Free Online Clothing Store Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
purposes only. If you are interested in purchasing the completed editable MS Word
and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
It should be noted that there is no special software required to use these
templates. All business plans come in Microsoft Word and Microsoft Excel format.
Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
- All plans are updated for 2013!
1.0 Executive Summary
The purpose of this business plan is to raise $125,000 for the development of an online clothing platform while showcasing the expected financials and operations over the next three years. Online Clothing Store, Inc. (“the Company”) is a New York based corporation that will provide sales of women’s and men’ clothing to customers on a nationwide basis. The Company was founded by John Doe.
1.1 Products and Services
Through its online sales platform, Online Clothing Store, Inc. will sell a broad variety of men and women’s clothing from a number of respected and well known brand name manufacturers. At this time, Mr. Doe is sourcing a number of wholesalers and apparel distributors that will provide the Company with its initial inventories of apparel products. The business intends to use a broad based internet marketing campaign that includes search engine optimization, pay per click marketing, and affiliate marketing programs that will drive traffic (and sales) to the Online Clothing Store’s website. The third section of the business plan will further describe the services offered by the Online Clothing Store.
1.2 The Financing
Mr. Doe is seeking to raise $125,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate.
1.3 Mission Statement
The Online Clothing Store’s mission is to provide its customers with a diverse line of in demand and in fashion apparel products from its easy to use yet robust online ordering platform.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the e-commerce industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target consumers via the internet on a nationwide basis.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Online Clothing Store, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Online Clothing requires $125,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Online Clothing Store, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Online Clothing Store. Based on historical numbers, the business could fetch a sales premium of up to 3 to 5 times earnings.
3.0 Products and Services
Below is a description of the products offered by the Online Clothing Store.
3.1 Sales of Clothing via the Company’s Online Ordering Platform
The primary revenue center for the business will be the online sale of branded men’s and women’s apparel to customers on a nationwide basis. The Company’s robust ordering platform will feature an easy to use graphic interface so that customer’s can quickly see high resolution of images of the products that they intend to order. As discussed in the executive summary, Mr. Doe is currently sourcing a number of wholesalers and apparel distributors that can provide the Company with its inventories at a reasonable cost. As the Company is operating in an online capacity, all savings related to not maintaining a traditional retail store will be passed on to the end user. Please note that the fifth section of the business plan will discuss the many online marketing channels that the business intends to use in order to promote traffic and sales on the website.
3.2 Shipping and Handling Fees
The Company will generate secondary revenues from shipping and handling fees related to the distribution of clothing merchandise. Management will mark up all handling and delivery costs by 25%. Mr. Doe anticipates that these revenue streams will account for approximately 20% of the Company’s aggregate revenues.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the apparel sales and online e-commerce industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2010, at which point the economy will begin a prolonged recovery period.
4.2 Industry Analysis
The direct retail sale of apparel to the end user is a $150 billion dollar a year industry in the United States. The growth rate for this industry has been tremendous over the last five years. Growth is expected to occur at a rate of 4% to 5% on an annual basis. This is primarily due to the shift in advertising by brand name and high end retail stores. The economic tastes of Americans have changed significantly over the last five years as the overall wealth of the country has grown. As Americans now have more access to capital and an increased borrowing capacity, their ability to spend money on brand name and luxury items has also increased. One of the most exciting areas of retail trade is the ability to have a virtual store online. The Management of the Online Clothing Store fully anticipates that the online ordering platform will be complete by the end of January of 2009. This will allow them to order, purchase, and make transportation arrangements without having to visit a traditional brick and mortar location. The savings generated by solely operating in an online capacity will be passed on to the customers. Online retailers are expected to generate $115 billion dollars this year. The United States Economic Census indicates that over the next five years, 60% of the businesses in the United States will have an internet presence.
4.3 Customer Profile
Online Clothing Store’s average client will be a middle to upper middle class man or woman that frequently makes apparel purchases online. Common traits among clients will include: • Annual household income exceeding $60,000 • Will spend $25 to $150 per order with the Online Clothing Store, Inc. • Has a familiarity with ordering from online retailers. In this section of the analysis, you should describe the type of customer you are seeking to acquire. These traits include income size, type of business/occupation; how far away from your business is to your customer, and what the customer is looking for. In this section, you can also put demographic information about your target market including population size, income demographics, level of education, etc.
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
Online Clothing Store, Inc, intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
• Develop an affiliate marketing program that will allow other websites to earn commissions by referring visitors to the Online Clothing Store’s website.
• Establish relationships with apparel distributors and wholesalers that can provide direct inventory sales and drop-shipping capabilities for the business.
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
Mr. Doe intends to use a high impact marketing campaign that will generate a substantial amount of traffic to the Online Clothing Store’s platform. These strategies include the use of search engine optimization and pay per click marketing as well as developing an affiliate referral network. The Company’s web development firm will place large amounts of linking text on the Company’s website. For instance, when a person does a Google search for men’s or women’s clothing, the Company will appear on the first page of the search. This strategy is technically complicated, and the Company will use a search engine optimization firm to develop the Company’s visibility on a non-paid basis. Management expects that a SEO firm will place large amounts of linking data and text specific keywords into the business’s website, which will allow the Company to appear more frequently among search engines. A majority of web portal and search engine companies use very complicated algorithms to determine a website’s relevance in relation to a specific keyword. SEO firms place text and tags on the website to increase the rank of a specific website. Additionally, the Online Clothing Store will use several pay methods for increasing the Company’s visibility. This strategy is expensive, but the results can be phenomenal if this marketing strategy is properly executed. These advertisements appear along the border and side of a website, and each time a person clicks on the website, a small fee ranging from fifty cents to one dollar is charged to the Company’s account.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• The Online Clothing Store will have an annual revenue growth rate of 16% per year.
• The Owner will acquire $125,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
In the event of an economic downturn, the business may have a decline in its revenues. Brand name apparel and other non-essential item retailers tend to have declines during economic recessions. However, the Company’s low operating overhead coupled with the fact that the business operates with economies of scale will ensure that the business can remain at a breakeven point even with a 25% to 30% drop in revenue.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis