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Royal Stitch

Business Plan
Pearl Continental Hotel, PIDC, Karachi

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I thank the Almighty for giving us the strength and persistence to complete this report. The many friends and family members who have contributed directly or indirectly to the completion of this report; I am thankful for their support, which helped me stay focus.

Special thanks to our teacher Mr. Mir Asghar Ali who has been very kind and helpful with us throughout the semester. Due to his keen words and the way of teaching, he inspired us in countless different ways.

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Executive Summary:
Management: FSK & ZS CO. Contact:
Admin Dept Karachi

Mission: mission is to provide the unique style to every

Description: Royal Stitch is an upscale women's clothing boutique that will open in August 2010. Royal Stitch that means, "Honor" defines the boutique and its essence of inclusion. Royal Stitch clothing selections and exclusive personal style services, which include a detailed Style Assessment, will ensure that our customers are well dressed.


Advisors/Board Members:

Products/Services: Royal Stitch will carry Ready-to-Wear (RTW) designer, formal, casual, party wear and especially bridal apparel for women. Royal Stitch will feature other choice selections by Pakistani’s traditional and western females taste such as Shalwar Kurta, Weekend Maxi and short dresses for party wear, Designer Tops in casual collection. Unique & innovative Royal Stitch will provide services such as Style Assessments, alterations, personal shopping, and special ordering to customers during store hours and by personal appointments. Style Concierges who are trained within the image industry will be available to customers on a daily basis. Royal Stitch's innovative Style Assessments and educational emphasis in helping women develop their personal styles will enhance our reputation as a truly unique boutique.

Markets: The Royal Stitch customer is a busy professional woman, university student, rich housewives who lives in the Metropolitan City of Pakistan “Karachi” with a household income over _____. She enjoys the boutique fashions and wants a place where she can get unique style meet her lifestyle need. Competition: Royal Stitch has stiff local competition with the many wonderful boutiques in Karachi. Direct competitors include those boutiques that carry some of the concepts that Royal Stitch plans on carrying or could move easily into carrying, and are located in the Valley. Indirect competitors are those boutiques in Karachi that focus on a different target market or do not focus on unique design that Royal Stitch will carry, in addition to well-known boutiques in other metropolitan areas. Financial Projections:

FY 2010-11
Sales 11,573,283

FY 2011-12

FY 2012-13

FY 2013-14

FY 2014-15

Net Profit






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General Company Description
We are in a Business of Boutique in which we design clothes for women and each design will be unique Each design is original, focusing on individual style, each person privileged as our unique royal pattern having their own personal authentic design with no duplicate "royal stitch patronizing royalty Initially launching only in Karachi, we will have four outlets, one each in the major 5 star hotels of the city (Pearl Continental, Marriot, Sheraton and Avari) but in the beginning we will only set up the PC outlet and once it works out then we will invest on the rest. The basic maintained theme of our outlets will be personified with the color pink; the decor shall be of light colored walls supported with diamond-like stones and curtains. Each outlet will have a fairly sized lounged that will include beverages and refreshments for the waiting customers. Soft soothing music will accompany the ambience of the shops. Mission Statement: The mission of Royal Stitch is to provide uniqueness to every woman. We never comprise towards the style and individualistic of our every single client. Company Goals and Objectives Royal Stitch goal is to take a place of Bejan in US. Legal form of ownership: Partnership Products and Services Our shop will have four types of clothing lines casuals, formals, party wear and bridal. The clothes in our shop will not have any duplicates, just one piece; if bought by a customer, there won’t be a spare lot and will not be designed again. This way each of our customers will have a unique piece of clothing that no other will share anywhere. This is the driving selling proposition that we shall market.

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Marketing Plan
Market research - Why?
In the Questionnaire we asked questions that if you get a chance to wear a dress which is unique and nobody can have it so most of the ladies said yes, so through small survey we identified the need of such boutique which should offer dresses to its clientele which no one else can have it.

a. Market Size:
We have a market size of approximately 300,000 females from the age group of 1550.

b. Market Share:
Being very realistic we are targeting 1% of our total target market, which is 50,000, due to the fact that has to be considered like, is the target audience aware of our product and do they believe on us.

c. Consumer Analysis (Current situation)
Nature of buying decision: Usually the buying decisions of women in this case are very choosy. Customers are mostly likely to make a purchase while they find something very different when they come across such boutique outlets; otherwise previously visited customers who have made purchases tend to turn into retention. If we are to properly differentiate these two natures of buying; the casual and semi formal clothes are usually bought out of uniqueness and party wear, formal and bridal clothes require the customers to make prolonged periods of decision making time.

• • •

Barriers in entering this market with the new company: High marketing costs Consumer acceptance and brand recognition Unique technology and patents Solution to these Barriers: Use resources efficiently so that there will no wastage on unnecessary marketing. Organizing events to develop clientele acceptance for our product. Going into universities

• •

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arranging fashion shows. • We don’t publish our catalog so that no one can copy our designs, plus we also save our cost by not making copyrights of these designs.

Product from the client:
Royal Stitch will carry from Ready-to-Wear (RTW) and made to order suits of different designs, diffusion lines and casual, formal, party wear apparel & bridal dress for women. Royal Stitch will carry four main RTW and MTO lines (Royal Formal Collections, Royal Casual Collections, Royal Party wear & Royal Bridal Collections) these collection have sub categories with various fabrics around the world such as Velvet, Georgette, Chiffon, Cotton, Silk, Polyester Cotton, Lillian, Crepe and Organza/ APPAREL LINES Royal Formal Velvet Collection Royal Formal Georgette Collection Royal Formal Chiffon Collection Royal Formal Cotton Collection Royal Formal Silk Collection Royal Formal PC Collection Royal Formal Crepe Collection Royal Formal Organza Collection Royal Casual Cotton Royal Casual Lillian Royal Casual Crepe Royal Party Velvet Royal party Silk Royal party Crepe Royal party Organza Royal Bridal Fashion Royal Traditional Bridal Royal Classical Bridal Royal Modern Bridal Some of the key lines are detailed below: Royal Formal Collections: Royal Formal Collection is actually designed contemporary cuts to keep a different style. Detailed, delicate and sparkling embroideries are done on luscious Velvet, Georgette, Chiffon, Cotton, Silk, PC, Crepe, and Organza, creating the perfect evening wears for our clients. In this category we will also cater office-going ladies by providing them subtle or bright colors to make their day perfect. "Epitomizing elegance like no other" Royal Casual Collections: Royal Casual Collections is of unique cut in classic styles. They are designed in a way that there can be no

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other alternate for casual wear. Keeping the weather in mind Cotton, Lillian and crepe are used. Casual tops will be designed that can be worn with a pair of jeans, Capri's, trousers or anything of clients choice. Royal Collection very well knows how to dress a woman. Royal Party Wear: Royal party wear brings innovative ideas in party wear. Unique styles of clothing that will glamorize evening and make our clients look the most beautiful. This category will include long sleek dresses with different designs; it will also have short dresses. Royal collection designs are considered feminine and elegant so we will also design according to the desire and a requirement of our clients as the attention is on individualism. Royal Bridal Collections:

Only once in a lifetime a girl experiences the special day of her life that is her wedding day and we are here to make this day more special for our clients by designing a dress that is specially made for their personality. Royal bridal collection presents an amazing Bridal Collection, best suited for the Asian brides, enhancing the beauty and look of innocence yet presenting a picture of elegance.

Customer and Market Research:
Market Needs If you were to overhear women talking in a dressing room, you would more than likely hear them comment on something they've tried on and question how they should wear it or what it will go with in their closet. Research has shown that women are stressed, have little time to shop, and would generally like help in determining the right clothes and styles to wear. With over 15 million1 Pakistani women between the ages of 15-49 spending over 2.43%2 out the total consumption which is equals to 337 rupees3 in apparel each year, there are sure to be some mistakes made in clothing choices. Television shows such as Style 360 "FYI" shows updates regarding the current fashion and trying to reduce woman's confusion about what looks best on her. Even women who can afford a professional stylist feel helpless and often jokingly request that their stylist unable help them get dressed. One gender in particular influences the majority of the retail marketplace: women. Women comprise 48.6% (89 million) of the Pakistani population4 and control or influence. Research indicates that women approach retail shopping uniquely by evaluating purchases based on product and company information derived from both personal and expert sources. The table below shows that out of the ten characteristics consumers find important in deciding where to

Statistics: PSLSM 07-08 PERCENTAGE DISTRIBUTION OF POPULATION BY AGE, SEX AND AREA 2007-08. (4.9% * 48.6% female population) (693.69*48.6%) Statistics: Female Population percentages from (PSLSM 07-08 PERCENTAGE DISTRIBUTION OF POPULATION BY AGE,




SEX AND AREA 2007-08) * Population of Pakistan; 183,329,300*48.6%.

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shop, four were attributed to customer service.
Top Ten Factors in Deciding Where to Shop5:

Reason 1. Has reasonable prices 2. Treats customers with respect 3. Carries quality merchandise 4. Doesn't pressure me to buy anything 5. Convenient store hours 6. Handles merchandise returns fairly 7. I can always find what I want 8. Carries a wide variety of items (e.g. colors, sizes) 9. Has outstanding customer service 10. Makes it quick and easy to shop

2000 78% 66 66 61 61 60 61 57 55 53

2002 85% 74 72 70 68 66 65 64 63 61

Change +7 +8 +6 +9 +7 +6 +4 +7 +8 +8

Market Size:
To check how many women purchase their outfits from boutiques for this we had several statistics from government of Pakistan which indicates that the population of women in Karachi is around 1.5 million and the average household expenditure on readymade garments was around 16% thus we get the idea that in 1.5 million of population around 0.23 million of population purchases their outfit from boutiques or same type of shops.6
Market Size 1 Market Size2 Average




The above method is the one way to check the market size, thought we not stick to these statistics we design a questionnaire and design a sample of 30 respondents from them we asked different questions regarding their buying habits and behavior from them we get to know that from different areas of people they rate their purchasing 55% from boutique and 45% they design their own clothes from tailor. Thus we use that research to calculate the market size of the Karachi,

"Getting the Goods," May 2003


Percentages of population from Labor Force Survey 2007-08


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which is around 0.4 million.7

Industry Size:
Due to unavailability of the data we have to count the major market leaders operated in the busy streets of Karachi, thus we get to know that approximately there are 50 big players who are catering the need of designer wear for around 0.03 million females.

Penetration Rate:
Since there were total 1,534,319 from the age of 15-50 and there are 377,796 females currently purchasing outfits from different boutiques so by dividing total population of females with the females currently purchasing their outfits from boutique we get 24.6% of market penetration rate.

Small Survey Results Customer needs, expectations and buying patterns
The Royal Stitch customer loves to shop and enjoys going to boutiques by showing their yearly expenditure on an average has 100,000. She is knowledgeable about designer fashions and tends to shop for seasonal wardrobes twice a year plus picks up various fashion and basic pieces throughout the year. Many times she shops to "browse." By offering fashionable accessories and wardrobe organization items, Royal Stitch will be able to grab a larger share of her wardrobe budget. She is used to coming into the store and browsing through the clothing items and trying on what interests her. She expects a warm and comfortable environment and nice dressing rooms. She enjoys being left alone but also enjoys the special touches of personal shopping assistance and having the ability to special order items.

Market Segmentation:
Karachi is rated amongst the top Pakistani markets in economic and educational achievements. At an average age of 21, the Karachi professional is highly affluent, with an average monthly family household income of all the quintiles is 12,326 Rs.8 According to our small survey of 30 respondent we found that Close to 50% are studying and 17% are housewife, 13% have running their own business and 20% are working women. The clothing market can be segmented into various sectors of customers who differ in style, color and cloth preferences. These people can be safely segregated from demographics involving the ages of 15 to 50 particularly talking about the female customer base. The young girls from the age span of 15 to 20 adopts a preference of a specific palette of colour range that includes bright and playful colors for example shades of yellow, shocking pink and shades of light green. This segment prefers a more contemporary mode of clothing that involves jeans, skirts, frocks and trendy variations of shalwar kameez The segment that follows from the ages of 21 to 25 categorizes those girls who adopt the clothing involving the same types of the younger segment but keep a tendency to incline towards formal wear since a percentage of these girls are married and workingwomen. The ages from 26 to 35 include mature women

Questionnaire Filled Out form Excel File sheet Name (Table 1.1 and Table 1.12) OUTPUT of cross tabulation Excel file Sheet name (results)


2007-08 Household Integrated Survey

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who have the tendency to sway from various modes of clothing. They tend to either fall into a very simple and normal mode of dressing. At some point these women start to adopt a nature of being adventurous and experimental in their preferences. 36 to 50 and onwards is categorized as a segment that involves middle aged married women and old matured independent ladies who are studied to be the most experimental in their dressings. This segment does not include all the ladies of this age in the pertaining age group but only includes the upper class social classes. The segmentation is further simplified in tabular form in the ‘”Consumer Analysis”’ section.


Age Gender Race Ethnic Group Education Income Occupations Religion

15-50 Female Asians. Most likely students of high schools & universities or those who have completed their academic qualifications. Non-Educated rich mothers/wives. A yearly income of 150,000 Above. Business Executive women, student of higher education, working women or housewives. All religions (all those who prefer trendy or modern cloths) Residents of posh areas such as Clifton, Defence, P.E.C.H.S & K.D.A Major is Pakistan, than all around the world. Going to parties, clubs, launches, openings, etc. They like being in latest trends Non-stingy, extrovert, outgoing, image conscious. The cloth material, embroidery, color, stitching and design, quality and uniqueness. Personality/Ego boost, Pride. Uniqueness will represent every customer’s individuality.

Geographic Segmenta tion Psychographic Segmenta tion Benefits

Urban Country Lifestyles (Activities & attitudes) Personality Functional Non-Functional

Royal Stitch has stiff local competition with the many wonderful boutiques in Karachi. Direct competitors include those boutiques that carry some of the concepts that Royal Stitch plans on carrying or could move easily into carrying, and are located in the Valley. Indirect competitors are those boutiques in Karachi that focus on a different target market or do not focus on unique design that Royal Stitch will carry, in addition to well-known boutiques in other metropolitan areas. The following are the list of potential direct and indirect competitors present in the market catering to the

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mentioned target audience.

Direct Competitors:
Outlets and designer shops will be the direct competitor of our brand since they cater to the same target market. These shops mostly cater to customized preferences of the customers and also release their own designs in the dressing categories. Ego Deepak Parwani Aisha Varsey Maria B Rizwan Beig Imran Qureshi Stone Age Funk Asia

Indirect competitors:
The indirect competitors include all low-end and low priced outlets including shops at Tariq Road, Dolmen Mall and Zainab Market that cater to all classes from lower to the upper middle.

Competition Analysis:
Direct Competition Company Name Maria B Brand Name Maria B Price Range Casual 8,000-12,000 Party 9000-30,000 Formal 23,000-100,000 USP Captures all the youth and has also has a lawn company with the same brand name. They come up with new clothing range every week and they don’t repeat previous designs again. He arranges various fashion shows in foreign countries and has a great brand name for upper upper class. Is known for all white range in clothing and she herself wears white all the time. Has a great back of Amir Adnan and it captures all the upper class youth girls.



Casual 1550-2750

Deepak Perwani

Deepak Perwani

Casual 3000-8000

Aisha Varsey

Aisha Varsey

Funk Asia

Funk Asia

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Imran Qureshi

has private clients and often deals with Karachi and Pakistan Fashion Week has private clients and often deals with Karachi and Pakistan Fashion Week

Rizwan Beig

In-Direct Competition Company Name Brand Name Stone age Stone age

Tag Line

Nomi ansai

Nomi ansari

USP Targets youth majorly Known for making colorful cloths, captures youth as well as other age groups and deals with part and bridal wear. Could be any and also those who can try copying our idea and designs.

All those boutiques that share a certain percentage of market share in our target market.

Could be any

Could be any

Target Market:
Demographics • Female. • Spending 86% of their household income. • Professional woman, Housewife, university Students and Students of O and A Levels • • •

(age 15-50) Household income over College-educated and currently studying Lives in a higher-income Karachi Neighborhood. Defence, Clifton, Johar, Gulshan and PECHS.

Psychographics • • •

Looks for something new, willing to spend money on quality, core items Would like more time or help in understanding what clothing is right for her She wants to look her best because she wants to feel good about herself as well as make a good impression at her job

Leisure Activities • Supports the Arts • Reads Vogue, Visgae, Pink and She • Watches Style 360 • Internet savvy

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• •

Travels, owns a passport She enjoys eating out as well as taking time for herself at the beauty saloon or getting a mani-pedi

Clothes Shopping Behaviors • Spends over 100,000 for clothes each year9 • Shops at Boutiques. • Buys mostly tops • Looks for classic, basic items each season, with 1-2 trendy items • She cares about how she presents herself, enjoys fashion, and looks for quality over


Our target market would be those females who lives in Defence, Clifton, Gulshan, PECHS and they spend more than 800010 per month on readymade clothing and they are lies in the 5th quintile of expenditure and income group.

Based on small research conducted on women's shopping behaviors as well as our own research for Karachi women, the following marketing strategies will be employed: •

Develop strong relationships with customers by utilizing Style Assessment and offering services to help each woman determine the right clothes for her. Provide educational materials and programs that enable customer’s greater decisionmaking confidence. Build awareness of brand and services to exemplify strong store reputation. Provide customers with a sense of access to "inside information" and harness the power of a woman's personal network by leveraging marketing collateral designed for sharing and encouraging referrals. Utilize personal referrals and stylists to build traffic.

• •

Objective #1: Launch of Royal Stitch Build awareness of brand and services to exemplify strong store Strategies:

reputation Provide customers with a sense of access to "inside information" and harness the power of a woman's personal network


Supported by our small survey of 30 respondents. Supported by our survey taken the averages of spending on clothes in a year and


than divided it for months

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Utilize personal referrals and stylists to build traffic Tactics: Strengthen the customer relationship via events and special communications Hold two large sales a year: winter and summer

Promotion: Web: Direct: Personal Selling:

Promote key merchandise & events on the website Send out monthly email newsletter to customers. Expense*
Develop working relationships with 2-3 personal stylists Provide personal appointments Train Style Concierges to provide exceptional service and exhibit patience in the selling process with women Hold Launch event/party - Invite VIPs and Karachi Socialites Hold unique after-hours shopping events (Mother-Daughter night, Travel Planning, Girls Night Out, etc.) Hold Fall & Spring events Get voted as one of best places to shop on Yello and in Vogue Magazine.

Events: PR:

Objective # - Garner In-Depth Understanding of Customers

Strategies: and offering services to help them determine the right clothes for them

Develop strong relationships with customers by utilizing Style Assessment Provide educational materials and programs that enable customers greater decision making confidence


Promote gift giving during key holidays (Eid, Valentine's & Mother's Day) gift. Expense*

Promotion: and utilize assessments to assist gift givers in purchasing the appropriate Direct:
Integrate style personalities and other key information into customer database and develop customer segments Create awareness of assessment through emails to customers List the style personality numbers on each merchandise tag to generate interest and awareness of the Style Assessment Provide overview of Style Assessment in dressing rooms Tailor merchandise offerings to specific Style personalities Hold monthly Style Assessment workshops. Expense*

In-Store: Events:

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Marketing Plan Marketing Strategy
Positioning Statement Royal Stitch provides women with upscale designer clothing and exclusive personal services. Our main competitive advantage is the unique Style helping women develop their personal style. Brand Positioning 'Royal Stitch' is Pakistani Mughal image. Building on the meaning of "Royal," Prestige will memorize the pride of Mughal Emperor, which defines the boutique, and its essence of inclusion. Style Studio is added to the overall name to suggest that women can come to the boutique to learn about themselves and experiment with their personal style. By combining these two meanings, Royal Stitch Style Studio semms to be the leader in providing exceptional service and assistance for women's fashion needs. The elegance of the name suggests the types of clothing and accessories that will be featured. BRAND PERSONALITY Innovative | Stylish | Contemporary | Modern | Fresh | Approachable | Elegant | Cultural The overall brand personality of Royal Stitch aspires to be fashionable, customer-oriented, innovative, refreshing, stylish and educational. The boutique is a place where women can go to transform themselves with beautiful clothes and take advantage of the Style Assessment and other services that help them determine the right clothes for their unique selves. We are a shop that educates. We help women learn about the designers, gather with their friends, and have fun during the process. We not only carry items that help them look good, but we also help our customers maintain these items.

Promotional Plan:
With respect to our strategies from which we make objective, our launch will start with teasers around the city in the form of billboards on major locations of the city. This will then be followed by a main billboard design that will have our advertising message and original color theme. Press and Magazine advertising shall at once be our first advertising campaign that shall be placed in popular magazines such as Pink, Visage, Libaas, She, Sensation, Women’s Own and Zinq. Major newspapers such as Dawn, The News and the Nation will contain our press ads highlighting details of our outlets. The initial campaign shall last for 3 months after which no more advertising will be done for our brand. Our advertising will depend on our brand champions and advocates (satisfied customers) using the pull effort. With word of mouth and social networking marketing, mainstream advertising will not be required. Calendar and non-calendar based strategy for below the line activities like fashion shows will also be practiced.
Promotion Summary: The following promotional tactics for generating buzz and awareness about Royal Stitch will be implemented: • Personal selling and word of mouth via networks of friends, stylists and customers • Unique visual displays in storefront on a weekly basis • PR (local and national) • Boutique email newsletters • Direct mail such as postcard notices that are targeted specifically to the customer • Sales Promotion such as store events.

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• • • • • •

Royal Stitch Web Site Advertising will be at a minimum with regular ad placements in the Magazine’s Fashion Shows Magazines cover pages. Advertising on Facebook Affiliation with

Other important marketing strategies, such as developing strong customer relationships (retention), will utilize a different mix of marketing programs. Promotional Tools TV Cable TV No Press Dailies Magazines / Periodicals No Pink Visage Libas Women Magazine Vogue She Radio FM Outdoor Hoarding No

Airport Teen Talwar Zamzama
No No

30*60 20*60 20*60

Vehicles Pole Signs + Banners Internet Web Banners Others Non Traditional Media expense 1100; including registration and

maintenance per year.

BTL Communication Vehicles Event Based Non Calendar Events Calendar Event Non Event Based Floats, Stalls etc. Participating in shows such as Pakistan fashion week and Karachi fashion week, Charges are contigency Arranging shows on valentines day, Eid etc. cost allocated by outside event management company No

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Budget: Monthly

Pink Visage Libas Women Magazine Vogue She

Khi Khi Khi Khi Khi Khi

Full page Full page Full page Full page Full page Full page

Inside Inside Inside Inside Inside Inside

Color Color Color Color Color Color

1.00 1.00 1.00 1.00 1.00 1.00

2000 80,000 80,000 25,000 80,000 25,000

Billboards Media Plan for October 2010
Area Size Cost 280,000 115,000 115,000 510,000 591600

Airport Teen Talwar Zamzama
Grand Total

30*60 20*60 20*60

Total with 16% GST

Launch Party Sending Newsletter Promotions Gift Events Facebook Ad

Other Expenses Budget 2,000,000 Show at PC 50,000 100,000 1,000,000 50 dollar for 1 day: 50*83*30 for starting 1 month =124,500 PKR

55% of

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respondent, which are already purchasing outfits from different boutiques with a 117 thousand income, agree, "When we asked will you purchase an outfit which is unique and no can have it than really they want something, as they said yes price is no object. At Royal Stitch Style Studio, we are very committed to bringing high quality clothing to women and the prices will reflect a range of mid-to-high pricing. Average price points will be around Formal Casual Party Wear Bridal 7,950 1,250 4,850 81,250

It is recommended that the proposed location for the said enterprise be a posh area, where people have the buying capacity for women fashion wear. As the idea of business is very unique Royal Stitch Style Studio will be located in an upscale neighborhood in Karachi. A significant proportion of the target market lives in this area. Royal stitch will work with the local merchants association as well as local publications to generate PR and shopping in the neighborhood. Royal Stitch will also attract women from throughout other Karachi neighborhoods as well as the few women who come to Karachi from out of town to shop. As we don’t need to have random customers we have chosen Pearl Continental Hotel as a location a shop will be taken there on rent. The size of the shop would be at least 300 Sq.ft approximately 20 feet front and 15 feet depth. Furthermore, a small place will be required to establish the stitching unit. One viable option is to rent a small place for this purpose because the stitching cannot be done in PC as it will only be our selling point. The shop will be obtained on rental basis, and the rent for the shop is Rs. 125 per sq.ft that is 37500 and 16 percent GST will be charged on the rent that will be 6000. According to the prevailing practice, six months rent as security, as security would be required for renting the shop so security deposit will be given and one month rent. It is assumed that security deposit is a one-time expenditure whereas rent will be paid on monthly basis. The cost estimates for setting up the Boutique are as follows:

Security for renting shop is 6 months rent (Rent Rs.37,500 per month plus 16% * 6 months rent as security) Interior decoration (installing lighting, mannequins, hanging racks, mirrors, glass panes, cash counter, and other furnitures, etc.)

261,000 500,000

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Rent for the stitching unit (Rent @ Rs30,000 per month)


Shop and Stitching unit Design The project will have the following infrastructure components: INFRASTRUCTURE REQUIREMENTS Main shop covered area Try room Shop floor Building for stitching unit Sq .fts 300 10 (2rooms) 280 1000

The process for converting fabric in designer wear garments follows the below mentioned sequence: Design: The initial process starts from the designing phase. Various patterns of clothing and the fashions in vogue, which also relate to the tastes of the concerned clientele, are designed. The contracted designer as does this he/she will provide the basic designs of which the fabric will be converted into the designer wear garment. On average, a designer is supposed to provide 40 designs per month or 100-120 designs per season i.e. three months. From these designs, approximately 50% of the designs are selected for further development of clothes. Pattern Making/Cutting: Based on the designs selected, patterns for cutting are developed and based on these patterns, fabric is cut, embodied, block printed, and processed accordingly. Stitching: The cutting is followed by stitching of fabric, which can either be done by the in-house stitching unit or by outsourcing it. Labeling Labels are also attached to the apparels in the process of stitching.

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Finishing: The final phase is that of finishing, in which the garment will be checked for quality control and will cleaned (if required) for final presentation at the outlet. The garments will also be tagged for identification of sizes, prices, addresses, handling instructions, etc. Presentation/Market: Once the designer wears garment is ready after going through the above-mentioned process, it is presented at the outlet/shop for sale to the clientele.

Pattern making / cutting


Market / Clientele


Human Resource Plan
We will be recruiting and selecting people who are well qualified and possess numerous skills within their respective fields. They will be working on our predefined quality assurance standards. There will be strict policies on which we will shortlist applied candidate and finally form a proper workforce.

Employment structure Year 1, 2 3, 4 & 5) Employee Structure in Royal Stitch Style Studio:
Employees Required Sales H.R Plan Cost Per Employee 1


Total 7000 Per

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representative Manager Purchaser Designer Accountant Tailor Peon 1 1 1 1 1 1 15000 12000 40,000 12,000 35000 6000

Month Per Month Per Month Per Month Per Month Per Month Per 6000 Month 1500 0 1200 0 4000 0 1200 0 3500 0

Job Descriptions:
Sales representative:

Job Description

The main task of a sales representative is to sell the products design by the boutique.

Essential Duties
• • • • • • • • A sales representative must perform the following duties and responsibilities: Solicit orders from new and prospective customers in a certain geographical area Provide samples, and illustrations of the company's product line Handle product inquiries of clients Listen to customer concerns Address product-related issues Enlarge client base by developing excellent customer relations Survey, analyze and prepare proposals for new prospects and old clients

Manager Job of the manager is to resolve the problems, which a customer may have. Keep a check on the employees. Essential Duties:

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• Supervise Maintenance and keep a check on overall performance of other employees and security guards. • Cash inflow and out flow management. • Feedback from customers • Lead and motivate all employees • Control any crisis situations. Experience: Minimum two years of experience in a customer service centre with good communication skills and appearance. Knowledge and skills required: • • Self Motivator. Communication Skills

Education: Bachelors with Cambridge schooling. Accountant Accountant should have a perfect knowledge of keeping the books of accounts and posses a suitable degree of Accountancy. Key Responsibilities: • • • • To keep the proper books of accounts. To keep an account of the daily cash expenses and ( Cash inflows and Out flows) To make all the financial statements required Making bills

Qualification: • Peon: He will be serving Tea, Coffee and snacks to the customers Designer: Designing the clothes and materialize her imaginations for the customers that have unique sense of styling. Must possess an Bachelors degree (B.COM).

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Tailor: He will be stitching the clothes as directed by the designer , he will be available all day so that if there is any alteration he can alter it for the customer. Purchaser: The purchaser will be getting everything from the market for the clothes for example laces , buttons , fabric , cloth dying etc. Recruitment procedure Every candidate will go through a comprehensive test regarding the job nature; all of them will be tested practically and would be selected on the basis of their skills and knowledge. Training Development: After Selection a comprehensive training would be provided so to ensure quality standards for a better working environment.

Critical Risk Analysis
Critical Risk Analysis ITEM No Clients




2 2 2 6 7

10 8 5 6 8


Copy of designs

Rental insecurity Political situation (Strikes)

15 9 3

Power Breakdown

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No Clients: As we did the survey and according to that 55% of ladies purchase their dresses from boutique where as almost 95% of female responded that they would be interested if a dress is specially made for them so there are very little chances that there will be no clients so we took the likelihood of this situation as 2 and if it happens than of course there will be no business so consequences is rated as 10. Back Up plan: High promotion and advertisements will be done so that everyone can know about our business and come to us. Copy of designs: As our business is all about uniqueness so if someone gets successful in copying our design it will be a problem for our business. so for this we will not advertise our designs and make animated ads for our business. Backup plan for copy of our designs: For this problem we will not advertise our designs and make animated ads for our business. Rental insecurity: As the shop is on rent so that is an insecurity that the shop might have to be vacated on the demand of owners. As we are taking the shop in PC so they will be doing contract so the likelihood of happening of such situation will be less so we took it 2 and if this happens of course it will affect our business so consequences are marked as 5. Backup plan for rent insecurity: We will do the contract for atleast two years and if after that ye have to vacate the shop we will shift to Marriot. Political situation (Strikes) As we know that in Pakistan political situations are going worst day by day so the likelihood of its occurrence is marked 6 where as the consequences are 6 as well because the business will remain closed and suffer loss. Back up plan for Political situation:

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Employees will stay at the workplace and keep working on the strikes day. Power Breakdown: There is a great shortage of electricity in Karachi, we won't have any problem with this issue at the shop located in PC but the place where the production is taking place will stop if electricity is not there. The likelihood is 7 and consequences are 8. Backup plan for power breakdown: We will have a complete arrangement of generator by which on only the sewing machines will work but the relates items needed such as iron etc will also work.

Exit Strategy:
Every business has chances of having problems once it comes into existence, as our business is not a very complicated so if it faces any problem we will have backup plan for handling the situation. Following can be the problems that our business can face: Copy of Designs: As the concept of our business is uniqueness so it will be necessary for us to protect our designs from getting copied because if they will be copied they will their value. Changing fashion and trends: As the fashion industry is changing day by day and new fashions are coming in so it can be possible that if we don’t design according to changing fashions we will have to close down because no one will be willing to buy old designs. Culture and Environment: As we are making clothes also for people who are modern and wear western type of clothing, which is not our culture, so this might create a problem for us from the side of religious extremist Political instability: As there is a lot of political instability in our country so this might affect business by the strikes and other issues. Back up Plans: Copy of Designs: For saving our designs we will not hang all the designs in our outlet and mostly make clothes on

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order. We will not print any catalogue or booklets through which people can copy our designs and even the ads in the magazine will be animated so that no One can copy our designs. Changing fashion and trends: As we have stepped into this business so we are prepared for this changing fashions and trends so to overcome this problem we will be looking all upcoming and current fashion trends in detail and design our collection according to that. Furthermore we will also send our designer abroad for training and development.

Culture and Environment: To save from the consequences of any party which may go against our western design we will not advertise revealing dresses. Political instability: As there would be strikes due to political unrest our shop is in PC so it would hardly affect our business and we will also tell the workers to stay in the working area and work there even if its holiday in this way our production will not stop and we will also deliver the clothes to the client if the situation allows us. Fight or Flight: As our business is not a very complicated one so the problem it will face will also be manageable and as we have made back up plans so we will fight if any such problem arises.

June 01: Designing of clothes will be started. June 30: Purchasing fixed assets of stitching unit July 1: Stitching building July 15: Fashion Show July 16: Billboards & shop availability July 17-29: Renovation of shop July 28: Newsletters to people about opening on 1st July and others ads Aug 1: Inauguration party Facebook ads and other promotions.

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Financials and Sales Figures:

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Initial Investment
initial Balance sheet Assets Fixed Assets 1,661,300 Loan 80% 4,106,096 Liabilities

Cash for Marketing Rent Advance for Material

3,058,100 261,000 152219.9333 Capital 20% 1,026,524





Amortization of Loan

Page 30 of 53 Loan Amount Tenure Rate Discount Factor Installment Amount
Formula Year 0 1 2 3 4 5 1,254,040 1,254,040 1,254,040 1,254,040 1,254,040 656,975 561,445 450,630 322,084 172,971 597,065 692,595 803,410 931,956 1,081,069 IA Interest Payments P.Remainig 4,106,096 3,509,031 2,816,436 2,013,025 1,081,069 -

4,106,096 5 16% 3.2743

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Partners Share Equity Holder Partner 1 Partner 2 Partner 3 Total % 35% 35% 30% 100% Share 359,283 359,283 307,957 1,026,52 4 2010-2011 72,399 72,399 62,056 206,853 Yearly Share 2011-2012 2012-2013 1,246,673 2,052,767 1,246,673 2,052,767 1,068,577 1,759,515 3,561,923 5,865,050 2013-2014 3,337,691 3,337,691 2,860,878 9,536,261 2014-2015 6,325,648 6,325,648 5,421,984 18,073,279

Fixed Asset
Stiching Asset Sewing Machine single needle Over lock Stitch Machine Unit 4 1 Rate 10,000 50,000 Amount 40,000 50,000 Life 5 5 Depreciatio n 8,000 10,000 Monthl y 667 833

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Acessories Total

1 6

50,000 23,333

50,000 140,000


10,000 28,000

833 2,333

Admin Telephone Computer and Printer Computer (Table and counter Fire System Computers for Designer Total

Unit 2 1 1 1 4 9

Rate 2,500 35,000 10,000 50,000 50,000 33,333

Amount 5,000 35,000 10,000 50,000 200,000 300,000

Life 2 3 2 5 3

Depreciation 2,500 11,667 5,000 10,000 66,667 95,833

Monthly 208 972 417 833 5,556 7,986

Shop Asset Energy Savers Security Cameras L.C.D 52"*

Unit 80 3 1

Rate 210 56,000 228,500

Amount 16,800 168,000 228,500

Life 2 3 5

Depreciation 8,400 56,000 45,700

Monthly 700 4,667 3,808

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Sound System* Shelves Display Shelves Dummy Interior renovations Suit Iron Ac Total

1 3 4 6 1 1 2 102

50,000 10,000 14,000 8,000 500,000 70,000 27,000 11,974

50,000 30,000 56,000 48,000 500,000 70,000 54,000 1,221,300

5 5 3 5 2 4 3

10,000 6,000 18,667 9,600 250,000 17,500 18,000 439,867

833 500 1,556 800 20,833 1,458 1,500 36,656

Grand Total






Expense for 2010-2011
2010-2011 manufacturing Cost Labor Oh Op&Selling Monthly 192,000 116,500 346,508 Yearly 2,304,000 1,398,000 4,158,100 % 100% 82% 0% Allocation 2,304,000 1,140,000 -

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Depreciatio n Total

36,656 655,008

439,867 7,860,100 2010-2011

80% 44%

351,893 3,444,000

Cost Labor Admin Oh Op&Selling Depreciatio n Total

Monthly 192,000 116,500 346,508 36,656 655,008

Yearly 2,304,000 1,398,000 4,158,100 439,867 7,860,100

% 0% 18% 100% 20% 56%

Allocation 258,000 4,158,100 87,973 4,416,100

Expense for 2011-2012
2011-2012 manufacturing Cost Labor Oh Op&Selling Yearly 2,534,400 1,537,800 1,486,200 % 100% 82% 0% Allocation 2,534,400 1,254,000 -

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Depreciation Total

563,700 5,558,400

80% 68% 2011-2012

450,960 3,788,400

Cost Labor Admin Oh Op&Selling Depreciation Total

Yearly 2,534,400 1,537,800 1,486,200 563,700 5,558,400

% 0% 18% 100% 20% 32%

Allocation 283,800 1,486,200 112,740 1,770,000

Expense for 2012-2013
2012-2013 Cost Labor manufacturing Oh Op&Selling Depreciatio 1,691,580 1,534,820 567,700 82% 0% 80% 1,379,400 454,160 Yearly 2,787,840 % 100% Allocation 2,787,840

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n Total 6,014,240 69% 2012-2013 Cost Labor Admin Oh Op&Selling Depreciatio n Total 1,691,580 1,534,820 567,700 6,014,240 18% 100% 20% 31% 312,180 1,534,820 113,540 1,847,000 Yearly 2,787,840 % 0% Allocation 4,167,240

Expense for 2013-2014
2013-2014 Cost Labor manufacturing Oh Op&Selling Depreciatio 1,860,738 1,588,302 567,700 82% 0% 80% 1,517,340 454,160 Yearly 3,066,624 % 100% Allocation 3,066,624

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n Total 6,515,664 70% 2013-2014 Cost Labor Admin Oh Op&Selling Depreciatio n Total 1,860,738 1,588,302 567,700 6,515,664 18% 100% 20% 30% 343,398 1,588,302 113,540 1,931,700 Yearly 3,066,624 % 0% Allocation 4,583,964

Expense for the Year 2014-2015
2014-2015 Cost Labor manufacturing Oh Op&Selling Depreciatio 2,046,812 1,647,132 571,700 82% 0% 80% 1,669,074 457,360 Yearly 3,373,286 % 100% Allocation 3,373,286

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n Total 7,067,230 71% 2011 Cost Labor Admin Oh Op&Selling Depreciatio n Total 2,046,812 1,647,132 571,700 7,067,230 18% 100% 20% 29% 377,738 1,647,132 114,340 2,024,870 Yearly 3,373,286 % 0% Allocation 5,042,360

Product Detail:

Product Details
Serial # 1 2 3 4 5 6 7 8 9 10 Serial # 11 12 13 14 15 16 17 18 19 Name Royal Formal Valvet Collection Royal Formal Gourgette Collection Royal Formal Shffon Collection Royal Formal Cotton Collection Royal Formal Silk Collection Royal Formal PC Collection Royal Formal Crepe Collection Royal Formal Organza Collection Royal Casual Cotton Royal Casual Lillen Name Royal Casual Crepe Royal Party Valvet Royal party Silk Royal party Crepe Royal party Organza Royal Bridal Fashion Royal Traditional Bridal Royal Classical Bridal Royal Modern Bridal Category Formal Formal Formal Formal Formal Formal Formal Formal Casual Casual Category Casual Partwear Partwear Partwear Partwear Bridal Bridal Bridal Bridal Type Type1 Type2 Type3 Type4 Type5 Type6 Type7 Type8 Type1 Type2 Type Type3 Type1 Type2 Type3 Type4 Type1 Type2 Type3 Type4 Description

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Valvet Used for Shirt and shalwar is from (Cotton, Silk and Gourgette) and dupatta is of (Cotton, Silk and Gourgette) Gourgette Used for Shirt and shalwar is from (Silk and Gourgette) and dupatta is of Gorjette Shiffon Used for Shirt plus slip (Shameez) and shalwar is from (Silk and Gourgette) and dupatta is of Shifon All Shirt, Shalwar and Duppata is from cotton Silk Used for Shirt plus slip (Shameez) and shalwar is from (Silk) and dupatta is of Shiffon and Gourgette All Shirt, Shalwar and Duppata is from polyester cotton Crepe Used for Shirt and shalwar is from (Gourgette) and dupatta is of Gourgette and Shiffon Organza Used for Shirt plus Slip and shalwar is from Silk, Gourgette and cotton and dupatta is of Gourgette, Silk and Shiffon Cotton Used for Top Lillen Used for Top Description Crepe Used for Top Short Dress Mexi Mexi Mexi Avg price of Fabric, Stones, Heaby Thread, Ulta Light Work Avg price of Fabric, Stones, Heaby Thread, Light Work Avg price of Fabric, Stones, Heaby Thread, Medium Work Avg price of Fabric, Stones, Heaby Thread, Heavy Work

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Cost Summary of 1st Year:

Year1 Formal Casual Partywear Brdial

Type1 2379 599 2113 27590

Type2 1832 696 1993 27122

Type3 2470 746 1553 27122

Type4 2300

Type5 1492

Type6 1492

Type7 1662

Type8 1662

Total 15288 2041

Avg 1911 680 1858 27306

1773 27392

7430 109224

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Production Capacity:
For stitching unit From 12:30:00 PM For shop From 12:30:00 PM To 5:00:00 PM Unit Formal Casual PartyWear 1 0.01 1 From 5:30:00 PM Per day 0.015 To 10:00:00 PM Discription 13.0 Hours 1 9 hours 260 0.01 Working hrs 1month 9 20 hours fomal in a month Total Hours 9.00 To 5:00:00 PM From 5:30:00 PM To 11:00:00 PM Total Hours 10.00

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Bridal Total machines 1 4 0.01 36 26 hours days in month 29 29 Casual in a month Partywear

Maximum Production:

50% increae Production Formal Casual Party Wear Bridal

50% increae year 13-14 444 624 520 74

Year 10-11 296 416 347 49

year 11-12 296 416 347 49

year 12-13 444 624 520 74

year 14-15 592 832 693 98

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Sales Strategy:
We sale according to the demand pattern Since we assume that 2% of our target will be our 1year customer from there it will increase

Target Market




Year 10-11 Sales Production Sales % 850 1108 77%

year 11-12 1000 1108 90%

year 12-13 1200 1662 72%

year 13-14 1500 1662 90%

year 14-15 2200 2216 99%

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Sales Units:

Summary Formal Casual Partywear Bridal

Year 10-11 227 319 266 38

year 11-12 267 376 313 44

year 12-13 321 451 376 53

year 13-14 401 563 469 66

year 14-15 588 826 688 98

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Revenue Year1:

Year 1

1. Year One Revenue Expectancy

1 Formal

2 Casual PKR 1,063,992

3 PartyWear PKR 2,580,181

4 Bridal PKR 6,123,495

Annual revenue per financial product

PKR 1,805,615

Total year one product (noninterest) revenue

PKR 11,573,283

3. Annual Tax Rate


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Revenue Year 2

Year 2

1. Year One Revenue Expectancy

1 Formal

2 Casual PKR 1,376,931

3 PartyWear PKR 3,339,057

4 Bridal PKR 7,924,524

Annual revenue per financial product

PKR 2,336,678

Total year one product (noninterest) revenue

PKR 14,977,190

3. Annual Tax Rate


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Year 3:

Year 3

1. Year One Revenue Expectancy

1 Formal

2 Casual PKR 1,817,549

3 PartyWear PKR 4,407,555

4 Bridal PKR 10,460,371

Annual revenue per financial product

PKR 3,084,415

Total year one product (noninterest) revenue

PKR 19,769,890

3. Annual Tax Rate


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Year 4:
Year 4

1. Year One Revenue Expectancy

1 Formal

2 Casual PKR 2,499,129

3 PartyWear PKR 6,060,389

4 Bridal PKR 14,383,010

Annual revenue per financial product

PKR 4,241,071

Total year one product (noninterest) revenue

PKR 27,183,599

3. Annual Tax Rate


Year 5:

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Year 5

1. Year One Revenue Expectancy

1 Formal

2 Casual PKR 4,031,929

3 PartyWear PKR 9,777,427

4 Bridal PKR 23,204,590

Annual revenue per financial product

PKR 6,842,261

Total year one product (noninterest) revenue

PKR 43,856,206

3. Annual Tax Rate


Profit and Loss Statement:
Months Year 10-11 year 11-12 year 12-13 year 13-14 year 14-15

Page 50 of 53 Revenues Formal Casual PartyWear Bridal Total Sales Less COGS Formal Casual PartyWear Bridal Total COGS Gross Profit Less Expenses Labor Cost OH Marketing Depreciation EBIT 2,304,000 1,398,000 4,158,100 563,700 975,211 2,534,400 1,537,800 1,486,200 563,700 6,041,327 2,787,840 1,691,580 1,534,820 567,700 9,473,783 3,066,624 1,860,738 1,588,302 567,700 14,993,255 3,373,286 2,046,812 1,647,132 571,700 27,978,015 434,018 217,187 494,091 1,028,975 2,174,271 9,399,011 561,670 281,066 639,412 1,331,615 2,813,763 12,163,427 741,404 371,007 844,024 1,757,732 3,714,167 16,055,723 1,019,431 510,135 1,160,533 2,416,881 5,106,980 22,076,619 1,644,682 823,017 1,872,327 3,899,235 8,239,261 35,616,946 1,805,615 1,063,992 2,580,181 6,123,495 11,573,283 2,336,678 1,376,931 3,339,057 7,924,524 14,977,190 3,084,415 1,817,549 4,407,555 10,460,371 19,769,890 4,241,071 2,499,129 6,060,389 14,383,010 27,183,599 6,842,261 4,031,929 9,777,427 23,204,590 43,856,206

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Less Interest EBT less Tax EAT/ Net Income

656,975 318,236 111,383 206,853

561,445 5,479,882 1,917,959 3,561,923

450,630 9,023,153 3,158,104 5,865,050

322,084 14,671,171 5,134,910 9,536,261

172,971 27,805,044 9,731,765 18,073,279

Balance Sheet:

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Assets Current Assets Cash Secuirity Total current assets Fixed (Long-Term) Assets Other Fixed Asset Depreciation Net Worth Total fixed assets Total Assets Liabilities and Owner's Equity Current Liabilities Tax Payable Total current liabilities Long-Term Liabilities Long-term debt Less Payment Net Worth Total long-term liabilities Owner's Equity Owner's Capital Retained earnings Drawings Owners Equity Total Liabilities and Owner's Equity

yr 2010-2011 3,382,748 261,000 3,643,748

yr 2011-2012 6,788,227 261,000 7,049,227

yr 2012-2013 11,675,859 261,000 11,936,859

yr 2013-2014 20,022,785 261,000 20,283,785

yr 2014-2015 36,444,302 261,000 36,705,302

1,661,300 563,700 1,097,600 4,741,348 4,741,348

1,097,600 563,700 533,900 7,583,127 7,583,127

1,085,700 567,700 518,000 12,454,859 12,454,859

1,031,000 567,700 463,300 20,747,085 20,747,085

1,085,100 571,700 513,400 37,218,702 37,218,702

9,282 9,282 4,106,096 597,065 3,509,031 3,509,031 1,026,524 206,853 (10,343) 1,223,035 4,741,348

159,830 159,830 3,509,031 692,595 2,816,436 2,816,436 1,223,035 3,561,923 (178,096) 4,606,862 7,583,127

263,175 263,175 2,816,436 803,410 2,013,025 2,013,025 4,606,862 5,865,050 (293,252) 10,178,659 12,454,859

427,909 427,909 2,013,025 931,956 1,081,069 1,081,069 10,178,659 9,536,261 (476,813) 19,238,107 20,747,085

810,980 810,980 1,081,069 1,081,069 19,238,107 18,073,279 (903,664) 36,407,722 37,218,702

Initial Year Investment -5132620 2010-2011 0 2011-2012 -551800 2012-2013 -513000 2013-2014 -621800 2014-2015 0

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C.f from Investing Activities Net profit add: dep Ocf Increase in C.L Payment of loan NCF Wacc Disc Use 17.52 DCF II DCF NPV IRR -5,132,620 1.00000 (5132620) (5,132,620) 20490513 $15,357,893 67.82 67% 92078.79318 Profit Index 3.99 0 -5132619.933 0 206,853 563,700 770,553 9,282 -597065 182,770 0.85092 155523 -551800 3,561,923 563,700 4,125,623 150,548 -692595 3,031,776 0.72406 2195197 IRR 68% -20364.82384 %+ (H.V-0) / (H.v-L.v) IRR 67.82 -513000 5,865,050 567,700 6,432,750 103,345 -803410 5,219,685 0.61612 3215947 -621800 9,536,261 567,700 10,103,961 164,734 -931956 8,714,939 0.52427 4568959 0 18,073,279 571,700 18,644,979 5,863,415 -1296836 23,211,558 0.44611 10354887