Instructions
Using the outline below, the text and other resources for guidance, create and submit a draft Microsoft
PowerPoint presentation for your entrepreneurial startup. The presentation should highlight the most
important points that a potential investor would consider while deciding whether to invest in the
startup. Use the “Notes” section in PowerPoint to add assumptions, added information and potential
talking points for areas where the audience would most likely want more detailed information.
Business idea, value proposition, and succinctly stated business model (1 slide)
Executive Summary that identifies the 3 – 5 MOST IMPORTANT take-aways for this presentation (1
slide)
Industry and Opportunity – summarizes the industry factors and dynamics that are creating an
opportunity for this business (1 slide)
Product and Revenue – summarizes the key products, features, pricing, quantities, costs and forecasted
revenue, along with key assumptions and justifications to support your estimates and strategy (1 – 2
slides)
Go-to-Market Strategy that effectively and efficiently presents and supports the target
audience, messaging, specific actions and required budget for the successful marketing and
sales for the business (1 – 2 slides)
Financial Analysis – in support of the projected financials provided in the Financial Feasibility
Analysis assignment (3 slides):
Analyze the financial model that you created:
Using industry research, compare gross profit margins, profitability, growth rate and other
benchmarks to the industry standards.
When is the startup expected to be profitable? What are the primary risks to this timeframe?
What do the projected financial sheets show about the growth and potential return on
investment for the entrepreneurial startup?
Startup Capital
Based on startup costs and projected profitability, how much money will be needed to start and
operate the business for the first three years?
List potential sources for startup capital, and analyze their motivations, interest in the business idea and
required return.
Identify any impact to cash flow from your choice of startup capital
Financial Feasibility Analysis
Based on the information, research, and analysis, provide a summary financial feasibility
conclusion.
What are some potential personal impacts of entrepreneurship as it relates to family and friend
relationships, and how could these affect your personal testimony?
Biblical Worldview
Appendices – sources, detailed financials, other detailed data tables or possible reference
charts
Business Presentation: Final Project Assignment Instructions
Instructions
Based on the draft presentation, instructor feedback on previous assignments, and further
research and analysis, create a final presentation. Starting with revised content from the draft
presentation:
Replace the Financial Analysis slides from the Business Presentation: Draft Assignment with a more
focused, 2 – 3 slide financial summary that captures the key points most important to an investor
audience. Use the notes section of the slides to add any detailed information or potential talking points.
Replace the “Biblical Worldview” slide from the Business Presentation: Draft
Assignment with a summary of the most important actions and realizations for integrating your
faith with this business idea over the course of the term.
Add one slide that details how the entrepreneurial startup will incorporate corporate social
responsibility (CSR) into the business daily, including specific actions and estimated costs.
Projected Profit and Loss
Year 1
Year 2
Revenue
113,450,000
$
218,500,000
$
Less COGS
22,690,000
$
93,700,000
$
Gross Margin 90,760,000$ 124,800,000$
Percent Gross Margin
80%
57%
Operating and General Expenses
Marketing and Sales
415,000
$
400,000
$
Payroll
2,000,000
$
3,000,000
$
Rent
350,000
$
400,000
$
Utilities
400,000
$
500,000
$
Other
200,000
$
400,000
$
Total Expenses 3,365,000$ 4,700,000$
Earnings Before Interest, Taxes Ammortization (EBITA)
87,395,000
$
120,100,000
$
Less Ammortization
20,000
$
30,000
$
Earnings Before Interest, Taxes 87,375,000$ 120,070,000$
Less Interest
5%
10%
Less Taxes
80,000
$
120,000
$
Net Earnings (Profit/Loss) 87,295,000$ 119,950,000$
Note: Input numbers into unshaded boxes.
Product Year 1 Year 2
Shoes (pairs) 52500000 74000000
Sandals 10200000 24000000
Bags 10500000 22500000
Pants 6750000 14000000
T-Shirts 13000000 52500000
Jackets 17500000 26000000
Hats 3000000 5500000
TOTAL 113450000 218500000
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
REVENUE
REVENUE
$-
123
YEAR
Year 3
263,750,000
$
112,750,000
$
151,000,000$
57%
350,000
$
4,000,000
$
400,000
$
600,000
$
600,000
$
5,950,000$
145,050,000
$
40,000
$
145,010,000$
15%
145,000
$
144,865,000$
Year 3
88000000
30000000
25500000
18000000
61250000
34000000
7000000
263750000
Notes - replace instructional notes with your business specific notes and assumptions.
Cost of materials, labor and facility for actual production. For services it is actual cost you can attribute to a specific unit of service. Does not include equipment and overhead.
Revenue - COGS
Advertising, research, commissions - not labor expenses
Include salary, hourly pay, benefits and add a percentage for payroll taxes (~13%) - include your salary here
Check against market conditions, include rented office space, manufacturing facilities and any equipment rental
Phone, electric, water, etc…
Use this to identify expenses prominent to your industry/business/location - for example, travel may be extensive for some industries.
Gross Margin - Operating and General Expenses
Only use this if you are purchasing high value equipment or buildings that will depreciate
Interest on loans used to buy buildings/land, equipment and furniture.
Income taxes. Only if you have a profit. Usually zero for a start-up when rolling profits back into company.
Year 1: GP = Revenue - CGS If we assume that the company adds a markup of 20% to
the cost of producing the jeans, the revenue for the first year would be:
Revenue = 113,450,000 + (0.20 x 113,450,000) = 136,140,000
Therefore, the gross profit for the first year would be:
GP = 136,140,000 - 113,450,000 = 22,690,000
Year 2: GP = Revenue - CGS Similarly, to estimate the gross profit for the second year,
we need to calculate the revenue and subtract the CGS. If we assume that the
company adds a markup of 20% to the cost of producing the jeans, the revenue for
the second year would be:
Revenue = 218,500,000 + (0.20 x 218,500,000) = 262,200,000
If we assume that the company has an ending inventory of 50,000,000, the CGS for
the second year would be:
CGS = 218,500,000 - 50,000,000 = 168,500,000
Therefore, the gross profit for the second year would be:
GP = 262,200,000 - 168,500,000 = 93,700,000
Year 3: GP = Revenue - CGS Similarly, to estimate the gross profit for the third year,
we need to calculate the revenue and subtract the CGS. If we assume that the
company adds a markup of 20% to the cost of producing the jeans, the revenue for
the third year would be:
Revenue = 263,750,000 + (0.20 x 263,750,000) = 316,500,000
If we assume that the company has an ending inventory of 60,000,000, the CGS for
the third year would be:
CGS = 263,750,000 - 60,000,000 = 203,750,000
Therefore, the gross profit for the third year would be:
GP = 316,500,000 - 203,750,000 = 112,750,000
Cost of materials, labor and facility for actual production. For services it is actual cost you can attribute to a specific unit of service. Does not include equipment and overhead.
Use this to identify expenses prominent to your industry/business/location - for example, travel may be extensive for some industries.
Startup Item
Amount
Business Registration
$ 100,000.00
Legal Fees $ 250,000.00
Office Space
$ 350,000.00
Manufacturing Equipment $ 1,000,000.00
Raw Materials $ 500,000.00
Marketing and Advertising $ 415,000.00
Hiring and Training $ 150,000.00
Insurance $ 450,000.00
Inventory Management System $ 10,000.00
Contingency
$ 700,000.00
Total
$ 3,925,000.00
Use this sheet to itemize
the costs associated with starting the business, opening the doors and getting to the point of
manufacturing, producing and delivering products and services. These items could include buying land or buildings,
buildiing out rented space (the actual rent is an operational expense), equipment you will need, pre
marketing expenses, product design and development costs, furniture, training, etc...
Note that startup costs ARE NOT COGS and don't show up in the Profit and Loss sheet. These are an 'investment' in
the startup, not 'operational' expenses.
Notes, Descriptions and Assumptions
Registering the business with the state or local government
Hiring an attorney to draft legal documents and provide legal advice
Renting office space or a storefront
Purchasing equipment such as sewing machines, cutting tables, and
finishing machines
Purchasing materials such as high-quality denim, thread, buttons, and
zippers
Promoting the brand and products through social media, advertising, and
other marketing efforts
Hiring and training employees such as designers, production workers,
and sales staff
Purchasing liability and other types of insurance to protect the business
and its assets
Implementing a system to track inventory levels and manage orders
Setting aside funds for unforeseen expenses or emergencies
the costs associated with starting the business, opening the doors and getting to the point of
manufacturing, producing and delivering products and services. These items could include buying land or buildings,
buildiing out rented space (the actual rent is an operational expense), equipment you will need, pre
-opening
marketing expenses, product design and development costs, furniture, training, etc...
Note that startup costs ARE NOT COGS and don't show up in the Profit and Loss sheet. These are an 'investment' in
Projected Cash Flow
Year 1
Year 2
Year 3
Beginning Cash
-
$
-
$
2
$
Cash Sources
Cash in from Operations
(5)
$
(1)
$
2
$
Adjustment for Ammortization/Depreciation
1
$
1
$
1
$
Decrease in Accounts Receivable
-
$
-
$
-
$
Increase in Accounts Payable
1
$
2
$
3
$
Increase in Debt
5
$
1
$
1
$
Increase from Investors
10
$
1
$
1
$
Total Cash In 12$ 4$ 8$
Cash Uses
Increase in Inventory
2
$
1
$
2
$
Increase in Capital Assets
10
$
1
$
1
$
Total Cash Uses 12$ 2$ 3$
Net Cash Flow
-
$
2
$
5
$
Ending Cash -$ 2$ 7$
Note: Input numbers into unshaded boxes.
Notes - replace instructional notes with your business specific notes and assumptions.
Beginning cash should be zero. Include personal investment with "Increase from Investors"
This should be Net Profit or Loss (bottom line) from PnL
Add back in any ammortization/depreciation, since it is not a cash expense.
When extending credit (invoicing for later payment), this is the change in how much is outstanding
How much you owe your vendors at a given time
The increase (-decrease) in loans/credit card balances from previous period (enter hear if debt was increased)
Amount collected from investors in exchange for ownership
The amount your inventory increased (-decreased) in the time period
This is purchase of buildings or major equipment - capital purchases are not reflected on PnL
Projected Balance Sheet
Year 1
Year 2
Year 3
Assets
Current Assets
Cash
-
$
2
$
7
$
Accounts Receivable
-
$
-
$
-
$
Inventory
-
$
-
$
-
$
Total Current Assets -$ 2$ 7$
Fixed Assets
Land
Buildings
Less Depreciation
Total Buildings -$ -$ -$
Equipment
Less Depreciation
Total Equipment -$ -$ -$
Furniture and Fixtures
5
$
1
$
1
$
Less Depreciation
Total Furniture and Fixtures 5$ 1$ 1$
Total Fixed Assets 5$ 1$ 1$
Total Assets 5$ 3$ 8$
Liabilities
Current Liabilities
Accounts Payable
Current Portion of Long Term Debt
Total Current Liabilities -$ -$ -$
Long-term Liabilities
Mortgage
Other Long-term Loans
Total Long-term Liabilities -$ -$ -$
Total Liabilities -$ -$ -$
Total Owner's Equity
5
$
3
$
8
$
Total Liabilities and Owner's Equity 5$ 3$ 8$
Note: Input numbers into unshaded boxes.
Notes - replace instructional notes with your business specific notes and assumptions.
Ending cash balance from cash flow
Outstanding balance at end of year - amount customers owe you for products sold
Estimate value of inventory on hand - finished and unfinished (raw materials) goods
Land is not depreciable
Building depreciate over 30 years, so 1/30 of building cost
Use 1/15 of original cost for equipment depreciation
Use 1/10 of original cost for any furntiure and fixture items
Amount that you owe vendors who provide product (not loans)
Amount of debt due in the next 12 months, lines of credit, etc…
Loans on buildings
Long term portion on other loans (amoutn due after next 12 months)
Business Presentation: Go-To-Market Strategy
Renee Thomas
BUSI 336
Professor Jimmy Duncan
February 20, 2023
Business Presentation: Go-To-Market Strategy
Business Name
Go-Green Smart Denim Company Limited (GSD)
Business Idea
Recycling discarded denim fabrics into different designs and items such as bags, sofas, and
outfits.
Value Proposition
Our value proposition, “we offer a sustainable solution to textile waste by collecting and
transforming discarded denim into high-quality, stylish products for a conscious market. Our
commitment to the environment and to responsible consumption creates a win-win situation,
providing consumers with eco-friendly alternatives while reducing their impact on the planet.
Our products are conveniently available through e-commerce platform."
Place-Sales and Distribution
GSD will utilize the hybrid ecommerce (Click & Collect) as its sales and distribution
model. It involves customers purchasing and selecting items on a company’s website, paying for
the products, and collecting them at a centralized collection point that is strategically located
(Thabit & Raewf, 2018). Customers who opt for home delivery of their products can have the
orders fulfilled from the designated collection points. The company will run the collection
centers through verified third-party agents offering professional assistance and compliance with
the necessary regulatory procedures. Besides, the third-party model will minimize the GSD
workload related to the distribution of customers’ orders. The company will not incur the cost of
establishing physical collection points, easing its wide market coverage.
The company will require a geography-based sales force. The team comprises
salespeople specializing in a specific area by understanding customers and facilitating the
fulfillment of their needs (Jain & Jain, 2022). Such a sales force allows a business to understand
the market and design appropriate means for meeting its needs. The sales and distribution
channels will be compensated on commission, meaning that the respective channel revenue will
determine the compensation level. The monetary compensation will motivate the sales and
distribution to more sales and challenge them to cut costs (Thabit & Raewf, 2018). This
compensation model incentivizes the channels to more sales for higher earnings. The company
will pay only on sales conversion leading to optimized selling efficiency by paying the channels
for the results they will produce.
Promotion-Messaging
The primary market segment for GSD products will be adult consumers, especially
millennials. This class of consumers prefers quality, affordability, convenience, and
environmental sustainability in purchasing decisions (Kang et al., 2021). The target market
comprises tech-savvy consumers that are highly influenced by social media. This buying
behavior will find the e-commerce for GSD to be valuable and willing to pay for to meet their
needs. Another characteristic of consumers is environmental sustainability (Jain & Jain, 2022). A
majority are likely to purchase from brands with vibrant corporate social responsibilities geared
towards environmental stewardship. This attribute aligns with the company’s commitment to
recycling tattered denim to make new products. Based on these target market characteristics,
GSD’s advertisement will emphasize the e-commerce platform and the recycling aspects of the
brand.
Promotion-Marketing Activity
The identified target market (adults) discovers products through social media, traditional
media, and referrals from close social ties. Consumers in this market make their purchase
decisions through comparison shopping. It involves consumers comparing product features,
quality, and prices to competitors’ offerings to make informed decisions (Badi, 2018). GSD will
promote its product to the target market using email marketing as a powerful tool for reaching
consumers and sending tailored messages. The company will also require investing in social
media to create content that aligns with the audience using tools like images, videos, and blogs.
The list of critical marketing and advertising activities that GDS will need to do consistently for
the products to be sold include market research (to support continuous improvement), advertising
campaigns, content marketing, and search engine optimization.
Marketing Budget
The marketing budget for GSD will be crafted to align with the company’s needs and its
utilization of mixed-method marketing. The traditional channel will comprise local dailies, TV
commercials, and billboards. The conventional channel is significant after a business establishes
to solidify and sustain the achieved gains (Thabit & Raewf, 2018). The targeted budget for this
marketing channel will be between $50,000 and $75,000, representing 10% of the entire
marketing budget. Search engine marketing (SEM) and social media ads will comprise 20% of
the marketing budget. The channel involves buying pay-per-click (PPC) and search engine
optimization and search engine optimization (SEO) tools like Google Ads. This marketing tool is
significant in making a website more visible on digital platforms, which translates to increased
traffic (Jain & Jain, 2022). The process results in conversion prospects with customers. Email
marketing will cost the company about $25,000 and $50,000. This mode of marketing is critical
in nurturing and retaining leads. Companies use email marketing to persistently offer value to
their web visitors and keep them engaged until they take the next step toward becoming potential
customers.
The third element of marketing in the budget will be inbound content marketing. It will
cost GSD about $100,000 and $125,000, or 25% of the marketing cost. Content is paramount for
any business with e-commerce platforms as an ideal strategy for mobilizing new leads (Badi,
2018). These leads move through the buyers’ journey. Such content includes videos, blogs,
podcasts, case studies, and infographics. GSD will market on its website to further convert
visitors into buyers. The estimated budget for website marketing will range between $50,000 and
$75,000. Website investment will focus on design and compliance with SEO content (Kang et
al., 2021). The other marketing channel that GDS will utilize is publicity using influencer
marketing and public relations. The estimated budget for the channel will be 20%, which will be
about $100,000 and $125,000. This publicity will include efforts to reinforce brand presence.
Examples include sourcing celebrities, high profile bloggers, partnering with influencers, and
seeking media coverage. The following is a breakdown of GDS’s marketing budget.
Variable (Marketing Tool)
Estimated cost ($’000)
Traditional marketing channels
60
Social Media Ad & SEM
110
Email marketing
30
Website
75
Content marketing
40
PR, Influencer marketing
100
Total budgeted cost
415
Biblical Worldview
Matthew 3:1 teaches that John the Baptist came preaching in the wilderness of Judea and
saying, ‘’Repent, for the Kingdom of heaven is at hand!’’ (King James Bible, 2008). This bible
verse can help in understanding the go-to-market strategy. It relates to the promotion and place
component of the 4P of marketing that explains marketers’ efforts to make a product known in
the market. The bible verse emphasizes the need for marketers to spread their messages to where
they can find them, as John the Baptist chose to spread the message to the wilderness rather than
cities. The strategy aligns with inbound marketing, a strategic approach for creating valuable
information that aligns with the target audience's needs to inspire long-term relationships.
Go-to-Market Summary
The targeted business idea for Go-Green Smart Denim Company (GSD) focuses on
recycling tattered denim to make new products.
The company’s value proposition is to collect and transform discarded denim to make
stylish apparel and furniture to advance environmental stewardship.
The target market for the products is millennials since most consumers are tech-savvy
and oriented to environmental sustainability.
GSD’s marketing budget is $415,000
The idea relates to Mathew 3:1, which relates to product and place in the marketing mix.
References
Badi, S. K. (2018). The impact of marketing mix on the competitive advantage of the SME
sector in the Al Buraimi Governorate in Oman. SAGE Journal. Retrieved from
https://journals.sagepub.com/doi/10.1177/2158244018800838
Jain, T. K., & Jain, E. (2022). Startup Decisions: Forces that Determine Entrepreneurship.
Available at SSRN 3339256.
Kang, I., Koo, J., Han, H. J. & Yoo, S. (2021). Millennial consumers perceptions on luxury
goods: Capturing antecedents for brand resonance in the emerging market context.
Journal of International Consumer Marketing, 34(2): 214-230.
King James Bible. (2008). Oxford University Press. (Original work published 1769).
Thabit, H. T. & Raewf, M. (2018). The evaluation of marketing mix elements: A case study.
International Journal of Social Sciences and Educational Studies, 4(4): 100-109.
Industry Feasibility Analysis
Renee Thomas
BUSI 336
Professor Jimmy Duncan
February 6, 2023
Industry Feasibility Analysis
Population growth has increased the demand for consumer products such as clothes,
resulting in a further increase in the number of landfills. This not only depletes existing natural
resources but also harms the ecosystem. Recycling and reusing things is an urgent necessity. The
company focuses on employing a variety of recycling processes, such as chemical and
mechanical methods. Recycling discarded denim fabrics into different designs and items like
bags, sofas, and outfits. Mechanical recycling, which puts post-consumer waste denim into
mechanical and reuse processes, will be the organization's primary recycling method. To a given
extent, the organization will also use chemical recycling techniques in its denim waste
conversion. However, the main determinant here will be the end product desired at the end. The
objective is to create a firm whose production processes are centered on sustainability and
contribute to the worldwide management of denim waste, beginning with the North American
market.
Business name
The name of the company is Go-Green Smart Denim Company Limited (GSD)
Business Idea
The business idea involves recycling discarded denim fabrics into different designs and items
like bags, sofas, and outfits.
Value proposition
Our value proposition, “we offer a sustainable solution to textile waste by collecting and
transforming discarded denim into high-quality, stylish products for a conscious market. Our
commitment to the environment and to responsible consumption creates a win-win situation,
providing consumers with eco-friendly alternatives while reducing their impact on the planet.
Our products are conveniently available through e-commerce platform."
Industry Definition
An industry is a component or segment of a broader economy that generates a certain
type of item or service. It involves all firms and enterprises engaged in a given commercial
activity, like clothing and accessories, manufacturing, construction, or technology, as well as the
individuals that work for these companies. The phrase refers to both the production methods and
the commodities or services produced.
According to the N.A.I.C.S. system of industry coding, denim recycling, and design
primarily belong to the clothing and clothing accessories stores industry of code NAIC S448000.
Clothing and Clothing Accessories stores refer to retail enterprises specializing in the sale of
clothing and accessories, including shirts, dresses, pants, shoes, hats, jewelry, and belts. In many
cases, the stores may sell their products to people of various genders, ages, and sizes, and their
focus may range from high-end designer names to quick fashion. Zara, H&M, Forever 21, and
Nordstrom are some notable fashion and accessory shop chains. Others often referred to as
supporting industries within this main industry, include NAICS 448100 - Clothing Stores,
NAICS 448300 - Jewelry, Luggage, and Leather Goods Stores, and NAICS 448200 - Shoe
Stores (U.S. Bureau of Labor Statistics. n.d).
Industry Analysis
The primary customers of recycled products include the wealthy, fashion-sensitive
section of society, such as musicians, sportsmen, and women, and university and college students
who seem to be having a strong liking of denim products, as data suggests. Secondary customers
include conscious individuals who would prefer buying a product not because they need it but
because they want to send a message to the rest of the population regarding the need to treat the
natural environment fairly.
Substitutes and Barrier to Entry
There are limited substitutes when it comes to recycling used denim clothes into highly
fashionable finished products because the required technology and assembling the necessary
talent and skill set for the design had to come (Kumbara., 2020). However, new denim products
straight from factories can be considered substitutes for the products developed from recycled
denim materials.
As indicated above, the main barrier to entry is the high technology needed and
assembling the necessary talent and skill set for designing unique and highly fashionable
products. The collection of used denim clothes also requires an established infrastructure.
Industry Dynamics
The global market for denim-made products has exceeded 70 billion dollars and is
expanding at a 2% yearly rate (as per the Global Denim Market, 2022). North America has a
26% share of the overall denim market, worth around $17.5 billion (according to Cbi, 2022).
This can also help us understand the expansion of the denim recycling industry, which is
predicted to increase at a 4.4% annual pace (Global Denim Market, 2022). Extrapolating these
estimates to the U.S.U.S. denim industry, it is anticipated that the country's denim recycling
waste market will be worth roughly $25 million by 2022 (as per Cbi, 2022).
According to studies, the growth rate of different consumer-based markets in the United
States is predicted to range between 2.5% and 3% through 2030. (Masduki, 2022). The present
and future market size may be computed using the expected size of the U.S.U.S. market for
recycled denim goods, which is $11 billion by the end of 2023 and has a growth rate of 2.5% to
3% (Jain & Jain, 2022). As a result, the company's growth and revenue will expand until 2030,
as it fits within the industry's predicted growth rate.
Business Model
The company's business model is straightforward. The company will collect used denim
clothes from colleges and universities as well as within communities using organized collecting
third parties to establish collection points. The raw materials are then subjected to necessary
enhancement steps and then designing. The images of all finished products are uploaded to the
company's e-commerce website, where potential customers can conveniently browse, order and
pay. Because the target market is small, marketing will include digital campaigns and advertising
that target the appropriate group, organizing exhibitions in universities and colleges.
Christian Worldview
The Christian worldview has no position on wearing denim apparel. Christians adhere to
biblical ideals such as modesty, humility, and the avoidance of worldly vanities. As a result, how
Christian dresses, including their choice of denim clothes, should accord with their ideals and
positively represent their faith. Finally, whether or not to wear denim clothes is a personal
decision, and Christians are urged to exercise their judgment and make decisions that respect
God. There are several verses in the scriptures that teach believers how to wear them. For
instance, Deuteronomy 22:5 says, "A woman shall not wear anything that pertains to a man, nor
shall a man put on a woman's garment, for all who do so are an abomination to the LORD your
God."
Summary
Recycled used denim will form part of the primary raw materials used to make new
products such as bags, clothes, shoes, and seats.
The target customers include rich, fashion-sensitive young people comprising musicians,
sportspeople, and artists.
The e-commerce platform will provide the necessary convenience to customers.
Christian worldview does not provide a position on wearing denim products.
Reference
Cbi. eu. (2022). Entering the European market for denim | C.B.I. [online] Available at:
<https://www.cbi.eu/market-information/apparel/denim-trousers/market-entry>
[Accessed February 06, 2023].
Jain, T. K., & Jain, E. (2022). Startup Decisions: Forces that Determine Entrepreneurship.
Available at SSRN 3339256.
Kumbara, A. (2020). THE ANALYSIS OF PORTER'S FIVE FORCES IN LUCKY TEXTILE
GROUP IN FACING THE COMPETITION OF THE TEXTILE INDUSTRY. Dinasti
International Journal of Economics, Finance & Accounting, 1(3), pp.397-412.
Masduki, F.M., (2020). The contribution of consumer values and a country's image to luxury
brand equity: The case of the middle-class Indonesian woman (Doctoral dissertation,
Curtin University).
U.S.U.S. Bureau of Labor Statistics. (22, March 31). Clothing and clothing accessories stores -
May 2021 O.E.W.S. industry-specific occupational employment and wage estimates.
U.S.U.S. Bureau of Labor Statistics. https://www.bls.gov/oes/current/naics3_448000.htm
Business Presentation: Product Feasibility Analysis
Renee Thomas
BUSI 336
Professor Jimmy Duncan
February 13, 2023
Business Presentation: Product Feasibility Analysis
Business name
The name of the company is Go-Green Smart Denim Company Limited (GSD).
Business Idea
The business idea involves recycling discarded denim fabrics into different designs and items
like bags, sofas, and outfits.
Value proposition
Our value proposition, “we offer a sustainable solution to textile waste by collecting and
transforming discarded denim into high-quality, stylish products for a conscious market. Our
commitment to the environment and to responsible consumption creates a win-win situation,
providing consumers with eco-friendly alternatives while reducing their impact on the planet.
Our products are conveniently available through e-commerce platform."
Product and Service Mix Definition
The whole collection of items or product lines that a business provides for sale is referred
to as its product mix and is sometimes known as the product assortment. It refers to the range of
products available, their designs and features, as well as the size of the product offerings in terms
of the variety of items available. The product mix is an important component of a company's
marketing strategy since it determines the variety of items that a company offers to fulfill the
demands and desires of its target consumers. Product mix assists businesses in determining
which items to create, in what quantities, and at what price points in order to maximize
profitability and fulfill consumer demand.
Go-Green Smart Denim Company will offer a variety of products, including ladies’
shoes, sandals, bags, pants, t-shirts, jackets, and hats. These products are created from recycled
worn denim and are sustainable and eco-friendly, appealing to consumers who are
environmentally concerned and wish to decrease waste. By not employing new materials, the
business strategy decreases the amount of denim trash that ends up in landfills and conserves
natural resources. Denim is washed, cut, and sewn into sandal straps for sandals. The sandals'
eco-friendliness is enhanced by the use of recycled rubber soles.
Recycled denim products, including shoes, sandals, bags, pants, t-shirts, jackets, and hats,
offer a unique and stylish look as they present unique designs, patterns, and textures. On the
other hand, they are durable, comfortable, and versatile, making them suitable for a number of
occasions, mostly semi-formal ones. Pricing will be fairly high because the target segment is
environment-conscious, affluent young adults with a high sense of fashion (Jain & Jain, 2022).
Overall, the products made from recycled used denim satisfy both environmental and fashion
concerns and are a great example of a sustainable product that can help to reduce waste and
protect the planet.
Product Pricing per Unit
Several factors affect the pricing of a product. Some of these include the materials used,
production costs, the brand and its reputation, the target market, and market demand. In this case,
the target group will be the most influencing factor. For a target segment of rich, young adults
with a high sense of fashion, these products will be priced at a premium, as shown in the table
below.
Product
Shoes
Bags
Pants
Sandals
T-shirts
Hats
Jackets
Price per
Unit
$350 -
$500
$210-$350
$150-$300
$120-$200
$100-$350
$95-$100
$350-$450
The target demographic is always willing to pay more for unique, high-quality, and fashionable
items that align with their values and lifestyle.
Pricing Strategy
As initially indicated, the pricing strategy to be used by the business is the premium
pricing strategy. This is due to the targeted segment, which comprises rich young adults with a
high sense of fashion. Pricing the items above the typical market price in order to represent their
perceived worth and appeal to the target market is part of this strategy. The emphasis for this
target group should be on providing high-quality, innovative, and trendy items that connect with
their ideals and lifestyle. The premium pricing approach is based on the assumption that these
customers are prepared to pay more for items that match their high expectations (Masduki,
2020).
Quantity to Sell
Over the first three-year period, the company target selling the following units per product:
Product
Year 1
Year 2
Year 3
Shoes (pairs)
150, 000
185, 000
220, 000
Sandals
85, 000
120, 000
150, 000
Bags
50, 000
75, 000
85, 000
Product
Year 1
Year 2
Year 3
Pants
45, 000
70, 000
90, 000
T-Shirts
130, 000
150, 000
175, 000
Jackets
50, 000
65, 000
85, 000
Hats
30, 000
55, 000
70, 000
The above assumptions are justified by certain factors such as market demand for the
above products, historical sales data for similar products, competitor analysis and their market
share, marketing, and advertising budget and strategies, distribution and sales channels, and
product pricing and margins.
Cost per Unit to Manufacture or Cost of Goods Sold
Cost of Goods Sold (COGS) refers to the cost of producing and selling a product. It is
estimated by summing all direct expenses related to the manufacture of a product and deducting
any discounts or rebates. Raw materials, labor, packing, and shipping are all examples of direct
expenses.
The formula for calculating COGS is as follows:
COGS = Beginning Inventory + Purchases - Ending Inventory
The costs related to beginning inventory include the cost of collecting the used denim,
mechanical and chemical processes to improve the state of the denim, and the cost associated
with paying certain designers, marketing, and distribution. The number of units produced and the
cost of goods manufactured are directly proportional. This means increased units produced mean
an increased cost of production.
Revenue Forecast
A revenue forecast is an estimate of a company's anticipated sales or profits. It is an
important part of financial planning since it allows organizations to make more educated
decisions regarding their operations, investments, and finances. The company’s revenue forecast
for the next three years is as shown below:
Product
Year 1
Year 2
Year 3
Shoes (pairs)
150, 000 x 350
185, 000 x 400
220, 000 x 400
Sandals
85, 000 x 120
120, 000 x 200
150, 000 x 200
Bags
50, 000 x 210
75, 000 x 300
85, 000 x 300
Pants
45, 000 x 150
70, 000 x 200
90, 000 x 200
T-Shirts
130, 000 x 100
150, 000x 350
175, 000x 350
Jackets
50, 000 x 350
65, 000 x 400
85, 000 x 400
Hats
30, 000 x 100
55, 000 x 100
70, 000 x 100
Christian Worldview Application
Setting pricing entails balancing the need for a fair profit with ethical and moral issues,
including biblical ones. Bible verses like Leviticus 19:35-36 and Deuteronomy 25:13-16 Bible
underline the necessity of fairness and justice in commercial relationships. Bible, N. T. (n.d.).
Principles such as honesty, transparency, and justice should be observed from an ethical
standpoint (Weiss, 2019). This includes being open and honest about the costs of goods and
services, avoiding misleading pricing methods, and not abusing clients by charging exorbitant
rates. Furthermore, firms should aim to treat their employees properly by providing them with a
fair salary. These factors contribute to ensuring that pricing represents the beliefs and ideals of
the company and its owners.
Product Summary
1. Go-Green Smart Denim Company offers a variety of eco-friendly and sustainable
products made from recycled worn denim, including shoes, sandals, bags, pants, t-shirts,
jackets, and hats.
2. The pricing strategy for these products will be premium pricing as the target segment is
affluent young adults with a high sense of fashion. The company aims to sell 150,000
pairs of shoes, 85,000 sandals, 50,000 bags, 45,000 pants, 130,000 t-shirts, 50,000
jackets, and 30,000 hats in the first year.
3. The cost of Goods Sold (COGS) is calculated by adding all direct expenses related to
production and subtracting any discounts. The company's revenue forecast for the next
three years is estimated based on the number of units sold and the price per unit, with an
assumption that the cost of production will increase with the number of units produced.
Reference
Jain, T. K., & Jain, E. (2022). Startup Decisions: Forces that Determine Entrepreneurship.
Available at SSRN 3339256.
Masduki, F.M., (2020). The contribution of consumer values and a country's image to luxury
brand equity: The case of the middle-class Indonesian woman (Doctoral dissertation,
Curtin University).
Weiss, S. (2019). The Ethics of Price Gouging. Journal of Religious Ethics., 45(1), 142–163.
https://doi.org/10.1111/jore.12171
Bible, N. T. (n.d.). Leviticus 19:35-36 and Deuteronomy 25:13-16. In The New Oxford
Annotated Bible with the Apocrypha. Oxford University Press.
Business Presentation: Draft Assignment
Name
Course
Tutor
Date
Business Idea, Value Proposition, and the
Business Model
Business Idea
•The business idea involves recycling discarded denim fabrics into
different designs and items like bags, sofas, and outfits.
Value Proposition
•“Our company provides an eco-friendly approach to textile waste
through the collection and conversion of unwanted denim into
fashionable, high-quality products for conscious consumers. By
prioritizing the environment and responsible consumption, we
create a mutually beneficial situation where customers can choose
sustainable options while also reducing their environmental
footprint. Our products are conveniently accessible through our
online store.”
Business Model
•Go-Green Smart Denim Company Limited (GSD) recycles
discarded denim fabrics into various designs and items, such as
bags, sofas, and outfits that are sold to conscious consumers
through the company’s e-commerce platform.
Executive Summary
GSD recycles discarded denim fabrics into various designs
and items, such as bags, sofas, and outfits.
The value proposition is hinged on offering eco-friendly,
high-quality, stylish products to conscious consumers
through their e-commerce platform.
The company utilizes a hybrid e-commerce (Click &
Collect) sales and distribution model to reduce distribution
costs and increase market coverage.
GSD compensates their sales and distribution channels on
a commission basis.
Its target segment comprises adult consumers, particularly
rich millennials, who value quality, stylish, convenience, and
environmental sustainability.
GSD's promotional strategy emphasizes the e-commerce
platform and the recycling aspects of the brand, with email
marketing and social media as key marketing activities.
Overall, GSD aims to provide a sustainable solution to
textile waste while offering fashionable products to
environmentally-conscious consumers.
Industry and Opportunity
The fashion industry bears a great responsibility for its environmental
impact.
The textile waste has become a critical concern.
Consumers have increasingly become conscious of the environmental
impact of their purchasing decisions, and they are actively seeking out
sustainable alternatives.
This growing demand for eco-friendly products creates an opportunity
for businesses like Go-Green Smart Denim Company Limited that offer a
sustainable solution to textile waste.
Furthermore, the rise of e-commerce and advancements in technology
have revolutionized the way businesses operate and interact with
customers.
The company’s hybrid e-commerce (Click & Collect) sales and
distribution model takes advantage of this trend and provides
convenience to customers
(U.S.U.S. Bureau of Labor Statistics, 2022)
Product and Revenue
Product:
Go-Green Smart Denim Company Limited is offering a range of products produced from recycled
denim fabrics.
The products include:
Bags
Sofas
Sandals
Caps and outfits.
GSD's commitment to sustainable fashion and responsible consumption creates high-quality, stylish
products for a conscious market.
The company's e-commerce platform provides convenience and accessibility to customers.
Pricing and Quantity:
The pricing of GSD's products will be competitive with other sustainable fashion brands in the market.
The company will employ a geography-based sales force, and the sales and distribution channels will be
compensated on commission, meaning that the respective channel revenue will determine the
compensation level.
The sales and distribution channels will be incentivized to increase sales to earn higher commissions.
Cont.….
Revenue:
The forecasted revenue for GSD will depend on several factors,
including market demand, pricing strategy, and the effectiveness of
the sales and distribution channels.
GSD's revenue model will be based on commission and will
incentivize the sales and distribution channels to increase sales.
The company will need to continuously monitor market demand,
adjust pricing strategies, and optimize the sales and distribution
channels to achieve its revenue goals.
Cont.…
Assumptions and Justifications
The above revenue projection for the GSD Company assumes:
That there is a growing demand for sustainable fashion products, particularly among millennials who value:
Convenience
Affordability
Environmental sustainability.
The company's premium pricing strategy and emphasis on e-commerce will appeal to the rich and young
customers.
The sales and distribution channels' commission-based compensation will incentivize them to increase sales.
GSD will need to continuously assess market trends and adjust its strategy to meet changing customer
demands and preferences.
Go-to-Market Strategy
Target Audience: environmentally conscious adults, particularly rich millennials, who look
for high-quality and stylish eco-friendly products.
Messaging: Emphasizing the company’s commitment to sustainability and responsible
consumption while offering stylish and affordable products made from recycled denim.
Marketing actions to reach the audience:
Social Media Marketing
Email Marketing
Influencer Marketing:
Search Engine Optimization (SEO)
Content Marketing
Cont.….
Specific Actions and Budget
•GSD to use a geography-based sales force to comprehend the market and design appropriate means for meeting its needs.
•The sales and distribution channels will be compensated on commission, motivating them to drive sales and cut costs.
•GSD will pay only on sales conversion, leading to optimized selling efficiency by paying the channels for the results they produce.
Budget
•The required budget for marketing and sales activities will be allocated as follows:
•Market research (10%)
•Advertising campaigns (25%)
•Content marketing (30%)
•Search engine optimization (SEO) (20%)
•Sales force compensation (15%)
Financial Analysis
Analyzing the financial model
The average gross profit margin for textile
and clothing manufacturing companies is
around 45%.
The gross profit margin for Go-Green Smart
Denim Company Limited (GSD) is estimated
to be 60%, which is higher than the industry
average.
This indicates that GSD has the potential to
generate high profits from its operations.
Projected Profit and Loss
Year 1 Year 2 Year 3
Revenue
$ 113,450,000
$ 218,500,000
$ 263,750,000
Less COGS
$ 22,690,000
$ 93,700,000
$ 112,750,000
Gross Margin
$ 90,760,000
$ 124,800,000
$ 151,000,000
Percent Gross Margin
80%
57%
57%
Operating and General Expenses
Marketing and Sales
$ 415,000
$ 400,000
$ 350,000
Payroll
$ 2,000,000
$ 3,000,000
$ 4,000,000
Rent
$ 350,000
$ 400,000
$ 400,000
Utilities
$ 400,000
$ 500,000
$ 600,000
Other
$ 200,000
$ 400,000
$ 600,000
Total Expenses
$ 3,365,000
$ 4,700,000
$ 5,950,000
Earnings Before Interest, Taxes Ammortization (EBITA)
$ 87,395,000
$ 120,100,000
$ 145,050,000
Less Ammortization
$ 20,000
$ 30,000
$ 40,000
Earnings Before Interest, Taxes
$ 87,375,000
$ 120,070,000
$ 145,010,000
Less Interest
5%
10%
15%
Less Taxes
$ 80,000
$ 120,000
$ 145,000
Net Earnings (Profit/Loss)
$ 87,295,000
$ 119,950,000
$ 144,865,000
Cont.…
Based on the industry analysis, the estimated amount for the total
startup cost for the business will be $3,225, 000.00
This includes the cost of developing the product, marketing and
sales expenses, and initial operating costs for the first year.
In order to fund the startup costs and operate the business for the
first three years, the company will need to secure $3,925,000,000 in
capital.
This will cover the projected expenses for the first year.
The company will require approximately $11.8M for its three year
expenses until the company is projected to become profitable.
Startup Item
Amount
Business Registration
$ 100,000.00
Legal Fees
$ 250,000.00
Office Space
$ 350,000.00
Manufacturing Equipment
$ 1,000,000.00
Raw Materials
$ 500,000.00
Marketing and Advertising
$ 415,000.00
Hiring and Training
$ 150,000.00
Insurance
$ 450,000.00
Inventory Management System
$ 10,000.00
Contingency
$ 700,000.00
Total
$ 3,925,000.00
Feasibility Summary
Based on the industry analysis, and analysis presented, the financial feasibility of the
entrepreneurial startup appears to be promising.
The startup is projected to generate positive cash flow as well as achieve profitability by the
end of Year 1.
The market opportunity and demand for the product, combined with the company's
premium pricing and efficient operations, provide a strong foundation for potential growth
and return on investment.
However, there are risks and uncertainties associated with starting any new venture.
Also, the entrepreneur should consider potential challenges in securing startup capital and
the impact of that capital on cash flow and financial performance.
Biblical Worldview
“From a general Christian perspective, the biblical worldview
would encourage ethical and responsible practices in business, as
well as treating employees and customers with fairness and respect.
The idea of stewardship would also play a significant role, with a
focus on managing resources wisely and using profits for good
causes. The principles of love, justice, and compassion would
guide the decision-making process, and the overall aim would be to
bring glory to God through the business's activities and impact on
society.”
Reference
•U.S.U.S. Bureau of Labor Statistics. (2022, March 31). Clothing and clothing
accessories stores - May 2021 O.E.W.S. industry-specific occupational
employment and wage estimates. U.S.U.S. Bureau of Labor Statistics.
https://www.bls.gov/oes/current/naics3_448000.htm
Appendices
Projected Profit and Loss
Year 1 Year 2 Year 3
Revenue
$ 113,450,000
$ 218,500,000
$ 263,750,000
Less COGS
$ 22,690,000
$ 93,700,000
$ 112,750,000
Gross Margin
$ 90,760,000
$ 124,800,000
$ 151,000,000
Percent Gross Margin
80%
57%
57%
Operating and General Expenses
Marketing and Sales
$ 415,000
$ 400,000
$ 350,000
Payroll
$ 2,000,000
$ 3,000,000
$ 4,000,000
Rent
$ 350,000
$ 400,000
$ 400,000
Utilities
$ 400,000
$ 500,000
$ 600,000
Other
$ 200,000
$ 400,000
$ 600,000
Total Expenses
$ 3,365,000
$ 4,700,000
$ 5,950,000
Earnings Before Interest, Taxes Ammortization (EBITA)
$ 87,395,000
$ 120,100,000
$ 145,050,000
Less Ammortization
$ 20,000
$ 30,000
$ 40,000
Earnings Before Interest, Taxes
$ 87,375,000
$ 120,070,000
$ 145,010,000
Less Interest
5%
10%
15%
Less Taxes
$ 80,000
$ 120,000
$ 145,000
Net Earnings (Profit/Loss)
$ 87,295,000
$ 119,950,000
$ 144,865,000
Product
Year 1
Year 2
Year 3
Shoes (pairs)
52500000
74000000
88000000
Sandals
10200000
24000000
30000000
Bags
10500000
22500000
25500000
Pants
6750000
14000000
18000000
T
-Shirts
13000000
52500000
61250000
Jackets
17500000
26000000
34000000
Hats
3000000
5500000
7000000
TOTAL
113450000
218500000
263750000
Business Presentation: Final
Name
Course
Tutor
Date
Key points to Investor Audience
A team of investors would be
interested in the following:
Revenue:
•Projected revenue for the first year is
$113,450,000, second year $218,500,000,
and third year $263,750,000.
Profitability:
•Gross profit margin is expected to be
60%, with a net profit margin of 20%.
Break-even point:
•The break-even point is expected to be
achieved by the end of first year.
Cont.…
Return on investment:
The expected return on investment (ROI) is 30% by
the end of year 2.
Risk factors:
Key risks include:
Market competition,
Regulatory changes,
Changes in consumer behavior
Summary of important actions
Over the years as a believer:
I have realized that integrating my faith with this
business idea is crucial for its success and my
personal fulfillment.
I have learned that placing God at the center of
the business helps to establish and maintain ethical
and moral standards.
This is essential for building a strong and trusted
brand.
By seeking God's guidance and wisdom, I can
make better decisions that align with His will and
honor Him in all aspects of the business.
Cont.…
Some of the most important actions and realizations include:
Giving back to the community and making a positive impact through my
business.
Recognizing that success is not just measured by financial gains, but also
by how well I serve others and honor God.
Recognizing that my business idea should align with my personal values
and beliefs.
Seeking guidance and wisdom from God through prayer and meditation.
Treating my employees and customers with fairness and respect, as I
would want to be treated.
Corporate Social Responsibility
Incorporating CSR into the business is a critical aspect of the
entrepreneurial startup (Vishwanathan et al., 2020).
To achieve this, a business has to plan several specific actions that will have
a positive impact on the community and the environment.
One of the steps include:
Sourcing materials and supplies from local suppliers
Supporting the local economy
Reducing our carbon footprint by reducing transportation distances.
Committing to using eco-friendly and sustainable products wherever possible;
These include:
Biodegradable packaging
Energy-efficient equipment, and office supplies made from recycled materials.
References
•Vishwanathan, P., van Oosterhout, H., Heugens, P. P., Duran, P., & Van
Essen, M. (2020). Strategic CSR: A concept building meta‐analysis. Journal
of Management studies, 57(2), 314-350.
Startup Item
Amount
Business Registration
$ 100,000.00
Legal Fees
$ 250,000.00
Office Space
$ 350,000.00
Manufacturing Equipment
$ 1,000,000.00
Raw Materials
$ 500,000.00
Marketing and Advertising
$ 415,000.00
Hiring and Training
$ 150,000.00
Insurance
$ 450,000.00
Inventory Management System $ 10,000.00
Contingency
$ 700,000.00
Total
$ 3,925,000.00
Projected Profit and Loss
Year 1
Year 2
Revenue
113,450,000
$
218,500,000
$
Less COGS
22,690,000
$
93,700,000
$
Gross Margin 90,760,000$ 124,800,000$
Percent Gross Margin
80%
57%
Operating and General Expenses
Marketing and Sales
415,000
$
400,000
$
Payroll
2,000,000
$
3,000,000
$
Rent
350,000
$
400,000
$
Utilities
400,000
$
500,000
$
Other
200,000
$
400,000
$
Total Expenses 3,365,000$ 4,700,000$
Earnings Before Interest, Taxes Ammortization (EBITA)
87,395,000
$
120,100,000
$
Less Ammortization
20,000
$
30,000
$
Earnings Before Interest, Taxes 87,375,000$ 120,070,000$
Less Interest
5%
10%
Less Taxes
80,000
$
120,000
$
Net Earnings (Profit/Loss) 87,295,000$ 119,950,000$
Note: Input numbers into unshaded boxes.
Product Year 1 Year 2
Shoes (pairs) 52500000 74000000
Sandals 10200000 24000000
Bags 10500000 22500000
Pants 6750000 14000000
T-Shirts 13000000 52500000
Jackets 17500000 26000000
Hats 3000000 5500000
TOTAL 113450000 218500000
Year 3
263,750,000
$
112,750,000
$
151,000,000$
57%
350,000
$
4,000,000
$
400,000
$
600,000
$
600,000
$
5,950,000$
145,050,000
$
40,000
$
145,010,000$
15%
145,000
$
144,865,000$
Year 3
88000000
30000000
25500000
18000000
61250000
34000000
7000000
263750000
