Report — Venture Proposal (draft ) Essay Example
- Category:Business
- Document type:Assignment
- Level:Undergraduate
- Page:2
- Words:1444
Industry and competitive strategy
The online fitting room venture will contain clothes for women of all ages. The Clothing industry has come a long way from textile clothing factories to venturing into unchattered waters on the internet. The market has been flooded by clothes from either second hand clothes or textiles made from factories.
Due to lack of uniqueness in the clothes available, consumers have started venturing into online shopping that offers, quality,unique and affordable products. Information technology has become an integral part of any industry. For real time results it is important to use information technology. Research has shown that customers are becoming savvy as regards retail shopping due to their experience across the web in other online retail stores. Hence as a competitive strategy we will focus on improving the customer experience at the NAME online shop. These could be through online support teams, giving the option of calling the customer back for inquiry and ensuring the website is up to date with the latest trend samples. Also ensuring that the fitting room functions efficiently to enable the consumer fit her desired design on the avatar.
Some of the competitors who have large clientele online include Amazon.com, Ebay, Circuit city, Lands end, Barnes and Noble. Most of these stores have utilized the option of selling used clothes or second hand clothes to various clients. Their clientele when asked in a research why they preferred shopping in these online shops, they indicated that what attracted them to the site is how well the site looked with all relevant information included together with the clear pictures of the products on sale. One challenge that made consumers skeptical about the online shopping is the idea of how well clothes fit. It is disappointing to like a certain dress and end up on fitting in it well after having eagerly waited for it. Hence the birth of the idea of having an online fitting room. The idea would come as an addition to other online retail shops that do not have this application, we therefore intend to approach other competitors and sell the idea to them.
Resources
This includes the human resource, the software and hardware resources. The human resources needed are the ones who will keep the business going through providing online support to customers in case of queries. Website management. Collecting orders from customers and relaying them to the designers.
Due to the business being a start up, we will aim to utilize minimum resources so as to enable the business pick up. We will focus on third party solutions to take care of the initial and subsequent inventories as well as the shipping of the products to the customers. Being a web based business, the web management team will be essential to cater for any hitches that might arise to affect the efficient working of the website. Building a website needs an e-commerce platform integrating the shoppers’ interface, a product database, a web masters’ interface and a payment gateway to bring together all of the elements needed to complete an online sales transaction.
As a start the employees will be on short term contract basis until the business picks up, this is because the salary component has a big influence on the operational expenses and down the line affect the net income received. At most the employees will range from 2-4, as the idea is to minimize and have control of the resources, the contract basis employment will be ideal.
The designers will be also be on call, at first we will not be able to afford our own designers but may use other competitors’ designers under an agreement or those that have their own businesses and give them orders. Another reason apart from not being able to afford them as of now, it’s also because we will start on a small scale hence will be working with small quantities of orders. Working with custom-made clothes and a fitting room will indeed create a competitive edge; hence it will also be an incentive to other retail competitors to get them interested in partnering with us.
Due to this being an online venture, the office will also be virtual with good internet connections set up.
Venture team
The employees will total in number 2-4. The employment will be on short term contract basis. The structure will include the director or co funders, the website manager, on call support person, virtual assistant who will receive orders and send them to the on call designers. For recruitment, we will post advertisements on the social media. The criteria for the web designer will be one, who is qualified in web design, will also judge through samples of the work sent by the applicants. Online support will require one who has customer care qualification and is computer literate, the virtual assistant will have the qualification of customer care services, Able to use the computer packages including the social marketing sites like face book and twitter.
The Web designer’s role will be to create an e-platform that comprises all the information needed by clients. Designing the fitting room and maintaining the operations of the fitting room this will include how the clients access the avatar and use it to get the designs they want.
Online Support teams: Their roles will be to offer support to clients in case of querries, this will include answering online querries, and or answering calls from the clients.
Virtual assistant: The role will be to collect orders from clients, process the payment system and follow up any legal matters. Keep the funders abreast of what is happening in the business.
Revenues and Costs
In terms of revenues, there will be need to register the business as a DBA or doing business as, sales and use tax permit. The startup costs and operation costs are listed below:
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Income- USD 10000 |
Expenses |
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Registration fee, Sales and use tax permit. |
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Salaries |
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Buying of equipments like the computers and other web design hardware |
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The web design Software |
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Advertising costs |
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Initial inventory and shipping costs |
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Website maintenance cost |
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Buying of the avatars and other operating costs including calling cards for the employees and the internet and telephone subscription services. |
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Total: 10,000 |
Monthly Income Statement
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EXPENSES |
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Cost of production |
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Trouser suits Skirt suits |
USD 100 per order USD 100 per each order USD 150 per each order |
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USD 50 each USD 250 each |
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Salaries: Web designer Support staff (2) Virtual assistant |
USD 200(2) |
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Telephone, internet |
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Taxable income |
600(appendix)= 5400 |
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Total Net income vs. Total expenditure |
USD 600 per order so for 10 orders= 6000 |
Yearly Income statement
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EXPENDITURE |
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Cost of production |
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Women-Trousers Suits Skirt suits |
USD (12×100)= 1200 USD (12×100)= 1200 USD (12×150)= 1800 |
Women-Trouser suits Skirt suits |
USD (12x 50)= 600 per order USD (12×50)= 600 per order USD (12×100)= 1200 per order |
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Men- Shirts |
USD (12x 50)= 600 USD (12x 250)=3000 |
Men- Shirts |
USD (12×20)= 240 per order USD (12×150)= 1800 per order |
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Salaries |
Web Designer Support staff(2) Virtual Assistant |
USD (350×12)= 4200 USD (200(2)x12)= 4800 USD (250x 12)= 3000 |
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Telephone and internet expenses |
USD (45x 12)=540 |
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USD 7800 per order so approx 10 orders= |
USD 16980 |
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USD 78,000 |
USD 16,980 |
As a result of the business being a start up there is need to determine the ownership of the venture. This will include the division of ownership between the founders of the business so as to know who owns how many shares; this is determined by how much each gave to the start of the company. The funding could be a loan from the bank or savings of the individual members or from the other competitors who buy in the idea. The shares for the company would thus be categorized according to the cash given or the work done into making the venture a success be it the technical part or the brainstorming part, the sleepless nights in order to make the idea viable.
The amount of financing required would be the 10,000 USD to cater for the initial costs of starting up. We will get guarantors in the case of a loan from banks who will also end up being part of the co-founders of the business.
Appendix
Calculation of taxable income
Monthly Income= 6000, the value added tax would be for example 10% hence the amount after tax would be
= 6000×10/100 = 6000- 600
= USD 5400
Salaries for online support staff for the month =USD 200 x2
References (2)
Christian Fisher, (Demand Media) Finance & Business Strategies for the Serious Entrepreneur; available onlinehttp://smallbusiness.chron.com/finance-business-strategies-serious-entrepreneur-41726.html .
Key note systems 2005, Online Retail Competition Heating Up as Consumers Become Savvier on the Web; available online http://www.nmoa.org/articles/dmnews/keynote.htm