BUSINESS PLAN
Yichi Huang 340 3rd street Jersey City, NJ, 07302 9122726691 hebehyc@gmail.com Fall 2015 FASH503 Prof. Denis Antoine
I. I.
Table of Contents
Table of Contents……………………………………………………………………………2
II. Executive Summary………………………………………………………………………….3 III. General Company Description………………………………………………………………4 IV. Products and Services……………………………………………………………………….7 V. Marketing Plan……………………..……………………………………………………….12 VI. Operational Plan…………………………………………………………………………....28 VII. Management and Organization………………………………………………………….…33 VIII. Personal Financial Statement ………………………………………………………………35 IX. Startup Expenses and Capitalization……………………………………………………….36 X.
Financial Plan……………………………………………………………………………....37
XI. Appendices………………………………………………………………………………...39 XII. Refining the Plan………………………………………………………………….……….41 XIII. Bibliography………………………………………………………………………………..42
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II.
Executive Summary
2nd is an emerging company launched by two graduates student, named Lei Lei and Yichi Huang. A partnership is the best way to begin the business. 2nd store strives to provide conscious women with fashion modern jewelry that can easily rent for any long time you want. 2nd store provides many brands jewelry products. The first year only provides 10 main products. Products from Jewelry companies: Cartier, Tiffany＆Co, Bvlgari, Van Cleef & Arples, Boucheron, Buccellati, Harry Winston, Chaumet, Pomellato, Graff, Piaget, Mikimoto and so on. 2nd store plans to market our line as existing jewelry lines and to differentiate ourselves through other jewelry stores in New Jersy and high brand awareness within our targeted market. 2nd store is positioned in the premium market, targeting working women aged between 20 and 35. Targeting consumers are young people who have no much money but have a permanent job because they just graduate with a bachelor’s or master’s degree, and just begin to work. This group of customers can rent the expensive high jewelry products from 2nd store. 2nd store has the potential to rise within the market segment. In this year, the brand will focus on digital communication and obtain brand awareness through multi-marketing channels. The weakness such as low products mix will be improved gradually along with the expansion of the business scale. 2nd company apply for a loan, 2nd company currently expect around $127,500 more to come from bank loan. In the first month, $116,900 will spend to buy the high jewelry products.2nd provide 10 expensive style jewelry so we don’t provide more expensive jewelry in the following month of the first year because of the limited cost. The money will make our service more profitable especially after three years, there are 2 years old products can continues rent and will have new products provide for customers. High jewelry products is a recycle to rent.
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III. General Company Description The overall objective of this project is to set up a new high jewelry store named “2nd ” , and the main store is in 340 3rd street, Jersey City. The 2nd store is an emerging brand offering the expensive jewelry for targeting people. The strategic marketing plan will address branding, positioning, targeting and promotion of the business in preparation for the launch of the first series of products in 2016, and open an online store. The major areas of focus for the plan include researching the market environment and defining the existing logical resources, adopting a series of promotional strategies to boost the brand’s expansion, and finally to forecast the profit and loss of the business. Our store is positioned in the premium market, targeting working women aged between 20 and 35. Targeting consumers are young people who have no much money but have a permanent job because they just graduate with a bachelor’s or master’s degree, and just begin to work. Mission Statement: 2nd store’s goal is offering best service, fine quality and modern design style. If customers think win we win. Our responsibility is to provide customers with the best service. Perfect quality is our everlasting goal. Providing new products based on innovative technology and creativity. To maintain loyalty, 2nd company needs to offer frequently communicate through social media, promotions, and to constantly improve. Company Goals: The goal is to operate the business online in a safe environment and high functional online store with a loyal customer following. Objectives: Spread the 2nd store via multi-channel marketing, especially via social media communication. The target profit is $120,000 in the first year. Business Philosophy: “Creating services for the world to appreciate”. The core of our business centers on providing services that people around the world love and appreciate. Through the ever-growing spread of the internet, our goal is we can provide services to people all over the world.
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Industry description:
Source from Euromonitor International 2015 These tables show that consumers spend more and more money on the jewelry, especially women. In the short term, women will still cost their 50% money in shopping apparels, jewelry or accessories. Non- store retailing (online store) prices increase dramatically than store- based retailing in USA. In the long term, men’s jewelry cost will become the same as women’s cost. Online shopping will become the main way to shopping, while in store shopping will decrease (See Appendix 3). That why 2nd store always try to organize an online rental store and use other social media to spread the 2nd store. Company strengths and core competencies: high product quality with well-targeted price points, mobileoptimized online store, multi-channel promotion with strong social networking promotion and communication. Personal background experience: Yichi Huang had the experience to open the fashion costume shop online. This experience develops her unique sensitivity to explore fashion and marketing. She see the process of positioning customer behaviors and planning promotions tailored to the potential need of clients as the most exciting segment, which enabled the costume in the shop to be widely favored by targeting groups.
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Legal form of ownership: 2nd is an emerging company launched by two graduates student, named Lei Lei and Yichi Huang. A partnership is the best way to begin the business. Choosing general partnership is because that all of the partners are equally responsible for the business's debts and liabilities. In addition, all partners are allowed to be involved in the management of the 2nd company. Each partner has equal rights to control and manage the business. Therefore, the store is fairly easy to manage, and decisions can be made quickly without a lot of bureaucracy.
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IV. Products and Services 2nd store is positioned target working female and male aged between 20 and 35. Targeting consumers are young people who have no much money but have a permanent job because they just graduate with a bachelor’s or master’s degree, and just begin to work. This group of customers can rent the expensive high jewelry products from 2nd store. 2nd store provides many brands jewelry products. The first year only provides 10 main products. Products from Jewelry companies: Cartier, Tiffany＆Co, Bvlgari, Van Cleef & Arples, Boucheron, Buccellati, Harry Winston, Chaumet, Pomellato, Graff, Piaget, Mikimoto… These jewelry brand products’ retail price range from $1000 to 10,000,000. In the first year, 2nd store just choose the best selling products about watches, necklaces, bracelets and earrings from these brand companies. 2nd store will not provide ring products to rent because 2nd store’s budget is limited in the first year and rings has many size to prepared. In the second year, 2nd will provide watches and rings. 2nd store can provide three price levels products. Here price level means the product retail price in the brand stores, not rental price. Price hierarchy:
Good Product: Retail Price $1000 to $10,000 Better Product: Retail Price $10,000 to $20,000 Best Product: Retail Price $20,000 to $100,000 Every consumer need buy the insurance for the expensive products. If the rental product’s price exceeds $100(retail price exceed $5000), customers need to provide information including Home address, ID (passport or Driving license number). According to customers’ information, 2nd store have the right to decide whether rent or not to the customer. Next are 10 Products provide in the first year. Here is the detail products information:
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2nd Store 2016/2017 RTW Range Plan Picture
Name
Material
Attributes
Brand
Rental
Direct
Retail
Price (per
Import
Price in
day)
Prices
Stores 1. OLIVE
$12500
$94
LEAF
Cuff in 18k white gold with
Size medium, fits wrists up
round brilliant diamonds.
to 6.25" in circumference.
CUFF(Tiffa
$6250
Carat total weight .97.
ny& Co)
2.DROP
$ 9300
$70
EARRINGS
White gold. Carat total
Drop earrings in platinum
weight .97.
with princess-cut diamonds
(Tiffany&
$4650
in a border of round brilliant
Co)
3.Alternatin
$16000
$120
g Hoop
White gold, diamonds.
Platinum with marquise and
Carat total weight 2.08
round brilliant diamonds
$8000
Earrings(Tif fany& Co)
4.Alhambra
Pure Alhambra long
Van Cleef & Arpels offers a
long
$18700
$140
necklace, 14 motifs, yellow
new interpretation of the
necklace
gold, onyx. Chain
Alhambra symbol which gives
(Van Cleef
length:33.49 inches
pride of place to the purity
& Arples)
and smoothness of its lines.
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$9350
5.Magic
$12600
$95
Alhambra
4 motifs, yellow gold, white
The Magic Alhambra
mother-of-pearl.
creations gather different-
earrings(Van
sized Alhambra motifs,
Cleef &
coming together in a joyful
Arples)
dance.
6.Piaget
18K white gold set with
Graceful and seductive, two
Rose
$80000
$600
339 brilliant-cut diamonds.
roses of different sizes come
necklace
Metal weight (gr): 35.44
together to create a feminine
length: 40 cm length: 25
luxury diamond necklace.
$6300
$40000
mm width: 43 mm
7.Limelight
18K white gold, set with
Piaget succumbs to
Couture
$43100
$323
213 brilliant-cut diamonds
temptation and interweaves
PrĂŠcieuse
and 3 black spinel beads
the feminine curves of
long
brilliant-cut diamonds with
necklace
beads of black spinel. Two
(Piaget)
pompom pendants, with
$21550
rippling, ethereal fringes, to highlight its joyful femininity.
8. Piaget Rose
$17000
$128
18K white gold set with
This bracelet exudes
190 brilliant-cut diamonds
refinement as petals and roses
bracelet
in white gold set with brilliant-cut diamonds elegantly match the curve of the wrist.
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$8500
9. Piaget
$13500
$101
Rose
18K rose gold set with 237
Two delicate asymmetric
brilliant-cut diamonds
lacework roses placed on a
bracelet
$6750
feminine chain come together to entwine the wrist, enhancing the natural beauty of the skin beneath.
10. Piaget
Piaget Rose earrings in 18K
The curved tips of the rose
Rose
$12100
$91
white gold set with 164
petals glitter as they extend
earrings
brilliant-cut diamonds
into a semi-circle of
$6050
interwoven white gold and precious stones. This luxurious jewel embodies a quest for glamour. A tribute to the rose, Piaget's emblematic flower, it is a true ode to femininity.
Every online rental transaction must provide customers information including proof of permanent work, bank deposit certificates and other property certificates. After receiving these certificates, 2nd store will prepare the product for shipping. There will be a free return form which shows the last day to return the rental jewelry in the package. If customer losing the free return form they can print online by themselves. If they do not return the products at the end of the day, 2nd store will be deducted automatically money on the bank card. Customers can sign in the online store and rent online. There will have a history rent list on the customers’ account shows that what kinds of styles you like best, and recommend suitable fasteners to customers. The online strategy also enables the company reduce its operational costs and stock levels. English is the only language option on the website now, and may have other language in future. Both the brand information and the online page can be found easily. Users can easily link to social network via the bottom on the menu.
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The product page contains detailed descriptions and quality photographs, and share to social network function. Other contact methods are email and the facility to leave a message on the site. Paypal and other major card types such as Visa and Mastercard are accept to use for money transactions.
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V.
Marketing Plan
Market Size
Source from Euromonitor International 2015 Sales of luxury jewelry and timepieces grow by 5% in 2014 to reach US$15.2 billion. Tiffany & Co continues to be the largest player in the market with more aspirational and absolute brands following closely behind. This market benefits from the steady growth in women’s disposable incomes, from consistent cultural relevance, growth in tourism from China and recovery in the economy(“Luxury Jewellery and Timepieces in the US”). The luxury segment of the jewelry market outperformed the rest of the market in 2014 for the first time since 2010. This is generally because of stronger economic conditions, which has allowed consumers to move back into the luxury segment of the market. Moreover, some consumers are able to trade up from products that are more “soft luxury”, like handbags, to products that are more “hard luxury”, like diamond necklaces. This, in addition to tourism from China, has created an influx of consumers into the luxury jewelry market and thus allowed this segment to outperform the mainstream market (“Luxury Jewellery and Timepieces in the US”). Luxury sales in the US are predominately domestic, with the vast majority of value sales taking place in major urban, brand boutiques, premium department store chains and upscale shopping centres in affluent areas of the country. New York City is near New Jersey. New York City is both a domestic and global hub of fine jewelry sales. US leader Tiffany & Co estimates that 8% of global revenue is represented by the company’s New York flagship location(“Luxury Jewellery and Timepieces in the US”)
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For young women, they like take part in many different activities decorating with different jewelry products, and also need the high jewelry in weddings. 2nd store provide the different luxury products for young consumers. Growth potential and opportunity: If this first 2nd store successful to accept by customers, the second “2nd �store will open in California because of more young population there. There will have many barriers to entering the new market in other place. Some typical barriers are high production costs, Consumer acceptance and brand recognition and so on. In the short period of the first five years, there is no plan to open the second store because the high jewelry products are very expensive. 2nd company can provide the rental service online, and keep develop a good rental service on the website. In this section, relevant macro environment changes within PESTEL framework is studied using a series of published sources such as government reports, academic press, economic statistics and social trend survey, to help 2nd store to capture understanding of the current state of the market and achieve its objectives. PESTEL Analysis Political: The U.S. government combines free enterprise with a progressive income tax, and at times, steps in to support and protect American industry from competition from overseas. Business activity tends to grow and thrive when a nation is politically stable. Although multinational firms can still conduct business profitably, political instability within countries negatively affects marketing strategies. The tax system in the New Jersey is among the most attractive compare with surrounding cities. New Jersey levies state taxes at rates ranging from 1.4 % to 8.97 %. New Jersey's sales tax rate is 7%. Economic: Gross Domestic Product (GDP) by State In 2014, New Jersey current-dollar GDP was $549.1 billion and ranked 8th in the United States. In 2004, New Jersey GDP was $424.0 billion and ranked 8th in the United States. In 2014, New Jersey real GDP grew 0.4 percent; the 2013-2014 national change was 2.2 percent. The 2004-2014 compound annual growth rate for New Jersey real GDP was 0.4 percent; the compound annual growth rate for the nation was 1.4 percent. GDP by State for Industries In 2014, the largest industry in New Jersey was finance, insurance, real estate, rental, and leasing. This industry accounted for 24.8 percent of New Jersey GDP and had a 0.8 percent real decline. The second largest industry was professional and business services, which accounted for 15.3 percent of New Jersey GDP and had 1.0 percent real
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growth. The largest contributor to real GDP growth in New Jersey was nondurable goods manufacturing. This industry accounted for 0.19 percentage point of the total growth in real GDP. The second largest contributor was professional and business services. This industry accounted for 0.16 percentage point of the total growth in real GDP.
Source from U.S. Department of Commerce Social: The store needs to address social factors such as consumer’s tastes and preferences, attitude to the service, and aging of population. Taking these factors into considerate will equip the brand and experiencing. Luxury is often a way for consumers to signal that they have “made it”, and there’s a myriad of ways for different segments to express that. For example, some consumers express status subtly through the scarcity and heritage of the products they purchase. Others express it by purchasing eye-catching products that they want to showcase to friends, family and admiring audiences. Many upscale brands are no longer exclusive to the excessively wealthy, and management consulting firm Bain and Co. estimates that spending on personal luxury goods in the U.S. rose a steady 5% last year to about $73 billion. And when we look at global spending on luxury goods, the U.S. is at top the list. In fact, Americans spent more on luxury goods than consumers in Japan, Italy, France and China combined(“The Luxury Retail Landscape Report”).
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Source from Nielsen Technology: 3D printing technology could bring jewelry designers and producers before most of us. Adam created Iconery in order to provide the jewelry market with a stable place to re-imagine the classic traditions generally used in jewelry manufacturing. By curating the Icornery marketplace with both wildly popular and up-and-coming designers, Adam isn’t trying to create an exclusively high-end shopping experience, rather, she is focusing on using new and advanced technologies, such as 3D printing, in order to help both designers and consumers to build themselves a collection of personalized and meaningful jewelry (“Iconery: Where Fashion, E-Commerce, & 3D Printing Intersect” ). Environment: While the list of retailers aligned in their opposition to dirty gold continues to grow longer, most gold remains quite filthy. The majority of the world’s gold is extracted from open pit mines, where huge volumes of earth are scoured away and processed for trace elements. Earthworks estimates that, to produce enough raw gold to make a single ring, 20 tons of rock and soil are dislodged and discarded. Much of this waste carries with it mercury and cyanide, which are used to extract the gold from the rock. The resulting erosion clogs streams and rivers and can eventually taint marine ecosystems far downstream of the mine site. Exposing the deep earth to air and water also causes chemical reactions that produce sulfuric acid, which can leak into drainage systems. Air quality is also compromised by gold mining, which releases hundreds of tons of airborne elemental mercury every year. The Grasberg Mine, in Indonesia, is one of the largest gold mines in the world and is owned by American company Freeport McMoRan. The Grasberg Mine is also located smack in the middle of Lorentz National Park, creating such a huge scar on the Earth that can be seen from space. The mine dumps about 80 million tons of waste debris into the Ajkwa river system every year, according to Sampat at Earthworks. Another American company, Newmont, owns the Batu Hijau mine, also in Indonesia. This operation dumps its waste into the ocean near the island of Sumbawa (“The Environmental Disaster That is the Gold Industry”).
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The raw material of gold will affect jewelry industry directly. The price of the gold will increases which means jewelry products’ price will keep increasing in future. 2nd store will spend more money to buy the jewelry products to support rental service. Legal: A statement noted that New Jersey law requires, among other things, that buyers collect IDs from sellers; weigh metals within clear sight of the seller, using a scale certified by the state’s Office of Weights and Measures; post signs clearly showing the prices paid; and offer receipts. Each state violation carries a maximum penalty of $500. The Wayne Township municipal code violations each carry a potential penalty of up to $2,000, as well as up to 90 days incarceration, or 90 days community service (“New Jersey Jewelers Cited for Allegedly Violating Gold Buying Laws”). SWOT Analysis(S&W analysis in Competition) Opportunities: broaden product mix and size range, growing amount of e-shoppers, shipping to more countries and enable the prices to be displayed in different currencies, more advertising and communication channels. Threat: basic styles can potentially rent faster than expensive ones, and the risk of holding the stock of the expensive ones has to be considered. Risk of handling the large returns. The quality of products is hard to gain consumer’s trust. Some of the brands or products might rent more than others. When customers visit the store looking for that product, they expect the product will have their sizes. Failure to get enough inventory could disgruntled customers and lose sales. On the other hand, if the business gets too much inventory, it needs more spaces to display in the store.
Product Features and Benefits Picture
Product Name
Features
Benefits
1. OLIVE LEAF
Cuff in 18k white gold with
. Simple combination of leaf
CUFF(Tiffany& Co)
round brilliant diamonds. Size
elements let people feel very
medium, fits wrists up to 6.25" in
relaxed and freedom.
circumference. Carat total weight .97.
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2.DROP
White gold. Carat total weight.97.
EARRINGS(Tiffany& Co)
Drop earrings in platinum with princess-cut diamonds in a
Drop earrings in platinum with
border of round brilliant.
princess-cut diamonds in a
Pendant Earrings are very
border of round brilliant
suitable for wedding.
3.Alternating Hoop
White gold, diamonds. Carat total
Platinum with marquise and
Earrings(Tiffany& Co)
weight 2.08.
round brilliant diamonds let customers feel aristocratic luxury
Platinum with marquise and
style.
round brilliant diamonds 4.Alhambra long
Pure Alhambra long necklace, 14
Black value and concise design
necklace (Van Cleef &
motifs, yellow gold, onyx.
give customers feel retro style,
Arples)
and let women feel back to the era of Renaissance.
5.Magic Alhambra
4 motifs, yellow gold, white
The Magic Alhambra creations
earrings
mother-of-pearl. The Magic
gather different-sized Alhambra
Alhambra creations gather
motifs, coming together in a
different-sized Alhambra motifs,
joyful dance. White value gives a
coming together in a joyful
person relaxed and refreshing
dance.
feeling.
18K white gold set with 339
Graceful and seductive, two
brilliant-cut diamonds. Metal
roses of different sizes come
weight (gr): 35.44 length: 40 cm
together to create a feminine
length: 25 mm width: 43 mm
luxury diamond necklace.
6.Piaget Rose necklace
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7.Limelight Couture
18K white gold, set with 213
Piaget succumbs to temptation
PrĂŠcieuse long
brilliant-cut diamonds and 3
and interweaves the feminine
necklace
black spinel beads.
curves of brilliant-cut diamonds with beads of black spinel. Two pompom pendants, with rippling, ethereal fringes, to highlight its joyful femininity.
8. Piaget Rose bracelet
18K white gold set with 190
This bracelet exudes refinement
brilliant-cut diamonds.
as petals and roses in white gold set with brilliant-cut diamonds elegantly match the curve of the wrist. This product gives people elegant and noble feeling.
9. Piaget Rose bracelet
18K rose gold set with 237
Two delicate asymmetric
brilliant-cut diamonds.
lacework roses placed on a feminine chain come together to entwine the wrist.
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10. Piaget Rose
Piaget Rose earrings in 18K
This luxurious jewel embodies a
earrings
white gold set with 164 brilliant-
quest for glamour. Piaget's
cut diamonds.
emblematic flower displays feminine style.
The curved tips of the rose petals glitter as they extend into a semicircle of interwoven white gold and precious stones.
After-sale services: Term& Conditions (Return Policy) If consumers return the rental product late within 1 day you need pay additional fee about 50% of your rental price, late 2 days you need pay additional fee about 80% of your rental price. After 3 days late returning you need pay the rent price twice. If customers return slowly, we will make a phone call or voice mail to remind customers, and also send a letter to
their home. After 7 days we will get our attorney to threaten.
Customers Our store is positioned in the premium market, targeting working women aged between 20 and 35. Targeting consumers are young people who have no much money but have a permanent job because they just graduate with a bachelor’s or master’s degree, and just begin to work. The store targets fashion-conscious female shoppers with an average income level. Target consumers is positioning within the upper range of the middle-ground market. Targeting customers are modern professional women who typically have more desire and thoughts about jewelry products than others. They want jewelry that allows selfexpression. They are the most likely to be multiple device owners, viewing technology as an important part of their daily lives, and they are willing to embrace new digital retailers. They are potentially the first to shop at a new store or through a new channel. The target will extend globally according to future sales performance.
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2nd store have no plan to provide rent service to foreign tourists in the first year. Foreign tourists maybe can rent online in future. In the first two year, 2nd will focus on the local New Jersey customers or U.S domestic customers. There are two main group customer groups. Demographic Profile 1 (Name: Brandi): Age:
24
Gender:
Female
Location:
418 W 17th St, New York, NY 10011
Income level:
$48,900 per year
Social class and occupation:
Middle spending power,
Educationďźš
B.A
Housing:
renting $1450 per month
Lifestyle: Engaged party, and enjoying socializing with others. They browse fashion magazines, blogs keep themselves up to trend and they are comfortable online shopping. Hobbies: Takes day trips with friends, hikes, and seeks new foodie experiences. Purchasing behavior: they seek to be fashionable, chic and trendy. Purchase products with moderate price. They are happy to pay a bit more if a better choice presented itself. They like mix fashion products from different market levels, and see the internet as an important shopping platform. They have numerous options and are likely to explore new things. Others: This age is the most frequent buyers and driving growth in the jewelry market, and more likely to keep up with the latest trend. Their financial situation might not able to afford them to buy expensive products especially expensive jewelry. They are fashion savvy, excited about some jewelry and buy new products. They want to be stylish and keep looking good. Demographic Profile 2 (Name: Jacky): Age:
28
Gender:
Male
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Location:
14 Chopin Ct, Jersey City, NJ 07302
Income level:
$53,900 per year
Social class and occupation:
HR generalist
Education：
M.A
Housing:
renting $1460 per month
Lifestyle: young people like urban lifestyle. View technology as an important part of daily lives and feel comfortable in embracing new digital retailers. They can balance life and work , family and social activities. They aware fashion trends but not a slave of fashion. Hobbies: Playing the basketball, traveling. Others: This group males do not like always go shopping, and they like using new technology and like social media. They have girl friends who like shopping and like new products, and their girl friends want always keep up with fashion trends.
Competition In the Jersey City near 2nd store, JCPenney and Macy’s are considered key competitors within the middle market. They share common advantage of having a well-established brand position, reputation and recognition. 2nd store faces a significant threat from influential retail theater Macy’s with digital retail channels. Macy’s site consists of numerous premium products from more than 200 designer labels. They provide many different kinds of products including clothes, cosmetics, accessories and so on. 2nd have limited types of products but this problem will be solved gradually when have the fund foundation after three years. JCPenney address: Newport Centre、10 Mall Dr W、Jersey City, NJ 07310 Macy’s address: 20 Mall Drive East、Newport Centre Mall、Newport Centre、Jersey City, NJ 07310-1602 There are many indirect competitors, such as Wombat Audio music store, Grove street Bicycles stores, The home depot store. These stores will have the same target consumers, and we can share the common consumers, and also can organize some promotion activities together.
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Table: Competitive Analysis
o
FACTOR
Products
Price
Quality
Me (2nd store)
Importance Strength
Good
3
Medium
Medium
4
Good
Fine
2
More
More
2
√
professional
professional
1
√
Very reliable
Very reliable
2
√
Stable
Stable
3
All fashion
All fashion
expertise
expertise
√
Yes
Yes
2
√
convenient
convenient
4
√
have problems
Service
to
Modern style
√
Rent more may
limited
Macy’s
Modern style
√
classic
Selection
JCPenney
Customer
Modern and
Very low
Weakness
√
New store not Reliability
reliable for consumers
Stability
Expertise Company
Potentially Unstable Provide jewelry expertise No Because of
Reputation
new store
Location
convenient
Appearance Sales Method
Advertising
Image
√
2
individuation
√
fancy
fine
4
Online/in store
√
Online/ in Store
Online/ in Store
3
(More) TV,
(More) TV,
magazines,
magazines,
online…
online…
fashion
fashion
Social media, magazines
fresh
√
√
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2
3
Strengths（SWOT）: 2nd has the high fashion ability, good product quality with well-targeted price points, mobile-optimized online store, multi-channel promotion with strong social networking promotion and communication. Consumers can use the right price to rent to high-end expensive goods with good product styles and the best quality. This rental service can let consumers to have the opportunity to use expensive goods which they cannot afford to buy this goods. Weaknesses（SWOT）: 2nd has the limited business budget, narrow size range, zero brand awareness, low ethical involvement, just free shipping to U.S not abroad.
Niche To see if there is a place in the market for 2nd store, we research New Jersey jewelry companies. By looking at their product and price assortments and sustainability, we assessed there was a gap that our company could fill to provide young consumers the expensive jewelry. Young consumers like to pursue fashion, and like using new products. Once the product is updated immediately they will want to change the style. For example, every year iPhone in September will release a new product. Then will have a group of young man want to buy immediately, although the old iPhone is still like a new. Young consumers often buy new products, and they only use a few times then they no longer like the products. They want to updated style. The old goods have become unused, and they will put away. Therefore, 2nd store can provide expensive jewelry that customers like, and provide new products every year. People can rent when they want to attend a graduation ceremony, a wedding, or a fashion party just any time they need. Our research indicated most of our competition was sustainable and trendy. However, other sustainable companies often offered very little style but classic style whose trend last a long time. This is something our store could take advantage of.
Strategy 2nd store’s promotion objectives are to maximize brand presence via different marketing communication methods including outdoor advertising, print advertising, online marketing and event marketing. We want more and more young consumers know this jewelry rental service. In the first year, 2nd will focus on the online marketing development. First, 2nd store aims to focus mostly on social media promotion, and will post interesting contents on a daily look in our website blog, and let consumers share messages with their social network friends. Online marketing will include hashtag campaign, Facebook promo, Instagram promo, YouTube Videos, E-newsletters and so on. 2nd store aims to build directly communicate with customers through setting up official accounts on Facebook, Twitter, and gain 1000 “like” on the official Facebook page and 1500 followers on Twitter within one year. Acquire 8000 unique visitors in the first year, 35% of whom will be sourced from social media, to convert 15% of unique visitors to register on the site.
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Facebook fans can share our Facebook page or tag us in a post they will receive 10%off their next purchase. Build a smartphone-optimised site for mobile shoppers and have 20% of rent transactions via the mobile channel. Second, 2nd store’s direct market strategy is communicating with registered customers via direct emails with certain product benefits, and base on their rental history. The store’s look book will also be sent to the first time customers. Third, in the second year 2nd store will make some outdoor advertisements in the New York and New Jersey cities, like bus tops and the advertising on the appearance of the public bus. This promotion method will spend 2nd store much money. Finally, magazine advertising, publications in which 2nd store will advertise: Marie Claire, the gentle woman, How to spend it, and so on.
Grand opening party is to get potential customers into the store and acquainted with the business. May the opening day will become the party time every year. Promotion Two rental promotions will be arranged in order to uplift rents and remove stock in the first year. 10% of jewelry are planned to be rented at a 5% off reduced price during Christmas rents in December. Another 10% of products are targeted to be rent at a 10% off price during the end of season in February and March. The unwanted products will be handled to sell by the store annual party, maybe in September. This ensure stock can be cleared before the next season in the second year, and renew the products from manufacturers. In general, it is expect more rents when a new season starts, during the Christmas rents as well as during the end of season rents. However, the business aims to have only 20% rents during the launching phase. As a new brand store,
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2nd store will take time to gain a customer base. It is planned generate most rental promotion during the Christmas in December and during the end of season rents in February. Logo Design:
Promotional Budget The promotional budget for year one is about $6100 including printing materials fee and advertising. Pricing The business plans to adopt a market-oriented strategy in order to directly target the bridge segment. Pricing decisions are made from the brand’s retail price, ranging from $1000 to $100,000. Considerations in setting the pricing policy also include price competitiveness. These products can rent by customer, and they just need pay about 1.5% of our import price for rent per day. Every consumer need buy the product insurance which is about 3% of your rental price. If the product is lost or damaged, the insurance company will carry out claims. Proposed Location The location is very important in the first year, while after online rental system developed the main store location is not the most important for customers. Customers come to the store is very convenient. There are 2 public parking lots near the store. For New York customers, they can take the train just 30 minutes or driving just 20-30 minutes to New Jersey. Public transit is very convenient to take. The competition location is not close to 2nd store, so more consumers will attract by the new rental system.
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Sales Forecast For the first year, 2nd store not expecting that it possible to reach $40000 rents a month. We aiming that the company could reach that amount after one year. Also we expect the rents would grow during some festivals such as Christmas or other activities like New York Fashion Week and other fashion actovities.
Sale Forecast:Year 1 40000 35000 30000
Sale Price
25000 20000 15000 10000 5000 0
1 2 3 4 5 6 7 8 9 10 11 12 Product 10 1274 1365 2002 1729 2002 1820 2002 1820 2002 2457 2457 2639 Product 9 1313 1414 1616 2020 1818 1919 2020 2020 2525 2020 2727 2727 Product 8 1806 2304 2048 2304 2560 2816 2816 2304 2816 2816 3456 3712 Product 7 1615 1938 1615 2584 3553 4522 5168 3230 3876 4199 6783 7752 Product 6
3000 4200 4200 6600 6600 4800 6600 5400 4200 5400 6600 9000
Product 5 1140 1615 1140 2185 1710 1615 2185 1995 1900 1995 2185 2375 Product 4 1260 1260 1510 1820 2520 2800 3080 3080 2380 2520 2240 3640 Product 3 1200 1320 1200 1920 1920 1680 1440 1800 1680 1920 2160 2760 Product 2
980 1120 1750 1540 1750 1540 1750 1750 1960 1750 1960 1960
Product 1
1222 1410 1504 1786 2350 1786 2350 2350 2726 2350 2350 2726
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Sale Forecast: Year 2 40000
Product 10
35000
Product 9
30000
Product 8
25000
Product 7
20000 15000
Product 6
10000
Product 5
5000
Product 4
0 1 2 3 4 5 6 7 8 9 10 11 12
Product 3
In the second year, These first year’s old products near rent out every day, but the rental price may lower than first year. There will have another 10 new products for rent in the second year.
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VI. Operational Plan Production 2nd store rental service provide 10 products in the first year, and the direct import prices is about $117.400. If the overall turnover in the market steadily rising, 2nd store can provide other brand jewelry products. Customers can choose to reserve models of other products in the second year. These jewelry brand products’ retail price range from $1000 to 10,000,000. In the first year, 2nd store just choose the best selling products about necklaces, bracelets and earrings from these brand companies. 2nd store will not provide ring products to rent because 2nd store’s budget is limited in the first year and rings has many size to prepared. Customer service: 2nd store will have the email and phone number and other information on the 2nd website. We are not provide 24 hours customer service.
Location It is not very important that store location be convenient to transportation or to suppliers because 2nd store do not need keep stocks. 2nd store will rent a furnished office about 428ft, That is enough space for few staffs to work in and set up a small store to display jewelry. The rent of the store is $1,890/month. Store information is from Hotpads website.
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Business Hours of Operation: Monday
10AM – 6PM
Tuesday
10AM – 6PM
Wednesday 10AM – 6PM Thursday
10AM – 6PM
Friday
11AM – 6PM
Saturday
12AM – 5PM
Sunday
12AM – 5PM
Legal Environment Licensing and bonding requirements: These services are designed to protect New Jersey farmers against non-payment for their products. Jewelry store need pay $200 fee. The bonding and grounding certificate shall be valid for a period 32 of five years from the date of issuance. The electrical certificate of 33 approval shall be renewed annually on the basis of a pre-season 34 inspection by the code enforcement department of the municipality for 35 a fee of no more than $50. Permits: For online stores access to the permit, we need provide information and a modern method of communication, for both sides of the "construction counter" in the website of www.njpermits.com. Insurance coverage: Auto insurance is mandatory in New Jersey, but the type and cost of that coverage can vary significantly. Every day, consumers are finding that there are options available to make it easier to comply with the law. The Automobile Insurance Cost Reduction Act mandated that a Basic Policy be available to all drivers. It is important to realize that you are breaking the law if you drive uninsured. The penalties for driving uninsured are getting more severe — in addition to risking economic loss by not having insurance protection, you risk fines, suspension of driver's license or registration and even time in jail. In the future, your car could be impounded if you are caught behind the wheel without coverage. Basic policy $10,000 coverage for all persons, per accident.
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Personnel Pay structure: Personnel Plan for Year 1-2 Year 1: In the first year, web designer and accountant are part time job. Employees
Number
Year 1
Web designer and maintainer(Part time)
1
$12/ hours 10hours/week ($5,760)
Lawyer
1
$40,000
Insurance agent
1
$38,000
Consultant(Part time)
1
$10/hours($16,800)
Total payroll
4
$100,560
Employees
Number
Year 2
Marketing Executive (Full time)
1
$47,000
Web designer and maintainer(Full time)
1
$40,000
Accountant(Full time)
1
$40,900
Lawyer
1
$47,900
Insurance agent
1
$39,000
Consultant(Full time)
1
$39,000
Year 2
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Total payroll
7
$253,800
Type of labor: Mass Services Job descriptions for employees (See Management and Organization) We will find the right employees through the website of www.traba.co. Part time job will be contract workers, while others are employees. Training methods and requirements: working experience at least half year or internship experience.
Inventory 2nd will keep finished jewelry goods. If the money is sufficient in the second year, we will provide seasonal backups for customers to follow the fashion trend. We will collect customer tracking and feedback, monthly visit to 2nd stores, inventory checking, replenishment and timely replacement. New stock will need 10 day for delivery. In order to avoid too much inventory in the second year if we provide rings, 2nd store could use the rental record of each customer, and know what sizes and brand have the biggest demand to get a more accurate of inventory.
Suppliers Suppliers may change depends on which luxury brand 2nd want to provide for rent. Names and addresses: 1、Mark L. Aaron,480 Washington Boulevard, Jersey City, New Jersey 2、Siège social，chemin du Champ-des-Filles 37，P.O. Box 228，1228 Plan-les-Ouates （Manufacture） Type and amount of inventory furnished：10 styles in the first year. Delivery policies: Shipping methods supported by UPS,USPS, FedEx. Suppliers will allow up to 6-8 weeks for delivery of shipments via USPS.
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Supply costs may fluctuating in the first year, but the second year will be steady because of tracking customer consumption history we will better understand customer needs after the first year.
Credit Policies As a jewelry rental shop, most of the transactions will likely be under $2000 which will more convenient to be paid all at once. Therefore, 2nd don’t provide credit policies.
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VII. Management and Organization Professional and Advisory Support Employees
Name
Directors
Yichi Huang
(Shareholder)
Lei Lei
Address
Phone number
340 3rd street
9122726691
hebehyc@gmail.co
Jersey City, NJ, 07302
Web designer and
Kelly
Manage the 2nd store
m 9125483589
109 Erie St
Responsibility
8688884945
Prepared all leilei@gmail.com
promotion activities
weendh@gmail.com
Ensure the safety of
maintainer
network shopping Jersey City, NJ 07302
environment. Design 2nd online store.
Lawyer(Attorney)
Carol Notias
599 Avenue C
Lambos
Bayonne, NJ 07002
201-823-1000
Fax: 201-823-3097
Practice Areas: labor and employment law, business law, insurance law, construction law.
Insurance agent
Jack
325 Pavonia Ave
4859395768
kenwo@gmail.com
Approaches potential clients by
Jersey City, NJ 07302
utilizing mailings and phone solicitation. Helps in promoting and selling services to customers.
Consultant
Jesse
364 6th St
4823224759
Jeyoo@gmail.com
Presenting findings and
Jersey City, NJ 07302
recommendations to clients.At 2nd store at all time to assist customers. Provide customer service.
Lawyer: The Lambos Firm,LLP. Website: http://www.thelambosfirm.com/
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Lawyer assists in the drafting and negotiation of retail leases and agreements, advise on tax law issues, assist in intellectual property matters and help retailers comply with complex jewelry guidelines and regulations. There is a plan for continuation of the business if this person is lost or incapacitated, 2nd company will find someone for part time job in store.
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VIII. Personal Financial Statement Owner: Yichi Huang Home(own)
$300.000
Home(Belong to Her Parents)
$600,000
Jewelry
$18,500
Saving
$89,000
Credit Card
$1800
Car
$28,900
Piano
$2,900
Total
$1,041,100
Partner: Lei Lei Home(own)
$460.000
Jewelry
$48,500
Saving
$99,200
Credit Card
$2500
Car
$38,900
Total
$649,100
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IX. Startup Expenses and Capitalization Startup Expenses: during the first month, 82% expenses spend on the stock of high jewelry products.7% spend on first year insurance. The cost of furniture consists of a sofa, six arm chairs, six tables, and some jewelry display tables. The company needs 2 iMacs in the store and some other equipments such as printer, scanner, mobile phones and laptops.
10 9 0% 1%
8 0%
12 Month 1 Expenses 0%
4 3 0% 6%
5 6 0% 0%
2 1%
11 2%
13 14 0% 1%
7 7%
Stock 1 82%
Capitalization: Total amount of money loan:$127,500. Pay- Back Plan: 30 years, 537 per month. Financial Required: the company currently expect around $127,500 more to come from bank loan.
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X.
Financial Plan
12-Month Profit and Loss Projection
Profit / loss 40000 20000
5389 6828 12731 15026 13531 14594 13932 14248 15600 20381 26594
0 -‐20000
1
2
3
4
5
6
7
8
9
10
11
12
-‐40000 -‐60000 -‐80000 -‐100000 -‐120000 -‐127140 -‐140000
Four-Year Profit Projection The profit is forecasted to increase in next three years in 4 quarters. Also the first month of every year need pay insurance and buy new jewelry products. The old jewelry products will keep rent to customers.
Profit / Loss: Year 2 200000
price
150000 100000 50000 0
1
2
3
4
profit / Loss 10750 150900 158900 172800
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After 3 years, there are many jewelry products which can make more profit.
Profit / Loss: Year 3
Profit / Loss: Year4
250000
250000
200000
200000
150000
150000 profit / Loss
100000
profit / Loss
100000
50000
50000
0
0 1
2
3
4
1
2
3
4
Projected Cash Flow (Year 1)
Cash Flow 132620
127500
112239 96639 82391 68459 53865 40334 25308
1
360 2
5749 3
12577 4
5
6
7
8
9
10
11
12
2nd store make a sale in December, and will collect the cash in the next year spring. We buy inventory need pay in advance. Therefore, 2nd company will provide new jewelry products every first month, which spend much money in the first month. The profit will be very low even loss money in the first month. Stock and insurance are some expenses payable in advance in the first month. There are irregular expenses, such as repair products, that budget will be about $4000. 38
XI. Appendices Appendix 1 –Financial plan in Year one
Appendix 2 – U.S. Personal income: Percent change in 2015
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From this table, growth rate of New York is about 1.0 to 1.1. Surrounding state NY and VA growth rate is 1.1 to 1.1, which is higher than NJ. There will have more opportunities to develop rental service in NJ than in NY and VA because the income in NJ is not the highest in the Mideast area. This is better for the beginning small business. Appendix 3 – Market size forecast
From Appendix 3, these data shows that more and more people like shopping online in the future. This is also why 2nd store choose to open online store, and provide more convenient rental services.
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XII. Refining the Plan Service Businesses Rental Prices Range: $30-$1000 per day. Methods used to set prices: 1.5% of direct import price. Credit, payment, and collections policies and procedures: no late pay. Strategy for keeping client base: 1、Aim for a Lifelong Relationship – Provide every time they need jewelry products for formal occasions.
2、Offer a Guarantee – Everyone likes a sure thing, and we can use that to our advantage when we provide our services. Getting customers to return to our business time and again will be easier if our work to make sure to deliver on our promises and ensure that the results are what customers expect. As a business, we want our reputation to be one of integrity. That’s something that will only happen when our customers realize that they can trust us to do what they say. 3、Make It Convenient – Make customers’ interactions with 2nd as easy as possible. That could include making it easy to get in touch with us online, just as much as it could mean making it easy to place and receive orders.
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XIII. Bibliography Alastair, Bland, “The Environmental Disaster That is the Gold Industry”, Smithsonian.com, Web (2014) http://www.smithsonianmag.com/science-nature/environmental-disaster-gold-industry-180949762/?no-ist “The US luxury retail landscape report” Copyright The Nielsen Company, Web(2015) Bob, Shullman, “Insight into US luxury consumers” ,The Shullman Research Center, Web(2015) http://0www.warc.com.library.scad.edu/Content/ContentViewer.aspx?MasterContentRef=5d6fa4d9-040c-4d2ca459-1b11d74dff50&q=jewelry&CID=A104128&PUB=ADMAP Daniel, Ford, “New Jersey Jewelers Cited for Allegedly Violating Gold Buying Laws” Web(2012) http://www.jckonline.com/2012/08/07/new-jersey-jewelers-cited-allegedly-violating-gold-buying-laws “Growth Rate for Global Marketing Budgets Steadily Slowing” World Economics: Global Marketing Index, World Economics, Web (2015) http://0www.warc.com.library.scad.edu/Content/ContentViewer.aspx?MasterContentRef=93f1b619-0378-4248b331-e5c7d05b97d7&CID=A105756&PUB=WORLD-ECONOMICS “The Luxury Retail Landscape Report” Nielsen, Web(2015) “Luxury Jewellery and Timepieces in the US” Euromonitor International, Passport, Web (2015) “Tiffany&Co in Luxury Goods（USA）” Euromonitor International, Passport, Web(2015) “Political Environment.” Boundless Marketing. Web (2015) https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/the-marketingenvironment-3/external-factors-31/political-environment-165-7603 Tyler Koslow, “Iconery: Where Fashion, E-Commerce, & 3D Printing Intersect”, 3D Pringting Industry, Web (2015) http://3dprintingindustry.com/2015/10/02/iconery-where-fashion-e-commerce-3d-printingintersect “NJ License&Certification Guide” https://www.state.nj.us/commerce/CEG_LCI/pdf/liccert.pdf
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