Are you about starting a toy store online? If YES, here is a complete sample toy store business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting a toy store. We also took it further by analyzing and drafting a sample toy store marketing plan template backed up by actionable guerrilla marketing ideas for toy store companies. So let’s proceed to the business planning section.
Why Start a Toy Store Online?
Children love toys and do not like to be without them, and that is why retailing toys is a very profitable business. Starting a toy store business is just like starting any other retailing business; it will require startup capital (money), planning (feasibility studies, market survey, budgeting), and of course time. Toy store businesses have become an essential part of our world because playing with toys is an enjoyable part of childhood experience.
The items that are sold in toy stores are in demand all over the world, making them a good and profitable business to start. If you are considering starting this type of business, then you must hunt for the right location, especially a location with children. With the right location, the correct items in stock, and good pricing structure, you can start making profit as soon as possible after opening your toy store.
If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan. Below is a sample toy store business plan template that will help you successfully write yours without much stress.
A Sample Toy Store Business Plan Template
1. Industry Overview
Players in the toy and hobby store industry sell a wide range of toy and hobby goods such as traditional dolls and toys, electronic toys (including video and electronic games), board games, hobby kits and craft supplies et al. These goods are retailed to the general public after they are purchased from local and international manufacturers and wholesalers.
In recent time, the toy and hobby store industry has done brilliantly, growing in line with economic recovery. On the other hand, competition from discount department stores and e-commerce channels has absorbed much of the demand for industry products by offering low prices and one-stop-shop convenience.
In view of that, discount stores have become the leading hobby and toy retailers in the united states and in other countries of the world. IBISWorld projected that despite an extremely competitive environment both internally and externally, hobby and toy retailers are expected to experience growth over the five years to 2022.
The Toy and Hobby Stores industry is indeed a very large industry and pretty much thriving in all the parts of the world. Statistics has it that in the United States of America alone, there are about 21,418 legally registered toy and hobby stores responsible for employing about 158,296 employees and the industry rakes in a whooping sum of $20bn annually. Hobby Lobby Stores Inc., Michaels Stores and Toys “R” Us Inc. have the lion share in the USA market.
A recent research conducted by IBISWorld shows that the Toy and Hobby Stores industry has crafted moderate revenue growth over the past five years. Operators in this industry retail a variety of toys and hobby goods, including dolls, electronic toys, games, hobby kits and craft supplies.
The research also shows that over the five years to 2017, industry operators steadily recovered from recessionary lows, in line with improving economic conditions. Even so, as consumer income rose during the period, competition intensified and operators both within and external to the industry fought to win over consumers.
Increased competition from discount department stores and online retailers stifled industry sales and profitability, as lower-priced comparable products increasingly lured customers away from traditional industry operators.
This line of business is evergreen and thriving. In response to the ever-growing demand for items sold in toy and hobby stores, players in the industry are now opening additional stores thereby creating chains of stores across different cities. They are always ready to expanded into new markets and of course adapt to the changing trend in consumer tastes.
2. Executive Summary
Awesome Kids™ Toy Store, Inc. is a neighborhood toy store that will be located in a growing community in First Avenue, Cherry Creek – Denver. We conducted our feasibility studies and market survey and we came to the conclusion that Cherry Creek is the right location for us to launch our toy store.
We are in the toy and hobby goods industry to make profits and at the same time to give our customers value for their money whenever they patronize us. We want to give people who patronize our toys and hobby goods store the opportunity to choose from a wide range of toys, games and other related products. We will engage in retailing new and used toys, games and hobby goods. We will leverage on all major retail channels, including specialty stores, merchandisers and online stores.
We are aware that there are several toy and hobby stores all around Cherry Creek – Denver, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business. We ensured that our facility is easy to locate and our outlet is well secured and equipped with the various payment of options available in the United States of America
Much more than retailing quality and affordable toys and related products, we will ensure that our customer care is second to none in the whole of Cherry Creek – Denver. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied whenever they visit our store.
We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the number of our customer base may grow to. We will ensure that we get our customers involved in the selection of brands that will be on our racks and also when making some business decisions that will directly or indirectly affect them.
Awesome Kids™ Toy Store, Inc. is a registered business that is owned by Mrs. Mabel Bannon and her immediate family members. She has successfully managed several toy and hobby stores both in Cherry Creek and San Diego prior to opening her own toy and hobby store. She has a Degree in Business Administration and she will run the business alongside her immediate family members.
3. Our Products and Services
Awesome Kids™ Toy Store, Inc. is going to operate a standard neighborhood toy store business that will retail a wide range of toys from both local and international manufacturers just like any other standard toy store in the United States and in any part of the world. We are in the toy and hobby stores industry to make profits and give our customers value for their money.
These are some of the products that we will retail in our toy store;
- Traditional entertainment and learning games
- Electronic and video games
- Traditional toys
- Hobby goods
4. Our Mission and Vision Statement
- Our vision is to establish a one stop toy store business in Cherry Creek – Denver and in other cities in the United States of America where we intend opening our chains of toy and hobby stores.
- Our mission is to establish a toy store that will make available a wide range of toys and related products from top brands at affordable prices to residents of Cherry Creek and other cities in the United States of America where we intend opening our outlets and selling our franchise.
Our Business Structure
We do not intend to run a toy and hobby store business like the usual mom and pop business around the street corner; our intention of starting our store is to build a standard toy and hobby store that will be a one-stop shop which is why we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.
We will ensure that we only hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders. As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more especially when we start selling our franchise or running chains of toy and hobby stores.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
- Store Manager
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
- Store Attendant/Customer Services Executive
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (Owner):
- Upsurges management’s effectiveness by employing, choosing, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Connecting, and executing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Generating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Accountable for managing the daily activities in the store.
- Guarantees that the store facility is in tip top shape and conducive enough to welcome customers.
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Controls the sales floor inventory.
- Ensures that goods and products are properly arranged
- Supervises the entire sales staff and workforce
- Handles any other duty as assigned by the CEO
- Accomplishes vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Helps to ensure consistent quality of toys and hobby goods supplies on our rack
- Responsible for the purchase of toys and related products for the organization
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Handles eCommerce aspect of the business.
- Responsible for installing and maintenance of computer software and hardware for the organization.
- Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) system.
- Manages the organization’s CCTV.
- Handles any other technological and IT related duties.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Store Attendant/Client Service Executive
- Ensures that all contacts with customer (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the store manager in an effective and timely manner
- Consistently stays abreast of any new information on products, promotional campaigns etc. to ensure accurate and helpful information is supplied to our customers when they make enquiries
- Finds out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
- Makes suggestions and encourage purchase of products
- Provides information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options
- Bags or packages purchases and gift wrap merchandise
- In charge of cleaning the store facility at all times.
- Ensures that toiletries and supplies don’t run out of stock.
- Handles any other duty as assigned by the store manager.
6. SWOT Analysis
Our intention of starting just one outlet of our toy and hobby store in First Avenue, Cherry Creek – Denver is to test run the business for a period of 2 to 4 years to know if we will invest more money, expand the business and then open other stores around Denver.
We are quite aware that there are several toy and hobby stores all over Cherry Creek – Denver and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Awesome Kids™ Toy Store, Inc. employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Awesome Kids™ Toy Store, Inc.
Our location, the business model we will be operating, varieties of payment options, wide range of toys and related goods from local and international manufacturing brands and our excellent customer service culture will definitely count as a strong strength for Awesome Kids™ Toy Store, Inc.
A major weakness that may count against us is the fact that we are a new toy and hobby store in Cherry Creek – Denver and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business.
The fact that we are going to be operating our toy store in one of the fastest growing residential estates with the right demographic composition in Cherry Creek – Denver provides us with unlimited opportunities to sell our items to a large number of people. We have been able to conduct thorough feasibility studies and market survey and we know what our potential customers will be looking for when they visit our toy and hobby store.
We are quite aware that just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new toy and hobby store in same location where ours is located or even the arrival of a mall where toys and related goods are retailed.
7. MARKET ANALYSIS
- Market Trends
If you are close observer of the toys and hobby industry, you will agree that during the last five years, the intensely competitive environment has driven many small players to exit the industry. Due to their size, large companies are able to offer competitively priced goods and the number of children under the age of nine is projected to grow.
Although these trends are forecast to continue over the next 5 years, some toy and hobby stores will benefit from increasing demand for new technologies such as video games. Beyond every reasonable doubt, the store that can successfully flow with the trend and keep up with consumer and technology trends will definitely fare well in the coming years
Another notable trend in the industry is that it is now a common phenomenon for toys and hobby stores to leverage on technology to effectively predict consumer demand patterns and to strategically position their store to meet their needs; in essence, the use of technology helps retailers to maximize supply chain efficiencies.
8. Our Target Market
When it comes to selling items that are found in toy and hobby stores, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who reside in the locations where we intend opening our store. One thing is certain; we will ensure that we only retail quality and affordable items in our toy and hobby store.
In view of that, we have positioned our store to service schools and residents of Cherry Creek – Denver and every other location where our toy and hobby goods store will be located all over the United States of America and Canada. We have conducted our market research and we have ideas of what our target market would be expecting from us.
We are in business to retail toys and hobby goods to the following groups of people;
- Schools and Students
- Households (parents)
Our Competitive Advantage
The competitive advantage that will help us standout from our competitors is not restricted to having an exclusive sales contract, stocking seasonal products and access to highly skilled workforce.
Our toy and hobby goods store is located in a corner piece property on a busy road directly opposite one of the largest residential estates and office district in Cherry Creek – Denver and few meters away from a busy school district.
One thing is certain; we will ensure that we have a wide range of quality and affordable items (toys and related goods) available in our store at all times. It will be difficult for customers to visit our store and not see the items that they are looking for. One of our business goal is to make Awesome Kids™ Toy Store, Inc. a one stop shop.
Our highly experienced and qualified management, customer service culture, online store, various payment options and highly secured facility with enough packing space will also serve as a competitive advantage for us.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Awesome Kids™ Toy Store, Inc. is established with the aim of maximizing profits in the toys and hobby goods industry and we are going to go all the way to ensure that we do all it takes to sell a wide range of products to a wide range of customers.
Awesome Kids™ Toy Store, Inc. will generate income by;
- Retailing of traditional entertainment and learning games
- Retailing of electronic and video games
- Retailing of traditional toys
- Retailing of hobby goods
10. Sales Forecast
It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available on the field.
One thing is common with toy and hobby stores, the larger a toy and hobby store, the larger the number of customers that will patronize them. Although we may not be as large as Hobby Lobby Stores Inc., Michaels Stores, and Toys “R” Us Inc., but we will ensure that within our capacity we make available a wide range of items from different brands / manufacturers in our store.
Below are the sales projections that we were able to come up with for the first three years of operation;
- First Fiscal Year: $120,000
- Second Fiscal Year: $250,000
- Third Fiscal Year: $450,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and the arrival of a competitor in the same location as ours within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Awesome Kids™ Toy Store, Inc. we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for schools and residents of Cherry Creek – Denver and in every other city where our chains of toy and hobby stores will be opened. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Cherry Creek – Denver. In other to continue to be in business and grow, we must continue to sell the products that are available in our store which is why we will go all out to empower or sales and marketing team to deliver.
In summary, Awesome Kids™ Toy Store, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our toy and hobby goods store by sending introductory letters to schools, residents, and other key stake holders in and around Cherry Creek – Denver
- Open our toy and hobby store with a party for children in the community
- Advertise our business in community based newspapers, local TV and radio stations
- List our business on yellow pages ads (local directories)
- Attend trade fairs and relevant exhibitions to sell our toys and hobby goods
- Leverage on the internet to promote our business
- Engage in direct marketing
- Encourage word of mouth marketing (referrals) from satisfied and loyal customers
11. Publicity and Advertising Strategy
Despite the fact that our store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our toy and hobby store.
Awesome Kids™ Toy Store, Inc. has a long-term plan of opening chains of toy and hobby stores in various locations all around the United States of America which is why we will deliberately build our brand to be well accepted in Cherry Creek – Denver before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand to the public. Here are the platforms we intend leveraging on to promote and advertise Awesome Kids™ Toy Store, Inc.;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like Instagram, Facebook, twitter, et al to promote our brand
- Install our billboards in strategic locations all around Cherry Creek – Denver
- Engage in roadshows from time to time in and around the location of our toy and hobby goods store
- Distribute our fliers and handbills in target areas in the community where our toy and hobby goods store is located
- Position our Flexi Banners at strategic positions in the location where our toy and hobby goods store is located
- Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our organization’s logo et al.
12. Our Pricing Strategy
Pricing is one of the key factors that gives leverage to toy and hobby stores and retailing businesses generally, it is normal for consumers to go to places where they can get items at cheaper price which is why big players in the toy and hobby stores industry attract loads of consumers.
We know we don’t have the capacity to compete with other bigger stores, but we will ensure that the prices of all the items that are available in our toy and hobby goods store are competitive with what is obtainable amongst toy and hobby stores within our level and in our location.
- Payment Options
The payment policy adopted by Awesome Kids™ Toy Store, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Awesome Kids™ Toy Store, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for our products without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who purchase our goods.
13. Startup Expenditure (Budget)
When it comes to starting a toy and hobby goods store business, the major areas that you look towards spending the bulk of your cash is in of course renting or leasing a standard store facility. Aside from that, you are not expected to spend much except for paying of your employees and the stocking of your store with a wide range of toys.
These are the key areas where we will spend our startup capital;
- The total fee for registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
- Marketing promotion expenses for the grand opening of Awesome Kids™ Toy Store, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
- The cost for hiring business consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
- The cost for shop remodeling (construction of racks and shelves) – $20,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits – ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for Start-up inventory (stocking with a wide range of both locally and imported quality toys and hobby goods from different manufacturing brands) – $70,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs – $5,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of Launching a Website – $600
- The cost for our opening party – $7,000
- Miscellaneous – $10,000
We would need an estimate of $250,000 to successfully set up our toy and hobby goods store in Cherry Creek – Denver.
Generating Startup Capital for Awesome Kids™ Toy Store, Inc.
Awesome Kids™ Toy Store, Inc. is a family business that is solely owned and financed by Mrs. Mabel Bannon and her immediate family members. They do not intend to welcome any external business partners, which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $100,000 (Personal savings $75,000 and soft loan from family members $25,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Awesome Kids™ Toy Store, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our toy, hobby goods and other related merchandize a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Awesome Kids™ Toy Store, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organizations’ corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the store: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party planning: In Progress
- Compilation of our list of products that will be available in our store: Completed
- Establishing business relationship with vendors – wholesale suppliers of various brands of products (toys and hobby goods) that we intend retailing: In Progress