veera collections

Veera Collections:

Currently we are into trading,with active client base of around 200 retailerswithall kinds of mens wear, since 4 yrs.

With a motive of growth,we areplanning to start a retail chain under the brand name Veera collections. Under this brand we would invite people to take up our franchisee. The franchisee would run on profit /sharing basis.

We as a Franchisor would help Franshisee in setting the shop, providing all the necessary stock, marketing and day to day running of the shop.

Idea is to include few good domestic brands, who have a vision to service tier 2/tier 3 cities and small towns. Good quality, with reasonable price will be the theme in identifying the brands. We know whats the market demandand have the required experience in the same.

Business Model:

Exclusive mens wear
Franchisee fee - 30,000
renewal yearly - 30,000
Space - 400 to 500 sq feet
Initial investment - 10 to 12 lakhs ( includes deposit+ interior+ stock+ cctv+ computers+software)
Working capital -40000/50000 per month ( rent + electricity bill + 2 staff + bank interest on invested capital)
Expected sales per month - 3 lakhs
Profit margin - 40 to 50%
Franchisor margin - 2% to 5%
Break even sales per month - 1 lakh
ROI - 12 to 16 months

Ideally we all would like to know how we can achieve break even.

Let me give u a brief idea. Suppose you sell 50 pants + 50 shirts + 50 tshirt per month. Than ideally the sales will come up to 1 lakh per month. Cost of buying would be around 55000 to 60000.

So divide the same per day - u need to sell 2 shirts, 2 pants and 2 tshirt. To achieve a break even. Now is this not possible?

Note -

1. On quality of goods you sell, price is always a 2nd criteria.

2. Repeat customers are a must, because in small cities and towns, we dont have floating population.

Note:
1. Ideally a retailer cant run behind searching for good quality goods, its better of he concentrates on his customers and giving service, we will do the sourcing part.
2. Since all the sales, inventory is tracked by computers , we will have a clear picture on what sells and what stock to keep at our shop.
3. Since our shops would be connected as a network, stocks can be moved from one unit to the other( depending on demand and supply ) , this would help to manage effective use of stock.
4. As per our experience, only 75% of the purchases gets sold at the shop. When in network , we have many ways to dispose the rest of the stock.