Laser engraving business plan for starting your own business
If you want to break free of the 9 to 5 routine and get financially independent, business is the only thing that can make it possible. While many businesses require a lot of investment to stat, there is one that you can start with relatively small investment and that is laser engraving. In this laser engraving business plan sample, you will learn everything about starting a laser engraving business. From marketing to services, everything will be explained in this strategic plan of organization.
Just like a business plan for pottery studio, we’ll tell you all there is to know about starting this business.
2.1 The Business
Nassar Laser Engraving will be a registered and insured business in downtown Los Angeles. This location is selected because Larry Nassar, who is starting the business, knows how to start a laser engraving business at home. The business will provide all types of laser engraving and cutting services in the area.
2.2 Management of Laser Engraving Business
If you want to know how to start winery, you need to know the engraving company names. That is what we will be discussing in this document which is a complete business plan for a banker.
To manage the business, Larry will hire two managers and an accountant. The managers will look after sales and operations respectively while the accountant will be responsible for bookkeeping.
2.3 Customers of Laser Engraving Business
In this business, which is closely related to a gift shop business plan, the customers will be from a range of different categories. These will include:
- Students who want laser engraving and cutting for their projects.
- Companies that offer customization options like etching names on their products.
- People who want to get things customized for their own use.
- Commercial customization companies that do not have their own equipment.
2.4 Business Target
The target of Nassar Laser Engraving is to become a profitable business, one that can help the owner, Larry Nassar make money. This target will be broken down into the following business goals:
- Making permanent partnerships with commercial customers.
- Providing excellent services and having more than 95% customer satisfaction.
- Expanding the business to other areas of Los Angeles and then to other cities.
- Establishing a reputable brand around the business.
3.1 Company Owner
Larry Nassar is the owner of the business. He has worked as a laser machine operator for five years and knows all there is to it. He wants to start a laser cutting machine small business and after careful study of the business in the area he has decided to setup his business in downtown Los Angeles.
3.2 Why the Laser Engraving Business is being started?
While finalizing laser engraving business names, Larry thought that it might be a good idea to tell why he is starting a laser engraving business. For one, he has had enough of his 9 to 5 life and wanted to start his own business to earn money and secondly, he has investment for a business and the only thing he can do is a laser engraving business.
Just like we did in the business plan for gift baskets, the next thing is how the business will be started.
3.3 How the Laser Engraving Business will be started?
Like any other business, the first thing that needs to be done in order to start the business is planning. In this stage a detailed survey of the market was conducted, and it was determined that starting this business was totally worth it. There is a high demand for the services we intend to provide and not a single notable service provider is there.
Once the business is finalized to be started, the next step is to make a brand for the business. As the business is going to be setup in a posh area of the city, it is important to have an established brand as people tend to trust them and are comfortable doing business with them.
While the brand building process is on its way, a building will be leased in downtown Los Angeles and the business will be setup there. All the equipment will be setup and the business will soon be ready to start taking orders.
Step4: Going Online
As people look for everything online these days, the next step will be to establish an online presence for the business. To do that, a website for the business will be made and social media pages will also be established.
|Research and Development||$25,000|
|TOTAL START-UP EXPENSES||$393,900|
|Other Current Assets||$237,000|
|Start-up Expenses to Fund||$393,900|
|Start-up Assets to Fund||$1,272,000|
|TOTAL FUNDING REQUIRED||$1,665,900|
|Non-cash Assets from Start-up||$1,662,000|
|Cash Requirements from Start-up||$388,000|
|Additional Cash Raised||$53,000|
|Cash Balance on Starting Date||$39,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$47,000|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,665,900|
|Loss at Start-up (Start-up Expenses)||$400,100|
|TOTAL CAPITAL AND LIABILITIES||$2,142,000|
While discussing the available engraving business opportunities, it is important to note that deciding the services that we will be providing is one of the most important parts of the business.
If you want to know laser engraving business how it is profitable, you need to determine the services to be provided. Let’s see how to set up a laser cutter and what services to provide:
This service will be provided to the customers who want to get wood or thin sheet metal cut to an exact shape. Lasers are the best way to cut anything to an exact shape.
Another important service that will be provided by the laser engraving business will be engraving things on various metallic and wooden structures.
Etching things with lasers will also be one of the major services to be provided by the business.
Lasty, all types of customization services possible with a laser engraving machine will also be provided by Nassar Laser Engraving.
Marketing Analysis of Laser Engraving Business
Great service. Good turnaround time and quality work.
To make any of the laser engraving business ideas work, it is important to have proper marketing analysis of the business we are going to enter. In the marketing analysis run by Larry Nassar, it was determined that the business will be highly successful. This is mainly because there is little to no competition in the area and the demand is high. That makes laser etching business ideas a profitable venture and we will hopefully make a lot of profit from the business.
5.1 Market Trends
If we have a look at the market tends of laser engraving home business, we can see that the business has only grown over the last decade or so. There has been in a steady increase in the demand for these services. However, the more important thing is that the rise in demand is not at par with the rise in service providers. That has created a gap in the market, one that we can use to make our venture successful.
5.2 Marketing Segmentation
The next important part of this laser engraving business plan sample is the discussion of the market segments that we will be doing business with, and they are the following:
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5.2.1 Private Customers
These will be the customers who want the services for themselves. These people will hire our services for laser engraving, etching, and cutting. The transactions with these customers will be smaller in magnitude but larger in volume.
5.2.2 Local Businesses
Local businesses that provide the services to other customers but do not have the equipment of their own will fall into this market segment.
5.2.3 Corporate Clients
Large corporations that want to include laser engraving and etching with their products will fall into this category.
5.2.4 Remote Clients
People who are from other cities and want our services will also make a notable market segment for us. We will receive the items via post, modify it the way the customer wants and send it back to them.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- To provide dependable and reliable laser cutting, engraving, and etching services to the clients.
- To become the number one laser services provider in the area and eventually the state.
- To make at least $266,000 in profit per annum by the end of second year.
- To establish a brand around Nassar Laser Engraving.
5.4 Product Pricing
We will charge the premium price for our services. This will be done because there is not a lot of competition in the area and people will hire our services no matter how much we may charge. We will, however, offer discounted rates to bulk buyers and on B2B transactions.
For successfully executing laser cut business ideas, it is important to have a solid marketing strategy as no business can be successful without that. Before starting the laser engraving business Larry carried out a detailed survey of the market to make the strategy. He has determined that running a complete competitive analysis and making a sales strategy are the most important things to make the business a success.
Just like we did in the tattoo shop business plan, now we will shed some light on these aspects of the business.
6.1 Competitive Analysis
- After complete analysis of the market, it has been determined that there is no competitor in the area.
- It has been found that the companies and businesses providing the service in the area are overcrowded by customers and do not provide credible and dependable services.
- There is a high demand for the services in the are with a lot of B2B and B2C customers.
6.2 Sales Strategy
- Larry will use all available advertisement and promotion channels to promote the business.
- Better rates will be offered to bulk buyers and B2B customers to get permanent clients.
- Quality of the work will always be kept at the highest possible standards to make sure we have a sustained inflow of customers.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||174,000||184,440||195,506|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|Subtotal Direct Cost of Sales||$10,359,000.00||$12,504,820.00||$15,306,802.80|
Just like we did in the t-shirt printing business plan, the next thing that needs to be discussed to know laser engraving business how it is profitable, is the people that will be needed to run the business effectively and efficiently. Now, we will be talking about the manpower requirement to make this laser engraving business plan a workable business.
7.1 Company Staff
The following people will be needed to run the business:
- Larry Nassar will be the owner and CEO of the business.
- 2 managers for operations and marketing.
- 3 Laser operators.
- 2 designers.
- 1 technician.
- 2 helpers.
- 1 guard.
- 1 reception clerk.
- 1 accountant.
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
If you can get a laser business for sale, you will not have to make a financial plan for it but if you want to start it from scratch, financial plan is one of the most important things to consider. The situation here is quite different as compared to a business plan for an art gallery. We need equipment that is costly, and we need trained people who can run those machines. Here is an overview of all the costs involved in starting the business.
- The cost of leasing or renting a location to establish the business.
- The salaries of the employees.
- The cost of buying the laser cutting and engraving equipment.
- The money that will be needed to the marketing of the business.
- The money needed to make a website and promote it.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.19%||8.22%||8.26%|
|Long-term Interest Rate||8.38%||8.45%||8.51%|
8.2 Break-even Analysis
|Monthly Units Break-even||5345|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$235.00|
|Average Per-Unit Variable Cost||$0.66|
|Estimated Monthly Fixed Cost||$163,400|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$10,359,000||$12,504,820||$15,306,803|
|TOTAL COST OF SALES||$10,359,000||$12,504,820||$15,306,803|
|Gross Margin %||3.25%||5.02%||5.44%|
|Sales and Marketing and Other Expenses||$138,000||$140,000||$146,000|
|Total Operating Expenses||$310,000||$326,800||$349,920|
|Profit Before Interest and Taxes||$38,000||$333,707||$531,364|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$20,000||$21,600||$23,328|
|SUBTOTAL CASH FROM OPERATIONS||$75,000||$81,750||$88,290|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$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||$75,000||$82,000||$89,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$63,000||$68,000||$72,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$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|
|SUBTOTAL CASH SPENT||$63,000||$68,040||$73,483|
|Net Cash Flow||$21,000||$22,000||$23,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$291,000||$325,920||$366,334|
|TOTAL LONG-TERM ASSETS||$24,200||$27,104||$30,492|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$303,000||$328,160||$369,180|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||150.09%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.50%||96.02%||98.71%||97.80%|
|Profit Before Interest and Taxes||41.30%||42.42%||43.60%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.70%||75.00%||75.00%|
|Pre-tax Return on Assets||94.66%||99.39%||104.36%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.14%||34.17%||35.23%||N.A.|
|Return on Equity||55.78%||57.51%||59.29%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$245,000||$258,720||$273,208||N.A.|
|Assets to Sales||0.86||0.87||0.87||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
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