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Plan Outline
Retail Tennis Shop Business Plan
Tennis Master Pro Shops, Inc.
Strategy and Implementation Summary
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5.1 Marketing Strategy
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5.1.1 Promotion Strategy
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5.1.2 Distribution Strategy
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5.1.3 Pricing Strategy
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5.2 Sales Strategy
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5.2.1 Sales Forecast
Tennis Master's sales forecasts are based upon certain assumptions:
- A new store will attain the "pro forma" sales level indicated by the summary in Appendix "E" within one year of opening.
- The timing of new stores added is in accordance with Tennis Master's expansion plan.
- The projections are figured by taking only 50% of stores added during a given year and projecting revenue at 80% of target on those stores only. This allows for the staggered opening schedules of stores throughout the year. It also doesn't expect any store to reach its full retail potential until at least year two. These assumptions are used consistently throughout this plan for both multi-year and single year growth.
The following table shows the effect of staggered franchise sales and corresponding retail revenue growth and royalty growth. The chart that precedes the table illustrates our volume projections for year one on a month-by-month basis. All unit costs represent the corresponding margins in that product or service. Franchise sales commissions are included as unit costs of franchise sales and are deducted from revenue in all sales forecasts.
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Unit Sales | |||
| Master Franchises | 10 | 20 | 10 |
| Franchise Stores | 60 | 120 | 200 |
| Royalties | 518,750 | 2,419,200 | 5,875,200 |
| Advertising Contribution | 389,062 | 1,814,400 | 4,406,400 |
| Wholesale Sales | 761,850 | 1,577,395 | 2,916,531 |
| Company Store Sales | 2,450,000 | 3,000,000 | 3,600,000 |
| Total Unit Sales | 4,119,732 | 8,811,135 | 16,798,341 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Master Franchises | £125,000.00 | £125,000.00 | £125,000.00 |
| Franchise Stores | £25,000.00 | £25,000.00 | £25,000.00 |
| Royalties | £1.00 | £1.00 | £1.00 |
| Advertising Contribution | £1.00 | £1.00 | £1.00 |
| Wholesale Sales | £1.00 | £1.00 | £1.00 |
| Company Store Sales | £1.00 | £1.00 | £1.00 |
| Sales | |||
| Master Franchises | £1,250,000 | £2,500,000 | £1,250,000 |
| Franchise Stores | £1,500,000 | £3,000,000 | £5,000,000 |
| Royalties | £518,750 | £2,419,200 | £5,875,200 |
| Advertising Contribution | £389,062 | £1,814,400 | £4,406,400 |
| Wholesale Sales | £761,850 | £1,577,395 | £2,916,531 |
| Company Store Sales | £2,450,000 | £3,000,000 | £3,600,000 |
| Total Sales | £6,869,662 | £14,310,995 | £23,048,131 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Master Franchises | £12,500.00 | £12,500.00 | £12,500.00 |
| Franchise Stores | £5,000.00 | £5,000.00 | £5,000.00 |
| Royalties | £0.00 | £0.00 | £0.00 |
| Advertising Contribution | £0.00 | £0.00 | £0.00 |
| Wholesale Sales | £0.70 | £0.70 | £0.70 |
| Company Store Sales | £0.30 | £0.30 | £0.30 |
| Direct Cost of Sales | |||
| Master Franchises | £125,000 | £250,000 | £125,000 |
| Franchise Stores | £300,000 | £600,000 | £1,000,000 |
| Royalties | £0 | £0 | £0 |
| Advertising Contribution | £0 | £0 | £0 |
| Wholesale Sales | £533,295 | £1,104,177 | £2,041,572 |
| Company Store Sales | £735,000 | £900,000 | £1,080,000 |
| Subtotal Direct Cost of Sales | £1,693,295 | £2,854,177 | £4,246,572 |