Do you want to start stationery business?
Do you want to start a stationery business? Stationery business is one of those businesses which can be started very easily and with relatively lower initial investments. Stationery shops, which mainly provide products like books, magazines, newspapers, paper products, textbooks, greeting cards and lottery tickets, can be enhanced to provide services like custom printing, money transfer, photocopying, etc. guaranteeing more revenue.
In case, you don’t know how to start a stationery business, the first thing you must do is to create a detailed business plan covering all aspects of your business. To help you write an effective business plan, we are providing a sample business plan for a stationery business startup named ‘PaperSource’.
2.1 The Business
PaperSource will be a 550 sq. ft shop located on the ground floor of Mega Mall near the Lake Travis High School in Austin. The shop will offer a wide collection of course books, paper products, greeting cards and other stationery items.
The shop will be owned by ‘Joe William’ who was a school teacher but has retired now. Joe is a rich person and is to do something for promoting education in his society, generating more money and also as a good time spent.
PaperSource will be owned by Joe William, a senior teacher retired from Lake Travis High School, Ranch Road, Austin. Joe will also hire a small team for helping him in starting a stationery business.
Before you start a stationery business you must know who your primary customers will be, so that you can attract them. The main customers of our stationery shop include students, teachers, and office assistants present near our shop.
2.4 Target of the Company
Our business targets are as follows:
3.1 Company Owner
PaperSource will be owned by Joe William, a senior teacher retired from Lake Travis High School, Ranch Road, Austin. Joe has been teaching for more than 35 years and has been associated with Lake Travis High School for the last 12 years.
3.2 Why the Business is being started
Joe decided to start a stationery business because, to him, it is the best way to invest his savings. In addition to generating revenue, a stationery business will constantly keep him in contact with people associated with education, like students and teachers – whom he loves to interact with. That’s why Joe decided to open a stationery shop and implement all his stationery business ideas on it.
3.3 How the Business will be started
The business will be started in a 550 sq. ft shop located on the ground floor of Mega Mall near the Lake Travis High School in Austin. After getting the business registered by the tax authorities, the company will purchase the items of stationery for business start up including academic books. The company will also provide photocopying, printing and money transfer services to the customers.
The costs for startup are as follows:
The startup requirements are as follows:
|Research and Development||$32,750|
|TOTAL START-UP EXPENSES||$187,300|
|Other Current Assets||$232,500|
|Start-up Expenses to Fund||$11,875|
|Start-up Assets to Fund||$15,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$18,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$18,750|
|Cash Balance on Starting Date||$21,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$251,875|
Services for customers
If you don’t know how to start your own stationery business but you want to start it, then you can take help from this sample business plan. The success of a stationery business greatly depends on what products and services are being provided so make sure to plan it beforehand. PaperSource will provide the following products and services to its customers:
- Stationery Items: We will provide all sorts of stationery items including but not limited to pens, highlighters, markers, permanent markers, pencils, colored pencils, ruled papers, binder books, glue, sticky tape, staplers and staples, rubber bands, paper clips, drawing pins, folder dividers, hanging files, scissors, calculator, etc.
- Textbooks, Notebooks & Paper Products: We will provide an exclusive assortment of envelopes, notebooks, notepads, papers, sheets, covers, and textbooks.
- Photocopying, Printing & Money Transfer Service: We will also provide photocopying, printing and money transfer services.
- Miscellaneous Items: The shop will also contain other miscellaneous items which aren’t part of stationery but are frequently needed such as tissue papers, bubble wrap roll, USB flash drives, micro SD cards, printer toner, lottery tickets, postage stamps etc.
Marketing Analysis of stationery business
The most important component of an effective stationary shop business plan is its marketing plan which can only be developed after an accurate market analysis. Before creating the stationery supplier business plan, you must consider whether its market has enough capacity or not. While developing your stationery business plan, you must also keep in mind that there are a lot of people sharing the same business and the same market so if you want to make your business a success, you will have to get a clear picture of the current market that you will be serving.
You can also use this stationery shop business plan sample for helping formulate a small stationery business plan for your shop. However, if you want to start your business at a large scale, you must seek help from marketing analysts and experts for making your stationery and office supplies business plan.
5.1 Marketing Trends
Stationery items are the most consumed articles in the educational institutions, as well as other institutes and offices. However, according to IBISWorld, the business has encountered a decline in annual growth because of the increasing electronic communication which has greatly reduced the demand for traditional paper as well as the related products. Before you proceed with your stationery store business plan, you must consider the current statistics of the stationery industry which can found on the internet as well as in this stationery business plan template. Currently, there are around 88,000 stationery businesses operating in the United States. The industry is generating an annual revenue of $8 billion and is responsible for employing more than 1.9 million people.
5.2 Marketing Segmentation
While developing your stationery supply business plan you must keep your target customers in mind as well as all the segments your market is divided into. Like with the other components of the plan, you can have an idea about the market segmentation of customers from this stationery business plan sample but the actual segmentation will depend on the demographics of the area where you will be starting your business. Since PaperSource will be surrounded by schools and offices, our primary target market will be the students, teachers and office staff present in the area. Our target market is divided as follows:
The detailed marketing segmentation of our target audience is as follows:
5.2.1 Students & Teachers: Although in this era of technology many students as well as teachers do their work on computers and prefer to buy e-books instead of printed ones, still there is a great demand of stationery items in the market. Students and teachers still need various things like papers, files, markers, pens etc. for their daily usage, while still there are many who prefer to read books in hard form. This group is also likely to buy flash drives, SD cards, and utilize our photocopying and printing service.
5.2.2 Companies & Businesses: This customer group is composed of companies and businesses located in the area. This customer group makes purchases of the stationery items for the entire organization, however, sometimes different groups within the same organization also make individual purchases. Companies and businesses mostly have their own printers and photocopiers so they are not likely to use that service.
5.2.3 Institutions: Although in these days most of the official work is done online, still the accountants and clerks of various institutions need stationery items for many purposes.
The detailed market analysis of our potential customers is given in the following table:
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
|Students & Teachers||65%||11,433||13,344||16,553||18,745||20,545||13.43%|
|Companies & Businesses||25%||22,334||32,344||43,665||52,544||66,432||10.00%|
5.3 Business Target
Our business targets are:
- To become the best stationery shop in the municipality within one year
- To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
- To add more items such as gift cards, gift boxes, school bags, key chains etc. by the end of the first year
- To balance the initial cost of the startup with the earned profits by the end of the first year
5.4 Product Pricing
Product pricing is one of the most important factors in deciding the success of a startup business so it must be planned very carefully. At our stationery shop, some objects such as course books will be sold at the same price as sold by our competitors. However, for the purpose of encouraging sales, we have priced some of the things including office supplies, stationery and other merchandise slightly cheaper as compared to our competitors.
Sales strategy is also another important component of your business plan for stationery since it establishes how you will attract your customers toward you.
6.1 Competitive Analysis
Your stationery business can never survive if you don’t have something special and different about you because this industry is one of the most competitive industries. That’s why you must possess some competitive aspects before starting your own stationery business .
As a stationery startup, we have set our prices in reasonable ranges and some products are even cheaper than their market prices. In addition to that, we will make sure to provide everything customers may need under one roof and it will also serve as our competitive advantage.
6.2 Sales Strategy
We will attract our customers towards us through various efforts, such as:
- We will introduce ourselves to the schools, offices, and residents of the town by sending them introductory letters
- We will advertise our shop through newspapers and local TV ads
- We will give 5% discount on every shopping above $200
6.3 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|Textbooks, Notebooks & Paper Products||802,370||815,430||823,540|
|Photocopying, Printing & Money Transfer Service||539,320||770230||1,002,310|
|TOTAL UNIT SALES||3,494,170||4,588,370||4,807,410|
|Unit Prices||Year 1||Year 2||Year 3|
|Textbooks, Notebooks & Paper Products||$600.00||$800.00||$1,000.00|
|Photocopying, Printing & Money Transfer Service||$700.00||$800.00||$900.00|
|Textbooks, Notebooks & Paper Products||$120,050||$194,500||$268,500|
|Photocopying, Printing & Money Transfer Service||$50,110||$71,600||$93,000|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Textbooks, Notebooks & Paper Products||$0.40||$0.45||$0.50|
|Photocopying, Printing & Money Transfer Service||$0.30||$0.35||$0.40|
|Direct Cost of Sales|
|Textbooks, Notebooks & Paper Products||$66,600||$119,900||$173,200|
|Photocopying, Printing & Money Transfer Service||$17,900||$35,000||$52,100|
|Subtotal Direct Cost of Sales||$1,294,100||$1,699,400||$2,104,700|
6.4 Sales Monthly
6.5 Sales Yearly
The personnel plan describes the number and type of staff needed for your startup. It’s also very important and must be properly developed before you start stationery business. The personnel plan of PaperSource is as follows:
7.1 Company Staff
We will initially hire the following staff:
- 1 Cashier for keeping records
- 1 Worker for printing and photocopying
- 1 Cleaner for arranging and cleaning things
- 2 Assistants for handling customers
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
The final thing to do before starting your stationery business is to determine the pros and cons of your business regarding finances. To gain more and more profit in stationery business you must purchase high-quality things at reasonable prices. After that, you have to sell those objects while keeping your stationery business profit margin. The stationery business comprises of small as well as large purchases and sales. Large sales such as a pack of 100 notebooks or a pack of 500 folders determine the real stationery business margin profits for you. However, you can also benefit from the small sales as they will also benefit you no matter how small they are! The detailed financial plan for our stationery business is given below. The financial plan describes all expenses required for the startup as well as how these expenses will be covered by your earned revenues.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|Average Per-Unit Revenue||$260.87|
|Average Per-Unit Variable Cost||$0.89|
|Estimated Monthly Fixed Cost||$196,410|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
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||$7,023||$8,610||$9,297|
|SUBTOTAL CASH FROM OPERATIONS||$47,143||$53,651||$59,359|
|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||$47,143||$53,651||$55,359|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$35,296||$39,549||$43,582|
|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||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
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||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
|Year 1||Year 2||Year 3||Industry Profile|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|Total Debt to Total Assets||2.68%||1.04%||0.76%||67.10%|
|Pre-tax Return on Net Worth||66.83%||71.26%||75.69%||4.40%|
|Pre-tax Return on Assets||64.88%||69.75%||74.62%||9.00%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||19.20%||21.16%||23.12%||N.A.|
|Return on Equity||47.79%||50.53%||53.27%||N.A.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
Illustrative business plan samples
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