, A Business Plan

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Abstract

I am basing this business plan off of mine and a friends hobby. We have had a hobby of making kids clothes and accessories over the past year that our husbands have been deployed. Not only have we talked about designs for the kids clothing and hair accessories, but we have dug a little deeper into business licenses, taxation, profit, and expenses. I am hoping that this business plan I am writing for my final assignment will actually be put to use and help us to possibly expand the hobby even further, and develop a basis for us to start a sole proprietorship.

HazeRed Designs, A Business Plan

Hello investors, and thank you for taking interest in HazeRed Designs. HazeRed Designs was started in 2010 as a hobby .but is on its way to becoming something bigger and better. We have chosen to make our company a sole proprietorship. Why sole proprietorship, you may ask, because tax liability will be low, we can switch to a partnership or corporation if the company succeeds, and we will not have to worry with having an actual place of business for now, we can still work from our homes! HazeRed Designs is a maker of childrens clothing and hair accessories, military and patriotic accessories such as wallets, the famous ACU pattern purses, and jewelry. All of our products are handcrafted, completely customizable, and already available for purchase on many online stores such as Etsy.com, and campbellyardsales.com. We order all of our supplies in bulk, from bottle caps and wire for our jewelry, to clips and glue for our girls barrettes. All of our ACU fabric is taken from donated uniforms from our husbands and others soldiers in the area. Other fabrics are also bought in bulk of the most popular designs, such as cartoon characters, and sports or princess patterns. In addition to our online stores we also travel in town every weekend and sell our items at craft fairs and flea markets. We advertise our store with links to our online stores on three of the major social networking sites, facebook, twitter, and blogger. Our advertising is free on the social networking sites, plus we hand out business cards in all of the military meetings that we attend, so we have cut out that expense. Our online stores have minimal fees, with Etsy, it is a twenty cent per item fee for 3 months, and campbell yard sales charges twelve dollars for a lifetime membership.
We have selected a small accounting firm in our town to help us in budgeting, taxes, and planning for the future of our company. In selecting this company, we asked a multitude of questions relating to experience and character such as; what made you want to be an accountant, how do you budget for your own business, who audits your work, are your business taxes and licenses current, what are your business hours, where did you go to school for accounting, do you do back ground checks on your employees. The answers to those questions have been answered satisfactory and have shown us the true character and skill of the accountant we have chose. We were given references from the accountant we chose for many other businesses that she does accounting work for in different business fields. We both followed up on, the references at different times to assure that the business owners references matched up. We also had Hazel's husband perform reference checks as well, since he is an outside person, and his opinion of the businesses we received references for would be unbiased.
We have decided to jointly oversee the internal controls and cash management for the business, with me being the final decision maker because of my schooling in accounting. My knowledge in accounting will make it easier for us to identify problems areas with budgeting and and cash management in the business. We both have made a budget and will compare them and figure out a good budget that will allow us to each spend an equal amount on fabric and supplies each month. Since we both use a budget for our homes that runs in two week increments per month, we think it will be good to have our business budget monthly as well. For the internal controls of the business, we have set up a bank account in both of our names for the purpose of the business only. We have made it so no transactions; deposits , withdrawals or inquiries, can be made without both of us being present. The bank statements and supplies that are ordered for the business will come to a post office box that is in both of our names, we will open the statements once a month and reconcile them together. A cash box will be kept to use for the sales that are made with cash, along with a receipt describing the purchase that is signed by the customer, and the person selling the item. This cash will be deposited once a week. We have a paypal account for our online sales, with revenue from purchases going to the business bank account. All of these statements will be brought to our accountant on a monthly basis, who will then provide us with a report of profits and losses for our business. These statements will determine how much we each are paid from the business per month. Paydays for us will fall on the 15th of the month, with statements, budgets, and planning running from the 1st to the 30th or 31st of each month. Our goal within the next three months is reach a profit of $2000 for each of us or $4000 per month as a whole. As of today we are at a profit of $600 per person per month, or $1200 per month as a whole. We generate a complete income of $2000 per month and have expenses of $800 per month, which includes our shipping costs for online purchases, minimal supplies and accounting fees paid to the accountant. Leftover money each month is deposited back into the bank account. Since we started this business with so many supplies on hand already, we eliminated the need to have a supply budget to start the business up. We only have to replenish supplies such as thread and common fabric once a month, and we keep those orders to a minimum to ensure that should the need for special fabrics arise, the resources will be available.
By keeping track of what months we sell the most items, and what items we sell the most and least of, we can determine how much revenue we will generate, and how much of an item we will need to make. With a financial report generated from our accountant, we will be able to see what areas, and at what times of the year our sales are the most profitable. This will keep us ready and well stocked with the most popular selling items, especially around holidays when sales are high. The financial reports will alos let us know how much we are actually spending to maintain the business every month. Although we started this business for fun, generating a profit is the main goal.
I hope that this presentation has assured you that HazeRed Designs will be a good investment. We strive to make quality products at a low cost to us, but still maintain customer satisfaction by keeping our selling prices lower than our competition. We desire to be an outstanding business and the leader in custom childrens clothing and accessories, providing excellent products, while generating a reasonable revenue to expand our business from our homes to a boutique shoppe.

References
: Kimmel, P., Weygandt, J., & Kieso, D. (2003). Essentials of accounting: Tools for business decision making (2nd ed.). Hoboken, NJ: Wiley INC.. (2003). Business Plan Building, Section by Section. Retrieved from http://Business Plan Building, Section by Section