BP FMB 16062014 PROFZUL

1.0 EXECUTIVE SUMMARY

1.1 Business Opportunity - Clothing for Stylish Muslimah Women

Fabulous Mom & Baby Boutique, a start-up company, will carryReady-to-Wear (RTW) designer and casual/contemporary apparel &accessories for Muslimah maternity, nursing dress, Muslimahdress, and also child clothing. Fabulous Mom & Baby Boutiquewill offer its customers a wide range of premium dresses tochoose from. Fabulous Mom & Baby Boutique is a woman-ownedbusiness currently organized as a partnership. By offering anice selection of upper-end merchandise with benchmarkedcustomer service, Fabulous Mom & Baby Boutique will quicklygain market share.

1.2 Getting the word out

Fabulous Mom & Baby Boutique will sale our merchandise for thefirst year business through on-line. Our own boutique isproposed to be open in the second year and will provideadditional services such as alterations, special orderingwhich is custom made for customers and services for post natalwomen. We will generate awareness and sales by utilizing theinternet platform; the webpage, Facebook and Instagram.Additionally, Fabulous Mom & Baby Boutique will meet ourcustomers through exhibition and expo, focusing on how womenapproach shopping by obtaining mentions and reviews in the topfashion publications and local papers.

1.3 Objectives

The main objective of this Business Plan is to help themanagement and financier to evaluate the company’s repaymentcapacity on the proposed financing of RM100,000.00 to financecapital expenditure and working capital.

The operational objectives of Fabulous Mom & Baby Boutiqueare:

i. To become the premier maternity and Muslimah boutique forthe upscale expectant mother, stylish women and her childby offering the newest fashions and the highest level ofcustomer attention.

ii. To provide women with a boutique that offers a comfortableand approachable environment

iii. To showcase quality, well-constructed fashions fromprominent and cutting-edge designers

iv. To offer a variety of beautiful and high-end fashionaccessories

v. To be one stop centre for mom and baby attire andaccessories.

vi. Quickly gain market share by addressing the upper-endprice point of maternity and infant clothing.

The financial objectives over the next three years are:

i. Achieve sales revenue of approximately RM 605,194.50 byend of Year 1

ii. Achieve sales revenue of approximately RM 793,097.43 byend of Year 2

iii. Achieve sales revenue of approximately RM 832,752.30by end of Year 3

1.4 Mission

It is Fabulous Mom & Baby’s mission to become the premierMuslimah maternity and nursing boutique for the upscaleexpectant mother . This will be accomplished by offering thenewest designer fashions and to be a one stopcentre for mom and baby’s products.

1.5 Key success factors

Offer the finest maternity clothing and accessories for the mothers and children.

Pamper the customers. Develop a strict financial control regime for the

business. The internet and e-commerce opportunity Demand for preferences for differentiated products Changing societal concern, attitudes and lifestyles Quality in the merchandise mix Good relationships with vendors Outstanding customer service and gain customer

satisfaction

2.0 COMPANY DESCRIPTION

2.1 Company Background

Company Name : Fabulous Mom & Baby Boutique

RegistrationNo.

:

RegistrationDate

: 1 April 2014

CompanyRegisteredAddress

: 92, Jalan Puncak Saujana 3/1FTaman Puncak Saujana, 43000 Kajang

BoutiqueAddress

: Lot 3.15, 3rd Floor, BUSANA @Menara MARA232, Jalan Tuanku Abdul Rahman50100 Kuala Lumpur

Key Partners : Nor Aziah Binti AmiruddinLailatul Asmah Binti Mohd Tahir

2.1 Partners Background

Name : Lailatul Asmah bt Mohd Tahir

I/C Number :

Address : 191-A, Villa Laman Tasik, JalanPermaisuri 6, Bandar SriPermaisuri, 56000 Kuala Lumpur

PhoneNumber : +6012 6452089

Date Of Birth : 15 Januari 1977

Age : 37

Sex : Female

Marital Status : Married

Academic Qualification

: Bachelor of Management (Honours)(Major in Marketing), Universiti SainsMalaysia

Position in theCompany

: General Manager cum MarketingManager

Previous Experience

: Experience as MarketingExecutive for 2 years Experience in MARAEntrepreneurial Sectors for 8years

Name : Nor Aziah binti Amiruddin

I/C Number : 801202-14-5858

Address : No. 92, Jalan Puncak Saujana 3/1FTaman Puncak Saujana Seksyen 343000 Kajang, Selangor

PhoneNumber : +6012 3517489

Date Of Birth : 2 December 1980

Age : 34

Sex : Female

Marital Status : Married

Academic Qualification

: Bachelor of Accountancy (Honours)Universiti Teknologi MARA

Position in theCompany

: Finance and Administration Manager

Previous Experience

: Experience as Account Executivein private company for 2 years

Experience in MARAEntrepreneurial Department for 6years

Experience in MARA FinancialDepartment for 2 years

2.3 Tagline

“The place you can find quality apparels and accessories for mom andbaby at affordable prices…”

2.4 The Brand

2.5 Products and Services

Fabulous Mom & Baby Boutique is a new boutique that offers awide range of premium maternity clothes and accessories;Muslimah dresses as well as baby clothing. The concept is tooffer designer products for both the mother and child in onestore. This level of convenience is not offered by anyoneelse. While there is one other store that offers upscalematernity clothing, no one offers products for both mother andchild in the same store. Some of Fabulous Mom & Baby Boutiqueproduct offerings include:

• Maternity clothes• Nursing clothes• Muslimah dresses• Women accessories• Baby clothes & accessories

After first year sales through on-line, Fabulous Mom & BabyBoutique will open our own boutique at BUSANA @ Menara MARA.The additional services to be provided are alterationsservices, special ordering which is custom made for customersand services for post natal women.

Our Boutique is strategically located at BUSANA MARA, situatedalong Jalan Tuanku Abdul Rahman in the hub of Malaysianfavourite fashion district. BUSANA breathe new life to a moresophisticated shopping experience while elevating theMalaysian brand supremacy status. Busana is the pinnacle ofMARA’s effort to provide a platform and elevation forentrepreneurs to escalade their businesses around the Golden

Triangle of Kuala Lumpur and it is the first Muslimah FashionCentre in Malaysia.

3.0 MANAGEMENT TEAM AND COMPANY STRUCTURE

3.1 Management Team

Fabulous Mom & Baby Boutique was formed as a partnershipbusiness. For a start, both partners will run the businesstogether and start looking for extra team members as abusiness grows. Having a strong and effective managementteam in place is essential for the growth and success ofany company. As the founder of a small business, werealize that we cannot do everything on our own, and wewill need a skilled group of experts who can help us runthe company. Build a management team by assessing whichskills and talents we need, recruiting leaders to workwith us and giving them the authority and flexibility to

make decisions for our business. This is the overallplanning of our business management.

3.2 Proposed Organisational Structure:

From the above chart, Fabulous Mom & Baby Boutique willhave 6 employees including the business partners for astart.

Fabulous Moms & Baby Boutique has identified the followingpeople or positions that will be needed to smoothlyoperate the business:

Laila & Aziah – For a start, as a partner, they will havea wide range of responsibilities including: purchasing,training and hiring, customer service, some accounting,and whatever else may come up. The task will be dividedbased on their background, experiences and expertise.

Job Description

A) General Manager To plan and control the business activities. To achieve business objective and goals. To ensure all policies are fully understood bysubordinates and implementation of the policies.

Responsible for all the activities of business.

General Manager(LAILA)

Financial & Administration

Manager(AZIAH)

Financial & Administration

Assistant(1)

Sales & Marketing Manager (LAILA)

Sales Assistant(1)

Production Manager/Designer

(1)

Tailor (1)

Identify and implement objective, strategies andmanage the business effectively.

Decision maker. To operate business strategies effectively.

B) Finance & Administration Manager Analysis finance of the business and control thesources of financing effectively.

To record and manage all document and bills thatrelated to financial scope, as it could be evidenceand update companies account.

Analysis business profit and prepare annual financialreport of the business. Make sure that financialposition of the companies is stable

Responsible to minimize the cost incurred inadministrative aspect.

Ensure facilities and utilities of business areenough, safe and comfortable.

Take care about employees’ welfare. To coordinate administration task, to plan and controlbusiness activities, to achieve business objective andgoals.

To operate business strategies effectively.

C) Sales and Marketing Manager To ensure that the plan of target market in marketingstrategies is effective and efficient.

To implement strategies in marketing plan. To identify companies strengths and weaknesses inmarketing aspect.

To fulfil the demand and supply of the market. To make promotion of the business. To identify and forecast market competitors. To make monthly and annually forecasting sales ofcompanies.

D) Operational Manager To make sure the operational tools are in good

condition. To implement the demand and supply similar to the

market. To produce high quality goods/product.

To ensure the subordinates know their tasks and followthe particular schedule.

Responsible in managing the business operation. To make sure that the operational expenses not exceedthe budget and make profit to the business.

E) Financial & Admin Assistant To help financial manager to prepare accounts payableand receivable functions

To help administration manager to manageadministration in business.

Assist financial manager and admin manager to performtheir duties.

F) Sales Assistant Managing retail outlet daily operations which includessales, promotions, inventory management, cashingduties, etc 

Provide excellent customer service  Well organized and attentive to detail  To assist customers with product knowledge &selection 

Maintain cleanliness and other related duties  Will be involved in special sales events, promotionsor marketing activities 

G) Designer Creating/visualizing an idea and producing a design Keeping up to date with emerging fashion trends aswell as general trends relating to fabrics, coloursand shapes.

Planning and developing ranges. Working with others in the design team, such as buyersand forecasters, to develop products to meet a brief.

Liaising closely with sales, buying and productionteams on an ongoing basis to ensure the item suits thecustomer, market and price points

Sourcing, selecting and buying fabrics, trims,fastenings and embellishments.

H) Tailor

To cut and sew the clothes that has been design by thedesigner.

To make an alteration to the clothes as per customerrequested.

3.3 Employees Incentive

a) Office Hour We have decided that our boutique will open or operatefrom 10.00 am until 8.00 pm. Working days are 7 daysper week from Monday until Sunday.

b) BonusWe will prepare and give bonus to our employees in the

third year of operation.

c) EPFWe contribute to EPF as much as 13% per month fromemployee’s remuneration.

d) SOCSOWe also contribute to SOSCO 1.5 % per month fromemployee’s salary for the employee’s whose income isless than RM 2000 per month.

d) Paid leaveAll employees entitle to enjoy their annual leave 16 days per year. Other than that, they will be allowed to have MC if they have bad illness maximum 10 days a year. If they have MC, their wages is still given as normal day work.

3.4 Remuneration Schedule

Position No. MonthlySalary (RM)

EPF(13%)

SOCSO(1.5%)

Total(RM)

General ManagerCum Sales and Marketing Manager

1 3,500.00 455.00 52.50 4,007.50

Finance & Administration Manager

1 3,000.00 390.00 45.00 3,435.00

Production Manager

1 2,500.00 325.00 37.50 2,862.50

Financial & Admin Assistant

1 1,200.00 156.00 18.00 1,374.00

Sales Assistant 1 900.00 117.00 13.50 1,030.50Tailor 1 1,500.00 195.00 22.50 1,717.50TOTAL 6 12,600.00 1,638.0

0189.00 14,427.00

4.0 MARKET ANALYSIS

4.1 Overview of Islamic Fashion and Market

Islamic fashion trend nowadays give a big impact towardIslamic fashion industry. In Malaysia, we can see thistrend really affect consumer to spend more for fashionapparels. We can say this trend is a good step to changepeople to have a better value of life. When we talk aboutfashion, most of it related to women. Men do love fashionbut not as power like women purchasing power. There are alot of company in Malaysia who produce Islamic fashionapparels to fulfil the demand of customers. Most of theplayer in this industry try their best to follow thetrending where customers prefer to choose somethingdifferent from others, simple, colourful but decent. 

Malaysia is the one of the country that the Muslim fashionindustry is fast developing. In 2015, Milan Fashion Weekhas invited Malaysia’s Islamic Fashion Festival (IFF) toshowcase its designers. Started six years ago under thepatronage of Malaysia’s First Lady, the IFF has alreadyvisited Abu Dhabi, Astana, Dubai, Jakarta, Monte Carlo,New York, Singapore, Bandung and London.

Combining love of fashion with the desire to uphold thetenets of faith in Islam would be the wish of young andaffordable Muslim women. This would be the opportunitythat lies to open up an underserved segment and meet agenuine untapped need.

The internet has proved to be a boon to these consumers –who are tech savvy. Most entrepreneurs are turning to

online retail as a way to reach out and market products.As consumers, the internet gives them wider geographicreach to producers of goods that embody the modest valuesthey are after, modest values which are shared by a globalbody of fashion-conscious Muslim women.

According to the State of the Global Islamic Economy 2013Report, Muslim consumer expenditure in the clothing /fashion sector will soar to $322 billion by 2018, from anestimated $224 billion in 2012. This represents thepotential Islamic values inspired ‘modest’ clothing marketfor Muslims worldwide.

4.2 Market SegmentationMarket segmentation is the process of definingand subdividing a large homogenous market into clearlyidentifiable segments having similar needs, wants,or demand characteristics. Its objective is to design a marketing   mix  that precisely matchesthe expectations of customers in the targeted segment.

Four basic factors that affect market segmentation areclear identification of the segment, measurability of itseffective size, its accessibility through promotionalefforts, and its appropriateness to the policies andresources of the company.

Our market segmentation can be divided into threesegments; the online market segment and demographicsegment and psychographic segment.

i. Online Shopping Size

Malaysia's online shopping market size was RM 1.8 billionin 2010, estimated to be RM 5 billion in 2014. The e-commerce market size is around RM 2-3 billion for 2013.

70% of the total online shopping spend came from themiddle income and above groups (RM 4,000 and above). Outof the RM 1.8 billion, RM 825 million or more was spenton local websites, local merchants.

Based on the above table, some interesting facts whethershopping is done on local or overseas websites are:i. Malaysians purchased nearly 2.5 times as much airline

tickets from local websites (RM 173 million) comparedto overseas websites (RM 72 million).

ii. Financial products / services (RM 78 million) andhealth / beauty products (RM 29 million) are mainlypurchased on local websites

iii. Online purchases for clothing / shoes / accessoriesare slightly more on local websites (RM 48 million)compared to overseas websites (RM 41 million).

iv. Nearly twice as much spent online for books onoverseas websites (RM 63 million) compared to localwebsites (RM 36 million).

v. Nearly twice as much is spent online for movie /music / game download on overseas websites (RM 51million) compared to local websites (RM 27 million).

Malaysian Online Purchase Trend

Based on the above table, it is found that 10% of the on-line sales are from fashion and beauty. The 10% value isworth RM181 M.

This statistics shows that the on-line market for apparelindustry is a popular segment for Malaysian. If thecompany tap only 0.5% from this sales opportunity, thecompany can gain sales up to RM905,000.00 per year.

ii. Demographic Segment

The primary Fabulous Mom & Baby Boutique customer is aprofessional woman with a household income over RM 30,000.Her main characteristics are listed below:• Professional woman (ages 25-40 years)• Household income over RM 30,000.00• College-educated• Lives in a middle to higher income neighbourhood

The company target market focused on the population ofWilayah Persekutuan Kuala Lumpur (not included Selangor)based on 2012 data from Jabatan Perangkaan Malaysia.

Total population of Kuala Lumpur = 1,710,000

Malay = 40% x 1,710,000= 684,000

Woman = 45% x 684,000= 307,800

Woman (aged 25 - 40) = 25% x 307,800= 76,950

Estimate of woman buy from our boutique = 5% x 76,950= 3,847

The company estimate of target market in Kuala Lumpur areaas 3,000 people as there maybe woman who doesn't buyMuslimah style blouse/dress, not inclusive of the frequentbuyer.

iii. Psychographics Segment

• Willing to spend money on quality• She wants to look her best because she wants to feelgood about herself as well as make a good impressionfrom others

4.3 Competitor Analysis

Fabulous Mom & Baby Boutique has stiff local competitionwith the many wonderful boutiques in Selangor and KualaLumpur. Direct competitors include those boutiques thatcarry the same products. They are Mumdreams Boutique andDynas Nursing Attire. Indirect competitors are thoseboutiques in Selangor and Kuala Lumpur that focus on adifferent target market or do not carry lines thatFabulous Mom will carry, in addition to well-knownboutiques in other areas.

Mumdreams Boutique and Dynas Nursing Attire are consideredthe main competitor for Fabulous Mom & Baby Boutique. Thefollowing is a comparative analysis of both companies.

Companies Strength WeaknessesMumDreamsBoutique

1. Has been established since2000

2. Has 3 branches3. Has their own loyal customer

4. friendly owner and staff

5. Updated Muslimah style fashion

1. Limited sizes2. Not provide

alterationservice

Dynas Nursing Attire

1.Very exclusive boutique

2.Owned by very allknown celebrity

3.The owner is fashionable and knowledgeable

4.Updated modern style fashion – cater for muslim and non-muslim

5.Sleek and modern interior

1.Limited sizes2.Not provide

alterationService

3. Not focus onMuslimah style

4.4 Future Products and Services

Mom’s Segment Baby’s Segment Services for post

natal Lactation Consultancy Custom made Mom & Baby

Match

Other than baby wears such as baby tram, baby’s feeding bottles, baby’s toy.

4.5 Revenue Drivers and Profit Margins

There are four fundamental drivers of revenue for FabulousMom & Baby Boutique business. They are customers, price ofour products or services, frequency of purchase andaverage transaction size.

i. CustomersCustomers are the most important people in driving ourbusiness. Without them, our revenue comes to a grindinghalt. To positively impact this factor to our business,the company will keep our customers happy and loyal bymaking ongoing customer relationship program. From theprogramme, we will know the level of customersatisfaction and loyalty. One approach to assureprosperity is "relationship with our fellow beings" andthe most important people, after the employees, are thecustomers. The most successful businesses arepassionate about serving their customers by keepingthem, listening to them, providing them exceptionalvalue, helping them become the firm's champions, andattracting more of them.

To build relationship with our customer, we will makecreative marketing approaches such as newsletters,brochures, websites, trade shows, and mail campaigns.These will build relationships or generate revenue. Wewill build up interactive online web page to interactactively with our customers.

ii. Price of the Products and Services

Often firms believe that in challenging times, the onlyalternative is lowering price. But the company willincrease the perceived value of what customers arereceiving in exchange for the price they pay bymaintaining our quality of the products and services.When the quality is maintained, we can keep loyalcustomers and may even be able to increase price.

iii. Frequency of PurchaseTo encourage customers to buy more often, we will finda powerful new application of our product and serviceto accelerate the use-up rate. The best way is to comeout with new design frequently with limited editionstock. With that, customer will come more frequent andalways alert with our coming new design.

Cashback Techniques Refer a friend ProgramCash back in the form ofgift cards or vouchers suchas “Free RM10 voucher onyour next purchase when youspend RM100” can reallyboost sales and repeatpurchases. We will alsobuild partnerships withother companies which allowgift cards or vouchers tobe redeemed at severalbusiness partners.

This program is reallygood at increasing siteconversion. If a userrefers a friend they getcash back usually in theform of a voucher and thecompany gets a new sale.

iv. Average Transaction SizeThe larger the quantity a customer buys, the higher ourrevenues. To stimulate larger order sizes we willpromote by introducing these approach:

Strategies

Description

Bundles &SavingPacks

Bundles are about providing the user with abargain for multiple complementaryproducts and to increase the amount spent inone order. Allow the customer to personalisetheir bundles. For example have a mix andmatch option providing the customer with theability to choose and select exactly whatthey want. For example, when the customer

choose a maternity or nursing dress, thedress will have complementary products suchas scarf, baby/kids matched dress andaccessories. Instead of the customer goingto our boutique to buy her dress, we couldjust pair their dress with other complementproducts and bundle them together as savingpackages.

Free Delivery Thresholds

For most retailers, free delivery can bequite a difficult challenge financially.Setting free delivery over a certainthreshold can solve this problem. For ouron-line business, if we notice that customeralways spend around RM100 and if deliverycosts us RM10.00, then we will try tosetting free delivery at RM120. For this towork effectively, we need to display therequired amount needed to get free delivery.For example, if a customer adds a dress totheir basket worth RM100 then we will show amessage such as: “spend another RM20 to getfree delivery”. Then combine this withrelevant upsells and cross sells that helptake the customer basket to the freedelivery amount and we will see an increasein our transaction size.

Displaying CostSavings

Revealing the cost savings on a product whena customer buys more than 1 item can boostaverage order value as there is an incentiveto save when purchasing in bulk e.gBuy More Save More

1 RM16.452 RM16.003+ RM15.80

5.0 MARKETING PLAN

5.1 Overall Marketing Strategy

Fabulous Mom & Baby Boutique intends to maintain anextensive marketing campaign that will ensure maximum

visibility for the business in its targeted market. Belowis an overview of the marketing strategies and objectivesof the company.

Marketing objectives:

•      Develop an online presence by developing websiteand actively promote in social media platform such asFacebook, Tweeter and Instagram.

•      Implement a local campaign with the companytargeted market via the use of flyers, woman, familyand parenting magazine and also word of mouthadvertising.

•     Promote personal communication via WhatsApp’s

Fabulous Mom & Baby Boutique’s marketing strategy is basedon the following:

      Product differentiation in terms of performancequality. All Fabulous Mom & Baby Boutique’s productsare high quality (fine materials & workmanship).Product differentiation also focus on conformancequality that applying the concept of customization.

     Building a relationship-oriented business where wewill treat our competitors as a partner.

     Fostering educating Muslimah on Syariah complianceattire without having to sacrifice style and beauty

Fabulous Mom & Baby Boutique intends on using a numberof marketing strategies that will allow the boutique toeasily target expecting woman and families within thetarget market.

5.2 Product, Price, Promotion and Distribution

Product

Fabulous Mom & Baby Boutique is a new boutique that offersa wide range of Muslimah maternity and nursing clothes aswell as baby clothing and accessories. The concept is tooffer exclusive product for both the mother and baby in

one store. There are three categories main productsoffered by Fabulous Mom & Baby Boutique as below:

Product For Mother

Fabulous Mom & Baby Boutique will carry Fabulous4u brandsthat offer designer maternity and nursing clothes andwomen accessories as well. Fabulous Mom & Baby Boutique iscommitted in designing modest maternity and nursingclothing with two words in mind - Labuh (Long) and Longgar(Loose). We know it well that modern Muslimah woman wantsto dress modestly, without having to sacrifice style andbeauty, so we set out to create attire for Muslimah(Mother or mother-to-be) that is not only modest, but alsocomfortable and at affordable price. Fabulous Mom & BabyBoutique’s product offerings are includes:

Maternity Clothes Nursing Jubah/Dress/Kurung Scarf/ Tudung / Shawl Women accessories such as brooch,

Product for Baby

Fabulous Mom & Baby Boutique will specialize in theretailing of baby oriented apparels and accessories. Thisboutique will make available a large line of baby clothesand accessories from a number of brand name suppliers.This segment will focus on toddlers and infants clothesaged between days old and four years old.The range of baby’s products included:

Leggings Pyjamas Pants T-shirt and tops

Niche Product

Matching mother and baby has always been an excellent wayfor a parent to connect with a baby in a different way.Therefore, Fabulous Mom & Baby Boutique will offer its

product niche that is Mom & Baby Match concept. This isexclusive collection by Fabulous4u where we will try tomatch mom and baby wears in a concept of either colourmatch, design match, fabric match or a combination of theabove. This range of product will be a signature forFabulous4u label. If they a looking for a great gift for Momand her new born, Fabulous4u is a right choice and have ahuge selection of collections.

Price

Parents in Malaysia are rather brand-conscious whenchoosing baby and child-specific products, because theyare more confident using branded products instead ofunbranded or even private label products. Hence, parentsin Malaysia were generally price-insensitive when it cameto the purchase of branded baby and child-specificproducts in Malaysia in 2012. Despite consumers spendingwisely and cautiously in the review period, Malaysianswere still willing to spend on baby and child-specificproducts regardless of their price, since they perceivebaby and child-specific products to be important to theirchildren.

Fabulous Mom & Baby Boutique’s pricing strategy is dividedinto three categories of product:

b) Baby’ Productc) Maternity & Nursing Productd) Mom & Baby Match

Fabulous Mom & Baby Boutique’s pricing strategy remainscompetitive with all other high quality mom & babyboutique, but offers much more in terms of meeting thecompany's mission and purpose for existing. For pricingstrategy, Fabulous Mom & Baby Boutique will implement markup on cost strategy. It is involves adding a pre-determined profit margin to the cost of the products. Themarkup therefore should be enough to cover any costs andexpenses, or even reductions, anticipated or not, and canstill deliver a satisfactory profit. There will bedifferent mark ups for different product lines.

As a general rule of thumb, 50% of each garment's cost isconsumed in actual manufacturing, divided among labour andmaterials. The other 50% is allocated overhead and otherexpenses. Average mark-up is 80% to 200% of cost dependson the items as mentioned previously. At Fabulous Mom &Baby Boutique, we are committed to bringing high qualitymaternity, nursing & baby wears and the price will reflecta range of mid-to-high pricing. Fabulous Mom & BabyBoutique will regularly monitor its operating expenses,delivery costs, cost of sales, trade discounts offered,damage allowance, hazards, and other variables to ensurethat the company's pricing strategy remains competitivewith industry standards and expectations.

Average Products’ Price And Profit Margin

ITEM AVERAGE SALESPRICE

PROFIT MARGIN

Maternity Blouse/ Dress RM 89 – RM 259 80% - 200%Nursing Blouse/Dress RM 159 – RM 259 80% - 200%Baby & Kids Wear RM 30 – RM 80 40%Mom & Baby Matched (1 set)

RM299 80% - 200%

Women Accessories RM 30 – RM 120 40%

Promotion

Fabulous Mom & Baby Boutique uses in-store productpresentation, increased merchandising and marketingefforts in order to position their products for success.Promotional pricing can be used in order to remove unsolditems from store shelves if necessary to do so. Thefollowing promotional tactics for generating buzz andawareness about Fabulous4u will be implemented:

Personal SellingFabulous Mom & Baby Boutique will use personal selling andword of mouth via network of friends, stylists andcustomers.

Display in storefrontUnique visual display in storefront on weekly basis can beconsidered as one of promotional effort by Fabulous Mom &

Baby Boutique. Display different designs on mannequins inattractive ways and style.

Boutique email newsletterFabulous Mom & Baby Boutiques' e-mail campaign will extendthe company's marketing reach and visibility with minimalresource allocation. As Fabulous Mon & Baby Boutiquebuilds its customer database, it will gather e-mailaddresses with opt-in permission to contact currentcustomers and prospective customers via e-mail and otherelectronic means. Many of the benefits of a direct e-mailadvertising campaign include:

- Great Direct Response Vehicle: If the customer isreceiving the e-mail, the customer has alreadydemonstrated his/her interest in the content they arereceiving.

- Timely: E-Mail is the perfect tool for targetingspecific dates.

- Placement: Fabulous Mom & Baby Boutiques' advertisingwill have little competition.

Direct mail

Direct mail such as postcard notices that are targetedspecifically to the customer. Fabulous Mom & Baby willexplore the benefits of incremental, coordinated, directmail campaigns which ensure that the company's advertisingis:

- Targetable: When using direct mail, eachcustomer is carefully selected. This enablesFabulous Mom & Baby Boutique to "speak" to thecustomer in their own language and about theirindividual needs. In addition, the company cantime its direct mail efforts to coincide withcritical points in the customer's buying cycle.

- Efficiency: Direct mail ensures that Mom &Baby Boutique knows that every dollar spent isbeing directed at people who are genuineprospects for the company's products.

- Flexible: Direct mail is capable of handling avariety of advertising or marketing tasks. Inaddition to being able to sell directly, it is amedium that can deliver a sample right to thecustomer regardless of whether the sample is anactual product or a demonstration of a product.

Magazines

Industry magazines and newsletters are considered to beeffective advertising media because they consistentlyreach the company's target markets. Because magazines andnewsletters are tangible media, they help advertisersrelate intangibles, such as believability, quality, andprestige. Pa&Ma, Wanita and Harmoni are some of magazinesthat suitable to put our advertisement.

Trade Shows/Trade Fairs – Fabulous Mom & Baby Boutiquewill actively participate in industry and Chamber ofCommerce trade shows to promote the company's products.By taking advantage of trade show participation, thecompany enhances its opportunities to learn, grow, andconnect with potential clients and other businesses in theapparel industry. Trade Shows/Fairs are a marketing toolfor communication promoting dialogue between retailers andmanufacturers and will allow the company to exploit itsunique clothing line to a concentrated group of buyers.For example, we will participate in Maternity & ChildrenExpo organised by The Concept Exhibition (M) Sdn. Bhd andMom & Baby Expo that organised by Today Publishing as anyearly event of promotional activities of the company.

Fabulous Mom & Baby Boutique’s web site, blog, Facebook &Instagram

The Internet has become another tremendous advantage tothe company.  With the Internet, its customers can getupdated and almost instantaneous information about thelatest design and offers by company.  Therefore, FabulousMom & Baby Boutique must develop great e-commerce website

and blog in order to get better interface with itscustomers. Having an ecommerce website can be a greatcompetitive advantage for its business. E-commercewebsites have the ability to distribute, sell, or buygoods or services online through the transfer for fundswith electronic networks or communications.

The main benefits to having this type of site is that itcan open up an online store with relative ease and avoidsome of the overhead costs of a physical store location.This is what Fabulous Mom & Baby Boutique plans for itfirst year of operation. It is accessible to clients 24 X7, all over the world. This expands its geographical andcustomer reach. The most important this is to choose theright and very user-friendly online catalogue software,enabling its customers to easily find and purchase exactlywhat they’re looking for.

Other than that, Fabulous Mom & Baby Boutique willactively interact with its customers via social media suchas Facebook and Instagram. Having an interactivecommunication will help company to deliver the informationto customers and able to display products, promotions,sales and real-time data on its products. Allowingcustomers to shop for the convenience and comfort of theirown homes at any time of the day or night can increase itssales and potentially its profits while decreasing costsfor the business. It is also able to increase product andbrand awareness, as well as increasing customer loyalty.The possibilities are endless, and it is a good idea toleverage an online store to increase its business andcustomer database. Distribution

Distribution Strategy

Fabulous Mom & Baby Boutique sell clothing and accessoriesthrough brick-and-mortar stores and websites/online storein social media. Unlike larger department stores andclothing retailers, boutiques concept generally serve anarrow target market with niche clothing products, relying

on long-term loyalty from their target customers forsuccess. Therefore, effective marketing plans for thisboutique focus on defining a profitable target customergroup and centering all marketing decisions on a singleniche.

The primary distribution channel for this boutique isusing online method for the first year of operation andwill be extended to having physical store in the secondyear operated.

Fabulous Mom & Baby Boutique has several potential methodsof penetrating the market. They are, from least resource-intensive to most resource intensive: 1. Sell directly to online stores 2. Present the company's merchandise at trade shows or

hire a sales representative.3. Open a store.Fabulous Mom & Baby Boutique will begin with options 1 and2, above, and open a store in a second year when we havethe available resources and growth to warrant it. Fornow, the company plans to use a drop ship agents and theInternet to reach its target markets. These channels aremost appropriate because of time to market, reducedcapital requirements, and fast access to establisheddistribution channels.

5.3 Positioning Statement

For mom, women, and parents seeking clothing with style,selection, differentiation, and "substance," Fabulous Mom& Baby Boutique offers a unique clothing line that isaffordable, trendy, exclusive, and fashionable whilemeeting both the physical and emotional needs of theconsumer.

Sales Process (Cycle)

Fabulous Mom & Baby Boutique consider sales cycle as animportant element in its business planning in order toensure our product will reach to customer efficiently.

There are two types of sales process that we have tofocus.

Online Sales Process

Platforms : Facebook, Instagram, Website and Blog

Potential buyer: Woman / Parents who is tech savvy and hasa vast knowledge of online marketing and sales, but alsohas a keen eye for fashion.Below is a sales process activity of order processing.Requested order from customer will be a start of theactivity. After order is accepted and all requiredinformation is filled in, payment is accepted and order isshipped. Customer feedback will be the last process inthis flow and we consider it as an important element inorder to improve our sales services.

Boutique Sales Process

5.4 Sales Tactics / Strategy

The company has developed a strategy that will ensure thelong-term growth and success of Fabulous Mom & BabyBoutique in this industry. This strategy will continue toevolve and initially includes: Focusing on target markets and aggressively marketing

the full-range of collection Differentiating the company's products through

exclusiveness and brand awareness, thereby fulfillingthe promise of "Fabulous4u”

Developing partnerships with both industry leaders andcompetitors. In this manner, the company canneutralize its competitors by treating them as allies.

Building a relationship-oriented business that fosterslong-term seller/customer relationships, not "single-transaction" deals.

Fabulous Mom & Baby’s Boutique's sales team will be taskedwith generating sales leads on a local, regional, andnational basis. They will also be responsible forestablishing connections with other wholesaler and retailoutlets.

A key factor in the success of Fabulous Mom & Baby’sBoutique will be its distribution. The company plans touse the following retail distribution channels: Online Store Drop ship Agents Boutique

Customer comes to boutique

Customer

survey

Customer

Choose

Customer buy

Customer Fit the

clothes

Customer Pay

YesNo

Start

The distribution channel that has received the most attention recently is the Internet. Consumers like the convenience of being able to shop from anywhere and at anytime they wish. With the technological advances in hardware, software, and data pipelines in the, shopping online gain popularity nowadays and in future.

6.0 DESIGN AND DEVELOPMENT PLAN

6.1 Design and development plan

Design and development plan section is one of importantelement that Fabulous Mom & Baby’s Boutique focuses on. Inthis section we will provide a description of theproduct's design, chart its development within the contextof production, marketing and the company itself, andcreate a development budget that will enable the companyto reach its goals. We have divided this segment into two

categories based on products that is mom’s segment(nursing & maternity clothes) and baby’s segment.

6.2 Mom Segment

Proposed Capacity

Product: Nursing & Maternity Dress/ClothesThe boutique business capacity for nursing & maternitydress/clothes is greatly dependent on the market size andthe number of potential customer that we estimatedearlier. Furthermore, these clothes will be designed byour designer and then sewed through in-house productiondepartment. On average, a designer can supply twentydesigns per month from which nearly ten designs areselected on average. Our tailor is responsible to sew theprototype of the product to be sent to the bulk sewingoperator as a sample. Approximately, total capacity of theproduction department with 1 sewing machine will be about10-15 dresses per month. For mass production will be doneby the bulk sewing operator.

The break-up of the total number of nursing blouse anddresses will be as follows:

Items DescriptionTotal design selected by management 10 designsNumber of dresses in each design (S, M, L,XL, XXL, XXXL)

5 unit per size

Number of dresses in each design 30 unitTotal nursing dresses 300 unit per

production

The break-up of the total number of maternity collection(inclusive of blouse, dress, cardigan, pants and skirt)will be as follows:

Items DescriptionTotal design selected by designer 10 designsNumber of dresses in each size (S, M, L,XL, XXL,XXL)

5 unit per size

Number of dresses in each design 30 unitTotal maternity dresses 300 unit per

production

This production and sales capacity is estimated to be economically viable and justifies the capital as well as operational costs of the project.

Raw MaterialThe raw material required for such sort of projects, would

be as follows: Fabric

The fabric, which is the basic raw material requirementfor a boutique and a major component of the cost, can beobtained from wholesale markets or from marketsspecializing in designer cloth at Faisalabad, Karachi,and Lahore.

AccessoriesAccessories such as buttons, laces, zippers, elastics,threads, needles, embroidery threads, glasses, etc. willbe procured from the local market at competitive rates.

LabelsTags and packaging: Labels and tags can be obtained onorder, as these serve as an identity for the boutique andare useful for promotion.

Production Process FlowThe process for converting fabric in designer wear garmentsfollows the below mentioned sequence:Activities Description

Design The initial process starts from the designingphase. Various patterns of clothing and thefashions, which also relate to the tastes ofthe concerned customer, are designed. The in-house designer as does this, she will providethe basic designs of which the fabric will beconverted into the designer nursing andmaternity dress.

PatternMaking/Cutting:

Based on the designs selected, patterns forcutting are developed and based on thesepatterns, fabric is cut, block printed, andprocessed accordingly.

Stitching/sew The cutting is then followed by stitching,which will be done by the in-house stitchingunit.

Labelling Labels are also attached to the apparels in the process of stitching.

Finishing The final phase is that of finishing, in whichthe clothes will be checked for quality control and will cleaned (if required) for final presentation at the outlet. The clothes will also be tagged for identification of sizes, prices, addresses, handling instructions, etc.

Presentation/Market

Once the nursing & maternity is ready after going through the above-mentioned process, it is presented at the outlet/shop for sale to the customer.

Nursing, Maternity Dress and Mom & Baby Match

6.3 Baby’s Segment

Another segment of the company’s operations is the saleof clothing for baby /children. This boutique will carryan expansive inventory of products from many brand namemerchandisers. Recently, major branded label apparelmanufacturers such as Polo, Carter, Oshkosh and Guesshave all launched lines specifically geared for toddlersand infants. We are currently seeking to developrelationships with several wholesalers that we willcontact for infant/young child apparel and footwearproduct sourcing.

Activities DescriptionSourcing Identify supplier that able to supply

baby’s product based on the brandmentioned above.

Dealing withsuppliers

Based on the information gathered, wewill deal with the supplier. Below aresome of important items we need todiscuss:

- Brand- Quantity- Terms of credit- Delivery methods

Purchase This is the final process after we agreedwith all the terms discussed.

Presentation/Market

Once baby’s product ready after going through the above-mentioned process, it is presented at the outlet/shop for sale to the customer.

Baby’s Product

7.0 OPERATIONAL PLAN

7.1 General Approach to Operation

Hours of operation

DAY OPENING HOURMonday - Friday 10.00 am – 8.00 pmSaturday, Sunday & Public Holiday

10.00 am – 9.00 pm

Employees of Fabulous Mom & Baby’s Boutique will work for10 hours a day which is 3 hours in morning from 10.00 amto 1.00 pm and 6 hours in the evening from 2.00 pm to 8.00pm. They will work extra hour on Saturday, Sunday andpublic holiday.

LocationThe boutique will be located at Busana MARA , Menara MARAKuala Lumpur. It strategically located along Jalan TuankuAbdul Rahman in the hub of Malaysian favourite fashiondistrict.

ITEM DESCRIPTIONSSize 12’ x 28’Rental RM2,000/month

7.2 Facilities and Equipment

Opening a new clothing store can be an exciting endeavor,but it requires much planning and organization and severalpieces of equipment and facilities. Fixtures, clothingracks, shelving and other retail supplies are allnecessary to properly display items and organize theclothes so it is presentable to customers

Billboard

RacksFabulous Mom & Baby Boutique need a variety of racks anddisplays for the boutique. Clothing racks will maximizefloor space. Different types of racks include two-wayracks, four-way racks, round racks and double-bar racks.We are also plan to apply build-in concept rack where someof the rack will be build in to the wall.

SlatwallSlatwall fixtures also important to have in order to hangclothing and accessories on the walls of our boutique.They are wall panels that have evenly spaced horizontal

grooves. We plan to use these grooves to hang displayshelves and garment hooks. These fixtures save roombecause they allow you to display clothes and accessoriesaway from traffic areas.

MannequinsMannequins let potential customers know the type ofclothing we sell. Mannequins come in all shapes and size.For this boutique, we need woman and child mannequins inorder to help us to display our products. Mannequins areable to: Mannequins are used to highlight our unique collectionsof the boutique.

Mannequins display the latest trends in fashion andinfluence the customer to buy the particular merchandise.

Mannequins attract the customers into the store and thusincrease revenue and profit.

Mannequins are also responsible for up selling at theretail store.

HangersClothes hangers are a necessity for any type of clothingstore. Hangers should vary in size, shape and material.Clothes hangers that we use are from wood or padded andcovered in satin. Choose the material based on the type ofclothes you sell. We have to use high-quality woodenhangers to display more expensive items such as thecollection of Mom & Baby Match. It will reflect theexclusiveness of the products.

Packing SuppliesPacking supplies include shopping bags and gift boxes andare available in different colors, sizes and designs. Wewill also customize our supplies to display our Boutique’slogo.

Fitting RoomWe provide comfortable fitting room for our customer for them to fit the cloth.

7.3 Boutique Layout

8.0 CHALLENGES AND RISKS

Starting a clothing store comes with the benefits of exposingcustomers to a wide array of cutting-edge clothing andaccessories. Indeed, buyers for clothing stores get the luxuryof attending some of the finest fashion shows in the world inan attempt to capture the season’s latest trends. However,opening a clothing boutique exposes the owner to severalindustry-wide risks. If these risks are not managed, theresult can be a concise and abrupt exit from the cutthroatindustry. For Fabulous Mom & Baby Boutique, we have identifieda few risks and challenges that we might face in thisbusiness.

Display Rack

Filing Cabinet Fi

tting Room

Tailor & Designer Area

Store

Casher

Mannequin

Mannequin

Mannequin

Display Rack

The assessments of the risks are refer to three aspect thatare likelihood to happen, impact and priority based on thebelow measurement.

Very Low Low Medium High Very High

8.1 Industry Risk

Trend Analysis Likelihood Impact PriorityVery High Very High Very High

Another risk of the clothing store business is trendassessment. Trends in the fashion industry are fickle,ever-changing and often elusive. We believe that to be asuccessful boutique we need to capitalizes on the latesttrends and recognizes when such trends are on the decline.For Muslimah Style attire, the trend of fashion may notmuch change in style, but we must always come out with anoutstanding design at all times. As to remain with theLabuh (Long) and Longgar (Loose) concept, it may be one ofthe challenges that we need to face in this industry. Onemisstep may result in excessive inventory, underminedcredibility and confused brand identity for the boutique.Therefore, we may avoid these mistakes by hiringexperienced designer and tailor, purchasing well-respectedbrands for baby wears and always be different in terms ofservices provided to customers. We should send ourdesigner and tailor to attend necessary training anddevelopment in order to gain competencies in their field.

BusinessLanscape/nature

Likelihood Impact PriorityVery High Medium High

The nature of the clothing industry as a whole posessignificant risks to business owners. As an owner, we mustbe willing to work late hours on weekends and perform ahost of side tasks. Owner should be involved in allactivities in business in order to ensure the businessprocess will run smoothly. As partners, we need totolerate and always support each other in all aspect

including personal matters. We believe this is the bestway for us to deal with the nature of this business.

Designs Likelihood Impact PriorityVery High Very High Very High

Copyright protection of fashion designs is currentlylimited where you can only register the design if it thedesign is unique and different from what has been offeredby market. In the fashion industry a design could be askirt with ruffles, the particular cut of a jacket or thedecorative pattern on a shirt. As for Fabulous Mom & BabyBoutique, we only focus for the designs of nursing andmaternity dresses. We do not plan to register our designfor the first three years of operation. Therefore, inorder to protect the designs, we will reduce to producethe designs in the form of tangible medium. All the designwill be saved in the form of digital copy with thepassword attached.

8.2 Business Risk

InventoryManagement

Likelihood Impact PriorityMedium High High

To operate this type of retail store and online businessat the same time, we must keep an adequate supply ofclothing on hand both for nursing and maternity clothesand baby wears as well. When customers enter the boutiquein pursuit of the latest nursing and maternity clothes orfor baby wears, they expect the merchandise to beavailable in the colour and size of their choosing.Failure to ready or purchase enough inventory results indisgruntled customers and lost sales. On the other hand,businesses that purchase too much inventory may incursteep losses by selling the excess clothing at discountprices. A second risk of having too much inventory isincurring excessive of unsold items. Therefore, we need tocarefully forecast the right stock level at a certainperiod of time in order to mitigate inventory risks.

Marketing Likelihood Impact PriorityLow Medium High

We also look for the risk in marketing strategies that weset for this business. The business must target theappropriate audience and offer items that correspond withthe demand of this audience. Additionally, we have to stayfocus on the product niche that we offered in order tosustain in this industry. Marketing and niche product arecomplement each other. We need to stake out unique marketsweet spots, those areas that resonate so strongly withtarget consumers that they are willing to pay a premiumprice, which offsets the higher production anddistribution costs associated with niche offerings. Thiscan be done by conducting internet based marketing. Thevast amount of information available on the internet hasmade this kind of niche marketing more important than everand easier to do. It is more important because all thatinformation encourages comparison shopping, puttingtremendous downward pressure on prices and profits inhighly competitive mass markets. It is also easier becauseit eliminates much of consumers' uncertainty about newniche products, since they can easily find reviews,ratings and comments on everything that hits the market.Therefore, we believe focusing more to internet marketingstrategy will avoid some risk in marketing. However, weneed to ensure that updating information will be doneregularly and promptly.

Supply chain disruptions

Likelihood Impact PriorityMedium High Very High

Normally managing supply chain risk is referring to thelikelihood of occurrence and the magnitude of impact forevery potential event that could materially disrupt acompany’s operations. Example supply-chain disruptions arepoor supplier performances that lead to supply delay.Therefore, we need to have good supply chain managementpractices, such as having the right inventory level at acertain period of time. We should have a list of supplierto rely on especially if there are a supply back off from

taking our orders instead of reliance on sole-sourcesuppliers. Therefore, we must equip ourselves with a goodsourcing skills and networking. We have identifiedsuppliers for our business as follows:

Bulk TailorsNo.

Companies MainProduct/Services

Location Capacity

1 Bling Lustre

Tailoring Products, T-shirt, Maternity dress/blouse, embroidery

Petaling Jaya, Selangor

500 pcs/Month/factory(4 factories)

2 Raadan Trading

Woman dress/blouse, man’s shirt, children apparels, modern dress, Muslimah apparels

Petaling Jaya, Selangor

10 well trained tailors fromIndia

3 Marlee Shariff Trading

Blouse, Baju Kurung & Kebaya, Maternity and Muslimah attire

Subang Jaya, Selangor

300 pcs/Month

4 Tinnie Tailor & Boutique

Woman clothes Shah Alam, Selangor

5 tailors

5 Emarat MorBoutique

Woman & Man clothing

Sungai Besi, Selangor

5 tailors

8.3 Financial Risks

Inability to control/risinginput prices

Likelihood Impact PriorityHigh High High

As refer to economist quoted that “Low margins mean thatcosts [have] major effects on profitability.” Seventy-three percent of retail respondents had focused on cuttingsales, general and administrative (SG&A) expenses, while11% had targeted costs of goods and services (COGS).Therefore, we have set our price based on mark-up to coststrategy that was 80% - 200% mark –up price (profitmargin) for maternity & nursing attires and at least 40%for baby wears in order to ensure we are manage to controlshifting in arising of production cost.

Wrong priceimage

Likelihood Impact PriorityHigh High High

Price image can often be more important in determiningsales than actual product prices. Adjusting complexpricing and branding strategies to adapt to trends such asshifting consumer behavior is therefore a constantchallenge for us in this business. In dealing with thissituation we need to ensure that the price we set will bereflected to the expected quality of products that weoffered in terms of design, materials and prestigeassociated with it. Customer will feel happy to pay theprice as to received the products same as what theyperceived.

8.4 Technical Risks

Online order management system

Likelihood Impact PriorityVery High Very High Very High

As we operated as an online boutique and offer a fewpurchasing platform such as Website, Facebook andInstagram, there are a possibility that we will receivedthe order from the same customer in the differentplatform. Therefore, in order to mitigate the risk ofdouble counting sales, we have to have a very smart systemof customer database. Every transaction in all platformsmust be recorded in same report. We will manage toidentify the double transaction from the same customer bydoing so.

9.0 OVERALL SCHEDULE

10.0 FINANCIAL PROJECTION

10.1 Financial planning is important to any business. So, thatis why the company prepare this financial planning withits main objective is to evaluate the business ability interm of financing the implementation cost of business.Financial planning is also the most factors of sources to

generate all activities in the business. Furthermore, itcan describe clearly about the return that will be earnedfrom the investment that had been made by the partners.

10.2 Financial planning is very important to the companybecause of:• To shows the cost of project implementation in order

to determine the sources of financing.• To determine the contribution of capital between

partners.• To forecast the cash flow when the business has

commenced from year one until year three to see theliquidity of the business.

• To determine the profitability of the business bypreparing the profit and loss account

• To perform the financial break even analysis to seethe whole business profitability, accuracy and futureprospects of our business.

10.3 Project Implementation Cost Schedule

i. Set-Up Costs

No. Description Cost (RM)1 Business registration 100.002 PBT Licence 300.003 Website development 5,000.004 Designer Software 2,500.005 Shop Rental Deposit 6,000.006 Utilities Deposit 2,000.00

Total Set-Up Cost 15,900.00

ii. Capital Expenditure

No. Particular Cost (RM)1 Renovation and Interior Design 20,000.002 Display System 2,000.003 Office Furniture 1,000.004 Signboard 4,000.005 Sewing Machine and accessories 3,000.006 Computer and printer 4,500.007 Telephone and fax 1,200.00

8 POS System 4,000.00Total Capital Expenditure 39,700.00

iii. Working Capital

No. Particular Cost (RM)1 Raw Materials - Fabrics 10,500.002 Stock - Women Accessories 2,000.003 Stock - Kids Wear 8,000.004 Accessories - buttons, bids etc 1,000.005 Tailor Wages (bulk) 8,500.006 Designer Incentive (free-lance) 5,000.007 Rental (3 months) 6,000.008 Salaries & Wages (3 months) 26,900.009 Transportation and Logistic (3

months)1,500.00

10 Marketing and PromotionExpenses (3 months)

3,000.00

11 Utilities (3 months) 4,000.0012 Insurance 2,000.00

Total Working Capital 78,400.00

iv. Total Project Implementation Costs

No. Description Cost (RM)1 Set up Cost 15,900.002 Capital Expenditure 39,700.003 Working Capital 78,400.004 Contingency 6,000.00

Total Project Cost 140,000.00

10.4 Source of Finance

No. Description Cost (RM)A. Equity Contribution

Lailatul Asmah Binti Mohd Tahir 25,000.00

Nor Aziah Binti Amiruddin 15,000.00Total Contribution 40,000.00

B. Term Loan (MARA) 100,000.00

Total Source of Finance 140,000.00

The project implementation costs include stock for thefirst 3 month, and are estimated at RM 21,500.00. Theowner will inject their own investments amounted to RM40,000.00 (28.5%) from the total project costs. Anadditional loan injection of RM 100,000.00 will occur infirst month of Year 1.

10.5 Projection of Income Statements

i. Proforma Cash Flow Statement - Appendix I

ii. Proforma Profit and Loss Statement - Appendix IIiii. Proforma Balance Sheet - Appendix III

iv. Other relevant tables - Appendix IV

10.6 To determine the Fabulous Mom and Baby Boutique abilityto service the proposed term loan of RM 100,000.00, thefollowing assumptions are adapted in the preparation ofthe projected Income Statement (Year 1 –Year 3):

i. The company will focus on on-line sales for the first6 months of its operation. In the first phase, theboutique will be as their gallery. The boutique willbe launched and starts its sales operation on the next6 months of Year 1.

ii. Annual gross sales are projected to grow 2% in theYear 1 to Year 2 and 5% from Year 2 to Year 3.

iii. The rental rate to increase at 10% for Year 2 andYear 3.

10.7 Cash Flow Chart and Breakeven Calculation

The company’s cash flow is fluctuated since the trend ofmaterial purchases are once for every three months. Allmaterials (fabrics), stock for kids’ wear and stock forwomen accessories will be purchase by cash. The breakeven calculation is as follows:Total Sales YI = RM 605,194.50Total Variable Cost Y1 = RM 290,639.90Total Fixed Cost Y1 = RM 142,000.00Units Sold Y1 = 4,422 units

Contribution Margin Per Unit = RM 605,194.50 -RM 290,639.90

4,422= RM71.13

Break Even Quantity = Fixed Cost CM/unit

= RM 142,000.00RM 71.13

= 1,996 units

From the above calculation, the company will breakeven when 1,996 units sold in month 8 of its operation.

10.8 Ratio AnalysisRatio Formula

Profitability M easures

ROA Net income / Total assets = 155,484.50 x 100 = 252,145.43 x 100 = 255,748.30 x 100284,334.58 514,180.17 747,628.63

= 54.68% = 49.04% = 34.21%

ROE / ROI Net income / Shareholders equity = 155,484.50 x 100 = 252,145.43 x 100 = 255,748.30 x 10040,000.00 40,000.00 40,000.00

= 388.71% = 630.36% = 639.37%

Gross Profit M argin Gross profit / Sales = 400,464.50 x 100 = 519,939.43 x 100 = 548,298.30 x 100605,194.50 793,097.43 832,752.30

= 66.17% = 65.56% = 65.84%

EBITDA EBITDA/ Sales = 159,454.50 x 100 = 256,115.43 x 100 = 259,718.30 x 100605,194.50 793,097.43 832,752.30

= 26.35% = 32.29% = 31.19%

Net Profit M argin Net Profit / Sales = 155,484.50 x 100 = 252,145.43 x 100 = 255,748.30 x 100605,194.50 793,097.43 832,752.30

= 25.69% = 31.79% = 30.71%

Activity M easuresTotal Asset Turnover Sales / Total Assets = 605,194.50 = 793,097.43 = 832,752.30

284,334.58 514,180.17 747,628.63= 2.13 x = 1.54 x = 1.11 x

Fixed Asset Turnover Sales / Fixed Assets = 605,194.50 = 793,097.43 = 832,752.3035,730.00 31,760.00 27,790.00

= 16.94 x = 24.97 x = 29.97 x

Stock Turnover COGS / Avg Inventory = 204,730.00 = 273,158.00 = 284,454.0022,750.00 25,275.00 28,150.00

= 9.00 x = 10.81 x = 10.10 x

Financial LeverageTotal Debt/Equity Total Debt/Equity = 88,850.08 = 66,550.24 = 44,250.40

40,000.00 40,000.00 40,000.00= 2.22 = 1.66 = 1.11

Debt Service Ratio Net Income = 155,484.50 x 100 Interest + Principal 111,499.12

= 139.45 %

Year 3Year 1 Year 2

i. The company ROE is based on its partner’s contribution of RM 40,000.

ii. The company should be able to sustain its Gross Profit Margin at minimum of 65% for each year.

iii. The Debt to Equity ratios indicating the relative proportion of the partners’ equity and debt used to finance its assets. The ratio shows that the ratio is improving since the ratio is declining from 2.22 in Year 1 to 1.66 in Year 2 and 1.11 in Year 3.

iv. Based on the proposed term loan RM 100,000 at 4%p.a, the computed projected DSR, 139.45% indicates thatthe repayment capacity of the company is satisfactory.