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Promotional Products Maker Business Plan

3 March 2023 Businnes Plan


Promotional Products Maker Business Plan



Introduction

There is a market in the advertising specialty sector for velour & leatherette drawstring bags, eyeglass bag, jewelry bags, pen bags and pen bags that can hold promotional products to increase their perceived worth. Elsewares Promotional Products & Packaging was established to supply these logo-imprinted products to advertising specialists distributors, who then market them to the end users.


The Products

Elsewares plans to create a range of unique products and drawstring packaging that adds value to these products. These products will be imported from Mexico and Far East. Before they reach distributors, they will be printed in-house with different company logos.

Elsewares can join the Advertising Specialties Institute trade group to have electronic and print access to a network 13,000-14,000 ASI-listed distributors of advertising specialty products, which is part of a $7.4 billion industry. In terms of advertising dollars spent, this ranks second only to television and newsprint. Elsewares’ products will be sold only through these distributors. Elsewares is planning to reach distributors through ads in trade publications, an internal sales force, as well as a network comprised of salaried sales reps and commission-based representatives.

Parallel to our campaign to market these packaging items, we will present our unique promotional products to the same distributors. We can offer three sales opportunities, including the sale or the purchase of promotional products from other suppliers, as well as the use of packaging products by distributors to complement promotional items purchased from them.


The Market

Sales in the advertising specialties industry have been growing at a rate of almost 7% per year for the past decade and reached over $7 billion in sales last year. This is a mature industry, with many suppliers and distributors. The industry’s three largest suppliers of velour and leatherette drawstring bag products combined made $2,500,000. These three suppliers are located in the East Coast. However, the Midwest and West Coast companies are the biggest advertising specialty distributors in this industry. We feel that by concentrating our efforts on marketing to the West Coast distributors, many of which already have had positive business relationships with our personnel, we will acquire a significant market share of the packaging niche over the next three years.


Financial Considerations

Part of our initial startup expenses will be used for inventory, office equipment and imprinting machines. The balance will be used for catalog costs and initial advertising expenses. In the first twelve months of operation, we anticipate that there will be an additional financial commitment for financing receivables or payroll expenses.

Elsewares intends to concentrate its sales force in the western United States and to reach a respectable sales level by the end of Year 2. Based on our monthly fixed cost estimate and the expected monthly unit sales, Elsewares should be able to achieve a running monthly break-even point after the fourth month.

Elsewares seeks a financial package that is based on a five-year note amortized over fifteen years. The note will be personally guaranteed by the founder’s assets. The company will be able to amortize the note over 15 year, which will give it the opportunity to establish a good track record. This will allow the company to find alternative financing. Elsewares owners do not plan to take any profit out of the business before the long-term debt has been paid. Any remaining profits after debt payments have been made will be used to finance growth. This is mainly through the acquisitions of additional inventory.

1.1 Objectives

Presently, the three leading suppliers of imprinted pouches to advertising specialty distributors are located on the East Coast and are doing a combined $2,500,000 solely in the sales of pouches. Elsewares plans on concentrating its sales force to the west and to reach a respectable sale level by the year’s end. Elsewares is planning to factor in our growth by diversifying its product offering into unique promotional products which will be attractive in their own right or packaged within a drawstring pouch, which we also can provide.

1.2 Mission

Elsewares plans to create a range of unique products and drawstring packaging that adds value to these products. These products, which are sourced from Mexico or the Far East, will have various company logos imprinted before being shipped to distributors.

By joining the Advertising Specialties Institute trade association, Elsewares will have print and electronic access to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. This puts it behind newsprint and TV in terms spent on advertising. Elsewares won’t sell directly to end-users but will exclusively market their products through these distributors. Elsewares is planning to reach these distributors using advertisements in trade journals, an in house sales force, and network of commission-based and salaried sales reps.

1.3 Keys to Success

Elsewares management believes that it has the right products and the right people to attract a loyal customer base. But most importantly, it is our business philosophy that will ensure success. Advertising specialty industry requires products to be delivered on schedule and with high quality printing. These demands are being met

Elsewares can satisfy this demand through maintaining acceptable inventories that will be delivered on-time according to prearranged shipping schedules.

Elsewares will establish a quality control process to monitor the on-site imprinting equipment in order to guarantee an acceptable quality imprint.

Elsewares will not only offer a full line of velour packaging products but will also offer unique promotional products that will encourage advertising specialists distributors to think about Elsewares first when searching for original products.

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