Video Store Marketing Plan

Independent Choice Flicks

Financials, Budgets, and Forecasts

4.0 Financials, Budgets, and Forecasts

This section will offer a financial overview of ICF as it related to the marketing activities. ICF will address break-even analysis, sales forecasts, expenses forecasts, and how these link to the marketing strategy.

4.1 Break-even Analysis

The break-even analysis indicates that $8,900 is needed in monthly revenue to reach the break-even point.

Break-even Analysis



Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even	$9,451
Assumptions:
Average Percent Variable Cost	35%
Estimated Monthly Fixed Cost	$8,900

4.2 Sales Forecast

The first two months will be spent setting up the store and ordering inventory. There will not be any sales activity. During this time period ICF will be interviewing people with the expectation of bringing on board three part-time employees for the third month. By the fifth month, sales will be steadily increasing and ICF will have the need for a full-time employee. In addition to these employees, Janet will be working full time.

ICF expects a fairly linear sales growth pattern month to month.

Sales Monthly



Sales Forecast

Sales Forecast
	2001	2002	2003
Sales
Under 30	$60,293	$115,476	$135,214
Over 30	$48,291	$85,475	$95,878
Total Sales	$108,584	$200,951	$231,092
Direct Cost of Sales	2001	2002	2003
Under 30	$21,103	$40,417	$47,325
Over 30	$16,902	$29,916	$33,557
Subtotal Direct Cost of Sales	$38,004	$70,333	$80,882

4.3 Expense Forecast

Marketing expenses are to be budgeted so they are higher in the early months when ICF is just opening as well as during the fall and winter when movie rentals increase.

Monthly Expense Budget



Marketing Expense Budget

Marketing Expense Budget
	2001	2002	2003
Advertising	$5,100	$6,000	$7,000
Other	$3,800	$5,000	$6,000
Other	$0	$0	$0
	------------	------------	------------
Total Sales and Marketing Expenses	$8,900	$11,000	$13,000
Percent of Sales	8.20%	5.47%	5.63%