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JUN.16, 2022

Fabric Store Business Plan Sample

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Fabric Store Business Plan Sample

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    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 for 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.

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    Executive Summary

    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 sportswear.

    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 the smooth working of the 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 the fabric store

    The following groups can be the potential customers of Clara Fabrics.

    • Individuals
    • Families
    • 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 every month while also maintaining a customer satisfaction score above 95. The financial targets are elaborated in the following graph.

    Fabric Store Business Plan - 3 Years Profit Forecast

    Company Summary

    3.1 Company Owner

    Clara Mike will be the owner of Clara Fabrics. Clara is a textile engineer. She is known for her excellent management skills and knowledge of innovations in the textile industry.

    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.

    Step5: Market

    The last step is to market your business to reach your target audience and gain more and more customers.

    Fabric Store Business Plan - Startup Cost

    Start-up Expenses  
    Legal $144,300
    Consultants $0
    Insurance $25,100
    Rent $34,400
    Research and Development $10,000
    Expensed Equipment $52,200
    Signs $3,400
    TOTAL START-UP EXPENSES $269,400
    Start-up Assets $244,400
    Cash Required $181,000
    Start-up Inventory $35,100
    Other Current Assets $251,000
    Long-term Assets $211,300
    TOTAL ASSETS $922,800
    Total Requirements $1,192,200
    START-UP FUNDING
    Start-up Expenses to Fund $269,400
    Start-up Assets to Fund $922,800
    TOTAL FUNDING REQUIRED $1,192,200
    Assets
    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
    TOTAL ASSETS $1,430,900
    Liabilities and Capital
    Liabilities $18,440
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $61,100
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $79,540
    Capital
    Planned Investment $1,192,200
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,192,200
    Loss at Start-up (Start-up Expenses) $159,160
    TOTAL CAPITAL $1,351,360
    TOTAL CAPITAL AND LIABILITIES $1,430,900
    Total Funding $1,192,200

    Services of fabric store

    Before starting a 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 what you want to provide to your customers. In this fabric shop business plan we’re listing the services of Clara Fabrics. If you are opening a fabric store, you can take help from here.

    • Fabric for Dailywears

    We’ll create and sell ultra-fine, lightweight, and durable fabric to be used for sewing daily wear 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, table 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, and demask to be used as furniture fabrics.

    Marketing Analysis of fabric store

    Marketing analysis deals with analyzing 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 a 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 wear or upholstery.

    For this purpose, you can take data from the statistical department of your respective locality. The market trends observed in this business plan belong to the global U.S. market to give you a general idea.

    5.1 Market Trends

    Due to the everlasting demand for 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 the 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.

    Fabric Store Business Plan - Marketing Segmentation

    5.2.1 Individuals

    Men and women of all ages are expected to be our major customers. It is because many people prefer to directly buy unstitched fabric to get the costume designed as per their needs.

    5.2.2 Families

    The 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 comprises 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.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Individuals 30% 44,200 53,040 63,648 76,378 91,653 10.00%
    Families 28% 34,200 41,040 49,248 59,098 70,917 10.00%
    Textile Stores 24% 24,430 29,316 35,179 42,215 50,658 10.00%
    Hotels & Motels 18% 22,210 26,652 31,982 38,379 46,055 11.00%
    Total 100% 125,040 150,048 180,058 216,069 259,283 10%

    5.3 Business Target

    It is important to include targets in your business plan whether it is for maternity clothing business plan or whole sale business plan. 

    • 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 extraordinary 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 is 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 the first three months of the launch.
    • We’ll offer a 20% discount to retail stores after they purchase beyond a 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

    Fabric Store Business Plan - Sales Monthly

    6.4 Sales Yearly

    Fabric Store Business Plan - Sales Yearly

    6.5 Sales Forecast

    Fabric Store Business Plan - Unit Sales

    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
    Upholstery Fabric 13,500 14,310 15,169
    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
    Upholstery Fabric $60.00 $69.60 $80.74
    Sales
    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
    Upholstery Fabric $810,000.00 $995,976.00 $1,224,652.09
    TOTAL SALES $4,062,500.00 $4,995,250.00 $6,142,159.40
    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
    Upholstery Fabric $18.00 $19.80 $20.79
    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
    Upholstery Fabric $243,000.00 $283,338.00 $315,355.19
    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 along with their job descriptions.

    In this sample plan on how to start a fabric business we are providing the personnel 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

     Personnel Plan      
    Year 1 Year 2 Year 3
    Sales Manager $31,500 $34,650 $38,115
    Operations Manager $31,500 $34,650 $38,115
    Textile Engineers $55,400 $60,940 $67,034
    Technical Assistants $164,500 $180,950 $199,045
    Store Operator $22,450 $24,695 $27,165
    Accountant $22,450 $24,695 $27,165
    Web Developer $22,450 $24,695 $27,165
    Graphic Designers $42,400 $46,640 $51,304
    Total Salaries $392,650 $431,915 $475,107

    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 involve complex transactions due to the 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 a business plan for Clara Fabrics. If you’re stepping into this business, you too are recommended to do the same. It is because startup and investment are not the things to experiment with. If you are a newbie or if you do not have experience making financial plans, it is advised to hire professionals for it.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.12% 8.20% 8.26%
    Long-term Interest Rate 8.40% 8.44% 8.47%
    Tax Rate 24.03% 24.21% 24.60%
    Other 0 0 0

    8.2 Break-even Analysis

    Fabric Store Business Plan - Break-even Analysis

     Break-Even Analysis  
    Monthly Units Break-even 5340
    Monthly Revenue Break-even $132,500
    Assumptions:
    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
    Sales $4,062,500 $4,995,250 $6,142,159
    Direct Cost of Sales $1,161,500 $1,354,309 $1,507,346
    Other $0 $0 $0
    TOTAL COST OF SALES $1,161,500 $1,354,309 $1,507,346
    Gross Margin $2,901,000 $3,640,941 $4,634,813
    Gross Margin % 71.41% 72.89% 75.46%
    Expenses
    Payroll $392,650 $431,915 $475,107
    Sales and Marketing and Other Expenses $145,000 $148,000 $156,000
    Depreciation $2,300 $2,350 $2,500
    Leased Equipment $0 $0 $0
    Utilities $2,900 $3,000 $3,100
    Insurance $2,100 $2,100 $2,100
    Rent $2,900 $3,000 $3,200
    Payroll Taxes $24,000 $25,000 $27,000
    Other $0 $0 $0
    Total Operating Expenses $571,850 $615,365 $669,007
    Profit Before Interest and Taxes $2,329,150 $3,025,576 $3,965,807
    EBITDA $2,329,150 $3,025,576 $3,965,807
    Interest Expense $0 $0 $0
    Taxes Incurred $465,830 $605,115 $793,161
    Net Profit $1,863,320 $2,420,461 $3,172,646
    Net Profit/Sales 45.87% 48.46% 51.65%

    8.3.1 Profit Monthly

    Fabric Store Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Fabric Store Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Fabric Store Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Fabric Store Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Fabric Store Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $51,000 $55,080 $59,486
    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
    Cash Spending $42,000 $42,000 $45,000
    Bill Payments $27,000 $28,000 $31,000
    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
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $69,000 $74,520 $80,482
    Net Cash Flow $21,000 $23,000 $25,000
    Cash Balance $27,000 $30,000 $33,000

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet    
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $275,000 $308,000 $338,800
    Accounts Receivable $24,000 $26,880 $30,213
    Inventory $4,300 $4,816 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $282,000 $315,840 $355,004
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $19,400 $21,728 $24,444
    TOTAL LONG-TERM ASSETS $24,400 $27,328 $30,744
    TOTAL ASSETS $294,000 $329,280 $370,440
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $18,700 $20,944 $23,541
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $19,000 $21,280 $23,919
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $15,000 $16,800 $18,883
    Paid-in Capital $30,000 $30,000 $31,000
    Retained Earnings $53,000 $57,770 $63,547
    Earnings $193,400 $210,806 $231,887
    TOTAL CAPITAL $285,000 $310,650 $341,715
    TOTAL LIABILITIES AND CAPITAL $300,000 $329,280 $370,440
    Net Worth $293,400 $319,806 $351,787

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.25% 8.03% 8.90% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.21% 10.20% 11.31% 9.80%
    Inventory 5.39% 5.97% 6.62% 9.90%
    Other Current Assets 2.11% 2.34% 2.59% 2.40%
    Total Current Assets 149.80% 151.00% 152.00% 158.00%
    Long-term Assets 11.55% 11.60% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.90% 4.94% 4.98% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.59% 7.65% 7.72% 7.38%
    NET WORTH 100.45% 101.25% 102.19% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.60% 97.15% 99.87% 99.00%
    Selling, General & Administrative Expenses 93.56% 96.09% 98.78% 97.80%
    Advertising Expenses 1.52% 1.56% 1.60% 1.40%
    Profit Before Interest and Taxes 41.50% 42.62% 43.81% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 33 33.8 34.645 33
    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.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32.4 34.02 35 N.A.
    Accounts Payable Turnover 15.6 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $244,000 $257,664 $272,093 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.85 0.87 0.89 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 29 29.12 29.16 N.A.
    Sales/Net Worth 2.1 2.2 2.2 N.A.
    Dividend Payout 0 0 0 N.A.

    FAQ 

    • How do I start a fabric business?

    You can start fabric business by making a fabric shop business plan and executing it.

    • 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 forms to undertake this task. For elaborate ideas, you can visit the sales strategy of this sample business plan for a fabric store.

    • Is the fabric business profitable? 

    Yes! It is immensely profitable provided that you plan and launch it successfully.

    Download Fabric Store Business Plan Sample in pdf

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