BUSINESS PLAN
A nd r e a s
Kaitlin Andreas June 2011
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Table of Contents Executive Summary Mission Statement
8
Funding Success Factors
9
Section Summaries
10
Company Overview Owner and Organization
12
Basic Business Concept
12
Legal Form of Ownership
13
Organizational Chart
14
Overall Strategy
15
Gantt Chart Store Opening
15
Short Term Objectives
16
Long Term Objectives
17
Company Resources
18
Management Structure Finances Market Scope
Basic Orientation
20
Problems Expected and Contingency Plan
21
Market Analysis Consumer Profile
23
Demographics
23
Psychographics
27
“Day in the Life� Free Time Activities VALS
2
Prizm NE Maslow’s Hierarchy of Needs
Target Market
34
Market Location
35
Market History
36
Geographic Analysis
37
Climate
39
Market Scope
41
Market Size and Growth Rate
42
Attractive Features of the Market
44
Difficulties and Problems in the Market
45
Existing Demand for Our Boutique
46
Competitive Analysis
47
Primary Competitors
47
Composite S.W.O.T.
48
Indirect Competition
49
Marketing Environment (Part 1)
50
Politics and Economics
50
Nation – United States State – Washington County - King City – Bellevue Sub-City – Downtown Bellevue
Legal/Regulatory/Tax/Licensing Criteria
60
Top 20 Regional Employers
64
Marketing Environment (Part 2)
65
State – Washington County – King City – Bellevue
3
Social Issues
65
Education Levels Family Size and Structure Birth Rates Housing/Poverty/and Crime Rates
Cultural Issues
70
Ethnicity and Sensitivity Toward Ethnic Mix
Religious Issues
71
Night Life
72
Technological Advances
77
Environmental Issues LEED Certification
79
Restaurants The Arts Movie Cinemas Nightclubs; Bars; Lounges Parks and Sports Spas and Salons Parades
Marketing Strategy Plan Promotional Plan
82
Image Statement
82
Marketing Mix
83
Product Price Place
Promotional Mix
87
Advertising Strategy Direct Marketing Strategy Public Relations Strategy Personal Selling and Sales Promotion Internet Strategy
Tactical Plan
90
Gantt Chart – Store Opening Gantt Chart Outline
90
Grand Opening
94 4
Gantt Chart – 12 Months After Opening Gantt Chart Outline
95
Reach; Frequency; Advertising Budget
101
Pricing Plan
102
Pricing Objectives and Pricing Strategies
102
Mark-Ups and Mark-Downs
103
Stock Turnover
103
Forms of Payment (Vendors)
104
Distribution Plan
105
Off-Site Sales
105
Shipping Price Chart
105
Forms of Payment (Customers)
106
Operations Plan Inventory Control/Management Function
108
Planning; Forecasting; Projecting Seasonal Needs; Buying Resources and Procedures
108
Trend Analysis
109
Tracking Stock on Hand and External Control
109
Human Resources
110
Taxes; Legal; and Accounting
110
Hiring Process and Qualifications
110
Training Plan and Procedures
111
Dismissal Procedures and Criteria
111
Benefits and Qualification Criteria
112
5
Facilities Maintenance
113
Janitorial Opening and Closing Procedures
113
Security
113
Customer Service
114
Complaints
114
Return Policy
114
Referrals
114
After Sale Problems
115
Financial Plan
116
Appendices
129
Appendix A
130
Appendix B
132
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A nd r e a s EXECUTIVE SUMMARY
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Mission Statement At Andreas our goal is to dress the young 25 to 35 year old professional, career-oriented woman. Our products offer a variety of chic merchandise that can be mixed and matched to be worn for many different occasions. Whether it is work or play our consumer will feel fashionable and trendy no matter where they are. Our products will give them a sense of sophistication and youthfulness at the same time. Our boutique is H&M stylish, but with the quality of Banana Republic apparel. The Andreas consumer shops our store to find clothing that is professional and comfortable with quality that will withstand wash and weather. They visit us in search of apparel that sends a vibe of youthful sophistication. Andreas is set to open June 1st, 2012 with a soft opening followed by a grand opening on June 7th, 2012. We will be located in the heart of downtown Bellevue, Washington. This area is surrounded with restaurants, Bellevue Square mall, and a local park is located nearby. The market is flooded with our targeted primary and secondary consumers. At Andreas, we believe consumers should get more for their money. That is why our merchandise is made at a higher quality at a price they can afford. Every woman at any age should be able to dress professional, but chic. Our goal is create a bond with our consumers and make them fall in love with the products we offer and the service we provide. Our friendly and knowledgeable sales staff will be able to help and assist any customer who walks through our doors.
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Funding Success Factors Bellevue, Washington has a high number of our targeted consumers.
o Our targeted consumer makes up 25.5% of Bellevue’s total population and the median income in Bellevue is $79,954. We can also assume customers will come to our store from surround cities such as, Seattle, Mercer Island, Renton, Issaquah, etc.
A wide selection of apparel as well as shoes and accessories to accent the clothing. o At Andreas we offer the complete outfit. Consumer’s don’t just spend their money on a top and a pair of pants. They also get to choose from shoes, and accessories to dress up their new apparel. Also, by carrying these products we are given opportunities to upsell and bring in extra revenue.
Warm and inviting atmosphere. o Our environment at Andreas allows our customers to come into the boutique and wind down from their busy, hectic lives. It is a place to get away, relax and spend some time shopping for some well deserved merchandise.
Outstanding customer service and friendly, knowledgeable salespeople. o
Our sales people will not only be trained in basic customer service, but they will also go through workshops to learn about the different types of VALS consumers and Maslow’s Hierarchy, so when a customer comes into the store they can identify which type they are and the best approach to sell to them.
Quality merchandise o One of our goals is that consumers will keep coming back because they are impressed with the quality that our merchandise offers. Consumers don’t want to buy a sweater or a pair of slacks if it is going to fall apart in the washing machine. Other stores throughout the market that target our demographic may offer similar products, but at lesser quality and consumers want to buy merchandise that lasts. Social networking and the launch of our store website. o
Social networking is a great, inexpensive way to reach potential consumers throughout the area that may not know about our business already. Once the launch of our website takes off we will have another source of revenue and it will raise awareness of our boutique.
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Section Summaries The business plan for Andreas Boutique is comprised of the following sections: The Company Overview o
The Company Overview is comprised of the Owner and Organization section and the Overall Strategy section. Information about our basic business concepts, legal ownership, a store opening timeline, short and long term objectives, and company resources can be found.
Market Analysis o
Our Market Analysis is made up of Customer and Client profiles, Target Market, the Competition and the Marketing Environment. Information about our VALS consumer and the statistics about Bellevue, Washington and surrounding cities are included in this portion of the plan.
Marketing Strategy Plan o
The Marketing Strategy Plan includes the Promotional Plan, Tactical Plan, Pricing Plan and the Distribution Plan. These sections include information about our pricing objectives and strategies, mark-ups and mark-downs, our image statement and information about our advertising plans.
Operations Plan o
The Operations Plan is made up of Inventory Control, Management Functions, Human Resources, Facilities Maintenance and Customer Service. In these portions information about our hiring and training and dismissal procedures can be found as well as, information regarding security, our return policy, and referrals.
Financial Plan o
The Financial Plan includes Projected Income Statement with both best and worst case scenarios, opening and closing inventory, opening balance sheet, a start up budget, closing balance sheet with both best and worst case scenarios. Charts and graphs are also included.
Appendix A, B, and C
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A nd r e a s COMPANY OVERVIEW
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Owner and Organization Basic Business Concept Andreas is a small boutique that offers mid to high end professional apparel. Our boutique offers apparel, accessories, and shoes that are appropriate for the workplace and can be transformed to wear out for date night. Andreas is a cross between H&M, Banana Republic, and J. Crew. The importance of Andreas is to offer women stylish clothing of good quality that they can wear to work, or wear out on the town with the feeling of looking youthful and fashionable. Our main price point ranges from $50 to $100, but we carry low-priced and more expensive merchandise to accommodate consumers with different budgets. Our brands we carry include Free People, MICHAEL by Michael Kors, Kenneth Cole NY, Juicy Couture accessories, and shoes by Steve Madden and Jessica Simpson. The market demand is affecting our decision making to carry these products because women want chic fashionable clothing that they can wear both to work and a night out without spending a fortune. The need for our business is that young consumers want a place to shop where they are getting quality merchandise at a price that is not too expensive, but doesn’t say cheap material; women need a greater variety of youthful, professional, comfortable clothing that work for multiple occasions; fashion is always in high demand; and consumers want a place to shop that isn’t crowded and noisy. Our business will be driven by both by volume sales and high margins of profit. Our price point lets our consumers know that they are getting quality merchandise, but at still affordable prices. Our mark-ups are around 200-300 percent so we can pay all of our expenses and still make a high profit off our sales.
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Legal Form of Ownership Andreas will be owned and operated by Kaitlin Andreas of Seattle, Washington. The local boutique will function as a Sole Proprietorship. As an independent business owner with a Bachelor of Science in Fashion Marketing and Management Degree the Art Institute of Seattle graduate has the knowledge and skill set it takes to control a successful business.
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Overall Strategy Short Term Objectives Objective #1: To get involved in the local community. Timeline: Within the first six months. We will participate in local events around Bellevue to get to know people and potential consumers throughout Bellevue. Events such as, the Seafair Marathon, the 24-Hour Relay, the Strawberry Festival, Magic Season Downtown and the Family 4th of July. Supporting local programs and sports teams around the community to show our involvement such as, Bellevue’s Baseball/Softball Athletic Association, the FC Rainier Male Soccer Team and the Seattle Jets Field Hockey Team will allow us reach new members of the community. Once we are known throughout the community by our support and involvement we can depend on them to support our business in return through sponsorships, advertising, and positive reviews.
Objective #2: To start up the Andreas website for an extra source of revenue. Timeline: Within the first year. Once we have a steady income from our brick and mortar we can start selling and shipping merchandise from an online store. We can broaden our market scope and sell to new consumers who don’t have the ability to travel to our physical location. We can utilize our website to locate new areas that could be potential locations to expand our boutique bases on the number of visitors we get from certain locations.
Objective #3: Decrease advertising expenses. Timeline: Within the first four months of opening. We plan to do a lot of promotional events to get a lot of press such as, “VIP” customer shopping advantages, webpage member advantages, buy two get one free accessories, and buy one get one half price apparel, etc. We will also be using social networking sites such as, Twitter and Facebook to get word out about our business by contacting target consumers living in our area. We can rely on our involvement in the community and the advertisements created for our grand opening to get the word out about Andreas.
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Long Term Objectives Objective #1: Develop our own Andreas brand clothing line. Timeline: Within 4 years after opening. Working with fashion designers to create a concept and a line of clothing branded with our name or logo to be sold in the store. Advertising and promoting our clothing brand could attract new consumers and get our name out into the public more. We will have the opportunity to not only connect with our loyal in store consumers, but also have the ability to form a brand loyal consumer base as well.
Objective #2: Broaden our target market and carry merchandise for men and children. Timeline: Within 3 year after opening in Bellevue. Once we have a defined female consumer base we will start to target and advertise to men to reach another market. We will start trying to sell this new merchandise over our website to find out how successful it sells. We can build and add on to our venue to create space to carry more merchandise for our new consumers.
Objective #3: Expanding to new areas around the state. Timeline: Five years after opening in Bellevue. By getting word out about Andreas Boutique and finding ways to bring in new business we can increase our bottom line and with enough success start expanding into new areas. We plan to acquire more consumer business by supplying popular brand names such as Steve Madden, Jessica Simpson, and MICHAEL by Michael Kors that are popular among shoppers. By utilizing our website to track visitors we can locate areas that would make expanding a successful business decision.
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Company Resources Management Structure In order for a business to be successful it has to be controlled by a knowledgeable management team. Each position will have designated duties to perform in order to maintain organization throughout the business.
Store Manager
Assistant Store Manager
Sales Associate
Sales Associate
Assistant Store Manager
Sales Associate
Sales Associate
Assistant Store Manager
Sales Associate
Sales Associate
Duties: Store Manager: Buys merchandise Manages Assistant Store Managers Schedules Assistant Store Managers Focuses on income and expenses Inventory Assistant Store Managers: Manages Sales Associates Schedules Sales Associates Counting and Recording hourly income Read and record labor reports Visual merchandising Sales Associates Customer service Maintaining organization and cleanliness throughout the store Cashier 18
Finances Another factor that affects a business’s success is the financial aspect. We have decided that for the best results 40% of the business’s total start up expenses will come from personal savings; 20% will come from family; and 40% will be taken care of by loans from Bank of America.
Market Scope It is important to look at cities in a close proximity to the location of our business because we can consider the people in these areas as potential consumers. Most people travel to different areas when they go to work, school, shopping, running errands, etc. so it is crucial to know where they are coming from. Potential consumers in surrounding areas could possibly be traveling from Mercer Island (98040), Burien (98166), Renton (98055, 98056, 98057, 98058, and 98059), Issaquah (98027, 98029), Redmond (98052, 98053, 98073), Kirkland (98033, 98034, 98083) and Seattle (for zip codes see: http://www.city-data.com/city/Seattle-Washington.html).
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Basic Orientation At Andreas our business is driven by margin and product. We rely on the need for our merchandise to drive our business. Women want to be able to buy affordable, high quality clothing that they can wear both to work and out on the town. The problem with existing shops similar to ours only offer one or the other, affordable prices or quality merchandise. At Andreas we offer both with our product. We are also driven by margin. The bottom line is if we do not make enough in sales to pay off our cost of goods the business will fail. This is why we are determined to train our sales people in consumer behavior and motivation instead of just basic customer service. We have to be selling and turning over merchandise at a rate that is high enough to exceed our cost of goods; as well as, pay off our operational expenses as well in order for the business to be profitable.
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Problems Expected and Contingency Plan Competitors lower price ranges are difficult to compete with. o
We will guarantee our consumers with better quality and constructed clothing. We will have to show and demonstrate to them that our higher prices are worth paying for the quality of our merchandise that our competitors lack.
Weather conditions may prevent people from shopping. o We will offer in-store promotions that will be advertised on our website to give our consumers incentive to come out and shop on days that the weather might try to keep them indoors.
The growing population and market may cause crime rates to increase. o A hired security guard could give our customer’s a sense of safety when they come to shop our store.
The economy makes it more difficult for new businesses to attract consumers. o Special promotions like, free style advice from a professional fashion stylist could bring people into the store because when times are tough they want to find ways to feel good about themselves. Too much space is hard to fill without enough merchandise. o
Since we are not located inside a mall we have more space to do business; however, we may end up with more space than we need for our merchandise. We could fill these vacant spots with more visual displays or utilize them for events (i.e.: space to bring in a live DJ).
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A nd r e a s MARKET ANALYSIS
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Consumer Profile The consumer analysis provides information related to the demographics of Bellevue, WA where our apparel boutique, Andreas, will be located. The psychographics of our targeted consumer also appear in the consumer profile. These findings are extremely important to support our decision to locate the boutique in this specific city because it is necessary to be located in an area where our targeted consumers are located or the survival of the boutique would be very risky. It is also important to know the lifestyle of our consumer so we will know how to reach them and spark their interest. Demographics of surrounding cities and King County are also included because the short driving distance between cities allows residents living in these areas to travel to our location. Bellevue, WA Latitude: 47.60 N Longitude: 122.16 W1 Size of City: 30 sq. miles2
Demographics The demographics are helpful in providing information that will help predict the success of a business based on the targeted consumer market. As of July 2009 the total population for Bellevue, Washington is 126,626 and has grown 15.65% since the year 2000.3 The population is important because the higher it is the number of customers will increase. The success of the business and the profit are all determined by how many customers come in.
Age and Gender Most businesses target their consumers based on age and gender, these factors are important because products and services appeal differently to each sex and age group, and when a business is able to focus on the aspects that attract their target market the result is an increase in sales.
1
http://www.city-data.com/city/Bellevue-Washington.html http://quickfacts.census.gov/qfd/states/53/5305210.html 3 http://www.city-data.com/city/Bellevue-Washington.html 2
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At Andreas, our main focus is to target women between their mid-20’s and mid-30’s. This also includes women as young as 18 up to the early 40’s who dress to feel older or younger and can also be included among our primary target consumers. Among the 63,819 females in Bellevue our target market makes up 25.5% which does not include surrounding cities. 4 The first graph that is displayed
Female Population
on the right represents the percentage of our targeted consumer compared to the total female population of the area. This helps us to visualize the amount of people we are primarily focused on. The second graph displayed
Female Population
below shows a population breakdown of
Target Consumer
our targeted consumer (presented in the first graph) based on age. What we can tell by looking at this graph is that our largest targeted age group is between the ages of 31 and 35 years old which falls into the median age not only in Bellevue, but in Washington State as well.5
Primary Female Consumer 5,000 4,000 3,000 2,000 1,000 0 18-20
4 5
21-25
26-30
31-35
36-40
http://www.city-data.com/city/Bellevue-Washington.html IBID
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Education, Income, and Occupation At Andreas our products are in a mid to high price range. We carry a range of designer apparel, accessories and shoes. In order to be sure our products sell and the boutique will survive in a certain location education, income and occupation are all important factors that play in to the position of the business. The higher level of education a person has, the better their occupation, and the higher their income to cover the cost of our product. Educational statistics
Education
100.00%
are exceptional in Bellevue to
80.00%
support our boutique. The
60.00%
women we are targeting have
40.00%
Bachelors Degree or Higher
20.00%
Graduate or Professional Degree
higher educational degrees and over half of the city has a
High School Diploma
0.00%
bachelor’s degree or higher. The graph on the right shows
For Population 25 Years and Over
the percentage of each education level which offers visual evidence. Because of higher education levels people are able to obtain jobs in higher paying industries. On Bellevue’s city website there is graphical evidence that displays which industries women are working in compared to women in the whole state area. The graph below is identical to the graph shown on their website.
Most Common Industries for Women 16% 14% 12% 10% 8% 6% 4% 2% 0%
Bellevue Washington
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The median household income in Bellevue, Washington is $79,954.6 This number is over $20,000 higher than the median state income. This is a relatively high income compared to other cities meaning they have a higher disposable income which can be spend in our store. This may be due to the higher education and occupation levels people have in Bellevue. The statistics concerning education, occupation and income is important for both our primary and secondary consumers. Marital Status and Family Size Our ideal Andreas shopper is a single or married woman with no kids who has plenty of disposable income to spend on herself. Therefore it is important to note that the average household size is 2.4 people which may or may not include children.7
6 7
http://www.city-data.com/city/Bellevue-Washington.html IBID
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Psychographics It is extremely important to understand the lifestyles of our consumers. In order to be able to attract customers we have to be able to know the general idea of what their life is like. Their interest, hobbies, and their life on a day to day basis will give us a good idea of what they find interesting and exciting in their life. When we are able to relate with a consumer and their lifestyle we will know that they will feel comfortable and relaxed when they come in. “Day in the Life” of Our Target Consumer Lauren is the typical Andreas consumer. She is 26 years old, lives in a one bedroom apartment with her golden retriever, Lucy. Lauren has a bachelor’s degree in business and works for Apple Inc. Every week day morning her alarm goes off at 7am and she hops in the shower to wake herself up while her coffee starts to brew. She loves the smell of her Pantene shampoo and conditioner. An hour later she runs out the door, jump in her newly purchased BMW and speeds off to work. She walks in wearing her favorite Elizabeth and James high heels, black Kate Spade New York pants, and the same designer’s silk blouse. She spends the next eight hours working on a project her boss assigned her a week ago that he said is due at the end of this week. Lauren is a well respected employee because she’s proven she is a professional and there’s nothing she wouldn’t do for her career. “Keep up this work and expect a promotion really soon” he told her after she turned in her last assignment. Her college degree from the University of Washington is finally paying off. Lauren leaves work a little after 5 pm. to meet her cousin at their favorite local Italian restaurant for dinner. They discuss life in general like they always do; work, family, and their barely existent love lives due to their hectic work schedule. The two girls discuss their recent purchases and the new pair of Marc Jacobs heels that Lauren just purchased because they were to die for! After about an hour and a half of catching up she runs off to meet her college best friends and her boyfriend, Ben, who complains she never has any time for him. There are just more important things in life, but she doesn’t tell him that. They all meet up at happy hour at the 520 Bar and Grill which they have become familiar with for a glass of wine. The group jokes around for a while and
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decides to make plans to take a road trip one weekend to Oregon to go to the beach. Later, Ben comes over to watch a movie since she kind of feels bad for never having enough time to spend with him. After she has kicked him out because of her long day trying to balance her career and a social life Lauren lays in bed with a book from her favorite author, Jodi Picoult to wind down for the night. Free Time Activities Television Grey’s Anatomy CSI Project Runway Entertainment Tonight Lost
Law and Order The Bachelor The Bachelorette Sex and the City Reruns Friends Reruns
Movies
The Breakup Little Miss Sunshine Requiem Titanic The Notebook Pearl Harbor Sex and the City What Happens in Vegas Pirates of the Caribbean
Radio
KNDD 107.7fm Alternative KISW 99.9fm Rock KKWF 100.7fm Country
Hobbies Exercising o Bikram Yoga Shopping o Nordstrom o Urban Outfitters o Banana Republic o Abercrombie and Fitch o Gilly Hicks Traveling o Europe Paris, London, Italy, Ireland
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VALS Based on their lifestyles, social activities and hobbies we can assume that our primary consumers fall into the VALS categories of Innovators, Experiencers, and Thinkers. Our younger consumers most likely fall into the category of Experiencers, while the more mature, career oriented consumers more than likely fall among the Innovators and Thinkers. Innovators Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services. Image is important to Innovators, not as evidence of status or power but as an expression of their taste, independence, and personality. Innovators are among the established and emerging leaders in business and government, yet they continue to seek challenges. Their lives are characterized by variety. Their possessions and recreation reflect a cultivated taste for the finer things in life.8
Our Andreas consumer that we would identify as an Innovator is our independent woman who is not afraid to step up and speak her mind. Her self confidence is what led her to be a successful individual. She lives for herself and dresses to express her own tastes and personality without worrying about the opinions of other people. She is on the fast track to getting what she wants. Whether it’s this season’s new Prada handbag or the new job opening higher up in the company she works for, she is going to get it. She always wants to learn more and craves opportunities where she can excel. She probably doesn’t even know the definition of “boring”. If the chance arises for her to solve new problems she takes it. We know this consumer when she walks in the door because her self confidence is apparent and she knows what she is looking for. In order to connect with this consumer we must notice what is unique about her, like the brands, colors, and patters, she wears in order to know what appeals to her. From that judgment we can steer her in the direction of what we believe she would be interested in. Experiencers Experiencers are motivated by self-expression. Young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and excitement, savoring the new, the offbeat, and the risky. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities. Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis that they place on looking good and having "cool" stuff. 9
8 9
http://www.strategicbusinessinsights.com/vals/ustypes.shtml IBID
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Our Experiencers make up most of our younger demographic. They lack the self esteem that our Innovators have which is why they purchase items to make them “look good” and so they can have “‘cool’ stuff”. Women who are Experiencers like to feel like they belong and they also want to feel accepted by other people their age. Their impulsiveness causes them to buy without considering if they really need the product, how often they are going to use it, whether or not it is overpriced, etc. They like to be the first to know about what is new and happening. They crave social activities, sports, and outdoor recreation because it is another place for them to fit in. These consumers are spontaneous and crave excitement in their life because if they didn’t have it they would probably be bored and most likely wouldn’t feel like their life was fulfilling in any way. Fashion, entertainment, and socializing are key aspect to the lives of Experiencers because it’s their way of keeping up to date with what other people like. Without these aspects they wouldn’t have any knowledge about what people are interested. They spend their money in ways to make them feel like they belong somewhere and are accepted by other people. We can recognize this consumer when she walks in the door because she is probably wearing the latest trends, listening to the latest music on her iPod, she most likely has gotten her hair recently trimmed or highlighted, and her nails are probably freshly manicured. We can connect with this consumer by complimenting her new cardigan so she knows that we noticed and then leading her right over to our new inventory to show her the new trends that are coming out. Thinkers Thinkers are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. They tend to be well educated and actively seek out information in the decision-making process. They are well-informed about world and national events and are alert to opportunities to broaden their knowledge. Thinkers have a moderate respect for institutions of authority and social decorum but are open to consider new ideas. Although their incomes allow them many choices, Thinkers are conservative, practical consumers; they look for durability, functionality, and value in the products that they buy.10
We can identify our Thinker consumer who walks in the door by the way she carries herself. This consumer is comfortable in her own skin, and presents herself this way. She doesn’t feel the need to be the center of attention or voice her every opinion because as long as she is comfortable with herself then she is happy. She doesn’t need other people to approve of her in order to make her feel satisfied. She is well educated and knowledgeable which we know our Andreas consumer is based on her higher level of education. Thinkers are the opposite of Experiencers in that they don’t buy on impulse. They don’t spend money on a product unless they know it is worth it. They don’t focus on expression, or worry about the latest trends, but their maturity, professionalism and income make them a target consumer.
10
IBID
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In order to connect with this consumer we don’t need to focus on new merchandise or the latest trend. The approach we need to take when selling to this consumer is quality. She wants to know she is spending money on products that are going to last and be a good investment. She is also open to new ideas so showing her a new product that she may not normally be attracted to and explaining the benefits may even open her mind to it. PRIZM NE We can classify our targeted consumers using PRIZM segments which help us to identify our consumer based on the location they live. According to each description we can identify our consumers as Brite Lites, Li’l City, Up-and-Comers, and Executive Suites. A large number of Brite Lites, Li’l City and Upand-Comers are located in Bellevue, WA. Executive Suites, who are also described as our targeted consumer are most likely located in cities nearby Bellevue, or may be tourists who are on vacation.
Brite Lites, Li'l City Upscale, Middle Age w/o Kids Not all of America's chic sophisticates live in major metros. Brite Lights, Li'l City is a group of well-off, middle-aged couples settled in the nation's satellite cities. Residents of these typical DINK (double income, no kids) households have college educations, well-paying business and professional careers, and swank homes filled with the latest technology.11 Our Brite Lites, Li’l City consumer are similar to our Innovators. They are successful, educated, professionals who know what they like and what appeals to them. They are able to keep up with the latest technology and their “swank homes” are most likely decorated to express themselves.
Up-and-Comers Upper-Mid, Middle Age w/o Kids Up-and-Comers is a stopover for younger, upper-mid singles before they marry, have families, and establish more deskbound lifestyles. Found in second-tier cities, these mobile twentysomethings include a disproportionate number of recent college graduates who are into athletic activities, the latest technology, and nightlife entertainment.12 The Up-and Comers are most similar to our Experiencers. They are young people who are very social, release their energy through sports and are very knowledgeable when it comes to
11 12
http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&SubID=&pageName=Segment%2BLook-up IBID
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technology. Being young and social they are probably concerned with making an good impression, so they wear the latest trends and are concerned with their appearance. Executive Suites Upper-Mid, Middle Age w/o Kids Executive Suites consists of upper-middle-class singles and couples typically living just beyond the nation's beltways. Filled with significant numbers of Asian-Americans and college graduates--both groups are represented at more than twice the national average--this segment is a haven for white-collar professionals drawn to comfortable homes and apartments within a manageable commute to downtown jobs, restaurants, and entertainment.13 The Executive Suites are very similar to our Thinkers. They are comfortable with themselves and their lifestyles. They are educated professionals and they know what they want out of life, but they are also open to new ideas and they go with the flow knowing that life is unpredictable. They don’t need brand names merchandise to feel good about themselves. They are most concerned with what is practical.
13
IBID
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Maslow’s Hierarchy
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Target Market Market Location Market location is extremely important to the survival of the business. It is not only important to know that it is in an area that is surrounded by our target demographic, but it is also important to be aware of surrounding competition because a business won’t survive if it can not compete well enough with its rival. We have chosen to locate Andreas in downtown Bellevue. This location is full of activity and surrounded by appartment buildings, hotels, shopping centers, restaurants, art galleries and Bellevue Downtown Park is located nearby. This area offers public transportation and has easy access to the interstate. Downtown Bellevue is continuing to grow with developments that are happening currently and in the near future. Most of these developments include apartment buildings, townhouses, and hotels.14 We have chosen to locate our business in the 200 Plaza Building in Downtown Bellevue at the intersection of 105th Ave NE and NE 2nd Street.15 This location is one block East of Bellevue Downtown Park and one block North of Main Street and is surrounding by thriving businesses and restaurants. We have available parking for our customers and easy access to main roads and the interstate.16
14 15 16
http://maps.google.com/maps http://www.cbre.com/usa/us/wa/bellevue
IBID
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Real Estate Advertisement EASTSIDE/BELLEVUE - RETAIL 10/20/2010 Bellevue s) 200 Plaza Building 210 105th Ave NE Bellevue, WA 4,800 sq. ft. Rate: $25.00 PSF (plus $3.00 PSF NNN) Visible end cap available with signage opportunities on three facades. Excellent locations in the heart of downtown Bellevue–located one block off Bellevue Way and adjacent to the new Safeway mixed-use development. The 200 Plaza Building offers easy access from SR-520, I-90, I-405, and major arterials. 59 parking stalls for customer use (19 surface stalls).17
17
http://www.cbre.com/usa/us/wa/bellevue
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Market History William Meydenbauer and Aaron Mercer were the first settlers in Bellevue. They arrived in 1869. Meydenhauer was a baker and Mercer was a farmer. After they sold their land and moved they left only their names behind (Meydenbauer Bay and Mercer Slough).18 “In 1882, Isaac Bechtel Sr. bought land near the present downtown area. For the next few years he and sons logged and cleared the land. Other settlers followed, and by 1890 a sawmill, shingle mills, and farms dotted the area. The growing community also had a school and a few businesses.�19
Aaron Mercer
According to the 1900 census Bellevue population was 400 and grew to 1,500 by 1910. It was the center for berry growing in King County, and many wealthy Seattle families were locating there. The Hewitt Lumber Company of Tacoma was employing hundreds of men and as a result the city was growing. Access to Puget Sound was available in 1917 when the Lake Washington Ship Canal opened, which brought new and more business to Bellevue.20 The farming business however, was still the most productive industry. The construction of the first bridge in 1939 over Lake Washington changed Bellevue from a farming community to a active suburb.21 Then in 1946 the first shopping mall in downtown Bellevue was opened by Kemper Freeman which caused business growth nearby.
Kemper Freeman
In 1953 the city was incorporated and was names the All-American City two years later by the National Municipal League and Look Magazine. Skyscrapers were soon developed and many banks moved their headquarters to Bellevue, making it one of the richest cities in Washington.22
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=313 IBID 20 IBID 21 IBID 22 IBID 18 19
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Geographic Analysis Downtown Bellevue covers over 400 acres and includes 4.5 million square feet of retail and entertainment space and more than 9 million square feet of offices.23 Two of the Eastside’s popular arts and convention centers are located in Downtown Bellevue along with the King County Regional Library and the two lead retail centers, The Bellevue Collection and The Bravern. “It has been estimated that over the next 20 years, 75% of Bellevue’s population and employment growth will occur in downtown”.24 Local destination nearby Downtown Bellevue include close to twenty businesses offering Art and Culture services alone including, the Bellevue Arts Museum, Ballet Bellevue, Eastside Heritage Center, Bellevue Chamber Chorus, The Theatre at Meydenbauer Center, Bellevue Youth Theater, and more. Kids Quest Children’s Museum is a local place for a fun family activity. The Bellevue Aquatic Center and Robinswood Tennis Center offers plenty of opportunity for sports and exercise. Many community parks and recreational centers allow for entertainment in local areas as well. Bellevue has over 145 headquarter companies and its’ key industries include finance, real estate, insurance, professional services, retail, high-tech, wholesale, trade, communications and utilities.25 Traffic patterns in downtown Bellevue are modeled in the map on the following page. What is evident by looking at the map is that traffic in the downtown area is usually light in most areas. Intersections where traffic is turning onto main roads and either entering, or exiting the interstate are where traffic becomes more moderate, but not too extreme. The heavier areas of traffic are in the most active areas where there are intersections near the interstate, but these areas are very rare.
http://www.bellevuedowntown.org/downtown/index.html IBID 25 http://www.bellevueadvantage.com/advantage/advantage.aspx 23 24
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Downtown Bellevue Traffic Map
http://trafficmap.cityofbellevue.net/default.asp
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Climate Climate is important to consider when finding a location for your business because it can be useful in predicting what parts of the year will be slower and which will be busier. It is also helpful when deciding which items to carry in your business because consumers are going to buy weather appropriate clothing to suit their needs. What we can tell by examining the graphs below is that compared to the US average climate Bellevue’s average and high temperatures fall into the US average, but the low temperatures during the summer months fall below. It is also very clear that Bellevue gets much more rain during the fall and winter months that other areas do. The city also doesn’t receive as much sunshine throughout the year and gets very little clear days even during the summer season; however, wind speeds don’t reach as high as other locations. Even though precipitation and cloud cover are above average, during the winter months the amount of snowfall falls right into the US average.
**Graphs provided by City-Data.com/city/Bellevue-Washington.html
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**Graphs provided by City-Data.com/city/Bellevue-Washington.html
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Market Scope It is important to look at cities in a close proximity to the location of our business because we can consider the people in these areas as potential consumers. Most people travel to different areas when they go to work, school, shopping, running errands, etc. so it is crucial to know where they are coming from.
Mercer Island:
Burien:
Zip code: 98040 Direction: South West Distance: 6 miles Population: 22,036 Female Pop: 12,748 Zip code: 98166 Direction: South West Distance: 18 miles Population: 31,881 Female Pop: 16,266
Renton: Zip codes: 98055, 98056, 98057, 98058, 98059 Direction: South Distance: 11 miles Population: 50,052 Female Pop.: 31,212 Issaquah: Zip codes: 98027, 98029 Direction: South East Distance: 12 miles Population: 11,212 Female Pop: 6,241 Redmond:
Seattle:
Zip codes: See: http://www.citydata.com/city/Seattle-Washington.html Direction: West Distance: 11 miles Population: 563,374 Female Pop: 309,450
Zip codes: 98052, 98053, 98073 Direction: North Distance: 9 miles Population: 45,256 Female Pop.: 26,181
Kirkland: Zip codes: 98033, 98034, 98083 Direction: North Distance 7 miles Population: 45,054 Female Pop: 24,932
*City information was provided by: http://www.city-data.com **Distance was found at: http://www.mapquest.com
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Market Size and Growth Rate We want to know when we locate our business that the market is thriving and continuing to grow. In order for the business to be a success and to keep surviving it is crucial that consumers choose to come to our location than go somewhere else. The market has to be able to keep up with the advancements of other cities or it will lose its attraction and its consumers. As of 2008 Bellevue has 2 million square feet of office space, 403,000 square feet of retail and commercial space, and 3,300 apartments and condominiums under construction and the city has continued to grow.26 Ever since Symetra Financial placed its headquarters in downtown Bellevue in 2004 there has been an increase in technological businesses including Microsoft, Yahoo, Google and Expedia.27 Two years ago city officials were looking over proposals that would increase office square footage by 1.3 million, retail and commercial by almost 650,000, and 2,700 apartments and condos. The growth of the city is mainly due to commuting issues. People wanted to live close to work so they wouldn’t have to drive as far. Another reason is that downtown Bellevue seems a lot safer to people than downtown Seattle, so when they are looking to relocate they want to go where they are going to feel safe and comfortable.
Downtown Bellevue Predicted Population Growth
Dowtown Bellevue Predicted Housing Growth
16,000
12,000
14,000
Population
10,000 8,000
2008
6,000
2020
4,000
26 27
8,000 2008
6,000
2020
4,000 2,000
2,000 0
Number of Houses
10,000
12,000
2008
2020
0
2008
2020
http://www.seattlepi.com/local/366203_bellevue07.html IBID
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Dowtown Bellevue Predicted Office Space Growth
6,000,000
14,000,000
5,000,000
12,000,000
Square Footage
Square Footage
Downtown Bellevue Predicted Retail Space Growth
4,000,000 3,000,000 2,000,000 1,000,000 0
10,000,000 8,000,000 6,000,000 4,000,000 2,000,000
2008
0
2020
2008
2020
Dowtown Bellevue Predicted Job Growth 70,000 60,000
Number of Jobs
50,000 40,000 30,000 20,000 10,000 0
2008
2020
*Information for graphs provided by http://www.seattlepi.com/local/366203_bellevue07.html
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Attractive Features of the Market Downtown Bellevue offers many forms of entertainment, restaurants and recreational activities to its community. o
People are attracted to communities that offer a lot of entertaining things to do. They like having a variety of options, and when those options are all offered in one location it is a bigger advantage to them because they save time and money without having to commute elsewhere.
The city continues to grow with new developments of new office buildings, apartments and condominiums, and new retail and entertainment venues.28 o
The expansion of the city brings new job opportunities and more residents change locations to be closer to the developments. In conclusion, population rises along with new consumers who need our products.
Many events take place in Bellevue which gives residents a chance to get involved in their community. o
People like to get involved and feel connected with their community. They feel comfortable with the area they are living when they form connections with other residents. They feel a need to support their community and the businesses in it.
Crime rate statistics prove Bellevue has lower crime rates than the US average.29 o
Safety is the biggest concern to most people when they leave their home. People don’t like to go out into an area where they feel threatened. So, it is an advantage that crime rates are lower because the residents feel comfortable to run errands, go shopping, etc. This may even give more people a reason to choose Downtown Bellevue over Downtown Seattle where crime rates are much higher.
The median resident age in Bellevue is 38.2 and the median household income is $79,954.30 o
Our target market is women between the ages of 20 to about 40 with a higher income and the demographics of Bellevue fall into this target. Without these women it would be difficult for our business to survive in the area.
Unemployment rates have been dropping since 2009.31 o
With unemployment rates going down more and more people are earning an income. This allows them to have more money to spend on necessities, as well as, a disposable income for entertaining activities.
28
http://www.bellevuedowntown.org/downtown/index.html http://www.city-data.com/city/Bellevue-Washington.html> 30 IBID 31 IBID 29
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Difficulties and Problems in the Market There is a lot of direct retail competition, as well as, indirect competition in Bellevue. o
The active area of Downtown Bellevue may bring more people and tourists to the area which is good for our business, but people are only willing to spend so much money. Consumers have a lot of opportunities to spend their money elsewhere, whether it be at another retail store, a theatre, restaurant, etc.
Weather conditions may prevent people from going out. o
Bellevue spends a lot of the year covered in clouds and is in a location that receives a lot of rain. A person’s serotonin levels drop in areas that don’t receive as much sunlight. So, depression rises, which prevents from people from leaving their home. So, it may be more difficult to bring consumers into the store when they are in the mood to stay at home.
Residents and tourists may choose to go to Seattle instead of Bellevue. o
There are higher levels of activity in a big city like, Seattle. People who enjoy the bustle of activity are more likely to travel the short distance to Seattle to do their shopping which would cause our sales to drop from the loss of business.
The median rent in Bellevue is $1,17232 which is higher than the average Washington State rent which is $730.33 o
The higher cost of rent causes people to have less disposable income. They won’t come to our business if they don’t have enough money to spend because they have to pay for rent instead.
The lack of advertisements in Bellevue creates a barrier for our non-resident consumer. o
Not many tourists know of Bellevue, Washington and there is a shortage of advertisements throughout Seattle and surrounding areas broadcasting Bellevue’s businesses and attractions. Since tourists mainly visit Seattle and residents of other cities most likely don’t venture out too often it might be more difficult to bring them to our location.
32 33
IBID www.rent.com/rentals/washington
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Existing Demand for Our Boutique Young consumers want a place to shop where they are getting quality merchandise at a price that isn’t too expensive, but doesn’t say cheap material. o
Our boutique is a cross between H&M and Banana Republic. We offer the prices that Banana Republic does, which ensures a higher quality of product that will last longer; however, we offer the trends similar to H&M for the younger target market.
Fashion is always in high demand. o
Consumers, mostly women are always keeping up on current trends. They buy what is in fashion to look up-to-date and chic. Fashion is everywhere, on television, in magazines, on the internet, fashion sites and consumers are doing what they can to keep up with it.
Women need a greater variety of youthful, professional, comfortable clothing that work for multiple occasions. o
Women dress to feel youthful and fashionable. It is difficult to find merchandise that is good quality, trendy, professional and age appropriate. Young women want to be able to find an outfit that works both for day and the night at prices that mean quality, but without feeling like they are wearing their mother’s clothes.
Consumers want a place to shop that isn’t crowded and noisy. o
Our boutique has its own free standing location near Bellevue Square mall so our consumers won’t be overwhelmed with a large amount of people, but it is still close enough for consumers who want to shop at other stores.
The location of Andreas is convenient for many consumers to get to. o
A large number of our customers will be coming from cities outside of Bellevue so easy access to our store is crucial. Public transportation is also available and will make traveling easier.
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Primary Competitors There are many retail shopping stores located in Downtown Bellevue. Based on target market, price point, and merchandise each store carries we found Abercrombie & Fitch, Loft, and Arden B. to be three of our biggest competitors at Andreas.
Location
Abercrombie & Fitch
Loft
Arden B.
Bellevue Square NE 8th St. and Bellevue Way
Bellevue Square NE 8th St. and Bellevue Way
Bellevue Square NE 8th St. and Bellevue Way
Brief Description
Classic, casual apparel for men, women, and an online store for kids. Carry their own brand. Partners with Hollister and Gilly Hicks. Price Point: $30$200
Ann Taylor Loft Offers value prices. Products that coordinate career and casual pieces. Carry only Ann Taylor brands. Price Point: $30$150
Why they are our competition
Internationally known Similar target market Competitive price point
Similar target market Located in many US states Similar product Competitive prices
Sources:
www.abercrombie.com
www.anntaylorLOFT.com
Dressy and casual apparel, accessories, and footwear. Target women from 20-45 years old. Partners with Wet Seal Price Point: $30$150
Same target market Carry the same product categories Competitive Prices
www.ardenb.com
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Composite S.W.O.T. We, at Andreas boutique have compiled a condensed and co-related charting of nonredundant areas of strategic interest and implication with our new business venture. The emphasis resides in how Andreas compares to its’ major competitors and illustrates the strategies to overcome obstacles as well as those to better leverage company growth. Our top competitors are Abercrombie & Fitch (A), Loft (L), and Arden B. (B).
Strengths Andreas: A wide selection of apparel as well as
shoes and accessories to accent the clothing. Warm and inviting atmosphere. Outstanding customer service and friendly, knowledgeable salespeople. Quality merchandise
Competition:
Good customer service Average price points. Cater to both men and women (A). Well know brand names (A) (L).
Weaknesses Andreas:
Too much space is hard to fill without enough merchandise. Competitors lower price ranges are difficult to compete with. Weather conditions may prevent people from shopping.
Competition
Locations inside Bellevue Square have closer direct and indirect competition. Limited space inside the venues. Dimmed lighting prevents consumers from seeing the merchandise properly (A).
Opportunities Andreas:
Great community that provides opportunities to get involved and raise awareness about the business. Broaden our target market and carry merchandise for men and children. Widen our market internationally with an online store.
Competition:
Great location in the Downtown Bellevue. Well known brands will attract new consumers (A) (L). New up to date merchandise brings in more customers.
Threats Andreas: The higher priced merchandise may
affect sales. The growing population and market may cause crime rates to increase. The economy makes it more difficult for new businesses to attract consumers.
Competition:
Consumers might become aware of the cheaper quality of their merchandise. The growing population and market may cause crime rates to increase. Internal and external theft if security is not tight enough.
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Indirect Competition Our consumers at Andreas spend on average $200 when they come into our boutique. Therefore, one business that provides us with indirect competition would include Schwartz Brother’s Daniel’s Broiler Restaurant. Daniel’s is a fine dining steakhouse restaurant. Their appetizers run between $11 and $17 and their entrees $28 and $90 entrees. They also offer wines by the glass and the bottle at a range of prices. We consider Daniel’s to be indirect competition as they are in close proximity to our business and their prices are similar to our own.
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Marketing Environment Politics and Economics It is important to look at the standing of the country, state, county and city that our business is located in. There are many factors that affect our business and our consumers. The political and economical environment influences our consumers’ ability and willingness to buy. It also affects our business because of taxes, health care coverage, and trade and tariffs on imported products. The more aware we are of these conditions and obstacles the better we will be able to prepare and work around them.
Nation – United States Political Environment After two years with fellow Democrats leading Congress, Obama now must deal for the rest of his term with the jarring reality of Republican control of the House, a diminished Democratic majority in the Senate and a new flock of lawmakers sworn to downsize government at every chance.34 In the middle of midterm elections changes in the government are happening at a rapid pace. Since the beginning of the Obama ministration democrats have been the majority in the House of Representatives as well as the Senate. Now, with midterm elections taking place and many unsatisfied US residents things are starting to change. Democrats still have the majority in the Senate, but the lead over the Republicans has reduced by a great amount. Also, based on poll data the House of Representatives will be mostly in control by the Republicans who have a significant majority. It is predicted that the Republican’s will be working to make changes in the government; one of their biggest challenges is changing the health care law. Repealing the health care law, with its mandates and subsidies to extend health insurance to nearly all Americans, has been a Republican rallying cry for months but Obama, with his veto power, and the Democrats still in control of the Senate stand in the way…Obama, indicated he was open to changes, saying Republicans who complain about the burden on small businesses might have a point.35 US residents and businesses are expecting changes by the Republicans. ““Americans voted for jobs and economic growth” and “resoundingly rejected” Democrats’ policies on taxes and regulation,” 34 35
http://news.yahoo.com/s/ap/20101103/ap_on_el_ge/us_election_rdp;_ IBID
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Thomas Donohue, president of the U.S. Chamber of Commerce, the biggest business lobbying group”36 The results of the midterm elections are taking the pressure off of businesses to pay high taxes and offer health care. “Businesses “are not going to be seen as a pool of funds to be pillaged by Congress anymore,” said Curtis Dubay, a senior tax policy analyst at the Washington-based Heritage Foundation, a research organization that usually sides with Republicans”.37 According to the National Retail Federation the Senate is expected to vote on a China currency bill that could lead to higher tariffs on merchandise imported by retailers. They are also expected to approve extension of trade preferences programs that are a priority for retailers. We are also waiting approval from the Senate on a legislation that would create on Organized Retail Crime unit at the Department of Justice. This legislation is supported by the National Retail Federation and has been passed by the House of Representatives already.38 Economic Environment According to a CNN poll 52% of American’s voted that the economy was the biggest issue. After the real estate and banking problems hit in 2008 unemployment rates began to rise quickly as many citizens were losing their jobs and being laid off. “Jobless Americans topped 15 million this year, according to the Labor Department. About 9 million others work part-time because their hours have been cut or they can't find full-time work”.39 As of September 10, 2010 unemployment was at 9.6%. Another concerning issue is the amount of money Washington is spending. According to CNN and the Treasury Department, the federal budget deficit is expected to reach 1.56 trillion dollars which is a rise from 2009’s 1.41 trillion.40 Every dollar Uncle Sam spends that it doesn't have in the bank, it has to borrow. When the federal government has to borrow so much money, economists say it can lead to higher consumer interest rates for loans and perhaps rising prices for consumer goods and services. Federal Reserve Chairman Ben Bernanke said continued high deficits might threaten the nation's economic recovery.41 We have to consider the money that our consumers are spending on car loans, house payments, necessities such as food and utilities and realize that if their payments are rising they will have less money to spend on our products which will ultimately affect our business. Retail businesses should expect changes during the 2011-2012 session of Congress. The following synopsis of key issues that could be affected is provided by the National Retail Federation: 36
http://www.businessweek.com/news/2010-11-03/business-looks-to-republicans-to-block-rules-taxes.html IBID 38 http://www.nrf.com/modules.php?name=Newsletter&op=viewlive&sp_id=272&id=51 39 http://www.cnn.com/2010/POLITICS/05/31/issues.economy/ 40 http://www.cnn.com/2010/POLITICS/05/31/issues.deficit/ 41 IBID 37
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Health Care Reform – The House is likely to take a vote on repeal of the Patient Protection and Affordable Care Act health care reform law for the sake of politics. But the Senate is unlikely to go along, and President Obama would certainly veto any outright repeal. More realistically, retailers may be able to push for action on the size or existence of employer mandate penalties, fine points of eligibility for health coverage, the autoenrollment requirement and the Form 1099 reporting requirement. Taxes – The divided government resulting from the Republican takeover of the House provides an important backstop against potential tax increases over the next two years. In particular, it makes it far less likely an add-on Value Added Tax will be enacted as a revenue raiser to reduce the deficit. In particular, incoming Ways and Means Committee Chairman Dave Camp, R-Mich., has been outspoken in opposition to a VAT. Retailers still need to be cautious because incoming Budget Committee Chairman Paul Ryan, R-Wisc., has introduced legislation to replace the corporate income tax with a business consumption tax, which is a form of a VAT with similar impacts on consumer spending. Labor – The Republican House majority will bring about a dramatic change in priorities on labor-related issues. The House Education and Labor Committee will be chaired by Representative John Kline of Minnesota, who has a 9 percent AFL-CIO lifetime voting record compared with current Chairman George Miller’s 93 percent score. Controversial pro-union legislation such as the Employee Free Choice Act “card check” bill will not be considered by the House in the next two years. Rather, Kline is expected to focus on oversight of the Labor Department’s aggressive regulatory and enforcement activities, as well as anticipated action by the National Labor Relations Board to enact EFCA provisions administratively. Trade – After two years of avoiding action on trade, the Obama administration will push a more proactive trade policy emphasizing expansion of exports while continuing tough rhetoric on imports. It is unclear how responsive a divided Congress will be when free trade remains unpopular with the American public, most congressional Democrats and organized labor. In addition, many Republican gains came in Southern states with protectionist business constituencies such as textiles. Tea Party candidates, meanwhile, have no clearly articulated position on trade. U.S.-China trade will remain a hot topic, especially if China currency legislation is not completed in the lame duck. Credit and Debit Card Swipe Fees – In this election cycle, Wall Street shifted its support from Democratic to Republican candidates while calling for less government involvement in banking operations and specifically urging lawmakers not to take additional steps with respect to credit card fees. The change in control will make it much more difficult to achieve additional reforms on card fees. But divided government also means financial industry efforts to repeal or scale back reform retailers have already won – such as the Durbin Amendment requirement for “reasonable and proportional” debit card fees – are likely to fail. Internet Sales Tax Collection – The Main Street Fairness Act, which mandates sales tax collection by all sellers via any channel of sale, will be rewritten to be simpler and win broader support among Republicans. Its language may be combined with other business bills such as the Business Activity Tax Simplification Act to gain final approval. New House and Senate sponsors are being cultivated. Organized Retail Crime – House-passed legislation defining ORC as a federal crime and creating an ORC unit at the Justice Department could win final approval by the Senate during the lame duck. NRF will work with retailers, lawmakers and online marketplaces to building upon that measure and develop more comprehensive legislation during the 112th Congress. Republican House control is expected to help with efforts to fight the multibillion-dollar problem of ORC. Supply Chain – A Republican majority in the House is expected to help ensure a focus on
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development of a national freight program and strategy – as sought by NRF – as Congress considers a multi-year reauthorization of a highway bill. The key sticking point for both parties will be the funding. While an increase in the gas tax makes the most sense, politically neither party is likely to support it. NRF will oppose any user fees not applied to all users of the system. A Republican majority will also help block efforts to amend federal law to allow local ports to ban independent truck drivers under the guise of environmental and clean truck programs. Republican control should also make it easier to amend a 100 percent scanning requirement for maritime cargo containers included in the 9/11 Act but opposed by the Department of Homeland Security. Finally, the recent terrorist incident involving packages on cargo airlines will lead to a refocus on supply chain security but a Republicans might be more thoughtful on how proposed solutions would affect the supply chain. Privacy – While hearings and legislative proposals on both online and offline privacy issues are expected again in the new session of Congress, the Republican majority in the House likely means the issue will not be a top priority for new House committee chairmen. The Administration is expected to continue to focus on privacy, however, with reports expected from the Federal Trade Commission and Commerce Department and activity from a recently formed interagency subcommittee on Internet issues.
State - Washington Political Environment Washington State Democratic Senator Patty Murray has been in office since 1992. She is a graduate of Washington State University. Despite her long term dedication to Washington State during this year’s midterm elections she is running opposed by Republican Dino Rossi. Their publicized battles have been very heated and strongly opinionated. The race is too close to close to predict who will represent Washington State in the Senate. Murray’s statement to Washington residents is to create new jobs across the region, provide support to veterans and their families, protect Medicare and Social Security, end taxpayer bailouts, and improving education.42 Rossi’s plan on the other hand is to cut the massive growth in federal spending and pass a Balanced Budget Amendment, fix the tax code to reward work, saving, and the investments that create jobs, and replace the health care bill and reform heath care. 43 There are also a number of initiatives waiting to be passed. Some which are touched on below include taxes, and insurance. Washington statutes restrict any action by the legislature to raise taxes unless it is approved by 2/3 votes of each house, but the legislature has suspended their effect. Initiative 1053 if passed
42 43
Washington State Voters’ Pamphlet IBID
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would restate existing statutory requirements: approval by 2/3 votes of each house, or be approved by voters. The new or increased fees require the majority legislative approval.44 Currently in Washington the Department of Labor & Industries provides medical benefits to all employees with illnesses, disabilities, and death from work-related injuries. This law protects employers from being sued by their employees, with limited exceptions. Their source of income is provided by insurance premiums paid by the employer and are deducted from the employees pay. Initiative 1802 concerns industrial insurance and would allow employers to purchase private industrial insurance. The private insurer would have the same right and responsibilities as the Department of Labor & Industries. The law would also require that the premium be paid entirely by the employer. 45 The state has a tax for businesses and occupations that manufacture, and sell goods and services. The tax is based on gross income of the business, but there are some deductions that can take place. Another law, currently being voted on is initiative 1098 which would ultimately tax individuals who earn over $200,000 and married couple who have an income of $400,000 or higher. It would also, reduce property tax levies, and reduce business and occupation taxes. Any increased revenues would go toward education and health care. Other laws waiting for voters approval concern the distribution and selling of “spirits” (hard liquor); end taxes on candy and water as well as, reduce taxes for certain food processors; authorize funding to increase energy efficiency in schools; modify the annual calculations to determine if the state’s debt is within the constitutional limit; and, denying bail for certain criminal offenses. Economic Environment Though Washington’s unemployment rate is lower than the national unemployment rate at 8.9% in 2009 according to public charts and records it is higher than it has been since before 1985
http://www.wsdot.wa.gov/planning/wtp/datalibrary/Economy/UnemploymentbyCounty.htm 44 45
IBID IBID
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due to economic conditions concerning the recession. However, according to the Washington State Department of Transportation unemployment is predicted to continue rising until 2012 and then continue to drop until 2030.46 According to Washington’s economic and revenue publications the recovery of our economy continues to rise. Private sector job gains have been offset by public sector job losses, and housing continues to struggle. On the bright side, the software industry is expanding again and aerospace is poised for a resumption of growth next year. Major General Fund-State (GF-S) revenues for the September 11, 2010 – October 10, 2010 collection period were $2.5 million (0.3%) higher than our September forecast. Revenue Act collections continued to show year-over-year growth and came in $1.9 million (0.2%) above the forecast.47
The economic impact of the Fashion and Apparel industry in Washington State for the year of 2009 was affected by the 1,540 apparel employers and 3,100 self-employed that provided 34,500 jobs in Washington State.48 Gross business revenues among fashion and apparel companies totaled over $8.3 billion dollars in 2009. State impact models suggest the Fashion and Apparel Industry including apparel design, textile and apparel manufacturers, apparel wholesalers, and apparel corporate headquarters, support a total of 51,700 jobs and $16.4 billion in revenue in Washington State, including direct, indirect and induced impacts.49 The chart below compares Fashion and Apparel Business Revenues year by year over the last decade based on retail, wholesale, and manufacturing income.
46
http://www.wsdot.wa.gov/planning/wtp/datalibrary/Economy/UnemploymentbyCounty.htm http://www.erfc.wa.gov/publications/documents/oct10.pdf 48 http://www.enterpriseseattle.org/ 49 IBID 47
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Political Environment
County - King
Dow Constantine has been the King County Executive since November 24, 2009. For seven years he worked on the King County Council, and has been in office for Washington State for 13 years. According to his bibliography he has been a supporter of environmental protection, public transit and government reform. He is working to make King County Government more efficient and performance based. 50 Economic Environment Unemployment rates for King county are lower than both national and state unemployment rates at 8%. The map allows us to compare our county’s statistics with other counties throughout our state. According to the King County website the poverty level is 9.1% which most likely relates to the unemployment level. However, despite unemployment rates the median
http://www.wsdot.wa.gov/planning/wtp/datalibrary/Economy/UnemploymentbyCounty.htm
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http://www.kingcounty.gov/
56
household income for King County is $70, 193 (in 2008).51 Helpful news to businesses is that from 2004 to 2009 the percentage change in the number of new businesses created increased 8%. Between 2002 and 2009 there was 28,287 jobs created which was a 2.6% increase. King County has a Benchmark Program that measure the progress in the Countywide Planning Policies which is run by a council of elected members. The program tracks the conditions of the environment and communities based on affordable housing, economy, environment, land use, and transportation. 52
City - Bellevue Political Environment: Bellevue’s Government Organization is made up of seven elected officials to form their city council. The mayor and deputy mayor are both members. Bellevue residents have the ability to participate through volunteer boards and commissions. The city manager is chief executive of the city, working under the council. Staff assigned to certain departments include Development services, Parks and Community Services, Utilities and Transportation, and provide important services to their residents.53 A news release this October about the new 520 HOV project the city council has been working on to improve transportation. The SR 520 will make traveling easier and is an economic like across Lake Washington to the Eastside. They have been working with the Eastside cities, the Governor, Legislature, business leaders and labor groups throughout the region to accomplish this project. The project is expected to reduce travel time, improve safety, access and reliability in the corridor. "This project will put people to work today, and get people to work faster in the future," Gov. Gregoire said. "It's a win-win for our economy and our roads, and replacing the vulnerable floating bridge is essential to our region."54 Economic Environment According to Bellevue’s 2005 economic summary there were about 125,000 jobs. Many employees come from other locations outside of Bellevue to work which causes the city to grow more in population as more workers are relocating to Bellevue. The four major local employment centers in Bellevue are Downtown, SR-520/Bel-Red., 116th/Bellefield, and Factoria/ Eastgate. These four locations have grown business wise because of their attractive customer base, business linkages,
51
IBID IBID 53 http://www.bellevuewa.gov/Default.htm 54 http://www.bellevuewa.gov/520-hov-groundbreaking.htm 52
57
appropriate zoning, transportation access, and available land. “Local indicators of economic trends in Bellevue—such as taxable retail sales and Downtown office space vacancy rates, which are available for more recent periods than are employment figures—provide strong evidence that Bellevue’s economy is once again growing.” During the last six years Bellevue processed between 2,200 and 2,800 new business registrations annually. State registrations show that sole-proprietors are the most common type of business in Bellevue. Of about 13,000 registered businesses 6,000 of them were sole proprietors in 2004 according to the Department of Revenue for Washington State. Also, local sales tax and Business and Occupation tax revenues both rose between 2003 and 2004. This increase reflects the growth in local retail sales and businesses. According to Bellevue’s economic profile the predicted growth between 2001 and 2022 is predicted to grow by an additional 10,117 houses, an additional 40,000 jobs, the population will exceed 137,000 and the number of total jobs will be more than 170,000.55
Sub-City – Downtown Bellevue Political Environment The Bellevue Downtown Association was established in 1974 and is a nonprofit organization that has led the development of the area. The association represents the business sector in the planning and development of downtown. They speak out on issues that will shape the future of the community and work together to solve problems and identify opportunities. They work with businesses and the government to improve the economic development of downtown, and focus on important issues such as, transportation and travel. The association promotes the downtown area as a favored place to live, work, and play. They produce community events that downtown is known for and partner with arts and community organizations. They discuss topics among downtown stakeholders at member meetings, and offer easy forms of communication.56 Economic Environment The Government City Council on March 15, 2010 approved a shorter tunnel for the East Link light rail segment in downtown Bellevue. The purpose is to maximize the quantity of riders, lessen light rail travel times and avoid congestion on heavy city streets. “Because the council's revised tunnel preference could cost up to $285 million more than a downtown street-level alternative, city
55 56
http://www.bellevuewa.gov/economic-profile.htm http://www.bellevuedowntown.org/about/board.html
58
and Sound Transit executives have been working to identify a combination of funding solutions and cost reductions to close the funding gap identified by Sound Transit.�57 The second largest city center in the state of Washington, Downtown Bellevue has 35,000 employees, nearly 5,000 residents, the region's excellent shopping mall and a growing array of pedestrian and cultural amenities. Development of new office buildings, condominium and rental housing, and new formats for retail and entertainment are all keeping pace with one of the busiest real estate markets in the United States. 58
57 58
http://www.bellevuewa.gov/economic-profile.htm http://www.bellevuedowntown.org/downtown/econdev.html
59
Legal/ Regulatory/ Tax/ Licensing Criteria State – Washington
Sole proprietors do not need to register their business with the state, unlike other business structures. Licensing and permits are all a business owner does to start their sole proprietorship.59
Apply for an Employment Identification Number also known as a Federal Tax Identification Number (SS-4).
o
It is used to identify a business entity as well as, be used to most business needs, such as opening a bank account, applying for business licenses and filing a tax return.60.
Washington business are required to register for one or more tax-specific identification numbers, licenses or permits, including income tax withholding, sales and use tax (seller’s permit), and unemployment insurance tax.
o
A business must register if they are required to collect sales tax, gross income is more than $12,000 a year, the business is required to pay taxes or fees to the Department of Revenue, if they are a buyer or processor of specialty wood products.61
o
The Master Business Application is a simplified form used to apply for many state licenses, registrations, and permits, as well as, some city licenses.
o
The application must be filed in order to receive a business license or Unified Business Identifier (UBI) number, get a new city or specialty license, open or change locations, register or change a trade name, hire employees, and change unemployment or industrial insurance coverage.62
o
Fees for the Master Business Application include a $15 nonrefundable application fee, $5 for every trade name registered, plus an additional fee for the type of business.
o
By applying for the Master Business Application a business is registered for worker’s compensation at the Department of Labor and Industries and unemployment insurance at the Employment Security Department which allows a business to hire employees.
59
http://www.business.gov/register/incorporation/sole-proprietorship/ http://www.irs.gov/businesses/small/article/0,,id=102767,00.html 61 http://dor.wa.gov/content/doingbusiness/registermybusiness/ 62 IBID 60
60
If a business plans to hire employees under the age of 18 they must file a permit to employ minors.
It is required by law that certain business types including profit corporations file an annual report and pay a corporate renewal fee each year, even if there was no change in the company.63
County – King In order for a business to lawfully advertise and sell goods in King County they must obtain the appropriate licenses. The license our business needs from the county in order to operate lawfully is the Closing out a Sales License. Closing out a Sales License License conditions. Any license issued under the provisions of this title shall authorize the type of sale named in the application, at the place named therein, for a period of not more than thirty consecutive days, Sundays and legal holidays excluded, and shall permit the sale of goods which are set forth in the application and inventory, all of which goods throughout the duration of the sale must be definitely separated by partition or temporary partition from any other goods displayed at, or within the store or place of business, and all advertising, signs or notices referred to or calling attention to the sale must be confined to the display, or displayed goods involved in the sale. License renewal. The director may, upon a verified application therefore renew the license for a period not to exceed thirty days, upon payment of a renewal fee in the amount of two hundred dollars. Such verified application for renewal shall set forth a complete list of goods listed in the original application and remaining unsold, and shall certify that it does not contain any goods not named in such original application. Upon receipt of such application, the director may cause an investigation to be made, and if satisfied of the truth of the statements contained therein, the director shall grant such renewal within fifteen days after such application, which shall be endorsed and signed as provided for in the original license. The director may renew any original license in the manner above provided, not to exceed two times, upon the payment of the sum of two hundred dollars for such renewal; provided, however, that the director may not issue licenses or renewals which will allow the conduct of any sale as provided herein at any one location for more than ninety consecutive days, Sundays and legal holidays excluded, in any one twelve-month period. General rules and regulations. The license as issued pursuant to this chapter shall be valid only for the advertising, representations and sale of the particular goods, wares or merchandise described in the original application therefore, and at the particular time, and particular place stated therein, and by the particular applicant or his executor or administrator, and any renewal, replenishment or substitution of such goods, wares or merchandise, or change of such time or place for such sale, or change of person conducting the sale, is unlawful and shall render such license void. 64
King County collects property taxes, sales taxes, leasehold excise and real estate excise from businesses.
63 64
http://www.sos.wa.gov/corps/Default.aspx http://www.kingcounty.gov/business/licenses/
61
o
Leasehold tax is for the use of public property by private or commercial businesses. The leasehold excise rate is .1284 of the rent paid for the property.65
o
The real estate excise tax is on the sale of the real estate and paid by the seller of the property.
City – Bellevue
Bellevue collects general taxes from businesses, primarily the business and occupation tax, as well as, a number of special taxes on specific types of business activity such as, utility tax, gambling tax and admission tax. 66
o
The Business and Occupation (B&O) Tax includes gross receipts and square footage taxes which support general governmental services and the city’s Capital Investment Program. A number of businesses only report in one of the two categories.
The gross receipts B&O tax is mostly measured on sales or gross income for the reported period.
The square footage B&O tax is used to tax businesses that do not generate revenue in the office itself.
o
Sales tax is determined based on location where the customer receives the product and where the retail is delivered from. Retail sales tax includes the state and local components of the tax. Sales tax amounts are collected and considered trust funds and must be sent to the Department of Revenue. Businesses also pay the retail sales tax on purchases of items for their own use that will not be resold.67
City Business licensing forms for Bellevue includes a City Business License Addendum and a City License Fee Sheet. 68
o
The addendum is used to apply for a city license where the business will be physically located inside city limits and to apply for licenses with other cities we will travel to carry out business.
65
http://dor.wa.gov/content/FindTaxesAndRates/ http://www.ci.bellevue.wa.us/bellevue_taxes.htm 67 http://dor.wa.gov/content/FindTaxesAndRates/ 68 https://fortress.wa.gov/dol/mls/wali/guidesheet.asp?intTranId=961661 66
62
The addendum and the State’s master application can be filled out at one time. It can be sent together with the fee to the Department of Licensing.
o
The City License Fee Sheet just states the type of registration or licensing a business needs for their location and the fees for that specific city.
In our case, a General Business Registration is required with a $30 payment for the city of Bellevue.
Bellevue business licenses are valid for the life of the business.
63
Top 20 Regional Employers Employers
Number of Employers
The Boeing Company Port of Seattle Alaska Air Group Inc. Microsoft Corporation University of Washington Safeway Stores VA Puget Sound Health Care System Virginia Mason Amazon.com Inc. AT&T Swedish Medical Group Health Emeritus Corp. Westin Hotels & Resorts SAFECO Labor Ready Inc. Albertson's Fred Meyer Providence PACCAR Nordstrom City of Seattle Snohomish County King County Government COSTCO
64,000 11,225 11,150 11,000 10,000 9,293 8,500 7,957 7,500 7,328 6,740 5,440 5,000 5,000 4,550 4,000 3,860 3,822 3,590 3,515 3,364 3,220 3,187 3,117 3,110
http://www.seattlechamber.com/portal/page?_pageid=33,2965&_dad=portal&_schema=PORTAL&p_menu_id=1155
64
Marketing Environment Social Issues Education Level As discussed in the consumer profile we have chosen to locate Andreas in Bellevue, Washington because over half of the city has a bachelor’s degree or higher, and the median income is $79,954. We believe education is linked to business success which results in higher earnings. Though there are exceptions and it is possible for people to make a large income without a high level of education it doesn’t happen in a lot of cases. The graph below is provided by the Bureau of Labor Statistics based on 2009’s annual average for people 25 and over who are full time workers and salary workers. What we can learn from the chart is that employees with a bachelor’s degree or higher earn a higher than average
Unemployment Rate by Percentage
income. A higher level of education also results in lower unemployment rates
10 Bellevue 5 Washington
as we can tell from the chart.
2009
2008
2007
2005
2004
2003
2002
2006
rate is 5.8% which is low in
2001
website the unemployment
0 2000
According to Bellevue’s city
comparison to Washington 65
State’s 8.9% unemployment rate (discussed in Washington State’s economic issues). In a year by year analysis we can see that since the year 2000 Bellevue’s unemployment rate has remained lower than Washington State’s unemployment rate. Therefore, our decision to locate in Bellevue is supported both by education and income levels, as well as, the local unemployment rate. Family Size and Structure Also discussed in the Consumer Profile, our Andreas ideal consumer is a single or Marriage Statistics For Bellevue, WA age 15 and up
married woman with no kids. For that reason it is important
Never Married
to note marital statistics in
Now Married
Bellevue, Washington. Based
Separated
on the chart nearly 60% of
Widowed Divorced
Bellevue’s population is married; 25% has never been married; 1% is separated from
their spouse; 10% are divorced; and 5% are widowed.69 Because it is possible for our Andreas consumer to fall into any of these categories it is more important to look at family households since our targeted consumer doesn’t have children. The average household size in Bellevue is 2.4 people and the average family size is 2.9.70 63.4% is the number or family households in the city and 4.1% of households are unmarried partners.71 The map on the right which was provided by www.maps-n-stats.com and the U.S Government Census Bureau shows us that of the 52.9% of married couples 69
http://www.city-data.com/city/Bellevue-Washington.html http://www.maps-n-stats.com/us_wa/us_wa_bellevue_i.html 71 http://www.city-data.com/city/Bellevue-Washington.html 70
66
only 22.2% of them have children. Therefore, 30.7% of all married couples do not have children, which is where our targeted consumer would fit. She could also fall into the 36.5% of nonfamily households or 28.3% of people that are living alone. Birth Rates Birth rates for Washington State and King County are given in the chart (provided by the Washington State Department of Health) on the following page. The general birth rate shown under “All Ages� is the total of live births for every 1,000 women between the ages of 15 and 44. The rate for specific age is the number of live births between that age group for every 1,000 women in that age range. Age Specific Live Birth Rates1 by County of Residence, 2009 All Ages
15-19
15-17
18-19
20-24
25-29
30-34
35-39
40-44
65.9
29.8
13.8
52.7
87.7
111.9
104.4
49.4
11.4
Adams
134.8
120.4
66.5
212.5
213.5
188.6
144.6
81.7
25.1
Asotin
59.0
38.0
10.1
85.0
120.9
109.7
70.7
24.7
*
Benton
74.8
38.4
17.8
74.0
136.1
145.4
100.8
36.3
8.0
Chelan
79.0
43.8
23.2
77.7
148.4
135.6
100.5
49.1
12.0
Clallam
64.4
30.1
10.6
63.9
139.4
134.4
89.5
36.4
5.8
Clark
63.8
28.0
12.0
53.9
93.1
110.8
98.6
43.7
9.0
Columbia
50.7
*
*
*
100.0
80.5
84.3
*
*
Cowlitz
71.1
47.0
15.8
97.8
154.3
118.4
80.9
24.9
6.7
Douglas
76.1
37.8
19.8
69.8
137.4
148.1
113.2
40.8
8.0
Ferry
47.4
*
*
*
147.7
93.9
53.6
*
*
Franklin
117.6
74.4
43.1
125.2
166.8
184.7
175.7
64.0
11.3
Garfield
53.6
*
*
*
147.1
*
140.0
*
*
100.5
79.3
44.5
138.0
175.5
155.3
118.3
46.1
12.5
Grays Harbor
67.5
35.6
18.3
64.4
148.8
124.3
79.9
32.9
6.6
Island
63.1
24.6
3.3
60.5
126.5
124.9
67.8
31.7
6.5
Jefferson
50.3
25.3
9.9
57.1
110.1
97.7
88.4
31.8
9.4
King
60.7
18.7
8.6
32.3
50.3
81.3
113.0
69.3
17.6
Kitsap
61.6
22.1
6.9
48.5
113.3
126.5
81.0
35.4
7.1
Kittitas
46.0
11.2
7.5
13.3
31.0
117.3
127.3
44.6
9.1
Klickitat
70.5
35.7
19.4
71.8
131.5
125.7
116.6
47.8
8.8
Lewis
76.4
45.0
18.8
90.4
135.5
172.1
102.1
26.6
2.6
Lincoln
56.6
17.1
*
50.0
141.2
146.5
101.8
17.7
*
Mason
78.0
39.6
21.8
73.7
171.7
157.8
107.3
37.0
6.8
Okanogan
85.3
58.3
23.7
122.6
177.7
165.6
101.0
42.3
8.2
Pacific
59.6
23.1
12.5
43.5
179.9
112.2
69.9
30.0
*
Pend Oreille
74.6
49.4
15.2
131.4
192.1
222.7
79.1
25.1
*
Pierce
68.5
32.8
13.1
61.4
108.9
128.0
93.9
38.0
8.5
San Juan
45.4
13.6
*
39.7
73.0
119.0
75.0
38.6
8.8
County State Total
Grant
67
Skagit
70.5
40.8
22.0
70.8
115.3
123.9
Skamania
60.1
Snohomish
62.9
Spokane Stevens
106.4
40.7
42.9
*
102.2
147.2
21.5
9.2
41.5
87.5
64.8
27.9
11.2
48.7
57.9
31.3
12.6
76.0
Thurston
62.9
24.2
11.7
43.3
88.6
Wahkiakum
50.3
*
*
*
138.5
Walla Walla
59.5
31.4
15.6
46.5
Whatcom
54.5
19.6
13.1
Whitman
36.4
5.5
*
Yakima
97.8
74.4
39.6
7.4
102.8
82.7
38.0
*
116.0
102.5
43.7
11.6
90.9
127.2
100.1
39.7
7.0
134.4
122.3
82.1
37.4
3.8
133.0
98.1
36.4
7.6
*
107.1
*
*
83.3
121.7
75.9
46.1
7.1
25.2
49.5
114.9
113.7
39.1
9.5
5.7
17.5
103.5
116.8
57.3
11.3
131.0
155.3
148.8
125.7
53.4
12.6
* Rate not calculated because number of events was less than 5. What we can conclude from the chart is that the state total birth rate for all women of child bearing age is 65.9 for every 1,000 women between 15 and 44. In King County where Andreas will be located the
Number of Live Births for every 1000 women in that age range
Birthrates in King County
general birth rate is
120
60.7. We compiled
100
the information to
80
build a graph to
60
visibly show birth
40
rates between the
20
ages of our targeted
0 18-19
20-24
25-29
30-34
35-39
Ages of Women
consumer. What we can tell is that birth
rates are highest among our 30-34 year old consumers and lowest between our 18 and 19 year old consumers. We can assume from this information that a higher number of our targeted consumers will be among women with lower birth rates.
Housing/Poverty and Crime Rates Housing is an important detail to look at because the more money our consumers pay to own or rent the less disposable income they have to spend at our business. In 2008 the median asking price for for-sale houses and condos was $343,016 and the median rent 68
was $1,172. Lower rent payments were around $870 and higher rent payments were $1,470.72 According to the city website there are 1,571 houses and condos per square mile. 39% of Bellevue pays rent instead of owning. Compared to the whole state’s 11.4% of people who are below the poverty level Bellevue’s poverty level is 6.7%. The majority of males living below the poverty level are between the ages of 12 and 15 years old. The majority of females are 15 years old. Compared to all women that are living below the poverty level 7% are between 18 and 24 years old; about 9% are between 25 and 34 years old; and about 4% are between the ages of 35 and 44 years old. In Bellevue 3.5% of residents have an income that is below half of the poverty level. Of that 3.5% the majority fall between the ages of 18 and 24 years old. As discussed earlier in the Target Market Bellevue’s crime rates are lower than the U.S. average. According to the city-data.com crime index the U.S. average is 318.2 and as of 2008 Bellevue’s crime index number is 215.4 per 100,000 people. The crime breakdown for this year is represented in the chart on the following page. Theft made up the majority of crimes in 2008 (74%); 15% of crimes were burglaries; 6% were auto thefts; 2% were robberies; 1% were assaults; and 1% were other crimes. As of April 2010 there are 20
Crimes by Type
registered sex offenders living in Bellevue, WA. The ratio of residents to Theft
sex offenders is 6,178 to 1.73 This
Burglaries
number is a lot smaller than the state
Auto Theft
average of residents to sex offenders.
Robberies Assaults Other
The number of full time law enforcement employees including officers in 2008 increased since 2007 most likely because of the population
growth. As of 2008 there are 272 (182 officers) full time law enforcement employees. There are 1.49 officers per 1,000 residents. 74
72
http://www.city-data.com/city/Bellevue-Washington.html IBID 74 IBID 73
69
Cultural Issues Ethnicity and Sensitivity Toward Ethnic Mix Bellevue, Washington seem to be a city that is open to ethnic mix and has a greater understanding of diverse ethnic heritages compared to Washington State. According to Bellevue’s city website statistics about
Races in Bellevue, WA 2008
race in 2008 were more varied than Whites
other cities. In Bellevue, Whites made
Asian
up 64.2% of the population; Asians
Hispanic
made up 24.4%; Hispanics made up
2+ races
5.6%; two or more races made up
Black
4.1%; Blacks made up 1.6%; and other
Other
75
races made up .2%. The graph provided gives a visual understanding of race diversity in Bellevue. Compared to Washington State where 10.4% of the population are foreign born, Bellevue’s foreign born residents make up 24.4% of the population. 13.6% were born in Asia, 5.3% were born in Europe, and 3.1% were born in Latin America.76 Based on the graphs provided on Bellevue’s website we notice that the older residents are the
80% 70% 60% 50% 40% 30% 20% 10% 0%
likeliness that they were
Place of Birth Born in State of Residence Born in Another State Foreign Born Native, Outside of U.S.
born in Washington state decreases and the higher the chances they were born in another state or another country. We can also tell that 80% of all Whites were born somewhere in the U.S.; 27% of Blacks are foreign born; 76% of Asians are foreign born; and 60% of Hispanics are foreign born.
75 76
IBID IBID
70
This information is useful to us because in today’s American society people are more open to racial diversity. People are more likely to choose a location they are going to feel comfortable and accepted. In Washington Bellevue is more culturally diverse than other cities. We can assume based on this information that this city is likely to keep growing and expanding due to its diversity.
Religious Issues According to Bellevue’s city website 37.3% of the population is affiliated with a religious congregation. This number is quite a bit lower when compared to the National 50.2% who are involved in religious parishes. According to statistics 43% attend a Catholic Church; 6% attend a Mormon Church; 5% are
Religion
Lutheran; and 45% are involved with other religions.77 These statistics are important because it is helpful when planning for
Catholic Mormon Lutheran Other
holiday seasons. We can focus on what holidays are important to our consumers and base holiday sales and events around those occasions.
77
IBID
71
Night Life As discussed earlier in the Consumer Profile we identified our Andreas consumers as Experiencers, Innovators, and Thinkers. In other words, they are very social people. So, it is important for our company to keep up with where are consumers are going, what kinds of entertainment they enjoy, and where they are spending their money. This helps us to identify our consumer on a more detailed level, as well as, find out who our secondary competitors are. If we know where our consumers are spending their money we can get a better idea of their interests and what they enjoy spending their time doing. Knowing our secondary competitors helps us find more ways to connect with our consumers. We can find better ways to advertise and reach them. It also enables us to work with those companies and offer deals that will help both our business and theirs. Restaurants: Pearl Bar & Dining Cuisine: American Price Range: $18-$25 Lincoln Square 700 Bellevue Way NE (425) 455-0181 www.pearlbellevue.com
Andiamo Ristorante Cuisine: Italian Price Range: $18-$25 938 110th Avenue NE (425) 452-9602 www.andiamobellevue.com Barrio Cuisine: Mexican/Southwestern Price Range: $18-$25 10650 NE 4th Street (425) 502-5021 www.barriorestaurant.com
Purple Café and Wine Bar Cuisine: American Price Range: $18-$25 430 106th Avenue NE (425) 502-6292 www.thepurplecafe.com
John Howie Steak Cuisine: Steakhouse Price Range: $18-$25 The Bravern 11111 NE 8th Street (425) 440-0880 www.johnhowiesteak.com Joey Bellevue Cuisine: American Price Range: $10-$18 Bellevue Place 800 Bellevue Way NE (425) 637-1177 www.joeyrestaurants.com Las Margaritas Cuisine: Mexican/Southwestern Price Range: $10-$18
Seastar Restaurant and Raw Bar Cuisine: Seafood Price Range: $18-$25 205 108th Avenue NE (425) 456-0010 www.seastarrestaurant.com o o o o o o
Tap House Grill Cuisine: American Price Range: $10-$18 Bellevue Galleria 550 106th Avenue NE (425) 467-1730 www.taphousegrill.com
o o o o
The Melting Pot Cuisine: Fondue Price Range:$18-$25 302 108th Avenue NE (425) 646-2744 www.meltingpot.com
72
437 108th Avenue NE (425) 455-0535 www.lasmargaritasbellevue.net
Maggiano’s Little Italy Price Range: $18-$25 Cuisine: Italian 10455 NE 8th Street (425) 519-6476 www.maggianos.com
The Arts
o o o o o
520 Bar & Grill Cuisine: American Price Range $10-$18 Old Bellevue 10146 Main Street (425) 450-0520 www.520barandgrill.com/
*Restaurant information provided by: http://bellevuelocaltable.com/
Theatre at Meydenbauer Center 11100 NE 6th Street (425) 450-3810 theatreatmeydenbauer.com This state-of-the-art, 410-seat facility is one of the Pacific Northwest’s premier stages for community-based performing arts. Theatre at Meydenbauer is proud to play host to an array of productions by local, regional and national performing arts groups. Bellevue Arts Museum 515 Bellevue Way NE (425) 519-0770 bellevuearts.org Bellevue Arts Museum is the Pacific Northwest’s center for the exploration of art, craft and design. A leading arts center on the Eastside, BAM celebrates regional, national and international artists working in a broad range of craft media, including ceramics fiber, metal, wood and glass. First Friday of each month admission is free from 11:00 a.m.-8:00 p.m. Open Satellite 989 Elements Building 989 112th Avenue NE, Suite 102 (425) 454-7355 opensatellite.org A contemporary art gallery displaying large-scale work by national and international artists. *Information provided by: http://www.bellevuedowntown.org/nightlife
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Movie Cinemas Regal Crossroads 8 Cinemas 1200 156th Ave Ne. Bellevue, WA (800) 326-3264 Ext 401 Lincoln Square Cinemas IMAX 700 Bellevue Way Ne, Bellevue, WA (425) 454-7400
AMC Theatres Loews Factoria 8 Factoria Blvd Se, Bellevue, WA (888) 262-4386 3505 *Cinema information provided by: http://local.yahoo.com/WA/Bellevue/Entertainment+Arts/Movie+Theate rs Nightclubs; Bars; Lounges Vertigo Lounge & Grill 989 112th Ave Ne Bellevue, WA 98004 (425) 467-6767 Goose Pub N Eatery 12001 Ne 12th St, #90 Bellevue, WA (425) 454-1554 Sideline Sportsbar 3720 Factoria Blvd Se Bellevue, WA (425) 644-2781
The Parlor Billiards & Spirits 700 Bellevue Way NE St 300 (between S 104th Ave & 6th St) Bellevue, WA 98004 Parks and Sports Bellevue Downtown Park 10201 NE Fourth St. Amenities: A 20-acre oasis of green in the heart of Bellevue defines this elegant centerpiece of the Bellevue Parks System. A one-half mile promenade, bordered by
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a double row of shade trees, and a stepped canal, brings one to the 240-foot wide waterfall that cascades into a reflecting pond. A ten-acre lawn area invites one to pause for a picnic with Bellevue’s skyline and Mount Rainier in the background. The park’s delightful play area and formal gardens add to family enjoyment and serve as a backdrop for community events. *Ice Arena: Open Nov. 26, 2010-Jan 9, 2011
Bannerwood Sports Park 1790 Richards Rd. Amenities: 1 tournament quality baseball stadium (lighted), concessions available, viewing stands, restrooms, handicapped accessible, 12.65 acres. Bellevue Golf Course 5500 140th Ave. NE. Crossroads Par 3 Golf Course 15801 NE 15th St. 9 Hole Course Outdoor Tennis Courts
Bovee Park - 1500 108th Ave. NE Cherry Crest Park - 12404 NE 32nd St. Crossroads Park - 16000 NE 10th St. Enatai Park - 10643 SE 25th St. Hidden Valley Sports Park - 1901 112th Ave. NE Highland Park - 14224 NE Bel-Red Rd. Hillaire Park - 15731 NE 6th St. Killarney Glen Park - 12309 SE 23rd Pl. Robinswood Park - 2400 151st Pl. SE Spiritridge Park - 16100 Se 33rd Pl. South Bellevue Community Center - 14509 SE Newport Way
Bellevue Aquatic Center 601 143rd Ave. NE Bellevue, WA 98007-4708 *Information provided by: http://www.bellevuewa.gov Spas and Salons Gene Juarez Salons & Spas 550 106th Avenue NE # 105 Bellevue, WA (425) 455-5511 The Spa & Salon at PRO Sports Club Bellevue 4455 148th Avenue N.E. Bellevue, WA 75
(425) 895-6565 Deyss Salon & Spa 989 112th Avenue Northeast Bellevue, WA (425) 709-6900 *Information provided by: maps.google.com
Parades Bellevue Holiday Season Parade Downtown Seattle Fremont Solstice Parade Fremont Ave Seattle, WA
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Technological Advances With technological advances happening so quickly it has become easier to broaden our target scope and reach more consumers in other geographical locations in seconds. Tracking merchandise and counting inventory have become easier for retailers as well. At Andreas we plan to take advantage of any new and already existing technologies that will help us to improve our business. We plan to put together our own personal Andreas Boutique website that will allow our consumers to shop online. We can offer special promotional deals for our online customers only which will help bring in more business. The website will allow us to expand our company and reach consumers in locations that we otherwise would not be able to. The ability to sell our merchandise online and ship the products to our consumers gives us the opportunities to reach people internationally. This market growth provides endless opportunities for our business to expand significantly over time. We also plan to become a part of many social networking sites such as, Facebook and Twitter. This permits us to target consumers in our area and let them know about events and sales that are happening at our store. These social networking sites get millions of visitors everyday so the number of people we are able to reach is extreme. Online advertising is also helping businesses to grow and expand because with all these technological advances we can now advertise to people that are specifically located around our business. We have the ability to track which websites our consumers are visiting most and find new ways to reach them. We will also use the internet to not only keep up with our consumers, but to keep up with and get ahead of our competitors. Using sites that are beneficial to businesses such as, Quantcast we can get ahead of our competitors by tracking our consumers and finding out what new trends they are following and which industries our consumers are more likely to be a part of. We can find out which websites people in our specific location are visiting and 77
focus our advertising on those websites as well. This information is all beneficial to advance our understanding of our consumers and be able to provide them with their wants and their needs before our competitors. As for our in-store technologies, we plan to track the sale of merchandise through our point-of-sale registers. We will be able to keep track of our merchandise through our computers once they are scanned at the point of sale. We still plan on keeping a physical inventory for a more accurate count of merchandise that will include damaged or missing inventory.
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Environmental Issues At Andreas we plan to do our part in the community and be as environmentally friendly as possible. Also, conserving resources and cutting down on waste saves money which will help our business. Communication between us and suppliers or other businesses will be done via email which saves on paper and ink. We plan to recycle as well as use recycled resources. At the end of the day our computer will be shut down to conserve energy. Some of our suppliers will be located within the state to save energy on travel. Based on the LEED Certification program we plan to score between the silver and gold rankings. LEED Certification In order for the United States Building Council to encourage the construction of energy and resource-efficient buildings and promote an environmentally friendly environment they developed a Leadership in Energy and Environmental Design (LEED) program. LEED measures buildings based on a proven technology and point system that is adjusted based on building size. LEED measurements are based on eight categories that are rated on a certain number of points depending on their importance. ID—Innovation and Design 11 points Includes such innovative measures as design methods, regional credits, and exemplary performance Innovations that would integrate best practices of everyone on the team. LL—Location and Linkages 10 points Placement of homes in socially and environmentally responsible ways in relation to the larger community. SS—Sustainable Sites 22 points Uses the entire property to minimize project’s impact on the site. WE—Water Efficiency—15 points Water conservation practices, indoor and outdoor, that are built into the home. EA—Energy and Atmosphere—38 points Optimization of energy efficiency in well insulated, tight building envelope with efficient heating and cooling systems. MR—Materials and Resources—16 points Reduction of material waste during construction and selection of green products. IEQ—Indoor Air Quality—21 points Improvement of indoor air quality by reducing air pollution with Energy Star appliances, installation methods and ventilation measures. AE—Awareness and Education—3 points Create a homeowner’s manual covering the operation and maintenance of the
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green features of the home. TOTAL POINTS—136 78
Based on the 136 point system LEED ratings are Certified, Silver, Gold or Premium determined on the score number. Certified – 45 points Silver – 60 points Gold – 75 points Platinum – 90 points
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http://www.blueberrypdx.com/leed-certification.htm
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A nd r e a s MARKETING STRATEGY PLAN
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Promotional Plan Image Statement Andreas, is a boutique that gives off a very relaxing and comfortable vibe. Our consumers come into our store and feel at ease because of our natural, calming environment. At Andreas we cater to women who have a relaxed sense of style and personality. The neutral, earth tone surroundings allow our customers to slow down and unwind from their hectic lives. Our products have the same appeal. In mostly neutral and darker, rich colors our merchandise doesn’t overwhelm our consumers. The apparel is appropriate for the workplace and gives our career-oriented woman the feeling of sophistication. The clothing we offer provides an image of professionalism and gains them respect of peers and coworkers. Not only is our product appropriate for the workplace, but it can be altered very easily for a night out on the town. After a hard day’s work our consumer doesn’t want to run home and spend time picking out a completely different outfit. She can very easily throw on a cute jacket and be ready for a night out. Our consumer can wear our apparel and feel comfortable and confident in them which is the same feeling they get when they shop our boutique. There are plenty of places for our 20 something consumer to shop, the difference between Andreas and another retailer lies in the quality and style of our merchandise that allows our consumer to be respected in the workplace and be seen as a fashion forward shopper.
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Marketing Mix Product We carry a wide range of merchandise to fit our customer’s needs (and wants). There are a large variety of styles in every category as well as, many brands to choose from. We don’t want to miss out on selling opportunities because our consumers couldn’t find what they were looking for. Brands: Categories:
Tops o
o
o Bottoms o
o
Blouses Halter Button-Up Long Sleeve Short Sleeve Sleeveless Sweaters Basic Cardigans Feminine Long Sleeve Mid Length Short Sleeve V-Neck Tank Tops
Pants
Bootcut Boyfriend Skinny Trouser
Pencil Ruffle
Skirts
Outerwear o Jackets Long Sleeve Short Sleeve Three Quarter o Coats Casual Cropped Mid Length Waist Length Cold Weather Dresses o Wear to Work o Little Black Dress Accessories o Necklaces o Bracelets o Earrings Shoes o Flats o Pumps o Boots
Tops o Caslon® o Amber Sun o Bailey 44 o Hinge® o Free People o Nic & Zoe o Only Mine Bottoms o Halogen o Calvin Klein o Mac & Jac o MICHAEL Michael Kors o Kenneth Cole NY o DKNY Outerwear o Ary K Chain o Caslon® o MICHAEL Michael Kors o Matty M. Dresses o Chetta B. o Adrianna Papell o Maggy London o JAX Accessories o Lucky Brand o Spring Street Design o Cara Accessories o Juicy Couture Shoes o Jessica Simpson o Steve Madden o Me Too o Nine West
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Price Our prices are in the medium range. It reflects on our merchandise and our business because if the prices were too low it wouldn’t fit the sophisticated image of the store and consumers would assume the quality of the product was cheap and if the prices were too high the image wouldn’t appear luxurious enough.
Price Range Our tops range in price from $30 to $90, but most of our merchandise is priced between $50 and $70 because our sales increase in that range and our image is also reflected best in this assortment.
Sales
Tops
60 50 40 30 20 10 0
Volume
Prestige
Promo 0
50
100
Price
Price Range
Our bottoms range in price from $50 to $130. Most of our products are carried in the $80 to $100 price range because the image of our store and majority of our sales are imitated in that range.
Sales
Bottoms 60 50 40 30 20 10 0
Volume
Prestige
Promo 0
100
200
Price
Price Range
Our outerwear ranges in price from $80 to $140. The jackets are closer to the $80 range and the coats are closer to $140. The majority of our sales fall between $100 and $120.
Sales
Outerwear 60 50 40 30 20 10 0
Volume
Promo 0
100
Prestige 200
Price
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Dresses Our dresses range in price from $60 to $140. The mass volume of our sales and the image of the boutique reflect from $90 to $110 so, the majority of our merchandise falls into that assortment.
Sales
Price Range 60 50 40 30 20 10 0
Volume
Promo 0
Prestige
100
200
Price
Accessories The majority of our accessories we carry are less expensive than our apparel ranging from $10 to $70. Sales peak in the $30 to $50 range.
Sales
Price Range 60 50 40 30 20 10 0
Volume
Prestige
Promo 0
50
100
Price
Price Range We have a small assortment of shoes ranging from $30 to $90. The majority of our shoes fall between $50 and $70 because that’s when our sales increase and the quality of the shoes replicate the quality of the apparel.
Sales
Shoes 60 50 40 30 20 10 0
Volume
Promo 0
50
Prestige 100
Price
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Place In order to save money on shipping charges we buy our merchandise from local vendors within Washington. This allows us shorter shipping times and faster distribution from the wholesaler to the consumer. Since our buying is done locally we ship our merchandise by trucks. Vendors: Tik Tik Garment: Tik Tik Garment is a private wholesaler that sells women’s, misses’, and junior apparel. They are located in Spokane, WA. Seattle Pacific Industries, Inc.: Seattle Pacific Industries, Inc. is a private company located in Kent, WA. They sell women’s, children’s, and infant’s clothing and accessories. Australia Unlimited: Australia Unlimited is a private company located in Kent, WA that manufactures women’s non-athletic footwear. Larsen Inc. of Seattle: Larsen Inc. of Seattle is a private company located in Woodinville, WA that is a wholesaler in work clothing. ** Vendor information provided by: http://www.manta.com/mb_43_B0_48/apparel/washington
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Promotion Mix Advertising Strategy We plan to reach out and advertise to our consumers using different mediums that we know our demographic read and pay attention to. Radio: We will have radio advertisements that play over certain stations broadcasted in Bellevue, WA to let our consumers know about events and promotions going on in the store. o
Stations:
KRQI 96.5 FM Alternative Radio
KUBE 93.3 FM Hip Hop Radio
KUOW 94.9 FM College Radio
Internet: Because of Quantcast we have the ability to track which websites our demographic is visiting most often and which sites allow for advertising which is another way we will reach out to our consumers. We also plan to have our own social networking sites on Facebook and Twitter to keep people up to date about what is going on. o
Most popular sites for our demographic that allow advertising:
Yahoo.com
Google.com
Facebook.com
Youtube.com
MSN.com
Live.com
Newspaper and Magazines: We will have advertisements that run in newspapers such as, Seattle Times, and D-List Magazine.
Direct Marketing Strategy We are planning a couple ways to directly advertise and promote our business to consumers. We believe with special offers that are only available to certain customers it gives them more incentive to come shop at our store. “VIP” customers: When shoppers spend a certain amount money in our boutique they will have an opportunity to sign up as a VIP customer. They will be emailed and notified about special promotions and “invitation only” events that give them first pick on new merchandise after hours.
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Mail: We will be sending flyers through the mail for promotions that are going on such as, buy two get one free accessories, or buy one get one half off apparel, etc. Phone Calls: On our website we will have a “coming soon” page, and people who become a member will have the opportunity to request a phone call when the merchandise they are interested in arrives in the store.
Public Relations Strategy People are more likely to support a business if they are involved and support local associations and the community. For that reason we plan on becoming a part of the Downtown Bellevue Association which is a nonprofit membership organization that has led the evolution of downtown Bellevue to a thriving urban area. We will be involved in the some of the major community events which in include: Film screening by the Bellevue Jazz Festival that takes place at the Meydenbauer Center. Bellevue’s Magic Season which is a Eastside Holiday Tradition. Live at Lunch which is Downtown’s summer concert series. 6th Street Fair which is a weekend arts festival.
* Information provided by: www.bellevuedowntown.org. Personal Selling and Sales Promotions At Andreas our goal is to have a very strong and personable selling staff. We want our employees to be able to put themselves in each consumer’s shoes and know what they want to hear to in order to buy the merchandise. So, following the hiring process, our sales employees will go through a structured training program were they will learn about each type of customer and the best strategies to go upon selling to them personally. VALS training: Our employees will go through training learning about our consumers based on their VALS characteristics. They will learn how to approach these women and be able to realize what is important to them. In this training they will also learn about Maslow’s Hierarchy of Needs which they can use to identify which level relates to the customer. They will go through workshops that will allow them to “sell” to each consumer individually. Following the VALS training our employees will also be trained in pricing. They will learn that most consumers in the store come in with more money than they
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are letting on and how to get them to spend a little more than they were planning on. They will learn about promotional, volume, and prestige pricing and how to get that promotional price shopper to spend more money on the volume price items, or how to get the volume price shopper to buy that prestige priced product.
By the end of our training our sales employees will know how to identify customers, relate to them, and get them to spend their money. Internet Strategy We will be putting together a store website that will feature our merchandise and promotional deals happening in the store. Our merchandise will be available to purchase online, as well as merchandise we don’t carry in the store so we can get more consumers to shop online. This also allows us to grow and broaden our target market so other people who aren’t located near us can shop and buy our products. Special promotions will also be available to consumers who shop online. Promotions such as, free shipping with a minimum purchase, or spend a certain amount and receive a free piece of jewelry will give our customers incentive to shop online.
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June 2011 o
June 1: Begin Project
o
June 2 – June 12: Hire lawyers
o
Start the process of opening Andreas Boutique. We search for and hire a lawyer for possible liability issues.
June 5: Talk to future vendors
A meeting with our vendors is scheduled at the beginning of the process to discuss our plans with and for the business, as well as discuss buying, shipping, and return policies.
o
June 5 – June 25: Hire accountants
o
Search for and hire an accountant to manage and limit our money spending.
June 6 – June 26: Find a venue
We have to search for and find where in Bellevue our business will be located, and where profits will be highest.
o
June 25-July 5: Find ad agency
Searching for an ad agency who will reach our consumers and have the biggest affect on our business.
o
June 30: Confirm venue
After deciding the best location we have to confirm the lease of the venue.
July o
July 15 – August 2: Choose type of ad campaign
We have to decide on the best type of ad campaign that will bring in consumers and drive sales and profits up.
December o
Dec. 1 – Dec. 11: Hire interior designer
During this time we interview and hire an interior designer to do the decorating of the store.
January o
Jan. 1 – Jan. 20: Create floor plan
We work with the interior designer to decide how we are going to set up the store and organize the retail.
o
Jan. 3 – June 7, 2011: Advertise on social networking sites
We begin our advertisements on social networking sites and contact residents in Washington, so they are aware of the up-coming business.
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o
Jan. 25 – Jan. 30: Choose Paint
Before we begin decorating, we start by choosing paint that is warm, calming and inviting.
February o
Feb. 1- Feb. 30: Order racks
We order the racks we need at the beginning of February and allow four weeks for arrival.
o
Feb. 5 – Feb. 30: Choose décor
We spend time with the interior designer choosing which décor would best fit the store.
o
Feb. 15 – Mar. 25: Order 1st shipment
We order our first shipment of retail for opening season, so it is ready to put on the floor before the soft opening.
March o
Mar. 1 – Mar. 20: Order sign
o
Mar. 1 – May 10: Receive shipments
o
We order the sign for the store so residents know what’s coming. We begin receiving retail that we ordered in the first shipment.
Mar. 3 – Jun. 8: Advertise grand opening
We start advertising the grand opening on local television, radio, and other public advertisements.
o
Mar. 5 – Apr. 4: Hire sales people
From March to the beginning of April we start interviewing possible employees for the most qualified sales team.
o
Mar. 5 – Mar. 25: Set up
We work with the interior designer to set up the decorations and the racks, dressing rooms, etc.
o
Mar. 15 – Apr. 24: Order 2nd shipment
We order our second shipment of retail for opening season.
April o
Apr. 1 – Apr. 20: Purchase operating materials
We purchase operating materials such as registers, computers, office supplies, etc.
May
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o
May 1 – May 15: Train salespeople
o
The first two weeks of May we train our sales team.
May 11 – May 31: Send out special offers
We mail out promotions, and advertise with coupons in the local newspaper for the grand opening.
June 2012 o
Jun. 1: Soft Opening
We open the doors before the grand opening just to see how well the business does without advertisements.
o
Jun. 7: Grand Opening!
First day of business!
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Andreas Grand Opening Our grand opening is taking place on June 7th, 2012 after a soft opening on July 1st,
2012. Featured:
A number of professional stylists will be present to assist our consumers. A short runway show will be done during the day to feature our most popular brands and styles. Champagne, wine and snacks will be available to our consumers free of charge. Alternative music will be played on Pandora Radio.
Promotions
At the grand opening the first 50 customers will receive a free necklace and a coupon for 15% off of their entire purchase. Coupons will have been mailed out to our targeted consumers around Bellevue for 10% any piece of merchandise. Customers who come into the store will have an opportunity to enter a drawing for a $150 gift certificate to Maggiano’s Little Italy Italian Restaurant. Winner will be drawn and notified at the end of the day.
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ANDREAS BOUTIQUE 12 Months After Opening - GANTT CHART
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June 2012 o
June 1-June 4: Bellevue Jazz Festival
Bellevue’s annual Jazz Festival starts June 1st. We will participate to promote our business as well as, support the community.
o
June 15 – June 20: Form Management Team
We will start interviews to find dependable employees to present the opportunity for a management position.
o
June 20-30: Train Management Team
New managers will go through training to learn how to deal with counting tills, customer complaints, returns and exchanges, etc.
July o
July 1– July 5: Hire Employees
We will be doing interviews to hire a few more employees for the summer season.
o
July 5 – Sep. 8: Bellevue Live at Lunch
Bellevue’s Live at Lunch community event takes place during these months and we will be participating.
o
July 10-July 20: Train Employees
These ten days our new employees will go through a mandatory training to learn about the business, how everything works, and the best selling techniques for our consumers.
o
July 15-July 16: Place new orders
We will be working with our vendors to place orders for the upcoming fall season.
o
July 20: Confirm orders
We will be calling to confirm that the orders were place for the correct amount and sizes.
o
July 20-July 24: Trade Show in Los Angeles
We will be taking a trip to LA to the ENK trade show that takes place during this time to find out about upcoming trends.
o
July 25-July 31: Back to School Promotion
We will be having a 15% off apparel back to school promotion for our college-going consumer.
o
July 29-July 31: Bellevue 6th Street Fair
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Bellevue’s 6’th Street Fair takes place, put on by the community and gives us another chance to get involved.
August o
Aug. 1: Start Website
Two months after opening we will start up our website for our online community.
o
Aug. 2: Online Promotion
To promote our online sales we will be starting our website with a 20% off everything sale.
o
Aug. 10: Mail Invitations to VIP Customers
For our customers who signed up for VIP access we will be mailing their invitations for the special after-hours promotion.
o
Aug. 15-Aug. 25: Radio ad for end of Spring Promotion
We will be broadcasting local radio advertisements for markdowns on spring merchandise.
o
Aug. 20: Receive Shipment
We will receive the shipments we placed with our vendors for our fall merchandise.
o
Aug. 25 – Aug. 31: End of Spring Promotion
In order to get merchandise out of the store we will be having a 20% off spring apparel.
o
Aug. 31: Invitation Only VIP Customers
Our after-hours promotion for our VIP customers offers them the chance to shop our new merchandise before anyone else with a 15% off coupon.
September o
Sep. 1: Employee Meeting
We will be have an employee meeting to discuss what is going well and what needs to change.
o
Sep. 10 – Sep. 11: Place New Orders
o
We work with our vendors to place new order for the upcoming season.
Sep. 13 – Sep. 20: Fashion Week New York
We will be attending Fashion Week in New York to search for upcoming trends.
o
Sep.15: Confirm Order
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Call to confirm that the new order was placed with the correct sizes, style and color.
o
Sep: 15 – Sep. 20: Online Promotion
We will offer a 15% off apparel for our online community.
October o
Oct. 10: Mail Invitations For VIP Customers
Send out our VIP invitations for our next event to let them know its coming.
o
Oct. 15: Receive Shipment
o
Receive the new shipment for the mid-season.
Oct. 18: Invitation Only VIP Customer
We have our after-hours event for VIP customer to have the first option to shop our new merchandise with a 10% off coupon.
November o
Nov. 1 – Nov. 5: Online Promotion
o
Nov. 1 – Nov. 3: Hire Employees
o
Free shipping and handling. Hire more employees for holiday season.
Nov. 5 – Nov. 14: Train Employees
These ten days our new employees will go through a mandatory training to learn about the business, how everything works, and the best selling techniques for our consumers.
o
Nov. 15 - Nov.19: Trade Show in Los Angeles
We will be going to the ENK trade show in Los Angeles to look at upcoming trends.
o
Nov. 20 – Nov. 25: Radio Advertisement for Black Friday Promotion
We will locally broadcast a 15 second ad for our 30% off everything Black Friday Promotion.
o
Nov. 24: Thanksgiving
o
Nov. 25: Black Friday
o
Closed for the holiday. 30% off in store promotion.
Nov. 25 – Jan. 15: Bellevue Magic Season
Participate in Bellevue’s community Magic Season event.
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o
Nov. 28: Cyber Monday
30% off everything Cyber Monday Promotion.
December o
Dec.1: Receive Shipment
o
Dec. 15 – Jan. 1: Radio Advertisement for Holiday Sale
o
We will locally broadcast a 15 second ad for our Holiday promotion.
Dec. 15 – Jan. 5: Holiday Sale
o
Receive new shipment
Holiday sale begins in store and online.
Dec. 24 – Dec. 25 – Christmas Eve and Christmas
Closed for the holiday.
January 2013 o
Jan. 1: New Years
o
Jan. 3: Employee Meeting
o
Closed for the holiday. Employee meeting to discuss changes for the New Year.
Jan. 15 – Jan. 20: ENK Trade Show in New York.
We are traveling to New York for the ENK trade show.
February: o
Feb. 2 – Feb. 3: Place New Orders
o
Feb 5: Confirm New Order
o
Call to make sure order was place with the correct sizes, styles and colors.
Feb. 5 – Feb 10: Online Promotion
o
Work with vendors to place new order for upcoming season.
15% off apparel for our online community.
Feb 20 – Feb 23: Shoes and Accessories Promotion
In store 20% off shoes and accessories sale.
March o
March 10: Receive Shipment
o
Receive new shipment.
March 10: Mail Invitations for VIP customers
Send out our event invitations to our VIP customers to let them know the event is coming.
o
March 20: Invitation Only VIP customer
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Our after-hours promotion for our VIP customers offers them the chance to shop our new merchandise before anyone else with a 15% off coupon.
April o
April 15-April 20: Accessories Promotion
20% off all in store accessories.
May o
May 1: Receive New Shipment
o
May 1 – May 7: Hire Employees
o
Receive new shipment for upcoming season. Hire new employees for summer season.
May 10 – May 20: Train Employees
These ten days our new employees will go through a mandatory training to learn about the business, how everything works, and the best selling techniques for our consumers.
o
May 15: Mail Flyers for One Year Sale
o
May 20-May 21: Place New Orders
o
Mail out flyers to our frequent customers for our one year sale. Work with vendors to place new orders for the upcoming season.
May 30: Confirm Order
Call to confirm order was placed with the correct sizes, styles, and colors.
June o
June 1 – 2: One Year Anniversary Promotion
In store and online 20% of everything sale.
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Reach; Frequency; Advertising Budget Medium
Reach
Seattle Times
Frequency
Size/
Monthly
Yearly Cost
Duration
Cost
Once a Month
2x2
$1,703.70
$20,444.40
Three Months
Âź page
$569
$6,828
Three Times per Year
:15 sec.
$209
$2,508
General
CPC cost (.62 per click) Estimation: 5,000 per month =$3,100
Estimate:
Total: $5,581.70
Total: $66,980.40
1,021,900 per day
D-List Magazine
Number of Subscribers: Unknown Followers: 8,874 Facebook 2054 Twitter
KNDD 107.7 FM
136,832,000 Facebook.com
Size
$37,200
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Pricing Plan Pricing Objectives and Pricing Strategies Our pricing plan at Andreas is set to achieve sale expectations and customer satisfaction. The location of our boutique in Downtown Bellevue is sure to bring in foot traffic, so our pricing plan is built to satisfy our consumers in order for our sales rise each quarter. Objective: Increase Volume of Sales Strategy: Stepped Pricing
Our first objective is to increase the volume of our sales and our approach to attain this goal is through stepped pricing. We have a wide range of prices. Our merchandise ranges in price from around $30 to $140. We also offer accessories as low as $10. This allows different consumers who have a large range of budgets to come in and shop our boutique. Objective: Match Competitor Prices Strategy: Promotional Pricing
Our second objective is to match competitor prices. Being in close proximity to Bellevue Square in Downtown Bellevue there are many competitors in the area. In order for us to attract consumers and bring them into our shop instead of our competitors we plan to match our prices with those of our competitors who have similar products. We are hopeful that our promotional pricing and our promotional events will catch the attention of consumers and increase our sales. .
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Mark-Ups and Mark-Downs
Product
Mark-Up %
Mark-Down % (1st)
Mark-Down % (2nd)
Mark-Down % (3rd)
Tops
300-400
15%
10%
5%
Bottoms
250-300
20%
10%
5%
Outerwear
200-300
20%
10%
5%
Dresses
250-300
15%
10%
5%
Shoes
300-400
20%
10%
5%
Accessories
500-600
20%
10%
5%
Stock Turnover Stock turnover is important to pay attention to because we don’t want our turnover to be slow, but we also don’t want it to be too fast. Slow turnover could mean our prices are too high or we ordered the wrong selection of merchandise and it isn’t selling. Fast turnover could be a problem because it means prices may be too low and we may not be able to replace the merchandise as fast as it is selling. At Andreas we will use a pull strategy in order to get our merchandise to sell. We will choose the merchandise in stock and advertise the products. Advertisements make people aware of the merchandise which will pull them into the store to purchase it. Ratio: Inventory Turnover Ratio= Total Sales / Average Stock Predicted Turnover: 4 turns per year
103
Forms of Payment (Vendors) Vendors: Tik Tik Garment: Tik Tik Garment is a private wholesaler that sells women’s, misses’, and junior apparel. They are located in Spokane, WA. Seattle Pacific Industries, Inc.: Seattle Pacific Industries, Inc. is a private company located in Kent, WA. They sell women’s, children’s, and infant’s clothing and accessories. Australia Unlimited: Australia Unlimited is a private company located in Kent, WA that manufactures women’s non-athletic footwear. Larsen Inc. of Seattle: Larsen Inc. of Seattle is a private company located in Woodinville, WA that is a wholesaler in work clothing. Payment: Credit Check
104
Distribution Plans Off-Site Sales Off-site sales allow us to sell more merchandise and increase our profits. It is important to have these opportunities available to our consumers because if the only way they can buy is in the store we are severely limiting sales. Off-site sales allow us to not only sell more merchandise, but also expand our target market. They more people who know about our business and shop our business they higher our sales are going to be. At Andreas we plan to reach consumers at a further distance and increase our sales through our website. Our social networking sites will link directly to our store website and hopefully gain more visitors. This option for our consumers to shop online is an opportunity to increase our sales because consumers who may not be able to come to our store directly can still shop online. We will also do sales over the phone if consumers call to purchase a piece of merchandise. If a consumer comes in and finds a piece of merchandise they want but can’t buy it then for some reason, they can call later and we can find the product they like and ship it directly to them.
Shipping Price Chart We will ship our merchandise to these consumers using UPS who distributes packaging around the world. One of the benefits our customer’s have shopping online or call purchases is that it is three day shipping which we use through UPS, which is the world’s largest package delivery company. Choosing UPS is vital to our business because in order for us to expand and reach consumers worldwide through our website we have to be able to deliver to them.
105
UPS Shipping (3 Day)
Forms of Payment (Customers) In store: Cash Credit or Debit o
Visa
o
MasterCard
o
Discover
Online: Credit or Debit o
Visa
o
MasterCard
o
Discover
106
A nd r e a s OPERATIONS PLAN
107
Inventory Control and Management Functions Planning; Forecasting; Projecting Seasonal Needs; Buying Resources and Procedures In order to prepare for each upcoming seasons preparation for the store and new merchandise needs to be planned out. Store layouts and merchandise concepts must be planned in advance by the store owner so when the merchandise is ready to be set up it can be organized in a functional manner. Procedures for planning inventory and management functions will include: scrutinizing current inventory and clarifying necessary improvements; utilizing resources to analyze trends and Andreas’s budget; determining which merchandise to put on display and back stock; and ensuring employees are properly trained to handle returns and exchanges. In order to know what will be trending in upcoming seasons forecasting and research must be done to buy merchandise and prepare the store. The store owner will be taking monthly trips to Los Angeles and traveling to New York twice a year to attend fashion shows, trunk shows, and buy events to research and collect information about upcoming trends what consumers are looking to buy. The store owner will also, with the help of the sales team, examine how current products are selling, products in need of replenishment, and which items to markdown. Informing employees of popular items, as well as, new markdowns with allow them to suggestively sell and upsell to customers. Daily research will be done from online fashion magazines such as, Elle Magazine; Bazaar; Vogue; Glamour, etc. Subscriptions to fashion blogs will also help to keep us informed about what to expect in upcoming seasons. The process the owner will follow when projecting seasonal needs include: analyzing sales from the previous year to compare the types of products that sold and did not sell. Preparing for buy trips with plane tickets, hotel reservations, itineraries, etc. are crucial to be sure deadlines are met, good deals are taken advantage of and the trip is organized and as stress free as possible. Setting up spending budgets and planning out the amount of merchandise that is needed to be purchase on each trip will be helpful so we don’t overspend, or purchase too little or too much. 108
Trend Analysis Our techniques to analyze new trends are also ways to not only research upcoming trends, but to find ways to get ahead of our competitors. Visiting other small boutiques like La Ree Boutique, Tory Burch, and Christi’s on Main will help us to predict what changes they will be making for upcoming seasons and merchandise they will be bringing into their store. Also, by visiting larger businesses like department stores such as, Nordstrom and Macy’s we can not only see the changes they are making, but gather ideas and inspiration about what we should do with our boutique regarding displays and promotional events. We plan to subscribe to a number of fashion magazines, both printed and online; as well as, fashion blogs and databases. As listed above, magazines such as Elle, Bazaar, Vogue, Glamour, Women’s Wear Daily, WGSN and InStyle all of which stay up-to-date and resourceful.
Tracking Stock on Hand and External Control Our POS system will track our inventory using Windward’s System Five POS Software. This software is designed to track merchandise using bar code readers that will eliminate product from our inventory count as it is purchased. Along with the Windward software we will be performing a weekly hand count of instore merchandise to ensure the most precise and accurate count of the merchandise we have on hand. This will help us to keep track of what we have in store and notice loss prevention more clearly and when precisely merchandise has disappeared. To be even more accurate we will be bring in and working with Seattle’s American Inventory Company who will come in once a year to double check our inventory so we have a more accurate count. This external service will most likely be performed in August or September before the fall season hits.
109
Human Resources Taxes; Legal; and Accounting Lawyer: Robert Turner Phone: (206) 564-3857 Email: RTurner@yahoo.com Accountant: Tom Brown Phone: (206) 492-1837 Email: Tom_Brown@hotmail.com Bookkeeper: Janet Smith Phone: (206) 586-3692 Email: JSmith45@aol.com **All records will be kept and help private by the owner of Andreas.
Hiring Process and Qualifications Interested applicants will be able to pick up applications in store or download them online. They must apply in store. Applicants will not be able to send us their application online because we feel direct contact and interaction are crucial in deciding on potential employees and applying in store allows us to create a first impression. Applicants who receive a call back will go through a two-step interview process. The first basic and general interview will be done with an Assistant Manager. The second interview if the Assistant Manager sees the applicant as a potential employee will be a more in depth interview with the Store Manager who will ultimately decide if the interviewee is a good fit to the company. Applicants who are applying for an entry-level position, such as a sales associate need not have previous retail experience; however customer service experience in another business is a plus. We will offer paid training to all employees.
110
Those who are applying for a higher position such as Assistant Manager must have one year experience as an assistant manager at a previous company. Applicants for Assistant Manager positions will go through a two step interview process as well. The first interview will be the general interview with two of the boutiques current Assistant Mangers followed by a more in-depth interview with the Store Manager We will promote and train employees within the company who show integrity and dependability to management positions.
Training Plan and Procedures New employees will go through training workshops taught by the Store Manager and Assistant Managers. In these workshops they will be given information not only about our products, the business and basic customer service, but about our customers and the best ways to sell to each of them. They will learn about different types of consumers and the different VALS as well as how to classify each consumer into each VALS category. They will also be taught Maslow’s Hierarchy and be able to incorporate it into their selling strategies. They will learn about consumer buying behavior and about what motivated different consumers to buy. New employees will also learn about loss prevention and taught what to do and how to act in case of theft. These workshops will most likely take two or three days for about five hours each day. Once they have completed their workshops new employees will advance to on the job training where they will shadow another employee for a day or two so, they will have the opportunity to ask questions and feel completely comfortable on the selling floor. Once they have shown they have the ability and knowledge to interact with customers and offer them information they will start working regular shifts.
Dismissal Procedures and Criteria At Andreas we will have a three strike policy. Before being hired employees will be asked to sign an agreement stating that we reserve the right to terminate their position when we feel necessary. Failure to comply with our requirements more than three times will lead to their dismissal; however, in extreme cases such as theft, harassment, or distasteful public behavior in the presence of customers will lead to immediate termination. Employees will be documented for any of the following reasons: Tardiness arriving to work or returning from a 111
break, failure to comply with authoritative direction, taking advantage of in store systems such as, the internet, and the telephone, treating customer with less than quality service, etc. Other employees who wish to discontinue working for Andreas will be asked to turn in a two week written notice. Failure to do so will eliminate their chances for rehire.
Benefits and Qualification Criteria Assistant Managers and Sales Associates who have worked at Andreas for one year minimum and are currently working full time will have the opportunity to receive medical and dental coverage. After two years they will receive one week paid vacation per year. Sick days will remain unpaid. All employees will receive an hourly wage plus commission. Hourly wages will vary depending on job title and performance and will be kept private between each employee and the employer. At Andreas we feel the need to contribute to higher education; therefore, we will hire one or two internships per quarter who are earning their degree in Business, Management, Marketing, Advertising and Journalism. Interns will be unpaid, but for school credit. They will work a minimum of ten hours per week performing duties such as maintaining and updating blogs and social networking sites, assisting in visual merchandising, management duties, and receive an opportunity to assist in a buying trip (paid by Andreas) depending on their performance.
112
Facilities Maintenance Janitorial Opening and Closing Procedures Each night at closing the staff on duty is required to replace merchandise from the fitting rooms to their original location on the selling floor. Making sure merchandise is organized and detailed for the next day. Nightly reports of the whole day will be run by Assistant Managers and kept on file in the office. The cash register will be counted and money will be stored in the safe by the manager on duty. The break room, bathroom, and office will all be picked up and organized for the following day. Outdoor signs will be brought inside and lights will be dimmed. The Manager will set the store alarm and all employees will leave together. Every morning the employees responsible to open will make sure the business is up to standards and ready for customers. The floor will be swept; fixtures and tables will be dusted. Any merchandise that appears misplaced will be put where it belongs. They will make sure fitting rooms are completely empty and clean. Managers will be preparing cash drawers with the appropriate amount and filling out daily forms to keep track of who is on the schedule at what time and scheduling approximate times for breaks. Our external janitorial service team from NOBLE Janitorial Service in Seattle, Washington will come to the store once a week after closing to clean the bathrooms, polish the floors, and wash windows, etc. Once every two months we will rent a buffer to shine the hardwood flooring. Once a month a member of the IT team that we use will stop in before opening to check on our computers and our website to make sure they are running smoothly; as well as, do any updates or fix any problems we might be having with the system.
Security All employees will be trained for internal product security. They learn about the security tags on the individual pieces of merchandise; as well as, the alarm systems that the product tags activate that will be placed at the front of the store. Since, a manager will always be present only managers will be trained to know about our internal store alarm. They will be the only people to know the code and how to operate it. Our alarm system will be installed by Front Point Security. 113
Customer Service Complaints All customer complaints will be reported to the manager on duty who will document the complaint with the name of the customer, the incident, and the employees and the manager present at the time. The complaint and paperwork will be forwarded to the store manager who will take note of the incident and file the document for future reference.
Return Policy At Andreas we have a fixed return policy for customers to avoid confusion and frustration:
Any return must be made within thirty days of the original purchase.
Damaged items that have clearly been worn or used will not be accepted.
The customer must have the receipt and the tags for the merchandise they wish to return.
No returns will be accepted on custom orders or sale items.
Returns on merchandise purchased with a gift card can only receive store credit. *This return policy remains the same for both in-store and online shoppers.
Our return policy will be printed at the bottom of their receipt along with the boutique’s phone number so that they may call with any questions.
Referrals Customers who refer paying customers to our boutique will be rewarded with a gift card that will allow them 15% off their next total purchase. By granting these rewards we are taking care of our customers who are taking care of us. Once other people find out about the 15% reward they may start referring their friends and family as well bringing in more and more consumers which will help our business grow. Our business to business referral will benefit employees at other businesses, like the companies we have reciprocal links with on our website. By referring their customers to shop our store and vice versa we offer a 10% discount to their employees. Proof of employment is necessary in order to receive the discount.
114
After Sale Problems After sale problems such as damages to the merchandise (i.e. broken zippers, missing buttons, ripped or torn, stains, etc.) that went unnoticed before the time of the sale will be refunded in full. Though once the merchandise has left the store any return or exchange must follow our return policy.
115
A nd r e a s FINANCIAL PLAN
116
117
Tops Dresses Bottoms Shoes Outerwear Accessories
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
$ $ $
Fixed Expenses Inventory Purchase Rent Utilities, Phone, and Internet Supply Purchases Equipment Purchases & Repairs Taxes & Licensing Legal and Accounting Marketing and Advertising Payroll Payroll Taxes Owner's Draw Capital Reserve Deposit Loan Payment Miscellaneous Expenses Total Fixed Expenses
Profit (loss)
Cashflow Pattern Beginning Cash Ending Cash
Break Even Analysis
$
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
Jan
Gross Profit Retail Gross Margin Retail Gross Profit Total
Variable Expenses COG Tops @ COG Dresses@ COG Bottoms @ COG Shoes @ COG Accessories @ Total Variable Expenses Variable Expenses Percent
Total Sales Owners Contribution Capital Reserve Withdrawals Miscellaneous TOTAL INCOME:
INCOME: Sales
20% 25% 20% 15% 10%
Andreas Boutique
Projected Income Statement
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,982
$
750 $ 9,298 $
8,548
3,167 4,200 300 100 200 150 150 1,000 1,500 195 1,000 11,962
17,710 $ 86% 20,510 $
860 750 740 420 220 2,990 14%
4,300 3,000 3,700 2,800 4,700 2,200 20,700 2,800 23,500
Feb
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,929
$
9,298 $ 15,414 $
6,116
3,784 4,200 200 1,000 1,500 195 1,000 11,879
17,995 $ 85% 17,995 $
1,000 625 780 450 250 3,105 15%
5,000 2,500 3,900 3,000 4,200 2,500 21,100 21,100
Mar
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
14,042
$
15,414 $ 24,151 $
8,737
3,708 4,200 200 50 1,000 1,500 195 1,000 11,853
20,090 $ 84% 20,590 $
1,300 800 840 510 260 3,710 16%
6,500 3,200 4,200 3,400 3,900 2,600 23,800 500 24,300
Apr
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
14,188
$
24,151 $ 32,570 $
8,419
4,029 4,200 200 25 197 100 500 1,500 195 1,000 11,946
19,365 $ 84% 20,365 $
1,040 1,000 780 525 290 3,635 16%
5,200 4,000 3,900 3,500 3,500 2,900 23,000 1,000 24,000
May
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
15,292
$
32,570 $ 40,114 $
7,544
4,661 4,200 200 500 1,500 195 500 1,000 50 12,806
20,350 $ 84% 20,350 $
1,200 1,050 800 600 300 3,950 16%
6,000 4,200 4,000 4,000 3,100 3,000 24,300 24,300
Jun
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
15,485
$
40,114 $ 49,861 $
9,747
4,488 4,200 200 200 500 1,500 195 500 1,100 12,883
22,630 $ 83% 22,630 $
1,560 1,200 840 630 340 4,570 17%
7,800 4,800 4,200 4,200 2,800 3,400 27,200 27,200
Jul
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,209
$
49,861 $ 58,443 $
8,582
4,825 4,200 200 25 224 150 500 1,500 195 500 1,200 13,518
22,100 $ 83% 22,100 $
1,600 1,100 780 600 320 4,400 17%
8,000 4,400 3,900 4,000 3,000 3,200 26,500 26,500
Aug
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
15,938
$
58,443 $ 70,196 $
11,753
4,172 4,200 200 50 500 1,500 195 500 900 1,200 13,417
25,170 $ 84% 25,170 $
1,700 1,000 900 780 350 4,730 16%
8,500 4,000 4,500 5,200 4,200 3,500 29,900 29,900
Sep
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
14,902
$
70,196 $ 81,196 $
11,000
3,315 4,200 200 500 1,500 195 500 1,100 1,200 12,710
23,710 $ 85% 23,710 $
1,400 850 860 660 320 4,090 15%
7,000 3,400 4,300 4,400 5,500 3,200 27,800 27,800
Oct
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,917
$
81,196 $ 90,190 $
8,994
3,983 4,200 200 25 253 150 500 1,500 195 1,000 50 12,056
21,050 $ 87% 21,050 $
1,100 500 800 570 280 3,250 13%
5,500 2,000 4,000 3,800 6,200 2,800 24,300 24,300
Nov
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,506
$
90,190 $ 100,081 $
9,891
4,044 4,200 200 200 500 2,000 260 800 1,000 1,000 14,204
24,095 $ 86% 24,095 $
1,640 700 740 525 300 3,905 14%
8,200 2,800 3,700 3,500 6,800 3,000 28,000 28,000
Dec
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
20,247
100,081 107,547
7,466
3,484 4,200 200 25 500 2,000 260 2,000 2,800 2,000 17,469
$
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
24,935 $ 86% 24,935 $
1,400 800 840 585 340 3,965 14%
7,000 3,200 4,200 3,900 7,200 3,400 28,900 28,900
184,637
106,797
47,660 50,400 2,500 200 700 823 550 7,500 19,000 2,470 3,800 7,300 13,700 100 156,703
259,200 85% 263,500
15,800 10,375 9,700 6,855 3,570 46,300 15%
79,000 41,500 48,500 45,700 55,100 35,700 305,500 4,300 309,800
Year to Date
118
Andreas Boutique
Tops Dresses Bottoms Shoes Outerwear Accessories
$ $ $
Break Even Analysis
$
Profit (loss)
Cashflow Pattern Beginning Cash Ending Cash
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Fixed Expenses Inventory Purchase Rent Utilities, Phone, and Internet Supply Purchases Equipment Purchases & Repairs Taxes & Licensing Legal and Accounting Marketing and Advertising Payroll Payroll Taxes Owner's Draw Capital Reserve Deposit Loan Payment Miscellaneous Expenses Total Fixed Expenses
$
$ $ $ $ $ $
$
20% 25% 20% 15% 10%
$ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
15,306
$
750 $ 11,906 $
11,156
3,801 4,200 300 100 200 150 150 1,000 1,500 195 1,500 13,096
21,252 $ 86% 24,252 $
1,032 900 888 504 264 3,588 14%
5,160 3,600 4,440 3,360 5,640 2,640 24,840 3,000 27,840
6,000 3,000 4,680 3,600 5,040 3,000 25,320 25,320
$ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
15,637
$
11,906 $ 20,164 $
8,258
4,541 4,200 200 1,200 1,500 195 1,500 13,336
21,594 $ 85% 21,594 $
1,200 750 936 540 300 3,726 15%
$ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
Apr
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,934
$
20,164 $ 30,478 $
10,314
4,449 4,200 200 50 1,200 1,500 195 1,000 1,500 14,294
24,108 $ 84% 24,608 $
1,560 960 1,008 612 312 4,452 16%
7,800 3,840 5,040 4,080 4,680 3,120 28,560 500 29,060
Mar
Jan
Feb
Variance=
Best Case
Gross Profit Retail Gross Margin Retail Gross Profit Total
Variable Expenses COG Tops @ COG Dresses@ COG Bottoms @ COG Shoes @ COG Accessories @ Total Variable Expenses Variable Expenses Percent
Total Sales Owners Contribution Capital Reserve Withdrawals Miscellaneous TOTAL INCOME:
INCOME: Sales
Projected Income Statement
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
May
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,083
$
30,478 $ 41,175 $
10,697
4,835 4,200 200 25 236 100 750 1,500 195 1,500 13,541
23,238 $ 84% 24,238 $
1,248 1,200 936 630 348 4,362 16%
6,240 4,800 4,680 4,200 4,200 3,480 27,600 1,000 28,600
1.2
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
17,407
$
41,175 $ 51,018 $
9,842
5,594 4,200 200 500 1,800 234 500 1,500 50 14,578
24,420 $ 84% 24,420 $
1,440 1,260 960 720 360 4,740 16%
7,200 5,040 4,800 4,800 3,720 3,600 29,160 29,160
Jun
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
17,452
$
51,018 $ 63,654 $
12,636
5,386 4,200 200 200 500 1,800 234 500 1,500 14,520
27,156 $ 83% 27,156 $
1,872 1,440 1,008 756 408 5,484 17%
9,360 5,760 5,040 5,040 3,360 4,080 32,640 32,640
Jul
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
19,057
$
63,654 $ 74,281 $
10,627
5,790 4,200 200 25 268 150 500 2,000 260 500 500 1,500 15,893
26,520 $ 83% 26,520 $
1,920 1,320 936 720 384 5,280 17%
9,600 5,280 4,680 4,800 3,600 3,840 31,800 31,800
Aug
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
19,857
$
74,281 $ 87,769 $
13,488
5,006 4,200 200 50 1,000 2,000 260 1,500 1,000 1,500 16,716
30,204 $ 84% 30,204 $
2,040 1,200 1,080 936 420 5,676 16%
10,200 4,800 5,400 6,240 5,040 4,200 35,880 35,880
Sep
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,735
$
87,769 $ 101,948 $
14,179
3,978 4,200 200 1,000 1,500 195 200 1,500 1,500 14,273
28,452 $ 85% 28,452 $
1,680 1,020 1,032 792 384 4,908 15%
8,400 4,080 5,160 5,280 6,600 3,840 33,360 33,360
Oct
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
16,280
$
101,948 $ 113,105 $
11,157
4,780 4,200 200 25 303 150 1,200 1,500 195 1,500 50 14,103
25,260 $ 87% 25,260 $
1,320 600 960 684 336 3,900 13%
6,600 2,400 4,800 4,560 7,440 3,360 29,160 29,160
Nov
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
18,841
$
113,105 $ 125,806 $
12,701
4,853 4,200 200 200 1,200 2,000 260 800 1,000 1,500 16,213
28,914 $ 86% 28,914 $
1,968 840 888 630 360 4,686 14%
9,840 3,360 4,440 4,200 8,160 3,600 33,600 33,600
Dec
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
20,127
125,806 138,363
12,556
4,181 4,200 200 25 1,000 2,000 260 2,000 2,000 1,500 17,366
$
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
29,922 $ 86% 29,922 $
1,680 960 1,008 702 408 4,758 14%
8,400 3,840 5,040 4,680 8,640 4,080 34,680 34,680
209,717
137,613
57,192 50,400 2,500 200 700 957 550 11,050 20,600 2,678 6,000 7,000 18,000 100 177,927
311,040 85% 315,540
18,960 12,450 11,640 8,226 4,284 55,560 15%
94,800 49,800 58,200 54,840 66,120 42,840 366,600 4,500 371,100
Year to Date
119
Andreas Boutique
Tops Dresses Bottoms Shoes Outerwear Accessories
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
$ $ $
Fixed Expenses Inventory Purchase Rent Utilities, Phone, and Internet Supply Purchases Equipment Purchases & Repairs Taxes & Licensing Legal and Accounting Marketing and Advertising Payroll Payroll Taxes Owner's Draw Capital Reserve Deposit Loan Payment Miscellaneous Expenses Total Fixed Expenses
Profit (loss)
Cashflow Pattern Beginning Cash Ending Cash
Break Even Analysis
$
$ $ $ $ $ $
$
20% 25% 20% 15% 10%
$ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
11,956
$
750 $ 6,689 $
5,939
2,534 4,200 300 100 200 150 150 1,000 350 46 1,200 10,229
14,168 $ 86% 16,168 $
688 600 592 336 176 2,392 14%
3,440 2,400 2,960 2,240 3,760 1,760 16,560 2,000 18,560
4,000 2,000 3,120 2,400 3,360 2,000 16,880 16,880
$ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
11,752
$
6,689 $ 11,062 $
4,373
3,027 4,200 200 1,000 350 46 1,200 10,023
14,396 $ 85% 14,396 $
800 500 624 360 200 2,484 15%
$ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
Apr
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
11,861
$
11,062 $ 17,622 $
6,560
2,966 4,200 200 50 1,000 350 46 1,200 10,012
16,072 $ 84% 16,572 $
1,040 640 672 408 208 2,968 16%
5,200 2,560 3,360 2,720 3,120 2,080 19,040 500 19,540
Mar
Jan
Feb
Variance=
Worst Case
Gross Profit Retail Gross Margin Retail Gross Profit Total
Variable Expenses COG Tops @ COG Dresses@ COG Bottoms @ COG Shoes @ COG Accessories @ Total Variable Expenses Variable Expenses Percent
Total Sales Owners Contribution Capital Reserve Withdrawals Miscellaneous TOTAL INCOME:
INCOME: Sales
Projected Income Statement
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
May
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
12,175
$
17,622 $ 23,863 $
6,241
3,223 4,200 200 25 157 100 750 350 46 1,200 10,251
15,492 $ 84% 16,492 $
832 800 624 420 232 2,908 16%
4,160 3,200 3,120 2,800 2,800 2,320 18,400 1,000 19,400
0.8
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,068
$
23,863 $ 29,199 $
5,336
3,729 4,200 200 500 500 65 500 1,200 50 10,944
16,280 $ 84% 16,280 $
960 840 640 480 240 3,160 16%
4,800 3,360 3,200 3,200 2,480 2,400 19,440 19,440
Jun
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,168
$
29,199 $ 36,348 $
7,149 $
3,590 4,200 200 200 500 500 65 500 1,200 10,955
18,104 $ 83% 18,104 $
1,248 960 672 504 272 3,656 17%
6,240 3,840 3,360 3,360 2,240 2,720 21,760 21,760
Jul
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,644
$
36,348 $ 43,149 $
6,802
3,860 4,200 200 25 179 150 500 500 65 500 1,200 11,378
17,680 $ 83% 18,180 $
1,280 880 624 480 256 3,520 17%
6,400 3,520 3,120 3,200 2,400 2,560 21,200 500 21,700
Aug
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,801
$
43,149 $ 51,668 $
8,519
3,337 4,200 200 50 500 1,000 130 1,000 1,200 11,617
20,136 $ 84% 20,136 $
1,360 800 720 624 280 3,784 16%
6,800 3,200 3,600 4,160 3,360 2,800 23,920 23,920
Sep
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
13,932
$
51,668 $ 59,254 $
7,586
2,652 4,200 200 1,000 1,000 130 1,500 1,200 11,882
18,968 $ 85% 19,468 $
1,120 680 688 528 256 3,272 15%
5,600 2,720 3,440 3,520 4,400 2,560 22,240 500 22,740
Oct
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
12,769
$
59,254 $ 65,033 $
5,779
3,186 4,200 200 25 202 150 1,000 750 98 1,200 50 11,061
16,840 $ 87% 16,840 $
880 400 640 456 224 2,600 13%
4,400 1,600 3,200 3,040 4,960 2,240 19,440 19,440
Nov
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
14,137
$
65,033 $ 73,643 $
8,611
3,235 4,200 200 200 1,000 1,000 130 1,000 1,200 12,165
19,276 $ 86% 20,776 $
1,312 560 592 420 240 3,124 14%
6,560 2,240 2,960 2,800 5,440 2,400 22,400 1,500 23,900
Dec
$ $ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $
15,191
73,643 80,484
6,841
2,787 4,200 200 25 1,000 1,500 195 2,000 1,200 13,107
$
$
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $
19,948 $ 86% 19,948 $
1,120 640 672 468 272 3,172 14%
5,600 2,560 3,360 3,120 5,760 2,720 23,120 23,120
157,454
79,734
38,128 50,400 2,500 200 700 688 550 9,750 8,150 1,060 7,000 14,400 100 133,626
207,360 85% 213,360
12,640 8,300 7,760 5,484 2,856 37,040 15%
63,200 33,200 38,800 36,560 44,080 28,560 244,400 6,000 250,400
Year to Date
120
Department Total
Department Total
Department Total
Department Total
Department Total
Total Inventory
Accessories
Shoes
Bottoms
Dresses
Tops
Department
Opening Inventory
Andreas Boutique
Necklaces Rings Earrings Bracelets
Pumps Boots Flats
Skirts Trousers Denim Leggings
Business Knit Semi Formal Casual
Blouses Knit Camisoles Button Down
1225
60 30 50 60 200
90 70 80 240
70 80 90 60 300
30 20 25 20 95
75 105 120 90 390
727
30 15 30 35 110
40 25 35 100
30 55 60 40 185
20 10 12 10 52
55 70 90 65 280
1952
90 45 80 95 310
130 95 115 340
100 135 150 100 485
50 30 37 30 147
130 175 210 155 670
15.00 24.00 26.00 10.00
30.00 20.00 35.00 15.00
$ 75.00 $ 120.00 $ 130.00 $ 50.00
$ 120.00 $ 80.00 $ 140.00 $ 60.00
$ $ $ $
7.00 3.00 1.50 5.00
$ $ $ $
70.00 30.00 15.00 50.00
$ 9.75 $ 65.00 $ 13.50 $ 90.00 $ 4.50 $ 30.00
$ $ $ $
$ $ $ $
$ 18.00 $ 90.00 $ 14.00 $ 70.00 $ 6.00 $ 30.00 $ 16.00 $ 80.00
90% 90% 90% 90%
85% 85% 85%
80% 80% 80% 80%
75% 75% 75% 75%
80% 80% 80% 80%
630.00 135.00 120.00 475.00 1,360.00
1,267.50 1,282.50 517.50 3,067.50
1,500.00 3,240.00 3,900.00 1,000.00 9,640.00
1,500.00 600.00 1,295.00 450.00 3,845.00
2,340.00 2,450.00 1,260.00 2,480.00 8,530.00
$ 26,442.50
$ $ $ $ $
$ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
6,300.00 1,350.00 1,200.00 4,750.00 13,600.00
8,450.00 8,550.00 3,450.00 20,450.00
7,500.00 16,200.00 19,500.00 5,000.00 48,200.00
6,000.00 2,400.00 5,180.00 1,800.00 15,380.00
11,700.00 12,250.00 6,300.00 12,400.00 42,650.00
$ 140,280.00
$ $ $ $ $
$ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
Item DescriptionOn HandOn Order Total Stock Cost $ Retail $ MU% Total Cost Total Price
121
Andreas Boutique
Department Total
Department Total
Department Total
Department Total
Department Total
Total Inventory
Accessories
Shoes
Bottoms
Dresses
Tops
Department
Closing Inventory
Necklaces Rings Earrings Bracelets
Pumps Boots Flats
Skirts Trousers Denim Leggings
Business Knit Semi Formal Casual
Blouses Knit Camisoles Button Down
1256
62 31 51 62 205
92 72 82 246
72 82 92 62 308
31 21 26 21 97
77 108 123 92 400
745
31 15 31 36 113
41 26 36 103
31 56 62 41 190
21 10 12 10 53
56 72 92 67 287
2001
92 46 82 97 318
133 97 118 349
103 138 154 103 497
51 31 38 31 151
133 179 215 159 687
15.00 24.00 26.00 10.00
30.00 20.00 35.00 15.00
$ 75.00 $ 120.00 $ 130.00 $ 50.00
$ 120.00 $ 80.00 $ 140.00 $ 60.00
$ $ $ $
7.00 3.00 1.50 5.00
$ $ $ $
70.00 30.00 15.00 50.00
$ 9.75 $ 65.00 $ 13.50 $ 90.00 $ 4.50 $ 30.00
$ $ $ $
$ $ $ $
$ 18.00 $ 90.00 $ 14.00 $ 70.00 $ 6.00 $ 30.00 $ 16.00 $ 80.00
90% 90% 90% 90%
85% 85% 85%
80% 80% 80% 80%
75% 75% 75% 75%
80% 80% 80% 80%
645.75 138.38 123.00 486.88 1,394.00
1,299.19 1,314.56 530.44 3,144.19
1,537.50 3,321.00 3,997.50 1,025.00 9,881.00
1,537.50 615.00 1,327.38 461.25 3,941.13
2,398.50 2,511.25 1,291.50 2,542.00 8,743.25
$ 27,103.56
$ $ $ $ $
$ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
6,457.50 1,383.75 1,230.00 4,868.75 13,940.00
8,661.25 8,763.75 3,536.25 20,961.25
7,687.50 16,605.00 19,987.50 5,125.00 49,405.00
6,150.00 2,460.00 5,309.50 1,845.00 15,764.50
11,992.50 12,556.25 6,457.50 12,710.00 43,716.25
$ 143,787.00
$ $ $ $ $
$ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
Item DescriptionOn HandOn Order Total Stock Cost $ Retail $ MU% Total Cost Total Price
122
Tops Dresses Bottoms Shoes Accessories
42,650 15,380 48,200 20,450 13,600
Total Assets
$
$ $
Fixed Assets Computer System Furnishings Store Fixtures Exterior Signs & Lighting Interior Lighting Vehicle Tools Total Fixed Assets Good Will 3,000 2,500 5,000 2,000 1,200 50
$
140,280 300 1,500
Total Inventory Accounts Receivable Supplies Prepaid Deposit Total Current Assets 157,830
171,580
13,750 -
Liabilities + Equity
$
$
Owner's Equity
$
$
$
50,000
-
Total Liabilities
Total Long Term Liabilities
Long Term Liabilities Business Loan
Current Liabilities Accounts Payable Taxes Payable Total Current Liabilities
Current Assets Cash Capital Reserve Inventory (retail) 750 15,000
Liabilities
Assets
Opening Balance Sheet
Andreas Boutique
171,580
121,580
50,000
50,000
-
Andreas Boutique Start Up Budget Total Required for Operation
Financed by Owner
Remaining to be Financed
Inventory Tops Dresses Bottoms Shoes Accessories Total Inventory
8,530 3,845 9,640 3,068 1,360 26,443
2,500 2,000 3,000 1,500 1,000 10,000
6,030 1,845 6,640 1,568 360 16,443
Equipment & Supplies Computer System Furnishings Store Fixtures Exterior Signs & Lighting Interior Lighting Vehicle Tools Office Equipment & Supplies Miscellaneous Total Equipment and Supplies
3,000 2,500 5,000 2,000 1,200 50 300 14,050
2,000 2,000 2,000 1,500 1,200 50 100 8,850
1,000 500 3,000 500 200 5,200
Marketing Expenses Research & Surveys Promotional Production Advertising Placement Give-Aways Personal Contact Total Marketing Expenses
800 1,000 4,000 200 200 6,200
800 1,000 2,000 200 100 4,100
2,000 100 2,100
Operating Expenses Working Capital Reserves Legal & Accounting Contract Negotiating Taxes, Licenses, & Permits Deposits, Rent, & Utilities Miscellaneous Total Operating Expenses
15,750 900 200 300 4,200 150 21,500
5,000 700 200 200 2,000 150 8,250
10,750 200 100 2,200 13,250
Real Estate Buildout Expenses Carpentry, Finishing Electrical Work Building Materials Unexpected Expenses Total Buildout Expenses
4,000 2,000 800 500 7,300
2,000 1,000 800 3,800
2,000 1,000 500 3,500
75,493 46% 54%
35,000
40,493
Miscellaneous Expenses
Start Up Budget Summary Budget Totals Percent Financed by Owner Percent Remaining to be Financed
Safety Margin
Additional Funding Required:
15%
$46,566
123
124
Tops Dresses Bottoms Shoes Accessories
43,716 15,765 49,405 20,961 13,940
Total Assets
$
$ $
Fixed Assets Computer System Furnishings Store Fixtures Exterior Signs & Lighting Interior Lighting Vehicle Tools Total Fixed Assets Good Will 3,000 2,500 5,000 2,000 1,200 50
$
143,787 300 1,500
Total Inventory Accounts Receivable Supplies Prepaid Deposit Total Current Assets 271,134
384,884
13,750 100,000
Liabilities + Equity
$
$
Owner's Equity
$
$
$
36,300
-
Total Liabilities
Total Long Term Liabilities
Long Term Liabilities Business Loan
Current Liabilities Accounts Payable Taxes Payable Total Current Liabilities
Current Assets Cash Capital Reserve Inventory (retail) 107,547 18,000
Liabilities
Assets
Closing Balance Sheet
Andreas Boutique
384,884
348,584
36,300
36,300
-
125
Tops Dresses Bottoms Shoes Accessories
$ $ $
Fixed Assets Computer System Furnishings Store Fixtures Exterior Signs & Lighting Interior Lighting Vehicle Tools Total Fixed Assets Good Will
Total Assets
3,000 2,500 5,000 2,000 1,200 50
$
172,544 300 1,500
Total Inventory Accounts Receivable Supplies Prepaid Deposit Total Current Assets
52,460 18,917 59,286 25,154 16,728
138,363 17,500
518,957
13,750 175,000
330,207 Liabilities + Equity
$
$
Owner's Equity
$
$
$
32,000
-
Total Liabilities
Total Long Term Liabilities
Long Term Liabilities Business Loan
Current Liabilities Accounts Payable Taxes Payable Total Current Liabilities
1.2
Current Assets Cash Capital Reserve Inventory (retail)
Variance=
Liabilities
Best Case
Assets
Closing Balance Sheet
Andreas Boutique
518,957
486,957
32,000
32,000
-
126
Tops Dresses Bottoms Shoes Accessories
Total Assets
$
$ $
Fixed Assets Computer System Furnishings Store Fixtures Exterior Signs & Lighting Interior Lighting Vehicle Tools Total Fixed Assets Good Will 3,000 2,500 5,000 2,000 1,200 50
$
115,030 300 1,500
Total Inventory Accounts Receivable Supplies Prepaid Deposit Total Current Assets
34,973 12,612 39,524 16,769 11,152
80,484 16,000
327,064
13,750 100,000
213,314 Liabilities + Equity
$
$
Owner's Equity
$
$
$
35,600
-
Total Liabilities
Total Long Term Liabilities
Long Term Liabilities Business Loan
Current Liabilities Accounts Payable Taxes Payable Total Current Liabilities
0.8
Current Assets Cash Capital Reserve Inventory (retail)
Variance=
Liabilities
Worst Case
Assets
Closing Balance Sheet
Andreas Boutique
327,064
291,464
35,600
35,600
-
127
128
A nd r e a s APPENDICES
129
APPENDICES A
130
131
APPENDICES B
132
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