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This is a hypothetical business venture. All figures, individuals and contracts represented are illegitimate and again, hypothetical. Do not distribute or reproduce this report or any portions of its content (idea, product design, plan).

Jessica Liao & Members


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EXECUTIVE SUMMARY ItBox is a company, founded in London, Ontario, specializing in an uniquely stylish glasses case that encompasses both quality and functionality. The ItBox is a rectangular glasses case made with fine cloth inner lining and 100% recycled leather cover complete with hidden magnets. Being able to fold down completely into a flat surface, the ItBox offers an unique compactness that overcomes the bulkiness often associated with conventional glasses cases. Considering the fact that the seven founding partners are full-time university students, ItBox will be operated as a part-time business. Our financial objective is to secure $7,000 worth of drawings in our second year of operations and $14,000 in our third year, with hopes of partially funding each of our university educations. Marketed as a high-end consumer good, ItBox conceptualizes understated luxury and caters to the needs of our style-conscious consumers. We aspire to establish ourselves as a luxurious lifestyle brand that customers associate with the modern urbane culture. Economic and social trends suggest an inclining demand for corrective vision, which opens up a niche in the market for glasses cases to accompany the increasing need for eyewear products. Eyewear though essentially a product of utility, has now become a fashion statement and a means of self-expression. The ItBox, with its stylistic design, serves as the perfect fashion accessory to mirror this paradigm shift. Our greatest source of revenue is generated primarily through our online sales and secondarily through boutique retailers in London, which include Weezi, Saffron Road, Lolita, Ryce Fashions and Leslie’s. With offshore outsourcing, our manufacturing costs are greatly reduced, therefore granting us the corporate capacity to focus on establishing brand awareness. Marketing initiatives that we will take on include Google and Paperandstitch.com ads, our sponsorship of the CAISA Fashion Show, commissioning of online blogs, YouTube partners and in-house social media. The bulk of our operating expenses will be spent on marketing and promotions in order to establish the desired luxurious brand image that justifies our retail price of $50. From a financial standpoint, ItBox is an extremely low-risk, low-investment business that has the potential to produce generous returns. It suggests a payback period of less than two months even in the most conservative projection. Our financial statements for our first three years of operations also project a promising growth of 20% in sales annually. Because of our low fixed costs and minimal overhead expenses, our profit margin reaches 57% in our high projection and manages to generate a net income just after the first year. Built upon a strong financial foundation, and upheld with effective operational and marketing strategy, ItBox is constructed as an innovative and feasible business venture.

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TABLE OF CONTENTS 1. INTRODUCTION 1.1 The ItBox ........................................................................................................................................... 7 1.2 Goals & Objectives ............................................................................................................................ 7 2.

2. INDUSTRY ANALYSIS 2.1 PEST Analysis..................................................................................................................................... 7 2.2 Competitor Analysis .......................................................................................................................... 9 2.3 Consumer Analysis ............................................................................................................................ 11

3.

3. OPERATIONS 3.1 Manufacturing .................................................................................................................................. 11 3.2 Packaging .......................................................................................................................................... 12 3.3 Shipping & Handling.......................................................................................................................... 12 3.4 Storage & Office Space ..................................................................................................................... 12 3.5 Protection of Goods .......................................................................................................................... 13 3.6 Inventory Management .................................................................................................................... 13 3.6.1 Sales Schedule ............................................................................................................... 13 3.6.2 Product Inventory .......................................................................................................... 14 3.6.3 Packaging Inventory ....................................................................................................... 14 3.7 Website ............................................................................................................................................. 15 3.8 Wholesale to Boutiques .................................................................................................................... 15 3.9 Communication................................................................................................................................. 16

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4. CORPORATE CAPACITY 4.1 Storage .............................................................................................................................................. 16 4.2 Delivery ............................................................................................................................................. 16 4.3 Packaging .......................................................................................................................................... 16

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5. HUMAN RESOURCES 5.1 Business Entity .................................................................................................................................. 17 5.2 Division of Responsibilities ............................................................................................................... 17

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6. MARKETING 6.1 The Concept ...................................................................................................................................... 18 6.2 SWOT Analysis .................................................................................................................................. 18 6.3 4P’s.................................................................................................................................................... 20 6.3.1 Product .......................................................................................................................... 20 6.3.2 Placement ...................................................................................................................... 21 6.3.3 Price ............................................................................................................................... 21 6.3.4 Promotions .................................................................................................................... 21 7. FINANCE 7.1 Profitability ....................................................................................................................................... 24 7.2 Cash Budgeting ................................................................................................................................. 24 7.3 Growth .............................................................................................................................................. 25 7.4 Risk 7.4.1 Inventory Risk ................................................................................................................ 26 7.4.2 Financial Risk .................................................................................................................. 27

7.

8.

8. DECISION 8.1 Contingency Planning ....................................................................................................................... 28 8.2 Future Growth .................................................................................................................................. 29

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9. CONCLUSION ................................................................................................................................................. 29

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1. INTRODUCTION 1.1 The ItBox ItBox is a company fortified around the central concept of understated luxury tailored to needs of the modern consumer. Made with 100% recycled leather, the ItBox is a collapsible alternative to the conventional glasses case. It captures form and function in a travel friendly design, which accommodates both spectacles and sunglasses regardless of size and style. (Exhibit 1)

1.2 Goals & Objectives ItBox seeks to establish itself as a lifestyle brand that customers identify with innovation, quality and design. As all seven partners are full-time students, this general partnership will be a part-time venture averaging 15 hours of work per week each. Our quantitative goal is to attain drawings of $7,000 in the second year and $14,000 in the third year to fund tuition.

2. INDUSTRY ANALYSIS 2.1 PEST Analysis Economic “The value of the optical industry has declined by 1.5% in 2009.1” Although the overall value of the optical industry has declined in the economic downturn, this decrease is caused by price reductions to stimulate sales and is not due to absence of demand. Secondary industry research also indicate an expected rebound and price increase in the subsector of sunglasses sales in 2011.2

The ItBox demonstrates versatility in its accommodation for varying sizes of optical frames, including larger sunglasses. This expected revival in demand for sunglasses will benefit our entry into the market. 1 2

“Spectacles-US.”Euromonitor. Ibid.

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“The value of the North American leather goods industry has declined by an annual average of 10.6% to a total decrease of $2.9 billion for the last five years.3” The decline of the North American leather goods industry has led companies to seek more competitively priced alternatives, such as offshoring.

ItBox offshore outsources manufacturing to Ah Yin Tannery in India, which results in lower production costs and a larger profit margin.

Social “The use of leather has suffered controversy from animal rights activists and environmentalists.4” Although there has been expressed opposition to the use of leather by-products, the focus of controversy is more centred on the fur industry. Leather is more socially accepted because intuitively, there exists a moral difference between active slaughtering and the use of an already deceased animal’s hide5. Ah Yin Tannery supplies recycled leather as the main material; we do not condone animal cruelty but we do see value in reusing this material that would otherwise waste away. “The outsourcing of materials and labour to India is considered controversial.6” There are consumers who are opposed to goods not made locally, however, secondary research indicates that corporate social responsibility (CSR) does not significantly influence a company’s financial performance7. However, to respond to these concerns, we will ensure high transparency of our manufacturing process. The website will include a profile of Ah Yin Tannery and its working environment, along with photos and videos of the production warehouse. 3

http://clients.ibisworld.com.proxy1.lib.uwo.ca :2048/industryus/default.aspx?indid=374 http://www.peta.org/issues/animals-used-for-clothing/leather-industry.aspx 5 Ibid. 6 Sen, Sankar and C.B. Bhattacharya. “Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Responsibilities.” 7 Ibid. 4

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Technological “The prominent use of computers has caused a general decline in eyesight and health.8” Declining eyesight exemplifies an increased need for spectacles. The necessity for spectacles is not diminished with use of contact lenses, as they are standard. Corrective laser surgery also induces a heightened sensitivity to sunlight, requiring sunglasses.This showcases an expansion of the optical industry, benefiting the ItBox as an optical accessory.

“From 2007 to 2009, online sales figures skyrocketed 32% and the growth is expected to continue.9” The popularity of online shopping has largely been attributed to consumers’ desire for convenience. In 2010, 51% of Internet users in Canada ordered goods to a total of 114 million orders, which is valued at approximately $15.3 billion10 and these numbers continue to grow.

The bulk of ItBox sales are through our webstore to assure product accessibility. In response to this trend, we will introduce flash sales to online consumers via newsletters.

2.2 Competitor Analysis There are three main competitors: wholesalers, specialty companies (e.g. Leatherology), and hand-made cases (e.g. vendors from e-marketplaces such as Etsy). ItBox’s main competitive advantage is the high-quality unique design that accommodates a wider range of frame sizes and styles.

8

http://abcnews.go.com/Health/Technology/story?id=1409940 “Consumer Lifestyles in Canada.”Euromonitor. 10 http://www.statcan.gc.ca/daily-quotidien/111012dq111012a-eng.htm 9

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Wholesalers Complimentary Luxury Brand Cases ItBox’s primary competitor is the complimentary case provided with the purchase of luxury brand eyewear. It is important to keep in mind that these cases are part of product packaging and are not purchased as a separate entity. Consumers of luxury brand glasses do not seek to purchase the individual case, nor do they have the option to do so. In contrast, the ItBox is our primary product and all marketing and promotional efforts are directed to branding.

No-Name Wholesale Wholesale search engine Alibaba, features a wide selection of cases at much lower prices, including one of similar design to the ItBox. However, ItBox and Alibaba differ in many respects: Alibaba services online wholesale, with minimum orders of 500, while ItBox targets the end consumer. In terms of consumer need, Alibaba caters to optical businesses looking for inexpensive complimentary cases. ItBox’s target market consists of individual consumers in search of a functional accessory with a focus on quality.

Specialty-market companies Specialty-market companies, such as Leatherology, are a direct competitor. However, their product, packaging, and services cater to an older market that is inconsistent with ItBox consumers. Their designs are also limited to accommodate a conventional optical frame-size and exclude the sunglasses market.

Handmade cases Handmade case makers include individual vendors on Etsy.com and other independent designers. While these companies also emphasize the uniqueness of their product, the majority of cases offered are cloth-based, fitting only spectacles. Additionally, the hard alternatives do not offer a collapsible feature.

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2.3 Consumer Analysis Market Research(Exhibit 2) From our survey, 93% of individuals own eyeglasses, sunglasses, or both and 71% find it inconvenient to carry their case around. 34% of participants have purchased noncomplimentary cases in the past. Of these, 13% purchased three or more. These results suggest a viable market.

Target Market: The ItLifestyle ItBox realizes a niche consumer base of young professionals who are image conscious and have discretionary income to spend on products that deliver functionality, innovation, and quality. Our consumers look to distinguish themselves in a professional environment. Without saying, they are owners of glasses and sunglasses looking for a more compact case to carry them in.

3. OPERATIONS 3.1 Manufacturing We have outsourced production to Ah Yin Tannery, a manufacturer in India (Exhibit 3). Each product costs approximately $2.67 Canadian Dollars (Exhibit 4).

Ah Yin Tannery specializes in the manufacturing of high-end leather accessories for a number of notable brand names (e.g. Kenneth Cole). During the selection and manufacturing process, sheets of leather marked by minimal wear are deemed unusable and would otherwise be disposed. This is the source of our recycled leather, the reuse results in higher margins due to low cost and is a way to satisfy sustainable business practice responsibilities. In cases of unforeseeable large orders, we can negotiate with our supplier for an express order, which requires a manufacturing period of less than 30 days. However, as stated in the contract, Ah Yin Tannery reserves the right to charge a premium.

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3.2 Packaging We regard packaging as an extension of our product and as such, it must reflect the understated sophistication of the ItBox design. To emphasize these features, we have selected a subdued dark brown colour scheme for our external packaging (Exhibit 5). To further enforce the personal connection between our consumer and our product, we wanted to create a gift-like aspect by enveloping the product with metallic gold tissue paper. Our company’s business card will double as an introduction to our product and our concept, as it contains how-to-use instructions on the back (Exhibit 6).

Due to the importance of our branding, packaging comprises of several components (Exhibit 7). We chose not to outsource the tissue paper because the overseas shipping of such heavy materials is extremely expensive.

3.3 Shipping & Handling The order is FOB London; Ah Yin Tannery will be fully responsible for all shipping related costs from Kolkata, India to our specified address in London, Ontario. Cases will also be colour sorted to avoid risks of colour bleeding and packaged in bubble wrap. Any defects or damages incurred during the shipment process will be the liability of Ah Yin Tannery.

3.4 Storage & Office Space Due to our small-scale operations, a separate warehouse or office space is not necessary. Instead Lexi has volunteered storage space at her London residence, located at 202-217 Sarnia Road, to minimize overhead costs. It has been agreed that storage will be costless, due to her utilities-inclusive rent and small space requirement.

To preserve the quality of the leather, proper storage conditions include minimal light exposure, room temperature conditions, breathable protective wrapping, and elevated

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shelving. The main concern is moisture, as it induces water damage and molding. If required, an anti-humidifier may be used to maintain optimal humidity levels. This appliance is already available in the house at no extra cost.

3.5 Protection of Goods As insurance costs exceed total costs of replacing damaged goods we have decided not to purchase coverage on stored inventory. Should theft or damage occur we will absorb the loss and pay the aforementioned premium price of an express order from Ah Yin Tannery.

3.6 Inventory Management Effective inventory management is crucial as ItBox is a product based company. Each product unit is valued at a total of $4.16 after all applicable import duties incurred through the manufacturing and packaging process. In order to examine this process, it is first important to understand our sales schedules, which begins at the start of our fiscal year in January.

3.6.1 Sales Schedule (Exhibit 8) An order schedule was determined based on projected online and boutique sales. When estimating online sales, we broke the year into four segments to consider the seasonality of the retail industry. Highest sales of 30% in our fiscal year are attributed to November and December, while the lowest 21% is from January to April sales. These percentages are the results of analysis of 10-K reports by corporations with similar branding, distribution channels and products (e.g. Urban Outfitters).

Wholesale to boutiques are more stable as there is a minimum order requirement. Boutiques typically make orders every four months of 45 units during high sales projections, and 30 units during low sales projections. These orders are to be made at the beginning of each season to provide options of special editions for the upcoming season.

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Wholesale growth projections are conservative due to the relative proximity of boutiques. In contrast, online sales have the potential and ability for greater growth due to the nature of our promotional efforts and the ease of purchase.

3.6.2 Product Inventory There is an initial investment in inventory of 500 units, after which three orders of 400 units are made. Product orders are submitted to Ah Yin Tannery one month in advance to allow buffer time. In the event of low sales projections, the quantity of cases ordered will not warrant a significant build-up of inventory, as we will have the flexibility of reducing the next order. In the case of high projections, the current amount of 400 is sufficient to satisfy both wholesale and online demand.

We maintain approximately 100 units on hand at all times for promotional purposes, delayed deliveries, damages during shipping, and other unforeseeable circumstances. The ending inventory appears disproportionately high due to the order placed in December in anticipation of January’s wholesale order. As such, high ending inventory should not be a cause for concern.

3.6.3 Packaging Inventory Schedule (Exhibit 9) Packaging inventory management is based on the sales schedule above. To ensure coordination between the packaging and product orders, only one order will be made at the beginning of our fiscal year. In our first year of operations, this order is shown as an investment instead of purchase.

We maintain a large inventory of packaging for two main reasons. First, importing packaging multiple times is costly and significant alterations within the year are unlikely. Secondly, there is ease of storage and minimal maintenance required. This also avoids the problem of delayed shipment. Tissue paper and packaging boxes are also susceptible to damage during the shipping process.

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3.7 Website Our website offers content on ItBox’s history, design and brand concept, list of carrying retailers, and a webstore. (Exhibit 10) Our website also features an interactive map which allows our customers to pinpoint where they are, showcasing our consumer base. (Exhibit 11)

Our webstore is also equipped with a PayPal merchant account and gateway processing which allows us to accept payment through VISA, Mastercard, American Express and PayPal11. These services have a base cost of $35 per month, a per transaction cost of $0.30 and a 2.9% charge on total sale.

The ItBox will be showcased on the website in its existing colors (Exhibit 12). It will be available to Canadian and US destinations and customers will be responsible for shipping costs. The PayPal calculator, a feature of our Merchant account, estimates shipping. Online sales enforce no refunds but allows for exchanges within 10 business days. However shipping costs for exchanges will be borne by the consumer. In the event of damage incurred during delivery, ItBox will send a new product upon receipt of the damaged product, and reimburse the consumer for return shipping costs.

3.8 Wholesale to Boutiques A number of boutiques have expressed interest in carrying the ItBox (Exhibit 13). These retailers include Weezi, Saffron Road, Ryce Fashions, Leslie’s, and Lolita (Exhibit 14). The ItBox will be sold at a wholesale price of $25 per unit with a minimum order of 30, as specified in our wholesale contract (Exhibit 15). These boutiques are located in downtown London, along Richmond Road. After quality control, we will deliver orders to the various store locations and be responsible for the transportation cost. One of our partners, Rachael, has access to a personal vehicle and her existing insurance, gas, and maintenance costs will not be an operating expense. 11

merchant.paypal.com/ca/cgi-bin/marketingweb?cmd=_render-content&content_ID=merchant/home&nav=2

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3.9 Communication All partners have existing personal cellular voice and data plans with access to e-mail, text message, and voice calling. Email is our primary tool of internal and external communication. This includes product orders and confirmation with Ah Yin Tannery and our local London retailers. In addition to personal emails, ItBox will have a general business inquiries email account that all partners have access to. Therefore, no extra operational costs will be incurred to facilitate communication.

4. CORPORATE CAPACITY 4. 1 Storage(Exhibit 16) Lexi has offered her living room space with a storage capacity of 351ft続, capable of storing a maximum of 9360 ItBox units. The inventory peak is during August at 776 units, requiring 54.5ft続 of storage. Thus, the storage space is more than sufficient to accommodate our projected growth rate. We calculate an excess storage area 6.4 times more than required.

4.2 Delivery Projections indicate orders of 225 ItBox units between all boutiques every four months. The vehicle used has a capacity to hold up to 30 boxes, carrying 63 units per box, making our maximum capacity 1890 units in a single trip. We are willing to make a maximum of three trips for a given order, totalling at 5670 units before we opt to contract a delivery service. Given our largest anticipated delivery order of 260 units during our third year of operations, it is unlikely that sales will grow beyond our maximum capacity within the next three years.

4.3 Packaging The ItBox will be packaged by the partners. This process consists of three steps: folding up the packaging boxes, folding and inserting the tissue paper into the box, and putting the case and instructions in the box. The first and second step will take 25 seconds each and the final step 10 seconds. This requires a total of 1 minute to package each unit. Our high sales

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projection of 1183 units translates into 19 hours per year for packaging. Each partner is willing to commit three hours a week to complete this task. Combined, we can package up to 1260 units in a week, totalling of 60,480 units for the whole year.

5. HUMAN RESOURCES 5.1 Business Entity ItBox is a general partnership between seven parties: LexiGao, Celine Cho, Tina Hu, Nancy Meng, Jessica Liao, Gloria Wang and Rachael Lee. Each partner has contributed and owns 1/7 of the company. With an equal division of equity, each partner’s opinion or vote is therefore, equally influential.

5.2 Division of Responsibilities Each partner will be responsible for a distinct portfolio and will share updates at weekly board meetings. Shared responsibilities include the physical packaging of the glasses cases and will take place before and after weekly meetings.

Lexi is the Packaging Coordinator, responsible for negotiation of all shipping terms and contacting packaging manufacturers through Alibaba wholesale. Rachael is the Manufacturer Coordinator, coordinating all purchases and shipments of manufactured goods from Ah Yin Tannery. Tina, as Finances Coordinator, manages company finances and simple bookkeeping. Gloria will oversee all administrative duties, as Administrative Coordinator. Celine is the Media Director, maintaining and updating all of our social media outlets. As Marketing Director, Nancy will develop marketing strategies and branding. Jessica, as External Affairs Coordinator, will act as the correspondent for boutiques and external marketing contacts.

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6. MARKETING 6.1 The Concept Vision is the intimate art of perception and projects the ultimate statement of self. We seek to create the perfect accessory to accompany our consumers in their on-the-go lifestyle. As eyewear serves both as a fashion statement and a utility, the Itbox has the potential to mirror this paradigm.

6.2 Marketing SWOT Strengths12 1. Access to niche markets With the ItBox’s unisex design, we have the ability to offer products tailored to specific market segments. After our first year of operations, we hope to pinpoint a gender-specific market and introduce new combinations of colours and linings to better address the needs of that market.

2. Access to high quality inputs As the ItBox is marketed as an understated luxury product we need to be able to respond to the niche market demands for high quality materials. ItBox is produced at Ah Yin Tannery, who also serves a number of brand name clientele. We are confident in our ability to meet the high expectations of our customers.

3. Ability to alter goods produced in favour of market conditions As students, we have a personal relationship to our target market and are able to draw parallels to market needs by relating to our own. We are able to identify incoming trends to provide our consumers with both classic and trendy versions of the ItBox. In our second year, we hope to introduce colour combinations indicative of current season trends. As our 12

http://clients.ibisworld.com.proxy1.lib.uwo.ca :2048/industryus/default.aspx?indid=374

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raw materials source mainly from recycled leather, we are confident that Ah Yin Tannery has the capacity and resources to cater to our needs, due to its reputation of producing for highend brands.

Weaknesses We acknowledge that as a new business, ItBox lacks brand awareness and will encounter challenges in generating web traffic. The optical accessory market is narrow with many competitors. Due to lack of entrepreneurial experience, we run the risk of inaccurate sales projections. To address these issues, our projections are conservative and accountable. As well, we have maintained good relations with our manufacturer to allow flexibility of order quantities to avoid inventory build-up. We also realize the importance of creating a strong brand image that explicitly differentiates the ItBox from the conventional eyeglasses cases.

Opportunity The ItBox is an under-explored niche market product, which allows for more opportunities to enter and establish its brand image. As identified through our PEST analysis, the average person is experiencing a decline in vision, which translates to a growing demand for prescription eyewear. Although contact lenses are widely used, they are not perfect substitutes for spectacles. The optical industry is progressing in a fashion-forward direction, which emphasizes stylish frames and unique colours. We predict that this trend will not be restricted to just frames or colours, but will expand to a need for more aesthetically pleasing cases.

Threats Our main threat is optical retailers who provide complimentary cases with purchase of eyewear. This eliminates potential methods of distribution, i.e. in optical stores. We recognize this shortcoming and will focus on branding the ItBox as a functional accessory.The exclusive use of leather may also alienate a certain demographic, such as

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animal rights activists. Although we are not explicitly marketing our materials as being recycled, we will add a CSR component to address these concerns on our website.

Due to the close relative proximity of our contracted retailers along Richmond Street in Downtown London, we may be misunderstood as over saturating the market. However, Richmond Street alone is nowhere near the size and scope of the market of the city, and there remains much room for expansion. Most importantly, downtown Richmond is a popular shopping destination for fashion-conscious consumers, allowing for direct interaction with our target market.

Strategy Our SWOT analysis emphasizes our innovative and high quality finish as our main strength in penetrating the under-explored niche market of optical accessories. Given our current standing, we need to pursue the push strategy to reach out to an unrealized consumer base.

6.3 4 P’s 6.3.1 Product The ItBox introduces a collapsible feature allowing for convenience and ease of mobility. The product consists of six flexible panels and two side flaps, intricately designed for fluid folding and optimal functionality.The ItBox also incorporates a pair of hidden magnets to ensure durability and compactness. The 29.4cm x 15cm dimensions (Exhibit 17) allow for easy accommodation for a diverse range of eyewear, encompassing all shapes and sizes. The product will be specially packaged with a microfiber cloth, metallic gold tissue paper, and a custom box with the ItBox logo. (Exhibit 18)

6.3.2 Placement The ItBox will be available for sale through two separate distribution streams: boutique and online sales. Our primary source of sales is through the webstore, followed by boutiques.

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The online marketplace increases our direct reach of customers, while boutiques emphasize our consumer’s desire for unique style. With our operations based in London, we have contacted the boutiques along Richmond Row, the central of London’s downtown district (Exhibit 19); Weezi, Saffron Road, Lolita, Ryce Fashions, and Leslie’s have expressed interest in carrying our product. We will also provide a sales display to our retailers, styled to fit ItBox’s image (Exhibit 20). Each display will cost $100 inclusive of shipping and taxes.

6.3.3 Price The retail price is $50 for online customers. This price point has been determined in accordance with our primary research and projected image of luxurious subtlety. The ItBox’s compact design is a refreshing alternative to conventional cases in the North American market, targeting consumers who desire originality coupled with utility. The use of leather adds to the product quality and image, justifying a higher price. Lastly, boutique owners whom we consulted during the design process have reaffirmed the price.

The wholesale price is $25 per unit to boutique retailers. All retailers are to price the item at an upwards of $50, with the exception of pre-approved discounts and promotions, to avoid undercutting webstore prices. Optical stores chose not to carry our product since it was not price competitive with their generic, complimentary cases. Hence we decided to price our product at $50 and portray it as a luxury accessory instead.

6.3.4 Promotions (Exhibit 21) In-house Social Media Social media, like Twitter and Facebook, will be strategically employed to direct and increase traffic to our website. We will also be using supplements like Facebook advertisements and banners to increase social media awareness. This will promote our brand identity while allowing for cost-free customer interaction and a quantifiable measure of a successful brand following.

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PapernStitch.com13 PapernStitch is an online exhibition site for designers of one-of-a-kind products. It allows us to post product images and information, while featuring links to our website. Apart from direct advertising, PapernStitch also allow secondhand endorsement through blogs and web communities, which will increase online traffic and sales. The first month’s registration fee is $55, with the following months subscription priced at $45, totaling an expense of $550 a year. We plan to commit to PapernStitch for the next three years of operations.

Blog and YouTube Reviews The ItBox will be sending sponsorship proposals to North American fashion blog owners and YouTube partners with a loyal following. For $9.22, which covers the direct cost of two units at $4.16 each (Exhibit 22), the ItBox will be promoted through an advertorial and featured in a reader/subscriber giveaway. Thus far, we have secured agreements from herwaisechoice.com, ahautemess.ca andmonochromachic.com (Exhibit 23). A budget of $326 (product and shipping inclusive) has been allocated towards this form of advertising as we continue our media outreach.

Google Ads By registering with Google Ads, our website will be advertised when certain keywords are inputted into the Google search engine: “glasses case”, “eyeglasses case”, “sunglasses case”, “compact glasses case”, and “scrap leather”. We chose these terms to diversify the hit ranges so we have a good representation in ad locations. Higher hit searches would place our ad on later pages and lower hit searches are more likely to feature it on the first. As the first three terms each have global monthly hits of over 49,500 and the latter two have only 8100 hits and 260 hits, respectively, we have also set the cost limit of our link to $1.50 per click to afford this venture. $1440 has been allocated towards this advertising for the first year and a planned 20% increase in the following years.

13

www.papernstitch.com

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CAISA Fashion Show CAISA Fashion Show is the largest student-run charity fashion show in Ontario, reaching an audience of over 1500 annually. We will participate as a bronze level sponsor, with a donation of $250 (Exhibit 24), which entitles us to a full-page ad in their look book and vendor booth privileges on the day of the show. The distribution of the look book will help us reach our target market through direct means while the vendor booth will further generate awareness of our brand.

Other We have an additional promotions budget of $500 in the first year, with a $100 increase each fiscal period to support additional ventures. An example of additional promotional ventures would be bimonthly giveaways on our social media platforms, structured to increase web traffic and brand awareness.

Additionally, a portion of the promotions budget will be allocated to developing our customer satisfaction program to build customer loyalty. This program guarantees protection to customers in the case of exchanges and damages. We will reimburse the customer with the original sale of $50 and provide an exclusive offer of 50% off their repurchase. Although we incur the loss of $4.16 from the original direct cost of product and $2.08 for the repurchase, it is imperative that we retain the consumer’s confidence to the best of our ability.

7. FINANCIAL ANALYSIS All financial assessments feature high and low projection scenarios for sensitivity analysis. As our initial investment is comprised solely of inventory, we have different quantities of product and packaging in response to high and low sales projections (Exhibit 25). It is important to note that our manufacturing contract terms only indicate a minimum order amount, so we are able to change our quantities per order if need be.

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7.1 Profitability The majority of sales will be generated through the webstore, followed by wholesale to boutiques. The remainder comes from the vendor booth sales at CAISA Fashion Show (Exhibit 26). Boutiques are a steady source of revenue, provided reorders are made. We require the boutiques to pay 30% down payment, with the rest due the following month (collect on delivery). Once boutiques have made an order, they must commit to the order, guaranteeing our receipt of payment. In contrast to online sales, there is a minimum order requirement resulting in a greater immediate realization in sales.

As a result of our high pricing, we have an incredible contribution margin rate averaging 90%. With the low variable cost of our product (Exhibit 27) and minimal fixed costs (Exhibit 28), our profit margins stand at 56% low and 57% high, which makes the ItBox extremely profitable. In our first year of operations, our annual return is sufficient in covering not only our initial investment but manages to turn a net income of $18,149 in our low sales projection. The return on asset ratio also proves to be very high, but is justified by our small start-up cost and investment in assets (Exhibit 29, ‘Return on Investment’)

Promotional expenses constitute the bulk of our operational cost to justify our high price point to the consumer, it is essential we spend this substantial amount to establish and develop our brand image.

7.2 Cash Budget (Exhibits 30, 31, 32) The company exhibits a healthy cash flow. The only incident of cash deficit occurs during the first month of operations and is accredited to the initial investment. The other significant outflow of $9,000 in January is due to packaging and annual promotional expenses (e.g. Sales displays for retailers and our sponsorship of CAISA fashion show).

Another noticeably weaker month is April, during which we order new product inventory for the retailers and coincidentally, exhibit slower online sales (April accounts for only 5% of

Page24

Feasibility Study


total online sales). Although it is a time of low or even negative cash flow, the high ending balance in cash from February and March supports the business.

Overall, our cash position is highly desirable and sufficient cash is generated through operations alone (Exhibit 33). Regardless of high/low sensitivity analysis, there is excess cash at the end of the first two years of operations and by the end of the third year our company has retained just under $80,000 in our cash reservoir.

7.3 Growth (Exhibit 29, ‘Growth’) Both sales and gross profit growth exceed the rate of operating expense growth. The combination of effective internal management, strategic market exposure, and organic growth translates into our projected growth in sales. Although our current cash flow exhibits steady growth, we are not a capital-intensive company. A large cash account is not necessary due to low expenses. Nevertheless, ItBox is in a good financial position to meet our desired drawings of $7,000 in the second year and $14,000 in the third year (Exhibit 34). To deal with this excess cash we plan to take out more drawings after the third year, and allocate a large sum into product or company expansion.

7.4 Risk 7.4.1 Inventory Risk (Exhibit 29, ‘Inventory Utilization’) As we are a product-based company, inventory management is imperative. An error in the scheduling of our inventory can run the risk of build-up, causing long-term liquidity problems. Our goal is to keep approximately 100 units as a buffer to minimize losses due to shortages. This buffer quantity can be used for promotional purposes, in situations of damages, and other unforeseeable circumstances. In scenarios of lower sales projections, we will decrease our future order quantities and vice versa to accommodate for high sales projections.

Innovation:Thinking inside the box

Page 25


The ‘age of inventory’ ratio accounts for both the product and packaging inventories of our business. The high ratio has already been discussed at length in “Product Inventory”. In summary, there exists a difference in nature between our order schedules, as we order the ItBox three times a year and packaging materials, only once. Given that we place a product order in December in preparation of wholesale to boutiques in January of the next fiscal year, this leaves us with an abnormally high ending inventory. As such, our age of inventory is not a good indicator of the health of our ending inventory levels.

We have product orders of different quantities according to high or low projections. Therefore, we have arrived at a separate conclusion for each projection:

1. Our high projections indicate that the ‘age of inventory’ ratio is not a cause of concern. As boutiques place an order of approximately 260 units in January, the remaining inventory is sufficient for our projected online sales until the next product order in April. Also, due to our projected yearly growth, increased sales will contribute to a lower ending inventory in December in future years. The ratio indicates that inventory buildup is minimal.

2. Under the conditions of our low projections, the yearly sales unfortunately result in an increasing accumulation of inventory at year-end. The age of inventory in year 3 is 183 days, compared to the 69 days of our high projections. It does not make sense to operate with our original product order quantities in the low projections. Product orders would be reduced in year 2 to accommodate for lower sales.

Canadian wholesalers averaged an inventory turnover rate of 7.2 times in 2009 and 7.4 times in 200814. In comparison to industry ratios, our first year operations saw an inventory turnover rate of 4.56 (high projections) and 3.52 (low projections). Despite the fact that our inventory turnover is only a fraction of the industry average, it is important to take into account that we are a small business catering to a niche market. It would not be reflective of our potential to compare to other companies who specialize in wholesale at lower

Page26

Feasibility Study


contribution margin rates.

Lastly, due to the nature of our inventory order scheduling and our fluctuating monthly, our inventory and cost of goods sold figure is rather unstable. This is common amongst businesses affected by seasonality, with the majority of sales incurring at certain times of the year.

7.4.2 Financial Risk(Exhibit 29, ‘Risk’) ‘Return on equity’ and ‘return on investment’ both suggest that this venture is extremely low risk. Investment levels required to start this business are low. The payback for both sales projections is high and an increasing rate of return on investment is evident with the progression of each year.

The high ‘margin of safety’ calculation for the projected scenarios indicates that even with lower sales projections, our business still yields a healthy return with low risk. Also, due to our low initial investment, we are able to generate large returns on investment, and receive payback in a short period of time (Exhibit 35). Our large contribution margin per unit (Exhibit 36) necessitates only 8% and 10% of total projected sales (high/low respectively) to break even in our first year (Exhibit 37). This sales goal is highly feasible and our expected sales figures continuously exceed our break-even point, promising profits well beyond our target profit goal (Exhibit 38).

As such, despite the risks associated with inventory, we are not limited to a fixed order schedule, and reserve the flexibility to adapt to our situation. Although inventory may appear to pose certain threats, ItBox still faces minimal financial risk with respect to recovering initial investment and meeting target profits.

14

www.statcan.gc.ca/daily-quotidien111012dq111012a-eng.htm

Innovation:Thinking inside the box

Page 27


8. DECISION 8.1 Contingency Planning If the launch of our product falls short of expectations, we have three contingency plans:

1. Increased Marketing Efforts With low start-up costs of $5,278 (under high projections), we have the financial resources to increase advertising. The ultimate goal will be to enhance web presence and brand exposure in order to achieve online sales targets. With respect to in-house promotions, larger scale campaigns will be launched on our website and social media networks. Being dependent on online sales means that we must focus on web traffic. For the Google ads program, we will increase the cost per click in order to increase exposure and search hits.

Additional focus will be given to media outreach in order to commission more blog owners and Youtube Partners. We will increase push by offering a special discount to their subscribers.

We will also commit greater efforts to contract additional retailers, perhaps in the GTA. For existing and new boutique carriers, a more eye-catching display will be created and distributed. It is imperative that we continually increase marketing efforts through all mediums in order to successfully establish the ItBox brand.

2. Redirection of Branding Given the product’s versatility, our original objective is to market the ItBox as a unisex product. However, if our pursuit of the unisex market is unsuccessful, we will concentrate efforts in targeting a single gender - of which will be determined by sales statistics.

Under extreme circumstances, we will re-brand the product as a trendy storage unit.To

Page28

Feasibility Study


further develop this, new sizes of ItBox will be manufactured to highlight its utility beyond that of an optical accessory.

3. Liquidation of Business Our absolute last resort is to liquidate the business. We will sell remaining units through free promotional and distribution channels such as websites, online blogs, and forums. If the $50 price limits our ability to liquidate, inventory will be sold at the wholesale price of $25. We will also approach charity fundraisers to sell our merchandise at a discounted price of $20 to cover all manufacturing and freight costs.

8.2 Future Growth Our short-term growth relies primarily on the establishment of our brand in the optical accessory market. We aspire to embark on international online sales after our third year of operations.

Long-term goals pertain to the launch of different product lines. For example, the use of the ItBox for purposes other than storing eyewear. We will also offer extensions of our existing product, such as limited editions and giftware. On our webstore, we would like to include options to customize the design of the ItBox (e.g. leather colour, lining colour and design). For this reason, a large cash balance is required for product development.

9. CONCLUSION As the eyewear industry moves in a more fashion-forward direction, there are vast opportunities to enter the niche market of optical accessories by catering to the changes in demand for a more stylistically appealing product. ItBox realizes these demands in producing an innovative and collapsible design to accompany the ItLifestyle of our target consumers. Ultimately, with the low-risk and high-return financial prospects of The ItBox, establishment and success of this business venture as a high-end leather accessory is feasible.

Innovation:Thinking inside the box

Page 29


Page30

Feasibility Study


Exhibit 1: Product Photo

Exhibit 2:Survey Results

Innovation:Thinking inside the box

Page 31


Exhibit 3:Manufacturing Contract

Exhibit 4:Manufacturing Cost Breakdown Manufacturing Components Price Scrap Leather $ Hidden Magnet $ Inner Lining $ Cardstock (Board) $ Edge Ink $ Labour $ Silver Corners $ Silver Plate $ Total $

Page32

ItBox Components 0.81 0.41 0.14 0.20 0.20 0.61 0.20 0.10 2.67

Product Packaging: Packaging Box Tissue Paper Business Card Microfiber Cloth Freight, Duty, Taxes Total

Feasibility Study


Exhibit 5:Packaging Box

Exhibit 6:Business Card (Front and Back)

Exhibit 7:Packaging Supplier List Packaging Box Tissue Paper Business Card Microfiber Cloth

Innovation:Thinking inside the box

Qty/Product Source 1 Alibaba 2 Uline 1 Vistaprint 1 Alibaba

Location China Brampton Windsor China Page 33


Exhibit 8:Sales and Product Inventory Schedule

HIGH YEAR 1 SALES Online Boutique

Jan

250

25 225

Total Sales 500

CAISA Booth INVENTORY O/B

25

25 28 53

25 263

25 38 225

283

38

38

Feb Mar Apr May June

25 250 225 171 546

38

Jul

38

40

40

72

72

301 261

72

72 189 1200

1183

28

480 675

Aug Sept Oct Nov Dec Total 40 40 225 40 265

244 206 566 400

LOW YEAR 1 SALES Online Boutique

Jan

170

20 150

Total Sales

400

CAISA Booth INVENTORY O/B

20

20 14 34

20 181

20 31 150

275

31

31

Feb Mar Apr May June

20

230 210 176 456

32 32 150

32

32

58

58

34

35 195

35 35 160

58

384 450

-847

900

14

848

-58

300

300 268 210

58

Aug Sept Oct Nov Dec Total 31

32 182

Jul

31

245 214 482

300

-32 -58

300

268 210 453

Purchase

400

-31 -32 -182

400

Purchase

214 482 300

-20 -181

-31

-72 -1183

245

517

34

311 278 592

35

35

63

63

63

422 480

-917

1050

15

917

-63

350

397 362 299

63

Oct Nov Dec Total

-20 -34

-40 -72

34

Aug Sep

210 176 456 275

261 189

22 194

34

230

-38 -40 -265

15 37

345

350

-35 -63

350

270 248 211 539

22

22

-170

206 566 301

182

22

Sold

-38

CAISA Booth

22 34 160

Ending Inventory

244

-25 -263

YEAR 2 SALES

45

453

Online Boutique 1341

Total Sales INVENTORY 1350

O/B

22 160

Jul

-25 -53

86

86

Feb Mar Apr May Jun

225 171 546 283

86

86

162

Jan

250

48

48

297 249

576 720

Oct Nov Dec Total

-250

48 48 240 48 288

229 183 585

46

Aug Sep

Sold

46 275

46

Ending Inventory

30 46 240 30 286

46

Jul

30 45 75

247 217 141 561

30

30

Feb Mar Apr May Jun

517

270

30 240

Jan

YEAR 2 SALES Online Boutique CAISA Booth Total Sales INVENTORY O/B

450

362 299 585

Purchase

450

-34 -35 -195

450

Purchase

278 592 397

-22 -194

40

170

39 210

39

73

73

73

73

561 520 447

41

41

-39

411 771 561

-39 -39 -210

520 447 774

-41 -73

1200

1011

16

510

485

Aug Sept Oct Nov Dec Total

-34

-86 -1341

39

39

311

526

39

39

-22 -37

-48 -86

39 170 26 209

26

248 211 539 345

249 162

25 16 41

450 411 771

450

489 -25 -41

-73 -1011 365 324 698 489

400 390

-195

400 Sold

-26 -209 Ending Inventory

400

390 365 324 698

25

25

270

-46 -48 -288

25

-182 183 585 297

Online

195

720

CAISA Booth

170 47

Total Sales INVENTORY

Boutique 1547

585 -60 -108 -108 -1547

Purchase

O/B

780

YEAR 3 SALES

Sold

-46

108

Ending Inventory

229

-30 -286

-30 -75

60 108

108

Jul

217 141 561 275

60

60 108

88

Feb Mar Apr May June

247

60

260 60 320

256 196

Jan

-270

58

Aug Sept Oct Nov Dec Total

Sold

58

58

193 136 576

196

251

58

Ending Inventory

38

260 38 318

58

Jul

38 47 84

228 190 106 568

38

38

Feb Mar Apr May June

298

260

38

Jan

YEAR 3 SALES Online Boutique Total Sales INVENTORY 526

CAISA Booth

O/B

-58 -60 -320

1500 136 576 256

500 -58

500 193

500 -38 -84

Purchase

190 106 568 251

480

228

-298

88

Sold

-38 -318

Ending Inventory

Feasibility Study

Page34


Exhibit 9:Packaging Inventory Schedule

HIGH

Box Cloth Tissue Paper

YEAR 1 PACKAGING Units Sold O/B

Box

-38 -38

-40 -265 -40 -265

303 303 606

-72 -72

263 263 526

-72 -1181 -72 -1181

191 191 382

Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec Total 250 25 53 25 263 38 38 40 265 40 72 72 1183

-38 -38

1300 1050 1025 972 947 684 646 608 568 1300 1050 1025 972 947 684 646 608 568 2600 2100 2050 1944 1894 1368 1292 1216 1136

-25 -263 -25 -263

-40 -40

-53 -53

-250 -250 -80 -144 -144 -2362 263 191 119 263 191 119 526 382 238

-25 -25

Box Cloth -500 -50 -106 -50 -526 -76 -76 -80 -530 1050 1025 972 947 684 646 608 568 303 1050 1025 972 947 684 646 608 568 303 2100 2050 1944 1894 1368 1292 1216 1136 606

Cloth Tissue Paper

Purchase

Use

E/B

Tissue Paper Box Cloth Tissue Paper

119 1249 1219 1143 1113 827 781 735 687 238 2498 2437 2287 2226 1654 1562 1470 1374 1400

399 798

351 702

264 529

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 270 30 75 30 286 46 46 48 288 48 86 86 1341 119 1249 1219 1143 1113 827 781 735 687 399 351 264

Cloth Tissue Paper Box

-86 -1341 -86 -1341

-46 -46

-86 -86

-46 -46

-48 -48

-30 -286 -30 -286

-48 -288 -48 -288

-75 -75

1400 2800 -270 -270

-96 -173 -173 -2682 351 264 178 351 264 178 702 529 356

Mar 84 1342 1342 2685

May June Jul Aug Sept Oct Nov Dec Total 318 58 58 60 320 60 108 108 1547 1220 903 845 788 728 408 348 240 1220 903 845 788 728 408 348 240 2441 1805 1690 1575 1455 815 695 479

Feb 38 1380 1380 2760

-84 -38 -318 -58 -58 -60 -320 -60 -108 -108 -1547 -84 -38 -318 -58 -58 -60 -320 -60 -108 -108 -1547 -169 -76 -635 -115 -115 -120 -640 -120 -216 -216 -3093 1258 1220 903 845 788 728 408 348 240 132 1258 1220 903 845 788 728 408 348 240 132 2516 2441 1805 1690 1575 1455 815 695 479 263

Apr 38 1258 1258 2516

-38 -38 -76 1342 1342 2685

-30 -30

Cloth Tissue Paper Box Cloth

-540 -60 -150 -60 -572 -92 -92 -96 -576 1249 1219 1143 1113 827 781 735 687 399 1249 1219 1143 1113 827 781 735 687 399 2498 2437 2287 2226 1654 1562 1470 1374 798 Jan 298 178 178 356 1500 1500 3000 -298 -298 -596 1380 1380 2760

Tissue Paper Box Cloth Tissue Paper

YEAR 2 PACKAGING Units Sold O/B Box

Purchase

Use

E/B

YEAR 3 PACKAGING Units Sold O/B

Purchase

Use

E/B

Box Cloth Tissue Paper Box Cloth Tissue Paper Box Cloth Tissue Paper Box Cloth Tissue Paper

LOW

Box Cloth Tissue Paper

YEAR 1 PACKAGING Units Sold O/B

Box

-31 -31

482 300 482 300 964 600

-58 -58

268 268 536

-58 -58

210 210 420

-847 -847

Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec Total 170 20 34 20 181 31 31 32 182 32 58 58 848

-31 -31

1000 830 810 776 756 575 545 514 1000 830 810 776 756 575 545 514 2000 1660 1620 1552 1512 1151 1089 1028

-20 -181 -20 -181

-32 -182 -32 -32 -182 -32

-34 -34

-170 -170

-20 -20

Box Cloth

-64 -364 482 300 482 300 964 600

Cloth Tissue Paper

Purchase

Use

E/B

-340 -40 -68 -40 -361 -61 -61 830 810 776 756 575 545 514 830 810 776 756 575 545 514 1660 1620 1552 1512 1151 1089 1028

-64 -115 -115 -1695 268 210 153 268 210 153 536 420 305

Tissue Paper Box Cloth Tissue Paper

153 970 948 911 889 695 661 628 592 397 305 1941 1897 1822 1778 1390 1323 1255 1185 794 1000

362 724

299 597

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 182 22 37 22 194 34 34 35 195 35 63 63 917 153 970 948 911 889 695 661 628 592 397 362 299 Cloth Tissue Paper Box

-917 -917

-63 -63

-34 -34

-63 -63

-34 -34

-35 -195 -35 -35 -195 -35

-22 -194 -22 -194

1000 2000 -182 -182

-70 -127 -127 -1835 362 299 235 362 299 235 724 597 470

-37 -37

Cloth Tissue Paper Box Cloth

-364 -44 -74 -44 -388 -68 -68 -70 -390 970 948 911 889 695 661 628 592 397 970 948 911 889 695 661 628 592 397 1941 1897 1822 1778 1390 1323 1255 1185 794

-25 -41 -26 -209 -39 -39 -39 -210 -41 -73 -73 -1011 -25 -41 -26 -209 -39 -39 -39 -210 -41 -73 -73 -1011 -51 -82 -53 -418 -78 -78 -79 -421 -83 -146 -146 -2023 1015 974 948 739 700 661 621 411 370 297 224 1015 974 948 739 700 661 621 411 370 297 224 2029 1948 1895 1477 1400 1322 1243 822 739 593 448

Feb 25 1040 1040 2080

-22 -22 Tissue Paper Box Cloth Tissue Paper

Oct Nov Dec Total 41 73 73 1011 411 370 297 411 370 297 822 739 593

Jan 195 235 235 470 1000 1000 2000 -195 -195 -391 1040 1040 2080

Mar Apr May June Jul Aug Sept 41 26 209 39 39 39 210 1015 974 948 739 700 661 621 1015 974 948 739 700 661 621 2029 1948 1895 1477 1400 1322 1243

YEAR 2 PACKAGING Units Sold O/B Box

Purchase

Use

E/B

YEAR 3 PACKAGING Units Sold O/B

Purchase

Use

E/B

Box Cloth Tissue Paper Box Cloth Tissue Paper Box Cloth Tissue Paper Box Cloth Tissue Paper

Page 35

Innovation:Thinking inside the box


Exhibit 10:Website Layout

Exhibit 11:Website Customer Map

Page36

Exhibit 12:Product Colour Swatches

Feasibility Study


Exhibit 13:Weezi Boutique Email

Exhibit 14:Boutique Contact List

Exhibit 15:Wholesale Contract

2-204 Albert St. London, ON. Canada N6A 1M1 theweezistore@hotmail.com ItBox.com RETAILER LICENSE AGREEMENT

Lin Zhao RYCE Fashion Design Inc. 495 Richmond Street Suite 102 London, Ontario Canada N6A 5A9 Tel: 1-519-473-8088 Fax: 1-866-655-5238 info@rycefashion.com

577 Richmond Street London, Ontario Canada N6A 3G2 Tel: 519-673-3406 info@saffronroad.ca 551 Richmond Street London, Ontario Tel: 519-679-1030 lesliesuptown@rogers.com

This Retail Store License Agreement is made and entered into effective as [February 15, 2012], between [Retailer] having its principal place of business at [address] and ItBox, a Canadian company having its principal place of business at 202207 Sarnia Road London Ontario. Section 1. Term 1.1 Initial Term. The term of this Agreement shall commence on the effective date of this Agreement and shall continue until [February 15, 2014], unless sooner terminated in accordance with this Agreement and with reason. 1.2 Renewal Term. Both parties shall have the option to renew this Agreement for a two year term through February 15, 2016. Section 2. Pricing 2.1 Retail prices in store shall not undercut Itbox.com’s selling prices (a) The retailer must sell the Itbox at an upwards of $50 dollars. (b) Should ItBox.com`s selling price increase, the retail price must be increased be at least the same percentage. (c) Agreement must be reached between both parties regarding any instore promotions that discount the product to under $50. Section 3. Product 3.1 Stock Orders (a) For restocking, retailers must place 30 days ahead of expected stock replenishment. During the term, retailers must reorder stock when inventory levels approach approximately 5 units or another specified level based on rationale. It is in the Retailer’s goodwill to ensure supply meets consumer demand. (b) Orders for stock must meet the minimum of 30 units 3.2 Payment. The retailer will pay 30% down on the order at the time of orderand the remaining 70% is paid cash on delivery (COD). Units are sold to the retailer at $25 each. (d) Any product damages will be at the expense of the retailer after delivery (change of ownership). 3.3 Product Display: The retailer must use the POS display for product. This display unit will be provided by ItBox. 3.4 Product Packaging. Retailers must maintain product display and packaging that upholds the ItBox image and standards. Packaging will be provided by ItBox. Section 4. Termination 4.1 Should there be a valid reason for termination, either party will give a written formal notice ninety (90) days ahead of final date of termination.

553 Richmond Street London, Ontario Tel: 519-850-5100

The undersigned parties have agreed to the terms of this Agreement

____________________________ February 15th, 2012 [Retailer]

Innovation:Thinking inside the box

____________________________ February 15th, 2012 ItBox [Supplier]

Page 37


Exhibit 16:Storage Capacity Calculations Maximum Storage Needed per Year Storage Box Glasses Case Packaging Box Tissue Paper Microfiber Cloth Volume of Storage Space: 351ft³

Length 2ft 2ft 1ft 2ft

Width 2ft 2ft 0.5ft 2ft

Height 1ft 3ft 1ft

Quantity 8 1 13 1 Total Capacity

Volume 32ft³ 12ft³ 6.5ft³ 4ft³ 54.5ft³ 351ft³ / 54.5ft³ = 6.4 times

Exhibit 17:Product Blueprint

Exhibit 18:Product Logo

Page38

Feasibility Study


Exhibit 19:Boutique locations

Exhibit 20:Sales Display

Exhibit 21:Promotions Expense Breakdown Promotions Year 1 Year 2 Year 3 Google Ads $ 1,440 $ 1,728 $ 2,074 Sale Displays $ 500 $ 500 $ 500 Review Costs $ 326 $ 326 $ 326 PapernStitch Exhibitor Fees $ 550 $ 540 $ 540 CAISA Sponsorship $ 250 $ 250 $ 250 Other $ 500 $ 600 $ 700 Total Promotions $ 3,566 $ 3,944 $ 4,390

Exhibit 22:Direct Cost Breakdown ItBox Components

Quantity

Product Packaging: Packaging Box Tissue Paper Business Card Microfiber Cloth Freight, Duty, Taxes Total

Innovation:Thinking inside the box

Cost

1

$2.67

1 2 1 1 -

$0.37 $0.22 $0.10 $0.30 $0.50 $4.16

Page 39


Exhibit 23:Blog Owners’ Email Responses

Page40

Feasibility Study


Exhibit 24:CAISA Fashion Show Sponsorship

Exhibit 25:Investment

Exhibit 26:Income Statement

Investments

Initial Glasses Cases Initial Business Cards Initial Packaging Boxes Initial Tissue Paper Initial Microfiber Cloths Initial Freight, Duty, Taxes Equity

Income Statement REVENUE Online Sales Wholesale Revenue CAISA Fashion Show Vendor Booth Sales Total Revenue COST OF GOODS SOLD Beginning Inventory Add: Purchases Less: Ending Inventory Cost of Goods Sold

HIGH $ $ $ $ $ $

$

1,335 130 481 572 390 2,370 LOW $ $ $ $ $ $

5,278 $

Gross Profit EXPENSES PayPal Merchant Account Domain Promotions PayPal Transaction Fees Total Expenses

Year 1 HIGH $

24,000 $ 16,875 1,400 42,275 5,278 5,679 1,971 8,986

19,200 $ 13,125 294 32,619 4,139 4,295 1,867 6,567

Year 3 HIGH

LOW 28,800 $ 18,056 2,250 49,106 1,971 8,284 2,170 8,085

21,120 $ 14,044 750 35,914 1,867 6,187 2,519 5,534

LOW 36,000 $ 19,501 2,350 57,851

24,288 14,886 800 39,974

2,170 9,550 1,892 9,828

2,519 6,659 3,089 6,090

$

33,289 $

26,052 $

41,021 $

30,380 $

48,023 $

33,885

$

420 $ 42 3,566 840 4,868

420 $ 42 3,566 672 4,700

420 $ 83 3,944 1,008 5,455

420 $ 83 3,944 739 5,186

420 $ 83 4,390 1,260 6,153

420 83 4,390 758 5,651

Net Income before Taxes Income Taxes NET INCOME

Year 2 HIGH

LOW

$

28,421 4,263

21,352 3,203

35,566 5,335

25,194 3,779

41,870 6,281

28,234 4,235

24,158 $

18,149 $

30,231 $

21,415 $

35,590 $

23,999

1,068 100 370 440 300 1,861

4,139

Innovation:Thinking inside the box

Page 41


Exhibit 27:Variable Costs Variable Costs Glasses Case Packaging Box Tissue Paper Freight Duty Taxes Business Card Microfiber Cloth PayPal Transaction Fee TOTAL Percentage of Total Costs

Year 1 HIGH LOW $ 3,204 $

2,403

$ $ $

1,898 $ 160 $ 417 $

1,460 120 312

$ $

840 $ 6,519 $ 62%

672 4,967 55%

Year 2 HIGH $ $ $ $ $ $ $ $ $ $

3,605 518 616 2,044 252 689 140 420 1,008 9,292 68%

LOW $ $ $ $ $ $ $ $ $ $

2,804 370 440 1,460 191 522 100 300 739 6,926 61%

Year 3 HIGH $ $ $ $ $ $ $ $ $ $

4,005 555 660 2,190 343 807 150 840 1,260 10,810 69%

LOW $ $ $ $ $ $ $ $ $ $

3,204 370 440 1,460 211 574 100 300 758 7,417 60%

Exhibit 28:Fixed Costs Fixed Costs

Year 1 Year 2 Year 3 PayPal Merchant Account $ 420 $ 420 $ 420 Domain $ 42 $ 83 $ 83 Promotions $ 3,566 $ 3,944 $ 4,390 TOTAL $ 4,028 $ 4,447 $ 4,893 Percentage of Total Sales (High) 38% 68% 69% Percentage of Total Sales (Low) 45% 39% 40%

Exhibit 29:Financial Ratios Financial Ratios Percentage of Total Sales COGS Gross Profit Operating Expenses Net Income before tax Liquidity Age of Inventory (days) Return on Investment Return on Equity Return on Assets Inventory Utilization Total Asset Turnover (times) Inventory Turnover (times) Growth Sales Growth Gross Profit Growth Operating Expenses Growth Profit Growth Asset Growth

Page42

Year 1

Year 2

Year 3

HIGH

LOW

HIGH

LOW

HIGH

LOW

21.3% 78.7% 11.5% 67.2%

20.1% 79.9% 14.4% 65.5%

16.5% 83.5% 11.1% 72.4%

15.4% 84.6% 14.4% 70.2%

17.0% 83.0% 10.6% 72.4%

15.2% 84.8% 14.1% 70.6%

79

102

97

164

69

183

82.1% 71.7%

81.4% 71.2%

57.4% 52.1%

58.3% 52.9%

47.9% 44.2%

51.4% 47.1%

1.25 4.56

1.28 3.52

0.85 3.73

0.89 2.20

0.72 5.19

0.78 1.97

16.2% 23.2% 12% 25.1% 72.1%

10.1% 16.6% 10% 18.0% 58.8%

17.8% 17.1% 13% 17.7% 38.9%

11.3% 11.5% 9% 12.1% 25.8%

Feasibility Study


Exhibit 30:Cash Budget Year 1

INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Equity Infusion Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Total Investments Income Taxes Total Outflows Net Cash Flow Beginning Cash ENDING CASH

INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Equity Infusion Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Total Investments Income Taxes Total Outflows Net Cash Flow Beginning Cash ENDING CASH

November

December

Totals

24,000 16,875 1,400 5,278 47,553

October

3,600 $

3,600 $ $ $ $ 3,600 $

September

2,000 $ 3,938

3,600 $

August

2,000 $ 1,688

5,937 $

July

2,000 $

3,687 $

June

Projected Cash Budget (High) For the 1st year ended

1,920 $

2,000 $

May 1,920 $ 3,938

1,920 $

April 1,920 $ 1,688

5,858 $

March 1,260 $

3,608 $

February

1,260 $

January 1,260 $ 3,938

2,660 $

1,260 $

1,260 $ 1,688

5,198 $

$

5,278 8,226 $

1,400 $

420 42 3,566 4,028 5,278

6,519

$ $ $ $ $

1,194 $

35 4 165 204

15,825 31,728 149,859 181,587

Totals

$ $ $ $

December

1,398 2,203 29,525 31,728

126 $

35 4 165 204

330 3,271 26,255 29,525

$ $ $ $

70 $ 35 4 247 285

355 5,582 20,672 26,255

$ $ $ $

70 $ 35 4 165 204

273 3,414 17,258 20,672

$ $ $ $

1,138 $ 35 4 165 204

1,341 658 16,600 17,258

$ $ $ $

67 $ 35 4 247 285

352 1,568 15,032 16,600

$ $ $ $

67 $ 35 4 165 204

271 5,587 9,445 15,032

$ $ $ $

67 $ 35 4 165 204

271 3,337 6,109 9,445

$ $ $ $

1,112 $ 35 4 247 285

1,397 (137) 6,246 6,109

$ $ $ $

44 $ 35 4 165 204

248 2,412 3,833 6,246

$ $ $ $

44 $ 35 4 165 204

248 4,950 (1,117) 3,833

$ $ $ $

2,519 $ 35 4 1,507 1,545 5,278 9,342 (1,117) (1,117)

November

19,200 13,125 294 4,139 36,758

October

2,880 $

2,880 $ $ $ $ 2,880 $

September

1,600 $ 2,625

2,880 $

August

1,600 $ 1,125

4,225 $

July

1,600 $

2,725 $

June

Projected Cash Budget (Low) For the 1st year ended

1,536 $

1,600 $

May

1,536 $ 2,625

1,536 $

April

1,536 $ 1,125

4,161 $

March

1,008 $

2,661 $

February

1,008 $

January 1,008 $ 3,937

1,302 $

4,967

1,008 $

1,008 $ 1,687

4,945 $

902 $

294 4,139 6,834 $

101

13,134 23,624 113,318 136,941

56

$ $ $ $

56

1,105 1,775 21,849 23,624

857

$ $ $ $

54

304 2,576 19,273 21,849

54

$ $ $ $

54

341 3,884 15,389 19,273

836

$ $ $ $

35

259 2,465 12,924 15,389

35

$ $ $ $

1,927

1,060 539 12,385 12,924

420 42 3,566 4,028 4,139 $ $ $ $

$ $ $ $ $ 339 1,197 11,187 12,385

35 4 165 204

$ $ $ $

35 4 165 204

257 3,904 7,284 11,187

35 4 247 285

$ $ $ $

35 4 165 204

257 2,404 4,880 7,284

35 4 165 204

$ $ $ $

35 4 247 285

1,121 (113) 4,993 4,880

35 4 165 204

239 1,063 3,930 4,993

$ $ $ $

35 4 165 204

$ $ $ $

35 4 247 285

239 4,707 (777) 3,930

35 4 165 204

$ $ $ $

35 4 165 204

7,611 (777) (777)

35 4 1,507 1,545 4,139

$ $ $ $

$

$ $ $ $

$

$

$ $ $ $

Page 43

Innovation:Thinking inside the box


Exhibit 31:Cash Budget Year 2 Projected Cash Budget (High) For the 2nd year ended January INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Income Taxes Drawings Total Outflows Net Cash Flow Beginning Cash ENDING CASH

February

March

$

1,512 $ 1,806

1,512 $ 4,213

$

3,318 $

$

4,732 $ 35 7 1,621 1,662

$ $ $ $

6,394 (3,077) 31,728 28,651

May

June

July

August

September

October

November

December

1,512 $

1,512 $

2,304 $ 1,806

2,304 $ 4,213

2,304 $

2,400 $

2,400 $ 1,806

2,400 $ 4,213

4,320 $

5,725 $

2,250 3,762 $

1,512 $

4,110 $

6,517 $

2,304 $

2,400 $

4,206 $

6,613 $

53 $

53 $

1,254 $

81 $

81 $

81 $

1,285 $

84 $

84 $

35 7 189 231 4,263 $ $ $ $

April

4,547 1,178 28,651 29,829

35 7 189 231

$ $ $ $

284 3,478 29,829 33,307

35 7 271 312

$ $ $ $

1,567 (55) 33,307 33,252

35 7 189 231

$ $ $ $

312 3,798 33,252 37,050

35 7 189 231

$ $ $ $

312 6,206 37,050 43,256

35 7 271 312

$ $ $ $

393 1,911 43,256 45,167

35 7 189 231

$ $ $ $

1,516 883 45,167 46,050

35 7 189 231

$ $ $ $

315 3,891 46,050 49,941

35 7 271 312

$ $ $ $

396 6,217 49,941 56,157

4,320 $

4,320 $ $ $ 4,320 $

28,800 18,056 2,250 49,106

151 $

1,353 $

9,291

35 7 189 231

$ $ $ $

Totals

382 3,938 56,157 60,095

35 7 189 231

$ $ $ $

7,000 8,584 (4,264) 60,095 55,832

$ $ $ $ $ $ $ $ $ $

420 83 3,944 4,447 4,263 7,000 25,002 24,104 494,485 518,589

Projected Cash Budget (Low) For the 2nd year ended January INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Income Taxes Drawings Total Outflows Net Cash Flow Beginning Cash ENDING CASH

$

February 1,109 $ 1,404

March

1,109 $ 3,277

April

December

1,760 $ 1,404

1,760 $ 3,277

3,168 $

1,109 $

3,094 $

4,966 $

1,690 $

1,760 $

3,164 $

5,037 $

973 $

59 $

59 $

994 $

62 $

62 $

39 $

39 $ 35 7 189 231

$ $ $ $

November

1,760 $

3,422 $

3,472 913 21,053 21,966

October

1,690 $

$

$ $ $ $

September

1,690 $ 3,277

4,386 $

5,084 (2,571) 23,624 21,053

August

1,690 $ 1,404

2,513 $

$ $ $ $

July

1,109 $

$

35 7 189 231 3,203

June

1,109 $ 750 1,859 $

35 7 1,621 1,662

May

270 1,589 21,966 23,555

35 7 271 312

$ $ $ $

1,286 (177) 23,555 23,378

35 7 189 231

$ $ $ $

290 2,804 23,378 26,182

35 7 189 231

$ $ $ $

290 4,676 26,182 30,858

35 7 271 312

$ $ $ $

1,306 384 30,858 31,242

35 7 189 231

$ $ $ $

293 1,467 31,242 32,709

35 7 189 231

$ $ $ $

293 2,872 32,709 35,581

$ $ $ $

Totals

3,168 $

3,168 $ $ $ 3,168 $

21,120 14,044 750 35,914

996 $

111 $

111 $

6,926

35 7 271 312

35 7 189 231

35 7 189 231

1,309 3,728 35,581 39,309

$ $ $ $

342 2,826 39,309 42,135

$ $ $ $

7,000 7,342 (4,174) 42,135 37,962

$ $ $ $ $ $ $ $ $ $

420 83 3,944 4,447 3,203 7,000 21,576 14,338 351,592 365,930

Exhibit 32:Cash Budget Year 3 Projected Cash Budget (High) For the 3rd year ended January INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Income Taxes Drawings Total Outflows Net Cash Flow Beginning Cash ENDING CASH

February

March

$

1,890 $ 1,950

1,890 $ 4,550

$

3,840 $

$

5,611 $ 35 7 1,749 1,791

$ $ $ $

7,402 (3,562) 55,832 52,269

May

June

July

August

September

October

November

December

1,890 $

1,890 $

2,880 $ 1,950

2,880 $ 4,550

2,880 $

3,000 $

3,000 $ 1,950

3,000 $ 4,550

5,400 $

6,440 $

2,350 4,240 $

1,890 $

4,830 $

7,430 $

2,880 $

3,000 $

4,950 $

7,550 $

66 $

66 $

1,401 $

101 $

101 $

101 $

1,440 $

105 $

35 7 218 260

35 7 218 260

35 7 299 341

35 7 218 260

35 7 218 260 5,335 $ $ $ $

April

5,661 779 52,269 53,049

35 7 218 260

$ $ $ $

326 3,914 53,049 56,963

35 7 299 341

$ $ $ $

1,742 148 56,963 57,110

$ $ $ $

361 4,470 57,110 61,580

$ $ $ $

361 7,070 61,580 68,650

$ $ $ $

442 2,438 68,650 71,088

35 7 218 260

$ $ $ $

1,700 1,300 71,088 72,388

$ $ $ $

365 4,585 72,388 76,973

$ $ $ $

Totals

5,400 $

5,400 $ $ $ 5,400 $

36,000 19,501 2,350 57,850

105 $

189 $

1,524 $

10,810

35 7 299 341

35 7 218 260

446 7,104 76,973 84,077

$ $ $ $

449 4,951 84,077 89,028

35 7 218 260

$ $ $ $

14,000 15,784 (10,384) 89,028 78,644

$ $ $ $ $ $ $ $ $ $

420 83 4,390 4,893 5,335 14,000 35,038 22,813 799,005 821,818

Projected Cash Budget (Low) For the 3rd year ended January INFLOWS Online Credit Card Collections Boutique Wholesale Collection CAISA Fashion Show Vendor Booth Total Inflows OUTFLOWS Total Variable Costs Fixed Costs PayPal Merchant Account Domain Promotions Total Fixed Costs Income Taxes Drawings Total Outflows Net Cash Flow Beginning Cash ENDING CASH

$

February

1,275 $ 1,489

March

1,275 $ 3,473

April

2,024 $ 3,473

3,643 $

1,275 $

3,432 $

5,417 $

1,943 $

2,024 $

3,513 $

5,497 $

1,642 $

61 $

61 $

61 $

63 $

63 $

1,665 $

40 $

Page44

December

2,024 $ 1,489

40 $

35 7 218 260

$ $ $ $

November

2,024 $

3,495 $

4,079 670 35,439 36,109

October

1,943 $

$

$ $ $ $

September

1,943 $ 3,473

4,749 $

5,286 (2,522) 37,962 35,439

August

1,943 $ 1,489

2,764 $

$ $ $ $

July

1,275 $

$

35 7 218 260 3,779

June

1,275 $ 800 2,075 $

35 7 1,749 1,791

May

300 1,776 36,109 37,885

35 7 299 341

$ $ $ $

1,983 (708) 37,885 37,177

35 7 218 260

$ $ $ $

320 3,111 37,177 40,288

35 7 218 260

$ $ $ $

320 5,096 40,288 45,384

35 7 299 341

$ $ $ $

402 1,541 45,384 46,926

35 7 218 260

$ $ $ $

323 1,701 46,926 48,627

35 7 218 260

$ $ $ $

323 3,190 48,627 51,816

35 7 299 341

$ $ $ $

2,006 3,491 51,816 55,307

$ $ $ $

Totals

3,643 $

3,643 $ $ $ 3,643 $

24,288 14,886 800 39,974

114 $

114 $

7,417

35 7 218 260

35 7 218 260

$ $ $ $ $

420 83 4,390 4,893 3,779

$ $ $ $

30,089 9,885 531,498 541,383

373 3,270 55,307 58,577

$ $ $ $

14,000 14,373 (10,730) 58,577 47,847

Feasibility Study


Exhibit 33:Statement of Cash Flows Statement of Cash Flows YEAR 1 HIGH OPERATIONS Net Income Inventory Tax Payable Net Cash Flow from Operations FINANCING Equity Retained Earnings Net Cash Flow from Financing Beginning Cash Net Cash Flow ENDING CASH

$

$ $

$ $

YEAR 2 HIGH

LOW

YEAR 3 HIGH

LOW

LOW

24,158 $ (1,971) 4,263 26,450 $

18,149 $ (1,867) 3,203 19,485 $

30,231 $ (199) 1,072 31,104 $

21,415 $ (653) 576 21,338 $

35,590 $ 278 946 36,813 $

23,999 (569) 456 23,885

5,278 $ 5,278 $ 31,728 31,728 $

4,139 $ 4,139 $ 23,624 23,624 $

$ (7,000) (7,000) 31,728 $ 24,104 55,832 $

$ (7,000) (7,000) 23,624 $ 14,338 37,962 $

$ (14,000) (14,000) 55,832 $ 22,813 78,645 $

(14,000) (14,000) 37,962 9,885 47,847

Exhibit 34:Balance Sheet Balance Sheet

Year 1 HIGH

Year 2 HIGH

LOW

Year 3 HIGH

LOW

LOW

ASSETS

Current Assets Cash Inventory

$

31,728 $ 1,971

23,624 $ 1,867

55,832 $ 2,170

37,962 $ 2,519

78,644 $ 1,892

47,847 3,089

Total Assets

$

33,699 $

25,490 $

58,001 $

40,481 $

80,536 $

50,935

$

4,263 $

3,203 $

5,335 $

3,779 $

6,281 $

4,235

LIABILITIES AND OWNER'S EQUITY Liabilities Tax Payable Owner's Equity Capital Retained Earnings Total Owner's Equity Total Liabilities and Owner's Equity

$

5,278 24,158 29,436

4,139 18,149 22,288

5,278 47,389 52,667

4,139 32,563 36,702

5,278 68,979 74,257

4,139 42,562 46,701

33,699 $

25,491 $

58,002 $

40,481 $

80,537 $

50,936

Statement of Retained Earnings Year 1 Beginning Retained Earnings Add: Net Income Less: Drawings Ending Retained Earnings

HIGH $

$

Innovation:Thinking inside the box

LOW $

24,158 24,158 $

Year 2 HIGH LOW $ 24,158 $ 18,149 30,231 7,000 18,149 $ 47,389 $

18,149 21,415 7,000 32,563

Year 3 HIGH LOW $ 47,389 $ 32,563 35,590 23,999 14,000 14,000 $ 68,979 $ 42,562

Page 45


Exhibit 35:Margin of Safety, ROI, Payback Year Margin of Safety Rate on Investment (HIGH) Year 1 90% 458% Year 2 91% 573% Year 3 91% 674% Year Margin of Safety Rate on Investment (LOW) Year 1 86% 438% Year 2 88% 517% Year 3 87% 580%

Payback (Months) 262% 210% 178% Payback (Months) 274% 232% 207%

Exhibit36:Contribution Source Unit Contribution Contribution Margin Online $ 44 87% Wholesale $ 20 82% CAISA $ 45 91% Weighted (High) $ 44 91% Weighted (Low) $ 44 91%

Exhibit 37:Break-even Analysis Year Break-even Break-even

(HIGH) Year 1 Year 2 Year 3 Year (LOW) Year 1 Year 2 Year 3

(Units) 92 94 114 Break-even (Units) 91 92 112

Page46

(Sales) $ 4,412 $ 4,432 $ 5,401 Break-even (Sales) $ 4,406 $ 4,413 $ 5,372 Feasibility Study


Exhibit 38:Break-even Target Profit Analysis Year Target Profit Target Profit Break-even (HIGH) (Units) Year 1 $ 10,000 322 Year 2 $ 14,000 427 Year 3 $ 19,600 562 Year Target Profit Target Profit Break-even (LOW) (Units) Year 1 $ 10,000 318 Year 2 $ 14,000 421 Year 3 $ 19,600 555

Innovation:Thinking inside the box

Target Profit Break-even (Sales) $ 15,365 $ 20,296 $ 27,037 Target Profit Break-even (Sales) $ 15,343 $ 15,827 $ 26,892

Page 47


Page48

Feasibility Study


APPENDIX “And These Numbers Continues to Grow.” Statistics Canada. Canadian Government. June 10, 2008. Web. January 17, 2011.<http://www.statcan.gc.ca/pub/63-271-x/2011000 /part-partie1-eng.htm>. “Annual Wholesale Trade.” Statistics Canada. Canadian Government. March 29, 2011. Web. December 18,2011.<http://www.statcan.gc.ca/daily-quotidien111012dq111012aeng.htm) and these numbers continue to grow>. Caseco. Date Unknown. Web. January 17, 2012.<http://www.caseco.co.uk/leather_cases.php>. “Consumer Lifestyles in Canada.” Euromonitor. February 2011. Database. January 11, 2012. “Digital Printing Microfiber Glasses Cloth.” Alibaba. Date Unknown. Web. December 21, 2011. <http://www.alibaba.com/productgs/526960727/digital_printing_microfiber_glasses_cloth.html>. "Does Computer Use Damage Kids' Eyes? - ABC News." ABCNews.com - Breaking News, Latest News & Top Video News - ABC News. ABC News, 16 Dec. 2005. Web. 14 Jan. 2012. <http://abcnews.go.com/Health/Technology/story?id=1409940>. Eddies’ Hang-Up Display LTD. N.P. Web. January 21, 2012.<http://www.eddies.com/t_prod_detail/399/165053/1/10.htm>. “Handbags, Luggage & Accessory Stores in the US.” IBIS World. September 2011.Web. November 27, 2011.<http://clients.ibisworld.com.proxy1.lib.uwo. ca:2048/industryus/default.aspx?indid=1965>. “Importer Guide” Canada Border Services Agency. Canadian Government. September 17, 2011. Web. January 23, 2012.<http://www.cbsa-asfc.gc.ca/import/menu-eng.html>. “Leather Good & Luggage Manufacturing in the US.” IBIS World. December 2011.Web. November 27, 2011.<http://clients.ibisworld.com.proxy1.lib.uwo.ca :2048/industryus/default.aspx?indid=374>. Lee, Yu Hsien. Company Interview, Kolkata 700046, India, January 15, 2012. Merchant Paypal. Paypal. Web. 11 Jan. 2012. <https://merchant.paypal.com/ca/cgi-bin/ marketingweb?cmd=_render-content&content_ID=merchant/home&nav=2>.

Innovation:Thinking inside the box

Page 49


Nelson, Darrell. “Girls Handbags Exposed in Smartphone Campaign.” Japan Trends. CScout Japan. October 13, 2011. Web Article. January 21, 2012.<http://www.japantrends.com/girls-handbags-contents-reveals-smartphonpersonality>. Papernstitch : A Community Showcasing the Best in Art, Handmade, and Vintage. Papernstitch. Web. 14 Feb. 2012. <http://PapernStitch.com>. “Seasonal and Quarterly Results.” Form 10-K. Urban Outfitters Inc. April 1, 2011. Page 39. Print. “Section 47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard” Canada Border Services Agency. Canadian Government. September 17, 2011. Web. January 23, 2012.<http://www.cbsa-asfc.gc.ca /tradecommerce/tariff-tarif/2010/01-99/tblmod-eng.html>. Sen, Sankar and C.B. Bhattacharya. “Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Responsibilities.” Journal of Marketing Research.Volume: (May 2001). Page 225. Print. “Spectacles-US.”Euromonitor. May 2010. Database. January 11, 2012. “The Leather Industry.” PETA. Unknown Date. Web. February 1, 2012.<http://www.peta.org/ issues/animals-used-for-clothing/leather-industry.aspx>.

Page50

Feasibility Study


Innovation:Thinking inside the box

Page 51


Page52

Feasibility Study


Itbox proposal  

feasibility study 2257

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