Clued - Business report PDF

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Clued Business Description Prime Function: Clued is the newest innovation for the fashion industry that sets aside the norm in today’s shopping and provides a creative twist on clothing. The business will provide a range of generic staples in clothing for both men’s and women’s fashion with an LED screen embedded into the clothing. This LED screen will connect to the user’s phone via Bluetooth to provide the selected design of choice for the consumer. Designs will be made/found in the companion app under the same name. Users will be able to connect their Clued product to their mobile device via Bluetooth to apply their design on their Clued product. The consumer can either make their own design or explore the vast array of designs made by the community via the accompanying app.

Business Mission Statement: As a business we aim to have our product in leading retailers throughout the world and diversify the catalogue of Clued to accessories in addition to clothing. Clued is also made to combat the bland baseless nature of fashion currently where clothing is replicated and has no real creativity. To some having taste in fashion means wearing name brands and haphazardly combining these articles of clothing blindly. This inspired the slogan of “For a world without art” ™. With the introduction of Clued the fashion industry will change to a place where creativity is the main component and not just money. During the first year of operations our business aims to break even or make a profit. This would be feasible as the cost of production is quite low and the idea itself has never been seen at the level that we intend to push it to.

Business Goals/Objectives: As a business we aim to  Break even or make a profit. This would be feasible as the cost of production is quite low and the idea itself has never been seen at the level that we intend to push it to.  Reach a 40% profit margin.  Maintain a consumer base of more than 2000

Personal Goals:    

Provide clothes with LED lights and engineer them to make them waterproof and rollable. Safety is a priority for our business, so this is essential for us. Manufacture high quality product with the least amount of defects and issues whilst also maintaining an ethically made product. Having a reliable staffing system such that communication is easy and plentiful. Our business aims for high communication between staff as well as our customers. Make clothing for a complete age range and diversify into accessories as well.

Location: Clued will begin operations online and sell through PayPal until the funds rise for the business to expand into a brick and mortar store. This store will most likely be situated in Central Sydney as this is a fashion district where high end brands such as Off-White, Gucci, as well as niche streetwear clothing stores can be found like Supply and Espionage. A location at 1/141-143 Elizabeth Street Sydney NSW 2000 is the perfect location for Clued’s first store as it is previously owned by Ugg Boots, which is another retail company thus the spacing would be optimal. In addition, foot traffic is plentiful here as not only are brands such as Hermes, Levendi, Calibre and David Jones neighbouring the store but there is also St James Station situated opposite of the store. The store is also at the intersection of Elizabeth Street and Market Street thus allowing for more foot traffic making it the most optimal location for the store. On the other hand, this market lot would be quite expensive so it may take a while for the business to amass enough funds for the purchase of the store.

Legal Structure: The most optimal legal structure for Clued is to start as a partnership or sole trader. For Clued it is in the best interest for the business to start as a partnership as this splits the costs by 50% to evenly distribute the costs. This would be best as well as normally in partnerships there is the issue of needing to split decisions but in this scenario not many decisions need to be made regarding the product. The only cause for issue is that finding a partner passionate about changing the clothing business would be hard. This is due to the fact that those of which who have an interest in fashion would be hesitant to be included into Clued as this product has the potential of making fashion designers redundant. This would be a significant issue to find a business partner but when done will give the business the push it needs to succeed. Once Clued has amassed enough funds to sustain themselves then the business can turn into a limited liability company to limit the amount of liability as well as a way to expand into a company with multiple staff.

Licensing and Legal Requirement: The patent that Clued is under (WO2017125937A1) does not affect Clued in any way. The patent details that they have a patent on “digital T- shirt, having a control unit, which would be stitched to the T-shirt, would essentially contain all circuit trees, fully waterproof and washable” (Quoted from the patent by Nagubandi Ayyappa). This allows Clued to start manufacturing without any problems regarding patenting. Registration of the business name Clued will be easy

as the name has not been registered. In addition to this clued.com as a domain has not been taken thus allowing a smooth transition into selling. For registration of the business, applying for the ABN would be relatively easy and free. Registration of the business and business website is easy as Clued has not been taken (as of 20th-Aug-2019).

Staffing Requirements: As a business the intention is to start as a partnership and then turn into a limited liability company once the business has enough profits to handle the taxes of limited liability companies. In the beginning, the business will have two partners who handle the managerial side of the business whilst still being online. Once a physical store is made, then more staff would be needed. As Clued is not intending to be 24/7, thus we aim to exist as a micro business with up to 5 employees at a time. Once the business expands enough, we will be able to employ more and more people to work both in the store as well as in the factories to ensure smooth sailing.

Marketing Plan Marketing Objectives: As a business we aim to  Have a significant following (1000+) in the first year on both Instagram and Facebook whilst spending the least amount of money to do so.  Engage in the streetwear community and have our brand be known. This can include marketing and doing giveaways on Facebook groups such as Underground Society and WCW. Competition: When it comes to competition it's quite minimal. The only other company that utilises this is called Broadcast Wearables, a company based in Hyderabad, India. Their approach to LED clothing is that of a gimmick such that their clothes are just something cool to wear with lights. At Clued we intend to incorporate our LED shirts in a way such that the LED portion is sectioned off inside a box, so it fits into modern day fashion. In regards to the competition near our location ( 1/141-143 Elizabeth Street Sydney NSW 2000) there is a surplus of fashion stores. Despite this, Clued will prosper as many of these stores are name brands thus are fairly expensive. Our clothing will be competitively priced to attract a higher rate of customers. As mentioned previously, our business has no cause for concern is regards to the LED shirt market as Broadcast Wearables has not made a splash outside of India. Target Market At Clued our target market at the beginning will range from 16-30 as we intend to make clothing that fits the aesthetic of today's clothing whilst also incorporating the LED strip into the clothing. As our business grows, we will be able to facilitate more styles. We aim to sell our product to those who are creative and artistic so that our product can give them the opportunity to show their talent.

Swot Analysis: Strengths: Our business will be versatile when it comes to trends in fashion as millions of designs can be made via the LED’s of the clothing/accessories. As a collective we pride ourselves on a firm

belief that high levels of communication leads to high levels of efficiency when working as a team. This belief is and will be universal in our business to ensure that we work to the best of our ability. This communication also extends to our consumers who we can work with to create the best possible product. Weaknesses: In regard to weaknesses, the business will face many obstacles about safety concerns as well as durability. Working with electronics that must be washed will be a tough feat to perfect thus requiring many workers to engineer. Also, these workers will need to ensure the durability of the product is high and does not diminish after minimal use. Opportunities: At Clued we have a product that has not been fully rolled out at the degree that we intend to reach. Our concept for our product has not been seen in Australia thus there is a space for Clued. In addition, the concept has been done by many companies but Clued intends to revolutionise fashion instead of providing a gimmick. Threats: A significant threat to our business is the uncertainty of whether customers will take a gamble and try out our clothing. As our product differs far outside of the norm, many customers would be hesitant to purchase unless they hear good reviews and feedback. As well as this is the cost of manufacturing is relatively unknown. In addition, one safety issue can cause a severe toll on our business as the idea is relatively new. One accident in regard to the safety can affect the business's sales detrimentally.

Marketing: Clued will market via social media platforms such as Instagram, Snapchat and Facebook. This suits our business well as our product is out of the norm, thus it can attract a variety of customers thus reaching far more people in comparison to other marketing strategies. We will also be active in Facebook groups and Reddit communities about streetwear to get our brand across. Once the physical store comes the foot traffic and word of mouth will propel us forward thus making an ease on marketing. Marketing Mix: Price: Our product will be competitively priced to the clothing market. This will suffice as we include an LED panel in addition to the high quality base clothes we use.

Product: Our product will be made on Gildan™ to provide the best quality for a good price. We will be manufacturing overseas will safe and reliable LED panels.

Promotion: Our promotion will mainly be done on social media to attract our target demographic. To ensure we attain the attention of consumers we will be active in prominent Facebook groups and Reddit communities for streetwear.

Process: We will start off online and sell via PayPal once the website is set up. Once we get the product from overseas, we will ship our product out to the consumer. In the early stages we will only be shipping to Australia and New Zealand until we amass enough profits to branch out.

Pricing: As a business we aim to price our clothing competitively to incentivise customers into trying our product. We will be using Gildan T-shirts and Hoodies for the base component on the product. Brands like VLONE and concert merchandise use Gildan to print on for their cheap price and high quality. To buy 25 black and 25 white T shirts this will cost $271.5($4.4 per white T-shirt and $5.2 per black T-shirt). For the same quantity for hoodies the cost will be $927.5(18.55 per hoodie). Manufacturing the LED panel into the clothes will take a lot of funds to perfect. This is without mentioning the manufacturers cut after putting in the panel. An estimated $5,000 will be needed to ensure a safe and bendable LED panel. Per item the manufacturers would take 4 dollars. This leads to the cost of the product to be approximately $12 for the T-shirts and $26.5 per hoodie. We will be selling the T shirt for $30 and hoodies for $45. This gives a profit margin of 60% for the T-shirt and 44.44% for the hoodie.

Financial Plan (For when the company is a partnership): Start-up costs for Clued. Fee

Cost (AUD)

Cost (AUD) Annual

Company Registration

$660 + accountants fee

$660 + accountants fee

Business Name Registration(3yrs)

$85

$29

Domain Name

$125 per year

$125

Website

$6000

Trademark

$250

Engineering Design

$5000

Website Maintenance

$30 per month

$360

Insurance

$2400 per year

$2400

Internet

$100

Business PayPal/Setup

$50 $14700

The cost of start-up is $14700 and will be funded by the two partners. The initial deposit by both partners is $20,000 each. From the sales forecast we need at least $70,000 for

the first month. Therefore, we are planning to secure $90,000 with working capital to run the business smoothly. This money can be made up by a bank loan as well as a contribution by the two partners. There is a $50,000 bank loan that will be repaid in 10th month(see Sales forecast for more information on the last page.). Item

Cost

Gildan T shirt

$6

Integration of LED

$4

Postage

$2

Per Unit Cost =

$12

Item

Cost

Gildan Hoodie

$18.5

Integration of LED

$6

Postage

$2

Per Unit Cost=

$26.5

Future Prospects: For the future of the business we intend to expand internationally and revolutionise fashion and promote creativity into what you wear. After the 6th month there has been a steady profit thus allowing for expansions into different states as well as diversification into different products. These products will include (but not limited to) bags, shoes, jackets, windbreakers and many more. At Clued our end goal is to see our product in leading retailers around the world and have our brand be readily accessible to those willing to purchase....