E-COMMERCE

Cocktail Fashion

PRESENTED BY: MURTAZA KHAN

E- BUSINESS
PLAN
E- BUSINESS PLAN

TABLE OF CONTENT

1.0 Abstract ………………………………………………………....................... 2

1.1 Vision

1.2 Mission

1.3 Key to Sucess

Introduction ………………………………………………..………………...……... 3

2.0 Company Summary

2.1 Startup Summary …………………………………………………...... 5

2.2 Company Ownership .................................................................. 8

3.0 Product ..................................................................................................... 10

4.0 Market Analysis ..................................................................................... ..11

4.1 Market Segmentations .................................................................11

5.0 Strategy and Implementations ................................................................11

5.1 Competitive Edge ..........................................................................11

5.2 Marketing Strategy ..........................................................................12

5.2.1 Pricing Strategy ................................................................. 13

5.3 Sales Strategy .................................................................................. 15

5.3.1 Sales Forecast .......................................................................16

6.0 Management ............................................................................................ 18

6.1 Personnel Plan ................................................................................ 19

7.0 Financial Plan .............................................................................................. 21

7.1 Break-even Analysis..........................................................................29

7.2 Projected Profit and Loss........................................................................

30

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7.3 Projected Cash

Flow................................................................................32

7.4 Projected Balance

Sheet........................................................................34

7.5 Business Ratios ........................................................................................

35

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COCKTAIL FASHION
1.0 ABSTRACT
ur company will be a great one for women and men looking for

O distinctive outdoor clothing online. Cocktail Fashion will eliminate the

middle man and offer creative outdoor clothing that is both functional
and beautiful. The savings are passed on to our customers who will be
paying a fraction of what they normally do for current retreated fashion in stores.
Another strength of Cocktail Fashion is that it will not maintain any clothing inventory.
Cocktail Fashion has contracted with Clothing Company, located in Islamabad,
Pakistan, to produce and ship all Cocktail Fashion clothing. Our design team will
work closely with the Pakistan-based manufacturing facilities. The Clothing
Company will maintain the inventory and will produce sufficient product to meet the
planned demand.

GET SERIOUS! GET

COCKTAIL Fashion.

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1.1 VISION
e believe in a better fashion future – one that makes fair and

W sustainable fashion affordable and desirable for all.

Our vision is that all our operations are run in a way that is
economically, socially and environmentally sustainable. Which will mean our
business is helping to meet the needs of both present and future generations. We
believe that quality, affordable fashion can be made and sold in a way that’s also
good for people and the environment. With this in mind, our business concept is
simply to offer quality fashion at the best price.

1.2 MISSION
ocktail Fashion's mission is to present consumers with designs, styling and

C clothes that energizes any outdoor activity. Whether it be snowboarding or

drifting down a river, Cocktail Fashion has comfortable, durable clothing
that will look and feel wonderful.

1.3 KEYS TO SUCCESS

 Accessible website that is entertaining to surf. Like a trip to your favorite store
where you always find something new that you want.
 Establishing a strong advertising campaign in a traditional media vehicle; i.e.
magazines.
 Excellent vendor relationship that will facilitate quality manufacturing of
Cocktail Fashion's clothing and quick shipment of orders.
 Acquiring an excellent design staff.

INTRODUCTION
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2.0 COMPANY SUMMARY

ocktail Fashion will offer creative women's and men’s outdoor

C clothing, online, that is both functional and beautiful. We will create

a cost-effective operation that will eliminate the cost of inventory by
having a third-party, Magic Clothing Company, handle all manufacturing

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and shipping of clothing to the customer. Cocktail Fashion will process the
order and collect the payment online. The order will then be sent to Magic
Clothing Company to be filled and shipped. Cocktail Fashion will focus on
clothing design and marketing of its products.

2.1 START-UP SUMMARY

START-UP FUNDING
Start-up Expenses to Fund 58,500
Start-up Assets to Fund 401,500
TOTAL FUNDING REQUIRED 460,000

ASSETS
Non-cash Assets from Start-up 0
Cash Requirements from Start-up 401,500
Additional Cash Raised 0
Cash Balance on Starting Date 401,500
TOTAL ASSETS 401,500

LIABILITIES AND CAPITAL

LIABILITIES

Current Borrowing 0
Long-term Liabilities 200,000
Accounts Payable (Outstanding Bills) 0
Other Current Liabilities (interest-free) 0
TOTAL LIABILITIES 200,000

CAPITAL

Planned Investment
Investor 1 130,000
Investor 2 130,000
Other 0
Additional Investment Requirement 0

TOTAL PLANNED INVESTMENT 260,000

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Loss at Start-up (Start-up Expenses) (58,500)

TOTAL CAPITAL 201,500

TOTAL CAPITAL AND LIABILITIES 401,500

Total Funding 460,000

START-UP
REQUIREMENTS

START-UP EXPENSES

Legal 1,000
Stationery etc. 500
Brochures 0
Consultants 5,000
Insurance 0
Rent 2,000
Leased Office Equipment 10,000
Computer Equipment/Software 30,000
Website 10,000
Other 0
TOTAL START-UP EXPENSES 58,500

START-UP ASSETS

Cash Required 401,500

Start-up Inventory 0
Other Current Assets 0
Long-term Assets 0

TOTAL ASSETS 401,500

Total Requirements 460,000

2.2 COMPANY OWNERSHIP

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Cocktail Fashion is owned by Malik Murtaza Khan.

PRODUCTS

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EVERYTHING IS DESIGNED.
FEW THINGS ARE
DESIGNED WELL.
eeing the growing nature of women and men towards clothes in the present

S era, make me realize to open stores that provide them all at one place.
While designing, I visualize the woman who will wear my work. She has a
defined taste and personality. I try to create for her something different, fresh
and exciting, so she can play the game of fashion with me and participate in the
creation of her own image.

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Cocktail Fashion will sell women's and men’s outdoor clothing online. We will offer
outdoor clothing for almost every type of active use. We will focus on the seasonal
clothing demands of our customers including the following:

 Fleece outerwear.

 Rain gear and waterproof

breathable.
 Synthetic clothing for outdoor activities.
 Hats.
 Pants.
 Shirts.

The glimpse of our product portfolio are on next pages.

FLEECE OUTERWEAR

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RAIN GEAR

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WATERPROOF

BREATHABLE

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PANTS

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SHIRTS

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MARKET ANALYSIS

n the past 15 years, women's and men’s outdoor wear has grown into a billion

I dollar niche in the clothing industry. The popularity of the Internet has launched
a number of online stores for women's and men’s outdoor wear but no
company is exclusively selling their products online. There are a number of
reasons for this but the strongest is that the concept is new and untested. Will
customers buy something that they wear that can only be seen online? We believe
they will, if the process is fun and the products are great and cheap.

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The key is marketing our target customers in the traditional advertising medium for
fashion, i.e. women and men fitness magazines.

The ads will focused on the eliminating the middle man in your clothing budget and
stepping up to the distinctive style of Cocktail Fashion. The company logo will also be
an important marketing tool in bringing customers to our website.

4.1 MARKET SEGMENTATION

Cocktail Fashion will be focusing on two distinct groups of women that purchase
outdoor clothing:

 Women 17-25 years of age: Youth drives the market so this is the important
group to attract to the website. They have less money than the older group
so we must give them what they want for less. The key is to have inexpensive
selections in each clothing group that have the popular cut. The company's
logo attractiveness to this group cannot be stressed strongly enough. The
initial small purchases will grow larger over time.
 Women 26-40 years of age: They are the core group that will drive Cocktail
Fashion's success. This target group is responsible for the growth of outdoor
women's wear. They will be harder to pull into the website. Once there, the
key will be promoting the quality, attractiveness and savings. In addition, we
will have to assure that the purchase will fit the way the customer wants it to.
It will be crucial that the return policy is hassle-free and speedy.

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MARKET ANALYSIS PIE

Sales

Women Age 16-25 Women Age 26-40

MARKET ANALYSIS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Potential Growth CAGR
Customers

Women 20% 6,000,000 7,200,000 8,640,000 10,368,000 12,441,600 20.00%

Ages 16-
25
Women 15% 5,000,000 5,750,000 6,612,500 7,604,375 8,745,031 15.00%
Ages 26-
40
Total 17.81% 11,000,000 12,950,000 15,252,500 17,972,375 21,186,631 17.81%

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STRATEGY AND
IMPLEMENTATION

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GETTING A GOOD
REPUTATION ISN’T NEARLY
AS HARD AS KEEPING IT.
He world is changing all around us. To continue to thrive as a business over

T the next ten years and beyond, we must look ahead, understand the trends
and forces that will shape our business in the future and move swiftly to
prepare for what's to come. Cocktail Fashion will win market share in the
women's and men’s outdoor clothing niche by aggressively pursuing visibility with its
target customers.

5.1 COMPETITIVE EDGE

Ocktail Fashion's competitive edge is its focus on the process than on

C product. The website is just the endpoint of an entire marketing program

to drive customers' interest in Cocktail Fashion. Though we have
confidence in the quality and attractiveness of our products, we know that
building the road to the website is our most important job.

Our CEO experience with Ali Express is crucial to the success of Liquid Culture's
website. Ali Express website averaged five million hits a year and is considered one
of the most accessible and attractive websites in the clothing industry. His
experience is invaluable in assuring customers' satisfaction with the shopping
experience online.

We will introduce a new clothing measurement feature that is fun to use and will
reduce customers confusion on how the clothing will fit. This will increase customer
satisfaction and reduce returns.

Kamran will be in charge of the clothing design team. As senior clothing designer for
Levis, she watched the Manic Woman's sales grow by 20% for the past five years. His
clothing designs have been praised in the industry and have spawned many

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imitators. With Cocktail Fashion, we are ready to change how quality women's
outdoor clothing is sold.

Cocktail Fashion's agreement with Magic Clothing Company is another strong

competitive advantage. Our design team will work closely with the Magic's
Pakistan-based manufacturing facilities. The Magic Clothing Company will maintain
the inventory and will produce sufficient product to meet the planned demand. This
will keep production costs low for products and put a cap on Cocktail Fashion's
overhead.

5.2 MARKETING STRATEGY

Ocktail Fashion's marketing strategy is a simple one. In women's fitness

C magazines, Cocktail Fashion will introduce customers to their products and

website. We will also advertise in Levis and Outfitter website.

For the first two months, Cocktail Fashion will offer 10% off for all purchases under
1000 and 15% off all purchases over 1000. We will offer the same discount strategy
three more times during the year when new seasonal clothing is introduced.

5.2.1 PRICING STRATEGY

Cocktail Fashion's pricing strategy is to pass on most of the store mark-up to the
consumer in reduced price for clothing. This advantage has no negative impact on
our sales profit and will also absorb some of the initial cost of offering discounts
during our first three months of operation.

5.3 SALES STRATEGY

ocktail Fashion will launch a 245,000 ad campaign targeted at our core

C customer groups. The focus of the ads will be to "Keep the Money You Give
to the Middleman" and use it to get outdoors and enjoy life. Cocktail
Fashion's attractive logo will be heavily displayed in these ads. We estimate
it will take most of the year to build our sales to the point where we begin to show a
profit.

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Cocktail Fashion will offer discounts at various times of the year to even out
seasonality and build initial awareness of the website.

5.3.1 SALES FORECAST

We expect sales to increase at a steady rate for the first year. It will begin slow as we
open, but will quickly pick up as our customer base increases. Cocktail Fashion will
see a sales increase of 38% between the first and second year. We feel that we can
accomplish this steady goal and maintain this amount of sales.

SALES MONTHLY

450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Clothing

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

month 7 Month 8 Month 9 Month 10 Month 11 Month 12

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SALES BY YEAR

4,300,000.00
Year 1 Year 2 Year 3

3,000,000.00
2,170,000.00

CLOTHING

SALES FORECAST
YEAR 1 YEAR 2 YEAR 3
Sales
Clothing 2,170,000 3,000,000 4,300,000
TOTAL SALES 2,170,000 3,000,000 4,300,000

Direct Cost of YEAR 1 YEAR 2 YEAR 3

Sales
Clothing 1,249,000 1,800,000 2,580,000
Subtotal Direct 1,249,000 1,800,000 2,580,000
Cost of Sales

MANAGEMENT
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MANAGEMENT IS, ABOVE

ALL, A PRACTICE WHERE
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ART, SCIENCE, AND

CRAFT MEET.
E will manage the marketing team, as well as the development and

W administration of Cocktail Fashion's website. Asif will be in charge of

the clothing design team. He will also manage the production of the
designs by Magic Clothing Company.

6.1 PERSONNEL PLAN

Besides Asif, Cocktail Fashion will have a staff of eight:

 Three member clothing design team.

 Web administrator.
 Two member marketing team.
 Office manager.
 Accountant.

PERSONNEL PLAN
YEAR 1 YEAR 2 YEAR 3
Marketing/Website 84,000 90,000 95,000
Director
Design Director 84,000 90,000 95,000
Designers 144,000 156,000 166,000
Web Administrator 48,000 52,000 56,000
Office Manager 36,000 39,000 42,000
Marketing Staff 96,000 104,000 112,000

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Accountant 39,600 44,000 48,000

TOTAL PEOPLE 8 8 8
Total Payroll 531,600 575,000 614,000

FINANCIAL PLAN

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7.1 BREAK-EVEN ANALYSIS

ur break-even analysis is based on running costs, the costs we incur to keep the
business running, not on theoretical fixed costs that would be relevant only if we
were closing. Fixed costs include payroll, rent, utilities, and marketing costs.

BREAK-EVEN ANALYSIS

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BREAK-EVEN ANALYSIS

Monthly Revenue Break-even 177,248

Assumptions:

Average Percent Variable Cost 58%

Estimated Monthly Fixed Cost 75,228

7.2 PROJECTED PROFIT AND LOSS

The following table and chart are the projected profit and loss for three years.

PROFIT MONTHLY
80,000.00

60,000.00

40,000.00

20,000.00

0.00

-20,000.00

-40,000.00

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PRO FORMA
PROFIT AND
LOSS

YEAR 1 YEAR 2 YEAR 3

Sales 2,170,000 3,000,000 4,300,000

Direct Cost of 1,249,000 1,800,000 2,580,000

Sales
TOTAL COST 1,249,000 1,800,000 2,580,000
OF SALES
Gross Margin 921,000 1,200,000 1,720,000
Gross 42.44% 40.00% 40.00%
Margin %

EXPENSES

PROFIT YEARLY
Payroll 531,600 575,000 614,000

Sales and 400,000.00265,000 340,000 440,000

Marketing
350,000.00
and Other
Expenses300,000.00
Utilities 250,000.002,400 2,400 2,400
200,000.00
Rent 24,000 24,000 24,000
150,000.00
Payroll Taxes 79,740
100,000.00 86,250 92,100
50,000.00
Total 902,740
0.00
1,027,650 1,172,500
Operating
Expenses YEAR 1
YEAR 2
Profit Before 18,260 172,350 547,500
YEAR 3
Interest and
Taxes
EBITDA 18,260 172,350 547,500

Interest 17,574 13,281 8,801

Expense
Taxes 206 47,721 161,610
Incurred
Net Profit 481 111,349 377,089

Net 0.02% 3.71% 8.77%

Profit/Sales

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7.3 PROJECTED CASH FLOW

The following table and chart are the projected cash flow for three years.

PRO FORMA CASH

FLOW

YEAR 1 YEAR 2 YEAR 3

CASH RECEIVED
Cash from
Operations
Cash Sales 2,170,000 3,000,000 4,300,000
SUBTOTAL CASH 2,170,000 3,000,000 4,300,000
FROM OPERATIONS
EXPENDITURES FROM
OPERATIONS
Cash Spending 531,600 575,000 614,000

Bill Payments 1,590,840 2,541,460 3,387,998

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SUBTOTAL SPENT ON 2,122,440 3,116,460 4,001,998

OPERATIONS
ADDITIONAL CASH
SPENT
Long-term Liabilities 44,796 44,796 44,796
Principal Repayment
SUBTOTAL CASH 2,167,236 3,161,256 4,046,794
SPENT
Net Cash Flow 2,764 (161,256) 253,206

Cash Balance 404,264 243,008 496,214

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7.4 PROJECTED BALANCE SHEET

The following is the projected balance sheet for three years.

PRO FORMA
BALANCE SHEET
YEAR 1 YEAR 2 YEAR 3
ASSETS
CURRENT ASSETS
Cash 404,264 243,008 496,214
Inventory 264,000 380,464 545,332
Other Current Assets 0 0 0

TOTAL CURRENT 668,264 623,473 1,041,546

ASSETS
Long-term Assets
Long-term Assets 0 0 0
Accumulated 0 0 0
Depreciation
TOTAL LONG-TERM 0 0 0
ASSETS
TOTAL ASSETS 668,264 623,473 1,041,546
LIABILITIES AND
CAPITAL
CURRENT LIABILITIES
Accounts Payable 311,080 199,736 285,516
SUBTOTAL CURRENT 311,080 199,736 285,516
LIABILITIES
Long-term Liabilities 155,204 110,408 65,612
TOTAL LIABILITIES 466,284 310,144 351,128
Paid-in Capital 260,000 260,000 260,000
Retained Earnings (58,500) (58,019) 53,329
Earnings 481 111,349 377,089
TOTAL CAPITAL 201,981 313,329 690,418
TOTAL LIABILITIES AND 668,264 623,473 1,041,546
CAPITAL
Net Worth 201,981 313,329 690,418

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7.5 BUSINESS RATIOS

The following table shows the projected businesses ratios. We expect to maintain
healthy ratios for profitability, risk, and return.

RATIO ANALYSIS
YEAR 1 YEAR 2 YEAR 3 INDUSTRY
PROFILE
Sales Growth 0.00% 38.25% 43.33% 10.40%
PERCENT OF TOTAL
ASSETS
Inventory 39.51% 61.02% 52.36% 34.10%
Other Current Assets 0.00% 0.00% 0.00% 25.70%
Total Current Assets 100.00% 100.00% 100.00% 89.40%
Long-term Assets 0.00% 0.00% 0.00% 10.60%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 46.55% 32.04% 27.41% 40.70%
Long-term Liabilities 23.22% 17.71% 6.30% 9.00%
Total Liabilities 69.78% 49.74% 33.71% 49.70%
NET WORTH 30.22% 50.26% 66.29% 50.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 42.44% 40.00% 40.00% 24.80%
Selling, General & 42.42% 36.29% 31.23% 14.80%
Administrative
Expenses
Advertising Expenses 11.29% 10.00% 9.30% 0.90%
Profit Before Interest 0.84% 5.75% 12.73% 2.00%
and Taxes
Main Ratios
Current 2.15 3.12 3.65 2.36
Quick 1.30 1.22 1.74 1.09
Total Debt to Total 69.78% 49.74% 33.71% 49.70%
Assets
Pre-tax Return on Net 0.34% 50.77% 78.03% 4.90%
Worth
Pre-tax Return on 0.10% 25.51% 51.72% 9.70%
Assets

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ADDITIONAL RATIOS YEAR 1 YEAR 2 YEAR 3

Net Profit Margin 0.02% 3.71% 8.77%
Return on Equity 0.24% 35.54% 54.62%
ACTIVITY RATIOS
Inventory Turnover 10.91 5.59 5.57
Accounts Payable 6.11 12.17 12.17
Turnover
Payment Days 27 38 25
Total Asset Turnover 3.25 4.81 4.13
DEBT RATIOS
Debt to Net Worth 2.31 0.99 0.51
Current Liability to 0.67 0.64 0.81
Liability
LIQUIDITY RATIOS
Net Working Capital $357,185 $423,737 $756,030
Interest Coverage 1.04 12.98 62.21
ADDITIONAL RATIOS
Assets to Sales 0.31 0.21 0.24
Current Debt/Total Assets 47% 32% 27%
Acid Test 1.30 1.22 1.74
Sales/Net Worth 10.74 9.57 6.23
Dividend Payout 0.00 0.00 0.00

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