1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $115,000 (from a private investor) in order to launch the operations of a boutique that will maintain a brick-and-mortar location as well as expansive ecommerce operations. New York Boutique, LLC (“the Company”) intends to launch its operations in 2023 via its sourced location in New York City, New York. The business will carry a broad range of apparel and related products from a number of different manufacturers and among all pricing points. The business was founded by Jane Doe.
The Operations
As stated above, New York Boutique has sourced a highly trafficked location in New York City that will act as both its retail sales center and headquarters. The business will carry a broad selection of apparel merchandise specifically for women. The Company anticipates that it will generate gross margins of 40% to 60% depending on the type of product offered.
In addition to the Company’s brick-and-mortar location, the business will use online channels to further increase sales. The business will use Amazon (including the Amazon FBA program), Etsy, eBay, Target, and related platforms over the next three years.
The third section of the business plan will discuss the operations of New York Boutique.
The Financing
At this time, the Company is seeking $115,000. The terms of this loan will be determined during negotiation. Principally, the funds will be used for:
- Location development in New York City
- Inventory acquisitions
- Working capital
- Initial marketing operations
As time progresses, the Company can easily acquire additional capital as necessary in order to expand operations. This document assumes that the ongoing growth of the business will be financed with the retained earnings of the Company.
Expansion Plan
The Company will continue to expand its marketing campaigns specific for the New York City market as well as through multiple online channels. After the third year of operations, Management may seek to establish additional locations within other economically viable markets in the United States. The business will continually expand its inventories among major apparel manufacturers and distributors.
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
New York Boutique, LLC is seeking a loan of $115,000 to launch operations. The funds will be used as follows:
2.2 Management Equity
Jane Doe retains a 100% ownership interest in the business.
2.3 Exit Strategies
Once the business begins to generate substantial profits, the Company could easily divest the business for a significant profit. This event is not expected to occur for at least five to seven years. A qualified business broker would be hired to sell the business to a third party. Generally, clothing stores and boutiques that have both brick-and-mortar and online operations have a P/E multiple of three times the previous year’s earnings.
3.0 Operations
As stated in the executive summary, New York Boutique will maintain a moderate-scale brick-and-mortar retail location that offers a broad range of modernly styled women’s apparel and accessories. The business has sourced a well-trafficked retail location in New York City that will concurrently serve as the business’ headquarters for online based operations. The types of apparel offered by the business will include:
- Coats and outwear
- Fashion accessories
- Jewelry
- Leggings
- Pants
- Shirts and tops
- Undergarments and lingerie
As will be discussed in the fifth section of this document, the Company will maintain an expansive online presence that features ecommerce functionality. This will allow for a much more rapid rate of inventory turnover. The business will also use third party marketplaces in order to further sales.
4.0 Market and Industry Analysis
4.1 Economic Analysis
This section of the analysis will focus on the general economic climate, the brick-and-mortar and online clothing store/boutique industry, the customer profile, and the ongoing competition that the business will face moving forward.
As of 2023, the economic climate within the United States is moderate. Unemployment rates have remained near historical lows although interest rates are increasing a result of inflation. The US Federal Reserve has enacted numerous measures that will continue to keep inflation in check while concurrently maintaining employment.
The ongoing issues with inflation will be only a modest issue for the business. The Company will use an automated mark up over cost method when acquiring its inventories and engage in distribution operations. Additionally, the business’ target market of New York City is a population dense market that is less swayed by negative changes in the economy.
4.2 Industry Analysis
Annually, nearly $370 billion of apparel is sold within the United States. There are 60,000 companies that operate one or more retail locations that sell apparel (including women’s, men’s, and children’s apparel). The growth rate of this industry is expected to mirror that of the economy as a whole over the next three years.
One of the major trends within this industry is to operate both brick-and-mortar and ecommerce operations concurrently. The Company will capitalize on this trend by not only maintaining a proprietary website but also by operating sellers accounts among numerous third-party platforms.
4.3 Customer Profile
The following demographic profile will be used in conjunction with marketing efforts:
- Lives within five miles of the Company’s retail location in New York City
- Will spend $100 to $300 per purchase (online or via the retail store)
- Annual household income ranging from $75,000 to $150,000
For online sales, a similar demographic profile will be used when marketing the business’ inventories. Nearly 125 million people fall into the above demographic profile within the United States.
4.4 Competition
New York Boutique will face significant competition among brick-and-mortar retail sellers within New York City as well as ecommerce operators. The business will maintain a strong differentiating factor by developing a highly curated inventory of apparel from well recognized brands. Additionally, the boutique will carry inventories across the entire pricing spectrum so that the business can cater to needs of any person. The business will also implement a high impact marketing campaign (traditional and online) that will create a strong brand position for the Company.
5.0 Marketing Plan
5.1 Marketing Objectives
- Maintain a regional marketing campaign that focuses on the New York City market.
- Develop relationships with brand ambassadors that will come to the retail store and film their experience.
- Use social media in regards to driving ecommerce sales.
- Maintain a dedicated SEO campaign for the business’ online operations.
5.2 Revenue Forecasts
5.3 Marketing Strategies
Foremost, New York Boutique has sourced a highly visible retail location in New York City. This location receives tens of thousands of passers-by on a daily basis. The location will feature ample outdoor signage that showcases the numerous apparel and accessory products available at the store. In order to drive additional traffic to the location, the business will work with a regional advertising firm that will place half-page advertisements among lifestyle publications that are distributed within a five mile radius of the Company’s retail location.
New York Boutique will also maintain an expansive online presence via its proprietary website. This platform will be both mobile and search engine friendly. Management will hire a regional SEO firm that will ensure that when specialized searches for apparel stores in the New York City market are completed – the business’ website will appear within the search. The business will also maintain listings on business review sites and directories that list apparel stores on a regional basis. This will further contribute to the Company’s SEO campaigns.
Management will also have the location maintain pages among all major social media platforms including Facebook, Instagram, Twitter, and YouTube. The business will have a number of professionally created videos that will showcase the location. These videos will be uploaded to YouTube and distributed among all social media platforms. Moving forward, the Company intends to hire brand ambassadors that will come to the location and film their shopping experience (as well as using the Company’s ecommerce website. In regards to ecommerce, Management will use Shopify as its service provider as numerous marketing tools are embedded in their suite.
Beyond sales through the Company’s retail store and proprietary online platform, the business will maintain numerous sellers accounts among major marketplaces including Amazon, eBay, Target, and Etsy. This will further drive inventory turnover over the first three years of operation.
6.0 Organizational Plan
6.1 Corporate Organization
6.2 Organizational Budget
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- New York Boutique, LLC will acquire $115,000 from a private investor in order to launch its brick-and-mortar and online boutique operations.
- The business will settle most accounts payable on a monthly basis.
7.2 Financial Highlights
- New York Boutique will grow at a compounded annual growth rate of 35%
- The business will be able to generate sales via its brick-and-mortar operations as well as through online sales channels (as discussed in the fifth section of the business plan).
7.3 Sensitivity Analysis
The Company’s revenues are moderately sensitive to negative changes in the economy. The demand for new clothing, apparel, accessories, and related goods tends to wane slightly during difficult economic climates. However, New York Boutique will maintain a moderately low cost operating infrastructure. The Company’s online sales operations will further reduce the ongoing economic risks of the business as orders can be received from any person in the world.
7.4 Source of Funds
7.5 Financial Proformas
A) Profit and Loss Statement
B) Cash Flow Analysis
7.6 Breakeven Analysis
7.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
- The Company has sourced a highly visible retail location in New York City in order to launch operations.
- Highly experienced Founder/CEO, Jane Doe, who will be able to establish both brick-and-mortar as well as online operations.
- The business will offer a broad range of in-demand apparel for its targeted demographics.
- Moderate operating costs will allow the business to expand its local and online based marketing campaigns on a monthly basis.
Weaknesses
- Revenues are subject to negative economic changes.
- Moderately high expenses as it relates to rent and marketing.
Opportunities
- Continued development of additional locations with the retained earnings of the business.
- Expansion of the types of apparel inventories carried by New York Boutique.
- Acquire additional capital in order to expand operations (either debt or equity).
Threats
- Ongoing competition among other apparel stores and online boutiques.
- Operating costs can increase as a result of inflation.