The document discusses the process of product/range development which involves market research, concept development, prototype creation, and finalizing styles and costs. It involves determining target markets, trends, colors, silhouettes, fabrics, and creating style boards, line plans, prototypes, specifications and final costs. The goal is to understand consumer needs, conceptualize styles, and create a balanced collection that meets brand positioning and will sell based on economic factors.
Biba is an Indian women's clothing brand founded in 1988 specializing in ethnic wear. It has grown to over 150 brand outlets and 225 multi-brand outlets. Biba's founder, Meena Bindra, started the company from her home in New Delhi with an 8000 rupee loan. Biba has since partnered with Bollywood for movie-inspired collections and collaborated with designers like Manish Arora, Rohit Bal, and Anju Modi. Visual merchandising plays an important role in Biba's brand identity and sales through elements like signs, displays, lighting, and seasonal themes.
Fashion forecasting involves predicting upcoming trends in the fashion industry early enough to allow for production and distribution. It is a complex process that requires monitoring current trends, cultural influences, and consumer preferences to identify shifting attitudes and emerging styles. Key players in forecasting include designers, merchandisers, and specialized forecasting firms who analyze data from a variety of sources globally to determine colors, silhouettes, and fabrics that will be in demand for future seasons. Accurate forecasting is important for businesses to efficiently meet consumer demand.
Biba started in 1982 when Meena Bindra took an 8000 rupee loan to start making and selling salwar suits from her home. Over time, Biba grew to become a well-known brand for women's ethnic and fusion wear. It now has over 90 stores across India and also sells through large retailers. Biba focuses on affordable yet stylish designs using traditional crafts like block printing. It has successfully expanded through both company-owned stores and franchises. Biba aims to further strengthen its presence in India before expanding overseas.
The document provides an introduction to fashion marketing, defining key terms and concepts. It discusses definitions of marketing from various sources and what fashion marketing entails. The marketing mix of product, price, place and promotion is explained as well as key marketing functions like market research, financing, pricing, promotion, product management and distribution. Two views of fashion marketing - design-centered vs marketing-centered - are presented, along with the importance of merchandising in the fashion industry.
Fashion forecasting involves predicting trends and styles that customers will want to purchase seasons in advance. It is necessary because the fashion industry works well ahead of seasons to manufacture products on time. Forecasting includes studying market conditions, lifestyles, past data, street fashion, and designer collections. Understanding target customers through research like surveys and focus groups is also important for forecasting. Developing a calendar with key event dates helps coordinate manufacturing and delivery to have the right products at the right time.
The document discusses the differences between fads, fashion, and style. It notes that fads have the shortest life cycle and attract a limited following searching for excitement or distinction. Fads do not satisfy strong needs and their marketing winners recognize and leverage them early. In contrast, styles can last for generations and go in and out of popularity over time. Fashion refers to styles that are popular during a given period and progress through introduction, rise, peak, decline, and obsolescence stages in their life cycle. The document provides examples of fads like boomerangs, Pac-Man, and neon colors and how they differed from longer-lasting styles and fashions.
United Color Of Benetton (analyzing of store layout, design and visual merch...Prince Hubert Khonglah
This document is a summer internship project report submitted by Prince Hubert Khonglah to the Pune Institute of Business Management regarding their internship at United Colors of Benetton. The report provides an overview of Benetton's operations in India, including 106 stores across 45 cities. It also discusses the retail sector and organized/unorganized retail in India. The report outlines the objectives, methodology, data analysis, findings, and recommendations of the internship project, which focused on analyzing Benetton's store layout, design, and visual merchandise.
The document discusses the process of product/range development which involves market research, concept development, prototype creation, and finalizing styles and costs. It involves determining target markets, trends, colors, silhouettes, fabrics, and creating style boards, line plans, prototypes, specifications and final costs. The goal is to understand consumer needs, conceptualize styles, and create a balanced collection that meets brand positioning and will sell based on economic factors.
Biba is an Indian women's clothing brand founded in 1988 specializing in ethnic wear. It has grown to over 150 brand outlets and 225 multi-brand outlets. Biba's founder, Meena Bindra, started the company from her home in New Delhi with an 8000 rupee loan. Biba has since partnered with Bollywood for movie-inspired collections and collaborated with designers like Manish Arora, Rohit Bal, and Anju Modi. Visual merchandising plays an important role in Biba's brand identity and sales through elements like signs, displays, lighting, and seasonal themes.
Fashion forecasting involves predicting upcoming trends in the fashion industry early enough to allow for production and distribution. It is a complex process that requires monitoring current trends, cultural influences, and consumer preferences to identify shifting attitudes and emerging styles. Key players in forecasting include designers, merchandisers, and specialized forecasting firms who analyze data from a variety of sources globally to determine colors, silhouettes, and fabrics that will be in demand for future seasons. Accurate forecasting is important for businesses to efficiently meet consumer demand.
Biba started in 1982 when Meena Bindra took an 8000 rupee loan to start making and selling salwar suits from her home. Over time, Biba grew to become a well-known brand for women's ethnic and fusion wear. It now has over 90 stores across India and also sells through large retailers. Biba focuses on affordable yet stylish designs using traditional crafts like block printing. It has successfully expanded through both company-owned stores and franchises. Biba aims to further strengthen its presence in India before expanding overseas.
The document provides an introduction to fashion marketing, defining key terms and concepts. It discusses definitions of marketing from various sources and what fashion marketing entails. The marketing mix of product, price, place and promotion is explained as well as key marketing functions like market research, financing, pricing, promotion, product management and distribution. Two views of fashion marketing - design-centered vs marketing-centered - are presented, along with the importance of merchandising in the fashion industry.
Fashion forecasting involves predicting trends and styles that customers will want to purchase seasons in advance. It is necessary because the fashion industry works well ahead of seasons to manufacture products on time. Forecasting includes studying market conditions, lifestyles, past data, street fashion, and designer collections. Understanding target customers through research like surveys and focus groups is also important for forecasting. Developing a calendar with key event dates helps coordinate manufacturing and delivery to have the right products at the right time.
The document discusses the differences between fads, fashion, and style. It notes that fads have the shortest life cycle and attract a limited following searching for excitement or distinction. Fads do not satisfy strong needs and their marketing winners recognize and leverage them early. In contrast, styles can last for generations and go in and out of popularity over time. Fashion refers to styles that are popular during a given period and progress through introduction, rise, peak, decline, and obsolescence stages in their life cycle. The document provides examples of fads like boomerangs, Pac-Man, and neon colors and how they differed from longer-lasting styles and fashions.
United Color Of Benetton (analyzing of store layout, design and visual merch...Prince Hubert Khonglah
This document is a summer internship project report submitted by Prince Hubert Khonglah to the Pune Institute of Business Management regarding their internship at United Colors of Benetton. The report provides an overview of Benetton's operations in India, including 106 stores across 45 cities. It also discusses the retail sector and organized/unorganized retail in India. The report outlines the objectives, methodology, data analysis, findings, and recommendations of the internship project, which focused on analyzing Benetton's store layout, design, and visual merchandise.
The document discusses building a sustainable fashion business through the EcoChic Design Award. It explains that a sustainable business aims for positive social and environmental impacts alongside profit. The fashion industry is highly polluting so there is a responsibility to change this. Being sustainable can lower costs and increase profits through more efficient operations. It then provides tips for various stages of business operations to reduce environmental impacts, such as choosing sustainable materials, reducing waste and emissions in design, production, distribution and retail.
STP: segmentation, targeting and positioningsavi maha
The STP process involves segmentation, targeting, and positioning. Segmentation involves dividing the market into subgroups with distinct characteristics. Targeting involves selecting which market segments to focus on. Positioning involves managing consumer perception of a brand relative to competitors. The goal of STP is to guide development of an appropriate marketing mix. Common segmentation bases include geographic, demographic, psychographic, and behavioral characteristics.
1) The document provides instructions and diagrams for creating patterns for unique garment designs using a technique called "close, cut and open out."
2) Various design elements are shown that can be added to a basic bodice pattern through this pattern manipulation technique, including circular design lines, protruding accents called "deppari," and gathered holes.
3) Instructions are provided for patterns featuring a deppari protrusion on the back or chest, a dress with a gathered hole, and a camisole design with a gathered hole and frilled details.
Fashion forecasting involves predicting upcoming trends in areas like color, fabric, and style. This document discusses the process of fashion forecasting, which includes understanding the business vision and target customer, collecting trend information from various sources, analyzing trends, and selecting merchandise appropriate for the business. Key steps are gathering qualitative and quantitative data on styles, researching emerging trends from various domestic and global sources, and developing seasonal collections based on forecasted trends.
1. The document discusses various topics related to sustainability in the fashion industry including issues like fast fashion, workers' rights, and the use of eco-friendly materials.
2. It introduces several technologies and companies working on sustainable solutions, such as DAAI Technology which recycles PET bottles into fabric and SINGCARE which uses recycled polyester and coffee grounds to create functional fabrics.
3. Moving forward, more research is needed on alternative raw materials and fibers that have lower environmental impacts as well as examining how fashion can be done in a more ethical and sustainable way.
1. The post promotes an upcoming limited-edition Tom Ford holiday lip color collection that will be available at select retailers starting November 9th and includes a 10% discount code.
2. The ideal post would include an aesthetically pleasing picture of the product to catch people's attention on Instagram where visuals are important for engagement.
3. The person would be likely to interact with the post because it includes new product information, a discount code for a luxury brand, and promotes an influencer who provides reviews, tutorials and collaborates with brands.
The document provides an overview of the global textile and apparel industry, including its history and key statistics. It discusses the shift in growth towards developing countries due to the end of quotas in 2005. India's large and growing textile industry is highlighted, with major players like Raymond and Bombay Dyeing mentioned. Key factors influencing consumer purchasing decisions are identified. The various stakeholders in the industry are mapped out.
This document discusses different pricing strategies for a product. It outlines cost-based pricing methods which include marking up product costs by a percentage or adding a percentage to unknown costs. It also discusses competition-based pricing, including matching competitors' prices to be comparable, lowering prices to increase market share, or seeking larger market share through lower prices. Finally, it outlines customer-based pricing such as penetration pricing to attract new customers, price skimming to target early adopters, loss leaders to attract customers into making additional purchases, predatory pricing to restrict competition, and psychological pricing to make products seem cheaper than they are.
1) The document discusses how to create a time and action (TNA) plan for processing a garment order from receiving the letter of credit to shipment.
2) Key steps in making a TNA plan include identifying all required tasks, production capacities, lead times, and the shipment date to create a schedule in a calendar format.
3) An example TNA plan is provided for an order of 10,000 t-shirts with a production deadline of December 1st and key activities like sampling, fabric sourcing, and production are outlined.
This document outlines the steps to open a fashion boutique business, including deciding on the boutique type, evaluating competition, conducting market research, developing a business plan, selecting a site location, obtaining legal requirements, acquiring investment capital, designing and furnishing the boutique space, identifying suppliers, handling human resources like recruiting and training staff, and managing advertising for the new boutique business. The overall process involves 11 key steps that must be completed to successfully launch and operate a fashion boutique.
Developing a Cost Model for Sourcing Products for Different Distribution Channels. (Under the direction of Dr. Kristin Thoney and Dr. Jeffrey Joines.) Apparel sourcing operations are extremely complex due to the intricacies of a global supply chain. Sourcing decisions should not be made without an exhaustive analysis of supply chain cost structures. Landed costs must be analyzed for sourcing decisions, but they must be complemented by information of the effects of supplier lead times and consumer-retail interactions, which are critical to overall supply chain performance. A focus on cost of goods alone gives insufficient importance to the negative effects related to forecast errors when sourcing from regions with long lead times.
The document provides information on a study conducted to analyze customer satisfaction with Levis jeans. It includes the following key points:
1. A survey was conducted of 100 Levis jeans users in Mumbai to measure their satisfaction levels and identify ways to enhance satisfaction.
2. Statistical analysis of the survey data found that younger customers aged 16-35 tend to own multiple pairs of Levis jeans and buy jeans twice a year.
3. The findings were analyzed to draw conclusions and provide recommendations to Levis, including concentrating more on advertising, increasing availability through local outlets, and targeting the economy customer segment.
United Colors of Benetton (UCB) is an Italian clothing brand known for its unique branding and marketing strategies. Some key points:
- Founded in 1965 in Italy and now has a presence in over 120 countries with over 6,500 stores worldwide.
- Known for its unique and impactful advertising campaigns featuring controversial social issues.
- Measures of brand equity show UCB has high brand differentiation through its distinctive style and use of color but lower brand awareness compared to competitors like Pepe Jeans.
- Customer surveys found UCB is seen as an expensive but affordable brand with high perceived quality though some felt it lacked differentiation from other brands.
- UCB does not currently rank
H&M is a Swedish fast fashion retailer founded in 1947. It has over 4,900 stores globally and is the second largest clothing retailer in the world. H&M aims to provide on-trend fashion at affordable prices to customers aged 15-40. Key to its success is its fast production turnaround and global online and physical presence. H&M focuses on sustainability and aims to lead the industry in promoting fair wages and reducing environmental impact. It faces competition from other fast fashion brands but maintains its market position through constant new collections and high brand recognition worldwide.
Fashion Revolution is a global movement calling for greater transparency, sustainability and ethics in the fashion industry. It aims to radically change how clothes are sourced, produced and purchased so that what people wear is made in a safe, clean and fair way. Over the years, Fashion Revolution has used events, campaigns and resources to educate people and put pressure on brands, and it is starting to have an impact as some brands are becoming more transparent about their supply chains and some factories are improving working conditions. However, more still needs to be done to transform the entire fashion system.
This document discusses various garment production systems. It describes the straight line system, conventional bundle system, progressive bundle system, unit production system, and modular manufacturing system. For each system, it provides details on layout, material flow, advantages, and disadvantages. It notes that the best system depends on the product and company policies, and that companies may combine elements of different systems. The goal is to outline the key features and implications of the main production approaches used in apparel manufacturing.
Manyavar is an Indian ethnic wear brand founded in 1999 that specializes in traditional outfits like sherwanis, kurtas, and jackets for men aged 10-45 and recently launched a women's brand called Mohey. The brand has over 400 stores across India, the US, UAE, Nepal, Bangladesh, and Saudi Arabia and aims to represent Indian elegance. It is known for campaigns around celebrations and festivals as well as initiatives like Manas Foundation, which funds heart surgeries for children. Manyavar has grown rapidly since 2007 and become a nationally recognized brand in India through its stores, sponsorship of cricket teams, and film advertisements.
This document discusses cost structures for entrepreneurship. It defines cost structure and describes the different types including fixed, variable, transaction, sunk, and marginal costs. Characteristics like economies of scale and scope that impact cost structures are explained. Businesses are categorized as either cost-driven, with a focus on reducing expenses, or values-driven, prioritizing customer value. Google is provided as a case study. Key questions to evaluate a business model's cost structure are listed.
This document discusses cost structures for entrepreneurship. It defines cost structure and describes the different types including fixed, variable, transaction, sunk, and marginal costs. Characteristics like economies of scale and scope that impact cost structures are explained. Businesses are categorized as either cost-driven, with a focus on reducing expenses, or values-driven, prioritizing customer value. Google is provided as a case study. Key questions to evaluate a business model's cost structure are listed.
The document discusses building a sustainable fashion business through the EcoChic Design Award. It explains that a sustainable business aims for positive social and environmental impacts alongside profit. The fashion industry is highly polluting so there is a responsibility to change this. Being sustainable can lower costs and increase profits through more efficient operations. It then provides tips for various stages of business operations to reduce environmental impacts, such as choosing sustainable materials, reducing waste and emissions in design, production, distribution and retail.
STP: segmentation, targeting and positioningsavi maha
The STP process involves segmentation, targeting, and positioning. Segmentation involves dividing the market into subgroups with distinct characteristics. Targeting involves selecting which market segments to focus on. Positioning involves managing consumer perception of a brand relative to competitors. The goal of STP is to guide development of an appropriate marketing mix. Common segmentation bases include geographic, demographic, psychographic, and behavioral characteristics.
1) The document provides instructions and diagrams for creating patterns for unique garment designs using a technique called "close, cut and open out."
2) Various design elements are shown that can be added to a basic bodice pattern through this pattern manipulation technique, including circular design lines, protruding accents called "deppari," and gathered holes.
3) Instructions are provided for patterns featuring a deppari protrusion on the back or chest, a dress with a gathered hole, and a camisole design with a gathered hole and frilled details.
Fashion forecasting involves predicting upcoming trends in areas like color, fabric, and style. This document discusses the process of fashion forecasting, which includes understanding the business vision and target customer, collecting trend information from various sources, analyzing trends, and selecting merchandise appropriate for the business. Key steps are gathering qualitative and quantitative data on styles, researching emerging trends from various domestic and global sources, and developing seasonal collections based on forecasted trends.
1. The document discusses various topics related to sustainability in the fashion industry including issues like fast fashion, workers' rights, and the use of eco-friendly materials.
2. It introduces several technologies and companies working on sustainable solutions, such as DAAI Technology which recycles PET bottles into fabric and SINGCARE which uses recycled polyester and coffee grounds to create functional fabrics.
3. Moving forward, more research is needed on alternative raw materials and fibers that have lower environmental impacts as well as examining how fashion can be done in a more ethical and sustainable way.
1. The post promotes an upcoming limited-edition Tom Ford holiday lip color collection that will be available at select retailers starting November 9th and includes a 10% discount code.
2. The ideal post would include an aesthetically pleasing picture of the product to catch people's attention on Instagram where visuals are important for engagement.
3. The person would be likely to interact with the post because it includes new product information, a discount code for a luxury brand, and promotes an influencer who provides reviews, tutorials and collaborates with brands.
The document provides an overview of the global textile and apparel industry, including its history and key statistics. It discusses the shift in growth towards developing countries due to the end of quotas in 2005. India's large and growing textile industry is highlighted, with major players like Raymond and Bombay Dyeing mentioned. Key factors influencing consumer purchasing decisions are identified. The various stakeholders in the industry are mapped out.
This document discusses different pricing strategies for a product. It outlines cost-based pricing methods which include marking up product costs by a percentage or adding a percentage to unknown costs. It also discusses competition-based pricing, including matching competitors' prices to be comparable, lowering prices to increase market share, or seeking larger market share through lower prices. Finally, it outlines customer-based pricing such as penetration pricing to attract new customers, price skimming to target early adopters, loss leaders to attract customers into making additional purchases, predatory pricing to restrict competition, and psychological pricing to make products seem cheaper than they are.
1) The document discusses how to create a time and action (TNA) plan for processing a garment order from receiving the letter of credit to shipment.
2) Key steps in making a TNA plan include identifying all required tasks, production capacities, lead times, and the shipment date to create a schedule in a calendar format.
3) An example TNA plan is provided for an order of 10,000 t-shirts with a production deadline of December 1st and key activities like sampling, fabric sourcing, and production are outlined.
This document outlines the steps to open a fashion boutique business, including deciding on the boutique type, evaluating competition, conducting market research, developing a business plan, selecting a site location, obtaining legal requirements, acquiring investment capital, designing and furnishing the boutique space, identifying suppliers, handling human resources like recruiting and training staff, and managing advertising for the new boutique business. The overall process involves 11 key steps that must be completed to successfully launch and operate a fashion boutique.
Developing a Cost Model for Sourcing Products for Different Distribution Channels. (Under the direction of Dr. Kristin Thoney and Dr. Jeffrey Joines.) Apparel sourcing operations are extremely complex due to the intricacies of a global supply chain. Sourcing decisions should not be made without an exhaustive analysis of supply chain cost structures. Landed costs must be analyzed for sourcing decisions, but they must be complemented by information of the effects of supplier lead times and consumer-retail interactions, which are critical to overall supply chain performance. A focus on cost of goods alone gives insufficient importance to the negative effects related to forecast errors when sourcing from regions with long lead times.
The document provides information on a study conducted to analyze customer satisfaction with Levis jeans. It includes the following key points:
1. A survey was conducted of 100 Levis jeans users in Mumbai to measure their satisfaction levels and identify ways to enhance satisfaction.
2. Statistical analysis of the survey data found that younger customers aged 16-35 tend to own multiple pairs of Levis jeans and buy jeans twice a year.
3. The findings were analyzed to draw conclusions and provide recommendations to Levis, including concentrating more on advertising, increasing availability through local outlets, and targeting the economy customer segment.
United Colors of Benetton (UCB) is an Italian clothing brand known for its unique branding and marketing strategies. Some key points:
- Founded in 1965 in Italy and now has a presence in over 120 countries with over 6,500 stores worldwide.
- Known for its unique and impactful advertising campaigns featuring controversial social issues.
- Measures of brand equity show UCB has high brand differentiation through its distinctive style and use of color but lower brand awareness compared to competitors like Pepe Jeans.
- Customer surveys found UCB is seen as an expensive but affordable brand with high perceived quality though some felt it lacked differentiation from other brands.
- UCB does not currently rank
H&M is a Swedish fast fashion retailer founded in 1947. It has over 4,900 stores globally and is the second largest clothing retailer in the world. H&M aims to provide on-trend fashion at affordable prices to customers aged 15-40. Key to its success is its fast production turnaround and global online and physical presence. H&M focuses on sustainability and aims to lead the industry in promoting fair wages and reducing environmental impact. It faces competition from other fast fashion brands but maintains its market position through constant new collections and high brand recognition worldwide.
Fashion Revolution is a global movement calling for greater transparency, sustainability and ethics in the fashion industry. It aims to radically change how clothes are sourced, produced and purchased so that what people wear is made in a safe, clean and fair way. Over the years, Fashion Revolution has used events, campaigns and resources to educate people and put pressure on brands, and it is starting to have an impact as some brands are becoming more transparent about their supply chains and some factories are improving working conditions. However, more still needs to be done to transform the entire fashion system.
This document discusses various garment production systems. It describes the straight line system, conventional bundle system, progressive bundle system, unit production system, and modular manufacturing system. For each system, it provides details on layout, material flow, advantages, and disadvantages. It notes that the best system depends on the product and company policies, and that companies may combine elements of different systems. The goal is to outline the key features and implications of the main production approaches used in apparel manufacturing.
Manyavar is an Indian ethnic wear brand founded in 1999 that specializes in traditional outfits like sherwanis, kurtas, and jackets for men aged 10-45 and recently launched a women's brand called Mohey. The brand has over 400 stores across India, the US, UAE, Nepal, Bangladesh, and Saudi Arabia and aims to represent Indian elegance. It is known for campaigns around celebrations and festivals as well as initiatives like Manas Foundation, which funds heart surgeries for children. Manyavar has grown rapidly since 2007 and become a nationally recognized brand in India through its stores, sponsorship of cricket teams, and film advertisements.
This document discusses cost structures for entrepreneurship. It defines cost structure and describes the different types including fixed, variable, transaction, sunk, and marginal costs. Characteristics like economies of scale and scope that impact cost structures are explained. Businesses are categorized as either cost-driven, with a focus on reducing expenses, or values-driven, prioritizing customer value. Google is provided as a case study. Key questions to evaluate a business model's cost structure are listed.
This document discusses cost structures for entrepreneurship. It defines cost structure and describes the different types including fixed, variable, transaction, sunk, and marginal costs. Characteristics like economies of scale and scope that impact cost structures are explained. Businesses are categorized as either cost-driven, with a focus on reducing expenses, or values-driven, prioritizing customer value. Google is provided as a case study. Key questions to evaluate a business model's cost structure are listed.
The Secret to Scaling: How to Build & Implement a Fixed Fee Pricing PlanHubdoc
Time-consuming tasks – like chasing down source documents and data entry – are being completed quicker and quicker thanks to cloud accounting apps and automation.
Now, accountants and bookkeepers are able to provide increased levels of value in the form of financial and business advice. So, it’s time to separate time from revenue, move away from hourly billing, assign a $ amount to the value that you provide and introduce a fixed monthly billing structure.
To help accountants and bookkeepers make the transition from hourly billing to fixed fees, we’re teaming up with Practice Ignition (https://www.practiceignition.com) and QuickBooks (https://quickbooks.intuit.ca) for a live webinar to outline all of the steps required to prepare, build and implement a fixed fee pricing model.
We cover:
-The cloud accounting/bookkeeping business model
-How to bundle recurring and nonrecurring services
-Determining a time/cost baseline of each service + pricing
-How to have the “value” conversation with clients before and during implementation
-The scale and profitability that fixed fees open up for your practice
If you’re still debating whether fixed fees make sense for your firm, take our quiz to find out: https://hubdoc.typeform.com/to/GmDZGz
CO2 2019 | Dan Gordon | Budgeting for GrowthCoalmarch
Budgeting for Growth is a workshop about building a profitable company using budgets. It discusses what a budget is, why businesses create budgets, how to forecast revenues, and how to budget for direct costs, gross margin, sales and marketing expenses, general and administrative costs, and net income. The presentation emphasizes calculating the lifetime value of a customer to determine how much should be spent on marketing to acquire new customers.
Brief Introduction to COST ACCOUNTING.pdfssusercee0e4
Cost accounting is the application of costing and cost accounting methods, techniques and principles to control costs and ascertain profitability. The main objectives of cost accounting are to find the cost of goods produced or services rendered and help management detect and control inefficiencies. Cost accounting provides information to management for decision making. Costs can be classified by elements, functions, and behavior. Marginal costing is a technique that includes only variable costs in the unit cost and treats fixed costs as period costs to minimize losses and maximize contribution. Key concepts in marginal costing include contribution, profit-volume ratio, break-even point, and margin of safety. Marginal costing helps management with decision making by focusing on contribution.
CO2 Presentation - The Largest Profit LeversCoalmarch
Take a deep dive with master bookkeeper Dan Gordon, as he explains what tools to use, business organization strategies that include systems, procedures checklists, and more. Learn the tricks of accounting automation that will help you move the profit needle for your company.
The slides used by Matthew Sauer from iProspect at the E-commerce Meetup organized jointly with Neto, Hubspot and SEMrush: https://www.semrush.com/webinars/e-commerce-meetup/?language=en
Alisha Ancheary has 9 years of experience in operations management at a chemical company. She holds a BTech in chemical engineering and an MBA in human resource management. The document discusses break-even analysis, which is used to determine the level of production or sales needed to cover total costs. It defines key terms like fixed costs, variable costs, and contribution margin. An example calculation shows how to determine the break-even point in units and sales revenue. Benefits of break-even analysis include setting revenue targets and making better pricing decisions. Limitations include not accounting for variable demand and assuming fixed costs remain constant.
CVP Analysis 17th Edition By Azad and Mansoor.pptxazadalisthp2020i
The 17th edition of CVP Analysis provides a concise overview of how costs, volume, and prices influence profitability, offering practical insights and real-world applications for students and professionals in managerial accounting. With updated content and examples, it serves as an essential resource for mastering cost-volume-profit analysis.
Marketing, costing and bookeeping presentation pzat detergent training.pptxgladysdzoro
This document discusses costing and bookkeeping skills important for detergent businesses. It explains that costing involves calculating all costs to make and sell goods or services, including production costs like raw materials and wages, and non-production costs like rent and utilities. Calculating accurate costs helps businesses reduce expenses, determine profitability, and make better financial decisions. The document also outlines different cost categories and provides an example of calculating per-product costs to determine appropriate pricing.
Introducing Smart Targets - SMX London 2020Wijnand Meijer
This document provides an overview of setting smart targets for paid search campaigns to maximize profitability. It discusses moving from fixed budget mindsets to focusing on return on ad spend (ROAS) or cost per acquisition (CPA) targets based on relevant business inputs. These inputs include profit margin, percentage of margin willing to invest in acquisition, and lead-to-sale conversion rates. The document also provides guidance on calculating smart targets, health checking targets and CPCs, integrating advertising data with CRM systems, and using smart bidding to explore efficiency and volume tradeoffs. The goal is to set targets grounded in an understanding of actual business metrics and profitability.
The document discusses key retail metrics and calculations that are important for store operations and management. It covers topics like average transaction value, average basket size, revenue per square foot, footfall and conversion rates, margins, inventory turnover, and other financial metrics. Formulas are provided for calculating each metric. The purpose is to help retail managers understand and analyze important aspects of store performance.
Need a Killer Business Model? These Tips Will Get You GoingCamino Financial
Hey Mr. Business Owner,
Nice to meet you. In this power presentation, we will help you answer 4 vital business questions:
1. Why do I need to measure financial
performance?
2. How do I measure performance?
3. How much volume do I need to break-even?
4. How much do I need to invest?
Ready to take real steps to get your business growing? Follow Camino Financial and together we'll move forward!
CVP analysis is an important tool for profit planning that provides information on break-even points, the sensitivity of profits to changes in output or costs, and the amount of profit expected for projected sales levels. It analyzes the behavior of costs with changes in volume and the interdependence of volume, costs, and profits. The break-even point is the level of activity where total revenues equal total costs, representing the minimum level of activity needed to cover total fixed costs. It is calculated as total fixed costs divided by the contribution margin per unit.
Fixed costs remain constant regardless of output level, while variable costs change proportionally with output. It is important for businesses to distinguish between fixed and variable costs to perform break-even analysis. Break-even analysis determines the sales volume needed for revenues to equal total costs and can help with pricing, cost changes, production technique choices, and other decisions.
Types of Businesses, costs, revenue and barriers to growthbwellington
This document provides an overview of business concepts including:
- The main reasons people start businesses are to make a profit and there are different types of business ownership structures like proprietorships, partnerships, and corporations.
- Corporations are created to raise capital, limit liability, and expand operations.
- Businesses must manage costs like fixed costs, variable costs, and total costs to earn a profit since profit is revenue minus costs.
- Understanding costs, revenues, and factors like economies and diseconomies of scale is essential for business success.
This document outlines the sections and topics to be addressed in a business plan's economics and marketing sections. For the economics section, it describes analyzing a business's revenue drivers, profit margins, fixed and variable costs, breakeven point, and economic model. The marketing section summary includes developing an overall marketing strategy, pricing approach, sales tactics, advertising and promotion plan, customer service approach, and distribution channels. Key elements are identifying target customers, differentiating the product or service, setting competitive prices, building sales teams or partnerships, and creating an advertising budget and public relations strategy.
Similar to From Boots To Business - Economics of Small Business (20)
Financing a new venture requires understanding the different funding options available and their pros and cons. Most startups need funding to cover costs before generating revenue from sales. Common sources of funding include personal savings, bootstrapping, bank loans, SBA loans, crowdfunding, angel investors, and venture capital. Proper preparation is key, including developing financial projections and statements to demonstrate the funding need and viability to potential investors or lenders.
Understand the various legal forms of a business and the opportunities and challenges associated with each form
http://frombootstobusiness.com/category/from-boots-to-business/business-legal-principles/
The document discusses conducting market and industry research to understand a business's competitive landscape. It recommends identifying the target market through research of market size, customer behavior, and sales projections. Key competitors should also be analyzed and a competitive strategy formulated. Industry analysis involves examining the industry structure, trends, success factors, and attractiveness using Porter's Five Forces model. Thorough research reduces risk and allows businesses to refine their offering to meet customer needs.
How many times you have had an idea that you thought would make a great business opportunity but did not act on it?
For More Information go to http://frombootstobusiness.com/category/from-boots-to-business/opportunity-recognition-basics/
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2. Objective
Understand the relationships
between the costs of operations,
price structures, and sales volume to
better understand the profit
potential and sustainability for your
planned venture.
3. Agenda
• Economics Model of a Business
• Revenues
• Volumes
• Margins
• Operating Leverage
• Implications for Risk
4. How the business
creates and delivers
value to the customer
Why This is Important
Business
Model
How the business
captures that value
in the form of
an economic return
Economic
Model
5. Benefits of understanding your economic model
• Helps build a sustainable competitive advantage
• Informs your management decisions
• Provides stability and consistency
Are we making money or moving money?
Why This is Important
7. • How many ways does your company have
to earn money?
• One source or several?
• Implications for risk?
• Is this a competitive advantage or a
disadvantage?
Revenue Drivers
9. Difference between Price and Cost
• What price do you charge for your product or service?
• How much does it cost you to deliver that single unit of
product or service?
• Does difference between the price you charge and
your cost of production provide adequate cash to
cover fixed operating expenses and generate a profit?
Margins
10. The number of units of product or service you
are selling or providing.
• Is generally meaningless unless you discuss it
along with margin
• High volume alone is meaningless unless you keep
something from each sale (margin).
Volume
11. Example
What does this mean for
the economic model?
Porsche 911 -- $91K Nissan Versa -- $13K
13. What does it actually cost to deliver one
unit of whatever you do?
• Changes in direct relation to your revenue
• Direct labor, payroll taxes and costs per
employee (CPEs), mileage, packaging, unit
transport or delivery, raw materials
• Variable does not mean optional
Variable Costs
14. Expenses you have to pay no matter what
sales you generate.
• Remain the same over a given period of time
• Include rent, brick and mortar location, salaries
(not hourly pay), advertising, insurance, write-off
of equipment (rainy day/replacement fund).
Q: Are utility bills a variable or fixed expense?
Fixed Costs
15. Definition: The volume of sales revenue needed to cover all of your costs over a
given period of time.
Break Even
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Total Exp
BREAK EVEN POINT
Sales = Expenses
20. Higher fixed costs (higher operating leverage) means
• Greater risk
• It takes more units of service each month to break even
• But, once you get to break even, you make a lot more
money
Lower fixed costs (low operating leverage) means
• Less risk
• It takes less units of a service or product each month to
break even
Implications of Operating Leverage
21. Before You Open Your Doors,
Ask Yourself:
• How will I generate sales dollars/revenue?
• What are my total sales-related costs to do that?
• What are my fixed/operating costs for a given period
of time?
• How much sales revenue must I generate to cover ALL
my costs so I begin to show a net profit?
• Based on my research and analysis, can I generate the
needed sales dollars and manage these expenses to
have a sustainable and profitable business?
22. Key Takeaways:
Understanding Your Economic Model
REVENUE DRIVERS: How many ways can you separate your customers
from their money? Does the number of revenue drivers increase or
decrease your risk?
MARGINS: What is left over after each unit of sale to pay fixed costs?
What percentage of sales is that? When do you break even?
VOLUMES: How many units do you sell each period? Is it enough to
exceed break even? Enough to make it worthwhile?
OPERATING LEVERAGE: New businesses should maintain a low
operating leverage (high variable cost) model to manage risk and
facilitate liquidity.
Editor's Notes
Additionally:
Understand how to arrange and re-arrange the levers of an economic model based on the stage of business.
We will talk about the 4 levers in the economic model and how they interact to form your risk profile. A lot of this information may be intuitive and we will give you a common vocabulary to use when building your economic model. You want to know how your model impacts risk regardless of how you are funded (self, debt, equity).
Instructor Notes:
Business Model – How You Make Money – Customer Facing
This is how the business earns its income that is valuated in the form of financial return.
The Business Model, as discussed in Module 3, is how a company makes money
What product or service does it sell? Who are their primary customers? What industry does the company compete it?
Economic Model – How You Manage Money – Owner Facing
Module 4 is about the Economic Model – How does the company manage their money?
This is the aspect of business that the majority of people do not want to focus on, but can be problematic.
Businesses often fail because they do not fully comprehend the importance of the topics covered in this module
Emphasize that businesses create value for customers AND owners.
Successful businesses are able to capture the value they create for customers and turn it into a shareholder return.
Apps and website are good examples of how they create value for users without capturing that value for owners (monetization).
Instructor Notes:
This module is designed to help participants understand the importance of making moving money to be profitable over the long-term.
Too often business owners move money through their sales income and access to various sources of operating cash like a business credit card or a line of credit.
Unless owners seek to understand and evaluate the costs of doing business in relation to their sales income, they will never gain a clear understanding of their profitability. They often find this out when it is too late and their business is in financial trouble.
The focus of Module 4 - how to understand if your business is truly profitable and what it takes to do that. This is where the rubber meets the road!
Re-emphasize why its important.
Illustrate with a company you are familiar with.
One example is the difference between Southwest and American Airlines. Both firms compete in the same market space yet they leverage different business and economic models to deliver value to their customers.
Discussion questions:
If American knows exactly how Southwest does business, why can’t they imitate Southwest’s success? What is different about the two companies?
Instructor Notes:
Understanding the relationship between these four terms determines whether your company is profitable or not.
Most small businesses don’t fail because they are not good at what they do. They don’t understand these levers/terms and how they fit together.
The Four Levers of an Economic Model:
Revenue Drivers - the sources of sales dollars generated by the company’s business activity
Margins - the gross sales dollars minus first the company’s sales/variable expenses and second subtracting the company’s operating/fixed expenses
Volumes - the dollar amount of sales needed to cover all the company’s variable and fixed expenses. It is only when the company has generated enough sales dollars to cover all expenses that it actually begins making money for you
Operating Leverage - the relationship between the company’s sales/variable expenses (the numerator) and its operating/fixed expenses (the denominator)
Key discussion question on operating leverage:
Why would you want your fixed costs to be as low as possible in relation to your variable expenses?
Why does that matter in your business?
Instructor Notes:
These are the products or services that actually generate revenue for the company through their sale and delivery.
One question business owners must grapple with is whether to be “narrow” or limited/small in what they offer in their product line in order to be really good at what they do - or to be ‘broader’ with diverse products and services in order to attract a wider customer base.
Discuss what the implications could be to their business for each of these approaches
One driver allows focus, many allows for diversity. Both have risks. Discuss them.
Instructor Notes:
Ask how many revenue drivers Starbucks has (the number of ways to separate customers from their money)
What are the ways Starbucks creates value for them (i.e., why they go there)?
Then ask them to consider how all of that is captured through an economic model for shareholder benefit.
As they list things, try to categorize them into the 4 components of the Economic Model (revenue drivers, margins, volume…operating leverage won’t be as obvious).
If they are stuck or off base, prompt them with questions like “What else do they sell”? (revenue drivers), “How much do they keep on each single cup of coffee?” (margins), “How much coffee do you think they sell?” (volume)
Instructor Notes:
Margins will help participants understand what their true costs of doing business will be - both their sales-related costs (also referred to as variable costs) and their operating costs (also referred to as fixed costs).
Does their sales revenue cover these costs for a given period of time? If yes, they can begin to understand at what point or amount of sales do they actually become profitable.
This also called the break even analysis. If no, their business is NOT profitable and they must reassess the pricing for their products or their costs of doing business.
Define gross margin as gross sales dollars minus the company’s variable costs.
The company’s fixed costs come out of the gross margin dollar amount and this is your net profit. May use P&L handout as a visual aide to explain this concept.
Question: Ask if anyone knows how much it costs them to deliver one single unit of whatever it is they sell.
Discuss the high and low margins (i.e.: a workout facility/gym versus an IT company) - Emphasize the importance of this.
Ask how to price a product - be sure that they understand the only way to price a product is based on what the customer is willing to pay.
Instructor should note that the cost of a product/service also includes such things as wages, taxes, etc.
Instructor Notes:
This slide should be linked to the discussion on margins to emphasize the importance of understanding what amount of sales revenue is needed for a given period of time to cover the company’s variable and fixed costs for that same time period. The sales over that breakeven point is where the company actually become profitable and makes money.
Volume is the amount of total sales dollars needed to pay/cover all the company’s variable/sales expenses and its fixed/operating expenses. A net profit is not actually generate until the company has covered/paid ALL of its expenses for a given period of time. Working through this process is called a breakeven analysis. Instructor may use a breakeven analysis example to demonstrate this concept.
Reflect back on Starbucks’ volume. Then make the point that they have 3 levers in the right position (high margin, high volume, and multiple revenue drivers).
Instructor Notes:
The Porsche on the right sells for about $80K and the Nissan Versa sells for $13K.
How different can the unit cost be?
How much overhead can you support on a single sale of a Porsche?
Have fun with this slide.
Instructor Notes:
This example is meant to show the difference between a high volume retailer (WalMart) and a more upscale retailer such as Neiman-Marcus.
In the WalMart example margins are usually low. The store does not make much profit off of the items they sell unless they sell a LOT of whatever it is.
Neiman-Marcus sells the types of goods where margins are high. They won’t sell the same quantity of items that WalMart does, but they can sell in lower quantity, and still generate a profit because they typically make more profit off each item they sell.
Please use your own experiences as a consumer to bring some life to this example.
Instructor Notes:
Variable Costs are the costs associated with producing the company’s sales revenue. Examples: raw materials, supplies for your direct product etc. They are called variable costs because they “vary” depending on your company’s sales volume.
The key is that the variable costs change with sales. That is the litmus test.
“What does it cost for you to deliver your product or service?” and then tie it back to the Profit and Loss statement.
Instructor Notes:
Fixed Costs are the company’s recurring operating expenses such as its light bill, rent, employee salaries, etc. These are set or fixed and must be paid every month, regardless of your company’s sales volume. These are the costs that even if you do not make a single sale you still need to pay, i.e. depreciation, rent, utilities, insurance fees and advertising costs.
Fixed costs are the company’s overhead and are paid out of its gross margins on each unit of sale. So, Starbucks has high margins and can support all the overhead (fixed costs) they have.
Talk through some of the examples and throw them the last question to see what they say (could actually be fixed or variable).
Instructor Notes:
The best day in an entrepreneur’s business life is the day the company actually makes no money for the first time (breaks even, as opposed to losing money).
Once business owners know their fixed costs, they can tell you how many units of product or service they need to sell to breakeven. Assuming they know their pricing, they can tell you the dollar amount that volume represents.
Break even brings nothing home for the owner.
Besides the sales required to breakeven, how many additional sales does the business have to generate to create enough profit for the owners to be able to pay their bills?
Instructor Notes:
The Joe’s Cup of Joe Coffee illustration shows a monthly P&L statement from a typical mobile coffee stand.
Purpose is to show a basic example of how moving the levers of the economic model around can effect a business’ net profit.
In this example - Variable costs include: coffee beans, water, cups, sugar, and all of the other coffee accoutrements.
Monthly fixed costs include:
Renting the space, cart lease payment, transportation/utilities expenses such as gas, and insurance.
In this example, the cart is in operation 5 days a week, 8 hours a day. Joe’s averaged sales of 20 cups of coffee/hour during operating hours.
Upon comparing the cost and pricing information provided above against Joe’s sales information (average of 20 cups of coffee sold per hour) we realize that Joe’s is breaking even - i.e. they don’t earn a profit or run at a deficit.
Instructor Notes:
This slide is meant to show the effect of increased sales volume.
In the previous slide, Joe’s Cup of Joe Coffee reached break even by averaging 20 cups of coffee per hour sold.
This month, business is little better:
Word has gotten out about the great-tasting coffee and great service, and more customers are picking Joe’s instead of the competitors.
Meanwhile, the owner of the stand has gotten more efficient, and can make coffee and complete the sale more quickly.
This allows Joe’s to sell an additional 5 cups of coffee each hour, to average selling 25 cups per hour this month.
This results in a net profit of $1,080 for the owner.
Instructor Notes:
This slide is meant to show the effect of improving a business’ margins. To do this Joe’s needs to either pay less for the coffee and other supplies, or sell the coffee at a higher price. In this example, Joe’s was able to do both.
Joe was able to cut some deals with vendors, which shaved a nickel per cup off his cost. Meanwhile, he raised his price a quarter per cup from $2.00 to $2.25. This moves his margin from $1.35 per cup to $1.65, resulting in an extra $1200 in profit from the previous month.
Instructor Notes:
This shows that one is not better or worse…just different. Most start ups are low operating leverage, high variable cost companies because the risk is lower.
Established companies have higher operating leverage and more reward. Emphasize the risk-reward dynamic and that entrepreneurs mitigate risk first.
Instructor Notes:
This shows that one is not better or worse…just different. Most start ups are low operating leverage, high variable cost companies because the risk is lower.
Established companies have higher operating leverage and more reward. Emphasize the risk-reward dynamic and that entrepreneurs mitigate risk first.
Instructor Notes:
These are questions potential business owners should know the answers to before they go into business.
Instructor Notes:
This wraps it all up for them. Relate it back to Starbucks or another company you may have discussed with the group.
Tie P&L/Income Statement back into the discussion.
Reference that when the factors of the Economic Model are successfully put together, ultimately a company will get to a profit.
Profit is the surplus remaining after total costs are deducted from total revenues.