A NEW IMAGE FOR THE SECONDHAND BUSINESS
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|Loan Status:||Default||Origination Date:||2006-08-28||EricsCC ROI:||-39%|
|Aug 28, 2006||Current|
|Jul 13, 2007||Late|
|Jul 29, 2007||1 month late|
|Aug 29, 2007||2 months late|
|Sep 29, 2007||3 months late|
|Oct 30, 2007||4+ months late|
|Dec 28, 2007||Default|
First, I would like to thank prospective lenders for their time and interest.
[LAST NAME DELETED]?s Land of Secondhand opened in Battle Creek, MI on May 8, 2006 with just over $2,000 in inventory. With just the opening inventory and a cash reserve of slightly less than $3,000 we grossed $3,100 in sales in the three weeks remaining in May, $4,200 in June and just short of $5,400 in July with an average profit margin of 67% over the three months. The business, for lack of a better description, is a ?pawn shop with a twist?. Although we do offer ?Pawn? services, we are making a concentrated effort to dispel and destroy the traditional ?pawn shop? image. Our store is always clean, our displays neatly organized, our merchandise thoroughly cleaned, tested and guaranteed. We are located in a safe, high traffic neighborhood and provide a friendly, family oriented environment for shopping. Our pricing in comparison to our competitors is a ?hands down? winner, in some cases by half. To date, customer response has been overwhelmingly positive and we have already begun to develop a loyal ?regular? customer base.
We have a general manager, also a trustworthy lifelong friend, with more than ten years experience in the business and a tremendous knowledge of tools, home and car audio/video equipment, jewelry, sporting goods and more, plus good skills in inventory maintenance, accounting, sales, purchasing and personnel management. As an added benefit, he is being very flexible in regard to salary until we reach a point of positive cash flow. I am still employed full time with the city of Jackson, MI where I have been employed for 22 years and will retire in less than 3 years. My personal income, plus some side income I have from a small scale lawn and tree service is more than adequate to cover my personal living expenses, thus I have no need or intention of taking any income from the store for several years to come.
A basic outline of our monthly budget is as follows:
Phone and Utilities: $ 390.00 (average)
Payroll and Taxes: $2150.00 (includes sales tax and taxes associated to payroll)
Allowance for reinvestment: $1620.00 (based on a minimum of 30% - Variable)
Repayment of loans: $245.00
Misc. Expense: $200.00 (includes cleaning supplies, pricing materials etc)
Last Months Sales: $5281.91
Projected August Sales: $6602.39 (more if we can substantially increase inventory quickly)
We have proven to ourselves, to put it simply, ?all we have to do to sell it is have it?. We are in the right business at the right time; a soft economy has traditionally been very good for the secondhand business. We have the right people with the right attitude. We are positive that if we can double or triple our inventory, income will increase proportionately with very little increase in expense. We expect to continue seeing excess of 20% growth monthly, at least for the remainder of the first year. Nearly all of the capital obtained will be used to obtain inventory in as immediate a manner as possible. Perhaps we may budget a small amount for advertising, but thus far our location, with a traffic count of about 1600 per hour has done most of the work for us.
If not against prosper policy, I would, of course be willing to offer the whole of the Company?s assets as security. In addition, I have a 457 plan currently valued at around $11,000 which, although I am not allowed to borrow against, I would happily list the lender or his designated agent as beneficiary in the event of my death or incapacitation until the loan is repaid.
Again, I thank you for your time and consideration. I truly believe we are offering a virtually ?no risk? situation with nothing ahead but continued success and prosperity for all concerned.