Tara Zafar

MGMT 1101 – Business Plan Project

April 7 2014

“It is our mission to seamlessly customize client-focused materials

so that we may continue to meet our customer’s needs. We at
Boston Backpacks hold ourselves to be partners with our
customers, community, and environment.”

Executive Summary

Boston Backpacks is a company located in the heart of one of America’s most

studious cities that creates customized backpacks for the contemporary student.
Continuous research and media have suggested that backpacks are not being used
correctly, if at all. Today’s students are favoring messenger backs, purses, and single-
shoulder bags as their essential accessory as they make their trek from class to class.
Medical research, however, reinforces the notion that the traditional double-strap
backpack, even if it’s not hip to the latest trends, is the best route to ensure back health,
but this is still not enough. Students today are carrying more and more in their bags –
sometimes up to 20 percent of their body weight – and it’s taking a toll on their body.
Boston Backpacks strives to create the unique, comfortable customized backpack that
curbs this issue based on individualized user needs. We take your most accurate current
measurements and provide you with just the right size backpack for long-term health and
comfort. The primary use of backpacks is to mobilize your possessions, but the close
second is to mobilize them in a “cool” bag. With preset designs and countless color
schemes, the possibilities are endless, and you get to choose the one you like best. In
making this choice, you can be confident that you are not only getting a product that is
high quality, but one that is sustainable; all of our backpacks are eco-friendly and made
from 100% recycled material. Each year, for every one hundred of these eco-friendly
backpacks that we sell, we donate five to local non-profits in Boston so that as many of
our neighbors can benefit from our product as possible. Though an incredibly large
undertaking, Boston Backpacks has thoughtfully crafted the plans for this business to be a
booming success in the immediate market region.
Marketing techniques can be challenging for companies that are on the rise, as
they typically lack the knowledge and resources to effectively build their brand name.
Boston Backpacks has developed extensive planning to conquer this challenge based
around the four P’s of marketing: product, price, place, and promotion. We found it best
to start a company in one of America’s busiest education cities. With hundreds of
thousands of K-12 and collegiate students in the immediate Boston area, there is plenty of
opportunity to solve the pressing backpack problem. By creating customizable backpacks
from measurements to style to design, we provide an appealing product at an affordable,
competitive price, ranging from $40 to $65 per bag. Once off the ground, spreading the
word about our business will be key; therefore, multiple advertising techniques will be
employed over the course of our first full market year, such as social media promotion,
attendance at local after-school programs and college fairs, and a Grand Opening sale
during our first month where we offer 10% off your regular-priced backpack purchase.
Clear goals, a driven team, and a quality product are just some of the elements that will
jump start Boston Backpacks to a marketing success.
We’ve opted to manufacture the backpacks entirely on our own with help from
our backpack builder team, who will assemble the backpacks in-house at our retail
locations. In doing so, we have complete control over the process and can ensure that
accurate dimensions are produced and that we are as environmentally-friendly as
possible. Customers will come into the store and will be measured by our experts to
obtain their personalized backpack dimensions. They will then be passed to the backpack
building team for assembly. We plan to purchase durable polyester fabric and
environmentally-friendly dyes to print designs with in bulk, as well as pre-owned
machinery to aid in the process. The behind-the-scenes work will be complemented by
our frontline staff members, who hold customer service as a top priority in the store. After
2-4 days, backpacks will be available for pickup by the customer, or we will give them to
option to have their bag shipped to their home address to eliminate coming back to the
store. We will use a survey to evaluate customer feedback continuously with aims to
better our service and process.
From a financial standpoint, Boston Backpacks will have a projected net income
for its first year. While all of its founders will have a buy in cost of $15,000 and an annual
first year income of $20,000 we will still be applying for a small business loan. For the
first five years, we will be renting office space to help save in mortgage cost. Expenses
for the year total a rough $350,000 and profits are projected to be $500,000. Our products
have a very high profit margin, especially after the textile machine, purchased for
$35,000 is fully paid off. Aware that a first-year company could experience slowed
expansion and revenue, Boston Backpacks is conservatively hoping for this success to
come to fruition, and is ready to focus all of our efforts into achieving this goal.

Company Background/Situational Analysis

Our shop will be set up with models of the different styles and fittings available.
Customers will come into the store to be fitted and will then design and order their
backpacks online at an in-store kiosk. Each partner will invest $15,000 toward the startup
of Boston Backpacks. These funds will go toward manufacturing, advertising, employee
salaries, rent, and other initial costs. We plan on hiring 2-3 extra employees at the time of
the shops opening. We have plans to team up with local colleges and school districts in
order to promote our backpacks. We will attend vendor fairs at these institutions where
our products and services will be brought to the customer in a convenient way. We have
hopes to spread our company online; in doing this, previous customers will have the
opportunity to re-order online instead of having to come back to the store.

SWOT Analysis

Strengths
·0 Great location in Boston
·1 Diverse managerial team
·2 Efforts concentrated on one product
Opportunities
·6 Customizable health benefits
·7 Expansion to different cities and states
·8 Good PR by donating products
Weaknesses
·3 No online platform at startup
·4 Need for immediate gratification
·5 No team entrepreneurial experience
Threats
·9 Decreasing student backpack use
·10 Rival companies’ similar products
·11 Losing profit by donating backpacks

Initiating our company in Boston allows us to reach the vast population of

students across the city. The members of the managerial team each come from different
backgrounds, bringing innovative ideas to the table and allowing this to transcend into
development of diverse product. Additionally, our company’s focus solely on backpacks
allows a concentrated effort on one product rather than several different products and
allowing us to continually strengthen it.
There are several weaknesses that our company may face; one may be the fact
that it is required for customers to travel to the store itself to order a backpack. This is
necessary in an initial purchase because we need to obtain customized measurements to
ensure the backpack’s highest quality and most efficient health benefits. Customers may
not like to wait for their customized backpack to ship and may seek product from a
different backpack company so that they can purchase and take home a bag on the same
day. Lastly, none of the partners within the company have participated in any prior
entrepreneurship endeavors; this may hinder a smooth company startup due to
inexperience.
Our colors, styles and designs are customizable, and the different combinations
are endless; this may attract consumers to the backpacks for their individuality. In
addition to our special product, we have the opportunity to expand to different cities and
states. Massachusetts isn’t the only state that can make use of our product, as students
exist all over the country and may appreciate an expansion of our company. Also, the fact
that we donate five backpacks for every one hundred sold provides a great amount of
positive public relations attention. Media coverage regarding our donation efforts may
help to spread the word about Boston Backpacks.
Threats to our company could include the decreasing use of backpacks by
students. Lots of people use purses or tote bags and backpacks. People are conscious of
their personal looks and appearances, which may cause them to reject any type of
backpack and negatively affect our sales. There is also possibility for rival companies,
such as The North Face and L.L. Bean seeing our company’s customizability ideas,
mimicking them, and expanding before we do; these bigger, more established companies
have the resources to do so and could very quickly deplete our company goals. Finally,
donating backpacks can pose a problem for our company financially. As a small startup
company, we don’t have a lot of financial backup to salvage any potential profit loss.

Management Team

Boston Backpacks is a Limited Liability Partnership. We decided on this

foundation because it decreases the risk of financial loss for each partner; with such a
large group, this seems like the most fair and equal choice for all of us.

Catherine Doherty – Executive President of Boston Backpacks

Cat will be a great asset to Boston Backpacks as it begins its journey for success. Cat has
an extensive background in both customer service and leadership. In her past
employment, she was responsible for organizing and tracking merchandise as well as
creating visually pleasing displays. Cat is involved with volunteer work at her church and
holds an executive position with the summer program it sponsors. This position requires
Cat to supervise approximately fifteen people, create new and exciting ideas, and
accommodate special requests in a polite and timely manner. Cat also lives near Boston
and is knowledgeable about the area. With her leadership abilities, innovative thinking,
drive for customer satisfaction, and knowledge of the environment, Cat will help Boston
Backpacks achieve all of its goals.

Joshua Hardy – Executive Vice President of Finance

Josh can attribute many great factors to Boston Backpacks as it takes its first steps off the
launch pad. Currently acting as a practice manager at Banfield Pet Hospital, Josh has
strived to make his hospital one of the most productive in the New England district. As
practice manager, he has led a staff of ten for about a year. Josh was promoted in April
2013 from his previous position as Lead Surgical Vet Tech. Thriving in his new position
in the Cambridge office, Josh’s home hospital has grown from the middle of the
standings to become one of the top three most productive in the district. His duties
include creating the weekly work schedule for the team, weekly ordering of goods to
maintain a well-stocked hospital, staying on a weekly and quarterly budget (items in the
budgets including employee pay, amount of money allocated for supplies, amount of
promotion services, etc.). He also sets goals and rewards for his team once a certain
amount of production or appointments have been seen. Using these managerial talents
among other financial and intuitive skills, Josh will prove to be a great asset to the
backpack company.

Ernest Gurule – Executive Vice President of Marketing

Ernie is currently studying communications, concentrating in Public Relations. Having
someone who has knowledge and creativity in the field of communications is essential
when entering the market with a startup company; Ernie’s experience with this, especially
in advertising and PR is invaluable to our organization. From Los Angeles, CA, Ernie
brings a different type of style and creativity from the traditional New England lifestyle.
Working in many customer service jobs, he has earned experience working with
customers and handling situations correctly. Additionally, volunteering with a non-profit
that works with inner city kids has allowed him to make networking connections with
schools where our backpacks could be donated. Taking on many leadership roles in
different clubs and organizations, Ernie has gained the experience to be a leader within
Boston Backpacks and is ready to take it to the next level.

Megan Moriarty – Executive Vice President of Operations

Megan is a well-rounded individual with various different experiences that will benefit
her work with Boston Backpacks. Megan’s creativity will be a huge asset in multiple
company facets, such as the development of exciting backpacks patterns and striking
marketing publications. Her experience as a sales associate at Old Navy for the past three
years has provided her with necessary customer service training, and her strength in this
area led her to be promoted to a peer mentor position in the store, where she teaches,
trains, and directs new Old Navy sales associates. Outside of the retail environment,
Megan has experience in leadership having served on her respective student governing
boards in both high school and college. Collaboration, decision-making, and peer
representation are all familiar concepts to her, and she is ready to work on this exciting
new project with these in mind.

Zachary Primo – Executive Vice President of Sales

Zach is suitable for any position within Boston Backpacks. Whether it is a managerial,
financial, or creatively motivated position, he is ready to fill any spot any time, but is
particularly strong in the field of mathematics, making him an asset to the company’s
financial organization. He is available on a consistent schedule and is flexible for
meetings, showing his commitment to the project and his willingness to devote time to it.
Zach’s accomplishments in high school track and field led him to be a strong leader,
where he developed necessary skills that he can put to use in his time at Boston
Backpacks.

Tara Zafar – Executive Vice President of Human Resources

Organized, meticulous, and creative, Tara is an excellent addition to the Boston
Backpacks managerial team. She has experience with graphic design and is familiar with
Adobe Illustrator and Photoshop, which will be helpful for the company in relation to
marketing strategies and development. She previously created the new logo for a local
Massachusetts town’s newly renovated public library. Her ability to keep organized will
help tasks go smoothly and maintain the clean, structured face of the company. Tara also
works at a nationally known cupcake store, Georgetown Cupcake, and is up to beat on
current designs that appeal to the media. At Georgetown Cupcake, employees are
required to not only design fondant, professionally gift wrap boxes, and put together
beautiful displays, but to also be competent in stocking all supplies, keeping track of
national preorders, and much more. These skills are great strengths that will aid in Boston
Backpacks’ success.

External Environment
 Students nationwide carry backpacks to and from school on a daily basis.
Backpacks are a necessity, but also a fashion statement. Students want a backpack that is
durable but also appealing to their sense of style. According to a New York Times article,
“wearing your interests on your bag has become a pretty prevalent trend” and “bags [are
seen] as a huge form of expression” (Szabo, 2004).

·12 According to the U.S. Census Bureau survey from 2010, Boston is home to a
diverse selection of every ethnicity imaginable. Less than one quarter of the
Boston population falls below the poverty line and the median income is
approximately $33,000 per year (U.S. Department of Commerce, 2010).
Therefore, the average Boston student is likely part of the middle class. This
allows us to enter the market with competitive pricing geared toward the average
middle class customer. Additionally, according to the Boston Public School
District website (www.bostonpublicschools.org), there are 127 public schools
alone in the city of Boston school district (BPS Communications Office, 2013).
This number does not include any private, charter, or vocational K-12 schools or
the numerous colleges and universities within the city, suggesting that there is a
high volume of students in the surrounding area.

·13 Our business needs to comply with local limited liability partnership registration
requirements. This will be done through the office of William Francis Galvin, the
Secretary of the Commonwealth of Massachusetts. All necessary forms for a
limited liability partnership can be filled out and filed online or through the office
located at One Ashburton Place, Boston, MA (http://www.sec.state.ma.us)

·14 WebMD has an article titled “Kids Backpacks 101,” devoted to educating
consumers about the safest and healthiest backpack attributes. In the article, Lori
Karol, MD, states that heavy backpacks pose risks of muscle and joint aches and
pains, as well as the possibility of falling and incurring injury due to unevenly
distributed weight across the back (Hatfield, 2014). Additionally, Paula Steib
(2005) writes an article suggesting that students should carry no more than ten
percent of their body weight in their backpack; however, students are typically
carrying more than twenty percent of their body weight and it is being unevenly
distributed across the body. The backpack problem has and continues to plague
students, as seen in the media each year.
·15 Outside of general competition, there will not likely be a special interest
competition for our product; in fact, they may find us appealing. Our backpacks
are made from green products which may apply to humanitarian and
environmentalist groups. We also donate five backpacks per one hundred sold to
students in need, which may appeal to one of the many local non-profits or
community outreach groups.

Competitor Environment

Students today have a variety of companies to choose from when making a

backpack selection. Well-known and established corporations like The North Face and
L.L. Bean provide quality unisex backpacks, among several other extensive product lines,
that appeal to students nationwide. In addition to dimensional customizability, our
backpacks will also have design customizability and allow the individual to choose a
pattern suited to their style. This increased freedom of choice is a departure from the
competition’s limited design selection.
Founded in 1968, the North Face (www.thenorthface.com) has been a prominent
force in the market for durable outdoor gear, including heavy duty backpacks. Generating
over a billion dollars in annual sales each year, they are a large-scale company that
employs several successful marketing strategies that in turn generate customer loyalty.
For example, as seen on the corporate website, the North Face features several
professional athletes that endorse products for promotional advances, including their
durable backpacks. Customers enjoy product guarantees with a warranty up to company
discretion, even after extended periods of time. They partner with nonprofit
organizations, consequently increasing their public relations and media coverage.
Additionally, they aim to create more sustainable products each year, conservatively
using less fabric annually and reducing their carbon footprint (Child, 2012).
L.L. Bean (www.llbean.com) is another company that successfully markets with
their emphasis on excellent customer service. They promise a lifetime guarantee on all
products with no questions asked, replacing all items at no charge no matter when they
were purchased. Additionally, L.L. Bean engages in community outreach and partners
with several nonprofits just like The North Face, supporting the idea that this is a
successful marketing strategy. For example, according to the L.L. Bean website,
following the Boston Red Sox successful World Series bid in 2013, L.L. Bean developed
customized boots for all extended members of the Red Sox organization (L.L. Bean,
2013). This activism and charity in our immediate neighborhood poses a potential threat
to Boston Backpacks’ prospective outreach programs, but also serves as a great model to
follow.

Marketing Goals and Objectives

Boston Backpacks is not expecting the first few months to be a booming success,
as we still need to establish our brand name and presence in the market. However, we do
expect to find prospering longevity in our market with the first full year. In anticipation of
this uphill start, we will have to be rather cautious about the amount of product kept in
stock, which will ultimately be determined by our volume of sales.
We plan to open our first retail storefront in the mid-second quarter (late April
2014). Sales goals for the first year are particularly conservative due to the mid-second
quarter opening, but we aim to earn approximately $211,754. If Boston Backpacks sees
sufficient success at our flagship location, we hope to expand to Providence, RI, a
neighboring urban location, by the end of 2016. Ultimately, we have goals to continue
expansion into major cities nearest those with a high concentration of college students
along the entire east coast within the first seven years of opening. As a smaller starter
business, we do not expect to obtain a huge portion of the market share as we will be
competing with larger competitors like The North Face and L.L. Bean; however, of the
anticipated 730 million dollar market according to www.ibisworld.com, Boston
Backpacks is striving to reach 0.1-0.2 percent of the market within a full four quarters.
This market is not solely for backpacks, but for bags of all types in the United States
market.
We feel strongly that our company should be held to social and communal
responsibilities, and therefore our return on investment will be a smaller portion during
the startup stages of business. After continuing success, we may be able to charge higher
prices for our goods. However, in our first year where we will charge $40 to $65 per
backpack, realistic calculations leave us with aspirations to gross approximately five
hundred thousand dollars in our first full market year. This number considers the point at
which we are entering the market, when the quarters close, and the cumulative totals.
Entering midway through Q2, though not ideal, may be advantageous as we plan to have
a Grand Opening sale to kick start our business. By the close of Q3 in September, right
around the same time that students return to school in the fall, the anticipated sales
number will surge, as backpacks will be in high demand. Finally, by the close of Q4 at
the end of the year, following the holiday season, we expect sales to once again surge as
backpacks may be purchased as gifts. After all expenses, equaling approximately
$159,000, are considered and deducted from the gross total, anticipated profits for our
condensed first market year will be just over two hundred thousand dollars.
A major part of this business endeavor will be to make the public aware of the
social responsibilities that we are instilling in the company and transcending to the
prospective customers. For every one hundred backpacks sold, we will donate five
backpacks. The immediate community is also our immediate prospective loyalty;
therefore, we shall find schools and clubs where underprivileged children are more
prevalent and start sending our donations there. There are plenty of good charities across
the world, but Boston Backpacks is ready to enjoy sharing our newfound success with
those closest to us. Finding medical support to back us will also be a great addition to our
product. Further research is pending, but we hope to reduce the amount of back injuries
that students and others obtain from carrying bags that are not the appropriate size and do
not distribute weight correctly.

Marketing Strategy and Tactics

Our timeline will be a key component in staying on track and realistic with our
goals. We have many opportunities to set up venues at colleges and K-12 schools, after
school programs, and activity fairs. According to Northeastern University’s website
(www.northeastern.edu), each year approximately 300,000 students move to Boston in
pursuit of undergraduate degrees from one of the thirty Boston metro area institutions.
Additionally, there are 127 public schools in the Boston Public School District alone
(BPS Communications Office, 2013). Our location provides accessibility to the vast
target population and the large student demographic has helped us to understand and form
profit and sales goals.
We will be utilizing Market Segmentation as our main marketing strategy. This
allows us to appeal to very specific groups of customers, which makes the most sense for
our product. Customers can be further broken down into more detailed categories,
including but not limited to factors such as age and profession. In doing so, we can aim
for different goals at different venues based on the projected customer demographic that
may be attending and that we should aim to attract; for example, the strategy used to
attract customers at a college fair will be significantly different than tactics used at a
children’s after school program.

·16 Product: The style of backpacks will change depending on the user demographic.
The younger the customer, the smaller and more youthful the style; an athlete or
outdoorsman may prefer something more sporty, simple, and efficient. These
variations will exist in backpack design, color, and pattern, which can be chosen
by the customer to reflect their personality and preferences.

·17 Price: The price of the backpack will depend on the complexity of the style and
design. The prices will range from $40 to $65; because we are hoping to appeal to
middle class individuals, this price is mutually beneficial as it is both affordable
and profitable.

·18 Promotion: Our timeline outlines how we will use various promotional
techniques to attract different customers. Our biggest promotions will focus on the
fact that we are eco-friendly and that we donate backpacks to local charities.
Additionally, we hope to promote the company immediately after opening by
hosting a Grand Opening Sale for the first business month, taking 10% off the
full-price cost of a backpack. This will bring customers in the door right away and
kick-start the establishment of our brand loyalty.

·19 Place/Distribution: We are located in the greater Boston area, which is home to
hundreds of thousands of people of various backgrounds, cultures, ethnicities,
socioeconomic statuses, and professions. Schools of all levels are prevalent
throughout the area and our target population is students, thus giving our
company an extensive customer pool.

Target Market

The target market for Boston Backpacks is primarily composed of students.

Within this market, there are several subdivisions, as listed below.
·20 Geographic Segmentation: Northeast Region, Boston Proper, Urban/Suburban.
·21 Demographic Segmentation:
·22 Gender: male and female.
·23 Age: approximately 5-30 years old (kindergarten through graduate
school).
·24 Education: any educational background from kindergarten to graduate
student; focus specifically on middle school to college-aged students.
·25 Race/Nationality: any race.
·26 Life Stage: child, teenager, collegiate adult.
·27 Income: primarily middle class – anywhere from $33,000 and up.
 ·28 Occupation: students, athletes, young professionals.
·29 Psychographic Segmentation:
·30 Personality: creative, fun-loving, energetic.
·31 Values: achievers, believers, fulfillers, activists.
·32 Lifestyle: moderate to upscale.
·33 Benefit Segmentation:
·34 Comfort: specifically built for each individual customer’s maximum
comfort.
·35 Durability: very durable; no lifetime guarantee, but long backpack
lifespan.
·36 Health: main purpose is to improve back health.
·37 Luxury: not a cheap or bargain product, but not extremely expensive
either.
·38 Volume Segmentation:
·39 Usage: light to heavy users.

Competitive Analysis

During its preliminary state, Boston Backpacks will face uphill battles against
competitor marketing tactics. Competitors will have the ultimate upper hand when it
comes to consumer loyalty; breaking the loyalty bond will be one of the toughest
challenges that we face in convincing customers that our quality products are worthy of a
departure from those that are from long-time favorite brands. Both The North Face and
L.L. Bean, our two main competitors, have significant advantages over Boston
Backpacks, with resources to pinpoint and advertise them to the public.
The North Face (www.thenorthface.com), markets using not only their brand
name on a variety of products including backpacks, but also using celebrity athletes that
endorse their product. This rival company also allows their product to be sold at an array
of stores including Dick’s Sporting Goods, Macy’s, T.J. Maxx, and even their own North
Face retail stores. This allows their product lines to be seen many times in different
places (Child, 2012).
As for L.L. Bean, another major backpack competitor, we are at a marketing
disadvantage compared to their emphasis on customer service. They offer a lifetime
guarantee on all of their products, no questions asked, and pledge to replace your old
product with a brand new one regardless of when you purchased it (L.L. Bean, 2013).

Location Analysis

The main priority is to launch Boston Backpacks as close to the center of Boston
as possible. The need for a stand-out location with lots of foot traffic from potential
customers is critical. Boston Backpacks will be starting its first year on a tight budget,
like all companies; for this reason, we find it more appropriate and cost-efficient to start
our company in the close neighborhoods of Boston.
Cambridge is the ideal location for our first retail storefront, as the buzzing
downtown area is located in close proximity to the city of Boston itself and is accessible
by public transportation. This provides excellent opportunity to get our student backpack
product and brand on the market. Leasing or even potentially owning a storefront in
Cambridge is much more likely to be within our monthly budget than a storefront in
Boston Proper. The demographics in Cambridge are still quite comparable to Boston
Proper and similarly house a variety of different income levels, races, and education
levels. Additionally, the cost of a backpack in the upper levels of the bag and textile
market forces us to focus on the middle to upper class demographics of Cambridge and
the surrounding Boston metro area; thus, since middle and upper class residents are a
prominent demographic in Cambridge, the downtown area with foot traffic from these
residents will be a perfect host to the ideals of our company.

Manufacturing Plan

Boston Backpacks’ main concern is to manufacture products that will alleviate the
strain that users put on their back by creating a traditional, double-strap backpack
measured to fit the user’s body type. This customizability limits our production options to
manufacturing the bags in-house in our retail location. We plan to hire an entire team of
backpack builders whose sole responsibility is to construct the backpacks. We will order
plain white polyester fabric in bulk, and then use our machinery to print the specific
patterns and designs onto the polyester fabric before assembly. This will be done using
AirDye solutions (which we will purchase in bulk as well), an environmentally-friendly
fabric dye that eliminates the use of water and allows us to create an eco-friendly product
(Otsuki & Raybin, 2009).The dye will soak into the polyester and dry overnight. Then,
the backpack builder team will use our recycled, pre-owned machinery to stitch the bag
together based on the given dimensions. Although a lengthy process, this ensures that we
are providing a truly customized product that will eliminate back pain by perfect
measurements and allows us to have control over the process.

Service Plan

Since one of our major competitive assets is projected to be our fitted backpacks,
we will need to measure customers in-store to ensure that accurate height and weight are
taken for the individual before manufacturing their customized backpack. However, once
the customer has an accurate height and weight taken, we hope to save these
measurements in our computer system for future reference. That way, assuming that the
measurements have remained unchanged, the customer can access their previous
measurements from our online database the next time they purchase a backpack,
ultimately eliminating the need for them to come into the store and instead conveniently
order from the comfort of their own home.
Another customizable attribute of our backpacks will be their patterns and
designs. We plan to have approximately ten to fifteen preset print patterns that can be
chosen for a backpack, with additional variation available when selecting the pattern
color scheme. However, the goal is to create patterns and designs that are desired in a
contemporary backpack. We plan to venture into area colleges, universities, and K-12
schools to not only promote our product, but to assess what students are looking for in a
backpack and get their feedback. Additionally, we will be able to evaluate which patterns
are most popular and which are not based on how many patterns are ordered. We will
keep track of this in our computerized system as well and decide based on this tracking
which prints should be kept or discarded. To keep the product fresh and keep customers
engaged, we hope to produce new prints on a yearly basis to mix up the offerings,
continually evaluating which ones are most popular so that we are catering to the desires
of customers.
Our hope is to provide high quality customer service to let our patrons feel
respected and valued. To assess this process, we hope to employ the customer survey
approach that many retail companies use today. At the bottom of every customer’s order
receipt, we will include an online link to a short survey that the customer can take to tell
us about their experience. This will contain basic likert-scale questions asking them to
rate different aspects of their experience on a scale of 1-10, as well as a chance to provide
open-ended feedback. As a thank-you for participating, we will reward the customer with
a ten percent off coupon with no expiration date for a future purchase. This incentive will
drive customers to want to take the survey and provide us with an abundance of feedback
to modify or change things that are not working.

Projected Financials

After meticulous calculations, our income statement provides the financial

ventures projected for our first year. We are projecting that we will reach a net income
slightly over two hundred thousand dollars. This number has been reached by calculating
all of the expenses that Boston Backpacks will encounter in its first year. The average
cost per square foot is roughly $20.00 in the surrounding areas of Boston (including our
goal city of Cambridge). With a small store front to open up the business, the average
cost for a 160 square foot store will be about $3,000 per month (Waters, n.d.). Utilities
required to run the store would account for approximately $3,000 annually, including gas
to heat the building, electricity, and internet and phone services. Water will be included in
the cost of rent. Giving each founder an even cut of the revenue of $20,000 per year will
add to a total of $120,000; with prospects of higher sales and revenue, this figure is not
set in stone and will fluctuate over the years. Insurance will cover the business if faults
are found on Boston Backpacks, and will have an annual cost of $3,646.
Boston Backpacks recognizes that we have an obligation to commit to corporate
social responsibility; thus, we identify as philanthropic company for our efforts with
nonprofit organizations. With that being said, for every hundred backpacks sold, the
company will donate five backpacks to local charities. The donations will occur in the
last quarter of the year and account for the total year sales, allowing us to make a larger
contribution as opposed to a few donations here and there. If sales are on cue, we will be
donating roughly 2,000 backpacks at the end of the first market year. This price is
projected to be roughly $30,000 as shown in the income statement above.
Operations will take a toll on this company. Boston Backpacks will face a
projected total of $125,600 in its first year. While the founders of the business will play a
large role in the day to day company operations, it will still have to hire extra help for the
store. Paying minimum wage and hiring approximately 3 employees will incur an
additional $38,400 cost for these employee paychecks. This number can be broken down
by hiring three people at the Massachusetts minimum wage rate of $8.00 per hour (U.S.
Department of Labor, 2014); if the employees are to work roughly 32 hours per week
with two weeks off per year, we reach the provided approximate cost. We will also be
hiring a textile and production team in total four people full time at $10.00 per hour at 40
hours a week.
The National Association for College Admission Counseling is one of the few
conferences that Boston Backpacks will take part in. There is a fee of $790 per night, per
table. This data has been used to configure a vast majority of the advertising expenses,
including the other college-based and college-focused conferences in the Greater Boston
area that the business will take part in. $2,500 has also been set aside for office supplies
for the year.
Finally, operating expenses will take another hit in Boston Backpack’s bottom
line. $60,000 is expected to be spent on both raw materials and machinery. Between
fabric, zipper, and back support materials, a rough total of $25,000 will be exhausted on
raw materials; another $35,000 will be spent on used equipment. These machines can be
found on various sites such as Craigslist and eBay.
With all expenses accounted for, Boston Backpacks will be taking in a net income
of $211,754. This profit will allow for Boston Backpacks to grow extensively. Profit will
be saved following the first year to ensure the longevity of the business’s existence, but if
a similar profit is made in consecutive years, then significant expansions will be made to
the company. New machinery and a larger second store front will be the first priority
large-scale investments in the company. Once Boston Backpacks is well-known in the
Greater Boston area, we seek to increase prices and spend a greater amount of money on
materials used for product manufacturing.
 Appendix A

Map by MPI's Zara Matheson, data from U.S. Census Bureau

Appendix B
Appendix C

Appendix D
 Boston Backpacks Marketing Timeline, Years 1, 2 and 3 (2014 to 2016)

Boston Backpacks Marketing Plan (2014)

April 1st Start Social Media Pages
April 15th Start Flyer Circulation
April 30th Start Entering College Conventions
May 1st Street Face to Face Questionnaire
July 1st-31st Social Media Promotions
August 15th Back to School Promotion
September 15th College Convention (College Fest, Hynes Conv.)
December 1st-24th Social Media Promotion

Boston Backpacks Marketing Plan (2015)

April 15th Start College Conventions
May 1st Street Face to Face Questionnaire
July 1st-31st Social Media Promotion
September 15th College Convention (College Fest, Hynes Conv.)
December 1st-24th Social Media Promotion

Boston Backpacks Marketing Plan (2016)

February 1st Billboard Promotions
August-October Social Media Productions

Appendix E

The customer experience survey can be accessed online at:

https://www.surveymonkey.com/s/9DVK7VJ
 Appendix F
Revenues
Gross Sales $500,000.00
(Projected)
Backpack Donations ($30,000.00)
Net Sales $470,000.00
Cost of Goods
 Raw Materials $25,000.00
Textile Machine $35,000.00
Cost of Goods $60,000.00
Gross Profit $410,000.00
Operating
Expenses
Salaries of Sales $38,400.00
people
Salaries of $41,600.00
Production team
Salaries of Textile $41,600.00
team
Advertising $1,500.00
Office Supplies $2,500.00
Total Expenses ($125,600.00)
General Expenses
Office Salaries $120,000.00
Insurance $3,646.00
Rent $36,000.00
Utilities $3,000.00
Total General ($162,646.00)
Expenses
Owner’s Equity
Owner Investments $90,000.00
Net Income $211,754.00

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