Bella Flats

Bella Flats“Convenience has never

been so beautiful”Amos Ng

Linda Lee Michelle Chin Rebecca Carchidi

To the Bank of Mom&Dad

Bella Flats

Competitive Analysis

Market Strategyand Analysis

Operations andManagement

Financials

Risk Mitigation

Conclusion

Bella Flats

What we want: $14,944

What for? 2 terms of schooling for the

price of 1! But most importantly,

EXPERIENCE!

Bella Flats




Financials

Risk Mitigation

Conclusion

Bella Flats

Bella Flats




Financials

Risk Mitigation

Conclusion

Bella Flats


Bella Flats




Financials

Risk Mitigation

Conclusion

Industryo Rising trend of increasing spending

on footwear by consumers from 2004 to 2009 (Market Research Institute GMID)

2004 2005 2006 2007 2008 20090

1000

2000

3000

4000

5000

6000

Consumer Expenditure on Footwear


Bella Flats




Financials

Risk Mitigation

Conclusion

IndustryoEdmonton – most affluent Canadian

province per capitao Large, increasing labour forceo 81, 470 females in Sales in

Services(StatsCan, 2006)

Bella Flats




Financials

Risk Mitigation

Conclusion


Bella Flats’ Competitors

Damn Heels Dr. Scholl’s Fast Flats

Bella Flats




Financials

Risk Mitigation

Conclusion


Damn Heelso Canadian companyo Foldable flats in small compact

cubeo Only available in 3 colorso Does not include clutcho $20 (not including shipping)o Only 2 locations in Edmonton

Bella Flats




Financials

Risk Mitigation

Conclusion


Dr. Scholl’s Fast Flatso Only comes in blacko Available only in few local

drugstoreso Includes a small gold clutcho Does not include anywhere to carry

high heels

Bella Flats




Financials

Risk Mitigation

Conclusion


Bella Flats’ Competitive Edgeo Offering more colorso Easy access for customerso Reasonable priceo Packaged in a trendy clutcho Includes foldable bago Impulse buyo Modern and trendy styles and colors

Market Strategy & Analysis

Bella Flats




Financials

Risk Mitigation

Conclusion

Market Segmento Females in Edmonton Alberta

1996 2001 2006 2011 20160

100,000

200,000

300,000

400,000

500,000

600,000

700,000

431,298468,922

520,915 573,527

631,453

Fem

ale

Popu

latio

n

Year Stats Can, 2006


Bella Flats




Financials

Risk Mitigation

Conclusion

Target Marketo Edmonton Alberta Femaleso Ages 15-39

Non-target market

64%

Tar-get Market36%

Bella Flats




Financials

Risk Mitigation

Conclusion


• Age: 15-24• Population size: 78,535• 15.1% of Market

Segment

Students

• Age: 25-39• Population size:

110,980• 21.3% of Market

Segment

Workers


Bella Flats




Financials

Risk Mitigation

Conclusion

Target Market #1 - Studentso 15-24 years old, 15% of market

segmento High school, university/college,

newly entering the labour force o Fashionable and trendyo Includes 18 year olds who are more

likely to frequent clubs and bars

o Higher portion of disposable income

Bella Flats




Financials

Risk Mitigation

Conclusion


Target Market #2 - Workerso 25-39 years old, 21.3% of market

segmento Already part of labour forceo Professional, yet conveniento More frequently attend special eventso Large disposable income


Bella Flats




Financials

Risk Mitigation

Conclusion

Surveyo Surveyed 100 females living in

Edmonton, Albertao Approx. 60 females between ages

15-24o Approx. 40 females between ages

25-39


Bella Flats




Financials

Risk Mitigation

Conclusion

Survey

2-3 times a week42%

2-3 times a month45%

2-3 times a

year10%

Never2%

o 99% wear high heels on special occasions and events (i.e. Clubs, bars, weddings)

o 100% experienced pain from wearing heels

SurveyMonkey.com


Bella Flats




Financials

Risk Mitigation

Conclusion

Marketing Strategy

SurveyMonkey.com

Free for consumer access:

o Facebook & Twittero Promotional Posterso Websiteo Metro, 24 hourso SEE magazine

Operations & Management

Bella Flats




Financials

Risk Mitigation

Conclusion

Geographical Locationo Retail Kiosk: Edmonton, Albertao Young, Affluent workforce

Suppliero Supplier: Shenzhen, Guangdong

(China)o Cheap manufactured products,

International Porto “Shenzhen Free Trade Zone”

tax relief


Bella Flats




Financials

Risk Mitigation

Conclusion

Operating Cycle

o Spring/Summer fashion trend

o Year 1&2: May – August (4mths)

o Subsequent Years: March – October (8mths)

o Website Orders, all year round


Bella Flats




Financials

Risk Mitigation

Conclusion

Facilities and Improvementso Kiosk at WEMo Spring/Summer (May, Jun, Jul, Aug) o Expansion to Southgate in Year 4

Storageo Inventory stored privatelyo Bi-weekly inventory count


Bella Flats




Financials

Risk Mitigation

Conclusion

Facilities and Regulationso “General Business” licence required

($194 /year)o “General liability insurance”

($1,000/year)

Day to day Operationso Opening shift: Open kiosk, check stocko Closing shift: Balance payments and stock

o Website Orders – Daily fulfilmentFREE delivery within Edmonton


Bella Flats




Financials

Risk Mitigation

Conclusion

Compensation and Ownershipo Partnership of four,

Equal Ownership and Profits

Bella Flats




Financials

Risk Mitigation

Conclusion

Financials

1 2 3 4 5 6 7 8 9 100

50000

100000

150000

200000

250000

300000

Revenues and Costs

Revenue CostsYear

Dol

lars

FinancialsBella Flats




Financials

Risk Mitigation

Conclusion

Start-up costso $14,944 to cover first month, or

$3,736/family

Profit after summero $24,704 total profito $6,176 per family

Second yearo $31,927 total profito $7,982 per family

Bella Flats




Financials

Risk Mitigation

Conclusion

Financials

1 2 3 4 5 6 7 8 9 100

50000

100000

150000

200000

250000

300000

Revenues and Costs

Revenue CostsYear

Dol

lars





Financials

Risk Mitigation

Conclusion

Year 3:o Making $41, 395.46 total

Year 4:o Expansion to Southgateo Total costs = $193, 343.11

Bella Flats




Financials

Risk Mitigation

Conclusion

Financials

1 2 3 4 5 6 7 8 9 100

50000

100000

150000

200000

250000

300000

Revenues and Costs

Revenue CostsYear

Dol

lars





Financials

Risk Mitigation

Conclusion

Year 3:o $22, 280/family for costs of

$89,121.12 Making $47, 375.81 total

Year 4:o Expansion to Southgateo Total costs = $173,190.51

Bella Flats




Financials

Risk Mitigation

Conclusion

Financials

1 2 3 4 5 6 7 8 9 100

50000

100000

150000

200000

250000

300000

Revenues and Costs

Revenue CostsYear

Dol

lars

Bella Flats




Financials

Risk Mitigation

Conclusion

FinancialsAssumptions Year 0 1 2 3 4 5 6 7 8 9 10Start-

up Cost

$ 9,060

Start-up Cost

$ (9,060)

Tax Rate 30% Revenue

$ 66,970

$ 71,796

.9

$ 136,496

.9

$ 255,284

.8

$ 260,312

.5

$ 265,440

.8

$ 270,671

.7

$ 276,007

.2

$ 281,449

.4

$ 287,000

.4 Discount

Rate 10% Expense

s -$

40,887 -$

35,375 -$

89,121 -$

173,191 -$

173,999 -$

175,187 -$

176,397 -$

177,633 -$

178,892 -$

180,177

Gross Cash Flow

$ (9,060)

$ 26,084

$ 36,422

$ 47,376

$ 82,094

$ 86,313

$ 90,254

$ 94,274

$ 98,375

$ 102,557

$ 106,823

Tax $

(7,825)

$ (10,92

7)

$ (14,213

)

$ (24,628

)

$ (25,894

)

$ (27,076

)

$ (28,282

)

$ (29,512

)

$ (30,767

)

$ (32,047

)

After Tax

Cash Flow

$ (9,060)

$ 18,259

$ 25,495

$ 33,163

$ 57,466

$ 60,419

$ 63,178

$ 65,992

$ 68,862

$ 71,790

$ 74,776

Present Value

$ (9,060)

$ 16,599

$ 21,070

$ 24,916

$ 39,250

$ 37,516

$ 35,662

$ 33,864

$ 32,125

$ 30,446

$ 28,829

NPV $

130,291

Risk MitigationBella Flats




Financials

Risk Mitigation

Conclusion

Possible Major Problems

o Delays in Delivery (Guangdong, China)

o Quality and Reliabilityo Lack of confidence, leasing Kiosk to

an“untested product”

o Insufficient Monthly Sales (need to cover overheads)

o Demand may decline during Winter

Risk MitigationBella Flats




Financials

Risk Mitigation

Conclusion

Plans to Minimize Risks

o Promotions, advertising (University, clubs)

o Posters & flyers to increase awareness

and saleso Reserve stock stored in Edmontono Order additional stock when

inventorydrops below 20%

ConclusionBella Flats




Financials

Risk Mitigation

Conclusion

ExperienceExperience

……

Experience!

Questions&

AnswersAmos Ng Linda Lee Michelle Chin Rebecca Carchidi

Appendices - Main

Marketing

Competitor Information

Operations

Financials

Appendices - Marketing

Poster Advertisement

Website

Shoe Size Chart

Appendices – Competitors

Damn Heels

Dr. Scholl’s Fast Flats

Appendices - Operations

Tentative Work Schedule

Other Suppliers

Appendices - Financials

Costs

Breakeven

Year 2

Objective Sales

Appendices - Costs

Unit Costs

Variable Costs

Revenue, Costs & ProfitsStart-up Costs

WEM & Web Fixed CostsSouthgate Fixed Costs

Appendices - Breakeven

Breakeven Chart

Breakeven Point

Appendices - Website

Appendices – Poster Ad

Appendices – Shoe Size

5 6 7 8 9 100%5%

10%15%20%25%30%35%40%

6%

15%

34%29%

13%

3%

Shoe Size Survey Results

Shoe Size

21%

63%

16%

Chart Title

Large (9&10)

Bella Flats Size Chart

Small (5&6)

Medium (7&8)

Appendices – Damn Heels

MUD Studio12403 Stoneplain Rd,

EDMONTON, AB708 482 2004

www.mudstudio.com

Michele's Centre Cafe9797 Jasper Ave,EDMONTON, AB

http://www.mudstudio.com/

Appendices – Fast Flats

Shoppers Drug MartLondon Drugs

http://www.drscholls.ca

MON TUE WED THU FRI SAT SUN

Morning

ShiftOpenin

g

9:30AM-

5:30PM

9:30AM-

5:30PM

9:30AM-

5:30PM

9:30AM-

5:30PM

9:30AM-

5:30PM

9:30AM-

5:30PM

10:30AM-

5:30PM

Evening

ShiftClosing

4:30PM-

9:30PM

4:30PM-

9:30PM

4:30PM-

9:30PM

4:30PM-

9:30PM

4:30PM-

9:30PM

4:30PM-

9:30PMN/A

Location: West Edmonton Mall (Kiosk)

Appendices – Work Schedule

Appendices – Other Suppliers

Appendices Revenue, Costs and Profits

Year Revenue Costs Profit1 $ 66,970.32 $ 40,886.59 $ 26,083.73 2 $ 71,796.85 $ 35,375.05 $ 36,421.80 3 $ 136,496.93 $ 89,121.12 $ 47,375.81 4 $ 255,284.78 $ 173,190.51 $ 82,094.27 5 $ 260,312.53 $ 173,999.38 $ 86,313.15 6 $ 265,440.83 $ 175,186.52 $ 90,254.31 7 $ 270,671.70 $ 176,397.40 $ 94,274.30 8 $ 276,007.19 $ 177,632.50 $ 98,374.69 9 $ 281,449.38 $ 178,892.30 $ 102,557.08 10 $ 287,000.42 $ 180,177.29 $ 106,823.13

Appendices – Start-up Costs

Item Quantity Cost/q Price*Shoes 2000 $2 $4,000Shoes Shipping 2000 $0.30 $600*Clutches 5000 $0.60 $3,000Clutch shipping 5000 $0.30 $1,500Website hosting 1 $5 $5Kiosks 1 $5,000 $5,000Business License 1 $194 $194Printing Calculator 1 $55 $55POS machine 1 $300 $300Moneris contract 1 $35 $35Office Supplies budget 1 $25 $25Advertising budget 1 $200 $200gas budget 1 $30 $30Total - - $14,944

*Supplier requested a minimum purchase order of 2000 pairs**Supplier requested a minimum purchase order of 5000

clutches

Appendices – Unit Costs

Item Costs Footwear $

2.00 *Shipping (per pair of footwear) $

0.30 Clutches $

0.60 *Shipping (Per clutch) $

0.30 Inventory cost/unit $

3.20 Retail price (468% markup) $

14.99 Retail price + 0.05% tax

(Transaction price) $

15.73 ***Moneris service charge (1.72% of

transaction price) $

0.27 Proceeds from sales of one unit $

11.51

*Shipping was calculated based on supplier’s quote of cost pertaining to $2,000/600 pairs of foot wear**Based on similar weight of clutch and footwear, shipping was assumed to be about the same cost***Moneris charges 1.72% of credit card transactions, as it is impossible to estimate the amount of customers purchasing through what medium, it is assumed all customers use credit cards for simplicity reasons.

Appendices Variable Costs

Appendix 6 - Variable Costs

Item cost/product sold

Inventory cost $3.20

Moneris service charge $0.27

Total $3.47

Appendices – Monthly WEM and Website Fixed Costs

Quantity Cost/Q CostKiosk 1 $5,000 $5,00

0Website Hosting 1 $5 $5

Moneris monthly contract 1 $35 $35Office supplies budget 1 $25 $25

Gas budget 1 $30 $30Advertising budget 1 $200 $200

$5,295

Appendices Southgate Fixed Costs

Months PriceInsurance 12 $1,000.00

Office Supplies Budget 8 $25.00Kiosk rentals 8 $30,240

Hired help (for 73.75 hours/week*34.7weeks

8 $24,951.47

TOTAL $56,216.47

Note: $355 is added to the first year of operating in Southgate Mall to cover equipment costs

Breakeven point = Fixed costs/(retail price-variable costs)

=$14,9441/(14.99-3.47)= 1,298 units.

1Startup costs were used instead of yearly fixed costs since breakeven point occurs in the second

month

Appendices Breakeven Point

Appendices Breakeven Chart

year 1 month weeksunits sold revenue costs profits

Kiosks May

4.33

1,074.67

16,109.25

14,743.99

1,365.26

June

4.33

1,074.67

16,109.25

8,533.93

7,575.32

July

4.33

1,074.67

16,109.25

8,533.93

7,575.32

August

4.33

1,074.67

16,109.25

8,533.93

7,575.32 Websit

e - 17.33

52.00

779.48

166.40

613.08

Total-

24,704.30 24,704.30

School sales

Sept-Nov 13 117

1,753.83

374.40

1,379.43

Appendices – Year 2

year 2 month weeksunits sold revenue costs profits

Kiosks May

4.33

1,096.16

16,431.44

8,602.71

7,828.73

June

4.33

1,096.16

16,431.44

8,602.71

7,828.73

July

4.33

1,096.16

16,431.44

8,602.71

7,828.73

August

4.33

1,096.16

16,431.44

8,602.71

7,828.73

website - 17.33

52.00

779.48

166.40

613.08 total

31,927.9

9

66,505.23

34,577.25 31,927.99

7,982.00

school sales month weeks

units sold revenue costs profits ttl costs

35,374.0

5

Sept-Nov

13.00

117.00

1,753.83

374.40

1,379.43 ttl rev

71,796.8

5 jan-

march 11.00

132.00

1,978.68

422.40

1,556.28

sept-march

34.67

104.01

1,559.11

332.83

1,226.28 total

4,161.99

Appendices – Objective Sales

Day(s) Hours Total hours

Monday-Saturday 10:00AM-9:PM 11

Sunday 11:AM-5:P.M. 6

Days sales goal in units Revenue Monday-Thursday

(22/day)88 $829.08

Friday 30 $345.45Saturday 100 $1,151.50Sunday 30 $345.45

Website sales (weekly) 3 $34.54 Total 235 $2,671.47

Documents

Bella Flats