Introduction
Jewellery business is among the fastest growing forms of business globally, as noted by Loughran (2009); the usage of jewellery ornaments across the world has grown tremendously in the last ten years. In the United States, by 2010, around 75% of households—preferably women—have appreciated the use of jewellery ornaments (Zikmund and Babin, 2007). These figures push companies and individuals to develop jewellery stores and introduce new methods of serving their customer; this has necessitated the selection of Luton Mall to commence the business activity. The profound impact of this business activity on the global market is clearly captured by Loughran (2009) who stated that the explosive appearance of jewellery stores as a major global business activity has tremendously changed the markets, industries, consumer segmentations and consumer behavior.
Tech Jewellery store will provide youth-centered products and ornaments that are trending national and even international but not stocked in the local market in order to enhance its competitiveness. The owners of the company will build a cost-effective business operation that will swiftly increase their profitability and enhance access of fashionable jewellery ornaments by their customers.
Vision:
- In our business operations we aim to create a good reputation through competitive prices, quality products, prompt delivery and excellent customer service.
- To be dependable and trusted youth-oriented jewellery store throughout UK.
Mission:
Products
Tech Jewellery store will deal in the following products;
- Bracelets
- Charms
- Earrings
- Necklaces and pendants
- Rings
- Watches
Industry analysis
According to a market research carried out by Zikmund and Babin (2007), jewellery products in UK are growing is spite of the recent global recession. Zikmund and Babin (2007), points out that consumers’ shopping is becoming increasingly inclined to fashion commodities, and jewellery plays a key role. Definitely, this is good news, since jewellery sector has for many years been growing and does not demonstrate signs of slowing down.
According to Allen (2011), revealed that many respondents had increased the amount they spent on jewellery products, only a small percentage reported that the amount they spent on these products has reduced. These results may be due to the fact that in most cases jewellery stores are fashion-oriented. In addition, increase in online shopping, especially on these products, has facilitated security and safety of transacting on the products before (Loughran, 2009). The most interesting aspect, which is of importance to this business plan, is that fact that the amount of young people who buy youth-oriented products continues to increase. .
Youth oriented jewels and ornaments is now a billion dollar segment within the jewellery industry. As already mentioned, the popularity and appreciation of new trends in the fashion industry among young people is well known and has resulted to increase in productivity of these products. The targeted population of the company will be the youth and women at their mid-ages as they are fashion-sensitive.
Marketing Analysis
For Tech Jewellery Store to succeed, it will be required to formulate a functional marketing strategy. As explained by Porter (1998) a marketing strategy entails a plan meant to assess the resources of the business and use it to bring in more sales and attain competitive advantage. It entails several market evaluations, which will offer information for implementing the actual strategy.
Indeed, there are a number of ways of implementing a marketing strategy, however, for this marketing plan, we shall use a SWOT analysis, which underlines that the internal and external environment of the business. The marketing strategy also gives a marketing mix comprising of the 4ps. After analyzing these two marketing aspects, the actual marketing strategy will be reached.
Normally marketing strategies are formulated for a number of years and it is much detailed. Nonetheless, since Tech Jewellery Store is a start-up company, we shall only concentrate on the first year alone, which is a very critical year, since the company has to penetrate its market in the first year. It is not clear yet how the company will perform in the first year, therefore, it is not necessary to make a multi-year marketing strategy.
Swot analysis
SWOT analysis is a common tool of evaluating marketing environment (Porter, 1998). It assists in assessing the company’s resources in regard to the company’s environment. Basically, SWOT means strengths, weaknesses, opportunities and threats (Porter, 1998).
Internal environmental factors:
Strengths: Tech Jewellery Store will offer its youth-oriented products at a reasonable price owing to the fact that the company will source these products directly from the manufacturers to the consumer. Tech Jewellery Store may at times import a number of these products. Porter (1998) affirms that cost efficiency as well as customer service is important aspects in an organization. In addition, running a business entity within its locality reduces expenditure on advertising its products globally; this will allow the company to offer lower prices.
Weaknesses: the company is start-up in the young-oriented products and there is stiff competition. Certainly, it will not be easy for a new entrant to compete with well established big stores. Since this is a jewellery store, it will have to work extremely hard to penetrate the market. The company may also be faced with logistic problems in terms of advertising and delivering products to its customers.
External environmental factors
Opportunities: Tech Jewellery Store has an excellent opportunity to expand as company in this relatively new market segment of fashionable and extremely sophisticated youth-oriented products in UK. Since this is a jewellery store, it has endless possibilities to expand. The company also has an opportunity to achieve high volume sales and make good profits in this market. More so, the economical situation is improving, meaning young people will have more money to spend on trending items. There is also change in consumer behavior, and more and more young people are embracing jewellery commodities, which mean that the company can easily increase it sales.
Threats: the major threat is competition from other jewellery stores offering similar products and targeting the young people and middle-aged women. More so, as jewellery store gains roots, there is bound to be new entrants who will increase competition and raise the level of threat in that area.
Marketing mix of the company
The marketing mix comprises of the 4Ps (product, price place and promotion).
Product: since Tech Jewellery Store does not engage in manufacturing of the products it sales, it will sale well known brands in fashion circles in UK. As noted by Cannon et al (2008), it is easy to sale brands already known to customers because they may be familiar with them. Customer service will be offered through FAQ (frequently asked questions), direct emails and online chat service.
Pricing: Tech Jewellery Store intends to offer lower prices compared to other retail stores. This will be achieved through skimming the cost, which is lower when using online platform. The company will also offer volume discounts.
Place: Certainly, the distribution channel of Tech Jewellery Store is directly to consumers. The company will fully operate in its premises in Luton Mall. Where delivery of the products is required, the store will outsource transportation services.
Promotion: The promotional strategy of the company will comprise advertisement in various portals and through organization events targeting the youths and middle-aged women.
Operations Management Plan
The Jewelry store does not require a complex and long-chain organizational structure. As it is a small-scale business entity, it will incorporate a single owner and few employees. The sole-owner will manage the strategic roles and managerial responsibilities. The management team will govern the operations of the business entity and ensure that it meets its strategic goals and objectives.
Tech Jewellery Store will be focused on marketing its products to the targeted customers in Luton town and the neighboring towns. The main marketing strategy that the company will employ will be to stage events meant to increase the visibility of the company with its customer base. The company will partner with existing local businesses serving similar customer base to sponsor the events.
The business operations of the company will be under the owner who will act as the operations manager, and will be assisted by four other persons (marketing manager, website managers and two processing staff). Over the first few months of operations, the owner will be faced with numerous responsibilities. This will range form designing the perfect display strategy for the jewelry, acting as sales representative, handling all the orders for the raw materials and finished products. After analyzing the trend in the marketing field, upon completion of eight months of field work, the owner will recruit independent sales representatives to foresee marketing and selling of the products (Loughran, 2009). The owner will not take the salary for the first two years of operations, and in the third year the owner will be allowed to draw $15,000, which will increase with increase in the years of operations.
| Position | Year 1 | Year 2 | Year 3 |
| Owner | $0 | $0 | $15,000 |
| Sales Representative | $8,250 | $20,000 | $20,000 |
| Total Costs | $8,250 | $20,000 | $35,000 |
Financial plan
In analyzing the financial projection of the business entity, profit and loss statement and balance sheet provide a clear perspective on the financial plausibility of the entity. Profit and Loss statement measures the entity’s profitability, while the Balance Sheet denotes the entity’s financial position. The Cash flow demonstrates Tech Jewelry Store’s status of cash paid and cash received within a given period. Some of the transactions should be assumed in the preparation of the projected Balance Sheet, Profit and Loss statements, and Cash Flow statement. The main issue to be considered in analyzing the financial capability of the entity is the start-up cost. It is projected that start-up costs for the entity would be approximately $56,300. The inventory cost that Tech Jewelry Store will incur during the initiation of the project is estimated at $49,800. The table below provides a summary of the Start-up Costs for Tech Jewelry Store.
| Initial Assets | |
| Opening Inventory | $45,500 |
| Equipment and Fixtures | $3,500 |
| Cash register | $7, 300 |
| Total Initial Assets | $56,300 |
| Total Costs for Starting the Business | $56,300 |
The sources of funds for the project and its use are tabulated below.
| Source and Use of funds | |
| Sources of funds | $ |
| Owner’s and other investment | 97,424 |
| Bank loans | – |
| Other loans | – |
| Total Source of Funds | 97,424 |
| Use of Funds | $ |
| Buildings | – |
| Leasehold improvements | – |
| Capital equipment | 10,500 |
| Administration expenses | – |
| Opening Inventory | 45,500 |
| Advertising expenses | – |
| Other expenses | – |
| Contingency funds | – |
| Working capital | 41,424 |
| Total use of funds | 97424 |
The financial plan will also include the break-even analysis of Tech Jewelry Store, which is based on projected monthly costs shown in the table below. The fixed cost is projected to be $70,624.62, variable costs at $20.00, Number of units to be sold at $147, while the average unit price for a jewel to be at $100.
| Fixed Cost | $70,624.62 |
| Variable Cost | $20.00 |
| Number of units | $147 |
| Unit Price | $100.00 |
| Net Revenue ($) | Fixed Cost ($) | Variable Cost ($) | Total Cost($) | Total profit ($) | |
| 0 | 0 | 70,625 | 0 | 70,625 | -70,625 |
| 147 | 14,700 | 70,625 | 2,940 | 73,565 | -58,865 |
| 294 | 29,400 | 70,625 | 5,880 | 76,505 | -47,105 |
| 441 | 44,100 | 70,625 | 8,820 | 79,445 | -35,345 |
| 589 | 58,900 | 70,625 | 11,780 | 82,375 | -23,475 |
| 736 | 73,600 | 70,625 | 14,720 | 85,345 | -11,745 |
| 883 | 88,300 | 70,625 | 17,660 | 88,285 | 15 |
| 1030 | 103,000 | 70,625 | 20,600 | 91,225 | 11,775 |
| 1177 | 117,700 | 70,625 | 23,540 | 94,165 | 23,535 |
| 1324 | 132,400 | 70,625 | 26,480 | 97,105 | 35,295 |
| 1471 | 147,100 | 70,625 | 29,420 | 100,045 | 47,055 |
| 1618 | 161,800 | 70,625 | 32,360 | 102,985 | 58,815 |
| 1766 | 176,600 | 70,625 | 35,320 | 105,945 | 70,655 |
| 1913 | 191,300 | 70,625 | 38,260 | 108,885 | 82,415 |
| 2060 | 206,000 | 70,625 | 41,200 | 111,825 | 94,175 |
| 2207 | 220,700 | 70,625 | 44,140 | 114,765 | 105,935 |
| 2354 | 235,400 | 70,625 | 47,080 | 117,705 | 117,695 |
Conclusion
Jewelry industry has become a common business in the economy, and most of the organizations willing to realize maximum revenue inclines on the operations in the sector. With low start-up costs, low running costs and the fast growth of the industry, many business entities are encouraged to open jewelry business. The idea guiding Tech Jewelry Store is to fully exploit the fact that teenagers are rapidly embracing fashion products in relation to trendy fashion. This short business plan has provided hypothetical and practical information on developing a jewelry store.
References
Allen, K. 2011. Launching new ventures: an entrepreneurial approach, London: Cengage Learning.
Cannon, J, Perreault, W, McCarthy, E, 2008. Basic Marketing: A Global-Managerial Approach: Harlow: Prentice Hall
Loughran, M. 2009. How to start a home-based jewelry making business, Globe Pequot.
Porter, M. E. 1998. Competitive Advantage: Techniques for Analyzing Industries and Competitors: New York: Free Press
Zikmund, W. & Babin, B. 2007. Exploring marketing research, London: Cengage Learning.
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]