Entrepreneurship business plan

Business plan for New Venture

Denim o’ Bag

Presented by:Karina DhallRishika Gulati

Denim o’ Bag

Introduction to the venture

•Name: Denim o’ Bag

•Address: D25, 5th block, Koramangala

•Nature of business: Joint Venture

•Name of the partners: Rishika Gulati Karina Dhall

Why Denim o’ Bag

• A huge requirement for bags

• Represent their ideas and emotions through the accessories they carry

• Customization helps to create individuality among peer group

• Recyclable material

• Suitable for both the sexes

Market Segmentation

Market Analysis

Already made designs

Artwork

Already made designs 

• less expensive option

▫Ages 14-25▫69% are students▫Median individual income is 26,000▫Go out to eat 3.4 times a week▫Listen to 3.6 hours of music a week

Artwork 

• custom artwork created and placed on the bag

▫generally have the image or style in mind and will direct the artist to create it

▫Ages 24-40▫Median individual income is 42,000▫Go out to eat 2.7 times a week▫Listen to 3.3 hours of music a week▫18% are using the bag as a form of communication

for a cause or a message

Target Market Segment Strategy

•Young demographics

•Highest likelihood of purchasing a custom bag

•Located in bangalore which has a young, hip scene

Competition and Buying Patterns

The bag world 

• Local competitor specializes in handmade bags• 70% of their business is jute bags with the remaining 30%

other materials like fake leather• Minimum order of 10 with A 2-3 week lead time• Uses pre-existing designs for their bags and for custom

designs you must use their artist

Bag shack

• Local retailer is geared toward organizations or teams with production runs of 20 or more

• Rigid regarding custom work

Bag design house 

• Internet-based retailer • That primarily offers computer sublimations• Design house has a catalogue of approximately 200

images for the customer to choose from• Do not allow customers to use their own designs

Description of venture

Management

• Custom denim bag! Will be led by Karina Dhall and Rishika Gulati and is their first business venture.

Objectives

• To become known as the premier custom bags made out of used denims and jeans. 

• Achieve profitability within 12 months.

• Design and implement strict financial controls to help ensure success.

Mission

• Custom denim bags mission is to offer the finest in custom denim bags. Custom denim bags! will offer customers the best product at the best price with a lot of variety and designs. Customer's expectations will always be exceeded.

Keys to Success

• Leverage unlimited design variations in the denim bags which will offer unique features to all the customers.

• Exceed customer expectations by offering high quality products at reasonable prices with quick turnaround times.

• Employ careful financial and accounting analysis to ensure efficiency and proper controls.

Company Ownership

• Karina Dhall and Rishika Gulati are the Founders and President of Custom denim bag!

Roles and responsibility

• Both the owners of the company are equally responsible for the management of the venture which includes procurement of raw materials, sourcing of the fabrics, production planning, costing, advertising and promotion, handling of customers and another office related tasks.

Product• Custom bags

• Made of used pair of denims

• Designs and artwork as per the requirement of customers

• Environment friendly

• Unisexual

• Unlimited design options

• Different types of bags option

Personnel PlanCustomize Denim Bags will require the following personnel for

operations:

• Owner -- Business development, finance and high level accounting, customer service, bag designing

• Designer – Bag Designing/printing

• In-store retail employee -- Help customers with placing or existing orders

• Bookkeeper -- Accounts receivable and payable

• Independent design contractor -- Artist

Office Equipments

Custom denim bags! will incur the following expenses for start up:

• Two laptops -- These will be high end models and utilize the following software: Microsoft Office, Adobe Photoshop and Illustrator, Macromedia FreeHand, and QuickBooks Pro.

• Raw material – old denims, accessories for embroidery (threads, appliqués, buttons, ribbons etc.)

• Sewing machines, threads, zippers and other accessories.

• In-store computer kiosk -- This allows customers to view options for bags and existing imagery.

• Website -- This will be used for information disbursement as well as ordering

• Shelving display unit -- To display assorted bag designs on paper for easier viewing

• Broadband Internet connection

• Two desk/chair/office supplies set

• Small bags inventory -- Inventory will be kept small to lower overhead. This will be accomplished by using a bag vendor who is one shipping day away, effectively using a just-in-time (JIT) system for managing inventory

• Design unit -- To make the designs as per the customer’s requirement.

Background of Entrepreneurs

Rishika Gulati

• B.Sc. Fashion Design and Technology• MFM from NIFT Bangalore• Total work Ex. 5 months

Karina Dhall

• BSc. (Hons.) Textiles and Clothing From Delhi university• Apparel merchandising and Marketing, Pearl academy of

fashion• MFM from NIFT Bangalore• Total work Ex. 3 months

Competitive Edge• Customization of bags

• Use of old pair of denims

• Variety of design options

• Uniqueness of each bag

• Online as well as retail outlet

Production plan

Manufacturing process

• Treatment and checking of denims

• If durable enough then sent for cutting and sewing the bottom of the denim

• Check for durability and strength of the fabric

• If OK, then sent for further treatment and dyeing

• The last step is the cut out denim is sent to the warehouse and the retail outlet for carrying out the designing process

Suppliers and Raw MaterialsFabric suppliers:

• Rameshwaram fabric house – Bannergatta road, Bangalore

• Jeans firm – Jaynagar, Bangalore  Raw materials:

• Threads: Pankaj threads company – Kuddahalli, Bangalore

• Trims: Lakshmi handicrafts – Bohmanhalli, Bangalore

Marketing plan

Products and Services

• Offers customers a choice of imagery (outs or theirs) to apply to the front or back of the bag

• Use of appliqué work, thread work, embroidery, cut and paste and many other design options as per the need and requirement of the customer

• Use of durable fabrics and long lasting design

Cons

• It is not cost effective for small number production runs

• Changes made at the later stage of the production by the customers may not be feasible by the designers

Choice Of Products

•Pre-existing designs or custom artwork

•Use of extensive catalogue

•Strategic relationships with several companies that offer a wide range of designs

Products

Pricing

• Unique pricing method

• The price of the basic denim bag remains the same

• Additional price will be charged for the artwork, embellishments or any other kind of designer work on the bag

• Competitive pricing

• The starting price for basic denim pouch starts from Rs.899 till Rs.1199

• The artwork, embellishments etc. have prices starting from Rs.699 till Rs.3999

Promotion

•Use of social networking websites like Facebook, Orkut, Twitter etc

•Brochures and pamphlets distributed outside colleges and malls

•Youth events and student groups

Advertisement Budget

•Website and Catalogue - 60%

•Brochures and Pamphlets - 30%

•Word of Mouth - 10%

Strategy and Implementation

• Competitive edge to the product

• Unprecedented catalog of graphic images

• The quality of their computer generated sublimations, a function of using prototype HP sublimation technology to add aesthetic appeal to the bag

• Uniqueness of design in each bag is the USP of the business

• The marketing campaign will emphasize the ability to completely customize a bag

Competitive Edge

•Large catalog of styles 

•Quality of the Fabric 

Sales Strategy

•Ordering a bag from Custom Denim Bags will be easy and pleasing experience

•Continual development of the website

•A friendly, easy to use web interface

Other Factors To Help Boost Sales

•Exemplary customer service - provide the customer with the feeling that the business is looking out for the customer's interest

•Fastest turnaround time possible

•By offering customers a high quality product by using high grade fabric for the manufacturing and state-of-the-art technology and materials

Web Plan Summary

•Easy to navigate site through all the different options

•Computer kiosk for customers to access the designs catalog

•The customer can place the order online or take the information to an employee to place the order

Website Marketing Strategy

•The website will be integral in Customize Denim Bags it is a key sales tool for both local and distant customers

•The URL address will always be used in promotional material, encouraging people to check out the company, concept, and the products

Financial planStart Up Funding Amount

Start up expenses to fund 50000

Start up assets to fund 80000

Total funding required 130000

Assets

Non-cash Assets from Start-up 15000

Cash Requirements from Start-up 56000

Additional Cash Raised 0

Cash balance on starting date 56000

Total assets 127000

Liabilities and capital

Liabilities

Current borrowings 0

Long term liabilities 65000

Accounts payable 0

Other current liabilities 0

Total liabilities 65000

Capital

Planned investment

Karina 125000

Rishika 125000

Other investors 125000

Additional investment requirement 0

Total planned investment 375000

Loss at start-up (start up expenses) 12000

Start Up Amount

Requirements

Start-up expenses

Legal 1500

Stationary 5500

Promotion 3000

Computer equipments 70000

Rent 15000

Insurance 0

Office furniture 12500

Designer’s salary 25000

Website development 1200

Machinery and Equipments 65000

Total start up expenses 48200

Start-up assets

Cash required 60000

Start-up inventory 0

Other current assets 1500

Long term assets 5000

Total assets 66500

Total requirements 114700

Breakeven analysis• The company expects to reach its breakeven in four

year.

B/E (Q) = TFC/ SP – VC/ UNIT (marginal contribution)

• Year 1

TFC = 170200/1000 – 700 = -529.8• Year 2

TFC = 170200/1000 – 550 = -379

•Year 3 TFC = 170200/1000 – 300 = -129•Year 4 TFC = 170200/1000 – 150 = 20.2

•Therefore, with reducing the variable cost every year, the breakeven will be achieved in 4 years.

Assessment of Risk

• Copying of the similar concept

• Since the concept is new in the market, there will be no such competition at present for the same

• Will take a while for the competitors to imitate the concept

• Till then the firm would have made enough profits and established a good such that the brand will be able to get many loyal customers

THANK YOUSO MUCH FOR

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