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 to 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.
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Executive Summary for an Online Apparel Business Plan.
The executive summary section for an online apparel business plan should, as normal, discuss briefly each aspect, or segment, in your apparel business plan. Specifically, make sure to touch on what your company sells, industry research, organizational structure, funding needs, and anticipated financial projections. However, the online apparel business plan executive summary should also briefly explore the owner's background and apparel sales. One or two sentences will do. For example, if the owner has a degree in fashion, then this is an excellent place to state the fact. By introducing the owner's background, this practice may lend credibility to the longevity of the proposed business.
The company information section for an online apparel business plan should highlight the various products sold. In some cases, an online apparel business may focus on national brand sales such as Nike, Adidas, and the Banana Republic. In other instances, an online apparel store may sell only company designs and products. By providing insights into core competencies, readers of the documents will be able to understand the foundational, core structure of the business.
Also, historically, apparel companies start as brick-and-mortar organizations, and then, as sales and brand recognition grow, they moved to online sales. However, in the last few years, this traditional strategic plan has shifted, well actually has been completely reversed. Nowadays, business owners seeking to establish an apparel business now start selling products online and then moved to a retail location. The seismic shift in the marketplace should be noted in a well-documented apparel business plan. Specifically, our apparel business plan writer recommends discussing the strategy in the strategic planning subheading in the company description section of the business plan. In addressing and acknowledging the shift in the marketplace, business owners are able to show up-to-date industry knowledge and display high levels of strategic planning in relations to a changing marketplace.
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 where individuals will understand what you’re selling but not so much information where 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, 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 revenues for 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 payment 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