The Industry
• Name and describe the market or industry that
you will work within—in other words, the chosen
“sandbox” where you will play.
• For market or industry descriptions see the North
American Industry Classification System
(NAICS) at www.census.gov/naics or industries
at a glance at http://www.bls.gov/bls/industry.htm
• Talk about any trends and changes in the
industry.
• Talk about whether the industry is growing and,
if so, by how much.
The Product
• Talk about the product or service that you will
sell.
• Talk about what sets the product or service
apart from what is currently being sold to
customers.
• Talk about any ways you can protect the product
or service from being easily copied by the
competition.
• Present any product pictures, drawings, or
renderings you might have (on additional slides if
necessary).
The Market
• The idea for a market study is to tell the “story of the market”
in numbers starting with the big picture and then narrowing
down the data to a more detailed view. Use as many slides as
you need and don’t clutter the information.
• Talk specifically about where your customers are located. Are
they within a city, county, state, region, nation, or international
place? Maps are good to use here if it makes sense.
• Talk about the numbers of customers in the market and
possibly even what they spend on your kind of products and
services.
• Present any community profiles for these places. The Census
Bureau is a great place to find such information at
www.census.gov
• If you are targeting business customers look at the Economic
Census at http://www.census.gov/econ/census02/ for help.
The Targeted Customers
• Talk about your targeted customers. Remember,
you can segment customers by type, buying
behavior, location, and so on.
• Describe who they are by discussing some of the
following things: (use multiple slides if needed)
–
–
–
–
–
Demographics (characteristics they share in common)
Buying Behavior (how and why they buy the product)
Size (numbers of them / dollars they spend)
Projected Sales
Trends (growth / opportunities)
Target Market Strategy
• For your targeted customers, talk about how you will
customize your marketing efforts to fit their needs.
• Remember, if this group of customers is really unique
then something about your strategy must be different.
• Talk about…
– The Message: What slogan or positioning statement will you use for
this target market?
– The Pricing: Will the pricing have to be different for this type of
customer? If so, what price will you charge?
– Product Customization: Will the product or service have to be
customized for this customer?
– Distribution: Will the product get to this customer?
Target Market Sales Approach
• Talk about your specific sales and promotional ideas
for this target market which might include:
– Contact Sphere: What other businesses or professions might
naturally refer this group of customers to your business?
– Advertising: What specific types of media will you use and at
what cost?
– Public Relations: What kinds of media relations, press releases,
and events might you use to reach this group of customers?
– Personal Selling: Do you require a sales force to reach this
group of customers? If so, how many and at what cost?
– Sales Promotions: What kinds of sales tools might you use?
Discounts, coupons, loyalty programs?
Target Market Descriptions
Description
Target Market #1
Target Market #2
Target Market #3
Name
Local Market
Commuting Workers &
Tourists
Commercial Events
Description
People and households within
7 miles of the restaurant
People migrating into
Bartholomew County
for work or tourism
Commercial business in
Bartholomew County
that need catering event
services
Demographics
Consumers ages 21 to 54 /
$54,000 average
household income
Workers and Tourists ages 21
to 54
Businesses from 20 to 300
employees
Buying Behavior
Frequent but small purchases
(5 times per year at
about $9.00 per patron)
Infrequent but larger
purchases (1 time but
spends upward of
$12.00 per patron)
Infrequent but very large
purchases (2 events per
year spending $600.00
per event)
Size (numbers/dollars)
58,600 residents / 20,000
households / $58 million
local market for
restaurant sales
9,000 daily commuters /
28,000 annual tourists
400 businesses
Projected Sales
$400,000
$150,000
$100,000
Trends
slow to moderate growth /
spending less on meals
away from home on
average
Good growth / new arts
theatre nearby should
improve traffic
Excellent growth in company
numbers and
employment trends
Target Market Strategies
Strategy
Target Market #1
Target Market #2
Target Market #3
Positioning Message
The Gourmet Restaurant Where
You Eat With Your Hands
Gourmet Burritos…Fast
Big Burritos For Big Crowds
Pricing
Entrees between $4 and $6
Entrees between $4 and $16
Per head range from $8 to $12
Lunch time speed is largest
consideration
Banquet style service
At retail location
On-site catering set-up and
service
Visitors center, community
development, tourism
bureau, hotel concierges
Chamber of commerce, HR
managers, event planners,
public relations managers
Hotel brochures, tourism
directory, billboards,
restaurant guide
Direct mail, business section of
newspaper
Product Customization
Distribution
At retail location
Contact Sphere
Advertising
Newspaper, yellow pages,
specialty publications,
website
Public Relations
Annual 5K charity run for
diabetes assn.
Personal Selling
Sales Promotions
Part-time banquet sales
coordinator
Discount coupons, samples
Hotel referral fees
15% off first event promotion
0
Minute Clinic
Typical Doctors Office
100
Hospital
Convenient
Locations
(pagers)
Speed of
Treatment
Availability
Number of
Treatments
Special
Equipment
Doctors
Price
Competitive Value Curve
HIGH
LEVEL
75
50
25
LOW
LEVEL
Competitive Analysis
COMPANY
Competitor X
Competitor Y
Competitor Z
WE CAN DO, THEY CAN’T
WE CAN’T DO, THEY CAN
The Marketing Schedule
Media
Annual Cost
Yellow Pages (South Central Edition)
Category: Restaurants, Restaurant Guide
$3,600.00
Newspaper (The Republic: Circulation 28,000)
Ad Design Costs
Media Costs (24 ads @ $328)
$800.00
$7800.00
Direct Mail (Brochures and Special Occasions)
Distribution (5,000 @ $.50 per piece @ $.27 postage)
$3,850.00
Radio (QMIX 103 / Adult Contemporary & WTIU/NPR)
Media Costs (600 :30 second ads @ $6.20 per spot)
Total Annual Advertising and Media Costs
$3,720.00
$19,770.00
The Location
• Talk about where you will be located. If you are a retailer or a
service business where access and visibility is important to the
customer, talk about your proposed location. Provide the
address and talk about the accessibility, the visibility, and the
costs.
• Talk about the numbers and types of customers that are
located near your location. These numbers are called “ring
studies” because they detail the number of customers in 1,3
and 5 mile rings from your location. See
www.easidemographics.com for free ring reports of your
location.
• Talk about any commuting and traffic patterns around the
location. Check with your state’s department of transportation
for these statistics.
Legal Structure Comparison
Characteristics
Sole
Proprietorship
General
Partnership
C
Corporation
S
Corporation
Limited Liability
Company
Formation
No state filing required
Agreement between two or
more parties. No state filing
required
State filing required
State filing required
State filing required
Duration of Existence
Dissolved if sole proprietor
ceases doing business or
dies
Dissolves upon death or
withdrawal of a partner
unless safeguards are
specified in a partnership
agreement
Perpetual
Perpetual
Dependent on the
requirements imposed by the
state of formation
Liability
Sole proprietor has unlimited
liability
Partners have unlimited
liability
Shareholders are typically
not personably liable for the
debts of the corporation
Shareholders are typically
not personally liable for the
debts of the corporation
Members are not typically
liable for the debts of the
LLC
Operational
Requirements
Relatively few legal
requirements
Relatively few legal
requirements
Board of directors, officers,
annual meetings, and annual
reporting required
Board of directors, officers,
annual meetings, and annual
reporting required
Some formal requirements
but less formal than
corporations
Management
Sole proprietor has full
control of management and
operations
Typically each partner has
an equal voice, unless
otherwise arranged
Managed by the directors,
who are elected by the
shareholders
Managed by the directors,
who are elected by the
shareholders
Members have an operating
agreement that outlines
management
Taxation
Not a taxable entity. Sole
proprietor pays all taxes
Not a taxable entity. Each
partner pays tax on his/her
share of income and can
deduct losses against other
sources of income
Taxed at the entity level. If
dividends are distributed to
shareholders, dividends are
also taxed at the individual
level
No tax at the entity level.
Income/loss is passed
through to the shareholders
If properly structured there is
no tax at the entity level.
Income/loss is passed
through to members
Pass Through
Income/Loss
Yes
Yes
No
Yes
Yes
Double Taxation
No
No
Yes, if income is distributed
to shareholders in the form
of dividends
No
No
Cost of Creation
None
None
State filing fee required
State filing fee required
State filing fee required
Raising Capital
Often difficult unless
individual contributes funds
Contributions can be made
from partners, and more
partners can be added
Shares of stock are sold to
raise capital
Shares of stock are sold to
raise capital
Possible to sell interests,
though subject to operating
agreement restrictions
Transferability of Interest
No
No
Shares of stock are easily
transferred
Yes, but must observe IRS
regulations on who can own
stock
Possibly, depending on
restrictions outlined in the
operating agreement
The Legal Structure
• Talk about the legal structure you have chosen for the
business. See the preceding chart for help.
• Talk about why the structure was chosen—in other
words, what advantages does the structure provide?
• A sample chart like the one below might be helpful to
show the ownership structure of the business:
Owner
Shares
Jack Smith
Loretta Johnson
Equity Investors
1,000
500
500
Percent Owned
50%
25%
25%
Risk Management
• Talk about the different kinds of insurance you
will need and what the cost of such coverage will
be.
• In general there are three basic categories of
insurance:
– Property: covers building and content losses
– Liability: gives you legal protection
– People: provides health, worker’s comp, and lost income
protection
The Core Scores
• Talk about what things you need to measure to be
successful.
• These measures might be leading indicators of
such things as customers, growth, innovation,
internal operations, or financial performance.
– Example: “The Chamber of Commerce will measure five
metrics in determining our success: annual member engagement,
member retention, net member growth, market penetration, and
employee engagement.
– Example: “For our restaurant to be successful, we must closely
measure four activities: reservations and table turns, food costs,
staff turn-over rates, and total staffing costs.”
Required Start-Up Funds
Item
Amount
Fixed Assets
-Building
$1,000
-Land
$1,000
-Initial Inventory
$1,000
-Equipment
$1,000
-Furniture and Fixtures
$1,000
-Vehicles
$1,000
Working Capital
-Salaries and Wages
$1,000
-Insurance Premiums
$1,000
-Leasehold Improvements
$1,000
-Rent and Utility Deposits
$1,000
-Advertising and Promotions
$1,000
-Legal and Accounting Fees
$1,000
-Supplies
$1,000
-Cash on Hand
$1,000
Totals
$15,000
Capital Strategy
Total Amount Required
$907,900
-4 Investors ($50,000 each will get 25% share of company)
$200,000
-Commercial Bank Loan (Real Estate & 80% Building)
$684,000
-Owners
$23,900
Loan Payment Amounts
-Principal Amount Borrowed
-Projected Interest Rate
-Term In Months
Total Monthly Loan Payment
$684,000
7.25%
240
$5,406.17