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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 designers to create bold, eye-catching furniture. 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 $400,000 will allow us to nearly double our production and enable us to beef up our marketing efforts. We'll also be able to recruit more talented outdoor furniture designers.
Chill Outside is seeking $400,000 in growth capital to fund operations, marketing, and staffing in the first 12 months.
Financial highlights:
| Metric | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Revenue | $1,158,740 | $1,601,460 | $2,084,930 |
| Gross margin | 50% | 52% | 53% |
| Net profit / (loss) | ($159,922) | $14,897 | $175,529 |
Company Overview
Chill Outside is an outdoor furniture manufacturer and retailer founded by Edward Riley and Lucy McGreen, operating as an LLC. Headquartered in Chicago, Illinois, USA, Chill Outside was established to serve the growing demand for distinctive, affordable outdoor furniture.
Mission: To deliver exceptional value to our customers through expertise, reliability, and a commitment to continuous improvement.
Business objectives:
| Period | Target |
|---|---|
| Year 1 | Use the $400,000 to nearly double production, expand marketing and recruit designers |
| Year 2 | Grow revenue by 38% to $1,601,460 and return to net profit; grow wholesale and retail accounts |
| Year 3 | Grow revenue to $2,084,930 and net profit to $175,529; build sales to venues and corporations |
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 Illinois.
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 later moved into a warehouse sponsored 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 $91,000 in sales 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 13 members of staff, which is small compared with many Chicago-based outdoor furniture businesses. 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, and it is expected to keep growing steadily over the next few years.
The US market is showing similar signs of growth, and 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.
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 area 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 luxury brand, long heritage | Premium price point |
| Restoration Hardware (RH) | Strong brand, national showroom presence | Premium price point; broad home-furnishings focus |
| POLYWOOD | Wide dealer network, low-maintenance recycled materials | Range built around one core material |
Chill Outside'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: Co-founders combining business leadership and furniture design; bold, distinctive designs at accessible prices; low-upkeep materials; online store with national reach; repeat wholesale and retail accounts | Weaknesses: Young brand (founded 2020); small team of 13; limited production capacity; heavy reliance on social media marketing |
| External | Opportunities: Commercial buyers (retailers, venues, corporations); demand for eco-friendly materials and bold colours; national and international online sales; print and TV advertising with new investment | Threats: Established national brands with greater resources; economic downturn reducing discretionary spend; raw material price swings |
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 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. Establishments that spend over $4,000 also 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.
Our marketing manager 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
Key personnel:
- Liam White (Warehouse Manager) — overseeing all warehouse staff and 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 bold new outdoor furniture designs
- 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
Gerald is up there with the best at building relationships with retailers, wholesalers, private buyers, restaurants, hospitals, and just about any other establishment that needs outdoor furniture. 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 (in USD):
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Sales | $1,158,740 | $1,601,460 | $2,084,930 |
| Direct Cost of Sales | $352,300 | $457,500 | $590,800 |
| Production Payroll | $228,600 | $304,100 | $389,700 |
| Total Cost of Sales | $580,900 | $761,600 | $980,500 |
| Gross Margin | $577,840 | $839,860 | $1,104,430 |
| Gross Margin % | 49.9% | 52.4% | 53.0% |
| Operating Expenses | |||
| Sales and Marketing Expenses | |||
| Sales and Marketing Payroll | $118,700 | $142,300 | $167,900 |
| Advertising/Promotion | $64,800 | $78,400 | $96,300 |
| Travel | $5,400 | $7,100 | $8,800 |
| Other Sales and Marketing Expenses | $21,600 | $24,300 | $27,900 |
| Total Sales and Marketing Expenses | $210,500 | $252,100 | $300,900 |
| General and Administrative Expenses | |||
| General and Administrative Payroll | $236,400 | $252,800 | $268,500 |
| Depreciation | $93,429 | $99,429 | $104,643 |
| Dues and Subscriptions | $2,100 | $2,300 | $2,500 |
| Professional Fees | $22,400 | $23,900 | $25,700 |
| Rent | $54,000 | $55,600 | $57,300 |
| Software Purchases | $9,600 | $11,200 | $12,800 |
| Insurance | $16,900 | $19,800 | $23,400 |
| Telephone and Internet Access | $4,800 | $5,300 | $5,900 |
| Utilities | $22,800 | $28,400 | $33,600 |
| Miscellaneous | $8,700 | $10,100 | $11,800 |
| Payroll Taxes | $49,614 | $59,432 | $70,218 |
| Total General and Administrative Expenses | $520,743 | $568,261 | $616,361 |
| Total Operating Expenses | $731,243 | $820,361 | $917,261 |
| Profit Before Interest and Taxes | ($153,403) | $19,499 | $187,169 |
| EBITDA | ($59,974) | $118,928 | $291,812 |
| Interest Expense | $6,519 | $4,602 | $2,529 |
| Taxes Incurred | $0 | $0 | $9,111 |
| Net Profit | ($159,922) | $14,897 | $175,529 |
| Net Profit/Sales | (13.8%) | 0.9% | 8.4% |
Projected Cash Flow Statement (in USD):
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $811,118 | $1,121,022 | $1,459,451 |
| Cash from Receivables | $332,472 | $462,730 | $606,140 |
| Subtotal Cash from Operations | $1,143,590 | $1,583,752 | $2,065,591 |
| Additional Cash Received | |||
| New Investment Received | $400,000 | $0 | $0 |
| Subtotal Cash Received | $1,543,590 | $1,583,752 | $2,065,591 |
| Expenditures | |||
| Expenditures from Operations | |||
| Cash Spending | $633,314 | $758,632 | $896,318 |
| Bill Payments | $580,833 | $716,037 | $892,879 |
| Subtotal Spent on Operations | $1,214,147 | $1,474,669 | $1,789,197 |
| Additional Cash Spent | |||
| Long-term Liabilities Principal Repayment | $21,000 | $22,800 | $24,600 |
| Purchase Other Current Assets | $44,000 | $86,000 | $78,000 |
| Purchase Long-term Assets | $168,000 | $42,000 | $36,500 |
| Dividends | $0 | $0 | $40,000 |
| Subtotal Cash Spent | $1,447,147 | $1,625,469 | $1,968,297 |
| Net Cash Flow | $96,443 | ($41,717) | $97,294 |
| Cash Balance | $154,843 | $113,126 | $210,420 |
Projected Balance Sheet (in USD):
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Assets | |||
| Current Assets | |||
| Cash | $154,843 | $113,126 | $210,420 |
| Accounts Receivable | $46,350 | $64,058 | $83,397 |
| Inventory and Other Current Assets | $312,000 | $398,000 | $476,000 |
| Total Current Assets | $513,193 | $575,184 | $769,817 |
| Long-term Assets | |||
| Long-term Assets | $654,000 | $696,000 | $732,500 |
| Accumulated Depreciation | ($205,429) | ($304,858) | ($409,501) |
| Total Long-term Assets | $448,571 | $391,142 | $322,999 |
| Total Assets | $961,764 | $966,326 | $1,092,816 |
| Liabilities and Capital | |||
| Current Liabilities | |||
| Accounts Payable | $52,686 | $65,151 | $80,712 |
| Subtotal Current Liabilities | $52,686 | $65,151 | $80,712 |
| Long-term Liabilities | $64,000 | $41,200 | $16,600 |
| Total Liabilities | $116,686 | $106,351 | $97,312 |
| Paid-in Capital | $520,000 | $520,000 | $520,000 |
| Retained Earnings | $485,000 | $325,078 | $299,975 |
| Earnings | ($159,922) | $14,897 | $175,529 |
| Total Capital | $845,078 | $859,975 | $995,504 |
| Total Liabilities and Capital | $961,764 | $966,326 | $1,092,816 |
| Net Worth | $845,078 | $859,975 | $995,504 |
3-year profit & loss projection:
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $1,158,740 | $1,601,460 | $2,084,930 |
| Materials, production labour and overhead | $580,900 | $761,600 | $980,500 |
| Gross profit | $577,840 | $839,860 | $1,104,430 |
| Gross margin | 50% | 52% | 53% |
| Salaries, wages and payroll taxes | $404,714 | $454,532 | $506,618 |
| Marketing and advertising | $91,800 | $109,800 | $133,000 |
| Rent and utilities | $76,800 | $84,000 | $90,900 |
| Other operating costs (incl. depreciation) | $157,929 | $172,029 | $186,743 |
| Total operating expenses | $731,243 | $820,361 | $917,261 |
| Interest and income tax | $6,519 | $4,602 | $11,640 |
| Net profit / (loss) | ($159,922) | $14,897 | $175,529 |
Break-even analysis:
- Estimated monthly fixed costs: $60,900
- Monthly revenue required to break even: $122,100
- Break-even is projected to be reached in Year 2, as sales grow past this level.
That is the example. For your own business, the outdoor furniture business plan template walks you through each section.