INTRODUCTION OF BUSINESS PLAN

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.

Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community.

Business plans may be internally or externally focused. Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach the goals. With for-profit entities, external stakeholders include investors and customers. External stake-holders of non-profits include donors and the clients of the non-profit's services. For government agencies, external stakeholders include tax-payers, higher-level government agencies, and international lending bodies such as the IMF, the World Bank, various economic agencies of the UN, and development banks.

Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization. An internal business plan is often developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures. Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans.

Operational plans describe the goals of an internal organization, working group or department. Project plans, sometimes known as project frameworks, describe the goals of a particular project. They may also address the project's place within the organization's larger strategic goals.

Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan represents all

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aspects of business planning process; declaring vision and strategy alongside sub-plans to cover marketing, finance, operations, human resources as well as a legal plan, when required. A business plan is a bind summary of those disciplinary plans.

For example, a business plan for a non-profit might discuss the fit between the business plan and the organization’s mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization’s ability to repay the loan. Ventures are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project requiring equity will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.

Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.

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OVERVIEW OF INDIAN LINGERIE INDUSTRY

The lingerie industry has covered a long distance from its initial days where the purpose of intimate apparel was totally different from what it is today. The credit of this metamorphosis of the entire industry indeed goes to technology and innovations.

At present, lingerie as a product category has a wide product base to offer, while innovative developments serving as its backbone. Modern consumers have an array of products to choose from that cover all possible aspects of fashion and styling to fabric and high finishing.

The fact that women’s dresses have always reflected the dynamic changes in society cannot be negated easily. And as the Indian women are coming of age, the statement holds special significance when talking of their attire.

Financial freedom is one of the top priorities of Indian women, especially in the urban cities and with financial freedom comes the choice of leading a lifestyle that suits ones tastes and preferences. Women like to wear expensive jewellery, carry high-end gadgets and buy apparel and footwear that make them look good, feel comfortable and also exude their style statement in a subtle way.

When it comes to enquire about innerwear or lingerie, the faces that use to give a shy and ‘do not cross your limit’ looks have turned less aggressive and more argumentative. Indian women now prefer to talk about their innerwear to people who can help offer them the products they are looking for.

However, the scene was extremely different few years back when women were in the sole discretion of salesmen who used to decide about the piece of lingerie – size, fit and brand that are suitable for them.

Indian women consumers are still very shy when it comes to the purchase of lingerie. But slowly and steadily, they are getting bolder in terms of selection of their lingerie and as a result they have started demanding lingerie of their choice, which is in effect helping the growth of branded lingerie in India.

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Times have changed now and for the good. With factors like growing number of working women, changing fashion trends, rising information level and media exposure, and the foray of famous foreign brands in the Indian market, Indian women have become more conscious about the range of brands that should fill their wardrobes. The old practice of stacking lingerie in a corner of wardrobe no longer exists in the modern age. Rather, the taste of women related to their undergarments has reached new heights and it will not be a hyperbole to say that it has become a fashion statement.

The reasons behind this metamorphosis signals towards the following trends, the main among them being the changing attitude of women towards their innerwear:

• First, the outerwear for women have undergone a tremendous change in the recent past –from salwar-kameez and saris to denims and t-shirts and feminine tops, especially in the   urban areas.

• An increasing number of female demography is entering professional lives where they need   different outerwear for office, parties and recreation, as a result of which; they opt for   innerwear that matches the outerwear.

• Third, women are getting more conscious of their health and physique – a phenomenon   increasingly witnessed with the sprawling gymnasiums in the neighborhood basements. It is   the fitness factor which has given rise to the sales of sports brassieres and briefs that suit the   sporting activities of women.

• Last, but not the least, special occasions like a marriage ceremony or social gathering calls   for a different outerwear and a matching innerwear.

Size and growth of Indian lingerie industry

All the mentioned factors have increased the growth rate of the Indian lingerie industry in the last five years. From being a market worth Rs. 870 crores (US$196 million) in 2003, the organized lingerie market has almost doubled to Rs. 1645 crore (US$370.3 million) bustling business in the last five years, according to the findings of the report titled “Indian Lingerie Industry: Trends and Opportunities” by Koncept Analytics, a research and consulting firm.

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Value of lingerie market in India: 2003-2007

Source: Koncept Analytics

Trade analysts and industry insiders are of the view that the notable rate at which the overall industry is growing results from the beyond recognition improvement of the Indian market during the last five years after the advent of multinational brands in the country and the growth of organized retail. Perhaps this is the reason why the premium and super-premium segment of the lingerie industry, with brassieres priced above Rs. 200 (US$5) and mostly characterized by the presence of international brands, are witnessing higher growth compared to mid-market and low/economy segments.

The current situation of the Indian market signals towards the premium and super-premium segments of the industry as the major growth segments. Despite of being the smallest segment in the overall lingerie industry, the premium segment has been growing at a compound annual growth rate (CAGR) of 35% in the last five years and is advancing following a consumer shift from economy and mid-market segments to the premium segment.

The low and economy segment, however, is growing in terms of volume and value from the industry being more organized.

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The premium segment is characterized either by international brands or joint venture of Indian manufacturers with international companies. Brands like Lovable, Enamor and Triumph have successfully made place for themselves in the premium lingerie segments, while other premium lingerie brands like Etam, Benetton, La Perla and About U are on an expansion spree.

Indian women: Looking for a perfect shopping ambience

Growth of the organized retail sector has fueled growth of the lingerie industry as the share of the former has increased from 3% in 2004 to 5.9 percent in 2007 in the Indian market. The South India-based lingerie manufacturers gained more in this scenario as organized retail has existed in the region for a long period of time compared to other regions. Besides a strong preference for the premium lingerie brands, especially by the upper middle class and higher class women, the majority of women look for specific features in an outlet where they can comfortably shop for their innerwear.

Among the common set of features that women in the urban centers look for in a lingerie shop include:

• Availability of multiple brands under one roof

• Convenience of shopping for female consumers

• Trial rooms

• Comparison of different brands in terms of price, quality and fitting

• More choices of colors, fits and prices

• Personalized shopping experience

With technology driving each industry today, a category like lingerie cannot be far behind in delving into the latest trends and innovations that meet the needs and desire of a woman.

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Innovative fabrics providing comfort and fit

Gone are the days when lingerie came in simple and plain forms of cotton. A pure luxury like lingerie is the end-product of a number of fabrics and embellishments woven together to create that marvelous effect, be it the fabric, the linen, the thread, the foam, the moulds or the elastic.

In the current market place, there are several technically developed fabrics that include lycra, satin, hosiery, net, etc. Viscose fiber is one of the main achievements of the lingerie industry in developing a fabric which offers great comfort and perfect fit.

In India, the cities of Mumbai, Bangalore, Delhi and Tripur house the majority of manufacturing units for lingerie/underwear with multinational units having their manufacturing base at Bangalore and Mumbai.

• The foreign brands like Enamor (joint venture with Gokaldas Images) and Jockey (licensed   by Page Industries) have established their manufacturing facilities in Bangalore.

• Lovable, a lingerie brand bought by Maxwell Industries from Sara Lee, also has its   operations in Bangalore.

• Groversons and BodyCare are based in Delhi whereas Maxwell Industries (Vanity Fair,   Daisy Dee and other brands) is based in Mumbai and has units at Bangalore and   Coimbatore.

These manufacturers generally source lingerie fabric from South East Asian countries like China and Thailand or European countries. Chinese imports are cost effective for Indian manufacturers as Chinese imports are 30%-40% cheaper compared to European imports, but it requires the Indian companies to compromise in terms of quality and creativity. It is also marred by damaged or defective fabric.

High-quality fabric for lingerie and innerwear in India comes from European countries. European companies like the Italian firm Carvico SpA is known for its warp knit fabrics whereas Jersey Lomalina, another Italian company, is one of the best producers of circular knit fabrics. Similarly Simplex Knitting, a UK-based company is one of the world’s largest producers of simplex fabrics

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and Wiley Hermann, an Austrian company is known for manufacturing circular knit fabrics.

Embroidery machines adding glamour quotient

One of the main innovations in the field of lingerie manufacturing is of embroidered lingerie. As embroidered lingerie came into the limelight, manufacturers realized the need to develop the kind of technology which not only serves the purpose of decorating the product but which is capable of avoiding puckering and pulling of the delicate fabric of a lingerie piece.

The R&D efforts resulted in the development of shuttle embroidery machines (like the ones developed by Schifflis, Tajima, Saurer and Lasser).

These multi-head embroidery machines offer automatic multi-color embroidery and achieve the highest degree of precision and performance. 

Following the highly developed embroidery machines, another technology which has undergone development is the steam press system. The machines work on the lingerie, pressing, steaming and heating them so as to create a fine finish that will leave an impression on the end user.

Rivet machines have also become popular in India due to their innovative technology and unbeatable performance. These machines are virtually noise free as they do not make use of a motor or compressor and the equipment includes and inbuilt device that ensures safety of the persons operating the machines.

Steam boilers represent another age of technically developed machinery that offer the highest quality of pressure and operating switches. Such machines are made of stainless steel and in turn minimize corrosion and reduce the need for maintenance, while also being insulated with ceramic wool contributing towards saving energy.

Fusing machines have also garnered much praise and demand in the lingerie industry for offering high quality finishing.

Apart from all this, the market also registers the presence of computerized and production-enhancing features in machines, like automatic color change

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and thread trimming. Frames too have been developed to handle almost every type of embroidered item.

The continuous thirst for innovation has driven the industry to discover more; do the unimaginable and invest heavily in research and development. As a matter of fact, if successful, the technology receives grand welcome from the entire industry.

Therefore in conclusion the idea for an exclusive lingerie boutique (Trѐs Magnifique)  in Hyderbad, India where there is a niche and lucrative market was conceived.

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BUSINESS PLAN OF TRES MAGNIFIQUE

1. EXECUTIVE SUMMARY

Trѐs Magnifique (very beautiful in French), is a new, European influenced exclusive lingerie boutique that will provide high quality lingerie in a wide array of sizes and styles with exceptional customer service.  The 1,300 square foot store will be located in a proven retail area in Banjara Hills, Hyderabad, India where the demographics are suitably upscale, traffic counts are high, and compatible retailers offer qualified traffic and potential referral business. 

Competitive Advantage:The outlets for intimate apparel purchases in Hyderabad are much more limited than markets of similar size.  There are mass merchandisers mass produced and lesser quality brands; department stores that offer better brands, but in limited sizes and with varying degrees of customer service and with untrained store personnel.  There are no exclusive lingerie boutiques serving the upper income class in the Banjara Hills, Jubilee Hills and to some extent Madhapur area. 

Market Potential:The three key target groups of this business plan, based on lingerie spending patterns are: 1. Women 25-59 with a household income of Rs. 75,000 & above.2. Women 18-24

A common psychographic component that Trѐs Magnifique is targeting amongst all three groups is the Intimate Apparel Enthusiast (IAE).  An IAE is a woman who cares enough about her lingerie to want to shop at a specialty store, and is not purchasing her lingerie at Mass Merchandisers.

There are large numbers of potential customers who fit these target descriptions within a ten kilometer radius of our store location, which also captures the surrounding shooping mall’s shoppers for impulse purchases.

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Unique Selling Proposition:

Providing potential customers with exclusive offerings of lingerie that is not available nationally with personalized service and offering a great range of products will satisfy the consumer needs of the customers.

Trѐs Magnifique will be offering a wide range of styles and sizes that she will not find elsewhere in Andhra Pradesh.  The moderate to more expensive lines of lingerie offered by Trѐs Magnifique are known for quality silks, hand finished laces and superior craftsmanship.  Trѐs Magnifique highly trained personnel will get to know each customer's individual needs, and will offer personal bra fitting and other special services.

Leadership and Vision:The sole owner, Shanmuki V.S, brings over of marketing and advertising knowledge through her qualifications which will be a tremendous asset in analyzing the customer and market potential, as well as in implementing a strong marketing plan. She will utilize her negotiating and relationship building skills with vendors and clients. 

Shanmuki V.S will be guided in her inventory management decisions by a lingerie industry professional with years of experience to guide her in the company functioning. The industry professional will serve as a consultant for start-up inventory, inventory management and other operational issues. 

Financial Projections:Trѐs Magnifique expects to produce $439,500 in the first year of operation, with aggressive growth projections of 15% in year two and 17% in year three, fueled by expanded product lines and aggressive marketing.  The store is projected to become profitable during the second year of operation.

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1.1 Objectives

1. To create a shopping environment where women (and men) feel comfortable, pampered and stimulated by the wide array of choices that are available to fill their needs.

2. To utilize superior customer service to create positive word-of-mouth recommendations and repeat sales

To give every customer one-to-one attention. To have 50% of all customers return within six (6) months of their

first purchase.3. To be in the consideration set for all planned Intimate Apparel

Enthusiast (IAE) purchases in Banjara Hills, Jubilee Hills and Madhapur by end of year two.

4. To have first year gross sales of $425,000.5. To grow the business by 15% in year two.

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1.2 Mission

Trѐs Magnifique is a specialty lingerie boutique offering labels, styles and sizes that are currently unavailable in Hyderabad, thereby filling a void that exists between Mass Merchandisers and department store selections. Our mission is to give the discriminating lingerie shopper what she is looking for, whether it is fit, comfort or style, in an atmosphere that is comfortable, exciting and satisfying. We want to create a connection with the Intimate Apparel Enthusiast (IAE) that evokes the feeling that Trѐs Magnifique is "my lingerie store."

1.3 Keys to Success

1. Offer superior quality products with cutting edge designs that are not available in other outlets in the Hyderabad market. 

2. Secure a great store location that offers high customer traffic for impulse purchases caters to desirable demographics includes compatible stores (e.g.  Bridal, women's apparel), and is in an easily accessible, known destination.

3. Understand Trѐs Magnifique target customer to ensure that the correct product mix is available to meet their needs.

4. Offer an assortment of sizes (especially in the larger sizes to meet the needs of the growing plus size market).

5. Offer superior, personalized customer service to create favorable word-of-mouth recommendations and influence a high rate of repeat business.

6. Continuously monitor inventory levels, and make adjustments as needed.

7. Educate and advise customers on proper fitting and the quality/value relationship of some of the higher priced (likely European) brands.

8. Offer a variety of price points so that customers do not feel intimidated by the higher priced offerings.

9. Change in-store and window displays frequently to increase impulse purchases, creating the belief that there is always something new at Trѐs Magnifique.

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2. BUSINESS DESCRIPTION

Trѐs Magnifique is a European influenced lingerie boutique offering quality merchandise and personalized service to Intimate Apparel Enthusiasts (IAEs).  It is scheduled to open this September in a 1,300 square foot store will be located in a proven retail area in Banjara Hills, Hyderabad. 

2.1 Hours of Operation

Exact hours of operation are to be determined.  We plan to follow schedules similar to the other women's apparel retailers in the shopping centers around the located area.  Additionally we will be sensitive to holiday hours and special group opportunities to maximize our exposure and sales potential.

2.2 Company OwnershipTrѐs Magnifique will be formed as a privately held S corporation in the country of India. The company is owned by Shanmuki V.S, who is qualified in marketing and advertising with a specialty in the retail industry.  Shanmuki V.S will work full time as an owner/operator, responsible for running the business, sales and buying. She will be assisted by a 3/4 time store manager and part-time salespeople.

2.3 LocationLocation is a critical element to any retail business.  The right location is paramount to the success of a lingerie boutique since a large share of sales will likely be derived from impulse purchases and influenced by neighboring store traffic.  While it should be possible, and is definitely desirable, to build Trѐs Magnifique into a destination location for lingerie purchases, a location with high foot traffic will contribute to strong awareness and impulse purchases. Many locations were considered for Trѐs Magnifique with the following criteria in mind:

1. Desirable demographic composition2. Strong foot traffic3. Complementary retailers

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4. Open-air mall or neighborhood center vs.  strip mall or indoor mall

5. Successful retail reputation6. Relatively easy access via primary streets

Fortunately, Banjara Hills area offers many neighborhoods with upscale demographics.  This bodes well for a store like Trѐs Magnifique which is selling the type of lingerie that is a desired luxury rather than a necessity.  We are very fortunate that within one of the best neighborhoods in the Hyderabad metro area, we have found the perfect location for Trѐs Magnifique at Banjara Hills.

Located in the heart of Banjara Hills, Hydrabad, one of the wealthiest places in the state offers the perfect mix of boutique retailers and customers for Trѐs Magnifique.

Not only does Banjara Hills area offer ideal demographic composition, but it offers high traffic volume as well.  More than 5, 00,000 people live within 10 Kilometer radius of Banjara Hills.  It is from another highly trafficked mall, GVK one, and is within a few blocks of City Center Mall, which employs approximately more than 10,000 people. 

Banjara Hills area features a great mix of specialty stores. Complementary businesses that have the potential of sharing customers with Trѐs Magnifique include a number of women's apparel shops in GVK One and City Center Mall. The Banjara Hills area has some popular restaurants that help to maintain high traffic counts.

2.4 Start-up Summary

Start-up expenses and proposed financing are outlined below. 

Trѐs Magnifique will open with several months of inventory.  The majority of the company's assets will reside in inventory. 

The major start-up expenses and acquired long-term assets include Rs. 22, 50,000 in start-up inventory and Rs. 10, 14,750 to build-out the store and prepare it for operations (design, fixtures, lease-hold

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improvements, signage, Point of Sale (POS) system, packaging, supplies, etc.).

Start-up requirements include sufficient working capital to help meet the running costs for the first 2-3 months of operations.

The total start-up requirements are estimated to be Rs. 36, 64,375.  The start-up costs will be financed through a combination of owner

investment, line-of-credit (LOC) and long-term borrowing: Owner's investment Rs.4,89,375 cash Ten year SBA loan Rs.33, 75,000. Short-term Rs.5,62,500revolving line-of-credit for inventory

replenishment and new purchases.

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START-UP

Requirements

Start-up Expenses

Legal Rs. 22,500

Logo, Stationery, Business Cards Rs. 33,750

Utilities & Telephone Rs. 45,000

Packaging/Sacks/Boxes Rs. 56,250

Hangers Rs. 6,750

Business Supplies Rs. 13,500

Real Estate Attorney Rs. 45,000

CPA Rs. 11,250

Grand Opening Event Rs. 6,75,000

Signage Rs. 33,750

POS System Rs. 78,750

Bank Card Machine & Supplies Rs. 9000

Build-out Rs. 3,37,500

Business & Inventory Insurance Rs. 56,250

Travel-Market Buying Trips Rs. 50,625

Other Rs. 0

Total Start-up Expenses Rs. 8,67,375

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Start-up Assets

Cash Required Rs. 4,09,500

Start-up Inventory Rs. 22,50,000

Other Current Assets Rs. 0

Long-term Assets Rs. 3,37,500

Total Assets Rs. 29,97,000

Total Requirements Rs. 38,64,375

Start-up Funding

Start-up Expenses to Fund Rs. 8,67,375

Start-up Assets to Fund Rs. 29,97,000

Total Funding Required Rs. 3,864,375

Assets

Non-cash Assets from Start-up Rs. 25,87,500

Cash Requirements from Start-up Rs. 4,09,500

Additional Cash Raised Rs. 0

Cash Balance on Starting Date Rs. 4,09,500

Total Assets Rs. 29,97,000

Liabilities and Capital

Liabilities

Current Borrowing Rs. 0

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Long-term Liabilities Rs. 33,75,000

Accounts Payable (Outstanding Bills) Rs. 0

Other Current Liabilities (interest-free) Rs. 0

Total Liabilities Rs. 33,75,000

Capital

Planned Investment

Investment Cash--Terry Levine Rs. 4,89,375

Investor 2 Rs. 0

Other Rs. 0

Additional Investment Requirement Rs. 0

Total Planned Investment Rs. 4,89,375

Loss at Start-up (Start-up Expenses) (Rs.8,67,375)

Total Capital (Rs. 3,78,000)

Total Capital and Liabilities Rs. 29,97,000

Total Funding Rs. 38,64,375

2.5 Products

The right mix of products has previously been identified as one of the keys to success for Trѐs Magnifique.  The importance of delivering products that meet the needs and desires of our customers can not be underestimated. 

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Trѐs Magnifique will carry quality European and U.S. labeled products that are unique to the Kansas City market.  Part of the excitement of shopping at Trѐs Magnifique will be that our customers will find merchandise that they will not find anywhere else in Hyderabad.  Our customers may be familiar with some of the brands from shopping on the coasts, on the Internet or seeing them in fashion magazines, but they will not see many, if any, in other local retail outlets. The quality of the products will be evident in the fabric, structure and design.  Trѐs Magnifique’s knowledgeable staff will educate our customers on unfamiliar brands that offer design elements and fit to which they have not previously been exposed.  The depth of brands will enable Trѐs Magnifique to show our customers what will work best for them in terms of size, style, fit, design, fabric and price. Trѐs Magnifique will carry a wide range of prices from moderate to upscale. The QuickBooks inventory management software will allow us to track what is selling on a daily basis, and identify hot performers as well as "dogs." We will also solicit customer feedback and invite suggestions for new offerings. 

We have taken two precautions to establish the right product mix up front.

We have engaged the services of an industry professional who has years of experience

We will hold a Shoppers Focus Group to gain feedback on product offerings, price points, brand awareness and buying patterns of Hyderabad City women.  The focus group will consist of 10 women representing different age groups and lifestyles.

Merchandise Assortment

Bras & Panties:The mainstay of our inventory will be bras and panties.  In order for any woman to feel that Trѐs Magnifique is "her lingerie store," we must be able to meet her needs for basics, as well as special occasion lingerie.  According

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to Women's Wear Daily, bras and panties represented the majority of all intimate apparel sales at 57% of the total dollar volume, and we expect that it will lead the volume for Trѐs Magnifique as well.

Panties have become a particularly hot item over the past couple of years, with a strong consumer demand for fashion coordinates.  Women are stocking up on multiple pairs of panties to match each bra or camisole, knowing that styles are rapidly changing. 

The biggest growth is the boy leg and boy brief silhouette.  The styling appeals to the junior market in colorful prints and appliques as well as the misses market with a lacier model sometimes referred to as a Tanga panty.  Most manufacturers are anticipating another strong season for thongs.

Trѐs Magnifique will have displays that feature a complete array of panty silhouettes including classic briefs, bikinis, hi-cut briefs, boy-shorts, g-strings, v-strings and more.  This will allow customers to mix and match panties with any item, depending on the style they prefer.

Industry resources typically estimate that 7 out of 10 women wear the wrong bra. Trѐs Magnifique will be known for expertise in bra fitting as well as carrying a large range of styles and sizes.  We will stock AA-J cup sizes and band width to at least 48 and possibly higher.  We will special order other sizes as needed.  Prices will range from Rs. 780 to Rs. 3300, with the greatest depth in the Rs.1000 to Rs. 1800 range.

Daywear:The lines continue to blur between innerwear and ready-to-wear with many women choosing to wear their lingerie outside of the home.  Daywear is an important impulse purchase as well as gift-giving item.  Trѐs Magnifique will be well stocked in beautiful camisoles, lacy shells and sleeveless and sleeved tops to inspire special purchases.

Nightwear/At-Home wear:The appetite for comfortable, cocooning clothes has continued to increase post-September 11.  Add to this the increased interest in wellness and exercise that has spurred yoga wear to crossover to street-wear and at-

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homewear, and the advances in softer, multifunctional microfibers that feel great against the skin, and you have a great formula for increased sales in this category. 

According to the NPD Group, the youth market drove the growth of sleepwear and at-homewear in 2002 and 2003.  In the 13-17 and 18-34 age groups, sales rose by double digits, while sales were down by less than 10% for consumers 35 to 54 and 55 or older.  The styles in loungewear are less unkempt, and more flattering.  They have cleaner lines and are more put together, and very acceptable to wear for casual activities outside of the home.

Trѐs Magnifique will offer nightshirts, pajamas, loungewear and robes in mostly lightweight fabrics.  Initially, we will not buy very deeply in this category until we get a better read on what our customers desire.  There are more outlets for these types of products in Kansas City, so we may choose to minimize our offerings in this category, other than during the holiday gift buying season in 4th quarter.

Shapewear and Maternity:Trѐs Magnifique will have minimal offerings in this category, but plans to expand as demand dictates.

Hosiery:We recognize that hosiery can be a great driver for repeat visits, and plan to open with at least one line in year one, and expand this category in year two.  Since hosiery has unique display requirements and lower per unit revenue, we will start slowly in this category and develop this area based on customer demand.

2.6 Product Sourcing & Buying

Our merchandise will be purchased from the top manufacturers in the world, through their regional representatives or direct from the manufacturer. 

Inventory will be tracked and monitored through the QuickBooks POS system.  Basic designs that are kept in-stock by suppliers will be re-ordered on a continual basis, as needed.  Seasonal designs will be ordered several months in advance.

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As previously mentioned, a key to opening our store with a desirable mix of inventory will be utilizing an expert advisor as a buying consultant.  We will the advisors vast knowledge of the industry and her supplier relationships to determine the ideal brands, styles, colors, sizes and quantities for our target market.  The advisor will also advise us in negotiating the most favorable terms with vendors.

We will carefully monitor what sells and what doesn't, listen to customer feedback, and keep a careful eye on ever-changing fashion trends to optimize future orders.

We will attend at least two industry shows per year, to stay current on new designers and trends.  The shows were invaluable in giving us some ideas of what product lines to initially carry at Trѐs Magnifique, and in establishing vendor relationships.  In addition to exposing us to the wide array of available lines, both shows provided us with educational seminars that either reinforced many of our plans or provided new thinking to our business strategies.

2.7 Inventory Management & Technology

We will use the QuickBooks Pro Point of Sale system for cash register, inventory, and customer information tracking.  The software was developed for a retail environment and has the capacity to handle up to 40,000 SKUs.  It is much more affordable than the Retail Pro system, which is the top-of-the line system for multi-store retailers.  We believe that QuickBooks should meet our initial inventory management needs; however we will be continuously monitoring this system and how it serves our needs to determine if an upgrade will be necessary in the future.

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3. MARKETING SEGMENT

There is little reason to doubt that the Hyderabad market is a reflection of the national market when it comes to a growing interest among women for intimate apparel.  This coupled with the continued economic strength of Hyderabad; geographic portion of the market lends further credence to the great potential for Trѐs Magnifique. This portion of the plan will explore the key target audiences we have identified as best prospects for the products and services Trѐs Magnifique will provide. 

3.1 Market Segmentation

Trѐs Magnifique will target specific market segments:1. Women 25-59 with household income of Rs. 75,000 & above.2. Women 18-24

Market Potential for Target Segment 1:Within a 10 kilometer radius of our store location, 21.4% of the households have an income of of Rs. 75,000 & above.

This translates into households that fall within our primary target income bracket. 

Since one of our goals is to build Trѐs Magnifique into a destination location for lingerie purchases, it is also pertinent to look at households’ income of Rs. 75,000 & above in a 20 kilometer radius of our location also.

Market Potential for Target Segment 2:

Since 18-24 year olds are much more likely to be impulse purchasers, we are limiting our market potential number to a 10 kilometer radius for this age group. 

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We have not put a household income qualifier on this segment, since the age group includes students and young singles that are only supporting themselves rather than an entire household.  However, we believe it is realistic to assume that many women in this target segment still reside in those $75K+ households referenced above.  They take advantage of available disposable income to purchase lingerie.

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers

Growth

CAGR

Women 25-59, income of Rs. 75,000 & above

5% 82,529

86,953

91,614

96,525

86,953

1.31%

Women 18-24

20% 7,140 8,568 10,282

12,338

8,578 4.69%

3.2 Target Market Segment Strategy

Women have varying attitudes towards the role of undergarments in their lives.  This is evidenced by the different personalities that are projected through the contents of their underwear drawers.  For example, there's the "low involvement" segment, who buy just enough lingerie to get them through the week.  For them, underwear is a functional necessity, and they really don't care if it's all white or all black, as long as they have a clean pair of panties to wear. 

The fact that a woman spends a fortune on designer suits does not necessarily translate into designer labels on her bras. 

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Trѐs Magnifique wants to capture the attention of the Intimate Apparel Enthusiast (IAE).  According to a segmentation study done by the Cambridge Group, the IAE is aged 18-34, wears matching bras and panties, and loves to shop for underwear, especially on impulse.  Although IAEs are only 18 percent of the market, they account for 25 percent of the sales.  Their entire underwear collection looks like most women's "special occasion" section of their lingerie drawer. 

Although the young IAE is buying a lot of undergarments, she is not necessarily the most profitable customer.

3.3 Characteristics of our target customers:

Women 25-59 with household income of Rs. 75,000 & above Of this segment, women over 35 are more lifestyle and status conscious; they favor European brands with high design and quality, shop less often, but favor premium brands.

Young women 18-24 shop more often We can offer this segment better customer service, higher quality merchandise and more selection that they are used to receiving at Victoria's Secret.

Teens (13-17) often have media created tendencies; they are avid readers of fashion magazines.With ever-increasing disposable income, purchase decisions are influenced by those publications and peers. While not within our core target demographic, they are also influenced by mothers and older sisters and may follow their purchase paths.

3.4 Industry Analysis

Local merchandisers lead the women's innerwear market in share, as they do in a variety of consumer products.  Brands sold at local merchandisers include:

Daisy dee Juliet Libertina

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Jockey

Department stores hold second place in terms of market share, offering a wider variety of merchandise, more high-end products, more hard to find sizes, and, if lucky, some customer service.  Brands sold at department stores include many of the above, plus:

Mid-Tier: (Shopper’s Stop, Lifestyle)

Triumph Lovable Enamor

Major:

Tommy Hilfiger Marks & Spencers La Senza Benetton

None of these stores carry the international brands and up and coming labels that will be offered at Trѐs Magnifique.

The rest of the women's intimate apparel sales are primarily through non-chain specialty stores

3.4.1 Competition and Buying Patterns

In Hyderabad, the choices of outlets for women to purchase intimate apparel is limited   THERE IS ONLY ONE INDEPENDENT LINGERIE BOUTIQUE (Buttercups) TO SPEAK OF IN HYDERABD CITY.

That one store that can be classified as a lingerie boutique in Hyderabad is Buttercups.  This boutique can be considered as a threat to Trѐs Magnifique 

The fact that there are lingerie stores and departmental stores that house select brands close to Trѐs Magnifique is considered a positive.  Customers who are lingerie shopping and do not find what they want from these can easily visit Trѐs Magnifique. 

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Of the various channels described above, Trѐs Magnifique will most likely share customers with the Department Stores and Specialty Chains as those are the only true retail options currently available in Hyderabad with the types of products that appeal to the IAE.  However, both of these channels fall dramatically short in terms of customer service and depth of quality product.

According to Warnaco focus groups, women hate the underwear shopping experience at department stores.  Bras and underwear are jammed onto racks that are packed too close together; the layout is determined by brand rather than purpose; and customer service is non-existent, which is a crucial component to bra shopping, hence about 80 percent of women wear

the wrong size. Trѐs magnifique has a true void to fill.

3.4.2 TrendsWomen's Wear Daily reports that department stores and chain specialty stores are losing market share.  We assume that much of that erosion is a result of the increasing confidence in Internet shopping and where available, specialty retailers.  IAEs recognize that a specialty boutique such as Trѐs Magnifique will offer excellent customer service, product knowledge, personal fitting service, custom order options and wonderful product.

Innovations in textiles and manufacturing have caught consumer's attention.  Seamless undergarments that permit a greater range of motion and a smoother silhouette as well as new generations of microfibers that keep a body warmer, cooler or drier have encouraged consumers to seek out garments and fabrics that meet and exceed their demands.

The hottest trends at the intimate apparel shows in New York in March 2010 were:

Increased interest in and availability of plus-size undergarments Innerwear that crosses over to outerwear Multiple silhouettes in panty styles, with popular junior styles such as

boy briefs showing up more in mature lines

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4. STRATEGY AND IMPLEMENTATION SEGMENT

Specific details regarding our strategic and tactical plans will be covered in greater detail in the following sections.  However, to create an overview of the opportunity that exists for Trѐs Magnifique , we offer the following SWOT (Strengths/Weaknesses/Opportunities/Threats) Analysis:

Strengths:

Quality and selection of products Differentiation Excellent customer service Commitment of owner Location

Weaknesses:

Owner's inexperience as a lingerie retailer A target audience with limited exposure to many higher end, quality

lingerie brands

Opportunities:

Single competition in Hyderabad market for lingerie boutiques Attractive retail environment in Hyderabad, and especially around the

store location

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Educate Hyderabad consumers on quality international brands of lingerie

Establish relationships with complementary retailers (e.g.  bridal shops) to share customers

Increased consumer interest in intimate apparel

Threats:

Slow recovery from recent economic downturn Mis-calculating customer's tastes and needs, resulting in too many

mark downs

4.1 Marketing StrategyMarketing Objective:Generate awareness through various marketing communications tactics to generate customer trial visits in support of the business goals and objectives for Trѐs Magnifique. 

Strategies: Utilize print advertising to generate awareness among the target

audience and to emphasize key shopping periods. Ongoing use of direct marketing to keep Trѐs Magnifique top-of-mind

among a portion of the target audience at all times. Develop and implement on-going in-store promotions, guerrilla

marketing tactics and cross-retail marketing to generate on-going awareness, trial and repeat visits to Trѐs Magnifique.

Employ strategic placement on the Internet.

Tactics:Print advertising: Employ key print advertising vehicles to build awareness among the target market:

Advertise in the newspapers such as Deccan Chronicle, The Hindu and The Times of India that are widely read by most of the population in order to generate awareness as well as advertise call-to-action messages during key shopping periods, e.g. Christmas holidays, wedding/bridal season.

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Advertise in the top fashion magazines as well as local magazines like Trendz, WOW, You &I, etc.

Periodic advertising in other publications focusing on specific audiences within the target segments to generate awareness and highlight key shopping periods.

On-going use of direct marketing:

I. Direct mail will target a portion of the trade area on a monthly basis.  From 500 to 1,000 post-card mailings will be sent out on a monthly basis.  Messages will run the gamut from "Now Open" to introduction of product lines to special shopping events.  In the case of special shopping events, larger quantities will be. Our rationale for limited quantity mailings on a monthly basis is to keep the Trѐs Magnifique name a "new news" message among a portion of the target audience at all times.  This will generate awareness, which will lead to trial visits and word-of-mouth interest.

II. Special Shopping Event mailings will be generated to reach a higher percentage of the target audience in the trade area.  These events will include the all important 4th quarter holiday shopping season and mark down events.  For these events, we anticipate mailing to as many as 1,500 to 2,000 customers and prospects minimum.

III. As Trѐs Magnifique generates its trackable customer data base, we will utilize direct mail to target specific interests, whether that be based on particular products, brands or seasonal purchases.  A "preferred customer" mailing list will also be utilized to inform those important friends in advance of special shopping events.

IV. We intend to implement a birthday program and quarterly trunk shows to also be driven by direct mail.

Low or no-cost "guerrilla" marketing will be a key strategy in the first 12-24 months that Trѐs Magnifique is open for business.

o Cross-promotion/marketing with complementary stores in Hyderabad - We will create incentives for the nearby women's apparel and specialty stores to refer their customers to Trѐs Magnifique.  Whether that is by honoring a similar sale incentive (percentage off retail) or limited

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time discounts to employees, we will find ways to make it worth the effort to send their customers to our shop.

o Generate awareness - Whether it's classy introduction cards under windshield wipers, participation in bridal and fashion shows, or telling our story to women's groups and organizations, the staff of Trѐs Magnifique will look for those no-cost opportunities to generate awareness within our target audience.

o Drive increased customer traffic with a customer referral program targeting our preferred customer base.

4.2 Sales Strategy

Offer personalized customer service by well-trained, well compensated and appreciated employees.  Develop customer relationships and loyalty that creates a desire for return visits.

Utilize the Quickbooks POS system to record customers' contact and purchase information, enabling us to follow up with direct mail and/or phone calls to communicate special events and the arrival of new products of interest.

Offer a 14-day exchange policy to give customers an option to return undesired selections without losing revenue from the sale.

Establish two major markdown events per year and promote the events to customers and prospects.  These events will be used to move old inventory and create a special reason to visit Trѐs Magnifique.  Except for during the markdown events, merchandise will be sold at full price to maintain the integrity of the quality products we are offering.  We do not want to train our customers to wait for a sale.

Network with bridal shops throughout Kansas City to promote gift registry and the personalized attention that Trѐs Magnifique offers brides and their wedding parties.

Employees will receive added incentive to help meet/exceed customer service and sales goals.

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Sales Forecast

Trѐs Magnifique’s projected average transaction is Rs.1600.  This figure was derived using a couple of different sources. 1. The average transaction on figleaves.com, a hugely successful online

lingerie website, with a customer base of 250,000 is Rs. 1500.  We can assume that customers buying on figleaves.com have a specific purchase objective in mind, and are not "just shopping."  The in-store experience at Trѐs Magnifique will facilitate additional impulse purchases with successful merchandising techniques, which will raise the average transaction above an online purchase.

2. The average transaction during the start-up phase of a similar lingerie boutique in Connecticut was Rs.1600.  While you may expect a higher average transaction in Connecticut due to the wealth of the community and the higher awareness and acceptance of upscale brands, their start-up was over 15 years ago, and the cost of goods has increased significantly in that time.

We feel that an initial average transaction projection of Rs. 1600 is conservative, and will work to increase that number to Rs. 1800 by year two.

For the first year, our sales projections are based on 20 transactions per day times the number of selling days in the month. 

We are projecting a rate of growth of 15% in year two and 18% in year three.  This will come from garnering a larger market share based on increased awareness, positive word-of-mouth recommendations, and customers adopting Trѐs Magnifique as their exclusive lingerie outlet, as well as increased offerings in high demand areas such as maternity and hard-to-find sizes.

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Sales Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Sales

Lingerie

Rs.98,90,055

Rs.1,13,73,570

Rs.1,33,08,055

Rs.1,38,94,800

Rs.15,56,21,920

Other Rs. 0 Rs. 0 Rs. 0 Rs. 0 Rs. 0

Total Sales

Rs.98,90,055

Rs.1,13,73,570

Rs.1,33,08,055

Rs.1,38,94,800

Rs.15,56,21,920

Direct Cost of Sales

Year 1 Year 2 Year 3 Year 4 Year 5

Lingerie cost

Rs.49,45,027

Rs.56,86,785

Rs.66,54,037

Rs.69,47,415

Rs.77,81,107

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Other Rs. 0 Rs. 0 Rs. 0 Rs. 0 Rs. 0

Subtotal Direct Cost of Sales

Rs.49,45,027

Rs.56,86,785

Rs.66,54,037

Rs.69,47,415

Rs.77,81,107

4.3 Competitive EdgeTrѐs Magnifique will establish itself as the best place to shop for lingerie in Hydeabad through its product offering, the scope and level of services it provides and outstanding customer service. 

Products:  Trѐs Magnifique will provide a high level of quality and value to the consumer by offering a wide range of styles and sizes, with little or no crossover of brands with other retailers in Hyderabad.  Some brands under consideration include:

Buttercups Triumph Lovable Jockey Enamour

Services:  Trѐs Magnifique will create customer loyalty by offering one-to-one attention to all of their shopping needs.  The following is an initial list of services that will be offered: Professional bra fitting Signature gift wrapping to reinforce the store image and make the

recipient feel special Custom/special orders Record of customers' size needs and purchase history

Employees:  Trѐs Magnifique’s employees will enjoy a fun, friendly, fair and challenging work environment which rewards hard work and dedication to the business and its customers.  It is our desire that employees are long-term, ensuring an expertise that will support the customer experience.  Trѐs

35

Magnifique will seek out employees who not only desire to train for success, but have the personality and drive to be the best in customer service, while representing the best lingerie retailer.  Trѐs Magnifique will provide product and customer service training to assure every employee not only benefits from, but contributes to our #1 goal of outstanding customer service.

4.4 Milestones

36

MILESTONES

Milestone Start Date

End Date Budget Department

Complete business plan

2/1/2010 4/30/2010

Rs.2,250 Marketing

Secure financing

5/3/2010 6/18/2010

Rs.0 Marketing

Logo & packaging design

5/3/2010 6/4/2010 Rs.11,250 Web

Secure store location & lease

5/3/2010 5/28/2010

Rs.1,35,000

Web

Hire designer & confirm build-out plan

5/7/2010 5/28/2010

Rs.0 Department

Apply for business licenses, registration, etc.

5/31/2010

6/4/2010 Rs.6,750 Department

Purchase QuickBooks hardware &

5/31/2010

6/2/2010 Rs.78,750 Department

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software

Hire staff 5/31/2010

8/20/2010

Rs.0 Department

Remodel store

6/7/2010 9/3/2010 Rs.3,37,500

Department

Order store fixtures

6/7/2010 6/18/2010

Rs.3,37,500

Department

Place inventory orders

6/12/2010

6/20/2010

Rs.22,50.000

Department

Secure insurance

7/5/2010 7/9/2010 Rs.56,250 Department

Order Bankcard Supplies & Machine

7/5/2010 7/9/2010 Rs.9,000 Department

Order POS Supplies

7/5/2010 7/9/2010 Rs.9,000 Department

Order packaging

7/12/2010

7/12/2010

Rs.56,250 Web

Design and place opening advertising

7/12/2010

7/30/2010

Rs.67,500 Department

Contact utility companies

7/12/2010

7/16/2010

Rs.45,000 Department

Order 8/2/2010 8/6/2010 Rs.13,500 Web38

business supplies & forms

Plan opening event

8/2/2010 9/2/2010 Rs.67,500 Department

Bra fitting training

8/16/2010

8/20/2010

Rs.0 Department

Store opening

9/7/2010 9/7/2010 Rs.0 Department

Opening event

9/10/2010

9/10/2010

Rs.0 Department

Totals Rs.34,83,000

5. MANAGEMENT SEGMENT

5.1 Legal structure:Trѐs Magnifique will be developed as an S Corporation. This structure will be used so that the owner can use investors to raise startup capital, still maintain limited liability status and have income taxed through personal income.

5.2 Management/personnel:Management of Trѐs Magnifique is made up of the owner, Shanmuki V.S, and a manager who still needs to be hired. The owner will focus on sales, inventory and marketing. The manager will also focus on sales and handle the many administrative functions that are necessary to run a lingerie boutique.

Facilities Director:

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The owner of Trѐs Magnifique will resume the role of facilities director, who will be in charge of marketing efforts and all administrative functions of the business.

Events Coordinator: An individual experienced in sales with an outgoing personality is chosen as a events coordinator. The events coordinator will establish relationships with businesses and organizations and establish events on a consistent basis. He also increases the market share of the business and attracts more customers through new marketing technique

Merchandiser/buyer: The role of the merchandiser/buyer is taken by both the owner as well as an expert employed form the industry who has adequate knowledge about how much inventory needs to be maintained and the latest style in the market that need to be housed by the boutique.

General staff: The role of the general staff can be of a sales associate who is trained and

who is required to assist the customer one on one. The general staff can also help in day to day operations of the store as well as the cashiers at the cash counters who are required for billing.

5.3 Personnel Plan

The personnel plan is for Shanmuki V.S, owner/operator to work full time and draw a salary of Rs.11, 85,750 the first year of operation.  The managers who work at least 30 hours per week will draw a salary of Rs.10, 12,500 per year.  There will be salespeople who will each work 18 hours per week at a salary of Rs.450 per hour.  We feel that we are offering generous salaries to our employees so we can attract and retain high quality personnel.  It is imperative that our salespeople demonstrate a level of maturity, knowledge and comfort with our customers that will put them at ease and make them want to come back frequently.

All personnel, except the owner, will be eligible for bonuses when monthly sales goals are achieved.

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Scheduling will allow for two people to be working during all hours that Trѐs Magnifique  is open.  More will be scheduled to meet the demand of the day or season.

At this time, medical benefits will not be offered to employees.  The status of medical benefits will be re-assessed after the first year of operation.

Outside consultants will be used to help with the following functions:

Buying In-store and window displays Accounting

6. CRITICAL RISK SEGMENT

Inaccurate sales projections:

Sales projection is reached through proper research and prediction. Failure to reach the projected revenues could lead to devastating problems like selling the inventory at reduced prices.

Weak Economy:

With the nature of the business a weak economy can pos e a serious risk to the success of the ventures. Therefore in a weak economy additional effort is made to meet sales goals.

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7. FINANCIAL SEGMENT

A 10-year SBA loan will be secured to cover start-up expenses and the first 2-3 months of salary, rent, taxes, and insurance and credit card fees. 

A line-of-credit up to Rs. 5, 62,500 will be used to cover any monthly cash-flow shortage and greater than anticipated inventory requirements. 

Sales growth is expected to be aggressive with projections of sales increases of 15% in year two and 17% in year three. 

Profits will be reinvested to reduce debt, expand product lines and increase personnel, as needed. 

Trѐs Magnifique is a retail store, and will not be selling on credit.  Trѐs Magnifique will accept cash, checks and all major credit cards. 

Marketing and advertising will be no greater than 6% of sales.

7.1 Important Assumptions

42

General Assumptions

Year 1

Year 2

Year 3

Year 4

Year 5

Plan Month 1 2 3 4 5

Current Interest Rate

9.00%

9.00%

9.00%

9.00%

9.00%

Long-term Interest Rate

9.00%

9.00%

9.00%

9.00%

9.00%

Tax Rate 30.00%

30.00%

30.00%

30.00%

30.00%

Other 0 0 0 0 0

7.2 Break-even AnalysisThe break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". A profit or a loss has not been made, although opportunity costs have been paid, and capital has received the risk-adjusted, expected return.

43

Break-even Analysis

Monthly Revenue Break-even Rs. 7,76,880

Assumptions:

Average Percent Variable Cost 50%

Estimated Monthly Fixed Cost Rs. 3,88,440

7.3 Projected Profit and Loss

44

7.4 Projected Profit and Loss

45

Profit and Loss is a company's financial statement that indicates how the revenue  is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs and taxes. The purpose of the income statement is to show managers and investor whether the company made or lost money during the period being reported. The important thing to remember about an income statement is that it represents a period of time. This contrasts with the balance sheet, which represents a single moment in time.

Pro Forma Profit and Loss

Year 1(Rs)Year 2(Rs)

Year 3(Rs)

Year 4(Rs)

Year 5(Rs)

Sales 98900551137357

01330805

21389480

7.515562192.5

Direct Cost of Sales

4945027.5 56867856654037.

56947415 7781107.5

Other Costs of Goods

0 0 0 0 0

Total Cost of Sales

4945027.5 56867856654037.

56947415 7781107.5

Gross Margin 4945027.5 56867856654037.

56947415 7781107.5

Gross Margin % 50.00% 50.00% 50.00% 50.00% 50.00%

Expenses

Payroll 2264512.5 26526602858422.

53001342.

53151417.5

Marketing and Advertising

596137.5 675000 765000 810000 855000

Depreciation 67500 67500 67500 67500 67500

Start-up inventory

amortization

0 0 0 0 0

Rent 810000 810000 810000 810000 810000

Packaging 54000 54000 54000 54000 5400046

Cell Phone 13500 13500 13500 13500 13500

Travel $4,800 54000 54000 54000 54000

Utilities 162000 166860 171855 177030 182340Payroll Taxes Rs. 0 Rs. 0 Rs. 0 Rs. 0 Rs. 0

Merchandiser 40500 40500 40500 40500 40500

Buying Consultant

216000 0 0 0 0

Web Design 31950 22500 22500 22500 22500

Insurance 56160 58972.5 61920 61920 68265Credit Card Fees 227475 261585 306090 319590 357930

Accountant 13500 13500 13500 13500 13500

Total Operating Expenses

4661235 48906005238787.

55448487.

55690452.5

Profit Before Interest and

Taxes283792.5 796185 1415250

1498927.5

2090655

EBITDA 351292.5 863685 14827501566427.

52158155

Interest Expense 293040 273015 250335 225202.5 197707.5Taxes Incurred 0 156960 349470 382117.5 567877.5

Net Profit (9225) 366232.5 815422.5 891607.5 1325047.5Net Profit/Sales -0.09% 3.22% 6.13% 6.42% 8.51%

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7.5 Projected Balance Sheet

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories of assets are usually listed first and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting, net

worth must equal assets minus liabilities. Pro Forma Balance Sheet

Year 1(Rs.)

Year 2(Rs.)

Year 3(Rs.)

Year 4(Rs.) Year 5(Rs.)

Assets

Current Assets

Cash2729812.

52840377.

53471997.

54136535 5224365

Inventory 467775 537930 629437.5 657180 736042.5Other Current

Assets0 0 0 0 0

Total Current Assets

3197587.5

3378307.5

4101435 4793737.5 5960407.5

Long-term Assets

Long-term Assets 337500 337500 337500 337500 337500

Accumulated Depreciation

1518750 3037500 4556250 6075000 7593750

Total Long-term Assets

6075000 4556250 3037500 1518750 0

Total Assets3467587.

53580807.

54236435 4861237.5 5960407.5

Liabilities and Capital

Year 1 Year 2 Year 3 Year 4 Year 5

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Current LiabilitiesAccounts Payable 702765 686902.5 793822.5 818797.5 912082.5

Current Borrowing

0 0 0 0 0

Other Current Liabilities

0 0 0 0 0

Subtotal Current Liabilities

702765 686902.5 793822.5 818797.5 912082.5

Total Liabilities 38548353601822.

53442005 3175200 2949322.5

Paid-in Capital11010937

.51101093

7.51101093

7.511010937.

511010937.5

Retained Earnings

867375 876600 510390 305055 1196662.5

Earnings 9225 366232.5 815422.5 891607.5 1325047.5Total Capital 387225 21015 794430 1686037.5 3011085

Total Liabilities and Capital

3467587.5

3580807.5

4236435 4861237.5 5960407.5

Net Worth 387225 21015 794430 1686037.5 3011085

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