The X apparel shall concentrate on selling latest products (in-store and online) & providing fashion experts suggestions the first-year revenue will be 480 K (140 K in-store + 120 K online) and the next year revenue shall rise from the present level of 400K (achieved over six months with only a part-time effort) to at least 520 K in the first year, 625 in the second, and 700 in the third. To assist this growth, our vice president has identified some very talented fashion experts &garments providers and has already started negotiating with them. Selling between 160 to 170 items in a day, which included in-store and online purchases, will allow the business to make a substantial profit in Year One. By Year Two, post-tax profits should be $150,000 and will increase to nearly $290,000 by Year Three.
|PROFIT AND LOSS FORECAST|
|Cost of sales||0||320,000||375,000||460,000||50000||525,000|
|Premises (rent, rates)||18,000||18,000||18,000||18,000||18,000|
|Wages and salaries||8,000||10,000||12,000||14,000||16,000|
|Sales and Marketing||18,000||20,000||22,000||24,000||26,000|
|Postage and Telephone||1,650||1,850||2,150||2,500||3,000|
|Repairs and Maintenance||2,500||2,750||3,000||3,200||3,500|
|Website Development Expenses||35,000||35,000||35,000||35,000||35,000|
|Profit before tax||9,900||11,050||23,250||24,000||25,750|
|Tax @ 30%||2,970||3,315||6,975||9,000||11,567|
|Profit after tax||6,930||7,735||16,275||19,000||21,500|
|Transfer to reserves||9,900||11,050||23,250||24,000||25,800|
X Apparel believes that by concentrating on the majority of the population and one geographic destination, it will be able to deliver results that are superior to anything currently available in the market. Published research shows that Fashion clothing is a very fast-growing business sector and that the United States is the best foundation to start with and finally become known across the globe. Starting this Business from Boston will help in growing the business across all different states, and most of the population consists of a student who has large networks than any other individuals.
The company is also going to force the staff to wear the latest trend for clothes from the store so customers can see how good they will look after wearing them. Furthermore, it will be giving a 30% discount to our staff members on all their orders, so they get the extra benefit of staying with the organization. The business will also be running a very BIG marketing campaign of 50 free shipping, according to which if a guest buys anything from the online website worth more than $50, we will waive off the shipping charges for the least expensive shipping method available to their address. The marketing department will also be running some promotions occasionally to attract more guests to the store and online shopping.
Currently, all the other brands that are out there in the market do not have a good variety of latest trends, and Fashion exerts advice service; moreover, they tend to focus more on the age group between 25-35 years old. There is also another ample opportunity we have here is to develop the online website and provide all the variety and trends to the consumers with a user-friendly interface. To build and maintain a very excellent reputation in the market, we have a robust plan to develop a unique website and furbish the shop premises. By taking advantage of the increased social media focus, the hopes to ride on that and market itself. It has set aside funds to advertise itself in the various media channels. It will also have the pamphlets that it aims to give to potential customers. Its strategy to use equity financing as opposed to debt financing will also enable the company to avoid unnecessary debt expenses that can curtail its growth in the early stages of the business. Most of the consumers research online before they make decisions to purchase a tire. They research about pricing as well as brands. Consumers are more empowered when making buying decisions because of the readily available search engines. (Marzouk, Linsley, &Verma, 2017). Thus the retailer must be smart with the way they interact with the customers. Apart from utilizing the marketing tools to reach out to the buyers in a more targeted approach, the company can provide the buyers with the tools that they may not need even though they expect. About half in-store tire purchasers begin by looking for the company’s website.
As a wholesaler, the company must have an attractive site that presented the various bands on offer. There should be comparisons with the other brands, customer testimonials, interactive features, and HD images. The website should accommodate mobile devices since it is likely for the purchaser to access the site using a mobile device instead of the desktop. Services from SEO professionals must be employed to ensure an active life online for the website. The SEO experts increase traffic to the site by providing the website content to show up in searches. Email and text reminders are the main factor in the social market plan. Collection o phone numbers and email addresses from the clients will allow the tire attendant to reach out to the customers. Nonetheless, even though email marketing is cost-effective, one must not take advantage of personal information.
A person who wants to buy the stocks of the company parts can estimate the value of the company’s stock and the going concern by looking at the current ratio, debt to equity ratio and the quick ratio. If owner’s equity mostly finances a company as compared to debts, the company is more stable as it will have minimal obligations in terms of debt repayments hence cash arising from operations can be used to fund the firm’s growth (Winfree et al., 2018). The business parts balance sheet will enable it to secure funding from banks and other financial institutions in the future if need be basing on its financial position as articulated in the balance sheet.
Marzouk, M., Linsley, P., &Verma, S. (2017). A Critical Review of Risk Reporting in Financial Statements.
Winfree, J. A., Rosentraub, M. S., Mills, B. M.,&Zondlak, M. P. (2018). Financial Statements, Revenues, and Costs. In Sports Finance and Management (pp. 72-95). Taylor & Francis.