Ecommerce Fabric Store Business Plan

Gaian Adventure Fabrics will be a small company, starting out with a retail location and a virtual store online.

2.1 Company Ownership

Gaian Adventure Fabric and Notions is a sole proprietorship owned by Martha Thimble.

2.1.1 Start-up Summary

Gaian Adventure Fabric and Notions will incur the following start-up costs:

• Computer system with printer, CD-RW, Microsoft Office, QuickBook Pro, and scanner.
• Phone line with DSL Internet connection.
• Desk, chair, and file cabinet.
• Rack to hold bolts of fabric.
• Shelving to organize all of the notions.
• Large table for cutting fabric.
• Hand rotary fabric cutter, electric rotary fabric cutter, cutting boards.
• Inventory.

Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method.

Gaian Adventure Fabric and Notions will sell a variety of outdoor fabrics and notions for outdoor applications.  These products include:

• Fleece including Malden Mills 100, 200, 300, power stretch, wind bloc, and thermal stretch.
• Coated nylons including ripstop, taffeta, oxford-poly, oxford-nitrile, packcloth-poly, packcloth-PVC, 1000 denier Cordura, 500 denier Cordura, and ballistic.
• Breathable fabrics including no-seeum netting, sport mesh, micromesh, leno mesh, supplex, and taslan.
• Waterproof breathables including 3-layer Gore-Tex, 2-layer Gore-Tex, Sympatex, and Ultrex.
• Notions including Nikwax waterproofing, hook and loop, nylon and polypropylene webbing, grosgraine ribbon, poly herringbone, zipper tape and fixed length zippers, thread, assorted plastic Fastex brand hardware, as well as various patterns.

Gaian Adventure Fabric and Notions’ market can be broken down into three different segments, walk-in customers, Internet customers, and Internet customers from large companies.  Each of these segments will be addressed individually.

4.1 Market Segmentation

Gaian Adventure Fabric and Notions customers can be broken down into three groups:

• Walk-in local customers: these customers live locally and have come into the shop to pick up the necessary products for a project.
• Internet individual customers: these are individuals that are in need of supplies for projects.  This group of customers can be further broken down into orders from the USA and international orders.  International orders will be a decent percentage of the overall individual customers because American fabrics and notions are generally superior to European alternatives and the convenience of ordering Gaian Adventure’s products is enhanced with Internet accessibility.
• Internet-based company orders: some orders will be from people within larger fabric manufacturers such as DuPont’s Cordura department, Gore-Tex, and Malden Mills.  Although people (typically in the prototype divisions) work for the manufacturer of the fabrics, it is often difficult for them to get small amount of the fabric for prototyping.  So oddly enough, some orders will be from Gore-Tex employees purchasing Gore-Tex from Gaian Adventure Fabric and Notions.

4.2 Target Market Segment Strategy

Gaian Adventure Fabric and Notions intends to target the different groups in the following ways:

• Walk-in customers: they will be targeted in two different ways.  The first way is through advertisements in the yellow pages.  This way a local person can just find Gaian Adventure Fabric and Notions by searching under fabrics in the yellow pages.  The other method will be through informal strategic relationships with local outdoor stores as well as with local sewing machine stores.  This will be useful as a lot of people that use sewing machines frequent the sewing machine shops, whether for supplies or classes, and will typically ask them for information.
• Internet customers: these customers will be targeted by submitting Gaian’s website to multiple search engines.  This is useful when an Internet customer is interested in getting supplies, all they have to do is type in a variety of terms into a search engine and the website will appear at the top of the list.  Gaian Adventure Fabric and Notions recognizes that different search engines have different ways of searching, so the submissions will be tailored to each specific search engine.
• Internet-based company orders: Internet customers as the method will be the same. The reality is that the Internet-based company orders just happens, it is not really planned or targeted, but a fact a life, albeit a weird and unexpected one.

4.3 Industry Analysis

The outdoor fabric industry for consumers was for years a small industry that served local needs. Within the last five to seven years there has been the emergence of a couple of mail order companies. Most of the mail order companies have eventually migrated to the Web to enjoy the cost savings. Although they have websites, these sites are nothing special and are not that comprehensive.

4.3.1 Competition and Buying Patterns

Gaian Adventure Fabric and Notions faces competition from several sources:

• Mail order companies. These companies, for whatever reason, have not yet made it to the Internet and therefore are not that significant of a worry.  They typically will print a catalog or some sort of flier and mail it out.  The company will accept orders either over the phone or via mail/fax.  By virtue of the fact that these companies have yet to migrate to the Web indicates a fairly stagnant management team/business direction, therefore these competitors are not of great concern.

• Internet retailers. These companies are similar to Gaian Adventure Fabric and Notions in that they offer their products to basically anyone using the efficiencies of the internet.  There are approximately four Internet retailers.  None of these sites are close in terms of product offerings compared to Gaian Adventure Fabric and Notions.

• Retail outlets. These stores take the form of either dedicated fabric stores like Gaian Adventure Fabric and Notions’ brick and mortar store front, or outdoor retailers such as R.E.I. that carries a LIMITED selection of hardware, notions and fabric.  These retail outlets typically serve the local area and not much beyond this. 

People will often go to a retail outlet if there is one available.  In the Eugene area where Gaian Adventure Fabric and Notions is located there are a few stores that have a limited selection.  There is a retailer about 45 minutes away in Corvallis, OR that has a good selection but no website. 

As the time value of money has increased in the last few years as Americans work harder and longer hours, people are more willing to shop via the Internet, allowing them to shop at whatever time is convenient for them and to be able to view an extensive catalog. For this reason the brick and mortar sales will pale in comparison to the Internet sales. 

Gaian Adventure Fabric and Notions strategy will first recognize that the brick and mortar end of the business will be relatively insignificant to the e-commerce portion.  This is primarily the case because people that consume outdoor fabrics and notions are pretty widespread, there will not be a huge local crowd.  Add the geographic completeness that the Internet offers and you have a huge audience. 

Gaian Adventure Fabric and Notions’ strategy for the Internet orders, the bulk of the business, will be to build as robust of a website as possible.  The site will be robust by having a large product offering, ease of navigation, and ease of purchasing.  The site will be changed frequently to encourage customers to visit often and products will be emphasized to try to pull the customer in.  Specials will be offered and rotated frequently to encourage repeat visits. 

Gaian Adventure Fabric and Notions will use WebTrends Web traffic monitoring software to gain insight regarding their Web customers.  This information will be indispensable for the future modification of products and services to appeal to the customer’s needs.

5.1 Competitive Edge

Gaian Adventure Fabric and Notions’ competitive edge will be their focus on e-commerce.  The brick and mortar side will be serviced by having the same product offerings that the website has as well as having someone in the store to help out with any questions/needs that a customer may have.  This however, is just one small aspect of the overall business.  The foundation of the business is the e-commerce site.  This is the foundation because it is the most cost effective way of operating as a retailer, it serves the largest geographical region, the world, and the site can be serviced from anywhere at any time of the day. 

Currently, there is not an excellent website that sells outdoor fabrics and notions.  You can find some of the products on the Web, but not an extensive selection. 

Gaian Adventure Fabric and Notions will focus on the website as they recognize this is where the highest margins are and the largest target market.  The website as the primary focus will allow Gaian Adventure Fabric and Notions to rapidly gain market share as they will redefine anything on their site to meet the need’s of the customers. 

5.2 Sales Strategy

The sales strategy will differ between the brick and mortar side and the e-commerce side.  For the brick and mortar side, Gaian will attempt to offer superior customer support when customers visit the showroom.  What is meant by this is, when a customer comes in they will be immediately approached and asked if they need help. This is useful for the customer as there are so many small things that Gaian sells that it is impossible to display everything.  The employee will try to elicit what kind of project that they are working on for two reasons 1) to determine what they can offer as an additional accessory for the project, “upselling,” and 2) so they can offer advice on ways to complete the project or things to keep an eye out for.  While this kind of advice occurs occasionally at some stores at the request of the customer, it will be offered by the employee without the customer’s request.   This will give the customer the impression that Gaian is being truly helpful. 

For the e-commerce side, Gaian will make the website as easy as possible for the customer to navigate as well as purchase something.  This is important because Gaian will try to avoid the possibility that the customer 1) cannot find what they are looking for, and 2) that they will put something in their basket to be purchased but leave without purchasing it.  Gaian will also be having meaningful weekly specials to reward customers with great deals who check with the website frequently.  Making the customer’s experience with the site as pleasant as possible will encourage people to buy things.

5.2.1 Sales Forecast

The first month will be used to set up the store front as well as set up the website. There will be no sales activity.  The first three months will have some sales activity but it will be fairly slow. Month four will see some decent activity as people begin to become aware of Gaian Adventure Fabric and Notions. Sales will be great enough to reach profitability by month nine.

5.3 Milestones

Gaian Adventure Fabric and Notions will have several milestones early on:

1. Business plan completion.  This will be done as a roadmap for the organization.  This will be an indispensable tool for the ongoing performance and improvement of the company.
2. Office set up and website launching.
3. Profitability.
4. Revenues exceeding $75,000.

The information normally contained in the Web plan summary can be found in several previous sections.

6.1 Website Marketing Strategy

The marketing strategy for the website as stated early in the plan will be precise submissions to all of the popular search engines so that Gaian Adventure Fabric and Notions is on the top of a list in a relevant search.

6.2 Development Requirements

The developmental requirements for the website will be tapping into the computer science department at the University of Oregon through a networking contact and finding an undergraduate or graduate student who is willing to construct the entire website at a below market rate.  This should be fairly easy to do.

Martha Thimble is the founder and owner of Gaian Adventure Fabric and Notions.  Educationally, Martha has a B.A. in marketing from the University of Portland.  While at Portland Martha worked part time in an R.E.I. store.  This experience was instrumental in providing insight into the outdoor recreation market.  Upon graduation Martha accepted a position to manage the Eugene R.E.I store which she happily accepted. 

While at R.E.I Martha began to pick up sewing, specifically working with outdoor type gear.  She began to teach herself as well as getting taught pointers from the R.E.I. repair person.  This person was an independent contractor who had some equipment set up at the store who did outdoor gear repairs.

Martha stayed at this position for three years gaining incredible insight for managing a store.  Toward the end of her three years she was beginning to get a bit antsy at the store since she was no longer challenged much.  After some careful soul searching she recognized what she needed was to be her own boss, to open her own store.

7.1 Personnel Plan

The first four months of business will be using only Martha. By month five, Martha will hire one person to work full time. This employee will be used for order fulfillment as well as helping walk-in customers.

The following sections will outline important financial information.

8.1 Break-even Analysis

The following table and chart show our Break-even Analysis for the first year.

8.2 Projected Profit and Loss

The following table will indicate projected profit and loss.

8.3 Important Assumptions

The following table details important financial assumptions.

8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

8.6 Business Ratios

The following table outlines some of the more important ratios from the Sewing, Needlework and Piece Goods industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 5131.