Thuong Mai University

Université De Toulon

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FINAl REPORT

Project: TOD Clothings

Major: Start-up

Student’s name: Duong Hai Long

Class: CN15-STA

Student Code: 18K690023

Instructors: Professor Claude FERRAN

Professor Frederic REINERT

ACKNOWLEDGEMENT
THANK YOU

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 Graduation report majoring in start-up with the topic "My own startup project" is the
result of my constant efforts and the help and encouragement of my teachers and friends.
Through this page, I would like to thank those who have helped me during my study and
this report.

I would like to express my deep respect and gratitude to Professor Claude FERRAN,
Professor Frederic REINERT who directly guided and provided necessary specialized
information for this thesis.

I would like to express my sincere thanks to the leaders of the University of Commerce,
International Affiliate Faculty and the Start-up major for creating conditions for me to
learning and developing myself over the yearssuccessfully complete this final report.

PREFACE

In the current era of industrialization and modernization, business enterprises are facing
new challenges. This era is the information age and the economy is a multi-component
commodity economy.

Along with the continuous and outstanding progress of modern science and technology
and cultural exchanges, the integration of countries in the region and the open-door policy
of the State, creating favorable conditions for businesses new businesses, startups. All
products and goods on the market create a vibrant economy with great competition. In
order to integrate with the common development, Vietnam has been strongly
implementing a special economic policy with many incentives for newly established
companies, startups.

Choosing this startup project for my graduation report is a good opportunity for me to
demonstrate my abilities and capabilities as well as to apply the valuable knowledge I
have learned during the three years in Thuong Mai University.

The report is divided into 2 main parts:

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 I. INTRODUCE OF THE BUSSINESS
II. MONTPELLIER BUSINESS PLAN

Table of contents
ACKNOWLEDGEMENT................................................................................................2
I. INTRODUCE OF THE BUSSINESS.........................................................................6
1. Project presentation..................................................................................................6
2. Identification..............................................................................................................8

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 2.1. Business model.....................................................................................................8
2.2 The goal of the project.......................................................................................10
2.3. Mission...............................................................................................................10
2.4. Vision.................................................................................................................. 10
2.5. Core values.........................................................................................................11
3. Market research and analysis.................................................................................11
3.1. Products and services........................................................................................11
3.2. Target customers...............................................................................................12
3.3. Competitors.......................................................................................................12
3.4. Location.............................................................................................................13
3.5. Environmental analysis.....................................................................................14
3.6. SWOT analysis..................................................................................................17
3.7. Market research................................................................................................20
4. Marketing strategy and plan..................................................................................23
5. Means implemented and organization...................................................................25
5.1 The mean implemented......................................................................................25
5.2 Organization.......................................................................................................28
6. Business model and strategy...................................................................................29
6.1 Business model....................................................................................................29
6.2 Strategy...............................................................................................................31
II. MONTPELLIER BUSINESS PLAN........................................................................32
1. Product..................................................................................................................32
2. Detailed sales for the 1st year and sales over 3 years:........................................33
3. Sale receipts...........................................................................................................41
4. Purchase costs on sale, detailed for the 1st year and over 3 years....................44
5. General expenses: 1st year detailed month by month + over 3 years...............46
5.1. Administration & Management general expenses.......................................46
5.2. Production general expenses.........................................................................59
5.3. Sales general expenses....................................................................................64

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 5.4. R&D general expenses...................................................................................70
6. Staff........................................................................................................................ 71
6.1. Administration & Management personnel expenses and gross salary
disbursements...........................................................................................................72
6.2. Production personnel expenses and gross salary disbursements................74
6.3. Sales personnel expenses and gross salary disbursements..........................78
6.4. R&D personnel expenses and gross salary disbursements.............................82
7. Investment.............................................................................................................83
7.1. Administration & Management investment.................................................83
7.2. Production investment...................................................................................87
7.3. Sales investment.............................................................................................90
7.4. Research & Development investment...........................................................98
8. Depreciation..........................................................................................................98
8.1. Administration&Management depreciation................................................98
8.2. Production depreciation..............................................................................100
8.3. Sale depreciation..........................................................................................101
8.4. R&D depreciation........................................................................................102
9. Loan.....................................................................................................................103
10. VAT .................................................................................................................107
11. Coperate tax.....................................................................................................108
12. WCR.................................................................................................................109
13. Financing plan.................................................................................................111
14. Cash flow..........................................................................................................113
15. Profit and lost...................................................................................................117

I. INTRODUCE OF THE BUSSINESS

1. Project presentation
This project was cherished by me two years ago when the wave of street fashion for
young people started to develop extremely strongly in Vietnam. Over the years, there are
quite a few local clothing brands established, but the number of brands that actually invest
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in brainpower and effort in their products is very small, I realized that the designs of most
brands are copied from the internet, lacking the breakthrough and unique imprint of each
brand, they focus on revenue too much but forget about the value of good service, good
product, brand awareness that can bring in revenue, long-distance profit is huge. So I
decided to build this project to create a company with real quality fashion products, a
professional and prestigious domestic clothing brand for Vietnamese youth. I know that
the fashion industry for Vietnamese young people is still quite new but the competition is
extremely fierce so I think I have to accumulate more experience and knowledge in
various fields of economics and fashion before embarking on this project.

In the early years, my project focused on building brand image, building brand identity
for clients through company logo, slogans, design templates ... All products before
reaching the hands of consumers will be carefully checked from fabric material print
quality, size, appearance, ... to the smallest details such as redundancy, seams.... Focusing
on details will make a huge difference between my company and competitors in the
market. As a small and new company, competing on price or variety of product models
compared to other companies in the market will be a wrong choice for my company, so
from the beginning my company determined establishing brand reputation and excellent
customer service will be the top priority of my company. This I have drawn from
comparisons between famous fashion brand and and other casual fashion companies.
Huge profits from this industry along with a strong passion for fashion made me decide to
pursue this project. When my company had built a strong enough brand image along with
high reputation it will easier to expand a larger business model and even expand my
business. The profit of the project mainly comes from selling the company's fashion
products in its early years and franchising when the company has built a brand among
consumers.

I plan to contribute capital with a few friends who share a passion for fashion, and have
knowledge of all areas of the economy to set up this business. Once the size of the
company grows enough to attract investors, my company will raise more capital from

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investors and my goal in the future is my company will develop into a joint stock
company and be listed on the stock exchange of Vietnam. The goal was set together with
confidence in the project’s ability to succeed and a passion that would guide my efforts.
To be able to develop a business only by myself is impossible, so I am looking for
associates who share the same development direction, share the passion, and common
goals. I am always looking for partners who really care about the project, consider it an
indispensable part of them, ready to put in effort to develop the project. I especially look
for associates in the management and design fields as these are the two key segments that
determine the success or failure of a fashion business. My original idea was simply that I
wanted to create clothes to my liking, but after observing the size of the market, the needs
of the customer and the potential of the industry, I decided to start this project. I have a
family background in the fashion industry so although not much, I also have the basics of
all aspects of the industry, moreover I spent more than a year investigate the market and
how other brands work to find my own path. In terms of strengths, I see myself as a
person with the ability to think creatively, to lead the team, to work hard and not to be
afraid of challenges. Besides, I found myself lacking in professional fashion knowledge,
the meticulousness at work was not high, the ability to present was not fluent.

2. Identification
2.1. Business model
- Name of my company: The Ocean Dragon Clothings ( TOD Clothings)

The company name is inspired by the English transliteration of my first and last name
from Vietnamese. In Vietnam, dragon is a symbol of prosperity, development, always
moving forward, in the 12 zodiac of Asia, the dragon is considered the king of all
creatures, is the symbol of emperor. Named the company like that not only helps to
express my personality, but also shows that the company's goal is to always move forward
and grow with the ambition to lead the market that the company is aiming for.

- Model: manufacturing, designing and selling exclusive fashion products

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- Slogan: Be Fashionable - Be Uniqued

- My company will also design easy-to-recognise logo, easy-to-remember slogans so that

every time customers see that logo / slogan, they will immediately recognize that the
product is from my company.

My company’s demo logo

- Place: After selling goods completely online in the first year, in the second year my
company will start to open direct selling establishments in Hanoi, both to affirm the
prestige of the customers and the place. Customers can choose to view them directly if
they want. The selected area is around Ho Tung Mau street, Cau Giay district, Ha Noi
because this is the place where there are many fashion shops for young people, the
general mentality of young people in Hanoi every time they want to buy certain fashion
products they will think of this area first.

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- The original capital: A few friends and I will contribute about $ 10,000 to start the
project, in addition we are also loaned an office of about 80 square meters by our family
in the Hanoi area. In addition, the company plans to borrow an additional $ 2,000 from
the bank.

- Having a few friends contributing capital and building a company together helps me
share the burden of the initial capital issue and the possible risks. Moreover, it also helps
to promote the strengths of each person in different areas of the company because each
person will have their own strength and business experience.

2.2 The goal of the project

- Building a famous fashion brand for young people with quality products.
- Creating great profits, creating jobs for young people who are creative and passionate
about fashion.
- Build a smooth and professional self-operating system.
- Apply new technological changes to business to differentiate old companies in the
market.
- Bring the image of Vietnamese culture, customs and traditions into each product of the
company.
- Build a high brand awareness for customers.
2.3. Mission
- With my passion for fashion, seriousness and professionalism for the project, I believe I
will be able to build a company with high profitability, create jobs for many people, build
a fashion brand bearing the symbol of Vietnamese youth. Unlike other street fashion
companies in the market, my company will bring a breeze with products that combine
designs based on Vietnamese culture and customs with diverse and unique design
according to world trends. Products when delivered to customers will have the highest
meticulous perfection possible, reasonable prices compared to the market, providing the
best product and service experience for customers.
2.4. Vision

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– In the first year:
+ Build a good brand image
+ Try to get the trust and favorite of customers
+ Promote marketing through advertising on e-commerce sites and social networks
+ Always improve product quality and keep up with fashion trends in the country as well
as internationally
– In the next two years:
+ Expanding the scale of production from outsourcing to self-manufacturing
+ Raising more capital to open stores in Hanoi
– In the 5th and 6th year:
+ Bring the company to the top of the fashion companies for young people in Vietnam
+ Put the company on the stock exchange to call for investment from investors
2.5. Core values
- Putting the company's reputation on top
- Always respect the opinions of customers, do not stop collecting feedbacks from
customers to improve the company's products and services to better meet customers'
needs. Building a comprehensive customer care system in all parts of the company.

- Constantly innovating, always updating new trends for the company's products and
services

- Working environment is creative, professional, connecting the members of the company

but still creating a comfortable and cozy environment among members.

3. Market research and analysis

3.1. Products and services
- Product: fashion products are popular with young people such as jacket, designing t-
shirt, pants, cap, wallet, cloak, badanda, cross bag, face mask,.. everything which is
related to fashion we will investigate and produce those.
- Good product quality and meticulous finishing are the most important factors in
my products, Before launching any new product, the research on materials, design,
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product durability, quality ... will be closely inspected and checked by my company
before delivering the products to customers, both helping to detect defective products,
while providing the best product experience for customers. We focus mainly on the mid-
range segment, range of product price is between 300,000 VND to 2 million VND (13$
-87 $).
- My company’s products will have the combination of Vietnamese culture (design
ideas, clothing forms) along with diverse product designs, popular fashion trends
of foreign fashion brands that are being attracted by many customers. For example,
international fashion brands often takes the image / logo / flag of France to put in their
products , we are also the idea of the national symbol, but it will be the flag of Vietnam,
the Hanoi capital ...
- Services: Customer consultation before buying, customer care after sales. For me, good
service will be the core value of the company, it will be the duty of all employees, not just
any department.
3.2. Target customers
The target customers that my company targets are students, students aged 15-24 who
live mainly in rural areas and big cities in Vietnam. Customers can spend between 300
thousand -2 million VND on buying fashion items per month. Market study has shown
that this group of customers tend to consume the most for fashion products, they not only
buy for use purposes but also because of market trends, preferences ...
3.3. Competitors
- Local fashion brands for young people are popular with many young people such as
ClownZ, Bad Habits, Dirty Coins, SWE, Bobui, Lyos… those brands all produce and
publish the products which were designed by their own brands bearing their own brand
identities and logos. These brands share the same customer segments as my company,
which is the target group of students living and studying in rural areas and big cities in
Vietnam.
- Shops selling fashion products for young people in the streets of Hanoi such as
DENIMST - Shop thời trang nam ( 20 Tran Thai Tong, Cau Giay, Ha Noi), Tino

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Menswear ( 332 Ba Trieu, Hai Ba Trung, Ha Noi), Phan Nguyen Fashion Store ( 109
Pham Ngoc Thach, Dong Da, Ha Noi) …

Logos of famous local clothing brands for young people in Vietnam

3.4. Location
For a fashion store, it is very important to have a pavement store to display products, but
because the cost of opening a store on the street in Hanoi is relatively high. In the first
year, my company only operates in the form of online sales, e-commerce booths. In the
second year, my company will start opening the first store, the area planned for selection
is Cau Giay area because this is the gathering place of major universities, Thuong Mai
University, Hanoi National University... along with many other high schools, so this area
will be home to a large number of target customers of my company.

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 Density of fashion shops in the Cau Giay area

Throughout the long way, Cau Giay area is home to a lot of fashion shops. Whenever
customers want to buy a fashion product, they often think and come to this area to buy so
they open a shop in this area. In this area my company also benefits from customer
buying behavior.

3.5. Environmental analysis

3.5.1. Macro environment analysis:

- Economic environment:

+ Economic growth (GDP): In the first 9 months of 2020, Vietnam recorded a GDP
growth rate of 2.1% (much lower than the growth rate of 7.0% in the same period in 2019

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due to the influence of covid19), GDP growth rate. may reach 2.5 - 3.0% in the last
months of 2020. Due to good disease control, Vietnam still recorded 4.98% growth in the
retail, wholesale and service sectors compared to the same period last year.

+ Import and export turnover of Vietnam: In the first 9 months of 2020, the whole textile
and fashion industry in Vietnam exported 25,584 billion USD, down 12% over the same
period. Textile and garment trade surplus in 9 months reached 13,765 billion USD,
accounting for 53% of the rate of added value, down 12.11% over the same period.

+ Inflation and unemployment: In the first 9 months of the year, inflation rate for the
garment and fashion industry increased by 0.92% over the same period last year. Also due
to the epidemic, the unemployment rate in the industry increased about 7% over the same
period last year

+ Interest rate: In Vietnam, interest rates at banks usually range from 6-25% / year, but
this interest rate depends on each bank, form of loan, incentives, or how the interest rate is
calculated. Normally, for unsecured loans, the interest rate ranges from 6-25% / year,
while for mortgage loans, the interest rate ranges from 10-12% / year.

+ Per capita income: It is forecasted by the IMF to hit the $ 3500 mark

+ Spending structure: Spending structure of Vietnamese people, especially young people,

will spend about 11-15% on buying clothes and shoes.

- Political environment: The legal system has many innovative policies to accommodate
the change and global integration. There are many policies to support new businesses,
small and medium enterprises. The open door policy makes it easy to import and export
goods, which is extremely important as the large amount of raw materials for the fashion
industry in Vietnam still have to be imported from abroad.

- Technological environment: As for the fashion industry, the trend of applying

technology to produce environmentally friendly products is favored by many businesses.
Advanced techniques are also being applied more and more widely, such as 3D printing,

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making clothes and shoes from used plastic bottles, materials that change color according
to the temperature, and clothing, shoes that connected to mobile phones… Technology is
also applied to major sales such as e-commerce floors, sales systems on social networking
sites ...

- Socio - cultural environment: The Vietnamese tend to buy the most at the end of the
year, before the holidays, the big New Year of the year. Each profession has its own
unique costumes, each ethnic group in Vietnam has its own distinctive costume.

- Natural environment: In Vietnam, there are two main seasons: hot and cold. The climate
in the South and the Center is hot and humid, so the clothes must be very cool, creating a
pleasant feeling for the wearer. The North has 4 seasons, so the clothes must also change
according to the changing weather to protect human health. Climate is a very important
factor affecting the demand for buying and using products of Vietnamese customers,
especially for fashion businesses that need to have a specific product launch strategy
suitable for each season to adapt customer needs.

3.5.2. Micro environment analysis:

- Customers: Consumers from 15-24 are mainly students who love street fashion, applied
fashion and sportswear. Customers are mainly concentrated in urban and delta areas of
Vietnam, especially cities with densely populated young populations such as Hanoi, Ho
Chi Minh City, Danang ...

- Suppliers:

+ The company provides raw materials imported from abroad

+ The garment factory provides finished product outsourcing services, and offers
producing staffs hiring

+ My family, friends provides capital for the first year

+ Bank

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+ Delivery company

- Current competitors:

+ Local brands of clothing for young people share the same target audience segment as
my company such as Dirty Coins, Bad Habits, ClownZ, SWE…

+ Cheap fashion stores for students (mostly imported from China) in Hanoi area.

- Potential competitors: These businesses are currently in the fashion industry but
different from the customer segment. The number of businesses investing in street fashion
today is mainly small businesses, spontaneous by young people, but because the
profitability of this customer segment is also very large, it is possible that the big men in
The fashion industry, such as those that are already in the forefront with extensive
experience, will also enter this market share.

- Alternative products: Fashion products with many new technologies and features
applied.

3.6. SWOT analysis

SWOT matrix Strengths Weaknesses

+ Creativity in design + Capital is still limited
combines Western design + Not much experience in
styles and Vietnamese fashion industry, human
culture into products. resource management
+ Always update fashion + Product models are not
trends quickly diverse enough compare to
+ Understand the the local clothing brands go
psychology of my target first
audience
+ Proficient in both

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 Vietnamese and English
+ The product is cheaper
than the general premises
+ Good quality products
Opportunities + The new and unique + Continuing to gather
+ The number of customers design knowledge in the fashion
in easily attracts the attention industry, management
the segment that the of knowledge ...
company customers and the media. + Research to produce
targets is relatively large + Easily promote products more
+ In the market, the number through online channels product models
of + The continuously updated + Take advantage of state
enterprises producing products will impress Incentives to develop
products of similar nature customers with the businesses
in my company is still company’s internal + Continuous personnel
small sensitivity in keeping up change
+ Diversified, easy-to-use with the trend. + There are too many
onlin communication + Meet the product buying projects
channels that are easy to needs of both Vietnamese and ambitions at the same
reach target customers and foreign customers time
+ The state has many + Use a low-cost strategy to
incentives that are attract target customers
beneficial to new
businesses
+ The demand for clothing
and fashion accessories in
Vietnam is huge, especially
among the young
customers.

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 Threats + Capture and predict + Using legal measures to
+ Many strong competitors customer needs to solve the problem of
compete with the same manufacture products counterfeit and pirated
customer before customer needs goods
segment change
+ Customer’s needs are + Price strategy
constantly changing + Innovative marketing
+ Just losing credibility strategy, developing new
once will be very difficult products
to regain the sympathy of
customers.
+ Sudden changes in legal
+ Many competitors in the
same fashion industry but
different from the customer
segment are researching to
jump into this customer
segment.
+ Many fake company’s
products

3.7. Market research

- Market:
+ The market my company targets will be the fashion market for young people in
Vietnam In this market, the company will meet the demand for clothing, fashion
accessories for Vietnamese youth, specifically the group from 15-24 years old. In
this market, I realize that my company needs to always update new models to meet
the changing product design needs each year, each month. The demand for quality
products and services of consumers is also increasing rapidly. Products with a

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combination of Vietnamese identity and international elements will make a lot of
impression on consumers.
+ Customers of this market are mainly individual consumers who are students or
workers in urban areas can spend between 10-30$/month for the need to buy
fashion products. It is expected that the number of customers in this group will be
very large as Vietnam has a relatively high number of people in this age group of
about 9 million people. The size of this target market is relatively large. For the
fashion market in Vietnam, the demand for buying goods depends a lot on the
season in Vietnam, it is divided into hot and cold seasons. In addition, there are
also many holidays in the year that can affect the buying demand of customers. In
this market the product may be distributed through direct sales to the customer or
through a logistics company that delivers the goods to the consumer, or through the
company’s agents, through concessions also help to distribute products / services to
consumers in the marketplace. Buying motivation of customers can come from the
impression of advertising campaigns, promotions of the company, from the unique
design of the product, from the need to buy seasonal products, the prestige scarcity,
exclusivity of the company’s products...
+ In the current Vietnamese market, the competition intensity is relatively fierce
not only between domestic enterprises but also with the wave of foreign businesses
that are massively investing in a lucrative and potential market like Vietnam.
+ There are two main types of distribution being used in the market: traditional
distribution (through stores, agents) and online distribution (via e-commerce
channels, online stores, social network)
+ Technology is also gradually changing the global fashion market in general and
in Vietnam in particular, consumers gradually tend to choose environmentally
friendly products. High-end technologies are also gradually applied such as
synthetic spider silk, bacteria dyeing ... On the other hand, businesses are also
shifting from traditional businesses to online businesses, focusing on investment in
developing online sales channels. This is considered a trend for the coming years

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because the epidemic situation in the world has yet to show positive signs.
 Conclusion, through researching the Vietnamese fashion market, I have learned
a few things that are very useful for my business as follows:
+ Consumers in each region in Vietnam have different buying needs and thinking.
For example, in the South, the climate is relatively hot, customers mainly focus on
summer-specific products such as T-shirts, shorts, hats ... For the North, it is
clearly divided into two seasons: hot and cold, therefore the demand for product
variety from Northern customers will be higher with the requirement for both hot
and cold seasons.
+ Consumption behavior of regions in Vietnam is also different. In the South of
Vietnam, customers are often not loyal to a certain brand, they tend to want to try
many products of many different brands. This is in stark contrast to the North
where customers tend to prefer certain fashions, of a fixed label, and do not have
the need to try new things regularly. Therefore, the cost that my company has to
spend to promote, communicate, advertise as well as strategy to retain customers in
the South will be more difficult and costly than customers in the North.
+ The internet and social networks have been used by fashion startups in Vietnam
as a primary tool for product promotion. Facebook and Instagram are the two most
popular social networks to make costs affordable and have a large number of users
in Vietnam. Furthermore, the online display of products allows small and medium-
sized fashion startups to minimize the cost of renting expensive premises,
especially for the mass segment.
+ Four of the most effective promotional strategies for a fashion business in
general and for my company in particular that I have learned after market research:
 The first is a unique product with good quality. This is the top investment
point for all brands participating in this study. They always make a
difference in their design style, choose the right fabric so that customers can
see the value they bring compared to foreign brands and domestic brands in
the same segment. The fact has shown that customers prefer limited edition

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clothes over mass-produced “uniforms” of international brands. Through
this, it can be seen that Vietnamese brands only need to create their own
highlights and identities to compete fairly with foreign brands.
 Secondly, Good customer care, Through research, I found that good quality
products, unique designs are the key to attracting customers to try their
products. But letting them come back many times and recommend their
products to friends depends on the quality of customer care. The percentage
of customers who comeback to a brand with good customer service is
incredibly high, which is up to 95%
 Thirdly, Building brand image, Identity for a fashion brand is extremely
important, it is not only the distinction between this brand and other brands,
but also the image and reputation of the company. The fact that customers
choose to buy products of this brand over other products is mainly because
of their trust and preference for that brand. For small businesses or startups
branding should be carefully considered depending on the budget to avoid
rampant promotions that do not focus on the target audience. Small
businesses also need to maintain a good image in the eyes of their customers
as well as a high reputation because these are vital factors for a fashion
company, once losing these factors is very difficult. regain the trust of
customers.
 Last one is Word of mouth marketing (WOM). Word of mouth marketing,
especially social media (eWOM) is one of the most effective tools of
marketing. A customer with a high following on Facebook or Instagram just
needs to post a good response on the company’s products / services and
those following customers will most likely become potential customers of
the company. company. The power of word of mouth can increase
exponentially with a huge increase in power for a business in general and for
the fashion business in particular.
4. Marketing strategy and plan
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- Product policy: To differentiate myself from the competitors, I would place a lot of
emphasis on the quality of the product and the finish, and would also set a lower price
than the competition to gain confidence use of new customers. All products are attached
with company logo to increase brand recognition. Furthermore, instead of using plastic
bags to pack products like other local brands use, my company will completely turn to
paper products, recyclable products and Not harmful to the environment, I find that the
trend of using eco-friendly products is very popular with many customers. For suppliers,
positive aspect is currently on the market there are many suppliers for the company to
choose from, but because the company is new with a small budget, so the negotiation to
have a preferential price for materials and tools prices are relatively difficult. For
consumers, since this is a new product of a brand new company, customers tend to want
to test my company's products but the negative aspects here are they do not have much
awareness about the company's products, have not verified the quality of the product or
have no objective assessment of my company's products. In order to meet the needs of
customers for product diversity, I will build a range of products from clothing, hats, pants
to sock ... all the fashion accessories my company will research and develop to satisfy
customers demand.
- Price policy: Regarding the company price, I actively set the price lower than the
competitors, but this price will only be about 10-20% lower than the market price. Since I
have researched and found that a product with a price just a little lower than the general
market price, has caused a lot of impressions and curiosity of customers, but this price
should not be lower too much compared to market price because it will mislead customers
that the company's product is low quality, so the price is low too, moreover, the price is
too low, it will unbalance the market, causing product price imbalance. My company will
apply a price comparison strategy between its own products. For example, my company
jointly released a plain shirt for $ 10 and a pattern with print for $ 11, which will make
customers more likely to buy shirts with textures because of the feeling found a great deal
compared to buying a plain t-shirt with no prints. I have researched and realized in

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business that customers should not have a choice of yes or no but only give them the
choice of buying this product or buying that product.
- Place: Shop locations are selected in areas with large numbers of students, near
universities and high schools in Hanoi. For fashion stores, road surface position must be
given priority to maximize product display to customers. In the first year, my company
plans to open only an online store on e-commerce sites, not a traditional store. Because
during the uncontrolled covid translation time, the customers' choice to buy in traditional
stores has been greatly reduced, and the price to rent a store with a beautiful premises is
quite expensive. Moreover, the trend of purchasing is gradually changing to online
shopping on websites, social networking sites and e-commerce sites, my company has
determined the choice of selling on these online channels while helping to reduce costs
for building stores, and easily reach the group of target customers, managing sales on
these online channels is also much easier and more convenient.
- Promotion:
+ Promoting products through advertising tools of Facebook, Instagram, Google ... helps
to reach more customers, especially young customers who have the habit of using social
networks. Every year, at the end of each season and before major festivals of the year in
Vietnam, there will be special promotions and discounts to help stimulate the demand for
purchases. For old customers, every purchase of a product will receive a discount code for
the next purchase.
+ Participate in trade fairs and exhibitions exclusively for local clothing brand
+ Eye color product packaging, highlighting the company's logo. In particular, the
packaging will use recycled materials that do not harm the environment.

5. Means implemented and organization

5.1 The mean implemented
- The technological study:
+ How to manufacture the product:
 Raw materials: The raw materials for the company's products under study
include cotton fabric, 4-way stretch fabric, khaki fabric, leather, thread, buttons,

23
 somi fabric, ... These materials will be purchased through suppliers in Ninh
Hiep - the largest supplier of fashion materials in North Vietnam. After being
purchased, raw materials will be transported to the outsourcing company's
warehouse.
 Because the company only operates in the form of online sales, it will not invest
in buying production machines and building factories. All machines will be
supplied by the outsourcing company, my company only pays for each batch of
finished products that my company places the outsourcing company to produce.
 On the premises of the factory is also provided by the outsourcing company
because they have built a factory to serve the production and processing of large
quantities of products of many different companies.
 Production workers will be provided by the outsourcing company, who are
responsible for producing products according to my company's orders, and they
will be paid the amount according to their contract with the outsourcing
company.
 The product samples after being designed by my company will be transferred
directly to the outsourcing company to produce some prototypes and demos.
After my company checks the quality as well as the perfection of the sample
products provided by the processing company, if the sample is satisfactory, my
company will close the quantity of the product to the processing company and
deposit in advance is about 30-50% of order value depending on product type
and order value. The batch of products, after being processed and manufactured
by the company, will be checked again by my company for quality, perfection
as well as inventory of the quantity of products as ordered. After all stages of
inspection are completed, the defective products will be left for the processing
company to fix, the qualified products will be transferred to my company's
warehouse for packing.
+ Adapt these means of production: Before deciding to mass produce any product, my
company will also research the market very carefully about the tastes of customers, the

24
needs of customers, the weather of each season, how much the company's budget meets
percent of customer demand, inventory level. .. My company will also do research on
customer preference for older products to see if samples are to be produced again. Getting
customers' opinions on the quality, color and design of products to improve shortcomings
and promote strengths in the company's products and services. My company will use the
following methods to estimate the sales volume of products to produce (These methods
can be applied in a pooled direction or individually):

 Market-based: Estimates sales based on expected market share goals:

First, estimate the volume of the total market, multiplied by the percentage (the
number of market shares this product wants to capture), from which we get the
expected volume volume.
 Market Size (Volume) x Targeted Market Share % = Targeted
Volume 

 Targeted Volume x Price = Gross Sales Value 

 Consumer behavior-based: Estimates based on customer behavior:

Based on purchasing or consumption related behaviors to estimate output &

sales.

Calculation:

Estimate the total number of individual buyers (if they are personal consumption
goods), or of household buyers in the market) and the percentage penetration
(Targeted Penetration%) that the brand can reach.

Then multiply these two numbers to get the number of buyers for the brand.

 Market Size (buyer) x Targeted Penetration% = Number of buyer

25
 Of this total, can be broken down by the volume they consume to reflect the
ability to buy, buy, or buy. For each group will be the average purchase volume
for a shopping trip, multiply the number of purchases in a year to get the total
output.

 Number of buyer x Average Volume per trip x Purchase frequency =

Targeted Volume

Then, we multiply the total output multiplied by the retail price of the product by
one product unit to calculate the Gross Sales.

 Targeted Volume x Average Price = Gross Sales Value

 Channel-based: Estimates based on retail outlet / distribution system

Calculation:

Do the survey at the level of the major dealers, major stores in the area, because
the total volume here accounts for the highest proportion.

Next, estimate the remaining percentage for the smaller and smallest stores.
Large - medium - small store rating criteria are often based on sales. From there,
determine the desired coverage for each group of these stores (Numeric
Distribution), to know the number of stores expected to cover.

 Market POS x Targeted Numeric Distribution% = Number of POS

Estimate the average weekly sales volume for each group of these goods, then
multiply by the number of sales weeks in a year (eg 52 weeks) to get the expected
sales volume.

 Number of POS x Volume per Week x Selling Period in Weeks =

Targeted Volume
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 Multiply the expected quantity of sales by the average retail price to get gross
sales.

 Targeted Volume x Average Price = Gross Sales Value

5.2 Organization
- Manager: Responsible for general management of all stages of the company, monitoring
of product completion, sales, signing contracts ... with experience and knowledge learned
in university I am confident that I can take over this position. Because in the first years,
hiring a really qualified manager is quite difficult and expensive for the cost, so in order
to minimize costs and be able to cover the performance of the company, I will be my
company manager

- Print staff: Responsible for sample printing to control print quality before mass
production.

- Packaging staff: Pack the finished product into the parcel according to the form of the
delivery company

- 3D graphic designer: Design 3D printed images on computers, design samples according

to company approved ideas,

- Online sales and marketing staff: Manage online sales channels, responsible for running
online marketing programs according to the company's plan.

- Salesperson at the store: Arrange goods at the store, sell directly at the store from 2nd
year on.

6. Business model and strategy

6.1 Business model
- Active area:

 Main resources: The company provides fashion products designed based on the
designs of major fashion brands in the world. Emphasis on product quality, unique

27
 design with distinct Vietnamese culture, building a highly recognizable brand
image thanks to the company's slogan and logo.
 Partner network: For the production stage, partners will be sewing factory, printing
factory, embroidery workshops. For suppliers, there will be wholesalers of fabrics,
threads, buttons ... The company will also collaborate with other local brands to
produce joint products that help both sides grow.
 Main activities: My company will come up with ideas for designing designs,
prints, clothing forms, clothing measurements ... After the company completes
designs, product specifications, prints, product information of my company. will be
transferred to outsourcing company. The outsourcing company will cut the fabric
chosen by my company, print the picture designed by my company on the product
with the size of my company's clothes. Since my company initially determined to
operate in the form of online sales, not direct production, hiring an outsourcing
company will save a lot of investment costs for machines and factories. The
products manufactured by the outsourcing company will be carefully checked by
my company to remove defective products as well as ensure the product's quality is
the highest as the company's standards. After checking, the finished products will
be transferred to the company's warehouse for packaging in the form of the
delivery company. After customers close orders, products will be delivered by the
delivery company to customers in the form of cash on delivery ( COD). The
product money after the customer receives the goods will be shipped to the
company account every week by the company.

- Product and service sectors:

 Fashion products for everyday use:Print t-shirts, coats, hats, pants, hoodie
 Products for sports: 4-way stretch T-shirt, socks, hat, sports pan.

+ Distribution channel: Online stores on e-commerce sites, social networking sites:

Facebook, Instagram ..., company sales websites, stores.

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+ Customer relationship: Always ask for customer feedback on product quality and attach
1 coupon for each customer feedback. Create promotions, draw them, and stimulate
buying from customers. Every time a customer is not satisfied with a product, we must
immediately apologize for the bad customer experience regardless of whether the fault is
the company or the customer, and then consider who the fault belongs to, if the error is
from company, the product will be exchanged completely free of charge, but if the error is
from the customer, it will explain in detail and give a coupon to the customer. For offline
stores, employees must always have a warm attitude towards customers, not be upset
when customers ask about products.

- Financial area:

 Cost structure:
 Fixed costs: store rentals, premiums, interest payments on bank and supplier
loans.
 The variable costs: Cost of raw materials, fees paid to the outsourcing
company, advertising costs, shipping costs ...
 Revenue: From selling company products, brand franchising

6.2 Strategy
- Focus on finishing the details of the product from the smallest details such as seams,
excess thread ... Building brand image through company logos, slogans to help customers
have the recognition of my company's brand everytime they see, hear or mention these
things. The company's reputation will be the core value that my company focuses on
protecting and building.

- Promote product marketing with beautiful images through online sales channels such as
facebook, instagram, company website, e-commerce sites. Advertising through
fashionista and celebrities to bring products closer to consumers.

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- Create promotions, discounts, give gifts to loyal customers as well as new customers
seasonally in the year to meet the increasing buying demand of customers, develop
revenue.

- Build a chain of standard and good customer care services that exceed customers'
expectations

II. MONTPELLIER BUSINESS PLAN

1. Product

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 These are my company's intended products, the range and variety of products will be
developed depending on the needs of the market as well as the development strategy of
the company in the future. I have consulted and researched from the sales websites of
several local brands and found that the products have high applicability as well as the
average price favored by the majority of customers, order volume and visits interactions
on these products are relatively large compared to other products. I also asked a few
questions about customers' preferences for fashion products on the Commercial
University campus and got the same results as above. I also find that these products are
discussed by many customers on social networking sites, e-commerce sites. The products
will be carefully planned in terms of the quantity to be produced, as well as which
products will be produced in which season to suit the market and the company budget.

31
 I've consulted Dirty Coins sale website - one of the most famous local clothing brand in
Vietnam. They have been active for many years in the fashion market for young people
therefore the products they recommend in their store have the research from the buying
behavior, the preferences of the customers. So I believe that when my company follows
the orientation of building groups of such products, it will also attract many customers.
And of course I only learned about the types of clothing products that Dirty Coin sells,
about the design of the products my company, I will do research to produce my
company's unique products and services.

2. Detailed sales for the 1st year and sales over 3 years:

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33
 Sales for the 1st year
The number of products I mention above is based on the capital that my friends and I
can turn around in the first year with a starting capital of around $ 10,000. During the first
year most of the revenue will be used to remake new products monthly. Based on buying
demand, the weather in Vietnam as well as special holidays, I notice that there are three
times when the purchase volume will increase the highest in the year: 1-2 months before
the traditional Vietnamese New Year(January and February), in June and July (entering
the hot season in Vietnam), August-October (the start of the cold season in Vietnam,
when students start school again after summer break). The number of products to be
produced and sold is researched by me from some local clothing brands, as well as
researching the needs of Vietnamese customers, buying tastes for each month of the year.
Since the cost of raw materials for each product is different, the quantity expected to be
produced and sold will also vary, for example, the cost of raw materials to produce a
backpack (mostly leather) will be much more expensive than the cost of making a t-shirt
(from cotton, velvet ...). This also leads to the differentiation of the cost of each product
based on raw material costs, processing costs, shipping costs, marketing costs ... Products
with low production costs will be produced in larger quantities than the rest such as socks,
T-shirts, earrings. As Vietnam weather is hot all year round in most regions of Vietnam so
T-shirts will be the core product that is most focused on both quality and quantity, it is
expected to be the key product of my company's. Products such as hoodie, pants, ao dai,
and socks will be produced according to the season and market demand (usually increases
34
strongly before and in the middle of the cold season as well as before hodiday).
Particularly, backpacks are produced a lot in August - October to serve the needs of
starting and returning to school after the summer vacation of all Vietnamese students
(September 5 every year).

35
36
 Sale over 3 years

In the second and third years in the form of online marketing, it is expected that the
company's instagram and facebook page will reach about 80k-100k followers, when there
is a certain number of loyal customers, brand recognition and trust of consumers.
Increasing the density as well as the intensity of product production will be boosted, next
year's revenue is expected to increase by 1.2-1.5 times compared to the previous year.
These figures were studied by me from Dirty Coins - a fairly famous local brand in
Vietnam and from website statistics sales and the number of products sold by a few online
clothing stores.. To ensure and expand production scale, most of the revenue of the
previous year will be reinvested in production in the following years. The number of
products expected to be sold in the second and third years is calculated based on the size
of the customer, the reputation of the company, the needs of the market, the brand
recognition ... (in a positive direction), excluding unforeseen negative factors (epidemics,
recession, natural disasters ...)

37
 Vietnam weather chart

Local businesses in Vietnam nowadays only show their followers index on their social
networking sites, not show the sales or the number of products sold in a year so I can only
estimate the number of the output of products will be sold each year by my company
according to the needs of the market, customer tastes, seasons in Vietnam. The number of
products as well as the type of products produced will be based on the weather situation
as shown in the table above.

Amount of money young people spend on monthly fashion products

38
 As the ratio on the table shows, the number of young people who can spend from
300,000 Vnd - 500,000 Vnd and from 500,000 Vnd - 700,000 Vnd accounts for the
largest proportion. Therefore, for my company's product selection strategy, I will research
closely with my partners to launch products in the 300,000 VND - 700,000 VND segment
that will be the main products of my company.

Frequency of young people buying fashion products

As the study in the table shows, young Vietnamese people tend to buy 1-2 fashion
products per month. This trend is not completely fixed, but can change from season to
season, month to month or major events. The research also shows that 52.8% of
customers often buy after receiving salary or when they have a lot of money, when there
are discount programs, it is also a factor that promotes spending of female customers,
male customers often buy when deemed necessary. Men are mainly concerned about
price, brand, women give preference to styles/designs, discounts/promotions and colors.

39
 The percentage of Vietnamese customers and especially young people choosing to shop
online accounts for nearly 50% and still tends to increase. Maybe due to the convenience
of online shopping, as well as the variety of models, the covid epidemic makes people not
want to go out to shop...This is the reason why this is why my business will not open an
original store in the first year to save costs and put all of our resources into developing
online sales, which are growing strongly like today.

3. Sale receipts

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 1st year

All customers who buy goods will pay in cash directly 100%, for customers who pay
cash to the shipper through the CoD (Cash on Delivery) form of the delivery company,
after receiving the money from the customers, the delivery company will transfer to my
company's account within a week and usually deduct about 0.8% of the collection fee.
Sale receipts table is not fixed but changes monthly depending on market demand,
weather, season, .. factors as I mentioned in the Sale table above.

41
 Collection fee in the form of CoD

Collection fee in Vietnam is applied by most delivery companies at 0.8% of the amount
collected and at least 15,000 VND/post.

42
 Over 3 years

In the following years, the CoD sales form will still be developed and applied
thoroughly because of its convenience and speed, helping to bring products to many parts
of Vietnam easily through the company. moved on. However, from the second year
onwards, when my company opens a store outside, the payment method will be fully paid
in two ways: one is to pay in cash, the other is to pay through a bank account. Regardless
of the payment method, the money will still be collected immediately, no delay.

4. Purchase costs on sale, detailed for the 1st year and over 3 years

Purchase cost on sale 1st year

The purchase cost on sale here will vary according to the number of products expected
to be manufactured and sold each month of the year. There are three points in the year
when purchase cost on sale will be highest are the first two months of the year, May +
June, from August to October based on the number of products expected to be produced

43
as I mentioned in the "sale of the 1st year" table. Purchase cost on sale with the largest
proportion will be money for raw materials. Purchase cost on sale of each product will be
different depending on the raw material cost of that product. Purchase cost on sale is
calculated and estimated to be around 20-25% of the sale depending on the type product.
The information on “Purchase cost on sales” in the table above was collected from several
websites specializing in the price of materials for the fashion industry, I also consulted my
mother - a person with more than 20 years of experience in the field of fashion clothing
maker in this regard.

Purchase costs on sale over 3 years

44
 The number of products expected to be sold will increase so purchase cost on sale will
naturally increase.But because of significantly increase sales in the second and third
years, I will negotiate with suppliers to reduce purchase cost on sale to about 15-20%.
Based on the average raw material price in the current Vietnamese market so I can
estimate a purchase cost on sale for the project.

The production cost of a shirt is only about 10-12.5% of the selling price of that shirt.
When the production scale is large, I can negotiate with manufacturers and supply raw
materials to get even lower production prices. Most of the costs will be spent on
marketing and sales, which I consider the most expensive part of a product of my
company.
5. General expenses: 1st year detailed month by month + over 3 years

45
 5.1. Administration & Management general expenses

1st year

The above table excludes general charges applicable to taxes, legal fees, insurance…
that are paid fixed on a monthly basis, the other general costs that vary according to the
proportion of products forecasted to be produced and sold each month during the year.
These costs I have studied from the website for administration & management services in
Vietnam. In the first year, these expenses mainly serve the management of e-commerce
stores, sales websites, and social networking sites of the company. In the first year my
company will not open a store due to the relatively large cost of opening a store in
Vietnam, especially in Hanoi, for a road surface fashion store to be relatively large
compared to a new business like my own, moreover, in the disease situation is not yet
controlled as at present, customers often do not spend as much time shopping in
traditional stores as before and because traditional shops are not open freely as before, but
have to depending on the epidemic situation and government decree so this greatly affects
the sales of a traditional store. The cost of opening a store during the first year can be
saved for production, advertising, brand marketing or for opening stores in subsequent
years as business progresses. Electricity and water costs are paid for the use of electricity

46
at the company's office, including office equipment such as computers, printers, lights,
fans, air conditioners... Cleaning supplies will include the cost of office cleaning
equipment, materials for washing and cleaning clothes. About the prices of the equipment
and services I will present below.

Over 3 years

As the number of employees increases, the quantity of goods increases, so the overall
cost of management and operations increases. From the second year on, my company will

47
start to hire and invest in a few small traditional stores to meet the needs of customers
who want to buy directly, as well as increase brand awareness and reputation for
company. I have consulted a few websites about the prices of the above services, I refer to
the prices in the period 2017-2020 from which to calculate the price increase rate of these
services plus the quantity of goods intended to produce, number of employees is
forecasted within the next three years of my company.

Average electricity tariff in Vietnam 2020

To calculate the power consumption, I apply the formula: A = P x t

- A: Amount of electricity consumed over time t

- P: Power consumption (in kW)

- t: Time (unit: h)

For a business the price will be $ 0.077 / 1kWh.

The power consumption items of my company can be listed as: Two laptops (160W), a
printer, two fluorescent lamps (18W), a fan (55W), a camera (15W). , a 3D printer
(300W), modem network equipment (10W), air conditioning(800W). On average, these
48
devices will operate continuously from 6-8 hours a day, and 28 days per month. The
amount of electricity I mentioned in the other table will only be the average consumption
depending on each month of the year due to the specific fashion industry in Vietnam, the
consumption of clothings have a seasonal increase or decrease, so the bill Electricity will
also be proportional to the customer's buying demand in different months. The summer
months consume more electricity also partly because the need to shop in a tropical
country like Vietnam for even larger summer products in summer also requires the use of
additional equipment such as fan, air conditioner. Especially in the two months before the
traditional Vietnamese New Year holiday and two months before entering the new school
year, the consumption of products and production demand will increase sharply, so
electricity consumption will also increase.

Water tariff in Hanoi 2020

My business uses water mainly for some needs such as sanitation, using water for steam
irons, cleaning facilities. So my water consumption is not too big, it will only account for
10-15% of total cost of Water & Electricity. As above is the water tariff for Hanoi area,
different areas will have different water rates according to regulations of water supply
company.

49
 Average price of cleaning supplies in Vietnam

In Vietnam, the price of sanitary materials is relatively cheap and has a wide variety of
models from house cleaning, computer equipment to special industrial sanitary supplies.
For my company, I only have a small office, so the cost for cleaning will not be too much,
only from 15-30 $ a month to meet the company's cleaning needs. And to save money, the
last month's supplies that have not been used up will continue to be reused for the
following month before buying new products. The price of a bottle of cleaning water is
about 2-3 $, the price of a cleaning tool is about 10 $, for cleaning water will buy a new
product after the old product is used up, and for tools The mop will still be reused until it
brokes. The cost for cleaning supplies will also vary from season to season, month to
year, according to how often the company operates.

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51
 Industrial property

In Vietnam Industrial property for the registration of a trademark or invention will be

about $ 50-100 depending on the item, for an invention, there will be an additional
maintenance fee of about $ 11 for the first two years and an increase of 60% each two
years. For my company, the trademark fee will only have to pay in the first year, the fee
for the following years will not be paid anymore. Fees for the copyright of product

52
trademarks, product designs will be paid immediately upon registration. Over time, the
cost of registering product ownership will increase as the company produces more and
more new products with different models. The prices shown in the price list provided by
the government are in thousands VND (1 $ approximately 23000 VND).

Insurance (incl. tax)

For a Vietnamese enterprise, types of insurance must be paid to the State such as health
insurance, social insurance, labor insurance Total businesses will have to pay the
insurance agency 32% of the total salary participating in social insurance, in which the
enterprises bear 21.5% and the employees bear 10.5%. If the employee signs a labor
contract with my company and has a term of less than 03 months, the amount of social
insurance premium is included in their monthly salary and wages. In case the employee's
labor contract has a term of full 03 months or more, my company will be subject to
compulsory social insurance for employees as prescribed in Article 2 of the Law on
Social Insurance. So in 1 year my company will have to pay the insurance agency 20.5%
x the total salary of the employees with labor contracts from 3 months or more.

53
 Accounting fees

Accounting fees for the fashion and service industry will be 1500,000 VND / quarter,
equivalent to 65 $ / quarter when there are no invoices and this fee increases gradually
according to the number of invoices declared by the business. total accounting invoice in
a year for my company is expected to be less than 61 bills so the total cost of the first year
is expected to be about 665 $, the following years will increase or decrease depending on
business situation.

Rent price list

54
 In the first year my company is not expected to rent a store due to the policy of
operating in the form of online sales to save costs of opening stores, for the sales office of
the company, I already have a This is provided by the family, so there will be no rental
fees for business office space. By the second year we plan to open a few stores in the
Hanoi area, which is the pavement area, near a few schools. The cost in these areas is
about 650 thousand VND -11.5 million VND (28 $ - 500 $) / month depending on the
area. Because the rental cost of the premises is always changing from year to year,
depending on the demand for premises and other objective factors, the expected rental
rate for the second and third year will be around 3000- 4000 $.

Duties and taxes

For businesses with charter capital <10 billion VND ($ 434782) will have to pay a
license fee of 2 million VND (87 $) / year. For businesses established after January 24,

55
2020, they do not have to pay the first year license fee, so I will only have to pay the
license fee of $ 87 / year for the following years.

Mail and telephone price list

In Vietnam, Viettel service is the most used and most widely used, so I will use Viettel
price as a benchmark to calculate the charges for mail and telephone. The cost of the
telephone to my company is mainly to call to close and confirm orders with customers as
well as to call for customer feedback on products and services on a quarterly basis. As for
the email part, it will mainly work in sync via email, so there will be no fees charged for
sending messages by the provider, but only for using the internet of that provider. The
cost for email and telephone in the first year is expected to be around $ 200-250, since
most of the services today are used over the internet, so it can cut costs quite a lot for
traditional communications services.

56
 Price list of delivery services

Price list of Grabbike passenger services

In Vietnam, moving mainly in the form of motorbikes will be convenient and much
faster than cars if only traveling in the city area, so I will get the price of Grapbike - the

57
largest passenger transport unit in Vietnam as the foundation. In the North, the minimum
fare for the first 2km is VND 12,000 ($ 0.5), the fare per km is VND 3400 ($ 0.15) and
the fare after the first 2km is 300 VND / Minute (0.013 $ / minute). Estimated every year
my company will give about $ 300 for travel, it could be moving between facilities,
meeting partners, ...

5.2. Production general expenses

1st year

At the cost of production, the company will not spend any cost to produce a product (in
terms of physical production) because the company will hire an outsourcing company to
help produce my company's products and my company will only have to pay labor fees
for that outsourcing company. The finished product will be transferred to my company's
warehouse for packaging, the packaging and small equipment & supplies cost here are
mainly the cost of purchasing raw materials for the packaging in accordance with the
form of the delivery company. Transportation costs may come from shipping costs from
the processing company to the warehouse, shipping costs for the company supplying the
raw materials. My company operates mainly in the form of online sales, so there is no
cost to leases in the first year. These costs also vary based on the number of products to
be produced per month, by season, which I mentioned in the first table. These costs are I
consulted on the websites of some local clothing brands in Vietnam.

58
 Over 3 years

In the next two years the company intends to still produce in the form of contracting to
the outsourcing company, our company is only responsible for the concept and sales. The
overall cost of production will increase proportionally with the number of products the
company plans to produce. The production cost is researched by me from the websites of
companies providing clothing outsourcing services in Vietnam.

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60
 Small equipment and supplies

The above is the price of some small essential equipment and supplies for my business
that will include some office desks and chairs, desk lamps, invoice printing equipment ...
The other price is for brand new products, but to save money the company will consider
buying some items at second hand markets but the quality is still good to help save budget
for other stages of the business. It is expected that the first year the cost for small
equipment and supplies will be around $ 300-350. In the following years, when
expanding the business model, the company may rent more offices and open stores so the
cost of small equipment and supplies will also increase.

61
Price of plastic packaging, carton packaging

62
 The product will be packed with a plastic packaging layer on the outside then put in a
carton box, all packaging will be printed with logo, company name as well as product
specifications. For the first year I plan to pack around 13000-14000 items so I think I can
negotiate with packaging suppliers to offer $ 0.01 for plastic and $ 0.15 for carton. In the
following years, the production scale as well as the number of products will increase, I
will be able to negotiate for a lower price. The number of products in the first year of
packaging is estimated to be about 14,000 items so the cost for the packaging will be
14000 x (0.15 + 0.01) = 2240 $, the second and third year are expected at 3360 $ and
6720 $ respectively.

Table of freight by truck

The above price list applies to transporting finished products from my processing
company to my company's warehouse. The distance from the company's warehouse to the
processing company is about 30km, the volume of each shipment will be about 100-
200kg, each month there will be 1-2 returns. Applying the price for the weight from 101-
300kg (2500VND/kg), assuming two returns per month, the average weight is about
150kg, each month will pay 150x2x2500 = 750000 VND (= 33 $), an average year will
have to spend between 400-420 $ on freight costs. Expected second year, third year will
be about 600 - 800 $.

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 5.3. Sales general expenses

1st year

To stimulate purchasing, my company will spend a lot of money on marketing,

advertising, and promotion activities, it accounts for most of the cost in this Sales table.
The cost of the event could be spent holding major ceremonies during the year on the
company's online platforms. The company will also spend expenses on cooperating and
trading with other local clothing brands in Vietnam to increase customer recognition for
the company, and develop together. The promotion fee will be spent on creating early /
late season promotions, big holidays in the year ... Advertising costs are spent on running
online ads on Facebook, Instagram, and e-commerce sites every month. These costs also
vary based on the number of products to be produced per month, by season, which I
mentioned in the first table. These costs are I consulted on the websites of some local
clothing brands in Vietnam and from the advertising price list of Facebook, Google, from
the advertising service price list in Vietnam. There are a number of tools on the internet
that provide tools to measure activity levels, metrics on marketing campaigns and pay
fees, which would be the cost I expected in the document section, besides that, the
documentation is also the necessary books and sales invoices.

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 Over 3 years

From the beginning, the company identified promotions and advertising as a core factor
in the company's strategy, so in the following years, the amount of money for these
segments remained at the highest level compared to the rest. The figures here are only
expected, but in fact, it is possible that the amount spent on advertising and advertising
may be significantly larger. To maximize the cost of this, all advertising programs or
promotions will be carefully researched by my company before launching to customers
because as long as the advertising campaign is not at the right time it will only be wasted.
without any benefit to the company. To obtain these figures I have consulted from a few
local clothings brands and found that their cost for this part is also distributed mainly in
three periods (first two months, May + June, August to October). I also refer to the price
list of some advertising services on advertising and marketing websites in Vietnam. Event

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expenses in the following years are spent on promoting the store as well as organizing
events to increase brand awareness when the company starts opening its first stores.

The cost of advertising services on Facebook

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 In Vietnam, Facebook is the most used social network with about 70 million accounts,
so I will use the price list of Facebook advertising services as a platform to calculate the
advertising costs that my company anticipates. In addition to Facebook, we also use
advertising services on other online platforms such as Instagram, Google. In the first year,
since we have not opened a traditional store, the selection of online advertising services
will be the preferred choice because it has many advantages over conventional advertising
as well as high convenience. The budget for each ad run will depend on the service
chosen by the company, the number of people the company wants to have access to, so
the cost of each ad will vary depending on the company's plan has worked out. My
company is expected to spend from 150 $ -300 $ on monthly advertising costs depending
on the months and seasons of the year. Months like 1,2,5,6 will be used more advertising
costs because those months will increase shopping demand and that is the season when
the company will launch new products. To optimize the amount for the ad, the budget for
each ad run will be broken down into $ 50-70 once and run for 2-3 days, is expected to
reach about 5000-8000 people, and there will be about 1000-1500 interactions with posts.
To create long-term customers, we will choose tracking ads, preferring the company's
sales page because once you have tracked the company's page, the following sales posts
will appear on the pages of these customers. without the expense of advertising for them.

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 Price list for events in Vietnam

My company plans to organize an annual event to announce a new collection for

customers, the cost for an event under 50 guests is about 5 million VND (about 217 $)
only the event room rental in Ha Noi. In addition, there will be decoration costs, snacks
and drinks for the attendees about $ 100 -200, so the total cost for a small event will be
about $ 300-400. One year, the company plans to hold 2-3 events to announce seasonal
collections (January - spring-summer, June - summer-autumn, October-autumn-winter).
The total cost of the event a year will be around 1000-1200 $.

Prices of papers and documentation

The types of documents the company needs to use in this business will include invoices
for selling products to customers, invoices for buying and selling raw materials, ... There
are also documents to keep the company's parameters and other indexes, but these
parameters can be stored directly on the computer, so there is no cost for the documents.
It is expected that the company will need about 2500-3000 invoices so multiplying by the
price of 0.18 $ will produce documentation costs about 450-550 $ in year one.

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 Promotion of DirtyCoins – Vietnamese clothings local brand

Every year, local clothing brands in Vietnam often have promotions at the end of each
season to sell the old season's products at a discount, usually decreasing by 10-30%
compared to the retail price. This helps to stimulate consumers with not too large budgets
to buy their favorite products, while also helping to liquidate products of the old season to
make room for new product inventory. Expected to spend about $ 1200 for promotion
divided in January, February, June and October each year. Promotional initiatives will be
carefully researched on the quantity of inventory, the need of customers to have the right
discount for each product group, and of course, the discount still ensures the product are
sold still profitable but at a margin lower than retail price.

5.4. R&D general expenses

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 R&D general expenses 1st year

Because it is a company in the field of fashion, not research and science, there is no
need for R&D costs.

R&D general expenses over 3 years

In the following years, my company still focuses on the fashion industry, has no
intention of encroaching on the field of research or lab, so there is no expense for this
item in the coming years.

6. Staff
6.1. Administration & Management personnel expenses and
gross salary disbursements

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 Administration & Management personel expenses for 1st year

In the first year I will be the general manager for all divisions of the company,
management salary as I mentioned it is only estimates if I hire a manager but since I take
the position I will be an unpaid manager. I think that in the first year, the funding for
maintaining operations as well as paying salaries to other departments is not much, so
thanks to the knowledge of management learned and practice thanks to the internship, I
am confident that I can take the management position aims to reduce the labor cost burden
for the company. The above figure I researched from the job website provides an average
salary wages list for new graduates of business and administration schools in Vietnam.

Administration & Management personel expenses over 3 years

Next year, if the business situation is good and the company's profits are large enough
to cover the employees' salary, I will hire a manager, in case the company still has many
financial difficulties, I will still assume this manager position. And The portion of the
salary I mentioned in the following years is still budgeted if I hire a manager, but if I take
this position I will still be an unpaid manager. The above figure I researched from the job
website provides an average salary wages list for new graduates of business and

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administration schools in Vietnam.

Administration & Management gross salary disbursements

The company's managers will be paid a fixed monthly salary and will be considered for
bonus / salary increase once a year at the end of the year. The above salary was
researched from a few garment factories, I also asked directly a few managers of local
clothing brands in the Hanoi area. For a new company like us hiring a manager with long-
term experience will be extremely difficult and costly, so my company has two options:
hire new graduates about 1 -2 years, secondly, or I will assume a managerial position for
the company until the business situation is stable and the budget is large enough to pay
the employees in this section. If I hire the staff I will pay as above but if I hold this
position I will be an unpaid manager.

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 Reference salary for new graduates

Being able to hire an experienced manager is relatively difficult because the salary paid
for a manager is relatively high compared to my company's budget so I will take the
managerial position in the early years. In order to manage and operate the company's
apparatus, when the business situation has stabilized, we will consider hiring managers
who are new graduates with high academic achievements and salary. Payable ranges from
250-380 $ / month.

6.2. Production personnel expenses and gross salary disbursements

Production personel expenses for 1st year

For the production position, the company will not need too much manpower because
most of the work is done by the outsourcing company, my company will only need the

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staff to undertake the printing of templates and demos before sending for the outsourcing
company and the packing staff of the finished products after the outsourcing company has
shipped to my company's warehouse. As for graphic designers, they will work entirely on
computers to design 3D drawings, design product samples before production. In Vietnam,
the human resources in these positions are quite plentiful because the staff need partime
work as well as many newly graduated designers so the recruitment of staff in this field is
relatively easy. The above salary I researched from the payroll of the website specializing
in providing jobs, especially part time jobs for students. Due to the nature of the job, there
is no need for employees to have a long-term commitment, so the company will hire all
part-time employees, depending on the quantity of goods to be produced, to be packed
then consideration for recruit staffs each time of the year. As above, the number of
packing staff will not be fixed, but varies depending on the quantity of goods to pack for
each season, more manpower will be needed during peak months. Employer charges will
be 22% and salary charges will be 11%

Production personel expenses over 3 years

Depending on the growth of the business, we will consider hiring more employees in
each category. As the company thrives, in addition to a fixed salary, we might consider
adding a commission bonus based on product completion to boost employee productivity.
In the following years, based on the business situation, the quantity of products to be
produced, my company will consider recruiting more personnel in the above areas,

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possibly recruiting long-term employees, not partime like first year. The above salary I
researched from the payroll of the website specializing in providing jobs, especially part
time jobs for students. When recruiting permanent employees in addition to the fixed
salary, they will receive a monthly bonus according to their ability to work, and at the
same time enjoy the full benefits of long-term employees according to the provisions of
the Vietnamese labor code. When hiring long-term employees, the company intends in
addition to fixed wages, to give employees a commission based on the number of finished
products to stimulate the morale and productivity of those employees.

Production gross salary disbursements

For partime employees, the company will only have to pay the salary based on the
salary / working hours as agreed with that employee, in addition partime employees will
not receive bonus or commission on the product. When hiring long-term employees, the
company intends, in addition to fixed wages, to give employees a commission based on
the number of finished products to stimulate the morale and productivity of those
employees. The above salary I researched from the website about job for students as well
as I have consulted the payroll of some local clothong brands in Hanoi area.

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 Average hourly wage in Vietnam
I refer to the website thichlamthem.com, the salary paid for an hourly packing staff is
about 20,000 VND / hour (0.864 / hour), because the packing staff does not require
qualifications or too much experience, so I will consider hiring packing staff to do
parttime at times of year depending on job requirements and quantity of goods to be
packed.

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 Salary of graphic design staff in Vietnam
The salary for graphic design staff in Vietnam is about 4990000 Vnd- 17200000 VND
(217 $ -748 $) / month, for the new graduate students, I can negotiate with the salary of
under 300 $ / month.

6.3. Sales personnel expenses and gross salary disbursements

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 Sales personel expenses for 1st year

In the first year the company will not need a sales staff in the traditional store cause my
company only opens our store in the second year, 1st year my company only need an
online salesman who specializes in managing the company's online channels such as
social networking sites, online stores, websites...This employee, in addition to managing
the online sales page, will finalize customer orders and then pass order information
through the packaging department. In addition to managing online channels, this
employee will also be in charge of running advertising and promotion programs on the
company's online channels. Because the position of sales and marketing is the core
position of the company, I would ask a close friend of mine who studied in the marketing
& sales department of Thuong Mai university to make sure that the position is working in
the best way. Employer charges will be 22% and salary charges will be 11%.

Sales personel expenses overs 3 years

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 In the following years, considering the business situation to recruit more salespeople,
sales staffs who meet the needs of my company, meet the basic sales skills, marketing
skills as well as use proficient in social networks. Next years after opening a store, my
company will need a manager as well as direct sales at the store. The traditional store
manager will have to ensure the operation and management of the store's inventory and
will also be the one to directly advise customers who come to buy directly at the store.
The above salary is researched from the payroll on the job website for students, and I also
asked about the salaries of the sales staff at some clothing stores in Hanoi. Employer
charges will be 22% and salary charges will be 11%.

Sales gross salary disbursements

In the first year I plan to give my staff only a fixed salary and consider salary increases
and bonuses at the end of the year based on productivity. In the following years, in
addition to the fixed salary, the salesman can enjoy additional commissions based on the
revenue that the employee sells, which helps the company to increase revenue, while
helping employees to have more income help increase employee productivity. Employer
charges will be 22% and salary charges will be 11%.

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 Basic salary of sales staff in Vietnam
According to market research from newsfindjob.com, the salary of a newly graduated
sales employee ranges from 4-8 million VND ($ 174 -348), I think I can negotiate to pay
employees. My business salary is in the range of 170-250 $ / month, because in addition

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to the basic salary I will have a bonus according to the actual working situation, when the
sales staff has enough experience, I may pay the salary. In the form of revenue
assignment, the product both stimulates working morale and increases revenue because
this is the way to pay wages according to the sales staff's actual working capacity. Salary
and daily salary calculation are expected to apply to both online and offline sales staff.

6.4. R&D personnel expenses and gross salary disbursements

R&D personel expenses for 1st year

The company does not operate in the field of scientific research or laboratories, so there
is no need for staff in this R&D.

R&D personel expenses over 3 years

In the following years, the company still plans to not operate in the field of scientific
research, so this R&D section will remain empty.

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 R&D gross salary disbursements

In the following years, the company still plans to not operate in the field of scientific
research, so this R&D section will remain empty.

Gross salary disbursements over 3 years

The salary paid to such employees in Vietnam may not be too high but also not low. In
my opinion, in order to retain good employees and maintain the company's operating
system, such salary is quite reasonable. Employer charges will be 22% and salary charges
will be 11%.

7. Investment
7.1. Administration & Management investment

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 Administration & Management investment 1st year

In my first year of Administration & Management, I will invest in two items:

surveillance camera and desktop computer. For the camera, it both works to manage the
warehouse, manage the staff in the office, and help me check the working progress of the
staff in the office when I'm away or not at the office. Computer is for storing company
data, controlling orders, controlling inventory quantity, managing employees ... In
Vietnam, the camera and computer supply companies provide a daily or monthly
installment payment, which means when I buy a product priced at $ 300, if I pay at the
time of purchase, I will have to pay $ 300 but if I choose the 3-month, 6-month, 12-month
installment, then the price of the item I plan to buy will be broken down according to the
period I choose but total final amount I have to pay to the supplier will be slightly higher

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than the retail selling price, this will be shown in the image below.

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 Price list of installment products

For installment purchases, I will have to pay at least 10% of the order value at receipt of
the product, the rest will be divided equally in the remaining months (here I choose the
12-month installment payment method. ). Each camera costs about 250 $, with 2 cameras,
the investment I spend on the camera will be about 500 $. This installment calculation
method is similar to that with a calculator, same term and monthly payment.

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 Administration&Management investment over 3 years

For good quality products, the shelf life can be up to 3-5 years, just repair and
maintenance during use. Therefore, in the second and third years my company will not
invest more in this amount but spend a budget for other development stages.

7.2. Production investment

Production investment 1st year

In the first year of production, my company will need a laptop dedicated to designing
good quality 3D graphics for graphic designers, which will help create 3D prints to send
for printing workshop, designing demo products before launching, designing website ...
An iron for flattening samples transferred by the printing company or processing
company. Graphic laptop products will be purchased in the form of 12-month installment
payment with the first month paying 10% of the order value in advance. With iron
because of its small value, you will pay immediately upon receipt of the product.

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 Production investment over 3 years

For good quality products, the shelf life can be up to 3-5 years, just repair and
maintenance during use. Therefore, in the second and third years my company will not
invest more in this amount but spend a budget for other development stages. The prices of
the products and services I refer to from a few suppliers' websites are as follows.

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 Price of graphic laptop

Laptop vendors also offer installment purchases through the bank accounts provided as
shown above. The installment term is often chosen by many people as 12 months, with
the first month paying 10% of the order value in advance, the rest divided by each month.
A graphic laptop can be used well for 3-5 years before having to replace a new one,
during use will be maintained and checked periodically to ensure the machine operates
well.

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 Price of steam iron

Steam irons have a value not too high, just under 25 $ / product, so my company will
pay directly for purchases instead of using installment payments like other products. A
steam iron can be used for 2-3 years, during use there will be periodic inspection and
maintenance to ensure its longevity. At this stage, I do not want to hire an outsourcing
company to do it both to save costs and for my staff to check the finished product right at
the time of ironing because when ironing, any defective or redundant parts will appear.
immediately so that I can correct the product in time to prevent a defective product from
being released on the market.

7.3. Sales investment

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 Sale investment 1st year

In the first year for customers to know my company’s brand, the company will focus on
investing in advertising programs on digital platforms, promotions that stimulate buying.
The programs will be spread over a year but focus mainly on three phases, also the three
seasons with the highest buying demand in the first year, 1 month before the traditional
Tet holiday of Vietnam (January), summer months (May and June) and autumn & winter
months (October). In addition to advertising on digital platforms, we will also hire famous
KOLs on social networks to take pictures of the company’s products and upload them on
their personal pages, it will help attract more customers who are fans or the followers of
those KOLs to know about my company’s product, my compay brand.

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91
 Ad cost on Facebook

Take for example the cost of advertising on Facebook is the most popular in Vietnam.
With a budget of only about 1 million VND (50 $) to run a product ad on Facebook for 5
days, it could reach 962-2.8k people / day, such a seasonal advertising company has It can
be divided to run ads many times with a budget of 50-100 $ each time. The bigger the
budget for advertising, the higher the number of people accessing the ad, but in order to
optimize the budget and optimize the people who access the ads are the right target
customers of the company, it is necessary to have a thorough study on the setup.
Customers, before advertising, choosing the right advertising area, the right age group,
customers want to reach so that they can optimize the efficiency of each ad run.

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 The price list once hires KOL to post advertisements on the personal page

As on the price list, one advertisement post on the KOL’s personal page is as low as 5
million VND, because the company budget is not too large, so each time you hire a KOL
post, you can only hire KOL with the photo level. Not too great, mainly famous faces on
social networks such as hotboys, hoygirls, fashionista. The budget for each KOL lease
will range from $ 200-300 / time.

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 Sale investment over 3 years

In the second year, the company will open a direct sales store, so there will be an
investment in store design. Investments such as and promotion will not be available in the
second and third years. Some of the materials needed for shop decoration will be listed
below.

Price of clothing hanger

Clothes hangers are what help to display all kinds of clothing samples in the store, for a
store of about 25-30m2 will need about 50-100 such clothes hanger. Assuming you can

94
negotiate with suppliers at a price of $ 0.1-0.2 / piece with a shipment of 150 clothes
hangers, the total cost to buy clothes hangers will be about $ 15-30.

Paints for walls

In order for the theme store to catch the eye and have its own features, it is necessary to
paint the store instead of having a boring cement color on the wall, the company will
choose bright tones that help customers easily see from a distance. and help make the
background stand out for products on display in the store. With a paint color priced at $
1.9-3.5 / kg, the store plans to paint two side walls, about 25-30 square meters on each
side, and a 4-kilo paint bucket, when mixed with water, will paint 30m2 / 2 coats wall, the
price of a 4kg paint bucket will be about 4x3.5 = $ 14.

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 Floor tiles

For each brick about 0.4m wide, to fill a 30m2 shop will need about 75 floor tiles, when
negotiating with a supplier for a price of $ 4 each, the total cost for floor tiles will be 75x4
= 300 $.

Advertising lamp price

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 In order for customers to immediately recognize the logo and brand name when passing
the store, my company will invest in additional advertising, it will help highlight the
details in the logo as well as my company name. The price of an advertisement lamp like
this ranges from 500,000 VND - 2 million VND (22 $ - 90 $) depending on the detail of
the information, the image on the lamp. My company will choose the $ 90 type.

7.4. Research & Development investment

Research & Development investment 1st year and over 3 years

Since my company is a fashion and service business, it is not related to science or

laboratory, so there will be no investment in this R&D part.

8. Depreciation
8.1. Administration&Management depreciation

Administration&Management depreciation 1st year

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 Straight-line depreciation method

Applying the straight-line depreciation formula:

Annual Depreciation expense = (Asset cost - Residual Value) / Useful life of the
asset. Fixed assets such as cameras and computers have an expected shelf life of about
3-5 years, so applying the above formula will be the easiest way to calculate the
depreciation of those items each year. Here the price of camera and computer is about
500 $ / item.

Administration&Management depreciation over 3 years

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According to the index in the table, after three years, both items will depreciate about
85% of its original value, while using them, the items will still be maintained and
repaired periodically to ensure longevity. as the process of operation is smooth.

8.2. Production depreciation

Production depreciation 1st year

Straight-line depreciation method

I still apply the straight-line depreciation formula to apply to the depreciation with
fixed items during production. Each item for this production stage also has an
estimated time to use about 3-5 years, the price of 3D graphic design machine is about
1000 $, for iron is 25 $.

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 Production depreciation over 3 years

After three years of use the amortization is calculated at approximately 85%. The
depreciation formula for these items still applies the straight-line depreciation formula
as I mentioned above.

8.3. Sale depreciation

Sale depreciation 1st year

For sales accounts, despite being an intangible investment, their metrics are still
displayed on the website, the number of visits, the number of people reaching the
advertising, promotion will still be accessible. and reviewable.

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 Sale depreciation over 3 years

The second year because there is an investment in the design and decoration of the
store, there will be a depreciation for this. Regarding the advertising campaign, promotion
is not an investment that can be held or touched as fixed assets (cameras, computers ...) it
is the advertising and promotion programs that help promoting brand name, stimulating
sales on social networking sites, e-commerce sites ... so after the investment in the first
year, if there are no new investments, it will be depreciated over time. about 85% less
time (this can be depreciation when reducing the number of visitors, reducing the number
of people accessing company websites). As for the store, over time to paint on the wall,
clothes hangers, lamps ... will be gradually old and depreciated at about 40%.

8.4. R&D depreciation

R&D depreciation 1st year and over 3 years

As I mentioned in the investment section, my company is not related to the scientific or

laboratory field, so there is no investment in R&D, so the R&D depreciation as shown in
the table is also 0.

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 9. Loan

Loan over 3 years

The bank loan will be a cash loan to serve the needs of production and import goods in
the first time, when the company starts to make a profit, it will no longer need this loan.
The rest are installments when buying goods for suppliers of office equipment, production
equipment ... These amounts have a normal maturity term within 1 year. In Vietnam,
product suppliers often quote the price as buying with 0% interest, but actually when
paying the full amount, the actual interest rate has been included in the selling price, I
have consulted the above research information on the internet to get the average interest
rate of equipment suppliers. Currently, thanks to new government regulations, banks often
have preferential interest rates for start-ups.

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 Installment laptop price

There are companies providing installment purchase services with low interest rates of
less than 2%, laptops with the price of 232 90000 VND and the difference in price
compared to when buying directly is 300,000 VND, which means only 1.2% difference, it
is also known as installment purchase interest rate compared to direct purchase is 1.2%.

103
To be able to purchase installments, the supplier company will require to leave ID card /
passport as security.

Installment desktop price

A computer set costing around VND 8.5 million ($ 370) can be negotiated with the
supplier for installment interest rates ranging from 1.39% - 1.66% compared to the direct
purchase price. There are two main forms of installment purchase: buying through a bank
and buying through a third credit company. To be able to purchase installments, the
supplier company will require to leave ID card / passport as security.

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 Vietnam bank interest rates

The most recent standard interest rate in Vietnam is 4%, with an interest rate of 4% /
year, the total amount payable to the bank for a 3-year term is about 2250 $. This interest
rate can increase or decrease depending on the economic situation and banks will have to
adjust accordingly. A bank loan requires mortgage of a house, land .... My company has
an office of about 30 square meters provided by the family that can be used as collateral
for the bank.

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10. VAT

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 Vietnam VAT rates

The average VAT rate in Vietnam is 10% for casual clothing like my company's. This
VAT fee is the charge on the value added of the product that will be paid directly by my
company to the state tax agency, but my company will not be the last subject to this VAT.
Consumers will be subject to this VAT, which is already included in the selling price of
the product, but we will not indicate that the guest is taxable, but only a fixed price for the
product. VAT = Total revenue on VAT invoices x VAT rate (10% for fashion)

11. Coperate tax

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 Corporate tax rates in Vietnam

As of the end of 2020, the corporate tax rate is recognized in Vietnam at 20%. In
Vietnam, the Corporate Income tax rate is a tax collected from companies. Its amount is
based on the net income companies obtain while exercising their business activity,
normally during one business year. A company's operating income is calculated by
deducting costs including cost of goods sold (COGS) and depreciation from sales. The tax
rate is then applied to create a legal obligation that the business owes the government.

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Corporate tax rules vary widely from country to country. The benchmark was used refers
to the highest rate for Corporate Income. Revenues from the Corporate Tax Rate are an
important source of income for the government of Vietnam. For fashion manufacturers
and their expected revenue of less than 20 billion VND (870k $), they will be subject to a
20% tax rate as regulated by the Vietnamese government. But my company is sole
proprietor so there is no corporate tax for sole proprietor.

12. WCR

WCR 1st year

In the first year, the total monthly inventory will be about 5076 $, which guarantees the
supply of products to customers for a month even if the demand for orders increases, it
will be in control of the order, or if every month, the demand for goods decreases, the
quantity of inventories is not too much. Every month, my company must pay suppliers for
raw materials, pay monthly installments for suppliers of equipment and supplies, this
amount is not fixed monthly but there is fluctuation depending on the quantity of goods
the company wants to import monthly.

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 WCR over 3 years

WCR is a financial metric that represents my business's available operating liquidity. In

addition to fixed assets, such as plant and equipment, the business I operate will need to
have various current assets. In order to ensure the amount of current assets at a certain
level, to keep the business going, my business will have to advance some business capital
into this type of asset, which is working capital. Revenue is calculated by the number of
products to be sold multiplied by the product's price, which I mentioned in the Product &
Sale table. There is some delay to pay tax, supplier, and customers pay cash so WCR
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variation is negative. Mobile production assets include: Fuel, raw materials, spare parts,
spare parts... to store production and all kinds of work-in-progress and semi-finished
products in the production process. Current assets include: Current assets such as
inventory waiting to be consumed, paid-in capital, cash capital, etc. Working capital =
Current assets - Current liabilities.

13. Financing plan

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112
 Initially, I would contribute $ 10,000 to start my company, Therefore, the data in the
two items “Total company equity” and “Total current accounts” will be 10000$ in the
first year. For R&D (capitalized production), my company is not active in science
research or laboratory, so the numbers in this section are all zero. In the first year when
the budget is limited, my company will need a few loans from the bank, the debt to the
supplier of raw materials, the installment debt when buying office equipment and supplies
is about $4200, in the firrst years. Once more profits and budgets have begun, the
company will no longer need those loans. There is some delay to pay tax, supplier, and
customers pay cash to WCR variation is negative. When totaling “Total company equity”,
“Total current accounts”, “Total subsidies”, “Total reimbursable advances”, “Loans and
Gross operating cashflow margin”, the result will be displayed in the “Total resources
section”. When taking "Total resources" minus "Total needs", we will get the data of the
"Resources - Needs" section. When adding "Resource - Needs" next year plus
"Cumulated ", we get the next year's Cumulated. And when taking "Cumulated" minus
"Gross operating cashflow margin", we get the data of Cumulated (excluding cashflow) as
shown in the table.

14. Cash flow

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 Cash flow 1st year

In the first year, revenues from the sale of the company's products will be reinvested in
production, sales and development of the company. I will contribute capital to have a
starting level of about $ 10,000. For bank loans, interest will be paid monthly according to
the rates I mentioned in the Loan table. The monthly cash flow fluctuates up and down
and is not fixed depending on the monthly business situation, market fluctuations, weather
changes, and consumer demand of the target group of customers. With positive cash flow

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in the first year, it will serve as a springboard for my company to continue to expand and
grow in the coming years. The repayment loans will be paid by my company to banks and
suppliers according to the negotiated and signed rates mentioned in the Loan table. I will
make an initial capital contribution of about $ 10,000, which is the basis for buying
materials, building the foundation of the company. For each month's Opening Cash
Balance plus the Cash Flow of that month, the following month's Opening Cash Balance
will be calculated. Increase / Decrease in cash will be calculated by monthly sales –
expenses. When adding up Opeing Cash Balance per month with Increase / Decrease in
Cash increments each month, Closing Cash Balance will be generated as shown on the
board.

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 Cash flow over 3 years

Initially, I would contribute $ 10,000 together to start my company. The loan can come
from borrowing a family member, negotiating with suppliers about the purchase of a pay-
per-month product at a negotiated interest rate in accordance with their company's rules.
Major investments for the first year include camera ($ 500), computer ($ 500), 3D graphic
design machine ($ 1000), iron ($ 25), advertising campaign ($ 1100), promotion ($ 1100).
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), for the second year, there will be an additional investment (1000$) in decorating the
store since the second year my company will open a traditional store in Hanoi. I will
contribute capital to have a starting level of about $ 10,000. For bank loans, interest will
be paid monthly according to the rates I mentioned in the “Loan” table. Repayment of the
loans is paid over the course of the three years at the rates I have indicated in the “Loan”
table. The cash flow will run into my company mainly from the business of selling its
products. In the opening cash balance section, I have an initial capital contribution of
about $ 10,000, each with this initial contribution plus the cash flow during the first year
will open the cash balance for the second year, Continuing with this formula will generate
opeining cash balence for the following years. In all three years my company's Increase /
Decrease in cash indexes were positive. Take the increment of cash in each year plus
Opening Cash Balance to get Closing Cash Balance every year.

15. Profit and lost

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 Profit and lost 1st year

The number of products expected to be sold in the first year differs from month to
month due to the influence of seasonal weather in Vietnam and seasonal buying demand.
It is expected that all profits will be reinvested for the expansion of production scale, also
opening stores in the following years. The company's revenue will change up and down
each month and season in the year depending on the needs of customers, product
promotion campaigns ... The cost of purchasing raw materials in year one on average is
about 14% of total sales, the percentage of total purchase is mentioned in the Product
table. The monthly quantity of material purchases does not keep the same, but fluctuates
up and down depending on the company's plan for the number of products to be produced
by season, month of the year as planned or divided by three. season I mentioned in the
tables above. The cost of hiring production staff in the first year is about $ 9638, the
monthly rent is also different because there are peak months that require more workers

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than I will hire partime workers in the stage requires a lot of manpower, not much
experience. Salary expenses for sales staff will be fixed every month. Except for the
salary of most employees, which is fixed for each month of the year, other items such as
the cost of buying raw materials, costs for sales, production, etc. fluctuate up and down
depending on development strategy and the number of products produced according to the
season of the year as I mentioned in the table "Sales". After deducting taxes, the first year
of revenue will be obtained after tax profit equal to about 64.92% of total sales.

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Profit and lost over 3 years

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 In the following years, due to the increasing demand for products, I will negotiate with
suppliers to reduce raw material costs, and also negotiate with outsourcing companies to
reduce production costs of finished products. The profit of the next year is expected to
increase about 1.5-1.8 times compared to the previous year, by the marketing strategies
promoted strongly through the company's exclusive channels on digital, e-commerce and
social networks, as well as having built a certain number of followers, also with a loyal
customer base, I think the revenue growth of 1.5-1.8 times compared to the previous year
is within the company's ability. After overcoming the most difficult step that is to gain
trust, customer trust as well as creating a relative brand awareness, it will be much easier
to increase production and stimulate consumer consumption compared with the first year.
"Purchase" here will include the costs needed to produce the product on average 15-20%
of the revenue, in the following years when the company expands the product scale in
quantity, My company can negotiate with suppliers for a lower cost ratio. The costs of
"purchases" will not be fixed but change from month to month of the year depending on
the estimated production plan for each season of the year, customer needs, and company
strategy. As for the staff as I mentioned in the "Staff" table, the cost of production staff
will increase year by year due to the increase in the number of employees according to the
production scale, the employer charges is 22% and salary charges is 11%, the number of
employees will be fixed in each year except for the packaging stage where we mainly hire
part-time workers depending on the demand and the number of products to be processed.
Gross margin is the difference value of sales to the market and costs for that product or
deducting costs related to creating products, costs of providing services... so gross profit
here can be understood as the profit earned after deducting the cost of goods sold, also
known as net revenue. I apply the formula: Gross profit margin = Revenue – Cost of
goods sold, Gross profit margin (%) = Gross profit / Net sales, in order to calculate Gross
profit margin and it’s proportion. In the sale section, the salary paid to employees also
applies Employer charges of 22% and Salary charges of 11%, the number of sales staff as
I mentioned in the "Sales" table is 1 salesperson in the first year, in the second and third
years there will be 2-3 employees for this section. Expense in the sale section will include

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expenses for advertising campaigns and promotions, others... in the first year on social
networking platforms, e-commerce channels and costs of organizing promotional events
for traditional stores in the second year, My project is a business that specializes in sales
and fashion, so there will be no expenses or money for this R&D segment. For the
Administration & Management section, the staff salary will be expected if I hire outside
managers, but to save costs, I find myself capable enough to take on this position, during
the development process. When developing a project, I will ask experienced people to
comment and evaluate to see if I can perform as a manager, if not, I will hire an operation
manager. General expenses of the Administration & Management section include sections
such as electricity and electricity, cleaning supplies, accounting fees, mail and telephone,
administrative supplies... The Total Management & Administration amount is calculated
by adding the total administrative staff salary plus the general expenses of management &
administration plus depreciation. Total operating expenses increase year over year
according to the size of the company's production, but its ratio to revenue tends to
decrease due to increasing sales and the strongest increase in the third year. Profits in the
second and third years are expected to increase steadily thanks to the expansion of
production scale, as well as because the investments in facilities in the first year have
been stable and there is no need to continue to invest in the following years.

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