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A BUSINESS PLAN REPORT ON
FABRIC RETAIL BUSINESS
Submitted by:
SHYAMSUNDER N MULE
USN: 4JY10MBA41
Under the guidance of:
Prof. Mr.GIRISH BAGHA
Professor,
JSSCMS, Mysore.
Submitted to:
Vishweshwarayya technological university, Belgaum
in partial fulfilment of the requirements
for the award of
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for the award of
Table of ContentsExecutive summary ....................................................................................................................................... 4
Objectives ..................................................................................................................................................... 5
Company Overview ....................................................................................................................................... 5
Vision ......................................................................................................................................................... 6
Mission ...................................................................................................................................................... 6
Strengths and Core Competencies ........................................................................................................... 6
Challenges ................................................................................................................................................. 6
Company Ownership ................................................................................................................................. 6
Company Location and Facilities ............................................................................................................... 6
Product and Services ..................................................................................................................................... 7
Benefits and Features: .............................................................................................................................. 7
Why people need this service? ................................................................................................................. 7
Competitive Advantages ........................................................................................................................... 8
Start-up Summary ......................................................................................................................................... 8
Marketing Analysis ........................................................................................................................................ 8
Target customers ...................................................................................................................................... 8
Trends ....................................................................................................................................................... 8
Market Demand ........................................................................................................................................ 9
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c) Marketing Objectives ...................................................................................................................... 11
d) Strategy ........................................................................................................................................... 12
3 Sales strategy ....................................................................................................................................... 12
4 Operations ........................................................................................................................................... 12
5 Goals..................................................................................................................................................... 13
Swot Analysis .............................................................................................................................................. 13
Strengths ................................................................................................................................................. 13
Weaknesses ............................................................................................................................................ 13
Opportunities .......................................................................................................................................... 14
Threats .................................................................................................................................................... 14
Marketing Mix ............................................................................................................................................. 14
a) Product ................................................................................................................................................ 14
b) Price .................................................................................................................................................... 15
c) Place .................................................................................................................................................... 15
d) Promotion ........................................................................................................................................... 15
FINANCIES ................................................................................................................................................... 16
initial investment .................................................................................................................................... 16
Sources of funds ...................................................................................................................................... 16
Means of finance .................................................................................................................................... 16
Expected revinue .................................................................................................................................... 16
INCOME STATEMENT .............................................................................................................................. 17
CALCULATION OF CASHFLOW FROM PRESPECTIVE OF INVESTOR 18
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Executive summaryThe clothing Store will be a start-up retail men's, women's, and children's clothing
store specializing in unique clothing from other parts of the Belgaum. This
business will be a casual urban wear traditional clothing store which will be run by
the owner, it will be located at maruti galli Belgaum. This store will also have a
local market and will serve both youth and adults. Our intent is to provide the
community with unique clothing they would normally purchase outside of the city.
The fashion and retail business tends to be overly youth focused. However, by
closely following generational fashion trends as well as our own customers'
purchasing preferences, we will tailor our inventory to meet the specific needs of
our clientele. We will solely focus on the our styles, colors and fits will be our
specialty.we plan to promote our retail business with an ambitious, targeted marketing
campaign, which will include a grand opening event, local media coverage, print
advertising.
1. For establishment of Fabric Retail Business in Belgaum This feasibility has been
conducted.
2. The initial cost of the project is Rs 22230000/- including the initial capital of
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Objectives
Establish a unique clothing retail business in the city of Hartford,
Connecticut
Create jobs
Provide quality clothing and customer service at a reasonable price
Achieve the largest market share in the city for urban wear
Achieve a profit within the first year
Continually and consistently increase total number of customers per year
Increase average length of customer relationships and decrease customerturnover
Company Overview
It is a retail store for men and women wear with good quality clothing. We present
an extensive variety that are manufactured using different fabrics such as Cotton,
Silk, Wool and others. Available in a wide range of gorgeous colors, designs and
prints, these apparels are designed keeping in mind the most up-to-date fashion
trends. The Clothing Store's primary goal is to find customers and keep them
coming back.
Store will set the pace for both rural and urban fashion for all seasons. Last year's
outfit will be accessorized to be this year's outfit. People like to buy clothing pieces
and accessories to continue wearing clothing that would be out-of-date otherwise
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Vision
To be a distinguished fashions-wear retailer known worldwide for the quality of
products, setting new trends and lifestyles
Mission
To offer continuous value added products to our customers.
To accomplish this, we focus on exceptional design, innovation, quality,
convenience and interactive communication.
Strengths and Core Competencies
The foundation parameters on which we ensure the excellence of our garments are:
Material
Cut
Design conformation Embroidery
Stitching
Stability
Finish
Color fastness
Challenges
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Product and Services
For different customer groups, our variety of clothes is offered in different
customers and is tremendously comfortable to wear. Our offered clothing
collections for men and women are:Shirting
We offer an exceptional range of shirting that are offered in a multitude of
Colors and patterns.
Suitings
We make an extensive range of suiting that are offered in diverse colors and
Patterns.Saris
An exclusive range of saris
We offer a broad range of designer saris available in eye catching prints and colors.
Dress materials
An exclusive range of dress materials with heavy designing and quality materials
Benefits and Features:
Highlighted features:
- Lovely designs and prints
- Eye-catching colors
- Long-lasting Apparels- Comfortable to wear
- Available in various sizes
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Competitive Advantages
While there is no guarantee a competitor will locate within our area, we have no
doubt in our fashion sense, outstanding customer service and quality products.
Our supplier relationships and exclusive product offerings will prevent future
competitors from entering the market as a competitor. Also, it takes time to build a
retail store, and by the time a competitor attempts to compete with us directly, we
will have already established a strong customer base.
Start-up Summary
Total start-up expense (including fixtures, equipment, and grand opening) is
22230000. Startup assets required 4230000 in inventory. With the owners'
investment of 8000000, the amount of additional start-up funds needed are
14230000.
Marketing Analysis
Target customers
Clothing fabric is a business-to-consumer retail shop. Male and Female are our
clear target customers. However, we do realize that we will likely attract young
Male and Female customer. Moreover, we expect a portion of our products to catch
on with the younger generations. It's important that we do not offer products that
are exclusive to the older audience
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Market Demand
Shifting demographics made the male and female clothing business look attractive
to new entrants and, therefore, the market became tremendously competitive. Big
retail chains began to penetrate the market. Sales continued to grow. Fueling this
growth was a climb in birth rates in the late 1980s and early 1990s.
Industry sales normally peak between late August and December. Throughout thisphase, stores compete for valuable back-to-school sales and holiday gift purchases.
Stores normally generate between 50 percent of their annual sales in these
months.
Industry Life Cycle
Clothing market is at maturity stage although its generating good demand and
sales and has good scope for businesses for next few years. The higher birth rate
was observed in late 90s and early 2000s which boomed the market and now
demand is still growing but with slow birth rates as compared to past years. This
makes industry stand at maturity level in its life cycle.
Although this sector of the industry is season-driven, this cycle will not affect it
much.
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Market Potentials
Shifting demographics made the male and female cloth business attractive to new
entrants and, therefore, tremendously competitive. Sales will continue to grow inthe next 5 years:
Market Opportunities
Market is growing with a rapid rate so its a great opportunity to enter in the
market where demand is increasing drastically
Birth rate has remained high in the past 5 years meaning more potential for kids
cloth purchasing.
Country is going through recessionary period so parents are on tight budget,
which is a great opportunity for our business to offer discounts and low pricing
packages to attract our consumers
This business has conventionally been highly seasonal, as with other clothing
businesses, so spring is on the way, this is also the season for weddings and
gorgeous dresses and suits for wedding parties.
New sessions of schools will be starting in month or so.
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wide selection of fashionable, figure-flattering clothing. Our aim is to establish our
company as a pioneer in this youth-obsessed industry and build a boutique brand
name that will be synonymous with the fashion industry revolution.
2 Marketing strategy
Basic strategy of our business is to launch kids wear by the next some months.
Initially we launch normal kids wear which will cater the needs of masses.
By the end of the year, we will launch customized products to cater to the need of
every individual customer.
Later on, school accessories and school wear are also in the pipe line
a) Value Proposition
Our core value proposition is that we will add value to our product by providing
matchless male female and kids wear with extensive range of color and different
sizes in comfortable and durable fabric with easy mode of cash transactions at
comparatively low prices.
b) Branding
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d) Strategy
Meet the demands of market and supply demanded goods on time without anybarrier or hurdle
Offer excellent products at low price
Make products according to the needs of the customer
Give good hassle-free ambiance for shopping, which will help the business and
give edge over rivals
Develop a friendly store environment and decoration, which will attract
customers to bring their family in the store and shop with comfort.
3 Sales strategy
Clothing store generate sales via strategic marketing efforts. These concentratedefforts will be targeting new and returning customers as well as single-visit tourist
consumers. We will also implement a referral program rewarding customers who
refer new customers with discount coupons. Following our grand opening we will
offer promotional discounts and seasonal and clearance sales throughout the year.
Clothing store will accept cash and payment via major credit and debit cards. Cashlayaway plans will also be permitted. Returns and exchanges must take place
within 30 days of purchase and receipts are mandatory.
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5 Goals
The following is a list of business goals and milestones we wish to accomplish our
first year of operations.
Complete renovating, stocking, hiring and initial marketing.
Host a successful grand-opening event.
Penetrate and raise awareness in 60 percent our targeted consumer market.
Achieve a profit margin of 50 percent.
Build a solid customer base and mailing list.
Generate repeat and referral sales.
Become a profitable business with expansion potential.
Establish a solid reputation as quality retail establishment.
Swot Analysis
Strengths
Experience and understanding of the fashion industry
Unique shopping experience with exceptional customer service
Great downtown location
Large and growing consumer base
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Marketing expense in the start will be huge, to establish brand name required
lot of advertising
Opportunities
Outstanding shopping experience will lead to repeat business
Seasonal business: in summer demand is very high as new academic session
starts and also a wedding season
Sector is growing fast in state and in the area our business operating
Girls wear demand is huge so adding value in this category will be the great advantage
Animated movies increased the demands and popularity of printed shirtings.
Threats
Competition is high and big chains like Wall-Mart, Gap and Limited
Incorporation
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b) Price
Penetration Pricingwill be the pricing strategy for our business, as our business isnew and at the high street of Belgaum where competition is huge, so we try to givegood quality at low price to penetrate in the market and try to achieve higher sales
volume to set low price and better quality strategy. Once we achieve this objective
then try to charge higher price for our customized products for value addition
c) Place
At one of the high street of Belgaum City
d) Promotion
Advertising:1. Above The Line:
- Internet
- Radio
- Magazines ( Parents and kids magazines only)
- Newspapers ( Only Weekends for two or three weeks)
2. Below The Line:
Flyers ( through hawkers)
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FINANCIES
initial investment
Perticular Amount
Cost of materials 10000000
Building 3000000
Interior & Exterior Decoration 1000000
Furniture 1000000
Machinerys
Genarator 100000
Dit Fabric Printing Machine 700000
Dit Fabric Embrodery Machine 525000
Computerized Swetching Mach 875000
Computer 25000
Printer 5000
17230000
Land 5000000
Total 22230000
Sources of funds Means of finance
Particulars Amount Particulars Amount
Equity 8000000 FA 12230000
Long term loan 14230000 NWC 10000000
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INCOME STATEMENT
1 2 3 4 5
total Revinue 33000000 36300000 43560000 52272000 62726400
EXPENDITURE
Purchases 10000000 11000000 13200000 15840000 19008000
Salaries 1812000 1993200 2192520 2411772 2652949
Postage and Stationery 10000 10000 10000 10000 10000
Licence and other Fees(legal charges) 10000 10000 10000 10000 10000
Miscellaneous Expenses(general exp) 100000 100000 100000 100000 100000
Repairs & Maintanence 25000 27500 30250 33275 36602.5
Insurance 200000 200000 200000 200000 200000
Fuel 50000 50000 50000 50000 50000
Electricity charges 60000 66000 72600 79860 87846
Total Expenditure 12267000 13456700 15865370 18734907 22155398
EBDIT 20733000 22843300 27694630 33537093 40571002
Less. DEP 6084000 5137200 4352760 3700908 3157556
EBIT 14649000 17706100 23341870 29836185 37413446
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CALCULATION OF CASHFLOW FROM PRESPECTIVE OF INVESTOR
INV 0 Year Year 1 Year 2 Year 3 Year 4 Year 5
FA 14230000
NWC 8000000
Revenue 33000000 36300000 43560000 52272000 62726400
Total Expenditure 12267000 13456700 15865370 18734907 22155398
EBDIT 20733000 22843300 27694630 33537093 40571002
Less. DEP 6084000 5137200 4352760 3700908 3157556
EBIT 14649000 17706100 23341870 29836185 37413446Less.Int 1588681 1308423 992621.23 636768.1 235783.9
EBT 13060319 16397677 22349249 29199417 37177662
Less. Tax 30% 3918096 4919303 6704774.6 8759825 11153299
EAT 9142224 11478374 15644474 20439592 26024363
Add Depn 6084000 5137200 4352760 3700908 3157556
Net cash flow 15226224 16615574 19997234 24140500 29181920
PV @ 12% 13594842 13245834 14233636 15341724 16558605
Approx IRR
75%
pya back period
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PROJECTED BALANCE SHEET
Year 1 Year 2 Year 3 Year 4 Year 5
SOURCES OF
FUNDS :
Promotors
Fund 8000000 8000000 8000000 8000000 8000000
Reserves Total 9142224 11478374 15644474 20439592 26024363
Total
Shareholders
Funds 17142224 19478374 23644474 28439592 34024363
Secured Loans 14230000 12020201 9530143 6724285 3562572.8
less :repayment 2209799 2490057 2805859 3161712 3562696.1
Total Debt 12020201 9530143 6724285 3562572.8 -123.276
Total Liabilities 29162425 29008517 30368759 32002165 34024240
APPLICATION
OF FUNDS :
Building 2700000 2430000 2187000 1968300 1771470
land 5000000 5000000 5000000 5000000 5000000
machinery 3384000 2707200 2165760 1732608 1386086
cls stock 5000000 7500000 10000000 10000000 10000000
Bank 13078425 11371317 11015999 13301257 15866683
Total Assets 29162425 29008517 30368759 32002165 34024240