Rajasthani Quilt

7/31/2019 Rajasthani Quilt

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KARGHACustom Rajasthani Quilts

Business Proposal

Confidential

Submitted By

Bhavya Soni

MBA

Central University of Rajasthan


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1. Executive Summary2. Mission3. Key to success4. Objectives5. Company Summary6. Start up Summary7. Company ownership8. Company location and Facility9. Product and Service

9.1 Product and Service description

9.2 Competitive Structure

9.3 Sales Literature

9.4 Fulfillment

9.5 Technology

9.6 Trend Tracking

9.7 Future products and services

10. Market Analysis summary

10.1 Market Need

10.2 Market Trends

10.3 Market Growth

10.4 Local Sales

10.5 Internet Sales

11. Market Segmentation

11.1 Gift buyers

11.2 Art buyers

12. Target Market Strategy

13. Strategy and Implementation Summary


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13.1 Value Preposition

13.2 Marketing Strategy

- Promotion

- Pricing

- Sales

- Sales Forecast

13.3 Web Plan Summary

- Web marketing strategy

- Development Requirements

14. Personnel Plan

15. Financial Plan

15.1 Financial Assumptions

15.2 Key Financial Indicators

15.3 Break Even Analysis15.4 Projected profit and loss

15.5 Projected balance sheet

15.6 Business Ratios


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KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni. We sell original,

high-quality custom quilts to discerning customers who give them as gifts or

keep them as heirloom artworks. We do the customer response, design,

piecing, and machine quilting; hand-quilted works are quilted by independent

local women hand-quilters with roughly 20 years of experience, with whom

we have negotiated per-piece prices. KARGHA quilts are manufactured in the

owner's home, and sold directly to our customers in Rajasthan through our

retail outlet at Rajsthali, Jaipur (Rajasthan), as well as over our website. Ourstrength is transforming even the vaguest ideas and descriptions from a

customer into beautiful and meaningful quilt designs which both giver and

recipient appreciate.

KARGHA works to provide custom, individually designed, warm and

snuggly quilt art to customers who value originality but don't have the time or

skills to create such pieces on their own. By working with our customers in the

design phase, we give them the satisfaction of having input into their gift or

artwork, without the intense investment of their own time and labor that

would be necessary to produce such a quilt themselves. The result is a

personalized, usable, beautiful quilt which will be appreciated for generations

to come.

We have been making quilts on commission as a hobby for one year now, and

cannot keep up with the demand from new customers when doing this part-

time. Starting, we will open KARGHA as a full-time venture operated out of

our home. Our goals are to be able to pay ourselves and our independently

contracted women hand-quilters a decent wage for doing the work we love,

and to repay a small start-up loan within two years of opening the business.


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We will minimize the financial risks by requiring payment at the time of

commission. For the customer, this means that they can take as long as they

want to work with us on a design, but once we have agreed on the design, they

must pay us in full for the quilt before we will begin creating it. This

arrangement has been the one which works best for both sides in the past.

Most of the value of the quilts comes from the labor of designing and creating

them, rather than from the materials (fabric, thread, etc.) Of which they are

composed. Our start-up requirements are therefore fairly small (under

Rs.50,000):

Rs.10,000 of inventory (a basic fabric library) Rs.10,000 for a second sewing machine Rs.16000 cash reserve Rs.8000 for website development Rs.6000 of various supplies, legal fees, etc.

We will invest Rs.25,000 to start the business, and need another Rs.25,000 for

initial inventory of fabric and equipment. Based on current prices for our

quilts, and the time needed to complete each one, we are forecasting sales of

Rs.4,50,000 in the first year. We expect to begin breaking even in the third

month.

At KARGHA, we know that our customers value originality and high-quality

work as much as they value their time. Using only a small portion of their time

to provide us with the important information about their desires in

commissioning a quilt, we will provide them with high-quality, custom-


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designed quilt art which can proudly be given as a gift, kept as an heirloom,

and displayed prominently as a piece of artwork in a home or office. In the

process of delivering customer value preposition our aim is to empower the

women labor associated with us.

Effectively establishing our reputation as an exceptional business:Nationally, we are unique in creating truly custom-designed quiltswhich do not rely on standard geometric quilt designs.

Catering to our customers' need to feel unique by emphasizing thepersonal nature of the customization process, which puts the customer,

and his or her personality and feelings, at the center of the product.

Quickly (1-2 weeks) turning out these finished custom quilts, bothlocally and through our website, for a price premium which enhancesthe prestige of the customized product.

Maintaining originality of design and quality of skills to turn bulk,inexpensive fabrics and materials into high-end artworks which

can bring high prices.

Create and sell 6 original, custom quilts per month, at prices whichcover owner's labor.

Use contacts in local artisan groups and in our customer base to createsuccessful word-of-mouth advertising.


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Establish a website to provide more information and to initiate non-localsales.

Pay back initial investment with 10% interest in two years

KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni. We sell original,

high-quality custom quilts to discerning customers who give them as gifts orkeep them as heirloom artworks. We do the customer response, design,

piecing, and machine quilting; hand-quilted works are quilted by independent

local women hand-quilters with roughly 20 years of experience, with whom

we have negotiated per-piece prices. KARGHA quilts are manufactured in the

owner's home, and sold directly to our customers in Rajasthan through our

retail outlet at Rajsthali, Jaipur (Rajasthan), as well as over our website. Ourstrength is transforming even the vaguest ideas and descriptions from a

customer into beautiful and meaningful quilt designs which both giver and

recipient appreciate.

KARGHA works to provide custom, individually designed, warm and

snuggly quilt art to customers who value originality but don't have the time or

skills to create such pieces on their own. By working with our customers in the

design phase, we give them the satisfaction of having input into their gift or

artwork, without the intense investment of their own time and labor that

would be necessary to produce such a quilt themselves. The result is a

personalized, usable, beautiful quilt which will be appreciated for generations

to come.


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To begin our business, we will need a stock of materials, and time to begin the

first commissions for the business, which are currently being negotiated with

two interested buyers, who have offered to advertise our business through

word of mouth with friends and family members. We plan to begin

our official advertising campaign by placing brochures in likely locations

around Rajsthali and RTDC hotels, and by creating our business website

Initial inventory consists of threads and a basic fabric library:

Between 1/4 and 1 yard each of 300 different cotton fabrics, coveringhues and shades in all color groups

3-4 yards each of 25 different cotton backing and background fabricsThese fabrics will give us the necessary initial range to execute a wide variety

of designs which rely on subtle color grading and variation for their

effectiveness. The fabric library will be supplemented month by month, as

designs are finalized and as particular fabrics need replacing, or new, more

popular ones, become available.

Expenses include:

A fabric board, at least 8'x8', in order to lay out patterns vertically fordisplay to clients and during the design process

Initial marketing materials (brochures and website) Extra insurance to cover the value of the inventory and the sewing

machines, as well as work in progress

We would also like to have a decent initial fund of cash in our businessaccount, about Rs.16,000 to cover unforeseen expenses such as repair of


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the sewing machine, or promising new advertising possibilities (like a

local quilt convention)

Legal Rs.2000

Fabric board Rs.2000

Brochures Rs.500

Supplies: rotary heads, pins, extra machine needles, insurance Rs.1500

Website development Rs.8000

Total start-up expenses Rs.14000

Cash required Rs.16,000

Start-up inventory Rs.10,000

Other current assets Rs.10,000

Total assets Rs.36,000

KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni.


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The company is located in the home of Mr. Bhavya Soni. Some quilting work is

done off-premises, in the home of the contracted women hand-quilters. All

locations are maintained smoke-free, since fabric items can easily absorb

odors.

KARGHA manufactures all-cotton, high-quality, custom quilts with original

designs. Through our design process, our customers work with us to provide

the information, ideas, and sometimes even images (like photographs) that

allow us turn their intentions into beautiful works of quilt art. When

completed, our quilts are hand-delivered or shipped securely to our clients, or,

if they prefer, to the intended recipient of the gift, along with instructions on

the proper care and maintenance of their heirloom-quality quilt.

We make six different quilt options, which are differentiated by size into "crib

quilts" (for babies and children), queen-size quilts, and king-sized quilts, and

by quilt type (machine quilted or hand quilted). Use of hand-dyed fabrics,

larger sizes, and special requests or processes (including photo transfer, etc.)

will require additional charges and completion time.


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Quilting type: Price Time

Machine Rs.600 3-4 weeks

Hand Rs.750 4-5 weeks


Machine Rs.1,000 6-7 weeks

Hand Rs.1,350-1,500 8-9 weeks


Machine Rs.1,500 7-8 weeks

Hand Rs.1,750-2,000 9-10 weeks

Price and time variables are determined mostly by the intricacy of the image

and quilting designs requested, and reflect additional labor costs. Time to

finish does not include shipping time, which will be determined (and paid for)

by the client. Since these are custom artworks, we will encourage our local

clients to view the finished quilt themselves before sending it to a recipient,

and may even provide delivery services for local clients.

For customers ordering over the web, we will make arrangements to ship via

their preferred shipper, but will recommend insured delivery with signature

and confirmation via ups and fed-ex, since the quilts are irreplaceable. When


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we ship, rather than deliver, we will provide the primary wrapping of the

quilt, first in un-dyed cotton, then in waterproof plastic wrappers within a

larger, padded box, to ensure safe arrival in the quilt's original condition. I will

not ship any quilt without delivery confirmation or insurance, as each quilt

represents roughly 1/6 of our monthly earnings.

There are only a handful of other businesses offering custom-designed quilts,

and our competitive advantage stems from our design expertise. Many

businesses which claim to offer "custom quilts" are really just offering

customers a choice between several pre-determined original designs. We, on

the other hand, can help a customer generate ideas, even take basic

information about the color of a child's room and his favorite book and create

a completely new design which is tailored to the customer's taste. And, most

importantly, our design features emphasize our client's ideas and feelings, and

our skills, by creating quilted pictures, rather than the traditional,

geometric quilt designs other businesses offer. Our real challenge is simply to

get our name out there, because we are offering services far more complete

than most other quilt makers.

Our closest competitors are local pre-manufactured quilt retailers, other quilt-

selling websites, and the do-it-yourself quilting market. However, none of

these competitors offers the combination of factors which define our niche.

Retailers, both local and national via websites, offering finished quilts allow

the customer only to choose however pre-determined designs, with

customization limited at most to color choices. The only other option for

custom-designed quilts, offered through quilting classes and books, requires

an enormous investment of time on the part of the customer.


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Indirect competitors include other personalized services and gift options, from

season tickets at a cricket game to other art media, including sculpture,

paintings, and drawings. Our challenge is both to enable customers to see

personalized quilts as an appropriate choice, and then to demonstrate the

superior quality of our quilts.

KARGHA fills a unique niche, offering the status and personalization available

with a fully custom quilt, without a major investment of the customer's time.

We are therefore targeting those busy professionals who see prestige in gifts

and purchased artwork not solely in its expense, but by the extent to which itreflects their values: handmade or unique, rather than mass-produced;

consisting of all-natural materials, rather than synthetics; made by (and thus

funding and supporting) an identifiable small-scale artisan rather than a large

corporation; and reflecting sincere feelings of love and caring, rather than

commercialized, standardized emotions (more information on our target

market can be found in the market analysis section, below.)

At the end of this plan are sample brochures such as those we will distribute at

local arts and quilting retailers. These brochures contain pictures of some

previous quilts, as well as customer comments on the high quality of our

workmanship and willingness to customize our designs.

Each brochure also includes the URL for our website. Sample pages from the

website have been printed out and attached to the plan as well.

We buy most of our fabrics from the local division of a national fabric chain,

to keep down costs. Since most of the design value comes from the

combination of fabrics, our ideal fabric supply provides a broad range of


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styles, colors, and textures available in small (1/4 yard) to very large (entire

roll) amounts. The local fabric store in this larger chain meets this needs, and

their low prices (Rs.30-80/yard) for fabric ensures a good return on the fabric

expense.

Occasionally, customers may want a particular theme or style in the fabric

choices, so we also maintain the option of shopping from other local fabric

retailers, and of charging a premium for specialty or special-order fabrics

(locally hand-dyed artisan cottons and silks, brand-name fabrics from disney,

mayur etc.). Many of the artisan fabrics are available through craftspeoplehere in Jaipur, while the national ones are most available online.

Our business as a whole is a relatively low-tech establishment in terms of

manufacturing. Since, we stress the value of individually designed and hand-

crafted quilts. However, our use of a website will attract more technologically-

savvy customers, and we anticipate possibilities for design which incorporate

photos and other images which are emailed to us by the customer, enabling

their direct input into the finished design.

We will use a database to track our orders and to spot trends in customer

requests. For example, we may find that web customers more often request

customized text embroidery on a quilt, while our local customers want to

choose individual fabrics from our collection. Keeping track of these trends

will enable us to tailor our marketing approaches to different customer

groups.


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Our products are driven directly by customer demand. Whatever they request,

within reason, we will give them. So, each design, each quilt is the direct resultof suggestions or requests from the customer, and future products will reflect

any changes in customer preferences.

In the future, once our business is established, we may take some design time

to create a series of stock elements which can be combined in different ways to

provide less expensive options for customers who want customization, but

cannot afford to fully commission their own quilt.

Eventually, we would like to employ other local craftspeople to do the piecing

and quilting of the artworks, so that we can focus on design and customer

interaction. However, this is a long-term goal (5-10 years away), and will

depend on increasing demands for our products which require additional

labor.

Quilts are not only decorative; they can be cherished gifts and investments in

artwork. KARGHA will target two separate groups - gift buyers, particularly

people buying quilts for new children and grandchildren, and art buyers, whoare looking for a piece of usable art which they can keep and pass on to later

generations or sell in the future as an antique. Because such high quality quilts

are more labor and time intensive to make, they are more expensive than

ordinary crib or bed coverlets. The market most interested in our products

will, therefore, be people with an above average level of disposable income,

who value quality workmanship and original - even custom - design work in


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the gifts and decorations they choose to purchase. The capital city has a high

percentage of such consumers who support a number of craftsmen and

women, but very few of these crafts involve high quality textile work other

than clothing. This is a market niche that can and should be tapped.

"Do you believe that spending Rs.15,000 on a media center is vulgar, but that

spending Rs.15,000 on a slate shower stall is a sign that you are at one with

the zen-like rhythms of nature?"

In his book, on the new counter culture-as-mainstream elite, David Brooks

describes a typical grocery store catering to discriminating premium: "the

visitor to fresh fields is confronted with a big sign that says 'organic items

today: 130.' This is like a barometer of virtue. If you came in on a day when

only 60 items were organic, you'd feel cheated. But when the number hits the

three figures, you can walk through the aisles with moral confidence." This

scene takes place daily in stores.

These sorts of consumers abound in the Jaipur, and as brooks points out, their

wealth and status are based on education, brains, and merit, rather than on

inherited wealth. This new elite values high-quality, time-intensive products

that are visibly non-mass-produced, and this value is understood as a moral,

not just political, calculation. While such consumers have numerous optionsfor high-end foods, bath products, furniture, and so on, they do not have a

great deal of free time, because their wealth and their lifestyles involve the

full-time work of all adult members of the family (preferably in some socially-

conscious or technologically advanced field).

We are offering these kinds of consumer access to individually crafted, locally

made, unique, high-quality quilt art. In buying our product, our customers get


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the kind of personalized gift they want, and can pay someone else to invest the

time needed to make the item, since their own time is already full. Quilts, in

particular, speak to their ideas about tradition and slow, time-intensive labors

of love that these customers may associate with their own mothers and

grandmothers, and which the women in particular may feel guilty for not

being involved in them. For a price premium, we will make an original, usable

work of art that they can be proud to give to their discriminating friends and

families, from its all-cotton fabric and batting to the brochure which describes

our small, local artisan business.

Quilting used to be seen as an old-fashioned, rather fuddy-duddy kind of

endeavor. Recent exposure to issues in the historical aspects of quilting as a

forum for women's expression has begun transforming this thinking, and

quilting is on the way to being recognized as a valuable (and occasionally

subversive) form of mostly-female art. This kind of counter-cultural

interpretation will, of course, appeal to our market segment.

In addition, we are targeting in beginning more and more to identify their

socially-conscious consumerism as rooted in local buying, which is an

advantage when selling in the Jaipur market. We anticipate that some of our

local customers will initially encounter us online at our website when

searching for locally made gift products, and will only then come to visit us in

person.

With the increasing use of technology in everyday business endeavors, there

are expected to be an ongoing growth in the number of good-paying jobs

utilizing creative and critical thinking skills, the characteristics that define our


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target market. We also expect that as the economy continues to recover, high-

income consumers will feel more and more confident about placing some of

their disposable income into more decorative and luxury items, such as the

custom quilts we are offering. Since the income of many of the urban elite

residents of the Jaipur premium is tied directly or indirectly to the technology

sector, improvements in revenue among high-tech industries in the next 5

years will increase our market segment, as well as their comfort level

concerning large purchases. Art-buying in the Jaipur, in particular, seems tied

to the fates of technology firms, according to Royal art gallery owners. When

stock goes up, the young, high-tech employees there seem more willing to

invest in items like artwork, rather than hanging onto their cash in case of

hard times.

Art world news noted in a September, 2009 article on art galleries that the

Jaipur high-end art and gift buying population, in particular, places a high

value on supporting local artists. According to the 2001 census, the Jaipur has

almost 1 and a half million residents with incomes over Rs.50,000, including

326,142 residents with incomes over Rs.10,00,000 per year, who would easily

be able to afford our products. Within the Jaipur, the vast majority of high-

income residents are clustered in urban areas such as the c-scheme and Raja

Park metropolitan areas, and larger college cities like Bajaj Nagar. As these also

tend to contain more liberal populations who express interest in issues such as

art. We are focusing our initial local marketing on the C-scheme, Raja Park

and MI Road areas, rather than traveling to more rural towns.


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A recent study by TOI reported that nationally, 43% of all internet users had

household incomes of at least Rs.50,000. This means that almost half of the

people with access to our website are in the target demographic of wealthy

surfers who would be able to afford one of our products. In the Jaipur, an

internet-savvy area, only 38% of all internet users had such high incomes,

meaning that our marketing strategy locally needs to focus on areas where we

can guarantee we will be contacting a high percentage of our richer

customers.

A word tracker search on "gifts" reveals that approximately 8,000 people permonth are looking for "gifts," "personalized gifts," "unique gift ideas," and "baby

gifts." by including the right keywords in our website, and promoting the idea

of custom quilts as a personalized gift idea, we can make our services more

visible to these potential customers.

Our market, aside from geographical divisions (ie., Jaipur versus internet

customers), is generally divisible into two main categories: people who are

buying gifts for others, and those who are buying a quilt as a "gift" to

themselves or an investment in heirloom-quality quilt art.

We hope that many of our customers, having purchased one quilt from us,

will come back to us for more unique gifts; we expect that our long-term

customers will thus move back and forth customers the two categories.

Customers will generally encounter us with only one of the two agendas in

mind, and we have developed different strategies to appeal to these different

needs.


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These are potential customers seeking to buy a gift are looking for something

that speaks of their own taste, but more than that, of their intimate knowledge

of, and thoughtfulness toward, the gift recipient. For our customers, KARGHA

becomes the magic medium by which their caring feelings towards the

recipient are made manifest in a tactile, tangible object, which can then be

passed on to a friend or family member who will cherish it (and the giver)

forever. The key to this transformation is the design process. Our customers

give us as much or as little information about themselves and the gift recipient

as they wish - the more detail, the better the quilt can reflect the unique

personalities, wishes, and love of both people. We have created basic forms

and questions for all our prospective customers to consider, but in-person

consultations, supplemented by email and telephone conversations with the

designer for our website customers, will be the selling point. Our customers

are getting personalized services, and they will feel pampered and catered to.

these customers are buying our quilts to display in their houses and offices, to

declare to their guests, their clients, and their colleagues that they value high-

quality, original art with a hand-made feel. These clients may send us

photographs of the locations in which they would like to hang their quilts, and

consult with us about their taste in subjects, colors, and styles. Our design

services for art-buyers are more akin to interior designing than to gift-

making, as we will try to make quilts that both co-ordinate with, and yet stand

out from, their surroundings. These quilts require the same sort of consulting

as gift quilts, but with a focus on the buyer only, and not a recipient. These

quilts may depict aspects of the buyer's hobbies or occupation. They may

incorporate meaningful elements from the buyer's family history or

professional journeys. They may depict treasured pets or family members,


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living or passed. These customers are commissioning artworks that will

beautifully represent some aspect of their lives of which they are proud.

By focusing on gift-givers and art-buyers within premium market, we are

remedying a major paradox these clients face, and taking advantage of our

unique market niche.

These customers value high-quality, non-mass produced goods, but don't have

the time to make them. We specialize in individualized original designs for

people who can afford to pay for high-end quilts.

Both segments require some level of input into the design phase of the product

in order to obtain the kind of personalized feel they are looking for, and our

expertise in translating their ideas and feelings into images fits this needperfectly. In addition, the personalization services add value to the product far

beyond the high quality of our workmanship by making our customers - and

the quilt recipients - feel special and unique and because these two different

segments of the customer base may approach their initial searches via

different routes. We are locating brochures and advertisements (locally) in

three places:

General upscale or high-end consumer areas like organic grocerystores, local symphony pamphlets, and upscale day care facilities

Gift-centered retail centers such as artisan co-ops, holiday markets, andupscale shopping centers

Art-centered retail centers such as antique stores and art galleries


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To target both segments on our website, we will include searchablekeywords such as "personalized gifts," "baby gifts," "custom artwork," and

"gift ideas."

We hope that many of our customers, having purchased one quilt from us,

will come back to us for more unique gifts; we expect that our long-term

customers will thus move back and forth between the two categories.Customers will generally encounter us with only one of the two agendas in

mind, and we have developed different strategies to appeal to these different

needs.

At KARGHA, we understand that you are busy, but that your limited timedoesn't reflect your unlimited love and caring for your friends and family. We

have the time and the skills to turn your ideas and feelings into a snuggly,

warm, and beautiful quilt that you will be proud to give as a gift or display on

your wall, an artwork which can be appreciated for generations to come. Our

prices are high because they reflect the many hours of work we spend

designing, piecing, and quilting your original work of art. Buying a quilt from

us is an investment - in your relationships with your gift recipient, in the value

of the artwork, and in your own preferences and personal style.

Our marketing strategy relies on word of mouth, an inexpensive, attractive,

and fully accessible display space (our website), and a small amount of ad

placement.


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Our promotion strategy is threefold:

To locate brochures and ads about our product in areas where ourcustomers normally shop: high-end organic grocers, artisan co-ops,

local bookstores, and the like.

To spread word-of-mouth among friends and family working in thekinds of high-tech and high-income, socially-conscious jobs that our

customers inhabit

To create and promote a website, linked to other quilting sites, topacific-area quilting promotions, and to sites about local crafts

In addition to these direct promotions, we have arranged for a selection of our

quilts to be sold at a local artisan's fair, where information about the possibility

of buying a custom quilt will be prominently displayed.

Our pricing is high not only to compensate for the labor involved in creating

the product, but to establish our custom gifts as a luxury good, with all the

status considerations that involves. Our customers are paying for the product,

but they are also paying for the prestige of being able to commission an

original work of art.

Our sales strategies will focus on the personalization process by responding to

all potential customers' inquiries in person in the medium they most prefer -

emails will be responded to by email or phone, phone calls will be returned by

phone calls and by face-to-face visits. We have a large collection of existing

quilt designs to show potential clients, so that they can see the quality of the


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work offered. Ideally, these consultations will take place in the owner's home,

where our customers can browse through the fabric library to get inspirations,

and can form a personal connection to the owner/designer, and imagine the

contract as the beginning of a creative partnership.

In addition to the relatively minor direct costs of fabric, thread, notions, etc.,

used up in each quilt, we have another direct cost for hand-quilted pieces

which is paid directly to the independently contracted hand quilters. For each

hand-quilted crib quilt, the quilter receives Rs.150; for each queen-sized, she

receives Rs.350; and for each king-sized, Rs.400. These additional non-

inventory direct costs are listed in the profit and loss table.

Based on current prices for our quilts, and the time needed to complete each

one, we are forecasting sales of Rs.4,50,000 in the first year.

KARGHA's website will primarily showcase the range of styles the owner has

used in the past. In addition to the gallery, the website will offer information

on pricing, the design process and expected customer participation.

The owner has some experience designing websites, but will be quite busy

getting other aspects of the business ready for opening. We have hired a

colleague with extensive website design experience to create the preliminary

setup, based on layouts we have specified. The site will be hosted by a hosting

provider with whom we are familiar, who allows relatively inexpensive

upgrades in space and features, should we want to expand the site in the

future. Since the purpose of the site is mainly marketing related, and no actual


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sales are transacted there, the focus will be on providing useful information to

potential clients, sharing stories and images of past quilts, and offering tips and

encouragement to other creative and art quilters out in cyberspace. The

website will also include a list of upcoming appearances and lectures by the

owner.

The website URL will be included on all our brochures and business cards. We

will give a couple of cards to every client along with their completed quilt,

with the request that they pass on them on to friends and relatives who might

be interested in our quilts, if they were satisfied with their own. This has

worked so well in the past that the current website (a one-page bare-bones

site) already gets over 10 hits a week.

The development requirements for the website are external. Our colleague willdesign, create, upload, and launch a revised website for KARGHA. He will use

dream weaver to create the site, and estimates that time from initial design to

launch will take about three weeks, since we have already approved the layout

and map.

The company has only one full-time worker - the owner. KARGHA will also

contract with independent quilters to do quilting work on the hand-quilted

pieces. The portion of the quilt price paid out to the hand-quilters is listed in

the profit and loss table, under direct cost of sales.


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The owner has several years of experience at marketing, designing, and

producing custom quilts for others. He has been working part-time at this

business for the last one year; over the last year, demand has increased to the

point where he can no longer do quilts simply as a hobby without saying "no"

to 3/4 of the commission requests. He will use his contacts and word-of-

mouth advertising to turn this into a full-time business.

One of the best contacts he currently has is with two local hand-quilters,

through the local quilting association. Both have done contracted work for

him before and are very interested in taking on a more demanding schedule ofcommissions. The commissions listed in the sales forecast (Rs.150 for a crib

quilt, Rs.350 for a queen, Rs.400 for a king) have been worked out already

with the contracted quilters. One of these women is retired, and one is a

housewife whose children have just left for college. Both make use of

advanced hand-quilting techniques and are very skilled; they have experience

with a range of styles, fabrics, and thread types.

Owner Rs.24,000 Rs.28,000 Rs.30,000

Other Rs.0 Rs.0 Rs.0

Total people 1 1 1

Total payroll Rs.24,000 Rs.28,000 Rs.30,000


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KARGHA will begin commissions in January, 2012, with the first quilts to be

completed within 3-6 weeks after commission.

We anticipate a steady and increasing interest in quilt commissions, based on

the trends we have seen in the last several years. The financial plan is built on

the tax and interest rates shown below.

General assumptions

Year 1 Year 2 Year 3

Plan month 1 2 3

Current interest rate 10.00% 10.00% 10.00%

Long-term interest rate 10.00% 10.00% 10.00%

Tax rate 30.00% 30.00% 30.00%

We expect a steady but slow rise in sales over the next three years, up to the

maximum capacity of 6 quilts per month. As the business and its reputation

grows, we will be able to direct clients toward the best quilt for them more

efficiently, and streamline the design and production processes.


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The break-even analysis shows the projected break-even point for KARGHA,

taking into account all variable and fixed costs, including fees paid to thecontracted quilters. We will pass the break-even point in the third month, and

be profitable thereafter.

Break-even analysis

Monthly units break-even 3

Monthly revenue break-even Rs.2,613

Assumptions:

Average per-unit revenue Rs.862.26

Average per-unit variable cost Rs.116.98

Estimated monthly fixed cost Rs.2,259

The profit and loss for KARGHA is encouraging. In addition to paying good

wages and fees to the owner and the contracted hand quilters, the business

will be able to pay for the necessary insurance, taxes, loan interest, and a small

marketing budget, and still make a modest profit.

The projected marketing and promotion expenses are low, because the owner

already has an established reputation and clientele, from her part-time forays

into quilting in the last few years. The marketing budget includes items like

advertisements in local papers and magazines, church and synagogue


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directories (a great source for customers seeking gifts!) And yellow page ads,

as well as brochures in likely local venues.

The cash flow table and chart show our projected cash position. The table also

shows the planned repayment of the start-up loan. (Appendix)

The projected balance sheet is quite solid. We do not project any real trouble

meeting our debt obligations. As business progresses, we will build up our cashreserves so that we can take a vacation or sick time starting in the third year.

We would also like to be able to pay our quilters bonuses for their 20th quilt

completed, 30th quilt, and so on, although these numbers are not included in

the financials of the plan - actual amount will depend on achieving the sales

goals set forth, so we are leaving ourselves some flexibility.

The ultimate goal is to create a suitable net worth to see ourselves into

retirement within 20 years, since this is not the sort of business that can be

sold to another person. Most of our assets are cash, and we expect this trend to

continue in the future, given the nature of the business.

The some of the more important ratios from the quilting for

individuals industry are given in table attached. Our ratios differ from the

industry standard in several areas; this is largely because this closest industry

type more accurately fits what our subcontracted quilters are doing, and does

not represent businesses engaged in creating new gifts/works of art from

scratch.

Documents

Rajasthani Quilt