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Underwear Sore Business Plan for Starting your own Lingerie Line
Are you going to launch your own lingerie business? Before you do that, here are some important things you ought to keep in mind. First, you are heading into the right direction as lingerie business is one of the most profitable business niches to invest in.
Second, you’ll be facing severe competition as there are uncountable lingerie brands present worldwide and it won’t be an easy thing to outperform them. The only chance you can make your business succeed is when you meticulously plan it and carefully execute it. Preparing a business plan about how to start a lingerie shop business will help you a lot, so it’s something you must do at your first chance.
In order to help you prepare a comprehensive and effective business plan, we are providing below a sample underwear business plan of a lingerie startup, ‘Carol Lingerie Wear’.
Executive Summary
If you are thinking about starting a lingerie business but don’t know how to start a lingerie line, then just consult the following lingerie store business plan. It will not only help you start a lingerie boutique business plan but will also help you take important decisions required to make your venture a success.
2.1 The Business
Carol Lingerie Wear will be a privately held S corporation based in Orlando, Florida, comprising of a display center and a production facility. The business will provide a one-stop lingerie clothing service and will offer an assortment of products ranging from bras and panties to nightwear and hosiery.
2.2 Management
The business will be privately owned by Carol Anderson, a fashion designer from New York. With an experience spanning 10 years, Carol has served in various clothing companies including apparel giants like D&G.
In order to operate her venture and make it a success, Carol will be hiring an extensive team of employees including production workers, store assistants, accountants, etc. She herself will be working full time as manager, responsible for overseeing the business, sales, buying, as well as advertisement.
2.3 Customers
Carol Lingerie Wear will provide high-quality products to the local residential community as well as departmental stores. Our customers will be able to purchase our products via our online store and get them shipped at their doorstep, no matter if they are located in the US or any other place on the globe.
2.4 Target of the Company
Our target is to become the best lingerie company in Orlando by the end of the next two years, and achieve the following profit margin targets over the years to come.
Company Summary
3.1 Company Owner
Carol Lingerie Wear will be privately held by Carol Anderson, a fashion designer from New York. With an experience spanning 10 years, Carol has served in various clothing companies including apparel giants like D&G. Thanks to her extensive experience in the clothing industry, Carol knows how to start a lingerie business and make it a success using her sharp business acumen.
3.2 Why the Business is being started
Lingerie business is not only a niche where one can make immense profits but it’s also something Carol is passionate about. For the most part of her career, Carol has been associated with designing high-end, luxury lingerie products; so it’s something she loves and she does best. And doing so, her contacts will surely be of great use to her, helping her through every phase while she works on making her venture a success.
3.3 How the Business will be started
A well-thought-out business plan can do a great deal in helping you how to start undergarments business. So if you don’t know how to create your own underwear line, you can take help from this sample business plan or other similar plans available online.
For her business, Carol has made a comprehensive business plan detailing all aspects of his venture after consulting from business and marketing experts. For a startup, the company will be procuring two buildings, one of which will serve as a production facility while the other as a display center. Carol plans to purchase an existing production facility, which is located on the outskirts of the city and was previously used by a streetwear brand.
The display center, also the company’s main office, will be located in downtown so that it attracts as much traffic as possible. The company is currently in negotiations to procure a 2000 square feet shop on lease to serve as Carol Lingerie Wear’s main display center.
As per the staff is concerned, Carol will work full time as a manager, responsible for overseeing the business, sales, buying, as well as advertisement. She will be assisted by a small team tasked with different duties, as will be explained shortly. The startup requirements are given below:
The detailed startup requirements are as follows:
| Start-up Expenses | ||
| Legal | $55 300 | |
| Consultants | $0 | |
| Insurance | $32 750 | |
| Rent | $32 500 | |
| Research and Development | $32 750 | |
| Expensed Equipment | $32 750 | |
| Signs | $1 250 | |
| TOTAL START-UP EXPENSES | $187 300 | |
| Start-up Assets | $220 875 | |
| Cash Required | $332 500 | |
| Start-up Inventory | $32 625 | |
| Other Current Assets | $232 500 | |
| Long-term Assets | $235 000 | |
| TOTAL ASSETS | $121 875 | |
| Total Requirements | $245 000 | |
| START-UP FUNDING | ||
| START-UP FUNDING | $273 125 | |
| Start-up Expenses to Fund | $151 875 | |
| Start-up Assets to Fund | $123 000 | |
| TOTAL FUNDING REQUIRED | $0 | |
| Assets | $23 125 | |
| Non-cash Assets from Start-up | $18 750 | |
| Cash Requirements from Start-up | $0 | |
| Additional Cash Raised | $18 750 | |
| Cash Balance on Starting Date | $21 875 | |
| TOTAL ASSETS | $373 125 | |
| Liabilities and Capital | $0 | |
| Liabilities | $0 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $0 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $0 | |
| Capital | $620 125 | |
| Planned Investment | $620 125 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $620 125 | |
| Loss at Start-up (Start-up Expenses) | $313 125 | |
| TOTAL CAPITAL | $251 875 | |
| TOTAL CAPITAL AND LIABILITIES | $251 875 | |
| Total Funding | $255 000 | |
Products
Before starting a lingerie business, the wisest thing one should do is to plan in detail all the services that will be provided to the future customers. Doing so is important for several reasons, the most important of which is getting a guideway to plan the other components required to start a lingerie business.
A bra business plan will also help you come up with innovative idea lingerie offerings, so it’s a must-do thing for you. As mentioned before, if you’re starting a business for the first time, it will be highly beneficial for you to consult either this undergarments manufacturing business plan or other similar plans available online.
As for Carol Lingerie Wear, it will be a one-stop shop for all lingerie clothing and will provide an assortment of products ranging from bras and panties to nightwear and hosiery, and much more. Our products include but are not limited to:
- Bras: Unlined Bras, Lightly Lined Bras, Push-Up Bras, T-Shirt Bras, Wireless Bras, Strapless Bras, Demi Bras, Perfect Coverage Bras, Bralettes & Lounge Bras, Sport Bras, Bra Accessories
- Panties: Bikinis, Briefs, Hiphuggers, Shorties, Thongs & V-Strings, Cheekies & Cheekinis, High-Waist & High-Leg, Seamless & No-Show, Sport Panties
- Nightwear: Slips, Cami Sets, Kimonos, Tops, Shorts, Pants, Lounge, Robes, Pajama Sets, Pajama Separates, Sleepshirts, Rompers
- Sportwear: Sport Bras (with minimum, medium, and maximum support), Sport Panties & Bottoms, Workout Leggings & Pants, Yoga Pants, Sweatpants & Streetwear Bottoms, Bra Tops & Crops, Tees & Tanks
Note
Besides offering our own designed lingerie under the brand name of ‘Carol Lingerie Wear,’ we’ll also be offering products from famous lingerie brands in our display center so that you may get whatever you want. What’s more, we’ll also be offering a range of accessories such as handbags, wristlets, watches, so as to truly provide our customers with one-stop service.
We’ll also allow our customers to purchase our products via our online store and get them shipped at their doorstep, no matter if they are located in the US or any other place on the globe.
Marketing Analysis of Lingerie Store
Marketing analysis is one of the most important components of your business plan as it helps you understand how to start a underwear line and make it a success. Besides helping you with the startup, a lingerie marketing plan helps you identify your target audience as well as future potential customers.
So, if you don’t know how to create your own underwear line and how to sell lingerie in a profitable way, just go through this sample business plan and most of your worries will be gone in an instant. You can also consult other resources in getting a hold of how to start a bra business but in all cases, you’ll have to prepare a well-thought-out business plan.
5.1 Market Trends
Streetwear clothing is in great demand due to their casual nature and relatively lower prices as compared to other types of clothing. Ever since they started in the 1990s, the popularity of streetwear clothing such as jeans and casual shirts have been increasing. The market for this business niche will continue to increase over the course of the next few decades.
5.2 Marketing Segmentation
It is very important for you to analyze your target audience before you think about how to start a bra line because it’s by this way you can develop effective marketing strategies. Once you have come up with an attractive strategy, your customers will flood into your shop at a rate even you won’t believe.
The marketing segmentation of our potential customers is as follows.
5.2.1 Departmental Stores: We will supply our branded lingerie to the departmental stores located across Orlando as well as a handful of nearby cities. As our business grows with time, we will increase the number of cities to whom we will be supplying our products.
5.2.2 Residential Community: Another important target group will be the local community residing in the vicinity of our Orlando display center. Carol Lingerie Wear will provide best-in-class lingerie products to women from the residential community. Our products will cover all the needs of women belonging to all age groups.
5.2.3 Online Companies: Our final target group will be the online purchasers who will be buying our products through our online store business plan. No matter if our customers are based in the US or in any other country, we’ll make sure to safely ship our products at their doorstep in minimum time.
The detailed market analysis of our potential customers is given in the following table.
Business plan for investors
5.3 Business Target
Our target is to become Orlando’s best lingerie company by the end of the next two years. As per sales, our aim will be to achieve the net profit margin of $25k per month by the end of the first year, and then make it rise steadily over the years to come.
5.4 Product Pricing
In order to introduce our products to the customers and compete with the established lingerie brands, we will price our lingerie line in slightly lower ranges than our competitors. However, the products belonging to other brands will be sold at market prices.
As per the shipping charges for our online customers, we won’t charge any person making a purchase from Florida. However, the customers buying our products from other US states or any other country will be charged a fair shipping price subject to terms and conditions.
Strategy of Lingerie Business
After you have conducted a proper and thorough marketing analysis to know who your target audience is, the next step is to create an effective sales strategy which can convert your audience into your costumers. Your ladies undergarments business can never succeed unless people know that it exists and it provides exceptional products. That’s where sales strategy comes to play; it promotes your underwear company and gets you all the customers you want. Sales strategy is one of the most important components of your lingerie business plan, so make sure to plan it carefully before starting an underwear company.
6.1 Competitive Analysis
One of our biggest competitive advantages will be our location, which is almost ideal to start an intimate apparel business. The residential community located near us has a huge women population, necessary for us to kickstart our venture. Besides that, our competitive prices will also add value to our company since we will be offering high-quality products at relatively cheaper rates.
The free shipping service within Florida state will be another competitive advantage as most of the lingerie companies charge a shipping fee. Finally, our exceptional customer service will also be there to convert our visitors into loyal customers.
6.2 Sales Strategy
Our experts have come up with the following brilliant strategies to advertise and sell our products.
- We will offer gift hampers and attractive discounts on our products to encourage sales
- We will provide special discounts on customer referrals
- We will advertise our products through print as well as social media (mainly Facebook and Instagram)
- We will allow our customers to buy our products online with an easy-to-use online store
6.3 Sales Forecast
Considering the current market demand of our products and our sales strategy, our experts have forecasted following sales on a yearly basis which are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following
6.4 Sales Monthly
6.5 Sales Yearly
Personnel plan
It’s highly recommended for you to create a list of the employees required to run your business as well as their job descriptions in your underwear shop business plan. Your personnel plan must be a part of your lingerie business plan so you know what staff to hire before launching your startup.
7.1 Company Staff
The following staff will be hired on a contract basis for the startup.
- 1 Production Manager for managing the production facility
- 10 Production Workers for operating the production plant
- 2 Accountants for maintaining financial records
- 3 Fashion Designers for designing lingerie products
- 8 Assistants for operating display center
- 2 Drivers for transportation purposes
- 1 Front Desk Officer to act as receptionist
- 1 IT Expert for managing the online store
7.2 Average Salary of Employees
The average salaries of employees are as follows.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountants | $85 000 | $95 000 | $105 000 |
| Sales Executives | $45 000 | $50 000 | $55 000 |
| Field Employees | $550 000 | $650 000 | $750 000 |
| Movers | $410 000 | $440 000 | $480 000 |
| Cleaners | $152 000 | $159 000 | $166 000 |
| Inventory Manager | $145 000 | $152 000 | $159 000 |
| Technical Assistants | $50 000 | $55 000 | $60 000 |
| Security Officers | $187 000 | $194 000 | $201 000 |
| Front Desk Officer | $42 000 | $45 000 | $48 000 |
| Total Salaries | $562 000 | $599 000 | $646 000 |
Financial Plan
The final step you will have to take before you open lingerie store is to make a financial plan to determine all the costs involved in your startup. It must include both the direct expenses such as the cost of inventory and indirect expenses such as the overhead costs.
Your financial plan will also give you an idea if you’ll make money selling lingerie or if your business won’t do so well. It’s only after covering the financial aspects of your startup in an effective plan, you can manage your expenses while also achieving your financial goals.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10,00% | 11,00% | 12,00% |
| Long-term Interest Rate | 10,00% | 10,00% | 10,00% |
| Tax Rate | 26,42% | 27,76% | 28,12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
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| Brake-Even Analysis | ||
| Monthly Units Break-even | 5530 | |
| Monthly Revenue Break-even | $159 740 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $260,87 | |
| Average Per-Unit Variable Cost | $0,89 | |
| Estimated Monthly Fixed Cost | $196 410 | |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309 069 | $385 934 | $462 799 |
| Direct Cost of Sales | $15 100 | $19 153 | $23 206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15 100 | $19 153 | $23 206 |
| Gross Margin | $293 969 | $366 781 | $439 593 |
| Gross Margin % | 94,98% | 94,72% | 94,46% |
| Expenses | |||
| Payroll | $138 036 | $162 898 | $187 760 |
| Sales and Marketing and Other Expenses | $1 850 | $2 000 | $2 150 |
| Depreciation | $2 070 | $2 070 | $2 070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4 000 | $4 250 | $4 500 |
| Insurance | $1 800 | $1 800 | $1 800 |
| Rent | $6 500 | $7 000 | $7 500 |
| Payroll Taxes | $34 510 | $40 726 | $46 942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188 766 | $220 744 | $252 722 |
| Profit Before Interest and Taxes | $105 205 | $146 040 | $186 875 |
| EBITDA | $107 275 | $148 110 | $188 945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26 838 | $37 315 | $47 792 |
| Net Profit | $78 367 | $108 725 | $139 083 |
| Net Profit/Sales | 30,00% | 39,32% | 48,64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40 124 | $45 046 | $50 068 |
| Cash from Receivables | $7 023 | $8 610 | $9 297 |
| SUBTOTAL CASH FROM OPERATIONS | $47 143 | $53 651 | $59 359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47 143 | $53 651 | $55 359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21 647 | $24 204 | $26 951 |
| Bill Payments | $13 539 | $15 385 | $170 631 |
| SUBTOTAL SPENT ON OPERATIONS | $35 296 | $39 549 | $43 582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35 296 | $35 489 | $43 882 |
| Net Cash Flow | $11 551 | $13 167 | $15 683 |
| Cash Balance | $21 823 | $22 381 | $28 239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184 666 | $218 525 | $252 384 |
| Accounts Receivable | $12 613 | $14 493 | $16 373 |
| Inventory | $2 980 | $3 450 | $3 920 |
| Other Current Assets | $1 000 | $1 000 | $1 000 |
| TOTAL CURRENT ASSETS | $201 259 | $237 468 | $273 677 |
| Long-term Assets | |||
| Long-term Assets | $10 000 | $10 000 | $10 000 |
| Accumulated Depreciation | $12 420 | $14 490 | $16 560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198 839 | $232 978 | $267 117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9 482 | $10 792 | $12 102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9 482 | $10 792 | $12 102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9 482 | $10 792 | $12 102 |
| Paid-in Capital | $30 000 | $30 000 | $30 000 |
| Retained Earnings | $48 651 | $72 636 | $96 621 |
| Earnings | $100 709 | $119 555 | $138 401 |
| TOTAL CAPITAL | $189 360 | $222 190 | $255 020 |
| TOTAL LIABILITIES AND CAPITAL | $198 839 | $232 978 | $267 117 |
| Net Worth | $182 060 | $226 240 | $270 420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4,35% | 30,82% | 63,29% | 4,00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5,61% | 4,71% | 3,81% | 9,70% |
| Inventory | 1,85% | 1,82% | 1,79% | 9,80% |
| Other Current Assets | 1,75% | 2,02% | 2,29% | 27,40% |
| Total Current Assets | 138,53% | 150,99% | 163,45% | 54,60% |
| Long-term Assets | -9,47% | -21,01% | -32,55% | 58,40% |
| TOTAL ASSETS | 100,00% | 100,00% | 100,00% | 100,00% |
| Current Liabilities | 4,68% | 3,04% | 2,76% | 27,30% |
| Long-term Liabilities | 0,00% | 0,00% | 0,00% | 25,80% |
| Total Liabilities | 4,68% | 3,04% | 2,76% | 54,10% |
| NET WORTH | 99,32% | 101,04% | 102,76% | 44,90% |
| Percent of Sales | ||||
| Sales | 100,00% | 100,00% | 100,00% | 100,00% |
| Gross Margin | 94,18% | 93,85% | 93,52% | 0,00% |
| Selling, General & Administrative Expenses | 74,29% | 71,83% | 69,37% | 65,20% |
| Advertising Expenses | 2,06% | 1,11% | 0,28% | 1,40% |
| Profit Before Interest and Taxes | 26,47% | 29,30% | 32,13% | 2,86% |
| Main Ratios | ||||
| Current | 25,86 | 29,39 | 32,92 | 1,63 |
| Quick | 25,4 | 28,88 | 32,36 | 0,84 |
| Total Debt to Total Assets | 2,68% | 1,04% | 0,76% | 67,10% |
| Pre-tax Return on Net Worth | 66,83% | 71,26% | 75,69% | 4,40% |
| Pre-tax Return on Assets | 64,88% | 69,75% | 74,62% | 9,00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19,20% | 21,16% | 23,12% | N.A. |
| Return on Equity | 47,79% | 50,53% | 53,27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4,56 | 4,56 | 4,56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19,7 | 22,55 | 25,4 | N.A. |
| Accounts Payable Turnover | 14,17 | 14,67 | 15,17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1,84 | 1,55 | 1,26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0,02 | -0,04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120 943 | $140 664 | $160 385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0,45 | 0,48 | 0,51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23,66 | 27,01 | 30,36 | N.A. |
| Sales/Net Worth | 1,68 | 1,29 | 0,9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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