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1.0 Executive Summary
This business will showcase the continued development and expansion of a pack and ship store based in Lexington, Kentucky. Pack and Ship Store, LLC (“the Company”) was founded by Seth Hogan. The business will operate as an authorized location for numerous major package carriers including FedEx, UPS, and DHL. The business will also provide services that use the United States Postal Service. In addition to these operations, the business will provide a host of business support services (including notary services).
1.1 The Services
The first revenue center for Pack and Ship Store comes from the ongoing shipping of packages through multiple carriers. The Company will provide packaging as well. Packaging services will provide substantial gross profits for the business. The ability to send packages will be the principal method for driving traffic to the location.
In regards to business support services, the Company will have numerous mailboxes available for rent. Unlike PO boxes, the Company’s private mailboxes can accept packages and parcels from all service providers. The Company will generate highly recurring streams of revenue from the ongoing monthly rental of these units. The business will also produce income from printing services, notary services, and related services.
The third section of this document will further document the services offered by Pack and Ship Store.
1.2 Financing
At this time, the Company is seeking $165,000 in order to establish the operations of the store in Lexington. This business plan assumes that the Company will receive a 7 year loan carrying an 8.25% interest rate. The funds will be primarily used for:
• Storefront development in Lexington
• Packaging equipment and general FF&E
• Initial marketing
• General working capital
Pack and ship stores are highly stable businesses, and the Company could acquire ongoing rounds of capital in the event that new locations are developed. Given the recurring income from mailbox rentals, the Company could acquire a working capital line of credit to finance ongoing expansion as well.
1.3 Mission Statement
Pack and Ship Store’s mission is to provide convenient access to package services while providing a wide range of cost-effective business solutions for small businesses in the Lexington market.
1.4 Management Team
Seth Hogan is a highly experienced entrepreneur with extensive expertise in operating retail enterprises. He will be able to create significant awareness for Pack and Ship Store within the Lexington market while concurrently bringing the business to substantial profitability.
1.5 Sales Forecasts
1.6 Expansion Plan
Once the business reaches its maximum capacity, Management may develop additional locations within the greater Lexington market area or viable markets in Kentucky. Management may also acquire existing pack and ship stores that could be integrated into the Company’s operations after they are rebranded under the business’ name.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Pack and Ship Store, LLC. The business will be registered as a limited liability company in the Commonwealth and Kentucky.
2.2 Required Funds
Seth Hogan will source a $165,000 SBA loan to establish the operations of Pack and Ship Store in Lexington. He will contribute $35,000 towards the venture. The funds are to be used as follows:
2.3 Management Equity
Seth Hogan retains a 100% ownership and serves as the sole member of Pack and Ship Store, LLC. In the future, an investor may be sought if the business develops multiple locations throughout Kentucky.
2.4 Exit Strategy
Given the highly predictable come from shipping services and recurring income from business services, Pack and Ship Store could receive a sales premium of up to three times the previous year’s earnings. Management would hire a qualified business broker in order to divest the business to a third party. This event is not expected to occur for a substantial period of time.
3.0 Operations
As discussed in the executive summary, Pack and Ship Store, LLC will provide the Lexington general public with a wide range of shipping and business services. The Company is in the process of becoming an authorized representative to provide shipping and freight services through UPS, FedEx, and DHL. The business will also accept packages for USPS, which will be delivered to the nearest post office on a daily basis. On each package, Management anticipates gross profits of 15%. The Company, through these operations, will earn substantial gross profits from packaging boxes. The Company will also receive income each time a customer drops off a package at the location (for UPS, FedEx, and DHL).
The Company’s second and most profitable revenue center will come from business services. The business, for small businesses that want to maintain their address at the Pack and Ship Store location, will provide mailboxes for rent. Individuals will be free to rent these boxes as well. The Company will charge $50 per month, and customers can receive packages at the location.
The business will also provide printing services, notary services, and basic graphic design. These small businesses services will find immense demand among customers within Lexington.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Pack and ship stores are economically stable businesses. Regardless of how the economy is doing, people will continue to need to send packages, receive packages, and have specialized business needs fulfilled. As discussed earlier, the business will generate highly recurring income from its mailbox rentals that will support a majority of the Company’s facility costs.
At this time, the economy is doing well. Interest rates as well as the rate of inflation have declined and the economy continues to grow. Unemployment rates continue to remain very low. Given these facts, the economy is poised for significant growth over the next three years.
4.2 Industry Analysis
Nationally, there are 20,000 pack and ship stores within the country. These businesses collectively generate $9 billion per annum while providing jobs for 50,000 people.
This industry will continue undergo moderate changes over the next ten years. As more people use major ecommerce platforms, the demand for locations that can accept returns will continue to expand. Other than that matter, this is a mature industry. The future growth rate will be similar to that of the economy.
4.3 Customer Profile
Pack and Ship Store, LLC will implement the following demographic profile when marketing the Lexington location:
• Annual household income ranging from $65,000 to $100,000
• Lives within a seven mile radius of the Lexington location
• Will spend $20 to $100 per visit to the location on shipping and packaging
• Will spend $50 to $100 per month on business services
Management has selected the Lexington market given the size of the population, home to numerous technology enterprises, and the large number of independent entrepreneurs that operate in this market. Given these factors, this will contribute to Pack and Ship Store remaining profitable at all times.
4.4 Competition
The business will face ongoing competition from franchised locations that provide similar services. However, the business will maintain a strong differentiating factor in that the business will be able to provide services among all major carriers as well as USPS. This will allow the Company to remain pricing competitive. Additionally, the Company’s host of business services (including notary services) will further create a competitive advantage for the business.
5.0 Marketing Plan
Pack and Ship Store, LLC will use multiple traditional and online marketing strategies that will create immense traffic for the business. The Company is in the process of working with a commercial real estate brokerage to find a high visibility location within a strip mall facility. The location will feature substantial exterior signage.
5.1 Marketing Objectives
• Distributed flyers and printed advertisements at the onset of operations to create brand name awareness for Pack and Ship Store.
• Maintain an expansive online presence that includes both a proprietary website as well as a presence on social media.
• Advertise the Company’s services among regional Chambers of Commerce and small business associations.
5.2 Marketing Strategies
As mentioned above, the business will maintain a highly visible retail location in Lexington. This location will be near a supermarket, and it will be seen by thousands of people on a daily basis. The exterior signage of Pack and Ship Store will showcase all of the shipping, packing, and business services offered. The business will heavily advertise its notary services as this is expected to drive significant daily traffic to the business.
The business, throughout the life of the Company, will advertise among small business publications including Chambers of Commerce periodicals. Management will also market the Company’s services to regional attorneys and CPAs that have a number of small business clients.
As it relates to the Company’s website, this platform will showcase the carriers that are used when shipping merchandise, information about business services, hours of operation, and general information about the Pack and Ship Store location. This website will undergo search engine optimization in tandem with a local/regional web development firm.
To further create brand name visibility, the business will use targeted advertisements on both Facebook and LinkedIn. On LinkedIn, the business will target individuals that indicate that they are a small business owner in the Lexington market. On Facebook, the business will focus on people that have recently indicated that have started or are about to start a business.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Pack and Ship Store, LLC will acquire a $165,000 SBA loan.
• Seth Hogan will invest $35,000 as equity.
• The Company will have a compounded annual growth rate of 14%.
• Recurring income from mailbox rentals will support the underlying costs of the business.
• High margins generated from shipping packages, packaging, notary, and printing services.
7.2 Sensitivity Analysis
The Company’s revenues are relatively immune from negative changes in the economy. People and businesses will continue to need shipping services. As ecommerce has become ubiquitous, people frequently need to conduct returns. The business’ ability to generate recurring income from mailbox rentals will further contribute to the economic stability.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
