Doriella: Hand Crafted Jewelry Kathleen McEntire Business Plan Entrepreneurship 2012
Executive summary: Doriella Jewelry is named after Doriella Du Fontain. She was influential during the arts movement of the 19th century which was in reaction to the eclectic historicism of the Victorian era and to ‘soulless’ machine-made production aided by the Industrial Revolution. At Doriella we consider machines to be the root cause of all evils and that products should be made by hand and with care; quality over quantity. Doriella is more concerned with the spontaneous personality of the designer rather than repeating designs. Our products consist of accessories for both men and women and include our most popular products; necklaces and bracelets. I. General Company and Product Description Doriella produces hand crafted original accessory pieces; necklaces, bracelets, earrings and hair clips. There are many accessory companies but they mass produce their products overseas. These products are one of many where as Doriella jewelry; no two pieces are the same. Products are made from hemp, wood, glass and cotton thread. These materials are all derived from the earth and are sustainable products. To be sustainable the products must fulfill these requirements; protect global and human health and environment, protect social welfare and promote economic prosperity. At Doriella the creative director/designer interacts with every customer increasing customer relationships and satisfaction. Doriella provides quality natural pieces that wear better over time. Hemp when woven tightly can be stiff but because of the nature of the product, over time the fibers soften and our jewelry become broken in, like shoes, and become custom to the wearer. Our products can be worn 24/7 in every condition, swimming, showering and sleeping. The target market of Doriella customers are ‘free spirit’ females ages 15-22. Our price point averages from $8-$45 and it is, created by Mother Nature for free spirits. II. Customers Our most common customers are high school students who are seeking a fashionable accessory at an inexpensive price who considers; quality, originality and supporting the arts when purchasing items. Since our target market is mainly under the age of 20 our online presence is vital. Through constant updates on Facebook, Twitter, Instagram and Tumbler, Doriella is able to interact and update the customer about new products and get feedback from the masses. It is easiest to reach our customer in person at music festivals. Many people in attendance at music festivals are young adults who are ‘free spirits’ and have a love for hemp jewelry. Any vendor opportunity such as; craft fairs or trade shows Doriella attends, when it is the right market such as Dose Market in Chicago. I personally as the designer network through school, work and friends to fill custom orders. III. Market Research and Competition Doriella’s target market is huge; tens of thousands of people. There are between 40,000-150,000 people at a music festival who are our main market because they support artist especially through personal selling. It is a challenge to sell art to a retailer. There is a lot of product involved for each retailer to make a strong presence on
Kathleen McEntire
display which lowers its exclusivity. It is a matter of finding the right retailer and product mix to make a statement without it being detrimental to sales. The fashion trend of hippie bo-ho (bohemian) chic has always been around and will continue to be a popular fashion statement. There will always be a presence of customers. Cost of goods is a projected change in the market that would affect how Doriella conducts business. Our products our light weight and have inexpensive shipping costs but with gasoline prices rising, Doriella closely monitor the changes and there may be an increase for the customer in the near future. Doriella is able to take advantage of the “Go Green” trend that consumers have made popular. Customers are now more environmental conscious then before and are educating themselves about manufacturing conditions, recycling and organic products. Customers want to not only purchase a product but feel good about it, such as a green item. Doriella is made from all natural materials and hand made by Kathleen McEntire. http://www.hempjewelryshop.com/, http://www.hempnecklacestore.com/, http://www.moongoddessjewelry.com/HempJewelry.html Our major competitors are other online hemp jewelry stores, vendors at festivals who also have handmade jewelry from $8-$45. Many online hemp jewelers do not have a social media presence or are very inactive. Our competitors do have many pieces on their website for purchase which Doriella has under 100 designs photographed for internet viewers. Some hemp jewelry is not handmade but mass produced and Doriella may be strictly handmade they are still our competitors. Overall, Doriella does the most interaction with their customers via social media sites and is able to interact with the younger age group. Doriella is successful because they provide unique, handmade, original, natural, earth friendly products where every customer gets to interact with the designer, Kathleen McEntire. Our pieces are quality but inexpensive. Doriella can also create jewelry incorporating pre-owned pieces (pendant, broken necklace, etc.). IV. Marketing Doriella jewelry will be marketed mainly online and through personal selling. Facebook is used to post photos of new products, gain interest in consumers and show off possible design inspiration for customer custom pieces. Users can post comments and ‘like’ our product images. Doriella can also post news from the campaign for the restoration and regulation of hemp to show our social responsibility. Through twitter we constantly interact, retweeting, posting of our own and responding to others and to add a personal touch over the vas internet. Instagram will be utilized as well to post inspiration pictures, product pictures including the customer and products in the making. This will let the Doriella customer get in inside look at the work environment and how to style our pieces. We encourage customers as well to post pictures of their Doriella jewelry when they wear it or see it on someone. This all creates conversation and strengthens customer loyalty. Doriella’s webpage will have a section for PR, which will feature in ‘as seen in’ section as well as all of Doriella’s news releases. On foot at festivals our selling technique is a marketing tool. I walk up to tents where people are hanging out in the morning before heading to the music and talk to them show them my jewelry and stay for a while so they can decide if they want to purchase something or not. All of this jewelry is pre-made so the customer doesn’t have to wait for a custom piece but pick from a variety of at least 80 pieces. Engaging the customer in meaningful
Kathleen McEntire
conversation and their comfort level all can signal if they want to buy or not. Our on foot sales members need to be friendly, have product knowledge and interest in the festival. This is the easiest way to start up a conversation, which musical artist are you most excited for, where are you from and have you come to this festival before or any others. The people I meet on foot, customers or not are able to take my business card and contact me later via the internet. It is important that both established and prospecting customers have the ability to contact keep in contact for when they do finally make a purchase decision. Doriella will do a variety of promotions throughout the year. At festivals when selling on foot, there is always an opportunity for a customer to buy more than one piece will get a deal. This is a hidden promotion and a personal selling tactic. On our webpage we will run promotions such as; free shipping, 20% off for first time customers, complimentary surprise bracelet with purchase and social media contests and giveaways. For example; to celebrate Earth Day, Doriella will be giving away a free necklace to one of our fans! Will it be you? V. Pricing To price jewelry two factors are considered, materials and labor. Labor is $27 an hour and our material expenses are very minimal. $27 an hour is the average salary of a jewelry maker and Doriella’s per hour labor cost. The average necklace ranges from $20-$35 and bracelets $8-$15. The more difficult pieces take longer and more expensive due to labor. A piece that requires expensive material will also have a higher selling price. Doriella has two sources of revenue, custom sales and pre-made pieces (back stock). VI. Sales and Distribution Doriella will sell online, at shows (trade and vendor) and rent tables at events like fashion shows and earth friendly conventions. I sell through personally selling and use my product knowledge as the designer to educate the consumer and break down what the product actually is. I find the customer is always impressed when they see all my pieces that they are shocked that I made them all and they want to be a part of Doriella as well. I give the brand extra value by selling the products personally as the designer and not through a hired sales force. Online orders are simple and necessary. In the winter festivals are not available and need to be available for Christmas sales. Products are made by Kathleen McEntire and shipped within a week right to the consumer, no middle man when filling online orders. VII. Operations Doriella needs to become an L.L.C. (limited liability company). This will ensure that the company is only responsible for itself and not going after the employees in hard times. Doriella also needs to copyright their brand art and logo. The images of Doriella’s product need to be trademarked to show ownership and deter copying. Kathleen McEntire is the only employee of Doriella. She is the owner, creative director, accountant, public relations, manufacturer and sales force. This is an independently run company and will remain this way until
Kathleen McEntire
further notice. Kathleen McEntire has excellent constructing skills and is creative. I will invest in metal making classes to help broaden my product mix. This will be an expense upfront but benefit Doriella in the long run and can offer rings as well as bracelets and necklaces in our jewelry collection. VIII. Financials Doriella’s start-up costs include materials, photo shoots and business cards. Business cards can be purchased through Office Max. 1,000 business cards front printed in color with bleeding edges and back two colors for $75 and shipped to your home. A photo shoot can range from $100 and up depending on the photographer. Luckily Doriella already has established a relationship with a professional photographer and is able to get a better price, in return Doriella gives credit to all photographers but to stay consistent we hope to stay with Molly Brandt Photography. Doriella start up costs are as followed; materials $631, photo shoot $250, business cards $75 and misc. $100 (Facebook contest subscriptions, free product to bloggers, etc.) coming to a total of $1,056.
Break Even
Materials
Cost
Hemp Revenue Sales
$
1,269.00
Less: Cost of Goods Sold Gross Revenue
$
97.20
$
1,171.80
Expenses Labor
$
540
Festival tickets
$
180
Marketing
$
35
Vendor passes
$
400
Sales Price per Piece (Average) Cost of Jewelry Sold # of Jewelry Sold
23.5 1.80 54
Colored
$ 45.00
Plain thick
$ 30.00
Plain thin
$ 28.00
Embroidery thread
$ 23.00
Beads Wood
$ 15.00
Glass
$ 250.00
Metal
$ 55.00
Closures Large
$ 15.00
Small
$ 10.00
Earnings Hooks
$ 10.00
Metal circles
$ 10.00
Tools Total Expenses
Net Profit
$
$
1,155
16.80
Scissors
$
7.00
Wire cutters
$
3.00
Storage bins
$ 100.00
Jewelry bags
$ 30.00
TOTAL:
$ 631.00
Kathleen McEntire
According to my break even analysis Doriella will become profitable after selling 54 pieces of jewelry. This is more than obtainable and can happen within a month, especially during summer festivals and when the season calls for a more natural look. IX. Project Timeline Doriella can start selling product once pieces are made. This requires materials to be purchased. Facebook, a webpage and twitter are already established and up and running. It is a matter of letting fans and followers to know that the product is ready for purchase. Since Doriella is a current company, much of the materials are already purchased and pieces are in stock. Due to the nature of this company products can be produced at any time with no lead times except for custom orders. Though to become an established L.L.C. Doriella must take these steps to protect the company; 1. Obtain a copy of Illinois LLC Articles of Organization from the Secretary of State office 2. Choose a name for the business (Doriella) 3. Fill out the LLC Articles of Organization form 4. Publish notice in local newspaper 5. Submit Articles of Organization form 6. Create a LLC operating agreement An LLC can vary in cost from $40-$900 depending on state, this includes filing fee and corporate annual tax.
Kathleen McEntire
First Month LLC completion
MAY 2012
Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 Obtain a copy of Illinois LLC Articles of Organization from the Secretary of State office 8
2 Choose a name for the business (Doriella)
3 Fill out the LLC Articles of Organization form
4
5
9 Submit Articles of Organization form
10 Publish notice in local newspaper (Columbia Chronicle)
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12
6
7
13
14 Create a LLC operating agreement
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16
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27 Actual ad runs in newspaper
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31 LLC!
Kathleen McEntire