Assignment:
Based on your industry research, develop pro format financial statements for your business plan including, at a minimum, balance sheets, income statements, cash flow projections, sources and uses of funds, sales projections, and a full ratio analysis. These will be included in your business plan as addendums and will be used to support your overall plan. Remember, these projections and ratios will be important to your investors or bankers in determining whether or not they support your venture.
Fashion Business
The business environment is a highly competitive hence one ought to make proper choices when arriving at investment decisions. The best solution is to concentrate on an unexploited market gap where there is minimal competition. In that regard, therefore, the fashion industry has gained increased momentum with a significant demand for the latest clothes portraying an upsurge turn. Therefore, the proposed business establishment will be offering fashion brands to the customers, and the target market is the youth. This is because this niche is highly dynamic and their demand for the latest fashion clothes in the markets is relatively high (Gekonge, 2017). The business will be dealing with men shirts and trousers and ladies dresses, skirts, blouses and trench coats. The drive herein is to quench the thirst for fashion clothes associated with the young people. It is important to understand that in this era of technology, it has become extremely easy and cost-effective to market products to reach the target audience. With a huge population of young people surfing online, it is easier to post the available products online to inform them of their existence so that they can place orders at will.
Finding issues are likely to arise especially when penetrating a new market before the business becomes self-sustaining. For instance, the initial capital to stock all the proposed brands will require huge capital hence raising this amount at startup is relatively challenging (Harrington, 2017). Secondly, pricing is also a challenge. It is important to understand that there are other players who are offering the same products as ours though not that diverse. Pricing relatively low is one of the distinguishing penetration strategies that the business will adapt. This will certainly lead to reduced profitability hence raising further funding issues.
Fashion Business
Executive Summary
The Young Generation Clothe Line (YGCL) as the name of my business will exclusively be a wearable retail store. I will be targeting high walk-by traffic as the location for my business. The business will begin by providing varieties of clothes suitable for both genders. The target market will be the youths between the ages of 15 to 30 years. For a start, I will need a loan of $ 150,000. 31% of the credit will be used for up-front expenses while 69% will be for working capital needs. The business will operate between 7.00 am to 7.00 pm daily with assistance from sales agents whom I will employ. On a proper season, I expect a profit of about 60% after the tax and return on investment to accumulate at 20%.
Description of the Product
YGCL will exclusively deal with young men and ladies' clothes. There will be men's shirts, shorts, and trousers. On the side of ladies, there will be ladies' dresses, skirts, blouses and trench coats. These categories of clothes will be purely dependent on the current existing fashion styles in the United States and beyond. Though a more substantial portion of my stock will be acquired internally, I expect to import share of my stock from neighboring nations such as Mexico.
Discussion of the Industry and Market Conditions
Fashion business has been categorized among the junior businesses in the America for the last ten years (In Choi, 2016). Most of the entrepreneurs have never considered this kind of business as lucrative due to ignorance which majority of this entrepreneur is assumed to be having. For this reason, venturing into the fashion business is more of easy since there are less legal constraints that are required.
Competition
Clothes as Art Inc. and Artwear designers are the two leading fashion businesses in my locality which might pose a direct competition to my business. This is because these two enterprises have strong financial muscles as compared to my business. Apart from the two, other competitors that my business might face will come from other small vendors of clothes scattered across my locality which according to my estimations would never be too severe.
Marketing and Sales Plans
The more significant portion of my fashion business will be promoted through advertisement which will involve providing samples of my stock to groups such as high school students, and dancing groups as a form of building local support among the targeted groups. There will also be sales agents who will be involved in promoting some brands of cloths through the business social media platform and to some extension their accounts in the social media.
Management Team
Being a fashion and designer graduate, I will personally take charge at the helm of my fashion business for the first two years of business operation. In the subsequent years, I will employ one manager with two outstanding abilities. First, the manager will have to perform all the required managerial duties such as scheduling, sales computing, and employee guidance. Secondly, the manager will have to pose artistic abilities which he or she will apply in sales process through providing distinctive advice to prospective customers.
Basic Financial Analysis
All the sales returns will be recorded in the financial books of accounts. All the commercial books will be reconciled daily. All will have to get recorded down carefully, and appropriate plans will be needed for overcoming such loses. By taking all financial measures, I assume that my business will witness a 20% growth in its sales for two years to come.