Describe about the Business Plan for Boutique for Fashionable Clothes.
This business plan is about a fashion boutique and the name of the boutique will be New Look fashion boutique. The New Look fashion boutique is the start-up retail which will sell out the fashionable clothes to women. The New Look fashion boutique will be located in the Singapore which is the famous and popular place for the tourist destination. The primary aim of to open the boutique is to build the well-recognized brand name with the effective expansion plan. Along with this, it is the objective to focus on the online retail market also. The fashion and retail industry is very attractive for the youth so the boutique will focus on the youth. The boutique will follow modern fashion trends and focus on the preferences of the consumers. Based on the taste and preferences of the consumers, the boutique will try to meet the needs and demands of the customers by using proper inventory. The boutique will focus on the style, colours and fits for the women to meet their needs. To provide the best quality of work will be specialty of the boutique (Drummond, Ensor & Ashford, 2012).
The New Look fashion boutique will provide the combination of various clothing for women from recognized name brands. The boutique will provide the wide range of clothes from selected fashion designers. The company will use the modern fashion trend by focusing on the purchasing preferences of the customers. The company will use the inventory to meet the requirements of the customers. Women are very conscious for their clothes and fashion sense so the main products of the company will be casual wear, business clothing, formal wear and jeans. Along with this, company will also offer some accessories such as hats, belts and scarves. Profit will be gained by the sales of variety of products. The pricing structure of the company will be flexible as the company will implement the reasonable prices on the common brands. The company will use value based pricing structure which will provide customer service, quality, style and easy access of products to attract the target customers. At the end of season, sale, multi-buy savings and promotional coupons will be helpful to implement the strategies. The key message connected with the New Look fashion boutique will be classy, versatile and expensive clothing for women (Jones & Hayes, 2008).
Mission: The mission of the company is to give a new way of fashion to the consumers in the basis of style and quality.
Vision: The vision of the company is to develop the lines of fashion products for men, women and children. This fashion line will include all type of clothes that will meet the expectations and demands of the consumers.
Objective: The aim of the boutique is to differentiate itself from other boutiques by providing stylish and quality clothing products to the women. The primary objective of the company is to ensure that customers are happy with their purchasing. So the company will provide the products in all the shapes and size for women. Along with this, the company will make purchasing easy, cheap and efficient for consumers (Hoskisson, 2009).
Market and structure
The company will focus on the women for its products. The current population of Singapore is around 5,399,200 and there are 54% women if total population. So it will be easy to attract the women by providing various types of clothing that meet to the demand of the customers. There are many women who look for the clothes those are both fashionable as well as comfortable. Along with this, the company will focus on the tourists also. Singapore is the popular tourist destination for the travellers across the world. People come here to spend their vacation and they enjoy the shopping also. So, company can be able to take benefits from the tourists. Apart from this, Singapore organizes various events and fares for the travellers which bring many targeted travellers to the country every year.
The fashion boutique is the strong business in the retail fashion industry having different changing styles and changing demands of the consumers. In the past, there were megastores foe the fashion clothes and at that time customer wanted change. The customers always seek for the customer friendly experience of shopping. In present days, women are working and they seek different wears ford all purpose such as business wear, and casual wear. So the demand of the clothing will always be high in the market. Many things are changing in the clothing industry and now consumers wants to buy the clothes for all the seasons. To stay connected with the needs and requirements of the consumers, company will establish internal team to collect the feedback given by the important customers. The New Look fashion boutique will work on the strategy of ‘buy now, wear now’. It has been seen that there are many companies in the retail industry who are using domestic plant to fulfil the small orders. (Mouncey & Baker, 2009).
The New Look fashion boutique is the company having the business to consumer strategy. Females are the main target of the company. So, the company will also attract the younger women by some special products such as scarves, handbags etc. There will be products to target the young generation. In present time, customers value uniqueness, quality, services and convenience. Pricing is the important factor while consumer is taking decision to buy something. Company is planning to target female between the ages of 20 to 40. Within this group, there will be no restrictions of colour and background of the consumers. The customer of the New Look fashion boutique will be someone who will be able to pay worth price for the quality products. The target group of the company will be those women who will be able to spend the worth money for the quality clothing. There are many female consumers who are interested in buying the clothes having different patterns and designs. So, there will be easy for the New Look fashion boutique to attract its target customers by providing best quality and designs to them.
The buying behaviour of consumers plays an important role in the success or failure of a particular company, brand or product. It ensures the company that the market strategy which is adopted by the company to gain success is beneficial for the customers or not. In case of the consumer behaviour, consumers give the preferences to those products which are easily accessible for them. In case of the New Look fashion boutique, the company will try to provide those products that will match the needs or demands of the consumers in the affordable price. Because of best quality and affordable prices, customers will be easily attracted towards the clothes. The buying behaviour of the consumers is based on the prices of the products also. High prices of the clothes can distract the consumers and their buying behaviours. So, the company will set the prices of products that will meet the needs of the consumers.
Strength:
The strength of the New Look fashion boutique is that it will provide unique and different shopping experience with excellent customer services. Along with this, company will be on such location from where the products can be easily accessible by the consumers. There is more strength for the New Look fashion boutique that it has large and wide customer base because it is targeting women in its segmentation. The company has the chance to understand and experience the fashion industry because it is new in the market it will get lots of opportunities to expand its business.
Weakness:
Although it is good for the New Look fashion boutique that it is new in the industry and it may get many opportunities to learn and experience the business. But this is also weakness of the company. Fashion market is large and it is very difficult for the company to satisfy the demands of the consumers. There are established competitors in the market who are operating the business of clothes. There are also some associated with the opening of new boutique that it might be successful or not.
The company will attract the younger women by some special products such as scarves, handbags etc with clothes. The customer of the New Look fashion boutique will be someone who will be able to pay worth price for the quality products. The target group of the company will be those women who will be able to spend the worth money for the quality clothing. So, the company will try to provide those products that will match the needs or demands of the consumers in the affordable price. The company will also launch a professional and effective website from which the customers can see the products and company can sell out its clothing products across the world (Payne & Holt, 2008).
For the New Look fashion boutique, there is the need to draw unique marketing strategy from the beginning. The boutique will not only manufacture the unique clothes but also will promote the clothes with unique strategy of marketing. The company will plan to establish the partnership with the other retailers by increasing and creating brand awareness. In the marketing strategy, the company will hire a local firm that will help in making and implementing strategic marketing plan in a cost-effective manner. The marketing message, slogan and logo of the company will be able to depict the idea of generation of the boutique (Marcer, 2012).
The goal of the company is to keep the marketing budget to no more than 5% of the gross annual sale of the products. Along with this, the company will develop its connections in all the important places. The partnership with other retailers will be helpful for the company to conduct the local events and target the customers. The New Look fashion boutique is currently trying to expand the business in local community. The advertisement for the local community will include huge local print advertisement and media coverage, direct mail marketing, and different campaigns. The large amount in the budgeting plan will be allocated for the print and broadcast media (Lymbersky, 2009).
The company will conduct a grand and excited opening of the new boutique. With the help of the local firm and other retailers, the company is planning to do a grand opening of The New Look fashion boutique. The message for the opening of the boutique will be send through the different media. The print advertisements will be given in the top magazines of the country to gather the people. For the message, internet will be the best option for the company. The New Look fashion boutique is planning to launch a website also. The company will launch a professional and effective website from which the customers can see the products and company can sell out its clothing products across the world. The reason of launching the website is that in future it is assuming the best marketing channel for the company (Glowik & Smyczek, 2011). Along with this, there is one mire strategy while opening the boutique. Company will charge $100 as the entry collection at the grand opening and it will continue throughout the week. The contacts with the retailers will be used for marketing activities. The local firm will promote the opening event in the radio advertisement and local newspaper. Company will focus on low cost publicity by which it can gain advantage in the market.
The New Look fashion boutique is planning to generate sales through strategic marketing. The strategy will be for both new customers as well as single-visit tourist customers. There is the referral program for those customers who will refer new customers. Those customers will be rewarded by the company. In the grand opening, the company will plan to conduct a direct mail campaign to target the customers. Through the direct mail campaign, the company will do an in-store mailing program. The direct mails will include around 5000 coloured postcards mailers and every postcard will have 10% coupon. Along with this, the company will provide offers and discounts on the seasonal and occasional sales throughout the year. The New Look fashion boutique will accept also the payments via debit and credit cards. Then return and exchange policy will also be there. Customers can exchange and return the clothes within 30 days of seeing and receipts are must for the exchange. The company will have co-owners and 2 or 3 sales associate for selling the products. For the effective and proper sales, training will be provided to the sales associates. Training is necessary so that they can give advice to customers about the fashion trends. The members in the sales team will earn on hourly basis along with the certain percentage of commission on each sales (Schnaars, 2010).
While launching the New Look fashion boutique, the primary aim of the company is to development the brand image of the company. The brand image of the boutique will convey the message of quality, style and great shopping experience to the customers. For the success of the company, brand will play the important role to distinguish the boutique from the other retailers in the local and international market (Dentchev, 2009). For the development of the brand, the New Look fashion boutique will sell the clothing with the brand name. The company will focus the fashion trends with the preferences of the customers to develop the brand image among the customers. The aim of the boutique is to build the brand name that will be the same name of fashion in the retail industry. To develop the brand name, the company will also give the experience of shopping to the customers through online shopping (Seshadri, 2009).
The New Look fashion boutique will get competitive advantage because it is new in the industry and people will wish to buy the new designs of the clothes. There is no guarantee of the new entrants in the fashion industry, because customers are concerned about their fashion sense. By providing the quality and affordable prices, competitors can easily attract the customers. The same opportunity can be getting by the New Look fashion boutique that by the new and attractive designs, affordable rates and exclusive accessories with the clothes, it can attract the customers more than the competitors. By the outstanding customer services, company can distinguish itself from the competitors in the market. The relationship with suppliers and the other retailers, and exclusive product offering of the company will stop the new entry as the competitor in the market. At the time of new entry of competitors, the company would be established and would be able to compete with those competitors (Preble & Hoffman, 2009).
For the product development, the company will work with the other retailers of garments manufacturers and fashion designers. Along with this, company will collect all the required licenses for the business. Once the financing will be secured in the company then it will move ahead for the necessities of the business such as purchasing on inventory, office supplies and retail displays. For the grand opening of the boutique, it will take the help of other retailers industry. The product development strategy is based on the promotion with internet as the internet has become the important part of today’s life (Farahmand, 2011). So the New Look fashion boutique will focus to generate a website for the customers. The company will have unique domain name newlookfashion.com. The site will be started developing when the funds will be sufficient for developing the site. Further, the company will plan to hire some web designers for the development. The company will aim to show the clothing products at the time of opening and provide the chance to the customers to show the ability of their purchasing. After some time, the company is planning to add some more products related to fashion such as fashion magazines and newspapers, newsletters, designers’ interviews and designers advices. Basically, the New Look fashion boutique is trying to establish a community where women can gather and talk about the clothing secrets.
For the establishment in retail industry, the New Look fashion boutique will operate its business seven days in the week from 10 a.m. to 6 p.m. at the time of holidays an special occasions, the timing of the boutique will be extended. In this manner, the boutique needs around 2/3 available space of the building. The remainder space will be used stock and administrative purpose. Along with the owners of the boutique, three or four part time employees will also be hired to serve the customers. The boutique will provide the production to local manufacturers. Along with this, the boutique is planning to connect with the largest warehouse market available in that state. By purchasing the clothes from the warehouses, buyers will be able to see product display and promotional materials with the purchase. The company will hire people for regional sales representatives. Apart from this, company is also planning to conduct fashion trade shows for the women. In case of cost, to control the cost, track the inventory and to manage the stock level in the business operations, the company is planning to set the inventory control system. The inventory control system will include the bar code having related equipments and software. It is the responsibility of staff members to conduct annual audits of inventory and the company can hire auditors from outside if necessary. The accounts and finance of the company will also be maintained by the software (Joshi, 2009).
Organizational structure
The New Look fashion boutique is the small business, so the staff will also be small. The owners will have leadership role and quality and they will be responsible for daily operations of the business such as maintaining inventory, buying raw materials, marketing efforts and other administrative duties. There will be the sales staff also to help the owners to secure the sale, general maintenance of stock and inventory and assisting the customers. The management philosophy of the company will be based on mutual respect and responsibility. The environment and the structure of the company will encourage the productivity of the business (Cool, & Schendel, 2010).
The New Look fashion boutique will hire the sales staff three or four part time employees. And these positions are to be filled and to find the qualified employees is not an issue. The sales associates of the company will be paid on hourly basis. Along with this, they will get commission also. Bonus and offers will also be provided in every year by review the performance of employees annually. The work of owners will be to maintain the public relations within the fashion industry. To maintain the public relations are very important to operate the best marketing plan for the boutique (Cool & Schendel, 2010).
Estimation in regard to resources is an essential exercise as it provides management with the base for forecasting funding requirements and preparing financial projections (Shim & Siegel, 2007). In the case of New Look Fashion Boutique, which is going to engage in the business of manufacturing, marketing, and distribution of the beauty products, the resource requirement is presented as below:
|
New Look Fashion Boutique: Resource Requirements |
|
|
Resources |
Amount ($) |
|
Stores and Supplies |
50,000.00 |
|
Machinery |
500,000.00 |
|
Equipments |
200,000.00 |
|
Labor (30 workers*$3,000) |
90,000.00 |
|
Office Staff (10 officials*$10,000) |
100,000.00 |
|
Working capital |
500,000.00 |
|
Total |
1,440,000.00 |
Further, in addition to the critical resources discussed above, the company would also require posters, postcards, catalogue, brochures, calendars, and flyers. Along with this, the information technology resources comprising hardware and software would also be needed to run and control the business.
One of the crucial steps in financial planning is sourcing the fund requirement that is finding out the best possible mix of sources of funds to meet out the capital requirements (Shim & Siegel, 2007). In the case on hand, it has been projected that the business would require total funds of $1,440,000 to start up the operations. There are two possible ways to arrange funds amounting to $1,440,000 such as equity capital and borrowings from banks. The equity capital comes in as the contribution of the owners while the borrowings from banks form part of debt of the company. The financial projections in regard to the business of New Look Fashion Boutique Plc depicts that the business is quite promising and high returns could be expected in the coming 2 to 3 year’s time period.
For this business, it has been projected that the founder’s (owner’s) contribution in the form of equity will be $550,000 and the rest will be financed through borrowings. It has been projected that the business would require a term loan of $400,000 to purchase machineries and equipments. With this financing arrangement, the gearing ratio of the company for five years has been projected to be 0.95, 0.88, 0.79, 0.58, and 0.43 times (Appendix). The ratio could observed to be decreasing as the business progresses, thus, it could be inferred that the risk will reduce significantly in the upcoming years.
The financial projections for a start-up business are presented through three essential components of the financial statement such as income statement, balance sheet, and cash flow statement (Shim & Siegel, 2007). The income statement presents projections in regard income while the projections in regard to assets, liabilities, and equity are presented through balance sheet. Further, the cash flow statement presents the projections in regard to inflows and outflows of the cash for a given period of time. In respect of New Look Fashion Boutique Plc, the financial projections have been made by preparing income statement, balance sheet, and the cash flow statement for a period of five years (Appedix-2).
The profitability as depicted in the income statement shows that the business is quite promising. In the first year of operations, it is expected to generate a net profit of $206,500 with a net margin ratio of 16.01% (Appendix-2). The profitability is expected to further increase in the year 2017 to $386,330 and to reach at $608,672 till the end of 2020. It could be observed that the profitability of the company is expected to increase three fold in a time period of 5 years. Further, the balance sheet figures shows that the total assets at the time of start of the business will be $1,440,000 which is expected to increase to 2,744,000 in the given time period of 5 years. The increase in total assets will be dominated by current assets (Appendix-2).
In regard to the cash flow projections, it has been budgeted that the company will have cash amounting to $86,200 at the end of first year of operations (Appendix-2). The cash will increase with the increase in sales and profitability of the business gradually over the time frame of 5 years. It has been projected that by the end of 2020, the company will have cash amounting to $1,159,507.85 (Appendix-2).
The aim of the New Look fashion boutique is to provide best quality clothes to the women at the affordable prices. But the company should not forget the risks associated with the starting of the business. There are many risks with the new business operations. Opening the clothing boutique can create the risks for the owners (Lee, 2009).
There can be many risks associated with the New Look fashion boutique while starting the business in the retail industry. The risk can be related to inventory management, trend, marketing and business. Without proper inventory management, the boutique cannot be able to provide good products to the customers. If the company stocks too much inventory, then company will face loss. There is another risk related to the trend that in the fashion industry, the trends of the fashion are continuously changing. The company must have to change its trends with the changing environment. One wrong step can decrease the brand image of the company. There may be one more risk and that is related to the marketing strategies. A clothing business must have the clear marketing tactics so target the right customers.
To avoid the risk, there is the need to adopt proper strategy in the market. There can be many risks while a company is going to operate the business in the market. To minimize the risk related to inventory, the New Look fashion boutique can use the inventory management software so that company can be able to track the inventory and will be able to order the right inventory on time. Along with this, the company should update itself about the changing preferences and demands of the consumers. By the merger and acquisitions, and relations with other retailers, the company will be able reduce the operational risk in the market.
From the above business plan, it has been seen that the primary aim of to open the boutique is to build the well-recognized brand name with the effective expansion plan. The boutique is new in the market so it has to set some key stones for the success of the business. The goal of the company is to keep the marketing budget to no more than 5% of the gross annual sale of the products. Along with this, the company will develop its connections in all the important places. With this, the company is expecting to earn of $ 285,000 from the annual sales in first year.
References
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