Go Running Store Piers Rasmussen
Executive Summary...... 1 Self Analysis ...... 1 Geographic Analysis...... 2 Competitive Data ...... 3 Market Segment Analysis...... 3 Location ...... 4 Floor Plan...... 7 Type of Ownership ...... 7 Organization and Management...... 7 Proposed Products...... 8 Suppliers ...... 9 Equipment...... 10 Pricing Policy...... 10 Advertizing Policy ...... 10 Start Up Costs ...... 11 Sales Forecast...... 12 Income Statement...... 12 Building Costs...... 13 Financing...... 14 Conclusion ...... 15 Sources...... 15 Selection Letter ...... 16 Print ad...... 17 Business Card...... 18
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Executive Summary Go offers a wide variety of running products. From Adidas© shoes to Nike© shorts to Clif© power bars you can be assured we have it.
Our clients are anyone who would like to get into running through people who have ran everyday for 40 years. Go offers equipment suited to every runner as well as the newest products and models.
Running as a weight loss solution has been skyrocketing in recent years. There are few areas as well suited to running as the Rogue Valley. Go can serve both those who wish to start running and those who have been running. Both of which can take advantage of the Rogue Valley’s many running friendly features.
While there is a business in the Rogue Valley area that caters to runners, driving to their location can be quite a pain for a large portion of the Rogue Valley’s population.
Go plans to emphasize their dedication to running and having staff that know what they’re doing. For someone who has never been in the store it will be a great change from walking into a sporting goods store and only finding employees who know nothing about shoes and clothing but everything about skateboards.
All employees will be accomplished runners who care about the sport. On start up we will have three trained employees to assist in shoe fitting, finding shoes, sales, and customer assistance. The owner plans to be aiding with these duties part time.
The management of Go consists of owner Piers Rasmussen. Piers has leadership experience from being varsity on cross country as well as business experience by taking CSB through school. Piers will take a hands-on management role in the company.
Using data from other retail businesses and the size of the market, Go’s sales projections for the first year are $198,100. The salary of the owner has yet to be determined
I am looking for a loan of $25,300 to finance first year operation. I have invested $7,000 to cover working capital requirements.
There are many runners in the Rogue Valley and we plan to advertise more than our competitors in the first year. The quality of service and the convenient location are sure to appeal to runners living in the Rogue Valley.
Self Analysis It is important to be dedicated and equipped with skills to run your business because if you aren’t, you are losing quite a bit of money. The qualities and characteristics that show I will succeed are loyalty, doggedness, and a generous serving of ego.
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I haven’t had much in the way of training, but I have had experience. For example, I used to operate a business in which I made bars of soap and sold them at craft fairs. I have also performed internships through CSB and volunteered for a variety of organizations.
My greatest strength would be my wide range of abilities and interests. My greatest weakness is my favoritism toward some tasks. I enjoy many activities, and trying new ones. I am often the first to volunteer for an unknown task, and the one who understands what I’m doing first.
I am willing to take great risks and I do so often. Every year for the past six years I have bought at least one show pig to show for 4-H, any of which could become ill or die, or in some other way become unshowable. These risks have paid off for me in a multitude of ways.
I am sure that during the course of this experience I will become even better adapted to running my business. Learning by trial and error helps everyone eventually, and I plan on using that to my advantage. By paying attention to my business I can decide how to make it grow to my advantage. If something goes wrong it’s always fixable in time.
I believe that I have more than enough characteristics that allow me to be successful in this business venture. I have mentioned just a few here and have more to contribute to a competitive business.
Geographic Analysis The Rogue Valley has a multitude of characteristics that make it a great place to live and run, the great trails, the hills, and the weather. However, there is a serious lack of a running store in Medford. The area, however, is perfectly situated to distribute my products. Medford is located along I-5, which connects to two major shipping ports connecting to Pacific Rim manufacturing locations. When the Siskiyou Pass is closed due to snow it’s usually for no longer than 24 hours. If I-5 is closed, the airport is close by and cargo shipping is usually uninterrupted. The mild climate in the Rogue Valley allows me to sell products all year, whereas in other areas running is not always possible during the winter. The quantity of rain can make trails hazardous for a short time, but if a runner really wants to run on a trail he or she shouldn’t have a problem. The summers are warm but it becomes bearable if you go to higher elevation or run earlier or later in the day.. The mountains around the Rogue Valley provide an enormous amount of possible trails to take, and the Rogue River is a scenic and exciting place to run. The hills around Medford, Ashland, and Jacksonville can become a runners fortress of solitude. Even the busiest of people can go for a ten minute run during lunch.
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The Rogue Valley is a haven for runners, with a fantastic array of trails and a great climate for running, there are few places like it. If ever there was a place that should inspire you to run, this is it. The Rogue Valley is a suitable place for a running store.
Competitive Data Competitive Data Competition Product Price Location Promotions Rogue Valley Runners Nike Shoes $100 Downtown Giveaways at Asics Shorts $30 Ashland races. Water Bottles $20 Sports Authority Nike Shoes $100 Rogue None that I’ve Asics Shorts $25 Valley noticed. Being in Water Bottles $15 Mall the mall is good enough. Big 5 Nike Shoes $100 East TV. Asics Shorts $25 Stewart Water Bottles $15 Av. Medford
Market Segment Analysis Your target market is the lifeblood of your business. And if you don’t identify your target market you are bleeding yourself to death. I created this to show how my business has identified a target market to keep itself running.
The average runner is around 44 years old and is married so I predict that they will make up much of my business. I feel that these will be my best customers even though all runners need equipment, only these represent the majority of runners. It makes sense for me to market to this group. Go Demographics Psychographics: Experiencer Sex: Male Experiencers are motivated by self-expression. Young, enthusiastic, Age: 44 years and impulsive consumers, Experiencers quickly become enthusiastic Education: about new possibilities but are equally quick to cool. They seek College variety and excitement, savoring the new, the offbeat, and the risky. Graduated Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities. Marital Status: Married Family Size: 2.9
The table below is a representation of people in Medford and Jackson County who fit the description of who I am marketing to. I made this table using information on Jackson
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County QuickFacts. Using the data I can assume that 26 percent of people in Jackson County and Medford are my target market. Demographic Measurements People in Jackson County, Oregon 181,269 100% People in Medford, Oregon 63,154 100% Males 88,114 49% Aged 35-54 53,884 30% College graduated 26,992 15% Married 41,474 23% Have three or more people in family 21,663 12% Average In Jackson County 46,425 26% Average in Medford 16,420 26%
I believe that my target market psychographic is experiencer because they find an outlet for their energy in sports. It is also my psychographic and as a runner what better match could I find for other runners? I have noticed that most runners start when they are young which also matches the experiencer group.
I know who my target market is, how many are nearby, and I know a loose mental pattern that can be applied to runners. I know that this may not be perfect and if I discover I need a change I can easily choose a new target market. However, I have chosen a target market that should cause my business to be profitable.
Location 1340 Biddle Road, Medford The businesses nearby are compatible because they are all stores to spend your extra money at, something that is helpful to have if your looking for shoes. The landlord is Biddle Road Square LLC. Their Mailing address is P.O. Box 4129 Medford, OR 97502 The zoning is for regional commercial buildings The closest indirect competition is the mall The closest direct competition is in downtown Ashland Car traffic is needed for my business to survive. When people drive by me they are going to downtown Medford 15,000 people drive on Biddle Rd. 15,000 people use the Biddle Rd. Table Rock Rd. intersection
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Location of closest competitor
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Location of nearest direct competitor
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Floor Plan
Type of Ownership My business is Go Running Store and it is a sole proprietorship. I chose this because it is unlikely that I will be sued. I also want all of the profits to go to me.
Organization and Management Good management can lead a company skyward. However, a bumbling manager can obliterate a business. Everything a business does is dictated by a manger so it makes
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sense that a manager be suited to the task. Managers could be considered the most important part of a business.
To me, the best management style would be a combination of participatory and directing. I like the part of participatory that includes giving examples to the employees, but I also think that I should be able to just tell my employees what I need and when I need it. By combining those two plans I think I could accomplish more than with just one.
The major duties I will hold are going to be those of the retail assistants, but with more responsibilities for myself. I would sell products and help customers like any of the other employees, but also train new employees and make large decisions.
Proposed Products Running is a booming sport and not enough places in the Rogue Valley sell adequate gear for the multitude of people starting to run. At Go, people can expect all of the name brand gear such as Nike, Adidas, and Asics along with less heard of brands such as Karhu, Inov-8, and K-Swiss.
The products I will sell are all top quality running shoes, clothing, food, and other gear. Shoes are a staple good which everyone needs. I will offer many different brands of shoes and all of the top models of each brand along with several more generic models from the more known brands. Clothing is also a staple good which everyone needs. I will offer a few different brands of clothing, but always offer all different kinds of gear such as winter outers and summer dryfits. The food is an impulse buy and will be located in the back and on the counter. I will offer several different kinds of food from shot blocks to power bars to carbohydrate goos. Other gear will mostly be impulse buys. This includes
8 Go Running Store Piers Rasmussen hats, watches, Water bottles, and bumper stickers. My store will include a lot of product width because running gear is all about comfort.
I think my business will use a Just In Time inventory system because New varieties of shoes are coming out all the time and people always seem interested in new kinds of shoes. Potential suppliers are Nike, Adidas, and others. Go’s suppliers Nike Nike, Inc. 503-671-2500. Nike.com 5 stars One Bowerman Drive Beaverton, OR 97005 Offers Quality running equipment for running and a stylish mix of products
Go’s suppliers Adidas Adi-Dassler- 49-9132-84-0 Adidas.com 5 stars Strasse 1 91074 Herzogenaurach Offers High quality equipment that is extremely functional and comfortable
Go’s suppliers Office Depot Office 1-800-GO- Officedepot.com 4 stars Depot 6600 DEPOT North Military Trail Boca Raton, FL 33496 Offers Exactly what you need to supply a business
I believe that the width of products will be a boon to my business as it will help me outfit all of my customers with comfortable gear.
Suppliers Go’s suppliers Nike Nike, Inc. 503-671-2500. Nike.com 5 stars One Bowerman Drive Beaverton, OR 97005 Offers Quality running equipment for running and a stylish mix of products
Go’s suppliers Adidas Adi-Dassler- 49-9132-84-0 Adidas.com 5 stars
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Strasse 1 91074 Herzogenaurach Offers High quality equipment that is extremely functional and comfortable
Go’s suppliers Office Depot Office 1-800-GO- Officedepot.com 4 stars Depot 6600 DEPOT North Military Trail Boca Raton, FL 33496 Offers Exactly what you need to supply a business
Equipment Equipment Clothing Racks 6 Treadmill 1 Desk 1 Computer 1 Pegboard 4 Accessories Rack 2
Pricing Policy If a business doesn’t price their products properly they are loosing money and potentially running their business out of business.
I am going to use a cost oriented pricing strategy because I am selling a product. I am going to use a markup pricing technique because I am a retail store. I am going to skim prices when a new product is introduced
Advertizing Policy Advertising can make you mind for you which is why thinking about this is important ahead of time. The following section will illustrate the promotional mix of Go Running Store.
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Personal advertising: Getting orders Telling people about my business
Nonpersonal advertising: Advertising: online ads on the local newspapers site Publicity: sponsor a race Promotions: give away shoes to be given in a drawing at a race
Next time you watch TV or read the newspaper don’t just see it. Decipher it.
Start Up Costs start up costs
category cost Its on Biddle but not right on the road so I figured that it might not be as expensive deposits $5,000 A couple of stools a desk a computer and a few clothing racks furniture and equipment $10,500 I don't see myself needing heavy machinery for shoes machinery equipment $5,000 I won't be making deliveries but it might be nice to have advertising on my personal transportation car equipment $4,000 I have been in the area I plan on putting the business in and it is well kept building improvements $9,000 I hope there arent any problems professional fees $1,500 My business isn't on the main street so I may want to do some light advertising advertising $1,570 Its always nice to have some money on hand working capital $4,000 these clothes can get a little expensive so the cost is higher than my others inventory $24,945 lightbulbs, training, ect. miscellaneous $800
total $66,315
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Sales Forecast Sales Forecast
% of market % of target Estimated estimated Company share market 10% sales earnings Rogue Valley Runners 25% 4105 411 82,100.20 41050.1 Sports Authority 20% 3284 328 65,680.16 32840.08 Cascade Athletics 20% 3284 328 65,680.16 32840.08 Walmart 5% 821 82 16,420.04 8210.02 Big 5 10% 1642 164 32,840.08 16420.04 Go 20% 3284 328 65,680.16 32840.08
Estimated customer spending per month 200 Total target market 16420 394080.96
Income Statement
MONTHLY INCOME STATEMENT REVENUES
Sales receipts $65,680.16 Less - Cost of goods sold $17,461.73 --Total revenues $48,218.43
EXPENSES
Employee salaries $7,480.97 Commissions $0.00 Rent $348.10
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Utilities (from other SG and A expense - See Detail) $6,036.01 Materials $0.00 Office Expenses $500.00 Advertising $1,569.76 Professional services $1,500.00 Insurance $6,508.90 Home Office Expense $0.00 Depreciation $315.00 Taxes $1,353.01 Maintenance $3,660.00 Interest $1,234.79 Miscellaneous $800.00 Other expenses $400.00 --Total expenses $31,706.54
Net profit (loss) $16,511.89
Building Costs Building Costs Fill in your building data to determine how much your building will cost based on the cost/square foot. You should use spreadsheet formulas that refer to the data below and automatically calculate your costs so that you can change figures easily in case you need to make adjustments. After you find out how much the building will cost, estimate the monthly payments on a 30 year loan with 20% down and 5.75% interest using the chart below.
Sq. Feet Cost Facilities 2000 ft $175.00 Kitchen and Bath 64 ft $250.00
Total 17195 ft $366,000.00
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Cash for Down Payment $73,200.00 Term of Loan (Years) 30 Annual Interest Rate % - 5.75 5.75% Loan Amount $292,800.00 Monthly Payment $1,708.70
Figures for Building Costs
Cost per Square Foot Regular Retail $175.00 Regular Residential $145.00 Kitchen & Bath $250.00
Financing
The figures used are an example of what the sheet would look like. Working Capital Equipment Total cash needed $31,707 $15,500
20% down payment $6,341 $3,100 3% loan fees $761 $372 Total out of pocket cash needed $7,102 $3,472 ? Loan amount $25,365 $12,400
Prime rate 3.25% 3.25% Additional interest 0.75% 0.75% Total interest rate 4.00% 4.00%
Length of loan in years 6 $6
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Monthly payment $352.29 $172
Interest on 12th payment $945.13 $46
Conclusion My business would like to get proper shoes and gear on as many runners and walkers in the Rogue Valley as possible. Go will achieve this goal with great customer service and competitive pricing. If you enjoy running or would like to get into running then any one of the enthusiastic employees will be willing and able to help with selection and fitting. If you have any questions just ask the employees because they will all be accomplished runners.
For a start up cost as little as $66,000 I can start a business which is predicted to make over $20,000 a year. I also believe that by emphasizing the convenience of the location compared to my competitors I can pull more customers from them. Most of my indirect competitors don’t sell such specialty items, like short shorts and stability shoes, which I offer. We also offer stride analysis to determine which kind of shoe best suits you for free, something that none of my indirect competitors do at all.
Sources Sources
"sportsauthority.com - Quantcast Audience Profile." Quantcast. Quantcast Corporation, 2011. Web. 8 Apr. 2011.
"2007 State of the Sport Part II: U.S. Runner Demographics." Cool Running. Global Moxie, 2011. Web. 8 Apr. 2011.
"U.S. Framework and VALS™ Types." Strategic Business Insights. Strategic Business Insights, 2009. Web. 8 Apr. 2011.
"Jackson County QuickFacts." U.S. Census Bureau. U.S. Census Bureau, 4 Nov. 2010. Web. 11 Apr. 2011.
"City of Medford Zoning Map." City of Medford. ProjectA.com, 2010. Web. 25 Apr. 2011.
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Jackson County Property Data Online. N.p., n.d. Web. 25 Apr. 2011.
Google Maps. N.p., n.d. Web. 25 Apr. 2011.
Selection Letter Go Piers Rasmussen 3770 Old Stage Road Central Point OR, 97502 541-664-4117
March 29, 2011
Mr. Frances Hedge SBA Loan Officer Bank of America 845 N. Highland Street Medford, OR 97501 Dear Mr. Hedge:
My business is a running store dedicated to the die hard and the beginner. We have staff that run and know what the products are and the best product for any given customer. We sell name brand clothing next to smaller, running dedicated brands. Our products are ranged from short distance for the casual or beginning runner, to long distance for the competitive and highly experienced, to spikes for competition.
This is a practical idea because the Rogue Valley only has one store devoted to running. For me and many other people it is a bother to drive all the way to Ashland just because we need shoes. I believe that Go is competitive with Rogue Valley Runners because of the great distance between us, and it is competitive with stores like Sports Authority because their products are for sports in general, not running specifically. As the staff is comprised of runners all our staff can assist a patron in his or her purchases.
I believe I have a great business outlined on this paper which will be very successful. I look forward to meeting with you to discuss my proposal. My contact number is 541- 664-4117 and my email is [email protected]
Sincerely,
Piers Rasmussen
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Print ad
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Business Card
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