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Business Plan

Mark’dLifea venture of the 2014 CCS Entrepreneurship Class

Concord Christian School11704 Kingston PikeKnoxville, TN 37934(865) 966-9711 [email protected]

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I. Table of Contents

I. Table of Contents....................................................................................2

II. Executive Summary................................................................................3

III. General Company Description................................................................4

IV. Products and Services.............................................................................6

V. Marketing Plan........................................................................................7

VI. Operational Plan...................................................................................15

VII. Management and Organization.............................................................19

VIII. Startup Expenses and Capitalization....................................................21

IX. Financial Plan.......................................................................................22

X. Appendices............................................................................................25

XI. Refining the Plan...................................................................................26

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II. Executive Summary

Write this section last.

We suggest that you make it two pages or fewer.

Include everything that you would cover in a five-minute interview.

Explain the fundamentals of the proposed business: What will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?

Make it enthusiastic, professional, complete, and concise.

If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.

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III. General Company Description

We are a non-profit organization selling merchandise to raise money for the persecuted Christians around the world. Our sole purpose is to help these Christians through our business and educate others on what is happening, so that they will be encouraged to support this cause.

Mission Statement: Our mission is to provide the highest level of customer service, quality, and efficiency, while raising a substantial amount of awareness and funding for persecuted Christians around the world.

Company Goals and Objectives: We have, in our personal spheres of influence, roughly 18,600 people. If we sell to just 15% of these people, we could sell 2,790 shirts. At an average profit margin of $9 a shirt, we could raise $25,000 or more and create an exponentially larger awareness of the plight of persecuted Christians.

Business Philosophy:Our philosophy is to give the persecuted Christians in Iraq and around the world a hope that there are people out there that will help them and that are standing with them through their hardship. We will make them feel loved by their brothers and sisters in Christ and by God Himself. Our funding will go to help them get the supplies they need, and to increase awareness of their plight..

Customers:In order to raise awareness to the plight of persecuted Christians around the world, we will market to any person who would like to support the cause – predominately evangelical Christians.

Industry: While this industry is certainly not new, our focus on using it in support of a Christian-based cause is unique. We believe, because of the intense media coverage of events in the Middle East, that our niche is poised for tremendous growth both regionally and nationwide. While specific causes come and go, the plight of persecuted Christians is universal and ongoing. Our ability to adapt and refocus based on current events will help us remain relevant.

Company strengths and core competencies:

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We believe our cause is our single largest strength. Christians are passionate about how other Christians are being treated around the world and there is also a shared desire among people to feel like they are doing something, whether it is giving or drawing attention to the cause. Our mission accomplishes both.

Additionally, we believe people will see us as a cause within the larger cause – young people learning how to start and run a small business, showing initiative and responsibility. With our youth also comes a youthful energy, and an advanced knowledge of trends and technology, which will help us stay ahead of potential competitors.

Aside from those strengths, we will enjoy a number of competitive advantages, such as access to free facilities, equipment, professional services, labor, group-buying and much more.

Legal form of ownership: Markdlife will be a DBA of Concord Christian School, LLC – a Tennessee non-profit company.

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IV. Products and Services

T-ShirtsOur shirts will be special because they support a cause. They will also be comfortable because they are a premium-quality blended fabric. Our shirts give people a chance to be a part of something bigger – to bring awareness to the cause of persecuted Christians around the world.

Other ProductsAs our sales grow, we will work to introduce additional products to draw even more awareness to our cause, and to take advantage of current events. Such products may be car magnets, stickers, lapel pins, silicone bracelets and more.

PricingOur shirts will be priced at $15 for in-person sales or $18 (including shipping) for online sales.

Competitive AdvantageCurrently, our business faces limited competition, as there are only a handful of companies printing such designs. All those companies are web-based companies with prices ranging from $20-30 per shirt. Our biggest advantage is that, unlike all those purely profit-oriented companies, our sales benefit a worthy cause. Additionally, being a student-led company may create yet another cause that consumers will feel they are benefiting through their purchases.

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V. Marketing Plan

EconomicsIn our micro-market, described as our immediate spheres of influence, we have approximately 20,000 potential buyers. On a macro level, there are approximately 3.55 million potential buyers in our state, 37.4 million in our nine state region (TN, GA, AL, NC, SC, KY, TX, WV and VA), and nationally, there are more than 95 million possible buyers.

On a micro-level, because of our familiarity with the market, we feel we can easily sell to at least 45% of the potential buyers. As we expand out from our immediate spheres of influence, we believe our ability to reach the markets will decrease at each level due to lack of familiarity, increased competition, less interest in the cause and due to the increased costs of marketing to a larger audience. On a statewide basis, we believe we can sell to 1% of the market, or approximately 35,500 people. On a regional basis, 75,000 (0.2%) buyers seem possible. On a national level, 95,000 (0.1%) might be a reasonable expectation.

Due to current events, specifically in the Middle East, we believe there is a high interest in supporting persecuted Christians. By focusing our product marketing efforts toward evangelical Christians, we believe we will create a desire among them to participate visibly and financially in increasing awareness of the issue.

At the simplest level (our own spheres of influence), we believe we can sell 8,000 or more shirts. With a well-executed marketing plan, making use of social media and public relations, and expansion of our products and regional causes, we believe the growth potential for the Mark’dLife brand is virtually unlimited.

Below, we have anticipated some potential barriers to our market entry, as well as ways we intend to address those concerns.

High capital costs – Our single largest concern is the amount of cash it will take to purchase inventory and advertising. To meet that need, we intend to solicit investment in our company through investor presentations. We will prepare for those presentations by anticipating what questions potential investors will ask and by being knowledgeable.

High marketing costs – To reach large numbers of people using conventional advertising, it would require a large advertising budget. We believe we can reach our target audience using unconventional methods that will have little or no

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advertising costs. Among those methods will be social media, word of mouth, event sales, and more. Facebook will be a major network used in reaching customers. Mr. Bob Hart, a social media marketing professional, will serve as an advisor for our marketing efforts.

Youth – We expect some to say that we have no experience and that we don’t know how to have a successful business. To answer that objection, we will point out that we have more energy and passion, and that our youth helps our imagination be more active. Additionally, our youth means we have more time and less financial commitments to hinder our success. We also intend to rely on the support of a number of business professionals who will serve as mentors to us throughout the process. “Do not let anyone look down on you because of your youth.” – 1 Timothy 4:12

Competition – Based on our research, we recognize that there is some local competition in the form of a Morristown-based church. There are also a number of retailers selling similar products online. We will overcome local competition through efforts to promote our products outside our immediate sphere of influence, which the Morristown church has not done. In terms of online retailers, we will focus buyers on our intent to benefit the cause. Since there is nothing proprietary about our product, we recognize others may attempt to replicate our business. We believe a strong start will dissuade any local copy-cats. If there are successful like-minded competitors on a state or national level, then we will have also been successful, since our intent was to increase awareness and funding for the cause.

New ideas – We understand that our initial product is trendy and that trends come and go. We intend to be innovative by staying abreast of current events through broadcast news and relevant human interest resources. We will also hold monthly, company-wide, brainstorming sessions to generate new product ideas.

ProductOur initial product will be a t-shirt designed to draw awareness to the plight of Christians living in areas where they are being persecuted by ISIS, the Islamic State in Syria and Iraq. As we demonstrate success with the initial shirt, we expect to introduce additional shirts and products (wristbands, lapel pins, bumper stickers, etc) designed to draw awareness to persecuted Christians in this, and other, regions of the world.

Features This shirt will be a quality blended fabric, dark heather gray in color and will feature a golden-colored print. The Arabic letter “N” will be featured on the front

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of the shirt – identifying the wearer as a Christ-follower, as ISIS identifies them in the Middle East. The back of the shirt will feature a scripture passage (Mark 13:13), which discusses persecution of believers, and the Mark’dLife logo.

BenefitsBuyers will enjoy our shirt’s comfortable wear and stylish appeal.. They will also get a sense of pride in purchasing our shirt, because it gives them a way to publicly support a cause they believe to be important. And, that support will go beyond mere financial support to draw increased awareness of the issue. It is also likely they will get a sense that they are supporting another worthy cause, investing in the lives of young people who are learning about Christian business and philanthropy.

CustomersOur initial target market will be those Christians in our immediate spheres of influence – our churches, schools and community organizations. Beyond that initial reach, the demographics will be very similar.

Ages: 13 & upGender: Male and FemaleLocation: Knoxville MSAIncome Level: AllSocial Class: AllOccupations: AllEducation: Primarily High School and aboveOther Characteristics: Identify as Christians

Competition

Online: Zazzle.com, CafePress.com and SpreadShirt.comThe online retailers produce a wide variety of shirts without any emphasis on a specific niche. Without that emphasis, these companies are producing shirts in much smaller quantities, and therefore, not enjoying the reduced cost associated with bulk printing. Consequently, their pricing models are very high – ranging from $20-30 per shirt. Additionally, their business models are purely profit-driven, so none of that high price is going to benefit the cause.

B&M: First Baptist Church of Morristown

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Our only known B&M competitor will be First Baptist Church of Morristown (FBCM), located some 45-50 miles away in Morristown, TN. Like Mark’dLife, FBCM’s aim is to both raise awareness and funding for the cause. Unlike Mark’dLife, FBCM’s focus is exclusively on the issue of ISIS and Northern Iraq. Additionally, FBCM’s campaign is limited almost exclusively to their church congregation, and to those who happen to find out about the effort. FBCM has undertaken no efforts to market their shirts outside their own church.

NicheOur organization is unique because very few other organizations are working to bring attention to the plight of persecuted Christians like those being targeted by ISIS. We are targeting a specific audience and that will be our niche – evangelical Christian support for persecuted Christians.

Strategy

PromotionTo get the word out to customers, we intend to utilize both paid advertising and a coordinated public relations campaign, placing highest emphasis on those methods that are cost-free. Paid advertising will likely be limited to social media and internet advertising.

Cost-free methods of promotion will include word-of-mouth, product display (booths, events and conferences), media interviews (TV, radio, print and web), endorsements (pastors and other key leaders) and social media (Facebook, Twitter and Instagram). By focusing primarily on social media, we can reach a large percentage of the people in our target market in a cost effective manner.

Paid advertising will be primarily through web-based options, such as Facebook Ads, Google Ads and relevant website ad placement. We will allocate our advertising budget to mirror our expansion into wider markets.

In all our promotion efforts, whether paid or free, we want to project a mature and professional image – one of a group of young people who are educated, informed and caring.

As a part of Concord Christian School and First Baptist Concord, we are blessed to have the free support of FBC’s media team, which includes a professional graphic artist, a media representative and a video production staff. Dan Wilson, the graphic artist, has provided a series of Mark’dLife logo designs for our approval and will be providing final

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design work for the t-shirts we sell. Tiffany Roy, the media representative, will provide support in writing and distributing press releases and in coordinating media interviews. And, the video production team will help us produce professional quality promotional videos.

We intend to have a Customer Relationship Management system in place, in order to track sales, make subsequent sales more efficient and to provide easy access to a marketing database for future product releases.

Promotional BudgetPrior to and during the first three months of operations, we will focus most of our marketing efforts on free or low-cost strategies, including social media, pastor and leader endorsements, event appearances, press releases and media interviews. During this time, we will set aside 5% of all sales for advertising expenses we will incur in reaching the larger market. In a best case scenario, this set aside would result in $6,750 for use in marketing. In our worst case scenario, we would set aside $675. We will continue this set aside indefinitely.

PricingWe decided to sell our shirts for $15 if sold in-person or at events. Shirts sold via our website, or to be shipped, will be $18. We chose the $18 price point for online sales because it will cover shipping and handling costs, as well as postage supplies.

Our prices are not the most expensive, but are not the cheapest either. Most of our competitor’s prices seem unreasonably high, therefore, we set our prices lower so all people could buy. Our research indicated that most buyers are receptive to prices in this range, especially considering it supports a worthy cause.

Proposed LocationMark’dLife will primarily do business online, where customers will purchase items. Buyers can also make their purchases in person, when we setup booths/tables at churches, fairs, conventions and other events.

By focusing our efforts on events that are Christian-oriented, we believe it will help us maintain a positive image for the Mark’dLife brand. Online competitor’s similar products are hosted on retail websites and surrounded by a variety of products that convey a non-Christian worldview. To maintain the integrity of our Mark’dLife brand, we will utilize our own website for sales.

Warehousing and administrative operations will take place in First Baptist Concord facilities located at 11704 Kingston Pike.

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Distribution ChannelsRetail – We will offer our products for sale at churches and Christian events, focusing first on opportunities that exist within our immediate spheres of influence, then expanding out as opportunities are available.

Direct – Our products will be available for online purchase via our website at www.MarkdLife.com.

Wholesale – We will consider expansion to wholesale sales once our local market is established. Such opportunities may exist with organizations such as Lifeway, Cedar Springs Bookstores, ChristianBook.com, concert tours, and more.

Sales Forecast

Best Case Worst Case

Month

% Projected Sales to Target Market

# SoldAvera

ge Price

Total Sales

% of Original

Projection#

SoldAvera

ge Price

Total Sales

Oct 22% 2,000 $15 $30,000 10% 200 $15 $3,000Nov 56% 5,000 $15 $75,000 10% 500 $15 $7,500Dec 22% 2,000 $15 $30,000 10% 200 $15 $3,000Jan 25% 23,750 $18 $427,50

0 4% 950 $18 $17,100

Feb 30% 28,500 $18 $513,000 4% 1,140 $18 $20,52

0Mar 25% 23,750 $18 $427,50

0 4% 950 $18 $17,100

Apr 15% 14,250 $18 $256,500 4% 570 $18 $10,26

0May 5% 4,750 $18 $8,550 4% 190 $18 $3,420

TOTAL

104,000

$1,768,050 4,700 $81,90

0

* Our marketing strategy will be primarily focused on our local (micro) market during October, November and December, and on the larger total market January through May.

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VI. Operational Plan

ProductionA local screen printer will be contracted to produce our shirts. Our contract will specify quantities, sizes, shirt , and ink colors using commercial color specifications. Proofs of artwork, scaled to size, will be required prior to our approval for printing. Vendors will be required to provide shirt blanks to assure quality and sizing. Upon receipt of finished products, our Inventory team will quality-inspect the products for adherence to our specifications.

LocationWe are blessed to be part of an organization with substantial facilities that are available for our use, free of charge. While we have not yet identified the specific room we will occupy, following are the criteria we desire – each is followed by a notation of its relative importance on a scale of 1-4, with 1 being the most essential.

Physical requirements: 350 square feet or larger - 2 Keyed entry - 1 Ground floor entry - 1 Exterior entry - 4 Near loading or parking area - 3 Semi-exclusive use - 2 Climate controlled - 3 Electric service - 1 Internet service - 2

PersonnelMark’dLife will have eleven unpaid, volunteer employees – all primarily unskilled labor.

During this planning process, four key areas of human resource needs have been identified, Advertising/Public Relations, Sales, Inventory and Finance. Based on their own stated preferences and observed skills, each employee has been assigned primary responsibilities in one of those four areas of operations (see Organizational Chart).

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Job descriptions have been created for each of these assignments, and are included in the appendix to this plan.

Initially, most order processing will take place during class hours. In the event orders outpace our ability to fulfill them during that time, or for off-site event staffing, staff schedules will be prepared.

InventoryWe will secure an initial inventory of finished goods valued at approximately $3,000 and will seek to maintain an average inventory of approximately $1,500. Periods of largest inventory balances will be around event exhibitions or church sales.

Due to small initial order quantities, inventory turnover is expected to be as high as 5,200% in the early months, and will then decrease as we reach a point of saturation in our target markets, or as we have the capacity to place larger inventory orders.

Both vendors, listed in the Supplier section, require 5-7 day production time. Advance planning for event exhibitions and church sales will be essential in order to maintain adequate inventory.

SuppliersWe have identified three primary vendors for production of our products. Each company is capable of producing virtually any quantity of our shirts within a 5-7 day window. All are well established and have a history of providing good service and quality finished goods. Each vendor offers Net-15 credit terms based on their experience with our parent organizations, First Baptist Concord and Concord Christian School.

Threds Kenesaw Promotions Bacon & Company 10529 Lexington Drive 8331 E. Walker Springs Lane 200 W. Summit Hill Drive Knoxville, TN 37932 Knoxville, TN 37923 Knoxville, TN 37902 (865) 525-2830 (865) 544-1955 (865) 523-9181 [email protected] [email protected]

[email protected] www.threds.com www.kenesaw.com www.baconco.com

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VII. Management and Organization

The CEO (listed in the organizational chart below) will be responsible for the day-to-day operations of the business. The CEO’s primary responsibility will be holding the departments accountable for their assigned tasks. Our CEO possesses a variety of leadership skills through student organizations such as Student Government Association, National Honor Society, and team athletics.

In the event that the CEO is unable to fulfill his responsibilities, our Executive Vice President, Courtney Jackson, will serve in this capacity.

Organizational Chart

Professional and Advisory SupportBoard of DirectorsBrian Turbyfill, President & CEOCourtney Jackson, EVP – Inventory/ShippingMaeBeth Harris, VP - Advertising/Public RelationsJosh Malone, VP – Sales

Brian Turbyfill

Josh MaloneVP - Sales

MaeBeth Harris

Courtney Jackson

Bryce KennyVP – Finance

Courtney Jackson

Bryce KennyAVP – Adv/PR

Abraham Gale

Noah CollinsAVP - Finance

Lise MeyersAdv/PR

Specialist

Brian Turbyfill

Elizabeth Farmer

Hunter Templin

Noah HooverSales Rep

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Bryce Kenny, VP - Finance

Management Advisory BoardSteve Arnold, EntrepreneurDan Wilson, Graphic Design Ruston Pierce, Headmaster School Tim Hood, Missions PastorDr. Eddie Brooks, Iraqi MissionsAshley Ogle, Accounting Bob Hart, Social Media MarketingDr. John Avant, Senior PastorLinda Meyers, MarketingTiffany Roy, Media Relations

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VIII. Startup Expenses and Capitalization

Itemized List of Startup Expenses

Capitalization

Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have.

Price Replace Debt Retained Cause

$15 7 4 1 3

Inventory T-Shirt Vendor $3,500

Banner VistaPrint.com 72Printing (Flyers) VistaPrint.com 136

Table Cloth WalMart 15Advertising Facebook.com 0Website Wix.com 97Contingencies 400

TOTALS 4,220

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IX. Financial Plan

The financial plan consists of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company's financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.

12-Month Profit and Loss ProjectionMany business owners think of the 12-month profit and loss projection as the centerpiece of their plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful.

Your sales projections will come from a sales forecast in which you forecast sales, cost of goods sold, expenses, and profit month-by-month for one year.

Profit projections should be accompanied by a narrative explaining the major assumptions used to estimate company income and expenses.

Research Notes: Keep careful notes on your research and assumptions, so that you can explain them later if necessary, and also so that you can go back to your sources when it’s time to revise your plan.

Projected Cash FlowIf the profit projection is the heart of your business plan, cash flow is the blood. Businesses fail because they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash.

The point of this worksheet is to plan how much you need before startup, for preliminary expenses, operating expenses, and reserves. You should keep updating it and using it afterward. It will enable you to foresee shortages in time to do something about them—perhaps cut expenses, or perhaps negotiate a loan. But foremost, you shouldn’t be taken by surprise.

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There is no great trick to preparing it: The cash-flow projection is just a forward look at your checking account.

For each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a check (for expense items).

You should track essential operating data, which is not necessarily part of cash flow but allows you to track items that have a heavy impact on cash flow, such as sales and inventory purchases.

You should also track cash outlays prior to opening in a pre-startup column. You should have already researched those for your startup expenses plan.

Your cash flow will show you whether your working capital is adequate. Clearly, if your projected cash balance ever goes negative, you will need more start-up capital. This plan will also predict just when and how much you will need to borrow.

Explain your major assumptions, especially those that make the cash flow differ from the Profit and Loss Projection. For example, if you make a sale in month one, when do you actually collect the cash? When you buy inventory or materials, do you pay in advance, upon delivery, or much later? How will this affect cash flow?

Are some expenses payable in advance? When?

Are there irregular expenses, such as quarterly tax payments, maintenance and repairs, or seasonal inventory buildup, that should be budgeted?

Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements but definitely do take cash out. Be sure to include them.

And of course, depreciation does not appear in the cash flow at all because you never write a check for it.

Break-Even AnalysisA break-even analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit.

Expressed as a formula, break-even is:

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Breakeven Sales = Fixed Costs1- Variable Costs

(Where fixed costs are expressed in dollars, but variable costs are expressed as a percent of total sales.)

Include all assumptions upon which your break-even calculation is based.

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X. Refining the Plan

The generic business plan presented above should be modified to suit your specific type of business and the audience for which the plan is written.

For Raising Capital

For Bankers Bankers want assurance of orderly repayment. If you intend using this plan to

present to lenders, include:

o Amount of loano How the funds will be usedo What this will accomplish—how will it make the business stronger?o Requested repayment terms (number of years to repay). You will probably

not have much negotiating room on interest rate but may be able to negotiate a longer repayment term, which will help cash flow.

o Collateral offered, and a list of all existing liens against collateral

For Investors Investors have a different perspective. They are looking for dramatic growth, and

they expect to share in the rewards:

o Funds needed short-termo Funds needed in two to five yearso How the company will use the funds, and what this will accomplish for

growth.o Estimated return on investmento Exit strategy for investors (buyback, sale, or IPO)o Percent of ownership that you will give up to investorso Milestones or conditions that you will accepto Financial reporting to be providedo Involvement of investors on the board or in management

For Type of Business

Retail Business Company image

Pricing:

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o Explain markup policies.o Prices should be profitable, competitive, and in accordance with company

image.

Inventory:

o Selection and price should be consistent with company image.o Inventory level: Find industry average numbers for annual inventory

turnover rate (available in RMA book). Multiply your initial inventory investment by the average turnover rate. The result should be at least equal to your projected first year's cost of goods sold. If it is not, you may not have enough budgeted for startup inventory.

Customer service policies: These should be competitive and in accord with company image.

Location: Does it give the exposure that you need? Is it convenient for customers? Is it consistent with company image?

Promotion: Methods used, cost. Does it project a consistent company image?

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