HIDDEN TREASURE RECORDS L.C.
7145 Schilling Park Ave.
Northbrook, IL 60062
Identifying target customers is important for any business, and in this plan the entrepreneur actually creates a realistic hypothetical character sketch. The potential patron is clearly illustrated, providing evidence of the businessman's knowledge of his selected buyers. Entering into a niche market, the plan does an excellent job of illustrating the existence of demand and stating the desires of buyers, as well as how the business will fill the independent record label sales void in the area.
This plan discusses opening a record store catering to the import and independent music buyer. It supports a loan request for $50,000.
Continuing changes in the dynamics of downtown Northbrook have resulted in a large growth within recent years in the number of people of all ages who enjoy shopping here. Primarily though, there is a high percentage of young people who come to Northbrook that like to purchase music, movies, clothes, coffee, antiques, and gifts. There is currently no store in Northbrook that adequately caters to this group's needs for a record store with a fairly priced, wide selection of imported and independent music. I propose to open Hidden Treasure Records to fill this gap. My goal is simple: to sell a wide selection of competitively priced music products to the alternative music connoisseur, and to provide a comfortable atmosphere for customers to listen to certain artists before purchasing their work.
My qualifications include over four years experience as a music buyer and assistant manager at both Replay Records (previously in Northbrook) and Wagonhouse Records in Bloomington, Illinois. During my tenure at Wagonhouse Records, as the buyer for alternative import and independent music, I more than doubled sales from this department in less than two years. I achieved this by getting to know the market very well, catering to my customers' needs and pricing accordingly.
The funds I wish to borrow will be allocated to procure my initial inventory as well as equipment, fixtures, lease arrangements, advertising, and working capital as indicated in this proposal. I hope to open my store by May 1, 1997. I am committed both to serving the alternative music buying customers of Northbrook and beyond, and meeting my personal financial and career goals.
Many music consumers enjoy purchasing for collectability along with their passion for the music. I am one of these people. Many people have a hard time finding the things they want at existing chain and mall record stores. One major reason for this is that many record stores do not take the time to teach their employees to research the specialized nature of the market. These customers are also looking for convenience of location and fair market prices. Also, these people enjoy talking to someone who is knowledgeable, interested in the same types of music they want, and in what the store carries in general. In many cases, people will come from many miles away because there are few stores offering the same specific goods.
Hidden Treasure Records will be a retail music shop designed to serve the increasing number of consumers interested in import and independent music products. The store will buy music and accessories from a variety of distributors that provide good quality and dependable service along with fair return policies. Hidden Treasure Records will resell them "as is" to our target market. Hidden Treasure Records will specialize in new records and compact discs that are current, and some that are hard to find at existing music stores. The store will only carry a limited amount of used records and compact discs. We will carry accessories like stickers and blank audio cassettes.
Hidden Treasure Records will advertise occasionally in the regional weekly and monthly publications. These newspapers will be widely distributed, and cover an expansive and diverse reading audience. Hidden Treasure will advertise sale items, as well as promote specialized items, so as to broaden our customer base. We will rely heavily on walk-in and drive-by traffic as opposed to relying on advertising. Hidden Treasure Records will schedule occasional in-store appearances, along with promotions and giveaways as marketing devices.
Hidden Treasure Records will offer a relaxed atmosphere with personalized attention, and listening stations for compact discs along with a record player behind the counter so potential customers can listen before purchasing. Our store will be decorated in a simple, comfortable style, with chairs to sit in while reading a magazine or listening to a compact disc. Hidden Treasure's future employees will be knowledgeable about music in general, but even more so about the specific nature of what we carry. Hidden Treasure Records will be located in approximately 1,000-1,500 square feet in the downtown Northbrook district. The store will maintain regular hours of Monday through Saturday from 10:00 a.m. to 8:00 p.m., with the possibility of staying open later Thursday, Friday, Saturday night, and Sunday from 11:00 a.m. to 6:00 p.m. This location and these hours will be convenient to our customer base. Hidden Treasure Records will offer the opportunity for customers to special-order specific items if they are not in stock. Our store will also have a fax machine available to send and receive orders. We will also have a personal computer to offer goods through the Internet and, more specifically, the Hidden Treasure Records official web site where everything we have in stock will be posted and available for purchase by mail order. We expect it will take a little longer to generate sales through this method, as it will take longer to set up than the general store. Hidden Treasure Records will offer mail order service via UPS throughout the United States, and the world, for both computer and non-computer generated sales.
Owner, Hidden Treasure Records L.C., Northbrook, IL (1997)
Assistant Manager, Replay Records, Northbrook, IL (1996-1997)
Assistant Manager of independently owned record store with modest sales and absentee owner.
Import/Independent Music Buyer, Wagonhouse Records, Bloomington, IL (1992-1996)
Worked for chain retail record store with high-volume sales. Developed a comprehensive knowledge of import and independent music as buyer.
Assistant Manager, Wagonhouse Records, Bloomington, IL (1993)
Managed high volume sales store when other managers were absent.
Bachelor of Arts degree, Business Administration, University of Illinois, 1996
Mike is 21 years of age with some college education. He is a cultured student, but works too, so he has plenty of money for entertainment: particularly music, books, movies, and shows. Mike is an intelligent, open minded, and unique individual, not your ordinary Top 40 radio music purchaser. Primarily, Mike spends most of his free time listening to music and reading magazines to keep updated on the music he enjoys. Although music is a hobby for Mike, it is something he takes very seriously. He collects rarities not only for listening pleasure, but also for their collectability and will search everywhere to find exactly what he wants. Mike likes going to shows frequently, and the best way for him to find out about them is to pick up the local alternative newspaper or visit a record store that posts fliers for upcoming music events. Mike also likes to give his business to independently owned stores whenever possible due to the comfortable, personalized shopping experience. Occasionally, Mike logs on to a friend's or the school's computer to search the Internet for other specialty shops carrying the items he is interested in.
—Advertising in weekly newspapers
—Create mailing list for upcoming in-store appearances and periodic sales
—Enter notices in computer networks —Place announcements in weekly newspapers
—Possible free promotion in form of an article in the local daily paper
|—Flyer-full page and quarter page to scatter throughout key metro areas||$150|
|—Advertisement in weekly newspapers||$250-$500ea|
|—Grand Opening publicity from the Chicago Chamber of Commerce||$195|
|—Regular newsletters to mailing list detailing new release listening parties, sale items, and upcoming in-store appearances||$50|
|—Advertising in weekly newspapers every other month or less||$175|
|TOTAL||$225 and up|
The northern Chicago area has four active record stores that will compete with Hidden Treasure Records.
|Less COS 65%||-7,553||-8,632||-11,869||-11,330||-12,948||-11,330||-12,948|
|Gross profit 35%||4,067||4,648||6,391||6,100||6,972||6,100||6,972|
|Marketing & Advertising||250||250||250||250||250||250||250|
|Less: Total Fixed Exp||4,613||4,613||4,613||4,613||4,613||4,613||4,613|
|Dec||Jan||Feb||March||April||Year Total||As a %|
|Inflation 2.8% added to each figure from year 1.|
|Less COS 65%||-14,407||-13,782||-13,155||-12,530||-13,155||-12,530||-13,782|
|Gross profit 35%||7,759||7,421||7,084||6,745||7,084||6,745||7,421|
|Marketing & Advertising||205||205||205||205||205||205||205|
|Less: Total Fixed Exp||5,389||5,389||5,389||5,389||5,389||5,389||5,389|
|Dec||Jan||Feb||March||April||Year Total||As a %|
|Inflation 2.8% added to each figure from year 2.|
|Less COS 65%||-16,330||-15,620||-14,909||-14,199||-14,909||-14,199||-15,620|
|Gross profit 35%||8,792||8,410||8,028||7,646||8,028||7,646||8,410|
|Marketing & Advertising||180||180||180||180||180||180||180|
|Less: Total Fixed Exp||6,116||6,116||6,116||6,116||6,116||6,116||6,116|
|Dec||Jan||Feb||March||April||Year Total||As a %|
This is a list of all the necessary expenses for opening and operating Hidden Treasure Records L.C.
|Computer and Printer||3,200|
|Fixtures and Counter||3,500|
|City Permits and Fees||250|
Other capital items, such as furniture and the fax machine, have already been paid for.
There are two conflicting trends affecting my business. First, more consumers are purchasing through the Internet. However, there is still a percentage of the population without access to this technology. They prefer to personally visit stores and shop. Hidden Treasure Records L.C. will accommodate both types of consumers by having a retail store and a web site.
Second, large media and bookstores carry a wide selection of music. As a result, Hidden Treasure Records will concentrate heavily on the latest trends in music and the more obscure items not likely to be found in the larger stores.
Like every new business, Hidden Treasure Records L.C. faces risks. I believe I can overcome each risk with the actions discussed below, and Hidden Treasure can thrive for many years.
Here are the major risks I anticipate and how I plan to deal with them:
In short, I believe that I have addressed the major risks facing my business and have demonstrated that those risks are manageable.
I want to accomplish a number of goals by starting Hidden Treasure Records. I want to prove that I can operate a successful and worthwhile business by drawing on my educational background and experience. I feel that choosing and selling alternative music at a fair price will be an honest service to my customers and the community in general. I want to spend my time working with customers and people in the music industry who share my values.
Finally, I want the chance to make a better living than I can make by working for others, along with the responsibility and freedom to be my own boss.n