Business Plan
Neodress Boutique Shop……….
1.0 Executive Summary
Neodress Boutique Shop is a new apparelstore that caters to the Bangladeshi people. Asour name suggests our focus is to provide customized wear apparel andaccessories, and position ourselves as the top retail store servicing thisparticular market.
Ourintentions are to obtain market share and become a central hub of shoppingactivity for the local population as well as Non resident Bangladeshis (NRBs)who enjoy wearing fashionable apparel.
Neodress Boutique Shop will be located atSubid Bazar. Neodress Boutique Shop has centralized itself directly inposition to the residential location and social activities of our targetmarket. We believe that this is critical to our initial success and long-termgrowth.
Highlights
1.1 Objectives
1.To create a shopping environment that caters to theapparel needs of the local people as well as NRBs.
2.To receive a 50% profit margin within the first year.
3.Tohave a customer base of 1,000 by the end of the first operating year.
4.To create employment opportunity.
5.To conserve and uphold culture and valuesby providing domestic products to NRBs.
6.To generatescope for enhancement for related industries like those who provide the rawmaterial.
1.2 Mission
NeodressBoutique Shop’smission is to offer quality, name brand accessories and clothing in anassortment of sizes and styles to accommodate varying styles and shapes.
1.3 Keys to Success
In orderto succeed in the boutique industry Neodress Boutique Shop must:
- Provide customers with top notch personalized customer service in an atmosphere of Bengali hospitality.
- Carry an assortment of sizes to fit the more ample frames of their target customer base.
- Advertise and promote in areas that target customer base will learn about the store.
- Continuously review sales and adjust inventory levels accordingly.
NeodressBoutique Shopis organized as a partnership among the seven partners of Deepankar Lal Das,Abdullah Al Monsur, Shahin Miah, Marzia Moni, Maksuda Bagum, Munim Ahmed andTahsina Haque Simu.
We will belocated at Subid Bazar, Sylhet being the epi-center of the Sylheti community.
The hoursof operation will be Saturday - Thursday 9 a.m. - 9 p.m. and Friday 10 a.m. - 12 p.m. There will be extended special hours designatedduring The Festivals like Eid-Ul-Fitr and Eid-Ul-Azha, and New Year.
Allmerchandise will be purchased according to the company's mission and customerfocus of outfitting all sizes.
Neodress Boutique Shop is organized as apartnership among the seven partners of Tahsina Haque Simu, Deepankar Lal Das,Abdullah Al Monsur, Shahin Miah, Marzia Moni, Maksuda Bagum, and Munim Ahmed.Everyone will handle the administrative and managerial duties on rotation.
2.2 Start-up Summary
Neodress Boutique Shop’s incorporationcosts are listed below. The company will start with three months inventory onhand for apparel and accessories as this is the main revenue generator. Themajority of the company's assets will reside in inventory. The opening dayscash on hand balance will be $384.
The financing will include an ownersinvestment of $5,100.
Start-up
Start-up
| ||
Requirements
| ||
Start-up Expenses
| ||
Trade License
|
Tk.1, 000
| |
Grand Opening Event
|
Tk.10,000
| |
Telephone & Utilities (3 months)
|
Tk.1,500
| |
Infrastructure Development
Store Fixtures/ Decorations
Factory
|
Tk.150,000
Tk 20,000
| |
Staffing and Recruitment
|
Tk.20,000
| |
Advertising & Promotion
|
Tk.15,000
| |
Raw material collection
|
Tk.70,000
| |
Purchase of Machinery
|
Tk.90,000
| |
Installation Cost
|
Tk.10,000
| |
Business/Office Supplies/Stationary
|
Tk. 1,000
| |
Accessories (Dices, Frames)
|
Tk.10,000
| |
Total Start-up Expenses
| Tk.398,500 | |
| ||
Balance Sheet
Assets
|
Amount
|
Liabilities
|
Amount
| ||
Machinery
|
100,000
|
Capital
|
386,000
| ||
Less: Depreciation
|
19,000
|
Add: Net Profit
|
195,200
| ||
81,000
|
Net Worth
|
581,200
| |||
Cash
|
393,000
|
Creditor
|
150,000
| ||
Accounts Receivable
|
157,200
| ||||
Inventory
|
100,000
| ||||
Total
|
731,200
|
731,200
|
Neodress Boutique Shop will be located atSubid Bazar in Sylhet. This space has 1,200 square feet and has been rented fortwo years. This location is central to the geographical location for thesylheti community. We feel it is essential to our initial and ongoing successthat we locate ourselves in the heartbeat of the community. We also strive tocreate an atmosphere of acceptance and community, as well as a retailenvironment where individuals can identify and bond with their culture.
Allbusiness deliveries will be handled through the showroom. The factory is nearbythe showroom so no extra transportation cost will be needed to bring theproducts from the Factory to showroom.
Neodress Boutique Shop will carrytraditional wear brands. The greatest percentage of merchandise will be inapparel, followed by accessories, and gifts.
Managementwill rely on customer feedback, suggestions, and sales reports to introduce oreliminate certain brands, styles and sizes.
Saree
|
Salwar Kameez
|
Kids' Item
|
Bed cover
|
Cushion cover
|
Curtain
|
Others
|
3.1 Competitive Comparison
NeodressBoutique Shophas a number of advantages that will allow us to build our brand identity, addvalue to our merchandise and build a loyal customer base while standing apartfrom our competitors.
1.The'Neodress Shopper Card' will entitle customers to a 15% discount after tenpurchases.
2.Wewill offer clothing to fit plus size for all.
3.Wewill create a sense of culture and bonding with the community by offeringproducts that combine both the culture and innovation.
4.Ourlocation is central to our target customer base.
5.Wewill maintain a detailed record on each customer, logging addresses, theirpurchases, size, and brand for customer follow-up and in-house promotionalpurposes.
3.2 CommercialViability
1.The plan is asound one because it will create employment opportunities as well as providingscope for related industries.
2.There is a hugedemand for clothing, as these items reflect one’s personality and status.
3.The plan isacceptable as there will be no environmental degradation.
4.The investment cost is comparatively lower.
5.The employeesrequired for the project are few in number and available.
6.As theinvestment is lower the risk associated with the plan is also low.
NeodressBoutique Shopwill use a targeted advertising and sales program to generate publicity andbuild a customer base.
1.500 full-colorpostcard flyers with a 10% coupon will be distributed throughout Sylhet twoweeks prior to the grand opening event.
2.100 grand openinginvites will be mailed to potential new customers two weeks before the grandopening in June, 2008. The invitation will also include a promotional 10%coupon off a customer's first purchase. The customer mailing list has beencompiled from contacts the owners have made while in the community.
We willshop for our merchandise as outlined below:
1.Withrenowned fashion houses like Aarong who have regional representative andshowroom located at the Center, we will place our weekly and monthly reorderswith them and review new materials.
2.September 2008 is the Eid-Ul-Fitr, thelargest festival for Bengali people and apparel featuring the latestcollections of all brands will be presented. All orders will be placed bearingEid in mind.
Wewill also work to solidify our relationships with sales representatives andvendors so that we may achieve decreased cost of goods. Our competitors, (bothdirect and indirect) purchase from the same sources and we believe that throughmarketing programs and strategic alliances we will begin to gain a competitiveadvantage.
Retailapparel establishments have a tendency to have a high number of SKU's becauseof the level of inventory. It is imperative that an advanced inventory andpoint of sales program be utilized to maintain stock levels and track sales.
Ourbusiness plan will be generated and reviewed on a bi-annual basis and reviewedquarterly to ensure all financial goals and objectives are being reached. Itwill allow us to make the most of our limited marketing budget by focusing ourcommunications on our target markets and enhancing our marketing knowledge.
As weachieve and exceed our sales and profitability goals, Neodress Boutique Shopwill add other products to the product line and our own personal in-house labelof clothing that will include Neodresst-shirts for women and shirts for men. Wewill expand our line of brands with those that have been repeatedly requestedby our customers. An e-commerce website will also be created to increase ourdistribution channels and expand our customer base to a national level.
4.0 Market Analysis Summary
Theprimary target customer of Neodress Boutique Shop will be the localpeople in the Sylhet region. As we are situated in the epi-center of theresidential community we believe they will make up the largest percentage ofour customer base.
Thesecondary target customers are the NRBS. As the Nonresident populationcontinues to grow rapidly in various parts of the world we expect to receivethe patronage of them as they are very loyal to Bengali apparel.
Thelast target customer of Neodress Boutique Shop is listed as other. Aspopularity about the store increases we expect to see an assortment ofcuriosity seekers as well as seasonal purchasers during festival season.
SWOT analysis
1. Premium pricecharged to reflect innovation and creativity.
2. High quality rawmaterials are collected from renowned fashion house.
3. Timely delivery forordered products.
4. The location of theshop is very much favorable.
Weakness
1. Being a new entrant is one of theweaknesses of the boutique shop.
1. A partiallyfulfilled customer need is a great opportunity for the shop.
Threat
1. Increasing market price of rawmaterials and labor.
4.1 Market Segmentation
Thepopulation of Sylhet is concentrated heavily in the southwestern part of thecity therefore leading to the highest concentration of our customer base.
Thelast area of potential customers is labeled as "other." Because NeodressBoutique Shop offers a variety of innovative and creative apparel, alongwith accessories and gifts we feel that we will attract many curious shoppers.Our ambience and customer service will make them repeat customers.
Market Analysis
2008
| |
Potential Customers
|
Growth
|
Local People
|
10%
|
NRBs
|
15%
|
Other
|
10%
|
Total
|
35%
|
Thegoal of Neodress Boutique Shop is to serve the local community that hasdifficulty finding innovative clothes. It will also serve the NRB community.
Bothof these markets are underserved in the major boutique retailer outlets.
4.2.1 Market Needs
Thereare several important needs in the boutique business that are being eitherunderserved or not met at all. Neodress Boutique Shop plans to meet and servicethose needs.
1.Neodresswillprovide a large assortment of sizes to compliment the various body shapes andsizes of the local community.
2.Focusand attention to customer's personal preferences and customer retention will begiven high priority. Because of the high rate of employee turnover at majormass retailers, customer service and personal detail has been lost.
Millionsof people around the world instantly recognize and identify with traditionalapparel.
Ourtraditional clothing has survived many eras. There will always be a future fortraditional apparel. Within the last two years the traditional look has made acomeback in the fashion industry. Neodress Boutique intends to use its place inthe community to heighten the awareness of the Bangladeshi culture in SubidBazar, Sylhet.
With theincrease of participation by NRBS in the international affairs more people arebecoming aware of our products all over the world.
Marketgrowth is in an upward motion, despite some of the latest economic downturns inour country. Now a days, Sylhet has become a center of economic and culturalactivities because of the establishment of various educational institutions andother organizations. People from other areas are coming to Sylhet for study orjob purposes. Moreover the number of working women are increasing in the citywho are very much concerned about their attire. Sylhet has also been designatedas the city of natural beauty in the country. Every year So many tourists arecoming to Sylhet for trade and tour purposes.
Forthese reasons and more, Sylhet is considered an economic leader in Bangladesh Bangladesh
4.2.4 Industry Analysis
Boutiqueshops fall within several kinds of stores:
- Small Speciality Stores: The majority of boutique is sold through small family-run specialty stores that are located in or near neighborhood communities.
- Large Multi-owned Retailers: These large stores mass market and sell to hardcore enthusiasts as well as the local tourists and seasonal purchases. Examples include She.
4.3Main Competitors
Neodress Boutiqueshop has competitors within a 15 miles radius of its location.
She, which is located approximately 2.1 milesfrom our location is our closest competitor. It is one of the largest apparelstores in the city of Sylhet
DhakaBoutique,located approximately 3.3 miles from our store. It combines the atmosphere ofTaradin restaurant with shopping. They offer an eclectic mix of apparel,grills, cookware, and gift items. They don't do any advertising or promotionsof their retail outlet so if a customer doesn't visit Taradin restaurant hewouldn't know about the retail establishment.
Manorom, is approximately 12.1 miles from Neodress andis the farthest of the three competitors. It is a family-owned apparel with twostores. Their customer base tends to be more upscale as they carry more of thehigh end labels like Gucci and Armani. They also carry housewares and beddingitems of which She and Dhaka boutique does notcarry.
5.0 Strategy and Implementation Summary
Neodressboutique shop’s goal is to provide apparel to the under served market of thecommunity who desires differentiated cloths. The major boutiques have left ahole in this market by not providing differentiated products by focusing oncustomer preferences.
Ourintention is to gain 60% of this market share by focusing on our nichepositioning, neighborhood location, brand that we sell, hospitality and specialpromotions.
5.1 Competitive Edge
- The Neodress Shopper Card which allows the customer a 15% discount after ten purchases.
- Our location in the community will offer closer access to our target customer base.
- We will offer plus sizes for women.
5.2 Marketing Strategy
Ourmarketing strategy will focus heavily on sales promotion, niche positioning inthe market and customer service with loyalty and retention in sales.
1.The marketingbudget will not exceed 5% of our gross annual sales.
2.Our promotionswill always stay in tune with our company objectives and mission statement.
Forthe more full-bodied individual seeking creatively designed apparel, Neodresswilloffer brand traditional wear in a larger assortment of styles and sizes thataren't always readily available in the mass apparel retailers.
Neodresswill maintain a premium pricing strategy. We base the product lines that wecarry on their reputation and quality as clothing. Most of our lines come witha suggested retail price that we will follow. We will also utilize the standardpractice of keystoning as well.
Neodressboutique shop will follow an aggressive yet creative promotional plan. Thiswill allow us to focus directly on our target customer while still beingconservative with our advertising money.
1.A press releasekit will be sent to all major media outlets in Sylhet highlighting the grandopening of the shop in the city. This kit will include a press release,pictures of the interior space, color postcard/flyer, and a business card.
2.500 4x5 colorflyers/postcards will be distributed throughout the city at local clubs,colleges and universities.
3.A direct mailprogram that will further focus on and target the top 50% customer base withspecial in-house sales and promotions.
Our retail location will be the foundation of building our customer base. Wewill also manage a direct mail program that will focus on our top 50% customersspotlighting any in-house sales and promotions.
5.2.5 Marketing Programs
Ourmarketing programs will consist of the distribution of 500 color flyers twoweeks prior to our grand opening event.
5.3 Sales Strategy
We will offer a 14day return/exchange policy to build trust with our customers and maintainretention and loyalty.
Thefollowing table and chart give a highlight on forecasted sales. We expect salesto start off conservatively and increase extensively during the Eid holidayshopping season and during the months of summer.
Neodress hasplanned for a steady growth for the first year as we build name recognition andstatus in the community. In the second and third year we look to see anincrease of revenue of 20% as we gain a larger percentage of the market shareand increase our customer base beyond the southwest part of the city.
Itemwise Sales by 1st Year
Item
|
Revenue (tk)
|
Saree
|
180,000
|
Salwar Kameez
|
220,000
|
Kids' Item
|
85,000
|
Bed cover
|
60,000
|
Cushion cover
|
78,000
|
Curtain
|
62,000
|
Others
|
15,000
|
6.0 Management Summary
Employeeswill be encouraged to work within their creative, physical, and intellectualboundaries. All duties will be divided and delegated according to strengths andweaknesses. At Neodress we will expect a high degree of customer service skillsand personality as this is essential to our success.
6.1 Organizational Structure
Neodress BoutiqueShop is a small business and therefore requires a simple organizationalstructure. All decisions are made in-line with the company objectives. Employeetasks are delegated based upon their level of expertise, creativity, strengthsand weaknesses.
6.2 Management Team
Allpartners will be responsible for all administrative functions, purchasing,inventory control, and promotions. They will also act as a part-time sales representative.
6.3 Personnel Plan
Thepersonnel plan is included in the following table below. There will be sixfull-time employee and two part-time employees working 20-30 hours per week.All employee's will benefit from a one day paid holiday on their respectivebirthdays and one week of paid vacation after twelve months of employment.
At thistime medical benefits will not be offered to employees. As profits increase inthe future medical benefits will be offered to all employees.
FY 2008
| |
Full-time position
|
Tk. 40,000
|
Part-time position
|
Tk.8,000
|
Total People
|
8
|
Total Payroll
|
Tk.48,000
|
7.0 Financial Plan
The growthof Neodress Boutique Shop will be moderate and the cash balance will always bepositive. Being a retail environment we will not be selling on credit. We willaccept cash. Later we will accept checks, and all major credit cards. Marketingand advertising will remain at or below 5% of sales. We will continue toreinvest residual profits into company expansion, and personnel.
7.1 Important Assumptions
Neodress doesnot sell on credit nor do it offer layaways at this time. We accept cash. Allsales revenue will be deposited in our business checking account within 48hours. Our business checking account will be with HSBC Bank.
7.2 Key Financial Indicators
Thefollowing chart shows the benchmark figures for Rongdhonu.
Benchmarks
7.3 Break-even Analysis
A break-even analysis table has been completed on the basis of averagecosts/prices. With fixed costs of Tk. 280000, and sales of Tk. 700000 we needtk. 576488 in the first year in sales to break even.
Fixed Expenses
Showroom
|
150,000
|
Factory
|
20,000
|
Machinery
|
90,000
|
Installation Expenses
|
10,000
|
Preliminary Expenses
|
10,000
|
Total
|
280,000
|
Calculation ofBreak Even Point
Sales
|
700,000
|
Variable Cost
|
360,000
|
Fixed Cost
|
280,000
|
Contribution Margin
|
340,000
|
Contribution Margin Ratio
|
0.4857
|
Break Even Sales
|
576,488
|
Thefollowing chart and table will indicate projected profit and loss.
Income Statement
Sales
|
700,000
| |
Saree
|
180,000
| |
Salwar Kameez
|
220,000
| |
Kids' Item
|
85,000
| |
Bed cover
|
60,000
| |
Cushion cover
|
78,000
| |
Curtain
|
62,000
| |
Others
|
15,000
| |
Less: Cost of Goods Sold
|
384,000
| |
Direct Material
|
206,000
| |
Direct Labour
|
144,000
| |
Factory Overhead
|
10,000
| |
Factory Rent
|
24,000
| |
Gross Profit
|
316,000
| |
Less: Operating Expenses
|
120,800
| |
Showroom Rent
|
36,000
| |
Staff Salary
|
48,000
| |
Maintenance Expenses
|
4,000
| |
Utilities
|
4,800
| |
Stationary
|
3,000
| |
Depreciation
|
19,000
| |
Advertising Expenses
|
6,000
| |
Net Profit
|
195,200
|
7.6 Projected Balance Sheet
Thefollowing table explains the projected balance sheet.
Assets
|
Amount
|
Liabilities
|
Amount
| ||
Machinery
|
100,000
|
Capital
|
386,000
| ||
Less: Depreciation
|
19,000
|
Add: Net Profit
|
195,200
| ||
81,000
|
Net Worth
|
581,200
| |||
Cash
|
393,000
|
Creditor
|
150,000
| ||
Accounts Receivable
|
157,200
| ||||
Inventory
|
100,000
| ||||
Total
|
731,200
|
731,200
|
7.7 Business Ratios
Businessratios for the year of this plan are shown below.
Current Ratio
|
4.33
|
Liquid Ratio
|
3.00
|
Inventory Turnover
|
3.84
|
Total Asset or Capital Turnover
|
0.96
|
Net Profit Margin
|
0.28
|
Return on Investment
|
0.26
|
Return on Equity
|
0.51
|
8.Risk Management
The risks thatmay occur in this project are:
1. Pure Risk: Therevenues and cash inflows of the project may be lower than the expected indifferent years.
2. Systematic Risk:Political changes may hamper the production of the project.
3. Unsystematic Risk:Workers may go for strike, which may hinder production process.
4. Market Risk: Macroeconomic factors like inflation can have an impact on the project andfluctuation of demand. Cost reduction and increased production may be a way outbut it will become difficult to maintain quality.
5. Instrumental Risk:The machineries may go out of order any time. So the business runs the risk ofmachinery shortages.
9. Conclusion
The plan for the boutiqueshop has been designed bearing the demand for innovative clothing in mind. Sucha plan is also judged financially and market projections are included.
