Clothing Retail Business Plan
Clothing Retail Business Plan
Clothing Retail Business Plan
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Table of Contents
Executive Summary 1
Chart: Highlights...................................................................................................1
Objectives 2
Mission......................................................................................................................2
Keys to Success.........................................................................................................2
Company Summary 3
Company Ownership.................................................................................................3
Start-up Summary......................................................................................................3
Chart: Start-up......................................................................................................4
Table: Start-up Funding.........................................................................................5
Table: Start-up.......................................................................................................6
Company Locations and Facilities............................................................................6
Products 7
Product Description...................................................................................................7
Table: Carried Labels............................................................................................7
Competitive Comparison...........................................................................................7
Sales Literature..........................................................................................................8
Sourcing.....................................................................................................................8
Technology................................................................................................................9
Future Products..........................................................................................................9
Market Analysis Summary 10
Market Segmentation...............................................................................................10
Table: Market Analysis........................................................................................10
Chart: Market Analysis (Pie)...............................................................................11
Target Market Segment Strategy.............................................................................11
Market Needs...........................................................................................................11
Market Trends..........................................................................................................12
Market Growth........................................................................................................12
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Mahogany Western Wear
Industry Analysis.....................................................................................................13
Small Specialty Stores..........................................................................................13
Large Multi-owned Western Wear Retailers........................................................13
Main Competitors....................................................................................................13
Strategy and Implementation Summary 14
Competitive Edge....................................................................................................14
Marketing Strategy..................................................................................................14
Pricing Strategy.......................................................................................................14
Promotion Strategy..................................................................................................14
Distribution Strategy...............................................................................................15
Marketing Programs................................................................................................15
Positioning Statement..............................................................................................15
Sales Strategy..........................................................................................................15
Sales Forecast..........................................................................................................15
Table: Sales Forecast...........................................................................................16
Chart: Sales by Year............................................................................................17
Milestones................................................................................................................17
Chart: Milestones................................................................................................18
Management Summary 18
Organizational Structure..........................................................................................18
Management Team..................................................................................................19
Personnel Plan.........................................................................................................19
Table: Personnel..................................................................................................19
Financial Plan 20
Important Assumptions............................................................................................20
Table: General Assumptions................................................................................20
Key Financial Indicators..........................................................................................20
Chart: Benchmarks..............................................................................................21
Break-even Analysis................................................................................................21
Table: Break-even Analysis..................................................................................21
Chart: Break-even Analysis.................................................................................22
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Mahogany Western Wear
3
Mahogany Western Wear
Executive Summary
Mariono Tailors and Fabrics Wear is a new apparel store that caters to the
Rawalpindi and Islamabad community in Pakistan. As our name suggests our focus
is to provide wear apparel and accessories, and position ourselves as the top retail
store servicing this particular market and we are trying to expand our business in
UAE.
Our intentions are to obtain 80% market share and become a central hub of
shopping activity for the local population as well others outside home country who
enjoy wearing these apparel.
Mariono Tailors and Fabrics is located in Malik Centre in Blue Area. Mariono
Tailors and Fabrics centralized itself directly in position to the residental location
and social activities of our target market. We believe that this is critical to our
initial success and long-term growth.
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Chart: Highlights
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Objectives
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Mission
Mariono Tailors and Fabrics mission is to offer quality, name brand Mariono
Tailors and Fabrics wear in an assortment of sizes and styles to accommodate
all varying body styles and shapes.
Keys to Success
In order to succeed in the wear apparel industry Mariono Tailors and Fabrics must:
Carry an assortment of sizes to fit the more ample frames of their African-
American target customer base.
Provide customers with top notch personalized customer service in an
atmosphere of southern hospitality.
Advertise and promote in areas that our target customer base will learn about
our store.
Continuously review our inventory and sales and adjust our inventory levels
accordingly.
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Company Summary
Mahogany Western Wear is organized as a partnership among the two partners of
Chandra E. Miller and Derrick L. McCoy.
We will be located at 13328 1/2 Almeda Rd, Houston, TX, being the epi-center of
the African-American cowboy community on the south side of Houston.
Company Ownership
Start-up Summary
Mahogany Western Wear's incorporation costs are listed below. The company will
start with three months inventory on hand for apparel and accessories as this is the
main revenue generator. The majority of the company's assets will reside in
inventory. The opening days cash on hand balance will be $384.
The purpose of this business plan is to secure a $16,700 ACCION loan. This
supplemental financing is required to work on site preparation, inventory, and
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operational expenses. The loan amount appears in the long-term liability row of the
start-up summary. Other financing will include an owners investment of $5,100
and a short term revolving line of credit of $2,000 for inventory replenishment
during months of high receipts.
Successful operation and building a loyal customer base will allow Mahogany
Western Wear to be self sufficient and profitable in year two.
Chart: Start-up
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Start-up Funding
Start-up Expenses to Fund $9,416
Start-up Assets to Fund $14,384
Total Funding Required $23,800
Assets
Non-cash Assets from Start-up $14,000
Cash Requirements from Start-up $384
Additional Cash Raised $0
Cash Balance on Starting Date $384
Total Assets $14,384
Liabilities
Current Borrowing $0
Long-term Liabilities $16,700
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $2,000
Total Liabilities $18,700
Capital
Planned Investment
Owners Investment - Cash $5,100
Other $0
Additional Investment Requirement $0
Total Planned Investment $5,100
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Table: Start-up
Start-up
Requirements
Start-up Expenses
Rent $1,606
Grand Opening Event $400
Telephone & Utilities (3 months) $1,575
Travel - Dallas Market Buying Trip $350
Business Insurance $600
Advertising & Promotion $1,010
Store Fixtures/Decorations $1,500
Computer/Cash Register $950
Signage (Including Permits) $400
Organizational Dues & Subscriptions $125
Business/Office Supplies $400
Other $500
Total Start-up Expenses $9,416
Start-up Assets
Cash Required $384
Start-up Inventory $14,000
Other Current Assets $0
Long-term Assets $0
Total Assets $14,384
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Mahogany Western Wear will be located at 13328 1/2 Almeda Rd., Houston, TX
77045. This space has 1,020 square feet and has been leased for two years. This
location is central to the geographical location for the African-American cowboy
community in the southern part of Houston, TX. We feel it is essential to our initial
and ongoing success that we locate ourselves in the heartbeat of the community.
We also strive to create an atmosphere of acceptance and community, as well as a
retail environment where individuals can identify and bond with their culture.
All business deliveries and shipments will be handled through the store. The
company office will also be housed at this location.
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Products
Mahogany Western Wear will carry nationally recognized American western wear
brands (see list below). Our selection will range from the basics of Wrangler to
the trendy western style of Western Ethics. We will be purchasing through sales
representatives and manufacturers in a variety of sizes, colors and style to fit our
target market base. The greatest percentage of merchandise will be in apparel,
followed by accessories, hats, and gifts.
Product Description
Mahogany Western Wear will provide a selection of brands that fall within our
mission statement. Our goal is to carry a selection of labels from the hardcore
western wear to the more sophisticated southwestern styles.
Carried Labels
Cinch Rouchrider of Circle T
Circle Y of Yoakum Silver Strike Buckles
Cowboy Hardware Sunbody Hats
Hat 'N' Hand 20X by Wrangler
Lawman Jeans Urgent Gear
Panhandle Slim Western Ethics
Rocky Mountains Wrangler
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Competitive Comparison
Mahogany Western Wear has a number of advantages that will allow us to build
our brand identity, add value to our merchandise and build a loyal customer base
while standing apart from our competitors.
Sales Literature
Mahogany Western Wear will use a targeted advertising and sales program to
generate publicity and build a customer base.
200 grand opening invites will be mailed to potential new customers two
weeks before the grand opening in June, 2002. The invitation will also
include a promotional 10% coupon off a customer's first purchase. The
customer mailing list has been compiled from contacts the owners have
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Sourcing
The Dallas Market Center is the largest wholesale merchandise mart and was the
first to have a permanent facility to unite regional wholesalers under one roof.
2350 Stemmons is a 400,000 square foot, six story building that houses all major
manufacturers of boots, hats and other western apparel.
The Dallas Market Center offers to all registered buyers, special events, fashion
shows, product displays and demonstrations, educational programs, seminars, new
buyer's kits and registrations, special buying programs and first Monday and
Tuesday Design Events.
With the Dallas Market Center being only a four hour drive and 250 miles away
from Houston, TX, this makes it a prime sourcing for Mahogany Western Wear in
servicing its retail needs.
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We will also work to solidify our relationships with sales representatives and
vendors so that we may achieve decreased cost of goods. Our competitors, (both
direct and indirect) purchase from the same sources and we believe that through
marketing programs and strategic alliances we will begin to gain a competitive
advantage.
Technology
Our business plan will be generated and reviewed on a bi-annual basis using the
most updated version of Business Plan Pro from Palo Alto Software and reviewed
quarterly to ensure all financial goals and objectives are being reached. Palo Alto's
companion software, Marketing Plan Pro, will allow us to make the most of our
limited marketing budget by focusing our communications on our target markets
and enhancing our marketing knowledge.
Future Products
As we achieve and exceed our sales and profitability goals, Mahogany Western
Wear will add western boots to the product line and our own personal in-house
label of clothing that will include Mahogany t-shirts for women and shirts for men.
We will expand our line of brands with those that have been repeatedly requested
by our customers. An e-commerce website will also be created to increase our
distribution channels and expand our customer base to a national level.
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Mahogany Western Wear
The primary target customer of Mahogany Western Wear will be the African-
American cowboys located in the southern part of Houston, TX. As we are
situated in the epi-center of their residential community we believe they will make
up the largest percentage of our customer base.
The secondary target customers are the Hispanic community in the area. As the
Hispanic population continues to grow rapidly in the south central area we expect
to receive the patronage of Hispanics as they are very loyal to western apparel.
The last target customer of Mahogany is listed as other. As popularity about the
store increases we expect to see an assortment of curiosity seekers, and local
residents from the community as well as seasonal purchasers during rodeo season.
Market Segmentation
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
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Both of these markets are underserved in the major western retailer outlets.
Market Needs
There are several important needs in the western wear apparel business that are
being either underserved or not met at all. Mahogany Western Wear plans to meet
and service those needs.
Market Trends
Millions of people around the world instantly recognize and identify with western
apparel. It is synonymous with America and is a true classic.
Western wear has survived many eras. Modern cowboys herd cattle in helicopters
but they still wear the same jeans, boots and hats their grandfathers wore. There
will always be a future for western apparel. Within the last two years the
southwestern and western look has made a comeback in the fashion industry.
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Mahogany Western Wear intends to use its place in the community to heighten the
awareness of the African-American cowboy culture in Houston, TX.
Market Growth
Houston has also been designated as the best city in the U.S. to start a new
business. For three consecutive years, Houston has ranked first in the nation in new
business growth, according to American Business Information. The most recent
survey shows that more than 31,000 new local businesses were started in Houston.
Los Angeles, California was a distant second with 16,780.
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Industry Analysis
The majority of western wear apparel is sold through small family-run specialty
stores that are located in or near neighborhood communities. 85% of the
purchasing statistics for western apparel is derived from these locations.
These large stores mass market and sell to hardcore enthusiasts as well as the local
tourists and those who purchase only during rodeo season.
Main Competitors
Mahogany Western Wear has three competitors within a 15 miles radius of its
location.
Cavender's Boot City, which is located approximately 7.1 miles from our
location is our closest competitor. Cavender's is one of the largest western wear
apparel stores in the state of Texas. They operate 42 stores and sell basic western
wear apparel and boots to the general mass market. Because of Cavender's size
they have a large percentage of the market share but still only cater to what the
apparel industry considers to be the average size. Locating plus size clothing for
women and big and tall sizes for men can be extremely difficult. They also tend to
be a bit behind the market in offering more contemporary western styles. Because
of Cavender's size they have also lost some of their customer service skills as
employee turnover is high.
Barbecue Hall of Fame, located approximately 9.3 miles from our store. The
Barbecue Hall of Fame retail outlet combines the atmosphere of Goode & Co.
BBQ restaurant with shopping and a prime tourist attraction. They offer an eclectic
mix of old west meets new west with apparel, grills, cookware, and gift items.
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BBQ Hall of Fame doesn't do any advertising or promotions of their retail outlet so
if you don't visit The Goode & Co. restaurant you wouldn't know about the retail
establishment.
Turner Saddlery is approximately 12.1 miles from Mahogany Western Wear and
is the farthest of the three competitors. Turner Saddlery is a family-owned western
apparel with two stores in the Houston area and one store in Conroe, TX. Their
customer base tends to be more upscale as they carry more of the high end western
labels such as Saddle Ridge and Lucchese. They also carry housewares and
bedding items of which Cavender's and BBQ Hall of Fame does not carry. They
have few plus sizes for women and big and tall for men. Also, Turner Saddlery
does very little advertising and promotion.
Mahogany Western Wear's goal is to provide apparel to the under served market of
the African-American cowboy community. The major western apparel retailers
have left a hole in this market by not providing a larger assortment of sizes.
Our intention is to gain 80% of this market share by focusing on our niche
positioning, neighborhood location, brand that we sell, southern hospitality and
special promotions.
Competitive Edge
The Mahogany Shopper Card which allows the customer a 15% discount
after ten purchases.
Our location in the community will offer closer access to our target customer
base.
We will offer plus sizes for women and big and tall sizes for men.
Marketing Strategy
Our marketing strategy will focus heavily on sales promotion, niche positioning in
the market and customer service with loyalty and retention in sales.
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The marketing budget will not exceed 5% of our gross annual sales.
Our promotions will always stay in tune with our company objectives and
mission statement.
Pricing Strategy
Mahogany Western Wear will maintain a flexible pricing strategy. We base the
product lines that we carry on their reputation and quality as western wear apparel.
Most of our lines come with a suggested retail price that we will follow. We will
also utilize the standard practice of keystoning as well.
Promotion Strategy
Mahogany Western Wear will follow an aggressive yet creative promotional plan.
This will allow us to focus directly on our target customer while still being
conservative with our advertising dollars.
A press release kit will be sent to all major media outlets in Houston, TX
highlighting the grand opening of the first African-American owned western
wear apparel retailer in the city. This kit will include a press release, pictures
of the interior space, color postcard/flyer, and a business card.
5,000 4x5 color flyers/postcards will be distributed throughout the city at
local zydeco and cowboy dance halls and clubs, trailrides and rodeos.
Spot radio advertisements on two local FM radio stations, KMJQ Majic 102
and KTSU 90.9.
A direct mail program that will further focus on and target the top 50%
customer base with special in-house sales and promotions.
Distribution Strategy
Our retail location will be the foundation of building our customer base. We will
also manage a direct mail program that will focus on our top
50% customers spotlighting any in-house sales and promotions.
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Marketing Programs
Our marketing programs will consist of the distribution of 5,000 color flyers two
weeks prior to our grand opening event.
Positioning Statement
For the more full-bodied individual seeking western apparel, Mahogany Western
Wear will offer name brand western wear in a larger assortment of styles and sizes
that aren't always readily available in the mass western apparel retailers.
Sales Strategy
We will utilize the Retail ICE POS software with every sales transaction.
With each purchase the software will record and maintain in its database the
customer's name, address and purchases. This information will be used with
our direct mailing program to focus on our top 50% of customers.
We will offer a 14 day return/exchange policy to build trust with our
customers and maintain retention and loyalty.
Sales Forecast
The following table and chart give a highlight on forecasted sales. We expect sales
to start off conservatively and increase extensively during the Christmas holiday
shopping season and during the months of The Houston Livestock Show and
Rodeo.
Mahogany Western Wear has planned for a rate of growth at 15% for the first year
as we build name recognition and status in the community. In the second and third
year we look to see an increase of revenue of 20% as we gain a larger percentage
of the market share and increase our customer base beyond the southwest part of
the city.
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Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Clothing 5,175 6,728 8,746
Belts & Hats 285 371 482
Jewelry & Gifts 560 728 946
Total Unit Sales 6,020 7,826 10,173
Sales
Clothing $258,750 $336,375 $437,288
Belts & Hats $14,250 $18,525 $24,083
Jewelry & Gifts $11,200 $14,560 $18,920
Total Sales $284,200 $369,460 $480,290
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Milestones
The accompanying milestone chart highlights our plan with specific dates. This
schedule reflects our strong commitment to organization and detail.
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Chart: Milestones
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Management Summary
Chandra Miller will assess the productivity and perform informal employees
evaluations of all employees every six months. These bi-annual evaluations are
conducive to the continued growth of our small business.
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Organizational Structure
Management Team
Chandra E. Miller, co-owner and general manager will be responsible for all
administrative functions, purchasing, inventory control, and promotions. She will
also act as a part-time sales representative. She has spent over 10 years in
accounting, finance and operations management. She was also the owner of
Tattletale's, an e-commerce toy store for three years. She has extensive background
in purchasing, inventory control, and marketing.
Personnel Plan
The personnel plan is included in the following table below. There will be one full-
time employee and two part-time employees working 20-30 hours per week. The
full-time employee will be paid at a rate of $10.00 per hour and the two part-time
employees will be paid at a rate of $8.00 per hour. All employee's will benefit from
a one day paid holiday on their respective birthdays and one week of paid vacation
after twelve months of employment.
At this time medical benefits will not be offered to employees. As profits increase
in the future medical benefits will be offered to all employees.
Table: Personnel
Personnel Plan
Year 1 Year 2 Year 3
Owner $11,475 $12,623 $13,885
Full-time postion $20,400 $22,440 $24,684
Part-time position $12,240 $13,464 $14,810
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Total People 3 3 3
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Financial Plan
The growth of Mahogany Western Wear will be moderate and the cash balance will
always be positive. Being a retail environment we will not be selling on credit. We
will accept cash, checks, and all major credit cards. TeleCheck Services will be
used as the check guaranty system to help reduce the percentage of loss on bad
checks. Marketing and advertising will remain at or below 5% of sales. We will
continue to reinvest residual profits into company expansion, and personnel.
Important Assumptions
Mahogany Western Wear does not sell on credit nor do we offer layaways at this
time. We accept cash and checks, Visa, MasterCard, Discover and American
Express. All sales paid via credit cards will be deposited in our business checking
account within 48 hours. Our business checking account will be with Washington
Mutual. They have reported the interest rate as those listed below.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
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The following chart shows the benchmark figures for Mahogany Western Wear.
Chart: Benchmarks
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Break-even Analysis
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Break-even Analysis
Assumptions:
Average Per-Unit Revenue $47.21
Average Per-Unit Variable Cost $23.60
Estimated Monthly Fixed Cost $5,856
Chart: Break-even Analysis
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The following chart and table will indicate projected profit and loss.
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Expenses
Payroll $44,115 $48,527 $53,379
Sales and Marketing and Other $15,448 $15,523 $15,834
Expenses
Depreciation $0 $0 $0
Telephone / Pagers/ Cell $1,800 $1,800 $1,836
Utilities $4,500 $4,800 $4,896
Payroll Taxes $4,412 $4,853 $5,338
Other $0 $0 $0
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Current Assets
Cash $62,715 $131,514 $237,890
Inventory $13,365 $22,014 $28,617
Other Current Assets $0 $0 $0
Total Current Assets $76,080 $153,527 $266,507
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $76,080 $153,527 $266,507
Current Liabilities
Accounts Payable $15,762 $20,872 $26,540
Current Borrowing $0 $0 $0
Other Current Liabilities $2,000 $2,000 $2,000
Subtotal Current Liabilities $17,762 $22,872 $28,540
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Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios
based on the Standard Industrial Classification (SIC) code 5699, Miscellaneous
Apparel and Accessory stores.
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry
Profile
Sales Growth n.a. 30.00% 30.00% 0.20%
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Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 38.30%
Selling, General & 32.72% 29.62% 27.09% 22.10%
Administrative Expenses
Advertising Expenses 0.00% 0.02% 0.02% 2.10%
Profit Before Interest and 25.27% 29.56% 33.08% 0.70%
Taxes
Main Ratios
Current 4.28 6.71 9.34 2.22
Quick 3.53 5.75 8.34 0.62
Total Debt to Total Assets 40.96% 21.48% 13.26% 55.90%
Pre-tax Return on Net Worth 156.58% 89.63% 68.36% 1.70%
Pre-tax Return on Assets 92.45% 70.38% 59.29% 3.80%
Activity Ratios
Inventory Turnover 10.91 10.44 9.49 n.a
Accounts Payable Turnover 12.07 12.17 12.17 n.a
Payment Days 27 26 27 n.a
Total Asset Turnover 3.74 2.41 1.80 n.a
Debt Ratios
Debt to Net Worth 0.69 0.27 0.15 n.a
Current Liab. to Liab. 0.57 0.69 0.81 n.a
Liquidity Ratios
Net Working Capital $58,318 $130,655 $237,967 n.a
Interest Coverage 48.16 92.96 188.00 n.a
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Additional Ratios
Assets to Sales 0.27 0.42 0.55 n.a
Current Debt/Total Assets 23% 15% 11% n.a
Acid Test 3.53 5.75 8.34 n.a
Sales/Net Worth 6.33 3.06 2.08 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Appendix
Sales
Forecast
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Unit Sales
Clothing 0% 325 350 350 400 400 475 500 475 500 500 450 450
Belts & 0% 15 15 15 20 20 30 30 35 35 30 20 20
Hats
Jewelry & 0% 40 40 40 40 40 65 65 50 50 50 40 40
Gifts
Total Unit 380 405 405 460 460 570 595 560 585 580 510 510
Sales
Unit Month Month Month Month Month Month Month Month Month Month Month Month
Prices 1 2 3 4 5 6 7 8 9 10 11 12
Clothing $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00
Belts & $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00
Hats
Jewelry & $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00
Gifts
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Sales
Clothing $16,250 $17,500 $17,500 $20,000 $20,000 $23,750 $25,000 $23,750 $25,000 $25,000 $22,500 $22,500
Belts & $750 $750 $750 $1,000 $1,000 $1,500 $1,500 $1,750 $1,750 $1,500 $1,000 $1,000
Hats
Jewelry & $800 $800 $800 $800 $800 $1,300 $1,300 $1,000 $1,000 $1,000 $800 $800
Gifts
Total $17,800 $19,050 $19,050 $21,800 $21,800 $26,550 $27,800 $26,500 $27,750 $27,500 $24,300 $24,300
Sales
Direct Month Month Month Month Month Month Month Month Month Month Month Month
Unit Costs 1 2 3 4 5 6 7 8 9 10 11 12
Clothing 0% $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Belts & 0% $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
Hats
Jewelry & 0% $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Gifts
Direct
Cost of
Sales
Clothing $8,125 $8,750 $8,750 $10,000 $10,000 $11,875 $12,500 $11,875 $12,500 $12,500 $11,250 $11,250
Belts & $375 $375 $375 $500 $500 $750 $750 $875 $875 $750 $500 $500
Hats
Jewelry & $400 $400 $400 $400 $400 $650 $650 $500 $500 $500 $400 $400
Gifts
Subtotal $8,900 $9,525 $9,525 $10,900 $10,900 $13,275 $13,900 $13,250 $13,875 $13,750 $12,150 $12,150
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Direct
Cost of
Sales
Personnel Plan
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Owner 0% $900 $900 $900 $1,125 $900 $900 $1,125 $900 $900 $1,125 $900 $900
Full-time 0% $1,600 $1,600 $1,600 $2,000 $1,600 $1,600 $2,000 $1,600 $1,600 $2,000 $1,600 $1,600
postion
Part-time 0% $960 $960 $960 $1,200 $960 $960 $1,200 $960 $960 $1,200 $960 $960
position
Total People 3 3 3 3 3 3 3 3 3 3 3 3
Total Payroll $3,460 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460
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General
Assumptions
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate
Long-term 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
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Pro Forma
Profit and
Loss
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Sales $17,800 $19,050 $19,050 $21,800 $21,800 $26,550 $27,800 $26,500 $27,750 $27,500 $24,300 $24,300
Direct Cost $8,900 $9,525 $9,525 $10,900 $10,900 $13,275 $13,900 $13,250 $13,875 $13,750 $12,150 $12,150
of Sales
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Production
Expenses
Total Cost $8,900 $9,525 $9,525 $10,900 $10,900 $13,275 $13,900 $13,250 $13,875 $13,750 $12,150 $12,150
of Sales
Gross $8,900 $9,525 $9,525 $10,900 $10,900 $13,275 $13,900 $13,250 $13,875 $13,750 $12,150 $12,150
Margin
Gross 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Margin %
Expenses
Payroll $3,460 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460
Sales and $1,229 $1,229 $1,579 $1,229 $1,229 $1,229 $1,229 $1,579 $1,229 $1,229 $1,229 $1,229
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Marketing
and Other
Expenses
Depreciatio $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
n
Telephone / $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Pagers/ Cell
Utilities $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375
Payroll 10% $346 $346 $346 $433 $346 $346 $433 $346 $346 $433 $346 $346
Taxes
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $5,560 $5,560 $5,910 $6,512 $5,560 $5,560 $6,512 $5,910 $5,560 $6,512 $5,560 $5,560
Operating
Expenses
Profit $3,340 $3,965 $3,615 $4,389 $5,340 $7,715 $7,389 $7,340 $8,315 $7,239 $6,590 $6,590
Before
Interest and
Taxes
EBITDA $3,340 $3,965 $3,615 $4,389 $5,340 $7,715 $7,389 $7,340 $8,315 $7,239 $6,590 $6,590
Interest $137 $135 $132 $130 $128 $125 $123 $121 $119 $116 $114 $112
Expense
Taxes $961 $1,149 $1,045 $1,278 $1,564 $2,277 $2,180 $2,166 $2,459 $2,137 $1,943 $1,943
Incurred
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Net Profit $2,242 $2,681 $2,438 $2,981 $3,649 $5,313 $5,086 $5,053 $5,738 $4,986 $4,533 $4,535
Net 12.60% 14.08% 12.80% 13.67% 16.74% 20.01% 18.29% 19.07% 20.68% 18.13% 18.66% 18.66%
Profit/Sales
Pro Forma
Month Month Month Month Month Month Month Month Month Month Month Month
Cash
Cash from
Cash Sales $17,800 $19,050 $19,050 $21,800 $21,800 $26,550 $27,800 $26,500 $27,750 $27,500 $24,300 $24,300
Subtotal $17,800 $19,050 $19,050 $21,800 $21,800 $26,550 $27,800 $26,500 $27,750 $27,500 $24,300 $24,300
Additional
Sales Tax, 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $17,800 $19,050 $19,050 $21,800 $21,800 $26,550 $27,800 $26,500 $27,750 $27,500 $24,300 $24,300
Expenditures Month Month Month Month Month Month Month Month Month Month Month Month
Expenditures
Cash $3,460 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460 $4,325 $3,460 $3,460
Bill $263 $8,078 $13,581 $13,247 $15,963 $14,881 $20,346 $19,017 $17,337 $19,200 $17,935 $14,605
Subtotal $3,723 $11,538 $17,041 $17,572 $19,423 $18,341 $24,671 $22,477 $20,797 $23,525 $21,395 $18,065
Additional
Sales Tax, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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Subtotal $3,998 $11,813 $17,316 $17,847 $19,698 $18,616 $24,946 $22,752 $21,072 $23,800 $21,670 $18,340
Net Cash $13,802 $7,237 $1,734 $3,953 $2,102 $7,934 $2,854 $3,748 $6,678 $3,700 $2,630 $5,960
Cash $14,186 $21,423 $23,157 $27,109 $29,212 $37,145 $39,999 $43,748 $50,425 $54,125 $56,755 $62,715
Pro Forma
Balance
Sheet
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Assets Starting
Balances
Current
Assets
Cash $384 $14,186 $21,423 $23,157 $27,109 $29,212 $37,145 $39,999 $43,748 $50,425 $54,125 $56,755 $62,715
Inventory $14,000 $9,790 $10,478 $10,478 $11,990 $11,990 $14,603 $15,290 $14,575 $15,263 $15,125 $13,365 $13,365
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets
Total $14,384 $23,976 $31,900 $33,634 $39,099 $41,202 $51,748 $55,289 $58,323 $65,688 $69,250 $70,120 $76,080
Current
Assets
Long-term
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Assets
Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
Accumulated $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation
Total Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets
Total Assets $14,384 $23,976 $31,900 $33,634 $39,099 $41,202 $51,748 $55,289 $58,323 $65,688 $69,250 $70,120 $76,080
Liabilities Month Month Month Month Month Month Month Month Month Month Month Month
and Capital 1 2 3 4 5 6 7 8 9 10 11 12
Current
Liabilities
Accounts $0 $7,625 $13,143 $12,714 $15,473 $14,202 $19,710 $18,441 $16,696 $18,599 $17,450 $14,062 $15,762
Payable
Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Current
Liabilities
Subtotal $2,000 $9,625 $15,143 $14,714 $17,473 $16,202 $21,710 $20,441 $18,696 $20,599 $19,450 $16,062 $17,762
Current
Liabilities
Long-term $16,700 $16,425 $16,150 $15,875 $15,600 $15,325 $15,050 $14,775 $14,500 $14,225 $13,950 $13,675 $13,400
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Liabilities
Total $18,700 $26,050 $31,293 $30,589 $33,073 $31,527 $36,760 $35,216 $33,196 $34,824 $33,400 $29,737 $31,162
Liabilities
Paid-in $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100 $5,100
Capital
Retained ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416) ($9,416)
Earnings
Earnings $0 $2,242 $4,923 $7,361 $10,342 $13,991 $19,304 $24,389 $29,443 $35,180 $40,166 $44,699 $49,234
Total Capital ($4,316) ($2,074) $607 $3,045 $6,026 $9,675 $14,988 $20,073 $25,127 $30,864 $35,850 $40,383 $44,918
Total $14,384 $23,976 $31,900 $33,634 $39,099 $41,202 $51,748 $55,289 $58,323 $65,688 $69,250 $70,120 $76,080
Liabilities
and Capital
Net Worth ($4,316) ($2,074) $607 $3,045 $6,026 $9,675 $14,988 $20,073 $25,127 $30,864 $35,850 $40,383 $44,918
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