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 Guided byEsha Sharma LokinderKumar Tyagi (Internal Guide)

BHARATI VIDYAPEETH DEEMED UNIVERSITY INSTITUTE OFMANAGEMENT & RESEARCH, NEW DELHI

An ISO 9001:2008 Certified Institute

NAAC Accredited Grade “A” UniversityCRISIL Grading – MBA Programme

A * - National LevelA ** - 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 Signature of

the Guide

Esha Sharma 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

Page no

Executive Summary of Business Plan

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 ReadymadeGarment have become very popular. Most of the people used towear readymade garments have become very popular. Most ofthe people used to wear Readymade Garment in case of timesaving activity. Especially ladies, kids, teenage girls andcollege going girls have taken very much interest in newdesigns and fashionable garments.

Today, the women especially working or homemaker want tolook gorgeous without being too traditional.

I have decided to open a readymade garment shop to introducenew category of clothes in the market which may be somethingdifferent from the clothes already available in the market.

I have named my garment shop “TRENDZZ” and gave the punchline to the shop “completing the family” as I have gave thistagline to influence the customers and the people in the marthat they attract towards my shop and took visits in myshop.

This tagline briefly means the shop completes every type ofcustomer either girls, kids, women, boys, kids, man andcollege going girls.

The owner of the shop is me and I have engaged three workersin the shop who will contribute to the sales and profits inthe business and the capital is also invested by me and myfather in the business.

The shop basically targets teenage girls and college goinggirls as my shop has the availability of wide variety ofkurtis, tops and other accessories.

The other clothes which are available in my store are forthe 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 shophas the products which are related to active wear, workoutgear, leather garments, headgear and baseball jackets. Itcovers almost all types of customers. My shop also provides

the facility for the repair such as stitching of the clothesand altering of the clothes.

Chapter-1

Introduction

1.1Introduction of the retail industry

The technology advances each and every sector has beenrapidly developed like a Government Sector, EngineeringSector and many more then how can the “READYMADE GARMENTSHOP” become backward. Each and every person wants to looklike a hero and heroine. As the fashion takes place, theywant to wear more fashionable clothes. In movies actor and actresses are wearing different typesof dresses. Every person wants to look like them. With theincrease in fashion every person want to wear that type ofcloths. Some people purchase cloth material and visit at thetailor shop for stitching the dresses they like. But ittakes too much time. Fashion is growing up day to day.Readymade Garment Shops are opened. People are satisfiedfrom Readymade Garment Shop and people also save theirvaluable time. Readymade Garment Shop provides better designdresses to customers. With the change in the trend in fashion market ReadymadeGarment have become very popular. Most of the people used towear Readymade Garment Shop have become very popular. Mostof the people used to wear Readymade Garment in case of time

saving activity. Especially ladies have taken very muchinterest in new designs and fashionable garments.

Readymade Garment Company like as Nain See Private Ltd,Saujnya Dresses, Ashika Sarees and Dresses, Garden Dressesmakes garment very attractive and it gives it special effectto that garment or dresses to be very attractive. There workof various types of stitches like “Kashmiri Buta, KunadanWork or Jardari Work is become very famous in new trend.There are various other companies are also work to givebetter quality product. In recent years many people areinterested in wearing Readymade cloths and specially ladieshave most interest in that type of cloths so when theresearcher is a lady it takes too much interest for thetopic. So that researcher selected the subject ReadymadeGarment Shop as the study of the project.

Retail is India's largest industry. It accounts for over 10per cent of the India's GDP and around eight per cent of theemployment. Retail sector is one of India's fastest growingsectors with a 5 per cent compounded annual growth rate.India's huge middle class base and its untapped retailindustry are key attractions for global retail giantsplanning to enter newer markets. Driven by changinglifestyles, strong income growth and favorable demographicpatterns, Indian retail is expected to grow 25 per centannually. It is expected that retail in India could be worthUS$ 175-200 billion by 2016.

The organized retail industry in India had not evolved tillthe early 1990s. Until then, the industry was dominated bythe un-organized sector. It was a sellers market, with alimited number of brands, and little choice available tocustomers. Lack of trained manpower, tax laws and governmentregulations all discouraged the growth of organized

retailing in India during that period. Lack of consumerawareness and restrictions over entry of foreign playersinto the sector also contributed to the delay in the growthof organized retailing. Foundation for organized retail inIndia was laid by Kishore Biyani of Pantaloon Retails IndiaLimited (PRIL). Following Pantaloon's successful venture ahost 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. Theseinclude: increase in the young working population, heftypay-packets, nuclear families in urban areas, increasingworking-women population, increase in disposable income andcustomer aspiration, increase in expenditure for luxuryitems, and low share of organized retailing. India's retailboom is manifested in sprawling shopping centers, multiplex-malls and huge complexes that offer shopping, entertainmentand 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 intoorganized retail would make redundant the neighbourhoodkiryana stores resulting in dislocation in traditionaleconomic structure. Also, the growth path for organizedretail in India is not hurdle free. The taxation systemstill favours small retail business. With the intrinsiccomplexities of retailing such as rapid price changes,constant threat of product obsolescence and low marginsthere is always a threat that the venture may turn out to bea loss making one.

A perfect business model for retail is still in evolutionarystage. 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 ofround-the-year steady prices, sorted and cleaned food andfresh stock at all times.

Trained human resource for retail is another big challenge.The talent base is limited and with the entry of big giantsthere is a cat fight among them to retain this talent. Thishas resulted in big salary hikes at the level of upper andmiddle management and thereby eroding the profit margin ofthe business. All the companies have laid out ambitiousexpansion plans for themselves and they may be hampered duelack of requisite skilled manpower.

But retail offers tremendous for the growth of Indianeconomy. If all the above challenges are tackled prudentlythere is a great potential that retail may offer employmentopportunities to millions living in small town and citiesand in the process distributing the benefits of economicboom and resulting in equitable growth.

Retail consists of the sale of goods or merchandise from afixed location, such as a department store, boutique orkiosk, or by mail, in small or individual lots for directconsumption by the purchaser. Retailing may includesubordinated services, such as delivery. Purchasers may beindividuals or businesses. In commerce, a "retailer" buysgoods or products in large quantities from manufacturers orimporters, either directly or through a wholesaler, and thensells smaller quantities to the end-user. Retailestablishments are often called shops or stores. Retailersare at the end of the supply chain. Manufacturing marketerssee the process of retailing as a necessary part of theiroverall distribution strategy. The term "retailer" is alsoapplied where a service provider services the needs of a

large number of individuals, such as a public utility, likeelectric power.

Shops may be on residential streets, shopping streets withfew or no houses or in a shopping mall. Shopping streets maybe for pedestrians only. Sometimes a shopping street has apartial or full roof to protect customers fromprecipitation. Online retailing, a type of electroniccommerce used for business-to-consumer (B2C) transactionsand 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 foodand clothing; sometimes it is done as a recreationalactivity. Recreational shopping often involves windowshopping (just looking, not buying) and browsing and doesnot always result in a purchase.

1.1.1 Growing retail space

The growth of the readymade garment industry is inextricablylinked to that of retailing. For long, the bane of thedomestic readymade garment industry was the inadequacy ofthe distribution system.

Apparel retailers, with little retail expertise, had tobuild their own network, at considerable expense. The rapidgrowth in recent years of various retail formats, such asdepartmental stores and malls, has given a fillip to theindustry.

Players still believe that the retail industry is in itsinfancy. While KSA Technopak, a textiles and retailingconsultant, expects some 200 malls to come up over the nexttwo years, the growth in retailing is still seen withskepticism by apparel companies. Most of these projects areexecuted by real-estate developers rather than retailers.

The latter are, however, better placed to understand thedynamics of the business.

A boost to the industry would come from allowing foreigndirect investment in retailing, which would increase spaceconsiderably and also bring international practices toIndia. This may also encourage newer entrants, once thedistribution costs decline.

1.1.2 Expanding the retail network

Apparel manufacturers were among the first to foray intoorganized retailing. Raymond, Indian Rayon and ZodiacClothing have built an extensive retail network over theyears.

Even as they retail through other multi-brand outlets anddepartmental stores, they also continue to set up their ownoutlets. Having their own outlets, they believe would helpshowcase their entire range of products, as well as buildtheir 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 predominantlypositioned in the premium segment.

There has been a market for such products; Louis Philippeshirts have sold for Rs 4,000 and more. Clearly, the promiseof high quality has held value for customers.

But the strong response to a flurry of price cuts acrosssectors, ranging from airlines to telecom, has shown thatthe branded apparel segment cannot afford to miss out on theopportunity in mass markets for long.

One has to only see the huge response to a Color plus saleto get an idea of the growing demand for branded clothing atlower price points. Brands have grown to depend upon suchsales to drive up their volumes.

With the exemption of excise duty on cotton garments and thecreation of a level-playing field, branded players now havea good incentive to introduce products at lower price pointsfor the mass market, which, till now, has been the preserveof 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-drivenbusiness. This would also need a far larger distributionnetwork than what exists today.

Few retail formats in India operate on a truly large scale.Giants such as Walmart and Carrefour, which have the abilityto drive volumes, are what the industry would need; however,their entry is unlikely till such time FDI is permitted inretailing.

1.1.4 Tussle with private labels

Manufacturers have found it is advantageous to have theirown outlets for another reason. The increasing share ofretailers' private labels is squeezing the space availablefor their own brands. The likelihood of private labelsemerging as a major threat to brands has been debatedendlessly.

Private labels tend to do well during recessions. Retailersenjoy better margins on their own labels, and are also ableto price them lower.

Private labels, however, plateau in the boom periods, whenbrands stand to gain. Players in the branded segment also

contend that customers are eventually won over to brands byfamiliarity and quality assurance.

Going one step further, private labels can help buildmarkets for brands. For instance, the women's apparelsegment is yet to take off in a big way, but private labelshave managed to do well in this segment.

The players such as Madura Garments, which have a presencein the segment through Allen Solly, believe that once womentry out private labels and get more accustomed to Westernwear, 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 areexchanged. The traditional market square is a city squarewhere traders set up stalls and buyers browse themerchandise. This kind of market is very old, and countlesssuch markets are still in operation around the whole world.

In some parts of the world, the retail business is stilldominated by small family-run stores, but this market isincreasingly 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 marketingstrategy:

Department stores – It is a very large stores offeringa huge assortment of "soft" and "hard goods; often beara resemblance to a collection of specialty stores.

Discount stores – It tends to offer a wide array ofproducts and services, but they compete mainly on priceoffers extensive assortment of merchandise ataffordable and cut-rate prices.

General merchandise store – It is a hybrid between adepartment 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 steelshelves.

Variety stores – The variety stores offer extremelylow-cost goods, with limited selection.

Demographic – The retailers that aim at one particularsegment.

Mom-And-Pop or Kirana Stores - It is a retail outletthat is owned and operated by individuals. The range ofproducts are very selective and few in numbers. Thesestores are seen in local community often are family-runbusinesses.

Specialty Stores - A typical specialty store givesattention to a particular category and provides highlevel of service to the customers. A pet store thatspecializes in selling dog food would be regarded as aspecialty store.

Convenience Stores - These stores are essentially foundin residential areas. They provide limited amount ofmerchandise at more than average prices with a speedycheckout. This store is ideal for emergency andimmediate purchases.

Hypermarkets- provide variety and huge volumes ofexclusive merchandise at low margins. The operatingcost is comparatively less than other retail formats.

Supermarkets - It is a self service store consistingmainly of grocery and limited products on non fooditems.

Malls- They have a range of retail shops at a singleoutlet. They endow with products, food andentertainment under a roof.

Category Killers or Category Specialist - By supplyingwide assortment in a single category for lower prices aretailer can "kill" that category for other retailers.For few categories, such as electronics, the productsare displayed at the centre of the store and salesperson will be available to address customer queriesand give suggestions when required.

Some stores take a no frills approach, while others are"mid-range" or "high end", depending on what income levelthey target.

Other types of retail store include the following:-

Automated Retail stores are self service, robotickiosks located in airports, malls and grocery stores.

Big-box stores encompass larger department, discountand general merchandise and warehouse stores.

Convenience store is a small store often with extendedhours, 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 garmentindustry

Textile industry in India is widely comprehensive,integrating whole range of raw material to finished productthat includes fiber manufacturing, spinning, knitting andweaving, and garment manufacture.

The industry provides almost every single aspect which is asfollows:-

1. Raw material

It can be cotton, linen, and wool, silk and manmade fiberslike viscose, polyester, polypropylene and acrylic. Indiancompanies have marked presence in even non-traditionalsegments.

2. Fabric production

It includes suiting-shirting, dress material, fabrics forshorts and trousers, denim, hosiery, fleece flats and woolenknits, technical fabrics and so on.

3. Apparel production

It specifies formalwear, casual wear, active sportswear,traditional wear, under garments, outerwear, kids wear, andyou 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 establishedinfrastructure, multi-benefited governmental, political andregulatory system that would lure foreign investors.

In recent years, the readymade garment segment has seenvertical growth. Accounting nearly Rs. 20,000 crores, thisindustry is growing at the rate of 20 percent, with massivevisibility and consideration margins. The largest segmentfor the readymade garment segment includes the age-group of16-35 that is very brand conscious and gives priority tohigh quality. Branded readymade garments account over 21percent 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 areadymade garment shop for children, women, teenage girls,kids, infants, gents and boys. The clothing line that isunique, special, comfortable, and fun. My store targets thepeople which belong to middle class and upper middle class.However, my store has no collection of the raw materials butworks for readymade garments and made-to-order preparationof clothes, stitching, threading, pitch work and designing &cutting of the clothes.My shop has brought the store look to the masses, and madeit simple and affordable for anyone to get the readymadegarment store look. All of their tops, bottoms, basics andaccessories from each individual line coordinate with oneanother, making it easy for anyone to put together a wellcoordinated 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 onceyour 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 thesemost attractive segments to target. These segments are themost desirable because they have desirable levels ofdisposable income and they spend it. The women are used tohaving fashionable clothes and accessories and it is totallyconsistent with their purchasing patterns that thispreference would remain unchanged once they get pregnant.Many expecting women like to reward or pamper themselveswith nice gifts when they're pregnant.

Family is interested in buying nice gifts for theirexpecting friends. This segment recognizes their friend'sappreciation for nice things and are looking for somethingthat they know they will enjoy. The output is meant to besomething nice and luxurious. Much of the current maternitywear and accessories are utility based and while they servetheir purpose, they are not the most engaging gift. Familyare looking for something that will stand out, that the newmothers 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. teenagegirls, 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 createand adapt designs to changing market conditions.

3. Good knowledge of fabrics, and the ability to choose thebest match between garment design and fabric.

4. To get a position of a fashion designer within a fashionindustry where I can use my best design, creative skillsand 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 gainreputable work assignments to enhance reputation andskills in this field.

7. To work in a dynamic and challenging environment, whereseamless integration of creativity can be experienced.

8. To introduce new creativity in the market.

9. Equally adept at performing as a project team member orworking independently, depending on the nature of theproject at hand.

10. Proven ability to translate client garment designrequirements into design illustrations using leadingdesign software such as Adobe Illustrator and Photoshop.

11. Significant ability to interpret people requirementsand create designs that pinpoint their target market.

Chapter-2Management team

2.1 Shop structure and description of management team

The employees will be motivated to work within theircreative, physical and intellectual boundaries. All dutieswill be divided and delegated according to strengths andweaknesses. At my store, I will expect a high degree ofcustomer service skills and personality as this is essentialto our success.

I will assess the productivity and perform informalemployee’s evaluations of all employees every six months.These bi-annual evaluations are conducive to the continuedgrowth of our small business.

Western Wear is a small business and therefore requires asimple organizational structure. I will act a generalmanager. All decisions are made in-line with the companyobjectives. Employee tasks are delegated based upon theirlevel of expertise, creativity, strengths and weaknesses.

All sales persons and I will be responsible for alladministrative functions, purchasing, inventory control, andpromotions. I will also act as a part-time salesrepresentative. I have spent over 2 years in accounting,finance and operations management. I am also the owner ofthis store an e-commerce store for the years. I haveextensive background in purchasing, inventory control, andmarketing.

As a small business, we will have a small staff of 6 membersand me. Both co-workers and I will assume leadership roleswithin the shop and I will be responsible for daily

operations, overseeing marketing efforts, giving service andmanaging inventory and all other administrative duties. Asmall sales staff will assist co-owners with securing sales,assisting customers and general maintenance of stock on thefloor.

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 staffof 2 part-time employees. These positions are yet to be

filled. However, we feel the labor pool is such that findingqualified employees will not be an issue. Our salesassociates will be paid an hourly wage, plus commission.Bonuses will be provided with each year of sales and servicefollowing an annual review to encourage employee retention.

I don’t have any team of seniors but I and all 3 workerswork together as a team. I train them to sell the clothesaccording to the requirements of customers and pay attentionto their requirements and they try to follow my instructionsto sell the clothes efficiently. The 2 workers work likestitching, patchwork, ironing, and final touch.

The workers who stitch the clothes and gives final touch andmeasurement 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 todescribe the trend away from pin stripes and high heels. Other terms include business casual (usually means theDockers-khakis-polo shirt look), business appropriate (astep-up from casual), business ready (meaning that atraditional suit must be ready to wear at all times),corporate casual, clearly casual, resort casual"(definitelynot allowed in the office), refined casual wear (acceptableprovided that you understand what it is) and perhaps mostappropriately casual confusion.

I have a variety of products to suit the needs of everyindividual, whether they are dressing for success or for anafternoon of leisure. 

Some of the company's products includes:-

o Men's Pullover, Long Sleeve, Small to 5XL:  Rs.500.00

o Men's/Women's Pullover, Short Sleeve, Small to5XL:  Rs. 400.00

T-Shirts (100% Cotton)o Men's, Long Sleeve, Small to 5XL:  Rs.300.00o Men's, Short Sleeve, Small to 5XL:  Rs.200.00o 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.700.00o Women's, Small to 5XL:  Rs.600.00

Denim Pants (100% Cotton Denim)o Men's/Women's:  Rs.700.00

2.3.2 Active wear/Sportswear

At leisure lifestyle apparel, from yoga pants to terry tracksuits, 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 practicalfor the gym.  The collection is characterized by modern,comfortable, high-tech fabrics and functional, ergonomicdesigns. 

The active wear product includes the following:-

Sweatshirts (100% Cotton)o Men's/Women's, Long Sleeve, Small to 5XL: 

Rs.200.00o 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

Sports styling will continue to dictate many casual designsthroughout 2004, although natural looks where the fabricmakes the statement will also be important.  Sportswear andsports styling will continue to grip consumers who desirecomfort in everyday wear, yet, as couch potatoes, hardlyever indulge in the activities for which the clothes wereoriginally designed. 

2.3.3 Workout Gear

The colorful fashion trainers, rather than traditionalrunning trainers, will accommodate the massive shift in shoebuying habits.  Keyholes, zip inserts, and satin contraststrips and bindings will continue to feature in mass casualwear emphasizing the sporty feel.

I offer a line of workout gear that brings together acombination of high-end, high-tech, and unique fabrics withtoday’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 oftoday.  They want products with more comfort, moredurability, and more fashion, which in turn will make theirlives easier.  In answer to the consumers' needs companiessuch as follow-me, appeal are developing techniques thatmanage moisture better, so it dries faster improving dye-techniques to enhance color-fastness and designing garmentsthat 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 womenalike.  The leather jackets developed to protect pilots,racers, and motorists from the elements came to symbolize aromantic sense of rugged adventure.  In particular,motorcycle jackets maintained this ideal for decades to

come.  I carry on this American-made tradition of theclassic, 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 articleof clothing the consumer can own.  They may be extremelystylish and popular, following fashion trends from year toyear, but the truth is that they are never out of style.

Consumers can find leather jackets in various shapes andsizes or different lengths (such as trench coat, knee, threequarter, and hip), depending upon the consumer's body type,height, style, and taste.  Even square-shaped, leatherbomber jackets have made their return and continue to bepopular.  All leather jackets are stylish. 

2.3.5 Baseball Jackets

Ever since hip-hop innovators and style aviators Outkastappeared on MTV sporting old school Houston Astros jerseyswith rainbow colors and 70s flavor, the rap world has seen atrend toward old school/vintage sports apparel.  Since then,others have been seen in videos "discovering" forgottenlogos and athletes.  Retail stores' shop windows of showcasestyles that, by today's standards, would be considered outof place for men playing on the field. Vibrant colors andrainbow designs that were once the norm in the seventies andeighties has been replaced with more conservative colorschemes, or with shades of gray and black.

I have in my store a line of new, satin baseball jacketsthat mimic those worn by teams of the past.  They are madeof 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 inhip hop's long evolution.  A sports symbol can symbolize farmore than one might expect.  While wearing the traditional,current logo of a local team can still symbolize an artist'sclaims of his/her roots, recent styles of sporting wearattest to more than locality, signifying pure fashion forfashion's sake in an ever-changing culture.

2.3.6 Headgear

During the summer, fedoras and mesh caps made of naturalgrasses found favor among both men and women.  Anothercommon sight was unlikely combinations of feminine clothesand baseball caps, while, as an extension of the layeredlook, turbans were also a hit.  This fall has witnessed therenewed popularity of the rounded, visored berets known as"caskets" that have been a conspicuous presence since lastyear.  Hats and caps are coming out in a variety ofmaterials, colors, and shapes, including woolen caps withdesigns knitted in and hats made of furry materials likeangora.

As to why hats have become entrenched as a fashion accessoryover the past few years, we believe that headwear offers theeasiest means of self-expression in the context of a generaltrend for casual fashion.  Even a person dressed in a simpleoutfit like pants and a T-shirt can instantly express his orher personal style just by putting on a hat.

Hats are becoming as much an integral part of young people'swardrobes as other fashion items, and I have a variety ofhats 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 wintercold.  Right now, hats are experiencing a boom in popularitythat has made them an essential item regardless of theseason.  More and more people are wearing hats ofdistinctive designs that, unlike the past hat booms are notconstrained by fashion trends.

Chapter-3Environmental scanning of business

3.1 Industry analysis

3.1.1 Market segmentation

My store intends to target men, women, and children in theTri-State Area who require competitively priced,branded clothing.  Within all groups, there are no color

barriers and customers have diverse backgrounds.  Theconsumers range between one year and 60 years of age.

According to the NPD, women spend about 80% of all moneythat goes for sportswear.  They control 96% of the dollarsspent on their own clothes, 93% of those spent onchildren's, and 60% of those spent for men's sports apparel.

During 1999, the women's consumer segment, a constantconsumer group, dominated the U.S.  apparel sales market. Women's apparel sales growth was 3.7% and represented 52% ofall apparel sales, whereas men's apparel growth was 4.1% andaccounted for 31% of total apparel sales.  Women tend to buyat a constant rate, whereas men's apparel sales have beengrowing.

Individuals under the age of 20 wear about 43% of sportsapparel, 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 potentialcustomers in the Tri-State Area by gender and age groups, aswell 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 asfollows:-

3.1.3.1 Adult Apparel

The production of adult apparel, particularly women'sclothing, occupies the largest sector of the apparelindustry.  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 ona five-season basis i.e. fall line merchandise is usuallyoffered to retail store buyers in April; holiday collectionsin June; early spring, resort, and cruise wear in October;spring and summer clothes in January, may and early fallfashions in March and April.

Men's clothing design and sales are in a state of upheaval.  In the past, manufacturers presented two new lines ofclassic clothing each year, changing fabrics for seasons. Today, many firms produce highly styled clothes fordepartment store boutiques and small specialty shops whichcater to the fashion-conscious man.  Their problems withseasons, lines and style acceptance parallel those ofwomen's wear producers.

Other than children's wear, the market for men's clothinghas grown faster than any other sales category in theindustry.  The introduction of state of the art permanent-press fabrics probably initiated this sales increase, butthe acceptance of casual fashion in men's wear, spurred bythe growing youth market, has been the main factor.

Although the larger firms are continuing to gain groundcompared to smaller firms, and brand-name merchandisealready has a large share of the market, the preference formajor brands is not longer unanimous.  Retailers are nowmuch more open to adding new product lines.  The currentinterest in personalized trends, which more closely reflectthe consumer's identity, provides an opening for small andlesser-known collections.

The "cheap chic" trend is also spurring consumers to expectmore at a lower cost, seeing little difference in style fromone brand to another.

3.1.3.2 Sportswear

Individuals under the age of 20 wear about 43% of sportsapparel, but individuals aged 45 and older accounted for 25%of the market in 1999.  The widening age gap betweenyouthful and not-so-youthful wearers represents a multitudeof challenges in designing, marketing, and branding forsportswear manufacturers.

The growth of the sportswear industry is particularly markedamong female consumers, who now see themselves as moreathletic and have begin to wear these collections as streetclothes.  Since women are more "outfit-oriented" than menwhen it comes to exercise clothing, they represent a targetclientele for this industry.  The junior market segment isalso of primary important in this industry, as sportswear isoften tied in to fashion.

A product's technical characteristics are also veryimportant in this industry, competing with the "sport-fashion" factor in the final buying decision.  Technicalconsumers are much more consistent in their buying habitsand provide stability during economic slow downs. 

3.1.3.3 Junior Clothing

The strong growth in demand in the junior clothing industryhas, so far, been able to minimize the unfortunate effectsof the economic slowdown, but heavy competition in themarket makes retailers very conscious of fluctuations indemand.  Competition in the junior market segment has shotup in recent years, with a twofold increase in the number ofjunior clothing chains.

Popularity and brand visibility are very importantfactors in buying decisions made by this market segment;this reduces the maneuverability of small manufacturers whowant to position themselves in the market.  It is crucial tofollow trends because this segment follows fashion cyclesclosely.  It is possible to position one's self with veryup-to-date collections at lower prices than well-knowncollections; however, this means following the marketclosely and providing the resources necessary for productvisibility.

3.1.3.4 Children's Wear

Manufacturers of children's clothing produce large linesfrom which the store buyer makes purchases three times ayear to cover the main selling seasons of spring and summer,back-to-school and holidays.  Although children's apparel isa basic family requirement, the fashion revolution isaffecting even these styles.  Mothers (controlling 93% ofall apparel dollars spent on children's wear) want theirchildren to have the latest "look." Children's wearmanufacturers are becoming highly skilled at producing highfashion apparel.  Kid's fashions have been one of thefastest growing categories of apparel.  To keep pace withthis trend, manufacturers have adopted the production andsales techniques used in women's apparel.  This has led toenormous numbers of children's wear departments andspecialty stores throughout the nation.

The children's wear industry has grown considerably inrecent years, but still remains a small market segment andcan be difficult for small manufacturers to enter.  Sincechildren's wear trends increasingly mirror those of adultapparel, children's collections must not onlyplease children, but also be very similar to current trendsin the adult market.  This calls for constant monitoring of

the market and a high degree of flexibility and quickadaptation.  Major firms that market adult collections atthe same time as children's copies have a head start in thisregard.  Price, nonetheless, remains a decisive factor inmaking purchases, given the speed at which children outgrowtheir clothes.  Manufacturers who are competitive in thisregard and have the flexibility to adapt their products tofashion trends can find worthwhile niches.

3.1.4 Target Market Segment Strategy

My shop has chosen girls, kids and women as the three mostattractive segments to target. These segments are themost desirable because they have desirable levels ofdisposable income and they spend it. The women are used tohaving fashionable clothes and accessories and it is totallyconsistent with their purchasing patterns that thispreference would remain unchanged once they get pregnant.Many expecting women like to reward or pamper themselveswith nice gifts when they're pregnant.

Family is interested in buying nice gifts for theirexpecting friends. This segment recognizes their friend'sappreciation for nice things and are looking for somethingthat they know they will enjoy. The output is meant to besomething nice and luxurious. Much of the current maternitywear and accessories are utility based and while they servetheir purpose, they are not the most engaging gift. Familyare looking for something that will stand out, that the newmothers 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 productsMen 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 theexpensive lipstick worn by many a woman remains at thebottom of the handbag, to be flashed only discreetly, in thepowder room.

2. Comfort and easy-care Men want comfort and easy-care apparel, and the sportswearworld provides this through high-tech fabrics.  According toBill Ghitis, president of global marketing for DuPontTextiles & Interiors (DTI), "Performance fabrics have been aniche for the athlete, but, based on our research, webelieve that all men, particularly smart men, want much moreout of their clothes."

From woman’s viewpoint:-

1. Comfort and easy-care Women avoid wrinkles on their skin, and they don't wantthem on their clothes either.  While the Fountain of Youthmay be elusive, in the ongoing quest for comfortable cottonclothing that won't wrinkle, women (and men) are winning the

battle.  Technological advances have ushered in a newgeneration of wrinkle-resistant, 100% cotton garments thatdeliver on comfort, style, and wear, while retaining a crispappearance throughout the day.  2. Apparel sizingThe discrepancy in the actual size of women who may all -accurately - claim to wear the "same" size is one of themany fit anomalies that are a reality today for the U.S. clothing industry.  Little analysis of body shapes and sizeshas been conducted since the 1940s for women and since theCivil War for men.

3. Sportswear  

Until very recently, even if you got women into the storeslooking for sporting goods and apparel, there was nothingfor them to buy.  There is a definite void in the market forwomen's related merchandise, such as feminine lookinggarments rather than unisex.

From children’s viewpoint:-

1. Fashion

With fashion continuing to drive the children's apparelmarket, industry players are attempting to work more quicklyand efficiently to make sure they have the right looks onthe floor at the right time.

Children's and parents' ever-louder cries for kids' apparelwith looks that mirror juniors, young men's, and even adultclothing is also inducing retailers to commit to pint-sizedincarnations of older styles, without waiting to see how the

latter fares with customers.  Tops with spaghetti straps andmulticolored shimmering or sequined borders are gainingground with girls.  Boys are gravitating toward athleticsilhouettes:  brightly colored, printed camp shirts wornover muscle T-shirts, zip-off pants and shorts that extendseveral inches beyond the knee.

Style is important to these young adults, but style comes inmany different packages - cellular phones, cars, andvacation destinations are among them.  In addition, the teenand tween segments appear to find individuality appealing.

2. Branded products3. Easy to wear clothes4. 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.94. 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 difficultyin sustaining retail operations across the large geographical spread of the country.b) Transport facilityc) 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 consumerneed for an array of products and services. This creates amarketplace of job opportunities that spans departmentstores, discount merchandisers, factory outlets, specialtystores, automobile and food retailers.

For many the perception of retailing does not go beyondbeing a customer at a store or at the most from a summersales job in a mall outlet. But there are many behind-the-counter tasks involved in getting the products into thestores and onto the shelves ready for customers to buy. Thislends itself into a breadth of career paths inmerchandising, marketing, and store management, finance anddistribution and information systems.

The following are examples of positions in retail to giveyou an idea of the opportunities that waits are:-

A Buyer selects and orders merchandise, plans salespromotions and maintains sales and inventory records.

A Planner effectively plans and controls inventories atthe location level to maximize sales and profit, alsodirects the distribution of goods.

A Department manager establishes and implementspolicies, goals, and procedures for the specificdepartment, supervises employees, reviews inventory andsales records as well as coordinates activities withother departments.

A Store Manager oversees employees at a given retaillocation and steers his or her unit toward corporatesales 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 decidesthe demand and supply for each product. Some products arethere, which triggers huge demand and if there is a demandthere also be enough competition for that particularproduct. Business owners are planning strategies to cutthrough this competition and make more sales and retaincustomers.

Strategies are as follows:-

1. Analysing the market conditions by surveying method likepersonal 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 somake course corrections.

3. Hiring people by self and train them self - no one knowswhat is wanted better than us. Teaching them to shut up andlisten.

4. Keeping employees happy. A happy employee is less likelyto steal, more likely to exude joy and as a result willresult in happier customers.

5. Talking to the customers as they leave the store, theones that bought will tell what they likes, the ones thatdidn't buy will tell why they didn't buy, listen and takenotes.

6. Offering huge discounts.

Chapter-4Manufacturing and operations

My store does not provide the facility of the making andproduction of the clothes but I have few suppliers whosupply clothes in bulk ever quarter of the month. Since itis a small garment store I don’t prepare clothes and alsosmall amount of capital is invested in the business. But my future plan is to introduce hand-made clothes in themarket where my store is located and also targets othermarkets and make my store a big showroom.Currently, it is a trial business and analyse if thebusiness 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 makingthat 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. Thefurther 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 officebuilding located in Rohini. The 20 square foot facility

provides enough room for storage of the stock which isreceived from the suppliers and storing in bulk as well asadministrative office space. A two year lease has beensigned at Rs.2, 000 per square foot with options to extendthe lease. The facility can be expanded an additional 30square feet at any time to accommodate growth of the store.

The small warehouse is bought on rent. The amount of therent is nearly Rs. 4,000 per month which is paid every montheven if the store earns profit or not.

Once when the business will earn supernormal profits thethere is a plan to hire own ware house which is much biggerin size as compared the current rented warehouse so thatmore and more stock can be stored and kept safe in thewarehouse.

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 andprofitability by expanding our network of retail store andimproving the performance of existing store.

Our retail locations build brand awareness and contribute tomarket penetration and growth of the brand in concert withour wholesale operations. The store will also consideropening 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 tolocal environment

However, it is beginning of the shop so modification is notmuch required at the first stage of the business. My storealready has the collection of clothes which are notexpensive can be easily sold anywhere in small area. Thisshop is also suitable for middle class income group people,

upper middle class income group people and low class incomegroup people.

The modifications if required can be followed are asfollows:-

1. Availability of the big brand clothes.

2. Less availability of the stock of other clothes likesportswear, track suits and hats.

3. No availability of the rest corners and rest rooms in theshop.

4. Procedure of payment of bill through credit card may notbe available.

5. Less availability of the whole inventory if warehousefacility will not be there.

6. Non-availability of other accessories.

7. Clothes repairing facility may not be available likestitching, Knitting and embroidery.

8. Quality of a product.

9. Quality of a textile material.

10. Quality of a process of production.

Chapter-5Personnel strategies

5.1 Personnel needed to manage business

The shop will be open seven days a week during the summerwhen people are shopping the downtown the whole area.Through the winter season we will close on Monday as do mostof the downtown retailers. For the Holiday season we willextend our hours to two nights a week to accommodate thoseafter work shoppers. We will be located next to a well knownupscale other grocery shops and germent shops in the area,throughout the summer customers line up to wait for newstock. We will be able to capture that traffic. As long asthere is a customer in the store we will stay open and servethem.

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 2part-time workers and I also sometimes engaged in theprocess of selling and field work if the workers take leaveand on the half-day.

The salary of the workers is also negotiable and it is basedon 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 workerswill in the field for more than 2 hours and less than 2hours 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 workerin 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 existingpersonnel

Retail salespersons typically learn their skills through on-the-job training. Although advancement opportunities arelimited, having a college degree or a great deal ofexperience may help retail salespersons move into managementpositions.

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 recognizeduniversity.

3. The candidates who have experience of 6 months in otherdiscount and departmental stores will be highly preferred.

5.2.1 Education and training

There usually are no formal education requirements forretail sales positions, but employers often preferapplicants with a high school diploma or its equivalent.This may be especially important for those who selltechnical products or “big-ticket” items, such aselectronics or automobiles. A college degree may be requiredfor management trainee positions, especially in largerretail establishments.

Most retail salespersons receive on-the-job training, whichusually lasts anywhere from a few days to a few months. Insmall stores, newly hired workers usually are trained by anexperienced employee. In large stores, training programs aremore formal and generally are conducted over several days.Topics often include customer service, security, the store'spolicies and procedures, and cash register operation.Depending on the type of product they are selling, employeesmay be given additional specialized training. Due to

providing the best possible service to customers is a highpriority for many employers, employees often are givenperiodic training to update and refine their skills.

5.2.2 Other qualifications

The employers look for people who enjoy working with othersand who possess good communication skills. The employersalso value workers who have the tact and patience to dealwith difficult customers. Among other desirablecharacteristics are an interest in sales work, a neatappearance and a courteous demeanor. The ability to speakmore than one language may be helpful for employment incommunities where people from various cultures live andshop. Before hiring a salesperson, some employers conduct abackground check, especially for a job selling high-priceditems.

5.2.3 Advancement

The opportunities for advancement vary. In some smallestablishments, advancement is limited because one person isoften the owner and does most of the managerial work. Inothers, some salespersons can be promoted to assistantmanager. Large retail businesses usually prefer to hirecollege graduates as management trainees, making a collegeeducation increasingly important. However, motivated andcapable employees without college degrees still may advanceto administrative or supervisory positions in largeestablishments.

As salespersons gain experience, they often move intopositions with greater responsibility and may be given theirchoice of field in which to work. This opportunity oftenmeans moving to areas with higher potential earnings andcommissions. The highest earnings potential usually lies in

selling big items such as jewelry and other items althoughdoing so often requires extensive knowledge of the productand an excellent talent for persuasion.

The previous sales experience may be an asset as when one isapplying for positions with larger retailers or in nonretailindustries, such as financial services, wholesale trade ormanufacturing.

5.3 Training needs of existing personnel staff

Training and development continues throughout an employee’scareer and is supported by an annual performance review thatidentifies possibilities for further progression andassociated training and development needs. Managers instores or other internal trainers carry out most of ourtraining.

When the employees develop, the career develops. The yearlyperformance reviews for all employees are a common practice.

Our training structure is based around non-mandatorytraining that is relevant to all human resource operationsglobally. In addition to the global induction trainingmodules that every employee needs to complete, there areindividual induction training modules for certain taskstailored to the role, such as for store managers, floormanagers and visual merchandisers.

These training modules cover knowledge such as: what itmeans to be good retailers, staff development, garmentpresentation and controlling. Allied to these, there are anumber of non-mandatory global training modules. It also

offers training courses at every level that are tailored toeach 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 successfullywhich follow a set format like in group’s in-store andindividual in-store training.

The training consists of two parts and is integrated intodaily morning meetings in store. These are: - customerservice focused training and pre-campaign training.

The customer service-focused training is provided during the15-minute morning meeting for all employees in every store,six days a week throughout the month. Every other week themorning meetings also cover pre-campaign productinformation.

In some stores we have already seen positive results. Thisinitiative will continue and will also cover challengingcustomer situations.

5.3.1 Stores and warehouses

In-store job rotation may mean that a person's duties varyfrom customer service, the cash desk and fitting roomsthrough to visual display and the follow-up of advertising.

The employees also alternate between different tasks, forinstance unloading, counting, labeling and loading garments.

5.3.2 Cross store

When new stores are opened either in existing sales in newmarkets, the new employees are supported by more experiencedco-workers. This can take the form of colleagues fromestablished human resource procedures for supporting a newstore for a period before, during and after opening.

Chapter-6

Market research

6.1 Market conditions

A successful new venture sells customers goods and servicesthey want or need and continually grows a base of satisfiedcustomers. Hundreds of people consider starting newbusinesses each year and each of them will ask themselvesthe same questions:- Does my product or service fill a need?Who will buy my product or service? What will my price pointbe? What are the trends in my industry? Who are mycompetitors?

Market research helps in the following factors:-

1. Communicate effectively

The targeting can be done through advertising andpromotions. By researching your customers and their spendingand buying habits, it can create marketing campaigns to meettheir specific interests and needs.

2. Identify and understand opportunities

That exists in the marketplace. For example, through primaryresearch, you might find an opportunity to start yourbusiness in a geographic location you had not consideredbefore, where little or no competition exists for yourproduct or service.

3. Pinpoint potential obstacles or problems

Through research, it may uncover direct or indirectcompetitors that had not considered before who may inhibitability to gain a competitive advantage in the market. Itmight also discover future development plans that couldinclude big-box retailers in the target market location.

4. Benchmark and evaluate your success

By knowing the size of your market, how the competitors aredoing and who their customers are, it can set goals to reachthe market, grow customer base and track the relation to thecompetition.

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 ofbusinesses, but none of which create any competition. Theother competitive edge we have developed is the atmosphereand reputation. Traffic is moderate to heavy, especially near the lunch anddinner hours. The closest competing urban wear store is atleast 10 miles away, located in Rohini area. There are noother urban wear stores in the direct vicinity of my shoplocation. 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 theaverage amount spent on clothing per household in Rohiniarea 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- barrierto entry

6.4.1 Strengths of my shop

1. Current location in the center has high traffic, in anarea with several other shops targeting the same marketwhich draws people to the area.

2. Our innovation is in our sales technique and point ofsale 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 levelbrands, high margin and low volume in comparison.

7. The stock is the same as our competitors. One can pickand 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 addingproducts to the store, store size is an issue.

6. There is not a lot of competitive advertising in themarket where my shop is located and price is not so much ofan 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 asequipment, building, and raw materials and we have notinvested much in the beginning.

2. The large and experienced retail owners can generallyproduce goods at lower costs than small and inexperiencedretailers.

3. The government regulations may make entry more difficultor impossible. In the extreme case, a government may makecompetition illegal and establish a statutory monopoly.Requirements for licenses and permits may raise theinvestment needed to enter a market, creating an effectivebarrier to entry.

4. The sunk costs and lost money cannot be recovered if aretailer decides to leave a market.

5. The incumbent retailers can seek to make it difficult fornew competitors and entrants by spending heavily onadvertising that new retailers would find more difficult toafford.

6. If a single retail shop owner has control of a resourceessential for a certain industry, then other retail shopowners are unable to compete in the market.

7. When a good or service has a value that depends on thenumber of existing customers, then competing players mayhave difficulties in entering a market where an establishedretail shop and a showroom has already captured asignificant user base.

Chapter-7Marketing plan

7.1 Distribution strategy

The distribution involves a number of activities centered ona physical flow of goods and information. At one time theterm distribution applied only to the outbound side ofsupply chain management, but it now includes both inboundand 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 andstorage.

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 criticaldistribution problems: functional performance, reducedcomplexity and specialization.

The distribution strategy defines how you are going tocreate and satisfy demand for your products. A distributionstrategy defines how you are going to move products frompoint of creation to points of consumption, in a cost-effective manner. It must also define how to manage thebrand.

For my shop:-

The suppliers supply the stock to my shop every 15 days andsometimes also asked if there is an urgent requirement ofclothes in my shop.

No particular procedure for distribution is followed but thesalespersons in my store communicate to the people who cameto my shop and ask their requirements. Then, they startserve the customers by showing clothes to them.

7.2 Pricing strategy

Pricing is the process of determining what a company willreceive in exchange for its products. Pricing factors aremanufacturing cost, market place, competition, marketcondition and quality of product. Pricing is also a keyvariable in microeconomic price allocation theory. Pricingis a fundamental aspect of financial modeling and is one ofthe four Ps of the marketing mix. The other three aspectsare product, promotion, and place. Price is the only revenuegenerating element amongst the four Ps, the rest being costcenters.

Pricing is the manual or automatic process of applyingprices to purchase and sales orders, based on factors suchas: a fixed amount, quantity break, promotion or salescampaign, specific vendor quote, price prevailing on entry,shipment or invoice date, combination of multiple orders orlines, and many others. Automated systems require more setupand maintenance but may prevent pricing errors. The needs ofthe consumer can be converted into demand only if theconsumer has the willingness and capacity to buy theproduct.

In my shop, I have fixed the reasonable prices along withthe discount and with free gifts, so that it attractsdifferent customers in the market.

Some of the shop products and their prices includes:-

o T-Shirts o Men's, Long Sleeve, Small to 5XL:  Rs.300.00o Men's, Short Sleeve, Small to 5XL:  Rs.200.00o Women's, Long Sleeve, Small to 5XL:  Rs.250.00 o Women's, Short Sleeve, Small to 5XL:  Rs.200.00 o Denim Jackets o Men's, Small to 5XL:  Rs.700.00o Women's, Small to 5XL:  Rs.600.00o Denim Pants o 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 thepurpose of influencing, informing or persuading a potentialbuyer'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:-

1. Where and when can you get across your marketingmessages to your target market?

2. When is the best time to promote? Is there seasonalityin the market? Are there any wider environmental issuesthat suggest or dictate the timing of your marketlaunch or the timing of subsequent promotions?

3. How do your competitors do their promotions? And howdoes that influence your choice of promotionalactivity?

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 offered-

Jeans 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 andthe development of product strategy one of the mostimportant decisions a marketer will make since product playsa crucial role in demand, competitiveness and success. Themanagers analyze the ramifications of the product strategyon other areas of marketing like price, distribution andpromotion.The product strategy involves the various elements which acompany 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 easilypurchased 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

o Men's, Long Sleeve:  Rs.300.00

o Men's, Short Sleeve:  Rs.200.00o Women's, Long Sleeve:  Rs.250.00 o Women's, Short Sleeve:  Rs.200.00

2. Denim Jackets

o Men's, Small to 5XL:  Rs.700.00o Women's, Small to 5XL:  Rs.600.00

4. Denim Pants

Men's/Women's:  Rs.700.00

4. Sweatshirts

o 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

5. Sweat suits

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

8. Socks

o Women's, Fits Up to Shoe Size 15:  Rs.100.00

9. Jackets

o Women's, Small to 3XL:  Rs.150.00

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 approximately150,000 males and 165,000 females in the area where my shopis located, totaling 315,000 people. Of those 315,000people, 186,000 are between the ages of 18 and 54 years ofage. Seventy-six percent of the 315, 000 people have ahousehold income of more than Rs. 40,000. My shop basicallytargets market is men and women between the ages of 18 and54 of middle class people, upper middle class people and lowincome class people.

7.5.2 Targeting

For my shop, I target the market and the customers by thefollowing 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 andother 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 businesswill afford to achieve its strategic goals and objectives.Usually, a company creates a Financial Plan immediatelyafter the vision and objectives have been set. It describesabout the activities, resources, equipment and materialsthat are needed to achieve these objectives, as well as thetimeframes involved.

Basically, the financial plan section of the business planconsists of three financial statements, the incomestatement, the cash flow projection and the balance sheetand 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 shopare:-

1. Initial investment

a) Machines & equipments= 10,000

b) Furniture= 10,000c) Storage cabinets & stools= 20,000d) Hangers and stands= 2,000e) Stationary materials= 1,000

2. Salary & incentives

a) Cost of stitching, patchwork & final touch= 700b) 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 FebMar Apr May

0.220.23 0.22 0.21 0.22

2. Average sales per unit 20 2622 25 23

3. Income per month 26,000 28,00022,000 29,000 27,000

8.1.1Cash flow statement

The amount of the cash inflow and cash outflows is estimatedon the basis of the product sales, the inventory sold to thecustomers and the availability of the inventory in the shop.

Cash inflows

OtherIncome/Sales

8,000

8,000

6,000

8,000

8,000

Total Cash Inflow

8,000

10,640

11,280

15,260

15,260

Cash outflows

Accts. Payable 8,000 8,000 6,000 8,000 8,000

Accts. Payable Operating Expenses 5,319

5,119 4,919 4,619 4,619

Taxes

10,000 8,000 9,000 11,000 12,000

Other Expenses

- - - -

-

Basis

Jan

Feb

Mar

Apr

May

Collection ofA/R

  2,640

5,280

7,260

7,260

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

Ending Cash

6,196 7,048 9,900 10,752 13,764

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 Year 1 Year 2 Year 3

SalesRs.513,5

03

Rs.599,4

03

Rs.609,4

02

Direct Cost of

Sales

Rs.204,8

20

Rs.237,5

20

Rs.239,8

96

Total Cost of

Sales

Rs.204,8

20

Rs.237,5

20

Rs.239,8

96

Gross Margin Rs.308,6Rs.361,8Rs.369,5

83 83 07

Expenses

Advertising Rs.4,800Rs.4,800Rs.4,800

Depreciation Rs.4,889Rs.4,889Rs.4,889

Start-up costs Rs.5,500Rs.5,500Rs.5,500

Education &

trainingRs.1,200Rs.1,500Rs.2,000

Workman's

compensationRs.3,372Rs.3,500RS.3,600

Insurance -

propertyRs.6,204Rs.6,200Rs.6,300

License & permits Rs.110 - -

Maintenance - shop Rs.2,400Rs.2,400Rs.2,400

Marketing Rs.9,600Rs.10,00Rs.10,00

0 0

Miscellaneous Rs.3,600Rs.3,600Rs.3,600

Postage & Delivery Rs.600 Rs.600 Rs.600

Prof fees -

accountingRs.1,500Rs.1,500Rs.1,500

Prof fees - legal Rs.1,000Rs.500 Rs.500

Repairs Rs.600 Rs.600 Rs.600

Supplies - shop Rs.4,200Rs.4,200Rs.4,200

Telephone Rs.1,440Rs.1,440Rs.1,440

Utilities Rs.2,100Rs.2,100Rs.2,100

Employee benefits Rs.9,000Rs.9,100Rs.9,100

Other Rs.2,400Rs.2,400Rs.2,400

Total operating

expenses

Rs.248,8

76

Rs.251,4

90

Rs.268,0

65

Profit Before

Interest and Taxes

Rs.59,80

6

Rs.110,3

93

Rs.101,4

42

EBITDARs.64,69

6

Rs.115,2

82

Rs.106,3

31

Interest Expense Rs.6,753Rs.5,963Rs.5,138

Taxes IncurredRs.15,91

6

Rs.31,32

9

Rs.28,89

1

Net ProfitRs.37,13

7

Rs.73,10

1

Rs.67,41

2

Net Profit/Sales 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 isindependently wealthy and looking for a hobby, he or shewill need to find financing for the new business. Financinga small retail business can take make forms and may includea variety of funding sources to cover the initial costs ofopening and operating the business. Banks and governmentlending institutions such as the Small BusinessAdministration (SBA) typically require a personal investmentby the business owner showing a willingness to share theburden of risk with the lender. Even franchises that offerin-house financing for new franchise operators require a

percentage of the initial investment to come from thebusiness owner. The savings and personal lines of creditfrom previous employers often are tapped to cover thepersonal 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 theirown. With a little research it will find a number of placesor individuals that are willing to put money into newbusinesses. Trying to stay away from high interest loansituations and look for grants and smaller donations thatwill be straight forward to pay back. It may have familythat 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 governmentor non-profit organization, the question of tax effects onthe business case is non-issue. For tax-paying companies,however, it is an important question. The results of "beforetax" and "after tax" business cases can look quitedifferent.

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 capitalassets, tax savings from depreciation can operate toincrease overall cash flow. Depreciation expenses themselvesdo not contribute to cash flow, they are an accountingconvention that impacts reported income, but not a real cashoutflow. However, the depreciation expenses lower reported

income, they also lower the tax liability, which does impactreal cash flow.

8.6 Potential risk and source of protection

The process of identification, analysis and eitheracceptance or mitigation of uncertainty in investmentdecision-making. Essentially, risk the occurs anytime aninvestor or fund manager analyzes and attempts to quantifythe potential for losses in an investment and then takes theappropriate action (or inaction) given their investmentobjectives and risk tolerance. Inadequate risk managementcan result in severe consequences for companies as well asindividuals.

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 themarket.

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 watchingcustomers directly by workers and let the salespersons paymore attention to introduce the commodities and increasetheir shopping desire.

That can create a better psychological circumstance toincrease 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 thismarketing plan is presented in the table. This includes thepromotion schedule and evaluation and control activities. Anevaluation of the ongoing business will be conducted on aquarterly basis as well as a more detailed evaluation at theend of the year. A risk assessment will be conducted as partof 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 ( part-time)

- - -

Liaise with the localgovernment

- - - - -

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

Salary of pat-time workers

- 1,000

1,000

1,000

1,000

Quality assessment ofproducts

Medium and low

medium

medium

medium medium

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.