Bonus Gift #1

Business Planning
Workbook

Copyright 2008. Lingerie Kitty.com

 Introduction

So you want to start a lingerie business? This workbook can

help guide you on your journey. It is meant as a tool to help you
to focus, clarify your dreams, develop your ideas, find your
niche, determine your financial requirements, implement a
marketing plan and prepare you for success.

It all starts with the first step.

This book is written in a Q&A format to help you step by step in

all things that must be considered before opening your business.
If you are already familiar with some of the steps, then it is quite
okay to skip certain parts and head to the information you need
the most. Maybe you only want resources. Then head straight
to the Wholesale Directory for over 250 sources of lingerie
apparel and accessories and home party plans. If you need to
start from scratch with help in developing a business plan or
finding a niche, then start from the beginning with this Business
Planning Workbook.

It is suggested that if you are new to retail and/or the lingerie

business that you start from the beginning. Nothing ever quite
substitutes for good planning and getting things down on paper.
Enthusiasm can not. Determination can not. Businesses must
have a foundation, otherwise it is just a hobby or a past time.
The Business Planning Workbook is meant to help you build
that foundation.

Business Planning Workbook - 2

 Table of Contents

Introduction ….Page 2
Business Planning Q&A….Page 5
Business Analysis Worksheets…..Page 24

Appendix….Page 29
The Red Tape: Permits & Licenses
Leasing Checklist
Keeping The Books
“What to Buy…What to Buy” – Attending Trade Shows
Trade Show Tips
Running Your Business from Home & on the Web

Business Planning Workbook - 3

Getting Where You Want To Go
Just because you think you know where you want to take your business, doesn't mean you
shouldn't put it down in writing. About the only person who doesn't need a business plan is
someone not really going into business. But if you're going to be investing substantial money,
life savings, energy or time in this venture and hope for it to be a full-time business, you should
take the time to draft some kind of plan. This booklet is designed to help you work up a sound
business plan.

This whole workbook can be printed and used to write your notes. Also, business forms have
been provided after these questions. These forms include worksheets for start up costs estimates,
target market analysis, sales projections, writing a mission statement and more. The notes from
this workbook can be used as a reference for when you create your formal business plan.

VIEW A SAMPLE “LINGERIE BUSINESS” BUSINESS PLAN AT:

http://web.syr.edu/~gtdavis/bizplans.html

and click on Bra-vo. There are other sample business plans there also that can be learned from.

So let’s get started…

Business Planning Workbook - 4

Starting a Business Q&A
To profit in business, you need to consider the following questions:

What business am I in?

What niche will I serve?

What goods will I sell?

Who is my target market? (What type of customer will buy my goods?)

Where is my market? (Where do they live? What do they read? Where do they congregate on
the internet? etc.)

Who is my competition?

What is my sales and marketing strategy?

What merchandising methods will I use?

How much money is needed to operate my business/store? How much working capital do I need
to carry my business until it breaks even?

How will I get the work done? Will I have help? Employees?

What management controls are needed? Inventory control? Processes and Procedures?

How can they be carried out?

When should I revise my plan?

Business Planning Workbook - 5
Where can I go for help?

As the owner-manager of your own retail lingerie business, you must answer these questions as
you draw up your business plan.

II. What Is a Business Plan?

The success of your lingerie business will depend largely on the decisions you make. A business
plan helps you to realistically allocate your money and measure the results of your actions and
purchasing decisions, thereby helping you to set realistic goals and make logical decisions.

While it may sound intimidating, writing a business plan isn't really difficult. After all, a
business plan is just a written description of your business' future, financial and conceptual.
That's it - a document that describes what you plan to do and how you plan to do it. If you jot
down a paragraph on a napkin describing your lingerie business strategy, you've written a plan,
or at least the SEED of a plan.

A business plan offers many other benefits.

• Gives you a path to follow.
• Allows you to guide your business through unforeseen economic situations.
• Gives your banker or investors insight into the condition and direction of your business
so that your business can be more favorably considered for a loan.
• Can tell your sales personnel, suppliers, and others about your operations and goals.
• Can help you develop as a manager. It can give you practice in thinking and figuring out
problems about competitive conditions, promotional opportunities and situations that are
good or bad for your business. Such practice over a period of time can help increase your
ability to make judgements.
• Can tell you what and how to achieve the goals that you have set for your business.

So what do you need to include in your plan, and how do you put one together?

What Business Am I In?

In preparing your business plan, the first question to consider is: What business am I really in?
At the first reading, this question may seem silly. "If there is one thing I know," you say to
yourself, "it is what business I'm in." Now stop and think. Many shop owners have gone broke
and others have wasted their life savings because they did not define their businesses in detail.
(For example, if you sell corsetry, you are not really just in the “lingerie” business, corsetry is a
Business Planning Workbook - 6
niche. Your target market and advertising venues would be totally different from a shop that
specialized in “bra-fittings”)

A clearly defined business will not only help your planning, it could mean greater profits.

Decide what business you are in and write it down. Define your business. To help you decide,
think of answers to questions like:

What do you buy? ______________________________________________________

What do you sell? ______________________________________________________

Which of your lines of goods yields (or will yield) the greatest profit?

If you have already started selling, what do people ask for?

What are you trying to do better, more of or differently than your competitors?

III. Marketing
When you have decided what business you are in, you are ready to consider another important
part of your business plan: Marketing

Successful marketing starts with the owner-manager. You must know the merchandise you sell
and the needs of your customers you can appeal to. The objective is to move the stock off the
shelves and display racks at the right price and bring in sales dollars.

The following section is designed to help you work out a marketing plan for your lingerie
business.

Determining the Sales Potential

In retail, your sales potential depends on location. Like a tree, a store has to draw its nourishment
from the area around it.

Business Planning Workbook - 7

The following questions should help you to work through the problem of selecting a profitable
location.

(Although this booklet is mainly geared toward opening a physical lingerie shop, all of the
questions can in some way also be applied to a home business or an online web business. For a
home business, your “shop” will be your home office/studio or the place in which you will store
or display your merchandise and fill orders. For an online business your “shop” will be your
web store and the place in which you will store your merchandise and fill your orders. See the
Appendix for more considerations for an online web business and home business.)

In what part of the city or town will you locate?

___________________________________________

Why did you choose this particular location?

___________________________________________________________________________

Now consider these questions that will help you narrow down a site in your location area.

What is the competition in the area you have picked?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

How many of the stores look prosperous?

___________________________________________________________________________

How many look as though they are barely getting by?

___________________________________________________________________________

How many stores went out of business in this area last year?
___________________________________________________________________________

How many new stores opened up last year?

___________________________________________________________________________

What price point does your competition carry?

___________________________________________________________________________

Business Planning Workbook - 8

 Which store or stores in the area will be your biggest competitor(s)?
___________________________________________________________________________

Other considerations:

• What size store do you need?

____________________________________________________________

• What type of store building will allow you to create the shop you envision?
_____________________________________________________________
_____________________________________________________________

Again, write down the reasons for your opinions. Also write out an analysis of the area's
economic base and give the reason for your opinion.

Is the area in which you plan to locate supported by a strong economic base?

Did any businesses go out of business in the past several months?

Are new businesses scheduled to open in the next several months?

What is the average income of nearby residents?

When you find a building that seems to be what you need, answer the following questions:
Is the neighborhood starting to get run down?
Is the neighborhood new and growing?
Are any super highways or throughways planned for the area?
Is street traffic fairly heavy all day?
Do pedestrians look like prospective customers?
Are there adequate parking spaces convenient to your store?
Are the sidewalks in good repair (you may have to repair them)?
Is the street lighting good?
Is your store on the sunny side of the street?
What is the occupancy history of the building? Does it have a reputation for failures? (Have
stores opened and closed after a short time)?
Why have other businesses failed in this location?
What is the physical condition of the store?
What service does the landlord provide?
What are the terms of the lease?
Business Planning Workbook - 9
 How much rent must you pay each month?

When you think you have finally solved the site location question, ask your banker to
recommend people who know most about locations in your line of business. Contact these
people and listen to their advice and opinions, weigh what they say, then decide.

Attracting Customers
Once you have a location in mind, begin work on your next area of marketing.

How will you attract customers to your store?

How will you pull business away from your competition?

It is through working with this aspect of marketing that many small retailers find competitive
advantages. The ideas you develop here will often be as good, if not better, than those of larger
companies.

The sections that follow are designed to help you think about image, pricing, customer service
policies and advertising.

Image
A store has an image whether or not the owner is aware of it. For example, throw some
merchandise onto shelves and onto display tables in a dirty, dimly lit store and you've got an
image. Shoppers think of it as a dirty, junky store and avoid coming into it. The same
merchandise displayed in an attractively lit well-organized store with chandeliers, antique tables,
well-kept hangers, and a well-dressed staff, etc. can project a luxury image. Your image should
be focused enough to promote in your advertising and other promotional activities.

Write below the image that you want shoppers and customers to have of your shop.

Business Planning Workbook - 10

Pricing
Value perceived is the key to pricing. A store can have low prices by selling low-priced
merchandise. Thus, what you do about the prices you charge depends on the lines of
merchandise you buy and sell. Pricing also depends on what your competition charges for these
lines of merchandise. Your answers to the following questions should help you to decide what to
do about pricing.

In what price ranges are your lines of merchandise sold:

____High ___ Medium ___ Low

What services will you offer to justify your prices if they are higher than your competitor's
prices?
___________________________________________________________________________
___________________________________________________________________________

Will you sell for cash only? _______

If you use credit card systems, what will they cost you?

Customer Service Policies

The service you provide your customers may be free to them, but you pay for it. For example, if
you provide free parking, you pay for your own parking lot or pick up your part of the cost of a
lot you share with other retailers. Maybe you have decided to offer free alterations. Free bra-
fittings. Or free classes and workshops. Make a list of the services that your competitors offer
and estimate the cost of each service.

How many of these services will you have to provide just to be competitive?

Are there other services that would attract customers but that competitors are not offering?

Business Planning Workbook - 11

If so, what are your estimates of the cost of such services?

Now list all the services you plan to offer and the estimated costs.

Total this expense and figure out how you can include those added costs in your prices without
pricing your merchandise out of the market.

Who is your customer?

Describe your typical customer?

Age
Male, female, both
Number in family
Annual family income
Location
Buying patterns
Reason to buy from you
Other
Geographically describe your trading area (i.e. community, province, national)

Economically describe your trading area (single family, average earnings, number of children)

Advertising
Consider advertising last, after you have determined your image, price range, and customer
services. Only then are you ready to tell prospective customers why they should shop in your
store.

Business Planning Workbook - 12

When advertising dollars are limited, it is vital that your advertising be on target. Before you can
consider how much money you can afford for advertising, take time to determine your
advertising goals.

What are the strong points of your store?

What facts about your store and its merchandise should you tell prospective customers?
What is the image of your store that you want all your advertising to project?
What makes your store different from your competitors?

When you have answered these questions, you are ready to think about the form and potential
cost of your advertising.

A typical advertising budget for a specialty store ranges from 3-5 percent of total sales, but can
be as high as 10 percent.

A new store usually needs to advertising more aggressively than a well established one. Some
sources recommend doubling your advertising budget for the first year you are in business.

Ask the local media (newspapers, radio and television, and direct mail services) for information
about the services and results they offer for your money.

As a new business your task in determining how much to spend for advertising comes down to
the question, "How much can I afford to spend and still do the job that needs to be done?"

In-Store Sales Promotion

To complete your work on marketing, you need to think about what you want to happen after
prospects get inside your store. Your goal is to move stock off your shelves and displays at a
profit and to satisfy your customers. You want repeat customers and money in your cash register.

At this point, if you have decided to sell for cash only, or only offering acceptance of one or two
credit cards, or have chosen to not accept checks, take a second look at your decision. Don't
overlook the fact that people like to buy on credit. Often a credit card, or other system of credit,
is needed to attract and hold customers. Customers will have more buying confidence and be
more comfortable in your store if they know they can afford to buy. Credit makes this possible.
Most merchant credit card services automatically will sign you up to accept all 4 major cards. If
given a choice, choose to accept them all. These same merchant services also offer check
validation services for an extra charge.

To encourage people to buy, self-service stores rely on layout, attractive displays, signs and
clearly marked prices on the items offered for sale. Other boutique stores combine these
techniques with personal selling.

Business Planning Workbook - 13

List the display counters, racks, special equipment (cash registers/point of sale systems, etc.) and
other fixtures. Figure the cost of all fixtures and equipment by listing them here:

Type of Equipment Cost Type of Equipment Cost

Draw several layouts of your store and attach the layout that suits you to this page.

Determine how many signs you may need for a twelve month operation and estimate that cost
also.

If your store is a combination of self-service and personal selling, how many sales persons and
cashiers will you need?
Estimate, I will need ___ sales persons at $_______ each week (include payroll benefits in this
salaries cost).
In a year salaries will cost $________.

Personal attention to customers is one strong point that a small boutique store can use as a
competitive tool. You want to emphasize in training employees that everyone has to pitch in and
get the job done. Customers are not interested in job descriptions, but they are interested in being
served promptly and courteously. Nothing is more frustrating to a customer than being ignored
by an employee. Decide what training you will give your sales people in the techniques of how
to greet customers, show merchandise, suggest other items, and handle customer needs and
complaints.

III. Buying
Some considerations when buying merchandise for resale, are questions such as:

Who will be your major suppliers?

Business Planning Workbook - 14

 For each supplier, what delivery service can you get and must you pay shipping charges?

What are the terms of buying? Is there a minimum order requirement?

Can you get credit?

How quickly can the vendor deliver orders? Reorders?

You should establish a source of supply on acceptable terms for each line of merchandise and
estimate a plan for purchasing and reordering.

Stock Control
Often shoppers leave without buying because the store did not have the items they wanted or the
sizes and colors were wrong. Stock control, combined with suppliers whose policies on reorders
are favorable to you, provides a way to reduce "walkouts".

The type of system you use to keep informed about your stock, or inventory, depends on your
lines of merchandise and the delivery dates provided by your suppliers.

Your stock control system should enable you to determine what needs to be ordered on the basis
of:
• What is on hand.
• What is on order.
• What has been sold.

There are standard retail inventory software systems available. Check the appendix in the
Wholesale Directory for a few resources. Otherwise your accountant can set up a system that is
best for your business. Inventory control is based upon either a perpetual or a periodic method of
accounting that involves cost considerations as well as stock control. When you have decided
what system you will use to control stock, estimate its cost.

______________________________________________________________________________

You may not need an extensive (and expensive) inventory control system because you do not
need the detailed information such a system collects. The system must justify its costs or you
will just waste money and time on a useless effort.
Business Planning Workbook - 15
Stock Turn Over
When an owner-manager buys reasonably well, you can expect to turn over stock several times a
year. What is the average stock turnover per year of your line of merchandise? How many times
do you expect your stock to turn over? List the reasons for your estimate.

Behind-The-Scenes Work
In a retail store, behind-the-scenes work consists of the receiving of merchandise, preparing it for
display, maintaining display counters and shelves, and keeping the store clean and attractive to
customers. The following analytical list will help you decide what to do and the cost of those
actions.

First list the equipment (for example a marking machine for pricing, shelves, a cash register) you
will need for:

receiving merchandise

preparing merchandise for display

maintaining display counters and shelves

keeping the store clean.

Next list the supplies you will need for a year, for example, brooms, price tags and business
forms.

Who will do the backroom work and cleaning that is needed to make a smooth operation in a
store?
If you do it yourself, how many hours a week will it take?
Will you do these chores after closing?
If you use employees, what will they cost?
On a worksheet describe how you plan to handle these tasks.

For example:

Business Planning Workbook - 16

 Backroom work will be done by one employee during the slack sales times of the day. I
estimate that the employee will spend_____ hours per week on these tasks and will cost
$______ (number of hours times hourly wage) per week and $________ per year.

I will need _______ square feet of space for the backroom operation. This space will cost
$______ per square foot or a total of $_________ per month.

List and analyze all expense items in the same manner. Examples are utilities, office help,
insurance, telephone, postage, accountant, payroll taxes, and licenses or other local taxes. If
you plan to hire others to help you manage, analyze these salaries.

IV. Put Your Plan into Dollars

At this point, take some time to think about what your business plan means in terms of dollars.
This section is designed to help you put your plan into dollars.

The first question concerns the source of dollars. After your initial capital investments, your
main source of money is sales.

What sales volume do you expect to do in the first twelve months? Write your estimate here
$_______ and justify your estimate.

Start-up Costs (see also start up costs worksheet on page 20)

List the following estimated start-up costs:
Fixtures and equipment $____________
Starting inventory $____________
Decorating and remodeling $____________
Installation of equipment $____________
Deposits for utilities $____________
Legal and professional fees $____________
Licenses and permits $____________
Advertising for the opening $____________
Accounts payable $____________
Other expenses $____________
Operating cash / working capital $____________
Total
$____________

Business Planning Workbook - 17

Expenses
In connection with annual sales volume you need to think about expenses. If, for example, you
plan to do sales amounting to $100,000, what will it cost you to do this amount of business? How
much profit will you make? A business must make a profit or close.

A suggested list of expenses to consider is as follows:

• advertising
• bad debts
• delivery/shipping
• depreciation (other than real estate)
• donations
• dues and subscriptions
• insurance
• interest
• legal and accounting expenses
• occupancy expenses
• office supplies and postage
• payroll and other employee expenses
• supplies
• taxes (other than real estate and payroll)
• telephone and fax
• travel, buying and entertainment
• miscellaneous expenses

Cash Forecast
A budget helps you to see the dollar amount of your expected revenue and expenses each month.
Then from month to month the question is: Will sales bring in enough money to pay the store's
bills?

As the owner-manager you must prepare for the financial peaks and valleys of the business
cycle. A cash forecast is a management tool that can eliminate much of the anxiety that can
plague you if your sales go through lean months.

Can you make your sales goal?

The following is a formula that can be used to calculate if you can
and how to reach your sales goals:

Business Planning Workbook - 18

 If, you have to sell $20,000 a month to meet your overhead you would take your
average price point, lets say it is $55, and divide it by the $20,000. Your store
would need to make around 364 sales each month. If you were open 6 days a
week 8 hours a day, you would need to make about 16 sales a day or 2 sales
an hour. If half the people who shop at your store buy, then you would need 32
people a day to stop at your store. (For a web store the conversion is usually
much less (with a range of between 1-15%)

Use this formula and plug in your own numbers. Maybe your sales conversion
rate is much higher. Maybe your average sale is $100 instead of $55. This
formula can also be used to plan advertising and marketing goals to increase
store traffic and your average sale (like having impulse items near the checkout).

Suppose at this point that your business needs more money than can be generated by present
sales. What do you do? If your business has great potential or is in good financial condition, as
shown by its bank balance sheet, you can borrow money (from a bank most likely) to keep the
business operating during start-up and slow sales periods.

The loan can be repaid during the fat sales months when sales are greater than expenses.
Adequate working capital is needed for success and survival: but cash on hand (or the lack of it)
is not necessarily an indication that the business is in bad financial shape. A lender will look at
your balance sheet to see the your business’ net worth of which cash and cash flow are only a
part. The sample balance sheet statement format shows a business’ net worth (financial position)
at a given point in time, say as of the close of business at the end of the month or at the end of
the year.

Even if you do not need to borrow money, you may want to show your plan and balance sheet to
your banker. It is never too early to build good relations and credibility (trust) with your banker.
Let your banker know that you are a manager who knows where you want to go rather than
someone who merely hopes to succeed.

Control and Feedback

To make your plan work you need feedback. For example, the year-end profit and loss (income)
statement shows whether your business made a profit or took a loss for the past twelve months.

Don't wait twelve months for the score. To keep your plan on target you need readings at
frequent intervals. An income statement compiled at the end of each month or at the end of each
quarter is one type of frequent feedback.

Also you must set up management controls that help you insure that the right things are done
each day and week. Organization is needed because you as the owner-manager cannot do all the
work. You must delegate work, responsibility and authority. The record-keeping systems should
be set up before the store opens. After you're in business it is too late.

Business Planning Workbook - 19

The control system that you set up should give you information about stock, sales, receipts and
disbursements. The simpler the accounting control system, the better. Its purpose is to give you
current useful information. You need facts that expose trouble spots. Outside advisers, such as
accountants, can help.

Stock Control
The purpose of controlling stock is to provide maximum service to your customers. Your aim
should be to achieve a high turnover rate on your inventory. The fewer dollars you tie up in
stock, the better. In a small store, stock control helps the owner-manager offer customers a
balanced assortment and enables you to determine what needs ordering on the basis of:
• What is on hand
• What is on order
• What has been sold

When setting up inventory controls, keep in mind that the cost of the stock is not your only cost.
There are inventory costs, such as the cost of purchasing, the cost of keeping stock control
records, and the cost of receiving and storing stock.

Sales
In a small store, sales slips and cash register tapes give the owner-manager feedback at the end of
each day. To keep on top of sales, you need answers to questions such as:

How many sales were made?

What was the dollar amount?
What were the best selling products?
At what price?

Disbursements
Your management controls should also give you information about the dollars your business
pays out. In checking on your bills, you do not want to be penny-wise and pound-foolish. You
should pay bills on time to take advantage of supplier discounts. Your review systems should
also give you the opportunity to make judgements on the use of funds. In this manner, you can be
on top of emergencies as well as routine situations. Your system should also keep you aware that
tax monies, such as payroll income tax deductions, must be set aside and paid out at the proper
time.

Business Planning Workbook - 20

Break-Even
Break-even analysis is a management control device that approximates how much you must sell
in order to cover your costs with NO profit and NO loss. Profit comes after break-even.

Profit depends on sales volume, selling price, and costs. Break-even analysis helps you to
estimate what a change in one or more of these factors will do to your profit. To figure a break-
even point, fixed costs (like rent) must be separated from variable costs (like to cost of goods
sold.) The break-even formula is:

Break-even point Total fixed costs / (1 - total variable costs / corresponding

=
(in sales dollars) sales volume)

Sample break-even calculations: Zoe Madison plans to open a small lingerie and bra fitting
studio and estimates her fixed expenses at about $14,000 the first year. She estimates variable
expenses of about $550 for every $1,000 of sales. How much must the store gross to break-even?

BE Point = $14,000 / (1 - 550 / 1,000) (one minus the total of $550 divided by $1000)
= $14,000 / (1 - .55) (one minus .55)
= $14,000 / .45
= $31,111

Zoe must gross $31,111 the first year to break-even.

Is Your Plan Workable?

Stop when you have worked out your break-even point. Whether the break-even point looks
realistic or way off base, it is time to make sure that your plan is workable.

Take time to re-examine your plan before you back it with money. If the idea is not workable,
better to learn it now than to realize six months down the road that you are pouring money into a
losing venture.

In reviewing your plan, look at the cost figures you drew up when you broke down your
expenses for the year (operating ratios on the income statement). If any of your cost items are too
high or too low, change them. You can write your changes above or below your original entries
on the worksheet. When you finish making your adjustments, you will have a REVISED
projected statement of sales and expenses.

Business Planning Workbook - 21

With your revised figures, work out a revised break-even analysis. Whether the new break-even
point looks good or bad, take one more precaution. Show your plan to someone who has not
been involved in working out the details with you. Get an impartial, knowledgeable second
opinion. Your banker, or other advisor may see weaknesses that failed to appear as you went
over the plan details. These experts may see strong points that your plan should emphasize.

V. Put Your Plan into Action

When your plan is as thorough and accurate as possible, you are ready to put it into action!

Keep in mind that action is the difference between a plan and a dream. If a plan is not acted
upon, it is of no more value than a wishful dream.

A successful owner-manager does not stop after gathering information and drawing up a
business plan, as you have done in working through this booklet. USE the plan. Use it to guide
you.

At this point, look back over your plan. Look for things that must be done to put your plan into
action. What needs to be done will depend on your situation and goals. Have you more money
to put into this business? Have you less than you need? Can you borrow from friends and
relatives? From your bank? From your suppliers (through credit terms)? If you are starting a
new business, one action may be to get a loan for fixtures, stock, employee salaries, and other
expenses. Another action will be to find and to hire capable employees.

Now make a list of things that must be done to put your plan into action. Give each item a date
so that it can be done at the appropriate time.

To put my plan into action, I must:

Do (action) by (date)

Business Planning Workbook - 22

Keep Your Plan Current
Once you put your plan into action, look out for changes. They can cripple the best business no
matter how well planned. Stay on top of changing conditions and adjust your business plan
accordingly. Sometimes the change is within your business. For example, several of your sales
persons may quit. Sometimes the change is with customers whose desires and tastes shift and
change or refuse to change. Sometimes the change is environmental as when a new competitor
moves into the area.

In order to adjust your plan to account for such changes, you, the owner-manager, must:

Be alert to the changes that come about in your line of business, in your market and in your
customers.
Check your plan against these changes.
Determine what revisions, if any, are needed in the business plan.

The method you use to keep your plan current so that your business can weather the changing
forces of the market place is up to you. Read the trade and business papers and magazines and
review your plan periodically. (See appendix in your lingerie directory for list of trade sites and
magazines.)

Once each month or every other month, go over your plan to see whether or not it needs
adjusting. Make revisions and put them into action. You must be constantly updating and
improving. A good business plan must evolve from experience and the best current information.

A good business plan is good business.

Business Planning Workbook - 23

 Competitor Analysis Worksheet
This work sheet will help you analyze your competitors. Competitors are retailers/vendors that make products
or perform services the same or very similar to yours (i.e., you do bra-fittings, and so do they) or make
products or perform services that can be substituted for yours (i.e., pajamas, night gowns, etc.). Fill in the
following worksheet about your competitors. You may need to create additional sheets to have enough room for
all those you consider your major competitors.

Competitor A Competitor B Competitor C

Where is your competitor located?

What are your competitor’s annual sales?

What are your competitor’s strengths?

What are their weaknesses?

What is the company’s product line?

How do the products compare to yours, in

terms of quality, appearance and any
other criteria?

What is their price structure?

What are the company’s marketing

activities?

Who are the company’s suppliers for

products?

What are the strengths and weaknesses of

their sales literature?

Is the company expanding or cutting

back?

Business Planning Workbook - 24

 Target Market Worksheet
1. Describe your idea:











































































































































































































































































































2. Where are similar concepts used and/or sold?




















































































































































3. What places do your prospects go to for recreation?




















































































































































4. Where do your prospects go for education?





















































































































































5. Where do your prospects do their shopping?




















































































































































6. What types of newspapers, magazines, newsletters do your prospects read?




















































































































































7. What TV and radio stations do your prospects watch and listen to?















































Business Planning Workbook - 25
 Startup Costs Worksheet
The following two work sheets will help you to compute your initial cash requirements for your
business. They list the things you need to consider when determining your startup costs and
include both the one-time initial costs needed to open your doors, and the ongoing costs you'll
face each month for the first 90 days.

Startup Capital Requirements - One-time Startup Expenses:

Startup Expenses Amount Description

Advertising Promotion for opening the business
Starting inventory Amount of inventory required to open
Building construction Amount per contractor bid and other
Cash Amount needed for the cash register
Decorating Estimate based on bid if appropriate
Deposits Check with utility companies
Fixtures and equipment Use actual bids
Insurance Bid from insurance agent
Lease payments Fee to be paid before opening
Licenses and permits Check with city or state offices
Miscellaneous All other
Professional fees Include CPA, attorney, etc.
Remodeling Use contractor bids
Rent Fee to be paid before opening
Services Cleaning, accounting, etc.
Signs Use contractor bids
Supplies Office, cleaning, etc. supplies
Unanticipated expenses Include an amount for the unexpected
Other
Other
Other

Total Startup Costs Amount of costs before opening

Business Planning Workbook - 26

Startup Capital Requirements – Repeating Monthly Expenses:

Expenses Amount Description

Advertising
Bank service fees
Credit card charges
Delivery fees
Dues and subscriptions
Health insurance Exclude amount on preceding page
Insurance Exclude amount on preceding page
Interest
Inventory See **, below
Lease payments Exclude amount on preceding page
Loan payments Principal and interest payments
Office expenses
Payroll other than owner
Payroll taxes
Professional fees
Rent Exclude amount on preceding page
Repairs and maintenance
Sales tax
Supplies
Telephone
Utilities
Your salary If applicable for first three months
Other
Total Repeating Costs
Total Startup Costs Amount from preceding page

Total Cash Needed

*Include the first three months’ cash needs unless otherwise noted.
**Include amount required for inventory expansion. If inventory is to be replaced from cash sales, do not include here. Assume
sales will generate enough cash for replacements.

Business Planning Workbook - 27

 Mission Statement Worksheet

To develop an effective mission statement, ask yourself these questions:


Why does my company exist? Who do we serve? What is our purpose?


What are our strengths, weaknesses, opportunities and threats?


Considering the above, along with our expertise and resources, what business should we be in?


What is important to us? What do we stand for?

Now that you’ve answered those questions, you are ready to write your own mission statement here:

Business Planning Workbook - 28

 -Appendix-
The Red Tape - Permits and Licenses

The following are general requirements for starting a retail business.

Business License
You need a business license to operate legally almost everywhere. If your business will be
located within incorporated city limits, a license must be obtained from the city, if the outside the
city limits, then from the county. For more information contact the county or city office in your
area.

Resale License (aka Sellers Permit, Sales Tax ID Number)

In your state there is a percent sales and use tax which you must collect from your customer on
taxable purchases. This permit also allows you to buy merchandise at wholesale without
paying sales tax (such as at local wholesale supply houses or at trade shows). A sales tax
number is required before opening. The number, plus instructions for collection, reporting and
remitting the money to the state on a monthly basis can be obtained from your state government
office.

Employer Identification Number

If you will be hiring employees or if you have incorporated your business with yourself as an
employee, the IRS requires you to obtain an employer identification number (EIN). This is the
number used to identify your business as a withholder of income tax and Medicare and FICA
(social security) from payroll checks. The IRS offers a packet of information on these guidelines
and how to remit this money to the government. States with income tax requirements may
require a separate identification number. Contact your state’s Department of Revenue for more
information.

Certificate of Occupancy
If you are planning on leasing space for your business, you may have to apply for a Certificate of
Occupancy from a city or county zoning department. For more information contact the county or
city office in your area.

Business Organization
There are many forms of legal structure you may choose for your business. The most common
structures are Sole Proprietorship, General and Limited Partnership, a Limited Liability
Company and C and S Corporations. Each legal structure offers organizational options which are
appropriate for different personal situations and which affect tax and liability issues. I suggest
you research each legal structure thoroughly and consult a tax accountant and/or attorney prior to
making your decision.

Business Planning Workbook - 29

Business Insurance
Like home insurance, business insurance protects the contents of your business against fire, theft
and other losses. Contact your insurance agent or broker. Some types of coverage are required
by law, or may be required by your leasing agent; others simply make good business sense.
Some insurance to inquire about for your needs include: liability insurance, property insurance,
business interruption insurance and home office insurance.

Note: If you are establishing an office in your home, it is a good idea to contact your
homeowner’s insurance company to update your policy to include coverage for office and
business equipment. This coverage is not automatically included in a standard homeowner’s
policy.

Leasing Checklist
In many states, commercial leases are not covered under consumer protection laws that normally
safeguard tenant rights. It is assumed that commercial leases are contracts between
knowledgeable business people, and therefore less government regulation is needed than in
residential leases. Thus it is essential to scrutinize every aspect of the lease and renegotiate
unfavorable terms before signing.

Non-Compete Clause
Whenever you run a retail establishment, it’s wise to insist upon a provision that prohibits the
landlord from renting space in or near the same retail center to a competitor.

Dispute Resolution
If there is a dispute involving you and the leaser, by what method will it be resolved?
Negotiating for mediation or arbitration rather than regular court is usually advantageous.

Spatial Specifications
Exactly how much space is being rented, and which areas are included? It is wise to take a tape
measure and confirm the leaser's measurements, as they are often exaggerated. Finding a
discrepancy in reported space and actual space is a valuable bargaining tool. Do you have the
right to move to another space in the complex if you need more room to expand?

Default and Termination

Under what conditions can either party free themselves from the lease and what notice
requirements are needed?

Pets

Business Planning Workbook - 30

If you have pets, will the lease company permit pets in the space?

Rent
Prices are always negotiable in commercial leases, and may depend greatly on concessions made
with regard to other aspects of the lease as well as general market conditions. If options to renew
are considered, what rent increases are allowable, and how are they calculated?

Additional Costs
The cost of utilities, taxes, and maintenance are often passed on to the tenant. If you agree to pay
them, make certain that your portion is in line with the percentage of the building that you
occupy.

Buildouts
Improvements, modifications, and fixtures added to a rental space are called buildouts.
Negotiation should include whether these are allowed, which party will pay for them, and who
owns them after the lease ends.

Sublease
The term "sublease" refers to a transfer of less than the entire term of the lease. Under a sublease,
the subtenant is not directly responsible to the leaser, whose recourse against the subtenant is
only through the original tenant. If your business fails or the location doesn't match your needs,
do you have the leaser's permission to sublet the space to another party?

Term Options
Many new businesses negotiate a short initial lease with one or more options to renew. Options
give you the right to stay by notifying your landlord in writing a certain number of days or
months before the lease expires. Landlords may want a higher rent for the renewal period as well
as an extra fee in exchange for the option.

Keeping the Books

Keeping accurate records is imperative if you want to succeed in any kind of business. You
could have fantastic ideas for your lingerie business, a creative store design concept, cool
business name, a funky logo and have a great sense of style in merchandising your shop or web
business, but unless you become “friends” with the details of record keeping, you can be doomed
to early failure.

Business Planning Workbook - 31

Keeping track of your financial info accurately helps you to tell at a glance what is happening
with your business – which areas are productive and cost effective and which will require the
implementation of changes.

Secondly, accurate, up-to-date records is necessary to provide you with income tax information
that can be easily retrieved and verified come tax time.

Even if you delegate this responsibility to someone else or hire an accountant, you should be
personally involved in the process. Even so, in the initial stages of your business, you should
keep your own books. It will make you doubly aware of what is going on in your business and
save you money that could be used to benefit your business in other areas.

Your business starts as soon as you start to work on your ideas. You don’t even have to wait
until you have your business license to start with record keeping. The purchase of this ebook is
one of your “expenses” that can be recorded right now. (did you print out your receipt?)

What to Buy, What to Buy… .Attending Trade Shows

One of your most difficult decisions when first starting your business, will be how to determine
what to buy and how much. Good customer service and brisk sales hinge on good buying and
purchasing habits because you need to have what your customers want, when they want it.

The first step in making wise purchasing decisions is knowing your target market. Keeping your
target customer in mind can help guide your early buying decisions.

Your first orders (preferably at a trade show) should be broad and shallow, which means you will
probably be purchasing a sampling of a wide variety of merchandise without stocking a large
quantity of each item. Of course you need to order enough merchandise to do an inviting display
of each line you plan to carry, but not so much that you will have “deep” back stock if it doesn’t
sell well. Also, it is important that your initial merchandise assortment features a variety of price
points. Once your store opens, sales will show you what price range your customers are most
comfortable with.

Over time you will learn what items your customers expect to see in your store. Watch for any
trends that emerge in what your customers are looking for. You can’t be all things to all people,
but you should respond to customers’ requests that are within the focus of your range and shop.
The ability to find out what your customers want and get it for them quickly can be one of your
strengths. This is what sets a specialty lingerie shop apart from the department stores.

Secondly, the main types of merchandise that you decide to carry will dictate the related products
that your customers will expect you to stock. If you plan for your store to be a “lifestyle” store

Business Planning Workbook - 32

you may also want to offer candles and bath and body products. These types of add-on items can
attract more repeat visits from customers and produce more sales than your basic stock.

Did you know bra sales account for more than half the sales (and
sometimes up to 80% of the sales) in lingerie boutiques?

As Geraldine Nuval, proprietor of My Boudoir in San

Francisco states in a recent interview in IAB magazine,
“when you first open you’re so excited, but you don’t know
your customer base (as far as sizing goes). Her advice to
new retailers is simple: “Don’t overbuy!”

Trade Show Tips

Begin planning your market trips well in advance.

Come with the proper business identification for getting into the show (check with show
organizers ahead of time), or your show badge and i.d. if you have pre registered.

Allow enough room in your suitcase(s) for bringing back more than you take. This includes
literature, freebies, and product samples.

Go early.

Some exhibitors provide bags, but come prepared by bringing a comfortable carryall for all that
literature.

Estimate your buying budget and stick to it.

Wear comfortable shoes and dress for success. Remember you are a representative of your
shop.

Have a goal of what you want to accomplish, such as which vendors to visit, what items you
need to purchase, what workshops to attend and which new product lines you'd like to see.

Make sure your badge is in plain sight while browsing booths.

Use a worksheet to track purchases.

Business Planning Workbook - 33
Keep all your paperwork organized.

Be prepared with your credit references (if needed, to establish term accounts), pens, business
cards, a calculator, a note book, and a folder for copies of purchase orders.

Know your inventory needs before the show. More efficient purchasing will save you money by
grouping your orders to take advantage of discounts and special offers, as well as keeping you
within budget.

Take advantage of show specials, discounts and sales where they are truly bargains and needed
in your store. Check freight costs and delivery dates. Vendors use show specials to encourage
orders, but don’t feel pressured to order a line that you’re not quite sure about.

One piece of advice by Carol Schroeder, author of Special Shop Retailing – How to Run Your
Own Store is “bring along a sheet of stickers with your store’s name, address and phone number
on them to put on the “sold to” and “ship to” sections on purchase orders. Harried sales people
seem to appreciate this time saver, and you can be sure that your name and address will be
legible.”

Try to attend shows on the weekdays instead of the more crowded weekends if you can. You
will more likely have the undivided attention of the sales representatives.

If you’re a novice, don’t be afraid to tell this to the vendor. Ask for their help. Their
experienced guidance can help you to select the merchandise that will most likely sell well for
your shop or target market.

Stay long enough to visit some of the retail stores in the area. New York especially is rich in
trendy lingerie shops.

Running your Business from Home and on the Web

Many small businesses begin at home. If you have sufficient space, a part of your house can be
converted into an office, showroom and/or boutique. Working at home in the beginning can
keep your overhead low and can be ideal if you have little capital. You can always rent space as
your business expands and more space is needed.

One major consideration is as a home business, how will you get customers?

Business Planning Workbook - 34

Some ideas can be booths at women’s shows, home parties (see lingerie directory for companies)
and open houses. One of the most lucrative can be an online web business.

A Lingerie Business on the Web

With a mail order/web lingerie business there will be little direct contact with your customers.
You will not be able to easily communicate and see those purchasing from you. This can make
targeting your marketing a little more difficult and challenging, but logistically starting a web
business can make more sense if your goal is to work from home or you have a smaller
investment to work with. The potential of a web business is tremendous with the right
development. You can market nationally and globally without regard to your location. You can
operate from practically anywhere in the world. You will still have inventory costs and space
costs (if you have to warehouse inventory), web development costs and monthly fees, credit card
and bank fees, mailing and shipping supplies and printing costs (for marketing materials, post
cards, etc.), equipment costs, etc.

In spite of its potential, a web business offers no success guarantees. The mere act of putting up
a website will not guarantee you traffic or sales. And visitors won’t necessarily guarantee sales
without some sort of motivating factor built into your sales and marketing plan. Marketing on
the internet can be tricky. And you still must have your own well defined market and niche to
truly capitalize off of any long term success with online lingerie sales.

In spite of the mass potential of the web, you still must build a brand, an image and offer
excellent customer service in order to be and remain competitive.

There are many lingerie boutiques online, how will you distinguish yourself from the rest?

Your web image will be crucial and no costs should be spared in the quality and design of your
web presence and even just as important the packaging of your shipments.

Some things to consider in your web or home venture:

Do your local zoning laws allow you to operate a business from home?

Is it necessary to apply for extra insurance coverage? Check your homeowner’s policy and talk
with your insurance broker.

If you plan to operate a home studio, what experience will you create when customers/clients
enter your home? Will they consider it professional?

Apparel can be a tricky sale on the internet. It is extremely important to communicate

conveniently size and fitting information.

Business Planning Workbook - 35

Will you have a return policy if something doesn’t fit?

Consider having a web cart with inventory control/counts, so that you don’t oversell a product
and have to disappoint a customer when you are out of stock on something pictured.

Optimizing keywords on your web site can be an inexpensive (practically free if you know a
little about web design) way to build traffic to your site. If you specialize in “vintage lingerie”
and someone searches for “vintage lingerie” online, will they find you? Vintage lingerie should
be prominent on your site as well as rich in your descriptions.

Consider starting a blog. A web blog is an inexpensive innovative way to build awareness and
potential clients among your readership. Most blogs, because they are text rich, have the
potential to generate more search engine traffic than the average product-rich web store. Write
about new products, new styles, new seasonal colors. Use your keywords (i.e. “vintage
lingerie,” “plus size lingerie,” “custom corsetry,” etc. throughout your text copy.) Links can be
added to pictures in your blog and potential clients can be lead directly to your store.

For more web business resources and pre-designed lingerie business website templates, see
“Web Business” resources in the back of your wholesale Lingerie Directory.

Reference Sources
Entrepreneur Magazine
How to Open and Run a Successful Retail Store, Mercedez Gonzales, The Global Purchasing Group, Inc.
Saskatchewan Regional Economic and Co-operative Development
Specialty Shop Retailing – How to Run Your Own Store by Carol L. Schroeder (John Wiley & Sons Publishing)
U.S. Small Business Administration

Copyright 2008. LingerieKitty USA

info@lingeriekitty.com

Business Planning Workbook - 36