1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $30,000 for the development of an ecommerce driven business that will use Amazon’s FBA program to generate sales. Ava’s Boutique, LLC (“the Company”) was founded in 2023 by Jane Doe. The business will specialize in the sale of apparel and home décor products as its primary focus.
The Operations
As stated above, the Company will be actively involved with providing a broad range of apparel, fashion products, home décor goods, housewares, and related items through the Amazon FBA program. The Company will generate substantial gross margins from these operations.
In order to further drive sales, the Company will maintain a proprietary platform. This website will showcase all inventories that are carried by the business while providing links to where customer can make their purchases. The Company will use multiple forms of marketing and advertisement in order to drive sales.
The third section of the business plan will discuss the operations of Ava’s Boutique.
The Financing
Management is seeking $30,000 in order to launch operations. The terms of this investment are to be determined during negotiation. The funds will be used for the following:
- Inventory acquisitions
- Working capital
- Website development and social media marketing operations
In the future, the Company could acquire additional rounds of capital based on the highly predictable streams of revenue produced from Amazon FBA sales.
Expansion Plan
Over the next three years, the Company will continue to expand the types of inventories that are carried by the business. The Company will continue to focus on apparel, fashion accessories, home décor products, housewares, and related goods. The Company will use a number of business analytics that will ensure that the business sources in-demand goods at all times.
Revenue Forecasts
Below is an overview of the anticipated revenues and profits of the business over the next three years:
2.0 The Financing
2.1 Funds Required
Ava’s Boutique, LLC will require an investment of $30,000 to develop its operations. The funds will be used as follows:
2.2 Investor Equity
This will be discussed during negotiation.
2.3 Exit Strategies
Given the immense demand for profitable ecommerce companies, the Company could be easily sold to a third party for a substantial price to earnings multiple. Generally, Amazon FBA engaged entities receive a sales premium of two to three times the previous year’s income. Management has no intention of divesting the business for a substantial period of time.
3.0 Amazon FBA Selling Operations
As stated in the executive summary, Ava’s Boutique will be actively involved with providing a broad range of in-demand products through the Amazon FBA program. The business will offer the following types of inventories:
- Apparel
- Fashion accessories
- Handbags
- Modernly styled home décor and housewares
- Shoes and footwear
The Company will ship these products to Amazon fulfillment centers. The Company will earn gross profits of 20% to 40% depending on the final price and category of the item.
In order to ensure a rapid rate of inventory turnover, the business will maintain a proprietary website that will further drive traffic to the Company’s listings on Amazon. This website will be mobile friendly and search engine optimized. As an Amazon seller, the business will comply with all program guidelines.
Moving forward, the Company will continue to expand the number of products that are offered by the business.
4.0 Market and Industry Analysis
4.1 Economic Analysis
This section of the analysis will focus on the general economic climate, the ecommerce industry, and the ongoing competitive issues that the business will face moving forward.
Currently, the economic climate in the United States is stable. The issues that arose as a result of the pandemic have been resolved. Interest rates, while rising, have stabilized over the past six months as the Federal Reserve is taking controlled and measured action in order to reduce the inflation rate.
The Company, in order to ensure revenue generation in all economic climates, will offer a broad range of affordable to high-end products. The issues with inflation are stabilizing. The business will use a standard markup over inventory costs in order to remedy this matter.
4.2 Industry Analysis
Ecommerce sales are expected to exceed $1 trillion within the United States by the end of this year. As nearly every adult in the country has access to high speed internet (at home, in their office, and through their mobile devices) – the ability to make sales to large cross sections of the American populace has increased accordingly. This advent of the Amazon FBA program has been a major driving force behind the rapid growth of ecommerce in the United States.
One of the common trends within this industry is to maintain standalone websites that showcase the inventories offered. The business will develop a proprietary website that directs traffic to the Company’s listings on Amazon.
4.3 Customer Profile
Given the broad range of products that will be offered by the Company, it is difficult to determine the exact demographics that will purchase goods through the business’ listings on Amazon. The Company will generally seek to provide its home décor, apparel, accessories, and household goods to people that have an income of $50,000 to $150,000. Any person that uses Amazon to make purchases is a potential buyer for the Company’s products.
4.4 Competition
The Company will face significant competition among other FBA program users as well as companies that maintain their own websites that sell similar goods. One of the primary ways that the Company will maintain a competitive advantage is that the business will heavily curate the items that are sold through this program. Given the Founder’s experience in this field, she will be able to properly source in-demand goods that will ensure a rapid inventory turnover. Additionally, the business will allocate a substantial portion of its gross income towards marketing operations (which will be further discussed in the next section of the business plan). By combining the reach of Amazon as well as the Company’s proprietary marketing campaigns – the business will be able to effectively compete in this market.
5.0 Marketing Plan
5.1 Marketing Objectives
- Develop a proprietary website that will drive traffic to the Company’s Amazon listings.
- Maintain a extensive commitment to customer service.
- Develop numerous videos that will be uploaded to YouTube and shared among all major social media platforms.
5.2 Revenue Forecasts
5.3 Marketing Strategies
In order to promote sales of products that have been enrolled in the Amazon FBA program, the Company will use multiple forms of advertising in order to drive sales. Foremost, the business will maintain an expansive website that showcases the listings that are available through this program. This platform will link to Amazon for each listing offered by the business. The Company, for its proprietary website, will use search engine optimization in order to drive traffic to the platform and thus onto the Amazon listings. The Company will contract with a well regarded SEO firm in order to ensure that substantial traffic is developed on a monthly basis.
The Company will also use pay-per-click marketing strategies. The business, via its internal marketing team, will manage these operations directly. The Company will allocate 20% of its aggregate marketing budget for this purpose. Additionally, the business will use PPC strategies through sponsored listings on the Amazon platform. For these operations, the business will allocate 30% of its aggregate marketing budget for these operations.
As mentioned above, the Company will also develop videos for each product offered via the Amazon FBA program. The business will work with a professional videography firm that will showcase these products in videos that will last 60 seconds to three minutes. These videos will be uploaded to YouTube and mirrored among all major social media platforms. The videos will contain direct links to each product listing.
In regards to social media, the Company will maintain an expansive presence on Facebook, Twitter, and Instagram. The Company will use targeted advertisement on these platforms in order to drive traffic to the business’ website and directly to Amazon where the Company’s products are listed. Moving forward, the business will employ influencers that will create videos that further drive traffic through the Company’s marketing apparatus.
Given that all fulfillment matters will be handled by Amazon, the Company will be able to focus heavily on its marketing operations while concurrently sourcing new products that are in demand among the business’ targeted demographics.
6.0 Organizational Plan
6.1 Corporate Organization
6.2 Organizational Budget
6.2 Organizational Budget (cont.)
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- Ava’s Boutique, LLC will acquire $30,000 from an investor.
- Management will settle all short term payables monthly.
7.2 Financial Highlights
- All fulfillment will be conducted by Amazon, which will reduce the ongoing operational costs of the business.
- The business’ assets will be primarily invested in divestible inventories.
7.3 Sensitivity Analysis
The Company’s revenues may fluctuate depending on the overall economic climate. The business intends on carrying a number of in-demand apparel, home décor, and lifestyle products that typically are purchased even in times of recession. The business will maintain an extremely low operating and overhead cost infrastructure that will allow the business to focus on marketing and promotion of the inventories that are fulfilled via the Amazon FBA program.
7.4 Source of Funds
7.5 Financial Proformas
A) Profit and Loss Statement
B) Cash Flow Analysis
C) Balance Sheet
7.6 Breakeven Analysis
7.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
- Very low operating costs.
- The business will be able to enjoy rapid inventory turnover via the FBA program.
- The business will be able to source numerous types of apparel, home décor items, and other in-demand boutique items for sale on the platform.
- Low costs as it relates to the ongoing marketing required by the Company.
Weaknesses
- Ongoing competition among sellers that use the Amazon FBA program.
- Changes in inventory pricing can impact the Company’s gross margins.
Opportunities
- Continued expansion of the types of inventories carried by the business, which are distributed through the FBA program.
- Acquire additional capital in order to expand operations.
- Develop a proprietary website in order to make direct sales to customers (or develop an affiliate focused website that links to the Company’s inventories).
- Acquisition of companies that operate in a similar capacity.
Threats
- Changes in business practices could cause the Company to revise its business model.
- Fashion tastes and trends can change, causing the business to have slowed inventory sales.