A Business PlanPrepared for H------- Bank
by Joe and Tammy
February 6, 2000
Statement of PurposeThis business plan was created to
introduce H------- Bank to a business idea by Joe and Tammy Burns,
The following pages will provide a business description, financial and
StreetArtist.com will be a new business so all of the funds requested herein
will go towards start-up costs including hardware, software, product, and
advertising. A break down of the requested loan amount can be found within this
We are asking for $1XX,XXX to start StreetArtist.com.
StreetArtist.com OwnersJoe Burns, Ph.D.
Burns is currently a professor of Communications and the Internet at
Southeastern Louisiana University. In addition to his teaching load, Dr. Burns
consults for New York based Earthweb. He had previously started a profitable
Internet business, HTMLGoodies.com. In 1998, HTMLGoodies.com was sold to
Earthweb who now pays Dr. Burns a monthly consultant fee to maintain the Web
site. Dr. Burns is well versed in Internet business having created Web sites and
helping to build Internet businesses since 1992.
Tammy Burns is currently a salesperson. She holds a bachelor's degree in
journalism and professional writing. In addition, she holds a degree as a
registered respiratory therapist.
Description of BusinessStreetArtist.com is an
Internet-based art gallery selling paintings from European street artists.
StreetArtist.com will be open 24 hours a day, seven days a week, 365 days a
year. That's the main benefit of an online business. The Web site will go live
September 1, 2000.
StreetArtist.com will sell art sold directly to us by
street artists in and around Europe. Our first trip after conceiving the idea
convinced us that product would be plentiful as many street artists were willing
to sell their collections for very modest prices.
The amount of art was vast and the prices per painting ranged from $XX up to
$XXX. However, we found, after talking to many artists, that if we purchased
their art in bulk, they would be willing to drop their prices.
This will allow us to purchase more art for less money giving the customer a
greater selection and giving StreetArtist.com an edge in the art market.
We expect each piece of art to sell for between $XXX and $XXX dollars and,
from that, for StreetArtist.com to gross over $XXXXXX from each trip abroad.
We expect to make at least two trips each year to buy art.
Street art is defined as paintings and other pieces of
art purchased from artists selling original art on the streets of Europe. We have spoken to many artists and art buyers and
the allure of the art being from Europe is very appealing to them.
There are certainly other art galleries on the Web
as well as in traditional brick and mortar stores. Where StreetArtist.com is
different is the product. Each piece of art will come from Europe and will be an
original. We will not sell numbered copies or hand-painted screen-printings. An
extensive search of the Web and numerous art-based magazines proved to us that
we would be the first to specialize in European street art. Another selling
point is price. The majority of galleries on the Web start their prices around
$500 targeting consumers of fine art and name-buying. Our paintings will be
originals, every bit as high in quality, but $1500 will be well above our top
StreetArtist.com will advertise both on the Web and in
art-based traditional and trade magazines. Our customers are interior
decorators, the framing industry, bulk art buyers, and of course, the end
consumer who wants a beautiful, and original, piece of art from Europe. Our art
is priced so that it is not out of the reach of anyone who loves art.
UPS will act as our customs broker. Since our art will be
shipped from Europe unframed, there will be no duty charge to import it into the
country. There will be port fees.
The art and the StreetArtist.com business office will
be housed in XXXXXXXX. There
will be no gallery at that location. All art will be sold online.
The software to run StreetArtist.com is custom written
for our gallery business. The entire site will be database driven offering
customers the ability to look at paintings by choosing numerous topics. The site
will, in effect, choose the art for the customer depending on what the customer
requests. One of the problems in online business is selling a product that is
not available or is out of stock. The StreetArtist.com software is written to
only allow a painting to be purchased once. Once the purchase is made, another
customer cannot see the painting. That way there are no “double selling” errors.
We don't have doubles of anything so this is very important.
StreetArtist.com will accept payment via credit card over
the Web. The StreetArtist.com server will be secure at 128-bit encryption.
StreetArtist.com will open a merchant account with H------- Bank. When a
purchase is made, the card number will be kept in a secure portion of the server
and retrieved by us over a secure line. We will then enter the purchases by hand
at the end of each day. We feel this is the best method in that it does not
involve a third party and will allow us to verify each purchase ourselves. We
can also quickly deal with any returns.
Shipping from StreetArtist.com to the customer will be
done through the U.S. Postal Service. Registered mailing will be included in the price.
StreetArtist.com will run from its own server housed
at XXXXXXXX.com located in XXXXXXXX. The server will run from a T1
Internet line capable of handling great volumes of visitors and requests. The
server will run software designed especially for StreetArtist.com by
professional computer programmers at XXXXXXXXXX.com. The hardware will
have a full time technician and support staff. The hardware will be dedicated to
StreetArtist.com alone eliminating any slowing because of having to serve
Financial DataStreetArtist.com will be a business run in
addition to Joe and Tammy Burns' current employment. We do not expect to leave
our present positions.
The following is a summary of our monthly income and expenses for the year
2000 and beyond. All numbers are gross income.
Monthly IncomeJoe Burns.
Earthweb Salary $XXXX
Tammy Burns, RRT
$XXXX (not counting bonuses/car allowance)
Total Gross Income: $XXXX /month
Monthly ExpendituresMortgage $XXX
Auto Loan $XXX
We have a VISA credit card that is paid to a zero
balance each month
The Loan Breakdown
Total Loan Amount
||Hardware: Server, housing, programming, digital
imagery equipment, Verisign, maintenance. This will cover two years at a
10% discounted price|
||Product: We expect to purchase between 600 and 800
paintings for this amount of money.|
||Advertising: This will cover six months of
advertising in four magazines. The online advertising will be through
Ebay.com and search engines, neither of which charges a fee.|
||Trip to Europe: This trip is booked for June 15,
through July 4, 2000. The trip will have us in Rome, Florence, Venice,
Paris, and London on days we are most likely to find street art
||Import Shipping: UPS quoted $350 for a large box to
be shipped from each of the cities mentioned above to our doorstep. We see
ourselves sending back five shipments, one from each city. That equals
$1750, with $250 allotted for port fees. |
||Merchant Account Fees Buyout: We intend to pay the
buyout amount up front to minimize our monthly costs during the first
months of the business.|
||Shipping and Office Supplies: This money will cover
packing to ship to StreetArtist.com customers as well as holders for the
artwork and miscellaneous office supplies.
None of this money will be paid out as salary. We will use it fully on
start up costs.
||Savings Account Balance|
||Down payment on our house (valued at $XXX,000)|
||Mutual Funds: Fidelity, Kemper, Trow Price, Invesco,
||Fine art etchings and paintings by Rembrandt, Chagall,
Dali, Peter Max, Hazel Soan, and Jeanne Down|
||SEP – Joe Burns|
||1996 Nissan Maxima|
||Leather furniture, pool table, and antique armoire.|
||Computer equipment and armoire|
||Hand-knotted silk rug from Cappadocia, Turkey|
||Appliances (refrigerator, washer/dryer)|
Why You Should Give Us a LoanIt is our opinion that
H------ Bank's main question is, “Why should we give you a loan?” We felt it
would be a good idea to write out what we feel is the answer.
From the beginning of our marriage, Tammy and I have both wanted to be in
business for ourselves. We have worked to keep our credit clean and to be the
people a bank would find trustworthy. We have had many personal loans, each of
which was paid off early.
The money we received from the sale of the HTMLGoodies.com site, we feel, set
us up to be able to start our business. We were able to pay off all school
loans, credit card debts, and personal loans. We have worked hard to make our
living expenses as low as possible while keeping our incomes high.
We have no doubts that StreetArtist.com will be a successful business. From
your point of view though, you need to know that we will be able to pay down our
note if we never sell a piece of art. Let me assure you, we can.
Our combined income easily allows the money to keep up monthly payments on a
business loan. We understand the risk we are taking starting this business. We
also understand the risk you are taking on us.
In it our intention that StreetArtist.com become self sufficient in a year.
We expect to make our first profit within two years. We hope to have your loan
to us paid off within five.
We ask you to take the risk and give us the start up money we require to get
this business up and running correctly. We believe StreetArtist.com will be a
mutually beneficial endeavor for everyone involved.
Joe and Tammy Burns