Small Retail Stores the Concept Term Paper

Excerpt from Term Paper :

As a small location, the price per feet steadily the same at $45.00, our costs can go down. We don't really need an extravagant space in the first year of operations.

4) Extensive travel will be required during the first year in order to setup the connections in Brazil and establish the suppliers, as well as the designers with whom the company will be working.

5) the Internet will be required so as to best communicate with the suppliers in Brazil, as well as to track progress from advertising over the Internet.

6) the advertising budget will be high only during the first year, given one of the short-term objectives we have proposed: building the company brand. This sum is likely to cover the marketing campaigns we are proposing.

7) Estimated.

8) There is a 7.5% tax on corporate income in New York City.

The loss can be explained through the fact that this is the first operational year when the company will be forced to invest in things such as extensive travel and a serious advertising campaign. It is very likely that after the first year, many of the expenses can be significantly reduced, while the company operating revenues will also gradually increase, due to more people learning about the products and services that the company is offering.

Start Up Cost

Legal/Accounting: $1,500.00


POS System: $1,688.00

Computer in the store: $800

Telephone: $40.00

Hangers: $230.00

Security System (clothing sensors): $1,500.00

Bags/Tissue: $400.00

Couch/Chairs: $750.00

Decorating: $800.00

Total Equipment Cost: $7,708.00


The store's advertising campaign will be a successful mixture of advertising in newspapers and magazines and advertising online.


Part of the advertising budget will be used to create a business/store website, which will also provide the buy online facility. Given our targeted group of consumers, we are to believe that these are active individuals spending much of their time at work or at home in front of a computer or a laptop. We will be outsourcing the website creation to one of the lower costs countries, such as India or Eastern Europe, where the cost of creating a new website, with all the mentioned facilities, including online payment, is not likely to surpass $2,000.00.

Additionally, a local SEO will be hired to promote the store website with different search engines and to optimize its presence in Google searches for key words such as swimwear, swimsuit, summer, store, pool etc. All it services will be outsourced, as mentioned.

Part of the advertising budget will be used for online advertising. The most useful sites where the store banner can be placed are fashion or social magazines, such as Cosmopolitan. The scenario would encourage us to believe that our targeted client will take a break at work to look over the new online number of Cosmopolitan and will see our banner. Upon clicking it, our potential client will be taken to the company store website, where she will be able to browse through our products and decide on whether to make a visit to the tore or not. We can also offer online consultancy, but it is likely that she will choose to come to the store in order to be able to browse more carefully through the products and actually benefit form a face-to-face conversation with our consultant.

Newspapers and Magazines

We plan to advertise in magazines whose profile we have already previously identified as 'social' magazines. These magazines, like Cosmopolitan or Vogue, are an excellent opportunity for exposure for our business, since this is the type of magazine that our targeted potential client is likely to look through.

Participating to fashion fairs

This is a good opportunity for our business to meet potential clients, as well as potential suppliers from the U.S. And from the international market. Since presence to this type of events is generally quite expensive, we are going to be participating only in one annual such event. This should most likely be either in Brazil (where extensive travel will be done during the first year of activity) or around New York, so as to save additional travel expenses.

Promotion event in Brazil

This event can be held once or twice a year in Brazil and would provide an opportunity for the local producers and designers to present their new ideas. The company will benefit from this because it would thus be offered a possibility to have an initial selection of potential collaborators and designers who could produce the next lines of swimwear.


Our pricing strategy is important, because the price we offer shall cover both the cost of the product itself (the swimwear), as well as the cost of the consultancy. This will be included in the former and will amount to 15%. As previously shown, the price of a swimwear will be $60, but we will have different pricing campaigns to encourage the development of a network of clients, as well as to increase the degree of customer retention.

The pricing policy is not determined by direct competition, given the fact that, as we have previously seen, this is a unique idea in New York. Depending on the volume of sales during the first year, the pricing policy may vary in time. Additionally, given the cooperation with Brazilian designers and producers, we may segment the pricing to promote a certain designer or a certain line of products.

Arial View of Store Layout


The store will accept any recognized form of payment, including here payment with all different types of credit card (the performing POS we will be purchasing should ensure that), check or even wire bank transfer for larger orders. Pay Pal can be accepted for the online orders, but this will be integrated in the online payment application that will be installed on the store website. The store will itself use wire transfer for all payments to suppliers in Brazil, but will negotiate a three shipment total for each of the payments it will make.

The store will offer discounts based on regular shopping in our store, as well as for bringing new customers. The former can be demonstrated by simply showing a receipt from a previous purchase and is rewarded with an exponential discount, starting at 10%. For each previous purchase, the discount increases with 10%, so that the tenth piece purchased in our store will be free. If several pieces are purchased, the discount applies to one piece, the cheapest of the set. Employees get 15% off on all merchandise in the store, after 3 months of working with our company.

All products can be returned, provided that the client shows the purchase receipt and provides a reason for returning the merchandise (the return is not conditioned by the reason provided, but it will help us see what has gone wrong).

The store will operate according to the following schedule:

Closed on Wednesdays

Mondays and Tuesdays: 12-8

Thu - Sun: 10-8

We assume that our clients will be more inclined to shop during the weekend, so this is why our store will be opened longer hours during that time.


We will initially hire a single assistant in the shop, because the consultants will be paid as a percentage of the cost of goods sold (15%, as previously mentioned). The assistant will be paid $30,000 a year, to which we can also add Holiday bonuses and the discount for purchasing things in the store. The assistant's job will be to welcome clients into the store, perform payment and wrapping duties, as well as post-sale activities, such as encouraging the shopper to visit us again. All purchases and travel to Brazil for contact with the new designers and producers will be done by me. Regular monthly meetings with the assistant will ensure that I am aware of the most important things going on at the store, of how the business is going, what clients have returned etc. Twice a month, I will personally sit in the store and chat with the clients walk in, partially taking the role of the assistant.

The interview with the potential employee will aim at ensuring the honesty and integrity of the assistant rather than her previous experience or studies. As mentioned, he or she will be solely in charge of managing the store in my absence, working with company money and operating the store. It is essential that the individual is someone to be trusted.

As an owner and manager, I will not be receiving a salary, but a participation on profits. During the first year, this is obviously not possible, but the subsequent years will certainly cover the loss suffered in the beginning.


1. New York City, New York Statistics and Demographics. U.S. Census 2000. On the Internet at retrieved on December 9, 2007

2. What New Yorkers Earn. On the Internet at retrieved on December 9, 2007

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