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Comic Sans Lounge & shop for all things “Unique and Geek” Comic Sans
| Date post: | 21-Mar-2017 |
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Comic Sans
Lounge & shop for all things “Unique and Geek”Comic Sans
2
Comic Sans
Brief overview of our key
recommendation points
Overview
1
In-depthDecisio
n
6
Additional recommendation
s that Comic Sans should undertake
Additional
7
Implementations to be made in 3-5
months
Short Term
8
Implementations to be made past 5 months and into the
next fiscal year
Long Term
9
Available to answer and
questions that you may have.
Questions10
PEST & Porter Analysis
External2
OUR AGENDAA brief overview of today’s presentation
Internal4
SWOT with key functional
areas
KSF’s3
Industry essentials&
decision criteria
The options that are available to
Comic Sans
5Alternativ
es
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Comic Sans
Recommendation OverviewNext Steps for Comic Sans
Meet withMcCoy
Schedule meeting
Assess commitment
Payout FocquetBusiness Valuation
= $214 420
$15 000 from each partner is fair for her 20 %
share in the company.
$30 000 total
payout
Status QuoCurrent Location
Hire the additional employee
Implement the Geek Lounge
Marketing PlanCore elements Focus on
social media and infrastructural changes
$10 000 new budget
Social mediaFacebook Instagram
StructureLoyalty program
Website
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Comic Sans
PoliticalPackaging requirementsTuition strikes
P
PEconomicCustoms and duties in
importsStrong CAD
E
PEST AnalysisCurrent Situational Analysis
S TE
SocialStudents diverse areaInnovative and considered the
intellectual capital
S
TechnologicalNo data on hand at the
momentCustom designed productsCompetitors online
presence
T
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Comic Sans
Foot traffic = window shopping = impulse buys
Specific niches
Loyalty program
Excellent customer service tied with brand image and reputation
Brick & Mortar
ThinkGeek.com
GeekCantina Inc.
Location dependent success
Market share
Experience & atmosphere
Product selection
Brick & Mortar
ThinkGeek.com
GeekCantina Inc.
Competitive Analysis S&WThree Main Competitors
Key Strengths Key Weakness
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Comic Sans
Passionate Knowledgeable Engaging
Customer Service
Consider individuality within target market
Be adaptive to ever changing market
Customer Reach
Availability Variety Accessibility
Product Selection
FORMULA TO SUCCESSThree Major Key Success Factors
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Comic Sans
S WTO
SWOT ANALYSISInside out Analysis for next steps
Human Resources Engineers, highly skilled Passionate, engaged and
interested
Human Resources Language barrier Lack of knowledge about
financial statements Operations Clear divisions of labour Improving inventory days
Finance Amazing margins Great cash flow No A/R Can leverage payables
Marketing Great reputation within community New experience each time
Operations Long sourcing times for products Inventory still slightly mismatched to payables Must label all products in French
Finance Reduced capabilities Acid ratio
Marketing Time spent with customers shall
have to be reduced
Comic book industry trend
Increased demand in current store may provide avenue for expansion and eventual growth of operations
Increased in convenience of online retailers
Digital comics and other eBook formats may take away from physical copy sales
Rival’s charity initiative
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Comic Sans
Passionate Knowledgeable Engaging
Consider individuality within target market
Be adaptive to ever changing market
Availability Variety Accessibility
Customer ServiceCustomer Reach Product Selection
FORMULA TO SUCCESSThree Major Key Success Factors
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Comic Sans
Alternatives AvailableLaying out all the options
Status Quo
+
Expansion Exit Plan
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Comic Sans
ExpansionWould an expansion be feasible?
Quantitative Qualitative Strengthens Comic Sans’ brand name
and loyal customer base
Allows Comic Sans to expand customer reach and attain many more loyal customers
Unknown risks of managing that many employees and finding trustworthy talent
Detracts from the customer “experience”, split in-between 2 stores, hard to preform while restructuring
No payback, negative IB ($91K to $41K) for all scenarios, unsustainable for owners drawings
Labour and new overhead costs severely cut into profitability ($72K + $30K)
Increased long-term earning potential if overhead can be reduced or sales can be raised
Very hard to raise capital of $50K for expansion
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Comic Sans
Status QuoSticking to what customers already love us for
Quantitative Qualitative
Keep experience centric approach, i.e Geek lounge, more time to focus on customers
Does not build client base as large as expansion
Always have the option of expanding in the future, when appropriate, not locked by commercial lease
Make 4X much net income in low scenarios vs expansion and no additional investment required
May have less potential payoff for the long term future
No payback time, allows for drawings ofUP TO: $45 000 - $50 000 for each partner
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Comic Sans
Exit StrategyShould Comic Sans exit the industry?
Quantitative Qualitative
Focus upon engineering career, purse alternate passion and greatly lower risk and attain a stable income
Experience of a small business, easier job prospects, bilingual issue
Lengthy and time consuming process that shall involve multiple legal proceedings, lost income and manageability
Monetary payoff shall be a large sum of POTENTIALLY : $214 420, realistically $150 000 = $60 000 SW&Mc + $30 000 NF
Giving up all potential future earnings which outweigh initial partner payouts
Very hard to find a buyer that would be wiling to pay and take over business
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Comic Sans
Risk ToleranceWhat is acceptable to Waldrop and McCoy?
Low risk High risk!
Moderate risk
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Comic Sans
Decision CriteriaCriteria for the best decision
Status QuoCriteria Expansion Selling
“Cut the umbilical cord”Future potential growth
Act swiftly and manageably
Apply engineering talentMeet risk tolerance
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Comic Sans
Decision Time!The very first actions to be taken
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Comic Sans
McCoyEnsuring McCoy’s commitment
See where McCoy stands
Schedule a partner meeting
Check up on McCoy
Hire new employees
Continue with action plan
Allow McCoy time off
Prioritize GL and CS Insider
Continue action plan
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Comic Sans
Payout Partner: Focquet2nd Order of business (and valuation $$$)
$30 000
Company valued at $214 420
P/E Multiple of 4 NPAT = $53 605 Moderate Risk
Low – Medium Growth 214 420 *20%
= 42 884
42 884 – 18 000 (drawings from this year)
= 24 884
Goodwill of $5116 included
Both Waldrop and McCoy only have take out $15 000 each from parents
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Comic Sans
Accounting skills
Bilingual
Translations in the long run
Interpersonal skills
New EmployeeSourcing the Right Employee
Job postingsReview transcripts
Trial period Interviews
Show certificate Interviews
Testing
InterviewsCommitment within
trial period
Comic Sans
Why? Utilize available space in store, “more than
sufficient”Competitive advantage Relaxing atmosphere and hub to enjoy featured
activities and events
Geek LoungeRevolutionizing the experience!
HowMonthly events
$3,000 budget Set up within 2 months
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Comic Sans
1 Target Market
CS Insider$2975 + $1000 = $3975
Social Media Strategy$800 + $1500 = $2300Website $0 + $450 + $35 + $240 = $725
Year Plan$3000 (Geek Lounge Furniture)
2345
Launch Marketing PlanGetting the message out to the masses
Switching from a time intensive to rapid and cost focused strategy
Total Marketing Budget$10 000
=
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Comic Sans
Target MarketReach out to all the right people
Turning visitors into followers and developing a loyal customer base
Visitors
Additional attention diverted
during the summer seasons
Make up 80% of foot traffic
Events and recognizes Montreal as a place for geek culture in addition to the annual Comic Con
Price sensitive
Aware of our Facebook endeavors.
Appreciate being rewarded for loyalty
Customer reach through word of mouth and close knit communities
Followers98- 98-
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Comic Sans
Rewards ProgramOur members deserve the very best – CS Insider
Set the date!Promotion prior to new year
launch
Let everyone knowInform customers of the loyalty program in store
when they shop
Offer a reward!Events, insider goods, double
point goodies
Customers cash back in 10% of sales (8.5% actually take advantage of
this)Budget of $2 975
$1 000 in initial database and software costs
$Cash back time!
$3 975 =Total
Loyal customer base growth!
Conservative Projections427 customers from 413 (2012)
High Projections487 customers from 413 (2012)
98-
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Comic Sans
Themes Schedule for 2013 January New Years
January 1New Years clothing, shot glasses and wine glasses
February Valentine's Day February 14
“I love you” “I Know” rings and Star Wars Bouquet
March St. Patrick’s March 17
Green Lantern keychains and 10% off limited green clothing
April April Fools April 1
Geek Out card deck and Crabs Adjust Humidity,
May Iron Man 3 Movie Release May 3
Iron man Superhero figures, Iron Man charm beads, and 10% off Iron Man backpack
June Quebec National Day All souvenirs valued at $5 or lessJuly Comic-Con International
July 8-21Comic Con posters, phone cases, and mugs
August Extend Comic-Con rewards for August
September Montreal Comic-Con September 14
Draw to win 2 tickets, 10% off of back packs for silver and gold members, book cases
October Halloween October 31
Halloween themed board games and candy treat bags valued at $5 each
November Thor: The Dark World Movie Release November 8
Marvel jewelry, 10% off for all members
December Christmas Season December 25
Giant plush toys as stocking stuffers and red or green coloured mugs
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Comic Sans
Social Media Outreach: FacebookLocal outreach
100 000Cost Item
$1 500 100 000 impressions
$800 Ad development costs
$2 300 Total FB Costs
+
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Comic Sans
Social Media Outreach: InstagramInteracting and building a follower base for FREE!
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Comic Sans
WebsiteStage 1: Inform | Stage 2: Experience
Cookie based recommendatio
nsVoting system
EventsStay tuned with
Comic Sans’ year long
events
ExchangeMonitor, update
and see up coming
promotions
RewardManage your CS
Insider points
WishCreate a wish
list of you most wanted items
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Comic Sans
Website CostsBudget Allocations
In-house website development $0Professional translation
$450
Domain $35
Hosting$24
0=
$725
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Comic Sans
Passionate Knowledgeable Engaging
Consider individuality within target market
Be adaptive to ever changing market
Availability Variety Accessibility
Customer ServiceCustomer Reach Product Selection
FORMULA TO SUCCESSThree Major Key Success Factors
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Comic Sans
Long term5 Months+ and Future potential considerations for next year
Trend Predictions
Constant Improvements on Website, FB and Twitter
Promotional Plan with Famous Canadian YouTubers
Database Build Up
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Comic Sans
Payout$30 000 total$15 000 from Waldrop and
McCoy
Social MediaFacebook
(acquisition)Instagram (retention)
StructuralGeek LoungeLoyalty ProgramWebsite
Status QuoHire and train new part time employees
RecapBrief recap of our key decision points
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Comic Sans
Questions?Feel free to ask us any questions you may have!
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Comic Sans
Valuation – Net Book ValueFeel free to ask us any questions you may have!
Valuation of company
2012 2011
Net Book Value
$69775 54227
$13955
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Comic Sans
Valuation – Economic ValueFeel free to ask us any questions you may have!
AssetsCurrent Assets
Cash 26280 X 100% 26280Inventory 33364 X 55% 18350.2
Total Current Assets 59644
Fixed AsstesLeasehold improvements 35000Less: Accumultaed Depreciation 7000
Net Fixed Assets 28000 X 35% 9800
Total Assets 87644 $54430.2
New Ecomic Value = $29561.2
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Comic Sans
Valuation – Projected EarningsFeel free to ask us any questions you may have!
Risk Moderate Risk
Growth Low – Moderate Growth Use a Multiplier of 4x
Earnings from 2013 Projected Status Quo $53605
$214418.2
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Comic Sans
Projected Statements – Status QuoFeel free to ask us any questions you may have!
Comic SansProjected Income statement - Status Quo
For the year ended Oct, 31, 2013
2013 - Low 2013 - HighSales
Total Sales 350000 400000COGS (50%) 175000 200000
Gross Profit 175000 200000
ExpensesRent 45600 45600Labour (40hours * $14/hr * 5days*50 weeks) 28000 28000Advertising (increased budget) 10000 10000Depreciation 3500 3500Variable Expenses (3.74…%) 13106 14978Fixed Expenses 3321 3321
Total Expenses 103527 105399
Net income before tax $71473 $94601Tax (25%) 17868 23650Net Income After Tax $53605 $70951
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Comic Sans
Status Quo – High Scenario JustificationFeel free to ask us any questions you may have!
1.Reduced foot traffic from last year2.Increase in marketing budget 3.Natural sales growth (183.7 % in second year,
14.28% for the 50K)
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Comic Sans
Net Benefit Analysis – ExpansionFeel free to ask us any questions you may have!
Net Benefit Analysis - 2 Store Option - Low
Incremental Benefits
Additional sales 50000
Incremental Costs
Labour Costs ($18/hr * 40hrs * 50 * 2) 72000Additional Rent 36000Marketing 8000COGS 25000Total 143000
Incremental Benefit -$91000
Investment $50,000
Payback Time N/A
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Comic Sans
Net Benefit Analysis – ExpansionFeel free to ask us any questions you may have!
Net Benefit Analysis - 2 Store Option - Avg
Incremental Benefits
Additional sales 125 000
Incremental Costs
Labour Costs ($18/hr * 40hrs * 50 * 2) 72000Additional Rent 36000Marketing 8000COGS 37500Total 178 500
Incremental Benefit -$78500
Investment $50,000
Payback Time N/A
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Comic Sans
Net Benefit Analysis – ExpansionFeel free to ask us any questions you may have!
Net Benefit Analysis - 2 Store Option - High
Incremental Benefits
Additional sales 250 000
Incremental Costs
Labour Costs ($18/hr * 40hrs * 50 * 2) 72000Additional Rent 36000Marketing 8000COGS 125 000Total 241 000
Incremental Benefit $9000
Investment $50,000
Payback Time 5.56 years
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Comic Sans
Marketing Budget LayoutFeel free to ask us any questions you may have!
Marketing Budget Breakdown
Loyalty program costs 2975Software 1000 3975FB development 800FB Advertising 1500 2300Geek Lounge 3000 3000Website Developemt 0Translation 450Domain 35Hosting 240 725
10000 10000
Loyalty program costs 350000 35000 2975
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Comic Sans
Customer Base Calculations – 2012 Feel free to ask us any questions you may have!
2012 Status Quo
338273 = 55x + 600y
6150.418182 = 1x + 10.90909091y
6150.418182 = 1x + 10.9090(0.25) x
6150.418182 = 1x + 2.727272727x
6150.418182 = 3.727273x
1650.112195 = x
# of Infrequent Customers = 1650.112# of Loyal Customers = 412.528Total Customers that walked in = 2062.64
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Comic Sans
Full Customer Base CalculationsFeel free to ask us any questions you may have!
Year Decision Infrequent # Amount spent Loyal # Amount Spent Grand Total Cutomers Grand Total from sales
2011SQ 55 581.5805 31986.92683 600 145.39512 87237.07317 726.9756098 119224
2012SQ 55 1650.112 90756.17073 600 412.52805 247516.8293 2062.640244 338273
2013SQ - Low 55 1707.317 93902.43902 600 426.82927 256097.561 2134.146341 350000
2013SQ - High 55 1951.22 107317.0732 600 487.80488 292682.9268 2439.02439 400000
2013Expansion - Low 55 1951.22 107317.0732 600 487.80488 292682.9268 2439.02439 400000
2013Expansion - High 55 2926.829 160975.6098 600 731.70732 439024.3902 3658.536585 600000
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Comic Sans
Limited supplier for certain items Various suppliers gives us power No contracts or switching costs
Supplier Power
PORTER AnalysisAn ADDITIONAL overview of the industry and its main influences
Purchase impact/knowledge Higher income No price bargaining
Buyer Power
No switching costs except for time Niche market One of the few Brick and Mortar locations
Substitute Products
No government policy No barriers to entry High differentiation categorically
New Entrants
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Comic Sans
Accounting skills
Bilingual
Translations in the long run
Interpersonal skills
New EmployeeSourcing the Right Employee
Sage 50FreshbooksQuickBooks
Excel
Procedural product translation
Follow-up emails andinquiries
Clientele profilesSales etiquette
Customer service training
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Comic Sans
Store Hours AppendixFeel free to ask us any questions you may have!
Open Close
Monday 10:00:00 20:00:00 10:00:00Tuesday 10:00:00 20:00:00 10:00:00Wednesday 10:00:00 20:00:00 10:00:00Thursday 10:00:00 20:00:00 10:00:00Friday 10:00:00 20:00:00 10:00:00Saturday 10:00:00 18:00:00 08:00:00Sunday 10:00:00 18:00:00 08:00:00
66:00
66 hours of operations vs the 40 that the employees are scheduled for
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Comic Sans
Store Hours AppendixFeel free to ask us any questions you may have!Monday 10:00:00 13:00:00 03:00:00Tuesday 10:00:00 13:00:00 03:00:00
Wednesday 10:00:00 13:00:00 03:00:00Thursday 10:00:00 13:00:00 03:00:00Friday 10:00:00 13:00:00 03:00:00Saturday 10:00:00 18:00:00 08:00:00Sunday 10:00:00 17:50:00 07:50:00
30:50
40:00Monday 18:00:00 19:50:00 01:50:00Tuesday 18:00:00 19:50:00 01:50:00
Wednesday 18:00:00 19:50:00 01:50:00Thursday 18:00:00 19:50:00 01:50:00Friday 18:00:00 19:50:00 01:50:00Saturday 00:00:00 00:00:00 00:00:00Sunday 00:00:00 00:00:00 00:00:00
9:10
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Comic Sans
Short TermDetailed plan of the next 3-5 months
McCoy Situation:Immediately – 1 week
Payout Nina Foucquet1-2 weeks
Follow up MeetingWithin 1-3 Weeks
Start Process: Hire New employeeAfter 3 weeks - Week 8 (end of December)
Start Website DevelopmentStage 1: After 2 weeks till launch on Jan 1
Stage 2: in the next 2 months
Geek loungeAfter 4 Weeks – 8 Weeks
Facebook and InstagramAfter 5 weeks for development and then continually.
