How to Write an Online Apparel Business Plan or Template
The online apparel industry has been growing substantially over the last several years. There are numerous reasons why this industry is booming.
For example, online marketplaces such as Amazon or eBay have become crowded and difficult for new entrants to compete on their platforms. Because of this, startup online apparel companies have sought out innovative opportunities like starting their own website or selling on the Facebook marketplace. By focusing on more localized markets, online apparel sellers have been able to develop niche product offerings for smaller target markets. The results are booming online apparel sales utilizing creative, strategic marketing, and other platform initiatives.
As the demand for online apparel grows, more and more competitors will inevitably enter the marketplace. As this happens, new entrants, as well as established companies, will need to develop competitive advantages and secure funding sources for their organization. Regardless of which activity is needed, having a well-written online apparel business plan or online apparel business plan template is an absolute necessity. From this, our online apparel business plan writer has come up with some tips and tricks on how to write a well-structured plan.
Executive Summary for an Online Apparel Business Plan.
The executive summary section for an online apparel business plan or in online apparel business plan template should include important information about the organization, such as its name, location, city and state, and main products sold online. Further, our online apparel business plan writer also recommends the business owners in this industry talk about whether their online apparel store will complement a brick-and-mortar retail location or will just be focused on online sales. By briefly talking about the strategic structure in the executive summary, the business owner is able to provide a broad strategic understanding of how the online retail store will operate and the parameters for its business models (6/22).
The company information and location section for an online apparel business plan should start off with again identifying the company’s name, many products sold, and location. Further, online apparel business owners should also include a paragraph or two in the section about suppliers. This is important because a lot of apparel businesses have their goods shipped from overseas. When this happens, they are susceptible to supply-chain issues such as tariffs or shipping delays. If this is a case for your business, make sure to state that this could be an issue and then discuss specific strategies that may be used to mitigate the problem. Further, if your online apparel store makes its own products or has domestic manufacturers, this could be discussed in the competitive advantage section of your company information segment. Regardless of your individual situation, make sure to discuss suppliers briefly and their benefits or challenges (6/22).
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Service Description and Competitive Advantages
The service description section for an online apparel business plan should describe the various products sold by your organization. For example, if your apparel business will focus on sneakers, then provide a discussion about the brand sneakers, such as Nike, Adidas, and Puma, that may be offered for sale on your site. Further, if you also sell accessories such as purses, jewelry, and perfumes, make sure to provide some general descriptions of these as well. Just keep in mind, when writing the product description for your business, provide enough information that individuals will understand what you’re selling but not so much information that it becomes tedious or difficult to maintain the plan. An example of too much information would include discussions about specific prices, styles of shoes, and product sizes.
The target market and online apparel business plan should focus on your main customer demographic. If you plan on selling high-end women close then your target market may be middle and upper-class women between the ages of 40 and 65. In contrast, if you plan on selling soccer clothing and equipment, then your target market may be soccer fanatics and participants between the ages of eight and 25. By knowing your target market for your online apparel business, business owners are able to design their websites using formats, colors, and other strategies to best appeal to this market. Just keep in mind, that just because you have a target market does not mean that is the only demographic that will be appealed to your products and services.
Industry research for an Online Apparel Business Plan
The industry research for an online apparel business plan will really depend upon which products and services your organization will be offering. If your online apparel company will sell designer clothes, then IBIS World has some excellent research related to the online designer clothes sales industry. For example, this industry has generated approximately $10 billion in revenue in the last year. Further, the annual growth rate, historically, for the last five years was approximately 9.5%. However, industry experts anticipate this market to become saturated within the next several years. From this, annual growth rates for the foreseeable future are expected to fall to approximately 3%. On a final note, profit margins for this industry hover around 10%, which is moderately higher than most online retail sales. Based on this information, an online apparel business owner may then examine local and regional competitors as well as discuss industry trends in the marketplace.
The owner and management section for an online apparel business plan should start with the owners' experience with their online product line. To illustrate, if the owner has significant retail sales experience, then this experience may translate into understanding fashion trends and experience with controlling inventory levels. For an educational experience, like a business or fashion degree, make sure to document what school the degree was administered and highlight any awards received through your academic travels. By following either or both of these strategies, a business owner is able to set a strong foundation to justify their desire for an online apparel entrepreneurial endeavor.
Funding Request for an Online Apparel Business Plan
The funding request section for an online apparel business plan should start with explicitly stating the dollar amount needed to start operations. Once the dollar amount needed to start operations is stated, then identify specific categories that will need funding in order to start operations. Popular funding categories may include money for working capital, designing and launching your website, purchasing inventory, and renting warehouse space for storage. Once these categories are identified and the dollar amount allocated, then make sure to total up the sum of the funding needed at the bottom of your Excel sheet. In following this practice, an online apparel entrepreneur is able to specifically show how much funding is needed at the start. But it also gives them wiggle room when allocating funds to budget as compared to showing a specific dollar amount for each item possibly needed.
The financial projection section for an online apparel business plan, as well as an online apparel business plan template, should start with estimating daily sales. Daily sales should be broken into the number of customer services on the first day as well as the average expected dollar amount sold. Next, identify what your average variable cost will be for your products. For example, if you will be selling Nike sneakers, then the average sale price may be $150 with a variable cost of $90 or a 60% variable cost. Keep in mind your variable cost will include not only the sneakers but also packaging material, postage, and other costs that occurred when preparing your product for sale. Next, identify your fixed cost for your online company. Common fixed costs may include monthly payments for website hosting, labor, smartphone bill, and warehouse rental. Once these costs are identified, then deduct them from your gross profits.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author