Robert A. Garcia, President P.O. Box 10059-251 Newport Beach, CA 92658
(714) 997-9100
Plan prepared * by
Robert A. Garcia
(Private and Confidential) Copy 1 of 2
* Financial history updated through December 31, 2002, by the developers of Automate Your Business Plan Historical financial statements in this plan show what could have happened in 2002. The 2002 year-end financial statements and financial statement analysis were prepared by Automate Your Business Plan developers and are intended to be used for educational purposes only. They were not meant to and do not reflect the actual financial history of Marine Art of California.
TABLE OF CONTENTS
EXECUTIVE SUMMARY………... 1 I. ORGANIZATIONAL PLAN ………...… 2-8 Summary Description of Business ...…….... 2
Products and Services ... 3 Legal Structure .………... 3
Management ... 4 Personnel ... 5
Legal and Accounting ...……... 7 Insurance ... 7 Security ... 8
II. MARKETING PLAN ……….……….. 9-17 Target Market ……... 9
Competition ... 10 Market/Industry Trends ... 10 Market Research Resources ... 11 Methods of Sales and Distribution ……….. 12
Advertising ……….. 13
Pricing ... 15 Location ...……… 15
Gallery Design ...…………...…... 16 Timing of Market Entry ...…... 17
III. FINANCIAL DOCUMENTS……….……... 18-32 Summary of Financial Needs ... 19
Loan Fund Dispersal Statement ... 19 Financial Projections for 2002 ………. 20-25 Pro Forma Cash Flow Statement ...……... 20-21 Quarterly Budget Analysis ...…... 22 Three-Year Income Projection (2002, 2003, 2004) ...…...…... 23 Projected Balance Sheet (for Dec. 31, 2002)...…... 24 Break-Even Analysis ...…... 25 Historical Financial Statements for 2002 ……….. 26-28 Profit and Loss Projection (Income Statement) ...…..……... 26-27 Balance Sheet (Dec. 31) ..……...………...…... 28 Financial Statement Analysis ...…... 29-32 Summary ...……... 29 Supporting Spreadsheets ...………... 30-32
IV. SUPPORTING DOCUMENTS………. 39-47 Personal Resume ...…...…... 34-35
Catalog Cost Analysis ...…...…... 36 Competition Comparison Analysis ...…... 37 Proposal for Limited Partnership ...…... 38 Terms & Conditions for Participants ...…... 39 Letter of Reference ...………...…... 40
MARINE ART OF CALIFORNIA
Executive Summary
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Marine Art of California is a Limited Partnership to be established in 2001. The direct mail order and showroom company will be located in Newport Beach, CA. The company is seeking working capital in the amount of $130,000 for the purpose of start-up operations and to cover estimated operating expenses for a six-month period.
Twenty limited partnerships (2.25% each) are being offered in return investments of
$6,500 to be treated as loan funds to be repaid over a 15-year period at the rate of 11%. Limited partnerships will have a duration of four years, at which time the partners’ shares will be bought back at the rate of $3,250 for each 2.25% share. At the end of the 15-year loan period. It is projected that the Return on Investment (ROI) for each $6,500 share will amount to $34,084.
The $130,000 in loan funds will enable the company to effectively market its products and services while maintaining proper cash flow. Funding is needed in time for the first catalog issue to be distributed in November 2001 and for a showroom to be operational in the same month for the Christmas buying season. There is a two to three week period between order placement and delivery date.
It is projected that the company will reach its break-even point in the latter part of the second year of operation.
Repayment of the loan and interest can begin promptly within 30 days of receipt of funds and can be secured by the percentage of the business to be held as collateral.
I. ORGANIZATIONAL PLAN Marine Art of California
Summary Description of Business
Marine Art of California is a start-up company in Newport Beach, marketing the works of California artists through a direct mail-order catalog. The product line is a unique combination of art, gift items and jewelry, all tied together by a marine or nautical theme. This marketing concept is a first! There is no known retailer or catalog company exclusively featuring the works of California artists in either a retail store or by mail-order catalog. I'm targeting a specific genre of the art market that, in terms of marketability, is on the cutting edge.
Having managed Sea Fantasies Art Gallery at Fashion Island Mall in Newport Beach, I was able to discuss my idea personally and collect more than 700 names and addresses of highly interested customers who are marine art lovers. Of these, 90% live in the surrounding communities and the rest are from across the U.S. and other nations.
Currently, I have begun mailings, taking orders and making sales. I have a large number of artists and vendors throughout California with marketing agreements already in place.
I have assets of about $10,000 of miscellaneous items. These include framed and unframed originals, lithographs, posters, bronzes, acrylic boats, jewelry, videos, cassettes, CDs, T-shirts, glass figurines, greeting cards, shells and coral.
Sales will be processed by a four-step marketing plan. First is a direct mail-order catalog published bi- monthly (six times a year). This allows for complete marketing freedom targeting high-income households, interior designers and other businesses located in coastal areas. The second is to generate sales through a retail showroom where merchandise can be purchased on-site and large high-end pieces (exhibited on consignment) can be ordered by catalog and drop shipped from artist/vendor directly to the customer. Third, a comprehensive advertising campaign targeting the surrounding high- income communities shall be conducted (e.g., yellow pages, high-profile magazines, monthly guest artist shows, grand opening mailings and fliers with discount coupons). Fourth is to conduct an ongoing telemarketing program aimed at customers on our mail lists in our local area at minimal cost.
Industry trends have stabilized with the bottoming of the current recession. My plan to counter this situation is to obtain exclusive marketing rights on unique designs and the widest selection in the market of quality items priced affordably under $100.00.
My plan is to secure my ranking as the number two marine art dealer in Southern California, second only to the Wyland Galleries by the end of 2003 and by 2004, through steadily increasing catalog distribution to more than 150,000 copies per mailing, to rank as the #1 dealer in California in gross sales! From 2004 through 2006, projected catalog distribution will increase at a rate of at least 100,000 catalogs per year.
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