business plan

CLOTHING CO.

-Business Proposal

Zhixiang Cai

Bin Lou

Shengqin Yi

4/29/2019

Table of Content

· Introduction ------- 1

· Advantages for the company and budget line----- 2

· Limitations for the company and budget line----- 4

· Human Resource management----- 5

· Balance Sheet ------ 11

· Conclusion -------17

Introduction:

As people known, the clothing brand is one of the most popular reputation in the United States of America and all around the world. The cloth that individual wears can be represented personal identity. For instance, there are some words and pictures that is designed on the cloth, which is some of consumers may admire and agree with the idea of designs. Additionally, there are some people may buy the cloth for improving the personal reputation. In other words, they are taking notice of the thought from the other people, and they want to get accepted the sense of identity. Moreover, there are some people may think it is easier to make friends if they are in fashion, so it is the same case with the taking notice of the thought from the other people.

The history of American Clothing Brand is very interesting. During the 80s, the representative of street fashions are workers clothes, skateboarding cloth and party style cloth. For instance, supreme, anti-social social club, off-white are the sample of street styles. Those cloth brands can show personality from an individual and result a large amount of profit . Therefore, those brands are types of product resource from our business.

There are some clothing brands that have a attracted culture. Thus, the idea of our business is to spread the value of clothing brands from the United States of America. Before the business is started, all contracts and agreements are needed to be signed from the original clothing brand. Moreover, to import some clothing brand is needed, and sell those brand as a third party company. Additionally, some of clothing brand are selling the limited cloth, and our consumers who have no chance to buy those clothes can buy the limited cloth from our company. In other words, all of our consumers have a chance to wear what they want to wear.

The benefit for doing the business is not only for the profit, but also for spreading out the culture of clothing brands, and the attracted value can be shared with our consumers. More importantly, The company is trying to help consumers who may not have a chance to buy their favorite and limited edition, it is our pleasure to help them to enjoy the happy life.

There are some resources that are needed for our company in order to help our business successful. Firstly, the database of general business and social market is needed, because information can help the company to understand the current social market. Second of all, questionnaire is very important for the business. For analyzing the questionnaire from the consumer, consumer psychology can be known and understood.

Advantages:

Sometimes budgeting may be a serious issue therefore in making decisions it is always crucial to evaluate what consumers can pay for it. In that way, the budget line which drag amount of consumers information in a model will help a lot. Using consumer budget line has the advantages.

First, consumer budget plays a key role in understanding if resources are enough to handle for all the costs, it may be challenging for individuals and even firms to understand the actual resources available within their reach, but through using a consumers budget line evaluation of resources, it will be easy to estimate the probability of resources before the expenses truely happened.

Secondly, consumer budget line also focus on information gather process . For an example, budget line could gather information that what the relationship between costs and relative profit. Consumer budget lines can be used to generate important statistical data the shows changes and avenues to save money.

Next, we believe our business and company have several advantages in these cloth area.

First, we transport a lot of cloth from every corner of world . The unique cloth from China, chipaur; the cloth from Japan,kimono and the cloth from others.We have plenty various cloth for consumer to choose.

Second, consumers are more willing to pay these unique cloth for increased price because they are unique and beautiful .

We also could connect with the mail service to enhance the speed, qulity shipping method to attract consumers .

Limitations:

Economists recognize the factor that consumer budget line is precisely not the only budgeting system and there are other budgeting systems that can be used such as performance budgeting with is a model routine model that can be used to evaluate factors such as invoice payments. The other model that can be used is zero-based budgeting model which is a model that begins from the very beginning of each financial period in contrast to directly or automatically carrying a budget item forward. Therefore economists recommend that management should give evidence for each item before including it into the final budget and the zero-based model is a useful model in identification and elimination of unwanted costs. Economists recommend such models because of the following limitations of the consumer budget line. The model doesn’t demonstrate the return on investment; in any business an investors seeks to get benefiting returns, the evolution of these returns can only be determined through concrete market evaluation and determination of profit gained with reference to the total expenses incurred during the process of investing and within a given investment period that has elapsed. Evaluation of the investment returns can’t be achieved through this model of budgeting. Also a line item expense that grows over time may seem excessive and welcome scrutiny when actually the manager can prove the rise for the item by pointing to increase revenue or increased performance, also if accompany realizes that costs are rising while income is not. Also regulating specific items in the budget can also promote inefficient micro-management

Human Resource

This refers to how the human resource department in a firm allocates fund to Human Resource activities with an enterprise. This includes funds for employing, salaries, benefits, talent management, training, succession plans, and workforce involvement and employee welfare programs. The human resource budget line depend on financial data, performance outcomes and historical data from each department. The human Resource budget document is important in predicting the future activities of the company.

Key information in the Human Resource budget line document includes the following:

a. Detailed prediction on the number of employees.

b. Employee turnover rates

c. Salary data.

d. Recruitment budget.

e. New benefits programs

f. Training and development.

g. Payroll expenses.

h. Overtime.

i. Incentive compensation

j. Strategic planning.

k. Human resource databases,

l. Intranet design and maintenance.

Importance of Human Resource Budget Line.

In any firm HR budgeting has the following benefits:

1. Plays a key role in preventing over employing cases.

2. Helps in providing information on staff needs

3. Plays a role in preventing under employing cases.

4. It is a key ay in attracting best skills in the company

5. It is the best way to use when formulating a plan for best skills a factor that reduces turnover.

Creating a human resource budget line

The process of creating a HR budget does not have one specific technique since it all depend on the company’s strategic plans even though majority of the budgets under human resource departments are done basing on the following procedures:

i. Review historical financial performance: understanding the past helps in analyzing and being able to predict the future. Therefore for HR to be able to budget and plan for the future, it has to start by reviewing the past budgets and strategic plans. The HR department that create objectives and highlight capital expenses with reference to historical performance.

ii. Selecting a budgeting criteria: selecting the most outstanding budgeting criteria for a company leads to proper analysis and evaluation of market structure. In most companies creating incremental budgets or using zero-based budgets is highly used.

iii. Evaluating actual time performance information/data: developing a concrete budget line/budget, really depends on the performance data of the company has been analyzed. The analysis on budget facts as they are in real time is also fundamental. This includes information on revenue, both departmental and organizational costs, staffing which includes (recruiting, hiring, turn-over) and employee compensation.

iv. Getting a detailed view on how finance affects operations: one source of performance information helps in analysis. When one is able to see wide picture of all financial and non-financial data one is able to:

1. .Outline comprehensive and realistic budget caps.

2. Understand where to create flexibility and changes in the budget.

3. Monitor budget’s performance in actual time.

Salary Summary:

Store Manager $38,049

Assistant Manager $33,000

Chef $33,000

Line Cook $15,360

Order Taker / Take-Out Order

Expediter

$14,400

Busser / Dine-In Food Delivery $14,400

	Balance Sheet
Assets	2019
Current Assets
	Cash	11,874
	Accounts receivable
	Inventory
	Prepaid expenses
	Short-term investments
	Total current assets	11,874
Fixed (Long-Term) Assets
	Long-term investments	1,208
	Property, plant, and equipment	15,340
	(Less accumulated depreciation)	(2,200)
	Intangible assets
	Total fixed assets	14,348
Other Assets
	Deferred income tax
	Other
	Total Other Assets	-
Total Assets	26,222
Liabilities and Owner's Equity
Current Liabilities
	Accounts payable	8,060
	Short-term loans
	Income taxes payable	3,145
	Accrued salaries and wages
	Unearned revenue
	Current portion of long-term debt
	Total current liabilities	11,205
Long-Term Liabilities
	Long-term debt	3,450
	Deferred income tax
	Other
	Total long-term liabilities	3,450
Owner's Equity
	Owner's investment	7,178
	Retained earnings	4,389
	Other
	Total owner's equity	11,567
Total Liabilities and Owner's Equity	26,222

Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets)	0.56
Current Ratio (Current Assets / Current Liabilities)	1.06
Working Capital (Current Assets - Current Liabilities)	669
Assets-to-Equity Ratio (Total Assets / Owner's Equity)	2.27
Debt-to-Equity Ratio (Total Liabilities / Owner's Equity)	1.27

Investors Page:

· Expense - $100k

· Investment - $500k

· Assets - $50k

· Loans - $350k

Expense:

1. Insurance: $30,000

2. Property tax: $23,000

3. Maintenance: $50,000

4. Depreciation: $4,000(10% per year)

5. Loan interest expense: (3%-5% per year)

6. Packaging Costs (including bottles, labels, corks, capsules, and case box materials)

Start Up Assets:

· Cash Required $175,000

· Startup Inventory $3,000

· Other Current Assets $10,000

· Long-term Assets $20,000

· Total Assets $208,000

Investment:

1. Building: $300 – $500

2. Initial Marketing: $4,000 – $20,000 (Label design, website, brochures, etc)

3. Initial Clothings and Sneakers Inventory: $3,000 – $7,000 (Labels, bottles, corks, foils)

4. Initial grape inventory: $8,400 – $80,400 (1 ton of grapes = 150 ~gallons or 750 bottles. Price per ton depends on variety but we will assume $1,200. Also assumes 1,000 – 10,000 gallons produced)

5. Office Equipment: $2,000 – $60,000

Market description:

Firstly, we overlook the market situation in the market of the United Stated. The table shown above is the market sale volume at the past two year and also predicted market sale for the next 5 years. For each component of market year at each year, we can conclude that appeal part always take the most percentage of the total market sales. American apparel demand will reach 145 billion in 2023, 50% higher than $2017 in 96 billion. Clothing market is essentially a cyclical fluctuation due to consumers' activities. Although clothing constitutes a basic necessity, consumers buy cheap goods and change their clothing less frequently during times of economic hardship and high unemployment. However, clothing product life cycle is relatively short, fashion constantly push the sales.

E-commerce is absolutely a contributor which push the apparel, accessories and footwear market to a new level. A lot of electricity retailers, like EBay, Macy’s, offer all kinds of brand clothing products with a lower price, which leading American consumers to choose online shopping. However, although a large number of small suppliers and buyers is a key for market development, no big obstacle to entrance market cause the competition is fierce. Many challenges and opportunities exist in this field of e-commerce. Many large retail brands have physical stores in every state, but they are not guaranteed to reach every customer's doorstep. E-commerce can bring more products to more consumers

From the table shown above, the largest consumer groups are people from 25-34 years. We consider to set 25-34 years as our customer target. Young people aged between 18 and 30 are the most personalized consumer group. Although consumers of this age group do not have the strongest consumption ability, their purchase frequency is more than people from other group. They usually pay more attention to style, quality and the feeling of brand. In order to effectively attract a large number of young customers, we can introduce fashion and brand factors into clothing design because it satisfies the young people the virtues of fashion consumption preference.

https://www.statista.com/outlook/244/109/fashion/united-states#market-globalRevenue

Conclusion:

The information that is shown from the prior section is very important for the business developed. The Clothing Co. can help the target consumer to know the attracted culture in the particular society. Additionally, the target consumer in Clothing Co can buy the limited edition in the convenient condition.