1. Table of contents
Table of Contents......................................................1
Executive Summary.....................................2
Store Information........................................................3
Marketing Plan..............................................................4
Product Plan................................................................5
Location and Physical Structure....................................6
Operations and Control Systems.......................................7
Financial Plan.........................................................8
Required Financial Forms..............................9
Analysis..............................10
References............................................................10
Appendices............................................................11
2. 2. Executive Summary
Scarpetta’s mission is to offer comfortable and affordable shoes to the business professional
women; our owner and manager Jennifer Lawrence will be running the store along with our
assistant manager and two employees. We will be selling business professional Pumps, flats,
and seasonal merchandise; boots in the fall, wedges in the spring, that can be transitioned from
the office to social settings. Jennifer will open the store with a $60,000 investment that she has
been saving over the last five years. This will cover startup expenses with a little left over to
cover and miscellaneous opening expense. We have projected gross margin of 52% and a total
net operating income of $184,867. If a store sees success over the next five years we will look
into expanding our business to a new market either in Dallas or Austin
3. Store/Business INFORMATION
3.1. NAICS code: 316210
3.2. Women’s shoe store called Scarpetta
3.3. Vision Statement: at Scarpetta we fulfill women’s dreams of obtaining comfortable,
affordable and transitional footwear all at one place. Our commitment to our customers’ needs
will be shown through quality customer service, building relationships through integrity and
superior quality; we will become a leader in women’s footwear.
3.4. Mission Statement: Scarpetta offers comfortable and reasonably priced footwear to
professional woman, our styles are as versatile and our sales assistants will help our customer
find styles that can meet her busy schedule demands.
3.5. Ownership Type: Sole proprietorship
3.6. Management Team
Owner/manager: payroll, vendor relations, hiring, collecting sales tax
Assistant manager: employees, customers, scheduling, training, maintaining inventory
3.7. Management Philosophy
Communication is key to insure proper implementation strategy, all communication between
Scarpetta team members will be based on trust and respect. All members of the management
team will adhere to respectable practices for employee to learn and find support in.
3.8. Organizational Chart
4. MARKETING PLAN
4.1. Industry profile (Concentration-number and size of firms- and annual sales Business)
Shoe industry brings in around 48 billion dollars a year (statisticbrain.com, 2014)
4.2. Growth Potential of the Industry
There is much room for growth in the shoe industry. Women’s shoes are a constant necessity
especially for the business professional woman and in order for us to stand out and keep up with
competition in the industry we have chosen to provide comfortable shoes suitable for day and
night.
4.3. Geographic location of industry/customers
Our store will be located in Houston, Texas
4.4. Industry Trends
Most shoe companies like to show their customers that they are aware of worldly situations such
as TOMS. These types of trends show the ethics of the company to the customer and the world;
3. making it clear on how important it is to give back in any way possible. Another trend that is big
in the footwear industry is for the shoe to do more for the customer, Nike+ system and sketchers
shape-ups that help tone certain areas of the body are to examples. Also, some high fashion
designers have paired with target to give customers designer shoes at low prices. (Adelson, 2014)
4.5. Target Market
Women from ages of 18 -45 who have a need for all kinds of shoes; especially comfortable
business professional shoes.
Amy is a 23-year-old college graduate who works in downtown Houston. Her job requires her to
wear business professional heels and she really enjoys the comfort of her Scarpetta heels. Her
shoes can take her from work to happy hour on Thursdays with her friends and even dancing on
Friday nights with her boyfriend. The functional and stylish appeal of our shoes will keep her
coming back every time for almost any event.
Mary is a mother of two who works as a lawyer in Houston. With her full time schedule as a
workingwoman and a mother, her love of fashion doesn’t have to completely vanish thanks to
Scarpetta. Her love of heels can still be displayed at her work in our lower heeled business
professional shoes and can also be worn on the weekend when her husband and her take their
kids to the museum for a family fun filled Saturday.
4.6. Promotions
Social media will be our company’s main way to advertise our sales and new shoes we get in
store.
5. PRODUCT/SERVICES PLAN
5.1. Purpose: Scarpetta fills the need for shoes that business women could wear to work but also
to have a girl’s night out. Women will benefit from our comfortable shoes that can be worn all
day.
5.2. Legal and regulatory: leasing agreement, Texas Sales Tax ID, employer ID number,
vendor’s license, liability insurance, Fire Marshal permits and possibly inventory tax
5.3. We’re limiting it to women’s shoes, primarily shoes that are appropriate for work and social
outings; focusing on depth more than breadth of products.
5.4. Proposed lines: essentials: all the shoes essential to complete a women’s wardrobe, meeting
in the middle: shoes that can be used on the go between business meetings and daily travel, night
time heights: shoes for going out to cocktails after work.
5.5. Assortment of stock: pumps, flats, seasonal shoes, and shoe accessories
5.6. Suppliers: we don’t have a name for a (n) supplier right now but we’re looking at going to
markets to buy from vendors and wholesalers
5.7. N/a
5.8. Price range: $45-90
5.9. Merchandise type: leather, satin, canvas, metal fasteners
5.10. We will probably carry very few; if any, national or private
5.11. Mainly we’re going to have a big push of promotional merchandise when we first open to
help get customers in the door. After that we will cut back on it to a small amount around large
sales months.
5.12. If the shoe sell well we were thinking of slowly adding in shoes that are in a limited
quantity, and are high quality for a slightly elevated price point
6. LOCATION AND PHYSCIAL STUCTURE
4. 6.1. Regional location and % Target Market in community (Nielsen’s Zip Code Analysis)
Southeast Region of Houston Texas, 66% of the community is our target market with an average
of making $80,000 per household.
6.2. Competition and SWOT (include conclusions)
S- Unique personal consulting services
W-Weak brand image versus key competitors
O-We have an unfulfilled customer need as far as consulting services and professional shoe
attire.
T- Our high profile competitors.
6.3. Description of site (size, location type) and why selected
1,300 square feet, Midtown Houston (fits our target market)
6.4. Finances and location (contracts, rent, and other obligations)
Renting for $3,000 a month
6.5. Facilities (A/C, lighting, etc. store windows, floor)
Electric bill= $250 a month
6.6. Layout
Grid Layout
7. OPERATING AND CONTROL SYSTEMS PLAN
7.1 Ordering and receiving merchandise
We will be buying our shoes through wholesalers at trade shows and purchasing at low unit cost
or contracting manufactures to produce our shoe line in a variety of sizes, colors and styles to fit
our customer base, which can include paying labor cost and shipping fees.
7.2 Paying suppliers
If we decide to buy our products from wholesalers we will be buying at retail price, but if we
contract a manufacturing facility will be paying labor costs as well as shipping fees to ship to our
store. But most likely we will start buying from wholesalers because there is more room for price
negotiation. Most suppliers operate on a trade credit basis when dealing with other businesses.
This basically means that when you're billed for a product or service, you have a certain grace
period before the payment is due (typically 30 days). During this time, the supplier will not
charge interest. We will carefully consider all costs, discounts and allowances before deciding
whether to buy an item. Occasionally, suppliers grant customer’s discounts for buying in
quantity, usually as a freight allowance for a specific amount of merchandise purchased. Some
suppliers pay an increasing percentage of the freight bill as the retailer's purchase orders
increases; others simply cover the entire freight cost for purchases over a minimum amount.
These are things will consider before purchasing our products from manufacturers.
7.3. Staff development
Since we are a small shoe company we will employ only 2 sales personnel and have 2 managers
on duty every day to oversee business operations and deliver customer service. The hours of
operation will be Monday - Friday 10 a.m. - 6 p.m., Saturday 10 a.m. - 6 p.m., and closed on
Sundays. There will be extended special hours designated during Christmas holiday shopping
season.
7.4 Inventory control
To control our inventory we will keep track of sales, prevent shrinkage, avoid stock outs, and
account for all products bought from wholesalers or manufacturers. By using Quick response
system we will be aware of how much inventory we have at hand and replenish when needed.
5. Only employees are allowed to be in the stockroom and managers are responsible of filling out
inventory sheets.
7.5 Return Policies and charge backs
We deliver excellent customer service. We will be happy to return/exchange unworn or defective
merchandise within 30 days of delivery date. Returns/exchanges will not be accepted after 30
days. All merchandise must be returned in the original packaging with tickets attached.
Merchandise marked "as is" or "final sale" cannot be returned/exchanged.
As far as promotions will offer a sales promotion on a monthly basis, such as:
• buy one, get one half priced
• buy one, get one free
• Half off on shoes from the previous season
7.6 Company budgets (Documentation for transactions)
We will accept cash, credit, and store coupons as a form of payment. We to ensure customer
privacy we will handled every transaction in a responsible manner by accurately balancing the
cash drawer and keeping track of all receipts.
7.7 Security systems
To ensure safety inside our store and protect company records each employee will have a login
number to have access to the register. We will also have surveillance cameras, alarms, fire
extinguishers set up around the store for security purposes.
8. Financial Assumptions
8.3. Sales Estimate (ABC Analysis)
6. Attached to appendices
8.4 Cash on hand
Jennifer will be coming into the business with a $60,000 investment.
8.5 Loans
None
8.6 Revolving line of credit
As of now we do not have a line of credit, once we become more established we will look into
getting one with Bank of America
8.7 Financial obligations
Financial obligations include our expenses and payroll expanse which totals to $182,543
8.8 Rent
The rent is going to be $3,000 a month; which will total to $36,000 annually.
8.9 Travel
Travel will primarily be treated as a variable factor; however, there will be a few set costs such
as traveling to market in the fall and spring. For budgeting purposes each month will be given a
$150 allowance, the remainder of which will be added to the next month.
8.10 Advertising
Scarpetta will be using social media as it’s driving source of advertising but $100 has be
budgeted for any miscellaneous expense.
% Annual Sales Annual Sales Monthly Sales Forecast
Aug 7.8% 679,320.00$ = 52,987$
Sept 6.9% 679,320.00$ = 46,873$
Oct 8.2% 679,320.00$ = 55,704$
Nov 14.2% 679,320.00$ = 96,463$
Dec 19.2% 679,320.00$ = 130,429$
Jan 3.0% 679,320.00$ = 20,380$
Feb 5.5% 679,320.00$ = 37,363$
Mar 7.2% 679,320.00$ = 48,911$
Apr 5.0% 679,320.00$ = 33,966$
May 8.5% 679,320.00$ = 57,742$
Jun 7.2% 679,320.00$ = 48,911$
Jul 7.3% 679,320.00$ = 49,590$
Category A Sales Catgory B Sales
Monthly Sales Forecast % Sales Category A Sales $ Monthly Sales Forecast % Sales Category B Sales $
Aug 52,986.96$ 70% = 37,091$ Aug 52,986.96$ 15% = 7,948$
Sept 46,873.08$ 70% = 32,811$ Sept 46,873.08$ 15% = 7,031$
Oct 55,704.24$ 70% = 38,993$ Oct 55,704.24$ 15% = 8,356$
Nov 96,463.44$ 70% = 67,524$ Nov 96,463.44$ 15% = 14,470$
Dec 130,429.44$ 70% = 91,301$ Dec 130,429.44$ 15% = 19,564$
Jan 20,379.60$ 70% = 14,266$ Jan 20,379.60$ 15% = 3,057$
Feb 37,362.60$ 70% = 26,154$ Feb 37,362.60$ 15% = 5,604$
Mar 48,911.04$ 70% = 34,238$ Mar 48,911.04$ 15% = 7,337$
Apr 33,966.00$ 70% = 23,776$ Apr 33,966.00$ 15% = 5,095$
May 57,742.20$ 70% = 40,420$ May 57,742.20$ 15% = 8,661$
Jun 48,911.04$ 70% = 34,238$ Jun 48,911.04$ 15% = 7,337$
Jul 49,590.36$ 70% = 34,713$ Jul 49,590.36$ 15% = 7,439$
Category C Sales
Monthly Sales Forecast % Sales Category C Sales $
Aug 52,986.96$ 5% = 2,649$
Sept 46,873.08$ 5% = 2,344$
Oct 55,704.24$ 5% = 2,785$
Nov 96,463.44$ 5% = 4,823$
Dec 130,429.44$ 5% = 6,521$
Jan 20,379.60$ 5% = 1,019$
Feb 37,362.60$ 5% = 1,868$
Mar 48,911.04$ 5% = 2,446$
Apr 33,966.00$ 5% = 1,698$
May 57,742.20$ 5% = 2,887$
Jun 48,911.04$ 5% = 2,446$
Jul 49,590.36$ 5% = 2,480$
7. 8.11 Accounting and Legal
The combination of accounting and legal will total $30,500 for the year.
8.12 Leasehold Improvements
Leasehold improvements will be budgeted at $19,500 which will include fixing any of the
exciting structure and new displays and furniture.
8.13 Direct Labor
Scarpetta will be paying our single sales associate $7.25/hr.; our assistant manager will be paid
$11.50/ hr. Payroll will total $18,512.
8.14 Insurance
Insurance for the year will be $600.
8.15 Bank Charges
The bank charges $192 if there is less than $250 in the bank account.
8.16 Taxes/license
Taxes for the year will be $28,158; this included payroll and unemployment tax as well as sales
tax.
8.17 Owners Draw
Owners draw will be a salary of $40,000 a year.
8.18 Inventory
Our inventory will total to $31,250.
8.19 Utilities
Utilities are estimates at $150 a month, and will total to $1,800 a year.
9. REQUIRED FIANCIAL FORMS
9.3 Pro Forma Cash Flow
Each year will see a projected increase of 10% on profit and CoGs based on the numbers from
last year, payroll will also see a 3% increase.
9.4 Profit and Loss Statement
Scarpetta’s one year profit and loss projection has total revenue of sales at $515,401. The
purchase of inventory totals at $31,250 for the year and the total cost of sales for the year are
totaled at $244,556. Our expenses will be: leasehold improvements, travel, monthly supplies,
rent and related costs, Telephone/internet, utility deposits, legal and accounting fees, insurance,
etc. The total for expenses is $177,043; and we will have a net operating income of $189,791.
See appendices below for the profit and lost statement
9.5. Balance Sheet
Scarpetta’s assets are$2050 cash in the bank, inventory for which is $31,250, and prepaid
expenses which is $9000. The fixed assets include machinery and equipment ($150), furniture
and fixtures ($1,050), and leasehold improvements ($19,500). Total assets are totaled at $36,106.
We don’t have a lot of liabilities only accounts payable ($6,455) and taxes payable ($1,107). See
appendices below for the balance sheets
9.6 Breakeven Analysis
The variable costs for Scarpetta included Costs of Goods Sold ($244,556), inventory ($31,250),
and direct labor ($19,012), which came out to 48.22%. The fixed costs included salaries,
supplies, repairs and maintenance, advertising, travel, accounting and legal, rent, telephone,
utilities, insurance, taxes and owners draw. The total fixed costs came out to $167,955.00 at
20.93%. Our break -even cost was $324,368.57 with a Gross Margin of 52%. See appendices
below for the break-even analysis
8. 10. ANALYSIS
10.3 We believe that this is indeed a viable business; within our first year we keep our cash in
more than our cash out and make a 50% profit. We also have a projected increase of profit set
10% for each year; this is high enough to combat inflation as well as our 3% increase in payroll.
10.4 Identify four strengths and weaknesses of the business plan
10. REFERENCES
Adelson, J. (2014). 4 trends to watch in footwear. Retrieved 22 October 2014, from
http://www.askingsmarterquestions.com/4-trends-to-watch-in-footwear/
Csgnetwork.com. (2014). Electrical energy cost calculator. Retrieved 22 October 2014, from
http://www.csgnetwork.com/elecenergycalcs.html
Snaid, L. (2014). San Deigo immigration lawyer - intracompany transferee visa, L-1 visa,
California immigration attoneys.snaid.com. Retrieved 22 October 2014, from
http://www.snaid.com/Intracompany-transferee-L-1-Visa.html
Statisticbrain.com. (2014). Footwear industry statistics. Retrieved 22 October 2014, from
http://www.statisticbrain.com/footwear-industry-statistics/
Sullivan, P. (2014). Calculating annual sales. Presentation, Texas State University- San Marcos
Sullivan, P. (2014). Planning inventory. Presentation, Texas State University- San Marcos
11. APPENDIXES
11.1 Profit and loss
11. Opening
Assets
Current Assets
Cash in Bank 2,050$
Inventory 31,250
Prepaid Expenses 9,000
Other -
Total Current Assets 42,300$
Fixed Assets
Machinery & Equipment 150$
Furniture & Fixtures 1,050
Leasehold Improvements 19,500
Real Estate / Buildings
Other -
Total Fixed Assets 20,700$
Other Assets
Specify -$
Specify -
Total Other Assets -$
Total Assets 63,000$
Liabilities & Net Worth
Current Liabilities
Accounts Payable 6,289$
Taxes Payable 1,107
Notes Payable (due within 12 months) -
Current Portion Long-term Debt -
Other current liabilities (specify) -
Total Current Liabilities 7,396$
Long-term Liabilities
Bank Loans Payable (greater than 12
months) -$
Less: Short-term Portion -
Notes Payable to Stockholders -
Other long-term debt (specify) -
Total Long-term Liabilities -$
Total Liabilities 7,396$
Owners' Equity (Net Worth) 55,604$
Total Liabilities & Net Worth 63,000$
12. Closing
Balance Sheet (Projected)
Scarpetta
Beginning Projected
as of 01/06/2014 as of 01/05/2015
Assets
Current Assets
Cash in bank $ 2,050 $ 184,867
Accounts receivable - -
Inventory 31,250 31,250
Prepaid expenses 9,000 9,000
Other current assets - -
Total Current Assets $ 42,300 $ 225,117
Fixed Assets
Machinery & equipment $ 150 $ 150
Furniture & fixtures 1,050 1,050
Leasehold improvements 19,500 19,500
Land & buildings -
Other fixed assets - -
(LESS accumulated depreciation on all - -
Total Fixed Assets (net of $ 20,700 $ 20,700
Other Assets
Intangibles $ - $ -
Deposits - -
Goodwill - -
Other - -
Total Other Assets $ - $ -
TOTAL Assets $ 63,000 $ 245,817
Liabilities and Equity
Current Liabilities
Accounts payable 6,455$ $ 72,015
Interest payable - -
Taxes payable 1,107 28,158
Notes, short-term (due within 12 - -
Current part, long-term debt - -
Other current liabilities - -
Total Current Liabilities $ 7,562 $ 100,173
Long-term Debt
Bank loans payable $ - $ -
Notes payable to stockholders - -
LESS: Short-term portion - -
Other long term debt - -
Total Long-term Debt $ - $ -
Total Liabilities $ 7,562 $ 100,173
Owners' Equity
Invested capital $ - $ -
Retained earnings - beginning - -
Retained earnings - current - -
Total Owners' Equity $ - $ -
Total Liabilities & Equity $ 7,562 $ 100,173
