Garden Crafts Inc. has developed a new product, the Sit N’ Caddy, which it intends to produce and market. Garden Crafts has formulated a mission statement and strategy that will use value, quality, and a conscience in the development mix.
Garden Crafts will be incorporated in Georgia as a Chapter S Corporation. The stockholders for Garden Crafts are Rob Kane and Keith Jones. The administration offices and the operational facilities will be separated. It has been estimated that the start-up cost will be approximately $15,000, with the bulk of this amount being paid by John Houseman (ex-owner of Kustom Kabinets). He has agreed to hold the equipment cost as a private note.
The product, the Sit N’ Caddy, is a combination stool/tool caddy, constructed out of premium grade hardwood. Market research found several similar products in nature but none were wood-based and customizable as much as the Sit N’’ Caddy.
Analysing several markets shows that Home Depot is the biggest national retailer of home and garden supplies. This market has seen steady growth over the past three year, with double-digit increases. Garden Crafts can expect a profitable future as the average homeowner spends $532 per annum on gardening products.
Since Home Depot was selected as our initial target for sales, our strategy will revolve around the Merchant that Home Depot uses as their regional buyer. Home Depot being our only customer, our sales price will be determined based on their merchant pricing system. We have determined that $20 is the lowest price we are willing to accept from Home Depot based on our costs. With one product and a standard pricing, the three-year projection shows a direct result from the projected 11% rate of growth.
It was calculated that labor would cost $5 per unit out of the $10 price per unit. It was decided that future employees would prefer a piece-rate rate rather than an hourly wage. As a dividend, the corporation will pay a portion to its founders. As retained earnings, the rest of the profits are placed in an aggressive-growth mutual account.
Our projection of a 11% annual growth rate has resulted in a rise in gross sales over the three-year period. The trend in operating expenses is also increasing, but not in line with it. This is due to the slight deviation in expenses that were paid in advance during the first year and additional expenses that did not occur after the fifteenth month. Given that Home Depot will sell the entire first-year production run, profits are healthy. The second and third years see modest growth. This business plan has a section called Highlights.
Garden Crafts will reap the benefits of a low investment while still delivering healthy returns. These factors include the experience and skills of the founders as well as a commitment from Home Depot. Unique design is also a key factor in Garden Crafts’ success.
1.1 Objectives
Objectives for Garden Crafts:
- Create and construct a workshop capable to handle 10,000 units of the SitN’ Caddy each year.
- Prepare a brochure or specification sheet for Sit N’ Caddy.
- Increase design efficiency to reduce production costs.
1.2 Mission
Garden Crafts will be committed to quality in both its production and shipping. We are focusing on one product: the Sit NՉ۪ Caddy, which is a combination gardening stool/garden caddy. We will ensure that our employees are safe and productive, making this a top priority over our profits.
We plan to use different marketing methods to reach a wide range of gardeners to provide what we consider a valuable tool for their shed. Garden Crafts will be open to considering new production methods and changes to our product lines, as well as custom orders from interested customers.
We will always keep our profits in mind, but never at the expense of our customers.
Success Keys 1.3
Our keys to success will be:
- Effective promotions; we can’t sell if we aren’t visible to the gardening enthusiasts.
- Efficiency in production will play a major role in our success.
- Flexibility. This product has been designed for gardeners.
- We are open to new ideas and will not be constrained by one idea.
We must be open to new opportunities that present themselves.
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