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center144145DESIGNS BYKEN00DESIGNS BYKENPHASE 5 INDIVIDUAL PROJECTDESIGNS BY KENKENNETH C HOLMESENTR615-1504B-01PROFESSOR THERESA PAVONEDECEMBER 21, 2015DESIGNS BY KEN INTERNET BUSINESS PLANExecutive Summary:The life of urban man is so hectic. With a daily schedule full of business meetings and deadlines, and an active social life filled with sporting events and outdoor activities, concerts, the club scene, dating, and hanging out with friends, it is no wonder men have so little time to tend to their fashion neeThis is where Designs by Ken comes to the rescue. Designs by Ken is an online men’s wear store that offers a variety of apparel options to fit today’s urban man’s professional and casual needs, and makes the process convenient and fast. 1.1 Mission Statement:The Designs by Ken mission is simple, provide the urban man with apparel options that are current and trendy, meet his apparel needs, and make the process simple and quick. 1.2 Keys to success:Provide a website that is easy to access, navigate, enticing, and provides current and trendy apparel options that fit the urban man’s lifestyle.Provide links to partner apparel websites that offer accessories, socks and underwear, athletic apparel, and dress and athletic shoes, to provide the total look. Maintain a collection where pieces coordinate with multiple items, enabling multiple outfits and looks that easily transition from day to evening. Maintain a strong and positive relationship with the Designs by Ken staff, clothing manufacturer, investors, and partner websites to encourage and foster a positive company culture, and collaborative team environment. Establish and maintain an organized operational structure that fosters fast and reliable product production, delivery to warehouse, and shipping and delivery to the customer.Establish and maintain a solid advertising strategy that promotes Designs and Ken, and entices the target consumer to purchase the product.Establish and maintain a strong professional relationship with entertainment and athletic industry leaders to create sponsorship and media attention.Vision Statement:My vision for Designs by Ken is to start with a website that carries a small collection of professional and casual men’s apparel, and expand the collection and business as visibility and revenues grow. Ultimately, I want to open a Designs by Ken store in West Hollywood, and carry a full collection of men’s apparel, and dress today’s man from head to toe. Additionally, I want to see Designs by Ken apparel in major department stores and private men’s pany Summary:Designs by Ken will offer the urban man fashions that are current, on trend and creative, that will meet the needs of the busy working urban man. Kenneth C Holmes and his team will maintain an efficient and cost effective system that ensures merchandise is promptly received from the manufacturer, and quickly shipped to the customer. Additionally, Designs by Ken will maintain a strong focus on marketing to our target consumer, in all major metropolitan areas across the U.S. The marketing strategy will focus on national and regional publications, internet advertising, trunk shows to obtain department store and men’s shop accounts, fashion shows to increase consumer awareness of the online store and product, and entertainment and athletic venues will be utilized to sponsor industry events.2.1 Company ownership:Designs by Ken will be a partnership which includes: Kenneth C Holmes, Owner, manager and Designer.Investors, Business Partner, Financier, Designer and Collection Advisor.Production Company, Design and Collection Advisor, and product producer.All parties will work together as a team to create product that meets the target consumer’s needs, and encourages and promotes the growth of Designs by Ken. 2.2 Type of organization:Designs by Ken will be registered as an LLC (Limited Liability Corporation). This type of entity will provide personal property and assets protection from business debts and litigation, will tax business profits and losses as owner’s personal income on my tax return, provides all the protections of a corporation without double taxation, and is simple and inexpensive to form. 2.3 Company Culture:Designs by Ken will practice the Social Corporate Culture, which encourages employee collaboration, and fosters teamwork and employee trust. The mission is to build a loyal and skilled team that is responsible, has a sense of identity, and takes pride in their work. The plan is simple, as Designs by Ken grows, team member’s responsibilities will grow, title and pay will grow, ultimately building a team of professionals, dedicated to the growth and success of Designs by Ken, and their career.2.4 Management Style:As the Designs by Ken team leader, I will utilize a hybrid of two styles, Participative and Transformational. The Participative style will encourage team members input, with the final decision on Ken, the manufacturer and the investors, will boost employee morale by making the staff part of the decision process, will encourage the acceptance of change, and will filter out employees who do not want to participate and grow. The Transformational style will require high visibility on my part, will keep my eye on the big picture and delegate responsibility to my employees, and will set goals that must be achieved. Designs by Ken employees will receive business cards to hand out, to promote the website and grow the business. It is my belief that encouraging participation, and delegating responsibility will encourage their personal growth, and foster the team of professionals Designs by Ken will need as the business grows. 2.5 Statement of Ethics: To ensure best business practices are applied to all transactions, a Code of Conduct and Ethics will be assembled and provided to all employees, the investors and clients, and will be enforced to ensure full compliance with all legal, ethical, and professional standards, as well as ensuring a strong ethical standing in the business and consumer community. Designs by Ken will practice a policy that ensures a safe and ethical workplace, provide equal opportunity for all, zero tolerance for discrimination or theft of any kind, the expectation that all employees perform their job to the best of their ability, and established penalties for those who do not comply. This policy will also ensure investors, the manufacturers staff and all parties are treated with respect, professionalism, and the Designs by Ken commitment to all contractual obligations. The Human Resource process will apply best hiring practices, use best judgement when selecting the right personnel, perform background and reference checks, and maintain records of all personnel for promotional and disciplinary needs, including firing. 2.6 Statement of Social Responsibility: Designs by Ken is a proponents of the environment and preserving our planet for future generations. The result is a shipping and packaging program that only uses 100% recycled plastic and cardboard, and full participation in the local Los Angeles recycling program. Designs by Ken is also involved in local functions including fashion shows and benefits that raise funds for local foundations, and the annual West Hollywood Halloween Carnaval, which is the largest street party in the world, it takes place on October 31st, and hosts 500,000 participants. 2.7 Startup Summary:Designs by Ken startup cost will include: production cost of product inventory, monthly rental of warehouse space, set up of electric and phone utilities, LLC registration and state fees, payroll for staffing, setup of office with equipment, software and supplies, creation and maintenance of the website and social media service, setup and configuration of print and radio advertising service, packaging and shipping costs of online orders. While state and federal grants will be sought to enable growth and stability, the sum I am seeking to launch Designs by Ken will be $225,000.PRODUCT COST FOR START-UP LINEProductCost EachQuantityTotalNo-iron cotton long sleeve solid dress shirts$10500$5,000No-iron cotton long sleeve animal print casual shirts$15400$6,000Polyester long sleeve shimmer shirts$10500$5,000Poly/cotton blend slacks$10500$5,000Stretch Slim Denim$10500$5,000Stretch Straight leg Denim$10500$5,000Stretch Loose fit Denim$10500$5,000Total Cost?3400$36,000DESIGNS BY KEN: START-UP COSTS AND REQUIRED INVESTMENTInitial inventory production cost$36,000Warehouse rent for one year$16,200Full service website setup and advertising$8,200Radio and Print Advertising$1,200Customer order supplies and shipping?Office furniture and Equipment$1,400Quick Books Pro$200Warehouse Phone and Electric Service$3,120Liability Insurance$1,200LLC registration $400Additional required cash investment$157,080Total Start-up Costs:$225,000Products:Designs by Ken will offer the urban male styles that are creative and traditional, clean lined, with soft and comfortable fabrics, in season-less and seasonal colors, that easily transition from professional to evening including: 100% no-iron cotton, button down dress shirts, in a variety of solids and patterns.100% no-iron cotton, button down casual shirts, in a variety of creative prints. 100% polyester button down shirting, in a variety of shimmering colors. 50/50 cotton/poly blend dress pants, in traditional colors.Stretch denim, in slim fit, straight leg and loose fit, and available in dark indigo, vintage and black. Shirt sizing from SMALL to XXL.Pant sizing from waist 28 to 42, with inseams from 30 to 36.Additional style and colors will be added based on season, fabrication and color availability, and customer request including: 100% no-iron cotton, button down short sleeve dress shirts, in seasonal colors for spring and summer. Short sleeve casual shirts, in festive colors, patterns and prints, for spring and summer. 100% cotton twill Shorts in seasonal and all season colors.Stretch denim pants in white for spring and summer.Stretch denim shorts in Dark Indigo, Vintage, Black and White. 50/50 cotton/poly blend jackets, to coordinate with dress slacks (suit separates).As Designs by Ken grows, the plan is to expand the collection and include socks and underwear, accessories, active wear, swim wear, pullover shirts (both dress and casual), vests, blazers, jackets and coats. Licensing will be pursued to make expanding the collection easier, less time consuming and costly. Licensing can potentially include: fragrances, socks and underwear, accessories (belts, wallets, and so on) etc., and will be approved by the investors, and myself.Prices currently range from $50 to $100, and new item prices will be based on type of garment and fabrication. Collection pieces will be designed to coordinate with multiple pieces, allowing for many different outfits and looks, and easily transition from day to evening.3.1 Production and distribution chain:Designs by Ken will use the direct to retailer chain of distribution (manufacturer to Designs by Ken to the customer).The production house (ARGYLE Haus of Apparel or Indie Source) will handle production from start to finish, by using their full service package.All supplies and services are 100% U.S. sourced and based.Finished product will be shipped from the manufacturer to my local warehouse.My warehouse will be used for receiving and storing finished product, reviewing and printing online orders, and shipping customer orders.Customer orders will be shipped from my warehouse by USPS or UPS to the customer.3.2 Product Shipping:Designs by Ken will use USPS for domestic orders and UPS for international shipping. Domestic orders $100 and more will ship for free, express shipping is available for $15. All other domestic and international shipping will be charged to customer.3.3 Location: The location of both the manufacturer and the warehouse is Los Angeles. Los Angeles provides a regional base for manufacturing, easy communication between Designs by Ken and the manufacturer, convenient warehousing and shipping to anywhere in the U.S., and around the world. Additionally, it provides an ideal city for making entertainment and athletic industry connections, and the possibility of a Designs by Ken retail shop in West Hollywood. Market Analysis Summary:The men’s wear industry is of global proportion, and each year new manufacturers and designers from across the globe enter the marketplace, making competition for the consumer’s disposable income intense. With increased competition and difficult global time, industry leaders must adapt to maintain their global position. This is done by: utilizing intensive advertising and public relations strategies to maintain their position, build and maintain consumer loyalty, and compete with new competition; and by following fabrication and color changes, adopting new styles based on consumer lifestyle and status, and by staying on top of trends CITATION Lew15 \l 1033 (Pearson, 2015). For 2010, the men’s wear industry generated revenues of over $402 billion, reflecting growth of 14% over five years. Apparel and footwear represent 60% of the total market, and denim generating over $115 billion, with increased demand for premium denim, and reduced demand for low priced denim at just below $3 billion. Revenues of outerwear rose, with pants, shorts and shirting showing the highest volume. Neckwear generated $413 million in revenues, and a 26% gross profit. Suiting represented 35% of total revenues, with reduced revenues because of higher unemployment and less disposable income. Canada, South America, and the United States had the largest markets, representing 35% of global revenues CITATION Lew15 \l 1033 (Pearson, 2015). For 2014, China had the fastest growth of the top five developing nations, with $78 billion in industry revenues. The UK experienced a revenue increase of 5%, and continues to maintain strong sales CITATION Lew15 \l 1033 (Pearson, 2015). The men’s wear industry is expected to continue growing, and for apparel producers to maintain their customer base, they will have to use aggressive and targeted advertising, differentiate their collections from the competition’s, and potentially combine tactics to maintain and strengthen their position and market share CITATION Lew15 \l 1033 (Pearson, 2015). 4.1 Industry competition:The men’s wear industry has many major players. The designers and online retailers that Designs by Ken will be competing with include:53041551524000Ralph Lauren: A U.S. based designer whose apparel appeals to the sophisticated male and female consumer. His collection includes men’s wear, women’s wear, children’s wear, the Ralph Lauren Purple Label for men, home fashions, hosiery for men and women, and fragrances. Ralph Lauren has an international presence, with his collection found in major department stores, Ralph Lauren stores around the world, and Ralph . Year to date September 2015, Net Revenues are $3.5 billion, Gross Profit is $2.079 billion, Gross Profit Margin is 57.9%, and Net Income is $224million. The outlook for 2016 indicates revenues expected to increase by 4% globally. The Ralph Lauren strategy remains the same, maintain multiple distribution, merchandising and global differentiation, as well as inspiring design, product development, supply chain, advertising and marketing, and superior customer service CITATION NA1516 \l 1033 (N.A., Ralph Lauren Reports Better-Than-Expected Second Quarter Fiscal 2016 Results, 2015). right635000Calvin Klein: A U.S. based designer whose apparel appeals to male and female consumer who likes clean lined, simple, chic and season-less clothing, that easily transition from professional to evening, and coordinates with many garments. His collection includes men’s and women’s sportswear, couture and denim, and licensed products including: men’s sportswear, outerwear, accessories, lingerie, men’s and women’s hosiery, swimwear, eyewear, furs, and fragrances. He has an international presence, with his collection found in department stores, Calvin Klein stores around the world and Calvin .For 2015, first quarter revenues ending May 3, 2015 were $653.9 million, quarterly earnings were $95.7 million, anticipating the same for the second quarter, and a 6% increase for the entire year. The 2015 figures represent a 5% revenue increase from $665 million, and a 25% earnings increase from $82.1 million from the first quarter 2014. Calvin Klein’s strategy is simple, defy traditional fashion, and utilize provocative advertising that keeps the press talking about him CITATION NA1524 \l 1033 (N.A., Calvin Klein, Inc. Key Developments, 2015).5034915635000Perry Ellis: A U.S. based designer whose apparel appeals to the male consumer who likes styles, colors and patterns that defy tradition, are loose fitting, and stylish for today’s man. He has an international presence, and his collection is found in department stores, Perry Ellis stores around the world, and Perry .For 2015, Annual Revenues were $889.97 million, Gross Income $290.81 million, and Net Income was ($37.18 million). For 2016, annual revenues are $205.4 million and climbing. Perry Ellis International is experiencing reduced income and inventory, net income losses, and is losing market share, but is hopeful for the future. The plan is to continue to provide creative and innovative styling, and enhance their consumer relationship with operational and customer service excellence, to return the company to profitability CITATION NA1518 \l 1033 (N.A., Annual Financials for Perry Ellis International Inc., 2015).: Is an online men’s clothing store that provides men membership and a personal stylist. Your stylist chooses product based on your size, style and budget, or you can make their own selection. They make product selection, purchasing, and return convenient and simple, and send product on a monthly basis, unless cancelled by the member. They offer product from many reputable labels, a full collection of head to toe styling that is classic, casual, preppy and hipster, prices range from $69 to $200, and regular shipping is always free. is backed by venture capital groups, therefore is a privately held company, and their financial are not publicly available. : Topman is a UK based men’s wear retailer, has over 400 stores around the world, as well as their own website. Topman features their own label, as well as up and coming British designers, and will dress the customer from head to toe with chic and casual, dressy and professional apparel. They offer an in-store personal stylist, and free standard shipping. Their prices range from under $10 up to $500, and they provide students a 10% discount. Since Topman is a privately held retailer, their financial are not publicly available.4.2 Target market:The Designs by Ken target market is the U.S. based male consumer with an annual income of $40,000 and up, age 25 to 45, will potentially attract ages 20 to 24 and 46 to 50, is single or married, urban and suburbia, lives in warn and cold climates, enjoys an active social life, does not like to shop, or does not have the time to shop, and has good taste and style. He is 31432501905000“The confident and well-dressed man, who knows what he likes, and expects high quality for a fair price”.The chart data indicates: there are 11.74 million men age 20 to 24, 11.16 million men age 25 to 29, 10.81 million men age 30 to 34, 9.94 million men age 35 to 39, 10.22 million men age 40 to 44, and 10.35 million men age 45 to 49. These figures indicate there are 42.13 million men age 25 to 44, and another 22.09 million men age 25 to 29 and 45 to 49, totaling 64.22 million potential male customers. 5114925236220DESIGNS BYKEN00DESIGNS BYKEN4.3 Slogan and Logo:The slogan is “Apparel for the confident and well-dressed man”The Designs by Ken Logo is: 4.4 Strategy and Implementation Summary:Designs by Ken will apply the following media outlets: Extensive internet advertising on websites specifically geared for men, and social media sites including Facebook and Twitter. National magazines including GQ, Esquire and Men’s Health, to gain national attention.Radio advertising in major metropolitan areas, to gain regional attention in major metropolitan areas.Entertainment production company and celebrity endorsements as they occur.Trunk shows at major department stores and private men’s shops, to gain a retail presence. 4.5 Niche Marketing:Designs by Ken uses the niche marketing approach, because the collection caters to the urban male, age 25 to 45, with an income of $40,000 and up. The collection is designed to appeal to the urban man, however the collection can appeal to the rural man who wants to, or has occasion to wear the urban look.4.6 Competitive advantage:Designs by Ken will offer the urban man a website that is easy to navigate and purchase, helps him find the right look for professional and casual apparel that fits his budget of time and money, convenient delivery options, and will not break the bank. Additionally, all products are completely sourced and produced in the U.S.A., which provides for quick product replenishment, and promotes the PROUDLY MADE IN THE U.S.A movement. The market focus is on the 25 to 45 year, young man, but will also apply to men ages 20 to 24 and 45 to 50, and provides options that make the statement “I am a confident and well-dressed man”.Management Summary:Kenneth C Holmes will be responsible for daily operations, and the design and product decisions will be a coalition between Kenneth C Holmes, the investors, and the manufacturer. Kenneth C Holmes has over 30 years in the retail industry, and a Fashion Design degree from the Art Institute of Fort Lauderdale. The venture capital group has expertise in the field of fashion design and marketing, and the manufacturer has expertise in the field of fashion design, trend research, distribution and marketing. The combined forces of the three will provide enormous input and decision making to produce the best product for the line, drive sales and success.5.1 Personnel Plan:Designs by Ken will start with a staff of two:Kenneth C Holmes, Manager, Staff Coordinator and Designer. One warehouse coordinator, handle receiving orders from the manufacturer, and process online orders.Starting with one warehouse employee, and adding based on sales, time scheduling, and business growth. Designs by Ken Why: After many years in the retail industry, I had the opportunity to work for many excellent leaders, who had high expectations, and provided opportunities for those looking to grow. I also had the dis-privilege of working with managers who have shown no skills or ambition for actually performing their position. These experiences and my background in Fashion Design made me realize I have the instinct for making the right decisions, and the talent and dedication required to start and maintain my own business, with the right employee talent, investors and professional business guidance. Since I studied Fashion Design at the Art Institute of Fort Lauderdale, it has been my dream to create a men’s wear collection that addresses the needs of the urban man, as well as my own. It comes as no surprise that many products on the market today are the result of research to solve a problem the creator has, only to find out that many people across the country have the same problem. Designs by Ken will solve both, fashions that appeal to urban men across the country, and meet my own style and taste.Designs by Ken will also introduce a new competitor to the marketplace, provide better quality product completely sourced and manufactured in the U.S.A., provide the urban male creative options at affordable pricing, the ability to add new products quickly, quick and affordable delivery, quick replenishment, and excellent service. Risk Assessment Summary:All start-up business ventures come with a degree of risk. There is the possibility of under estimating the costs involved, not having sufficient funds to sustain the business, and poor management of the business, causing the business to ultimately fail. The following analyses analyze those risks, and assess the viability of Designs by Ken success.6.1 SWOT Analysis:DESIGNS BY KEN OPPORTUNITY SWOT ANALYSISStrengthsWeaknesses100% sourced and produced in the U.S.A.Ken will need advice and guidance from the producer and investorsProduced and warehoused in Los AngelesKen is a first time entrepreneurConvenient shipping from producer to warehouse Ken will need the approval of the investors for decisionsCost per item allows for reasonable price points?Price points fit the average males budget?The line will appeal to a broad male consumer base?Strong relationship with producer and investors?Designer, producer and investors all experienced in men's wear?Backed by investors who see the value in Designs by Ken?100% commitment from all financial stakeholders?OpportunitiesThreatsTo have the pride in creating my own businessBigger competition could over power Designs by KenTo create wealth for myself, the producer and investorsThe business could take too long to growTo contribute to society by sponsoring charities and fund raisersGrowth opportunities may not present themselvesTo contribute to society by being an employerThe line may not achieve expected revenuesTo be known as a creative and talented men's wear designerThe business could failTo see my creations worn by men across the country and globe?To establish my own schedule?To create the life I have always wanted?The Designs by Ken supply chain is entirely based in Los Angeles, is 100% sourced and produced in the U.S.A., the location makes for easy shipping across the U.S.A. and internationally, all three financial stakeholder have experience in designing and merchandising men’s wear, and Designs by Ken will be backed by a financially strong source.The weaknesses are that Ken will be a first time entrepreneur, and will need the advice of both the producer and investors. The threats are simple, the business may not be as successful as expected, may not grow quickly enough or at all, and could potentially fail. It is my firm belief that Designs by Ken will be successful, with the right combination of product, supply chain and distribution, and advertising, business and revenues will grow, and the investment of $225,000 will be small compared to the returns. I have no doubt the combination of my commitment to the business, and product and business guidance provided by the producer and investors will drive Designs by Ken success, and the producer, investors and myself will see tremendous returns from their investment of time and money. 6.2 NPV and IRR Analysis:YearYear 0Year 1Year 2Year 3Year 4Year 5?Revenue $ 794,000 $ 1,294,000 $ 1,794,000 $ 2,294,000 $ 2,794,000 ?COGS $ (142,920) $ (232,920) $ (322,920) $ (412,920) $ (502,920)?Depreciation $ - $ - $ - $ - $ - ?SG&A $ (95,065) $ (109,324) $ (140,765) $ (167,716) $ (195,444)?Operating Inc $ 556,015 $ 951,756 $ 1,330,315 $ 1,713,364 $ 2,095,636 ?Taxes $ (152,177) $ (308,891) $ (462,300) $ (613,987) $ (765,367)?Net Income $ 403,838 $ 642,865 $ 868,015 $ 1,099,377 $ 1,330,269 ?Add: Depreciation $ - $ - $ - $ - $ - ?Add: Recovery NWC??????Total Cash Flow $ 403,838 $ 642,865 $ 868,015 $ 1,099,377 $ 1,330,269 Cost of Capital10.00%?????Cash flow Input $ (225,000) $ 403,838 $ 642,865 $ 868,015 $ 1,099,377 $ 1,330,269 Discounted CF (225,000) 367,125 531,293 652,153 750,889 825,992 NPV $ 2,902,453 =cf1/((1+n)^1)=cf2/((1+n)^2)=cf3/((1+n)^3)=cf4/((1+n)^4)=cf5/((1+n)^5)PV factor0.90910.82640.75130.68300.6209???IRR224.09%?????The Internal Rate of Return (IRR) calculates a projects profitability based on the estimated cash flows, the cost of capital, and the cost associated with the project. It uses the NPV equation, and sets the NPV value to zero, then determines the discount rate by trial and error, or by using BI software.The NPV discounts future cash flows by the expected rate of return to translate them into today’s dollar value, and provides the baseline for future cash flows.Designs by Ken parameters: Initial investment = $225,000 ($50,000 Net Working Capital (NWC)) Tax rate = 39.6% plus California LLC taxes and fees WACC = 10%NPV: $2,902,453IRR: 224.09%The results:With a Weighted Average Cost of Capital (WACC) of 10%, an IRR of 224.09% more than compensates for the cost of capital.With an NPV of $2,902,453 this figure is well above zero, making this project a viable and profitable venture. Performance standards applied:Appropriate performance measures will be applied to ensure Designs by Ken performs to expectations, meets the requirements established by contract with the investor, meets the needs of the target consumer, and in the process enables the growth of the business, and will include:7.1 Internal measures:Ensure 100% employee compliance with Designs by Ken core values and beliefs, and promotion of the collection on and off the job.Provide comprehensive training to ensure employees complete knowledge and understanding of all procedures for receiving, processing, shipping and product development, all to foster a team environment and employee growth and promotion, and to meet the demands placed on the team as the business grows.Provide quarterly employee evaluations to ensure training, confidence and morale in place, and eliminate any poor performers.Ensure solid contracts, and 100% access to supplies, production and shipping, all to ensure a complete production and distribution chain, all prior to business start-up.7.2 External measures:Ensure the relative price structure is competitive with other designer collection, and the designs are clearly Designs by Ken, ensuring product differentiation.The goal of zero customer complaints regarding product or service, and to eliminate all glitches within six months. These measures will be ensured by providing for customer comments and suggestions on the website, and by providing proper adjustments for any errors in shipping, all to ensure 100% customer satisfaction. 7.3 Customer measures:The goal is to gain 1000 new customers every month, to ensure the growth and stability of the business.The goal is to have no lost customers, and if we lose a customer to win 80% back.The goal is to achieve 100% customer satisfaction at all levels within six months.The goal is to achieve customer repurchase of Designs by Ken products of 100%.The goal is to achieve a Designs by Ken brand preference of 10% within one year.These goals will be measured by providing for customer comments and suggestions on the website to ensure 100% customer satisfaction, and will be achieved by providing products that are on trend and in demand, by listening to customer comment and requests, and through excellent customer service, fast shipping and high product quality.7.4 Market measures:The goal is to achieve first year revenues of at least $794,000.The goal is to achieve first year market share of 1%.The goal is to achieve first year customer base of 12,000.The goal is to achieve first year brand awareness of 25% within one year.These goals will be measured by email surveys (using the Likert scale from 1 to 10), and will ask questions pertaining to product variety and styling, color assortment, how they discovered the Designs by Ken line, their overall satisfaction of the line, their intent to repurchase, and their brand awareness. 7.5 Product assortment, turnover and inventory level:The goal is to have 100% turnover for each season, to provide the level of sales necessary to maintain the business, and to ensure warehouse space for new inventory each season. To maintain sufficient inventory levels of non-seasonal product by maintaining a re-order point, at which the product will be replenished to maintain sales levels.Seasonal products will be re-ordered to maintain sufficient levels for warmer climate regions, but will be maintained at a lower inventory level to ensure space for new product.To provide styles, colors, and product assortment that are on trend, and desired by the Designs by Ken customer base. These goals will be obtained by running sales to reduce inventory before the season close, by staying on trend and seasonal transition, and by reading and acting on Designs by Ken customer requests and comments.7.6 Customer information security measures:The service contracted to design, update and monitor the website guarantees continuous service of the website, with no interruptions in service, and provides security for all Designs by Ken and customer information. The service Designs by Ken will utilize costs more than other services, but it is necessary for establishing the customers trust and confidence in the website, and provides added assurance that both Designs by Ken and customer information (customer account numbers and addresses) cannot be hacked and used for unscrupulous purposes, such as identity theft. Projected First year financial statements:8.1 Balance Sheet:DESIGNS BY KEN BALANCE SHEET: PROJECTION FOR 2016ASSETSQuarter 1Quarter 2Quarter 3Quarter 4CURRENT ASSETS????Cash$141,324$141,495$168,354$193,923Accounts Receivable$0$0$0$0Inventory$26,000$31,000$42,000$39,000Prepaid Expenses$6,250$6,330$6,475$6,830Notes Receivable$0$0$0$0Short-term CD$100,000$140,000$150,000$200,000TOTAL CURRENT ASSETS$273,574$318,825$366,829$439,753FIXED ASSETS????Long-Term Investments$0$0$0$0Land$0$0$0$0Building$0$0$0$0Accumulated Depreciation$0$0$0$0Machinery and Equipment$1,100$1,100$1,100$1,100Accumulated Depreciation$0$0$0$0Furniture and Fixtures$500$500$500$500Accumulated Depreciation$0$0$0$0Other Fixed Assets$0$0$0$0NET FIXED ASSETS$1,600$1,600$1,600$1,600OTHER ASSETS????Goodwill$0$0$0$0TOTAL ASSETS$275,174$320,425$368,429$441,353LIABILITIES????CURRENT LIABILITIES????Accounts Payable$0$0$0$0Accrued Wages$4,800$9,600$9,600$9,600Accrued Payroll Taxes$0$0$0$0Interest Payable$1,125$1,125$1,125$1,125Short-Term Notes$0$0$0$0Current Portion of Long-Term Debts$11,250$11,250$11,250$11,250TOTAL CURRENT LIABILITIES$17,175$21,975$21,975$21,975LONG-TERM LIABILITIES????Mortgage$0 $0$0$0Other Long-Term Liabilities$180,000 $180,000 $180,000 $180,000 TOTAL LONG-TERM LIABILITIES$180,000 $180,000 $180,000 $180,000 TOTAL LIABILITIES$197,175 $201,975 $201,975 $201,975 OWNERS EQUITY????Paid-In-Capital$19,175 $40,100$60,100$80,100Net Income$58,824 $78,350$106,354$159,278TOTAL EQUITY$77,999 $118,450 $166,454 $239,378 TOTAL LIABILITY AND EQUITY$275,174 $320,425 $368,429 $441,353 8.2 Income Statement:DESIGNS BY KEN INCOME STATEMENT: PROJECTIONS FOR 2016CategoryQuarter 1Quarter 2Quarter 3Quarter 4Revenue$129,000$155,000$200,000$310,000Expenses????Product Cost$36,000$30,000$36,000$72,000Warehouse Rent$4,050$4,050$4,050$4,050Website and Social Media$300$300$300$300Radio and Print Advertising $300$300$300$300Free Shipping Expense$420$500$645$1,000Office Equipment$400$400$400$400Electric and Phone$780$780$780$780Quick Books Pro$50$50$50$50Liability Insurance$300$300$300$300Payroll$4,800$9,600$9,600$9,600LLC Registration Fees$100$100$100$100Total Expenses$47,500$46,380$52,525$88,880Gross Income$81,500$108,620$147,475$221,120Tax Rate 28 - 33%$16,962$24,274$35,154$57,355NET INCOME$64,538$84,346$112,321$163,7658.3 Cash Flow Statement:DESIGNS BY KEN CASH FLOW STATEMENT: PROJECTIONS FOR 2016Fiscal Year Begins January 1, 2016 Pre StartupQuarter 1Quarter 2Quarter 3Quarter 4Cash on hand (Period Start)$225,000$216,000$258,613$319,034$406,430Cash Receipts$0$0$0$0$0Cash Sales$0$0$0$0$0Collection from CR accounts$0$129,000$155,000$200,000$310,000Loan/other cash injections$0$0$0$0$0Total$0$129,000$155,000$200,000$310,000Total Cash Available Before Cash Out$225,000$345,000$413,613$519,034$716,430??????Cash Paid Out?????Purchases Inventory$0$36,000$30,000$36,000$72,000Office Equipment$1,100$0$0$0$0Office furniture and fixtures$500$0$0$0$0Gross Wages (Exact Withdrawal)$0$4,800$9,600$9,600$9,600Repairs and Maintenance$0$0$0$0$0Website maintenance and advertising$0$300$300$300$300Radio and Print advertising$0$300$300$300$300Car, delivery and travel$0$100$100$100$100Accounting and Legal$400$0$0$0$0Rent$0$4,050$4,050$4,050$4,050Telephone$0$330$330$330$330Electric$0$450$450$450$450Liability Insurance$0$300$300$300$300Taxes$0$16,962$24,274$35,154$57,355Interest$0$1,125$1,125$1,125$1,125Free customer shipping $0$420$500$645$1,000Cost of website setup$7,000$0$0$0$0Total$9,000$65,137$71,329$88,354$146,910??????Cash Paid Out (non P & L)?????Loan Principal Payment$0$11,250$11,250$11,250$11,250Capital Purchases$0$0$0$0$0Other Start-up Costs$0$0$0$0$0Reserve and Escrow$0$0$0$0$0Owners Income$0$10,000$12,000$13,000$15,000Total$0$21,250$23,250$24,250$26,250Total Cash Paid Out$9,000$86,387$94,579$112,604$173,160??????Cash Position End of quarter$216,000$258,613$319,034$406,430$543,270(All financial based on estimates, results will vary)REFERENCES BIBLIOGRAPHY \l 1033 Gaebler, K. (2015). LLC Advantages and Disadvantages. Retrieved from : ? … ? Forming a Legal Entity ? LLCsHartmann, E. (2015, November 5). Live Chat 5, NPV and IRR Chart. Retrieved from CTU online: chat 5Johnson, R. (2015). 5 Different Types of Leadership Styles. Retrieved from Chron: smallbusiness. ? Human Resources ? LeadershipN.A. (2015, November 19). Annual Financials for Perry Ellis International Inc. Retrieved from Market Watch: investing/stock/PERY/financialsN.A. (2015). British Mens Fashion. Retrieved from Topman: N.A. (2015). Calvin Klein biography. Retrieved from Encyclopedia of World biography: ? Ki-LoN.A. (2015, June 1). Calvin Klein, Inc. Key Developments. Retrieved from Bloomberg Business: research/stocks/private/snapshot.asp?N.A. (2015). Internal Rate of Return. Retrieved from Investopedia: terms/i/irr.aspN.A. (2015). Net Present Value. Retrieved from Investopedia: terms/n/npv.aspN.A. (2015). Perry Ellis Biography. Retrieved from bio: people/perry-ellis-20686321N.A. (2015). Ralph Lauren Biography. Retrieved from bio: people/ralph-lauren-9374814N.A. (2015, November 5). Ralph Lauren Reports Better-Than-Expected Second Quarter Fiscal 2016 Results. Retrieved from Ralph Lauren Quarterly Report: investor.N.A. (2015). The Monthly Clothing Service Entirely For Men. Retrieved from Bombfell: N.A. (2015). United States of America Population 2015 . Retrieved from Pyramids of the World from 1950 to 2100: N.A. (2015). What might the 2016 tax rates look like? Retrieved from My Dollar Plan: tax-bracketsN.A. (2016). California LLC Taxes. Retrieved from Incorporate California: callctax.htmlO'connell, B. (2015). Pros and cons of venture capital and angel investing. Retrieved from : emed/pros-and-cons-of-venture-and-angel...Pearson, L. (2015). Global Men’s Clothing Industry Analysis. Retrieved from Report Linker: ci02122/Men-s-Clothing.htmlRay, L. (2015). Types of Corporate Culture. Retrieved from azcentral: yourbusiness.types-corporate-culture-9942.html ................
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