Lola & Lexi Business Plan

BUSINESS PLAN

By: Stephanie Alvarez

Yanira Losoya Tianya Nie

Lauren Thompson !!!!!FMD 451, Summer 2014

LOLA AND LEXI BUSINESS PLAN! � 2

Table of Contents

Executive Summary P. 3

Mission and History P. 9

Market Analysis P. 11

Products and Services P. 17

Pricing and Distribution P. 21

Operations P. 22

Design and Development P. 26

Management Team P. 30

Exit Strategies P. 31

Financial Pan P. 36

References P. 38


Executive Summary:

In the United States today, the shoe industry is worth over 40 billion dollars. From those

who purchase shoes, 60% of them are women. With an obvious market for shoes, especially

female, we wanted to create a business in shoes that has never been attempted before. Lola &

Lexi was born with the idea of being a specialty shoe retailer, focusing on foot issues women

deal with on a daily basis. Women like to feel confident at all times and sometimes their shoes

are not cutting it. Women with large feet, narrow, or wide soles often have trouble purchasing

shoes because there is a lack of inventory in stores. Department stores may carry specialty sizes

but they only have a couple pairs of these shoes in their inventory.

In order to accommodate women who are tired of having to purchase unattractive simple

shoes, Lola Roberts and Lexi Madison, two women with shoe problems of their own, plan to

open Lola & Lexi. Lola & Lexi will be a sanctuary for women with foot irregularities by

offering the best product, the best price, and the best customer service, leaving them confident

and happy.

We want to have our store in a brick and mortar location in Palo Alto, California. Women

living in Palo Alto typically have to travel to major cities such as San Francisco in order to fulfill

their need of buying shoes that fit correctly. Also, buying shoes online will not always work for

these women because some shoe companies are not true to size or description. With our

research, we have concluded that Palo Alto is the best location for our store because the median

income is $139,000 and the median age of 49.1. We are targeting these women because they

have lived half of their lives having poor shoe buying experiences. In order to make it up to this

demographic, Lola & Lexi plan to cater to these women’s every needs when it comes to shoes.


At Lola & Lexi, complementary lemonade and shortbread cookies will be served to our

guests, so that customers leave our store with a pleasant experience. Our store associates will

work first hand to accommodate all of our customers and serve their every need. With our

excellence in customer service, we can assume that customers will come to Lola & Lexi for

shoes for every occasion. After our brand is fully established, we plan to open more stores in the

Bay Area and eventually launch our e-commerce website to reach customers nationwide. We

estimate that our brand will grow exponentially due to the high level of income in Palo Alto.

Based on the figures provided by the United States Census, 58% of citizens of Palo Alto, CA

have a yearly household income greater than $100,000. Also, the data tells us that the average

household income in Palo Alto, CA is $181,311, which supports our desire to locate Lola & Lexi

in this city.

United States Census, 2012 figures for Palo Alto, CA Percentage of Household Income

31%

11%

16%

10%

33%

$74,999 and below $75,000 to $99,999$100,000 to $149,000 $150,000 to $199,999$200,000 or more


Further supported data by LoopNet, a commercial real estate and research web source, analyzes

the location of where we want to locate our brick and mortar Lola & Lexi store: 323 University,

Palo Alto, CA 94301. Figures indicated by LoopNet (in 2012) is based on research of a 1, 3, and

5 mile radius of the desired location on 323 University.

To further support our secondary research, we have conducted a survey asking people

specific and general question about shoes and their personal lives. These results are based off 32

responses from the survey.

LoopNet Data (2012):

• Average Income within 1-mile: $159,234; 3-miles: $143,404; 5-miles: $130,354

• Retail Sales Volume for Women’s Clothing Stores within 1-mile: $3,818,209; 3-miles:

$27,279,083; 5-miles: $46,847,253

• Retail Sales Volume for Shoes within 1-mile: $2,039,713; 3-miles: $16,013,104; 5-

miles: $27,904,279

Ages

44%

33%

15%

4%4%

Under 25 25-34 35-44 45-54 55+


Based on the majority of respondents being over the age of 45, the number of users of social

media is scattered. Also, from this data, we additionally asked how people learned about new

brands of footwear and found that most people checked “In Store” as their source.

Social Media

15%

26%

33%

15%

11%

Less than a few times a month A few times a weekAbout once a day More than once a dayNever

0

3

6

9

12

Narrow Feet Wide Feet Is it hard to find shoes?

Yes


When asking more specific questions about shoes in our survey, answers did not vary as much.

The majority of respondents said “Price,” “Quality,” and “Comfort,” were the most important

factors in buying shoes.

Source of Hearing About New Brands

Magazines

Word of Mouth

Online

In Store

Pop Culture

0 2.75 5.5 8.25 11

Price

Comfort

Quality

Design

Brand Name

Trendiness

Sex Appeal

Heel Height

Country of Origin

0 7.5 15 22.5 30

Top 3 Responses


In order to catch the attention of our target customer, we plan on first having a grand opening,

with champagne and hors d’oeuvres. We also plan on handing out cards regarding a free foot

measure, and a chance to win a pair of free shoes by becoming a part of our mailing list.

Since Lola & Lexi is a specialty shoe store, it was important for us to find out about what

percentage of women have problems buying shoes due to their foot irregularities.

!How we will achieve Success:

In order to achieve a success, at Lola & Lexi, we plan on going above and beyond to give

our customer our upmost attention in order to cater to their needs and provide them with the best

shoe shopping experience to ensure they continue to shop with us for years to come.

Objectives:

1. To create a customer experience that is memorable and pleasing. Serve our customers with

the best possible service to ensure they become loyal customers of Lola & Lexi.

2. To increase sales profits on a steady pace. With the help of satisfied customers we hope to

increase our loyal customers by at least 30% yearly.

3. To keep in business by serving our customer with a product and experience they have been

missing.

!!!!!


Mission Statement:

Lola & Lexi is a shoe company dedicated to the forgotten female market segment in

shoes. With the help of independent shoe manufactures, specifically those who specialize in

wide, narrow, and large soles, they work with Lola & Lexi to produce the best possible product

for our customer. At our Lola & Lexi boutique, our team is dedicated to serving customers with

feet that are large, wide, narrow, or a combination of these in order to make them feel

comfortable, confident, and welcomed. At Lola & Lexi, shoes for everyone is our specialty.

!!Elevator Pitch:

Do you know what I like to do to get myself in a good mood or simply want to reward

myself for all of my accomplishments? Shoe’s! That’s right, shoes are a girls best friend.

Forget those diamonds. I love the experience of trying on shoes at stores, walking around, and

imagining all the outfits the pair of shoes will compliment. I have two friends, Lola and Lexi

who have major issues when it comes to finding the right shoe. Lola has the issue of having a

large shoe size, and Lexi can’t ever find shoes that are wide enough to support her feet. Lola and

Lexi want fun, sexy, and comfortable shoes that the rest of the world’s “average footed” women

enjoy. Catering to the needs of Lola and Lexi of larger sizes and wider soles, our business will

transform the shoe industry by targeting a market that has been forgotten. At Lola & Lexi, shoes

for everyone is our specialty.

!!


Our Story:

Lola & Lexi is an all American shoe wear brand that is dedicated to women who have

foot irregularities such as wide, narrow, or large feet. Lola Roberts and Lexi Madison are the

two women responsible to making their problems with shoe shopping no longer be a reality.

Roberts and Madison both have struggled with having large, and wide feet and were sick of shoe

shopping that only led to shoes being outrageously expensive, hideous, or uncomfortable. Tired

of being self conscious of their feet, Roberts and Madison surveyed women in order to see if they

were not the only two women who wanted to shop a shoe store and have a great experience; this

is where the Lola & Lexi store was born.

!!!!!!!!!!!!!


Market Analysis

The state of the industry:

The retail shoe industry is constantly growing, as shoes are being manufactured

more inexpensively and a wider range of styles is available in all areas. Women's shoes

control nearly a quarter of the entire industry. Women's feet are getting bigger and shoe

manufacturers; buyers and retailers are starting to take notice. Average shoe sizes have

grown more than a size over the past 30 years. The demand for bigger shoes is forcing

retailers to slowly diversify their offerings. According to a sales person "A size 12 comes

in and the store might have one style to show. She sees 7's and 8's trying on a half-dozen

pairs. She feels humiliated, leaves and doesn't come back. And the store still has the 12.

Nobody's happy and it's a vicious cycle." At this period, the most important thing is to

first satisfy customers with size and comfort problems and then chase for those

fashionable styles. However, with women’s consumers increasing need for both comfort

and fashionable shoes, it is the right time for the existences of some new specialty stores,

which specialize in making shoes for women with all different sizes and widths.

The company and the concept:

Lola and Lexi is designed perfectly for middle aged women who have trouble in

finding shoes which are both comfortable and fashionable. Our store is a high quality

shoes boutique, which offers shoes from size 5-16 with different width from 4A to 4E.

Our service comes with the very accurate measurements. Customers will receive

professional measurements from our shoes specialists, this includes listening to

customer’s concerns, measuring the feet, calf, ankle size and suggestions for customers.


We provide four different kinds of women’s shoes styles for customers, this include flats,

sandals, heels and boots. Our store not only provides quality shoes, but it will also have

great customer service. We have our own online boutique and there are very specific

instructions and videos about how to measure your feet if you want to buy different kinds

of shoes. As shoes professional, we know that the way you measure a boot with a shoe or

ankle boot are different. Besides, we also provide a foot measuring guide for you to get

the general idea of which size of the show is perfect for your feet specifications. What’s

more, free shipping is offered online as well and if it is your first shopping experience,

we will offer another 10% off. “This is a store where you can see the magic.” said by

Lola. As a women who has trouble in buying beautiful shoes, she mentioned that she

hopes this store will give women their confidence back. Trust us! Your concerns will be

alleviated in Lola and Lexi.

The products:

Our store provides customers different styles of shoes, ballet flats, mid/high/extra

high heels, flat/heeled sandals, flat/heeled oxford, wedge heels and different kinds of

boots. The shoes size comes with from 5 to 16 with width from 4A to 4E. Each season

may vary but basic styles will always be there. Our fabrics are of the highest quality,

specifically selected for their color, soft touch and superior durability. We have seven

standards for our products, which are proper fit, flexibility, breathability, cushioning,

wearability, arch support and fashion.

Entry and Growth Strategy:


According to our research, a women’s shoes boutique with all sizes and widths

available is rarely seen in the US. Some of our competitors, such as Zappos.com and

Nordstrom, even if they provide wide or narrow shoes, most of them are unavailable. The

amount is so little that it is almost impossible to choose shoes both comfortable and

stylish. Our other competitors, such as Shoes of Prey and Milk & Honey, put emphasis on

letting customers designing their own shoes. However, they have only online boutique,

even though it ships to most of the world, if the size still doesn't fit, or the material

feeling not so good, these will all lead to unsatisfied consumers. It is a great entry

opportunity for us because we provide our customers with all different kinds of styles,

sizes and widths available, which satisfy almost everyone’s needs to be both fashionable

and stylish. Based in the Palo Alto, a place full of high-income families, the entry to the

market will be easily accepted. Palo Alto is full of middle-aged women and this is our

main target market as well.

In the future, we want to have more stores in the US and potentially overseas. We

plan to open another store within 5 years around the San Francisco area and also a store

in New York within 8 years. If it is possible, we want to create custom-made shoes as

well. We will launch a 3D design online and customers can make their own shoes by

choosing different styles, colors, materials, and heel heights. We also need more customer

base, such as younger age group who care about high quality lifestyles. More products

will be produced such as handmade handbags.

!!


Market Size and Trends:

According to the ABC News, “more than 43 million Americans, or one out of

every six people, have problems with their feet, and most of them are women, at health

cost of more than $3.5 billion per year”. Also, the survey indicates that women in their

40s and 50s often find that they have pain and large deformities from wearing ill-fitting

shoes. According to our research, 45% women who are aged over 35 have problems in

choosing fitted shoes. All these statics indicate that the existence of Lola and Lexi will

give some hope to those women. The National Shoe Retailers Association tracks sizes

and reports that foot size (in both men and women) has grown by a size or so over the

past three decades. According to this trend, women’s shoes will be wider in the future 5

years and will be 1/3 size bigger in the next decade.

Competitive Analysis:

For the competitor analysis, three stores were chosen, which are Nordstrom,

Zappos.com and Shoes of Prey. The reason by choosing these stores is because they all

selling shoes size over 10 or under 5, and they have some competitive advantages

compared with Lola and Lexi.

Nordstrom is department store based in USA. It is well known and has good

reputation. It does good job in both the store and e-commerce by having excellent social

media platforms and selling good quality products. However, the price range of the shoes

department is from $25-$1,000. Especially for bigger shoes, the price starts from $120 to

$1,000. Even it has some big size shoes with designer’s brands, because of the high price

point, it is still hard for consumers to get the shoes they want, and that's the reason why


our brand can survive because we have more reasonable prices compared with

Nordstrom.

The second one we chose is Zappos.com, an online website based in America.

The competitive point of this online store is the same price range and well known by

most consumers. However, since it is an online website, people cannot really try the

shoes on, this still limit the market. What’s more, even this website provide shoes such as

size 17, a lot of them are unavailable and the style look ugly. Compared with our stylish

shoes with all different ranges of sizes, Zappos.com seem like has not a lot advantages.

The third competitor is Shoes of Prey. It is an Australian based brand. They have a

really competitive advantage is that customers can make their own shoes online with

different colors, materials and heel heights. All the shoes are handmade with high quality

details. Besides, the price range is almost the same like ours. However, this company

only specializes in online boutique and in result are not well known. What’s more, it is

an Australian based company, so compare with Lola and Lexi, we will have more options

in the American markets.

Overall, our advantage is providing different styles of shoes with different sizes

and width. Our quality is good. Price point is reasonable. Styles are more fashionable.

There three factors can really make us has a position in the market targeting women with

big feet.

!!!


Competitive Analysis Matrix:

!

Our Business: Lola and Lexi

Nordstrom Zappos Shoes of Prey

Product/Service Shoes with size from 5-16 and wisth from 4A-4E

Department store: apparel, shoes, handbags, accessories

Online website like a department store

Handmade shoes

Price Range $100-$400 $25-$1000 $40-$635 $139-$289

Quality Good Moderate-Superior

Moderate-Superior

Moderate

Unique Features Selling wide range of different styles, diifferent sizes, and different width shoes

Selling over size 10, Designer Shoes

Selling different shoes, sizes 5-17.5

Handmade shoes, design your own shoes

Distribution System

Store and E-Commerce

Store and E-Commerce

E-Commerce E-Commerce

Marketing/Advertising

Buzz/WOM/Social Media



WOM/Social Media

Geographic Location

USA USA USA Australia

Strengths Average price with good quality, all the shoes styles have different width to fit women

Selling wide range of echoes including big size for designer shoes; Excellent social media

Selling wide range of shoes like Nordstrom with designer shoes; Well-known in the market

Design your own shoes, can choose style, color, material and heel heights

Weakness Should make effort on social media; New store with little recognition

Too expensive for most people; A lot of sizes are unavailable

Price are bit higher; A lot of sizes are unavailable

Abroad;No boutique


Products and Services

At Lola and Lexi we will offer four styles of shoes, all in which they will be

manufactured with genuine leather. All styles will be available in all the sizes to always meet the

needs of our customers.

The four styles we specialize in are:

1. Heels - available in courthouse, low heeled, and sandal style. The classic styles like the

courthouse pumps will be a year round product. The textile and color will change depending

on the season.

2. Boots - certain styles will become seasonal. The motor boot and ankle boots will be a

speciality.

3. Flats - a practical and casual shoe available in neutral colors.

4. Sandals - comfortable shoe without losing its fashionable appeal; will alter base on seasonal

trends.

Lola and Lexi develops its products with a focus on quality, fast accessible fashion, and

the necessity of all stylistic individuals in mind. Our products are unique because we are

targeting women that want luxurious shoes that are fashionable and practical, but are often faced

with the dilemma that the shoes are too tight or a size large enough for their irregular feet are not

available. At Lola and Lexi, not only will women find appealing shoes but also those that will

nicely fit to their feet. Our customers will be assisted by knowledgeable sales representatives that

will measure their feet to get just the right shoe size. It will be our speciality to make our

customers feel comfortable and all their needs will be closely paid attention to. We will offer

complimentary lemonade and shortbread cookies to set an atmosphere to our customers of


hospitality. The Lola and Lexi Collection has been carefully crafted, handmade in California

implementing comfort features, special design, intricate details, and the use of luxurious leather

all Made in America. It is Lola and Lexi’s mission to make all women look and feel great at their

feet.

!!!!!!!!!!!!!!!!!!

FALL/WINTER COLLECTION!PRODUCT LINE SHEET

‘Kerry’ Court Pump!Genuine Leather/Suede!FW14221!Size: 5-16!Width: 4A-4E!Wholesale Price: $159!Retail Price: $265

‘Minti’ Short Heel Pump!Genuine Leather!FW14222!Size: 5-16!Width: 4A-4E!Wholesale Price: $141!Retail Price: $235

‘Naria’ High Heel Sandal!Genuine Leather!FW14223!Size: 5-16!Width: 4A-4E!Wholesale Price: $159!Retail Price: $265


!!!!!!!!!!!!!!!!!!!!!!


‘Ramona’ Soft Slipper!Genuine Leather!FW14224!Size: 5-16!Width: 4A-4E!Wholesale Price: $117!Retail Price: $195

‘Tillie’ Lattice Flat!Genuine Suede Leather and Mesh!FW14225!Size: 5-16!Width: 4A-4E!Wholesale Price: $105!Retail Price: $175

‘Terri’ Flat!Genuine Leather!FW14226!Size: 5-16!Width: 4A-4E!Wholesale Price: $87!Retail Price: $145

‘Tammy’ Flat Sandal!Genuine Leather!FW14232!Size: 5-16!Width: 4A-4E!Wholesale Price: $72!Retail Price $120


!!!!!!!!!!!!!!!!!!!!!!


‘Brigham’ Moto Boot!Genuine Leather!FW14231!Size: 5-16!Width: 4A-4E!Wholesale Price: $210!Retail Price: $350

‘Harlow’ Slingback Bootie!Genuine Leather!FW14230!Size: 5-16!Width: 4A-4E!Wholesale Price: $195!Retail Price: $325

‘Rachel’ Slingback Peep !Toe Bootie!Genuine Leather!FW14227!Size: 5-16!Width: 4A-4E!Wholesale Price: $141!Retail Price: $235

‘Reina’ Slingback High Heel!Genuine Suede Leather!FW14228!Size: 5-16!Width: 4A-4E!Wholesale Price: $165!Retail Price: $275

‘Everly’ Fringe Bootie!Genuine Leather!FW14229!Size: 5-16!Width: 4A-4E!Wholesale Price: $177!Retail Price: $295


Pricing and Distribution

Lola and Lexi’s pricing strategy will be premium pricing. The current marketplace

doesn’t currently offer the products and service that the company will hold. All of our products

are made of the finest leathers made in the United States and we will work with the greatest

shoemakers in the industry. Customers American pride want to support businesses that are all

based in the country. With that said, the prices of our products reflect these standards. All Lola

and Lexi products will be sold at retail price 40% higher than the wholesale price. It’s crucial that

the company makes profit from the products in order for it to exist.

Our tentative sales representatives are out sales tactic. They will be hired to pay close

attention to the customers’ wants and needs in order to provide them with the best product. It is

in our policy that our customers are give the best experience. Also, given that the customer is

measured to their size, but after purchasing didn’t feel sure of the product, a return can be made

but will only receive store credit. On the other hand, our website orders will include free

shipping and returns. Our website will include a downloadable guide to measure their feet at

home in order to purchase the right size and fit, but when the product arrives and the fit isn’t, a

free return with full refund will be given.

For the early stages, Lola and Lexi will only manufacture for the one store location and

online web orders. It does look into the future to gain accounts by department stores such as

Nordstrom and Bloomingdales. All online shipments will be made from within the flagship store.

!!!


Operations Plan

After doing some research on many manufactures that are based out of the United States,

we wanted to find someone who had ten plus years of experience and handcrafted shoes

with a passion. We wanted Lola and Lexi to have the best quality shoes so that the

product itself did all the talking and brought in all their customers. We stumbled across a

manufacture that was based out of Lake Michigan in Wisconsin that was called Allen

Edmonds. This company had been around since 1922, and knew all they needed to know

about handcrafting a good quality shoe that would last a lifetime.

This company, Allen Edmonds, manufactures their own shoes since they also

have their own retail space in Port Washington, Wisconsin. Allen Edmonds provides

handcrafted shoes that are small, narrow, wide and everything in between. This

manufacture does not make “gut” sizes (9-12 medium) like other competitive shoe

companies do because they believe in handcrafting a shoes in varying sizes to fit the

customer needs (AllenEdmonds.com, 2014). Lola and Lexi believe that proper fit is

important for durability and comfort along with foot and back health. Allen Edmonds

specializes in men’s dress shoes and was willing to extend the little knowledge needed

(since they knew all about handcrafting a shoe) to help Lola and Lexi bring their store to

life. They knew how passionate they were in target the need of having well fitted shoes

for women, so they agreed to manufacture their shoe design.

The facility itself is located in Port Washington, Wisconsin and is currently the

only factory Allen Edmonds has at this time. Equipment needed varies depending on the


type of shoe you are handcrafting. Most commonly these are the equipment needed to

construct a shoe (AllenEdmonds.com, 2014):

• Metal dies

• Hides

• Sewing machines (single/double needle)

• Eyehole punchers (lace-up shoes)

• Insole die cutters

• Plyrib machines

• Lasts (used to form the shape of the shoe)

• Heat/stretch machines

• Lasting tools (used to stretch the upper around the last)

• Goodyear welting machines

• Sanding machines

• Waxing wheels

With all this equipment needed, you know your product is touched by all hands that work

in this manufacture to ensure a comfortable fit. In 2003, Allen Edmonds invested 1.1% of

the sales to refitting their factory and hopes to save 5% on the cost to produce each shoe

(AllenEdmonds.com, 2013). As far as labor needed, the factory has replaced assembly

lines with teams of people working in groups where each employee does several different

jobs. This new system helped improve the budget for the factory, reduced overtime, and

made it easier for when employees were absent.


After the material is sourced, it is cut by hand using sharp metal dies. Following is

when the hides are cut and marked to give sewers a visual guide for sewing the pieces

together. Then the material used is skived at the edges to reduce material bulk and

thickness. Once the material goes through these processes it is them moves up to the

upper sewing room to be sewn together. Next is the insole die cut process, to where each

sole is cut into its specific size depending on width and length. The Lola And Lexi brand

logo is then stamped on to inside of the insoles. The lasts are then inputted into the shoe

along with heat and water so it shapes and molds the shaping of the shoe. The shoes are

then protected with plastic wrap and the Goodyear welting is applied. A groove is cut into

the sole where the stitching will be sewn, and then the heel depending on the shoe style is

applied. The sole is then sanded down and burnished to the exact color and this action

usually takes three coats to ensure good coloration. The final brush is applied to the

fished product and sits for twenty-for hours with the lasting to ensure they take good

shape. After sitting for twenty-four hours the last is removes and a number of quality

inspections are done to make sure the shoe looks presentable to sell. The shoes are then

stuffed and boxed and ready to be shipped out to Lola and Lexi.

When it came down to how much product Lola and lexi wanted to produce, they

had to think smart and be knowledgeable to where they do not produce too much or too

little. The quantity had to be just right for them since they were new business owners and

wanted to demonstrate all types of shoes they would carry. So they decided to produce

thirty-six pairs per twelve styles and within those twelve styles each size will contain six

same size shoes. In total they will have four hundred and thirty-two pairs produced by


Allen Edmonds manufacture and will split that in half so that two hundred and sixteen

will be for the store stock and the other half will be for their e-commerce stock. In order

to determine their number for their next order, Lola and Lexi will need to keep track of

what shoes size is in most demand and order more in that size. If the store does not have

your size, no need to worry, we could order them for you and offer shipping free of

charge to have them here within three business days. Lola and Lexi want to ensure that

the shoe you purchase from them is exactly what you need in order to have that

comfortable fit.

!!!!!!!!!!!!!!


Design and Development

Critical Risk and Problems

In every new start to opening a business there is always that what if factor that

comes to mind and risks or problems that your company might stumble upon. At Lola

and Lexi there is peer positivity with every action taken, but if a problem or critical risks

occur then there is no doubt in mind that they will find a solution and fix whatever that

need fixing. Some risks that Lola and Lexi take as new business owners are the fact that

they may run out of money or mismanage their money in the same way. Time

commitment is key when owning your own business because Lola and Lexi will be the

ones doing all the work for the first year. It may not be the work they imagined

themselves doing but that comes with having a new company. Some of the common risks

to occur when operating your own business is manufacturing risk, marketing risk,

competitors cut their price, the industry growth rate drops, design or manufacturing costs

exceed your projection, your sales projection is not achieved, competitors up the ante by

releasing a new, better product, or public opinion of your product or service changes.

Every business every opened always has their down falls but its how you handle this

situation and grow from it is what reflects your success in your business plan. Its always

a good idea to plan ahead and make that assumption of “What If” something bad were to

happen how will the company bounce back. There is also a possibility that you may get a

customer that is not satisfied with the product she purchased. Lola and Lexi would gladly

accept the return and see what they are able to do in order to meet the customer needs and

wants.


Product Improvement and New Products

Every season we will have inner changing style of our shoes that will come in the

color pallet of that season. The style of the shoe will essentially stay the same but the

material and color will change. As we continue to grow we plan on adding different style

of shoes with every new season. Adding embellishments, and different kinds of hardware

will makes its debut with the Lola and Lexi brand once we establish our loyal customers.

At Lola and Lexi we want to keep things simple but very fashion forward so that the

shoes purchased can be used more than a handful of times. Lola and Lexi would like to

offer a special shoe repair program that allows the customer to bring in there Lola and

Lexi worn-down shoe and have it repaired to bring it back to life. For example the

customer would give us they worn in shoes and we would send it to our manufacture

where they will strip the sole to add a new refreshing one. Depending on how damaged

the material is we would decide whether or not to fix it or replace it. So essentially Lola

and Lexi would bring life back into your shoe that is already broken into for a small cost

of half of what you originally paid for the shoe. As Lexi and Lola continue to grow their

plans are to open up and sell to other parties to get their brand known and bring in more

revenue for the company.

Location of business and cost:

Lexi and Lola retail location will be located in Palo Alto, California. The retail

space is by other stores like Apple and nice restaurants. There are a lot of boutiques so

the customer traffic will be good for the Lola and Lexi retail shop. As we crunch numbers

together and get an overview of what the cost would be to be in a location like this, we


are looking at the retail space alone + utilities would be an average of $175,000/year

(Loopnet.com, Listing #18732820, 2014). Palo Alto is a very wealthy community, 58%

of residents make over $200,000/year (Loopnet.com, Listing #18732820, 2014) and with

the location being in a busy area where people come to shop at boutiques, go to the movie

theater or just hand out a the restaurants there, we will defiantly have a good range of foot

traffic and customer base as we establish our residency there.

Laws and Regulations:

The laws and regulation for a private label are as followed (The U.S. Small Business

Administration, sba.gov):

• Federal Trade Commission Act

• Country of Origin and Manufacturer identification act- include the products

country of origin on label

• Trust in Advertising law

• Price Fixing- higher prices for the consumer and higher profit for the companies

• Federal Anti-Counterfeiting

• Trademark counterfeiting Act- makes use of a counterfeited trademark a federal

offense

• Textile Fiber Identification Act

• Advertising Law

• Employment and labor Law

• Online Business Law: of privacy, security, copyright, and taxation.


As a brand it is important to protect the company and the customers as part of the

company promise. Lola and Lexi may not encounter difficulties in their first year of

opening but you never know, something drastic can happen and customer or the brand be

projected buy all these laws and regulations. The same issue may occur with the

manufacture they are working with. It is up to them (the manufacture) to be aware of all

the laws and regulations in having a manufacture. Allen Edmonds has been around for

years so it’s a positive that this manufacture in in knowledge of laws and regulation.

The laws and regulations for a manufacture are as followed (The U.S. Small Business

Administration, sba.gov):

• American with Disability Act

• Equal Employment Opportunity Law

• Finance Law: ensure fair competition; protects the financial interests of

companies and individual investors

• Child labor law

• Employment and labor Law: benefits and wages to discrimination and harassment

!!!!!!!


Management Team:

Partners: Lola and Lexi

Owners: Lola and Lexi

Social Media/E-commerce Directors: Lola and Lexi

Sale Associate: Natalie

Sales Associate: Allison

Intern: Vanessa (non paid)

With being a first timer in owning a business, Lola and Lexi are looked upon to

do the majority of the work within their company. It is their first year, so they are the

once basically running the show as far as managing the e-commerce site, designing,

managing their social media accounts to attract their new and retuning customers and

handle all the shipping and handling. As Lola and Lexi continue to grow, they plan on

adding more people to their team so that they can focus on their main priorities of owning

a business. The first year wont be easy but is never impossible. Planning ahead and

having a great mind set towards positivity, there is no doubt that Lola and Lexi will

become an huge hit for the market they are targeting too.

!!!!!!


Exit Strategies

We have agreed to implicate a buy out plan in the event that any of the founding members

wish at any time to cash in the percentage of the business and leave the company.

There are two options for the buy out plan

1. If at any time one of the joined owners wishes to leave the company, she has the

right to sell her business to another person (family members or employees).

2. The other owner can buy the business from the owner who will leave and the pay

out plan of buying out the percentage of the owner who wishes to leave can be

finished within 2 years.

!!!!!!!!!!!!!


Financial Plan

Based on the chart below, Lola and Lexi will need to borrow an additional

$100,000 for the startup of the business. Our goal within the first three years of

operations is to see a minimum of 15%-25% profit that will be reinvested into the

company to be used for the purpose of expansion into other areas. As well as, adding 5

new shoes designs every six months.

!Rough Budget of Start-Up and Operating Expenses

Category Annual Expenses $ Income $

Staffing (payroll or wages) $80,170

Payroll Taxes $25,610

Rent $167,346

Utilities (fuel, electric, water, telephone/Internet)

$10,500

POS System $8,000

POS System Maintenance $500

Marketing/Advertising $7,000

Loan Repayment (per year, paid over 5 years)

$24,000

Stock Startup $27,000

Miscellaneous $2,000


!Second Year Financial Forecast

Online Sales $93,000

In-Store Sales $93,000

Gross Sales $282,000

Total All Expenses $352,126

Net Profit $22,874




Rent $167,346


$10,500

POS System $8,000




$24,000



Third Year Financial Forecast






Net Profit $35,000




Rent $167,346


$10,500

POS System $8,000




$24,000



!!!!!!!!!!!!!!






Net Profit $45,748


Marketing Plan

For the beginning stages of launching the company it will rely on word of mouth. Lola

and Lexi throughout their years in corporate jobs have met a lot of people through networking.

Both partners will reconnect with their contacts and inform them about their new venture in

hopes that the word will be spread. Lola and Lexi are social media gurus, so to their friends and

families they both will post a graphic that lets them know the company is coming soon. Once the

location of the store is secured a new graphic that invites them to their store opening will be

posted.

The welcome the company, a launch party will be held as “opening day”. An invitation

flyer will be generated to spread the word. At the shopping location of the store, those that were

hired to be sales representatives will be posted on the streets prior to their regular work duties

and will hand out a flyer that was made to invite the general public and in hopes to create an

excitement. It is very important that the representatives handing out the flyers are being given to

the right people. Given that these employees will

come with previous experience in sales and are

knowledgeable about the target market, potential

customers will be easily identifiable. At this launch

party we will offer hors d’oeuvres and champagne.

We will also create a section for a Photo Booth

style activity to get attendees to post on their social

media to be able to reach a broader audience

without it costing us. Those that attend will also be


given the opportunity to win a pair of Lola and Lexi shoes.

To be up to date with the competitive market our E-Commerce website will launch at the

same time. As part of our marketing mix we will also create a lifestyle blog that will be present

on our website. On there the founders of Lola and Lexi. will create posts that connect to the

shoes, telling a story while also engaging the company’s followers. Lola and Lexi will also be

active users on Instagram and

Pinterest each with original

content to be able to reach

the different social media

users. What is great about the

social media platforms is that

it doesn’t have a cost

attached to it and a bigger

audience can be reached.

This gives the ability for the

company to put its efforts in creating great products and an E-Commerce site that is practical and

easily accessible. Also, Lola and Lexi will throughout the year will create giveaway contests that

requires followers to repost an image by the company in order to be entered. The spread of the

image is a marketing tool that gives the company exposure without doing the actual work. Given

that this will be a local store, Lola and Lexi will work to make collaborative events with other

local businesses that tie with the company’s mission to bring both consumers together. All of

these are efforts in marketing to the public that results in customer loyalty.


References

(2014, June 15). . Retrieved June 29, 2014, from http://www.loopnet.com/xNet/MainSite/Listing/

Profile/ListingDemographics.aspx?

LID=18732820&PgCxtGuid=f711fd93-6274-46a1-9c1a-1e801a1f7171&PgCxtFLKey=&PgCxt

CurFLKey=ProfileSE&PgCxtDir=Down

American FactFinder - Results . (2012, January 1). American FactFinder - Results . Retrieved

June 29, 2014, from http://factfinder2.census.gov/faces/tableservices/jsf/pages/

productview.xhtml?src=bkmk

Balavage, C. (2014, May 31). God Save My Shoes | Film Review. Frost Magazine. Retrieved

June 29, 2014, from http://www.frostmagazine.com/2012/05/god-save-my-shoes-film-review/

ZIP Code Look Up. (n.d.). PRIZM > Market Segmentation Research, Tools, Market Segment

Research,. Retrieved June 29, 2014, from http://www.claritas.com/MyBestSegments/Default.jsp?

ID=20&pageName=ZIP%2BCode%2BLookup&menuOption=ziplookup#

!!

http://www.loopnet.com/xNet/MainSite/Listing/

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

Date post:	27-Jul-2015
Category:	Documents
Upload:	lauren-thompson
View:	135 times
Download:	0 times

Lola & Lexi Business Plan

Documents