Business 1
1 1 Introduction
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2 Business Model 9 2.1 Business Model canvas 10
3 Pre-Start Up 3.1Grants 3.2 Legal Structure 3.3 Regulations 3.4 Bank Account 3.5 Taxes 3.6 Insurance 3.7 Pre Start Up Costs
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3 13 15 17 18 19 20 23 24
4 4 Store Costs 4.1 Business Rates 4.2.Premises 4.3 Utilities 4.4 Architect Rates 4.4.1 Store Shopfit 4.4.2 Store Material 4.5 Store Equipment 4.6 Store Security 4.7 Store Packaging 4.8 Workspace Equipment 4.9 Total Costings
27 28 29 30 32 33 34 35 37 38 40 42
8 8 Revenue Streams 8.1 Designers Prices 8.2 Outside Prices 8.3 Revenue Overview 8.4 Cash Flow
84 85 86 87 88
5 5 Services Costs 5.1 Website Development 5.2 Social Media business 5.3 In-Store Service 5.4 Distribution 5.5 Total Costings
45 45 49 50 51 52
7 7 Press Day Venue 7.1 Food and drinks 7.2 Gift Bag 7.3 Services
67 68 72 75
6 6 Press / Launch Cost 54 6.1 Press day costs Overview 55 6.2 Snapchat Marketing 56 6.2.2 Snapchat Geo-tag 57 6.2.3 Flyers 50 6.2.4 Flyerers 61 6.2.5 Promo 2 62 6.2.6 Invitations 63 6.2.7 Post Launch campaign64 3
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Introduction Introduction
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The aim of this pack is to find more accurate sources of quotes and discounts to have a better idea of the general costing I would incur if I wanted to create my business. I will highlight the majority of the required costs for different products and services, including one-off payments, monthly payments and annual. I will also include the companies that I received the quotes from. By the end of the pack you will be able to get a better idea of the projected costs and what to expect by the end of the year. The only limitations in this pack are predicted sales. It is extremely hard to foresee how well a business will do without proof of concept or similar companies. Therefore I have not included a significant amount on sales figures and projections.
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Business Model Business Model
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Pre-Startup Pre-Startup
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Grants - 60 second pitch awards (Santander universities) - up to 1500 -Britain’s Top Real Role Model Competition up to 5,000 - Enterprising U (Royal bank of scotland) - up to 25,000 - Etsy award uk & ireland - up to 10,000 - HSBC elevator pitch - £150,000 - JLAB Start up Accelarator £100,000 - Voom virgin media £100,000+ Loans - TFG Capitsal private investment fund up to 3,000,000 - Virgin Start up 25,000 -HSBC £8 Billion SME Fund (discretionary) -TrueStart Start-up Acceleration Programme up to 50,000
Potential Grants £491.500+
These are some of the main grants that the company is qualified for and can use to generate capital.
Potential Loans £75,000+ (up to £3m)
£566,500+ 15
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BusinessLegal Structure
The company structure will be registered as a private lmited company. It is an incorporated business, so it will seperate my personal finances from my businesses finances , by doing this I will not personally be responsible for debts the business may not be able to pay if anything were to go wrong. The company will be limited by shares that could sold to potential investor in order to generate capital but maintaing control (i.e 51%)
Registering as a private limited company -ÂŁ15
TOTAL = ÂŁ15 17
BusinessRegulations For my concept to be developed into a more realistic and well considered project, I need to comply with particular regulations and operate within specific guidelines.
Health and safety With the store being open to the public and resident guests working in-store health and safety checks need to be taken out to ensure the safety of visitors. Also fire extinguishers need to be instore along with first aid kits. The Sale of Goods Act Supply of Goods and Services Act Sale and Supply of Goods Act When trading goods these acts need to be taken into consideration to ensure that we are selling and trading goods legally. National Minimum Wage Staff are entitled a standard of payment for providing their services in the worplace. The nature of the store is luxury so ÂŁ8 an hour will be the minimum for the candidate we require. The Disability Discrimination Act The store has to be structured in a way that provides access for disabled individuals. 18
ÂŁ8 per hour we pay
Door entrance and clear wide gangways allow access in and around the store. Also Disable WC on groundfloor.
BusinessBank Account
Key Facts Overdraft - On application No limit to annual turnover Mobile App Direct Debits 0% Interest
TOTAL = ÂŁ69 per year 19
BusinessTaxes Within the UK: There are no additional taxes to VAT-Registered businesses and customers. UK to EU - Free movement of goods: Due to an agreement with the EU, most parts can have products delivered to and from the UK without any additional taxes. UK to Third Countries: VAT is required to be added to deliveries to these countries from the UK. The standard VAT rate is 20% and will show the cost including and excluding VAT. Any customs charges applied to the deliveries will be paid by the recipient. Returned goods: When goods are returned to the store by a customer, replacement invoices or credit notes need to be sent to cover the VAT charges. Unless it is an exchange in which cause this wouldn’t be necessary. Corporation Tax This is a standard tax on the income/capital of business entities. This rate is generally around 20%.
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20%
Corporations also have an advantage over other business types in the amount of money they can raise through equity financing rather than debt. -Chron
Equity financing should be considered as a source of funding that will not drain working capital, as it money raised is not paid back. 21
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BusinessInsurance Public Liability Covers damages or injury to customers or visitors, that they incur as a result of the business. Employer Liability Covers damages or injury to employees, that they incur as a result of the business. Content cover Covers the value of all contents of the building including the event of loss, damage or theft.
Stock cover Tenants improvements cover Business turnover protection These additional insurance covers are not compulsory, but they are advised.
TOTAL = ÂŁ850 per year 23
Total Pre-startup Overview
Initial Payments Registration
Banking
Insurance
Total ÂŁ934
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Store Costs Store Costs
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StoreBusiness Rates The premises that I choose to rent or buy, will be charged business rates annually. Business rates are calculated by the value of the property. The first choice for the store was Dover Street in Mayfair as it is a perfect location for something both creative and luxurious. However as you can see below, it has one of the biggest rate increases (More detailed stats in appendix). Floral street looks the most promising with a prediction of a decrease.
Business Rate bills are sent between February and March, so by opening after this date allows a year to meet the cost. The Business rate decrease will be effective by 2017, so a reduced bill should be given. Current Total = ÂŁ77,000 per annum (Expected to fall by 17% by 2017 to 63, 910) 28
StorePremises
After considering the business rates I found a property that is available on a new lease. Being able to rent the property instead of buying will significantly reduce immediate costs. . A warehouse will be purchased, depending on ow many designers choose to join the brand. Ground floor sales 50.54 sq m Basement Sales 74.04 sq m Basement Vault 3.62 sq m
Rent - ÂŁ10,000 per month
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StoreUtilities Electricity Gas Trash Pick-up Water Sewage Utility costs are included in the cost of rent for the retail space so there will be additional costs. Cleaners £150-£170 + VAT
TOTAL = £180 - £204 per month 30
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StoreArchitect Rates RATES (Providing by The Building Doctors) £1200 + VAT per sq m of shop space for builder/lighting £600-3000 per display unit architect / interior drawings 1000-4000 Other costs (Workspace, Shop frontage, seating, landlord permission, other bits, interior)
Builder / Lighting 1200 X 100 sq m = £120,000 Display unit 3000 x 7= £21,000 Interior drawings £4000 Other additional costs £25,000
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StoreShopfit To improve the store appearance and agreement between the Landlord needs to be made to produce a shop-fit. A 3D store has been recreated to specification to illustrate how the new shop will look. For full before images, see appendix. For full after images see “Store Design Pack”. An architect has been sourced that will create the store.
TOTAL = £170,000 33
StoreMaterials
The fee for materials that will be used in the shop-fit, are covered by the cost previously shown. I have researched potential sources for the materials that I require
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StoreEquipment
EPOSNOW software £499 USB Scanner £49 Receipt Printer £129 Apple Mac £1,049 Apple iPad £679 Mac will be used as a multi-functional EPOS system that will be used for cloud solutions; omitting the necessity for an office. iPad will be used to process in-store orders with customers.
TOTAL = £2405 35
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StoreSecurity
Single pillar alarm system £765 Quality lanyard tag alarms 200 tags - £50 Security cameras £400 Store security alarm Already has one
TOTAL =£1215 37
StorePackaging Portait Bag 300 - 300 x £0.35
£105
Material: Sustainable Paper Dimensions: 300 x 250 x 120mm
Single Side Printed Swing Tags 500 - £91.19
£91.19
Material: FSC Approved environmentally friendly paper Dimensions 50mm x 100mm + 3mm dia hole
Tissue Paper 500 - £10.89
Dimensions 500 x 700mm
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£10.89
Hangers 100 standard hangers - £124.30 25 trouser hangers - £63.93
£188.23
Material: Ethically sourced bamboo
Snapshut luxury box 100 x £2.09 + 50p VAT
£209.50
Dimensions 280 x 220 x 110mm
Business Cards 100 business card 5.99
£5.99
Dimensions 85 x 55mm
Re-orders will be done as needed. The hangers will not need to be re-ordered as they will remain on the shop floor. Hangers in the stock rooms will be on cheaper hangers.
TOTAL = £610.80 39
WorkspaceEquipment
Industrial Lockstitch x 2 £1300 Industrial 3 Thread Rolled Edge £650 Industrial 3/4 Thread Overlocker £850 Industrial Coverstitch £750 Industrial Walking Foot Lockstitch £1450 Fusing press £600 Vacuum pressing table £650
TOTAL =£6,250 40
3D printing £2,199/ £80 per month for 3 years By paying for costly equipment monthly over their lifetime, allows businesses to keep more working capital for other expenses.
Apple imac x 2 £2,076 / £99.65 per month (With insurance) Printer £149
TOTAL = £149 + £179.65 per month 41
Store Costs Overview
One-off Payments
Monthly Payments
Annual Payment
Shopfit + Interiors £170,000
Rent £10,000
Business Rates £77,000
POS Equipment £2405
Utilities £192
Total £77,000
Security £1215 Workspace Equipment £6399 Packaging £610.80
Total (Exc rent & business rates)
£180629.80 42
Workspace £179.65
Total £10371.65
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Services Costs Services Costs
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Website Development
Purchasing and Registering a domain name: Registration is required when planning to develop a website that customers can browse and make purchases on. We will purchase both .co.uk and .com domains to ensure that customers go to the right website.
Shopping cart integration £140 - £7000 Testing and training £400 - £3400 Design £1700 A well designed website allows us to create the online community and include Live chat. This will save us money in the long run by thorougly designing and testing the website functionality.
Cost for required website complexity £6000 Registering domain name & hosting £11.99
TOTAL =£6011.99 (Avg.) for complexity 47
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Social Media Business Accounts
Creating social media pages and business account management are all free
Running a basic ad with click-through to website content we will set a budget to £1 per day which will be seen (according to Facebook for business) by 420-1000 people per day.
TOTAL =£45 per month (Avg.) £30-£60 49
In-store services
The staff will have relevant styling experience. Although legally, national minimum wage is acceptable; I will pay ÂŁ8 per hour + 3% commission for purchases made via appointments. Commission will be more competitive than most luxury brands. No more than 2 people will be working at a time throughout the day. The store owner and 1 member of staff. Store hours will be 10am-7pm Monday - Sunday Daily pay - 1 x 9 x 8 = ÂŁ144 50
Luxury tailor experience:
with
Pay for this service will be completely depending on demand. Otherwise paid for individual jobs.
Distribution
If same-day delivery is chosen, Shutl will deliver the product; providing the customer is within delivery distance. This will be both an in-store and online delivery system.
Ups will be chosen as the distributor for the company. With their specialised internation shipping capabilities makes it easier to deliver good direct to consumer from our warehouse.
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Monthly Payments Social Media £45 (avg.)
One-off Payments Website Total = £6011.90
Staff £6070
Commission £500
Total £6660
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Press / Launch Cost Press / Launch Cost
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Press Day/ Launch
Services
Marketing
Venue *
Artists Performances
Snapchat Geo-tag
Flowers
£200
£140
£400
Social media* ads
Bar Service
Flyers
Music/DJ
£570
Models TFP
£0
£14.99
Food
£345.48
Drinks £272.73
Campaign images
Gifts
Temp Staff
Total £6289.73
£96
Security £74
£30
£245.99
£5642
Photographer £96
Staff
Total £496.98
£378
Total £1718
Grand Total £8501
(£5000 from our discount vouchers that may not be used)
* - Both the Venue and social media ads will be free, no additional cost as they are already paid on a monthly.
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Press Marketing
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Size of the geo-tag 20,500 Sq ft Length of time 1 month cost £140
TOTAL = £140 59
promo 1
1000 flyers 14.99 60
TOTAL = £14.99
Flyerers
There will be a total number of 1000 flyers handed out in different locations at different times. They will also be fixed to relevant notice boards and focal points in the public. This flyer will also be featured around the GFW event Temporary staff will be paid to do this at a rate of £12 per hour.
12 x 9hours x 2people = £216
TOTAL = £245.99 61
promo 2
C:ORE Store 38 Floral St, London, WC2E 9TB www.corestore.com
1000 flyers £14.99 62
TOTAL = £14.99
Invitations
Invitation 50 Invites £40
TOTAL = £40 63
Post-launch campaign
The editorial content released when announcing the winners of the competition will be advertised for free. Via our social media accounts, our online website and the GFW website. The images will be shot in - store up- and- coming photographers so it will be a free TFP exchange. TOTAL = ÂŁ0 64
Space
The event will be held at the store, this means that the venue will not cost anything to do. TOTAL = ÂŁ0 65
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Press Day Venue Press Day Venue
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TOTAL =£30 68
Castillo de Salobrena blanco - 1 litre 15 x £2.99 = £44.85
Triolet Brut - 1 litre Case of 12 = £227.88
TOTAL =£272.73 69
Smoked salmon on rye with cream cheese and cucumber 20 x 1.65 = £33 Rolled goats cheese, fennel, mint, cucumber and olive 30 x 1.75 = £52.50 Duck pancakes with hoi sin sauce, cucumber and mango 20 x 1.45 = £29 Freshly baked scones with whipped raspberry cream 30 x 1.35 = £40.50 Mini blueberry and almond frangipan tarts with candied lemon 30 x 1.35 £40.50
Canapebox.co.uk 70
TOTAL =£195.50
24 Piece Luxury canape selection at M&S Mini bread bites topped with brie smoked bacon and grape, Wensleydale cheese and carrot chutney, smoked Lochmuir™ salmon, cream. 240 canapes needed for the party £14.99 x 10 = £149.90
TOTAL =£149.98 71
50 White t-shirts 50 Black t-shirts XL - 15 L - 25 M - 25 S - 20 XS - 15 118 + 139 = £257
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100 Portrait Bag 100 LookBooks 100 x 0.35=£35
Material: Sustainable Paper Dimensions: 300 x 250 x 120mm
100 x 3.50=£350
Free £50 Gift Card
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50 x 100=£5000 (providing they’re all used) Will be printed in-house
c:ore
Free
Will be donated by Royal Opera House
Will be scheduled via appointments.
c:ore
TOTAL = £5642 73
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Press Day Services Press Day Services
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Staff
Over the 2 event temporary staff will be required to assist in handing out food, engaging with guests and potentially processing orders. For events, pays will be raised by £1 per hour. £9 per hour x 3 staff x 14 hours = £378
TOTAL = £378 77
4 performances £200
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TOTAL = £200
2 days of DJ-Duo / Hosting £400
TOTAL = £400 79
Mobile Bar (Free of charge w/ no min spend) Dimensions 3m x 2.5m 50 / 50 voucher bar. We will pay for a reserved number of drinks by supplying vouchers to guests. They pay thereafter. We will earn % of the paid drinks to recover some of the costs. Average drink prices £5.70 5.70 x 1 free drinks per person x 100 guests = £570
TOTAL =£570 80
Models chosen for the presentations will be sourced via model mayhem. Instead of payment we will offer the models the opportunity to model for products shots on the website & social media. Those who are not chosen will still get to keep their images
TOTAL =ÂŁ0 81
1 Guard £9.25 per hour 9.25 x 8 = £74
TOTAL =£74 82
£12 p/h x 8 £96
As discussed in the ‘integrated marketing strategy pack’ the photographer is an in-house photographer that handles our product shots for the website.
TOTAL =£96 83
Revenue Streams Revenue Streams
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Designers Prices
Promotion Designers that want their products in-store £195 per month Desginers that want their products online £50 per month Designers that want their products both instore and online 215 per month
Product shots for store related advertising & website Free Equipment and facilities Free
Services
Equipment
Range release / Launch Party £150 for the venue until the morning
3D printing Cost covered by designers
Showcasing artwork or sculpture £150 per month per item
Obigations
In-store installation or exhibition £100 per week Photography/Film shoots £50 per slot Designers keep 70% of retail sale
*Ranges and collections produced must be able to be sold by our company as well as any others. *Designers must attend events in-store events that require their participation *Must agree to terms and conditions of pricing unless another pricing structure is agreed upon. 85
Outside Prices
Services Photography/Film £80 per slot Exhibitions £150 per week
Avg. 450 (for a few days)
Events £ 250 Showcases for the store £250 per month
Memberships
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£30 for joining £5 per month therefafter
Designers Packages (In-store or Online or both) Revenue overview
3D Printing hire
Venue Hire
To generate income, we have many revenue streams. This will help to cover costs incurred by the equipment and facilities.
Revenue
Showcasing artwork
Installations / Exhibitions
Hire for photoshoots
In-store Sales
Online Sales 87
Cash Flow
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