Managing a fashion boutique
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1. You just bought a fashion boutique in downtown (or your hometown—you pick) that’s been around since 2012.
These businesses are fictional, but you are free to incorporate actual local and regional data when writing your paper. For instance, assume that your store exists along with the other stores that also currently exist in downtown. Helpful information about your downtown is easy to obtain online (census data, for instance), or is just a short walk away (maybe you want to see what buildings are currently available for lease, for instance).
For any of the three businesses above, the basic financials are as follows:
• 2016 gross sales: $630,000
• 2017 gross sales: $750,000
• 2018 gross sales: $670,000
• 2019 gross sales: $650,000
• 2020 projected gross sales: $620,000
Over that time, your store has also averaged the following:
• Cost of Goods Sold (COGS) has averaged about half of gross sales (50%). So COGS was about $315,000 in 2016, for instance.
• Payroll has held steady at about $180,000 per year. The previous owner took a modest $30,000 salary (but was also entitled to all the profit as the sole owner of the company).
• The owner retired and no longer works for the company. There are two other full-time employees who are each paid $35,000 per year (no commission). One has been there 5 years and one has been there 1 year. There are also 6 part-time employees—mostly college students. They have each worked at the store an average of 9 months.
• The profit margin has held steady at about 6% per year of gross sales. Example: the profit in 2019 was 650,000 x 0.06 = $39,000.
• You paid $116,000 for the business, along with an additional $103,000 to purchase the unsold inventory and equipment in the building. You put 1/3 of your personal savings down ($73,000) and borrowed the remaining amount from the bank at 5% interest on a 10-year loan.
• You rent the 1,500 square foot building for $1,200 per month. You have 12 months left on the existing lease; the lease period has renewed every 5 years.
Pros & cons
Before deciding to purchase the business, you made a list of pros and cons, but you know this list is not comprehensive.
Notes that you took prior to purchasing the business:
• The business is consistently making money, but you’d like to increase your profit margin.
• Gross sales have been trending downward.
• You have a small pocket of loyal customers, but you suspect most customers are infrequent visitors to your store. You don’t currently have data to support this.
• The business did very little marketing (including promotion) prior to your ownership. The previous owner spent maybe $2,000 a year on un-itemized “advertising” expenses. Maybe that’s okay?
• The location is okay. Nothing great. The building is old, but doesn’t have a lot of problems. The business has never been in another location.
• One full-time employee is very experienced, but not very “nice.” The other full-timer is nice, but not experienced. Your impression of the part-timers is that 2 of them do nothing, 2 of them are rising stars (but are likely only sticking around until they graduate, or until summer comes), and 2 of them are somewhere in between.
• The previous owner wasn’t around much. She was the only person with the “manager” title. The other experienced full-timer would step in and boss people around as needed. The managerial hierarchy is relatively flat.
• The business really hasn’t adjusted its strategy or done anything new in the last 5 years.
• For the most part, the culture is hard to pin down from your limited interaction with the employees. They seem to get along okay. They get the job done, but they don’t seem to go above and beyond, with the exception of a couple employees. You wonder why they lack motivation. The more experienced, more senior employee belittles the younger employees when they “work too hard.”
• You’d like to learn more about the sense of direction, communication, mission, and leadership within the organization. When you spoke with employees about their job duties, the answers were mixed, or you got a, “I dunno, I do a little of whatever, I guess.”
• Nothing spectacular about the business immediately stands out, but you assume that it must be doing something right to still be in business and making a profit.
• You believe that competition comes in various forms, both locally and online.
Your job: Write a plan for how you will manage your new business. Think about both the short term and the long term when making decisions.
1. Use APA or Chicago format. You may start with the APA paper template that I uploaded to Canvas.
2. Each milestone should be approximately four to five pages in length, and your final paper will likely be 16 – 20 pages in length. Make your paper double-spaced, and in 12 point font (Times New Roman or Arial).
3. You should cite the textbook approximately 10 times in each milestone. Also incorporate at least one additional reference (ideally a scholarly journal article), in addition to the Williams textbook in each milestone. Use citations appropriately and according to the APA or Chicago style that you chose. You MUST incorporate outside sources in order to have your paper be considered for an “A.” In addition, good papers will cite the Williams textbook over and over again, demonstrating that you have a good understanding of the textbook content and that you know how to apply it in a practical way to your business.
4. Include at least one new figure, chart, or graph with each milestone. It is best if you create your own. Here are just a few ideas: charts showing anticipated sales data, market trends, confidence indices, census data, marketing pieces, your proposed management hierarchy, financial statements, a calendar timeline, SWOT (required). Feel free to incorporate your own ideas.
Answer/incorporate all of the following when writing your paper. These questions cover content from Chapters 1 – 14. Be sure to justify your decisions (back them up with reasoning, including sources from the book, data sources, and outside journals.) You will need to be thorough, but concise.
1. For this Milestone, you must have your paper formatted correctly according to APA or Chicago style, including title page, running head, bibliography section, etc. Remember to use headings and sub-headings frequently. Table of Contents and abstract is not required.
2. Look back on the history of management (Chapter 2). What specific lessons can be learned from other historical leaders in management and how will you apply these lessons to your new business?
3. What will be your managerial role in the new business and will there be other managers? What types of managers will each of you be? (team leader, top manager, etc.; Chapter 1). Based on your own self-evaluations and self-reflection conducted throughout the semester, what do you think your strengths and weaknesses will be as a manager? Where might you need to hire help to make up for your weaknesses?
4. Discuss the general and specific environment for your type of business. Reference Chapter 3. Remember the PESTEL analysis we discussed? Utilize outside sources specific to your industry as well as the general economy, such as online industry reports, consumer confidence indices for the state and other business confidence indices. Here is just one other example for evaluating your environment (come up with your own): is your industry made up of a lot of small stores with high competition and low margins, for instance? What does it look like locally? Are you highly regulated? What role do suppliers have in your business that might affect the way you manage? Etc. Etc. Again, these are just examples. Reference Chapter 3 for more ideas about what to analyze in the “environment” and consider searching for information about a PESTEL analysis to make this process easier for yourself.
5. Also from Chapter 3 . . . what problems and opportunities do you see with your business’s culture and what do you plan to do about them?
6. Describe the specific policies and procedures you plan to put into place to ensure your business lives up to your ethical expectations (Chapter 4).
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