Drapery Fabricator Business Plan

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Introduction

Cutting Edge Drapery, a well-established decorators’#8217’ workroom, is now available. The company manufactures draperies and slip covers in line with interior designers’ ideas. Cutting Edge Drapery just expanded its production capacity and is well-positioned for marketing its workroom production to clients beyond its current client base. The company is committed in providing top quality workmanship, meeting all agreed delivery dates, and executing custom-made work exactly according to the designer’s idea. The focus of this business plan is to identify its future target clients, explain its marketing strategy, and to improve its internal procedures so it can substantially increase profitability.

The Company

Cutting Edge Drapery, Loudon, New Hampshire. Soft window treatments make up the majority of the company’8217;s production. Soft window treatments account for approximately $2.7 Million in the total market. The disposable income of designers and decorators directly correlates to the market share.

The company is a sole proprietorship and has been operating for nearly 25 years. The owner worked out of her home as a seamstress and tailor until her business volume caused her to move her operation into rented space in Loudon. This expanded space allowed her to concentrate more on draperies and window treatments. The 2,200 square foot office houses seven full-time employees. An assistant was recently hired to handle the administrative duties and improve the company’s internal processes. A new outside accountant, who is streamlining computerized accounts, has been hired.

The Products

Cutting Edge Drapery can provide sewing services to create high quality soft windows treatment products such draperies.

Although the company could be considered a company making products, because clients furnish the fabric for each custom crafted unit, it actually only provides the sewing and installation services to its customers. Because the company does NOT have to purchase fabric directly, there is a relatively low sourcing cost.

Market

The population of 17 communities located near Cutting Edge Drapery has been estimated at 277.253. This would indicate that the area has a soft window treatment market worth more than $2.7 million annually. All treatments must be made in decorator workrooms. The company holds approximately 7.5% of this nearby market.

The company is moving from the current market of interior decorator customers to the higher end market for interior designers. This will increase profitability as the designer market is less price sensitive and offers higher margins. The designer’s clients include the high income homeowners that demand unique products and a high degree of customer service. Cutting Edge Drapery is able to provide the best service for this clientele.

To enter the interior designer-controlled market share in window treatment. It is the company’s goal to market the 15 targeted members of American Society of Interior Designers within the next 12 months and establish a business partnership with at least three of these designers. This number will increase to five within the second year, and seven in the third. The company faces significant competition from existing workrooms within the local area. Cutting Edge Drapery’s strategy is to lift its image, through advertising in prestigious trade publications, joining and net-working ASID membership, and actively marketing its selected target market.

Financial Considerations

Strong profits will be achieved by implementing the marketing research and a tailored marketing strategy as described in this business plan. The local soft window treatment market will account for 11% of revenues by 2000, according to estimates.

Monthly break-even can be achieved.

The total production was about 98 units at the time this article was written. It will increase to approximately 115 units by 2000.

It is the policy for the company’s clients to supply the fabric needed for soft window treatment products. Therefore, the company has very low costs of goods sold and a high gross profit. A custom business model means that inventory costs are low and accounts payable are low. The company doesn’t have any long-term capital assets or debt that could impact cash flow. It is likely that this asset will be used by the company to expand its markets, production capacity, and capital assets in the future.

1.1 Objectives

1. To be able to penetrate the interior-designer-controlled share of market for window treatments (Designer being key here, rather than Decorator). It is the company’s goal to market the 15 targeted members of American Society of Interior Designers within the next 12 months and to establish a business partnership with at least three of these designers. In the second year, this number will increase to five and seven respectively.
2. To significantly increase profitability. The formalization of pricing will allow price-sensitive jobs that are not in our market to be moved elsewhere. This will allow us to concentrate on higher-end custom work that is less expensive for the less price sensitive designer market. These pricing options will ensure a minimum $65,000 in pretax profits in the first year.
3. To improve and streamline the administration of the company. This will reduce the owner’s involvement in administrative tasks by 50% to 20%. This will give her more time to focus on sales and marketing.

1.2 Mission

Cutting Edge Drapery is best suited to serving the interior designer share of the textile treatment market because clients of interior designers can afford expensive materials and custom solutions. The company cannot compete against large workrooms that can produce mass quantities, nor can it compete with home workrooms. The company strives to provide high quality workmanship, meet agreed delivery dates and execute custom work in compliance with the designer’s vision.

1.3 Keys to Success

A few key aspects can determine success or failure in professional workrooms. Most of these factors stem from interior designers’ importance to reputation:

1. Private clients cannot be accepted into the professional workroom. The fear of an interior designer finding out that his client will be able to save thousands of dollars by working directly in the room is common among them. If private clients contact the company, they should be referred to a designer who works closely with the company.
2. Clients who have the means to pay for interior designers are more demanding. The interior designer needs to feel that his workroom considers that designer the most important person in the world. It is important to avoid any action that may indicate that the designer’s workroom is occupied with other designers’#8217s work.
3. The workroom must live up to its promises. The work must be done exactly as promised and at the agreed cost. The designer’s ability to communicate with the workroom effectively is key.
4. Quality is important for the production supervisor. The production supervisor must ensure that jobs quoted at 15 hour increments do not take more than 20 hours. If individual production stitchers are not efficient or left idle, profit goals cannot be achieved.

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