twixt

Thefeasibilitystudyofatweenclothingstorein
Leaside,NorthToronto

Submittedby:TaviaMcLachlan
SubmittedTo:GordSorli
APRJ699
WordCount:12000
March27,2010
 McLachlan2

TableofContents
Abstract......................................................................................................................................................4
Executive Summary..............................................................................................................................5
Introduction..............................................................................................................................................9
Background...........................................................................................................................................9
Research Problem..............................................................................................................................9
Hypothesis............................................................................................................................................9
Delimiting the Research...................................................................................................................9
Defining the Terms............................................................................................................................9
Stating the Assumptions.................................................................................................................9
Literature Review.................................................................................................................................10
Strategic Planning............................................................................................................................10
Marketing Communications..........................................................................................................11
Marketing Plan...................................................................................................................................12
Financial Implications.....................................................................................................................13
Summary.............................................................................................................................................14
Research Design...................................................................................................................................15
Statement of Results: A Business Plan for twixt....................................................................16

Company Profile................................................................................................................................16
Industry Analysis..............................................................................................................................17
Macro environment......................................................................................................................17
Market Situation...........................................................................................................................18
Map.....................................................................................................................................................22
Distribution Situation..................................................................................................................22
Opportunities and Issues Analysis.........................................................................................23
Objectives........................................................................................................................................23
Marketing Strategy......................................................................................................................24
Merchandising................................................................................................................................39
Operations.......................................................................................................................................40
 McLachlan3

Human Resources (HR)..............................................................................................................41

Financial Statements.......................................................................................................................43
Goals.................................................................................................................................................43
Start-up Costs...............................................................................................................................44
Balance sheet.................................................................................................................................46
Financial Ratios and Leverages...............................................................................................48
Income statement........................................................................................................................50
Breakeven analysis......................................................................................................................51
Cash flow.........................................................................................................................................52
Recommendations................................................................................................................................56
Conclusion...............................................................................................................................................56
References..............................................................................................................................................57
Appendix..................................................................................................................................................59
A: Online Potential Customer Survey Results.......................................................................59
B: Naming Survey............................................................................................................................68
C: Interviews.....................................................................................................................................69
D: Inventory Break-down.............................................................................................................77
E: FADS................................................................................................................................................78
F: Commission Schedule...............................................................................................................78
G: Bank Commissions....................................................................................................................79

 McLachlan4

Abstract

Thispaperwilloutlineastartupbusinessplanfortheestablishmentofatween(childrenaged712)
clothingstore.Thecompletedbusinessplanwillfocusonutilizingstrategicconceptsofdifferentiationto
putforthafirstclassmarketingcommunicationplanandahighqualityfinancialanalysis.Strengthsand
weaknessesofthestorewillbeoutlinedandevaluated.Thebusinessplanwillincludeamarketingplan
andfinancialstatementsandwillbethedeterminingfactoringoingforwardwiththebusiness.The
conceptoriginatedwhenImovedintotheareaofLeaside,NorthToronto.Itwasrealizedthatalthough
themajorityoffamiliesintheareahadschoolagedchildrentherewasnoclothingstorededicatedto
thatagegroupinthearea.Inordertoassessneedmarketresearchwascarriedout.Qualitativeand
quantitativeresearchwasdonetoassesstoneedintheareaandtogatherfiguresnecessaryforthe
financialstatements.Amarketingplanwasconstructedtocatertotheuniqueneedsidentifiedinthe
marketresearch.Themarketingplanisthoroughandinclusive.Themarketingplanidentifiedtheneed
fordifferentiationthroughuniqueproductsandservices.Thevisionofthebusinessistoprovidea
uniqueandfriendlystorewithindividualcustomerservice,aimedatprovidingtheup&comingyouthof
SouthBayviewwithfashionsasindividualastheyare.Inspiredbythenewesttrends,andcomfortedby
oldfavourites,thereisatreasureineverytrip.Anoverallstrategywasputinplacetoensurea
consistentbrandimagefromstorefronttosalesstafftoproduct.Paramounttothesuccessofthe
ventureisanaccuratepredictionofsales.Salesarepredictedforthefirstthreeyearsandfinancial
statementsarepreparedusingtheseforecasts.Incomestatementsandabreakevenanalysisdnot
demonstrateprofitabilityuntilyearthree.Anapparentissueisthehighcostofrentandinventory.This
negativelyaffectsthebusinessscashflow.Cashflowwillalwaysbeintheforefrontunlessotherterms
ofpaymentorleasenegotiationscanbemade.Inthecurrentstatethebusinessplanforatween
apparelstoreinLeasidewouldnotbeviable.Indicationsarethatthenicheistoosmalltoprovide
enoughrevenueforasuccessfulventure.TheareaofLeasidecansupporttheopeningofatween
clothingstore,underthecurrentfinancialstructure,theanswerisnull.Smallbusinessgrants,asilent
investor,orapartnerisneededtomakethecurrentbusinessplanviable.

 McLachlan5

Executive Summary
Theresearchpaperwilloutlineastartupbusinessfortheestablishmentofatweenclothingstoreon
BayviewAvenueinLeaside,NorthToronto.Thisopportunitywasseenasapotentialbusinessbecause
themajorityofthefamilieslivingintheareahavechildrenyetBayviewAvenuelacksachildrens
clothingstore.Inordertobesuccessfulthebusinessmusthaveastrongstrategicandmarketfocuswith
toattentionwhatcustomerswantandarewillingtopayfor.Thepurposeofthepaperistodetermine
thefeasibilityofthebusinessventure.Theresearchwillbecompliedintoabusinessplanincludinga
literaturereviewandfinishingwithrecommendations.TheyhypothesisisthattheareaofLeaside,North
Torontocansupporttheopeningofatweenclothingstore.

Inordertounderstandtheproblemandformulateastrongbusinessplanaliteraturemustbecarried
out.Thefirstsectionoftheliteraturereviewencompassesstrategicplanning.HenryMintzberg(1987b)
maintainsthatstrategyisneededtocreatecohesion.Failuretocompleteastrategicplanwillleadtoan
unsuccessfulbusiness.Inordertocreateasoundbusinessplanthestrategymustcarryfromthe
marketingplanthroughouttherestofthebusinessplan.However,whileformulatingastrategyis
proveneffectiveitisimportanttonotethatthestrategymustbeofsoundintentionandmustnotbe
madeinhaste.Onewaytocombatapoorstrategyistolookatallinternalandexternalfactorsincluding
aPorterFiveForceanalysis.Alsoofimportancetothestrategicreviewisthenotionthatnostrategy
shouldremainstagnant.Thiswillbeafactordowntheroadshouldthebusinessbeviable.

Thesecondsectionoftheliteraturereviewconsidersmarketingcommunications.Marketsegmentation
isasubquestionoftheoverallresearchproblem.WendellSmith(1995)reflectsthatproduct
differentiationandmarketsegmentationaretwoavailablemarketingstrategies.Atweenclothingstore
isasegmentoftheoverallapparelmarketbutsegmentationalonewillnotmaketheventuresuccessful.
Focusingonthetweenmarketwillallowthestoretoconcentrateonanichemarketandformulatea
uniquestrategyforcompetitiveadvantage.Differentiationcompletessegmentationsobydifferentiating
thestoreithasmorelikelihoodofsuccess.Deliveringapositivecustomerexperienceisparamountto
anyretailbusinesssuccess.Marketresearchmustbedoneinordertounderstandwhatthecustomer
wantsandneeds.Marketresearchmustbeanongoingprocessthroughoutthelifespanofthebusiness.
ThetemplateforthemarketingplanhasbeenadaptedfromAthabascaUniversitysMarketing
Management:MKMT504(Sorli,2006).Thistemplateisthoroughandinclusive.

Thefinalportionoftheliteraturereviewcomprisesthefinancialimplicationsofstartinganewbusiness
venture.Theprinciplesoffinancialforecastingmustbeadheredtoandconsiderationneedstobegiven
totheincomestatement,balancesheetandcashflow.Thestrengthoffinancialforecastingliesinthe
accurateforecastofsales.Oncethesalesforecastisdonethebalancestatementandcashflow
statementcanbepredicted.Afinalimportanttopictobeaddressedistheimportanceoffinancialratios,
leveragesandliquidities.Thesefiguresgiveabetterunderstandingofthebusinessfinancialstrength.

Theresearchdesignonthebusinessplanwillincludebothqualitativeandquantitativedatacollection.
Thequalitativecollectionwillconsistof;interviewingchildrensclothingstoreowners,interviewinglocal
 McLachlan6

businessowners,performinganonlinesurveytoassessneeds,andcarryingoutanonlinesurveyto
selectastorename.Thequantitativedatacollectionwillinvolve;researchingthecosttoleasespaceon
Bayview,thecostofinventory,startupcostsandanymiscellaneouscosts.Afurtherliteraturereview
willbeneededtoaddressanyongoingconcernsregardingstrategy,marketingandfinanceaswellasto
understandtherequirementsofstartingasmallbusiness.

Thebusinessplanwillcommencewithashortcompanyprofile.Thestorenameistweetandwaschosen
byapaneloftweenchildren.Themacroenvironmentanalysisshallfollowandstudiesthedemographic,
economic,political/legal,environment,socioculturalandtechnologicalaspectsoftheretailindustry.

Leasideisanaffluentareawithaveryhighpopulationoffamilieswithyoungtotweenagedchildren.
TheareahasacommunityfeelandBayviewAvenuefeelslikethemainstreetofasmalltown.
Residentsenjoyshoppinglocalandtendtosupportlocalsmallbusinesses.Theaverageincomeinthis
areaisover$150000implicatingtheavailabilityofdisposableincome.

Whilethecurrenteconomicinstabilityisnotoptimisticforsalesforecasts,researchshowsthatretail
salesareontherise.Thestabilityofthejobmarketcoupledwithrealisticsalesforecastscanensurethe
businesswilloperateefficiently.Afurtherhindrancetotheeconomicclimateistheintroductionofthe
harmonizedsalestax(HST)bytheCanadiangovernment.Thistaxwillbechargedtoallpurchasesata
surchargeof15%.Anothernewbylawputinplaceforcesretailerstochargecustomers$0.05fortheuse
ofaplasticbag.Thisshouldnotbeathreattothebusinessasthefeeisminimalandmanypeoplebring
theirownbagorthestoreisabletoprovideanonplasticbagfreeofcharge.

ThereisastrongcommunityfeelandyearningforsocialacceptanceinLeaside.Thispeerpressurecan
haveasignificanteffectonstorebusiness.Wordofmouthandcustomerreferralsarethemajorformof
advertisingintheareaandneedtoberecognizedasimportant.Onebadexperiencecouldhave
detrimentaleffectsofsales.

Thefinalfactorcontemplatestechnology.Theincreaseduseoftechnologyinsocietyrequiresanynew
businesstohaveanonlinepresence.Awebsiteandsocialnetworkingarebareminimumsrequiredto
reachtheintendedaudience.AdditionalaCRMprogramandPOSprogramareessentialtostayingupto
dateoncustomersandinventory.

TheFiveForceanalysiswillbeusedtoexaminethemarketsituation.Thepowerofbuyersinanurban
settingsuchasTorontoisenormous.Buyershaveanabundanceofchoiceandcanshoparoundforthe
bestprice,selectionandservice.Theimplicationisthatastoremustbeabletodifferentiateitselfto
obtainbusiness.Suppliersalsohavealotofpoweroversmallretailers.Supplierscandictateallthe
termssurroundingtheiragreementwithsmallretailers.Sincesuppliershavenumerousoptionstheyare
bestabletoselectonesfavourabletotheirbusiness.Suppliersandbuyerscreateanunattractive
environmentfornewentrants.Thecostsassociatedwithstaringanewbusinessaswellasthelarge
capitalassociatedwithinventoryandleaseagreementsmakethethreatofnewentrantslow.
Alternatively,thethreatofsubstitutionforchildrensclothingishigh.Therearemanyknockoffbrands
andcompanieslookingtocreatefashionablelooksatcheaperprices.ThefifthPorterforceis
 McLachlan7

competition.Fivecompetitorshavebeenidentifiedasathreattoanewtweenstore.Thesebusinesses
areGAPKids,OldNavy,JoeFresh,SportingLifeandonlineretailers.Overallcompetitionisfierceand
offersalotofvarietytocustomersandreliesonquickinventoryturnover.Deeppocketsandcontinuous
pricecuttinghavehelpedestablishedretailersweathertheeconomicstorm.

Theopportunityliesinthefactthatthereisademandintheareaforanichetweenapparelstore.The
mainthreatstothisarebigboxstoresenteringthearea,notbeingthefirststoretomarketandvertical
integrationbysuppliers.Themarketingplanlooksmaximizetheopportunitywhileminimizingthreats.
Theissuestobeaddressedare:

1. Whenandhowshouldthestorebelaunched?
2. Howwillsalesbedriven?
3. Whatareinnovativeandcosteffectivewaystodifferentiatethestorefromcompetitors?

InordertoreachitsfinancialobjectivestweetmustmeetasetofSMARTmarketingobjectivesaswell.
Theforemostgoalistobreakevenbyyearthree.Inordertoreachthesegoalsastrongandcohesive
marketingstrategywillbeputinplace.Theaimistohaveaneffectivestrategythatunifiestheentire
businessplan.Thestrategiesare:

Toattractbuyerstoalocalstorethatoffersuniqueproductsandcustomordering
ToofferuniqueprogramsandservicestoencouragerepeatVIPclientele

Theestablishmentwillbepositionedasauniqueandfriendlystorewithindividualcustomerservice,
aimedatprovidingheup&comingyouthofSouthBayviewwiththefashionsasindividualsastheyare.
Inspiredbythenewesttrends,andcomfortedbyoldfavourites,thereisatreasureineverytrip.Itwill
targetboysandgirlsaged712andtheirmotherswhotypicallyshopforthem.

Marketingcommunicationswillbesegmentedintosevenfocalpoints:salesstaff,storeimage,direct
marketing,salespromotions,publicrelations,networkingandadvertising.Themaindutiesofthesales
staffistogenerateallinternalsalesandprovideexcellentcustomerservice.Therearefourfactorsthat
comeintoplaywhenconsideringthestoreimage:storedesignandname,visualcommunication,store
planningandmerchandising.Allaspectsmustbecongruentwiththeoverallbrandimageofthestore.
DirectmarketingwillcomefromtheinformationobtainedintheCRMdatabase.Thisinformationwillbe
usedtotargetselectgroupsforpromotionsandsales.Therewillbefivetypesofsalespromotions
including;jeanclub,salescommission,registry,themodelcontestandthebirthdayclub.Forthefirst
yeartheconcentrationforthepublicrelations(PR)campaignwillbethroughafreelocalnewspaperand
theGrandOpening.AfteryearonePRwillbecarriedoutthroughwordofmouth,alocalcharityfashion
showandanonlinepresence.Socialandbusinessnetworkingwillfinishoffthepublicpersonaoftwixt.
Finally,advertisingwillbeintheformofreusable,branded,storebags,thecompanywebsiteand
supplierswebsites.Controlsandcontingencieshavebeenputinplacetoensuretwixtistrackingto
meetallitsfinancialandmarketingobjectives.
 McLachlan8

Merchandisingwillbedonethroughlocalandinternationalsuppliers.Tradeshowswillbeattended
annuallywherenewbrandlinesandsupplierswillbesoughtout.Inordertoobtainadvantageous
marginsonallproductsanoverallbuyingstrategyhasbeenputinplace.

Businessoperationstakeintoconsiderationallpermitsandfeesassociatedwithopeningasmall,retail
business.Theseincludebutarenotlimitedtotaxes,packaging,inventorycontrol,CRMandquality
control.

TheHRstrategywillbeputinplacetocomplimentthemarketingcommunicationsplan.Inadditionto
theownerparttimesalesassociatesandinternswillbeusedtostaffthestore.

Thefinalportionofthebusinessplanencompassesthefinancialstatements.Theshorttermgoalsof
twixtaretoachievegrosssalesof$98773foryearone.Thelongtermgoalsistoachievebreakevenby
yearthree,reachaveragemonthlysalesof$20000byyearthreeandpaybackborrowedfundsbyyear
five.

Whenconsideringstartupcoststhebiggestcostsareinventoryandlease/leaseimprovements.
Consideringallunsoldinventorycanbereturnedforarefundtheonlysunkcostarethelease/lease
improvementsandbusinesslicencesandpermits.

Thebalancesheetispreparedforthefirstthreeyearsbasedonsalespredictions.Itiscleartoseea
decreaseinassetsandanincreaseinliabilitiesinyearonethroughthree.Thiscanbestudiedinmore
depthbylookingatthefinancialratiosandleverages.Debt/equityratio,currentratioandquickratioall
indicatenegativeoutcomesfortwixtandhighlighttheshortageofcurrentassetsversuscurrent
liabilities.Itcanbenotedthatthebusinessisheavilyleveragedbyyearthreeduetoashortageofcash.

Theincomestatement(andbreakevenanalysis)ispredictedforyearonethroughthreeandshowsthat
thebusinesswillnotbeabletobreakevenuntilyearthree.Theslowgrowthandthevariabilityofsales
donotcoverthehighfixedcostsattachedtooperatingaretailbusinessonLeaside.Ofevenmore
concernisthecashflowprediction.Thecashflowstatementindicatestheexistenceofcreditproblems
andshedslightonthehugeimpactofpurchasinginventoryforagrowingbusiness.Thestoreisnotable
tomeetitscashflowneedsinyeartwoandwouldhavetorelyonashorttermlineofcredittocarryon
withbusiness.Thiswouldfurtherleveragethestoreandputinitfurtherdangerofbankruptcyshould
salesnotcontinuetogrow.

Uponanalysisofalldatathebusinessdoesnotappeartobeprofitableatthecurrentdebtlevel.The
apparentissueiscashflow.Inordertobeviablethestorewouldhavetoincreasesalesorincrease
prices;bothoptionsnotbeingfeasiblesolutions.Whileindicatedasaneedintheareaitappearsas
thoughLeasideistoosmalltosustainanichetweenclothingstore.

 McLachlan9

Introduction

Background
Theresearchpaperwilloutlineastartupbusinessplanfortheestablishmentofatweenagedclothing
store.Theideawasformulatedwhenitwasidentifiedthattherewerenochildrensclothingstoreson
BayviewAvenueinLeaside,NorthToronto.Thisisviewedasapotentialopportunitybecausethe
majorityoffamilieslivinginthisareahavechildren:toddlerstoteenagers.Whileitmayseemerroneous
tostartabusinessduringthesechaoticeconomictimes,someentrepreneursbelievethatthisisthe
perfecttimetostartanewbusiness.Inordertobesuccessfulthebusinessmusthaveastrongstrategic
andmarketfocus,withattentionpaidtowhatcustomerswant,need,andarewillingtopayfor.

Research Problem
ThepurposeofthisresearchprojectistodeterminethefeasibilityofatweenclothingstoreonBayview
AvenueinLeaside,NorthToronto.Theresearchwillbecompiledintoabusinessplanoutliningan
overallstrategy,amarketingplanandthefinancialimplicationsofastartupventure.Thebusinessplan
willbethedeterminingfactormovingforwardwiththebusiness.

Subproblems

1. Isanoverallstrategynecessary?Howcanthestoredifferentiateitself?
2. WhatwilltheMarketingCommunicationPlanlooklike?Howwillmarketresearchbecarried
out?
3. Whatfinancialnumbersandreportsareneededtoassessthefeasibilityofthisventure?

Hypothesis
ThehypothesisisthattheareaofLeasidecansupporttheopeningofatweenclothingstore.

Delimiting the Research

ThestudywillnotresearchdifferentOrganizationalstructuresonlythebasicoperationalneedsofthe
company.

ThestudywillnotevaluatetheHumanResourceneedsoftheplanjustageneralstrategicplanfor
budgetingpurposes.

Defining the Terms

Tweenchildrenbetweentheagesof712.

Stating the Assumptions

Thefirstassumptionisthatthenumbersneededforthefeasibilitystudywillbeavailable.

ThesecondassumptionisthatthestorewillbethefirsttomarketonBayviewAvenue.

Thethirdassumptionisthattheeconomicclimateintheareaisstrengthening.
 McLachlan10

Theimportanceoftheresearchproposedisimmense.Whenstartingabusinesstherearenumerous
unknowns.Marketresearchwillbeessentialindeterminingtheoptimaldesignandofferingsofthe
business.Inordertodeterminethebestmethodstouseliteraryresearchwillbedoneforstrategic
planning,marketresearch,theoptimaltemplateformarketingcommunications,andrelevantfinancial
dataandreports.

Literature Review

Strategic Planning
Sothequestionmustbeasked,whatisstrategicintentandisitreallynecessary?TheCanadianauthority
onthesubject,HenryMintzberg,describesthecharacteristicsofagoodstrategyas:neededtofocus
effortsandpromotecoordinationofactivity(Mintzberg,1987b).Inessencestrategymustknitpeople
andideastogether.Abusinessmustbestrategicinordertosurvive.Failuretocompleteastrategicand
dynamicbusinessplanwillresultinanullhypothesis.Sincetheaimofthispaperistocreateaviable
businessplanforopeningaretailtweenclothingstoreitisimportantthatthehypothesisbeproven.
Strategicintentneedstoaddresstheresourcesneededfortheventureandhowtooptimizesaid
resources.

ResearchdonebyOttawasLeadEconomicDevelopmentCorporation(OCRI)hasledtoatemplatetobe
putinplaceforWritinganEffectiveBusinessPlan(OCRI,2002).Thisframeworklooksatcompletinga
marketingplan,financialplanandoperationalplanbeforeventuringintobusiness.Thisplanisvery
practicalbutgiveslittlethoughttoanoverallbusinessstrategyandtheimportanceofsettingaroad
mapfortheventure.Itisimportantwhenundertakingthisprojectthattheoverallstrategyofthe
businessbedefinedsothatthebusinessplanandmarketingplanarecohesive.Onewaytoensure
consistencyistoaddstrategicformulationtothebusinessplantoensuremarketinggoalsandbudgetary
goalsfitwiththeoverallgoalsofthebusiness.Afurthersteptoplanningisofkeyimportancenotedby
Mintzberg.Mintzbergstatesthatoncedeveloped,thestrategymustbeshared(Mintzberg,1987a.P.17).
Thisisimportanttothepaperbecauseitexplainshowanoverallstrategywillinfluencethebusiness
planandthoughtmustbegiventohowthestrategyandgoalsofthecompanywillbecommunicatedto
customers,employeesandcreditors.

Whileformulatingastrategyhasbeenproveneffectiveitisimportanttonotethattheassumptionthat
anystrategyisbetterthannoneisjustnottrue(Mintzberg,1987b.P.26).Thisisimportantforthe
purposeofthisresearchpaperbecauseattentionmustbepaidtothebeststrategyforthestoreinorder
tohaveoverallcohesion.AflawisthatMintzbergdoesnotgoontostatehowtoensureoneisnot
formulatingabadstrategy.However,otherresearchintheareaattemptstoaddressthisissue.Robert
GrantattemptstoaddresstheactivityofcreatingasuccessfulstrategyintheBookContemporary
StrategyAnalysis,5thEdition.(Grant,2005).Grantidentifieskeysuccessfactorsforasuccessfulstrategy
whichinclude;adetailedenvironmentalanalysis,industryanalysisandconsumerawareness.Thefactors
laidoutbyGrantareimportanttothisresearchpaperbecausetheydirecttheresearchtoanswerkey
 McLachlan11

questionsabouttheproposedbusinessenvironment,competitors,suppliersandconsumers.Inorderto
becompetitive,PortersFiveForces(Grant,2005.P.73)mustbeaddressed.

Howwillstrategyhelpthebusinessattainacompetitiveadvantage?Mintzberghasaddressedthat
corporationsfunctionbestwhentheycantakeonethingforgrantedsothattheycanfocusonother
things(Mintzberg,1987b.P.30).Astrategyisneededtoreduceuncertaintyandprovideconsistency...,
inordertoaidcognition(Mintzberg,1987b.P.29).However,howdoweknowwhenweneedto
reassesswhatwetakeforgrantedsoasnottofallbehindinthemarketplace?Ifastrategyisoutdateda
companywillquicklyloseitscompetitiveadvantage.Whencreatingastrategicplanitisimperativethat
thisissueisaddressed.Mintzbergspeakstothepointofstrategybecomingaliabilitybutdoesnot
addresstheissueshehimselfbringsup.Instead,Mintzbergresearchedtheissueinaseparatepaper
titledReflectingonStrategythathecowrotein1999.Inthispaper,MintzbergandLampel,identified
thattherearecyclesofinnovationinstrategyfollowedbyimitationandconsolidation(Mintzbergand
Lampel,1999.P.28).Theinformationpresentedhereillustrateshowthestrategycreatedforthenew
businessventureproposedinthisresearchpaperwillneedtochangeandadaptovertime.

Marketing Communications
Marketsegmentationisasubquestionoftheoverallresearchproblem.WendellSmithreflectsthat
productdifferentiationandmarketsegmentationaretwoalternativemarketingstrategies(Smith,
1995.P.63).Atweenclothingstoreisasegmentoftheoverallapparelmarketbutsegmentationalone
willnotmaketheventuresuccessful.Differentiationcompletessegmentationsobydifferentiatingthe
storeithasmorelikelihoodofsuccess.Smithstatesthatamarketermaydetermineitisbesttoaccept
divergentdemandandadjustproductlinesandstrategy(Smith,1995.P.64).Whatisnotclearfrom
Smithsresearchishowdoesamarketerrealizethis?Isthereastageinplanningthatbestillustrates
whatsegmentstochooseorproductlinestocarry?Isthisintuition?Moreresearchmustbedoneon
thisissueinordertouseproductsegmentationasanadditionalmarketsegmentandtomaximize
differentiationasastrategyforcompetitiveadvantage.Smithalsosupportsthepremisethatstrategies
ofdifferentiationandsegmentationcallfordifferentmarketingstrategies(Smith,1995.P.64).uniqueBy
focusingonasegmentofthefashionmarketthecompanywillbeabletotargetonegroupofconsumers
withanoverallplan.Itisexpectedthatbyconcentratingonthetweenmarket,thebusinesscangain
competitiveadvantageoverthosestorestryingtomarkettoabroadconsumerbaseanddifferentiation
withuniqueproductofferingsandcustomerservicewillhelpdifferentiateitfromitscompetitorswithin
thetweenclothingmarket.

Deliveringthepositivecustomerexperienceisimportanttotheoverallmarketingmix.Todetermine
whatthecustomerwantsmarketresearchmustbedone.Inordertodeterminewhatinformationis
needed,marketDepthInterviewinghasbeenreviewed.PaulHague,NickHagueandCarolAnnMorgan
studieddifferenttypesofinterviewsandhowtotailorinterviewstogettheinformationneeded(Hague
etal.,2004.P.74).Thisinvestigationwillbehelpfulwhenwritingtheinformationgathering
questionnairesrequiredforthemarketresearch.Hagueetal.statethatwheninsightsandexploration
arerequired(onemust)interviewmorelooselystructuredwithflexibilitytoallowforalotofscope
(Hagueetal.,2004.P.74).Sincetheresearchobtainedfromthesequestionnaireswillbeusedinlieuof
 McLachlan12

historicalfigures,itisimperativethattheinformationgatheredisasvalidaspossible.Onedrawbackto
Hagueetal.isthattheydidlittleexplorationofquantitativeresearch.RobinBirnexploredtheneedfor
marketresearchinthebookEffectiveUseofMarketResearch(2004).Marketresearchhasbeenseenas
essentialinordertocomposeandevaluatemarketingobjectives(Birn,2004.P.62).Theterm
evaluateisimportanttohighlightbecauseitsupportsthenotionthatresearchmustbeongoingand
notonlyusedforthepurposeofaccomplishingthebusinessplan.

Writingabusinessplanandlaunchingasuccessfulnewbusinessishighlydependentonthestrengthof
itsmarketingplan.InhisbookWritingandImplementingaMarketingPlan,RichardGersonstatedthat
youcanvirtuallyguaranteethesuccessofyourbusinessifyouknowwhoyouare,whatyourcustomer
wants,whereyouaregoing,howyouwillgetthere,andwhatyouwilldoonceyouarrive.(Gerson,
1991.P.1).Gersonexplainswhyitissoimportanttohaveadetailedmarketingplantocomplementthe
businessplan.However,whatconstitutesasolidmarketingplan?Thisquestionhasbeenaddressed
throughresearchbymanyindividuals;ofnotePhilipKotlerandKevinLaneKellerintheirtextbook
MarketingManagement:12thEdition(KotlerandKeller,2006)andJohnWestwoodinhisbookHowto
WriteaMarketingPlan(Westwood,2006).Westwoodoffersadetailedmaptobeusedwhenwritinga
marketingplan.However,thelimitationsofhisplanlieinstrategicalanalysis.Thereviewgivenby
Westwooddoesnotconsiderhowtoprovidevaluebeyondthatofskimmingorpenetrationpricing
strategies(Westwood,2006.P.55).Incontrast,KotlerandKellerhighlighttheimportanceof
distinguishingbetweenstrategicmarketingandtacticalmarketing(KotlerandKeller,2006.P.36).In
ordertowritethemarketingplanstrategicmarketingmustfirstaddresscustomersegmentation,market
focusandvaluepositioning.Thisisimportanttothisprojectbecauseaclearmarketmustbedetermined
beforedecidingonwhatproductstosellandhowtopromotethem.

Marketing Plan
InordertowritethemarketingplanthetemplatehasbeenadaptedfromAthabascaUniversitys
MarketingManagement(MKMT504)(Sorli,2006).Itisimportantthatthefollowingsectionsbeadhered
to.Thesectionstobeincludedare:

SituationAnalysis

Macroenvironment
Demographics
Economics
PoliticalLegal
Ecological
SocioCultural
Technological
MarketSituation
DistributionSituation
 McLachlan13

OpportunitiesandIssuesAnalysis

OpportunitiesandThreats
IssuesAnalysis
Objectives
Financial
Marketing
MarketingStrategy
TargetMarket
Positioning
Product/Service
Pricing
MarketingCommunications
SalesForce
SalesService
DirectMarketing
SalesPromotion
PublicRelations
Advertising
MarketResearch
ActionProgram
FinancialImpact
ControlsandContingency

Thistemplateisthoroughandinclusive.TheresearchdonebyKotlerandKellerandbyGersonsupport
thesectionsandsubsectionsoftheSorliMarketingplan.

Financial Implications
Inordertodeterminethefinancialimplicationsofthebusinessplanfinancialforecastingoftheincome
statement,balancesheetandcashflowwillbedone.Theprinciplesoffinancialforecastingoutlinedin
PrinciplesofCorporateFinance(2008)are:

1. Itisnotanafterthought
2. Itiscarriedoutfrequently
3. Itforecastsrollingaverages1518monthsahead
4. Itbeginswithsales
 McLachlan14

5. Itinvolvescompletebusinessperformance
6. Accuracyoftheforecastingmustbemeasurable
7. Outcomesmustbecomparedtotheforecast
(GitmanandHennessey,2008.P.188)

Theprinciplesstatedabovearegoodguidelinesforfinancialforecastingbuttheydolittletoindicate
howforecastingiscarriedoutinstartupventures.Mostoftheresearchonforecastingandfinancial
planninguseshistoricalnumberstoanticipatefutureresults.Moreresearchneedstobedoneon
forecastingfinancialstatementsfornewbusinessventures.Theaimoftheresearchpaperisthatthe
informationattainedthroughquantitativeandqualitativemeasureswillbeabletodetermineifthe
businessshouldbestated.

Thestrengthoffinancialforecastingliesintheaccurateforecastofsales(GitmanandHennessey,
2008.P.177).Oncethesalesforecastisdonethebalancestatementandcashflowstatementcanbe
predicted.Thepercentagesalesapproachlooksatallcostasaconsistentpercentageofsales(Gitman
andHennessey,2008.P.192).Thismethodisunrealisticbecauseofthefixedcostsassociatedwith
runningaretailstore.Whileproductcostswillincreaseasaresultofsalesincreaseitmaynotbe
consistent(duetodiscounts)andotheritemsonthebalancesheetwillnotbetieddirectlytosales.The
judgementapproachwillbeusedtoindividuallyanalyzethefactorsassociatedwithoperatingaretail
store(GitmanandHennessey,2008.P.203).Inaddition,alowhightechniquewillbeusedinforecasting.

Afinalimportantfinancialtopictobeaddressedistheimportanceoflookingatfinancialratios,
leveragesandliquidity.AnthonyAtkinson,RobertKaplan,EllaMaeMatsumuraandS.MarkYoung
introducethebasicratiosneededtobestudiedinManagementAccounting:5thEdition(2007).The
importantequationstothebusinessplanare:breakeven,operatingprofitmargin,netprofitmargin,
financialleverage,debtratio,currentratio,quickratio,freecashflowandinventoryturnover.Atkinson
etal.illustratehowtopreparethereportsandwhatthenumbersmean.Itisimportanttopredictwhat
thesenumbersareforthebusinessandwhatthenumbersrepresent.

Summary
Theresearchstudiedimpliesthatastrongbusinessplanneedsastrongstrategicplanthatiswell
thoughtout,communicatedandimplemented.Thefailuretocompleteastrategicplanwillresultina
nullhypothesisfortheresearchproblem.AgreatdealofattentionhasbeenpaidtoHenryMintzbergs
theoriesandresearchonstrategy.Mintzbergillustrateshowstrategycanbeacompetitiveadvantage.
Overall,inorderforthebusinessplantobeeffectiveandforabusinesstosucceedagoodstrategyisa
necessity.

Awellrecognizedstrategyismarketsegmentation.Inordertomaximizeresultsaplanneedstobe
madetofocusonanichemarket.Whatisnotclearfromtheresearchisifbeyondanichemarketif
moresegmentationneedstobedone.Attentionwillbepaidtothiswhencompletingmoreresearchon
 McLachlan15

thebusinessplan.Alotofconsiderationhasgoneintothepropermarketresearchtocarryout.Amixof
qualitativeandquantitativeinterviewsandsurveysmustbeusedinordertogetacompletepictureof
whattheconsumerwants.Fromthemarketresearchadetailedmarketingcommunicationsplanwillbe
completed.

Finallythefinancialforecastswillindicatewhethertheventurewillbefeasibleornot.Forecastingwillbe
preparedtodetermineiftheventurecanbeprofitableandtoanticipatecashflowneeds.Special
attentionwillbepaidtoresearchonpredictingsalesandinventoryturnoverastheyarethemain
limitingfactors.

Research Design
InordertodeterminethefeasibilityofopeningatweenagedclothingstoreinLeasideabusinessplan
mustbeprepared.Theresearchdesignwillincludebothqualitativeandquantitativedatacollection.
Ethicsapprovalwillbesoughtforthequalitativeinterviewscarriedout.Inordertocompletethe
businessplanthefollowingresearchneedstoinvestigate:

1. QUALITATIVEDATACOLLECTION:

Interviewchildrensclothingstoreownersnotinarea.

Interviewclothingstoreownersinarea

Onlineneedsassessmentsurveytomothersoftweenagedchildreninthearea

Onlinestorenamesurvey

2. QUANTITATIVEDATACOLLECTION:

CosttoleaseandimprovespaceonBayview

Costoftaxes,permitsandcommissions

Costofinventory

Costofstaff

Costofstartupfees

Costofinternetsite

3. LITERATUREREVIEW:

Startingasmallbusiness
 McLachlan16

CanadianGovernmentrequirements

Strategyresearch

Marketingresearch

Financialresearch

Oncetheinformationhasbeengathereditwillbecompiledforthepurposeofabusinessplanthat
incorporatesthefinancialstatementsaswellasacompletemarketingplan.

Statement of Results: A Business Plan for twixt

Company Profile
NAME:twixt

FORM:Thebusinesswillbeasoleproprietorship.

STARTDATE:August1st,2010

HOURSOFOPERATION:TuesdaytoSaturday:10am6pm,Sunday:11am5pm.

VISION:Auniqueandfriendlystorewithunparalleledcustomerserviceaimedtoprovidetheup&
comingyouthofSouthBayviewwithfashionstodemonstratetheirindividualstyle.Inspiredbythe
newesttrendsandcomfortedbyoldfavourites,thereisatreasureforeverywardrobe.

LOCATION:1531BayviewAvenue,Toronto,Ontario

BUSINESSADVISORS:

Lawyer:TerrencePochmurski

Accountant:VincentTitel

Mentor:HeatherAdams
 McLachlan17

Industry Analysis

Macro environment

Demographics
Leaside,theareainwhichthestorewillbelocated,iscomposedofmainlydoubleincome
familieswithanaverageincomeofover$150000(AppendixA).Ofthepeoplesurveyed
(AppendixA),themajorityoffamilieshave2children(72.2%).Mostfamiliesintheareahave
youngchildrenandprefertoshopintheareainwhichtheyreside.Whiletheaveragepriceof
homesinthearea($700000)isabovetheTorontoaverage,mostparentswaitlongerbefore
havingchildrenandareintheirmidfortieswithestablishedcareers.Thismeansthatthereis
disposableincomeavailable.Thedemographicsarefavourableforatweensclothingboutique
openingonBayviewAvenue.

Economics
Thecurrenteconomicrecessionnegativelyaffectssales.However,nationalretailsalesfigures
roseinDecember2009by2.8%(Tong,2010)yearoveryear,showingsignsofincreased
consumerspendingforthefirsttimeinoverayear.Thejobmarketisalsoseeingaresurgence
whichmeansmoredisposableincomewillbeavailabletoliftspending.Tougheconomic
conditionswillforceanewbusinesstooperateefficientlyanddemandapositiverateofreturn
onmarketingdollarsspent.

Political/Legal
CommencingJuly2010theCanadiangovernmenthasimposeda15%harmonizedsalestax
(HST)onallpurchases.Thisreplacestheprovincialsalestax(PST)andgoodsandservicetax
(GST)whichcombinedtogetherwere15%.ThedifferenceisthatHSTwillapplytoallclothing
purchaseswhilesomechildrenspurchaseswereexemptfromPSTpriortoJuly2010.This
increaseintaxmaynegativelyinfluencesales.Additionally,thecityofTorontorequiresthe
paymentofmanypermitfeesandtaxesbyallbusinessesoperatingintheirjurisdiction.These
willbeaddressedinStartupFees.Thesefeesincreasethecostofopeningandrunningastorein
thecityofToronto.

Environmental
TheCityofTorontonowregulatesthatallcustomersmustbecharged$0.05forallplastic
shoppingbags.Inordertoavoidthissurchargeshoppersareencouragedtobringtheirownbag
orthestoremustusematerialsotherthanplastic.Thenewbylawimpactsthematerialusedto
packagethepurchase.Paperorreusablebagsareagreatoptionbecausetheyareoftenreused
bycustomersofferingfreeadvertisingforthestore.

Sociocultural
ThereisastrongcommunityfeelandyearningforsocialacceptanceinLeaside.Manyfamilies
chosewheretheyeat,shopandplaybasedonwhattheirneighboursdo.Thisinformalpeer
pressurecanhaveasignificanteffect,eitherpositiveornegativeonstorebusiness.Wordof
 McLachlan18

mouthisaveryimportantformofadvertisingandcancarrymoreweightthandiscountsor
productsoffered(KellerandKotler,2006.P.156).Usingclientsasadvocatescanbeusedas
positiveadvertisingandhelpdrivenewcustomersintothestore.Conversely,anegative
experienceissharedwithtentimesasmanypeopleasapositiveone(Grant,2005.P.450).
Therefore,onebadexperiencecouldhavedetrimentaleffectsonsales.

Technological
Theincreaseduseoftechnologyinsocietymeansthatcustomerswantinstantgratification.
Thereisanincreasedtrendforonlineshoppingorbrowsing.Thepresenceofawebsiteisa
requirement.Thetweenagegroupreliesheavilyontechnologyandsocialnetworkingtostayup
todateonfashions,trendsandgossip.Anonlinepresenceintheformofsocialnetworkingisa
necessity.Anothernecessityisaninventorytrackingsystemwhichenablesthestoretheability
toefficientlyknowwhatisavailableandwhathasbeensold.Usedproperlytechnologycanbe
incorporatedintoamarketingplanasaformofadvertisingandnetworkingtostayincontact
withtheclientbase.

Market Situation
ThePorterFiveForceAnalysiswillbeusedtoexaminethemarketsituation.

PowerofBuyers
InanurbansettingsuchasTorontothepowerofbuyersishighduetoanabundanceofchoice.
Buyersareabletocomparisonshopforthebestpriceandquality.Whilebuyersdonotreceive
bulkdiscountstheyareabletoinfluencetheirbuyingpoweroversmallretailersthrough
frequentbusinessandloyalty.Withholdingtheirbusiness,shoppingelsewhereorwaitinguntila
productgoesonsaleareallwaysbuyerscaninfluenceretailers.Additionally,buyersareableto
influenceotherbuyersbyrevealingtheirshoppingexperience.Theimplicationofthisanalysisis
thatifasimilarproductcanbefoundelsewhereatacheaperpriceorbetterservicethenthere
isahighpotentialthebuyerwillmaketheirpurchaseelsewhere.However,thisopensupthe
potentialforstoredifferentiation.Ifastorecanprovidevalueaddedservicesandunique
productsthebuyerwillhavelessdesiretoshopelsewhere.Returnbuyersdrivesalesbywordof
mouth,productselection,priceandcustomerserviceandthemarketingstrategyshouldreflect
thisfact.

PowerofSuppliers
Suppliershavealargeamountofpoweroversmallretailers.Supplierscandictatetheminimum
volumerequiredtoplaceanorder,thenumberofstoresinanareathatsellaspecificbrand,the
unitprice,andtheaccountspayableterms.Inaddition,recenttrendsshowanincreasein
suppliersverticallyintegratingtoopenbrandedstoresinwhichtheyselltheirownproduct.
Historicallyaccesstosuppliershasbeenlimitedbutonlinepresenceaswellasnumeroustrade
showshasdecreasedthemystiqueofsuppliers.Theimplicationofthisinformationillustrates
thatsuppliershavenumerousoptionstodistributetheirproduct.Reliablebusinesspartners,
 McLachlan19

shortpaymenttermsandmutuallybeneficialmarginsallcanpositivelyinfluencesuppliers.
Backwardsintegrationcanneutralizethepowerofsuppliersbyeliminatingthemiddlemanand
increasingmarginsonmerchandise.

ThreatofNewEntrants
ThereisalowthreatofnewentrantstotheretailchildrensclothingindustryonBayview
Avenue.Thecostadvantagefavouredbyestablishedretailersandtheproprietaryexclusive
rightstosellcertainproductslimitstheproximityofvendorsforsomebrands.Furthermore,
attainingvaluablerealestatetorentandthelargecapitalrequirementsdissuadenewstores
fromopening.Thisresearchindicatesthattheareacanonlysupportoneretailtweenclothing
storesothekeyistobefirsttomarket.

ThreatofSubstitution
ThreatofSubstitutionishighfortweenbrandnameclothing.Therearemanyknockoffbrands
thatofferbettermarginsforaretailerwithnoswitchingcostsforacustomer.Intheendthe
customerisfacedwithapriceversusperformancetradeoff.Thesedetailsrevealthatsalesmay
beveryunpredictableandthereisstrongevidencetosupportdecliningretailsaleswithdeclined
economicconditions.

CompetitiveRivalry
Overallcompetitionisfierceandoffersalotofvarietytocustomersandreliesonquick
inventoryturnover.Deeppocketsandcontinuouspricecuttinghavehelpedestablishedretailers
weathertheeconomicstorm.MoredetailiscoveredinCompetition.

Competition

GAPKids
Location2574YongeStreet.(Refertomap)

HoursofOperationMondaytoSaturday:10am6pm,Sunday:11am5pm.

YearsinBusinessFifteenyearsatthislocation.

ProductDescriptionGAPKidscarriesfashionable,casualclothingandwardrobeessentials.

CustomerProfileMiddleclassmothersshoppingfortheirchildren.

PricingTops$15$25,Bottoms$25$40.

StrengthsGAPKidshasastrongmarketingpresencethroughprintandtelevisionadvertising.A
moderateonlinepresenceintheformofawebsiteaddstothemarketingmix.Agreatstrength
ofGAPKidsliesintheirdirectmarketingwithanextensivecustomermailinglist.Thestoreis
visuallyattractiveandprovidestheabilitytoshopforarangeofagesbothmaleandfemaleallin
oneplace.Theclothingiswellmadeandfashionable.GAPKidsoffersacustomerloyalty
programintheformofaJeansClubthatrewardsmultiplepurchaseswithafreepairofjeans.
 McLachlan20

WeaknessesGAPKidspresentsgenericclothingthatisthesameineverystoreregardlessof
clientele.Thebusinessmodelallowsforlittlestorecustomizationandanoverallstandardized
feel.Littleleewayisgivenforthosewhowantanindividuallookoruniqueexperience.
Furthermore,GAPclothingismadeinAsia(doesnotappealtobuylocaltrends)andGAPisan
Americancorporation.

OldNavy
Location6LebovicAve.(Refertomap)

HoursofOperationMondaytoSaturday:10am9pm,Sunday:11am6pm.

YearsinBusinessEightyearsatthislocation.

ProductDescriptionOldNavycarriesfashionable,seasonal,clothingandaccessoriesatlow
prices.Eachstoreoffersarangeofclothingfrommenandwomen,tochildrenandinfants,to
pets,allunderoneroof.

CustomerProfileLowtomidIncomeshopperswantingtogetgooddealsonfashionable,
trendyitemsforthemselvesandtheentirefamily.

PricingTops$10$15,Bottoms$15$25.

StrengthsOldNavyoffersfamiliestheabilitytoshopatthesametimeandinonelocation.
Seasonal,trendyclothesareofferedatgoodprices.Thecontinualinventoryupdatesand
bargainpricesencouragemorefrequentpurchases.OldNavystaysintouchwithcustomerswell
throughfrequentsatisfactionsurveyswhichofferadditionaldiscountsonfuturepurchases.
SinceOldNavystoresaretypicalbigboxstorestheyofferampleparking.

WeaknessesThequalityofclothingatOldNavyispoorandhasashortlifespan.AsOldNavyis
abigboxstoreitisnotconvenientlylocatedonornearBayviewAvenue.AswithGAPKids,Old
Navyoffersgenericclothingthatisthesameineverystoreregardlessofclientele.Clothingdoes
notappealtobuylocaltrendsasitismadeinAsiaandOldNavy,aGAPsubsidiary,isan
Americancorporation.

JoeFresh
Location11RedwayRd.(Refertomap).

HoursofOperationMondaytoSaturday:8am10pm,Sunday:8am8pm.

YearsinBusinessSixyears.

ProductDescriptionFashionable,knockoffclothingcombinedwithwardrobeessentialsat
cheapprices.Offeringarangeofclothingfrommenandwomentochildrenandinfants,allin
onelocation.
 McLachlan21

CustomerProfileLowtomidincomeworkingmothers,withlittletime,lookingtocombineall
shoppinginoneouting.

PricingTops$5$12,Bottoms$10$12.

StrengthsJoeFreshisabletoreplicatetrendsquicklyandcheaply.Bysellingtheirclothing
linesincorporatelyownedgrocerystorestheycouplecheapoverheadwithexcellentcustomer
access.Cheappricesappealtomotherswithgrowingchildrenand/orchildrenwhoarehardon
theirclothesandgothroughthemquickly.Beingabletocheaplyreplaceessentialsisconsidered
agreatstrength.Customersareofferedconvenientshoppingandthestoreisrewardedwith
impulsepurchases.JoeFreshhasunbeatablepricesattributedtotheirlowcosts.Thismodel
appealstotimecrunched,workingmothers.

WeaknessesThequalityofJoeFreshsclothingispoor.Thelifespanoftheclothingisshort;
meaningitcannotbehandeddowntoothersiblings.JoesFreshhasnocustomertargetlistor
customerappreciationprograms.

SportingLife
Location2665YongeSt.(Refertomap).

HoursofOperationMondaytoFriday:9:30am9pm,Saturday9am6pm,Sunday10am
6pm.

YearsinBusinessThirtyoneyearsinbusinessattheYongeStreetlocation.

ProductDescriptionOriginallyaskiandsportsequipmentstore,SportingLifenow
concentratesonbrandnameapparelandclothing.ProductlinesincludeNorthFace,Patagonia,
RalphLauren,RoxyandTommyHilfiger.

CustomerProfileMidhighIncomefamilieslookingforbrandnameouterwear,clothingand
apparel.Customersarewillingtopayapremiumforbrandnameclothing.

Pricingbrandnameprices.Topsrangingfrom$30$50,Bottomsrangingfrom$50$250.

StrengthsSportingLifeoffershighqualityclothingandaccessories.Thestoreisdividedinto
brandnamecategoriesaswellasbywomen,menandchildren.Familiesareabletoshopatthe
sametimeinonestore.SportingLifeownstheirownpropertywhichmeanstheyincurnocostly
rentexpenseonlypropertytaxes.

WeaknessesSportingLifedoesnothavemuchselectionforsizes(ages)712.Thestoreislarge
withalotofmerchandisemakingithardtofinditemsunlessyouknowexactlywheretolook.
StaffatSportingLifegenerallyonlyworkintheequipmentdepartments,sothereisalackof
customerservice.Nocustomerloyaltyprogramisoffered,noristhereacustomerrelationship
 McLachlan22

programordatabase.Anotherdownfallistheminimalparking,whichoverloadsonweekends
andinbusyseasons.

OnlineRetailers(eBay,LandsEnd,LLBean)
HoursofOperationOpenatalltimes.

ProductDescriptionAnentirerange:fromessentialstopremiumbrandnameproducts
ranginginpricefromcheaptopremium.

CustomerProfileTimecrunchedmothersandmotherslookingfordeals.

PricingTops$5$100,Bottoms$5$250.

StrengthsOnlinestoresoffertheabilitytoshopatanytimefromanywhere.Consumersare
abletosearchforbargainsandcomparisonshopallfromthecomfortablelocationoftheir
home.Onlineshoppingmakesiteasierforparentstoshopwiththeirchildrensinceitcanbe
scheduledintoanyfamilyagenda.

WeaknessesOnlinestoresmustshiptheirorderstocustomers.Shippingincursanadditional
feeaswellasatimedelaybetweenpurchaseandacquisition.Additionally,returnsincur
additionalshippingcosts.Finally,onlineshoppingdoesnotpermitcustomerstheabilitytotryan
itemontoensurefitandlikeability.

Map

Distribution Situation
Distributorsarepowerfulintheretailindustry.InCanadathereareusuallyexclusivedistributionrights
whichplacesallthecontrolinthehandsofthedistributor.AsdiscussedinthePowerofSupplierssection
 McLachlan23

therearewaystoimprovethissituationbutthebusinessplanmustaddressthisissueanddevelopa
strategyfordealingwithsuppliers.

Opportunities and Issues Analysis

Theopportunityliesintheunsatisfieddemandintheareaforaspecialtytweenapparelstore.

Thethreatsare:

Abigboxcomplexenteringtheareawithlargestoresandampleparking.
Notobtainingfirstmoveradvantage..
Retaliationintheformofpricecuttingbylarger,moreestablishedstores.
Inabilitytokeepupwithfashiontrends.
Verticalintegrationbysuppliers.

Thefollowingissuesmustbeaddressedinthemarketingplan:

1. Whenandhowshouldthestorebelaunched?
2. Howwillsalesbedriven?
3. Whatareinnovativeandcosteffectivewaystodifferentiatethestorefromitscompetitors?

Objectives

Financial
1 2 3
NetSales $113850 $182850 $235750
Est.Profit $43432.87 $23373.18 $4359.60

Marketing
InordertolaunchthestoreandgrowsalesthefollowingSMARTgoalsmustbeattained:

1. Increaseawarenessofstoreanditsservicestotargetmarketby100%bySeptember1st2010.
Thiswillbemeasurethroughafollowupinternetsurvey.
2. Growsalesto$6900(exclusiveoftaxes)byendofmonthone,$16100byendofmonth5and
haveGrosssalesof$98773foryearone.Thiswillbemeasuredthroughpointofsale(POS)data.
3. Breakevenbytheendofyearthree.
4. Acquire50clientfilesbymonththree,100clientfilesbymonthfiveand300clientfilesinyear
one.ThiswillbemeasuredbytheCustomerRelationshipMonitoring(CRM)program.
 McLachlan24

Marketing Strategy
Ananalysisoftheexternalfactorsandtheoverallcompetitiveenvironmentindicatesastrongbusiness
strategyforthestoreisnecessary.Anoverallstrategywillbethebasisonwhichtheoperationofthe
storewillberun:inclusiveofmarketingplan,buyingeffortsandinstorepromotions.Keysourcesof
differentiationmustbeidentifiedandexploitedinthemarketingplaninordertoreachtheobjectives
setforth.Thesekeysourcesare:

Toofferuniquebrands.
Promotequalityoverquantity.
Offerunparalleledandpersonalcustomerservice.
Provideajeanloyaltyprogramtoencouragerepeatpurchases.
Makecustomorderingavailable.
Differentiatethestorewithrelationshipbuildingprogramsandevents.

Thefollowingmarketingplanwillcoverthefirstthreeyearsofbusinesswithroomformodificationand
continuousimprovementquarterlyforyearoneandannuallythereafter.

ProductsandServices

Products

Theproductsofferedatthestorewillbeclothingandrelatedaccessoriesforgirlsandboysagedfrom
seventotwelveyearsofage.Brandsofferedatthestorewillbefashionable,casualandsemiexclusive
tothestore.ExamplescanbefoundintheOperationssection.

Services

Inordertocreatedifferentiation,uniquecourtesyserviceswillbeofferedbythestore.Theseservices
are:

1. Clientmailingstoinformclientsofnewproductlaunchesandsales.
2. Specialorderingofitems.
3. Aregistryforwishlistitemsthatcanbeselectedbyclientsandkeptonfileatthe
store.Thislistcanbeaccessedbythosebuyingpresentsfortheclientandwillbe
updatedtoreflectpurchases.
4. Clientholdforuptofivedaysfordesireditem(s).

 McLachlan25

Inadditiontothesecomplementaryservicesthereisoneservicethatcarriesanominalfee:

HostingFashionShootBirthdaypartieswhereVIPclientscanbringinfriendstotryonclothing
andbephotographedlikeupandcomingfashionistas.Includedinthepriceoftheservicewillbe
food,theuseofthefacility,makeupartists,hairstylistandphotographer.

Theseserviceswilldistinguishthestorefromitscompetitorsandserveasaplatformtobuilda
reputationforuniquecustomerservice.

Positioning

Auniqueandfriendlystorewithindividualcustomerservice,aimedatprovidingtheup&comingyouth
ofSouthBayviewwithfashionsasindividualastheyare.Inspiredbythenewesttrends,andcomforted
byoldfavourites,thereisatreasureineverytrip.

Targetmarket
Fromthemarketresearchcompleted(SeeAppendixA)thefollowingtargetmarkethasbeencreated.
Uniquetoachildrensclothingstoreisthedualtargetgroups:childrenwhowillweartheclothingand
parentswhowillpurchasetheclothing.Bothmustbeaddressed

Agerange

Thetargetagegroupwearingtheclothingis7to12yearoldboysandgirls.

Thetargetpurchasersaremothersintheirlatethirtiesthroughforties.

Incomerange

Combinedfamilyincome$150000to$200000+.

Gender

Themainendusertargetwillbe30%boysand70%girls.

Themainpurchaserswillbewomen.

Locationboundaries

LocalLeasideandDavisvilleVillageresidentsofNorthToronto.

Averagepurchase

$50$100.Theaveragepurchaseisestimatedat$75.

Frequencyofpurchase

Bimonthly.
 McLachlan26

Psychographics

ParentsandchildrenintheLeasideareasareverytrendconsciousandintouchwithwhatothersinthe
communityarebuyingandwearing.Tweensareinfluencedbywhattheirfriendsarewearingtoschool,
whileadultsareconsciousofpricebutwanttoappearasthoughtheytoocanaffordtokeepupwiththe
trends.Currenttrendsfortweensare:

JonasBrothers
MileyCyrus
Vampires
LoveandPeacerelatedclothing
Videogames
SocialNetworking
TextMessaging

Theproductmustfillthebasicneedofclothingaswellasoneoftwopsychologicalneed:A)tofitinorB)
toexertindividuality.Theagegrouponwhichthestorecatersexperiencesasignificantpowershiftin
whochoosestheclothingwornbythetween.Theyoungerdemographicarestillhappytohavetheir
parents(mainlymother)chooseandbuytheirclothing.Clothingisboughtwhenneededorasan
impulseonthepartofthemother.Asthechildgetsolderthisbehaviourchangestothechildwanting
moreinputintowhattheywear.Themarketingdifficultyliesinthefactthatthisspecificageisdifferent
foreachindividual.Withmanyopinionsandpeopletoconsider,thepsychographicsofeach
child/parentduoareveryimportanttounderstandandthismustbeutilizedinthemarketing
communicationplan.

Pricing
Clothingwillhaveanoverallaveragemarkupof120%.Thiswilldifferdependingonthebrandanditem.
Topswillbefrom$20$40,pantsfrom$40$60,anddressesfrom$40$60.

Accessorieswillhaveamarkupof200%.

MarketingCommunications
SalesStaff

Thesalesstaffisresponsibleforgeneratingallinternalsales.Thesalesstaffwillbetrainedbytheowner
toensuretheimportanceofcustomerserviceiscomprehended.Responsibilitiesofthesalesstaffare:

Maintaininginventorylevelsandrestockingasneeded.
Keepingrecordofwhatitemshavebeensoldusingpointofsale(POS)programming.
Balancingthecashflowandcreditcardreceiptsdaily.
Keepingthestorecleanandorganized.
Provideinputintothevisualaestheticsofthestore.
Providinginputintohotitemsandreordering.
 McLachlan27

Promotingthejeanloyaltyprogram.
Promotingthevalueaddedservicesavailable.
PromotingandbuildingtheCRMdatabasewithrelevant,uptodateinformation.

Storeimage

Therearefourfactorsthatcomeintoplaywhenconsideringstoreimage.

1. Storedesignandstorename

Anameconjuresupanimmediatereactionandemotionalattachment.Thestorenamemustbe
memorableandsupporttheoverallvision.Inordertosupportthevision,thenameneedstobe
short,catchyandfitwiththevocabularyoftheenduser.Inputwastakenfrompotentialcustomers
andmarketresearchwascompletedonthetopeightnames(AppendixB).Thetopthreenames
werepresentedtoasmallfocusgroup(fivetweens)whovotedunanimouslyforthefinalname.The
namechosenwastwixt.

Thestorefrontisthefirstvisualimpressionofthebrandandmustcongruentwiththepositioning
statementinthemindofthecustomer.Signagewillbeconsistentwiththevisualcommunication
insidethestoreandwithbusinesscardsandpromotionalmaterial.Sincethebuildingislongand
narrowthestoresignwillcovertheentirefrontofthebuildingintheformofafluorescentsignsoas
tobeseeninbothdayandnight(ImageA).

ImageA:StorefrontSign

twixt

Theoverallinteriorwillbebrightandwelcomingwithcontemporaryoverheadlightsaswellasspot
lightingondisplaysanddisplayshelves,aswellasineachchangeroom.Thestoremustbekept
cleanandtidyatalltimes.

Trendy,tweenmusicwillbeplayingthroughoverheadspeakersatalowtomidvolumesoasnotto
overpowerconversationbuttoaddtotheoverallambianceofthestore.

 McLachlan28

2. VisualCommunication

Inordertoconveyafashionableandtrendymoodeachaspectofthestoremustcomplimentthe
other.Allsignagewillbebrandedandwillbeconsistentwiththestorelogo(ImageB).Productswill
beprominentlydisplayedonshelvesandmannequinswillbestyledtoreflectseasonaltrends.In
additiontothemannequinstherewillbelarge,postersizedphotographsdisplayedonthewalls
(refertoSalesPromotion#4)ofmodelswearingtheseasonalfashionsavailable.Allmerchandisewill
belabelledwithbrandedpricetagsandallcommunicationwillbedoneonstoreletterheadwhich
includesthestorelogo.

ImageB:StoreLogo

twixt

3. Storeplanning

Whenpreparingaplannogramforaretailspacethoughtmustbegiventoamountofspaceallocated
toalldepartments,whattheoveralllayoutshouldlooklikeandthedesiredtrafficflowofthe
customers.Additionally,ithasbeenreportedthatemployeetheftandshoplifting combined
accountforthelargestsourceofpropertycrimecommittedannuallyinNorthAmerica(Retail
Council,2008)).Theeasiestwaytodiscouragetheftinastoreisbytakingawayopportunitiesto
steal.Alittlethoughtintothestore'slayoutanddesigncanpreventtheftbeforealossoccurs.

ImageCprovidesanillustrationoftheplannogram.Directlyinsidethedoortherewillbeanarea
voidofproductdisplay.Thisareawillserveasadecompressionzonewhichwillallowcustomers
toenterthestoreandadjusttotheenvironment.Thedecompressionzonewillwelcomethe
customersintothestoreandallowthemtogetanoverallvisualwhiletheymaketheirfirst
judgement.Sincefirstjudgementsareoftentheonesthatstick,thisareaisveryimportant.

Importanttoallretailclothingstores,isthechangeroomspaceprovidedtocustomers.Therewillbe
threethemedchangeroomsinthestore.ChangeroomonewillhaveMileyCyrus/HannahMontana
theme,ChangeroomtwowillbedecoratedwithSydneyCrosbyparaphernaliaandChangeroom
threewillbeadornedwithJonasBrothersgear.Theywillbelocatedattherearofthestorebehind
theredcarpetareawherecustomerscanshowofftheiroutfitstothoseshoppingwiththem.The
roomswillbebigenoughforachildandaparent.Roomonewillbebigenoughtofitthreepeoplein
ordertoaccommodatemultipleshoppingchildrenoryoungerchildrenaccompanyingoldersiblings
andparentsontheirexcursion.Also,attherearofthestorewillbeasmallplayareaforyoung
 McLachlan29

childrenwhomaybeaccompanyingtheirparentsandoldersiblings.Thisareawillhousetoys,video
gamesandatelevision.

Thefinalconsiderationistheoverallfloorplan.Sincethevisionofthestoreisforyouthclothing
withatrendyandfunvibethestorelayoutwillbeafreeflowingone,asopposedtoatraditional
gridlayout.However,sincemostpeoplereactpositivelytobothbalanceandsymmetry,thesemust
becontemplatedaswell.ImageCoutlinesthestoreplannogram.Theadvantageofafreeflowing
storeplanisthatitallowsforbrowsingfreely,itincreasesimpulsebuying,anditaffordsvisual
appeal.

 McLachlan30

ImageC:Storeplannogram

1

2 3 Playarea

RedCarpet

CashRegisterand
display

DisplayWindow
 McLachlan31

4. Merchandising.

Merchandisingwillbeintheformofshelving,hangingracksandstandfolding.When
consideringmerchandisingpsychologicalpreferencessuchasimage,sightlinesandcolour
blockingmustbeconsidered.Theplannogramillustratestheoverallmerchandisingplan.
Popularitemswillbedisplayedateyelevelwithextrastockorlargersizeshousedhigherup
onshelves.Essentialswillbefoldedontables.Merchandisewillbeseparatedbyboysand
girlsandthenseparatedintobrandclusters.Theonlyareatonotbeseparatedwillbethe
jeanbar,anareaofshelvingaccessedbystaffthathostsallthejeans.Asampleofeach
pairofjeanswillbedisplayedononeoftwoexclusivejeanracksthatallowscustomersto
contrastandcompareallpairsavailablebeforetryingasomeon.Theoverallaimof
merchandisingistoprovideappealingvisualcuesthatdrawsthecustomertotheproduct
anddrivessales.Theflowofthestorewillushercustomerstowardsthechangeroomswith
accesstoessentialsalongtheway.

Directmarketing

DirectMarketingwillbetargetedtopreviousclientsbyusingtheCRMprogram.TheCRMprogramwill
bepositionedasanidentitycardthatkeepsthestoreandpeoplebuyingfortheclientuptodateon
theirwardrobesandsizes.CustomersregisteredtotheprogramwillbecalledVIPclients.Datastored
intheCRMprogramwillinclude:

Name,Birthdate,Gender
Addresses:home,email
Namesofparents,siblings,bestfriends
Sizes:tops,bottoms,dresses,shoes
Favouritecolours
Favouritedesigners
Hobbies.

Thisinformationwillbeusedtosendoutbirthdaycardswith10%offcoupons,sendtargetedemails
whentherearerelevantnewarrivals,andemailtheentiredatabasewhentherearesales.Theaimisto
keepVIPclientsthefirsttoknowofstoreoccurrences.

Salespromotion

Thefocuswillbeonfivetypesofsalespromotions:

1. JeanClub

Thejeanclubisaloyaltyprogramdesignedtoencouragerepeatpurchasesofjeans.Theprogram
willbeavailabletoallVIPclients.Foreveryfivepairsofjeansboughtthecustomergetsonepair(at
 McLachlan32

thelowestpricepurchased)free.Clientswillgetabusinesscardstampedforeverypurchaseanda
recordwillbekeptonfileatthestore.

2. Commission

Inadditiontoabasesalarysalesrepresentativeswillbecommissionedonwhattheysell.Therate
willbe5%forallregularpriceditems.Nocommissionwillbegiventosaleitemsortoalready
discounteditems

3. Registry

Customerscanregisterforupcomingspecialeventssuchasbarandbahmitzvahs,birthdays,
graduationandChristmas.ThisprogramwillbeavailabletoallVIPclients.Itemscanbepreselected
andrecordedonfiletomakebuyinggiftsforthesepeopleeasier.Potentialgiftgiversneedonlyto
enterthestoreandaskfortheregistereditemswhenselectinggifts.

4. ModelContest

Thewallartanddisplaywindowimageswillbeintheformofalargeposterdisplayingseasonal
merchandise.ThemodelsforthisprintadvertisementwillbeselectedrandomlyfromtheVIP
databaseandcustomerswillbegiventheopportunitytoposefordisplay.Threetimesayearthe
pictureswillbeupdatedandthewinnerwillreceivetheirposterintheend,aswellas15%offaone
timepurchase.

5. BirthdayClub

AllVIPclientswillbeeligiblefor15%offallitemsontheiractualbirthday.

PublicRelations(PR)

Thefocusinthefirstyearwillbeonfourmeansofpublicrelations.Theseconsistof:

1. SNAPNewspaper

SNAPisalocalmonthlynewspaperaimedatcoveringlocalevents.SNAPcoversallstoreopeningsin
NorthTorontoandincludesanarticleonthenewbusinessinitspublication.Itisprovidedfreeof
chargeandisavailableinthemajorityofretailstoresinNorthToronto.Itsdistributionreaches2000
people.

2. GrandOpening

ThestorewillbelaunchedAugust2010withaGrandOpening.Thegrandopeningwillcorrespond
withbacktoschoolshoppinginordertoattractcustomersatthebeginningofanewschoolyear
whenwardrobesarebeingreplenished.AGrandOpeningpartywillbethrownfortheofficial
openingoftwixt.Suppliers,localbusinesses,mediaandpotentialcustomerswillbeinvitedtothe
event.ThefocuswillbeontheVIPprogram.Tenpercentoffcouponswillbegivenatthisexclusive
 McLachlan33

event.Pressreleaseswillbeprovidedtoallmediapersonnel.Brandedbagswithfreegiveaways
fromotherlocalbusinesseswillbedistributedtoallattendees.

3. WordofMouth

ThemajorityofPRwillcomefromwordofmouth.Ensuringunsurpassedcustomerserviceand
tailoringproductstomeettheneedsofpotentialcustomerswillbeparamountinensuringpositive
wordofmouth.

4. CharityFashionShow

ClothingandstylingassistancewillbeprovidedtoRolfRoadSchoolsannualfashioncharityshow.
Thisshowattractstwohundredpeopleallofwhofallinthetargetaudience.Entrancetotheevent
willbeintheformofadonationtoapreexistingcharitytheschoolsupports.

5. OnlineShopping

Afteryeartwothecompanywebsitewillbetransformedintoaneshopmodeliffurthermarket
researchindicates.Thestorewillallowcustomers:

Theabilitytobuyinventoryfromhometobedeliveredtotheirhome.
Theabilitytoreserveinstoreitems(forVIPclients).
Theuseofavirtualchangeroomtoplanoutfitsbeforeshopping.

Networking

Theriseofsocialnetworking,especiallyinyouthandteensnecessitatesthattwixthaveanonline
presence.Inordertokeepcustomersuptodateafacebookgroupandtwitterpagewillbeopenedand
updatedregularly.Inadditiontothesesocialoutlets,theownerwillbecomeamemberofaBusiness
NetworkingInternational(BNI)groupinordertostayuptodateonsmallbusinesstrends.Regular
meetingswithothervendorsonBayviewwillbesetuptodiscussandlearnbestbusinesspractices.

Advertising

Inadditiontothegrandopeningadvertisingwillincorporate:

Storepaperbagsandreusablebags
Awebsitetopromotethestoreslocationvision,hoursandbrandsoffered
Storelistingonsuppliersandproductswebsites.

 McLachlan34

MarketResearch
Measurement Description AnnualCost
OnlineSurvey Followuptoinitial NoCostAssociated
survey
Measurementofproduct
needs,customerservice
andoverallsatisfaction
Gageinterestand
feasibilityofeshop.
SilentShopper Monthlyevaluationof $360
employeesandservicesby
hiredprofessional
SalesData Monthlyanalysisofsales IncludedinPointofSales
figuresbrokendownbysales Software
associate,brand,dayand
timeofday

ActionPlan
Who What When Cost
SalesStaff Training July2010 $240
Displayandrestock Ongoing Nocost
merchandise
PromoteJeanClub Ongoing Nocost
PromoteVIP Ongoing Nocost
program
Keepstoreclean Ongoing Nocost
andvisually
appealing
Openandclose Ongoing Approximately5%
store ofsales
Sellmerchandise Ongoing Nocost
andkeepPOS
records

BuildCRMdatabase Ongoing Nocost
Owner JoinBNIgroup Annually $700
Developmarketing Inprogress Nocost
plan
Planmonitoring Monthly Nocost
Attendtradeshows Inprogress $8000
Buymerchandise Ongoing variable
Trainsalesstaff July2010 $240
PlanGrandOpening July2010 $500
MeetwithSNAP August2010 Nocost
 McLachlan35

magazine
Hiresilentshoppers September2010 $30/month
Launchonline September2010 Nocost
survey
Tracksales Monthly Nocost
Paycommission Monthly Nocost
ProgrammingCoop DevelopCRM May2010August Nocost
Student software 2010
Developpointof May2010August Nocost
sale(POS)software 2010
Webdeveloper Developandlaunch July2010 $500
website
Developonline July2012 500
store
Photographer Selectmodels July,November, Nocost
February
Takemodelphotos July,November, Nocost
February
Developposters $450
RolfRoadPublicSchool Planandhostyouth March2011,2012 Nocost
clothingfashion
show
GraphicDesignStudent Developlogo Inprogress Nocost
Developbranded Nocost
material

FinancialImpact
Separatefinanceshavebeenpreparedforeachyear.
 McLachlan36

FINANCIALSJULY2010AUGUST2011
Debit Credit
EST.GROSSSALES 113850

FixedCosts
Sales
freemerchandise 1,300
misc.(training,etc.) 240
1,540
DirectMarketing
birthdayclub 60
businesscards 50
CRMquestionnaires 40
150
MarketResearch
silentshoppers 360
360
PublicRelations
grandopening 500
500
Networking
BNIgroup 700
700
Advertising
website 500
coupons 200
internalsignage 100
merchandisetags 20
bags 200
photos 450
1470

Total 4720
 McLachlan37

FINANCIALSAUGUST2011AUGUST2012
Debit Credit
EST.GROSSSALES 182850

FixedCosts
Sales
freemerchandise 2,500
misc.(lunches,training,etc.) 240
2,740
DirectMarketing
birthdayclub 120
businesscards 50
CRMquestionnaires 40
210
MarketResearch
silentshoppers 120
120
PublicRelations

0
Networking
BNIgroup 700
700
Advertising
website 500
coupons 500
internalsignage 100
merchandisetags 20
bags 200
photos 450
1770

Total 5540

 McLachlan38

FINANCIALSAUGUST2012AUGUST2013
Debit Credit
EST.GROSSSALES 258750

FixedCosts
Sales
freemerchandise 2,500
misc.(lunches,training,etc.) 240
2,740
DirectMarketing
birthdayclub 150
businesscards 0
CRMquestionnaires 20
170
MarketResearch
silentshoppers 120
120
PublicRelations

0
Networking
BNIgroup 700
700
Advertising
website 0
coupons 1000
internalsignage 100
merchandisetags 20
bags 200
photos 450
1770

Total 5500

ControlsandContingencies
1. Ifsalesarenottrackingat$20000forthefirstquarterof2010thenmarketingmoneyallocated
tothejeanclubwillbeusedtorentaboothattheAnnualChildrensTrunkShow.Thisevent
parallelsSpurtstargetmarketandprovidesgreatexposuretomanycustomers.Tenpercentoff
couponswillbegivenoutattheshowtoencouragepatronstovisitthestore.
2. IftheuseoftheRegistryserviceisnotattwentyfivepercentofVIPcustomersbyDecember10th
2010,couponswillbemailedouttoallVIPmembersandtheirfamiliesforuseonRegistryitems.
 McLachlan39

3. Ifinventoryturnoverislessthanninetydaysonseasonalwearandonehundredandtwenty
daysonessentials,arrangementswillbemadetoreturnexcesstodistributorsandchangeswill
bemadetoquartertwobuying.
4. Iffeedbackfromsilentshoppersisnegativeadditionaltrainingwillbedonetoimprove
customerserviceandproductlineswillbereassessed.Alleffortswillbemadetoupholdthe
positioningstatementandvisionof twixt.
5. IfCRMdatabasedoesnothave100clientsbytheendofthequarterone2010,theincentivesfor
membershipwillbereassessedandimproved.Qualityofpersonalizedservicedependson
personalinformationandrelationshipbuildingwithcustomersandeveryeffortmustbemade
toobtainqualityfacts.
6. Ifmarketresearchin2010doesnotindicatefurtherprofitsfromthelaunchofanonlinestore
thenthewebsitewillnotbeadaptedtoaneshopformat.

Merchandising

Tradeshows
Feb. Mar. June Aug. Sept.
1418:LasVegas 79:NewYorkCity 68:Chicago 1618:LasVegas 2528:Toronto
28Mar2:Toronto 2025:Toronto 2022:NewYorkCity
2224:Toronto

Productlines
Selectionsfromthesedesignerswillbecarried:

T2Love FuzzyWuzzy Roxy/Quicksilver

RachelWeissman MissMe Kingsley
Halabaloo Oilily CharlieRocket
AlphaIndustries Saurette Munster
Diesel Splendid StinkyKids
EllaMoss Submarine Norton
FlowersbyZoe HavenGirl

Suppliers
Inordertoobtainadvantageousmarginsonallproductssoldanoverallbuyingstrategymustbe
followed.Yearonewillrequiresupplierstobeobtainedfromthevarioustradeshowsaswellasfound
throughtheCanadianAssociationofWholesaleSalesrepresentatives(CAWS).Inordertomaintain
marginsthefollowingstrategyhasbeenputinplace:

Negotiatepricesandbulkbuyingtokeepperunitpriceslow.
Negotiateaccountspayableanddonotbuyonlessthan60dayterm.
NegotiateproductexclusivityforNorthToronto.
Negotiatestorenameadvertisingonwholesalerswebsite.
 McLachlan40

Ensureproductreturnsareavailableifproductdoesnotsell.
Maintainopencommunicationwithwholesalers.

Operations

BusinessRegistrationandPermits
SeveralpermitsarerequiredandmustbeobtainedfromtheCityofTorontoorGovernmentofOntario
beforethestoreopening.Thecostofeachitemisincludedinbracketsandfiguresintotheopening
costs.Thepermitsare:

Signpermit($209.42)

Siteplan(2329.58)

Buildingpermit($7380)

Vendorpermit($0)

MasterBusinessLicence($60)

ImportPermit($50)

BusinessRegistration($60)

HSTRegistration($0)

Taxes
Thenewharmonizedsalestax(HST)mustbecollectedandsubmittedquarterly.

PackagingandLabelling
Allmerchandisewillbetaggedwithastorelogodisplayingthepriceandsizeoftheitem.Originalbrand
logosandtagswillnotberemovedfromtheitem.Subsequenttoapurchasethemerchandisewillbe
professionallyfoldedandwrappedintissuebythesalesassociate.

InventoryControl
Inventorycontrolwillbedoneonce/week.EveryMondaymorningtheinventoryinthecomputerwillbe
reconciledwiththeinventoryontheshelvesandinstorage.Discrepancieswillbenotedandcountedas
BadDebt.Foundmerchandisewillcreditthebaddebtaccount.

QualityControl
Allmerchandisewillbehandcheckeduponarrivalfordamagedmaterialororderdiscrepancies.Quality
controlwillbedonebytheowneroramanagerandmustbedonewithintwentyfourhoursofthe
arrivalofthemerchandise.
 McLachlan41

ClientRelationshipManagement(CRM)System
AsoftwareprogramwillbedevelopedbyaGeorgeBrowninternstudenttobuildadatabaseof
customerinformation.Thissystemwillenabletwixt tostoreinformationonitsVIPclientbase.The
systemwillbesortedaccordingtonamebutallfileswillbeabletobeaccessedbyphonenumberor
birthdateaswell.

PointofSales(POS)System
AsoftwareprogramtotrackallsaleswillbedevelopedbyaGeorgeBrowninternstudent.Inadditionto
actingasaninvoicingsystemthePOSsystemwillautomaticallyupdatetheinventorydatabase.ThePOS
systemwillalsoallowuserstoviewpreviouspurchasesandpullupoldinvoices.

Human Resources (HR)

Strategy
TheHRstrategywillbeputinplacetocomplimenttheMarketingCommunicationsPlan.Inorderto
complimentthebusinessknowledgeofthebusinessownerparttimeemployeesmusthavea
backgroundinfashion.InadditiontothepaidstaffstudentsfromGeorgeBrownCollegewillbehiredon
aninternbasisinordertoattainthefullcomplementofknowledgethebusinesswillneedtosurvive.
Internstudentswillincurnoadditionalexpense.
 McLachlan42

RolesandResponsibilities
JoinBNIgroup
Owner Developmarketingplan
Planmonitoring
Attendtradeshows
Buymerchandise
Trainsalesstaff
PlanGrandOpening
MeetwithSNAPmagazine
Hiresilentshoppers
Launchonlinesurvey
Tracksales
Maintaininginventorylevelsandrestockingasneeded.
ParttimeEmployees
Keepingrecordofwhatitemshavebeensoldusingpointofsale(POS)
programming.
Balancingthecashflowandcreditcardreceiptsdaily.
Keepingthestorecleanandorganized.
Provideinputintothevisualaestheticsofthestore.
Providinginputintohotitemsandreordering.
Promotingthejeanloyaltyprogram.
Promotingthevalueaddedservicesavailable.
PromotingandbuildingtheCRMdatabasewithrelevant,uptodate
information.
Sameasabove
FashionIntern
Developlogo
GraphicDesignIntern Developbrandedmaterial
DevelopPOSsoftware
SoftwareDesignIntern
DevelopCRMsoftware

 McLachlan43

Financial Statements
GeneralFinancialAssumptionsandConsiderations:

1. Financing:Afiveyear$50000loanhasbeensecuredataninterestrateof3%.Paymentswillbe
mademonthlyintheamountof$898.43whichis$833.33principleand$25interest,andare
accountedforintheincomestatementunderRepaymentExpenses.
2. SalesAssumptions:ArebasedonsimilarstoresincomparableareasofToronto(AppendixC
C.1).SalesareinclusiveofHarmonizedSalesTax(HST).
3. COGS:Thecostofgoodssoldisat40%ofsales.Aninventorybreakdowncanbefoundin
AppendixD
4. OfficeExpenses:Includerent,phone,internet,utilities,suppliesandmaintenance.
5. Amortization:Afixedassetdepreciationschedule(FADS)canbefoundinAppendixE.
6. SalariesandCommissions:Minimumwageof$10.25/hourwillbepaidfortotalmanhoursof35
hours/week.Noemployeeswillqualifyforbenefitsorvacation.Inlieuofvacationemployees
willbepaid4%oftheirsalaryannually.A5%salescommissionwillbepaidonsales(exclusiveof
taxes),(SeeAppendixF).Commissionswillnotbepaidforthefirstquarterin2010.
7. BankCommissions:50%oftransactionswillbecompletedbycreditcardatacostof2%.40%of
transactionswillbecompletedbydebitcardatacostof$0.10/transaction.Thisfeewillbe
predictedbasedonanaveragestorepurchasevalueof$75.Aschedulecanbefoundin
AppendixG.
8. TradeShows:Inclusiveinthiscostaretravel,mealsandentrancefees.
9. Businesstaxes:Are15%ofgrosssalesandwillbepaidquarterly.

Goals

Sales

MONTHLYSALES$(inclusiveoftaxes)
JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
2010 6900 6900 6900 10350 16100
2011 9200 6900 9200 11500 11500 9200 9200 18400 18400 16100 16100 23000
2012 11500 9200 11500 13800 14950 14950 14950 23000 23000 19550 21850 31050
2013 14950 10350 14950 18400 18400 20700 19550

Shortterm
1. Growsalesto$6900(exclusiveoftaxes)byendofmonthone,$16100byendofmonthfiveand
haveGrosssalesof$98773foryearone.

Longterm
1. Basedonsalesforecast:Breakevenbyyearthree.
 McLachlan44

2. Surpasssalesforecasttoensurethereisnocashshortageinyearthreeandnoadditional
financingisneeded.

3. Achievemonthlysalesof$20000/month.

4. Paybackborrowedfundsbyyearfive.

Start-up Costs
Thebiggestcostsassociatedwithopeningthestoreareinventoryandleaseimprovementsandthe
lease.Theleaseandleaseimprovementsaresunkcostshowever,unsoldinventorycanbereturnedto
thedistributerforarefund.

AssumptionsandConsiderations:

1. ThecostsforbusinesslicencesandpermitshavebeentakenfromtheCityofToronto(Cityof
Toronto,2010).

2. QuarterOnemarketingexpenseshavebeenincludedinstartupcosts.
 McLachlan45

STARTUPBUDGET
BUSINESSLICENSESANDPERMITS
Si gnPermi t 209.47
Bui l di ngPermi ta ndDra wi ngs 7380
Bus i nes s Li cens e 60
El ectri ca l Ins pecti on 150
ImportPermi t 60
7859.47
OFFICESUPPLIES
500
RENT
fi rs t/l a s t 9000
UTILITIES
Tel ephone 100
Hydro 50
Wa ter 50
Ca bl e 100
300
RENNOVATIONSANDMATERIALS
ma teri a l s 3000
fi xtures 1500
l a bour 5500
10000
INVENTORY
7200
INSURANCE
6000
OFFICEEQUIPMENT
Photocopi er/Fa x 200
Tel ephone 100
Computer 1000
Shredder 40
Couch 300
Cha i rs 300
Ma nnequi ns 100
2040
MARKETING
Gra ndOpeni ng 500
Mercha ndi s eTa gs 650
Promoti ona l Ma teri a l 650
1800
TOTAL 44699.47

 McLachlan46

Balance sheet
Thebalancesheetispreparedforoneoperatingcycle.Theassetslistedonlyincludetheinventorythatis
ownedbytwixt atthedateoftheBalanceSheetpreparation(August1).Inventoryvaluationisbased
onthepricepaidforthemerchandiseandnottheactualpriceitwillbesoldfor.Theinventoryisbased
onaveragecostassumption.

Thebalancesheetspresentedbelowarestudiedmoreindepthintheformofratiosandleveragesinthe
nextsection.

AUG.2010
ASSETS LIABILITIES
CurrentAssets CurrentLiabilities
Cash 55300.53 AccountsPayable 7200
AccountsReceivable Accruals
Inventories 7200 LineofCredit
Longtermdebtdue
TotalCurrentAssets 62500.53 within1year 10781.16
GrossFixedAssets TotalCurrentLiabilities 17981.16
LandandBuildings 10000 LongtermDebt
Equipment 1440 LongtermDebt 38919.1
FurnitureandFixtures 700 Longtermleases 261000
PrepaidExpenses 26459.47 TotalLongtermDebt 299919.1
Other(lease) 270000 ShareholdersEquity
TotalGrossFixedAsse 308599.5 RetainedEarnings 50000
Less:Ammortization 3200 Dividends
TotallShareholders
NetFixedAssets 305399.47 Equity 50000

TotalAssets 367900 TotalLiabilitiesandShareholdersEq 367900.3

 McLachlan47

AUG.2011
ASSETS LIABILITIES
CurrentAssets CurrentLiabilities
Cash 0 AccountsPayable 18494.45
AccountsReceivable 5347.5 Accruals 1617.75
Inventories 21866.67 LineofCredit
Longtermdebtdue
TotalCurrentAssets 27214.17 within1year 10781.16
GrossFixedAssets TotalCurrentLiabilities 30893.36
LandandBuildings 8000 LongtermDebt
Equipment 240 LongtermDebt 28137.94
FurnitureandFixture 560 Longtermleases 207000
PrepaidExpenses 3466.67 TotalLongtermDebt 235137.9
Other(lease) 216000 ShareholdersEquity
TotalGrossFixedAss 228266.7 RetainedEarnings
Less:Ammortization 2200 Dividends
NetFixedAssets 222600 TotallShareholdersEquity

TotalAssets 266031 TotalLiabilitiesandShareholdersEq 266031.3

AUG.2012
ASSETS LIABILITIES
CurrentAssets CurrentLiabilities
Cash 0 AccountsPayable 22957.47
AccountsReceivable 7475 Accruals 9287.64
Inventories 33200 LineofCredit 4091.95
Longtermdebtduewithin
TotalCurrentAssets 40675 1year 10781.16
GrossFixedAssets TotalCurrentLiabilities 47118.22
LandandBuildings 6000 LongtermDebt
Equipment 180 LongtermDebt 17356.78
FurnitureandFixtures 420 Longtermleases 153000
PrepaidExpenses 10400 TotalLongtermDebt 170356.8
Other(lease) 162000 ShareholdersEquity
TotalGrossFixedAsse 179000 RetainedEarnings
Less:Ammortization 2200 Dividends
NetFixedAssets 176800 TotallShareholdersEquity 0

TotalAssets 217475 TotalLiabilitiesandShareholdersEqui 217475

 McLachlan48

Financial Ratios and Leverages

Inordertogetabetterpictureofwhatthefinancialspreadsheetsillustrateratiosandleverageshave
beenstudied;specifically:debt/equityratio,currentratio,quickratio,inventoryturnoverandaverage
ageofinventory.Foreachcalculationallthreeyearsofforecastingwillbeused.

TABLE1

Debt/EquityRatio Year1 Year2 Year3

(%) 86.4 99 1

Thedebt/equityratioindicatestherelianceondebtforfinancing.Thehigherthepercentagemeansthe
riskierthebusinessendeavourbecauseofthehighfinancialleverage.Yearoneindicatesthat86.4%of
theassetshavebeenfinancedbydebt.Inthiscasetheremaining14%offinancingcomesfromthe
owner.Thisratiogetsworseinyeartwoandyearthreeasthebusinessreliesheavilyonfinancial
leveragetosupportinvestmentinassetsneededtosustainthebusiness(namelyinventoryandleasing).
Thedebt/equityratioindicatesthatthecompanywouldrelyheavilyondebtfinancingwhichcouldlead
tomajorfinancialproblemsifinventoriescouldnotbesoldoff.Theworstcasescenarioisbankruptcy.

TABLE2

CurrentRatio Year1 Year2 Year3

(times) 3.48 1.48 1.07

Thecurrentratiomeasurestwixtsabilitytomeetitsshorttermobligations.Thegeneralruleof
thumbis2.Table2displaysthecurrentratioforthefirstthreeyearsoftwixtsbusiness.The
measureof3.48isgoodbutmustnotbemisinterpretedbecausethisaverageistakenatthestartofthe
businessbeforecashflowistakenintoaccount.Poorcashflowcallsforahigherasset/liabilityratio
becauseoftheuncertaintysurroundingmoneycomingintotwixtandhavingapositiveeffectthe
balancesheet.Abetterpredictorcanbetakenfrombothyear2(1.48times)andyear3(1.07times).
Yeartwoandyearthreebothsuggestthatmorecurrentassetsareneededtomeetthedemandsplaced
ontwixtbyitscurrentliabilities.

TABLE3

QuickRatio YEAR1 YEAR2 YEAR3

(times) 3.08 .74 .20

 McLachlan49

Thequickratiorevealsamoreaccuratepictureofhowmanyassetsarereadilyavailabletocovercurrent
liabilities.Bytakinginventoriesoutoftheequation,thequickratiocalculationsdeterminethatbyyear
twocurrentassetsarenotabletoreadilycovercurrentliabilities.Inventoriestaketimetoselland
generallyrequiremorethanthirtydaystobeconvertedintocash.AsevaluatedinTable3,thereisnot
enoughcashandmarketablesecuritiestocoverthecurrentliabilitiesinfull.Analysisofthisratio
suggeststhatmoreinvestedcashisneededforthebusinesstoensureitcanmeetallitsfinancial
obligationsinyearsonethroughthree.

TABLE4

Inventory YEAR1 YEAR2 YEAR3

Turnover(/year) 5.5times

AverageAge(days) 66

InventoryturnoverispredictedusingtheCOGSforyearonedividedbytheinventoryondayoneof
business.Thismethodisnotveryaccurate.Inventoryturnoverforyeartwoandthreecannotbe
predictedfromthebalancestatementbecausethelineitemInventoryontheBalanceSheetincludes
anticipatedleftoverinventoryfromyearoneaswellasyeartwo:quarteroneinventory.Forabetter
representation,inventoryturnovermustbestudiedandthenpredictedbasedonyearoveryear
analysis.Duetothefluctuatingseasonsofretailandtheinfluxofmerchandiseatthebeginningofeach
seasonitisunrealistictoseeturnovergreaterthanevery60to90days.Buyingisbasedonthisfactand
inventorycontrolssuchasproductreturnsarefactoredintotheseasonaldemands.

 McLachlan50

Income statement
Theincomestatementindicatesthatpredictedsalesforyearonewouldnotcoverthecostsassociated
withopeningtwixt.Withfixedcostsof$81141andvariablecostsat35%ofsales,salesof$113850are
toolowtosupportthehighrentandemployeecosts.Theincomestatementalsoindicatesthatthereis
noallowanceforanownersdraw,meaningtheownerwouldnotbepaidfortheirworkinyearone.

PROJECTEDINCOMESTATEMENT:YEARONE

TIMEPEROIOD 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter ANNUAL

SALES 20700 35650 27600 29900 113850
less
COGS 7200 12400 9600 10400 39600
GROSSPROFIT 13500 23250 18000 19500 74250
less
MARKETING 0 1023 874 1023 2920
OFFICE 14810 14810 14810 14810 59240
SALARIESANDCOMMISSIONS 4784 6334 5984 6084 23186
BADDEBT 50 50 50 50 200
BANKCOMMISSIONS 218.04 375 290.72 314.95 1198.71
TRADESHOW 2000 2000 2000 2000 8000
OPERATINGPROFT 8362.04 1342 6008.72 4781.95 17574.71
less
REPAYMENTEXPENSES 2695.29 2695.29 2695.29 2695.29 10781.16
BUSINESSTAXES 2927 4650 3600 3900 15077
OWNERDRAWINGS 0 0 0 0 0
NETINCOME 13984.33 8687.29 12304.01 11377.24 43432.9

 McLachlan51

Breakeven analysis
Theincomestatementsforyeartwoandthreearepredictedbelow.Itisexpectedthatsaleswillnotbe
highenoughtosupport twixt tobreakevenuntilyearthree.However,ofnotefromtheincome
statementisthedetailthattheownerhasstillnotbeenpaidfortheirworkortakenanypaymentfor
theirservicesfromthebusiness.Thispieceofevidencecanberemediedbyreducingparttimesales
staffandusingthatmoneytopaytheowneranhourlywageaswellascommission.Conversely,this
moneywouldbetterservethebusinessifitwasinvestedasretainedearnings.

PROJECTEDINCOMESTATEMENT:YEARTWO

TIMEPEROIOD 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter ANNUAL

SALES 52900 50600 34500 44850 182850
less
COGS 18400 17600 12000 15600 63600
GROSSPROFIT 34500 33000 22500 29250 119250
less
MARKETING 1385 1385 1385 1385 5540
OFFICE 16310 16310 16310 16310 65240
SALARIESANDCOMMISSIONS 7084 6984 6284 6734 27086
BADDEBT 50 50 50 50 200
BANKCOMMISSIONS 557.21 532.99 363.4 472.42 1926.02
TRADESHOW 2000 2000 2000 2000 8000
OPERATINGPROFT 7113.79 5738.01 3892.4 2298.58 11257.98
less
INTERESTEXPENSES 2695.29 2695.29 2695.29 2695.29 10781.16
BUSINESSTAXES 6900 6600 4500 5850 23850
OWNERDRAWINGS 0 0 0 0 0
NETINCOME 2481.50 3557.28 11087.69 6246.71 23373.18

 McLachlan52

PROJECTEDINCOMESTATEMENT:YEARTHREE

TIMEPEROIOD 1stQuarter 2ndQuarter 3rdQuarter 4thQuarter ANNUAL

SALES 65550 67850 43700 58650 235750
less
COGS 22800 23600 15200 20400 82000
GROSSPROFIT 42750 44250 28500 38250 153750
less
MARKETING 1375 1375 1375 1375 0
OFFICE 16310 16310 16310 16310 65240
BADDEBT 50 100 50 50 250
SALARIESANDCOMMISSIONS 7634 7734 6684 7334 29386
BANKCOMMISSIONS 690.46 714.69 460.31 617.78 2483.24
TRADESHOW 1250 1250 1250 1250 5000
OPERATINGPROFT 15440.54 16,766.31 2,370.69 11,313.22 45,890.76
less
INTERESTEXPENSES 2695.29 2695.29 2695.29 2695.29 10781.16
BUSINESSTAXES 8550 8850 5700 7650 30750
OWNERDRAWINGS 0 0 0 0 0
NETINCOME 4195.25 5,221.02 6,024.60 967.93 4359.60

Cash flow
Cashflowhasbeenpredictedforthefirstthreeyearsofbusiness.Thestatementofcashflowsdetails
thechangeintwixtscashovereachfiscalyear.Thecashflowisveryimportantinunderstanding
whenthestorewillneedinjectionsofcashandplanningmustbemadeformonthswherecashisgoing
tobetight.Cashisneededtocoverallliabilitiesandwithoutitthestorewillbeforcedintobankruptcy.
Thecashflowstatementindicatestheexistenceofcreditproblemsandshedslightonthehugeimpact
thepurchaseofinventoryhasonthestoresavailablecash.Theindividualitemsinthecashflow
statementseemtobedistributedinaprudentmanorandshowthatthestoreisgrowing.However,
overall,thecashflowstatementgivesanundesirableviewoftheplannedbusiness.Cashflowisa
seriousconcerninyearthree.Ananticipatedgrowthinsalesmeansthatthereismoremoneyowedin
accountspayable.Thestoredoesnothavethecashonhandtopayfortheincreaseininventory.Thisis
ahugeproblemsinceitmeansthestorewouldhavetoleverageitselfevenmorewithashorttermline
ofcredit.WithoutaninjectionofcashinyeartwothestorewillnotbeabletocoverexpensesinJuly.
Carryingthisnegativebalanceforwardwouldonlyfurtherlimitthestoresabilitytocovercostsinyear
three.Qualifyingforashorttermlineofcreditatthebeginningofyearthreewouldensuretwixt has
enoughcashtocoveritsoperations.
 McLachlan53

YEARONE AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE JULY
CASHRECEIPTS
cashsales 3450 3450 3450 5175 8050 4600 3450 4600 5750 5750 4600 4600
30day x 3105 3105 3570.8 4657.5 7245 4140 3105 4140 5175 5175 4140
60day x x 172.5 172.5 172.5 258.75 402.5 230172.5 230 287.5 287.5
90day x x x 172.5 172.5 172.5 258.75 402.5 230 172.5 230 287.5
other 50 50 50 50
CASHIN 3450 6555 6677.5 9090.8 13052.5 12226 8251.25 8337.5 10242.5 11327.5 10292.5 9265

EXPENSES
equipmentpurchases
T&A 4200 200 1300 1300 1000
rent x 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500
maintenencecos 100 80 80 80 100 80 80 100 80 80 100 80
labourcosts 1840 1472 1472 1472 1840 1472 1472 1840 1472 1472 1840 1472
commissions x x x 450 700 400 300 400 500 500 400 400
marketing 1470 35.45 30 30 30 30 30 30 125.45 30 30 30
inventory x x x 12400 x x x 9600 x x x 10400
advertising 100 x x 150 x x x x 150 x x x
sellingexpenses 37.5 37.5 45 22.5 15 15 227.5 7.5
officeexpenses 350 350 350 350 350 350 350 350 350 350 350 350
loanpayments 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43
taxes x x 2927 x x 4650 x x 3600 x x 3900
bankfees x 63.2 63.2 63.2 94.8 147.47 84.27 63.2 84.27 105.33 105.33 84.27
other
CASHOUT 8995.93 7599.1 10321 20431 8558.23 12550 9029.7 19081.63 11775.2 8163.26 9231.26 22114.7

CASHINCASHOU5545.93 1044.08 3643.13 11340.3 4494.27 324.15 778.450010744.13 1532.65 3164.24 1061.24 12849.7
OPENINGBALANC 55300 49754 48710 45067 33726.5 38221 37896.6 37118.15 26374 24841.4 28005.6 29066.85
CLOSINGBALANCE 49754.1 48710 45067 33726 38220.8 37897 37118.2 26374.02 24841.4 28005.6 29066.9 16217.15

 McLachlan54

YEARTWO AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE JULY
CASHRECEIPTS
cashsales 9200 9200 8050 8050 11500 5750 4600 5750 6900 7475 7475 7475
30dayreceiveables 4140 8280 8280 7245 7245 10350 5175 4140 5175 6210 6727.5 6727.5
60dayreceiveables 230 230 460 460 402.5 402.5 575 287.5 230 287.5 345 373.75
90dayreceiveables 287.5 230 230 460 460 402.5 402.5 575 287.5 230 287.5 345
other 50 50 50 50
CASHIN 13858 17940 16970 16215 19607.5 16855 10753 10753 12543 14202.5 14835 14871

EXPENSES
equipmentpurchases
T&A 4200 200 1300 1300 1000
rent 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500
maintenencecosts 100 80 80 80 100 80 80 100 80 80 100 80
labourcosts 1840 1472 1472 1472 1840 1472 1472 1840 1472 1472 1840 1472
commissions 800 800 700 700 1000 500 400 500 600 650 650 650
marketing 976.67 81.67 51.67 81.67 51.67 186.67 76.67 81.67 51.67 106.67 51.67 551.67
inventory x 18400 x X 17600 x x 12000 x x 15600 X
advertising 150 x x 150 x x x x 150 x x x
sellingexpenses 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33
officeexpenses 350 350 350 350 350 350 350 350 350 350 350 350
loanpayments 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.43
taxes x x 6900 x x 6600 x x 4500 x x 5850
bankfees 94.45 188.91 188.91 169.59 169.59 242.27 121.13 96.91 121.13 145.36 157.47 157.47
other
CASHOUT 14118 27179 15349 8610 26718 15037.7 9406.6 21875 12932 8410.79 25356 14718

CASHINCASHOUT 260.3809239.34 1620.66 7604.98 7110.52 1817.3 1345.94 11122.8 389.059 5791.71 10520.9 153.35
OPENINGBALANCE 16217 15957 6717.4 8338.1 15943.1 8832.55 10650 11996 872.95 483.89 6275.6 4245
CLOSINGBALANCE 15957 6717.4 8338.1 15943 8832.55 10649.9 11996 872.95 483.89 6275.6 4245.3 4092

 McLachlan55

YEARTHREE AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE JULY
CASHRECEIPTS
cashsales 11500 11500 9775 10925 15525 7475 5175 7475 9200 9200 10350 9775
30dayreceiveables 6727.5 1035 1035 8797.5 9832.5 13973 6727.5 4658 6727.5 8280 8280 9315
60dayreceiveables 373.75 373.75 575 575 488.75 546.25 776.25 373.8 258.75 373.8 460 460
90dayreceiveables 373.75 373.75 373.75 575 575 488.75 546.25 776.3 373.75 258.8 373.75 460
other 50 50 50 50 50
CASHIN 18975 13283 11709 20873 26421 22433 13225 13233 16510 18113 19464 19960

EXPENSES
equipmentpurchases
T&A 2600 1200 1200
rent 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500
maintenencecosts 100 80 80 80 100 80 80 100 80 80 100 80
labourcosts 1840 1472 1472 1472 1840 1472 1472 1840 1472 1472 1840 1472
commissions 1000 1000 850 950 1350 650 450 650 800 800 900 850
marketing 936.67 81.67 51.67 81.67 51.67 186.67 76.67 81.67 51.67 106.7 51.67 551.67
inventory x 22800 x X 23600 x x 15200 x x 20400 X
advertising 150 x x 150 x x x x 150 x x x
sellingexpenses 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.3 208.33 208.3 208.33 208.33
officeexpenses 350 350 350 350 350 350 350 350 350 350 350 350
loanpayments 898.43 898.43 898.43 898.43 898.43 898.43 898.43 898.4 898.43 898.4 898.43 898.43
taxes x x 8550 x x 8850 x x 5700 x x 7650
bankfees 157.47 242.27 242.27 205.93 230.15 327.06 157.47 109 157.47 223.3 223.25 218.04
other
CASHOUT 12741 31633 17203 8896.4 33129 17522 9392.9 25137 14368 8639 29472 16778.47

CASHINCASHOUT 6234.1 18350.25493.95 11976.1 6707.33 4910.01 3832.1 11904.92142.1 9473.82 10007.9 3181.53
OPENINGBALANCE 4092 2142.2 16208 21702 9726 16433 11523 7691 19596 17454 7980.1 17988.04
CLOSINGBALANCE 2142.2 16208 21702 9726 16433 11523 7691.1 19596 17454 7980 17988 14806.51

 McLachlan56

Recommendations
Uponanalysisofalldatathebusinessdoesnotappeartobeprofitableatthecurrentdebtlevel.In
additiontolargesalesfluctuationsandhighfixedcosts,cashflowisanobviousissue.Thecurrent
businesswouldnotprovidetheownerwithsoundearningsoninvestment.Inordertoensureamore
viablebusinessoptionthefollowingrecommendationsaremade:

1. Lookintosmallbusinessorentrepreneurialgrantstoraisemorecapitalforthebusiness.

2. Enterintoapartnershiporobtainasilentinvestor.

3. Negotiateamorefavourableleaseorconsiderswitchingstoretoadifferentareawithaless
expensivelease.

4. Eliminatethestaffingandcommissioncostsuntilthestoreisabletobreakeven.

5. Increasemargins.

6. Eliminatetradeshowcostsbycontactinglocaldistributorsandonlyattendinglocalshows.

Conclusion
MarketresearchindicatesastrongneedforatweenclothingstoreinLeaside.Thehypothesiswasthat
astrongstrategicmarketingplancouldsupporttheopeningofatweenclothingstore.Underthe
financialsituationasresearchedabovethisisanullhypothesis.Newretailventurestakeyearstoget
salesuptosustainablelevels.Theonlywaytocoverthehighcurrentliabilitiesisthroughanincreasein
sales.Itappearsasthoughthenicheistoosmalltosustainthebusinessasitisunlikelythatthesales
forecastisoverlypessimistic.ThehighfixedcostofrentonBayviewAvenuedoesnotallowthetime
neededtoreachthesehighsaleslevels.Whilethemarketmaydictateaneed,thepricethestorewould
needtochargeitscustomerswouldmakethestoreunattractivetothecustomer.Cashflowisthe
numberonereasonscompaniesgobankruptandthisisthemaincauseofconcernfortwixt.Zerocash
onhandisunrealisticandunwise.Inventorycanbesentbackandwillcoveritselfovertimebutthecash
neededupfrontwillmakeithardforthestoretomeetitsotherfinancialobligationsontimewithout
usingalineofcreditandleveragingitselffurther.Itisrecommendedthatthestorenotbeopened
unlessthereisa$100000incashthatcanbeusedtostartandsustainthestore.Thismoneywould
decreasemonthlyfixedcostsandallowthestoreroomtogrowatitsownpace.

 McLachlan57

References

Atkinson,A.,Kaplan,R.,Matsumura,E.,andMark,S.(2007).ManagementAccounting:5th
Edition.UpperSaddleRiver,NewJersey:Pearson,PrenticeHall.

Birn,R.(2004).EffectiveUseofMarketResearch:4thEdition.Sterling,Virginia:KoganPage

CanadaRevenueAgency(2010).CCAClasses.Retrievedfromhttp://www.cra
arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/cptl/clssseng.htmlonFebruary20,2010.

CityofToronto(2010).BuildingPermitsandApprovals.Retrievedfrom
http://www.toronto.ca/building/building_permits.htmonFebruary25,2010.

Kotler,P.,andKeller,K.(2006).MarketingManagement:12thEdition.UpperSaddleRiver,New
Jersey:Pearson,PrenticeHall.

Gerson,R.(1991).WritingandImplementingaMarketingPlan:AGuideforSmallBusiness
Owners.USA:CourseTechnologyCrisp.

Gitman,L.,andHennessey,S.(2008).PrinciplesofCorporateFinance.Toronto,Ontario:
Pearson,AddisonWesley.

Grant,R.(2005).ContemporaryStrategyAnalysis:5thEdition.Malden,Massachusetts:Blackwell
Publishing.

Hague,P.,Hague,N.,andMorgan,C.(2004).BusinesstoBusinessMarketResearch.Sterling,
Virginia:KoganPage.

Mintzberg,H.(1987a).ThestrategyconceptI:FivePsforstrategy.CaliforniaManagement
Review,30(1),1124.

Mintzberg,H.(1987b).ThestrategyconceptII:Anotherlookatwhyorganizationsneed
strategies.CaliforniaManagementReview,30(1),2532.

Mintzberg,H.,&Lampel,J.(1999).Reflectingonthestrategyprocess.SloanManagement
Review,40(3),2130

OttawasLeadEconomicDevelopmentCorporation.(2002).WritingandEffectiveBusinessPlan.
Ottawa:Author.

RetailCouncil.(2008).CombatTheft.Retrievedfromwww.retailcouncil.org/news/media/press
onMarch3,2010.
 McLachlan58

Smith,W.(1995).ProductDifferentiationandMarketSegmentationAsAlternativeMarketing
Strategies.MarketingManagement,4(3),6365.

Sorli,G.(2006).MarketingPlanTemplate.MKMT504CourseNotes.Athabasca:Athabasca
University.

Westwood,J.(2006).HowtoWriteandMarketingPlan:3rdEdition.Philadelphia:KoganPage.

Tong,Vinnee(2010).TheReturnofRetailSales.Retrievedfrom
http://money.aol.ca/article/decemberretailsalesshowsignsoflife,onJanuary3,2010.

 McLachlan59

Appendix

A: Online Potential Customer Survey Results

Thefollowingsurveywascompletedby42respondentsallofwhomqualifyasthetargetmarket.

Background

1)Whatisyouragebracket?

Percentage Responses

7
14.3 6
13

30
14.3 6
40

41
66.7 28
50

51
4.8 2
+

Totalresponses: 42

2) Pleaseselectyourgender

Percentage Responses

Female 90.5 38

Male 9.5 4

Totalresponses: 42

 McLachlan60

3) Whatisyourfamilyincomebracket?

Percentage Responses

$0$100000 9.5 4

$100001$150000 0.0 0

$151000$200000 23.8 10

Over$200000 61.9 26

Unsure 4.8 2

Totalresponses: 42

4) ParentsONLY:Howmanychildrendoyouhave?

Percentage Responses

1 5.6 2

2 72.2 26

3 16.7 6

4ormore 5.6 2

Totalresponses: 36

ShoppingBehaviour

Thefollowingquestions(58)relatetochildren'sclothingandapparel.Pleaseanswerthequestionsas
theybestdescribeyourbehaviourONLYasitrelatestochildren'sclothing/apparel.
 McLachlan61

5)Howmanytimespermonthdoyoushop?

Percentage Responses

lessthanonce 28.6 12

Once 23.8 10

Twice 28.6 12

Everyotherweek 9.5 4

Weekly 4.8 2

Twice/week 0.0 0

Morethantwice/week 4.8 2

Totalresponses: 42

6) Wheredoyoushop?(selecttop3)

 McLachlan62

Percentage Responses

TheGAP 23.4 30

LaSenzaGirl 6.3 8

OldNavy 12.5 16

SportingLife 10.9 14

JoeFreshClothing(Loblaws) 15.6 20

Mall 7.8 10

Online
9.4 10
LandsEnd,LLBean

Other

MexxKids,West49,Abercrombie, 14.1 15

AmericanEagle,Winners.

7) Whodoyouregularlyshopwith?

Percentage Responses
 McLachlan63

Alone 52.2 24

OneFriend 0.0 0

Morethanonefriend 0.0 0

Parent 17.4 8

Child(ren) 30.4 14

8) ParentsONLY:
Whodoyoushopfor(checkallthatapply)?

Percentage Responses

Child(ren) 90.0 36

Friend'sChild(ren) 0.0 0

Relatives 10.0 4

PurchasingBehaviour

Definition:Purchaseonetransaction.ThismayincludeMOREthanoneitem.

Thefollowingquestions(913)relatetochildren'sclothingandapparel.Pleaseanswerthequestionsas
theybestdescribeyourbehaviourONLYasitrelatestochildren'sclothing/apparel.

9)Whenwasthelasttimeyoumadeapurchase?

Percentage Responses
 McLachlan64

Thisweek 23.8 10

Lastweek 23.8 10

Withinthelastmonth 52.4 22

Withinthelast2months 0.0 0

Over2monthsago 0.0 0

Never 0.0 0

Totalresponses: 42

10) ChildrenONLY:Whopaysforyourclothing?(checkallthatapply)

Percentage Responses

Mom 47.1 16

Dad 29.4 10

Self 0.0 0

Grandparents 23.5 8

Other 0.0 0

11) ParentsONLY:Howmanypurchasesdoyoumake(onaverage)permonth?

Percentage Responses

Lessthan1 5.6 2

1 33.3 12
 McLachlan65

2 33.3 12

1/week 22.2 8

2/week 5.6 2

Morethan2/week 0.0 0

Totalresponses: 36

12) Howmuchisyouraveragepurchase?

Percentage Responses

Notapplicable 0.0 0

$20 4.8 2

$21$50 30.9 13

$51$99 50.0 21

$100$200 14.3 6

Over$200 0.0 0

Totalresponses: 42

13) Whatisthemostyouwouldspendonapairofjeans?

Percentage Responses

Lessthan$50 71.4 30

$51$70 14.3 6

 McLachlan66

$71$100 4.8 2

Over$100 9.5 4

Totalresponses: 42

NeedsandWants

14)Pleaserankinorderofimportancetoyou:

Average

Score

Price 2.90/7

Service 5.00/7

Locationofstore 4.05/7

Parking 5.90/7

Qualityofitemsoffered 3.14/7

Styleofitemsoffered 3.24/7

Selectionofitemsoffered 3.76/7

15) Whereyoucurrentlyshop,areyourneedsbeingmet?

Percentage Responses

Yes 48.0% 20

No 52.0% 22

 McLachlan67

Totalresponses: 42

16) Whatwouldyouchangeaboutthestore(s)youcurrentlyshopin?

basic'sneedtobeavailableallthetime

moreconvenientlocation

Atthisstageinourfamily,itisalwayshelpfultohavea"kids'station"wheretheyoungerones
candraw,etc.

closer

Moreclothingforkidsage913(tween)

Dressingroomstailoredtochildren,moreselectionforboys10+

Closertohome!

HavingwellmarkedshelveswithstaffwhoareknowledgeableabouttheirproductsAND
restocking,nothavingpilesofclothingstackedupTOBEputontheshelveslyingaround

Moreselectionforbigger1012yearoldgirls.

Location,closerisbetter!
 McLachlan68

betterselectionofbrandnameclothing

moreavailabilityinmychildren'ssizes

Moreselectionoftweensizesandstyles

B: Naming Survey

Thefollowingsurveywascompletedonlineby32respondents.Thetop3names(BeTween,twixtand
Lifepop)werethenproposedtoagroupoffivetweens.Thefinalname(twixt)wasaunanimous
decision.

SURVEY:

Eachrespondentstopfouranswershavebeengraphedandaremeasuredinpercentages.
 McLachlan69

C: Interviews
Thefollowinginterviewswererecordedandthentranscribedforreferencesake.Allanswers
arespokeninthefirstpersonandaretheopinionoftheinterviewee.Notallquestionswere
answeredineachinterviewbutallanswersgivenhavebeenincluded.

C.1GwenRamsayofGumbootsClothing

1.IDENTIFICATION:
1.1Name:GwenRamsay
1.2NameofCompany:Gumboots
1.3Address:789MtPleasantBlvd
 McLachlan70

1.4Telephone:4164834499
1.5Sector:Retailclothingstore
1.8#ofemployees:
Fulltime2(onefulltimemanager)
parttime3
1.9#ofyearsinbusiness:10

2.BACKGROUND/HISTORY:

2.1EducationandTraining:BachelorofArts

2.2Experience:Retailsalesexperience

3.THEORGANIZATION:

3.1Describetheenterprise:ChildrensClothingstorewithhighendclothingforchildrenages26.

3.2Howmanyhoursaweekdoyouwork?:20

3.3Howdoyoustayontopofdaytodaywhilestillpromotingthebusiness?Wordofmouthbusiness
becauseofnumberofyearsinbusinessanddemographicsofareainwhichstoreislocated.Donotwork
fulltimeinthestoresoabletospendtimepromotingthestoreandenjoyinghobbies.

3.4Whatareyourmargins?:Variable.Generallyaveryhealthymarginonclothingespeciallywhenitis
brandnameordesigner.Weaverage$15$20thousandinsalesamonth.

3.5Howdoyouanticipateinventorylevels?:Havebeeninbusinessalongtimeandcanpredictbuying
patterns.SpringandChristmasareverybusytimesformotherstobeoutlookingfornewoutfits.

3.6Howdoyoudifferentiateyourself?:Bytheclotheswecarry.

3.7Howdoyoumakeupforareasyouareweakerinorhavelittleknowledgein?:Haveanaccountant
andalawyer.

3.8Howdoyouknowwhatyourcompetitorsareupto?Nootherstoresinareacarryingthesame
brands.TherearebrandslikeGAP,Gymboree,andMexxatthemallbuttheyarentasconvenientand
theyoffercheaplymadeclothing.Notcomparable,inmymind.

Trends?:Cuteclothesalwayssell!Butwehavebeenthinkingaboutcarryinggreenlinesandwecarry
manyorganictopsandsweatpants.WhateverseemspopularattradeshowsandItrustmysuppliers
opinions.

4.VISION/STRATEGICMANAGEMENT:
 McLachlan71

4.1Whatrulesofthegamehaveyouidentifiedforsuccessinyoursector?:Haveuniqueproducts.
Ensureyoucanhavehealthymargins.

4.2Howdoyougoaboutacquiringmerchandise?

Buyinggroups:
Shows:Usedtogotoalltheshowsbutnowonlylocalshows.
Wholesalers:Goodrelationshipwithdistributersandtrusttheiropinionsandbrands.

4.3Didyouidentifyyourstrategybeforeyoubeganordoesitcomeasyougoalong?:Isawthatthere
wasmoneyintheareaandmorematurepeoplewithmoneywerehavingkidslaterinlifesotheyhad
goodjobs.Wantedtocarryspecialchildrensclothingthatfashionconsciousmomswouldbuyfortheir
kids.Insomecasesitsthesamebrandthemomiswearing.Plusitgivespeopleanoptionwhenbuying
foraspecialoccasion.IbuymostlyEuropeanbecausetheyhavegreatfashionsandareaheadofus.

4.4Doyouhaveamarketingplan?:No.

Yearly?

5.LEARNINGMETHOD:

5.1Howdoyoulearn?:Experienceandlisteningtowholesalersandfriends.

5.2Whathavebeenyourbestlearningresources?Husbandhasgreatbusinesssense.

5.3Howdoyouprepareyourselfforthefuture?MakesurethatIcangetoutwhileIamstillprofitable!

6.SELFASSESSMENT:

6.1Howdoyouseeyourself?

6.2Howdoyougofromturningideasintoanoperation?

6.3Haveyouchangedasapersonsincegoingintobusiness?

6.4Whatplacedoyougivetointuitioninthewayyouoperate?Alot

7.OTHER:

7.1Whathavebeenyourbiggestchallenges?Managingcashinitially.Thenithasbeenmanaging
inventorylevelsandensuringwedonthavetomarkdownitemsveryoften.Therearesomany
uncontrollablethingsthatthrowyouoff.Forinstancelastyearthesidewalkwasunderconstructionfor
mostofthesummersomomswerentoutwalkingby...thatreallyhurtsales.

7.2Whatadvicewouldyougivepeoplewantingtogointobusiness?GoodLuckitstough.Plantowork
allthetimeandalwaysbeputtingoutfires.
 McLachlan72

7.3Arethereanypointswehavenotcoveredthatyouwanttoadd?

C.2DarcyMcGrathofDEW

1.IDENTIFICATION:
1.1NameDarcyMcGrath
1.2NameofCompanyDEW
1.3Address1553BayviewAve.
1.4Telephone6474361232
1.5SectorRetail:Clothing
1.6#ofemployeesowner,fulltimemanager,8parttime
1.7Listofdepartmentssalesandmanager
1.8#ofyearsinbusiness3

2.BACKGROUND/HISTORY:
2.1EducationandTrainingBackgroundinfashionandbusiness.GraduatedfromRyersonfashion
program.

2.2Experience

2.3FavouriteActivities

Areyoucompetitive?Iswinningimportanttoyou?
Doyouread?Newspaper?Magazines?magazines:tabloidsandfashion
Hobbies?Shopping

3.THEORGANIZATION:

3.1DescribetheenterpriseAstylishstorethatstockswomensdesignerfashionsandaccessories

3.2Howmanyhoursaweekdoyouwork?2030

3.3Howdoyoustayontopofdaytodaywhilestillpromotingthebusiness?Havefulltimestaffso
donthavetobeinthestoreallthetime.Ihavefriendsinfashion.Ihavegreatfashionsense.Gotoall
bigbuyingshowsandfashionweekinNYCandToronto.

3.4Whatareyourmargins?200%onalotofstuff,especiallyjeansactuallyhigheronjeans.
 McLachlan73

3.5Howdoyouanticipateinventorylevels?Tough.Wasatotalguessatfirst.Iaskedmywholesalers
andstockedoneineverysize.Ionlyreallybuyonesizeofanyitem.ThenIhavetoputitemsonsaleif
theydontsell.

3.6Howdoyoudifferentiateyourself?Imtheonlystylishstorearoundhereforwomenmyageand
olderhighschoolgirlsoryoungmoms.Icarryfashionableclothingfromdaytoeveningtoweekend.

3.7Howdoyoumakeupforareasyouareweakerinorhavelittleknowledgein?Myparentshelpas
wellasanaccountant,lawyer,etc.

3.8Howdoyouknowwhatyourcompetitorsareupto?Gointothem.Seewhattheyaresellingandfor
whatprice.Nodirectcompetitorsinthisareasothathelps.

Trends?Fashionmags.,Shows,shopping.

4.VISION/STRATEGICMANAGEMENT:

4.1Whatrulesofthegamehaveyouidentifiedforsuccessinyoursector?Needtobebetteratbuying
andquantities.IofferspecialorderitemsforpeopletopreorderorforpeopletoorderwhenIamsold
out.Iwillcallmydistributerstotryandtrackdownclothing.Givingpeoplewhattheywantisimportant.

4.2Howdoyougoaboutacquiringmerchandise?

Buyinggroups
ShowsFallandSpringshowsinVegasandNYC
WholesalersGreatrelationshipwiththem.Theyarelikefriends.Irelyonthemandthey
helpmeout.Theycometome.

4.3Didyouidentifyyourstrategybeforeyoubeganordoesitcomeasyougoalong?Iidentifiedthe
needwhileIwasinschoolandIwentfromthere.

4.4Doyouhaveamarketingplan?WhenIstarted.

Yearly?

5.LEARNINGMETHOD:

5.1Howdoyoulearn?Bydoing

5.2Whathavebeenyourbestlearningresources?Parents,school,wholesalers.

5.3Howdoyouprepareyourselfforthefuture?Learnfromthepastandrelyonothers.

6.SELFASSESSMENT:
 McLachlan74

6.1Howdoyouseeyourself?Confident,outgoing,fashionablebusinesswoman.

6.2Howdoyougofromturningideasintoanoperation?Justdoit!

6.3Haveyouchangedasapersonsincegoingintobusiness?YesInowhavetothinkaboutwhere
moneyiscomingfrom.

6.4Whatplacedoyougivetointuitioninthewayyouoperate?HUGE.Allintuitionwellalot.

7.OTHER:

7.1Whathavebeenyourbiggestchallenges?Allthestepsnecessarytoopenabusinessandalltherules
andpermitsandimportingissuesyouhavetodealwith.

7.2Whatadvicewouldyougivepeoplewantingtogointobusiness?Thinkthereisaneedforatween
clothingstoreonBayview.Offeringfunclothestokidsissomethingthatwouldgooverwellwithmy
clients.

7.3Arethereanypointswehavenotcoveredthatyouwanttoadd?

C.3KarenJuddofMomsToBeandMore

1.IDENTIFICATION:
1.1NameKarenJudd
1.2NameofCompanyMomsToBeandMore
1.3Address1642BayviewAve
1.4Telephone4164889907
1.5SectorRetailClothing,Babyfurnitureandaccessories
1.6#ofemployees
fulltime10+owner
parttime15
1.7ListofdepartmentsSales:furniture,strollers,general.Installations.
1.8#ofyearsinbusiness15

2.BACKGROUND/HISTORY:

2.1EducationandTrainingBCOMM.
 McLachlan75

2.2ExperienceAfterIhadkidsIrealizedtheneedandgrowthofthebabymarket,especiallyinthisarea
whereeveryonehaskidsorispregnant.SoIstartedlookingforuniquebabyproductsandopeneda
store.

2.3FavouriteActivities

Areyoucompetitive?Iswinningimportanttoyou?
Doyouread?Newspaper?Magazines?
Hobbies?

3.THEORGANIZATION:

3.1DescribetheenterpriseMomstobeandMoreisTorontosmidtownstoreforallofyourbaby
needs.Withfifteenyearsofexperienceinthebabygearindustryweguaranteeyouwillhaveafunand
informativeshoppingexperience.

3.2Howmanyhoursaweekdoyouwork?TooMany.50+.Notallinthestorebutdealingwithstore
issuesorbuyingorthinkingupnewideasorsourcingnewproducts.

3.3Howdoyoustayontopofdaytodaywhilestillpromotingthebusiness?Amazingstafftotakecare
ofthedaytoday.InthebeginningIreliedalotonwhatIlikedandwhatfriendslikedandfoundout
howIcouldsellit.Thatandtradeshows.

3.4Whatareyourmargins?Variable.Hugemarkuponclothing.Moresothanonfurnitureandstrollers.

3.5Howdoyouanticipateinventorylevels?15yearsofexperience.Goodthingisforlargeitemsisthat
peopleexpecttohavetoorder(cribs,beds,chairs,dressers,strollers).AllotheritemssoldIcanorder
moreandhaveinaweekorso.Distributorsaregenerallyhappytobesellingyoumore.

3.6Howdoyoudifferentiateyourself?Productsoffered,ourregistry,ourknowledgeablesalesstaff,our
website,ourcarseatinstallationservice,storagefacilityandourfriendlyservice.

3.7Howdoyoumakeupforareasyouareweakerinorhavelittleknowledgein?Readaboutit.
Outsource(ie:website)

3.8Howdoyouknowwhatyourcompetitorsareupto?Gointotheirstores.Talktothem.

Trends?Askcustomers.Readparentingmagazines.Gotoshows.Theinternet.

4.VISION/STRATEGICMANAGEMENT:

4.1Whatrulesofthegamehaveyouidentifiedforsuccessinyoursector?Knowyourmargins.Know
yourcustomersandknowyourproductinsideandout(makesureyourstaffdoesaswell).

4.2Howdoyougoaboutacquiringmerchandise?
 McLachlan76

Buyinggroups
Showsyes
Wholesalersyes.Majority.FindwhodistributestheproductsIwanttosellandcontact
them.

4.3Didyouidentifyyourstrategybeforeyoubeganordoesitcomeasyougoalong?Uniquestoreidea
wasoriginalstrategy.Nowitevolvestokeepsamevision.AlwayschangingproductscarriedsothatIcan
ensureIamthebestequippedbabystoreinTorontoandpeoplewanttocomeshophere.Iadvertisemy
servicesandproductsinmagazinesandparentingpapers.Ineedtomakesurethatpeoplewanttostart
outbyregisteringhereandneverwanttogoelsewhere.

4.4Doyouhaveamarketingplan?Yes

Yearly?Addressisyearlyandsticktosamestrategybutupdatewhatwillbedoneand
whatisneededtotakethestoretothenextlevel.

5.LEARNINGMETHOD:

5.1Howdoyoulearn?

5.2Whathavebeenyourbestlearningresources?

5.3Howdoyouprepareyourselfforthefuture?

6.SELFASSESSMENT:

6.1Howdoyouseeyourself?

6.2Howdoyougofromturningideasintoanoperation?

6.3Haveyouchangedasapersonsincegoingintobusiness?

6.4Whatplacedoyougivetointuitioninthewayyouoperate?

7.OTHER:

7.1Whathavebeenyourbiggestchallenges?

7.2Whatadvicewouldyougivepeoplewantingtogointobusiness?

IdefinitelythinkthereisaneedforachildrensclothingstoreanditissomethingIhavetoyedwithifI
weretoexpandmyspace.TherentonBayviewisasuperlimitingfactor.Also,youneedtobeableto
reallystayontopoftweentrendsinordertoopenastoretargetingthem.Thatishardkidsaremore
fickle.
 McLachlan77

7.3Arethereanypointswehavenotcoveredthatyouwanttoadd?

D: Inventory Break-down
BOYS(30%) YEAR1 GIRLS(70%) YEAR1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
tops 1026 1767 1368 1482 tops 2358.7 4067.4 3144.96 3407.04
pants 1026 1767 1368 1482 pants 1572.5 2711.6 2096.64 2271.36
accessories 108 186 144 156 dresses 604.8 1041 806.4 873.6
accessories 504 868 672 728
total 2160 3720 2880 3120 total 5040 8680 6720 7280

GRANDTOTAL 20700 35650 27600 29900

BOYS(30%) YEAR2 GIRLS(70%) YEAR2

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
tops 2622 2580 1710 2223 tops 6027.84 5765.76 7967.23 5110.56
pants 2622 2508 1710 2223 pants 4018.56 3843.84 5311.49 3407.04
accessories 276 264 180 234 dresses 1545.6 1478.4 2042.88 1310.4
accessories 1288 1232 1702.4 1092
total 5520 5280 3600 4680 total 12880 12320 17024 10920

GRANDTOTAL 52900 50600 34500 44850

BOYS(30%) YEAR3 GIRLS(70%) YEAR3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
tops 3249 3363 2166 2907 tops 7469.28 7731.36 4979.52 6683.04
pants 3249 3363 2166 2907 pants 5291.52 5154.24 3319.68 4455.36
accessories 342 354 228 306 dresses 1915.5 1982.4 1276.8 1713.6
accessories 1596 1652 1064 1428
total 6840 7080 4560 6120 total 15960 16520 10640 14280

GRANDTOTAL 65550 67850 43700 58650

 McLachlan78

E: FADS
Assetswereamortizedaccordingtothefollowingschedule(CanadaRevenueAgency,2010).

FIXEDASSETDEPRECIATIONSCHEDULE
COST RATE(%) 2010 2011 2012
COMPUTER 800 100 800 0 0
SOFTWARE 200 100 200 0 0
PHONES 100 20 20 20 20
FAXANDPHOTCOPIER 200 20 40 40 40
FURNITURE 600 20 120 120 120
MANNEQUINS 100 20 20 20 20
LEASEHOLDIMPROVEMENTS 10000 20 2000 2000 2000
TOTAL 3200 2200 2200

F: Commission Schedule
MONTHLYCOMMISSIONS$
JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
2010 0 0 0 450 700
2011 400 300 400 500 500 400 400 800 800 700 700 1000
2012 500 400 500 600 650 650 650 1000 1000 850 950 1350
 McLachlan79

G: Bank Commissions
YEAR1 Q1 Q2 Q3 Q4 TOTAL
credit 207 356.5 276 299
debit 11.04 18.5 14.72 15.95
TOTAL 218.04 375 290.72 314.95 1198.71

YEAR2 Q1 Q2 Q3 Q4 TOTAL
credit 529 506 345 448.5
debit 28.21 26.99 18.4 23.92
TOTAL 557.21 532.99 363.4 472.42 1926.02

YEAR3 Q1 Q2 Q3 Q4 TOTAL
credit 655.5 678.5 437 586.5
debit 34.96 36.19 23.31 31.28
TOTAL 690.46 714.69 460.31 617.78 2483.24