Fire Equipment Retailer Business Plan
GALLAGHER'S FIRE SERVICE
432 Janeway Blvd.
Collier, VA 26650
This plan for a fire equipment retailer reveals how paying attention to needs in your community can pay off when it comes to planning your business. Often overlooked, city services, like the fire department, represent a niche market of sorts and can be a source of income as well as the general populace.
- EXECUTIVE SUMMARY
- DESCRIPTION OF THE BUSINESS AND INDUSTRY
- MARKET ANALYSIS
- COMPETITOR ANALYSIS
- STRATEGIC PLAN
- ORGANIZATION
- FINANCIAL PLAN AND FINANCIAL REQUEST
- SUMMARY AND CONCLUSIONS
- APPENDICES
EXECUTIVE SUMMARY
Mission Statement
To improve and promote safety in the home and at the workplace.
Business Objective(s)
We would like to turn it into a full-time family operated business within the next five years.
Competitive Advantage
Our business is a family owned small business that will attract the local community. It is a small area where marketing strategy relies on the promotion of word of mouth advertising.
Market Strategy
Word of mouth advertising and the implementation of safety seminars and product demonstrations.
The Management Team
Steve J. Gallagher, Jr. is the owner and operator. He takes care of all the refurbishing, public relations, and distribution. Dawn D. Gallagher takes care of ordering, marketing, and accounts receivable and accounts payable.
The Product
We will sell new and used extinguishers, hydrants, hoses, signs, smoke detectors, and equipment for several fire departments. Along with selling the products, we will refurbish and refill old extinguishers to make them look and operate like new equipment.
This is a unique business, in that we take old extinguishers that are no longer usable, break them down, completely refurbish the mechanical components, refill with a dry chemical, paint, and reapply stickers.
DESCRIPTION OF THE BUSINESS AND INDUSTRY
The Company
Our company was established out of a market demand. We were offered our first job in February of 1995. We had not even bought all of our equipment and supplies to complete a job of this size. This was what encouraged us to begin our business. We saw the need for the business in the area and the profit that could be made.
The business is very time consuming and a dirty job, but it also allows us to control the growth. It is something that you can work as much or as little as you want to. We also are very conscious about the environment. By refilling and putting to use the old fire extinguishers, they do not take up space in a landfill somewhere.
Our products have taken to the market very well. Some of the business owners didn't realize that there were laws as to how many extinguishers they needed and the distance between them that was allowed.
Competition is always a concern. They may not exist today but you can never verify their nonexistence tomorrow. At the present time, the closest business that offers similar services is more than one hour away.
The Industry
The development of OSHA brought about laws that every business will have at least one extinguisher every 75 feet, and the commercial vehicles will have at least one extinguisher when they are on the highways.
The industry will probably level off in the next three to five years, to a sustained rate that will provide us with a comfortable living. Once the demand has been met, we will check into carrying over into someone else's territory.
The Product
Fire safety equipment is used for prevention of a fire or to aid in the containing of a fire. The equipment must be in proper functioning condition to work when it is needed.
MARKET ANALYSIS
Description of the Customer
We decided on our business because of the customer's needs. We heard of a company's need for our business and that other local companies were also looking for this type of business. With the laws, these services are something that all businesses should have for their legal protection. We also read all of the OSHA rules and regulations to find out what most of our customers legally need.
Most of our customers are small businesses. We set up a monthly service contract, which kept our customers buying products and using our services. As a business would grow or expand or a new business opened, their needs would change. Our expectations are that our services will continue to be needed and as new laws and regulations change, we will learn them and pass them on to our customers. Our most effective media is word of mouth.
Target Market Description
Our customer's real criterion to purchase is the law. They want us to come back and make sure their equipment is still able to function properly if they should need it. They like being able to purchase our product or services from their own business, or in some cases, their own homes. We believe this is a service that our customers really like.
Summer is the best season for our market. Construction sites are very profitable for our business. They often have small fires that need to be extinguished, so they use their equipment. This in turn produces a need for us to come out and pick up their product with loaner equipment available until their products are returned.
Price really wouldn't affect our customer's purchases. This is a product that they have to purchase, and we are the only business that sells these types of products. They will pay for better quality. We only get our products from top name supplier. They better brand names really speak for themselves.
Competition has not moved into our territory yet. That was a big factor in our starting this type of business.
Market Influences
OSHA laws and other regulations.
Competitive Advantage(s)
We will keep the customer satisfied with our prices and customer service. We will only purchase the top of the line products to pass on to our customers and also offer a warranty on our services. We make it convenient to the customers by going to them. We keep up with the market changes. Our friendly incomparable services will keep our customers happy.
COMPETITOR ANALYSIS
Existing Competitors
We have no local competitors in the area. In our geographic segment our products and services are provided by no other company.
Potential Competitors
The market at this time is really to small.
STRATEGIC PLAN
Market Strategy
Short-term, provide in existing market, and long-term, to expand products, territory and market share.
Promotion
We use public relations for our promotions. We set up booths at different local events and direct marketing. We also use the newspaper and yellow pages as means of advertisement. This has been very effective.
Suppliers
Our major suppliers are Walter Kiddie, Amick, and Water Works. Their terms are all net 30 days. We try to keep as much on hand as we can, but delivery is less than one week. We try to schedule IIT Inventory, less overhead.
Distribution
Our product will be distributed by ourselves. We deliver our own products to our customers. This gives us a personal relationship with our customers.
Customer Service
On site, and the same business day if material is in stock.
Risk Assessment and Contingency Plans
New competition, new OSHA laws (good and bad).
ORGANIZATION
Management Philosophy
To provide the best equipment for the cheapest money.
Business Organization
This is a sole proprietorship. We were required to purchase a business license from the Department of Tax and Revenue in Chuckton, Virginia.
Succession Plan
Death of someone, or to hand down to the children.
Identification of Firms Assisting the Company
Our attorney is Garth C. Blake. We bank locally at the Bank of Thomasville. We carry our insurance through Glenby County Insurance Agency, and our advertising agency is the Citizen's News.
Staffing Plan
We currently employ two employees. They both are pursuing their college degrees. We have no plans to hire anyone else at the present time. We hope to take the business full-time with our current employees.
Steve will continue taking any classes offered through the local university that will help him to better understand the laws and regulations for the safety equipment.
Risk Management Strategies
Keep away from too much overhead, and to keep low prices as to not allow competition.
FINANCIAL PLAN AND FINANCIAL REQUEST
Financial Request
We chose equity financing. This was another reason to chose this type of business. It has a very low start up cost. We invested very little money from our savings to purchase our equipment and supplies we needed.
Financial Practices
The cash accounting method best suited our needs. We worked on an as need basis for awhile with products. We would order them on credit and then when we were paid, we would pay our supplier.
SUMMARY AND CONCLUSION
I believe that my business will prevail, not only for my service, but for the safety my service provides.
Current and Projected Profit and Loss Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Revenues | 32,000 | 55,000 | 50,000 | 62,000 | 70,000 |
| Less: Cost of Sales | 26,000 | 40,000 | 35,000 | 43,000 | 47,000 |
| Gross Profit | 6,000 | 15,000 | 15,000 | 19,000 | 23,000 |
| Less: | |||||
| Salary Expense | |||||
| Payroll Expense | |||||
| Other Services | |||||
| Office Supplies | 500 | 750 | 750 | 900 | 1,050 |
| Maintenance & Repairs | 500 | 500 | 500 | 600 | |
| 700 | |||||
| Advertising | 200 | 500 | 1,000 | 1,000 | 1,000 |
| Automobile | 1,000 | 1,500 | 1,500 | 2,000 | 2,000 |
| Travel & Entertainment | |||||
| Consulting Services | |||||
| Rent | |||||
| Telephone | 200 | 400 | 400 | 450 | 500 |
| Utilities | |||||
| Insurance | 300 | 300 | 300 | 300 | 350 |
| Taxes | |||||
| Interest | 200 | 500 | 500 | 550 | 600 |
| Depreciation | 500 | 500 | 500 | 500 | 700 |
| Other Expenses | |||||
| Total Expenses | 3,400 | 4,950 | 5,450 | 6,300 | 6,900 |
| Operating Profit | 2,600 | 10,050 | 9,550 | 12,700 | 16,100 |
| Add: Other Income | |||||
| Less: Other Expenses | |||||
| Pretax Profit | 2,600 | 10,050 | 9,550 | 12,700 | 16,100 |
| Income Tax Provision | 650 | 2,512 | 2,387 | 3,175 | 4,025 |
| Net Income after Taxes | 1,950 | 7,538 | 7,163 | 9,525 | 12,075 |
Current and Balance Sheet
| Current | Projected | |
| Assets | ||
| Current Assets: | ||
| Cash and equivalents | 46,500 | 60,000 |
| Accounts receivable | 3,000 | 6,000 |
| Inventory (net) | 12,000 | 15,000 |
| Office supplies | 500 | 750 |
| Prepaid items | 1,000 | 1,000 |
| Other current assets | 5,000 | 5,000 |
| Total Current Assets | 68,000 | 87,750 |
| Fixed Assets (net): | ||
| Furniture and fixtures | 1,500 | 1,500 |
| Leasehold improvements | ||
| Machinery and equipment | ||
| Total Fixed Assets | ||
| Other Assets | 2,000 | 4,000 |
| Total Assets | 71,500 | 93,250 |
| Liabilities and net worth: | ||
| Current Liabilities: | ||
| Accounts payable | 6,000 | 12,000 |
| Taxes payable | 3,000 | 5,000 |
| Interest payable | ||
| Current portion of | ||
| long-term debt | ||
| Short-term debt | 15,000 | 30,000 |
| Miscellaneous payables | ||
| Total Current Liabilities | 24,000 | 47,000 |
| Long-term Liabilities | ||
| Long-term debt (net) | ||
| Convertible debentures | ||
| Total Long-Term Liabilities | 24,000 | 47,000 |
| Net Worth: | ||
| Capital stock | 71,500 | 93,250 |
| Paid-in surplus | ||
| Retained earnings | ||
| Total Net Worth | 71,500 | 93,250 |