Belle Femme Boutique

Rachel Buttery

Jui-Lan Chang
Rui Min

Feasibility Analysis

Table of Contents

Business Description .........................................................................................3

Personal Analysis .............................................................................................3
Market Analysis ...............................................................................................4
Market Segmentation ........................................................................................4
Environmental Analysis ......................................................................................5
Internal Audit for Experience Economy ...................................................................5
4 Es and 4 Ps Analysis Chart ...................................................................... 6
Competitive Analysis ........................................................................................5
SWOT Analysis Chart .................................................................................7
Marketing Trends .............................................................................................8
Market Potential ..............................................................................................8
Vision...........................................................................................................9
Mission .........................................................................................................9
Business Objectives and Marketing Strategies ...........................................................9
Financial Analysis
Startup Costs ................................................................................................10
Source of Funds ........................................................................................10, 11
Land and Building Expenses ............................................................................... 11
Income Statement ............................................................................11, 12, 13, 14
Break-Even Analysis ........................................................................................15
Cash Flow ...............................................................................................16, 17
References ...................................................................................................18
Business Description
Belle Femme Boutique is a clothing store that is owned solely by Jui-Lan Chang.
She retains the liability responsibilities as the sole proprietor. Rachel Buttery and

Rui Min have agreed to be General Manager and Assistant Manager, respectively.
The three of us together have agreed on these positions based on how much we will
be contributing to the business.
Belle Femme Boutique offers a wide variety of professional clothing for women
(including dresses, pants, blouses, skirts, and blazers) and accessories (such as
purses and jewelry). We also provide our customers with personalized service from
in-store stylists to help the customers find the perfect clothing items that will lead
them to success in the working industry.
Belle Femmes headquarters and main store is located in New York City.
BelleFemmeBoutique.com will be available online for customers around the world to
purchase our products and communicate with our clothing style professionals.
Phone applications are in demand for our target market so we have created a
phone application for our customers to download for free. This phone application
will provide customers with a social outlet where they can post photos of
themselves wearing professional clothing items. In these photos, users (and us)
can tag clothing items and link them to our website where customers can buy the
items directly from the photos.
Personal Analysis
Belle Femme's sole proprietor, Jui-Lan Chang, was the creator of the Belle Femme
product line. Chang has had an interest in fashion and apparel merchandising since
attending college at Iowa State University. She has been included in many clubs,
projects, and activities related to fashion merchandising.
As close classmates through College, Rachel Buttery and Rui Min were asked to join
her in her journey to create her dream company. Buttery and Min were both
involved in French studies at Iowa State University. This educational background
leads them to help Chang with the creation of the brand name, Belle Femme.
Rachel Buttery has the educational background in Hospitality Management to help
with the operations of the stores. Human resources, training, and management are
her strengths in the business. This makes her fit to be the General Manager of the
boutique.
Rui Min is experienced with accounting and customer services. He has almost four
years working experience in Memorial Union Catering. Working as a supervisor he
has gained strengths in communications and services for customers. This makes
him fit to be the Assistant Manager of the boutique.
Market Analysis
Core customers:
Our core customers are women between the ages of 18-30. The women in this
range are both our main customers and our potential customers. We believe that

we can succeed in having women as our target market because of the size and
diversity of the city we plan to open stores in. We did some research for the
population in New York City, where our headquarters is located, through U.S.
Census Government. (U.S. Census Bureau, 2014)
We found that in 2013, the total population in New York City was 1,626,159 with
52.8% being women. This indicates that more than half of the population is women.
This shows that there is a huge market for us to sell our products. Among this huge
population, there are 85.5% of people, who are above 25 years old and already had
high school education or higher (2008-2012). This takes up the majority population
in New York City. People who finished their bachelors degree or higher are taking
up to 58.1% (also above 25 years old), which is above half as well. Because of the
large percentage of women, we believe that we will have a strong power and
opportunity to gain plenty of women who are entering the workforce as potential
customers. (U.S. Census Bureau, 2014)
Market Segmentation
Geographic Segmentation:
Our headquarters for our business is located in New York City, where the biggest
and most diverse demographic population is located. In the future, we may plan to
expand our business throughout the United States, focusing mainly in big cities,
because these places have a diverse demographic and a variety of markets. For
example, handling our brand to other business owners and locating in Chicago,
which will represent Central America, a couple more located in Florida, Los Angeles,
and other east coast cities. We would also like to expand to France and Italy in the
future, which are considered to be couple of the most fashionable countries in the
world.
Demographic Segmentation:
Our segmentation is focused on the women who are 18 to 30 years old. Generally
these women have a high school level of education, and are ready for their college
professional studies, and women who are ready for seeking an internship or fulltime job in college. This also includes women who have already started their
careers or are currently in the workforce.
Psychographic Segmentation:
Most women would like to spend their leisure time with their friends shopping,
trying new things, and dressing up. Our store has equipped professional educated
employees to help these groups of women to make the best decisions and lead
them to purchase the right selections. This means employees must depend on the
information that customers share in order to give them professional advice and
suggestions to best satisfy the customers demands.
Environmental Audit
63.8% of all persons 16 years and older are in the labor force. 59% of women 16
years and older are in the labor force.

The average time all people travel to work in New York is 32 minutes. This shows
that our customer base could be traveling in daily to work in New York which means
they could be spending more time shopping and doing activities in their local work
area. Out of 8,877,453 people, it is safe to say about half of those could be women
traveling to work. This bumps up our expected customers roughly 4,400,000
women who travel into New York on a regular basis (versus women who reside in
New York). 32 minutes in any direction of New York is potentially our market range
for our store. (U.S. Census Bureau, 2014)
In New York, 82.9% of employed persons work in management, business, science,
arts, service, sales, and office occupations. The portion of this percentage would be
roughly 4,800,000 women over 16 who would potentially need to buy our
professional clothing. (U.S. Census Bureau, 2014)
Women are beginning to enter the workforce in larger numbers. They are trying to
break the glass ceiling by receiving higher paying occupations. With the interests in
fashion that women have today throughout their high school and college life is
making it difficult for women to be perceived in a professional and elegant manor.
Belle Femme's goal is to help women break away from this perception of the
stereotypical college girl and be there to support women and help them become the
professional image that corporations and service operations are looking for to be
their managers and owners. This trend directly supports our business efforts and
our sales.
All types of technology trends are growing exponentially in recent years. This is the
reason we have realized that we need to be a part of the mobile market. Students
are constantly looking at their phones while walking, talking, and socializing with
their peers. Students are also shopping online during class. We have witnessed this
through personal experiences throughout college. With college focusing on getting a
good job and internships, we are hoping to be of help to the students and their
search for a career.
Internal Audit for Experience Economy
Four Es and Four Ps information located in a chart on Page 6. (MBASkool, 2014)
Competitive Analysis
SWOT Analysis
Our major competitors are J. Crew, Mango, Banana Republic, and Zara. We are also
competing against other professional clothing retail stores located in both large and
small cities.
SWOT Analysis chart located in a chart on Page 7. (MBASkool, 2014)

E
sc
a
pi
st

E
nt
er
ta
in
m
e
nt

E
st
h
et
ic

Feminine and
empowered photos of
women load the walls of
Belle Femme stores to
show our customers
what we can do for
them.

Many accessories and

colorful items are placed
thoughtfully throughout
the store to give
customers small things
to grab their attention as
they walk around.

Our stores have

bright white lights
allow the customers
to view the clothing
items clearly as they
are shopping and also
to view the items
they are trying on.
Mirrors are posted
throughout the store
allows the customers
to view accessories
without the hassle of
waiting for a dressing
room. Elegant chairs
are carefully placed
near the dressing
rooms for
accompanying guests
to wait comfortably.

The employees and

mannequins wear
Belle Femme
clothing to present
and surround the
customers with
fashionable options.

The fashion show

advertising lets
potential customers
see items up close
and in person. The
phone application
allows women to see
how our clothing
really fits other
women in real life
photos.

Our advertisements
provide interesting
and elegant colors,
textures, patterns
and accessories to
draw potential
customer's interest.
The QR barcodes
are entertaining to
students who are
curious and
exploration.

The fashion shows

are displayed on
campuses where
potential customers'
attention will be
caught as they walk
between classes. As
they walk close
enough to hand out
flyers or coupons.

Employees are
encouraged to wear
Belle Femme
clothing during their
shifts to promote
the different styles
to customers while
they shop.
Employees are also
encouraged to wear
Belle Femme
clothing and
accessories outside
of the workplace to
extend brand
examples to
different areas in
which they reside.

We put together
fashion shows on
college campuses to
give students an
opportunity to view
different styles. Belle
Femme
advertisements focus
on sophisticated
styles and
empowered women
stances.

In store, our customers are

actively immersed in the
shopping experience from the
moment they walk into the store
by the personalization of the help
from our stylists.
(AESHM 474 Learning Activity #3,
2014)

With the involvement of our style

specialists, our customers are
engaged and actively participate
in the activities of shopping and
clothes fitting.
To extend the shopping
experience outside of the stores,
women are entertained by our
free phone application and our
website. This provides customers
with a source of entertainment for
window shopping and for
purchasing items on the spot.
(AESHM 474 Learning Activity
#3, 2014)

Our customers are passively

involved in our environment
through the enjoyment being
surrounded my color, texture, and
patterns of the clothing and
accessories. Customers
unknowingly view employees as
models for the brand.
(AESHM 474 Learning Activity #3,
2014)

E
d
u
ca
ti
o
n
al

E
d
u
ca
ti
o
n
al

Ma
ng
o

Tags that are

attached to our
products include
information about
the item's material,
color, texture, price,
and designer.

Our advertisements
provide potential
customers with
different style and
outfit ideas. We have
posted QR barcode
scanners and flyers to
provide potential
customers with store
locations, hours,
website, and phone
application
information.

Each of our stores employs

multiple style specialists.
Throughout their day at work
they assist customers with
questions, advice, and clothes
fitting to find the perfect
professional look for each
individual customer. This
technique will give our customers
are active involvement with their
shopping experience while
teaching them how to dress for
their body type.
(AESHM 474 Learning Activity #3,
2014)

Each of our stores have

window displays in front
and throughout the
store.

Tags that are

attached to our
products include
information about
the item's material,
color, texture, price,
and designer.

Our advertisements
provide potential
customers with
different style and
outfit ideas. We have
posted QR barcode
scanners and flyers to
provide potential
customers with store
locations, hours,
website, and phone
application
information.

Each of our stores employs

multiple style specialists.
Throughout their day at work
they assist customers with
questions, advice, and clothes
fitting to find the perfect
professional look for each
individual customer. This
technique will give our customers
are active involvement with their
shopping experience while
teaching them how to dress for
their body type.
(AESHM 474 Learning Activity #3,
2014)

Properties

Product
Presentation

Promotional
Applications

People

Each of our stores have

window displays in front
and throughout the
store.

They have a strong brand

presence with their goal to be
present in every city of the
world. The presence of stores
at prime locations has given
the brand a strong footing in
terms of the overall brand
equity. Their foray into
menswear has also been a
success as a part of their
diversification strategy.

Designed and
sourced from
Spain which is
more expensive
than its European
counterparts.
Major revenues
earned by the
brand are from
apparel only.
Controversy over
some designs has
initiated lawsuits
inviting criticism
from the fashion
industry.

Can emerge in
India and Africa,
which are largely
unsaturated,
instill growth and
stability for the
brand. Could
diversify further
into many other
product lines.

Fluctuations in
currency threat
overall sales
revenues. The highly
fragmented fashion
industry means low
brand loyalty and
high bargaining
power for consumers
due to low switching
cost. An emergence
of many new
designers in this
segment.

Za
ra

Ba
na
na
Re
pu
bli
c

J.
Cr
ew

Bel
le
Fe
m
me

A well-established brand
name worldwide. The supply
chain management, most of
their processes like
operations, manufacturing is
extremely low cost. Clothes
are produced at a low cost
with the most innovative and
fashionable designs. They
are a part of one of the
biggest Spanish retailers in
the world.

Global brand recognition and

popular brand image.
Popular with premium class
looking for luxury.
International fashion and
global trends are satisfying
the needs of its loyal
customers. Franchising
system easy to expand.
Strong distribution gap
means its available at all
multi-brand retail stores
globally.

Has around 13,000

employees working to make
the brand better through
more than 320 stores in the
United States. They ship to a
total of 100 destinations
through their e-commerce
website. They also partners
with the finest global fabric
mills and craftsmen.

They use an unusual

strategy of no
advertisements. Their
target segment is not
very loyal and might
go for cheaper and
newer collections.

There are more

global markets
which they can
explore. Online
marketing and ERetail is gaining
importance.

The high-end fashion

merchandisers can be a
major threat to them.
Economic downturn can
also be a threat to their
target segment. There
is a large amount of
consumer switching
taking place.

They are perceived as

an extremely
expensive product.

They have global

markets in Europe
and China and
other emerging
economies.
Penetration of ecommerce sales
made online is
growing. Tie-ups
with fashion houses
and retail chains.

Economic fluctuations
affect apparel retail
business. Cost of prime
real estate is
competitive. Increasing
awareness and
penetration of
competitive brands.

Venturing into
new specialty
shops for men,
women and kids.
Adding deluxe
shoe and
handbag salons
in existing
stores.

Their brands offer more

fashionable clothing at
better value. Their
fashion trends change
rapidly. Their rising
production costs can put
a dent in the profits of
their brand.

Does not have

stores worldwide,
hence the
company cannot
tap other markets,
and their currency
fluctuations can
increase the costs
incurred in
shipping to other
locations.

Advantage in advertising and

promoting our products with
our unique strategies. Our
phone application and fashion
shows around the college
campus bring a creative and
unique brand image.

Our lack of
experience in the
market and
business industry
in large cities. It is
logical that many
suppliers would
not like to support
a new business.

To join current and

future social media
applications and to
partner and
sponsor with
schools and clubs
for helping young
women.

Our competitors
currently have more
locations than we do,
which puts us at a
disadvantage for our
market share. Women
are already familiar with
our competitors' brands
and products.

Strengths

Weaknesses

Opportunities

Threats

Marketing Trends

Market/Customer Trends:
Market and Customer trends will go through the employees and customers
communication and feedback. Our boutique strives to know more detailed
information about what the customers really want so we are able to make changes
to accommodate each new generation. Also through our observations and market
research, we will be able to stay up to date on trend changes and make prompt
adaptations.
Related Industry Trends:
Retail Industry trends change depending on the seasons, holidays, and also the
ages and sex of the customers. Customer demands vary at different times. The
most influential trend is the change in seasonal clothing to satisfy customers'
needs. According to the market demand, for example, when the season is early
winter, customers may need a trench coat or a sweater to keep warm or they just
want a scarf to accessorize. At this time, our store will follow the season changes by
switching out some autumn clothing for winter clothing and accessories.
Market Potential
The total demand based on our population research shows that there are more than
half of the percentage of people in New York are women (52.8%). Among these
women, there are 44.5% who are 18 years old and above (U.S. Census Bureau,
2014). This means we have a large group of customers and power spenders.
These women are our main focused customers that we want to walk into our
boutique.
Our competitors have more stores in New York than we will in during the startup of
our business. As our brand grows through our promotional efforts, we will be able
to expand our boutique throughout New York, locating in malls and strips near
residential areas. Although our competitors have advantage in number of
properties, we share some of the same market of young women. With our strong
focus on younger women upcoming into the business and service industry, our
brand has an opportunity to come out on top.
We believe that when our business opens we will have a positive influence in the
womens clothing market on both our clothing lifestyle and our new phone app,
especially for young women. They are very interested in the new upcoming
technology, so our phone app will be the new generation in shopping technology.
They can select their clothing or match the different style at any time and
anywhere. This will shrink the time needed to find and purchase items, leaving
them with more time to scroll through more real-life photos.

Vision

We strive to be the top choice in womens clothing through inspirational help to

empower and improve womens professional lives.
Mission
Belle Femme creates emotional connections with customers around the world
through inspiring product design, unique store experiences, and compelling
marketing. We want to make it easier for our customers to express their personal
styles. Our key values are integrity, respect, open-mindedness, quality, and
balance. We honor these values and exemplify our belief in doing our business in a
socially responsible way. Our purpose is to give our customer an exclusive choice of
fashion by providing a quicker turnover of new stock than other fashion retailers.
Business Objectives and Marketing Strategies
Our business objectives, and sales and marketing strategies are to reach to the
level of a more professional and classy image and position in the industry through:
Improving brand awareness through up to date and interactive advertisements. To
reach this goal, Belle Femme has planned interesting and interactive guerrilla
marketing strategies. Hosting fashion shows on college campuses showing off our
best styles and clothing to open potential customers minds, while handing out
special coupons and flyers to inform and try to bring in new customers.
Increasing revenues and customer satisfaction through active customer
participation with our professional stylists. Having these in-store stylists are simply
a benefit to our customers. We want to create relationships with our customers and
help them until they find the products they love and the products that will lead
them to success.
Increasing revenues through customer-employee communication and relationships,
and use of our phone application and our easily accessible website. Our phone
application is made to easily navigate through to view real photos of women
wearing our clothing to give them a true idea of what these items will look like on
women who are not professional models. The Belle Femme website is available to
communicate with our stylists from home. We want to create a relationship with our
customers, even online.

10

Financial Analysis
Start-up costs
Below is a list of our general startup expenses for Belle Femme. Our startup assets
include computers, cash registers, clothing inventory, etc. and also we included
costs incurred while starting our website and mobile phone application. (AESHM
474, Prophecy Software, 2014) (Google, Shopping, 2014)
Startup Costs
Web Site Design
Site Implementation
Five Year Website Domain
Registration
(Five Year Search Engine
Registration
Initial Deposit
Startup Inventory
Insurance
POS Software

$3,000
$0
$95
$10,000
$0
$55,500
$1,100
$300

Computers / Cash Registers

$6,500

Phone Application

$2,000

Leasehold Improvement
Rent for Month of Improvements

$20,000
$3,000

Marketing

$11,350

Long-Term Assets

$24,599

TOTAL STARTUP COSTS

$137,444

Source of funds
We have chosen only one of the three of us to be the sole Owner of Belle Femme as
to receive the benefits of having a Sole Proprietor. The other two of us will be
named the General and Assistant Manager based on our knowledge and experience
and demand to be a part of the ownership. We will all three be participating in the
startup funding of Belle Femme. This of course comes with signed agreements to
provide the positions necessary for a certain length of time in order to earn back

11

our investments. The sole Owner will be providing the largest investment because
she has the largest amount saved knowing she was going to start her own
business. The General Manager and Assistant Manager are not obligated to pay any
amount of investment to help start the business. However, since they have chosen
to help finance the Belle Femme Startup, they are provided job security and a voice
in the future of the company, as well as heir to ownership as the current Owners
exit strategy. With the amount of investment saved by the Owner and Managers,
Belle Femme will still need to acquire a bank loan for roughly $55,744. This loan
will be paid off throughout the years with help from the Owner, General Manager
and Assistant Manager. (AESHM 474, Prophecy Software, 2014)
Startup Funding
Personal Savings - Owner

$41,700

Personal Savings - General Manager

$25,000

Personal Savings - Assistant Manager

$15,000

Bank Loans

$55,744

Land and Building Expenses

Belle Femme will be located in New York City in Queens area. During our research
on the real estate market in Queens, New York City, we discovered that area is
measured in square meters. So the space Belle Femme needs is around 6,667
Square Feet, which will be spread over one floor, at the same time this store will
require a whopping 15 employees on payroll for the store. The floor is organized
around two long corridors that lead into the more intimate boutique-like spaces.
The total rental cost per month will be around 3,000, totaling at $36,000 per year.
(Voien G., 2013)
Income Statement
In addition to the owner, who receives a salaried pay, there will be one full-time
General Manager, who also receives a salary, and one part-time Assistant Manager
and two Style Concierges. The Assistant Manager will be paid at a rate of $20.00
per hour and the Style Concierges will receive a rate of $15.00 per hour, plus
benefits. Other employees hired for Belle Femme will be paid competitively and
based on experience, and improvement. All employees will receive general benefits
such as a 50% store discount, Time and a half for working holidays, paid vacation
hours based on number of hours worked, and possibly a free outfit of their choice
on occasion. (AESHM 474, Prophecy Software, 2014)(Bplans, Womens Clothing
Boutique Business Plan) (Bplans, Clothing Retail Business Plan) (AESHM 474
Sample Business Plans, 2010-1014)

12

Personnel Plan
Year 1

Year 2

Year 3

Year 4

Year 5

Owner

$73,000

$76,000

$90,000

$90,000

$95,000

General Manager

$50,000

$52,000

$60,000

$60,000

$60,000

Assistant Manager

$39,600

$42,000

$43,500

$44,500

$46,000

Style Concierge

$18,400

$4,000

$4,000

$5,000

$5,000

TOTAL PEOPLE

Total Payroll

$181,000

$174,000

$197,500

$199,500

$206,00
0

("Retail Store Manager Salary | Salary.com", 2014)

The projected Profit and Loss for the first five years of business are detailed in the
following table and charts. Sales will increase each year, as will expenses and costs
of goods as we purchase more products to accommodate for the markets demand.
We do project profits growing profits each year.
Income Statement (Years 1 through 5)
Year 1

Year 2

Year 3

Year 4

Year 5

Sales

$513,503

$599,403

$609,402

$620,315

$630,937

Direct Cost of Sales

$204,820

$237,520

$239,896

$245,911

$249,600

$0

$0

$0

$0

$0

TOTAL COST OF SALES

$204,820

$237,520

$239,896

$245,911

$249,600

Gross Margin

$308,683

$361,883

369,507

$374,404

$381,337

60.11%

60.37%

60.63%

60.36%

60.44%

$131,000

$122,000

$137,500

$139,500

$146,000

Advertising

$4,800

$4,800

$4,800

$4,800

$4,800

Depreciation

$4,880

$4,889

$4,889

$4,889

$4,889

Amortization - Startup Costs

$5,500

$5,500

$5,500

$5,500

$5,500

Bank Services Charges

$480

$480

$480

$480

$480

Dues and Subscriptions

$600

$600

$600

$600

$600

Education and Training

$1,200

$1,500

$2,000

$2,000

$2,000

Insurance - Workmans Comp

$3,372

$3,500

$3,600

$3,800

$4,000

Insurance - Property and Liability

$6,204

$6,200

$6,300

$6,500

$6,500

Interest Expense - LT Loan

$4,716

$4,716

$4,716

$4,716

$4,716

Other Costs of Goods

Gross Margin %
Expenses
Payroll

13

$110

$0

$0

$0

$0

Maintenance - Office

$2,400

$2,400

$2,400

$2,400

$2,400

Marketing and PR

$9,600

$10,000

$10,000

$10,000

$10,000

Miscellaneous

$3,600

$3,600

$3,600

$3,600

$3,600

Payroll - Charges

$797

$800

$800

$800

$800

Postage and Delivery

$600

$600

$600

$600

$600

Printing and Reproduction

$1,200

$1,200

$1,200

$1,200

$1,200

Prof Fees - Accounting

$1,500

$1,500

$1,500

$1,500

$1,500

$36,000

$36,000

$36,000

$36,000

$36,000

Repairs

$600

$600

$600

$600

$600

Security

$348

$350

$350

$350

$350

Supplies - Office and Store

$4,200

$4,200

$4,200

$4,200

$4,200

Travel and Entertainment

$8,500

$10,000

$10,000

$10,000

$10,000

Telephone and Internet Service

$1,440

$1,440

$1,440

$1,440

$1,440

Utilities

$2,100

$2,100

$2,100

$2,100

$2,100

$720

$10,515

$10,890

$11,490

$12,015

Employee Benefits

$9,000

$9,100

$9,100

$10,100

$10,100

Other

$2,400

$2,400

$2,400

$2,400

$2,400

$248,876

$251,490

$268,065

$276,065

$283,290

Profit Before Interest and Taxes

$59,806

$110,393

$101,442

$98,339

$98,047

EBITDA

$64,696

$115,282

$106,331

$103,228

$102,936

$6,753

$5,963

$5,138

$4,314

$3,489

Taxes Incurred

$15,916

$31,329

$28,891

$28,208

$28,367

Net Profit

$37,137

$73,101

$67,412

$65,818

$66,191

7.23%

12.20%

11.06%

10.61%

10.49%

License and Permits

Rent

Payroll Taxes

TOTAL OPERATING EXPENSES

Interest Expense

Net Profit / Sales

14

Here is a graph representation of our profit projections for the next five years.

Also presented here is a graph of our growing Gross Margin for the next five years.

15

Break-Even Analysis
Belle Femmes break-even analysis below shows what our break-even point in sales
volume per month. According to the graph, with profits along the left vertical axis,
revenues approach the break-even point at $34,501 in revenues for that month.
This is in reference of estimated monthly fixed costs listed below in order to find our
break-even point where we will be neither losing profit nor making additional profit.
(AESHM 474, Prophecy Software, 2014)
Break-Even Analysis
Monthly Revenue Break-Even

$34,501

Assumptions
Average Percent Variable Cost

40%

Estimated Monthly Fixed Cost

$20,740

!
Profit (Vertical Axis) X Sales Volume (Horizontal Axis)

16

Projected Cash Flow Statement

To ensure that Belle Femme will maintain cash flow, we will secure relationships
with multiple vendors and representatives. To protect our company from late
deliveries, high price points, etc., and ourselves we will follow some procedures to
keep us on track. We will research average price points of competitors and vendors
to ensure that a good variety of prices are maintained. We will review shipping and
transportation policies of our vendors to guarantee our deliveries will be on time or
early, or that vendors will offer discounts if deliveries are late. Vendors and on time
deliveries are crucial to our profits and sales, keeping information regarding market
demand and turnover rates to project appropriate goods to purchase. Lastly, Belle
Femme will agree to payment terms and agreements with vendors that are willing
to work with our company to provide the services needed and prices negotiated to
reach Net 30 terms as soon as possible. (AESHM 474, Prophecy Software, 2014)
The five-year projected Cash Flow Chart is shown below for the Belle Femme
Clothing Company.
Pro Forma Cash Flow
Year 1

Year 2

Year 3

Year 4

Year 5

Cash Received

$103,620

$165,709

$225,647

$284,924

$344,513

Cash from Operations

$513,503

$599,403

$609,402

$620,315

$630,937

Cash Sales

$513,503

$599,403

$609,402

$620,315

$630,937

SUBTOTAL CASH FROM

OPERATIONS

$513,503

$599,403

$609,402

$620,315

$630,937

Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

New Current Borrowing

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

Additional Cash Received

SUBTOTAL CASH RECEIVED

$513,503

$599,403

Year 1

Year 2

$609,402

$620,315

$630,937

Year 3

Year 4

Year 5

Pro Forma Cash Flow Continued

Expenditures
Expenditures from Operations

17

Cash Spending

$131,000

$122,000

$137,500

$139,500

$146,000

Bill Payments

$275,075

$404,006

$400,156

$409,729

$414,040

SUBTOTAL SPENT ON OPERATIONS

$406,075

$526,006

$537,656

$549,229

$560,040

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

Principal Repayment of Current

Borrowing

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$10,308

$10,308

$10,308

$10,308

$10,308

Purchase Other Current Assets

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$1,000

$1,000

$1,500

$1,500

$1,000

$417,383

$537,314

$549,464

$561,037

$571,348

$96,120

$62,089

$59,938

$59,277

$59,589

$103,620

$165,709

$225,647

$284,924

$344,513

Additional Cash Spent

Long-term Liabilities Principal

Repayment

Dividends
SUBTOTAL CASH SPENT
Net Cash Flow
Cash Balance

References

Clothing Retail Business Plan. (n.d.). Retrieved December 1, 2014, from

www.bplans.com
Dr. Neihm, Linda (Fall 2014). Prophecy Software. Retrieved November 2014 from
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