Executive Summary
Nas-T-Shirts will be the talk of the town! This new t-shirt line will enable people to wear their attitude, cause, idea or general informative messages on their shirt! Nas-T-Shirts will allow verbal artists to treat an ordinary shirt as his canvas, spewing statements, brought to life using cutting edge shirt-print technology, making your thoughts an everyday, accessible fashion accessory!
Nas-T-Shirts is headed by (your name) and its office is located at (your address). Nas-T-Shirts will be sold through a very user friendly website and through select retail stores. Nas-T-Shirts, will offer customers many options for designing their statement shirts, apart from a standard crop of shirts that are available in a variety of colors and sizes. An album of standard designs is ready for review on the website while samples shall be proudly displayed in eachc retail store.
Nas-T-Shirts will be printed using cutting edge printers and the t-shirt canvasses shall be pre-ordered from high quality suppliers. The print-outs will be done with high quality ink, resulting in very professional looking and long-lasting print-outs.
Nas-T-Shirts will have competitive advantages in its market position and t-shirt print quality. The business will position itself as the t-shirt provider of choice for young adults aged 12 to 26. These customers are in school or are starting their professional careers, listening to new music, have radical urban ideas, and are highly vocal about their current statuses. These shirts will act as an extension of their psyche and will provide them with creative outlets to share their thoughts in a real-life setting unlike social media sites that work only online. And with the shirt quality being the finest, it will be no problem showing customers what value the shirts offer.
Industry Information
T shirts are universal products. They transcend age, gender, social status, religion, educational attainment, functions and other stratifications. Walk around and you will notice at least one person wearing a t-shirt.
The T-shirt market can be segmented into two group types, the first being pre-fabricated t-shirts and the second being customized t-shirts. Customized t-shirts are gaining popularity because of their originality (the concept is bourn from the customer’s mind), their specialized reach (they are favored by market segments that are not served by pre-fabricated designs), and by the fast turn-up and variety of designs.
Nas-T-Shirts will cater to those customers that want high quality, individualized shirts. The target age market is from 12 to 16, primarily those in schools, and has outward expressions that they would like to share with their friends, classmates and communities. Nas-T-Shirts will be desired by this market because of the high quality print and the ability of the customer to create statement designs that can be placed in any part of the t-shirt. Customers will be given templates to choose from or if they have a design in mind, will be given options on how to create and finalize their designs. With these design features, Nas-T-Shirts will make speaking cause, an idea or a general message an everyday fashion accessory.
The total target market for t-shirts is shown below. Nas-T-Shirts is categorized under “own-design” since even the pre-printed shirts are categorically designed. This segment of the market however is growing at a 10% pace annually and with an estimated customer pool of 5 million, the potential patrons of the business are huge.
Potential Customers
Nas-T-Shirts will compete with printers that operate on a small scale basis using the same type of technology that Nas-T-Shirts will employ. Nas-T-Shirts will have great advantage in its design and order process which will be very simple through its easily-navigatable website. This will be the product differentiating edge of the enterprise. It’s website will be presented to the customer, designed by the customer, and delivered to the customer in a very friendly and pleasant manner.
Customer loyalty will be the main barrier to entry to Nas-T-Shirt’s market. By cultivating targer clients, a competitor will have to offer at significantly lower prices than Nas-T-Shirts to eat up market share.
Nas-T-Shirts will sell 125,000 units on year one and will grow its sales by 3% through advertising. Price of the shirts will start at $3 per unit and will increase by 1% per year. The gross margin of the enterprise will start at 23% on year 1.
Table 2 Nas-T-Shirt Revenue and Expense Projections
Total Direct Expenses
These projections are very conservative. To increase revenue, the number of units sold must be increased by a larger degree every year or the price per unit to be increased as well. However, because of the volume of the potential market, the strategy will be to push for an expansion of market share. The non-pricing strategy to take to ensure that revenues increases include advertising, tying up with a large print company for branding, tying up with graphics companies for synergy, and targeting specific clients to word-of-mouth marketing. For pricing, the strategies that could be undertaken could include a lower rate of increase for prices or volume discounts for large orders.
The profit maximizing quantity shall be the point where the Total Revenue = Total Cost. The profit maximizing unit will be about 140 thousand units. If the price per unit of shirts does not increase dramatically, the total cost will over run the revenues. This is shown graphically below.
Costs could be minimized as well to increase enterprise Gross Margin. One way of reducing cost is by keeping the cost of general and administrative expenses stable over the operating periods. In this way, only the direct material and print costs increase as a function of time, but the over head remains the same.
Figure 1 Profit Maximization Chart
Translated using the concepts of marginal cost and marginal revenue, the maximum profit position of Nas-T-Shirts shall be the point where change in Marginal Revenue equal to the Marginal Cost. Unfortunately we only have a limited data set here to calculate where that point is using this concept.
This business plan shows that the business of customized t-shirts is a profitable undertaking given the size of the market, the product offering, the marketing strategy to be undertaken and the price of the product that will be attractive to its customers.
Prentice-Manela, S. (2011). New Business Ideas. Retrieved from http://articles.bplans.com/starting-a-business/new-business-ideas/305
Wikipedia. Profit Maximixation. Retrieved from http://en.wikipedia.org/wiki/Profit_maximization
