You are planning to set up your own small business but you only have £50,000 in cash to use as start-up capital. You will need to prepare a business plan in order to raise the additional finance that will be required to meet your budgeted operations. You may assume that you can borrow what you need from your bank at a given rate of interest.
A business plan is an outline of the new and innovative ideas which shows the direction of a way towards achieving the goals of the business. It helps the executives of the business to get a blueprint so that they can follow it and can offer their services as expected by the owner. This also helps business in fulfilling the expectations of the customers and stakeholders (Ekanem, 2017). This report is being prepared in order to prepare a business plan for an innovative and affordable business that is Woods and Furniture. This business will majorly focus on the manufacturing of custom cabinet for small residential, resort and commercial market. The business plan will offer all the aspects of the business i.e. background, objective, and target market. Along with this, it will perform the industry analysis and competitors’ analysis. Further, it will highlight the factors that will affect the business that is external and internal factors of the business environment.
The business idea is about to make custom cabinets for the small residential, commercial and resort market. The founder of the business i.e. Mr. Chris has little experience in the cabinet and construction industry. The name of the business will be wood and furniture. The business will be possessing staff, office space, and cost of administration and low level due to the small budget. Over some years of being part of the construction business of homes, the owner of the business has observed a need for a cabinet line with a wide option of choices such as design, quality, and processing. Wood and furniture will fulfill those consumers’ needs. Making a decent position in the market in the residential, commercial, as well as resort segments, the business plans revenues to increase substantially between financial year 3 and 2. The owner of the business has invested a small amount of capital in order to cover the start-up expenditures. The business is presently looking forward to taking a commercial loan of 5 years of $ 102,000 in total at 14% per annum, in order to cover the operating expenses. A portion of loan amount of $ 62,000 will be required to invest in the fixed assets as the capital expenditure and remaining amount will be required for bearing the expenses of other costs like undertaking the market research, promotional expenses of business etc. Also, Company have to take warehouse on rent to maintain the inventory of the raw material and finished goods.
The objective of the business is to become the top supplier of the cabinet to the middle-class residential homes and to attain a decent place in the market in order to have substantial growth in terms of revenue as well as customers. Moreover, the business idea is all about offering comfort to the customers of maintaining their important stuff and offering a desirable place to accommodate the things available in the homes or commercial areas.
The mission of Wood and Furniture Company is to offer quality products within the prescribed time to the customers and most importantly in the limited budget of the customers. Besides this, the business majorly planned to offer comfort to the customers in reducing their efforts in the system of ordering.
The wood and Furniture business is a new company that will offer quality and reasonable cabinet supplier market by fulfilling the challenging organizational, development and quality needs of the owners and construction professionals. Moreover, it is planned for that small business and residential that cannot afford costly with high-quality infrastructure.
Total expenses of the start-up will comprise stationery, tools, and associated expenses. The business has one owner who will provide the initial start-up capital to the business. Besides this, the business is planning to take a 5-year commercial loan, which will support it in fulfilling the requirements of the cash flow.
The products of the business are majorly made up of two major components that are:
The shelves and boxes will be ordered from one supplier and will be delivered in the form of kitset. They can be completed with custom veneers.
The panels, drawer, and doors will be ordered from a local supplier. Besides this, the business will possess two designers with various numbers of custom finishes.
The product will be manufactured and completed under the supervision of the owner who is very particular about the needs and wants of the customers and majorly about the finishing and designing of the final products.
The Wood and furniture will be concentrating majorly on the designers, suppliers, and owners in the regional area who are incorporated in the resort, commercial and residential development segment. In the United States, the furniture manufacturing and its retailing is a very essential aspect for the economy of the country. The worldwide industry of home goods incorporates distribution, retail, and manufacturing of the residential and commercial furniture. During the time period of economic recession, the whole industry was adversely affected as customers cut back their expenses on the spending that are not so important, putting off residential and commercial developments because of lower disposable income. Furniture stores have made around 106.78 billion U.S. dollars of sales in 2015 (Statista, 2015). The office furniture market size of U.S was projected at 10.74 USD billion in 2016. The growth of multi-functional furniture combines with acceptance of the methods of online retailing to decrease of operating expenses comprised in the distribution and sales are expected to poise the growth in the whole industry by 2025. But, an unadorned downturn in the demand corresponding with the 2007-2009 recession of U.S., balanced solid gains in other years, ensuing in slight changes in the demand over the 2006-2016 eras. The demand for the furniture of office is very recurring, fluctuating in regards to trends of macroeconomic like the construction of office building, level of employment and capital investment (Grand View Research, 2016).
The stated market analysis has reflected various aspects of the whole industry, however; the business that is Woods and Furniture will try to cover the market share of 4-5%. It is not so difficult to reach this target if the stakeholders of the business will work hard to attain this and earn maximum profit, particularly in this developing industry or market.
Wood and Furniture will be concentrating on contacting architects, contractors who deal with the residential home market. Will try to make themselves known to all these types of entities will make strong front-runners, as well getting the personal recommendations to the owners of the home.
The furniture market or industry of U.S. is very competitive in nature it involves two major companies deals in the similar type of products that are Hancock & Moore and Bernhardt Furniture.
Bernhardt Furniture Company- Bernhardt Furniture, has it’s headquartered in the North Carolina, which was founded in 1889 and formed white oak furniture for the domestic market or customers. The business very rapidly expanded its business operations and it is just because of the profitable association with the merchants and distributors and was delivery of the tables, cabinets, bedroom furniture, and chests through rail to the big city marketplaces in the whole country. The line was stretched to comprise filled furniture for the complete residence area by 1958, along with offices and showrooms in the country, and Bernhardt Furniture Company was started considered as the benchmark for the whole industry. During the time period of 1980’s, Bernhardt Furniture Company branded its name and stretched further operations to comprise a contract partition supplying to the conference rooms, public spaces, and offices (Bernhardt, 2018). In the year 2008, Bernhardt Furniture Company started expanding its business in the segment of custom furniture division, which was named as Bernhardt Interiors. Bernhardt Furniture Company expanded their big territory in 2009, to comprise Bernhardt Hospitality, which was made to serve in the hospitality industry.
In the starting period of 1980’s, Bernhardt Furniture Company commenced their worldwide expansion, with foreign regional offices, and with the staff of 50 supervision quality controllers and suitable time delivery of their foreign construction. Sagely, Bernhardt Furniture Company made use of their foreign manufacturing facilities to improve their global capabilities of production, and handles facilities of nine productions in North Carolina, which manages their extremely talented and experienced workforce, and holds well-organized and eco-friendly technology of production. Presently, Bernhardt Furniture manages a worldwide network of the retailers comprising: Bernhardt galleries and stores select department stores and authorized dealers in 51 countries and their furniture collection comprises contemporary and traditional styles widespread in the global market (Goods home furnishing, 2018). Their hard work has not been highlighted, as Bernhardt Furniture Company has got various awards for the designs of the furniture, environmental accomplishments, has individually made many programs related to the environment and is said to be a main supporter of LEED.
Hancock & Moore- Hancock & Moore has it’s headquartered in the Hickory North Carolina, which was founded in 1981 by Jimmy Moore. The company has its specialization in the custom-made traditional, modern, contemporary, and high-end furniture, and provide a mid-price and low material line. Their products are completely handmade in the country U.S., every piece of the product takes around 80 hours to manufacture, and is obtainable in the choice of the customer in terms of fabric, wood, leather, trim and comprises solids to unusual patterns and prints (Hancock and Moore, 2018). The whole company is bound with strict policies that are known as in-house environmental policies and make use of raw material and wood from sustainably maintained forests. Hancock & Moore possess four sister firms comprising Century, Jessica Charles, Highland House, and Randall Allen. All of them are obtainable at the retailers all over Canada, and the U.S., whereas Century Furniture is obtainable at all the retailers in the world. Century Furniture also operates and owns its showrooms for the trading of the designs, and possess a showroom work as an agent in Chicago, New York, Atlanta, Scottsdale Arizona, Boston, Denver, Washington DC, Dania FL, Laguna Niguel California, and Los Angeles (Boyles Brand Central, 2018).
Both the competitors in the market are very strong who give strong competition in the market to the big as well as small retailers. This reflects that Woods and Furniture will face huge competition in the market and in order to survive there and attain competitive advantage it needs to make different strategies.
The cabinet market comprehends the notion of support and service and is likely to recompense it when the subscription is evidently stated.
There are various competitors in the domestic market. Although every one of them offers a quality product. There are some factors that rule the cost of all galley projects that is a product, services, scope, and design. Many people incorrectly have the perception that the project size and the brand name choice products will offer the best results. But it is the design that will offer the highest influence on the value and quality of the investment of the customer.
The U.S is experiencing stable growth in the markets and there is a universal agreement of sustained growth in this area. Being one of the portions of this growth, by offering attention to the development of designs, project management, installation, and ordering process will help in maintaining the Woods and Furniture business on the track of success.
The strategy of sales of Wood and Furniture business is to make themselves known or famous with the help of emails, personal contact, and advertising to the contractors, architects, and customers who are majorly involved in the construction, design, and demand if the homes and commercial developments.
Possessing an office or showroom can result in a tool, as it offers a chance for the common public, a new visitor to the area, and professional of construction.
Political- USA is said to be the second biggest democracy in the whole world. The president is elected for the time duration of four years and called as the head of the country. Wood and Furniture business will be initially operating in the market of U.S. and needs to deal with all the rules and regulations formed by the government such as license, patent, trademarks, etc. Moreover, the government of the country always encourages entrepreneurs to come up with the new and innovative ideas and contribute something to the growth and development of the country.
Economic- The US possesses the largest economy in the whole world in regards to the nominal GDP. It is said to be a country from where businesses like McDonald’s, Microsoft, Google, Coca-cola, Subway, and Apple and various others are leading and determining the socio-economic debates of the world. Though, in 2009 recession has adversely influenced the US economy (David, 2017). Various businesses distorted and the rate of unemployment increased to a shocking point. This reflects that the company can smoothly operate in this market and economy however company need to focus on the strategies and should be framed by considering the recession impact.
Social- the US is known as the thirst most popular nation in the world with a population of around 326 million. It observes the birth in every 8 seconds; along with this it also sees one death in every 11 seconds (Pestle analysis, 2014). The Wood and Furniture need to focus towards following its corporate social responsibilities in order to build trust among the people of the country and support social causes to support the government. This will eventually increase the trust of the government and the public towards the company. The company can also offer employment opportunities to the people in order to reduce the level of unemployment.
Technology- the US is known as the worldwide leader in technology and science. Americans have an ancient captivation for the technology and businesses like Microsoft, Facebook, and Apple and various others have acknowledged the technological wants of the Americans and the people across the world (Digital Journal, 2018). This reflects it is very important for a business to be operated by implementing technology in the business so to increase the speed of the operations and make work easy. The Woods and Furniture can make use of different technology and equipment to manufacture cabinets.
Environment- US has the very diverse climate, wildlife, and geography. This variety united with other factors and has become a touring force to attract millions of travelers to the country. This shows huge scope for the business as people who visit the country for the adventure or tour they prefer having these innovative designs and ideas. Moreover, if the business is constructing the cabinets it needs to take of the environment and should do something towards improving the damages done by human beings.
Legal- The last factor needs to be considered in this Pestle analysis is a legal factor. It is beyond the scope to discuss the legal environment of the US. Every state of the US possesses its own structure of government and scheme. Businesses operate under the prescribed legal environment so that they do not need to pay any penalties or to be sued in terms of conducting any illegal activity. The Woods and Furniture business will definitely follow this aspect and will take all the legal documents and license required to operate the business.
Strength
Company possesses various strengths that are required to operate the business in such a big country. It possesses a good business idea which of manufacturing cabinets for the residencies, commercial and resort at a reasonable and affordable cost. There are various businesses in the market who offer same product however at a high price but Woods and Furniture will offer all these products of excellent quality at affordable price.
Weaknesses
One of the weaknesses that have been come across in this is lack of capital that can be converted into a threat for the business to deal with huge competition in the market. Besides this, it has less number of skilled, talented and experienced employees who can contribute towards the growth of the business in the long-run.
Opportunity
There are various opportunities for the business in the US market. The Woods and Furniture can initiate a tie-up or joint venture with the big firm by offering its innovative ideas to offer an affordable offering of good quality. This will help business in increasing its capital and increase its investment in the business.
Threat
One of the threats for Woods and Furniture Company will be the big competitors in the market. Moreover, due to the low capital, it can deal with the huge threat of long-term survival in the market. Therefore, a business needs to make strategies that can support in avoiding these threats.
Conclusion
In the conclusion, it can be said that Woods and Furniture business is one of the innovative and good business to offer cabinets at residential, commercial and resort at an affordable cost. There are many people who cannot afford to pay the fees of big companies for the renovation and interiors, therefore, the owner of the business idea i.e. Woods and furniture Mr. Chris came up with this idea so that people will low budget can also renovate their homes and offices. The above report has highlighted the various aspects of the business plan such as the background of the business plan, objective, and target market of the business. Besides this, it has talked about the industry analysis and competitors’ analysis to known the level of competition and scope for the business to enter in the industry. The report has also identified the factors that can affect the business that is external and internal factors.
References
Bernhardt. (2018). About us. Retrieved from https://www.bernhardt.com/
Boyles Brand Central. (2018). Hancock and Moore. Retrieved from https://www.boyles.com/hancock-moore
David, J. (2017). Pestle analysis of USA. Retrieved from https://www.howandwhat.net/peste20l-analysis-usa/
Digital Journal. (2018). United States of America (USA) PESTEL Analysis, SWOT Analysis and Risk Analysis Market Research Report Launched. Retrieved from https://www.digitaljournal.com/pr/3468598
Ekanem, I. (2017). Writing a Business Plan: A Practical Guide. 1st edn. U.K: Taylor & Francis.
Goods home furnishing. (2018). Bernhardt Furniture. Retrieved from https://www.goodshomefurnishings.com/bernhardtfurniture/
Grand View Research. (2016). Industry Insights. Retrieved from https://www.grandviewresearch.com/industry-analysis/us-office-furniture-market
Hancock and Moore. (2018). About us. Retrieved from https://www.hancockandmoore.com/
Pestle analysis. (2014). PEST Analysis of USA, the Largest Economy of the World. Retrieved from https://pestleanalysis.com/pest-analysis-of-usa/
Statista. (2015). U.S. Furniture Retail – Statistics & Facts. Retrieved from https://www.statista.com/topics/1136/us-furniture-retail/
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