Business plan

STUDENT EXAMINATION NUMBERS:

Y3858956

Y3868524

Y3860923

Y3866725

Y3867826

MODULE NO: MAN00001l

MODULE TITLE: Business Planning

Module Tutor: Claire Sinclair

Essay Title: Group Business Plan

GROUP Number H4 - Uniformed

or name

(if applicable)

Word Count: 5124

Uniformed

Business plan

Providing lower cost school uniforms that will help resolve the consequences of fast fashion

Table of Contents

Executive summary …………………………………………….……..…4

1.0 Business details ………………………………………………...…4

2.0 Industry and market analysis

2.1 Industry Analysis………………………………………….……5

2.2 Market Analysis……………………...…………………………6

2.3 Customers and value proposition …………………….………9

3.0 Marketing and sales

3.1 Marketing Objectives ………………………….………..…10

3.2 Marketing Plan……………………………….…………..…10

4.0 Operations and Resources ……………………..……..…….…….16

5.0 Management team, personnel, and company structure ……..18

6.0 Legal and industry requirements …………………………..……20

7.0 Financing & financial forecasts……………………………..……22

8.0 Risk assessment

8.1 Critical Success Factors……………………………….…24

8.2 PESTLE Analysis of Risks…………………………….…24

9.0 Beyond Start-up

9.1 Short term development………………………..…….…27

9.2 Long term development…………………………….…28

Appendices………………………………………………………….….30

Reference List…………………………………..…………..…. ……34

Executive Summary

Every year, the issue of wearing uniforms could be popular among people from all kinds of cultural backgrounds, which stimulates thousands of companies to cooperate with multiple famous brands to establish a special uniform accordant with the school spirit. However, many of the students who are from middle-class families, do not quite need that kind of uniform as the uniform might be too expensive for them that takes too much expecting fees or expenses as their parents think or plan. At the same time, there are plenty of old garments that go to the market, which are mostly used as second materials for other things or accessories for people. It is a great chance for us to integrate the two together meeting the requirement for the students from middle-classed or poorer families to get cheaper uniforms and the massive garments to be seconded made the best use of. Our company just provides the chances to recycle these old garments and make them as the uniform for these students. With multiple methods to be done by our company, the sustainability for making the best use of the materials could be maintained to protect the environment and also help students and parents spend less money to get the uniform accordant to the school regulations. This is the core essence for starting this business. The business plan includes business several parts such as industry and market analysis, customers and value proposition, marketing sales, management, legal requirements, financing and risk assessments to comprehensively illustrate how the business works.

1.0 Business details

In order to carry out this business, we have to make the target very clear to every department. As a matter of fact, our company is just to provide the chance between school and students of different ages. Thus, the details of our business would be focused on the characters and requirements of students and the products that to be offered by different schools.

First of all, we could go to different schools, focusing on their detailed requirement for the uniforms they require. In this situation, we could also get familiar with the situations to the students’ ranges, being clear of the properties of the uniforms. After knowing the requirements from schools, we would try to recycle the old uniforms or garments which could be used twice. Because the uniforms that we are about to make are for students basically, so we have to promise the quality of these recycled garments. We would choose the garments that are above 80% new and those which cannot meet the requirement would not be chosen as the raw materials for making new uniforms in our companies. Next, the raw materials that we recycle from the market would be directly transported to the manufacturer in London to reproduce and design these raw materials to make them the new uniforms based on the regulations and requirements that we collect from schools. After the products are made, we could deliver it to the stores and display them on the shop window. The prices for the products would be evaluated and finally placed based on the previous market research. The uniforms that we produce could be lent or bought by parents or students who have this requirement so the prices for these products would be at least half cheaper than the products in the market.

2.0 Industry and Market Analysis

2.1 Industry Analysis

Current UK school uniform suppliers come with one of two major issues: their uniforms are either too expensive or they contribute to the growing issue of fast fashion as 350,000 tonnes of unwanted clothing head to UK landfills every year (WRAP, 2012). At Uniformed we are aiming to provide school uniforms that serve as a solution to both of these issues. Offering parents with a cheaper alternative, that are made entirely out of recycled clothing, without skipping out on quality.

For the meantime there are little-no direct substitutes for a school uniform, even though there is no legislation regarding the wearing of school uniforms. The decision falls on the individual schools, and it is traditional custom that school children in the UK wear them. This is not to say that it will not change in the future, although there are no signs of doing so.

Uniformed’s target market is the low end of the market. We aim to satisfy the needs of those looking to save money on school uniforms, so largely low-income families, in the (specific?) London area. As well as those who are conscious of the environmental effects of fast-fashion and seeking an eco-friendlier alternative.

The ‘back to school’ market is growing year on year as the latest research from Mintel (2019) estimates that the back-to-school market was worth £1.16 billion (up 36% from the previous year) in 2018, with the number of children in school continuously growing (see figure 1). This paired with the increasing spending on school uniforms (see Market Analysis) leads us to believe this industry is a safe one to enter, with considerable profit potential. With the end goal being to supply school children up and down the country with our cheaper, more sustainable uniforms.

Figure 1: School Population: Primary, Secondary, All schools (School census, 2019).

Year	State funded primary school pupils	State funded secondary school pupils	State funded school pupils	All school type pupils (including independent schools)
2013	4,309,580	3,210,120	7,519,700	8,249,810
2014	4,416,710	3,181,360	7,598,070	8,331,385
2015	4,510,310	3,184,730	7,695,040	8,438,145
2016	4,615,170	3,193,420	7,808,590	8,559,540
2017	4,689,660	3,223,090	7,912,750	8,669,085
2018	4,716,245	3,258,450	7,974,695	8,735,100
2019	4,727,090	3,327,970	8,055,060	8,819,765

There are no specific taxes on textile production, only costs related to imports/exports which are irrelevant given that we do not plan to import materials nor export our products. Government regulation is relaxed – the list of guidelines is addressed in the market analysis. No new issues are expected to arise with the impending exit from the European Union.

2.2 Market Analysis

Mintel estimates that the back-to-school market was worth £1.16 billion in 2018. This is a huge market with lots of opportunity for new players and an even bigger potential to undercut the market given the continuous rise in prices of school uniforms. The Department for Education (DfE) asked 1183 parents about the cost of school uniforms in 2015 and (adjusted for inflation) the figures came to £217 for a primary school girl, and £207 for a boy.

To begin with, we will be aiming to target 30 schools in the London area, selling on average to 20% of the students in that school. Given the average number of children in primary schools is 281 (Staufenberg, 2018), this gives us an estimated number of customers per school of 56, and thus, 1860 estimated customers overall.

Competitors competencies vary, with some being highly established and respected suppliers specialising in quality, and others looking to provide simpler options at a cheaper price. Some of the specialist retailers are deploying eco-friendly ranges, but none of our competitors can match us on price nor environmental protectionist measures.

Figure 2: Table comparing competitors against Uniformed

Company	Competitor 1 (Uniform Direct)	Competitor 2 (Stevenson’s)	Competitor 3 (David Luke)	Competitor 4 (Supermarkets)	Our Company (Uniformed)
Revenues (£)	xxxxxxx	130,400,000	44,480,000	xxxxxxx
No. of Employees	xxxxxxx (small company)	212	25	xxxxxxx (large amount)
Size	5 stores	28 (16 high street, 12 on campus)	10 online stockists, 50+ in-store stockists	xxxxxxx (large amount)	Online shop
Price	Low-Medium (collection dependent)	High	High	Low-Medium (supermarket dependent)	Low
Quality	Low-Medium (collection dependent)	High, bespoke products offered	Medium, some bespoke products	Medium-Low (supermarket dependent)	Medium
Choice	Low	Very Large	Moderate	Moderate-Large (Supermarket dependent)	Medium
Delivery	Free on orders over £25, priority delivery available	Worldwide – price dependent on order size.	Done through stockists	Excellent delivery services, free on expensive orders, express delivery offered.	Nationwide – price dependent on order size. Free on orders exceeding £100.
Eco-friendly?	No eco-friendly products	Endorser of ‘Old School Uniform’. All packaging they use is recycled.	Eco-Uniform range using plastic bottles to make the polyester in products.	Borderline fast-fashion activity. Some chains will package with recycled materials but overall very bad for the environment.	100% made out of recycled clothing. Packaging made of recycled materials too.

Sources: RocketReach, David Luke website, Stevenson’s Website, M&S website, Tesco’s website.

The lack of eco-friendly products on the market offer a gaping hole for us to slot in to. Whilst some competitors have eco-friendly ranges, we are the first and only provider in which 100% of our activity is eco-friendly. Uniformed are fully committed and uncompromising in our product and message. And everything that we do, goes towards creating a financially cheaper alternative for parents, without skipping out on quality by sourcing our materials from the leading used clothing provider in the UK (ukusedclothes.co.uk). To further ensure quality we only accept clothing in their “Cream” range which consist of new/nearly new clothing from UK high street brands ONLY.

We aim to create a trendy & desirable range to move focus from the idea that it is “recycled clothing”. It’s important to us to reaffirm that they aren’t old/reused clothing, we have taken something old and made it into something new. We intend on being as transparent about the process as possible to show kids/parents that these aren’t old or ruined hand-me-downs, but new, clean, eco-friendly alternatives.

When it comes to barriers to entry concerning potential future competitors, costs are low which is an issue and we don’t have substantial funding to corner off the market. However, with sufficient funding we will be able to expand production and make it difficult for potential competitors to replicate our model. We are building a strong relationship with our suppliers hoping to bargain lower prices with larger orders. There is no current supplier making new uniforms out of recycled clothes/materials. We will be successful because Uniformed presents an innovative way to provide eco-friendly uniforms for kids. The nature of our production process means that we are not at risk of running out of cheap materials/ingredients.

Regulation in this industry is extremely relaxed, within the wider textile industry the main elements are:

· General obligation to state the full fibre composition of textile products

· Exemption applicable to customised products made by self-employed tailors

· Empowerment of the European Commission to adopt delegated acts amending the technical Annexes of the Regulation, in line with Article 290 of the Treaty on the Functioning of the European Union.

2.3 Customer Value Proposition

Save: your money and the planet.

Paying less towards a better environment for future generations. Purchasing our uniforms over our competitors means you can be part of a solution to the fast fashion problem and save money on your children’s uniforms whilst you do so.

3.0 Marketing strategy

3.1 Marketing Objectives

Our marketing aims include:

- To build and maintain the loyalty of our customers through relationship marketing

- To eventually achieve brand awareness as one of the most environmentally sustainable uniform production companies

- To gradually expand our base across London, allowing us to further expand our reputation

Our marketing mix is a tool that will enable us to achieve our marketing objectives (Jobber, 2013).

3.2 Marketing plan

Target market

Our target market is children from low-income backgrounds with household incomes below £30,000. One in six families are forced to cut back on food and other basic essentials to afford their children’s school uniform (Battersby, 2019). In 2018 there were over 2.74 million children living in families in relative low income (Gov.UK, 2020). Therefore, the size of this segment is very large in comparison with the overall market.

Our products will be at a lower cost to our competitors, enabling our company to be a suitable option to those from low-income backgrounds. Additionally, at first, we will only target children in primary school, from the ages of 5 to 11 years, due to our lack of resources, as less materials will be required. Then, once growth is achieved, our company will establish a segment expansion strategy into all school uniform clothing (Shaw, 2012).

Branding and Positioning

The company will create their brand awareness primarily through word-of-the-mouth. Once the first initial contacts are made, we are hopeful word will spread. Eventually, as our company expands, schools will reach out to us to provide their schools with our eco-friendly uniforms. Our main focus is providing prosperous value to our first schools, thereby building our brand as a reputable organisation. Uniformed will utilize their environmentally sustainable image to create a memorable and meaningful aspect to the brand through storytelling.

Positioning involves the design of the company’s image and offering, creating a distinct competitive position in the targeted consumer’s mind. Uniformed will position themselves as a supplier of environmentally sustainable uniforms for primary school children. The organisation will be most beneficial for the environment, in relation to our competitors, thereby providing competitive advantage. Additionally, the lower cost of our product in comparison with our well-known competitors will further successfully position the company to attract the low-income segment.

Marketing Mix

The marketing mix consists of the 7P’s model, enabling Uniformed to portray all service operations within the market. The 7P’s model is a more recently developed model than the 4P’s model, which only consists of product, price, place and promotion (Ivy, 2008). The marketing mix is highly relevant to the company’s overall marketing plan but may need to be adjusted as the company grows.

Product

Uniformed sells a range of clothing items in primary school uniforms for children. These uniforms are entirely reproduced from second-hand clothing. Our product variety is large due to the different types of clothing required.

Figure 3: Uniform items list

Girls uniform	Girls sportswear	Boys uniform	Boys sportswear
Blouse	T-shirt	Shirt	T-shirt
Blazer	Shorts	Blazer	Shorts
Jumper	Jumper	Jumper	Jumper
Skirt	Skort	Shorts	Tracksuit
Pinafore	Tracksuit	Trousers	Socks
Tights	Socks	Socks
Socks

Customers can choose to purchase any variety of clothing dependent on their requirements, for example, some schools require girls to wear skirts, while others require pinafores. The selection of clothing items have been designed to meet the needs of all customers. In regard to Ansoff’s Matrix, Uniformed is undergoing product development. This is where the innovative construction of second-hand clothing takes place in an already established school uniform market (Ansoff, 1957). The modification of our product through utilizing previously owned clothing is an inventive approach to reducing the impacts of fast fashion.

All of our clothing will be fitted based on these age range brackets:

· 5 to 6 years

· 7 to 8 years

· 9 to 10 years

· 11 to 12 years

Price

In our calculation of price, we have summarised uniforms’ as a whole to provide a widened outlook on the cost of our products. Our aim is to price our products at a strict minimum of 5% below our competitors. Thereby, visibly highlighting our lower cost of products, enabling us to attract our targeted segment. This shows our competitive pricing strategy, constructed through Porter’s Five Forces analysis (Porter, 1980). We are aiming to achieve a matched or reduced price for our products, when compared with our competitors, to ensure Uniformed is a cheaper alternative.

Figure 4: Table showing cost of item for boys’ uniform for 11 to 12 years

Boys uniform	Cost per item £	Boys sportswear	Cost per item £
Shirt	1.30	T-shirt	0.80
Blazer	8.00	Shorts	1.30
Jumper	1.70	Jumper	1.70
Shorts	2.20	Tracksuit	3.00
Trousers	2.80	Socks (pair of 2)	0.50
Socks (pair of 2)	0.50

Figure 5: Table showing cost of item for girls’ uniform for 11 to 12 years

Girls uniform	Cost per item £	Girls sportswear	Cost per item £
Blouse	1.30	T-shirt	0.80
Blazer	8.00	Shorts	1.30
Jumper	1.70	Jumper	1.70
Skirt	2.80	Skort	2.80
Pinafore	3.50	Tracksuit	3.00
Tights (pair of 2)	1.50	Socks (pair of 2)	0.50
Socks (pair of 2)	0.50

Our product will vary slightly based on age. This summary above is based on the highest age of 11 to 12 years. Our product cost will decrease by 15p for every reduced age bracket, for example, a girls’ blouse at 7 to 8 years will cost £1.00. By providing an outline of our product cost per item, it allows our customers to decide on the specific quantity of the product.

We are aware there will be a peak of purchase in the months of July and August before the new school year begins. However, this will not impact our production because our research has indicated school uniform items will constantly be required throughout the year due to damage and lost property. Uniformed aim to reach an estimated 15% growth per year, with a minimum of 1,000 orders of our items within the first year, ensuring our reputable brand expansion as well. We have set a goal to reach over 6,000 orders of our items after 5 years.

Place

Our manufacturing and production will occur in London with Appareltasker. This manufacturing company will receive the second-hand clothing from UK Used Clothing Ltd and will produce our uniforms utilizing these materials. Our manufacturer is located in Epsom Street, London. London is a suitable location for our business to grow due to its high population and high percentage of low-income households. This will be the only physical workplace that will be required because all manufactured clothing will be shipped directly to our customers. As our company grows and evolves, it is predicted our business may expand into other areas outside of London, dependent on our rate of success.

The sole location for contacting our company will be through our website. This will provide all contact details, such as our telephone number and email, enabling schools to contact us when needed. It is expected within especially the first year of operation we will be the ones reaching out to our potential customers.

Promotion

Uniformed will use their promotional efforts through creating an online presence to gain brand awareness. By using social media applications, such as Instagram and Facebook, this will enable the company to create a familiar image. This direct marketing enables the company to connect with potential customers. The exponential growth of social media and networking over recent years highlights the significance of this strategy for technological adaptation and future growth (Smith, 2019).

People

Due to the limited direct contact with our customers, our digital customer service will provide an optimum high-quality experience, ensuring our customer loyalty. Providing an effective online customer service will create a desirable reputation for the company.

Process

Acquiring our second-hand clothing from UK Used Clothing Ltd, ensuring the rapid production of our uniforms via Appareltasker, and transporting our products to our customers demonstrates the importance of an efficient supply chain. We understand the importance of minimising this time period to ensure our customers’ satisfaction, while abiding by our environmental sustainability policies.

Physical Evidence

We appreciate our customers are taking a risk of uncertainty in regard to our product, as there is no evidence until the product has been delivered. However, one strategy that will resolve this issue is meeting with potential clients before purchase and presenting them with samples of our uniform items. This reassures customers the expected quality they will receive if they choose to purchase. This strategy will most likely be implemented for our first initial customers, until we gain a reliable reputation.

4.0 Operations Strategy

Location

Uniformed does not have any business property, enabling the company advantageous flexibility and choice. This may change as the company expands, where we may purchase a shop location, but currently is unavailable due to the lack of resources. It may be more beneficial to gain a location once the funds are achieved so prospective customers visually inspect the clothing before purchase, reducing consumer purchase uncertainty (Littler and Melanthiou, 2006). Additionally, the disadvantage of not having a specific location means customers will have an increased wait time per order. Whereas, a shop could hold products immediately ready for sale, resulting in no customer wait time for low quantity orders.

Manufacturer facilities

All second-hand clothing materials will be purchased from UK Used Clothing Ltd and will be transported directly to Appareltasker to be manufactured into our school uniforms. They will produce the clothing within 4 weeks. Once orders have been produced, our van will collect those orders and transport them to the customer. Most customers will need to be in a close proximity within the M25. This ensures our customers are a close distance to our manufacturer, which will reduce our pollution damage via transportation. It is more beneficial to outsource our production processes due to the viable complexity and large variety of machinery required to produce these uniforms. Additionally, outsourcing to a large established manufacturer prevents restrictions on our production capacity.

Figure 6: Location of Appareltasker in London from map view

Procurement

Appareltasker has been chosen as our manufacturer due to their principled environmental policies. These policies coincide with our environmental standards, ensuring zero waste production, while reducing environmental pollution. We will enter a short-term contractual agreement of 1 year with Appareltasker. This will ensure us supplier-dependability, while still allowing flexibility due to the short time arrangement. If this arrangement is undesirable after the contract has expired, there are various other suitable options for our production.

Management-information systems and Information Technology

The website will rely on utilizing information technology. Our website will be created by our employees with vast knowledge on design and IT. This website will be simple and straightforward, with the primary purpose of providing customers contact information to the management team.

Weekly sales will be recorded on a spreadsheet through Microsoft Excel, which will be evaluated. Additionally, annual trends will be documented, allowing any seasonal trends to be classified. These documents will provide management with the necessary knowledge to certify enterprise success, while determining if company modification is required.

5.0 Management team, personnel, and company structure

Management team

As a matter of fact, in our company, our management team consists of several people. One is every experienced in marketing, who is very clear of every circle in how to produce and launch the product. This individual could make less than half the total investment to the company. The other is the shareholder who could place the biggest investment for the company. All of them together form the management team, making the decision for marketing and pricing. And we have the authority for all the measures of Human Resources. The leaders in every department are responsible for the shareholders.

Personnel

Uniformed is established by several shareholders. They are the biggest decision makers in our company. Olivia is good at communicating with people, so she is in the human resource department for the detailed working performance evaluation. Kim Lihong is very familiar with the pricing strategy, so he is the leader in the marketing department. Eleanor Marshall likes to be outside with new things who are good at technology and science, so he is in the department of manufacturing.

Company structure

The company is in charge of several founders. All the big decisions that the company makes have to be determined and judged by the founders and investors.

The company has three important departments. Apart from the shareholders, there is a human resources department, which is responsible for evaluating the working performance for the internal staff, including making adjustments to the Human Resources and evaluating incentives and salaries. Marketing and sales department is responsible for making promotions and pricing strategies. Members in this department are responsible for getting information of potential clients and customers, making effective communication among them and giving possible solutions, maintaining the customer relationships. This department is very closely related with shareholders as the decisions this department makes should be determined and final judged by shareholders. Manufacturing department is responsible for manufacturing products and recycling raw materials for the products.

In the three departments, each of them has one department leader, who evaluates and guides the work of the team members. There are three to four members in each department.

6.0 Legal and Industrial Requirements

Our company is new in the market and will follow all the legal and industrial laws as stipulated by the UK Business Acts to avoid any penalties. The company name will first be registered so as to acquire the certificate of incorporation, the new company’s memorandum and articles. Registration will also ensure our recognition by the tax body. As the business progresses, we will be keeping our structural registration up to date. By doing so, the company will be able to renew its work permits, and to submit annual tax returns as required by the national laws. The company will not only submit tax returns on goods sold but also ensure that all the workers tax returns are up to date. Also, under the business structure, we will ensure that we design our own trademarks and pledge to renew them after every 10 years as required by the law.

As the company requirement, we will develop our organisation structure. We will use a hierarchical structure with a top-down communication structure. The highest level will be the Board of Directors where all of us (the business owners) will fall. We will divide our workforce into production, maintenance and procurement departments. Each department will be headed by a manager under whom specific workers will be employed. The structure is shown below. Initially, no employee will be hired. We will divide the tasks among ourselves assuming that no breakdowns will occur.

Figure 7: The organisation structure of the Uniformed Company.

We are strictly committed to ensure that the company works within its legal boundaries and that it curbs any risks pertaining legal complications as regards employment strategies. The company will bear all the legal employers liability concerning the employees’ health and wellness. “Your employer will be responsible for your health and safety while you are at work” (Barret, 2016) . Although we, the stakeholders, are going to the founding employees of this company, insurance strategies will be laid down as demanded by the employee acts.

We will also be responsible for protecting all our employees and customers’ data. As required by the advertisement laws in UK, the company while designing its marketing and recruiting strategies will incorporate the issue of gender, race and social class diversities. “Employment discrimination statutes prohibit employers from discriminating against individuals on the basis of protected characteristics like race or sex” (Chase, 2020). Our company will find ways of reaching all social classes in a friendly manner. Our social media advertisement, for instance, will involve both gender and all races present in London. As a data protection strategy, this company will create and officiate a private website, accessible only to key stakeholders. We are doing this in the spirit of protecting our own products from competitors, protecting our customers addresses and protecting what is called the company’s secret. This will be done through enhancing our data monitoring and even the physical surveillance. We will install CCTV cameras and keep all recordings on the website. No handwritten documents shall be made. The data protection rule in the UK requires that one must ensure customers information is kept secure, accurate and up to date (Ziegler, 2019). Any customer or employee who shares information with us will therefore be able to retrieve them anytime with the help of our management. As the company grows, we will create and run our own private cloud for storage purposes, bearing in mind the various data security threats witnessed in public cloud platforms.

7.0 Financing and Financial Forecasts

In year zero, all costs will be from our pockets as the proprietors of the business. We will finance the land acquisition, equipment purchase, installation and the plant commissioning costs. We will start by renting a 50 by 40 m hall for production at £600 per month which is £3600 per year. We are estimating a total of £500,000 for machine and other equipment acquisition. The total initial costs are; therefore, £7200+£500,000=£507,200. The raw materials are priced as illustrated in the market analysis section above. The company will be accepting mixtures of both adult and children clothing creams provided they pass our quality tests. This mix goes for averagely £2 per kilogram.

At this stage we will assume that every buyer will be purchasing the entire uniform (both class-wear and games skirt). This will roughly require about 5 kg of raw materials. We are targeting a total of 1680 pupils from the 30 schools in London but only 1000 orders are projected for the first year. This will require about 5000 kg of the raw materials costing us £10,000. We will keep 20% of this capital for paying for all utility requirements in the company. At this stage, we are our own employees, and in order to grow the company, we will not consider monthly salaries. All the profits will be channelled back to the company’s growth. Another mandatory cost will be tax. The tax rate is currently 19 %.

We will then carry out a sensitivity analysis to forecast for profits, expenses and the break-even production point. Assuming that the number of female students equals the number of male students, and with the projection1000 orders for the first year, 500 male and 500 female orders will be made. From the costs displayed in the tables above, a female student's full purchase costs £28.90 while that of a male student = £23.8. This averages to £ (23.80 + 28.90) = £57.20 for both genders. The orders are projected to increase by 15% yearly for the first 5 years.

The sensitivity analysis provides the cash flow for the first three years. Based on production expenditure, depreciations and salaries, every production year provides profit that surpasses the year’s capital inputs as shown in the figures below. Cumulatively, at the end of year 3, the company has made a profit of £15372.01. At the end of year 3 however, the investment cost has not achieved.

Figure 8: Sensitivity cash flow analysis for Uniformed Company.

If the start-up cost is introduced, the project breaks even in year 14 as shown in the figure below.

Figure 9: Break-even analysis of Uniformed Company

8.0 Risk Assessment

8.1 Critical Success Factors

· Choosing the best pricing model that allows the company to benefit from the low cost of raw materials, and thus remain competitive in the market

· Picking the best location to operate from so as to secure maximum sales potential and reach as many customer bases as possible

· Maintain good relationships with suppliers

· Good links with schools, as the largest customer base

8.2 PESTLE Analysis of Risks

Figure 10: The PESTLE risks likelihood of occurrence and impact

PESTLE Risk	Occurrence Likelihood (1=very low, 5=very high)	Impact (1=very low, 5=very high)
Political	2	3
Economic	2	4
Social	5	3
Technological	4	2
Legal	3	2
Environmental	1	5

Figure 11: Scatter graph, showing the spread of the data in the table above.

9.0 Beyond Start-up

9.1 Short term development

After the first three years, we intend to expand to other locations particularly around the southeast. A new location should be aimed to be opened every few years using the revenue from the business, to expand the customer base. These new location ventures can be financed through a multitude of different ways, the main aim is that this is through the profits which can be reinvested.

9.2 Long term development

Ansoff’s Matrix

	Existing Product	New Product
Existing Market	Market Penetration	Product Development
New Market	Market Development	Diversification

Market Penetration

· The business aims to further penetrate the close areas of the market within London moving to areas such as Dagenham ,Lewisham and Richmond.

Market Development

· Furthermore, the business will move to develop the market and expand production to reach new locations and markets. In the nearer future the south-east will be the aim for development. But beyond that the business will aim to expand to other major cities such as Leeds and Birmingham.

Product Development

· The business may expand into new products within the same market. For instance, targeting clothing merchandise for clubs and school trips that students may wish to purchase. This may also offer the potential to further spread the income of the firm across a greater time period as these products purchase wouldn’t be highly concentrated around the September period.

Diversification

· The company may expand to making uniforms for other public services such as for nurses and police officers. This would lead to us entering a new market and making new products. This would therefore come with more significant risks in comparison to the other 4 areas of Ansoff’s matrix.

Appendices

SWOT Analysis

Strengths · Relatively low materials costs · Low cost per unit makes pricing strategies much easier · Clear competitive advantage · Sustainability appeal, more attractive to consumers	Weaknesses · May be difficult to get lenders to allow us to borrow as we are not well known and have few collaterals · As a new business we will have to pay for supplies up front with cash instead of on credit. · Location and equipment costs high · Large reliance on suppliers
Opportunities · Expand the business to new locations within London · Branch out into further locations in the southeast and major cities in the UK. · Produce uniforms to other public services	Threats · Sales are seasonal based; a large proportion of demand is only in the school summer holiday period. · A proportion of people cannot afford school uniforms at all, thus rendering our competitive advantage useless.

Porters’ Five Forces Analysis

Threat of new entrants (Medium)

- The market has fairly high fixed costs associated with entry so new entrants would have to have large amounts of capital resources available to enter the market.

Threat of substitutes (Low)

- There is little threat of substitutes within the industry unless there is a change to policies within schools regarding uniforms.

Bargaining Power of Suppliers (High)

- It is difficult to change suppliers due to the specialised nature of the materials the business is purchasing, however alternatives do exist in the market, so the suppliers do not have total control

- It is not possible to switch to competitors in the production of our goods as the purpose of the business in its sustainability mission is to make use of recycled clothing and be able to resell this at lower prices to help benefit lower income families.

Bargaining Power of Buyers (High)

- Buyers for the business have fairly high bargaining power as the ethos of the business is to satisfice them, thus they have a large amount of negotiating power.

- Also, the market is fairly saturated so immediately buyers have more power.

Rivalry Among Existing Competitors (Medium)

- The market is fairly saturated, so this increases the rivalry amongst firms in the industry, which thus means rivalry is fairly high.

- However, the business should have lower material costs in comparison to other firms in the industry which should allow a competitive advantage.

Social Media Pages

Facebook Page for Uniformed:

Instagram page for Uniformed

Financing

Managing Director Expenses

· Salary

· The managing director will be offered a salary

· Pension Provision

· As this only a start-up pension provision won’t be considered for the managing director until at minimum a three-year time period.

· Travel Expenses

· Towards business related travel for the managing director shall pay for the first 2000 miles. This shall come at a cost of £232, based on average cost per mile of 11.6p.

· Mobile Phone Contract

· The managing director to operate shall have the expense of a mobile phone contract costing £25 a month for three years.

Accountancy Fees

1. Incorporation Fee

· At the start of the operations the company has to register with Companies House as a limited liability company. This is a one-off fee of £12

2. Direct Accountancy fees

· A monthly cost of £85 shall be incurred towards the following things:

· Completion of accounts

· Accounts of companies house

· Tax returns

· Directors pay

· Employee pay transfers and payslips

3. Audit

· As the company is only a startup it will not reach the requirements that mean it is necessary to have an independent auditor enter the company thus no fees need to be accounted towards auditing.

Legal Fees

This cost shall come from the necessary need for preparation against identified risks in the risk assessment. A solicitor can help with issues involving cash flow and bad debts, alongside insurance, franchising, licenses and issuing shares. In particular nay legal consultation engaged in the business shall be used for:

· The protection of ideas (Intellectual Property)

· Intellectual Property refers to ideas created by the business that they also legally own. Solicitors can help protect designs and brand specific content from competitors to protect the brand and competitive advantage of the business.

Lawyers for your business offer free consultations for the first 30 minutes to small businesses who have a turnover of less than 25million.

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