Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

Case Study Business Management Capstone

THE NICCI HOU COLLECTION (The Company) and its representatives. Any production of this document in whole or in part, or the divulgence of any of its contents without the prior written consent of the Company, is prohibited.

This is a business plan. It does not imply and shall not be construed as an offering of

securities. Persons interested in pursuing an investment should contact their professional

advisors.

Business Plan Copy No. ___

Table of Contents

EXECUTIVE SUMMARY

5

Business Identification

6

Mission, Goals and Objectives

6

Keys to Success

6

COMPANY SUMMARY

7

Industry History

8

Legal Form of Ownership

9

Location and Facilities

9

Management Structure

9

Products and Services

9

MARKET ANALYSIS

10

Target Market

11

Industry Analysis

11

Competitive Analysis

11

MARKET STRATEGY

15

Price List

16

Selling Strategy

16

Sales Forecast

16

IMPLEMENTATION STRATEGY

19

Overall Strategy

20

Implementation

20

Control Plan

20

FINANCIAL STATEMENTS AND PROJECTION

23

Revenue and Cost Estimate

24

Forecasted Profit and Loss Statement

25

Forecasted Balance Sheet

26

Breakeven Point

27

Financial Position

27

Capital / Investment Needs

28

CONFIDENTIALITY AGREEMENT

The undersigned acknowledges that the information provided by THE NICCI HOU COLLECTIONS LLC in this business plan is confidential.

Therefore, the undersigned agrees not disclose any of such information without the express written permission of THE NICCI HOU COLLECTIONS LLC.

It is hereby acknowledged by the undersigned that the information to be furnished in this business plan is in all respects confidential in nature (other than such information which is already in the public domain through other means) and that any disclosure or use of same by the undersigned may cause serious harm or damage to THE NICCI HOU COLLECTIONS LLC.

Upon request, this document is to be immediately returned to THE NICCI HOU COLLECTIONS LLC.

______________________________

Signature

______________________________

Print Name

______________________________

Date

Executive Summary

Business Identification

THE NICCI HOU COLLECTION (the “Company”) is a Limited Liability Company incorporated under the laws of the State of Georgia. The Company will be located at 3311 Back Country Street, Douglasville, GA 30135. THE NICCI HOU COLLECTION is a creative, edgy, glamorous, sophisticated, unique, and classy clothing brand made for the elite woman. The company illustrates self-expression and the beauty of women empowerment.

Owner Nicole Houston selected the name THE NICCI HOU COLLECTION, because the line pulls inspiration from high fashion editorial inspired photography as well as Nicole’s continual inspiration from art, and her deeply rooted passion for self-expression. Thus, creating a brand that gives women the room to indulge in being apart of the couture fashion market while feeling beautiful, sexy, and confident.

The purpose of the business plan is to provide the Company with a short-term blueprint

and a long-term vision. The company has one employee with one business manager, and one marketing manager, interstate.

Mission, Goals and Objectives

The Company’s mission is to create clothing that gives women the avenue to express beauty, individuality, and confidence. Profitability will be reached by the sixth month (although profitable months might be surrounded by unprofitable months, a function of the revenue cycle for this type of business) and year three is projected to bring 172,226.25 of profit. In order to reach these goals, the Company will carry out the following specific objectives:

Build awareness of THE NICCI HOU COLLECTION - Establish name recognition for Nicole Houston and the Company throughout the fashion industry and the purchasing public.

Create a full fashion cut and sew line that includes denim, soft goods, and jewelry- Improve Product Quality, Industry Awareness and Market Penetration.

Achieve a profit margin of at least 33%.

Increase placement by 30% within first year of production.-Increase the number of customers (store buyers, online customers, phone orders).

Keys to Success

Keys which will help assure the Company’s success can be defined as follows:

Successful advertisement in the trade publications and industry related retail magazines to establish name recognition.

Representation at the appropriate trade show.

Innovation and creativity - distinguish the collection from the competition.

Marketing - identifying new business prospects and evaluating new markets.

Controlling cost.

Company Summary

Industry History

For centuries, most clothing was made at home. The tasks of combing, spinning and weaving wool and cotton into fabrics were done by women and children to make plain, durable clothes. However, the Industrial Revolution brought sweeping changes. The invention of machines made clothes manufacturing faster, cheaper and more uniform in quality and made large scale production possible.

In 1831, the first clothing factory was built in New York City and the ready-to-wear industry in the United States was born. Country stores and traveling salesmen sold ready-made clothing to rural household. Slop shops and Haberdashery stores such as Brooks Brothers also sold both custom and ready-made clothing.

The invention of the sewing machine by Elias Howe in 1846 was a major technical change. The sewing machines, powered by foot treadles, shifted the industry from hand to machine labor and vastly increased the production of ready-made clothing. This invention determined the structure of the clothing industry even to this date. The low cost, portability and simplicity of the sewing machine made the clothing industry easy to enter and promoted decentralization.

Using precut cloth brought from a manufacturer, contractors would establish clothing businesses. The actual construction of garments was farmed out among individuals (often recent immigrants). Each task in the process was performed by a different worker. Using the task system, a team of workers jointly finished a number of garments. This was the beginning of the infamous sweatshop in the needle trades. Garment workers were made to work long hours in poorly lit, inadequately heated, poorly ventilated and unsanitary conditions. Sometimes whole families ate and slept in the same room where clothing manufacture was carried out.

The introduction of trade unions and their efforts to improve working conditions brought about some changes in the garment industry. A strike by workers at the Hart, Shaffner, and Marx factory in Chicago in 1910 won increased wages and a shorten work week. Large-scale union activity throughout the post–World War I period and the depression of the 1930s, was an important factor in improving working conditions and wages.

The clothing industry experienced continuous growth throughout the twentieth century as capital investment from 1899 to 1948 increased from $541 million to $2 billion and employment in the apparel trade increased from 225,000 to 824,000 during the first 50 years. Clothing expenditures is the third largest category in average family budget.

Legal Form of Ownership

The Company is organized as a Limited Liability Company (LLC). This organizational structure was chosen because the LLC combines the limited liability advantages of a corporation while providing flexibility in taxation.

Location and Facilities

The production facility located at 3311 Back Country Street, Douglasville, Georgia is approximately 2,000 square feet. The area has appropriate utilities, sufficient storage, and efficient working space.

Management Structure

The company has one employee with one business manager, and one marketing manager, interstate. Over the next period THE NICCI HOU COLLECTION will employ 2 new staff members for leading sales and merchandising. The company will concentrate on developing a solid sales and promotional team and overall policies and procedures in all areas. A training needs analysis will be conducted.

Products and Services

The primary product is Contemporary Women / Ready-to-wear. The product is sold as a line (fall, winter, spring, or summer) for distribution through high-end retail stores. The product can also be sold as a limited edition or custom design for specialty boutiques or specific individuals.

Market Analysis

Target Market

Based on market trends and profiles of the business and competitors it has been decided to concentrate THE NICCI HOU COLLECTION’s efforts toward the following segment:

Contemporary Women / Ready-to-wear

THE NICCI HOU COLLECTION only creates clothing for women.

Our main target customers are women ages 21-54.

Types of stores

Retail and specialty stores that specialize in carrying selective brands.

Online stores that carry high end items (separates, denim, shoes, accessories, etc...)

Industry Analysis

For women couture and ready-to-wear clothing lines in particular, competition from abroad is weak, especially from the south east region. Demand is rising for high quality clothing and lower prices, making it difficult to make adequate profits. This is a tough market and the business will need to offer something special to succeed. THE NICCI HOU COLLECTION plans to offer a mixture of styles that can be placed into different categories of fashion. Fashion forecasters and reporting services identify fashion and consumer trends by offering an in-depth insight into global fashion trends, updated daily. Trend information helps THE NICCI HOU COLLECTION create best-selling products and collections which allows the company to make the right business decisions at the right time, ensuring speed to market and profitability. Pantone, Trend Report, and the Tobe Report are all reputable sources that THE NICCI HOU COLLECTION continuously studies each season before actually placing ideas on its story board. Using these services gives THE NICCI HOU COLLECTION a niche over its competitors. The majority of couture and ready-to-wear influenced lines do not use trend forecasting services; thus creating a smaller market for their product. THE NICCI HOU COLLECTION sets out to provide product to not only the niche market but contemporary women’s wear as well.

Competitive Analysis

Fashion is a highly competitive field, with hundreds of new clothing lines entering the market each year, from overseas as well as home-grown lines. Competing against other start up lines, it will be important to offer different styles and skills from other in-house company designers.

The most successful clothing lines are those offering multiple styles, skills and connections with other professionals within the industry. According to the American Apparel and Footwear Association, apparel sales for 2007 reached $190 billion, representing a 14% growth from levels ten years ago.

Small businesses face increased competition from big firms with their marketing muscles and economies of scale. In the United States, the industry is reeling from the shrinking availability and high cost of skilled labor (hence, outsourcing manufacturing of their apparel to contractors in developing countries). There are also a growing number of small clothing lines that significantly tightens the competition. Plus, small companies need to have the resources to cope with the rapid changes in apparel trends and styles.

Value fashion is proving to be the fastest growing sector in the retail sector of the U.S. clothing market. Shoppers are becoming more concerned with the price rather than the label, and cut-price stores have enjoyed considerable growth over the last six years. Value clothing now accounts for over 18.2% of total clothing sales and is worth about $34.58 billion.

Online shopping is becoming increasingly important and growing in popularity with consumers, despite many believing that the online retail sector was largely written off when the dot.com bubble burst in 2000. According to the American Apparel and Footwear Association, apparel and footwear sales ranked #1 in online sales for the first time ever in 2006, overtaking online sales of computers and software, DVDs, CDs and books, according to a new report released January 2009 by the Forrester Research. Internet sales of apparel, footwear and accessories grew 17 percent in 2008 to $26.6 billion and are expected to increase another 23 percent in 2009. The report estimates that 16.5 percent of all apparel and shoes sold in 2009 will be sold online. The report found that the key reasons for the growth of apparel, footwear and accessories online are new sites, liberal shipping and return policies and rich imaging.

Catalogue shopping has been a popular form of retail for many years, and is often an extra source of revenue for high end stores. However, the future is uncertain, and there does not appear to be enormous scope for growth. Point of sale credit has reduced, including mail order and catalogue credit. It is no secret that retailers utilize props, such as soothing music, colors and aromas, to influence consumers’ purchasing decisions. Retail psychologists advise stores on techniques to influence customers’ decisions, from how to move them around the store to how much they spend. Retailers argue that they are meeting customers’ needs in a ‘cash rich, time poor’ society where people want things made easy for them.

Counterfeited goods, particularly clothes and accessories, are a problem to reputable retailers. Businesses have gone out of business thanks to these types of goods and the quality is usually a fraction of the genuine article. Experts believe counterfeiting supports drug running and finances terrorism.

Within the total market THE NICCI HOU COLLECTION has identified several different types of customers with different types of buying needs. These types of companies have been identified as:

Specialty Stores

Female boutiques

Large High-end Stores

Online retailers

The women’s clothing market is fast moving and very much at the forefront of fashion, so it is difficult to accurately predict future trends. However, it would seem that opportunities are appearing in a number of areas including:

An increasing number of women who get their fashion inspiration from celebrities on the cover of magazines and regularly in advertisements. It seems that fashions trends may no longer be unique to models on the catwalks and fashion magazines. Celebrities may become the forecasters of new trends.

Technological advances are changing the face of the future of fashion. Interactive fashion may be the next trend to hit the couture and ready-to-wear. This varies from prototyped fashion initiatives that help turn the consumer into the clothing line owners and designers creates clothing for women.

Our main target customers are women Another technological advance being utilized in the fashion industry is being branded the ‘definitive clothes of the future’. They are clothes that can think and are expected to perform a range of tasks from taking phone calls to keeping a check on the health of the wearer. Commercial production may be some years away, but these clever clothes are predicted to be a big hit.

International fashion trends are becoming increasingly popular and designers are taking inspiration from other cultures and countries.

Over the last five years there have been trends in the market that have led to changes in the various market segments. From the beginning, THE NICCI HOU COLLECTION has always concentrated on the street wear segment. Last year’s couture and ready-to-wear segment totaled 64% of the total market. For THE NICCI HOU COLLECTION to survive they will need to target their future efforts to the growing segments such as accessories, shoes, and soft goods.

THE NICCI HOU COLLECTION

Tracy Reese

Stella McCartney

Christian Dior

Price Strategy

 

 

 

Retail Price

$150.00 - $800.00

$145.00 - $595.00

$865.00 - $1,795.00

$500.00 - $3,000.00

Payment Terms

cash/credit

cash/credit

cash/credit

cash/credit

 

 

 

 

Product Strategy

 

 

 

Material

Various

Various

Various

Various

Innovation

Product Life

2 - 3 Months

1 - 2 years

1 - 2 years

1 - 2 years

Country of Origin

USA

USA

USA

France

 

Promotion

No of Reps

1 – 2

4 – 5

4 – 5

5-10

Advertising Appeal

Women

Women

Women

Women

SWOT Analysis

 This is a summary of the business's most important strengths, weaknesses, opportunities and threats.

 Strengths of the Business

THE NICCI HOU COLLECTION's market is semi-heavily saturated:

THE NICCI HOU COLLECTION's target market is females in the women clothing industry.

Entering into a market that is not heavily saturated gives THE NICCI HOU COLLECTION the opportunity to gain over fair share of the sales within market.

Based out of a south eastern region:

The majority of couture and ready-to-wear lines are based out of New York and Europe.

Couture and ready-to-wear clothing is spreading slowly in the southeast region.

There is a growing need for more couture and ready-to-wear brands in the southeast.

Low overhead:

Will not exceed the monthly and quarterly budget.

Creates extra funds for emergency savings.

Weaknesses of the Business

Prolonged time period for brand recognition:

It may take up to a year to gain recognition as a credible couture and ready-to-wear brand

Small initial working capital:

No business loan has been acquired for capital for THE NICCI HOU COLLECTION.

Founder Nicole Houston, has invested her own personal funds to start the company however is currently looking for a silent investor.

Late press submission:

Press kits are not submitted to magazines, stylists, and other promo relative companies until each season’s budget is acquired.

To become one of the leading couture and ready-to-wear brands, with there being several mainstream female brands, THE NICCI HOU COLLECTION has to work hard in order to gain market share.

Opportunities in the Marketplace

THE NICCI HOU COLLECTION has the opportunity to branch into lifestyle brands in areas such as perfume, denim, soft goods, and jewelry.

Expanding the company leads to more distribution channels. Thus, creating a larger profit margin.

To become one of the leading couture and ready-to-wear brands, with there being only about 2-4 mainstream female brands, THE NICCI HOU COLLECTION has the ability to gain competition’s existing customers and create new ones.

Couture and ready-to-wear clothing is spreading slowly in the southeast region however presents an open marketing for THE NICCI HOU COLLECTION.

Recognizable branding:

While many couture and ready-to-wear brands are crossing over into different spectrums of advertising. THE NICCI HOU COLLECTION plans to merge its brand into several genres of lifestyle outlets. Such as music, fashion, magazines, fashion shows, etc…

Threats in the Marketplace

Competition having better product placement.

THE NICCI HOU COLLECTION will have to implement a PR specialist to catch up to competitions level of product placement.

Store buyers placing account with existing couture and ready-to-wear lines

Market Strategy

Price Strategies

Use cost base method to derive price. Add a 30% profit margin to the cost of the product to gain efficient revenue and increase that by at least 1% per year until reaching our final target of 33%.

Product Strategies

Over the next year the company will upgrade the design process by purchasing:

HP Touch Smart 600 (2) - New Design Industry Standard; HP Touch Smart 600 provide greater speed, more tools and technology for design professionals. Being able to deliver designs in a timely manner allows the designer to create many graphics, textures, specifications, logos, and layouts quickly.

HP Touch Smart 600 computers also have a large capacity unit for storing information. During the design process it is very vital that the graphic designers can visually see each detail for specification stage. The specifications give the manufactures the exact measurements for garment construction.

Place Strategies

Generally, the product will be positioned as quality female couture and ready-to-wear clothing that bridges style and sex appeal. THE NICCI HOU COLLECTION has recognized the problems associated with mass marketing and will position the product slightly differently in each segment.

Chain Stores segment: Chain stores give the company an opportunity to sell a high quantity of product with one account purchase. THE NICCI HOU COLLECTION will use chain stores to brand the logo and clothing pieces that are being publicized in magazines and trade shows.

High End Specialty Stores/Small Stores segment: We will emphasize the quality and flexibility of THE NICCI HOU COLLECTION to customize orders that meet customer’s requirements. Store buyers will be given a more exclusive selection each season.

Female Boutiques: Pieces that fall into better women’s wear will be placed. These items from THE NICCI HOU COLLECTION will provide sufficient merchandising and meet customers’ purchases.

Large high end stores: Actual collections at high quality selections will be sold to the high end stores. (THE NICCI HOU COLLECTION will target these stores in the Fall of 2010. Because large high end stores purchase large accounts for future seasons, the company will have to produce Fall of 2010 samples in Fall of 2010).

Online Retailers (Exporters segment): THE NICCI HOU COLLECTION will emphasize the uniqueness of the product in editorials, magazines, blogs, internet searches, fashion websites and informative fashion pages. A link will connect to the online retailers displaying THE NICCI HOU COLLECTION product.

Promotion Strategies

Most promotion for THE NICCI HOU COLLECTION will be in the form of advertising via websites, fashion and trade shows, telephone sales and personal visits (samples of work should be made up to take along). Establishing long-term relationships will bring in repeat business. Therefore word-of-mouth recommendations are extremely important, as satisfied clients will return with more orders and help the business to build a solid reputation within the industry.

Clothing lines are advised to advertise in specified industry magazines and trade publications; this will allow the business to reach large audiences of key decision makers in the industry. It will also allow customers to be targeted, which will gain the business valuable name recognition. Attending trade exhibitions will provide opportunities for expanding networks and staying abreast of new industry trends.

THE NICCI HOU COLLECTION will better position and target products to growth markets over the next planning period. The company will strengthen its sales performance in various sales territories through the use of defined strategies which are detailed in the marketing plan.

THE NICCI HOU COLLECTION will target their different market segments with a four pronged approach:

Industry trade shows. These shows typically occur two times a year in different locations. These trade shows are quite extensive; they have retailers, manufacturers, designers, wholesalers as well as the media. The who's who can always be found at these trade shows. Attendance/display booths are by far the best way to network and gain business in this industry.

Advertisements in industry publications. This is another targeted method of reaching the desired audience. In this case, only industry personnel have access to subscriptions so the audience is much targeted.

Web page. A Web page will be used to advertise the company. Previous designs, as well as service offerings, will be listed on the page. The Web page allows companies that are geographically far away to be able to see past designs and learn more about THE NICCI HOU COLLECTION.

Also, THE NICCI HOU COLLECTION will allow online purchases each season.

Advertisements in street culture magazines. These advertisements will be used to reach the market segments of women that THE NICCI HOU COLLECTION targets. These advertisements will be created to effectively capture the attention of consumers, store buyers, fashion stylists, merchandisers, and other key parts of the fashion chain.

Selling Strategy:

Although the market newcomer, the company will continue to target the women’s wear segments. These markets are increasing at a substantial growth rate. A competitive analysis of THE NICCI HOU COLLECTION has shown that the company has substantial product benefits over the competition. It is estimated that THE NICCI HOU COLLECTION can become a major player in these segments. The company will start running promotions to these segments commencing in the first quarter of 2011.

The company will, over the next period, adapt its products and selling efforts to growing new markets whilst maintaining its market leadership not only in its existing markets but in International markets as well.

The company will be placing more emphasis on markets that are in the growth and maturity stage of the product life cycle and less on those that are in decline.

Sales Forecast:

Initial sales for the month total $2500.00. We are expecting sales to increase by $250.00 per month. Our projections are conservative relative to industry averages and reflect our revenue goal relative to this local market opportunity. We feel our sales projections for the business are within our reach over the near-term

.

Implementation Strategy

Overall Strategy

Over the next period THE NICCI HOU COLLECTION will employ 2 new staff members for leading sales and merchandising. The company will concentrate on developing a solid sales and promotional team. A training needs analysis will be conducted.

Buyers, Sales Reps, Stylists and Personal contacts from relevant fashion companies are an essential promotional tool for a fashion company. Existing contacts should be considered and potential new sectors investigated. The first step will be to obtain an appointment and show buyers the line sheet along with samples from the line.

THE NICCI HOU COLLECTION will generally be in touch with prospective buyers either at the industry trade shows, when the buyer calls with inquiries, or when sales reps send out e-mails. During these conversations, THE NICCI HOU COLLECTION will be completely customer focused to give off the impression of professionalism. In addition to this customer-centered attitude, THE NICCI HOU COLLECTION will continue to create innovative quality clothing. There are several ways of meeting potential buyers for THE NICCI HOU COLLECTION. Once people start to notice our products and demand begins to grow, we can slowly expand the business. This approach allows us to cautiously start with comparatively low risk. With our sales assured, we can begin to think of the production aspects of our business to make sure that we are able to meet our client’s delivery schedule.

Implementation

The company will increase gross margin to 3 percent which will result in a strengthening of the bottom line. Emphasis will be placed on consolidating and reducing debts to help fund new capital expansion.

Control Plan

Product Action Plan

Objective: Improve product quality, Industry Awareness and Market Penetration.

Strategy 1: Upgrade Design Process

Action/Tactic Purchase Industry Standard HP Touch Smart 600’s.

Due Date: Year 1 3rd Quarter

Responsible Party: Management Team

Strategy 2: Stay abrupt of all segments of the fashion industry..

Action/Tactic: Subscribe to Trade Publications

Due Date: Year 1 1st Quarter

Responsible Party: Management Team

Strategy 3. Lower Production Cost

Action/Tactic: Shorten overall production time

Due Date: Year 1 3rd Quarter

Responsible Party: Nicci Hou

Monitoring Activity:

When/Frequency: Monthly at the end of the month.

Responsible Party: Management Team

Price Action Plan

Objective: Achieve a profit margin of at least 33%.

Strategy 1: Use cost base method to derive price.

Action/Tactic: Add a 30% profit margin to the cost of the product to gain efficient revenue and increase that by at least 1% per year until reaching our final target of 33%.

Due Date: Year 3 Fourth Quarter

Responsible Party: Management Team

Strategy 2: Use Competition-Based Pricing to determine price.

Action/Tactic: Set our price the same as our competitors for similar products. Our low cost production should ensure profit margin.

Due Date: Year 1 First Quarter

Responsible Party: Management Team

Strategy 3: Employ a penetration pricing strategy.

Action/Tactic: Price product below competitors to gain market share. Lower cost production should ensure profit margin.

Due Date: Year 1 First Quarter

Responsible Party: Management Team

Monitoring Activity:

When/Frequency: Quarterly at the end of the Quarter

Responsible Party: Management Team

Place Action Plan

Objective: Increase placement by 30% within first year of production.

Strategy 1: Brand the logo and clothing pieces.

Action/Tactic: Use Chain Store placement to increase awareness of Brand.

Due Date: Year 1 Third Quarter

Responsible Party: Sales Rep

Strategy 2: Develop Alternative placement structures.

Action/Tactic: Sell via catalogues and the Internet (www.company.com).

Due Date: Year 1 Second Quarter

Responsible Party: Sales Rep

Strategy 3: Create A Quality Image for Brand

Action/Tactic: Partner with High End Specialty Stores/Small Stores segment.

Due Date: Year 1 Third Quarter

Responsible Party: Sales Rep

Monitoring Activity:

When/Frequency: Yearly at end of Fourth Quarter

Responsible Party: Management Team

Promotion Action Plan

Objective: Build awareness of THE NICCI HOU COLLECTION.

Strategy 1: Create promotion campaign.

Action/Tactic: A promotion campaign will be introduced to expand existing markets by 30% of the target market within the first 6 months of the new campaign.

Due Date: Year 1 Second Quarter

Responsible Party: Sales Rep

Strategy 2: Promote THE NICCI HOU COLLECTION via Internet, fashion and trade shows, telephone sales and personal visits

Action/Tactic: Inform target audience about features and benefits of our products and their competitive advantages via direct comparisons with competitor’s products.

Due Date: Year 1 Second Quarter

Responsible Party: Sales Rep

Strategy 3: Reinforce the Brand.

Action/Tactic: Use customer surveys to gauge customer satisfaction and willingness to recommend THE NICCI HOU COLLECTION.

Due Date: Year 2 First Quarter

Responsible Party: Management Team

Monitoring Activity:

When/Frequency: Quarterly at end of quarter

Responsible Party: Management Team

Financial Statements

And

Projections

Revenue and Cost Estimate

Revenue & Expenses

January

February

March

April

May

REVENUE (Sales):

2500.00

2750.00

3000.00

3250.00

3500.00

Sales Tax

175.00

192.50

210.00

227.50

245.00

TOTAL REVENUE (Sales):

2675.00

2942.50

3210.00

3477.50

3745.00

OPERATING EXPENSES:

Office Space

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

Utilities

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Supplies

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Equipment Lease

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

Sales and Marketing

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Payroll

$ 1,866.00

$ 1,866.00

$ 1,866.00

$ 1,866.00

$ 1,866.00

Payroll Tax

$ 279.90

$ 279.90

$ 279.90

$ 279.90

$ 279.90

Sales Tax

19.59

19.59

19.59

19.59

19.59

Total:

$ 3,915.49

$ 3,915.49

$ 3,915.49

$ 3,915.49

$ 3,915.49

Revenue & Expenses

July

August

September

October

November

December

REVENUE (Sales):

4000.00

4250.00

4500.00

4750.00

5000.00

5250.00

Sales Tax

280.00

297.50

315.00

332.50

350.00

367.50

TOTAL REVENUE (Sales):

4280.00

4547.50

4815.00

5082.50

5350.00

5617.50

OPERATING EXPENSES:

Office Space

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

Utilities

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Supplies

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Equipment Lease

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

$ 500.00

Sales and Marketing

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

$ 250.00

Payroll

$ 1,866.00

$ 1,866.00

$ 1,866.00

$ 1,866.00

$ 1,866.00

$ 1,866.00

Payroll Tax

$ 279.90

$ 279.90

$ 279.90

$ 279.90

$ 279.90

$ 279.90

Sales Tax

19.59

19.59

19.59

19.59

19.59

19.59

Total:

$ 3,915.49

$ 3,915.49

$ 3,915.49

$ 3,915.49

$ 3,915.49

$ 3,915.49

Forecasted Profit and Loss Statement

Monthly Profit and Loss

January

February

March

April

May

June

REVENUE (Sales):

2500.00

2750.00

3000.00

3250.00

3500.00

3750.00

Sales Tax

175.00

192.50

210.00

227.50

245.00

262.50

TOTAL REVENUE (Sales):

2675.00

2942.50

3210.00

3477.50

3745.00

4012.50

OPERATING EXPENSES:

Office Space

500

500

500

500

500

500

Utilities

250

250

250

250

250

250

Supplies

250

250

250

250

250

250

Equipment Lease

500

500

500

500

500

500

Sales and Marketing

250

250

250

250

250

250

Payroll

1866

1866

1866

1866

1866

1866

Payroll Tax

279.9

279.9

279.9

279.9

279.9

279.9

Sales Tax

12.25

19.59

19.59

19.59

19.59

19.59

175

192.5

210

227.5

245

262.5

Total:

$ 4,083.15

$ 4,107.99

$ 4,125.49

$ 4,142.99

$ 4,160.49

$ 4,177.99

Profit before Interest

-1408.15

-1165.49

-915.49

-665.49

-415.49

-165.49

Interest Expense

0.00

0.00

0.00

0.00

0.00

0.00

Net Profit (Loss) - Monthly

-1408.15

-1165.49

-915.49

-665.49

-415.49

-165.49

Net Profit (Loss) for year

-1408.15

-1165.49

-915.49

-665.49

-415.49

-165.49

Net Profit/Sales

-35%

-28%

-22%

-16%

-10%

-4%

Monthly Profit and Loss

July

August

September

October

November

December

REVENUE (Sales):

4000.00

4250.00

4500.00

4750.00

5000.00

5250.00

Sales Tax

280.00

297.50

315.00

332.50

350.00

367.50

TOTAL REVENUE (Sales):

4280.00

4547.50

4815.00

5082.50

5350.00

5617.50

OPERATING EXPENSES:

Office Space

500

500

500

500

500

500

Utilities

250

250

250

250

250

250

Supplies

250

250

250

250

250

250

Equipment Lease

500

500

500

500

500

500

Sales and Marketing

250

250

250

250

250

250

Payroll

1866

1866

1866

1866

1866

1866

Payroll Tax

279.9

279.9

279.9

279.9

279.9

279.9

Sales Tax

19.59

19.59

19.59

19.59

19.59

19.59

280

297.5

315

332.5

350

367.5

Total:

$ 4,195.49

$ 4,212.99

$ 4,230.49

$ 4,247.99

$ 4,265.49

$4,282.99

Profit before Interest

84.51

334.51

584.51

834.51

1084.51

1334.51

Interest Expense

0.00

0.00

0.00

0.00

0.00

0.00

Net Profit (Loss) - Monthly

84.51

334.51

584.51

834.51

1084.51

1334.51

Net Profit (Loss) for year

84.51

334.51

584.51

834.51

1084.51

1334.51

Net Profit/Sales

2%

8%

14%

20%

24%

31%

Forecasted Balance Sheet

ASSETS:

Current Assets:

Cash

$ -

Inventory

$ 1,800.00

Total Current Assets:

$ 1,800.00

Long Term Assets:

$ 2,800.00

Total Long Term Assets:

$ 2,800.00

Total Assets

$ 4,600.00

LIABILITIES:

Current Liabiltiies:

Accounts Payable

$ 1,600.00

Total Current Liabilities:

$ 1,600.00

Long Term Liabilities:

$ -

Total Liabilities

$ 1,600.00

Owner's Equity

Cash Contribution

$ 3,000.00

Total Owner's Equity

$ 3,000.00

Total Liabilities and

Owner's Equity

$ 4,600.00

Financial Projections

Breakeven Point

Forecasted Break-Even

Analysis of Sales

Average Monthly

First Year

Total First

Year

Fixed Expenses

3898

46771

Variable Expenses

271

3255

Projected Sales

4146.25

49755.00

Break-Even Point

4171

5044

Variable Expense Assumptions Include

Sales Tax

Fixed Expenses

Office Space

Utilities (Telephone / Internet)

Supplies

Equipment Lease

Sales and Marketing

Payroll

Payroll Expenses

Financial Position

By the end of the first year, the Company will have a net profit of $2,754. The financial plan depends on important assumptions. Interest rates, tax rates and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are as follows:

Couture and ready-to-wear clothing is spreading slowly in the southeast region.

There is a growing need for more couture and ready-to-wear brands in the southeast.

Capital/Investment Needs

Costs associated with Start Up:

Office Space - $500 per month ($6000 yearly)

Utilities - $250.00 per month ($3000 yearly)

Supplies - $250.00 (including paper, stapler, pens, paper clips, etc...)

Equipment:

IntelliFax /Phone/Copier - $499.99

(2) Laptops - $2499.00 each Mac book Pro

Software - $129.99

Web Hosting - $10.00Monthly fee ($120.00)

Dress Forms – $195.00 per dress form each, 14 needed from sizes 1-14 ($2740)

4 mannequins needed for viewing purposes $300.00 ($1200)

2 sewing machines 499.99 each ($1000.00)

Woven labels: $239.00 / 1000 of pieces

Sticker hangtags: $269.00/ 1000 pieces

Hanging bags: $349.000 / 500 pieces

Size Tags:$159.00 / 1000 tags

Hangers: 50per box / $27.99 6 boxes ($180.00)

Total investment cost / overhead = $21, 118.00

/

Print Email Download Reference This Send to Kindle Reddit This

Share This Essay

To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:

Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

Request the removal of this essay.


More from UK Essays

Doing your resits? We can help!