Fabric store business plan for starting your own business
Are you looking for how to start a fabric store online? A fabric store manufactures various types of fabrics. Depending on the business model, the fabric may be designed for indoor wear as well as for outdoor.
The business is profitable and has immense opportunities in research and improvement. However, to make sure that your startup yields the desired profit, it is required to make a detailed business plan, first.
To assist you in making one, we are providing sample business plan for a fabric store ‘Clara Fabrics’. If you are opening up a franchise then you must also read business plan for a franchise.
2.1 The Business
Clara Fabrics will be an online fabric store, however, for manufacturing operations the business will be based in San Jose. Besides, the fabric that is used for making daily wearables and clothes, the business will manufacture fabric for house accessories such as curtains, table tops, bed sheets and sport wear.
2.2 Management of fabric store
Without efficient management, your business is bound to doom no matter how much you invest. Therefore, you must thoroughly study how to start a textile company. Clara Fabrics will hire managers, technical assistants and other staff in hierarchical positions to ensure smooth working of manufacturing and sales branch.
Before opening a fabric store, it is essential to devise a fabric store business plan to ensure that you manage each aspect of your business well. You are recommended to hire business plan consulting service for the purpose. To have a general idea of how to start a fabric store you can take help from this blog.
2.3 Customers of fabric store
Following groups can be the potential customers of Clara Fabrics.
- Textile Stores
- Hotels & Motels
2.4 Business Target
Our business target is to establish a good name among all our competitors. Moreover, we aim to boost our sales on monthly basis while also maintaining customer satisfaction score. The financial targets are elaborated in the following graph.
3.1 Company Owner
Clara Mike will be the owner of Clara Fabrics. Clara is a textile engineer. She is kno
3.2 Why the fabric store is being started
Clara is starting a fabric store because of her exceptional ideas and research on designing super fine fabric. If she had opted for joining a company as an employee or even manager, she would not have been able to implement her ideas. Therefore she opted for opening a fabric shop herself.
3.3 How the fabric store will be started
Step1: Research and Plan
The first step is to do thorough research on how to start a fabric business. Following it, you’ll need to develop your business plan that covers all aspects from business goals to sales strategy. In case you don’t know how to open a fabric store you can take help from this fabric store business plan free of cost.
Step2: Set Targets
The next step is to set financial and non-financial business targets for your business.
Step3: Recruit and Finance
Following it, you must start recruiting the people you will need to run your business. Meanwhile, you will have to direct finances to each operation of your business.
Step4: Establish a Web Presence
Establishing a strong web presence is necessary even when you’re not operating online. It is because people today are more likely to search for your business on the web and read reviews before making a purchase.
The last step is to market your business so to reach your target audience and gain more and more customers.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$269,400|
|Other Current Assets||$251,000|
|Start-up Expenses to Fund||$269,400|
|Start-up Assets to Fund||$922,800|
|TOTAL FUNDING REQUIRED||$1,192,200|
|Non-cash Assets from Start-up||$1,202,300|
|Cash Requirements from Start-up||$144,300|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$34,300|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$61,100|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,192,200|
|Loss at Start-up (Start-up Expenses)||$159,160|
|TOTAL CAPITAL AND LIABILITIES||$1,430,900|
Services of fabric store
Before starting textile business it is essential to specify the products you want to manufacture. It is because the business activities are diverse and your fabric store franchise can end up as a failure if you don’t know for what you are opening a fabric store. In this fabric shop business plan we’re listing the services of Clara Fabrics.
- Fabric for Dailywears
We’ll create and sell ultra-fine, light-weight and durable fabric to be used for sewing for dailywear clothes. The fabric will be designed for clothes for men, women as well as kids.
- Fabric for Home Accessories
We will also manufacture fabric for making house accessories such as bed sheets, curtains, tabke covers etc.
- Fabric for Sportswear
We’ll also manufacture resilient, washable and durable nylon fabric that can be used for designing outdoor sportswear.
- Upholstery Fabric
We’ll also manufacture velvet, ticking, demesk to be used as furniture fabric.
Marketing Analysis of fabric store
Marketing analysis deals with analysing your standing in the market as well as your prospective customers. It is an essential task even while making business plans in cases where target customers are obvious such as business plan for video game store or business plan for a liquor store.
It is important because based on this analysis you will have to change and adjust certain aspects of your business. For instance, if there are abundant businesses that provide fabric for daily wear clothing, you might choose to rather make fabric only for wedding wears or upholstery.
For this purpose, you can take data from statistical department of your respective locality. The market trends observed in this business plan belong to global U.S. market to give you a generic idea.
5.1 Market Trends
Due to everlasting demand of clothes and upholstery, textile design business has never-ending scope. According to IBISWorld, the current market size of textile trading business stands at $4bn in the U.S. More than 29k businesses are successfully running in the U.S. and due to global market size, there is room for more.
5.2 Marketing Segmentation
Before starting a fabric store business, you must research on how to start a fabric store business. However, to carry on research in a more targeted way, you will first need to know your customers.
In this textile business plan sample pdf we’re listing the market segmentation done by Clara Fabrics. As you make your textile business plan and search on how to start a textile business you should also dividing whole population into targeted customer segments.
Men and women of all ages are expected to be our major customers. It is because many people prefer to directly buy unstiched fabric to get the costume designed as per their needs.
Second category of our target customers will be families. They are expected to also procure from us the fabric that’s used in making upholstery covers and house accessories.
5.2.3 Textile Stores
The third category of our target customers comprise of textile stores. They are expected to acquire all of our products in mass amounts.
5.2.4 Hotels & Motels
Last, hotels and motels will also purchase fabric from us for keeping up their rooms and furniture.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
|Hotels & Motels||18%||22,210||26,652||31,982||38,379||46,055||11.00%|
5.3 Business Target
- Maintaining a CSAT score of more than 92% from the first day of our launch
- Start making fabric for wedding wear as well after 5 years of our launch
5.4 Product Pricing
The price of our fabric is a little higher than that of our competitors. However still we expect to gain more customers due to our competitive benefits and the extra-ordinary quality of our fabric.
Marketing Strategy of fabric store
In this sample business plan for textile industry on how to start textile business, we’re providing the marketing strategy of Clara Fabrics. However you may also study business plan for retail clothing for more advertisement ideas.
6.1 Competitive Analysis
- Our fabric is super-fine and resilient. Clara’s research was declared top-tiered because of the newer type of fabric she successfully created.
- Our web presence is very strong. We have hired expert SEO writers and graphic designers to design targeted ads.
- Our topmost priority are our customers. Our policies designed to assist them in all cases will also enable us to get more customers.
6.2 Sales Strategy
You can see the sales strategy of Clara Fabrics in this fabric store business plan free of cost.
- We’ll offer a 15% discount on all of our products for first three months of the launch.
- We’ll offer a 20% discount to retail stores after they make a purchase beyond certain limit.
- We’ll run social media campaigns to get known to a wider audience.
- We’ll offer a 7% discount to all our customers who reside outside of the U.S.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|Fabric for Dailywears||15,500||16,430||17,416|
|Fabric for Home Accessories||16,500||17,490||18,539|
|Fabric for Sportswear||14,000||14,840||15,730|
|TOTAL UNIT SALES||59,500||63,070||66,854|
|Unit Prices||Year 1||Year 2||Year 3|
|Fabric for Dailywears||$75.00||$87.00||$100.92|
|Fabric for Home Accessories||$80.00||$92.80||$107.65|
|Fabric for Sportswear||$55.00||$63.80||$74.01|
|Fabric for Dailywears||$1,162,500.00||$1,429,410.00||$1,757,602.54|
|Fabric for Home Accessories||$1,320,000.00||$1,623,072.00||$1,995,729.33|
|Fabric for Sportswear||$770,000.00||$946,792.00||$1,164,175.44|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Fabric for Dailywears||$20.00||$22.00||$23.10|
|Fabric for Home Accessories||$25.00||$27.50||$28.88|
|Fabric for Sportswear||$14.00||$15.40||$16.17|
|Direct Cost of Sales|
|Fabric for Dailywears||$310,000.00||$361,460.00||$402,304.98|
|Fabric for Home Accessories||$412,500.00||$480,975.00||$535,325.18|
|Fabric for Sportswear||$196,000.00||$228,536.00||$254,360.57|
|Subtotal Direct Cost of Sales||$1,161,500.00||$1,354,309.00||$1,507,345.92|
Personnel plan of fabric store
While making your fabric store business plan it is essential to take down the list of employees you will be needing alongwith their job descriptions.
In this sample plan on how to start a fabric business we are providing the peronnel plan of Clara Fabrics.
7.1 Company Staff
Clara will be the CEO herself. The employees she would hire are:
- 1 Sales Manager
- 1 Operations Manager
- 2 Textile Engineers
- 6 Technical Assistants
- 1 Store Operator
- 1 Accountant
- 1 Web Developer
- 2 Cleaners
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
Financial Plan of fabric store
No business can survive without a detailed and accurate financial plan. What to talk of a fabric shop business for sale financial plan is even required in making business plan for farmers market.
Businesses of the type of fabric store involves complex transactions due to inter-mingling of operations between sales and manufacturing branches. It is thereby necessary to develop a detailed financial plan as given in this plan on how to make money selling fabric.
Clara hired a business consultation expert to develop business plan for Clara Fabrics. If you’re stepping in this business, you too are recommended to so the same. It is because startup and investment are not the things to do experiment with. If you are a newbie or if you do not have experience making financial plan, it is advised to hire professionals for it.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$1,161,500||$1,354,309||$1,507,346|
|TOTAL COST OF SALES||$1,161,500||$1,354,309||$1,507,346|
|Gross Margin %||71.41%||72.89%||75.46%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$571,850||$615,365||$669,007|
|Profit Before Interest and Taxes||$2,329,150||$3,025,576||$3,965,807|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
1. How do I start a fabric business?
You can start fabric business by making a fabric shop business plan and executing it.
2. How do I market my fabric?
To market your fabric, you can use digital as well as print media. These days, social media platforms are one of the best form to undertake this task. For elaborate ideas, you can visit the sales strategy of this sample business plan for a fabric store.
3. Is fabric business profitable?
Yes! It is immensely profitable provided that you plan and launch it successfully.
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.