Essay About Main Store And Sneaker Boutique

Financial Ventures
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Lewis Hodge        Financial VenturesPaul WilsonMay 11, 2015EXECUTIVE SUMMARY“Sole mate” is a sneaker boutique that was established in 2015. “Sole Mate” focuses on meeting the needs of all sneaker collectors around the St. Louis area. As the company expands the target market will expand as well. The boutique will then cater to individuals all over the world.  The scope of this business is very specific. there will be one main store, 1200 square feet, with a store front and two storage areas. This store will be located in Brentwood Missouri. With a very promising market plan, success will be definitely on the agenda of this company. This document highlights the great pricing, promotion, and distribution strategy of “Sole Mate”. The success of this business is not only based on false hope, the financial statement shows the projected revenue for the first two years of the business. This is shown on the income statement and balance sheet. Also, when doing business it is evident that there will be certain risk and opportunities. This document highlights how the company will deal with particular risk and what opportunities they will take.BUSINESS DESCRIPTIONMy business venture is a sneaker boutique. This sneaker boutique will go by the name of Sole mate. This may appear to be a simple business; however, this can be very lucrative as long as the correct approach is taken. This business will meet the need of sneaker collectors who buy collector shoes as they release every week. Also, individuals who buy sneakers for athletic purposes as well. Sole mate will fall into the industry of shoe retailers and the NAICS code is 448210. This industry is projected to have a seven percent growth rate; also, global footwear is projected to hit 211 billion dollars in sales by 2018. The boutique will be amongst few sneaker stores that sell retro collectors items in all brands.LITMUS TESTA litmus test was carried out in order to assess if this business was a good venture to pursue or not. Firstly, it was stated that this venture is timely as the demand for shoes increased significantly. Also, it was asked if there is a demand for these products on the current market. It was concluded that there is demand for this type of store as there is only one other store of this nature in the St. Louis area. Lastly it was asked whether this business would create any value to its owners. It was concluded that as business progresses, and debt is paid, investors will benefit from this venture. VENTURE OPPORTUNITY SCREENINGFACTOR CATEGORIESHIGHAVGLOWIndustry/MarketMarket size potential2Venture growth rate3Market share (year 3)2Entry barriers1Pricing/ProfitabilityGross margins2After-tax margins2Asset intensity3Return on Assets3Financial/HarvestCashflow breakeven2rate of return3IPO potential1Founders control3Management TeamExperience/expertise2Functional Areas2Flexibility/adaptability2Entrepreneurial focus3Total points by ranking18163Overal total points (OTP)36Average Score2.25SWOT ANALYSISStrengths Established product brand identity.Offer rare collector’s items.Competitive pricing.Weaknesses – Lack of stores to meet customer needs in different locations.-  Inadequate amount of staff.Large amount of diversification in different segments of the industry.Opportunities Become a main distributor for establishedBrands. (Nike, Adidas, Jordan).Take advantage of joint ventureOpportunities. Expand store into a franchise.Threats – Competition in pricing.- Chinese replica market.- Direct competition from other larger sneaker retailers.START UP EXPENDITURESStartup ExpensesAmountDescriptionAdvertising1000Promotion for opening the businessStarting inventory144000Amount of inventory required to openBuilding constructionAmount per contractor bid and otherCash1500Amount needed for the cash registerDecorating3000Estimate based on bid if appropriateDeposits2000Check with utility companiesFixtures and equipment5000Use actual bidsInsurance1000Bid from insurance agentLease payments0Fee to be paid before openingLicenses and permits3000Check with city or state officesMiscellaneous1000All otherProfessional fees10000Include CPA, attorney, etc.Remodeling0Use contractor bidsRent2800 (Monthly)Fee to be paid before openingServices0Cleaning, accounting, etc.Signs500Use contractor bidsSupplies50 (monthly)Office, cleaning, etc. suppliesUnanticipated expenses3400Include an amount for the unexpectedTotal Startup Costs95,600Amount of costs before opening