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Rose and Ray’s Boutique
Alexandria Technical and Community College
Bob Defries, Instructor
1601 Jefferson Street
Alexandria, MN 56308
Lydia Kieft
1020 20th Avenue
Rock Valley, Iowa, 51247
December 09, 2015
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Table of Contents
Mission Statement and Executive Summary……………………………………………Page 2
Self-Analysis …………………………………………………………………………...Pages 3-7
Trade Area Analysis…………………………………………………………………….Pages 7-11
Competition Analysis………………………………………………………………… Pages 11-16
Site and Location Analysis…………………………………………………………… Pages 16-20
Proposed Organization……………………………………………………………….. Pages 20-23
Proposed Product/Service Mix……………………………………………………….. Pages 24-27
Proposed Promotional Program……………………………………………………… Pages 27-30
Place and Distribution………………………………………………………………... Pages 31-33
Financial Statement Discussion……………………………………………………… Pages 33-34
Bibliography…………………………………………………………………………... Page 35
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Mission Statement
At Rose and Ray’s boutique we take pride in providing our customers with trendy, yet affordable
merchandise ranging from clothing and accessories to refurbished and customized furniture. Our
staff is highly trained and knowledgeable on the latest trends and will assist you in finding your
unique personal style. We offer an exclusive and comfortable atmosphere that will leave you
feeling stylish and confident.
Executive Summary
Rose and Ray’s Boutique is a Women’s Fashion Boutique providing potential customers
access to women’s apparel, shoes and accessories, as well and custom and refurbished furniture
selections. Rose and Ray’s Boutique would be positioned and perceived as a midscale
marketplace. Rose and Ray’s Boutique will be bought on January 1, 2017. Rose and Ray’s
Boutique will be targeting women from ages 15 to 35 for women’s apparel and accessories, and
for the custom and refurbished furniture selection we will be targeting ages 35 and up. The
products sold at Rose and Rays will be different from other clothing stores in town, because we
will be the only boutique, instead of consignment shop. The advantage of Rose and Ray’s
Boutique’s location is the fact that it is right off of the busy Highway 18, and the building
provides us with the room to expand in the future if necessary. Rose and Ray’s Boutique
projected sales for the first year we are in business is $361,556. The net profit is $10,705. Rose
and Ray’s projected growth for year 2 and 3 of business is 3% with net sales for year 2 at
$372,403 and net profit at $12,360, and year 3 net sales being at $383,575, and net profit at
$14,091. The accumulated cash flow for year 3 is 21,054. I have had experience in the retail
world, and have taken many classes that have given me the knowledge to be a successful
business owner. The loan amount that Rose and Ray’s Boutique is asking for is $116,830.
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A. Self-Analysis
When starting a business, an educational background is very helpful. This is especially so
in the technical skills aspect, because it can provide you with basic knowledge of management,
finance, and market analyses. Not only has most of my education taught me the basics skills of
running a business, but also a fair amount of important life skills as well.
Before my time at Alexandria Technical and Community College, I spent a semester at
Minnesota State University Moorhead majoring in Inclusive Elementary Education. I was an
eager freshman excited to pursue my dream of becoming a Special Education teacher and coach
along with three of my best high school friends. Early into the semester those dreams quickly
faded when I realized that my interest in the classes I was taking towards my desired major were
unsatisfying and rather boring. While feeling this way and putting up with listening to my friends
talk about how this choice was the perfect fit, I naturally tried to convince my feelings otherwise.
I had frequent phone calls with my parents, who were transitioning themselves to a life on the
North Shore, trying to get advice from people who cared about me most. I ultimately made the
decision to move back home for a semester, as I felt it was the right thing to do instead of putting
money towards classes of no interest. I left for Christmas break and never came back. This was a
huge changing point in my life, as I had left my comfort zone filled with familiar friends and
routines, and began a life in an unknown place with no ideas for my future. I cherish the time I
spent at home that semester with my parents, and I believe that time with them was when I
learned some of the most important life lessons that have helped me become the person that I am
today. During my time away from school, I learned to take risks, believe in myself and my
abilities, and how to tolerate change. I realized it was alright to make my own decisions and not
care what others thought of them by leaving my friends behind and doing what was best for me. I
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believed in my abilities to stay calm and find out where my interests were, and get myself out
there in the community with my first retail job. I acclimated to the aspect of change and believe
that is one of the best things to get used to. These life lessons come in handy as I start this
business because I gained knowledge on risk taking, confidence, and change. After experiencing
a glimpse of some helpful lessons, I was prepared to start my education at Alexandria Technical
and Community College, where I have taken many classes that will help me become a successful
business owner. Some of them include Retail Management, Principles of Marketing, Principles
of Selling, Counselor Selling, and Entrepreneurship. All of these courses have taught me
countless techniques on how to properly and successfully run a business.
In high school, I was a three sport athlete, and I considered that my full time job. Besides
the occasional babysitting job, I didn’t gain much experience in the work force until the summer
before I left for college. I waitressed at Little Crow Golf Course, where I first learned that the
customer is always right. After deciding the food business wasn’t my forte, I tried my first retail
job was at Lake Superior Trading Post. Through my time at the trading post, I realized that the
retail world is where I belonged. I learned about product knowledge, good customer service, how
to run a small family business, do inventory, count out a till, buy for the next season, and much
more. It may have taken me a while to find where my interests were, but I’m glad for my
experiences so far. I feel like having them will help me better understand putting myself in
charge in a retail situation.
During my time at Alexandria Technical and Community College, I have been involved
in a couple of extracurricular activities in particular that I feel will benefit me in starting my own
business. One of which is being a member of Collegiate DECA. Throughout the course of my
experience with DECA, I have become more confident in myself and my professional abilities. I
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competed at the Minnesota State level as well as National level in Retail Management, and
gained a better understanding of how a business works and how to be creative about the entire
process. I also am involved in the honor society Phi Theta Kappa, which is a club for students
who excel in their educational studies. Being involved in Phi Theta Kappa has allowed me to
gain skills such as organization, planning, and how to be goal oriented. Our group planned
several different school events and activities to fundraise for circumstances happening in our
community.
We all have certain people in life that we turn to or look up to when we need advice on a
particular situation or obstacle that comes our way. For me, my dad and my grandma Gert have
always been those individuals. My dad was the most encouraging person in my life. Since I was
a little girl, he taught me to be positive and never stop dreaming. He has showed me what it’s
like to live a life filled with those very things, and what he has taught me has helped me to be
more confident on reaching my dreams. My grandma Gert is one of the most positive people out
there, she can take the most dreadful situation, and turn it into a positive and uplifting one. She
has kept me positive on what it is I want in life through it all. She also has a lot of experience in
my field of interest, the retail world, so she has always kept me motivated towards it. She started
her own fashion boutique in Sioux County in the 80s, and ever since I found that out, I have
wanted the same exact thing. She has always been so proud that I am following in her footsteps,
and she has encouraged me in every step along the way by giving me advice and good spirit.
Along with role model are mentors, the people that are there to answer your questions and
concerns and always lend a helping hand. For me, my mom and my advisor Kris fit this role in
my life perfectly. My mom has always been the one that I go to for anything and everything, and
she has yet to give me bad advice or words of wisdom. We have been through a lot together and
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she has always remained true to me no matter what. Kris, my advisor, not only shares with me
her lifetime of experience in the retail world, but also she is always willing to help out with
absolutely anything. Her classes have taught me a lot of the technical things behind starting a
business, but she herself has taught me valuable things in life that I can take with me as I start
this business such as dedication and confidence.
I feel as though I have a number of personal characteristics that prove me a candidate in
becoming a business owner. The first of those characteristics is that I am a hard worker. I have
learned to work hard through my education and my work experience. I have always been the
student who has had to try really hard to get good grades, and since that is important to me, I
know I have to work hard to reach my educational goals. I also have remained steady with a job
since I have started college and I have learned a lot about the responsibilities and time
management that goes along with working hard. I am also very goal oriented, I never stop
dreaming. I haven’t since I was a little girl, I would consider myself goal oriented because I
know what I want and I do whatever I have to do to get it. I believe that setting personal goals
help you stay on task and pursue your dreams. Another characteristic I have is being relatable. I
am a very approachable friendly person, so it doesn’t take long for me to engage in conversation
and find a common interest among the people that I am talking to. I think it’s important to be
relatable, because that is basis of a long term relationship with a customer in a retail setting. I
also have strong values on honesty. Honesty is the best policy. I have learned through different
situations in my life that honesty pairs a lot with trust and those are two things that are crucial
building relationships with potential customers. You want your customer to know that you are
honest with them and the products that you are selling. I also have gained many strong leadership
skills, especially after becoming a member of DECA, which has helped me step up to leadership
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roles more confidently and with creative intentions. I always used to be afraid to voice my
thoughts, but after some of the experience that DECA has provided me with, I get excited to
share my ideas and to lead a group into the right direction. With that, confidence is also a
characteristic that makes me suitable for becoming a business owner. Being a member of DECA
has also helped my confidence tremendously. I get excited talking about my ideas with people
and remain confident in myself and what I have to offer when sharing those ideas. It’s important
to have confidence in yourself when owning a business because you need confidence to succeed.
Another characteristic is my creativity, being a fashion major has definitely helped me with my
creative side. I love being able to think outside the box and come up with things that no one else
has before. I believe that having a creative edge will help my business stand out. Last but not
least, I have the drive to compete. Since I was a three sport athlete in high school, I have a very
competitive nature. I believe that competition can teach you many lessons. I think that it pushes
you to do your best, and it is good to be compared because it only makes you better.
Throughout my life so far, I have had many life changing experiences that have helped
shape me into the person that I am today, and helped me to gain knowledge on important skills
that will help me to be successful in the future.
B. Trade Area Analysis
The current population of Sioux County, Iowa is 34,681. In 2000, the population was
31,589. From 2009-2010 there was an increase of 1,472 people alone, and from April 2010 to
July 2014 there was a 2.9% population increase compared to Iowa overall population increase of
2.0%. In Rock Valley, where Rose and Ray’s Boutique will be located, the population is 3,577.
Rock Valley has seen a rather recent increase of population from 2010 being 3,362, to 2013
being 3,577. In general, the future population is expected to steadily increase, predicting a jump
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much like that of in 2012 when the population was 34,370, to 2013 when the population was
34,547. This population growth is promising as it tells us that the economy is thriving and that
there are many opportunities that lie ahead in the Sioux County area.
Some demographic profiles on the area include age, sex, race, economics (income), and
poverty rates. The median age in Sioux County, Iowa is 33, and 59% of the county population is
between the ages of 18-64. There is an even split between genders, 50% female and 50% male.
Race in Sioux County is 89% White, 1% Asian, 1% African American, and 9% Hispanic. There
is also said to be an increase in the Hispanic race in the upcoming years, because of opportunities
that lie in the manufacturing fields for families. The per capita income is $25,859, and the
median household income is $61,013. Out of the total population 39% of families make under
50K a year, 41% between 50K and 100K, 16% between 100K and 200K, and 4% over 200K.
9.2% of the population is under the poverty line in Sioux County. The demographics of Rock
Valley are suitable for the type of target market that Rose and Ray’s Boutique is going after, and
the average income proves that the prices we are projecting for our store will fit into the lifestyle
of many of the people in the Sioux County area.
Retail sales estimated in 2007 ($1000) of $394,422, compared to Iowa’s total at
$39,234,649. The retail sales per capita in 2007 was estimated at $12,319, compared to Iowa’s
total of $13,172. The real total taxable sales were estimated in millions at $333,862,288
compared to Iowa’s total at $349,137,449. The retail found in Rock Valley includes, a walk
Down Memory Lane, Bomgaars, Cornerstone Bookstore, Dollar General, Loopy’s, M&H, Main
Street Antiques, Wild Rose Cottage, First Impressions, Nearly New Town, The Economy Shop,
Kel-Brits, and Val’s. The estimated number of sales in Rock Valley for retail is strong and
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steady, and Rose and Ray’s boutique offers a different variety of retail that will stand out among
the existing retailers and competition.
Rock Valley is a special place to live, work, and play because it is a progressive, clean,
rural setting filled with hardworking, well-educated friendly people. It is a “Place of
Opportunities,” with growing new opportunity for development by attracting new and expanding
business. Rock Valley offers full service shopping, quality health care, strong faith, and endless
job opportunities. Some of the attractions include a swimming pool, golf course, sports complex,
award winning trail, and camping area. There are also popular annual events such as the tractor
pull, attracting competitors from around the United States, as well as a summer festival known as
Rally in the Valley which includes festivities such as fireworks, car shows, crazy days,
fundraisers, and Relay for Life. There are 25 growing industry based companies in Rock Valley,
and there are close ties to Economic Development Corporation and Chamber of Commerce to
work together with local governments to make Rock Valley a quality place for business. Rock
Valley shows a lot of the characteristics needed to run a successful business, and gives Rose and
Ray’s Boutique a chance at opportunity to succeed.
Rock Valley is located between two larger cities, Sioux Falls and Sioux City. It is also
centrally located between several major cities such as Omaha, Minneapolis, Chicago, Kansas
City, and Denver, so your business can benefit from the ease of transportation of goods and
convenience for people traveling. Rock Valley is located on US Highway 18, and has close
access to I-80, I-90, I-29, and the four-lane Highway 60 Expressway from Sioux City to
Minneapolis. This will benefit Rose and Ray’s Boutique, because it will bring in traffic from
major metropolitan areas and give our business a chance to become more of a destination. All of
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these factors that contribute to the overall atmosphere and demographics of Sioux County result
in a favorable outcome for a business like Rose and Ray’s Boutique.
Rose and Rays will be targeting women from ages 15 to 35, those are the women
shopping with us for clothing that find interest in the newest trends of the upcoming season, and
also women 35+ who get inspiration for decorating from our unique refurbished and customized
furniture selection. Rose and Ray’s Boutique will focus on two main markets. Our primary
market will be the locals, which are the potential customers of Sioux County. These are the
people who know about our store and have easy access to the products and services we provide.
We feel this primary market will be successful, because we will market ourselves in a way that
makes us very approachable and welcoming, and obtain a reputation that people will remember
and trust. We know that this primary market will be successful because of the census data
researched for Sioux County. Our secondary market is the “pass byers,” the people who are on
their way through town to get somewhere. We would like to create an image at Rose and Ray’s
Boutique that makes us more of a destination or a must stop shop. We feel like we have a strong
secondary market, because of our convenient location right off of Highway 18. For our primary
market, we would like to segment our potential customers under the two separate categories of
products sold at Rose and Ray’s Boutique, which are the women’s clothing and the furniture. For
the clothing, there are 16,086 females in Sioux County, which make up half of the overall
population. Our target market is females from the ages 15-35, which in Sioux County the number
of women falling under that specific demographic are 4,767. So, out of the 16,086 females in the
county, 4,767 of them fall into our target market. As far as furniture for our primary market, we
look at housings statistics in Sioux County, and notice that there are 8,600 housing units owned
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by families, and 2,098 of them are rented. This indicates that there is opportunity for potential
customers of homeowners in this area.
The products sold at Rose and Rays will be different from other clothing stores in town,
because we will be the only boutique, instead of consignment shop. Offering a variety of modern
brands that are loved by the trendiest of fashionistas. The furniture will be one of a kind pieces,
each redone to convert junk into a masterpiece. We will also take customized orders, so the
potential customer is given the chance to bring their own piece of furniture to then be redone by
us to suit their wants and needs.
C. Competition Analysis
Rose and Ray’s Boutique
The Economy
Shop
Nearly New Town
Kel-Brits VAL’s Interior Motives
Type of Operation
Women’s Clothing and Refurbished/Customized
Furniture
Upscale Consignment
Thrift Consignment
Women’s Clothing
Store
Home Improveme
nt Consignmen
t# of Rooms 1 story
Attached garage2 restrooms
4 dressing rooms
2 stories5
departments3 dressing
rooms
3 stories4
departments6 dressing
rooms
1 story1 room
2 dressing rooms
1 story1 store room1 restroom
Ownership Privately Privately Privately Privately PrivatelyLocation 1020 20th Avenue, Rock
Valley, Iowa1308 Main
Street, Rock Valley, Iowa
1411 Main Street, Rock Valley, Iowa
1427 Main Street, Rock Valley, Iowa
2714 14th
Street, Rock Valley, Iowa
Proximity Current location of Rose and Ray’s Boutique
.4 miles NW from Rose and Ray’s Boutique
.5 miles NW from Rose and Ray’s Boutique
.5 miles NW from Rose and Ray’s Boutique
.7 miles SW from Rose and Ray’s Boutique
Atmosphere -Open-Bright
-Industrial Feel
-Messy-Cluttered
-Renovated Outside-Dark
-Vintage Décor-Messy
-Cluttered-Older
-Bright-Small-Open
-Not easily accessible-Cluttered
-Dark-Spaced off
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Building-Dark
Best Business
-Thursday through Saturday
-Season Change-Crazy Days
-Saturdays-Wednesdays -Crazy Days
-Season Change
-Saturdays-Wednesdays-Crazy Days
-Season Change
-Saturdays-Crazy Days
-Season Change
-Saturdays-
Wednesdays
Target Audience
Women’s Fashion 15-35Furniture 35+
Men and Women of All Ages
Men and Women of All Ages
Women 45-70
Women 25+
Prices $20.00-$250.00 $15.00-$150.00
$5.00-$50.00 $30.00-$150.00
$50.00-$300.00
Features -Personalized shopping-Social media campaign-Attached walk through
workshop-Made to order furniture
-In store credit or check for drop off
items -2 day
approval
-In store credit of check for drop off
items-1 week approval
-Special orders
-Personalized shopping
-Blocked off home
sections -Attached workshop
for employees
onlyReputation -Trendy
-Affordable-Good Quality-Personalized-Helpful Staff
-Good Quality
-Name Brand-Lots of Staff
-Good Variety
-Cheapest Prices
-Lots of Staff
-Personable-Reliable
-Lots of Variety-Good
Display-
Personalized
Promotions -Social Media -Discounts and Specials
-Seasonal Sales-Crazy Days
-Bag Clearance
Event-Crazy Days
-Sales for Season Change
-Facebook Page
-Bag Clearance
Event-Crazy Days
-Sales for Season Change
-Facebook Page
-Repeating Customers-Sidewalk
Sales
-Facebook Page
-Weekly Specials
Style -Young and Trendy -Unique Brands
-Large Variety of
Name Brand for all ages at a discounted
price
-Large variety of
clothing at a discounted
price
-Traditional styles geared towards the
older generations
-Home style Easy to
imagine set up in your own place
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Rose and Ray’s Boutique will be unique in that it will be the only women’s fashion
boutique in Rock Valley, but it does have four major competitors including The Economy Shop,
Nearly New Town, Kel-Brits, and Interior Motives by VAL. In the table above, you will see
some of the differences that set Rose and Ray’s boutique apart from its competitors, as well as
some of the similarities that are shared to make Rock Valley a special place to stop and shop.
Rose and Ray’s Boutique is a privately owned women’s clothing and accessory store
with a selection of both customized and refurbished furniture. Rose and Ray’s Boutique is
located in a 1 story, 1 showroom, 1 restroom, 4 dressing room, with an attached garage building
on 20th Ave in Rock Valley. The overall atmosphere of Rose and Ray’s Boutique is open, bright,
clean, and industrial. Rose and Ray’s will be targeting ages 15-35 for women’s clothing, and 35+
for refurbished and customized furniture. Our prices will range from $20.00-$250.00. We feature
personalized shopping and a unique social media campaign. We have a reputation for being
young and trendy, affordable, and helpful and friendly staff. We have up to date social media
sites showing special promotions. Our busiest business days at Rose and Ray’s Boutique are
Thursday through Saturday and during seasonal changes.
When comparing Rose and Ray’s Boutique with The Economy Shop, the first major
difference noticed is that The Economy Shop is name brand consignment, whereas Rose and
Ray’s Boutique is new name brand merchandise. The Economy Shop is privately owned and has
a downtown Main Street location, in a partly renovated two story building, including 5 different
sectioned off departments, and 3 dressing rooms. This location is approximately .4 miles
Northwest from Rose and Ray’s Boutique. The Economy Shop has a specific section for
women’s clothing, men’s clothing, infant, junior boys and girls, and shoes. By having such a
variety of inventory they attracted all ages, and offer merchandise ranging in price from $15.00-
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$150.00.Their display window is always pleasantly done, although the inside is rather cluttered,
and dark, which makes it more difficult to shop. Customers of The Economy Shop are attracted
to their in store credit or check feature, which you receive if you drop off name brand
merchandise and it sells. They have a positive reputation for having providing good quality name
brand clothing in great variety, and having a lot of staff members on the sales floor. They offer a
variety of promotions throughout the year, such as the bag clearance event, (everything you can
fit inside the bag is discounted either 25%, 50%, or 75% depending on day of sale) crazy days,
(Rock Valley local sidewalk sale) seasonal sales, and they promote a lot of specials on their
Facebook page. The busiest times of business for The Economy Shop are Wednesdays,
Saturdays, and during seasonal changes.
When comparing Rose and Ray’s Boutique to Nearly New Town, the same main
difference applies, as Nearly New Town is also a consignment shop, but not specifically name
brand. Nearly New Town is also privately owned and has a downtown Main Street location, in a
strip of older 3 story buildings. This location is approximately .5 miles Northwest from Rose and
Ray’s Boutique. Nearly New Town is separated into 4 departments, including women’s clothing,
men’s clothing, junior’s and children’s clothing, and shoes. It also has 6 dressing rooms on the
main level. The décor found in Nearly New Town is all vintage fashion, and with the
overwhelming amount of merchandise presented, the store is cluttered, dark, and old. However,
the merchandise attracts all ages, and Nearly New Town offers the lowest prices in town ranging
from $5.00-$50.00. All purchases have a two day approval, as well as in store credit or check for
drop offs sold. Nearly New Town has a reputation of having a good variety for the lowest price
and providing helpful staff. Their promotions are very similar to that of The Economy Shop with
the bag clearance event, crazy days, seasonal sales, and they provide information on their
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Facebook page. The busiest times of business for Nearly New Town are Wednesdays, Saturdays,
and during seasonal changes.
When comparing Rose and Ray’s Boutique to Kel-Brits, the main difference is the target
market in which our stores attract. Rose and Ray’s Boutique attracts ages 15 to 35 for clothing
and 35+ for refurbished and customized furniture, while Kel-Brits attracts women ages 45-75 for
solely clothing. Kel-Brits is strictly a women’s clothing store, located in a 1 story, 1 room
building with 2 dressing rooms on Main Street downtown. This location is approximately .5
miles Northwest from Rose and Ray’s Boutique. The store itself is very bright, small, and open.
Kel-Brits is privately owned, and their prices range from $30.00-$150.00. They are known for
placing special orders, and giving customers a personalized shopping experience. Kel-Brits has a
reputation of personable and reliable staff, attracting a lot of repeating customers with their
traditional styles and way of operating. The busiest times for business at Kel-brits is Saturdays
and seasonal changes.
When comparing Rose and Ray’s Boutique to Interior Motives by VAL, the main
difference is the variety of merchandise sold, as VALS is just known for providing only home
improvement consignment. VALS is privately owned, located on 14th Street in Rock Valley, in a
1 story, 1 showroom, and 1 restroom building with an attached workshop. This location is
approximately .7 miles Southwest from Rose and Ray’s Boutique. VALS is not as easily
accessible, cluttered, dark, and spaced off. However, they are known for impressive displays
that show off how furniture could be arranged in your own home. They also do minor furniture
repair in their workshop, as well as a small variety of refurbishing. They target customers 30+,
and their prices range from $50.00-$300.00. They also promote their specials on their Facebook
page. The busiest times of business for VALS are on Wednesdays and Saturdays.
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There are many advantages and disadvantages to the competitors of Rose and Ray’s
Boutique. Some advantages include doing the same type of local things, such as retail staying
open late on Wednesday, seasonal sales, Facebook pages, and overall open and clean
atmosphere. Some of the disadvantages would be the location, as Rose and Ray’s Boutique is
not a Main Street location like 3 out of the 4 competitors, also some of the price differences, as
well as target market.
Rose and Ray’s Boutique would like our customers to perceive us as a unique and
comfortable atmosphere that will leave you feeling stylish and confident in your style and
purchase. We want our customers to feel they can trust our fashion opinions on the latest trends,
and be assured that they can find what they are looking for when shopping with us. We want to
be stylish yet affordable and personalize your experience with custom furniture design.
D. Site and Location Analysis
Rose and Ray’s will be located at 1020 20th Avenue, Rock Valley, Iowa. The building
sold for $79,900, which is similar to surrounding locations in the same vicinity and size that sell
for between $70,000-$80,000. The building is zoned for commercial use, and recommended for
either retail or professional office building by Vande Vegt and Zomer Reality.
There are some advantages as well as disadvantages to this the location of Rose and
Ray’s Boutique. The advantages include a lot and building right off of the busy Highway 18, a
large gravel parking lot shared with Subway and a gas station, 26X51 main area, and 2
restrooms. The disadvantages are that the location is not on Main Street where many of the local
competitors are, and there is no attached garage for a refurbished furniture on site workshop.
Rose and Ray’s Boutique will overcome these disadvantages by spending a little more on
advertising and marketing our location by using signs directly off Highway 18, and look into
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adding on a garage to the already existing concrete slab on the South side of the building to be
used for workshop purposes. Rose and Ray’s Boutique’s competitors are within a half a mile
distance, and I can see this as being both an advantage and disadvantage. We will be able to
compete successfully with these competitors, because of what products and services we have to
offer, however, we will have to work harder and advertising our location and making it worth the
short drive to come to our store.
The major traffic artery in Sioux County is Highway 18, which runs right through Rock
Valley and several other nearby towns on the way to either Sioux City, or Sioux Falls. Coming
into Rock Valley, the traffic counts on Highway 18 as of 2011, is 3,490. Rose and Ray’s
Boutique is also located on 2 miles from Highway 75, which runs North and South, and there
traffic counts are 3,890. Rose and Ray’s Boutique will be very accessible to our potential
customers, because of its location right off of the highway, and its shared parking lot with a
major gas station as well as Subway. There are two entrances in which to get to Rose and Ray’s
Boutique. However, we are not completely visible from the highway unless looked at rather
closely, which is why a sign is a necessary investment. As far as future development within close
vicinity to Rose and Ray’s Boutique there is not much opportunity, as the store will be located on
a dead end strip, however, Rock Valley seems to be expanding towards the East side of town,
which is where we are located. Rose and Ray’s is located by businesses that get a lot of daily
traffic, such as Subway, which is the only fast food chain in Rock Valley, and a main gas station
in town. It is also only .4 miles away from Main Street. The parking area is gravel and can fit
close to 20 cars, also has an extra shared parking lot with the back of Subway for overflow.
Some of the major attractions in Rock Valley, such as Main Street, Rock River, Rock Valley
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Campground, and the bike trail are not far away, only ranging to about 2 miles. The property tax
for this location is $4,666.
Some personal information about how I got my inspiration for starting Rose and Ray’s
Boutique comes from my grandma, Gert. She started her own boutique called the House of
Fashion in Sioux County, and has worked in a retail setting her entire life before being diagnosed
with Parkinson’s Dieses and moving into a nursing home.
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Most of the traffic flow is cars going to the West, as Rock Valley is as of now more
developed in that direction. There are people going to work, or to downtown attractions.
Highway 18 is 2 lanes, and the speed limit is 35 through the area that Rose and Ray’s Boutique is
located. There is one traffic light in the entire town of Rock Valley, and that is located just 2
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blocks to the West of Rose and Ray’s Boutique. There is no public transportation system in Rock
Valley, so we depend on customers to either drive right up to us, or walk from downtown.
The building in which Rose and Ray’s will be in used to be a Curves exercise club fitness
facility, meant for membership only. The lot size is 100X100 and is in the shape of a rectangle.
The building itself is in great shape, with a steel exterior and new flooring put in recently. The
facility is an image that we would like to maintain, because it is clean and welcoming. The inside
layout is favorable, as it has a large main room, a backroom for inventory and freight, 2
restrooms, and plenty of room to add dressing rooms. The inside will need small detailed
renovations such as paint color, front check out area, and dressing rooms area. There are no
repairs needed to main building, and utilities are all in good shape, however, we will need to do
electrical work if adding on a workshop. We are also conveniently located for delivery services,
as we have a back alley way wide enough for a truck load.
There are many potential customers that are close by to the location of Rose and Ray’s
Boutique. Our primary market is citizens of Sioux County, and being located in Rock Valley
makes us in reasonable distance to many other surrounding towns. Our secondary market are the
“pass byers,” and our location is good for that as well because of Highway 18.
Rose and Ray’s Boutique’s location is in an area where crime is very unlikely and
unexpected. The lights from the surrounding businesses are 24/7, and there are also street lights
at the end of the dead end, so lighting at night is not a problem.
E. Proposed Organization
The proposed organization that Rose and Ray’s Boutique will be using is Limited
Liability Company. This is because it combines a corporation's liability protection and pass-
through tax structure of a partnership, the IRS rules now allow Limited Liability Companies to
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choose between being taxed as partnership or corporation, and it’s significantly easier to
maintain than a corporation.
Rose and Ray’s Boutique will be full time as well as part time Sales Associates. I will be
taking on the managerial duties at Rose and Ray’s Boutique. I will make sure that the company is
running in a smooth and efficient manner, as well as analyze data and determine sales goals,
marketing, production and purchasing decisions. Rose and Ray’s Boutique will need 5
employees in all, including me. I would like to have 4 ladies that are highly trained and
knowledgeable on the latest trends and will assist our customers in finding their unique personal
style. I would like at least 2 of them to be willing to take on closing responsibilities of the store,
which they would then alternate shifts in doing so. I would also like those 2 employees to be
comfortable with opening the store too. Most days I will be in charge of opening, but just in case
I would like to have the opportunity to pass off the duties if necessary. I would also like 2 of
them to be full time staff at Rose and Ray’s, working at least 25 hours a week. Then, 3 of them
take on part time, maybe even 1 seasonal. I need all employees to be willing to work weekends,
as our busiest business days are Thursday-Saturday. I also would like at least 3 employees
present during each shift. I will be taking on the Human Resource duties at Rose and Ray’s
Boutique. As the owner I am responsible for overseeing functions and managing employees. My
aunt has offered to do the book keeping for Rose and Ray’s Boutique for a reasonable price, so
all things related to accounting will be dealt through her personally, as she does book keeping
work for other small businesses as a side job. Mc Gill and Mc Gill Law Offices in Rock Valley,
Iowa. My grandpa has offered to mow, and do snow removal, as he has done this work for his
neighborhood for a small price for many years. I will have a dumpster in the back of building
which will be picked up by the city for a small fee. I would like the work in a cleaning schedule
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during the shifts of the employees that can be done during the “slow” times, that way we keep up
on cleaning throughout the day. Also, the closing staff will be responsible for the final touches,
and if we get behind, we will come in early the next day to fix it up. Rose and Ray’s Boutique
will have a basic wireless alarm system. These range from $150-$300 (free installation), and can
be set up to sync with you mobile phone, for when you are not on business grounds. Schedules
will be posted 2 weeks in advance. I will be in charge of scheduling, but when hired, they will be
informed of their normal scheduled hours, and then if there in conflict, they will make me aware
as in advanced as possible. Rose and Ray’s Boutique is a small business, so an opening hire
process won’t be necessary. However, after advertisement of position, I will set up interviews at
job site. Most employees will know me from personal experiences, because of the small town
atmosphere, but I’m open to offering positions to anyone who is worthy of meeting expectations.
Organizational Chart
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OWNER
(Me)
BOOK KEEPER
SALES ASSOSIATES
Labor Costs
Employee Hourly Pay Hours Per Week Weekly Pay Annual Pay
Owner Manager 0 60+ 0 0
Sales Associate
FT
$10.50 30 $315 $16380
Sales Associate
FT
$10.50 30 $315 $16380
Sales Associate
PT
$10.00 20 $200 $10400
Sales Associate
PT
$10.00 20 $200 $10400
Sales Associate
PT
$10.00 15 $150 $7800
Total $51.00 180+ $1180 $61360
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E. Proposed Product/Service Mix
Women’s Apparel
A. Tops: o Tanks and Tees- Jack by BB Dakota ($20-40)o Blouses- Jack by BB Dakota ($30-50)o Sweaters and Cardigans- Jack by BB Dakota ($25-60)o Outerwear- Jack by BB Dakota ($60-150)o Basics- Heart and Hips ($10-30)
Dresses:
o Maxi- Jack by BB Dakota ($30-50)o Short- Jack by BB Dakota ($30-50)
Bottoms:
o Pants- Liverpool ($50-70)o Skirts- Jack by BB Dakota ($30-50)o Basics- Heart and Hips (20-40)
Accessories:
o Jewelry- Rustic Charm (Local Artist) ($15-40)o Hats and Scarves- Jack by BB Dakota ($15-40)o TOMS shoes- TOMS ($50-150)
Brands-JACK by BB Dakota, Liverpool, Heart and Hips, TOMS, Rustic Charm (Local Artist)
Refurbished Furniture and Customized Furniture
A. DressersB. NightstandsC. TablesD. BenchesE. Whatever I am willing to take on upon request
Brands-There will be no specific brands of furniture that I will be carrying, all of the selection will be chosen by me as I travel to auctions and sales around the area. I will make some of my own by deciding my own design, and also allow for potential customers to put in a request to be made to order custom design.
Merchandise at Rose and Ray’s Boutique will be separated into two main categories. One
of which being women’s apparel, which includes the subsections of tops, dresses, bottoms, and
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accessories. The other, refurbished and customized furniture, which includes the subsections of
dressers, nightstands, tables and benches. For the women’s apparel, I will be using a basic
markup policy. I will be using this policy because our products will be bought from other
vendors and businesses at the wholesale market, therefore, I will need to markup the product
pricing in my store in order to make a profit. As for the refurbished furniture selection at Rose
and Ray’s Boutique, there will be not set pricing strategy. Instead, pricing will be determined for
custom work as a bid for need. The prices will vary because of several factors such as time,
supplies used, and condition the piece of furniture is on. Some of the refurbished and customized
furniture selection will also be used for display throughout the store, and may not always be for
sale. All prices will vary on market value and variability as well.
Prices will be determined based on what I purchased for them, what the market has priced
them at, and the mark up rate. I will look closely at numbers of what I purchased and how much I
need to mark up to ensure a good profit outcome. I will also look into market pricing to see what
general prices are to understand where I stand compared to other retailers and competitors. To
begin, I would like to try the keystone technique, which will double the cost of an item, so a
100% markup. With carrying a brand like TOMS, we must follow specific company orders on
prices, and follow their guidelines for sales and promotions, so that will be a product that I will
not have a say in the markup strategy. Also, in pairing up with Rustic Charm, which is a local
jeweler, I will have to work out the cost of merchandise with her and determine the profits made
after I have discussed guidelines with the private dealer.
For the most part, I will have regular pricing on all products. I may have a small
clearance section when going through a seasonal change or certain specials like discount
promotions to potential customers who take advantage of some of the marketing and advertising
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promotions Rose and Ray’s Boutique will frequently offer. Refurbished furniture pricing will
remain on a custom order basis. Clothing pricing will be determined by what I purchase it for,
while refurbished furniture is more so determined by the effort put forth and the supplies needed
to accomplish the look desired.
Since Rose and Ray’s Boutique is an upstart business, the width of our product mix is
starting out rather small, with 5 brand lines, however, with the brands we have chosen to
promote, the potential for growth is strong. (JACK by BB Dakota, Liverpool, Heart and Hips,
TOMS, Rustic Charm) With in those 5 brand lines is a lengthy assortment of options from which
to choose from. For instance, the brand JACK by BB Dakota has merchandise in every category
of product in Rose and Ray’s Boutique. The depth of many of the product we offer is also
substantial. Rose and Ray’s Boutique will offer all merchandise in sizes XS-2XL, for jeans we
will carry sizes 0-12, there will be many different color variations, patterns, and washes offered
in many of the products that we carry. As far as consistency, it will take us awhile to find out the
trends in our own store, for example, the type of jeans that are the most popular that we need to
reorder more often, etc.
Payments at Rose and Ray’s Boutique can be made by cash, credit cards by VISA,
MasterCard, and American Express, or by check accepted with a valid ID. Products will be sold
through in store purchases as well as online. The purchase transaction in store will be made at
register located at the center of the store. Refurbished furniture purchases will be set up through
a consultation with me, so that we can go over pricing and design before I begin, then transaction
is made when masterpiece in complete.
I will obtain all merchandise for Rose and Ray’s Boutique at the Midwest Northstar
Fashion Exhibitors wholesale market in St. Paul, Minnesota. Also, I will take trips to the
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wholesale market in Las Vegas, Nevada. I will travel to these markets approximately 4 times a
year, and always be looking for the next seasons trends.
Rose and Ray’s Boutique will be open Monday through Saturday 9:00a.m-7:00p.m and
closed on Sunday all year round to start.
F. Proposed Promotional Program
Rose and Ray’s Boutique’s promotional program will consist of several objectives that
will help with achieving a certain amount of sales, as well as potential customers becoming
familiar with Rose and Ray’s Boutique and all we have to offer. These objectives will be
achieved with my personal promotion including participating in local events at high school and
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colleges around trading area, contacting potential customers though friendship connections,
social networking, discounts and giveaways, business cards, and visual displays at store and
around town. I will also be using non personal promotions including an advertisement in the
Rock Valley Bee, billboard, direct email, and direct mailing. Using these promotions will draw
in the customers who will help us to reach our objectives.
Objective #1: Create awareness of our opening day at Rose and Ray’s Boutique.
Personal Promotion
o Word of mouth connection through family and friends, social media campaign,
attend local events, work of visual displays around town.
Non Personal Promotion
o Post an advertisement in the Rock Valley Bee, design a billboard for entering
Rock Valley on the East side of town on Highway 18, and send out direct mail
and e-mail listing to potential customers.
Objective #2: Achieve $329,680 in sales in the women’s apparel category in the first year of
business.
Personal Promotion
o Visit tradeshows and gain knowledge on upcoming trends and keep in touch with
fashion market through looking at visual display and trickledown theory, and
make 5 monthly personal check up phone calls to customers who have purchased
merchandise at Rose and Ray’s Boutique.
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Non Personal Promotion
o Post an advertisement in the Rock Valley Bee, design a billboard for entering
Rock Valley on the East side of town on Highway 18, and send out direct mail
and e-mail listing to potential customers about what we have to offer.
o Offer promotions on social media sites that will get people coming in the door and
specific giveaways on existing products when a new shipment has arrived to get
people aware of new merchandise.
Objective #3: Achieve $20,800 in sales in the refurbished furniture category in the first year of
business.
Personal Promotion
o Visit craft shows and get ideas from expanding areas I go to find unique furniture,
go to painting and craft classes offered in Rock Valley, and get inspiration from
Pinterest and other online sources.
Non Personal Promotion
o Post an advertisement in the Rock Valley Bee, design a billboard for entering
Rock Valley on the East side of town on Highway 18, and send out direct mail
and e-mail listing to potential customers.
o Create a catalog of paint and finish options that would be available to potential
customers online as well as at other local businesses to show the variety of
refurbished furniture options are available to them at Rose and Ray’s Boutique.
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Objective #4: Achieve $8,736 in sales for the custom furniture category in the first year of
business.
Personal Promotion
o Spread awareness of services offered to potential customers by visiting local
businesses and having a tour of my work shop.
Non Personal Promotion
o Post signs in town that explain the service offered and a preview of the furniture
products that are sold at Rose and Ray’s Boutique. Post an advertisement in the
Rock Valley Bee, send out direct mail and email to potential customers, and
spread awareness through social media.
Objective #5: Achieve $2,340 in sales of an “add on” accessory when another product is
purchased in our store in the first year of business.
Personal Promotion
o Become familiar with the concept of mixing and matching, practice the “add on”
of a sale in the selling presentation techniques, and gain knowledge on where to
display items in store to be noticed. Train staff to always mention an “add on”
item when assisting a customer.
Non Personal Promotion
o Social media updates and a page that we will put an outfit together for you out of
the merchandise sold at Rose and Ray’s Boutique. Advertisements that include
the “add on” concept in the Rock Valley Bee, and in direct mail and email.
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G. Place and Distribution
Initially, I will set up inventory based on the predictions of the wants and needs of
potential customers in my trading area. From there, I will make adjustments and continuously
look for improvements based on the successes and failures of previous sales. In the fashion
world, you must be a season ahead of all the upcoming trends, so I will need to predict those
trends as I travel to different wholesale markets about 4 times a year. These will be held either in
St. Paul at the Midwest Northstar Fashion Exhibition, or in Las Vegas at the market. Inventory
will likely be delivered sporadically and because I want to get the new product in the hands of
our customers as soon as possible, I would like to designate down time of employees and myself
to get product out on the sales floor. Items will be conveniently delivered to our back door,
which is easily accessible for trucks to get to. Inventory checks will be done every Saturday
after business hours in order for me to obtain the information from each specific week to predict
future needs to order. Merchandise will be displayed in sections based on item and brand.
Although, in displays we may mix brands to show the versatility of the styles. All of the
purchases that are made for Rose and Ray’s Boutique will be made on a store credit card, in
which I will open a line of credit with a local bank and have to pay off a monthly payment.
The distributers that I will be in contact with when ordering for Rose and Ray’s Boutique
will be located at the wholesale markets that I will attend. Some of the suppliers that I have
chosen to work with are JACK by BB Dakota, Liverpool Jeans, Heart and Hips, TOMS, and
Rustic Charm.
The first primary supplier is JACK by BB Dakota, with whom I will have contact with at
the wholesale market in both St. Paul and Las Vegas. I will be discussing orders with them 4
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times a years, and always looking for the upcoming season. All orders will be delivered by UPS
ground services. Discounts will be offered if payment of order is paid within 30 days.
The second primary supplier is Liverpool, which is solely a denim product line. I will
also be discussing orders with them 4 times a year at both St. Paul and Las Vegas. I will have to
feel out my orders more since it is denim, which is a basic item that I will always want on hand
and in enough sizes that will apply to my customers. I will also find out which styles are popular
for my customers after a few months in. The product is also delivered by UPS ground services,
and also offers special discounts or recurring customers who pay within a certain time frame and
order within a certain time frame as well.
The third supplier is a secondary supplier, which is Heart and Hips, offering a lot of
basics for a reasonable price. I will be reordering from them 4 times a year at both of the
wholesale markets, and they offer over the phone ordering as well, because orders aren’t very
specific with basics. The products will be delivered by UPS ground service, and special
discounts are offered to reordering customers who pay within a certain time frame.
The forth supplier is TOMS shoes, which is another primary supplier. TOMS is a
company focused on their One for One mission. For every pair of shoes sold, a pair will be given
to a child in need oversees. The shoes are manufactured in places all over the world to provide
jobs in Argentina, China, Ethiopia, India, Kenya, and Haiti. I will reorder from them 4 times a
year for the season ahead, but will have to also feel this out because of the demand for different
sizes, etc. Shipping will be more expensive because product is made oversees and has to go
through UPS air and ground.
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The fifth supplier is Rustic Charm, which is a secondary supplier. This is a small local
independent dealer from Rock Valley. I will team up with her to offer products in our store to
promote her work, as well as work out some of the percentage of the sale I will receive. I will
order from her as much as needed, but possibly on a monthly basis. I am not going to have an
enormous amount of inventory on hand, but enough to be noticed. She will deliver all the
product for free to the store whenever I reorder.
G. Financial Statement Discussion
Rose and Ray’s revenue for year one is estimated by the research that I have done to
come up with volume per week, unit price, and total sales for all of the categories of merchandise
sold such as tops, bottoms, dresses, accessories, jewelry, refurbished and customized furniture.
The total sales projected for year one is $361,556. During the first year I have projected net sales
at $361,556. I have projected my cost of goods at 53.9% of net sales which is $194,879. The
projected Gross Profit for the first year is $166,667 or 46.1% of net sales. The total expenses for
the business in the first year are projected to be $155,973 or 43.1% of net sales. The total net
profit for the business $10,705 or 3% of net sales. During the second and third year I have
projected growth. During the second year I have projected a 7% growth in net sales which results
in an increase in net sales of $25,309. During the third year I have projected growth of $11,606
in net sales which is a 3% increase. The reasons that I have projected increases for each of the
two years are due to repeat sales. The repeat sales will be a result of satisfied customers coming
back multiple times. The other result of this established customer base will be an increase in new
customers attracted to the business through word of mouth and through effective advertisement
methods. I have calculated that the total amount of cash needed to start the business is $166,900.
The total cash needed is calculated by adding the total current assets, fixed and other assets, and
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pre-opening costs. As the business owner I am responsible for 30% of the total cash needed for
start-up. $50,070 is the amount that I am responsible for. The rest of the 70% is a total of
$116,830 and that portion will be acquired through a business loan from Wells Fargo Bank. The
total cash flow for year one that I have projected for year one is $6,209. There are many ways
that this money can be used. I believe that the best way to use this money would be to invest in
new inventory. Either expand one of the product lines that has been popular with our customers
or bring in a new line that I believe our customers will find value in. Year 2 total cash flow is
projected at $7,010, with an accumulated cash flow of $13,219. Year 3 total cash flow is
projected at $7,835, and the accumulated cash flow is $14,845. I am going to start by taking
$10,000 out from my personal savings. I’m going to borrow the remainder of the 40,070 from
my Uncle Steve and Aunt Bonnie DeRuyter. To start this business there will be a requirement to
obtain a small business loan of $116,830. I will obtain this loan from Wells Fargo Bank in Sioux
Falls, SD. One reason that I chose this bank is that I have been a customer for 5 years. Another
reason is that they are a strong bank with competitive loan rates. This external capital will be
used to fund the startup costs of the business which will include the purchase of fixtures,
decoration, and operating expenses, as well as opening day cash on hand and inventory. The total
interest expense of $26,534. The monthly payments will $1,706 a month. The loan terms for the
small business loan from Wells Fargo Bank are that the full loan amount will be paid back over 7
years at 6% interest.
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Advameg, Inc., 2015. Web. 09 Dec. 2015.
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