Discuss about the term of Retail Establishment for Business Plan.
Company details
Stylistly will be located in downtown West Palm Beach, Florida. Our company is a retail establishment selling fashionable women’s clothing and accessories to all generations of women.
Stylistly will be a multi-member Limited Liability Corporation formally organized in Florida. Saikiran and Sharath reddy are the company’s principle owners. We hold equal shares of ownership in the company.
We have identified an ideal spot in the downtown district of West Palm Beach. The gorgeous area includes numerous restaurants, an art gallery, coffee shop, candy store and a picturesque park in the town square. We will sign a store of 1800 to 1900 squre foot building at $13 to $15 per square foot. Comparable properties are renting for $12-18 SF/Year.
Working with the property owner and the City of West Palm Beach Downtown Redevelopment Committee, We will require some of the funds for painting and renovation the location and to make some changes.
When considering the addition of wall mounts for merchandise, multi-level clothing displays as well as creative floor planning, the facility is should be large enough to support future growth. Additionally, we will be able to conduct all aspects of our business from this location. This includes deliveries and shipments, inventory management and administrative duties such as finance, buying and marketing.
Our key assets are our co-owners, Saikiran Mannava and Sharath Reddy Marikanti, who bring tremendous experience and relationships to this business.
Once Stylistly is launched, our primary asset will be our brand, which will convey style, quality and a great shopping experience. In the long term, it is this brand that will separate Stylistly from other retailers both locally and nationally.
Product and pricing
Stylistly will sell a combination of widely recognized name brands as well as clothing lines from select fashion designers. We will closely follow generational fashion trends as well as our own customers’ purchasing preferences. Moreover, we will tailor our inventory to meet the needs of our clientele. Solely focusing on the styles, colors and fits to flatter the female figure of all generations will be our specialty. While apparel, such as business clothing, casual wear, jeans and formal wear will be our main staple, we will also offer some accessories such as belts, scarves, and hats.
Profits will be earned via the sale of our merchandise. Our pricing structure will remain flexible, as we will implement suggested retail pricing on common brands as well as the standard practice of key stoning prices. Additionally, we will utilize a value-based pricing structure, which measures the value of our products to our customers such as easy access, quality, customer service and styles flattering to our target consumer. End of season sales, holiday and overstock sales, multi-buy savings and promotional coupons will be implemented at strategic intervals.
One key feature that separates Stylistly from all other local boutiques and chain department stores in the area is our commitment to providing women of all generations stylish, quality clothing options. Because our primary concern will be ensuring our consumers are happy with the fit and style of their purchase, we will provide products tailored to all shapes and sizes of women. In addition, we will make every effort to have petite and plus size versions of our merchandise in stock. If they are not in stock, ordering them will be easy, cheap and efficient.
Further, Stylistly will not just be a store that sells clothes. Our clientele will benefit from an experienced, knowledgeable sales staff. Out of the gate, our goal is to implement a superior customer service system. Beyond our friendly reception and an inviting atmosphere, Stylistly will also offer customers fashion information and advice. Our trained personnel will provide counsel that women simply cannot find at other clothing stores. The service will be likened to a beautician who offers advice on what hair styles best complement his/her client’s face. Our hip and qualified fashion-industry expertise will ensure our customers walk away with the perfect outfit.
In West Palm Beach, there are no direct competitors offering our unique services or targeting all the generations at once specifically. In the Downtown District, the shops most closely competing with Stylistly are as follows:
EcoWise Boutique, which targets a younger demographic and specializes in natural fiber clothing. They also carry local art and jewelry.
Caddy Corner Kids, which targets parents shopping for children, specializes in children’s clothing, accessories and toys.
Kati Kouture, which targets younger women, specializes in offering industrial chic clothing with “classic lines and a punk gothic edge.”
Marjorie Joe’s Fashion & Gifts targets older women within our target demographic, but specializes in the more homemade, old-fashioned style clothing.
Petal Place Boutique targets women within our target demographic as well, but they specialize in an affordable, folksy style of clothing with handmade shawls and embroidered shirt sets.
Second Time Around targets women and may overlap our target demographic slightly. However, they specialize in consignment clothing.
There is one super-store within a 60-mile radius of West Palm Beach. The store is similar to Wal-Mart in that it sells lesser quality items at lower price. But there are two chain department stores. They sell men’s, women’s and children’s clothing along with home accents, electronics and appliances. While familiarity is comforting, industry research indicates increasing frustration with the inferior quality, subpar customer service and vastness of super-stores. Not to mention, the inept sales staff and lack of selection often found at department stores.
To date, our primary competitive advantage is the absence of any store like ours in the West Palm Beach area. In addition, company co-owner, Sharath, has worked in the fashion industry for more than 8 years. Her experience includes working with apparel retailers, clothing wholesalers, garment manufacturers, and fashion designers. He understands the fashion industry and knows how to spot the latest trends.
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. In turn we will quickly establish Stylistly as the place for lady any generation to shop.
Also, we would be the only niche fashion retail-store for hip, older women. While other stores offer some style equivalents, they are focused solely on anyone generation. We are focused on all kinds of women, and therefore, have a distinct competitive advantage in our niche.
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.
As our company grows and our boutique earns a positive reputation, several opportunities will open to us. And we are considering some options already. Should we choose to remain a small local boutique, we will develop and grow our company by increasing existing clothing lines and expanding our selection to include additional products such as swim wear, lingerie, or sportswear. Within five years, we will assess the potential for franchising our stores in select locations.
Additionally, as we build our business, we plan to simultaneously develop an online Stylistly. The power and ease of an online storefront is obvious to us, and we plan to develop one quickly and efficiently. We also see the potential for regional and/or national expansion at some point.
Customer targeting
Stylistly is a business-to-consumer retail company. We do realize that we will likely attract some younger women with our peripheral products (handbags, scarves, etc.). 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 only.
While those born in the 1940’s are still slightly more conservative, those born during the 1950’s and 60’s were trailblazers and trendsetters. Specifically, these will be the women we target vigorously with our marketing and offerings. These women range in age from their mid 40’s to late 50’s. They value uniqueness, convenience, service and quality. As they retire, price does become a factor in decision-making. At the same time, they were always a generation of the “buy now and pay later” philosophy.
West Palm Beach accommodates a robust retail market. While car dealerships, grocers and home improvement retailers account for a sizable portion of the retail market, the main local shopping district is downtown. With tree-lined streets and quaint shops and restaurants, the downtown retail district is the social and shopping hub of the community. The current population of West Palm Beach is just 104,513. 51.85 percent are women who have a median age of 40. Their median income is above the national average at $48,600.
In addition to local consumers, we will also benefit from tourist traffic. Our town boasts a healthy and recession-proof tourism industry. In addition, West Palm Beach hosts several annual craft and golf events, which bring several thousand of our target consumers into the area each year.
The retail fashion industry is a solid business with ever-changing styles and ever-present consumer demand. While supercenters and megastores ruled the past two decades, more and more consumers are looking for change. They’re searching for a more serene and customer-friendly shopping experience. This is true especially for those nearing retirement age. In reality, as the Baby Boomers numbers decrease, there will be fe0wer older Generation X-ers to sell to. However, this market decrease will not occur for at least twenty years. Even then, clothing will always be in high demand. The fashion industry in America has been thriving since the advent of moving pictures.
Strengths
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Opportunities
Threats
Company viewpoint
Our company’s core business strategy is to combine exceptional and knowledgeable customer service with quality stylish merchandise. And in turn, we’ll provide an enjoyable shopping experience for our customers. Stylistly’s mission is to offer women of the all generation a 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.
We are currently working with several apparel wholesalers, garment manufacturers and some freelance fashion designers to assemble our inventory. We are also working with city economic-development officials to secure all required permits and occupational licensees. Once financing is secured, we will move ahead with renting the store and start with the renovations and materials required for store set up as well as purchasing inventory, retail displays, and office supplies. Prior to the grand opening of Stylistly, we will schedule an event with the Chamber of Commerce and commence with pre-publicity flyers, advertising and additional marketing activities.
As the Internet has become a staple of American life and retail merchandising, Stylistly will have a viable Web site. We have secured the domain name Stylistly.com and will begin site development as funds become available. Further, we plan to hire an established Web designer that will accept modest pay in exchange for future profit-sharing. Foremost, we intend to showcase our brand, our clothing and provide customers with the ability to purchase items online. As the site progresses, we will include features such as fashion advice, designer interviews, newsletters, and Internet-only specials. Eventually, we hope to establish and nurture an online social community where women can gather and discuss topics of the day, network and share clothing secrets.
We both have strong marketing backgrounds and recognize the significance of effective marketing. We expect our strategy to draw consumers into Stylistly from the very beginning. Moreover we will hire a local PR firm to help us develop and implement a strategic marketing plan and guide our publicity efforts in a cost-effective manner.
Our goal is to keep our marketing budget to no more than 5% of our gross annual sales. We will partner with local organizations such as the Chamber of Commerce and Downtown Merchants Association as often as possible. Stylistly’s initial marketing efforts will remain local as we establish a presence in our community. These will rely heavily on local print and broadcast media coverage, traditional advertising, signage, a direct mail marketing campaign and networking. A significant portion of our advertising budget will be allocated to print and broadcast media.
Of course, we will build anticipation and excitement about the new boutique prior to its grand opening. This will include hors drovers donated by the bistro across the street and a silent auction of a local artist’s painting collection. The collection is currently on display in the Downtown Art League Gallery. Finally, marketing opportunities will be continually utilized as we expand our business and our consumer numbers grow.
Stylistly plans to generate sales via strategic marketing efforts. These concentrated efforts 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 conduct a direct-mail campaign to targeted consumers that we have signed up through our in-store mailing program. The direct mailers will be comprised of 5,000 full-color postcard mailers. Each will include at 10% coupon. We will offer promotional discounts and seasonal and clearance sales throughout the year.
Stylistly will accept cash and payment via major credit and debit cards. Cash layaway plans will also be permitted. Returns and exchanges must take place within 30 days of purchase and receipts are mandatory.
Our sales staff will include both co-owners and 2-3 part-times sales associates. Combined, Sharath and Sai have nearly 10 years experience in the fashion and retail industries. Comprehensive training will be provided to each sales associate – to include selling merchandise as well as how to provide fashion advice to customers. Our sales team will earn an hourly rate, plus a generous percentage of commission from each sale.
As a retail establishment, Stylistly will conduct business seven days a week from 10 a.m. to 6 p.m. Monday through Thursday, from 10 a.m. to 8 p.m. Friday and Saturday, and 12 p.m. to 6 p.m. on Sunday. During the holiday seasons and during special events, store hours will be extended. At this point, the retail store will take require approximately 2/3 of the building’s available space. The remainder will be utilized for stock and administrative purposes. In addition to the two full-time co-owners, three part-time employees will be hired to serve customers.
Our company will secure merchandise from local manufacturers with showrooms in Orlando and Miami. We’ll also have access to the Florida Apparel Market, which is the largest wholesale merchandise warehouse in the state. Purchasing from FAM, buyers receive product displays and promotional materials with purchase. Additionally, we will work closely with our regional sales representative. We will also attend relevant pre-season fashion trade shows.
To control costs, track inventory and manage stock levels, an inventory control system will be set in place. This will include the standard bar code with its related equipment and software. Staff will conduct annual inventory audits and hire outside auditors when necessary. All accounting and finances will be maintained using software.
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.
Our first major milestones will be securing funds and setting up our business. This is our major focus right now. In five years, we hope to have established our retail business within the community and within our industry. Furthermore, as co-owners, we would like to see the growth of our store with an increase in product lines, further penetration of the national market with online sales and, under the right set of circumstances, the opening of franchise Stylistlys in strategic locations.
The co-owners intend to launch and grow Stylistly for many years into the future. In the event that our investors require repayment of their initial investments, plus a large return on their investments, we will seek a partner to buyout the investors’ shares. Another alternative is a management buyout, which will be agreed upon in advance.
In the long term, we will position Stylistly as a profitable business that will be an appealing acquisition for any number of retail chains.
Business framework
As a small business, we will have a small staff. Both co-owners will assume leadership roles within the company and will be responsible for daily operations, overseeing marketing efforts, buying merchandise and managing inventory and all other administrative duties. A small sales staff will assist co-owners with securing sales, assisting customers and general maintenance of stock on the floor.
Saikiran and Sharath are co-owners and will co-manage Stylistly. However, daily responsibilities will differ.
Sai will manage the day-to-day operations including supervising staff, maintaining inventory and bookkeeping. Sai worked ten years in the retail industry including four years as a manager of an antique furniture shop. Sai earned a BA degree in finance from Britannica College in Tampa, Florida.
Sharath will oversee the merchandise buying for the store as well as maintain a keen awareness of trends within the industry. He will also work with our public relations firm to ensure superior marketing plans are in place and implemented. Jensen worked in the fashion industry in various capacities working with designers, wholesalers and retailers for 8 years. She earned a BA in fashion merchandising from Colliers Fashion Institute in Miami, Florida.
Stylistly will employ a sales staff of 3 part-time employees. These positions are yet to be filled. However, we feel the labor pool is such that finding qualified employees will not be an issue. Our sales associates will be paid an hourly wage, plus commission. Bonuses will be provided with each year of service following an annual review to encourage employee retention.
Fund raising
Stylistly will need $282,000 to get our business off the ground. We are currently seeking funding from outside investors and business loans.
At this time we have raised $50,000 in equity capital and an additional $12,000 for a specific-use grant. Both co-owners, Saikiran and Sharath, have invested $25,000 each into Stylistly. We are seeking investors for an additional $170,000 in equity investment and $50,000 in loans.
Funds will be used to pay for renovations, including the outside façade, construction of fitting rooms, sales counter, painting, carpeting, lighting, and decor and display fixtures. We will also purchase inventory, a cash register, computer equipment and an inventory management system. The remainder of the start-up funds will be utilized to cover operating expenses, such as rent, utilities, marketing costs and wages.
Based on our marketing plans, location, store size and product offerings, we expect to collect annual sales of $285,000 in year one, $375,000 in year two and $525,000 in year three.
Our average cost of goods sold will be 40%, which leaves us with a gross margin of 60%. Our minimum monthly fixed costs are $15,500 per month, so we will need to generate sales of $25,833 per month to break even. We will become profitable on a monthly basis before the end of our first year.
In our third year, we will earn net income of $105,000. The accompanying income statement demonstrates our company’s profitability.
Our business will collect immediate payment from customers, so our cash flow statement will be substantially similar to our income statement. Our cash flow statement clearly demonstrates our ability to cover all bills.
Stylistly will launch with $220,000 in equity capital and $50,000 in loans. Credit amounts and supplier terms for inventory will appear in our balance sheet as short-term liabilities. Jewelry consignments from vendors will not be documented in our balance sheet and will be expensed as these items are sold. Details are shown in our enclosed balance sheet.
Our projections are based on the assumption that the economy, consumer spending habits and population growth in West Palm Beach will continue for the foreseeable future.
We must also assume that our present and future suppliers will continue to sell inventory to us at prices that allow us to maintain our present margins. It is also important that we are able to hire reliable employees at reasonable wages.
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