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Online Clothing Business Startup Plan

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Executive Summary

The website is an –commerce start-up that will position itself as a leader in the market. It will offer designers and customers a platform where they can meet. The company will provide a business-to-business solution to designers of clothes. One strength that the company enjoys is that it will not be maintaining any inventory. The company has partnered with designers to connect them directly with customers through the website. 

Description of Business 

The business idea is to start an Indian-American fashion website that will be based in India. The company will be displaying clothes from different designers. The designers will be allocated a place on the website where their design and information will be located. Therefore, it will be an e-commerce enterprise that will not sell the products directly to the market but through the designers. The attires will be only for children and teenagers.

The idea on the Indian-American Fashion Website was developed after the founder researched the market and found the gap. The niche was identified as the primary source of concern for customers and designers who said they do not have enough platform to engage directly. Consequentially, the plan came up, and it is to help the researcher establish a forum for designer-consumer participation.

Indian- American Fashion Website

Business Position

The business will be based in New Delhi, India. It will be serving the online fashion industry, where the clients will get the products directly from designers.

Keys to Success 

  • Accessible website that customers are entertained to visit. It will mirror a visit to the store where customers can find everything they want.
  • Establish an advertising campaign that is strong in an unconventional media vehicle
  • Excellent relationship with designers that will facilitate the quality of clothing and fast order shipment.
  • Recruitment of excellent staff.
  • Development of a customer service and customer satisfaction platform that will be the business’ engine that will provide seamless management of their business activities. 
  • Forming strategic relations with designers hence allow the business to grow their customer base quickly. 

Management Team

The website will be under a principal responsible for the idea and ensuring the progress of the business up. The founder recognizes that with the growth of the website, certain positions will be filled. The founder spent years researching for a gap in the market and identified the gap. He has an incredible skill of business need perceptions and a solution to address the need. 

Sales and Marketing

There will be marketing strategies that will use integrated media tools (social and traditional media). There will be a promotion that will be done through discounts and free offers on the quantity and frequency of buying products using the website. There will make an advertisement that will be done using social media like Twitter, Facebook, the website, and Pinterest. Public relation branding will be done through the use of Weibo and webchat, Facebook and Twitter.

Business Objectives

  • Minimize the cost of production and maximize the profits
  • Establish and have a significant market share
  • Satisfy the needs of the customers
  • Have a rapid growth and development

Business Vision

Serve the market through sustainability methods that acknowledge the ethics and values of society and the company.

Company Summary

The website will offer clothing for children and teenagers from different designers that will be displayed on the Indian-American Fashion Website. The website’s proprietor will establish a cost-effective operation that will eliminate the cost of inventory by acting as a platform between designers and customers. The Indian-American Fashion Website will collect the payments online and take a percentage of them after the order has been processed and send to the customer. The company will be responsible for the marketing of its services.

Start-Up Summary

The start-up costs for the Indian-American Fashion Website are mostly made of design funds and marketing. The Indian-American Fashion Website has acquired $250,000 in investments and gotten a short-term loan of $200,000. 

START-UP FUNDING  
Start-up Expenses $57,500
Start-up Assets $402,500
TOTAL FUNDING NEEDED $460,000
Assets
Non-cash assets that the business has from start-up $0
Cash needed from start up $402,500
Additional cash acquired $0
Cash balance at start $402,500
TOTAL ASSETS $402,500
Liabilities and Capital
Current Borrowing $0
Long-term liabilities $190,000
Outstanding Bills $0
Others $0
TOTAL LIABILITIES $190,000
Capital
Investment
Investors $260,000
Other $0
Additional investment $0
TOTAL PLANNED INVESTMENT $260,000
Start-up Expenses ($57,500)
TOTAL CAPITAL $202,500
TOTAL LIABILITIES AND CAPITAL $401,500
Total  Indian-American Fashion Website funding $460,000

Indian-American Fashion Website Start-Up

Requirements
Expenses
Legal $1,000
Stationery $400
Brochures $0
Consultants $5,100
Insurance expenses $0
Rent expenses $1,800
 Office Equipment $10,200
Computer Equipment $29,500
Website Expenses $10,500
Other $0
TOTAL START-UP EXPENSES $58,500
Start-up Assets
Cash $401,500
Inventory $0
Current Assets $0
Long-term Assets $0
TOTAL ASSETS $401,500
Total Requirements $460,000

Ownership

The proprietor will own the Indian-American Fashion Website.

Products

The Indian-American Fashion Website will be selling children and teenager clothes online. The company will partner with designers to offer clothes through the website. The Indian-American Fashion Website will offer all kinds of apparel ranging from shorts, shirts, hats and sweaters, and jackets for teenagers and children.

Market Analysis Summary

For a long time, the children and teen clothing industry have turned into a billion-dollar niche market in the clothing industry. The internet in the recent past has grown in popularity, and several clothes designers have launched different online stores. However, no company currently sells its products on the internet exclusively. Although various reasons can be offered, online retailing is new and yet to be thoroughly tested in India. The business will bank on the fact that customers will be able to purchase something their children and teenagers can wear that can only be seen online. The Indian-American Fashion Website hopes that the customers will be interested since the idea is fun and the available products are offered by different designers. The key to reaching this target market is to market the product through unconventional means. The purpose of the advertisement for the website is to get rid of the middle man in budgeting for clothing. 

Market Segmentation

The Indian-American Fashion Website will primarily focus on two distinct groups. 

Children: this group will primarily be targeted through their parents. Children’s clothing is bought less compared to teenage clothing. The idea is to incorporate inexpensive selections for every clothing group. The small initial purchase of children’s clothing is expected to grow larger as time goes by. 

Teenagers: this group will make the core customers for the Indian-American Fashion Website. Most teenagers have social media accounts where the website will be primarily marketed. They will be simpler to pull into the website. Once this group has been attracted to the website, the key will be ensuring the quality, savings, and attractiveness of the clothing. Additionally, it will be essential to ensure that the dress offered on the website fits what the consumer wants. It will be fundamental that the return policy for any item purchased through the website is made speedy and hassle-free. 

Market Analysis
    Year 1 2 3 4 5  
Potential Customers Growth           CAGR
Children 20% 4 million 5.2 million 8.64 million 10.368 million 12.44 million 20.00%
Teenagers 15% 6 million 5.75 million 6.6 million 7.6 million 8.75 million 15.00%
Other 0% 0 0 0 0 0 0.00%

 Strategy and Implementation

The Indian-American Fashion Website will pursue success and win a market share in the online platform of the clothing industry through aggressively seeking visibility with the target audience. 

Competitive Edge

The competitive edge of the Indian-American Fashion Website is how it focuses on the process instead of the product. The website will be established as an endpoint of the marketing program to drive the customer into the Indian-American Fashion Website. Although the management is confident in the attractiveness of the clothing, the most critical component of the business is driving traffic towards the website. The founder has experience with the management of websites, which will be pivotal to the success of the current industry. The experience he has gathered before is invaluable in ensuring that customers are satisfied with their shopping experience online. The management will incorporate a new measurement tool that will be fun to use and minimize the confusion of the visitors about the right fit for the clothes. This will be a way of improving customer satisfaction and minimizing returns. There will be an employee tasked with the choice of clothing to be featured on the website. The Indian-American Fashion Website agreement with clothing designers offers a competitive advantage. The website design team will closely liaise with designers to facilitate the products to be featured on the website. Inventory will be tasked with design companies. This will be a sure way of minimizing production costs and capping the overhead for the business. 

Pricing Strategy

The pricing strategy on the website will primarily focus on passing on the store mark-up to customers in the form of reduced pricing. This strategy will not come with any disadvantages for the company’s sales profits. It will also be a way of absorbing the business’ initial costs where the company will offer discounts in the first months of operation.

Sales Strategy

The focus of the advertisements run through social networks is to tell consumers to keep the money used to pay the middleman and use it to expand their wardrobe. The website will have an attractive logo that will be primarily displayed in different advertisements. The estimate is that the company will take a year for the website to start showing a profit. In conjunction with the designers featured, the website will offer discounts during different times of the year. Values aim to increase the initial awareness of the website and even out seasonality. 

Sales Forecast

The Indian-American Fashion Website sales forecast is expected to rise steadily during the first year. It will start slow as the website is launched and it will pick up as the customer base steadily increases. The Indian-American Fashion Website will see an increase in sales of 38% between its initial year of launch and the second one. The management maintains that this stead goal can be accomplished and the sales maintained at this amount.

Sales Monthly

Sales Forecast
  Year 1 Year 2 Year 3
Sales
Clothing $ 2.17 million $ 3 million $4.3 million
Other $0 $0 $0
TOTAL SALES $2/17 million $3 million $4.3 million
Direct Cost of Sales Year 1 Year 2 Year 3
Clothing $1.25 million $1.8 million $ 2.58 million
Other $0 $0 $0
Subtotal $1.25 million $1.8 million $ 2.58 million

Management Summary

The management of the team will be overseen by the proprietor.

Besides the proprietor, there will be an additional five personnel who will be employed in the Indian-American Fashion Website.

  • Web administrator
  • Office manager
  • Marketing team of two members
  • Accountant
Personnel Plan
Year 1 Year 2 Year 3
Director $85,000 $91,000 $96,000
Web Administrator $49,000 $154,000 $165,000
Marketing Personnel $95,000 $102,000 $114,000
Office Manager $35,000 $40,000 $44,000
Accountant $39,000 $45,000 $48,000
Other $0 $0 $0
TOTAL PERSONNEL 6 6 6

Financial Plan

The Indian-American Fashion Website will have the following financial plan

Break-Even

The Indian-American Fashion Website break even analysis will depend on running costs. This includes the costs that the business will incur to ensure the website is running. It does not comprise of theoretical fixed costs that would be regarded as relevant if the business was closing. Fixed costs are comprised of rent, marketing costs and payroll as well as utilities.

Break-even analysis
Monthly Break-even Revenue $175,250
Assumptions:
Percentage Average Variable Cost 56%
Monthly Estimate of Fixed Costs $75,750

Profit and Loss Projections

The following diagrams are a representation of the Indian-American Fashion Website projected profit and loss for a period of three years.

Profit Monthly

Profit Yearly

Gross Margin Monthly

Profit and Loss ‘000

  Year 1 Year 2 Year 3
Sales $2,170 $3,000 $4,300
Direct Sales Cost $ 1,249 $1,800 $2,580
other Production Expenses $0 $0 $0
TOTAL SALE COSTS $1,249 $1,800 $2.580
Gross Margin $921 $1,200 $1,720
% 42.4% 40.0% 40.0%
Expenses
Payroll $530 $575 $612
Sales and Marketing $265 $350 $420
Depreciation $0 $0 $0
Leased Material $0 $0 $0
Utilities $2.4 $2.4 $2.4
Insurance $0 $0 $0
Rent $24 $24 $24
Taxes from Payroll $79 $86 $92
Other $0 $0 $0
TOTAL EXPENSES $ 903 $1,028 $1,172
PBIT $18 $172 $548
Interest Expense $17 $13 $88.01
Taxes $2.06 $47 $163
Net Profit $4.83 $111.35 $377.1
Net Sales 0.02% 3.72% 8.76%

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