Business Plan
By Lucy Danby
Contents
1.0 Executive Summary 2.0 Business Description 2.1 Elevator Pitch 2.2 Mission Statement 2.3 Business Philosophy 2.4 Goals and Objectives 3.0 Products and Services 4.0 Marketing Plan 4.1 Industry Research 4.2 S.W.O.T Analysis 4.3 Marketing Mix 5.0 Operational Plan 6.0 Management and Organisation 7.0 Start-up Expenses 8.0 Financial Plan
1.0 Executive Summary Oh My Goth is a sole trader business set up by recent graduate, Lucy Danby. Based in Sheffield, United Kingdom, we design, manufacture and sell furniture and home decor products online. We specialise in Gothic, Steampunk and Alternative styles to appeal to people of alternative subcultures who like to live differently. Oh My Goth is the only, if not largest, brand in the UK that specialises in making furniture in alternative styles. Our brand will be a part of the UK furniture industry which is predicted to be worth £17.3 billion by 2020. The first products to be launched by the business will be Gothic Christmas decorations. This is to take advantage of the lack of these products in the UK and the £42 billion that’s spent on Christmas in the country. (British Retail Consortium, 2016) The business will receive a start-up fund of £6,500 from the director’s investment and a grant from the Prince’s Trust. This will pay for the start-up expenses and running of the business for the
first few months until new products are launched and sales increase. We are predicted to sell 390 units in the first year and make a net profit of £4,053.51. Over five years, the business will grow through employing two members of staff, buying new machinery, relocating and launching lots of new products. By the end of our fifth year of trading we will have sold a total of 8,777 units and will have made a net profit of £14,044.55. We are aiming to start selling products worldwide in our fourth year to gain a larger customer base and higher order volumes. In our fifth year, we plan to sell our products at Whitby Goth Weekend to make our products more accessible to people of alternative subcultures. From this event, we will gain even more customers which will increase sales and help the business to keep growing. Oh My Goth aims to achieve great things in the first five years of trading and many years after. We hope to one day have our own retail store in the UK to sell our ever-growing range of products, with the potential of also having stores worldwide.
2.0 Business Description 2.1 Elevator Pitch Oh My Goth is a newly established UK-based furniture and home décor brand that specialises in Gothic, Steampunk and Alternative styles. We make unique products that are high quality and affordable for people of alternative subcultures and those looking for something different in their home. Our products aim to bring joy and happiness to our customers, giving them a way to express themselves and embrace being different.
2.2 Mission Statement At Oh My Goth we have a mission to be the number one company in the UK who specialise in Gothic, Steampunk and Alternative furniture and home décor. We make our products to a high quality at affordable prices so our customers can transform their home on a budget. We strive to help our customers have a home that reflects their unique style and personality. A home that makes you smile. A home where you feel ‘YOU’.
2.3 Business Philosophy At Oh My Goth we believe our customers should have access to alternative furniture and homeware that is affordable and high quality to stand the test of time. We are a brand who understands and listens to our customers’ needs and desires by designing our products with contemporary living spaces in mind. We believe in making products that will bring joy and happiness to our customers lives and will encourage them to just be themselves regardless of other’s opinions. Oh My Goth are passionate about making beautiful, unique products that let our customers stand out and express their style and personality.
2.4 Goals and Objectives Short Term
Long Term
• Trademark the Oh My Goth name and logo to protect the brand from unauthorised use and counterfeiting.
• Start producing larger furniture pieces using our new CNC router.
• Start working full time on the business after 6 months of trading.
• Hire new members of staff to help with the marketing, design and manufacture of our products.
• Employ members of staff to help the business succeed.
• Open up our own retail store in the UK and possibly worldwide.
• Move to a permanent workshop and studio to expand after running the business from the director’s home.
• Sell our products through more market stalls in the UK such as: Christmas markets, Alternative conventions, Whitby Goth and steampunk weekends.
• Invest in new machines so higher volumes of products can be made quicker as well as making it possible to develop new products. • Expand our range of home décor products for the first five years. • Expand the colour ranges of our products. • Sell our products at Whitby Goth Weekend. • Raise £8,000 on Kickstarter to fund new machinery. • Introduce worldwide shipping.
• Sell our products through other retailers and companies who specialise in alternative products and clothing.
3.0 Products and Services Oh My Goth designs and sells furniture and home décor products that are in Gothic, Steampunk and Alternative styles. The first products to be launched will be Gothic Christmas tree decorations which are laser cut from acrylic. For the first five years, the brand will concentrate its focus on creating home décor products that are made using a laser cutter and UV printer. The company plans to launch new products in year 1 and 4 to expand the business and increase sales and revenue. Larger furniture products will then be introduced to the product range after a new CNC router has been purchased at the end of the fifth year of trading. The reason for creating home décor products first is because these are smaller products which will be easier to store in our small premises. These products are also cheaper for our customers to experiment with having a Gothic style in their home. It is less of a commitment than buying a large piece of expensive furniture if the customer is unsure about this style. This enables our customers to decide whether it’s a style they love having in their home and will then be more confident buying products from us again in the future.
4.0 Marketing Plan 4.1 Industry Research
Oh My Goth is launching the business by selling Gothic Christmas decorations; with future plans to expand the brand’s range by first introducing homeware and then furniture. This means that the brand fits into three different marketing categories of: furniture, homeware and Christmas. This gives the business different opportunities to succeed and grow.
Size of Market According to Fernando (2016) the UK furniture market has been steadily growing since 2010 and is predicted to be worth £17.3 billion by 2020. The growth of this industry is also proven by the Furniture Industry Research Association (FIRA, 2017); “The Government’s latest provisional manufacturing statistics for the UK show that furniture’s 2015 turnover reached almost £8 billion, 7.1% higher than the previous year and 20.8% higher than in 2012. This positive trend, since the low of 2011, is good news for an industry facing a rising tide of imports.”
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UK Furniture market is predicted to be worth £17.3 billion by 2020.
Homeware
Christmas is a huge time of year for retailers with December being the biggest month for shopping in the UK. The British Retail Consortium wrote in their 2016 report that a total of £42 billion was spent during December 2015 which equated to “12 per cent of the of the year’s total sales”. £5.8 billion of these sales were online. “The average home will splash out £809.97, mainly on food, drink and travel, while decorations and gifts will account for 58.5% of the budget” (Allen, 2016).
Market Trends
Furniture
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Christmas
The report from Retail Economics (2016) states that the UK average weekly spend on homewares in January was £226m. £57 million of this spending was online. Jane Westgarth, Senior Market Analyst at Mintel (2016), said that “The UK’s 27 million households spent £27.2 billion on buying for their homes in 2015. And when the housing market is buoyant, people spend more freely to create the homes they want.” This is an incredible figure that proves there is a demand for homeware and that people are buying these items.
Furniture and Homeware The biggest trend in the UK furniture and homeware industry is the rising popularity of online sales and e-commerce. According to Pragma (2016) 24 per cent of furniture sales were made online but 49 per cent of people chose to purchase in store. However, 45 per cent of those who bought in store conducted research online before making their purchasing decision. This proves that shopping online is becoming ever more popular and important to the industry. Pragma (2016) also wrote in their report that 71 per cent of people said they would look online to find cheaper prices of items they found in store. And 68% said they would only buy something if they could find good reviews online. Fung Global Retail & Technology (2017) stated that “The UK had the highest percentage of furniture and homeware purchases made online in Europe at approximately 12.1% in FY15 [financial year 2015], even higher than the 8.6% in the US.” These figures make it ever more important for Oh My Goth to have a good online presence, including social media and a well-designed website for the sales of the brand’s products.
Christmas When it comes to Christmas sales the main market trend is the recent popularity of black Friday and cyber Monday in the UK. The British Retail Consortium (BRC, 2016) wrote in their report that “The introduction of Black Friday to the Christmas trading period has meant that Christmas shopping now begins in November and there are two peaks in trading activity. One is in the lead up to the Black Friday/Cyber Monday weekend and then the Christmas peak”. The BRC (2016) also said that “Black Friday is now the biggest online shopping day in the UK closely followed by Cyber Monday. Our data partners, Hitwise, forecast that
£5 billion would be spent over the Black Friday/ Cyber Monday weekend”. According to Olivia Collins (2015) “It seems customers are becoming increasingly driven to only spend at times when there is a sale and they are less willing to purchase items at full price”. The British Retail Consortium (BRC, 2016) included in their report that online e-commerce is also very important at Christmas time with £5.8 billion being spent in December 2015. They also said “We expect more people to click into Christmas than ever before this year, as online continues to be a steady contributor to non-food growth”.
Current Demand There is a current demand in the UK for Gothic, Steampunk and Alternative furniture that is affordable, easily accessible, small and suitable for everyday modern living. This is because it is a niche market and there are currently not many businesses in the world that are like Oh My Goth. The main places in the world where there are similar businesses are in the US, Australia, Germany and the UK. There are no furniture and homeware brands in the UK that are offering similar products to Oh My Goth. This is because Oh My Goth is unique in offering alternative furniture with a contemporary twist that is suitable for everyday living. The other similar businesses in the UK sell large pieces of furniture that are hand carved and expensive. Whereas, others are cheap, poor quality pieces from high-street furniture stores such as Dunelm. This demand was realised through a research survey conducted by Oh My Goth which asked 90 participants a number of questions to establish what the business’ customers want. The demand for smaller alternative furniture was proven through 7 out of 90 participants saying they had not previously bought alternative furniture due to lack of space and because the pieces are too big for a modern lifestyle.
Due to the lack of businesses in the UK that offer alternative furniture it was not surprising when 37 per cent said they had not previously bought this type of furniture because it wasn’t accessible. 94 per cent of people would consider buying furniture in alternative styles in the future which shows there is a market and a demand for this type of business. It is also evident that the brand’s furniture needs to be affordable because 47 percent said that alternative furniture was too expensive for them. When asked in the survey about which alternative styles that participants preferred, Gothic and Steampunk were the most popular by far. 77 per cent preferred Gothic and 56 per cent chose Steampunk. This was a good thing because these are currently the two most popular amongst the alternative community. This popularity can be proven by the number of people who ‘like’ the alterative pages and groups on Facebook (see appendices). Social media is a big part of the alternative community for personal use or for alternative businesses promoting themselves, advertising their products and creating a relationship with their customers.
Potential Growth
Competitor Analysis
Areas of potential growth for Oh My Goth would be to introduce more seasonal products for Christmas, Easter and Halloween as well as personalised products and gifts, much further down the line, possibly in year 10 of the business. Introducing these products could help to create larger orders and to increase traffic to the website to further increase sales.
Although there are four competitors, none of them pose a huge threat to Oh My Goth’s business because none of them are similar enough. The only real threat is that all of these companies ship their products worldwide, whereas Oh My Goth only ships UK-wide.
One definite area of growth is to start producing furniture after year 5 once the business has bought a CNC router and can start manufacturing larger products. Large furniture pieces will be introduced after the business has developed a range of home décor products during the first five years. This is because customers are more likely to be confident in trying a new style if it’s a small piece of home décor at an affordable price with low commitment. Once the business has had time to grow, establish itself and gain a good customer base the furniture should then sell a lot easier.
Barriers to entry The main barrier to entry is that the brand is not yet established and still needs to build up a customer base. Another barrier is the seasonal nature of the launch products. With the launch products being Christmas decorations this means they will only sell well around Christmas time. The result being that the business will slowly grow and most likely not make much money in the first few months. To counteract this barrier there will be 4 new nonseasonal products being launched in the first year to increase sales year-round. Two products will be launched in October and two in March to coincide with Christmas and Easter Sales. Sales and discounts throughout the year, especially in times like summer when sales drop, will be another way to boost sales.
To counteract this, worldwide shipping will be introduced to Oh My Goth in the fourth year of the business. This will coincide with the Kickstarter campaign so the rewards will be available to all countries. Therefore, money should be easier to raise due to the larger numbers of people that can pledge. The campaign will also gain the company more customers which will increase sales and boost the growth of the company. Once the UV printer has been bought and new products are launched, there will be a wider customer base to sell these to and a wider product range to supply this demand.
Direct Competitors Companies Haunt
What they offer Hand crafted fantasy inspired furniture.
Raxfox Design Gothic, quirky, unusual furniture.
Price £128 £4265
Notes • Are based in Australia but ship worldwide. • Bespoke service with high quality eco materials that are hand carved. • Oh My Goth offers products at more affordable prices and sells more home décor items compared to furniture in the first 5 years. Whereas Haunt mainly do large pieces of furniture.
£13.36 - • Based in Germany but ship worldwide. £8012 • Tim Burton-styled furniture made using a CNC router. • They have a similar style and price range to Oh My Goth. • But they don’t have any seasonal products and their designs don’t include any Gothic symbolism like bats, skulls and coffins which is something that Oh My Goth will be offering.
Indirect Competitors Kinky Angel Clothing
Mainly a clothing company. Offer Gothic bookcases and shelving.
£89.99 - • UK based company who ship worldwide. £359.99 • Mainly sell clothes and only offer furniture on the side-line. • Furniture range is limited in variety and style. • Oh My Goth has the advantage that we solely focus on home décor and furniture so are more able to produce a wider variety of products. • A future opportunity would be to sell our products through Kinky Angel Clothing to use their large customer base to grow the Oh My Goth brand.
Curiology
Mainly a jewellery designer but also offers wall clocks, mirrors and art.
£34.99 - • UK based company who ship worldwide. £44.99 • Mainly make and sell jewellery. • Their home décor range is very small, however there is a small threat that they could grow this. • Similar price range to Oh My Goth. • Also uses the same manufacturing methods as us: laser cutting and UV printing. • Have a large customer base and have 7 years of experience. However, with their main focus being on jewellery I can’t see them as a huge competitor of our business.
4.2 S.W.O.T Analysis Strengths • • • • • • • • •
The largest alternative furniture and home décor brand in the UK. More affordable than other Gothic and Alternative furniture companies in the UK and worldwide. Products are easily accessed on our website. Furniture and home décor that is better suited for contemporary living, compared to competitors. A business owner who has a strong passion and understanding of the alternative market and lifestyle. Lucy Danby, Oh My Goth’s director, is a recent master’s graduate who has experience working in the furniture design industry. Offers a wide range of furniture and home décor all in one place so customers can easily find what they want. One of the few alternative furniture brands that offer a contemporary twist to the alternative styles. A business owner who has personal connections to the target market which will help to promote the business and sell products.
Opportunities
• • •
Open up a store in the UK with the long term aim to open up more around the country. Open up stores abroad if the online sales and customer feedback show demand. To develop a wide range of products for the home décor and furniture lines.
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A retailer who can produce furniture quicker than their competitors due to the manufacturing methods used. Using modern technology, like laser cutters and CNC routers, makes it quicker and easier for us to produce the products for sale. A brand that understands their customers’ wants and needs. The business owner working part-time on the business for the first 6 months will allow the business to slowly grow without having to financially support staff. A personal investment of £5000 will initially fund the business to eliminate the cost of loan repayments. Receiving a grant of £1,500 from the Prince’s Trust gives us extra funding for the start-up without us repaying the money back. Selling the products online and at market stalls will eliminate the expensive cost of running a store. Low competition in the alternative furniture industry.
To develop more Christmas decorations and branch out into other seasonal festivities such as: Valentine’s, Easter and Halloween. Employ creative staff to bring different styles to the brand. To raise £8000 in a Kickstarter campaign in year 4 of the business to buy a UV printer.
Weaknesses • • • • •
The company is not established and has little market presence or reputation. The cashflow will be unreliable in the early stages but will improve over time. The business is likely to not make much of a profit in the start due to the business owner working a second job. The seasonal nature of the launch products will mean sales won’t increase until Christmas or until new products are released. With laser cutting being the main manufacturing method this restricts the design potential for the products until the CNC router is bought in year 5.
Threats • • •
Well-known companies like Angel Clothing could expand their existing small furniture range which would create more competition for Oh My Goth. New or pre-existing companies who are larger could try to reproduce similar products to Oh My Goth! Rising costs in bills and rent once the business relocates to new permanent premises. But higher profits will cover these costs.
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The growth of the business could be stunted because of it being run from a home environment for the first year and a half. The workload could prove to be too much for one person earlier than expected. Staff would then have to be hired earlier than predicted. Sales are higher during Christmas time but lower all year round. Sales and discounts will be introduced to encourage higher sales in times like summer. Lucy Danby lacks knowledge in finance but will hire an accountant to help in this area. Working on the business part time will mean the business will grow at a slow rate.
The alternative styles used in Oh My Goth’s range may have to adapt to new alternative trends over time if Gothic and Steampunk become less popular. There is a risk that the director may lose her job, pre-launch, therefore losing the means to fund the business.
4.3 Marketing Mix Products
Oh My Goth will be manufacturing and selling home décor products for the first five years to help establish and build the brand. These products will mostly be manufactured using a laser cutter and UV printer. Once the brand has grown a good customer base, employed a few members of staff
and has higher profits, only then will we start producing larger furniture products. It will be possible to introduce furniture after five years of business when a CNC router has been purchased for the manufacture of these products.
Future Products The future products to be launched throughout the first 5 years will be wall art, mirrors, photo frames, place mats, more Christmas decorations and printed versions of our existing products. The timeline below shows the products to be launched and when. As you can see the new products are mainly launched in year one and four. This gives the brand time to grow, to move to a larger workshop and studio, employ staff and buy more machines in order to fulfil the increasing volume of orders. Releasing printed versions of existing
Launch
Year 1
products, using a UV printer, makes the brand appear to have more products without having to design new ones. It opens up the potential of having limited edition designs for events like Valentines, Halloween, Christmas, Easter, Mother’s Day and Father’s Day. This increases the year-round demand for products, therefore increasing sales. It also gives potential customers a wider range to choose from and allows them to have some element of personalisation.
Year 2+3
Year 4 Move to bigger workshop and studio
Year 5
Buy CNC Move to new Router workshop and Kickstarter studio Bat Photo Campaign Xmas Bat Frame decorations Printed Photo Hire Workshop a Frame Assistant + Wall mirror Printed Finance Manager Christmas Buy UV Printer Decorations Coffin Multi Flying + Swirly Photo Frame Printed set of 4 Bat decorations place mats Buy two more laser cutters Printed Mirror Wall hanging art
The Launch Products - Christmas Decorations The first products to be launched in year one will be Gothic bat Christmas tree decorations. Bats are very popular and adored by the Gothic community and can be found on most Gothic clothing, products and art. However, there are very few Gothic Christmas decorations on the market, which makes these products perfect to fill this gap in the market, to stand out and
get people talking. The bat decorations are inexpensive, unique and fun products that would be very popular. They are perfect for people who are familiar with the Gothic style as well as those who would love to be introduced to it. It provides people with an easy way to try having a Gothic style in their home, therefore building a customer base and a large demand for future products.
Xmas Bats Oh My Goth’s Christmas decoration range will drive the business’ first sales. The range is comprised of 2 products which each contain one pack of four decorations, either Xmas Bats or Mixed Bats. These are laser cut from acrylic sheet and hung
from double satin ribbon. The pack of Xmas Bats have individual letters in their bodies to spell out the word ‘xmas’. These are approximately 75mm high x 65mm wide with a hanging distance of 120mm.
Flying and Swirly Bats The pack of mixed bats have two flying bats and two swirly bats. These can also be bought in singular packs of 4 flying or 4 swirly. These are approximately 80mm high x 90mm wide with a hanging distance of 120mm. All of the decorations
are being launched in red and black acrylic to keep in line with the branding. The plan is to launch a wider range of colours in the future to increase sales.
People Customer
Newcomers and Appreciators
The target customers are women aged 18-60 and men aged 40-60. A survey conducted by Oh My Goth proved that women are by far the largest group of customers, with 72% of women saying they would consider buying furniture in an alternative style, compared to only 28% of men. The target customer most likely lives in a detached, semi-detached or terraced house with a medium to high income of approximately £18,000 - £45,000.
On the other hand, another customer would be someone who is new to the alternative styles. Someone who doesn’t live an alternative lifestyle in terms of the clothes they wear or the music they listen to. But, they appreciate the beauty and uniqueness of things that are alternative. Whether they are just looking for a statement piece for their home, or maybe seeking to be introduced into the alternative lifestyle, to embrace it and potentially become an enthusiast themselves.
The survey also revealed that the target customer looks for high quality and affordability in the furniture they buy. Most people said they bought their furniture from Ikea but would expect to pay a slightly higher price for furniture in an alternative style as long as it was still affordable. Oh My Goth is perfect for people who are looking for something a bit different which reflects their unique style and personality.
It is apparent from customer feedback that they all generally have similar qualities and interests. These being: to be successful and achieve their aspirational lifetime goals, having a dark sense of humour, liking things that are different, loving horror, sci-fi and fantasy.
There are 2 main types of customers who would potentially buy products from Oh My Goth. One, enthusiasts who are highly passionate and familiar with alternative styles. Two, people who are new to these styles but want to be introduced to it and to try something new.
Male 28% Female 72%
Enthusiasts
The ideal customer would be someone who is passionate about the alternative lifestyle and associates themselves with some of the alternative subcultures like Goth and Steampunk. Enthusiasts are more likely to buy our products because it is a style they feel happy and comfortable with. Oh My Goth predicts they are also more likely to buy a larger quantity of products on a fairly regular basis due to their prior knowledge, commitment and confidence with these styles. These are expected to be the first loyal customers who believe in our brand and love what we do. They are likely to be a fan of Tim Burton’s style and the movies he produces as well as other alternative movies, literature and music. This type of customer potentially attends events in the UK like Whitby Goth Weekend and various Steampunk conventions.
18 - 24 40 - 60
18 - 24
40 - 60
25 - 39
25 - 39
Female
Male
Employees The kind of people who will be representing Oh My Goth will be creative-minded people who are passionate or appreciative of alternative styles; the preferable option being people who live alternative lifestyles and can understand the wants and needs of the brand’s customers. The brand needs employees with a positive personality who are open minded and non-judgemental. This is to avoid our customers ever feeling disrespected, undermined or judged for who they are and how they choose to live their life. Furthermore, our staff need to be good team players who are keen to see the brand grow and succeed and are eager to help us do this. The two members of staff that will be hired during the first five years also need to have the right skills for the brand to succeed. The workshop assistant will need to have had training and previous making experience. This will ensure they can assist with manufacturing and assembling the products in our current ranges. The admin and finance assistant
will need to be computer literate and a dab hand at finances. This person also needs to be great with people for when they are communicating with customers through calls and emails. All new members of staff within the initial fiveyear period will be on a six-month probation where they will be paid ÂŁ900 a month before receiving a pay rise after this period. They will then receive further pay rises each year as the business grows and can afford to pay them a more reasonable salary. The reason for this probation is to minimise the risk by trialling how the business runs with a member of staff on the payroll and to ensure that the person is right for the brand. After the first five years, this probation will be abolished because the business will be more successful and experienced, therefore no longer being necessary. Another reason is that this probation could have been a factor that would deter potential new members of staff.
Positioning Oh My Goth’s customers will see us as a happy brand that makes them smile. A brand that cares about its customers and understands their desires and needs. Our customers will love how we help them create a home where they can feel themselves and are encouraged to express their unique style and personality. The brand will be identified with quality products that are affordable to its customers.
Place Online
The products will be sold online through our website in the hopes this will reduce the barriers to entering the market but also because 92% of the UK population are internet users (Twenga Solutions, 2017). E-commerce is very successful in the UK; eMarketer (2017) predicts that UK retail e-commerce sales will be as high as £86.96 billion by 2019. Selling predominantly online reduces the cost of running the business and provides a good way to direct traffic to the website through the use of social media.
Shipping
Oh My Goth’s products will only be available for UK delivery during the first three years. Worldwide shipping will then be introduced in the fourth year once the business has grown and is successfully supplying the UK orders with three people smoothly running the business. Worldwide shipping is a necessity for the success of the Kickstarter campaign that will happen in the fourth year of business. This enables the pledge rewards to be available to everyone; ensuring the campaign reaches its target of £8,000 to fund a new UV printer.
Future Retail Space Selling the products online eliminates the expensive costs of running a retail space. Our long-term goal is to eventually have our own retail store but only once the brand has a lot more products to sell, more staff and higher profits to make it viable. The future location of this store can only be decided once the demand and popularity of the products is shown through a few years of sales and experience. However, potential areas in the UK where this store could be located are either Whitby or Camden Market, London because of their connection with and attraction of people from the alternative subcultures.
Market Stalls In year five the business will sell products on a stall at Whitby Goth Weekend in April and November. This will be the first face-to-face contact with the brand’s customers and will provide a brilliant opportunity to gain new customers. Other places to sell, further in the future, would be at various Steampunk conventions in Lincoln, Leeds, and Whitby for example. Macabre Monthly Online Markets is another great place to potentially sell our products. They sell alternative products on Facebook to support and promote small businesses who sell products in alternative styles. They roughly have between 1,000 – 2,000 people attend these events online every month (Macabre Monthly Online Markets, 2017). This market would be the perfect place to sell our products and promote the brand especially in the early stages of the business.
Promotion Social Media
Discounts and Sales
The main promotion for the business will be through our online presence on social media and our website. Facebook and Instagram will be the two main sites used because they are popular with the alternative community and are amongst the largest social networks on the internet. A lot of successful alternative clothing and jewellery brands use Facebook and Instagram for their promotion too.
Products will have discounts on them during certain times of the year like Black Friday, Cyber Monday, summertime, Easter and January. This should maintain sales during quiet times like summer and Easter as well as increasing sales on Black Friday/Cyber Monday and January.
Prize Draws
The pack of Xmas bat decorations has a retail price of £4.99 per unit, and with material and labour costs being as low as 73 pence, they earn a profit of £2.60 per unit. The Flying/Swirly bats retail at £5.99 per unit, earning a profit of £3.20 after accounting for 98 pence in material and labour costs.
Prize draws of our products will be done on our social media pages instead of paying for advertisements. These competitions encourage people to follow us on social media and to share with their friends. It will increase sales and gain us more customers. Other alternative brands have successfully used this method which is very popular amongst their customers. The giveaways create demand for the products as people desire to win and to own the products. It offers people a chance to try our products for free, to have a positive view of our brand and to hopefully recommend us to people they know.
Goth Celebrity Endorsement Free samples will also be sent out to famous members of the Gothic community like Ash Costello, the lead singer in the band ‘New Years Day’, and Black Friday, a Goth YouTuber. These female celebrities have a large following of fans who are both Goth’s and non-Goth’s. Reviews and endorsements from these highly-respected women would really help our brand become well known and to kick start a higher number of sales in the first few years.
Ash Costello
Black Friday
Price
These retail prices will rise in the fourth year when the business becomes VAT registered and is required to start charging customers VAT on top of the existing retail prices. Future products like the wall mirror, for example, will be higher priced items because of the products being larger and using more expensive materials. The mirrors may sell less units because of the retail price being £59.99 but they will have higher profit margins. Oh My Goth’s prices are generally higher than products that are not in alternative styles. However, our prices are still considerably more affordable than most of our competitors. This is because we believe in offering our customers quality, unique products at affordable prices.
Packaging The Christmas decorations will be packaged in a black organza gift bag and then placed inside a shiny black bubble envelope for shipping. On the outside of the shipping envelope will be a sticker with the brand’s logo as well as a delivery address sticker using the brand’s font. Using this method of packaging eliminates the cost of having specially printed packaging and reduces the price of shipping and packaging for the customer. The company has been branded and packaged in a striking colour range of black, red and white. This shows we are a strong, quality brand who are confident and passionate about what we do. To make the brand more distinct, the Christmas decorations will all be launched in the main two brand colours of black and red. This product colour range will then be expanded over time. Acting as our key promotional tool, the brand’s website and social media all contain this same design language. The website is functionally and visually very well designed for our customers to love browsing our products, which should encourage sales.
5.0 Operational Plan Production
For the first year and a half the business will be run from the owner’s home in Sheffield before later moving to a permanent studio and workshop. To support herself the director will be working part-time on the business while also working a full-time job. After six months, once the business is busier, earning more money and can afford to pay the director a salary, only then will she start working full time on the business. This strategy allows the business to establish itself and to grow without having to pay out for staff. Our products are made on our own laser cutters, finished and assembled in-house. Some component parts will be outsourced, for instance the reflective glass for the mirrors which will be launched in the future. But the rest will be done in-house because it’s far cheaper than outsourcing due to the fact that we use laser cutting as our main manufacturing process. Products will be made-to-order in the early stages of the business; but when it comes to busy times like Christmas a large stock of products will be made in advance to supply demand. Once the business has moved to a permanent premises, all of the products will then be made in batches because there will be space to keep this stock, therefore reducing dispatch times.
Sheffield
Machines and Equipment The business will start off with one laser cutter and will purchase two more, one in year two and another in year three. This will enable the business to produce more products and to be efficient in completing orders and supplying customer demand. A UV printer will be purchased in year four which will be funded by a Kickstarter campaign. The UV printer will be used to print a variety of digital designs, created by Oh My Goth, onto existing products as well as new products. This will vastly expand the brand’s product range, giving our customers more to choose from. At the end of year five a CNC router will be bought to allow the business to start manufacturing its own furniture ranges. New computers will be bought in year two and three for the new members of staff as well as for the running of the laser cutters and printer.
Location
As stated before, the business will first be located in the business owner’s home in Sheffield. The main reason for this being that the business would not be earning enough money at the start to warrant paying higher rent and bills for a studio and workshop. Working from home and paying a fifth of the rent and bills makes it much more affordable for the business. In year two (September 2018), it will be necessary for the business to move to a permanent studio and workshop to give us more space for staff, machines and storage of stock. This will give us opportunities to continue to expand and grow, and stop the business from being restricted by the lack of space. The business will then need to relocate again in the fourth year of business, January 2021, to a much larger workshop and studio to accommodate the new UV printer and CNC router. All of our studios and workshops will be located in Sheffield because of the city’s great industry ties and design resources.
Legal Environment
Oh My Goth will be a sole trader business owned by Lucy Danby. Being a sole trader reduces the amount of tax the business needs to pay and the amount of paperwork that we would otherwise be required to complete if we were a limited company. To be a sole trader is more of a risk for the business owner because she will be held liable for any debts or potential bankruptcy of the business, if ever that was to happen. However, in September 2019 the business will register itself as a limited company and will keep that registration on the side-line until the business decides to activate it and start trading as a limited company. But until that time (whenever the director deems necessary) the business will continue to trade as a sole trader. Before the business starts trading we will register the company name and logo as a trademark in order to protect the brand. The trademark claims our ownership of the brand and gives us the right to take legal action against anyone counterfeiting the brand or using our name and logo without our permission. To further protect ourselves we will take out business insurance in September 2018 when we move to our new workshop and studio as well as employing our first member of staff. For £51.28 a month this covers us for public liability, employee liability, stock, contents, money in safe, window damage and goods in transit.
Personnel
The business will mainly be run by the owner, Lucy Danby, especially in the first year and a half when she will be the only person working for the business. In October 2018, a workshop assistant will be employed to help with the volume of orders. This assistant will help with the general running of the business, operating machinery, making, assembling, packaging and dispatching the products. This assistant may also be required to help with keeping our social media and website updated where necessary. In September 2019, we will employ an admin and finance manager who will manage the company finances and general admin such as calls, emails and paperwork. Communicating incoming orders to the workshop assistant and director will also be their responsibility. The director will be responsible for the running of the business, including the management of staff, design of new products and working alongside the workshop assistant to keep on top of product orders. The director will also keep the website and social media up to date until the business employs a part-time marketing assistant after five years. The business will also look to hire a second workshop assistant with the potential of promoting the current assistant to manager.
Suppliers Acrylic – Sheet Plastics - Leicestershire, UK Ribbons – Wholesale Ribbon - Cheshire, UK Machinery – eBay - UK Organza gift bags – APL Packaging - Worthing, UK Postage envelopes – All Colour Envelopes - Lewes, UK Logo stickers – Instant Print, Rotherham, UK Address labels – A4Labels.com - West Sussex, UK A4 office printer lease – XBM - Leeds, UK
All of our suppliers are in the UK. These are the suppliers for all the materials to make our current Christmas decoration range. The suppliers will increase as new products are launched so new contacts and relationships will need to be made with new suppliers if we require different materials. All our machinery will be bought second hand or like-new on eBay to save money until the business can afford to buy brand new machines from other companies.
6.0 Management and Organisation Year 1
Year 3
In the first year, the business will solely be run by the director, Lucy Danby, from her home in Sheffield. Lucy will work part-time on the business for the first six months while working a full-time job to support herself financially. She will then start working full time on the business in October when it’s predicted to get busier for Christmas. For the first six months, all of the products will be made-to-order just until the volume of orders increases and the product ranges are expanded. The director will be responsible for all tasks which include the designing of new products, manufacture, assembly and dispatch of existing products, marketing and social media, updating the website, admin and finances with the help of an accountant.
The roles and responsibilities will remain the same until a new admin and finance manager is employed in September 2019. This member of staff will manage the company finances, general admin and communicating incoming orders to the workshop assistant and director. The registration to become a limited company will also be handled by the new admin and finance manager. The director will now be able to put more focus into designing new products, driving sales through the online website and our social media as well as aiding the workshop assistant to fulfil product orders. A new laser cutter and computer will also be bought as well as new furniture that will help us accommodate more staff and help the business to grow.
Year 2
Year 4
The director will continue to be responsible for all tasks until a workshop assistant is employed in October of the second year. This new member of staff will help ease the director’s workload, enabling Lucy to focus more time on the running of the business, admin and finances, designing of new product, social media and website as well as helping to manufacture, assemble and dispatch the products where necessary. The workshop assistant would be the main person to manufacture, assemble and dispatch all products as well as helping with the website and social media when needed. The new member of staff will start working for us the month after we move into our new workshop and studio and have bought a new laser cutter and computer ready for their arrival.
The business will do a lot of expanding in the fourth year but will not hire any new staff to achieve this. With a small team of three, the business will raise £8,000 on Kickstarter to fund our new UV printer. New products will then be launched in August and October using this new equipment to further expand the product range. We will become VAT registered in this year because it will be compulsory as we will have gone over the £85,000 turnover threshold. We will also introduce worldwide shipping to gain more customers and sales, with a predicted 2300 sales for the year. Due to a larger volume of orders and expanding numbers of machines and staff, it will again be necessary for the business to move to a larger workshop and studio in January to aid further growth. All staff members and responsibilities will remain the same to help the business function and grow.
? Company Director
Year 5
The staff members and responsibilities will also remain the same in the fifth year of the business as well as producing the same product ranges. The business will continue to save money ready to invest in a CNC router in March so that larger furniture products can be produced to further expand the product range after the fifth year. To become more accessible and well-known to our customers, the brand will sell products on a stall at Whitby Goth Weekend in April and November. This is the first opportunity the business will have had to sell products in a retail space because it can now afford to rent a stall and has a large enough product range to warrant having a stall.
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Workshop Admin & Finance Assistant Manager
Onwards
In the future, the business will look to employ a part-time marketing manager to keep our website updated, to manage our online presence on social media and to organise the prize draws used to advertise the brand. A new workshop assistant will be employed to ease the workload. The current workshop assistant will be promoted to manager who will then lead the new member of staff, be responsible for their training and for managing the overall production and dispatching of our products. The business may also look to employ a freelance designer to help inject new ideas and style into the brand. This would ensure that new products are designed and released if the director is ever stopped from designing due to being distracted by other responsibilities of running the business.
7.0 Start-up Expenses Start-up Fund
Director’s Investment Prince’s Trust Grant
£5,000 £1,500
Total
£6,500
The director will invest £5,000 of her own personal savings to kick start the business and pay for the start-up costs. In addition to this we will get a grant of £1,500 from the Prince’s Trust which will take our total start-up fund to £6,500. This eliminates having to borrow money so we won’t have to deal with loan repayments and interest fees. Funding the initial start-up through a Kickstarter campaign was an option but this could potentially prove to be damaging to the business. If a Kickstarter campaign was done so early on in the business then we may not be fully equipped to fulfil the production of the prizes that were promised to our pledgers. Orders of such a large size would be impossible to complete in the small confines of the director’s home. A rented workshop and studio would be required to aid us with this but there would be no guarantee that the business would be earning enough after the campaign to keep funding this rented space. Therefore, it makes more sense to start the business small and slowly build it up over a few years. After this time, we will be able to afford a rented workshop and studio and can then raise money on Kickstarter to further grow and expand the business.
packaging so we can start making and selling our products before buying larger quantities of these items after making some sales.
The start-up expenses for the business are relatively low at £3,040. The highest expense is the £2,000 laser cutting machine which will produce our products. This is the most important thing because without this the business cannot manufacture our products. A fume extractor, costing us £940, will also be bought to clean the air of pollution from the laser cutter. This is very important so we don’t pollute the environment or cause any health risks to our members of staff. We will buy a small amount of acrylic, ribbon and
Another expense will be a fifth of the rent and bills for running the business in one room of the director’s home. This will ensure that her household won’t be out of pocket due to the overheads and utilities used by the business. A small fund of £80 will be used to buy furniture for this space to aid the running of the business. A small amount will go towards marketing and stationary in the forms of business cards, logo stickers and printer paper. The business will have a printer that is leased from a company in Leeds. Leasing a printer instead of buying one works out cheaper in the long run because for £30 a month everything is covered: toner, maintenance, call outs, parts and ongoing support. Although we do have to supply our own paper, it is still far more reasonable than paying extra charges for toner and maintenance if we owned the printer. The cost of computer software and the brand’s website are also covered by the start-up fund. The software that is important to have for the designing of products and operation of the laser cutters are Solid Edge (3D CAD modelling) and Adobe Creative Suite. We will also pay for QuickBooks to help with managing our finances. To keep the cost of computers down, the director will use her personal computer to run the business from and will buy new computers when new members of staff are employed and when the director’s computer needs replacing.
8.0 Financial Plan Banking The business will use Yorkshire Bank because start-ups receive 25 months free banking and overdraft limits of up to £250,000 which is subject to status and fees (Yorkshire Bank, 2017). Having an overdraft will give us financial security during quiet months and at times when the business may struggle, especially in the first few years.
Employee Salaries Oh My Goth’s employees will be on a 6 month probation when they are first hired. They will be paid £900 a month during this period before receiving a pay rise to £1,250 a month. Members of staff will then receive a small pay rise each year to reward their hard work, commitment and loyalty to the brand. This enables the business to afford employee wages in the first few years until the business grows and can warrant paying them more. Our brand wants to be seen as a company who appreciates their employees and rewards their hard work. Looking after our staff will ensure they are happy and financially comfortable in their personal lives, with the hopes they will stay working with us to help us succeed.
390 Units sold in the first year, making a profit of £4,055
12 Month Forecast Oh My Goth is not expected to make many sales in the first few months, and will make a loss, due to the seasonal nature of the launch products. For the first month, we are predicted to sell 2 units, and from May to September we predict we will sell 4 units per month most likely bought by friends and family of the director. This is the worst-case scenario because of the business selling Christmas decorations mid-year, but hopefully we will sell more than expected. Sales will dramatically increase to 60 units in October because of 2 new products being
launched and the prize draw to celebrate Halloween which will drive more traffic to our website. In November, we expect to sell 90 units in the discounts for Black Friday and Cyber Monday when most people in the UK now start their Christmas shopping. Sales should increase to 100 units in December for Christmas but will drop down to 30 units in January. Prize draws will be used during the Christmas months to advertise the brand to our customers, to make our products desirable and maintain high sales. Although we will have January sales for our products, the beginning of a new year is always
fairly low on sales. But sales should pick up again in February when our customers have financially recovered from Christmas and are potentially looking to buy gifts for Valentine’s Day. Sales will decrease again in March but we’re still predicted to sell 28 units with the help of an Easter discount for our customers. Two new products will also be released in March so this month could prove to be more successful than predicted in the cashflow. At the end of the first year the business will have sold a total of 390 units, turning over an income of £21,840 and earning a profit of £4,055.
5 Year Forecast After the first year, the business will see a huge increase in sales, reaching 1412 in the second year. We will continue to grow over three years by employing members of staff, buying new machines and relocating, which will all take some toll on the finances. Nevertheless, the business will still survive during this time and will really thrive in years 4 and 5 when the business doesn’t need to buy as many machines or employ new members of staff. The Kickstarter campaign in the fourth year to raise funds for a new UV printer will be a huge help to the businesses finances because it means we won’t have to pay for the new machine ourselves unlike in previous years. The company finances dip again at the end of the fifth year when we buy a CNC router using our profits that we’ve saved up. Each year we need to make sure we earn high profits over Christmas time, October to December, to keep the business afloat during the rest of the year when the sales are predicted to be lower. By the end of the fifth year the business will have sold a total of 8,777 units, making a net profit of £14,045.
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By the end of the fifth year the business will have sold a total of 8,777 units, making a net profit of £14,045.
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B2027539
By Lucy Danby