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- 1. Running head: FASHION BUSINESS 1 Business Plan Draft Name: Rodney Wheeler Institution: Rasmussen College Course: B361/ENT3624 Section 01 Funding a New Business Date: 12/10/17 Fashion Business The business environment is a highly competitive hence one ought to make proper choices when arriving at investment decisions. The best solution is to concentrate on an unexploited market gap where there is minimal competition. In that regard, therefore, the fashion industry has gained increased momentum with a significant demand for the latest clothes portraying an upsurge turn. Therefore, the proposed business establishment will be offering fashion brands to the customers, and the target market is the youth. This is because this niche is highly
- 2. dynamic and their demand for the latest fashion clothes in the markets is relatively high (Gekonge, 2017). The business will be dealing with men shirts and trousers and ladies dresses, skirts, blouses and trench coats. The drive herein is to quench the thirst for fashion clothes associated with the young people. It is important to understand that in this era of technology, it has become extremely easy and cost-effective to market products to reach the target audience. With a huge population of young people surfing online, it is easier to post the available products online to inform them of their existence so that they can place orders at will. Finding issues are likely to arise especially when penetrating a new market before the business becomes self-sustaining. For instance, the initial capital to stock all the proposed brands will require huge capital hence raising this amount at startup is relatively challenging (Harrington, 2017). Secondly, pricing is also a challenge. It is important to understand that there are other players who are offering the same products as ours though not that diverse. Pricing relatively low is one of the distinguishing penetration strategies that the business will adapt. This will certainly lead to reduced profitability hence raising further funding issues. Fashion Business Executive Summary The Young Generation Clothe Line (YGCL) as the name of my business will exclusively be a wearable retail store. I will be targeting high walk-by traffic as the location for my business. The business will begin by providing varieties of clothes suitable for both genders. The target market will be the youths between the ages of 15 to 30 years. For a start, I will need a loan of $ 150,000. 31% of the credit will be used for up-front expenses while 69% will be for working capital needs. The business will operate between 7.00 am to 7.00 pm daily with
- 3. assistance from sales agents whom I will employ. On a proper season, I expect a profit of about 60% after the tax and return on investment to accumulate at 20%. Description of the Product YGCL will exclusively deal with young men and ladies’ clothes. There will be men’s shirts, shorts, and trousers. On the side of ladies, there will be ladies’ dresses, skirts, blouses and trench coats. These categories of clothes will be purely dependent on the current existing fashion styles in the United States and beyond. Though a more substantial portion of my stock will be acquired internally, I expect to import share of my stock from neighboring nations such as Mexico. Discussion of the Industry and Market Conditions Fashion business has been categorized among the junior businesses in the America for the last ten years (In Choi, 2016). Most of the entrepreneurs have never considered this kind of business as lucrative due to ignorance which majority of this entrepreneur is assumed to be having. For this reason, venturing into the fashion business is more of easy since there are less legal constraints that are required. Competition Clothes as Art Inc. and Artwear designers are the two leading fashion businesses in my locality which might pose a direct competition to my business. This is because these two enterprises have strong financial muscles as compared to my business. Apart from the two, other competitors that my business might face will come from other small vendors of clothes scattered across my locality which according to my estimations would never be too severe. Marketing and Sales Plans The more significant portion of my fashion business will be promoted through advertisement which will involve providing samples of my stock to groups such as high school students, and dancing groups as a form of building local support among the targeted groups. There will also be sales agents who will be involved in promoting some brands of cloths through the
- 4. business social media platform and to some extension their accounts in the social media. Management Team Being a fashion and designer graduate, I will personally take charge at the helm of my fashion business for the first two years of business operation. In the subsequent years, I will employ one manager with two outstanding abilities. First, the manager will have to perform all the required managerial duties such as scheduling, sales computing, and employee guidance. Secondly, the manager will have to pose artistic abilities which he or she will apply in sales process through providing distinctive advice to prospective customers. Basic Financial Analysis All the sales returns will be recorded in the financial books of accounts. All the commercial books will be reconciled daily. All will have to get recorded down carefully, and appropriate plans will be needed for overcoming such loses. By taking all financial measures, I assume that my business will witness a 20% growth in its sales for two years to come. Young Generation Clothe Line (YGCL) Exchange rate used is that of the Year End reported date
- 5. As Reported Annual Balance Sheet Report Date 12/3/2017 12/3/2016 Currency USD USD Audit Status Not Qualified Not Qualified Consolidated Yes Yes Scale Thousands Thousands Cash & cash equivalents 100108 88283 Investments 39450 33572
- 6. Accounts receivable trade, gross 45221 42763 Less: allowances 1968 2042 Accounts receivable trade, net 43253 40721 Other receivables 3577 4616 Finished goods & work-in-process 44549 37012 Raw materials & supplies 25830 24844 Prepaid expenses 6060 5581 Deferred income taxes 1794 5482 Total current assets 264621 240111
- 7. Land 22360 21683 Buildings 113279 111044 Machinery & equipment 350929 340405 Construction in progress 1641 3403 Property, plant & equipment, at cost 488209 476535 Less: accumulated depreciation 298128 279619 Property, plant & equipment, net 190081 196916 Goodwill 73237 73237 Trademarks 175024 175024
- 8. Investments 163579 148532 Split dollar officer life insurance 33632 40296 Prepaid expenses 6927 10260 Restricted cash 1589 - Equity method investment - - Deferred income taxes 1696 4033 Total other assets 455684 451382 Total assets 910386 888409 Accounts payable 11641 9153
- 9. Bank loans 124 - Dividends payable 4814 4742 Accrued compensation 9788 9445 Other accrued employee benefits 7185 7825 Accrued taxes, other than income 3284 2776 Accrued advertising & promotions 19805 19133 Other accrued liabilities 6420 6401 Accrued liabilities 46482 45580 Postretirement health care benefits 328 319
- 10. Income taxes payable 1070 327 Total current liabilities 64459 60121 Deferred income taxes 47356 54939 Bank loans 694 - Postretirement health care benefits 11983 8857 Industrial development bonds 7500 7500 Liability for uncertain tax positions 8584 7167 Deferred compensation & other liabilities 78674 69520 Total noncurrent liabilities 154791
- 11. 147983 Common stock 25892 25702 Class B common stock 15894 15455 Capital in excess of par value 599186 572669 Retained earnings, per accompanying statement 64927 73109 Foreign currency translation adjustment -17499 -13527 Unrealized gain (loss) on investments -332 54 Unrealized gain (loss) on foreign currency derivatives -1236 -532 Unrealized gain (loss) on commodity derivatives -470 - Unrealized gain (loss) on postretirement & pension benefits 6439
- 12. 9367 Accumulated other comprehensive income (loss) -13098 -4638 Treasury stock, at cost 1992 1992 Total Tootsie Roll Industries, Inc. shareholders' equity 690809 680305 Non-controlling interests 327 - Total equity 691136 - As Reported Annual Income Statement Report Date 12/3/2017 12/3/2016 Currency USD
- 13. USD Audit Status Not Qualified Not Qualified Consolidated Yes Yes Scale Thousands Thousands Net product sales 539895 539627 Rental & royalty revenue 3630 3756 Total revenue 543525 543383 Product cost of goods sold 340933 350960 Rental & royalty cost 947 937 Total costs 341880
- 14. 351897 Product gross margin 198962 188667 Rental & royalty gross margin 2683 2819 Total gross margin 201645 191486 Selling, marketing & administrative expenses 117722 119133 Earnings (loss) from operations 83923 72353 Interest & dividend income 1582 1445 Gains (losses) on trading securities relating to deferred compen 4901 10588 Interest expense 99 92 Pretax gain on step acquisition 1821
- 15. - Impairment of equity investment - -975 Equity method investment loss - -967 Foreign exchange gains (losses) -861 -790 Capital gains (losses) -219 2576 Miscellaneous income (expense), net 246 345 Other income (expense), net 7371 12130 Earnings (loss) before income taxes - domestic 81255 73362 Earnings (loss) before income taxes - foreign 10039 11121 Earnings (loss) before income taxes 91294
- 16. 84483 Provision (benefit) for current federal income taxes 25173 16192 Provision (benefit) for current foreign income taxes 549 219 Provision (benefit) for current state income taxes 1538 891 Total provision (benefit) for current income taxes 27260 17302 Provision (benefit) for deferred federal income taxes -172 4286 Provision (benefit) for deferred foreign income taxes 2032 1823 Provision (benefit) for deferred state income taxes -686 223 Total provision (benefit) for deferred income taxes 1174 6332 Provision (benefit) for income taxes 28434
- 17. 23634 Net earnings (loss) 62860 60849 Less: Net loss attributable to noncontrolling interests 438 - Net earnings attributable to Tootsie Roll Industries, Inc. 63298 - Weighted average shares outstanding - basic 62378.86 61423.02 Year-end shares outstanding 61896.82 60966.73 Net earnings (loss) per share - basic 1.019 0.99 Dividends per common share 0.311 0.233 Total number of employees 2000 2000 Number of common stockholders 3000
- 18. 3200 Number of class B common stockholders 1100 1200 Number of common beneficiary stockholders 11800 17000 Number of class B common beneficiary stockholders 4300 4500 As Reported Annual Retained Earnings Report Date 12/3/2017 12/3/2016 Currency USD USD Audit Status Not Qualified Not Qualified Consolidated Yes
- 19. Yes Scale Thousands Thousands Previous retained earnings 73109 80210 Cash dividends 19199 18922 Stock dividends 52281 49028 Retained earnings 64927 73109 As Reported Annual Cash Flow Report Date 12/3/2017 12/3/2016 Currency USD
- 20. USD Audit Status Not Qualified Not Qualified Consolidated Yes Yes Scale Thousands Thousands Net earnings (loss) 62860 60849 Depreciation 20758 20050 Net loss on step acquisition 529 - Impairment of equity method investment - 975 Loss from equity method investment - 967 Amortization of marketable security premiums 3261
- 21. 3035 Accounts receivable -2007 1330 Other receivables 1289 253 Inventories -7329 503 Prepaid expenses & other assets 9524 14922 Accounts payable & accrued liabilities -1268 418 Income taxes payable & deferred -1024 68 Postretirement health care & life insurance benefits -1289 2861 Deferred compensation & other liabilities 3465 3592 Other operating assets & liabilities
- 22. - -14 Net cash flows from operating activities 88769 109809 Net cash acquired in step acquisition 161 - Change in restricted cash 224 - Capital expenditures -10704 -15752 Net purchases of trading securities -3567 -5500 Purchase of available for sale securities -54882 -66324 Sale & maturity of available for sale securities 38309 39613 Net cash flows from investing activities -30459 -47963 Shares repurchased & retired
- 23. -25020 -23143 Dividends paid in cash -19241 -14282 Repayment of bank loans -403 - Net cash flows from financing activities -44664 -37425 Effect of exchange rate changes on cash -1821 - Increase (decrease) in cash & cash equivalents 11825 24421 Cash & cash equivalents at beginning of year 88283 63862 Cash & cash equivalents at end of year 100108 88283 Income taxes paid 26599 24225 Interest paid
- 24. 34 21
- 25. 12/3/2015 12/3/2014 12/3/2013 USD USD USD Not Qualified Not Qualified Not Qualified Yes Yes Yes Thousands Thousands Thousands
- 45. 12/3/2015 12/3/2014 12/3/2013 USD USD USD Not Qualified Not Qualified Not Qualified Yes Yes Yes Thousands Thousands
- 47. 12/3/2015 12/3/2014 12/3/2013 USD USD USD Not Qualified Not Qualified Not Qualified Yes Yes Yes Thousands Thousands Thousands 52004 43938
- 53. 115976 21312 16906 20586 31 38 49 References Gekonge, C. O. (2017). Emerging business opportunities in the world: market entry, competitive strategy, and the promotion of foreign direct investments. Hershey, PA: Business Science
- 54. Reference. Harrington, K., & Cohen, M. N. (2017). The 100 best spare-time business opportunities today. New York: Wiley. In Choi, T.-M. (2016). Analytical modeling research in fashion business. Dollinger, M. J. (2008). Entrepreneurship: Strategies and resources. New York: Marsh Publications. Gehlhar, M. (2008). The Fashion Designer Survival Guide: Start and Run Your Own Fashion Business. New York: Kaplan. Granger, M., & Sterling, T. (2003). Fashion entrepreneurship: Retail business planning (Vol. 1). Fairchild Books. Skov, L. (2006). The role of trade fairs in the global fashion business. Current Sociology, 54(5), 764-783. Timmons, J. A., Spinelli, S., & Tan, Y. (1994). New venture creation: Entrepreneurship for the 21st century (Vol. 4). Burr Ridge, IL: Irwin. Running head: FASHION BUSINESS 1 Business Plan Draft Name: Rodney Wheeler
- 55. Institution: Rasmussen College Course: B361/ENT3624 Section 01 Funding a New Business Date: 12/10/17 Running head: FASHION BUSINESS 1 Business Plan Draft Name: Rodney Wheeler Institution: Rasmussen College Course: B361/ENT3624 Section 01 Funding a New Business Date: 12/10/17