Sport Merchandise And The Tailoring Service example essay topic

CUZCO ENTERPRISES CORP CUZCO CASUAL WEAR # 2 2357 w Diversy Ave Chicago IL 60639 (773) 255-1393 Fax (773) 448-6779 web Executive Summary By focusing on its heritage and the strength and experience CUZCO CASUAL WEAR # 2 will continue to enhance their quality, uniqueness, and valuable customer service. o This business plan leads the way. It renews our vision and strategic focus on the quality and value we put in our products and the market segment originally targeted. Our vision has been broadened by the success we have found in the marketplace, to the extent of adding new products and current plans on additional items and services. It has given us a step-by-step plan to meet and exceed our goals for increased sales, gross margin, and profitability. o This plan includes this summary, and chapters on the company, products and services, market focus, action plans and forecasts, management team, and financial plan.

Objectives 1. Increase sales to more than $100,000 over the next three years. 2. Move gross margin to above 55% over the current merchandise line and maintain that level. 3. Add new products such tailoring service, a leather jacket section, and sport wear section.

4. Improve inventory turnover, reduce the cost of goods sold while maintaining the high quality of our products 5. To provide jobs to the Hispanic community that are rewarding and fulfilling. Business Description Mission: I am Fausto Cuzco Entrepreneur owner of Cuzco Enterprises Corp. We are here to provide you with high quality merchandise products, fast service and the most important goal in our enterprising is your's atis faction " Industry back ground Cuzco Enterprises Corp was created in February 2002 by a 29 year old novice young man named Fausto Cuzco. Under this parent name, he opened his first store in a small mall in south side Chicago, CUZCO CASUAL WEAR #1. Currently my friend Patricia and I own this store.

Sales have been growing steadily with the cost of goods sold consistently decreasing. But to make significant headway in this area, we need to expand our business into new territories. Goals and potential of the new venture Constantly striving to supply what the consumer is asking for, we continually review what is available in the marketplace, and what isn't. Improving on what is available and providing new products and services to the areas of need will assure our success in a market driven by consumer demand. By introducing new merchandise and services in our second location, we are expecting to increase our revenue. Uniqueness of product or service In our new 30 ft long times 10 ft wide location, we will divide our store into 4 sections, sporting, leather, general merchandise and tailoring.

We will be offering tailoring service not only to people that made a purchase but to anybody that requires that service. We have a person that will be there in an 8-hour shift. Also we will have a leather jacket section with a volume of 100 units in 25 different styles. The prices will range from $50 to $400. We will also have a soccer sporting section with a approximate total volume 280 items such as t-shift, pants, jackets, hats, soccer shoes, balls, genuine USA mayor league uniforms as well Latin American teams' uniforms. The rest of the store will carry general men's and women's clothing.

I estimate that the total volume in this location would be around 300 items. Marketing Target market: My target market will be the Hispanic community living in that area. While there are many retail stores near the proximity of my future enterprise, I have approached the market as a Specialty Retailer: a provider of authentic high quality leather, sport clothing, and tailoring service. By selling sporting retail in that community, I am targeting young Hispanic men and women that are soccer fun's and like to wear merchandise that represent their favorite team. In my survey that I did a month ago, I found that 47% of the people were not familiar or didn't know where a sporting store was located. When I asked them how serious they were to purchase a sporting merchandise, I found that a great number of people were potential customers.

In my current store, I have many people that asked me for more selection of leather jackets. In the new location, I will be targeting those customers that are looking for a greater selection and quality of leather jackets. My prices will meet the budget demand of my prospective customers because I will carry different brands and prices. Market size and trends With the changing face of America, it's more important than ever to accurately pinpoint your audience. Hispanics comprise the largest growing market in the country, increasing 53% in the last 10 years-5 times the rate of non-Hispanics. By the year 2005, Hispanics will constitute 13% of the population with over 36 million, making them the largest minority group in the U.S. There are more than 7.6 million Hispanic households in the United States, averaging 3.6 people per household.

The average Hispanic household spends $30,013 annually. More than 58% of Hispanic over 18 is employed full time. Hispanics are a young population. The median age of U.S. Hispanics is 26.5 compared to a median of 32.2% of non-Hispanics.

Hispanics spend on average $250 more per year on retail. In my new future location, I estimate that 50% of the population is of Latino background. Competition There are 6 retail stores within a 1-mile radius. The closest store is around 60 feet away from my new location. Another larger store of about 20 square ft is located at the 4348 W Diversy. This store does have a larger selection leather jackets but does not have sport merchandise or tailoring service.

The third store that is at the 2730 N Koster does offer tailoring service but not sport merchandise. The other stores are within two and four blocks away from my store. None of those stores provide a large selection of leather jackets, sport merchandise and the tailoring service. Estimated market share Chicago pegged its Hispanic population at 1.4 million in 2000, a 68% increase over that of just a decade earlier. In 1990 the Hispanic share of population in Chicago were at 11.4%. Compared to 17.1% in 2000.

It's prognosticated that by the 2006 the Hispanic share of population would be around 19.7%. With this data, I can see that a great potential exist in the Chicago Hispanic market. I estimate that I will have a 30% market share in my new location. Market strategy sales- and distribution We are focusing on the consumer first through merchandise exposure, such as displaying the merchandise in a reachable shelve. We currently forecast our sales to grow at the rate of 514% for the next 12 months. After the 12 months period, the growth will continue, but at a lower rate of 45% for the next year, and by 45% the following year.

We anticipate the growth rate to flatten out to a consistent 12% within five years, but to remain steady. Should the market on Hispanic retail continue at its current pace, we will keep pace with it. Our forecast does assume a downturn in the merchandise within a three-year period, and the lower figures of 12% are a reflection of that forecast. We would be happy if it didn't falter. Sales Forecast Sales 2003 2004 2005 2006 2007 Sales $45,000 $52,000 $60,000 $60,530 $59,000 Other $0 $0 $0 Distribution Strategy To this means we have been continually reworking in our fast customer service. For this we expect to hire an additional person that will take care the inventory and also this person will be in charge of going to the different wholesalers and buying the merchandise.

Prospective Wholesalers: Changes Wholesalers Store 3527 N Pulaski Ave Haya Wholesalers 3256 South Ashland Unlimited Clothing 467 N Port road (Michigan) Quiz phe Ware Wholesalers 3523 N Western We are currently interviewing more distributors to assist us with the marketing and distribution of our merchandise. Again, in developing a trustworthy relationship with a distributor, it can help us to in or efforts to increase our sales projections Pricing Strategy We would be able to price our merchandise competitively. At a retail range of $5.79 to $10.05 per T- shirt, $30 to $74 per sport t-shirts, $20.23 to $45 per men's sweaters, $24 to $38.99 per men's pants, $25 to $38.95 per women's blouses, $5 to $12 per men's sucks, $32 to $100 per men's shoes, $50 to $300 per leather jackets, $15 to $25 per men's shirts, $5 to $20 per tailoring service. We are not expecting to potion ourselves as a low price store in the neighborhood. We will keep our prices flexible to meet the demands of our customers.

Advertising and promotion Advertising will be through the local newspaper, fly ers will be sent out to all households with in a mile 1 1/2 radius. Ongoing advertising will be shared with the, Hispanic Market Weekly, which consists of Yellow Pages advertising, newspaper advertisements, television and radio advertising and direct mailings to preferred customers. Advertising will be based on 4.0% of total sales for the first year of business then cut back to 3.0% of total sales for the second and ongoing years of operation. Also we have created a website web in this website we have built a special section describing CUZCO CASUAL WARE #2 and directions how to get there.

We have contracted 'Thayer Interactive Group' to promote our website. Location CUZCO CASUAL WEAR # 2 plans to open for business during January 2003. The store will be open Monday thru Friday, from 10: 00 am till 8: 00 pm and Saturday, from 10: 00 am till 6: 00 pm. It will be located at 2357 W Diversy Ave Chicago IL 60639. One advantage for being in this location is that the store will be 5 minutes away from the Kennedy express way, and 20 minutes from the my wholesaler. Also the store rent and the taxes are low in this location.

Management President and owner of CUZCO ENTERPRESIS CORP, Fausto Cuzco, will manage all aspects of the business long-term strategies. His background includes an education from Northeastern Illinois University with a major in Marketing and a minor in business management, ten years experience as a assistant manager at the Signature room 96th. He is familiar with several aspects of's business such as managing a retail store, inventory, accounting, cash flows and taxing laws. As a CIO of CUZCO CASUAL WARE #1 store, he has acquired the following relevant experience: Business and personnel management. o Marketing and promotional experience. o wide base of distributor contacts. o Shipping and receiving. Vice President Patricia Oral a: Patricia has more than 8 years in retail managing experience. She has worked for Bloomin dales, Sears, and Quizpes's Clothing Store.

She would have a position of general manager at CUZCO ENTERPRISES # 2. She will be responsible for managing the new place. Elvia Cuzco, my sister, will assist her in record keeping, price changes, accounting and selling. At the current time, we plan to have 2 salespersons; we plan on hiring additional personnel as the need for them arises, and as we have the ability to pay them. Financial Financial forecast we have forecast ed a very rapid growth for our second store. Although this may seem ambitious based on historic sales, this rate of growth assumption is due to the larger feedback we have received from our customers and marketing associates.

Important Assumptions: The financial plan depends on important assumptions, most of which are shown in the following sentences. The key underlying assumptions are: o we assume a slow-growth economy, without major recession. o We assume, of course, that there are no unforeseen changes in the consumer market to make the merchandise obsolete. o we assume access to equity capital and financing sufficient to maintain our financial plan. General Assumptions 2003 2004 2005 2006 2007 Short-term Interest Rate % 3.00% 3.00% 3.00% 3.00% 3.00% Payment Days Estimator 30 30 30 30 30 Collection Days Estimator 30 30 30 30 30 Inventory Turnover Estimator 5.00 5.00 5.00 5.1 5.1 Expenses in Cash % 10.00% 10.00% 10.00% 10% 10% Sales on Credit % 15.00% 15.00% 15.00% 15% 15%Personnel Burden % 10.00% 10.00% 10.00% 10% 10% Key Financial Indicators We must maintain gross margins of at least 55% and hold marketing costs at no more than 20% of sales to provide the income to reduce our debt, and equip us to sustain the growth we anticipate. We will meet and exceed all of these conditions through increased volumes.

Then we " ll pass the savings on to our customers through increases in the margins at which they retail the merchandise. Break even Analysis This break-even analysis shows that CUZCO CASUAL WARE #2 has a good balance of fixed costs and sufficient merchandise to remain healthy. Our break-even point would be close to 1,426 units a month, in 2003 while our sales forecast for the next year, 2004 calls for almost 2,852 units a month, on average. This means that our sell per unit will increase in the second year.

Break Even Analysis: Monthly Units Break-even 1,426 Monthly Sales Break-even $2,852 We expect to close out the first year with over $55,000 in sales, and to increase our sales to more than $10,000 per year by the end of this decade, with net earnings averaging in excess of 10%. Operating expenses per month: Advertising / Promotion $300 $300 $500 Travel $100 $200 $300 Miscellaneous $200 $300 $350 Other $80 $100 $150 Payroll Expense $1000 $1500 $2200 Depreciation $50 $70 $90 Leased Equipment $100 $100 $200 Utilities $100 $120 $300 Insurance $80 $80 $80 Rent $1900 $1900$1900 Other $50 $50 $50 Other $0 $0 $0 Net Profit / Sales 20.22% 22.97% 19.20% Projected Cash Flow We expect to manage cash flow over the next three years with the assistance of a Small Business Administration supported loan of $30,000. This financing assistance is required to provide the working capital to meet the current needs while providing a solid foundation to build the growth of the organization. After a six-month period, we anticipate requesting an open line of credit of between $20,000 and $30,000 to further the company's ability to meet and exceed sales projections, gross margin, and return on investment. Capital Assets 2002.

Total working capital available $25,000 Liabilities 2002: $13,000 in open line of credit Accounts Payable $7,462 Short-term Notes $500 Other Short-term Liabilities $0 Long-term Liabilities $7,100 Total Liabilities $25,000 Approximated net value on owner assets $45,000 Critical risks: The potential risk that can arise in the near future is the entrance of new retailers into the market area. Also the competition that exist within the 1 mile of my prospective store; those stores can offer the services that we are planning to offer. Furthermore, some of the obstacles that we might face could be the lack of further working capital. We will need that capital in order to meet the unforeseen events. My contingency plan would consist in forming joint ventures with family members and potential investors. We would also work closely with financial institutions in order to get more financing.

Harvest Strategy In case that the current president Fausto Cuzco no longer could lead CUZCO ENTERPRISES CORP, Patricia would be taking his position. The continuity of the enterprising is one the priority goals of the founder. Close relatives, sister Elvia Cuzco, cousins Gerardo Quiz pe, Manuel Cuzco, Luis Cuzco, and father Miguel cuzco are beginning to be incorporating into the business. They share the vision and ethics of the founder and their contribution to the enterprise would be of great value. MilestoneCUZO CASUAL WEAR will be incorporated in December 24, 2002. The completion of the store design and development would be completed by January 3, 2003.

Hiring and training of the two employees would begin in November 15, 2002 through January 15, 2003. The store will be open for business in January 20, 2003.