1 | P a g e

2 | P a g e

Executive Summary...........................................................................................................4

1.0 Introduction to Belle....................................................................................................51.1 Value Proposition.................................................................................................................51.2 Goals and Objectives............................................................................................................51.3 Key Success Factors.............................................................................................................5

2.0 Operations Plan...........................................................................................................52.1 Legal Structure.....................................................................................................................52.2 Organizational Structure.....................................................................................................62.3 Site Plan.................................................................................................................................62.4 Building and Floor Plans.....................................................................................................72.5 Flow of Organization............................................................................................................82.6 Quality Control Program....................................................................................................92.7 Organizational Tasks...........................................................................................................92.8 Supply Analysis...................................................................................................................112.9 Capital Budget....................................................................................................................122.10 Cost of Sales......................................................................................................................122.11 Operating Expenses..........................................................................................................132.12 Working Capital Planning...............................................................................................13

3.0 Human Resources Plan.............................................................................................143.1 Required Staff.....................................................................................................................143.2 Job Descriptions.................................................................................................................153.3 Recruitment.........................................................................................................................163.4 Human Resources Strategy...............................................................................................163.5 Shareholder’s Agreement..................................................................................................173.6 Management Team.............................................................................................................173.7 Human Resources Expenses..............................................................................................18

4.0 Strategic Marketing Considerations........................................................................184.1 Industry Overview and Market Analysis.........................................................................184.2 SWOT Analysis...................................................................................................................194.3 Competitive Analysis..........................................................................................................204.4 The Marketing Mix............................................................................................................214.5 Customer Value Proposition.............................................................................................294.6 Marketing Expenses...........................................................................................................30

5.0 Financial Plan.............................................................................................................305.1 Financial Breakdown.........................................................................................................305.2 Risk Analysis.......................................................................................................................30

6.0 Summary....................................................................................................................33

Works Cited.....................................................................................................................34

Appendix A: Financials...................................................................................................35

3 | P a g e

Executive SummaryBelle provides the “perfect party dress” and aims to help women “dress beautiful”. Belle, the dress boutique, offers fashion-forward cocktail dresses and jewelry that will make the perfect outfit for any special event. The following business plan outlines the operations, human resources, marketing, and financial components of the proposed venture.

It is important that customers leave Belle feeling beautiful in their dress purchases, and four goals and objectives have been outlined to ensure that this happens every single time:

Ensure that customer experience is impeccable; Assist customers in creating and accessorizing the perfect party outfit; Offer unique products at reasonable prices; and Provide a unique store atmosphere through live entrainment and seasonal fashion

shows that allow for socializing and better interactions with customers.

As the retail industry continues to grow, it is necessary that new ventures like Belle differentiate themselves from competition in order to remain in the market. Located in the heart of the downtown shopping district, Belle will stand apart from other dress retailers in Saskatoon by offering each style of dress in only five sizes (XS, S, M, L, and XL), which will help ensure that customers are adding unique pieces to their wardrobe.

The target market for Belle consists of females between the ages of 18 and 34, who are in need of purchasing a dress for a particular event. In order to reach the target market, Belle will host a number of promotional events, including a Friends and Family Night, Grand Opening, live entertainment concerts, and seasonal fashion shows. Other marketing tactics will include charity initiatives, radio advertisements, and a strong social media presence.

Belle’s staff will include two managers and one full-time sales associate, all highly knowledgeable in fashion and any upcoming trends. Belle wishes to incorporate open lines of communication, while providing a friendly and laid-back environment where customers and employees feel comfortable to spend their time.

The most critical variable of the business is the number of customers that come into the boutique per day. Although the financial analysis shows that Belle is very sensitive to this critical variable, a look at average owner compensation proves that the company is profitable with a net income of $137,990 and an average own compensation of $100,145 by year 5.

Belle, the dress boutique, will feature monthly live entertainment and seasonal fashion shows that will promote all of the upcoming trends, and foster a fun and friendly environment. This unique atmosphere, along with its fashion-forward, high-quality products, provides Belle with a unique value proposition and competitive edge that will drive customers to its doors.

4 | P a g e

5 | P a g e

1.0 Introduction to Belle1.1 Value Proposition

Belle is a dress boutique offering the “perfect party dress” so women can “dress beautiful”. Belle provides fashion-forward cocktail dresses and jewelry, specifically for special event purposes, such as weddings and holiday parties. The boutique will be located in the central downtown shopping district of Saskatoon on 21st Street, between 1st

and 2nd Avenue. Belle will stand apart from other dress retailers in Saskatoon, since each style of dress will only be offered in five sizes (XS, S, M, L, and XL), which will help ensure that each piece is unique within its debut. The boutique is also unique in the fact that live entertainment will be featured monthly and seasonal fashion shows will promote all of the upcoming trends.

1.2 Goals and Objectives

It is important that our customers leave the dress boutique feeling beautiful in their dress purchases, and four goals and objectives have been outlined to ensure that this happens every single time:

Ensure that customer experience is impeccable; Assist customers in creating and accessorizing the perfect party outfit; Offer unique products at reasonable prices; and Provide a unique store atmosphere through live entrainment and seasonal fashion

shows that allow for socializing and better interactions with customers.

1.3 Key Success Factors

There are four key success factors that we must rely on in order to meet the outlined goals and objectives:

Proper implementation of training and monitoring of staff by managers; Continually researching and stocking the latest trends; Meet base case of customers per day and outlined projected sales goals; and Attract a loyal and large customer-base, and ensure that all customers are happy

with the service at Belle.

2.0 Operations Plan2.1 Legal Structure

Belle will be a corporation, whereby Natalie Brandt and Megan Orr will be the only shareholders at start-up, each holding 50% of the voting shares. There are five reasons for choosing to form a corporation rather than pursue a partnership:

Limits the liability of each shareholder; Company qualifies for the preferential small business tax rate, which will provide

a tax advantage; Ownership of shares are easily transferable;

6 | P a g e

Greater access to capital; and Promotes continuity of existence.

2.1.1 Forming a Corporation

A number of steps will be followed to incorporate Belle:

A lawyer will be hired to incorporate a numbered Saskatchewan company (Belle); Once incorporated, the lawyer will complete Articles of Incorporation and fill out

all necessary forms; The Owners of the company, Natalie and Megan, will sign Article of

Incorporation and submit the forms online; Once forms are submitted online, Bell will automatically receive a business

number from Canada Revenue Agency that will be used for payroll deductions, corporate taxes, and GST; and

As a Corporation, Belle will submit a tax return annually, and an accountant will be hired to do this task.

2.2 Organizational Structure

As an incorporated company, Belle’s organizational structure will include a Board of Directors, full-time sales associates, part-time sales associates, a lawyer, and an accountant. The Board of Directors will consist of Natalie Brandt and Megan Orr, both the owners and managers of the company, who will oversee and manage Belle daily. There will be one full-time sales associate, and the co-owners will look into having seasonal part-time sales associates during peak times of the year as necessary. A lawyer will be hired to help incorporate the company, and an accountant will be in charge of bookkeeping throughout the year.

Figure 2.2 Organization Structure Chart

2.3 Site Plan

Belle will be located in the downtown shopping district of Saskatoon, Saskatchewan, Canada, on 21st Street, between 1st and 2nd Avenue. Opening a storefront located in the central shopping district of Saskatoon will ensure that Belle will have a high traffic of customers coming into the store daily.

Figure 2.3.1 Site Location

7 | P a g e

2.4 Building and Floor Plans

The building that we will be leasing is 1,000 square feet, with high ceilings. As shown in Figure 2.4.1, as you walk into the dress boutique, approximately three mannequins will be showcasing dresses and jewelry currently on sale in both windows. A cash register will be located on a rectangular counter in the middle of the store that is designed to surround the employee completely for accounting safety reasons. Another mannequin will be located to the right-hand side of the cash register. There will also be two jewelry cases situated on either wall.

Figure 2.4.1 Floor Plan

A unique “pulley rope system” will run the remaining length of the building from the fitting rooms to the very front on either side of the store, and these ropes will hold and display all of the dresses. The unique feature of this “pulley rope system” is that the ropes can actually be raised so that the dresses can be seen from above.

A large free-standing mirror will be located out in the open at the back end of the store that customers can use to check out their dresses, and where staff can help customers further accessorize their outfits with jewelry. A small seating arrangement, including two

8 | P a g e

chairs, a couch, and a coffee table will be located near the free-standing mirror, which will accommodate friends and/or family of customers that are changing in the fitting rooms.

As well, the layout of the floor plan will accommodate an office space for staff, a storage room to hold inventory, a washroom accessible to both staff and customers, and four fitting rooms, which will all be located at the back end of the store.

2.5 Flow of Organization

Since Belle is a retail provider, the work plan and flow of the organization is a simple process. The process of work for employees, as well as the product flow of the organization were combined into one chart, and are outlined as follows:

Figure 2.5.1 Work Flow Process Chart

2.6 Quality Control Program

A Quality Control Program, including protocols for each product delivery will be developed and implemented at Belle. First, monitoring for Belle’s products is completed by a quick box inspection by the employee who is working while a new shipment of products is received (most likely a manager), while the deliveryman is still in store. This initial box inspection will include checking for water-damage or torn boxes, and this step must be completed before a manager signs for the boxes. Second, as the boxes are being un-packed and tagged, they will be thoroughly inspected to ensure that all garments and accessories are in top shape with no holes or broken clasps. Upon completing the second set of inspections, all products will be merchandised onto the floor racks. If a damaged product is located, fault will be placed on the delivery service before they vacate the premise, or on the supplier to replace all recorded damaged goods. A detailed record will be kept of all discrepancies for reference and quantity adjustments.

2.7 Organizational Tasks

2.7.1 Operating Hours

The operating hours for Belle are as follows:

Monday and Tuesday: 10:00 AM – 6:00 PM Wednesday, Thursday, and Friday: 10:00 AM – 9:00 PM Saturday: 10:00 AM – 6:00 PM Sunday and Holidays: 11:00 AM – 5:00 PM

Belle will host live concerts that will feature local music talent in Saskatoon on the last Thursday of the month from 6:00 PM – 9:00 PM. There will also be fashion shows subject to run once seasonally with a total of four throughout the year. The seasonal fashion shows will occur after operating hours on either a Saturday or Sunday.

9 | P a g e

2.7.2 Daily Tasks

Both managers will be the first to arrive at the dress boutique. They must arrive one hour before these opening times, since this time will allow for ample time to be spent performing the following opening duties:

Turn on lights and audio system; Open Retail Pro, or a like retail accounting computer software program; Count the cash drawer; Take the deposit from the previous day across the street to the bank (to be

completed by a manager weekly); Straighten and tidy displays (mannequins); Clean all mirrors located in the store; Sweep and mop if necessary.

Generally, both of the managers will open the store, but if a manager is unavailable or sick, then the full-time employee will fill in and perform the opening duties. The full-time employee will have a set schedule to arrive at the store 12:15 PM to assist covering, while the managers go on their lunch break, as well as to be put in charge to work during slow periods of the work day, and to assist with customer service.

All Belle staff will be trained in how to properly close the store at the end of the work-day, but the managers will generally perform this task. However, on late night shifts, both managers and the full-time employee will help with closing to ensure their safety in the downtown location. Closing duties are as follows:

Turn off audio system; Wait for patrons to vacate the store; Close and lock the doors; Sweep the floor; Put away all merchandise and tidy all segments of the store; Write out final hour goals; Balance cash register; Write out a cash deposit for the opening staff member; Turn off lights; Turn on alarm; and Take out the garbage as the staff vacates the store to go home.

As outlined above, when shipments arrive at the store, only a manager can sign for them, but the full-time employee will also be trained in the Quality Control Program protocols. Moreover, all employees are responsible for the following daily tasks:

Greeting all customers that enter the store; Assisting customers in finding the perfect dress and accessorizing the outfit with

jewelry; Carrying items to change rooms while customers continue to shop; Providing customers with helpful insight and suggestions; and Tidying the store and merchandising products.

10 | P a g e

Managers will be in charge of training employees, over-seeing all activities, and ensuring proper protocol and work methods on a daily basis. One manager will be in charge of answering the phone, as well as managing the website, Twitter, and Facebook page, while the other manager will be in charge of picking out, counting, and managing inventory. On days when one of the managers is at a trade show, the full-time employee will be responsible for the daily operations.

2.7.3 Weekly Tasks

Some of the common weekly tasks that will occur at the store include ordering and receiving shipments of stock, performing inventory counts, and taking the deposit to the bank. Weekly sales and customer turnover goals will be created and posted in the office before each shift. These goals will be calculated on an hourly basis and then tabulated for the weekly totals to ensure efficient productivity, instill a strong work ethic among employees, and provide incentives for staff.

2.7.4 Yearly Tasks

During the year, there will be busier seasons at the store than others. Peak seasons are estimated to run May to August for weddings, as well as November to January for the holiday season. Therefore, shipments will be arriving more frequently during these peak times.

At the end of each fiscal year, the accountant will be in charge of completing, running, and analyzing the yearly annual reports to determine the overall performance that year and forecast future performance. Moreover, a competitive analysis will be done in order to make appropriate price changes, and the budget will be modified and updated appropriately. In addition, a new marketing and promotional strategy will be developed for the upcoming year.

2.8 Supply Analysis

New product shipments will typically arrive at Belle bi-weekly, however the frequency of these deliveries will increase around peak season as necessary. These shipments and the rate of the sales will be closely monitored in order to make appropriate adjustments, as well as to be used as a reference point for following years. The uniquely patterned garment bags will be supplied from Retail Bag Company Limited, which will be delivered monthly, and monitored in case these deliveries need to be increased or decreased in frequency. Stationary supplies will be gathered from local stores, since these requirements will be minimal with the small-staffed dress boutique store.

2.8.1 Suppliers

Belle will utilize, yet not be limited to, the following suppliers for their merchandise:

Dresses suppliers will include:

ByCorpus; Cheap Monday;

11 | P a g e

Coincidence and Chance; Dolce Vita; Ecote; Kimchi Blue; MinkPink; Motel; Nom de Plum by Ya Ya; Pins and Needles; Sparkle and Noise; and Sparkle and Fade.

Jewelry suppliers will include:

Cinder and Sage; Adina Mills; Colorstory; Foxy; and Lila Rice.

Belle will take pride in remaining a fashion-forward dress boutique, and will constantly be looking for new suppliers to assist with this endeavor.

2.8.2 Service Providers

Belle staff will include:

2 Managers/Owners (Board of Directors); 1 Full-Time Sales Associate; Potential Seasonal Part-Time Sales Associate(s); 1 Lawyer; and 1 Accountant.

These numbers are for the first year, and will increase according to number of sales and the total customer base. Other services that will be outsources include electrical, plumbing, and computer technical issues.

2.9 Capital Budget

Capital costs for the most part are made up of traditional retail fixtures, such as display cases and mannequins. It should be highlighted that the leasehold improvements will only cost $7,000, and this is because we will updating an existing store front. The construction of four dressing rooms and the installation of a “pulley rope system” make up the majority of the leasehold improvements costs.

Figure 2.9.1 Capital Costs

Capital Budget

Year 1 Year 2 Year 3 Year 4 Year 5Leasehold improvements 7,000 - - - -

12 | P a g e

Furniture and fixtures 11,650 - - - -Computer equipment 3,000 - - - -Total 21,650 - - - -

Refer to Appendix A for a more detailed cost breakdown of capital costs.

2.10 Cost of Sales

Belle estimates that we can sell 20 dresses per day at an average of $100 per dress. Normally, the industry standard gross profit is 55% and we expect to achieve this. As you can see in Figure 2.10, by year 5, providing our sales figures are accurate, we have projected gross profit to be $488,026.

Figure 2.10.1 Cost of Sales

Pro Forma Gross Profit Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 730,000 766,500 804,825 845,066 887,320

Cost of sales=45% (industry standard) 328,500 344,925 362,171 380,280 399,294

Gross profit 401,500 421,575 442,654 464,786 488,026

Sales Estimate Calculation

$100/dress x 20 dresses/day= $2,000/day

$2,000/day x 365 days= $730,000

(Assume a 5% /year increase)

Refer to Appendix A for a detailed cost breakdown of cost of sales.

2.11 Operating Expenses

Approximately 60% of operating expenses at Belle are fixed costs. Since fixed costs are so high, the company is at risk if projected sales are not high enough to cover these fixed costs. However, the largest cost in operating expenses is wages and benefits, which includes $80,000 of salaries to the two shareholders of the company. If sales do not meet the projected targets, the shareholders would forgo these salaries.

Refer to Appendix A for a more detailed look at operating expenses.

13 | P a g e

2.12 Working Capital Planning

2.12.1 Cash

There is adequate cash at start up to ensure that there is a surplus after initial inventories, pre-paid expenses, and capital items have been purchased. Once the business is generating profits, not all of these will be paid out immediately in dividends, but a buffer will be kept for unexpected expenses.

2.12.3 Inventory

On a bi-weekly or monthly basis (depending on the extent of sales at the given time), one of the managers will order inventory. Inventory orders will include both dresses and jewelry, and managers will visit vendors and trade shows to pick out specific products. Belle will have approximately 250 dresses (50 styles of 5 sizes each) and 50 pieces of jewelry (earrings, necklaces, rings, and bracelets) in stock at all times. We hope to have 200 dresses displayed on the floor at all times, with the remaining 50 stored in the back storage room. Inventory counts will occur on a bi-weekly basis.

2.12.4 Accounts Receivable

Since all sales will be paid for by cash or credit card, Belle does not anticipate any accounts receivable.

2.12.5 Accounts Payable

Belle will run an accounts payable system, and we will input invoices as received. Invoices will be paid within 30 to 45 days, as cheques are issued to suppliers twice a month.

2.12.6 Capacity Limits

As previously mentioned, we will be leasing a 1,000 square foot building. In regards to inventory, the capacity will be 300 units for dresses and 100 units for jewelry, including displaying these items on the floor and storing them in the back of the store. The capacity limit for customers is 100, and this is important to know for ticket sales for the various promotional events that Belle will hold throughout the year.

2.13 Environmental Licensing Limitations

There are few limitations on the success of Belle; however, it will be required to possess various licenses. Belle will be required to possess a typical business license, which can be attained from Saskatoon’s City Hall. The only other licensing that Belle will require for operations is a twenty-four hour liquor license for the seasonal fashion shows that will be put on four times each year. Staff and volunteers that will be working the fashion shows must all have server intervention, and it is important that they are checking identification cards of all customers’ purchasing alcoholic beverages to ensure that they are of legal drinking age.

14 | P a g e

3.0 Human Resources Plan3.1 Required Staff

Belle will require a qualified staff for the successful operations and customer service it wishes to provide. In the first year, these positions will include two managers and one full-time sales associate. Additional part-time sales associates may have to be hired seasonally or during peak times of the year. Therefore, it has been decided that for weekly operations, the store will need the following employees:

Two full-time managers; and One full-time sales associate.

3.2 Job Descriptions

3.2.1 Managers

The managers will oversee the company, and are responsible for performing all operational and administrative activities for Belle. These activities are listed as follows:

Planning all procedures and protocols to improve the quality and efficiency of operations;

Supervising staff and in charge of recruiting, hiring, training, and coaching employees;

Creating weekly schedules and daily sales goals for staff; Monitoring and reporting employees performance; Managing information and inventory, including bi-weekly inventory counts; Utilize advanced computer skills with scheduling, payroll, and ordering; Attending trade shows and purchasing products; Securing local bands for live entertainment concerts; Organizing and running seasonal fashion shows; Developing marketing objectives and activities; Finding new vendors and maintaining positive relationships with current

suppliers; and Perform general administrative tasks.

As a manager, it is required that the individual have a university degree or diploma, preferably in commerce or business. Managers must have previous work experience in retail industry (a minimum of two years), and a general knowledge of the fashion sector, including current and upcoming trends and competition in Saskatoon.

3.2.2 Sales Associate

Sales associates, whether full-time or part-time employees, will be responsible for helping managers with any daily operational tasks, meeting daily sales goals, and providing customers with exceptional service. The position of a sales associate will include the following tasks:

Utilize Retail Pro and ring through purchases at the cash register;

15 | P a g e

Fill in daily sales achievements; Assist in training new employees; Follow Quality Control Program protocol; Tag and merchandise products; Assist in merchandising window displays and mannequins; Customer service; and Opening and/or closing the store.

As a sales associate, it is preferable, but not required, that the individual have past experience in retail. It is an asset that sales associates have excellent people skills.

3.3 Recruitment

As staff requirements are needed and job positions open up at Belle, both job descriptions and their qualifications will be posted online using various inexpensive websites, such as Kijiji and Sask Job Shop. Applications will receive a thorough sorting for potential candidates, and both managers will complete this task together. Hiring will be completed as necessary with potential applicants entering an informal interview process. It is important to keep the interview informal and relaxed, as we want all employees to be able to interact with customers in this manner, having conversations rather than uptight dialogue. Interviews will begin with an initial short conversation, and after selecting the top potential employees, only these employees will return for a second interview and reference check. The chosen candidate will be contacted, and if the candidate accepts the position as a sales associate at Belle, he or she will begin the training program and three-month probationary employment period. Applications and resumes from candidates that were not chosen will be placed into a file that will be kept for later reference.

3.3.1 Training Program

Upon accepting employment with Belle, employees will receive a small training booklet. This booklet will consist of company core values, goals and objectives, as well as a list of their basic duties and expectations, dress code, store policies, and other key information.

The training program also involves that employees attend an initial training session. The initial training session will consist of a paid, three-hour shift, and the schedule is outlined as follows:

Introduction or review of Retail Pro (practice looking up inventory and ringing through purchases and returns);

Practice discussion and “typical” questions and answers with customers (review various policies, such as returns and exchanges);

Merchandising tips and practice; and Discuss company core values and culture (pizza and drinks will be provided).

New employees, hired after the initial training session, will be brought into work and trained on the job by one of the managers. These employees will be paid for the three-hour shift, and will also receive the training booklet, as well as delegated the following tasks:

16 | P a g e

Supervised practice and shadow; Review methods after altercations and interactions with customers; Merchandise training during shift; and Specific selling skills during shift.

3.4 Human Resources Strategy

The Human Resources (HR) strategy that we will utilize at Belle will be based on creating a sense of trust among all employees and staff. As a small business, we want to foster a culture centered on a comfortable and friendly environment. The main objective of our strategy is to operate with open lines of communication between all managers and employees. Typically, the line of authority will be centralized, whereby it will begin from the top with the managers/owners and move down to the full-time or part-time sales associates. However, it will be openly communicated that employees are free to talk to any member of the staff if they have questions or concerns about any aspect of the job. Moreover, monthly meetings regarding overall company performance and one-on-one performance evaluations for all staff members (including managers) will be held.

There are certain requirements and policies that all staff at Belle must adhere to at all times. As outlined in the training booklet, employees are encouraged to wear clothing (dresses) or accessories (jewelry) from Belle during their scheduled shift. However, the owners of Belle understand that it is a possibility that not all employees will be able to afford purchasing dresses from the store to wear to work. As such, employees may opt to wear fashionable, black clothing fashionable, preferably dresses. On the other hand, staff must purchase and wear accessories from the store while they work. This will assist in the internal marketing of Belle and its products. As an incentive to purchase and wear Belle clothing and accessories, employees will receive an employee discount of 40% off on all purchases. As well, staff will be allowed to provide a friends and family discount of 15% off purchases.

Since Belle only requires one full-time sales associate in the first year, it is essential that the company find the right fit and fashionable individual for this job. The beginning wage will be $12 per hour, with yearly reviews and wage increases based upon performance.

Staff, including both managers and sales associates, must continually and constantly be further educated in the fashion industry, specifically in relation to new trends and fads in cocktail dresses and accessories. Trips to various trade shows will be made by the managers to give employees an insight on upcoming trends. Belle will target employees that have a fashion-forward sense of style, and who seem to be creative in putting together the “perfect party dress” outfit.

3.5 Shareholder’s Agreement

Each manager will hold 50% of the shared for Belle, and it will be a private corporation.

3.6 Management Team

The management team at Belle will consist of a few key individuals:

17 | P a g e

Megan Orr – Member of the Board of Directors, Co-Owner, and Co-Manager:

o Megan has past experience in retail and customer service. She will complete her Bachelor of Commerce degree majoring in Management at the University of Saskatchewan in April 2013. Megan also has vast experience in event planning, providing her with expert knowledge and opinions for marketing objectives.

Natalie Brandt – Member of the Board of Directors, Co-Owner, and Co-Manager:

o Natalie has several years of experience in retail, most relevantly in the wedding dress industry, along with seven years experience in customer service. She will complete her Bachelor of Commerce degree majoring in Management with a minor in Marketing this December 2012. Natalie has an eye for fashion and takes pride in assisting others in creating the best look for any event.

Combined, their experience in retail and event planning amounts to over five years, making Natalie and Megan the confident choice for opening and operating this business endeavor.

Lawyer – Member of the Board of Directors:

o A lawyer will be hired to incorporate the company. The lawyer will also be in charge of monitoring all practices and providing specific input and legal advice if any issues with the law occur.

Accountant – Member of the Board of Directors:

o Since neither Megan or Natalie have any fundamental experience or knowledge in accounting, it has been decided that an accountant will be hired to manage all accounting duties, as well as to submit various tax forms.

3.7 Human Resources Expenses

Please refer to Appendix A for a detailed breakdown of the human resources expenses for Belle, including salaries, wages, and benefits costs.

4.0 Strategic Marketing Considerations4.1 Industry Overview and Market Analysis

4.1.1 Fashion Industry

The Canadian apparel retail industry has seen a strong, steady growth in recent years and this trend is projected to continue. In 2011, this industry had a total revenue of $26,070.6

18 | P a g e

million, representing a compound annual growth rate (CAGR) of 3.4% between 2207 and 2011 (MarketLine Industry Profile, 2012). The womenswear sector of the Canadian apparel retail industry was the most lucrative in 2011, with total revenue of $13,857 million, equivalent to 53.2% of the industry’s overall value (MarketLine Industry Profile, 2012). However, it is forecasted that the performance of the industry will actually decrease from 2011 to 2016, with an anticipated CAGR of 3.1%.

4.1.2 Saskatoon, Saskatchewan

Saskatoon is constantly expanding and growing, and the current population is estimated to be 260,600 (Statistics, 2011). From the population estimate, the female population in Saskatoon is 132,515, and specifically 35,945 females are between the ages of 18 and 34, which is the target market for Belle.

In 2010, Saskatoon led the country in retail sales growth with a 6.9% increase, and the retail market remained high at a 5.9% increase in 2011, calculated as the third highest in Canada (Colliers International Market Report, 2011). Moreover, retail space in Saskatoon has increased by more than 25% since 2007, and is expected to continue to expand as more retail zones land becomes available (Colliers International Market Report, 2011).

4.2 SWOT Analysis

4.2.1 Strengths

Belle possess the following strengths:

Offers fashion-forward dresses and accessories at a reasonable price; Provides a unique product to customers, since it carries a limited number of

dresses in each style (XS, S, M, L); Located on a main street in the central downtown shopping district of Saskatoon,

which is easily accessible for customers.

4.2.2 Weaknesses

As a start up and new dress boutique to the city of Saskatoon, Belle also possesses some weaknesses:

Target market is limited to females; and It is a risky business since the company is extremely reliant on the critical factor

of customers per day that come into the store.

4.2.3 Opportunities

Belle can take advantage of a number of opportunities:

Large population of females within the ages of the outlined target market; Retail market has increased in the past five years and forecasts for upcoming

years is strong; and Local partnerships can be created with various companies to help with

promotional events.

19 | P a g e

4.2.4 Threats

Along with opportunities, there are also a number of threats that need to be considered:

Number of direct and indirect competition already established in Saskatoon is high;

It is possible that other retail stores could carry similar brands; and Other retail stores currently put on fashion shows, which is a big marketing and

promotional strategy for Belle.

4.3 Competitive Analysis

Currently, the competition for Belle consists of department stores, such as The Bay and Sears, as well as other retailers like Frakas, Le Chateau, and Bryan’s. Below is a summarized competitive analysis chart, which demonstrates how Belle rates in comparison to competitors in three key success factor areas, including price range, selection, and location:

Figure 4.3.1 Competitive Analysis Table

Competitive Analysis

Price Range Selection Location Threat

Level

Frakas $80-$130 Low selection, average quality

183 2nd Ave South, Saskatoon

High

Tonic $100-$150 Average selection, average quality

122 2nd Ave North, Saskatoon

High

Le Chateau $100-$200 Large selection, average quality

Midtown Plaza, Saskatoon

High

Bryan’s $100-$200 Large selection, average quality

Midtown Plaza, Saskatoon

High

The Bay $100-$150 Large selection, high quality

Midtown Plaza, Saskatoon

Low

Sears $100-$150 Large selection, low quality

Midtown Plaza, Saskatoon

Low

Dutch Growers

$50-$100 Large selection, average quality

685 Reid Road, Saskatoon

Moderate

Besides these main competitors, Saskatoon also contains some other indirect competitors for Belle. They consist of other clothing retail stores in Saskatoon that do not specifically focus on providing dresses, including:

20 | P a g e

Jules and Lace; RW & Co.; Guess; Mint Fashion Company; and Manhattan Casuals.

Other potential threats that may harm Belle’s success are Urban Outfitters and Aritzia, which are currently not located in Saskatoon, but offer an online shopping store. Since the two aforementioned stores do not have stores currently located in Saskatoon, Belle does not have any immediate cause for concern; however, they will need to build a strong customer reputation and loyalty if these stores plan on entering the retail market in Saskatoon in the future. Online shopping is a cause for concern in the changing environment of the retail industry. This being said, customers shopping for these particular outfits generally prefer being able to try the products on before purchasing.

4.4 The Marketing Mix

4.4.1 Products

Belle offers customers with high-quality, fashionable dresses for any type of event. Currently, the store is only focusing on providing dresses and jewelry for customers; however, Belle may incorporate other accessories in the future, such as shoes, scarves, and jackets. One of the perks that Belle provides customers with is that there will only be a small quantity of each dress (XS, S, M, L, XL) and pieces of jewelry. Dresses, for the most part, will only be ordered in five sizes for each style.

4.4.2 Pricing

The retail industry in Saskatoon is competitive, and as such, Belle will use a competitive pricing strategy for its products. As the reputation and customer-base for Belle grows, pricing will gradually increase, in response to increases in the inflation factor. The average prices of Belle’s products are the following:

Dresses sold at an average of $100; and Jewelry sold at an average of $30.

Like any retail store, Belle will be required to put various items on sale in order to clear new space for new stock. Belle will be hosting four main sale days, which should be fairly reflective of their non-peak seasons. Two of the main sales will be during the downtown Sidewalk Sale, as well as Boxing Day. These are two great events for Belle to take part in, given their location in the downtown shopping district and the high level of traffic that will be seen on these days. Belle will also be incorporating two additional sale days, one in February and one in September, to attempt to increase sales and store attendance during these slower months. The exact dates will be dependent on the current stock levels in Belle, and will be advertised using the social media.

4.4.3 Promotion

Branding

21 | P a g e

Belle aims to position itself as the dress boutique store that offers the “perfect party dress” so that women can “dress beautiful”. It is our goal to provide fashionable products that will allow women to feel confident in their own bodies; no matter what event they have to attend. Belle will be focusing on providing a small quantity of dresses to assist in maintaining the uniqueness of each piece and to avoid the unwanted “duplicate dresses” at any event.

The best form of advertising is location, location, location! Being located in the central downtown shopping district of Saskatoon provides Belle with this strong form of advertising. Belle will also be implementing radio advertisements on various local radio stations to attempt to target potential customers and spread the word about this new dress store. These ads will be incorporated before Belle’s Grand Opening, as well as before each season fashion shows.

Initial Promotional Objectives

Belle’s tagline “dress beautiful” will be incorporated in all promotional and marketing campaigns. This slogan will be seen on the storefront sign, business cards, garment bags, and all other promotional items. Below is a basic design layout of the business cards, as well as a picture of the re-usable garment bags, which can be purchased at a cost of $2 in stores.

Figure 4.4.3.1 Front Side of Business Card

Figures 4.4.3.2 Back Side of Business Card

22 | P a g e

Figure 4.4.3.3 Garment Bag

23 | P a g e

To assist in spreading the word about Belle, one of the first objectives will be to have either employees or volunteers go to the University of Saskatchewan to stand in Place Riel handing out 15% off coupons to students. As a large portion of our target market, students, along with the use of social media and technology, provides a great incentive for them to utilize word of mouth advertising about the new business. It is also an incentive to put coupons in the Student Handbooks to assist in the awareness of the brand. For the first month of operation, Belle will be displaying a sidewalk sign in front of the store to attract potential foot-traffic into the location.

Promotional Events

Family and Friends Night

The Friday evening before the Grand Opening to the public, Belle will host a Friends and Family Night. This event will be invite-only and all purchases will receive 30% off for all family and friends of staff at Belle. Belle also hopes to create a partnership with Cupcake Conspiracy for this event, who can aid in promoting this event to their current customer-base. This event is being incorporated to assist in spreading the word of mouth about Belle, as well as allowing friends and family to see the new store.

Grand Opening

Belle’s Grand Opening event will occur on the first day of operations, which will conveniently be on a Saturday. Opening a dress boutique on a Saturday is done to encourage foot traffic to come into the store, and Saturday is a very popular day for shopping. Belle will be offering customers between 10% and 30% off of their purchases, which will be determined by a “scratch and win” type of product. Employees will be encouraging customers to “like” us on Facebook and to “follow” us on Twitter, which will again assist in word of mouth marketing. Assuming that a partnership has been established with Cupcake Conspiracy, Belle will offer mini cupcakes to customers for free at the event. Belle hopes to establish partnership terms as follows: cupcakes will be purchased at a discounted price, and Cupcake Conspiracy will promote Belle in their store to customers.

Seasonal Fashion Shows

One of Belle’s main promotional applications will be their four Seasonal Fashion Shows. These shows will present the latest trends and styles for dresses of the current season. Customers can purchase these tickets from Belle for a price of $10 each, in which all proceeds will be donated to a local charity, most likely The Princess Shop. Belle’s fashion shows will be held on a Thursday evening for the following reasons: to help ensure that the target market will be in town, and since Thursdays are not considered a popular evening of the week to make plans with friends and family. Therefore, this will mitigate some of the potential threats of other events occurring at the same time.

Set-up for Seasonal Fashion Shows will involve the following aspects:

Fabric runway will be purchased and placed down the middle of the store; White, foldable chairs will be rented and surround the sides of the runway;

24 | P a g e

The dresses displayed on the ropes along the side walls of the building will be raised so that they are above the heads of customers at approximately 8 feet

o This will prevent customers from spilling on dresses while beverages are being served; and

o The ropes will be lowered after the fashion show is finished so that customers can shop for various looks that were shown during the show;

Beverages, both alcoholic and non-alcoholic, will be offered at the cash register, which will be transformed into a bar; and

Various appetizers, including the Cupcake Conspiracy’s cupcakes, will be positioned around the store.

Below is a diagram of the typical store layout during the Seasonal Fashion Shows. Please note that seating is not to scale, yet representative of where seating will occur:

Figure 4.4.3.4 Seasonal Fashion Show Floor Plan

Belle will be offering a door prize at the Seasonal Fashion Shows as an added incentive for customers to come and check out the event. A photographer will be at the event, and all pictures will be posted on Belle’s Facebook and Twitter pages. The photographer will be “hired” as a volunteer at no cost, and this will most likely be a friend or family member of a staff member at Belle. This event will also be in need of an announcer or perhaps a DJ, which will also be either a staff or family member. As the event expands, it may be beneficial to look at hiring a professional photographer, announcer, and DJ for

25 | P a g e

the Seasonal Fashion Shows; however, it would be necessary to find one looking at volunteering their time and working free of charge for the evening in exchange for recognition and brand awareness at this event. Belle will also need to incorporate models for the fashion shows, but once again these positions will be filled with approximately ten to fifteen volunteers, which will be family and friends of staff. It was decided to use family and friends as models to ensure that Belle is accurately representing real women in their dresses and accessories. Not every woman is a size zero, so we wanted to ensure that we are utilizing different body shapes on the runway. To compensate these lovely volunteers, we will be providing them each with a $25 gift card for Belle.

Live Entertainment

Belle will be hosting Live Entertainment concerts for customers to enjoy once a month. These events will feature locally talented musicians, bands, and artists, who will play on a Thursday evening from 6:00 PM to 9:00 PM. Holding Live Entertainment concerts on a Thursday evening will attempt to attract a large audience in the store with this exciting and unique atmosphere. It is hoped that this increase in attendance will be in part from women shopping in groups, versus alone. When people go to see a live show or concert, they often go with friends or family. Since Belle is providing the live music setting, it is anticipated that more groups of women will come to the store during these periods of time. This will assist in the profitability of those nights as women who shop together generally spend more money than they do if they are shopping alone.

Below is a typical store layout of the store during the Live Entertainment events:

Figure 4.4.3.5 Live Entertainment Floor Plan

26 | P a g e

Charity and Environmentally Friendly Initiatives

As previously mentioned, Belle will be incorporating various charitable aspects as a portion of their corporate social responsibility initiative. All of the proceeds from the Seasonal Fashion Shows will be given to a local charity of Belle’s choice, which will be used as part of an incentive to drive people to this event. The potential charity that Belle would like to support is The Princess Shop.

Belle will also be incorporating a system in which customers can donate dresses that are still in good condition and they will then receive 10% discount off of their next purchase at the store. This will be especially focused near the Christmas holiday season. Once a number of dresses have been donated, Belle will then provide The Princess Shop with the dresses.

As mentioned above, Belle will sell re-usable garment bags, which can be purchased at a cost of $2 in stores. Customers will be encouraged to bring in the re-usable garment bag every time they come shop in the store in order to remain environmentally friendly.

Social Media Platforms

Belle will create a user-friendly website, in which customers can view their products, including both dresses and jewelry. If Belle is profitable and sales continue to grow as projected, the store will consider implementing an online shopping store onto their website. A Twitter and Facebook account will also be created, which will be linked to the website. As Belle receives new shipments of dresses and jewelry, pictures will be taken of each product and posted on both the Facebook and Twitter pages. As well, both the Facebook and Twitter pages will be updated with posts during the Seasonal Fashion Shows and Live Entertainment events. The Facebook account will also be including a promotional campaign in which, for every 100 “likes”, Belle will draw for a prize for one of their customers. Prizes will be either a gift card to Belle, or one of their products (most likely a piece of jewelry). As well, since Twitter is becoming increasingly popular, Belle will utilize the Twitter handle “@BelleDressBoutique”, as well as the following hash tags in order to help with word-of-mouth marketing and instill the store’s slogan and value proposition into the minds of its customers:

#Belle; #DressBeautiful; #PerfectPartyDress; #SeasonalFashionShows; and #LiveEntertainment.

4.4.4 Placement

Location

In order to target the right customers to Belle, the location of the store was thoroughly researched and aptly decided upon. Belle will be located in a leased spaced on 21 st Street, between 1st and 2nd Avenue. This is a prime location for the target market as it is in the heart of the downtown retail district in Saskatoon. This location is positioned just outside

27 | P a g e

of the main shopping mall, Midtown, as well as Galaxy Cinemas, which will ensure high traffic into the store.

Décor

The dress boutique ambiance will incorporate bright colors and lighting, as true to outside lighting as possible. The theme colours for the store will center around a bright pink, grey, and white; colours that are already incorporated into the storefront sign of Belle. The walls will be painted a bright white with light pink accents spread throughout. The flooring will also be a light hardwood color, as to keep true to the new, bright look, and to assist in easy cleaning. Due to the nature of Belle’s products, we will provide four sizable fitting rooms for customers. As demonstrated in the floor plan, the space of the store is not crowded, and provides for ample seating and browsing for customers and companions.

The particular location that Belle intends to lease is already equipped with an office, storage room, and washroom, as well as good lighting, fixtures, and flooring; therefore, the only changes and improvements that need to be made before opening the store include painting the walls, installing the “pulley rope system”, and a few other décor additions. These changes are reflected in our small leasehold improvements budget required.

Market Segmentation

Belle caters to females between the ages of 18 and 34. These customers are prepared to spend their hard-earned money on attire appropriate for whatever event they may have to attend. These customers work for their money, and enjoy spending it on fashionable clothing that assists them in feeling confident in their day-to-day lives. Belle will provide fashion-forward, good-quality products, and will assist in helping every woman to “dress beautiful”. Every woman needs the “perfect party dress” for events during this period of their lives, and Belle intends to provide that for them.

Since our target market ranges from students to young working professionals, it would be unrepresentative to compare these women into one specific class or income level. Below is a population estimate for our market segmentation:

Figure 4.4.4.1 Saskatoon Population Estimate Table

PopulationsSaskatoon Population 260,600Female Population in Saskatoon

132,515

Female population between the ages of 18 and 34

35,945

Female population between the ages of 20 and 29

22,640

28 | P a g e

Target Market

The target market for Belle consists of females that are in need of purchasing a dress, or the “perfect party dress” for a particular event. However, the prime prospect for Belle are females between the ages of 18 and 34 living in Saskatoon, more specifically those looking for a cocktail dress for a fancy event, such as a wedding. These women generally have some sort of secondary education, as well as a full- or part-time job, and as such will have some disposable income to spend on dresses and jewelry. It is important to note that the current dress market in Saskatoon is lacking as it provides either mass-produced dresses or other options that are not dressy enough for certain events, providing Belle with an excellent niche to fill.

Market Needs

This market specifically is in need of the following:

Cocktail dresses appropriate for special events, such as weddings and holiday parties;

Dresses that are not mass-produced or mass-available to the citizens of Saskatoon and residing areas;

Dress that can be purchased at affordable prices; and Retail stores that are open for a wide range of hours for easy accessibility.

Channels of Distribution

The channels of distribution for Belle are quite simple due to its structure as a basic retail store. As such, Belle will deal directly with suppliers by attending trade shows and communicating directly with these vendors, and purchasing dresses and jewelry from them instead of going through a middleman or warehouse.

Positioning Statement

“To the fashionable, young, working woman, Belle is the provider of fashion-forward, high-quality dresses and accessories at an affordable price. Belle offers the “perfect party dress” for any event and will assist in helping every woman to “dress beautiful”.

Below is a competitive positioning chart for Belle, based on two factors, limited quantities and mass-produced dresses:

Figure 4.4.4.2 Competitive Positioning Chart

29 | P a g e

4.5 Customer Value Proposition

The value proposition, as further detailed above, lies in the unique atmosphere and high-quality products that Belle provides to its target market at an affordable price. The Seasonal Fashion Shows and Live Entertainment events will prove to attract customers to the store, which will help build a strong level of loyalty amongst consumers.

4.6 Marketing Expenses

In order to meet the five-year projected sales and revenues, as well as to cover all expenses, the marketing plan is imperative to the success of Belle. Promotional events will include the Friends and Family Night, Grand Opening, Live Entertainment concerts, and Seasonal Fashion Shows. Other promotional expenditures include the sidewalk sign, radio advertisements, coupons, business cards, re-usable garment bags, a website, as well as social media platforms such as Facebook and Twitter. All promotional materials will be utilized as marketing tactics year round. Refer to Appendix A for a detailed breakdown of marketing expenses and events.

5.0 Financial Plan5.1 Financial Breakdown

Please refer to Appendix A for a detailed breakdown of Belle’s financials. The financials consists of an income statement, which includes operating expenses, retained earnings accounts, balance sheet, and cash flow statement. As well, the following schedules are included:

Schedule 1: Economic Variable; Schedule 2: Revenues; Schedule 3: Cost of Goods Sold; Schedule 4: Operating Expenses; Schedule 5: Capital Budget; Schedule 6: Financing Budget;

30 | P a g e

Schedule 7: Debt Amortization; Schedule 8: CCA; Schedule 9: Income Taxes; and Schedule 10: Investment Analysis.

5.2 Risk Analysis

5.2.1 Critical Variables

Belle’s most critical variable is the number of customers per day that come into the store. The company’s profitability and cash flows is extremely sensitive to the number of customers, and thus the average amount of dollars that customers per day spend on Belle products. This critical variable is further explained in the break-even and sensitivity analysis.

5.2.2 Profitability and Cash Flows

As is typical with most start-up businesses, there is a deficit in cash flow in the first year; although from years two through five, it is positive.

Figure 5.2.2.1 Profitability and Cash Flow Table

Cash Flow Statement

For the year ended Year 1 Year 2 Year 3 Year 4 Year 5

Net Income (14,513) 58,846 98,487 117,494 137,990

CCA 2,315 4,122 3,221 2,523 1,981

Operating Cash Flow (12,198) 62,968 101,708 120,017 139,971

5.2.2 Break-Even Analysis

A break-even analysis was done to demonstrate how the critical variable of number of customers per day actually affects the profitability of Belle. Determining how many customers needed per day to break-even was calculated by setting net income to zero. Below is a graph that shows both the break-even and base case, where the y-axis is the number of customers and x-axis is the year. By comparing both lines on the graph, there is a bit of a loss in year 1, but Belle sees a fairly healthy profit coming in (if it can achieve all of the projected numbers.

Figure 5.2.2.1 Break-Even Analysis Graph

31 | P a g e

1 2 3 4 50

2

4

6

8

10

12

14

16

18

20

Base Case cust/dayBreakeven cust/day

Base 12 15 17 14 19Breakeven 13 12 11 11 11

5.2.3 Sensitivity Analysis

A sensitivity analysis was also done to determine how sensitive Belle is to the critical variable of customers per day. As demonstrated in the chart below, the base case of 12 customers per day shows a healthy average 5-year profits and owner compensation for Belle. However, looking at only two less customers per day (10), Belle is in danger of not being feasible. At nine customers per day, Belle is infeasible and must file for bankruptcy. This sensitivity is due to the fact that 60% of Belle’s expenses are fixed, and must be paid on an annual basis. As such, the number of customers per day is extremely critical to the profitability and feasibility of the business.

Figure 5.2.3.1 Sensitivity Analysis Chart

Customers/day Average 5 Year Profits Average Owner Compensation

9 9,632 42,051 - Infeasible

10 32,975 48,509 - Possibly Feasible

11 56,318 56,888

12 79,661 65,266

13 103,003 73,645

32 | P a g e

14 149,689 90,402

5.2.4 Average Owner Compensation

It should be noted that NPV and IRR were not appropriate measures to use when evaluating the feasibility of Belle due to the nature of the business. As such, average owner compensation is used, and can be seen in the chart below. The average owner compensation promises an average of $65,266, and by year 5, the co-owners of the business, Natalie and Megan, will receive a compensation of $100,145. Although we understand that Belle is an extremely risky business due to the sensitivity of our critical variable of customers per day, after reviewing average owner compensation, we have decided to pursue this venture.

Figure 5.2.4.1 Average Owner Compensation Graph

1

2

3

4

5

-

20,000

40,000

60,000

80,000

100,000

120,000

Compensation

40,000 41,000 56,999 88,187 100,145

33 | P a g e

5.2.5 Contingency Plan

If projected sales and profits are not achieved, the two shareholders, Natalie and Megan, are prepared to reduce or even forgo their salaries, which total $80,000 per year until the profitability of the business improves. Moreover, if the business requires further capital, the shareholders are also prepared to loan the company an additional $20,000, which would be accounted for as shareholder loans.

6.0 SummaryBelle is a dress boutique catering to females who need to find the “perfect party dress” for a special event. By offering each style of dress in only five sizes (XS, S, M, L, XL), along with the perfect accessories to complete the outfit will ensure that customers walk out of the store with one-of-a-kind pieces to add to their wardrobe. Being located in the heart of the downtown shopping district in Saskatoon, and holding promotional events, such as live entertainment concerts and seasonal fashion shows, will also foster a unique atmosphere. Although Belle is a risky business due to its critical variables, the financial analysis demonstrates that the company is feasible, and thus this venture will be pursued. Belle has a lot of potential to be a successful business, and we hope to open a dress boutique in order to help women “dress beautiful”!

Works CitedCanada, S. (2011). Saskatoon Populations. Saskatoon: Statistics Canada.

International, C. (2011). Market Report - Saskatoon Saskatchewan. Saskatoon: Colliers International.

Profile, M. I. (2012). Apparel Retail in Canada. MarketLine.

34 | P a g e

Appendix A: Financials

35 | P a g e