BUSINESS PLAN ON SPECIALIZED RETAIL CLOTHING

LEARNING PLATFORM LTD

(Business Consultants & Publishers) 17 Allen Avenue Ikeja,Lagos
busysteps@yahoo.co.uk

08034101694,08099713316

TABLE OF CONTENT 1. Executive Summary 2. Company Summary 3. Product Summary 4. Market Analysis Summary 5. Strategy & Implementation Summary 6. Management Summary 7. Financial Plan

1. Executive Summary The business is essentially a retail clothing business, to cater for people who love to look good at affordable price. Our focus is to provide ladies and childrens apparel and accessories, and position ourselves as the top retail store servicing this particular market. The store will be located on Allen Avenue Ikeja, the hub of business and social activities in Lagos mainland. Our intentions are to obtain 50% market share and become a central hub of shopping activity for ladies, childrens wears and accessories. We believe that this is critical to our initial success and long-term growth. 1.1 Objectives 1. To create a shopping environment that caters for apparel and accessories needs of the feminine folks and children. 2. To earn 50% market share and become the number one clothing store in Nigeria. 3. To receive a 100% profit margin within the first year. 4. To have a customer base of 500 by the end of the first operating year. 5. To become a nationally recognized brand within 3 years.

1.2 Mission Our mission is to offer quality and affordable brand in an assortment of sizes and styles to accommodate all varying body styles and shapes. 1.3 Keys to Success In order to succeed in this business, we must:
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Carry an assortment of sizes and unique brands to fit the taste of our target customer base. Provide customers with top notch personalized customer service in an atmosphere of hospitality. Advertise and promote in areas that our target customer base will learn about our store. Continuously review our inventory and sales and adjust our inventory levels accordingly.

2.

Company Summary

The store is organized as a sole proprietorship business. It will be located on Allen Avenue Ikeja, Lagos. The hours of operation will be Monday - Fridays 9 a.m. - 6 p.m., Saturday 10 a.m. - 8 p.m., and Sunday 1 p.m. 3 p.m. All merchandise will be purchased according to the company's mission and customer focus. 2.1 Company Ownership The store is organized as a sole proprietorship business and owned by Mrs. Atiba. 2.2 Start-up Summary The store's incorporation costs are listed below. The company will start with three months inventory on hand for apparel and accessories as this are the main revenue generator. The majority of the company's assets will reside in inventory. The purpose of this business plan is to secure a =N=3 million loan. This supplemental financing is required for space renting, inventory, and operational expenses. The loan amount appears in the long-term liability row of the start-up summary. Other financing will include owners additional investment of =N=1 million for inventory replenishment during months of high receipts. Successful operation and building a loyal customer base will allow the store to be self sufficient and profitable in year two. Start Up Requirements Start Up Expenses. Rent (180sq. feet) -12 months Telephone and utilities (3months) Advertising & Promotion Stores fixtures& Decoration One lap top and cash register Signage (Including permits) Others TOTAL START UP EXPENSES 700,000 15,000 200,000 100,000 70,000 100,000 100,000 1,285,000 (A)

Start up assets Cash required Start up Inventory Other current assets Long term asset (Car) TOTAL START UP ASSETS TOTAL REQUIRED (A+B) 3,000,000 500,000 0 1,500,000 5,000,000 6,285,000 (B)

TOTAL INVESTMENT OUTLAY

START UP EXPENSES 20%

START UP ASSETS 80%

2.3 Company Locations and Facilities The store will be located at Allen Avenue Ikeja. This space has 180 square feet and will be leased for one year. This location is the centre of business activities on the mainland. We feel it is essential to our initial and ongoing success that we locate ourselves in the heartbeat of the community. All business deliveries and shipments will be handled through the store. The company office will also be housed at this location.

3.0

Products.

The store will carry internationally recognized brands (see list below). 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, hats, 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 The store will provide a selection of brands that fall within our mission statement. Our goal is to carry a selection of labels from the hardcore western wear to the more sophisticated styles. Some of the labels we will carry are listed below: French Kiss of Uk H &M Planet Uk Zara of Uk IBO etc

3.2 Competitive Comparison The store 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.
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The ' Shoppers Card will entitle customers to a 15% discount after ten purchases. We will offer clothing to fit.lus. Our location is central to our target customer base. 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.

3.3 Sales Literature The store will use a targeted advertising and sales program to generate publicity and build a customer base.
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2,500 full-color postcard flyers with a 10% coupon will be distributed throughout the offices, churches and event centre around mainland axis. 1,000 business cards with a Frequent Shopper Card on the reverse side entitling the customer to a 15% discount on the eleventh purchase after ten purchases.

3.4 Sourcing We will shop for our merchandise as outlined below:

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With manufacturers who have a regional representative and showroom located in the United kingdom. However, we intend to extend our scope of coverage to Turkey, China, Dubai, America etc. In the second year, we will place our weekly and monthly reorders with them and review new products. For all other brands we will work directly with the manufacturer and utilize product catalogs and line sheets.

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. 3.5 Technology For effective stock management, it is imperative that an advanced inventory and point of sales program be utilized to maintain stock levels and track sales. The store 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 as a direct response to the realities of the time; to ensure all financial goals and objectives are being reached. We will 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, the store will add our own personal in-house label of clothing that will include t-shirts for women and shirts for men. We will expand our line of brands with those that have been repeatedly requested by our customers. An e-commerce website will also be created to increase our distribution channels and expand our customer base to a national level.

4.0 Market Analysis Summary The primary target customer of our business will be people who are fashion conscious, upwardly mobile professionals and every one who likes to look good at very affordable price. As we are situated in the center of their residential community we believe they will make up the largest percentage of our customer base. The secondary target customers are the referrals our customers provide as a result of been satisfied with our products. As the store becomes popular, we expect to see an assortment of curiosity seekers, and local residents from the community as well as seasonal purchasers during our sales period. 4.2 Target Market Segment Strategy The goal of the store is to serve the people who are fashion conscious, upwardly mobile professionals and every one who likes to look good at affordable price. 4.2.1 Market Needs There are several important needs in the retail clothing business that are being either underserved or not met at all. Our store plans to meet and service those needs.
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We will provide a large assortment of sizes to compliment the various body shapes and sizes. 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 Industry analysis Like most other thriving businesses, dealing in clothes and shoes, especially for children and ladies, has recently become a goldmine to fashion boutique owners. This is the reason every street in the cities now has several lines of shops where clothes, shoes, belts and other supporting apparels are displayed for sale. Besides the fun of following the trend in dressing, a boutique owner also has the opportunity of making good money on certain exotic products that are unique to him. As popular as the business has recently become, starting a boutique also has

its own challenges especially in a country like Nigeria where a businessman has to contend with a number of overheads. With competition growing among those involved in this line of business, each dealer, on a daily basis, finds a pathway to create a niche market for himself. This has given more room for quality thereby resulting in more money for them. As a boutique owner, you choose the product and you set the prices, and then open your doors to customers eager to snap up your latest selections and show them off to their friends. Retail fashion is a solid business with constant demand for new clothing products created by fashion designers and ever-changing whims of celebrities. Fashion boutiques typically stock clothing and fashion accessories that cant be found in department stores, particularly if vintage items are included in the inventory. And these boutiques are often designed and decorated according to the style of the proprietor, giving them a one-of-a-kind vibe that you just dont get in a large department store chain. That is part of the secret to great boutique style: Usually, a boutique sticks with one or two types of merchandise and concentrates on that. The most successful boutiques dont try to be all things to all shoppers, according to apparel search. Location also matters when considering the business. Busy spots are usually ideal. This also depends on how much one is investing and the customers he wants to attract. If shopping arcade is your choice, it is always better to get a space proper for window-shopping. In most cases, people who buy clothes actually come out to buy other things but somehow get attracted to what they see displayed. One thing we have discovered is that apart from the fact that more people love to look good in fine dresses, they have also opted for quick service. By that, I mean going to the tailor wastes a lot of time and you cannot trust tailors to deliver to you on the agreed day.

4.3 Main Competitors Our major competitors are all the retail clothing businesses located around 15 miles radius of our store.

5.0 Strategy and Implementation Summary Our store's goal is to provide unique and quality apparel at affordable price. Our intention is to gain 50% of this market share by focusing on our niche positioning, neighborhood location, brand that we sell, hospitality and special promotions. 5.1 Competitive Edge
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The Stores Shopper Card which allows the customer a 15% discount after ten purchases. Our location in the community will offer closer access to our target customer base. We will offer unique and quality products at affordable price.

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.
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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 Pricing Strategy Our store will maintain a flexible pricing strategy. We base 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. 5.2.2 Promotion Strategy We 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 expenditure.
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5,000 4x5 color flyers/postcards will be distributed throughout the neighborhood. Spot radio advertisements on two local FM radio stations. A direct mail program that will further focus on and target the top 50% customer base with special in-house sales and promotions.

5.2.3 Distribution Strategy Our retail location will be the foundation of building our customer base. We will also manage a direct mail program that will focus on our top 50% customers spotlighting any in-house sales and promotions. 5.2.4 Marketing Programs Our marketing programs will consist of the distribution of 5,000 color flyers two weeks prior to the day we will open our doors for business. 5.2.5 Positioning Statement We will offer labels in a larger assortment of styles and sizes that aren't always readily available in the mass apparel retailers stores. 5.3 Sales Strategy
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We will utilize the Retail ICE POS software with every sales transaction. With each purchase the software will record and maintain in its database the customer's name, address and purchases. This information will be used with our direct mailing program to focus on our top 50% of customers. We will offer a 14 day return/exchange policy to build trust with our customers and maintain retention and loyalty.

5.3.1 Sales Forecast The following table and chart give a highlight on forecasted sales. We expect sales to start off conservatively and increase extensively in subsequent months. We planned for annual rate of growth at 20% for the first three years. as we build name, recognition and status in the community; In the subsequent years we look to see an increase of revenue as we gain a larger percentage of the market share and increase our customer base beyond the neighborhood.

6.0 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. We will expect a high degree of customer service skills and personality as this is essential to our success. Our business development consultant will assess the productivity and performance of employees every six months. These bi-annual evaluations are conducive to the continued growth of our small business. 6.1 Organizational Structure Our store is a small business and therefore requires a simple organizational structure. Mrs Aj the CEO will also act in a general manager capacity. 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 Mrs Aj, owner and general manager will be responsible for all administrative functions, purchasing, inventory control, and promotions. She will also drive other marketing staff of the business to achieve the desired business growth. She has spent over 7 years in business management and her banking experience will also be handy in the day to day management of the business .She is a first class graduate of computer science. 6.3 Personnel Plan The personnel plan is included in the following table below. There will be one full-time employee and two part-time employees. 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.

Personnel Plan
YR 1 Owner Full Time Staff Part Time Position Total People TOTAL PAYROLL 0.72 0.36 0.36 4 1.44 YR2 0.8 0.4 0.4 4 1.6 YR3 1.0 0.42 0.42 4 1.84

PERSONNEL PLAN

PART TIME 26% OWNER 49%

FULL TIME 25%

7.0 Financial Plan The growth of our store 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 cheques. 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 o We do not sell on credit nor do we offer layaways at this time. We accept cash and cheques. o Conservative trade cycle for =N=2million worth of stock is 60days o All daily intakes must be kept in the bank. o Our average profit margin is 100% on average stock.

7.3 Break-even Analysis On the average we sell over =N=2million worth of goods in 60 days at 100% profit margin. Therefore with an investment outlay of =N=6.28million and a conservative projection; it will take an approximate of 6 months to break even.

7.4 Projected Profit and Loss The following chart and table will indicate projected profit and loss. Assumption o Our projected annual revenue growth is 20% o Profit margin is 100% of direct cost o Average trade cycle for 2million worth of stock is 60days.

PROJECTED PROFIT & LOSS ACCOUNT YR 1(m) YR2(m) YR3(m) SALES 24 28.8 34.56 DIRECT COST OF SALES PAYROLL OTHER EXPENSES TOTAL EXPENSES NET PROFIT 12 1.4 1.2 14.6 9.4 14.4 1.6 1.4 17.4 11.4 17.28 1.8 1.6 20.68 13.88

YEARLY PROFIT 2 TOTAL COST SALES 1

10

20

30

40

YEARLY PROFIT
14 12 10 8 6 4 2 0 1 2 3 YEARLY PROFIT

7.2 Projected Balance Sheet

PROJECTED BALANCE SHEET YR1(M) ASSETS CASH INVENTORY CAR OTHERS 12.40 0.50 1.50 1.28 15.68 YR2(m) 14.40 0.50 1.30 1.48 17.68 YR3 (m) 16.88 0.50 1.00 1.78 20.16

LIABILITY LOAN

3.00

3.00

3.00

CAPITAL OWNERS EQUITY EARNINGS 3.28 9.40 15.68 3.28 11.40 17.68 3.28 13.88 20.16

Recommendation We recommend that any prospective investor can invest into this business for the following reasons: o The Return on Investment (ROI) from this business is quite impressive. o Durability- unsold stocks/ inventory could be sold at a later date. o Stock turnover is high, which translates to good cashflow.