Garden Crafts Inc. has created a new product, Sit N’. Caddy. This product will be manufactured and sold in the United States. Garden Crafts developed a mission and strategy. It will utilize value, quality and a conscience as part of the development mix.
Garden Crafts will be incorporated in Georgia as a Chapter S Corporation. The stockholders for Garden Crafts are Rob Kane and Keith Jones. The operational facilities will be located separately from the administration offices. Start-up costs have been projected with the bulk being provided by Mr. John Houseman, former owner of Kustom Kabinets. He has agreed to retain the equipment cost as an individual note.
The product, the Sit N’ Caddy, is a combination stool/tool caddy, constructed out of premium grade hardwood. There are many products that look similar to the Sit N’ Caddy, but none of them are wood-based or customizable in the same way as the Caddy.
An analysis of many markets shows that Home Depot ranks as the most important national retailer for home and garden products. This growing market has shown steady growth with double-digit gains over the past 3 years. Garden Crafts will be a lucrative business in the future thanks to two-thirds homeowners spending an average $532 annually on garden products.
Home Depot was our first target for sales. Therefore, our strategy revolves around the Merchant Home Depot uses as their regional purchaser. Our sales price will be determined by Home Depot’s merchant pricing system. We have calculated our costs and decided that $20 is the best price Home Depot will offer us. The projected 11% growth rate is evident in the three-year forecast, which includes a single product with a standard price.
Labor would cost $5 per unit at $10. Instead of paying hourly rates, future employees should be paid a piece rate. The corporation will also pay part of its net profits as dividends to the founders. The remainder of the profits will go into a mutual fund for aggressive growth as a form if retained earnings.
The three-year period shows an increase in gross sales, as a result of our 11% projected growth rate. Although the trend is not identical to that of sales, operating expenses show an increase. There is a slight deviation from expenses paid in the first year as well as additional expenses not occurring after the 15th months. Considering that the total first year production run will be sold to Home Depot, the profits for the first year sales are healthy, followed by modest growth in the second and third year. You can see the highlights section of this business program.
Garden Crafts is well-positioned to earn healthy returns with a minimum investment. Major factors contributing to this success are the knowledge and skills of the founders, a commitment by Home Depot, uniqueness of design, and a continuous growth in the home and garden market.
Objectives for Garden Crafts:
- Create and construct a workshop capable to handle 10,000 units of the SitN’ Caddy each year.
- Prepare a brochure or specification sheet for Sit N’ Caddy.
- Reduce production costs and increase design efficiency.
Garden Crafts is committed to high quality production and shipping. We are focusing on one product: the Sit N’â€™ Caddy, which is a combination gardening stool/garden caddy. We will ensure that all employees have safe working conditions, putting this first before our profits.
To reach large segments of the gardening community, we will use a variety of marketing strategies to make our product a valuable addition to every gardener’s shed. Garden Crafts is open to any new production methods, product changes, or custom orders from clients.
We will always keep our profits in mind, but never at the expense of our customers.
Success Keys 1.3
We will use these keys to achieve success:
- It is important to have effective promotions. We cannot sell if we aren’t visible to garden enthusiasts.
- Efficiency in production will play a major role in our success.
- Flexibility; this product is designed for gardeners, so when they offer new ideas, we will listen.
- We are open to new ideas and will not be constrained by one idea.
There will be new opportunities, so we must keep an eye out for them and be open to them.
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