Section 6

Team 6
Fall 2020

Business Plan
Travella Footwear, LLC: High Heel Manufacturer & Retailer
Sustainable Fashion.

Team Members: Email Addresses

Justin Poch Justin Poch pochjm@dukes.jmu.edu

Nate Decker Nate Decker deckerns@dukes.jmu.edu

Charles Gubler Charles Gubler gublercw@dukes.jmu.edu

Alexis Kelly Alexis Kelly kellyad@dukes.jmu.edu

Tristan Kruse Tristan Kruse krusetl@dukes.jmu.edu

Steven Schonberger Steven Schonberger schonbsk@dukes.jmu.edu

Ethan Scribano Ethan Scribano scribaem@dukes.jmu.edu

Brianna Ayala Brianna Ayala ayalavbr@dukes.jmu.edu

1
 Executive Summary
Travella Footwear, LLC
Team 6
9830-31 S 51st Street, Phoenix, Arizona 85044
Phone: (700)120-0670
E-mail: TravellaFootwear@jmu.edu Web Address: www.travellafootwear.com

Management: Business Description: Travella

Titles: Footwear, LLC is a sustainable
President e-commerce retail high heel
Head of Operations & Development manufacturing business. Retail locations
Factory Manager are set to open at the beginning of year
Head of Finance/Accounting three. We anticipate revenue of $509,184
Head of Marketing by Year two with sales of 3744 units with
an annual growth rate of 20%.
Industry: NAICS 316210 Footwear
Manufacturing
Products/Services: Two product
Number of Employees:five salaried, designs, high heel design 1 will sell for
one full time hourly, four part time hourly $160, high heel design 2 will also sell for
$160.
Amount of Financing Sought:
Equity financing of $1,800,000 (75%)
10 Year 7(a) SBA loan for $600,000 (25%) Competitive Advantage:
Travella’s patent pending “screw in”
Investment Sources: convertible heel technology sets the
60% Founding Investors- $1,440,000 business apart from other competitors. As
25% SBA loan- $600,000 well as, the use of recycled material to
15% Canyon Angels Investors - $360,000 reduce costs and decrease waste.

Use of Funds:Equipment purchases, Markets: Working women in upscale

salaries for employees, Raw materials need urban areas, between the ages of 25-44.
With a preferred income of 64,000 or
Product/service selling price: $160 higher.

Distribution Channels: Travella Footwear LLC, functions as a manufacturer and e-commerce

retailer selling directly to customers in Years one and two. By Year three, Travella will wholesale to
Nordstrom Inc.
Competition: Direct Competitors - Pashion Footwear, LLC. Indirect Competitors - Steven
Madden Ltd, Calvin Klein Inc, Jeffrey Campbell LLC. This market is in its maturity stage and is
expected to grow by 4.3% from 2019 to 2025 (Grand View Research, 2019).

Financial Projections (Unaudited):

2021 2022 2023 2024 2025
Revenue: $408 $509.184 $635.462 $793.056 $989.734
(dollars in thousands)
EBIT ($388.177) ($352.794) ($293.488) ($292.989) ($178.074)

2
Elevator Pitch
According to a study by the American Podiatric Medical Association, high heels are the

leading cause of foot pain in the U.S, with 71% of women who wear high heels reporting pain. The

solution to pain from high heels is usually to take your shoes off, or bring another pair of

comfortable sneakers with you. These are not practical or convenient which is why Travella has

come up with the perfect solution: the convertible heel. The heel of our shoe can be easily screwed

off and replaced with a small heel cap and what was seconds ago a high heel is now a much more

comfortable flat. Our product is great for women who wear high heels often at work, consistently

travel or just enjoy a night out. The convertible heel is a much more convenient solution compared

to the alternatives listed above, and will allow women to take control of their fashion endeavors,

never compromising comfort for style.

Product Description

Our product comes in two styles, the first is a 3-inch block heel and the second is a 4-inch

stiletto heel both at the same price. As we grow as a company, we plan to create more styles and heel

attachments. Our product is made out of three different parts. The sole of the shoe is what is

transforming from a high heel to a flat and is the main component where the customer’s foot will

go. The stelo is an attachment that makes the sole of the shoe hold a high heel shape, when it is

removed the shoe is able to fully flatten. The last component is the heel attachment.

Competitive Advantage

Generally, women’s shoes are known to be stylish but uncomfortable, especially high heels.

Travella has solved that problem by creating a patent pending heel that can easily convert into a flat,

allowing whoever is wearing our heel to never have to compromise. Our heel will not malfunction

unless whoever is wearing the shoe wants to take the heel off. Travella’s message to customers is

innovation, sustainability, and practicality and that separates us from our competitors.

Value Proposition

3
 Travella’s patent pending “screw-in” convertible heel technology sets the business apart from

other competitors, as well as the use of recycled material to reduce costs and decrease waste. In

addition, our low variable costs of about $46 per unit and high contribution margin of $110 per unit

provide us a clear path to profitability by simply increasing our unit sales.

Business Strategy

We plan to stand out from competitors by using a differentiation focus strategy, creating a

convertible heel that is well-made, cost-effective, and functional. We will capitalize on the downsides

of competitors by creating dual purpose heels that offer more than any other heel on the market.

40% of sales will be through wholesaling to Nordstrom and the other 60% of sales will be

direct-to-consumers through online sales. Customers like to buy things that they can physically touch

and try on, so that is the reasoning behind our partnership with Nordstrom (see Exhibit 5:

Positioning/Competitive Analysis for more detail).

Business Location

We will be registering our LLC in Delaware, while starting our business out in Phoenix,

Arizona. There are very few regulations, little to no licensing fees, and a low cost of living, allowing

us to minimize those expenses (Curtis, 2019). Phoenix also ranked 11th on Inc.com’s Surge Cities

List in 2020 (Inc.com, 2020). We plan to rent a warehouse where we will manufacture and ship our

products, as well as hold our office spaces. We are located at 9830-31 S 51st Street, Phoenix, Arizona

85044 in a 6,013 square feet warehouse that contains both our manufacturing facilities and offices

for management positions.

Financial Performance

Since the inception of Travella, we have lost money each year, but are trending in the correct

direction towards profitability. Each year our sales are increasing at a steady rate of about 24.8% year

after year with our revenues in Years 1 and 5 respectively being $408,000 and $989,734. We are

getting closer to zero every year.

4
 Exhibit 1: Organizational Chart (Management)

1
We plan to have a three-person marketing department, with the Head of Marketing and Sales Representative working on the advertising and working closely with
Nordstrom. Our customer service representative will be the front-line of customer service for our website and will help the Head of Marketing as well.
2
Our Head of Finance/Accounting will work closely with the President to keep track of all finances and accounting.
3
We plan on making about seven pairs of shoes per day which will only require four factory workers. The General assembly worker will cut and sew the shoe as well
as attach the heel, insole, and sole to the upper. The lasting worker will work in the lasting department (seen in the dotted box) and the shipping and logistics worker
will work with shipping and logistics. Lastly, the factory manager will take care of the quality check points and failure points as well as jump in wherever the workers
will need help.

In Year 1, Travella Footwear will have a total of eight full time equivalent employees. Our company plans to start
accepting applications for upper management around 29 days before day 0, officially hiring them around day 2 after
starting our business.
Employee Requirements
Around 30 days before we open our bank account, officially starting our business, we will begin putting out and
accepting applications for our top management positions. Because we are new to the retail footwear market, we
hope to find employees with previous experience in the industry. The management positions will have lots of
responsibilities, especially during the early stages of Travella, so we will look to hire individuals that have at least a
bachelor’s degree in their field of expertise. The most important attribute we would like to see in our upper-level
employees is experience. When hiring our top employees we will be looking for candidates that have at least ten
years of prior service in the footwear industry.
Around 83 days after the start of our business, we will begin to accept applications for office employees and
factory staff. We hope to hire a factory manager with previous experience with management in a factory setting, but
a college degree would not be required. Factory staff would need to have at least a high school diploma or
equivalent. We plan on hiring a sales representative with a degree in marketing and plan to fill this with someone
from one of the many surrounding universities in Phoenix. This employee will not only be able to help with sales
but also help the Head of Marketing with whatever they need. The customer service representative will need to have
at least a high school diploma as well.
Leadership
We will rely on our factory manager to lead and direct our factory workers. We want to ensure that our staff are
productive while also excited to work for us, much of this responsibility will fall onto the factory manager. The
factory manager of Travella will be expected to be proficient in leadership skills as well as interpersonal skills. These
skills will be utilized frequently by the factory manager in that they will be communicating regularly with factory
workers and with company executives. Our factory manager will always rely on the president and heads of Travella
for guidance when faced with an issue that cannot readily be solved by the factory manager. The Travella factory
manager will need to relay information from the company executives down to the front line workers and will need
to do so in a manner that is transparent while also pleasing to workers. Our manager will also be required to directly
oversee the operations process in the warehouse to try to lower the risk of any malfunctions.

5
0
Exhibit 2: Employee Costs Chart

1
All salary ranges were determined from the U.S. Bureau of Labor Statistics website which creates an Excel spreadsheet with the salaries needed for each
position of the organization (U.S. Bureau of Labor Statistics, 2020).
2
Our company will pay employees on the lower end of the range because we will be a startup company with not a lot of money to work with in the beginning.
3
FICA is composed of Social Security and Medicare. The Social Security tax rate is 1.45% and the Social Security tax rate is 6.2%, making FICA 7.65%. SUTA
and FUTA are 6%, and 2% of the first $7,000 earned, respectively, and Workers’ Compensation is 2% of wages (ADP, 2020).

We have six full time and four part time employees, making 8 full time equivalent employees. Our company will
offer benefits to full time employees including health, retirement, and paid leave. Health insurance will be taken
through Humana, where employees will pay 40% of the costs and we will pay 60% (eHealth, 2020). The deductible
for this plan is $0, with the copay for doctor’s visits being $45 and the copay for generic drugs being $12.08
(eHealth, 2020). Employees will be offered a SIMPLE IRA retirement plan where they can contribute up to $13,500
per year with Travella contributing 2% of each employee's income as well (Vanguard, 2020), which is reflected in the
employee costs chart above. Full time employees will receive two weeks of paid vacation/sick leave which can be
used at their discretion. In addition, they will receive eight paid holidays throughout the year. These do not affect
salaried employees’ costs but are reflected in the hourly totals. All employees will receive a yearly pay raise of 5% as
a way to motivate them and to encourage employee retention.

6
Exhibit 3: Market Segmentation
Analysis/Target Market Selection
(Marketing)
Industry Analysis
The global footwear market value in
2020 was $365.5 billion and is projected to
grow to $530.3 billion by 2027 with a CAGR
of 5.5% (Houhan et al., 2020). A
consistently growing market is crucial for
any new business. The market is segmented
into different sections including end user
and type. Athletic or non-athletic shoe types
both contribute to the expected growth of
the market (Houhan et al., 2020). Each
segment contributes to the ability of Travella
to be competitive with the dominating
footwear brands.
The non-athletic segment of the
footwear industry is expected to remain a
dominant holder in the future. This includes
sandals, heels, and wedges. The rise in
women wanting more fashionable versions
of these types of shoes is another reason
that the non-athletic segment persistently
holds the top spot in footwear market share
(Houhan et al., 2020). This will ensure that
Travella will be competitive in the industry
despite the already established footwear brands.
The footwear customers will also ensure the success of Travella. A recent surge in income has led people to
spend more on luxury goods, which is beneficial to our current product’s price point (Houhan et al., 2020). The
women’s segment continues to dominate the footwear market share and it is expected to remain this way (Houhan
et al., 2020). As the number of working women increases, the demand for trendy, stylish footwear that can be used
for formal and casual occasions also increases (Houhan et al., 2020). Travella’s convertible heel creates the perfect
trendy shoe that can be worn as a heel for formal occasions and as a flat for casual occasions fulfilling the market's
new need making us even more competitive.
Target Market
Males and females aged 25 to 34 spend approximately $447 on shoes each year while those aged 35 to 44 spend
about $601 each year on shoes (Statista Research Department, 2020). This will contribute to the success of our
business because these two age groups are both major spenders in the footwear market. Since our customers are
collecting annual salaries above $50,000 and are in the age range of 25 to 34, as seen above, on average 93% of our
customers have a buying behavior of buying new shoes for a new season (Alexis, 2020).
Our target market values living an eco-friendly lifestyle. Travella’s ability to appeal to the
environmentally-conscious segment through the use of sustainable materials will open us up to more customers.
We plan on using social media to connect with our target market. Social media allows for quick response times,
and more customer reachability. Social media creates brand recognition quickly and easily (Brady, n.d.). This is
beneficial for small companies like our own, the brand is able to gain a quick following resulting in more sales. A
recent Instagram study called “#nofilter” shows that 87% of users, after seeing product information, take action in
forms of liking, commenting, messaging the brand or sharing with others (WARC Best Practice, 2020).
Social media also lets brands respond quickly to customers. Through social listening, our brand will be able to
understand what is important to our customers and identify trends our target market is following (Dukart, n.d.).
Travella will be able to take advantage of opportunities that present themselves through the trends that our
customers are following. It also creates a customer service opportunity as customers now expect companies to
handle their issues through social media (Dukart, n.d.). The ability to respond back to customers over social media
keeps followers happy and builds a relationship with customers.
7
Exhibit 4: Market Quantification (Marketing)
Forecasting
Because Pashion Footwear is the only
other company on the market that creates a
convertible heel, we assumed that they would
be the closest proxy firm for our company.
We hope to take what Pashion is doing and
improve upon it (see Exhibit 5:
Positioning/Competitive Analysis). Similarly
to Pashion Footwear, we plan to conduct a
direct-to-consumer business model with sales online, but we also plan to wholesale to Nordstrom, a luxury
department store chain that caters to the type of consumer that we are targeting. Customers tend to buy shoes that
they can shop for in person because they can see, feel, and try them on before buying (Skrovan, 2017). We found
that Pashion sold 3000 pairs of shoes in their first year of business, with 15% of customers returning to buy a
second pair (Pashion Footwear, 2020). Pashion is a private company, so we were not able to find any financials on
them. We turned to the next best option, Steve Madden, another shoe company with a similar target market and
price as our company. We found that they have about an 80/20 split between their wholesale revenue and retail
revenue, respectively. We assumed that ours would be closer to a 60/40 split due to the fact that we will only have
one retailer and we won’t have as long of a relationship with them as a company like Steve Madden would. This
60/40 split was accounted for in our annual revenue.
In order to forecast our unit sales per year, we first took the
population of the segments we chose to target and summed them all
up. In addition, we accounted for population growth of 4% every
year. We projected our Year 1 unit sales to be 3000, which is what
Pashion Footwear sold in their year one of sales. We assumed that
we could at least match their unit sales due to the fact that our
product will be available in both retail and online. From there, we
assumed a growth rate in our market share of 20% every year. We
looked at our proxy firm Pashion, who had a growth rate of 50%
and reduced it by over half due to their heightened media exposure
and publicity. It left us with a conservative estimate of 20% as our
growth rate. We decided on 1 for our annual purchase amount. As
of this year Pashion Footwear recorded that 15% of customers
made a second or third purchase of their heels (Pashion Footwear,
2020). We arrived at the decision of 1 annual purchase amount by analyzing the data
collected by Pashion, and by predicting how we will realistically compare to their sales. We
expect growth as our product becomes more known and gains more traction in our retailer,
Nordstrom, as well as online.
In order to find sales by quarter, we used the 2019 average monthly sales in the footwear market and applied that
to our projected yearly sales (Statista Research Department, 2020). As seen above, we adjusted for having no sales in
the first quarter. We plan to have a steady stream of sales year-round starting in Year 2.
Breakeven Analysis

Note: We assume this BEP for units is higher then what would actually be needed to
break even. This is assumed as for our product 60% of sales would come from retail and
40% would come from wholesale and those weights can’t be accurately used in the BEP in
units so the BEP is overstated by a small margin. Our average cost was $130 which was
found from average our wholesale price ($100) and our retail price ($160) which does not
account for the different percent of sales as stated above so we assume the numbers are
overstated by a small margin.

8
Exhibit 5: Positioning/Competitive Analysis (Marketing)

Positioning Strategy
Travella Footwear has a single direct competitor, Pashion Footwear LLC. This company creates another type of
heel that converts to a flat. Other indirect competitors include Steve Madden Ltd, Calvin Klein Inc, Jeffrey Campbell
LLC. These companies sell footwear in the price range and designs that our product is comparable to. In addition to
selling online, we will be selling in Nordstrom. We chose Nordstrom because they have been attracting more and more
millennials (Bhogaraju, n.d.). Consequently, we will be competing with all other high heel brands that are also sold in
the department stores.

We plan to position ourselves based on comfort, quality, and price, as seen above. We found that Travella could
fill the need that Steve Madden and Pashion Footwear are currently not fulfilling. We plan on delivering more comfort
and quality than both Steve Madden and Pashion Footwear while keeping a reasonable price in between both brands’
average heel price.
A difference between Pashion Footwear and Travella is the design of our convertible
heel technology. Pashion uses a lock-in design for their convertible heel. When tested by
team members, the lock-in design was prone to unlocking on uneven surfaces. Our design
will exhibit a “screw-in'' heel. This design will ensure that malfunctions will not occur
during use and the heel will stay in place. Another problem found when testing Pashion’s
product is the inability of the heel to completely flatten, as shown in the picture to the
right. Pashion's heel is advertised to have a flexible sole that will completely flatten once
the stelo of the shoe is taken out (Pavone, n.d.). However, we found that the shoe keeps its
high heel shape even when the stelo and heel are detached making the shoe uncomfortable
as a flat. Our design will feature a more flexible sole that once the stelo is taken out, the shoe
will flatten as it is intended to. Lastly, Pashion Footwear produces their products in China. The
majority of American consumers prefer products produced in America which is why we plan on manufacturing all
products in-house (Rubin, 2015).
Compared to our indirect competitors, our product is differentiated because of our convertible heel technology
as well. Companies like Steve Madden, Calvin Klein, and Jeffrey Campbell sell strictly high heels that are not
customizable. The ability to change the heel on our company’s shoe allows a customer to have control over
customization. We also encourage customers to buy different heel attachments, so they are able to have fun with
fashion in a sustainable way instead of having to buy a whole new shoe when fashion trends change. We will keep a
competitive edge over our competition by always innovating. We will innovate our design of the convertible heel, i.e.
the stelo and the screw in heel, ensuring that the customer will have an enjoyable experience, as well as innovating the
style of the shoes. Staying ahead of the trends will allow our brand to be able to create a sustainable competitive
advantage over our competitors.
Positioning Statement
Travella Footwear allows customers to never have to compromise comfort for style. We are dedicated to creating
comfortable and trendy products for women on the go, whether that be for traveling, work, or a girl’s night out. Our
unique convertible screw-in heel technology provides an outlet for women to be creative, all while keeping up with the
trends and promoting an eco-friendly lifestyle.

9
Exhibit 6: Marketing Mix (Marketing)
Product Strategy
Travella Footwear will be selling directly to customers online via our website. We have decided to allocate 5% of
yearly sales revenue directly to the marketing budget each year. Our main goal for marketing and promotions is to reach
our customers while they are shopping online with internet advertisements. We plan to use social media platforms,
internet advertisements, and celebrity/influencer giveaways as a way to increase brand awareness. Travella also will
maintain a strong presence on social media predominantly through Instagram and Facebook as a tool for our customers
and potential new customers to interact and share input on our product. In an effort to stimulate sales, we plan on
having a 10% rebate if the customer sends in a form within 20 days of purchase. This aligns with the consumers that
also purchase our products, creating a beneficial relationship for both parties. Our marketing and promotion strategy is
aimed to increase brand recognition among our target market. We will ensure that customers know the convenience of
our product, as well as the creative freedom they will have when they purchase.
Travella's brand personality is exciting. Our target market values unique and trendy products and lives in fast
moving urban areas. To keep up with the ever changing young group of people we plan to appeal to, our brand will
produce creative, unique products building the brand personality our company strives for. At Travella, we believe our
products should express our brand’s personality throughout the entire customer experience.
Pricing
We have chosen to sell our product at a price point between that of our
competitors Pashion Footwear and Steve Madden. Pashion Footwear comes in
at a very high price point of $180 while Steve Madden has an average price of
$100. We want to be compared to brands like Steve Madden and the more
affordable trendy brands that appeal to the same customers as our target
market, therefore, our price point is $160 per unit. Since our customers are still
receiving two shoes for the price of one, we chose to price our product $60
higher than the average Steve Madden shoe. Lastly, we have chosen a channel
price of $100.
Travella Footwear will be selling exclusively to Nordstrom. The CEO
Erik Nordstrom, states that Nordstrom wants to be the retailer for “exclusive
brands'' and be the only partner for these brands (Loeb, 2020). In order for
Nordstrom to keep Travella an exclusive commodity the trade off of a higher channel price is required. These price
points allow our firm to stay competitive in the market while maintaining a profitable contribution margin. We plan on
keeping our prices at a constant $160 throughout all five years.
Distribution Strategies
Travella will wholesale our product to Nordstrom as well as sell directly to consumers through our website. Travella
Footwear will use FOB shipping point to transport our products to Nordstrom. For our online services, we have chosen
to use Shopify, an e-commerce platform, to handle the website, technical support, and shipping logistics.
Promotional Strategies
Travella’s key message to customers is innovation, sustainability, and practicality. This will be embodied in every
advertisement created by Travella as it exhibits the important factors our product delivers. We have an innovative design
and provide sustainable fashion through our convertible heel’s eco-friendly durability and convenience.
Travella plans to use social media engines like Instagram and Facebook as primary networks to advertise our products.
We have chosen Instagram because the age group of 25 to 34 make up the largest group of users and 33.2% of all users
(Clement, 2020). As for Facebook, the average age of users is 40.5 years old (Phillips, n.d.). These two platforms provide
affordable and convenient promotion opportunities. They offer special features for promoting posts, creating stories
and much more. As of 2020, our customers between the ages of 25 to 44 are the largest
groups of digital buyers (Clement, 2020). This is the main reason we plan
to have 60% of our marketing budget spent on internet ads every year.
We will also have seasonal sales promotions in an effort to gain a spike in
heels sales in short periods of time. Sales promotions will be financed by
our sales revenue and will account for 20% of the total marketing budget
each year. We also plan on doing yearly giveaways of free pairs of our
signature high heel to celebrities and social media influencers. We will
finance this through our public relations budget, which makes up 20% of
our marketing budget. At Travella, we believe advertising is essential to our company’s growth and long-term success.

10
 Exhibit 7: Flow Chart (Operations)

Quality Step What is measured? How often? How will you ensure quality?
Q1 The quality of raw materials Every shipment before the raw By having trained employees checking the quality of the raw
received from the supplier. materials are used in the shoe materials and sending back the unusable pieces.
making process.
Q2 Ensure that leather upper pieces Every 15-30 minutes We will have a trained employee check the machine to make
are correctly stitched and the sure it is working properly (stitching correctly, calibrated, and
machine is working properly. equipment is sharp) as well as checking the leather uppers that
the machine is producing.
Q3 Ensure that the pieces all fit Every 20 units Trained employees will be checking if the pieces all fit
together and the heel together (heel cap, detachable heel, and stelo) and they will
successfully detaches and make sure that the product successfully goes from a heel to a
reattaches to the flat. flat.

Failure Point Brief description How will you prevent this How will you recover if this failure occurs?
failure?
F1 The leather cutting machine fails Ensure machines are in Have possible replacement parts or machines in house so that
and stops operating causing the working order before the it can be repaired, have an alternative method of cutting
entire process to stop. processes are started by doing a available
check.
Operational Advantages
We hope to stand out from other competitors with two major aspects of our operations. We believe our heel’s
sustainability and innovation is what gives Travella an edge over competing footwear retailers. Our heel will be
constructed with a mix of recycled and non recycled materials in an attempt to attract eco-friendly customers. Along
with these sustainable materials we will also purchase a contact adhesive known as Aquilim 315. Aquilim 315 is
made of natural elements, is solvent-free, and is available at a reasonable rate. We plan on purchasing our shipping
boxes through EcoEnclose, a company that supplies boxes that are made of 100% recycled materials. The large
portion of recycled materials used in the construction of our heel displays our commitment to creating an
eco-friendly high heel. Consumers with a passion for eco-friendly products will be more likely to purchase our
uniquely constructed high heel, rather than a competitors heel that possesses none of the same elements of
sustainability.
Perhaps the biggest advantage that we possess is the innovation of our high heel. Our product will allow the
everyday heel wearer to slip from high heel to a flat in just seconds. Our convertible heel will be facing direct
competition from Pashion Footwear. We suspect our convertible heel to outperform Pashion’s in the long run due
to our original heel design. Our design includes a screw in heel technology that will greatly reduce the likelihood of
the heel slipping out while in use. We plan on patenting our convertible heel technology, there are some similar
convertible heel patents already existing but we believe that our product is unique enough for our patent to be
approved. At Travella we believe that the combination of our eco-friendly design and our screw in technology will
solidify our company as a quality high heel company.
11
 Exhibit 8: Quality (Operations)

Indicate the Dimensions Why is this dimension important, given your industry & target Identify the Quality
of Quality on which you market? Step(s) on the Process
will focus. Flowchart / Service
Blueprint to which this
corresponds.
Aesthetics When it comes to footwear, style is obviously an important factor of the Q1, Q3
product. The way that a shoe looks is usually the first factor people take into
consideration when deciding whether to purchase that pair of shoes or not.
Special Features We are producing a heel that converts into a flat, so we want to make sure Q3
that it works for every pair because it’s the main special feature of our
product.
Consistency When consumers are purchasing footwear, consumers don't expect the Q3, Q2
quality of the product to change from one pair to another.
Durability With footwear, you want a product that performs in the long run without Q1, Q3
having to worry about buying a new pair every month or so.

Use the space below to describe any additional Proactive Quality Assurance Plans that are not connected to a specific activity on
your Process Flowchart / Service Blueprint.
Order from reliable suppliers, have backup suppliers in case of emergency, keep reliable data on production qualities and quantities, hire and
train qualified employees and hire skilled managers.
Describe any reactive quality assurance plans. Include a recovery plan should a customer receive poor quality goods and/or
services.
If the product is defective or not suitable to the customer, they may return or exchange the product after 30 days free of charge if there are no
signs of visible wear. If the product is in fact defective, we will find out what is wrong with it and determine if the defect came from our
production process.

If you will utilize a quality/process improvement methodology, indicate which:

☐ NA ☐ TQM ☑ Six Sigma ☐ ISO ☑ Benchmarking
☐ Other (specify what):

Using benchmarking and Six Sigma business processes will help our business improve the quality of the output from our manufacturing
process by identifying and removing the causes of defects and maximizing profitability. By benchmarking Pashion Footwear we will be able to
see the standard quality set forth by our industry's main competitor. Benchmarking Pashion will allow us to see what our competitor is doing
right and where we can capitalize on their disadvantages. We will also implement the six sigma methodology in an effort to minimize the
amount of product defects and increase productivity and profitability. We plan on implementing Six Sigma in Travella by providing all of our
employees with high quality training. The training of employees will first begin with our top executives, this will allow for our executives to get
acquainted with six sigma and in turn lead our company in the implementation of Six Sigma. Travella executives will then train our factory
manager. After receiving training, our factory manager is expected to lead with a commitment to Six Sigma policy over our general laborers.
These two quality improvement plans will ensure our product retains a high level of quality that exceeds customer expectations.

12
Exhibit 9A: Inventory Suppliers & Distribution (Operations)

13
Exhibit 10 - Capacity

14
Exhibit 11: Income Statement (Finance)

15
Exhibit 12: Balance Sheet (Finance)

16
Exhibit 13: Cash Flow Statement (Finance)

17
Exhibit 14: Financial Statement Notes (Finance)

Income Statement-

Sales Revenue¹ - Our revenues in 2021 are based on sales of 1800 units at a wholesale price
of $100 per unit and 1200 units at a retail selling price of $160 per unit. Projected unit sales
will increase year to year by an average rate of 24.8% per year from 2021 to 2025.

COGS ² - Cost of goods sold includes all raw materials,production expenses,and labor costs.
Costs per unit in 2021 are $46.40 and decrease to $46.14 in 2022, $45.89 in 2023, $45.67 in
2024 and $45.46 in 2025.

Rent Expense ³ - Rent expense includes the cost of a 12 month lease for our
warehouse/office space where the company will be located. This expense will stay consistent
at a rate of $5,111.05 per month or $61,333 per year.

Interest Expense⁴ - Interest expense includes 2.75% interest on a $600,000 SBA loan
($16,500 year 1) that will be repaid over 10 years at a constant rate of $60,000 every year.

Balance Sheet

¹Fixed (Long-Term) Assets - Fixed long term assets include a toe lasting machine, side/heel
lasting machine, heat setter machine, roughing machine and leather cutting equipment.

²Accounts Receivable- Our company expects 10% sales made on credit throughout the fiscal
period to be uncollected at the end of each fiscal year. FIFO inventory method is used in inventory
cost assumptions and as a majority of our sales being direct to consumers, a large portion of sales
will be collected in cash and not Accounts receivable.

³Long Term Debt- Long term debt is of the form of a 10 year, $600,000 7A Small Business Loan
with a 2.75% interest rate. (Small Business Administration)

⁴Accrued Salaries, Wages, Payroll Taxes and Benefits- Accrued salary/benefits liability
assumes that 2 weeks of pay/benefits will not be recorded in each fiscal year.

18
Exhibit 15: Financial Ratios (Finance)

19
Exhibit 16: Financial Analysis (Finance)

Our fixed asset turnover increases by quite a large amount every year.. We operate under our
production capacity meaning we have no need to purchase more assets, while our market share
increases year by year causing a yearly increase in sales. These fixed assets remaining constant while
our sales increase every year is what is responsible for this.
Our net profit margin steadily increases from year to year. Our expenses outweigh our
revenues in Year 1, which is why it’s so important we consistently raise our sales number each year
because our total costs stay pretty consistent (bar COGS).
Our debt to equity ratio starts at about 50% the industry average, then by the fifth-year
climbs well above that average. This is because our only debt is a SBA loan that is due after 10 years,
and is being paid off on a yearly basis. However our equity decreases each year due to our yearly net
loss.
Our return on assets stays almost constant over the first five years. This is because from year
to year our three biggest assets: cash, accounts receivable, and inventory, all change in relation to net
income. We lose cash from our net loss and our inventory and AR increases each year with the
increase in sales.
Our quick and current ratios are both decreasing at a decreasing rate. They both start above
the industry average due to our large cash amount from our initial investment equity. They both
decrease due to our cash amount decreasing each year at a faster rate than our liabilities are
decreasing due to the loss in net income each year.

From the graph it can be deduced that equity multiplier and ROE have an inverse
relationship in our company. This is due to our equity shrinking from year to year due to our net
loss. The fact that we are soon going to make a profit makes us believe that in the next 5 years this
trend would be reversed due to a rising net income and equity. At the very least, our return on equity
will be above 0.

20
 Bibliography

ADP. (2020, 1 1). Arizona Fast Wage and Tax Facts. ADP.

https://www.adp.com/resources/tools/tax-guides-and-forms/state-and-local-tax-guides/sta

te-tax-guide.aspx?state=AZ

Alexis, D. (2020, 05). Men's & Women's Footwear: Incl Impact of COVID-19 - US - May 2020. Mintel.

Retrieved 10 13, 2020, from

https://reports-mintel-com.eu1.proxy.openathens.net/display/1023053/

Bhogaraju, S. (n.d.). Nordstrom’s target customers. Market Realist. Retrieved 10 12, 2020, from

https://marketrealist.com/2015/02/nordstroms-target-customers/

Catalyst. (2020, 08 11). Women in Management: Quick Take. Catalyst. Retrieved 10 12, 2020, from

https://www.catalyst.org/research/women-in-management/#:~:text=In%20the%20United

%20States%2C%20women,%25)%20of%20managers%20in%202019.&text=In%202019%2

C%20white%20women%20held,%25)%20of%20all%20management%20positions.

Clement, J. (2020, 09 2). Distribution of Instagramusers in the United States as of August 2020, by age group.

statista. Retrieved 10 14, 2020, from

https://www.statista.com/statistics/398166/us-instagram-user-age-distribution/#:~:text=In

stagram%20user%20share%20in%20the%20United%20States%202020%2C%20by%20age

%20group&textAs%20of%20August%202020%2C%2033.2,the%20United%20States%20w

ere%20female.

Clement, J. (2020, 10 06). Distribution of digitalbuyers in the United States as of February 2020, by age group.

Statista. Retrieved 10 14, 2020, from

https://www.statista.com/statistics/469184/us-digital-buyer-share-age-group/

21
Curbell Plastics. (n.d.). Curbell Plastics Western New York. Retrieved 11 1, 2020, from

https://www.curbellplastics.com/Discover-Curbell/Locations-Nationwide/Western-New-Y

ork

Curtis, C. (2019, 12 12). Phoenix ranks 9th in nation for best city to start a business. AZ Central.

https://www.azcentral.com/story/news/local/phoenix/2019/12/12/phoenix-ranks-9th-nat

ion-best-city-start-business/4410395002/

EcoEnclose. (n.d.). CORRUGATED BOXES. Retrieved 11 1, 2020, from

https://www.ecoenclose.com/shop/boxes/corrugated-boxes/

EcoEnclose. (n.d.). Tab Locking Box - 23ECT B - 6" x 9" x 2" (Set Size, Die Cut). Retrieved 11 1, 2020,

from https://www.ecoenclose.com/tab-locking-box-23ect-b-6-x-9-x-2-set-size-die-cut/

eHealth. (2020, 10 13). Health Insurance Plans. eHealth.

https://www.ehealthinsurance.com/smb-client/smbmedicalquote.html?groupId=5751476

Fontanella, C. (2020, 1 16). 14 Customer Service Training Programs & Courses You Need to Take. Hubspot.

https://blog.hubspot.com/service/customer-service-training-programs

Grand View Research. (2019, 08). Footwear Market Size, Share & Trends Analysis Report By Type

(Athletic, Non Athletic), By End User (Men, Women, Children), By Region (North America, MEA,

APAC, Europe, Central & South America), And Segment Forecasts, 2019 - 2025. Grand View

Research. Retrieved 10 12, 2020, from

https://www.grandviewresearch.com/industry-analysis/footwear-market

Home Depot. (n.d.). Retrieved 11 1, 2020, from

https://www.homedepot.com/?mtc=SEM-B-F_Brand-G-Multi-Multi-Multi-NA-NA-ETA-

NA-NA-THD_BT1&cm_mmc=SEM-B-F_Brand-G-Multi-Multi-Multi-NA-NA-ETA-NA-

NA-THD_BT1-71700000002449093-58700000047538642-43700003817116349&ds_rl=504

1&gclid=Cj0KCQiA7qP9BRCLARIsABDaZzgG-LM

Houhan, N., Vig, H., & Desmukh, R. (2020, 04). Footwear Market by Type (Athletic and Nonathletic),

Material (Leather and Non-leather), End User(Men, Women, and Children), and Distribution Channel
22
 (Hypermarket/Supermarket, Specialty Stores, Brand Outlets, Online Sales Channel, and Others): Global

Opport. Allied Market Research.

https://www.alliedmarketresearch.com/footwear-market/purchase-options

Inc.com. (2020). These Are the 50 Best Places in America for Starting a Business. Inc.com.

https://www.inc.com/surge-cities/best-places-start-business.html

Loeb, W. (2020, 01 23). Nordstrom CEO On How The Department Store Keeps Up With Its Customers.

Forbes. Retrieved 10 14, 2020, from

https://www.forbes.com/sites/walterloeb/2020/01/23/eric-nordstrom-speaks-about-his-cu

stomers/#30676cf6f928

NAT Leathers. (n.d.). Black Garment weight Stretch Faux Vegan {Peta Approved} leather Pleather by the yard

36 inches 52 wide Synthetic 1 yard- 5 yards thin 0.7 mm. NAT Leathers. Retrieved 11 1, 2020, from

https://www.leatherandfabric.com/listing/734355219/black-garment-weight-stretch-faux-ve

gan

Ortholite. (n.d.). Eco Technology Formulated with 12% Bio-Oil. Retrieved 11 1, 2020, from

https://www.ortholite.com/technology/eco/

Pashion Footwear. (2020, 6 24). Pashion Footwear Celebrates First Launch Anniversary with Convertible

Heels. PR Newswire.

https://www.prnewswire.com/news-releases/pashion-footwear-celebrates-first-launch-anniv

ersary-with-convertible-heels-301083045.html

Pavone, H. (n.d.). Learn how Pashions work. Pashion. Retrieved 10 13, 2020, from

https://pashionfootwear.com/pages/how-pashions-work

Phillips, J. L. (n.d.). What Is the Breakdown of FacebookUsers by Age? Chron. Retrieved 10 14, 2020, from

https://smallbusiness.chron.com/breakdown-facebook-users-age-63280.html#:~:text=In%

20the%20U.S.%2C%20the%20average,percent%20are%2035%20or%20older.

Rocky Mountain Leather Supply. (n.d.). Renia - Aquilim 315 - Water Based Glue 16 Reviews. Retrieved

11 1, 2020, from
23
 https://www.rmleathersupply.com/collections/supplies/products/renia-aquilim-315-water-

based-glue?variant=29862688555117

Rubin, G. (2015, 7 5). Consumers Prefer ‘Made in America’ Label Over Local or Foreign-Made. Morning

Consult.

https://morningconsult.com/2015/07/05/consumers-prefer-made-in-america-label-over-lo

cal-or-foreign-made/

Segment Details. (n.d.). Claritas. Retrieved 10 13, 2020, from

https://claritas360.claritas.com/mybestsegments#segDetails

Skroven, S. (2017, 04). Why Many Shoppers Go to Stores Before Buying Online. RetailDive. Retrieved 10 15,

2020, from

https://www.retaildive.com/news/why-many-shoppers-go-to-stores-before-buying-online/4

41112/

Statista Research Department. (2020, 9 10). Average annual U.S. consumer spend on footwear in 2019, by

age. statista. Retrieved 10 13, 2020, from

https://www.statista.com/statistics/937094/average-annual-consumer-expenditure-on-foot

wear-by-age-us/

Statista Research Department. (2020, 9 17). Footwear store monthly sales U.S. from 2017 to 2020. Statista.

https://www.statista.com/statistics/877015/us-retail-shoe-store-sales-on-a-monthly-basis/

Superior Threads. (n.d.). Bonded Nylon #001 Black (Size #46). Retrieved 11 1, 2020, from

https://www.superiorthreads.com/bonded-nylon-001-black-size-46/p/501-46-001

U.S. Bureau of Labor Statistics. (2020, 10 13). Occupational Employee Statistics. BLS.

https://data.bls.gov/oes/#/home

U.S. Department of the Treasury. (2020, October 15). Daily Treasury Yield Curve Rates. U.S Treasury.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.a

spx?data=yield

24
Vanguard. (2020). SIMPLE IRA. Vanguard. Retrieved 10 13, 2020, from

https://investor.vanguard.com/small-business-retirement-plans/simple-ira

Warehouse Spaces. (n.d.). 9830-31 S 51st St, Phoenix, Arizona 85044. Warehouse Spaces. Retrieved 10

12, 2020, from

https://warehousespaces.com/warehouse-for-rent/United-States/AR/Phoenix/12620

25
 Meet the Team - Section 6, Team 6

My name is Brianna Ayala and I am from Northern Virginia. I’m majoring

in Computer Information Systems and minoring in Business Spanish. I’m a
member of the Beta Alpha Psi Honorary Fraternity, a member of the Phi
Sigma Sigma Fraternity, and a delegate of the Junior Panhellenic Council. I
enjoy going on outdoor runs and working out in my free time.

My name is Nate Decker and I am from Culpeper, VA. I am majoring in

Finance and minoring in Mathematics. I’m a member of the Financial
Management Association. In my free time I love to play intramurals, which
involve flag football, co-rec softball, and basketball, and I also love to head
over to UREC to go weight lift.

My name is Alexis Kelly and I am from Bucks County, Pennsylvania. I am

a Marketing Major and a member of the Zeta Tau Alpha Fraternity where I
hold positions and actively participate in community service for our
philanthropy Breast Cancer Education and Awareness. I enjoy working out,
watching movies and seeing friends when not doing school work.

My name is Justin Poch and I am from Virginia Beach, VA. I am majoring

in Finance. I am a member of the Kappa Delta Rho fraternity where I hold
an executive position. In my free time I enjoy going to weight lift at
Urec, playing basketball and learning about stocks.

My name is Steven Schonberger and I am from Fairfax, Virginia. I am

majoring in management. I am a member of the Phi Gamma Delta
fraternity, and hold an executive position serving as recording secretary. In
my free time I like to play soccer, watch sports, and hang out with friends.

My name is Charles Gubler and I am from Luray Virginia. I am currently

majoring in management but plan on switching to finance. I am a member
of Delta Tau Delta fraternity and hold an exec position. In my spare time I
enjoy playing sports, hiking, and spending time with friends.

26
My name is Ethan Scribano and I am a marketing major. I am an active
member of FAM at JMU. I enjoy reading, running, and doing crafts when
I’m not working or at school.

My name is Tristan Kruse and I’m from Lancaster, Pennsylvania. I am an

economics major with a concentration in environmental and natural
resource economics. I am on the executive board of GIVE Volunteers,
where I organize local volunteering events. I enjoy the outdoors, cooking,
and exercising.

27
28