Mud Puddle Business Plan

Anne Coates The Mud Puddle, LLC P520A

BUSINESS PLAN

THE MUD PUDDLE, LLC


Table of Contents

1.0 EXECUTIVE SUMMARY....................................................................................3

2.0 COMPANY SUMMARY.....................................................................................52.1 MISSION STATEMENT.................................................................................52.2 CURRENT STATUS.......................................................................................62.3 GOALS AND OBJECTIVES.............................................................................62.4 LEGAL DESCRIPTION...................................................................................72.5 START- UP SUMMARY.................................................................................7

3.0 MARKET..........................................................................................................93.1 INDUSTRY OVERVIEW.................................................................................93.2 MARKET TRENDS.........................................................................................93.3 TARGET MARKET.......................................................................................103.4 CUSTOMER BUYING DECISIONS ...............................................................113.5 BUSINESS OPPORTUNITIES.......................................................................113.6 LONG-TERM MARKETING STRATEGY ........................................................123.7 MARKETING PLANNING............................................................................12

4.0 COMPETITIVE ADVANTAGE AND DIFFERENTIATION ...................................144.1 COMPETITION...........................................................................................144.2 COMPETITIVE ANALYSIS...........................................................................154.3 SWOT ANALYSIS........................................................................................16

5.0 MANAGEMENT SUMMARY...........................................................................175.1 MANAGEMENT DUTIES.............................................................................175.2 FINANCIAL MANAGERS RESPONSIBILITIES ...............................................185.3 OPERATIONAL MANAGERS RESPONSIBILITIES .........................................185.4 PERSONNEL PLAN.....................................................................................19


1.0 EXECUTIVE SUMMARY

OverviewThe Mud Puddle LLC (the Studio) is seeking $100,000 for the launch and operations of a ceramics studio and children’s artistic center in Stockton, California. The Studio will operate in a section of Stockton that has a sizable and stable base of potential customers. As a result, the Studio is ideally positioned to become a valuable resource in a community with a strong demand for the urban sophistication and quality natural ceramics that the Studio will bring to the area.

As the business grows, the management plans to reinvest profits to fund the expansion of the Studio as well as the potential placement of additional crafting stations such as beading stations. To conserve capital, the management will implement low-cost, highly targeted marketing campaigns in order to grow the business effectively and efficiently.

The Studio’s management has developed a phased approach to operations to ensure that actual customer preferences and operational demands are clearly identified before key investments are made. In addition, to conserve funds and stabilize operations, the Studio’s management plans to take full advantage of the training and expertise that is provided by the Studio’s vendors and suppliers. The Studio’s principal strategy for success entails the continuous improvement of the customer experience along with a skillfully designed and implemented marketing campaign. To that end, the management of the Studio has crafted a systematic approach to minimizing overhead and nonessential personnel until the expenditure of resources can be carefully coordinated with verifiable strategies for strong growth and increased profitability.

The Studio’s primary strategy for growth involves the careful application of marketing resources along with the systematic development of new business opportunities. Future revenues are expected to fuel continued growth within the Stockton, California area

The projected financial position of the Studio indicates that the combination of operational revenue streams and owner investments will enable the Studio to acquire necessary assets, complete its remodeling objectives, and sustain operations for the foreseeable future. Once operations commence, the Studio anticipates steady growth with a stable net income that can be reinvested for on-going business development opportunities, long-term growth, and increased profitability.

Based on reasonable sales projections and anticipated expenses, the management predicts that the Studio will consistently realize yearly profits, once the first phase of the business plan is completed.


The Business ModelThe owner has honed a successful and profitable business model through in-depth research and evaluation into the industry. The Studio will gain significant efficiencies as its referral base grows and its service volume expands to provide consistent incomes. Through effective cash management and cost controls, the Company will be able to continually deliver a more competitively priced but higher quality, comprehensive Studio services that develops new market opportunities among the targeted demographic in the region. Additionally, with a full service approach, the Company can build a specific niche market, fortify its competitive advantages, and develop a stronger reputation through customer loyalty and satisfaction.

Growth StrategyThe Company’s growth strategy involves several approaches. Initially, the focus is to establish a strong niche among the targeted market segment in the specific geographic area and develop the solid client base on which future business can be built. As market share and presence continue to become well established, the Studio will pursue new opportunities by expanding the service area with additional locations and by tapping into other referral markets.

The projected financial position of the Company indicates the requested funding amount will sufficiently launch and sustain operations until the business attains its profitability benchmarks in the second year when sales volume increases to more effectively utilize capacity.


2.0 COMPANY SUMMARY

The Mud Puddle (The Studio) is a contemporary ceramic studio to be located in Stockton, California. The Studio will offer unfinished ceramic pottery for customers to paint their own personal designs. The Studio will offer a relaxing, playful atmosphere where clients can choose from 300 unfinished pottery pieces. The pieces will then be left to be glazed and fired by a professional staff. This business will provide clients with a unique artistic and social experience as well as a beautiful piece of ceramic art which they can display at home or give as a gift. Large groups of friends, family, and co-workers will be encouraged to come together and socialize, while painting their pottery. In addition, the Studio will be marketed as an educational children’s art studio.

The Studio will be owned and operated by Anne and Erik Coates. Anne Coates received a B.S. in Accounting from the University of Regis in 2007. She is currently in the process of obtaining her M.B.A in Finance from University of Regis. Erik Coates has over 5 years in management supervising 3 employees. His background includes project, cost, inventory, and revenue management.

The Coates’ professional degrees and business experience uniquely qualifies them with an indispensable foundation of knowledge and expertise will be directly applied to the Studio’s success. Additionally, Ms. Coates has already dedicated substantial time and financial resources into the planning of this business. Specifically, she has spoken with city officials about requirements and how this business may fit into the City’s overall plans for the area; researched the competition; spoken to suppliers and wholesalers; and started the initial planning for the design and construction of the studio.

The Mud Puddle LLC has already achieved a number of key pre-operational objectives. The Studio’s business and operational models have been defined and preliminary marketing and promotional strategies have been identified and scheduled. The Studio’s fiscal details and financial projections have been documented. Business relationships and associated contracts are being negotiated with key vendors and suppliers.

2.1 MISSION STATEMENT

The Mud Puddle’s mission is to provide “The Colorful Side of Life” idea to families and groups. We channel the creative spirit in every person through ceramics. We not only provide you with the tools, but also assist you in creating that unique piece of art.


2.2 CURRENT STATUS

The Mud Puddle Studio is currently in the start-up phase of operations. The company now needs initial funding to secure the location and purchase start-up equipment and supplies as well as to fund the initial operating costs until profitable.

2.3 GOALS AND OBJECTIVES

The Mud Puddle will be a successful and profitable business in the community. The success of the Studio lies primarily in its ability to attract large groups of customers who view the Studio as providing a relaxing, social and fun environment.

To accomplish this, the Company’s milestones will be set in six-month increments. The first 6 months prior to opening:

Secure an investor for 80% of the capital requirement

Secure a prime location near the shopping mall and community college, with an affordable lease of no more than $3.00 per sq ft.

Obtain all required permits and license in order to open the doors within 6 months

Initiate a marketing plan to facilitate the grand opening and establishment.

Hire staff that can assist in the operational tasks

Initial Opening Strategy

The management of The Mud Puddle studio is committed to an initial targeted marketing and promotional strategy. Initially, the goal will be to leverage the unique opportunity afforded to a new ceramics studio that is moving into an area that is explicitly looking for upscale products and novel shopping and artistic experiences. The principal strategies for achieving this preliminary objective are summarized as follows:


The creation of a grand-opening press release that will be distributed to the local press, major employers, and community economic development organizations.

The distribution of a press release to local media, television and radio stations to promote the value of an interview with the Studio’s founder.

Place highly-visible grand opening signs on the front of the Studio to generate attention and attract new customers.

First 6 months after opening:

Manage the growth of the company in a such a manner as not to exceed the budget

Establish a presence in the community as a children’s educational art studio.

Revisit the business plan to determine if sales and budget forecast were reasonably set.

Following six months:

Make adjustments to operational procedures and financial milestones if needed

Continue to increase exposure to the community

Produce sales revenue of $250,000 in the first year.

2.4 LEGAL DESCRIPTION

The company is currently established as an LLC in the state of California with Anne and Erik Coates as owners.

2.5 START- UP SUMMARY

The Mud Puddle’s start up costs consists mostly of equipment, inventory, marketing, computer system, and store renovations. There will be three equity owners in the business; Anne and Erik Coates that will invest $20,000 and an independent investor of $80,000 whom we are currently seeking to assist.


Start Up Expense Legal $ 1,000.00 Stationary etc $ 300.00 Advertisement/Grand Opening $ 5,000.00 Signage $ 2,500.00 Architect, Elec & Permit Fee $ 2,500.00 2 Part Time Employees $ 1,400.00 Rent/ Deposit $ 6,500.00 Utilities $ 500.00 Liability Insurance $ 800.00 Total Start up Expenses $ 20,500.00

Start Up Assets Cash Required $ 30,000.00 Start Up Inventory $ 10,000.00 Long Term Assets $ 39,500.00 Total Assets $ 79,500.00

Total Requirement $ 100,000.00


3.0 MARKET

3.1 INDUSTRY OVERVIEW

According to Contemporary Ceramic Studios Association 72% of the studios have reported growth in sales .In fact, the contemporary ceramic industry is growing rapidly since its establishment in 1991. Now there are over 2000 studios in business worldwide with an average of 5 million people visiting the studios.

Annual sales nationwide are estimated at $400 million and a 72% growth in sales.1

3.2 MARKET TRENDS 2

Ceramics Franchises

1 Information obtained from http://www.ccsaonline.com/join_open_studio.php retrieved on 2/26/082 http://realestate.yahoo.com/California/Stockton/neighborhoods?csz=Stockton%2CCA retrieved on 2/26/08

Population: 278,069

Population Growth: 13.9%

Population Density: 5,073

Median Age: 30 years

Median Income: $39,160

Cost of Living Index: 137

Stockton, California has averaged a population growth of 13.9%, of that, 26.9% are families.

Stockton Demographics

http://realestate.yahoo.com/California/Stockton/neighborhoods?csz=Stockton%2CCA

http://www.ccsaonline.com/join_open_studio.php


An August 2006 article published in the LA Times noted “Nationally, Color Me Mine franchisees have average annual gross sales of $250,000, with a net to the owner/operator of $45,000, but generally these figures are higher in California.”3

3.3 TARGET MARKET

Based upon extensive research, management has determined four individual target markets for this venture:

Family units with children from ages of 6-18 years

Adult individuals ages 19-40

Older youth ages 11-18 years of age

School or individual parties for elementary grades

The company targets these types of customers within a 25-mile radius of the store.

3 http://www.latimes.com/classified/jobs/counselor/la-counselor-081106,0,4745250.htmlstory, retrieved on 2/26/08

http://www.latimes.com/classified/jobs/counselor/la-counselor-081106,0,4745250.htmlstory


3.4 CUSTOMER BUYING DECISIONS

The Mud Puddle has identified the following factors that can be used to determine potential customers to select the Company’s products:

Location

Variety of products

Competitive pricing

Availability

Excellent customer service

Ease of parking

Variety of skill level projects

Variable hours of operation

The management believes that company can meet all the key factors to assure its success.

3.5 BUSINESS OPPORTUNITIES

Market Size

The Mud Puddle will be centrally located near an active shopping center and community college. This area will support the large target population of potential customers.


3.6 LONG-TERM MARKETING STRATEGY

The initial launch of the Studio will be followed with a secondary and long-term marketing effort that is primarily designed to grow the business and maximize customer loyalty. The principal components of this on-going marketing objective will include:

The creation and distribution of an online press release that will be forwarded to the community affairs departments of each major employer in the area.

A long-term display advertising campaign that will appear in local free-press newspapers and hip magazines.

An e-mail sign-up sheet to create a list of online customers that want to hear about Studio specials and other related events.

The development and maintenance of a simple website to create on online identity for the Studio. Initially, the site will include some pictures of the Studio, driving directions, operating hours, and contact information.

Participation in Business fairs of local and large businesses and participation in local City events.

In conjunction with the marketing and promotional tactics described above, The Mud Puddle Studio plans to build a steadily growing and loyal customer base by selling high-quality products and treating each customer as a special friend. The management passionately believes that this personalized approach is essential for the Studio’s long-term success.

It is the intent of the Studio’s management to utilize resources efficiently and distribute cash profits effectively to support a variety of marketing programs. The management will also implement specific monitoring programs to evaluate the origination of leads and the success of each marketing technique. This evaluation will ultimately enable the Studio to focus its resources on those sales and marketing programs that produce measurable growth and tangible financial success.

3.7 MARKETING PLANNING

The Studio’s goal is to develop a presence in a high retail shopping area. It will be centrally located near the local community college and shopping mall. The idea is to be visible to the art students and families that shop


and attend school in the area. The goal is also to include mosaic and beading project stations by the end of the first year.

The primary objective is to develop a successful art education program that will connect with the community. Having the store located near a college can open opportunities to have several different levels of skilled classes. However, the main target market would be families and young kids.


4.0 COMPETITIVE ADVANTAGE AND DIFFERENTIATION

Visual Distance Map of Competitors

4.1 COMPETITION

Locations Mileage Distance

A) Location of The Mud Puddle 0B) The Mud Mill, Lodi 11 milesC) Color Me Mine, Modesto 32 milesD) Color Me Mine, Tracy 34 miles

The Studio will be located in a county with a couple of other ceramic studios as mentioned above. Stockton California has a population of

http://en.wikipedia.org/wiki/California


278,069 with an annual growth rate of 13.9% which should easily support the development of new ceramics studios in the area. The studio will be located in or near a new retail subdivision near the mall. It is considered to be an upscale shopping center that will invite retail chains like Anne Taylor, Coldwater Creek, Eddie Bauer, and many others.

The Studio will open with 2 kilns, various pre-fired pottery items, and a computer system to keep financial records and maintain inventory.

4.2 COMPETITIVE ANALYSIS

Currently the only competition is a store about 20 miles away in another town. Two franchises, Color Me Mine, will be opening, one within the year about 40 miles away. The other franchise has not been determined, but a franchise reservation to open the store has been put in place.

Critical Success FactorsBoth the short-term and long-range success of the Studio rests in the ability of the Company to satisfy the market needs, remain current with art studio trends, and respond to fluctuating customer preferences and interests. Fundamentally, success lies in the following elements:

• Rapid and cost effective capture of market share and optimization of existing client base to develop new business opportunities.

• Accelerated and varied service extensions and concurrent promotions that build on the baseline service suite and facilitate brand growth.

• Continual negotiation of favorable arrangements and agreements with mission critical suppliers of products and equipment maintenance.

• Multi-pronged marketing approach that includes both regional and grass roots promotions and advertising.

• Commitment to reinvesting profits for further growth through sound financial practices, effective sales and marketing programs, dedication to increasing value to the customer and guaranteeing satisfaction, and efficient business management


4.3 SWOT ANALYSIS

The company is definitely in demand for the Stockton area. Currently, clients have to travel from 20 to 45 miles to obtain similar products and services. By establishing the Studio early and including addition complementary products the Studio will stand apart from the competitors.

Some weaknesses and possible threats include: the managers lack of a solid background in marketing, sales, and complete knowledge of product and service techniques. To resolve the issues, the Studio will hire qualified individuals who will manage the gaps in operations.

Internal AnalysisStrengths

- Prime upscale location- Good competitive skills- Solid managerial background- A new specialized store in the

market

Weaknesses

- Vulnerable to competitive pressures

- Missing some key skills- Lack of Marketing Expertise

External AnalysisOpportunities

- Only specialized store in the area

- Diversity in product line- Add complementary products- Demand for product and

services

- New franchise competitor likely to enter

- Changing buyer needs - Adverse demographics- Rising costs


5.0 MANAGEMENT SUMMARY

The company will be managed by Anne and Erik Coates as operational and onsite management.

5.1 MANAGEMENT DUTIES

Management duties will be separated into the following categories and will be supported by both owners:

1. Operational and onsite management:

- Development of marketing strategy and plan- Development of operating strategy and plan- Development of operating budget- Management of staff recruitment- Interviewing, hiring and placement- Staff training- Development of policies and procedures- Implementation of marketing plan- Management of start up plan events and actual operations- Monitoring and controlling of budgets- Cash control systems- Payroll- Accounts Payable- Providing tax information to the Accountant- Coordinating with operational management regarding safety, insurance

issues, and staffing.

Key personnel are as follows:

Financial Manager: Anne Coates

Anne Coates received a B.S. in Accounting from the University of Regis in 2007. She is in the process of obtaining her M.B.A in Finance and will graduate in 2009 from University of Regis.

Anne has worked as an Office manager for an office furniture retailer and has worked as an independent bookkeeper for several different companies.


Operations Manager: Erik Coates

Erik Coates has over 5 years in management supervising 3 employees. His background includes project, cost, inventory, and revenue management.

5.2 FINANCIAL MANAGERS RESPONSIBILITIES

As a start up company with an independent investor the financial manager will have to continually report financial records to the investor. She will also be responsible in meeting financial goals and improving operational procedures to maximize the net income. Some of the responsibilities are outlined below:

- Review income expense to maximize the net income.- Review operational procedures that include safety, staffing, training, and

new revenue sources.- Review the marketing plan recommendations and assist the operational

manager in meeting the targeted income and reviewing recommendations to increase sales.

- Review all cash controls and reporting procedures- Review of inventory and make recommendations on future stock

5.3 OPERATIONAL MANAGERS RESPONSIBILITIES

The operational manager will play a vital roll in the company by maintaining the daily operational functions. Those responsibilities are included below:

- Review and improve operational systems, processes, and policies - Perform maintenance on the facility and equipment- Conduct inventory and supplies checks and reorder stock when needed- Organize schedules for parties and promotional events- Oversee financial budget and planning- Conduct staff scheduling and training- Interviewing, hiring and placement of staff- Review of staff effectiveness- Implementation of the marketing plan


5.4 PERSONNEL PLAN

The company plans on maintaining the following positions over the next several years:

StaffFull Time 2008 2009 2010 2011 2012

Financial Manager 1 1 1 1 1Operations Manager 1 1 1 1 1

Part Time

Weekday Art Assistant 2 2 2 2 2Weekend Art Assistant 3 3 3 3 3

Total 7 7 7 7 7

The average staffing level will be about 2 during the weekday and 3 during the weekend depending on the number of parties reserved.

Documents

Mud Puddle Business Plan