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Drapery Fabricator Business Plan

3 March 2023 Businnes Plan


Drapery Fabricator Business Plan



Introduction

Cutting Edge Drapery has been a trusted workroom for decorators. The company produces slip covers, draperies, as well as other textile products, in accordance to interior designers’ designs. Cutting Edge Drapery recently increased its production capabilities and is now well-positioned to expand its client base. The company is committed in providing top quality workmanship, meeting all agreed delivery dates, and executing custom-made work exactly according to the designer’s idea. This business plan will help the company identify future clients, describe its marketing strategy and improve its internal procedures to increase its profitability.


The Company

Cutting Edge Drapery is based in Loudon New Hampshire. The company’s largest share is made up of soft window treatments. The company targets a market of $2.7 million for soft window treatment in these communities. This market share is directly proportional with disposable income and real-estate valuations.

The company is a sole proprietorship and has been operating for nearly 25 years. The owner operated her business out of her home and was a seamstress, tailor, and then she moved it into rented space in Loudon. The expanded space allowed her more time to focus on window treatments and draperies. The office is comprised of 2,200 square feet where seven people are employed full-time. Recently an assistant has been hired to take on the administrative burden and to help improve the company’s internal procedures. A new outside accountant has been engaged who is streamlining the computerized accounts.


The products

Cutting Edge Drapery provides sewing services in the creation of high quality soft window treatment products such as; draperies, swags, jabots, slip covers, etc.

Although it could be considered a company that makes products, clients furnish the fabric for each custom-crafted unit. The company only provides the services of sewing and installation to its customers. The company does not need to supply fabric directly. This is the most costly input in the production process.


The Market

The population of 17 communities located near Cutting Edge Drapery has been estimated at 277.253. This would translate to a market for soft window treatment in the area of more than $2.7million annually. All of these treatments have to be created in decorator workshops. The company accounts for 7.5% in this local market.

The company is changing its target market to interior decorator clients in order to reach the higher-end market of interior designers. A change to this target market will improve profitability levels since the designer segment is much less price sensitive and provides greater margins. The clientele of the designer include high-income homeowners that are interested in unique products and superior customer service. Cutting Edge Drapery, which is the company that best serves this market, must provide a high level service environment for designers and workers.

To reach the interior designer-controlled portion of the window treatment market. (Designer is the key word, not decorator). Within the next twelve month, the company will market the 15 targeted interior designer members of American Society of Interior Designers. It also plans to establish business relationships with at least three of them. This will grow to five in the second year and seven in the third year. The company faces significant competition from existing workrooms within the local area. Cutting Edge Drapery’s strategy is to enhance its image by advertising in prestigious trade magazines, joining and networking ASID membership and actively marketing its target market.


Financial Considerations

Strong profits will be achieved by implementing the marketing research and a tailored marketing strategy as described in this business plan. On average, revenues will represent 11% of the market for soft window treatments in 2000.

Monthly breakeven is possible.

The total production was about 98 units at the time this article was written. It will increase to approximately 115 units by 2000.

It is the policy for the company’s clients to supply the fabric needed for soft window treatment products. Therefore, the company has very low costs of goods sold and a high gross profit. Furthermore, the custom nature of the business means that there is minimal inventory cost and accounts payable. Finally, the company has no long term debts or capital assets that could affect cash flow. The company is expected to make use of this asset to increase its production and market share in the near future, given its ability to generate such a large amount of cash flow.

1.1 Objectives

  1. To be able to penetrate the interior-designer-controlled share of market for window treatments (Designer being key here, rather than Decorator). It is the company’s goal to market the 15 targeted members of American Society of Interior Designers within the next 12 months and to establish a business partnership with at least three of these designers. This will grow to five in the second year and seven in the third year.
  2. To significantly increase profitability. In order to encourage the outsourcing of price-sensitive work, we will formalize pricing. This will allow attention to more expensive custom work to be performed in the lower-priced designer market. This pricing will insure a minimum of $65,000 in pre-tax profits during the first year.
  3. To improve and streamline the administration of the company. This will allow for a reduction of the owner&#8217s involvement in simple administrative tasks to 20%. This will allow her more time for her sales and marketing tasks.

1.2 Mission

Cutting Edge Drapery has the best chance of serving the interior design market. Clients of interior designers are able to afford custom materials and high quality solutions. The company cannot compete against large workrooms that can produce mass quantities, nor can it compete with home workrooms. The company is committed to providing high-quality workmanship, meeting agreed delivery dates, and executing custom work exactly as per the designer’s design.

Success Keys 1.3

A few key factors can make or break a professional workroom’s success. Most of them stem from an interior designer’s reputation.

  1. Private clients must not be allowed to enter a professional workroom. Many interior designers fear that one of their clients will find out that he could have made thousands of dollars by working directly with the office. If private clients contact the company, they should be referred to a designer who works closely with the company.
  2. Clients who can afford interior designers tend to be very demanding; designers are under a lot of pressure. An interior designer must feel that his workplace considers him to be the most important person alive. Any action that might indicate that the workroom might be busy with other designers’ work, such as failing to return phone calls promptly, must be avoided.
  3. The workroom must keep its word. The work must be performed exactly according to plan. It must also be delivered on time and at the agreed rate. Communication between the designer and the workroom is essential.
  4. It is crucial to have a competent production supervisor. The production supervisor must ensure that jobs quoted at 15 hour increments do not take more than 20 hours. Profit goals cannot reach if individual production stitchesers are not working efficiently or are idle.

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