BikeArt's mission is to provide the customer with functional items and art work made out of recycled bicycle parts. The art work will be made by three local artists, one of which is Steve's wife Shoodnt. Some of the featured products are: wall clocks, picture frames, chairs, tables, mobiles, wind chimes, book ends, kitchen utensil holders, and many other products.
BikeArt will be a stand-alone kiosk located in the busy Valley River Mall. Through the outstanding terms and conditions of its lease, BikeArt will be able to display its larger items on the surrounding floor space. This should significantly increase sales as walk through traffic in the mall is very high.
BikeArt is forecasted to reach profitability by month nine and will have profits of almost $40,000 by year three.
The first month will be used to set up the kiosk and get things underway. During this month the part-time employees will be hired and trained. Sales will begin slowly during this first month. From the second month on, sales will steadily increase from the flow of customers that pass by the kiosk.
Total startup costs are $45,000. This will be financed through $25,000 put forward by Steve Useitagyen as equity and another $20,000 in a long-term small business loan.
The company will be a sole proprietorship owned and operated by Steve Useitagyen.
Steve Useitagyen is well qualified to work in this niche market. He received a joint degree in business administration and art design from the University of Portland. Throughout college Steve worked at a bicycle shop, initially as a mechanic, then moved up to sales, and then after college managed the shop for two years.
BikeArt will use three part-time employees to man the kiosk, in addition to Steve who will take care of the hiring, payroll, and purchasing.
BikeArt will target two market segments, industrial art aficionados and bicycle enthusiasts. Both of these groups are populous in Eugene. BikeArt is focusing on these two groups because they are the most likely consumers of this type of art work.
BikeArt has several competitors:
- Other retailers in the mall.
- Art galleries.
- Bicycle retailers.
BikeArt will leverage its competitive advantage of existing in a niche market by being the only retailer that exclusively deals with bicycle artwork. Since the mall gets lots of foot traffic all day, it is like having your own show room in the middle of the hallway of a crowded mall.
The company plans to grow slowly and establish a sustainable level of sales and cash flow before seeking to expand. Once this is done, BikeArt will seek to set up other kiosks in Salem, Corvallis, and Portland. This expansion is estimated to occur sometime after year three.
The Break-even Analysis indicates $15,212 is needed in monthly revenue to reach the break-even point. Pricing of BikeArt's products will be based on a desired net margin of 12%. Because BikeArt's products will be locally created works of art, prices are estimated to range from $40 to $500 per piece.
The business is forecasted to reach profitability by month nine and will have revenues of $147,000 and profits of $35,500 by the end of year two.
BikeArt's mission is to provide the customer with functional items and art work made out of recycled bicycle parts. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
The objectives for the first three years of operation include:
- To create a product-based kiosk whose primary goal is to exceed customer's expectations.
- The increase in the number of products sold by 20% each year.
- To develop a sustainable retail outlet that sells artwork and functional items made out of recycled parts.