Milla by Mail Direct, Inc. Business Plan
Milla by Mail Direct, Inc.
Business Plan Draft
Confidential
Inside:
Executive Summary
Business Description
Management and Employees
Operations and Suppliers
Marketing Plan
Philanthropy
Competition
Financing Request
Business Financial Statements
Financial Ratios
Break-Even Analysis
Growth and Exit Strategies
Appendix: Financial Assumptions
Jamila Payne
2450 State Street
Philadelphia, PA
(215) 659-7544
John Christopher
250 East 11th Street
New York, NY 10009
April 20, 2006
Re: Financing Request
Dear John:
I am so glad Sarah introduced us when you were in Philadelphia and that you expressed an interest in seeing my business plan. We are currently seeking to raise an additional $50,000 in capital to expand our mail-order business with a catalog campaign.
Milla by Mail Direct, Inc. (MBM) is a mail-order retailer founded with the purpose of providing a shopping environment that is ideal for women on the go. Milla by Mail makes shopping easy and convenient by offering a multimedia approach to purchasing, including catalog, Internet, and telephone. Our mission is to become the destination fashion resource for style-conscious women by providing quality merchandise, up-to-the-minute fashion information, and a shopping experience that peeks into the customer’s lifestyle.
Our target customer is an active, affluent woman age 25 to 45. She is busy with her career, her community, and her family. She wants her wardrobe to reflect her sense of style and compliment her active lifestyle without the shopping process becoming a task. Our brand offers women image, distinct styling in a broad range of brands and sizes, fashion and trend information, and a memorable shopping experience through a multichannel platform designed to make her relationship with Milla by Mail easy and convenient.
The Milla by Mail Direct competitors are Girlshop.com, Ravin Style, Anthropologie, and Shop Bop. Milla by Mail’s distinctive competencies are the merchandise, the personal expertise of the founder, Jamila Payne, and the shopping experience that is offered to customers. Milla by Mail sets itself apart from the competition by carrying a variety of merchandise that includes well-known brands, up-and-coming designers, and our private-label brand “Milla”—distributed exclusively via the website and, soon, the catalog. MBM is very strategic about the items we carry. All items can be purchased as separates or merchandised back to other items.
My business plan is attached. If you have any questions, please contact me at (215) 659-7544.
Sincerely,
Jamila Payne
Contents
1. Executive Summary
2. Business Description
3. Management and Employees
4. Operations and Suppliers
5. Marketing Plan
6. Philanthropy
7. Competition
8. Financing Request
9. Business Financial Statements
10. Financial Ratios
11. Break-Even Analysis
12. Growth and Exit Strategies
13. Appendix: Financial Assumptions
Executive Summary
Business Description
Realizing a void in clothing for contemporary women, Jamila Payne founded Milla by Mail, a specialty mail-order retail business. Milla means “I got it” in Hindi, the Indian National Language. Milla by Mail is dedicated to providing a quality fashion experience for the style-conscious consumer. The website represents a combination of in-house design and manufactures lines fusing modern sophistication and urban attitude. The company will grow by distributing catalogs in major metropolitan cities throughout the United States, becoming an established resource for fashion information and lifestyle events.
On the MBM website the presentation of clothing is complimented by lifestyle images that represent the Milla by Mail shopper. We take shopping online to a new level by developing marketing campaigns that focus on the lifestyle of the customer. Milla by Mail becomes not just another place to shop. We reach into our customers’ lives and make them a part of the experience.
The catalog and Internet will represent a lifestyle-shopping environment. Women can purchase everything from work to weekend looks. The Milla by Mail clients, contemporary women ages 25–45, will find clothing for their lifestyle through our product line.
Business Contact Information
Milla by Mail Direct, Inc. (MBM)
The Laurence A. Baiada Center for Entrepreneurship in Technology
3225 Arch Street, Ground Floor
Philadelphia, PA 19104
Phone: (215) 659-7544
Fax: (215) 659-7203
Website: www.millabymail.com
Email:
Owner
Jamila Payne
2450 State Street
Philadelphia, PA
Phone: (215) 659-7544
Social Security Number: XXX-XX-XXXX
Jamila Payne, founder of Milla by Mail, has been a fashion stylist and trend expert for many years. She has dressed celebrity artists and entertainers for everything from the stage to the red carpet.
Jamila has been featured in In Style, Entrepreneur Magazine, the San Jose Mercury News, as well as in many other local and national newspapers. She has been honored by the Philadelphia Tribune as “One of Philadelphia’s most Influential under 40.” Jamlia can be seen on shows such as the NBC morning show “10!” presenting the latest fashions or discussing lifestyle trends.
Jamila is high-energy, fun, delightful, and has a great sense of style. She is very humble about her success as an entrepreneur and enjoys sharing her fashion knowledge with people through her traveling fashion workshop “Can You See My Style?”
When Jamila saw the expecting Kelly Ripa wearing one of her own Mimi Maternity designs on television, she knew she had a true talent for knowing what works. As her work responsibilities became more time-consuming, however, Jamila didn’t have the ability to visit all her favorite boutiques. “Shopping has always been special and exciting to me,” she says. “I really enjoy developing my personal style.”
“Many of my coworkers and friends had the same problem. And I realized that busy women need
a place to shop that will do two things: It must represent the perfect compilation of all of their
favorite stores, and shoppers need to have the ability to get there regardless of their schedule.”
Prior to her career as a fashion entrepreneur, Jamila worked for top fashion names including
Anthropologie, Mimi Maternity, Fubu, and Nylon Magazine. Jamila graduated from
Drexel University as a Design and Merchandising Major, currently resides in Philadelphia, and
is working on a book entitled “Shopping for the New Me” scheduled to be released in the fall of 2004.
Professional Relationships
Accountant: Don DeMarco, JLB & Associates, (215) 674-5322
Banker: Sarah Breekman, Bank of America, (215) 674-5200 X 12
Insurance agent: Lionel Hardness, State Farm, (215) 892-2100
Attorney: Richard Gabel, Esq., DSLMH, (212) 259-3208
Board of Advisors
Alice Chamberlain: Co-chairman Step UP Women’s Network. Alice and Jamila meet for lunch once a month to discuss growing the business and involving it in philanthropy related to women’s issues, such as domestic violence, which is Step UP’s primary mission.
Charles Payne: Jamila’s grandfather, a retired Philadelphia investment banker who advises Jamila on financing and operations.
Steve Mariotti: founder of the National Foundation for Teaching Entrepreneurship, Inc., available by phone to Jamila for consultations on networking, business organization, and reaching out to potential investors.
Legal Status: Milla by Mail Direct, Inc. is a Sub-S Corporation incorporated in Delaware.
Purpose: Milla by Mail is a mail-order retailer founded with the purpose of providing a shopping environment that is ideal for women on the go.
Mission: The company mission is to become the destination fashion resource for style-conscious women by providing quality merchandise, up-to-the-minute fashion information, and a shopping experience that peeks into the customer’s lifestyle.
Status: Milla by Mail is an ongoing business that plans to expand to become the go-to destination for style-conscious women by providing quality merchandise and up-to-the-minute fashion information.
Business Type: Non-store retail. The corporate office operates Monday—Friday 9:00am to 5:30pm.
Products/Services: Milla by Mail makes shopping easy and convenient by offering a multimedia approach to purchasing, including catalog, Internet, and telephone. The company brings the elements of boutique shopping to a larger arena. Our goal is to promote the proliferation of individual style by providing an atmosphere where customers can be creative in their shopping experience and develop their own look. We don’t tell our customers how they should look; we just present some great choices, and they take it from there.
Reasoning: Milla by Mail sells women’s apparel and accessories. The company targets women ages 25–45 young professionals and college women. These individuals spend or influence the spending of $200 billion per year.
Women’s roles have shifted in society; not only are they mothers and wives, but they are also moving up the corporate ladder. This shift brings about increased responsibilities and decreased time. Although women do not have the time they once had, they are still expected to dress the part of their new executive role. Women still want access to quality merchandise and fashion information but need to be able to obtain that access quickly and from the convenience of their homes and offices.
Goals
The company plans to achieve the following short- term goals:
Add 3–4 team members (March)
MBM will add team members for the following positions: Marketing/Pr (part-time), Sales/Customer Service (part-time), and Affiliate Marketing Coordinator (Contractor).
Develop the advisory board (March)
The MBM advisory board will provide real-time feedback to the company about its product line and services. The group will consist of the 3 professionals currently involved plus 3 more with professional experience in a variety of industries.
Launch look book (August)
The Milla by Mail look book is the company’s take on the traditional catalog. The book will feature some special items that are not available on the web. It will also introduce “Milla”—the Company’s private-label brand.
Expand private-label brand “Milla” (August)
The Company plans to broaden the assortment by manufacturing more garments under the “Milla” label. Products manufactured under the private-label brand have the highest profit margin.
Grow membership base to 10,000 (December)
MBM will grow the membership base by hosting various contests on the web. The increased membership base will give the company the opportunity to sell advertising space in the e-mails that go out to members.
Industry Trends/Outlook
Non-store retailing is a retail channel that has experienced double-digit growth for close to a decade. The channel consists of catalogs, online retailing, and TV home shopping. Retail Forward projects that non-store retailing will grow at an average annual compound rate of 7.9 percent over the next five years. The e-commerce subset of this channel will grow at an average annual compound rate of 26.5% in the same time period.
E-commerce will grow at a still-powerful 26 percent compounded annual growth rate (CAGR) over the next five years. Barring unforeseen events, e-commerce will grow to $217.8 billion, representing 8 percent of total retail sales by 2007. By 2007, another 26.4 million U.S. households will join the 36.5 million households already shopping online—for a total of nearly 63 million or two-thirds of all U.S. households. Online shopping still makes up a fraction of all retail sales at 4.5 percent; it’s the fastest growing category, according to the National Retail Federation.
Cataloging
In the United States, 7,000 major retail catalog producers are responsible for the average American Family’s receipt of approximately 75 catalogs per year. With so much growth, many retailers are beginning to publish catalogs and many catalog operations have decided to open retail outlets. Nationally, mail-order sales account for 4 percent of the total retail dollars spent.
Catalog sales growth has been outpacing that of the overall industry thanks in large part to the natural synergy between catalog and Internet operations. The mail-order industry has matured, creating a highly competitive environment. Three out of ten start-up catalogs survive after five years. The phenomenal acceptance and growth of the Internet as a complementary channel of marketing for cataloging has opened new vistas for traditional paper catalogs and retailing. The Internet is rejuvenating the catalog industry. New non-traditional mail-order buyers are shopping on the web and, in many cases, have been driven to the Internet by a printed catalog. The two media are interconnected. The paper catalog is unlikely to be replaced by electronic commerce in the next decade because the two channels are quite complementary. Together they will promote growth in direct selling while enhancing the creditability and authority of each marketing channel.
Customers expect to shop when and where they want. And, if you have a multichannel buyer shopping in the store, catalog, and online, retailers have a better customer, as she typically buy more and more often.
A few years ago it was predicted that the catalog would become extinct, mainly because the Internet was emerging. However, according to the Direct Marketing Association, Americans are expected to spend nearly $133 billion shopping through catalogs in 2004, up from $126 billion spent last year.
Catalog shoppers are generally more upscale than non-catalog shoppers and are willing to pay higher price points to get what they want. Catalog shoppers might be won over because they indicated that they had “no preference” when asked to name a “first-choice” department store. Those who shop the catalogs also tend to be familiar with the regular use of modern technology. They are also more likely to own a pet. Catalog shoppers lead more active lives. They like to read more, preferring the editorial, lifestyle, and business/finance pages of the newspaper. Catalogers like to eat in full-service restaurants and go to movies, concerts, and live theater performances.
Online shoppers’ greatest concerns about shopping, in order of importance, are convenience, security, customer service, and price. A study performed by Bruskin–Goldring has determined that 52 percent of women who shop online prefer to do it after 5pm, while 20 percent shop after 8pm. Another finding pegs women as seekers, who begin with a to-do-list, find products and services quickly, and log off. Saving time is the major reason women are turning away from the mall and to the Internet, according to Andrea Claster, president of Claster and Co. Consulting Company.
Online retail sales continue to grow along with the size of the Internet population. While it appears to be a function of economic weakness, the drop in spending per customer is occurring because e-commerce shoppers are starting to look more like the average overall consumer.
One of the more apparent trends in recent years has been the marketing focus of the apparel companies on the Generation Y and Generation X demographic. It comprises 75 million individuals, or 25 percent of the U.S. population, and spends (or influences the spending of) approximately $200 billion a year.
These individuals have been instrumental in changing the rules of corporate and casual dress, demanding stylish clothing that can transition from the office to evening looks. Apparel, and related fashion items, account for a significant portion of adults’ discretionary spending, according to a study conducted by Harris Interactive, a market research firm in Rochester, New York. The study found that, on average, young women ages 18–34 spend 75 percent of their earnings from work on clothing and related accessories.