So last week, with a big push at the end, I finished the business plan for MusicStorm.
Here’s a snippet from the executive summary:
Have you ever wished you could go into the perfect music store? MusicStorm is not a one stop super shop that carries everything under the sun, but a warm and personable place where you can get great advice and local color.
Looking for a music store that has real flavor to it? Someplace here in Peoria where you’re certain to find music from local musicians and bands you heard playing at the Open Mic night at the Red Barn or LnB on Main? A place where you can find a lot of unique accessories you may not even know existed? Someplace you can have an iced tea or cup of coffee and sit and shoot the breeze with the guitarist from the local band 3 Jack Voodoo? A place where you could relax while your twin boys are having simultaneous lessons on the bass guitar and the bassoon? Someplace close to shops and studios displaying the artwork of local painters, cartoonists, glassblowers and potters?
Have we got a store for you!
MusicStorm is exactly that place to go.
The good news is that it’s done. The better news is that, assuming the numbers we put together are anywhere near accurate, it makes money. Even with a paid staff (we’d plan to work for free while the business was built but I didn’t think that was how I should turn it in).
Don’t get me wrong: there’s a bunch of startup capital needed and in year one we’d lose a bunch of money. But year two turns a profit. Not enough to have to pay taxes with the carried over loss, but enough to plan to pay out a 10% dividend to the investors.
Breakeven point is an estimated 9% of the local market for musical instrument retail sales. I think with a unique model such as this that by year two picking up 10% market share is a doable goal. Critical success factors? We think that there are three:
- Personnel (recruiting staff and teachers)
- Store Layout
I may have more to say about the business plan later. It wasn’t my best work, but it got turned in, and the financial statements balance. It was a worthwhile assignment, and my family will have a beginning, bare-bones business plan to start from when we have the bandwidth to seriously consider this as an option. There were fun parts to it, but at the end I really just wanted it to be done. I was able to confirm (at least for myself) that operating debt free made good business sense and that it allows the plan to be more flexible, which for a startup is important.
(Logo above drafted by Toby)