Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria – Fairly used cloths are imported in Nigeria and arranged in bales. These are commonly called Okirika clothes meaning second hand clothes. The questions that arise in this market are; how much is a bale of used clothes in Nigeria 2017 or 2018. Where are they imported from into Nigeria, okirika in Cotonou, and where to buy fairly used clothes in Lagos, Ibadan, Kaduna, and Abuja.
As a matter of fact, imported Fairly Used Products are called Tokumbo Products, or second hands goods, and others call them Okirika, Gwonjo or OK. Okirika business is actually the in-thing in Nigeria these days. Some of the reasons are that they are imported. People prefer imported materials no matter what. Again, they are available and affordable. I tell you second hand clothes are everywhere no matter the import regulation on it, and notwithstanding this it’s also cheap. Because it’s not capital intensive ( because you can start with any amount even by your house ) it becomes very lucrative with high returns. It’s also durable, with a lot of varieties, fashions and can be moved from market to market.
Comsequently, the capital outlay required for this business, depending on the size of the dealers business – importer, dealer, wholesaler or retailer, could be reasonable. My concern in this business plan are the retailers. They are the ones at the verge of closing their shop at any time due to business failure. I have come to understand that one of the reasons for these failures is the inability to plan the business well.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
Table of Contents
Furthermore, this is part of my social responsibility towards the business community. A trained professional like me should be able to give something like this back to the community. So I pray that as you read this article you will be able to use the principles explained and displayed here to arrange and organise your business very well. Don’t hesitate to send in your comments and questions through the comment platform on this page. If you follow us by clicking on any of our social media handles you will always have an update of these free business principles.
This business plan is therefore, for those of you who trade on second hand clothes. You may be one of those who have some money on hand to do the business, and want a business plan to fit into the amount of capital on hand. Or you are one of those who want to know how much you need to do the business so that you can know how much to look for. I will try my best to address the two of you in this post.
A simple retailer of Okirika clothe do not need an elaborate business plan, but you need to put something down as a guide while doing the business. A few page business plan will be enough for you.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
TO HELP YOURSELF:
Before you start your business plan, I would advise you undertake the following homework.
1. Get a general overview of this business. Determine your market segmentation. There are clothes for Children, Adults, Ladies and these days youth. There are also clothes that are on seasonal demand especially for weather conditions.
2. Evaluate yourself/business by defining your SWOT Analysis. This means you have to define your strength in this business, Weakness, Opportunities and threats to survival.
3. Plan for the two aspects of the business expenses usually involved in any business. These are your capital expenditure (CAPEX) and operating expenditure (OPEX).
4. The product – Determine what the products should be. The combinations of it. Do some survey about the market. Think about the marketing strategies.
5. Do some feasibility/Financial Estimates about, the expected Turnover (revenue) for the period covered by the plan. As a small business, one year business plan could do, but it’s better you envision what the business will be like in two years or three. Do also estimates about the cost of sales, that is, the cost of purchases and their carriages that will gnerate the turnover you have estimated already.
6. With all you have in points 5 above, work out a little breakeven analysis. This to equate your cost with your revenue. Where your cost = revenue is the breakeven point. At any point here where you cost > revenue, the business would not show any good sing to continue in it. But at any time where your cost < revenue or revenue > cost, then you know that the business will be profitable.
7. Do a small Income Statement as an appraisal of the business. A 20% to 30% gross margin is very good, while 10% to 15% net profit margin is also good. With these you can now plan to eliminate wastes and take other measures to improve your turnover and your returns.
8. Do all the assessments and feasibility analysis and write the Executive summary as the last thing. The executive summary is always the summary of the entire estimates.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
THE EXECUTIVE SUMMARY
Furthermore, the Okirika Beauty Wears Enterprises is a business enterprise registered in Nigeria to deal on second hand/fairly used clothes of all sorts. The nature of the business reveals business segments for Children, Adults, Ladies and youth.
Okirika Beauty Wears Enterprises started trading on 8 November 2016.
It has a registered office at Shop No. 2, Naked Lane, Boundary Town Market.
The owner of the business is Mr. & Mrs. Olu, as a family business. This family has been trading in one line of business or the other since 2003.We decided to change to this business after reading several topics on Business Tips, Business Plan and Feasibility studies by www.completefmc.com detailing the risk and reward on this business, and how the business is run and managed.
Our goal is to start in a retail capacity and work hard to grow to a larger retailer from where we intend to grow into a wholesale capacity.
In addition, we are putting up this business plan before starting the business to be able to get an overview of what the business is like, the product, market, marketing strategies, turnovers and the level of profit/returns expected from now till the next three years, when we expect to grow into a larger retailer. Our plan is to grow into wholesale business in the next five years.
We have done a good research on this business which reveals among other things that the capital requirement of three million Naira is okay for this business. OR the business is planned to fit into the three Million Naira cash that we have on hand now.
The business plan shows a turnover of twenty million Naira in the first year, thirty five million Naira in the second year and sixty million Naira in the third year.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
CAPITAL REQUIREMENT
This business is predicated on the sum of three million Naira on hand now. This amount is realised from our savings from the other abandoned businesses, and one million Naira borrowed from my brother in-law.
THE PRODUCT:
The product to deal in is a variety of fairly used clothe for Children, Adults, Ladies and youth. These good are imported but we plan to source our wares from Aba, in Imo state Nigeria where most importers are based.
This is a typical Okirika Market in Nigeria, where second hand clothes are displaced in an open market,
Bales of Okirika in Nigeria. These are wholesalers who sale in bales to retailers.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
This is our drean type of Okirika business where we intend to add value to it before selling.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
MARKETING STRATEGIES:
We are going to use the following strategies in marketing the goods.
- Value addition: laundry before marketing
- Open display in our shop
- Attendance of village and town market.
- Personal deliveries to customers
- Corporate marketing, especially in the banks
- Printing of marketing fliers for publicity
- Contracting www.compltefmc to place advert on the website
- Use of social media to reach all our contact
- Public displays at market exhibitions
- And other
FINANCIAL ESTIMATES: COST OF SALES
|
DESCRIPTION
|
UNIT
PRICE PER BALE N |
YEAR
1 QAUNTITY |
YEAR
2 QUANTITY |
YEAR3
QUANTITY |
|
CLOTHES
– GENERAL |
1,500.00
|
3,000
|
4,400
|
6,000
|
|
CLOTHES:
DESIGNERS |
6,500.00
|
800
|
1,200
|
1,500
|
|
CLOTHES
FOR LADIES |
2,500.00
|
8,000
|
9,200
|
12,000
|
|
CLOTHES
FOR ADULTS |
1,600.00
|
9,000
|
10,600
|
13,000
|
|
CLOTHES
FOR YOUTH |
500
|
1,200
|
1,800
|
2,200
|
|
SEASONAAL
CLOTHES |
180
|
600
|
900
|
1,300
|
|
CARRIAGES
& HANDLING CHARGES |
200
|
200
|
250
|
250
|
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
EXPLANATORY NOTES: ANOTHER HOMEWORK
The above is the breakdown of how you generated the Cost of sales.
- What you should now do to complete the process is to derive the purchases value in Naira. That is simple; multiply the figures in the years’ columns with the unit prices. The total of it will give you the purchases for the particular year.
- Multiply the average carriage cost per bale by the quantity on the years’ column to derive the total carriage for the year.
- Add the purchase figure for the year with the respective carriage cost for the year to get the total cost of sales.
Well done!
- You will do the same for the Turnover indicting the number of items to be sold and at what prices to give the total turnover, in a table as I have done for the cost of sales.
- Another thing you will then do is to estimate your operation expenses. Wages for the staff if you have, electricity bill, water bills, call cards etc and aggregate them too year by year.
- You can now use these three financial estimates to work out your breakeven analysis. Where purchases + Expenses = Turnover is your breakeven point and values respectively. With this you can now, work to increase the turnover to be able to generate profit, that is where Turnover > purchases + Expenses.
- Now you can work out your Income Statement, i.e., Profit or Loss account.
Simplified Business Plan for Fairly Used (Tokunbo/ Okirika) Clothes in Nigeria
FOR FURTHER INFORMATION:
Furthermore, Complete Full Marks Consultants Limited is a firm of chartered accountants, auditors, taxation and management consultants. We carry out accounting, financial and other business related services. No matter your business, we have information about it, if you need our help.
We will incorporate your company and register your business with CAC Nigeria. We will also process your mining licences, and your tax clearances.
Finally, for you to do a better Business Plan, you may need research materials, breakeven analysis, product information, marketing information, other financial analysis, and other business plan assumptions, contact us via [email protected] or +234 8034347
Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
