open up a new business

8/6/2019 Open up a new Business

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REPORT

FOR

Entrepreneurship & Business Plan

Topic:- Accessories Retail store

SUBMITTED TO: SUBMITTED BY:

Mr. Hitesh Jhanji Tarun Tandon (A02)

Manoj KumarSharma (A04)

Devesh Kr Chauhan (A05)

VeenuSinghal (A62)

Jessica Verma (B53)


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FNU


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Acknowledgement

The successful completion of any task would be incomplete without mentioning the people

who have made it possible. So it`s with the gratitude that I acknowledge the help, which crowned

my efforts with success.

Life is a process of accumulating and discharging debts, not all of those can be measured. We

cannot hope to discharge them with simple words of thanks but we can certainly acknowledge

them.

I owe my gratitude to Mr. Hitesh Jhanji, LIMfor his constant guidance and support.

I would also like to thank the various department officials and staff who not only provided me

with required opportunity but also extended their valuable time and I have no words to express

my gratefulness to them.

Manoj Kumar Sharma

Tarun Tandon

Devesh Kr Chauhan

Veenu Singhal

Jessica Verma


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EXECUTIVE SUMMARY

Fashion N You (FNU) is a new accessory store that will provide high quality accessories in a

wide array of size and style with exceptional customer service. 400 sq.feet stores will be located

in a lovely mall in LPU Phagwara. Demographics are suitable and the market will be less

competitive and compatible for retail store and potential business.

Competition: The outlet in the Jalandhar and the Phagwara markets and viva collage will be

competition to our store. But there is no particular accessory store which specialized in

accessories and is providing quality merchandise with both branded and non branded products

and customer service.

Potential Market: Youth oriented market with more than 30.000 students and 1500+ staff

members of LPU.

Unique Selling Proposition: At FNU, we solve the fashion dilemma by offering a wide range of

styles that youth will not find elsewhere in Jalandhar city.

FNUs highly trained personnel will get to know each customer individual needs and will offer

personal fitted products and other special services

USP: Highly trained personnel and up to date products as per trends


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Table of Contents

Serial

No.

Particulars Page No.

1.

1.1.

1.2.

1.3.

1.4.

2

2.1.

2.2.

2.3.

2.4.

3.

3.1.

3.2.

3.3.

3.4.

4.

4.1.

4.2.

4.3.

Acknowledgements

Executive summary

Introduction

Objectives

Mission

Key to Success

SWOT analysis

Marketing Plan

Marketing objective

Target market

Marketing mix

Sales strategy

Financial Plan

Initial cost analysis

Income statement

Working capital calculation

Break even analysis

Operational Plan

Store timing

People

Location

3

4

7

7

7

7

8

9

9

10

10

13

13

14

15

15

16

17

17

17

17


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4.4.

4.5.

4.6.

5.

5.1.

5.2.

5.3.

Product sourcing and Buying

Inventory management

Legal environment

HR Plan

Recruitment

Staff management

Role and Responsibilities of Partners

18

19

19

19

19

20

21


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1.INTRODUCTION

FNU (Fashion N you) will be a Accessories Retail store which provide all types of branded and

non branded accessories for both male and female. The location of the store will be at LPU mall

and the area required will be 400 sq. feet. This section will deal with the objectives, mission, key

tasks and SWOT analysis of the business.

1.1. Objectives

1. To create a shopping environment where men and women feel comfortable, pampered and

stimulated by the wide array of choice that available to fill their needs.

2. To utilize superior customer services 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 6 months of their first purchase.

3. To make FNU the number 1 destination for all accessory purchase by the end of year one.

4. To have first year gross sales of Rs 12 lakh

5. To grow the business by 15% in year 2.

1.2.Mission

To become Premier Accessory Store. This will be accomplished by offering fair prices, the best

selection and a knowledgeable staff to assist customer in any way.FNU will strive to exceed all

of their customers expectations.

1.3. Key To Success

1. Offer superior quality products with latest trends that are not available in other outlets in theJalandhar city market.


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2. Understand FNU target customer to ensure that the correct product mix is available to meet

their needs.

3. Offer superior, personalized customer service to create favorable word-of-mouth

recommendations and influence a high rate of repeat business.

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

5. Educate and advise customers on proper fitting and the quality/value relationship of some of

the higher priced brands.

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

offerings.

7. Changing in store and window displays frequently to increase in pulse purchases, creating the

belief that there is always something new at FNU.

1.4. SWOT ANALYSIS

Strengths

Popular Brand

Quality and selection of Products.

Location.

Differentiation.

Commitment of owner.

Excellent customer service.

Weakness

High Cost Products.

Owners inexperience as fashion accessory retailers.

Target audience with limited exposure to many high end, quality brands.


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2.2.Target Market

Students and FacultyMembers of the Lovely Campus.

Potential market- 30,000 students and 1500+ staff members of the LPU.

2.3.Marketing mix of FNU

A. Product

Fashion Accessories.( Branded & Non Branded)

Sun Glasses.


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Belts.

Wallets

.

Caps


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2.4. Sales Strategy

1. Offer personalized customer service by well trained, well compensated and appreciated

employs. Develop customer relationship and loyalty that creates a desire for return visits.

2. Utilize the quick books POS system to record customers contact and purchase

information enabling us to follow up with direct mail and a phone call to communicate

special events and the arrival of new products of interest.

3. Offering a few hours Exchange policy to give customer an option to return undesired

selection without losing revenue from the sales.

4. Network with other complementary stores to promote our store sales.

5. Employees will receive added incentives to help, meet/exceed customer services and

sales goal.

3. Financial Plan

A financial plan can be a budget, a plan for spending and saving future income. This plan

allocates future income to various types of expenses, such as rent or utilities, and also reserves

some income for short-term and long-term savings. A financial plan can also be an investment

plan, which allocates savings to various assets or projects expected to produce future income,

such as a new business or product line, shares in an existing business, or real estate.

Assumptions

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.

FNU is a retail store, and will not be selling on credit. FNUwill accept cash, checks and

all major credit cards.

Marketing and advertising will be no greater than 5% of sales.

Initial capital- Each member will put 3lacs amounting to 15lacs.


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3.1.Initial Cost Analysis:

Item Cost Total Amout

Interior 1.8lacs

Merchandise 6lacs

Computer, internet connection, printer. 0.5lacs

Furniture, stationary etc. 1.2lacs

Registration (PAN, TAN, VAT etc) 0.2lacs

Advertisement budget

1. Events

2. Sponsorships

3. Advertisement.

4. Printing

1.4lacs

Miscellaneous expenses(cash in hand & at bank) 1.116lac

Total 12.216lac

Yearly expenses

Rent 15,000/month

Salary 5,000

Internet connection 700

Office boy 2,500

Total 23,200*12 2,78,400

Grand total 15,00,000


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3.2.INCOME STATEMENT (FORTHE YEARENDING2011-12)

(Forecasted)

Particulars Amount

Total Revenue 12,00,000

Direct cost of sales 6,00,000

Gross margin 6,00,000

Expenses

Written off (Reg. fees-20,000 + 80,000) 20,000

Payrolls 90,000

Marketing and Advertising 60,000

Rent (shop +phone +internet +electricity ) 2,00,000

Insurance 10,000

Web Design 10,000

Deprecation 50,000

Total operating expenses 4,40,000

Profit before tax 1,60,000

Tax @30% 48,000

Net profit 1,12

3.3. Working CapitalCalculation

Working Capital = current assets - current liability

Current assets = cash + inventory

C.A. = 1,11,600 + 6,00,000 = 7,11,600

Current liability = short term debt + accounts payable + accrued liabilities

C.L. = 6,00,000

W.C. = 7,11,600- 6,00,000 =1,11,600


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3.4.BreakEven Analysis

Calculation of breakeven point

Revenue = 12,00,000

Variable cost = 6,80,000

Fixed cost = 3,60,000

Av. Units = revenue /av. Price

Av. Units = 12,00,000/500= 2,400 units

Breakeven point = F.C./(Rev/u-V.C./u)

BEP= 3,60,000/(500-284)=1667

So, it will take 9 months to reach BEP


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4. Operational Plan

F NU is a fashion influenced accessory store offering quality merchandise and personaliz

services. It is scheduled to open this august in a 400 sq. feet in the LPU shopping centre in LPU

Phagwara.

4.1. Store Timing

We plan to follow schedule similar to other retailers in the shopping centre. Additionally we will

be sensitive to holiday hours in special group opportunities to maximize over exposure in sales

potential.

Functional from 9:00 Am to 7:00 Pm

Timings will be flexible during peak season

Staff timings-9:00-6:00

Security system will be working 24x7

4.2. People

Our store will be managed by experienced and qualified staff and by the partners. Each partner

will be taking care of work and responsibility assigned to them.

Staffrequirements:

Sales person

Office boy

4.3. Location

Locationis a critical element to any retail business. The right location is paramount to the

success of accessory store 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 FNU into a destination location for accessory purchases. Location


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with high foot traffic will contribute to strong awareness and impulse purchases. LPU mall was

chosen keeping following criteria in the mind.

1. Desirable demographic composition.2. Strong foot traffic.3. Complementary retailers.4. Successful retail reputation.5. Relatively easy access.

4.4. Product Sourcing & Buying

1. Our merchandise will be purchased from the top manufacturers in the world, through their

regional representatives or direct from the manufacturer.

2. Seasonal designs will be ordered several months in advance.

3. We will carefully monitor what sells and what doesn't, listen to customer feedback, and keep

careful eye on ever-changing fashion trends to optimize future orders.

Suppliers Address

y Mr Davinder Singh Kalra,Mr Gurinder Singh Kalra

+(91)-(181)-2220538, 2220537+(91)-9814133103, 9855337936, 9815937335

Nr Ambedkar Chowk, Nr Nakodar Bus Stop, Nakodar Rd, Jalandhar City, Jalandhar 144001

y Dev collections

Shop no. 3, Dugri road opp. Marry land, model town, Ludhiana-141001

y Jain and Company

SCO 12 , Sector 30-D Chandigarh 160030

01722654817.


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4.5.Inventory Management

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 SKU (stock keeping unit).

Basic designs that are kept in-stock by suppliers will be re-ordered on a continual basis,

as needed.

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.

4.6. Legal Environment

Registration of store will be done

Permanent account number to be acquired

It is also necessary to have Tax Account Number

Our store will also be registered under Value Added Tax.

5.HR Plan

5.1. Recruitment

y Minimum requirements for:

Sales person ( Graduation , experienced)-1

Office boy Peons (Literate, experienced )-1

New recruitments will be done on the basis of performance of the store and as per requirement.


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y Compensation:

Pay will be same as mentioned in financial Plan, Bonuses will be performance based and medical

facility will also be provided. Increment will be according to the market and stores performance.

y Responsibilities of an Employer

Minimum wage

Equal pay with members of the opposite sex doing similar work of similar value

Pay statement

Safe and healthy working environment

Maternity leave for female employees

Access their own personnel records, whether these are on paper or computerised

5.2. StaffManagement

Induction: given a clear understanding of the structure of the provision and how it

operates.

Appraisal: recognise the good work of employees and ensure that they feel valued.

Disciplinary and Grievance:

all new employees should be given a copy of thedisciplinary and grievance.

y Hierarchy

Top level

Partners - 5

Middle level

Sales Person

Lower level

Office boy

Security Personnel


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5.3. Roles & Responsibilities of Partners

a. Common

y The Business partners would mutually set store for the business and would be taking care

of the hardware and furnishings for the shop.

y Contacting and transacting with the dealers of the products.

y Contract for lease agreement and terms would be agreed upon.

y Insurance documentation would be done.

y If needed banks or financial institutions would be contacted.

b. Individual

y 1st

partner will be responsible for all aspects of managing and operating the company.

Recruitment and employee relation will be his duties.

y 2nd Partner would be managing the logistics, supply chain, other outdoor tasks and

dealing and negotiating with dealers etc.

y 3rd

partner would take care of all the financial transactions like taking payment, billing,

paying to dealers, and other activities like insurance and banking transactions.

y 4th

Partner would be serving the customers, taking orders online as well as by telephone

and also Inventory management at the shop.

y 5th

Business partner would manage the customer care, public relations, advertisements,

promotions etc.

open up a new business

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