Chapter I

History and Position to Date

1.1 Business Purpose and Aims

Our purpose is to responsibly provide services by captivating customer

experiences that drive long-term loyalty. To do so we have set short term and long
term goals which are listed below:

Short term

Our short-term objective is to make people aware about our brand through
advertising and gain their trust by providing quality materials. We plan to provide
these services within Kathmandu valley only especially targeted to youngsters.

Long term

Our long-term objective is to retain our existing customer and increasing our
customer base by providing them valuable service and being updated with new
trend and fashion. Diversify our services into baby clothes and formal clothes and
also to help our society by contributing in different social works.

1.2 Description of the Business

Our business aims to fulfill needs and wants of consumers by providing the goods
and services i.e. clothes online all in one place for ease of access to consumers to
get their desired goods without hassle.

1.3 Description of Product and Services

Our business is a form of electronic commerce which allows consumers to

directly purchase clothes from us over the internet using a web browser.
Consumer can also view photos or images of the products, along with information
about the product specifications and prices in our website. Our website also
enable consumer to use search features to find a specific clothing items.

1
 Chapter II

Market Research

2.1 Customers

The main different types of customer for our product and service are described
below:

Current targeted customers:

 Youths: Our main target customer is youths. So we will be focusing on

having clothes like jeans, T-shirts, skirt, party wear, formal dress and so
on of different color and designs. We will also look at current trend in
fashion and provide such items. We will concentrate on youths as it is one
of the prime markets in fashion industry. Youths are more fashion
conscious so they are more focused on current trend going in the market
and need clothes accordingly. Also the populations of youths constitute
the highest percentage of population so there is big potential in this
market. Nepali Youth in Figures, December 2014 highlights data specific
to youth in Nepal is 40.33% of total population.

Future targeted customers:

 Men: For all gentlemen we will provide the clothes like pant, shirt, daura
surwal, kurtas, dhaka items and so on according to the demand and needs.

 Women: We will also provide women clothing in future. We will be

focused on providing all kind of apparels ranging from sari, lehenga,
kurta,etc. As different occasions require different types of clothes we will
provide different clothing according to the taste and preferences.

 Kids: We are also planning to provide kids clothing in future. Nowadays,

parents are more conscious about the dress up of their kids. They want to
make their darling daughter cute and beautiful while for their charming
son to look smart. So we will facilitate the respective clothes for kids.

2
2.2 Competitors

The businesses with which we will be competing directly are:

 Online stores:

a) https://www.clothesnepal.com/: Clothesnepal.com provides free delivery

to purchases that are above Rs 950 and gives incentives to customers who
purchase in bulk as they will not incur additional delivery cost.

b) http://www.a2zkapada.com/: A2Zkapada.com focuses on B2B selling i.e.

the website has clothes from various manufacturers and retailers so
customers can easily be in contact with different manufacturers in single
portal.

c) http://www.ufonepal.com/: UFO Nepal is one of the renowned clothing

stores in Nepal with its branches in various locations. In its website
customers can surf various apparels and shop as per their need. As UFO is
a renowned brand customers would be attracted to buy from there.

 Brick and mortar stores: Different malls and shopping centers like Gossip
Queen, Sunkesri, PJ’Z Collection and various other retail shops are also
our competitors. As these businesses are established and they have brand
recognition as well as customer base we will have to focus on providing
good quality products in affordable price to compete with such stores.

2.3 Plan for Market Research

We plan to undergo desk research and field research to get necessary data to find
out more about customers and competitors.

 Desk Research: The desk research will be done by the partners using
internet resources to find out about the customers, competitors and also
about the products and services and trends of fashion in the market
currently. Fashion trend are rapidly changing so it is necessary to know
about the fashion trend and also predict on what might be the next trend to
forecast and sell product accordingly.

3
 Field Research: Along with the desk research we will also need to conduct
field research to get the required information from the market. Field
research is necessary specially to know about customers and also about
competitors. Field research will help us to know more accurately and more
precisely about customers their needs and also about their expectations
whereas few key information about competitors like their strengths,
weakness can be known more deeply with help of field research.

4
 Chapter III

Competitive Business Strategy

3.1 Pricing

Pricing is one of the key factors that are necessary to maximize profit and to earn
maximum revenue. There are mainly 2 price strategies that can be followed which
are:

i. Price Penetration: Price penetration strategy tries to capture markets

slowly where first a good or service has low price then it is increased
gradually as firm gets more sales and brand image. This strategy is used
by most firms to attract consumers by giving low price in first and then
increasing price.

ii. Price Skimming: Price skimming strategy is just the opposite of price
penetration strategy where a firm sets a high price of a product initially
then it decreases the price slowly as more units are supplied in the market.
This strategy is used for exclusive products or services to give customers a
feeling of exclusiveness and a sense of pride of bearing that product or
service.

We will go with price penetration strategy as we have to compete with other firms
so we plan to provide our product at as low price as possible at start then
gradually increase price as our brand image increases.

3.2 Advertising and Promotion

For advertising we have planned to advertise our business on social media, online
and also with event tie-ups. As advertising on traditional media like newspaper,
TV etc are more costly and less effective these days so we have decided to go for
social media promotion which is a powerful tool of advertisement nowadays. Also
as our primary target consumer is Youths social media is the best platform to
advertise our product and services. Various online advertisements can be used like
popup ads in various popular sites that youths visit to attract them to purchase our
products and services.

5
3.3 Place and Distribution

Our main focus will be to supply our product and services inside Kathmandu
Valley in starting phase then we plan to extend our products and services outside
of Kathmandu Valley also in the future when we have increasing customer base
outside of Kathmandu Valley.

As for distribution we will have delivery van to deliver the products to the
customers inside Kathmandu Valley. We will be having a collaborative
Transaction Processing System (TPS) that will connect our company with
suppliers who can then supply the products to the customers. In initial phase we
will have collaboration with suppliers where suppliers will supply us the ordered
goods and then we will supply the goods to the customers. This is done to ensure
that right good with proper quality is sold to the customers. In the long run the
supplier can directly supply the goods to the customer when there is good supplier
and customer relationship established. A simple diagram is shown below to
describe this process:

Orders online
Customer S-Cube Clothing

Link our business Supplies goods

with the suppliers to us in short term

Supplier
In long run supplier can directly
supply goods to customers.

6
 Chapter IV

Operations

4.1 Selling Methods Plan

We are planning to sell our products directly to our customers without any
intermediary in between. Direct selling will help us to know more about our
customers; their taste and preference and also about geographic distribution about
the customers which information may not be available if we sell our product
indirectly through intermediaries. Direct selling also helps to reduce cost as we
will not have to pay commission to intermediaries. A figure is shown below to
explain this concept:

Orders goods online

Customer S-Cube Clothing

Goods are delivered

4.2 Making, Outsourcing and Supplies

In initial phase we will be outsourcing most of our processes to other as it will

save cost. Outsourcing activities will be more beneficial as it is better than making
products ourselves in initial phase. In long term we can manufacture clothes as we
have more brand value and image whereby manufacturing and selling the goods
can be more beneficial due to brand value. So we will be outsourcing most of our
processes in short term while we can produce goods in long term to increase
revenue.

4.3 People and Related Administrative Procedures

Along with suppliers who supply us goods to us we will also be working along
with a delivery person and IT specialist in our business. Delivery person is needed
to deliver the goods to customers timely and accurately. IT specialist is needed to
build our website and also design and implement the information systems
required for the business. The main administrative procedures included in
managing people are: hiring, managing and payroll which are explained briefly
below:

7
  Hiring: In first phase we will need to hire the required human resources. In
hiring process we must match the organization requirement with the skill
of the human resources available so that there is perfect career matching
and people remain motivated in their work.

 Payroll: After hiring the necessary human resources we also need to set
the payroll i.e. their wages along with the benefit plan to be given to the
human resources working with us.

 Managing: We also need to manage the human resources that are hired to
enhance their skill and to ensure that there is low turnover of human
resources within the organization to increase productivity of human
resources. Managing includes giving training, counseling, refreshment
activities etc which ensures that human resources feel motivated to work
in the organization.

4.4 Legal and Regulatory Factor Affecting Operation

The main legal and regulatory factor affecting our business will be license and
cyber law. The rule regarding license and registration of handicraft and clothing
business will affect our business and its operations. Additionally legal rules like
wages rule, company act etc will also affect our operations. We may need to pay
more wages and benefits to employees if payroll rule is changed by organization.
The cyber law directly governs the operations of our business. Any changes in
cyber law will directly affect our business as we will be operating online so cyber
law is the key governing factor.

4.5 Building a Website

IT specialist will design our website and we will plan and define the work to be
done by the IT specialist. We will mainly define components that should be
included in our website i.e. search, order and payment. IT specialists will have to
put the search field to simplify the searching experience. Also the IT specialists
will have to manage catalog and content management. Payment option is also
vital to customers. Easy payment is necessary so that customers can easily pay for
goods ordered. Customer will be able to pay online or also pay cash when goods
are delivered to customers.

8
4.6 Communications

Communication is important for us as proper communication is required between

customers and our organization and also between our organization and suppliers
to ensure smooth end to end communication so that customers get quality goods
on time. Proper communication ensures that we can view and confirm the goods
ordered by the customers on basis of which we can forward the request to the
suppliers so that suppliers can supply us the required goods to us. Communication
does not only ensure that there is end to end communication between customers to
the supplier it also ensures that the data of customers are kept secured in the
database so that we can forecast future data on basis of the recorded data. The
data can be stored in different computers and storage devices like hard disks to
ensure that data is kept secured about customers and their actions. This will
ensure that data is stored even if our database stops working or if there is any
problem in our server.

9
 Chapter V

Forecasting Results

5.1 Projected Income Statement

Year 1 Year 2 Year 3

Sales 450,000 478,000 423,360

Direct Cost of Sales 315,000 329,820 277,879

TOTAL COST OF SALES 315,000 329,820 275,282

Gross Margin 135,000 148,180 148,078

Gross Margin % 30% 31% 35%

Expenses

Payroll 35,000 35,000 45,000

Sales and Marketing and Other Expenses 50,000 40,000 30,000

Depreciation 10,000 10,000 10,000

10
Utilities 10,000 8,000 7,000

Other 60,000 0 0

Total Operating Expenses 157,000 93,000 92,000

Profit/Loss Before Interest and Taxes (50,000) 25,300 56,078

EBIT (50,000) 25,300 56,078

Dividend paid 0 0 (13,100)

Profit before tax (50,000) 25,300

Taxes Incurred 0 5,060 11,216

Net Profit (50,000) 20,240 34,360

Net Profit/Sales N/A 5% 8%

11
 5.2 Projected Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash 450,000 478,000 423,360

Inventory 15,000 13,000 8,000

Account Receivable 70,000 65,000 50,000

TOTAL CURRENT ASSETS 535,000 556,000 481,360

Long-term Assets

Delivery Bike 75,000 75,000 75,000

Accumulated Depreciation – Bike (10,000) (20,000) (30,000)

Delivery Van 900,000

12
TOTAL LONG-TERM ASSETS 65,000 55,000 945,000

TOTAL ASSETS 600,000 611,000 1,426,360

Liabilities and Capital

Current Liabilities

Accounts Payable 50,000 5,760 7,000

Other Current Liabilities 15,000 Nil Nil

SUBTOTAL CURRENT LIABILITIES 65,000 5,760 7,000

Long-term Liabilities 800,000

TOTAL LIABILITIES 65,000 5,760 807,000

Paid-in Capital 585,000 585,000 585,000

Retained Earnings 0 0 0

Earnings (50,000) 20,240 34,360

13
TOTAL CAPITAL 535,000 605,240 619,360

TOTAL LIABILITIES AND CAPITAL 500,000 511,000 1,426,360

5.3 Projected Cash Flow Statement

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales 450,000 478,000 423,360

SUBTOTAL CASH FROM OPERATIONS 450,000 478,000 423,360

Additional Cash Received

New Current Borrowing Nil Nil Nil

New Other Liabilities (interest-free) 65,000 5,760 7,000

New Long-term Liabilities Nil Nil Nil

14
SUBTOTAL CASH RECEIVED 515,000 483,760 430,360

Expenditures

Expenditures from Operations (395,000) (399,700) (307,879)

Cash Spending (117,000) (43,000) (52,000)

SUBTOTAL SPENT ON OPERATIONS (512,000) (442,700) (359,879)

Additional Cash Spent

Purchase Long-term Assets (75,000) Nil Nil

Dividends Nil Nil (13,100)

SUBTOTAL CASH SPENT (587,000) (442,700) (372,979)

Net Cash Flow (72,000) 41,060 57,381

Beginning Cash Balance 0 (72,000) (30,940)

Ending Cash Balance (72,000) (30,940) 26,441

15
 Chapter VI

Business Controls

6.1 Financial Controls

Control is necessary in organization to ensure that there is smooth operation of business

so that there are no flaws or errors in business processes. One of the fundamental
business controls is financial controls as finance is needed to start up business as well for
day to day operation of business so financial control is necessary in any business.
Financial control can be done with help of people as well as information resources.
Financial experts can be called upon time to time to assess the financial position of the
company and to check financial records to ensure that there is proper recordkeeping in
the organization. Internal and external control can help to ensure that business is in good
financial position and is able to manage its operations well. Accounting software like
Tally can help us to record and view the effect of each transaction can be recorded and
financial overview can be seen as per the need of the organization.

6.2 Sales and Marketing Controls

Sales and Marketing is also one of the basic business functions so managing sales and
marketing is also important. One of the key components that need to be managed is
managing customer records so that we can use the data to view and even forecast
customer behaviors. The customers can be divided into different segments according to
age, gender and even geography to know more deeply about their behaviors and patterns
so that we can easily know the class of customers and act accordingly to satisfy customer
needs and maximize profit. Sales force planning and managing marketing activities is
also necessary so that goods and services are delivered to customers timely. Managing
marketing activities will include planning and managing promotional activities like
advertisement and selling so that there is efficient distribution of our products in the
market and customers are aware of our services in the market.

6.3 Other Business Controls

In other business controls other business processes can be managed to ensure smooth
operation of business. One of the business controls that we will need is supplier control as
we are outsourcing our business activities of production to our suppliers we need to
closely monitor and guide our suppliers so we will be needing good supplier control.
Supplier control can include a simple communication and information system that can
show us how many goods are being made and the completion rate of the order so we can
track and relay that information to the customer as well ensuring smooth end-to-end
communication. Another business control that is necessary is website control. Website
control includes planning and managing the website. Website building is a collaborative

16
process between manager and IT specialists where managers have to define the
components to be included in website so that IT specialists include all the necessary
components in the website to ensure that the customers can easily search, view and also
order goods form the website. Website security is also essential as our business is e-
business website should be secured from any potential threats from hackers and intruders.
A proper backup of data and servers is necessary to ensure that website will be running
smoothly and there will be no any interruption in case of any natural and manmade
disasters. Website management will include updating catalogs, price and continuously
adding or managing the components of the website like design, banner etc to make
website more new and fresh to the customers.

17
References

 https://www.clothesnepal.com/
 http://www.a2zkapada.com/
 http://www.ufonepal.com/
 https://www.investopedia.com/

18