1.0 Executive Summary

ExpectingU.com is a new online business providing fun, comfortable and easily accessible collegiate maternity wear.

The owner, Mary Lenton, has over 10 years of experience in business management, channel marketing, and high-level sales. She will fund the business herself with personal capital as she believes strongly in the product idea. In fact, she searched for this product herself while pregnant and could not find collegiate maternity wear to purchase, thus ExpectingU.com was founded. Market research among over 500 expecting mothers shows that there is a demand for such products. ExpectingU.com has ad space commitments from several online expecting sites, and dozens of leads for direct sales and public relations.

Sales projections for ExpectingU.com are estimated to begin at over $1 million for the first year, with a respectable first year net profit.

Mary feels strongly that, by creating awareness for the product, many women will purchase the product for their own use, as will friends and family members of expecting women.

Highlights

1.1 Objectives

• Create a unique maternity wear product and offer them in 75% of Division 1 football school's collegiate logos by the end of year one.
• Generate retail sales of over $1,000,000 in year one.
• Maintain a gross margin of over 65%.

1.2 Mission

To offer fun, comfortable and readily available maternity collegiate wear for women who want to show their support for their favorite college team, even while pregnant.

1.3 Keys to Success

1. ExpectingU.com will offer a unique line of maternity shirts that will carry the logo and/or mascot of NCAA Division I football teams. These products are currently in demand today but do not exist in mainstream commerce.
2. ExpectingU.com will satisfy the demand of maternity collegiate shirts by maintaining inventory levels that will allow for immediate shipping to customers.
3. ExpectingU.com will execute a targeted marketing campaign to generate awareness of the website and products.

2.0 Company Summary

ExpectingU.com is a new Internet business based in Eugene, OR that will sell a line of collegiate maternity wear for expecting mothers. In the future, the company will also explore the professional sports market as a new channel for growth.

The owner will run the business from her home office. Inventory will be stored in a 1,200 sq.ft designated storage area within the basement.

2.1 Company Ownership

ExpectingU.com is a privately held S-Corporation owned in total by its founder, Mary Lenton.

2.2 Start-up Summary

Start-up costs for ExpectingU.com include legal costs, computer supplies, new product marketing, website design and NCAA licensing* for the shirt designs. Start-up assets are mostly dedicated to start-up inventory. Please see the following chart for a detailed look at all start-up costs.

*liCENSING: Based on research, NCAA licensing is required to use official college mascots and names. This is not cost prohibitive; however, the regulating board for licensing has strict requirements regarding who can and cannot be granted permission to use collegiate likenesses. As of this date, our proposal is under submission and we are awaiting a final decision.

Future growth into other categories will be dependant upon similar licensing with organizations such as the NBA and NFL.

Start-up
Requirements
Start-up Expenses
Legal	$1,000
Computer	$250
Marketing	$15,000
Web Design	$2,500
Licensing	$5,000
Total Start-up Expenses	$23,750
Start-up Assets
Cash Required	$5,000
Start-up Inventory	$35,000
Other Current Assets	$0
Long-term Assets	$0
Total Assets	$40,000
Total Requirements	$63,750

Start-up

3.0 Products

ExpectingU. com will provide fun and comfortable collegiate maternity wear shirts via our website. Manufacturing will be done by a third party, and fulfillment will be handled in-house initially.

4.0 Market Analysis Summary

The primary target market is the 3.5 million women who are pregnant each year. These woman often buy maternity clothes for themselves during their pregnancy.

The secondary target market is the over 25,000,000 people who shop for and buy collegiate clothing each year. By being made aware that collegiate maternity wear exists, they are able to purchase items as gifts for someone they know who is pregnant.

4.1 Market Segmentation

The two groups of people who would buy maternity clothes are pregnant woman, and those who would shop for a pregnant woman, perhaps a husband or a family member. Based on these segments, our projected sales forecast is conservatively set at less then 1% of the total potential market, as highlighted in the following table and chart.

Market Analysis
		2005	2006	2007	2008	2009
Potential Customers	Growth						CAGR
Pregnant women	0%	3,500,000	3,500,000	3,500,000	3,500,000	3,500,000	0.00%
Colligiate wear shoppers	0%	25,000,000	25,000,000	25,000,000	25,000,000	25,000,000	0.00%
Other	0%	0	0	0	0	0	0.00%
Total	0.00%	28,500,000	28,500,000	28,500,000	28,500,000	28,500,000	0.00%

Market Analysis (Pie)

4.2 Target Market Segment Strategy

Pregnant women: There are over 3.5 million women who are expecting each year. The maternity retail business has come a long way from offering dowdy, baggy style maternity clothes to those that help women celebrate their style and look great even as their body changes. Clothes offered for pregnant women in the market now include hip and stylish maternity clothing, athletic wear and corporate clothes. After all, as pregnant women's waist lines balloon, their lives and careers go on as usual.  Women, for example, who are used to attending the sporting events for their favorite team would still want to show their support by wearing a fun and comfortable logo shirt. These women will be targeted through email campaigns, online advertising and direct marketing

Shoppers for Pregnant Women:  It is unknown how many people shop for someone they know that is expecting; however due to specific collegiate nature of our products, we will target those who are already shopping for collegiate wear to make them aware of our products and create gift ideas for the expectant women in their lives. We will use online advertising on existing collegiate sites to generate awareness and drive site traffic.

4.3 Industry Analysis

ExpectingU.com will be in a small segment of the clothing industry called Maternity Wear. Today the U.S. maternity wear industry generates sales of over $200 million and is comprised of over 2,000 retail stores and more than 500 websites that offer maternity clothing.

4.3.1 Competition and Buying Patterns

While there are several large maternity retailers such as Motherhood and Pea in the Pod, they all carry a mainstream line of clothes that are appealing to the masses. Due to their mass distribution model, it would not be prudent for them to carry small amounts of regional specialty items, such as collegiate shirts, at each store. Online retailers also carry a wide variety of maternity clothes, but very few carry collegiate maternity wear. Those that do offer very little variety in school representation. There is a need for a specialty web store geared for this type of apparel.

In this industry, customers choose their clothing based on personal preference. They often like to find items that represent their pre-pregnancy wardrobe so they can continue to keep their own style. By marketing our products to pregnant women, many are sure to connect with something as personal as their favorite sports team. It is a specialty item that will make them feel good to wear.

By positioning in the market as a specialty store, we are confident that word of mouth will help to create product awareness. Our market research shows that pregnant women today attend sporting events and often have to resort to buying men's large shirts or other make-shift clothing items. Pregnant women wearing our shirts in public will generate interest and lead to additional sales.

5.0 Strategy and Implementation Summary

Our marketing strategy is to create product awareness among expecting women and their families by strategically placing Internet ads, using direct mail tactics sold and generating PR. We offer a unique product that we feel confident expecting women will find fun to wear during their pregnancy. It will be a novelty item that will allow them to stay connected to their interest in their collegiate team both at games and around town.

5.1 Competitive Edge

The competitive edge offered by ExpectingU.com is our unique product. Currently, no major maternity retailer and few online stores offer collegiate maternity t-shirts. We will position ourselves as a specialty online store catering to expecting moms who want to maintain their support of their favorite team through their pregnancy. Because of our niche, we can effectively choose targeted sources to market our product to our customers.

Our primary weakness is that we are a new business and we offer a new product. To generate sales, we must first create awareness that our product exists, and make it easy for potential customers to locate our online store. By offering a fun product that many expecting women would like to have, we feel we an quickly establish our presence in the maternity wear industry.

5.2 Marketing Strategy

ExpectingU.com's marketing strategy is crucial to the success of our business. We must create awareness of our product to our primary target market, as our products are of little use to anyone outside of this group. We will do this by:

• Strategically-placed ads on websites that are frequently visited by expecting moms, such as parentsplace.com, babycenter.com, americanbaby.com and babyzone.com
• Placed ads on collegiate sites such as collegefootballnews.com and sports.yahoo.com
• Adding our products to other sites as an affiliate provider
• Direct mail and e-mail advertising to expectant mothers
• New product PR in publications for expectant mothers

5.3 Sales Strategy

Sales are dependent upon creating awareness of collegiate maternity wear within our target markets, and therefore the sales strategy for ExpectingU.com is based on driving business to our website. Because we are a new product line, we understand that we will have to generate excitement about our apparel in order to generate business. We will strategically place pop-up and banner ads on web-sites relevant to both expecting mothers and sports fans, we will use direct mail and e-mail lists and we will seek public relations coverage in relevant media sources.

ExpectingU.com will fulfill orders from our website store, as well as offer customers an option to fax in orders to our company.

        E-orders:  Customer can purchase online 24-hours a day, seven days a week.

        Fax orders:  Customers can fax in an order 24-hours a day, seven days a week.

As the company grows, we will leave the option open to using a fulfillment center to take orders via the telephone.

5.3.1 Sales Forecast

The sales forecast for FY 2006 takes into account slower sales at the beginning as we create awareness of our product and website. Initially we will be selling one style of t-shirt, but will offer it with the logos of up to 132 different Division 1 universities. As the company grows, we will explore the demand for other types of collegiate maternity wear such as tank tops, sweatshirts and long-sleeved shirts.

The following table illustrates unit sales of 36,500 t-shirts for the first year. This would require us to sell to less than 1% of our primary target market.

The Monthly Sales Chart that follows indicates that we have some seasonality in our business. We expect sales to increase during the Fall, which is when football season occurs and when sales for collegiate goods are the highest.

Sales Forecast
	FY 2006	FY 2007	FY 2008
Unit Sales
collegiate maternity t-shirts short sleeved	36,500	38,325	40,241
Other	0	0	0
Total Unit Sales	36,500	38,325	40,241
Unit Prices	FY 2006	FY 2007	FY 2008
collegiate maternity t-shirts short sleeved	$29.99	$29.99	$29.99
Other	$0.00	$0.00	$0.00
Sales
collegiate maternity t-shirts short sleeved	$1,094,635	$1,149,367	$1,206,835
Other	$0	$0	$0
Total Sales	$1,094,635	$1,149,367	$1,206,835
Direct Unit Costs	FY 2006	FY 2007	FY 2008
collegiate maternity t-shirts short sleeved	$7.50	$7.50	$7.50
Other	$0.00	$0.00	$0.00
Direct Cost of Sales
collegiate maternity t-shirts short sleeved	$273,659	$287,342	$301,709
Other	$0	$0	$0
Subtotal Direct Cost of Sales	$273,659	$287,342	$301,709

Sales Monthly

Sales by Year

5.4 Milestones

The following are the key milestones for the first year of operations:

1. Completion of strategic business plan by April 1, 2005.
2. Obtain all NCAA licensing by May 1, 2005
3. Negotiate t-shirt costs with supplier and with screen printer by May 30, 2005
4. Have fist shipment of products delivered in house for fulfillment by July 1, 2005
5. Have specifics for our advertising plan in place by June 1, 2005

Milestones
Milestone	Start Date	End Date	Budget	Manager	Department
Obtain NCAA licensing for shirt production	5/1/2005	5/1/2005	$5,000	ML	general
Place ads on two expectant mother websites	7/1/2005	9/1/2005	$10,000	ML	general
PR packets to 10 expectant mother publications	6/1/2005	7/15/2005	$200	ML	general
Obtain 2-3 email lists for expectant mothers	6/15/2005	7/1/2005	$1,000	ML	general
Send emails to target customers	7/1/2005	7/31/2005	$500	ML	general
Sign up products as affiliate offer on five sites	6/1/2005	7/31/2005	$250	ML	general
Other	3/14/2007	4/13/2007	$0	ML	general
Totals			$16,950

Milestones

6.0 Web Plan Summary

The following sub-topics outline our plans to create and maintain our website.

6.1 Website Marketing Strategy

Our website will provide information about us and our products as well as order processing to purchase our products online. We will include our web address in all of our advertising to reinforce to our customers how to find us online. Our company logo and motto will also need to be eye catching and easy to remember so that once our customers find us, they will remember us and suggest us to their friends and family.

6.2 Development Requirements

We will be working with an outside contractor to design the layout of the site and to create the necessary security provisions to handle online order processing. The estimated costs for website development are listed in our start-up costs.

Some of the features included on the website will be the ability to search for logos by school name as well as by "team name" (such as the University of Alabama "Crimson Tide," the UCLA "Bruins" and the University of Oregon "Ducks"). Good-quality pictures of our products and the logos on the products will be available, so the customer can see what they will be getting.

The order processing will include the ability to provide both a billing and an optional shipping address and will be able to process both credit card as well as payment by check (using Paypal).

Once the website design is complete, we will contract for ongoing maintenance and support of the site. These monthly cost estimates are listed in the expenses section of the Profit and Loss table.

7.0 Management Summary

Initially the only employee will be Mary Lenton, the company founder. She will oversee product development, the online store and marketing efforts. Outsourcing will be used on some initial tasks, specifically the website store design. As the company launch date approaches, one employee will be hired to help with fulfillment with a second part-time employee scheduled for the third month, entering into the highest potential selling time frame, football season. As the company grows, more personnel will be added as needed.

7.1 Personnel Plan

We expect the only full-time employee will be the owner for the first year. One part-time (30 hours/week) employee will be hired initially, followed by a second part-time employee in month three as business is expected to increase due to seasonality. If projections for October through December are correct, temporary seasonal help will need to be hired to assist in fulfilling the order processing.

Part-time staff will be responsible for processing all Internet and Fax orders and will handle all shipping functions. 

Subcontractors will be used to help with website design and marketing, and these subcontractor costs can be found in the Profit and Loss tables Expenses section.

Personnel Plan
	FY 2006	FY 2007	FY 2008
Owner	$36,000	$40,000	$45,000
Fulfillment Representative 1	$12,000	$23,000	$25,000
Fulfillment Representative 2	$10,000	$23,000	$25,000
Total People	3	3	3
Total Payroll	$58,000	$86,000	$95,000

8.0 Financial Plan

ExpectingU.com projects the gross margin to be healthy percent. Sales projections for FY2006 are at over $1 million. A monthly breakdown of the cash-flow analysis, balance sheet, business ratio, break-even analysis, and other financial details are shown in the appendix. Annual projections will be highlighted in the following sub-topics.

8.1 Start-up Funding

The company owner, Mary Lenton, will use personal funds to finance the start of this business. Since a home office is already established and there is a large area in the basement available for inventory storage, the primary start-up costs are associated with website store design, starting inventory, and licensing approval.

Start-up Funding
Start-up Expenses to Fund	$23,750
Start-up Assets to Fund	$40,000
Total Funding Required	$63,750
Assets
Non-cash Assets from Start-up	$35,000
Cash Requirements from Start-up	$5,000
Additional Cash Raised	$0
Cash Balance on Starting Date	$5,000
Total Assets	$40,000
Liabilities and Capital
Liabilities
Current Borrowing	$0
Long-term Liabilities	$0
Accounts Payable (Outstanding Bills)	$0
Other Current Liabilities (interest-free)	$0
Total Liabilities	$0
Capital
Planned Investment
Owner	$63,750
Investor	$0
Additional Investment Requirement	$0
Total Planned Investment	$63,750
Loss at Start-up (Start-up Expenses)	($23,750)
Total Capital	$40,000
Total Capital and Liabilities	$40,000
Total Funding	$63,750

8.2 Break-even Analysis The following Break-even Analysis shows what is needed in monthly sales to break even.

Break-even Analysis
Monthly Units Break-even	1,136
Monthly Revenue Break-even	$34,078
Assumptions:
Average Per-Unit Revenue	$29.99
Average Per-Unit Variable Cost	$7.50
Estimated Monthly Fixed Cost	$25,558

Break-even Analysis

8.3 Projected Profit and Loss

The following table and charts show the projected profit and loss. Monthly projections are included in the appendix.

Pro Forma Profit and Loss
	FY 2006	FY 2007	FY 2008
Sales	$1,094,635	$1,149,367	$1,206,835
Direct Costs of Goods	$273,659	$287,342	$301,709
Other Costs of Goods	$60,000	$6,000	$7,000
	------------	------------	------------
Cost of Goods Sold	$333,659	$293,342	$308,709
Gross Margin	$760,976	$856,025	$898,126
Gross Margin %	69.52%	74.48%	74.42%
Expenses
Payroll	$58,000	$86,000	$95,000
Marketing/Promotion	$180,000	$189,000	$198,450
Depreciation	$0	$0	$0
Web Design and Maintenance	$36,000	$39,600	$43,560
Payroll Taxes	$8,700	$12,900	$14,250
Other	$24,000	$0	$0
	------------	------------	------------
Total Operating Expenses	$306,700	$327,500	$351,260
Profit Before Interest and Taxes	$454,276	$528,525	$546,866
EBITDA	$454,276	$528,525	$546,866
Interest Expense	$0	$0	$0
Taxes Incurred	$136,283	$158,558	$164,060
Net Profit	$317,993	$369,968	$382,806
Net Profit/Sales	29.05%	32.19%	31.72%

Profit Monthly

Profit Yearly

Gross Margin Monthly

Gross Margin Yearly

8.4 Projected Cash Flow

The monthly cash flow is shown in the illustration, with one bar representing cash flow per month and the other representing the monthly balance. The annual cash flow figures are included in the following table.

Pro Forma Cash Flow
	FY 2006	FY 2007	FY 2008
Cash Received
Cash from Operations
Cash Sales	$1,094,635	$1,149,367	$1,206,835
Subtotal Cash from Operations	$1,094,635	$1,149,367	$1,206,835
Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$0	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$0	$0	$0
Subtotal Cash Received	$1,094,635	$1,149,367	$1,206,835
Expenditures	FY 2006	FY 2007	FY 2008
Expenditures from Operations
Cash Spending	$58,000	$86,000	$95,000
Bill Payments	$652,232	$691,342	$727,276
Subtotal Spent on Operations	$710,232	$777,342	$822,276
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$0	$0
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$0	$0	$0
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$710,232	$777,342	$822,276
Net Cash Flow	$384,403	$372,025	$384,559
Cash Balance	$389,403	$761,428	$1,145,987

Cash

8.5 Projected Balance Sheet The following table is the Projected Balance Sheet.

Pro Forma Balance Sheet
	FY 2006	FY 2007	FY 2008
Assets
Current Assets
Cash	$389,403	$761,428	$1,145,987
Inventory	$22,493	$23,617	$24,798
Other Current Assets	$0	$0	$0
Total Current Assets	$411,895	$785,045	$1,170,785
Long-term Assets
Long-term Assets	$0	$0	$0
Accumulated Depreciation	$0	$0	$0
Total Long-term Assets	$0	$0	$0
Total Assets	$411,895	$785,045	$1,170,785
Liabilities and Capital	FY 2006	FY 2007	FY 2008
Current Liabilities
Accounts Payable	$53,902	$57,084	$60,017
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$53,902	$57,084	$60,017
Long-term Liabilities	$0	$0	$0
Total Liabilities	$53,902	$57,084	$60,017
Paid-in Capital	$63,750	$63,750	$63,750
Retained Earnings	($23,750)	$294,243	$664,211
Earnings	$317,993	$369,968	$382,806
Total Capital	$357,993	$727,961	$1,110,767
Total Liabilities and Capital	$411,895	$785,045	$1,170,785
Net Worth	$357,993	$727,961	$1,110,767

8.6 Business Ratios

The following table shows the projected business ratios. We expect to maintain healthy ratios for profitability, risk, and return. Industry profile ratios based on the Standard Industrial Classification (SIC) of the Maternity Wear industry.

Ratio Analysis
	FY 2006	FY 2007	FY 2008	Industry Profile
Sales Growth	0.00%	5.00%	5.00%	-17.40%
Percent of Total Assets
Inventory	5.46%	3.01%	2.12%	38.82%
Other Current Assets	0.00%	0.00%	0.00%	28.73%
Total Current Assets	100.00%	100.00%	100.00%	90.64%
Long-term Assets	0.00%	0.00%	0.00%	9.36%
Total Assets	100.00%	100.00%	100.00%	100.00%
Current Liabilities	13.09%	7.27%	5.13%	24.75%
Long-term Liabilities	0.00%	0.00%	0.00%	5.78%
Total Liabilities	13.09%	7.27%	5.13%	30.53%
Net Worth	86.91%	92.73%	94.87%	69.47%
Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	69.52%	74.48%	74.42%	24.54%
Selling, General & Administrative Expenses	40.47%	42.29%	42.70%	13.39%
Advertising Expenses	0.00%	0.00%	0.00%	0.79%
Profit Before Interest and Taxes	41.50%	45.98%	45.31%	1.00%
Main Ratios
Current	7.64	13.75	19.51	3.27
Quick	7.22	13.34	19.09	1.38
Total Debt to Total Assets	13.09%	7.27%	5.13%	34.77%
Pre-tax Return on Net Worth	126.90%	72.60%	49.23%	2.50%
Pre-tax Return on Assets	110.29%	67.32%	46.71%	3.83%
Additional Ratios	FY 2006	FY 2007	FY 2008
Net Profit Margin	29.05%	32.19%	31.72%	n.a
Return on Equity	88.83%	50.82%	34.46%	n.a
Activity Ratios
Inventory Turnover	10.99	12.46	12.46	n.a
Accounts Payable Turnover	13.10	12.17	12.17	n.a
Payment Days	27	29	29	n.a
Total Asset Turnover	2.66	1.46	1.03	n.a
Debt Ratios
Debt to Net Worth	0.15	0.08	0.05	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a
Liquidity Ratios
Net Working Capital	$357,993	$727,961	$1,110,767	n.a
Interest Coverage	0.00	0.00	0.00	n.a
Additional Ratios
Assets to Sales	0.38	0.68	0.97	n.a
Current Debt/Total Assets	13%	7%	5%	n.a
Acid Test	7.22	13.34	19.09	n.a
Sales/Net Worth	3.06	1.58	1.09	n.a
Dividend Payout	0.00	0.00	0.00	n.a