lola & lexi business plan
TRANSCRIPT
BUSINESS PLAN
By: Stephanie Alvarez
Yanira Losoya Tianya Nie
Lauren Thompson !!!!!FMD 451, Summer 2014
LOLA AND LEXI BUSINESS PLAN! � 2
Table of Contents
Executive Summary P. 3
Mission and History P. 9
Market Analysis P. 11
Products and Services P. 17
Pricing and Distribution P. 21
Operations P. 22
Design and Development P. 26
Management Team P. 30
Exit Strategies P. 31
Financial Pan P. 36
References P. 38
LOLA AND LEXI BUSINESS PLAN! � 3
Executive Summary:
In the United States today, the shoe industry is worth over 40 billion dollars. From those
who purchase shoes, 60% of them are women. With an obvious market for shoes, especially
female, we wanted to create a business in shoes that has never been attempted before. Lola &
Lexi was born with the idea of being a specialty shoe retailer, focusing on foot issues women
deal with on a daily basis. Women like to feel confident at all times and sometimes their shoes
are not cutting it. Women with large feet, narrow, or wide soles often have trouble purchasing
shoes because there is a lack of inventory in stores. Department stores may carry specialty sizes
but they only have a couple pairs of these shoes in their inventory.
In order to accommodate women who are tired of having to purchase unattractive simple
shoes, Lola Roberts and Lexi Madison, two women with shoe problems of their own, plan to
open Lola & Lexi. Lola & Lexi will be a sanctuary for women with foot irregularities by
offering the best product, the best price, and the best customer service, leaving them confident
and happy.
We want to have our store in a brick and mortar location in Palo Alto, California. Women
living in Palo Alto typically have to travel to major cities such as San Francisco in order to fulfill
their need of buying shoes that fit correctly. Also, buying shoes online will not always work for
these women because some shoe companies are not true to size or description. With our
research, we have concluded that Palo Alto is the best location for our store because the median
income is $139,000 and the median age of 49.1. We are targeting these women because they
have lived half of their lives having poor shoe buying experiences. In order to make it up to this
demographic, Lola & Lexi plan to cater to these women’s every needs when it comes to shoes.
LOLA AND LEXI BUSINESS PLAN! � 4
At Lola & Lexi, complementary lemonade and shortbread cookies will be served to our
guests, so that customers leave our store with a pleasant experience. Our store associates will
work first hand to accommodate all of our customers and serve their every need. With our
excellence in customer service, we can assume that customers will come to Lola & Lexi for
shoes for every occasion. After our brand is fully established, we plan to open more stores in the
Bay Area and eventually launch our e-commerce website to reach customers nationwide. We
estimate that our brand will grow exponentially due to the high level of income in Palo Alto.
Based on the figures provided by the United States Census, 58% of citizens of Palo Alto, CA
have a yearly household income greater than $100,000. Also, the data tells us that the average
household income in Palo Alto, CA is $181,311, which supports our desire to locate Lola & Lexi
in this city.
United States Census, 2012 figures for Palo Alto, CA Percentage of Household Income
31%
11%
16%
10%
33%
$74,999 and below $75,000 to $99,999$100,000 to $149,000 $150,000 to $199,999$200,000 or more
LOLA AND LEXI BUSINESS PLAN! � 5
Further supported data by LoopNet, a commercial real estate and research web source, analyzes
the location of where we want to locate our brick and mortar Lola & Lexi store: 323 University,
Palo Alto, CA 94301. Figures indicated by LoopNet (in 2012) is based on research of a 1, 3, and
5 mile radius of the desired location on 323 University.
To further support our secondary research, we have conducted a survey asking people
specific and general question about shoes and their personal lives. These results are based off 32
responses from the survey.
LoopNet Data (2012):
• Average Income within 1-mile: $159,234; 3-miles: $143,404; 5-miles: $130,354
• Retail Sales Volume for Women’s Clothing Stores within 1-mile: $3,818,209; 3-miles:
$27,279,083; 5-miles: $46,847,253
• Retail Sales Volume for Shoes within 1-mile: $2,039,713; 3-miles: $16,013,104; 5-
miles: $27,904,279
Ages
44%
33%
15%
4%4%
Under 25 25-34 35-44 45-54 55+
LOLA AND LEXI BUSINESS PLAN! � 6
Based on the majority of respondents being over the age of 45, the number of users of social
media is scattered. Also, from this data, we additionally asked how people learned about new
brands of footwear and found that most people checked “In Store” as their source.
Social Media
15%
26%
33%
15%
11%
Less than a few times a month A few times a weekAbout once a day More than once a dayNever
0
3
6
9
12
Narrow Feet Wide Feet Is it hard to find shoes?
Yes
LOLA AND LEXI BUSINESS PLAN! � 7
When asking more specific questions about shoes in our survey, answers did not vary as much.
The majority of respondents said “Price,” “Quality,” and “Comfort,” were the most important
factors in buying shoes.
Source of Hearing About New Brands
Magazines
Word of Mouth
Online
In Store
Pop Culture
0 2.75 5.5 8.25 11
Price
Comfort
Quality
Design
Brand Name
Trendiness
Sex Appeal
Heel Height
Country of Origin
0 7.5 15 22.5 30
Top 3 Responses
LOLA AND LEXI BUSINESS PLAN! � 8
In order to catch the attention of our target customer, we plan on first having a grand opening,
with champagne and hors d’oeuvres. We also plan on handing out cards regarding a free foot
measure, and a chance to win a pair of free shoes by becoming a part of our mailing list.
Since Lola & Lexi is a specialty shoe store, it was important for us to find out about what
percentage of women have problems buying shoes due to their foot irregularities.
!How we will achieve Success:
In order to achieve a success, at Lola & Lexi, we plan on going above and beyond to give
our customer our upmost attention in order to cater to their needs and provide them with the best
shoe shopping experience to ensure they continue to shop with us for years to come.
Objectives:
1. To create a customer experience that is memorable and pleasing. Serve our customers with
the best possible service to ensure they become loyal customers of Lola & Lexi.
2. To increase sales profits on a steady pace. With the help of satisfied customers we hope to
increase our loyal customers by at least 30% yearly.
3. To keep in business by serving our customer with a product and experience they have been
missing.
!!!!!
LOLA AND LEXI BUSINESS PLAN! � 9
Mission Statement:
Lola & Lexi is a shoe company dedicated to the forgotten female market segment in
shoes. With the help of independent shoe manufactures, specifically those who specialize in
wide, narrow, and large soles, they work with Lola & Lexi to produce the best possible product
for our customer. At our Lola & Lexi boutique, our team is dedicated to serving customers with
feet that are large, wide, narrow, or a combination of these in order to make them feel
comfortable, confident, and welcomed. At Lola & Lexi, shoes for everyone is our specialty.
!!Elevator Pitch:
Do you know what I like to do to get myself in a good mood or simply want to reward
myself for all of my accomplishments? Shoe’s! That’s right, shoes are a girls best friend.
Forget those diamonds. I love the experience of trying on shoes at stores, walking around, and
imagining all the outfits the pair of shoes will compliment. I have two friends, Lola and Lexi
who have major issues when it comes to finding the right shoe. Lola has the issue of having a
large shoe size, and Lexi can’t ever find shoes that are wide enough to support her feet. Lola and
Lexi want fun, sexy, and comfortable shoes that the rest of the world’s “average footed” women
enjoy. Catering to the needs of Lola and Lexi of larger sizes and wider soles, our business will
transform the shoe industry by targeting a market that has been forgotten. At Lola & Lexi, shoes
for everyone is our specialty.
!!
LOLA AND LEXI BUSINESS PLAN! � 10
Our Story:
Lola & Lexi is an all American shoe wear brand that is dedicated to women who have
foot irregularities such as wide, narrow, or large feet. Lola Roberts and Lexi Madison are the
two women responsible to making their problems with shoe shopping no longer be a reality.
Roberts and Madison both have struggled with having large, and wide feet and were sick of shoe
shopping that only led to shoes being outrageously expensive, hideous, or uncomfortable. Tired
of being self conscious of their feet, Roberts and Madison surveyed women in order to see if they
were not the only two women who wanted to shop a shoe store and have a great experience; this
is where the Lola & Lexi store was born.
!!!!!!!!!!!!!
LOLA AND LEXI BUSINESS PLAN! � 11
Market Analysis
The state of the industry:
The retail shoe industry is constantly growing, as shoes are being manufactured
more inexpensively and a wider range of styles is available in all areas. Women's shoes
control nearly a quarter of the entire industry. Women's feet are getting bigger and shoe
manufacturers; buyers and retailers are starting to take notice. Average shoe sizes have
grown more than a size over the past 30 years. The demand for bigger shoes is forcing
retailers to slowly diversify their offerings. According to a sales person "A size 12 comes
in and the store might have one style to show. She sees 7's and 8's trying on a half-dozen
pairs. She feels humiliated, leaves and doesn't come back. And the store still has the 12.
Nobody's happy and it's a vicious cycle." At this period, the most important thing is to
first satisfy customers with size and comfort problems and then chase for those
fashionable styles. However, with women’s consumers increasing need for both comfort
and fashionable shoes, it is the right time for the existences of some new specialty stores,
which specialize in making shoes for women with all different sizes and widths.
The company and the concept:
Lola and Lexi is designed perfectly for middle aged women who have trouble in
finding shoes which are both comfortable and fashionable. Our store is a high quality
shoes boutique, which offers shoes from size 5-16 with different width from 4A to 4E.
Our service comes with the very accurate measurements. Customers will receive
professional measurements from our shoes specialists, this includes listening to
customer’s concerns, measuring the feet, calf, ankle size and suggestions for customers.
LOLA AND LEXI BUSINESS PLAN! � 12
We provide four different kinds of women’s shoes styles for customers, this include flats,
sandals, heels and boots. Our store not only provides quality shoes, but it will also have
great customer service. We have our own online boutique and there are very specific
instructions and videos about how to measure your feet if you want to buy different kinds
of shoes. As shoes professional, we know that the way you measure a boot with a shoe or
ankle boot are different. Besides, we also provide a foot measuring guide for you to get
the general idea of which size of the show is perfect for your feet specifications. What’s
more, free shipping is offered online as well and if it is your first shopping experience,
we will offer another 10% off. “This is a store where you can see the magic.” said by
Lola. As a women who has trouble in buying beautiful shoes, she mentioned that she
hopes this store will give women their confidence back. Trust us! Your concerns will be
alleviated in Lola and Lexi.
The products:
Our store provides customers different styles of shoes, ballet flats, mid/high/extra
high heels, flat/heeled sandals, flat/heeled oxford, wedge heels and different kinds of
boots. The shoes size comes with from 5 to 16 with width from 4A to 4E. Each season
may vary but basic styles will always be there. Our fabrics are of the highest quality,
specifically selected for their color, soft touch and superior durability. We have seven
standards for our products, which are proper fit, flexibility, breathability, cushioning,
wearability, arch support and fashion.
Entry and Growth Strategy:
LOLA AND LEXI BUSINESS PLAN! � 13
According to our research, a women’s shoes boutique with all sizes and widths
available is rarely seen in the US. Some of our competitors, such as Zappos.com and
Nordstrom, even if they provide wide or narrow shoes, most of them are unavailable. The
amount is so little that it is almost impossible to choose shoes both comfortable and
stylish. Our other competitors, such as Shoes of Prey and Milk & Honey, put emphasis on
letting customers designing their own shoes. However, they have only online boutique,
even though it ships to most of the world, if the size still doesn't fit, or the material
feeling not so good, these will all lead to unsatisfied consumers. It is a great entry
opportunity for us because we provide our customers with all different kinds of styles,
sizes and widths available, which satisfy almost everyone’s needs to be both fashionable
and stylish. Based in the Palo Alto, a place full of high-income families, the entry to the
market will be easily accepted. Palo Alto is full of middle-aged women and this is our
main target market as well.
In the future, we want to have more stores in the US and potentially overseas. We
plan to open another store within 5 years around the San Francisco area and also a store
in New York within 8 years. If it is possible, we want to create custom-made shoes as
well. We will launch a 3D design online and customers can make their own shoes by
choosing different styles, colors, materials, and heel heights. We also need more customer
base, such as younger age group who care about high quality lifestyles. More products
will be produced such as handmade handbags.
!!
LOLA AND LEXI BUSINESS PLAN! � 14
Market Size and Trends:
According to the ABC News, “more than 43 million Americans, or one out of
every six people, have problems with their feet, and most of them are women, at health
cost of more than $3.5 billion per year”. Also, the survey indicates that women in their
40s and 50s often find that they have pain and large deformities from wearing ill-fitting
shoes. According to our research, 45% women who are aged over 35 have problems in
choosing fitted shoes. All these statics indicate that the existence of Lola and Lexi will
give some hope to those women. The National Shoe Retailers Association tracks sizes
and reports that foot size (in both men and women) has grown by a size or so over the
past three decades. According to this trend, women’s shoes will be wider in the future 5
years and will be 1/3 size bigger in the next decade.
Competitive Analysis:
For the competitor analysis, three stores were chosen, which are Nordstrom,
Zappos.com and Shoes of Prey. The reason by choosing these stores is because they all
selling shoes size over 10 or under 5, and they have some competitive advantages
compared with Lola and Lexi.
Nordstrom is department store based in USA. It is well known and has good
reputation. It does good job in both the store and e-commerce by having excellent social
media platforms and selling good quality products. However, the price range of the shoes
department is from $25-$1,000. Especially for bigger shoes, the price starts from $120 to
$1,000. Even it has some big size shoes with designer’s brands, because of the high price
point, it is still hard for consumers to get the shoes they want, and that's the reason why
LOLA AND LEXI BUSINESS PLAN! � 15
our brand can survive because we have more reasonable prices compared with
Nordstrom.
The second one we chose is Zappos.com, an online website based in America.
The competitive point of this online store is the same price range and well known by
most consumers. However, since it is an online website, people cannot really try the
shoes on, this still limit the market. What’s more, even this website provide shoes such as
size 17, a lot of them are unavailable and the style look ugly. Compared with our stylish
shoes with all different ranges of sizes, Zappos.com seem like has not a lot advantages.
The third competitor is Shoes of Prey. It is an Australian based brand. They have a
really competitive advantage is that customers can make their own shoes online with
different colors, materials and heel heights. All the shoes are handmade with high quality
details. Besides, the price range is almost the same like ours. However, this company
only specializes in online boutique and in result are not well known. What’s more, it is
an Australian based company, so compare with Lola and Lexi, we will have more options
in the American markets.
Overall, our advantage is providing different styles of shoes with different sizes
and width. Our quality is good. Price point is reasonable. Styles are more fashionable.
There three factors can really make us has a position in the market targeting women with
big feet.
!!!
LOLA AND LEXI BUSINESS PLAN! � 16
Competitive Analysis Matrix:
!
Our Business: Lola and Lexi
Nordstrom Zappos Shoes of Prey
Product/Service Shoes with size from 5-16 and wisth from 4A-4E
Department store: apparel, shoes, handbags, accessories
Online website like a department store
Handmade shoes
Price Range $100-$400 $25-$1000 $40-$635 $139-$289
Quality Good Moderate-Superior
Moderate-Superior
Moderate
Unique Features Selling wide range of different styles, diifferent sizes, and different width shoes
Selling over size 10, Designer Shoes
Selling different shoes, sizes 5-17.5
Handmade shoes, design your own shoes
Distribution System
Store and E-Commerce
Store and E-Commerce
E-Commerce E-Commerce
Marketing/Advertising
Buzz/WOM/Social Media
Buzz/WOM/Social Media
Buzz/WOM/Social Media
WOM/Social Media
Geographic Location
USA USA USA Australia
Strengths Average price with good quality, all the shoes styles have different width to fit women
Selling wide range of echoes including big size for designer shoes; Excellent social media
Selling wide range of shoes like Nordstrom with designer shoes; Well-known in the market
Design your own shoes, can choose style, color, material and heel heights
Weakness Should make effort on social media; New store with little recognition
Too expensive for most people; A lot of sizes are unavailable
Price are bit higher; A lot of sizes are unavailable
Abroad;No boutique
LOLA AND LEXI BUSINESS PLAN! � 17
Products and Services
At Lola and Lexi we will offer four styles of shoes, all in which they will be
manufactured with genuine leather. All styles will be available in all the sizes to always meet the
needs of our customers.
The four styles we specialize in are:
1. Heels - available in courthouse, low heeled, and sandal style. The classic styles like the
courthouse pumps will be a year round product. The textile and color will change depending
on the season.
2. Boots - certain styles will become seasonal. The motor boot and ankle boots will be a
speciality.
3. Flats - a practical and casual shoe available in neutral colors.
4. Sandals - comfortable shoe without losing its fashionable appeal; will alter base on seasonal
trends.
Lola and Lexi develops its products with a focus on quality, fast accessible fashion, and
the necessity of all stylistic individuals in mind. Our products are unique because we are
targeting women that want luxurious shoes that are fashionable and practical, but are often faced
with the dilemma that the shoes are too tight or a size large enough for their irregular feet are not
available. At Lola and Lexi, not only will women find appealing shoes but also those that will
nicely fit to their feet. Our customers will be assisted by knowledgeable sales representatives that
will measure their feet to get just the right shoe size. It will be our speciality to make our
customers feel comfortable and all their needs will be closely paid attention to. We will offer
complimentary lemonade and shortbread cookies to set an atmosphere to our customers of
LOLA AND LEXI BUSINESS PLAN! � 18
hospitality. The Lola and Lexi Collection has been carefully crafted, handmade in California
implementing comfort features, special design, intricate details, and the use of luxurious leather
all Made in America. It is Lola and Lexi’s mission to make all women look and feel great at their
feet.
!!!!!!!!!!!!!!!!!!
FALL/WINTER COLLECTION!PRODUCT LINE SHEET
‘Kerry’ Court Pump!Genuine Leather/Suede!FW14221!Size: 5-16!Width: 4A-4E!Wholesale Price: $159!Retail Price: $265
‘Minti’ Short Heel Pump!Genuine Leather!FW14222!Size: 5-16!Width: 4A-4E!Wholesale Price: $141!Retail Price: $235
‘Naria’ High Heel Sandal!Genuine Leather!FW14223!Size: 5-16!Width: 4A-4E!Wholesale Price: $159!Retail Price: $265
LOLA AND LEXI BUSINESS PLAN! � 19
!!!!!!!!!!!!!!!!!!!!!!
FALL/WINTER COLLECTION!PRODUCT LINE SHEET
‘Ramona’ Soft Slipper!Genuine Leather!FW14224!Size: 5-16!Width: 4A-4E!Wholesale Price: $117!Retail Price: $195
‘Tillie’ Lattice Flat!Genuine Suede Leather and Mesh!FW14225!Size: 5-16!Width: 4A-4E!Wholesale Price: $105!Retail Price: $175
‘Terri’ Flat!Genuine Leather!FW14226!Size: 5-16!Width: 4A-4E!Wholesale Price: $87!Retail Price: $145
‘Tammy’ Flat Sandal!Genuine Leather!FW14232!Size: 5-16!Width: 4A-4E!Wholesale Price: $72!Retail Price $120
LOLA AND LEXI BUSINESS PLAN! � 20
!!!!!!!!!!!!!!!!!!!!!!
FALL/WINTER COLLECTION!PRODUCT LINE SHEET
‘Brigham’ Moto Boot!Genuine Leather!FW14231!Size: 5-16!Width: 4A-4E!Wholesale Price: $210!Retail Price: $350
‘Harlow’ Slingback Bootie!Genuine Leather!FW14230!Size: 5-16!Width: 4A-4E!Wholesale Price: $195!Retail Price: $325
‘Rachel’ Slingback Peep !Toe Bootie!Genuine Leather!FW14227!Size: 5-16!Width: 4A-4E!Wholesale Price: $141!Retail Price: $235
‘Reina’ Slingback High Heel!Genuine Suede Leather!FW14228!Size: 5-16!Width: 4A-4E!Wholesale Price: $165!Retail Price: $275
‘Everly’ Fringe Bootie!Genuine Leather!FW14229!Size: 5-16!Width: 4A-4E!Wholesale Price: $177!Retail Price: $295
LOLA AND LEXI BUSINESS PLAN! � 21
Pricing and Distribution
Lola and Lexi’s pricing strategy will be premium pricing. The current marketplace
doesn’t currently offer the products and service that the company will hold. All of our products
are made of the finest leathers made in the United States and we will work with the greatest
shoemakers in the industry. Customers American pride want to support businesses that are all
based in the country. With that said, the prices of our products reflect these standards. All Lola
and Lexi products will be sold at retail price 40% higher than the wholesale price. It’s crucial that
the company makes profit from the products in order for it to exist.
Our tentative sales representatives are out sales tactic. They will be hired to pay close
attention to the customers’ wants and needs in order to provide them with the best product. It is
in our policy that our customers are give the best experience. Also, given that the customer is
measured to their size, but after purchasing didn’t feel sure of the product, a return can be made
but will only receive store credit. On the other hand, our website orders will include free
shipping and returns. Our website will include a downloadable guide to measure their feet at
home in order to purchase the right size and fit, but when the product arrives and the fit isn’t, a
free return with full refund will be given.
For the early stages, Lola and Lexi will only manufacture for the one store location and
online web orders. It does look into the future to gain accounts by department stores such as
Nordstrom and Bloomingdales. All online shipments will be made from within the flagship store.
!!!
LOLA AND LEXI BUSINESS PLAN! � 22
Operations Plan
After doing some research on many manufactures that are based out of the United States,
we wanted to find someone who had ten plus years of experience and handcrafted shoes
with a passion. We wanted Lola and Lexi to have the best quality shoes so that the
product itself did all the talking and brought in all their customers. We stumbled across a
manufacture that was based out of Lake Michigan in Wisconsin that was called Allen
Edmonds. This company had been around since 1922, and knew all they needed to know
about handcrafting a good quality shoe that would last a lifetime.
This company, Allen Edmonds, manufactures their own shoes since they also
have their own retail space in Port Washington, Wisconsin. Allen Edmonds provides
handcrafted shoes that are small, narrow, wide and everything in between. This
manufacture does not make “gut” sizes (9-12 medium) like other competitive shoe
companies do because they believe in handcrafting a shoes in varying sizes to fit the
customer needs (AllenEdmonds.com, 2014). Lola and Lexi believe that proper fit is
important for durability and comfort along with foot and back health. Allen Edmonds
specializes in men’s dress shoes and was willing to extend the little knowledge needed
(since they knew all about handcrafting a shoe) to help Lola and Lexi bring their store to
life. They knew how passionate they were in target the need of having well fitted shoes
for women, so they agreed to manufacture their shoe design.
The facility itself is located in Port Washington, Wisconsin and is currently the
only factory Allen Edmonds has at this time. Equipment needed varies depending on the
LOLA AND LEXI BUSINESS PLAN! � 23
type of shoe you are handcrafting. Most commonly these are the equipment needed to
construct a shoe (AllenEdmonds.com, 2014):
• Metal dies
• Hides
• Sewing machines (single/double needle)
• Eyehole punchers (lace-up shoes)
• Insole die cutters
• Plyrib machines
• Lasts (used to form the shape of the shoe)
• Heat/stretch machines
• Lasting tools (used to stretch the upper around the last)
• Goodyear welting machines
• Sanding machines
• Waxing wheels
With all this equipment needed, you know your product is touched by all hands that work
in this manufacture to ensure a comfortable fit. In 2003, Allen Edmonds invested 1.1% of
the sales to refitting their factory and hopes to save 5% on the cost to produce each shoe
(AllenEdmonds.com, 2013). As far as labor needed, the factory has replaced assembly
lines with teams of people working in groups where each employee does several different
jobs. This new system helped improve the budget for the factory, reduced overtime, and
made it easier for when employees were absent.
LOLA AND LEXI BUSINESS PLAN! � 24
After the material is sourced, it is cut by hand using sharp metal dies. Following is
when the hides are cut and marked to give sewers a visual guide for sewing the pieces
together. Then the material used is skived at the edges to reduce material bulk and
thickness. Once the material goes through these processes it is them moves up to the
upper sewing room to be sewn together. Next is the insole die cut process, to where each
sole is cut into its specific size depending on width and length. The Lola And Lexi brand
logo is then stamped on to inside of the insoles. The lasts are then inputted into the shoe
along with heat and water so it shapes and molds the shaping of the shoe. The shoes are
then protected with plastic wrap and the Goodyear welting is applied. A groove is cut into
the sole where the stitching will be sewn, and then the heel depending on the shoe style is
applied. The sole is then sanded down and burnished to the exact color and this action
usually takes three coats to ensure good coloration. The final brush is applied to the
fished product and sits for twenty-for hours with the lasting to ensure they take good
shape. After sitting for twenty-four hours the last is removes and a number of quality
inspections are done to make sure the shoe looks presentable to sell. The shoes are then
stuffed and boxed and ready to be shipped out to Lola and Lexi.
When it came down to how much product Lola and lexi wanted to produce, they
had to think smart and be knowledgeable to where they do not produce too much or too
little. The quantity had to be just right for them since they were new business owners and
wanted to demonstrate all types of shoes they would carry. So they decided to produce
thirty-six pairs per twelve styles and within those twelve styles each size will contain six
same size shoes. In total they will have four hundred and thirty-two pairs produced by
LOLA AND LEXI BUSINESS PLAN! � 25
Allen Edmonds manufacture and will split that in half so that two hundred and sixteen
will be for the store stock and the other half will be for their e-commerce stock. In order
to determine their number for their next order, Lola and Lexi will need to keep track of
what shoes size is in most demand and order more in that size. If the store does not have
your size, no need to worry, we could order them for you and offer shipping free of
charge to have them here within three business days. Lola and Lexi want to ensure that
the shoe you purchase from them is exactly what you need in order to have that
comfortable fit.
!!!!!!!!!!!!!!
LOLA AND LEXI BUSINESS PLAN! � 26
Design and Development
Critical Risk and Problems
In every new start to opening a business there is always that what if factor that
comes to mind and risks or problems that your company might stumble upon. At Lola
and Lexi there is peer positivity with every action taken, but if a problem or critical risks
occur then there is no doubt in mind that they will find a solution and fix whatever that
need fixing. Some risks that Lola and Lexi take as new business owners are the fact that
they may run out of money or mismanage their money in the same way. Time
commitment is key when owning your own business because Lola and Lexi will be the
ones doing all the work for the first year. It may not be the work they imagined
themselves doing but that comes with having a new company. Some of the common risks
to occur when operating your own business is manufacturing risk, marketing risk,
competitors cut their price, the industry growth rate drops, design or manufacturing costs
exceed your projection, your sales projection is not achieved, competitors up the ante by
releasing a new, better product, or public opinion of your product or service changes.
Every business every opened always has their down falls but its how you handle this
situation and grow from it is what reflects your success in your business plan. Its always
a good idea to plan ahead and make that assumption of “What If” something bad were to
happen how will the company bounce back. There is also a possibility that you may get a
customer that is not satisfied with the product she purchased. Lola and Lexi would gladly
accept the return and see what they are able to do in order to meet the customer needs and
wants.
LOLA AND LEXI BUSINESS PLAN! � 27
Product Improvement and New Products
Every season we will have inner changing style of our shoes that will come in the
color pallet of that season. The style of the shoe will essentially stay the same but the
material and color will change. As we continue to grow we plan on adding different style
of shoes with every new season. Adding embellishments, and different kinds of hardware
will makes its debut with the Lola and Lexi brand once we establish our loyal customers.
At Lola and Lexi we want to keep things simple but very fashion forward so that the
shoes purchased can be used more than a handful of times. Lola and Lexi would like to
offer a special shoe repair program that allows the customer to bring in there Lola and
Lexi worn-down shoe and have it repaired to bring it back to life. For example the
customer would give us they worn in shoes and we would send it to our manufacture
where they will strip the sole to add a new refreshing one. Depending on how damaged
the material is we would decide whether or not to fix it or replace it. So essentially Lola
and Lexi would bring life back into your shoe that is already broken into for a small cost
of half of what you originally paid for the shoe. As Lexi and Lola continue to grow their
plans are to open up and sell to other parties to get their brand known and bring in more
revenue for the company.
Location of business and cost:
Lexi and Lola retail location will be located in Palo Alto, California. The retail
space is by other stores like Apple and nice restaurants. There are a lot of boutiques so
the customer traffic will be good for the Lola and Lexi retail shop. As we crunch numbers
together and get an overview of what the cost would be to be in a location like this, we
LOLA AND LEXI BUSINESS PLAN! � 28
are looking at the retail space alone + utilities would be an average of $175,000/year
(Loopnet.com, Listing #18732820, 2014). Palo Alto is a very wealthy community, 58%
of residents make over $200,000/year (Loopnet.com, Listing #18732820, 2014) and with
the location being in a busy area where people come to shop at boutiques, go to the movie
theater or just hand out a the restaurants there, we will defiantly have a good range of foot
traffic and customer base as we establish our residency there.
Laws and Regulations:
The laws and regulation for a private label are as followed (The U.S. Small Business
Administration, sba.gov):
• Federal Trade Commission Act
• Country of Origin and Manufacturer identification act- include the products
country of origin on label
• Trust in Advertising law
• Price Fixing- higher prices for the consumer and higher profit for the companies
• Federal Anti-Counterfeiting
• Trademark counterfeiting Act- makes use of a counterfeited trademark a federal
offense
• Textile Fiber Identification Act
• Advertising Law
• Employment and labor Law
• Online Business Law: of privacy, security, copyright, and taxation.
LOLA AND LEXI BUSINESS PLAN! � 29
As a brand it is important to protect the company and the customers as part of the
company promise. Lola and Lexi may not encounter difficulties in their first year of
opening but you never know, something drastic can happen and customer or the brand be
projected buy all these laws and regulations. The same issue may occur with the
manufacture they are working with. It is up to them (the manufacture) to be aware of all
the laws and regulations in having a manufacture. Allen Edmonds has been around for
years so it’s a positive that this manufacture in in knowledge of laws and regulation.
The laws and regulations for a manufacture are as followed (The U.S. Small Business
Administration, sba.gov):
• American with Disability Act
• Equal Employment Opportunity Law
• Finance Law: ensure fair competition; protects the financial interests of
companies and individual investors
• Child labor law
• Employment and labor Law: benefits and wages to discrimination and harassment
!!!!!!!
LOLA AND LEXI BUSINESS PLAN! � 30
Management Team:
Partners: Lola and Lexi
Owners: Lola and Lexi
Social Media/E-commerce Directors: Lola and Lexi
Sale Associate: Natalie
Sales Associate: Allison
Intern: Vanessa (non paid)
With being a first timer in owning a business, Lola and Lexi are looked upon to
do the majority of the work within their company. It is their first year, so they are the
once basically running the show as far as managing the e-commerce site, designing,
managing their social media accounts to attract their new and retuning customers and
handle all the shipping and handling. As Lola and Lexi continue to grow, they plan on
adding more people to their team so that they can focus on their main priorities of owning
a business. The first year wont be easy but is never impossible. Planning ahead and
having a great mind set towards positivity, there is no doubt that Lola and Lexi will
become an huge hit for the market they are targeting too.
!!!!!!
LOLA AND LEXI BUSINESS PLAN! � 31
Exit Strategies
We have agreed to implicate a buy out plan in the event that any of the founding members
wish at any time to cash in the percentage of the business and leave the company.
There are two options for the buy out plan
1. If at any time one of the joined owners wishes to leave the company, she has the
right to sell her business to another person (family members or employees).
2. The other owner can buy the business from the owner who will leave and the pay
out plan of buying out the percentage of the owner who wishes to leave can be
finished within 2 years.
!!!!!!!!!!!!!
LOLA AND LEXI BUSINESS PLAN! � 32
Financial Plan
Based on the chart below, Lola and Lexi will need to borrow an additional
$100,000 for the startup of the business. Our goal within the first three years of
operations is to see a minimum of 15%-25% profit that will be reinvested into the
company to be used for the purpose of expansion into other areas. As well as, adding 5
new shoes designs every six months.
!Rough Budget of Start-Up and Operating Expenses
Category Annual Expenses $ Income $
Staffing (payroll or wages) $80,170
Payroll Taxes $25,610
Rent $167,346
Utilities (fuel, electric, water, telephone/Internet)
$10,500
POS System $8,000
POS System Maintenance $500
Marketing/Advertising $7,000
Loan Repayment (per year, paid over 5 years)
$24,000
Stock Startup $27,000
Miscellaneous $2,000
LOLA AND LEXI BUSINESS PLAN! � 33
!Second Year Financial Forecast
Online Sales $93,000
In-Store Sales $93,000
Gross Sales $282,000
Total All Expenses $352,126
Net Profit $22,874
Category Annual Expenses $ Income $
Staffing (payroll or wages) $80,170
Payroll Taxes $25,610
Rent $167,346
Utilities (fuel, electric, water, telephone/Internet)
$10,500
POS System $8,000
POS System Maintenance $500
Marketing/Advertising $14,000
Loan Repayment (per year, paid over 5 years)
$24,000
Stock Startup $27,000
LOLA AND LEXI BUSINESS PLAN! � 34
Third Year Financial Forecast
Miscellaneous $2,000
Online Sales $98,531
In-Store Sales $295,595
Gross Sales $394,126
Total All Expenses $359,126
Net Profit $35,000
Category Annual Expenses $ Income $
Staffing (payroll or wages) $80,170
Payroll Taxes $25,610
Rent $167,346
Utilities (fuel, electric, water, telephone/Internet)
$10,500
POS System $8,000
POS System Maintenance $500
Marketing/Advertising $7,000
Loan Repayment (per year, paid over 5 years)
$24,000
Stock Startup $27,000
LOLA AND LEXI BUSINESS PLAN! � 35
!!!!!!!!!!!!!!
Miscellaneous $2,000
Online Sales $186,000
In-Store Sales $564,000
Gross Sales $750,000
Total All Expenses $359,126
Net Profit $45,748
LOLA AND LEXI BUSINESS PLAN! � 36
Marketing Plan
For the beginning stages of launching the company it will rely on word of mouth. Lola
and Lexi throughout their years in corporate jobs have met a lot of people through networking.
Both partners will reconnect with their contacts and inform them about their new venture in
hopes that the word will be spread. Lola and Lexi are social media gurus, so to their friends and
families they both will post a graphic that lets them know the company is coming soon. Once the
location of the store is secured a new graphic that invites them to their store opening will be
posted.
The welcome the company, a launch party will be held as “opening day”. An invitation
flyer will be generated to spread the word. At the shopping location of the store, those that were
hired to be sales representatives will be posted on the streets prior to their regular work duties
and will hand out a flyer that was made to invite the general public and in hopes to create an
excitement. It is very important that the representatives handing out the flyers are being given to
the right people. Given that these employees will
come with previous experience in sales and are
knowledgeable about the target market, potential
customers will be easily identifiable. At this launch
party we will offer hors d’oeuvres and champagne.
We will also create a section for a Photo Booth
style activity to get attendees to post on their social
media to be able to reach a broader audience
without it costing us. Those that attend will also be
LOLA AND LEXI BUSINESS PLAN! � 37
given the opportunity to win a pair of Lola and Lexi shoes.
To be up to date with the competitive market our E-Commerce website will launch at the
same time. As part of our marketing mix we will also create a lifestyle blog that will be present
on our website. On there the founders of Lola and Lexi. will create posts that connect to the
shoes, telling a story while also engaging the company’s followers. Lola and Lexi will also be
active users on Instagram and
Pinterest each with original
content to be able to reach
the different social media
users. What is great about the
social media platforms is that
it doesn’t have a cost
attached to it and a bigger
audience can be reached.
This gives the ability for the
company to put its efforts in creating great products and an E-Commerce site that is practical and
easily accessible. Also, Lola and Lexi will throughout the year will create giveaway contests that
requires followers to repost an image by the company in order to be entered. The spread of the
image is a marketing tool that gives the company exposure without doing the actual work. Given
that this will be a local store, Lola and Lexi will work to make collaborative events with other
local businesses that tie with the company’s mission to bring both consumers together. All of
these are efforts in marketing to the public that results in customer loyalty.
LOLA AND LEXI BUSINESS PLAN! � 38
References
(2014, June 15). . Retrieved June 29, 2014, from http://www.loopnet.com/xNet/MainSite/Listing/
Profile/ListingDemographics.aspx?
LID=18732820&PgCxtGuid=f711fd93-6274-46a1-9c1a-1e801a1f7171&PgCxtFLKey=&PgCxt
CurFLKey=ProfileSE&PgCxtDir=Down
American FactFinder - Results . (2012, January 1). American FactFinder - Results . Retrieved
June 29, 2014, from http://factfinder2.census.gov/faces/tableservices/jsf/pages/
productview.xhtml?src=bkmk
Balavage, C. (2014, May 31). God Save My Shoes | Film Review. Frost Magazine. Retrieved
June 29, 2014, from http://www.frostmagazine.com/2012/05/god-save-my-shoes-film-review/
ZIP Code Look Up. (n.d.). PRIZM > Market Segmentation Research, Tools, Market Segment
Research,. Retrieved June 29, 2014, from http://www.claritas.com/MyBestSegments/Default.jsp?
ID=20&pageName=ZIP%2BCode%2BLookup&menuOption=ziplookup#
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