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Business Plan

OWNERS The fashion dignified..

Krishanu Bose Nitin Verma Sharique Siddique Hijab 175,100 feet road, Indiranagar Bangalore-560036 Telephone 09342720786 E-Mail info@hijab.com

I. Table Of Contents

Page 2 of 23 I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. Table of Content.02 Executive Summary................03 General Company Description...............05 Products and Services07 Marketing Plan..............09 Operational Plan14 Management and Organisation..............17 Personal Financial Statement18 Startup Expenses and Capitalization.19 Financial Plan20 Appendices21 Refining the Plan...22

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I.

Executive Summary

Our product will quench the fashion thirst of the muslim world as well as bolster their religious faith. The prime target will be the affluent muslim women and slowly we will target for mens and kids wear. Krishanu Bose, Nitin Verma and Sharique Siddique are the founders of Hijab, The fashion dignifiedstores. Muslim women are like any women around the world: they love fashion and love shopping, Muslim fashion industry would be worth $96 billion if half of the worlds 1.6 billion Muslims spend just $120 a year on clothing, according to French Fashion University Esmod in Dubai. High-end designers such as Hermes and Gucci are also trying to break into the Muslim market with scarves and other products, said Tamara Hostal, director of Esmod Dubai. As Muslim women have become more affluent in the last decade or two, Islamic fashion has evolved into a lucrative industry. Asianews, May 22-28, 2009. A University of Calicut survey suggests that across Keralas northern (Muslim-dominated) region, pardah increased from 3.5% in 1990 to 32.5% by 2000 (cited in Basheer 2003). We observed in 20024 around Calicut city a far higher percentage: perhaps around 50%, with 90% usage in the old Muslim area of the city, Thekkepuram. Hoorulyn and Lamia. According to De Jong, who undertook interviews with managing directors of both companies, Hoorulyn has increased its sales since its inception in 1992 from 100 dresses to 10,000 by 2005. The market is still in its nascent stage and there is a great potential to exploit. To start a store at an area like Indranagar in Bangalore we will need at least Rs.25 lacs to pump in for the first year. For that we will invest 15 lacs on our own and for rest seek a loan from the Young entrepreneur loan scheme by the govt. Rs. 6 lacs is the minimum annual expected rent, Rs. 4 lacs for the store setup and outdoor advertising, Rs. 10 lac for inventory and the rest of the amount (Rs. 5 lacs) will be used as the working capital. Thereby, investing in the muslim fashion segment and being the pioneer in Bangaluru we ensure a positive surge for too awaited fashion alternative for the muslim world. By providing designer wear through a push

Page 4 of 23 promotional strategy and reasonable prices we can have higher turnovers and returns, hence a positive flow to payback the debt at its earliest.

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II.

General Company Description

Vision: A fashion-wear for the muslim world that abides by its ethics. Mission Statement: Keep the customer keen by innovating the product within the set
Islamic parameters

Company Goals: To be the authentic and trusted Islamic fashion wear brand as per the
Islamic values.

Objectives: To achieve a profit of at-least 25%-35%. To open at-least one store per year in all
the regions where muslims are in majority and fulfilling their needs.

Business Philosophy: To keep the basic values and ethos intact while keeping the
customers guessing what will they get next within those set parameters.

Target Group: The prime target is the affluent class and when strengthened it will be
marketed for men as well as kids.

Future Prospects: Its a highly growing industry as there is a significant muslim population
which is untapped, yet to be exploited. Its demographics are shifting towards the service class which is educated and aware of the world fashion stage. These changes will lead to a craving for fashion and our brand will be there to hit the right chord at the right time.

Personnel Strength: Being the first of its kind the advantage of early bird catching the
worm will be one of the strengths of our company. Promotion through religious channels, word of mouth publicity through mosques and the desire of the Indian customers to look different at each event/festival will be the opportunities. Sharique one of the founders being a muslim know the needs of the target customers and as he has manufactured readymade womens wear, He knows the cost technicalities and market terms with the wholesalers and retailers. Nitin Verma has done post graduation in journalism, and has a management degree from NIFT, therefore can handle the marketing section.

Page 6 of 23 Krishanu Bose, a textile engineer can head the sourcing and quality control department diligently.

Legal form of ownership: Partnership as it is helpful in pooling of funds, experience and

skills.

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III. Products and Services

These are the few examples of the products we will deal in.

Competitive advantages:

Page 8 of 23 1. Being first of its kind. 2. Differentiated new product. 3. New market segmentation. 4. Emotional and religious attachment of the customer. 5. Can start with lesser investment as the target market is niche.

Competitive disadvantages:
1. Islamic fashion is still not defined comprehensively. 2. Products have to be adapted to Indian taste from that of the east. 3. Competitors may learn from our mistakes and can enter the market later with improved marketing mix. As far as pricing is concerned it will be slightly higher as it will be a designer brand but it will be reasonable for the quality it will provide.

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IV. Marketing Plan

Market research - Why?
No matter how good your product and your service, the venture cannot succeed without effective marketing. And this begins with careful, systematic research. It is very dangerous to assume that you already know about your intended market. So we need to do market research to make sure were on track. We will use the business planning process as our opportunity to uncover data and to question our marketing efforts.

Market research - How?

There are two kinds of market research: primary and secondary. We are doing secondary research using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. Information is also available in public libraries, industry associations, chambers of commerce, from vendors who sell to our industry, and from government agencies. We started with our college library. There are more online sources than we could possibly use. Our chamber of commerce has good information on the local area. Trade associations and trade publications often have excellent industry-specific data. For primary research we are doing our own traffic count at a proposed location, using the yellow pages to identify competitors, and doing surveys or focus-group interviews to learn about consumer preferences. Professional market research can be very costly, so we are doing a research on our own.

Economics
Facts about your industry: There are 874,600 muslims in Banglore alone. census of india report 2001. We want to capture the 60% percent affluent class only. Currently these people are importing from Dubai other gulf countries.

Page 10 of 23 Hoorulyn an existing brand in kerala has increased its sales since its inception in 1992 from 100 dresses to 10,000 by 2005. A University of Calicut survey suggests that across Keralas northern (Muslimdominated) region, pardah increased from 3.5% in 1990 to 32.5% by 2000 (cited in Basheer 2003). Barriers to entry we can face o High capital costs o High production costs o High marketing costs o Consumer acceptance and brand recognition

Customers
Age Gender Location Income level Social class and occupation Education Other 15-45 yrs Female Banglore above 3 lacs p.a. Elite class (working and non-working) Majority educated Modest and elegant woman

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Competition
There is no such competition in Bangalore accept for the unorganized industry and two brands of Kerala: Hoorulyn and Lamia. In the final column, estimate the importance of each competitive factor to the customer. 1 = critical; 5 = not very important.
Table 1: Competitive Analysis Factor Me Dresses and accessories 400-2500 Good Excellent Loyalty card schemes New brand New brand Own designer New brand * * * * * * Strength Weakness Competitor A * * * Dresses 4000-6000 Imported fabric No Indian adaptation No such schemes Well recognized Well recognized Imports ready made Well recognized Competitor B Scarves and hijabs only 1500-2500 Good Average Good PR Well recognized Well recognized Local tailors Well recognized Importance to Customer 1 3 2 3 4 4 4 3 4

Products Price Quality Selection Service Reliability Stability Expertise Company Reputation Location Sales Method Advertising Image

Bangalore Online and brick n mortar New channels like mosques New brand

* * * *

Kerala Brick n Mortar Old methods Well known

Kerala Brick n Mortar Old methods Well known

3 3 3 2

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Strategy
Promotion
We will use religious channels for tv advertisements. For print media we can distribute brochures in the mosques on Fridays and can subscribe in Islamic Magazines as well as other lifestyle magazines as this a fashion brand catering to muslims. We can use the gen next media viz Facebook and Tweeter for a wider impact. We want to position our brands image as elegant, sophisticated, sincere and up to date women. In addition to advertising, we have plans for graphic image support. This includes things like logo design, cards and letterhead, brochures, signage, and interior design (if customers come to your place of business). We will have a system to identify repeat customers and then systematically contact them.

Promotional Budget
3 to 4 lacs Before startup: Rs. 2 lacs Ongoing: Rs. 1-2 lacs

Pricing
For most small businesses, having the lowest price is not a good policy. It may rob us of needed profit margin; customers may not care as much about price as one thinks; and large competitors can under price us anyway. We will do better to have average prices and compete on quality and service. Our pricing strategy fits with what was revealed in our competitive analysis. Our prices are lower but not too much.

Page 13 of 23 Price is not so important for the high class but the quality and service. Some of the customers can go for price but the quality we provide and the average price will win them. We will provide loyality cards and schemes.

Proposed Location
Indranagar or Fraser town. It is a very popular and high end market place. The traffic and walk-ins will be high. It is convenient with ample parking space, Interior spaces, and not out of the way. Fraser town is consistent with our image. It is what customers want and expect.

Distribution Channels
Retail Direct (mail order, Web, catalog)

Sales Forecast
1) The "best guess", which is what we really expect Rs. 50,000 a month 2) The "worst case" low estimate that we are confident we can reach no matter what happens. Rs. 20,000 a month.

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V.
surrounding environment.

Operational Plan

Explain the daily operation of the business, its location, equipment, people, processes, and

Production
Our products are produced in Delhi due to the cheap labour and related industry. Our methods of Promotion Production techniques and costs Quality control Customer service Inventory control Product development Assembly line and over head cost mehod ISO certification Close relations with customers RFID and software protection Delhi based design team

Location
Physical requirements: Amount of space Type of building Zoning Power and other utilities 1000 sq. ft. Retail mall space High traffic zone Consistent and regular

Access:
Our location is convenient to transportation in Bangalore and to suppliers in Delhi. We need easy walk-in access.

Page 15 of 23 There is enough space for parking and proximity to freeway, airports, railroads, and shipping centers. Our business hours will be 10 am to 10 pm. Construction: Most new companies should not sink capital into construction.

Legal Environment
Describe the following: Licensing and bonding requirements for expansion through franchising Health, workplace, or environmental regulations ISO certifications Special regulations covering your industry or profession ISO Insurance coverage TATA AIG Trademarks, copyrights, or patents (pending)

Personnel
Number of employees 14 Type of labor (skilled, unskilled, and professional) For professional we three and Merlyn Andrews from NIFT as Design Head For skilled sales force Bangalore placement firms. For unskilled outskirts of Delhi. Training methods will be there. Sharique Siddique at production and distribution. Nitin Verma at marketing and retail.

Page 16 of 23 Krishanu Bose at fabric procurement and quality control. We have schedules and written procedures prepared. We have drafted job descriptions for employees. For certain functions, we can use contract workers in addition to employees.

Inventory
We will keep inventory in the form of raw materials, supplies and finished goods. Average value in stock will be around 8 lacs. Rate of turnover we expect to be around 3. Seasonal buildups as Eid-ul-Fitr and Eid-ul-Azha Lead-time for ordering will be 45 days to 60 days.

Suppliers
We can get enough suppliers for fabric and trims in markets like Nehru Place and Gandhinagar in Delhi. We have more than one supplier for critical items as trims like zips, buttons etc.

Managing Our Accounts Payable

This helps you plan whom to pay and when. Paying too early depletes our cash, but paying late can cost us valuable discounts and can damage our credit. A payables aging looks like the following table.
Total Accounts Payable Aging Current 30 Days 60 Days 90 Days Over 90 Days

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VI. Management and Organization

Nitin Verma will look after a day to day advertising and marketing with his experience in journalism he can handle it better. Sharique Siddique will head the production and accounts department as he has a commerce background with a five year experience in readymade womens wear manufacturing. Krishanu Bose has a textile degree, he can procure the fabric and trims at his best and keeping the quality intact. Merlyn Andrews brought up in Saudi Arabia and did her designing in Dubai is familiar with the needs and tastes of muslims to blend it with the international fashion.

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VII. Personal Financial Statement

Personal financial statements of the owners with total assets and liabilities will be provided to the banker at the time of loan form filling and legal formalities.

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VIII. Startup Expenses and Capitalization

We will have many startup expenses before we even begin operating our business. We will estimate these expenses accurately and then plan where we will get sufficient capital. This is a research project, and the more thorough our research efforts, the less chance that we will leave out important expenses or underestimate them. There are two ways we will use to make allowances for surprise expenses. The first is to add a little padding to each item in the budget. The problem with that approach, however, is that it will destroy the accuracy of our carefully wrought plan. The second approach is to add a separate line item, called contingencies, to account for the unforeseeable. We will talk to others who have started similar businesses to get a good idea of how much to allow for contingencies. If we cannot get good information, we will go by a rule of thumb that contingencies should equal at least 20 percent of the total of all other start-up expenses. All three partners will bring 5 lacs each and profits will be divided in the capital ratio. Rest 10 lacs will be raised as debt. Profits will be distributed after all indirect expenses , interests and taxes.

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IX. Financial Plan

12-Month Profit and Loss Projection
Sales will be higher in the months of Ramdan and before both the EIDs and a higher profit margin is expected with sales hopefully reaching to Rs. 1 lac in these months. But at time of Muharram month weddings will not happen and muslims will rarely buy dresses so the sales will be low and reductions and discounts will increase.

Four-Year Profit Projection (Optional)

We expect to open one outlet per year by plugging back the profits and raising further debt along with equity. So for the next four years we want at least three more stores working.

Projected Cash Flow

We have a cash sales and another with credit cards. But the funds tends to flow immediately and for suppliers we can purchase on credit terms of 45 to 60 days. Monthly expenses will be like rent, electricity, salaries etc. Other expenses will vary with our production levels. We will track essential operating data, which is not necessarily part of cash flow but allows us to track items that have a heavy impact on cash flow, such as sales and inventory purchases. We buy fabrics and trims six months in advance so we need 40% money to book the order in advance and 60% after 45-60 days of receiving the material. Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements but definitely do take cash out. We have a provision for these And of course, depreciation does not appear in the cash flow at all because we never write a check for it.

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X.

Appendices

These documents will be included when it will go to the banker for loan sanctioning. Brochures and advertising materials Industry studies Blueprints and plans Maps and photos of location Magazine or other articles Detailed lists of equipment owned or to be purchased Copies of leases and contracts Letters of support from future customers Any other materials needed to support the assumptions in this plan Market research studies List of assets available as collateral for a loan

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XI. Refining the Plan

The generic business plan presented above can be modified to suit our type of business and the audience for which the plan is written.

For Type of Business Manufacturing

Planned production levels can be set up Anticipated levels of direct production costs and indirect (overhead) costs compare to industry averages. Prices per product line Gross profit margin, overall and for each product line Production/capacity limits of planned physical plant Production/capacity limits of equipment Purchasing and inventory management procedures New products under development or anticipated to come online after startup

Retail Business
Company image Pricing: o Explain markup policies. o Prices should be profitable, competitive, and in accordance with company image. Inventory: o Selection and price should be consistent with company image.

Page 23 of 23 o Inventory level: Find industry average numbers for annual inventory turnover rate (available in RMA book). Multiply your initial inventory investment by the average turnover rate. The result should be at least equal to your projected first year's cost of goods sold. If it is not, you may not have enough budgeted for startup inventory. Customer service policies: These should be competitive and in accord with company image. Location: Does it give the exposure that you need? Is it convenient for customers? Is it consistent with company image? Promotion: Methods used, cost. Does it project a consistent company image? Credit: Do you extend credit to customers? If yes, do you really need to, and do you factor the cost into prices?