Business Plan

Stitch it 4 me (Pvt) Ltd

No 04,
Flower Road
Colombo 03
Tel : 0112825879
www.stitchit4me.com
Contents

Executive summary ............................................................................................................................. 3

Business details ................................................................................................................................... 4
Vision ................................................................................................................................. 4
Mission............................................................................................................................... 4
Values ................................................................................................................................ 4
Stitch it 4 me Mobile Application ...................................................................................... 5
Industry and market analysis .............................................................................................................. 7
Economic overview: .......................................................................................................... 7
Market & Industry analysis:............................................................................................... 7
Customer Segmentation ..................................................................................................... 9
Target Market..................................................................................................................... 9
Positioning ....................................................................................................................... 10
Competitor analysis: ........................................................................................................ 11
value proposition’ ............................................................................................................................. 12
Marketing and Pricing strategy ......................................................................................................... 13
Marketing Strategy........................................................................................................... 13
Pricing strategy ................................................................................................................ 13
Operations plan ................................................................................................................................. 15
Management team and company structure........................................................................................ 17
SWOT Analysis ................................................................................................................................ 18
Financing .......................................................................................................................................... 19
Financial projection for the next 5 years ........................................................................................... 20
References ......................................................................................................................................... 22

Tables
Table 1:Segmentation........................................................................................9
Table 2: Unit Price and Cost ...........................................................................14
Table 3: Startup Cost.......................................................................................19
Table 4: Cash Flow forecast for 5 years..........................................................20
Table 5: Breakeven Analysis ..........................................................................21
Table 6: Balance sheet Year 01 .......................................................................21
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Figures
Figure 1: Mobile app interface ..........................................................................5
Figure 2:Market gap ..........................................................................................6
Figure 3: Porter's 5 forces .................................................................................8
Figure 4: Market statistics .................................................................................9
Figure 5: Target Market ..................................................................................10
Figure 6: Positioning .......................................................................................10
Figure 7: Competitor Product Vs Our Product ...............................................11
Figure 8: Value Proposition ............................................................................12
Figure 9:Operation Plan ..................................................................................15
Figure 10:Organisation Chart ..........................................................................17
Figure 11: Management Team ........................................................................17
Figure 12:SWOT .............................................................................................18
Figure 13: Capital Structure ............................................................................19

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Executive summary

Stitch it 4 me is fashion designing mobile application that enables the customers to create their
own fashion brand. The app is equipped with modern designing tools that enable the customers
to design their desired clothing, stitch it 4 me and get it delivered to their door step.

In Sri Lanka even though there seems to have a demand for customized clothing the need has
not been properly met by the current business community. Most of the present customized wear
are only limited to certain type of wear and are expensive. Also it takes a considerable amount
of time to get the garment stitched. Stitch it 4 me is mobile application that meet this gap.

A market analysis was conducted to obtain the perception of customized wear and readymade
garments. The entire market was divided into different segments based on demographic,
geographic and behavioral concerns and a viable segment is targeted to approach with the
business concept.

The sawing and distribution functions are outsourced to third parties. The mobile application
enables the customers to link with the talented dressmakers. The delivery is outsourced to a
trusted currier service company, promising faster and trustworthy service

A competent and experience management team is formed to ensure that the operations are well
managed to achieve the targets of the company.

The company is intents to be financed 60% with debt and 40% equity and expect to break even
and recover the investment during the third year.

Company intends to apply the market penetration strategy when pricing the product and mainly
focus on social media campaigns to attract and retain customers.

As per the financial forecast for the next 5 years, company expects to earn substantial profits
with the expansion of market share.

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Business details

Stitch it 4 me is a mobile application enables the users to obtain a desired customized garment
at the ease of the figure tip, delivered to the doorstep with a less lead time. The company Stitch
it 4 me (Pvt) Ltd was formed in 2019 as a fully owned subsidiary of a Sri Lankan Garment
Manufacturer IBI (Pvt) Ltd, specialized in ready-made garments. Being in the industry for more
than 15 years, an opportunity was identified for customized garments which has a high
customer demand yet a limited supply in the local Context. Customer Convenience is set as the
topmost priority in this business concept.

Vision
“we assist to create your own brand”

Mission

“We enable our clients to create their own brand image in the most convenient way by
connecting them to a talented pool of designers and dressmakers around the country”

Values

Integrity Partnership Convenience Excellence

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Figure 1: Mobile app interface

Source : Author created

Stitch it 4 me Mobile Application

Stitch it for me is a mobile application is equipped with improved designing tools which
enables the customers to create their own clothing design at the ease of their figure tip. Client
is just 5 steps away from creating their own customized clothing.

Step 01: Create customer profile with

measurements
Step 02: Create the design
Option 01: By using designing tools
Option 02: Create a sketch
Step 03: Obtain the design approval
Step 04: Set up the delivery location
Step 05: Payment

Stich it for me mainly focuses to address a common problem most women have when finding
their best outfit. Choosing to wear a readymade garment comes with its own costs. Finding an
outfit with right fit to the body size and shape could be difficult. On the other hand, finding
best match to fit the occasion is also challenge with preferred colours and design. Women tend
to waste lot of time and money finding the perfect fit.

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Figure 2:Market gap

Compiled by the Author

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Industry and market analysis

Economic overview:

Sri Lanka is a country specialized in textile and apparel manufacturing which involves 15% of
the workforce and recognized as a top apparel producing countries in the world. (statistics
2018). Sri Lanka possess a competent and skilled labour force for garment manufacturing.
Apart from the leading textile manufacturers and exporters there are vast number of home-
based small-scale garments catering to local demand.

According to world bank overview 2018, Sri Lanka is considered as middle-income earning
country with GDP per Capita of 4102. According to central bank report 2018, the
unemployment rate in Sri Lanka is close to 4.4%. As per the 2019 quarterly report on Labour
Force, Sri Lankan, female labour force participation rate is 34.9% (www.statistics.gov.lk/).
The rate is comparatively low. Having introduced a business like stitch it for me could
encourage household women to be actively participate in economically viable activity which
would also improve the household financial income among themselves.

The external value of the rupee was severely hit due to several incidents happened in both local
and global context and still in the processes of recovery with the government change in sri
Lankan. Greater hit on the tourism sector due to Easter Sunday attack and the heavy external
debt balances and repayment exerts a pressure on the rupee value (Subra, 2019). Sourcing raw
materials such as fabric and other accessories has a direct impact on rupee depreciation causing
a challenge when pricing the product.

Market & Industry analysis:

The designer clothing market records a year on year growth, where star performer is the
womenswear. The growth is driven as the consumers look for differentiation, newness and
exclusivity. (Reports.mintel.com, 2019).

Even though there is huge demand for customized clothing in Sri Lanka, the concept has not
much evolved among business community in the current context. Customized wear could be

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limited to certain types of clothing in Sri Lanka such as designer wear saree and jackets,
customized printed T shirts etc. And it is highly costly and time consuming to a tailor made
product in Sri Lanka. However, textile sector being one of the major employment creating
source, there are large number of people with the skill of dressmaking fragmented in the
country and yet not utilizing the maximum, this gap is intended to be bridged by bringing them
into one platform via stitch it 4 me to tap the untapped business opportunity.

Figure 3: Porter's 5 forces

Compiled by the aurthor

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Customer Segmentation

The market is segmented based on Demographic, geographic and Psychographic factors to

identify the most profitable market segment.

Table 1:Segmentation

Demographic Age Below 19 Between 20-35 Above 35

Factors
Gender Female Male
Income Below Rs.100,000 to 500,000 Above 500,000
Level 100,000
Geographic Factors Location Urban Suburbs Rural
Psychographic Lifestyle Busy Life Online Shopping Social Media
factors style Usage
Attitudes Fashion
Oriented
Source: Compiled by the author

A market survey was conducted by interviewing several people by introducing the business
concept, followed by a primary data analysis gathered from the published sources in Sri
Lanka.

Figure 4: Market statistics

Complied by the Author

Target Market

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Based on the market researches it was revealed, the product will be easily embraced by
female population residing in the western province of Sri Lanka who are exposed to online
shopping activities.

Figure 5: Target Market

Source: Compiled by the author

Positioning

Figure 6: Positioning

Source: Compiled by the author

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Competitor analysis:

Stitch it 4 me is the first Sri Lankan mobile application that offers customized wear to the local
market, hence there is no immediate competitors from an identical product. However the
fashion retailing industry in Sri lanka consist of huge number of players for readymade
garments and following are identified as top rankers in online fashion retailing as per
www.owler.com.

Source : www.owler.com

Competitor product vs our product

Our product: Customised Wear
Competitor product: Online Retail Shops
Mobile Application

Importance to customer
Assessment Us/Them Capability name
Low High
1 2 3 4 5 6
Produce a customised garment
and diliver to customer door step
Customers ability to choose
Us
materials

Unique capabilities
Best fit to the body measurements
Ready made garment
Them short delivery time
Cash on delivery
Comparively longer lead time
Us High relience on sub contractors
Unavialbility of required material
Weaknesses
Low customer satisfaction
Them High cost and effort to customers
to find the perfect fit
Figure 7: Competitor Product Vs Our Product

Source: Compiled by the author

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value proposition’

Figure 8: Value Proposition

Source: Compiled by the author

Key features this product that are distinctive from other competitive products are;
 User friendly Designing tools
 Option to create your own Designer wear or get the expert help
 Skilled dressmakers
 Short lead time
After Sales Services

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Marketing and Pricing strategy

Marketing Strategy

Stitch it 4 me is introduced to the customer with a slogan of “Create your own brand” as the
product enables the customers to become the designer of their own clothing with the expert
help. With stitch it 4 me, customer is just few steps away from being a fashion designer. The
improved user friendly designing tools and graphics help the customers to create their dream
outfit at an affordable price

The key selling point of Stitch it 4 me that differentiates form the competing products is the
customer convenience. This fact will be highlighted throughout the marketing campaigns
followed by following key selling points.

 User friendly designing tools

 Short lead time
 Home Delivery
 Affordable price

A product launch will be organized by the company by inviting renowned celebrities to the
event to enter to introduce the product and the event to be hosted at a star class hotel in
Colombo.

Further, the company intends to carry out a social media campaign as the company could reach
a wider audience with lesser cost. This enables the company to focus their marketing campaigns
on the target audience to introduce the product.

Company also intends to display cutouts and bill boards in highly populated areas

Pricing strategy

Sri Lankans are very price conscious, but will not accept any quality for a lower price.
(Archives.dailynews.lk, 2019). Therefore, the best pricing strategy be used is market penetration
pricing strategy, where initially prices are set low to capture a large market share.

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Cost plus pricing strategy will be used to determine the price. 38% markup is kept to the
variable cost to determine the price.

Table 2: Unit Price and Cost

Rs. Rs.
Selling Price per unit 2000
Material Cost 800
Designer Cost 100
Sawing Cost 400
Delivery Cost 150 -1450
Total Direct Cost

Profit margin per unit 550

Source: Compiled by the author

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Operations plan

Figure 9:Operation Plan

Source: Compiled by the author

When a customer requests a design via stitch it 4 me mobile application, the material
requirement will be analyzed. For this the data will be transmitted to the company ERP system
creating a sales order.

Material requirement for a particular design will be generated in the system and accordingly
the Warehouse management system will indicate the raw material availability. If any material
is not available the supply chain team, will be informed.

The In-house designers will give the approval to the customer for the design they have
requested.

Once the customer gives the delivery location, the total cost will be calculated and informed to
the price of the product.

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When customer confirms the order with an advance pay of 30%. A production order is created
in the system and dressmaker will be selected based on the availability and location close to
the customer.

Dressmakers are outsourced parties who operate as individual businesses. A piece rate will be
provided for them. Outsourcing this operation reduces the investment requirement for in-house
manufacturing.

The finished garment will be then transported to the desired customer location via outsourced
currier company who will be paid on delivery basis.

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Management team and company structure

CEO

Head of
Head of
CFO CTO Head of HR Supply
Marketing
Chain

App Quality Executive- Supply

Accountan Executive-
Developm Asurance sales and chain
t HRM
ent team Team marketing Mnager

Executive
Project Business Software UI/UX Store Executive- Executive-
supply
Manager Analyst Architecht Designers Manager Imports Transport
chain

Figure 10:Organisation Chart

Source: Compiled by the author

Figure 11: Management Team

Source: Compiled by the author

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SWOT Analysis

Figure 12:SWOT

Source: Compiled by the author

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Financing

Since the business is a mobile application base business the startup cost is very much less.

Table 3: Startup Cost

Startup Cost (Fixed) Value (Rs.)

App Development cost 2,500,000.00
Furniture and fittings 500,000.00
IT Equipment 1,500,000.00

Source: Compiled by the author

 The company intends to pay a monthly rental for the office premises.
 Marketing and branding cost is included in the other overheads category
 The 60% of the above fund requirement is intended to be finance by a 5-year loan at the
interest of 10%.
 Debt financing is prioritized as the company could derive the tax deductible benefits.
 Company is not having taxable profit during the first 5 years.
 Shareholders will be investing Rs.1.8Mn as the initial Capital

Fiancing method

Equity
40%

Debt
60%

Equity Debt

Figure 13: Capital Structure

Source: Compiled by the author

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Financial projection for the next 5 years

Table 4: Cash Flow forecast for 5 years

Cash flow Forecast

Target Population 10,000
Year 01 Year 02 Year 03 Year 04 Year 05
Target Market share 5% 10% 15% 18% 20%
No of Customers 500 1000 1500 1800 2000
Each Customer 5000 10000 15000 18000 20000
buying 10 units
average
Average Revenue
(unit price is Rs.2000) 10,000,00 20,000,000 30,000,00 36,000,00 40,000,000
0 0 0
Other Income (App
Advertising) 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000
Variable cost
Material Cost
4,000,000 8,000,000 12,000,00 14,400,00 16,000,000
0 0
Designer Cost
500,000 1,000,000 1,500,000 1,800,000 2,000,000
Sawing Cost
2,000,000 4,000,000 6,000,000 7,200,000 8,000,000
Delivery Cost
750,000 1,500,000 2,250,000 2,700,000 3,000,000
Fixed Cost
Application
Maintenance cost 500,000 500,000 500,000 500,000 500,000
Salary and Admin
Cost 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Rent & Other
Overhead cost 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Loan repayment and
interest 600,000 600,000 600,000 600,000 600,000
Contribution
(1,850,000 900,000 3,650,000 5,300,000 6,400,000
)
Source: Compiled by the author

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Table 5: Breakeven Analysis

Breakeven Analysis
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
(2,000,000) 1 2 3 4 5
(4,000,000)

Contribution Fixed Cost

Source: Compiled by the author

The business is expected to be break even after the 3rd year.

Table 6: Balance sheet Year 01

Balance Sheet (year 01)

Non-Current Asset
Furniture and Fittings 500,000
Mobile application 2,500,000
IT Equipment 1,500,000

Current asset
Stocks 500,000
Trade Receivable 500,000
Cash 500,000
6,000,000

Equity 1,800,000
Retained earnings -2,000,000

Non-Current Liability
Long term Loan 2,700,000

Current Liability
Trade payable
3,500,000
6,000,000
Source: Compiled by the author

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References
 Subra, 2019. Confidence Continues To Grow. LMD. Available At:

Https://Lmd.Lk/Confidence-Continues-To-Grow/ [Accessed December 26, 2019].

 Anon, Welcome. Department Of Census And Statistics-Sri Lanka. Available At:

Http://Www.Statistics.Gov.Lk/ [Accessed December 26, 2019].

 Anon, Mintel Reports: Consumer Market Analysis. Mintel.Com. Available At:

Http://Www.Reports.Mintel.Com/ [Accessed December 26, 2019].

 Archives.Dailynews.Lk. (2019). Dailynews Archives. [Online] Available At:

Http://Archives.Dailynews.Lk [Accessed 29 Dec. 2019].

.
.

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