The House of Pine

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Retail Furniture Manufacturer Business Plan

Strategy and Implementation Summary

The House of Pine will focus on the modest income furniture customer who live in the Richmond Metro area.

5.1 Competitive Edge

Most of Richmond's fifteen furniture stores are dispersed throughout the city adjacent to affluent or suburban communities. The stores downtown are high end and offer no affordable products to the Metro residents.

The primary reason for the price of the furniture is the type of wood that is used. A bedroom set made of pine can cost a customer $400.  The same set made in oak or maple will cost $800. The profits are higher by focusing on the more expensive wood.  When using pine, many manufacturers improve their profits by using cheaper construction techniques.  The resulting poor quality of these products have added to a popular misconception that pine is an inferior wood.

The Richmond furniture stores offer a very limited selection of styles in pine.  Most products are selected to maximize the store's profit, not the customer's satisfaction, since it is believed the customer has few options.

The House of Pine will build its furniture to last generations and will offer the customer all the popular styles.

5.2 Sales Strategy

We will advertise in the university daily student newspaper as well as the Metro area advertising flyer.  In the advertisements for the store opening, we will have a 20% off coupon. We will continue this discount for the first month of operation.

The metro area also has six community organizations that send out weekly flyers to all community residents. We will advertise in the these flyers.

5.2.1 Sales Forecast

The following is the sales forecast for the three years.

Sales Forecast
Year 1 Year 2 Year 3
Furniture $964,000 $1,000,000 $1,050,000
Other $0 $0 $0
Total Sales $964,000 $1,000,000 $1,050,000
Direct Cost of Sales Year 1 Year 2 Year 3
Furniture $432,000 $430,000 $450,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $432,000 $430,000 $450,000