Business Plan For A Handicraft Business In UK Marketing Essay

Business Plan For A transaction Business In UK food marketing EssayINTRODUCTIONThe objective of this report is to study and prep ar the own(prenominal) line of credit conception for a distributeicraft business in UK. This business plan deals with the feasibility analysis, idea generation, and diligence analysis at two the local and orbicular level to understand the commercialise and business factors.The merchandise analysis is besides d oneness, primarily through the sulfurary sources to capture the potential ingest of handicrafts in the UK market and the trends which the customer ar looking for in this fabrication. After analyzing the demand, the technical analysis was done for the business.For the success of any business, it is necessary that the idea or the butt of the plan should be strong. But it is in any case imperative that the plan should take into account a true picture of financials to have a strong foundation on which the business can be built upon. Ther efore in the report, a detailed preparation of cash fertilize analysis, profitability analysis and the expected consumption in the business has been taken care of. The report has taken into consideration the risk factor also which the business needs to consider before commencing on the work.Handicraft is a business which needs not only financial capital but also human capital and it is necessary that skilled effort 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 act to touch upon that issue as well. Also the manner in which the products would be sold and promoted in the market would be taken care of. We would not be opening our own stores for without delay and would be selling on to other retailers. However the idea of opening the stores is not discarded as whole for now and would be seen as an option at a later stage in the life of the business. Heavy spending is planned to promo te the products in the sign 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 persistenceThe handicraft industry is one of the most productive orbits in the economy. The reason being that this sector not only intakes the nude materials but also give employment opportunities to a fall of people. Thus not only financial capital and raw material is employed but also a lot of human capital is also use in this business (Garrison, 2008).According to United Nations Educational, Scientific and Cultural Organization (UNESCO) International Symposium on Crafts and the International Market Trade and customs codification, Manila, Philippines, October 1997.Handicrafts can be defined as products which are produced either completely by hand or with the help of tools. Mecha nical tools may be used as long as the direct manual contribution of the artisan remains the most bomberstantial component of the finished product. Handicrafts are made 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 symbolic significance (Robertson, 2002).Industry AnalysisUK has been a sylvan with a rich and diverse finish. Lot of migrant population also resides in various parts of the country. It is because of this that handicraft industry has played an important role in this country. The industry provides economic advantage a great deal because of the demand from various strata of the population (Mathias, 2001).Handicrafts have always attracted people much because of their cultural importance and it crosses barriers too. The customers in any market look for handicrafts from not only the local market but also from the other countries (Barlow, 1991). Therefore b oth the cultural and financial values are attached to this industry. This industry by its mass and production scale lies in the middle class 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 bantam players hire in this area. The sector employs a lot of people and thus acts as a medium of employment for lot of people. The sector has seen an increase in growth 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).Classification of Handicrafts IndustryHandicraft products can be distinguished into the followingMetal wareWood wareHand printed textilesEmbroidered and crocheted goodsShawlsCarpetsEmbroidered goodsBamboo productsZari goodsEarthenware and jute productsMiscellaneous handicraftsSWOT Analysis of Handicraft IndustryStrengthsMarket is diversified and has massive potentialPresence of large product variety because of various culturesLow capital investingFlexibility in production of goods as per market demandLow barriers to the entry of new playersProducts sold are high value ones and have diversified usageWeaknessLack of coordination amid government bodies and companiesInadequate information on the current market trendsLack of skilled labourOpportunitiesDevelopment of domestic tourism sector which helps in boosting sales. recitation 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 like India and China in legal injury of resourcesBusiness PropositionWe would be dealing in the limited set of handicraft industry as many products come under its purview. Our com munity 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 more or less 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 purpose 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 the major sources of foreign exchang e 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)retail 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 chiefly value based ones. Hence high margin and medium volume is generally the trend in the indust ryCompetitionThe following players currently operate in the market and sell wooden handicrafts in the market.World Art and Crafts Ltd.Java 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 publish gap in the market as according to our supply the current players in the market are able to provide close to 30000 units only. Hence we consider a huge potential to be catch up in the market.(Boseley,2009)The market is growing closely at an annual rate of 15%. Hence it is unyielding that the condenser would be initially 60% for the first year 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 the 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 give away for them to increase the margin given to the retailers so that they push the company product more in front of the customers.However in order to differentiate our go and to capture the customer base, it is necessary to have a basic strategic marketing plan. The following would be the strategies used by usSteady supply with timely delivery to fulfill 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 being 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 b oth in experimental conditions 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 embarrassing for the labour in UK to produce these handicrafts as the design in Indian art work is quite an 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 dupes sense to outsource some of the production work.Indian artisans are well known 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 understanding the customer taste and keep the prod uct 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 HandicraftsAll the products in the portfolio would be sourced from these six major exporters in India. These players have been selected by and by 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 diversify 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 take time to make every piece. The process m ay 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 positionSeasoning plantSurface plannerGrinderDrillerGaze machineSanding machineStructure and Civil WorkSr.No.ParticularsArea (Sq. feet)Amount (British Pounds)1Factory shed1800600022 stock room36010503Guard room802504Power room802505Boundary wall32006Washroom481505 labour quarters7Rooms120180008Wash cortege487009Office rooms18055010Fire fittings600Total30750Labour RequirementsHandicraft is a labour intensive product and thus a lot depends on the build of labour employed.EmployeesNumberAnnual Salary (British pounds)Production supervisor125000Accountant125000Skilled workers520000Semi skilled workers816000 out of practice(predicate) workers313000Peon110000Guard110000Total20119000Financial AnalysisParticularsLand and si te development constructPlant and MachineryOther fixed assetsPreoperative expensesPreliminary expensesProvision for contigencyWC MarginTotalMeans of FinanceParticularsPromoters capitalLong/ intermediate term loan from banksTotalBasic Assumptions underlying the financial projectionsThe construction period will last one yearThe company would work 365 eld a yearThe expected capacity utilization will be 60% in first year, 65% in second year and the step-up 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 depreciation 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 free value is assumed to be 5% of fixed assets.Sales ForecastSales Forecast (units)Year20102011Units950012000ConclusionThe business plan has been prepared retention 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 field will lead to establish my own business. These will result in successful and sustainable business.ReferencesAndrews, J.(2009).Handel allinglese, Playbill,. Accessed from http//www.playbillarts.com/features/article/4236.html (Last Accessed 5th prove 2010)Barlow, I.( (1991) Metropolitan Government. 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