Business Plan: Dallas Music Store

Name

Institution Affiliation

1.0  Executive Summary

1.1 General Overview

Dallas Music Store is an exceptional retail business that will be established in the music affectionate city of PPP located in Arizona. The music store looks forward to taking advantage of the enthusiasm for music by coming up with a community place that will attract music connoisseurs who will come together to share a lot in regard to music. My goal is to set up a place that will stand out and be able to attract music lovers far and wide. I am currently handling the final stages of establishing the sole proprietorship and expect to be given the green light by the relevant authorities in less than 10 days. I am also working round the clock to attain the lease agreement for the physical location of the store in the city of PPP, the store will cover 2200 ft. Dallas Music Store is a sole proprietorship type of ownership.

1.2 Business Model

My business model is based on taking full advantage of the contemporary nature of the music industry. The business will be fed by revenue from two different revenue streams. That includes 1) Sales of music instruments as well as rental and 2) Facility rental in order to facilitate music lessons, production, and recording. The sale of music instruments will be the main revenue source of the business and also act as a front to market the business to new customers in the music industry. I estimate the overall margin of operation to be at 10% during the first year with the room for improvement to 20% in the subsequent period of four years prompted by the increase in sales, thus allowing me to maximize on the economies of scale.

1.3 Market Analysis

The music instruments demand is growing in leaps and bounds thus being a large segment in any music business. According to the National Association of Music Merchants (2007), United States of America recorded £7 billion in music instruments sales. In the past few years, this industry has appreciated by a total of over 15%. To further add on that, the rental demand of music instruments has appreciating with more schools incorporating music lessons in their curriculum, this has, therefore, fueled the need for music instruments.  The city of ZZZ, has an estimated population of 200,000, with 70,000 being households and over 24,000 families taking residence in the city that’s according to the Census Bureau. The households enjoy a median income that ranges between £40,000 and £50,000. On the other hand, the families enjoy a median income of over £70,000. AAA Metropolitan has other areas apart from ZZZ; they include Wayne, St. Clair among others.

1.4 Financial Projections

My research and estimation show that it's possible for the primary sales to increase from £19,000 in the first month to £28,000 in the subsequent months. My operational profit proceeds will increase from £40,000 in the first month to £90,000 in the subsequent months. I anticipate expanding the sales to £65,960 in year 5 from £42,400 in year 1. I plan to have a constant and positive cash flow:...