You are on page 1of 68

Sample business plan–

Housing Works Used Book Cafe

A Business Plan
For
HOUSING WORKS USED BOOK CAFE

Charles King
Co-Executive Director
Housing Works, Inc.
594 Broadway, Suite 700
New York, N.Y. 10012
(212) 966-0466
Fax (212) 966-0869

65
Sample business plan

Table of Contents

About Housing Works

Executive Summary

Management and Organization Plan

Product/Service Plan

Marketing Plan

Financial Plan

Appendixes
Appendix A - Board of Directors
Appendix B - Store Manager Resume
Appendix C - Market Area Demographics

67
Sample business plan

ABOUT HOUSING WORKS

Housing Works is a minority-controlled, community-based organization that provides housing,


supportive services and advocacy to homeless men, women and children with AIDS and HIV-
related illness with the goal of helping them stabilize their lives and regain their places in the com-
munity. The agency offers the following direct services:

• placing clients in safe, permanent housing;

• offering preventive health education and strategies based on the Harm Reduction model, which
stresses readiness for recovery;

• providing counseling, job training, and other supportive services designed to increase clients’
capacity to handle stress and cope with daily challenges; and

• advocating on behalf of clients and their rights.

Founded in 1990, Housing Works is now the largest provider of housing and supportive services in
New York City. Since the opening of the first client service office in 1991, housing has been ob-
tained for m ore than 500 people, and other services provided to an additional 1,000 clients who
were awaiting permanent housing placement. Housing Works now serves as a national model for
dealing with the twin crises of AIDS and homelessness, one that is already being replicated in other
cities.

Housing Works is a minority-controlled membership corporation. Seven places on the 16-member


Board of Directors are reserved for Housing Works clients. As a matter of policy, the Board, staff
and volunteers are fully integrated by race, gender and sexual orientation. The Honorable Dennis de
Leon, former Chair of the New York City Commission on Human Rights, chairs the Boar d.

Core client services

Housing Works’ experience has shown that appropriate, supportive housing is an essential require-
ment for helping people living with AIDS and HIV meet their health care and social service needs.
When housing is supplemented with case management, dose medical monitoring, mental health and
other services, most people living with AIDS and HIV can be assisted to live independently in the
community. In so doing, they regain control over their lives. To assist this population, Housing
Works provides the following core client services:

Intake Services The Intake Program provides initial screening and evaluation for people with
AIDS and HIV who are homeless or at risk of homelessness; determines eligibility for housing and
other entitlements and assists clients in securing them; and provides emergency relief. The Intake
Program has worked with over 2,300 households, including more than 3,100 individuals.

69
The Nonprofit Entrepreneur’s Handbook

Supportive Housing Housing Works has two core housing programs which currently manage
approximately 375 apartments:

• The Scattered-Site Housing Program provides housing and intensive supportive services to
persons and families with AIDS (as defined by the federal Centers for Disease Control) who also
experience chronic mental illness and/or chemical dependence. Housing Works has placed more
than 200 people through this program—47% men, 21% women and 32% children. There is also a
40-unit scattered-site housing program specifically designed for people dually infected with HIV
and TB.

• The Independent Living Program (ILP) provides an identical range of services to people with
HIV-related illnesses that do not meet the CDC criteria for AIDS. This program serves a particularly
high percentage of women, because many HIV-related illnesses experienced by women are not
currently recognized by the CDC as part of the AIDS syndrome. To date, Housing Works has
placed some 200 people in ILP apartments, of whom 25% are men, 37% women and 38% children.

Supportive Services As clients are rehoused, they often seek additional services to assist them in
addressing issues that may have led to their homelessness. Housing Works now offers such services as:

• the Harm Reduction Center, which provides needle exchange, risk reduction and treatment
readiness counseling, and treatment placement for chemically-dependent people with AIDS and
HIV and their families;

• the Mental Health Program, which provides mental health services assessment and placement;
which provides mental health assessment, treatment, and referral to Housing Works clients through a
formal linkage to the New York State Psychiatric Institute Washington Heights Community Service.
This recent affiliation, as well as the addition of a psychiatrist, two full-time mental health nurses and
a social worker to the Housing Works staff, has enabled our program to identify a wide spectrum of
mental health needs. Mental illness, which can interfere with stable housing, is now carefully identi-
fied at Housing Works; medication treatment and group therapy are provided on site, and referrals to
public and private mental health agencies are provided as appropriate. Housing Works will provid-
ing a wider spectrum of mental health services on-site when its Article 31 license application is
approved.

• the Job training Program, which offers clients the opportunity to develop work readiness skills
for such positions as peer counselor, peer group leader, receptionist, office assistant, typist, data entry
person, janitor, maintenance and warehouse assistant.

• the Group Support Services Program, which offers twelve different task-oriented support groups
(e.g., Nutritional Support, Women’s Support, Parents’ Support, and the 10% Group for gay men)
and

• a new comprehensive TB Services Program for the 25% of clients who are dually infected with
HIV and TB.

70
Sample business plan

Housing Works also maintains formal linkage agreements with over 40 other service providers in
New York City for a broad range of additional services.

Advocacy and Public Policy Through the Advocacy & Public Policy Program, Housing Works
advocates on behalf of individual clients and works for the systemic changes necessary to make
decent housing a reality for all homeless persons living with AIDS and HIV. Housing Work staff
attorneys are currently litigating two cases involving homelessness and AIDS and are actively
involved in the development of government policies and legislation.

Clients also receive assistance with personal legal needs, including advice or counsel; settlement
negotiation; and representation in administrative hearings or court proceedings.

71
Sample business plan

Executive Summary

In October 1995, Housing Works, Inc. (HW) will open the Housing Works Used Book Cafe at
128 Crosby Street, in the picturesque SoHo/Cast Iron Historic District designated by the New York
City Landmarks Preservation Commission in 1972.

The 3,400 square foot space with a 2,800 square foot selling area has been designed to create
an environment where bibliophiles can relax in cozy, upholstered seating areas under a soaring
ceiling bordered by a catwalk filled with donated books, Corinthian columns, and a coffee bar of
time-honored millwork. The customers will find the majority of the books favorably priced even
when compared to books sold at discount in Manhattan’s superstars. Customers will be able to read
and peruse the store’s collection of books and savor the aromas of freshly-brewed coffee while
enjoying flavorful, premium coffee, specialty coffee drinks, and fresh squeezed juices. During
morning hours the store will offer a wide assortment of delectable baked goods, including fresh
muffins, croissants, and scones. After twelve noon the store will sell gourmet sandwiches, bottled
soft drinks, homemade soups, salads, and desserts. Baked goods and other food items will be
purchased from suppliers as there will be no food prepared on the premises. The Housing Works
Used Book Cafe will offer its food and beverages at prices slightly lower than competing coffee
bars in order to become the cafe of choice for local residents. Customers will also be able to pur-
chase pillows, rugs, and other hand made items produced by the Housing Works Weaving Project,
and gift items such as coffee mugs with the Housing Works logo.

Housing Works selected a comfortable bookstore cafe as a business venture in order to utilize
lessons learned during the successful development of the two thriving Housing Works Thrift Shops.
Most of the store’s walls will be dedicated to two tiers of shelving displaying donated books for sale.
As the thrift stores are already receiving books among the items being donated, a substantial amount
of the inventory is at hand. It is the judgement of this venture’s planners that used books will sell
better in a cafe atmosphere than in the thrift shops where customers are more likely to be interested
in purchasing clothing and furniture.

Market research indicates rising demand for high quality coffees. Until recently coffee bars
were a rarity in New York City, but dozens have opened in Manhattan in the last two years, a
continuing trend. The recent proliferation of coffee bars includes many small stores which provide
little customer seating.

Housing Works Used Book Cafe will provide seating for up to forty-five customers in one of
the most popular neighborhoods among both residents and visitors to New York City. The SoHo/
Cast Iron Historic District affords the area as much protection of its character as can he expected in

73
The Nonprofit Entrepreneur’s Handbook

the Borough of Manhattan. The area is home to many of the country’s most distinguished artists and
craftspeople. Data on the total number of visitors to SoHo is not available. However, of the 497
commercial art galleries located in New York City and the metropolitan region, 53% are in SoHo.
Additionally, more than 188 eating and drinking establishments, 101 retail apparel stores, over 50
miscellaneous retail businesses (including specialty arts and crafts shops, food merchandise markets,
book shops, and jewelry stores), 30 antique shops, 17 home and office furniture stores, and five
museums are located in SoHo.

The cafe portion of the store will be operated as a for-profit subsidiary of Housing Works Thrift
Shop, Inc., a not-for-profit corporation. The used bookstore portion of the store will be operated as
part of the not-for-profit corporation as it will sell only donated items. The store will create employ-
ment opportunities for Housing Works’ clients, while generating operating profits to be reinvested in
Housing Works’s job training and employment program.

On-site management of the store will be the responsibility of the store’s two salaried employ-
ees, the Store Manager and the Assistant Manager. With eight years experience directing and manag-
ing bookstores, Keith Limitone will serve as the Store Manager. The requirements for the Assistant
Manager position include experience in retail operations, selection taking place after a search and
interview period. At least five personnel will be paid hourly wages and drawn from Housing Works’
client list. Oversight of management will be the responsibility of Housing Works’s Co-Executive
Director, and the subsidiary corporation’s Board of Directors. Management will benefit from the
advice and support of an Advisory Board made up of innovative business leaders, professionals
from the financial sector, business people from the community, and a major gallery owner.

The business will require $307,000 in financing to bring it to the point of active trade. Housing
Works seeks to obtain $150,000 of this amount through debt financing from a bank in the form of a
term loan. The bank can be provided a guarantee of 50% of the loan by a New York City-based
foundation. It may also be possible to obtain a guarantee from the U.S. Small Business Administra-
tion. The major costs include an estimated $179,000 for leasehold improvements, $33,000 for
equipment, $8,000 for furniture and fixtures, $24,000 in working capital, $10,000 in pre-opening
expenses, and $18,000 in opening inventory.

74
Sample business plan

Management and Organization Plan

Management

The day to day management of the store will be the responsibility of the Store Manager, Keith
Limitone. Mr. Limitone has eight years experience directing and managing several bookstores,
including Golden Books Showcase store and Doubleday Book Shops. His past responsibilities have
included the hiring, training, and supervision of store employees, the maintenance of inventory, the
setting and attainment of sales goals, and the control of operating expenses. He will receive a start-
ing annual salary of $40,000 and the Assistant Manager will receive a starting salary of $30,000.
Other than those required by law, fringe benefits equal to 14% of the managers’ salaries will be part
of their compensation. The Assistant Manager will be expected to have retail management experi-
ence and preferably experience in human services as well. Selection will take place after a search
and applicant interview process.

The Store Manager responsibilities will include supervision of employees, scheduling em-
ployee shifts, inventory control and ordering, financial reporting, bookkeeping, marketing initiatives,
advertising, and working closely with Housing Works to integrate operations into the overall pro-
gram at Housing Works, Inc. The Assistant Manager will be responsible for coverage of these
management responsibilities during all hours of operation for which the Store Manager will not be
present. An experienced coffee bar operator will provide consultative assistance in building the store
and will provide significant training time to store managers and other staff. (See Appendix B - Store
Manager Resume.)

The Store Manager and Assistant Manager will report to Housing Works’s Co-Executive
Director and the Board of Directors (See Appendix A). Management will benefit from the oversight
and advice of the corporation’s Board of Directors and an Advisory Board, which will include
innovative business leaders, professionals from the financial sector, business people from the com-
munity, and a major gallery owner.

The managers will enjoy opportunities for additional earnings through a bonus incentive
program. Management bonuses equal to 1% of sales will be available for rewarding outstanding
work provided targets are met for specific monthly goals within the following categories: gross
margin, wage costs as a percentage of gross sales, store cleanliness and organization, inventory
turnover rate, and product presentation.

75
The Nonprofit Entrepreneur’s Handbook

Non-Managerial Personnel

Additional personnel will include a Senior Clerk who will paid an annual salary of $18,000.
The remaining employees will be paid an average hourly wage of $6.00 per hour. In Year 1 the cafe
will employ two of these employees full-time (40 hours per week) and three more employees part-
time (20 hours per week). In Year 2 an additional full-time employee will be added. The experience
requirement for these employees will be minimal, though they will be selected for their aptitude for
serving patrons in a friendly and efficient manner and maintaining a casual but neat appearance.

Some employees will be drawn from Housing Works extensive client list of people living with
HIV and AIDS and participating in Housing Works Job Training Program. During peak hours of
business as many as four such employees will be working. Shifts will range in length from four to
eight hours. Housing works will have the flexibility to incorporate shifts as short as two hours with
longer shifts. This will enable the store to utilize additional staff for peak periods. Another advantage
of this variance in shift length is that new employees from Housing Works’s Job Training program
will be able to start with shorter shifts and work up to longer ones as their skills and concentration
levels increase. Housing Works will also be able to draw from a large pool of volunteers when
efforts beyond the staffing described above is necessary.

Employee Training

Non-managerial employees will receive on-site training from store management. Some initial
employee training will be provided by the Housing Works Job Training Program which offers
clients the opportunity to develop work readiness skills for such positions as janitor, maintenance
and warehouse assistant. The program has been successfully providing workers to the Housing
Works Thrift shops since the Summer of 1992. Their experience in the new business will add
significantly to their employability in local food and retail businesses.

Hours of Operation

The store’s hours of operation will be from 100.00 A.M. to 8:00 P.M. daily, Monday through
Thursday. On Friday and Saturday nights the store will remain open until 10:00 P.M., and on
Sunday evenings it will close at 6:00 P.M. Peak times are anticipated to be 10:00 A.M. to 11:00
A.M. for morning commuters, noon to 2:00 P.M. for local business lunch crowds, and 6:00 P.M. to
8:00 P.M. for local residents and those visiting SoHo’s numerous cultural attractions.

76
Sample business plan

Leasing Arrangement

The 3,417 square foot ground floor space has been leased through an amendment to the Hous-
ing Works, Inc. lease for 594 Broadway, the building in which 128 Crosby Street is located, for
$13.85 per square foot. The lease came with a commitment from the landlord to install the heating,
ventilation and air conditioning system and the public restrooms, significantly lowering the cost of
the leasehold improvements. It also provides the use of the basement and sub-basement. The lease
runs through March 2003, and calls for an annual 4.5% rent increase. Housing Works, Inc. has
provided a two month rent deposit, and will be paying 6% of the rent for the N.Y.C. Commercial
Rent Tax

77
Sample business plan

Product/Service Plan

Purpose of the Product

The most appealing benefit to the customer will be the opportunity to enjoy the unique atmo-
sphere of the Housing Works Used Book Cafe. The store design and layout have been carefully
planned to create the desired atmosphere by the project’s architect, Benjamin D. Kracauer. Mr.
Kracauer was the architect for the successful and handsome designs of the Housing Works Thrift
Shops. The soaring ceiling, large Corinthian support columns, the dramatic presence of the catwalk,
and the upholstered seating areas will encourage lengthy stays and frequent visits to a relaxed,
comfortable, and friendly environment The large selection of used books will include enough
bargains and rare finds to please the most discriminating bibliophile. The business’s food and bever-
age offerings will include a selection of quality baked goods, freshly brewed coffee, specialty coffee
drinks, bottled soft drinks, gourmet sandwiches, and soups and salads that one would expect to find
in a good coffee bar. The one-of-a-kind handmade items produced by the Housing Works Weaving
Project have been test marketed in Housing Works Thrift Shops and proved to be very popular with
the general public at premium prices.

State of Development

The business is currently in the planning stage. The space has been leased, the architectural
drawings have been completed, a talented manager has been hired, equity capital is available, and
suppliers have been identified. Applications for permits have been made, but the permits are not yet
in place. To bring the business to the next stage of development debt financing will need to be
secured.

Government Approvals

To move forward the business will require an approval for the exterior improvements from the
New York City Landmarks Preservation Commission, permits from the N.Y.C. Department of
Buildings and the N.Y.C. Department of Health, a Certificate of Authority and a State Identification
Number from the New York State Department of Taxation and Finance for the collection of sales
tax. All of the licensing, permit, and approval requirements are currently being addressed. The
business is considering the possibility of offering live jazz one night a week. If live music is offered
the store will secure a cabaret license from the N.Y.C. Department of Consumer Affairs.

79
The Nonprofit Entrepreneur’s Handbook

Product Limitations

As the food and beverages served must be of the highest quality, all food items will have a
shelf life of one day. Leftover food will be donated for distribution to New York’s homeless popula-
tion. Coffee will have to be brewed regularly, as its quality diminishes after standing for twenty
minutes. Used books have an interminable shelf life but those that do not sell in a reasonable amount
of time must be replaced with fresh titles. The items produced by the Housing Works Weaving
Project are limited by the production capacity of that operation which is currently being expanded.

Product Liabilities

In order to protect the business from liability the business will obtain general liability insurance
with coverage up to $500,000 at an annual cost of $5,000. Fire & theft insurance will be obtained at
a cost of $1,000 annually.

Production

The used books will be supplied through donations to the Housing Works Thrift Shops which
are already taking place. A mailing to the abundant contributors and supporters of Housing Works
will signal that the organization now has a significant interest in receiving donations of books.
Contributions will also be sought from publishers for whom there is a significant federal tax deduc-
tion. Corporations may deduct the cost of the donated inventory, plus half the difference between
cost and the fair market selling price, up to twice cost.

With the exception of freshly made beverages all other production will be subcontracted. The
preferred and potential suppliers of food and beverages for the business are listed on a chart on the
following page.

Environmental Impact

It will be the policy of the Housing Works Used Book Cafe to impact the surrounding commu-
nity in only positive ways. Indeed it has been a goal of the project from the beginning to enhance the
image of Housing Works, Inc. as a positive force in the neighborhood. The exterior of the store will
be kept neat and attractive, with sidewalks policed of litter. Flower boxes at the entranceway will
enhance the appearance of the storefront. If live music is offered it will be monitored to protect the
rights of the establishment’s neighbors. As the business’s patrons will be well educated, prosperous
adults, the additional pedestrian traffic brought to the street will be welcomed by the cafe’s neigh-
bors.

80
Sample business plan

Food & Beverage Preferred & Potential Suppliers


Section Products

Coffee Kobrich, Orens Daily Roast, Gillies


Coffee Company

Baked Goods Connecticut Muffin Company, Oven Arts,


Donna’s Cookies, Sweet Dreams

Dairy Products Harry Wils & Co., Bartlett Dairy

Paper Goods Bunzl New York, Imperial Paper

Beverages Tri-State Natural

Fruit & Produce City Wide Produce, Prestige Produce

Soups Kettle Cuisine

Sandwiches & Java Works


Salads

Bagels H & H Bagels, Ess A Bagel

81
Sample business plan

Marketing Plan

Industry Profile

Used bookstores and specialized bookstores in general do not tend to be in locations with great
visibility or high pedestrian traffic. The basis of industry competition is the size and quality of the
product mix and competitive pricing. One indication of a general growing interest in book purchas-
ing is the opening of new large bookstores by major chains such as Barnes & Noble, in locations
with high pedestrian traffic where residents tend to be prosperous. Many of the large new book-
stores include coffee bars to encourage lengthy and frequent visits by book buyers. The long term
success of the Strand, the largest and most well known of the city’s used bookstores, would indicate
that a market of sophisticated book buyers has long existed in the New York area.

An American Booksellers Association survey of booksellers was produced in October of 1993.


The survey of their membership pertained to operating results from 1991, and included responses
from 194 independent bookstores. Of the reporting units 177 single independent bookstores reported
average sales of $625,108 achieved in an average selling space of 2,272 square feet for a sales
productivity level of $275 per square foot. The average net profit margin for these stores was 7.98%.
The remaining 17 stores reported average sales of $101,288 achieved in an average selling space of
965 square feet for a sales productivity level of $105 per square foot. The average net profit for
these stores was 3.44%. The inventory turnover rates for these two groups of stores were 3.09 and
2.99 respectively.

Market research indicates rising demand for high quality coffees. Dollar sales of coffee in
supermarkets have experienced a recent year decline of 6%, while coffee drinkers had their highest
level of consumption since 1979 due to the growing trend of consumption outside the home. Manu-
facturer shipments of coffee grinders doubled between 1987 and 1988 and have continued to grow
steadily.

Until recently coffee bars were a rarity in New York City, but dozens have opened in Manhat-
tan in the last two years. Starbucks Coffee, an industry leader, has 270 coffee bars across the coun-
try, opened its New York City flagship store in the Spring of 1994, and has continued to open stores
in numerous Manhattan corner locations. The recent proliferation of coffee bar competitors includes
many stores operating out of mere slivers of real estate, providing little customer seating.

Coffee bars tend to be located in neighborhoods where the profiles of residents indicate eco-
nomic prosperity as measured by median household income. Specific locations are areas of high
pedestrian traffic, often on the corners of busy avenues. The basis of industry competition for

83
The Nonprofit Entrepreneur’s Handbook

gourmet coffee bars centers around product quality, and the two keys to good coffee are quality
beans and skilled preparation. The Gross Margin for coffee bars is about 60%, the percentage used
in this plan’s Financial Projections.

Seasonality

The seasonality of sales was determined through frequent and year round visits to both new
and used bookstores in Manhattan, consideration of the timing of vacations for those employed in
Manhattan businesses, a review of tourism trends, discussions with a nine store chain of coffee bars
in the Northeast, and discussions with the owner of three coffee bars in downtown Manhattan who
also acts as a supplier to other coffee bars.

It was determined that the slowest month would be February, closely followed by January and
August. The busiest month is expected to be December, followed by November. The Cash Flow
Projections included in the Financial Plan to follow reflect these determinations.

Competition

There are five primary competitors in close proximity to the location of the Housing Works
Used Book Cafe.

Starbucks has just opened a large coffee bar at the southeast corner of Crosby and Spring
Streets, about one and one-half blocks from the location of the Housing Works Used Book Cafe
location. The front of the store is currently obscured by a scaffolding protecting sidewalk pedestrians
from ongoing work at the building. What is presently visible of the exterior are large windows
offering street views. The space is about 30' x 60' for a total selling space of 1,800 square feet. The
interior space is a departure from the many Starbucks stores that have been opened in Manhattan.
The walls are painted reddish brown, large paintings hang from the walls, there are six upholstered
chairs at three small tables, and padded window seats.

Cafe Bari is on the northwest comer of Broadway and Spring. Its selling space is approxi-
mately 16' x 50' for a total selling area square footage of about 800 square feet. Its design is typical
of Manhattan coffee bars with its black and white tiled floor, white walls, faux tin ceiling, ceiling
fans, and ceiling-hung light fixtures. Its most striking design feature is the expansive glass windows
which offer broad views of the immediate area. As a decorative touch dried flowers are set about the
seating area. In addition to coffee products and baked goods the product mix includes pre-made

84
Sample business plan

sandwiches, fresh squeezed juices, and other soft drinks. Its pricing of commonly sold items is as
follows:

Small Large
Espresso $1.75 $2.25
Capuccino 2.00 2.70
Regular Coffee .90 1.25
Orange Juice 1.50 2.75
Iced Espresso or Capuccino - $3.00

Hot & Crusty is on the west side of Broadway between Broome and Spring Street. It features a
large selling space. The seating area is about 1,000 square feet and the total area is about 3,000
square feet. Hot & Crusty is a chain of bakeries with numerous Manhattan locations. The product
mix is primarily baked goods with little in the way of specialty coffee drinks. A large iced coffee
sells for $1.25.

Dean & DeLuca, a well known purveyor of gourmet foods, operates a large coffee bar on
Prince Street between Wooster and Greene Streets. The selling area is approximately 35' x 80' for an
approximate square footage of 2,800. Featuring a very plain front affording a limited view of the
street, its interior includes very high ceilings, Corinthian support columns, brick walls painted white,
and a white tiled floor. The ceiling fans and light fixtures are very similar to those found at Cafe
Bari. There is some padded seating in the form of black vinyl covered benches, but most of the
seating is black wooden chairs and imitation marble top tables. The product mix includes specialty
coffee drinks, bottled soft drinks, baked goods, and gourmet salads. Dean & DeLuca is one of very
few places that also offers imported and domestic wines and beers. Its price structure is similar to
Cafe Bari.

The most unique competitor is the Cyber Cafe on the northeast corner of Lafayette and Prince.
The store is about 20' x 25' for a total square footage of 500 square feet. In addition to a fairly
common design and product mix accenting coffee and baked goods, the Cyber Cafe also offers
patrons a chance to access on-line information through computer terminals set facing out the store’s
windows.

There are two secondary competitors which could attract customers sought by the Housing
Works Used Book Cafe. Both are located on the west side of Astor Place, seven blocks north of the
Housing Works Used Book Cafe location. This places both establishments in close proximity to the
Astor Place subway station the next stop uptown from the #6 Lafayette Street subway stop. One is a
large Barnes & Noble Bookstore which includes a coffee bar. An interesting and popular offering is

85
The Nonprofit Entrepreneur’s Handbook

author appearances to which members of the general public are invited. The other secondary com-
petitor is a large Starbucks. Starbucks enjoys a highly visible location and is a well known chain
with many stores in Manhattan. Like the other competitors, Barnes & Noble and Starbucks serve
their food and beverages in disposable containers and on disposable plates.

The Housing Works Used Book Cafe’s competitive advantage will be its departure from the
trend toward very minimal design, and its clear separation from any large corporate parent. Food
and beverages will be served in ceramic mugs and plates. The dishware will be obtained second
hand from one of the many sellers of restaurant supplies on the Bowery. Mismatched in size and
style, the dishware will enhance the homey atmosphere of the store. The offering of used books
placed on shelves at floor level and on a catwalk will create a unique atmosphere. Its sidestreet
location will add to its image as an insider destination.

There is no significant barrier to prevent the opening of additional coffee bars. The initial
investment is modest compared to the opening of other eating establishments. The licensing and
permit requirements are less burdensome than a restaurant preparing food and serving liquor on the
premises. Perhaps the greatest deterrent to opening a coffee bar is the already extensive competition
and the difficulty in differentiating such a store to provide a competitive advantage.

Location Profile

The business will be located midblock at 128 Crosby Street between Prince Street and Houston
in the picturesque SoHo/Cast Iron Historic District designated by the New York City Landmarks
Preservation Commission in 1972. Crosby Street is just east of Broadway and just west of Lafayette
Street, two streets with heavy pedestrian traffic. In the immediate area Broadway has enjoyed a high
rate of occupancy of its storefronts for many years. Lafayette Street is similarly developed, but has
seen a heightening of such activity during the past five years, especially among upscale eating
establishments.

Prince Street is one of the busier streets of SoHo, lined with the sort of shops, galleries, and
eating establishments for which SoHo is so well known. The proposed location at 128 Crosby is
well served by the B, D, F, and #6 subways by stations at Lafayette and Houston. There is a #6
station at Spring and Lafayette and an N & R station at Prince & Broadway. Each of these stations is
about one city block from 128 Crosby Street. Houston is the northern border of SoHo and is a major
Manhattan thoroughfare.

Though much of Crosby Street’s ground floor spaces are the freight entrances to stores facing
Broadway, there has recently been steady development of available ground floor commercial spaces.

86
Sample business plan

These developments have included the opening of an art gallery across from 128 Crosby Street and
the successful Savoy Restaurant on the southeast corner of Crosby and Prince Street. The northwest
comer of Crosby and Prince is occupied by an upscale health club, the Plus One Gym. Just around
the corner from 128 Crosby Street is the Guggenheim Museum on the northeast corner of Broadway
and Prince.

Customer Profile

The primary target customers will be adults from 25 to 55 years of age, employed in profes-
sions, with annual incomes of $50,000 or more, and college educated. The average customer will be
someone who seeks a social experience away from places serving liquor and wishes to be among
people for whom reading and book buying is a significant pleasure. Those living or employed
within Zip Code 10012 are an obvious target, but the business will also seek to attract visitors to the
area who are drawn to the lifestyle, and even the pretensions of SoHo dwellers.

The main benefit provided customers of the store will be a refuge from the stresses of city life.
Patrons will never feel rushed out, browsing among the stacks will always be encouraged. Relaxing
customers will be surrounded by bibliophiles like themselves. At the same time the store will be a
place where the products are very affordable. A visit to Housing Works Used Book Cafe should
leave patrons anxious to again avail themselves of this affordable luxury.

Target Market Profile

The Housing Works Used Book Cafe will be targeting four market segments. In order of
significance to the business they are local residents, those working in the area, those who attend or
are employed by New York University, and visitors to the area.

In order to ascertain the demographics of the area residents that are potential customers of the
Housing Works Used Book Cafe, information was gathered from Strategic Mapping, Inc. (SMI).
SMI was asked for data within Zip Code 10012. The western border of Zip Code 10012 is the
Avenue of the Americas, the eastern boundary is the Bowery, the northern boundary is West 4th
Street, and the southern boundary is Broome Street. The furthest distance of any of these boundaries
from the proposed location is 7 blocks.

The aforementioned market area is one of Manhattan’s more affluent communities. Strategic
Mapping, Inc. estimates the 1994 population at 13,077. With an average household size of 1.9, the
median household income is $39,524, comparing favorably with $29,823 for New York City and

87
The Nonprofit Entrepreneur’s Handbook

$32,262 for Manhattan. The median home value is $500,001 and 16% of the residents live in owner
occupied housing. More than 40% of the households earn $50,000 or more. The percentage of the
population whose ages range from 25 to 54 is 57.6%

As might be expected from the prosperity of the area the educational levels of the residents is
also above the norm. The percentage of those whose education is beyond high school is 67.3%,
with 26.4% of the residents holding graduate or professional degrees. The occupations of local
residents is also what might be expected in a prosperous and well educated population. White
collar employment accounts for 77.7% of the population. The percentage of those holding execu-
tive and managerial positions is 16.6%, those engaged in a professional specialty account for
37.1%, and 14.7% are in the field of education. The travel time to work is less than 60 minutes for
95.1% of the population, with 46.2% using public transportation. (See Appendix C - Market Area
Demographics.)

While SoHo has experienced over a 50% decline in the number of manufacturing concerns and
manufacturing jobs since 1980, the area has become a more significant employer in other economic
sectors. (As of 1990, the neighborhood had 4,689 full time employees manufacturing companies,
down from 11,503 in 1980.) The number of full time employees in eating & drinking establishments
was 2,557 in 1990, as compared to 1,438 in 1980. Miscellaneous retail businesses employed 1,113
full time employees as of 1990, up from 325 in 1980. Retail apparel stores employed 954 people, up
from 268 in 1980. Commercial art galleries employ 800 people (full time equivalent) and museums
and other cultural institutions employ 85 full time people. Another significant sector for employment
in the area is business services (SIC #s 7311 - 7389). The immediate neighborhood is home to
numerous small advertising agencies, small architectural and interior design firms, graphic design
firms, and other firms offering creative services to businesses. According to Dun & Bradstreet there
are at least 2,312 persons employed in the business services sector in Zip Code 10012. The total of
employees in the aforementioned business sectors is 12,510.

Just 5 blocks from the proposed location is New York University (NYU). A private university,
it is one of the largest and most prestigious of New York City’s many academic institutions, and a
place where price conscious bibliophiles abound. NYU has an enrollment of 12,000 undergradu-
ates, 5,000 of whom live on campus. There are 35,000 graduate students, researchers and extension
school students, leading to a total university size of 47,000.

In May 1994, The Office of the Manhattan Borough President and the SoHo Tourism Council
produced A Report on Tourism in SoHo. The survey yielded 654 usable responses and included
information gathered earlier in a survey of SoHo conducted by the Solomon R. Guggenheim Mu-
seum in October 1991. According to the report, “Summer appears to be a relatively strong season

88
Sample business plan

for overnight visitors to New York City.” However, the report also states that in July and August
galleries are generally closed.

The Survey asked respondents the number of people in their group. Approximately 37%
responded that they were in SoHo by themselves, while 42% replied that their group consisted of
two people. Twenty percent replied that their group consisted of three to six people. In general,
respondents did not visit SoHo with children under the age of 12. Only 2% of N.Y.C. residents and
1% of out-of-towners were accompanied by children.

The respondents were almost evenly divided between New York City residents and out-of-
towners. International visitors from 28 countries were counted in the survey. The largest number of
international visitors came from Germany and France. The average age of respondents was 50; the
median age was 34. The majority of the respondents were well educated (defined as having at least
a college degree), with 39.2% holding a college degree and 35 % having done post-graduate work
or received a post graduate degree.

Visitors to SoHo appear to be significantly more affluent than the average New York City
visitor. According to the New York Convention & Visitors Bureau, Inc. the New York City tourist’s
mean annual income is $40,000. Survey respondents reported a mean income of $52,100 for New
York City residents and $53,900 for out-of-towners. Almost 23% of all respondents reported that
they earned $75,000 or more per year.

A high level of “intent to return” to SoHo indicates that SoHo is an attractive destination with
relatively high repeat visitation. Ninety-seven percent of out-of-towners surveyed expressed an
intent to return to SoHo at a future time. According to the New York Convention and Visitors
Bureau only 55% of N.Y.C. hotel guests indicated that they planned to return to New York City at a
future time. About 52% of out-of-towners stayed in hotels or motels while 48% stayed with friends
or relatives.

Sixty one percent of out-of-towners and 70.8% of N.Y.C. residents visited SoHo with a single
activity or purpose in mind. However, they also indicated that they participated in other activities
once they arrived in SoHo. A comparison of the top five reasons for visiting SoHo is shown in the
following chart:

89
The Nonprofit Entrepreneur’s Handbook

Primary reason New York City Out-of-Towners


for SoHo Visit Residents

Shop 31.1% 24.9%

Browse/Wander 24.2 32.2

Visit Museums 14.4 10.2

Dine in Restaurants 14.4 11.9

Visit Galleries 10.6 15.3

The average amount spent in SoHo by out-of-towners was $160; for New York City residents,
the average amount was $128. Approximately 44% of the out-of-towners indicated that visiting
SoHo was an important factor in their decision to visit New York City. The average spending on this
trip per respondent was $1,223, compared to the average out-of-town visitor’s expenditure of
$1,045. The implication is that SoHo attracts visitors who are more likely to spend money and is
consistent with the finding of visitor income levels.

Market Capture Strategy

The key to market success for the Housing Works Used Book Cafe will be to capitalize on the
SoHo location by delivering quality services and products at prices the local population perceives as
good value. Repeat business from this local population will provide a solid base of sales. The
historic cast iron front will feature glass panels and tasteful signage. Exterior lighting will give the
front an illuminated presence distinguishing the location from surrounding ground floor spaces.
Banners affixed to poles will hang from the storefront, a common site in SoHo, giving the store
maximum visibility from the cross streets, Houston and Prince. Flower boxes will be affixed to the
entranceway to catch the eyes of pedestrians.

The 2 800 square feet of selling space has been designed to create an informal environment that
includes some striking architectural features. Housing Works Used Book Cafe will provide seating
for 45 persons at a combination of cafe tables, and upholstered chairs and sofas. The upholstered
seating sections will be arranged to create a number of small “living rooms” inviting customers to
relax in a warm atmosphere that affords refuge from the stresses of Manhattan’s highly competitive
business environment.

90
Sample business plan

The Housing Works Used Book Cafe will serve as an affordable alternative to the
slickly styled coffee bars described in the Competition Profile section of this plan. It will be
positioned as a destination frequented by those with an inside knowledge of SoHo’s attrac-
tions. Media coverage will ensure the swift spread of the fact that Housing Works Used
Book Cafe is a great place to acquire book bargains and revered titles. An attractive in-store
coffee brewer will allow customers to savor the aroma while enjoying flavorful freshly
brewed premium coffee, specialty coffee drinks, and healthful soft drinks, both bottled and
fresh squeezed. During morning hours the store will offer a wide assortment of delectable
baked goods, including fresh muffins, croissants, and scones. After twelve noon the store
will sell gourmet sandwiches, homemade soups, salads, and desserts. Customers will be
able to purchase hand-made items from the Housing Works Weaving Project as well as gift
items such as coffee mugs with the Housing Works logo.

To complement the physical space the store will employ a staff well suited to serving
patrons in an efficient and friendly manner. Whenever possible patrons will be greeted by
name, but they will always be greeted in a welcoming manner. Housing Works Thrift
Shops have a history of staff stability and customer friendliness, keys to their success in
building customer loyalty.

Advertising and Promotion

In order to get sales off to a quick start, promotion for the store’s opening has been
budgeted at $5,000. This money has been earmarked for the preparation of a press kit, a
press relations professional, and a mailing announcing the opening of the business. The
Grand Opening will enjoy the full support of Housing Works, Inc. The organization’s
many supporters have been very effective contributors to the success of past events. These
events have included fundraisers, Grand Openings, and special shopping days at Housing
Works Thrift Stores. Past promotional efforts have resulted in extensive press coverage in
The New York Times and other notable publications, and enjoyed the attendance of large
numbers of the general public, including some celebrities. The business has projected an
annual operating budget for advertising and promotion of 2% of sales or $11,186 during
the first year of operation.

Pricing Policy

It will be the policy of the Housing Works Used Book Cafe store to offer lower prices
for food and beverages than directly competing stores in order to be the coffee bar of
choice for neighborhood residents and visitors familiar with local pricing standards. Favor-
able lease terms, competitive prices from the stone’s suppliers, and avoidance of the use of
disposable containers and plates except for take-out, will make the maintenance of this
policy possible. The pricing of donated books was developed through the experience of

91
The Nonprofit Entrepreneur’s Handbook

book sales at the two thrift shops. The following chart indicates the book pricing standards of the
business.

Book Pricing

Type of Book Price

Rare, First Edition $50.00

Coffee Table Books 30.00

Current Non-Fiction 10.00

Cookbooks 5.00

Reference General Subjects) 8.00

Current Hardcover Fiction 5.00

Hardcover Children’s Books 5.00

Crisp Paperbacks 3.00

Self-Help Books 1.00

92
Sample business plan

Financial Plan

Assumptions

Financial Requirements

1. A schedule for Machinery & Equipment at $33,420 is included in the Financial


Projections. The Equipment list includes expenditures of $12,000 for a computerized point
of sale system capable of providing timely financial data for store management, entered
directly into a computerized accounting package.

2. A schedule for Furniture & Fixtures at $8,000 is included in the Financial Projections.

3. Leasehold Improvements at $179,000 include 3,000 square feet of selling space at $50
per square foot, an architectural fee of $16,000, an engineer’s fee of $8,000, a design
consultant fee of $2,500, and NYC Building Department and NYC Department of Health
expediter fees of $2,500.

4. Ad & Promo for Opening at $5,000 is earmarked for the preparation of a press kit and
a mailing announcing the Grand Opening of the store.

5. Mgt. Training costs at $5,000 cover consultant fees for four weeks training of the
store’s management team in the finer aspects of premium coffee drink preparation, inven-
tory control, and the store’s point of sale system.

6. A schedule of Pre-Opening Expenses totalling $10,325 is included in the Financial


Projections and provide coverage of expenses related to four weeks preparation for the
store’s Grand Opening.

7. Opening Inventory includes a $30,000 estimated value for the Donated Book Inven-
tory and $18,367 for Food & Beverage Inventory assuming an inventory turnover rate of
twelve times per year, plus $4,000 for the store opening.

8. Working Capital includes Cash in Bank of $22,500 to provide expense coverage


while building monthly trade to the point of cash break-even. The figure is a result of a
conservative approach to monthly cash flow projections. Working Capital also includes a
Cash Register Fund of $1,500 to make customer change and provide petty cash.

Operating Pro Forma

1. Food & Beverage Sales in Year 1 were calculated assuming that 1,700 square feet
would be dedicated to the cafe portion of the 3,400 square foot space. The nine store coffee

93
The Nonprofit Entrepreneur’s Handbook

bar chain in the Northeast cited previously reports annual sales at $280 per square foot in
the first year of operation, with no stores in Manhattan. It should be kept in mind that retail
businesses located in Manhattan generally report higher sales productivity than stores
nationwide, a necessity due to the high cost of Manhattan real estate. The independent
operator of the three Manhattan coffee bars mentioned previously reports even higher sales
productivity. If the Housing Works Used Book Cafe can achieve 80% of the sales produc-
tivity reported by the nine store chain, sales would be $224 sales per square foot. First year
sales would then be equal to $224 x 1,700 square feet or $380,800 in sales in Year 1. Sales
in Year 2 reflect a 10% increase and all subsequent years reflect 5% annual sales increases
to reflect the building of trade and inflation.

2. Donated Book Sales were very conservatively projected at $178,500 in Year 1. This
assumes that 1,700 square feet of selling space would be devoted to book sales with a sales
productivity level of $105 per foot. This level of sales is equal to the average achieved by
the bottom 9% of bookstores reporting sales performance in a survey by the American
Booksellers Association. Sales in Year 2 reflect a 10% increase and all subsequent years
reflect 5% annual sales increases to reflect the building of trade and inflation.

3. COGS at 40% is based on information gathered from the aforementioned nine-store


coffee bar chain and three-store independent operator. This includes both the purchase of
the food and beverages to be sold and the disposable items, such as coffee cups, paper
napkins, etc., used for the service of the coffee bar products. As Housing Works will be not
be using disposable containers and plates other than for take-out, the business will be able
to maintain the 60% gross margin while offering lower than average coffee bar prices.

4. Salaries & Wages were calculated for a Senior Clerk receiving an annual salary of
$18,000, two full-time employees being paid $6.00 per hour for 40 hours per week and
three part-time employees being paid $6.00 per hour for 20 hours per week in Year 1.
Salaries & Wages in Year 2 reflect the 2 full-time employees receiving 5% pay increases,
the 3 part time employees receiving 5% pay increases and an additional full-time worker
being hired at $6.00 per hour for 40 hours.

5. Mgt. Bonuses were calculated at 1% of Sales, assuming a net operating profit and the
attainment of other operating goals including gross margin, wage costs as a percentage of
sales, store cleanliness and organization and product presentation.

6. Fringe Benefits for the two managerial positions were calculated at 14% of the com-
bined salaries and are intended to provide health insurance.

7. Rent was calculated at $13.85 per square foot for 3,417 square feet with annual in-
creases of 4.5%. R. E. Taxes were calculated at 6% of the annual rent.

8. Utilities assume a monthly billing of $900 for twelve months.

94
Sample business plan

9. Telephone assumes a monthly billing of $250 for twelve months.

10. Equipment Leasing at $7,200 includes $300 per month for a dishwasher, an ice
machine at $200 per month, and a copy machine at $100 per month.

11. Advertising and Promo was calculated at 2% of Sales.

12. Depreciation & Amortization was calculated on a straight-line basis for 5 years for
Machinery & Equipment, Furniture & Fixtures, Start-up Costs, and Organizational Ex-
penses. Leasehold Improvements were calculated on a straight-line basis for a 39 year
period, the I.R.S. standard.

13. Debt Service represents the interest portion of payments on a loan in the amount of
$150,000, over five years at 11% annual interest.

14. Corporate Taxes were calculated at 38% of the net income after taxes accounted for
by the cafe portion of the store, projected at 70% of the entire store’s net income after taxes.

Cash Flow Projections

1. Expected Cash Revenue is based on the seasonality of sales as experienced by indus-


try representatives and other considerations discussed in the Marketing Plan of this docu-
ment.

2. Operating Disbursements assume operating expenses will remain largely fixed,


regardless of sales performance.

3. Non-Operating Disbursements represent inventory replacement with an inventory


turnover rate of twelve times per year. This rate was arrived at after discussions with
industry representatives.

4. Loan Payments represent the monthly payment of interest and principal for a $150,000
loan, over five years, at 11% annual interest.

95
The Nonprofit Entrepreneur’s Handbook

Housing Works Used Book Cafe


Revenue & Expenses

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0
Year 1 Year 2 Year 3 Year 4 Year 5

Expenses Net profit

96
Sample business plan

HOUSING WORKS USED BOOK CAFE 14-Feb-96


FINANCIAL REQUIREMENTS

Amount HW To Be
Required Equity Financed
FIXED ASSETS
Machinery & Equipment $33,420 $33,420
Furniture & Fixtures 8,000 8, 000
Leasehold Improvements
Construction @ $50 per ft. 150,000 150,000
Architect & Designer Fee 16,000 16,000
Engineer 8,000 8,000
Design Consultant 2,500 2,500
Bldg. Dept. & DOH Expediters 2,500 2,500
SUBTOTAL 220,420 70,420 150,000

PREPAID ITEMS & DEPOSITS


Rent Deposit 14,484 14,484
Utilities Deposit 1,000 1, 000
Telephone Deposit 500 500
Prepaid Insurance 1,980 1,980
Taxes, Licences & Fees 1,000 1,000
SUBTOTAL 18,964 18,964 0

START-UP COSTS
Ad & Promo for Opening 5,000 5,000
Mgt. Training Costs 5,000 5,000
MBDC Financial Services 3,000 3,000
Pre-Opening Expenses 10,325 10,325
SUBTOTAL 23,325 23,325 0

ORGANIZATIONAL EXPENSES
Legal & Accounting Fees 1,500 1,500
NYS Incorporation 350 350
SUBTOTAL 1,850 1,850 0

OPENING INVENTORY & SUPPLIES


Donated Book Inventory 30,000 30,000
Food & Beverage Inventory 17,677 17,677

WORKING CAPITAL
Cash in Bank 22,500 22,500
Cash Register Fund 1,500 1,500

Total Requirement: $336,236


HW Equity: $186,236
To Be Financed: $150,000

97
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 14-Feb-96

Schedule of Machinery & Equipment Pre-Opening Expenses - 4 Weeks


Refrigerators Under Counter (3) $2,400 PAYROLL & OTHER EMPLOYMENT
3 Compartment Small Hand-Sink 1,640 COSTS
Cold Beverage Refrigerator 1,800 Store Manager $3,077
Coffee Brewer Gem 12 1,200 Assistant Manager 2,308
Coffee Brewer STF 35 405 Salaries & Wages 500
Coffee Warmers Gem 5 (2) 150 Fringe Benefits 960
Coffee Servers Gem 3 (4) 420 St. & Fed. Unempl. 54
Cup Holders(2) 300 Disability 54
Drip Trays (2) 70 FICA 274
Air Pots (10) 260 Workers Comp. 89
Toaster 250 Total Payroll $7,315
Microwave 750
Sandwich Unit 825 INDIRECT COSTS
Phone Equipment 150 Utilities $400
Fax Machine 500 Telephone 150
Espresso Machine 7,000 Insurance 900
Stereo Equipment 2,000 Reference Materials 100
Computerized Point of Sale System 12,000 Postage & Office Supplies 200
Book Trolleys & V-carts 250 Extermination 100
Handtruck 100 Carting 760
Gift Wrap Holders & Gift Wrap 100 Payroll Service 100
Interior Signage 150 Bank Charges 50
Shipping Scale 100 Travel 150
Safe & Cash Boxes 500 Miscellaneous 100
Sliding Stepstools 100 Total Pre-Opening Expenses: $10,325
Total Machinery & Equipment: $33,420

Schedule of Furniture & Fixtures


Tables, Chairs, Bookcases $4,000
Fixtures 4,000
Total Furniture & Fixtures: $8,000

98
Sample business plan

HOUSING WORKS USED BOOK CAFE 14-Feb-96


Operating Pro Forma Summary

Year 1 Year 2 Year 3 Year 4 Year 5

Sales $559,300 $615,230 $645,992 $678,291 $712,206


COGS 164,125 180537 189,564 199,042 208,994

Net Operating Income 395,175 434,693 456,427 479,249 503,211

Expenses:
General & Administrative 252,981 284,210 297,743 311,925 326,786
Selling Expenses 15,660 17,226 18,088 18,992 19,942
Depreciation & Amortization 17,909 17,909 17,909 17,909 17,909

Operating Expenses 286,550 319,345 333,739 348,825 364,636

Operating Income (EBIT) 108,625 115,348 122,688 130,423 138,575

Interest Expense 15,438 12,628 9,540 6,093 2,255

Net Income Before Taxes 93,187 102,720 113,148 124,331 136,320

Corporate Taxes 24,788 27,324 30,097 33,072 36,261

Net Income After Taxes $68,399 $75,395 $83,051 $91,259 $100,059

99
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 14-Feb-96

Operating Pro Forma Year 1 Year 2 Year 3 Year 4 Year 5


Food & Beverage Sales $380,800 $418,880 $439,824 $461,815 $484,906
COGS @ 40% 164,125 180,537 189,564 199,042 208,994

Donated Book Sales 178,500 196,350 206,168 216,476 227,300

Net Operating Income 395,175 434,693 456;427 479,249 503,211

PAYROLL & OTHER EMPLOYMENT COSTS


Store Manager 40,000 42,000 44,100 46,305 48,620
Assistant Manager 30,000 31,500 33,075 34,729 36,465
Salaries & Wages 60,000 74,700 78,435 82,357 86,475
Management Bonuses @ 1% 5,593 6,152 6,460 6,783 7,122
Fringe Benefits 9,800 10,290 10,805 11,345 11,912
St. & Fed. Unemployment 1,950 2,223 2,334 2,451 2,573
Disability Insurance 1,950 2,223 2,334 2,451 2,573
FICA 9,945 11,337 11,904 12,499 13,124
Workers Compensation 3,250 3,705 3,890 4,085 4,289

Total Payroll 162,488 184,131 193,337 203,004 213,154

INDIRECT COSTS
Rent - 3,417 sq. ft. @ $13.85 47,325 49,455 51,681 54,006 56,436
R.E. Taxes @ 6% 2,840 2,967 3,101 3,240 3,386
Utilities 10,800 11,232 11,681 12,149 12,634
Telephone 3,000 3,120 3,24S 3,375 3,510
Equipment Leasing 7,200 7,488 7,788 8,099 8,423
Insurance
Gen. Liability 5,000 5,200 5,408 5,624 5,849
Fire & Theft 1,000 1,040 1,082 1,125 1,170
Decorating 2,000 2,080 2,163 2,250 2,340
Office Supplies & Postage 1,200 1,248 1,298 1,350 1,404
Extermination 1,200 1,248 1,298 1,350 1,404
Carting 2,500 2,600 2,704 2,812 2,925
Licenses/Permits 450 468 487 06 526
Accounting & Legal 2,000 2,080 2,163 2,250 2,340
Donations& Memberships 250 260 270 281 292
Seminars & Conferences 300 312 324 337 351
Payroll Service 1,728 1,797 1,869 1,944 2,022
Bank Charges 250 811 844 877 912
Miscellaneous 250 520 541 562 585
Repairs & Maintenance 1,200 6,152 6,460 6,783 7,122
Advertising & Promotion @ 2% 11,186 12,305 12,920 13,566 14,244
Credit Card Charges 4,474 4,922 5,168 5,426 5,698
Depreciation & Amortization 17,909 17,909 17,909 17,909 17,909
Debt Service 15,438 12,628 9,540 6,093 2,255

Total Indirect Costs 139,500 147,842 149,942 151,914 153,737

Total Operating Expenses 301,988 331,973 343,279 354,918 366,891

Net Income Before Taxes 93,187 102,720 113,148 124,331 136,320

Corporate Taxes 24,788 27,324 30,097 33,072 36,261

Net Income After Taxes $68,399 $75,396 $83,051 $91,259 $100,059

100
Sample business plan

HOUSING WORKS USED BOOK CAFE 14-Feb-96


Notes to Operating Pro Forma

- Personnel Costs Assume 5% Annual Increases


- Other Fixed Operating Expenses Assume an Inflation Rate of 4% After Year 1
- Depreciation & Amortization Were Calculated Over 5 Year Periods Except for Leasehold Improvements
- Amortization of Leasehold Improvements Was Calculated Over 39 Years

Year 1 Year 2 Year 3 Year 4 Year 5


Annual Sales: $559,300 $615,230 $645,992 $678,291 $712,206
Sales Increase 10% 5% 5% 5%

CASH BREAK EVEN ANALYSIS (Yearly Basis)

CASH BREAK EVEN = FIXED COSTS (INCLUDES LOAN PRINCIPAL PMTS)


1 - VARIABLE CASH COSTS (% of sales)

Year 1 Year 2
FIXED CASH COSTS = $285,379 $311,096
VARIABLE CASH COSTS = $186,578 $210,068
VARIABLE COSTS (% of Sales) = 33.4% 34.1%
ANNUAL CASH BREAK EVEN = $428,234 $472,393
WEEKLY CASH BREAK EVEN = $8,235 $9,084

VARIABLE COSTS
COGS 29.3% 29.3%
Management Bonuses @ 1% 1.0% 1.0%
Repairs & Maintenance 0.2% 1.0%
Advertising & Promotion @ 2% 2.0% 2.0%
Credit Card Charges 0.8% 0.8%
33.4% 34.1%

PAYROLL & OTHER EMPLOYM Year 1 Year 2


Store Manager $40.000 $42,000
Assistant Manager 30,000 31,500
Mgt. Bonuses 5,593 6,152
Fringe Benefits 9,800 10,290
Senior Clerk 18,000 18,900
F/T Worker 1 12,000 12,600
F/T Worker 2 12,000 12,600
F/T Worker 3 12,000
P/T Worker 1 6,000 6,300
P/T Worker 2 6,000 6,300
P/T Worker 3 6,000 6,000
St. & Fed. Unempl. 1,950 2~23
Disability 1,950 2,223
FICA 9,945 11,337
Workers Comp. 3,250 3,705

Total Payroll $162,488 $184,131

101
102
HOUSING WORKS USED BOOK CAFE
Cash Flow Projections Year 1 14-Feb-96

MON 1 MON 2 MON 3 MON 4 MON 5 MON 6 MON 7 MON 8 MON 9 MON 10 MON 11 MON 12

CASH IN BANK (START OF MONTH) $24,00 $32,122 $44,591 $68,521 $71,901 $74,095 $77,871 $82,436 $88,188 $96,310 $102,061 $105,441
EXPECTED CASH REVENUE 47,541 53,693 69,913 40,829 39,151 41,388 42,507 44,185 47,541 44,185 40,829 47,541

TOTAL CASH & RECEIPTS 71,541 85,815 114,504 109,350 111,052 115,484 120,377 126,621 135,728 140,494 142,890 152,982

OPERATING DISBURSEMENTS 22,202 22,202 22,202 22,202 22,202 22,202 22,202 22,202 22,202 22,202 22,202 22,202
NON-OPERATING DISBURSEMENTS 13,951 15,756 20,516 11,981 11,489 12,145 12,473 12,966 13,951 12,96 11,981 38,738

LOAN PAYMENTS 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266

CASH BALANCE (END OF MONTH) $32,122 $44,591 $58,521 $71,901 $74,095 $77,871 $82,436 $88,188 $96,310 $102,0061 $105,441 $88,775

Cash Flow Projections Year 2 14-Feb-96


The Nonprofit Entrepreneur’s Handbook

MON 1 MON 2 MON 3 MON 4 MON 5 MON 6 MON 7 MON 8 MON 9 MON 10 MON 11 MON 12
CASH IN BANK (START OF MONTH) $88,775 $95,326 $108,879 $135,037 $138,592 $140,843 $144,832 $149,691 $155,853 $164,624 $170,787 $174,342

EXPECTED CASH REVENUE 52,295 59,062 76,904 44,912 43,0606 45,527 46,757 48,603 52,295 48,603 44,912 52,295

TOTAL CASH & RECEIPTS 141,070 154,388 185,783 179,949 181,658 186,370 191,589 198,194 208,148 213,227 215,699 226,636
OPERATING DISBURSEMENTS 24,912 24,912 24,912 24,912 24,912 24,912 24,912 24,912 24,912 24,912 24,912 24,912

NON-OPERATING DISBURSEMENTS 17,566 17,332 22,567 13,179 12,638 13,360 13,721 14,262 15,346 14,262 13,179 142,669

LOAN PAYMENTS 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266
CASH BALANCE (END OF MONTH) $95,326 $108,879 $135,037 $138,592 $140,843 $144,832 $149,691 $155,853 $164,624 $170,787 $174,342 $155,789

Seasonality of Sales 8.5% 9.6% 12.5% 7.3% 7.0% 7.4% 7.6% 7.9% 8.5% 7.9% 7.3% 8.5%
Cash Flow Projections Year 3 14-Feb-96

MON 1 MON 2 MON 3 MON 4 MON 5 MON 6 MON 7 MON 8 MON 9 MON 10 MON 11 MON 12

CASH IN BANK (START OF MONTH) $155,789 $162,727 $177,176 $204,862 $208,813 $211,396 $215,804 $221,125 $227,815 $237,243 $243,934 $247,885

EXPECTED CASH REVENUE 54,909 62,015 80,749 47,157 45,219 47,803 49,095 51,033 54,909 51,033 47,157 54,909
TOTAL CASH & RECEIPTS 210,698 224,742 257,925 252,019 254,033 259,199 264,899 272,158 282,724 288,277 291,091 302,794

OPERATING DISBURSEMENTS 26,102 26,102 26,102 26,102 26,102 26,102 26,102 26,102 26,102 26,102 26,102 26,102

NON-OPERATING DISBURSEMENTS 18,604 18,198 23,696 13,838 123,269 14,028 14,407 14,976 16,113 14,9976 13,838 46,210
LOAN PAYMENTS 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266

CASH BALANCE (END OF MONTH) $162,727 $177,176 $204,862 $208,813 $211,396 $215,804 $221,125 $227,815 $237,2432 $243,934 $247,885 $227,217

Cash Flow Projections Year 4 14-Feb-96

MON 1 MON 2 MON 3 MON 4 MON 5 MON 6 MON 7 MON 8 MON 9 MON 10 MON 11 MON 12
CASH IN BANK (START OF MONTH) $227,217 $234,728 $250,122 $279,413 $283,784 $286,717 $291,567 $297,376 $304,622 $314,744 $321,990 $326,361

EXPECTED CASH REVENUE 57,655 65,116 84,786 49,515 47,480 50,194 51,550 53,585 57,655 53,585 49,515 57,655

TOTAL CASH & RECEIPTS 284,871 299,844 334,908 328,929 331,265 336,911 343,117 350,117 362,277 368,329 371,505 384,016
OPERATING DISBURSEMENTS 27,348 27,348 27,348 27,348 27,348 27,348 27,348 27,348 27,348 27,348 27,348 27,348

NON-OPERATING DISBURSEMENTS 19,529 19,108 24,880 14,530 13,933 14,729 15,127 15,724 16,919 15,724 14,530 49,991

LOAN PAYMENTS 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266 3,266
CASH BALANCE (END OF MONTH) $234,728 $250,122 $279,413 $283,784 $286,717 $291,567 $297,376 $304,622 $314,744 $321,990 $326,361 $303,411

Seasonality of Sales 8.5% 9.6% 12.5% 7.3% 7.0% 7.4% 7.6% 7.9% 8.5% 7.9% 7.3% 8.5%
Sample business plan

103
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 14-Feb-96


OPENING BALANCE SHEET

ASSETS

CURRENT ASSETS
CASH IN BANK $22,500
CASH REGISTER FUND 1,500
INVENTORY (F&B) 17,677
INVENTORY (BOOKS) 30,000
PREPAID EXPENSES 2,980
FIXED ASSETS
MACHINERY & EQUIPMENT 33,420
FURNITURE & FIXTURES 8,000
LEASEHOLD IMPROVEMENT 179,000
OTHER ASSETS
START-UP COSTS 23,325
ORGANIZATIONAL EXPENSES 1,850
DEPOSITS 15,984

TOTAL ASSETS 336,236

LIABILITIES

CURRENT LIABILITIES
ACCOUNTS PAYABLE 0
LONG TERM LIABILITIES
LOAN PAYABLE 150,000

TOTAL LIABILITIES 150,000

EQUITY

SHAREHOLDERS’ EQUITY 186,236

TOTAL EQUITY 186,236

TOTAL LIABILITIES + EQUITY $336,236

104
Sample business plan

HOUSING WORKS USED BOOK CAFE 14-Feb-96


BALANCE SHEET (END OF YEAR 1)

ASSETS

CURRENT ASSETS
CASH IN BANK $88,775
ACCOUNTS RECEIVABLE 0
INVENTORY (F&B) 17,677
INVENTORY (BOOKS) 30,000
PREPAID EXPENSES 2,980
FIXED ASSETS
MACHINERY & EQUIPMENT 26,736
FURNITURE & FIXTURES 6,400
LEASEHOLD IMPROVEMENTS 174,410
OTHER ASSETS
START-UP COSTS 18,660
ORGANIZATIONAL EXPENSES 1,480
DEPOSITS 15,984

TOTAL ASSETS 383,103

LIABILITIES

CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,220
LONG TERM LIABILITIES
LOAN PAYABLE 126,247

TOTAL LIABILITIES 128,467

EQUITY

SHAREHOLDERS’ EQUITY 186,236


CURRENT EARNINGS 68,399

TOTAL EQUITY 254,636

TOTAL LIABILITIES + EQUITY $383,103

105
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 14-Feb-96


BALANCE SHEET (END OF YEAR 2)

ASSETS

CURRENT ASSETS
CASH IN BANK $155,789
ACCOUNTS RECEIVABLE 0
INVENTORY (F&B) 17,677
INVENTORY ( BOOKS) 30,000
PREPAID EXPENSES 2,980
FIXED ASSETS
MACHINERY & EQUIPMENT 20,052
FURNITURE & FIXTURES 4,800
LEASEHOLD IMPROVEMENTS 169,821
OTHER ASSETS
START-UP COSTS 13,995
ORGANIZATIONAL EXPENSES 1,110
DEPOSITS 15,984

TOTAL ASSETS 432,208

LIABILITIES

CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,491
LONG TERM LIABILITIES
LOAN PAYABLE 99,684

TOTAL LIABILITIES 102,176

EQUITY

SHAREHOLDERS’ EQUITY 254,636


CURRENT EARNINGS 75,396

TOTAL EQUITY 330,032

TOTAL LIABILITIES + EQUITY $432,208

106
Sample business plan

HOUSING WORKS USED BOOK CAFE 14-Feb-96


BALANCE SHEET (END OF YEAR 3)

ASSETS

CURRENT ASSETS
CASH IN BANK $227,217
ACCOUNTS RECEIVABLE 0
INVENTORY (F&B) 17,677
INVENTORY (BOOKS) 30,000
PREPAID EXPENSES 2,980
FIXED ASSETS
MACHINERY & EQUIPMENT 13,368
FURNITURE & FIXTURES 3,200
LEASEHOLD IMPROVEMENTS 165,231
OTHER ASSETS
START-UP COSTS 9,330
ORGANIZATIONAL EXPENSES 740
DEPOSITS 15,984

TOTAL ASSETS 485,726

LIABILITIES

CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,610
LONG TERM LIABILITIES
LOAN PAYABLE 70,034

TOTAL LIABILITIES 72,644

EQUITY

SHAREHOLDERS’ EQUITY 330,032


CURRENT EARNINGS 83,051

TOTAL EQUITY 413,083

TOTAL LIABILITIES + EQUITY $485,726

107
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 14-Feb-96


BALANCE SHEET (END OF YEAR 4)

ASSETS

CURRENT ASSETS
CASH IN BANK $303,411
ACCOUNTS RECEIVABLE 0
INVENTORY (F&B) 17,677
INVENTORY (BOOKS) 30,000
PREPAID EXPENSES 2,980
FIXED ASSETS
MACHINERY & EQUIPMENT 6,684
FURNITURE & FIXTURES 1,600
LEASEHOLD IMPROVEMENTS 160,641
OTHER ASSETS
START-UP COSTS 4,665
ORGANIZATIONAL EXPENSES 370
DEPOSITS 15,984

TOTAL ASSETS 544,012

LIABILITIES

CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,735
LONG TERM LIABILITIES
LOAN PAYABLE 36,936

TOTAL LIABILITIES 39,670

EQUITY

SHAREHOLDERS’ EQUITY 413,083


CURRENT EARNINGS 91,259

TOTAL EQUITY 504,341

TOTAL LIABILITIES + EQUITY $544 ,012

108
HOUSING WORKS USED BOOK CAFE
Financial Ratios
Year 1 Year 2 Year 3

ACTIVITY RATIOS
Food & Beverage Inventory Turnover Ratio = COGS 164,125 180,537 189,564
9.3 times 10.2 times 10.7 times
Inventory 17,677 17,677 17,677

Average Collection Period = Receivables 0 0 0


0.0 days 0.0 days 0.0 days
Avg Daily Sales 1,554 1,709 1,794

PROFITABILITY RATIOS
Return on Net Worth,
or Return on Owners’ Equity (ROE)= Net Income 68,399 7i5,396 83,051
26.9 % 22.8% 20.1%
Net Worth 254,636 330,032 413,083

Retun on Total Assets,


Return on Investment (ROI) = Net Income 68,399 75,a396 83,051
17.9% 17.4% 17.1%
Total Assets 383,103 432,208 485,726

Sample business plan


Gross Profit Margin on Sales = Gross Profit 395,175 434,693 456,427
70.7% 70.7% 70.7%
Net Sales 559,300 615,230 645,992

Net Profit Margin on Sales = Net Income 68,399 75,396 83,051


12.2% 12.3% 1.29%
Net Sales 559,300 615,230 645,992
109
The Nonprofit Entrepreneur’s Handbook

HOUSING WORKS USED BOOK CAFE 08-03-1995 05:13:16 Pg 1

Compounding interval: Comp daily

Annual percentage rate ...................... : 11.000%


Effective annual rate ......................... : 11.626.
Rate per compounding period .......... : 0.0301%
Equivalent daily rate ......................... : 0.03014%

Valuation date: 12-01-1995 Value: n 150,000.00

CASH FLOW DATA

First date Payment amount -#- Interval Last date


01-01-1996 3,265.89 60 Monthly 12-01-2000

AMORTIZATION SCHEDULE - Normal amortization

Pmt Date Payment Interest Principal Balance


Balance at 12-01-1995 150,000.00

1 01-01-t996 3,265 89 1,407.72 1,858.17 148,141.83


2 02-01-1996 3,265 89 1,390.28 1,875.61 146,266.22
3 03-01-1996 3,265,89 1,283.73 1,982.16 144,284.06
4 04-01-1996 3,265 89 1,354.08 1,911.81 142,372.25
5 05-01 1996 3,265 89 1,292.84 1,973.05 140,399.20
6 06-01-1996 3,265.89 1,317.62 1,948.27 138,450.93
7 07-01-1996 3,265.89 1,257.23 2,008.66 136,442.27
8 08-01-1996 3,265.89 1,280.49 1,985.40 134,456.87
9 09-01-1996 3,265.89 1,261.85 2,004.04 132,452.83
10 10-01-1996 3,265.89 1,202.77 2,063.12 130,389.71
11 11-01-1996 3,265.89 1,223.68 2,042.21 128,347.5O
12 12-01-1996 3,265.89 1,165.49 2,100.40 126,247.10
1996 totals 39,190 68 15,437.78 23,752.90

13 01-01-1997 3,265 89 1,184.81 2,081.08 124,166.02


14 02-01-1997 3,265.89 1,165.28 2,100.61 122,065.41
15 03-01-1997 3,265.89 1,034.23 2,231.66 119,833.75
16 04-01-1997 3,265.89 1,124.62 2,141.27 117,692.48
17 05-01-1997 3,265.89 1,068.73 2,197.16 115,495.32
18 06-01-1997 3,265.89 1,083.90 2,181.99 113,313.33
19 07-01-1997 3,265.89 1,028.97 2,236.92 111, 076.41
20 08-01-1997 3,265.89 1,042.43 2,223.46 108,852.95
21 09-01-1997 3,265.89 1,021.57 2,244.32 106, 608.63
22 10-01-1997 3,265.89 968.08 2,297.81 104, 310.82
23 11-01-1997 3,265.89 978.94 2,286.95 102,023.87
24 12-01-1997 3,265.89 926.45 2,339.44 99, 684.43
1997 totals 39,190.68 12,628.01 26,562.67

110
Sample business plan

HOUSlNG WORKS USED BOOK CAFE O8-03-1995 05:13:16 Pg 2

Pmt Date Payment Interest Principal Balance


25 01-01-1998 3,265.89 935.52 2,330.37 97,354.06
26 02-01-1998 3,265.89 913.65 2,352.24 95,001.82
27 03-01-1998 3,265.89 804.93 2,460.96 92,540.86
28 04-01-1998 3,265.89 868.48 2,397.41 90,143.45
29 05-01-1998 3,265.89 818.57 2,447.32 87,696.13
30 06-01-1998 3,265.89 823.01 2,442.88 85,253.25
31 07-01-1998 3,265.89 774.16 2,491.73 82,761.52
32 08-0l-1998 3,265.89 776.70 2,489.19 80,272.33
33 09-01-1998 3,265.89 753.34 2,512.55 77,759.78
34 10-01-1998 3,265.89 706.11 2,559.78 75,200.00
35 11-01-1998 3,265.89 705.74 2,560.15 72,639.85
36 12-01-1998 3,265.89 659.62 2,606.27 70,033.58
1998 totals 39,190.68 9,539.83 29,650.85

37 01-01-1999 3,265.89 657.25 2,608.64 67,4 24.94


38 02-01-1999 3,265.89 632.77 2,633.12 64,791.82
39 03-01-1999 3,265.89 548.97 2,716.92 62,074.90
40 04-01-1999 3,265.89 582.56 2,683.33 59,391.57
41 05-01-1999 3,265.89 539.32 2,726.57 56,665.00
42 06-01-1999 3,265.89 531.79 2,734.10 53,930.90
43 07-01-1999 3,265.89 489.73 2, 776.16 51,154.74
44 08-01-1999 3,265.89 480.08 2,785.81 48,368.93
45 09-01-1999 3,265.89 453.93 2,811.96 45,556.97
46 10-01-1999 3,265.89 413.69 2,852.20 42,704.77
47 11-01-1999 3,265.89 400.78 2,865.11 39,839.66
48 12-01-1999 3,265.89 361.77 2,904.12 36,5935.54
1999 totals 39,190 68 6,092.64 33,098.04

49 01-01-2000 3,265.89 346.63 2,919.26 34,116.28


50 02-01-2000 3,265.89 319.24 2,946.65 31,069.63
51 03-01-2000 3,265.89 272.69 2,993.20 28,076.43
52 04-01-2000 3,265.89 263.49 3,002.40 25,074.03
53 05-01-2000 3,265 89 227.69 3,038.20 22,035.83
54 06-01-2000 3,265.89 206.80 3,059.09 18,976.74
55 07-01-2000 3,265.89 172.32 3,093.57 15,883.17
56 08-01-2000 3,265.89 149.06 3,116.83 12,766.34
57 09-01-2000 3,265.89 119.81 3,146.08 9,620.26
58 10-01-2000 3,265.89 87.36 3,178.53 6,441.73
59 11-01-2000 3,265.89 60.45 3,205.44 3,236.29
60 12-01-2000 3,265.89 29.60 3,236.29 0.00
2000 totals 39,190.68 2,255.14 36,935.54

Grand totals 195,953.40 45,953.40 150,000.00

111
Sample business plan

APPENDIX A

BOARD OF DIRECTORS

113
Sample business plan

Housing Works
Thrift Shop, Inc.

Board of Directors

Lorry Newhouse, Chair


James Huniford, Vice Chair
Karen Alexander
Michael Boodro
Kay McCauley
Dean Carlton Rochell
Hal Rubenstein
Charles Rumsey
Rhonda Roland Shearer
J.C. Suares
Bruce Tilley
Francis S. Willey
Charles King

115
Sample business plan

APPENDIX B

STORE MANAGER RESUME

117
Sample business plan

Keith F. Limitone
520 West 28 Street 5B
New York, NY 10034
212-301-1317

EDUCATlON Master of Arts, Bachelor of Arts 1992


The City College of Newl York
-Major: Economics | GPA: 4.0
-Phi Beta Kappa -Magna Cum Laude
-Ketchum Prize in Political Econorny
-Ward Medal

EXPERIENCD Store Dlrector 1993-1995


Western Publishing Company, Inc.
- Directed Golden Books Showcase store.
- Hired, trained and supervised staff of 15.
- Maintained consistently superior customer service.
- Purchased all new product and managed replenishment.
- Addressed all maintenance and repair issues.

Actuarial Asslstant 1992-1993


Insurance Services Offi¢e, Inc.
- Performed econometric research to forecast Insurance trends.
- Developed and analyzed product market research surveys.
- Prepared econometric reports, circubrs, and committee agendas.

Manager 1986-1992
Doubleday Book Shops
- Managed all store operations in several high-volume localions
- Set and achieved aggressive sales and profit pbns.
- Controlled operating expenses, streamlining internal operations.
- Merchandised stores lo maximize selling space.
- Bought both front and backlist titles.
- Coordinated POS conversion.

Account Representatlve 1985-1986


Aubrey Thomas, Inc.
- Screened, interviewed and placed empbyment applicants.
- Provided administrative support to large sales office.

SKILLS - Keyboarding,60wpm.
- Lotus 123, Displaywrite 5, WordPerfecl, Symphony
- Statistical programs: SAS, TSP
- Strong writing abilities.
- Knowledge of French and Spanish.

REFERENCES - Excellent references avaibble upon request.

- Salary requirements: Flexible, but preferably in the mid-thirties range.

119
Sample business plan

APPENDlX C

MARKET AREA DEMOGRAPHICS

121
Sample business plan
Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (1)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1994 Socio-Economic Measure: 66

1994 Employment: 31,006

Population:
1999 Projection 26,405
1994 Estimate 26,423
1990 Census 26,365
1990 - 1994 % Change (Growth) 0.2%

1990 Group Quarters Population 1,562

1994 % Population by Race:


White 72.8%
Black 4.2%
American Indian, Eskimo & Aleut 0.3%
Asian or Pacific Islander 20.8%
Other 2.0%

Hispanic 8.9%

1990 % Population by Race:


White 75.2%
Black 3.9%
American Indian, Eskimo & Aleut 0.3%
Asian or Pacific Islander 18.0%
Other 2.7%

Hispanic 8.5%

1994 % Populatio n by Sex:


Male 50.6%
Female 49.4%

1990 % Population by Sex:


Male 50.7%
Female 49.3%

1999 Pop per Square Mile (Pop Density) 80,457.6


1994 Pop per Square Mile (Pop Density) 80,512.4
1990 Pop per Square Mile (Pop Density) 80,335.7

Area (Square Miles) 0.3


Area (Square Kilometers) 0-9

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667
123
Sample business plan

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (3)
AREA 1 = ZIP CODE 10012
************************************’************************************
AREA 1
Description
*************************************************************************
1990 % Household Income:
$ 0 - $ 9,999 17.3%
$ 10,000 - $ 14,999 6.8%
$ 15,000 - $ 24,999 13.7%
$ 25,000 - $ 34,999 13.9%
$ 35,000 - $ 49,999 14.3%
$ 50,000 - $ 74,999 15.2%
$ 75,000 - $ 99,999 7.4%
$100,000 - $149,999 6.2%
$150,000 + 5.1%

1994 % Population by Age:


0-5 4.2%
6 - 13 5.1%
14 - 17 3.4%
18 - 20 3.7%
21 - 24 5.8%
25 - 34 21.9%
35 - 44 21.2%
45 - 54 14.5%
55 - 64 8.7%
65 - 74 6.8%
75 - 84 3.6%
85 + 1.1%
Median Age Total Population 37.7
Median Age Adult Population 40.6

1990 % Population by Age:


0-5 4.3
6 - 13 4.5
14 - 17 2.3
18 - 20 5.2
21 - 24 8.6
25 - 34 23.9
35 - 44 20.3
45 - 54 11-8
55 - 64 8.4
65 - 74 6.4
75 - 84 3.2
85 + 0.9
Median Age Total Population 35.5
Median Age Adult Population 38.1

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

125
The Nonprofit Entrepreneur’s Handbook

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (4)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1994 % Female Population by Age:
0-5 4.1%
6 - 13 4.8%
14 - 17 3.2%
18 - 20 3.7%
21 - 24 6.0%
25 - 34 21.8%
35 - 44 20.6%
45 - 54 13.9%
55 - 64 8.4%
65 - 74 7.2%
75 - 84 4.6%
85 + 1.6%
Female Median Age Total Population 37.9
Female Median Age Adult Population 40.8

1990 % Female Population by Age:


0-5 4.3%
6 - 13 4.2%
14 - 17 2.4%
18 - 20 5.4%
21 - 24 8.8%
25 - 34 23.7%
35 - 44 19.5%
45 - 54 11.1%
55 - 64 7.9%
65 - 74 7.3%
75 - 84 4.1%
85 + 1.3%
Female Median Age Total Population 35.6
Female Median Age Adult Population 38.2

1990 % Hispanic Population by Type:


Not of Hispanic Origin 91.5
Mexican 0.6
Puerto Rican 1.9
Cuban 0.5
Other Hispanic 5.5

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

126
Sample business plan

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (5)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1990 % Population Enrolled in School (Aqe 3 & Over):
Preprimary School 5.8%
Elementary and High School 29.7%
College 64.6%

Total School Enrollment 6,342

1990 % Educational Attainment (Age 25 & over)


Less than Grade 9 13.4%
Grade 9-12 ( No Diploma) 7.7%
High School Graduate or Equivalency 11.6%
Some College (No Degree) 10.8%
Associate Degree 3.5%
Bachelor Degree 26.6%
Graduate or Professional Degree 26.4%

1990 % Employme nt Status:


Total Labor Force:
Armed Forces 0.0%
Civilian:
Employed 70.0%
Unemployed 4.4%
Not In Labor Force 25.5%

Female Labor Force:


Armed Forces 0.0%
Civilian:
Employed 68.3%
Unemployed 3.2%
Not In Labor Force 28.5%

1990 % Working Mothers:


Child < 6 Only 25.4%
Child 6-17 Only 35-4
Child < 6 & 6-17 13.3%
Nonworking Mothers 25.9%

Total Mothers 1,692

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

127
The Nonprofit Entrepreneur’s Handbook

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (6)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1990 % Industry Employment:
Agriculture/Forestry/Fishing 0.5%
Mining 0.0%
Construction 1.7%
Manufacturing :
Nondurable Goods 10.5%
Durable Goods 2.7%
Transportation 1. 9%
Communications & Public Utilities 2.1%
Wholesale Trade 2.1%
Retail Trade 13.4%
Finance/Insurance/Real Estate 9.8%
Services:
Business & Repair 8.3%
Personal 3.0%
Entertainment & Recreation 5.0%
Health 5.7%
Educational 14.7%
Other Professional & Related 16.5%
Public Administration 1.9%
Total 16,488

1990 % Occupation:
Executive & Managerial 16.6%
Professional Specialty 37.1%
Technical Support 3.0%
Sales 8.0%
Administrative Support 13.0%
Service: Private Household 0.3%
Service: Protective 0.8%
Service: Other 9.2%
Farming, Forestry & Fishing 0.3%
Precision Production, Craft & Repair 2.9%
Machine Operator, Assemblers & Inspectors 5.5%
Transportation & Material Moving 1.3%
Laborers 1.9%

White Collar Total 77.7%


Blue Collar Total 11-7%

Total Employed 16,487

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

128
Sample business plan

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (7)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1990 % Marital Status:
Total Male: 12,050
Never Married 52.2%
Married 36.4%
Separated 2.7%
Widowed 1.9%
Divorced 6.8%

Total Female: 11,842


Never Married 44.6%
Married 36.0%
Separated 2.4%
Widowed 8.4%
Divorced 8.6%

1990 Households by Type:


One Person Households 6,282
Two or more Person Households:
Family Households:
Married Couple 3,786
Male Householder 356
Female Householder 778
Nonfamily Households 1,902

1990 Family Households With Children


Married Couple Family 1,415
Male Householder 93
Female Householder 307

1990 Population by Household Type:


Family Households 14,349
Nonfamily Households 10,455

1990 Households With:


Children Under 18 1,833
Persons Over 65 2,225
Householder Over 65 1,996

1990 Average Fami lySize 2.85

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

129
The Nonprofit Entrepreneur’s Handbook

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (8)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1990 Median Home Value $500,001
1990 Average HomeValue $490,428
1990 Median Contract Rent $ 525
1990 Average Contract Rent $ 604

1990 Persons In Unit:


1 Person Unit: 6,282
2 Person Unit: 4,227
3 Person Units: 1,277
4+ Person Units: 1,316

1990 Housing Unit Counts:


Total Units 14,143
% Occupied 92.6%
% Vacant 7.4%
% Year Round 6.5%
% Seasonal 0.9%
Occupied Units 13,102
% Owner Occupied 16.0%
%Renter Occupied 84.0%
Vacant Units 1,041
% Year Round of Vacant Units 88.0%
% Seasonal of Vacant Units 12.0%

1990 Total Housing Units in Structure 14,143


1, Detached 0.2%
1, Attached 0.2%
2, 1.0%
3-9 15.4%
10 - 49 53.7%
50 + 28.6%
Mobile Home or Trailer 0.0%
Other 0.9%

1990 Housing Units by Year Built 2,001


Built 1985 to March, 1990 1.9%
Built 1980 to 1984 3.6%
Built 1970 to 1979 2.0%
Built 1960 to 1969 8.0%
Built 1950 to 1959 2.1%
Built 1949 or Earlier 82.3%

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

130
Sample business plan

Strategic Mapping, Inc.

MBDC American Profile 07/12/95


Market Stats Report (9)
AREA 1 = ZIP CODE 10012

************************************’************************************
AREA 1
Description
*************************************************************************
1990 % Means of Transportation to Work:
Car, Truck or Van:
Drove Alone 5.7%
Carpooled 3.4%
Public Transportation 46.2%
Other Means 37.1%
Worked at Home 7.6%

1990 % Travel Time to Work:


0 - 14 Minutes 25.3%
15 - 29 Minutes 39.3%
30 - 59 Minutes 30.5%
60 - 89 Minutes 3.0%
90 + Minutes 1.9%

1990 Households by Number of Vehicles:


1 Vehicle 2,589
2 Vehicles 163
3 Vehicles 23
4 Vehicles 0
5 or More Vehicles 0

1. 0. 0 : Definition by ZIP

Copyright 1994 Strategic Mapping, Inc. All rights reserved. (800) 328 - 6667

131