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KARGHA

Table of Content
1. Executive Summary 2. Mission 3. Key to success 4. Objectives 5. Company Summary 6. Start up Summary 7. Company ownership 8. Company location and Facility 9. Product and Service 9.1 Product and Service description 9.2 Competitive Structure 9.3 Sales Literature 9.4 Fulfillment 9.5 Technology

9.6 Trend Tracking

9.7 Future products and services 10. Market Analysis summary 10.1 Market Need 10.2 Market Trends 10.3 Market Growth 10.4 Local Sales 10.5 Internet Sales 11. Market Segmentation 11.1 Gift buyers 11.2 Art buyers 12. Target Market Strategy 13. Strategy and Implementation Summary

13.1 Value Preposition 13.2 Marketing Strategy - Promotion - Pricing - Sales - Sales Forecast 13.3 Web Plan Summary - Web marketing strategy - Development Requirements 14. Personnel Plan 15. Financial Plan 15.1 Financial Assumptions 15.2 Key Financial Indicators 15.3 Break Even Analysis 15.4 Projected profit and loss 15.5 Projected balance sheet 15.6 Business Ratios

Executive summary
KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni. We sell original, high-quality custom quilts to discerning customers who give them as gifts or keep them as heirloom artworks. We do the customer response, design, piecing, and machine quilting; hand-quilted works are quilted by independent local women hand-quilters with roughly 20 years of experience, with whom we have negotiated per-piece prices. KARGHA quilts are manufactured in the owner's home, and sold directly to our customers in Rajasthan through our retail outlet at Rajsthali, Jaipur (Rajasthan), as well as over our website. Our strength is transforming even the vaguest ideas and descriptions from a customer into beautiful and meaningful quilt designs which both giver and recipient appreciate. KARGHA works to provide custom, individually designed, warm and snuggly quilt art to customers who value originality but don't have the time or skills to create such pieces on their own. By working with our customers in the design phase, we give them the satisfaction of having input into their gift or artwork, without the intense investment of their own time and labor that would be necessary to produce such a quilt themselves. The result is a personalized, usable, beautiful quilt which will be appreciated for generations to come. We have been making quilts on commission as a hobby for one year now, and cannot keep up with the demand from new customers when doing this parttime. Starting, we will open KARGHA as a full-time venture operated out of our home. Our goals are to be able to pay ourselves and our independently contracted women hand-quilters a decent wage for doing the work we love, and to repay a small start-up loan within two years of opening the business.

We will minimize the financial risks by requiring payment at the time of commission. For the customer, this means that they can take as long as they want to work with us on a design, but once we have agreed on the design, they must pay us in full for the quilt before we will begin creating it. This arrangement has been the one which works best for both sides in the past. Most of the value of the quilts comes from the labor of designing and creating them, rather than from the materials (fabric, thread, etc.) Of which they are composed. Our start-up requirements are therefore fairly small (under Rs.50,000): Rs.10,000 of inventory (a basic fabric library) Rs.10,000 for a second sewing machine Rs.16000 cash reserve Rs.8000 for website development Rs.6000 of various supplies, legal fees, etc. We will invest Rs.25,000 to start the business, and need another Rs.25,000 for initial inventory of fabric and equipment. Based on current prices for our quilts, and the time needed to complete each one, we are forecasting sales of Rs.4,50,000 in the first year. We expect to begin breaking even in the third month.

Mission
At KARGHA, we know that our customers value originality and high-quality work as much as they value their time. Using only a small portion of their time to provide us with the important information about their desires in commissioning a quilt, we will provide them with high-quality, custom-

designed quilt art which can proudly be given as a gift, kept as an heirloom, and displayed prominently as a piece of artwork in a home or office. In the process of delivering customer value preposition our aim is to empower the women labor associated with us.

Keys to success
Effectively establishing our reputation as an exceptional business: Nationally, we are unique in creating truly custom-designed quilts which do not rely on standard geometric quilt designs. Catering to our customers' need to feel unique by emphasizing the personal nature of the customization process, which puts the customer, and his or her personality and feelings, at the center of the product. Quickly (1-2 weeks) turning out these finished custom quilts, both locally and through our website, for a price premium which enhances the prestige of the customized product. Maintaining originality of design and quality of skills to turn bulk, inexpensive fabrics and materials into high-end artworks which can bring high prices.

Objectives
Create and sell 6 original, custom quilts per month, at prices which cover owner's labor. Use contacts in local artisan groups and in our customer base to create successful word-of-mouth advertising.

 Establish a website to provide more information and to initiate non-local sales. Pay back initial investment with 10% interest in two years

Company summary
KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni. We sell original, high-quality custom quilts to discerning customers who give them as gifts or keep them as heirloom artworks. We do the customer response, design, piecing, and machine quilting; hand-quilted works are quilted by independent local women hand-quilters with roughly 20 years of experience, with whom we have negotiated per-piece prices. KARGHA quilts are manufactured in the owner's home, and sold directly to our customers in Rajasthan through our retail outlet at Rajsthali, Jaipur (Rajasthan), as well as over our website. Our strength is transforming even the vaguest ideas and descriptions from a customer into beautiful and meaningful quilt designs which both giver and recipient appreciate. KARGHA works to provide custom, individually designed, warm and snuggly quilt art to customers who value originality but don't have the time or skills to create such pieces on their own. By working with our customers in the design phase, we give them the satisfaction of having input into their gift or artwork, without the intense investment of their own time and labor that would be necessary to produce such a quilt themselves. The result is a personalized, usable, beautiful quilt which will be appreciated for generations to come.

Start-up summary
To begin our business, we will need a stock of materials, and time to begin the first commissions for the business, which are currently being negotiated with two interested buyers, who have offered to advertise our business through word of mouth with friends and family members. We plan to begin our official advertising campaign by placing brochures in likely locations around Rajsthali and RTDC hotels, and by creating our business website Initial inventory consists of threads and a basic fabric library: Between 1/4 and 1 yard each of 300 different cotton fabrics, covering hues and shades in all color groups 3-4 yards each of 25 different cotton backing and background fabrics These fabrics will give us the necessary initial range to execute a wide variety of designs which rely on subtle color grading and variation for their effectiveness. The fabric library will be supplemented month by month, as designs are finalized and as particular fabrics need replacing, or new, more popular ones, become available. Expenses include: A fabric board, at least 8'x8', in order to lay out patterns vertically for display to clients and during the design process Initial marketing materials (brochures and website) Extra insurance to cover the value of the inventory and the sewing machines, as well as work in progress We would also like to have a decent initial fund of cash in our business account, about Rs.16,000 to cover unforeseen expenses such as repair of

the sewing machine, or promising new advertising possibilities (like a local quilt convention) Start-up Legal Fabric board Brochures Supplies: rotary heads, pins, extra machine needles, insurance Website development Total start-up expenses Start-up assets Cash required Start-up inventory Other current assets Total assets Total requirements Rs.16,000 Rs.10,000 Rs.10,000 Rs.36,000 Rs.50,000 Rs.2000 Rs.2000 Rs.500 Rs.1500 Rs.8000 Rs.14000

Company ownership
KARGHA is a sole proprietorship, owned by Mr. Bhavya Soni.

Company locations and facilities

The company is located in the home of Mr. Bhavya Soni. Some quilting work is done off-premises, in the home of the contracted women hand-quilters. All locations are maintained smoke-free, since fabric items can easily absorb odors.

Products and services

KARGHA manufactures all-cotton, high-quality, custom quilts with original designs. Through our design process, our customers work with us to provide the information, ideas, and sometimes even images (like photographs) that allow us turn their intentions into beautiful works of quilt art. When completed, our quilts are hand-delivered or shipped securely to our clients, or, if they prefer, to the intended recipient of the gift, along with instructions on the proper care and maintenance of their heirloom-quality quilt. Product and service description We make six different quilt options, which are differentiated by size into "crib quilts" (for babies and children), queen-size quilts, and king-sized quilts, and by quilt type (machine quilted or hand quilted). Use of hand-dyed fabrics, larger sizes, and special requests or processes (including photo transfer, etc.) will require additional charges and completion time.

 Crib quilts Quilting type: Machine Hand Queen-sized quilts Quilting type: Machine Hand Price Rs.1,000 Rs.1,350-1,500 Time 6-7 weeks 8-9 weeks Price Rs.600 Rs.750 Time 3-4 weeks 4-5 weeks

King-sized quilts Quilting type: Machine Hand Price Rs.1,500 Rs.1,750-2,000 Time 7-8 weeks 9-10 weeks

Price and time variables are determined mostly by the intricacy of the image and quilting designs requested, and reflect additional labor costs. Time to finish does not include shipping time, which will be determined (and paid for) by the client. Since these are custom artworks, we will encourage our local clients to view the finished quilt themselves before sending it to a recipient, and may even provide delivery services for local clients. For customers ordering over the web, we will make arrangements to ship via their preferred shipper, but will recommend insured delivery with signature and confirmation via ups and fed-ex, since the quilts are irreplaceable. When

we ship, rather than deliver, we will provide the primary wrapping of the quilt, first in un-dyed cotton, then in waterproof plastic wrappers within a larger, padded box, to ensure safe arrival in the quilt's original condition. I will not ship any quilt without delivery confirmation or insurance, as each quilt represents roughly 1/6 of our monthly earnings. Competitive comparison There are only a handful of other businesses offering custom-designed quilts, and our competitive advantage stems from our design expertise. Many businesses which claim to offer "custom quilts" are really just offering customers a choice between several pre-determined original designs. We, on the other hand, can help a customer generate ideas, even take basic information about the color of a child's room and his favorite book and create a completely new design which is tailored to the customer's taste. And, most importantly, our design features emphasize our client's ideas and feelings, and our skills, by creating quilted pictures, rather than the traditional, geometric quilt designs other businesses offer. Our real challenge is simply to get our name out there, because we are offering services far more complete than most other quilt makers. Our closest competitors are local pre-manufactured quilt retailers, other quiltselling websites, and the do-it-yourself quilting market. However, none of these competitors offers the combination of factors which define our niche. Retailers, both local and national via websites, offering finished quilts allow the customer only to choose however pre-determined designs, with customization limited at most to color choices. The only other option for custom-designed quilts, offered through quilting classes and books, requires an enormous investment of time on the part of the customer.

Indirect competitors include other personalized services and gift options, from season tickets at a cricket game to other art media, including sculpture, paintings, and drawings. Our challenge is both to enable customers to see personalized quilts as an appropriate choice, and then to demonstrate the superior quality of our quilts. KARGHA fills a unique niche, offering the status and personalization available with a fully custom quilt, without a major investment of the customer's time. We are therefore targeting those busy professionals who see prestige in gifts and purchased artwork not solely in its expense, but by the extent to which it reflects their values: handmade or unique, rather than mass-produced; consisting of all-natural materials, rather than synthetics; made by (and thus funding and supporting) an identifiable small-scale artisan rather than a large corporation; and reflecting sincere feelings of love and caring, rather than commercialized, standardized emotions (more information on our target market can be found in the market analysis section, below.) Sales literature At the end of this plan are sample brochures such as those we will distribute at local arts and quilting retailers. These brochures contain pictures of some previous quilts, as well as customer comments on the high quality of our workmanship and willingness to customize our designs. Each brochure also includes the URL for our website. Sample pages from the website have been printed out and attached to the plan as well. Fulfillment We buy most of our fabrics from the local division of a national fabric chain, to keep down costs. Since most of the design value comes from the combination of fabrics, our ideal fabric supply provides a broad range of

styles, colors, and textures available in small (1/4 yard) to very large (entire roll) amounts. The local fabric store in this larger chain meets this needs, and their low prices (Rs.30-80/yard) for fabric ensures a good return on the fabric expense. Occasionally, customers may want a particular theme or style in the fabric choices, so we also maintain the option of shopping from other local fabric retailers, and of charging a premium for specialty or special-order fabrics (locally hand-dyed artisan cottons and silks, brand-name fabrics from disney, mayur etc.). Many of the artisan fabrics are available through craftspeople here in Jaipur, while the national ones are most available online. Technology Our business as a whole is a relatively low-tech establishment in terms of manufacturing. Since, we stress the value of individually designed and handcrafted quilts. However, our use of a website will attract more technologicallysavvy customers, and we anticipate possibilities for design which incorporate photos and other images which are emailed to us by the customer, enabling their direct input into the finished design. Trends tracking: We will use a database to track our orders and to spot trends in customer requests. For example, we may find that web customers more often request customized text embroidery on a quilt, while our local customers want to choose individual fabrics from our collection. Keeping track of these trends will enable us to tailor our marketing approaches to different customer groups.

Future products and services Our products are driven directly by customer demand. Whatever they request, within reason, we will give them. So, each design, each quilt is the direct result of suggestions or requests from the customer, and future products will reflect any changes in customer preferences. In the future, once our business is established, we may take some design time to create a series of stock elements which can be combined in different ways to provide less expensive options for customers who want customization, but cannot afford to fully commission their own quilt. Eventually, we would like to employ other local craftspeople to do the piecing and quilting of the artworks, so that we can focus on design and customer interaction. However, this is a long-term goal (5-10 years away), and will depend on increasing demands for our products which require additional labor.

Market analysis summary

Quilts are not only decorative; they can be cherished gifts and investments in artwork. KARGHA will target two separate groups - gift buyers, particularly people buying quilts for new children and grandchildren, and art buyers, who are looking for a piece of usable art which they can keep and pass on to later generations or sell in the future as an antique. Because such high quality quilts are more labor and time intensive to make, they are more expensive than ordinary crib or bed coverlets. The market most interested in our products will, therefore, be people with an above average level of disposable income, who value quality workmanship and original - even custom - design work in

the gifts and decorations they choose to purchase. The capital city has a high percentage of such consumers who support a number of craftsmen and women, but very few of these crafts involve high quality textile work other than clothing. This is a market niche that can and should be tapped. Market needs "Do you believe that spending Rs.15,000 on a media center is vulgar, but that spending Rs.15,000 on a slate shower stall is a sign that you are at one with the zen-like rhythms of nature?" In his book, on the new counter culture-as-mainstream elite, David Brooks describes a typical grocery store catering to discriminating premium: "the visitor to fresh fields is confronted with a big sign that says 'organic items today: 130.' This is like a barometer of virtue. If you came in on a day when only 60 items were organic, you'd feel cheated. But when the number hits the three figures, you can walk through the aisles with moral confidence." This scene takes place daily in stores. These sorts of consumers abound in the Jaipur, and as brooks points out, their wealth and status are based on education, brains, and merit, rather than on inherited wealth. This new elite values high-quality, time-intensive products that are visibly non-mass-produced, and this value is understood as a moral, not just political, calculation. While such consumers have numerous options for high-end foods, bath products, furniture, and so on, they do not have a great deal of free time, because their wealth and their lifestyles involve the full-time work of all adult members of the family (preferably in some sociallyconscious or technologically advanced field). We are offering these kinds of consumer access to individually crafted, locally made, unique, high-quality quilt art. In buying our product, our customers get

the kind of personalized gift they want, and can pay someone else to invest the time needed to make the item, since their own time is already full. Quilts, in particular, speak to their ideas about tradition and slow, time-intensive labors of love that these customers may associate with their own mothers and grandmothers, and which the women in particular may feel guilty for not being involved in them. For a price premium, we will make an original, usable work of art that they can be proud to give to their discriminating friends and families, from its all-cotton fabric and batting to the brochure which describes our small, local artisan business. Market trends Quilting used to be seen as an old-fashioned, rather fuddy-duddy kind of endeavor. Recent exposure to issues in the historical aspects of quilting as a forum for women's expression has begun transforming this thinking, and quilting is on the way to being recognized as a valuable (and occasionally subversive) form of mostly-female art. This kind of counter-cultural interpretation will, of course, appeal to our market segment. In addition, we are targeting in beginning more and more to identify their socially-conscious consumerism as rooted in local buying, which is an advantage when selling in the Jaipur market. We anticipate that some of our local customers will initially encounter us online at our website when searching for locally made gift products, and will only then come to visit us in person. Market growth With the increasing use of technology in everyday business endeavors, there are expected to be an ongoing growth in the number of good-paying jobs utilizing creative and critical thinking skills, the characteristics that define our

target market. We also expect that as the economy continues to recover, highincome consumers will feel more and more confident about placing some of their disposable income into more decorative and luxury items, such as the custom quilts we are offering. Since the income of many of the urban elite residents of the Jaipur premium is tied directly or indirectly to the technology sector, improvements in revenue among high-tech industries in the next 5 years will increase our market segment, as well as their comfort level concerning large purchases. Art-buying in the Jaipur, in particular, seems tied to the fates of technology firms, according to Royal art gallery owners. When stock goes up, the young, high-tech employees there seem more willing to invest in items like artwork, rather than hanging onto their cash in case of hard times. Local sales: Art world news noted in a September, 2009 article on art galleries that the Jaipur high-end art and gift buying population, in particular, places a high value on supporting local artists. According to the 2001 census, the Jaipur has almost 1 and a half million residents with incomes over Rs.50,000, including 326,142 residents with incomes over Rs.10,00,000 per year, who would easily be able to afford our products. Within the Jaipur, the vast majority of highincome residents are clustered in urban areas such as the c-scheme and Raja Park metropolitan areas, and larger college cities like Bajaj Nagar. As these also tend to contain more liberal populations who express interest in issues such as art. We are focusing our initial local marketing on the C-scheme, Raja Park and MI Road areas, rather than traveling to more rural towns. Internet sales:

A recent study by TOI reported that nationally, 43% of all internet users had household incomes of at least Rs.50,000. This means that almost half of the people with access to our website are in the target demographic of wealthy surfers who would be able to afford one of our products. In the Jaipur, an internet-savvy area, only 38% of all internet users had such high incomes, meaning that our marketing strategy locally needs to focus on areas where we can guarantee we will be contacting a high percentage of our richer customers. A word tracker search on "gifts" reveals that approximately 8,000 people per month are looking for "gifts," "personalized gifts," "unique gift ideas," and "baby gifts." by including the right keywords in our website, and promoting the idea of custom quilts as a personalized gift idea, we can make our services more visible to these potential customers.

Market segmentation
Our market, aside from geographical divisions (ie., Jaipur versus internet customers), is generally divisible into two main categories: people who are buying gifts for others, and those who are buying a quilt as a "gift" to themselves or an investment in heirloom-quality quilt art. We hope that many of our customers, having purchased one quilt from us, will come back to us for more unique gifts; we expect that our long-term customers will thus move back and forth customers the two categories. Customers will generally encounter us with only one of the two agendas in mind, and we have developed different strategies to appeal to these different needs.

Gift buyers: These are potential customers seeking to buy a gift are looking for something that speaks of their own taste, but more than that, of their intimate knowledge of, and thoughtfulness toward, the gift recipient. For our customers, KARGHA becomes the magic medium by which their caring feelings towards the recipient are made manifest in a tactile, tangible object, which can then be passed on to a friend or family member who will cherish it (and the giver) forever. The key to this transformation is the design process. Our customers give us as much or as little information about themselves and the gift recipient as they wish - the more detail, the better the quilt can reflect the unique personalities, wishes, and love of both people. We have created basic forms and questions for all our prospective customers to consider, but in-person consultations, supplemented by email and telephone conversations with the designer for our website customers, will be the selling point. Our customers are getting personalized services, and they will feel pampered and catered to. Art buyers: these customers are buying our quilts to display in their houses and offices, to declare to their guests, their clients, and their colleagues that they value highquality, original art with a hand-made feel. These clients may send us photographs of the locations in which they would like to hang their quilts, and consult with us about their taste in subjects, colors, and styles. Our design services for art-buyers are more akin to interior designing than to giftmaking, as we will try to make quilts that both co-ordinate with, and yet stand out from, their surroundings. These quilts require the same sort of consulting as gift quilts, but with a focus on the buyer only, and not a recipient. These quilts may depict aspects of the buyer's hobbies or occupation. They may incorporate meaningful elements from the buyer's family history or professional journeys. They may depict treasured pets or family members,

living or passed. These customers are commissioning artworks that will beautifully represent some aspect of their lives of which they are proud.

Target market segment strategy

By focusing on gift-givers and art-buyers within premium market, we are remedying a major paradox these clients face, and taking advantage of our unique market niche. These customers value high-quality, non-mass produced goods, but don't have the time to make them. We specialize in individualized original designs for people who can afford to pay for high-end quilts. Both segments require some level of input into the design phase of the product in order to obtain the kind of personalized feel they are looking for, and our expertise in translating their ideas and feelings into images fits this need perfectly. In addition, the personalization services add value to the product far beyond the high quality of our workmanship by making our customers - and the quilt recipients - feel special and unique and because these two different segments of the customer base may approach their initial searches via different routes. We are locating brochures and advertisements (locally) in three places: General upscale or high-end consumer areas like organic grocery stores, local symphony pamphlets, and upscale day care facilities Gift-centered retail centers such as artisan co-ops, holiday markets, and upscale shopping centers Art-centered retail centers such as antique stores and art galleries

 To target both segments on our website, we will include searchable keywords such as "personalized gifts," "baby gifts," "custom artwork," and "gift ideas."

Strategy and implementation summary

We hope that many of our customers, having purchased one quilt from us, will come back to us for more unique gifts; we expect that our long-term customers will thus move back and forth between the two categories. Customers will generally encounter us with only one of the two agendas in mind, and we have developed different strategies to appeal to these different needs. Value proposition At KARGHA, we understand that you are busy, but that your limited time doesn't reflect your unlimited love and caring for your friends and family. We have the time and the skills to turn your ideas and feelings into a snuggly, warm, and beautiful quilt that you will be proud to give as a gift or display on your wall, an artwork which can be appreciated for generations to come. Our prices are high because they reflect the many hours of work we spend designing, piecing, and quilting your original work of art. Buying a quilt from us is an investment - in your relationships with your gift recipient, in the value of the artwork, and in your own preferences and personal style.

Marketing strategy
Our marketing strategy relies on word of mouth, an inexpensive, attractive, and fully accessible display space (our website), and a small amount of ad placement.

Promotion strategy Our promotion strategy is threefold: To locate brochures and ads about our product in areas where our customers normally shop: high-end organic grocers, artisan co-ops, local bookstores, and the like. To spread word-of-mouth among friends and family working in the kinds of high-tech and high-income, socially-conscious jobs that our customers inhabit To create and promote a website, linked to other quilting sites, to pacific-area quilting promotions, and to sites about local crafts In addition to these direct promotions, we have arranged for a selection of our quilts to be sold at a local artisan's fair, where information about the possibility of buying a custom quilt will be prominently displayed. Pricing strategy Our pricing is high not only to compensate for the labor involved in creating the product, but to establish our custom gifts as a luxury good, with all the status considerations that involves. Our customers are paying for the product, but they are also paying for the prestige of being able to commission an original work of art. Sales strategy Our sales strategies will focus on the personalization process by responding to all potential customers' inquiries in person in the medium they most prefer emails will be responded to by email or phone, phone calls will be returned by phone calls and by face-to-face visits. We have a large collection of existing quilt designs to show potential clients, so that they can see the quality of the

work offered. Ideally, these consultations will take place in the owner's home, where our customers can browse through the fabric library to get inspirations, and can form a personal connection to the owner/designer, and imagine the contract as the beginning of a creative partnership. Sales forecast In addition to the relatively minor direct costs of fabric, thread, notions, etc., used up in each quilt, we have another direct cost for hand-quilted pieces which is paid directly to the independently contracted hand quilters. For each hand-quilted crib quilt, the quilter receives Rs.150; for each queen-sized, she receives Rs.350; and for each king-sized, Rs.400. These additional noninventory direct costs are listed in the profit and loss table. Based on current prices for our quilts, and the time needed to complete each one, we are forecasting sales of Rs.4,50,000 in the first year.

Web plan summary

KARGHA's website will primarily showcase the range of styles the owner has used in the past. In addition to the gallery, the website will offer information on pricing, the design process and expected customer participation. The owner has some experience designing websites, but will be quite busy getting other aspects of the business ready for opening. We have hired a colleague with extensive website design experience to create the preliminary setup, based on layouts we have specified. The site will be hosted by a hosting provider with whom we are familiar, who allows relatively inexpensive upgrades in space and features, should we want to expand the site in the future. Since the purpose of the site is mainly marketing related, and no actual

sales are transacted there, the focus will be on providing useful information to potential clients, sharing stories and images of past quilts, and offering tips and encouragement to other creative and art quilters out in cyberspace. The website will also include a list of upcoming appearances and lectures by the owner. Website marketing strategy The website URL will be included on all our brochures and business cards. We will give a couple of cards to every client along with their completed quilt, with the request that they pass on them on to friends and relatives who might be interested in our quilts, if they were satisfied with their own. This has worked so well in the past that the current website (a one-page bare-bones site) already gets over 10 hits a week. Development requirements The development requirements for the website are external. Our colleague will design, create, upload, and launch a revised website for KARGHA. He will use dream weaver to create the site, and estimates that time from initial design to launch will take about three weeks, since we have already approved the layout and map.

Personnel plan
The company has only one full-time worker - the owner. KARGHA will also contract with independent quilters to do quilting work on the hand-quilted pieces. The portion of the quilt price paid out to the hand-quilters is listed in the profit and loss table, under direct cost of sales.

The owner has several years of experience at marketing, designing, and producing custom quilts for others. He has been working part-time at this business for the last one year; over the last year, demand has increased to the point where he can no longer do quilts simply as a hobby without saying "no" to 3/4 of the commission requests. He will use his contacts and word-ofmouth advertising to turn this into a full-time business. One of the best contacts he currently has is with two local hand-quilters, through the local quilting association. Both have done contracted work for him before and are very interested in taking on a more demanding schedule of commissions. The commissions listed in the sales forecast (Rs.150 for a crib quilt, Rs.350 for a queen, Rs.400 for a king) have been worked out already with the contracted quilters. One of these women is retired, and one is a housewife whose children have just left for college. Both make use of advanced hand-quilting techniques and are very skilled; they have experience with a range of styles, fabrics, and thread types.

Personnel plan Year 1 Owner Other Total people Total payroll Year 2 Year 3

Rs.24,000 Rs.28,000 Rs.30,000 Rs.0 1 Rs.0 1 Rs.0 1

Rs.24,000 Rs.28,000 Rs.30,000

Financial plan
KARGHA will begin commissions in January, 2012, with the first quilts to be completed within 3-6 weeks after commission. Important assumptions We anticipate a steady and increasing interest in quilt commissions, based on the trends we have seen in the last several years. The financial plan is built on the tax and interest rates shown below. General assumptions Year 1 Plan month Current interest rate Long-term interest rate Tax rate 1 10.00% 10.00% 30.00% Year 2 2 10.00% 10.00% 30.00% Year 3 3 10.00% 10.00% 30.00%

Key financial indicators We expect a steady but slow rise in sales over the next three years, up to the maximum capacity of 6 quilts per month. As the business and its reputation grows, we will be able to direct clients toward the best quilt for them more efficiently, and streamline the design and production processes.

Break-even analysis The break-even analysis shows the projected break-even point for KARGHA, taking into account all variable and fixed costs, including fees paid to the contracted quilters. We will pass the break-even point in the third month, and be profitable thereafter. Break-even analysis Monthly units break-even Monthly revenue break-even Assumptions: Average per-unit revenue Average per-unit variable cost Estimated monthly fixed cost Rs.862.26 Rs.116.98 Rs.2,259 3 Rs.2,613

Projected profit and loss The profit and loss for KARGHA is encouraging. In addition to paying good wages and fees to the owner and the contracted hand quilters, the business will be able to pay for the necessary insurance, taxes, loan interest, and a small marketing budget, and still make a modest profit. The projected marketing and promotion expenses are low, because the owner already has an established reputation and clientele, from her part-time forays into quilting in the last few years. The marketing budget includes items like advertisements in local papers and magazines, church and synagogue

directories (a great source for customers seeking gifts!) And yellow page ads, as well as brochures in likely local venues. Projected cash flow The cash flow table and chart show our projected cash position. The table also shows the planned repayment of the start-up loan. (Appendix) Projected balance sheet The projected balance sheet is quite solid. We do not project any real trouble meeting our debt obligations. As business progresses, we will build up our cash reserves so that we can take a vacation or sick time starting in the third year. We would also like to be able to pay our quilters bonuses for their 20th quilt completed, 30th quilt, and so on, although these numbers are not included in the financials of the plan - actual amount will depend on achieving the sales goals set forth, so we are leaving ourselves some flexibility. The ultimate goal is to create a suitable net worth to see ourselves into retirement within 20 years, since this is not the sort of business that can be sold to another person. Most of our assets are cash, and we expect this trend to continue in the future, given the nature of the business.

Business ratios The some of the more important ratios from the quilting for

individuals industry are given in table attached. Our ratios differ from the industry standard in several areas; this is largely because this closest industry type more accurately fits what our subcontracted quilters are doing, and does not represent businesses engaged in creating new gifts/works of art from scratch.