business ideas: Children's clothing store business plan

* The calculations use the average data for the World

1. SUMMARY OF THE PROJECT

The purpose of this business plan is to justify the effectiveness of the project to open a retail store of children's and teenage clothes in a city with a population of less than 200 thousand people. The target audience of the store will be the population of the city from the age of 3 to 18 years. The store will feature a wide range of children's clothing and accessories. The outlet will be opened in a rented premises with a total area of 100 square meters. meters, on the ground floor of a multi-storey building located on one of the main streets of the city. The store will operate in the “below average” price segment, which is due to the prevailing market conditions: a decrease in purchasing power and a drop in household incomes.

Starting investments in the opening of a children's clothing store will amount to 1.9 million rubles. Source of financing - own funds. Payback period - 27 months. Expected revenue in the first year of operation is 500 thousand rubles, net profit is 58 thousand rubles, return on sales is 11%.

The legal form of doing business will be IP. The taxation form is simplified (“income minus expenses”). The preparatory period for the opening of the project will be 2 months. It is planned to reach the planned sales volumes by 3 months. work.

2. DESCRIPTION OF THE INDUSTRY AND COMPANY

Children's and teenage clothing is one of the three segments of the clothing market (FashionRetail), which also includes women's clothing (which accounts for 51% of the market) and men's clothing (31%). According to 2015 data, the share of children's clothing in clothing retail is about 18% (see Fig. 1). Despite the fact that the clothing market in Russia is not going through the best of times, demonstrating a decrease in volumes (see Fig. 2), children's clothing remains its only growing segment. According to Synovate Comcon, the market growth compared to 2013 by 2015, although it slowed down from 16.5% to 1.6%, but it still exists (see Fig. 3).

Figure 1. The structure of the clothing market in Russia, 2015

Figure 2. Clothing market volume, billion rubles, 2009-2015

Figure 3. Market size of children's clothing 2010-2015 *

* according to Synovate Comcon

In many ways, the market for children's clothing, as well as the market for children's products, helped to keep afloat the increase in prices. In addition, the most common opinion about the causes of crisis resistance in this area among experts is that it is not accepted to save on children. That is, for many parents it is easier to refuse to buy clothes for themselves than to purchase clothes for a child. Nevertheless, the fact is that in times of crisis, the consumer has become more discriminating, approaching the choice of children's clothing more rationally. The second trend is the transition of consumers to cheaper price segments due to reduced purchasing power.

The concept of the project outlined below is to create a children's store operating in the “below average” segment, which is most responsive to market conditions. A children's clothing retail store will be opened in a city with a population of less than 200 thousand people. The store will present a wide range of children's and teenage clothes for children aged 0 to 14 years. The outlet will be located in a rented area of 100 square meters. meters, on the ground floor of a multi-storey building, on one of the central streets of the city.

In our store, parents with children will be able to find good-quality outerwear and underwear at affordable prices and a minimal margin, which will allow them not only to dress the child for school or winter, but also to save the family budget. Children's clothing cannot and should not be expensive - such a statement will underlie the concept of the store. For more information on product margins, see Table. 3 business plans.

The legal form of activity will be individual entrepreneurship on a simplified taxation system. The staffing will be 4 people, including 2 administrators and 2 sales consultants.

The total investment costs in opening a children's clothing store will amount to 1.9 million rubles (for more details, see Table 1). The project will attract its own funds. To open a store, a preparatory phase of 2 months is required.

Table 1. Investment costs of the project

No.	NAME	AMOUNT, rub.
The property
one	Room repair	300, 000
2	Front works	95, 000
Equipment
2	Set of equipment	340 100
Intangible assets
3	Registration and registration	10, 000
four	Advertising before opening	20, 000
five	Rent before opening	60, 000
Current assets
6	Commodity filling	880, 000
7	Current assets	200, 000
Total:		1 905 100

3. DESCRIPTION OF GOODS AND SERVICES

The assortment of the store will be designed for children aged 0 to 14 years. It will include all the main assortment groups of clothes for girls and boys, including outerwear and underwear. The store will operate in the “below average” price segment. The mark-up level for the main categories of goods is given by us in Table. 2 business plans. Clothing will be purchased from a wholesale company working directly with domestic and Turkish manufacturers. Twice a year the assortment will be replenished with seasonal collections (spring-summer, autumn-winter), current collections will be replenished depending on the level of sales (tentatively, also 2 times a year).

Table 2. Average purchase and retail prices

No.	PRODUCT GROUP	Purchase price, rub.	Trade margin, %	Cost, rub.
one	Body, body overalls	355.6	83	650
2	Pants, trousers, leggings	213	64	350
3	Jeans	377	72	650
four	Costumes	468.6	113	999
five	Sweatshirts, tunics, sweatshirts, turtlenecks, sweaters	248.1	81	450
6	Jackets, windcheaters, vests, overalls	580.5	107	1200
7	T-shirts and t-shirts	100.6	99	200
eight	Baby Sets	447.3	79	800
9	Socks, underpants	49	62	79
ten	Pajamas	217.1	61	350
eleven	Dresses and sundresses	410.7	70	700
12	Shirts, polos, blouses	376.1	65	620
13	Shorts and Capri	186	61	300
14	Accessories	49	102	99

4. SALES AND MARKETING

The target audience of the store is families with children. According to statistics, about 70% of buyers are women, since it is they in the family who are most often responsible for purchasing clothes for children. Age from 20 to 59 years. The sphere of interests and occupations does not matter. In terms of income, these are citizens with an income level of “average” and “below average”, that is, for a city with a population of less than 200 thousand inhabitants, this category of citizens makes up the vast majority of the population.

The competitive advantage of the store will be affordable prices and a wide selection of assortment of children's products. The sales plan for the three years of the project is given in Appendix 1. The achievement of the planned volumes of the first year of work (500 thousand rubles) is planned for 3 months. work.

The main means of attracting customers will be the advantageous location of the store and lower product prices than competitors. As additional funds will be used printed handouts, POS-materials directly in the store. To stimulate sales, it is planned to use sales, discounts on the remains of seasonal collections and illiquid goods. Before the opening, an advertising campaign will be held, which will include festive decoration with the placement of banners on the opening date of the store, decoration with balls and ribbons. Distribution of flyers and leaflets is also planned.

5. PRODUCTION PLAN

Children's clothing store will be located in a rented area of 100 square meters. meters, of which 63.5 square meters. meters will be the area of the trading floor, 18 square meters. meters will take a warehouse and utility room, 8.5 square meters. meters - fitting room. The room will require repairs at the rate of 3 thousand rubles. per sq. meter. and front works in the amount of 95 thousand rubles. The store will need to be equipped with retail, cash, anti-theft and other equipment in the amount of 340.1 thousand rubles. A detailed list is given in Table. 3 business plans. Finished products will be purchased from a wholesaler and delivered to a warehouse at the store by a transport company.

Table 3. The list of equipment

No.	Name	price, rub.	Quantity, pcs	Cost, rub.
Trade software
one	Clothes rack	3, 500	20	70, 000
2	Wall shelving	5, 000	12	60, 000
3	Demonstration table	7 500	3	22 500
four	Fitting room with mirror	7, 200	3	21, 600
five	Corner cash register counter	12 500	one	12 500
6	Storage drive	5, 000	2	10, 000
7	Teenage dummy	7, 000	one	7, 000
eight	Children's mannequin	5 500	one	5 500
Other
9	Theft protection equipment (anti-theft system, set of sensors, deactivator)	45, 000	one	45, 000
ten	Cash equipment (including electronic payment terminal)	37, 000	one	37, 000
eleven	Storage rack	2 800	ten	28, 000
eleven	Staff clothing	6, 000	one	6, 000
12	other expenses	15, 000	one	15, 000
Total:				340 100

6. ORGANIZATIONAL PLAN

As the legal form selected IP. The taxation system is simplified (“income minus expenses”). The store will include 4 people: 2 administrators and 2 sales consultants. The duties of administrators will include: monitoring the work of sellers, calculating buyers at the checkout, accounting for cash balances, placing orders for suppliers, and conducting promotional events. Sales consultants will be responsible for servicing and advising clients on the types and sizes of clothing, and will be engaged in the reception of goods and their display on the trading floor. To increase sales, an employee motivation system will be introduced, providing for a bonus of 5% of the excess of the sales plan. The staffing and payroll are given in Table. 4 business plans.

Table 4. Staffing and payroll

No.	Position	Salary, RUB	Number of people	PHOT, RUB
Administrative staff
one	Administrator	22, 000	2	44, 000
Sales staff
	Shop assistant	17, 000	2	34, 000
Total:				78, 000
	Social Security contributions:			23, 556
	Total deductions:			101 556

The preparatory phase is 2 months. It will include: registration of private entrepreneurs, rental of premises, repairs, equipment, hiring staff, merchandise filling and store design, advertising.

7. FINANCIAL PLAN

The investment costs of the project will amount to 1.9 million rubles. For more information about cost items, see Table. 1. business plan. The current costs of the project can be divided into variables, which will include the wholesale price of clothing, and constant. The fixed costs of the store are given in Table. 5. The payback period of the project is 27 months. Expected revenue in the first year of operation is 500 thousand rubles, net profit is 58 thousand rubles, return on sales is 11%. A summary table of all financial indicators for the three-year period of the store is presented in Appendix 1.

Table 5. Fixed costs store

No.	NAME	Amount in months, rub.
one	Rent	30, 000
2	Selling expenses	12, 000
3	Bookkeeping	6, 000
four	Depreciation deductions	5, 700
five	Utilities	2, 000
6	Management expenses	1, 000
Total:		56, 700

8. RISKS AND WARRANTIES

To ensure the viability of the project, it is necessary to take into account the external and internal risks of this business. External risks include all threats that are not related to the process of organizing a business (economic situation, natural disasters), and internal risks include management efficiency. In Tab. 6 presents the main types of risks, measures to prevent and eliminate their consequences.

Table 6. Possible risks and ways to prevent them or their consequences

Risk factor	Probability of occurrence	Severity of consequences	activity
External risks
A sharp decline in the solvency of the population due to the deteriorating situation in the economy	low	high	Work in an affordable price category, analysis of demand, identification of the most popular positions and emphasis on them, cost reduction, negotiations with lessors to reduce rents
The increase in the cost of production due to an increase in the exchange rate, political measures, etc.	average	high	Optimization of budget expenditures, increase in retail price, change in procurement policy (increase in procurement to reduce wholesale prices, search for new suppliers)
The emergence of direct competitors	average	high	The presence of a unique trading offer, the presence of a loyalty program: accumulative cards, discounts for regular customers, receiving feedback from customers, conducting PR-actions
Decrease in relevance of sales (influence of fashion, trends)	average	average	Monitoring the market situation, tracking trends, analyzing consumer behavior, conducting surveys, identifying running positions through trial purchases
Rent increase	low	average	Coordination of all payment terms in the lease, assistance of a lawyer in resolving the issue, conclusion of a long-term contract at a fixed rate in rubles
Decrease in sales due to seasonality	high	low	Discounts and sales of old collections in off-season, promotions
Theft Losses	average	low	Installation of anti-theft equipment, use of anti-theft sensors, security alarm
Emergency / natural disaster	extremely low	high	Security / fire alarm, insurance
Internal risks
Ineffective procurement policy, overstock	low	average	Knowledge of the market and main trends, identification of the most popular product positions, monitoring of competitors
Choosing the wrong pricing policy	low	high	Regular analysis of demand and maintaining current value, constant monitoring of prices from direct competitors
Outflow of customers and decrease in sales due to unskilled staff	low	average	Hiring staff with experience in a similar field of activity, conducting a probationary period, constantly working to improve the level of service, creating a system of motivation and fines, encouraging the best employees
Wrong Merchandising	low	high	The presence of professional competencies in merchandising for a business initiator, hiring professional merchandisers, analysis of buyers' behavioral motives