Emmanuel Adewole
$20/hr
I help entrepreneurs and businesses raise funds.
- Reply rate:
- -
- Availability:
- Full-time (40 hrs/wk)
- Age:
- 29 years old
- Location:
- Lagos, Lagos, Nigeria
- Experience:
- 5 years
BUSINESS PLAN
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................... 5
Service offering ....................................................................................................................... 5
Pricing ....................................................................................................................................... 6
The Market ............................................................................................................................... 6
Positioning ............................................................................................................................... 6
Suppliers and Partners ..........................................................................................................7
Financials ..................................................................................................................................7
Keys to Success........................................................................................................................ 8
COMPANY SUMMARY .............................................................................................................10
Mission Statement.................................................................................................................10
Vision Statement ...................................................................................................................10
Core Philosophies..................................................................................................................10
Objectives ................................................................................................................................ 11
Milestones ............................................................................................................................... 11
Expansion Summary ............................................................................................................ 11
Company Formation ............................................................................................................. 12
Company Locations............................................................................................................... 13
Company Web Address ........................................................................................................ 13
PRODUCT AND SERVICES ..................................................................................................... 14
Services .................................................................................................................................... 14
Major Product Brands .......................................................................................................... 14
Product Sourcing ................................................................................................................... 15
MARKET ANALYSIS ................................................................................................................. 16
Industry overview ................................................................................................................. 16
Industry key success factors ............................................................................................... 16
Industry Growth and trends ............................................................................................... 17
Technological trends ............................................................................................................18
Government regulations ......................................................................................................18
PEST Analysis .........................................................................................................................18
Industry life cycle ................................................................................................................. 20
Industry Product Trends ..................................................................................................... 21
Competition and Buying Patterns ..................................................................................... 21
Target market ........................................................................................................................ 22
Target Consumer Needs...................................................................................................... 23
Market Pricing Pattern ....................................................................................................... 23
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Market E-commerce Trends .............................................................................................. 23
Market Competitors ............................................................................................................. 24
STRATEGY AND IMPLEMENTATION ................................................................................ 25
Marketing Plan Highlight ................................................................................................... 25
Our Marketing Funnel......................................................................................................... 26
Online Marketing channels ................................................................................................ 27
Competitive Advantage ....................................................................................................... 28
Strong Supplier Relationship ............................................................................................ 28
Promotion Strategy .............................................................................................................. 28
Current Advertising and promotion ................................................................................ 29
Pricing Strategy..................................................................................................................... 30
Sales Forecast ........................................................................................................................ 30
Competitors pricing .............................................................................................................. 31
Customer service policy and warranties ......................................................................... 31
Unique Selling Proposition ................................................................................................. 31
Our Marketing Mix ............................................................................................................... 32
Customer Data collection, persona and SEO optimization ....................................... 33
HUMAN RESOURCE ............................................................................................................... 34
Simplified HRM Target ............................................................................................................. 34
Team Leader .......................................................................................................................... 34
The team and organizational structure .......................................................................... 35
Key people Description ....................................................................................................... 35
Personnel Plan ...................................................................................................................... 36
OPERATIONS ............................................................................................................................ 37
Legal Issues ............................................................................................................................ 37
Insurance Issues ................................................................................................................... 37
Risk assessment and contingency plan ........................................................................... 37
Damages to Items. ................................................................................................................ 38
Inventory Policy.................................................................................................................... 38
Membership Cancellations. ............................................................................................... 38
Operations Location ............................................................................................................ 38
Business’ Equipment ........................................................................................................... 38
Service Flow chart ................................................................................................................ 39
Key Supplier Operational Relationship .......................................................................... 39
Scheduling (Miles stones, activities and deliverables) ............................................... 39
Milestones .............................................................................................................................. 40
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Technology requirements and investment needs ........................................................ 40
Other investment targets are: ............................................................................................ 41
New showroom in a shopping center Implementation Timeline ............................. 42
FINANCIAL PLAN .................................................................................................................... 43
Important Assumptions ...................................................................................................... 43
Financial Outline .................................................................................................................. 43
Expansion costs .................................................................................................................... 43
Sales Forecast ........................................................................................................................ 44
Payroll Plan ............................................................................................................................ 44
Projected Expenses .............................................................................................................. 45
Cash Flow Statement ........................................................................................................... 45
Profit and Loss Statement .................................................................................................. 46
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EXECUTIVE SUMMARY
Beyond the Runway Inc. is a Canadian online fashion rental platform that provides its
subscribers the opportunity to rent exclusive, high-end clothing and accessories from
their vast inventory and use for special occasions, meetings and evenings. We are
Canada's premier platform for renting luxurious and designer dresses, purses, and
accessories.
Beyond the Runway Inc. is the premier platform in Canada where Luxury and pocketfriendliness meets. We provide top designer brands suite for diverse occasions for women,
such as cocktail parties, weddings, proms, receptions, galas, birthday parties, interviews,
business meetings, and for everyday work.
There is currently a convenience and affordability gap in the recent dynamic women
fashion industry in Canada and worldwide. Our main goal is to close a social and market
gap by allowing all potential customers to access luxury garments and accessories without
mortgaging or borrowing. Therefore, the main market that BTR is focusing on is women
with an interest in Fashion who have active social lives and are budget sensitive.
We address the problems of women who gets stressed about what to wear to an important
event or celebration, and how to get what to wear. Beyond the Runway also addresses
women who values time, convenience, and are budget sensitive. We give any fashion-lover
access to the best piece of fashion wears in Canada for women’s social and official
gatherings in a highly-subsidized package. We offer a subscription-based service.
Customers only need to choose a monthly plan, subscribe, and browse through many
options.
Service offering
We offer our customers discounted high-quality Fashion and accessories for rent. We
communicate our customer-centered nature through our pricing system and customer
support service. We strive to offer a high-quality service in terms of responsiveness on all
the communication channels: online, via our website, and throughout social media, by
phone, and in-person for customers who visit our showroom.
We offer Basic, Silver, and Gold membership plans, which affords subscribers diverse
access levels to our services. Silver and Gold plans offer more variety and choices to
customers allowing the swap of rented items. We deal in top fashion brands like Anna Sui,
Nicole Miller, Tadashi Shoji, Ted Baker, Louis Vuitton, Fendi, Gucci, Karl Lagerfeld,
Prada, Ralph Lauren, Burberry, and many others.
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Pricing
Beyond the Runway platform offers several membership plans: A one-time trial gives the
customer a possibility to try out the service and the clothing items. This option is limited
to a 5- or 10-days rental period depending on the option the client chooses to go with.
Silver Membership subscription at 99$/month gives the subscriber full access to clothing
and accessories, allowing them to order four items per month.
Gold Membership subscription plan at 149$/month gives the subscriber full access to
clothing, accessories, and an unlimited amount of orders per month, each containing four
items. The company also allows its subscribers to purchase any item they wish at a
discounted price. The shipping is free. Customers pay just for the rental.
The Market
Beyond the Runway is in the market to meet new and undetermined demand in the
Canadian market. The data from the NAICS shows that this market is currently growing
(1.4% yearly increase). Although profits are rising, there has been a decline in the number
of marketable businesses because of the initial buying costs associated with this field. This
market is forecasted to produce $4.4B in revenue by 2028. This forecast is supported by
the PEST analysis and product life cycle analysis. These analysis are better explained in
the Market analysis and summary of this business plan.
This market is pulverized and highly competitive, with low margins and low entry/exit
barriers. There is a large number of operators, and the suppliers are known to wield great
power. The presence of competitors suggests the existence of such a market but does not
signal an easy start for BTR. A strong marketing strategy, paired with a smart marketing
plan, will be needed to create awareness and earn new customers.
Positioning
Beyond the Runway strives to position itself as the premier women fashion rental
platform in Canada combining luxury, high-quality, and class with affordability. We
operate based on a differentiated position from major competitors. We propose luxurious
items and high-class fashion, such as Louis Vuitton, Gucci, and Michael Kors, at lower
subscription prices compared to any surrounding competition.
We ensure our platform and company are perceived as places for high-class fashion with
maximum convenience and customer service. Our subscription revenue model helps
ensure that we generate a larger customer database. Due to the demand aggregation for
luxurious Fashion, and our platform positioning, we can generate a large customer base
with our first-mover advantage.
This positioning will help multiply customer acceptance, increase customer base, and
generate more revenue for all parties involved. Our company is customer-centered, trying
to charge less in comparison to our major competitions. This places a larger customer
base over early profits, which in turn leads to higher revenue generation. A recent study
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shows that companies with this differentiation strategy of larger databases generate
higher revenue, which turns to a higher net profit margin in the long run.
Suppliers and Partners
Beyond the Runway holds garments from many designers with whom we are building
strong business relationships. The company purchases garments from its suppliers at
wholesale prices if ordered in larger quantities. At present, the suppliers require 50%
down payment on the order and 50% upon arrival of the order to the facility. The business
also offers handbags from luxury brands such as Louis Vuitton and Gucci; however, these
items are bought at full price from the retail stores.
As long as shipping and logistics is concerned, Beyond the Runway has established a very
good relationship with a shipping agency. Beyond the Runway ships mostly through
Purolator (with 70% off the regular shipping rate) and get the package to clients within 13 business days in most major cities in Canada. Beyond the Runway also ships through
Canada Post with 20% off the regular rate.
A list of our current suppliers and partners is attached to the appendix for due
consideration.
Financials
Beyond the Runway financial projections are conservative yet very bright. We will begin
operation with our web platform, sign up customers, gain momentum to generate
appreciable sales, and consciously build a good customer base with a robust marketing
scheme to help launch our mobile platforms. Our mobile platforms will help give us a
solid financial footing, as it helps us in generating a vast customer base at a relatively low
operating cost, which is a pointer to positive business growth.
The mobile platforms will help us market better and directly in Canada, helping us reach
our customers faster and at a cheaper rate. Our total revenue for year one is strategically
and cautiously projected to be $63,450, growing to $142,276 in the second year, and
$221,156 in the third year. And $300,092 in the fourth year, and finally climbing to
$379,087 in the fifth year.
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Revenue-
year 1
Year 2
Year 3
Year 4
Year 5
Revenue
Keys to Success
Over the years, business successes are associated with more than just financial figures,
but some other key business decisions capable of driving business growth. We will make
sure we ensure an outstanding financial status above the normal industry standards. The
following are the basic key to our business success:
Building repeats business with every user by establishing a unique standard
for high-class fashion and quality service.
Proximity with customers and subscribers. We will be close to our
customers and subscribers by offering 24/7 customer support and guide service to
help them anytime.
Hiring and retaining top-notch staff and fashion guides through a
competitive wage structure, employee development, and work-life balance
programs.
Influencing and ensuring a user-friendly digital platform that is
customer-centered and easy to navigate for anyone.
Developing successful relationships with suppliers, delivery companies, and other
partners.
Inspiring customer retention through constant innovations and application of
customer feedback.
Innovative customer-centered marketing and promotional programs.
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COMPANY SUMMARY
Beyond the Runway Inc. is a Canadian online fashion rental platform that provides its
subscribers the opportunity to rent exclusive, high-end clothing and accessories from
their vast inventory and use for one's special occasions, meetings and evenings. Beyond
the Runway Inc. is the premier platform in Canada where Luxury and pocket-friendliness
meets. We are Canada's number 1 platform for renting luxury and designer dresses,
purses, and accessories for cocktail parties, weddings, proms, receptions, galas, birthday
parties, interviews, business meetings, and everyday work.
Beyond the Runway started from mid of 2019. After almost a year of working on building
the website, completing the team, doing research, and acquiring the goods, we finally
launched our website in October 2019. The company's main office is located in Montreal
and is continuously working on acquiring customers in the province of Quebec and
nationally. The future of the prospective business also holds the opportunity to branch out
into men's and kids' fashion.
Mission Statement
Beyond the Runway provides rental of high-end clothing for all occasions, focusing on
customer needs caring about sustainability and community values.
Vision Statement
Offering Canadian women excellent high-class clothing rental service along with
unparalleled customer service.
Core Philosophies
Innovation: We promote innovation — integrating high-end e-commerce features
and capabilities to offer the best-personalized service and the most rewarding
shopping experience. We always incorporate consumer feedback and input into our
policies and strategies.
High-quality Service: We strive to offer a high-quality service in terms of
responsiveness on all the communication channels: online via our website and
throughout social media, by phone, and in-person for customers who visit our
showroom.
Sustainability: Sharing clothes means less waste of clothes. Periodically, Beyond
the Runway, organize sample sales or donate to charities.
Speed: We understand that the business of the 21st century is speed-based, and
we will function accordingly.
Customer Satisfaction: We are in business primarily for our customers'
satisfaction. This is further propagated with our platform's friendliness and service
gratitude.
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Objectives
To Greatly Increase revenues over the next five years
To be the leader in the Canadian market in dress and purse rental business
To create a new lifestyle for Canadian women who love Fashion and dressing up
To gain 200 Silver or Gold subscribers in the next three years
To have the mobile applications ready for our clients and visitors in 1-2 years
To become profitable and self-sustaining by the end of third year.
To gain national recognition and market dominance in ten years of business
operations.
Milestones
Our current milestones take into account the current uncertainty due to the Covid-19
pandemic and the conditions of a normal situation.
Priorities: To attract at least 50 new subscribers to silver and gold plans in the next
year – until next summer. As soon as the pandemic impediments are lifted, we plan
to reach for at least hundred subscribers a year, with a 90% retention rate. This
rates will ensure our financial success in few years.
Continued improvement of the online renting system, to make it more mobile and
user friendly. Time frame: long term and continued work, non-stop working on
this even during this pandemic
Hire skilled and motivated staff. Time frame: continued work
Develop strategic alliances with influencers, websites, and businesses working in
the field of Fashion. Time frame: continued work
Finding more competitive sources of supply and negotiating better terms wherever
possible. Time frame: continuing adding more new designer brands and
increase inventory gradually
Expansion Summary
Beyond the Runway is currently seeking early-stage funding and strategic financial
partnerships to aid the execution of company’s objectives. The plan is to raise a sum of
CAD 1 million to help finance our goals and prepare us for future profitability.
Based on conservative financial projections, the company will break even and be
profitable from the third year. Our sourcing and pricing strategy will help generate
substantial net income and nearly eliminate the downside risks.
Highlighted below is a summary of our expansion needs:
Expansion Cost
EXPENSES
Advertising
[CAD]
80,000
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Commissions
Insurance
Interest Expense
Miscellaneous
Guest Entertainment
Office expenses
Postage and Delivery
Professional Fees
Rent
Repairs and Maintenance
Store Supplies
Telephone
Travel Expenses
Legal Fees
Taxes
Credit Cards
Account Payable
Payroll Expenses
TOTAL EXPENSES
ASSETS
Computer & Equipment
Furniture
Software
Security deposit
Cash equivalent
Inventory
TOTAL ASSETS
TOTAL EXPANSION COST
45,000
8,-,-,000
80,000
30,000
59,000
2,000
2,000
4,300
7,500
2,000
5,700
18,400
75,000
100,000
569,700
6,000
15,000
55,500
15,000
130,500
213,300
430,300
1,000,000
Company Formation
The company was started by Lucy Zhao, the head entrepreneur, who has an extensive HR
background and worked in the manufacturing industry for ten years. She has also built
her own manufacturing company in China but was not feeling accomplished despite her
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business success. Her strong need to work in Fashion coupled with her desire to work
with the luxurious brand, was the seed that started the idea.
Alongside Mrs. Zhao is a fulltime employee, Emilie Hemmings coming from JMSB and
with a strong background in Fashion and retail. She works as a stylist with Zhao and
oversees the management of the office. Finally, to complete the management team, Ms.
Zhao recently recruited a marketing specialist: Daniel Zimmermann, who will help the
company reach more potential customers.
Company Locations
The company's main office is located in Montreal, a strategic location that drives
awareness, sales, timely deliveries, and market understanding in Canada. This location is
perfect for our business as it is filled with potential customers and delivery service
companies. We might set up another operational base or store as we grow to dominate the
market, to aid business growth and smooth operations.
Company Web Address
www.beyondtherunway.ca
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PRODUCT AND SERVICES
Services
Beyond the Runway is a Canadian online subscription fashion rental service, known for a
large variety of styles updated regularly. We offer flexible budget-friendly plans, which are
made to fit the needs of a broad category of customers.
These plans can be switched at any time. We offer Basic, Silver, and Gold membership
plans, which affords subscribers diverse access levels to our services. Silver and Gold
plans offer more variety and choices to customers allowing the swap of rented items.
A one-time basic rental service gives the customer the possibility to try out the service and
the clothing items. This option is limited to a 5- or 10-days rental period depending on the
option the client chooses to go with.
Silver Membership subscription at 99$/month allows rent of up to 4 items at once and
includes only one swap per month for another four items. In total, the customer has
access to 8 items during the month. Silver subscribers do not have access to our luxury
items. The luxury items are all items with a retail value over $1000 and also the clothing
of designer brand Anna Sui.
Gold Membership subscription plan at 149$/month gives the subscriber access to rent up
to 4 items at once and includes unlimited swap throughout the month. This package also
gives access to 2 luxury items per month.
BTR also allows its subscribers to purchase any item they wish at a discounted price.
Major Product Brands
Anna Sui,
Nicole Miller,
Tadashi Shoji,
Ted Baker,
Louis Vuitton,
Fendi,
Gucci,
Karl Lagerfeld,
Prada,
Ralph Lauren,
Burberry,
Calvin Klein,
Caylar,
Coach and many others.
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Product Sourcing
Proper product sourcing is a critical element of Beyond the Runway's business success.
The quality, quantity, and prices of products sourced for operation are key in determining
the overall performance of BTR. As a conservative and learning company, we will take the
following into account when sourcing our products:
Product Quality: We are a company that thrives on offering quality over
quantity, as this is our basic business model. We will only offer brands that are
widely known for high quality and luxury. This will be followed up with a standard
test for all our sourced products.
The quantity that can be purchased at once: The amount of quality products
that can be bought at once matters to its success. We don't want to incur recurring
expenses on product stocking if we can buy in bulk.
Reliability of Source: We will only work with brands and suppliers with years of
experience in the industry. We will partner with companies with credible online
and physical national reputation. We will only work with a supplier that guarantees
product returns.
Product Prices: As much as we place a strong emphasis on quality, we are also
concerned about the price. We don't want to buy at ridiculously exorbitant prices to
ensure profit from operations, and to aid easy marketing and pricing system.
Delivery Timeframe: We will ensure we keep working with delivery companies
that guarantee a short delivery timeframe. This strategy is to keep our customers
and subscribers satisfied while preventing them from trying out competitors.
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MARKET ANALYSIS
Industry overview
Rental wear through online platforms recently had become accessible to consumers. This
new market creates opportunities for entrepreneurs in the online clothing rental market.
Some businesses choose to have a subscription-based revenue model. The target
customers are young adults to the elderly aged from 20-64 years old, accounting for 80%
of the industry revenue (Ibisworld, 2019). Since this is a relatively new industry, there is a
huge market potential with only a few major existing players, such as; Rent Frock Repeat,
Atelier Privé, and La Petite Robe Noire.
Now is the perfect time for this market because of the increase in social media platform,
famous social media influencers can rent clothes to attract attention to their page. The
new type of online business market transaction, which differs greatly from the traditional
physical store, allows for new business opportunities.
An online business can lower the cost of the supply chain by cutting the distribution
centers or the middleman, but it can also help in cutting the cost of renting an actual
physical store. The online business model reduces the amount spent on physical stores
around the country, and huge amount of store workers
The trend of shopping online shows great success, as Amazon demonstrates, which is
successfully profiting through this new type of online business. To maintain customer
loyalty and sustain their model, loyalty program options such as free shipping, lower price
for members (a strategy used by Amazon), or a monthly subscription are often used. We
will employ the Amazon strategy, which works based on large customer base over time,
rather than early profits that kills businesses through reduction of customers.
The internet is also home to social media. With social media platforms, everyone is
consistently exposed to influencers or group leaders wearing luxury brands, clothing, and
accessory items. This subconsciously or consciously makes users want to spend their
income by purchasing brand name products, but these high-end brands can be costly,
which is why the idea of recycling/borrowing clothing and accessories recently is
becoming popular.
Industry key success factors
There are a few key factors that can be identified to help increase the chance of success in
this new venture industry.
The consistency of high-quality customer service is a crucial dimension
that involves advising before purchase and support after purchase.
User experience is also crucial to maximize the chances of the consumer liking
the website and being convinced of paying for the services. This can range from the
visual pleasing of the website, user, and mobile-friendliness of the website and
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mobile applications, high-quality pictures representative of the inventories, and
regular updates of new trends and collections.
Large inventories range in sizes, colors, brands, designers, and a variety of
occasions wears to accommodate different clientele.
Ensure a fast and safe shipment of inventory to customers with the perfect
quality, such as shown on the website.
Proper supply chain, where online retailers can keep track of stock and
maintain inventory at demand levels. Influencing consumer behavior by being able
to grow market share and convince consumers that buying online is better than
shopping at brick and mortar stores.
Provision of greater product policies and efficient shipping, such as
shipment tracking, and easy to return shipping, which helps bolster the industry
into a new era.
Creating a brand or service loyalty ensures that there will always be repeat
customers, and the ability to adapt to changes in technology such as artificial
intelligence and augmented reality.
Industry Growth and trends
The Canadian Online Fashion industry has been posting large revenue gains and growth
within the past five years. The IBISWorld industry report found that the average growth
between 2014 and 2019 was 12.8%, while annual growth within 2019 to 2023 is expected
to "boom" at an estimated 7.8%. Many factors contribute to this growth, such as an
annual increase in disposable income of 2.7% over the next five years, an increase in
online security, accessibility, and consumer preferences.
With more disposable income, users are willing to spend more on cheaper priced items.
Credit card companies such as Visa and MasterCard have also reduced their processing
fees down from 1.5% to 1.4%. This initiative puts more money into the company’s coffers
and allows more brand recognition as more and more online stores join up with these
credit card companies.
The industry life cycle is expected to have an annualized growth rate of 10.7%, and with
Canada's GDP rising 1.7% in the same period, this allows lower barriers to entry,
increased access to high-speed internet, and increased growth in mobile devices making
the Canadian Online Fashion Industry's future a bright one.
On a global scale, e-commerce sales amounted to $2.8 trillion, and with projections to be
$4.8 trillion by 2021, the growth of e-commerce is not going to stop (Clement, J. 2019).
Just last year alone, fashion e-commerce revenue totaled $481.2 billion, and by 2022, it is
expected to grow to $712.9 billion. That is a 48.15% growth increase in just three years.
The major factors contributing to these growth are increasing online access with
smartphones and the emergence of a strong middle class, which has contributed to the
rise in fashion sales.
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Technological trends
The e-commerce industry is a fast-changing sector. Businesses must adapt fast to new
technologies, fierce competition, and increased expectations from customers who are
responsive to proactive service, personalized interactions, and connected experiences
across channels.
The most important trends leading the way are:
The continuous development of mobile shopping via apps/smart devices.
The growth of mobile payment technologies.
The increasing popularity of the subscription services.
Product Customization & Personalized Recommendations.
Product Visualization, Augmented Reality, and Virtual Reality
Government regulations
Taxation system are becoming flexible to adapt with for businesses, which we will highly
leverage on nationally. The laws have become stricter, and more transparent, which
affords us the opportunity to be on the good side of the government.
We are also committed to complying with trademarks, patents, and copyrights applying to
the intellectual property. With some clients/suppliers outside of Canada, we look to
international regulations on the storage and protection of our customer data.
PEST Analysis
Through the market analysis using PEST (political, Economic, Social and Technology) we
can establish why this niche market is very attractive;
Political
The Canadian government supports small start-up businesses by offering services and
information to these start-ups, government financing programs, loans, and capital
investments, wage subsidies, grants contributions, and financial assistance, tax credits,
managing your finances, and funding for super-clusters (Business Grants and Financing,
2019).
Economic
Within the past few decades, the economy has constantly been changing due to recession,
especially after the financial crisis of 2008, which caused the unemployment rate to spike
up from 6.1% - 8.3%. Since then, Canada is slowly recovering, and recently the
unemployment rate as of 2018 is 5.8%, as shown in the graph below (Statista, 2019).
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The clothing industry, in the meantime, remains one of the few fastest growing industries.
In 2017 it was ranked the seventh-largest industry in the world. Also, the option for
renting is economically viable, hence eliminating some of the key factors affecting the
opportunity gap in this market sector. The opportunity gap is the unequal ability to
acquire high-end luxury wear within the upper to middle and to the lower classes within
society.
Social
Presently we are in the era of consumerism; everyday, products are being massmanufactured and shipped worldwide. Towards the end of this era, consumers are
becoming more aware of climate change and are trying to do small daily things to help
reduce the pollution emitted. With the awareness about environmental issues linked to
the consumption of mass-produced goods, some consumers choose to shop second hand
or opt-out to rent for special occasion outfits.
Today’s businesses are highly affected by the massive influence of the social media. The
social media is growing fast, and affecting most businesses, especially fashion. The
fashion business in Canada is fast changing and dynamic, with more people perceiving
fashion as an “in-today, out-tomorrow” commodity. This is a great opportunity for the
fashion rental business.
Technology
The advancement of technology promotes the new trend of faster and easier way shopping
via online retailers. The valuation of online retail players is significantly higher than
traditional retail, as shown below (The State of Fashion, 2019, p.79). The 2017 average
market capitalization to EBITDA multiples shows a comparison of 20 vs. 11.1 ratio of the
financial ratio.
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Entrepreneurs use this tool to their advantage to customize their business model by
catering to their target buyers' needs/wants. For example, there has been a drop in
traditional store purchases from 70%-28% within the last thirty years (the state of
Fashion, 2019, p.43).
The internet allows for worldwide online transactions. Fast flow of information along the
supply chain from supplier to buyer lets businesses respond to the change in demand, and
coordinate logistics accordingly. Overall, technology is an important tool to help
businesses obtain their share of the market profit.
Industry life cycle
The clothing industry life cycle is unique; usually, industries have five stages; however,
with online rental wear, there is only a four-stage life cycle; introduction, growth,
maturity, and decline stages. These stages also help provide information to reduce costs
and improve decision making, such as promotions and markdowns at the right time.
Introduction
This is when the website advertises and makes the garments available on their website.
The marketing team is working via different sources such as through social media or by
using celebrity endorsement to advertise their product.
Growth
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At this stage, the company must make sure to be fully stocked on trendy garments due to
the short-lived growing demand. The team must act fast not to miss their opportunity;
otherwise, they would not recover the cost when a new trend becomes popular.
Maturity
Items must be fully stocked and still generate revenue. The trend is stabilizing and is
reaching its peak. Customers are familiar and used to the trend; therefore, less and less of
them are purchasing the product.
Decline
The trend has now saturated e-trailers and retail stores. Profits are declining as the new
trend enters the market. To sell the rest of the stock, the company may lower its pricing or
return the products to the suppliers.
Industry Product Trends
Tops
Bottoms
Dresses
Outerwear
Footwear
Suits
Accessories
Other items
Competition and Buying Patterns
High Quality is of the essence: The quality, brand popularity and acceptance,
and durability of the dresses, purses, and accessories are vital to success in the
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industry. We ensure we deal with top fashion brands who are not only known for
luxury but also of high quality. This will help us keep our customers and boost our
service rating.
Easy usability is critical to sales success: Customers don't want to hire a
tutor for them to be able to use the platform. The easier the buying platform is, the
more customers buy and return for more transactions.
Varying and dynamic pricing: Customers now seek for platforms where they
can get high-quality fashion wears and accessories without breaking the bank.
Fashion retailers are becoming more sensitive and competitive with prices. We will
strive as much as possible to keep relatively budget-friendly prices on our platform.
However, many target customers in this market mistrust ridiculously low prices for
luxury fashion in an online store.
Quality of service matters: If the price isn't too high, and the service is
excellent, we'll have growth through repeat business.
Convenience and timely delivery are vital: Customers are getting more
concerned about their convenience while getting the best service. This market is
highly influenced by timely delivery since most customers rent clothes for certain
events or meetings. We will build strong relationships with fast delivery companies
to ensure timely delivery service, convenience, and maximum customer
satisfaction.
Target market
The main market that Beyond the Runway is focusing on is Canadian women with interest
in Fashion who have active social lives and are budget sensitive. Over the years, we will
introduce men’s fashion wears, after a productive years of operating in the women’s
fashion sector.
Since the target market is still unclear in terms of size and demographics (age, geographic
location), size is estimated using census data to trim what cannot be part of the target
market:
3,519,595 people live in the economic region of Montreal
Of these, only 975,770 are women between 24 and 64 years old
Of these, only 56.6% have an income that makes them wealthy enough to subscribe to our
services without being wealthy enough to buy the dresses in the retail industry (income
$20,000 to $80,000 per year). This trims the population to 552,286.
Of these, we know that approximately 24.7% of these read fashion magazines in a
relatively regular way (they read at least half of the issues of their favorite fashion
magazine). This shrinks our market to 136,414 women.
Among these 136,414 women, it is assumed that some will be interested in the idea of
being able to wear a high-fashion dress that is different for each occasion. The niche
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consists of the few women from these 136,414 who would be interested in renting
fashionable clothes rather than buying them.
Target Consumer Needs
To have a different dress for each occasion
To have a dress that will fit the context of each occasion
To have a dress that will impress
To make a fashion statement
To make a statement about their social status
To avoid investing in something that will not be used often
Hence, we propose a service that enables consumers to bring variety to their wardrobe
without breaking the bank or breaking a sweat. This is an attractive, trendy business
model in the Canadian fashion industry.
Market Pricing Pattern
The pricing pattern is a pivotal decision for the luxury fashion retailing business in
Canada and worldwide. Customers highly consider price as a significant buying pattern.
For the luxury fashion retailing industry, high prices are often associated with high
quality. However, the customer now demands average-rate quality products that don't
require mortgaging or breaking the bank. When the prices are too low in the luxury
fashion industry, mistrust tends to rise, while customers give up buying when the prices
are ridiculously high.
Market E-commerce Trends
Keeping up with the latest trends in fashion e-commerce, including both back-end
efficiencies and front-end conversion-optimizing experiences, is paramount to growing in
the retail landscape of 2020. Highlighted below are some of the significant trends for the
year and beyond:
AI helps shops learn about shoppers and enhances online shopping experiences.
On-site personalization uses those insights to create individualized experiences.
Big data plays a big part in creating personalized experiences.
Chabot improves the shopping experience.
Mobile shopping is still on the move.
More payment options.
Headless and API-driven e-commerce allow continued innovation.
Customers respond to video.
Subscriptions keep customers coming back.
Sustainability is becoming more critical.
Businesses should optimize digital strategy for conversion.
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Market Competitors
There are major competitors in the Canadian fashion industry, contributing to market
volume and growth. Bridal boutiques are not considered as competitive as they pertain to
another market. Few competitors are located in the Montreal economic region. However,
from a national perspective, many competitors are present, and most are already well
established. These include:
Rent Frock Repeat
FitzRoy Rental
From a local perspective, Atelier Privé and La Petite Robe Noire are the main
competitors. However, they do not propose a monthly subscription model. Also, Atelier
Privé does not have an online service.
Reheart is another potential competitor but is not necessarily a threat because its
genre is too different from the one BTR proposes. Reheart proposes regular clothes and
very few designers’ dresses like BTR.
Our main competitor
The main competitor to BTR is Rent Frock Repeat because it proposes a subscription
model similar to Beyond the Runway. It also has a large selection of clothes. Their website
is functional and appealing, despite lacking in other areas. Some of the sections of their
website are empty - "cocktail dresses."
Considerable attention will be given to Rent Frock Repeat because it certainly has a large
customer base, a large market share, and is already present nationwide. Rent Frock
Repeat also has great investors: In 2012, Jim Trelivin and his partner invested $250,000
in the company. It is a very well established and capital-rich business that already
controls an important size of the Canadian market. It could be said that Rent Frock
Repeat is the general practitioner of feminine clothes renting in Canada. It has no
specificity but proposes a wide variety of clothes.
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STRATEGY AND IMPLEMENTATION
Beyond the Runway's primary strategy involves leveraging our website and mobile
platform and friendly usability into higher profits through sales volume, standard prices,
and more extensive customer database. Our online store will provide the best shopping
deals for high-quality fashion wears and accessories coupled with diverse sales program
we will implement. We have a deep comprehension of the consumers' underlying needs,
so we offer them what they want in a well-optimized platform.
Our strategy will also be to build a robust website and mobile applications. The site will be
robust by having an extensive product offering, ease of navigation, ease of renting and
purchasing, and comfortable delivery tracking. Our platforms will be updated frequently
to encourage customers to visit often, and products will be emphasized to try to pull the
customer in.
We will use Web Trends and diverse Web traffic monitoring software to gain insight
regarding our online customers. This information will be indispensable for the future
modification of products and services to appeal to the customer's needs.
Currently, Beyond the Runway has ten customers who subscribed to plans before the start
of the Covid-19 pandemic. Efforts are being made to keep these customers happy while
working on website improvements and marketing campaigns to get new customers during
the post-pandemic period.
Marketing Plan Highlight
The focus will be brought on new customer acquisition by:
Visibility of the website through Search Engine Optimization
Promotion of the website through different marketing channels
Collecting data on the target market
Building personas of the target market
Maximizing User Experience
Implementation of AI on the website
Personalization of customer accounts through AI
Because a company has to focus on certain aspects of its marketing during a plan to be
effective, it has to focus away from other aspects or consider them later.
Highlighted below are some of the things that will be omitted at this stage:
Price adjustment
Finding other distribution channels
Market Expansion
The first goal to reach is to reach enough customers to makes the company cash-flow
positive, thus profitable. To do this, the strategy is to attract many potential consumers on
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the website, and most importantly, to retain them. For this to happen, BTR has to
maximize the number of customer conversions. This means both maximizing the number
of leads (increasing awareness) and maximizing conversion rate.
Our Marketing Funnel
Awareness
First, awareness has to be created about BTR. This can be easily achieved through
advertising through Google ads, Facebook ads, Instagram ads, own media like blog posts
and YouTube videos, and other channels. Marketing channels will be discussed later.
Thus, the metric for this goal is the number of views/impressions from advertising or
videos or posts.
Consideration
The next thing is that consideration must be maximized. This can be achieved by ensuring
the advertising is appealing, well-targeted, relevant, and well-executed. This will be made
possible once we have more information on the target market. The ads and their content,
including message, images, style, and other features, will be adapted to the market, and
with the help of Facebook ads, we will be able to experiment with ads and figure out which
one works better.
If this is done well, potential customers will click on the ads/links or go to the website.
The relevant metrics to use here are the click-through rate or the number of new visits.
Interest
Next, interest is the most complex stage in our case. Once a potential customer arrives on
the website platform and starts looking through it, it becomes clear that the potential
customer is interested. How interested the customer is can vary from simple curiosity to
clear purchase intention.
Interest must be maximized, meaning that once a customer arrives on the website,
chances that she leaves (called a rebound) must be minimized. Certain factors, like the
number of SKUs available in stock, might influence users, but the most important one is
the website's design. This is where user experience comes to play.
Satisfactory User-experience
User experience is the field that uses web design and marketing to provide the best
experience to the customer possible. Usability, usefulness, ease of use, accessibility,
aesthetic, functionality, speed, efficiency, and fun are all criteria that users consciously or
subconsciously judge. The website has to be what users need to be convinced to make a
purchase. Customers might need certain features like search engines, customized
suggestions, sections, organization, easy payment interface, review sections to find the
website appealing.
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For example, a crucial aspect of improving the User Experience of the website is the
language accessibility. For now, the website is only accessible in English. It will have to be
translated and also adapted for French speakers. Six hundred forty-six thousand women
in Montreal's economic region only speak French and not English (Census Canada, 2016).
The better the website, the more it resembles what customers need/want, and the more
customers will proceed to purchase.
Data Collection
To maximize users' interest and keep it high to maximize conversion chances later, email
addresses should be acquired as soon as a user lands on the website or before leaving to
build a newsletter for the potential customer base. This will also allow us to do further remarketing where ads are targeted to those who have already been on the website without
interacting enough with it.
Thus, at this stage, the relevant KPIs will be:
Rebound rate
Number of webpages visited by session
Average time on a page
Top exit page (to know what makes users leave)
Number of search queries on the website
The number of new email addresses acquired.
Conversion
Finally, the last stage, the most important, is conversion. When a user is convinced and
wants to subscribe, they will go to the subscription page and pay for a subscription. To
reach this final step, consumers need to be convinced by the service. At this stage of the
business, the best that can be done is to maximize the user experience on the website. The
relevant metric is the conversion rate.
Having a clear funnel like this makes it much easier, later on, to see where efforts have to
be brought. If many consumers entered the funnel (learned about the website) but did not
proceed to the subscription, having information on the position of the consumers in the
funnel will allow us to take better corrective measures to increase the conversion rate.
Online Marketing channels
We will use some cheap marketing channels to boost our brand awareness and lead
conversion while minimizing cost. Highlighted below are some of these channels:
Social media (Facebook, Instagram, Pinterest)
Google ads (especially on relevant websites directed to fashion fans)
YouTube ads
Newsletters
Blog contents
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These marketing channels are the cheapest and thus the best for a new online business.
Competitive Advantage
Our unique selling point is that we currently offer a subscription-based rental service,
which is not currently being offered by many fashion rental companies considered to be
competitors. This provides a first-mover competitive advantage for Beyond the Runway
Inc. along with being one of the first companies to provide the services nationwide.
Another strength for Beyond the Runway Inc. is location. Montreal is considered to be the
fashion capital of Canada, and Beyond the Runway Inc. has a major strength by having
headquarters located in Montreal (Montreal International, 2019). This is because
customers are invited to the headquarters to try on articles, and by being easily accessible
in the fashion hub, it could lead to more subscriptions.
Furthermore, we offer free shipping and delivery, which is hitch-free and fast. We will
integrate mobile-tracking into our web and mobile platform where customers can track
their package. Our platform will also be distinguished through our Artificial intelligence
integration, which helps learns customers renting and buying patterns to provide swift
and satisfactory choices.
Lastly, the products that will be available for rental are from well known, high-end
designers. Subscribers will be able to rent the dress on the subscription program for a
month while traditional rental companies provide one product for nearly double the price.
Strong Supplier Relationship
Beyond the Runway holds garments form many designers with whom they are building
strong business relationships. The company purchases garments from its suppliers at
wholesale prices if ordered in larger quantities. At present, the suppliers require 50%
down payment on the order and 50% upon arrival of the order to the facility.
The business also offers handbags from luxury brands such as Louis Vuitton and Gucci;
however, these items are bought at full price from the retail stores. As long as shipping
and logistics is concerned, Beyond the Runway has established a very good relationship
with a shipping agency. Beyond the Runway ships mostly through Purolator (with 70% off
the regular shipping rate) and get the package to clients within 1-3 business days in most
major cities in Canada. Beyond the Runway also ships through Canada Post with 20% off
the regular rate.
This strong relationship is to help us minimize our operation cost to maximize profit
generation. We will constantly source for the best suppliers of every fashion brand we
provide and strive to build a long-term working relationship with them.
Promotion Strategy
Electronic and printed flyers and mailers will be used to promote our sales promotion to
bring customers to our platform. We will consistently run a monthly campaign to educate
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potential customers on why they should patronize us, and generate higher brand
awareness.
We will make use of significant news platform [press release], magazines, and blogs to
promote our brand and services. Social media, in conjunction with these platforms, will
be used to create anticipation and generate leads. We will incorporate a well-search
engine optimized blog into our web platform to educate, boost sales, and promote traffic.
We will promote our online visibility through quality and continuous SEO optimization.
Fortunately, once a potential customer comes on our platform, the chances of buying are
very high once the platform is user-friendly with great products. So, our promotional plan
is majorly focused on drawing people to our platforms and then seeking to provide them
with quality products and superior customer experience.
Current Advertising and promotion
Just as any new business, Beyond the Runway, needs robust advertising to get customers
to our platform. Before we begin spending big on public media advertising, we plan to
focus majorly on our target audience first. We will test some advertising media in the first
months of operation, carrying out an evaluation monthly to determine which medium
suits us best. After 12 months, we will focus our advertising strength on where our
primary target market frequents, cut down expenses, and increase advert productivity.
Being an online-based fashion rental store, the company's advertising and promotion
strategy is continuously aimed at establishing a strong online presence and corporate
image.
Between December 2019 and March 2020, the owner Lucy Zhao hired the services of
professionals and digital media experts who helped boost Beyond the Runway online
presence and customer awareness, support the brand in the marketplace using the most
up to date tools and methods to deliver a consistent message to potential customers and
current customers.
In this respect, the most notable activities involved:
Search-engine optimization conducted by Digitad
Social media presence and Facebook ads: Frenzr Agency
Professionally produced video clips posted on the Beyond the Runway YouTube
channel have contributed to raising the visibility of the company and its services.
Advertorials on Montreal Blog and Montreal Times, Toronto Times.
Google ads campaigns have been launched on relevant websites directed to fashion
fans.
Email newsletters promoting new arrivals or offering rebates are being sent
regularly.
A referral system has been implemented. When an existing customer refers a new
customer, he/she will receive $30.00, while the new customer will receive a
$20.00 reduction in her first monthly payment.
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Online Giveaway contests have been periodically organized to generate traffic,
boost engagement, and grow the email database of contacts.
Working with Canadian social media influencers with impact in consumer decision
process such as:
Jennifer @https://www.instagram.com/pldetails/
Hana @https://www.instagram.com/hanathewifey/
Marie @https://www.instagram.com/mariejbeil/
Dajana @https://www.instagram.com/dajana.krstevski/
Kiran @https://www.instagram.com/kiranchandani/
Gabriela @https://www.instagram.com/madamerivera.mtl/
During the Covid-19 crisis, the collaboration with external consultants was paused;
however, the activities of promotion, advertising, and interaction with followers
continued on Facebook and Instagram with the help of a Web Marketing Specialist.
A real success was a giveaway contest held during this period that gathered 300 emails
from participants. As a result, the total number of subscribers to the Beyond the Runway
newsletter has reached 1200, which will be leveraged into massive lead conversion.
Pricing Strategy
Beyond the Runway website offers different membership and pricing plans:
A one-time trial gives the customer a possibility to try out the service and the clothing
items. This option is limited to a 5- or 10-days rental period depending on the option the
client chooses to go with. Silver Membership subscription at 99$/month gives the
subscriber full access to clothing and accessories, allowing them to order four items per
month. Gold Membership subscription plan at 149$/month gives the subscriber full
access to clothing, accessories, and an unlimited amount of orders per month, each
containing four items.
The company also allows its subscribers to purchase any item they wish at a discounted
price. The shipping is free, with customers only having to pay for the rental. The products
are shipped Canada wide from Beyond the Runway Montreal warehouse. Local customers
can email or phone the showroom to book a free consultation with a Montreal Stylist.
These appointments will be socially and economically sensitive. It will be affected by
factors like the Covid-19 pandemic for social and health safety reasons.
Sales Forecast
Average Subscription plan is conservatively estimated at $90. We plan an average of 8
people per month, with a 90% retention rate. We estimate an average of 90 subscribers in
the first year, 185 by second, 280 by third, 375 by fourth, and 470 by fifth year. Retail
sales is estimated at 10% of inventory and expected to grow at 5% annually.
Year 1
Year 2
Year 3
Year 4
Year 5
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Retail sales [10% of yearly
inventory]
Subscription Fees
TOTAL REVENUE FROM
SALES
Competitors pricing
21,330
22,396
23,516
24,692
25,927
42,120 119,880 197,640 275,400
353,160
63,450 142,276 221,156 300,092
379,087
Rent Frock Repeat:
$129/month/4 pieces/swap 1/month
$229/month/6 pieces/swap 1-6
Fitzroy rentals: They have no plans, prices are $100-$200/ 4-8 days
Customer service policy and warranties
Beyond the Runway takes great care of impeccable customer service. The website includes
three sections with extensive information regarding the purchasing process. Frequently
Asked Questions covers the most common issues customers or prospective customers
could come across.
Terms and Conditions: Our Terms and Conditions is a highly informative and detailed
section that includes legal information and terms, rules, and guidelines for appropriate
behavior and other helpful sections that users must agree on to use or access the website
the services offered by Beyond the Runway. Also included in this section: shipping and
returns details and the handling of returns.
Replacements: If an item does not fit, Beyond the Runway will do everything to please
the customer and ship another size or style (basic plan). For Silver and Gold membership
plans, 1-4 items are rented at each time. If the customer receives a damaged product,
Beyond the Runway will ship the same item or a similar product to clients free of charge.
Cancellation: All one-time basic rentals can be canceled and refunded before shipping.
With the monthly subscription plans, customers have the option to cancel. However, there
is a two-month minimum commitment, and all the rented items must be returned to
Beyond the Runway before canceling.
Customer Support: Beyond the Runway offers instant support and answer to questions
via the Facebook and Instagram accounts and also by phone and emails during the
business hours.
Unique Selling Proposition
The main argument that differentiates BTR from other women's clothes renting
companies is that BTR offers high-fashion, high-quality and luxurious products in a
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subscription-based pricing and timely delivery system. Many brands that are listed on the
website are luxurious or high Fashion. While competitors have a wider and more
comprehensive selection, BTR focuses on dresses and accessories to help consumers make
a fashion statement for the occasion.
Dresses from Talulah and the East Order help consumers signal their sense of Fashion.
What is more, BTR focuses on high-status brands that allow consumers to have this wow
factor they are looking for when going to a special event. Handbags from Louis Vuitton
and Michael Kors are what consumers need to make a statement about their social status
on special occasions.
In other words, BTR provides the possibility to have a different dress for every occasion; it
also gives its customers access to luxury products that they would not be able to buy and
so to impress when they need to. To support the idea that consumers need to show their
social status, Gad Saas wrote in The Evolutionary Bases of Consumption that most
compulsive purchases done by women are done to prove their superiority or status. This is
especially true for apparel and accessories like handbags.
Finally, customers of BTR will benefit from advising assistants who have extensive
experience in the industry. Just like its items, the customer service at BTR cannot be
matched by the competition. Overall research finds that 78 percent of customers are
willing to pay more for products if they experience great customer service. (Solomon, M.
R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R., 2014). Relationship
marketing should be a central tenet of BTR's marketing strategy. Each customer will
receive customized assistance in their choice, will be followed up regularly and offered
recommendations.
Our Marketing Mix
Product
As stated in the USP, the service is differentiated because it focuses on the quality of
service. Regarding the items to rent, only the most fashionable, the most luxurious and
the most impressive items are selected. Beyond the Runway is the luxurious version of our
competitors.
Price
The price for the subscription should be higher than that of our major competitors to
signal consumers of high quality. Ridiculously low prices often breed mistrust in the
fashion industry. Charging the same price would signal to consumers that the two brands
are similar and thus that Beyond the Runway is no more luxurious and thus that
switching brand is useless.
Place
The business should stay online for the moment because:
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It is the best way to reach consumers
It reduces costs
It makes transactions and consumption faster and more convenient
Promotion
The promotion should stay online because it is the least expensive and most effective for
online businesses. The promotion aspect is explained in detail in the marketing strategy.
Customer Data collection, persona and SEO optimization
In terms of consumer persona, the picture is still unclear. Our market is still undefined
and broad. We know our target consumers are women, aged 24 to 64 who have high
enough incomes but not too high. However, we have no data to specify this market
segment.
Fortunately, Facebook ads will reveal the most responsive consumers. When Facebook
ads have enough data, these should be used to define the consumers in more precise ways.
Data will be available on characteristics like income, location, marital status, among
others. This will allow us to target consumers better through advertisements.
Another crucial point that has to be implemented is Search Engine Optimization. Because
BTR is only present online, its visibility will depend on how often and how high the results
of BTR appear in Google searches when consumers type related terms.
To implement Search Engine Optimization, and thus increase brand awareness, BTR will
have to create content that includes terms that target consumers are likely to type in
Google. This will be further propagated by a blog section on our website, whose articles
will be used for content marketing, redirecting readers to patronize us through engaging
and actionable content and internal links.
We will be proactive with our keyword indexing and use a premium keywords platform to
source for trendy and most searched keywords by our target customers. These keywords
will also be integrated on all our social media platforms, such as YouTube, Pinterest,
Facebook, and others.
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HUMAN RESOURCE
People are the single most crucial element in our company's operation. We value our
directors, managers, and staff (both in-house and outsourced) as the most critical element
in running a quality operation. The manager and teams need to be all on the same page of
processes. We have found that friendly, strong managers make friendly, healthy crew
people. From that crew comes the next generation of managers and quality operation. The
customers can see it in the quality of products and service, how fast the service is, and
how user-friendly our platform is.
One of the significant factors in the online Fashion renting business is the mood of the
customers. If we get a potential customer to visit our platform for the first time and the
customer gets comfortable while getting the desired quality at the right time for the
correct value, there is a guarantee for repeat service and word-of-mouth marketing. That
is one of the most effective advertisements for our business model.
Here at BTR, some of our new operations and maintenance will be outsourced, except for
major roles and activities that will be carried out by the management and recruited
employees. Our human resource process will be streamlined to make good use of
outsourcing companies and freelancers to minimize operation costs while focusing on
business growth. Our employment list will be kept low to allow for profitability.
Our Human resource practice will focus on the turnover rate of managerial employees,
turnover rate of non-managerial employees, labor productivity, and Return on assets. Our
recruitment process will ensure we are equipped with the best staff available who are
eager to learn and develop because we are a learning company that works to grow more
into what the customer wants from time to time.
We will continuously project into the future, to beat the market needs, and so we will be
staffed with enthusiastic team members. Our staff will be trained from time to time to
ensure quality delivery of service and business continuity.
Simplified HRM Target
Required number of employees
The budget on each employee role
What type of Employee Needed?
Specific job description and role of required Employee
When the Employee is needed
Where and how fast to find the Ideal Employee
How best to manage each Employee for business continuity.
Team Leader
Lucy Zhao, President (100% ownership).
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More than 20 years' experience in the fashion and textile industry
Main responsibilities: marketing, sales, business planning, and financial operations.
Ms. Zhao's experience as an entrepreneur started before her moving to Canada thirteen
years ago with her first venture in China, which was a manufacturing company for babies
and children's bedding and clothing. Due to the success and maturity of that business, she
was able to leave the company in the hands of her China office and no longer dedicates all
her time and focus on it.
Yet, as an entrepreneur motivated by a strong need for achievement and, as she described
herself, a desire to move quickly and get things done, Ms. Zhao went on to start her
second business, Vicky and Lucas Inc., which is a wholesale company in the fashion
industry in China and the United States that supplies a large portion of the inventory of
clothing for Beyond the Runway Inc.
Both experiences and the Master's degree in International Business and Trade that she
completed in China gave her an excellent foundation for starting her new business here in
Canada.
The team and organizational structure
The team is composed of three key people, including Lucy Zhao, Emilie Hemmings, and
Daniel Zimmerman. Lucy Zhao is the head entrepreneur and the visionary behind Beyond
the Runway. Her current role as CEO of the organization.
Followed by Zhao is Emily Hemings (Hemmings), who is one of the first employees of the
company who occupies many important roles. Her roles include styling, merchandising,
order processing, and inventory management. She holds a degree from John Molson
School of Business and has eight years of experience in retail.
Daniel Zimmerman is a newly added member of the team. He is a Marketing specialist
and social media expert. His current role is to spread awareness about the company using
social media platforms and search engine optimization (SEO) that will subsequently
translate into the conversion of sales. In 2018 the company was incorporated, making
Lucy Zhao (Zhao) the first official CEO of BTR.
Key people Description
Lucy Zhao, Owner, and President (100% ownership)
Serial entrepreneur, more than 20 years' experience in the Fashion and textile industry at
the international level.
Main responsibilities: purchase, marketing, sales, business planning, and financial
operations.
Stefan Bocioaca – Graphic Designer and Copywriter
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Main responsibilities: newsletters, graphic design, contents creation, video/image editing.
Raymart De Guzman – Web Developer and IT Support
Main responsibilities: Website programming, Backend data and analysis, SEO and all
technical support
Tania Marcoux – Digital Marketing Specialist
Main responsibilities: Social Media posts, Paid ads. Promotional Campaigns, Google
analytics, digital marketing
Emily Hemmings – Stylist, Operation and Customer Service
Main responsibilities: Data entry and updates, office admin. and Operation, Customer
Service, Stylist
Deeksha Ahuja - Intern
Main responsibilities: Social media postings, Operation and Customer Service
Other Freelancers/Contractors:
Carmen J Michaud – Buyer
Pierre Longtin – Photographer
Various Fashion Models, agencies, etc.
Personnel Plan
The personnel plan below is calculated on a yearly basis because a sizable amount of our
operations in the early years of the business will be outsourced and carefully managed by
the management. This is done so as to save cost and boost early break-even.
Total Number [+1 per 100 subscribers]
Year 1 [6 employees]
Year 2 [7 employees]
Year 3 [8 employees]
Year 4 [10 employees]
Year 5 [12 employees]
Total Pay
50,000
70,000
90,000
130,000
180,000
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OPERATIONS
Legal Issues
Beyond the Runway will be registered and incorporated per the laws of the country of
Canada. We will further ensure that asides incorporation problem, we will settle
Trademark security problems, Copyright protection issues, Transaction issues, and
privacy issues. These issues are the most common issues faced by online businesses in
Canada.
Insurance Issues
Our business has a low-risk rate, and so we won't need to spend much on insurance. In
the first and second year, our insurance cost will be almost zero. At the same time, as we
expand geographically and industrially in the third year, we will explore good insurance
companies that are best for our company.
We will make use of General liability insurance at the inception, and as we get assets and
properties, we will make sure we make use of property insurance. Since we are starting
with a few employees, we will not need to make use of Workers' Compensation insurance.
This will only be paid for as our employees' list expands.
Risk assessment and contingency plan
The first risk is the interest rate risk, which is due to a low equity ratio. Beyond the
Runway depends on loans and financing. However, this risk is mitigated by the fact that
these loans from the shareholder and related parties are non-interest bearing.
Raw materials/price risk is another risk that the business might be faced with. Beyond the
Runway Inc. has to purchase some of its inventory (namely, the luxury items over $1,000)
at the retail prices since it has not yet built credibility with suppliers to purchase the
inventory at the wholesale price. However, most of the inventory items held by the
business (i.e., 1500 out of 1600 items) were purchased at wholesale prices or discounted
wholesale prices.
Lastly, the risk of entering into a new market is relevant since Beyond the Runway Inc.
was just pre-launched this October 2019 as a new online fashion rental business in
Canada. This risk has been reduced by the extensive research done by the lead
entrepreneur and in this business plan into the market potential and the realistic revenue
projections.
As an overall contingency plan to responding to the above risks, Beyond the Runway Inc.
will maintain close relationships with its suppliers and especially with existing customers
to grow through reduced costs and favorable terms as well as repeat purchases and word
of mouth. We will leverage these relationships to source wholesale prices while ensuring
maximum adherence to our extensive market research indications and strategies.
37
Damages to Items.
Beyond the Runway Inc. currently dry-cleans all items that are returned after being
rented, which means it takes on the responsibility for any damages to the inventory. One
potential way to reduce this risk would be to introduce a small charge for insurance added
to the monthly membership fee, particularly for luxury items. However, given that Beyond
the Runway Inc. currently has a competitive advantage in terms of price, this would only
be considered beyond the next three years since the focus is on attracting customers and
quickly gaining market share.
Inventory Policy.
There is a possibility that some customers might use their membership plans to rent
clothing for their friends and family as well. This could create a problem if Beyond the
Runway Inc. starts to gather customer data and plans for a certain order each time (for
example, a certain size of clothing). To reduce this risk, the business will develop a very
clear inventory purchasing policy, further discussed in this Financial Plan.
As well, the inventory policy also involves a clearance sale of out of season inventory items
through other channels, which protects against inventory that has become obsolete and
will likely no longer be rented.
Membership Cancellations.
The business currently allows customers to cancel their membership after a two-month
minimum commitment. This policy will be revised in the future to encourage annual
memberships. The assumption now is that at least 50% of last month's customers keep
their membership. All one-time basic rentals cannot be canceled or refunded.
Operations Location
The current facility is located 5485 Rue Pare, Suite 202, Mont-Royal, H4P 1P7, QC,
Canada and is operational from 9 am to 6 pm EST. It holds Beyond the Runway's Head
Office, showroom, and storage, where stock occupies the largest part of the premises. The
showroom and storage currently hold 2000 dresses and various outfits of all sizes.
This amount can currently serve around 250 to 300 subscribers. The total capacity this
space can hold is about 4,000 items. To be able to satisfy new upcoming trends and
growing demand, new Items arrive every month. The items are being disposed of (sold or
donated) once they become out of style or expire.
The floor plan for the facility is attached for perusal at the appendix.
Business’ Equipment
Two Dell Computers (desktop)
One MacBook
One Brother laser printer
38
Photoshoot studio equipment (4 sets of lights, lightbox, tripods, backdrops,
camera, video-camera)
Steamer
Service Flow chart
The service flow chart, divided into three separate swim lanes (customer, operations,
website), has been created to demonstrate the step-by-step description of how the service
will be made. The start of the process for the company is in the "Operations" swim lane,
where the purchase of goods is from the supplier is the first step. The company purchases
the goods from the supplier.
Following this step is the receipt of the goods at the company's facility. At this stage,
inventory is counted and entered into the system. Subsequently, the goods need to be
measured and photographed if the supplier does not provide already existent photos and
measurements of the garments.
The garments are then displayed on the website. Once a subscriber places an order for
garments, the company processes the order meaning that the order is being entered into
the system; the garments are retrieved from the inventory and taken off the website. The
order is then shipped to the customer.
Currently, Beyond the Runway utilizes the services of Canada and UPS for its courier
delivery service needs. After an X amount of days (depending on the customer's
subscription), the company receives the garments back and has to analyze them. When
the garments received from the customer show signs of severe unrepeatable damage, the
customer is billed for the full price of the garment.
The inventory has to be then updated in the system. Otherwise, the garment goes through
the standardized procedure of dry-cleaning and minor damage repairs before being put
back on the website.
Key Supplier Operational Relationship
Beyond the runways holds garments form many designers with whom they are building
strong business relationships. Zhao purchases garments from her suppliers for wholesale
prices as she orders larger quantities. At the present moment, the suppliers require Zhao
to put 50% down on order and 50% upon arrival of the order to the facility.
Scheduling (Miles stones, activities and deliverables)
Achievements
The company's commercial website has been launched in early October. It is available for
use on mobile phones as well as on desktop computers. Beyond the Runway outsourced a
team of website developers who worked on contractual bases to create the website from
scratch. The objective is to create an interconnected system, making it easy to track and
measure what works regarding marketing, logistics, and sales.
39
Website's current features:
Digital catalog that displays the goods;
Product database that features product information on the website;
Customer database that accumulates customer information;
Sales database holds order information intending to provide customer support;
Shopping cart and payment system to execute transactions;
Site tracking and reporting system that allows for tracking marketing effectiveness.
Milestones
The website will host the following new features:
Customers on-site tracking which will allow them to make personalized suggestions
to subscribers. Using a subscriber's past rental history to suggest other items in similar
styles that they might like. The recommendation will be heard towards the items that are
currently held in stock. This feature will allow Beyond the Runway to fulfill a greater
percentage of orders;
An onsite blog where subscribers will share their thoughts and reviews. The subscribers
will have a second source of reference when choosing the items for their orders. They will
be able to consult other's thoughts regarding sizing, fit, and quality, thoughts on the
brand, thus reducing the risk of choosing the wrong size or style or fit. This feature will
also provide Beyond the Runway with constructive criticism that will be used to make
better suggestions and work with the designers that the subscribers most enjoy.
An Inventory management system will keep track of inventory levels and will help
maintain them at optimal levels. The current inventory management system is manual
management via spreadsheets. Using an automated inventory management system
created specifically for ecommerce will automatically upload and remove garments on the
website as they are purchased by the company or rented out.
Social media: Daniel Zimmerman being the new addition to the team, is currently
revamping its social media platforms to make them "shoppable." We need to grow our
social media presence to attract new subscribers by posting on consistent bases and
engaging with the subscribers and potential customers. Their goal is to make their social
media platforms into a streamlined multi-channel shopping experience to convert
browsers into subscribers.
Technology requirements and investment needs
The main technology requirements and investing needs are primarily related to the future
development and maintenance of the website and mobile applications according to the
technological trends that impact e-commerce.
The next steps to take are:
40
Adding a French version of the website to reach more French-speaking customers.
Introducing an app so that clients can easily browse and place the rental orders via
smart devices more easily (the current website is already mobile friendly)
Depending on the number of customers, we intend to build a more detailed profile
for each client that will allow the system to analyze each client's rental preferences
and sizes, forecast, and recommend new styles to clients for their next rental
package.
Customer on-site tracking, which will make personalized suggestions to
subscribers. Using a subscriber's past rental history to suggest other items in
similar styles that they might like. The recommendation will be heard towards the
items that are currently held in stock. This feature will allow Beyond the Runway to
fulfill a greater percentage of orders; the goal is also to save clients' time browsing
the growing inventory online. Customers will just pick up from the
recommendations available to them and place their rental order in a much shorter
time.
We introduce new functions to the website to make it easy to use for clients and to
collect and analyze all the data we have and predict the next step to go.
An onsite blog where subscribers will share their thoughts and reviews. The
subscribers will have a second source of reference when choosing the items for
their orders. They will be able to consult others' thoughts regarding sizing, fit and
quality, and thoughts on the brand, thus reducing the risk of choosing the wrong
size or style or fit. This feature will also provide Beyond the Runway with
constructive criticism that will be used to make better suggestions and work with
the designers that the subscribers most enjoy.
Other investment targets are:
Purchasing: Buying more designer's outfits and luxury purses and accessories
increase the inventory so that clients will have a very wide variety of choices.
Marketing: Social media campaigns integrate new technologies with the actual
system.
Top-notch hiring: Hiring people who are talented and knowledgeable with a
passion for the fashion industry.
Video marketing production: Producing new and updated video clips to get
more visitors, influencers, and prospective customers.
Physical Booths Implementation: Implementing physical booths installed in
shopping centers. The goal is to create a place where customers will be able to
come in to try on the garments before ordering them.
Inventory management System: An Inventory management system to keep
track of inventory levels and help maintain them at optimal levels. The current
inventory management system is manual management via spreadsheets. Using an
automated inventory management system created specifically for ecommerce will
automatically upload and remove garments on the website as they are purchased
by the company or rented out. The website backend system keeps an accurate
record of the inventory and the rental situation.
41
New showroom in a shopping center Implementation Timeline
Opening a new showroom in the Wilderton Shopping center, which is a shopping complex
that is currently under major renovations. The goal is to create a pace where customers
will be able to come in try on the garments before ordering them.
42
FINANCIAL PLAN
Important Assumptions
We project that the business will break even in the third year. This is because we are more
concerned about long-term growth rather than early profit. We will focus on getting a
large customer base which can then translate into higher profit in years (within 10 years).
Our business is a long-term profitability business like Rent the Runway in the United
states, which is believed to make huge profit after 7 years of operation.
We assume a slow and steady subscription at 6 subscribers per month, with a
retention rate of 90%.
We assume an average of $90 subscription from subscribers
We assume an external investment of 1million (CAD).
We will employ an extra employee to join the team for every new 50 subscribers.
We estimate an average of 55 subscribers in the first year, 137 by second, 209 by
third, 281 by fourth, and 353 by fifth year.
Financial Outline
The following sections outline our financial summary:
Expansion Cost
Sales forecast
Payroll
Projected Expenses
Cash Flow
Profit and Loss
Expansion costs
Beyond the Runway is currently seeking early-stage funding and strategic financial
partnerships to aid the execution of company’s objectives. The plan is to raise a sum of
CAD 1 million to help finance our goals and prepare us for future profitability.
Expansion Cost
EXPENSES
Advertising
Commissions
Insurance
Interest Expense
Miscellaneous
Guest Entertainment
Office expenses
Postage and Delivery
[CAD]
80,000
45,000
8,-,-,000
80,000
43
Professional Fees
Rent
Repairs and Maintenance
Store Supplies
Telephone
Travel Expenses
Legal Fees
Taxes
Credit Cards
Account Payable
Payroll Expenses
TOTAL EXPENSES
ASSETS
Computer & Equipment
Furniture
Software
Security deposit
Cash equivalent
Inventory
TOTAL ASSETS
TOTAL EXPANSION COST
30,000
59,000
2,000
2,000
4,300
7,500
2,000
5,700
18,400
75,000
100,000
569,700
6,000
15,000
55,500
15,000
130,500
213,300
430,300
1,000,000
Sales Forecast
Retail sales [10% of
yearly inventory]
Subscription Fees
TOTAL REVENUE FROM
SALES
Payroll Plan
Year 1
Year 2 Year 3
Year 4
Year 5
21,330 22,396 23,516 24,692 25,927
42,120 119,880 197,640 275,400 353,160
63,450 142,276 221,156 300,092 379,087
Total Number [+1 per 100 subscribers]
Year 1 [6 employees]
Year 2 [7 employees]
Year 3 [8 employees]
Year 4 [10 employees]
Total Pay
50,000
70,000
90,000
130,000
44
Year 5 [12 employees]
Projected Expenses
180,000
Expenses
Year1
Advertising Fees
Commission
Insurance
office expenses
Payroll
Shipping fees
Administrative fees
Rent
Taxes
12,000 12,000 24,000 24,000 24,000
9,-,000 70,000 90,000 130,000 180,000
14,-,-,000 18,000 18,000 18,000 18,000
6,000
7,000
8,000 10,000 13,000
129,900 165,300 212,700 261,900 322,100
TOTAL EXPENSES
Year 2
Year 3
Year 4
Year 5
Cash Flow Statement
Cash Flow Statement
Year 1
Year 2
Year 3
Year 4 Year 5
Cash Received
(CAD)
(CAD)
(CAD)
(CAD)
(CAD)
Cash from Sales
63,450
142,276
221,156
300,09
2
379,087
Cash from Receivables
0
0
0
0
0
Subtotal Cash from
Operations
63,450
142,276
221,156
300,09
2
379,087
External Investment
Received
300,000
300,000
400,000
0
0
Subtotal Cash Received
363,450
442,276
621,156
300,09
2
379,087
New long-term liabilities
0
0
0
0
0
Sales of other current
asset
0
0
0
0
0
Sales of long-term asset
0
0
0
0
0
Expenditures
45
Operating Expenses
116,900
152,300
198,700
247,90
0
309,100
Startup and expansion
Costs
290,000
290,000
350,000
0
0
Loan payment
(+Interest)
0
0
0
0
0
Long-term liabilities
principal repayment
0
0
0
0
0
Cash Spent [Loan
servicing]
0
20,000
20,000
20,000
20,000
Subtotal Expenditures
406,900
462,300
568,700
267,90
0
329,100
Net Cash Flow
-43,450
-63,474
52,456
32192
49987
Cash Balance
-43,450
-63,474
-11,018
21,174
71161
Profit and Loss Statement
Profit and Loss
Year 1
Year 2
Year 3
Year 4
Year 5
Cash from Sales
63,450
142,276
221,156
300,092
379,087
Cash from
Receivables
0
0
0
0
0
Subtotal Cash
from Operations
63,450
142,276
221,156
300,092
379,087
Total Revenue
63,450
142,276
221,156
300,092
379,087
Product Cost
19,000
20,000
20,500
21,000
21,000
Gross Margin
44,450
122,276
200,656
279,092
358,087
Gross Margin %
70.10%
85.90%
90.70%
93%
94%
Operating
Expenses
116900
152300
198700
247,900
309,100
NET PROFIT
-53450
-10024
22456
52,192
69,987
Expenses
46
Profit and Loss-
Year 1
Year 2
Year 3
Year 4
Year 5
-20000
-40000
-60000
47
Appendices
Appendix 1: Operations
Appendix 1.1 Service Flowchart
Appendix 1.2 Facility Blueprint
48
49
Appendix 1.4 Operations timeline
50
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