Melissa Cruz Professor Mockler MGT 3346 Elegant Touch Introduction For years my mother has been making beautiful curtains and pillows for friends and family. She is a very talented woman and her customer base has grown in the last year. Most of her customers recommend her services to other friends that might be looking for curtains or pillows for new apartments or houses. She usually only charges for materials and has never thought about launching a legitimate business. As her daughter I feel that my mother can profit significantly from her talent if she started charging for labor. I want to launch a legitimate online curtains and pillows business for her. The website will include a portfolio of her previous work. Customers will be able to browse through the portfolio and pick a design or they can arrange a consultation and create a custom design. The website will also showcase different materials and colors customers can choose when deciding on what kinds of curtains to purchase. Mission Elegant Touch is dedicated to providing our customers with custom curtain and pillow designs made out of quality materials at a fraction of designer prices. We are dedicated to creating an intimate relationship with our customers by working closely with them to satisfy their home decorating needs. Elegant Touch isn’t just the purchasing of curtains to adorn your windows or pillows to provide the extra touch to home furnishings; it is a home decorating personal experience with our consultants. Every order is filled to match each customer’s needs. Industry Elegant Touch is a sub-set of the housing industry. It is part of the home furnishing and decorating sub-set. The home furnishing and decorating industry has experienced a decline due to the increase in foreclosures and the decline of the housing market. Consumers are not buying homes. This year has marked the highest recorded home inventory in the housing market. If consumers are not buying houses then they are not decorating them. Consumers are selling their houses in the current housing market. The difficult housing market has pushed consumers to think of new and creative ways to make their homes appealing to the few buyers out there. Research shows that home buyers tend to purchase homes when they have a better idea of how the space can be used. Home stagers are professional home decorators that strategically decorate homes in order to entice buyers to purchase a home. A home stager’s main focus is maximizing space and giving the buyer an idea of what the home can be if they purchase it. Home stagers are constantly buying home furnishings. Home Stagers will use Elegant Touch to add character to homes. They can purchase any curtain or pillow from Elegant Touch. The housing market is not the only industry this company can appeal to. In the current economic crisis, more people are looking to rent. Renters can use Elegant Touch to decorate their homes. Renters do not own their homes but can use Elegant Touch to give the home a personalized touch. Competitive Market Analysis My competitors are all the stores that sell window treatments and pillows in the New York City Area. Some of my major competitors are: HomeGoods- HomeGoods is a major retailer of home furnishings and décor. They operate stores in the United States. The retailer has a website but customers can not buy good directly off the website. They have to purchase the items at the physical store. CountryCurtains.com is an online retailer for window treatments, bedding, pillows, fabrics, and home accents. Target offers window treatments and home accents online as well as in store. Macy’s is a major department store that sells everything from clothing to home furnishings. The department store sells window treatments and pillows online as well as in store. Market Segment Analysis My target market is middle aged women with an interest in home decorating living in the New York City and Westchester County Area. This company will serve specifically; the Bronx, Manhattan, Brooklyn, Queens and Staten Island. In Westchester County we will offer our services to the cities of Yonkers, Mount Vernon, New Rochelle, Scarsdale, and Hartsdale. The company will also work closely with interior decorators to bring them wonderful custom designs for their home decorating projects. Product Elegant Touch will have five main products: basic window treatments, customized window treatments, basic pillows, customized pillows, and fabrics. Basic window treatments- Basic window treatments include valances and curtains. They are available for purchase online. They will be available in a variety of colors. Customized window treatments- A portfolio of customized designs will be available for customers to browse through on the website. A consultation is required for customized designs. Basic Pillows- Basic pillows will be designed to use as decorative items on couches, chairs, and beds. They will come in solid colors and a limited amount of patterns will be also available. Customized Pillows- A portfolio of customized designs will be available for customers. A consultation is required for customized pillows. Fabrics- Customers have the option of buying fabrics on our website. The fabrics customers buy are the fabrics we will use in our designs. Pricing Customized Window Treatments- Cost of labor: $50.00 per single window plus the cost of materials. It takes five hours to make a customized window treatment for a single window. My mother is willing to accept $10.00 per hour as a starting wage. The customer is responsible for the cost of materials. The cost of materials is dependant on how much fabric is needed for the window treatments. Double windows will be priced at $80.00. My mother can work on both curtains simultaneously which makes the process less time consuming and can get both curtains done in 8 hours as opposed to 10 hours. Customized Pillows- It takes about two hours to cut, sew and stuff three pillows. Custom designs make take up to 4 hours. At $10.00 an hour the initial cost for customized pillows would be $20.00 for three pillows. Plus an additional $15.00 for the custom designs marks up the final price to $35.00 for ever three pillows. A single pillow will sell for $15.00. Basic Window Treatments and pillows- The price of basic window treatments and pillows will vary depending on the size of the windows and the amount of pillows needed. Company Structure The company will be separated into separate tiers that will handle specific aspects of the company. Management- I will act as the manager of the website. I will schedule consultations, deliveries, and fill all incoming orders. I will also maintain a monthly inventory of all our supplies. Supplies include all sewing supplies, basic curtains and pillows, and all administrative supplies. Product Management- My mother do the consultations needed for customized designs. She will sew all customized designs and mount any window treatments that require special mounting. Operations Elegant Touch sells three products; custom curtains, basic curtains, and fabrics. Custom curtains are designed by the customer and my mother and may require a special mounting procedure. Basic curtains are all solid colored curtains that do not require any special mounting procedure. The process I have designed to operate the business is very simple. When a custom order request is received a consultation is scheduled. At the consultation the customer and our designer (my mother) come to an agreement on design, texture, and fabric color. At the end of the consultation my mother brings me all the details and I will type up and send the customer a final order confirmation. The order confirmation will included all the details of the design and the final price. It will also include a tentative delivery date. Half of the payment is due when the customer receives the final order confirmation. After the payment is received then my mother starts working on the curtains. Constructing the curtain takes about five days. After the design is complete the customer will be sent a notification email with a link to a website where they can submit the final portion of the payment. If the design requires special mounting then an appointment is set, after five days for delivery and mounting. If it doesn’t require special mounting then the order is shipped as soon as the rest of the payment is received. Basic curtain orders do not have to be made. There will be a standing inventory of solid colored curtains. When an order for a solid colored curtain is received we must verify that we have the curtain in stock. This is to ensure that we ship the correct color to the customer. Once the order is verified and paid for the curtain is packed and shipped to the customer. Receiving payment often takes about two days. If we do not have the specific color ordered by a customer in stock, I will notify the customer. Orders that are not immediately available will take an additional four days to ship. The four days includes two days to obtain the correct color and two days for receiving the payment. Customers may purchase the fabrics used for the customized curtains from Elegant Touch. They also have the option of providing their own fabric. In that case we will send the customer a postmarked box so that they can send us the fabric they would like us to use for their custom curtains. There is an additional cost for purchasing the fabric from Elegant Touch. Here are some scenarios describing our operations strategy: Window Treatments Scenario 1: A person in the New York City area is browsing through our website. They decide that they want custom curtains for their living room. The person fills out a consultation request form. I receive the order form. Once I receive the order form I schedule a consultation. Consultations will be done by my mother whom is responsible for sewing the window treatments. She will meet with the potential customer either in our house or at their house. The consultation will be used to take exact measurements of the windows. The customer and my mother will also discuss color, size, and design options. Once the customer and my mother come to an agreement then I will type everything up an e-mail the customer and official order form. The order form will include the final price, color, fabric choice, design, size and date of delivery. Half of the payment is due within one week after the final order form is received. Custom Curtains take on average three days to finish. Once the curtains are finished I will contact the customer to set up a delivery and mounting time. Some designs will have to be mounted in a special way. My mother will do the mounting of those designs. Mounting takes approximately fifteen minutes. If the customized design does not require special mounting then the order will be shipped via UPS immediately after it is completed. Scenario 2: A customer looks through the website and decides she wants a basic design. She chooses the color and the style. After the customer chooses the color and the style I receive an order form with all the information. I will check our standing inventory for the curtain the customer chose. If we have the curtain available it will be packed up and shipped within three days of receiving the order. If we do not have the curtain in stock, I will notify the customer that delivery will take an additional three days. Pillows Scenario 1: A potential customer browses our customized pillow portfolio. She decides on a design and fills out an order form. I receive the order form and schedule a consultation. The consultation will be done either at our house or at the customer’s house. During the consultation my mother takes down color, fabric, size, and design information. She comes back to me and I fill out an official order form with all the finalized information and e-mail it back to the client. Once the order is finished the pillows are packed up and shipped via UPS. Scenario 2: A customer browses through the website and decides they want basic pillows. I receive the order. If the pillows are pre-made then I pack them and ship them immediately. If they are not pre- made I will forward the order to my mother and she will make them. Once they are finished then I will pack them and ship them. All orders will be filled in the order that they are received. Each order will have an estimated delivery time forwarded to the customer. Payments Customers will pay via credit cards. All information will be securely submitted online. I will set up a business account with Pay Pal through a program called Website Payment Standard. Pay Pal facilitates the acceptance of payments on websites through this program. Only Visa, Mastercard, and Pay Pal accounts will be accepted as forms of payments. Pay pal charges a 2-3% transaction fee. The 2-3% is off the total cost of a purchase. Signing up for a Pay Pal Website Payment Standard Business account is free. The only cost associated with the account is the transaction fees. Marketing Strategy In the beginning we will focus on filling orders made by referrals. Right now my mother has a solid customer base that can provide referrals. We will tell her current customer base to direct their referrals to our website and offer a discount to those who have referrals. I will also focus on using websites such as Facebook and MySpace to advertise to friends and family that can spread the word. I will spend a minimal amount of money advertising in school newspapers, local newspapers and local magazines. Financing The initial financing for this company will come solely from my mother and me. We need a location, sewing machine, fabrics, measuring tapes and sticks, a computer, and fabrics. Location- Initially the company will operate from our house basement. The basement will be set up as a sewing studio. Since my mother owns the house there is no money needed for renting. Sewing Machine- We currently have two sewing machines already set up in the basement. A sewing Machine does not need to be purchased. Fabrics- We have a private vendor that provides us with fabrics at a discounted price. Administrative Supplies- We will need a computer in order to receive purchase orders. We currently have five computers in the house. We will take one and convert it into a business only use computer. We will also need measuring tapes and sticks and accessories that will adorn some of the curtains. Right now my mother owns most of these products because she sews and keeps them in the house. We will buy the accessories as orders come in. Financial Projections 2006 2007 2008 2009 (projected) Sales $10,000.00 $21,000.00 $15,000.00 $17,000.00 Expenses $6,000.00 $10,000.00 $9,000.00 $8,000.00 Profit $4,000.00 $11,000.00 $6,000.00 $9,000.00 All the pillows, curtains, and fabric sales are included in the final sales revenue figure. Expenses include labor and any additional material costs. Final profit is Sales minus expenses. For the last few years the business has come off to a slow start because my mother is not doing this full time. This is a part-time job aside from her full time job. I hope that once the housing market starts climbing again we can launch this business full-time and increase profits five-fold. While the housing market is slow its better the keep the business as a part time venture. My financial projections do not include rent or equipment expenses. The business is operated from the basement of the home my mother already owns therefore there isn’t any rent to pay for a work space. The sewing machines my mother owned before starting the business therefore there are no equipment expenses. Expenses are strictly cost of labor and additional material cost incurred. Expansion and Looking Ahead As demand grows we will consider hiring more people to sew and others to receive and fill orders. We may even need a warehouse to eventually house already made products.