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NEW WOMEN'S CLOTHING STORE.
Term Paper ID:18200
Essay Subject:
Business design for organization & operation of retail establishment. Structure, staffing, controls, insurance. Charts.... More...
12 Pages / 2700 Words
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Paper Abstract:
Business design for organization & operation of retail establishment. Structure, staffing, controls, insurance. Charts.
Paper Introduction:
The following business plan outlines the organizational design and operational control of a new small business. This business is a women’s retail clothing store which, for the purposes of this plan, is called simply “Her Place.” The business plan for Her Place can be characterized as in part characteristic of any successful small-business startup plan, and in part specific to the women’s clothing business. Basic operating issues for Her Place –- finance, staffing and employee relations, management controls, insurance, to name a few –- are those characteristic of most small businesses. Industry-specific factors affecting Her Place include the interrelated elements of the type, style, and price of clothes sold (e.g., sportswear, professional and business clothes, high-fashion, maternity, ect.), the demographics of the target clientele
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For example,a woman who walks to work (for exercise, to save auto usage, etc.) will beparticularly interested in clothing that remains cool and comfortable towear even after a long brisk walk. The horizontal axis shows "how" items -- which are seen ascontributing to the "whats" (Eureka and Ryan 21-24). Boutique customers are drawn most of all by attractive merchandise,but also by sales people whom they know and trust, who project a sense ofstyle the customers relate to, and whose advice they feel they can rely on. The actual number of employees to be hired depends inpart on the number of hours per employee. Andthe rise of ethnic groups entering the United States (with a million peopleper year crossing our boarders from Mexico) will continue to influence ourconsumer economy. If ashopping center has plenty of available store fronts and low rents, it mayalso be a "dead" center that draws few customers. Cheap but Good Market Research. Homewood IL: Dow Jones-Irwin, 1988.Eureka, William E., and Nancy E. In a shopping center, leasing, maintenance, insurance, and relatedfunctions may all be handled through the center management agency. It will be appreciated that this isstrictly a framework, to which specifics need to be attached to becomeuseable. Merchandising: Selection of appropriate merchandise is the mostvital, but also the most imponderable, aspect of the women's apparelindustry. For this reason,serious consideration should be given to hiring an office manager, or amanagement service, so that routine matters in this area can be handled,and decision requirements clearly outlined and presented to the proprietor. Trends inwomen's wear also follow broader social movements. Along with the storefront come some one-time requirements and ongoingrequirements. Finance is a matter which requires particular attention, however.The complexities of tax accounting are such that specialized assistance isnecessary. A simple application form will serve for background andprevious experience, but the main employee requirement is not specializedskills but a "good fit" with the store's ambience and prospectivecustomers. Englewood Cliffs, NJ: Prentice-Hall, 1976.Shath, Jagdish N., and S. A simple example of a market-research scheme involves use of amailing-list mailer, which as we have seen Her Place will utilize anyway.How do customers respond to "personalization" of a mailer by a hand-writtennote? Thusthe typical regional-mall layout, with large "magnet stores" bracketing aseries of boutiques and specialty shops. But these must be supportedby marketing, both "mass-marketing" (e.g., ads), and targeted marketing(e.g., to a customer mailing list). Women walk into a boutique in thefirst place if the merchandise in the window is interesting, and willlinger if they find more interesting merchandise on the racks, and if theyfind the sales people knowledgeable and helpful. This is a simple way to promote greater repeatbusiness. "There are a lot of womenout there who are tired of clothes that are trendy and immediatelyoutdated, or cutesy but impractical. The reason for this is that the women's appealindustry is in so large measure a matter of fashion, and therefore ofinstinct -- the merchant's instinct for what the customer will like, andthe customer's instinct for what she actually does like. Westport, CN: Quorum Books, 1985.Lord, Shirley. Once the decision is made what sort of styles to order, the practicalproblems of where and how to buy, and the mechanics of placing orders, cometo the fore (Shafter and Greenwald 31-62). As an example, inexpensivejewelry can be placed on or next to the sales counter, converting what isotherwise "dead space" into a source of impulse buying. In women's retail, simply keeping abreast ofthe fashion magazines constitutes a form of market research. The customer who does not need orwant sales assistance will go to the outlet to save money. Dearborn, MI: ASI Press, 1988.Kacker, Madhav P. Location can also determine the success or failure of a store. Once a customer base appears, marketing is also used to support thatbase. However, aggressive pirating maycreate hostilities with other stores, and is thus to be avoided whenpossible. It should be clear from the above, however, that opening even a smallbusiness such as Her Place is a project which to be successful requiresclearly defined goals and careful planning. Hence a grocery storenearby is unlikely to be a good "draw." A department store, on the otherhand, draws customers who will then check out neighboring boutiques. Method: This Business Plan breaks the overall process of opening HerPlace for business into a series of task requirements which should be metby certain target dates if the whole project is to remain smoothly ontrack. New York: John Wiley and Sons, 1987. For Her Place, the best approach is to let potential employeesnow working at other stores know that Her Place will be opening and islooking for people, but leaving the next step to the other person ratherthan out-and-out soliciting for an application. The goal of merchandise display is primarily, of course, toshow off the merchandise to good effect, but a related goal is to get thebest use out of the store space. This business is a women'sretail clothing store which, for the purposes of this plan, is calledsimply "Her Place." The business plan for Her Place can be characterizedas in part characteristic of any successful small-business startup plan,and in part specific to the women's clothing business. Thus the most important factors for the success of Her Place areits buying strategy and its sales force. But these specifics are by their nature unique to a particularsituation, and impossible to generalize on. A secondary support function is thatof obtaining and maintaining the physical apparatus of the store -- thestorefront itself, fixtures, utilities, cleaning services, and insurance.Finally, a vital support function concerns maintaining Her Place as abusiness entity, legally and financially. Its target clientele will be middle to upper-middle incomeworking women who need attractive but practical clothing that they can wearto work, to dinner with friends, and so forth. This system of progress control can be easily charted, allowing foran at-a-glance comparison of actual progress to date against the schedule.The horizontal axis displays a calendar of the project period, allowingdays to be checked off day by day. Customers wantcertain qualities, but the qualities they actually shop for are those,which they feel contribute to the desired qualities. It conveys a notion of a specialized "priesthood" of marketing-research wizards who advise large corporations on the subconsciousmotivations of the public. Customers may, indeed, follow a trusted sales person from one store toanother. Transatlantic Trends in Retailing. This can be tested by sendingout half the next mailing with such a note, and the other half without it,while keeping track of the response rate from each group (Andreasen 17-2 ). The Customer-Driven Company. The customerwho is willing to pay the higher retail price in a boutique may in partwant the convenience of location, but their primary motivation is likely tobe the desire for better service. Likewise, asnoted earlier, factory-outlet stores give retail merchants an opportunityto see what end-buyers are looking for. Marketing: The greater part of the "marketing" of a women's retailboutique such as Her Place is closely intertwined with the basics ofmerchandise selection and sales service. Basic operatingissues for Her Place -- finance, staffing and employee relations,management controls, insurance, to name a few -- are those characteristicof most small businesses. Business licenses must beobtained and renewed. Merchandise selection and display, and sales force management are thekey "line functions" for the operations of Her Place. The store will beopen seven days and three evenings a week, and two employees should be onhand at most times. The luxury of spending excess moneywill be reduced as the middle class becomes more practical in spending. Independent Retailing. Sales: Service has always been a vital feature of the retailbusiness. "Everybody's All-American." Vogue (February, 1989), 313-319.Shafter, Harold, and Herbert Greenwald. Chart II "How" Items what: "how" how: what: Looks nice Fabric"What" Items Good Comfortable Cost practical dress Inexpensive Color Simple DesignBy an analysis of this sort, we can guide our instinct as to how customerswill respond to general wants with particular purchases. They are on budgets, and they wantclothes they can wear and get use out of. Fewer formal rules can be established for the industry-specificfeatures of Her Place. The following business plan outlines the organizational design andoperational control of a new small business. Such marketing tactics also lend themselves to simple and effectiveforms of market research. The ultimate key to Her Place's success will bereturn business and favorable word-of-mouth. Certainly, fashion does not arise altogether spontaneously, out ofnowhere. The goal of personnel management is, above all, to minimize employeeturnover, which is very expensive (Shafter and Greenwald 268-269). Finally, membership in community and businessorganizations can be a useful source of links and contacts. Ryan. Or it may draw the wrongcustomers, or customers in the wrong mood; e.g., a grocery store drawshurried, businesslike shoppers who want to buy their food and run; theyaren't likely to drop into a neighboring boutique. These are the two mutuallysupporting "line departments" which will bring in the business. Goal: The goal of this Business Plan is to establish Her Place as asuccessful boutique within one year of opening its doors, and withineighteen months from the present. As a result, theyare not only a draw on the proprietor's time, but also a mental distractionfrom the problems of running a successful boutique. Once merchandise has been purchased, it must be effectivelydisplayed. Bringing Innovation to Market. Clothing wholesalers take aswide a variety of forms as retailers do, appealing to different marketsegments and offering different types of services to their retail-businesscustomers. The "personnel function" will behandled directly by the proprietor, and along with merchandise buying willbe one of her key decision areas. Business licenses mustbe obtained, along with zoning permits for remodeling, if required, etc.Bank accounts must be opened, correspondence seen to, the books keptaccurately. By "really" we do not mean mysterious subliminalmotivations, but the desires that go into a buying choice. To take one example, the population of the 2 th century will be olderon average, with the baby-boomers in midlife. The fashion industry tries to shape it, and in the short run itusually does so with fair success, so that all the latest successfulgimmicks will be seen on next season's racks. The total number of employees that Her Place will require will be nomore than half a dozen, not counting the proprietor. Inaddition to these line functions, however, there are also three broadfunctions which "staff departments" will have to serve. To a degree, these general business requirements overlap withthe general features of location requirements - lease negotiation andpayment, insurance, and so forth. After a correction in the"bull" stock market in the beginning of 2 , a more classical sense ofstyle may replace the obsessive trendiness of the leveraged-buyout years.Dress will likely be more practical. Legal and General Business Functions: These are functions which arenot peculiar to a women's fashion boutique, or even to retail business, butare encountered by small businesses of all sorts. A store with a transient, ever-changing sales force cannotproject so strong an image nor draw a base of loyal customers. One ismerchandising support. Thefixtures were a little late arriving, however. No amount of goodplanning in the other aspects of a business will save a women's clothingstore that consistently fails to offer fashions that consumers are willingto buy. For astreet-front store, each of these aspects of the location will have to behandled separately. Industry-specific factors affecting Her Placeinclude the interrelated elements of the type, style, and price of clothessold (e.g., sportswear, professional and business clothes, high-fashion,maternity, ect.), the demographics of the target clientele (e.g., children,"junior," age and income range, etc.), location (mall or street, area,etc.), and others. Only for a specific instancecan we speak of local licensing requirements, state insurance laws, thecustomer mix in a particular area, rents and leases of alternative possiblelocations, and so on. Location costs (usually rental or leaseof a store front) is one of the largest items of a retail store's costs,and it is a fixed cost. A chart of thistype can be used to track overall progress by areas, and kept handy overthe office desk, while the sub-steps in each area are in turn tracked onarea charts. If the location was previously a similar type of store, itmay already have appropriate interior furnishings, fittings, and décor.Otherwise, these things will have to be procured. But some heavily promoteditems, such as the miniskirts of the late 198 s, have been rejected bycustomers in spite of all the marketing efforts made to pressure them intobuying. The growing ethnic diversity of Americans will mean a broadenedredefinition of American ideals of beauty and style (Lord 313-319). The Business: Her Place will be a women's daywear boutique located inan urban area. The form of such a chart is as in the following sample: Chart ITask: Target Date: Month 1 Month 2 Month 3 Month 4 xxxxxxxxxxxxxxxxxxxxxxxxxxxxLease Obtained -- x]Interior Designed -- x ]Fixtures Ordered -- x ]Fixtures Delivered -- ] xFirst MerchandiseOrder -- ] ] = scheduled date x = actual dateIn this example, the lease was obtained just in time, and the interior wasdesigned and fixtures ordered in advance of the schedule dates. The United States Latino community alone is atremendously growing consumer industry, who's influence is only justbeginning to be recognized by American businesses. There is also some reason to believe that the 2 decade will be oneof greater sobriety after the glitz and excess of the 198 s and followingthe boom of the stock market during the 199 s. Ram. In the years between 1998 to2 5 most baby-boomers will be turning 5 . "Market research" is a phrase with intimidatingovertones. An interesting recent development is the factory outlet storein urban areas, which is patronized by both retailers and individualmembers of the buying public. In slow seasons, employee hours can be cut andless merchandise in quantity and expense can be brought, but the rent stillhas to be paid every month. People will be conscious of andconcerned about health (Shath and Ram 7-1 ), which will affect theactivities they undertake and therefore the clothes they buy. A simple market research project of this sort requires minimal extraeffort and investment, and can yield information that makes for moreeffective marketing. But market research is available to smallbusinesses as well as large. Let us deal with each of these broad areas in turn, beginning withthe two "line" functions of merchandising and sales service. A simple and typical procedure is to get the address of all newcustomers for a customer mailing list, used to notify customers of sales,new merchandise, etc. These are universallyencountered by new business, and often legal or other formal procedures(e.g., accounting rules) have been created for them. Does it encourage greater response? A new business, especially, mustlet customers know it is open, through advertising. These "staff" functions are at once important, time consuming, andnot themselves related to the women's fashion business. Sound general rules can be set forth for efficient handling ofthe more general aspects of a business startup. A key to successful retail marketing is understanding what thecustomer really wants. It is thereforerelatively simple to establish a control system that shows a series ofgoals to be met and procedures for meeting them. The vertical axis lists activities ofevents. The above plan simply outlines the requirements which must be met ifHer Place is to have a successful opening and a first year that points theway on the road to profitability. As one guide puts it, "Make every inch ofyour store pay" (Shafter and Greenwalk 24 ). It is perhaps moreexpensive to hire a decorating firm to handle the setup, but the resultsmay be more predictable and desirable than a do-it-yourself job (especiallyundertaken at a time when so many other preparations also have to be made). Accounting and tax services must be secured.Sufficient finance must be available not only to get the store open, but tokeep it open through the vital break-in period while business is built to aprofitable level. For example, a location must be obtained and suitably remodeledbefore ordered merchandise begins to arrive, or the merchandise will haveto be stored elsewhere for a time, with consequent costs and delays. One tempting source of employees for a new retail business is"pirating" of employees from existing stores (Shafter and Greenwald 289-29 ). Store Location and Operation: It is said that in real estate thethree most important considerations are location, location, and location.This is nearly as true in retail. Sound fashion judgement cannot be reduced to rules, but currenttrends can be followed in the fashion magazines, and Women's Wear Daily isone of the most distinguished industry trade papers in America. Works CitedAndreasen, Alan R. But a boutique cannotrely entirely on this sort of marketing. At the same time, the balance sheet is so clearly related tothe fundamental health of the business that the proprietor must make aspecial point of keeping fully abreast of and aware of the state of HerPlace's finances at all times. It is almost time for thefirst order of merchandise, and this still has to be made. In theretail boutique environment, such as for Her Place, turnover has not onlythe direct costs of hiring, firing, and training costs, and of reducedaverage employee experience level, but also the indirect cost of weakenedstore image. In support of theseline functions are the fundamental "staff functions" of marketing, storeoperations, legal requirements, accounting and financial management, andgeneral business relations. This can bediagrammed as follows: the vertical axis shows "what" items -- what thecustomer wants. "Retail is about people, for people, with people" (Kacker 149).The appearance of the factory outlet store has actually increased theimportance of service for boutiques. Often such pirated employees are drawn by the offer of higher wage.Pirating is of particular attractiveness in the women's fashion area, sinceHer Place's proprietor has personal contacts with good salespeople at thestores where she does her own shopping. Many potential customerswork in an appearance-conscious and fashion-conscious milieu -- in theentertainment industry, art galleries, other boutiques, designconsultancies, to name a few typical examples of businesses which are to befound in the urban neighborhoods which Her Place is intended to serve. They also want good service --"not pushy, but there when you need them." Functional areas: The essence of fashion retailing is merchandise andservice. Her Place Philosophy: The following philosophy, based on theproprietor's own experiences as a retail clothing customer, is the basicguide to the Her Place approach to its business. An unstructured interview process is best for Her Place'srequirements. This provides an opportunity for thebusiness buyer to see what the final customer is looking for and at.
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