Business Plan: Spritecs Designer - Assignment Example

Business Plan: Spritecs Designer Logo: Tag line: We Design for All Contact information: 2400 Market Street Suites 6 Philadelphia, PA19113 Phone: (215) 209-3124 e-mail spritecsdesigners@hotmail.com Facebook page: SpirectsDesigners Twitter: Spirects Designers Table of Contents Table of Contents 2 Executive summary 3 Industry target and customer analysis 4 Competitor analysis 4 Company description 5 Product and service plan 5 Marketing plan 6 Operations and development plan 7 Management team 7 Critical risks offering 7 Offering 8 Exit strategy 8 Financial plan 8 Executive summary The Spretics Designers is an interior design firm. The firm is aimed at ensuring that it gives the homeowners something which they can be delight of in the premises. The firm not only provide interior design services, but also products, such as, furnitures, fabrics, accessories, window treatments, roof treatments, and doors. The start-up business will be registered as a sole proprietorship since it would owned and managed by the founder. The start up capital for the business will be $150,000. It will be located in Market Street Suite 6, in Philadelphia on a rented offfice. The target are the home owners in in the city of Philadelphia. The marketing plan would include promotion, pricing, product, and placement. Spretics Designer’s competitive advantage first comes from the pricing position. This system gives the company a competitive edge, especially in a society that has an idea about interior designers. The segmented pricing would be useful in penetrating the market effectively. The marketing. All the operations in the firm would be documented. The firm would use customer feedback to improve its quality of services and products. In the same way, newly recruited employees would undergo training so as improve their job performance and skills. The major risk of the business is that one may use obsolete technology due to rapid changes in the design industry. Therefore, the exit strategy for the business would include merging the business or selling it to interested investors. However, in the next 3 years, the sales are projected to grow to over $900,000. Industry target and customer analysis Due to the rapid technological advancements, the design industry has also developed. More businesses and people need interior design services for either commercial or personal use. Spritecs Designers would be strategically located to take advantage of the fifth-most populous city in the U.S. The target market for Spritecs Designers are the business community, local community, and learning institutions. There are currently very few professional designers in Market Street, Philadelphia giving a great opportunity for more to enter. In the same way, implementing a suitable pricing system and effectiveness of the marketing strategy are the main driver for the success of the company and to achieve profits in the future. Through extensive research in the Philadelphia, accountable information had been gathered to adequately be used to approach the targeted customers and the best service they are looking for and how much do they pay for it. The existing companies charges between $25 to $50 per hour, which gives another opportunity to compete on price. Spritecs will use segmented charging $15 per hour for local home owners and between $20 to $ 50 for organizational homeowners. With the increasing population, the households are projected to increase in the next decade. The increased construction activity implies that homeowners are increasing. Competitor analysis The major competitors of the business are Susan Hopkins Interior Design, Ashli Mizell, Lancergrafixs Interiors, and Home Stagers who also specialize in interior design. However, Spirects Designers would gain competitive advantage by using a differentiated pricing strategy and incorporating consultancy services in addition to the core interior design service. Company description Spritects Designers is an interior design service provider business. Its main goal to allow people to enjoy the feeling of living or working in a space that looks just like pictures in the magazines within their budgets. The business will help its clients to create the best environment that suits their needs, whether they want guidance in the designing stage only, or they want a complete project from the concept to delivering the keys. The company offer two kinds of services to make sure that we cover all client`s necessities and can fit in all budgets: full designs and expertise designs only. As a startup, Spritecs will be located in Philadelphia in the Commonwealth of Pennsylvania will be registered as a sole proprietorship. The company will be owned and managed by its founder Christina Housset since I have previous experience in interior design and I have also managed a few startups. The company will be operated from a rented office located in the Market Street Suites. The management team has carefully considered the market demand, and is confident of its success. To achieve these goals, the company will secure an initial investment of $100,000. This capital will be used for start-up costs and to cover all first year expenses. Product and service plan Spritecs Designers will offer interior design service. The service includes all areas within the perimeter of the house, including colors, walls, and furniture as well as selection of fabrics, accessories, window treatments, roof treatments, and doors. Once you step inside the house you’ll see the touch of the interior designer. Design itself is the vision of what a space will become. A design is simply a drawing on paper. After that, the project enters the execution phase. The company’s clients have the option to stop at the first phase, buy the design, and then take care of implementing it. Or the client may choose for the company to complete the entire project where the firm will outsource for the project implementation. When the latter is chosen, the company hands over the design to a trusted contractor to implement the design. The firm will offer two choices to its customers: pay for the design or pay for the design including implementation to ensure that its services suit all budgets. Marketing plan In first week some staffs of the business will provide leaflets nearby the shop neighbourhoods by describing the products and treatments services offered. Additionally, the Spretics Designers will offer free design services to the guest customers and accordingly receive their feedbacks. In the second and third week, the customers will be provided with the opportunity of 25% discount services for bringing colleagues, friends as well as family members to the designer shop, which will be valid for two months. Correspondingly, in the second month of business, the designer shop, in order to improve customer base will open an official webpage to promote as well as sale the offerings of the Spretics designers. The assistance of social media platforms that include Twitter and Facebook among others will be taken. Print media, including business magazines, city guidebooks and newspapers will be used for ensuring extensive reach of the homeowners. The other selling strategy of the designer services and products will be through engaging in word-of-mouth communication. A business entering a new market is required to possess competitive prices in relation to products as well as services offered as compared to competitors. In this context, Spretics Designer will adopt a penetrating pricing policy with the aim of acquiring more customers in a rapid manner. The management will ensure that prices are calculated on the basis of production costs in order to ensure a better profit margin. Operations and development plan Spretics Designers will operate from a rented space on Market Street Suite 6, in Philadelphia. The most popular software in design at the moment is the AutoCAD software, and it costs about $7,000 every year. All the movable equipments will be tagged with an SD inventory bar code. An internal transfer form will be used in case of transfer of any equipment. Equipment will not be for personal use. Any surplus property will be sent to the firm’s store. The materials will be sourced from viable suppliers in and out of Philadelphia. Other than the petty cash, individuals will not be allowed to carry out purchases. The purchasing manager will oversee all the purchases. The products found unacceptable can be returned. To ensure quality, customers would be provided with rating forms which they will fill to provide feedback concerning product and service delivery. Cameras will also be installed to increase security. Management team The management would comprise of ME: Christina Housset as the owner and executive manager of the business. Since it is a sole proprietorship, the management is quite simple. Most of the tasks will be performed by me Christina Housset. The employees would be recruited and selected on a competitive basis. After being hired, they would under training via mentorship and coaching by me to reduce on training costs. Critical risks offering Changing consumer tastes that lead to a complete overhaul of the initial work. The field is changing rapidly, thus the need to keep updated. Working as an independent designer results in doing more promotional work than the design work. Offering The project requires $150,000. An estimated $90,000 will be used in the first six months and the remaining amount of $60,000 would be used in the subsequent months. The founder will contribute $35,000 from personal savings and borrowing from friends and family members. Investors $50,000, bank debt $40,00, and equity $25,000. About $7,000 will be used to purchase machinery, cash $37,000, inventory $5,000, and $2,500 translating into a working capital of 51,500. Exit strategy An exit strategy is a way of changing the ownership of the business to avoid incurring losses. The exit strategy of Spretics designers is selling the whole business to interested parties and merging or be acquired by the bigger design firms in Philadelphia. Financial plan In the first three years, Spretics Designers project to sell over $200,000 in 2015, over $300,000 in 2016, and over 370,000 in 2017. Sales forecast proforma Income statement Year 2015 Income Statement Selling price per unit $130 Number of units sold 1,500 Net sales $195,000 Cost of goods sold $65,000 Gross Profit $54,000 Operating expenses $206,000 Profit before tax $63,035 Appendix Key investors a. Seventh Capital: A New York-based investment firm that focuses on small and medium-sized companies. They also deal in e-commerce. b. John Rosen: The founder of The Theory Designers and is also an investor in Anice & O’Neil, Rag & Brook, and Helmut Ligerd design firms. He invests in both private and public brands. Financial goals Market studies A SWOT analysis of the business Strengths: Experienced designers Only three competitors on the Market Stree Suites 6 No inventory Good referral relationships with architects, complementary vendors, and local realtors. Client loyalty developed through a solid reputation among repeat, high-dollar purchase clients Weaknesses: The owner is still climbing the "retail experience learning curve”. Challenges of the seasonality of the business. No previous work examples done by the company to show clients The owner have little experience in management Existing competitors are one step ahead of us and have established customer loyalty No sufficient data on market available Opportunities: Targeting new open generation New major projects in the country (residence & commercials) Big market demand Changes in design trends can initiate home updating and, therefore, generate sales. New clients in wider geographic area Increased construction and projected increase of home owners More women being involved in influencing decision making process in the household. Threats: New designers are coming - students are graduating Dramatic changes in design, including fabric colors and styles can present challenges to keep pace with what is desired by what is expected to be a leading-edge client base. Constantly changing consumer tastes in terms of residential interior design will provide a challenge since they will have to continually update themselves. There will also be an intense price war among the smaller players and individual designers with each trying to use the price as a unique selling point for themselves. Bigger firms have visual presence Selling process Photographs of products, facilities, and buildings Signed contracts of sale. s Read More