Do you want to start toy store business?
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’.
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.
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.
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.
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:
|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|
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 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:
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.
|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%|
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.
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
|Unit Sales||Year 1||Year 2||Year 3|
|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|
|Kids’ Accessories & Costumes||$700.00||$800.00||$900.00|
|Sports & Outdoor Toys||$650.00||$750.00||$850.00|
|Kids’ Accessories & Costumes||$50,110||$71,600||$93,000|
|Sports & Outdoor Toys||$139,350||$194,600||$249,850|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Kids’ Accessories & Costumes||$0.30||$0.35||$0.40|
|Sports & Outdoor Toys||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|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
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.
|Year 1||Year 2||Year 3|
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
|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||4.35%||4.71%||5.80%||9.80%|
|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.|
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