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Chapter-1

1. Introduction:

1.1 Executive Summary:

New Fashion Bug Clothing is a new apparel store that caters to the Nepali
community in Patan, Lalitpur. As our name suggests our focus is to provide
Nepali wear and accessories, and position ourselves as the top retail store
servicing this particular market.

We are the first and only promoters who are launching the kurtas from
Pakistan in the city of Patan. Our intentions are to obtain 80% market share
and become a central hub of shopping activity for the local Nepali population
as well as others who enjoy wearing kurtas.

New Fashion Bug Clothing will be located Ghabhal, Patan. Kurtas has
centralized itself directly in position to the residential location and social
activities of our target market. We believe that this is critical to our initial
success and long-term growth.

1.2 Background:

In Nepal, there is large number of micro enterprises, which are in operation on
cottage basis. It is estimated that small business, legally consisting of cottage
and small enterprises contribute to about one-third of industrial value added,
account for 95% of the number of industrial units, produce 66% of exports and
make up 7.5% gross domestic products. The World Bank estimates that 85%
employment opportunities are created by this sector out of the total industrial
employment.

Under the prevailing socio-economic and geographical situation of the
country, small-scale industries and cottage and village industries play a
significant role in the industrialization process and economic development of
the country. Small-scale industries can be operated with simple technology
and run by less trained personnel. It has greater scope than large-scale
industries as it does use indigenous resources, provide productive
employment, stimulate local Industries, mobilize domestic capital, and
increase net national product and income. Nevertheless, their growth depends
heavily upon the quality of entrepreneurship. Due to the lack of quality
entrepreneurship, small-scale industries are facing the problems regarding
capital and labour and at the same time, the products produced by them have
to complete with the foreign products.





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An entrepreneur is a person who mobilizes capital, utilizes natural resources,
creates markets and conducts business. The entrepreneur combines talent,
ability and drive to transform resources and opportunities into profitable
ventures. Entrepreneurs play the important role in economic growth of any
country. It is an agreed fact that entrepreneurs are not born but made. The
task of developing potential entrepreneurs is not an easy game because they
are influenced by tradition, culture, social values, belief and faith. Most
people have a certain potential for entrepreneurship that should be identified
first. This potential can be further developed through adequate training.

Therefore, if Nepal has to accelerate the pace of industrialization, high priority
has to be given to small-scale industries because of its suitability of the
existing infrastructure.

1.3 Objectives:

To create a shopping environment that caters to the apparel needs of the
kurtas to the women, ladies and girls.
To earn 80% market share and become the number one kurta apparel store
in middle of the Patan and achieve name and fame in the local community.
To receive a 50% profit margin within the first year.
To have a customer base of 1,500 by the end of the first operating year.
To achieve a net profit of Rs.3,00,000 by year two and Rs.3,52,000 by
year three.

1.4 Mission:

New Fashion Bug Clothings mission is to offer quality branded wears as an
assortment of sizes and styles to accommodate all varying body styles and
shapes in large quantity.



















2
Chapter-2


2. Company Summary:

New Fashion Bug Clothing is organized as a family business of Shrestha and
Sons. It will be located at Ghabhal, Patan being the epi-center of the local
Nepali community on the south side of Patan. The hours of operation will be
Sunday to Friday from 9 a.m. to 8 p.m. and Saturday 9 a.m. to 12p.m. There
will be extended special hours designated during the festive seasons. All
merchandise will be purchased according to the company's mission and
customer focus of outfitting all sizes including women's plus sizes and
childrens sizes too.

2.1. Company Ownership:

New Fashion Bug Clothing is organized as a family business of Shrestha and
Sons. The Shrestha and Sons are responsible for handling all administrative
and managerial duties.

2.2 Start-up Summary:

New Fashion Bug Clothings incorporation costs are listed below. The
company will start with three months inventory on hand for apparel and an
accessory as this is the main revenue generator. The majority of the
company's assets will reside in inventory. Successful operation and building a
loyal customer base will allow New Fashion Box Clothing to be self-sufficient
and profitable in year two.

Start-up:

Start-up Expenses:
Rent Rs.10,000
Grand Opening Event Rs.5000
Telephone & Utilities (3 months) Rs.3000
Advertising & Promotion Rs.7000

2.3 Company Locations and Facilities:

New Fashion Bug Clothing will be located at Ghabhal, Patan. This space has
1,020 square feet and has been leased for two years. This location is central to
the geographical location for the local Nepali community in the southern part
of Patan, Lalitpur. We feel it is essential to our initial and ongoing success
that we locate ourselves in the heartbeat of the community. We also strive to
create an atmosphere of acceptance and community, as well as a retail
environment where individuals can identify and bond with their culture. All
business deliveries and shipments will be handled through the store.

3
Chapter-3


3. Products:

New Fashion Bug Clothing will carry nationally recognized Indian
wear brands (see list below). Our selection will range from the basics
of Wrangler to the trendy Indian style of Ethics. We will be
purchasing through sales representatives and manufacturers in a variety
of sizes, colors and style to fit our target market base. The greatest
percentage of merchandise will be in apparel, followed by accessories,
shawls, and gifts.

Management will rely on customer feedback, suggestions, and sales
reports to introduce or eliminate certain brands, styles and sizes.

3.1 Product Description:

New Fashion Bug Clothing will provide a selection of brands that fall
within our mission statement. Our goal is to carry a selection of labels
from the hardcore Indian wear to the more sophisticated Nepali styles.

Some of the labels we will carry are listed below:

Raheja Cotton
Kaajal Silk
Mayuri Chiffons
Shawls Pashmina, Chiffon

3.2 Competitive Comparison:

New Fashion Bug Clothing has a number of advantages that will allow
us to build our brand identity, add value to our merchandise and build a
loyal customer base while standing apart from our competitors.

We will be the first Pakistani kurta wear apparel retailer in
Patan.
The new customers will entitle to a 20% discount after ten
purchases.
We will create a sense of culture and bonding with the
community by offering products that combine both the Indian-
Nepali and Nepali cultures.
We will offer clothing to fit plus-size women and big and tall
women.



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We will maintain a detailed record on each customer, logging
addresses, their purchases, size, and brand for customer follow-
up and in-house promotional purposes.
Our location is central to our target customer base.


3.3 Sales Literature:

New Fashion Bug Clothing will use a targeted advertising and sales
program to generate publicity and build a customer base.

Hoarding boards and discount coupons will be spread throughout
Lalitpur area.

A 200 grand opening invites will be sent to potential new customers
two weeks before the grand opening. The invitation will also include a
promotional 10% coupon off a customer's first purchase. The
customer mailing list has been compiled from contacts the owners have
made while in the community.

3.4 Sourcing:

We will shop for our merchandise as outlined below:

With manufacturers who have a regional representative and
showroom located at the Kathmandu Market Center. We will
place our weekly and monthly reorders with them and review
new products. For all other brands, we will work directly with
the manufacturers and utilize product catalogs and line sheets.
Aswin and Kartik are the main and the most important festive
season where the latest collections of all brands are to be made.
All orders will be placed for Fall lines not previously viewed
and placement orders for Holiday.

The Kathmandu Market Center is the largest wholesale merchandise
mart and was the first to have a permanent facility to unite regional
wholesalers under one roof. The Kathmandu Market Center offers to
all registered buyers, special events, fashion shows, product displays
and demonstrations, educational programs, seminars, new buyer's kits
and registrations, and special buying programs. We will also work to
solidify our relationships with sales representatives and vendors so that
we may achieve decreased cost of goods. Our competitors, (both
direct and indirect) purchase from the same sources and we believe
that through marketing programs and strategic alliances we will begin
to gain a competitive advantage.




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3.5 Technology:

Retail apparel establishments have a tendency to have a high number
of SKU's (Stock Keeping Unit) because of the level of inventory. It is
imperative that an advanced inventory and point of sales program be
utilized to maintain stock levels and track sales. New Fashion Bug
Clothing will utilize Peachtree Accounting software for all financial
and accounting purposes.

For inventory management and point of sale transactions we will
utilize Retail I.C.E. (Inventory Control Expert) software. This product
is Windows-based software that allows the small, single store retailer
to manage their inventory and point of sale functions all in one.

Our business plan will be generated and reviewed on a bi-annual basis
using the most updated version of Business Plan Pro from Palo Alto
Software and reviewed quarterly to ensure all financial goals and
objectives are being reached. Palo Alto's companion software,
Marketing Plan Pro will allow us to make the most of our limited
marketing budget by focusing our communications on our target
markets and enhancing our marketing knowledge.

3.6 Future Products:

As we achieve and exceed our sales and profitability goals, New
Fashion Bug Clothing will add ladies sandals and shoes to the product
line and special clothing that will include T-shirts for women. We will
expand our line of brands with those that have been repeatedly
requested by our customers.




















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Chapter-4


4. Market Analysis Summary:

The primary target customer of New Fashion Bug Clothing will be the Indians
and Nepalese located in the whole part of Lalitpur. As we are situated in the
epi-center of their residential community we believe they will make up the
largest percentage of our customer base.

The secondary target customers are the Newari community in the area. As the
Newari population continues to grow rapidly in the central area we expect to
receive the patronage of Newaris as they are very loyal to apparel.

The last target customer of New Fashion Box Clothing is listed as other. As
popularity about the store increases we expect to see an assortment of curiosity
seekers, and local residents from the community as well as seasonal
purchasers during rodeo season.

4.1 Market Segmentation:

The Nepalese women population is concentrated heavily in the whole part of
the city, therefore, it leading to the highest concentration of our customer base.

The last area of potential customers is labeled as "other." Because New
Fashion Bug Clothing offers a variety of Indian and Pakistani wear apparel,
along with accessories and gifts we feel that we will attract many curious
shoppers. Our ambience and customer service will make them repeat
customers.

4.2 Target Market Segment Strategy:

The goal of New Fashion Bug Clothing is to serve the local Nepali ladies
community that has difficulty finding Indian and Pakistani clothes that fit their
larger frames. We will also serve the Newari community, which tends to have
a slimmer yet shorter frame.

Both of these markets are underserved in the retailer outlets.

4.2.1 Market Needs:

There are several important needs in the apparel business that are being either
underserved or not met at all. New Fashion Bug Clothing plans to meet and
service those needs.

New Fashion Bug Clothing will provide a large assortment of sizes to
compliment the various body shapes and sizes of the ethnic community. This
is a size segment that is missing throughout the larger apparel retailers.

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Focus and attention to customer's personal preferences and customer retention
will be given high priority. Because of the high rate of employee turnover at
major mass retailers, customer service and personal detail has been lost.

4.2.2 Market Trends:

Millions of people around the Asia instantly recognize and identify with this
apparel. It is synonymous with India and is a true classic. Kurtas has survived
many Eras. There will always be a future for this apparel. Within the last few
years the kurtas has made a comeback in the fashion industry. With the
increase of serials on the television and the apparels worn by the actors more
people are becoming aware of Indian kurtas in the Nepali community.

4.2.3 Market Growth:

Market growth is in an upward motion, despite some of the latest economic
downturns in the Patan metro area. According to a report by the Economy &
Trade, Patan can be ranked as the business area after Kathmandu in the valley.
Patan has also been designated as the best city in the Lalitpur to start a new
business.

For these reasons and more, Patan can be considered an economic leader in
Nepal. As Nepal has been one of the business areas these days there isnt any
problem for the people to consume goods they want. Lots of facilities are
available in the city these days so people are migrating to this place. We can
name Patan one of the high class cities for manufacturing of handicrafts and
other various garment products, which rank Patan as the top city for the people
based on income potential, cost of living, proximity to employers, cost of
housing and 21 quality-of-life factors.

4.3 Main Competitors:

New Fashion Bug Clothing has lots of competitors within a few kilometers
radius of its location.

Kumkum, which is located approximately 2 km from our location, is our
closest competitor. Kumkum is one of the largest kurta wear apparel stores in
the Patan city. They operate 2 stores and sell latest kurta wear apparel and
saris to the general mass market. Locating plus size clothing for women,
ladies and children can be extremely difficult. They also tend to be a bit
behind the market in offering more contemporary Pakistani styles.

Vaastra, located approximately 2.5 km from our store. They offer highly
embroidered kurtas and saris. As it is located at the main street, it does not
need to advertise or promote of their retail outlet.




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Sunflower is approximately 4 km from New Fashion Bug Clothing and is the
farthest of the three competitors. Sunflower is family-owned kurta apparel
with two stores in the Patan area. Their customer base tends to be more
upscale as they carry more of the boutique labels. They also do the tailoring
of clothes, which help them to pull the customers in two ways. They have few
plus sizes for women and big and tall for women. Also, sunflower does very
little advertising.










































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Chapter-5


5. Strategy and Implementation Summary:

New Fashion Bug Clothings goal is to provide apparel to the under served
market of the Indian-Nepal community. Our intention is to gain 80% of this
market share by focusing on our niche positioning, neighborhood location,
brand that we sell, hospitality and special promotions.

5.1 Competitive Edge:

New Fashion Bug Clothing discount Card which allows the customer a
20% discount after ten purchases.
Our location in the community will offer closer access to our target
customer base.
We will offer plus sizes for women and big and tall sizes for ladies.

5.2 Marketing Strategy:

Our marketing strategy will focus heavily on sales promotion, niche
positioning in the market, and customer service with loyalty and retention in
sales. The marketing budget will not exceed 5% of our gross annual sales.
Our promotions will always stay in tune with our company objectives and
mission statement.

5.2.1 Positioning Statement:

New Fashion Bug Clothing will provide the free size and plus size for women
with varieties of designs and styles which are not always readily available in
the mass kurta retailers.

5.2.2 Pricing Strategy:

New Fashion Bug Clothing will maintain a flexible pricing strategy. We base
on the product lines that we carry on their reputation and quality. Most of our
lines come with a suggested retail price that we will follow. We will also
utilize the standard practice of key-stoning as well.

5.2.3 Promotion Strategy:

New Fashion Bug Clothing will follow an aggressive yet creative promotional
plan. This will allow us to focus directly on our target customer while still
being conservative with our advertising rupees.





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Advertisement on the established Nepali channels, hoarding boards on
the streets.
Free distribution of the prospectus in the busy shopping areas.
Advertising and promoting on the newspaper like The Himalayan
Times, Kantipur and other fashion magazines.
Spot radio advertisements on the local FM stations.

5.3 Sales Forecast:

The following table and chart give a highlight on forecasted sales. We expect
sales to start off conservatively and increase extensively during the
Dashain/Tihar holiday shopping season and during the months of Shrawan and
Bhadra, which contains lots of women festivals.

New Fashion Bug Clothing has planned for a rate of growth at 15% for the
first year as we build name recognition and status in the community. In the
second and third year we look to see an increase of revenue of 20% as we gain
a larger percentage of the market share and increase our customer base beyond
the southwest part of the city.

Sales Forecast:


Sales Forecast

Y 2010

Y 2011

Y 2012

Unit Sales:
Kurta
Shawls
Shoes/sandals


672
336
336


1008
672
672


1680
1008
1008

Unit Prices:
Kurta
Shawls
Shoes/sandals


Rs.650
Rs.100
Rs.750


Rs. 650
Rs. 100
Rs. 750


Rs. 650
Rs. 100
Rs. 750

Sales:
Kurta
Shawls
Shoes/sandals


Rs.436800
Rs.33600
Rs.252000


Rs.655200
Rs.67200
Rs.504000


Rs.1092000
Rs.100800
Rs.756000
Total Sales Rs.722400 Rs.1226400 Rs.1948800





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Diagram of Sales Forecast


































12
0
200000
400000
600000
800000
1000000
1200000
Y 2010 Y 2011 Y 2012
kurta
shawls
shoes
Chapter-6


6. Management Summary:

Employees will be encouraged to work within their creative, physical, and
intellectual boundaries. All duties will be divided and delegated according to
strengths and weaknesses. At New Fashion Bug Clothing, we will expect a
high degree of customer service skills and personality as this is essential to our
success.

6.1 Organizational Structure:

New Fashion Bug Clothing is a small business and therefore, required a
simple organizational structure. All decisions are made in-line with the
company objectives. Employee tasks are delegated based upon their level of
expertise, creativity, strengths and weaknesses.

6.2 Management Team:

Members of Shrestha and Sons will be responsible for all administrative
functions, purchasing, inventory control, and promotions. They can control
over each and every sector of New Fashion Bug Clothing.

6.3 Personnel Plan:

The personnel plan is included in the following table below. There will be one
full-time employee and one part-time employee working 20 to 30 hours per
week. The full-time employee will be paid at a rate of Rs.150 per day and a
part-time employee will be paid at a rate of Rs.80 per day. All employees will
benefit from a one day paid holiday on their respective birthdays and one
week of paid vacation after twelve months of employment.

At this time medical benefits will not be offered to employees. As profits
increase in the future medical benefits will be offered to all employees.














13
Chapter-7


7. Financial Plan:

The growth of New Fashion Bug Clothing will be moderate and the cash
balance will always be positive. Being a retail environment we will not be
selling on credit. We will accept cash and checks. Marketing and advertising
will remain at or below 5% of sales. We will continue to reinvest residual
profits into company expansion, and personnel.

7.1 Important Assumptions:

New Fashion Bug Clothing does not sell on credit nor do we offer layaways at
this time. We accept cash and cheques.

7.2 Projected Profit and Loss:

The following chart and table will indicate projected profit and loss.

Profit Yearly














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0
200000
400000
600000
800000
1000000
1200000
1400000
Y 2010 Y 2011 Y 2012
Net profit
Profit and Loss:


Pro Forma Profit and Loss:
FY 2010 FY 2011 FY 2012
Sales Rs.722400 Rs.1226400 Rs.1948800

Direct Costs of Goods
Other Production
Expenses

Rs.505680

Rs.0

Rs.858480

Rs.0

Rs.1364166

Rs.0
------------- ------------- -------------
Cost of Goods Sold Rs.505680 Rs.858480 Rs.1364166

Gross Margin
Gross Margin (%)

Rs.505680
70%

Rs.858480
70%

Rs.1364166
70%

Expenses:
Sales and Marketing
and Other Expenses
Depreciation
Telephone/Pagers/Cell
Rent



Rs.7000
Rs.0
Rs.10000
Rs.60000



Rs.7200
Rs.0
Rs.12000
Rs.60000



Rs.7500
Rs.0
Rs.15000
Rs.60000
------------- ------------- -------------

Total Operating
Expenses


Rs.77000


Rs.79200


Rs.82500

Net Profit

Rs.428680

Rs.779280

Rs.1281666












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7.3 Projected Balance Sheet:

The following table explains the projected balance sheet.

Balance Sheet









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Pro Forma Balance Sheet:
Assets Y 2010 Y 2011 Y 2012

Current Assets:
Cash
Inventory
Other Current Assets


Rs.100000
Rs.50000
Rs.0


Rs.225000
Rs.100000
Rs.0


Rs.300000
Rs.175000
Rs.0
Total Current Assets Rs.150000 Rs.325000 Rs.475000

Long-term Assets
Accumulated
Depreciation

Rs.0

Rs.0

Rs.0

Rs.0

Rs.0

Rs.0
Total Long-term Assets Rs.0 Rs.0 Rs.0
Total Assets Rs.150000 Rs.325000 Rs.475000

Liabilities and Capital

Y 2007

Y 2008

Y 2009

Current Liabilities:
Long-term Liabilities


Rs.100000


Rs.50000


Rs.25000
Total Liabilities Rs.100000 Rs.50000 Rs.25000

Net Worth

Rs.50000

Rs.275000

Rs.450000
Conclusions:

As it is clear that small scale industry play a significant role in the industrialization
process of Nepal and industrialization, it is the backbone of economic development of
any countries. Thus, various government, semi government and non government
institutions involved in the enterprise promotion and development should utilize the
professional strength and technique for economic development of the country.

Since the business that has been mentioned above comes under the small business and
our business promotes the latest and stylish wear for the women. The product that we
are going to launch is very rarely found in the market specially the Pakistani kurtas,
which are very rare in the city. As we have planned to start this new business we are
very hopeful that the customers will love our products and increase the sale every
year. The women population can consume the very new and latest products.

To make the business run smoothly government should make more feasible policies
for small investors, only then the economic development of the country and the
entrepreneurs are possible.































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Bibliography


Agrawal, Govind Ram Entrepreneurship and Small Business
Management in Nepal, M.K. publishers and distributors.

Pant, Prem Raj fieldwork assignment and report writing
Veena Academic Enterprises Pvt. Ltd.

Weston, Beasley, Brigham Essential of Managerial Finance
11
th
edition.

Internet websites on various clothing raw materials.

Guidance from Shringar Fashion Designing and Boutique,
Baneshwor.

























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