1 Executive Summary
Men looking for distinct and unique office wear and shoes will greatly benefit from OfficeElegance.com online clothing shop. OfficeElegance will remove the need for distributors and middlemen and make it possible for men to access functional, elegant, and beautiful office wear at affordable prices. This will work to reduce additional costs that will accrue as a result of complicated sales chain if middlemen are involved; thus, customers will be able to enjoy great savings given that they will paying for their favorite office wear and shoes at cheaper prices than they are used to, when they shop from normal offline fashion or clothing stores.
The OfficeElegance apparel collection would be produced of great design, high-quality materials, and sophisticated designs that have never been seen before in the industry within the first year. OfficeElegance will no longer be a one-city operation, but will be able to attract young men and women in most cities around the United States that are shopping for elegant and exclusive office wear and shoes. This can be due to the last decade’s massive advances and improvements in internet infrastructure, radio broadcasting, and cable television. As a consequence of these massive advances in telecommunications technologies, consumers’ preferences and desire for goods that reflect the increasingly evolving fashion industry have risen.
OfficeElegance’s owners and managers have significant experience in the fashion industry, especially in the outdoor apparel industry. Indeed, they have been interested in the production of office clothing, both men’s and women’s, for the past four years, and are thus well-versed in emerging fashion patterns as well as customer desires and tastes. One distinction between OfficeElegance and other apparel e-commerce websites for men and women is that it only offers office wear and accessories for men and women aged 18 to 24. Furthermore, OfficeElegance will not retain apparel inventory and will now partner with Ted Clothing Company in Boston, Massachusetts, to manufacture and deliver/ship all of OfficeElegance’s garments. In addition, OfficeElegance will partner with Lambretta Shoes Firm, headquartered in Boston, Massachusetts, to manufacture and deliver/ship all of OfficeElegance’s shoes. Office Elegance’s design team will closely work with both Lambretta Shoes Company and Ted Clothing Company’s design teams to ensure that the office wears and shoes sold by OfficeElegance are indeed trendy, beautifully, elegant, of great design, and of high value fabrics as envisioned.
OfficeElegance mission is to offer its customers with office wear, both shoes and clothing that are indeed trendy, beautifully, elegant, of great design, and of high value fabrics; that energizes office activity. Whether it is normal office routine, outdoor office assignments and events, or meetings, OfficeElegance office wear are durable, comfortable, beautiful, trendy, and makes people feel and look wonderful.
1.2 Keys to Success
- A website that is well designed, easy to use (user friendly), equipped with functionalities that makes its entertaining to use; giving users the experience of being on their favorite local store(Carroll & Broadhead , 2001, p.39).
- Developing a store image, which customers will consider beingattractive, trendy, and elegant.
- Developing an excellent relationship with vendors, both Lambretta Shoes Company and Ted Clothing Company’s in order to facilitate and guarantee timely and fast shipments.
- Establishing an efficient, effective, and successful marketing and advertising strategy which will ensure that the target clientele of 18-24 years office goers are reached.
- Establishing an excellent customer relationship and interaction by ensuring timely response to customers FAQs and feedbacks, as well as addressing complains and concerns(Belew & Elad, 2009, pp.206-208).
- Focusing on building customer confidence by ensuring the website’s security is guaranteed, and that in case deliveries are not as per customer’s choice, then there is some sort of money back guarantee(Carroll & Broadhead , 2001, p.44).
2 Company Summary
OfficeElegance will deal in office wear, both shoes and clothing that are indeed trendy, beautifully, elegant, of great design, and of high value fabrics; that energizes office activity; for both men and women. These clothing will be ideal for normal office routine, outdoor office assignments and events, or meetings. OfficeElegance office wear will be durable, comfortable, beautiful, trendy, and makes people feel and look wonderful. James O’Connor and Sherry Brandt, the owners of OfficeElegance, have considerable expertise in the fashion industry, especially in the outdoor apparel industry, and will seek to establish a cost-effective operation that will ensure consistent and timely shipping while eliminating product storage and middlemen costs. This will be done by partnership with third-parties such as Ted Apparel Company in Boston, Massachusetts, which will manufacture and deliver/ship all of the garments, and Lambretta Shoes Company in Boston, Massachusetts, which will produce and deliver/ship all of the shoes for OfficeElegance. Transactional processing of orders will be done by OfficeElegance online, which will also be responsible for the collection of online payments. The order will then be sent to either Ted Clothing Company or Lambretta Shoes Company both located in Boston, Massachusetts depending on whether it is for shoes or for clothing, where it will be processed and shipped to the buyer.
Focus will also be on marketing the office wear shoes and clothes to the targeted clientele especially in big cities such as New York. OfficeElegance will create events and make extensive use of the now popular social networking sites such as Facebook and Twitter to increase its online visibility. Use will also be made of existing local joints, business, and malls, which serve the same targeted clientele, especially with regards to staging marketing events.
2.1 Start-up Summary
Most of the start-up costs for OfficeElegance are the costs for design and development of the e-commerce website and the costs associated with advertising and marketing of the E-commerce website, both offline and online campaigns in order to increase visibility. The start-up cost is funded by the investment by the owners which amounts to $320,000 and a long-term business loan amounting to $227,100.
|Computer/Equipment and Software||$50,000|
|Lease office furniture||$15,000|
|Brochures & other marketing materials||$700|
|Other Miscellaneous expenses||$300|
|Total Start-up expenses||$97,100|
|Other Current Assets||$0|
|Total Start-up Assets||$450,000|
Table 2‑1: Start-up summary
|Cost of Start-up expenses||$97,100|
|Cost for start-up Assets||$450,000|
|Total Funding needed||$547,100|
|Cash Requirements from Start-up||$450,000|
|Non-Cash Assets from Start-up||$0|
|Additional Cash Raised||$450,000|
|Cash Balance at Starting Date||$450,000|
|Liabilities and Capital|
|Long –term Liabilities||$251,100|
|Outstanding Bills (A/C Payable)||$0|
|Other Current Liabilities||$0|
|Additional Required Investment||$0|
|Total Planned Investment||$320,000|
|Start-up Expenses (Loss at Start-up)||($97,100)|
|Total Liabilities and Capital||$450,000|
Table 2‑2: Start-up Funding
2.2 Company Ownership
James O’Connor and Sherry Brandt, the founders of OfficeElegance, have extensive experience in the fashion industry, especially in the outdoor apparel industry.
OfficeElegance will sell office wear, both shoes and clothing online. The office wear that we will offer will be trendy, beautifully, elegant, of great design, and of high value fabrics; that energizes office activity; for both men and women aged between 18 and 24 y. These clothing will be ideal for normal office routine, outdoor office assignments and events, or meetings. OfficeElegance office wear will be durable, comfortable, beautiful, trendy, and makes people feel and look wonderful. The office wear clothing and shoes that will be sold via OfficeElegance.com website will include:
- Men Shirts
- Rain gear
- Skirts and Dresses
- All types of ties and scarfs
4 Market Analysis Summary
Over the past two decades, the demand for quality, durable, beautiful and elegant office wear for both men and women office-goers has tremendously increased. In fact, office wear for both men and women has grown into a multi-billion dollar niche industry. The huge advancements and developments in internet technologyhas seen a rise in a number of online shops selling clothes and shoes, even office wear; however, no garment manufacturing company is exclusively selling their apparels online. As such, there are still a lot of middlemen involved and costs of distribution to retailers’ stores are still very high thus translating into expensive products for consumers. It will be simplistic to argue that the reason behind companies’ not willing to sell directly online is because the e-commerce concept is untested. Schneider (2008, p.142)argues these companies are worried that selling directly online will take away sales from their already established networks and outlets such as department stores and other retail outlets. It is true that customers can actually buy clothes that they can only see online, especially, if the process of buying gives the experience of buying from a local departmental or retail store and if the products on offer are affordable and are of great design and value.
Based on the population statistics from the United States Census Bureau, the population of office goers of the age between 18 and 24 years in 2013 was 10.8 million, 4.2% of the U.S. population. The statistics also suggested that adults aged between 18 and 24 who are working contribute to more than $280 billion dollar in annual spending and have access to close to $120 billion in disposable income. Additionally, this targeted group apparently spends about $20 billion annually and is projected to spend more than $4.6 billion online by end of 2014. On average, working class or office goers aged between 18 and 24 years spend about $120 in a week on fashion, technology, food, and entertainment. This target group are considered as Generation Y; they are the second most growing demographic below the age of 65 and dominate most aspects of the popular culture.
The Internet has become very much accessible to most people as a shopping tool, especially to our target clientele; in fact, with the advancement in technology that has seen more portable devices, including smartphones and tablets having the capability of accessing the internet, most of them can use the internet from wherever they are, any time of the day. Today, most people, especially youths aged between 18 and 24, prefer using the internet rather than watching TV; thus most of them are more likely to own devices that can access the internet such as laptops, tablets, and smartphones.
Youths aged between 18 and 24 who shop online for electronics, clothes, tickets, etc., are expected to spend close to $475 million, this year (2014) alone. This growth is expected to steadily continue and reach about $1.5 billion in online spending annually by 2017; in fact, it is projected that majority of consumers in the U.S. will prefer to shop online. Some of the things that they are most likely to purchase include clothing, computer software, books, and electronics.
It is thus clear that the key to successful marketing to the targeted customers will be embracing on extensive online marketing, especially on social networking sites such as Twitter, Facebook, and LinkedIn, as well as through traditional marketing means such as fashion and professional magazines. The advertisements will be focused on creating awareness of the existence of OfficeElegance.com, its product offering, and on removing middlemen on OfficeElegance’s clothing budget; most importantly, the focus will be on establishing OfficeElegance as a unique, distinct, and elegant style.
4.1 Market Segmentation
The dynamic in population dynamic in the U.S., especially with regards to employment has greatly changed since the 2008 economic crisis; the number of people employed have tremendously grown for adults aged between 18 and 24; most of the people in employment, office goers are in this age bracket. Furthermore, they are the most active internet users, second only to young teenagers. This apparently, has created a small multi-billion market niche for business to offer and sell clothing products to these office goers, whether with urban areas or outside urban area. Regional retail stores, malls, as well as departmental stores offer access to outdoor fashion and styles and not office wear that are in demand by young adults. Thus, OfficeElegance will focus on this unique and distinct group of men and women aged between 18 and 24 years who are office goers. They are the main group that will drive the success of OfficeElegance. This is a relatively mature and target group that knows exactly what they want; they use the internet more often and thus will not be difficult to pull to the website. They also have money and fewer responsibilities, and as such will be willing to spend on elegant and unique office wear. One key feature of generation Y that OfficeElegance will endeavor to capitalize on is the fact that these young adults wear attitude to define their identity and to feel unique and elegant; this extends to not only the music and type of hairstyle they wear, but also on the clothing that they wear.
The plan and mission of OfficeElegance is to bring elegance and beauty to office wear among the young adults who see office wear as rather boring. OfficeElegance will create an identity that will take advantage of the attitude, nature, and subculture of the targeted clientele.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
|Men Ages 18-24||20%||10,000,000||12,000,000||14,400,000||17,280,000||20,736,000||20.00%|
|Women Ages 18-24||25%||12,000,000||15,000,000||18,750,000||23,437,500||29,296,875||25.00%|
Table 4‑1: Analysis: Market
Chart 4‑1: Market Analysis
5 Implementation and Strategy Summary
OfficeElegance will capture and win a share of the market in the office wear clothing niche industry by aggressive and extensive online campaign in social media and other traditional marketing avenues such as in fashion magazines in order to increase its online visibility and its target customers’ awareness.
5.1 Competitive Advantage
OfficeElegance competitive advantage is based more on its processes as well as on its products. OfficeElegance has a lot of confidence on the quality, attractiveness, and competitiveness of its products; however, it still considers that creating an efficient access and awareness of its most website as a very important and crucial task. The website is apparently the endpoint of OfficeElegance entire marketing strategy meant to drive and increase the interest of its customers.
The massive experience that the co-owners of OfficeElegance, James O’Connor and Sherry Brandt, have in the fashion industry, particularly in the outdoor apparel industry and the fact that for the past four years, they have been involved in the design of office wear, both men and women clothes, and are thus very apprised of the current fashion trends and consumers preferences and tastes, will ensure that the quality, style, elegance, and beauty of the clothes and shoes that OfficeElegance will sell will meet the expectations, tastes, and preferences of the targeted clientele.
Further, James O’Connor have worked for Levi Strauss, a jeans manufacturing company at a time when they launched they own online e-commerce website, where he played a major role in ensuring that their site averaged five hundred thousand hits per month, will be pivotal to the success of OfficeElegance’s own e-commerce website. Most importantly, his experience will go a long way in assuring the satisfaction of customers, particularly with regards to online shopping experience.
In fact, OfficeElegance will introduce on the website, a component that will enable customers to measure clothing; it will be fun and interesting to use and will eliminate the confusion that customers have with regards to whether or not the clothing will fit. This will go a long way in improving customer experience on the website, their satisfaction, and will reduce return of goods.
Another strong competitive advantage that OfficeElegance has is its contracts with third-parties, Ted Clothing Company and Lambretta Shoes Company, both based in Boston, Massachusetts, which will produce and deliver/ship all the garments and shoes for OfficeElegance, respectively. This will ensure that production costs are low, as well as reduce OfficeElegance’s overhead costs.
5.2 Marketing Strategy
The marketing strategy that OfficeElegance will employ is a rather simple one; it entails extensive online marketing on social media sites, Facebook, LinkedIn, and Twitter, and on online fashion blogs and magazines. OfficeElegance will also embark on extensive SEO, search engine optimization with key words targeting its office wear brand so as to improve its ranking on search engines. Additionally, traditional marketing on fashion and professional magazines, using brochures, and events, will also be considered. These will introduce its products and the website to potential clientele.
Further, OfficeElegance will offer its customers a 10% discount on all purchases over $70 for the first 3 months. Similar discount offers will be offered on strategic periods throughout the year. For purchases exceeding $500 dollars, OfficeElegance will offer free movie and dinner vouchers.
5.2.1 Pricing Strategy
A key feature of OfficeElegance’s pricing strategy is that it will pass on to its customers, most of the store mark-up, by offering reduced and competitive prices for clothing. However, this will not negatively affect OfficeElegance’s sales profits.
5.3 Sales Strategy
OfficeElegance will develop and launch a marketing and advertising campaign worth $700 targeted at the core clientele group, office going men and women aged between 18 and 24. The campaign message will focus on introducing and informing consumers of OfficeElegance’s comfortable, beautiful, durable, unique, and elegant office. The message will be, “Comfort and Elegance in Office wear”. The attractive logo and breathtaking, intuitive slogan will be displayed all the ads and marketing campaign materials. It will approximately take 6 months for OfficeElegance to build up its sales to the point of making profits. As had already been mentioned, discounts and promotions will be offered at different times of the year to build initial awareness of the website and maintain customers, through loyalty rewards.
5.3.1 Sales Forecast
Sales for both men’s office wear and women’s office wear are expected to steadily increase in the first year. The focus for sales shows that in the initial months, the sales will be low; however, as the discounts and promotions offered at different times of the year to build initial awareness of the website and maintain customers, through loyalty rewards, begin to take effect, which will be approximately after the first six months, the sales will pick up with the increase in customer base. This, as has been projected will be at a time when OfficeElegance will have started reaping some profits. After the first year, OfficeElegance’s sales are expected to increase by about 30% into the second year. The owners are optimistic that they will be able to maintain the steady growth even into the third year.
|Sales||Year 1||Year 2||Year 3|
|Men’s office wear||$4,320,000||$5,616,000||$7,300,800|
|Women’s office wear||$4,320,000||$5,616,000||$7,300,800|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Men’s office wear||$3,399,000||$4,418,700||$5,744,310|
|Women’s office wear||$3,399,000||$4,418,700||$5,744,310|
|Subtotal Direct Cost of Sales||$6,798,000||$8,837,400||$11,488,620|
Table 5‑1: Sales Forecast
Chart 5‑1: Sales by Year
6 Management Summary
The design, development, administration, and online marketing of OfficeElegance’s website will be handled and managed byJames O’Connor, who will also be in charge of managing the marketing team. The clothing and shoes design will be managed by Sherry Brandt, who in addition, will also be in charge of monitoring and production of the designs by Lambretta Shoes Company and Ted Clothing Company.
6.1 Personnel Plan
Besides the two owners Sherry Brandt and James O’Connor, OfficeElegance will require additional personnel; initially a staff team of twelve members will be required. However, this is expected to grow as the company will continue to grow and solidify its customer base.
- Two Web administrators
- One accountant
- Office manager
- Four member marketing team
- Four member design team
|Personnel Plan||Year 1||Year 2||Year 3|
Table 6‑1: Personnel Plan
7 Financial Plan
The following subsection illustrated the projected financial plan for OfficeElegance
7.1 Break-even Analysis
OfficeElegance’s break-even analysis is not based on fixed costs that otherwise would only be theoretically significant if the business was closing, but, it is based on re-current or running costs, which the business will incur to continue operating. The fixed costs that are not included in the break-even analysis include marketing costs, payroll, utilities, and rent.
|Monthly Revenue Break-even||$204,321|
|Average Variable Cost Percentage||64%|
|Estimated/Projected Fixed Cost per Month||$96,220|
Table 7‑1: Break-even Analysis
Chart 7‑1: Break-even Analysis
7.2 Projected Profit and Loss
The chart and the table below are the projected profit and loss for OfficeElegance for the first three years.
Table 7‑2: Pro Forma Profit and Loss
|Pro Forma Profit and Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$6,798,000||$8,837,400||$11,488,620|
|Other Expenses incurred for Production||$0||$0||$0|
|Total Cost of sales||$6,798,000||$8,837,400||$11,488,620|
|Percentage Gross Margin||21.32%||21.32%||21.32%|
|Marketing, Advertising, Sales, and Other Expenses||$320,000||$390,000||$420,000|
|Payroll Related Taxes||$150,500||$168,000||$186,000|
|Total Operating Expenses||$1,097,000||$1,254,500||$1,374,500|
|Profit Before Taxes and Interest||$745,000||$1,140,100||$1,738,480|
Chart 7‑2: Yearly Gross Margin
Chart 7‑3: Yearly Net Profits
- Belew, S. & Elad, J., 2009. Starting an Online Business All-in-One Desk Reference For Dummies 2nd ed., Indianapolis, Indiana: John Wiley & Sons, Inc.
- Carroll, J. & Broadhead, R., 2001. Selling Online: How to Become a Successful E-commerce Merchant, Ontario, Canada: Dearborn Trade.
- Schneider, G., 2008. Electronic Commerce 8th ed., Boston, MA: Cengage Learning.