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Meridith Soanes

BUSN 2482-60

Business Plan




                  Freak & Frolic
                  Business Plan
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                     I. Table of Contents



I. Table of Contents
   …………………………………………………………………………………………………………… 2

II. Executive Summary
    ………………………………………………………………………………………………….……….. 3

III. General Company Description
     ………………………………………………………………………………………………….……….. 4

IV. Products and Services
    ………………………………………………………………………………………………………..…. 5

V. Marketing Plan
   ……………………………………………………………………………………………………........ 7

VI. Operational Plan
    …………………………………………………………………………………………………………... 12

VII.Management and Organization
    ……………………………….………………………………………………………………………….. 15

IX. Startup Forecasts
    ………………………………………………………………………………………………………….. 17

X. Financial Plan
   ……………………………………………………………………………………………………….….. 19

XI. Appendices
    ……………….……………………………………………………………………………………….... 23
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                          Executive Summary
Freak & Frolic is a specialty apparel store that caters to the unique individual. The motive of
Freak & Frolic is to provide clothing, shoes, and accessories to those who live an alternative
lifestyle, and become the number one retail store servicing this niche market. Freak & Frolic has
a target market of men and women age 18 to 35 who range in education and income but all
share the desire to express themselves in an eccentric manner. Freak & Frolic is driven by our
RockStar customer service policy to become the number one best service retail store in all of
New York within three years.

Freak & Frolic is a sole proprietorship owned by Meridith Soanes and located at 490 Main
Street in Rochester New York. It is the only specialty store of its kind in the city of Rochester
and the location is infused with the local music and art culture. The online platform of Freak &
Frolic is intended to reach the target market in all other states in the US and even the UK. In a
world that fosters creativity and originality, there will always be a need for clothing that allows
one to express their personality. For this reason, Freak & Frolic will always be in demand and a
staple of individual freedom.

Freak & Frolic is requesting $150,000 to cover all startup cost acquired with preopening and the
first two months of inventory. Half the investment will be spent on inventory and advertising
while the remainder is spent on leasehold improvements, store equipment, insurance, and
supplies. With this loan Freak & Frolic will not incur any inventory cost for the first two months
and can build a startup foundation to grow as the year progresses.


                                    3 Year Highlights
       350,000

       300,000

       250,000

       200,000                                                                    Sales
       150,000                                                                    Gross Profit

       100,000                                                                    Net Profit

        50,000

             0
                        2013                2014                2015
       -50,000
                                                                                          Page |4



             General Company Description

Freak & Frolic is a specialty clothing and accessories store providing alternative American and
custom fashions for the unique individual. At Freak & Frolic, customer satisfaction is our top
priority and we ensure that every customer leaves our store looking and feeling like a rock star.
Freak & Frolic caters to the unconventional adult who desires to express their individualism no
matter their age. We also provide custom corsets to anyone who craves an hourglass flair.

Fashion will always be a growing industry because styles change so often. Freak & Frolic will
always provide new age fashion along with former styles that never lost their rage. As time and
fashion transforms so will Freak & Frolic, customers can mix and match new and old to create
their own personalized look. When the new era of open-minded culture unfolds and the
alternative look is accepted, Freak & Frolic will be there to provide the means.

Core competencies and strengths:
• First rate customer service experience
• Pleasant greeting
• Unbiased assistance
• Rare products in regular and plus sizes
• Mature atmosphere

The greatest strength that I can personally incorporate into Freak & Frolic is the passion to be
an individual. I have always prided myself on my strange sense of fashion and the confidence it
gives me not to change. I have comprehensive knowledge of constructing modern and classic
custom corsets. Aside from promoting a gratifying nonconformist lifestyle, I have vast
experience in retail, management, customer service, and above all things a defined talent for
leadership.
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                        Products and Services
Clothing                    Shoes                    Accessories             Corsets
Women’s sizes 2-22          Women’s sizes 5-15       Jewelry/Glasses         Steel Boned
Men’s sizes 28-50           Men’s sizes 4-14         Bags/Purses             Designed by consumer
Additional sizes Sm-2X      Brands:                  Makeup                  Personal fit
Brands:                     Demonia                  Body Jewelry            Personal fabric choice
Necessary Evil              Pleaser                  Buttons/Patches         Types:
Lip Service                 Iron Fist                Hair dye/Clips          Over Bust
Hell Bunny                  Penthouse                Socks/Stockings         Under Bust
Sourpuss                    New Rock Boots           Brands:                 Hip Bodice
Tripp                       Mad Fish                 Alchemy Gothic          Waist Cincher
Living Dead Souls                                    Victoria Frances        Strapless
Cyberdog                                             Stargazer               Collared
Too Fast                                             Manic Panic
Heavy Red                                            Strawberry Skull
Lucky 13                                             Dark Silver



Freak & Frolic will have a first-rate customer rewards program that can be joined in the store or
through the website. This rewards program will give frequent discounts based upon
accumulated purchases, alerts for new products and clothing, and birthday gifts. The RockStar
rewards program will also catalog member’s purchases and clothing sizes so that efficient stock
is kept at all times in their particular size. If a size is not available it will be ordered and sold to
the member at a discounted price, if the item cannot be ordered then the discount will apply to
any other item in the store.


Customer Service Experience:
• Specialized RockStar training program
• Empowered respectful employees
• Employee rewards for exceptional customer service experiences
• Comfortable seating area with free soda machine
• Full length mirrors, comfortable seating, and natural lighting in all dressing rooms
• Customers can request name brands or styles to add to store collection
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The relaxed environment, unique product, and unparalleled service will give Freak & Frolic its
competitive advantage. No other store offers such a distinctive clothing line to adults,
professionals, and plus sized individuals. Potential disadvantages will be the difficulties of
reaching a niche market. To counter this, I am planning to design a companion website with the
store to reach a larger market and help promote the business to other locations.


Pricing schedule:
• Clothing $30- $150
• Accessories $1- $50
• Shoes $20- $200
• Corsets $100- $1,000 (+groups)

Prices can vary between brand names. Generally, larger items such as full-length coats or boots
will be higher in price. Corsets are priced based upon amount of fabric and style. Customers
who provide their own fabric are only charged for labor. The corset department also provides
deals to groups such as weddings and re-enactors.


Policies:
Freak & Frolic will offer a layaway program for 60 days with 25% down. If layaway items are not
redeemed in 60 days then the 25% will be deducted for a restocking fee and the remaining
portion will be refunded to the customer. Customers who are steady paying portions on their
layaway order can receive an additional 30 days if requested. All layaway orders will be
contacted by phone and email on day 45 to be reminded of final payment. Size guarantee is for
RockStar rewards only and will be based upon past purchases.

Freak & Frolic will provide a 30-day refund policy through the store and online store. Items can
be exchanged from website to store also if necessary. Customers who are not part of the
customer loyalty program will need to provide a receipt to return or exchange an item. Those in
the loyalty program will not need a proof of purchase because their information will already be
on file. Funding for returns will be distributed through the means of initial payment, if a
customer uses a credit card the money will be returned to the original credit card. If an item is
deemed defective within the first 30 days, an exchange will be given.

Freak & Frolic will also have a feedback forum linked through the store webpage where
customers can rate and comment on their service and experience. Shoppers will receive a
discount on future purchases after leaving a comment, whether positive or negative.
                                                                                            Page |7



                               Marketing Plan
The US apparel and clothing industry includes 100,000 stores and produces annual revenue of
$150 billion. Freak & Frolic will include both women’s and men’s fashion but will concentrate in
specialty clothing, which is only 15% of the women’s apparel segment. In addition, Freak &
Frolic will include plus size clothing that makes up 25% of the women’s apparel segment.


         Clothing Industry                                 Womens Clothing
                                                             Segments


                                                                                     General
         30%                        Womens
                                                          25%         30%            Specialty
                      50%           Mens
                                                                                     Athletic
                                    Children            10%
           20%                                                                       High Fashion
                                                                    15%
                                                              20%                    Plus Size




Apparel Industry Trends from 2010-2020:
• Spending rose 7% in June 2011
• Sales have increased 5.7% in 2011
• Clothing costs to decrease by 4%
• Adults age 25-44 to increase by 8%
• Personal clothing consumption to increase by 5%
• Need for women’s plus-size clothing to increase by 7%
• Decrease in department store competition with specialty retailers
• New radio frequency inventory control systems
• New techniques for internet marketing


Considering the population in my target market and consumer spending on retail clothing is
going to increase in the next ten years, I would imagine the growth potential of Freak & Frolic
would be unlimited. The store is a small size, 1,200 sq ft, and the product sold is high quality
                                                                                           Page |8


with fair prices, so it could effectively use the space provided to generate the most sales.
Although I am not planning at this moment to have more than one store, I still believe that
Freak & Frolic has the potential for significant growth due to its unique product, wide selection,
and first-rate customer service.

Challenges and Barriers:
• Profit based upon stability of economy- offer shopper discounts and loyalty programs
• Demands for fashion change rapidly- offer specific styles while supplementing new trendy
  items
• High prices for specialty clothing- target consumers are aware of costs but we shall offer
  loyalty programs, clearance, and layaway options to assist with high prices
• Changes in technology- considered a beneficial advancement that can be used to better serve
  our customers
• Changes in government regulations- sustain by modifying policies or strengthening customer
  loyalty program

The employment turnover rate for retail clothing industries is more than 40%. This can have a
drastic effect on store expenditures and the constant need for training. To cut down on the
time and expenses lost with a high turnover rate, Freak & Frolic management will treat the
employees just as good as the customers. We trust that the employee who is respected, valued,
and involved will be more inclined to treat the employee with the same standards. Freak &
Frolic believes that the high commitment to employee satisfaction will retain staff and keep
costs low. During high peak seasons, part time employees will be hired to do fundamental tasks
such as stocking, storeroom, and the point of sale system, which require less detailed training.


Features and Benefits:
• Clothing
      - Brand name alternative US styles
      - Unique and not found in many stores
      - Include regular and plus sizes
      - Allows the individual personal expression at any age
• Shoes
      - Brand name alternative US fashions
      - Many sizes to fit needs of consumers
      - Large women’s sizes to accommodate for men with distinctive tastes
• Custom Corsets
      - Custom designed by consumer
      - Handmade skilled construction and tailoring
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     - High quality steel boning
     - Large variety of new and old styles to select from
     - Corsets are custom fit for perfect sizing
     - Customer can build the corset they have always dreamed

Target Market:



                                                                Secondary
     Primary Target
                                                                  Target
   • Men & Women 18-35                                   • Men & Women over 35
   • Urban Cities                                        • Urban Cities
   • Lower class- lower middle class                     • Working class- lower middle class
   • Average income $7,000- $50,000                      • Average income $15,000- $50,000
   • Education from high school to                       • Education from some college to
     Bachelor's degree                                     graduate degrees
   • Occupations vary                                    • Occupations vary
   • Desire to maintain an unconventional                • Those who desire self expression
     image                                               • Those who desire specialty custom
   • Express who they are                                  clothing
   • Majority listen to some segment of
     rock, punk, alternative, or techno
     music
   • Majority have tattoos, piercings, and
     even unconventional modifications




Freak & Frolic is an open-minded establishment and we will gladly cater to all lifestyles, no
matter if this has been a lifestyle choice or a consumer just looking to add a little flare. We are
trying to target an adult market, which may be excluded in other similar stores, but are more
than happy to assist any customer who is interested in making a purchase.
                                                                                                   Page |10



Competitors:

                                    •Strength: brand recognition, extensive customer base, and profitable
         Hot Topic                   online store
       18305 San Jose Ave           •Weakness: teen customer base, small sizes, trends change to quickly,
    City of Industry, CA 91748       and feeble customer service

                                    •Strength: brand recognition, extensive customer base, plus sizes, and
            Torrid                   profitable online store
       18305 San Jose Ave           •Weakness: clothing is more professional, trends change to quickly,
    City of Industry, CA 91748       and feeble customer service

   Raves Oh My Goth                 •Strength: large customer base, similar clothing and custom corsets
       1516 Emerson St.             •Weakness: small sizes, no online store, and rude customer service
       Denver, CO 80218

                                    •Strenth: large customer base, similar clothing, head location for Tripp
   Trash & Vaudeville                supplier, and widely known store
       4 St Mark's Place            •Weakness: only offer sizes under 10, small variety of alternative
      New York, NY 10003             clothing, and rude customer service

  Congregation of the               •Strength: large customer base, brand recognition, similar clothing,
   Forgotten Saints                  and popular radio advertising
                                    •Weakness: small sizes, no online store, and lacking customer service
       7569 Melrose Ave
                                     experience
      Hollywood, CA 90046



Promotional Budget:
Freak & Frolic is prepared to spend $5,000 on design, $30,000 on promotions, and $2,500 for
the QuickBooks software system. Ongoing costs for promotions will be 3% of gross revenue or
$5,000, whichever is higher.

Marketing Strategy:
Freak & Frolic will explore several inexpensive advertising mediums.
   • Social networking sites such as Twitter, Facebook, and MySpace
   • Store ads on Facebook and Google Adwords with pay per click
   • Companion ecommerce website
   • Mapping websites such as Google Maps and MapQuest with detailed information and
     links to the store website
   • Annual 1/8th page full color ad in Blood & Thunder, the progressive roller derby magazine
     for New York
   • Flyer distribution with coupons to local music stores, smoke shops, art galleries, concerts,
     derby events, nightclubs, and even through the mail
                                                                                           Page |11


  • Radio commercials- twice a day on local rock channels WBZA 98.9 and WNVE 107.3
  • One on one RockStar treatment for select individuals preopening day
  • Proudly display Freak & Frolic on my car with a vehicle wrap

I want customers to view Freak & Frolic as an inviting open-minded establishment designed to
foster the uniqueness of every individual. To convey this image Freak & Frolic has designed a
special logo that will be placed on all flyers, business cards, pens, signs, and online platforms. I
have decided to use Vista Print as my main source for graphic design due to their affordability
and customization. Freak & Frolic will require a considerable amount of interior design, I plan to
use Soanes Design LLC, which is my uncles business, and he has agreed to fulfill all designs for a
price of $5,000. I am also going to use QuickBooks for a point of sale system, credit machine,
shopper programs, customer tracking, bar codes, payroll, and an automatic replenishing
system.




SWOT Analysis:




                           Strengths                      Weakness
                      RockStar Customer                      Prices
                           Service
                                                            Stability
                           Expertise
                                                     Company Reputation
                            Location
                                                         New Business
                        Large Selection




                         Opportunities                      Threats
                           Revenue                      Large Retailers
                       Increase in Target               Market Stability
                            Market                      Copycat Stores
                     Defined Niche Market             Increased Clothing
                        Extended Sizes                      Costs
                                                                                          Page |12



                             Operational Plan
The future location for Freak & Frolic is a standalone building with 1,200 square feet in the
heart of the Rochester’s art and music district. The building contains one unisex bathroom and
will be remodeled to include three dressing rooms. There are no specific zoning requirements
that would deny the approval of Freak & Frolic in this location. The building was previously used
as a convenience store and has electric and utility already established. Being located near New
York City is a plus considering the majority of Freak & Frolics labels have distribution in this
area.

The proposed location is in downtown Rochester, within walking distance of other cultural
activities, two minutes from the local concert hall, and five minutes to the nearest freeway.
Freak & Frolic will be open from 12 pm - 12 am Monday through Thursday and from 12 pm - 1
am on Friday and Saturday. There is parking along the front of the store (Main St) which is
metered for hourly parking but along the back of the store are at least 20 parking spaces. The
online store is also available for customers to make purchases 24 hours a day seven days a
week.


Pricing:
Freak & Frolic will apply the markup pricing strategy. The initial markup will be the average of
all merchandise costs, expenses, and a marginal profit.

Initial dollar markup = operating expenses + reductions + profits
                                net sales + reductions

After an established 6 months, Freak & Frolic will utilize the percentage of cost markup pricing
strategy for each individual segment of product such as, clothing, accessories, and shoes.

Percentage of retail markup = Dollar markup
                               Retail Price

Percentage of cost markup = Dollar markup
                               Cost of unit
Dollar markup = Retail price - Cost of the merchandise

At the wishes of the brand manufactures sold at Freak & Frolic, no item will be sold for more
than the brand retail price. When possible, discounted prices will be passed on to consumers.
                                                                                                      Page |13


Inventory:
Freak & Frolic will keep only finished goods and the projected turnover rate will be six times a
year. This is a step up from the average turnover of four times a year due to season changes.
The main system for tracking and ordering inventory will be through the point of sale and
barcode system. All items will be coded and entered as they are received and deducted as they
are sold. The initial purchase of inventory will be $40,000 and will be replenished as items are
sold or seasonal items come available. Inventory will be counted every two weeks to compare
to point of sale records. Ordering and delivering inventory will take up to two weeks. Inventory
left at the end of seasons will be sold for half price through the store website or through EBay
listings.


Suppliers:

         Jack of All Trades                  Alternative Apparel
         159 Lexington Ave                                                              Lip Service
                                                381 Riverside Dr
        New York, NY 10043                                                          130 S Anderson St
                                              New York, NY 10041
      *Alternative name brand                                                     Los Angeles, CA 90033
                                        *Collection of alternative name
      accessories & shoes (50%                                                   *Alternative fashions for
                                        brand fashions (30% accessories
      accessories and 80% shoe                                               everyone (15% clothing inventory)
                                          and 60% clothing inventory )
             inventory)


                                                                     Rockabilia
                                 Tripp NYC                   http://www.rockabilia.com
                       http://www.trippnyc.com             *Major tshirt and rock influence
                    *Number one alternative fashions       memorabilia (10% clothing, 20%
                        (15% clothing inventory)             accessories, and 20% shoe
                                                                     inventory)




Freak & Frolic has at least two available options for each inventory item. Some suppliers will
provide many different name brands of clothing, accessories, and shoes while others just their
own brand. If I ever need to, I can always purchase items from individual brand websites. I do
expect to have some delivery problems every once in awhile, which is why I will make sure to
order products at least two weeks in advance. Inventory costs will always fluctuate based upon
which supplier and inventory item I am purchasing. I am prepared to deal with fluctuating costs
by estimating the highest amount possible from each order.

Credit Policies:
Freak & Frolic will not be able to sell anything on credit terms. Customers will instead be given
the opportunity to use the 60-day layaway program
                                                                                       Page |14


Accounts Payable:

       Accounts Payable      Total        Current        30 Days         60 Days

      Jack of all Trades
             (N60)          $5,000        $5,000

         Tripp NYC
                            $6,000                       $6,000
             (N30)

     Alternative Apparel
             (N60)          $15,000                      $5,000         $10,000

         Lip Service
                            $6,000        $6,000
             (N30)


          Rockabilia
            (N30)           $8,000        $8,000

**Initial inventory purchase of $40,000, all other inventory purchases will be based upon need
and trends.



Insurance Coverage:
• Property damage liability- covers those who are injured on the premises
• Property insurance- covers the shop, inventory, and equipment in the event of fire or damage
• Business income coverage- aid in losses due to natural disasters
• Medical payments- cover employees who are not covered by worker’s compensation
                                                                                           Page |15



            Management and Organization
Meridith Soanes is the Manager, Owner, and current head of staff. She has worked in the
customer service, retail, and food service industry for over ten years. She has held the position
of manager for a Subway Sandwich Restaurant for two years and an assistant manager for an
adult specialty retail store for three years. She has continuously stepped up into leadership
positions in any job she has obtained, including the title of shift leader. Meridith Soanes has an
AA degree in Business Management and an AAS degree in Entrepreneurship. Both degrees were
completed with a 4.0 GPA and a position in the Phi Theta Kappa Leadership Team. She excels in
organization, money management, delegation, team building, conflict resolution, and employee
empowerment. If Meridith becomes unable to continue to run her business due to mental
inability, physical disability, or death then the store and all appropriate guidelines are to be
handed down to her sister Madelyn Soanes.

Personnel:
         JAN     FEB    MAR     APR    MAY     JUN     JUL    AUG     SEP     OCT    NOV      DEC
Owner      1      1      1       1      1       1       1      1       1       1      1        1
  Full
           1      1       1      1       1       2      2       2      2       2       2        2
 Time
 Part
           0      0       0      0       0       0      0       1      1       1       2        2
 Time

Freak & Frolic plans to post job listings on Craigslist and local music boards because they are
free and generally attract the appropriate image for the business. Hiring employees will be
extremely important because they will become the backbone of the business and the RockStar
customer service experience. To obtain the right type of person who possesses the qualities
deemed most important, I will implement behavioral interviews and modified personality tests.

Pay Rate and Training:
Full Time Employees
  • $8 an hour to start
  • One week paid training for RockStar service, POS system, inventory maintenance, and
    storing and retrieving loyalty customer records
Part Time Employees
  • Seasonal employees for holiday seasons
  • $7.50 an hour
  • Three days paid training for customer service, POS system, and inventory retrieval
                                                                                     Page |16


Job Duties:

          Owner                         Full Time                      Part Time
 • RockStar Service              • RockStar Service             • Customer Service (all
   (loyalty customers)             (loyalty customers)            others)
 • Customer Service (all         • Customer Service (all        • POS System
   others)                         others)                      • Inventory Retrieval
 • Stock/Orders                  • Head Cashier                 • Maintain/Clean Store
 • POS System                    • Promotions
 • Web Store                     • Stock Management
 • Money Management              • Maintain/Clean Store
 • Accountant
 • Corset Fabrication
 • Promotions




Professional and Advisory Support:
• Steinbrenner Law Offices, 104 Troup St, Rochester, NY, 800-862-3149
• Insurance Agent: Beth Rogers, Nationwide Insurance, 26 Corporate Woods Suite 18,
  Rochester, NY, 585-427-7260
• Banker: Bank of America, 2830 Monroe Ave, Rochester NY, 800-432-1000
                                                                                         Page |17



                              Startup Forecasts
The projected startup costs for Freak & Frolic are $200,000, which includes all aspects of
leasehold improvements, equipment, inventory, and advertising. The owner will finance
$50,000 personally and $150,000 through a lending agent.

 Startup Expenses

 Leasehold Improvements
 Build out/Fixtures                           $     50,000
 Interior Design                                     5,000
 Camera System                                       1,000
 Alarm                                                 200
 Total Leasehold Improvements                 $     56,200

 Capital Equipment List
 Furniture                                    $       3,000
 QuickBooks POS                                       2,000
 Total Capital Equipment                      $       5,000

 Location and Admin Expenses
 Lease (biannual)                             $      6,000
 Prepaid insurance (biannual)                        2,500
 Utility deposits                                    1,100
 Legal (annual)                                      1,000
 QuickBooks Payroll                                    500
 Total Location and Admin Expenses            $     11,100

 Opening Inventory
 Clothing                                     $     20,000
 Shoes                                               8,000
 Accessories                                         6,000
 Corset Materials                                    6,000
 Total Inventory                              $     40,000

 Advertising and Promotional Expenses
 Advertising                                  $     30,000
 Grand Opening Entertainment                         2,000
 Printing/Logo                                       1,500
 Signage                                             1,500

 Total Advertising/Promotional Expenses       $     35,000

 Other Expenses
 Electronic Article Surveillance/Tag          $       2,000
 General Supplies                                       600
 Packaging                                              500
                                                                                         Page |18


 Total Other Expenses                          $         3,100

 Reserve for Contingencies                     $     30,000

 Summary Statement

 Sources of Capital
 Owners' and other investments                 $     50,000
 Bank loans                                         150,000
 Total Source of Funds                         $    200,000

 Startup Expenses
 Buildings/real estate                         $          -
 Leasehold improvements                              56,200
 Capital equipment                                    5,000
 Location/administration expenses                    11,100
 Opening inventory                                   40,000
 Advertising/promotional expenses                    35,000
 Other expenses                                       3,100
 Contingency fund                                    30,000
 Total Startup Expenses                        $    180,400




12 Month Sales Forecast:

                                    Sales- Year One
 30000


 25000


 20000


 15000


 10000


  5000


     0
          Jan    Feb    Mar      Apr   May   Jun   Jul     Aug   Sep   Oct   Nov   Dec
                                                                                              Page |19



                                Financial Plan
Due to instability of retail sales, my profit and loss projection for the first year includes some
months with revenue and some months without. The overall three year outlook is that Freak &
Frolic will encounter a loss of $9,000 the first year, a gain of $10,000 the second year, and a
gain of $50,000 the third year. These projections are based upon the US Census industry
standards of a 30%-50% annual increase in sales.

12 Month Profit and Loss Projection:

  28000

  23000

  18000

  13000                                                                        Sales
                                                                               Gross Profit
   8000
                                                                               Net Sales
   3000

  -2000     Jan   Feb Mar Apr May Jun      Jul   Aug   Sep   Oct   Nov Dec

  -7000

 -12000


3 Year Profit and Loss Projection:
 350,000

 300,000

 250,000

 200,000
                                                                               Sales
 150,000                                                                       Gross Profit
                                                                               Net Profit
 100,000

  50,000

       0
                    2013                2014                   2015
  -50,000
                                                                                             Page |20


12 Month Cash Flow (including investment funding):
 200000
 180000
 160000
 140000
 120000
 100000                                                                           Cash In
  80000
                                                                                  Cash Out
  60000
                                                                                  Cash Position
  40000
  20000
       0




Breakeven Analysis:

 Cost Description                        Fixed Costs ($)     Variable Costs (%)
 Variable Costs
 Inventory                           $          61,000                    0.0%

 Fixed Costs
 Salaries (includes payroll taxes)   $          47,400
 General Supplies                    $           2,400
 Advertising                         $           5,000
 Legal                               $           1,000
 Lease                               $          12,000
 Telephone/Internet                  $             720
 Electric/Utility                    $          12,000
 Insurance                           $           5,000
 Sales Tax                           $          11,147
 Packaging                           $           1,800
 Website                             $           6,000
 Security                            $           3,000
 Principal portion of debt payment   $          27,708
 Owner's draw                        $                   -

 Total Fixed Costs                   $         196,175

 Total Variable Costs                                                       0%



 Breakeven Sales level =                      196175
                                                             Page |21


Opening Day Balance Sheet:

Assets

Current Assets
Cash in Bank                                  $   200,000
Inventory                                          40,000
Prepaid Expenses                                    2,500
Total Current Assets                          $   242,500

Fixed Assets
Furniture & POS                                    5,000
Leasehold Improvements                            56,200
Real Estate / Buildings                                -
Total Fixed Assets                            $   61,200

Other Assets
Signage                                       $    1,500
Electric/Utilities                                 1,100
Supplies                                           1,100
Logo                                               1,500
Total Other Assets                            $    5,200

Total Assets                                  $   308,900



Liabilities & Net Worth

Current Liabilities
Accounts Payable                              $        -
Taxes Payable                                          -
Notes Payable (due within 12 months)                   -
Current Portion Long-term Debt                    27,708
Total Current Liabilities                     $   27,708

Long-term Liabilities

Bank Loans Payable (greater than 12 months)   $   193,885
Less: Short-term Portion                          (27,708)
Notes Payable to Stockholders                           -
Total Long-term Liabilities                   $   166,177

Total Liabilities                             $   193,885



Owners' Equity (Net Worth)                    $   115,015

Total Liabilities & Net Worth                 $   308,900
                                                               Page |22


Personal Finance Statement:

Assets                                     Amount in Dollars
Cash - checking accounts                   $       2,000
Cash - savings accounts                          60,000
Personal property (autos, jewelry, etc.)         10,200

Total Assets                               $      72,200

Liabilities                                Amount in Dollars
Current Debt (Credit cards, Accounts)      $         200

Other liabilities (rent)                           7,200
Total Liabilities                          $       7,400

Net Worth                                  $      64,800
                                                                                   Page |23



                                  Appendices

Store Equipment and Supplies:

• Super Circuits 4 camera video surveillance system (supercircuits.com)
• ADT Intrusion Detection 888-484-2238
• Intuit/QuickBooks POS and payroll program 866-379-6636
• Vistaprint retail starter package (vistaprint.com)
• ADT Electronic Article Surveillance 888-484-2238
• Premier Packaging holder/bags (retailpackaging.com)

Store Quotes:

• JB Sterling Company basic remodel: NY 585-425-4120 - buildout/fixtures $50,000
• Soanes Design LLC - interior design/furniture $5,000
• Nationwide Retail Policy: NY 585-427-7260 - insurance $2,500 biannual
• Steinbrenner Law: NY 800-862-3149 - basic retail legal $1,000

Studies and Research:
• US Census - http://www.census.gov
• Department of Commerce - http://www.commerce.gov
• INFORUM. Clothing Industry Report 2009-2011. Interindustry Economic Research. College
  Park, MD: University of Maryland, 2011. http://www.inforumweb.umd.edu

				
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