This sample business plan is intended to provide you with a template that

can be used as a reference for when you’re hard at work on your plan. The
company is a completely fictional organic denim and apparel company,
however, we made sure the industry research was grounded in real world
numbers as much as possible. Let’s get started:

Executive Summary

I'll Be Denim is an organic denim clothing line headquartered in Los

Angeles that currently focuses exclusively on locally producing a slim fit,
straight fit, and regular fit line of jeans for men and women. Founded by
Elena Horowitz, a retail industry veteran with experiences at JCrew, the
Gap, and Levi’s, and James Foster, a serial entrepreneur, the duo is out to
bring socially conscious fashion to the masses.

Currently selling online and through partnerships with a handful of local

boutiques in LA, the company is projecting to sell upwards of $400,000 in
year 1 and reaching $750,000 in 3 years. Plans for expansion include
setting up distribution and manufacturing relationships in New York,
another fashion centric goldmine where the company aims to gain greater
market penetration.

With an emphasis on environmentally responsible fashion, I’ll Be Denim will

also be starting a jeans recycling program where consumers will be able to
ship or drop off old pairs of jeans and have them used in the manufacturing
process for new ones.

Industry research has found that US consumers own on average 7 pairs of

jeans and stick to one brand based one one important variable, fit. Given
that statistic the company’s designs center around providing the best fit,
with a tagline of “denim so good, you’ll never take your clothes off”. To
further take advantage of this insight, I’ll Be Denim will be launching a
custom tailor option where users will be able to request custom fit jeans
through an online portal.

The primary competition comes from three foreign brands namely Kuyichi,
Hiut Denim, and Nudie Jeans, all which have been committed to
sustainable fashion since the onset and are huge advocates for the organic
cotton movement. The brand value proposition and differentiation will come
from being an American brand with images of patriotism and ruggedness
that shows both fashion forward thinking and a concern for the
environment.
Primary means of marketing will be online through analytic-driven
approaches like SEO and paid search, in addition to capitalizing on social
channels like Instagram, Facebook, Twitter, and Pinterest. User generated
content and engagement will be key as product pages will include
Instagram photos and promote consumer pride in our products.

The organic cotton will be sourced from two mills, one based in Turkey and
the other in Japan where it will be transformed to denim and dyed in natural
indigo colors and shipped to our manufacturing and shipping partner
DenimsR’Us in LA. Day to day operations are handled through an office in
LA with a second office in New York to be opened in a years time.

The company has been funded through the two founders, their family and
friends, alongside some private investment.

Our Story

I’ll Be Denim is a denim clothing line based out of Los Angeles focused on
bringing the highest quality organic denim wear to North America. Founded
by reputable designer Elena Horowitz and business partner James Foster
in October, 2012 with the duo having gone from a small basement
operation in Elena’s home to successfully launching their online store and
scaling their operations.

After both founders worked for several years in the retail and fashion
industries respectively, one thing became increasingly clear to both of
them, the industry is in the midst of a deep moral and ethical crisis. With
cheap labour being continuously exploited with abysmal working condition
overseas and traditionally manufactured cotton using upwards of 25
percent of the world’s entire agrochemicals consisting of unimaginable
amounts of insecticides and pesticides, Elena and James decided enough
is enough.

The duo’s vision for I’ll Be Denim is simple, fashionable denim wear made
with organic materials that’s manufactured locally and created with the
intent to make the fit so comfortable that you’ll never want to take their
clothes off. To achieve such a grand vision, the company is committed to
providing the best in class customer service in addition to working with only
the most detail oriented local manufacturers and promoting eco-friendly
fashion to the mainstream.
 The guiding values and principles for the company are “guilt-free fashion”
(letting customers purchase high-quality apparel without shutting out their
conscious), “the denim is in the details” (working with only the best local
production factories), and “eco is not a fad, but our last chance” (sourcing
organic denim from certified suppliers).

Current Company Status

I’ll Be Denim was incorporated in October, 2012 and operates as a

partnership between Elena Horowitz and James Foster. All company
shares are held by the founding duo. Since sourcing, manufacturing, and
selling out of Elena’s basement to friends, family, and through local
boutiques, the company has grown to have it’s own online store,
relationships with suppliers of premium organic denim in Turkey, and local
manufacturers in LA. The company has had its revenues double every two
months.

I’ll Be Denim Objectives

I’ll Be Denim is currently selling denim jeans online through its Shopify
ecommerce store shipping primarily within Southern California with market
penetration in New York, another in addition to sporadic orders north of the
border to Canada in Toronto and Montreal. It also currently partners with
two local fashion boutique stores focused on selling eco-friendly apparel
that looks and feels good. The company is laser-focused on growing its
sales and operations as broken down in the two phases listed below:

Phase I (Next 6 Months)

 Increase online sales by 20 percent by end of year through influencer and

social media marketing tactics

 Partner with 3 additional local high-end fashion boutiques with shared

values as distribution channels

 Increase online social presence on Facebook, Twitter, Instagram, and

Pinterest by 30 percent

 Build out a “custom apparel” line of the business giving online consumers
the ability to create their own denim jeans and jackets

Phase II (Next 12 Months)

 Explore possibility of brick-and-mortar operations through testing pop-up
stores in LA region

 Create strategic partnerships with local fashion boutiques in New York for
distribution in the area

 Scope out local manufacturers in New York area for quality production with
aim of opening operations for denim jackets as the next product line and
increased delivery within region

 Initiate a jean recycling program whereby consumers will be able to deposit

their denim and have them be reused in the creation of new jeans

The Team

Elena Horowitz is an award-winning fashion designer who graduated from

the Rhode Island School of Design and worked at top retail brands like J
Crew, the GAP, and Levi’s for the past 15 years. Fed up with the lack of
speed with which most retail brands were moving towards embracing eco-
friendly means of production, she decided to quit her job and start I’ll Be
Denim. She serves as Chief Design Officer (CDO) and works with partner
manufacturers to ensure quality of product.

James Foster dropped out of the University of Berkeley after finding

success with his first online store selling fertilizer and garden equipment
with his college roommate. After successfully exiting the company, he went
on to hold operational positions in management for a slew of ecommerce
companies before meeting Elena at a party and hitting it off. The two
discussed their guilt over buying from traditional fashion brands and
decided to combine forces to launch their own label. He serves as the Chief
Executive Officer (CEO) and oversees all supplier relationships, business
logistics and strategic partnerships.

Market Size and Development

A recent report looking at the Global Denim Consumption and Production

through the years 2011 to 2021 by Denimandjeans.com found that in 2007
the world jeans market was worth an estimated $51.6 billion and is at pace
to grow to $56.2 billion by the year 2014. The report also revealed that
North America consumes an estimated 39 percent of denim purchased
worldwide while more than 50 percent of production is still based in Asia,
specifically in countries like China, India, Turkey, Pakistan and Bangladesh.
 Another report that focused exclusively on the denim consumption habits in
the US found that an average US consumer owns 15 denim garments on
average, 7 of which are pairs of jeans. Out of all apparel purchased denim
makes up 17 percent which explains why it continues to be the highest
selling clothing item in the world.

However, when it comes to consumer behaviour and trends most US

denim purchasers buy jeans for fit at 66 percent citing the reason over its
brand name. Interestingly enough though, 73 percent prefer to purchase
the same brand as the one they own with men showing more loyalty at 64
percent than women at 45 percent.

Going deeper into the growing level of awareness around environmental

sustainability and climate change, the Cotton Incorporated 2013
Environment Survey found that 51 percent of consumers say that
environmentally friendliness is important to their apparel purchase
decisions. Digging a little further, about 33 percent are actually more likely
to seek out environmentally clothes for themselves.

When it comes to the material of their clothes though, nearly 72 percent of

survey respondents say that natural fibres are better for the environment
than synthetics, with 51 percent of consumers willing to pay more for them.
Such trends are driving global brands like Gucci, Timberland, and others to
focus on making their products and supply chain more environmentally
friendly.

Pair all those facts together and you get a winning combination
championed by I’ll Be Denim, provide consumers with organic denim
manufactured locally with an emphasis on designing for fit while also
offering custom fit solutions.

Competition

 Kuyichi - Based in the Netherlands, the company has been in the market
since 2001 selling organic denim wear while simultaneously using natural
indigo dyeing techniques and running a robust jeans recycling program

 Hiut Denim - Based in the UK, the company operates out of a small town
known for manufacturing jeans. It currently offers a selection of organic
denim jeans targeted at both men and women, making only 100 pairs a
week and resolving to only make jeans
 Nudie Jeans - Headquartered in Sweden, the company achieved its goal
of launching an organic denim jeans collection in 2012 and has both online
and brick-and-mortar locations. They also have a wide assortment of
sustainable efforts ranging from providing a fair living wage to everyone
involved in the manufacturing process and recycling jeans.

Brand Differentiation and Value Proposition

Though there are more than a handful of organic denim startups, at I’ll Be
Denim, we firmly believe that with the founder’s combined experience,
industry partnerships, and focus on providing the quality denim jeans
produced with sustainability in mind from cradle to grave, the brand can
stand out. Our plan is to leverage our American heritage and love for the
fabric and use a marketing strategy that is closely aligned with building
personal relationships with our target market. In addition, with fit being the
biggest variable in jean purchase decisions, our custom fit program in
addition to our slim, straight, and regular fit jeans will help us delight our
customers who in turn will spread the word.

Target Market

With our initial line of slim fit, straight fit, and regular fit denim jeans, we’re
looking to target the following consumer segment:

 Age: 17-35

 Social Media Savvy: Voraciously active on popular social networks like

Facebook, Twitter, Instagram, Pinterest, and Tumblr

 Fashion Forward: With a keen eye on their day to day wear, these male
and female fashionistas dress to impress

 Addicted to Mobile: They Instagram their food, check their Facebook

status while waiting in line, and tweet every traffic disruption they
experience.

 Eco-Friendly: They feel a pinch everything they know their clothes were
manufactured unethically or are aware of the eco-footprint they have by
consuming clothes made with regular cotton
 Location: The beachheads for the company will be LA and New York,
however, with the ability to shop online, we’ll heavily promote ourselves
throughout southern California

Marketing Plan

 SEO: Our content and blogging efforts will be targeted at having us rank
competitively for keywords like “organic denim”, “organic jeans”, and “eco-
friendly garments”

 Paid Search: We will invest in both Google Adwords and Facebook Ads to
take advantage of their PPC services with optimized landing pages for
conversion

 Instagram: We will launch campaigns and contest to encourage user-

generated images which we will then upload to our product pages to build a
community around our brand and the values we stand for

 Other Social Media: We will subcontract a community manager to

regularly engage our Facebook, Twitter, and Pinterest communities

 PR: We will promote our story, values, and fashion to leading fashion blogs
and print magazines emphasizing our earth-friendly and ethically
manufactured clothing

 Business Development: We will actively look for the most popular local
fashion boutiques frequented by our target market that shares in our values
and beliefs

Another point to highlight is our focus on customer service with a 100

percent “fit satisfaction” guarantee or reimbursement for any alternations, in
addition to a complete refund policy effectively in place.

Daily Operations

For our day to day operations, I’ll Be Denim has established several key
partnerships that ensure long-term durability and the ability to scale
alongside demand for our goods.

We will source the best organic cotton from two suppliers, one located in
Turkey and the other in Japan which means that their supplies were
produced without the use of any pesticides and was dyed in indigo using a
natural means. Once the shipment arrives in the US, it’ll be routed to our
production and shipping partner, DenimsR’Us located in the outskirts of LA
who the company will work closely with to ensure quality through regular
checks and audits. It is also where the products will ship out of through an
integrated backend system and order processing mechanism.

The I’ll Be Denim office is located on 2029 Century Park East where the
two co-founders in addition to two admin and one sales and marketing
support staff will work out of handling all online order processing and
ensuring the purchase to delivery of their denim products runs smoothly.
It’s also where all requests for refunds will be handled in addition to the
future launch of the jean recycling program.

Financial Plan

Pro Forma Income Statement

Year 1 Year 2 Year 3

Sales $395650 $610000 $750000
Direct Cost of Sales $50370 $82000 $105000
Other Production Expenses $50370 $82000 $105000
Total Cost of Sales $100740 $164000 $210000
Gross Margin $294910 $446000 $540000
Gross Margin % 74.54% 73.11% 72%
Expenses
Payroll $177600 $192600 $212000
Sales and Marketing and Other Expenses $0 $130000 $150000
Depreciation $7140 $7140 $7140
Leased Equipment $0 $0 $0
Utilities $6000 $6000 $6000
Insurance $6000 $6000 $6000
Rent $24000 $24000 $24000
Payroll Taxes $26640 $28890 $31800
Other $0 $0 $0
Total Operating Expenses $247380 $394630 $436940
Profit Before Interest and Taxes $47530 $51370 $103060
EBITDA $54670 $58510 $110200
Interest Expense $13830 $12750 $12570
Taxes Incurred $10110 $11586 $27147
Net Profit $23590 $27034 $63343
Net Profit/Sales 5.96% 4.43% 8.45%

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received
Cash from Operations
Cash Sales $395650 $610000 $750000
Subtotal Cash from Operations $395650 $610000 $750000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $395650 $610000 $750000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $177600 $192600 $212000
Bill Payments $103957 $364975 $463540
Subtotal Spent on Operations $281557 $557575 $675540
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $21600 $1800 $1800
Purchase Other Current Assets $19800 $19800 $19800
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $322957 $579175 $697140
Net Cash Flow $72693 $30825 $52860
Cash Balance $137293 $168118 $220978

Projected Balance Sheet

Year 1 Year 2 Year 3

Assets
Current Assets
Cash $137293 $168118 $220978
Inventory $6270 $10207 $13070
Other Current Assets $19800 $39600 $59400
Total Current Assets $163363 $217926 $293448
Long-term Assets
Long-term Assets $50000 $50000 $50000
Accumulated Depreciation $7140 $14280 $21420
Total Long-term Assets $42860 $35720 $28580
Total Assets $206223 $253646 $322028
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9633 $31822 $38661
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9633 $31822 $38661
Long-term Liabilities $128400 $126600 $124800
Total Liabilities $138033 $158422 $163461
Paid-in Capital $200000 $200000 $200000
Retained Earnings -$155400 -$131810 -$104776
Earnings $23590 $27034 $63343
Total Capital $68190 $95224 $158567
Total Liabilities and Capital $206223 $253646 $322028
Net Worth $68190 $95224 $158567