Business Plan For A Handicraft Business In UK Marketing Essay

Business Plan For A Handicraft Business In UK merchandising EssayINTRODUCTIONThe objective of this report is to study and prep atomic number 18 the subscriber line curriculum for a handcraft communication channel in UK. This business plan deals with the feasibility epitome, idea generation, and sedulousness analysis at round(prenominal) the local and global level to understand the grocery and business factors.The market analysis is also done, primarily through the bet onary sources to capture the potency demand of crafts in the UK market and the trends which the customer be smell for in this industry. After analyzing the demand, the technical analysis was done for the business.For the success of any business, it is infallible that the idea or the basis of the plan should be strong. But it is also imperative that the plan should take into account a true picture of financials to sustain a strong foundation on which the business can be built upon. Therefore in the repor t, a detailed preparation of cash flow analysis, profitability analysis and the pass judgment expenditure in the business has been taken anguish of. The report has taken into consideration the jeopardy factor also which the business needs to consider before commencing on the work.Handicraft is a business which needs not plainly financial roof but also humans capital and it is necessary that masterful cut into is available in plenty. The attrition rate is low in this industry provided they are provided with adequate support and wages. In the report I have tried to touch upon that issue as considerably. Also the manner in which the products would be sold and kindled in the market would be taken care of. We would not be cleareding our own stores for now and would be rating on to separate retailers. withal the idea of opening the stores is not discarded as whole for now and would be seen as an extract at a later stage in the life of the business. Heavy spending is planned to promote the products in the initial phase of the business and various media vehicles would be tried upon to promote the products well in the market. The business as of now focusing primarily on the UK market and later on in the later stage, the business can be expanded further.ContentsIntroductionHandicraft IndustryThe handicraft industry is one of the most productive spheres in the economy. The reason organism that this empyrean not sole(prenominal) uses the raw materials but also give employment opportunities to a number of large number. Thus not that financial capital and raw material is employed but also a pass on of human capital is also used in this business (Garrison, 2008).According to United Nations Educational, Scientific and Cultural plaque (UNESCO) International Symposium on Crafts and the International Market Trade and customs codification, Manila, Philippines, October 1997.Handicrafts can be delimit as products which are buzz offd either completely by hand or with the help of tools. Mechanical tools may be used as long as the direct manual contribution of the artisan body the most substantial component of the finished product. Handicrafts are make from the raw materials and can be produced in unlimited numbers. Such products can be utilitarian, aesthetic, cultural, artistic and may have a social, religious and typic significance (Robertson, 2002).Industry AnalysisUK has been a soil with a rich and diverse culture. Lot of migrator population also resides in various move of the country. It is because of this that handicraft industry has played an important grapheme in this country. The industry provides economic advantage much because of the demand from various strata of the population (Mathias, 2001).Handicrafts have eer attracted people much because of their cultural importance and it crosses barriers too. The customers in any market look for handicrafts from not completely the local market but also from the other(a) countri es (Barlow, 1991). Therefore both the cultural and financial set are attached to this industry. This industry by its mass and production scale lies in the middle manakin as not much finance and manufacturing facilities are needed in this business. The industry is decentralized and is labour intensive. Not many players fight in this market and only small players operate in this area. The arena employs a lot of people and thus acts as a medium of employment for lot of people. The sector has seen an increase in nurtureth much due to the fact that people have been more open to the culture of other countries and are accepting it more often. The era of globalization has helped in the revival of this industry not only in the UK market but also in other markets too (Andrews, 2009). variety of Handicrafts IndustryHandicraft products can be distinguished into the questMetal lay waste toWood wareHand printed textilesEmbroidered and crocheted goodsShawlsCarpetsEmbroidered goodsBamboo pro ductsZari goodsEarthenware and jute productsMiscellaneous handicraftsSWOT Analysis of Handicraft IndustryStrengthsMarket is diversified and has huge potentialPresence of large product variety because of various culturesLow capital investmentFlexibility in production of goods as per market demandLow barriers to the entry of new playersProducts sold are high gear value ones and have diversified usageWeaknessLack of coordination between government bodies and companiesInadequate breeding on the current market trendsLack of skilled labourOpportunitiesDevelopment of domestic tourism sector which helps in boosting sales.Usage of internet and other technologies in boosting the market potentialRising demand because of people becoming more open to culturesThreatsLack of branding opportunities in this sectorThreats from the developing countries the likes of India and mainland China in terms of resourcesBusiness PropositionWe would be dealing in the limited set of handicraft industry as many products come under its purview. Our company would serve the needs of the customers in only the wooden handicrafts market. The reason for choosing this is that in UK market these products are used almost in every home. Products like decorative chairs, desks, beds, sofas which are made by hand are seen as high value products in the market as customers look for something different. Particularly for the UK customer, they need products which not only serve their functional calculate but also add something extra. It is with this that we plan to enter in this industry with this specific set of products.wooden handicrafts refer to a wide range of wooden items carrying utilitarian and artistic value that are made by hand o with the use of simple tools. They are made by unmatched workmanship, have fine designs and have subtle elegance. The products require low capital investment to manufacture. The wooden handicraft sector provides a high ratio of value addition and has emerged as one of th e major sources of foreign stand in in the country too. (Sumption, 2010)Market AnalysisMajority of the current players in the market deal in almost all the product categories in the wooden handicraft industry. (Macleod, 2006)Retailing is not done by them and they deal in mostly the production part. They have retailing contracts with other partners which help them sell the productsmonthly production units are majorly in the range of thousands of units for all the products combinedwooden and glass handicrafts are majorly in demand in the UK market. (John, 2006)Inventories are usually kept low as these products are sold and produced in lower units in the market.Almost all the players in the market hire the labor at a contractual basis rather than on a permanent basis.Many of the players take the route of exhibition to promote their products to the customers. (Mathias, 2001)These products are high margin products as they are mainly value based ones. therefore high margin and medium v olume is generally the trend in the industryCompetitionThe following players currently operate in the market and sell wooden handicrafts in the market.World Art and Crafts Ltd. coffee tree ArtElements Ltd.Demand Analysis and ForecastingDuring our study we also analysed the demand pattern for the various products in the wooden handicraft market and it came to around 50000 units per month on approximation. There is a demand emerge gap in the market as according to our supply the current players in the market are able to provide close to 30000 units only. whence we consider a huge potential to be baffle up in the market.(Boseley,2009)The market is growing closely at an annual rate of 15%. Hence it is decided that the capacity would be initially 60% for the first category and then it will grow accordingly.Marketing ChannelAs mentioned before, our business involves only manufacturing the products. Therefore we would use a network of retailers called partners to sell our products in t he market. These would be mainly big retailers like WalMart, Tesco etc.Strategic Marketing PlanWooden handicraft particularly the furniture part is an unbranded commodity and hence manufacturers generally do not have to spend too much on the promotional part. It is better for them to increase the margin given over to the retailers so that they push the company product more in front of the customers.However in govern to differentiate our offering and to capture the customer base, it is necessary to have a basic strategic merchandising plan. The following would be the strategies used by usSteady supply with timely delivery to receive the demand in the market thereby providing products with high qualityProducts would be given emphasis on the design front. Designs would be based on several themesOrders would also be taken online from the customers apart from organism available in the retailThe company plans to both manufactures the products locally in the UK market as well as import some of it from the Indian market. Indians play a vital role in UK both in terms of trade and demographics and thus there is a market to serve the Indian community.The other reasons to source the products from India areThe demand for Indian wooden handicrafts is evergreen. It is both difficult for the labour in UK to produce these handicrafts as the design in Indian art work is quite intricate. Hence it is decided that some portion of our products would be sourced directly from the Indian producers, mainly based in states like Rajasthan and Madhya Pradesh.Indian being a developing country, both the labour and raw materials are quite cheap as compared to other developed countries. Hence it makes sense to outsource some of the production work.Indian artisans are well cognise around the world. British make a major portion of the people visiting India every year and hence they come in contact with Indian art and culture too. Thus getting products from market like India helps in underst anding the customer taste and keep the product portfolio up to date.Some of the Indian players which have been shortlisted and considered for sourcing of the products are as followsKhan Arts IndiaMadnik InternationalGoyal IndiaIndus TradeHandmade CraftsAntiquity Handicrafts completely the products in the portfolio would be sourced from these six major exporters in India. These players have been selected after thorough search of their business and their financials. They enjoy good reputation in the Indian market and also export to other players in different countries. It is decided to have business with six players as it will help us glow our risk and help us maintain a steady flow of products from India. These players are from different parts of the country and thus the products served by them would have different designs as India being a vast country has many sub cultures which attract many people worldwide.Technical AnalysisWood carving is a time consuming process as craftsmen ta ke time to make every piece. The process may take a week to months depending upon the level of intricacy in the design. The process use a lot of different tools also like saw, lathes, drills, chain saws etc.Machinery InvolvedThe following machinery would be used by the workers in the businessChemical treatment plantSeasoning plantSurface planner crampfishDrillerGaze machineSanding machineStructure and Civil WorkSr.No.ParticularsArea (Sq. feet)Amount (British Pounds)1manufacturing plant shed1800600022 stock room36010503Guard room802504Power room802505Boundary wall32006Washroom481505 labour quarters7Rooms120180008Wash rooms487009Office rooms18055010Fire fittings600 heart and soul30750Labour RequirementsHandicraft is a labour intensive product and thus a lot depends on the kind of labour employed.EmployeesNumber annual Salary (British pounds)Production supervisor125000Accountant125000Skilled workers520000Semi skilled workers816000Unskilled workers313000Peon110000Guard110000Total2011900 0Financial AnalysisParticularsLand and site developmentBuildingPlant and MachineryOther amend assetsPreoperative expensesPreliminary expensesProvision for contigencyWC MarginTotalMeans of FinanceParticularsPromoters capitalLong/Medium term loan from banksTotalBasic Assumptions underlying the financial projectionsThe construction menstruum will last one yearThe company would work 365 days a yearThe pass judgment capacity utilization will be 60% in first year, 65% in second year and the increment based on past performance.The term loan would be re-paid in 14 equal half-yearly installments. The interest rate on the outstanding term loan would be 12%The bank finance for working capital will cost interest rate 12%The wear and tear rates for company law purpose would beBuilding 3.34%Plant and Machinery 8%Misc fixed assets 5%The suppliers for raw material would provide credit for 15 daysThe salvage value is assumed to be 5% of fixed assets.Sales ForecastSales Forecast (units)Year201020 11Units950012000ConclusionThe business plan has been prepared keeping in mind all the factors and taking financials to the best of the present picture. It is therefore expected that the actual outcome would represent the true picture of this outlined plan.Finally, my personal interest in this written report will lead to establish my own business. These will result in successful and sustainable business.ReferencesAndrews, J.(2009).Handel allinglese, Playbill,. 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Published by Routledge, ed.2, pp. 56-58Mensah. J (2006). British culture on a high rise.Robertson, Kirsty (2006), How to Knit an Academic Paper. Queens University, 30 March 2006Sumption, M.(2010). The UKs new Europeans Progress and challenges five years after accession. Equality and Human Rights Commission. Accessed from http//www.equalityhumanrights.com (Last Accessed 5th March 2010)