A Business Plan for: High End Boutique - Term Paper Example

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A Business Plan for: High End Boutique Table of Contents Page No. Executive summary…………………………………………….. 4 The company Product description Market and Competition Marketing and sales strategy Operations strategy Financial prospects Summary The company………………………………………………….. 8 Company history Management Risks Company summary The product……………………………………………………. 10 Product description Patent protection Future products and services Product summary Marketing and sales strategies…………………………………. 11 Marketing strategies Sales and distribution channels Attracting customers Pricing strategy Operations Strategy………………………………………………... 12 Pilot tests Facilities Operations summary Financial Prospects……………………………………………………. 13 Sources of income 2 year plan 4 year plan Financial summary Summary…………………………………………………………….. 17 References…………………………………………………………… 18 Business Plan for ‘High-End Boutique’ for Contemporary and Sophisticated Women Aged 25-40 Years, Living in Vancouver- Canada Executive Summary Business Description Incorporated as a Canadian-based, a sole proprietorship business entity, High End Boutique, will be located at Vancouver city in particular. Its main objective will be to provide a modern, fashionable and unique gown to women. The boutique’s business line will consist of selling own-designed gowns, those from select designers and Miss D. The entity’s target market will be women in the age bracket of 25-40 years, living in the greater Vancouver. Some gowns available will be displayed as samples; customers wishing to try on any will have to book a consultation. The business mission statement will be: “To provide all clients with high quality designer gowns at a fair price. To achieve this goal, I will build and maintain customer loyalty by selling quality gowns and offering efficient services”. The vision statement for High End Boutique will be: “We ensure our clients’ satisfaction through the provision of modern and contemporary gowns that suite their taste”. The values of the business will include being socially responsible, ensuring proper disposal and management of waste and adhering set laws. Product description Gowns will be supplied by selected designers, Miss D and others will also be named by a team highly trained tailors. These gowns from other designers will have different labels but will trade under High End Boutique’s trademark. On arrival to the entity’s stores, all gowns will be fitted with unique bar codes. These contain unique codes that will help a customer identify and differentiate a genuine gown from a counterfeit. On scanning a gown, this unique code should appear on the computers’ monitor and the same information displayed is tracked and stored in the sales system. The sales receipt given to the customer should also bear that code against the item’s description. The software used is user-friendly as what is mostly used is a scanning device that will recognize the code and store it in the computer system. We have filed for the patents, with the technology used forming the basis. The computer system will only store information on prices of the items, the gown’s label, and number of orders per day and printing receipts (Lester, 2007: 178). Market and competition The business’ main targets are women aged between 25 to 40 years. This is a multi-million per year market, in which the top clothing companies sell over 250 billion dollars. The cheap technology used, and growing demand for improved quality of gowns, makes the timing of products to be sold ideal. Customers will also be provided with a catalogue that shows different gown designs and their prices, hence helping them choose a gown that is suitable for them (Agard, 2007: 210). My business location motivates me most, since this city is business oriented. It is North America’s top destination for international meetings; hence these events create new market for my gowns. I identified the existence of a market gap in the fashion industry since many industries here include mining, forest, biotech, film and software (About Vancouver). There is a ready market for my products. Women in the age bracket of 25-40 years are in search of a gown that is modern and contemporary. Being a partial fashion design student, I have learnt modern skills in making clothes, and I am sure that my gowns will stand out as the best. I will come up with the right design of gown they are seeking. The other target market is the boutique’s authorized dealers and outlets. For the unique code to be recognized by the computer, we came up with software that enhances a computer scanner to recognize these codes. These outlets will have to purchase software from us and install them in their computers. This generates income to the ICT department that is extremely vital when it comes to making innovations on the entity’s products (McCahon, 2009: 100). Through this technology, we will phase out the menace of counterfeit gowns, that might be maliciously selling under the business trademark and name in the market. Competitive edge Vital statistics: The system can keep track of sales per unit of each gown by design available in the boutique’s shops and other outlets. It can compile and give accurate information regarding the design that is selling most. Easy to use: This technology can easily be used without any complications. The gown should be passed through a scanner, and the computer will automatically respond by displaying the unique code and updating the system’s records Cheap and affordable: Other businesses purchase this software from us at a subsidized fee that is lower than the price of other software in the market. Patent: As a business, we have a comprehensive patent that protects this simple but superior technology. Sales and marketing strategies It is High End Boutique’s strategy to provide its clients with high quality and unique gowns, while at the same time ensuring that incorporation of technology in the clothing sector is embraced. For the business to enjoy economies of scale, we will ensure that the supply and production of gowns is in large quantities. Computer software will be sold at a subsidized cost, but we will charge a percentage of sales volume on the gowns. We will target key clothing outlets in the city. We will first distribute some gowns and install their system with the High End’s software for the purpose of the pilot test. Pilot shops that serve customers with above-average income levels will be given the first priority. Direct sales method of sales promotion will be used. They will be operate in all selected clothing shops and will assist a customer get the right gown that she wants. They will also demonstrate to the cashiers of the shop on how to use this technology. Operations Strategy Miss D and some other designers have agreed to supply us with their gowns. It is also to the business delight that some significant clothing outlets, have agreed to support us to introduce this technology, and sell High End’s gowns. We have also held meetings with sales and marketing consultants, who have taught us skills to enable us deal with the risk of product failure during introduction stage. We will also continue to write and software and upgrading them, then sending them to retailers. Manufacturing of the metallic chip that contains the unique code will entirely be subcontracted. Financial prospects We estimate that this business will have grown by 10% in four years time. Moreover, we will request these selected clothing shops to share with us price list of those other clothes in their stores, and from this, we will be able to make informed decisions on the pricing strategy. Moreover, we believe that, at the end of the four years, we will begin issuing licenses to other vendors that would like to adopt this technology (Frank Janssen, 2006: 300). Through this, some revenues will also be generated for the business. Once we are through with pilot tests, we expect steady annuity stream of incomes from both sale of software and gowns. Summary Miss D and other leading, select designers have agreed to supply us with their gowns. We have held several meetings with sales and marketing consultants to educate us more. We have protected these ideas by filing a comprehensive patent. We have contacted some clothing shops, and they have agreed to work with us in the pilot test. The technology we have used is not new and we have only modified it to suite the entity’s needs, and it is cheap, accurate, convenient, and user-friendly. The Company Company history High End Boutique is a sole proprietorship business founded to improve the clothing sector, while at the same time offering affordable prices. We will use new application of proven technology, and up to this point in time, we have filed a patent, and the boutique’s contact with some clothing shops has been a success. We have also hired consultants to offer us advice during this product introduction stage and pilot testing. It is during this pilot testing that we will identify potential challenges and correct them before introducing these gowns fully into the market. We will also set up a sales force to assist customers in their gown selection and also demonstrate the use of software at the point of sales. Management The president is the sole owner of the business and will be in charge of developing the entity’s competitive strategy. He will be responsible over day-to-day operations of the business and will also make key decisions concerning financing and meeting entity’s cash flow needs. Moreover, he will negotiate for solicitation of funds and will serve as a vital contact between the entity and its financial backers (Frank Janssen, 2006: 298). The marketing manager will be in charge of the entity’s public relations and marketing. He will identify potential customers and help maintain the existing ones. He will also consult external designers to ensure they come up with designs that suite customer tastes. He will work hard towards ensuring that the entity’s positive public image is maintained and training of hired sales people. The chief engineer will be in charge software development. He will be responsible for retrieval and analysis of the sales data from the system. He will also be responsible for recruitment and training of software developers. Finally, he will negotiate for subcontract for the supply of the metallic chips. Ownership This business entity is a sole proprietorship, hence solely owned by the president. There are no outside shareholders. Employees and staffing In each department, there will be someone in charge of hiring employees, who will later be approved by the president. This person will also head the department and will report directly to the president. We will subcontract all work, until the software and gowns are fully introduced into the market. Risks Competition from other technologies poses as a great threat to us. It is until completion of the pilot test, that we can analyze people’s shopping habits, and their reactions from using the business catalogue to picking the desired gown. Another risk is that of duplicating the boutique’s designs and the technology used. We will hire a lawyer who will try and patent all aspects of the entity’s innovations. This will ensure that any entity competing in the same business will have to obtain a license from us (Barrow, 2011: 298). Company summary This is a sole proprietorship business and has three key departments which are product ion, marketing and IT. A significant progress has been noted as we have filed a patent and established contact with some large clothing outlets in the city. The Product Product description There are two products of concern which are the software developed and gowns. However, sale of gowns is the key business; while software developed will be used in ensuring quality gowns and efficient services are offered. All gowns under High End’s trademark will be fitted with the metallic chip that contains a unique code on the helm. The installed software will enable a scanner detect the metallic chip, read the code and send signals to the computer’s system for data storage. Gowns will also be of different colors, designs and prices. Patent protection We have filed U.S patents to ensure that no competing business uses this technology. Further, companies wishing to use these clothing designs and trade under the entity’s trademark will have to apply for license from us at a fee. Codes in the metallic chips will only be machine readable, hence making it for someone to make an imitation out of it. Future products and services After the introduction of these gowns in the market, we will continue with product innovation so as to ensure that we keep up to the market demands. We will work hand in hand with hired IT specialists, so as to come up with a website from where customers can make enquiries and also make orders. We will also work on a program that can assist a customer design her gown; send those specifications to the production team, who will later work on the gown. Product summary The point of sale software will be patented, while at the same time, making it illegal for competing businesses to duplicate these gown designs. Special codes will enable the customer be sure that the product she is acquiring is truly from the business factory (Lesonsky, 2007: 150). Marketing and Sales Strategies Marketing strategies Most shops will want this system installed for them to use, so it will be done by High End’s IT specialists at no cost. Brochures will also be produced and distributed to people, while catalogues will only be available in only selected stores and from the entity’s website. Sales and distribution channels External suppliers will be paid immediately their gowns reach the boutique’s premises. The total number of gowns and their specifications will be recorded, and then dispatched to various stores in the city (Lesonsky, 2007: 159). Once these stores sell all gowns, they are paid a commission at an agreed percentage rate. The only distribution channel will be from the store, and then to the selected shop, who dispatch the product to potential customers. Moreover, customers can make direct purchases from retail shops available at the business factory. Attracting customers Considerate discounts will be given to customers who purchase more than two gowns. Customers can also book an appointment so as to try on a gown before purchasing it. Customer sendoff is also extremely vital as it will determine whether that customer will make a repeat purchase or not (Tucker, 2010: 215). We will train sales people on how to deal appropriately with the customers. The entity’s main target are women; therefore, it is essential that appropriate packaging is used, as women like being tidy. Pricing strategy A certain margin will be charged on each gown so as to ensure profitability and also keep prices as low as possible. Elimination of a large channel of distribution helps realization of this goal. Operations Strategy Pilot tests We have already made 50 and ordered another 50 gowns for this purpose. They will be supplied to one of the stores in the city for sampling and probably selling. The store’s sales system will be upgraded to accommodate this new software, and then educate people on how it functions. We will then ask customers to send their feedback on products, direct to business’ website. This pilot is estimated to take approximately one month (Hall, 2007: 175). Facilities Since this is the startup period, we will rent two rooms, where one will be for the purpose of making gowns, while the other one will be the office and will accommodate all departments under one roof. As the business grows and expands, we will move to a bigger and spacious office than the one we will be using. We will also require another room that will serve the purpose of a retail outlet. Operations summary Pilot tests will be conducted before assuming full operations so as to determine the product performance. A building of at least three rooms will be vital in carrying out activities during this time. Financial Prospects Sources of income Personal savings will be the main source of capital. On the inception of the business, it is expected that the sale of gowns will be a crucial income generating activity. Revenue generated from the sale of software will be remarkably little since customers will only acquire it once; however, this source of income should not be underestimated (Reading, 2006: 150). 2 year plan INCOME STATEMENT 1st half 2nd half 3rd half 4th half Revenues High End retail shops 1 1 3 3 Selected retail stores 3 5 7 7 Cumulative retail stores 4 6 10 10 Software revenues 5,000 7,500 9,000 9,000 Gowns revenue 20,000 35,000 50,000 70,000 Total revenues 25,000 42,500 59,000 79,000 Costs: Salaries and wages 9,000 9,000 9,000 10,000 Commissions 0 300 700 1,500 Consultation fees 500 0 0 0 Rent 1,000 1,000 1,000 1,000 Telephone expenses 100 150 300 300 Suppliers’ fee 1,000 0 3,000 4,500 Promotional materials 500 500 300 300 Legal fee 100 0 0 0 Travelling allowances 200 50 0 0 Total costs 12,400 11,000 14,300 17,600 Profit before tax 12,600 31,500 44,700 61,400 Tax at 30% 3,780 9,450 13,410 18,420 Profit after tax 8,820 22,050 31,290 42,980 Capital expenditures: Computer equipment 5,000 5,000 10,000 10,000 Furniture and fittings 1,500 2,000 2,000 2,000 Total capital expenditure 6,500 7,000 12,000 12,000 Cash Flow Statement Starting cash 200,000 185,180 156,630 113,830 Less profit after tax (8,820) (22,050) (31,290) (42,980) Add back depreciation 500 500 500 500 Less capital expenditure (6,500) (7000) (12,000) (12,000) Ending cash 185,180 156,630 113,830 59,360 Balance Sheet Current Assets: Cash 185,180 156,630 113,830 59,360 Stock 2,000 5,000 10,000 10,000 Long-term Assets Furniture and fittings 1,500 2,000 2,000 2,000 Computer equipment 5,000 5,000 10,000 10,000 Less accumulated depreciation 500 500 500 500 Total assets 193,180 168,130 135,330 80,860 Liabilities Short term debt 50,000 30,000 10,000 10,000 Long term debt 0 0 0 0 Retained earnings 143,180 138,130 125,330 70,860 Total liabilities 193,180 168,130 135,330 70,860 3rd and 4th year plan INCOME STATEMENT 3rd year 4th year Revenues High End retail shops 3 3 Selected retail stores 10 10 Cumulative retail stores 13 13 Software revenues 15,000 15,000 Gowns revenue 150,000 200,000 Total revenues 165,000 215,000 Costs: Salaries and wages 15,000 15,000 Commissions 2,000 2,500 Consultation fees 0 0 Rent 3,000 3,000 Telephone expenses 300 320 Suppliers’ fee 4,500 5,000 Promotional materials 200 200 Legal fee 0 0 Travelling allowances 0 0 Total costs 25,000 26,020 Profit before tax 140,000 188,980 Profit after tax (30%) 98,000 132,286 Capital expenditures: Computer equipment 0 0 Furniture and fittings 0 0 Total capital expenditure 0 0 Cash Flow Statement Starting cash 350,000 252,000 Less profit after tax (98,000) (132,286) Add back depreciation 500 500 Less capital expenditure 0 0 Ending cash 252,500 120,214 Balance Sheet Current Assets: Cash 252,500 120,214 Long-term Assets Furniture and fittings 0 0 Computer equipment 0 0 Less accumulated depreciation 0 0 Total assets 252,500 120,214 Liabilities Short term debt 52,000 20,000 Long term debt 0 0 Retained earnings 200,500 100,214 Total liabilities 252,500 120,214 Summary It can be noted that technology can be incorporated in the clothing sector for any company to ensure that only original clothes are available in clothing stores. High End Boutique will highly benefit from this technology. Customers will also buy gowns that they intended to and also keep their loyalty due to the best quality of the gowns sold to them. Different gown designs can also be invented, as a result of technological innovations, hence customer satisfaction. Stiff competition is expected from competitors; therefore we will be required to carry out intensive marketing. To generate more income, we will issue licenses to those wishing to use of the entity’s gown designs at a fee. References Agard, C. 2007. Getting the Real out of Starting a Business. London: Adelphi Publishing and Media Group. Barrow, C. 2011. Starting a Business from Home. London: Kogan Page Limited. Frank, J.2006. ‘Do Managers’ Characteristics Influence the Employment Growth of SMEs? Journal of Small Business and Entrepreneur. 19 (3) 293-318. Hall, R.E. 2007. Starting a Small Business.USA: Infinity Publishing Company. Lesonsky, R. 2007. Start Your Own Business.USA: McGraw-Hill. Lester, D. 2007. Starting Your Own Business. New York: Crimson Publishing Limited. McCahon, C. K. 2009. Plan, Finance and Start Your Business Right Now, 1st ed. USA: McCahon Publications. Morris, M. 2011. Starting a Successful Business. London: Kogan Page Limited. Reading, C. 2006. Strategic Business Planning: A Dynamic System for Improving Performance and Competitive Advantage. London: Kogan Page Limited. Tucker, P. M. 2010. What You Should Know Before Starting a Business. Bloomington: Author House. Read More