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LloydBrown
05-02-2006, 02:21 AM
Okay, here's a business plan for a book I've written. It's a simple but fairly complete plan that I would use to apply for a commercial loan. I did not include a financial projection, but I could.

I don't intend to actually do this, by the way. In considering all possibilities for the book, I had to consider self-pubbing.

Notice that the plan concludes a loss. Loan management is a big chunk of that number: the interest on the loan, if taken out in full on Day 1, is $1,400--half of the loss! Obviously, scheduling a favorable withdrawal and repayment plan could reduce that number by a couple of hundred dollars.

Anyway, here is is.
Business Description



The business will be a proprietorship, operated by Lloyd Brown, the book’s author. The business focuses on sales of the author’s non-fiction book on opening and operating a retail business, The Game Retailer’s Guide.

The goal of this business plan is a finite business designed to sell through the initial print run as soon as is possible. If sales generate sufficient demand for additional print runs, if the publisher chooses to release additional titles (self-published or otherwise), or if another publisher wishes to purchase publication rights, then the publisher will prepare a new business plan to reflect the changes. Otherwise, the publisher can meet minor periodic sales demand after the print run has sold through with print-on-demand publishing with little overhead (primarily the website maintenance cost).

The product will be a 240-page 8 ½ x 11” hardback carrying a Suggested Retail Price of $35. This size guarantees the best acceptance by the adventure hobby retailers, who are reluctant to carry nonstandard book sizes on their shelves. This price is competitive with other books with the same page count and format.


Sales Distribution

Website

The website will direct buyers to a local retailer or allow them to order the book directly. In order to encourage retailer promotion, the site will attempt to direct customers to local retailers first, encouraging a direct order only when no local retailer is available.

Local Booksellers

Chamblin Bookmine, a local bookstore with over 200,000 titles in stock, is willing to carry at least 12 copies of the title at standard retailer terms. Other local independent bookstores will carry a total of 24 more. Local chain bookstores are reluctant to carry self-published books, but this offset print run with an ISBN will be easier to sell than a Print-on-Demand title.

Other local stores, including the business the author used to own, will make initial purchases of 24 copies in total. The author’s previous books sold through just one of these stores have sold 100 and 75 copies respectively. However, given the market slowdown since those books were released, this plan makes an estimate of 100 total local copies between all locations.

Continuing sales after these initial sales are expected to add another 36 total. The assumption is that the book maintains a 2-3x annual turn rate at each location, allowing for initial sell-through within 60 days and then a slower ongoing sales. The plan allows for a conservative estimate that 75% of these locations cease carrying the book when the initial order sells through.


Marketing


According to the Small Business Administration, about 30% of the United States is considering opening a small business at any given time. With about 15,000,000 current or former game hobbyists, the overlap between these two groups yields a potential market of at least 4.5 million readers.
A Game Retailer’s Guide will offer value to the estimated 2,000 existing independent game retailers who can use it for reference and to shore up weak areas in their business management skills set. This secondary market, while far smaller in number than the above groups, will experience a higher conversion rate than the reading public at large.
The GRG will appeal to the approximately 10,000 small businesses owners that sell products commonly associated with games and might consider expanding their product lines to include games.
Regular updates through new editions will keep the book fresh and promote repeat sales.
The author is an editor of role playing game website, with thousands of pageviews per month.
The author maintains a monthly article on RPGNet.com, which will host the electronic sales of the book.
Website

The website’s main purpose will be in adding value to the product after the purchase, with the ultimate goal of increasing reader satisfaction to encourage word-of-mouth sales. Also, the website will increase the conversion rate of subsequent editions of the book as it is updated with new material.

The website’s features include




a forum for reader discussion
reviews of the book
downloads for additional material
errata or clarification
weekly articles providing new content
the sale of an electronic version of the book
a schedule of author appearances
a retailer locator that lists brick & mortar places to buy the book
publisher contact information
a link to a sales form for ordering the book directly
a contact form for retailers to gain ordering information (openly including details on the discounts available for retailers tends to devalue the book in the reader’s eyes)
The website’s design will feature no pop-up ads in order to retain viewers longer. An RSS feed will encourage return visits and help maintain top-of-the-mind awareness.

Convention and Trade Show Attendance

The author will attend two large annual conventions and several local conventions as a guest rather than as a vendor in order to reduce costs. A retailer will handle sales on consignment. The author will also attend the industry’s annual trade show in Las Vegas NV.

The largest convention is GenCon, held in Indianapolis, Indiana. It draws approximately 25,000 guests and at least 3,000 vendors. Vendor space at this convention exceeds $1,000 and might not be available at all, depending on demand.

Instead, the author will consign sales to a successful retailer (thus, the “cost” in reduced income is an estimated $875). The author will give 4 different seminars focusing on the book’s topics. Seminars at GenCon tend to draw 50-700+ guests. With an estimate of 200 guests per event (based on similar events the author has attended in the past), minus 25% overlap between the events, the total number of guests should be approximately 600. Ideal sales for this effort exceed 100 books sold, with a best-guess estimate of 40-50.

The second convention is Origins, held in Cincinnati, Ohio. Estimated sales are 30-40 copies because the reduced convention attendance implies lower seminar attendance. However, retail sales are traditionally greater than at GenCon, so the retailer selling the books on consignment could achieve numbers equal to GenCon sales.

Some of the guests at both conventions are retailers looking for new product to add to their store inventory. The financials below do not account for these retailers, although they represent a potential additional 10-50 total sales; instead, they are included with the other retailer sales through distribution.

The annual trade show will focus on attracting additional retailers and on making direct sales to potential retailers. The familiar format of seminars driving book sales continues. At this event, approximately 1,600 potential retailers show up to look for new products to add to their mix. Retailers are both consumers of this book and resellers. Gaining 100 new retailers who order an average of 3 copies each generates 300 sales at distribution rates. Allowing for normal sell-through and re-order rates, this event should generate an eventual 400-500 sales.

Local conventions represent the most effective conversion rate at the lowest expense. A handful of annual conventions represent a total attendance of about 1,000 guests, with an expected sales total of 50 copies. The vendor space cost can be paid in product for minimal out-of-pocket cash expenses (the Financials chapter accounts for this expense in unsold product).

Primary expenses for out-of-town events include hotel costs and travel.

Paid Advertising

The author has a working relationship with Kenzer & Company, the publishers of Knights of the Dinner Table magazine. This periodical has a circulation of about 45,000 readers, nearly all within the target market. Rates for this ad run $150/month. Given the author’s name recognition from books Kenzer has published and articles this magazine has published, this ad will have a relatively high conversion rate.

Boyce McClain’s Collector’s Corner is a self-published local newsletter with a circulation of about 5,000. Since this newsletter will directly reinforce author appearances and is distributed by the local booksellers who are carrying the book, conversion rates will be high. This ad costs only $30 per month.

Review & Promotional Copies

The publisher will send review copies to


BMCC, a local newsletter with wide circulation
GameBuyer, an industry magazine directed toward retailers
Distributors: Alliance Games, ACD Distribution, Blackhawk Hobbies, Centurion Hobby, and other regional distributors. The first two distributors handle about 80% of the target industry
Publisher’s Weekly, Kirkus, Booklist & Library Journal, which are the four primary review venues for the book trade and library purchases
50 copies are set aside for retailer request
7-10 copies will be given to local conventions in exchange for vendor table fees
The balance of the 100 copies accounted for in the financials will be used in additional promotion opportunities as they arise.
Direct Sales Strategies

The publisher will deliver sell sheets or press releases to approximately 500 retailers and booksellers, inviting them to receive a review copy of the book. The sell sheet




Identifies the publisher’s online support, including the retailer locator
identifies the paid advertising that drives customers to the retailers
highlights the book’s selling points
includes ordering information for direct order or for ordering through distribution
proposes merchandising strategies, including a “one line sell” to help train sales staff on how to sell the book.
Exit Strategies



Few books become “evergreen”; most go out of print after a few years. Book sales through a large publisher tend to sell quickly initially and then taper off rapidly. While the self-published nature of the book will spread out the graph of sales over time, the book likely has a finite lifespan.



The business is expected to run its course after reaching a profit and repaying the initial loan.



In case sales fail to meet expectations by a wide margin, the publisher will be able to afford to repay the balance of the loan out of a management salary with virtually any retailer. The publisher knows a retailer who operates on a large scale to whom the books will sell at 15% of cover price regardless of quantity in stock. In an absolute worst-case scenario (no books sold at all), this sale would generate nearly $4,000 with which to pay down the balance of the loan.

Financials

Initial Costs



Initial Costs





ISBN


$225

firm

Copyright registration


$30

firm

Fictitious name application


$80

firm

Printing Costs


$8,600

firm

Domain name registration


$70

firm

Sell sheets


$1,000

estimate

Postage & Shipping


$1,200

estimate

RPG.net account


$40

firm







Total


$11,245






Costs identified as “firm” are based on static government fees, printed quotes, or existing costs.

Ongoing Costs



Monthly Ongoing Costs





Convention fees


$10.00

estimate

Travel expenses


$275.00

estimate

Storage*


$0.00



Ads


$180.00

firm

Website maintenance


$30.00

firm

Separate phone line


$40.00

estimate

Loan repayment


$970.00

estimate













Total


$1,505.00






*The publisher has sufficient indoor storage for the entire printing.

All prices in italics are not billed monthly but are prorated from an annual total.



Total Monthly Expenses


$1,505.00

x 12 months


$18,060.00





Total 1st-year expenses


$29,305.00





Revenue Projection



Sales by Channel

Dollars/Unit

Unit Sold



Copies intended for free use

0


100

$ 0

Direct sales at 100%


35.00

100

$ 3,500

Bookstore sales at 60%


21.00

200

$ 4,200

Consignment sales at 50%


17.50

150

$ 2,625

Retailer sales at 50%


17.50

750

$ 13,125

Distribution sales at 35%


12.25

200

$ 2,450

Electronic copies


17.50

40

$ 700






1,440

$ 26,600





Documentation

Print quotes, including shipping costs

Fulfillment house contract

Electronic sales distributor contract

Publisher resume

Publisher credit information

Letters of intent from local retailers

LloydBrown
05-02-2006, 02:22 AM
Hmm, seem to have lost some formatting.

If you have any questions on those numbers, just ask.