The Perfect Fit
Business Plan
Lauren Rose D'Alessandro
Table of Contents
Section
Executive Summary
Start-up Summary
Products and Services
Competitive Comparison
Growth Plan
Industry Analysis
Page Number
3
3
4
5
6
6
Market Research
Main Competitors
9
12
SWOT Analysis
Pricing Strategy
Sales Forecast
Management Team
14
15
15
16
Financial Plan
17
Appendix
Works Cited
22
27
Page 2
Executive Summary
The Perfect Fit is a specialty retail store that will provide a wide selection of bras in sizes 28D-36K. It will
carry a large selection of popular lingerie brands as well as the store’s own line of everyday bras. The Perfect Fit
will also retail a variety of sleepwear, sportswear, and other accessories.
Currently, this venture is in the start-up phase: it will be a limited liability company located in Cherry Hill,
New Jersey. Lauren D’Alessandro is the owner and will also be the store manager. She has two years of retail
experience and is completing her bachelor’s degree in entrepreneurship from Rowan University in May of 2010.
Eight out of ten women are wearing the wrong bra size, (Jo Roberts, “Learning Curves”). Not only does an
improperly fitted bra appear less flattering, but it can also cause back problems and shoulder dents. For women
who are smaller framed but have to wear extended cup sizes, finding lingerie in their size can be a daunting task.
The Perfect Fit’s goal is to provide them with the widest selection of comfortable lingerie, as well as highly trained
associates who can provide them with excellent customer service. In the first year, the store will open and its
product line will be introduced. This line will consist of four bra styles, including a t-shirt bra (available in fullcoverage or demi), a multi-way bra, and a cleavage bra. By the third year of operation, The Perfect Fit will begin
retailing its products online, and by the fourth year the product line will expand to include more bra styles and
other clothing products.
The owner is looking for an angel investor to raise $500,000 of capital to cover the first two years of
operating expenses. She is willing to negotiate paying the investor a percentage of the business’s income for the
first ten years of operations.
Start-Up Summary
The following table summarizes the start-up costs associated with the first year of operations.
(Table 1)
Start-up Expenses
Marketing and Advertising
Store Fixtures
Equipment
Security Deposit
Legal
Product Design
Total Start-up
$23,889
$13,400
$3,914
$5,000
$2,000
$10,000
$58,203
Page 3
The following table illustrates all assets to will be purchased as part of the start-up.
(Table 2)
Store Fixtures
Mannequins
Shelving
Clothing racks
Total Fixtures
$ 400
$ 8,000
$ 5,000
$13,400
Equipment
Dell POS System
Printer
Safe
Total Equipment
$ 3,314
$ 100
$ 500
$ 3,914
Furniture
Desk
Filing Cabinet
Desk Chair
Folding Chairs (6)
Card table
Mini fridge
Total Furniture
$
$
$
$
$
$
$
100
50
50
240
50
100
590
Locations and Facilities
The first location for The Perfect Fit will be either in or near the Cherry Hill Mall. The majority of women in
the market research survey conducted purchase lingerie in stores that are located in shopping malls, so The
Perfect Fit will provide convenience by being in a prime shopping location. The owner is currently searching for
available store space in these areas.
The operating hours are projected to be:

Monday – Saturday 10am – 9:30pm

Sunday 10am – 6:30pm
Products and Services
1.
Lingerie: The Perfect Fit will be carrying a wide variety of bras in sizes 28D-36K by popular brands
that will include Wacoal, Felina, Chantelle, Fantasie, Lunaire, Freya, Panache, and Wonderbra. In
addition to these brands, the store will carry its own line of bras. The line will initially focus on
comfortable everyday bras. In the market research that that was conducted for this business
plan, it was found that comfort and fit were the qualities women found most important, followed
by good quality and seamless fit under clothing. Because of this data, these characteristics will
be the initial focus of the line. There will be four basic designs that will be manufactured by a
textile company at a cost of $30 per unit. The Perfect Fit will hire a designer to create the original
Page 4
patterns for these products. Basic diagrams and explanation of the product design can be found
in the appendix (page 22).
2.
Loungewear and activewear: The Perfect Fit will carry a selection of robes, pajama sets, slippers,
sweat suits, sports bras, and workout clothes.
3.
Other accessories: The store will also carry important basics, including band extenders, clear
straps, pasties, laundry bags, detergent, stockings, and shapewear.
Competitive Comparison
1.
Large chains of stores with well-known names are our biggest form of competition. The most
obvious examples are Victoria’s Secret, Aerie, and Cacique, which all specialize in lingerie.
Department stores are also competitors. Nordstrom, Sears, JCPenney, Macy’s, Lord & Taylor, and
Boscovs are all found in the area that the first store will be located. The main thing that will set
The Perfect Fit apart from these other stores is the variety of sizes and styles that will be carried.
2.
Specialty stores are a second form of competition. Chrysi’s Bra Boutique is the only lingerie
boutique located in Cherry Hill. There are no other major specialty stores that retail bras in the
area around Cherry Hill.
3.
Discount retailers such as Wal-Mart and Target are a third form of competition, as they carry
selections of bras, underwear, and sleepwear at low prices.
Technology
The Perfect Fit will use a point of sale system that will track inventory and transactions with customers. An
accounting software system will be used to keep up with the day-to-day transactions of the business, as well as
perform payroll functions.
A customer relationship management database will list customers by name and keep data on their bra
and clothing sizes, favorite items, and contact information. This database can be used to assist customers (for
example, if a man wants to purchase items for his wife who has shopped at the store before, it will take away
some of the guesswork) as well as to send them promotional materials such as catalogs and coupons.
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Future Products and Services
The following timeline illustrates the growth plans for the first six years of operation. These plans include
the expansion of the store’s product line and the use of a website for retail.
(Table 3) Six Year Growth Plan
Year One
Year Two
Year Three
Year Four
Year Five
Year Six
 Open first store
 Perfect bras
already
produced
 Expand and begin
producing
sleepwear,
lingerie, and
sportswear
 Begin plans
to open new
locations
 Retail sports
attire, lingerie,
and sleepwear
 Conduct
market
research to
determine best
way to expand
store’s own line
 Focus on
branding
 Focus on CRM
 Continue to
grow
customer base
 Begin online
retailing
 Work to
increase
revenue from
online retail
 Produce four
bra styles
 GROWTH
 Develop store
website
 Carry fewer
outside brands
Target Market Segmentation
The Perfect Fit will be located in Cherry Hill, New Jersey. Our target market includes women in Camden
County as well as Burlington and Gloucester counties who fall between the ages of 20-49. As shown by the table
below, the total target market is composed of approximately 267,126 women.
(Table 4)
County
Total Females
% 20-49
Target Market
Burlington
225,284
41.50%
93,493
Camden
266,249
41.40%
110,227
Gloucester
146,097
43.40%
63,406
Total Target Market
267,126
Market Needs
“The complex physical nature of the bra and the unique physiological makeup of each bra wearer suggests
that consumer behavior for bras will be different from that for other apparel,” (Hart and Dewsnap, “An Exploratory
Study of the Consumer Decision Making Process”). Not only are all women different, but a woman’s breast shape
and size can change many times throughout her life due to pregnancies, weight gain, hormonal changes, etc. Many
Page 6
women have little knowledge of how a bra should fit them and perform for them. As a result, 80% of women are
wearing the incorrect bra size, (Jo Roberts, “Learning Curves”). Also, women view bras as a high-risk purchase, due
to the fact that even if the bra does appear to fit in the store, its qualities can change after a washing or two.
Another problem is that there is a huge disparity in sizes among different brands of lingerie, and sometimes even
within a brand. Women shopping for lingerie express the desire to be brand loyal; this desire is complicated by the
fact that bra styles frequently get discontinued, so the process of finding a style they like begins all over again. All
of these factors make it very difficult for women to select well-fitted, good quality lingerie.
Koff and Benavage (1998) found that, “Lower self-esteem was associated with lower breast size
satisfaction…while high public self-consciousness, social anxiety, and appearance preoccupation were associated
with a mismatch between the ideal and perceived size,” (Hart and Dewsnap). The way a woman’s bra performs can
drastically affect her self-esteem and confidence. Unfortunately, many women find bra shopping to be “a
nightmare, frustrating, boring, a necessary evil, and traumatic,” (Hart and Dewsnap). Most women do not find it to
be an enjoyable experience, and the reasons include “lack of attractive bras in larger sizes, lack of choice in
general, the difficulties encountered in finding bras that offer fit, comfort, and the right body shape through
clothes,” (Hart and Dewsnap).
Not every experience has been a bad one; under some circumstances, women have had good bra
shopping experiences. It was found that factors leading to a good experience included when a women was able to
find a bra and return later to make a repeat purchase, when they had money to spend, if the women was a
standard size (which meant she was offered a wider range of choices), and if the woman was shopping for a bra for
a specific occasion (Hart and Dewsnap).
Market Trends
Price, value, and quality are important features that women are looking for right now in apparel. Even
though women are still shopping, getting a good deal is important to them. Currently, the price threshold for a
single bra has gone from $48 or $50 to just $40, which puts pressure on lingerie stores to provide stylish lingerie at
lower prices. “Consumers loyal to an upscale brand are still buying bras in the $60 to $69 range, but are purchasing
one style as opposed to two or three,” (Monget and Iannaccone, “Chantelle Charts Fast-Track Retail Plan”).
Page 7
Online lingerie stores such as FigLeaves.com, BareNecessities.com, Jockey International, HerRoom.com,
Frederick’s of Hollywood, and the Victoria’s Secret online store are doing well. Sites use tools such as “The Bounce
Test” (Monget and Iannaccone), used by Frette Inc., which includes videos of a model testing out the sports bras so
that women can have an idea of how the bra will perform for them. They also rely on customer feedback to help
them improve their services. Rising gas prices may be one factor contributing to the growth of these businesses.
Another reason why boutiques and websites are doing well is because “consumers are rejecting promotional and
generic-looking merchandise at major stores that often do not provide the personalized service or specialty and
fashion products… of a boutique or website,” (Georgia Lee, “Specialty Stores Get Personal”).
Despite the success of online vendors, most women still generally prefer shopping in stores to the
Internet. Women often go shopping because they find it therapeutic. “Women like the scene, the service, being
told something looks good on them, that is why they do not shop a lot on designer websites. A woman gets no joy
out of clicking on a mouse and buying a dress,” (“It’s a Love Thing 2006”).
Market Growth
The women’s intimate apparel market in the United States took in an estimated $9.8 billion in 2007
(ReportLinker.com, “U.S. Market for Women’s Intimate Apparel”), and it continues to grow at a slow but steady
pace. According to Maidenform’s CEO Maurice Reznick, the intimate apparel industry is doing very well (Cnbc.com,
“Intimate Apparel Sales Heating Up”). Despite the economic downturn, women (and men) are still buying lingerie.
Specialty lingerie stores are getting great business, especially those which offer a wide selection of sizes and styles,
as well as bra fittings and personalized assistance. It provides a great opportunity for a business to work on
relationship marketing and to have loyal customers and repeat sales. Victoria’s Secret, perhaps the most popular
example of branding in the lingerie business, has been doing well and expanding the styles it offers to customers.
Bravissimo, a specialist underwear chain in the UK that specializes in D-K cup sizes, has enjoyed great success since
its start in 1995.
The market for D cup sizes and above has recently had sharp increases (Jane Bainbridge, “Form and
Function Fuel Sales”). This can be explained by increases in obesity, plastic surgery, and better fittings being
offered by stores. This trend has also contributed to the success of boutiques, because these types of stores offer
more customized service and carry more sizes than stores like Victoria’s Secret, Target, and Wal-Mart.
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Market Research
A team of three Rowan students (Andrew Amand, Kevin Lynn and Lauren D’Alessandro) conducted
marketing research to gather more information. The purpose of the research was to determine if there is a market
for a retail store specializing in extended size lingerie, and to analyze the various characteristics of the segments of
this market to determine consumer preferences, buying habits, and the shortcomings of the current market.
In order to collect this information, a 16-question marketing research questionnaire was used. (Appendix,
page 23) Because this is a product specifically for women, only women were included in the population sample. A
total of 51 questionnaires were administered. Due to the time constraints of this project, a convenience sample
was taken, which was composed primarily of Rowan University students and coworkers, as well as some family
members.
Because a convenience sample was used, the results are generally limited to the younger segment of the
target market. In future research, one of the objectives would be to survey more women in their 30s and 40s to
determine if their preferences are the same, or if there are significant differences. Another limitation was that
some women gave more than one answer to certain questions, or checked more than one response in the multiple
choice, which could have skewed the results for a few of the questions. There were also a few questions that were
misunderstood, and had to be thrown out. 
Of those surveyed, 27.6% of women indicated that they wear a bra size fitting within the range of sizes
that The Perfect Fit will carry. This is good news, because it means that a significant portion of consumers will be
able to purchase the specialty products being offered.
Overall, 70.6% of respondents normally purchase lingerie in stores that are usually found in a mall
(Victoria’s Secret, department stores, and Aerie). These findings support the decision to locate the first store in or
near a shopping mall.

The mean age of participants was 22.53, and the median was 22.5, and the mode was 21.
70.7% were in their twenties, 25.5% were teenagers, and 4% were above the age of 30. 92.2% were single, 3.9%
were married, 2% were divorced, and 2% were widowed. 39.2% had completed “some college” and 35.3% had
received their Associate’s Degree. Those with a Bachelor’s degree made up 7.8% of respondents, while 15.7% had
completed high school or received a GED, and 2% were still in high school. Lastly, 15.7% of respondents were
employed full-time; 68.6% were employed part-time, and 15.7% were not employed.
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When asked what the name brand of their favorite bra was, 31.4% did not reply or stated that they were
not sure; 31.4% answered Victoria’s Secret but did not specify which bra. 7.8% said Victoria’s Secret Very Sexy
Push-Up; 5.9% wear the Victoria’s Secret Biofit. The remaining 23.8% listed ten other brands as their favorite.
Because such a large portion of women did not answer the question, it can be concluded that a decent portion of
the market are either not brand loyal, or desire to be, but have not found a bra that they can be loyal to. This
means that there is opportunity for new retailers to seize the loyalty of a portion of the market. The second part of
the question asked what they liked about their favorite bra. 35.3% of participants did not respond; 27.5% said
comfort, 5.9% said style, 3.9% said that it enhanced their size, 2% said quality, 2% said good lift, 21.6% said fit, and
2% said that they could buy the same bra every time they shopped.
The two ranking questions asked in the survey were designed to show what potential customers value
both the product and the experience in the store. The first question asked respondents to rank six bra
characteristics in order of importance, with 1 being the least important and 6 being the most important. These
qualities included 1) Good fit, 2) Stylish, 3) Comfortable, 4) Doesn’t show under clothes, 5) Good quality, and 6)
Low price. The chart below shows the six characteristics and their average rank.
(Table 5) Preferred Lingerie Characteristics and their Average Rank
High Priority
Moderate Priority
Lowest Priority
Comfort (4.43)
Fit (4.37)
Good quality (3.49)
Seamless (3.12)
Low Price (2.84)
Stylish (2.75)
The top two, middle two, and lowest two characteristics were very close in their average rank. The feel, or
comfort of the bra, and the fit, which refers to the way that it shapes and supports the breasts were the most
valued qualities. Next came the quality of the bra, which refers to the actual construction and how sturdy the bra
is, and how seamless the bra is (if it shows under clothing). Of the least importance were price and how stylish the
bra is. This chart shows that the women in our survey value function over price and appearance. While most noted
that stylish bras are a plus, they would rather choose a bra that is well made, comfortable, and creates the desired
shape under clothing.
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The second ranking question asked the respondents what variables make bra shopping a good experience,
and asked them to rank them from 1 to 5, with 1 being the least important. There was a less distinct variation
between the average rankings for these variables.
(Table 6) Preferred Shopping Experience Qualities and Their Average Rank
Women have very concrete ideas about what they want in
Highest ranked
a bra, but they seem to be less aware of what they want or need
Wide selection (3.71)
when it comes to a good shopping experience. It is interesting to
Affordable prices (3.65)
note that most women valued comfort and fit as being most
Organization of Merchandise (3.53)
Comfortable fitting rooms (2.10)
important, but then “bra fittings offered” received the lowest
Bra fittings offered (2.02)
ranking in the next question. Wearing the right size bra will greatly
Lowest Ranked
improve both the comfort and fit, and many women are not knowledgeable enough to assess the fit on their own,
which is why receiving a professional fitting can be so helpful. The majority of respondents (56.9%) have never
received a bra fitting. The fact is women who receive fittings are more likely to find the correct fit and also to find a
style that they prefer. The availability of assistance (from bra fittings to advice on which styles to try), the
organization of the store, and the selection of merchandise have a huge impact on whether or not a women is able
to find products that meet her needs. This information shows that many women do not see the correlation
between the shopping experience and their satisfaction with the product itself.
There is a decent-sized market for extended size lingerie (approximately 27.6% of women). Approximately
7.8% might become a part of the market if they were educated about proper bra sizing. The majority of
participants would be willing to spend more money on higher quality bras, so it will be more important for this
new venture to focus on providing quality rather than cutting prices. Women generally dislike bra shopping due to
the small selection, lack of available sizes, and having to spend a lot of money on uncomfortable or cheaply made
bras.
Most women have a pretty good idea about what they are looking for in a bra, but they are less sure
about what they want in a shopping experience. They also fail to see how important the experience can be in
helping them to find the right bra for them. It will be important to educate customers about the importance of a
Page 11
properly fitting bra, and how receiving a good fitting and personalized service from a professional can have a big
impact on their satisfaction with the product they purchase.
Main Competitors
Victoria’s Secret is one of the largest lingerie companies around, and they rely heavily on branding to sell
their product. They sell bras and lingerie, sleepwear, clothing, beauty products, shoes, and more in over 1,000
store locations, as well as in their mail order catalog and at VictoriasSecret.com. They offer bra fittings in their
store.

Victoria’s Secret is a threat because of its huge presence and large number of locations. It is a wellestablished company and has a significant portion of the market share. They carry up to size DD, and
recently have included 32D and 32DD in their size range. Many women would be likely to turn to
Victoria’s Secret for their lingerie because of the popularity and the brand name.

Victoria’s Secret’s product is known to wear out quickly, which many survey participants pointed out. This
presents The Perfect Fit with the opportunity to develop bras of higher quality. The store will also provide
a different size range; Victoria’s Secret only offers lingerie up to a DD, and they don’t offer a wide variety
of choices in sizes past a C cup. They also don’t carry any band sizes lower than 32.
Cacique is a brand of intimates created by Lane Bryant, one of the most recognized plus-sized retailers. It
provides lingerie in sizes 36-48 B-H, and also offers bra fittings.

Cacique offers a great variety of styles and sizes. They are a threat because their size range does overlap
with The Perfect Fit at some points, so some women that fall in the overlap may choose Cacique over The
Perfect Fit because it is established and part of a well-respected brand.

Generally, Cacique focuses on a different size range: they offer sizes that fit plus-sized women, while The
Perfect Fit will cater to petite women who have larger chests.
Nordstrom is one of few department stores that offer extended sizes beyond DD. On their website, they
offer sizes ranging from 30AA-52HH. Their intimates department in their store has bra fit specialists to help
customers find the right size.
Page 12

Although Nordstrom does carry extended sizes, they don’t have a wide selection. The selection they do
carry doesn’t provide optimal support. The styles are mostly lingerie bras that aren’t built for everyday
use.
Intimacy is a specialty store that has locations in many major cities (including New York, Washingon DC,
and Chicago); customers make appointments for a bra fitting and a specialist helps them find their size and brings
them a variety of bras that they might prefer.

Intimacy has a wide variety of bras, and they give customers personalized attention. They have been in
business since 1992, and they are experts at bra fittings.

Customers are not allowed to shop through the bras on their own. They are not getting the experience of
being able to shop through and select product themselves. Also, price points are extremely high;
customers pay a premium price for the wider range of sizes, but the selection is the same that would be
offered in most stores that carry extended sizes. Because the stores are only located in major cities, a visit
to Intimacy would be a day trip for someone living in the South Jersey area.
Chrysi’s Bra Boutique is a specialty shop located on Route 70 in Cherry Hill. They are a small store and
they have a selection of bras in larger sizes.

Chrysi’s does have some extended sizes available, and they offer in-store fittings.

They don’t have a wide selection of styles or colors. They don’t provide a fun shopping experience, and
are located in a small block of stores that is much less convenient than a mall location.
Other competitors include department store lingerie departments, such as Sears, JCPenney, and more;
specialty boutiques; and stores like Walmart and Target. The main advantage that The Perfect Fit has over these
stores is a wider selection of sizes and styles.
Websites such as FigLeaves.com, BareNecessities.com, and HerRoom.com all sell lingerie in a wide range
of sizes. These websites also do not have a great selection, and there is the risk of having to buy things without
having tried them on.
Page 13
SWOT Analysis
Strengths

By focusing on a specific market niche, The Perfect Fit can provide more variety

Providing higher quality products, which are in demand according to market research

Owner’s knowledge of the intimate apparel market

Proven business model
Weaknesses

Higher costs for quality products

Lack of in-house design expertise

Owner’s lack of management experience
Opportunities

Growing demand for D+ cup sizes

Expanding to new locations

Online retail

Expanding the product line
Threats

Entering a highly competitive market and competing against well-established brands

When the economy is in recession, it causes the price threshold for items such as bras to drop
Value Proposition
Customer service is one of the most important things that The Perfect Fit will offer customers. Every
employee will be trained to assist customers in bra fittings and to help them find the best items that match their
body type and their taste.
Competitive Edge
The Perfect Fit is filling a need that is often unmet in the intimate apparel market. While other stores are
starting to pick up on the trend to include larger cup sizes in their size offerings, the store will compete by offering
a wider variety. Because The Perfect Fit specializes in larger cup sizes only, there will be more in- store space to
Page 14
stock a wider variety of lingerie in these sizes than can be found in other stores. The Perfect Fit will also compete
by producing its own line of bras and filling the need for comfortable, everyday bras in large sizes.
Promotional Strategy
To promote the Grand Opening of the store, The Perfect Fit will print small brochures that include savings
coupons and send them to women on a mailing list. These brochures will also be distributed at locations such as
women’s health clubs, clothing stores, and college campuses. Once the store has an established mailing list,
savings coupons and notifications of sales will be periodically distributed to keep customers coming back. There
are also plans in motion to host a fashion show event to promote the new line of bras. Companies selling products
and services for women (such as salons, make-up companies, etc.) will be asked to come to the event to provide
women with free samples of their services. Not only will this promote The Perfect Fit, but other companies with
complimentary services will get the opportunity to promote themselves as well.
Pricing Strategy
All merchandise bought from wholesalers and manufactured will be marked up 100%.
Sales Forecast
Sales for the first year were based on the sale of 7,963 units of a product that sells for $60/unit. Sales
should increase by 20% in the second year and by 30% in each of the following three years. The seasonalized sales
per month can be found in the appendix (page 26).
(Table 7)
Sales Forecast Table
Year 1
Unit Sales
Year 2
7,963
60
Year 3
9,556
60
12,422
$ 477,780
$ 573,336
$ 745,337
$ 968,938
$ 1,259,619
Direct Unit Cost
$
$
$
$
$
Direct Cost of Sales
$ 238,890
30
$ 372,669
$
60
20,994
Total Sales
$ 286,668
60
16,149
$
30
$
Year 5
Unit Price
30
$
Year 4
30
$ 484,469
$
60
30
$ 629,810
Page 15
Management Team
The owner, Lauren D’Alessandro, will be managing the business until it becomes more well-established.
Lauren D’Alessandro has an associate’s degree in business and is completing the last semester of her bachelor’s
degree at Rowan University. She has also worked as a sales associate at Victoria’s Secret for two years.
Bonnie McCloy will be filling the second management position. She has experience in inventory
management and sales and has the ability to use Quick Books. She is currently completing her bachelor’s degree in
finance at Rowan University.
Any gaps in expertise will be filled by the recruitment of a three-member board of advisors, which will
include a retail advisor, a financial advisor, and a marketing advisor. The owner is currently seeking qualified
persons to fill these positions.
Personnel Plan
The Perfect Fit will employ two managers (including the owner) and about eight sales associates. The
sales associates will be trained to assist customers by giving bra fittings, run the register, clean the store, and
perform stockroom duties. For the safety of employees and to avoid theft, there must be at least one manager and
one employee in the store at all times.
(Table 8)
Personnel Table
Year 1
Year 2
Year 3
Year 4
Year 5
Co-Manager
$ 30,000
$ 33,000
$ 36,300
$ 39,930
$ 43,923
Sales Associate(s)
$ 49,692
$ 59,627
$ 77,515
$ 100,770
$ 131,000
My Salary
$ 40,000
$ 46,000
$ 52,900
$ 60,835
$ 69,960
Total People
Total Payroll
9
$ 119,692
11
$ 138,627
13
$ 166,715
15
$ 201,535
17
$ 244,883
Financial Plan
According to the following break-even analysis, the monthly break-even point is 690 units, or $41,388 in
sales.
Page 16
(Table 9)
Break-Even Analysis Table
Monthly Units Break-Even
690
Monthly Revenue Break-Even
$ 41,388
Assumptions:
Average Per-Unit Revenue
$
60
Average Per-Unit Variable Cost
$
30
Estimated Monthly Fixed Cost
$ 20,694
The table below illustrates the projected net income (loss) for the first five years of operations. Sales
projections are based on a 20% increase in sales for the second year and a 30% annual increase in years 3-5.
(Table 10)
Pro Forma Profit and Loss
Year 1
477,780
Year 2
573,336
Year 3
745,337
Year 4
968,938
Year 5
1,259,619
Cost of Sales
238,890
286,668
372,668
484,469
629,810
Gross Margin
Gross Margin %
238,890
50%
286,668
50%
372,668
50%
484,469
50%
629,810
50%
Payroll
Advertising
Rent
Utilities
Insurance
Supplies
Accounting
Pest Control
Misc. Expense
124,176
23,889
60,000
7,200
10,000
840
3,200
900
9,556
147,979
22,933
63,000
7,560
10,000
882
3,360
900
11,467
183,244
22,360
66,150
7,938
10,000
926
3,696
900
14,907
228,380
19,379
69,458
8,335
10,000
972
4,066
900
19,379
286,286
12,596
72,930
8,752
10,000
1,021
4,472
900
25,192
Total Operating Expenses
Start-up Costs
239,761
58,203
268,081
-
310,121
-
360,868
-
422,150
-
Total Expenses
297,964
268,081
310,121
360,868
422,150
Gross Income
Tax (30%)
Net Income
(59,074)
123,601
37,080
86,521
207,660
62,298
145,362
Sales
Operating Expenses
(59,074)
18,587
5,576
13,011
62,547
18,764
43,783
Page 17
The following table represents The Perfect Fit’s balance sheet for the first five years of operations.
(Table 11)
Pro Forma Balance Sheet
Assets
Year 1
Year 2
Year 3
Year 4
Year 5
Current Assets
Cash
Inventory
Total Current Assets
$(10,987)
$ 9,500
$ (1,487)
$ 32,171
$ 11,400
$ 43,571
$118,589
$ 14,820
$133,409
$263,804
$ 19,266
$283,070
$487,380
$ 25,046
$512,426
Long-term Assets
$ 17,904
$ 17,904
$ 17,904
$ 17,904
$ 17,904
Total Assets
$ 16,417
$ 61,475
$151,313
$300,974
$530,330
Liabilities and Capital
Year 1
Year 2
Year 3
Year 4
Year 5
Current Liabilities
Accounts Payable
Current Borrowing
Total Current Liabilities
$ 25,853
$
$ 25,853
$ 31,912
$
$ 31,912
$ 39,740
$
$ 39,740
$ 49,755
$
$ 49,755
$ 62,687
$
$ 62,687
Long-term liabilities
Total Liabilities
$
$ 25,853
$
$ 31,912
$
$ 39,740
$
$ 49,755
$
$ 62,687
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$
$
$ (9,436)
$ (9,436)
$ 16,417
$
$ (9,436)
$ 39,000
$ 29,564
$ 61,475
$
$ 29,564
$ 82,009
$111,573
$151,313
$
$111,573
$139,646
$251,219
$300,974
$
$251,219
$216,424
$467,643
$530,329
Net Worth
$ (9,436)
$ 29,564
$111,573
$251,219
$467,643
Page 18
The table below is the statement of cash flows for the first five years, followed by a graphical
representation of the first year of cash flows.
(Table 12)
Cash Flow Table
Cash Received
Year 1
Year 2
Year 3
Year 4
Year 5
Cash from Operations
Cash Sales
$477,780
$573,336
$745,337
$968,938
$1,259,629
Total Cash Received
$477,780
$573,336
$745,337
$968,938
$1,259,629
Expenditures
Year 1
Year 2
Year 3
Year 4
Year 5
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal spent on Operations
$124,176
$346,686
$470,862
$147,979
$382,199
$530,178
$183,244
$475,675
$658,919
$228,380
$595,342
$823,722
$ 286,286
$ 749,758
$1,036,044
Additional Cash Spent
Purchase Long-Term Assets
Subtotal Cash Spent
$ 17,904
$488,766
$
$530,178
$
$658,919
$
$823,722
$
$1,036,044
Net Cash Flow
Cash Balance
$ (10,987)
$ (10,987)
$ 43,158
$ 32,171
$ 86,418
$118,589
$145,215
$263,804
$ 223,575
$ 487,380
Page 19
The following table is a comparison of The Perfect Fit’s financial projections to the industry. Woman’s
clothing retail industry was used in this table.
(Table 13)
Ratio Analysis
Year 1
0.00
Year 2
20.00
Year 3
30.00
Year 4
30.00
Year 5
30.00
Industry Profile
7.94
Percent of Total Assets
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
57.87
0.00
(9.06)
109.06
100.00
18.54
0.00
70.88
29.12
100.00
9.79
0.00
88.17
11.83
100.00
6.40
0.00
94.05
5.95
100.00
4.72
0.00
96.62
3.38
100.00
36.71
27.00
91.68
8.32
100.00
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
157.48
0.00
157.48
(57.48)
51.91
0.00
51.91
48.09
26.26
0.00
26.26
73.74
16.53
0.00
16.53
83.47
11.82
0.00
11.82
88.18
41.18
14.98
56.16
43.84
Percent of Sales
Sales
Gross Margin
Selling, Gen. and Admin. Expenses
Advertising Expenses
Profit Before Interest and Taxes
100.00
50.00
51.98
0.53
(1.98)
100.00
50.00
43.20
0.44
6.80
100.00
50.00
39.00
0.39
11.00
100.00
50.00
35.59
0.34
14.41
100.00
50.00
32.82
0.30
17.18
100.00
21.23
11.14
0.65
2.01
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
(0.06)
(0.42)
157.48
100.00
(57.48)
1.37
1.01
51.91
131.92
63.44
3.36
2.98
26.26
73.50
54.20
5.69
5.30
16.53
55.59
46.40
8.17
7.77
11.82
46.28
40.81
2.06
0.95
62.21
15.31
5.79
Additional Ratios
Net Profit Margin
Return on Equity
(1.98)
0.00
6.80
131.92
11.00
73.50
14.41
55.59
17.18
46.28
n.a.
n.a.
Activity Ratios
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
24.00
14.41
27.00
29.10
27.43
12.17
27.00
9.33
28.43
12.17
27.00
4.93
28.43
12.17
27.00
3.22
28.43
12.17
27.00
2.38
n.a.
n.a.
n.a.
n.a.
0.00
1.00
1.08
1.00
0.36
1.00
0.20
1.00
0.13
1.00
n.a.
n.a.
Sales Growth
Debt Ratios
Debt to Net Worth
Current Liab. To Liab.
Page 20
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
($27,340)
0.00
$11,660
0.00
$93,669
0.00
$233,315
0.00
$449,739
0.00
n.a.
n.a.
0.03
157%
(0.42)
0.00
0.00
0.11
52%
1.01
19.39
0.00
0.2
26%
2.98
6.68
0.00
0.31
17%
5.30
3.86
0.00
0.42
12%
7.77
2.69
0.00
n.a.
n.a.
n.a.
n.a.
n.a.
Page 21
Appendix
A.1 Manufacturing Design
Page 22
A.2 Marketing Research Survey
I.
Marketing Research Survey
This survey is being conducted by Rowan students for a market research project. Our purpose is to determine if
there is a market for a retail store specializing in extended-size lingerie, and to analyze the various characteristics of
this market to determine consumer preferences, buying habits, and the shortcomings of the current market. All
information submitted will be used for research purposes only and will be kept confidential.
1) Where do you usually purchase bras/lingerie? (Please list)
_____________________________________________________________________________________
2) How much do you typically spend on a single lingerie item?
 None
 <$25
 $25-$40
 $40-$50
 $50-$60
 $60-$70
 $70-$80
 >$80
3) How much would you be willing to spend on a single lingerie item if it was of higher quality than your current
lingerie?
 None
 <$25
 $25-$40
 $40-$50
 $50-$60
 $60-$70
 $70-$80
 >$80
4) Rank the following bra characteristics in order of importance (1 being least important):
____ Good fit
____ Stylish
____ Comfortable
____ Doesn’t show under clothes
____ Good quality
____ Low price
Page 23
5) How often do you enjoy bra shopping?
 Always
 Often
 Sometimes
 Never
6) What makes bra shopping a good experience? (Rank with 1 being least important)
____ Bra fittings offered
____ Wide selection of merchandise
____ Organization of merchandise
____ Comfortable fitting rooms (lighting, etc)
____ Affordable prices
7) What is the size of your most comfortable bra? _______________
8) When wearing your most comfortable bra, does the band on your back look closer to the first or second
image?(Circle one)
9) Have you ever been professionally fitted for a bra?
 Yes
 No
If so, where?____________________________________________
10) Name brand of your favorite bra _______________________
-and what makes it so great?
11) What don’t you like about the bras you currently own?
______________________________________________________________________________
12) In general, what frustrates you about the bras currently available in stores? (Check all that apply, or leave blank
if none apply)
 Don’t carry enough sizes
 Selection is too small
 Uncomfortable
 Too expensive
 Not stylish enough
 Other (please specify):
Page 24
13) Age:_____ years
14) What is your marital status?
 Single
 Married
 Separated
 Divorced
 Widowed
15) What is your highest level of education that you have completed?
 Less than high school
 High School/GED
 Some college
 2-year college degree (associate’s)
 4-year college degree (BA, BS)
 Master’s Degree
 Doctoral Degree
 Professional Degree (MD, JD)
16) Are you currently employed?
 Yes (Full time)
 Yes (Part time)
 No
Thank you for your participation!
Page 25
A.3 Monthly Seasonalized Sales Forecast
Year 1
Year 2
Year 3
Year 4
Year 5
43,680
52,416
68,141
88,583
115,158
45,500
54,600
70,980
92,274
119,956
46,000
55,200
71,760
93,288
121,274
44,000
52,800
68,640
89,232
116,002
33,600
40,320
52,416
68,141
88,583
35,000
42,000
54,600
70,980
92,274
47,000
56,400
73,320
95,316
123,911
37,000
44,400
57,720
75,036
97,547
40,000
48,000
62,400
81,120
105,456
34,000
40,800
53,040
68,952
89,638
34,000
40,800
53,040
68,952
89,638
38,000
45,600
59,280
77,064
100,183
$ 477,780
$ 573,336
$ 745,337
$ 968,938
$ 1,259,619
June
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
April
May
Total
140,000
120,000
100,000
Sales ($)
Year 1
80,000
Year 2
Year 3
Year 4
60,000
Year 5
40,000
20,000
June July Aug Sept Oct Nov Dec Jan Feb Mar April May
Page 26
Works Cited
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