Business plan for New Venture

Denim o Bag
Presented by:
Karina Dhall
Rishika Gulati
Denim o Bag

Introduction to the venture

Name: Denim o Bag

Address: D25, 5
th
block, Koramangala

Nature of business: Joint Venture

Name of the partners: Rishika Gulati
Karina Dhall

Why Denim o Bag
A huge requirement for bags

Represent their ideas and emotions through the accessories they
carry

Customization helps to create individuality among peer group

Recyclable material

Suitable for both the sexes
Market Segmentation
Market Analysis
Already made
designs
Artwork
Already made designs

less expensive option

Ages 14-25
69% are students
Median individual income is 26,000
Go out to eat 3.4 times a week
Listen to 3.6 hours of music a week

Artwork

custom artwork created and placed on the bag

generally have the image or style in mind and will
direct the artist to create it
Ages 24-40
Median individual income is 42,000
Go out to eat 2.7 times a week
Listen to 3.3 hours of music a week
18% are using the bag as a form of communication for
a cause or a message

Target Market Segment Strategy
Young demographics

Highest likelihood of purchasing a custom bag

Located in bangalore which has a young, hip
scene
Competition and Buying Patterns
The bag world

Local competitor specializes in handmade bags
70% of their business is jute bags with the remaining 30% other
materials like fake leather
Minimum order of 10 with A 2-3 week lead time
Uses pre-existing designs for their bags and for custom designs you
must use their artist

Bag shack

Local retailer is geared toward organizations or teams with
production runs of 20 or more
Rigid regarding custom work

Bag design house

Internet-based retailer
That primarily offers computer sublimations
Design house has a catalogue of approximately 200 images for the
customer to choose from
Do not allow customers to use their own designs


Description of venture

Management

Custom denim bag! Will be led by Karina Dhall and Rishika Gulati
and is their first business venture.

Objectives

To become known as the premier custom bags made out of used
denims and jeans.

Achieve profitability within 12 months.

Design and implement strict financial controls to help ensure
success.

Mission

Custom denim bags mission is to offer the finest in custom denim bags.
Custom denim bags! will offer customers the best product at the best price
with a lot of variety and designs. Customer's expectations will always be
exceeded.

Keys to Success

Leverage unlimited design variations in the denim bags which will offer
unique features to all the customers.

Exceed customer expectations by offering high quality products at
reasonable prices with quick turnaround times.

Employ careful financial and accounting analysis to ensure efficiency and
proper controls.

Company Ownership

Karina Dhall and Rishika Gulati are the Founders and President of
Custom denim bag!

Roles and responsibility

Both the owners of the company are equally responsible for the
management of the venture which includes procurement of raw
materials, sourcing of the fabrics, production planning, costing,
advertising and promotion, handling of customers and another
office related tasks.

Product
Custom bags

Made of used pair of denims

Designs and artwork as per the requirement of customers

Environment friendly

Unisexual

Unlimited design options

Different types of bags option
Personnel Plan
Customize Denim Bags will require the following personnel for
operations:

Owner -- Business development, finance and high level accounting,
customer service, bag designing

Designer Bag Designing/printing

In-store retail employee -- Help customers with placing or existing
orders

Bookkeeper -- Accounts receivable and payable

Independent design contractor -- Artist


Office Equipments
Custom denim bags! will incur the following expenses for start up:

Two laptops -- These will be high end models and utilize the
following software: Microsoft Office, Adobe Photoshop and
Illustrator, Macromedia FreeHand, and QuickBooks Pro.

Raw material old denims, accessories for embroidery (threads,
appliqus, buttons, ribbons etc.)

Sewing machines, threads, zippers and other accessories.

In-store computer kiosk -- This allows customers to view options
for bags and existing imagery.

Website -- This will be used for information disbursement as well as
ordering

Shelving display unit -- To display assorted bag designs on paper for easier
viewing

Broadband Internet connection

Two desk/chair/office supplies set

Small bags inventory -- Inventory will be kept small to lower overhead. This
will be accomplished by using a bag vendor who is one shipping day away,
effectively using a just-in-time (JIT) system for managing inventory

Design unit -- To make the designs as per the customers requirement.

Background of Entrepreneurs
Rishika Gulati

B.Sc. Fashion Design and Technology
MFM from NIFT Bangalore
Total work Ex. 5 months

Karina Dhall

BSc. (Hons.) Textiles and Clothing From Delhi university
Apparel merchandising and Marketing, Pearl academy of fashion
MFM from NIFT Bangalore
Total work Ex. 3 months

Competitive Edge
Customization of bags

Use of old pair of denims

Variety of design options

Uniqueness of each bag

Online as well as retail outlet



Production plan
Manufacturing process

Treatment and checking of denims

If durable enough then sent for cutting and sewing the bottom of the
denim

Check for durability and strength of the fabric

If OK, then sent for further treatment and dyeing

The last step is the cut out denim is sent to the warehouse and the
retail outlet for carrying out the designing process

Suppliers and Raw Materials
Fabric suppliers:

Rameshwaram fabric house
Bannergatta road, Bangalore
Jeans firm Jaynagar, Bangalore

Raw materials:

Threads: Pankaj threads company
Kuddahalli, Bangalore
Trims: Lakshmi handicrafts
Bohmanhalli, Bangalore

Marketing plan

Products and Services

Offers customers a choice of imagery (outs or theirs) to apply to the
front or back of the bag

Use of appliqu work, thread work, embroidery, cut and paste and
many other design options as per the need and requirement of the
customer

Use of durable fabrics and long lasting design

Cons
It is not cost effective for small number production runs

Changes made at the later stage of the production by the customers
may not be feasible by the designers
Choice Of Products
Pre-existing designs or custom artwork

Use of extensive catalogue

Strategic relationships with several companies
that offer a wide range of designs
Products

Pricing

Unique pricing method

The price of the basic denim bag remains the same

Additional price will be charged for the artwork,
embellishments or any other kind of designer work on the bag

Competitive pricing

The starting price for basic denim pouch starts from Rs.899
till Rs.1199

The artwork, embellishments etc. have prices starting from
Rs.699 till Rs.3999

Promotion
Use of social networking websites like Facebook,
Orkut, Twitter etc

Brochures and pamphlets distributed outside
colleges and malls

Youth events and student groups


Advertisement Budget
Website and Catalogue - 60%

Brochures and Pamphlets - 30%

Word of Mouth - 10%

Strategy and Implementation

Competitive edge to the product

Unprecedented catalog of graphic images

The quality of their computer generated sublimations, a
function of using prototype HP sublimation technology
to add aesthetic appeal to the bag

Uniqueness of design in each bag is the USP of the
business

The marketing campaign will emphasize the ability to
completely customize a bag

Competitive Edge

Large catalog of styles

Quality of the Fabric
Sales Strategy

Ordering a bag from Custom Denim Bags will be
easy and pleasing experience

Continual development of the website

A friendly, easy to use web interface

Other Factors To Help Boost Sales
Exemplary customer service - provide the
customer with the feeling that the business is
looking out for the customer's interest

Fastest turnaround time possible

By offering customers a high quality product by
using high grade fabric for the manufacturing
and state-of-the-art technology and materials

Web Plan Summary

Easy to navigate site through all the different
options
Computer kiosk for customers to access the
designs catalog
The customer can place the order online or take
the information to an employee to place the
order

Website Marketing Strategy

The website will be integral in Customize Denim
Bags it is a key sales tool for both local and
distant customers

The URL address will always be used in
promotional material, encouraging people to
check out the company, concept, and the
products
Financial plan

Start Up Funding Amount
Start up expenses to fund 50000
Start up assets to fund 80000
Total funding required 130000
Assets
Non-cash Assets from Start-up
15000
Cash Requirements from Start-up
56000
Additional Cash Raised 0
Cash balance on starting date 56000
Total assets 127000
Liabilities and capital
Liabilities
Current borrowings 0
Long term liabilities 65000
Accounts payable 0
Other current liabilities 0
Total liabilities 65000
Capital
Planned investment
Karina 125000
Rishika 125000
Other investors 125000
Additional investment requirement 0
Total planned investment 375000
Loss at start-up (start up expenses) 12000
Start Up Amount
Requirements
Start-up expenses
Legal 1500
Stationary 5500
Promotion 3000
Computer equipments 70000
Rent 15000
Insurance 0
Office furniture 12500
Designers salary 25000
Website development 1200
Machinery and Equipments 65000
Total start up expenses 48200
Start-up assets
Cash required 60000
Start-up inventory 0
Other current assets 1500
Long term assets 5000
Total assets 66500
Total requirements 114700
Breakeven analysis
The company expects to reach its breakeven in four year.

B/E (Q) = TFC/ SP VC/ UNIT (marginal contribution)

Year 1

TFC = 170200/1000 700
= -529.8
Year 2

TFC = 170200/1000 550
= -379
Year 3
TFC = 170200/1000 300
= -129
Year 4
TFC = 170200/1000 150
= 20.2

Therefore, with reducing the variable cost every
year, the breakeven will be achieved in 4 years.

Assessment of Risk

Copying of the similar concept

Since the concept is new in the market, there will be
no such competition at present for the same

Will take a while for the competitors to imitate the
concept

Till then the firm would have made enough profits
and established a good such that the brand will be
able to get many loyal customers