Executive Summary
Chill Outside is an outdoor furniture business that has a distinct focus on producing a wide variety of products. We've honed in on creating pieces that are durable and need little to no upkeep. Chill Outside has become considerably successful in its short lifespan. We attribute this to our unique yet cost-friendly designs. By using raw materials such as Poplar, Silver Maple, Aluminium, White Oak, Alloy, and Pine, we've been able to undercut our industry rivals whilst maintaining high-quality standards.
What sets our business apart from the competition is our approach to design. We've recruited some of the very best when it comes to designing cutting-edge furniture that turns heads. Simply put, our product offering is primarily for the more eclectic customer who has a taste for the unique.
That being said, our main customer base is likely to be relatively young and trendy, but may not have the budget to purchase outdoor furniture for $2,000.
We've invested a large portion of our profits into marketing Chill Outside. Given the infancy of the business, we have a distinct focus on social media marketing. This is primarily because digital marketing is infinitely less expensive than traditional marketing methods. Beyond that, we're able to gain data-based insights into the effectiveness of our tactics.
Our highly talented team has a vested interest in the home and furniture industry in one way or another. This collective passion for solving the wants and needs of our customers has allowed us to build the reputation of being a trustworthy company that puts its customers first.
We believe that an investment of $300,000 will allow us to increase our production x3 and enable us to beef up our marketing efforts. We'll also be able to recruit more talented outdoor furniture designers.
Outdoor Living Co. is seeking $150,000 in start-up or growth capital to fund operations, marketing, and staffing in the first 12 months.
Financial highlights:
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Revenue | $740,000 | $1,100,000 | $1,560,000 |
| Gross margin | 46% | 46% | 46% |
| Net profit / (loss) | $12,200 | $70,000 | $145,800 |
Company Overview
Outdoor Living Co. is a outdoor furniture manufacturer & retailer founded by Richard and Susan Clarke, operating as a LLC. Headquartered in Atlanta, Georgia, USA, Outdoor Living Co. was established to serve the growing demand for specialist services in this sector.
Mission: To deliver exceptional value to our customers through expertise, reliability, and a commitment to continuous improvement.
Business objectives:
| Period | Target |
|---|---|
| Year 1 | Establish brand, acquire initial client base, achieve operational break-even |
| Year 2 | Expand service offering, grow revenue by 50%, hire additional staff |
| Year 3 | Establish market position, target new geographic or demographic segments |
Chill Outside was founded by Edward Riley and Lucy McGreen in 2020, making it one of the youngest outdoor furniture businesses in Illinois. The company is registered as an LLC in the state of Chicago.
Edward Riley's business prowess paired with Lucy’s experience as a furniture designer have propelled Chill Outside to great heights in a relatively short amount of time. Edward and Lucy are the CEO and Head Designer respectively.
We first began operations out of Edward’s garage and were later sponsored by a 272,000 sq. ft. warehouse by the Business Council of Illinois. This sponsorship has been instrumental in our success.
Chill Outside was founded on the belief that outdoor furniture designs had become stagnant and needed a new lease of life.
The business's primary mission is to provide individuals with unexampled outdoor furniture at reasonable prices. Our greatest achievement has been generating a profit of $91,000 in just two weeks. This has proven to us that Chill Outside has what it takes to make it to the big leagues.
The business currently has 9 members of staff, which is far below the average Chicago-based outdoor furniture business. To date, we have assets worth $642,000 which include inventory, raw materials, and equipment.
Market & Customer Analysis
The global outdoor furniture industry has been showing signs of life for decades. It's currently valued at over $45 billion and is poised to reach at least $ 70 billion over the next 6 years. This indicates an impressive growth rate of just over 5% in that period.
The US market is showing similar signs of growth. With a current market size of just over $19 billion and a forecasted worth of $29 billion over the same 6-year period, it's clear that the local market is flourishing too.
Despite our forward-thinking approach to furniture, we still evaluate the emerging trends in the market to ensure that we don't fall behind in this dynamic and competitive industry. The trends that we've picked up on include the use of environmentally friendly materials, indoor-quality finishes, and unusually bold colors (which we make use of often).
We continuously revise our marketing strategy to ensure that we can continue to take advantage of the opportunities in the ever-evolving marketplace.
A market analysis is complemented by a customer analysis, ultimately setting a foundation for the latter parts of your documents. Let's have a look at how to go about writing your customer analysis.
Customer analysis:
Gaining insights into what our target customers’ outdoor furniture requirements are has been challenging. However, after some trial and error, we believe we have an accurate profile of our ideal customers. This thorough understanding of our target market's pain points and preferences has led to high levels of customer satisfaction.
Our target audience is typically between the ages of 20 to 40 years old. According to our year-long survey campaign, our customers have a median household income of $13,000 per annum.
This indicates that our customers are generally low - middle-income earners. However, almost 31% of our respondents claim to have an income of over $100,000 per annum. Our team has concluded that our outdoor furniture products appeal to just about anyone, which has always been our goal.
Our customers aren't just based in Illinois, or even the greater Chicago for that matter. Chill Outside’s online store receives orders from just about everywhere in the US. Given the significant demand, we believe there exists great potential for us to go global in the near future.
We're more than satisfied with the repeat business we've been seeing from the wholesalers and retailers. This customer segment has been instrumental in helping us turn over inventory consistently.
Competitor analysis:
| Competitor | Strengths | Weaknesses |
|---|---|---|
| Brown Jordan | Established brand, wide reach | Higher price point, less personalised |
| Restoration Hardware (RH) | Strong marketing, national presence | Generic offering, less specialist focus |
| POLYWOOD | Competitive pricing | Lower service quality, limited expertise |
Outdoor Furniture Manufacturer & Retailer's competitive edge: Specialist expertise, personalised service, and a clear focus on the underserved segment of the market set us apart from the established players listed above.
SWOT analysis:
| Positive | Negative | |
|---|---|---|
| Internal | Strengths: Specialist expertise; experienced founder; strong client relationships; differentiated positioning | Weaknesses: Limited brand recognition as a new entrant; single location; reliance on founder capacity in early years |
| External | Opportunities: Growing market demand; underserved niche segments; digital marketing reach; referral network growth | Threats: Established competitors with greater resources; economic downturn reducing discretionary spend; regulatory changes |
Sales & Marketing Plan
We've developed a multifaceted sales plan that has enabled us to exceed our targets for the previous two financial years. By diversifying our sales avenues, we've been able to serve various market segments.
Granted, homeowners remain our most profitable customers. However, retailers, funeral homes, wedding venues, and corporations have been growing interested in what Chill Outside has to offer. Our sales agent has forecasts that these segments may make up over 70% of our sales within the next 8 years.
Since day one, we knew a web store would be essential for the success of our business. This has resulted in at least 12% of our sales thus far. An added advantage of e-commerce is that we don't need to have the inventory on hand - a single product image can translate to dozens of sales.
We also offer customers who purchase over $700 a 5% discount on a range of outdoor furniture products. This promotional tactic has been effective in that it encourages upselling. Whereas establishments that are bound to spend over $4000 get a 5% discount.
Additional marketing notes:
Our marketing plan is based fundamentally on the main pillars of digital marketing. Social media is the backbone of modern-day marketing.
Fun Fact: Over 75% of US-based businesses use social media to promote their businesses.
Our Chief Marketing Officer has completed 9 social media management courses to complement his marketing qualification. This has made us a force to be reckoned with in terms of building a solid social media following. Our marketing messages are tailored to engage with our ideal customers and the public in general.
Running social media ads is more complicated than one would initially think. Our proficiency in creating effective adverts with flawless photography and graphics has made a mark, particularly on Instagram. Ever since we hired Alex Maldonado, one of the most coveted photographers in Chicago, we’ve been able to differentiate ourselves from the other outdoor furniture businesses in the entire state. Working with Alex has also helped us from an influencer marketing perspective.
Although we're largely dependent on social media, we don't discount the effectiveness of traditional marketing methods. One can't deny that having a 30-second television ad does come with bragging rights. According to Simplilearn, traditional advertising has more of an impact than digital marketing.
The truth is, social media and traditional marketing used in unison will produce the best results.
Our desired investment will allow us to venture into the world of magazine, newspaper, and perhaps even television ads.
Regardless, the word is spreading about Chill Outside. We've accrued hundreds of happy customers who have given us favorable feedback. Our customers' friends and family members will wonder where their loved ones got such unique outdoor furniture from - and we'll build yet another relationship.
Operating Plan
Personnel Role Task Liam White Warehouse Manager
- Overseeing all warehouse staff
- Managing the storage of raw materials and inventory Amy Solomon Administrative Assistant
- Organizing all documentation and data Fletcher Brighton Head Carpenter/Welder
- Overseeing the practical process of bringing our designs to life Ashley White Design Assistant
- Working closely with the head designer to come up with more cutting-edge outdoor furniture Susan Swank Graphics Designer
- Working closely with our marketing manager and commissioned photographer to create engaging graphics
Management Team
We have built up a skilled and driven executive team that has enabled us to stand out from the competition and thrive in the marketplace. Our management team is one facet of our business that most likely won't require any reshuffling or revision in the near future. We're confident that we have an A-team that's going to stick together and lead our lower-level staff.
CEO, Edward Riley
Edward Riley is the CEO and co-founder of Chill Outside. His business acumen has enabled us to grow a successful business that has a distinct and direct vision - creating something different. His vast professional experience in several executive roles has given him the ability to run a business in just about any industry. His natural prowess as a business professional is supported by an MBA from the prestigious Massachusetts Institute of Technology.
Head Designer, Lucy McGreen
Lucy is the creative force behind the business. Her passion for furniture design, in general, has given us a much-needed edge, ultimately differentiating us from our competitors. She's also one of the most coveted furniture designers in the world, having been nominated for the SIT Furniture Design Awards on two separate occasions. Ironically, she completed her interior design qualification at Stanford University. So she knows the industry inside out.
CFO, Leon Browne
Leon Browne is a top accountant with an impressive educational and professional record. After having completed his qualification at Berkeley, he did the books for Outdoor Warehouse - making him the perfect fit for an outdoor-focused business.
HR, Lucia Sweeney
As far as HR managers go, Lucia ticks all the boxes. Recruitment, onboarding, training, and disciplinary guidelines are her forte. What's special about Lucia is her leadership skills and ability to bring the most from all members of staff, including our management team. Emotional intelligence and a positive energy are things you can't teach. She does, however, hold a formal HR qualification from Duke University.
Sales Manager, Gerald Kent
When it comes to building relationships with retailers, wholesalers, private buyers, restaurants, hospitals, and just about any other establishment that needs outdoor furniture, Gerald is up there with the best. He could sell you firewood during a heatwave. Since coming on board, Gerald has facilitated over $1,200,000 in sales.
Financial Plan
Projected Profit or Loss Statement
Year 1 Year 2 Year 3 Sales $90,000 $170,000 $300,000 Direct Cost of Sales $20,500 $30,000 $82,000 Production Payroll $0 $0 $0 Other $0 $0 $0 Total Cost of Sales $20,500 $30,000 $82,000 Gross Margin $69,500 $140,000 $218,000 Gross Margin % 77% 82% 73% Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $20,000 $40,000 $40,000 Advertising/Promotion $800 $1,000 $1,000 Travel $0 $0 $0 Miscellaneous $500 $500 $500 Total Sales and Marketing Expenses $21,300 $41,500 $41,500 General and Administrative Expenses
General and Administrative Payroll $20,000 $40,250 $100,250 Sales and Marketing and Other Expenses $0 $0 $0 Depreciation $1,000 $1,000 $1,000 Dues and Subscriptions $200 $200 $200 Professional Fees $300 $300 $300 Rent $2,000 $2,000 $2,000 Software Purchases $0 $15,000 $0 Insurance $2,000 $2,000 $2,000 Telephone and Internet Access $2,000 $2,000 $2,000 Utilities $400 $400 $400 Miscellaneous $0 $0 $0 Payroll Taxes $500 $1,200 $3,000 Other General and Administrative Expenses $0 $0 $0 Total General and Administrative Expenses $28,400 $64,350 $111,150 Other Expenses:
Other Payroll $0 $0 $0 Consultants $0 $0 $0 Contract/Consultants $0 $0 $0 Total Other Expenses $0 $0 $0 Total Operating Expenses $28,400 $64,350 $111,150 Profit Before Interest and Taxes $19,800 $102,840 $225,410 EBITDA $19,800 $103,860 $226,430 Interest Expense $800 $3,632 $2,957 Taxes Incurred $0 $24,802 $56,540 Net Profit $19,000 $34,150 $65,350 Net Profit/Sales 21% 20% 22%
Projected Cash Flow Statement Cash Received Year 1 Year 2 Year 3 Cash from Operations
Cash Sales $90,000 $170,000 $300,000 Cash from Receivables $0 $0 $0 Subtotal Cash from Operations $90,000 $170,000 $300,00 Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $20,000 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $110,000 $170,000 $300,000 Expenditures
Expenditures from Operations
Subtotal Spent on Operations $48,900 $94,350 $111,150 Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $800 $0 $0 Principal Repayment of Current Borrowing $10,000 $10,000 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $59,700 $104,350 $193,150 Net Cash Flow $50,300 $65,650 $106,850 Cash Balance $19,000 $34,150 $65,350 Projected Balance Sheet Assets Year 1 Year 2 Year 3 Current Assets
Cash $90,000 $170,000 $300,000 Accounts Receivable $0 $0 $0 Other Current Assets $0 $0 $0 Total Current Assets $90,000 $170,000 $300,000 Long-term Assets $10,000 $9,000 $8,000 Accumulated Depreciation $1,000 $1,000 $1,000 Total Long-term Assets ($1,000) ($1,000) ($1,000) Total Assets $100,000 $179,000 $308,00 Liabilities and Capital
Current Liabilities
Accounts Payable $0 $0 $0 Current Borrowing $20,000 $10,000 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $20,000 $10,000 $0 Long-term Liabilities $0 $0 $0 Total Liabilities $20,000 $10,000 $0 Paid-in Capital $30,000 $30,000 $30,000 Retained Earnings ($20,000) ($30,000) $41,000 Earnings ($12,000) $44,000 $160,000 Total Capital ($2,000) $44,000 $231,000 Total Liabilities and Capital $18,000 $54,000 $231,000 Net Worth $80,000 $169,00 $308,000
Wrapping up the Outdoor Furniture Business Plan
Sofa so good…
By now you're more than well equipped to write a business plan that will make investors swoon. Beyond that, you'll have a compass that will navigate you through the rough terrains of the outdoor furniture industry. You’re bound to take a seat at the winner's circle if you take advantage of the information contained in this business plan guide. A formidable business plan isn't enough, however. You'll also need to put in some serious work in order to avoid being yet another failed outdoor furniture business. If you need additional assistance in terms of drafting your outdoor furniture business plan, our experienced team is on hand to provide you with one-on-one consultation!
3-year profit & loss projection:
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $740,000 | $1,100,000 | $1,560,000 |
| Materials, production labour and overhead | $399,600 | $594,000 | $842,400 |
| Gross profit | $340,400 | $506,000 | $717,600 |
| Gross margin | 46% | 46% | 46% |
| Salaries and wages | $148,000 | $220,000 | $312,000 |
| Marketing and advertising | $51,800 | $77,000 | $109,200 |
| Rent and utilities | $84,000 | $84,000 | $88,200 |
| Other operating costs | $44,400 | $55,000 | $62,400 |
| Total operating expenses | $328,200 | $436,000 | $571,800 |
| Net profit / (loss) | $12,200 | $70,000 | $145,800 |
Break-even analysis:
- Estimated monthly fixed costs: $27,400
- Monthly revenue required to break even: $59,500
- Break-even is projected to be reached within the first 12–18 months of trading.