Online Retail Business Plan

This assignment presents a comprehensive plan for establishing an online retail business. It delves into the detailed features of products, highlighting their unique selling points (USPs). A thorough market analysis identifies target audiences and competitive landscapes. The financial aspects are examined to determine the viability of the venture. Additionally, the document addresses legal considerations and regulations pertinent to online retail operations in the UK.

BUSINESS INTEGRATION PROJECT
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ABSTRACT
Competition is fierce in the online clothing industry. Gear Plus product features are of
highest quality and competitive for meeting the apparel needs of potential customers. With the
rapid increase in the fitness sector, every customer wants options in the apparel of fitness wear.
Thus, regarding this the present study will be emphasizing on ‘Gear Plus’ fitness which will be
an online retail fitness clothing store that will focus on selling gym and fitness wear and will be
launched by two partners. The main objective of this business plan is to increase the net profit
from the first year of operational year. The incorporation of unique and innovative designs in the
products is considered as a core aim for Gear Plus. This company plan to sell products at a
reasonable and valued price. The main target market will be customers in the UK and in the
future, Gear Plus plan to expand to customers in other EU countries.
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TABLE OF CONTENTS
CHAPTER – 1 INTRODUCTION..............................................................................................................................4
1.1 COMPANY DESCRIPTION.......................................................................................................................................4
1.2 MISSION AND VISION STATEMENT........................................................................................................................4
1.3 BUSINESS OBJECTIVES..................................................................................................................................4
1.4 BUSINESS PHILOSOPHY.................................................................................................................................4
1.5 BUSINESS ETHICS............................................................................................................................................5
1.6 PESTLE...............................................................................................................................................................5
OPERATIONAL AND MARKETING ISSUES WHILE LAUNCHING THE BUSINESS..............................................................7
CHAPTER – 2 PRODUCTS........................................................................................................................................8
2.1 PRODUCT FEATURES-UNIQUE SELLING POINT.......................................................................................................8
2.2 COMPETITIVE ADVANTAGE.........................................................................................................................9
CHAPTER 3 COMPETITION AND MARKET ANALYSIS................................................................................10
3.1 FACTS ABOUT THE MARKET......................................................................................................................10
3.2 COMPETITION RESEARCH ANALYSIS......................................................................................................10
CHAPTER – 4 OPERATIONAL PLAN..................................................................................................................11
4.1 PRODUCTION..................................................................................................................................................12
4.2 LOCATION.......................................................................................................................................................12
4.3 SUPPLY AND DISTRIBUTION......................................................................................................................12
CHAPTER 6 MARKETING PLAN..........................................................................................................................12
5.1 MARKET SIZE.................................................................................................................................................12
5.2 SEGMENTATION............................................................................................................................................12
5.3 TARGET MARKET - WHO WILL YOUR FIRST CUSTOMERS BE? (B2B OR B2C)...............................12
CHAPTER 6 SALES PLAN......................................................................................................................................12
6.1 SALES FORECAST..........................................................................................................................................12
6.2 SALES STRATEGIES......................................................................................................................................14
CHAPTER 7 FINANCE.............................................................................................................................................14
7.1 START-UP.........................................................................................................................................................14
7.2 FINANCE SOURCES.......................................................................................................................................14
7.3 PROFIT AND LOSS ACCOUNT.....................................................................................................................15
7.4 PROFIT PROJECTION 2-5 YEARS................................................................................................................15
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7.5 BALANCE SHEET AS AT OPENING DAY...................................................................................................16
7.6 BREAK-EVEN POINT.....................................................................................................................................17
7.7 12 MONTH CASH FLOW STATEMENT.......................................................................................................17
7.8 CREDIT POLICY................................................................................................................................................19
7.9 MANAGING ACCOUNT PAYABLES AND RECEIVABLES......................................................................19
CHAPTER 8 FUTURE PLANS FOR EXPANSION AND GROWTH STRATEGY..........................................19
8.1 INCREASING MARKET SHARE FORECAST..............................................................................................19
8.2 CAPITALIZATION GROWTH........................................................................................................................19
CHAPTER 9 MANAGEMENT AND ORGANIZATION......................................................................................19
9.1 EMPLOYEES....................................................................................................................................................19
9.2 ORGANISATIONAL CHART..........................................................................................................................20
9. 4 CORPORATE SOCIAL RESPONSIBILITY..................................................................................................20
CHAPTER 10 RISK ASSESSMENT........................................................................................................................20
10.1 MARKET RISK AND FINANCIAL RISK....................................................................................................20
10.2 OPERATIONAL RISK....................................................................................................................................20
CHAPTER 11 LEGAL REQUIREMENTS.............................................................................................................21
CONCLUSION...........................................................................................................................................................21
REFERENCES............................................................................................................................................................22
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CHAPTER – 1 INTRODUCTION
1.1 Company description
This business plan represents the new establishment of “Gear Plus Online Retail Fitness
Store” in the UK. Gear Plus will be situated in Acton, London. The location has been selected
because it is situated in West London which is an emerging place for start-ups. The business will
offer online fitness clothing for both men and women that are adaptable for fitness as well as for
general every day wear.
1.2 Mission and vision statement
Mission
To provide quality unique styling & design of fitness clothes which energizes indoor and
outdoor activity.
Vision
The vision of Gear Plus is to become one of the leading online retail businesses in the
field of fitness clothing through the innovative and unique services.
USP
Chief focus of the business will be laid on delivering quality services in retail industry
through adding several stylish and innovative clothes for indoor and outdoor activities.
1.3 BUSINESS OBJECTIVES
The objectives of the Gear Plus are as follows:
• Become the premier online fitness retailer in the UK
• To attain a base of 900 customers within the 1st year of establishment
• To achieve a net profit during each year of business
1.4 BUSINESS PHILOSOPHY
 To provide customers with high quality of products and services
 To keep updated with new trends in the field of fitness clothing design
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1.5 BUSINESS ETHICS
Guarantee the security and privacy over the purchases through credit card purchases
• To ensure products are authentic and follow all the prescribed safety standards
• Adhere to a customer-business relationship transparency along with financial
transparency
1.6 PESTLE
PESTLE depicts external factors that have an integral role towards influencing the
performance of business. However, these forces replicate the various opportunities and threats in
the market. The following external forces can affect the company in the long-term:
Forces Impact
Political Since, UK is a constitutional monarchy which
runs under the influence of parliamentary
system; therefore UK is said to be fair and
stable country for Gear Plus where in
numerous opportunities are there for business
growth and success (Hermann, 2009). It is
relatively a fair company with the public
having a larger influence on the inner
workings. UK is politically stable; however
on the other hand there are some well- hidden
corruption.
Economical UK has a strong economic position relative to
other countries. Since, it has a high GDP;
therefore it must have several issues as well.
Gear Plus has the opportunity to enhance the
level of profitability and success as UK has
world’s largest GDP. It lies under the
category of free market; therefore Gear Plus
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could conduct the business appropriately in
the new market place. Apparently, economy
of every country is the main driver that
enhances success and growth prospects (Kim,
Forsythe and Moon, 2002). People have the
purchasing power to buy the products; thus
Gear Plus can focus more on domestic selling
of goods and services. The opportunities of
direct investment are also higher in the same
context.
Social The country (UK) has been following high
social standards; thus every business entity is
required to follow all the social values and
norms. In this respect, many free public
services are also introduced for the clients
which shows the concern towards social
aspects. People in UK have high standard of
living; therefore Gear Plus should focus on
delivering quality products and services.
Technological UK does not have good access to technology;
therefore operating the business in Acton
would lead Gear Plus to invest much
resources in technological aspects (Kotler and
et.al., 2010). Thus, in this respect it can be
said that the advancement in the technology
initiates need for interactive displays of
product plus dynamic personalization. Gear
Plus is also required to focus more on
technological sources so that new tools can
be adopted for enhancing service dimension
capability. At the time of introducing new
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products at market place, Gear Plus has to
consider effective laws regarding intellectual
property. This can also generate internal
competition to stimulate growth prospects.
Environmental It is imperative for Gear Plus to reflect
consider environment aspects on the
operations so that large number of customers
can be persuaded. All the business entities
have to focus on environmental facets on
higher extent so that market share, customer
base, stakeholder interest, business
profitability and other related benefits can be
acquired. Regarding this, Gear Plus will have
to contribute more in social responsibility
development.
Legal The legal elements in the United Kingdom is
taken as more complex and the company has
to comply more with UK and EU regulations.
As per the legal framework, it will be vital
for Gear Plus to give necessary benefits to the
employees. Violation of legal policies and
framework will also affect sustainability of
Gear Plus.
Operational and marketing issues while launching the business
At the time of launching the business’s products (fitness products of Gear Plus) at Acton
London, the business might face several challenges and constraints. A few are discussed in the
below section:
 Unavailability of human resources: Apparently, while launching business in external
market place, it is essential for Gear Plus to arrange human resources in adequate way so
that all the business services can be managed (Dibb and Simkin, 2013). This is one of the
major issues that could generate while operating business in Acton, London. Since, it
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will be a new location for Gear Plus; therefore the business may find it difficult to search
for talented personnel.
 Improper arrangement of financial resources: Finance is the core requirement for every
business entity; therefore Gear Plus will have to arrange financial resources to manage
all the business practices. At the time of launching the business in Acton, London, Gear
Plus will have to arrange financial resources in adequate quantity. This will also
underpin all the business facets.
 Changes in market structure: Market structure changes rapidly; therefore for such
context Gear Plus needs to emphasize on all the legal framework so that business
prosperity can be maintained (Doole and Lowe, 2008). This can also affect all the
operations of the organization and business might have to introduce various new aspects.
This might be a complicating aspect for Gear Plus because it requires attention on
several things that are vital for business management.
 Inappropriate market research: Market research plays crucial role for every entity;
therefore Gear Plus have to conduct market research prior introducing the products at
market place. In this respect, information should be collected regarding competitors who
are serving the similar products in the same entity.
CHAPTER – 2 PRODUCTS
2.1 Product features-unique selling point
As per the business products and services, it is essential for Gear Plus to sell variety of
fitness products to the consumers so that they can meet the requirements of customers. The main
USP of Gear Plus is deliver quality products to the clients as per their needs. Range of clothes
should be added in the product line for meeting various requirements of clients.
One of the major features which distinguish Gear Plus online is commitment to provide
stylish, unique, quality and customized fitness wear clothing options for both men and women.
1. Clothing
Specifications
 Designed with specific fabrics that are resistant to fade and shrink
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 Manufactured with high quality standards
 Innovative designs in the products with colors and different patterns
2. Customized products
Specifications
Gear Plus will be delivering customized products to the consumers; however the main
aim of the business entity remains the same (that is to deliver clothing products for indoor and
outdoor fitness activities). The business have t-shirts for both men and women and along with
that, track pants are also available for the end users. Printed t-shirts with logo and design are
available for the clients. However, in terms of customized products, Gear Plus is also providing
specific products to people as per the choice wherein they can print any quotation if required.
One of the major significance of products of Gear Plus is that the business has variety of clothes
in all shapes and colors. This is essential in terms of meeting the needs and demands of all
customers.
In order to differentiate the products, Gear Plus has come up with light weight running
shoes that measures the kilometer that is covered by the person while carrying out the requisite
activities. This can be highly used at the time of doing Gym; hence it is expected to be liked by
the consumers. The product is exclusive because the weight of shoes is light; even people would
not be able to realize the presence of shoes.
2.2 COMPETITIVE ADVANTAGE
Competition is fierce in the online clothing industry. Gear Plus product features are of
highest quality and competitive for meeting the apparel needs of potential customers. With the
rapid increase in the fitness sector, every customer wants options in the apparel of fitness wear.
In order to compete in external market place, it is essential for Gear Plus to emphasize on
Porter’s Fiver forces model so that each and every dimension of competitive market can be
analysed.
 Buyer’s power: Buyers have the ability to decrease the prices for products because of
existing competition. This generates the demand for substitute products and as a result it
can affect the business prospects of Gear Plus (Freytag and Munksgaard, 2011). Buyers
have the ability to influence the level of demand so that because they have several
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options. Nike, Adidas and Puma are some of the major brands whose products are sold to
the consumers on higher extent and which also fulfills the needs of end users.
 Supplier’s power: In the fashion retail industry, supplier power is relatively small and
insignificant force as most of the apparel companies source their products from other
manufacturers. Thus, it can be said that suppliers of Gear Plus will have little control
over fashion industry. As a consequence, input prices for this industry are relatively low
and will stay there till the global development issues are resolved.
 Competitive rivalry: The intensity of competition is higher in fashion retail industry
because there are large number of sellers operating business in the same market place.
This not only leads to customer switch over; but also creates more competition in
existing market place. Market place (Acton, London) is highly saturated because of the
availability of similar products and services (Berman, Evans and Mathur, 2010).
 Threat of new entrants: Political forces of UK are dissimilar in many ways and it chiefly
emphasizes on free moving policies and framework. Threats from new entrants are
minimum; therefore Gear Plus can operate the business successfully in Acton market
place.
 Threat from substitute products: Threats from substitute products are higher as there are
several entities working in the same industry. The risk of competition also develops due
to high use of social media which not only persuades people; but also leads the entity to
sell the products to numerous customer segments. Buyers have large amount of indirect
power to bargain because of the plenty of options available to them. Hence, it can be said
that it would be difficult for Gear Plus to survive competitively in Acton market.
CHAPTER 3 COMPETITION AND MARKET ANALYSIS
3.1 FACTS ABOUT THE MARKET
Since, entities working online are always software driven; therefore Gear Plus will be
emphasizing on the same. The software works in systematic manner wherein customers have to
select the products and services as per the choice and after including it in the wish list, products
will directly show in cart. It will cost around 900 pounds for Gear Plus every month which
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3.2 COMPETITION RESEARCH ANALYSIS
The major competitors of Gear Plus will be ASOS because the entity has all sorts of
products and services. The business is also able to acquire maximum attention form the clients;
hence this gives huge competition to the business. Apart from this, Powerhouse Fitness can also
give more competition to Gear Plus because the entity also sells all the fitness and gym
equipment. It is one of the largest internet retailers in UK which has adopted numerous
promotional strategies for maximizing the attention of clients. Yet another competitor is Adidas
whose fitness products are also sold in Acton.
Stating the marketing strategies of Adidas, it can be said that the business is based on
demographic behavioural and psychographic factors. Adidas uses differentiated targeting
strategy to target young adults as well as children who are passionate about fitness and sports.
Further, it targets customers in the age group of 13-40 years but majority of its customers are of
15-30 years old who hail from upper middle class or the luxury class. Along with this, user and
benefit based positioning are the chief techniques of Adidas for the purpose of creating
differentiated image among customers.
 The entity is also using the 4Ps in effective manner wherein the major product of Adidas
is footwear. This comes in various styles and designs because the footwear is robust and
athletic. However, the secondary product of Adidas is apparel and accessories which are
also greater in demand.
 In terms of pricing, Adidas uses price skimming strategy so as to remain competitive in
the market place. The strategy is also utilized because the products are uniquely designed
(Caemmerer, 2009). At the same time, brand value is the main motive for which high
prices are determined.
 Adidas sells its products and services through retail outlets and this is the reason the
business has exclusive stores. Multi- brand showrooms also have the products of Adidas;
hence they act like distributors. Similarly, the products are also sold through online
medium which increases distribution channel of Adidas.
 Creative and innovative advertisement are the major sources through which Adidas
promotes all its products. Sales promotion and trade promotions are also regularly offered
by Adidas to their channel partners to enhance the sales of the brand.
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CHAPTER – 4 OPERATIONAL PLAN
For Gear Plus, the operational plan consists of the production, inventory, location plus
supply and distribution.
4.1 PRODUCTION
The production is associated to the production of Gear Plus products. The key products
include clothing such as trousers, varieties of tops, gym bags, hoodies and unique and
customized t-shirts. Gear Plus intends to design products through extensive research to meet the
innovative needs of customers.
4.2 LOCATION
The intended location for Gear Plus online store is Acton, London. This town has a large
number of populations of both men and women who are more conscious on comfort and stretchy
clothes with unique designs.
4.3 SUPPLY AND DISTRIBUTION
The services will be delivered through own distribution centres including shipping, parcel
or vehicle delivery depending upon the size of customer’s orders. During the placement of
orders, the method of delivery will also be displayed in shopping cart.
CHAPTER 6 MARKETING PLAN
5.1 MARKET SIZE
This online store will attract the group of people aged from 16-55 years. The total size of
market that Gear Plus target is 5,000 approximately.
5.2 SEGMENTATION
As the products will be sold at customer’s valued price, the individual ranking to the
average income groups being targeted form the market.
5.3 TARGET MARKET - WHO WILL YOUR FIRST CUSTOMERS BE? (B2B OR B2C)
The target market segments will be the men and women whose age ranged between 16-55
years in the areas all over the UK. These groups of customers are trend-setting and will also
influence other audiences countrywide.
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CHAPTER 6 SALES PLAN
6.1 SALES FORECAST
The sales forecast is regarded as one of the significant tools in the operation of business
related activities no matter what the size of the business is. Sales forecasting refers to the process
where company makes prediction regarding what the sales will be in the future (Ingersoll, 2010).
Sales forecasting is done in specific time period usually in subsequent fiscal year by the
company. The calculation on forecasting of sales of Gear Plus is illustrated below:
Amount in (£)
Year Year 1 Year 2 Year 3 Year 4 Year 5
Total Sales Revenues 70,000 90,000 110,000 135,000 150,000
Table: Sales Forecasting for the “Gear Plus”
Gear Plus will use Secure Socket Layer (SSL) for selling products online. Through the
MasterCard or Visa, every order will be charged. The above table depicts the sales forecasting
for a five year period. The increment in sales on the yearly basis is projected to be 20% from
year 1 to year 3. Moreover, from year 4 and year 5 the sales are forecasted to increase by 30%.
As this is the start-up business where developing and readying the sites takes few months Gear
Plus expects sales to increase gradually. Thus, the following graph portrays the forecasting of
sales more distinctly:
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Year 1 Year 2 Year 3 Year 4 Year 5
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Total Sales Revenue
Total Sales Revenue
Figure 1: Forecasting of Sales for “Gear Plus”
6.2 SALES STRATEGIES
Gear Plus plans to increase sales through efforts of strategic marketing. Also, the
marketing mix strategy related to the sales strategy will be followed by the company via
considering the product, price, place and promotion (Galloway and Morrison, 2002). Moreover,
an easy access for the UK customers in regards with the next day delivery and also no returning
fee is also available.
CHAPTER 7 FINANCE
7.1 START-UP
For fulfilling the resources needed, necessary funds can be either borrowed from the
shareholder’s personal savings or the bank. The estimated total initial operating cost for new
Gear Plus is predicted to be £79,100. The following table shows various areas of allocated cost in
order to invest in Gear Plus.
Particulars Amount in (£)
Registration Fees 500
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Licensing 600
Marketing and Promotional Expenses 6000
Recruiting Professional Expertise 5000
Accounting Software Installation 5000
Initial Expenses including Stationery Items and other cost 6000
Machinery and Equipment Costs 25,000
Website Advertising Cost 1500
Opening Ceremony Cost 2500
Ongoing costs 27000
Total Initial Start-up Cost 79100
Table 1: Cost of Start-up for “Gear Plus”
7.2 FINANCE SOURCES
For launching any new business, usually there are different available sources of finance
which the investor can follow. Regarding the business plan for Gear Plus, the funds of 75% will
be collected equally from the two partners, (i.e. contribution of Partner 1 = £30,000 &
contribution from Partner 2 =£30,000) and the remaining funds of 25% which is £20,000 will be
borrowed from the bank as per the house collateral.
7.3 PROFIT AND LOSS ACCOUNT
The financial statement which helps in summarizing the expenses, cost and revenue
incurred in the particular period of time is known as profit and loss account. The profit and loss
account is calculated by every business in order to know the actual incurred profit or loss during
the performance of business. In the profit and loss account calculation, all the incomes are
credited whereas all the expenses are debited for showing the company’s profit or loss.
7.4 PROFIT PROJECTION 2-5 YEARS
The following table is illustrated for projecting the profit and loss of Gear Plus for the
five years period:
Amount in
(£)
Amount in
(£)
Amount in
(£)
Amount in
(£) Amount in (£)
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Year Year 1 Year 2 Year 3 Year 4 Year 5
Sales Revenue 70,000 90,000 110,000 135,000 150,000
Cost of Sales (50%) 35,000 45,000 55,000 67,500 75,000
Gross Profit 35,000 45,000 55,000 67,500 75,000
Total Expenses and
Overheads 20,000 22,500 23,150 24,225 25,260
Profit Before Tax (20%) 4,000 4,500 4,630 4,845 5,052
Net Profit After Tax 16,000 18,000 18,520 19,380 20,208
Table 2: Profit and Loss Projection for Gear Plus
The table above indicates a summary report of the projected profit and loss account for
Gear Plus for a five year period. From the table, it shows that the profit is increasing from year 1
to year 5 in subsequent years. The cost of goods sold is expected to be 50% of the sales revenue
and it is taken on the basis of cost that associated with sales. As this shows increasing trend in
the gross profit which in turn leads to generation of profit through covering the incurred
expenses and overheads during the initial start-up business (Hooks and et. al. 2012). The
overheads expenses include the cost of equipment, communication, marketing, advertising,
membership fee, office expenses and others. The rate of tax is projected to be 20% that needs to
be paid in the earned profit in every year.
Note: - The detail information of calculation is shown in the excel chart.
7.5 BALANCE SHEET AS AT OPENING DAY
The balance sheet is defined as the company’s condition report which lists items such as
assets, equity capital and liabilities. The formula used to address in balance sheet:
Assets = Liabilities + Shareholder’s Equity
The following table determines projection of balance sheet of Gear Plus on opening day:
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Amount in (£)
Particulars Year 0
Share Capital
Directors 1 30000
Directors 2 30000
Current Liabilites 145135
Bank Loan 20000
Total Equity and Liabilites 225135
Fixed Assets 145135
Current Assets 80000
Total Assets 225135
Table 3: Opening Day Balance Sheet for Gear Plus
7.6 BREAK-EVEN POINT
The break-even point can be defined as points where total revenue equals to total cost.
This is the point where company neither earns profit nor is at loss. The assumed fixed cost is
30,000. The table and figures mentioned below determines break-even point calculation of the
Gear Plus for 1 to 4 years.
BEP of Gear Plus
Year Sales price Variable expenses Contribution Fixed cost BEP
1 70000 50000 20000 30000 -10000
2 90000 60000 30000 30000 0
3 110000 72000 38000 30000 8000
4 135000 93600 41400 30000 11400
Table 4: Break-even Point for Gear Plus
For calculating the breakeven point regarding the Gear Plus, the average fixed cost is
expected to be £30,000 as well as the ratio of contribution margin is expected to be 50%. When
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the revenue is at £90,000, the company will neither earn profit nor will be at loss i.e. zero. If the
revenue amount is expected to reach beyond £90,000, then the Gear Plus will achieve higher
profit i.e. when the revenue is £110,000 the gained profit tends to be £8000. Hence, the analysis
of breakeven shows that £90,000 will be required during the monthly sales for reaching the point
of break-even.
Note: - The detail information of calculation is shown in the excel sheet.
7.7 12 MONTH CASH FLOW STATEMENT
Cash flow statement is defined as the report of detailed summary about cash inflows and
outflows of the company in a given time period. This analysis helps in knowing cash position of
the business where equivalents of cash and breakeven analysis is undertaken in the activities of
financial, operating and investing (Hussain and Matlay, 2007). The following table indicates
projected statement of cash flow of Gear Plus for a 12 month period.
Amount in (£)
Months 1 2 3 4 5 6 7 8 9 10 11 12
Cash Receipts
Cash Sales 5000 7000 7500 8000 8800 9000 10000 11000 12000 14000 14500 18500
Owner Deposit (60%) 60,000
Loan Proceeds (40%) 40,000
Total 105000 7000 7500 8000 8800 9000 10000 11000 12000 14000 14500 18500
Cash Disbursements
Initial Costs:
Registration Fees 500
Licensing 600
Marketing and Promotional Expenses 6000 0 2000 0 2000 0 0 1800 0 2000 1500 1000
Recruiting and Professional Expenses 5000
Insurance 9000
Accounting Software Installation 5000
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Initial Expenses including stationery items and other costs 6000 0 0 0 3000 0 0 3000 0 0 0 3000
Telephone and other expenses 3000
Employees salary per month 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000
Warehouse cost 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Machinery and Equipment costs 25000
Advertising cost 1500 1500
Opening ceremony cost 2500
Other Miscellaneous cost 2000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Total 79100 14000 16000 14000 19000 14000 15500 18800 14000 16000 15500 18000
Monthly surplus (Deficit) 25900 -7000 -8500 -6000 -10200 -5000 -5500 -7800 -2000 -2000 -1000 500
To date surplus (Deficit) 31900 30900 27900 23900 18900 19300 19100 15300 16600 17100 18500 18300
Table 5: Cash Flow Statement Projection for the Period of 12 Months of Gear Plus
Note: - The detail information of calculation is shown in the excel sheet.
7.8 CREDIT Policy
The policy of credit is centered on the terms of credit, criteria of credit and credit
collection procedures. Hence, the plan is to invest 75% as equity capital and 25% as credit. The
credit will be collected from the bank loan (Ingersoll, 2010).
7.9 MANAGING ACCOUNT PAYABLES AND RECEIVABLES
The credit terms will not be extended for the customers as mentioned above that will not
need management of account receivable. Nevertheless, from the reserve of loan repayment of the
company the loan from a bank will be reimbursed within the period of five years.
CHAPTER 8 FUTURE PLANS FOR EXPANSION AND GROWTH STRATEGY
8.1 INCREASING MARKET SHARE FORECAST
For any types of business, growth is essential and strategies need to be drawn when
starting up new business in order to ensure the long-term sustainability. The business aims to
increase the market share by 30% at the end of third year operation. For capitalizing the intended
business plan, the marketing strategy will be followed (Ilter, 2014).
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8.2 CAPITALIZATION GROWTH
For capitalizing the growth on intended business plan, the company will largely
concentrate on the quality based products rather than quantity based at reasonable prices. It will
continue to be the fastest deliverer for providing the quality of services and charge will be free
on returned items for the registered customers in the UK.
CHAPTER 9 MANAGEMENT AND ORGANIZATION
9.1 EMPLOYEES
1. Operational Manager
2. Sales and Marketing Manager
3. Marketing analyst (External)
4. Account Manager
5. Professional Expertise (External)
6. Designer (External)
9.2 ORGANISATIONAL CHART
Figure 3: Organisational chart of Gear Plus
9. 4 CORPORATE SOCIAL RESPONSIBILITY
As a business entity, Gear Plus believes that the business is a part of the society as it
completely rely on society for the smooth operation of business. In today’s society, online
shopping has made it easier for people to shop rather than physically visit stores or shopping
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malls. In order to reduce the consumption of energy, Gear Plus aims to plan to use solutions of
LED lighting in the office and warehouse.
CHAPTER 10 RISK ASSESSMENT
10.1 MARKET RISK AND FINANCIAL RISK
The efforts and actions made by the similar brand competitors are considered as major
market risk related to the online fitness clothing business. In an initial start-up business, there is
high insolvency risk as business is new in the established market.
10.2 OPERATIONAL RISK
It was not possible for the entity to research the terms and conditions of the market;
therefore this is one of the issues that was observed in the project. However, in future context
also, it would be difficult for Gear Plus to identify the need of each and every client; thus for
such purpose the business could do competitor analysis on this respect.
CHAPTER 11 LEGAL REQUIREMENTS
For Gear Plus the legal requirements that needs to adhere are:
1. Registration of business in order to comply with the state law.
2. Granting of authority from the government for taking license.
3. Adherence to the Electronic Commerce Directive Regulations 2002 and the Data
Protection Act 1998 for conducting online retail stores.
4. Use of the Sales of Goods Act 1982 standards online retail products.
CONCLUSION
The features of products have been described in detail besides with USP of designed
products features. Similarly, the analysis of market is taken as an imperative aspect in this report
for launching the new business in the established market. Without adequate financial resources,
the existence of business in long-term is unimaginable therefore, financial study has been
conducted for checking the feasibility of financial resources in terms of intended business
venture. For this reason, the company will mainly focus on hiring professional consultants to
solve the internal managerial queries as well as to deliver the quality of services to its prospect
customers.
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