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Cover Letter March 3, 2012 Kerry Hall, Regional President Texas Capital Bank 114 West Seventh Street, Suite 300 Austin, Texas 78701

Dear Ms. Hall: As we previously discussed during our meetings, I am proposing the business plan to support a loan in the amount of $150,000 for startup capital for my company, Darling Owla, LLC. I am requesting an additional line of credit in the amount of $300,000, required for core stock inventory and start up costs. Thank you for your consideration. I look forward to hearing back from you, and establishing a relationship with this bank. Sincerely,

Jessica Wooten Darling Owla, LLC. 1419 South Congress Ave Austin, Texas 78704 (706) 9361962 Enclosures

Name of the Business Darling Owla, LLC

Prepared by: Jessica Wooten Owner: Jessica Wooten Darling Owla, LLC 1419 South Congress Ave Austin, Texas 78704 (706) 9361962

Date Prepared: March 3, 2012

All rights are reserved. Private and Confidential. No part of this business plan can be copied or distributed with out prior written consent of Darling Owla, LLC. The content of this plan is confidential and is the sole property of Darling Owla, LLC. Any reproduction of the content of this report without written consent of Darling Owla, LLC., is prohibited.

Contents Executive Summary Business Overview Critical Success Factors The Management Team The Market Financial Plan Management Plan Business Structure Management Team Management Compensation Personnel Compensation Key Advisors/Directors Communication Governmental Approvals Merchandising/Product Plan Merchandise/Product Description Unique Characteristics Proposed Lines Six-Month Merchandise Plan Merchandise Assortment Market Trips Markup/Markdown Policies Brick-and-Mortar Location Plan Physical Location Location Features Target Market Considerations Leasehold Improvements Other Location Costs Signage

Web Plan Summary Overview Internet Strategies Online Marketing Strategies Web Development and Hosting Costs

Marketing Plan Market Analysis Summary Market Needs Customer Profile Future Markets Competitive Analysis Competitive Advantage Pricing Pricing Strategy Price List Pricing Policies Market Penetration Brand Strategy Advertising and Promotion Sales Strategy Publicity Promotional Events Evaluating Marketing Efforts Financial Plan Sales Forecast Cash Requirements Break-Even Analysis Projected Financial Statements Monthly Cash Flow Statement Year-End Income Statement Year-End Balance Sheet Ratio Analysis Retail Operations Reporting Policies Employee Development Staffing Levels Hours/Days of Operation Inventory Control Security Systems/Shrinkage Control


Executive Summary

Business Overview Darling Owla LLC was started as a legal liability company in January 2012. It is a retail store offering women’s contemporary apparel ranging in size 0-12/14 and SML, for women who are looking for eclectic merchandise at various price points. The product offering is made up of apparel and accessories for the young woman that has a laidback, hip and fun lifestyle. Prices will range from as little as $25 to $450-$500 retail. The store will be located at 1419 South Congress Avenue, in the eclectic neighborhood of South Congress aka “Soco� Austin. It will be centered in the shopping district near indirect competitor Stag and and three blocks up from competitor Feathers Boutique. This location is the central hub for eclectic merchandise, and spread amongst retailers, art and film venues, dine in restaurants as well as airstream food trailers. This area sees a lot of foot and motor vehicle traffic. On street parking, parking lots, and garages are available. Darling Owla, LLC will be managed by its owner Jessica Wooten. She will also act as the senior buyer. She has employed an assistant manager, a manager in training and two sales associates. The management team has more than 5 years experience in retail management and an educational background in fashion or related field. Darling Owla will have an advisory board in order to guide the success of this business. The advisory board is listed in the management plan. Darling Owla will stand out amongst competitors in this area by, bringing in up and coming designers as well as brands that are not accessible to this city. All brands that I have hand picked for my customers are unique, eclectic and exceed the needs and expectations of my consumers. The Darling Owla clientele are very diverse and there is something for everyone, such as, product assortments, price range, trends, and exclusive merchandise items. Darling Owla, LLC., is requesting a loan in the amount of $150,000 and. A line of credit in the amount of $300,000 is also requested. The funds from the loan will be used to purchase opening inventory and cover start up costs for opening the business. Management Plan

The Management Team The key personnel at Darling Owla, LLC, are the owner/senior buyer, assistant manager, manager in training and the sales representatives. Owner/President/Senior Buyer Jessica Wooten holds a bachelor of fine arts degree in fashion marketing and management from Savannah College of Art and Design. She has a background in buying, visual merchandising, customer service, fine arts, public relations, and graphic design. Her work experience and educational background will contribute to the success of her company. Jessica will be responsible for buying merchandise and working with vendors. She is also responsible for visual merchandising, markdowns, recruiting, training and budgets. Assistant Manager Lana Gold earned a bachelor of fine arts degree in knitwear design from Academy of Art San Francisco. She has four years experience in retail management and two years experience in

fashion design. Miss Gold is responsible for daily operations at Darling Owla, including but not limited to opening and closing, sales floor manager, associate manager, overseeing customer service, and check goals daily. Lana will be working thirty-five hours a week. Lana Gold signed an agreement stating that she will not open a store within a fifty mile radius for a period of no less than four years from the date of termination. Manager in Training Ellie Fox earned a bachelor of fine arts degree in film from New York University. She has two years of retail management experience. Miss Fox is responsible for opening and closing procedures, assisting in associate managing, merchandise, selling, and visual display. Ellie will be working thirty hours a week. Miss Fox signed an agreement stating that she will not open a store within a fifty mile radius for a period of no less than four years from the date of termination. Part time Sales Associates Darling Owla will employ two part time sales associates. The sales associates should have one to two plus years experience in a fashion retail setting. Their responsibilities will be folding, and displaying merchandise on the floor. They will also be responsible for assisting customers and customer follow ups, and social media. Each sales associate will work up to twenty hours a week. In store recruiting will be available to fill these positions. Management Compensation Darling Owla will employ an assistant manager and manager in training. The assistant manager will start with a fixed salary of $40,000 per year with health insurance and a week of paid vacation. Health insurance is reflected in the financial statement of $300 per month. The manager in training will start with a fixed salary of $30,000 per year and employee health insurance benefits and one week of paid vacation. Compensation and Ownership The owner will not be drawing any money the first 12 months. All profits made from Darling Owla will go towards employees and operations fees. After 12 months the owner will draw $2000 per month. Personnel Compensation Part time sales associates will earn $12 per hour for twenty hours per week.

Key Advisors/ Directors

Key Advisors/Directors Legal D. Todd Wooten The Blake Law Firm 9442 Capital of Texas Hwy Plaza 500-181 Austin, Texas 78759

Accounting Elaine Xu Maxwell Locke and Ritter LLP 401 Congress Avenue Suite 1100 Austin, Texas 78701

Insurance Alexander Youn Watkins Insurance Group 3834 Spicewood Springs

Retailing Anna Reed Store Owner- Girl Next Door 250 West 2nd Street

Road #100 Austin, Texas 78759

Austin, Texas 78701

Medical Insurance Alexander Youn Watkins Insurance Group 3834 Spicewood Springs Road #100 Austin, Texas 78759

Marketing Kane Williams K.E.W Marketing 1000 Congress Avenue Austin, Texas 78701

Communication Open dialogue and frequent communication is important to the success this business. Written policies and agreements as well as updated marketing, and all receipts will be provided and on file. These documents are to be reviewed by each employee every morning and updated at closing. Weekly staff meetings are scheduled at the end of each week, this is especially important during high volume months, and training workshops.

Local License And Permits Darling Owla, LLC., is required by the state of Texas to have a business license and permit in order to conduct business in the city of Austin.

Merchandising/Product Plan

Merchandise/Product Description Darling Owla will carry contemporary women’s apparel and accessories for women size 012/14. Our clientele is the woman who has an ever changing sense of style, she’s not afraid to try something new and different. She is very eclectic and has a laid back attitude while being a contradiction, she is a lady and a rebel. The product lines will differ from our competitors because we offer merchandise items that will be exclusive to our store only.

Unique Characteristics Darling Owla will offer up and coming designers, eclectic merchandise, and product lines exclusive to this region.

Proposed Lines/ Vendors Private label brand, Nudie Jeans, My pet square, Dahlia, Darling, Afia, Whit, Citizens of humanity, Dear Creatures, Peter Jensen, Supersocial, Wood Wood, Dusen Dusen, Won Hundred, Something else, Grey Antics, Petiole, Mara Hoffman, Mink Pink, Stolen Girlfriends Club, Funktional, One Teaspoon, Luxury Jones, Jeffrey Campbell, Gee Wa Wa, Rachel Comey, Dream Collective, In God we Trust, Coclico, Cambridge Satchel Company, Flea bags, Fjallraven Kanken, Baggu, Dolce Vita, Lucky Penny, Herschel Supply Co, Killer Collection, Karen Walker, 80%20%, Nettie Kent.

Six-Month Merchandise Plan The six month merchandising plain is based on our best selling months, which are January, February, March, April, May and June. These are our highest selling months because of the events that occur during these months such as, SXSW, music and film festivals, outdoor activities, and high tourist volumes.

Merchandise Assortment Tops: 17% Bottoms: 15% Dresses:15% Skirts: 10% Shoes: 14% Jewelry: 17% Handbags/Backpacks: 13%

Market Trips Capsule Women’s. New York February and September.

Focus Apparel and Accessories Show. Los Angeles January and October. Project New York City. March Merchandise apparel orders will be taken at apparel market trips. Travel times and expenses are listed in the financial plan. New merchandise will be purchased with open to buy, new merchandise will be calculated based on six month plan. Market trips will be taken annually. Markup/Markdown Policies Markups will be determined by the keystone method. This method will set retail price at double the cost of wholesale, which will determine the selling price. The store will markup merchandise at 200% based on cost. The majority of markup costs will be in accessories. Markdowns will be regulated by the owner and the assistant manager. Markdowns will only be taken when merchandise needs to be pushed out. We are being conscious with our buys during this economy, therefore we are not going to buy so much merchandise that we basically end up having to give away. We will offer small discounts during holidays, customer appreciation days, and end of season sales. These discounts will be between 10% and could go up to 40% off.

Brick-and-Mortar Location Plan Physical Location The store will be located at 1419 South Congress Avenue, in Austin Texas. It will be located in the central shopping district. This neighborhood is eclectic, funky, post retro, and hip. It is a place for young, hip and carefree single men and women between the ages of eighteen and thrity five. Soco houses a lot of art galleries, unique boutiques, music venues, theaters, restaurants, food trailer parks and outdoor arenas. Soco is surrounded by developing urban areas but it has not changed and is more itself than ever. This area has heavy foot and motor traffic, which is great because Darling Owla will definitely gain a lot of attention. On street parking, parking lots and parking garages are accessible from Darling Owla’s location.Every first Thursday of the month, retailers are encouraged to stay open until 10 p.m. An advantage of being in Austin for a retailer is that it is a fast growing entrepreneurial area, it is great for new retailer.

Location Features Darling Owla will be on the right hand side of the street. It is accessible to on street parking, as well as a parking lot. The exterior of the building is a white washed brick, the exterior houses four large windows for visual merchandising. The front doors are constructed of glass and Darling Owla signage is right above the double doors. The store itself is 3,461 sqaure feet. The sales floor is approximately 2,346 square feet, display area (windows) are 54 square feet, inventory storage is 144 square feet, the remaining space includes the restroom at 117 square feet, the break room which is 352 square feet, and four dressing rooms at 448 square feet. The store design is inspired by the owners love of nature, dandelions, and her fashion blog. The lease is about $6 per square foot. Utilities are not included. The store has a round circular navigation and a rectangular grid track in the back area of the store. The benefit of leasing this building is that the leasee will take care of maintenance, insurance and taxes. In the financial plan it will cover these expenses. The lease is for a period of five years and does list the option to renew for an additional two years.

Target Market Considerations Darling Owla’s goal is to offer unique merchandise that reflects the lifestyle of our customer and the eclectic vibe of South Congress. We offer merchandise at various price points to accommodate our target markets budget, because she is so young, diverse and in different stages of her career. Darling Owla prides itself at offering outstanding customer service, quality products and satisfying our consumer needs. We are confident that we will exceed our profit goals and will become the best retailer in Austin and specifically South Congress.

Leasehold Improvements Leasehold improvements include wall paper, updated flooring, lighting, painting of the exterior, glass doors, modern cash wrap, and reconstructed dressing rooms. The total costs of these improvements will be $20,000/ An additional $15,000 will be spent on furniture, display racks, tables, and office equipment.

Other Location Costs/ Signage The store name is located above the double glass doors on the exterior of the store. The sign is made of brushed steel. Signage will cost approximately $700.

Web Plan Summary Overview Darling Owla will have a webpage, the website will not initially offer online shopping. The site will contain an about me section, brand information, events, blog, social media tabs, and a contact section. The primary function of the web page will be for events, promos, and to inform our customers on what is new and what is happening within our store. The company website will launch prior to opening the store. Internet Strategies Social media is an important marketing and communication tool Darling Owla takes advantage of to connect with consumers, and to get ourselves out in the market place. We will use social media sites such as Facebook, Twitter, Tumblr, and Pinterest. These social media sites will update our consumers on new products, events, and impact our relationship with consumers and how we react to their reviews of Darling Owla. Online Marketing Strategies Darling Owla consumers are young therefore she is probably not that responsive to email blasts, we will send out unique print advertisements designed by the owner Jessica. We will also send e-vites through social media sites. Web Development and Hosting Whimsical Design Studios will be responsible for the company’s web and browser maintenance. They will also be responsible for updating the website as well as designing an innovative online boutique in the future. Costs In the future Darling Owla will take on two web merchandisers to take orders and ship merchandise to consumers. Also, an additional graphic designer and web services would be something that we would have to obtain.

Marketing Plan

Market Analysis Summary Darling Owla’s customer profile is a young woman age 20 to 30 who wears sizes ranging from 0 to 12/14 and small, medium, large. She is diverse and comes from all ethnic backgrounds. The average income for single women in Austin is $30,000 to $48,000 and for married women or women with combined incomes it is between $50,000 to $80,000. The Darling Owla consumer is primarily single and a college student, graduate, or in her early career. She is not afraid to spend a little more on quality or unique merchandise products. Our consumer is a contradiction she is a lady and a rebel, she has a laidback attitude and an eclectic sense of style. She is not afraid to try new fashion trends and she loves to stand out. In her free time she enjoys going to coffee shops with friends, outdoor dining, attending film and music festivals. Our consumer is creative and loves being surrounded by art and she enjoys are fun do it yourself project. Like her clothing style, her musical taste is also very eclectic, she will listen to genres such as indie, folk, hiphop, pop, jazz, blues, big band and musicals.

Market Needs Darling Owla will stand out within the competition in Austin because of our unique merchandise mix as well as our extensive research and knowledge with brand research. We did our research and will be the only store in Austin with these unique product offerings.

Customer Profile The 2010/2011 census shows that 70.4% of residents in and within a 5 mile radius of Austin are white, 11.8% are black, and 7.3% are other.

Future Markets Looking towards the future, Darling Owla will extend its merchandise offerings to a private label and a possible men’s brand extension. We will also open an online store based on need and demand.

Competitive Analysis South Congress has several boutiques and retailers that offer eclectic merchandise. This area is mostly comprised of vintage clothing and furniture stores. There is a men’s boutique who is the closet to Darling Owla in terms of merchandise, price levels and store concept, it is still considered an indirect competitor because it is targeted towards men. Another competitor is Feathers Boutique. Feathers is more along the lines of a direct competitor in terms of target market. This store differs from Darling Owla because it offers mostly vintage merchandise with a few contemporary independent apparel lines. The price levels are well below Darling Owla and the merchandise lacks the quality and uniqueness we are offering our consumers.

Competitive Advantage The competitive advantage that Darling Owla is bringing to South Congress is the merchandise we are offering. We are introducing new up and coming designers as well as brands that are not offered in this area. We are also bringing along established relationships with vendors that will allow us to offer our consumers exclusive product lines and styles.

Pricing/ Strategy/ Pricing Policies

Retail prices will range from $25 and will go up to $450 and capping at $500. As previously mentioned pricing is based on the keystone method. Markdowns will only be conducted when it is absolutely necessary to push old merchandise out of the store in order to make room for new merchandise. Markdowns will initially be at 10% and go up to 25% and eventually up to 50% off until we have sold enough merchandise to bring in new merchandise for the next month.

Market Penetration/ Brand Strategy To promote Darling Owla we will as a team create a press and media kit. We will distribute our kits to publicists, magazines, and internet sites. We will communicate a message to viewers that we are the best place in Austin to shop, especially for a young audience looking for quality and eclectic apparel, accessories, and outstanding customer service.

Advertising and Promotion Darling Owla is mainly relying on social media as a promotion and advertising tool. Our consumer is young and is not going to take the time out her carefree lifestyle to check the local paper. We will set aside $600 for local magazine ads, quarterly. The Darling Owla team will all be responsible for developing advertisement campaigns and getting them out to the media.

Sales Strategy In order to track our sales goals and daily sales reports we will have a POS system. Each sales associate as well as the assistant manager and manager in training will have iPads in order to record and keep up with their daily sales and customer interaction for that day. They are also responsible for keeping up with inventory for the day, and customer reactions to product lines. Associates are responsible for contacting customers during markdown periods and prior to

events. Publicity The owner and managers will be responsible for store events such as tradeshows, in store promos, product releases etc.

Promotional Events Promotional events will include but are not limited to tradeshows, designer appearance, customer in store parties, film screenings, styling nights and in store performances.

Evaluating Marketing Efforts Marketing efforts will be accessed monthly. We will adjust and adapt to the needs and demands of our consumers. Right now social media is our strongest option for our young and tech savvy customer.

Financial Plan

Sales Forecast Sales forecast is shown in the financial plan worksheets.

Cash Requirements Darling Owla, LLC is requesting a loan in the amount of $150,000. A line of credit of $300,000 has also been requested. The money from the loan will purchase opening inventory and cover start up costs for opening the business.

Break-Even Analysis

Projected Financial Statements Monthly cash flow statement (for at least one year and until the business shows a profit) Year-End income statement Year-End balance sheet Ratio analysis

Retail Operations Plan

Reporting Policies All associates and manager in training will report to assistant manager. The assistant manager will report to the store owner. If any incidents occur within the store the assistant manager is to report them and fill out an incident form within twenty four hours.

Employee Development It is important that all employees stay up to date on customer service skills, merchandise characteristics, and fashion trends. There will be employee workshops four times a year. The store owner will conduct these workshops with the guidance and direction of advisory board members and retail professionals.

Staffing Levels The owner/buyer, assistant manager, manager in training, and sales associates will be responsible for working the sales floor during high selling months and holidays. During regular hours of operation there will be two associates and at least one manager on the sales floor.

Hours/Days of Operation Darling Owla will be open seven days a week from 10:30 a.m. to 7:30 p.m. and every first Thursday of the month 11 a.m. to 10 p.m.

Inventory Control Inventory will be accessed two times a year, in December and July. During inventory the store owner and assistant manager will go over shipments, invoices, and pricing.

Security Systems/Shrinkage Control Darling Owla will establish a relationship with Austin City Police Department, in order to establish proper guidelines and regulations in the event of a robbery. We will also have security cameras as well as alarms. During high selling months and high traffic times we will bring in a security guard or police officer.

Appendix Resume for Jessica Wooten Resume for Lana Gold Resume for Ellie Fox Company Organizational Chart Store Layout Diagram Purchase Order Form

Sources Fashion Entrepreneurship Retail Business Planning, Second Edition. Michele M. Granger and Tina M. Sterling. 2012.

Store Layout and Design


Business Overview-Darling Owla  

Darling Owla business plan