Business Plan

A Bun In The Oven Clothing Company

Fashionable Mid-Term Maternity Wear

and More!

Matt Cranston Julie Letendre Kristin Rathaus Tomas Rose Denice Wagner

PRIMARY PURPOSE
The purpose of A Bun in the Oven Clothing Company is to meet or exceed our financial goals by selling maternity clothes over the Internet.

STRATEGY
We will achieve our primary purpose by offering high quality maternity clothes at a good price to our customers. Pregnant women are faced with a unique challenge in finding stylish clothes that provide a good fit. Women who are 1 to 2 months pregnant can probably still fit in their pre-pregnancy clothes, and women who are 7 to 9 months pregnant can probably fit into traditional maternity wear with an expandable panel on pants, shorts, and skirts. However, pregnant women have a difficult time finding clothes to fit in months 2 through 7, and our ability to fill that void is what makes A Bun in the Oven Clothing Company unique. We will offer casual, business casual, and professional-dress clothes. Some items we offer will be able to be used even beyond the maternity period, such as sweater sets, scarves and accessories. In addition, we will sell larger sweaters and sundresses that may also be worn beyond the womans pregnancy. We plan to promote our company in several different ways. First, we will form alliances with other clothing e-tailers that do not offer maternity clothes, such as landsend.com and llbean.com. Second, we will buy advertising on various parenting websites such as babycenter.com and pampers.com. Finally, we will send a supply of $5 off your purchase of $25 or more at abunintheoven.com flyers to OBGYNs so that they can be distributed to expectant mothers. We will achieve profitability by keeping sales volumes high and fixed overhead low. Our website will be inviting to the eye, not too cluttered, but with flare and pizzazz to entice a deeper dive into the site. Some of its features will include a chat room for expectant mothers to share stories and ideas, a simulated model with changeable hair, proportions and clothing choices, and a shopping cart. We will also provide links to other websites who provide advice throughout the duration of the pregnancy.

SUPPORT
Our target market is pregnant, working women in households earning $30,000 to $80,000 per year. An estimated 20 million babies were born in 2001 (according to U.S. Census data), and if that trend continues, there will continue to be a huge market for our apparel. Our primary source of revenue will be the sale of our clothes and accessories. We will also generate revenue by selling advertising space on our website, although this will be kept to a minimum so as not to clutter the site. Expenses will include the following: Marketing/Direct Mail Expenses Website Hosting Fees Website Development Hardware and Software for Employees Salary and Benefits for Employees Cost to Purchase and Warehouse Merchandise We will have another company produce the clothes, process orders, and ship clothes. They will also warehouse the merchandise and accept and process returns. We will attempt to develop a contract with a manufacturer of clothing for another company such as Lands End in order to keep costs down by using some of their excess capacity. We will feature real-time online customer support 24 hours a day. We will hire employees to work out of their homes and work in shifts to provide customer support. Because they will work out of their homes, we will have minimal office expense. We will provide each of our employees with a computer. A Bun in the Oven Clothing Company has an impressive group of people running the company. Each member holds a 20% share.

Organizational Chart
Vice President Communications Tomas Rose Vice President Info. Technology Matt Cranston Vice President Merchandising Julie Letendre Vice President Sales & Marketing Denice Wagner Vice President Finance Kristin Rathaus

Responsibilities Plan, direct, and coordinate all activities related to Internet communications and corporate public relations

Responsibilities Provide technology design and support by converting project specifications into logical useful website

Responsibilities Plan, direct, and coordinate activities of buyers, and related workers involved with purchasing products/services

Responsibilities Set marketing policies and direct Internet sales activities

Responsibilities Plan, direct, and coordinate all financial business activities

BUSINESS MODEL
The model we will use is a Business-to-Consumer model. All transactions will be performed via our website. Items will be shipped out from our selected vendor, and returns will go back to that vendor. Customers will need to go online to print a return authorization form to include with their return. This will enable the management of A Bun in the Oven Clothing Company to identify problems or trends and act on them as quickly as possible.

PROCESS
In order to successfully build our e-business, the following steps need to occur (not necessarily in this order): 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Develop a business plan. Obtain financing. Select manufacturers/negotiate contracts. Register domain name abunintheoven.com. Design a website. Hire customer service personnel. Develop marketing piece to mail out to OBGYNs. Develop alliances with other pregnancy- and child-related e-businesses such as babycenter.com, babiesrus.com, etc. Develop alliances with other online clothing companies that do not offer maternity apparel such as landsend.com, llbean.com, and eddiebauer.com Select a web hosting company. Develop a logo for clothing labels and website. Closely monitor the number of visitor hits on the site to make a forecast of our market potential.

FINANCIALS
A copy of our Balance Sheet, Projected Income Statement, and Start-Up Costs follows:

A Bun In The Oven Clothing Company Balance Sheet 1-Mar-02 (Unaudited)

ASSETS CURRENT Cash Accounts receivable Inventory (Note 1) Due from shareholders CAPITAL ASSETS (Note 2) INTANGIBLES (Note 3) DUE FROM SHAREHOLDERS Total LIABILITIES AND SHAREHOLDERS EQUITY CURRENT Accounts payable (Note 4) Income taxes payable Management fees payable (Note 5) Current portion of long term debt Bonuses payable LONG TERM DEBT (Note 6) SHAREHOLDERS EQUITY Total $250,000.00 $ $ $ $175,000.00 $ 50,000.00 $ $475,000.00

$175,000.00 $ $ 50,000.00 $ $ $250,000.00 $ $475,000.00

A Bun In The Oven Clothing Company Projected Income Statement 1-Mar-02 (Unaudited)
March, 2003 Sales (Note8) Cost of goods sold Opening inventory (Note 1) (Closing inventory) (Note 1) Gross Profit $3,000,000.00 $2,040,000.00 $ $ $ 960,000.00 March, 2004 $3,250,000.00 $2,240,000.00 $ $ $1,010,000.00 March, 2005 March, 2006 March, 2007 $4,250,000.00 $2,800,000.00 $ $ $1,450,000.00

$3,500,000.00 $3,850,000.00 $2,350,000.00 $2,600,000.00 $ $ $ $ $1,150,000.00 $1,250,000.00

Expenses Salaries and wages (Note 7) Hardware and software Printing, mailings Server Hosting Domain Name Insurance Interest Long term debt (Note 6) Total expenses $ 530,000.00 $ 75,000.00 $ 50,000.00 $ 900.00 $ 19.00 $ 2,500.00 $ 20,000.00 $ 678,419.00 $ 557,500.00 $ 25,000.00 $ 52,500.00 $ 925.00 $ $ 2,650.00 $ 19,000.00 $ 657,575.00 $ 586,375.00 $ 616,694.00 $ 25,000.00 $ 25,000.00 $ 55,000.00 $ 58,000.00 $ 950.00 $ 975.00 $ $ $ 2,750.00 $ 2,900.00 $ 18,000.00 $ 17,000.00 $ 688,075.00 $ 720,569.00 $ $ $ $ $ $ $ $ 666,528.00 25,000.00 61,000.00 1,000.00 3,100.00 16,000.00 772,628.00

Income before Taxes Income Taxes 30% Net Income

$ 281,581.00 $ 84,474.30

$ 352,425.00 $ 105,727.50 $ 246,697.50

$ 461,925.00 $ 529,431.00 $ 138,577.50 $ 158,829.30 $ 323,347.50 $ 370,601.70

$ 677,372.00 $ 203,211.60 $ 474,160.40

$ 197,106.70

Note 1 Note 2

Inventory is non-existent because we subcontract out our manufacturing and warehousing. Our capital assets are our start-up equipment. We have no building, property, or manufacturing equipment. Intangible assets primarily include goodwill. This goodwill represents the un-amortized balance of the excess of the acquisition cost over market value of identifiable net assets acquired at the date of acquisition. These are our start-up equipment costs. These were the signing bonuses required to be paid to the top management for their experience and knowledge (goodwill) in e-business.

Note 3

Note 4 Note 5

Note 6 Note 7

Bank loan of $250,000 required to get started at 8% annual interest compounded monthly. Salaries 5 Vice-Presidents @ $50,000 each 10 Customer Assistants @ $25,000 each 1 Fashion Designer @ $30,000 each Total

$250,000.00 $250,000.00 $ 30,000.00 $530,000.00

Everyone receives 5% raises each year thereafter. Note 8 Sales revenue is achieved through clothing sales to the consumer. We anticipate 40,000 orders the first year with the average order value of $75.00.

A Bun In The Oven Clothing Company Start-Up Costs 1-Mar-02 (Unaudited)

We went to the bank with a concept and an idea. We needed financing to cover our startup costs. We knew that we would not receive any revenue for a period of 2-3 month as we got things setup. The Vice-Presidents' wages were paid during this entire time, but the Customer Assistants were hired at the time we went online with our e-business. We also hired a fashion designer at 30K/year for 12 months prior, to get some designs together so our website could be assembled and we could get subcontractor pricing for our clothes to be manufactured. We rounded up the startup costs from $240k to $250K to cover any unforeseen expenses.

Description of expense
Wages for 5 Vice-Presidents at 50K/year for 3 months Wages for 10 Customer Assistants at 25K/year for 1 month Wages for Fashion Designer at 30K/year for 12 months Web page design Computers for 10 Customer Assistants Letterhead, envelopes, etc Server hosting costs Domain Name Liability insurance Total startup costs

Costs
$ 62,500.00 $ 20,833.33 $ 30,000.00 $ 25,000.00 $ 50,000.00 $ 50,000.00 $ 900.00 $ 19.00 $ 2,500.00 $241,752.33