Business Plan

Q1 2021

Confidentiality Agreement 

As the reader of this document you acknowledge that any information provided by LJHoliday in this business plan, other than information that is in the public domain, is confidential in nature, and that any disclosure or use of the same by the reader may cause serious harm or damage to LJHoliday. Therefor, the reader agrees not to disclose it without express written permission from Lonn Holiday representing LJHoliday. 

Executive Summary

LJHoliday’s sells clothes which are patterned to present classic silhouettes and constructed of modern high performance fabrics. 

Our market demographic is people who shop at REI because they understand the fabrics. It is the fabrics and the features that define and differentiate LJHoliday.

We are on track to put a collection of product in the online store for Fall Season 2021.

Our growth model is to use revenue to add products every season.

Company Description

Why

Pretty much everybody seems to agree good quality clothing makes for a better day. Weather resistance, comfort, and breathability all add up to “better”. It seems though, the price people are paying for this is ugly clothing. Why do people accept ugly clothing? We make high quality, weather resistant, breathable, and comfortable clothing that looks good too.

Mission

LJHoliday’s mission is to dominate the global sportswear market by providing high performance clothing of enduring style with no regard for fleeting fashion.

Vision

LJHoliday revolutionized the sportswear sector of the apparel market by completely changing the way people think about sportswear. For any occasion from a meeting in the boardroom, a grueling  afternoon on the slopes, or an evening on the dance floor, LJHoliday has set the standard.

LJHoliday customers expect the highest standards of service, materials, and construction. With a  tradition rooted in classic style we deliver finely crafted clothing manufactured from the highest quality modern  performance materials available to meet the rigorous demands of our active clientele.

We Believe

  1. Life Is Better Well Dressed.
  2. It shouldn’t be a pain to take care of your clothes.
  3. You should be able to look good no matter what you are doing.
  4. Simplicity is at the heart of good living.
  5. Luxury and elegance trump economy and frugality every time.

Goals

We expect to reach one million in net annual sales by the end of 2022.

Target Market

We are marketing to active customers that appreciate high performance fabrics and classic style.

Industry

The apparel industry is robust and secure as well as friendly to newcomers. The success of the drop shipping model over the last decade has motivated manufacturers to accommodate the market. Our timing could not be better. Now is the time to introduce good looking high tech clothing at price points accommodated by the drop ship model.

Legal Structure

LJHoliday is an LLC registered in Washington State.

Products and Services

Our Products

Product Features

Soft Shell Fabric

Our jackets are made from a soft shell fabric. Our heavy outerwear will be made from a waterproof breathable.
A soft shell is a three layer laminate designed to resist moister from outside while transferring moister away from the wearer.

Easy Care

All of our products are machine washable.
We always recommend hand washing clothes for longevity.

Simplicity

All of our products are made to be maintained. Torn seams can be resewn, lost buttons can be replaced. None of our products have zippers or velcro. Zippers can and will fail.
No velcro because velcro makes so much noise and always gets clogged up with whatever it can find to get clogged up with. .

Current Status

We currently have a belted back jacket at the pattern grading stage of development. The next step is to have a sewn sample made followed by contracting a factory to drop ship the final product. This jacket will be our flagship product and initial source of revenue.

We also have a trench coat in prototype stage. This trenchcoat will be one of our flagship products in the Fall 2021 season.

We have an online store built with WooCommerce on WordPress currently offering t-shirts featuring Lonn Holiday’s original artwork.

We have a social network at the name Elonara we can transition into a support and brand loyalty network. 

The Problem We Solve

There is a chasm between good looking clothes and functional clothes. Modern high tech clothing is boxy and often made from annoying colors. Our clothing provides all the benefits of modern high performance sportswear plus classic good looks.

They all have Annoying logos, garish colors, and are shaped like a cardboard box. 

“Covered in trademarks, packed with spurious technology, outdoor equipment lives in a parallel design universe to the rest of us. It’s like hi-tech architecture, but less tasteful” — Justin McGuirk

Our Advantage

We are the first to offer classic shapes in modern fabrics.

Price Point

The majority of our products will fall into the medium to high end of the sportswear market. Our flagship jacket will likely market in the $250 to $350 range. Our trench coat will be under $500. Future products will fall into the $100 range for trousers, $300 range for jackets, and $500 range for heavy outer wear. Our shirts will come in around $60.

Marketing Plan

Market Research

A quick google search for fashion sportswear quickly reveals the dire need for our products.
Our price points are competitive with similar products in our market space.

Barriers to Entry

Start up costs are considerably lower today than they were prior to the acceptance of the drop shipping model. Placing large orders that required warehousing and generally resulted in excesses which required liquidation is no longer necessary.

Getting the word out will prove the most challenging task. Our marketing is our make or break aspect of this startup.

Threats and Opportunities

Oh dear. The threats are so numerous and treacherous do we really need to spell then out for you?

I could be incapacitated.
Our market could fail to materialize.
Our supply chain could fail and any point.
There are many more.

Our opportunities however, are equally as numerous.

We could be a big hit right out of the gate.
This market is hungry for a change and we are just the change they are looking for.
Improvements in manufacturing and fabrics could greatly expand what we are able to produce and lower our costs.

Target Customer

We are targeting people that shop at REI because they understand the fabrics. Many people that shop and REI, Northface, Patagonia, etc, do so because they demand high performance from their clothing. They hike, ski, boat, or just enjoy walking around in Seattle. They are accustomed to spending $80 to $400 for a good quality jacket built like a cardboard box.

For our immediate marketing, we will target men between 30 and 40 in the IT sector. They will have incomes in the $80-150,000 range. They will share interests in classic shaving, bicycles, vintage hats and clothes, and classic movies. Many will have beards.

Facebook Ads Manager estimates 380,000 members in an audience of men 30 to 40 in Washington State, Oregon, California, Baja, and British Columbia with interests in REI and tech. Expanding this audience to all of North America results in an estimate of two million members. We will target this group first and make changes based on our results.

Our flagship jacket will be competitively priced between $250 and $300. For the quality and features offered, this price will seem quite reasonable and should generate substantial sales.

Within the REI shopper segment we are targeting people on the West coast. We’re taking advantage of the tech workers in the region. We are making efforts to associate ourselves with healthy living.

Customer Culture

Our market segment is people that shop at REI because they understand the fabrics. Our customers are people that appreciate fine things, simple living, adventure, and good food.

LJHoliday’s principles include a commitment to simple living. We believe life is better when lived with few unnecessary distractions. We are not committed to austerity, yay, we promote and pursue  prosperity. We believe these principles are not at odds. As an example, we believe it is better to own one pair of well made shoes which demand a higher price than several lower cost pairs. More costly clothing is generally higher quality clothing which lasts longer and provides a better return on investment. Our customers understand this.

Our public presence reflects our principles. Customers will find articles in our weblog discussing streamlined travel kits, simplified time management, characteristics of quality clothing, and aspects of style. 

Our company social network is gently moderated to encourage discussion among our customers and loyal fans about places they have travelled, methods they have used to simplify their wardrobe, and stories about their interactions in the world while well dressed.

Company Culture

We believe our company culture is reflected in our customer culture, that is, we believe our people reflect our customers. How we live affects who we attract.

Our commitment to established good looks is our hallmark. The modern products we use to make our clothing separates us from all others who offer those classic looks. Our products are better for everyday life. Our products are beautiful, classic, and hassle free.

Competitors

Our competition is Filson, Arcteryx, NorthFace, Patagonia, and all the rest of the sportswear manufacturers. None of which are offering products like ours.

Suit makers like Hugo Boss, Jos Banks, etc are not in our market.

Operational Plan

LJHoliday LLC is a family clothing store focused on classic style apparel made from modern high performance materials. We are currently an LLC registered in the State of Washington. We operate in the Apparel Sector.

Our flagship products are classic style silhouettes using modern manufacturing practices and materials, specifically referencing classic Hollywood style icons and targeting the current sportswear industry. 

We sell clothes in an online store and drop ship them to our customers from overseas.

We have an online store stocked with everything a person needs to get dressed from jackets to socks.

Recently the good factories in China have embraced dropshipping. This means we can have individual jackets made and shipped to customers when they order from our website. Like how my t-shirts work now. This is good news. This means we can have a jacket in the store ready to ship to customers for only the cost of the tech pack and pattern, development samples, and factory samples. There is no longer any need to purchase a large order of garments in advance and store them in a warehouse until they are sold or discarded.

Our initial growth will depend heavily on our first customers. Our first customers will likely be found through personal contact. We will need a place to make this contact. This is why we need a storefront. We need a storefront to make that first contact with those crucial first customers in order to make this business succeed.

We do not carry hats or shoes at this time. Our vision is to develop a machine washable classic fedora as soon as financially possible. Our weblog will include several articles about shoes, and why old school handmade shoes and boots are absolutely the best. Ideally we will be able to create relationships with shoemakers like Crockett and Jones, Allen Edmonds, and Alden and represent their lines in our store.

From drawings by Lonn Holiday, designers in eastern asia create patterns and tech packs used by our manufacturing partners to create each order for our customers.

Management and Organization

David EberhardtLonn HolidayAl Parisi
Business Direction. CFO.
Keeps us alive.
Founder. CEO.
Artist/Entrepreneur, sailor, vagabond, tango dancer. Solving the problem of ugly technical clothing.
Operations. COO.
Gets stuff done.

Lonn James Holiday | Founder. CEO.

He is a Cornish BFA graduate and a long time member of the Seattle and Fremont arts community

He has established a successful IT career, worked in the Real Estate business as a photographer and house painter, served in the restaurant industry and driven City buses

He completed Entrepreneur and Project Management certifications at North Seattle College.

He has lived in the greater Seattle area most of his life in various houses, motorhomes, and a sailboat.

David Eberhardt | CFO. Business consultant. Investor.

Al Parisi | COO. 

Marcus Whiting | CMO

CIO

Startup Expenses and Capitalization

Phase One

Startup.

This is where we are now. We are developing a flagship product to draw traffic to our online store. We are populating our inventory of products.

We have contracted with a designer that has provided a cost and timeline to create a tech pack, graded pattern, and sewn sample, and negotiate with a factory to drop ship our products. We expect this to be a long term relationship both with our designer and with the factory she negotiates manufacturing with. So far we have a tech pack from her we are very satisfied with.

Sewn Samples. In addition to design fees we expect to order several sewn samples to fine tune our designs. It is common to make a few initial samples out of an inexpensive fabric like muslin and a final sample in a fabric similar to the intended production fabric.  Our designer will deliver a prototype in a comparable fabric we can use for runway shows and product literature photography.

Factory Samples. We will contact a list of potential factories requesting bids. From the first round of bids we will select a few factories to purchase samples from. We will likely need to purchase more than one sample from the factory we eventually select for this project. Ideally this will lead to a long term relationship.

This process will complete phase one resulting in an online store offering a full line of clothing with a flagship product demonstrating a new concept in the marketplace. This will put us in a position to realize revenue and begin to grow.

Phase Two

Establish. We will use profits to develop additional flagship products and gain loyal customers.

We will develop 4 to 6 new designs a month until we have a total of 50 original products to offer.

Phase Three

Grow. We may add one or two products during this phase but our emphasis will be getting the word out and building a strong customer community.

Financial Plan

Cost per unit for our Belted Back Jacket is under $200. Expected MSRP, $269.95.

Projections are based on estimated monthly unit sales as we develop products.

During 2022 we add two stores.

Financial SummaryQ1 2021Q2 2021Q3 2021Q4 202120212022202320242025
Total Designs117364646587898118
Total Units Sold11478981,5722,61810,68626,71553,43080,145
Average Daily Unit Sales
(All Channels)
02101772973146220
Revenue$300$42.2K$249.7K$561.6K$853.8K$5.3M$13.2M$26.3M$39.5M
Revenue Growth % (per Q, per Y)13963%492%125%517%150%100%50%
Cost of Sales$200$91.8K$128.6K$338.3K$558.9K$3.2M$7.9M$15.9M$23.8M
Gross Profit$0.1K-$49.6K$121.1K$223.3K$294.8K$2.1M$5.2M$10.4M$15.7M
Gross Margin35%40%40%40%40%
Operating Expenses$3.3K$51.0K$46.9K$93.6K$194.8K$657.2K$1.3M$2.0M$2.2M
EBITDA-$3.2K-$100.6K$74.1K$129.7K$100.1K$1.4M$3.9M$8.5M$13.5M
EBITDA Margin %12%27%30%32%34%
Headcount1235515222931
Average Revenue / Employee$0.3K$21.1K$83.2K$112.3K$170.8K$351.3K$598.7K$908.4K$1.3M
Financing$3.8K$150.0K$0$0$153.8K$0$0$0$0
Cash (at End Of Period)$1.2K$43.0K$107.7K$222.8K$222.8K$1.5M$4.9M$12.5M$24.6M
Inventory (at EOP)$0$66.2K$44.3K$49.6K$49.6K$167.1K$659.7K$1.3M$1.9M
Total Assets (at EOP)$1.2K$109.1K$152.0K$272.4K$272.4K$1.7M$5.5M$13.8M$26.6M

Income Pro FormaQ1 2021Q2 2021Q3 2021Q4 202120212022202320242025
Projected Online Sales$300$35.0K$156.9K$255.5K$447.7K$1.9M$4.8M$9.6M$14.4M
Projected In Store Sales$0$30.4K$154.1K$344.5K$529.0K$3.6M$9.0M$18.1M$27.1M
Gross Revenue$0.3K$65.4K$311.0K$600.0K$976.7K$5.5M$13.8M$27.7M$41.5M
Online COG$200$23.2K$103.9K$169.2K$296.4K$1.3M$3.2M$6.4M$9.6M
Inventory Expense$0$133.8K$193.2K$179.0K$506.0K$2.5M$6.2M$12.5M$18.7M
Total Cost of Sales$0.2K$157.0K$297.1K$348.2K$802.4K$3.8M$9.4M$18.9M$28.3M
Gross Profit$0.1K-$91.6K$13.9K$251.8K$174.3K$1.8M$4.4M$8.8M$13.2M
Projected Operating Expenses$2.2K$63.7K$51.8K$66.5K$184.2K$728.3K$1.3M$2.0M$2.3M
EBITDA-$2.1K-$155.3K-$37.9K$185.3K-$9.9K$1.0M$3.1M$6.8M$10.9M
Taxes-$0.4K-$31.1K-$7.6K$37.1K-$2.0K$206.2K$618.2K$1.4M$2.2M
Profit-$1.7K-$124.2K-$30.3K$148.2K-$8.0K$824.7K$2.5M$5.4M$8.7M
Startup ExpensesJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember
Product Development$0.00$700.00$0.00$3,200.00$3,200.00$3,200.00$3,900.00$3,200.00$3,200.00$0.00$0.00$4,600.00
Inventory$0.00$0.00$0.00$18,000.00$56,400.00$59,400.00$59,400.00$74,400.00$59,400.00$88,000.00$66,000.00$25,000.00
Total Product Expenses$0.00$700.00$0.00$21,200.00$59,600.00$62,600.00$63,300.00$77,600.00$62,600.00$88,000.00$66,000.00$29,600.00
HR$200.00$200.00$500.00$3,400.00$3,400.00$3,400.00$5,800.00$5,800.00$5,800.00$10,600.00$10,600.00$10,600.00
Marketing$0.00$0.00$100.00$1,000.00$1,000.00$1,000.00$2,000.00$2,000.00$2,000.00$4,000.00$4,000.00$4,000.00
Storefront$200.00$120.00$120.00$22,280.00$12,830.00$5,830.00$5,830.00$5,830.00$5,830.00$5,830.00$5,830.00$5,830.00
Total Startup Expenses$400.00$1,020.00$720.00$47,880.00$76,830.00$72,830.00$76,930.00$91,230.00$76,230.00$108,430.00$86,430.00$50,030.00
Startup Financing
Financing$1,200.00$600.00$2,000.00$250,000.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00$0.00
Gross Sales$0.00$0.00$300.00$1,800.00$17,720.00$45,906.00$66,234.00$106,512.00$138,260.00$192,331.20$239,310.00$192,331.20
COG (less Inventory)$0.00$0.00$200.00$1,200.00$7,560.00$14,420.00$21,280.00$34,440.00$48,160.00$56,392.00$56,392.00$56,392.00
Total Startup Financing$1,200.00$600.00$2,100.00$250,600.00$10,160.00$31,486.00$44,954.00$72,072.00$90,100.00$135,939.20$182,918.00$135,939.20
Running Cash Available$800.00$380.00$1,760.00$204,480.00$137,810.00$96,466.00$64,490.00$45,332.00$59,202.00$86,711.20$183,199.20$269,108.40

Cash Flow 2020JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember2020
Opening Cash$40.24$80.91$294.94$259.48$866.64$375.11$533.47$656.78$504.48$536.03$349.11
Operating Cash In$2.24$2.67$34.04$54.04$11.08$16.03$35.81$0.03$10.06$20.32$0.00$0.00$93.33
Financing$650.00$500.00$850.00$700.00$1,800.00$600.00$800.00$600.00$600.00$800.00$600.00$1,103.93$6,903.93
Income$652.24$502.67$884.04$754.04$1,811.08$616.03$835.81$600.03$610.06$820.32$600.00$1,103.93$6,997.26
Operating Expenses$612.00$462.00$670.01$789.50$1,203.92$1,107.56$677.45$476.72$762.36$788.77$786.92$1,019.99$6,823.69
Ending Cash$40.24$80.91$294.94$259.48$866.64$375.11$533.47$656.78$504.48$536.03$349.11$433.05$433.05

Appendices

This business plan is based on the SCORE model:

Between 2012 and 2020 the global apparel industry annual growth rate increased from 3.5% to 6.16%.
https://www.statista.com/statistics/727541/apparel-market-growth-global/

In December 2019, U.S. apparel retail store sales amounted to approximately 23.6 billion U.S. dollars. In April 2020, clothing store sales fell to 1.9 billion U.S. dollars due to the impact of the coronavirus (COVID-19) pandemic. — Statista

According to the Kung Group, many will continue indefinitely, with 70% of company founders open to letting some or all workers remain remote, 66% reconsidering their office investment and 76% finding that productivity has been level or improved.
The situation led eMarketer earlier this year to forecast a nearly 22% decline in sales of apparel and accessories this year, a year-over-year loss of over $100 billion. Even online sales in the category “will rise just 8.6% in 2020, a significant deceleration from last year’s growth of 15.9%.”
https://www.retaildive.com/news/the-naked-truth-about-apparels-future/587395/

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