Running head: NEW VENTURE BUSINESS PLAN

Institution

Fundamentals of Entrepreneurship Assignment: Business Plan

By

Name

Under the Supervision of

Course

11th September 2019

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Table of Contents
1.0 Executive Summary .................................................................................................................. 3
2.0 Introduction.................................................................................................................................4
2.1 Aim............................................................................................................................................. 4
2.2 Scope ......................................................................................................................................... 4
3.0 Opportunity ................................................................................................................................ 5
4.0 Market Analysis Summary....................................................................................................... 5
4.1 Market Segment Strategy........................................................................................................ 5
4.2 Competition ............................................................................................................................. 6
5.0 Company and Management Summary ................................................................................. 6
5.1 Organizational Structure ......................................................................................................... 6
5.2 Management Teams.................................................................................................................. 7
5.3 Management Departments ...................................................................................................... 7
5.3.1 Marketing Department........................................................................................................ 7
5.3.2 Purchasing Department...................................................................................................... 8
5.3.3 Production Department...................................................................................................... 8
5.3.4 Accounts Department......................................................................................................... 9
6.0 Execution ..................................................................................................................................... 9
6.1 Plan of Operation...................................................................................................................... 9
6.2 Marketing and Sales Plan ..................................................................................................... 10
7.0 Financial Plan........................................................................................................................... 11
7.1 A Summary of the Projected Financial Statements............................................................ 11
8.0 Conclusion................................................................................................................................. 11
9.0 Appendix....................................................................................................................................13
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1.0 Executive Summary

The Ideal Abaya Limited Company will offer quality and new designs of attractive abayas to

all Muslim women (aged at least 10 years) in Australia. The company intends to avail elegant

and quality abayas as they are in short supply to the growing number of Muslim women in

Australia. The targeted market will be women of at least ten years and who visit or stay

around Sydney. A research conducted in this market shows that at least 70.0 % of Arabic

women in Australia prefer abayas because they are fashionable, enhance modesty and protect

inner clothes from hostile weather changes. Therefore, commencing this new venture would

be worthwhile and likely to thrive.

The Ideal Abaya enterprise will be a limited liability company directly managed by Imran

Yusuf. For the start, the firm will need a total capital of 178, 155 AUD and about fifty

workers. Additionally, the firm will be located in Sydney where there are already numerous

competitors dealing in the same product. The idea is to have a competitive advantage over

them so that the firm becomes more superior. The forecasted financial statements for the

initial 5 years indicate that the firm will make losses due to stiff competition and high

expenses. However, from the fourth year onwards, the company will make profits as sales

will improve. In the fourth and fifth year, the firm will make projected profits of 60,532 AUD

and 260,066 AUD respectively. The total cash flow of 587,805 AUD in year four indicates

that the venture will be viable as the bulk of earnings will mainly come from its core business

operations. This analysis indicates that Ideal Abaya Company will be profitable, hence worth

taking risks for.

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2.0 Introduction

2.1 Aim

The main aim of starting this venture is to make profits while satisfying the needs of Muslim

women in Australia. According to Abaya Addict (2015), Abaya is a traditional long dark

cloak with a hijab. It is usually a dark dress but some women prefer having bright weaves on

its sleeves and fringes. Today, women love putting on abayas of unique styles such as those

with distinct hues or kaleidoscopic diamantes. To satisfy these needs, the firm will ensure a

constant supply of quality and super designed abayas. The entrepreneur has chosen to deal in

the traditional type of abayas because it is consistent and has high demand, hence unlikely to

be changed in the Muslim culture.

2.2 Scope

According to Hassan (2016), Greater Sydney has the highest Muslim population in Australia

because approximately 41% of the inhabitants are Muslims. The venture will flourish in

Sydney as it has the highest Muslim population, hence the best place to market Islamic

clothes. Just like other nationalists in Australia, Muslim women love buying various designs

and styles of clothes during special occasions like Eid-ul-Fitr, Eid-ul-Adha, and Ramadhan.

This makes the demand for abaya very high throughout the year, hence potential high profits

as Ideal Abaya will operate more innovatively.

The entrepreneur plans to start this limited liability company in Sydney city. The

entrepreneur will have a 49.0% ownership and a local sponsor who must be an Australian

citizen and will be entitled to a 51.0% ownership. The Australian national will be a silent

partner paid a fixed annual payment of 15, 836 AUD whether the firm makes profits or not.

On the contrary, the entrepreneur’s profit or loss will depend on the income and expense

statement tailored at the end of every financial year. From 178, 155 AUD needed for capital,
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the entrepreneur will contribute personal savings worth 59, 385 AUD while the remaining

118, 770 AUD will be borrowed from the bank. In the initial 3 years, the expenditures on the

income statement are expected to be high, while in the fourth year, sales are anticipated to

improve, hence realization of profits. Quality materials for making abayas will be bought

from an international supplier (based in Australia) of original Arabic materials. Though the

firm will make a substantial profit in the fourth and fifth year, the management will try to

regulate the total expenses so that the items are profitably sold to consumers. The

entrepreneur plans to recruit fifty employees initially through advertising the opportunities

over the newspapers, after which shortlisting will be done followed by an interview. The

manager will be an educated person competent in maintaining financial statements, thus will

efficiently regulate operations and monitor all the workers. The tailors will also be required to

be competent, skilled and experienced to satisfactorily meet the needs of the clients.

3.0 Opportunity

After conducting rigorous market research, the entrepreneur found that abayas and sheilas are

doing very well in Australia. There are numerous firms and outlets such as JB Trading Group

Pty Limited, Arabian Nights, Modest Sista and Sunrise Exims, which are already operating

successfully in this industry. These firms are successful because they offer modern designs of

abayas that fulfill the existing gap and the needs of the Muslim women who face the

challenge of getting quality and customized clothes. Because of this high level of

competition, entering this industry will be a challenge for Ideal Abaya limited company. To

win this battle, the entrepreneur and the management will ensure that the firm’s marketing

strategy is competitive and unique.

4.0 Market Analysis Summary

4.1 Market Segment Strategy

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The firm will be located in a strategic, busy and highly populated area in Sydney. The

collection will entail wardrobe essentials, tense and unique styles and extraordinary pieces for

every unique Muslim woman. The clothes designed will be mainly for work, school, and

special occasions. Specific examples will include straight cut closed abayas, butterfly abayas,

Jalabaya, Kaftan abayas, and Maxi dresses. The clients will return for additional goods as

they will get brilliant staples, unmistakable prints and complementing cuts at affordable

prices. The firm will also be located in a strategic place most accessible to our potential

clients. The clients will further be attracted by the décor, lighting and interior design of our

abaya shop, which will have various color combinations. To allow the clients to buy abayas

based on their needs, the company will offer after-sales and delivery services to clients within

Sydney. The product strategy, customer experience, location, and the building’s décor will

make the company more extraordinary and competitive, hence attract more clients.

4.2 Competition

Since the firm will be located in Sydney, it will face stiff competition from other Abaya

dealers like JB Trading Group Pty Limited, Arabian Nights, Modest Sista and Sunrise Exims.

Unlike Modest Sista, Sunrise Exims and Arabian Nights companies that charge almost

similar fair prices (300AUD to 350 AUD) and offer good client services to lure customers, JB

Trading Group charges higher prices (400 AUD) but is still famous due to the wide variety of

quality designs it offers. However, clients still love shopping from JB Trading Group due to

the stunning and high-quality designs it provides. Therefore, Ideal Abaya Company has to

first compete with these three firms by selling at almost the same price but later increase it to

compete with JB Trading Group to be the best market dealer in abayas. Additionally, Arabian

Nights have excellent market share, thus competing with it without a proper market strategy

will pose great challenges.

5.0 Company and Management Summary

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5.1 Organizational Structure

The entrepreneur plans to recruit fifty employees for the start but later on increase this

number based on the demands. As the managing director, the entrepreneur will set up a

corporate arrangement for the firm and an annual success strategy, as well as monitor all the

arrangements to ensure that the firm meets its targets.

Figure 1. The Organizational Chart of Ideal Abaya Limited Company

5.2 Management Teams

The management team of Ideal Abaya Limited Company will comprise of four members who

will create cultures that employees enjoy working in. Members of this team will enhance

business by establishing an environment that boosts success, set group needs and objectives,

probe execution and systems used, initiate procedures needed for making choices, safeguard

the firm from challenges, as well as exploit bigger opportunities (Li, 2018). This team will be

expected to recognize challenges and solve conflicts amicably within the firm.

5.3 Management Departments

5.3.1 Marketing Department

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The marketing manager will be in charge of planning, coordination, and planning of

advertisements to influence clients to choose the firm’s products over those of the rivals

(Laursen & Thorlund, 2016). This employee will earn 11,877 AUD per month and will also

benefit from free health services excluding dental, employment visa and a paid vacation.

Under him, there will be eleven sales representatives who will each earn 4,156.95 AUD per

month and will be responsible for promoting and selling the firm’s abayas and sheilas, as well

as keep credit data, membership and database data.

5.3.2 Purchasing Department

The purchasing manager will order raw materials for making abayas and sheilas, thus will be

required to buy the best quality gears and products at most affordable costs. This employee

will earn 15,836 AUD per month and will also be entitled to a free health service excluding

dental, an employment visa, and a paid vacation (once in a year). Below him, there will be

five purchase executives who will ensure that the right quality and amount of materials are

purchased at the required time (Laursen & Thorlund, 2016). Every purchase executive will

earn 5,542.60 AUD per month with an employment visa and a paid vacation (once in a

month).

5.3.3 Production Department

The production manager will productively create items and administrations and ensure that

the correct sum is delivered at the right cost and level of value (Laursen & Thorlund, 2016).

This employee will earn 15,836 AUD per month alongside benefits of a paid vacation (once

in a year), an employment visa, and free health services excluding dental. Below him/her,

there will be ten production staffs who will assemble goods, check the quality of finished

goods and transport materials to other areas. There will also be five designers to fashion-up

the abayas and ten tailors to stitch them based on the designs needed. Each designer will earn

7,126.20 AUD per month alongside an employment visa and a one month paid vacation while
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every tailor will earn 4,156.95 AUD per month alongside an employment visa and a paid

vacation (once in a year).

5.3.4 Accounts Department

The accountant will prepare asset, income, expense, liability, and capital account entries

through compiling and analyzing account information (Laursen & Thorlund, 2016). This

employee will earn 17,815.50 AUD per month and will also get free health services. Below

him/her, there will be five assistant accountants who will maintain the office, serve clients

and agencies and ensure that it operates smoothly (Total Jobs Group Limited, 2015). Each

account assistant will earn 7,918 AUD alongside free health benefits, employment visa and a

once in a year paid vacation.

6.0 Execution

6.1 Plan of Operation

The first step for executing operations will entail choosing the product after studying setting

Australia and conducting market research. Afterward, the mission and vision statement of the

firm will be formulated. The organizational structure, which specifies the number of staff

needed and indicates the chain of command will be constructed. Competition analysis will be

done to determine their opportunities and threats. In the third phase, a market mix of the right

product, price, place, and promotion will be decided. In the fourth stage, legal procedures will

be followed while in the fifth phase, advertisements on the vacancies will be done via online

techniques or newspapers for recruiting competent and the required number of staff. In the

sixth phase, financial statements will be prepared to ensure the smooth operation of the

business. Lastly, a checking act will be conducted to enhance control and continuous

improvement of processes and products (Schonsleben, 2018).

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Choose Product
Study Environment
Market Research
Mission and Vision

Organizational Structure
Do check act
Competitor Analysis

Financial Plan Marketing Mix

Advertising for vacancies

Hiring Staff
Training Legal Formalities

Figure 2. Plan of Operation for Ideal Abaya Limited Company

6.2 Marketing and Sales Plan

To lure clients to the products and services offered by the Company, an efficient market mix

of product, price, place, and promotion is essential. The firm will make abayas of superior

quality and design to meet the needs of its clients. For the start, sales are expected to be low,

thus the sales agents will be taught the sales penetration strategy to ensure that low prices

(278 AUD) are charged for a short duration to attract more clients. After gaining customer

loyalty, prices will be increased to realize more profits. The price will be carefully set after

considering the consumer perceived value of the product, and the price charged by other

competitors.

To ensure that the consumers are aware of the products and brands sold, the abayas will be

advertised in magazines and newspapers (promotion strategy). The sales representatives will
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also do product promotion through building a good public relation and through word of

mouth to pass information. The entrepreneur will also choose the best place for marketing its

products to ensure convenient access. For instance, a shop will be rented in Sydney near a

busy commercial or residential area highly populated by the consumers targeted.

7.0 Financial Plan

7.1 A Summary of the Projected Financial Statements

Ideal Abaya Company’s Budgeted Income Statement (in AUD)

13 Year 1 Year 2 Year 3 Year 4 Year 5
Cost of goods sold 514,670 673,030 831, 390 1,029,340 1,227,290
Interest from bank 7,918 9,898 11,877 14,252 15, 836
Total 522, 588 682,928 843,267 1,043,592 1,243,126
Expenses
Rent 712,620 712,620 712,620 712,620 712,620
Salaries 251,595 251,595 251,595 251,595 251,595
Electricity 8,710 8,710 8,710 8,710 8,710
Utilities 9,106 9,106 9,106 9,106 9,106
Other expenses 1,029 1,029 1,029 1,029 1,029
Total 983,060 983,060 983,060 983,060 983,060
Total Profit/Loss -460,472 - 300,132 -139,793 60,532 260,066
(loss) (loss) (loss) (profit) (profit)
Table 1. Projected Financial Statements

8.0 Conclusion

Based on this thorough investigation, the business concept proposed is feasible as it addresses

the questions why, which, how and where. The business will succeed as it targets Muslim

women in Sydney who are at least 10 years old as they are currently facing challenges in

getting quality-designed traditional and modern abayas. Furthermore, Porter’s Five forces

proposed by Harris (2018) will be used to develop effective strategies through addressing

rivalries in the industry, bargaining power of the suppliers and buyers, the threat of new
NEW VENTURE BUSINESS PLAN 12

entrants and the threat of substitute products or services. The issue of high competition in the

industry will be solved by evaluating costs, benefits and techniques used. A steady and strong

relationship with the suppliers will also be maintained to limit their exploitations. The firm

will set up boundaries to limit the threat of new entrants while the threat of substitutes will be

reduced by offering unique and quality products, that can hardly exist in other industries and

firms.
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9.0 Appendix

Budgeted Balance Sheet of Ideal Abaya Company

Total Assets: Amount (AUD)
Furniture 316,918
Equipment 314,741
Supplies 158,677
Delivery Vans 191,695
Total 982,031
Liabilities: Amount (AUD)
Salaries 251,595
Rent 712,620
Electricity 8,710
Utilities 9,106
Total 982,031
Table 2. Budgeted Balance Sheet of Ideal Abaya Company

Figure 3. Distribution of Cash flow Activities

The high distribution percentage in operations cash flow indicates that Ideal Abaya Company

is a viable venture as cash mainly originate from the core business operations.
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Projected Cash Flow Statement

Ideal Abaya Company
FY Ended 31 Dec 2022
All figures in AUD
Cash Flow Operations
Net earnings 2,000,000
Additions to Cash
Depreciation 12,000
Decrease in Accounts Receivable 18,000
Increase in Accounts Payable 18,000
Increase in Taxes Payable 2,400

Subtractions from Cash

Increase in Inventory 36,000
Salaries 251,595
Purchase of Materials 300,000
Net Cash from Operations 1,462,805
Cash Flow from Investing
Land Purchase 590,000
Machine 300,000
Cash Flow from Financing
Issuance of Company Stocks 15,000
Cash Flow for FY Ended 31 Dec2022 587,805
Table 3. Projected Cash Flow Statement for Ideal Abaya Company

References
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Abaya Addict. (2015). It’s time for a brand made just for you. Retrieved from:

<http://www.abayaaddict.com/the-company/>

Harris, C. E. (2018). USA Apparel Manufacturing and Domestic Sourcing. In Contemporary

Case Studies on Fashion Production, Marketing and Operations (pp. 3-26). Springer,

Singapore.

Hassan, R. (2016). Australian Muslims: indicators of social inclusion. In Migration,

Citizenship and Intercultural Relations (pp. 63-76). Routledge.

Laursen, G. H., & Thorlund, J. (2016). Business analytics for managers: Taking business

intelligence beyond reporting. John Wiley & Sons.

Li, P. Y. (2018). Top management team characteristics and firm internationalization: The

moderating role of the size of middle managers. International Business Review, 27(1),

125-138.

Schönsleben, P. (2018). Integral logistics management: operations and supply chain

management within and across companies. CRC Press.

Totaljobs Group Ltd. (2015). Accounts assistant job description. Retrieved from

<http://www.totaljobs.com/careers-advice/job-profile/finance-jobs/accounts-

assistant-job-description>