XXXXX XXXXX XXX
Business Plan for a silver jewelry company
Table of Contents
Contents
Page
Executive Summary
1
The Market
2
Business Model
9
The Team
17
Strategies
23
The Financials
25
Executive Summary The jewelry industry is as dynamic as it is fast growing. Consumer appetite for jewelry, which was dampened by the global recession, now appears more voracious than ever. According to McKinsey & Company, Annual global sales of €148 billion are expected to grow at a healthy clip of 5 to 6 percent each year, totaling €250 billion by 2020. XXXXX. is a company carrying on the business of wholesale of Artisan Crafted Silver Jewelry more than 20 years across countries such as the USA, Canada, England, Italy, Germany, France, Middle East and Australia, through different retail venues. The company was incorporated on 10th August 1999 and has been operating successfully in the market, since then. The company’s registered office is located in Oyster Bay. XXXXX sources its inventory from the renowned jewelry manufacturers and designers in Istanbul, Turkey and has a long standing relationship with all its suppliers. XXXXX and Silver mainly sells filigree art jewelry. The company’s products are sold in a variety of retail channels including the company’s website, TV marketing channels, online shopping channels, departmental stores and other retail outlets.
$4.595 mn Net Present Value
12%
Revenue Growth
12%
Gross Profit Growth
Some of its distribution channels include amazon.com, ebay.com, HSN, QVC, JTV, Zulily.com etc. Over the years, the company has accumulated more than four thousand samples in its catalog and secured more than five thousand customers.
4%
Net Profit Growth
The company is run and managed by XXXXX, the Founder, President and CEO. He has more than 33 years of industry and business experience. The company is currently focusing expanding into new markets, moving into a bigger store and recruiting additional employees.
41%
The company is looking to bring on board XXXXX. XXXXX together possess great expertise in design, making, merchandising and marketing, thus becoming to add a lot of value to the business in terms of assisting in strategy formulation and conducting business operations effectively. XXXXX are seeking E1 Visa to become directly associated with the company’s US operations.
1
Cash Growth
The Market Industry Overview At a global level, the jewelry industry is as dynamic as it is fast growing. Consumer appetite for jewelry, which was dampened by the global recession, now appears more voracious than ever. According to McKinsey & Company, Annual global sales of â‚Ź148 billion are expected to grow at a healthy clip of 5 to 6 percent each year, totaling â‚Ź250 billion by 2020. However, the US jewelry market has been negatively affected by an appreciating dollar, over the five years to 2017. As a majority of industry revenue is derived from exports, an appreciating dollar has served to taper international demand for industry products because they are becoming comparatively more expensive. IBISWorld expects US jewelry industry revenue to decline at an annualized rate of 2.4% to $7.3 billion over the five years to 2017, including a 2.6% decrease in 2017 alone.
While exchange rate dynamics are unlikely to benefit this industry, other structural changes taking place in the economy will potentially offset decelerating export growth and mitigate greater declines in industry revenue.
For example, the number of households earning more than $100,000 per year is expected to increase at an annualized rate of 1.1%, reaching 27.9% of all households in the United States by 2022. This increase represents an opportunity for this industry. This market segment is of prime importance for this industry, as it constitutes one of the largest markets for the industry’s products. People in this income group engage in more discretionary spending, are brand-conscious and are not deterred by premium price tags on premium products.
Uncertainty in currency and capital markets has resulted in consumers purchasing precious metals as stores of value. However, as the dollar started gaining momentum and capital markets normalized, demand for gold as a store of value has declined. These conditions induced volatility in industry revenue and profit margins, which dissuaded new operators from entering and forced some to exit the industry altogether. Over the five years to 2017, industry enterprises declined at an annualized rate of 0.9%. Source 1: https://www.mckinsey.com/industries/retail/our-insights/a-multifaceted-future-the-jewelry-industry-in-2020 Source 2: www.Ibisworld.com
2
The Market 2018 US Jewelry Sales In the first half of 2018, jewelry sales in the US totaled $30.5 billion, according to government estimates. It forecasts total 2018 jewelry sales at a little more than $68 billion, a 7% yearover-year growth. In July, jewelry sales rose to an estimated $4.8 billion, according to the latest government data. It represents an 8.7% year-over-year increase on an annualized basis.
The top buyers of fine jewelry at any time of the year are married people without children in the 25-34 age group, the millennials, who buy more jewelry than anyone else. Consumers have increased their online shopping, and this trend is being seen across a variety of categories, including. The rise of internet retailing has forced jewelry and watch specialist retailers as well as department stores to close unprofitable stores and improve their online capabilities.
60 Years of US Jewelry Sales
Source 1: http://edahngolan.com/jewelry-market-is-much-smaller-than-you-think/
3
The Market The US Jewelry Industry
Key External Drivers World price of silver Much like the price of gold, the world price of silver also drives up production costs and prices for industry products. When silver prices are high, the overall price of jewelry increases, causing demand to decline. The world price of silver is expected to increase slightly in 2017. World price of gold The world price of gold affects the production costs and price of fine jewelry. During periods of increased gold prices, production costs for jewelry manufacturers rise, causing industry operators to either incur lower profit margins or raise the prices of goods. Greater prices typically reduce demand for jewelry, adversely affecting industry sales. The world price of gold is expected to increase in 2017, posing a potential threat to the industry. Demand from jewelry wholesaling Jewelry wholesalers purchase industry products such as fine and costume jewelry, silverware and lapidary work from operators in this industry and resell them to retailers. Demand from jewelry and watch wholesaling is expected to increase in 2017, representing a potential opportunity for the industry. Demand from jewelry stores In recent years, wholesale bypass has become a commonplace practice in this industry. Cutting out the middleman enables industry operators to improve and sustain profit margins, enabling downstream retailers to save on the markup imposed by wholesalers. Additionally, it creates a direct communication channel between retailers and manufacturers, which enables the latter to respond to changes in consumer tastes and demand more rapidly. Demand from jewelry stores is expected to increase in 2017. Per capita disposable income During periods when disposable income is low, retail demand declines since consumers’ purchasing power is reduced, inducing them to delay or cut back on purchases of industry products. Subsequently, manufacturing demand falls as retailers purchase fewer items to stock inventory. Conversely, when disposable income increases and demand for industry goods rises, retailers are likely to purchase more from manufacturers, leading to higher industry demand. Per capita disposable income is expected to 3 increase in 2017. 4
The Market The Turkish Jewelry Industry In recent years, the Turkish jewelry industry has become an exporter of precious metals and jewelry that rivals Italy, the world leader in the field. In the past five years, turkey imported an average of 225 tons of gold each year. The Turkish jewelry industry employs about 250,000 people. In Turkey there are about 3,000 manufacturers, 500 wholesalers, and 25,000 retailer stores. Istanbul is considered the main manufacturing area, and other areas include the capital Ankara as well as Izmir and Anatolia. The US – Turkish Trade Relation Forbes reported that, the trade volume between the US and Turkey expanded by almost 18.5 percent during President Trump’s first year in office. Turkey’s trade with the United States rose to $15.3 billion through the first nine months of 2018, according to a WorldCity analysis of latest U.S. Census Bureau data. That’s 9.69 percent above its total trade during the same time period last year. Turkey’s exports increased 9.19 percent while imports rose 10.2 percent. The U.S. deficit with Turkey was $24.6 million.
Turkey ranked No. 32 among the United States’ top trade partners through the current period. In the same period one year ago, it ranked No. 33. In the latest annual figures available, Turkey recorded $19.17 billion in trade with the United States. At year’s end, its were New York City; Houston; Atlanta/Savannah; Los Angeles; and New Orleans. Total U.S. exports to Turkey were $ 9.75 billion and imports from Turkey were $9.42 billion. The U.S. surplus with Turkey was $329.55 million. Source 1: https://www.forbes.com/sites/mfonobongnsehe/2018/06/15/why-turkeys-economy-is-rising-and-what-it-means-for-trading-partners-in-africa-nihat-zeybekci/#600cc4e84130 Source 2: https://www.ustradenumbers.com/country/turkey/
5
The Market
Trade-weighted index The trade-weighted index (TWI) represents the value of the US dollar relative to foreign currencies. When the TWI is low, US-made jewelry becomes more affordable to foreign buyers because the dollar has a relatively lower value against other currencies. Conversely, when the TWI rises, US-made jewelry becomes relatively more expensive on the global market. The TWI is expected to decrease in 2017. Households earning more than $100,000 Jewelry, watches and silverware are nonessential goods that are most often purchased by high-income earners (households in the highest income quintile). As the number of households in this group increases, so does the consumption of jewelry products. The number of households earning more than $100,000 is expected to increase in 2017.
Online Retail Sales ComScore analysis of online retail commerce in 2015 shows strong growth in purchases being made from both desktop and mobile platforms. In the first three quarters of 2015, retail sales made via desktop purchases grew 7% year-over-year to reach $179 billion.
For the 3rd quarter alone, combined online ecommerce sales reached $69.7 billion, including $11.4 billion in retail purchases made exclusively from mobile devices. Blue Nile, the dominant online retailer of jewelry, reported a 1.4% increase in year-on-year sales for 2015. Net cash from operating activities was $8 million for the year ending January 2016, compared with $17.2 million for the year ending January 2015.
Source: https://www.polygon.net/jwl/public/documents/resource-center/industry-reports/2016-US-Retail-Jewelry-Industry-Report-NM.pdf
6
The Market
Filigree Filigree refers to jewelry that incorporates into its design handcrafted twisted threads usually of gold and silver or other metals. The metal is soldered and is arranged in delicate designs of various patterns on the gold or silver jewelry, its appearance is reminiscent of lace. Filigree can sometimes be used as a term to describe any type of pattern in jewelry that looks delicate, intricate and sophisticated. Filigree is an ancient art form; its woven thread design has a rich history and not just in jewelry design. Bowls, buttons and trophies used filigree patterns as decorations. However, filigree soon became famous for its use in jewelry design. Artisans began to create ornamental pieces with intricate design, taking inspiration from earlier filigree art and lace designs. Filigree jewelry in the form of flowers and leaves became quite popular. Archaeological finds in ancient Mesopotamia indicate that filigree was incorporated into jewelry since 3,000 BC. Specific to the city of Midyat in Mardin Province, in Turkey , a form of filigree using silver and gold wires, known as "telkari", was developed in the 15th Century. To this day, expert craftsmen in this region continue to produce fine pieces of “telkâriâ€?. Methods of Fabrication and Use The art may be said to consist in curling, twisting and plaiting fine pliable threads of metal, and uniting them at their points of contact with each other, and with the ground, by means of flux such as borax, by the help of the blowtorch. When granulated motifs are desired, small beads are made traditionally by using precious metal wire or fine sheet to start with, which is cut up in small pieces mixed with flux and placed in the small holes of a pitted block of charcoal (or any other suitable refractory material) and are then melted with a blowtorch, after which the bits of wire curl up and take a natural spherical like shape to end up in minuscule grains which slightly differ one from the other. Small grains or beads of the same metals are often set in the eyes of volutes, on the junctions, or at intervals at which they will set off the wirework effectively. The more delicate work is generally protected by framework of stouter wire.
The Market Competitive Analysis Kencraft Kencraft is a renowned company operating in the American jewellery industry since 1984.Since its inception, Kencraft was dedicated to unique and innovative designs, as well as excellent customer service. They are involved in manufacturing, import, and wholesale of sterling silver jewellery. Their brands include Stallone, Elenganza D’ Argento, Spirit, Colors of Life, Tesori Mondo, nd Victorian Heilrooms. Their products range from Earrings, Bracelets, Larimars, Pendants, Electroforms, Bangles etc.
Silver Depot Silver Depot is a company based in Los Angeles, California and has been involved in the wholesale of jewellery for more than 20 years. The company specialises in the wholesale of sterling silver jewelry, stainless steel jewellery and titanium jewellery. The company operates through its own online shopping website, where it has a catalogue of a wide range of its products and designs. Sonara Jewelry Sonara Jewelry has been in business for over 35 years. The company manufactures and imports the latest designs and specialize in quality jewelry, direct to wholesale. Located in the heart of the Jewelry District in Los Angeles, the company’s showroom has one of the largest selections of Silver Jewelry in the United States. The company also has its own website to reach online customers. Richline: Richline Group, Inc., a wholly-owned subsidiary of Berkshire Hathaway Inc. since 2007, is the USA's foremost, financially-strong Jewelry Manufacturer. We compete with them in selling to TV Companies, such as QVC, HSN, JTV and retailers such as TJMax and Zulily. Some of the other established players in the American jewelry industry include Alamode Fashion Jewelry Wholesale, DDFLimport.com, Planet Silver, Michelle and Scott’s Wholesale Import, Goldfathers’ Jewelry Inc., KIS Jewelry, Blake Brothers etc., and designers like Samuel B., Carolyn Pollack, Or Paz, Hagit and YS Gems are also part of the competitive landscape. 7
The Market SWOT Analysis Weaknesses
Strengths • • • • • • •
Long established business Sourced from established business in Turkey Experienced management team Attained sustenance Selling "filigree style jewelry" which is not common in USA market. A uniqe work. Well known brand about "filigree art" All productions are handcrafted.
Opportunities • • • • • •
Partnering with retail outlets to better penetrate the market Possibilities of adding a greater range of designs and products South American Countries are big potential market for DGS. DGS used to sell "filigree" in Panama and Mexico. DGS will regain that market with high quality productions. Middle East Countries and Australia will be new potential market. Still get in touch with new buyers.
• None of big established players sell "filigree style " jewelery.
S
W
O
T
Threats •
• •
Economic downturns and/or extreme increase in metal (silver) prices is the biggest threat Adoption of omnichannel strategy Putting off significant milestones
8
Business Model Business Overview XXXXX is a jewelry wholesale company based in Oyster Bay, New York. The company was founded by XXXXX, on 10th August 1999. The company has been involved in the wholesale of atisan-crafted silver jewelry in the entire US and global online markets. The company has been in the business for more than 20 years and serves major markets in the USA, Canada, England, Italy, Germany and France, through different retail venues. XXXXX sources its inventory from the renowned jewelry manufacturers and designers in Istanbul, Turkey. Dynasty has been selling products to TV Companies for consecutive 20 years is one of the most difficult task to accomplish and requires constant renewal of styling, excellent quality, and timely execution of all orders placed The company’s products are sold in a variety of retail channels including the company’s website, TV marketing channels, online shopping channels, departmental stores and other retail outlets. Some of its distribution channels include amazon.com, ebay.com, HSN, QVC, JTV, Zulily.com etc.
The company is run and managed by XXXXX, the Founder, President and CEO. He has more than 40 years of industry and business experience, and is one of the best educated jewelry professional in the US. The company is currently focusing expanding into new markets, moving into a bigger store and recruiting additional employees. The company is looking to bring on board XXXXX. XXXXX has over more than 30 years’ experience in design and making of artisan crafted jewelry and will take charge of the design and styling functions of the company. XXXXX has several years of experience in marketing and merchandising of artisan crafted jewelry. Currently, XXXXX has been marketing artisan crafted jewelry in one of the most demanding markets, Dubai.
Business Summary Name: XXXXX Formation: 10th August 1999 Geographical Focus: Entire USA and Global Online Markets Management: XXXXX Address: XXXXX Distribution: Online shopping portals, retail stores, TV marketing channels channels.
9
Business Model Products and Services The company’s primary products include fine silver jewelry crafted by Turkish artisans. The company specializes in the wholesale of filigree style silver jewelry in the US and global online markets. The company’s products are sold in a variety of retail channels including the company’s website, TV marketing channels, online shopping channels, departmental stores and other retail outlets. Some of its distribution channels include amazon.com, ebay.com, HSN, QVC, JTV, Zulily.com etc. The company has an attractive, user-friendly website through which it appeals to and attracts the online customers. The website has easy navigations and stores a wide spectrum of catalogue designs. Features Free standard shipping on all orders 30-day money back guarantee
Secure checkout via Paypal Turkish Filigree designs
10
Business Model Mission-Vision-Goals Vision The company envisions to become the most preferred and trusted brand in the jewelry industry, by ensuring unique collections of exquisite jewelry pieces, designed with fine artisan skills, and to expand across the globe serving a major proportion of the market. Mission The company’s mission is to sell great designs of jewelry, with no compromise on quality and fashion. To better satisfy the market through detailed observation of the changing trends and fashion. To initiate and execute effective business and marketing strategies to enhance brand visibility, functioning with carefully drafted policies. Benefits to the US Economy • The company will recruit locally in the US to build a strong team over the next five years; thus creating employment opportunities in the US. • The company will help drive the US economy forward with a combined turnover of about $15 million in these five years. • The company will remain active in the local economy Goals • Customer satisfaction • Expansion into other global markets • Achieve greater profitability • Strengthen brand reputation
11
Business Model Target Customers The target customers of the company consists of men and women across the global population with primary focus in the United States of America. The major proportion of the customers are online buyers from across the USA, Canada, England, Italy, Germany, France, Middle East and Australia. Growth in the global jewelry market is being fueled by the shift to e-commerce. According to Research and Markets, the global jewelry market is expected to reach $257 billion in 2017, and grow at a rate of 5% per year over the next five years. While the online fine jewelry market currently accounts for only a fraction (4%–5%) of this, it is expected to grow at a much faster rate, and to capture 10% of the market by 2020. Online fashion jewelry sales are projected to take an even bigger slice, capturing 15% of the market by 2020, according to Connecting Dots. The online jewelry market is experiencing tremendous growth in Asia, in particular, where it saw a CAGR of 62.2% from 2011 to 2014. As global luxury e-commerce approaches a tipping point, McKinsey & Company expects the luxury category’s share of online sales to double, from 6% to 12% by 2020, and for 18% of luxury sales to be made online by 2025. Consumers are becoming more and more comfortable shopping online, which will only add to the growth of this segment of jewelry sales. Jewelry sellers are capitalizing on the opportunity in this market by coming up with innovative ways, from personalization to curation to home trial options, to address consumers’ concerns.
Source: https://www.forbes.com/sites/deborahweinswig/2016/04/14/as-fine-jewelry-moves-online-the-market-sparkles/#3c868d5e74ae
12
Business Model B2C Market Segmentation The overall sales of the company can be categorized into five broad categories as follows: The sentimentalist This segment likes high-quality jewelry with sentimental value and looks for timeless pieces that last. This segment likes the idea of participating in the ownership experience, picking out the metal, choosing their style, understanding the qualities The Gifter This segment literally buys jewelry only as a gift. They don’t know much about jewelry and frankly doesn’t enjoy the shopping experience. They desire considerable guidance from a jewelry expert. The stylish shopper This segment likes the extra bling they get from jewelry, wears jewelry often, and thinks about it as part of an outfit. The influencer This customer buys jewelry for others or him or herself, uses jewelry to show status, and cares very much about brands. The practical shopper This customer is a low-key purchaser who likes inexpensive jewelry and likes to wear it every day.
Source: https://www.forbes.com/sites/deborahweinswig/2016/04/14/as-fine-jewelry-moves-online-the-market-sparkles/#3c868d5e74ae
13
Business Model Key Suppliers The company sources its inventory from renowned jewelry manufacturers in Istanbul, Turkey. The company has a long standing relationship of more than 20 years with its suppliers. XXXXX. is a company carrying on the business of wholesale of Artisan Crafted Silver Jewelry more than 20 years across countries such as the USA, Canada, England, Italy, Germany, France, Middle East and Australia Filigranist Filigranist is a supplier of silver filigree designer jewelry. It is based in Istanbul, Turkey: XXXXX has been working indirectly with Filigranist through Diva and Mert Alyans. Diva Kuyumculuk Diva Kuyumculuk is a jewelry manufacturer and designer based in Istanbul Turkey. XXXXX has more than 10 years working relationship with Diva Kuyumculuk. Diva acts as a hub for smaller design workshops. Mert Kuyumculuk Mert Kuyumculuk is also a jewelry manufacturer and designer based in Istanbul Turkey. XXXXX has more than 10 years working relationship with Mert Kuyumculuk. Mert also acts as a hub for smaller design workshops. Gemstone Gemstone is a supplier of gemstones imported from India, Brazil and Africa. XXXXX has been sourcing from Gemstone for more than a decade. Gemstone is based in New York. Zarlene Zarlene is one another supplier of gemstones and is located in Miami, Florida. The company’s other suppliers include Intercept Silver and Jewelry, Interpak and other miscellaneous suppliers from whom Silver anti-tarnish papers and jewelry boxes are sourced. 14
Business Model
Critical Success Factors Having an extensive distribution/ collection network Established links and contracts with retailers and distributors are an important factor in sales. JManagement of seasonal production Jewelry can be a seasonal purchase, so supply control over peak demand periods is vital for success. Ability to pass on cost increases Passing on price increases in the cost of raw materials to clients ensures profitability is maintained. Effective quality control Quality checks and standards for manufactured products protect the reputation of the company. Access to niche markets Niche markets can provide profit for the expertise in design skills that a company may have in a particular field.
15
Business Model
Roadmap Short-Term Milestones • • • • • • •
Shift to a new office of operation Recruitment & training Increase the scale of operations Tie-up with new online distribution channels Increased marketing Begin in-house designing Using web for wholesaling around the world
Long-Term Milestones • Add more contemporary designs to the catalogue • Expand into other geographic markets • Expansion of products lines to include other Gold, and other precious metals • Increased brand visibility • Launch of massive marketing and distribution • Advertising in Digital Media • Being a globally well-known filigree art brand
16
The Team Management Summary XXXX XXXXX provides strategic direction to the company and handles the day-to-day operations of the business. XXXXX was graduated from Cornell University. XXXXX holds a doctorate in Economics. XXXXX carries with him more than three decades’ of jewelry business experience. XXXXX is a mastermind in business development, Strategic planning and execution, financial planning, merchandising and marketing. He is a self-motivated entrepreneur who has managerial as well as operative experience in running the business. He has an understanding of the operations of the business, the products and services in the industry, the materials used in the products, the latest trends in the industry etc. Thus, he is able to decide the type of design to be sourced and sold. His understanding of and experience in the industry enables him to provide maximum customer satisfaction.
XXXXX, VP Operations XXXXX is the Vice-President of the company. XXXXX holds an MS degree from in Economics from Bogacizi university. XXXXX is responsible for financial planning, merchandising, accounting, customer relations, shipping, quality and inventory control. XXXXX is highly customer centric with excellent relationship building skills as evidenced by her achievements in the years of experience in the business. She has strong sales and marketing skills to build new business and cultivate existing customer relationships. XXXXX is self-confident, organized, and motivated. She brings creativity and entrepreneurial spirit to all her business endeavors.
17
The Team Applicants of E1 Visa XXXXX, VP Design and Product Development XXXXX is a great designer and carries with him over a decades’ experience in styling and designing of artisan crafted jewelry. The design products of XXXXX have been sold to a range of clients including QVC, HSN, Zulily, and TJ Max to name a few. XXXXX is a designer, and maker of Filigree Jewelry, which is the art of embroidery with metal thread. The jewelry is substantially hand made, and rare. There is huge demand for such filigree jewelry in the American Market, XXXXX is one of the forerunners in this field.
Experience Founder, Production Manager, Shareholder April 1, 2005 – Present; XXXXX XXXXX managed the online, retail and wholesale sales of the company. Freelance Designer February 1, 1999- March 30, 2005; XXXXX has made lots of new designs during the time of freelancing, inspiring from historical places. His designs have been sought after by and inspired a number of wholesalers in the silver market in Istanbul. Designer and Sales Representative Bekiraga Jewelry Retail Shop November 1, 1989 – January 30, 1999 XXXXX designed over 2000 pieces of silver jewelry during his tenure in Bekiraga.
18
The Team Applicants of E1 Visa XXXXX, VP Marketing XXXXX possesses deep expertise in marketing artisan crafted jewelry in the Turkish and International markets, especially Dubai and Saudi Arabia, evidently seen as the most difficult to penetrate markets.
Educational Information • Bachelor of Science, Environmental Engineering, (1997 – 2001) Engineering Faculty, Sakarya University, Sakarya – Turkey • St.Giles College, Highgate – London – UK Advance Certification 15/Sep/2002 – 18/Mar/2003
Experience Sales Manager XXXXX, Wholesale Home Textile Sales Manager, Shareholder XXXXX Wholesale Home Textile
Shareholder and Sales Manager XXXXX Silver Jewelry Producing
(03/Jul/2004 – 07/Aug/2009)
(03/Dec/2009 – Present)
(11/Jan/2018- Present)
19
The Team
Organizational Structure
XXXXX President
XXXXX Uca VP of Operations
XXXXX VP Product Design
XXXXX VP Marketing
Sales Manager
Web-designer
XXXXX Art Director & Multimedia Artist
XXXXX Drop Ship Executive
Office Assistant Indicates that these employees will be added after the E1 visa approval
Note: The company will be hiring one more Web-designer and two Sales Representatives in the coming year to support the increased scale of operation. 20
The Team Job Descriptions President • Provide overall direction to the company • Monitor overall operations of the company • Undertake correspondence with suppliers and partners • Financial planning and management • Decide on the marketing initiatives • Formulate business strategies Vice-President • Assist the president in conducting the business • Provide strategic ides for business development • Supervise the work of subordinates • Undertake inventory management • Decide on the economic order quantity • Merchandising, shipping and customer relationship management
Web-Designer • Write and edit content • Design webpage layout • Determine technical requirements • Update websites • Create back up files • Solve code problems
Computer Programmer • Troubleshoot system bugs and issues • Respond immediately to tech support requests from within the business • Debug code for existing programs based on immediate need
Sales Manager • Achieve growth and hit sales targets • Build and promote strong, long-lasting customer relationships • Present sales, revenue and expenses reports and realistic forecasts to the management • Identify emerging markets and market shifts while being fully aware of new products and competition status
21
The Team Staffing Plan Particulars Designation President Vice-Presidents Art Director and Multimedia Artist Sales Representative Dropship Assistant Office Assistant
2019
2020
2021
2022
2023
1 3 1 0 1 0
1 3 1 0 2 1
1 3 2 0 3 1
1 3 2 1 3 1
1 3 2 2 3 1
Salaries Per Person President Vice-Presidents Art Director and Multimedia Artist Sales Representative Dropship Assistant Office Assistant
60,000 45,000 50,000 37,500 25,000 25,000
61,200 45,900 51,000 38,250 25,500 25,500
62,424 46,818 52,020 39,015 26,010 26,010
63,672 47,754 53,060 39,795 26,530 26,530
64,946 48,709 54,122 40,591 27,061 27,061
Total Salaries President Vice-Presidents Art Director and Multimedia Artist Sales Representative Dropship Assistant Office Assistant
60,000 135,000 50,000 25,000 -
61,200 137,700 51,000 51,000 25,500
62,424 140,454 104,040 78,030 26,010
63,672 143,263 106,121 39,795 79,591 26,530
64,946 146,128 108,243 81,182 81,182 27,061
Total Salaries
270,000
326,400
410,958
458,972
508,743
22
Strategies Business Strategies Strategic • • • • • • •
Build brand awareness Achieve a high degree of profitability Settle on product-category mix Discover and land on new distribution channels High product quality standards Geographic expansion Expansion of product lines
Managerial • • • • •
Build relationships with partners and suppliers Analyse customer purchasing patterns Set target markets based on purchasing patterns Build marketing strategies tailored to target markets Enter into contracts with vendors
Tactical • • • • • •
Deal in high-quality products Provide excellent service Enhance customer satisfaction Implement marketing and promotional strategies Offer discounts and coupons Timely delivery
23
Strategies Marketing Strategies Social Media The company will penetrate social media sphere with updated pages and regular activity and promotional posts on Facebook, Instagram, LinkedIn, Twitter, etc. to stimulate wordof-mouth publicity and attract followers. Blogs The company will implement blogs for people to express their opinion on latest topics in the lingerie industry, freedom of expression in modern life, self esteem building etc. Website The company will enhance its online website to be more visually appealing and easy-to-browse website with high-quality photos of products and a section of articles related to jewelry and fashion to stimulate traffic and increase awareness/education of the target audience. Free shipping The company provides free shipping for all orders. Special Discounts The company will offer special sales discount events for specific product lines (alternating product line each time) to stimulate traffic.
24
Financial Plan
Sources & Uses of Funds
Particulars Uses of Funds Office Space Computer Hardware Recruitment Working Capital
Amount in $ Amount
Uses of Funds
30,000 20,000 150,000 50,000
Total
250,000
Sources of Funds Equity
250,000
Total
250,000
20%
12% 8%
60%
Office Space
Computer Hardware
25
Recruitment
Working Capital
Financial Plan Income Statement Particulars Revenue Sales Total Revenue
2019
2020
2021
2022
2023
2,300,000 2,300,000
2,760,000 2,760,000
3,312,000 3,312,000
3,477,600 3,477,600
3,651,480 3,651,480
Cost of Goods Sold (COGS) COGS
1,265,000
1,518,000
1,821,600
1,912,680
2,008,314
Gross Profit
1,035,000
1,242,000
1,490,400
1,564,920
1,643,166
Expenses Salaries Rent & Utilities Repairs & Maintenance Marketing Expenses Telephone Expenses Administrative Expenses Professional & Legal Depreciation Total Expenses
270,000 30,000 46,000 161,000 115,000 115,000 6,000 115,000 858,000
326,400 30,600 55,200 193,200 138,000 138,000 7,200 138,000 1,026,600
410,958 31,212 66,240 231,840 165,600 165,600 8,640 165,600 1,245,690
458,972 40,000 69,552 243,432 173,880 173,880 10,368 173,880 1,343,964
508,743 40,800 73,030 255,604 182,574 182,574 12,442 182,574 1,438,340
Profit Before Tax Tax Profit After Tax
177,000 177,000
215,400 215,400
244,710 244,710
220,956 220,956
204,826 204,826
26
Financial Plan Cash Flow Statement Particulars Cash Inflow Revenue Equity
2,300,000 250,000
2,760,000 -
3,312,000 -
3,477,600 -
3,651,480 -
Total Inflow
2,550,000
2,760,000
3,312,000
3,477,600
3,651,480
Cash Outflow COGS Salaries Rent & Utilities Repairs & Maintenance Marketing Expenses Telephone Expenses Administrative Expenses Professional & Legal Computer Hardware
1,265,000 270,000 30,000 46,000 161,000 115,000 115,000 6,000 20,000
1,518,000 326,400 30,600 55,200 193,200 138,000 138,000 7,200 -
1,821,600 410,958 31,212 66,240 231,840 165,600 165,600 8,640 -
1,912,680 458,972 40,000 69,552 243,432 173,880 173,880 10,368 -
2,008,314 508,743 40,800 73,030 255,604 182,574 182,574 12,442 -
Total Outflow
2,028,000
2,406,600
2,901,690
3,082,764
3,264,080
522,000 522,000
353,400 522,000 875,400
410,310 875,400 1,285,710
394,836 1,285,710 1,680,546
387,400 1,680,546 2,067,946
Cash Surplus/(Deficit) Opening Balance Closing Balance
2019
2020
2021
2022
2023
27
Financial Plan Financial Charts
Financial Performance
Structure of Expenses 4,000,000 3,500,000
5%
0% COGS
5%
5%
Salaries Rent & Utilities
8%
Repairs & Maintenance
2%
3,000,000 2,500,000 2,000,000
Marketing Expenses
2%
59% 14%
Telephone Expenses
1,500,000
Administrative Expenses Professional & Legal
1,000,000
Depreciation 500,000 2019 Revenue
2020 Gross Profit
28
2021 Net Profit
2022
2023
Closing Cash
Financial Plan Financial Performance
Particulars Revenue Gross Profit Net Profit Closing Cash
2019 2,300,000 1,035,000 177,000 522,000
2020 2,760,000 1,242,000 215,400 875,400
2021 3,312,000 1,490,400 244,710 1,285,710
2022 3,477,600 1,564,920 220,956 1,680,546
Key Financial Indicators
Particulars Revenue CAGR Gross Profit CAGR Net Profti CAGR Cash CAGR Net Present Value (NPV)
$
Value 12% 12% 4% 41% 4,595,856
29
2023 3,651,480 1,643,166 204,826 2,067,946