SAMPLE BUSINESS

PLAN

SAM’S KIDS STORE, INC

Disclaimer:

This is a sample business plan, so the company and business

information are fictitious. This plan reflects our standard business
plan model, and changes in outline and structure can be made as per
client specifications.
GENERAL COMPANY DESCRIPTION........................................................................................4

MARKETING PLAN.......................................................................................................................8
C.MArKEt Growth................................................................................................................................................11
E.MArKEt DEMAND...............................................................................................................................................15
G. MArKEt PotENtIALS.........................................................................................................................................17
H. MArKEt OPPOrtUNItIES...................................................................................................................................19
I. BArrIErS to ENtry:.........................................................................................................................................19
J. REgULAtIONS.....................................................................................................................................................19

II.Service Potential....................................................................................................................................................20

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OPERATIONAL PLAN.................................................................................................................32

I. Service Execution Model........................................................................................................................................32

II. Legal Environment................................................................................................................................................33

III. Personnel..............................................................................................................................................................33
A.MANAgEMENt’S CrEDENtIALS AND ExPErtISE..................................................................................................34
B.ExPErIENcE IN MANAgEMENt PoSItION...........................................................................................................34

FINANCIAL PLAN.......................................................................................................................36

I- Start-up Expenses Summary.................................................................................................................................36

II- Revenue Forecast (3- Year).................................................................................................................................38

III- Profit and Loss Projection (3-Year)....................................................................................................................39

IV- Pro forma Cash Flows (3- Year).........................................................................................................................41

V- Projected Balance Sheet......................................................................................................................................42

VI- Breakeven Analysis.............................................................................................................................................43

APPENDIX...................................................................................................................................44

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 Executive Summary

1. Sam’s Kids Wear (SKW) is a retail store for kids wear with good quality and
latest trends owned by Mr. Samuels Arnold.

2. This business will cater to the needs of kids’ age from 6 to 11

3. Location of the business is assume an actual location

The Target audiences of the business are:

Age Population

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5 to 9 years 218,522
10 to 14 years 224,012
Total (5 to 14 Years) 442,534

4. Slogan of the business is:

“Kids wear, with care”

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 General Company Description

I. Company Overview:
Sam’s Kids Wear (SKW) is a retail store for kids wear with good quality and latest
trends. We present an extensive range of kids wear that are manufactured using
different fabrics such as Cotton, Silk, Wool and others. Available in a wide range of
gorgeous colors, designs and prints, these apparels are designed keeping in mind the

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most up-to-date fashion trends.

Slogan: “Kids wear, with care”

II. Vision:
“To be a distinguished kid-wear retailer known worldwide for the quality of products,
setting new trends and lifestyles”

III. Mission:
“To offer continuous value added products to our customers”.

To accomplish this, we focus on exceptional design, innovation, quality, convenience

and interactive communication.

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 IV. Strengths and Core Competencies:
The foundation parameters on which we ensure the excellence of our garments are:

 Material

 Cut

 Design conformation

 Embroidery

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 Stitching

 Stability

 Finish

 Color fastness

V. Challenges:
 Increasing competition, especially from big chains like Wal-Mart, Gap and
Limited Incorporations

 High cost materials

 Changing demands and catering to this demand

 Changing fashions and changing behavior of demographics

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 Services Overview

I. Services:
For different age groups, our variety of children wear is offered in different sizes and is
tremendously comfortable to wear. Our offered clothing collections for kids are:

Hooded T-Shirts

We offer an exceptional range of t-shirts with hoods that are offered in a multitude of

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colors and patterns.

Printed T-Shirts

We make an extensive range of in print t-shirts that are offered in diverse colors and
prints.

Children's T-Shirts

An exclusive range of full sleeve children's t-shirts

Half Sleeve T-Shirts

We offer a broad range of half-sleeve t-shirts

Cotton Knickers

Knickers are one of the trendiest as well as the most comfortable garment for kids,
Available in eye catching prints and colors.

II. Benefits and Features:

Highlighted features:

- Lovely designs and prints

- Eye-catching colors

- Long-lasting Apparels

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 - Comfortable to wear

- Available in various sizes

III. Why people need this service?

A number of the factors that have made us the ideal choice of our customers are:

 Various variety under a single roof

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 Quality guaranteed goods

 Customization

 Capacity to accept mass orders

 Well-timed delivery

 Easy payment modes of Cash

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 Marketing Plan

I. Market Analysis:

A. Market Description

US kids wear market is highly competitive market, especially after big retail stores and
chains like Wal-Mart, Gap etc entered in the market. Market is shifting from growth to
maturity. The clothing business saw approximately $167,934 million in retail sales; the

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share of the Children's & infants' clothing stores is $7,082 millions, the total share of the
state Illinois is $328.8 millions, the share of Chicago is $43.356 millions.

B. Market Facts

a) Market Size:

Clothing Industry of USA:

In the year 2002, the clothing business saw approximately $167,934 million in retail
sales, which were $136,398 millions in 1997. Women's clothing brought in $63,587
millions, men's apparel accounted for $27,941 millions, and Footwear, including
accessories, accounted for $25,948 millions. Jewelry, including watches, watch attach,
novelty jewelry, etc accounted for $23,950 millions, Children's wear, including boys,
girls, & infants & toddlers accounted for $14,287. Others accounted for $12,218 millions.

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 SAMPLE BUSINESS
Sales Industry
Product description
($mn) Sales %
Industry total 167,934 100
Women's, juniors', & misses' wear 63,587 37.86
Men's wear 27,941 16.64
Footwear, including accessories 25,948 15.45
Jewelry, incl watches, watch attach, novelty
jewelry, etc 23,950 14.26
Children's wear, incl boys, girls, & infants &
toddlers 14,287 8.51
Other 12,218 7.28

These statistics computed on the information taken from US Census official site1.

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 SAMPLE BUSINESS
ThE cLOthINg bUSINESS SAw APPrOxIMAtELy $167,934 MILLION IN rEtAIL SALES, whIch ArE
$136,398 MILLIONS IN 19972.

Industry Ratios 2002 1997

Total sales (Mil $) 167,934 136,398

Sales per establishment ($000) 1,121 871
Sales per employee ($) 117,719 106,548
Sales per $ of payroll ($) 7.85 8.22
Annual payroll per employee ($) 14,995 12,965
Employees per establishment 9.5 8.2
Sales per capita ($) 582 500
Establishments per million
residents 519 574

In total, there was a growth of about 23.1% from 1997 to 2002 in the industry. In this
table, the total sales per establishment stands at $1,121,000 and sales per capita is
$519 million. This table also shows other indicators such as sale per employee, sales
per payroll, annual payroll per employee and comparison of these indicators with past
data. In this table, this is clear that for the past 5 years, growth in every indicator is
significantly huge which shows the potential of the market and that the market is
growing drastically.

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 Industry Industry
Retail description
Sales % Sales
Industry total 100% 167,934,060
Specialty stores 21% 35266153
Discounters 19% 31907471
Department stores 19% 31907471
Major chains 17% 28548790
Off-price stores 7% 11755384
Mail order 6% 10076044

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Outlets 4% 6717362
Other stores 7% 11755384

According to the American Apparel Manufacturers Association, the breakdown on total

share of retail sales was as follows: Specialty stores: 21 percent; discounters: 19
percent; department stores: 19 percent; major chains: 17 percent; off-price stores: 7
percent; mail order: 6 percent; outlets: 4 percent; and other stores: 7 percent 3.

It highlights that discounter stores like Sam’s Kids Wear have the second largest share
in the total retail sales in the USA.

C. Market Growth:
The total US market for all clothing is $167,934 millions, out of which the share of the
children's & infants' clothing stores is $7,082 millions which was $4,638m in 1997,
almost grown by 50% since last 5 years.

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 SAMPLE BUSINESS
Market in 5 years grown very drastically, almost growth rate of 50% can be observed
according to this graph.

Industry Ratios 2002 1997

Total sales (Mil $) 7,082 4,638
Sales per establishment ($000) 1,080 907
Sales per employee ($) 105,690 99,699
Sales per $ of payroll ($) 9.03 9.78
Annual payroll per employee ($) 11,708 10,198
Employees per establishment 10 9.1
Sales per capita ($) 24 17
Establishments per million
residents 22 18

In this table with sales, different indicators are shown in a comparison of past 5 years
and it’s clearly shown that sales per capita and establishments per million residents
increased drastically with sales, showing immense growth in the market 4.

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 Industry
Retail description Industry Sales
Sales %
Industry total Kids Market 100% 7,082.20
Specialty stores 21% 1,487.26
Discounters 19% 1,345.62
Department stores 19% 1,345.62
Major chains 17% 1,203.97
Off-price stores 7% 495.754
Mail order 6% 424.932
Outlets 4% 283.288

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Other stores 7% 495.754

In this table, market share is shown as per type of business (Outlet type). If we look at it
closely, major share is taken by specialty stores, discounters, department and chain
stores. So for discounters it’s a great opportunity to penetrate in this market.

The above chart shows the share of Children's & infants' clothing stores in the USA as
$7,082 millions out of which the total share of state Illinois is $328.8 millions5

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 SAMPLE BUSINESS
The above chart presents the share of Children's & infants' clothing stores i.e. $7,082
millions. The total share of the state Illinois is $328.8 millions which was $247 millions in
1997, which almost increased by 100 millions and 33% in last 5 years 6.

Kids’ clothing market share of Illinois was $328.8 millions in 2002, out of which the share
of Chicago is $43.356 millions. It highlights that market is growing at the rate of 33%.

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 D. Market Trends:

From 1995 to 2005 break dedicated to children's wear in malls more than twice

Nationalized brands began producing small-sized versions of their teenager and

mature lines and invested a lot in expanding their infant and children outfit’s brands.

E. Market Demand:
Shifting demographics made the children's and infants' wear business look attractive to
new entrants and, therefore, the market became tremendously competitive. Big retail
chains began to penetrate the market. Sales continued to grow. Fueling this growth was

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a climb in birth rates in the late 1980s and early 1990s, which amplified demand for
infants' and toddlers' wear.

Industry sales normally peak between late August and December. Throughout this
phase, stores compete for valuable back-to-school sales and holiday gift purchases.
Stores normally generate between 30 and 40 percent of their annual sales in these
months.

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 F. Industry Life Cycle

Kids clothing market is at maturity stage although it’s generating good demand and
sales and has good scope for businesses for next few years. The higher birth rate was
observed in late 90’s and early 2000’s which boomed the market and now demand is
still growing but with slow birth rates as compared to past years. This makes industry
stand at maturity level in its life cycle.

Although this sector of the industry is season-driven, this cycle will not affect it much.

Cyclical trends in Industry

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 With record high numbers of infants, toddlers, and children attending preschool
during the year, clothing purchases for this slice are becoming less cyclical.

 This business has conventionally been highly seasonal, as with other clothing
businesses, so spring is on the way, this is also the season for weddings,
and Kids has some gorgeous dresses and suits for wedding parties.

 New sessions of schools will be starting in month or so (march to august)

which also boost the sales of kids wear.

 Month of December also a high sales month due to Christmas

celebrations people love to shop and buy presents

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 Jan. Feb. Mar. Apr. May-0 Jun.
Description 2002 2002 2002 2002 2 2002
Clothing and clothing 10,36 11,75 14,00 13,21 14,17
access. stores 1 5 2 8 7 13,233
CLOthINg StOrES 7,474 7,979 10,190 9,528 9,894 9,540
MEN'S cLOthINg StOrES 539 532 656 631 663 649
WOMEN'S cLOthINg
StOrES 1,989 2,162 2,783 2,683 2,759 2,482
FAMILy cLOthINg StOrES 3,596 3,851 5,058 4,728 4,984 4,954
OthEr cLOthINg StOrES 681 657 753 677 703 713
Jul. Aug. Sep. Oct. Nov. Dec.

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Description 2002 2002 2002 2002 2002 2002
Clothing and clothing 12,89 15,13 12,46 14,02 15,93 25,41
access. stores 5 7 5 7 6 1
CLOthINg StOrES 9,347 10,814 9,147 10,471 11,711 16,859
MEN'S cLOthINg StOrES 592 695 606 672 764 1,120
WOMEN'S cLOthINg
StOrES 2,262 2,540 2,375 2,533 2,742 3,970
FAMILy cLOthINg StOrES 5,035 5,843 4,700 5,638 6,527 9,391
OthEr cLOthINg StOrES 643 675 626 730 755 1,193

As green color filled columns show, sales during March, August, November and
December is very high in the US7.

G. Market Potentials:
Shifting demographics made the children's and infants' wear business attractive to new
entrants and, therefore, tremendously competitive.

Sales will continue to grow in the next 3 years:

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 SAMPLE BUSINESS
 In the next 5 years, total sales in kids’ clothing retail market will be $57.66
millions and in 2012 will be $76.7 mill.

 It shows that there’s a huge and profitable market for Children's & infants'
clothing stores in the city of Chicago, which is growing at rapid rate.

 This growth was due to a climb in birth rates, which amplified demand for infants'
and toddlers' wear.

Retail description Industry Market Sales

Sales %
Industry total 100% 43.35
Specialty stores 21% 9.1035
Discounters 19% 8.2365
Department stores 19% 8.2365
Major chains 17% 7.3695
Off-price stores 7% 3.0345
Mail order 6% 2.601
Outlets 4% 1.734
Other stores 7% 3.0345

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The above are the growth potentials for this type of business. It clearly shows if you are
a discounter, u can penetrate easily and win very huge share almost of $8.24 millions.

Even if you are a simple outlet, you can be in the class to earn 1.73 million markets as
just a starter, which is not a bad option. It shows great potential for small business or
any starter in the market.

H. Market Opportunities:
 Market is growing with a rapid rate so it’s a great opportunity to enter in
the market where demand is increasing drastically

 Birth rate has remained high in the past 5 years meaning more potential for

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kids’ wear purchasing.

 Country is going through recessionary period so parents are on tight budget,

which is a great opportunity for our business to offer discounts and low
pricing packages to attract our consumers

 This business has conventionally been highly seasonal, as with other clothing
businesses, so spring is on the way, this is also the season for weddings,
and Sam’s Kids Wear has some gorgeous dresses and suits for wedding
parties.

 New sessions of schools will be starting in month or so.

 With the infants' and children's wear division on the rise, the industry's opening
products continue to be licensed apparel, such as Scooby Doo, Star Wars,
Bob the Builder, and Blues Clues as well as sports-related licenses and
focusing on these character printed wears business can achieve huge sales as
demand of these characters is increasing amongst kids.

I. Barriers to Entry:
Market is highly competitive, so no such barriers exist in the industry.

J. Regulations:
No such regulations except license required from animator of the character which will
be used in printing.

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 II. Service Potential:
As our business is clothing for kids, and in this sector trends changes quickly, so
potential products will always be in line with differentiation of colors and design.

III. Targeted Audience:

Since our business is kids wear, so our primary target audience will be:

Demographics:

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Primary Target:

Age: 6-11 years

Secondary:

Family

Our target markets for kids’ clothing are Parents (Mother / Father).

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Total population of Chicago is 2,896,016 and our target audience is:

Age Population
5 to 9 years 218,522
10 to 14 years 224,012
Total (5 to 14 Years) 442,534

According to US Census Bureau

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Characteristics of Targeted Customer Groups (sales):

Description % Sales ($ mil)

Market Total 100% 43.35
50.86
Girls' clothing & accessories % 22.05
23.77
Infants' & toddlers' clothing & accessories % 10.3
19.03
Boys' clothing & accessories % 8.25
Other 6.34% 2.75

These stats are clearly showing that in kids sectors, girls’ wear sales is 50 % of the
whole kid sector so our products line would be according to the needs of the market and
purchasing trends.

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 IV. Competition:

Anne's Kids

Products:

- Bridal gowns
- Flower girls
- and Bridesmaids

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4509 N Clark St, Chicago, IL

LMNOP

Products:

- Missing Dog Head T-Shirt

- Black Ladies T-Shirt
- Babysue T-Shirt

2574 N Lincoln Ave, Chicago, IL

Pottery Barn Kids

Products:

- Girls' Bodysuits & Tops

- Girls' Sweaters & Jackets
- Girls' Dresses & Pants
- Outfits
- Boys' Bodysuits & Tops
- Boys' Sweaters & Jackets
- Boys' Overalls & Pants
- Gifts & Accessories
- Newborn Collection

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 - Baby Clothing Sale

2111 N Clybourn, Chicago, IL

Wear Me Out Childs Wear

- Children's boutique clothing

- Boys formal wear and girls formal wear
- Boys suits and tuxedos

3724 N Southport Ave, Chicago, IL

Psycho Baby

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- Cool Baby Girl Clothes
- Cool Baby Boy Clothes
- Hip Girls' Clothing
- Hip Boys' Clothing
- Cool Baby & Kids' Tees
- Trendy Shoes

1630 N Damen Ave, Chicago, IL

V. Market Niche:

Our niche market is kids sector or people who buy kids wear.

VI. Marketing Strategy

 Basic strategy of our business is to launch kids wear by the next two
months. Initially we launch normal kid’s wear which will cater the needs of
masses.

 By the end of the year, we will launch customized products to cater to the need
of every individual customer.

 Later on, school accessories and school wear are also in the pipe line

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 a) Value Proposition

Sam’s Kids Wear:

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Our core value proposition is that we will add value to our product by providing
matchless kids wear with extensive range of color and different sizes in comfortable and
durable fabric with easy mode of cash transactions at comparatively low prices.

b) Branding

We position our selves as a brand, which gives quality products at fairly low prices with
extensive range of vibrant colors and continuous value addition to our products with
innovative ideas in design in printing.

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 c) Marketing Objectives

Image ourselves as a brand with competitive edge

 To offer continuous value added products to our customers

 To achieve our financial target

 Set a benchmark in industry as a cost leader through minimization of waste

and improve performance

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d) Strategy

 Meet the demands of market and supply demanded goods on time without
any barrier or hurdle

 Offer excellent products at low price

 Make products according to the needs of the customer

 Give good hassle-free ambiance for shopping, which will help the business
and give edge over rivals

 Develop a kids-friendly store environment and decoration, which will

attract parents to bring their kids in the store and shop with comfort.

VII. Marketing Budget:

2009 2010 2011

Marketing and Promotion $150,000 $350,000 $350,000

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 VIII. SWOT Analysis
Strength:

 Huge Product Line with variations.

 Business will have longer hours and better prices as compared to

competitors.

 Discounts are available for bundle buying.

 Expertise in getting new products to the market quickly

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 Expertise in providing good customer service

 Online selling could be a competitive edge over similar rivals

 Customization available for individual customers

Weakness:

 New in business as compare to rivals

 Huge capital required to start business as credit is not easily available from
supplier in start

 Marketing expense in the start will be huge, to establish brand name required
lot of advertising

Opportunity:

 Seasonal business: in summer demand is very high as new academic

session starts and also a wedding season

 Sector is growing fast in state and in the area our business operating

 Girls’ wear demand is huge so adding value in this category will be the
great advantage

 High birth rate since past years is another opportunity for kids wear section

 Animated movies increased the demands and popularity of printed shirts for kids

Threat:

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  Competition is high and big chains like Wall-Mart, Gap and Limited Incorporation
introduced their kid’s shops in the city and penetrating in market

 People are more conscious for pricing due to recession and going for discounts

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 Graphical Presentation of SWOT

Helpful Harmful
FOr AchIEvINg thE ObjEctIvES FOr AchIEvINg thE ObjEctIvES

Strength Weakness
 Huge Product Line with variations  New in business as compare
 Business will have longer hours and
better prices as compare to
to rivals
Interna competitors
 Huge capital required to start

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l  Discounts are available for bundle
buying business as credit is not
 Expertise in getting new products to easily available from
the market quickly suppliers in start
 Expertise in providing good customer
service
 Marketing expense in the
 Online selling could be a competitive
edge over similar rivals start will be huge, to
 Customization available for individual establish brand image
customers required lot of
advertising

Opportunities Threats
 Seasonal business: in summer  Competition is high and big
demand is very high as new academic chains like Wall-Mart, Gap and
Extern session starts and also a wedding Limited Incorporation introduced
season
their kid’s shops in the city and
al penetrating in market
 Sector is growing fast in state and in
the area our business operating

 Girls wear demand is huge so add

value in this category will be the great  People conscious for pricing due
advantage to recession and going for
discounts
 High birth rate since past years is
another opportunity for kids wear
section

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 IX. Marketing Mix

a) Product:

We present an extensive range of kids’ wear that are manufactured using different
fabrics such as cotton, silk, wool and others. Available in a wide range of gorgeous
colors, designs and prints, these apparels are designed keeping in mind the most up-to-
date fashion trends.

The different age groups, our variety of children wear is offered in different sizes and is
tremendously comfortable to wear. Our main wearing collection offered for kids are:

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Hooded T-Shirts

We offer an exceptional range of t-shirts with hoods that are offered in a multitude of
colors and patterns.

Printed T-Shirts

We make an extensive range of in print t-shirts that are offered in diverse colors and
prints.

Children's T-Shirts

An exclusive range of full sleeve children's t-shirts

Half Sleeve T-Shirts

We offer a broad range of half-sleeve t-shirts

Cotton Knickers

Knickers are one of the trendiest as well as the most comfortable garment for kids,
Available in eye catching prints and colors.

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 b) Price:

Penetration Pricing will be the pricing strategy for our business, as our business is
new and at the high street of Chicago where competition is huge, so we try to give
good quality at low price to penetrate in the market and try to achieve higher sales
volume to set low price and better quality strategy. Once we achieve this objective then
try to charge higher price for our customized products for value addition.

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c) Place:

At one of the high street of Chicago City

d) Promotion:

Advertising:

1. Above The Line:

- Internet

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 - Radio

- Magazines ( Parents and kids magazines only)

- Newspapers ( Only Weekends for two or three weeks)

2. Below The Line:

- Flyers ( through hawkers)

- Coupons

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 Operational Plan

I. Service Execution Model

SKW will sell products by following methods:

Retail Store: They will open a store in Chicago, Illinois area which will be the primary
location for their supplies storage also.

Online Selling: They will offer their main products on the website, which will provide

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convenience to customers in purchasing kids wear and related products.

Sam’s Kids Corner

2009 launch objectives
March April May June July – Sept.

2009 2009 2009 2009 2009

Select Location
✓
Develop Store
✓ ✓
Start Basic Kids
Products available
for Selling
✓
Start Online Selling
✓
Full services
(Customization) ✓
Expand Product
Line
✓ ✓
Start Planning For
New Location
✓ 1

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Location:

N Damen Ave Chicago, Illinois.

II. Legal Environment

 SKW has no legal obligations with their suppliers and customers except for
the printing of animated copyright characters.

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 The company faces no major legal constraints other than the restriction of
marketing directly to children under age 13 under the Child Protection
Laws.

III. Personnel

Management and Organization

SKW operates with 5 people staff. It helps them controlling budget and decreasing
overhead expenses as well.
Mr. Samuels Arnold
(Owner/Manager/Accountant)

Supervisor Inventory

(Retail and Store)

Tailor Sales Person 1

(For Basic Customization)

Sales Person 2

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 IV. Management Strength

A. Management’s Credentials and Expertise

Academic:

Mr. Sam is Business Graduate from University of Chicago having good academic
knowledge of retail business.

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Professional:

Mr. Sam has vast experience of retailing and clothing business at top levels in some of
the biggest chains at international and national level for 5 years.

B. Experience in Management Position:

 Mr. Sam has worked as a senior manager for clothing section of Wall-Mart
for almost 3 years.

 He has also worked as Assistant director kids section at Gap international for
2 years.

 He has also been continuously involved in strategic planning and

decision- making in the companies.

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Advisor & Consultant:

Chicago business consultants group inc.

Our Lenders say YES, when your bank says NO.

Ronald J Filian
847-839-8810 Phone
866-344-4339 Fax

Advance Consulting Group International

SAMPLE BUSINESS
300 West Adams Street Chicago, IL 60606
(312) 357-1840

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 Financial Plan

I- Start-up Expenses Summary

The start-up expenditures for Sam’s Kids Wear (SKW) are summarized below:

Startup Expense Summary

Sam’s Kids Wear

SAMPLE BUSINESS
Sources of Capital

Investment requirement $1,000,000

-
Total Investment $1,000,000

Startup Expenses

Retail store development $346,000

In-store Staff $290,000
Capital Expenditures $150,000
Consulting Services $90,000
Promotion $5,000
Total Start-up Expenses $881,000

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 SAMPLE BUSINESS

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 II- Revenue Forecast (3- Year)

Revenue Forecast (3 Years)

Sam’s Kids Wear, Inc

Year 1 Year 2 Year 3

Kids Clothing Range

SAMPLE BUSINESS
Hooded T-shirts $367,500 $1,470,000 $4,410,000
Printed T-shirts $428,750 $1,715,000 $5,145,000
Children's T-shirts $245,000 $980,000 $2,940,000
Half Sleeve T-Shirts $122,500 $490,000 $1,470,000
Cotton Knickers $61,250 $245,000 $4,410,000
sub total clothing range $1,225,000 $4,900,000 $14,700,000

Accessories - $35,000 $42,000

Total Revenue $1,225,000 $4,935,000 $14,742,000

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III- Profit and Loss Projection (3-Year)

Year 1 Year 2 Year 3

Revenue (Sales)

Kids clothing range $1,225,000 $4,900,000 $14,700,000

Accessories - $35,000 $42,000

Total Revenue (Sales) $1,230,000 $4,940,000 $14,751,000

SAMPLE BUSINESS
Operating Expenses

Retail store development $346,000 - -

In-store Staff $290,000 $840,000 $940,000

Capital Expenditures $150,000 $148,200 $150,000

Consulting Services $90,000 $480,000 $480,000

Promotion $5,000 $6,000 $6,000

Total Operating Expenses $881,000 $1,474,200 $1,576,000

Profit Before Taxes $322,900 $3,385,800 $13,025,000

Taxes (10%) $32,290 $338,580 $1,302,500

Net Profit $290,610 $3,047,220 $11,722,500

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 SAMPLE BUSINESS

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 IV- Pro forma Cash Flows (3- Year)

Pro forma Cash Flows

Sam’s Kids Wear

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $1,230,000 $4,940,000 $14,751,000

SAMPLE BUSINESS
Subtotal Cash from Operations $1,230,000 $4,940,000 $14,751,000

Additional Cash Received

New Borrowing $1,000,000 $0 $0
Subtotal Cash Received $2,230,000 $4,940,000 $14,751,000

Expenditures

Expenditures from Operations

In-store Staff $290,000 $840,000 $940,000
Consulting Services $90,000 $480,000 $480,000
Promotion $5,000 $6,000 $6,000
Subtotal Spent on Operations $385,000 $1,326,000 $1,426,000

Additional Cash Spent

Taxes $32,290 $338,580 $1,302,500
Purchase Long-term Assets $810,000 $810,000 $1,345,000
Subtotal Cash Spent $1,227,290 $2,474,580 $4,073,500

Net Cash Flow $1,002,710 $2,465,420 $10,677,500

Cash Balance $1,012,710 $3,478,130 $14,155,630

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 V- Projected Balance Sheet:

Balance Sheet (Projected)

Sam’s Kids Wear, Inc

Beginning Projected
Year 1
Assets

Current Assets
Cash in bank $10,000 $1,012,710

SAMPLE BUSINESS
Accounts receivable - 14,040
Prepaid expenses 1,500 1,500
Total Current Assets $11,500 $1,028,250

Fixed Assets
Capital Expenditures $346,000 $660,000
Store Furniture $150,000 $150,000
Total Fixed Assets $496,000 $810,000

TOTAL Assets $507,500 $1,838,250

Liabilities and Equity

Current Liabilities

Accounts Payable $0 $40,140

Long-term Debt
Bank loans payable $0 $1,000,000

Total Liabilities $0 $1,040,140

Owners' Equity
Retained earnings - beginning $507,500 $507,500

Retained earnings - current - $290,610

Total Owners' Equity $798,110

Total Liabilities & Equity $507,500 $1,838,250

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 VI- Breakeven Analysis

Breakeven Analysis
Sam’s Kids Wear, Inc

Variable Costs
Cost Description Fixed Costs ($) (%)
Variable Costs
Personnel 10.00%

SAMPLE BUSINESS
Consulting services 3.00%

Fixed Costs
Retail store development $346,000
In-store Staff $290,000
Capital Expenditures $150,000
Consulting Services $90,000
Promotion $5,000
Taxes $32,290

Total Fixed Costs $913,290

Total Variable Costs 13%

Breakeven Sales level = 1049759

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 Appendix

NOTE: All statistical data for sales and for population demographics were taken from
official websites of US census and economic census.
www.census.gov

http://www.census.gov/econ/census02/data/industry/E448.HTM

SAMPLE BUSINESS

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