A Business Plan – Readymade garment shop Submitted as an Internship Project Report In partial fulfillment of the requirements for the Award of degree of Master of Business Administration
2009 – 2011
Submitted by Esha Sharma
Guided by Lokinder Kumar Tyagi (Internal Guide)
BHARATI VIDYAPEETH DEEMED UNIVERSITY INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
An ISO 9001:2008 Certified Institute NAAC Accredited Grade “A” University CRISIL Grading – MBA Programme
A * - National Level A ** - State Level
Certificate of Originality This is to certify that the Business Plan entitled “Readymade garment shop” Submitted to Bharati Vidyapeeth Deemed University Institute of Management & Research, New Delhi in partial fulfillment of the requirement for the award of the degree of MBA is an original work carried out by Ms. Esha Sharma under the guidance of Mr. Lokinder Kumar Tyagi. The matter embodied in this project is a genuine work done by Esha Sharma to the best of my knowledge and belief and has been submitted neither to this University nor to any other University for the fulfillment of the requirement of the course of study.
Signature of the Student Esha Sharma
Signature of the Guide Designation
Certificate This is to certify that the Business Plan titled “Readymade garment shop” is an academic work done by “Esha Sharma” under the guidance of Mr. Lokinder Kumar Tyagi submitted in the partial fulfillment of the requirement for the award of the Degree of MBA from “Bharati Vidyapeeth Deemed University, Pune”. The authenticity of the Business plan will be verified by the viva examiner which includes the verification of data the contents therein and may be rejected due to non-fulfillment of quality standards.
Prof (Dr.) Sachin S. Vernekar (Director)
Acknowledgement
Every piece of hard work requires the combined efforts and talents of many people. An Ambitious work of this kind, providing analytical review to the subject would have remained a concept rather than the finished product without co-operation of those who respondent to our request to contribute. I am very much graceful to our respected Director sir Dr.Sachin.S.Verneker who has enriched my knowledge and gave me a moral support to do this report. I am also highly thankful to Mr. Lokinder Kumar Tyagi (internal guide) in my college for showing the right path and encouraging me for the preparation of this report. I extremely thankful for his involvement and interest and providing necessary guidance regarding concept clarity of the project and support during all the stages of this project. I am very much thankful to all those people who gave me their valuable time and related information about the project.
Name & signature of the student Esha Sharma
Preface
A student without practical Knowledge is just like a rough student. To polish and shape the student one must have the practical knowledge of what he has learnt. For the management students, theoretical knowledge is just like lock without key, so practical knowledge is of utmost importance. It is quite true that world outside: your cosy home is many times quite different from what you have perceived. Similarly it is possible that theoretical knowledge acquired in the classroom may differ from the practical knowledge. I have made my business plan on the topic retail garment business and I have described about the business “READYMADE GARMENT SHOP”. The description in the project is about how to launch a garment shop on a small scale business and what are steps taken to launch a shop in a particular market. It is a business which runs on a small scale so not a deep research is done but a personal interview method is followed to collect the information from different retail garment shops and only few shops are surveyed by me. The further description is about the products offered, the expenses & the various taxes, the owner of the shop & workers in the shop.
Name & signature of the student Esha Sharma
Contents Chapters Executive Summary of Business Plan
Page no 1
Chapter-1 Introduction
2
1.1 Introduction of the retail industry
3
1.2 Description of Business and target markets
10
1.3 Objectives of Business Plan
14
Chapter-2 People (Management Team)
15
2.1 Description of management team
16
Chapter-3 Environmental Scanning of Business
22
3.1 Industry Analysis
23
3.2 Competitors Analysis (SWOT of Competitors)
30
3.3 Opportunities and Reasons of Entry of Business
32
3.4 Limitations of Business
33
3.5 Strategies framed to overcome environmental Challenges
34
Chapter-4 Manufacturing and Operations
35
4.1 Location of Production facilities
36
4.2 Plans for expansion
37
4.3 Product modification necessary to adapt to local environment
38
Chapter-5 Personnel Strategies
40
5.1 Personnel needed to manage Business
41
5.2 Experience and expertise of existing personnel
42
5.3 Training needs of existing personnel
44
Chapter-6 Market Research
46
6.1 Market Conditions
47
6.2 Existing Demand of target Market
47
6.3 Competition
48
6.4 Strengths and weaknesses of the Industry – Barrier to entry
49
Chapter-7 Marketing Plan
52
7.1 Distribution Strategies
53
7.2 Pricing Strategy
54
7.3 Promotion Strategy
55
7.4 Products Strategy
56
7.5 STP (Segmentation, Targeting and Positioning)
57
Chapter-8 Financial Decisions
59
8.1 Performa financial statements and projected cash flows
60
8.2 Identification of key assumptions
64
8.3 Current sources of funding – Private and Bank funding
65
8.4 Financial needs and future needs of funding
65
8.5 Tax Consequences of Business
66
8.6 Potential risk and sources of protection
67
Risk in Business
68
Implementation Schedule
69
Appendices
70
Bibliography
71
Executive summary of the business plan With the change in the trend in fashion market Readymade Garment have become very popular. Most of the people used to wear readymade garments have become very popular. Most of the people used to wear Readymade Garment in case of time saving activity. Especially ladies, kids, teenage girls and college going girls have taken very much interest in new designs and fashionable garments. Today, the women especially working or homemaker want to look gorgeous without being too traditional. I have decided to open a readymade garment shop to introduce new category of clothes in the market which may be something different from the clothes already available in the market. I have named my garment shop “TRENDZZ” and gave the punch line to the shop “completing the family” as I have gave this tagline to influence the customers and the people in the mar that they attract towards my shop and took visits in my shop. This tagline briefly means the shop completes every type of customer either girls, kids, women, boys, kids, man and college going girls. The owner of the shop is me and I have engaged three workers in the shop who will contribute to the sales and profits in the business and the capital is also invested by me and my father in the business. The shop basically targets teenage girls and college going girls as my shop has the availability of wide variety of kurtis, tops and other accessories. The other clothes which are available in my store are for the daily wear, party wear and for the ceremonies. My shop basically has jeans & trousers, shirts & tops, skirts, track suits, night wear and bath wear. So, my shop has the products which are related to active wear, workout gear, leather garments, headgear and baseball jackets. It covers almost all types of customers. My shop also provides the facility for the repair such as stitching of the clothes and altering of the clothes.
Chapter-1 Introduction
1.1Introduction of the retail industry
The technology advances each and every sector has been rapidly developed like a Government Sector, Engineering Sector and many more then how can the “READYMADE GARMENT SHOP” become backward. Each and every person wants to look like a hero and heroine. As the fashion takes place, they want to wear more fashionable clothes. In movies actor and actresses are wearing different types of dresses. Every person wants to look like them. With the increase in fashion every person want to wear that type of cloths. Some people purchase cloth material and visit at the tailor shop for stitching the dresses they like. But it takes too much time. Fashion is growing up day to day. Readymade Garment Shops are opened. People are satisfied from Readymade Garment Shop and people also save their valuable time. Readymade Garment Shop provides better design dresses to customers. With the change in the trend in fashion market Readymade Garment have become very popular. Most of the people used to wear Readymade Garment Shop have become very popular. Most of the people used to wear Readymade Garment in case of time saving activity. Especially ladies have taken very much interest in new designs and fashionable garments. Readymade Garment Company like as Nain See Private Ltd, Saujnya Dresses, Ashika Sarees and Dresses, Garden Dresses makes garment very attractive and it gives it special effect to that garment or dresses to be very attractive. There work of various types of stitches like “Kashmiri Buta, Kunadan Work or Jardari Work is become very famous in new trend. There are various other companies are also work to give better quality product. In recent years many people are interested in wearing Readymade cloths and specially ladies have most interest in that type of cloths so when the researcher is a lady it takes too much interest for the topic. So that researcher selected the subject Readymade Garment Shop as the study of the project. Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and around eight per cent of the employment. Retail sector is one of India's fastest growing sectors with a 5 per cent compounded annual growth rate. India's huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in India could be worth US$ 175-200 billion by 2016.
The organized retail industry in India had not evolved till the early 1990s. Until then, the industry was dominated by the un-organized sector. It was a sellers market, with a limited number of brands, and little choice available to customers. Lack of trained manpower, tax
laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business giants such as Reliance, Bharti, Birla and others are now entering into retail sector. A number of factors are driving India's retail market. These include: increase in the young working population, hefty pay-packets, nuclear families in urban areas, increasing working-women population, increase in disposable income and customer aspiration, increase in expenditure for luxury items, and low share of organized retailing. India's retail boom is manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer shopping, entertainment and food all under one roof. But there is a flip side to the boom in the retail sector. It is feared that the entry of global business giants into organized retail would make redundant the neighbourhood kiryana stores resulting in dislocation in traditional economic structure. Also, the growth path for organized retail in India is not hurdle free. The taxation system still favours small retail business. With the intrinsic complexities of retailing such as rapid price changes, constant threat of product obsolescence and low margins there is always a threat that the venture may turn out to be a loss making one. A perfect business model for retail is still in evolutionary stage. Procurement is very vital cog in the retail wheel. The retailer has to fight issues like fragmented sourcing, unpredictable availability, unsorted food provisions and daily fluctuating prices as against consumer expectations of round-the-year steady prices, sorted and cleaned food and fresh stock at all times. Trained human resource for retail is another big challenge. The talent base is limited and with the entry of big giants there is a cat fight among them to retain this talent. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. All the companies have laid out ambitious expansion plans for themselves and they may be hampered due lack of requisite skilled manpower. But retail offers tremendous for the growth of Indian economy. If all the above challenges are tackled prudently there is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth.
Retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.
1.1.1 Growing retail space The growth of the readymade garment industry is inextricably linked to that of retailing. For long, the bane of the domestic readymade garment industry was the inadequacy of the distribution system. Apparel retailers, with little retail expertise, had to build their own network, at considerable expense. The rapid growth in recent years of various retail formats, such as departmental stores and malls, has given a fillip to the industry. Players still believe that the retail industry is in its infancy. While KSA Technopak, a textiles and retailing consultant, expects some 200 malls to come up over the next two years, the growth in retailing is still seen with skepticism by apparel companies. Most of these projects are executed by real-estate developers rather than retailers. The latter are, however, better placed to understand the dynamics of the business. A boost to the industry would come from allowing foreign direct investment in retailing, which would increase space considerably and also bring international practices to India. This may also encourage newer entrants, once the distribution costs decline.
1.1.2 Expanding the retail network Apparel manufacturers were among the first to foray into organized retailing. Raymond, Indian Rayon and Zodiac Clothing have built an extensive retail network over the years. Even as they retail through other multi-brand outlets and departmental stores, they also continue to set up their own outlets. Having their own outlets, they believe would help showcase their entire range of products, as well as build their brand image.
1.1.3 Towards lower price points The brands may not even be as expensive as they are today. The leading ones have, in the past, been predominantly positioned in the premium segment. There has been a market for such products; Louis Philippe shirts have sold for Rs 4,000 and more. Clearly, the promise of high quality has held value for customers. But the strong response to a flurry of price cuts across sectors, ranging from airlines to telecom, has shown that the branded apparel segment cannot afford to miss out on the opportunity in mass markets for long. One has to only see the huge response to a Color plus sale to get an idea of the growing demand for branded clothing at lower price points. Brands have grown to depend upon such sales to drive up their volumes. With the exemption of excise duty on cotton garments and the creation of a level-playing field, branded players now have a good incentive to introduce products at lower price points for the mass market, which, till now, has been the preserve of smaller and relatively unknown players. But players may still find it tough to cater to this market. They would have to move towards a low-margin, volume-driven business. This would also need a far larger distribution network than what exists today. Few retail formats in India operate on a truly large scale. Giants such as Walmart and Carrefour, which have the ability to drive volumes, are what the industry would need; however, their entry is unlikely till such time FDI is permitted in retailing.
1.1.4 Tussle with private labels Manufacturers have found it is advantageous to have their own outlets for another reason. The increasing share of retailers' private labels is squeezing the space available for their
own brands. The likelihood of private labels emerging as a major threat to brands has been debated endlessly. Private labels tend to do well during recessions. Retailers enjoy better margins on their own labels, and are also able to price them lower. Private labels, however, plateau in the boom periods, when brands stand to gain. Players in the branded segment also contend that customers are eventually won over to brands by familiarity and quality assurance. Going one step further, private labels can help build markets for brands. For instance, the women's apparel segment is yet to take off in a big way, but private labels have managed to do well in this segment. The players such as Madura Garments, which have a presence in the segment through Allen Solly, believe that once women try out private labels and get more accustomed to Western wear, they are likely to upgrade to a more expensive brand.
1.1.5 Types of retail outlets A marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world. In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Retail is usually classified by type of products as follows: • • •
Food products Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. Soft goods - clothing, apparel, and other fabrics.
There are the following types of retailers by marketing strategy: • •
Department stores – It is a very large stores offering a huge assortment of "soft" and "hard goods; often bear a resemblance to a collection of specialty stores. Discount stores – It tends to offer a wide array of products and services, but they compete mainly on price offers extensive assortment of merchandise at affordable and cut-rate prices.
• • • • • •
•
•
• • • •
General merchandise store – It is a hybrid between a department store and discount store. Supermarkets - sell mostly food products. Warehouse stores -The warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves. Variety stores – The variety stores offer extremely low-cost goods, with limited selection. Demographic – The retailers that aim at one particular segment. Mom-And-Pop or Kirana Stores- It is a retail outlet that is owned and operated by individuals. The range of products are very selective and few in numbers. These stores are seen in local community often are family-run businesses. Specialty Stores- A typical specialty store gives attention to a particular category and provides high level of service to the customers. A pet store that specializes in selling dog food would be regarded as a specialty store. Convenience Stores- These stores are essentially found in residential areas. They provide limited amount of merchandise at more than average prices with a speedy checkout. This store is ideal for emergency and immediate purchases. Hypermarkets- provide variety and huge volumes of exclusive merchandise at low margins. The operating cost is comparatively less than other retail formats. Supermarkets- It is a self service store consisting mainly of grocery and limited products on non food items. Malls-They have a range of retail shops at a single outlet. They endow with products, food and entertainment under a roof. Category Killers or Category Specialist- By supplying wide assortment in a single category for lower prices a retailer can "kill" that category for other retailers. For few categories, such as electronics, the products are displayed at the centre of the store and sales person will be available to address customer queries and give suggestions when required.
Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include the following:• • •
Automated Retail stores are self service, robotic kiosks located in airports, malls and grocery stores. Big-box stores encompass larger department, discount and general merchandise and warehouse stores. Convenience store is a small store often with extended hours, stocking everyday or roadside items.
•
General store is a store which sells most goods needed, typically in a rural area.
1.1.6 Prevailing trends in Indian readymade garment industry Textile industry in India is widely comprehensive, integrating whole range of raw material to finished product that includes fiber manufacturing, spinning, knitting and weaving, and garment manufacture. The industry provides almost every single aspect which is as follows:1. Raw material It can be cotton, linen, and wool, silk and manmade fibers like viscose, polyester, polypropylene and acrylic. Indian companies have marked presence in even nontraditional segments. 2. Fabric production It includes suiting-shirting, dress material, fabrics for shorts and trousers, denim, hosiery, fleece flats and woolen knits, technical fabrics and so on. 3. Apparel production It specifies formalwear, casual wear, active sportswear, traditional wear, under garments, outerwear, kids wear, and you name it produces. 4. Made-ups production A wide range of bedding, towels, bath, table mats/linens, kitchen accessories and more. Additionally, to aid above all there are well established infrastructure, multi-benefited governmental, political and regulatory system that would lure foreign investors. In recent years, the readymade garment segment has seen vertical growth. Accounting nearly Rs. 20,000 crores, this industry is growing at the rate of 20 percent, with massive visibility and consideration margins. The largest segment for the readymade garment segment includes the age-group of 16-35 that is very brand conscious and gives priority to high quality. Branded readymade garments account over 21 percent of the readymade garment industry.
1.2 Description of business and target markets 1.2.1 Shop history The shop “Trendzz” is a type of discount store or a readymade garment shop for children, women, teenage girls, kids, infants, gents and boys. The clothing line that is unique, special, comfortable, and fun. My store targets the people which belong to middle class and upper middle class. However, my store has no collection of the raw materials but works for readymade garments and made-to-order preparation of clothes, stitching, threading, pitch work and designing & cutting of the clothes. My shop has brought the store look to the masses, and made it simple and affordable for anyone to get the readymade garment store look. All of their tops, bottoms, basics and accessories from each individual line coordinate with one another, making it easy for anyone to put together a well coordinated and princess worthy outfit. Store name: - Trendzz Shop address: - Shop no-12, D-12 block, Sector-7, Rohini. Punch line: - Completing the family Location of the shop: - D-12 block, Sector-7, Rohini Shop area: - 10/10 square feet Qualification: - Minimum qualification is 10+2/Graduate Experience: - 2 years Number of sales persons=3
1.2.2 Essential requirements 1. Machines & equipments=2(for stitching and repairing of clothes). 2. Threads & stitching accessories. 3. Office desks & chairs= 10. 4. Desk lamps= 10. 5. Clothing stands= 15. 6. Shelves and cabinets for storage=10.
7. Lights & 10 table fans. 8. Clothes hangers= 20. 9. Billing machine and credit card machine=1. 10. Polybags= 40. 11. Stationary items. 12. Stools= 10. Equipment or helpful products that you can acquire to once your business is off and running:1. Dressing rooms and mirrors. 2. Warehouse and godown. 3. Additional display furnishings. 4. Draperies, floor coverings. 5. Seating (small couches, chairs). 6. The restroom.
1.2.3 Target markets My shop has chosen girls, kids, women and gents as these most attractive segments to target. These segments are the most desirable because they have desirable levels of disposable income and they spend it. The women are used to having fashionable clothes and accessories and it is totally consistent with their purchasing patterns that this preference would remain unchanged once they get pregnant. Many expecting women like to reward or pamper themselves with nice gifts when they're pregnant. Family is interested in buying nice gifts for their expecting friends. This segment recognizes their friend's appreciation for nice things and are looking for something that they know they will enjoy. The output is meant to be something nice and luxurious. Much of the current maternity wear and accessories are utility based and while they serve their purpose, they are not the most engaging gift. Family are looking for something that will stand out, that the new mothers will truly enjoy.
1.2.4 Market need 1. To give something new innovation. 2. To have the best quality in minimum price. 3. New clothes. 4. New pattern of clothes. 5. Provide in bulk. 6. New attractive designing and good fitting of the clothes. 7. Meeting each type of requirements of customers regarding clothes. 8. To meet immediate requirements of the people.
1.2.5 Target markets 1. Sector-7 market, Rohini. 2. Sector-1, Avantika market. 3. Sector-2 market. 4. Sector-3 market. 5. Sector-5 market. 6. Sector-9 market. 7. Sector-8 market. 8. Market in Kohat Enclave, Pitampura. 9. Market in S-D block, Pitampura.
1.2.6 Mission 1. To increase the sales by 10%. 2. To satisfy different types of consumers i.e. teenage girls, women and kids. 3. Have an increase in new customer base yearly. 4. To create demand for different pattern of clothes.
5. To introduce new creative things in the market. 6. To obtain a return on equity of at least 30%.
1.2.7 Key to success 1. New trends in the fashion industry. 2. To survive this global restructuring, the Flemish fashion industry is increasingly focusing on its creativity to set itself apart from the competition. 3. Creativity is also becoming increasingly evident at retail level. The fashion retail trade once served merely as a support channel, but has now developed into a creative element in its own right, helping to enhance the symbolic added value of fashion items. This development underpins multi-brand stores, single-brand stores and flagship stores. 4. Anyone offering craftsmanship skills in the fashion industry will easily be able to find a well-paid job. 5. It is clear from discussions with stakeholders in the fashion industry that the tension between creativity and economic reality is a stumbling block for the future of the industry.
1.2.8 Scope 1. Discusses key issues relating to the challenges and opportunities facing boutique private banks in today's environment. 2. Explores current trends in the wealth management sector including technology trends and merger and acquisition activity. 3. Evaluates the current business model for boutiques and looks at future possibilities for development. 4. To develop relationships with customers. 5. Relationship selling.
1.3 Objectives of the business plan 1. To create demand in different markets. 2. Strong fashion and color sense with the ability to create and adapt designs to changing market conditions. 3. Good knowledge of fabrics, and the ability to choose the best match between garment design and fabric. 4. To get a position of a fashion designer within a fashion industry where I can use my best design, creative skills and experience to develop a unique product. 5. To obtain a position in the fashion design industry. 6. To get a position as a fashion designer and gain reputable work assignments to enhance reputation and skills in this field. 7. To work in a dynamic and challenging environment, where seamless integration of creativity can be experienced. 8. To introduce new creativity in the market. 9. Equally adept at performing as a project team member or working independently, depending on the nature of the project at hand. 10. Proven ability to translate client garment design requirements into design illustrations using leading design software such as Adobe Illustrator and Photoshop. 11. Significant ability to interpret people requirements and create designs that pinpoint their target market.
Chapter-2 Management team
2.1 Shop structure and description of management team The employees will be motivated to work within their creative, physical and intellectual boundaries. All duties will be divided and delegated according to strengths and weaknesses. At my store, I will expect a high degree of customer service skills and personality as this is essential to our success. I will assess the productivity and perform informal employee’s evaluations of all employees every six months. These bi-annual evaluations are conducive to the continued growth of our small business. Western Wear is a small business and therefore requires a simple organizational structure. I will act a general manager. All decisions are made in-line with the company objectives. Employee tasks are delegated based upon their level of expertise, creativity, strengths and weaknesses. All sales persons and I will be responsible for all administrative functions, purchasing, inventory control, and promotions. I will also act as a part-time sales representative. I have spent over 2 years in accounting, finance and operations management. I am also the owner of this store an e-commerce store for the years. I have extensive background in purchasing, inventory control, and marketing. As a small business, we will have a small staff of 6 members and me. Both co-workers and I will assume leadership roles within the shop and I will be responsible for daily operations, overseeing marketing efforts, giving service and managing inventory and all other administrative duties. A small sales staff will assist co-owners with securing sales, assisting customers and general maintenance of stock on the floor. The necessities for the start-up for the business:1. Number of salespersons:-3. 2. Requirement of part-time workers:-2. 3. Number of machines: - 2. 4. Chairs & tables:-10. 5. Lamps and table fans:-10. 6. Stationary products.
7. Storage cabinets. 8. Clothes hangers. 9. Decorated statues. 10. Billing machines and credit card machines. 11. Customer service. 12. Ordering of stock. 13. Cleaning staff. 15. Advertising, marketing and promotion.
2.2 Staff members Booming a readymade garment store will employ a sales staff of 2 part-time employees. These positions are yet to be filled. However, we feel the labor pool is such that finding qualified employees will not be an issue. Our sales associates will be paid an hourly wage, plus commission. Bonuses will be provided with each year of sales and service following an annual review to encourage employee retention. I don’t have any team of seniors but I and all 3 workers work together as a team. I train them to sell the clothes according to the requirements of customers and pay attention to their requirements and they try to follow my instructions to sell the clothes efficiently. The 2 workers work like stitching, patchwork, ironing, and final touch. The workers who stitch the clothes and gives final touch and measurement are 2. The workers who involve in selling process are 3. Some of the skills necessary to run this type of business other than the necessary business skills:1. Retail sales and marketing. 2. The merchandising. 3. Fashion knowledge. 4. Business ownership. 5. Clothing import.
6. Stock display.
2.3 Product Description 2.3.1. Casual Wear The "casual wear" is only one of the phrases used to describe the trend away from pin stripes and high heels. Other terms include business casual (usually means the Dockerskhakis-polo shirt look), business appropriate (a step-up from casual), business ready (meaning that a traditional suit must be ready to wear at all times), corporate casual, clearly casual, resort casual"(definitely not allowed in the office), refined casual wear (acceptable provided that you understand what it is) and perhaps most appropriately casual confusion. I have a variety of products to suit the needs of every individual, whether they are dressing for success or for an afternoon of leisure. Some of the company's products includes:Men's Pullover, Long Sleeve, Small to 5XL: Rs. 500.00 o Men's/Women's Pullover, Short Sleeve, Small to 5XL: Rs. 400.00 • T-Shirts (100% Cotton) o Men's, Long Sleeve, Small to 5XL: Rs.300.00 o Men's, Short Sleeve, Small to 5XL: Rs.200.00 o Women's, Long Sleeve, Small to 5XL: Rs.250.00 (100% Ladies Cotton) o Women's, Short Sleeve, Small to 5XL: Rs.200.00 (100% Ladies Cotton) • Denim Jackets (100% Cotton Denim) o Men's, Small to 5XL: Rs.700.00 o Women's, Small to 5XL: Rs.600.00 • Denim Pants (100% Cotton Denim) o Men's/Women's: Rs.700.00 o
2.3.2 Active wear/Sportswear At leisure lifestyle apparel, from yoga pants to terry track suits, is on the rise, and I offer a range of high-performance clothing for active sport, trekking, climbing, and travel that is suitable for the street, and practical for the gym. The collection is characterized by modern, comfortable, high-tech fabrics and functional, ergonomic designs. The active wear product includes the following:•
Sweatshirts (100% Cotton)
Men's/Women's, Long Sleeve, Small to 5XL: Rs.200.00 o Men's/Women's, Short Sleeve, Small to 5XL: Rs.150.00 • Sweat suits (Velour) o Men's/Women's, Small to 5XL: Rs.150.00 o
Sports styling will continue to dictate many casual designs throughout 2004, although natural looks where the fabric makes the statement will also be important. Sportswear and sports styling will continue to grip consumers who desire comfort in everyday wear, yet, as couch potatoes, hardly ever indulge in the activities for which the clothes were originally designed. 2.3.3 Workout Gear The colorful fashion trainers, rather than traditional running trainers, will accommodate the massive shift in shoe buying habits. Keyholes, zip inserts, and satin contrast strips and bindings will continue to feature in mass casual wear emphasizing the sporty feel. I offer a line of workout gear that brings together a combination of high-end, high-tech, and unique fabrics with today’s hot fashion trends. The store workout gear includes:Workout Tops (100% Spandex) o Women's, Small to 3XL: Rs.150.00 • Workout Bottoms (Coordinating) (100% Spandex) o Women's, Small to 3XL: Rs.125.00 • Socks (100% Cotton) o Women's, Fits Up to Shoe Size 15: Rs.100.00 • Jacket (Cotton/Polyester Blend) o Women's, Small to 3XL: Rs.150.00 •
Smart consumers are driving the performance fabrics of today. They want products with more comfort, more durability, and more fashion, which in turn will make their lives easier. In answer to the consumers' needs companies such as follow-me, appeal are developing techniques that manage moisture better, so it dries faster improving dyetechniques to enhance color-fastness and designing garments that keep people warm without weighing them down.
2.3.4 Leather Garments The leather motorcycle jacket is much more than a coat - it's a mentality. From the early twentieth century, airplanes, automobiles, and motorcycles redefined freedom, idealized speed, and captured the hearts of men and women alike. The leather jackets developed to protect pilots, racers, and motorists from the elements came to symbolize a romantic sense of rugged adventure. In particular, motorcycle jackets maintained this ideal for decades to come. I carry on this American-made tradition of the classic, leather, motorcycle jacket. Motorcycle Jackets (100% Black Leather) o Men's/Women's, Small to 4XL: Rs400.00 • Leather Pants (100% Black Leather) o Men's/Women's, Small to 4XL: Rs.350.00 •
Leather jackets are the most versatile and classic article of clothing the consumer can own. They may be extremely stylish and popular, following fashion trends from year to year, but the truth is that they are never out of style. Consumers can find leather jackets in various shapes and sizes or different lengths (such as trench coat, knee, three quarter, and hip), depending upon the consumer's body type, height, style, and taste. Even square-shaped, leather bomber jackets have made their return and continue to be popular. All leather jackets are stylish. 2.3.5 Baseball Jackets Ever since hip-hop innovators and style aviators Outkast appeared on MTV sporting old school Houston Astros jerseys with rainbow colors and 70s flavor, the rap world has seen a trend toward old school/vintage sports apparel. Since then, others have been seen in videos "discovering" forgotten logos and athletes. Retail stores' shop windows of showcase styles that, by today's standards, would be considered out of place for men playing on the field. Vibrant colors and rainbow designs that were once the norm in the seventies and eighties has been replaced with more conservative color schemes, or with shades of gray and black. I have in my store a line of new, satin baseball jackets that mimic those worn by teams of the past. They are made of thick, lined satin with attention to the finest details. •
Baseball Jackets (Satin and 100% Cotton) o Men's/Women's, Small to 5XL: Rs.250.00
The affair with the retired logo is merely another trend in hip hop's long evolution. A sports symbol can symbolize far more than one might expect. While wearing the
traditional, current logo of a local team can still symbolize an artist's claims of his/her roots, recent styles of sporting wear attest to more than locality, signifying pure fashion for fashion's sake in an ever-changing culture. 2.3.6 Headgear During the summer, fedoras and mesh caps made of natural grasses found favor among both men and women. Another common sight was unlikely combinations of feminine clothes and baseball caps, while, as an extension of the layered look, turbans were also a hit. This fall has witnessed the renewed popularity of the rounded, visored berets known as "caskets" that have been a conspicuous presence since last year. Hats and caps are coming out in a variety of materials, colors, and shapes, including woolen caps with designs knitted in and hats made of furry materials like angora. As to why hats have become entrenched as a fashion accessory over the past few years, we believe that headwear offers the easiest means of self-expression in the context of a general trend for casual fashion. Even a person dressed in a simple outfit like pants and a T-shirt can instantly express his or her personal style just by putting on a hat. Hats are becoming as much an integral part of young people's wardrobes as other fashion items, and I have a variety of hats to suit everyone's taste. These include the following:• • • • •
Ski Hat (Wool) Men's/Women's, One-Size-Fits-All Beanie (Polyester/Cotton) o Men's/Women's, One-Size-Fits-All Fitted Baseball Cap (Cotton) o Men's/Women's, One-Size-Fits-All Sun Visor o Men's/Women's, One-Size-Fits-All
Hats have always combined fashion with practicality, offering protection from both the summer sun and the winter cold. Right now, hats are experiencing a boom in popularity that has made them an essential item regardless of the season. More and more people are wearing hats of distinctive designs that, unlike the past hat booms are not constrained by fashion trends.
Chapter-3 Environmental scanning of business
3.1 Industry analysis 3.1.1 Market segmentation My store intends to target men, women, and children in the Tri-State Area who require competitively priced, branded clothing. Within all groups, there are no color barriers and customers have diverse backgrounds. The consumers range between one year and 60 years of age. According to the NPD, women spend about 80% of all money that goes for sportswear. They control 96% of the dollars spent on their own clothes, 93% of those spent on children's, and 60% of those spent for men's sports apparel. During 1999, the women's consumer segment, a constant consumer group, dominated the U.S. apparel sales market. Women's apparel sales growth was 3.7% and represented 52% of all apparel sales, whereas men's apparel growth was 4.1% and accounted for 31% of total apparel sales. Women tend to buy at a constant rate, whereas men's apparel sales have been growing. Individuals under the age of 20 wear about 43% of sports apparel, but individuals aged 45 and older accounted for 25% of the market in 1999. Girl's and boy's apparel rose 0.5% and 3.8%, respectively. The Market Analysis table and chart, below, show potential customers in the Tri-State Area by gender and age groups, as well as potential Internet sales.
3.1.2 Categorization of the customers 1. Teenage girls: - The age between 11 to 19 Middle class & upper middle class Income groups i.e. maximum 25,000 2. Women: - The age between 40 to 60 Middle class & upper class Income groups i.e. maximum 30,000 Expected mothers 3. Kids: - The age between 1 to 10 Middle class & upper class School going kids 4. Boys and gents: -The age between 1to 59 Middle class & upper middle class
3.1.3 The category of clothes is explained is as follows:3.1.3.1 Adult Apparel The production of adult apparel, particularly women's clothing, occupies the largest sector of the apparel industry. In 1990, over 1,000,000 workers were employed to produce an almost infinite variety of dresses, suits, coats, and sportswear. Traditionally, the women's apparel business has operated on a five-season basis i.e. fall line merchandise is usually offered to retail store buyers in April; holiday collections in June; early spring, resort, and cruise wear in October; spring and summer clothes in January, may and early fall fashions in March and April. Men's clothing design and sales are in a state of upheaval. In the past, manufacturers presented two new lines of classic clothing each year, changing fabrics for seasons. Today, many firms produce highly styled clothes for department store boutiques and small specialty shops which cater to the fashion-conscious man. Their problems with seasons, lines and style acceptance parallel those of women's wear producers.
Other than children's wear, the market for men's clothing has grown faster than any other sales category in the industry. The introduction of state of the art permanent-press fabrics probably initiated this sales increase, but the acceptance of casual fashion in men's wear, spurred by the growing youth market, has been the main factor. Although the larger firms are continuing to gain ground compared to smaller firms, and brand-name merchandise already has a large share of the market, the preference for major brands is not longer unanimous. Retailers are now much more open to adding new product lines. The current interest in personalized trends, which more closely reflect the consumer's identity, provides an opening for small and lesser-known collections. The "cheap chic" trend is also spurring consumers to expect more at a lower cost, seeing little difference in style from one brand to another. 3.1.3.2 Sportswear Individuals under the age of 20 wear about 43% of sports apparel, but individuals aged 45 and older accounted for 25% of the market in 1999. The widening age gap between youthful and not-so-youthful wearers represents a multitude of challenges in designing, marketing, and branding for sportswear manufacturers. The growth of the sportswear industry is particularly marked among female consumers, who now see themselves as more athletic and have begin to wear these collections as street clothes. Since women are more "outfit-oriented" than men when it comes to exercise clothing, they represent a target clientele for this industry. The junior market segment is also of primary important in this industry, as sportswear is often tied in to fashion. A product's technical characteristics are also very important in this industry, competing with the "sport-fashion" factor in the final buying decision. Technical consumers are much more consistent in their buying habits and provide stability during economic slow downs. 3.1.3.3 Junior Clothing The strong growth in demand in the junior clothing industry has, so far, been able to minimize the unfortunate effects of the economic slowdown, but heavy competition in the market makes retailers very conscious of fluctuations in demand. Competition in the junior market segment has shot up in recent years, with a twofold increase in the number of junior clothing chains. Popularity and brand visibility are very important factors in buying decisions made by this market segment; this reduces the maneuverability of small manufacturers who want
to position themselves in the market. It is crucial to follow trends because this segment follows fashion cycles closely. It is possible to position one's self with very up-to-date collections at lower prices than well-known collections; however, this means following the market closely and providing the resources necessary for product visibility. 3.1.3.4 Children's Wear Manufacturers of children's clothing produce large lines from which the store buyer makes purchases three times a year to cover the main selling seasons of spring and summer, back-to-school and holidays. Although children's apparel is a basic family requirement, the fashion revolution is affecting even these styles. Mothers (controlling 93% of all apparel dollars spent on children's wear) want their children to have the latest "look." Children's wear manufacturers are becoming highly skilled at producing high fashion apparel. Kid's fashions have been one of the fastest growing categories of apparel. To keep pace with this trend, manufacturers have adopted the production and sales techniques used in women's apparel. This has led to enormous numbers of children's wear departments and specialty stores throughout the nation. The children's wear industry has grown considerably in recent years, but still remains a small market segment and can be difficult for small manufacturers to enter. Since children's wear trends increasingly mirror those of adult apparel, children's collections must not only please children, but also be very similar to current trends in the adult market. This calls for constant monitoring of the market and a high degree of flexibility and quick adaptation. Major firms that market adult collections at the same time as children's copies have a head start in this regard. Price, nonetheless, remains a decisive factor in making purchases, given the speed at which children outgrow their clothes. Manufacturers who are competitive in this regard and have the flexibility to adapt their products to fashion trends can find worthwhile niches.
3.1.4 Target Market Segment Strategy My shop has chosen girls, kids and women as the three most attractive segments to target. These segments are the most desirable because they have desirable levels of disposable income and they spend it. The women are used to having fashionable clothes and accessories and it is totally consistent with their purchasing patterns that this preference would remain unchanged once they get pregnant. Many expecting women like to reward or pamper themselves with nice gifts when they're pregnant. Family is interested in buying nice gifts for their expecting friends. This segment recognizes their friend's appreciation for nice things and are looking for something that they know they will enjoy. The output is meant to be something nice and luxurious. Much of the current maternity wear and accessories are utility based and while they serve
their purpose, they are not the most engaging gift. Family are looking for something that will stand out, that the new mothers will truly enjoy.
3.1.5 Shop participants 1. Suppliers= 4 suppliers. 2. If required= no requirement or requirement of raw material after 3 years. 3. Distribution patterns= no patterns followed. 4. Competition= medium competition and low competition. 5. Number of competitors= 30. 6. Main competitors= 6.
3.1.6 List of main competitors 1. Incense: - Shop no-7, D-10 block, sector-7, Rohini. 2. Kashish: - Shop no-16, B-4 block, sector-7, Rohini. 3. Dhoom: -Shop no-12, A-4 block, sector-7, Rohini. 4. Rewa: - Shop no-18, D-12 block, sector-7, Rohini. 5. Pentaloons: - Shop no-24, B-6 block, sector-7, Rohini. 6. Shona wears: -Shop no-14, D-12 block, sector-7, Rohini.
3.1.7 Basic need of the existing customers 1. To give something new innovation. 2. To have the best quality in minimum price. 3. New designs. 4. New pattern of clothes. 5. Provide in bulk.
6. New attractive designing and good fitting of the clothes. 7. New fashion clothes/latest trends of clothes. 8. Ethnic wear. Basic needs are as follows:From man’s viewpoint:1. Branded products Men are more up front about their desire for branded goods, while women are more subtle. Men's sportswear, for example, often carries enormous logos, while the logo on the expensive lipstick worn by many a woman remains at the bottom of the handbag, to be flashed only discreetly, in the powder room. 2. Comfort and easy-care Men want comfort and easy-care apparel, and the sportswear world provides this through high-tech fabrics. According to Bill Ghitis, president of global marketing for DuPont Textiles & Interiors (DTI), "Performance fabrics have been a niche for the athlete, but, based on our research, we believe that all men, particularly smart men, want much more out of their clothes." From woman’s viewpoint:1. Comfort and easy-care Women avoid wrinkles on their skin, and they don't want them on their clothes either. While the Fountain of Youth may be elusive, in the ongoing quest for comfortable cotton clothing that won't wrinkle, women (and men) are winning the battle. Technological advances have ushered in a new generation of wrinkle-resistant, 100% cotton garments that deliver on comfort, style, and wear, while retaining a crisp appearance throughout the day. 2. Apparel sizing The discrepancy in the actual size of women who may all - accurately - claim to wear the "same" size is one of the many fit anomalies that are a reality today for the U.S. clothing industry. Little analysis of body shapes and sizes has been conducted since the 1940s for women and since the Civil War for men.
3. Sportswear
Until very recently, even if you got women into the stores looking for sporting goods and apparel, there was nothing for them to buy. There is a definite void in the market for women's related merchandise, such as feminine looking garments rather than unisex. From children’s viewpoint:1. Fashion With fashion continuing to drive the children's apparel market, industry players are attempting to work more quickly and efficiently to make sure they have the right looks on the floor at the right time. Children's and parents' ever-louder cries for kids' apparel with looks that mirror juniors, young men's, and even adult clothing is also inducing retailers to commit to pint-sized incarnations of older styles, without waiting to see how the latter fares with customers. Tops with spaghetti straps and multicolored shimmering or sequined borders are gaining ground with girls. Boys are gravitating toward athletic silhouettes: brightly colored, printed camp shirts worn over muscle T-shirts, zip-off pants and shorts that extend several inches beyond the knee. Style is important to these young adults, but style comes in many different packages cellular phones, cars, and vacation destinations are among them. In addition, the teen and tween segments appear to find individuality appealing. 2. Branded products 3. Easy to wear clothes 4. Comfortable clothes
3.2 Competitor analysis S.W.O.T. analysis of the competitors 3.2.1 Strengths 1. Changing consumer habits and lifestyles. 2. Plastic card revolution. 3. Greater availability of quality retail space.
4. Huge profits. 5. Competent to other competitors. 6. Home delivery. 7. Having the large number of outlets covering the whole country. 8. Having large inventory.
3.2.2 Weakness 1. Policy related issues a) Lack of industry status for retail. b) Numerous license, permits and registration requirement. c) Farmer and retailer unfriendly APMC act. 2. Limited consumer insight a) Lack of detailed region specific customer data. b) Less data on spending pattern. 3. Inadequate human resources a) Lack of trained personnel at all level. b) Stringent employment and industry laws. c) Fragment approach to human resources. 9 4. Taxation hurdle a) Inconsistent taxes like octori & freight and entry tax structure. b) Vat (value added tax) and multiple taxation issues. c) Large grey market presence. 5. Underdeveloped supply chain a) Underdeveloped logistics infrastructure. b) Absence of national cold chain networks. c) Lack of national distribution networks and hubs. 6. Lack of adequate utilities
a) Lack of basic infrastructure like power, creates difficulty in sustaining retail operations across the large geographical spread of the country. b) Transport facility c) Communication problem
3.2.3 Opportunities 1. Potential for investment. 2. Locational advantage. 3. Sectors with high growth potential. 4. Fastest growing formats. 5. Rural retail.
3.2.4 Threats 1. Political issues. 2. Social issues. 3. The inflation. 4. The nostalgia. 5. Lack of differentiation among the malls that are coming. 6. Poor inventory turns and stock availability measures.
3.3 Opportunities and reasons of entering business Retail is big business driven by the ever-growing consumer need for an array of products and services. This creates a marketplace of job opportunities that spans department stores, discount merchandisers, factory outlets, specialty stores, automobile and food retailers. For many the perception of retailing does not go beyond being a customer at a store or at the most from a summer sales job in a mall outlet. But there are many behind-the-counter tasks involved in getting the products into the stores and onto the shelves ready for
customers to buy. This lends itself into a breadth of career paths in merchandising, marketing, and store management, finance and distribution and information systems. The following are examples of positions in retail to give you an idea of the opportunities that waits are:• • •
•
A Buyer selects and orders merchandise, plans sales promotions and maintains sales and inventory records. A Planner effectively plans and controls inventories at the location level to maximize sales and profit, also directs the distribution of goods. A Department manager establishes and implements policies, goals, and procedures for the specific department, supervises employees, reviews inventory and sales records as well as coordinates activities with other departments. A Store Manager oversees employees at a given retail location and steers his or her unit toward corporate sales and profit goals.
Following are the opportunities are as follows:1. Low cost of operations. 2. The franchising. 3. Joint ventures. 4. Strategic license agreements. 5. Cash-and-carry wholesale trading. 6. The manufacturing. 7. The distribution. 8. Abundant availability of skilled labor. 9. Potential untapped market. 10. Rapid economic growth. 11. Career in retailing and retail management. 12. More growth opportunities.
3.4 Limitations of the business
1. High staff turnover. 2. High absenteeism of the staff at the outlets. 3. Huge expenditure on the inventory and salary of the salespersons. 4. Huge expenses on the maintenance of the outlet like cleaning, updating of the items etc. 5. Incurring losses. 6. Less profit maximization. 7. Less pay structure of the workers. 8. Outdated technology like machines of billing etc. 9. Changing market conditions constantly. 10. Changing customer’s preferences constantly.
3.5 Strategies to overcome environmental challenges Consumers are the kings in today’s market. Consumer decides the demand and supply for each product. Some products are there, which triggers huge demand and if there is a demand there also be enough competition for that particular product. Business owners are planning strategies to cut through this competition and make more sales and retain customers. Strategies are as follows:1. Analysing the market conditions by surveying method like personal interview. 2.Setting-up a written plan as a road map and follow it, check it daily and see if you are swearing from it and if so make course corrections. 3. Hiring people by self and train them self - no one knows what is wanted better than us. Teaching them to shut up and listen. 4. Keeping employees happy. A happy employee is less likely to steal, more likely to exude joy and as a result will result in happier customers.
5. Talking to the customers as they leave the store, the ones that bought will tell what they likes, the ones that didn't buy will tell why they didn't buy, listen and take notes. 6. Offering huge discounts.
Chapter-4 Manufacturing and operations
My store does not provide the facility of the making and production of the clothes but I have few suppliers who supply clothes in bulk ever quarter of the month. Since it is a small garment store I don’t prepare clothes and also small amount of capital is invested in the business.
But my future plan is to introduce hand-made clothes in the market where my store is located and also targets other markets and make my store a big showroom. Currently, it is a trial business and analyse if the business will make profit in coming few years or not.
4.1 Location of production facilities The production activity should be located where a firm can be most productive and yield the highest revenues per unit of investment. A highly productive business outlet:•
Is one that is near to the market, so that the demand for units of output is high relative to costs of making that input?
•
Is one that is close to a skilled labor force? The easier it is for the firm to attract labor with appropriate skills the more likely it is to produce high value outputs and low costs per unit of output.
•
One that locates close to high value raw materials. The further materials have to travel the lower the productivity of the plant will be.
The effective location for production will include some or all of the following factors:1. The closeness to point of sale. The higher the sales revenue, the higher the productivity will be. 2. Near to skilled labor source. 3. Have room for expansion. 4. Have good communication links. 5. Closeness to raw materials. 6. Away from centers of population - for noisy, environmentally unfriendly industry.
Location of my store and production facility The store currently operates out of a warehouse and office building located in Rohini. The 20 square foot facility provides enough room for storage of the stock which is
received from the suppliers and storing in bulk as well as administrative office space. A two year lease has been signed at Rs.2, 000 per square foot with options to extend the lease. The facility can be expanded an additional 30 square feet at any time to accommodate growth of the store. The small warehouse is bought on rent. The amount of the rent is nearly Rs. 4,000 per month which is paid every month even if the store earns profit or not. Once when the business will earn supernormal profits the there is a plan to hire own ware house which is much bigger in size as compared the current rented warehouse so that more and more stock can be stored and kept safe in the warehouse. Factors to be Considered in Choosing Retail Locations:1. Size of the city's trading area. 2. Population and population trends in the trading area. 3. Total purchasing power and the distribution of the purchasing power. 4. Total retail trade potential for different lines of trade. 5. Number, size, and quality of competition. 6. Progressiveness of competition.
4.2 Plans for expansion Our retail growth strategy is to increase retail sales and profitability by expanding our network of retail store and improving the performance of existing store. Our retail locations build brand awareness and contribute to market penetration and growth of the brand in concert with our wholesale operations. The store will also consider opening stores in the different states in the next years. 4.2.1 My long-term plan for the business 1. To invest the capital more in the future to expand the business. 2. To keep my own inventory of different stuff of clothes. 3. To engage the fashion designers to make hand-made creative and more beautiful clothes.
4. To advertise my shop through online advertising. 5. To arrange workers up to 20. 6. To keep more accessories like jewellery, make-up accessories. 7. To arrange latest equipments for stitching clothes. 8. To earn the profits 5 times of the today’s profits. 9. To built a big showroom from the small store. 10. To expand the business in the whole country and opening of the stores in different states.
4.3 Product modification necessary to adapt to local environment However, it is beginning of the shop so modification is not much required at the first stage of the business. My store already has the collection of clothes which are not expensive can be easily sold anywhere in small area. This shop is also suitable for middle class income group people, upper middle class income group people and low class income group people. The modifications if required can be followed are as follows:1. Availability of the big brand clothes. 2. Less availability of the stock of other clothes like sportswear, track suits and hats. 3. No availability of the rest corners and rest rooms in the shop. 4. Procedure of payment of bill through credit card may not be available. 5. Less availability of the whole inventory if warehouse facility will not be there. 6. Non-availability of other accessories. 7. Clothes repairing facility may not be available like stitching, Knitting and embroidery. 8. Quality of a product. 9. Quality of a textile material. 10. Quality of a process of production.
Chapter-5 Personnel strategies
5.1 Personnel needed to manage business The shop will be open seven days a week during the summer when people are shopping the downtown the whole area. Through the winter season we will close on Monday as do most of the downtown retailers. For the Holiday season we will extend our hours to two
nights a week to accommodate those after work shoppers. We will be located next to a well known upscale other grocery shops and germent shops in the area, throughout the summer customers line up to wait for new stock. We will be able to capture that traffic. As long as there is a customer in the store we will stay open and serve them. The personnel information of my shop is as follows:1. Number of salespersons: - 3 2. Salespersons (girls):- 2 3. Salespersons (boys):- 1 4. Salespersons (part-time workers):-2 As it is small shop, I have only 5 full-time workers and 2 part-time workers and I also sometimes engaged in the process of selling and field work if the workers take leave and on the half-day. The salary of the workers is also negotiable and it is based on the working hours and skills of the employees. Salary of the employees:1. Full-time workers= 2,000 per month 2. Part-time workers= 1,000 per month For extra working hours:1. For 2 hours overtime a day= Rs.150 for full-time workers 2. For 2 hours overtime a day= Rs.100 for part-time workers The overtime is counted only for the workers if the workers will in the field for more than 2 hours and less than 2 hours of work, the overtime will not be counted.
Holidays/leaves given to employees:1. Casual leave= 3 2. Sick leave= 2
The leaves are also negotiable with the type of the worker in the shop. For full-time workers:1. Casual leave= 5 2. Sick leave= 3 For part-time workers:1. Casual leave= 3 2. Sick leave= 2
5.2 Experience and expertise of the existing personnel Retail salespersons typically learn their skills through on-the-job training. Although advancement opportunities are limited, having a college degree or a great deal of experience may help retail salespersons move into management positions. Qualification of the workers:1. Minimum 10+2 with 50% percent with HSC and CBSC for part-time workers. 2. Minimum graduate with 45% percent marks from recognized university. 3. The candidates who have experience of 6 months in other discount and departmental stores will be highly preferred.
5.2.1 Education and training There usually are no formal education requirements for retail sales positions, but employers often prefer applicants with a high school diploma or its equivalent. This may be especially important for those who sell technical products or “big-ticket” items, such as electronics or automobiles. A college degree may be required for management trainee positions, especially in larger retail establishments. Most retail salespersons receive on-the-job training, which usually lasts anywhere from a few days to a few months. In small stores, newly hired workers usually are trained by an experienced employee. In large stores, training programs are more formal and generally are conducted over several days. Topics often include customer service, security, the store's policies and procedures, and cash register operation. Depending on the type of product they are selling, employees may be given additional specialized training. Due to
providing the best possible service to customers is a high priority for many employers, employees often are given periodic training to update and refine their skills.
5.2.2 Other qualifications The employers look for people who enjoy working with others and who possess good communication skills. The employers also value workers who have the tact and patience to deal with difficult customers. Among other desirable characteristics are an interest in sales work, a neat appearance and a courteous demeanor. The ability to speak more than one language may be helpful for employment in communities where people from various cultures live and shop. Before hiring a salesperson, some employers conduct a background check, especially for a job selling high-priced items.
5.2.3 Advancement The opportunities for advancement vary. In some small establishments, advancement is limited because one person is often the owner and does most of the managerial work. In others, some salespersons can be promoted to assistant manager. Large retail businesses usually prefer to hire college graduates as management trainees, making a college education increasingly important. However, motivated and capable employees without college degrees still may advance to administrative or supervisory positions in large establishments. As salespersons gain experience, they often move into positions with greater responsibility and may be given their choice of field in which to work. This opportunity often means moving to areas with higher potential earnings and commissions. The highest earnings potential usually lies in selling big items such as jewelry and other items although doing so often requires extensive knowledge of the product and an excellent talent for persuasion. The previous sales experience may be an asset as when one is applying for positions with larger retailers or in nonretail industries, such as financial services, wholesale trade or manufacturing.
5.3 Training needs of existing personnel staff Training and development continues throughout an employee’s career and is supported by an annual performance review that identifies possibilities for further progression and
associated training and development needs. Managers in stores or other internal trainers carry out most of our training. When the employees develop, the career develops. The yearly performance reviews for all employees are a common practice. Our training structure is based around non-mandatory training that is relevant to all human resource operations globally. In addition to the global induction training modules that every employee needs to complete, there are individual induction training modules for certain tasks tailored to the role, such as for store managers, floor managers and visual merchandisers. These training modules cover knowledge such as: what it means to be good retailers, staff development, garment presentation and controlling. Allied to these, there are a number of non-mandatory global training modules. It also offers training courses at every level that are tailored to each workers specific need. The training consists of different subjects:1. Garment handling and care. 2. The security. 3. Customer service. 4. The textiles. 5. The CSR (Corporate Social Responsibility). The three key methods of delivering training successfully which follow a set format like in group’s in-store and individual in-store training. The training consists of two parts and is integrated into daily morning meetings in store. These are: - customer service focused training and pre-campaign training. The customer service-focused training is provided during the 15-minute morning meeting for all employees in every store, six days a week throughout the month. Every other week the morning meetings also cover pre-campaign product information. In some stores we have already seen positive results. This initiative will continue and will also cover challenging customer situations.
5.3.1 Stores and warehouses In-store job rotation may mean that a person's duties vary from customer service, the cash desk and fitting rooms through to visual display and the follow-up of advertising. The employees also alternate between different tasks, for instance unloading, counting, labeling and loading garments.
5.3.2 Cross store When new stores are opened either in existing sales in new markets, the new employees are supported by more experienced co-workers. This can take the form of colleagues from established human resource procedures for supporting a new store for a period before, during and after opening.
Chapter-6 Market research
6.1 Market conditions
A successful new venture sells customers goods and services they want or need and continually grows a base of satisfied customers. Hundreds of people consider starting new businesses each year and each of them will ask themselves the same questions:Does my product or service fill a need? Who will buy my product or service? What will my price point be? What are the trends in my industry? Who are my competitors? Market research helps in the following factors:1. Communicate effectively The targeting can be done through advertising and promotions. By researching your customers and their spending and buying habits, it can create marketing campaigns to meet their specific interests and needs. 2. Identify and understand opportunities That exists in the marketplace. For example, through primary research, you might find an opportunity to start your business in a geographic location you had not considered before, where little or no competition exists for your product or service. 3. Pinpoint potential obstacles or problems Through research, it may uncover direct or indirect competitors that had not considered before who may inhibit ability to gain a competitive advantage in the market. It might also discover future development plans that could include big-box retailers in the target market location. 4. Benchmark and evaluate your success By knowing the size of your market, how the competitors are doing and who their customers are, it can set goals to reach the market, grow customer base and track the relation to the competition.
6.2 Existing demand of target market 1. Medium demand in the market where my shop is located. 2. The buyers are generally belong to low and middle income group levels. 3. Moderate availability of the branded stock in most of the shops. 4. The people who have high demand are girls, women and school going kids. 5. Mostly the daily wear clothes and household items are highly demanded.
6. The specialty stores have grown in popularity with the 13-to 25-year-old segment and department stores have declined in popularity with the same age group. 7. Minimum percent of consumer bought the majority of their casual wear at department stores and 21 percent of their dress wears in the area where my shop is located.
6.3 Competition It is located on a strip that includes a variety of businesses, but none of which create any competition. The other competitive edge we have developed is the atmosphere and reputation. Traffic is moderate to heavy, especially near the lunch and dinner hours. The closest competing urban wear store is at least 10 miles away, located in Rohini area. There are no other urban wear stores in the direct vicinity of my shop location. Our location of the shop is a very important competitive edge. We are there, right at the point of entering or exiting the market. The nearest competitor is at least 5 miles away. We will also offer more personal attention to our customers than the larger mall retail stores. Women's and Girls' Clothing:• • • •
Rs 22,500 hundred per month Rs 5,200 hundred every week Rs.750 hundred each day Rs.75,000 every hour
Men's and Boys' Clothing:• • • •
Rs.16,000 hundred per month Rs,3,750 hundred every week Rs,550 hundred each day Rs,53,150 every hour
The Consumer Spending Patterns Report states that the average amount spent on clothing per household in Rohini area is:-
I have specified the amount in U.S. dollars as basically in most of the areas it is calculated in dollars so that easy comparison can be done.
6.4 Strengths and weakness of the industry- barrier to entry 6.4.1 Strengths of my shop 1. Current location in the center has high traffic, in an area with several other shops targeting the same market which draws people to the area. 2. Our innovation is in our sales technique and point of sale displays. 3. Unique brands protected by sole supply agreements. 4. Successful relationship marketing. 5. Shop size is restrictive. 6. Our product is effective quality despite low level brands, high margin and low volume in comparison. 7. The stock is the same as our competitors. One can pick and choose what styles to stock. 8. Branded and local clothes are available in my shop. 9. Easy to attract people in the market.
6.4.2 Weaknesses of my shop 1. We only sell a few of brands of clothes.
2. Small store size and inability to find an expansion, resulting in stocking a limited product range. 3. Shop name is not well known. 4. Limited industry experience and industry knowledge. 5. Yet there are no contractual restrictions to us adding products to the store, store size is an issue. 6. There is not a lot of competitive advertising in the market where my shop is located and price is not so much of an issue to our customers.
6.4.3 Barriers and obstacles faced while entering in the market 1.The need of the huge capital to start up such as equipment, building, and raw materials and we have not invested much in the beginning. 2. The large and experienced retail owners can generally produce goods at lower costs than small and inexperienced retailers. 3. The government regulations may make entry more difficult or impossible. In the extreme case, a government may make competition illegal and establish a statutory monopoly. Requirements for licenses and permits may raise the investment needed to enter a market, creating an effective barrier to entry. 4. The sunk costs and lost money cannot be recovered if a retailer decides to leave a market. 5. The incumbent retailers can seek to make it difficult for new competitors and entrants by spending heavily on advertising that new retailers would find more difficult to afford. 6. If a single retail shop owner has control of a resource essential for a certain industry, then other retail shop owners are unable to compete in the market. 7. When a good or service has a value that depends on the number of existing customers, then competing players may have difficulties in entering a market where an established retail shop and a showroom has already captured a significant user base.
Chapter-7 Marketing plan
7.1 Distribution strategy The distribution involves a number of activities centered on a physical flow of goods and information. At one time the term distribution applied only to the outbound side of supply chain management, but it now includes both inbound and outbound.
Management of the inbound flow involves these elements:1. Material planning and control. 2. The purchasing. 3. The receiving. 4. Physical management of materials via warehousing and storage. 5. Materials handling or handling of the stock. Management of the outbound flow involves these elements:1. Order processing. 2. Warehousing and storage. 3. Finished goods management. 4. Material handling and packaging. 5. The shipping. 6. The transportation. Distribution channels are formed to solve three critical distribution problems: functional performance, reduced complexity and specialization. The distribution strategy defines how you are going to create and satisfy demand for your products. A distribution strategy defines how you are going to move products from point of creation to points of consumption, in a cost-effective manner. It must also define how to manage the brand. For my shop:The suppliers supply the stock to my shop every 15 days and sometimes also asked if there is an urgent requirement of clothes in my shop. No particular procedure for distribution is followed but the salespersons in my store communicate to the people who came to my shop and ask their requirements. Then, they start serve the customers by showing clothes to them.
7.2 Pricing strategy Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. In my shop, I have fixed the reasonable prices along with the discount and with free gifts, so that it attracts different customers in the market. Some of the shop products and their prices includes:o o o o o o o o o o
T-Shirts Men's, Long Sleeve, Small to 5XL: Rs.300.00 Men's, Short Sleeve, Small to 5XL: Rs.200.00 Women's, Long Sleeve, Small to 5XL: Rs.250.00 Women's, Short Sleeve, Small to 5XL: Rs.200.00 Denim Jackets Men's, Small to 5XL: Rs.700.00 Women's, Small to 5XL: Rs.600.00 Denim Pants Men's/Women's: Rs.700.00
7.3 Promotion strategy
Promotion is one of the four elements of marketing mix (product, price, promotion, distribution). It is the communication link between sellers and buyers for the purpose of influencing, informing or persuading a potential buyer's purchasing decision. However, there are three basic objectives of promotion. These are as follows:1. To present information to consumers as well as others. 2. To increase demand. 3. To differentiate a product. The questions arise in the promotion are:Where and when can you get across your marketing messages to your target market? 2. When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch or the timing of subsequent promotions? 3. How do your competitors do their promotions? And how does that influence your choice of promotional activity? 1.
For my shop:I have promoted my shop by giving advertisement in the newspapers not on daily basis but only once in a month to control over my expenses and displayed a banner outside my shop. My shop banner is designed as:-
“Trendzz” (Completing the family) All categories of clothes offeredJeans Kurtis Tops
Shirts
Contact -Esha Sharma, Shop no-12, D-12 block, SECTOR-7, ROHINI, NEW DELHI-110085
7.4 Products strategy
The product is the catalyst for the start of a business and the development of product strategy one of the most important decisions a marketer will make since product plays a crucial role in demand, competitiveness and success. The managers analyze the ramifications of the product strategy on other areas of marketing like price, distribution and promotion. The product strategy involves the various elements which a company has to take into account when developing a product, e.g. price, design, and availability. For my shop:In my shop there is no special set of the prices but my basic objective to set prices reasonable which can be easily purchased by everyone. Types of products available in my shop:The products available in shop are t-shirts, denim jackets, denim pants, sweat shirts, sweat suits, gym tops & bottoms, socks, jackets and many more items. Category of the pricing set in my shop:1. T-Shirts Men's, Long Sleeve: Rs.300.00 Men's, Short Sleeve: Rs.200.00 Women's, Long Sleeve: Rs.250.00 Women's, Short Sleeve: Rs.200.00
o o o o
2. Denim Jackets Men's, Small to 5XL: Rs.700.00 Women's, Small to 5XL: Rs.600.00
o o
4. Denim Pants Men's/Women's: Rs.700.00 4. Sweatshirts o o
5. Sweat suits
Men's/Women's, Long Sleeve, Small to 5XL: Rs.200.00 Men's/Women's, Short Sleeve, Small to 5XL: Rs.150.00
o
Men's/Women's, Small to 5XL: Rs.150.00
6. Workout Tops o
Women's, Small to 3XL: Rs.150.00
7. Workout Bottoms o
Women's, Small to 3XL: Rs.125.00
o
Women's, Fits Up to Shoe Size 15: Rs.100.00
o
Women's, Small to 3XL: Rs.150.00
8. Socks
9. Jackets
7.5 STP (Segmentation, Targeting and Positioning) 7.5.1 Segmentation Categorization of the customers:1. Teenage girls: - Aged between 11 to 19. Middle class & upper middle class people. 2. Women: - Aged 40 to 60. Middle class & upper class people. 3. Kids: - Aged 1 to 10. Middle class & upper class people. 4. Boys and gents: - Aged 1to 59. Middle class & upper middle class people. According to our information, there are approximately 150,000 males and 165,000 females in the area where my shop is located, totaling 315,000 people. Of those 315,000 people, 186,000 are between the ages of 18 and 54 years of age. Seventy-six percent of the 315, 000 people have a household income of more than Rs. 40,000. My shop basically targets market is men and women between the ages of 18 and 54 of middle class people, upper middle class people and low income class people.
7.5.2 Targeting
For my shop, I target the market and the customers by the following ways:1. Designing an attractive shop banner. 2. Offering minimum price of clothes to the customers. 3. Offering the coming customers in the shop the snacks and other refreshments. 4. Introducing a seating arrangement for aged people. 5. Offering other services like repairing of the clothes. 6. Introducing offers of exchange of the clothes. 7. Providing discount offers on jeans and shirts.
Chapter-8 Financial decisions
8.1Financial statements and cash flows
Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. It describes about the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved. Basically, the financial plan section of the business plan consists of three financial statements, the income statement, the cash flow projection and the balance sheet and a brief explanation/analysis of these three statements. The list of operating expenses may include:1. Salaries (staff salaries). 2. The telecommunications. 3. The utilities. 4. The inventory. 5. The storage of the inventory. 6. The promotion of the shop and stock. 7. Office supplies. 8. The maintenance. The expenses which I incurred before opening of the shop are:1. Initial investment a) b) c) d) e)
Machines & equipments= 10,000 Furniture= 10,000 Storage cabinets & stools= 20,000 Hangers and stands= 2,000 Stationary materials= 1,000
2. Salary & incentives a) Cost of stitching, patchwork & final touch= 700 b) Discount on final product= 10% Salary of the employees:-
1. Full-time workers= 2,000 per month 2. Part-time workers=1,000 per month For extra working hours:1. For 2 hours overtime a day= Rs.150 for full-time workers 2. For 2 hours overtime a day= Rs.100 for part-time workers Estimated income earned on monthly basis:1. Monthly sales per month
Jan 0.22
2. Average sales per unit 3. Income per month
Feb 0.23
20
26
26,000
28,000
Mar
Apr
0.22
0.21
22
May 0.22
25
22,000
23
29,000
27,000
8.1.1Cash flow statement The amount of the cash inflow and cash outflows is estimated on the basis of the product sales, the inventory sold to the customers and the availability of the inventory in the shop.
Basis
Jan
Feb
Mar
Apr
2,640
5,280
7,260
May
Cash inflows Collection of A/R
OtherIncome/Sales
8,000
8,000
6,000
8,000
Total Cash Inflow
8,000
10,640
11,280
15,260
8,000
6,000
7,260
8,000 15,260
Cash outflows Accts. Payable
8,000
8,000
8,000
Accts. Payable Operating Expenses
5,319
5,119
4,919
4,619
Taxes
10,000
8,000
9,000
11,000 12,000
Other Expenses
-
-
-
4,619
-
-
Total Cash Outflow
13,508
13,208
11,208
13,208 13,708
Cash Position
7,396
8,248
11,100
1 1,952
14,964
10,752
13,764
Ending Cash
6,196
7,048
9,900
1.3.8 Profit and Loss analysis I have assumes the profits and losses which will be incurred by me in the running course of business. I have estimated the profits and losses for 3 years. Baisis Sales Direct Cost of Sales
Year 1 Year 2 Year 3 Rs.513,503 Rs.599,403 Rs.609,402 Rs.204,820 Rs.237,520 Rs.239,896
Total Cost of Sales
Rs.204,820 Rs.237,520 Rs.239,896
Gross Margin
Rs.308,683 Rs.361,883 Rs.369,507
Expenses Advertising Depreciation Start-up costs
Rs.4,800 Rs.4,889 Rs.5,500
Rs.4,800 Rs.4,889 Rs.5,500
Rs.4,800 Rs.4,889 Rs.5,500
Education & training Workman's compensation Insurance - property
Rs.1,200 Rs.3,372 Rs.6,204
Rs.1,500 Rs.3,500 Rs.6,200
Rs.2,000 RS.3,600 Rs.6,300
License & permits Maintenance - shop Marketing Miscellaneous
Rs.110 Rs.2,400 Rs.9,600 Rs.3,600
Rs.2,400 Rs.2,400 Rs.10,000 Rs.10,000 Rs.3,600 Rs.3,600
Postage & Delivery
Rs.600
Rs.600
Rs.600
Prof fees - accounting Prof fees - legal
Rs.1,500 Rs.1,000
Rs.1,500 Rs.500
Rs.1,500 Rs.500
Repairs
Rs.600
Rs.600
Rs.600
Supplies - shop
Rs.4,200
Rs.4,200
Rs.4,200
Telephone Utilities
Rs.1,440 Rs.2,100
Rs.1,440 Rs.2,100
Rs.1,440 Rs.2,100
Employee benefits Other
Rs.9,000 Rs.2,400
Rs.9,100 Rs.2,400
Rs.9,100 Rs.2,400
Total operating expenses
Rs.248,876 Rs.251,490 Rs.268,065
Profit Before Interest and Rs.59,806 Rs.110,393 Rs.101,442 Taxes EBITDA Interest Expense Taxes Incurred
Rs.64,696 Rs.115,282 Rs.106,331 Rs.6,753 Rs.5,963 Rs.5,138 Rs.15,916 Rs.31,329 Rs.28,891
Net Profit Net Profit/Sales
Rs.37,137 Rs.73,101 Rs.67,412 7.23% 12.20% 11.06%
8.2 Identification of key assumptions For shop:1. Growth drives to the market. 2. Future growth forecasts. 3. Competitors identified for the target market. 4. Competitive advantages in different markets. 5. Barriers to entry to those segments targeted. For market:-
1. Products offered to the customers. 2. Pricing relative to the competition. 3. Promotion techniques. 4. Distribution of the products. 5. Growth in the market and market share.
For operations:1. The workers and requirement of the skills. 2. Forecasting income, profits and losses. 3. Salary of the workers. 4. Requirement of the assets. 5. Other operations.
8.3 Current source of funding Unless a potential small retail business owner is independently wealthy and looking for a hobby, he or she will need to find financing for the new business. Financing a small retail business can take make forms and may include a variety of funding sources to cover the initial costs of opening and operating the business. Banks and government lending institutions such as the Small Business Administration (SBA) typically require a personal investment by the business owner showing a willingness to share the burden of risk with the lender. Even franchises that offer in-house financing for new franchise operators require a percentage of the initial investment to come from the business owner. The savings and personal lines of credit from previous employers often are tapped to cover the personal investment. For my shop:For my shop, no appropriate source of funding followed but the capital is invested from my side only.
If there is needed for funds in future then loan can be apply by me through the banks. The loan is not applied in the beginning of the business as the field of the business is new to me and somewhat to the workers. If there are losses incurred ispite of the profits then we can’t able to pay back the amount of lended loan to the bank. I have also taken loan from my father as the capital to invest in the business.
8.4 Future needs of funding Most people cannot afford to open a new business on their own. With a little research it will find a number of places or individuals that are willing to put money into new businesses. Trying to stay away from high interest loan situations and look for grants and smaller donations that will be straight forward to pay back. It may have family that is interested in helping out. For my shop if future needs are required then the following strategies if followed:1. Loans from the banks. 2. Borrrowing funds from other small scale businesses. 3. If funding is not possible, then inventory of the shop may be decrease to cut costs. 4. Asking for mutual schemes. 5. Asking through bank the best source of funding.
8.5 Tax consequences of the business When the business case refers to a non taxpaying government or non-profit organization, the question of tax effects on the business case is non-issue. For tax-paying companies, however, it is an important question. The results of "before tax" and "after tax" business cases can look quite different. Here are some ways that taxes can impact the business:1. Taxes lower overall gains Where the business case shows gains or net cash inflows, taxes operate to lower overall gains because operating income and capital gains are normally taxed. 2. Taxes also reduce overall cost and expense impacts
Where the business case shows losses or net cash outflows, tax effects operate to reduce the overall loss. 3. When the business case includes capital assets, tax savings from depreciation improve the bottom line Where the business includes the acquisition of capital assets, tax savings from depreciation can operate to increase overall cash flow. Depreciation expenses themselves do not contribute to cash flow, they are an accounting convention that impacts reported income, but not a real cash outflow. However, the depreciation expenses lower reported income, they also lower the tax liability, which does impact real cash flow.
8.6 Potential risk and source of protection The process of identification, analysis and either acceptance or mitigation of uncertainty in investment decision-making. Essentially, risk the occurs anytime an investor or fund manager analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given their investment objectives and risk tolerance. Inadequate risk management can result in severe consequences for companies as well as individuals.
The potential risks involved in my business of the shop:1. Not having sales. 2. Loss of the capital employed in the business. 3. Not earning profits. 4. Demand of the workers regarding salary and wages. 5. Inability to create demand for the products in the market. 6. Damage due to fire, theft and loss. 7. Does not able to create image of the shop in the market. 8. Debts like loss of stock and damage of the stock. Source of protection for my business:1. Reduce the cost in salespersons and secure guards;
2. Improve the shopping atmosphere and avoid watching customers directly by workers and let the salespersons pay more attention to introduce the commodities and increase their shopping desire. That can create a better psychological circumstance to increase your profit 3. Installing a camera in the shop for observing the movement of the employees. 4. Borrowing funds from the banks.
Risk in business The following are the risks involved are as follows:1. If the inventory in the store will create effective demand in the market. 2. If the people in the market will come to the shop or not. 3. If the business will earn the profits which is the main target or not. 4. Fear of incurring loss despite of gains. 5. If the business will run smoothly. 6. If the workers will work with their full efforts and contribute to the profits. 7. If the inventory of the shop is liked by the people. 8. As the owner of the clothing retail store, it will encounter different sorts of customers, employees and vendors & cannot complain and say that not your job because by the time you open that door, all of it will be yours.
9. If the way of advertising will catch attention of the people. 10. Do the people encourage the categories of clothes offered to them?
Implementation schedule The schedule of the main activities supporting this marketing plan is presented in the table. This includes the promotion schedule and evaluation and control activities. An evaluation of the ongoing business will be conducted on a quarterly basis as well as a more detailed evaluation at the end of the year. A risk assessment will be conducted as part of the performance reviews of the business. Activities
1 month
2 Month
3 month
4 month
5 month
Develop a garment business
Yes in the month of Jan
-
-
-
Develop floor plan and retail store
Yes in the month of Jan
-
-
-
Hire key staff for the business
3 (full-time) 2 ( parttime)
-
-
-
Liaise with the local
-
-
-
-
-
government Local press advertisement and press releases
Yes through fliers in newspapers on monthly basis
-
-
-
-
Website development
-
-
-
-
-
-
-
-
-
Launch of retail store
Yes
Salary of full-time workers
2,000
2,000
2,000
2,000
2,000
1,000
1,000
1,000
1,000
medium
medium
medium
Salary of pat-time workers
-
Quality assessment of products
Medium and medium low
Appendices I have conducted a small survey in only few shops which are located in the market itself. The survey is done through personal interview method. I have surveyed the shops in the market where the store is located. The questions which are asked in the interview are:Q1. What is the name of the shop? Q2. Who is the owner of the shop? Q3. How many employees/salespersons are engaged in the shop? Q4. What is the pay scale of the salespersons? Q5. What type of inventory is available in the shop? Q6. Do they have part-time employees also? Q7.What is the timings for the opening and closing of the shop in the day? Q8.What is the daily expenses of the shop?
Q9.Is relationship selling is followed or not? Q10.What type of people does the shop target?
Bibliography Books 1. Marketing book by Lovelock’s. 2. Kotler Philip, Marketing Management. 3. Planning Implementations & Control, Edition-1998. 4. Prentice Hall of India Ltd. New Delhi. 5. Human resource management by C.B.Gupta.
Magazines Journals & Newspaper 1. Business today. 2. The Times of India. 3. The Hindustan times.
Websites 1. WWW.google.com. 2. WWW.yahoo.com.s 3. WWW.rediff.com.
