The Section Below Includes A Description, Mission And Vision Statement, Main Objectives And Background Information Of The Proposed Business. Business Plan Samples
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4. Executive summary
Online markets are now catering huge shopping target market via employing technological innovative techniques. Forecasted Global growth for retail online clothing business is 4.2. BE trendy, an online business entity is proposed in the document with a vision to create value for the international market via delivering at par expected services.
Sole proprietorship business entity idea is developed by considering the simplicity and ease of legalities of the decided form of business. Business is aimed to operate online clothing and accessories retail store to cater international markets. The core product of the company will be reputed US brands for both categories.
Main ingredient of the crafted document is business description, location and industry analysis and comprehensive set of business strategies for marketing and forecasted financial plans.
5. The company
5a. Company Description
Be Trendy (BT) is a new international online retail business venture is intended to start in April, 2015. The business is aimed to deal in fashion apparel and accessories categories for variety fashion seekers. Business is proposed to achieve specific, timely profitable objectives situated with a clear vision, mission, and long-term strategic goals.
5a1. Vision Statement
The vision statement of the business is “to create value for fashion seekers in the global market via serving in a unique manner by existing in virtual shopping space”.
5a2. Mission Statement
With the alignment of mentioned vision, the mission of the business is crafted as to serve variety fashion lovers by considering their urge for wearing international fashion apparels and accessories brands with easy access for purchase.
5a3. Objectives of Be Trendy
Major milestones as initial objectives of the business are presented below.
Obtain a bank loan to aid building business entity.
Develop comprehensive virtual online retailing apparel site.
Create awareness and value for the business by communicating added facilities as a competitive advantage within three months.
Attain forecasted sales targets.
Workforce development for providing services required by the business.
5a4. Company background
As a virtual business entity named as “Be Trendy (BT)”is a new business venture, so there is no any particular existing background for the entity. However, the business idea is developed to cater fashion markets globally via virtual networks. Mark Davis, the owner of the business as a sole proprietor is interested in developing an online fashion business entity as being a business graduate with experience in the fashion industry.
5b. Product/ service and industry
The section presents a snapshot of the products in which company is intended to deal.
5b1. Product and service description
BE trendy is a retail business thus not require any manufacturing or development description of the product. The business will deal in the branded mix of fashion apparel and accessories that people requires aligned with each other by making available from one portal. Product mix will consists of reputed US fashion clothing and accessories brands.
The brands considered as initial offerings of the business are Johnston and Murphy, Levi’s, Hamilton, Lee, Filson, Hickey Freeman, Ralph Lauren, Marc Jacobs, and Victoria’s Secret. Multiple brands are chosen to create value via variety of products in product line for larger targeted consumer base that best suits for target needs. Further, only number of brands is chosen for sustaining in the market with ease of operations and lower costs initially.
The business will operate transactions by developing two separate main product lines namely trendy apparel and trendy accessories and will be further divided into sub-categories for ease of choice. In total business will deal in 8 categories, a product tree is crafted below for understanding the distribution of product categories.
Product tree for offered product line
Associated services of delivery and assistance are the key of success for the business in a competitive environment of online retailing. The services embedded with the business are online interactive retail portal, online guidance chat facility, product delivery service and after sale inquiry services.
5b2. Industry Description
Online retail industry is now widely under consideration of entrepreneurs and businesses because of easy entry needs and business models. The growth of the sector is presented below regionally.
Potential of the online retail business is optimistically growing as visualized in the graphic. USD270billion for US retail industry is forecasted for 2015 (Wauters, 2011). Further, forecasted online retail market share excluding supermarkets is as high as 17.5% by 2021 in US market (FTI Consulting, 2013) while worldwide retail sales via e-commerce is reported USD 1 trillion for 2014 with continuous growth for coming years (Čandrlić, 2014). Further, apparel sector potential in US retail market is presented below, which provide grounds for considering apparel retail industry for initiating new business entity.
6. The market
Technological breakthrough of online retailing has reshaped the shopping market concepts of the target audience, and people are now more into buying from internet for many reasons. Strong brands are such items that strengthen the potential of online retailing as people are well-aware of that brand and believe in the value associated with the brands. Thus, these brands do not need to waste more time by visiting physical stores for shopping. Below presented is a brief description of targeted segments and overall business strategy to serve target market.
6a. Market and target customer
As mentioned above, the basic target market for business is a fashion lover who buy online internationally. However, considering the small business size, the company is also aimed to cater the local market of US as the primary market. For defining local markets of US, following geo-demographic information is employed.
On the grounds of mentioned facts in the graphics following primary segments with wider market coverage, are targeted from the location.
Selected segments for the business
6b. Competition and competitive advantage
Competitive advantage of proposed business is that it is going to deal in Apparel business for fashion seekers with established brands. Strong brand presence in mind of consumer and competitive pricing will be the competitive advantage of the business. Further, catering wider markets via delivery services for their favorite unavailable brand in the region will be aiding to sustain the business. High competition level in terms of online retailing competition and terms of the apparel industry and direct competition from the suppliers of brands is the main constraint for business to survive.
6c. Marketing strategy
Marketing Strategy for the business is developed via employing 4P’s of the marketing mix. The strategy for all 4Ps is presented below.
Communications plan for the first year of the business
6c1. Overall strategy
Business is adopted market penetration strategy by employing Ansoff Model, competitive pricing and discounted promotional campaigns with markdown technique are the main ingredients of the overall strategy for operating business successfully. The implementation of the strategy will be done by applying bulk purchasing techniques to gain extra discounts from manufacturers.
6c2. Sales plan
Below presented is a comprehensive quarterly sales plan with forecasted sales.
6c3. Competitive plan
Considering price competitiveness and value service as a competitive advantage following plan has been developed.
6c4. Research and development or Growth Plan
In the first year, business is not spending on R&D but owner is developed a strategic long-term growth plan for expanding globally via regional warehouses and local web sites operations for specific regions within three business years.
7. The organization
Be trendy is a proposed apparel and accessories online business with an operating office cum warehouse in the New York, US. This section presents a snapshot of business legal form and operational structure.
7a. Legal and organizational structures
Legal form of the business is the sole proprietorship and is chosen for the sake of gaining advantage low start-up costs and simplicity of legalities. As evident, sole proprietorship entity is managed by a single owner who is solely responsible for business liabilities and not credited as a legal entity (Spadaccini, 2007). Proprietor is aimed to deal in clothing and accessories business via online retailing store in the international market with a small necessary workforce.
According to U.S small business association, legal start-up requirements of the type of ownership are as less as local licenses and name registration only. Further, relaxing taxation facility and assistance in export are the benefits for sole proprietor from SBA. Further, business needs small documentation requirements (SBA, 2014). However, imposed liabilities of the business are direct responsibility of sole proprietor. Comprehensive organizational chart of underlying business is presented below:
7b. Key personnel
The key personnel for the business will be the owner itself, who will initially craft and run the whole entity. To seek the assistance owner is intended to outsource recruitment of other key personnel for the business on the following guidelines.
Staffing Ratio for the business is developed underestimating the expected work output ratios by staffing.
Zero-based staffing technique is employed to analyze quantitative needs of the underlying business as it is completely a new venture.
In total, business needs 6 personnel including owner to operate the newly born business entity. As a new business is operating with lower staff quantity, each key designation will be holding multiple responsibilities comparatively. Brief job analysis in the form of the job description for owner to analyze job requirements of the top position is presented below.
7c. Related service providers
As the business is small sole ability and has not the capability to generate all means of providing quality service, owner is chosen to outsource efficiently as many functions as possible. However, core business functions including purchase, marketing and finance will be managed by proprietor itself. Product provider for the business will be the manufacturers of the selected brands and for different business purposes company will outsource many agencies as presented in the below figure
8. The financials
The section covers the description of financial documents with forecasted values. Generated documents are on the grounds of market facts for the mentioned business, strategic goals of the company and assumed forecasted numbers.
8a. Critical risks
Critical risks associated with forecasted documents are:
Uncertain costs increases are due to inflation or economic situation.
Denial from suppliers to accept contracts.
Less than expected sales and business growth
Imposition of laws and regulation.
Failure in debt payment.
8b. The deal
Owner is intended to make long-term deals with the suppliers of the products and outsource to reduce operational and time cost for repeating the purpose. Major deals for the business will be with software house, legal agency, manufacturers of product and courier service. These deals will aid company reducing operational costs via long-term cost estimation.
8c. Income Statement
8d. Cash flow projection
8e. Balance sheet
8f. Start- up costs
Main assumptions for preparing documents are:
Owner will generate start-up costs via 50% of the equity and 50% of acquiring debt.
Bulk inventory approach for getting discounted price will be employed.
Owner will outsource complex and huge costs operations.
Company growth for second business year is set to 4% that is aligned with forecasted industry growth, which is 4.2% and price increase on an average is set to 2.2%.
Debt payment will be equally divided for return payment and interest rate acquired is 4.00%.
Expenses will grow at particular percentages year-by-year.
Assumed to deal in six product categories with Initial assumed price list aligned with market rates for the product is presented below.
The section includes schedule for debt payment by the business and an overall milestone achievement schedule for the business as planned.
8h1. Debt Schedule
8h2. Business Milestone Schedule
Čandrlić, G. (2014). E-commerce Trends 2014-2018 – Slower Growth But Still a Huge Opportunity. Global Dots, Retrieved January 3, 2015 from http://www.globaldots.com/e-commerce-trends-2014-2018-slower-growth-still-huge-opportunity/
eMarketer. (2012). Apparel Drives US Retail Ecommerce Sales Growth. Retrieved January 3, 2015 from http://www.emarketer.com/newsroom/index.php/apparel-drives-retail-ecommerce-sales-growth/
Enright, A. (2014). U.S. online retail sales will grow 57% by 2018. Internet Retailer, Retrieved January 3, 2015 from https://www.internetretailer.com/2014/05/12/us-online-retail-sales-will-grow-57-2018
Experian. (2012). Retail Marketing Segmentation. Retrieved January 3, 2015 from. http://www.experian.com/assets/hitwise/white-papers/hitwise-daily-deal_2012_interactive-report.pdf
Fashionup. (2013). The Top 5 Most Fashion Forward Cities in the United States. Fashion up events, Retrieved January 3, 2015 from http://www.fashionupevents.com/the-top-5-most-fashion-forward-cities-in-the-united-states/
FTI Consulting. (2013). The 2013 Holiday Retail Report. Retrieved January 3, 2015 from http://www.fticonsulting.com/global2/media/collateral/united-states/2013-us-online-retail-sales-forecast.pdf
Google. (2015). Population Of America. Retrieved January 3, 2015 from https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=population%20of%20america
SBA. (2014). Exporting. Retrieved January 3, 2015 from https://www.sba.gov/category/navigation-structure/exporting-importing
Spadaccini, M. (2007). Business Structures: Forming a Corporation, LLC, Partnership, Or Sole Proprietorship. Entrepreneur Press.
Statista. (2014). Forecast for global retail sales growth from 2008 to 2016, by region. Retrieved January 3, 2015 from http://www.statista.com/statistics/258568/forecast-for-global-retail-sales-growth-by-region/
Wauters, R. (2011). Forrester: Online Retail Industry In The US Will Be Worth $279 Billion In 2015. Tech Crunch, Retrieved January 3, 2015 from http://techcrunch.com/2011/02/28/forrester-online-retail-industry-in-the-us-will-be-worth-279-billion-in-2015/
World Bank. (2015). GDP (current US$). Retrieved January 3, 2015 from http://data.worldbank.org/indicator/NY.GDP.MKTP.CD
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