BUS 314 Lecture Notes - Lecture 2: Page1

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7/29/2015 BusinessPlansHandbooksDocumentApparelManufacturer
http://go.galegroup.com/ps/retrieve.do?inPS=true&prodId=GVRL.bplans&userGroupName=sfu_z39&docId=GALE%7CCX2133100008&contentSegment=&sear…
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Page1
Businessplan,Topicoverview
ApparelManufacturer
BusinessPlansHandbook
Ed.LynnM.Pearce.Vol.17.Detroit:Gale,2010.p16.COPYRIGHT2010Gale,CengageLearning
FullText:
ApparelManufacturer
TTKOutdoorApparelCompany
789PineGrove
PortHuron,Michigan48060
GeraldRekve
TTKOutdoorApparel'smissionistoleadourmarketcategoryingreenclothing,madeinUSAClothingforourclients.We
willnotbethelowpriceproduct,howeverourmissiontoownthemediummarketwewilloperatein.
EXECUTIVESUMMARY
Whatisoldisnewagain;wewillbeopeningabusinessthatexistedprofitablyinthepastbutfailedbecausealargeUSA
retailerwentbrokeleavinguswithlargeloss.Thislossknockedusdownbutnotout.Ournewcompanyiswellfundedwitha
$200,000investmentfromanangelinvestor.Withthisfundingwewillberollingournamebandedclothinglinesfornext
season.Alreadywehave$600,000insalescommitmentsfrompastclientsandwehaveyettoattendanytradeshowclothing
shows.
Wewillbesellingthesamebrandedproductswedidinthepast,withafewsubletchangestomeetcurrenttrendstothe
market.Alsowewillbeaddingsomeproductlinesthatweseethevaluein.Theonlymajorchangewehavedecideduponwas
tohaveallourproductsmanufacturedintheUSA,morespecificallyinNewYork.
Therewillbeanownershipchange,withtheangelinvestortaking51%oftheownershipandDavidSmithowningtherest.
DavidSmithwillmanagealldaytodayactivitiesofthebusiness.Alongwiththis,therewillbetwonewpositionsaddedtothe
managingandrunningofthecompany.TherewillbeaMarketingManagerandanOnlineContentManager;thesebothwillbe
theretoboostthesalesfocusofthebusiness.
MISSION
ItwillbeourmissiontoleadourmarketcategoryinclothingmadeinUSAforourclients.Wewillnotbethelowprice
product;howeverourmissionistoownthemediummarketwewilloperatein.Wewillmeasurethisbywatchingour
competitorstoseeiftheyadoptanyofourmanufacturingtraits;thiswilltellusweareinthelead.
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7/29/2015 BusinessPlansHandbooksDocumentApparelManufacturer
http://go.galegroup.com/ps/retrieve.do?inPS=true&prodId=GVRL.bplans&userGroupName=sfu_z39&docId=GALE%7CCX2133100008&contentSegment=&sear…
2/5
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COMPANYOVERVIEW
TTKOutdoorApparelCompanyLLCisanoldcompanythatwentbankruptinthemid2000's.Howeverin2009theformer
founderofthecompanydecidedtoreopenafterhewasgivenareprievebyanangelinvestor.TheinvestorgaveSamBrown
$200,000for51%ofthecompany'strademarksportswear.Whenthecompanywasoperatingtheyearbeforeclosing,the
revenueswere$2.5milliondollars.Themainreasonthecompanyclosedinthe2006wasduetoasupplieragreementithad
withalargeAmericanretailerthatwentbankruptandlefttheholdingcompanyforTTKOutdoorApparelCompanyLLCbeing
owedcloseto$1.3milliondollarsaftereverythingwassaidanddone.Thisresultedintheholdingcompanyhavingtoclose
becausethelossfromtheonemajordepartmentstoreresultedinalossfortheyearof$2.3milliondollars.
Therevampedcompanynowhasnewcontractsinplacewithretailersrequiringa35%cashpaymentinadvanceofshipmentof
goodstostoreandthebalancetobepaidaweekpriortoconfirmedshipmentofordertothatstore.Whiletheclothingbusiness
canbedifficult,consideringwhathappenedinthepast,TTKOutdoorApparelCompanyLLCdidnotadopttheindustry
standardof100%paymentoforder6monthsinadvanceofseason.Itwasfeltthatthismaybetoohardonsmallretailers.The
majorfocusofTTKOutdoorApparelCompanyLLCistotargetsmallretailersandonlysupplylargeretailerchainsifthey
meet100%prepaymentrequirements.
Theoldcompanyneverhadasinglewriteofffrommediumtosmallretailers;thisisthemajorreasonwhyTTKOutdoor
ApparelCompanyLLChasadoptedthenewpolicy.
Theangleinvestorwillstaywiththecompanyforaslongasitexists.Thismeansthe$200,000willbepaidbackat11%
interestperyearovera5yearperiod.Onceallpaidback,theangelinvestorwillremain51%shareholder.Whiletheangel
investorwillbethemajorshareholder,thepartnerwilltaketheCEOroleandrunallthedaytodayoperationsofthefirm.
INVESTMENT&OWNERSHIP
TTKOutdoorApparelCompanyLLCwillbeownedjointlybyDavidSmithandanangelinvestor.Theinvestorwillinvest
$200,000inthefirmandDavidSmithwill,inturn,giveallhistrademarketsfortheclothinglinetothecompanyandtheangel
investor.
DavidSmith—49%
Angelinvestor—51%
STARTUPCOSTS
Startupexpenses
Clothesmanufacturing $50,000
Sales&marketing $20,000
Tradeshows $5,000
Travel $20,000
Hotel $15,000
Samples $10,000
Shipping/Courier $2,000
Telephone $1,000
Legal $12,000
Accounting $4,000
Businesslicence $250
Insurance $1,200
Meals $2,000
Copies/flyers/etc $1,500
Officeexpense $10,000
Staffingforfirst3months,then
cashflowscoverthisexpense $65,000
Miscother $1,000
Advertising $5,000
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