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Furniture Manufacturer Business Plan
Executive Summary
Trestle Creek Cabinets will be formed as a cabinet company specializing in custom cabinets for the high-end residential, resort, and commercial market. Its founders have extensive experience in the construction and cabinet industry.
Trestle Creek Cabinets will operate under the umbrella of Trestle Creek, Inc., a construction company sharing staff, office space, and administration costs. However, for the purpose of business planning, we are treating Trestle Creek Cabinets as a separate company.
Over some years of being involved with the construction of luxury homes, the company owners have seen a need for a cabinet line with a broad selection of design choices, high-end finishes, along with top of the line organization, customer service, and quality.
Trestle Creek Cabinets will meet those customers needs. Building a strong market position in the high-end residential, resort, and commercial development segments, the company projects revenues to grow substantially between FY1 and FY3. By maintaining an average gross margin of over 25%, the company estimates handsome net profits by FY3.
The company owners have provided the capital to cover the start-up expenses. The company currently seeks a 3-year commercial loan to cover the operating expenses.
1.1 Objectives
The company objectives are:
- To be a top cabinet supplier to luxury homes in the regional market.
- Revenues to more than double Year1 levels by the end of Year2.
- Aim to have 70% of sales in high-end residential customer segment.
- 20% of sales in mid-range residential customer segment.
- 10% of sales in commercial development segment.
- To have a showroom within 3 months in a prominent retail space.
1.2 Mission
To deliver a high-quality product, on time and within budget while also providing a fast, error free ordering system.
Company Summary
Trestle Creek Cabinets is a new company that will provide expertise and quality in the cabinet supplier market while meeting the demanding organizational, scheduling, and quality needs of architects, owners, and construction professionals.
2.1 Start-up Summary
Total start-up expenses, including tools, software, stationery, and related expensesare shown below. Two co-owners, Martin Kribs and Brent Palmer, will provide the bulk of the start-up financing.
At the same time, the company plans to receive a 3-year commercial loan facility, which will help meet the cash flow requirements.
Products
Our product is essentially made with two main components.
- The boxes and shelves will be ordered from two different suppliers (Cab Parts, Scheers), and will be delivered in kitset form. They can be finished with custom veneers.
- The doors, panels, and drawer fronts will come from four different suppliers: Bergmeyer Manufacturing, Homestead Woods, Decore, and Southwest Door Company. We will have 4-6 custom designs, with unlimited different custom finishes, available from Bergmeyer Manufacturing. The other suppliers will provide their stock products.
Market Analysis Summary
Trestle Creek Cabinets will be focusing on architects, owners, and contractors in the regional area who are involved in high-end residential, resort, and commercial development segments.
In 2000, a total of 219 new residential homes worth $168 million were constructed in the Teton County, WY. If we take an average of $40,000 per kitchen, (probably conservative), and multiply that by the 219 homes, that gives us a total of $8,760,000 in kitchens installed for the year.
We plan to acquire 4-5% of the market share of this residential segment in our first year. We do not think this is unreachable, especially in a still growing market.
Teton County, Idaho has great potential as three new resort developments, Teton Springs Golf & Fishing Club, Grand Targhee Resort Expansion, and Teton Country Club, come on line.
The following table outlines to total market potential of the three major customer segments in the Teton County.
4.1 Target Market Segment Strategy
Trestle Creek Cabinets will be focusing on contacting contractors and architects that deal with the luxury home market.
Making ourselves known to these entities will generate some strong leads, along with getting personal recommendations to the home owners.
There are plans to upgrade office space to a showroom in a high visibility location. This will give us exposure to new home builders that are looking for our product.
4.2 Industry Analysis
There are two main types of cabinet suppliers in the industry.
Resellers of complete cabinet sets using stock items where the cabinets turn up completely built. Usually have no shop facilities but do have show rooms.
Custom shops with full, in-house fabrication facilities. They are usually very product orientated and under-perform with customer support.
Trestle Creek Cabinets can provide high volume work, superior project management, and excellent quality while maintaining a low overhead.
4.2.1 Competition and Buying Patterns
The high-end cabinet market understands the concept of service and support, and is more likely to pay for it when the offering is clearly stated.
There are many competitors in the local market. Although each of them deliver a quality product, we feel they fail to deliver a full turnkey package.
There are four factors that govern the cost of all kitchen projects: Scope, Product, Design, and Services. Most people mistakenly think that the size of the project and the choice of brand name products will make for the best results.
But it is the design and a company’s services that will have the greatest impact on the quality and value of the customers investment.
