Gaian Adventure Fabrics is a small retail company that also operates an online store. The company is owned by Martha Thimble, operating as a sole proprietorship.

To start the business, Gaian Adventure Fabric and Notions will need the following items:

– Computer system with printer, CD-RW, Microsoft Office, QuickBook Pro, and scanner.

– Phone line with DSL Internet connection.

– Desk, chair, and file cabinet.

– Rack for fabric storage.

– Shelving for organizing notions.

– Large table for fabric cutting.

– Hand rotary fabric cutter, electric rotary fabric cutter, cutting boards.

– Inventory.

Note that long-term assets, such as the computer system, phone line, desk, chair, file cabinet, rack, and shelving, will be depreciated using the G.A.A.P. approved straight-line depreciation method.

Ecommerce Fabric Store Business Plan Example

Gaian Adventure Fabric and Notions specializes in selling outdoor fabrics and notions. The products they offer include fleece (Malden Mills 100, 200, 300, power stretch, wind bloc, and thermal stretch), coated nylons (ripstop, taffeta, oxford-poly, oxford-nitrile, packcloth-poly, packcloth-PVC, 1000 denier Cordura, 500 denier Cordura, and ballistic), breathable fabrics (no-seeum netting, sport mesh, micromesh, leno mesh, supplex, and taslan), waterproof breathables (3-layer Gore-Tex, 2-layer Gore-Tex, Sympatex, and Ultrex), and various notions (Nikwax waterproofing, hook and loop, nylon and polypropylene webbing, grosgraine ribbon, poly herringbone, zipper tape and fixed length zippers, thread, assorted plastic Fastex brand hardware, and patterns).

The market for Gaian Adventure Fabric and Notions can be divided into three segments: walk-in customers, Internet customers, and Internet customers from large companies. Each segment will be addressed separately.

Walk-in local customers are individuals who live nearby and visit the shop to purchase products for their projects.

Ecommerce Fabric Store Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Walk-ins 9% 3,654 3,983 4,341 4,732 5,158 9.00%

Internet individuals 12% 26,545 29,730 33,298 37,294 41,769 12.00%

Internet company customers 8% 1,245 1,345 1,453 1,569 1,695 8.02%

Total 11.51% 31,444 35,058 39,092 43,595 48,622 11.51%

4.2 Target Market Segment Strategy

Gaian Adventure Fabric and Notions plans to target different groups in the following ways:

– Walk-in customers will be targeted through advertisements in the yellow pages and strategic relationships with local outdoor stores and sewing machine stores. This will provide easy access for local customers and utilize existing connections.

4.3 Industry Analysis

The consumer outdoor fabric industry was once small and focused on local needs. In recent years, a few mail order companies have emerged. However, most of these companies have not migrated to the internet and their websites are not comprehensive.

4.3.1 Competition and Buying Patterns

Gaian Adventure Fabric and Notions faces competition from mail order companies, internet retailers, and retail outlets.

– Mail order companies typically rely on catalogs and do not have a significant online presence. Their lack of online presence indicates stagnant management and is not a major concern.

– Internet retailers are similar to Gaian Adventure Fabric and Notions, but none of their websites offer a comparable product selection.

– Retail outlets, such as fabric stores and outdoor retailers, serve a limited local area.

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In the Eugene area where Gaian Adventure Fabric and Notions is located, there are a few stores with a limited selection. People are increasingly willing to shop online, especially for outdoor fabrics and notions, due to the convenience and extensive product catalogs available.

Gaian Adventure Fabric and Notions recognizes that the brick and mortar store will be relatively insignificant compared to the e-commerce portion of the business. The internet allows them to reach a wide audience and the focus will be on building a robust website. Specials will be offered to encourage repeat visits.

They will use WebTrends Web traffic monitoring software to gain insight into customer needs and modify their products and services accordingly.

5.1 Competitive Edge

Gaian Adventure Fabric and Notions’ competitive edge is their focus on e-commerce. While they will have a brick and mortar store with the same product offerings, the website is the foundation of the business due to its cost-effectiveness and ability to reach a global market. Currently, there is no excellent website offering an extensive selection of outdoor fabrics and notions.

To gain market share, Gaian Adventure Fabric and Notions will focus on continually improving their website and meeting customer needs.

5.2 Sales Strategy

The sales strategy will differ for the brick and mortar store and the e-commerce side of the business.

– For the brick and mortar store, Gaian Adventure Fabric and Notions will offer superior customer support, approaching customers as soon as they enter the showroom. Employees will offer advice and suggest additional accessories for customers’ projects.

– For the e-commerce side, Gaian Adventure Fabric and Notions will focus on making the website easy to navigate and purchase from. They will have meaningful weekly specials to reward frequent website visitors.

5.2.1 Sales Forecast

The first month will be dedicated to setting up the store and website, with no sales activity. Sales will gradually increase over the first nine months, reaching profitability by month nine.

Ecommerce Fabric Store Business Plan Example

Ecommerce Fabric Store Business Plan Example

Sales Forecast:

Sales Forecast
Year 1 Year 2 Year 3
Sales
Walk-ins $14,122 $21,509 $24,112
internet individual customers $108,630 $165,455 $185,475
internet company orders $6,518 $9,927 $11,129
Total Sales $129,270 $196,891 $220,715
Direct Cost of Sales Year 1 Year 2 Year 3
Walk-ins $12,224 $9,679 $10,850
internet individual customers $48,884 $74,455 $83,464
internet company orders $2,933 $4,467 $5,008
Subtotal Direct Cost of Sales $64,040 $88,601 $99,322

5.3 Milestones

Gaian Adventure Fabric and Notions will have several milestones early on:

  1. Business plan completion. This will be done as a roadmap for the organization, an indispensable tool for ongoing performance and improvement.
  2. Office set up and website launching.
  3. Profitability.
  4. Revenues exceeding $75,000.

Milestones:

Milestones
Milestone Start Date End Date Budget Manager Department
Business plan completion 1/1/2001 2/1/2001 $0 ABC Marketing
Office setup and website launching 1/1/2001 2/1/2001 $0 ABC Department
Profitability 1/1/2001 9/31/2001 $0 ABC Department
Revenues exceeding $75,000 1/1/2001 4/31/2002 $0 ABC Department
Totals $0

The information normally contained in the Web plan summary can be found in several previous sections.

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6.1 Website Marketing Strategy

The marketing strategy for the website, as stated early in the plan, will be precise submissions to all popular search engines so that Gaian Adventure Fabric and Notions is on the top of relevant search lists.

6.2 Development Requirements

The developmental requirements for the website will be tapping into the computer science department at the University of Oregon through a networking contact and finding an undergraduate or graduate student who is willing to construct the entire website at a below market rate. This should be fairly easy to do.

Martha Thimble is the founder and owner of Gaian Adventure Fabric and Notions. Educationally, Martha has a B.A. in marketing from the University of Portland. While at Portland Martha worked part-time in an R.E.I. store, providing insight into the outdoor recreation market. Upon graduation, Martha accepted a position to manage the Eugene R.E.I store.

While at R.E.I, Martha began to pick up sewing, specifically working with outdoor gear. She taught herself and learned from the R.E.I. repair person, an independent contractor who had equipment set up at the store for outdoor gear repairs.

Martha stayed at this position for three years, gaining insightful store management experience. Toward the end of her three years, she recognized that she needed to be her own boss and open her own store.

7.1 Personnel Plan

The first four months of business will only involve Martha. By month five, Martha will hire one person to work full-time. This employee will be used for order fulfillment and helping walk-in customers.

Personnel Plan:

Personnel Plan
Year 1 Year 2 Year 3
Martha $36,000 $36,000 $36,000
Employee 1 $12,800 $19,200 $19,200
Total People 2 2 2
Total Payroll $48,800 $55,200 $55,200

The following sections will outline important financial information.

8.1 Break-even Analysis

The following table and chart show our Break-even Analysis for the first year.

Ecommerce Fabric Store Business Plan Example

Break-even Analysis:

Monthly Revenue Break-even: $11,761.

Assumptions:

– Average Percent Variable Cost: 50%

– Estimated Monthly Fixed Cost: $5,935.

Projected Profit and Loss:

The table below indicates projected profit and loss.

Ecommerce Fabric Store Business Plan Example

Ecommerce Fabric Store Business Plan Example

Ecommerce Fabric Store Business Plan Example

Ecommerce Fabric Store Business Plan Example

Pro Forma Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $129,270 $196,891 $220,715
Direct Cost of Sales $64,040 $88,601 $99,322
Other Production Expenses $0 $0 $0
Total Cost of Sales $64,040 $88,601 $99,322
Gross Margin $65,229 $108,290 $121,393
Gross Margin % 50.46% 55.00% 55.00%
Expenses
Payroll $48,800 $55,200 $55,200
Sales and Marketing and Other Expenses $600 $600 $600
Depreciation $0 $0 $0
Leased Equipment $696 $696 $696
Phone line + DSL + web site maintenance $3,000 $3,000 $3,000
Insurance $1,800 $1,800 $1,800
Rent $9,000 $9,000 $9,000
Payroll Taxes $7,320 $8,280 $8,280
Other $0 $0 $0
Total Operating Expenses $71,216 $78,576 $78,576
Profit Before Interest and Taxes ($5,987) $29,714 $42,817
EBITDA ($5,987) $29,714 $42,817
Interest Expense $0 $0 $0
Taxes Incurred $0 $8,914 $12,845
Net Profit ($5,987) $20,800 $29,972
Net Profit/Sales -4.63% 10.56% 13.58%

8.3 Important Assumptions

The following table details important financial assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
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8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Ecommerce Fabric Store Business Plan Example

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Sales $129,270 $196,891 $220,715

Sales Forecast

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $5,171 $5,805 $7,122 $8,632 $10,171 $11,002 $12,445 $14,824 $16,015 $18,395 $19,689

Personnel Plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

General Assumptions:

Plan Month: 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate: 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest Rate: 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate: 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other: 0 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss:

Month 1 2 3 4 5 6 7 8 9 10 11 12

Sales: $0 $5,171 $5,805 $7,122 $8,632 $10,171 $11,002 $12,445 $14,824 $16,015 $18,395 $19,689

Direct Cost of Sales: $0 $2,145 $2,763 $3,440 $4,135 $4,842 $5,355 $6,023 $7,247 $7,994 $9,458 $10,637

Other Production Expenses: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales: $0 $2,145 $2,763 $3,440 $4,135 $4,842 $5,355 $6,023 $7,247 $7,994 $9,458 $10,637

Gross Margin: $0 $3,025 $3,042 $3,682 $4,497 $5,329 $5,647 $6,422 $7,577 $8,021 $8,937 $9,052

Gross Margin %: 0.00% 58.51% 52.40% 51.70% 52.10% 52.39% 51.33% 51.60% 51.11% 50.08% 48.58% 45.97%

Expenses:

Payroll: $3,000 $3,000 $3,000 $3,000 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600

Sales and Marketing and Other Expenses: $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50

Depreciation: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Leased Equipment: $58 $58 $58 $58 $58 $58 $58 $58 $58 $58 $58 $58

Phone line + DSL + web site maintenance: $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Insurance: $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150

Rent: $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750

Payroll Taxes: 15% $450 $450 $450 $450 $690 $690 $690 $690 $690 $690 $690 $690

Other: $0 $0 $0 $0 $

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