SBC Resellers
Winter 2013
Oliver, August, Wahaab, Sebastian, Nicki
Santa Barbara County Resellers
Executive Summary
“Our commitment is to create satisfaction and low price guarantying, because your money is worth it!”
Company Background
Business Description: Santa Barbara County Resellers (SBC Reseller) is a
retailing company, where people trade their IT-products, both pre-owned and
not. We not only want interest from individual traders on our website, but as
well as larger companies which are in the IT-industry market. We are a
partnership company, divided equally between five owners. We will be likely to
expand in the future, and then eventually become a “Public Limited Company”.
Compared to already companies within this market, our main focus in the first
place is IT-products, and then we only charge 8% of each purchase.
Business Model: SBC Resellers provide a place where IT-products are being
traded. We both companies and individual people can trade their items, to
guarantee the best prices
Mission Statement: “Our commitment is to create satisfaction and low price
guarantying, because your money is worth it!”
Market Opportunity
Opportunity: The lower class and the development within the IT-industry is
increasing rapidly, to keep the low class people within the development of the
IT-industry, we provide low prices to fulfill their needs and wants.
Contact Information
Contact Information
Oliver Christensen
0045 6146 9158
Olidk@live.dk
SBC Resellers
1565 Laurel Avenue
Solvang, California
93463
Year Founded
2013
_____________
Investment Opportunity
$3335
Annual Operating Costs*
$6240
Target Market: Lower and middle class in Santa Barbara County.
Industry Overview: There are 410,000 people in Santa Barbara County, and 70%
of them are within the lower or middle class. Which gives us 287000 people. The
trend within the development of the IT-industry is happening so fast, and is
unaffordable for the lower class population.
Market Research: Santa Barbara County has a population of 419.793 people, and
since our target segment, mainly is the low class and middle class it wills reduces
the segment to 419.793/100*72.3 = 303510 people. Based on our survey 70%
were interested in trading on an online second hand page, which reduced the
number of our target market segment to 212457 people. Of the 212457 people,
we know based on our survey that 31% were interested in trading IT-products,
which gives us 212457*0.31= 65,861 people.
Leadership
Qualifications: All of the business owners are common with in general terms in
business, since all of them are studying on a business school. One of them has
been into investments in several years, and knows how to invest the money in
profitable methods. We are all really hard working people, great sociability
experience, high flexibilities, the ability to multitask, and high buying power
(capital).
1
Annual Sales*
$29,200
Annual Profit*
$16,371
Return on Sales*
56%
Return on Investment*
490%
Breakeven Units/Month*
37 Units/Month
*Projected
SBC Resellers
Winter 2013
Oliver, August, Wahaab, Sebastian, Nicki
Santa Barbara County Resellers
Business Plan
“Our commitment is to create satisfaction and low price guarantying, because your money is worth it!”
1.
1.1
OPPORTUNITY RECOGNITION & BUSINESS STRUCTURE
Business Opportunity
What is your business opportunity?
Our business opportunities are to expand to other counties, by creating various sections
with other counties and sales opportunities, and provide advertisement for other
companies that have a specific interest in the different sections (for example: Verizon
under the IT section.)
Describe the problem/unmet need your business is solving?
Since the lower class is increasing rapidly and the demand for IT-technology products if
really high, we want to create a local service that ensures lower prices on different ITproducts.
How does your business solve the problem/unmet need?
We are solving the problem by making a second hand website available, where people
can buy affordable items to fulfill their needs and/or wants.
1.2
Type of Business
What is your type of business? (Manufacturing, Wholesale, Retail or Service)
Describe in detail why you chose this business type.
We are an online retail store, we are called “Santa Barbara County Resellers”, we want
to deliver a newspaper once a month, where people can find the things they want, and
then they can go find it on the website. We want to be a reseller, because the lower
class in American is increasing rapidly, and therefore people want to use cheaper
methods for buying IT-products.
1.3
Type of Business Ownership
Which business ownership type did you select for your business? (Sole
proprietor, Partnership, LLC, S-Corp, C-Corp) Describe in detail why you chose
this business ownership structure.
We have a partnership, with five persons in the board of directors. The company is
divided equally between the five people. We are an unequal amount of owners, by that
were able to make democratic decisions. We want to be a “Public Limited Company”
later, when our company has expanded.
Why did you select this type of business ownership? Why does it make the most
sense for your business?
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Winter 2013
Oliver, August, Wahaab, Sebastian, Nicki
We hare an unequal amount of owners, by that we are able to make democratic
decisions. We want to be a “Public Limited Company” later, when our company has
expanded enough.
1.4
Mission Statement
A mission statement is a company’s constant reminder to its employees and
customers of why the company exists in a concise way.
Our commitment is to secure the community a low price guarantee with the purchasing
of a variety of IT-products, both for personal or company uses.
Describe what your company does best and why in one-two sentences.
We provide the most affordable prices and retailed IT-products for our customers, and
secure you the best satisfaction within your purchasing experience.
1.5
Social Responsibility
Social Responsibility is often described as “doing well by doing good.” In
addition to making a profit entrepreneurs need to consider how they support
social good.
How is your business socially responsible? Be specific.
Since our target market mainly is the lower and the middle class, we want to create a
social responsibility by giving 2% of our profit each quarter to college organizations. The
reason why it is specifically college organization is that it is tax deductions and great
public relations.
How do you plan to give back to a social cause with either your time and/or
money?
Giving 2% of our quarterly profit to college organization.
1.6
Qualifications
What are your personal qualifications to run this particular business?
(Experience, certification, classes, skills) To complete this section refers to your
strengths from your SWOT.
All of the business owners are common with in general terms in business, since all of
them are studying on a business school. One of them has been into investments in
several years, and knows how to invest the money in profitable methods. We are all
really hard working people, great sociability experience, high flexibilities, the ability to
multitask, and high buying power (capital).
What qualifications would your team need to have?
We need higher business degrees and experience with starting up a new business.
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2.
2.1
MARKET RESEARCH
Market Research
What industry does your business belong to? Describe why your business fits
within this industry.
Our business is an online reseller store. Our business fits within this business because
we provide services for customer, with reselling their goods for a profit.
What is the size of that industry? (For example: revenue, services providers, and
industry trends)
Since the lower class is increasing rapidly in America, the money people are having to
spend on for example normal goods are decreasing, therefore people are willing to
spend their money on pre-owned products instead.
What is the size of your potential target market?
Our potential target market is relatively huge, since were are targeting the lower and
middle class in the Santa Barbara County, and later will expand to other counties in
mainly America.
What data did you find that supports your business opportunity?
There are 410,000 people in Santa Barbara County, and 70% of them are within the
lower or middle class. Which gives us 287000 people.
2.2
Target Market
Based on your research, describe your market segment within your target market.
Be as detailed as you can, using the following guiding questions.
Demographics: What objective social and economic facts did you find?
We target anyone that doesn’t have the opportunity to just to go out and buy a brand
new television or computer, that is the reason why SB retailers was invented, so regular
people can get the chance to get expensive IT-products to a fair price, by buying a preowned IT-product. We sell products in every price range, but mainly target the lower
class.
Geographic: Where do your customers live, or where are businesses located?
Our customers are located in the Santa Barbara County, which is where we are starting.
When we get bigger, we would like to expand to other counties, and then the
geographic target will grow bigger.
Psychographics: What are some psychological characteristics (attitudes, beliefs,
interests, etc.) of your customers?
We target anyone who likes shopping safely and online, at a cheaper price than in the
stores. We want a big variety of IT-products, which will make a broad target group.
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What are the buying patterns for your target market?
Our most frequent customer base is the holidays and weekends, because people are off
and have the opportunity to go online and purchase whatever they need. For example, if
you want to purchase a television, you will probably research in the weekdays, and then
go buy it in the weekends.
Also especially when they get their monthly paycheck, they got the money to buy a new
IT-product that they want/need.
2.3
Competitors
Which direct competitors run similar businesses? Describe these competitors in
detail.
EBay: EBay is a huge global company with a great reputation, but they are more
expensive than us. They charge their customers around 10% per sell.
Best Buy: best buy is a cheap retailer store, but it is a physical store where people have
to go out and buy it. It is not that they are cheap but they have a huge selection of
products.
Craigslist: Craigslist is becoming an enormous company, but they have a really bad
reputation, and they are more inexpensive than us, but then again you can’t count on
them and be sure on the information that is given.
Which indirect competitors fulfill the same want or need with a different
business? Describe these competitors in detail.
That can for instance be any store where people can sell their pre-owned IT-products
kind of like a thrift store, for example: Computers, iPods, mobile phones and computer
equipment.
One of the biggest indirect competitors would probably be Apple the IT-company, but it
might even come to our advantage, when apple comes out with a new product, a lot of
the older IT-products are then going on the market again. And that could be on our
business they are sold through.
2.4
Competitive Advantage
Describe your competitive advantage, or what makes your business better than
your competitors? Use the following guided questions to help identify potential
differentiators for your business:
 What product or service can your business provide that your competitors
don’t?
We have a newspaper that gets send out to everyone in the Santa Barbara
County. Which is promoting our business. Other companies can buy a section in
the paper where they can put an advertisement in.
 What mix of products or services can your business provide that your
competitors don’t?
We offer a great service to our customers, who are able to call or e-mail at
anytime. Later on we want to create a more personal relationship with our
customers, such as they have the opportunity to visit our office to get a more
personal experience.
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



What specialized selling or delivery method can give your business a
competitive edge?
We are a local company; therefore delivery will not be a big problem. Even
though, if the customers are located outside of California, we still want to provide
a great delivery service.
In what unique ways can your business meet customers’ wants or needs?
We are local, have a weekly newspaper, and offer a great shopping experience
for our customers. As well as great purchase experience, were you feel safe and
are dealing with a trustworthy business and we offer affordable prices.
Factor 1:
Price
Factor 2:
Service
Factor 3:
Delivery
Your Business
We charge 8% of
the final price from
our customer.
Competitor A
EBay: They charge
10% of the final
price.
Opportunity to call
and e-mail us 24/7.
And advises from
an online chat.
EBay: Has the
same as us, except
from more personal
experience and the
opportunity to call.
We want to create
EBay: They have
an agreement with
none agreements
different delivery
with any delivery
companies to create companies.
the best and
Therefore
cheapest delivery.
expensive delivery
costs for customers.
Competitor B
Best Buy: They
charge way more
than eBay and us.
Best Buy: Match our
service experience.
Best Buy: They are
more likely a
physical stores, but
the opportunity to
low costs shipping,
is definitely not
remarkable when
trading with Best
Buy.
List your three competitive advantages that put you ahead of the competition. Go
beyond price.
1. We offer a weekly newspaper, which will make people tend to remember us, and
do more impulse and researched buy.
2. We offer the best shopping experience, both with delivery and service.
3. We provide a variety of IT-products, both pre-owned and not.
2.5
Business Growth
What trends in your industry could provide additional opportunities for growth?
There is a trend in online shopping growing bigger. Retailers are being used more than
ever before. So when we grow bigger in our area, we will be able to expand to other
counties and at some point maybe even go national, but still keeping our locality by
having lots of small local sites instead of one big national site. As we get big in our area
we will increase profit, and use that to expand. After expanding to other counties, we
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may expand our sales sections as well, such as selling more various goods than just ITproducts.
What next steps would you take to grow your business and/or making it
operational?
We want to expand our business to other counties, but still keeping it locally. Therefore
employing employees in other counties that will be able to control and provide the best
relationship with our customers. And add more sections for other goods, for instance
cars, clothes and furniture’s.
2.6
Challenges
What trends in your industry could provide potential challenges to your
business?
If the higher class instead began to increase, then the amount of interest on our second
hand site would decrease, it would affect our business significantly, because our
potential sellers and buyers may then prefer to purchase more normal goods and luxury
goods instead.
What barriers to starting this business exist? What additional education or
training could you pursue to overcome these obstacles?
Our biggest challenge in the beginning will be to attract new customers, as customers
who would use us, most likely already uses another form of second hand/cheap price
company, for instance eBay and Amazon.
To over come the challenge we will need to market our business, we could become
better at this with a higher level of education in marketing, or locally sponsorship.
3.
3.1
FINANCIAL INFORMATION & OPERATIONS
Definition of One Unit
What is one unit of sale? Remember that a unit of sale is what the customer
actually buys from you, so it should be clear and easy to describe.
We have a large range of items in the category of IT-equipment. So every product that
gets sold is defined as a unit. We charge 8% of each product sold, and an average ITproduct is $200, therefore one is unit worth $16.
3.2
Process Steps
List all the steps it takes to get your product or service to your customer. Be
specific and add lines if needed.
Description of Process Steps
1. First we need our seller to make a sales advertisement on our website or
newspaper.
2. Then we need our buyers to notice/recognize our products.
3. Then the customer will reach us on our site, if they want a specific product. If
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they are interested they may place a bid or buy it immediately.
4. After they won/bought the product, they will receive an opportunity list of how
they want the product to be delivered.
5. Now they have the opportunity to choose which kind of payment, they would
like to use, for example: Payback later, credit card, bank transfer etc.
6. After the payment is received, the product will be successfully delivered to the
customer with desired delivery method.
3.3
Variable Expenses
List all the variable expenses, materials and labor, related to your unit of sale.
Materials
Bulk
Quantity
Cost per
Material Description
Bulk Price
Quantity
per Unit
Unit
Nothing
$0
$0
$0
$0
Total Material Costs per Unit
$0
$8
Labor
Time (in hrs.) to make one
unit
0.25 hours
Total Labor Costs per
Unit
$2
Material Costs
$0
EOU
Labor Costs
$2
TOTAL EOU
$2
Cost of Labor per Hour
3.4
Economics of One Unit
Selling Price per Unit
$16
Variable Expenses per Unit
Costs of Goods Sold
Materials
Labor
$0
$2
Total Cost of Goods Sold
$2
Other Variable Expenses
Commission
Packaging
Other
Total Other Variable Expenses
$0
$0
$0
$0
Total Variable Expenses
$2
Contribution Margin per Unit
$14
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3.5
Fixed Expenses for One Month
Expense Type
Insurance
Salary
Advertising
Monthly Cost
$50
$0
In the beginning our salary is equal to 0, since
we are planning on dividing the profit. On the
other hand, when we are expanding to other
counties, we need to pay over employees.
$200
We are expecting a loss the first few years,
since we need people to know us. We want to
advertise on newspapers, radio and
sponsorships.
We do not need to lend any money, since we
already got a large capital.
Interest
$0
Depreciation
$0
Utilities
Rent
Other Fixed
Expenses
Total Fixed
Expenses
Explanation
Secureness of our website.
$100
$20
$350
Since we are an online service, we do not
invest in any depreciation.
Cell-Phone, Wi-Fi, electricity.
We want to create our homemade office.
Our own newspaper each month
$720
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3.6
A
B
C
Income Statement for First Year of Operations
REVENUE
Gross Sales
Sales Returns
$29,200
selling price × units sold
selling price × units sold
selling price x units returned
$29,200
$0
B–C
L
Net Sales
VARIABLE EXPENSES
Costs of Goods Sold
Materials
Labor
Total Cost of Goods Sold
Other Variable Expenses
Commission
Packaging
Other
Total Other Variable Expenses
Total Variable Expenses
G+L
$3650
M
CONTRIBUTION MARGIN
D–L
$25,500
D
E
F
G
H
I
J
K
N
O
P
Q
R
S
T
U
V
FIXED OPERATING EXPENSES
Insurance
Salaries
Advertising
Interest
Depreciation
Utilities
Rent
Other fixed expenses
Total Expenses
PRE-TAX PROFIT
X
Taxes (15%)
W
Y
NET PROFIT
$29,200
cost of materials × units sold
cost of labor × units sold
$0
$3650
$3650
E+F
cost of commission × units sold
cost of packaging × units sold
cost of other costs × units sold
$0
$0
$0
$0
H+I+J
cost of insurance × 12 months
cost of salaries × 12 months
cost of advertising × 12 months
cost of interest × 12 months
cost of depreciation × 12 months
cost of utilities × 12 months
cost of rent × 12 months
cost of other × 12 months
N+O+P+Q+R+S+T+U
$600
$0
$2,400
$0
$0
$1,200
$240
$4,200
$8,640
$16,910
$2,536.50
M–V
W × 0.15
$14,373.50
W–X
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3.7
Start-up Investment
What are your start-up expenditures? What are your cash reserves? Complete the
table below:
Item
Website design
Why Needed
Online web shop,
where the buyers and
sellers trade the
products.
Newspaper
A physical paper where
the buyers and sellers
trade the products.
Total Start-up Expenditures
Emergency Fund (1/2 of startup expenditures)
Reserve for Fixed Expenses (covers 3 months of fixed expenses)
Total Start-up Investment
Cost
$1000
$350
$1350
$675
$2160
$4285
How much of this start-up investment can you afford to pay yourself? $4285
How much of the start-up investment will you need to finance? (Total Start-up
Investment- What you can afford to pay) $0
3.8
Financial Ratios
Return on Sales (ROS):
Annual Net Profit
Total Annual Sales
$14,373.50
$29,200.00
=
49%
≈
$0.49
335%
≈
$3.35
51.43
≈
52 units
Return on Investment (ROI):
Annual Net Profit
Total Startup
Investment
$14,373.50
$4,285.00
=
Breakeven Units (Monthly):
Fixed Monthly
Expenses
Contribution Margin
$720
$14
11
=
SBC Resellers
Winter 2013
Oliver, August, Wahaab, Sebastian, Nicki
4.
4.1
MARKETING & SALES
Marketing Plan
A marketing plan focuses on the Five P’s: People, Product, Place, Price and
Promotion. In this section, describe your people, product, place, and price
portions of the marketing plan.
Who are your target customers, and how will you use people to market your
business to them?
We target people who want to be within the development of IT-products, such as mobile
phone, IPads and computers. Due to advertising the customers about our pre-owned
website, we want in the first place be on the radio and our monthly newspaper.
What are the features and benefits of your product or service?
Our benefits of our service are that people can sell their IT-products through us. We will
charge 8% of each purchased item, compared to eBay and Amazon, where their
customer has to pay 10%.
Where will you sell your product or service?
In the first place we just want to be online. In the future we may be able to go into
physical retail store, but not in the beginning.
What strategies for determining prices will you use?
We have no influence on determining the products price; it is up to the consumer and
seller itself. There are bidding opportunities and “purchase now” opportunities, therefore
people can try to get the price they would like.
4.2
Promotion
In this section, you will describe your promotional strategies that you will use to
attract and retain customers. Remember to explain how you will innovatively use
existing platforms (such as blogs, social media, etc.) to effectively appeal to your
target market.
What advertising will you do as part of your promotional strategies? Why will this
form(s) of advertising be effective for reaching your target market?
Since we are geographically targeting Santa Barbara County, we will in the first place
use radio, our newspaper, local sponsorship, poster around the county and the famous
“reputation” method.
What visual merchandising will you do as part of your promotional strategies?
Why will this visual merchandising be effective for reaching your target market?
We want to create covers to iPads, iPods and mobile phones, to promote ourselves.
With this we will design it with our logo and website link. This will be sold in various
selections.
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What publicity and public relations will you include as part of your promotional
strategies? Why will these publicity and public relations initiatives be effective
for reaching your target market?
We want to be in some of the famous newspapers around in Santa Barbara County, this
will be efficient for us, because this may lead to a greater and bigger publicity.
What sales promotions will you include as part of your promotional strategies?
Why will these forms of sales promotions be effective for reaching your target
market?
In Santa Barbara County, we want to make contracts with different retail stores, where
we sell a gift card to our website. This will be effective because this may increase
customers on our website, and therefore more interest, more interest will lead to more
reputation, and by that IT-companies such as Verizon and AT&T may be interested in
selling or advertising on our site. This will of course go trough us, and they will be
charged for it.
4.3
Sales Methods
What will be your overall personal selling strategy to get sales from customers in
your target market?
We depends heavily on interest from communities, because by more interest, larger
companies will have an interest in selling and advertising and our page, and that will
result in more profit. If a customer is likely to either sell or buy, they have to opportunity
to share it on Facebook, therefore it promotes itself in a efficient way.
4.4
Sales Estimates
Maximum Capacity: What are the maximum amounts of units could you physical
make or deliver in a month?
Since our business is more likely a service, it is uncertain how many units we can sell.
We earn our money based on advertisement for companies and by creating a service
for second hand trading.
Break-Even Units: How many units do you need to sell to cover fixed expenses
every month?
We must at least sell 52 units per month to cover the operating expenses.
Market Analysis: How many units can you sell based on your number of
customers in your target market segment?
Santa Barbara County has a population of 419.793 people, and since our target
segment, mainly is the low class and middle class it wills reduces the segment to
410.000/100*72.3 = 287,000 people. Based on our survey 70% were interested in
trading on an online second hand page, which reduced the number of our target market
segment to 287,000 people. Of the 212457 people, we know based on our survey that
42% were interested in trading IT-products, which gives us 287,000*0.42= 120,540
people.
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Seasonality: How will sales be affected by different seasons and holidays? How
will your ability to produce be affected by sales and holidays?
Our business will not be affected by the seasonality, except from around Christmas
time, where our sales will increase, since the want to give one who is close to you a
new mobile phone, computer or another IT-product will be likely to increase.
Another pattern where people may temp to buy is in the beginning of each month, when
people receive their paycheck, they will usually buy what they need, and then our sales
will increase there.
Month
Units
Revenue
January
170
$2720
February
145
$2320
March
145
$2320
April
145
$2320
May
145
$2320
June
145
$2320
July
145
$2320
August
145
$2320
September
145
$2320
October
145
$2320
November
165
$2640
December
185
$2960
Annual Total
1825
14
$29,200