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This sample marketing plan was created with Marketing Plan Pro software.

This section will offer a financial overview of Interior Views as it relates to our marketing activities. We will address break-even information, sales forecasts, expense forecasts, and how those link to our marketing strategy.

Break-even Analysis

The break-even analysis below illustrates the number of single sales, or units, that we must realize to break even. This is based on average sale and costs per transaction.

Break-even Analysis

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Break-even Analysis
  
Monthly Revenue Break-even$11,246
  
Assumptions: 
Average Percent Variable Cost56%
Estimated Monthly Fixed Cost$11,200

Sales Forecast

The sales forecast is broken down into the four main revenue streams; direct sales, Web sales, consignment sales, and sub-lease revenues. The sales forecast for the upcoming year is based on a 25% growth rate. This is a slower growth rate than what was experienced from 1997 to 1998 at 33%, and also less than what is expected for year end 1999, estimated to be approximately 28%. These projections appear attainable and take the increasing base into consideration. Growth rates for years 2001 through 2004 are based on percentage increases as follows:

  • Direct Sales 20% growth rate per year.
  • Web Sales 50% growth rate per year.
  • Consignment Sales 20% growth rate per year.
  • Sub-lease Revenues 10% growth rate per year.

Sales Forecast

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Sales Forecast
 20012002200320042005
Sales     
Direct Sales$322,000$386,400$463,700$556,400$667,700
Web Sales$12,500$18,750$28,125$42,190$63,280
Total Sales$334,500$405,150$491,825$598,590$730,980
      
Direct Cost of Sales20012002200320042005
Direct Sales$178,850$214,000$255,500$307,000$370,000
Web Sales$6,875$10,400$12,000$18,000$20,000
Subtotal Direct Cost of Sales$185,725$224,400$267,500$325,000$390,000

Sales by Fabric Sales

Fabric sales account for approximately 74% of total sales. The remaining sales result from complementary products sales, including trims, tassels, pillows, drapery rods and hardware, books, and upholstered furniture.

Sales Breakdown by Fabric Sales

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Sales by: Fabric Sales
 20012002200320042005
Sales     
Drapery Weight$53,633$65,351$79,298$96,470$117,762
Upholstery Weight$26,815$32,675$39,649$48,235$58,881
Mixed$254,052$307,124$372,878$453,885$554,337
Total$334,500$405,150$491,825$598,590$730,980
Average$111,500$135,050$163,942$199,530$243,660

Sales by Consignment Sales

Consignment sales account for a relatively small portion of total sales and are primarily supported to create a better feel and look for the store. This is an area that does provide useful information feedback regarding other possible product sales the store may want to sell in the future.

Sales Breakdown by Consignment Sales

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Sales by: Consignment Sales
 20012002200320042005
Sales     
"The Window Seat"$11,732$14,295$17,346$21,103$25,760
Antiques$26,815$32,675$39,649$48,235$58,881
Other$295,953$358,180$434,830$529,252$646,339
Total$334,500$405,150$491,825$598,590$730,980
Average$111,500$135,050$163,942$199,530$243,660

Sales by Sub-lease Revenues

The Antique Bureau sub-leases approximately 450 square feet. This store offers a selection of authentic antiques. It attracts additional customers and provides revenue for space that is currently unused. Two additional areas are available. The "conference room" space is available for special events, and the second office is available for an interior designer to sub-lease.

Sales Breakdown by Sub-lease Revenues

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Sales by: Sub-lease Revenues
 20012002200320042005
Sales     
The Antique Bureau$4,320$4,750$5,225$5,750$6,325
Event/Sale Revenue$840$925$1,020$1,120$1,230
Other$329,340$399,475$485,580$591,720$723,425
Total$334,500$405,150$491,825$598,590$730,980
Average$111,500$135,050$163,942$199,530$243,660

Expense Forecast

Marketing expenses are to be budgeted at approximately 5% of total sales. Expenses are tracked in the major marketing categories of television advertisements, newspaper advertisements, the newsletter and postcard mailings, Web marketing support, printed promotional materials, public relations, and other.

Marketing Expense Budget

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Marketing Expense Budget
 20012002200320042005
Television Ads$3,900$4,600$5,620$6,740$8,200
Newspaper Ads$1,800$2,160$2,592$3,110$3,800
Other$6,450$7,700$9,200$11,150$13,400
 ------------------------------------------------------------
Total Sales and Marketing Expenses$12,150$14,460$17,412$21,000$25,400
Percent of Sales3.63%3.57%3.54%3.51%3.47%

Expense by Inventory

Marketing expenses are evenly allocated based on the type of inventory in the store.

Expense Breakdown by Inventory

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Expenses by Inventory
 20012002200320042005
Expenses     
Drapery Weight$2,546$3,268$3,965$4,824$5,888
Upholstery Weight$1,265$1,634$1,982$2,412$2,944
Mixed$8,339$9,558$11,465$13,764$16,568
Total$12,150$14,460$17,412$21,000$25,400
Average$4,050$4,820$5,804$7,000$8,467

Expense by Fixtures

Fixtures and in-store improvements are important for us to track and allow us to better understand how we are using the space allocated.

Expense Breakdown by Fixtures

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Expenses by Fixtures
 20012002200320042005
Expenses     
Fabric Racks$1,200$1,400$1,500$1,600$1,700
Office Furniture$600$800$900$1,000$1,100
Leasehold Improvements$10,350$12,260$15,012$18,400$22,600
Total$12,150$14,460$17,412$21,000$25,400
Average$4,050$4,820$5,804$7,000$8,467

Expense by Supplies

Supplies are one of the more controllable expenses and will be important to monitor as we grow.

Expense Breakdown by Supplies

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Expenses by Supplies
 20012002200320042005
Expenses     
Office Supplies$420$480$540$600$660
Fabrication Supplies$300$340$380$420$460
Other$11,430$13,640$16,492$19,980$24,280
Total$12,150$14,460$17,412$21,000$25,400
Average$4,050$4,820$5,804$7,000$8,467

Linking Expenses to Strategy and Tactics

Our marketing expenses are allocated based on this prioritized approach:

  1. Invest in our current customer base - 60%.
  2. Invest in prospective customers that match our known profile - 30%.
  3. Invest in creating greater awareness in the community - 10%.

Contribution Margins

A key component of our marketing plan is to keep gross margins at or above 45%.

Contribution Margin

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Contribution Margin
 20012002200320042005
Sales$334,500$405,150$491,825$598,590$730,980
Direct Costs of Goods$185,725$224,400$267,500$325,000$390,000
Other Costs of Sales$0$0$0$0$0
 ------------------------------------------------------------
Cost of Goods Sold$185,725$224,400$267,500$325,000$390,000
      
Gross Margin$148,775$180,750$224,325$273,590$340,980
Gross Margin %44.48%44.61%45.61%45.71%46.65%
      
Marketing Expense Budget20012002200320042005
Television Ads$3,900$4,600$5,620$6,740$8,200
Newspaper Ads$1,800$2,160$2,592$3,110$3,800
Other$6,450$7,700$9,200$11,150$13,400
 ------------------------------------------------------------
Total Sales and Marketing Expenses$12,150$14,460$17,412$21,000$25,400
Percent of Sales3.63%3.57%3.54%3.51%3.47%
      
Contribution Margin$136,625$166,290$206,913$252,590$315,580
Contribution Margin / Sales40.84%41.04%42.07%42.20%43.17%

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