PROPOSAL FOR LOAN CONSIDERATION FOR SMALL PHOTOGRAPHY BUSINESS
By George B Harris III (SID:
830353266)
Owner, Trinity Photography, LLC
April 11, 2011
Business Proposal GBH 11-01.0001
Prepared for John Dillinger Senior Loan Officer, TCF Bank
TABLE OF CONTENTS LIST OF ILLUSTRATIONS SUMMARY INTRODUCTION DISCUSSION o Business Plan o Industry Analysis o Concept Feasibility o Capital Requirements CONCLUSION
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3 4 5 6 6 7 8 11 12
LIST OF ILLUSTRATIONS TABLE TABLE TABLE TABLE
1: 2: 3: 4:
POTENTIAL SITE REVIEW SCHEDULING / BOOKING LOCATION CONSIDERATIONS CAPTIAL USAGE
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8 9 10 11
SUMMARY This report details Trinity Photography’s proposal for small business funding through TCF bank.
Funding secured will be used for
the establishment of Trinity Photography Studios at the 1514 Blake Street location. Expansion of Trinity Photography from a home run business to a standalone studio is critical to its future success.
In order to
ensure the success of Trinity Photography, a standalone studio is needed to provide professionalism and credibility; vital for entrepreneurial success.
This report also
details analysis techniques used to determine if this venture was feasible at this time.
In this section the current
local photography industry was examined to determine trends for success.
In addition,
a comparison of several potential sites and areas of operation is provided. Operational cost for Trinity Photography Studio is approximately $97,068 per year. 4
This cost
includes the cost of the studio space, operating cost and automation.
The majority
of the cost associated with the operation of a photography business will be handled through secondary vendors and service providers to keep direct cost to a minimum. These vendors include Mpix.com, an online photo editing and printing company.
Local
vendors like Michaels Crafts will be used for framing supplies and/or framing services.
As stated above, use of these
services alleviates the need to purchase or rent equipment.
INTRODUCTION Purpose: This proposal presents relevant information 5
for consideration for a small business loan with TCF Bank.
Additionally, it outlines
the current business plan for Trinity Photography, LLC. Scope: This report will detail the business plan of Trinity Photography, LLC.
It will examine
the current competitors in the photography market and provide a feasibility analysis for the expansion of the business.
Finally,
this report will detail the capital requirement for expanding this business from a home business to a standalone studio. Procedure: All information contained in this report was researched and compiled by George B. Harris III and Trinity Photography, LLC.
We have
reviewed current small business loan rates to determine which institution would best fit our needs.
We interviewed fellow 6
photographers and reviewed materials on established photography studios to gain information on the competition.
Finally,
using Internet sources, we were able to calculate the appropriate funds needed to establish and maintain a studio for five years.
DISCUSSION Business Plan: Background:
Trinity Photography was
registered as an LLC with the State of Colorado in September 2009.
The founder is
George B. Harris III, who also functions as owner and operator.
Trinity Photography,
LLC, a Colorado based veteran owned and operated small business provides custom designer photography, portraits and graphic design solutions to the Denver Metropolitan Area.
We ensure customer satisfaction by 7
providing outstanding customer service and integrating their ideas and concepts into our products and presentations. Business Strategy:
Trinity Photography, LLC
has identified suitable space in the Denver Metropolitan Area.
The physical location of
the proposed studio is 1514 Blake Street in the Lower Downtown (LoDo) area.
This
location consists of 2,900 square feet of usable space.
Execution of our business
plan will occur in three phases: • Phase one of the business plan includes acquisition of the office space, construction and design cost. For this phase, all marketing tools (business cards and Website) will remain as is to ensure consumer continuity. • Phase two of our business plans requires a rebranding of Trinity
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Photography.
In order to accomplish
this, we will need to execute a dynamic research and marketing campaign.
This includes identifying
our target and creating a “look and feel” that attracts them.
The final
part of this phase requires outreach to secure and maintain contract work, which will help ensure business continuity. Industry Analysis: Small Business:
Currently, there are
approximately 310 independent photographers in the greater Denver Metropolitan area. Analysis of the competition also includes photographers registered in Denver (City and County), Aurora, Lakewood, Wheat Ridge, Englewood, Commerce City, and Centennial. It was determined that this broader area provides a more accurate assessment of those small businesses in direct competition with Trinity Photography. 9
“Big” Business:
In addition to small
businesses, there are several corporate studios that are in direct competition of Trinity Photography.
They include, but are
not limited to Target Portrait Studios, Sears Portrait Studios, J.C. Penny Studios and other like them.
These studios have the
financial backing to ensure adequate marketing.
Their locations provide them
with a contact influx of people, while their reputation in the sales industry attracts loyal customers.
Concept Feasibility: A.
Location Analysis
Introduction:
This section examines and
compares the cost associated with expanding Trinity Photography from a home business to a standalone studio.
In order for this
venture to be deemed feasible, we must be 10
able to secure space in excess of 25,000 square feet whose price does not exceed $20.00 per square foot.
These figures are
based space requirements for multiple photo stages, office space, reception and storage. Analysis:
In our research, we were able to
find three spaces that fit our basic need. These locations were then reviewed by looking at the cost per square inch, the location and the overall square footage available.
See Table 1.
Table 1 Potential Site Review Location
Square Feet
Cost
per SQ/FT 1514 Blake
2,900 (min)
8216 Northfield
$16.00
3,360
Negotiable 1755 Blake
up to 8,025
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$26.00
Conclusion:
After reviewing the
specification on all three locations and comparing location and price per square foot, it has been determined that 1514 Blake is the best candidate for Trinity Photography Studios. B.
Scheduling & Booking Requirements:
Introduction:
After considering established
a full time studio, it was determined that we would need to employ an assistant / booking agent or an automated system which would allow us to manage appointments with very little hassle.
The requirements were
to employ either a person or an automated system that would cost the least. Additionally, there would need to be a good interaction perceived by the customer. Table 2 Scheduling / Booking Medium
Cost
Hours Employed
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“Friendly” Human Employee week
$9.75/hr.
20 – 25 per
Yes
Automated System
$39.00/mo. Continually
Yes Conclusion: After reviewing both a traditional and automated means of maintaining bookings and schedules, it was determined that the automated system would provide everything we need with a considerably less cost.
After looking at a
three-year period, a human employee would cost approximately $38,050 while the automated system offered through “Schedulicity” would only approximately cost $1404 for the same period.
Additionally,
the automated system could be employed twenty-four hours a day, seven days a week.
C:
Location Considerations: 13
Introduction:
One key part of our strategy
is to be located in a central area with great diversity.
In looking at locations,
we needed to find a location that is an attraction in itself, as the large retail stores like Target are.
Also, we need a
location that attracts customers from all generations, families, students and business people. Analysis:
In searching out sites for
potential studios, we identified the Lower Downtown area and the Northfield areas. Both locations meet all the criteria set forth in the introduction above. Table 3 Location Considerations Location
Attraction Type
Diversity Lower Downtown
Universities / Colleges
Yes
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Nightlife Shopping Restaurants Northfield
Shopping
Yes
Restaurants Conclusion:
Because of the established
criteria of the site requirements, it was determined by Section A, that the Lower Downtown region is best primary due to price.
Because both the Lower Downtown area
and the Northfield area both fulfill the need for a diverse client base, we defaulted the location decision to the cost of space. Fortunately, we gained two extra diversity groups in choosing the Lower Downtown area. In addition, this area is also an historic attraction, a source of nightlife and the location of three major post secondary schools.
With regards to how these various
segments of the community impacts our bottom line; it comes down to the matter convenience to the consumer. 15
By providing
the convenience to their daily lives, we can increase the odds of repeat patronage. Capital Requirements: Trinity Photography is requesting a small business loan totaling $500,000 USD.
As
stated before, funds authorized in this loan will be used as startup capital for Trinity Photography LLC.
Breakdown of how the funds
will be used as follows: TABLE 4 Capital Usage Description Studio Space
Annual Cost
5-Year Cost
$46,000
$230,000 Automated System
$468.
Operating Cost
$50,000
$2,340
$250,000 Incidental Costs
$17,660
Total(s)
$96,968
$500,000
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CONCLUSION: As you can see from this report, Trinity Photography is in a position to make itself a leader in the Denver Metropolitan Area arts community.
Our expanding into a
standalone studio only furthers our vision of providing outstanding art and customer service to our clients.
Securing a location
in the Lower Downtown area to establish and maintain a studio space at a reasonable price is well within scope of this loan.
As
you can see from our research, we have identified these key actions that will help our business remain prosperous after opening.
For additional information on
Trinity Photography, please visit our website at www.TPDenver.com.
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