Business Plan
IDC Interiors aims to open a small business venture with the aim to attract clients as much as this venture can of both types of customers (residential or commercial) by offering unique, comprehensive, environment-friendly and comfortable, interior design services for them.
The aim will be to completely satisfy the target market which includes the residential and commercial residents in Auckland. IDC Interiors complement the interior design structures by not just providing a sense of aesthetic distribution of space but also offer services that will optimally use furniture, fabric, electrical and heating structures as well as accessories (Schultz et al., 2000).
IDC company will be the first company in Auckland which combine selling furniture and providing interior design services. The company will provides a unique service by saving client’s effort, time combine with interior design technique of good furniture’s materials. The main step to establish this venture is to contract with trustworthy Chinese company for furniture to build a good reputation for venture’s goods.
Global social network is an efficient pattern to passing this service a cross variety of people, for instance: twitter and Facebook…etc. In addition; distribute brochures in different places as a kind of marketing. Establish website to present company’s services, previous work and contact with them.
This market provides entire service around interior design starts from the consultation ends to the additional accessories for furnishing. The future plan for this company will be an expansion plan by opening factories to industrialize its furniture and goods with special logo for itself.
IDC consists of the owner who is also the manager is in charge of consulting, designing and executing all the deals. The owner contracts to four main contractors: foreign employees, a foreign furniture company, local companies to supply gypsum and pigments and a local franchise company.
It is important for financial stage to improve stockturn and reduce stock investment. This new venture needs $40,000 as a bank funds.This loan will be divided on:Business mentoring services, truck, a sewing machine, a desktop computer anddesign software.
The complete revenues anticipated for the first year of the venture are well in excess of $46,000 and the overall start-up costs incurred for the first year are a little over $42,000 making the first year projection to be a successful and profitable one. Furthermore, the projected increase in profits for the two years to follow after the first year is anticipated to more than double with nearly $90,000 revenues projected by the end of the third year. The following table shows the overall costs and comparison for sales, gross profit margins and net profits projections for the first three years including the start-up year. The steady increase in all three sectors is extremely likely due to the projected and consistent increase of revenues.
Products and Services
IDC Interiors emphasises on giving interior design consulting. This is balanced by particularly purchased furniture, art pieces, decorator textile, and accessories for the residence and office. The sales procedure will start with interior design consulting services and then develop on to offer particularly selected parts to complement the design theme.
Products obtainable via IDC Interiors contain:
1. Furniture obtainable through particular arrangements with Thomasville, Drexel Heritage, and Henredon and neighbouring craftsman.
2. An assortment of decorator fabrics from Fabricut, P Kaufmann, Waverly, Regal, Latimer Alexander, Robert Allen, Ralph Lauren, Covington, along with Portfolio.
3. A line of drapes hardware that is known as “Oval Office Iron” purchased via Dept. Of the Interior Decorator Fabrics located in Eugene, Oregon found online at www.fabric-online.com.
4. Decorations and art pieces obtainable via wholesale shows.
5. Hunter Douglas window management products including a diversity of hard window coverings.
6. Inner shelters that are made of wood as well as a plastic/resin related product is called “plywood.”
7. Traditional or antiques obtained for particular client needs via an agreement with a local antique purchaser and through direct buying through other sources.
Product and Service Description
Our main points of discrimination provide customers with these qualities:
Exclusive customer’s knowledge from a trained and expert interior designer that is capable of meeting the needs of astute clients with high prospect. Secondly access to a wide and exceptional assortment of new and traditional furniture, accessories, along with special-order decorator fabrics.
Then personal support from a complementary product offering is provided including hard-covering window management, hardware, as well as home accessories that suit the look and purpose of each project.
Competitive Comparison
Our rivalry is first and foremost from other interior designers. Taking a look a wider picture, there is also rivalry from the “do-it-yourself” resource givers that have retail stores as well as websites that have the following:
Bed, Bath and Beyond shifted into the marketplace in the year 2000 at an absolutely brilliant location. Discount stores that include Target, Wal-Mart as well as Home Depot have expanded their fabric, bedding, pillow, along with ready-made drapery line often expressing lines that also have Waverly.
Norwalk carried on making purchases “blank” furniture as well as making a designer fabric assortment a striking solution to recovering furniture. Catalogue sales carried on to be an important force with a list together with Ballard Design, Calico Corners, Pottery Barn, and Eddie Bauer increasing buying choices.
The list of rivals for home fashion accessory rivalry includes Pier 1 and local rivals that give a whole list of additional furniture, accessory along with gift stores. Web selling of furniture, fabric as well as other interior design-based products has increased radically and in many instances is with no trouble available.
Sales Literature
An easy, specialized and professional looking booklet will be obtainable to provide transfer sources, go at seminars and on a choosing basis, use for direct mail intentions.
Business Feasibility
Strategic overview:
The interior designer is that whose will take a blank canvas and transform that into a work of art by creating a beautiful atmosphere by matching colours and choosing modern furniture, achieves this from a scientific basis and previous experience. Auckland’s Creative Industries Document defines the creative industries are those industries with their personal creativity, skill and talent and have a potential for wealth and job creation through the generation and exploitation of capabilities (KIROFF, 2010).
The New Zealand creative industries are divided into six subsectors where the largest source of employment is the design sector (architecture, graphic design and advertising) comes with 5,400 jobs in Auckland city (KIROFF, 2010). The study of the design creative industries in Auckland is based on the DINZ data (Design Institute of New Zealand) Directory. However, the study ratio demonstrates Auckland on the forefront of the design market in the country (KIROFF, 2010).
There are three essential factors affect the profits earned by the firms, they are: customers, suppliers and competitors (Grant, 2010). Customers respect a high value of the products while this company is facing a big competition in Auckland’s markets so it will focus on buyer power by making unique services and aims to differentiate its services by offering: combination services which integrate the interior design service with purchasing furniture (Grant, 2010). IDC will contract with a trustworthy Chinese furnishing company that produce a high quality of materials and it uniqueness through combine many services in one package. The second factor is a Chinese supplier company as we mentioned that provide a high quality in reduced prices with storage and delivery service which minimize the potential risk. Last factor is industry rivalry which also focus on how to concentrate on the threats of entry and substitutes so this project will provide a creative service that based on interior design science which many people do not familiar with it additionally, associated advantages: unique product’s quality, easy channels, accomplish in short time and competitive prices.
IDC Interiors will face competition from other local and multinational interior designers as well as individual entrepreneurs and amateur designers. Some of the competition that IDC Interiors will face includes the following: Large retail stores like Target, Wal-Mart and Home Depot that offer a wide branded variety of interior designing options from fabrics to accessories. Catalogue sales and online marketers of furniture inclusive of companies like Pottery Barn, Calico Corners, Ballard Design, and Eddie Bauer (Sinha, 2000) will be a major threat and IDC Interiors will need to distinguish itself by interior design as an additional service and counter them by having apt online purchasing and marketing structures as well (Porter, 2001).
The environment for doing business in New Zealand has changed since the last the Small Business Advisory Group (SBAG) report in 2008 while, in June 2012, the Government sets out a strategy for small and medium enterprises for New Zealand’s future economic direction so that we can make decisions in our business with low risk (Sam-ndsen, et al., 2012).
Market Viability
IDC classified as small business between 97,888 enterprises that form 20.8% of all enterprises in New Zealand, this venture consists of five people the owner as a manager and four employees (SMEs in New Zealand: Structure and Dynamics 2011, 2011)[footnoteRef:2]. These figures indicate to tremendous amount of competitors and that also could be a signal for a successful demographic of small business. [2: www.med.govt.nz/business/business…/structure-and-dynamics-2011…. ]
The primary research of the Auckland market presents the following sectors for consideration for the new venture:
The demographics in the target market include: college going and married women with children who either are working mothers or stay-at-home mothers; this makes the age group anywhere between 25 to 55; the overall annual income of the household is more than AUS $100,000; the property owned by the target individual is worth at least AUS $425,000; the targeted individuals will preferably be one that have interior design requirements for their office or residential space as well and are part of the corporate industry on a professional level that could include clubs, association, university groups, etc.
The psychographics for the chosen audience form Auckland will include the following aspects: priority for impeccable taste for home and office design; have creative outlooks on the world and have an active social life; are regular readers of one or more of the following magazines – Martha Stewart Living; Country Living; Home; House Beautiful; Elle Decor. The following chart and tables include the potential market trends in the targeted market in Auckland:
Market Analysis
Year 1
Year 2
Year 3
Year 4
Year 5
Potential Customers
Growth
CAGR
12%
34,400
38,528
43,151
48,329
54,128
12.00%
Boomers in Transition
9%
12,000
13,080
14,257
15,540
16,939
9.00%
Professional Youngsters
8%
8,000
8,640
9,331
10,077
10,883
8.00%
Home Builders
5%
8,000
8,400
8,820
9,261
9,724
5.00%
Other
0%
0
0
0
0
0
0.00%
Total
10.09%
62,400
68,648
75,559
83,207
91,674
10.09%
Auckland reached to the 1.5 million populations in June. In 2011, there were 34 Aucklanders of every 100 people living in New Zealand (National, 2012)[footnoteRef:3]. Every office owner and adult person of these populations is IDC’s goal. [3: http://www.stuff.co.nz/national/7783245/Auckland-population-headed-for-2-million]
Technical viability
Technology is managing risks for both enterprise and its customers from the first stage of settlement to the final stage of the arrangement (Grant, 2010). While it codifies each point of deal and shows the initial plan through the three-dimensional photos.
Delivery model:
There are two kinds of distribution channels in IDC: international channels and local channels. Heavy products are delivered by the Chinese company in three ways: DHL, EMS and China Post AIR MAIL. DHL offers shorter delivery within 5 to 7 working days. EMS rates of delivery within 7 to 15 days. AIR MAIL takes longer — within 10 to 20 working days.
Another channel provided by IDC is local delivery, with employees’ productions moved from the company to the customer’s house. Local delivery is offered at a symbolic price, which is just the actual cost.
Operational Management Viability
The owner is the manager whose employs four foreign employees. They will be from countries that pay cheap wages, with temporary work visas that allow employees of a business to relocate to New Zealand (ENZ, 2012)[footnoteRef:4]. There are only four groups of labourers and each group has an ability to do a specific role: a tailor, a dye labourer, a gypsum worker and a driver. If there are many suppliers means no quantity discounts so the main supplier for IDC is a Chinese company manufactures the furniture and delivers them to the customer’s addresses. Additionally, this supplier offering two services to the Interior Design Company: delivery and storage.Owner will contract with gypsum and pigment company that provide their products at a special price. Owner as a manager will contract with FranchiseCompany in New Zealand that offers consulting, accounting and franchise opportunities that will distinguish this venture from its competition. [4: http://www.enz.org/work-visa-new-zealand.html]
The essential activities of IDC are:colour scheme, kitchen, bathroom and laundry design, flooring finishes, lighting, window treatments, custom designed and pre-made furniture selection, space planning, accessorising and styling. Colour scheme is a consultation for both interior and exterior.Kitchen, bathroom and laundry design: manager suggests the best way to exploit each corner to serve customers and create wider spaces with a beautiful finish.Flooring finishes; this depends on their health and space, focusing more on what customers need or want.Lighting is a separate science affecting people’s emotions.Window treatments are similar to lighting science, with the outside and inside views.Custom designed and pre-made furniture selection, this service is the hardest step, requiring consultant design, Chinese company equipment and labour time.Space planning, accessorising and styling refer to how to exploit spaces in the best way.
IDC services will be operated through following steps:Clients will decide how many services they want and how many meters of space they need.A study of their desires in consultation with multiformity catalogues. This will be supported by three-dimensional photos to visualise the final format (Gibbs, 2005).After the customer decides there are legislative contracts to ensure the rights of both sides and minimise the risk of inaccuracy. Contact with the Chinese company to define the order clearly and agree on the method and duration of delivery. Employees are allocated tasks pursuant to the customer’s demands. The final step is the furniture arrangement in customer’s houses or companies.
Target Market Segment Strategy
Our marketing plan will produce awareness, attention, and appeal from our particular market for what IDC Interiors provides its customers. The target customers are divided into four major segments; “Country Club Women,” “Boomers in Transition,” “Professional Youngsters,” and “Home Builders.” The main marketing chance is trading to these well distinct and easily reached target market distinctions that focus on spending optional income in these areas.
Strategy Implementation
Value Proposition
IDC Interiors provide the superior interior design knowledge for the home and office easily obtainable for those in the Auckland area. The idea is exceptional through the assortment of antiques, home accessories, and balancing products along with the interior design consulting knowledge.
Competitive Edge
IDC Interiors will be distinguished from other interior designers by the worth it provides in quality, oriented products not found throughout other designers or store choices, and through the outstanding service and help it offers. Customer’s follow-through will be flawless. This distinctive and competitive edge influences the same established factors that showed higher achievement rates for these designing services.
Marketing Strategy
The marketing planning is based on developing IDC Interiors as the main source of option for people in utter need of interior design ideas and products. The more concerned “do-it-yourself” and the “buy-it-yourself” customers will find the offering and help important.
On the other end of the continuum, the “just-get-it-done” customer will find IDC will productively achieve precisely that. All customers will find IDC Interiors to be a productive and helpful resource to design their residences and offices in a way that is stimulating, attractive, and motivating.
Our marketing plan is based on greater performance in the following areas:
We provide exclusive consulting services and the product choices particularly chosen for each individual customer assignment. Overall excellence of the experience and the result combined with exceptional customer service and help regardless. This particular marketing plan will build responsiveness, attention and appeal for our target market through what IDC Interiors offers our customers. This will be developed and executed in a way that will attract them to repeat purchase or to come back and support them to refer friends and professional connections. Therefore, our customers will help in increasing our business not only by re-purchasing from us but also by spreading positive word-of-mouth.
Pricing Strategy
The prices of the products are based on contributing high value to our customers in comparison to others in the competition pool.
Value is assessed based on the most excellent design services that provide the customer with a “picture” of what the area will look like before the work begins, expediency and appropriateness in accomplishing the goal.
Promotion Strategy
The promotion plans will primarily centre on generating transfers. Other possible sources of promotion include the newspaper ads, television as they proven to be effective, then quarterly post cards as well.
Distribution Strategy
The main foundation of distribution is via the custom retail distribution channel. On a minor basis, it will be via the website which will include email queries and phone sales, or in a straight line from the site itself.
Financial Viability
Start-up Costs
Start-up
Requirements
Start-up Expenses
Legal
$500
Stationery etc.
$500
Brochures
$100
Consultants
$150
Insurance
$150
Samples and Reference Books
$200
Research and development
$800
Expensed equipment
$39,200
Other
$500
Total Start-up Expenses
$42,100
Start-up Assets
Cash Required
$9,780
Other Current Assets
$1,000
Long-term Assets
$3,000
Total Assets
$13,780
Total Requirements
$25,000
Cash Flow Anticipations:
Cash Flow Anticipations
1st Quarter
2nd Quarter
3rd Quarter
Cash Received
Cash from Operations
Cash Sales
$11,000
$10,900
$10,622
Cash from Receivables
$3,200
$3,200
$3,200
Subtotal Cash from Operations
$15,100
$18,000
$9,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received
$0
$0
$0
New Current Borrowing
$0
$0
$0
New Other Liabilities (interest-free)
$0
$0
$0
New Long-term Liabilities
$0
$0
$0
Sales of Other Current Assets
$70
$80
$60
Sales of Long-term Assets
$0
$0
$0
New Investment Received
$0
$0
$0
Subtotal Cash Received
$29,370
$32,180
$22,882
Expenditures
1st Quarter
2nd Quarter
3rd Quarter
Expenditures from Operations
Cash Spending
$6,000
$7,000
$6,800
Bill Payments
$8,200
$8,200
$8,300
Subtotal Spent on Operations
$14,200
$15,200
$15,100
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
Principal Repayment of Current Borrowing
$0
$0
$0
Other Liabilities Principal Repayment
$0
$0
$0
Long-term Liabilities Principal Repayment
$0
$0
$0
Purchase Other Current Assets
$0
$0
$0
Purchase Long-term Assets
$0
$0
$0
Dividends
$0
$0
$0
Subtotal Cash Spent
$14,200
$15,200
$15,100
Net Cash Flow
$720
$720
$620
Cash Balance
$3,000
$2,532
$2,065
3 years PTL Projection:
3 Years Profit and Loss Projection
Year 1
Year 2
Year 3
Sales
$46,460
$68,640
$99,200
Direct Cost of Sales
$14,889
$22,776
$33,280
Other
$0
$0
$0
Total Cost of Sales
32.04%
33.18%
33.54%
Gross Margin
$31,571
$45,864
$65,920
Gross Margin %
67.95%
66.82%
66.45%
Expenses
Sales and Marketing and Other Expenses
$11,560
$13,430
$15,100
Depreciation
$300
$750
$800
Leased Equipment
$0
$0
$0
Utilities
$540
$660
$800
Insurance
$960
$1,200
$1,600
Rent
$0
$0
$0
Payroll Taxes
$0
$0
$0
Other: (fixed cost: fuel, payroll, transport, telephone)
$35,400
$37,200
$38,400
Total Operating Expenses
$33,160
$44,840
$54,300
Profit Before Interest and Taxes
($1,589)
$1,024
$11,620
EBITDA
($1,289)
$1,774
$12,420
Interest Expense
$0
$76
$238
Taxes Incurred
$0
$265
$3,206
Net Profit
($1,589)
$683
$8,176
Net Profit/Sales
-3.42%
0.99%
8.24%
Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$4,067
Assumptions:
Average Percent Variable Cost
32%
Estimated Monthly Fixed Cost
$2,763
References
Abesser, C. (2010). Open-loop ground source heat pumps and the groundwater systems: A literature review of current applications, regulations and problems. British Geological Survey.
Coopers (2010). KoolShade Solar Control. Available from: http://www.coopersfire.com.au/documents/literature/Koolshade/Koolshade%20brochure.pdf
ENZ. (2012, September 15). The New Zealand Work Visa and Work Permit. Retrieved September 15, 2012, from work visas in New Zealand: http://www.enz.org/work-visa-new-zealand.html
Gibbs, J. (2005). Interior Design. London: Laurence King Publishing Ltd.
Keller, K.L. (2002). Strategic Brand Management, 2nd ed. Prentice Hall.
National. (2012, 10-8). Auckland population. Retrieved 10-25, 2012, from Auckland population headed for 2 million: http://www.stuff.co.nz/national/7783245/Auckland-population-headed-for-2-million
Porter, M. “Strategy and the Internet,” Harvard Business Review, March 2001, pp. 62-78.
Ries, a. And Trout, J. (2000). Positioning: The Battle for Your Mind (20th anniversary ed.) McGraw-Hill.
Schultz, D.E. And Kitchen, P.J. (2000). Communicating Globally. Palgrave Macmillan.
Sinha, I. (2000). Cost Transparency: The Net’s Real Threat to Prices and Brands. Harvard Business Review, March-April.
WiseGEEK. (2003-2012). What is a Cost Structure. Retrieved September 17, 2012, from cost structure: http://www.wisegeek.com/what-is-a-cost-structure.htm
Appendix
Room design
Ground floor and Lobby
Lobby interior design
Lobby view
Floor designs
Parking Lot design
GSHP
Open Loop System
KoolShade: fabrication for facilities
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