Table of Content

    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 business, the only worry you can have is to find some suitable location and start your business with a stepwise approach.

    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.

    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.

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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 business 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 business. 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.

    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  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    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
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875
    Total Funding $255,000

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    Products

    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

    Note

    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 you plan your business successfully.

    5.2 Marketing Segmentation

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

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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 Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Parents & Grandparents 32% 11,433 13,344 16,553 18,745 20,545 13.43%
    Adults 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Children 20% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%
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    5.3 Business Target

    Our main business 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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    Strategy

    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

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Toys 1,887,030 2,680,320 2,588,240
    Kids’ Stationery 802,370 815,430 823,540
    Kids’ Accessories & Costumes 539,320 770230 1,002,310
    Sports & Outdoor Toys 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    Toys $140.00 $150.00 $160.00
    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
    Sales
    Toys $2,149,800 $2,784,000 $3,383,200
    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
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Toys $0.70 $0.80 $0.90
    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
    Toys $989,300 $1,839,000 $2,679,700
    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

    6.5 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 1 Year 2 Year 3
    Accountant $85,000 $95,000 $105,000
    Store Manager $45,000 $50,000 $55,000
    Sales Executives $187,000 $194,000 $201,000
    Salesmen $145,000 $152,000 $159,000
    General Assistants $152,000 $159,000 $166,000
    Customer Representative $85,000 $95,000 $105,000
    Driver $50,000 $55,000 $60,000
    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 business 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 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

     

    8.2 Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    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
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    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%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    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 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
    Expenditures Year 1 Year 2 Year 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
    Dividends $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      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    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 Capital Year 1 Year 2 Year 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
    Earnings $100,709 $119,555 $138,401
    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 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets 4.35% 4.71% 5.80%  9.80%
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    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.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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