The Scarlet Tassel

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Home Accessories and Gifts Business Plan

Strategy and Implementation Summary

The Scarlet Tassel will leverage its expertise, product offer and marketing strategy to increase its customer base while driving sales and profit.  The following sections review the various strategies that will support this effort.

6.1 Competitive Edge

The Scarlet Tassel looks to establish itself competitively as a unique retail environment through its product offering, the scope and level of services it provides, and the expertise of its employees.

PRODUCTS: Sourced through established manufacturers via international trade shows and one-of-a-kind specialty craft fairs, the products offered by The Scarlet Tassel will provide a high level of quality and value to the consumer. The range of products will be unique, with little crossover to other retailers within the Atlanta marketplace.

SERVICES: Connecting with the customer is a key focus for The Scarlet Tassel. Through personalized design services, educational decorating workshops, gift registry, realtor programs, ASID discounts, gift certificates, gift wrap and preferred customer recognition programs, The Scarlet Tassel will provide a level of personalization not commonly found in today's hectic, mass market. It is our desire that customers look to us as their valued resource to achieve a personalized home environment.

EMPLOYEES: Employees of The Scarlet Tassel will enjoy a friendly, fair and creative work environment, which respects diversity, new ideas and hard work. Development through experience and training will be a primary focus. It is our desire that employees are long-term ensuring an expertise that will support the customer experience.

6.2 Marketing Strategy

In addition to price and item promotional announcements, The Scarlet Tassel will focus its marketing efforts via several key direct-to-consumer advertising vehicles:

Local and Regional Magazine Publications: Each of these advertising vehicles provides a demographic base that lines up nicely with that of The Scarlet Tassel.

Direct Mail Postcards: The Scarlet Tassel will look to increase consumer awareness, retain the existing customer base and promote increased sales via seasonal postcard mailings. These mailings will be targeted around special events and are intended to liquidate slow moving products or showcase vendor negotiated specials.

  • Spring Open House--15% to 20% savings opportunity.
  • Fall Open House--15% to 20% savings opportunity.
  • Holiday Open House--15% to 20% savings opportunity.
  • Annual Anniversary Postcard--promotes in-store design seminars, special events and savings opportunities.

Website Marketing: As we establish our e-commerce business segment during Year Three of operation, we will support the business via search engine marketing, banner advertising, URL links and e-mail marketing on all correspondence. This third channel of business will increase the customer base, sales potential and service opportunities provided by The Scarlet Tassel.

6.2.1 Promotion Strategy

The Scarlet Tassel will leverage its expertise, product offerings and marketing strategy to increase its customer base while driving sales and profit. The following sections review the various strategies that will support this effort.

6.3 Sales Strategy

The Scarlet Tassel will approach sales from a salesperson-customer relationship basis. All sales associates will be trained and encouraged to assist customers in a personal manner, utilizing first names and asking the questions needed to provide the customers with the services they desire. Gathering key customer information and seeking performance feedback on the products and services offered will assist us in the following ways:

  • Targeting our marketing efforts more effectively.
  • Developing product offers and merchandising formats that will increase sales.
  • Developing services that enhance the shopping experience.
  • Training and developing sales associates in order to effectively service the customer.
  • Increase awareness of The Scarlet Tassel within the retail consumer marketplace.
  • Develop future sales opportunities that allow for continued growth of the business.

In order to provide the customer with the most up-to-date home decorative and gift products on the market, we will attend international tradeshows which showcase all of the products manufactured within this category of business. Attending market will not only allow us to ensure our product offer is current and up-to-date but will provide us with fresh, new store merchandising and display ideas.

To stay abreast of market and product trends, we will utilize the following trade publications to reinforce and expand our knowledge base:

  • Giftware News
  • Home Accents Today
  • Home Decor Buyer
  • Residential Lighting
  • Accessory Merchandising
  • Gifts and Decorative Accessories
  • Greetings etc.

Products will be showcased via lifestyle merchandising that inspires and promotes multiple purchases. We look to create a strong visual impact creating an invitation to touch and purchase.

It is the goal of The Scarlet Tassel to offer style and quality at a value to the consumer. Our pricing structure will support a 55% gross margin and position us competitively within the marketplace. Seasonal promotional offers and annual anniversary sale events will encourage additional sales and multiple unit purchases.

Employees of The Scarlet Tassel are an integral part of the shopping experience for the customer. All employees will be developed for growth and advancement, and compensated fairly with effective training that will enable them to confidently service the customer.

As we enter the 21st century, proper technology is becoming key to meeting the customer's expectations. The Scarlet Tassel has chosen Celerant Advanced Retail Management System (Celerant ARMS) as its retail management software. After careful consideration of Retail Pro and other well-known retail software programs, Celerant ARMS was chosen for its advanced real-time capabilities. Company-wide real-time data access in lieu of nightly polling or other end-of-day processes is a feature not offered by most software in this price point. With an eye towards the future, real-time will greatly enhance the experience of The Scarlet Tassel's customer, especially in an Internet or multi-store environment, without an expensive software change.

Additional features include:

Point-of-Sale Transaction Tracking Customer Management Inventory Management
Customer transactions: receipts, gift certificates, special orders, gift registry
Barcode scanning
Price check
Inventory lookups
Gift receipts
Track and review each register transaction
Daily summaries by store and register
Multiple ship-to addresses
Advanced reporting: lazy/active customers, minimum purchases within inventory class, geographic
Item entry: matrix, 12 customizable categories, unlimited barcodes
Pricing: markdowns, price changes
Physical counts

Purchase Orders & Receiving Vendors Analysis Administration Others
Quick receiving
Order approval process
Full contact management
Multiple contacts for a single vendor
Link multiple brands
Link multiple remit to contacts for payable generation
Track terms and payment
Complete inventory performance profiling
Ordering analysis
Search multiple unrelated brands, classes, styles, etc.
Exceptions based on: on-hand levels, sell-thru performance, sales performance, aging
Data export to excel
Store management: centralized administration from a single location
Employees: complete rights-based security

Return Authorizations
Wireless Applications
Integrated E-Commerce
Integrated Accounting with QuickBooks and MAS 90

6.3.1 Sales Forecast

The Sales Forecast, as detailed in the table and charts following, is based on The Scarlet Tassel's planned retail space of 3,500 square feet and the average $ sales per square foot expected. All revenues in the forecast are from direct retail sales and do not include any miscellaneous income. Monthly sales, as noted in the Appendix, have been adjusted to reflect the "valleys" that the retail business is noted for. Dips in sales are expected, in particular, for the months of January, February, and March.

Quarterly sales are expected to be driven by each major category as follows, and will be enhanced with sales supporting seasonal holidays or gift giving occasions as noted below:

1st Quarter
Holiday Clearance, Valentines Day, Easter

70% - Decorative Accessories
3% - Accent Furniture
6% - Wall Decor
2% - Home Textiles
7% - Special Occasion Gifts
5% - Personal Accessories
3% - Seasonal Decor
4% - Garden Decor

2nd Quarter
Mother's Day, Father's Day, Memorial Day, 4th of July

70% - Decorative Accessories
3% - Accent Furniture
5% - Wall Decor
2% - Home Textiles
8% - Special Occasion Gifts
5% - Personal Accessories
3% - Seasonal Decor
4% - Garden Decor

3rd Quarter
Labor Day

70% - Decorative Accessories
4% - Accent Furniture
6% - Wall Decor
2% - Home Textiles
8% - Special Occasion Gifts
5% - Personal Accessories
2% - Seasonal Decor
3% - Garden Decor

4th Quarter
Halloween, Thanksgiving, Christmas, New Year's

70% - Decorative Accessories
4% - Accent Furniture
4% - Wall Decor
3% - Home Textiles
8% - Special Occasion Gifts
5% - Personal Accessories
4% - Seasonal Decor
2% - Garden Decor

Growth rates for Years One through Three are planned as follows:

  • 2003 to 2004 (Year One) - $179 per square foot
  • 2004 to 2005 (Year Two) - $237 per square foot; 32.40% growth
  • 2005 to 2006 (Year Three) - $284 per square foot; 19.83%% growth

With the industry average estimated at $300 per square foot, growth planned is attainable. In spite of the economic unpredictability we are experiencing, these projections are supported by the continued strength in the Atlanta home decor market. Source: Home Accents Today, Spring 2002

Sales Forecast
Year 1 Year 2 Year 3
Revenue $589,000 $829,000 $995,000
Other $0 $0 $0
Total Sales $589,000 $829,000 $995,000
Direct Cost of Sales Year 1 Year 2 Year 3
Inventory $217,930 $306,730 $368,150
Inbound Freight $47,120 $66,320 $79,600
Other $0 $0 $0
Subtotal Direct Cost of Sales $265,050 $373,050 $447,750

6.4 Milestones

The following table lists important milestones, with dates and persons primarily responsible for planning, as well as budgets where applicable. Mentioned by first name in the table are a few persons whose expertise in their field of work are required to make The Scarlet Tassel a reality. They include:

  • Bob Levine - Real Estate Agent, Coldwell Banker Commercial
  • Jeff Burkholder - Graphic Artist, Burkholder Designs
  • Victor Moldovan, ASID - Store Planner & Designer, Moldovan Interior Design
  • Barry Brouner, CPA - Accounting & Tax Consulting
  • Steve Anderson - Attorney, Anderson & Dailey
Milestone Start Date End Date Budget Manager Department
Business Entity Setup 8/1/2002 9/1/2002 $0 Deirdre/Steve Marketing
Shareholder Agreement Completed & Signed 9/1/2002 10/1/2002 $0 Deirdre/Steve Marketing
Corporate Bank Account Opened 9/1/2002 9/1/2002 $0 Deirdre/Shelly Finance
Business Plan Completed 9/15/2002 10/1/2002 $0 Deirdre/Shelly Marketing
Logo Design Completed 9/15/2002 10/1/2002 $0 Shelly/Jeff Marketing
Banks Interviewed for Financing 10/1/2002 11/1/2002 $0 Deirdre/Shelly Finance
Store Location Confirmed 11/1/2002 12/1/2002 $0 Deirdre/Bob Operations
Lease Agreement Negotiated & Signed 12/1/2002 1/1/2003 $0 Deirdre/Bob Operations
Initial Store Design & Plan Approved 12/1/2002 1/1/2003 $0 Shelly/Victor Marketing
Business Cards & Stationery Printed 12/1/2002 1/1/2003 $0 Shelly Marketing
Computers for Shelly & Deirdre Purchased 12/1/2002 1/1/2003 $0 Deirdre Operations
QuickBooks Purchase, Installation & Training 1/1/2003 2/1/2003 $0 Deirdre Finance
Advertising Developed 1/1/2003 2/1/2003 $0 Shelly/Jeff Marketing
Employee Handbook & Store Policies Developed 1/1/2003 3/1/2003 $0 Deirdre Operations
Prep & Distribution of Press Release 1/1/2003 3/1/2003 $0 Shelly Marketing
Atlanta International Gift Market & Rug Fair 1/10/2003 1/13/2003 $0 Shelly Merchandising
New York International Gift Show 2/1/2003 2/6/2003 $0 Shelly Merchandising
Buildout of Retail Space 2/1/2003 4/1/2003 $0 Deirdre/Shelly/Victor Operations/Merchandising
Utilities, Insurance, Payroll Service Confirmed 2/1/2003 4/1/2003 $0 Deirdre Operations
Remaining Equipment Purchased 2/1/2003 4/1/2003 $0 Deirdre Operations
Celerant ARMS Purchase, Installation & Training 2/1/2003 4/15/2003 $0 Deirdre Operations
Employment Ad, Interviewing & Hiring 3/1/2003 4/1/2003 $0 Deirdre Operations
May Advertising Close Date 3/1/2003 4/1/2003 $0 Shelly Marketing
GWEN Conference 3/12/2003 3/13/2003 $0 Deirdre Operations
Store Occupancy Date 4/1/2003 4/1/2003 $0 Deirdre/Bob Operations
Receive Product 4/1/2003 4/17/2003 $0 Deirdre Operations
June Advertising Close Date 4/1/2003 5/1/2003 $0 Shelly Marketing
Merchandise Store 4/18/2003 4/24/2003 $0 Shelly/Victor Merchandising
Store Opening 4/25/2003 4/25/2003 $0 All Employees All Departments
Press Reception 5/15/2003 5/15/2003 $0 Shelly Marketing
Store Grand Opening Gala Event 5/16/2003 5/17/2003 $0 Shelly Marketing
Totals $0