business plan of a boutique house

Part# 1

Business Plan of Inter fashion Boutique

1. Executive Summary

This report focuses on the different compensation practices designed by our own established

company called Inter fashion Boutique for different levels of employees. In this report we

have discussed about the organization, its vision, mission, product and service offerings, its

organogram and the total compensation package we offered. We have also focused about the

financial projections of our organizations with cash flow, total capital, balance sheet etc. Here,

we can try to find out that what determining factors are affected our compensation programs in

our country perspective, because compensations system varies country to country. While

determining compensations, we must consider our other competitor position and market trends.

So comparing to other rivalry we try to determine our compensation and other allowance with

basic pay, because our company is a retail organization. Then we analyzed the non-compensation

program from the perspectives of both the employees and the employers. Later, we came up with

few recommendations of our own business that can utilize to enhance its employee satisfaction

which increase its productivity. We think that at last our effort will bring fruitful ending. So we

offer our product in a different way and it creates a unique position of our brand to the target

customer. Recently we Plan to run 1 outlays and expand 3 more outlays in Dhaka city,

Siddheswari (First branch), Bannai branch(Proposed). And the other two branches in

Dhanmondi(Proposed). We are planning to establish 3 more outlays in Chittagong and Rajshahi.

We are also trying to expand our business in out of the country. At present we hope to capture the

40% of the market share in this sector (Estimated). Though we have some limitation but we are

sure that we can be able to overcome that and touch the number 3 position providing better

compensation package.

2. Description of the company

Name of the company Inter Fashion Boutique

Time of Establishment- 15, january,2016.

Type of Business- Fashion and Jewelry Business.

Total Branch- 4(1st at siddeshwari in 2016, 2ND

in Dhanmondi in 2016. Banani and Rifles' square in 2017)

Location- E-mail- Website-

34/B Mailbagh Chowdhury Para Khan Villa, Dhaka-1219. [email protected] http://www.interfashionhouse.com/

Founder- Sonia Akter, Tania Ahmed,Susan Farabi, Jufrin Akter and shahidul Islam.

3. Mission statement:

This Company wants to succeed through a strong customer loyalty. For this, it has a mission and

vision. Vision is a long term outlook of an organization which is possibly impossible to achieve.

On the other hand, Mission is that part of vision which can be practiced or implemented. The

vision and Mission of INTER FASHION BOUTIQUE are given below

Vision: Inter Fashion Boutique has a vision to establish them as Bangladeshs leading famous fair

trade fashion house, and to remain market leader. Throughout its business.

It expanded its business in international arena. Inter fashion house has a dream to develop

more artisans of Bangladesh and make them self-dependent and attract more and more

international customers towards Bangladeshi culture.

Mission: To become one of the 3rd business tycoon in this sector of Bangladesh.

Providing Modern and latest designed clothing for men and women.

To maintain and expose the traditional culture of Bangladesh.

Creating loyal customer by fair pricing with quality product
mailto:[email protected]://www.anjans.com/http://www.anjans.com/

4. Organizational structure:

Other employee

Designer 30

Sales personnel 52

Production supervisor/cutting master 40

Tailors and others 33

Total employee 155

Managing

Director

Chief

operating officer

General Manger

Finance &

accounts

Manager

Marketing

Deputy General

Manager

HR and training

General

Manager

Administrative

and services

ve

General

Manager

Design

Assistant

manager

Merchandizing

Senior

manager

Quality

control

Senior

Manager

Information

technology

E-commerce

Executive officer

Inventory

control

Inter

Fashion

Boutique

Dresses

Customers

TK

Figure: Financial Model

Inter

Fashion

Boutique

Delivery Profit

5. Product offering:

1. Mens clothing and Accessories

2. Womens clothing and Accessories

3. Kids clothing and Toys

4. Shoes (for men, women and kids)

5. Home Dcor

6. Office Accessories

7. Books and Stationery

8. Nakshi Kantha

9. Wedding Clothing and Accessories

10. Jewellery

11. Taaga

6. Financial structure:

Inter Fashion Boutique is financially strong. Its a partnership firm. It is not public limited

company so its still does not offer shares to the public and it does not published its annual

financial report to the public. It earns approximately 70% profit annually.

Financial objectives:

To attain 95% sales growth rate by the year 2019.

To lever up the business at year 2018.

To attain net profit margin of 80% in 2016, 85% in 2017 and 90% in 2018.

To offer quality products at a competitively lower price.

To maintain strong cash flow balances.

Capital requirements:

It started with 1, 00, 000, 00 taka. Its a partnership firm. There are six partners. All are invested

taka 70, 00, 000. And rest 30, 00,000 taka invested from the bank.

Investment from own source:

Investors Amount (Taka) Sonia Akter (20%) 14,00,000

Tania Ahmed (20%) 14,00,000

Jufrin Akter (30%) 21,00,000

Susan Farabi (15%) 10,50,000

Shahidul Islam (15%) 10,50,000

Total Tk. 70,000,00

Investment from Bank:

We take a long term loan from BRAC Bank, 13, 00,000 taka at the interest rate of 16.5% but

from this year we will pay interest rate at 17%.

Interest rate of bank loan:

Interest rate

2016-20 16.5%

2021-24 17%

Short term financing needs (1 year):

Monthly expenses: Shop rent, equipment purchase, workers wages, phone bills etc.

Inventory needs

Promotional needs: Advertisement, magazine, newspaper, internet etc.

Cash flow problem

Raw material purchase: Cloths.

Operating expenses

Other expenses

Long term financing needs (10 years):

For these types of needs we took bank loan:

Capital formation

Business startup cost

Long term marketing activities

Expansion of facilities

Machinery purchase

Start-up requirements:

Start-up expenses

Legal TK 3,00,000

Rent TK 5,00,000

Insurance TK 200,000

Setup fixture TK 3,00,000

Equipment TK 10,00,000

Other TK 4,00,000

Total start-up expenses TK 27,00,000

Start-up assets TK 10,00,000

Cash required TK 5,00,000

Start-up inventory TK 4,00,000

Other current assets TK 5,00,000

Long term assets TK 15,00,000

Total start-up assets TK 39,00,000

Total start-up requirements TK 66,00,000

Start-up funding:

Start-up expenses to

fund

27,000,00

Start-up assets to

fund

39,00,000

Loans 30,00,000

Investment 70,00,000

Intra Fashion Boutique

Cash flow statement

(Estimated)

For the year ended 31st December, 2016

Particulars Tk. Tk.

Cash at hand(beginning of the year) 5,00,000

Cash flow from operations activities:

Cash receipt from customer 30,00,000

(-)Cash paid to suppliers and employees(8,33000+200,000) 25,00,000

Cash generated from operations 5,00,000

Cash flow from Investment Activities

Addition to equipment 15,000,00

Purchasing securities 10,00,000

Net cash flow from investment activities (25,00,000)

Cash flow from Financial activities

Borrowing 30,00,000

Net cash flow from financial activities 30,00,000

Net increase in Cash at hand Tk.15,00,000

Inter Fashion Boutique

Income Statement (Estimated)

For The Year Ended December 31, 2016.

Dr. Cr.

Revenues:

Gross Revenues (including INTEREST income)

95,00,000

(-)Expenses:

Advertising

500,000

Salaries 42,84000

Legal & Professional Services 3,00,000

Rent 3,00,000

Materials 1,71,000,

Office expenses 1,00,000

Utilities 2,00,000

Commissions 5,00,000

Bank interest 4,95000

Interest of capital 7,00,000

Entertainment 1,00,000

Insurance 2,00,000

Sales transportation 150000

Total Expenses: 80,00,000

Operating Income-(2100000-1475000) 15,00,000

(-) Provision for income 1,50,000

Net Income= Tk.13,50,000

Inter Fashion Boutique

Balance sheet

(Estimated)

For the year ended, 31st December, 2016.

Particulars Tk. Tk.

Assets:

Current Assets:

Cash 15,00,000

Bank Balance 10,00,000

Ending inventory(Finished Products) 5,00,000

Sundry Debtor 4,00,000

Advance expenses 1,50000

Other current Assets 5,00,000

Total current Assets= 40,50000

Investment(Long term) 15,00,000

All Fixed Assets 35,00,000

Goodwill 9,50000

Primary expenses 20,000,00

Total Fixed Asset 79,50000

Total current and fixed Assets Tk.1,20,000,00

Capital and Liabilities:

Current Liabilities 5,00,000 Long term liabilities 30,00,000

Provision for income 150,000

Total liabilities 36,50000

Capital 7,00,000

(+) net income 13,50000

Total Equity 83,50000

Total Capital and liabilities Tk.1,20,00,000

7. Marketing activity:

A pioneer in the country's craft industry, Inter's unique product designs have brought consumer

attention back to crafts and materials indigenous to Bangladesh, as its designers blend the

traditional with the contemporary in a way that continues to win consumer appeal. Its success

revolutionized trends and virtually created the market that has now been taken up by countless

other boutiques and brands. Inter caters to this growing urban consumer base through outlets in

every major city in the country. Their discerning style and high-quality craftsmanship make

every Inter product unique and demand for them has been consistently rising due to Inter's focus

on innovation, quality, value-based pricing and superior in-store customer service. All these

elements, backed by a robust distribution network and strong supply chain, have made Inter a

true household brand in Bangladesh. Just as Bangladeshis living abroad look to Inter for products

that connect them to their heritage, the Inter experience is an essential part of any trip to

Bangladesh by foreign visitors a phenomenon chronicled in the "Lonely Planet" guide to

Bangladesh. Inter products are not only the gift items of choice for every occasion for local and

expatriate Bangladeshis but also the quintessential cultural mementos for these visitors. Inter's

growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail

franchise in London - continues to broaden the market for Bangladeshi craft globally Inter

symbolizes fairness in the global village. Inter fashion house has a large and big rivalry such as

Aarong, Aanjans, Rang, Deshal. Kcraft, Banglar mela etc. they are decide their compensation

policy based on some criteria or factors actually private organizations cannot follow strict rules

or policy regarding compensation. But as new comer we need to follow best and lucrative

compensation package to attract and retain our best employees.

The organization has identified three basic constraints for gainful employment of the low income

and marginalized people in the rural areas: lack of working capital, marketing support and

opportunity for skills development. In order to bridge these gaps, Inter provides a wide range of

services to its workers and suppliers:

Spot payment on product delivery to encourage efficiency and productivity

Reach out to producers in remote areas to ensure fair value for their efforts

Marketing communication and information for artisans

Advances against purchase orders where necessary

Training & Education in skills development to raise product quality and marketability

Product Design and Support in Product Development

Quality Control to increase producer awareness of the importance of quality

Inter Retail Outlets:

Inter sales its products through its own outlets, Inter follow zero distribution channel. Around the

country Inter has ten outlets six outlets in Dhaka in six major parts (Dhanmondi, Gulshan, Uttara,

Maghbazar, Wari and Mirpur) and outside Dhaka Inter have two outlets in Chittagong, one in

Sylhet and one in Khulna. And outside Bangladesh Inter has one shop in London, United

Kingdom.

We set our price based on some things:

Cost of direct materials

Annual cost

Potentiality of cost

Administration and office cost

Promotion:

Young people of 25-35, for them Inter is a trusted brand. They visit the store often, buying

products mostly for gifts, sometimes for their own consumption. For them Inter provides the

reassurance that they have bought a quality product, thats their friends will appreciate as it is

from Inter. But they dont feel excited about brand. They miss out the excitement. They dont

feel it fits completely in their life the advertising should

Trigger strong interest among non-users to try the brand

Encourage regular usage

Establish the new Inter positioning

Program:

Inter fashion main marketing promotional activities are:

1. Sponsorship making in various occasions like Pahela Baishakh, Pahela Falgun

2. Various television programs dresses are courteous by Inter

3. Social campaigning programs are co-operated by Inter

4. Price discounting is their promotional activities. Besides, all this a things they use TV

advertisement, Fashion show for their up-coming innovative products, Bill board advertisement

and so on.

Brand value:

Inter stands for a unique mix of design, quality and convenience, of the traditional and the

contemporary. Inter is one-of-a-kind globally positioned as a highly successful Bangladeshi craft

based retail chain and brand of pride. It also carries the distinction of being BRAC's most

successful social enterprise. Inter's responsibility is therefore two-fold - delivering unique

products with the highest level of quality and service to its customers and the strongest level of

support and protection of artisans and their craft. To its consumers, Inter is a household name - a

one-stop shop and a trusted brand that inspires pride, promises quality and sophistication, and

helps to keep cultural roots alive in everyday life. For the artisans, Inter represents the endurance

of both their age-old art as well as their livelihoods. For consumers and artisans alike, Inter has

become a part of the cultural fabric of their lives.

8. SWOT Analysis of Inter:

SWOT analysis is a powerful technique for understanding organizations Strength & Weakness

and looking for the Opportunities & Threats it may face. Used in a business context it helps

organization carve a sustainable niche in a market. This analysis is mainly based on an imaginary

situation.
http://mdshossain.wordpress.com/2009/03/17/swot-analysis-of-aarong/

SWOT analysis of Inter

Strength

Inter is a very reputed organization. They are now capturing 68% of total handicraft market share

in Bangladesh. Its a local brand and now exporting their products outside of the country. Inter

has good reputation for fine quality products. It has a strong management team who are

continuously giving their great effort to make it a successful one. Another important fact is that,

Inter has almost Zero production damage rate which reduces their cost. They are innovative

and always bring some new product in the market which meets customer requirement and

expectations. The organization is a respected employer that values its workforce.

Weakness

Inter has a reputation for new product development and creativity. However, they remain

vulnerable to the possibility that their producer may not be able to produce product timely due to

their inability. The collection channel of the organization is not that much structured so that they

can get the products from the producer on time and it may create problem for them in future. If

any producer is not able to make the product on time due to some personnel problem then the

company will also not be able to deliver their product on time. This is a big problem and it

happens most of the time on delivery. Inter charges higher price relatively than their other

competitors as a result sometimes customers lose their interest to by product from them. Its sales

force or sales girls within the outlet are not properly trained up. Sometimes they make customers

disappointed by their attitude and customer doesnt feel good to buy from there. Sometimes they

suffer for financial problem, although its a rare situation.

Opportunities

Inter Fashion Boutique is very good at capturing the advantage of opportunities. It can go for

new distribution channel like it can make some joint venture with some other small Boutique and

sales its products in more places. Through that it can capture more market share in the hand.

Industry in Bangladesh. Inter can expand its business globally. New market for handicraft such

as Europe and America are beginning to emerge. People are now trendier about local events &

functions like PahelaFalgun, PahelaBaisakh, Victory day, Independence Day etc and they buy

new and special products for these events. Inter can make new products to sell in those special

occasions. According to the season change, people are also changing their preference in buying

products and considering this scenario Inter can produce products on the basis of seasonal

variations.

Threats

Inter doesnt have any big competitors right now. But they have some small competitors like

KayKraft, Anjans, Deshal, Jattra, Khubsurti, Rina Latif, OZ, Rang and some other Boutiques

established at Banani 11, who are taking their 32% customer and increasing in a slow rate. Inter

always face price wars with their competitors. Its competitors have some superior products like

OGs Panjabi shape, Khubsurtis design of Salwar kamiz Rangs Sharis color, which is

decreasing Inters market share as well as sales. But now they are repositioning their Brand to

compete with them.

9. Compensation Packages of Inter Fashion Boutique

Compensation is the direct and indirect monetary and non-monetary rewards given to employees

on the basis of the value of the jobs, their personal contributions and their performance. When

making these payments one should be alive to the governing legal regulations and should be

complied with the existing practices of payments exercised in a particular country.

Dimension of Compensation system

There are 2 dimensions of compensation system. So while planning compensation packages we

need to consider the following two dimensions:

Compensation Dimensions Non-compensation Dimensions

Pay for work and performance. Enhance dignity and satisfaction from work performed.

Pay for time not worked. Enhance physiological health, intellectual growth and emotional

maturity.

Loss of job income continuation. Promote constructive social relationship with Co-workers.

Disability income continuation. Design jobs that require adequate attention and effort.

Deferred income. Allocate sufficient resources to perform work assignments.

Health, accident and liability protection. Grant sufficient control over the jobs to meet personal demands.

Income equivalent payments. Offer supportive leadership and management.

Compensation Strategy

Contingent factors are:

Legal requirements or Govt. policies

Strength of Trade Unions

Labor market conditions &

Capacity of the organization to pay.

Compensation Philosophy while making compensation decision

Factors influencing Compensation policies

Factors determination of Rates of Pay

Compensation structure

Kinds and levels of required

knowledge and skills

Kinds of business

Union and non-union

status

Capital intensive

versus labor intensive

Size of business

Philosophy of

management

Total compensatio

n package

Geographic location

Supply and demand for

labor

Profitability of a firm

Employment stability

Gender differences

Employee tenure and

performance

Compensation and Benifits

Basic Pay

Allowances(Taxa

ble)

Reimbursement

(Tax free)

Incentives

Benifits

Other perquisi

te

Determination of Compensation

There are 5 major factors which we take into consideration while making compensation plan for

Inter Fashion Houses employees. And they are as follows:-

1. Incentives and bonus plans They shouldn't be seen as a guaranteed payment, but instead should be measured by performance

of the individual, team or company.

2. Understand the costs of a benefit plan When assessing what benefits to add, consider not only today's direct costs, but also long-term

expenses.

3. Calculation of employer payroll taxes into the overall payroll budget.

Employers incur expenses, such as Social

Security and Medicare tax, unemployment

insurance for both state and federal entities, and

workers' compensation insurance

4. Position of the employees Does it best correlate with direct payment on an hourly or salaried basis or is commission a

better arrangement?

For example-Employees in sales-related

positions should have commission as a part of

their compensation package

5. Payroll Budgeting Payroll budgets need to include direct wage and salary payments, commissions, bonuses,

incentives, payroll taxes and insurance, along

with any other directly related costs the business

incurs in the payroll function.

So considering the above various aspects of Compensation program we plan our

compensation as follows:

Compensation budget

The amount of money companies spend on employee compensation each year represents a

significant portion of operating expenses. Average payroll costs run anywhere from 23% (retail)

to 41% (service firms) of the entire operating budget of an organization.

As a result, compensation planning is clearly one of the most important responsibilities of

todays compensation professional. Annual compensation planning involves preparing budgets to

address salary increases, salary structure adjustments, promotion increases and variable pay

expenditures. Typically, the budget process occurs well in advance of fiscal year end so that cost

projections can be included in operating budget forecasts for the coming year.

Although, our total asset we allotted a separated budget for our employee compensation

packages. Our estimate amount is

Inter fashion Boutique

Projected Work Salary Sheet

For the month of December 31, Year 201.

SL

No

Designation No of

employee

Working hour Salary per

month

Total salary

per month

1 Managing director 1 Office hour 75000 100000

2 Chief operating

officer

1 Office hour 70000 80000

3 General manager

Finance & accounts


4 Deputy general

manger

HR and Training

1 Office hour &

when needed

65000 81000

5 Manager 1 Office hour 50000 62000

6 General manger

Administrative &

services


7 General manger

Design


8 Assistant manager

merchandizing

1 Office hour &

overtime

38000 47000

9 Senior manger

quality control


10. Senior manger

Information

technology

1 Office hour &

when

emergency

30000 37000

11. Executive officer

Inventory control


12. E-commerce officer 2 Office hour

and in-house

job

25000 32000

14. Marketing manager 4 Office hour

and different

locations

22500 38000

15. Designer 10 Office hour

and overtime

duty

20000 28000

16. Sales personnel 25 Office hour &

Shift work

12000 18000

17. Production master 40 Office hour

and extra duty

15000 20000

18. Tailors 33 Office hour & extra task when

needed

13500 15000

Total = 8,33,000

10. Conclusion

business plan of a boutique house

Documents

fashion boutique page

business plan

jewelry business

type of business

total compensation package

compensation programs

established company

better compensation