Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $500 |
Stationery etc. | $100 |
Other | $0 |
Total Start-up Expenses | $600 |
Start-up Assets | |
Cash Required | $20,032 |
Other Current Assets | $0 |
Long-term Assets | $9,368 |
Total Assets | $29,400 |
Total Requirements | $30,000 |
Passion Soles will sell upscale women’s shoes. The general categories of shoes that will be sold are:
Passion Soles will strive to have one of the largest selection of shoes in Oregon, barring the larger stores in Portland. Passion Soles will accomplish this by having one size per style in stock as a demonstration model. Passion Soles will then order the style in the needed size and it will arrive within two days (rush one day service is available). This will be accomplished through a special relationship with the wholesaler who is able to send out the right size in the right style on demand. Often a wholesaler will be unwilling to ship out individual shoes, but Passion Soles was able to secure an exclusive arrangement with a its wholesaler to meet this need.
Passion Soles will be targeting two distinct groups of fashion-concious female shoppers–professional workers and housewives. While both groups are interested in dress shoes, the professionals will also be looking for fashionable shoes they are able to wear with their business attire. The housewives might be looking for fasionable but more casual shoes.
Passion Soles is targeting two different population segments within the broad category of the fashion-conscious female with disposable income.
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Professionals | 9% | 12,457 | 13,578 | 14,800 | 16,132 | 17,584 | 9.00% |
Housewives | 8% | 14,544 | 15,708 | 16,965 | 18,322 | 19,788 | 8.00% |
Other | 0% | 0 | 0 | 0 | 0 | 0 | 0.00% |
Total | 8.47% | 27,001 | 29,286 | 31,765 | 34,454 | 37,372 | 8.47% |
These markets will be targeted through an attractive, eye-catching storefront in a popular mall. Most women within the target market shop at malls. Malls allow them to visit many different stores within the same vicinity. By just having a visible storefront in a well traveled mall, Passion Soles will receive walk-through customers.
While the leased space in a mall is expensive, one of the benefits that you pay for is the mall association which spends money on marketing the mall and the stores within the mall.
Women’s shoe retail industry is made up of several different types of companies:
Passion Soles has three direct competitors in Eugene:
The two major competitors in Portland are:
The buying habits for fashion-conscious women consist of typically buying at least one pair of shoes per month. Women generally purchase a pair of shoes to go with a specific dress. Once the woman purchases the dress she will then begin the sometimes long search for the perfect pair of shoes.
Passion Soles will leverage their competitive edge of extensive selection to drive sales. This is indeed a competitive edge because it is typically cost prohibitive for a store to have as much of a selection that Passion Soles will offer. Because of a unique business model, Passion Soles is able to leverage their financial resources and offer an unmatched selection. This is done by carrying a large selection of styles by only stocking one size per style. Once the customer has chosen the style, Passion Soles will have the customer’s shoes in one to two days.
Passion Soles’ sales strategy will be based on display and visibility. A highly visible store with attractive product displays located in the mall will get a high percentage of foot traffic. This is especially the case for a women’s shoe store. Women love to shop for shoes. Some women even use shoe shopping as a form of therapy, similar to eating chocolate. These activities can make them feel better.
The sales strategy will simply be, have the most complete selection of shoes. Assuming the prices are reasonable, having an extensive selection will drive sales because we believe our target markets of fashion-conscious females are always looking for the perfect pair of shoes to coordinate with their fashion style.
The first month will be used to set up the store front. The first employee will be hired and display inventory will be purchased. There will be no sales activity during the first month. The second month will begin to see sales activity, and it is forecasted that around month four sales will really begin to pick up. The reason for this is that word will get out about Passion Soles and more and more people will be coming in to check out the extensive selection. A third employee will be hired in December for the holiday season.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Professionals | $84,402 | $118,745 | $135,454 |
Housewives | $54,861 | $89,184 | $102,095 |
Total Sales | $139,263 | $207,929 | $237,549 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Professionals | $33,761 | $47,498 | $54,182 |
Housewives | $21,945 | $35,674 | $40,838 |
Subtotal Direct Cost of Sales | $55,705 | $83,172 | $95,020 |
Passion Soles will have several milestones early on:
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Business plan completion | 1/1/2001 | 2/1/2001 | $0 | ABC | Marketing |
Set up the store front | 1/1/2001 | 2/1/2001 | $0 | ABC | Department |
Revenues exceeding $75,000 | 1/1/2001 | 9/31/2001 | $0 | ABC | Department |
Profitability | 1/1/2001 | 10/31/2001 | $0 | ABC | Department |
Totals | $0 |
Passion Soles’ competitive edge is an unmatched selection in Eugene. This selection will be achieved in two ways. The first way is a very specific effort to carry as many styles of shoes as possible. Passion Soles recognizes that Eugene currently does not have a single store that offers a wide selection of decent quality shoes for the fashion conscious female consumer. The competitive edge is the recognition of this unserved niche and the serving of this demand.
Passion Soles will be able to offer a large selection through a unique inventory model that stocks only one size per style. The advantage is that for the same amount of money that Passion Soles invests in overhead, they can offer far more styles.
This model is effective because women are willing to order a pair of shoes sight seen but not fitted. Passion Soles offers two day delivery with an additional expense rush overnight option.
Holly Heels, the founder and owner received her Bachelor of Arts in marketing from the University of Portland. Throughout college, and full time after graduation, Holly worked at Nordstroms. She started out as a sales person in the Nordstroms outerwear department, where Holly was named employee of the month five times. This caught the attention of her supervisors and after one year of full-time work at Nordstroms, she was offered a position as the assistant manager of the women’s shoe department.
Holly worked as the assistant manager for one and a half years before receiving a promotion to manager of the department, a huge responsibility and honor. Holly learned all of the “ins and outs” of the Nordstroms retail shoe industry in this job. After three years, Holly decided to leave and seek another job. She had always wanted to live in a smaller town and, upon visiting a friend in Eugene, began to do some market research about the women’s shoe industry in Eugene. She realized that there was an unmet demand for fashionable shoes and she began to write a business plan to serve this need. She was confident that she would be able to leverage all of her industry knowledge and create a store in Eugene serving fashion-conscious women.
Holly will be working full time at Passion Soles. She will be in charge of all administrative details, hiring, inventory management, etc. Beginning with month two, Holly will hire a full-time sales clerk to help her at the store. By December, she will hire an additional full-time employee in time for the holiday season.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Holly | $36,000 | $40,000 | $42,000 |
Full-time employee | $17,600 | $19,200 | $19,200 |
Full-time employee | $1,600 | $19,200 | $19,200 |
Total People | 3 | 3 | 3 |
Total Payroll | $55,200 | $78,400 | $80,400 |
The following sections will outline important financial information.
The following table details important financial assumptions.
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 |
The Break-even Analysis indicates that approximately $13,000 is needed in monthly revenue to reach the break-even point.
Break-even Analysis | |
Monthly Revenue Break-even | $12,369 |
Assumptions: | |
Average Percent Variable Cost | 40% |
Estimated Monthly Fixed Cost | $7,421 |
The following table will indicate projected profit and loss. We estimate purchase of new shoe display inventory, primarily for the seasonal changes in styles. Because these are displays, we are tracking them as expenses. It is estimated that new styles (especially around the change in seasons) will require regular purchase of shoe displays as part of the normal course of business.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $139,263 | $207,929 | $237,549 |
Direct Cost of Sales | $55,705 | $83,172 | $95,020 |
Other Production Expenses | $0 | $0 | $0 |
Total Cost of Sales | $55,705 | $83,172 | $95,020 |
Gross Margin | $83,558 | $124,757 | $142,529 |
Gross Margin % | 60.00% | 60.00% | 60.00% |
Expenses | |||
Payroll | $55,200 | $78,400 | $80,400 |
Sales and Marketing and Other Expenses | $1,200 | $1,200 | $1,200 |
Depreciation | $1,056 | $1,056 | $1,056 |
Shoe Display Inventory | $7,000 | $5,000 | $5,000 |
Utilities | $1,200 | $1,200 | $1,200 |
Insurance | $1,800 | $1,800 | $1,800 |
Rent | $21,600 | $21,600 | $21,600 |
Payroll Taxes | $0 | $0 | $0 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $89,056 | $110,256 | $112,256 |
Profit Before Interest and Taxes | ($5,498) | $14,501 | $30,273 |
EBITDA | ($4,442) | $15,557 | $31,329 |
Interest Expense | $255 | $224 | $37 |
Taxes Incurred | $0 | $4,283 | $9,071 |
Net Profit | ($5,753) | $9,994 | $21,165 |
Net Profit/Sales | -4.13% | 4.81% | 8.91% |
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $139,263 | $207,929 | $237,549 |
Subtotal Cash from Operations | $139,263 | $207,929 | $237,549 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $5,000 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
Subtotal Cash Received | $144,263 | $207,929 | $237,549 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $55,200 | $78,400 | $80,400 |
Bill Payments | $78,704 | $118,797 | $133,576 |
Subtotal Spent on Operations | $133,904 | $197,197 | $213,976 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $1,260 | $3,000 | $740 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $135,164 | $200,197 | $214,716 |
Net Cash Flow | $9,099 | $7,732 | $22,833 |
Cash Balance | $29,131 | $36,863 | $59,697 |
The following table will indicate the projected balance sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $29,131 | $36,863 | $59,697 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $29,131 | $36,863 | $59,697 |
Long-term Assets | |||
Long-term Assets | $9,368 | $9,368 | $9,368 |
Accumulated Depreciation | $1,056 | $2,112 | $3,168 |
Total Long-term Assets | $8,312 | $7,256 | $6,200 |
Total Assets | $37,443 | $44,119 | $65,897 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $10,056 | $9,738 | $11,090 |
Current Borrowing | $3,740 | $740 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $13,796 | $10,478 | $11,090 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $13,796 | $10,478 | $11,090 |
Paid-in Capital | $30,000 | $30,000 | $30,000 |
Retained Earnings | ($600) | ($6,353) | $3,641 |
Earnings | ($5,753) | $9,994 | $21,165 |
Total Capital | $23,647 | $33,641 | $54,807 |
Total Liabilities and Capital | $37,443 | $44,119 | $65,897 |
Net Worth | $23,647 | $33,641 | $54,807 |
The following table compares our ratios to Standard Industry Code #3144 (Women’s footwear, except athletic).
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 49.31% | 14.25% | 10.45% |
Percent of Total Assets | ||||
Other Current Assets | 0.00% | 0.00% | 0.00% | 33.22% |
Total Current Assets | 77.80% | 83.55% | 90.59% | 85.17% |
Long-term Assets | 22.20% | 16.45% | 9.41% | 14.83% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 36.85% | 23.75% | 16.83% | 26.82% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.97% |
Total Liabilities | 36.85% | 23.75% | 16.83% | 52.79% |
Net Worth | 63.15% | 76.25% | 83.17% | 47.21% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 60.00% | 60.00% | 60.00% | 22.01% |
Selling, General & Administrative Expenses | 74.12% | 49.27% | 48.20% | 10.93% |
Advertising Expenses | 0.43% | 0.23% | 0.21% | 1.05% |
Profit Before Interest and Taxes | -3.95% | 6.97% | 12.74% | 2.49% |
Main Ratios | ||||
Current | 2.11 | 3.52 | 5.38 | 2.58 |
Quick | 2.11 | 3.52 | 5.38 | 1.37 |
Total Debt to Total Assets | 36.85% | 23.75% | 16.83% | 57.34% |
Pre-tax Return on Net Worth | -24.33% | 42.44% | 55.17% | 6.10% |
Pre-tax Return on Assets | -15.36% | 32.36% | 45.88% | 14.29% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -4.13% | 4.81% | 8.91% | n.a |
Return on Equity | -24.33% | 29.71% | 38.62% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 8.83 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 30 | 28 | n.a |
Total Asset Turnover | 3.72 | 4.71 | 3.60 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.58 | 0.31 | 0.20 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $15,335 | $26,385 | $48,607 | n.a |
Interest Coverage | -21.57 | 64.74 | 818.20 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.27 | 0.21 | 0.28 | n.a |
Current Debt/Total Assets | 37% | 24% | 17% | n.a |
Acid Test | 2.11 | 3.52 | 5.38 | n.a |
Sales/Net Worth | 5.89 | 6.18 | 4.33 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Professionals | 0% | $0 | $3,245 | $4,114 | $5,678 | $6,545 | $6,985 | $7,454 | $7,945 | $8,569 | $9,956 | $11,454 | $12,457 |
Housewives | 0% | $0 | $2,109 | $2,674 | $3,691 | $4,254 | $4,540 | $4,845 | $5,164 | $5,570 | $6,471 | $7,445 | $8,097 |
Total Sales | $0 | $5,354 | $6,788 | $9,369 | $10,799 | $11,525 | $12,299 | $13,109 | $14,139 | $16,427 | $18,899 | $20,554 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Professionals | $0 | $1,298 | $1,646 | $2,271 | $2,618 | $2,794 | $2,982 | $3,178 | $3,428 | $3,982 | $4,582 | $4,983 | |
Housewives | $0 | $844 | $1,070 | $1,476 | $1,702 | $1,816 | $1,938 | $2,066 | $2,228 | $2,589 | $2,978 | $3,239 | |
Subtotal Direct Cost of Sales | $0 | $2,142 | $2,715 | $3,747 | $4,320 | $4,610 | $4,920 | $5,244 | $5,656 | $6,571 | $7,560 | $8,222 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Holly | 0% | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
Full-time employee | 0% | $0 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 |
Full-time employee | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $1,600 |
Total People | 1 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 3 | |
Total Payroll | $3,000 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $6,200 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $0 | $5,354 | $6,788 | $9,369 | $10,799 | $11,525 | $12,299 | $13,109 | $14,139 | $16,427 | $18,899 | $20,554 | |
Direct Cost of Sales | $0 | $2,142 | $2,715 | $3,747 | $4,320 | $4,610 | $4,920 | $5,244 | $5,656 | $6,571 | $7,560 | $8,222 | |
Other Production Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $0 | $2,142 | $2,715 | $3,747 | $4,320 | $4,610 | $4,920 | $5,244 | $5,656 | $6,571 | $7,560 | $8,222 | |
Gross Margin | $0 | $3,213 | $4,073 | $5,621 | $6,480 | $6,915 | $7,379 | $7,866 | $8,483 | $9,856 | $11,339 | $12,332 | |
Gross Margin % | 0.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | |
Expenses | |||||||||||||
Payroll | $3,000 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $6,200 | |
Sales and Marketing and Other Expenses | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Depreciation | $88 | $88 | $88 | $88 | $88 | $88 | $88 | $88 | $88 | $88 | $88 | $88 | |
Shoe Display Inventory | $5,000 | $0 | $0 | $0 | $2,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Utilities | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Insurance | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | |
Rent | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | $1,800 | |
Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $10,238 | $6,838 | $6,838 | $6,838 | $8,838 | $6,838 | $6,838 | $6,838 | $6,838 | $6,838 | $6,838 | $8,438 | |
Profit Before Interest and Taxes | ($10,238) | ($3,625) | ($2,765) | ($1,217) | ($2,358) | $77 | $541 | $1,028 | $1,645 | $3,018 | $4,501 | $3,894 | |
EBITDA | ($10,150) | ($3,537) | ($2,677) | ($1,129) | ($2,270) | $165 | $629 | $1,116 | $1,733 | $3,106 | $4,589 | $3,982 | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $42 | $40 | $38 | $36 | $35 | $33 | $31 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($10,238) | ($3,625) | ($2,765) | ($1,217) | ($2,358) | $35 | $502 | $989 | $1,609 | $2,984 | $4,469 | $3,863 | |
Net Profit/Sales | 0.00% | -67.71% | -40.74% | -12.99% | -21.84% | 0.31% | 4.08% | 7.55% | 11.38% | 18.16% | 23.64% | 18.80% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $0 | $5,354 | $6,788 | $9,369 | $10,799 | $11,525 | $12,299 | $13,109 | $14,139 | $16,427 | $18,899 | $20,554 | |
Subtotal Cash from Operations | $0 | $5,354 | $6,788 | $9,369 | $10,799 | $11,525 | $12,299 | $13,109 | $14,139 | $16,427 | $18,899 | $20,554 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $5,000 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $0 | $5,354 | $6,788 | $9,369 | $10,799 | $16,525 | $12,299 | $13,109 | $14,139 | $16,427 | $18,899 | $20,554 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $3,000 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $6,200 | |
Bill Payments | $238 | $7,055 | $4,311 | $4,900 | $5,983 | $8,414 | $6,812 | $7,120 | $7,446 | $7,872 | $8,789 | $9,765 | |
Subtotal Spent on Operations | $3,238 | $11,655 | $8,911 | $9,500 | $10,583 | $13,014 | $11,412 | $11,720 | $12,046 | $12,472 | $13,389 | $15,965 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $210 | $210 | $210 | $210 | $210 | $210 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $3,238 | $11,655 | $8,911 | $9,500 | $10,583 | $13,014 | $11,622 | $11,930 | $12,256 | $12,682 | $13,599 | $16,175 | |
Net Cash Flow | ($3,238) | ($6,300) | ($2,123) | ($131) | $216 | $3,511 | $677 | $1,179 | $1,883 | $3,745 | $5,301 | $4,379 | |
Cash Balance | $16,794 | $10,493 | $8,370 | $8,240 | $8,456 | $11,967 | $12,644 | $13,823 | $15,706 | $19,451 | $24,752 | $29,131 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $20,032 | $16,794 | $10,493 | $8,370 | $8,240 | $8,456 | $11,967 | $12,644 | $13,823 | $15,706 | $19,451 | $24,752 | $29,131 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $20,032 | $16,794 | $10,493 | $8,370 | $8,240 | $8,456 | $11,967 | $12,644 | $13,823 | $15,706 | $19,451 | $24,752 | $29,131 |
Long-term Assets | |||||||||||||
Long-term Assets | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 | $9,368 |
Accumulated Depreciation | $0 | $88 | $176 | $264 | $352 | $440 | $528 | $616 | $704 | $792 | $880 | $968 | $1,056 |
Total Long-term Assets | $9,368 | $9,280 | $9,192 | $9,104 | $9,016 | $8,928 | $8,840 | $8,752 | $8,664 | $8,576 | $8,488 | $8,400 | $8,312 |
Total Assets | $29,400 | $26,074 | $19,685 | $17,474 | $17,256 | $17,384 | $20,807 | $21,396 | $22,487 | $24,282 | $27,939 | $33,152 | $37,443 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $6,912 | $4,149 | $4,703 | $5,701 | $8,187 | $6,575 | $6,873 | $7,184 | $7,581 | $8,464 | $9,418 | $10,056 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $5,000 | $4,790 | $4,580 | $4,370 | $4,160 | $3,950 | $3,740 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $6,912 | $4,149 | $4,703 | $5,701 | $8,187 | $11,575 | $11,663 | $11,764 | $11,951 | $12,624 | $13,368 | $13,796 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $0 | $6,912 | $4,149 | $4,703 | $5,701 | $8,187 | $11,575 | $11,663 | $11,764 | $11,951 | $12,624 | $13,368 | $13,796 |
Paid-in Capital | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 |
Retained Earnings | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) | ($600) |
Earnings | $0 | ($10,238) | ($13,863) | ($16,629) | ($17,845) | ($20,204) | ($20,168) | ($19,667) | ($18,677) | ($17,069) | ($14,085) | ($9,616) | ($5,753) |
Total Capital | $29,400 | $19,162 | $15,537 | $12,771 | $11,555 | $9,196 | $9,232 | $9,733 | $10,723 | $12,331 | $15,315 | $19,784 | $23,647 |
Total Liabilities and Capital | $29,400 | $26,074 | $19,685 | $17,474 | $17,256 | $17,384 | $20,807 | $21,396 | $22,487 | $24,282 | $27,939 | $33,152 | $37,443 |
Net Worth | $29,400 | $19,162 | $15,537 | $12,771 | $11,555 | $9,196 | $9,232 | $9,733 | $10,723 | $12,331 | $15,315 | $19,784 | $23,647 |
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Are you about starting a shoe manufacturing business? If YES, here is a complete sample shoe manufacturing business plan template & feasibility report you can use for FREE .
There is hardly anyone on the face of the earth who doesn’t wear shoes. Now imagine the amount of money those who are at the helms of the shoe manufacturing affairs make massive money . Making a launch into the shoe manufacturing industry can make just about anyone wealthy.
This is because of the huge market that exists all around the world. One of the things that you will need to do as you look to start a shoe manufacturing business is to write a business plan.
1. industry overview.
The any human you find in any street in the united states of America, and in any developed countries and of course the average person you found in developing and undeveloped countries would put on one form of footwear or the other.
Shoes cum footwear could be pure leather, synthetic leader, fabric or rubber. This goes to show that there is indeed a very large market for shoes in our world; hence loads of investors cum aspiring entrepreneur are pitching their tent in the shoe & footwear manufacturing industry.
Businesses in the shoe and footwear industry manufacture footwear for men, women and children. They are involved in manufacturing shoe and footwear in different forms such as rubber and plastic footwear, protective footwear (Safety boots), house slippers and slipper socks.
Companies in this line of business also manufacture men’s or women’s footwear specifically designed for casual, formal and work environments et al. These products also include men’s or women’s shoes with rubber or plastic soles and leather or vinyl uppers.
Research conducted by IBISWORLD shows that the Shoe & footwear manufacturing industry in the United States has a low level to moderate level of concentration. The US shoe and footwear manufacturing industry is concentrated: the top 50 companies account for more than 95 percent of sales.
New Balance and Allen Edmonds who are considered to be the two dominant players in the industry are estimated to account for an estimated 35.3 percent of the revenue generated in industry. This low-to-moderate concentration reflects a fragmented market that has a mix of a few large companies and many small industry operators specializing in higher valued-added footwear.
The largest global footwear companies, such as Nike and Adidas, manufacture nearly all of their products outside of the country. This practice has increased over the past few years as large manufacturers discontinue production in the United States, instead focusing domestic activities on design and wholesale of footwear.
The Shoe & Footwear Manufacturing industry is indeed a major sector of the economy of most countries in the world (United States of America, Italy, France, united kingdom , China and India et al).
Statistics has it that in the United States of America alone, the Shoe & Footwear Manufacturing industry generates a whooping sum of well over $2 billion annually from more than 876 registered and licensed big scale shoes and footwear manufacturing companies scattered all around the United States of America.
The industry is responsible for the employment of well over 10,416 people. Experts project the shoe and footwear manufacturing industry to grow at a -2.7 percent annual rate. In the United States, men’s footwear accounts for about 50 percent of sales, women’s for about 20 percent, and athletic and other footwear for about 30 percent.
The establishment in this industry that has a dominant market share in the United States of America are; New Balance and Allen Edmonds.
Over and above, the shoe and footwear manufacturing industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business.
You can chose to start on a small scale in small shoe and footwear making workshop or you can chose to start on a large scale with a standard shoe and footwear manufacturing factories both in the United States of America and in countries in Asia where you can get cheaper labor and raw materials.
Micah Smith® Shoes & Footwear, Inc. is a standard and registered shoe & footwear manufacturing company that will be located in Little Rock Arkansas; in an ideal location highly suitable for the kind of business we want to establish. We have been able to lease a facility that is big enough (a 20 thousand square foot facility) to fit into the design of the kind of standard shoe and footwear manufacturing company that we intend launching.
Micah Smith® Shoes & Footwear, Inc. will manufacture a wide range of footwear for men, women and children. We will be involved in manufacturing shoe and footwear in different forms such as rubber and plastic footwear, protective footwear (Safety boots), house slippers and slipper socks. We are set to services a wide range of clientele not just in the United States of America, but also all parts of the world.
We are aware that there are several large and small shoes and footwear manufacturing companies all around the United States of America, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.
Micah Smith® Shoes & Footwear, Inc. will ensure that all the shoes and footwear that leaves of factory are of the highest quality and highly durable and affordable.
We want to build a business with a wide range of clientele base cut across people of different financial status. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base may grow to.
Micah Smith® Shoes & Footwear, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our customers.
Micah Smith® Shoes & Footwear, Inc. is a family business that is owned by Micah Smith and his immediate family members.
Micah Smith has a Diploma in shoe and footwear Making and a B.Sc. in Business Administration, with well over 15 years of experience in the shoe and footwear manufacturing industry, working for some of the leading brand in the United States. He will be bringing in his vast hands – on experience to build Micah Smith® Shoes & Footwear, Inc.
Micah Smith® Shoes & Footwear, Inc. is in the shoe and footwear manufacturing industry to manufacture a wide range of footwear for men, women and children. We will be involved in manufacturing shoe and footwear in different forms such as rubber and plastic footwear, protective footwear (Safety boots), house slippers and slipper socks.
We are set to services a wide range of clientele not just in the United States of America, but also all parts of the world and of course to make profits, which is why we will ensure we go all the way to give our clients and potential clients options.
We will do all that is permitted by the law of the United States to achieve our business goal, aim and ambition of starting the business. Our product offerings are listed below;
Our Business Structure
Micah Smith® Shoes & Footwear, Inc. do not intend to start a shoe and footwear manufacturing business like the usual small scale shoe and footwear craft shops around the street corner; our intention of starting a shoe and footwear manufacturing company is to build a standard and one stop shoe and footwear manufacturing company in Little Rock Arkansas.
Although our shoe and footwear manufacturing company might not be as big as Nike, Puma, Adidas, Clarke®, New Balance and Allen Edmonds et al, but we will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.
We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
Merchandize Manager
Sales and Marketing Manager
Chief Executive Officer – CEO:
Admin and HR Manager
Factory Manager:
Shoe and Footwear Designers and Making Experts
Accountant / Cashier:
Client Service Executive
Micah Smith® Shoes & Footwear, Inc. is in business to become one of the leading shoe and footwear manufacturing companies in the United States of America and we are fully aware that it will take the right business concept, management and organization – structure to achieve our goal.
We are quite aware that there are several large and small scale shoes and footwear manufacturing companies all over the United States of America and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.
Micah Smith® Shoes & Footwear, Inc. employed the services of an expert HR and Business Analyst with bias in the manufacturing industry to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Micah Smith® Shoes & Footwear, Inc.;
Our core strength lies in the high quality of our finished shoes and footwear, the power of our team and the state of the art and well – equipped shoe and footwear manufacturing factory that we own. We have a team of highly trained and experienced shoes and footwear designers and makers and support staff members that can go all the way to produce top notch shoes and other footwear.
We are well positioned in the heart of Little Rock – Arkansas and we know we will attract loads of clients from the first day we open our shoe and footwear manufacturing company for business.
A major weakness that may count against us is the fact that we are a new shoe and footwear manufacturing company and we don’t have the financial capacity to compete with multi – million dollars shoe and footwear manufacturing companies such as Nike, Puma, Adidas, Clarke®, New Balance and Allen Edmonds et al when it comes to manufacturing shoes and footwear at a rock bottom prices.
So also, we may not have enough cash reserve to promote our shoe and footwear manufacturing company the way we would want to do.
The fact that we are going to be operating our shoe and footwear manufacturing company in Little Rock – Arkansas provides us with unlimited opportunities to sell our furniture to a large number of individuals and corporate organizations.
We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our shoe and footwear manufacturing workshop or showroom; we are well positioned to take on the opportunities that will come our way.
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power.
Another threat that may likely confront us is the arrival of a new shoe and footwear manufacturing company in same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.
One common trend in the shoe and footwear manufacturing industry is that the demand for its product is driven by fashion, demographics, and of course consumer disposable income. The profitability of individual shoe and footwear manufacturing companies depends on their ability to design and market shoe models that effectively target consumers’ tastes and preferences.
Large shoes and footwear companies have economies of scale in distribution and marketing and small scale shoes and footwear companies can compete successfully by crafting customized shoes and footwear based in their client’s preference.
Going forward, shoes and footwear brands will have to position themselves to cater to a stronger middle class market. It has been projected that by the year 2030, the majority of the world’s population will be part of the middle class, primarily due to a drop in the amount of people living in extreme poverty.
With this development, there will be influx of new consumers and this will put pressure on product developers to meet their unfamiliar preferences and needs. Developed economies placing their products in emerging markets will also have to adjust their pricing strategies to compete with local low-price manufacturers.
Lastly, as part of
Perhaps it will be safe to submit that the shoe and footwear manufacturing industry is amongst one of the industry that has the widest range of customers; almost everybody on planet earth need one form of footwear or the other. It is pretty difficult to find someone in the United States and of course in other developed countries that don’t have shoes and other footwear.
In view of that, we have positioned our shoe and footwear manufacturing company to service the clientele in the United States of America and other parts of the world.
We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We in the shoe and footwear manufacturing industry to manufacture a wide range of shoes and footwear for the following people;
Our Competitive Advantage
A close study of the shoe and footwear manufacturing industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative with your designs and market approach, customer centric and proactive if you must survive in this industry.
We are aware of the stiffer competition and we are well prepared to compete favorably with other leading shoe and footwear manufacturing companies in the United States and the globe.
Micah Smith® Shoes & Footwear, Inc. is launching a standard shoe and footwear manufacturing company that will indeed become the preferred choice of residence of Little Rock Arkansas and every other location where our showrooms and outlets will be opened.
Our shoe and footwear manufacturing company is located in an ideal property highly suitable for the kind of manufacturing company that we want to run. We have enough parking space that can accommodate well over 30 cars / trucks per time.
One thing is certain, we will ensure that we manufacture a wide range of shoe and footwear products in our factory at all times. It will be difficult for customers to visit our shoe and footwear showroom and not see the type of shoe and footwear that they are looking for.
One of our business goals is to make Micah Smith® Shoes & Footwear Inc; a one stop shoe and footwear manufacturing company. Our excellent customer service culture, showrooms, online store, various payment options and highly secured facility will serve as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category ( startups shoe and footwear manufacturing companies ) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
Micah Smith® Shoes & Footwear, Inc. is in business to manufacture and retail a wide range of shoes and footwear in the United States of America and other parts of the world. We are in the shoe and footwear manufacturing industry to
One thing is certain when it comes to shoe and footwear manufacturing business, if you are into the manufacturing or various types of shoes and footwear, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in the United States of America and of course the rest of the world and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.
We have been able to critically examine the shoe and footwear manufacturing industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in Little Rock – Arkansas.
Below are the sales projection for Micah Smith® Shoes & Footwear, Inc., it is based on the location of our business and other factors as it relates to shoe and footwear manufacturing start – ups in the United States;
N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor manufacturing or retailing same shoe and footwear products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
Before choosing a location for Micah Smith® Shoes & Footwear, Inc. we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become one of the preferred choice for consumers not only in Little Rock – Arkansas, but also throughout the United States and the globe.
We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.
We hired experts who have good understanding of the shoe and footwear manufacturing industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.
In other to continue to be in business and grow, we must continue to manufacture and sell the shoes and footwear that are available in our showrooms which is why we will go all out to empower or sales and marketing team to deliver. In summary, Micah Smith® Shoes & Footwear, Inc. will adopt the following sales and marketing approach to win customers over;
Despite the fact that our shoe and footwear manufacturing company and showroom is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our shoe and footwear manufacturing company.
Micah Smith® Shoes & Footwear, Inc. has a long term plan of opening our showrooms in various locations all around Little Rock Arkansas and other key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Little Rock – Arkansas before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Micah Smith® Shoes & Footwear, Inc.;
Aside from quality, pricing is one of the key factors that gives leverage to shoe and footwear manufacturing company, it is normal for consumers to go to places (shoe and footwear manufacturing companies and showrooms) where they can get shoes and other footwear at cheaper price which is why big player in the shoe and footwear manufacturing industry like Nike, Puma, Adidas, Clarke®, New Balance, Allen Edmonds and co will always attract loads of corporate and individual clients.
We know we don’t have the capacity to compete with Nike, Puma, Adidas, Clarke®, New Balance and Allen Edmonds et al, but we will ensure that the prices and quality of all the shoes and footwear products that we manufacture and are available in our showroom are competitive with what is obtainable amongst shoe and footwear manufacturing companies within our level.
The payment policy adopted by Micah Smith® Shoes & Footwear, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Micah Smith® Shoes & Footwear, Inc. will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for the purchase of our products.
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.
As for the detailed cost analysis for starting a shoe and footwear manufacturing business; it might differ in other countries due to the value of their money. This is the key areas where we will spend our start – up capital on;
We would need an estimate of $950,000 to successfully set up our shoe and footwear manufacturing business in Little Rock – Arkansas. Please note that this amount includes the salaries of all the staff for the first month of operation.
Generating Funding / Startup Capital for Micah Smith® Shoes & Footwear, Inc.
Micah Smith® Shoes & Footwear, Inc. is a family business that is solely owned and financed by Micah Smith and his immediate family members. We do not intend to welcome any external business partners, which is why we have decided to restrict the sourcing of the start – up capital to 3 major sources.
These are the areas we intend generating our start – up capital;
N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $700,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting Micah Smith® Shoes & Footwear, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to manufacture durable and quality shoes and footwear and to retail our wide range of quality shoes and footwear a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Micah Smith® Shoes & Footwear, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare is well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.
Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.
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According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.
“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”
Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.
The four main types of business plans are:
Internal business plans, strategic business plans, one-page business plans.
Let's break down each one:
If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.
Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.
Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.
Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.
As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .
Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.
Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).
A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.
Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:
Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?
The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.
Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.
A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.
For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.
How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.
What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.
Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”
A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.
“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”
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Traditionally, a marketing plan includes the four P's: Product, Price, Place, and Promotion. For a shoe store business plan, your marketing strategy should include the following: Product: In the product section, you should reiterate the type of shoe store company that you documented in your company overview.
Shoe Store Business Plan PDF Example. Juan. May 29, 2024. Business Plan. Creating a comprehensive business plan is crucial for launching and running a successful shoe store. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your shoe store business's identity, navigate the ...
A shoe store business plan is a plan to start and/or grow your shoe store business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. You can easily complete your Shoe Store business plan using our Shoe Store Business Plan Template here.
A solid business plan must include detailed financial information such as projected income, expenses, cash flow, and balance sheets. As part of your business plan, it will be necessary to forecast the revenue for your shoe store. It's important to create a revenue forecast that is relevant and trustworthy.
Our Shoe Business Plan Templates ... Download this business plan template . Template 2: Company Overview. The Company Overview layout serves as the blueprint for your business identity. It conveys your vision, mission, and strategic goals. It also introduces your startup summary, detailing the specific market gap you aim to address.
This should include up-to-date statistics and an analysis of emerging trends in the shoe retail market, as illustrated in our shoe store business plan template. Your business plan should articulate your vision clearly. Define your target market (such as fashion-conscious individuals, athletes, professionals), and establish your store's unique ...
The Shoe Brand Building Business Plan - 7 Steps . Building a business plan can seem like a daunting task. It helps to divide your shoe brand business plan into smaller parts. Here are seven parts your shoe brand business plan must include. 1. The Footwear Product plan 2. The Shoe Manufacturing plan 3. The Sales plan 4. The Marketing plan 5.
4: PLANNING YOUR SHOE BUSINESS. When and how to launch your shoes into the market: delivery seasons. Financial modeling for your shoe business. Calculating profit margins. 5 : MANUFACTURING AND IMPORTING YOUR SHOES. Finding a factory to make your shoes: Footwear agents and trading companies. The shoe development process.
Starting your shoe store business will cost you between $9,000 and $38,000. If you're going for the minimum budget, you'll most likely start from a home-based office with a strong e-commerce website and online stores at major marketplaces like Amazon and eBay.
In This Article. How to Start Your Own Shoe Business in 10 Steps. Step 1: Research the Industry. Step 2: Find the Right Niche. Step 3: Choose Your Business Model. Step 4: Develop Your Business Plan. Step 5: Come Up With Your Business Name and Brand. Step 6: Find a Place for Your Shoe Store and Facilities.
Here are the key steps to consider when writing a business plan: 1. Executive Summary. An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.
Identify your target customer. Knowing your target customer is essential for any business, including a shoe business. Conduct market research to identify the demographics, preferences, and buying behavior of your potential customers. This will help you tailor your products, marketing strategies, and branding efforts to appeal to your target ...
How to Write a Shoe Business Plan in 7 Steps: 1. Describe the Purpose of Your Shoe Business. The first step to writing your business plan is to describe the purpose of your shoe business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind ...
A shoe store business plan needs a straightforward executive summary. This part of your plan is the first thing investors and partners see, and it should clearly outline what your store is all about. It's where you explain what makes your shoe store different and worth investing in. We recommend using a two-slide PowerPoint format for this ...
Women's Shoe Store Business Plan. Passion Soles is an upscale shoe store, offering an unmatched and extensive selection of women's shoes. Selling shoes can be a lucrative business. In recent years, the shoe market has emerged as a unique and specialized retail industry built on style, scarcity, and presentation. If you have a knack for tracking ...
Open for Business. 1. Choose the Name for Your Shoe Business. The first step to starting a shoe business is to choose your business' name. This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable.
Step One - Find Your Audience. The shoe market is a vast field. From men's dress shoes to women's casual shoes or high heels, everyone needs shoes — and that means your audience can vary dramatically. Avoid trying to appeal to more than one audience when starting a shoe company. Find your niche and master it before thinking about expansion.
This comprehensive guide will help you construct a sales and marketing plan for your shoe store's business plan. We'll start with a thorough market analysis to understand competitors' and potential customers' needs. Then, we'll focus on establishing your store's brand identity and strategic positioning. Lastly, we'll explore ...
The cost to start a shoe business varies greatly, typically ranging from $10,000 to $200,000, depending on scale, location, and inventory. Conclusion. Crafting a solid business plan for your shoe company is the first step to success. It sets a clear roadmap and defines your market, competition, and financials.
Build your credit: Maintain a good credit score to improve your chances of securing loans with favorable interest rates. 7. Set pricing for shoe services. Setting the right price for shoe services is crucial in ensuring your business remains competitive while securing a profit.
The shoe price point is $60-$300. Saks: this department store caters to the high class, older crowd. Shoes range from $75-$400. The buying habits for fashion-conscious women consist of typically buying at least one pair of shoes per month. Women generally purchase a pair of shoes to go with a specific dress.
Below are the sales projection for Micah Smith® Shoes & Footwear, Inc., it is based on the location of our business and other factors as it relates to shoe and footwear manufacturing start - ups in the United States; First Fiscal Year-: $350,000. Second Fiscal Year-: $750,000. Third Fiscal Year-: $1 million.
A shoe shop business plan is a written document that sets out the commercial, operational and financial objectives of the company over the next 3 to 5 years. It consists of two main parts: A written part that presents, in detail, your shoe shop business, the team, your strategy, and your medium-term objectives.
Every business plan needs a company description—aka a summary of the company's purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most. 4. Explain and show how the company will make money