TAILORED TRADES: JUST CLOTHES

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

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TABLE OF CONTENTS
EXECUTIVE SUMMARY
1. ACCOUNTING

3
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

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
4.1.
4.2.
4.3.
4.4.

14

BUDGETING & FORECASTING

BOOKKEEPING
REPORTING
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

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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 postconsumption 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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