GFX: Gravestat Farm eXchange

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Horse Reseller Business Plan

Strategy and Implementation Summary

The successful Strategy and Implementation of GFX relies on the culmination of a lifetime of education and experience. We will utilize these life assets to execute the content of this plan beyond the projections contained herein. Broken into its simplest terms, the GFX strategy and implementation is based on these simple executables:

1.  Five primary marketing methods:

  • Website.
  • Print.
  • Event.
  • The Internet.
  • Referral.

2.  Four primary product lines:

  • Riding horses.
  • Major tack & equipment.
  • Minor tack & supplies.
  • GFX manufactured product.

3.  Three primary outlets:

  • At our home facility.
  • At horse events.
  • On our website.

4.  Two primary assets:

  • Professional business skills and experience of Edward Graves.
  • Horse knowledge and expertise of Leanna Graves.

5.  One primary need:

  • Funding to allow this plan to become a reality.

Together, we (Edward & Leanna Graves) possess every bit of experience, knowledge, ability, and proven history, to execute each of the key issues identified above. The only thing lacking is the financial resources to bring the GFX plan to fruition. Provide that single missing piece and the reviewer of this document will be "throwing the switch" on a long term, successful business entity known as GFX: Gravestat Farm Exchange.

5.1 Sales Strategy

We will be utilizing experienced sales skills to close sales once we are in contact with a prospective customer.

  1. For retail horse sales this will be accomplished through experienced pre-qualification and matching of horse to rider, utilizing our riding expertise to show the best aspects of the horse, and practicing basic sales skills to close the sale.
  2. For event sales this will be accomplished through standard "retail counter sales" skills and technique, along with the all important location, location, location (at the event with a captured target audience).
  3. For Web sales this will be accomplished through the creation and maintenance of a pleasurable, convenient, and comfortable Web catalog and online purchase capability.

5.2 Value Proposition

GFX offers the prospective or limited horse owner the opportunity to purchase a quality riding horse, along with all of the extras and essentials that are both necessary and desirable, in a uniquely professional and ethical business environment.

5.2.1 Sales Forecast

The following table and chart provides an extremely conservative forecast of GFX projected sales over the next three years. It shows a steady but realistic annual growth as GFX gains wider recognition in Oklahoma for riding horses, and nationally for tack and supply.

The following are anticipated positive influences over the attached forecast that have not been calculated in.

  • Refinement of our overall product line presenting reduced Per Unit Cost.
  • Increased discounts from our existing vendors resulting from quantity purchases.
  • Increased discounts from new vendors seeking to gain our business.
  • Potential exponentially increased sales with the successful implementation of a Web strategy.
  • Potential exponentially increased sales with successful manufacturing and production of GFX Manufactured Products.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Riding Horses 124 175 200
Major Tack & Equipment 268 350 500
Minor Tack & Supplies 410 600 1,000
GFX Manufactured Products 162 200 300
Total Unit Sales 964 1,325 2,000
Unit Prices Year 1 Year 2 Year 3
Riding Horses $1,600.00 $1,600.00 $1,600.00
Major Tack & Equipment $300.00 $300.00 $300.00
Minor Tack & Supplies $10.00 $10.00 $10.00
GFX Manufactured Products $100.00 $100.00 $100.00
Sales
Riding Horses $198,400 $280,000 $320,000
Major Tack & Equipment $80,400 $105,000 $150,000
Minor Tack & Supplies $4,100 $6,000 $10,000
GFX Manufactured Products $16,200 $20,000 $30,000
Total Sales $299,100 $411,000 $510,000
Direct Unit Costs Year 1 Year 2 Year 3
Riding Horses $1,120.00 $1,120.00 $1,120.00
Major Tack & Equipment $210.00 $210.00 $210.00
Minor Tack & Supplies $7.00 $7.00 $7.00
GFX Manufactured Products $25.00 $25.00 $25.00
Direct Cost of Sales
Riding Horses $138,880 $196,000 $224,000
Major Tack & Equipment $56,280 $73,500 $105,000
Minor Tack & Supplies $2,870 $4,200 $7,000
GFX Manufactured Products $4,050 $5,000 $7,500
Subtotal Direct Cost of Sales $202,080 $278,700 $343,500

5.3 Marketing Strategy

The GFX Marketing Strategy relies on a variety of exposure methods, all targeted to yield maximum exposure from minimum expenditure. They include:

  • Effective utilization of the Internet and our website will be a key factor in every marketing activity. It is our website that makes the most immediate differentiation between GFX and competing horse sellers.
  • Cost effective print advertising in metropolitan newspapers, regional rural publications, regional horse publications, and association directories with the primary goal of driving traffic to our website.
  • Attendance as a vendor at local horse competition events. With our proximity to three of the most active horse competition venues in America (Oklahoma City Fairgrounds, Tulsa Expo Square Fairgrounds, and Purcell Expo Center) we have the unique opportunity to attend major equestrian events without the expense of overnight travel. This will yield the opportunity to sell our tack and equipment products, while in the ideal situation to identify potential horse customers and invite them to visit our home facility.
  • We will also utilize "e-blasts" by combining an internally kept database of contacts with an outgoing merged email message highlighting current offerings, specials, and informational tidbits.
  • Finally, we will never underestimate, and intend to leverage to the fullest extent, simple positive word-of-mouth marketing. Every horse owner typically knows several other horse owners, and/or spikes the horse owning interest in others. GFX will leverage this highly effective marketing method by providing an exceptional customer buying experience and pleasurable business practice.

5.3.1 Positioning Statement

For the pleasure horse owner/buyer who wishes to own or add a horse but is not an expert in horses or horse care, GFX offers an ethical and professional "1-Stop Shop" to provide for all of their needs. Unlike the competitive forces in the market, GFX brings a complete line of products together with the horse itself while providing a safe and comfortable business environment.

5.3.2 Pricing Strategy

GFX will follow three primary pricing strategies in accordance with the three primary product lines:

  1. Riding Horses. Our prices for quality riding horses have already been experimented with, and well accepted by the target audience. We are able to price our horses substantially below the "registered bloodline" price asked by the standard horse ranch because our buyers have no need or desire for competition or breeding quality horses. However we have also found that we are able to price our horses above the prices asked by private individuals, horse traders, and auctions because the customer puts a substantial value on the level of comfort they gain by purchasing their horse from GFX, applying professional business practices. We have been able to regularly achieve a 30% markup on the resale of our horses.
  2. Resale Products. Our prices for resale products will be established just below the published list price put forth by our suppliers. This price comparison is made directly with our suppliers who typically sell online. In comparison with local retailers our prices are well below their own. In context of our resale discounts this typically equates (interestingly enough) to an average 30% markup over the discounted price we pay to our providers.
  3. GFX Manufactured Products. Products that we are able to manufacture ourselves result in the most attractive pricing proposition of all, to both us and the customer. Horse products, as with most special interest products, enjoy a ridiculous margin through standard outlets. Of the products we have investigated we find that we are able to produce like products for approximately 25% of the typical retail list price, mark them up an additional 60% above cost to produce, and still offer them for sale at approximately 15% less than the competing retail outlets. This provides a very nice profit margin and revenue stream from a limited product line.

The overall pricing strategy is "VALUE." Value in the quality of products, value in the pricing of the products, and value for the business practices and methodology employed to sell the products.

5.4 Future Strategy

Not included within the tables, charts, and projections of this business plan is a future retail location from which GFX will continue and expand its' operation.

  • The retail location will be located off of I-44, at the Chandler exit, midway between Oklahoma City and Tulsa, Oklahoma (nine miles south of our current location).
  • The retail location will increase retail tack sales without any negative impact on event or Web based sales. Retail tack buyers are accustomed, even prefer, to travel a slight distance to make saddle and tack purchases.  The distance to, and rural location of, GFX will only serve to increase the perceived value of their purchase.
  • The retail location, inclusive of a horse "show & sell lot" will further solidify the image of GFX as a truly unique and attractive entry in the horse sale business.
  • The growing reputation of GFX coupled with the solidified image as a retail location will also increase retail horse sales.
  • The retail location is targeted for opening during the third year of GFX operation, 2002, unless business factors indicate an accelerated schedule.

Given proper execution, there is no reason for the long term future of GFX not to include multiple locations.  The same formula detailed within the context of this business proposal could certainly be carried to a number of other locations, initially in surrounding states, in which a major metropolitan area exists in a primarily rural geographic area; for example Louisiana, Arkansas, Missouri, Kansas, Colorado, & Texas would be prime targets for future expansion.  It is not beyond reason to envision a chain of GFX locations offering a full line of tack and equine supply, along with the only legitimate riding horse sales companies in existance.

Should the reviewer of this plan feel that an accelerated schedule for the opening of the first GFX retail location is warranted, additional financial analysis will be provided detailing that scenario.