Sample Business Plan: FabricWorth Boutique Business Plan

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FabricWorth Boutique® Executive Summary

FabricWorth Boutique® (FB) is a leading US retail clothes outlet that intends to set up retail outlets in Shanghai, China and will target working class, fashion conscious and middle-aged women. The outlets will be located in major districts, Shanghai, particularly those located near popular tourist destination and rich holiday and getaway areas. Given that FabricWorth Boutique is an established firm with many retail outlets across the United States; it will use its expansive resources to open up a number of retail establishments across Shanghai (Abrahamson, and Janet, 2007). Additionally, FabricWorth Boutique has projected growth and plans for expansion that will enable it open up more outlets in Shanghai and other surrounding districts across other districts within Shanghai (Cateora et al 2009). FabricWorth Boutique intends to develop a reputable brand in Shanghai that will enable it attain a leading and commanding role and as well curve a niche in the ever-growing Shanghai market. However, the FabricWorth Boutique is faced with the problem of addressing the factors that influence business environment in Shanghai. This includes the legal, cultural, and geographic factors that will influence operational activities for the company (Abrahamson, and Janet, 2007).

Business in Shanghai

Sociocultural Factors

The Chinese market is still influenced by sociocultural forces that emanate from the national culture or the social structure. China is known for its strong cultural heritage and therefore, there are certain norms and codes of conduct that are considered important and approved within the society. The Social Structure in Shanghai determines the organization of relationships among groups and individuals in the society. Therefore, FabricWorth intends to factor all the factors and respond to differences and changes in the national culture and social structure of the Chinese. As such, the Company will adjust its business activities to suit the needs of the Chinese.

Political and Legal Forces

China is a stable country having laws and regulations that shape business operations and activities. In terms of legal regulations, the associated respective laws and regulations with respect to the particular type of business entity govern the formation, management, and organization of many business activities in Shanghai, China. Examples of these laws governing the establishment of businesses include general law, and special law. These laws are further subdivided into different categories such as labor laws, company laws, foreign trade laws, tax laws, foreign investment laws (Cateora et al 2009). Since FabricWorth Boutique is an international firm, foreign trade laws and labor laws will affect its operational activities. Labor laws in China cover a range of activities such as promotion of employment, working hours, rest, leaves, wage rates, labor disputes, labor, social insurance and welfare, and other provisions (Erh and Johnston 2007).

Geographical Location and Supply Chain

The decision to locate retails outlets in Shanghai is to ensure that nearness to consumer markets is achieved. The Chinese economy is growing steadily and so is the demand and hence, majority of supply chain activities have been moved to these regions. Supply chain activities are influenced by transportation costs, material costs, and demand location.

Labor cost

This is major driving factor that makes many firms to relocate their business activities to low cost countries. China is among the most established industrial and manufacturing countries and is known for low labor costs. The low labor costs are because of low competitive advantages and abundant labor resources, which enables it to expand its production capacity (Dunfee, and Warren, 2008). The low labor cost is responsible for creating a substantial cost advantage over products produced in other regions.

Nevertheless, the labor industry is characterized by increased bidding for workers that has led to increased wages. The minimum wages in major provinces have increased upwards of 20% leading companies to shift their production activities to inland regions to cut down on costs (Dunfee, and Warren, 2008). This has an effect of disrupting supply chain logistics and eventually leading to high prizes and complexity in supply chain management. In such a situation, FabricWorth will try as much as possible to eliminate intermediaries from the supply chain to ensure that it cushions itself from changes in operating expenses and labor costs.

The Company Overview

FabricWorth Boutique (FB) is a limited liability that has well-established retails outlets across major cities in the United States. It intends to set up new ventures in Shanghai with a set mission and objective of ensuring that modern women in Shanghai do not wear clothing would otherwise be worn by past generations. FB does not presently have any physical presence in China but has already identified ideal locations in Shanghai and buildings for the purpose. It has a partnership with Wu-Yung Building and Construction Company that has enabled it to secure a 20-year lease with the HuangPo Towers management. The retail shops will be 5000 sq. ft. priced at $23 per ft. With a $400 million in capital, FB plans to renovate and furnish the premises and stock the needed merchandise and other costs involved in the setting up of the business.

FB key assets lie in management as well as the supreme product quality that characterize the brand and an untapped target market both in core city Shanghai and other districts across the region. Other keys to success include ideal location in Shanghai high-shopping area, building good relationships with vendors, and the provision of outstanding customer service.


To provide middle-aged and fashion conscious women with an approachable business environment and comfort

Showcase well-constructed and quality fashions from leading and cutting-edge fashion designers

Supply a stylish and high-end clothing and fashion accessories

Generate buzz and sales from leading top-notch services

Market Analysis and Strategy

The Chinese clothing and apparel industry reported upwards of $5 trillion in annual sales in the year 2009, and over 500 million working class and fashion conscious middle-aged women in the China. In Shanghai alone, the median annual income for working class women is $30,000, and FabricWorth Boutique business strategy is intends to tap into the local clientele at the outset. FB strategy is based on marketing, beginning with the launch fair and a campaign to promote the brand in the local media and the internet. To keep down costs, the marketing budget will be kept below 5% of FB annual sales. Business executives from the boutique's headquarters in the US will undertake FB's management whereas local sales representatives in Shanghai will do operational activities (Mark, and Stark, 2004).

Financial Plan and Funding

FB will raise its revenues from apparel sales revenues and its initial year statement of income shows anticipates over 40% profit margins with over $100 million in annual revenues, $50,000 in monthly net income. The estimated break-even point is about $150,000. The initial year sales are estimated at $40 million and expected to surpass $80 million by the end of two years. For a successful launch, FB requires $500,000 of which the company has already raised from its resources in US outlets.

Products and/or Services

FabricWorth and working class middle-aged women are natural mates and therefore, fashion forms part a larger part of their daily lives. FabricWorth aims to study and closely follow the Chinese market in addition to the generational market trends and purchasing behaviors among FabricWorth target clientele. In essence, FB will tailor its products and services to specifically address the market needs and requirements. Above all, the expansive range of colors, dressing styles, and even clothing fits will be tailored based on the needs, tastes, and preferences of the modern Shanghai woman.

FabricWorth Boutique will concentrate on selling highly recognized brands and women accessories from selected fashion designers. The products and services include but are not limited to designer perfumes, casual wear, wedding outfits, and matching accessories such as jewelry. Additionally, the boutique will offer specialized services to particular individuals who love exclusivity and uniqueness. Products and Services from the boutique will be supplied as per the prevailing fashion trends and customer's preferences. Quality assurance and flexible pricing will be the driving force of the business.

Features and benefits

Provision of sleek, stylish, and high quality products and services is the main mission of FabricWorth Boutique. This ensures that customer satisfaction is achieved through customized and personalized exclusive services. Moreover, customers will benefit from free fashion advice from our highly skilled and experienced staff members. The boutique hopes to be a household name in the Chinese fashion industry.

Industry Analysis

Shanghai is among the leading business and financial centers in China and aims to be one of the leading international tourism destinations in the world. In 2010, revenues obtained from tourist related activities amounted to 306 billion Yuan ($46.8 billion) representing a 30 percent increase over sales in the 2009 period (Yingying c2011). It is estimated that industry sales will hit the 500 billion in annual sales by the 2015. This will go in line with plans of attracting 240 million domestic tourists and another ten million from foreign tourists by the year 2015. This will create an additional 300,000 jobs and contribute to the country's GDP. These statistics favor FB's expansion ventures (Yingying c2011).

With exceptional infrastructural facilities, conducting business in Shanghai will be boosted by the expansive facilities. The region is well developed in terms of financial centers, banking systems, communication infrastructure and transport systems (Erh and Johnston 2007).


Arguably, the level of competition in the fashion industry is highly volatile and therefore, FabricWorth Boutique is prepared to counter challenges arising from the competition. The following are some of the competitors that our boutique is likely to face.

De Kliek Style Studio Boutique which concentrates in the sale of women jewelry and specifically targets the young and trendy class of women

Wu Yiu Selections which targets working class and fashion conscious women irrespective of their ages or market category

Lee Xia Fashions, which specializes in the homemade and tailored clothing wear. Additionally, Lee Xia Fashions sells curio and souvenir items (Dunfee, and Warren, 2008).

Competitive advantage

Our main advantage is the lack of a boutique in the area that offers products and services of our caliber. Additionally, majority of workers in our boutique are highly experienced given that they have been in the industry for long periods. Our products are also of outstanding quality. They not only understand how to predict the latest trends in the market but also the best designers in the market. Furthermore, our boutique offers specialized and exclusive services to clienteles who love class. The exclusivity and quality of our products and services in addition to our solid relationship with our designers ensure that other new entrants will find it difficult to enter the market.

Market Analysis

Target Clientele

FabricWorth Boutique is a customer oriented business entity that targets working class middle-age women but with particular interest to the fashion conscious category. Nonetheless, our product and services cannot escape the attention of young and stylish generations based on their need for exclusivity. Arguably, any woman above the age of eighteen in Shanghai values exclusivity, uniqueness and quality and therefore FabricWorth Boutique will do anything within their capacity to utilize this capacity (Dunfee, and Warren, 2008).

Market Size

Shanghai is a huge and potential market for setting up FabricWorth Boutique. It is home to many middle and high-class women in addition to being a prominent international tourist destination. If harnessed properly, our Boutique is likely to generate millions of revenue. Geographically, Shanghai has international financial centers, leading international airports, famous beaches, which are famous for international business meetings, sporting events and women conferences and thereby supplying a continuous flow of customers into the business.

Given the effects of globalization and technological advancements, market trends in Shanghai fashion industry have changed tremendously and as such, the tastes and preferences of customers keep on increasing (Horesh 2009). However, majority of clients in the region are deeply engrained to the Chinese culture and therefore, FabricWorth needs to invest in research to study clearly the needs of this market. Clientele in the region are hungry of exclusivity and uniqueness, factors that our boutique aims to utilize to the maximum. Shanghai's economic situation is also growing given that it is a leading financial hub and tourist destination. This factor makes it possible for the fashion industry to industry to thrive thereby favoring business plans from FB (Kotler et al 2009).

An overview of the Boutiques SWOT analysis shows that some of our strengths include uniqueness in service delivery, clear understanding of the industry, qualified staff, and ideal location. The opportunities include the ever-expanding market and clientele. However, the boutique faces some threats and weaknesses, which include high competition and the uncertainty of the market in Shanghai due to fluctuating interest rates and economic depression (Horesh 2009).

Marketing Strategy

Price. Price for products and services will depend on the prevailing market prices and the type and quality of product or service. As a start-up business, FB will set up competitive prices that are slightly lower than the prices of other competing firms (Kotler et al 2009).

Place. FabricWorth Boutiques will be strategically located in HuangPo Towers around Shanghai city. However, expansion activities will go to other districts within Shanghai.

Promotion. FB will use adverts, distribution channels, and the internet to promote its products.

Product. FabricWorth Boutique will concentrate on selling highly recognized brands and women accessories from selected fashion designers. The products and services include but are not limited to designer perfumes, casual wear, wedding outfits, and matching accessories such as jewelry.

Strategy & Implementation

FabricWorth Boutique's Mission is to provide unique and exceptional products and services to our clients. Quality, sleek and stylish merchandise are among the top factors in the list that are expected to guarantee customers value for their money. New product development will be undertaken to ensure that the boutique maintains a competitive edge. The boutique aims to advertise its products and services through the internet as part of sustainability measures for future expansion.

The Boutique boasts of excellent Marketing Strategies coupled with rich experience from staff members. Moreover, the boutique will hire the leading PR Company to undertake advertising functions on behalf of our firm. This will be done with the total cost in mind and therefore all promotional activities will be undertaken by minimizing costs and maximizing revenue. Distributing and printing pamphlets and posters to enhance the boutique's promotional strategy will also utilize the power and influence of the print media (Honag, and Karison, 2009).


As a startup business, staff numbers are minimal and therefore Michael Rabok will assume the management and leadership of the boutique. Michael Rabok holds an MBA from Harvard School of Business, a fact that makes him suitable for managing the boutique business in Shanghai China. However, other members from the executive management of FabricWorth will assist him with managerial duties. Chia Xia will take over the marketing and sales activities for the boutique. Xia is a holder of an international honorary degree in Sales and Marketing from China International University. Additionally, he will oversee the public relations duties for the firm.

Sales promotion is an important aspect to any business and therefore FabricWorth Boutique plans to employ six part-time sales workers. They will be paid on a commission basis but highly performing salespersons will be given positions in the company.


FabricWorth business concept in Shanghai is an innovative and new boutique business concept in the China and the company hopes that the Chinese market will respond in according to the planned marketing objectives. As such, the FabricWorth boutique will be able to develop famous brand recognized by supply of quality fashion products and personalized service delivery that will see the Boutique penetrate into the Chinese market and obtain a commanding market share. Sales, management, and marketing strategies will be measured on a monthly basis with changes being implemented in accordance with the needs of the target market.

The revenue and profit generating capacity will be monitored closely and sales volume as well. The realization of projected targets give way to other expansion activities such as opening up new retail Boutiques. FabricWorth Boutique has been in the industry for long and understands that business ventures are subject to risks and uncertainties and hence, FB's ventures will are exempted from such risks (Mark, and Stark, 2004). The company will implement strategies that will enable it to overcome the challenges facing it.


This Business plan, and the projections contained herein are founded on the assumptions that the consumer spending patterns, demographics and the overall Shanghai economy will carry on with the current trend in the near future (Kotler et al 2009). Equally, it is anticipated that suppliers both the present and the future will carry on with their current or more inventories at the same prices.


Abrahamson, N. R. and Janet, X. A. (2007) "Canadian Companies Doing Business in China: Key Success Factors" Management International Review-JSTOR. 39 (4): 20-56

Cateora, P., R., Gilly, M. C, and Graham, J, L. 2009. International Marketing, Washington (DC): McGraw-Hill

Dunfee, W. T. and Warren, D. E. (2008). "Is Shangai Ethical? A Normative Analysis of Doing Business in China. Journal of Business Ethics-Springer. 32 (3): 191-204

Erh, D. and Johnston, T. (2007). Shanghai Business Industry. Hong Kong: Old China Hand Press.

Honag, B. and Karison, T. (2009). "Institutional Forces and the Written Business Plan". Journal of Management-Science Direct. 30 (1): 29-48

Horesh, N. 2009. Shanghai's Bund and Beyond. New Haven (NY): Yale University Press.

Kotler, P., Keller K.L., Brady, M., Goodman, M. and Hansen, T. 2009. Marketing Management, Upper Saddle River (N.J): Pearson Prentice Hall

Mark, C. and Stark, M. (2004) "What Do Investors Look For In A Business Plan: A Comparison of the Investment Criteria of Bankers, Venture Capitalists, and Business Angels". International Small Business Journal. 22 (3): 227-248

Yingying, S. c2011. Shanghai Hopes to become international Tourism Hub. [Internet], China Daily, Shanghai (CH). [Cited 2011 May 21]. Available from: