fashion wear business plan

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Business Plan

OWNERS The fashion dignified..

Krishanu BoseNitin VermaSharique SiddiqueHijab175,100 feet road, IndiranagarBangalore-560036Telephone 09342720786E-Mail [email protected]

I. Table Of Contents

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I. Table of Content……………………………………………….02

II. Executive Summary…………………………………................03

III. General Company Description………………………...............05

IV. Products and Services…………………………………………07

V. Marketing Plan………………………………………..............09

VI. Operational Plan………………………………………………14

VII. Management and Organisation………………………..............17

VIII. Personal Financial Statement…………………………………18

IX. Startup Expenses and Capitalization………………………….19

X. Financial Plan…………………………………………………20

XI. Appendices……………………………………………………21

XII. Refining the Plan……………………………………………...22

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I. Executive Summary

Our product will quench the fashion thirst of the muslim world as well as bolster their religious

faith. The prime target will be the affluent muslim women and slowly we will target for men’s

and kid’s wear.

Krishanu Bose, Nitin Verma and Sharique Siddique are the founders of “Hijab, The fashion

dignified”stores.

“Muslim women are like any women around the world: they love fashion and love shopping,”

Muslim fashion industry would be worth $96 billion if half of the world’s 1.6 billion Muslims

spend just $120 a year on clothing, according to French Fashion University Esmod in Dubai.

“High-end designers such as Hermes and Gucci are also trying to break into the Muslim market

with scarves and other products,” said Tamara Hostal, director of Esmod Dubai.

“As Muslim women have become more affluent in the last decade or two, Islamic fashion has

evolved into a lucrative industry.” Asianews, May 22-28, 2009. A University of Calicut survey

suggests that across Kerala’s northern (Muslim-dominated) region, pardah increased from 3.5%

in 1990 to 32.5% by 2000 (cited in Basheer 2003). We observed in 2002–4 around Calicut city a

far higher percentage: perhaps around 50%, with 90% usage in the old Muslim area of the city,

Thekkepuram. Hoorulyn and Lamia. According to De Jong, who undertook interviews with

managing directors of both companies, Hoorulyn has increased its sales since its inception in

1992 from 100 dresses to 10,000 by 2005. The market is still in its nascent stage and there is

a great potential to exploit.

To start a store at an area like Indranagar in Bangalore we will need at least Rs.25 lacs to pump

in for the first year. For that we will invest 15 lacs on our own and for rest seek a loan from the

‘Young entrepreneur loan scheme’ by the govt. Rs. 6 lacs is the minimum annual expected rent,

Rs. 4 lacs for the store setup and outdoor advertising, Rs. 10 lac for inventory and the rest of the

amount (Rs. 5 lacs) will be used as the working capital. Thereby, investing in the muslim fashion

segment and being the pioneer in Bangaluru we ensure a positive surge for too awaited fashion

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alternative for the muslim world. By providing designer wear through a push promotional

strategy and reasonable prices we can have higher turnovers and returns, hence a positive flow to

payback the debt at its earliest.

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II. General Company Description

Vision: A fashion-wear for the muslim world that abides by its ethics.

Mission Statement: Keep the customer keen by innovating the product within the set Islamic

parameters

Company Goals: To be the authentic and trusted Islamic fashion wear brand as per the

Islamic values.

Objectives: To achieve a profit of at-least 25%-35%. To open at-least one store per year in all

the regions where muslims are in majority and fulfilling their needs.

Business Philosophy: To keep the basic values and ethos intact while keeping the customers

guessing what will they get next within those set parameters.

Target Group: The prime target is the affluent class and when strengthened it will be

marketed for men as well as kids.

Future Prospects: It’s a highly growing industry as there is a significant muslim population

which is untapped, yet to be exploited. Its demographics are shifting towards the service class

which is educated and aware of the world fashion stage. These changes will lead to a craving for

fashion and our brand will be there to hit the right chord at the right time.

Personnel Strength: Being the first of its kind the advantage of early bird catching the worm

will be one of the strengths of our company. Promotion through religious channels, word of

mouth publicity through mosques and the desire of the Indian customers to look different at each

event/festival will be the opportunities. Sharique one of the founders being a muslim know the

needs of the target customers and as he has manufactured readymade women’s wear, He knows

the cost technicalities and market terms with the wholesalers and retailers.

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Nitin Verma has done post graduation in journalism, and has a management degree from NIFT,

therefore can handle the marketing section.

Krishanu Bose, a textile engineer can head the sourcing and quality control department

diligently.

Legal form of ownership: Partnership as it is helpful in pooling of funds, experience and

skills.

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III. Products and Services

These are the few examples of the products we will deal in.

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Competitive advantages:

1. Being first of its kind.

2. Differentiated new product.

3. New market segmentation.

4. Emotional and religious attachment of the customer.

5. Can start with lesser investment as the target market is niche.

Competitive disadvantages:

1. Islamic fashion is still not defined comprehensively.

2. Products have to be adapted to Indian taste from that of the east.

3. Competitors may learn from our mistakes and can enter the market later with improved

marketing mix.

As far as pricing is concerned it will be slightly higher as it will be a designer brand but it

will be reasonable for the quality it will provide.

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IV. Marketing Plan

Market research - Why?No matter how good your product and your service, the venture cannot succeed without effective

marketing. And this begins with careful, systematic research. It is very dangerous to assume that

you already know about your intended market. So we need to do market research to make sure

we’re on track. We will use the business planning process as our opportunity to uncover data and

to question our marketing efforts.

Market research - How?There are two kinds of market research: primary and secondary.

We are doing secondary research using published information such as industry profiles, trade

journals, newspapers, magazines, census data, and demographic profiles. Information is also

available in public libraries, industry associations, chambers of commerce, from vendors who

sell to our industry, and from government agencies.

We started with our college library. There are more online sources than we could possibly use.

Our chamber of commerce has good information on the local area. Trade associations and trade

publications often have excellent industry-specific data.

For primary research we are doing our own traffic count at a proposed location, using the yellow

pages to identify competitors, and doing surveys or focus-group interviews to learn about

consumer preferences. Professional market research can be very costly, so we are doing a

research on our own.

EconomicsFacts about your industry:

There are 874,600 muslims in Banglore alone. census of india report 2001.

We want to capture the 60% percent affluent class only.

Currently these people are importing from Dubai other gulf countries.

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Hoorulyn an existing brand in kerala has increased its sales since its inception in 1992

from 100 dresses to 10,000 by 2005.

A University of Calicut survey suggests that across Kerala’s northern (Muslim-

dominated) region, pardah increased from 3.5% in 1990 to 32.5% by 2000 (cited in

Basheer 2003).

Barriers to entry we can face

o High capital costs

o High production costs

o High marketing costs

o Consumer acceptance and brand recognition

Customers Age 15-45 yrs

Gender Female

Location Banglore

Income level above 3 lacs p.a.

Social class and occupation Elite class (working and non-working)

Education Majority educated

Other Modest and elegant woman

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CompetitionThere is no such competition in Bangalore accept for the unorganized industry and two brands of

Kerala: Hoorulyn and Lamia.

In the final column, estimate the importance of each competitive factor to the customer. 1 =

critical; 5 = not very important.

Table 1: Competitive Analysis

Factor Me Strength Weakness Competitor A Competitor BImportance to Customer

ProductsDresses and accessories

* Dresses Scarves and hijabs only

1

Price400-2500 * 4000-6000 1500-2500 3

QualityGood * Imported fabric Good 2

SelectionExcellent * No Indian adaptation Average 3

ServiceLoyalty card

schemes* No such schemes Good PR 4

ReliabilityNew brand * Well recognized Well recognized 4

StabilityNew brand * Well recognized Well recognized 4

ExpertiseOwn designer * Imports ready made Local tailors 3

Company Reputation

New brand * Well recognized Well recognized 4

LocationBangalore * Kerala Kerala 3

Sales MethodOnline and brick n

mortar* Brick n Mortar Brick n Mortar 3

AdvertisingNew channels like

mosques* Old methods Old methods 3

ImageNew brand * Well known Well known 2

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Strategy

Promotion

We will use religious channels for tv advertisements. For print media we can distribute brochures

in the mosques on Fridays and can subscribe in Islamic Magazines as well as other lifestyle

magazines as this a fashion brand catering to muslims.

We can use the gen next media viz Facebook and Tweeter for a wider impact.

We want to position our brand’s image as elegant, sophisticated, sincere and up to date women.

In addition to advertising, we have plans for graphic image support. This includes things like

logo design, cards and letterhead, brochures, signage, and interior design (if customers come to

your place of business).

We will have a system to identify repeat customers and then systematically contact them.

Promotional Budget

3 to 4 lacs

Before startup: Rs. 2 lacs

Ongoing: Rs. 1-2 lacs

Pricing

For most small businesses, having the lowest price is not a good policy. It may rob us of needed

profit margin; customers may not care as much about price as one thinks; and large competitors

can under price us anyway. We will do better to have average prices and compete on quality and

service.

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Our pricing strategy fits with what was revealed in our competitive analysis. Our prices are lower

but not too much.

Price is not so important for the high class but the quality and service. Some of the customers can

go for price but the quality we provide and the average price will win them. We will provide

loyality cards and schemes.

Proposed Location

Indranagar or Fraser town.

It is a very popular and high end market place. The traffic and walk-ins will be high. It is

convenient with ample parking space, Interior spaces, and not out of the way. Fraser town is

consistent with our image. It is what customers want and expect.

Distribution Channels

Retail

Direct (mail order, Web, catalog)

Sales Forecast1) The "best guess", which is what we really expect Rs. 50,000 a month

2) The "worst case" low estimate that we are confident we can reach no matter what happens. Rs.

20,000 a month.

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V. Operational Plan

Explain the daily operation of the business, its location, equipment, people, processes, and

surrounding environment.

ProductionOur products are produced in Delhi due to the cheap labour and related industry.

Our methods of Promotion

Production techniques and costs Assembly line and over head cost mehod

Quality control ISO certification

Customer service Close relations with customers

Inventory control RFID and software protection

Product development Delhi based design team

LocationPhysical requirements:

Amount of space 1000 sq. ft.

Type of building Retail mall space

Zoning High traffic zone

Power and other utilities Consistent and regular

Access:

Our location is convenient to transportation in Bangalore and to suppliers in Delhi.

We need easy walk-in access.

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There is enough space for parking and proximity to freeway, airports, railroads, and

shipping centers.

Our business hours will be 10 am to 10 pm.

Construction: Most new companies should not sink capital into construction.

Legal Environment Describe the following:

Licensing and bonding requirements – for expansion through franchising

Health, workplace, or environmental regulations – ISO certifications

Special regulations covering your industry or profession – ISO

Insurance coverage – TATA AIG

Trademarks, copyrights, or patents (pending)

Personnel Number of employees – 14

Type of labor (skilled, unskilled, and professional)

For professional we three and Merlyn Andrews from NIFT as Design Head

For skilled sales force Bangalore placement firms.

For unskilled outskirts of Delhi.

Training methods will be there.

Sharique Siddique at production and distribution.

Nitin Verma at marketing and retail.

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Krishanu Bose at fabric procurement and quality control.

We have schedules and written procedures prepared.

We have drafted job descriptions for employees.

For certain functions, we can use contract workers in addition to employees.

Inventory We will keep inventory in the form of raw materials, supplies and finished goods.

Average value in stock will be around 8 lacs.

Rate of turnover we expect to be around 3.

Seasonal buildups as Eid-ul-Fitr and Eid-ul-Azha

Lead-time for ordering will be 45 days to 60 days.

SuppliersWe can get enough suppliers for fabric and trims in markets like Nehru Place and Gandhinagar

in Delhi.

We have more than one supplier for critical items as trims like zips, buttons etc.

Managing Our Accounts Payable

This helps you plan whom to pay and when. Paying too early depletes our cash, but paying late

can cost us valuable discounts and can damage our credit.

A payables aging looks like the following table.

Total Current 30 Days 60 Days 90 Days Over 90 Days

Accounts Payable Aging

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VI. Management and Organization

Nitin Verma will look after a day to day advertising and marketing with his experience in

journalism he can handle it better.

Sharique Siddique will head the production and accounts department as he has a commerce

background with a five year experience in readymade women’s wear manufacturing.

Krishanu Bose has a textile degree, he can procure the fabric and trims at his best and keeping

the quality intact.

Merlyn Andrews brought up in Saudi Arabia and did her designing in Dubai is familiar with the

needs and tastes of muslims to blend it with the international fashion.

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VII. Personal Financial Statement

Personal financial statements of the owners with total assets and liabilities will be provided to the

banker at the time of loan form filling and legal formalities.

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VIII.Startup Expenses and Capitalization

We will have many startup expenses before we even begin operating our business. We will

estimate these expenses accurately and then plan where we will get sufficient capital. This is a

research project, and the more thorough our research efforts, the less chance that we will leave

out important expenses or underestimate them.

There are two ways we will use to make allowances for surprise expenses. The first is to add a

little “padding” to each item in the budget. The problem with that approach, however, is that it

will destroy the accuracy of our carefully wrought plan. The second approach is to add a separate

line item, called contingencies, to account for the unforeseeable.

We will talk to others who have started similar businesses to get a good idea of how much to

allow for contingencies. If we cannot get good information, we will go by a rule of thumb that

contingencies should equal at least 20 percent of the total of all other start-up expenses.

All three partners will bring 5 lacs each and profits will be divided in the capital ratio. Rest 10

lacs will be raised as debt. Profits will be distributed after all indirect expenses , interests and

taxes.

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IX. Financial Plan

12-Month Profit and Loss ProjectionSales will be higher in the months of Ramdan and before both the EIDs and a higher profit

margin is expected with sales hopefully reaching to Rs. 1 lac in these months. But at time of

Muharram month weddings will not happen and muslims will rarely buy dresses so the sales will

be low and reductions and discounts will increase.

Four-Year Profit Projection (Optional)We expect to open one outlet per year by plugging back the profits and raising further debt along

with equity. So for the next four years we want at least three more stores working.

Projected Cash FlowWe have a cash sales and another with credit cards. But the funds tends to flow immediately and

for suppliers we can purchase on credit terms of 45 to 60 days.

Monthly expenses will be like rent, electricity, salaries etc. Other expenses will vary with our

production levels.

We will track essential operating data, which is not necessarily part of cash flow but allows us to

track items that have a heavy impact on cash flow, such as sales and inventory purchases.

We buy fabrics and trims six months in advance so we need 40% money to book the order in

advance and 60% after 45-60 days of receiving the material.

Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss

statements but definitely do take cash out. We have a provision for these

And of course, depreciation does not appear in the cash flow at all because we never write a

check for it.

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X. Appendices

These documents will be included when it will go to the banker for loan sanctioning.

Brochures and advertising materials

Industry studies

Blueprints and plans

Maps and photos of location

Magazine or other articles

Detailed lists of equipment owned or to be purchased

Copies of leases and contracts

Letters of support from future customers

Any other materials needed to support the assumptions in this plan

Market research studies

List of assets available as collateral for a loan

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XI. Refining the Plan

The generic business plan presented above can be modified to suit our type of business and the audience for which the plan is written.

For Type of BusinessManufacturing

Planned production levels can be set up

Anticipated levels of direct production costs and indirect (overhead) costs— compare to

industry averages.

Prices per product line

Gross profit margin, overall and for each product line

Production/capacity limits of planned physical plant

Production/capacity limits of equipment

Purchasing and inventory management procedures

New products under development or anticipated to come online after startup

Retail Business

Company image

Pricing:

o Explain markup policies.

o Prices should be profitable, competitive, and in accordance with company image.

Inventory:

o Selection and price should be consistent with company image.

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o Inventory level: Find industry average numbers for annual inventory turnover rate

(available in RMA book). Multiply your initial inventory investment by the

average turnover rate. The result should be at least equal to your projected first

year's cost of goods sold. If it is not, you may not have enough budgeted for

startup inventory.

Customer service policies: These should be competitive and in accord with company

image.

Location: Does it give the exposure that you need? Is it convenient for customers? Is it

consistent with company image?

Promotion: Methods used, cost. Does it project a consistent company image?

Credit: Do you extend credit to customers? If yes, do you really need to, and do you

factor the cost into prices?

fashion wear business plan

Documents

calicut survey

company image

islamic fashion

muslim women

muslim world

krishanu bose

fraser town

nitin verma