How to Start a Thrift Store by In Demand Business Plans

Author:In Demand Business Plans
Language: eng
Format: epub
Tags: entrepreneurship, start up, thrift, new business, business plan, resale, used stuff
Publisher: In Demand Business Plans

CHAPTER 11:

FINANCIAL PLAN

Section 11 of your business plan should be the Financial Plan. The first page of the Financial Plan describes the funding that will be needed to start the business and explains how the money will be spent. The second page is a spreadsheet detailing each start up cost and a bar graph to display each items percentage to total expenses.

Modify the paragraphs below for your business.

Springfield Thrift Store will seek outside financing for this new venture. Startup costs are estimated to be approximately $100,000 and will be funded in part by the owner / operator (20%) and in part through a bank loan or private investor funding (80%).

The inventory needed will make up 43% of the total start up cost. It will be the most significant start up expense. This is to ensure that the showroom is complete with the correct types of product and the proper amount of each. The fixtures, at 12%, are the second most significant expense, other than working capital. These fixtures will allow all goods to be properly displayed and will provide the most positive shopping experience possible for customers. The marketing plan is the third largest expense, at 10%. As outlined in the previous section, multiple marketing avenues will be utilized to maximize public awareness and drive customers into the store.

It is projected that Springfield Thrift Store will reach the breakeven point at the end of the third month of operations. It will then remain in the black, month after month, indefinitely. With the sale of used goods, which were purchased or donated Springfield Thrift Store will be able to maintain an average profit margin of 75%, matching the industry standard.

Because Mr. Smith is included as a paid employee, the owners return on investment is, at least in part, included in the projected labor expenses. Therefore, all projected net profits can be reinvested in the business for expansion and to growth of the brand.

Springfield Thrift Store does not see a required increase in fixed cost due to an increased sales volume. Expenses like rent, utilities, telephone, and so on, will remain the same at start up, six months, and well beyond the first year in business. Expenses like labor and marketing may increase, but are controlled expenses. And any additional inventory expenses will be directly tied to additional sales.

The second page of Section 11: Financial Plan should be a spreadsheet outlining the specific start up costs and their percentage of the total start up cost. A pie chart is always ideal for displaying these expenses. The two pictures below show these for the Springfield Thrift Store.

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