SMARTLY

SAMPLE BUSINESS PLAN

S’NAPS

Aurora Rose, CEO

123 Airport Road
Smartly Town, Smartlandia 23456
[email protected]
709-555-0235

©2017 Pedago, LLC. All rights reserved.

SAMPLE BUSINESS PLAN SMARTLY

S’NAPS, LLC

Table of Contents

Executive summary………….………………………………….1
Company description…………….…………………………..3
Management summary……………………….……………..4
Industry background………………………………………….6
Competitive analysis…………………………..…………7
Market analysis…………………………………..…………8
Marketing plan………………………………………………….. 9
Operations plan………………………………………………..10
Financial plan……………………………………………..….….11
Appendix……………………………………………..……………13

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S’NAPS, LLC

Executive Summary

THE S’NAPS SOLUTION Note: The information included

in an executive summary varies
After a long, cramped international flight, travelers are often stuck widely from plan to plan. Think
on a 3+ hour layover with nowhere to rest but uncomfortable about what will most interest
airport chairs. S’Naps’ mission is to provide these travelers with a your audience.
classy, comfortable, and convenient place to rest while they await
For example, this summary
their connecting flight. We will be the only company to offer short- leaves out operations and
term bed rentals in Smartlandia Airport’s international terminal. marketing details to make room
for additional information about
MANAGEMENT the market and competition.
S’Naps is an LLC founded by Aurora Rose, an internationally
renowned travel sleep therapist and sought-after expert speaker.
The management team previously worked together at industry
leader Sleep Right. Investor Stefan Fryer, former CEO of airport
food chain Frequent Fryers, advises the team.

MARKET
Our market research indicates that 90% of international business
travelers feel tired during their layovers, and 65% of those would
be willing to pay for a safe and comfortable place to rest on
layovers over 3 hours. 2 million business travelers have layovers
of this length in the Smartlandia International Airport each year.

COMPETITION
S’Naps has significant advantages over competitors:

• Airport hotels: S’Naps is cheaper, easier to access, and

offers more flexible rental options than airport hotels, which
require that users stay for an entire night.
• Airline lounges: Some airlines offer lounges or clubs for
frequent fliers, but these are only accessible to 3% of
passengers. The lounges in Smartlandia International
Airport do not offer beds.
• Substitute goods: Travelers spend an average of $26 per
layover on substitute goods such as coffee shops and
restaurants, though these solutions are more temporary
and less satisfying than the one S’Naps provides.

Though there is potential for other businesses to copy the model

when it proves successful, S’Naps has the ability to continue to
offer the service at a lower cost due to its proprietary QuickSwitch
technology, which automates linen changing and significantly
reduces labor expenses.
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S’NAPS, LLC — EXECUTIVE SUMMARY CONTINUED

FINANCIAL SUMMARY
By year three, we expect to capture 3.27% of the potential market,
or 65,400 of the 2 million business travelers with 3+ hour layovers
who travel through Smartlandia International Airport each year.
We project revenues of nearly $4.2 million by year three, with a
net margin of 48%.

CAPITAL REQUIREMENTS
S’Naps seeks to raise $170,500, in addition to $139,500 already
provided by early investors, to fund startup costs and the first six
months of operation.

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S’NAPS, LLC

Company Description

S’Naps is the first company dedicated to offering short-term bed Remember: The company
rentals to airport travelers. With its soothing private rooms and description can also be titled
easy-access location in an international terminal, we provide air the business description.
travelers with a clean, quiet place to nap on their layovers.
S’Naps isn’t just cheaper than a hotel—it’s quicker, more
comfortable, and more convenient.
Air travelers are both a captive market and an unusually sleep-
deprived group. With millions of passengers facing 3+ hour
layovers every day, S’Naps can grow quickly—after our first three
years in operation, we plan to expand at a rate of two stores per
year, first to major airports in the region, and then nationally.
Several key partners will help accelerate our growth. The
Smartlandia International Airport Terminal Authority is providing a
40% reduction in rent due to the high value of the S’Naps service
for airport customers. Our partnership with Sleep Right includes
both an exclusive product line and a referral program for Sleep
Right clients.
Most importantly, our partnership with QuickSwitch Inc, provides
us an exclusive license to the QuickSwitch linen technology, which
changes sheets automatically giving us a significant advantage
over any competition that arises.

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S’NAPS, LLC

Management Summary

ORGANIZATIONAL STRUCTURE & MANAGEMENT

S’Naps is a small LLC with a flat management structure. We
believe that great customer service begins with treating your
employees with respect and giving them the freedom to solve
problems quickly and creatively.
THE TEAM

• CEO Aurora Rose earned her PhD in sleep studies at

Harvard. She then joined Sleep Right, a sleep therapy firm.
While there, she advised CEOs from 5 different Fortune
500 companies on overcoming jet lag. Aurora developed a
reputation as a travel sleep specialist and has given
hundreds of seminars on how to sleep well while traveling.
She believes deeply in the S’Naps mission and has
committed 20% of the start-up funds for the project.
• CFO Flora Jones earned her MBA from the Pedagovian
School of Business and worked as a Project Manager and
General Manager at investing firm Silverman Bags. Most
recently, she served as Vice President of Finance at Sleep
Right, where she streamlined the accounting department
and improved the accuracy of financial projections by 22%.
• COO Fauna Rodrick earned her MBA from the Pedagovian
School of Business and served as CPO at Sleep Right for
six years. She headed three of the company’s most
successful services, including Aurora’s popular book and
seminar tour. She has a reputation throughout the industry
as a resourceful, thoughtful, and committed leader.
• Advisory Board Chair Stefan Fryer served as CEO of the
airport fast food chain Frequent Fryers for nine years, and
he recently founded his own venture capital firm. Stefan has
served as a mentor to the S’Naps team on leadership,
marketing, and the airport hospitality industry. He has
committed 25% of the start-up funds required for S’Naps.
Tip: An advisory board helps fill
• Additional Advisory Board Members: Dana Dryer, airport skill gaps and provides
real estate specialist; Kaiona Shawp, retail legal expert; and additional expertise for your
Bill Banks, accountant. team.

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S’NAPS, LLC — MANAGEMENT SUMMARY CONTINUED

TEAM HISTORY
Aurora, Flora, and Fauna have a history of successfully launching
new programs together. The team first partnered at Sleep Right,
where they created the Jet Lag Seminar Program; it went on to
become one of the most profitable programs at Sleep Right. This
line of seminars spawned several other subsidiary products,
including a travel sleep book and seminars on other topics.

SKILL GAPS
• Accounting: Our CFO has extensive experience in finance,
but is not a certified CPA. We have hired the accounting
firm Banks & Buck for our bookkeeping and financial
reporting.
• Legal expertise: To help S’Naps navigate the regulations
that affect our business, we are working with the legal firm
Liddy, Gaydor, & Moore.

PERSONNEL PLAN Remember: Personnel plans are

optional, but they are useful
See the personnel plan below for additional information on how pieces of information for
the staff will grow over the next three years. readers and potential investors.

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S’NAPS, LLC

Industry Background

AIRPORT HOSPITALITY INDUSTRY

The airport hospitality industry includes a variety of offerings,
ranging from restaurants, to massage chair rentals, to airport-
adjacent hotels. Industry sales totaled $1.2 billion last year.
Though the products vary, the industry is tied together by the fact
that it serves a unique captive market and is heavily influenced by
the air travel industry.

INDUSTRY OUTLOOK
The travel industry has a steady growth rate of 5%, but the airport
hospitality industry has grown significantly faster than that in
recent years. In 1991, 30% of airport revenue came from hospitality
and retail sales while 70% came from travel-related revenue such
as hangar fees. Now, that number is almost reversed: 60% comes
from retail & hospitality and 40% from travel-related revenue.

COMPETITION
Helpful questions to consider
In general, the industry is highly competitive. It is dominated by when researching competition:
national hotel and restaurant chains, with relatively few small or How likely are competitors to
copy your business model? Is
local businesses participating. the industry known for poaching
talent from competing firms?
There are, however, very few high quality, in-terminal sleeping How aggressive are leading
options. Though some airlines offer exclusive lounges with firms in acquiring smaller
sleeping quarters, these are available in only 5% of airports, and competitors? Are leading firms
only 3% of customers have access to them. Smartlandia able—or likely to—offer services
International Airport does not provide this accommodation. at a loss to turn a new
competitor out of business?
BARRIERS TO ENTRY
There are three main barriers to entry to this industry.

1. The high cost of space: rental costs in airports are typically

5 times higher than the national average. (Though S’Naps
has a special partnership with the Smartlandia International
Airport Terminal Authority to reduce these costs by 40%.)
2. The higher level of regulation faced by businesses in
airports: increased security and employee screenings can
slow the initial start-up phase. Permits required at a cost of
up to $5,000.
3. Airport labor unions increase the cost of labor; the minimum
wage in the Smartlandia International Airport is $15/hour.

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S’NAPS, LLC

Competitive Analysis

Industry competition for S’Naps comes in several forms, but it is

worth noting that none of these competitors offer the same
product as S’Naps. Our two main competitors are noted below:

1. Smartlandia Airport Marriott Hotel

A five-minute shuttle ride from the international terminal at
Smartlandia International Airport, the Marriott provides overnight
accommodations for $150-$250 per night. This hotel is most likely
to compete with S’Naps for customers who have a delayed or
canceled flight and face an unexpected overnight layover.
While the Marriott offers more spacious accommodations, its strict
check-in and check-out times, higher cost, and location outside of
the terminal make it unable to compete with S’Naps for customers
who have shorter layovers or more limited budgets.

2. Queequeg’s Coffee
Queequegs offers a substitute good for tired travelers with shorter
layovers: caffeine. In particular, its popular triple-shot espresso
drink is currently purchased by 1 out of every 10 travelers in the
international terminal.
Though Queequeg’s is a cheaper and faster alternative to a nap at
S’Naps, it is a short-term solution that is inappropriate for travelers
with layovers longer than three hours. Our market research
indicates that travelers currently choose it only because sleep is
not an option. The majority of business travelers surveyed said
that if it were possible to sleep comfortably during their longer
layovers, they would prefer to do so and would be willing to pay
significantly more for that option.

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S’NAPS, LLC

Market Analysis

MARKET SIZE
50 million people fly through Smartlandia International Airport
each year. Of these, 8 million are international business travelers,
and 2 million of those have a 3+ hour layover.

TARGET MARKET Note: Many products have more

than one target market, so the
Our target market is international business travelers aged 30 and market analysis section often
above with a three-hour (or longer) layover. describes how a market has
been segmented. In addition, it
S’Naps chose this target market because people in this group fly should explain how the wants
frequently, often have extended layovers, are more likely to be and needs of each target
tired on layovers due to the longer length of their flights, and have market might differ, and how to
disposable income and/or expense accounts to spend on a appeal to each market segment.
service like S’Naps.
The critical needs of this group include:

• Quality rest: Business travelers are often expected to

attend meetings or complete work shortly after—or even
during—travel. To do so, they must be well rested and alert.
• Convenience: This market is often pressed for time, so
having a location directly in the international terminal—as
opposed to a hotel that they must leave the airport for—is
crucial.
• Comfort: This market is accustomed to first-rate
accommodations. The private, high-quality beds that
S’Naps offers will address that need, unlike other airport
seating or rest areas.

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S’NAPS, LLC

Marketing Plan

UNIQUE SELLING PROPOSITION

Traveler’s can rest easy with a nap at S’Naps—get sleep where
you need it, when you need it, with none of the hotel hassles.

PRICING & POSITIONING STRATEGY

Positioning statement: S’Naps is a classy, comfortable, and
convenient resting spot for travelers.
General pricing structure: S’Naps charges $28 for a 30-minute
nap and $46 for a one-hour nap. Each additional hour after the
first is $40. The price of a nap is comparable to the cost of a meal
at a sit-down airport restaurant, and significantly less expensive
than renting a room at an airport-adjacent hotel.
S’Naps also offers a boutique line of sleep aids, including scented
sleep masks ($6), pajama rentals ($8), sleep kits with melatonin,
chamomile tea, and lavender salts ($12), and freshen-up packages
with toothbrushes, moisturizer, towelettes, and hair products ($15).
Loyalty program: Customers enrolled in the loyalty program will
receive every 8th nap free, or an average rate of $24.90/nap.

DISTRIBUTION & SALES Note: In the marketing plan,

distribution is often described in
Payment processing: S’Naps will accept cash and all major credit terms of what kind of stores the
cards using the Polka Dot payment processing system. product will be placed in. The
operations plan usually has
Online booking: S’Naps will allow customers to reserve a bed and more logistical details, like
update reservations online at snaps.com. shipping, etc.

PROMOTIONAL STRATEGY
Our promotional strategy focuses on airport terminal billboards
and digital marketing.
Our airport billboard campaign will rent 9 billboards in the
international terminal at Smartlandia International Airport, an ideal
location for reaching our target market.
Our digital marketing will mainly focus on geofenced mobile ads
targeted at mobile devices currently located in the international
terminal at Smartlandia International Airport.
Additionally, we aim to raise further awareness and positive press
through sponsoring charity events such as the annual Sleep
Apnea Foundation Ball.

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S’NAPS, LLC

Operations Plan

LOCATION Note: This plan doesn’t have a

section on manufacturing and
S’Naps will be located in a high traffic zone in the international distribution because it is not
terminal of the Smartlandia International Airport. More than 20,000 relevant to the business. A
people will pass by the S’Naps storefront each day, and 30% of business that does manufacture
those are business travelers with a layover of 3 hours or longer. a product would need to include
details on their manufacturing
and distribution processes here.

INVENTORY & SUPPLIES

S’Naps offers customers a boutique line of sleep aids, ranging
from lavender-scented eye masks to eucalyptus candies. These
will be purchased at a significant discount from Sleep Right.
Our self-changing beds will be manufactured through an exclusive
licensing partnership with QuickSwitch, Inc.

EMPLOYEES
Because the QuickSwitch technology will change bed linens
automatically between customers, the S’Naps staff will be minimal
and initially staffed with one storefront employee. We will recruit
these employees through a partnership with local recruiting firm
HireHappy.
Both our CFO and COO graduated from the Pedagovian School of
Business. They have a strong relationship with the school and, as
we expand, will recruit additional managers from there.

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S’NAPS, LLC

Financial Plan

CAPITAL REQUIREMENTS Note: The amount of detail in

your final financial plan will vary
S’Naps seeks to raise $170,500 in addition to $139,500 provided depending on your audience.
by early investors. The funds already raised will provide the beds This is a simplified financial
(equipped with QuickSwitch automatic sheet changing system), plan; keep in mind that some
necessary renovations, website development, and initial audiences will want to see more
detailed explanations of your
equipment for S’Naps. calculations.
The additional capital requested will be spent in the following
manner:

• Marketing and the grand opening;

• Funding for the first six months of operation, including
salaries and the lease.

ASSUMPTIONS
Our financial projections assume that S’Naps will be in operation
for only 4 months of 2017. We estimate that we will capture 1% of
our target market (international business travelers with 3+ hour
layovers) during 2017, and then increase that to 3% in 2018. We
based our revenue calculations on an average transaction size of
$64. Our fixed operating costs will be $10,000 per month in rent
and utilities and $5,000 per month in marketing expenses.

SUMMARY FINANCIAL PROJECTIONS

Our final plan projects positive net income beginning in our
second year, with a net margin of 48% by 2019.

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S’NAPS, LLC — FINANCIAL PLAN CONTINUED

BREAK-EVEN ANALYSIS
Though S’Naps will operate at a loss in 2017, we expect to reach
positive revenue in 2018. In order to break even beginning in
2018, we will need to sell 10,071 sleep packages annually with an
average value of $64.
At 100 square feet per bedroom and a rent of $60 per square foot
annually, S’Naps has room in our budget for 16 beds, plus
storefront space. Assuming 12 operating hours each day and a
360-day year, S’Naps will need to maintain an average bed
occupancy rate of 14.6% to reach this break-even point.

ROI ANALYSIS
We estimate an 18% return with likely possible returns ranging
from 8% to 28%.

EXIT STRATEGY
In year 5, S’Naps hopes to sell its operation to a large day spa
chain or similar enterprise.

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S'NAPS, LLC

Appendix: Financial Statements

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S’NAPS, LLC — APPENDIX: FINANCIAL STATEMENTS CONTINUED

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