Trademarked Resort Wear Distributor

EXECUTIVE SUMMARY

OBJECTIVES

MISSION

BUSINESS OVERVIEW

PRODUCTS

OPERATIONS

MARKET ANALYSIS

BUSINESS STRATEGY

COMPETITION

ORGANIZATION

MARKETING & SALES

MANAGEMENT SUMMARY

FINANCIAL ANALYSIS

MUSKRAT BLUFFS APPAREL

45 Resort Way
South Lake Tahoe, California 96150

Muskrat Bluffs Apparel is a brand of resort wear and casual lifestyle clothing that is about enjoying the good life and expressing it. Our inspiration comes from the Muskrat Bluffs Resort and Entertainment Complex, a locale where many are enjoying the good life.

EXECUTIVE SUMMARY

As I sit in my office wading through the mounds of work and encounter one frustration after another, I close my eyes and imagine myself at Muskrat Bluffs. A place where I can sip my favorite drink, watch the sunset over the beautiful lake, and enjoy the company of good friends. I can see myself kicking back and saying, “Ahhh—this is the good life.” The tension leaves me and I am left to relax.

There is nothing better than the good life. Every person’s idea of the good life is a little different than the next. The one common theme is that the good life is about doing what you love to do. It is about enjoying life and living your dream. It can be about relaxing on the shoreline in seclusion or enjoying a lively time with friends. It is what you want to make it. What’s the good life to you?

Muskrat Bluffs Apparel is a brand of resort wear and casual lifestyle clothing that is about enjoying the good life and expressing it. Our inspiration comes from the Muskrat Bluffs Resort and Entertainment Complex, a locale where many are enjoying the good life. It is a place where one can get away from the office and remember what it feels like to kick back and say, “Ahhh—this is the good life.”

Muskrat Bluffs Apparel will enter the market by establishing a location in the Resort and Yacht Club at Muskrat Bluffs, which is connected to the Entertainment Complex on beautiful Lake Tahoe. This resort destination will welcome over 250,000 visitors each year and has plans to add an additional four resorts over the next ten years throughout the United States and Mexico. Muskrat Bluffs Apparel will be the exclusive resort wear and casual lifestyle clothing in the Resort and Yacht Club at Muskrat Bluffs.

Most of the visitors to the resort are baby boomers and empty nesters with high discretionary incomes, a zest for enjoying life, and a desire for high quality clothing. In addition, the complex attracts people of all ages who are yearning to enjoy the good life and find ways to express it. The customers of the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex are Muskrat Bluffs’ target customers. As we grow at the Resort and Yacht Club at Muskrat Bluffs, we will begin to spread the good life at trade shows so that other customers around the country can enjoy the pleasures of Muskrat Bluffs.

With our location at the Resort and Yacht Club at Muskrat Bluffs, we can bring our brand to life. Customers can experience what it feels like to enjoy the good life. Muskrat Bluffs Apparel will be there to facilitate the customers’ enjoyment of the good life and to express it in a line of clothing that will remind them of what it feels like to kick back and say, “Ahhh—this is the good life.”

The passion behind Muskrat Bluffs Apparel and the reason for its efforts is to express the good life. Muskrat Bluffs is a company that is about doing what you love to do, enjoying life, and living your dream. Our dream at Muskrat Bluffs is for people to relax how they see fit and to have a great time doing it. Nothing makes us happier than when we are doing what we love to do. Providing great apparel in a great atmosphere while making some new friends is what we love to do. We are committed to our customers and we are committed to high quality in our products, our service, and in our lives.

When you are enjoying what you do, you can do amazing things as our financial statements reflect. As you read through our business plan, please enjoy and take a little time to think about what the good life is to you.

OBJECTIVES

The objectives of Muskrat Bluffs are:

1. To provide the customers of the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex with high quality resort wear and casual lifestyle clothing.
2. To focus on the customer and make them part of the Muskrat Bluffs experience.
3. To sell Muskrat Bluffs Apparel in new locales by the end of our third year of business.
4. To promote the Muskrat Bluffs lifestyle and resorts.

MISSION

To be an expression of the good life. Muskrat Bluffs Apparel is inspired to express life’s dreams in style. We believe living your dream is what life is all about and behind every decision made by Muskrat Bluffs. Muskrat Bluffs Apparel consists of only the highest quality materials and is available at lifestyle destinations. We are dedicated to doing the right thing in our office, in our professional relationships, and in our community.

Enjoy our destination, enjoy our brand.

Keys to Success

A few of Muskrat Bluffs Apparel’s keys to success are:

1. Offering high quality, desirable resort wear and casual lifestyle clothing in a location that brings our brand and image alive.
2. Converting customers from “just looking” to buying.
3. Generating word–of–mouth marketing.
4. Creating repeat business.

BUSINESS OVERVIEW

Muskrat Bluffs Apparel is a line of resort wear and casual lifestyle clothing inspired by the Muskrat Bluffs Entertainment Complex, which is a four–story 30,000 sq. ft. waterfront mega entertainment complex. The top floor is the Muskrat Bluffs restaurant, which offers gourmet dining in a fun, relaxed atmosphere. Muskrat Love Nightclub entertains guests on the middle two floors. The lowest level includes the Mega Muskrat sports bar and grill, a tiki bar, concert stage, the Muskrat Mini Mart, and Wet Rat Shop, which is a convenience store and seller of Muskrat Bluffs souvenirs. Muskrat Bluffs Apparel will establish its first retail location in the lobby of the Resort and Yacht Club at Muskrat Bluffs, which will be physically connected to the entertainment complex. The Resort and Yacht Club at Muskrat Bluffs will boast 116 luxury rooms, a 100 slip yacht club, a salon and spa (located across from the Muskrat Bluffs Apparel Shop), indoor/outdoor swimming pool with swim–up bar, handball/racquetball courts, indoor/outdoor sand volleyball court, workout facility, a one screen movie theater, and a 10,000 sq. ft. convention center.

The focus of Muskrat Bluffs Apparel is marketing and selling its resort wear and casual lifestyle clothing to customers of the Muskrat Bluffs restaurant and the Resort and Yacht Club at Muskrat Bluffs. An outside fashion consultant and a private label clothing contractor will assist Muskrat Bluffs in designing and producing our clothing. In the third year of operation we will begin marketing and selling at trade shows throughout the United States. We will continue to establish our own boutiques in new Muskrat Bluffs locations and Resort and Yacht Club at Muskrat Bluffs complexes. Currently, four additional Muskrat Bluffs Resort and Yacht Club complexes are to be added over the next ten years throughout the United States and Mexico.

PRODUCTS

Muskrat Bluffs Apparel offers a line of resort wear and casual lifestyle clothing for men and women age 21 to 65. Muskrat Bluffs products are inspired by the Muskrat Bluffs. The product line and pricing is based on observational research of the Muskrat Bluffs clientele and expert interviews conducted with key Muskrat Bluffs Inc. employees and fashion consultants. The following table contains the list of products and prices available from Muskrat Bluffs Apparel.

The quality of fabric is a distinguishing characteristic of clothing, so Muskrat Bluffs will use the highest quality fabrics with bright, fun colors and designs to reflect the customers’ demands for high quality and unique resort wear and casual lifestyle clothing. Every article of clothing will display the Muskrat Bluffs logo which serves as a reminder of guests’ experiences at the Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs, as well as an expression of high quality casual wear that reflects enjoying the good life.

The following product descriptions and pictures display the basic design concepts and styles behind the products that Muskrat Bluffs Apparel will produce and market under its brand. Women’s swim suits and sandals for men and women will not be designed or produced by Muskrat Bluffs Apparel but will be purchased for resale. Muskrat Bluffs Apparel will also retail Maui Jim sunglasses.

Men’s Clothing

Short–sleeved polo shirt

1. Pique knit
2. Two–button placket
3. Ribbed polo collar
4. Open hem
5. Muskrat Bluffs logo accents the chest
6. Machine washable
7. Cotton/polyester

Camp Shirt

1. Short–sleeved
2. Pajama collar
3. Button–front
4. Straight hem with side slits
5. Muskrat Bluffs logo accents the chest
6. Machine washable
7. Silk/cotton

Button–front short–sleeved shirt with collar

1. Button–down collar
2. Chest pocket with Muskrat Bluffs logo
3. Double back pleats
4. Slightly curved shirttails
5. Machine washable
6. Cotton/linen

Button–front long–sleeved shirt with collar

1. Chest pocket with Muskrat Bluffs logo
2. Point collar
3. Adjustable barrel cuffs
4. Double back pleats
5. Slightly curved shirttails
6. Machine washable
7. Cotton/linen

Pocket T–shirt

1. Crewneck
2. Chest pocket with Muskrat Bluffs logo
3. Machine washable
4. Cotton

Band collar shirt

1. Short–sleeved
2. Button–front
3. Chest pocket with Muskrat Bluffs logo
4. Double back pleats
5. Slightly curved shirttails
6. Machine washable
7. Cotton/silk

Shorts

1. Zip fly with button closure
2. Front slant pockets; back button pockets
3. Flat front
4. Belt loops
5. Approximate inseam: 9”
6. Machine washable
7. Cotton/silk

Slacks

1. Zip fly with button closure
2. Front slant pockets; back button pockets
3. Flat front
4. Belt loops
5. Machine washable
6. Cotton/silk

Board shorts

1. Velcro fly
2. Side pockets; single back patch pocket with Velcro flap
3. Drawstring and elastic waist
4. Machine washable
5. Cotton/polyester/nylon

Swim suits

1. Drawstring and elastic waist
2. Side pockets; single back patch pocket with Velcro flap
3. Mesh lining
4. Machine washable
5. Cotton/polyester/nylon

Women’s Clothing

Short–sleeved polo shirt

1. Breathable stretch cotton mesh, mercerized for added luster
2. Two–button placket
3. Ribbed polo collar and armbands
4. Even–vented hem with inner grosgrain taping
5. Muskrat Bluffs logo accents the chest
6. Machine washable
7. Cotton/elastane

Fitted T–shirt

1. Crewneck
2. Muskrat Bluffs logo accents the chest
3. Machine washable
4. Cotton

Tank

1. Scooped neckline
2. Muskrat Bluffs logo accents the chest
3. Machine washable
4. Cotton/spandex

Summer dresses

1. Slips on over the head
2. Form–fitting at bust; easy–fitting at hip
3. Machine washable
4. Cotton

Shorts

1. Sailor short style
2. Zip fly with hook–and–bar closure
3. Front slant pockets; back besom pockets
4. Belt loops
5. Approximate inseam: 7”
6. Machine washable
7. Cotton/spandex

Jogging suit

1. Soft hoody jacket with full zip front and drawstring hood
2. Soft, stretchy pants with drawstring waist and straight legs
3. Muskrat Bluffs logo accents the chest of jacket
4. Machine washable
5. Cotton/nylon/spandex

Capri pants

1. Zip fly with button closure
2. Front slant pockets; back besom pockets
3. Belt loops
4. Machine washable
5. Cotton/spandex

Slacks

1. Zip fly with hook–and–eye closure
2. Flat–front style
3. Front slant pockets; back besom pockets
4. Belt loops
5. Machine washable
6. Cotton/spandex

Cover–ups

1. Sleeveless dress
2. Two–way zipper in front
3. Slit pockets
4. Slits at hem
5. Muskrat Bluffs logo accents the chest
6. Machine washable
7. Cotton

Miscellaneous Items

Towels

1. 6.5’ by 3’
2. Displays Muskrat Bluffs logo
3. Machine washable
4. Cotton

Robes

1. Kimono style robe
2. Unisex
3. Two large pockets at hip
4. Muskrat Bluffs logo accents the chest
5. Machine washable
6. Cotton

Beach bags

1. Solid–colored webbed straps
2. Striped terry toweling
3. Muskrat Bluffs logo
4. Snap tab closure
5. Interior zip and wall pockets
6. Cotton/terylene

Belts

1. Casual style
2. Men’s and women’s
3. Black and brown
4. Nickel buckle
5. Leather

OPERATIONS

Muskrat Bluffs Apparel will utilize an outside fashion consultant who is familiar with the Muskrat Bluffs style and brand to assist in product development and to monitor fashion trends. After an extensive search, Muskrat Bluff Apparel’s products will be designed and manufactured by Toggles, which is a private label clothing manufacturer located in Racine, Wisconsin. Toggles will design the pattern for each article of clothing, assist in procuring the fabric, manufacture the clothing, place the Muskrat Bluff logo and tag on each piece, and ship them to Muskrat Bluffs. Please, refer to the appendix for a list of selection criteria and other private label contractors that were considered.

Using Toggles will allow Muskrat Bluffs Apparel to take advantage of the experience and production capabilities of an established clothing manufacturer without the large initial investment and overhead expenses. This enables Muskrat Bluffs Apparel to focus its experience and resources on marketing and sales.

The minimum run for each clothing design is 300 pieces. This includes three different fabric choices and four different sizes for each run (S, M, L, XL).

Muskrat Bluffs management and its outside fashion consultant will be traveling to Toggles in the fall of 2007 for a four hour consultation to have a template made for each design of clothing and to choose the fabrics. With the advice and expertise of Toggles and the Muskrat Bluffs consultant, we will determine all of the final specifications for each product. Then Toggles can begin production and ship the clothes to Muskrat Bluffs in Lake Tahoe by March of 2008.

According to Toggles, the costs involved with Muskrat Bluffs Apparel’s products include fabric, labor, trim, labels, and shipping. Please refer to the appropriate table for unit costs of each product.

Based on industry norms and analysis, Muskrat Bluffs Apparel charges a wholesale price that provides the company with a 50 percent markup on all items. The retail price for Muskrat Bluffs Apparel allows retailers to achieve a markup of 56 percent on all items. Muskrat Bluffs’ prices are competitive, yet reflective of its quality. This pricing strategy enables the company to differentiate itself from its direct competitors. For a list of prices for each item, refer to the appropriate table.

MARKET ANALYSIS

Lake Tahoe is comprised of a four–county area including Placer County, Nevada County, El Dorado County, and Douglas County. Total population of the four–county area is 163,259. Total apparel store sales in Lake Tahoe for 2005 was $159,659,000 and total apparel store sales in all of California for 2005 was $2,898,417,000. Total disposable income in California for 2005 was $114,511,668,000.

The following table contains pertinent demographic information about the four counties that make up Lake Tahoe.

According to the Lake Tahoe Convention and Visitors Bureau, Lake Tahoe attracts 5 million visitors per year with a majority visiting between Memorial Day and Labor Day. The majority of visitors travel from Nevada, Oregon, and Washington.

Customers

At the Resort and Yacht Club at Muskrat Bluffs, Muskrat Bluffs Apparel will segment its customers into three groups: Resort Guests, Muskrat Bluffs Patrons, and Yacht Club Guests. The following table and chart covers the number of potential customers from the Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs Entertainment Complex.

Resort Guests

Muskrat Bluffs Apparel’s primary target customers are the guests of the Resort at Muskrat Bluffs because the Muskrat Bluffs Apparel Shop will be located in the resort’s lobby.

Muskrat Bluffs Apparel will target Resort at Muskrat Bluffs guests because the room prices are on the high–end of resorts in Lake Tahoe. These high room prices (average is $250/night) are an indicator of customers with high discretionary incomes who are willing and able to purchase high quality clothing at premium prices.

Resort at Muskrat Bluffs guests are not only willing and able to purchase high quality clothing, but they desire it because it is an expression of themselves. Most of the guests will be from Nevada, Washington, and Oregon. The average age range will be between 35 to 65 with a college education.

Muskrat Bluffs Entertainment Complex Patrons

Muskrat Bluffs Apparel will also target Entertainment Complex patrons. Entertainment Complex patrons can be divided into three groups based on what level of the Complex they choose to frequent: Stage Level, Nightclub Level, and Restaurant Level.

Stage Level patrons can be described as baby boomers and empty nesters with high discretionary incomes and a fun–loving attitude. These baby boomers and empty nesters are the primary clientele at the Complex.

Nightclub Level patrons are typically customers between the ages of 21–34 with a fun–loving attitude and a willingness to spoil themselves while enjoying the Entertainment Complex.

Restaurant Level patrons are a combination of the Stage and Nightclub Level patrons. Customers are of all ages and may included families. Once again, the baby boomers and empty nesters are the primary clientele at the Entertainment Complex.

The Muskrat Bluffs Apparel Shop will be located next to the entrance of the Muskrat Bluffs on the Restaurant Level. Customers typically experience dinner waits during the summer season which causes them to explore the entire Muskrat Bluffs facility because many of the patrons are not necessarily guests of the adjacent Resort and Yacht Club at Muskrat Bluffs. This is an optimal time to entice these customers to shop at Muskrat Bluffs. Many of these customers have high discretionary incomes, a willingness to spend money because they are on vacation, and a desire to purchase a high quality piece that reminds them of their experiences at the Muskrat Bluffs.

Yacht Club Guests

Yacht Club at Muskrat Bluffs guests are the third target customer group because these guests will be staying on the docks located in Muskrat Bluffs.

The Yacht Club guests are similar to the Resort at Muskrat Bluffs guests in that they have high discretionary incomes, a willingness to spend money while on vacation, and a desire for high quality clothing. The age range for these customers is 40–65. Many will be baby boomers and empty nesters. These customers spend a large amount of time on their boats, but they will frequently be visiting the Resort at Muskrat Bluffs and the Muskrat Bluffs Entertainment Complex for meals and entertainment.

BUSINESS STRATEGY

As previously stated in the Market and Demographic Analysis, total apparel store sales in Lake Tahoe for 2005 was $159,659,000 and total apparel store sales in all of California for 2005 was $2,898,417,000. Total disposable income in California for 2005 was $114,511,668,000. Lake Tahoe is predominantly a tourist location, which welcomes 5 million visitors per year. Most visitors vacation to Lake Tahoe between Memorial Day and Labor Day.

The apparel industry consists of three core sectors: designers or jobbers, manufacturers, and retailers. Designers or jobbers develop apparel items by purchasing materials, designing concepts, developing prototypes, and hiring manufacturers. Manufacturers mass produce the apparel items based on the samples created by the designers. Retailers market the clothing to the public.

A variety of relationships and arrangements may exist between these three sectors. For example, a designer may produce only clothing concepts and prototypes and then contract manufacturers to mass produce them. The designer might sell its products directly to a number of retailers. On the other hand, a designer might not only produce concepts and prototypes but also operate a retail or direct marketing business and therefore outsource only the manufacturing. Muskrat Bluffs Apparel resembles a combination of designer and retailer. Toggles, Muskrat Bluffs’ private label contractor, is considered a manufacturer. Large companies may include divisions corresponding to all three of these sectors.

Muskrat Bluffs Apparel is sensitive to foreign production’s effect on manufacturing costs. However, at this time it is too risky for the company to begin producing abroad because it is a highly complex environment that offers little recourse if the company is wronged. Muskrat Bluffs Apparel would prefer a manufacturer located in the United States.

However, it is important to note that the apparel industry is becoming increasingly global with many United States companies outsourcing manufacturing to low–cost countries such as China, Mexico, India, Vietnam, Turkey, and Singapore. Globalization will continue as trade barriers continue to be reduced and eliminated. Some analysts predict China to become the largest exporter of clothing to the United States. However, others believe that Central and South American countries will outpace China due to their close proximity to the United States. Fred Abernathy and David Weil wrote in the Washington Post, “Costs remain a driving factor, but the proximity advantage will grow even greater in a post–quota world as retailers raise the bar ever higher on the responsiveness and flexibility required of their suppliers.”

Another major trend in the apparel industry is a recent change in consumer preferences in developed countries such as the United States. In the past, consumers purchased apparel based on the lowest price or a particular brand. Recently, consumers are demanding value and quality instead. Muskrat Bluffs Apparel’s pricing strategy and emphasis on quality reflects this change in customer preferences.

Specific information on the resort wear and casual lifestyle markets is limited. However, resort wear and causal lifestyle clothing has become a year–round fashion style and competes in the menswear and womenswear markets. Thus, it is important to examine the size, growth, and leading revenue sources of the United States menswear and womenswear markets.

Menswear

By 2009, the menswear market is forecasted to reach a value of $112 billion. The compounded annual growth rate is 2.6 percent during the 2004–2009 period. Below are the forecasted values for the United States menswear market from the Business and Company Resource Center database:

In the United States, trousers are the leading revenue source and are followed by shirts. The following chart is a break–down of the United States menswear market:

Womenswear

The womenswear market is forecasted to reach a value of $191.6 billion by 2010 with a compounded annual growth rate of 2.6 percent for the 2005–2010 period. The following table contains the forecasted values for the United States womenswear market:

The dress, skirt, and trouser category comprises the largest revenue generating source followed by the blouse and top category. The following is a break–down of the United States womenswear market:

COMPETITION

The apparel business is a highly competitive industry, which contains a mix of global and regional competitors. Muskrat Bluffs Apparel’s competition can be divided into two main categories: Direct Competitors and Indirect Competitors.

Direct Competitors

ResortWear Originals started in 2000 with the goal to create a brand that celebrates the American experience. ResortWear Originals specializes in resort wear and casual lifestyle clothing for the stylish male who wants his clothing to tell his story. The collections include camp shirts, polo shirts, T–shirts, sweaters, khakis, jeans, jackets, sport coats, dress shirts, belts, and swim suits. The centerpiece of the collections is ResortWear’s signature line of limited edition embroidered shirts.

Some basic ResortWear pricing:

• Signature shirts = $150 to $175
• Camp shirts = $95 to $150
• Polo shirts = $75 to $105
• T–shirts = $60
• Shorts = $80 to $90

ResortWear Originals is currently sold at the BeachCove Resort in Lake Tahoe, where Muskrat Bluffs Apparel is starting. Also, boutiques, online retailers, and large brick–and–mortar retailers such as Nordstrom and Saks Fifth Avenue carry Muskrat Bluffs in the United States and the Caribbean.

Natty Gentleman began in 1996 when a group of college students wanted to express their love for the beach through a line of resort wear. At first, they experienced trouble finding retailers to sell their clothes so they started their own restaurant. The Natty Gentleman’s Cafe served as an outlet to sell directly to customers and as a marketing tool to assist in selling to clothing stores.

Natty Gentleman’s brand is built around a life of relaxation and long weekends. Every decision is approached with the question of “What would a nattily dressed gentleman do?” and the company prides itself on using only the finest materials and having unique fabric designs. Natty Gentleman is the premier name in resort wear.

Some basic Natty Gentleman pricing:

Natty Gentleman also sells a line of accessories including watches, ties, belts, footwear, and cologne as well as a line of furniture. The company’s products are available at boutiques, department stores, and online retailers throughout the United States, Canada, and Dubai. In the Lake Tahoe area, the BeachCove Resort sells Natty Gentleman products.

ResortWear Originals and Natty Gentleman are not the only direct competitors of Muskrat Bluffs. They are simply the most pertinent because they both sell resort wear and casual lifestyle clothing and both have a presence in Lake Tahoe, which is where Muskrat Bluffs Apparel is starting. Other direct competitors include:

• ShipShore Apparel—Located in Maine, ShipShore Apparel specializes in men’s resort wear and categorizes its clothing as Dock–to–Dine Apparel. It is made for going from a day of fishing in New England to enjoying an upscale dinner without having to change. The company has been in operation for almost two years and has only local distribution. The company claims that the hardest part of selling clothing and building a brand is having a highly–trafficked and unique place to begin selling. Muskrat Bluffs Apparel has such a location.
• Coastline Clothes—Located in New Orleans, Coastline Clothes produces casual wear for men, women, and children. The company started in 1995 by selling ties inspired by the French Quarter. Currently, the company offers a full range of clothing and accessories that express the inspiration of the Bayou. Coastline Clothes sells through four company–owned stores located in Louisiana and its website.

Indirect Competitors

Muskrat Bluffs Apparel will compete with a diverse group of companies. The first type of indirect competitors are the more general clothing companies such as Levi Strauss & Co., VF Corporation, Ralph Lauren, and J. Crew to name a few. These industry leaders have grown over the years and are now well–established. They have production and distribution throughout the world and own some of the largest brands in clothing.

Our indirect competitors also include the stores in Lake Tahoe because Lake Tahoe is the site of Muskrat Bluffs Apparel’s first shop. The area is home to a 110–store outlet mall, which includes outlet stores of the above mentioned large general clothing companies. In addition to the outlet mall there are a handful of T–shirt shops that sell low–priced Lake Tahoe souvenir shirts.

Muskrat Bluffs Apparel’s competition comes in many shapes and sizes. It includes direct competitors in the resort wear and casual lifestyle market, indirect competitors such as large global clothing brands, and mom–and–pop souvenir T–shirt shops.

The competitors mentioned in this analysis are by no means an exhaustive list. They simply serve as a glimpse of Muskrat Bluffs’ competitive environment and prove the viability of the market. Researching the competition will be an ongoing process for Muskrat Bluffs Apparel because the company has the opportunity to learn from what other designers are showing and because new competitors may enter at any time. The importance of tracking the competition will grow in the future as Muskrat Bluffs products are made available outside of the Lake Tahoe area.

ORGANIZATION

Strengths

• Location to sell in high–traffic area of a high–end resort destination
• Captured audience from the Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs Entertainment Complex
• Experience in marketing to clientele of the Lake Tahoe area
• Experience in retail
• Recognizable brand in the Lake Tahoe and throughout Nevada, California, Washington, Oregon
• Connections to celebrities from Lake Tahoe area

Risk Factors

• Lack of experience in fashion design and clothing manufacturing
• Little brand recognition outside of the Lake Tahoe area
• Low sales volume in Lake Tahoe outside of summer season
• Numerous competitors ranging from multinational corporations to local start–ups
• Retailers not willing to sell Muskrat Bluffs Apparel
• Changes in fashion and consumer preferences and failure to adapt

Growth Strategy

• Expansion plan of Muskrat Bluffs Entertainment Complex and Resort and Yacht Club at Muskrat Bluffs to five locations in resort destinations throughout the United States and Mexico in the next ten years
• Growing popularity of resort wear and casual lifestyle clothing
• Potential to grow beyond regional resort wear and casual lifestyle company to a national company
• Occasions to place Muskrat Bluffs Apparel in the hands of national touring bands that are brought to the Muskrat Bluffs Entertainment Complex for the “Outdoor Concerts at Muskrat Bluffs”

MARKETING & SALES

Exposure

One of the hardest parts of selling clothing and building a brand is having a highly–trafficked and unique place to begin selling. Muskrat Bluffs Apparel has this problem solved through its location inside the Resort and Yacht Club at Muskrat Bluffs, which is the company’s main competitive edge because it provides an initial selling point with high foot traffic, affluent customers, and events such as concerts that attract celebrities and publicity. We have the opportunity to bring our brand and image to life. Customers can feel what Muskrat Bluffs Apparel expresses through their experiences at the resort. Since this location is in a resort, we can invite boutique owners and buyers to stay at the resort as our guests and use the location as a live sales tool for the purpose of selling to outside retailers. This is similar to the strategy that was employed by ResortWear Originals.

The Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs Entertainment Complex will be expanding throughout the United States and Mexico and Muskrat Bluffs Apparel has the opportunity to be the exclusive resort wear and casual lifestyle clothing in all future locations. This competitive edge provides Muskrat Bluffs with new locations to sell its products and the ability to gain exposure in new markets and find additional retailers to supply.

Muskrat Bluffs Apparel will establish its retail locations in the high–traffic area of the Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs Entertainment Complex, which welcomes around 250,000 customers per year. The marketing strategy will focus on the customers inside this resort because these customers are a captured audience who are on vacation and willing to indulge themselves. Also, it will begin to build awareness of Muskrat Bluffs Apparel outside Lake Tahoe. The goal of the marketing strategy is to build an image of enjoying the good life and to entice customers to visit the Muskrat Bluffs Apparel Shop. The marketing strategy will be accomplished through the following methods:

1. Grand Opening. Muskrat Bluffs Apparel will host a grand opening celebration in conjunction with the opening of the Resort and Yacht Club at Muskrat Bluffs. First adopters, high–profile executives, and sports stars from Nevada and California will be in attendance. The grand opening is an occasion for publicity throughout California and the bordering states. Muskrat Bluffs Apparel will build its image of enjoying the good life by having the opportunity to debut its line and put it in the hands of the influencers of fashion in Lake Tahoe, Nevada, and California.
2. “Outdoor Concerts at Muskrat Bluffs”. Muskrat Bluffs Apparel will benefit from the “Outdoor Concerts at Muskrat Bluffs” held at the Muskrat Bluffs Entertainment Complex, which has hosted such national entertainers as Neil Diamond, Johnny Cash, and Rush. The concerts provide an influx of customers and many explore the complex while enjoying the entertainment. The events help Muskrat Bluffs Apparel build awareness with its target customer groups and from geographic locations outside the Lake Tahoe area. We can express our image of enjoying the good life through associating ourselves with the customers’ concert experiences. We will promote the resort wear and casual lifestyle clothing on stage throughout the concerts and will provide pieces of Muskrat Bluffs Apparel to the entertainers in order to put the clothing in the hands of highly–visible individuals who perform throughout the country. Providing our products to national performers assists us in marketing to resort and Muskrat Bluffs guests as well as to new potential customers outside of Lake Tahoe.
3. Banners and Signs. Muskrat Bluffs Apparel banners and signs will be prominently displayed throughout the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex. The goal of these banners and signs is to build the Muskrat Bluffs Apparel image of enjoying the good life, keep this image and the Muskrat Bluffs name in front of customers, build a connection between Muskrat Bluffs Apparel and the customers’ experiences at the Resort and Yacht Club at Muskrat Bluffs and the Muskrat Bluffs, and direct customers to our retail location. Based on Muskrat Bluffs’ target customer groups, the banners and signs will be tailored to their audience based on where they are located in the complex: Stage Level, Nightclub Level, or Restaurant Level.
4. Menu Inserts. The menu of the Muskrat Bluffs restaurant contains the story of the owner and provides information on other properties that he is developing. Customers are frequently seen reading the story and information during their waits for tables and once they are seated. Muskrat Bluffs Apparel will place an insert in the Muskrat Bluffs menus because this provides exposure to both resort guests and those just visiting the Muskrat Bluffs property. The menu inserts have the same goals as the signs and banners: to build the Muskrat Bluffs Apparel image of enjoying the good life, to keep this image and the Muskrat Bluffs name in front of customers, to build a connection between Muskrat Bluffs Apparel and the customers’ experiences at the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex, and direct customers to our retail location.
5. Retail Location and Experience. Muskrat Bluffs’ retail location will enable it to be viewed by the thousands of visitors to the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex, so it is vital that the store front is eye–catching and is in line with our vision of being an expression of the good life. The customers’ experience inside the Muskrat Bluffs Apparel Shop is our number one priority because this is an opportunity to build our image as well as convert our large captured audience into customers. The store and staff’s actions will express the vision, mission, quality, and uniqueness of Muskrat Bluffs Apparel.
6. Word–of–Mouth. Word–of–mouth marketing is one of the most effective marketing strategies for a company because it is customers sharing their experiences with Muskrat Bluffs Apparel to other customers. The grand opening, the “Outdoor Concerts at Muskrat Bluffs” and the retail location and experience will establish a solid foundation for positive word–of–mouth, which will carry Muskrat Bluffs Apparel’s marketing messages beyond the Lake Tahoe area because guests visit the resort from throughout the United States.
7. Bluffs Magazine. Bluffs Magazine is a publication about enjoying the good life while at Lake Tahoe. It is freely distributed throughout Lake Tahoe and at boat shows throughout the United States. The free distribution serves as another marketing medium to guests of the resort and exposes Muskrat Bluffs Apparel to potential customers outside of Lake Tahoe because guests come from outside the area and the boat shows are located throughout the United States. 30,000 copies are distributed annually and Muskrat Bluffs Apparel will have a variety of ads.

Sales Strategy

Muskrat Bluffs Apparel’s primary sales strategy is selling directly to customers in the Muskrat Bluffs Apparel Shop. Retail sales enable Muskrat Bluffs Apparel to interact with the customers and provide a memorable experience that will excite customers to tell others about the apparel.

The sales associates will be educated in the latest resort wear and casual lifestyle clothing trends and will provide fashion advice in a professional and courteous manner. The customers’ experience is Muskrat Bluffs Apparel’s number one priority because it affects our image, our word–of–mouth marketing, and is an expression of our vision and mission. Commissions for sales associates in Muskrat Bluffs Apparel Shops could lead to pushy salespeople that drive customers away, so the sales associates will not be paid on commission because Muskrat Bluffs’ goal is not to force customers into buying products but to assist customers in their purchases and add to their overall experiences with Muskrat Bluffs Apparel.

Each sale is an opportunity to learn more about our customers, so we will begin to build a database of customers’ home addresses and email addresses. We will keep customers’ information private and will use it to learn where customers live and what the demographics of their hometowns are. Also, we will begin a direct marketing campaign by sending periodic e–newsletters with updates on Muskrat Bluffs Apparel and Lake Tahoe. As the Muskrat Bluffs collection grows we will begin to publish a catalog that will be mailed and e–mailed to customers.

Another aspect of Muskrat Bluffs Apparel’s sales strategy is to sell clothing to special events, such as charitable golf outings and corporate retreats. These events typically provide event–goers with high quality, brand name shirts with the name of the event embroidered on them. Special events are an effective way to sell large quantities of clothing, purge extra inventory, and generate sales in the off season from October to April. At the same time, selling Muskrat Bluffs Apparel to these events provides exposure to new customers who are from outside the Lake Tahoe area. We will personally sell to special events occurring at Lake Tahoe and beyond.

In the third year of operation, Muskrat Bluffs Apparel will begin selling at clothing trade shows. Trade shows are an effective way to present Muskrat Bluffs products to a large number of interested buyers from a wide range of retail operations. Many buyers attend these trade shows in order to discover new products and brands and to stock their stores. Muskrat Bluffs also benefits from the opportunities to build relationships with future retailers, gather sales leads, and to begin selling outside Lake Tahoe. Trade show sales will augment the direct sales from the Lake Tahoe Apparel Shops.

Timeline

The following table and chart display the major milestones for Muskrat Bluffs Apparel:

MANAGEMENT SUMMARY

Muskrat Bluffs Apparel will have one full–time general manager and one full–time assistant manager for each Muskrat Bluffs Apparel Shop. The managers will be responsible for handling the day–to–day operations, working in the Muskrat Bluffs Apparel Shop, and hiring and managing the seasonal help.

Four seasonal employees will be hired for twelve weeks between Memorial Day and Labor Day and will work part–time at a rate of $8 per hour. The seasonal employees will serve as sales associates in the Muskrat Bluffs Apparel Shop to assist with the large influx of customers in the summer season.

The executive management team of Muskrat Bluffs Apparel will include Louis Graham, Cheryl Stegman, and Steven Jones. The team will be responsible for:

• The strategic direction of Muskrat Bluffs Apparel.
• Working with outside fashion consultants to track trends and develop products.
• Managing the finances.
• Marketing.
• Attending trade shows.
• Selling to special events and outside retailers.
• Hiring and managing the general manager and assistant manager.

FINANCIAL ANALYSIS

Muskrat Bluffs Apparel is looking for an investor to secure a $500,000 line of credit for the company. At this time selection is limited to the owner of the Muskrat Bluffs Entertainment Complex.

$250,000 will be used to purchase initial inventory, supplies, and establish a cash balance for initial operating expenses. The remaining $250,000 will be available in the unforeseen event that Muskrat Bluffs Apparel has no sales in Year 1. Based on current financial projections, the entire $250,000 utilized will be paid back by the end of Year 3.

Muskrat Bluffs Apparel will be a privately–held S corporation. Upon securing the line of credit the said investor will be the sole stockholder.

Sales Forecast

Muskrat Bluffs Apparel’s forecasted sales rely primarily on the Resort customers. We forecasted these sales off a 65 percent room occupancy rate. We then forecasted that 25 percent of every room occupied will spend $100 on Muskrat Bluffs Apparel. We feel this is a conservative assumption because the majority of the rooms will be occupied by 1 to 4 persons.

An alternative method for forecasting our sales is to forecast that each customer will spend $100 and then capture 2.8 percent of the 250,000 people who visit the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex annually.

We also foresee that the majority of our apparel will be sold during the summer months. This is because our first retail store will be located in Lake Tahoe which experiences seasonal traffic.

You will also find an appendix to our financials which includes the breakdown of our forecasted sales for each individual item we will be selling.

Muskrat Bluffs Apparel Shop’s sales increase 7 percent each year, consisting of 3 percent inflation and 4 percent due to the effects of marketing and increased awareness.

In Year 3, we will expand from the Resort and Yacht Club at Muskrat Bluffs and the Entertainment Complex and start selling our products at trade shows. We will attend one trade show in Dallas, TX and one in Las Vegas, NV. The cost of reserving a booth at one of these trade shows is about $10,000. The expenses incurred at trade shows will be covered by our advertising and travel budgets. We are forecasting that we will be able to sell 50 percent of our Toad Muskrat Bluffs Apparel Shop sales.

In Year 4, we will continue to sell our products at trade shows and forecast matching our Muskrat Bluffs Apparel Shop sales.

In Year 5, we will be opening a second Muskrat Bluffs Apparel Shop which will double Muskrat Bluffs Apparel Shop sales. We will also continue selling at trade shows and forecast our sales to be one and a half times our Muskrat Bluffs Apparel Shop sales.

Inventory

We have set up our inventory system in a way in which we will make one order per year, unless we are running low on a specific item. The order will be made in late January/early February to ensure it will be ready for the summer. We have included enough extra inventory to ensure our store will be fully stocked through the winter and until we can receive our next year’s order. The year end inventory may seem low because this represents the last day of the year. On the first day of the year you will notice a dramatic increase in inventory and it will continue to decrease until the first of the next year.

Rent Expense

Our rent expense includes all lease hold improvements for Muskrat Bluffs Apparel Shop and the initial cost of setting up a POS system. The store is 1,800 sq. ft. with an additional 300 sq. ft. store room. Additional storage is available if needed at no additional cost.

Miscellaneous Financial Information

• All sales, including credit card sales, are treated as cash sales and are the reason why there are no account receivables. We will use a cash basis except for inventory. At a later date we will switch to an accrual basis.
• Currently income at the end of each year is reinvested back into Muskrat Bluffs Apparel Inc.
• Income is currently assumed to be taxed at the rate of 40 percent.
• Our expenses will increase by 3 percent in Years 2–5 due to inflation and double in Year 5 due to the second store opening.
• Debt Service Coverage Ratio is figured with the following formula: (Revenue + Debt + Interest)/(Debt + Interest)

Line of Credit

• $500,000 revolving line of credit, 9 percent interest only, to be renewed every 12 months.
• $250,000 will be utilized.
• In the 1st Quarter of Year 2, $50,000 will be paid back.
• In the 4th Quarter of Year 2, $100,000 will be paid back.
• In the 3rd Quarter of Year 3, the remaining $100,000 will be paid back.