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Denim o Bag
Presented by: Karina Dhall Rishika Gulati
Denim o Bag
Introduction to the venture
Name: Denim o Bag
Market Segmentation
Market Analysis
Artwork
custom artwork created and placed on the bag
generally have the image or style in mind and will direct the artist to create it Ages 24-40 Median individual income is 42,000 Go out to eat 2.7 times a week Listen to 3.3 hours of music a week 18% are using the bag as a form of communication for a cause or a message
Bag shack
Local retailer is geared toward organizations or teams with production runs of 20 or more Rigid regarding custom work
Bag design house Internet-based retailer That primarily offers computer sublimations Design house has a catalogue of approximately 200 images for the customer to choose from Do not allow customers to use their own designs
Description of venture
Management
Custom denim bag! Will be led by Karina Dhall and Rishika Gulati and is their first business venture. Objectives To become known as the premier custom bags made out of used denims and jeans. Achieve profitability within 12 months. Design and implement strict financial controls to help ensure success.
Mission
Custom denim bags mission is to offer the finest in custom denim bags. Custom denim bags! will offer customers the best product at the best price with a lot of variety and designs. Customer's expectations will always be exceeded. Keys to Success Leverage unlimited design variations in the denim bags which will offer unique features to all the customers.
Exceed customer expectations by offering high quality products at reasonable prices with quick turnaround times.
Employ careful financial and accounting analysis to ensure efficiency and proper controls.
Company Ownership Karina Dhall and Rishika Gulati are the Founders and President of Custom denim bag! Roles and responsibility Both the owners of the company are equally responsible for the management of the venture which includes procurement of raw materials, sourcing of the fabrics, production planning, costing, advertising and promotion, handling of customers and another office related tasks.
Product
Custom bags Made of used pair of denims
Personnel Plan
Customize Denim Bags will require the following personnel for operations: Owner -- Business development, finance and high level accounting, customer service, bag designing Designer Bag Designing/printing In-store retail employee -- Help customers with placing or existing orders Bookkeeper -- Accounts receivable and payable Independent design contractor -- Artist
Office Equipments
Custom denim bags! will incur the following expenses for start up:
Two laptops -- These will be high end models and utilize the following software: Microsoft Office, Adobe Photoshop and Illustrator, Macromedia FreeHand, and QuickBooks Pro. Raw material old denims, accessories for embroidery (threads, appliqus, buttons, ribbons etc.)
Website -- This will be used for information disbursement as well as ordering Shelving display unit -- To display assorted bag designs on paper for easier viewing Broadband Internet connection Two desk/chair/office supplies set Small bags inventory -- Inventory will be kept small to lower overhead. This will be accomplished by using a bag vendor who is one shipping day away, effectively using a just-in-time (JIT) system for managing inventory Design unit -- To make the designs as per the customers requirement.
Background of Entrepreneurs
Rishika Gulati B.Sc. Fashion Design and Technology MFM from NIFT Bangalore Total work Ex. 5 months Karina Dhall
BSc. (Hons.) Textiles and Clothing From Delhi university Apparel merchandising and Marketing, Pearl academy of fashion MFM from NIFT Bangalore Total work Ex. 3 months
Competitive Edge
Customization of bags Use of old pair of denims Variety of design options Uniqueness of each bag
Production plan
Manufacturing process
Treatment and checking of denims If durable enough then sent for cutting and sewing the bottom of the denim Check for durability and strength of the fabric If OK, then sent for further treatment and dyeing The last step is the cut out denim is sent to the warehouse and the retail outlet for carrying out the designing process
Marketing plan
Cons
It is not cost effective for small number production runs Changes made at the later stage of the production by the customers may not be feasible by the designers
Choice Of Products
Pre-existing designs or custom artwork Use of extensive catalogue Strategic relationships with several companies that offer a wide range of designs
Products
Pricing
Unique pricing method The price of the basic denim bag remains the same
Additional price will be charged for the artwork, embellishments or any other kind of designer work on the bag
Competitive pricing
The starting price for basic denim pouch starts from Rs.899 till Rs.1199
The artwork, embellishments etc. have prices starting from Rs.699 till Rs.3999
Promotion
Use of social networking websites like Facebook, Orkut, Twitter etc Brochures and pamphlets distributed outside colleges and malls
Advertisement Budget
Website and Catalogue - 60% Brochures and Pamphlets - 30% Word of Mouth - 10%
The quality of their computer generated sublimations, a function of using prototype HP sublimation technology to add aesthetic appeal to the bag Uniqueness of design in each bag is the USP of the business
The marketing campaign will emphasize the ability to completely customize a bag
Competitive Edge
Large catalog of styles Quality of the Fabric
Sales Strategy
Ordering a bag from Custom Denim Bags will be easy and pleasing experience Continual development of the website A friendly, easy to use web interface
By offering customers a high quality product by using high grade fabric for the manufacturing and state-of-the-art technology and materials
Financial plan
Start Up Funding Amount
50000
80000 130000
Liabilities Current borrowings Long term liabilities Accounts payable Other current liabilities Total liabilities Capital Planned investment Karina Rishika Other investors 125000 125000 125000 0 65000 0 0 65000
0 375000
12000
Start Up Requirements Start-up expenses Legal Stationary Promotion Computer equipments Rent Insurance Office furniture Designers salary
Amount
Start-up assets
Cash required
60000
Start-up inventory
1500
5000
Total assets
66500
Total requirements
114700
Breakeven analysis
The company expects to reach its breakeven in four year.
B/E (Q) = TFC/ SP VC/ UNIT (marginal contribution) Year 1 TFC = 170200/1000 700 = -529.8 Year 2 TFC = 170200/1000 550 = -379
Year 3 TFC = 170200/1000 300 = -129 Year 4 TFC = 170200/1000 150 = 20.2 Therefore, with reducing the variable cost every year, the breakeven will be achieved in 4 years.
Assessment of Risk
Copying of the similar concept Since the concept is new in the market, there will be no such competition at present for the same Will take a while for the competitors to imitate the concept Till then the firm would have made enough profits and established a good such that the brand will be able to get many loyal customers