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Sports Equipment Cafe Business Plan

The Boulder Stop

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Executive Summary

1.0 Executive Summary

Introduction

The Boulder Stop will be a combination coffee shop and rock climbing gear store strategically located near one of the Pacific Northwest's premier climbing spots. Our main strategy is to develop The Boulder Stop experience as part of the overall rock climbing activity. We don't intend to be just a store, but rather a rock climbing cultural center for regulars and visitors to Smith Rock, Oregon.

It is the purpose of this business plan to lay the foundations of the company's vision, philosophy and strategy to the firm's principal investors and debtors and to align the various elements of the company to create a coherent system of sustainable customer satisfaction and profits.

The Company

The store is located one mile from Smith Rock State Park in the Central Oregon desert. It is conveniently located in an area frequented by national and international tourists.

We expect a high degree of expertise and enthusiasm from our employees and we will compensate them accordingly. All employees are hired for their expertise and enthusiasm and will be paid at a rate well above the minimum wage to facilitate low-turnover and long-term loyalty. The company plans to hire two part-time employees as espresso servers/gear experts.

Sourcing is critical for any enterprise, especially a retail operation. The Espresso Harvest will be our coffee vendors, and will handle many in-store merchandising issues for their line of coffee products. The sport and recreation inventory will be sourced directly from manufacturers like Black Diamond, Boreal, and Petzl.

Luke Walsh will be the general manager and founder of The Boulder Stop. Mr. Walsh graduated from the University of Oregon in 1997 with a degree in Business Management. Luke's success as a Nordstrom employee combined with his formal business training makes him an ideal community leader and business owner.

The Market

Consumer expenditures for rock climbing equipment rose to $4,000,000 in Central Oregon in 1997. We expect sales to increase steadily as Oregon's population grows and the rock-climbing industry becomes increasingly popular.

The Western Oregon presence of several large universities is expected to fuel our business, as does the status of Smith Rock as an international destination spot for rock climbing enthusiasts. Individuals from as far away as Japan, Europe, South America, and Australia seek out Smith Rock as a beautiful and challenging sport and rock climbing destination. We count worldwide readers of such publications as Rock & Ice magazine and Outdoor Adventure among our target audience.

Trends are in our favor. There are three major trends at work in our market:

• Outdoor sports in general and rock climbing in particular are gaining exposure. The rock climbing gyms in the Silicon Valley, Seattle, Eugene, and other locations are clear evidence of this trend.
• Central Oregon is becoming a major vacation destination and recreation spot.
• The gourmet coffee trend started in the Northwest, and is spreading quickly throughout the nation. A growing number of people look to their high-end coffee drinks as a way to enjoy a moment, and as an integral part of any outing or activity.

There are two important underlying market needs; a real need for a highly professional provider of climbing gear and a social meeting place/refreshment provider near the Smith Rock location. In many ways the Boulder Stop mimics the positioning of a ski lodge; selling crucial gear while providing a place for coffee, snacks, and talk.

The Boulder Stop has several advantages over its leading competitor including newer inventory and more modern interior fixtures, an atmosphere that appeals to a wider market than our largest competitor, and the coffee/espresso concept.

The Boulder Stop will use advertising and sales programs to get the word out to customers.

• 2000 four-color brochures
• Half-page newspaper advertisements in Oregon regional newspapers,
• Web promotions

Our three main target markets are Weekend warriors, Hard-core climbers, and The curious. We predict that the number of Hard-core climbers will grow faster than the number of Weekend warriors. Climbing is becoming more and more technical, an "Insider's sport" and we believe this will fuel the growth of dedicated, highly sophisticated climbers.

Financial Projections

The Boulder Stop expects to earn approximately $45,000 in profits by year three based on projected sales of $145,000 in that same year. These projections are based on the following assumptions.

• Growth will be moderate, cash balance always positive.
• Marketing will remain at or below 15% of sales.
• The company will invest residual profits into company expansion and personnel.

We predict advertising costs and consulting costs will go up in the next three years. This will give The Boulder Stop a profit-to-sales ratio of nearly 31% by the year 2000. Normally, a start-up concern will operate with negative profits through the first two years. We expect to avoid that kind of operating loss by knowing our competitors, our target markets, industry direction, and the products we sell.

Highlights



1.1 Objectives

1. To make The Boulder Stop a local favorite for tourists, hikers, and climbers on their way to/from Smith Rock.
2. To achieve the largest market share in the region for appeals gear. We will use State of Oregon economic data to compile an estimate of market share goals for 1998.
3. To be an active and vocal member of the community, and to provide continual re-investment through sponsorship of community activities and celebrations. We will sponsor five or more events during the year, including fun climbs, family bouldering, and celebrity hosted competitions.
4. To achieve a 65% gross margin within the first year. Our conservative projected gross margin is 45%.
5. To achieve a net profit by year two. We will re-invest these profits in our business and our community's future.

1.2 Mission

The Boulder Stop is an equipment store and cafe specializing in premium appeals gear and coffee/espresso drinks. We believe appeals should be safe and fun. We understand that rock climbers need a healthy dose of the newest gear, fresh snacks, and raw caffeine.

Our goal is to be the centrifuge for rock climbers living in and visiting Central Oregon. Smith Rock State Park is one of the finest rock climbers parks in the world. Our staff is fluent in several languages, including Spanish, German, and French. Locals and tourists alike will long for our hip, lively shop because of our staff, our setting, our gear, and our coffee.

We believe it is important to remain an active member of the community. To impact people's lives in more ways than deriving a profit from them. We host community events that bring out the best in people.

We will be the region's destination for those who want to know all there is to know about rock climbers gear, safety, rules, and events. The future of rock climbers in Central Oregon will be determined by our level of commitment.

1.3 Keys to Success

To succeed in this business we must:

• Sell products that are of the highest reliability and quality. We must offer as many or more premium products than REI offers online and through their Eugene and Portland stores. This means we must carry all premium brands of harnesses, active protection, passive protection, helmets, ice climbing gear, camping gear and mountaineering gear.
• Offer loss leaders and other promotions that bring customers into the store to buy goods, explore our line of services, and sign up for future events.
• Provide for the satisfaction of 100% of our customers and vendors. Both are very valuable to us and we will design a customer care plan to manage complaints, implement employee and customer feedback, manage supplier accounts, and predict potential conflicts.
• Be an active member of the community: i.e., host sport climbing and sport climbing events.
• Negotiate valuable contracts with great distributors such as Trago, Petzl, Black Diamond, Beal, Ushba Mountain Works, and others. To maintain a high margin business plan, we must negotiate a good cost structure.