BUSINESS PLAN FOR

BOUTIQUE
CLIENT :- MESERET
CONTENTS
PAGE

1.0 Background of boutique......................................................................1

1.1 Location of the business...................................................................1
1.2. OBJECTIVE...................................................................................2
1.3 MISION...........................................................................................2
1.4 Nature of the business...............................................2
1.4.1Form of business...................................................2
1.4.2 Product and service nature...................................2
1.4.3 Business opportunities.........................................3
1.4.4 Establishing year........................................................................3
2.0 Analysis of business venture (boutique).............................................3
2.1 Past trend and future outlook of the industry...................................3
2.2 Competitive Advantage....................................................................4
3.0 Marketing plan....................................................................................5
3.1 CUSTOMER ANALYSES..............................................................5
3.2 Pricing Strategy................................................................................6
3.3 Promotion Strategy..........................................................................6
4.0 ORGANIZATIONAL PLAN.............................................................7
4.1 Legal Form of Ownership................................................................7
4.2 Roles and Responsibility of Members of the Organization.............7
4.3 ASSESMENT OF RISKS AND REMEDIAL MEASURE............9
5.0 Financial analysis..............................................................................10
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 5.1. Start-up capital..............................................................................10
5.2. Sources of start-up Capital............................................................11
5.3 Expected sales and profit...............................................................11

1. BACKGROUND OF THE BOUTIQUE

1.1 LOCATION OF THE BUSINESS
The boutique will be located in Addis Ababa city.
The boutique will situated in a building by renting shop as it is suitable
for transportation, street light, nearness to car station and other services
provided in buildings.

1.3 ECONOMIC BACKGROUND

The populations of Debre Berhan town are engaged in different
economic activities like service provision (cafe and restaurant, hotel,
club, transportation), manufacturing activities (food complex, flour
factory) and agriculture in the hinterland.
Generally, the location, demographic structure and economic activities
are suitable for business venture in different aspects like adequate
customer, basic infrastructure, and good weather condition.

1.4 OBJECTIVE
 To maximize boutique supply in general and satisfy consumers
consumption requirement in particular

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  To creating employment opportunity to the surrounding
community
 To provide the customer with high quality and quantity clothes
and shoes

1.5 MISSION
 Utilizing available resources
 Adopting to the dynamic environment throughout the operation
 Providing affordable living standard to its workers
 Supplying high quality clothes and shoes suitable for customers.

1.6 NATURE OF THE BUSINESS

1.6.1FORM OF BUSINESS
The boutique, which is a service providing business venture, is going to
be formed as sole ownership.
1.6.2 PRODUCT AND SERVICE NATURE
The Boutique brings highly qualified modern clothes and shoes that are
customer focused at affordable price with smart accommodation
services. Furthermore, the products are available to customer with their
preference that is in relation to age, sex, culture in different design.
The product of our business is industrial product. So, any firms who
have the potential and licensed by the government can undertake the
activities. The business will have good attitude on society; it doesn’t
affect the natural environment (pollution) and initiate people to purchase
the product as it is new.

1.6.3 BUSINESS OPPORTUNITIES

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 High population in the town which helps to get many
customers.
The presence of good market price
Politically stable environment
Geographical location advantage means that near to
capital city and availability of good infrastructure like
road.

1.6.4 ESTABLISHING YEAR AND NEEDED CAPITAL

The business venture will be established in October 2022 by birr

300,000 as starting capital obtained from own capital of the owner and
from borrowing.

2. ANALYSIS OF BUSINESS VENTURE (BOUTIQUE )

PRODUCT FORECASTP OF THE INDUSTRY

It is obvious that the clothes and shoes are among one of the basic needs
of human beings, so that individual is in need of some clothes and shoes
for survival, to maintain suitable condition with the weather condition,
for recreation and style, and other personal purpose so that there will be
expansion of the business at an alarming rate.
SMART boutique is going to be planned to introduce clothes and shoes
in different style. For example, in variety of size and color, model, up to
dated products accordingly.
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Analysis of competitors
The main competitors the boutique will face are
Local mini shopping trader.
Boutiques located arround.
Other boutiques in the town.
Strength of competitors
The strength of our competitors is that they have
High initial capital
Enough man power
Enough space for working.

Weakness of competitors
 Their service of time is limited
 Low customer service.

2.2 COMPETITIVE ADVANTAGE

The competitive advantages of our business venture are listed in the

following manner
 We provide quality clothes and shoes for our customers better than
our competitors
 Providing entertain customer service who are in different age level.

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  It addresses customers need with suitable price based on comment
and suggestion of the customers and according to the purchasing
power of customers.
 Self motivated workers.

3. MARKETING PLAN
3.1 CUSTOMER ANALYSIS

Our target customers will be

 Residents around the boutique.
 Walking customers.
 Other shop owners.
 Online custumers.
Most of our customer’s preference is good quality and sufficient
quantity of clothes and shoes. The demand of customers varies in age,
income level, sex and location areas so that the boutique reacts
accordingly to satisfy the customer demand.
Most of the time demand and supply do not balance each other. To
balance Supply with demand we must do a continuous assessment on the
number of our customer. We must identify the primary need of our
customers. We have to measure the daily, weekly, monthly and yearly
consumptions of the customer and compare with our products. By
carrying out this process we can balance demand and supply.

3.2 PRICING STRATEGY

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The basis for our boutique prices is the market price and cost-benefit
analysis. Even if our competitors have no so much strength, we may
reduce our price in order to attract and get our customers attention; as a
result we can increase our profit from large number of customers (by
selling more quantity of products). Actually the price of our product is
not below the market price; as a result, the boutique set the price of
clothes and shoes as the markets that are it fluctuates over the time with
market price. We also adopt price discrimination based on number of
sales, income level, ages or based on other criteria which is important to
maximize profit.

3.3 PROMOTION STRATEGY

Our promotion strategies will be applied using the following methods:-

- Business card is the most important ways to promote our
boutique for the following reasons
Easy to distribute
Cost effectiveness
Availability of printing press
- Additionally the business venture is going to be promoted via
digital marketing.

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 4. ORGANIZATIONAL PLAN
4.1 LEGAL FORM OF OWNERSHIP

The boutique business enterprises are a type of business in the form of

sole ownership. The reasons for the selection of this form of business is
simplicity to establish the business.
The overall operation or function of the business would be governed or
administered by the owner. The manager may be either one of the owner
or sometimes there may be needed to hire the manager from the outside
people that can fulfill the following criteria:
Have the knowledge of entrepreneurship.
Sociability.
Ability to manage others.
Risk taker and experienced.

4.2 ROLES AND RESPONSIBILITY OF MEMBERS OF THE ORGANIZATION

The role of the manager will be managing the overall activity of the business. That
is:-

Making decision regarding the state of business in the future.

Controlling the overall activity in the business.

Increase capital contribution.

Evaluating the quality of the products.

Making decision regarding purchasing and selling.

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Prepare receipt and receive cash

Daily sales report

Purchasing products from supplier

Undertaking market assessment like price.

Client server

Accommodate customers

Attracting of customers

Expected Organizational staff

Responsibility quantity Staff qualification

General Manager 1 (degree management)

Client server 1

Organizational structure

The organization will contain the following members:-

1. The management of the business

2. Permanent employees
3. Temporary employees

The permanent employees of the business consist of two workers. The three are
responsible for day-to-day activities of the business.

General Manager

Client server

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4.3 ASSESSMENT OF RISKS AND REMEDIAL MEASURE

The predetermined or expected risks are:-

Expiration of unsold some clothes and shoes.

Loss of income from expired item from getting out of trend.
Loss of customers.
Natural hazardous.
Shortage of supply (fluctuation of supply).
Fluctuation of market price (devaluation, inflation, deflation)

Measure taken as remedial measure

 Good customer accommodation

 Practicing fair market price
 Good storing of products
 Technology related method of controlling hazards like protecting fire

5. FINANCIAL ANALYSIS
5.1. START-UP CAPITAL
To start the business activity the business encountered with different types of costs.
Totally the cost of the business includes the following:-

 The cost of buying different cosmetics

 The cost of house (rent)
 The cost of working clothes
 The cost of living permanent employees

The supplementary financing is required to being work on site preparation,

products purchases, and to cover expense in the first year of operations. Items and
cost analysis of 1st round starting operation is listed as follow:

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 No Item of name Quantity Unit price in Total cost
birr in birr

1 Shoes 30 700 21,000

2 Trousers 66 600 39,600

3 T-shirt 50 400 20,000

4 Jacket 10 1000 10,000

5 Shirt 38 700 26,600

5 Employees 2 4,000+6,000 10,000

6 Rent(6 month) 65,000

7 Miscellaneous - 30,000 30,800

cost

8 Interior design 77,000 77,000

and work

Total 300,000

5.2. SOURCES OF START-UP CAPITAL

The sources of starting capital is:-

The business is going to be financed fully through a loan.

5.3 EXPECTED SALES AND PROFIT

Here are the expected sales, profit, cost and NPV in the coming few consecutive
years.

Year Items Expected sales Expected cost Expected net profit

incurred

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1st year Shoes 120 84,000 25,200

Clothes 500 400,000 120,000

Total 484,000 145,200
2nd year Shoes 1300 93,5000 94,000

Clothes 2800 119,500 120,000

Total 4100 213,000 214,000
3 year Shoes
rd
3000 160,000 175,000
Clothes 3700 243,000 250,000
Total 6700 403,000 425,000
The business is feasible.

Income statement

Smart boutique

Income statement

January 14, 2018

Revenue

Sales……………………………………………………………………….215,000

Expense

Salary expense………………………………………………………………………
48,000

Interest
expense…………………………………………………………………….16, 000

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Advertising
expense……………………………………………………………………….9, 000

Miscellaneous
expense………………………………………………………………………3,000

Rent expense………………………………………………………………….65,000

Total
expense……………………………………………………………………...141,000

Gross profit…………………………………………………………………………
74,000

EXCUTIVE SUMMERY
SMART Boutique business enterprise will be run as partnership among
Adanech , Ayele ,Abate, and Abiy ,Mesenbet and Mihret by 225,000 birr.
The SMART boutique offer high quality and quantity of shoes, trouser
and jacket and other related clothes for users and customers. The
product of the business will be available for sale at home and also sold
to retailers who sells in other markets.
The price set by the business, is fair market price or it should not exploit
customers or should not annoy customers. So that customers are willing
to pay. The business will provide its product at market price by
identifying and listing each type of services with their fair prices.
The activities included in this business are purchasing and selling of
high quality and modernized clothes and shoes and preparing store
houses where they stored whenever there is excess supply, auditing daily
sales of business, etc.

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The overall objective of the business is to provide high quality and
quantity products in order to get the expected profit and to satisfy the
consumer, and we would also have a claim to create job opportunity.
In the first year the business forecast a profit of birr 215,000. The
reason for obtaining such positive gaining or profit can be mainly
attributed to: The presence of good market price, limited strong
competitors, cheap labor force and absence of payment for suppliers
(transportation cost)
In the second year and 3rd year we expect and predict that there will be
increment of profit due to further increases in sale having advantage of
economies of scale.

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