Business Plan For Ready-to-Wear Organic Clothing Manufacturing Company In London

Description of Venture

Description of the venture : Should discuss the product/ service, size of the business, as well as key risks.

Organizational Plan : Should include the form of ownership, identification of key members of staff, roles and responsibilities of members of organization. This can be shown using an organisational chart.

Marketing Plan : Should present the target market, pricing, distribution, and outline promotional plan.

Operations plan : Should include description of company’s operation, flow of orders for goods and / or services/ technology utilization.

Financial Plan : To include the cash flow projections and sources of applications of funds.

Products and Services:

BOTP is the current business venture that is planned to start under this business plan. The company is designed to manufacture and sell ready to wear organic clothing products for both male and female. Major products that will be offered by this business venture are organic clothes for babies, children, ladies and men’s. In general, the organic clothes are just similar to other clothing available in the market. But, these are better in the sense that they are free from harsh and toxic chemicals. In addition to this, organic clothes are extremely durable, comfortable and downy soft. The product range of company would also involve bio-degradable products, bags, towels, knitted fabric, woven fabric etc (Curtis, 2014).

Currently, the business is planned to set-up and start in the city of London, UK. The clothing market has showed a positive trend for organic clothes. The trends for organic clothes are mainly seen from organic sportswear, mans wear, women fashion etc in country. Nowadays, customers have become aware of benefits of healthy and eco-friendly lifestyle. This is also a positive factor for the feasibility of the current business idea. In the current marketplace, the people are fashion-centric while going to purchase cloth and textiles. There are various advantages offered by organic clothes which would attract people like durability, eco-friendly, non-allergenic etc (Philips, 2013).

The proposed business size for BOTP is planned as 40 employees as a whole. The overall financial budget that would be required for execution of this business plan is £1880000. This fund would be needed for meeting the business needs of purchase of physical space, the hiring of factory space, purchase of machinery, computer, telephone and other equipment, payment of the salary of staff, payment of suppliers etc. Suppliers for raw material for the manufacture of required material will be contracted from nearby regions of the city of London (Hiduke and Ryan, 2013).

Size of Business Plan

The occurance of business failure is a major risk to current business plan. In case the selected business plan does not work as planned and thought by the entrepreneur, the entire investment may become worthless. This can induce financial burden over entrepreneur. In addition to this, there is also a risk of physical hazards and accidental incidents. The accidental cases like fire, theft, natural calamities can cause huge financial loss to the company. In this context, I would buy insurance of all business assets, properties, human resource and commercial space of the company (Longenecker et al., 2013).

Form of Ownership:

There are four types of ownership of companies in UK such as sole proprietorship, partnership, private corporate and Limited Liability Company (LLC). The form of ownership for the current business plan would be the sole proprietorship. Under this type of structure, business is owned and operated by an individual with the help of its employees or staff. It offers key benefits of ease to start and low cost of start-up (Mann et al., 2014).

On the basis of above diagram, an appropriate organizational structure for above business plan would be functional structure. On the basis of this, the sole proprietor, accounts manager, production head, sales head, HR are the key members of staff of the company. Under this structure, the sole proprietor or owner would have control over whole business by having a control over different functional heads in the company (Mann et al., 2014).

The role of the proprietor is to monitor and track the performance of the business by having meeting and visits with different functional heads in business. At the same time, the functional heads are responsible for managing the performance of their respective staff (Crook and Waterhouse, 2013).

Target Market:

The target market for organic clothing products would be the youth male and female aged between 17 to 35 years. The selected target market is appropriate for organic clothes, because, in current market context, the people are more aware of environmental issues like climate change and harmful impact of conventional products. In addition to this, the products would be designed to latest fashion trends and needs and expectations of people. From a geographical point of view, the target market for selected business plan would be London city of Great Britain (Thomas, 2012).

There are different types of pricing strategies available for BOTP for pricing of its products and services like premium pricing, market penetration strategy, skimming pricing, economy pricing etc. The skimming pricing strategy would be appropriate for the company (Pride and Ferrell, 2016). Under this strategy, the company would set the price of its products high in introductory phase than prices will gradually be reduced with the appearance of competitors in the market. It is an appropriate strategy for company products because company deals in production and sale of organic clothes which is a unique and innovative product in the market. For this reason, customers would be ready to purchase it at high prices. But, with the passing of time, more market players will enter in the market due to which company may need to move pricing down to low price (Curtis, 2014).

Key Risks in the Business Plan

Under distribution strategy, it is planned to use both online and offline distribution channel. Under online distribution channel, the company would receive orders from customers over its website. The company will demonstrate its products along with pricing through the use of images, graphics, text, and animation effect (Klaassen, 2011).

On the basis of above diagram, wholesalers, retailers in the field of the textile market are different elements of distribution chain of BOTP. Along with this, a direct channel of product distribution would be utilized by the company through receipt of orders over BOTP website. In this context, a local logistics partner Mango logistics will be contacted by the company for delivery of products ordered by customers over company website (Dent, 2014).

Under the promotional business plan, the company will focus on the use of social media marketing and internet marketing as these is in common use among youngsters which is the target market for BOTP. In addition to this, the company will advertise its products and values through TV advertising, radio, and print media tools like newspaper, magazines etc. The company will also use canopy marketing for the promotion of its products and brand value. Marketing slogan that will be promoted with the marketing message of the company will be “A step for Contagious Smile” (Sinclair, 2014).

Media Tools	Quarter1	Quarter2	Quarter3	Quarter4
TV advertising	ü	ü	ü	ü
Outdoor media	ü		ü
Newspaper	ü	ü	ü	ü
Magazines		ü		ü
Social Media	ü	ü	ü	ü
Internet marketing	ü		ü
Canopy marketing	ü	ü		ü
Direct mail marketing		ü	ü	ü

Description of Company Operations:

The company business would be carried out in terms of a range of operations like HR operations, purchase of raw material, production operations, sales operations, CS operations etc. Under HR operations, the company will carry out recruitments of skilled man force in the field of textile and fashion industry. The company will recruit 10 male and 10 female employees with tailoring skills, 4 employees with experience in interior and fashion in textile. It would also recruit other staff like accounting staff, sales staff, supervisors, computer operators etc for carrying out day-to-day business operations (Sinclair, 2014).

The raw material that would be required for production operations of a company involves organic cotton, textiles. For this purpose, the company will contract suppliers of organic textile in the country. Key production operations of company involve developing a draft of design, cutting the clothes accordingly, and stitching, finishing, quality check and then sending to warehouse department of the company. Sales operations of the company would be carried out through both online and offline distribution channel described earlier (Barrow et al., 2012).

Under CS operations, the company would provide a 24-hour helpline number where the customer can contact company representatives for any product related queries and providing feedback. This would help the company to improve the satisfaction of customers in the market. In addition to this, the customer can also leave their comments over company social page over social sites and CS mail (Kaser and Oelkers, 2015).

The above diagram shows the flow of order being made by customers over company website along with the flow of products and services ordered. In addition to this, the flow of order would also come in the company from retail stores and wholesalers in which company has planned to supply products for raising sales in the market.

Organizational Plan

Software Requirements:

Different types of software like accounting software, enterprise resource planning (ERP), inventory management applications, Microsoft office suit; payroll software etc will be purchased and installed by the company. Accounting software is needed for recording and maintaining different accounts of the company. Microsoft office suit will be required for preparation of business reports, presentations etc. Payroll software is sought for key HR operations like making a salary of staff, maintaining HR records etc (Lamb et al., 2012).

Website Design:

The company will hire services of website developer for designing company website and make necessary updates. An integrated order management system would be utilized with company website (Golinska, 2014).

Hardware Requirement:

Under this, the company would purchase and install different types of machinery, equipment needed for production operations. In addition to this, the company will purchase computers, printers, telephones, barcode readers for managing rest of operations in business (Sanders, 2013).

Other:

Apart from these, the company will utilize anti-virus software and data encryption techniques for the safety of business data from unauthentic users and virus attacks (Lee, 2011).

Start-up Summary:

The planned business venture is focused on manufacturing and selling organic clothes. In this context, a large sum of money would require for the company for meeting the production requirements for the purchase of machinery, raw materials, selling and distribution overheads of business. Financing of the business plan will be done through both internal and external sources of finance. Under internal source, the owner’s funds would be provided in business. At the same time, under external source, the long-term bank loan will be taken from banks (Rigby, 2011). The following table depicts the start-up summary for this business plan:

Name of the Expense	Amounts (in $)
Leasing and rent expenses	70000
Purchase of raw material	120000
Recruitment and salary cost	60000
Training Cost	30000
Purchase of machinery, computers and other equipment	548000
Purchase and Install of software	25000
Marketing expenses	40000
Other overheads	16000
Purchase of property	860000
Need for cash reserve	111000
Total cost of start-up	$1880000
Availability of funds with owner	880000
Total required funds	$1000000

Following is quarterly cash flow projection for BOTP for year-end 2016-17:

Cash Flow Projection for the year 2016-17
Quarterly Basis
	Quarter1	Quarter2	Quarter3	Quarter4	Total
Receipt of Cash:
Cash Sales	110000	70000	130000	210000	520000
Collections	100000	110000	240000	360000	810000
Total Receipt of Cash	210000	180000	370000	570000	1330000
Income from Financing Activities:
Interest Income	0	0	0	0	0
Long term bank loan	1000000	0	0	0	1000000
Total Cash from Financing Activities	1000000	0	0	0	1000000
Total Cash Receipts	1210000	180000	370000	570000	2330000
Cash Payments:
Raw Material Purchase	120000	0	0	0	120000
Operating Expenses	4000	6000	7000	8000	25000
Commissions payment on sales	40000	60000	70000	80000	250000
Capital Expenses	1478000	0	0	0	1478000
Repayment of bank loan	16500	16500	16500	16500	66000
Tax payment				29679	29679
Owner’s Draw	0	0	0	0	0
Total cash payments	1658500	82500	93500	134179	1968679
Net Cash Flow	-448500	97500	276500	435821	361321
Opening Balance of Cash	111000	0	0	0	111000
Total Cash Receipts	1210000	180000	370000	570000	2330000
Total Cash Payments	1658500	82500	93500	134179	1968679
Ending Cash Balance	-337500	97500	276500	435821	472321

The following table presents the different sources and application of funds in BOTP:

References

Barrow, C., Barrow, P., and Brown, R. (2012) The Business Plan Workbook. UK: Kogan Page Publishers.

Crook, G., and Waterhouse, M. (2013) Management and Business Skills in the Built Environment. USA: Taylor & Francis.

Curtis, V. (2014) Creating a Business Plan for Dummies. Australia: John Wiley & Sons.

Dent, J. (2014) Technology Distribution Channels: Understanding and Managing Channels to Market. UK: Kogan Page Publishers.

Golinska, P. (2014) Logistics Operations, Supply Chain Management, and Sustainability. Germany: Springer.

Hiduke, G., and Ryan, J.D. (2013) Small Business: An Entrepreneur’s Business Plan. USA: Cengage Learning.

Kaser, K., and Oelkers, D.B. (2015) Sports and Entertainment Marketing. USA: Cengage Learning.

Klaassen, W. (2011) Direct Online Sales. USA: Lulu.com.

Lamb, C.W., Hair, J.F., and McDaniel, C. (2012) Marketing. USA: Cengage Learning.

Lee, J. (2011) The Right-brain Business Plan: A Creative, Visual Map for Success. California: New World Library.

Longenecker, J.G., Petty, J.W., Palich, L.E., and Hoy, F. (2013) Small Business Management. USA: Cengage Learning.

Mann, P.H., McClung, R.M. and Kemerer, K.L. (2014) Small Business Entrepreneurship. Canada: Archway Publishing.

Philips, A. (2013) Designing Urban Agriculture: A Complete Guide to the Planning, Design, Construction, Maintenance and Management of Edible Landscapes. Canada: John Wiley & Sons.

Pride, W.M., and Ferrell, O.C. (2016) Foundations of Marketing. USA: Cengage Learning.

Rigby, G. (2011) Types and Sources of Finance for Start-up and Growing Businesses: An Instant Guide. UK: Harriman House Limited.

Sanders, N.R. (2013) The Definitive Guide to Manufacturing and Service Operations: Master the Strategies and Tactics for Planning, Organizing, and Managing How Products and Services Are Produced. Australia: Pearson Education.

Sinclair, R. (2014) Textiles, and Fashion: Materials, Design, and Technology. USA: Elsevier.

Thomas, E. (2012) How to Start a Home-based Food Truck Business. USA: Rowman & Littlefield.