tailored trades final draft

TAILORED TRADES: JUST CLOTHES

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Tailored Trades, LLC: A Business Narrative Prepared for: Current and Prospective Investors

Prepared by: Gregory Duncan, Jan Ten Eyck, Shenyu Chen, Dylan Craig

May 1, 2015

Tailored Trades, LLC A Business Narrative | !1


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TABLE OF CONTENTSEXECUTIVE SUMMARY 3 1. ACCOUNTING 5

1.1. ORGANIZATION 1.2. ASSETS & LIABILITIES

1.2.1. ACCOUNTS PAYABLE & RECEIVABLE 1.2.2. INVENTORY 1.2.3. PAYROLL 1.2.4. FIXED ASSETS

2. INFORMATION SYSTEMS 8 2.1. STRATEGY 2.2. ORGANIZATION

2.2.1. INFORMATION TECHNOLOGY & MAINTENANCE 2.2.2. RESEARCH, DEVELOPMENT & SYSTEMS INNOVATIONS

2.3.MANAGEMENT 3. MARKETING 10

3.1. STRATEGY 3.2. MARKET RESEARCH 3.3. PRODUCT DEVELOPMENT

3.3.1. COMMERCIALIZATION 3.4. COMMUNICATIONS 3.5. SALES SUPPORT & CUSTOMER SERVICE 3.6. EVENTS

4. FINANCE 14 4.1. BUDGETING & FORECASTING 4.2. BOOKKEEPING 4.3. REPORTING 4.4. PAYABLES & RECEIVABLES

5. SUPPLY CHAIN MANAGEMENT 17 5.1. ORDER FULFILLMENT 5.2. MANUFACTURING FLOW 5.3. SUPPLIER RELATIONSHIPS

6. HUMAN RELATIONS 19 6.1.EMPLOYEE RELATIONS

6.1.1. COMPLIANCE 6.1.2. COMPENSATION & BENEFITS

6.2.SAFETY 6.3.NEW & PROSPECTIVE EMPLOYEES

6.3.1. RECRUITMENT 6.3.2. TRAINING & DEVELOPMENT

CONCLUSION 22



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EXECUTIVE SUMMARY Tailored Trades, LLC, along with its subsidiaries, may herein be referred to as the Company.

Who We Are Tailored Trades is a custom clothing company that makes and sells apparel to large groups and organizations for special events and one-time functions. The Company operates with a unique aspect in that it offers to buy-back clothing after use for a percentage of the original price. This buy-back system will allow Tailored Trades to reuse clothing as well as donate clothing to nonprofits, charities, and those in need. Tailored Trades cuts costs by reusing clothing, while customers are not left with lots of useless apparel in their closets (and they also save some money by trading in clothes).

Our Mission & Values Mission Statement: Tailored Trades: To provide quality clothing not only to those who want it, but also to those who need it.

Values Statement: Commitment to providing a fair and affordable clothing service through recognition of social responsibility, honest business, fair pricing, and loyalty to our customers.

It is from these two statements that Tailored Trades has formed its mantra: Just Clothing. The mantra breaks the Companys vision down into two words. Just because Tailored Trades places immense importance on doing the right thing by our shareholders and stakeholders, and Clothing because manufacturing and distributing clothes is simply what Tailored Trades knows.



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Why Us? The concept of Tailored Trades stems from the Industrial Revolution, when the clothing and textile industries were fundamentally changed to be able to better serve the consumers of the modern world. Tailored Trades aims to once again change the way people look at buying clothes, by offering quality products and innovative means of service, all while remaining conscious of the impact we make, not only in economies, but also in communities.

Why Now? In looking forward for Tailored Trades, the Company see its shareholders as a quintessential component. Tailored Trades understands that its vision is nothing without its shareholders, and is determined to provide a beneficial atmosphere for all involved parties. An important aspect for this desired success is the cross-functionality between the six different departments of the Company:

Accounting Information Systems Marketing Human Relations Supply Chain Finance

This narrative will explain these six functional areas and their relationships with shareholders along with other involved stakeholder groups, so that current and prospective shareholders may gain a more holistic understanding about the present state and the direction of Tailored Trades.



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1. ACCOUNTING 1.1. ORGANIZATION

The accounting department at Tailored Trades is divided into external and internal auditing teams. The internal team is headed jointly by the CEO and CFO and their main purpose is to work closely with other the other departments to identify certain cost drivers, so they can improve internal processes. Low costs, high efficiency is the motto that the team abides by each day.

Tailored Trades believes that its values-based internal auditing team is a key component to the governance of the Company as a whole. The monitoring of daily business process trends creates valuable data that can be used by senior management to identify, control, and manage risk wherever it may be. The internal auditing team is picked carefully and each member is required to know Tailored Trades inside and out, so that they can be approached for valuable advice when it comes to risk management.

Corporate governance is another important metric of Tailored Trades on which the internal auditing team focuses. Tailored Trades views corporate governance as the policies and processes that are used to achieve objectives (both personal and team goals) and to protect the all of our stakeholders interests; all within the guidelines of our ethical standards.

Tailored Trades also hires an external audit team each month. Their focus is on the financials of the Company: to make sure that the balance sheet and income statements are a fair representation of the Companys financial standing. Tailored Trades lets the shareholders choose the external auditing team, as it is their interests that are being primarily protected.



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1.2. ASSETS & LIABILITIES 1.2.1. ACCOUNTS PAYABLE & RECEIVABLE

Accounts Payable will be higher in Tailored Trades first full year of operations because the allocation of cash disbursements for expenses will be split by percentages.

Tailored Trades minimizes its production costs and increases efficiency by outsourcing its production. Raw materials will be purchased quarterly and 30% will be paid for in cash at the time of the sale while the other 70% will be on credit to be paid for in the following month. This leaves the Company with a higher contribution margin at the end of each production period, which helps to forecast future expenses.

After analyzing the projected yearly expenses along with the available cash balance per quarter, the accounts manager has suggests the Company maintain a high balance. The high balance in the cash account will allow us to make proper investments in equipment, labor, materials, etc. contingent upon actual performance. Overly allocated cash to the wrong areas of the Company could cause huge losses to operating income and would also hurt investors.

Sales will be collected as a split percentage between quarters. The accounting department expects to collect 75% of sales in cash at the time of the sale. Tailored Trades expects 25% of sales to be on credit, which will be collected in the following quarter.



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1.2.2. INVENTORY As a measure of keeping low costs, the minimization of inventory is essential. Tailored Trades outsources its production and excess inventory at the end of each quarter will be sold back to the supplier from which it was purchased.

1.2.3. PAYROLL Tailored Trades pays its entry-level employees a flat rate of $15 per hour. An average of 2 hours of direct labor is needed for each order. Tailored Trades plans to have around 300 employees on the payroll at the beginning for the first quarter of the current fiscal year.

1.2.4. FIXED ASSETS Tailored Trades fixed assets consist of delivery trucks, a warehouse and other land, computer software, and computer systems. The Company is able to lease delivery trucks from Ford with a large discount. Internal accountants performed differential analysis on a number of different options and concluded that this option was the most profitable and least costly method of acquiring our delivery trucks.



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2. INFORMATION SYSTEMS 2.1. STRATEGY

Tailored Trades realizes that technology is changing at an extremely rapid pace. The Company is eager to keep step within an ever-changing environment and is committed to utilizing industrial science to expedite all departmental processes, both internal and external.

2.2. ORGANIZATION The organization of the Companys Information Systems department is two-fold. The first branch is focused on information technology & maintenance, while the second is fixated upon research, development & systems innovation. The entire department is overseen by the information systems manager.

2.2.1. INFORMATION TECHNOLOGY & MAINTENANCE Information technology & maintenance is headed by the database administrator (DBA). The DBA is responsible for handling company-wide troubleshooting and other technological issues. The DBA is aided by several IT consultants and technical support officers. Tailored Trades also employees a full-time network engineer, who is responsible for designing and implementing network proxies, firewalls, and other safeguards to the integrity of the Companys network. Furthermore, a multimedia programmer works jointly with the Information Systems and Marketing departments to generate and implement systems design concepts.



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2.2.2. RESEARCH, DEVELOPMENT & SYSTEMS INNOVATIONS In the research, development & systems innovations (RDSI) branch, Tailored Trades employees a systems analyst and a systems developer. The analyst works with existing programs and processes to create new IT solutions and augment current systems. The developer is a technical expert that writes and tests new code for the Companys information systems. They work hand-in-hand with Marketing, particularly on web design and development efforts.

2.3.MANAGEMENT Integral to the Companys success, information systems is truly the behind-the-scenes force that drives Tailored Trades. To better serve our shareholders, great emphasis is placed on effective, efficient maintenance and development of the Companys information systems. Management works hard, day and night, to provide seamless transitions from one business process to the next. This dedication goes a long way to protecting the interests of Tailored Trades shareholders, along with providing a no added stress environment for the Companys employees.



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3. MARKETING 3.1. STRATEGY

Initial focus is on college organizations, but Tailored Trades will look to expand concentration to community events, fundraisers, and business functions. The 18-24 demographic can serve as a strong base audience, and we feel this focus on college organizations will keep us close to our business foundations.

3.2. MARKET RESEARCH Ongoing market research is being conducted regarding the current atmosphere of the local (southwestern Ohio) market. This research includes findings on potential customer demographics and financial situations of nearby competitors.

3.3. PRODUCT DEVELOPMENT Tailored Trades product line is centered around its original product, the t-shirt. The t-shirt is an article of clothing which has stood the test of time, having acted as a global staple of apparel for several generations. Simple, useful, and versatile, the t-shirt will continue to play a large role in the direction of the Company. Tailored Trades marketing and advertising efforts will reflect this role.

While the Company hopes to always stay true to its initial vision, Tailored Trades is always pursuing ways to innovate and to make a mark on the clothing & textile industry. By abstaining from pursuit of new and product development initiatives, Tailored Trades would be doing a disservice to its shareholders, and therefore would be straying from its objective as a firm.

3.3.1. COMMERCIALIZATION The Company is dedicated to delivering new products and product improvements, and looks to do so in a trendsetting, leading-edge manner. In the near future, Tailored Trades looks to unveil several new products including formal dress shirts, neckties, sports team uniforms, and an assortment of hats.


* www.tailoredtrades.com is not a real website and clicking the link will result in a webpage is not available error.


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3.4. COMMUNICATIONS As a firm, Tailored Trades prides itself on its commitment to objectivity and transparency. These qualities are implemented through a number of mediums, including post-consumption surveys, social media, and online newsletters.

The Company offers several ways for customers to give feedback about products and services. Optional post-consumption surveys are mailed electronically to customers. These surveys inquire about product & service quality, employee interaction satisfaction, and overall content of business transactions. Additionally, various social media outlets, including Facebook, Twitter, and Foursquare accounts are in place to deliver modern, instantaneous communication between company management and stakeholders.

Monthly newsletters are sent to past customers, which detail current events, policy changes, and other updates regarding Tailored Trades. These newsletters are also posted online at www.tailoredtrades.com*, where they can be viewed either as Microsoft Word documents or as PDFs.

3.5. SALES SUPPORT & CUSTOMER SERVICE Tailored Trades is continuously striving to better serve its customers. Through sales support and customer service, the Company aims to resolve any and all questions, concerns, or problems that customers are experiencing.



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Tailored Trades knows that customers value both their money and their time, and so the Company aims to reflect that sentiment. Every member of the sales support team is well-trained to give customers honest, informative advice. The Company also employees a full-time team of customer service representatives, which is headquartered in the United States. Tailored Trades keeps this team domestically located to keep American jobs and to keep customer-employee communication as simple as possible.

While cutting costs to maximize shareholder interests is the Companys predominant objective, Tailored Trades stands firm on the belief that corners shall not be cut in customer service. By maximizing the Companys ability to serve its customers, these customers will in turn share their loyalty and commitment to the Company. In the eyes of Tailored Trades, nothing is more valuable than happy, loyal customers.

3.6. EVENTS Tailored Trades is unmatched in its commitment to the community. As such, a number of events are held each year, both locally and nationally, which invite the public to take part in Tailored Trades mission.



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Clothing drives are sponsored in various local venues on a weekly basis, where organizations are encouraged to sell back or donate their Tailored Trades merchandise. At these drives there are opportunities to meet-and-greet executives of participating nonprofit organizations as well as individuals who have been helped by Tailored Trades donations in the past.

The Company holds its Annual Shareholders Summit in Cincinnati, Ohio each September to address Tailored Trades accomplishments in the last twelve months. The summit also details the direction of the Company for the next twelve months. While a large portion of the summit is geared toward current shareholders, the event is open to the publicprospective shareholders are encouraged to attend.



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4. FINANCE 4.1. BUDGETING & FORECASTING

The Company has prepared a master budget in which it used forecasted sales and costs. In the first year of operations, this budget will help Tailored Trades to see where it is doing well and where it needs to be more efficient. The senior managers rely heavily on the planning budget to measure performance and to make decisions.

At Tailored Trades, managers execute quarterly and annual performance reports using the data in the planning budgets and the actual results. Tailored Trades actually has a performance analysis team whose purpose is to look deeply at the variations between the planned budget results for a period and the actual results for the period.



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4.2. BOOKKEEPING Here at Tailored Trades, the accounting and finance teams use a double-entry bookkeeping method. This method in the accounting system is used to find and correct errors. With the double-entry system, each financial transaction performed throughout the company will be recorded in the general ledger with entries to 2 accounts.

For example, if the Company rents to an organization using the percentage cash/credit collection method, Tailored Trades would post the cash amount collected along with the credited part of the sale to accounts receivable, which would be collected in the following month. This assists accountants in tracking cash flows during operations. It also helps with performance and budget analysis at the end of each quarter and annually.



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4.3. REPORTING Financial reports are performed at the end of each quarter as well as annually and are done by the external auditing firm that shareholders choose to hire. The Companys financial activity is regulated by the SEC and it abides by all GAAP (Generally Accepted Accounting Principles).

The external auditing team is briefed at the end of each quarter by the CFO and accounting team about the quarters performance. This briefing is very important because it allows accountants to recognize any mistakes and correct them before any government regulation is enacted by the SEC. Tailored Trades owns ERP software that the highly talented IT team has created, and this helps reduce labor costs by automating calculations and formatting of financial statements.

4.4. PAYABLES & RECEIVABLES As stated before, the Company uses a percentage cash/credit method for accounts payable and accounts receivable. Cash flow management is of utmost importance for the accounting department, so that investors receive the highest ROI possible, so Tailored Trades can make sure customers are actually paying for services, and that Tailored Trades is on top of any payments that are to be made to suppliers. Tailored Trades has a grace period policy that allows customers to take advantage of if they can not make payments on time. The Company allows a 3-month grace period to these customers; however, they must make their payment in full by the end of the 3 months or else late fees are charged. For the reporting of these receivables, the Company puts them in a special account called Graced Accounts Receivable and this is monitored by the accounting team along with any other payables and receivables.



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5. SUPPLY CHAIN MANAGEMENT 5.1. ORDER FULFILLMENT

Tailored Trades is a high volume, low inventory company that provides large groups and organizations with clothing and costume products. The company as a whole believes that a low volume inventory will be an easy way of keeping costs low during the beginning of operations. Customers have the option to place orders online or through our mobile application. The Company will not offer the option for phone orders because that creates an excess cost that can be easily avoided.

The IT departments of the Company and its suppliers have collaborated to create an application that sends orders placed by customers directly to the supplier, so that orders can be fulfilled more quickly. This takes out the cost of labor and equipment that would come with the offering of phone orders. Tailored Trades has analyzed the clothing rental services industry and has found that there has been little to no technological growth over recent years. The development and implementation of this mobile app could create higher profits and rapid growth for Tailored Trades by opening new customer segments and bringing competition to our competitors.



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5.2. MANUFACTURING FLOW Tailored Trades does not directly manufacture its products; however, the Company does stay in close contact with suppliers to make sure that all orders are on track and that they have the necessary resources to fulfill those orders. The mobile ordering application will simplify operations for the supplier, Tailored Trades itself, and most importantly the customer.

5.3. SUPPLIER RELATIONSHIPS The CEO of Tailored Trades has taken it upon himself to maintain a strong, positive relationship with our suppliers. This sentiment has created a trickle-down effect in the Company, and the upper-management of Tailored Trades keeps in close contact with business partners.

The Company considers its suppliers as extensions of the Company itself. As with all stakeholders involved with Tailored Trades, the Company vows to treat its suppliers with the utmost respect, loyalty, and fairness.



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6. HUMAN RELATIONS 6.1.EMPLOYEE RELATIONS

Tailored Trades views its employees as a critically important market stakeholder. The relationship between employees and management is one that requires responsibilities on both sides to be successful.

6.1.1. COMPLIANCE Employees of Tailored Trades are expected to maintain the highest standards while dealing with management and with customers. All employees are restricted from abusing any sort of drugs which would impair their ability to perform on the job. Additionally, all company devices, including cell phones and computers, and any data contained on these types of devices, are considered property of the Company, and therefore permissible to be presented to the public, for reasons of transparency.

Employees follow a code of conduct every single day, and a major part of this code is treating customers in a fair, honest, non-discriminatory way. This is a reflection of the values Tailored Trades holds as a company: recognition of social responsibility, honest business, fair pricing, and loyalty to our customers.



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6.1.2. COMPENSATION & BENEFITS Tailored Trades stands to offer fair wages to all employees. In return, Tailored Trades expects its employees to emulate this fairness by coming to work prepared and on time. The wage system for all entry-level employees is characterized by a $15 per hour pay rate.

Tailored Trades also provides merit-based incentives to employees who show outstanding performance and commitment to the Tailored Trades mission. To provide employees with full security, the guarantee of a safe work environment, and peace of mind, Tailored Trades offers employees an array of insurance and benefits packages.

6.2.SAFETY Whether its regarding employees or customers, safety is a serious concern at Tailored Trades. At Tailored Trades employees are encouraged to be proactive regarding injuries in the workplace and knowing how to prevent them. In the safety training program new employees are also educated on customer safety and steps that should be taken if an accident occurs.



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6.3.NEW & PROSPECTIVE EMPLOYEES 6.3.1. RECRUITMENT

When it comes to recruitment at Tailored Trades, there are high expectations for prospective employees. For any management position, at bare minimum, a bachelors degree is required. For anyone applying for a sales position, all that is required is submission of a resume and cover letter. Because the company is based out of Oxford, Ohio, a majority of the applications will come from college students. Tailored Trades requests a resume to see any experience that college applicants have, whether it is the classes they are taking or any previous job experience.

6.3.2. TRAINING & DEVELOPMENT In order to ensure employee safety, Tailored Trades emphasizes the importance of training for employees. The companys training program includes shadowing an employee with tenure, proper machine handling, and completing a written workplace safety test, along with an online safety program.



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CONCLUSION Tailored Trades is proud to provide reliable goods and services for its customers. The company prides itself not only on satisfying customers, but also making a positive impact on the community. As an emerging company, Tailored Trades sets its sights on always improving and expanding. Every decision made within the company takes into account the impact it will have on all shareholders and other stakeholders. Operating by the ethics of good business, Tailored Trades will continue improving the goods and services it provides to consumers and to the community.

Shareholders are the backbone of Tailored Trades, and should be respected as such. Everything the company accomplishes is not possible without the support of its shareholders. In order to remain successful, the company must communicate well with shareholders, keeping their interests in mind at all times. Having a good relationship with its shareholders is of paramount importance,because it will allow Tailored Trades to be more efficient in its decision-making and it will allow business to run more smoothly. For all of the dedication and support given to the Company by its shareholders, Tailored Trades expects, in return, to make good on shareholders investments, and to also give shareholders good reason to keep investing with Tailored Trades.


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