BUSINESS PLAN FOR

BECKYBASHH
FASHION
SUBMITTED

BY

BECKY LADAN
TO
KADUNA BUSINESS SCHOOL
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR
THE
AWARD
ENTREPRENEURIAL FINANCE

Written by
Becky Ladan
Email:

OF

DIPLOMA

IN

INOVATION

AND

TABLE OF CONTENTS
COVER PAGE
TABLE OF CONTENTS
CHAPTER 1
1.0
Executive Summary
1.1
Objectives
1.2
Mission, Vision and value
1.3
Key to success
CHAPTER 2
2.0
Company Summary
2.1
Company Ownership
2.2
Start Up Summary
2.3
Company Location
2.4
Legal Issues
CHAPTER 3
3.0
Business Description
3.1
Industry Analysis
3.2
Business trend/Future need
3.3
Quality of Product
3.4
Affordability Of the product
3.5
SWOT Analysis
3.6
Competitive Comparison
CHAPTER 4
4.0
Market Analysis
4.1 Market Segmentation
4.3 Target Market
4.4 Marketing Strategies
CHAPTER 5
5.0
Human Resource
5.1 Personnel Hiring
CHAPTER 6
6.0
Financial Plan
6.0 Cash Flow Projection
6.1 Income Statement Projection
6.2 Balance Sheet
6.3 Break-even Analysis
6.4 Ratio Analysis
6.5 Conclusion

CHAPTER 1
1.0 EXECUTIVE SUMMARY
BECKYBASHH FASHIONwillsellspecialtybagsshoes.This company will targetcustomerslooking
forcomfortablebagsthatwill fittheir outfit .Besidesspecialtybags, Becky willcarryother leather
products. BeckyCompanywilltargetthegrowingpopulationofthe Kadunaarea.Thisareaiscurrently
unoccupiedbybag making specialists, sonodirectcompetitionwouldbeencounteredinthisarea.The
leather industry isexpectedtogrowat5%annually,sonowisaperfecttimetostartanew specialized
leather bag factory.Indirectcompetitionmightcomefromothergeneralleather factories.However,
BECKYBASHH FASHION willhaveadistinct advantageinspecializedleather bags byoffering
supportiveandquality leather bags. Inordertostartthecompany,aninitialinvestmentofabout
N3,000,000willbeneeded forinventoryandstartupexpenses. Becky companywilllooktoturntheir
N3,000,000
inanetprofitofaroundN 5,000,000attheendofoneyearafteralloverheadcostsand
expenses. Becausethisnetprofitisfairlyreasonableforallthemoneyinvestedinthe company.

1.1 OBJECTIVES

The company as like any other company is to increase its profitability, which hence
needs high revenues and lower cost of production.

To be a market oriented organization with the main focus on the fulfilment of customers
needs.

To satisfy the customer needs with the quality products.

Our aim is to maximize business without compromising on quality.

We are committed to meet the changing demands of an evolving organization.
We aspire to improve quality norms and enhance our product range.

1.2 MISSION
To become the premier manufacturing organization in the leather industry,
gaining market competitiveness and diversifying into value added leather with
clean, well maintained and friendly environment.

1.2.0 VISION
Become the Kadunas largest producer of leather bags by 2020.

1.2.1CORE VALUES

Respect

Honesty

Equality

1.3 KEYS TO SUCCESS

Increase gross margin to more than 40%. Keys to Success

Excellent product and service that will build and maintain customer loyalty.

A business location that will assure high company visibility and a high flow of
customers.

Our commitment to continuous improvement and total quality services.

Increase our sales and expand our current customer base.

CHAPTER 2

2.0 COMPANY SUMMARY

2.1 COMPANY OWNERSHIP
The company is a sole proprietorship ownership structure owned by Mrs Becky
Ladan

2.2 START SUMMARY

The start up cost for this business is minimal. It will begin as a region based
business with little overhead. A 3million naira loan fund is needed to cover the
start-up costs, the borrowed funds will be used exclusively to buy equipment,
based on the list that will be made available. Our cash-flow analysis demonstrates
the company's ability to repay the loan and meet the interest payment
obligations, while maintaining adequate liquidity and generating positive cash
flow, and sufficient cash reserves for unforeseen future events. The following
equipment will be needed for start up operation. Below is a list of equipment
needed:

Raw Materials/Equipment/ machinery:

Total start up fund isN3,000,000. Details are reflected below:

START UP EXPENSES
Rent
Utilities
Transport
Others
EQUIPMENT/TOOLS NEEDED
Machine
Punch Plier
Let Presser
Scissors
Industrial Scissors
Cutter
Generator
Filling Machine
Hammer
Furniture
Brushes
RAW MATERIALS FOR 2
MONTHS PROD.
Oil
Adhesives
Tape
Thread
Accessories
Fibre
Foam
Chain
Marco
Linen
Leather
TOTAL

COST (N)
400,000
20,000
10,000
60,000
500,000
10,000
10,000
3,000
6,000
10,000
18,000
30,000
10,000
400,000
10,000
6,000
24,000
4,000
40,000
50,000
50,000
40,000
30,000
40,000
30,000
240,000
2,051,000

2.3 COMPANY LOCATION

BECKYBASHH FASHION is located in Sabon Tasha of Chikun Local Government Area

in Kaduna State. Because there is availability of basic amenities for the production.
And also a cheap labour and high rate of customers.

2.4 LEGAL ISSUES

The company has obtained the licence to operate. All the needed documents have been
obtained and is therefore legal to operate.

CHAPTER 3
3.0 BUSINESS DESCRIPTION
The business is a leather products namely leather bags & accessories. Use of leather
bags is increasing day by day. Now-a-days fancy leather bags are being used by the
people of even remotest area of our country, because lifestyle has been changing very
fast. Fancy leather products are durable and beautiful to look at in comparison to other
similar products.
We shall purchase finished leather from different suppliers then make the bags according
to the customers demand. At early stage of business we will focus on travelling bags and
handbags, with the passage of time we will expand our product line. In other words we
have defined wallet, belts and shoes as expansion of business.

3.1 INDUSTRY ANALYSIS

There are about 350 leather products manufacturing units in the organized sector in the
country. Total annual installed capacity of these units is estimated to be 15 Million leather
garments (of all kinds) per annum.

3.2 BUSINESS TREND/ FUTURE NEED

Leather product is a fashion symbol for teenager and youth generation in the western
world like USA, Canada, Germany, France and Italy. Now in these days every business is
facing decline due to the global crisis but in future it is predicted that the winter season
period is increasing as compare to the summer. Leather products are treated as fashion
symbol and to protect the bodies against cold. So we have forecast that the future
need/trend is bright due to the above two reasons.

3.4 QUALITY OF THE PRODUCT

The quality of the product is excellent as the type of leather and other equipment are
high quality and the production is of high standard

3.5 AFFORDABILITY OF THE PRODUCT

The product is very much affordable compared with the competitors product.

3.6 SWOT ANALYSIS

3.6.1 Strength

High quality leather is used as raw material

Fashionable, exclusive and unique print designs
Specialized product range
Efficient use of colors and lining material
Quick response to Changing consumer needs and demand
Having large variety of quality products in all sizes
Offers products at affordable prices

3.6.2

Weaknesses

Lower profit margins to compete with already existing leather businesses.

Limited capital for marketing.
Start-up establishment which will take time to implement systems and policies.

3.6.3 Opportunities

Raise brand profile/ customer awareness through advertising and connections to

retailers & local brands
Increase product range
Explore and expand designs
Use innovative stitching methods
Incorporate sustainable elements into designs
Location advantage.

3.6.4 Threats

Time required penetrating market of established clothes boutique

Competition from other leaders in market
Market saturation
Economic recession

3.7 COMPETITIVE COMPARISON

Competitor analysis in marketing and strategic management is an assessment of the
strengths and weaknesses of current and potential competitors. This analysis provides
both an offensive and defensive strategic context to identify opportunities and threats.
The market for leather products is highly competitive. Competitors are very strong in this
business. To give them tough competition I will adopt following strategies.
Price skimming strategy
Cost-cut strategy
Penetration strategy
Positioning strategy
Segmentation strategy

CHAPTER 4
4.0 MARKET ANALYSIS
BECKYBASHH FASHION will distinguish itself from other independent Leather products
producing companies through its products and Marketing plan. BECKYBASHH
FASHION will utilize the success of its products to develop high Profits throughout the

production and sales of its merchandise.

BECKYBASHH FASHION will be targeting distinct groups of fashion-conscious people
professional workers, frequent travellers and housewives. While both groups are
interested in bags, the professionals will also be looking for fashionable bags they are
able to wear with their business attire. The housewives might be looking for
fashionable but simpler bags.

4.1 MARKET SEGMENTATION

BECKYBASHH FASHION is targeting different population segments within the broad

category of the fashion-conscious people with disposable income.

Professionals: these are full-time working professional men and women. They
typically earn more than N 45,000. They will purchase for the workplace, as well
as for leisure time.
Housewives: The household income of this group is N 15,000-N 30,000, generally
toward the higher end of this range.

Table: Market Analysis

Market Analysis
Potential
Customers
Professionals
Housewives/Ladies
Other Travellers
Total

Growth
9%
8%
0%
8.47%

Year 1

Year 2

Year 3

Year 4

Year 5

12,457
14,544
0
27,001

13,578
15,708
0
29,286

14,800
16,965
0
31,765

16,132
18,322
0
34,454

17,584
19,788
0
37,372

CAGR
9.00%
8.00%
0.00%
8.47%

Chart: Market Analysis (Pie)

4.2 TARGET MARKET

Target Markets There are three main target markets for Becky company:
1. Professionals
2. House wives
3. Other Travellers
My target market is made up of those individuals with monthly revenues from N 15,000-N
50,000. The value of the local market will increase both with the formation of new
businesses projected to increase over the coming year and a net increase in
demand from the growth of existing businesses. This demand will be a result of a further
increase in economic output, most of which is generated by small businesses in Kaduna.

4.3 MARKETING STRATEGIES

Different modes of marketing will be tried to make our marketing strategies more
effective.
Following are some of the marketing strategies which the company will use.

Advertisements are used to promote the product, to increase awareness among

the population. To remind consumers of the product. All these purposes of
advertisements will have a direct affect on sales.

Promotions strategies such as price offs and instant gifts are some examples
which will encourage people to buy our bags and gain much more than the
satisfaction of using those bags but instead gain a lot more and worth much more
than the bags of the competitors.
The company will launch a structured long-term plan to optimize its presence in
the wholesale market through initiating a loyalty program for wholesalers across
the country.

CHAPTER 5
5.0 HUMAN RESOURCE
Staffing is on a per-output basis. Sourcing is typically done through repeat hires and
referrals with 2 full time workers with a salary scale of N25,000 per month. BECKYBASHH
FASHION only has one permanent person on the Management Team aside the proprietor.
The years of experience we hope to gain & maintain in both the business and creative
sides of leather designs will enable BECKYBASHH FASHION to generate profitable
revenue for years to come. Our management is expected to use resources wisely,
operate profitably, pay debts, and abide by laws and regulations. Our management
philosophy is based on team work, responsibility, and mutual respect. People who will
work at BECKYBASHH FASHION want to work at BECKYBASHH FASHION because we have
an environment that encourages creativity and achievement.

5.1 PERSONNEL HIRING

I will hire people who can sew leather bags and handbags. For hiring purposes, I will give
add in newspaper and by printing banners. I will hire 5 people for my business with
special sewing skill vested in them.

CHAPTER 6
6.0 FINANCIAL PLAN
The following sections will outline important financial information.
The expenses which I incurred before opening of the shop are:1. Initial investment:

Machines, equipments and furniture: N 1,007,000

Raw materials: N554,000

2. Salary of the employees:

2 Full-time workers= N 25,000 per month.

6.1 PROJECTED INCOME STATEMENT

I have assumes the profits and losses which will be incurred by me in the running
course of business. I have estimated the profits and losses for these years.

INCOME

YEAR 1 (N)
YEAR 3 (N)

YEAR 2 (N)

Sales

9,000,000

11,400,000

14,000,000

Cost of Goods Sold

4,524,000

5,412,000

6,581,000

GROSS PROFIT

4,476,000

5,988,000

7,419,000

Rent

400,000

340,000

600,000

Utilities

240,000

240,000

264,000

Transport

10,000

Other Expenses

120,000

64,000

TOTAL EXPENSES

770,000

644,000

948,000

Net income before tax

3,706,000

5,344,000

6,471,000

EXPENSES

Taxes

14,000

370,600

70,000

534,000

647,100
Depreciation
55,677

30,210

Loan Principal Repayment

1,333,344

666,672

48,844
1,333,344

Loan Interest
66,672

33,336

NET INCOME

66,672

2,605,182
4,368,207

3,361,140

Tax to be paid is 10% of the net profit. Depreciation on Equipment and tools (total Asset
value) are 2%, 5% and 6% respectively.

6.2 BALANCE SHEET

Assets:

Year 1 (N)

Year 2 (N)

Year (N)

Equipment

1,007,000

976,790

927,946

Cash

7,219,642

2,113,275

2,514,430

TOTAL ASSETS

8,221,642

3,090,065

3,442,376

Liabilities:
Rent (Equity)

400,000

340,000

600,000

Loan

3,333,328

1,999,984

666,640

Interest

166,664

99,992

33,320

Net worth

4,321,650

650,089

2,142,416

TOTAL LIABILITIES

8,221,642

3,090,065

3,442,376

6.3 BREAK-EVEN ANALYSIS

BECKYBASHH FASHION is expected to reach break even in the second month of the first

year of operations. With the sales of 30 units. Where each unit sell at N 25,000.

6.4 RATIO ANALYSIS

YEAR 1

YEAR 2

YEAR 3

Return on Investment

4.38%

5.1%

6.48%

Return on Equity

15.9%

18.6%

23.52%

Debt Ratio

23.8%

Current Ratio

37.4%
35%

30.6%
62.2%

62.2%

6.5 CONCLUSION
To have a successful business there are a couple of methods that the business must
consider first.
(1) They must know their target market and by knowing this they have a competitive
advantage that allows them to have an edge on the competitors.

(2) They must also know their value chain which is a series of transactions between all
participants that influences the final product. The value chain is a place where the
businesses need to be in order to identify the needs of its target market.