05 Mar Promotional Products Maker Business Plan

Introduction

There is a market in the advertising specialty sector for velour & leatherette drawstring bags, eyeglass bag, jewelry bags, pen bags and pen bags that can hold promotional products to increase their perceived worth. Elsewares Promotional Products & Packaging (EPPP) has been established to supply these logo imprinted products to advertising specialty distributors who, in turn, market these products to the end user.

The products

Elsewares is developing a collection of unique products, as well as drawstring packaging products, that will increase the perceived value of these products. These products, which come from Mexico, the Far East and other countries, will be imprinted with company logos in-house before being shipped to distributors.

Elsewares joins the Advertising Specialties Institute trade association to gain print and electronic access. Elsewares is part of $7 billion-a-year industry, with 13,000 to 14,000 ASI listed advertising specialty distributors. This number is only second to TV and newsprint for advertising dollars. Elsewares will market their products exclusively through these distributors and will not sell directly to end users. Elsewares aims to reach distributors by placing advertisements in trade publications and using an in-house marketing team and a network with salaried, commission-based sales representatives.

We will also be promoting these unique packaging products concurrently with our marketing campaign. This gives us three sales opportunities: The sale of the promotional item by itself, the sale to distributors of other packaging products, and the combination of our promotional product with packaging.

The Market

Sales in the advertising specialties industry have been growing at a rate of almost 7% per year for the past decade and reached over $7 billion in sales last year. This is a mature market that is overcrowded with distributors and suppliers. The industry’s three largest suppliers of velour and leatherette drawstring bag products combined made $2,500,000. These three suppliers are located along the East Coast. The Midwest and West Coast have the largest number of advertising specialty distributors. We believe that by focusing on marketing to West Coast distributors, which have many positive business relations with our personnel, we can gain significant market share for the packaging niche in the next three-years.

Considerations for Financial Planning

Our initial startup costs will go towards purchasing inventory, office equipment, imprinting machinery, and some of the overhead. The balance will be used for catalog costs and initial advertising expenses. For the first 12 months, we expect additional financial commitments to finance receivables as well as payroll expenses.

Elsewares intends to concentrate its sales force in the western United States and to reach a respectable sales level by the end of Year 2. With our per-month fixed costs estimate, and projected monthly unit sales, we can expect to hit a monthly breakeven point by the fourth month.

Elsewares seeks a financial package that is based on a five-year note amortized over fifteen years. The founder will personally guarantee this note. By amortizing the note over 15 years, the company will be afforded the opportunity to establish a healthy track record which will enable the company to seek alternate financing for the balance. The owners of Elsewares don’t intend to take any profits from the company until the long-term debt is paid off. Any profits that remain after paying the debts will be used to finance future growth, principally through the acquisition and sale of inventory.

1.1 Objectives

Presently, the three leading suppliers of imprinted pouches to advertising specialty distributors are located on the East Coast and are doing a combined $2,500,000 solely in the sales of pouches. Elsewares plans on concentrating its sales force to the west and to reach a respectable sale level by the year’s end. Elsewares wants to factor our growth and diversify into unique promotional product offerings. These products will be attractive as advertising specialty items or packaged with a drawstring pouch. We can also provide these.

1.2 Mission

Elsewares plans to create a range of unique products and drawstring packaging that adds value to these products. These products, which will be sourced from Mexico and the Far East, will be imprinted in-house with various company logos before they are shipped to the distributors.

Elsewares joining the Advertising Specialties Institute trade organization will give them print and electronic acces to a network (13,000 to 14,000 ASI)-listed advertising specialty distributors. This is part a $7 billion industry. This number is only second to TV and newsprint for advertising dollars. Elsewares’ products will be sold only through these distributors. Elsewares will market their products exclusively through these distributors via advertisements in trade magazines, an in-house sales force and a network consisting of salaried or commission-based sales reps.

Success Keys 1.3

Management at Elsewares believe that they have the right products with the right people to build a loyal customer base. But most importantly, it is our business philosophy that will ensure success. Advertising specialty industries demand that products are delivered on time and with high-quality imprinting. These demands are being met

Elsewares will fulfill this demand by maintaining adequate inventory levels and delivering on time, according to pre-arranged delivery schedules.

Elsewares is going to establish a quality assurance procedure to control the imprinting process on-site. This will ensure that imprint quality is acceptable.

Elsewares, in addition to offering a complete line velour packaging materials, will also offer a unique range of promotional products. This will encourage advertising specialist distributors to think of Elsewares when searching for original products.