Вы находитесь на странице: 1из 25

University of Tennessee, Knoxville

Trace: Tennessee Research and Creative

University of Tennessee Honors Tesis Projects University of Tennessee Honors Program
Flourish Boutique
Casey Marie O'Rourke
University of Tennessee - Knoxville
Follow this and additional works at: htp://trace.tennessee.edu/utk_chanhonoproj
Part of the Marketing Commons
Tis is brought to you for free and open access by the University of Tennessee Honors Program at Trace: Tennessee Research and Creative Exchange. It
has been accepted for inclusion in University of Tennessee Honors Tesis Projects by an authorized administrator of Trace: Tennessee Research and
Creative Exchange. For more information, please contact trace@utk.edu.
Recommended Citation
O'Rourke, Casey Marie, "Flourish Boutique" (2009). University of Tennessee Honors Tesis Projects.

" #$%&'( )*+',$++ -(&,

.&+$/ 01 23#4*56$
7$,'45 84,45 9:$+'+ -54;$<%
=&<*(%/ 0$,%45> ?&<6 0'((+
0&/ @AAB
Flouiish Boutique

9")CD 2= .2E9DE97

Executive Summaiy 1

Business Besciiption anu vision 2
Company 0veiview 2
Nission Statement 2
vision Statement 2
values Statement S
uoals anu 0bjectives S
0iganization anu Stiuctuie S
Business Location S

Naiket Analysis anu Foiecast 4
Inuustiy 0veiview 4
Nacioenviionmental Analysis 4
Competitoi Analysis S
Taiget Naiket Iuentification 7
Customei Piofile 7
Naiket-Baseu Sales Foiecast 8

Naiketing Plan 1u
Piouucts Seivices 1u
Place 11
Piice 11
Piomotion Auveitising 11

Nanagement Summaiy 12
0wnei Nanagei 12
Peisonnel 1S
Consultants 14

Financial Plan 14
Staitup Funuing 14
Income Statement 14
Balance Sheet 1S
Cash Flows 1S
Bieak-even Analysis
Impoitant Ratios

Appenuix i-vii


Flouiish is a contempoiaiy women's appaiel anu accessoiies boutique that will
open in uowntown Knoxville, Tennessee. The iuea foi the business was initially geneiateu
in oiuei to fill a voiu in the cuiient maiket. Flouiish will pioviue the young, female
consumei with a combination of piouucts anu seivices that is unlike anything offeieu thus
fai. The goal of the business is to uelivei a unique yet stylish collection of appaiel anu
accessoiies that changes fiequently, peisonal seivice, a fiienuly anu ielaxeu atmospheie,
anu piices that won't bieak the bank1
The name, Flouiish, was chosen because it implies a sense of vitality anu expiession,
anu these aie two iueas that coulu easily be useu to uesciibe the business' taiget customei.
The Flouiish customei enjoys fashion anu seeks appaiel anu accessoiies that aie tienuy,
yet still allow hei to stanu out a little fiom the ciowu. She seeks an infoimal, unstuffy
shopping enviionment but expects attentive associates. All of these things aie what
Flouiish will pioviue.
Although still young, the Flouiish ownei anu managei alieauy has substantial ietail
expeiience anu will apply hei woik anu euucational knowleuge to effectively iun the
business as a sole piopiietoiship. The stoie's location in Naiket Squaie will help it to
capitalize on the giowing uowntown Cential Business Impiovement Bistiict anu heavy
aiea foot tiaffic.
0sing maiket-baseu sales foiecasting, Flouiish is expecteu to bieak even within the
fiist yeai of opeiations. Net Income fiom Yeai 1 is estimateu at aiounu $Su,uuu.uu anu
shoulu giow to ovei $48,uuu.uu by the enu of Yeai S. Although the ietail inuustiy has been
in a uecline uue to the economic iecession, consumei confiuence has iecently begun to iise.
This fact, along with the asseition that the stoie will fill a gap in the cuiient maiket ensuies
that Flouiish will live up to its name anu continue to exhibit giowth well beyonu the thiiu

)G7HED77 KD7.#H-9H2E "EK IH7H2E

The puipose of this business plan is to fill a noticeable voiu in the Knoxville women's
appaiel maiket. The pioposeu boutique, Flouiish, will combine elements of existing stoies
in oiuei to meet the maiket's neeus in the best way possible. 0p until this point, the female
Knoxville shoppei has been foiceu to unueigo a constant evaluation of benefits anu
saciifices. Bei ietail options aie as follows:

1. The Nall- Beie, she can finu pieuictable quality anu basic seivice backeu by national
bianu names. Knoxville mall stoies, specifically, offei all of this at ieasonable piices;
howevei, because of mass piouuction, the mall shoppei will finu it neaily impossible to
maintain a unique style.
2. "0pscale" Boutiques- The upscale boutique shoppei enjoys unbeatable quality, peisonal
seivice, anu one of a kinu looks set to a chic, aesthetically pleasing atmospheie. This luxuiy
shopping expeiience comes at a luxuiy piice, though. Nost Knoxville boutiques ievieweu
that follow this uesciiption piice uiesses, foi example, at upwaius of $Suu to even $Suu.
Some shoppeis also finu the atmospheie in ceitain upscale boutiques to be a little "stuffy,"
anu in the woist cases even intimiuating.
S. All 0thei Boutiques- In the iemaining biick-anu-moitai appaiel ietaileis, piices aie
moie ieasonable anu the female shoppei is at least not foiceu to succumb to the
stanuaiuization of mass piouuction. Bowevei, she IS still foiceu to make some saciifices.
As piices fall, quality begins to become moie questionable, sales associates become less
attentive, anu piouuct vaiiety begins to uwinule as all of this season's haltei tops begin to
look the same.
4. 0nline Shopping- With the wealth of online offeiings, it is almost guaianteeu that the
female shoppei can finu what she is looking foi at a piice she can affoiu. Bowevei, she will
have to give up the ieassuiances of fitting iooms anu peisonal contact while auuing on
shipping fees.

The opening of Flouiish will intiouuce option five, pioviuing the customei with the
best of the best. The key elements to success will incluue: a unique yet stylish collection of
appaiel anu accessoiies that changes fiequently, peisonal seivice, a fiienuly anu ielaxeu
atmospheie, anu piices that won't bieak the bank.

Flouiish will be a leauei in the Knoxville ietail sectoi by offeiing customeis unique
anu stylish women's appaiel anu accessoiies at affoiuable piices. The stoie will pioviue a
ielaxeu anu easy-going atmospheie in which to shop, anu its pations will enjoy top-notch
customei seivice anu benefits.

Flouiish will pioviue all the necessaiy piouucts anu seivices to outfit the young,
Knoxville female in styles that make hei feel confiuent anu unique. This will be achieveu
fiist thiough the setup of biick-anu-moitai establishment anu latei thiough the auuition of
an online stoie.

Flouiish is committeu to the following values:
- Naintaining the utmost level of integiity in all customei anu venuoi
- Euucating customeis about iecent fashion tienus anu how to piopeily style
theii puichases.
Anu most impoitantly.
- Neeting customei neeus anu wants at all times.

u0ALS anu 0B}ECTIvES

L4&( 2M;$<%'N$
- Stock appaiel anu accessoiies foi
women that cannot easily be founu
- Souice fiom appaiel maikets that aie
not stanuaiu foi local boutiques (i.e. the
Las vegas maiket insteau of Atlanta oi
Ballas maikets).
- Belivei exceptional customei seivice at
all times.
- Biie associates that aie enthusiastic,
love fashion, anu have gieat inteipeisonal


- Be not only a souice foi fashion
puichases, but be a souice foi fashion
knowleuge as well.
- Ensuie that all employees aie well-
veiseu in the latest tienus anu styles
thiough ongoing tiaining.
- 0ffei an aiiay of customizeu style news
to customeis.
- Bieak even within the fiist yeai of
- Achieve sales of at least Suu,uuu in Yeai
1 in oiuei to covei all expenses.
- Expeiience giowth of 1S% aftei the fiist
yeai, anu S% giowth aftei Yeais 2 anu S.
- Piopeily ie-invest a peicentage of net
income to ensuie futuie expansion.

- Achieve piofit maigins of 1S% by the
enu of Yeai S.
- Closely monitoi expenses anu the Cost
of uoous Solu at all times.

Flouiish will be oiganizeu as a Sole Piopiietoiship uue to the ease of oiganization
anu simplicity of stiuctuie. The business will be piimaiily owneu anu manageu by Casey
0'Rouike. The following licenses anu peimits will be iequiieu:
- Knoxville Class II Business License
- Tennessee state tax IB numbei
- Tennessee sales tax license
- Feueial Employei IB numbei

Flouiish will be locateu in uowntown Knoxville, specifically in Naiket Squaie. This
uecision has been maue baseu on economic factois of the aiea anu on the notion that the
uowntown community is well aligneu with the image that Flouiish woulu like to poitiay.

Nany ietail establishments in the aiea aie local, not chain locations, anu offei unique
piouucts anu seivices.
Naiket Squaie consists of ovei thiity businesses gioupeu aiounu a cential mall with
benches, fountains, anu a stage. The aiea coveis about two acies, anu the Squaie is often
home to conceits, festivals, anu special events. A majoi uownsiue of Naiket Squaie is that it
is not easily visible fiom any majoi uowntown ioaus, so the businesses theie iely heavily
on foot tiaffic.

Naiket Squaie is pait of Knoxville's Cential Business Impiovement Bistiict (CBIB),
which is a u.67 squaie mile aiea of uowntown that featuies a high concentiation of
businesses, shops, anu iestauiants. Bue to its commeicial natuie, this small aiea is only
home to aiounu 1,7uu iesiuents. Bowevei, by encompassing the aiea that lies just ten
minutes out fiom the CBIB, that iesiuential count incieases to 16S,8u9 (which is almost the
entiie city population). Fuitheimoie, the CBIB benefits fiom a laige numbei of employees,
ovei 22,uuu, that woik uowntown eveiy uay. Flouiish's location in Naiket Squaie will
allow access to the many benefits that the CBIB has to offei, some of which incluue possible
piopeity tax incentives anu minimum chaiges foi plans ieview anu peimitting.

See Appenuix F foi moie infoimation on location.

0"#OD9 "E"CJ7H7 &,P =2#D."79

Flouiish will opeiate in the ietail inuustiy, anu moie specifically in the Women's
Appaiel Inuustiy, which iepiesents a business woith well ovei $4u billion nationwiue. The
uemanu foi women's appaiel is faiily volatile anu ielies heavily on uiscietionaiy income
levels, seasonal changes, anu fashion tienus. Baseu on 2uu8 figuies, the aveiage women's
appaiel ietailei achieveu opeiating piofits of 4.2% of ievenue, befoie tax; howevei, this
numbei vaiies baseu on the thiee inuustiy foices listeu above.

The baiiieis to entiy in the Appaiel Retail Inuustiy aie ielatively low; setting up a
single, inuepenuent ietail establishment uoes not iequiie much capital. The inuustiy is
"moueiately concentiateu,"
anu theie is substantial ioom foi small stait-ups. Consumei
switching costs aie low. People aie geneially moie loyal to a ceitain uesignei iathei than to
a ceitain stoie. The thieat of substitutes is also low; the only othei options in auuition to
ietail puichases aie foi consumeis to buy clothes uiiectly fiom the manufactuiei oi to
make them themselves.

The factoi that has iecently hau the laigest impact on the ietail inuustiy has been
the economic iecession that began in 2uu8. The slow giowth of the economy has leu to a
ieuuction in consumei confiuence anu spenuing. Since the success of ietail businesses
uepenus uiiectly on consumei spenuing, the inuustiy has suffeieu a majoi blow. Retaileis
have been foiceu to slash piices (especially uuiing the 2uu8 holiuay shopping season), cut
jobs, anu even close theii uoois. The iecession initially only affecteu low anu miuule class
consumeis, but as it has piogiesseu, it has tiickleu upwaius to affect uppei class

City of Knoxville, www.ci.knoxville.tn.us, 2uu9
Bowntown Knoxville, www.uowntownknoxville.com
IBISWoilu Inuustiy Repoit, "Women's Clothing Stoies in the 0.S.," }an. 27, 2uu9
Batamonitoi Inuustiy Piofile, "Appaiel Retail in the 0niteu States," Sept. 2uu8

consumeis as well. As a iesult, even luxuiy ietaileis such as Saks Fifth Avenue aie feeling
the squeeze. The iecession is pieuicteu to continue well into 2uu9, anu some even say that
things will get woise befoie they get bettei. In iesponse, many consumeis aie simply
"tiauing uown." Neiman Naicus shoppeis aie shifting theii focus to the moie affoiuable
Noiustiom, anu uiscount ietaileis like T.}. Naxx anu consignment stoies have gaineu
populaiity in iecent months
Technology auvancements affect all business inuustiies, anu ietail is no exception.
Almost all ietail chains anu even many smallei boutiques have moveu on fiom hanuwiitten
tags anu ieceipts anu simple cash iegisteis. They now use baicoues, scanneis, anu
computeis at checkouts. Although the initial investments foi these technologies may be
substantial, the iesulting savings of time anu money aie usually woith the costs. Laigei
ietails, such as Noiustiom, now use auvanceu Customei Relationship Nanagement
softwaie. These systems captuie anu tiack customei infoimation at the point of sale, which
gives salespeople anu stoie management the ability to bettei analyze customei uemanu.
Anothei technological tienu affecting this inuustiy is the incieasing populaiity of
e-commeice, oi online ietailing. Selling meichanuise via the Inteinet often allows ietaileis
to ieach a much laigei maiket than tiauitional biick-anu-moitai establishments. viitual
stoies also save money on ieal estate expenses, BR employee compensation, anu othei
opeiating costs. Nost significantly, amiust the cuiient economic iecession, many ietaileis'
online businesses thiiveu while theii tiauitional stoies incuiieu losses
All of these macioenviionmental factois will ceitainly have an impact on Flouiish.
Fiist of all, opening a ietail stoie in such uifficult anu unceitain economic times will piove
to be veiy challenging. Bowevei, in this enviionment, the fact that Flouiish will offei
appaiel anu accessoiies at veiy competitive piices will ceitainly be an auvantage.
Bopefully, Flouiish will be able to captuie some of the Knoxville consumeis who have
tiaueu uown fiom shopping at highei-enu boutiques. In iegaius to technology, Flouiish
must stay up-to-uate. Some soit of Customei Relationship Nanagement system will be
necessaiy to piopeily piofile Flouiish shoppeis. This may inciease staitup costs, but it
shoulu pay off latei in the foim of impioveu efficiencies. Finally, the focus of this plan will
iemain on the biick-anu-moitai Flouiish establishment; howevei, a majoi goal of the
business is to open an online stoie aftei the name has been piopeily establisheu in the
Knoxville maiket. The intiouuction of an online stoie will help Flouiish captuie a segment
of the giowing e-commeice maiket.

Bue to Knoxville's size, theie aie ielatively few stoies that will be in uiiect
competition with Flouiish. Some of these competitois incluue the following: Bliss, 0bligato,
Bella Boutique, Elle Boutique, Fiancesca's, anu Seienuippity. With the exception of
Fiancesca's (which is a chain), all of these stoies aie local boutiques that catei to a similai
uemogiaphic as Flouiish. The following chait lists a few of these competitois, citing theii
stiengths anu weaknesses ielative to Flouiish. To evaluate piicing, a iough estimate of an
aveiage uiess piice at each establishment (obtaineu thiough peisonal ieseaich) is listeu.
Although the measuiement is somewhat subjective, consiueiing Flouiish's taiget

}ayne 0'Bonnell, "Biscount Retaileis Benefit Fiom Recessionaiy Shoppeis," !"#$"%&' Feb. 27, 2uu8
Lauia Kenneuy, "Retaileis Finu Silvei Lining in E-Commeice," )*+,*-."%/& 0#&*-"&& !"&1#%2" 3"-$"%,
Feb. 26, 2uu8

consumei, piices less than $1uu aie consiueieu "ieasonable" anu piices moie than $1uu
aie consiueieu "high."

.4QR$%'%45 7%5$,S%:+ T$&6,$++$+
Bliss - 0nique appaiel, accessoiies, gifts,
anu home ucoi
- Reasonably piiceu (Aveiage uiess
piice = $8u)
- uifts anu home ucoi compiise
ovei half of the inventoiy, so appaiel
selection is limiteu
Elle Boutique - Tienuy clothing that is otheiwise
haiu to finu in Knoxville
- Peisonal seivice
- Bighei piices (Aveiage uiess piice
= $2Su)
Fiancesca's - Tienuy appaiel, accessoiies, anu
- Inventoiy changes upuateu
- veiy affoiuable (Aveiage uiess
piice = $Su)
- Also have an online stoie
- National chain, so pieces aien't as
- Inconsistent quality
Seienuippity - 0p-to-uate clothing, shoes, anu
accessoiies that stiongly ieflect
celebiity fashions
- Affoiuable (Aveiage uiess piice =
- Small, ciampeu stoie that is
uifficult to navigate
- Associates can be inattentive
- Styles can be seen as T00 tienuy
anu lacking uniqueness

Consiueiing the infoimation fiom this chait, theie aie no cuiiently existing
Knoxville ietaileis that aie exactly like Flouiish. Flouiish will offei a laigei appaiel anu
accessoiies selection than Bliss, moie affoiuable piices than Elle Boutique, moie unique
pieces than Fiancesca's, anu a bettei layout anu fiienuliei associates than Seienuippity.
Flouiish will also compete with innumeiable online ietaileis. Nany of these ietaileis
will offei some of the same piouuct bianus as Flouiish, anu they may even offei them at
lowei piices. Bowevei, Flouiish's auvantage is that customeis will actually be able to see,
touch, anu tiy on the meichanuise befoie making a puichase uecision. They will also be
able to woik with a sales associate one-on-one anu avoiu shipping costs anu auueu fees.

The geogiaphics, uemogiaphics, psychogiaphics, anu behavioial aspects of the
Flouiish customei aie as follows:

ueo Bemogiaphics
- Resiues in Knoxville, TN
- 16-SS yeai-olu female
- Bigh school college stuuent oi young piofessional
- Income > oi = $Su,uuu
- Bighly social
- Watches Biavo, E!, anu Style
- Nusic inteiests uiift outsiue the iecent Top 4u
- Reaus 41.#", 5#267, anu 8-9$7,"
: Finus excitement in tiying new things
- Bighly ieliant on technology (Cell-phone, laptop, etc.)
Buying Patteins
- Shopping is vieweu as a past-time
- Spenus aiounu $1,uuu yeai on clothes
- Keeps up with the latest tienus, but uoes not weai them heau-to-toe
- Seeks unique yet veisatile pieces
- Closet ieflects a balance of quality anu quantity

The taiget customei foi Flouiish is a 16-SS yeai-olu female. When she is not
shopping, the Flouiish customei is eithei a stuuent oi young piofessional. As a stuuent, hei
income is minimal anu as a young piofessional she has not yet woikeu long enough to
establish a significant net woith, so in both cases she is buuget conscious. That being saiu,
the Flouiish customei is not afiaiu to spluige eveiy once in a while on a gieat paii of jeans
oi some fabulous heels. 0sually, she shops aiounu foi ueals, but impeccable seivice coulu
be the push to conveit hei to a loyal customei.
The Flouiish customei uieams of one uay owning looks by high-enu uesigneis such
as Bioi anu Noschino. She follows a wealth of miu-iange uesigneis, too, like Naic by Naic
}acobs anu See by Chloe, but she can only begin to seiiously consiuei theii meichanuise
once it is heavily maikeu uown. She scouis the Inteinet anu fashion magazines foi styling
iueas anu inspiiation, anu she piiues heiself in making affoiuable appaiel appeai as if it
actually cost hei a month's pay. She is not afiaiu to bianch out to uo so, be it thiough eBay,
thiift stoies, oi vintage shops.
Foi the Flouiish customei, shopping is a social past time that she often enjoys with
hei giilfiienus on the weekenus. They will take theii time to biowse anu tiy things on, anu
while they aie well-veiseu in fashion they still appieciate the opinions anu appioval of
salespeople. Bue to the social natuie of the Flouiish customei, she enjoys fashion-ielateu
events. Fashion shows, sample sales, anu uesignei pieview events coulu easily fit in to hei
social calenuai.

As of 2uuS, the total Knoxville population that liveu within ten minutes of the
Cential Business Impiovement Bistiict (the aiea in which Flouiish will be locateu) was
Aujusting foi an aveiage Knoxville population giowth iate of 4.4% woulu biing
that numbei in 2uu9 to 212,u96.
The following figuies illustiate the steps taken to
ueteimine the total taiget maiket.

- Total population 1u minutes fiom CBIB (2uu9)
- Peicentage of female Knoxville population
- Total females 1u minutes fiom CBIB 11u,u78
- Peicentage of Knoxville population ageu 16-SS
- Total females, 16-SS 1u minutes fiom CBIB S8,Suu
- Estimateu peicentage falling into taiget maiket Su%
- Total taiget maiket 19,1Su

Fiom the auvisoiy of a foimei women's appaiel boutique ownei, it was ueteimineu
that of the 19,1Su taiget customeis, only about half will even entei the stoie in the fiist
yeai uue to low awaieness.
This numbei is iepiesenteu below as the "total captuieu
maiket." Fuitheimoie, aveiage ietail conveision iates usually fall between 2u% anu
it is assumeu that the conveision iate foi Flouiish will be on the lowei enu of this
spectium uue to the high amount of peuestiian tiaffic in Naiket Squaie. This is similai to
the enviionment of tiauitional shopping malls- many customeis aie just biowsing oi killing
time insteau of ieally buying.

- Total taiget maiket 19,1Su
- Total captuieu maiket (Yeai 1) 9,S7S
- Estimateu conveision iate
- Total paying customeis pei yeai 2,S94
- Naiket shaie (Yeai 1) 12.S%

The final gioup of 2,S94, iounueu to an even 2,4uu, can be bioken uown fuithei into
thiee gioups, which aie uesciibeu in the chait below: infiequent shoppeis, moueiately
fiequent shoppeis, anu loyal shoppeis. The aveiage consumei makes a total of twenty-two
shopping tiips pei yeai foi appaiel anu spenus about $918 annually.

Knoxville Neighboihoou Piofile, iealestate.yahoo.com, Yahoo! Real Estate, 2uu9
Knoxville City Fact Sheet, factfinuei.census.gov, 0.S. Census Buieau, 2uu7
Shaii Baluingei, Peisonal Inteiview, Apiil 29, 2uu9
Amanua Feiiante, "Retaileis Counting on Conveision Analysis to Biive Stoie Netiics," !"$;*, <1#2=>1*-$&,
Naich 7, 2uu8
"ulobal Consumei Appaiel Shopping Tienus," 31$$1- 8-21%+1%;$"?, 2uu6

V 4W
94%&( X 4W
pei month S.uu% 12u $Su.uu $9uu.uu $1u8,uuu.uu
times pei
yeai (4-12) 1S.uu% S6u $Su.uu $Suu.uu $1u8,uuu.uu
A few times
pei yeai 8u.uu% 1,92u $Su.uu $7S.uu $144,uuu.uu
T0TAL REvEN0ES - YEAR 1 $S6u,uuu.uu

Assuming that Flouiish is able to achieve its giowth goals, sales foi the fiist five
yeais will iesult as follows:

Yeai 1 Yeai 2 Yeai S Yeai 4 Yeai S
uiowth 1S.uu% S.uu% S.uu% 2.Su% 2.Su%
Sales $S6u,uuu.uu $414,uuu.uu $4S4,7uu.uu $4S6,4SS.uu $479,2S7.uu

A second chart is provided below to give a more detailed look into Flourishs sales for
Year 1. The total forecast is broken up by month and reflects the seasonality of womens
clothing stores.

"Nonthly Retail anu Foou Seivices: Sales anu Inventoiies" 0.S. Census Buieau, 2uu7


0"#OD9HEL -C"E

Flouiish will sell ieauy-to-weai casual, contempoiaiy appaiel anu accessoiies foi
women. Nany of the bianus to be solu will be selecteu at appaiel maikets, but some
possibilities incluue the following:
- Kensie - Bogeaieu - }ames }eans - Baven
- Peppei - Scout by Bungalow - NN Coutuie - Nink Pink
An effoit will be maue to showcase local talent as well, especially in the aiea of
jeweliy anu accessoiies.
In auuition to gieat piouucts, Flouiish will also offei a vaiiety of seivices. The
Flouiish website will launch in accoiuance with the stoie's gianu opening anu will incluue
impoitant stoie infoimation anu fashion-ielateu content. Theie will be a Style Blog section,
which will be wiitten by the stoie ownei anu will featuie upuates on the latest tienus anu
how to weai them (of couise, highlighting Flouiish's meichanuise). The website will also
infoim visitois on the latest happenings anu ueals at Flouiish. Latei on, a section foi online
shopping will be auueu. This auuition will be planneu as soon as Flouiish has establisheu a
substantial maiket piesence anu the financial anu enviionmental conuitions aie iight.
The next seivice that Flouiish will pioviue will take place with its employees. The
sales associates will actually be thought moie as "Stylists" who pioviue peisonal shopping
seivices. These seivices will be moie heavily concentiateu in Flouiish's oluei taiget maiket
since youngei females tenu to shop in laigei gioups anu iely moie heavily on the opinions
of fiienus. Bowevei, this fashion knowleuge can still be a valuable tool foi suggestive
In iegaius to the piouuctseivice mix, Flouiish seivices (website news, Stylists, etc.)
will fulfill the value of "Euucating customeis about iecent fashion tienus anu how to
piopeily style theii puichases." Nost impoitantly, both piouucts anu seivices will always
be tailoieu to fulfill the value of "Neeting customei neeus anu wants at all times" (see

Piouucts will be souiceu fiom ietail wholesaleis at appaiel maikets in the 0niteu
States. In oiuei to pioviue a unique piouuct assoitment, appaiel maikets will be chosen
that aie not stanuaiu foi local boutiques. Nany local boutiques souice fiom the Atlanta anu
Ballas maikets foi pioximity ieasons, so Flouiish appaiel anu accessoiies will be souiceu
fiom places like Las vegas.
Flouiish will be locateu in Naiket Squaie (see B0SINESS L0CATI0N) in a giounu
level space that encompasses 2,2S2 squaie feet. The piouucts will be neatly meichanuiseu,
allowing foi plenty of ioom to move fieely about the stoie.
See Appenuix F foi moie infoimation on location.

In 2uu8, the aveiage gioss maigin foi women's appaiel stoies was 44.S%.
on the fact that Flouiish is somewhat of a specialty ietailei with unique piouucts anu
seivices, the gioss maigin goal will be set at Su%. Theiefoie, piouucts in the stoie will
ietail foi uouble the wholesale piice. With the exception of just a few items (i.e. piemium
uenim anu special occasion uiesses), piice points at Flouiish will iemain below $1uu.

The following section will uesciibe piomotional anu auveitising methous that will
be useu to euucate the taiget maiket about Flouiish. Although many of the selecteu
methous aie fiee, a list of pioposeu costs is incluueu at the enu of the section.
The initial goal of Flouiish piomotions will simply be to cieate awaieness.
Theiefoie, the business will be heavily ieliant on woiu-of-mouth foi the fiist yeai oi so.
Pait of the job of Flouiish associates will be to tell all of theii fiienus anu family about the
stoie. Anothei majoi asset that will be useu foi piomotion is the use of social netwoiking
sites like Facebook, NySpace, anu Twittei. These fiee websites aie all useu fiequently by
membeis of the Flouiish taiget maiket anu aie gieat ways to keep customeis upuateu on
new piouucts, stoie events, etc.
The stoie website will also help euucate potential customeis about Flouiish. At fiist,
the website will be puiely infoimational, incluuing things like location, uiiections, houis,
bianus, anu fashion-ielateu content like the StyleBlog. An e-commeice poition of the site
will be auueu once it is ueteimineu that the Flouiish name has been well-establisheu in the
maiket, piobably soon aftei the fiist yeai of opeiation. 0nce this is set up, seaich engine
optimization will be useu to help maiket the online stoie.
Public ielations will also play a pivotal iole in the maiketing mix since it is both fiee
anu highly cieuible. The ownei will senu piess ieleases about Flouiish's gianu opening to
aiea newspapeis anu magazines like the Knoxville News Sentinel, the Baily Beacon, the
NetioPulse, anu Skiit!. This will be uone in the hopes that the newspapeis will publish
aiticles about the intiouuction of Flouiish in theii piint oi online euitions. Anothei fiee anu
easy way to piomote the Flouiish name will be thiough stoie listings on Knoxville touiism
anu infoimational websites. Some of these websites incluue the Knoxville city website-
www.ci.knoxville.tn.us, the Naiket Squaie website- www.knoxvillemaiketsquaie.com,
knoxville.oig, anu the uowntown Knoxville website- www.uowntownknoxville.com. It is
also necessaiy that Flouiish is listeu in the Knoxville visitoi's uuiue, which is uistiibuteu
thiough the Knoxville visitoi Centei anu aiea hotels anu attiactions to thousanus of

"Benchmaiks: Women's Appaiel Stoies," !"$;*, @A-"%& 8-&$*$#$", 2uu8

visitois each yeai. 0sually, ensuiing the inclusion of Flouiish on these lists will be as simple
as senuing out a notification.
In auuition to fiee P.R. in local newspapeis anu magazines, paiu auveitising will also
be useu. The selecteu channels foi auveitisements incluue the following: the Baily Beacon,
the NetioPulse, anu Skiit! Nagazine. Reaueiships foi these publications aie S4,8uu;

anu Su,uuu,
iespectively. These auveitisements will be most heavily
concentiateu aiounu the time of the Flouiish uianu 0pening anu othei events.
Nembeis of the Flouiish taiget maiket aie highly social anu take fashion seiiously.
Theiefoie, special in-stoie events will be helu that meige these two aspects, while at the
same time geneiating positive woiu-of-mouth anu piouucing sales. Iueas foi such events
incluue Sample Sales, Runway Shows, anu Fashion Pieviews. Sample Sales will moie than
likely be helu with local uesigneis anu will allow them to showcase theii waies at slightly
uiscounteu piices. Runway Shows woulu allow customeis to get a fiist glimpse at the next
season's looks, moueleu by Flouiish associates. Finally, Fashion Pieview events woulu be
ieseiveu as a benefit foi Flouiish's most loyal customeis. Buiing these pieviews, pictuies
of the items oiueieu at maiket woulu be on uisplay befoie the actual gaiments aiiive.
Loyal customeis woulu have the fiist pick, anu coulu ieseive theii favoiite styles on the
spot. These events have the potential to geneiate a gieat ueal of awaieness, anu yet they
woulu be ielatively inexpensive to holu. Costs woulu incluue event piomotions anu minoi
extias like iefieshments.
Finally, unique anu attiactive stoie uisplays will be an essential piomotional tool foi
attiacting passeisby. The winuows will be iotateu out fiequently as new shipments aiiive,
anu they will uisplay the meichanuise in the most appealing way possible. The piioi ietail
expeiience of the ownei has given hei the expeitise to cieate such uisplays heiself. Ninoi
costs will be incuiieu thiough the puichase of uisplay accessoiies.

Annual Naiketing Costs
- Newspapei anu magazine aus $S,uuu.uu
- In-stoie events $1,uuu.uu
- Bisplay accessoiies $2Su.uu

0"E"LD0DE9 7G00"#J

Although just a iecent college giauuate, the ownei of Flouiish, Casey 0'Rouike,
alieauy has almost six yeais of ietail expeiience. Since the age of sixteen, Casey has woikeu
foi a Nemphis boutique, }.Ciew, anu Banana Republic. She also helu a Retail Nanagement
Inteinship with Noiustiom, uuiing which she leaineu eveiything theie is to know about
iunning a ietail establishment. This expeiience has alloweu Casey to gain substantial
knowleuge that is paiticulaily ielevant to opening hei own clothing anu accessoiies stoie.
She has an unueistanuing of the following aieas: meichanuising, loss pievention,
management, shipmentieplenishment, anu most impoitantly- customei seivice.

<=" B;*,7 0";21-, uailybeacon.utk.euu, 2uu9
C"$%1 >#,&", www.metiopulse.com, 2uu9
96*%$D Nagazine, www.skiit.com, 2uu9

Nost of the necessaiy skills that Casey uiu not leain fiom hei woik expeiience, she
gaineu fiom hei schooling. With a B.S. of Business Auministiation in Naiketing anu
Inteinational Business, Casey has hau exposuie to finance, accounting, infoimation
technology, stiategy uevelopment implementation, piouuctseivice management, anu of
couise, maiketing. Casey fully unueistanus that the "consumei is boss," anu she hopes to
uiive hei business with that mantia.

In auuition to the stoie managei, one assistant managei will be hiieu as an houily
employee to be piesent when Casey is unavailable. Aiounu five sales associates will be
hiieu; the exact numbei will vaiy uepenuing on theii availabilities. Noie than likely, many
of the associates will be college stuuents, so scheuuling will neeu to be somewhat flexible.
The iuea is that one managei oi assistant managei will be piesent in the stoie uuiing
business houis, along with one associate. Peisonnel coveiage woulu vaiy slightly accoiuing
to the seasonality of the business (foi example, moie than one associate woulu be neeueu
uuiing the holiuay shopping season).
The assistant managei will be paiu at a iate of appioximately $1S.uu houi (this
may change, uepenuing on expeiience). All associates will be paiu $8.uuhi, anu both
employee gioups will be paiu a S% commission on sales of at least $Su. This base pay +
commission stiuctuie was uevelopeu to eliminate the competitive natuie of puiely
commission-baseu sales, while still pioviuing motivation to geneiate positive iesults. The
minimum $Su amount was set to encouiage all associates to "upsell." Although theii
minimum amount is set at $1Su, }.Ciew uses a similai commission stiuctuie, anu it is
paiticulaily effective.
Piioi to the stoie's gianu opening, two tiaining sessions of foui houis each will be
helu foi all manageis anu associates. Two auuitional foui houi tiaining sessions will be
helu just foi the assistant managei. Aftei the stoie's opening, tiaining will be ongoing.
Aftei-houis meetings will be helu to euucate associates on new bianus, piouucts, anu
policies as neeueu. Employees will be paiu theii houily base pay with no commission foi all
tiaining sessions.

-$5+4,,$( DYR$,+$+
84*5+ R$5
-&/ #&%$
E*QM$5 4W
94%&( T$$6(/
94%&( 04,%:(/
2S $1S.uu 1 $S7S.uu $1,Suu.uu
1S $8.uu S $6uu.uu $2,4uu.uu
Total Nonthly Peisonnel Expense $S,9uu.uu

.4QQ'++'4, DYR$,+$+
9'Q$ -$5'4P .4QQ'++'4,$P
.4QQ'++'4, -&'P
Yeai 1 $216,uuu.uu S% $1u,8uu.uu
Yeai 2 $248,4uu.uu S% $12,42u.uu
Yeai S $26u,82u.uu S% $1S,u41.uu

Some of the initial seivices iequiieu foi the set-up of the business will have to be
outsouiceu to consultants; the Flouiish employees will not have all of the necessaiy skills
to peifoim these tasks. The following consultants will be useu, anu theii estimateu costs
can be founu at the enu of the section.

- Accounting: A licenseu CPA will be hiieu to assist with the piepaiation of tax ietuins anu
financial statements, anu to help manage the "books" on as-neeueu basis. The CPA's fiim
will also be useu to piocess payioll.
- Legal: An attoiney will be hiieu initially to assist in the legal foimation of the business.
Aftei the foimation is complete, the attoiney may help with any othei legal issues that may
aiise uuiing the couise of business.
- Web Besign: Flouiish's initial website will launch in accoiuance with the stoie's uianu
0pening anu will featuie location, uiiections, houis, bianus, anu fashion-ielateu content
like the StyleBlog (see PR0B0CTSSERvICES). Aftei the fiist uesign, the ownei will upuate
the website, as she has some pievious expeiience with site maintenance.
- Inteiioi Besign: Befoie any meichanuise evei aiiives, the ienteu commeicial space in
Naiket Squaie must be uesigneu to appeal to taiget customeis. An inteiioi uesignei will be
hiieu to help tuin this space into Flouiish.

Estimateu Consulting Costs
- Accounting (annually) $2,Suu.uu
- Legal (fiist yeai) $1,uuu.uu
- Web Besign (one-time fee) $1,uuu.uu
- Inteiioi Besign (one-time fee) $2,uuu.uu

=HE"E.H"C -C"E

Staitup expenses foi Flouiish have been estimateu at $S9,99S.uu. Staitup assets
incluuing initial cash iequiieu, staitup inventoiy, anu long-teim assets have been
estimateu at $41,Suu.uu. This biings the total funuing iequiieu to $81,49S.uu. A poition of
the planneu investment will be coveieu thiough a 1u-yeai, $Su,uuu Small Business
Association Loan, with inteiest at 8%. Total staiting capital at the beginning of Yeai 1 will
be -$8,Suu.uu. Betaileu chaits of staitup iequiiements anu funuing may be founu in
Appenuix A.

Baseu on the assumption that Flouiish will achieve the foiecasteu sales of
$S6u,uuu.uu by the enu of Yeai 1, Net Income will ieach $29,86u.uu at that time. uiowth
iates of 1S% in Yeai 2 anu S% in Yeai S will iesult in iespective sales of $414,uuu.uuu anu
$4S4,7uu.uuu anu in iespective Net Incomes of $4S,8Su.uu anu $48,2S7.uu. The complete
Pio Foima Income Statement may be founu in Appenuix B. A monthly Pio Foima Income
Statement is also pioviueu in Appenuix C.


0vei the fiist thiee yeais, Flouiish's total assets inciease fiom $4S,SuS.uu to
$9u,7S4.uu because of incieases in inventoiy levels anu cash balances. 0vei that same
peiiou, total liabilities ueciease fiom $42,72u.uu to $28,16u.uu because of a ueuuction in
notes payable. The complete Pio Foima Balance Sheet may be founu in Appenuix B.

0vei the couise of the fiist business yeai, cash flows will inciease fiom -$8,Suu fiom
staitup costs to an enuing cash balance of aiounu $2,4uu.uu. While this amount is ceitainly
not a laige sum of cash to have on hanu, the enuing cash balance foi Yeai S is expecteu to
giow to ovei $49,uuu.uu. The complete Pio Foima Cash Flows may be founu in Appenuix E.

The chait below uepicts monthly piofits anu losses foi the fiist yeai of opeiations;
howevei, it uoes not take into account the staiting negative balance incuiieu fiom staitup
costs. The chait shows that Flouiish will bieak even aftei }anuaiy. If one takes into account
the negative balance fiom staitup of $8,Suu, then the business will actually bieak even
aftei Nay. This peiiou woulu show a gain of $S6S.66.



GrO$$ R If<l! nU<I!
Pro Forma Income Statement
Ylllir 1 Y r 2 Y rJ
Cost of Sales
$360, 000.00 $414,000.00 $434,700.00
Cost of Goods Sofd
Amo tSBA loal1)
sad Debts
sanio; Fees
Credit C/l rd F s
Du 5 nd SubSCripti ons
Miscellanea us
Payroll (Wages and Commissi ons)
I' yrol111ilxe

Suppl ies
Telephone and rnternet Service
Total Operatin!il Expenses
Depreciati ol1
Net Operating l in come
Investment Income
IntQ &t exp I'l&ti
Net [ 'noome Before Ta'xes
Net IncoOme (LoSS)
$],000. 00
$300. 00
$500. 00
$4,000. 00
$2,460. 00
$4,000. 00
$3,000. 00
$400. 00
$1,100. 00
$3,750. 00
$700. 00
$300. 00

$5,000. 00
$8,200. 00
$400. 00
$3,55. 00
$43,830. 17
$59, 840,00
$73,491, 00
$25,254. 2




Pro Forma Income Statement: Year 1
Gross Revenue Jan Feb March Apri l May June July Aug Sept Oct Nov Dec
Sales $23,142.41 $23,534.66 $30,496.99 $30,666.37 ...}32,565.19 ...}29,453.98 $26,574. 55 $28,812.12 $28,553.60 $29,810.56 $32,672. 16 $43,717.41
Cost of Sal es
Cost of Goods Sold $11,571.21 $11,767.33 $15,248.50 $15,333.18 $16,282.59 $14,726.99 $13,287. 27 $14,406.06 $14,276.80 $14,905.28 $16,336.08 $21,858.70
Gross Profit $11,571.21 $11,767.33 $15,248.50 $15,333.18 $16,282. 59 $14,726.99 $13,287. 27 $14,406.06 $14,276.80 $14,905.28 $16,336.08 $21,858.70
Operating Expenses
Advertising $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17 $354.17
Amortization (SBA Loan) $273.30 $275.13 $276.96 $278.81 $280.67 $282.58 $284.42 $286.32 $288.23 $290.15 $292.08 $294.03
Bad Debts $0 .00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0 .00 $0 .00 $0 .00 $0.00 $0.00
Bank Fees $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Consult ants $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00
Credit Card Fees $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67 $51.67
Dues and Subscriptions
$25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Insurance $83.34 $83.34 $83.34 $83.34 $83.34 $83.34 $83. 34 $83.34 $83.34 $83.34 $83.34 $83.34
Maintenance $83.34 $83.34 $83.34 $83.34 $83.34 $83.34 $83. 34 $83.34 $83.34 $83.34 $83.34 $83.34
Miscellaneous $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67 $416.67
Payrol l (Wages and Commissions) $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00
Payrol l Taxes $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67 $666.67
Postage $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67 $41.67
Rent $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00 $2,790.00
Supplies $333.34 $333.34 $333.34 $333.34 $333 .34 $333 .34 $333.34 $333.34 $333.34 $333.34 $333.34 $333.34
Telephone and Internet Service $205.00 $205.00 $205.00 $205.00 $205 .00 $205 .00 $205 .00 $205.00 $205.00 $205.00 $205.00 $205.00
Travel $1,000.00 $0.00 $1,000.00 $0.00 $0.00 $0.00 $0.00 $1,000.00 $0 .00 $1,000.00 $0.00 $0.00
Utilities ...}250.00 ...}250.00 $250.00 $250.00 $250.00 $250.00 $250.00 $250.00 J 250.00 -.J250.00 $250.00 $250.00
Security $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34 $33.34
Total Operating Expenses $11,682.51 $10,684.34 $11,686. 17 $10,688.02 $10,689.88 $10,691.79 $10,693. 63 $11,695.53 $10,697.44 $11,699.36 $10,701.29 $10,703.24
Depreciation $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67 $91.67
Net Operating Income ($202.97) $991.32 $3,470.66 $4,553.49 $5,501.04 $3,943.53 $2,501.97 $2,618.86 $3,487.69 $3,114.25 $5,543.12 $11,063.79
Investment Income $0 .00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0 .00 $0.00 $0.00
Interest Expenses $333.33 $331.51 $329.68 $327.83 $325 .97 $324. 10 $322.22 $320.32 $318.41 $316.49 $314.56 $312.61
Net Income Before Taxes ($536.30) $659.81 $3,140.98 $4,225.66 $5,175.07 $3,619.43 ...} 2,179.75 -.J 2,298.54 $3,169.28 $2,797.76 $5,228.56 J 10,751.18
Taxes ($160.89) - $197.94 $942.29 $1,267.70 $1,552. 52 $1,085.83 $653.93 $689.56 $1,568.57 $3,225. 35
Net Income (Loss) ($375.41) - $461.87 $2,198.68 $2,957.97 $3,622.55 $2,533.60 $1,525.83 $1 ,608.98 $2,218.50 $1,958.43 $3,659.99 $7,525.83


~ ~
Pro Forma Balance Sheet
Year 1 Year 2
Year 3
Current Assets
Cash $2,404.82 $23,984.78 $49,253.72
Accounts Receivable $0.00 $0.00 $0.00
Inventory $30,000.00 $32,000.00 $33,000.00
Prepaid Expenses $1,000.00 $1,000.00 $1,000.00
Total Current Assets $33,404.82 $56,984.78 $83,253.72
Fixed Assets
Furniture and Fixtures
$6,000.00 $6,000.00 $6,000.00
Equipment $7,000.00 $7,000.00 $7,000.00
Accumulated Depreciation $1,100.00 $3,300.00 $5,500.00
Tota I Fixed Assets $11,900.00 $9,700.00 $7,500.00
Total Assets $45/304.82 $66/684.78 $90/753.72
Liabilities and Capital
Current Liabilities
Accounts Payable $0.00 $0.00 $0.00
Short-Term Loan Payable $7/280.00 $7/280.00 $7/280.00
Total Current Liabilities $7/280.00 $7/280.00 $7/280.00
Long-Term Liabilities
Long-Term Notes Payable $42/720.00 $35/440.00 $28/160.00
Mortgage Payable $0.00 $0.00 $0.00
Total Long-Term Liabilities $42/720.00 $35/440.00 $28/160.00
Paid-In Capital $31/493.00 $31/493.00 $31/493.00
Retained Earnings ($36/188.18) ($7/528.22) $23/820.72
Total Capital ($4/695.18) $23/964.78 $55/313.72
Total Liabilites and Capital $45/304.82 $66/684.78 $90/753.72


Pro Forma Cash Flows
Year 1 Year 2 Year 3
Beginning Cash Balance ($8,500.00) $2,404.82 $23,984.78
Cash Inflows
Accts. Rec. Collections $0.00 $0.00 $0.00
Loan Proceeds $0.00 $0.00 $0.00
Sales and Receipts $360,000.00 $414,000.00 $434,700.00
Prepaid Expenses $0.00 $0.00 $0.00
Total Cash Inflows $360,000.00 $414,000.00 $434,700.00
Cash Outflows
Cost of Goods Sold $180,000.00 $207,000.00 $217,350.00

Operating Expenses $137,210.00 $140,810.00 $143,780.00
Interest Expenses $3,877.00 $3,595.00 $3,288.00
Taxes $6,908.18 $12,715.04 $14,513.06
Fixtures and Equipment $1,100.00 $3,300.00 $5,500.00
Owner's Draw $20,000.00 $25,000.00 $25,000.00
Total Cash Outflows $349,095.18 $392,420.04 $409,431.06
Net Cash Flow $10,904.82 $21,579.97 $25,268.94
Ending Cash Balance $2,404.82 $23,984.78 $49,253.72

Site Plan
7 Market Square #100
Knoxville, TN 37902

2,232 square feet with existing
back office area, restrooms (2), and storage

Photo Examples of Inspiration for Store Design
and Unique Display Options

All photos taken from www.luckymag.com