GUARDIAN ANGELS FASHIONS
Guardian Angels Fashions is a modern clothing retail outlet that deals with youths’ attire. This retail outlet will deal with the upcoming youth fashions, and thus this will make it fulfill the uniqueness criterion. The target customers for Guardian Angels Fashions are the youths who dominate in the society. Youths value the upcoming fashions in the clothing industry, and thus this retail outlet aims to utilize this opportunity by providing these basic commodities to them at pocket friendly prices. Over the next four years, Guardian Angels Fashions outlet aims to expand its operations up to the national level.
The long- term goal of the business is to operate internationally and produce unique brands. The business will face competition from the other upcoming clothing retail outlets as well as the large-scale retailers in the clothing industry. To operate efficiently, I intend to invest over 50,000 dollars in this business. I anticipate my financing needs to be high. For this reason, my contribution and a loan from the bank will be the sources of funding for the business. The distribution channels that the business will use include deliveries, customers own transport, and online virtual distribution channels.
Product or service
Market and competition
Marketing and sales
Business system and organization
Opportunities and risks
Financial planning and financing
The idea of starting this modern clothing enterprise came up after a thorough market study in the location. In this study, I realized that there were only few clothing retail outlets in the location, and they sold only normal youth attire. I found a need to offer something unique, and this is what resulted to the idea of starting Guardian Angels Fashions. The outlet will offer the modern fashions, and this will help it to pick faster as the youths in the region will not have to travel for longer distances in search of the modern fashions. This is what will make the business become unique. I expect to face competition because the other clothing outlets might open in the near future. For this reason, I will offer my products at affordable prices, which will help to create loyal customers.
I hope to create a strong management team for my business that will ensure that it will dominate in the market. The market and competitions section of this business plan outline the target market for my products and the competition that I am likely to face in the future. The business system and organization section outlines the tasks and responsibilities that I will delegate within the organizational structure (McKeever, 2002). The opportunities and risks section outlines the business opportunities as well as risks. The plan also discusses the financial planning as well as the sources of finance for the Guardian Angels Fashions. The plan ends with a conclusion.
The opportunities that the business will face are the increasing tastes and preferences for the upcoming clothing fashions among the youths and tax exemptions in the industry. The risks that the business might face are the unhealthy competitions in the industry, change of tastes and preferences among the youths, and economic breakdowns. The enterprise will consist of human resources manager in charge of employees’ affairs, accounting manager in charge of accounting practices, sales and purchases manager in charge of sales and purchases, and operations manager in charge of managing the entire business.
Product or service
The business will be dealing with youths attires as already mentioned. To generate a high profit, the business will deal with all types of upcoming teenagers’ fashions. The fashions that the business will deal with include jerseys, jeans, T-shirts, socks, blouses, underclothes, shirts, and many others. Apart from providing these products, the business will also brand them. Teenagers like modern fashions that are branded with their names or the names of celebrities such as professional footballers, politicians, or musicians, and others (Barrow, Barrow, & Brown, 2008). Therefore; the business will acquire these fashions from the suppliers, and brand them at low costs for our customers. These new fashions will satisfy the target customers, as they will fit their tastes and preferences. To sell these products, the business will obtain licenses from the local authorities. The strengths of the products that the business will be selling include their durability, presentability, and valuable.
The management team will comprise four managers. They will include human resources manager, accounting manager, sales and purchases manager, and operations manager. The human resources manager will be in control of the employees’ affairs including hiring, training and development, and firing. The accounting manager will be in control of accounting practices in the business. The sales and purchases manager will be in charge of the sales and purchases. The operations manager will be in control of the overall management of the business. All these managers will be crucial for implementing my business plan.
This management team will possess crucial qualities such as sharing a common vision of success, being committed to staying together, and complementary strengths and attributes. All the managers will have to be experienced and successful in their work histories. The importance of this is that it will result to a good management of the business, which is crucial for the overall success. The accounting positions will require reinforcements from time to time. The less qualified manager will have a bachelor’s degree. I will seek advice from the business consultants, experienced accountants and entrepreneurs, and PR firms. This advice will be very crucial for the success of the business.
Market and competition
Guardian Angels Fashions will be one of the most influential cloth outlets in the region. The means by which the clothing outlet will be managed will be one of the most determining factors of its dominance amongst other entities. Firstly, the market status of clothes for the youth is encouraging. That is; the number of youths who are capable and have a willingness to buy products from the outlets is alarming. However, the same case applies to the number of competitive fashions outlets. Ideally, there are approximately other five shops of the same level in the region. This is an outstanding challenge that my business will face. This means that the industry will be registering a significant change in the next four years (Velthuis, 2010). It will be possible that if I will not revise the management and organizational procedures within the next three to four years, my fashions outlet might lose a great scope of the market.
There are some important steps that I will take to ensure the sustainability of the market scope that already exists before expanding it. First, It will be important that the management team extend its services closer to the customers. This is going to be done by purchasing economical transport vessels. This will enable the retail services to be extended to the outskirts of the urban centers. Currently, all the outlets are found within the major urban centers. This makes it tedious for the willing buyers to travel towards the urban centers. The fashion enterprise also intends to incorporate a market mix status. If the funds will are available, the enterprise intends to decentralize the management to new shops and entities across the borders.
Ideally, after putting up the structures and shop outlets across the country, the management will intend to introduce newer brands to avoid market boredom. The retail operation also intends to increase the variety of product to focus on the increasing number of youths. From a detailed analysis of the market status, in the next three to four years, there is a possibility for this business to kick out the close competitors from the larger part of the market. The factors that I intended to cause a change in the market structure are efforts to establish better advertisement strategies that will enable the creation of the market awareness.
Marketing and sales
Efforts to advance the status of the marketing strategies will involve professional initialization of effective long-term goals. The present products (clothes) that are responsible for the well-conceived market are taking a fluctuating route. In that connection, analyses conclude that it is important to alienate the current clothes that are being offered by the retail shops currently. The retail shop has commenced adopting imported fashions that are preferable to the youths. Records of the previous sales and the current sales by the other retailers show the possibility of dominance of the retail shop (Thompson, 2007). The management intends to improve the status of the business, as well as, create awareness of the new products. A new product is deemed to be better. Some of the retail sellers always take advantage of the newness and charge higher prices. The penetration strategy of the Guardian Angels Fashions retailers is intended to make sure that the prices do not increase.
There are a number of intended strategies that I intend to materialize within the next four years from now. The first strategy will be the installation of outside retailers to enable improved marketing. When the market points are well spread across the nation, the ability to maintain the market is very much possible. Physical reachability will be very import. Additionally, I will use occasional attendance by the key management officials to ensure that there are limited cases of sales irregularities such as alteration of prices ((Thompson, 2007). An expected level of sales increase will range from 50% to 60%. I expect this to happen within the next three years. I will also improve the level of communication to ensure that the level of transactional transparency will not affect the normal operations of the business. The advancement in the quality of clothes without the change in the prices will lead to an increase in the volume of sales I anticipate.
Business system and organization
The Guardian Angel Fashions outlet intends to have a linked business system and organization. The business system will be composed of a number of executive office holders who will be responsible for the entire operations of the entity. They will include the operations manager, sales and purchases manager, accountant manager, and human resources manager. There will be several heads of the outskirt outlets that will be responsible for the decentralized stores in the rural areas. The staff will be involved in the manual activities of sales performance and records keeping. The management will run the business on a 24-hour system.
The location of the head offices will be far away from the operational stores. However, the Operations manager will have an office in each of the fashion outlets. The hierarchy of performance in this case stipulates that the operations manager will be the overall head of every department. All the other managers will be equally answerable to the operations manager. Decision-making will not be aristocratic. There will be a level of democracy where the views of the managers as well as that of the subordinate staffs will be considered (Lan, 2005). For instance, the decision on the risky investment towards moving to the outskirts of the urban centers will be agreed upon by the entire fraternity. The subordinate staff will include drivers and mobile sales agents. They will be answerable to the human resources manager.
The implementation schedule will involve an in depth analysis on how our objectives will be achieved. Before constructing an implementation schedule, an implementation plan will precede the schedule.
The above implementation will be used to guide the business on its progress trend and help evaluate areas that could be improved to achieve the set goals
Human resource planning
Employees will be employed on merit basis after undergoing a rigorous interview conducted by an interim human resource expert. The candidates will perform short-timed exercises relevant to their qualifications and job applied. In addition, employees will be required to produce updated health documents to ascertain their health status. To secure the success as well as continuity of the business, the Guardian Angels outlet workforce will be composed of both experienced and recent graduates (Kerzner, 2001). Therefore, a review of an enticing remuneration package will be necessary to attract employees from rival companies.
The company will initially require 50 employees who will be redistributed to different levels of management. As a going concern, the company projects to expand its business and, therefore, the number of workforce are expected to double. Cost analysis will involve
• Wage rate (To be assessed temporarily and subject to review)
• Recruitment cost (recruitment of new employees and subsequent skills upgrade)
• Indirect labor costs e.g. refreshments for recruiters during interviews, communication costs during interview period)
• Wages will consider variations in wage cost due to the disparity in qualification and employee skills.
Investment and depreciation planning
This involves all the assets required to start a business. The initial capital will be distributed to cater for basic and miscellaneous costs. In addition, it will incorporate depreciation cost projected over the next four years of business. Depreciation of assets will be assessed on a straight-line method of their projected useful life. Investment costs will entail both physical and technical costs to enable a projected plan on the return on investments. Technical costs will include the installation of capital equipments to facilitate initial operation of the business.
The following is a comprehensive analysis of investment costs required for the business to start operations.
Physical assets will be assumed to depreciate at a constant rate of 10% per annum. Depreciation cost will be calculated using straight-line method over the next four years of business. These assets will be expected to operate efficiently over the next four years when replacement is considered based on efficiency and effectiveness. After the projected period of four years, assets will be valued based historical costs and the market cost to assess gain or loss after write off.
The company will consider replacing written off assets with a new one or upgrade their systems to accommodate demand at that time.
Opportunities and risks
Every business start-up faces numerous virtual f that may be difficult to assess their impact to the business. Moreover, the business is faced with numerous opportunities that occur as a result of the business continued operation in the market. To caution the business against any eventuality, the management will apply sensitivity approach method. The method will consider three levels of assessment i.e. recession, normal, expected and boom periods. This is due to fluctuation of prices and inflation, which form part of macroeconomic determiners
Some of the major risks that may adversely affect the business are
• Inflationary pressure that may affect price stability
• Elasticity of demand of products in the market. This may be due to external factors that influence consumers’ purchasing power and tastes and preference.
• Custom duties and income tax are likely to change because of budgetary evaluation.
• Bad debts
A business is likely to get more market opportunities than the competitors depending consumer responsiveness to the business products. One of the opportunities is the expansion of the business due to positive performance in the market.
Financial Planning and Financing
This part entails the assessment of capital required for the business to start and be able to sustain itself until the break-even point. In addition, it will consolidate the sources of funds that the business will approach to get capital
Planned Income statement and Balance sheet
Over the next four years, the business is expected to maintain a consistent cash flow, attain break-even point and attain normal profit to enhance the going concern concept of a business (Burton, Bragg, & Burton, 2000).
Expected annual Cash flow= $ 14000
Payback period= 4 years and 6 months
The Income statement will be anticipated to record loss on marginally reduced basis until the end of the second year when it is projected to break-even. During the first two years, the business will supplement its expenses cost with the precautionary cash reserve.
During the start-up, the balance sheet will record all fixed assets at initial cost. Current assets and current liabilities will also be recorded at the same cost. Capital will include cash reserve, investors’ capital in value of shares ($5 per share) and long-term loans from the commercial bank. Current assets, as well as current liabilities, are expected to change in the subsequent period as the business gets into operation.
Within the first year, the working capital is expected to record a deficit until the business stabilizes at the end of the second year.
This is necessary to cushion the business against becoming insolvent. A cash reserve is necessary to assist in paying expenses especially when the business monthly revenue does not meet the suppliers’ expenses. The accounting manager will compare the receipts against reimbursement. Initial cash reserve of $20000 dollars will be reserved to cater for those expenses.
This part entails the avenues where the business will source its funds to attain the required capital. Capital will be distributed at different levels of development. This is because as the business expands internally and external economies continue to accumulate thus the need to expand the capital kitty.
In subsequent years, capital is projected to remain constant in the next one and a half years. There
After, the business is expected to break-even, thus increase the capital kitty through ploughed-back profits.
Calculating the Investor’s Return
Investors return will be calculated using discounting method to assess the projected return over a period of four years. A discounting factor of will be
Discounting factor= 1/ (1+r) t
Where: r = discounting rate
T = time period of 4 years since business started
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Velthuis, C. (2010). Surfing the long summer: How market leaders grow faster than their markets. Oxford, UK: Infinite Ideas.
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Kerzner, H. (2001). Project management: A systems approach to planning, scheduling, and controlling. New York: John Wiley.
Burton, E. J., Bragg, S. M., & Burton, E. J. (2000). Accounting and finance for your small business. New York: John Wiley & Sons.