Toy shop business plan for starting your own store

Do you want to start a toy store business? Many people search for toy stores as toys are an essential part of the life of every child and are crucial to enhance their imagination and abilities. So, if you are starting this toy business plan, the only worry you can have is to find a suitable location and start your toy business plan with a stepwise approach.

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To be clear about what you’ll need to do, you’ll have to develop a detailed business plan. If you don’t know how to write one, then you can take help from this toy shop business plan sample written for a startup, ‘Sean Toy Store’.

Executive Summary

2.1 The Business

Sean Toy Store will be a licensed and registered toy store based in downtown Chicago, providing the widest selection of toys and fantasy costumes for children. To make shopping much entertaining and easier with us, we’ll be providing online shopping facility as well.

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2.2 Management

Before starting a toy store business, you must know how to open a toy shop and which accessories to provide to gain maximum attraction. To manage the company’s store as well as the online services, Sean will hire a team of store managers, web developers, and salesmen.

2.3 Customers

Our customers will be the parents and grandparents living` near our location, in this business plan toy store pdf we will be doing marketing segmentation in detail to identify our customers.

2.4 Business Target

Our target is to be the best and most renowned toy shop in our city, to earn a profit margin of $15k per month by the end of the first year, and then continue this margin at a steady rate over the years to come.

Toy Shop Business Plan Template - 3 Years Profit Forecast
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Company Summary

3.1 Company Owner

Sean Kingsley, who has a bachelor’s degree in fine arts, will be the owner of Sean Toy Store. Besides doing painting and artwork, he always had a wish to start his toy business plan which he is going to fulfill by opening a toy shop

3.2 Why the Business is being started

Sean is passionate about artworks and paintings but in order to have a permanent and profitable source of income he has decided to start his own toy business plan. After analyzing which businesses he can start, he has decided to opt for opening a toy shop.

3.3 How the Business will be started

A location which was previously used as a gift shop will be taken on rent in downtown Chicago. Sean will purchase a large assortment of toys, dolls, games, puzzles, play sets, kid’s stationery items, and many more things. To manage the business Sean will hire a staff comprising of store managers, salesmen, and web developers. All the details about Sean Toy Store are given here in detail for anyone who wants to know how to open a toy store business.

Toy Shop Business Plan Template - Startup Cost

The detailed startup requirements including startup funding, startup expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities, as forecasted by company’s analysts, are given below:

Start-up Expenses 
Research and Development$32,750
Expensed Equipment$32,750
Start-up Assets$0
Cash Required$332,500
Start-up Inventory$32,625
Other Current Assets$232,500
Long-term Assets$235,000
Total Requirements$245,000
Start-up Expenses to Fund$11,875
Start-up Assets to Fund$15,000
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
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Planned Investment$0
Investor 1$332,500
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$313,125
Total Funding$255,000
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    After knowing how to start a toy store business, the next step would be to list the products you want to sell in your store. The items Sean Toy Store has decided to provide the following items to its customers, which will be displayed in the store as well as on the company’s website.

    • Toys: We’ll have a large collection of toys, puzzles, games, play sets, cars, trains, dolls, animal figures, balls and other unique things for children.
    • Kid’s Stationery: We’ll have a collection of attractive stationery items for kids such as designed erasers, geometry boxes, pencils, crayons, printed glace papers, cards, markers, colors, clipboards, etc.
    • Kid’s Accessories & Costumes: We’ll keep bags, shoes, wallets, watches, jewelry, lunch boxes, bottles, character costumes and wigs in our store.
    • Sports & Outdoor Toys: For children of age group 5 to 16 we’ll be having bicycles, roller skates, kids scooter, badminton, cricket, dart & dartboard, basketball, and other sports items.

    Marketing Analysis of Toy Store Business

    There are a lot of toy stores running in the United States, to be different and more successful than the existing ones, you should analyze the market demands in which you’ll be serving. In this toy store business plan sample, marketing analysis and segmentation done for Sean Toy Store is given for your help.

    5.1 Market Trends


    ]The toy store businesses are responsible for generating a revenue of $20 billion annually, and according to IBISWorld, the industry is reportedly growing at an annual rate of 1.1%.

    The toy store business offers a lot of opportunities for one who has creative ideas and can explore unique things for children, something which is evident by the fact that more than 21k toy store businesses are successfully running in the United States. These stats show that you won’t be at loss provided that your toy business plan successfully.

    5.2 Marketing Segmentation

    Sean Toy Store has identified the following type of target audience which can become its future consumers:

    Toy Shop Business Plan Template - Marketing Segmentation

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    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Parents & Grandparents: The biggest group of our target customers will be the parents and grandparents of children with ages less than 16. This category is always in search of something more innovative and lucrative to help their kids having fun along with enhancing their creativity.

    5.2.2 Adults: Our second target group comprises of adults aged above 25 years. These adults often gift toys to the children of their friends, colleagues, and family members.

    5.2.3 Children: The third target group comprises of children who themselves will come to our shop to buy some toys, stationery or fantasy costumes.

    Market Analysis       
    Potential CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
    Parents & Grandparents32%11,43313,34416,55318,74520,54513.43%
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    5.3 Business Target

    Our main toy business plan targets to be achieved in one year are to achieve the net profit margin of $15k per month by the end of the first year, to balance the initial cost of the startup with earned profits by the end of the first six months, and to become the best toy shop of the city.

    5.4 Product Pricing

    Our prices are almost the same as our competitors, however, the products which only we will be introducing in toy stores will be a little bit expensive.

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    Before you start a toy store business, you must find something that will make your store different than all other toy stores. From this sample business plan for toy store, you can know the strategy Sean Toy Store will adopt in order to attract a wide range of customers.

    6.1 Competitive Analysis

    Our biggest competitive advantage is the large variety of products we will be offering in our store. Our customer will be able to find any desired item in our store. Secondly, we will be having character costumes such as Elsa Costume Collection, Black Panther Costume, Belle Signature Costume, etc. These fantasy costumes along with all accessories are only available at our store in our area. Lastly, we’ll be having excellent customer care service. Our guide will help the customers to choose the best and desired item matching the event unless our customers are totally satisfied.

    6.2 Sales Strategy

    To advertise what we are offering other than the usual toys, we’ll be advertising our products by running a social media campaign and by ensuring a strong web presence, and also through eye-catching billboards and posters. Moreover, we’ll also be offering a 10% discount on our services for the first two weeks of our launch.

    6.3 Sales Forecast

    Toy Shop Business Plan Template - Unit Sales
    Sales Forecast   
    Unit SalesYear 1Year 2Year 3
    Kids’ Stationery802,370815,430823,540
    Kids’ Accessories & Costumes539,3207702301,002,310
    Sports & Outdoor Toys265,450322,390393,320
    TOTAL UNIT SALES3,494,1704,588,3704,807,410
    Unit PricesYear 1Year 2Year 3
    Kids’ Stationery$600.00$800.00$1,000.00
    Kids’ Accessories & Costumes$700.00$800.00$900.00
    Sports & Outdoor Toys$650.00$750.00$850.00
    Kids’ Stationery$120,050$194,500$268,500
    Kids’ Accessories & Costumes$50,110$71,600$93,000
    Sports & Outdoor Toys$139,350$194,600$249,850
    Direct Unit CostsYear 1Year 2Year 3
    Kids’ Stationery$0.40$0.45$0.50
    Kids’ Accessories & Costumes$0.30$0.35$0.40
    Sports & Outdoor Toys$3.00$3.50$4.00
    Direct Cost of Sales   
    Kids’ Stationery$66,600$119,900$173,200
    Kids’ Accessories & Costumes$17,900$35,000$52,100
    Sports & Outdoor Toys$19,400$67,600$115,800
    Subtotal Direct Cost of Sales$1,294,100$1,699,400$2,104,700

    6.4 Sales Monthly

    Toy Shop Business Plan Template - Sales Monthly

    6.5 Sales Yearly

    Toy Shop Business Plan Template - Sales Yearly
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      Personnel Plan

      The staff required by Sean Toy Store in order to manage the store operations as well as the online shopping is given in this sample business plan for a toy store. We are enlisting the required persons with a little job description for anyone who wants to benefit.

      7.1 Company Staff

      Sean will hire the following people:

      • 1 Accountant to maintain financial records
      • 1 Store Manager to manage store overall operations with the owner
      • 2 Sales Executives to market the business
      • 4 Salesmen
      • 2 General Assistants to carry out day-to-day tasks
      • 1 Customer Representative to interact with customers
      • 1 Driver to transport and bring items
      • 2 Web Developers to manage the company’s website and social site
      • 1 Security Guard

      7.2 Average Salary of Employees

      The following table shows the forecasted data about the salaries of the employees for the next three years.

       Personnel Plan   
       Year 1Year 2Year 3
      Store Manager$45,000$50,000$55,000
      Sales Executives$187,000$194,000$201,000
      General Assistants$152,000$159,000$166,000
      Customer Representative$85,000$95,000$105,000
      Web Developers$187,000$194,000$201,000
      Security Guard$42,000$45,000$48,000
      Total Salaries$297,000$311,000$325,000

      Financial Plan

      The last factor which will decide whether your toy business plan end up as a success or a failure is your financial plan. The financial plan should cover startup costs, expenses, a rough estimation of expected profits and a rough estimate to meet financial goals. It is always better to get your financial plan written by a financial expert especially if you are starting your business on a larger scale. For giving you an idea of how a financial plan should be, we are providing this toy store business plan free of cost written by a financial expert hired by Sean Toy Store.

      8.1 Important Assumptions

       General Assumptions   
       Year 1Year 2Year 3
      Plan Month123
      Current Interest Rate10.00%11.00%12.00%
      Long-term Interest Rate10.00%10.00%10.00%
      Tax Rate26.42%27.76%28.12%

       8.2 Brake-even Analysis

      Toy Shop Business Plan Template - Brak-even Analysis
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         Brake-Even Analysis 
        Monthly Units Break-even5530
        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 1Year 2Year 3
        Direct Cost of Sales$15,100$19,153$23,206
        TOTAL COST OF SALES$15,100 $19,153 $23,206
        Gross Margin$293,969$366,781$439,593
        Gross Margin %94.98%94.72%94.46%
        Sales and Marketing and Other Expenses$1,850$2,000$2,150
        Leased Equipment$0$0$0
        Payroll Taxes$34,510$40,726$46,942
        Total Operating Expenses$188,766$220,744$252,722
        Profit Before Interest and Taxes$105,205$146,040$186,875
        Interest Expense$0$0$0
        Taxes Incurred$26,838$37,315$47,792
        Net Profit$78,367$108,725$139,083
        Net Profit/Sales30.00%39.32%48.64%

        8.3.1 Profit Monthly

        Toy Shop Business Plan Template - Profit Monthly

        8.3.2 Profit Yearly

        Toy Shop Business Plan Template - Profit Yearly

        8.3.3 Gross Margin Monthly

        Toy Shop Business Plan Template - Gross Margin Monthly

        8.3.4 Gross Margin Yearly

        Toy Shop Business Plan Template - Gross Margin Yearly

        8.4 Projected Cash Flow

        Toy Shop Business Plan Template - Projected Cash Flow
         Pro Forma Cash Flow   
        Cash ReceivedYear 1Year 2Year 3
        Cash from Operations   
        Cash Sales$40,124$45,046$50,068
        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
        ExpendituresYear 1Year 2Year 3
        Expenditures from Operations   
        Cash Spending$21,647$24,204$26,951
        Bill Payments$13,539$15,385$170,631
        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
        Cash Balance$21,823$22,381$28,239

        8.5 Projected Balance Sheet

         Pro Forma Balance Sheet   
        AssetsYear 1Year 2Year 3
        Current Assets   
        Accounts Receivable$12,613$14,493$16,373
        Other Current Assets$1,000$1,000$1,000
        TOTAL CURRENT ASSETS$201,259 $237,468 $273,677
        Long-term Assets   
        Long-term Assets$10,000$10,000$10,000
        Accumulated Depreciation$12,420$14,490$16,560
        TOTAL LONG-TERM ASSETS$980 $610 $240
        TOTAL ASSETS$198,839 $232,978 $267,117
        Liabilities and CapitalYear 1Year 2Year 3
        Current Liabilities   
        Accounts Payable$9,482$10,792$12,102
        Current Borrowing$0$0$0
        Other Current Liabilities$0$0$0
        SUBTOTAL CURRENT LIABILITIES$9,482 $10,792 $12,102
        Long-term Liabilities$0$0$0
        TOTAL LIABILITIES$9,482 $10,792 $12,102
        Paid-in Capital$30,000$30,000$30,000
        Retained Earnings$48,651$72,636$96,621
        TOTAL CAPITAL$189,360 $222,190 $255,020
        TOTAL LIABILITIES AND CAPITAL$198,839 $232,978 $267,117
        Net Worth$182,060$226,240$270,420

         8.6 Business Ratios

         Ratio Analysis    
         Year 1Year 2Year 3Industry Profile
        Sales Growth4.35%30.82%63.29%4.00%
        Percent of Total Assets4.35%4.71%5.80% 9.80%
        Accounts Receivable5.61%4.71%3.81%9.70%
        Other Current Assets1.75%2.02%2.29%27.40%
        Total Current Assets138.53%150.99%163.45%54.60%
        Long-term Assets-9.47%-21.01%-32.55%58.40%
        TOTAL ASSETS100.00%100.00%100.00%100.00%
        Current Liabilities4.68%3.04%2.76%27.30%
        Long-term Liabilities0.00%0.00%0.00%25.80%
        Total Liabilities4.68%3.04%2.76%54.10%
        NET WORTH99.32%101.04%102.76%44.90%
        Percent of Sales    
        Gross Margin94.18%93.85%93.52%0.00%
        Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
        Advertising Expenses2.06%1.11%0.28%1.40%
        Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
        Main Ratios    
        Total Debt to Total Assets2.68%1.04%0.76%67.10%
        Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
        Pre-tax Return on Assets64.88%69.75%74.62%9.00%
        Additional RatiosYear 1Year 2Year 3 
        Net Profit Margin19.20%21.16%23.12%N.A.
        Return on Equity47.79%50.53%53.27%N.A.
        Activity Ratios    
        Accounts Receivable Turnover4.564.564.56N.A.
        Collection Days9299106N.A.
        Inventory Turnover19.722.5525.4N.A.
        Accounts Payable Turnover14.1714.6715.17N.A.
        Payment Days272727N.A.
        Total Asset Turnover1.841.551.26N.A.
        Debt Ratios    
        Debt to Net Worth0-0.02-0.04N.A.
        Current Liab. to Liab.111N.A.
        Liquidity Ratios    
        Net Working Capital$120,943$140,664$160,385N.A.
        Interest Coverage000N.A.
        Additional Ratios    
        Assets to Sales0.450.480.51N.A.
        Current Debt/Total Assets4%3%2%N.A.
        Acid Test23.6627.0130.36N.A.
        Sales/Net Worth1.681.290.9N.A.
        Dividend Payout000N.A.

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