. Management anticipates that the per hour fee for these services will range from $20 to $30 depending on the skill level of the student.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the music shop 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
Within the United States, there are approximately 9,000 businesses that provide sales of musical instruments as well as non-academic music lessons and instruction to children and adults. Each year, these businesses aggregately generate more than $2.2 billion dollars of revenue while providing jobs for more than 61,000 people. In each of the last five years, total payrolls have exceeded $750 million dollars. The yearly revenue growth of the industry has remained on par with that of the United States’ population growth. This trend is expected to continue in the foreseeable future.
4.3 Customer Profile
The Music Shop’s average client will be a middle to upper middle class man or woman living in the Company’s target market. 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
The Music Shop 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
• Establish relationships with local schools that will purchase musical instruments from the Company while concurrently referring their students for additional musical instruction.
• 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 Music Shop to easily target individuals and families with children 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. The Music Shop will also use an internet based strategy. This is very important as many people seeking local retailers, such as music shops and independent music teachers, now the Internet to conduct their preliminary searches. Mr. Doe will register the Music Shop with online portals so that potential customers can easily reach the business. The Company will also develop its own online website showcasing the Music Shop, its inventories, its ability to provide musical lessons, and relevant contact information. Finally, Mr. Doe intends to maintain strong connections with local music teachers and schools that will purchase bulk inventories of musical instruments. Once these relationships are solidified, the Company will be able to generate a substantial amount of business through these connections. Additionally, music teachers may also refer local students to the Company for additional lessons and tutelage.
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
• The Music Shop will have an annual revenue growth rate of 9% per year.
• The Owner will acquire $150,000 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 Company’s revenues are moderately sensitive to changes in the general economy. However, the demand among children and teens is strong. Management expects that many parents will classify their children’s music enrollment as a necessity and will continue to pay for monthly fees regardless of the general economic climate. Only a severe economic pullback could result in a substantial decrease in the Company’s revenues.
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