business proposal Shannon Griffiths Final Major Project
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contents page
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EXECUTIVE SUMMARY CONCEPT C O M P A N Y VA L U E S KEY DRIVERS CONSUMERS O P E R AT I O N S MARKETING FINANCE FUTURE GROWTH CONTINGENCY PLAN CONCLUSION
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executive summary
BY is a wholesale buying mobile application, that has been created and adapted specially for use within the fast fashion market; after communication with industry professionals expressed the need to make the buying process more relaxed, easier and organised.
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The first within this market, one of the companies competitive advantages, BY will provide a solution for these expressed current wants and needs; with the help of innovative technology and transferring the current buying process into a handy digital format. As a B2B company, BY’s consumers consist of fast fashion companies and independent buyers. Specific and focused advertising will be used to reach this consumer and generate a steady income of sales in order to make the company profitable. A review of operations will show how the company will operate, and the staff needed in order to create the app and help the business run. Key members of staff will be mentioned as well as a proposed staffing structure for future growth. A full 12 month financial and marketing plan will express how BY proposes to increase its sales and generate profit, including a breakdown of costs and budget needed in order to make the company feasible. As mobile technology, is constantly developing and growing, this leaves a large room available for future growth within the company and the application itself. This means the app will be able to constantly develop in sync with new software and emerging technologies, keeping BY’s high competitive advantage and making it the most innovative and inclusive app within the fast fashion market.
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concept ‘BY’- the wholesale buying app that helps bridge the communication between buyers and suppliers. Inspired by similar apps available within the luxury and high end markets, and with the help of industry experts, BY has been created and adapted specifically for use within the fast fashion market. The application is built with fast fashion buyers in mind, who are looking for an easier, organised and innovative buying experience.
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BY’s innovational software, such as using the app in conjunction with events, indoor GPS location and recognition technology, has allowed the app to become not only the first fast fashion specific buying app, but the only one on the market offering such technology. Despite many buyers adopting their own methods, a large proportion aren’t efficient enough as digital (smartphones and computers) and analogic (notes on paper) tools are combined, which is hard to be coordinated. From this, the BY app has been created in order to help ease problems and stresses, and provide a solution for these, in an innovative way thats moving with the times as technology advances.
“Anything that would help with being more organised is key and welcomed”- Laura Rock, George fashion buyer ASDA
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values Through extensive primary, secondary and market research, BY has created the following three values. These values express the applications aims and objectives.
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1 2 3
To allow the user to do more with less to embrace and utilise change as technology advances To make buyers lives easier and more organised
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Key drivers
The growth of the fast fashion industry
Mobile use
Originally developed to appeal to the rapidly changing
Today the “UK is now a smartphone society” (Ofcom, 2015).
consumer wants and needs, The fast fashion industry has
With PC’s and laptops previously the go to devices for
seen a 21% growth since 2015 (Netimperative, 2017).
getting online, the smartphone has taken the lead with the predicted number of mobile users worldwide reaching 4.77
The current fast fashion leaders, ASOS, Very and New Look,
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billion in 2017, and 50% of mobile users using smartphones
currently account for 47% of market share (Netimperative,
(Statista, 2015).
2017) but consumers increasing need for ‘instant’ has
Today, 4 out of 5 adults now own a smartphone (Hope,
pushed production cycles and lead times to become even
2016), and the number of smartphone users worldwide is
faster, and younger online based brands (such as Boohoo,
predicted to grow by 1 billion within a 5 year time span;
Missguided and PrettyLittleThing) have become strong
making the number of smartphone users worldwide 2.7
competitors within the market.
billion (Statista, 2015).
Factors fuelling the growth of the fast fashion industry
Currently, consumers are spending two hours online on
consist of speed, celebrity endorsement and social media
their smartphones everyday; double PC’s and laptops
sales. Low entry barriers are also fuelling this growth as
(Ofcom, 2015), for tasks such as shopping, banking, and
fast fashion retailers are increasingly able to enter the
social media.
market in a short amount of time due to monopolising on a pre-established consumer base through celebrity
Along with online browsing, mobile app revenue (generated
endorsements.
from Apple’s app store and the Googleplay store) has returned to strong growth after a slowdown in 2015, and
Thanks to technology, these younger are highly proficient
Mintel Estimates placed the UK app market at £935million in
in reacting to consumers growing demand for ‘instant’
2016, which represents a 17% growth from the year before
and ‘newness’, constantly refreshing their products to
(Moss, 2017). In 2017 app revenue growth was predicted to
drive customer frequency; subsequently driving sales and
be even larger at 1.24 billion, which reflects a 30% growth
success. It has now become easy for brands to copy and
on the previous year (Moss 2017). Due to hardware and
gain inspiration from fashion shows, celebrities and online
software innovation, apps are increasingly able to link the
influencers. This has allowed these brands to produce and
physical environment with virtual behaviour- generating
bring products from design to sale in less then two weeks.
new ways consumers can engage with mobile apps.
Because of this, PrettyLittleThing is now currently the fastest growing brand on the web, seeing a 663% increase in web visits, year-on-year (Netimperative, 2017), and both Boohoo and Missguided increased sales by 51% and 75% in 2017 (Hanbury, 2017).
Smartphone productivity within the workplace Mobile technology is no longer just for personal use. Today it has become one of the most efficient go-to choices for businesses due to its convenience and rapid results. The digital generation are shaping the way smartphones are incorporated into working practises, because of this many companies have started to introduce BYOD (bring your own devices) culture into the workplace.
11 Thanks to BYOD culture, employees are now able to complete tasks without being limited to sitting at their desk.. A study by Cisco Internet Business Solutions Group claimed that “the average BYOD user across countries saves 37 minutes per week thanks to using their own device” (Dalton, 2017). Along side BYOD culture, Business Insider BT revealed that Amazon, eBay and Tesco have recently invested in mobile technology “in order to help boost productivity and increase revenue” (McWeeney, 2017). Resulting from this, various apps and services have emerged to help address employee and company needs. Consequently, mobile technology has increased and statistics show that it significantly improves productivity within the workplace, estimated at a 34% productivity increase (Alton, 2017). A number of factors are to play, but part of the productivity boost has come from the use of productivity apps. “Today, 51% of employees use apps that are mandated by their employer, which is up from just 27% six years ago today” (Alton, 2017)
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consume
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ers
Core consumer BY’s core, and most profitable, consumer consists of fast fashion brands.These brands all share and express similar buying habits and characteristics, such as frequent buying strategies, they are heavily social media based and most of their customer service and marketing is done through the use of social platforms. They share a target consumer, which consists of a wide variety but mainly a female millennial, Gen X and Gen Z demographic.
Have strong knowledge on who their consumer is and know how to target them. They are aware of who and what influences them.
Strong social media presence.Frequent posting throughout the day. Utilise their presence to research what trends and influencers their consumers are following, and use this to their advantage to create products and collections that appeal to them.
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Chatty, informal tone to the company (social media posts and CRM) to appeal to their consumers and create a friendly, personal experience.
Customer service is through social media (Twitter direct messaging ETC). Use your username when they speak to you to create a personal connection. This also shows they know their consumers are digital natives and constantly active online.
Celebrity collections and endorsements. This allows them to monopolise on a preestablished consumer base, and attract more possible consumers who previously might have not shopped with them. Celebrity collections will also gain coverage (magazines, online etc) which helps promote their brand to new markets.
Frequent competitions and giveaways. Prizes mainly consist of money to spend online, free clothes for a year or holidays. To enter the competitions, consumers are urged to ‘like’, ‘comment’, ‘share’ and ‘tag’ friends on their status. This helps spread their brand awareness.
All aim to be the first retailers to release specific trend items.
BY’s core, and most profitable, consumer consists of fast fashion brands.These brands all share and express similar buying habits and characteristics, such as frequent buying strategies, they are heavily social media based and most of their customer service and marketing is done through the use of social platforms. They share a target consumer, which consists of a wide variety but mainly a female millennial, Gen X and Gen Z demographic. The table below breaks down three specific tribes within this consumer group, and briefly explains their habits and behaviours. BY’s main aim is to target the ‘Big Boys’ as they are currently taking over the fast fashion market. Targeting this tribe will ultimately indirectly target the ‘Up and Comings’ as they like to follow in the ‘Big Boys footsteps and take inspiration from them. Seeing that they are using BY may encourage them to look into the application and ultimately purchase a subscription themselves. In the future BY will also aim to grab the attention of the ‘Traditionalist’s’ as they are the main brands that dominate internationally.
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The ‘Traditionalist’s
The ‘Big Boys’
The ‘Up and Comings’
The ‘traditionalists’ consist of the top well-
The ‘Big Boys’ are a collection of younger
The ‘Up and Comings’ are a group of
known brands that dominate not only in the
online based brands who are currently taking
newer, online based brands that are heavily
UK, but internationally. These brands are
the UK fast fashion market by storm thanks to
influenced by the ‘Big Boys’ and try to follow
some of the top UK fast fashion high street
their lower price points, fast lead times and
in their footsteps. They share the same target
retailers. They are having to adapt their
their ability to introduce new trends to store
market and tend to collaborate with influencers
marketing strategies and online presence
rapidly. These brands partake in a more
associated with the ‘Big Boys’; allowing them
in order to keep the attention of todays
frequent buying strategy and have a very
to monopolise on a pre-established consumer
‘distracted’ consumer and their ever evolving
strong social media presence.
base
wants and needs. ZARA
BooHoo
NA-KD
H&M
Missguided
Rebellious Fashion
New Look
Pretty Little Thing
LaSula Boutique
Topshop
ASOS
ISAWITFIRST
Primark
MissPap
Missy Empire
River Island
Nasty Gal
extended consumer M i lt o n R o k e a c h ’ s R o k e a c h Va l u e S u r v e y T h e o r y -Terminal Values: An exciting life, sense of accomplishment, true friendship, pleasure, freedom and equality. The terminal values of this consumer express what goals they would like, and aim, to achieve within their lifetime. These values also relate to their buying job, as they express aims that can be achieved within their role. Ultimately, the consumer goal is to achieve freedom over their own buying range, resulting in a sense of accomplishment, inside and outside of work. Along side these values, they want to upkeep a exciting life whilst gaining true friendships.
-Instrumental Values: Ambitious, capable, imaginative, intellectual and logical.
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The instrumental values express the consumers preferable modes of behaviour, whilst also mirroring the skills needed for their job role. This consumer is ambitious and imaginative, but approaches things in an intelligent and logical way.
Maslow’s Hierarchy of Needs Consumers have achieved their basic needs including physiological and safety, and are currently working on their psychological needs. They have reached a sense of belonging, such as friendships, intimacy, family and sense of connection, and are currently working on their esteem needs. Throughout their lives they have participated in/completed activities in order to feel a sense of accomplishment, and they are now seeking to achieve this sense of accomplishment within their job roles. Wether that be helping bring a product into store or being in charge of their own range.
This new generation of buyers consists of graduated millennials who have recently entered the buying job market and are working their way up through job roles. Being digital natives, and attending university, they are already very knowledgable on technology and efficient in computer softwares, such as Adobe and Microsoft. They have a strong following base on image-based social media accounts, such as Instagram, and regularly post images of their outfits and recent purchases. This provides them with insight into consumers wants/needs, and what/ who is ‘on trend’ at that current moment. This is a generation who have become increasingly connected digitally, via mobile. 80% of millennials have a mobile phone (Medium Corporation, 2017), with 3 in 4 going online with their mobile device as often as they do with a computer (Deloitte, 2017). Peer reviewing and researching is a popular behavioural trait within this consumer, and when making purchasing decisions, millennials are two times more likely to seek out reviews on products before purchasing and 50% are more likely to undertake price comparisons in stores before purchasing (Medium Corporation, 2017). Due to the current period of uncertainty, stability is appealing to millennials, making them more loyal to employers than in 2016, and research shows that the workplace is where they feel the most influential.
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extended consumer Geographics
- UK, urban based instead of rural - Mainly based in large cities where head offices are located (ie- Manchester and London). - Smaller towns which is cheaper to hold a head office, and office parks just outside the city centre
- 20-39
Demographics
- University education level - Admin assistant, assistant, junior buyers and buyers - Working their way up the job roles - Making a salary of ÂŁ18,000-ÂŁ50,000 (average depending on job role level) - Mixed gender - Single or young couple - First home or flat - Disposable income(small amount) but have savings - Paying of student loans.
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Psychographics
-University graduates -Fast paced -Active lifestyle -Care about the economy -Express their opinions on political matters (brexit, voting and NHS) -Smart shoppers (research generation) -Constant buying to keep up with emerging trends
Behavioural
-Work hard-play hard motive -Mixed loyalties towards companies (tend to use the company offering incentives etc) -Tend to purchase frequently from high street retailers but will save up for designers pieces such as footwear or handbags; or experiences such as holidays and weekends away.
Acorn Classification
-E2: Educated Urbanites, categories E15, 16, 17, and 19 -G3: Starting out, young couples, flats and terraces, category 24
T h e F a m i ly C y c l e : -The bachelor stage -In-between stage of young couples living together but not married -Newley married couple with no children -Full Nest 1; child under the age of 6.
E . M R o g e r s D i f f u s i o n o f I n n o vat i o n T h e o r y ( T h e A d o p t i o n P r o c e s s ) In relation to Rogers adoption process, the extended consumer are early adopters, as they have access to the newest trends and product knowledge, mainly due to the nature of their job. Not only do they have access through social media, but through industry software and networking. As buyers, they are the ones sending trends into stores for the later end of early adopters and early/late majority. Moreover, fast fashion companies aim to be innovators or early adopters and get the latest trends into stores/online the fastest.
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competit
ition
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market sector analysis The fast fashion market is compiled of a mixture of online-only, high street and online making the shift to bricks and mortar retailers, with the top three fast fashion retailers having an overall 46.93% of the market share. The fast fashion/ high street industry was once dominated by brick and mortar retailers such as ZARA, Topshop, H&M and River Island, but recently younger online fashion retailers have taken the lead with ASOS, New Look and Very having the largest market share.
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Since 2015 the fast fashion industry has seen a 21% growth (Netimperative, 2017), with the factors fuelling this growth consisting of sustainability and ethics, sales through social media, celebrity endorsement and speed and agility. A large proportion of fast fashion retailers are online pureplays, with online fashion sales accounting for 24% of the total fashion spend in 2017 (Mintel, 2017), and currently online only clothing retailers account for 38% of the UK online fashion market (Mintel, 2017). Mobile and social media has enabled brands to target a larger/global audience and generate a strong social following, with mobile offering opportunities to fast fashion retailers“providing a thread that brings together influencers and purchasing behaviour in one place” (Passport, 2016). Apps on smartphones presents brands with direct access to consumers at all times. Through the use of social media and push notifications, brands can highlight weekly launches, provide initiatives to shop online or in-store and update consumers on promotions. Consumers need for instant gratification has forced lead times and production cycles to become even faster, which is something buyers are having to combat and keep up with. For example, online retailer Boohoo now have a one week supply chain lead time (Gillard, 2017). According to recent studies,
this short lead time approach enables fast fashion retailers to have up to 28% higher profits than traditional retailers (cit. com, 2018).
“2017 has become the y e a r f o r o n l i n e fa s h i o n r e ta i l e r s t o c a p t i vat e t h e millennial market through c h e a p fa s h i o n , o n l i n e s o c i a l influence and consumer c o n v e n i e n c e , r e s u lt i n g i n phenomenal growth and f i n a n c i a l r e wa r d s ” ( G a r n e r , 2017).
Defining fast fashion:
1 quick responce in supply chain 2 flat initial buys, breadth over depth 3 consumer responce dictates repeat buys 4 mainly volume based business 5 designs replicate catwalk trends
(Passport, 2016)
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fast fashions impact on the buying cycle
Fast fashion is challenging traditional buying approaches and the fashion cycle, forcing brands to adopt a more frequent buying strategy and shorten their lead times. Due to fast fashion consumers need for constant newness, fast fashion sourcing and buying decisions are composed of ‘the speed by which decisions have to be made and innovation introduced into the store” (Bruce and Daly, 2006), because of this traditional approaches to sourcing, buying and the momentum of the fashion cycle are being challenged. The traditional buying cycle is based on long-term forecasts, occurring one year before the season and lead times for orders placed six months prior to the proposed launch. This cycle poses a risk of inaccuracy from difficulties in predicting best sellers, it has been estimated that merchandise sold at mark-down prices as grown to over 33%, and pre-season forecast errors may be as high as 50% (Bruce and Daly, 2006). To appeal to heightening consumer demand, fast fashion companies have had to adapted and change the fashion cycle, and now partake in a frequent buying strategy, on a weekly basis. Complications derived from the adapted fashion cycle consist of shortening lead times with suppliers and resulting in higher overall costs. Despite this, frequent buying reduces excess stock and lost sales, and can result in a forecast accuracy “as high as 95%” (Bruce and Daly, 2006).
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company
competitor
f e at u r e s - Customisable digital showrooms that allows brands to showcase their products and retailers to purchase easily
Fashion Trade
Direct
- App allows you to manage on the go - Brand showrooms available prior to meetings which helps decrease meeting times.
-Presents designer portfolio seasonal collections in online
Ordre
Both
showrooms -Place and manage orders -Identify and communicate with new potential stockists
-Enables fashion buyers to insert, catalogue and store
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their orders
FABS
Both
-Take images of products -Fill in details (sizes, fabrics etc) -Overviews of all products
-Insert, catalogue and store orders -Take images of products
iMerchandise
Both
-Fill in details (sizes, fabrics etc) -Overviews of all products -Track budget and deliveries
-Custom line sheets, which can be shared and printed
JOOR
Both
-Track and forecast sales -Make orders and plan product assortment -Create merchandise displays
strengths
competitors
weaknesses
-Join for free
-Mainly focus on children’s fashion
-Website features blogposts to help set up your page, wether your a
-Only active across Europe
buyer or retailer -Helpful FAQ page
-Created by some of the industries leading fashion directors
-Ready-to-wear luxury industry featuring only designer brands
-International
-Invitation only
-Synchronises with all devices
-Only available on iOS devices
-Simple set up and operation
-Requires large amount of manual input for information on products
-Easy sign up
(fabrics, sizes etc) -No pricing information -High-end fashion brands
-Synchronises with all devices
-Requires large amount of manual input for information on products
-Offers options to pay monthly or annually
(fabrics, sizes etc)
-Cheaper price points
-No offer for buying teams (each buyer is a new payment subscription)
- Industry leader (processing 7 billion orders annually)
-Luxury brands only -Monthly and per-transaction fee which they decline to specify
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4p’s Fashion Trade
Ordre
Product: Website
Product: Website
Price: Sign up fee of â‚Ź2500 and 3% transaction fee
Price: Unknown- invitation only
Place: Europe only
Place: Global. Managers based internationally
Promo: Twitter (108 followers)
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Promo: Facebook (843 likes), Instagram (14.2k followers)
FABS
iMerchandise
Product: App
Product: App
Price: Sign up free, unknown price
Price: First month free, $49.99pm or $499.99 annually
Place: Milan based, only accessible on iOS devices
Place: Unknown
Promo: Instagram (3524 followers)
Promotion: N/A
JOOR Product: Website Price: Annual listing fee ranging from $25,000 to $150,000 Place: Unknown Promotion: N/A
By swot ANALYSIS s
-Everything is in one place, convenient app to download onto personal or work phone -Only fast fashion specific app on the market -Features innovative technology that other brands do not use; recognition technology and indoor gps navigation system -Offers services other brands currently do not offer; including taxi booking service -Created with the help from professional fast fashion buyers -Can synchronise with other devices -Offers for groups of buyers
w
-Hard market to penetrate and advertise too -Cyber/security concerns -Gaining the attention of large companies
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o t
-Expand the company and offer other services and add ons within the app -Future graduate fashion week collaboration app with emerging designers -Offer special/limited collections/collaborations that are only available through BY
-Competitors -Users may be wary of technology or internet security -Bugs within software -Lack of interest from companies -Seen as a fad that will fade out
competitive advantage The information provided from research and analysis provided key findings, and allowed BY’s original concepts to adapt and change. The main weakness presented within the wholesale buying app market was the lack off apps available specifically for the fast fashion industry. Four out of five competitors cater for the luxury market, with the fifth catering specifically for children’s wear. This presented an opportunity for BY to offer a new service within that market. Research also presented what current buying apps are failing to offer and what needs to be improved, for example- large amounts of manual input and no offers for buying teams. This allowed BY to pick up on problems previously missed, adapt to suit users needs and make buyers lives easier. From this research and analysis, BY has adapted and developed its competitive advantage.
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1 2 3
Adapted to be used with a fast fashion specific market, therefore providing a new service for within that market. Offering what other apps are lacking, content and technology wise. Created with the help of industry experts. Providing valuable information on buyers wants and needs in order to offer users exactly what they are looking for.
ogy
le
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operatio
ons
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staffing hierachy external freelancers app developer
buyers
in-house permanent marketing
finance
interns
Management Structure During the first year of operation, BY will be ran and managed by one CEO who will oversea all operations. Freelance workers will be contacted in addition for help with the
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initial start up process, including app and web developers and designers, technical help and possible marketing strategies. As the company grows and expands, after 12 months of operating staffing will be reviewed. More staff will be employed to ensure BY is constantly being maintained and developed from within house. This will lead to more in-house departments such as Social Media Marketing, PR and App and Web Development, with external freelancers only being contacted if extra help is needed. Opportunities for interns will be available within BY from the start, benefiting both the interns and BY. Interns will partake in general office and admin tasks. alongside being allocated a specific department depending on their specifications or career path.
Web Management To avoid risks of bugs and malware within the mobile app and website, it is important to carry out daily maintenance of app and site software. Ensuring a team of tech professionals are involved within the design and development process helps eliminates the risks of any technical issues arising. When established, BY will use user reviews and opinions on the design and running of the app and website. As previously mentioned, extra staff will be hired after 12 months, including a web manager and a small IT team of 2-3 people. This would allow BY to be updated and kept running smoothly from in-house.
future permanent CEO
Project Manager
Marketing Manager
Finance
Marketing Analyst
PR
Social Media
Online
IT
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Web Manager
Other
App Developer
Web Developer
Customer Service
General IT team
Interns
Interns
app journey
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1) Everything is in the one place,
3) View supplier online showrooms
4) View, save, enquire, order and
allowing users to centralise all key
featuring lines and collections.
manage orders.
information on their phone or tablet. 2) Buyers can directly input information and units/orders whist on the go and share with colleagues before confirming orders.
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5) Keep up to date with overviews of all
7) Connect to different events through
9) Order a taxi. GPS location provides a
products and orders; including tracking
the use of GPS location. Provides key
list of local taxi firms phone numbers.
orders from suppliers along with
information for the event and allows
viewing budgets, deliveries, spending,
buyers to view, find and buy specific
lead-times, lines and collections.
brands and items available at that
event. 6) Desktop webpage allows buyers to ‘log in’ and view their orders on a
8) Buyers are able to use BY’s
larger screen, manage their account
recognition technology at fashion and
and provides options to pay more to
trade shows. Allows users to quick
instantly view/buy if you cannot attend
view, save or quick order.
specific events.
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marketi
ing
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12 month timeline January Set up and implement social media accounts
March
May
On going company visits
International Garments and Fabrics Trade Fair Apple Store Press Night Airport advertising
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February
April
Start company visits
Fast fashion wholesale magazine advertisments Airport advertising June Graduate Fashion Week Fashion SVP London
Please see marketing book for indepth and further detail
Airport Advertising
July
September
November
PURE London
Marketing Week mobile banner advertising
Ongoing compsny visits
Launch Party INDX Men Forbes Advertising
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August
October
INDX Women
Clothes Show Live Liverpool
MODA
Liverpool Train Station advertisments
Marketing Week landing page takeover 20/20 advertisment
December Ongoing compsny visits
evaluating success 42
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E va l u at i n g S u c c e s s To ensure BY is performing well and in line with intended success, BY will routinely undertake a marketing evaluation to assess wether current strategies are performing in line with intended success, or if new strategies need to be devised and implemented. The evaluation will consist of monitoring the service, sign ups and marketing techniques, especially within the first 12 months of operation. BY will monitor the traffic to the BY app and website to see where the most traffic is being generated from. This will help BY see which current marketing campaigns are reaching the target consumer, which is beneficial for future marketing and campaigns. Success and CRM will further be monitored through the use of BY’s social media platforms. This will be based on the increase in followers, likes, engagement and hashtags across all platforms. BY will monitor which platforms are performing the strongest, along with what posts are receiving the most engagement with followers. This will provide BY with information on what type of posts their consumers prefer, using this to their advantage to generate similar posts; further increasing their engagement.
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finance
e
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budget
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The total amount needed to make BY feasible is ÂŁ143,280. This figure has been calculated from the costs needed to help create the BY app and BY as a company, such as office space and the costs of an app developer. This money will be in the form of a bank loan which will be repaid over the next 6 years. Repayment will cost ÂŁ1190 per month before interest. This will only start being paid back when BY starts to generate a profit, this way the company isn't getting themselves into debt by paying out more then they make. Refer to page 52 for individual cost breakdowns.
breakeven analysis
As BY is a mobile application there is no specific number of units, therefore making a cost per unit sum impossible. To combat this; a net profit and cumulative profit is presented within the cashflow forecast. This shows that May is where BY breaks even and starts to make a profit. Although breaking even in May, this doesn't profit BY’s bank account until June, as seen in the cashflow forecast. Any sales made after this time would be a profit for the company because of the fixed nature of the expenses.
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The cash flow forecast shows a breakdown of expenditure and incoming profit. It is predicted that within the first 12 months of operation a net profit of £542,012.53 will be generated. This is from the total amount of money generated from subscriptions minus any expenditure. Sales build up and peak in July, as this coincides with BY’s marketing strategy and launch. As no marketing takes place in January, it has been forecasted that there will be zero sales for that month before selling the first five subscriptions in February. At this point there is no net profit being generated as there is more outgoings then incomings. A steady build in profit is forecasted from May onwards, as this is when a sale of ten new subscriptions has been predicted. Refer to page 52 for individual cost breakdowns.
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cash flow forecast
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launch plan sales
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predicted sales and launch plan
The two tables below show a business launch plan chart and a predicted sales chart, for the first 12 months of operation. The launch plan presents important ‘milestones’ for the company, when they will start, how long they will run for and when they will end. This consits of finding and finalising the lease agreement on office space, to when the company starts it’s marketing strategy. The predicted sales charts show the forecasted sales BY aims to acheieve within the first twelve months of operation. The number of sales start of slow before growing steady,coming to a peak in July. This coincides with marketing campaigns and a build up of company awareness.
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marketing
Apple sTORE pRESS eVENT
individual event cost
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wages
bills
individual cost breakdowns pr pack These costs and figures came from extensive research on average prices for that cost. After direct contact with specialist companies, some information was unavailable to the public. These costs were then calculated from similar concepts; for example, the cost of inflight magazine advertising was generated from the costs of general magazine advertising.
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launch party
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future gro and contingenc
owth
cy plan
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future growth Moving forward from intended success, BY will continue to grow as a fashion technology, and ultimately will aim to launch internationally to spread this new digital mobile buying format overseas. As company and app awareness grows, plans to develop partner apps will be put into play including a Graduate Fashion Week app; providing a selling platform for upcoming and new designers. As mobile technology continues to advance, the BY app will continue to develop and adapt to these new technologies in order to stay ahead within the market and make sure they are providing the consumer the newest and latest technology and solutions.
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contingency plan After the first twelve months of operation, BY will review its entire business strategy, including sales and marketing. If sales are declining, or fail to steadily increase, then BY would have to assess and re-evaluate its pricing structure and marketing strategies. After assessment, if BY’s lack of sales is due to having a too high price structure, BY’s financial team will have to re-evaluate and develop a new, lower pricing structure, or look into offering new promotional deals such as one month completely free. If this happens, the financial team will have to further look into its new incomings against its fixed outgoings to see if a lower price point would be feasible and still bring a profit to the company. If lack of sales is due to failing marketing strategies then BY’s marketing team will look into which marketing strategy is failing, and develop a brand new strategy with hopes of pushing sales and raising brand awareness. If BY fails to break into the market and make any sales, then this will result in a complete reassessment and redevelopment of the app itself, its aims and its key features. The CEO and key staffing members will sit down and plan new research strategies, and analysis’ of the market and competitors, as well as reaching out to further industry professionals and freelancers in order to pin-point what is going wrong, and how this can be turned around in order to make BY successful.
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conclusion 58
After conversation with industry professionals, extensive research and spotting a gap for this concept within a new market; the BY app was created with the intensions of making buyers lives easier and providing a new and organised buying experience. Launching in July 2019, the app features innovative technology, that other apps on the market currently do not offer, and in the future will continue to adapt and develop as mobile technology itself advances. All information referred to throughout this business plan suggests that BY will continue to grow and be successful within the future.
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