Business Plan

on
Nike Shoe Store Franchise Business Plan
(Nike’s Foot)

Submitted By:
Name ID
Nirob Dhilon Chowdhury 18-91067-3
Satil Manzoor 18-91066-3
Jahangir Alam 18-91068-3

Under the supervision of

Faculty: Mr. S. M. ZAKARIA SIR

American International University-Bangladesh

Faculty of Business Administration
Course Title: Corporate Entrepreneurship And Entrepreneurial Management
EMBA Program
Summer Semester 2018-19

Date of Submission: 7th August 2019

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07, August, 2019
To
S.M. Zakaria
Faculty of Business Administration
American International University-Bangladesh Kuratoli, Dhaka.

Subject: Entrepreneurship strategy to a new business.

It is indeed a great pleasure for us to be able to hand over the result of our hardship on
preparing the report on Developing Training entrepreneurship. This report is the result of
the knowledge which has been acquired from the respective course.
We tried our level best for preparing this report. The information of this report is mainly
based on entrepreneurship information. Some other details were gathered from the
development of that company. All of us gave our hundred percent for making this report
come together.
We, fervently hope that you will find this plan worth reading. Please feel free for any
query or clarification that you would like us to explain. Hope you will appreciate our hard
work and excuse the minor errors. Thanking you for your cooperation.

Sincerely,
Nirob Dhilon Chowdhury
& the group members

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 ACKNOWLEDGEMENTS

I would like to express my special appreciation and thanks to my advisor Professor MR.
S. M. Zakaria, you have been a tremendous mentor for us. We would like to thank you
for encouraging us and your advice for this case study. We would also like to thank my
group members, for serving as a committee member even at hardship. We also want to
thank you for letting my defense be an enjoyable moment, and for your brilliant
comments and suggestions, thanks to you.

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Sl. Particulars Page

Executive Summary
1 4

2 Objectives & Mission 5

3 Company & Start-up Summary 6

4 Products & Market Analysis Summary 10

5 Market Segmentation 11

6 Competition and Buying Patterns 12

7 Strategy and Implementation Summary & 13

Sales Strategy

8 Management Summary & Financial Plan 14

9 Projected Cash Flow 15

10 Cash Flow 16

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Executive Summary

Tangail is a growing city next to the capital city with multiple numbers of educational
institutions. Due to the expansion of industrialization outside capital city, Tangail is
growing faster than earlier. Construction of Zamuna Bridge brought a new level to the
economy of the city. Lifestyle of the residence is changing as well. The Nike Shoe store
in Tangail Press Club Market will become the athletic footwear headquarters for the city
of Tangail, Bangladesh. The location is in the heart of the city and surrounded by
educational institutions like Bindubashini School, Shaed Cadet, Tangail Medical College
and others. The location is just opposite to the Tangail Stadium and 1km away from city
park.

There are 29,000 school-aged children, of which over 11,000 participate in the city's 16
structured athletic programs. There are 27 schools, with varying degrees of athletic
programs, within three miles of the proposed location.

There are 57,000 adults between the ages of 20 and 54 within three miles of the center.
That is the prime age of Tangail's running community. There are no stores in Tangail
which offer a collection of "serious" running shoes, or offer the novice or "less serious"
runner a quality selection and education on the proper style, fit, and sizing for their
needs. But there is an existing demand of such shoes.

The Nike at Tangail will focus on the above two market segments. By capturing those
primary customers, the balance of residents with sports shoe needs will be drawn to us,
the obvious headquarters for athletic footwear.

The store will be named as “Nike’s Foot” and it will be located at the intersection of
Stadium Road and Main Road. 

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Objectives

The primary objectives of the business plan for The Nike's Foot are outlined below.

1. To make The Nike's Foot the headquarters for athletic footwear by offering
knowledgeable and professional customer service. Customer service will be
measured through repeat business.

2. Our goal is that 50% of our customers will return within 6 months for an
additional purchase and multiple sales.

3. Our goal is that 30% of our non-running and 60% of our running shoe sales are
accompanied by an additional purchase.

4. To achieve a 33% increase in sales year two and maintain a minimum annual
increase of 15% thereafter

Mission

The Nike's Foot is a retail store specializing in the sale of true athletic footwear for the
entire family. The store wills emphasis the sale of children's athletic shoes and a full
assortment of men's, women's, and children's running shoes and accessories. We will
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provide consumers with technical knowledge on the proper fit and style of athletic
footwear for their various needs. We will be the only full-service athletic footwear store
with quality, knowledgeable sales help in this city of 100,000 people.

Company Summary
The Nike's Foot sells quality athletic footwear for the entire family, specializing in
running shoes and accessories. We have selected a location in a renovated shopping
center anchored by Walton, Dorji Bari, Game Zone and four restaurants. The balance of
tenants caters primarily to children. The quality of our customer service and the lack of
competition in the city will allow us to quickly become the footwear headquarters for the
local individual athlete and various teams, leagues and schools. This Nike's Foot store,
while part of a worldwide chain, will be family owned and operated.

Start-up Summary

The start-up costs include:

 Store build out the store and operations 

 Inventory control, (computers and cash registers)

 The foot scanner and fixture

 Opening inventory

 Franchise Fee.

Start-up costs will be financed through a combination of owner investment, short-term

loans and lines of credit, and long-term borrowing. The start-up chart and table show the
distribution of the planned financing.

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 Investment Chart

START-UP FUNDING

Start-up Expenses to Fund $58,0

Start-up Assets to Fund $184,0

TOTAL FUNDING REQUIRED $242,0

Assets

Non-cash Assets from Start-up $156,0

Cash Requirements from Start-up $28,0

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Additional Cash Raised $0

Cash Balance on Starting Date $28,0

TOTAL ASSETS $184,0

Liabilities and Capital

Liabilities

Current Borrowing $20,0

Long-term Liabilities $150,0

Accounts Payable (Outstanding Bills) $2,0

Other Current Liabilities (interest-free) $0

TOTAL LIABILITIES $172,0

Capital

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Planned Investment

Investor 1 HKL $70,0

Investor 2 $0

Other $0

Additional Investment Requirement $0

TOTAL PLANNED INVESTMENT $70,0

Loss at Start-up (Start-up Expenses) ($58,000)

TOTAL CAPITAL $12,0

TOTAL CAPITAL AND LIABILITIES $184,0

Total Requirement $242,0

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Products
The Nike's Foot will sell the latest and most popular name brand athletic footwear for the
family. Consumers will be educated as to the proper size, style, fit, and design needed for
their particular use and foot characteristics. We will offer athletic footwear and
accessories for almost every sport and active use. We do not intend to initially sell golf
shoes or skates.

The shoes are purchased from the top manufacturers in the world, made possible through
The Nike's Foot Corporation's 700-store buying power. Names such as Nike, Adidas,
Puma, Converse, New Balance, Asics, Saucony and Brooks are just a few of the styles
we will be stocking. Inventory is tracked through our online cash register and
computerized tracking system. Each day we are aware of the style, size, and quantity of
every item sold in the store. Re-orders are drop shipped by the manufacturers, or can be
rush ordered directly from The Nike's Foot warehouse, if needed.

Market Analysis Summary

There are approximately 110,000 residents living within three miles of Tangail Press
Club Market. Twenty-six percent, (29,000) are between the ages of five and nineteen.
Fifty-two percent, (57,000) are between the ages of twenty and fifty-four. Tangail has one
of the strongest youth athletic programs in the country. There were 11,359 children
participating in the 16 various sports programs throughout the year. In addition, through
the Tangail Club and other non-municipal sponsored leagues and programs there is an
additional 3,500 children participants. This does not include the residents of neighboring
cities like Mirzapur and Shokipur, which are within the market area and have an
additional 3,000 participants. The city has 7 public parks, of which the 3 largest are
devoted solely to athletics. The three-mile radius has four high schools, four middle
schools, and 14 elementary schools in the public school system. There are an additional
five private schools and three new schools planned for the next 18 months. Tangail is a
young, active community, with outdoor sports played year round. The need for cold

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weather boots and shoes does not exist in Tangail, therefore, athletic shoes are worn year
round.

The residents of Tangail are in the upper income brackets, with an average income of
approximately $68,00 per year. Eighteen percent of the area's population earn in excess
of $100,00 per year. In the next three years, that percentage is expected to increase to
25%. This affluent, active resident is willing to buy the latest in athletic footwear, if the
service and assortment are strong

To recap, our target markets are:

1. The True Athletic Adult

2. The True Athletic Participant Children.

By serving these customers well, the balance of the less active community will identify
The Nike's Foot as the athletic footwear headquarters.

Market Segmentation

The Nike's Foot feels there are two types of customers the store needs to attract: the
Runners and the Non-runners. These groups are subdivided in the following sections.

1. Runners

"True Runner" - Runs between 20 - 40 miles per week. This person is generally between
30 - 45 years old, both male and female. This segment may also include high school
track and cross country runners. This person wants the latest in technology, regardless
of price. 

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 2. Non-runners

Non-Runners- While not a high volume, the first pair of shoes for most
infants/children is an athletic style. The first pair of Nikes or Pumas can be a very
proud moment in a young family's development. Being able to properly measure
and fit an infant's foot is critical to developing a following in this market segment.
Credibility in the sales to the parents or older sibling will determine if you receive to
opportunity to serve the newest member of the family. There are approximately
6,000 children below the age of five within three miles of the proposed location. 

Competition and Buying Patterns

When purchasing athletic footwear, customers need a knowledgeable sales person to

guide them to the proper shoe. By offering our exclusive Nike's Foot Computerized
Scanner, as well as extensively trained associates, called Fit Technicians, we will provide
the most sophisticated service in the market.

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The competition will come from discount department stores (Infinity, Apex, Bata), and
discount "rack" shoe stores (Payless, Rack Room, Famous Footwear). These stores will
serve the non-participant athletic shoe customer, which is not a primary customer of ours.
We will carry an assortment of discontinued and clearance shoes, which should help us to
be competitive with these stores.

Strategy and Implementation Summary

The Nike's Foot uses a strategy of providing a service to the entire market. While we will
focus on our two primary customer segments (active families and runners), we offer a
product that virtually every consumer requires.

Strategic Assumptions:

1. Every resident in Tangail is a potential customer.

2. This location and co-tenancy gives us an opportunity to draw customers from

outside Tangail.

3. By marketing to our two target segments, we will expose ourselves to additional

new customers.

4. We will aggressively pursue the community sports programs through

sponsorships.

5. We will build a running club/program, that caters to the "average" runner, versus

the other clubs which cater to a more serious competitive runner.

Sales Strategy

All potential sales will be attended to in a timely fashion. While there will be a sales
incentive bonus program, long-term salesperson relationships will take precedence over
sales closures. Our goal is that 50% of our customers return within six months. We will

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market directly to the customer through mailings, phone calls, league presentations, and
Internet/email contact.

Sales associates will be trained to "turn-over" a customer who has a more specialized
need, if they cannot fully service the requirement.

Special orders will be encouraged as a method to satisfy a specialized need. We will

enforce as liberal a return policy as possible. Because of our affiliation with the 700-store
Nike's Foot chain, we can demand a higher level of service from vendors in regards to
returns and special orders.

Management Summary
The Nike's Foot Franchise will be owned by Mr. Nirob & Mr. Satil. Nirob has been a
Supply Chain Manager for last 5 years in a retail business. Satil is the President of BB
Ltd.., which manages, leases, and develops 1 thousand sq. ft. of retail property in Dhaka.
Nirob will run the daily operations of the business, including community relations. Satil
will continue in his current position at BB Ltd., but will assist in the buying, financial
planning, and weekend coverage.

Financial Plan
Sales growth will be aggressive the first 18 months as we sharpen our merchandise
assortment, size scales, and stock levels to better meet our customer's requirements. We
anticipate a sales increase of 33% during our second year of operation.

Marketing will continue to average 3% of total sales.

We will invest residual profits into reducing debt and the lost income from large cash
holdings.

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Company expansion, while not a necessity, will be an option if sales projections are met
and/or exceeded.

Projected Cash Flow

We are positioning ourselves as a minimal risk concern, with steady cash flows. While
we have not accounted for it in the projections, we anticipate receiving two or three
months free base rent after store opening. That will help us reduce costs and increase
marketing during the start-up period. We have allowed for a more aggressive cash
balance initially, to allow us to react quickly to unforseen merchandise needs, missed
classifications, "hot item" reorders and hopefully, higher than anticipated sales. This is
particularly important for our first back to school and holiday sales periods. If we capture
previous "mall customers" as anticipated, our sales could increase as much as 25% during
the first two quarters of operations.

Once we have established a required cash balance level, (approximately six months after
opening), we will reduce the projected cash balance to decrease debt and decrease the
opportunity of cash held.

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Conclusion

A business plan is not just a lengthy document that helps us get a loan or secure backers,
even though that might be the reason we’re putting it together. A business plan is a
thorough examination of whether our business idea is viable. Preparing our business plan
in the early stages of developing our company can save you a great deal of time, money
and heartache by showing us where the weaknesses in our idea lie and giving us a chance
to correct them before we make any serious mistakes, whether with our money or
someone else’s.

Our business plan will present a snapshot of our company at one moment in time. Since
our company will constantly be changing, our business plan will quickly become
outdated. However, the formal plan we create will serve as a document that we can look
back on any time our business is struggling or we are having doubts about its direction.
Consulting our plan at times like these can show us if we are on the right track. Perhaps
we've strayed from our plan and need to return to our original ideas. On the other hand, if
we are on track with the plan and things just aren't working, the business plan will allow
us to easily examine every detail of our business and see where we need to make changes
to improve our business model.

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Thank You

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