glamrend report 4 áo dài cách tân business plan

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GLAMREND Report 4

ÁO DÀI CÁCH TÂN

PLAN

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<b>FPT UniversityBusiness Department </b>

<b>Bachelor of Business Administration Thesis</b>

Tran Van KhanhNguyen Le Quynh AnhNguyen Cong LocNguyen Ba Hai Dang

MS. Duong Thi My HoangMS. Duong Thi Thanh Hang

<b>FPT University Danang, 2023 </b>

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Table Of Contents

Chapter 4: Financial Analysis ... 4

1. Startup Expenses and Capitalization ... 4

2.1 Revenue from modernized Ao Dai rental ... 11

2.2 Revenue from accessories rental ... 12

2.3 Revenue from selling new modernized Ao Dai ... 13

2.4 Revenue from commissions from photography and makeup partners ... 13

3. Financial Statement Analysis ... 14

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4. Capital Budgeting Decisions ... 19

4.1 NPV, IRR and Discounted payback period analysis ... 19

4.2 Financial ratio analysis... 20

LIST OF TABLES

Table 1: Initial Cost ... 4

Table 2: Fixed Cost ... 7

Table 3: Variable Cost ... 9

Table 4: Total operating expenses ... 10

Table 5: Capital Structure ... 11

Table 6: Revenue from modernized Ao Dai rental ... 12

Table 7: Revenue from accessories rental ... 12

Table 8: Revenue from Selling new modernized Ao Dai ... 13

Table 9: Revenue from commissions from photography and makeup partners... 14

Table 10: Income Statement... 15

Table 11: Statement of owner’s equity... 16

Table 12: Balance Sheet ... 17

Table 13: Statement of cash flow ... 18

Table 14: NPV, IRR and Discounted payback period analysis ... 20

Table 15: Financial ratio analysis ... 21

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LIST OF FIGURES

Figure 1: Operating Expenses ... 6 Figure 2: Net profit margin, return of asset and return of equity. ... 21

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Chapter 4: Financial Analysis

1. Startup Expenses and Capitalization

1.1 Initial cost

Glamrend estimates the initial costs for its store, including 7 main elements: legal procedures, market research, equipment and official furniture costs, brand Identity, website creation, marketing expenses on opening day, and renovation and reconstruction costs. In total, this cost is 97,583,000 VND, preparing the business plan as detailed in the table below.

Table 1: Initial Cost

Initial Cost

(VNĐ)

Total (VNĐ)

Registering the Business License 1 1.500.000 1.500.000

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Cleaning stuff 1 Item 1.800.000 1.800.000

<small>6 </small> Marketing Expenses on Opening Day 205 2.171.500 3.640.000

Facebook, Instagram, TikTok Ads 2 day 1.000.000 2.000.000 Store decoration (Balloons, Flowers) 1 Package 1.000.000 1.000.000 Discount Voucher (Paper Card) 200 Unit 1.500 300.000

<small>7 </small> Renovation and Reconstruction 2 1.190.000 1.190.000

Reconstruction costs (Wallpaper, new

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Figure 1: Operating Expenses

Business license tax

The cost of business license tax per year is 2,000,000 VND, so after 5 years, the store will pay a total of 10,000,000 VND.

Depreciation expenses

The formula Glamrend uses to calculate depreciation expenses is the straight-line depreciation method: Annual depreciation expense = (Cost of asset - Salvage value)/Useful life of the asset. Thus, the store's annual depreciation expenses are 6,736,800 VND per year, and the total depreciation expenses after 5 years are 33,684,000 VND.

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In summary, these are the fixed costs of the Glamrend store over five years.

Table 2: Fixed Cost

Fixed Cost

(VND)

Year 2 (VND)

Year 3 (VND)

Year 4 (VND)

Year 5 (VND) 1 Rent 132.000.000132.000.000132.000.000132.000.000132.000.0002 ^{Business license}tax 2.000.000 2.000.000 2.000.000 2.000.000 2.000.000 3

Depreciation

expenses 6.736.800 6.736.800 6.736.800 6.736.800 6.736.800 4 Total 140.736.800140.736.800140.736.800140.736.800140.736.8001.2.2 Variable cost

Variable costs are costs that must be paid directly into the process of creating a product, such as raw materials, worker costs, packaging, and production costs. Variable costs will change when the scale production output changes.

Utilities expense

Glamrend store utility expense includes electricity, Wi-Fi, and water. Specifically, Glamrend uses Viettel's Wi-Fi service, SUN2 package, with an initial price of 229,000 VND/month and increasing by 10% each year. As for electricity, the store consumes an average of 120kwh per month, with prices of 1,678 VND for the first 50kWh, 1,734 VND for the next 50kWh, and 2,014 VND for the last 20kWh. As for water costs, the store uses an average of 10m3 of water per month at a cost of 11,000 VND/1m3. In total, utilities expense for 5 years is 48,002,774 VND.

Salaries

From year 1 to year 3, the store has a total of 6 employees with basic salaries of 8,000,000 VND, 6,500,000 VND, 6,000,000 VND, 6,500,000 VND, 5,500,000 VND, 5,000,000 VND. In addition to the basic salary, positions such as sales staff will receive additional salary based on sales volume. Sales staff will receive 3% of the total sales that an individual brings to the store. Leader positions will receive 2% of total sales. Starting from year 4, the store

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recruited 1 sales staff with a basic salary of 6,655,000 VND plus 3% based on sales volume. Total salary costs within 5 years are 4,243,544,384 VND.

Insurances

Glamrend store plans to pay three types of insurance for employees, including health insurance, social insurance and unemployment insurance. The payment level will depend on the employee's salary, with the corresponding rate being 17.5% for social insurance, 3% for health insurance, and 1% for unemployment insurance. The total insurance cost within 5 years that Glamrend must pay is estimated to be 912,362,043VND.

Marketing expenses

Glamrend's marketing costs are divided into three phases. Phase 1, called Brand Introduction, has a total cost of 51,250,000 VND in the first quarter. Phase 2, called Attention Explosion, has a total cost of 27,600,000 VND in the second and third quarters. Finally, Phase 3 is called Create Trust and Love products and brand, with a total cost of 18,800,000 VND in the fourth quarter. Therefore, in the first year, Glamrend will have to pay a total of 97,650,000 VND for marketing activities, and this cost will increase by 10% each year. The total expected cost after 5 years is 596,163,015 VND.

Inventory cost

Based on the number of modernized Ao Dai and accessories for rent each day, Glamrend estimates the amount of inventory that needs to be imported. Combining the formula Inventory costs = Invoice cost + Insurance + Storage + Freight + Import Duties - Discounts and Allowances, Glamrend calculates. The total inventory cost for 5 years is 3,953,710,248 VND.

Provision for devaluation of inventories

It is the risk cost of inventory when damaged, and this cost is for the purpose of preserving modernized Ao Dai and accessories. Glamrend estimates this cost will be 5% of inventory costs. The total provision for inventory devaluation in 5 years is 197,685,512 VND. Packaging materials

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Based on the number of customers who come to rent modernized Ao Dai at the store, Glamrend will buy the appropriate amount of packaging. With Cockroaches costing 1,400 VND per piece, the total cost of purchasing packaging is 342,329,872VND within 5 years. Store maintenance cost

Store maintenance costs are the costs of maintaining facilities and include costs of repairing, maintaining, and upgrading facilities such as shelves, windows, doors, lights, and air conditioning. The estimated cost for the first year is 2,000,000 VND and increases by 10% each year, the total cost after 5 years Glamrend must pay is 12,210,200 VND.

Website maintenance cost

It is the cost to optimize the website, ensure user and Google friendliness, protect data safety, improve page loading speed, maintain regular content updates, and optimize SEO to reach the top position on Google. Since this is the first stage of establishing a website, there are many things to improve, so the cost in the first year is 15,000,000 VND, while the cost from year 2 to year 5 reduces to 10,000,000 VND per year. The total cost within 5 years is 55,000,000 VND.

Table 3: Variable Cost

Variable Cost

1 ^Utilitiesexpense 7.722.136 8.478.349 _9.326.184 10.258.803 11.284.683 2 Salaries 559.328.156 662.749.279 802.251.917 1.013.789.9951.205.425.0373 Insurances 120.255.554 142.491.095 172.484.162 217.964.849 259.166.383 4

Marketing

expenses 97.650.000 107.415.000 118.156.500 129.972.150 142.969.365 5 ^Inventorycost 274.593.900 464.428.564 767.374.863 1.024.884.5991.422.428.322

6

Provision fordevaluation of

inventories 13.729.695 23.221.428 38.368.743 51.244.230 71.121.416 7 ^Packagingmaterials 26.460.000 42.071.400 67.190.831 86.349.136 120.258.505

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8 Store maintenance

cost 2.000.000 2.200.000 2.420.000 2.662.000 2.928.200 9

Website maintenance

cost 15.000.000 10.000.000 10.000.000 10.000.000 10.000.000 10 Total 1.116.739.4411.463.055.1151.988.505.8182.547.125.7623.245.581.912

1.2.3 Total operating expenses

After determining fixed and variable costs, Glamrend can deduce that the total cost of maintaining the store's business operations remains sustainable year after year. Below is a table of total operating expenses for 5 years.

Table 4: Total operating expenses

Operating Expenses

Fixed Cost 140.736.800 140.736.800 140.736.800 140.736.800 140.736.800 Variable Cost1.116.739.4411.463.055.1151.988.505.8182.547.125.7623.245.581.912Total 1.257.476.24 1.603.791.9152.129.242.6182.687.862.5623.386.318.712

1.3 Capital structure

Glamrend, founded by four members, started with an investment capital of 1,400,000,000 VND. In the following years, Glamrend continuously received additional investments from the original members, with amounts of 100,000,000 VND, 100,000,000 VND, 120,000,000 VND and 150,000,000 VND from years 2 to 5. In total, during the 5 years, Glamrend raised a total of 1,820,000,000 VND. Below is a table showing Glamrend's capital structure.

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Table 5: Capital Structure

Capital Structure

Owner ^{Year 1}_(VND) ^{Year 2}_(VND) ^{Year 3}_(VND) ^{Year 4}_(VND) ^{Year 5}_(VND) Total % Tran

Van Khanh

<small>500.000.000 40.000.000 30.000.000 40.000.000 50.000.000 660.000.000 35,29% </small>

Nguyen Ba Hai Dang

<small>300.000.000 20.000.000 20.000.000 30.000.000 30.000.000 400.000.000 21,39% </small>

Nguyen Cong

Loc ^{300.000.000 20.000.000 25.000.000 30.000.000 30.000.000 405.000.000 21,66%}Nguyen

Le Quynh Anh

<small>300.000.000 20.000.000 25.000.000 20.000.000 40.000.000 405.000.000 21 66,% </small>

Total <small>1.400.000.000100.000.000100.000.000 120.000.000150.000.0001.870.000.000100,00% </small>

2. Revenue Stream

2.1 Revenue from modernized Ao Dai rental

Glamrend estimates that it will rent 18 modernized Ao Dai per day in the first year, bringing in an estimated revenue of 4,088,701 VND per day. Expected monthly revenue will reach 122,661,042 VND, and annual revenue will reach 1,471,932,500 VND. The number of Ao Dai for rent is expected to increase each year, and the rental price will also increase by 6% each year due to the influence of currency price fluctuations. Below is a detailed table of the revenue of the modern Ao Dai store in 5 years.

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Table 6: Revenue from modernized Ao Dai rental

Revenue from modernized Ao Dai rental ^Unit:VND

Type of Product rental ^Unit

per day

Average price per product

Average revenue per

day

Average revenue per

month

Average revenue per

year

Growth Rate Year 1 18 232.423 4.088.701 122.661.042 1.471.932.500Year 2 25 268.789 6.795.881 203.876.425 2.446.517.100 66,21% Year 3 38 290.458 10.984.953 329.548.603 3.954.583.234 61,64% Year 4 44 313.085 13.757.459 412.723.767 4.952.685.204 25,24% Year 5 <small>60 </small> 318.741 19.251.941 577.558.223 <small>6.930.698.672 </small> 39,94%

2.2 Revenue from accessories rental

Glamrend estimates that it will rent out 9 accessories per day in the first year, generating an estimated revenue of 338,944 VND per day. Expected monthly revenue will reach 10,168,333 VND, and annual revenue will reach 122,020,000 VND. The number of rental accessories is expected to increase each year, and the rental price will also increase by 6% each year due to currency price fluctuations. Below is a detailed table of the store's accessory revenue over the past 5 years.

Table 7: Revenue from accessories rental

Revenue from accessories rental ^Unit:VND

Type of Product rental ^Unit

per day

Average price per product

Average revenue per

day

Average revenue per

month

Average revenue per

year

Growth Rate Year 1 9 38.096 338.944 10.168.333 122.020.000 Year 2 <small>13 </small> 42.026 561.977 16.859.300 <small>202.311.600 65,80% </small>

Year 3 <small>19 </small> 51.468 964.164 28.924.917 <small>347.099.000 71,57% </small>

Year 4 <small>29 </small> 50.381 1.479.089 44.372.667 <small>532.472.000 53,41% </small>

Year 5 <small>44 </small> 49.359 2.196.082 65.882.458 <small>790.589.500 48,48% </small>

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2.3 Revenue from selling new modernized Ao Dai

In addition to income from renting modernized Ao Dai and accessories, Glamrend also has other sources of income from selling new modernized Ao Dai to customers in need. Often, when customers are interested in a specific Ao Dai model, they are willing to pay to own that shirt. However, the store only sells new modernized Ao Dai to ensure that rental modernized Ao Dai still has a variety of designs for customers.

Glamrend is expected to sell about 9 Ao Dai on average each month, generating an average revenue of 11,074,219 VND in the first year. The total revenue for the first year is anticipated to be 132,890,625 VND. Details of revenue from years 2 to 5 are outlined in the table below.

Table 8: Revenue from Selling new modernized Ao Dai

Revenue from Selling new modernized Ao Dai ^Unit:_VND

2.4 Revenue from commissions from photography and makeup partners

Glamend has worked closely with professional partners in makeup and photography to provide comprehensive services for customers who need to rent modernized Ao Dai and receive 5% commission fees. It helps provide a more perfect experience while also creating opportunities for customers to satisfy both their makeup and photography needs in a polite and luxurious setting.

Glamrend estimates that there will be 3 customers using makeup or photography services every day in the first year, bringing in an estimated revenue of 125,000 VND per day. Expected monthly revenue will reach 3,750,000 VND, and annual revenue will reach

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increase each year, and prices will also increase by 6% each year due to the impact of currency fluctuations. Below is a detailed table of the store's makeup and photography revenue over the past 5 years.

Table 9: Revenue from commissions from photography and makeup partners

Revenue from commissions from photography and makeup partners ^Unit:VND

Type of Product rental ^Unit

per day

Average price per product

Average revenue per

day

Average revenue per

month

Average revenue per

year

Growth Rate

Therefore, the store's revenue after applying product discounts from year 1 to year 5 is 1,747,037,321 VND, 2,853,666,977 VND, 4,583,084,122 VND, 5,878,847,420 VND and 8,258,697,299 VND.

After deducting the cost of goods sold and the store's operating expenses, the net income from operations from year 1 to year 5 is 48,124,998 VND, 543,639,049 VND, 1,353,445,563 VND, 1,768,809,308 VND, and 2,964,866,042 VND.

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