1. PROJECT SUMMARY
This business plan considers the opening of an enterprise specialized in the production and sale of plaster garden figures in a city with a population of more than 1 million people. The aim of the project is to meet the demand of the local population for quality landscape design products and to generate profit.
Among the advantages of the project are the low threshold for entering the business and the low cost of raw materials. To organize production, it will be necessary to master the technology of creating molds (matrices), casting, painting and working out figures, to equip a production and storage room with a total area of 70 square meters. meters, purchase the necessary equipment and material.
Starting investments will amount to 228.5 thousand rubles. The financial calculations of this business plan are made for a three-year period of activity. According to them, the payback period of the project will be 5 months. Integral project performance indicators are presented in Table 1.
Table 1. Integral performance indicators
|Discount rate (r-year), %||fifteen|
|Discount rate (r-month), %||1.171|
|Payback period (PP), months||5|
|Discounted payback period (DPP), months||5|
|Net present value (NPV), rub.||260 758|
|Return on investment ratio (ARR), %||48.71|
|Internal rate of return (IRR), %||25.83|
|Yield Index (PI)||1.14|
2. DESCRIPTION OF THE INDUSTRY AND COMPANY
The tradition of decorating household plots with garden figures appeared in Germany in the 19th century. The experience of the Germans was adopted by gardeners from other countries of the world, including from Russia. The growth in demand for such goods in our country is due to the fact that dachas and suburban areas have become more and more perceived by Russians as a place for recreation, rather than for working in the garden. Today, according to VTsIOM, about 50% of Russians own country houses and dachas. At the same time, one can note a trend towards an increase in the number of cottages, the number of which is constantly growing. For the design of the sites, a variety of sculptural forms are used, which are made from gypsum, ceramics, concrete, artificial stone and wood. They are installed in the garden near decorative slides and ponds, in flower beds, near gazebos and garden paths. Despite,
Our project involves the creation of the production of plaster garden figures. The production will be located on a leased area in a city with a population of more than 1 million people. To organize a business, several steps will be implemented. Firstly, an individual entrepreneur will be opened , procedures for registration and tax registration will be carried out. Secondly, the technology of production of molds for the production of products and the products themselves will be mastered. Thirdly, the necessary equipment and materials will be purchased, and employees will be hired and trained.
Finished products will be sold at retail through our own online store, as well as wholesale and small wholesale to organizations selling garden goods, household goods, decor items and other related products. Investments in the project will amount to 228.5 thousand rubles. Starting cost items are detailed in Table. 2 of this business plan.
Table 2. Investment costs of the project
|one||Equipment set||33 500|
|3||Site creation||75 000|
|4||working capital||80 000|
|5||Purchase of raw materials||40 000|
3. DESCRIPTION OF GOODS
Our company will produce and sell garden figures and sculptures intended for decorating gardens and household plots. The assortment will be expanded due to the production of souvenirs and piggy banks. Unlike most competitors, the company’s products will be distinguished by originality and high quality workmanship. In particular, for the production of figures will be used their own, and not purchased ready-made forms. Due to the low cost of raw materials, high markups (234%) will be set on finished products. The list of the main groups of goods sold and the final prices are presented in Table. 3.
Table 3. Nomenclature and variable costs
|No.||PRODUCT||COSTS PER UNIT, rub.||TRADING MARGIN, %||UNIT COST, rub .|
|one||Figures for the garden (gnomes)||75-659||234||250-2200|
|2||Figures for the garden (birds)||75-569||234||250-1900|
|3||Figures for the garden (animals)||60-898||234||200-3000|
|4||Figures for the garden (mushrooms)||75-449||234||250-1500|
|5||Other (piggy banks, figurines, souvenirs)||60-180||234||200-600|
Sculptural gypsum will be used as a material for production. The advantages of working with gypsum include: its low cost, the ease of the technological process during work (does not require the purchase of expensive equipment), the safety of work for employees (non-toxic, no protective equipment, hoods, etc. are required). At the same time, the material is quite fragile, and therefore special attention will be paid to proper storage, packaging reliability and transportation of finished products.
4. SALES AND MARKETING
The scope of garden figures is quite wide. Products can be used not only to decorate a garden or cottage, but also to decorate baths and saunas, improve parks, playgrounds, gardens and schools. Often, figures serve not only for aesthetic, but also for purely practical purposes. For example, they can be used to close hatches or mask other objects that spoil the view. Accordingly, the target audience is quite diverse. It includes owners of private houses located both in the city and outside the city, summer residents and amateur gardeners, owners of baths and saunas, management of parks and children’s institutions, and so on.
Finished products will be sold at retail through our own online store, as well as wholesale and small wholesale to organizations selling garden goods, household goods, decor items and other related products. Thus, the distribution channels for our products will be:
- Wholesale companies;
- Specialized garden shops or departments in shops;
- Stores of fresh and indoor flowers;
- Hardware stores;
- souvenir shops;
- interior shops;
- Entrepreneurs hawkers (trade along the highways);
- Construction firms;
- Parks, cafes, baths;
- Children’s institutions.
For retail sales and presentation of product samples, an own online store will be created. In the electronic catalog, the client will be able to see the prices, select the product of interest to him, make and pay for the order. To promote services and stimulate sales, Internet advertising methods on partner sites, links from specialized resources dedicated to landscape design, etc. will also be used. The company is also expected to participate in agricultural fairs.
Since this line of business is subject to the seasonality factor, in the winter period, production will be transferred to the New Year assortment (souvenirs).
5. PRODUCTION PLAN
The process of making garden figures involves the implementation of several main stages. This is:
– mixture preparation;
- filling the mold (matrix) with a mixture;
- solidification of the product (drying);
- product processing (impregnation);
- varnish treatment.
If the time for the manufacture and processing of products does not take much time and takes from 5 to 20 minutes, then the drying process will require up to 3 days. Thus, the entire production cycle will be 3 days. For the production of figures, our own set of original forms that are not on the market will be prepared.
To organize the work, you will need to rent a room for production and a warehouse with a total area of 70 sq. meters. It will also be necessary to purchase the equipment necessary for production, the list and cost of which are given in Table. 4.
Table 4. List of equipment
|No.||Name||price, rub.||Cost, rub.|
|3||Spray guns||2500||7 500|
In addition to what is given in the table, you will need to purchase the raw materials necessary for work (gypsum, paints, varnish, gypsum additives). For these purposes, 40 thousand rubles will be required.
The planned sales volume in the first year of operation will be 600 thousand rubles, which is planned to be reached during the period of seasonal demand growth (May-June), in the second year turnover per season can be increased to 1 million rubles. The off-season sales plan (September-February) in the first year of operation is set at 100-300 thousand rubles. in the first year, 200-400 thousand in the second year.
6. ORGANIZATIONAL PLAN
The legal form for conducting this business will be an individual entrepreneur. The taxation system is simplified (6% of income received). The project will be managed by the project initiator, whose responsibilities will include organizing the production process, setting shifts, monitoring the work of employees, searching for and expanding markets for products. The company will need to hire three casters and three painters, whose work will be organized in shifts. Their remuneration will be piece-rate and depend on the amount of work performed. Bookkeeping will be provided to a third party.
Table 5. Staffing and payroll
|No.||Position||Salary, rub.||Quantity, pers.||FOT, rub.|
|one||Caster||12% of revenue||3||12% of revenue|
|2||Painter||10% of revenue||3||10% of revenue|
|3||Warehouse worker||22 000||one||22 000|
|Total:||22% of revenue+ 22 000|
7. FINANCIAL PLAN
Investments in the project will amount to 228.5 thousand rubles. Articles of start-up costs are set out in Table. 2 of this business plan. The fixed costs of production will include rent, bookkeeping, advertising (for details, see Table 6). The variable part will include remuneration of personnel, purchase of raw materials and tools, delivery, tax deductions. A detailed financial plan with indicators of revenue, net profit and operating expenses is given in Appendix 1. The calculations are made taking into account the seasonality of demand, with the highest rates from March to August and the low season in September-February.
Table 6. Fixed costs of the enterprise
|No.||NAME||Amount per month, rub .|
8. PERFORMANCE EVALUATION
The project for the production and sale of gypsum garden figures can be called investment attractive, which is confirmed by the integral performance indicators presented in Table. 1. It is expected that the project will pay off and start making a profit by the 5th month of operation. The effectiveness of the chosen direction is evidenced by the net present value (NPV), which in our case is positive (260,758), the profitability index (PI) exceeding 1 (1.14), as well as the internal rate of return (IRR), which is more discount rates (25.83>15).
9. RISKS AND WARRANTY
The main risks of the business for the production and sale of garden figures are analyzed in Table. 7
Table 7. Possible risks and ways to prevent them or their consequences
|risk factor||Probability of occurrence||The severity of the consequences||Events|
|Receiving poor quality products||low||high||Preliminary development of production technology and compliance with all necessary technological processes, purchase of high-quality raw materials|
|Low profitability of production||low||high||Competent pricing, maintaining a competent marketing policy, work on expanding the sales market|
|The emergence of new competitors||average||low||Production of original products according to our own casting molds, search for regular customers at the initial stage|
|Off-season losses||low||average||Switching production to a winter assortment (New Year’s souvenirs, sculptures, piggy banks)|
Production plan and main financial indicators in a three-year perspective