The Concept
BikeArt’s mission is to offer functional items and artwork made from recycled bicycle parts. Steve’s wife Shoodnt will create the artwork. The featured products include wall clocks as well picture frames, table tops, chair, table, mobiles wind chimes and book ends.
BikeArt is a separate kiosk that will be located in the Valley River Mall. BikeArt can display larger items on the adjacent floor space thanks to the lease’s outstanding terms and conditions. This will help increase sales since the mall’s walk-through traffic is high.
BikeArt expects to reach profitability in the ninth month and make profits of almost $40,000 per year by the third.
Beginnings
The first month will serve to set up the kiosk, and get things going. During this month the part-time employees will be hired and trained. During the first month, sales will be slow. From the second month, sales will gradually increase due to the increased number of customers who visit the kiosk.
Startup costs total $45,000 This will be financed through $25,000 put forward by Steve Useitagyen as equity and another $20,000 in a long-term small business loan.
The Company
Steve Useitagyen, the sole proprietor of the company, will operate it.
Steve Useitagyen has the qualifications to work in this niche. The University of Portland awarded him a combined degree in art design and business administration. Steve worked in a bicycle shop throughout college. He started as a mechanic and moved on to sales. The shop was then managed by Steve for two years.
BikeArt plans to employ three parttime employees to manage the kiosk. Steve will oversee the hiring, payroll and purchasing.
The Market
BikeArt will target 2 market segments: bike enthusiasts and industrial artists. Eugene is home to both of these demographics. BikeArt has chosen to focus on these two types of people because they are likely to be the largest consumers of this type work.
BikeArt has many competitors:
- Additional retailers are available in the shopping center.
- Galeries of art
- Bicycle shops.
BikeArt will leverage its competitive advantage of existing in a niche market by being the only retailer that exclusively deals with bicycle artwork. You can have your own display in the middle if a mall with lots of people.
Success
The company intends to slowly grow and to establish a sustainable level sales and cash flow before expanding. BikeArt will open other kiosks in Salem Corvallis and Portland once this is accomplished. The expansion will occur after year 3.
Break-even Analysis suggests that $15,212 of monthly revenue is required in order to reach the breakeven point. BikeArt’s products will have a price range of $40 to $500 per piece. This is based on a desired net profit margin of 12%. BikeArt’s products can be priced between $40 and $500 per piece, as they are locally created pieces of art.
Forecasts indicate that the business will be profitable by month nine. The revenues are expected to reach $147,000 and profits will reach $35,500 at year end.
1.1 Mission
BikeArt’s mission is to provide the customer with functional items and art work made out of recycled bicycle parts. We exist to attract and maintain customers. This maxim will guide everything else. Our services will exceed our customers’ expectations.
1.2 Objectives
The following objectives are set for the initial three years of operation
- To create a product-based kiosk whose primary goal is to exceed customer’s expectations.
- Every year, there is a 20% increase in product sales.
- To develop a sustainable retail outlet that sells artwork and functional items made out of recycled parts.