A BUSINESS PLAN FOR ROXE APPAREL - Essay Example

? A BUSINESS PLAN FOR ROXE APPAREL Executive Summary Roxe Apparel will be a UK based clothing firm and will deal with family clothing, providing clothing solutions for all the family. With an initial investment of ?1,000,000, Roxe Apparel will be able to break even by the second quarter after its launch. These initial costs will be used for rent, recruitment, salaries and start-up expenditures. While serving the whole family, Roxe Apparel will focus more on the younger people aged between 16 and 35, because they are the cream of the clothing market. Introduction The apparel industry in the UK is a very lucrative one. However, it also has many barriers to entry. Nevertheless, there are many opportunities due to a number of possibilities that the fashion subsectror in the industry offers. Starting a business in the industry can be challenging but also highly rewarding. In this regard, it is prudent and worthy to start a clothing company in UK. The following is a business plan for starting a clothing company in the UK. The company will be called Roxe Apparel and will seek to serve the UK market as a medium class apparel company. The market for middle class clothing is very big in the UK, and it will be easier for such a new firm to commence its operations. The firm will concentrate on the younger generations as the main market niche, but will also serve the whole family. Competitor Analysis The environment The clothing industry is a very competitive industry due to the fact that it is affected by some special factors which do not impact other industries (Gwilt and Rissanen, 2011). Popularity is a very important issue in the clothing industry since customers always buy from the clothing companies they are already used to. Unlike other basics needs, clothes are some of the few basic products which people choose carefully where they buy because that also matters. In other words, an individual may choose to buy from a more expensive store if the store is popular, and not to buy the exact same product from a cheaper one if the store is regarded lowly (Shishoo, 2012). This is especially so in the UK clothing market where competition is so tough and there are so many already established clothing firms. At the same time, most UK people are loyal customers, who choose to follow one brand and not to try many different ones. Creating the balance between branding the company as a popular one and giving the customer the best price is always a challenge in the clothing industry, and this is going to be a bigger concern for Roxe because it is a new firm. No clothing firm wants to be regarded as cheap, but at the same time, it is necessary to give the customers the best price. This makes already established firms more popular and entry into the industry very difficult. The main competitors that Roxe Apparel will face include established firms. These businesses already stand firmly on the ground and have a well established rapport with the customers in terms of knowing what the customer wants and expects. They have also been able to relate well with suppliers, which is a very important thing with regard to the fact that it determines how successful a business is going to be in the market. Economies of scale The other competitors are well established and have achieved higher economies of scale, which Roxe Apparel will not be able to reach in its initial months. This will mean that they will be able to compete more strongly in the market. As Briscoe (1971) argues, economies of scale are important for any business in the clothing industry because this is the only way to beat the market challenges. Customer service Most of the competitors rate very lowly in this respect and cannot make their customers happy. This is because most of them are large firms and therefore find it harder to create useful customer service. Large firms are also quite old, which increases the risk that they have not evolved enough to apply the concepts appropriate to the modern business environment (Kotter, 1998). As a result, they are not able to have good customer care. This can be revealed by the numerous customer reviews where many customers complain about the customer attendants in the clothing stores being too formal and boring. This is especially so with regard to the younger customers who will be the focus market niche for Roxe Apparel. Pricing Most of these firms have mastered economies of scale and are able to give their customers better prices. However, as indicated above, in clothing, what mattes the most is not the price but the social value. If Roxe Apparel can be able to create a brand that the customer accepts as worth paying a few more pounds for, this will not be an issue. In the end, this will not be a big threat to Roxe because it can find other ways to make up for this. Product Description Roxe Apparel will be a clothing company offering apparel retailing to the public. The company will sell family clothing, which will mean that the whole family can get their clothing from one outlet, making it a one stop shop for family clothing. It will include teen clothes, men’s clothes, women’s cloths and baby clothes. However, Roxe Apparel will concentrate on the younger generation as its centre of interests because these are the main customers. This will mean that the firm will target people aged between sixteen and thirty-five. Marketing Unique marketing proposition As already mentioned, the clothing industry is very competitive and customers are always difficult to pluck from the already existing competitors. As a result, to get the attention of consumers, it will be necessary to offer them something unique so that they consider leaving the companies they already buy from. This unique selling proposition will include the services of a fashion expert. This will be important because most people are these days finding it harder to buy clothes because of too many choices. On the other hand, many people cannot find a wardrobe manager, so rendering these services will be helpful for most of them. SWOT Analysis for Roxe Apparel Strengths The main strength is the fact that it is a smaller firm, and this will be easier for the firm to have a better way to relate with the customers at a personal level. By doing this, Roxe Apparel will be using its disadvantages to create an advantage. The clothing industry, just as the hospitality industry, is one where the customers expect and demand high quality customer care (Worth, 2007). As a result, being able to give these customers high quality customer service will be a big advantage. Roxe Apparel will hire an in-house wardrobe expert, which will be a good way to improve the customer service by allowing those who may need the services of an expert to get this help at no additional cost. Weaknesses The main weakness for Roxe Apparel will be the fact that it does not have the experience required in the clothing industry. This is with regard to sourcing of products, customer relations and other factors. However, these challenges will be overcome with time and Roxe Apparel will be able to get better. The other weakness is that being a start-up, Roxe Apparel does not have enough funds required to carry out an aggressive marketing campaign. Advertising is necessary for a new firm especially in the clothing industry. Yet, as asserted by Broadberry (2005), this requires a lot of funds which Roxe Apparel does not have. In this regard, Roxe Apparel will have to minimise its adverting, which will limit the growth rate especially at the beginning. Opportunities The main opportunity is that the fashion industry, which is a part of the clothing industry, is changing and people prefer new things (Bye, 2010). Young people are willing to try new companies and even smaller firms in an attempt to see where they can satisfy their fashion appetite. This will offer a good entry point for Roxe Apparel and will also help in creating a market share. Threats The main threat is the fact that there are very powerful competitors who may respond to Roxe Apparel with harshness. If the already existing firms feel threatened, they may end up launching a marketing campaign with the intension of derailing Roxe Apparel, and this would be a big drawback because Roxe Apparel does not have funds to fight back. Financial Projections Budget and financial projections Time Costs Sales Overhead Profits Quarter 1 1,000,000 0 50,000 -1,050,000 Quarter 2 500,000 200,000 50,000 -350,000 Quarter 3 450,000 700,000 50,000 200,000 Quarter 4 500,000 1,000,000 100,000 400,000 Start-up and running costs The start-up costs will include the cost of adverting, office and store renting, recruitment as well as initial payroll. Roxe Apparel will start as a small firm and look for ways to expand. This will reduce the initial cots and allow the firm to use most of its venture capital for expansion. Projected sales Based on market expectations, Roxe Apparel will achieve sales of over half a million pounds every month by the sixth month. This indicator will be expected to grow and the profit will surpass the costs by the sixth month. References Briscoe, L. (1971). The Textile and Clothing Industries of the United Kingdom. Manchester, UK: Manchester University Press. Broadberry, S. (2005). The Productivity Race: British Manufacturing in International Perspective, 1850–1990. Cambridge, UK: Cambridge University Press. Bye, E. (2010). Fashion Design Understanding Fashion. London, UK: Berg. Gwilt, A. and Rissanen, T. (2011). Shaping Sustainable Fashion: Changing the Way We Make and Use Clothes. London, UK: Routledge. Kotter, P. (1998). Leading Change. Boston, MA: Harvard Business Press. Shishoo, R. (2012). The Global Textile and Clothing Industry: Technological Advances and Future Challenges. Cambridge, UK: Woodhead Publishing Limited. Worth, R. (2007). Fashion for the People: A History of Clothing at Marks & Spencer. London, Uk: Berg. Read More