Thrilling times! You are starting a business. We have tools and tips for you whether you are just deciding on your business model or want to create a business plan for your company.
Review this business plan prepared by a company making T-shirts to guide you in preparing your own business plan.
Business Plan – Chakriya’s Case Sample
Chakriya sells hand-painted and silk-screened T-shirts. She has been in the clothing industry for some 15 years. She started her business in 2000 in her home, making white T-shirts with an old sewing machine her mother had left her. Chakriya ‘s business plan is below:
- PURPOSE OF BUSINESS
What does the business do?
My business produces T-Shirts with hand-painted or silk-screen designs. It retails them to individual customers and also wholesales them as unique uniforms for associations and businesses.
- BUSINESS GOALS
Where do you want it to be in 5 years? Discuss here things such as: the amount of sales you expect to have, the number of employees you will have, the products you plan to have, the number of units you want to sell, the location of your business, etc.
I plan to grow my business to reach $1,250,000 in annual sales in 5 years with 15 employees (6 hand and silkscreen painters, 6 seamstresses, and 3 sales associates). I will have established at least 6 T-Shirt product lines. Assuming the retail side of the business does well, the business may rent space near the downtown area of the city. I will also be doing pilot testing of new product lines, such as ladies skirts, and blouse sets.
- PRODUCTS AND SERVICES
Describe your MAJOR products and/or services. What are the features of your services/products? What are the average prices of each product or service?
I sell T-Shirt products on both retail and wholesale basis. I have 5 standard designs, which are painted or silk-screened onto the front of white or colored T-Shirts. I can also create a custom designed T-Shirt for an individual order. This carries the highest price, because of higher labor costs. The silkscreen T-Shirts are sold primarily to associations or businesses, as uniforms.
- THE INDUSTRY
Describe the industry you are in (such as food, clothing, retail, production, etc.)
I am in the specialty clothing industry. Clothing is a difficult industry to be in, because in order to have demand, the clothes must be fashionable, and fashion changes year by year. However, clothing is also a good industry to be in, because it is a basic need. In addition, I am part of an industry which makes uniforms. My uniforms cater to small and medium sized businesses or small public sector offices and schools.
Is your industry growing or declining? Explain.
Although the clothing industry is declining due to the financial crisis, and the imports from China, my particular niche, the specialty clothing industry, I believe is growing. I produce T-Shirts with fashionable designs which are unique and are not yet in the local market. With the economy slowly recovering, there is a bit more disposable income, and clients, particularly the ladies, are spending more. The uniform industry is stable, and businesses especially want to have distinctive uniform designs to set them apart from other businesses.
What are the major trends in the industry?
Computerized designs are more and more common. With computers, a lot of designs can be customized and put on T-Shirts, hats, aprons, etc. Silk-screening in an inexpensive way and in less time. But, this requires the appropriate equipment that will allow multiple articles of clothing to be produced at the same time. To stay competitive, I will need to eventually invest in more machinery.
- MARKET AND COMPETITION
- CUSTOMERS
Where are your customers located (your neighborhood, city/town, region, nationally, internationally)?
My customers are mostly from big cities and nearby towns.
If your customers are individuals (in contrast to businesses), describe them in terms of their age, male/female, income, ethnicity, etc. If they are businesses, describe the typical business customer (location, sales volume, industry, etc.)
I have three different types of customers:
- individuals, mostly ladies ages 20 to 40, who come to the store to request a hand-painted T-Shirt
- groups or associations or businesses, which request 10 or more hand-painted or silk-screened T-Shirts with the same design for special events or as a business uniform, and
- a few boutiques to whom I sell hand-painted T-Shirts which retails to high end individual customers.
Who are your biggest customers?
Currently, I have a large number of individuals and local businesses as my main customers. My largest order has come from Paper Products Inc., which ordered silk-screened T-Shirts for its employees. I have been selling to Boutique Mabelle only in the last 4 months, and demand is picking up. They may become a larger buyer in the future.
What percentage (%) of your total sales do your top 5 customers represent? How dependent are you on these 5 customers?
I have a diverse customer base. My largest customer, Paper Products Inc, accounted for 10% of my sales in the first quarter of 2006.
Is your business seasonal or cyclical?
My business is somewhat seasonal and differs by type of customer. I have a high level of sales from individuals and from Boutique Mabelle during the months of November and December, in preparation for the Christmas season. Group and Association sales are constant throughout the year, but there is a slight clustering at the outset of the school year, during September and October. Sales are lowest during the summer season in June and July.
What percentage (%) of your customers are repeat customers?
20% of my individual customers represent repeats.
What percentage (%) of your customers are drop-ins?
Only 5% of my individual customers are drop-ins, given that I don’t have a good show-room location. Most of my customers come to my business because they have heard about me before. Most of them come to put in an order.
- COMPETITION & COMPETITIVE ADVANTAGE
Who is serving your same type of customer with similar services or products? (List the names of your competitors and the products they offer.) Uniform Supply Company, Tourist T-Shirts, T-Shirt Designs, and Boutique Jo-Jo, all offer custom designs for individuals and group orders. T-Shirt Designs does silk-screening and embroidery using a computerized machine. Boutique Jo-Jo sells T-Shirts with customized landscapes and art themes. Uniform Supply Company caters to businesses and produces uniforms, including T-Shirts, with the businesses’ logo.
How do you promote your business to customers in a way that shows your products and services are different or better than your competitors?
I promote my product on a personal basis with area businesses. I conduct visits to 3 businesses one day per week to promote my T-Shirt business. Most of my individual customers I derive through word of mouth. Many of them are employees of the businesses to which I sell to. During promotions I wear my product so that I can show the quality of the material and the detail of the design.
How is your competition marketing their products or services? Are their prices the same, less or more?
My product offering is individually customized for each client’s needs, so it is difficult to compare it with other businesses. However, for a nice, specialty T-Shirt, my price is more reasonable than those found in a high end boutique. It is more expensive than a regular tourist T-Shirt by $1 to $5. I have two types of competition: the tourist shops, and the uniform production companies.
Does your competition offer benefits that you don’t?
My competition can produce larger volumes than I can and handle larger orders.
What are the advantages your business has over your competitors (personnel, marketing, financial strength)?
My biggest strength is the uniqueness of my product. The second strength is that I have a low overhead because I operate out of my home and can keep my costs and prices at a reasonable level.
What are the weaknesses of your business compared to your competitors?
The small size of my business is my biggest weakness. If I had more capacity (space, machinery and staff), then I would be able to make and sell more T-Shirts. My competition also generally has a better, more accessible location than I. If I had a storefront in a prime location, I would be able to increase the number of drop-in customers. The other T-Shirt shops are more centrally located.
