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Blacklist Apparel

1/9/14

Mitchell Pendleton

Bank Manager of NAB Buderim

6 Lawson Street, Byron Bay, NSW 2481

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Executive Summary

Blacklist Appeal is a fresh and vibrant brand ready to approach the market with a contemporary approach,

which matches it’s exclusive street wear products and wishes to put forth this report to apply for a loan of

$92,000 to the Bank Manager of National Australia Bank Buderim. The business comes formally under the name

of Blacklist Apparel, which will sometimes be seen as “BLA” in it’s labelling, owned and founded by Mitchell

Pendleton.

The business will provide a large range of clothes, shoes and accessories that come around a recent style called

‘street wear’, this refers to what ever clothes are popular on the streets of big cities, however BLA plans to

provide these styles before they become popular and stay ahead of the fashion industry trend. The business will

be majorly online, with an easily accessible and user friendly website that products can be viewed and

purchased. There will also be a storefront that is located on 6 Lawson Street, Byron Bay; this will be used for

sales and promotion.

The reason Blacklist Apparel stands out over the current competitors in the retail fashion industry is due to its

approach on fashion, it will use the highest quality of materials to produce styles that consumers will have

never seen before. It will use contemporary ways of marketing in order to build up the hype over the brand,

whilst still not mass-producing the product so that it becomes an exclusive label that customers feel privileged

to own.

The methods of analysis used in this report has been a combination of primary and secondary methods,

including a survey and interviews which have been completed with the aimed demographic of males and

females aged 15-32. There has also been a large amount of the secondary research done online, using current

statistics and articles, which directly discuss what, are currently being done and what is currently trending,

even what is predicting to happen to the market.

Through the research of the market and analysis of the predictions for Blacklist Apparel, it will be proven that

there is great potential for success of the business. The SWOT analysis directly indicates the factors impacting

on the business, and it can be seen that by monitoring the risks and maximising the opportunities, profit and

success of the business is achievable. The financials also show a clear indication of this, with considering all the

expenses and start up costs, with the predicted sales, there is a certain amount of profit to be made within the

first year of production.

Overall the business plan has a clear format to propose all the aspects of the business and how the use of the

correct procedures, financial management, operations management and human resource management allows

the business to follow the road to a successful future with an infinite amount of opportunities ahead.

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Table of Contents

1.0 THE BUSINESS PROFILE

1.1 Key information

1.2 Vision and Mission Statements

1.3 SWOT Analysis

1.4 Key Goals and Objectives

2.0 THE MARKET

2.1 Market Description

2.2 Target Market

2.3 Competition

2.4 Market Research Methods

3.0 Marketing Plan

3.1 Marketing Strategies

3.2 Marketing Mix

3.2.1 Product

3.2.2 Price

3.2.3 Promotion

3.2.4 Place

4.0 Operations Plan

4.1 Production facilities

4.2 Process Flow

4.3 Inventory management

4.4 Quality control

5.0 Human Resource Plan

5.1 Organisational chart

5.2 Key personnel

6.0 Financial Plan

6.1 Cash Budget

6.2 Income Statement

6.3 Balance Sheet

6.4 Ratio Analysis

7.0 Risk Minimisation

8.0 Licensing and Permits

9.0 Bibliography

10.0 Appendix

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1.0 Business Profile

1.1 Key Information

The business name for the proposed business is Blacklist Apparel, with the owner of the company being

Mitchell Pendleton. The business is an online website which sells urban street wear clothing, shoes and

accessories for both males and females, aiming at the young adult demographic. It will provide contemporary

and new looks, which range in formal to casual and winter to summer, with the ease of an online website for

ease of purchase where every product can be viewed. The location of the head office will be based in Byron Bay,

NSW, this is where the finances, website maintenance, customer support (including phone line and online help)

and also a shop front with the exclusive clothing selections. The warehouse will also be located in Byron Bay,

where the products will not only be stored there for dispatching, but the products will also be hand made there.

The planned legal for the business will be under a Sole Trader ownership, this means Mitch Pendleton will be

the only owner of the Blacklist Apparel with full responsibility for all aspects.

1.2 Vision and Mission Statements

Vision Statement – Our vision is to supply the opportunity for any average guy or gal to cover themselves in the

most stylish of street wear apparel available, with not only an exclusive look but also the highest quality of

materials. We wish to be at the top of the designer fashion industry, working with the A grade models and

fashion shows. Customers will see us not only was an important contributor to the fashion industry, but also as

a business combining the values of 5 star customer service with an easy purchase method.

Mission Statement – The mission of Blacklist Apparel is to focus on bringing to life a new style of clothing,

incorporating what has been done, what is being done and what has never been seen before. We focus on the

new generation of fashion for people around the world to be able to choose, purchase and receive their

clothing, shoes and accessories all within one easy website.

1.3 SWOT Analysis

Strengths – There are multiple aspects of Blacklist Apparel that prove to be strengths in order to help it develop

an edge in name recognition, brand positioning and bottom-line revenue. One of the first main strengths is the

method of sale, this being the online website which can be accessed from all around the world. The generation

we are now living is one of a technological age, this means that in order to keep up with the times an online

method of sale can be proven to be the most effective. Having an online business also greatly minimises costs

and overheads, it minimises rent and wages, which is one of the greatest impacts on profit loss affecting many

businesses1. The website also produces a lot of effective processes, including easy customer contact, customer

analysis, customer feedback, recording of sales, advertising of special sales and display of product range.

Although the use of one storefront as an alternative option for sale, gives an exclusive fell to the brand, in the

idea that ‘you can only get it at the one store’ feel and will made customers want to travel to the store seeing as

it’s the only one in the world. Another one of the main strengths is the style of clothing that the business is

selling the current ‘street wear’ style, which is one of the most prominent styles for young adults currently.

Although incorporated with street wear is a lot of other styles, this means that Blacklist Apparel is able to be

flexible in the kind of clothing they produced. Street wear basically means whatever is being worn on the

streets, therefore urban culture, indie culture and many other cultures can be incorporated in the clothing line.

The flexibleness of the products gives the business the strength to altar what the produce and what they release

to the market, therefore being able to make tactical decisions in order to reach certain demographics that the

products will sell too.

1 http://nuancedmedia.com/the-benefits-of-investing-in-an-online-store/

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Weaknesses –One of the first weaknesses of the business is the fact that when a customer is on the website, and

not in the store, they are not able to physically see or try on the close, this then can develop some lead on issues

after purchase. For example if a customers gets their size wrong then they will feel unhappy with the product

when the receive it, this then puts the responsibility on Blacklist Apparel to take back the product and reship

the correct size due to the customer satisfaction promise. Also another issue with online purchasing is the fact

that customers can not physically see or try on the item, this can then potentially create flow on effects such as

customers purchasing wrong sizes or not liking the item a few days after the purchase once its been received.

Opportunities – The fashion industry is currently booming, it has been a extremely sturdy retail industry for a

long time and has a future of improvement23. This then only provides Blacklist Apparel with the opportunities

for further expansion as a brand and developing a firm grasp on the industry. With the right vision and mission

implantation, the brand is able to make a large impact on the market and by reaching as many consumers as

possible, is able to maximise sales. Also there is opportunities to do collaborations with other large brands, this

has become a massive trend in the fashion industry and people pay a lot of money for exclusive collaborations.

Seeing as Blacklist Apparel provides clothing, shoes and accessories for seasons all year round, this provides

the opportunity for constant sales for clearing stock and for bringing in new stock, consumers are a massive fan

of sales and see this is the time to purchase, therefore increasing sales.

Threats – There are a few competitors that propose some threats to the growth of Blacklist Apparel, the

competitors range from large companies like Supreme and smaller companies like Represent Co, which provide

a challenge for Blacklist Apparel to prove their worth and to prove that what they have to provide is above what

is currently available. Another threat to Blacklist Apparel is due to shipping issues, with it providing the online

website means that people from all around the world are able to make a purchase and have their products

delivered to their door step. This can pose threats such as item loss through the mail, items delayed and even

the fact that some countries are impossible to ship to due to certain circumstances. The threat of online security

and fraud is also an issue, this can be due to hackers or some very clever online criminals posing threats to both

the business and customers financial security. Lastly the issue of selling products internationally means

constant analysis of the exchange rates, this can pose a threat to the financials of the business and if not

monitored properly can result in money loss.

1.4 Key Goals and Objectives

1. To have the website and store ready to open by December 10 2014, this will take organisation and time

leading up to the date

2. To have established a large amount of online and general advertising, resulting in large scale hype around the

opening of the brand

3. To provide an ‘opening sale’ to gain the Christmas and Boxing Day sales, this will be advertised through

multiple methods and profit margins will be arranged accordingly

4. To have a constant flow of products being made sold and dispatched resulting in a sufficient source of profit

at around 50% each product by February 2015

5. To have KPI’s developed and implemented by February 2015, this will be done through meetings with

management and financial advisors

6. To have made collaboration with a larger designer brand by May 2015, this will be done through brand

recognition and close workings with larger labels

7. To have made it as a feature brand in a fashion magazine by 2016, this can be done once again by brand

recognition and working with fashion icons as models

8. To be recognised as a business with 5 star customer services and delivery, this will be done through sufficient

use of procedures and staff action.

2 http://www.abs.gov.au/ausstats/abs@.nsf/mf/8501.0 3 http://www.aifst.asn.au/retail-sales-growth-strengthening.htm

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2.0 The Market

2.1 Market Description

The retail fashion industry “a product of the modern age” makes up the sales of clothing, shoes and accessories

all around the world; it is a multi-billion dollar industry that in 2009 generated $304 billion in revenue,

according to Franchise Help. A number of large big named businesses make up a large section of the apparel

market, these large businesses often change from season to season. Although the industry is also largely

impacted by the small business, such as boutique and niche apparel stores. The difference between the larger

business and the smaller business, is the fact that the smaller ones seem a lot more exclusive and they may be

making less sales although they are not necessarily making less money. This is due to the higher price of their

purchasing from suppliers or the cost of self made products, resulting in higher selling prices. They also bring in

a large part of the market due to the fact that they sell specific special items that larger stores which sell just the

“basic anything” products do not offer. The industry has been on a constant trend of stability since in first

developed, has shown a strong stance in international growth and has become a highly globalised industry.

According to CSI Market4, the industry in the first quarter of this year has had a growth of 4.29% year on year.

Not only has the retail fashion industry itself kicked off, but also further more, the online retail fashion industry

has experienced even more significant growth. According to PWC5, the online shopping expenditure of Australia

is expected to reach $16 billion, a growth of 17.6% from the 13.6 billion in 2011. This equates to 6.3% of retails

sales, which is projected to reach over $253.8 billion (refer to 9.0 Appendix, Item 1 for more information).

2.2 Target Market

Blacklist Apparel provides a style of clothing, shoe and accessories which supply an exclusive niche look yet on

general styles of clothing, this is a style that is often sought after by males and females aged 15-32. This is

therefore the target market of the business, the ‘hip’ and ‘stylish’ generation of males and females aged between

15-32, although by saying this there is also section of people that defer from this age bracket in which aim to

wear ‘younger’ styles of clothing. In 2008-09, 64% of people aged 15 years and over who accessed the Internet

used it to make online purchases, an increase from 2006-07 (61%). Younger adults aged 25-34 years were

more likely to buy goods and services over the Internet than older people, with three-quarters (75%) doing so

compared with less than half (45%) of people aged 65 years and over6. Therefore by strongly pushing the

online website, we are able to target this large percentage of demographic that are purchasing online. However

the use of the one storefront also influences another percentage of the demographic that would prefer to make

my purchase within a clothing store.

The factors that will influence this target market to market to purchase from Blacklist Apparel is the simple

basis around what is considered ‘in style’, by keeping up with current trends or even showcasing them before

they become big, we are able to have that upper hand on influences the target market to purchase from the

business. This demographic of consumers that we are aiming at are the influenced by the current trend of

‘exclusive’ clothing, as they like to see themselves wearing an item that has not yet flooded the market. We can

achieve this through clever use of pricing, marketing and constant new stock so that there are always new

things to be purchased and it prevents everyone from buying the same thing.

4 http://csimarket.com/Industry/Industry_Growth.php?ind=1301 5 http://www.pwc.com.au/industry/retail-consumer/assets/digital-media-research-jul12.pdf 6 http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1370.0~2010~Chapter~Shopping%20online%20(4.8.4.1)

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2.3 Competition

There are some apparel businesses that are known all around the world such as, Ralph Lauren, Nike and

Billabong. These are brands that have been around for many years and throughout have stayed extremely

strong in the market. Although these businesses however are not the first hand competition to a brand like

Blacklist Apparel as they produce different styles. The competition that we will be currently looking and at

facing as the business kicks off, will be some of the smaller online stores, such as Hypebeast7, ASOS8, Surfstitch 9and General Pants Co. 10These businesses share the same similarities by either having majority or all of

services online, also some of their stocks aims at the same styles and target market as Blacklist Apparel.

However the one thing that these stores do no currently have is the brand Blacklist Apparel, seeing as the

website or the one store will be the only place that these products can be purchased from for now. This gives us

the upper hand over the competition, as we are able to provide a product that nobody else can.

2.4 Market Research Methods

Primary Methods

Survey: a survey was made which was sent out to a demographic of people, which suited the

demographic of the business. A total of 29 people filled out the survey which provided a range of

answers and expectations of the current market

Word of mouth: Through speaking to many people, also in the demographic of the businesses market, a

lot of feed back was gained in reference to online shopping and what they expect when purchasing

apparel

Secondary Methods

Online research: A lot of research was done online about what businesses are currently out there, what

they are doing and how they are doing it. This provided a lot of information which helped with

designing the market research directly impacting Blacklist Apparel

7 http://store.hypebeast.com/ 8 http://www.asos.com/au/?hrd=1 9 http://www.surfstitch.com/ 10 http://www.generalpants.com.au/

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3.0 Marketing Plan

3.1 Marketing Strategies

Blacklist Apparel is planned to open on the 10th December 2014, and is preparing to enter the market of the

retail fashion industry in a big way. In order to make it big in the retail fashion industry, a brand needs to be

able to stand out from the rest and with clever tactics of marketing and the exclusive high quality products of

Blacklist Apparel, this is achievable. In terms of the market penetration, the type and number of customers has

been evaluated in order to meet the revenue projections. With the use of the internet as the main marketing

strategy, the number of customers is endless, along with the geographical position of the customers. Therefore

the current geographical penetration of Blacklist Apparel is going to be world wide, in terms of online

marketing through social media etc., this will be incorporated with different language and currency options on

the website. However a strong focus will be put on the Australian market to start with in terms of strategically

TV, billboard and radio advertising. The reason for this is that the business as an online identity is world wide

and therefore potentially appeals to a world wide market, although by directing a strong marketing to Australia,

as its origin country, it can be seen as a local clothing brand that will get is kick start from a local market. This

therefore means that the business is able to maximise sales through marketing to the world online and

marketing through other sources such as TV, billboard and radio advertising to get the Australian market on

board for both the online website and the Byron Bay store.

3.2 Marketing Mix

3.2.1 Product

Blacklist Apparel is a brand that aims to establish multiple lines of clothing, shoes and accessories for both male

and female, which comes into a style currently labelled ‘street wear’. The street wear line is one of the targets

trending styles that is currently floating around the fashion industry, this was shown in the survey (see

appendix 4), where a total of 65% of people said is was their most preferred style of clothing, also 55% of

people said they exclusive/designer labels were their favourites, and this is what Blacklist Apparels products

combine. The label with include three different sections, the clothing line, shoe line and a range of accessories

The clothing, show and accessory line will have a rather exclusive range, however there will be constant ranges

coming into place each few months. For example when the business firsts opens it will have a selection of a few

tops (shirts, jumpers, jackets) and bottoms (shorts, jeans, skirts), shoes (different styles) and accessories

(beanies, hats, rings, bracelets, necklaces and backpacks), that will all be of a similar look that is currently

trending are that is predicted to trend, and then in March a new line will come out that will be of a different

look, as in different shapes, fabrics and colours.

The packaging will depend on wether someone has brought online or if it is being delivered to the store. The

items that are being sent straight to someone’s postal address, when they have purchased of the online store,

will be in a big grey bag that is labelled Blacklist Apparel and will be sealed shut around all sides. The business

will have a machine, which packages these and will also stick on a sticker with our address and where it is to be

sent to. Inside the bag will be a letter saying thank you for purchasing, a special code to receive a free gift on

next purchase (this could be a towel, water bottle or key ring with the business name on it), there will also be a

receipt that they can send back with the item within 15 days if the item is faulty or the incorrect size. The

packaging however will be different when the items are sent to the store, seeing as items will be sent in bulk

they will all be folded up and placed on a wooden crate which will then have a machine wrap it in plastic to

keep everything together.

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First shoot for the begging line of clothing, footwear and accessories, called Future

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Current website home page

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3.1.2 Price

The overs objective for Blacklist Apparel is to receive the highest amount of profit possible whilst still being

able to provide a sound product, this is why the business has taken on a profit objective using a combination of

the cost-oriented and the consumer orientated approach. This combination of processes will mean we form

prices so that it matches our profit margin and also meets the price expectations of the customers. Through the

analysis of the survey taken, it proves that customers prefer the exclusive/designer labels which a typically of

higher price. These kinds of brands however may produce a style that is very appealing to the consumers,

although it tends to come with a very high price bracket, which is more than $100 per t-shirt or more than $200

for jeans, and this is at the lower end of the designer scale. Although what is appealing about Blacklist Apparel

is that it is able to produce these same kinds of styles at an affordable price, the price range for the business will

range from $30 starting at the accessories and $130 for some of the jeans and jumpers. Majority of the

customers also said that they were willing to spend between $20 to $300 dollars on these kinds of products,

this is understandable to due the amount of expendable money for clothing purchases that is currently trending

around the 15-32 year old age bracket.

Some of the current planned prices for the Future line

Men’s Jumpers: $115

Men’s Jeans: $129

Men’s Short: $69

Men’s T-shirts: $59

Men’s Shoes: $78-$112

Men’s Hats: $37-$49

Men’s Jewellery: $30 - $50

Women’s Jumpers: $119

Women’s Jeans: $129

Women’s Dresses: $89

Women’s T-shirts: $59

Women’s Shoes: $78-$112

Women’s Hats: $35-$49

Women’s Jewellery: $35-$59

Backpacks: $58

Other items ranging from $30- $130

The reason that these prices are not all even numbers such as $130, but instead $129, is because it makes the

consumer believe that they are getting a lower price as they focus on the more significant digits of the price

rather than the last number, this is a tactic called odd-even pricing. There will also be a large amount of

promotional pricing used, this is because once each line is about to finish and a new one is about to come out, a

sale will start. Also once each season changes it will get rid of stock for the next season of clothing to begin.

There will also be other sales such as pre-Christmas, boxing day, financial year and other calendar events, this is

because consumers usually look at purchasing at these times of year.

The price will be a constant section that has to be analysed by the financial department of Blacklist Apparel, this

is due to the costs incorporated in producing the item can constantly changed. The business will always insure

that a profit is being made on their products, seeing as this is their optimum goal for operations.

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3.1.3 Promotion

Backlist Apparel as a business has planned many different ways that it will promote their brand; this is through

direct branding in their products and different methods of advertising.

The product branding will be used through the way the products are designed, this means that every single

product will have a word/s or a symbol that will incorporate the business logos in order to promote what brand

the products are. For example, the t-shirts will all be of different colours, designs, and fabrics, however the one

thing they will always have in common is the same brand name incorporated on it so that consumers know who

made it. This will also be very important once the brand has built up its reputation people will be looking for

the products with the Blacklist Apparel name on it so that people can see what brand they are wearing.

The other methods that will be used to market the business are online, TV and pop-up advertising (billboards

and posters), the use of these methods will provide a large range of advertisement so that the business is able

to be made aware to as large of a demographic as possible. Online advertisement will involve contact with

Google in order to have advertisement on multiple social networking sites, this will be arranged by the human

resources department as they will be in charge of contact with outside businesses. Advertisement through a

Facebook page and instagram site will also be used to try and reach the large amount of online users and also us

strategic marketing campaigns to gain hype around the opening of the business. One of the availability

opportunity for customers will be that they can sign up prior to the opening of the business and they will

receive a free gift with their purchase, either a basic Blacklist Apparel shirt with a big logo on it or a Blacklist

Apparel cap, this will be a way of gaining sales and getting the name out there. TV advertisement will be of use

when trying to reach the older demographic, this is the 18-32 year olds as they are most commonly watching

TV. Clever use of music and visuals will be used during the commercials, therefore creating the look and feel

that the customer seeks. The pop-up advertisements will include posters and billboards around the kind of

areas that the target market hang around, such as shopping areas, clubs, cafes and other sections of cities, these

will also use appealing imagery with the necessary information.

There will be constant use of promotion not only throughout the campaign for the opening of the business, but

there all always be new campaigns coming out to promote sales, new lines of clothing and to keep the

consumers interested.

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3.1.4 Place

The current position for Blacklist Apparel is to be known as an online store, however it is also planned to have a

store, which will have all the products that are online and will be some items that are exclusive to the store. The

website will be a worldwide domain that can be accessed by anyone around the world with access to the

internet, therefore potentially making it an international business in that aspect. Although the website will be

run from offices which are also located in Byron bay and are in the same warehouse that all the production and

dispatching of the item is done.

The warehouse will be located in Suffolk Park, just 10 minute from Byron bay, and will be in an industrial type

area where similar business are located. The building is a modern warehouse that can double as a show room

and factory, it has multiple rooms which will be used for different stages of the production process. It also has

an upstairs area, which will be used as the offices. The cost of the warehouse is $3,000 per month, and from

research of the market this is one of the best prices in the area, especially with the facilities it supplies. The

warehouse also has an excellent floor plan with a road on either side of it, so that there are two large access

points.

The store is located in the middle of prime retail shopping; it is right amongst the lifestyle of Byron and has

multiple other stores surrounding it, which will be able to bring the crowds through. The positive for having

Blacklist Apparel in this location is not only the massive street wear culture around Byron, but also the fact that

there is no stores quite like it and it will have great potential for this location. The price of the store to lease is

$1,500 a month; this was once again one of the best prices on the market, especially considering its position

(only a few doors down form the iconic Afends store). The store has parking all around it, including a few parks

out the front, beach parking and also multiple parking spaces around the street, also next to the store is a side

alley which allows easy space for deliveries.

Warehouse

Store

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4.0 Operations Plan

4.1 Production Facilities

Bottom Floor

Reception

Finish Product

Storage Room

Materials Storage

Room

Dispatching Zone

Delivery Zone

Packaging Room

Emergency Exit

Material Cutting

Room

Material Stitching

Room

Printing Room

Toilet

Street

Street

Side

Street

Parking

Kitchen

Stairs

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Top Floor

Stairs Railing

Server

Room

Customer Service

Office

Inventory/financial

Office Website design/monitoring/sales Office

Administration

Conference

Room

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4.2 Process Flow

The process flow of the factory is designed so that the direction of the materials and products flow in the steps

of production. This means that each time the item moves through the factory it is also completing a different

stage of production. This is also minimising any time wasting where products are moved unnecessarily.

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4.3 Inventory Management

Blacklist Apparel will consist of multiple types of inventory, these can be seen in the different stages of the

process flow, including materials, partly finished goods and also finished goods. However the business does not

produce to order, nor does it have and unlimited amount of stock available, instead the business produces a

certain amount of stock that will be available to both the store and online purchases. Firstly the store will

receive a new package each time a different line is produced, this is then used as safety stock11 inside the store

so that whenever a customer comes in to purchase a current line of products, there will always be an item

available. There will also be a strict level of communication (daily) between the store and warehouse, this will

insure a promising supply of products are available from the warehouse, minimising the risk of low product

availability inside the store. There will also be a much larger amount of storage of products inside the

warehouse; this is the product that will be sent to customers that purchase online. There will also be a strict

schedule followed within the factory, this is because the business will use a system where a certain amount of

the product line is to be stored and ready to be dispatched inside the warehouse, and once the stock reaches a

certain level, the product will then be produced again so that it reaches its right stock level. This will ensure

that there are always products available for online customers and this process will proceed until the following

line comes into place, then it will start all over again for a different line of products. Blacklist Apparel aims to

use techniques such as EOQ (Economic Order Quantity) and MRP (Material Requirements Planning) to ensure

that the right amount of equipment is available to produce the amount of products it aims for, and also to not

hold up to much cost in inventory.

4.4 Quality Control

Quality Control comes under one of the biggest promises that Blacklist Apparel makes to its customers, and that

is to supply the highest of quality products it can to it’s customers. The business will use a quality assurance

approach in order to meet its value promises, this will use steps that analyse the materials coming in, monitor

the production line and see over every single product leaving the factory. The style of the product line uses a

step by step process, this means that we can check every step to ensure it is all running correctly and if there is

a problem with the finished product the business is able to pin point which point of production the error is

occurring. This will also mean using a level of preventive maintenance, through constant maintenance out on

the machinery and also corrective maintenance if a problem is found. Once each product is complete there will

be multiple people at the packaging section that look over every product before it is put into the right

packaging, this will mean every product looks the same. Each product will then be packaging and stored in a

safe dry area, which will keep it in its optimum condition, this will be the same during transport. Seeing as the

product is not perishable, this makes it a lot easy to manage and to ensure a high level of quality.

11 http://smallbusiness.chron.com/methods-inventory-control-2234.html

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5.0 Human Resource Plan

5.1 Organisational Chart

5.2 Key Personnel

Blacklist Apparel will have three sections of the business that provides a selection employee group, this is the

store (Store Manager, Store Workers) factory/warehouse (Design Manager, Design Team, Factory Manager,

Factory Workers) and the website team (Website Manager, Website Developers, Website Monitors, Marketing

Team). Each group will have multiple levels of power, the first person in charge is the owner/founder of the

company, this person has the overall ruling of the company and overseas all decisions made that impact on the

business. The owner is also a sole trader, therefore takes on the full practical and financial responsibility of the

business. The section managers are also very important in terms of running the business, they are in charge of

not only monitoring and leading their sections, but also are the vital source on communication between the

owner and the sections.

Owner/Founder = 1 person

Design = 1 Manager and 5 people in the design team, with lots of other outside contributors in the design team

coming and going

Factory = 1 manager, 5 workers

Store = 1 Manager, 6 workers (1 full time, 5 casual)

Website = 1 Manager, 2 developers, 2 monitors

Marketing Team = 3 people

Owner/Founder

Design Manager

Design Team

Objectives

- Product design

- Fashion market analysis

Facory Manager

Factory Workers

Objectives

- Production of products

- Factory managment

Store Manager

Store Workers

Objectives

- Sales of products

- Community awareness

Website Manager

Website Developers

Website Monitors

Objectives

- Websiite Construction

- Website maintanace

Marketing Team

Objectives

- Advertisment

- Promotions

21

6.0 Financial Plan

6.1 Cash Budget

6.2 Income Statement

22

6.3 Balance Sheet

6.4 Ratio Analysis

Gross Profit:

Gross Profit = Gross Sales – Costs of Goods Sold

= 396,000 – 50,000

= $346,000, this is the total amount of profit that will be made on the sale of goods in the year,

however this has not taken into account other expenses

Profit After Expenses:

Gross Profit – Expenses

= 346,000 – 246, 616.52

= $99,383.48

Company Liquidity

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑙𝑖𝑡𝑖𝑒𝑠:

Current Ratio = 100,000

92,000:

= 1.1

The ratio is over 1, this means that the company has enough money currently to cover the liabilities it currently

holds, $1.1 of assets for every $1 of liabilities.

23

Net Profit:

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡

𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 x 100

149,383.48

396,000 x 100

= 37.72%

This shows that for each $1 of sales in the year 2014 the net profit was 37.72%. This means for every dollar of

sales 37.72 cents was net profit.

Return on Investment:

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡

𝑂𝑤𝑛𝑒𝑟𝑠 𝐸𝑞𝑢𝑖𝑡𝑦 x100

149,383.48

138,000x 100

= 108.25 %

This ratio shows how much return, the money the owner has invested in the business. Of the $138,000

invested a return of 208.25 % will be received in the year, therefore making a 8.25% profit return on

investment within the first year

Return on Total Assets:

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡

𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 x 100

149,383.48

230,000x 100

= 64.95 %

This ratio shows that for the amount of assets owned, there is a 64.95% of profit being made, therefore the

amount of assets is not impacting on the profit and shows that they are worth owning.

24

7.0 Risk Minimisation

In order to minimise any sorts of risks to the business, there will be an insurance policy taken out with QBE

insurance 12that will ensure protection in regards to financials, stock, property, equipment and customer

liability, some of the risks that propose a threat to these subjects are fire, flood and theft etc.

The properties that will be leased to Blacklist Apparel (warehouse and store) will be signed to a lease contract

of 3 years will be the guaranteed start for the long term lease, this however has been discussed that after the

first few years of production the lease will be secured to a 10 year contract. This will ensure that the company

will not have any loss of premises during production.

The staff will be insured the highest degree of employee protection through strict use of the workplace health

and safety, the departments will do monthly checks upon the premises making sure it is all up to law and

standards. The factory will have first aid kits, emergency stop buttons and alarms around every section of the

factory and machinery.

The products will also be also facing strict routine and systems that ensure the quality control, however if there

is an error made in this process and a customer receives and incorrect or faulty product, the business has a

promise to replace the item free of charge (including free return shipping for online purchases). This minimises

the risks of customers looking negatively upon the business.

8.0 Licensing and Permits

There will be multiple licenses and permits that will be registered by Blacklist Apparel prior to opening the

store, a lot of these are little ones that relate to the production of goods, alterations of premises, copyright,

trademarks and taxes etc. However the major ones that Blacklist Apparel will register is business name and

ABN (Australian Business Number),

12 http://www.qbe.com.au/Business/Insurance.html

25

9.0 Bibliography

Abs.gov.au, (2014). 1370.0 - Measures of Australia's Progress, 2010. [online] Available at:

http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1370.0~2010~Chapter~Shopping%2

0online%20(4.8.4.1) [Accessed 16 Aug. 2014].

Asos.com, (2014). Leather Satchel Company | Leather Satchel Co. Backpack at ASOS. [online] Available

at: http://www.asos.com/au/search/backpack?hrd=1&q=backpack http://representclothing.co.uk/

[Accessed 17 Aug. 2014].

Cronk, T., Kirkwood, L., Ryan, C. and Stanley, T. (1999). Business organisation and management. 1st ed.

South Melbourne: Moreton Bay Pub.

Inc.com, (2014). [online] Available at: http://www.inc.com/articles/201108/business-start-up-costs-retail-

store.html [Accessed 13 Aug. 2014].

Nab.com.au, (2014). Loan repayments calculator - estimate your mortgage repayments. [online] Available

at: http://www.nab.com.au/personal/loans/home-loans/loan-calculators/loan-repayments-calculator

[Accessed 28 Aug. 2014].

Payscale.com, (2014). Retail Industry Wages, Hourly Wage Rate | PayScale Australia. [online] Available

at: http://www.payscale.com/research/AU/Industry=Retail/Hourly_Rate [Accessed 12 Aug. 2014].

REPRESENT CLO, (2014). REPRESENT CLO. [online] Available at: http://representclothing.co.uk/

[Accessed 16 Aug. 2014].

10.0 Appendix

26

Item 1

Item 2 - Wages

27

Item 3 – Phone and Internet Prices

Item 4 – Bank Loan from Na

Item 5 - Survey Results

28

29

30