Business Plan: “Rainbow” company

 
 
 
 
 
 
 
 
 
 
 
 
 
 

Business Plan:

“Rainbow” company

 

A start-up plan for a business of handmade jewelry production 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Kyiv - 2011

Plan

Resume……………………………………………………………………………………...3

1. Company: Current position and Future ………………………………………………4

2.   Product………………………………………………………………………………..5

3.  Marketing research……………………………………………………………………6

4.   Marketing plan………………………………………………………………………..9

5.   Production plan……………………………………………………………………….12

6.   Organizational plan…………………………………………………………………..13

7.   Financial plan…………………………………………………………………………16

8.   Risk evaluation………………………………………………………………………..18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Resume 

Rainbow is a start-up business, which produces unique handmade jewelry. It is located in Kiev. The company plans to build a strong market position all throughout the country, due to the weak partners' industry and good access to the huge amount of a raw material in the area.

Our company suggests using quality raw materials. Our main competitors will be producers working in this business for longer time, those who got image and customers, promote their business for a long time.

Our production is really various – earnings, pins, bracelets and pendants – aimed at reaching different target markets – different segments of final consumer.

Rainbow will locate its office in a rented apartment in Kiev, and production lines will be based at the same place in separate room.

Rainbow aims at offering its products at a competitive price to meet the demand of the middle-to higher-income local market area.

The following business plan will provide the following information:

1. Company's current position (tendencies of current industry, customer needs that are being satisfied, geography of the business, founders and partners of the company, strategic targets of the firm, tactical aims)
2. Company's products (product description, competitiveness, production expenses, perspectives of business development)
3. Market research (market of the product or similar overall, target audiences, competitors analysis)
4. Marketing plan (aims of marketing activity of the firm, choice and substantiation of company's marketing activities, marketing budget development, sales prognosis and analysis)
5. Production plan (production structure of an enterprise, production process, machinery, materials, external factors influence)
6. Organizational plan (form of organization, personnel need, founders, management scheme, personnel policies)
7. Financial plan (sales and profit volumes, P&L, cash flow, planned balance, liquidity plan)
8. Risk evaluation (sources, types, methods of lowering)

 
 

Company Current Position and Future

Rainbow is a designer and manufacturer of unique handmade jewelry. Rainbow makes many different designs in the form of earnings, pins, bracelets and pendants. All of the products are designed and manufactured by our masters. In order to grow and achieve the desired level of market penetration, the company has outlined the following marketing/production goals over the next three years:

The Company Mission & Goal

Our company offers products different to those in the market introducing wide variety of styles and colors to satisfy customers.

The jewelry industry is highly fragmented with thousands of artisans competing for distribution contracts and fame. Some work and distribute locally, others have national distribution systems set up. Some artists will design products for larger companies to manufacture, others will design and make the pieces themselves. Competition for Rainbow takes the following forms:

• Artists creating designs that are then manufactured on a large scale and distributed nationally.
• Companies that has their own designers in-house. In this case everything is done in-house, design, marketing and wholesaling.
• Artists who design and make all of the pieces themselves, and then do the wholesaling or retailing themselves.
• To create a jewelry manufacturing company whose primary goal is to exceed customer's expectations.
• To increase the number of designs offered by 8% per year.
• To develop a profitable/sustainable home-based company. 
  Rainbow will be focusing on two distinct groups of customers. One is the end consumer, the other is galleries, to be used as a distribution channel. The end consumer will be interacting with our manager via website as well as through personal contact at exhibitions/shows. The galleries (museum shops, jewelry stores) will also be met through the exhibitions and shows.

Need for product:

Most of the handmade jewelry producers are just separate authors working time after time but we are going to unite designers and their work to build powerful production of unique handmade jewelry.

The Rainbow company as a start-up firm is established by an entrepreneur and third-party investors: the business will equally belong to:

60% - founder

40% - Ukrainian investor

Product

     As we have already mentioned, our choice is hand made jewelry. The reasons why are:

1) raw material is very cheap;

2) it doesn’t take much time to produce one piece.

     Nevertheless, the main reason is that all products are unique, you can make similar but never identical. That is why people like such products.

     Product’s description

     Hand made jewelry is exclusive products, which are made by hands. The design is unique and products can be made of diverse materials such as glass beads, fabric, acrylic, ceramic as well as organic /natural material such as wood, leather, and raffia grass. It all depends on the choice of the customer.

Assortments of the product

1. Jewelry for women:

• necklaces and pendants
• bracelets
• earrings
• rings
• brooches

3. Accessories:

• key chain
• charms

 

Production expenses will include:

• the cost of machines,
• rent expenditures
• salaries for workers
• raw materials
• supporting costs
• other costs

Competitors: 

 
 

Marketing Research 

Target markets:

• Corporate factors influence
• Implementation
• International market potential of the firm

     Our target markets are young people with creative ideas, also we plan to produce jewelry for women that will add some fashion details to business look. We have great sales potential in this segment and we are going to develop it to special accessories for men.

• Adjust jewelry especially for Kyiv market, add ethnic theme.
• Create product that will satisfy new demand on the market
• Expand product line to more unique business strategy

     Comparing the situation on the markets with different kinds of products we can choose which strategy is better for us. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy.

     New products to existing market:

Rainbow has two targeted groups of people, galleries and individuals:

• Galleries- These buyers are purchasing jewelry wholesale in quantity and reselling it to the public. Some of the galleries are private galleries, some are artisan jewely shops, some are museum stores. The margins are not as good compared to sales to individuals and there is also the expense of setting up relationships with the galleries to sell the art pieces, but galleries move a large quantity of work. The galleries and stores that typically are interested in Contemporary's work are more upscale and modern.   They appeal to a crowd that favors progressive or industrial design.
• Individuals- These buyers are familiar with Rainbow either from stumbling across the website, saw some examples of Steve's work at a showing or art festival, word of mouth, or some other avenue. The individual would then view the different available pieces on the website and place the order via the Web, phone, fax, or mail. The margins for individual sales are greater because there is not a distribution layer involved, it is direct from Rainbow to the end consumer. The individuals that are typically attracted to this type of art work are generally from cities and are fairly progressive. The reason for this is that the jewely, while not flashy, is not all that conservative looking. They are intricate pieces, typically using organic shapes and industrial design. This is the reason that more progressive people will appreciate the Rainbow pieces.

Geographical positioning:

As far as Rainbow is targeted on final consumer, we’ll differentiate place of selling:

Retail sale (pellets):

• In the store near production office;
• Through the website with delivery all over Ukraine.

Place of manufacturing will be located on the basis of office space in Kiev. Office will be located in Kiev in a rented apartment.

The delivery process will be organized in such way:

Final consumers will be served in such way:

• Our product will be delivered directly to consumers by UkrPoshta or Mail delivery services;
• From the main office to retail shops in Kiev, and in future all over Ukraine.

 

Matrix of choosing a place for an enterprise

Factors, that have the most influence towards start-up business are:

1. current competitors
2. future possible competitors
3. suppliers
4. government regulation

As long as our business is based on the supplier’s manufacturing point, the supplier problem is not so sharp for the company.

However, competitor evaluation needs to be done accurately, as long as our competitors have already gained position on the market.

Comparative analysis of market strategies of “Rainbow” and its closest competitors

 
 

     SWOT analysis: