Business Plan for customized handbags in Singapre

1. DAS LEATHER
WERKZ
Ho Fengkai (12662826)
Sven Rischka (12662893)
Lisa Pang Chih Pei (12661744)
Sidhu Jujhar (12667282)

2. Table of content
 Research Analysis
 Concept
 Marketing
 Operations
 Human Resource
 Finance
 Conclusion

3. Research Analysis

4. Hypothesis
 Questions our team asked before embarking on this project.
 What kind of problems did people usually face?
 Is there a business potential in solving this problem?
 Is there somebody already doing this that we do not know?
 Finally, Is there a market in Singapore for handbag customization?

5. Research Analysis
Secondary Literature Review
 Bottega Venetta, Wilson(2010)
 Contrary to popular belief, Bottega Venetta does
customized orders
 Very expensive
 Niche segment of their consumer demographics

6. Research Analysis
Secondary Literature Review
Freddy&Ma Online Store (2006)
Most designer bags are copied within
weeks of release.
By online mass customization orders, its
possible to deter copy cats

7. Research Analysis
Secondary Literature Review
 Custom Orders, Khan(2012)
 Growing number of rich individuals spending on
branded custom made products with 2 months
waiting time.
 Custom orders account for nearly 20% growth in
market share in certain markets.
 Phenomenon attributed to the rise in prestige and
recognition as individuals grow more rich.

8. Research Analysis
 Primary Survey Research
 Survey construction
 Objective of our survey is to investigate the some of the
reasons why female and males would buy leather products
 Questions are formulated in order to determine the
underlying meaning of inference

9. Research Analysis
 Primary Survey Research
 Survey methodology
 Team of 4, with 30 surveys handouts each
 City Hall interchange as the place of our survey location
 (Reason being it is near our potential shop space and has a
high human traffic)
 Conducted over several days
 Target focus is on more female participants

10. Research Analysis
 Primary Survey Research
 Survey findings
Figure 1. Gender Figure 2. Age Group
1
Proportion 61.95%
38.05%
0.5
19.30% 0 0 0
Females 0
Males <18 19-25 26-35 36-45 >45
80.70%
Figure 3. How many
leather bags being owned Figure 4. How often do you buy
100.00%
79.34% leather bags
80.00% 76.08%
1
60.00% 23.92%
0 0
40.00% 0
20.00% 10.88% 9.78% More than once a month Once a month Once every 6 months Once every year
0.00%
<4 5 to 9 >10

11. Research Analysis
 Primary Survey Research
 Survey findings
Figure 5. Reason for buying leather bag
50.00% 41.31%
40.00% 30.43%
28.26%
30.00%
20.00%
10.00% 0 0 0
0.00%
Quality Colour Branding Size Affordability Others
Figure 6. Spending on one Figure 7. Reason for being
leather bag unhappy with any of the
76.09%
0.8
0.6
purchases
0.4 60.00%
16.31% 40.21%
0.2 7.60% 40.00% 30.44% 29.35%
0 0
0 20.00%
0 0
<50 50-100 100-150 150-200 >200 0.00%
Service Price Quality Others Not
Applicable

12. Research Analysis
 Primary Survey Research
 Survey findings
Figure 8. Interest in customizing own
leather bag
29.35%
Yes
No
70.65%
Figure 9. Interest in customizing own leather bag if
48.91% <18
19-25 Age Group
50.00%
26-35 Age Group
40.00% 22.82%
15.21% 36-45 Age Group
30.00% 0.00% 0.00%
13.04%0.00% >45 >45
0.00%
20.00% 36-45 Age Group
26-35 Age Group
10.00% 19-25 Age Group
0.00% 0.00%
<18
0.00%
Yes No

13. Research Analysis
 Primary Survey Research
 Survey findings regarding potential for secondary market
of males
Figure 11. What leather products
do males use
120.00%
95.45% 95.45% 95.45%
100.00% Figure 12. Males interest
80.00%
60.00%
in customizing leather
40.00% 27.27% products
20.00%
0
0.00%
Belt Bags Wallet Shoes Jacket 45.56% Yes
54.54% No

14. Research Analysis
 Primary Survey Research
 Survey conclusion
 Demand for customized leather bag exists in Singapore
 Target Market Conclusion
 18-35 women, mostly locals.
 Price range is somewhere between 150SGD to 200SGD

15. Justifications of Business Plan

16. Business Concept
 So what is it we are doing?
Hypothesis proven, therefore market exists
Thus, offering a chance to build your own custom made
leather bag
Customer Value is in the experience of watching your
own leather bag “come alive”
Focus filling of a market gap and solving the “if only it
was in this color” problem faced by many women.

17. Business Concept
Target Market Analysis
Target market of range of 18-25 years old women
More fashion oriented and willing to try new trends
Higher priority of liking the bag itself over branding
Not very brand loyal
Usually possess more than 5 handbags
Still depends on the overall quality

18. Business Concept
Background/Situational Analysis
 First in Singapore for Customized Leather Handbags
 Quality Italian Leather
 2hrs Turnaround Time for crafting

19. Business Concept
Market Summary by PEST
 Political
 Stable political situation
 Economical
 One of the most highly developed and successful free-market economy
 Social
 A steadily growing population of 5.3 million
 Technological
 Highly developed infrastructure
 Environment
 Small but fast channel distribution

20. Business Concept
 Market Summary by SWOT
Strength Weakness
Uniqueness Limited productivity
Versatility High rental cost
High quality leather Lack of warehousing support
High traffic location Human Resource management
Professionally trained staffs
Opportunities Threats
Rising potential in domestic market The lack of brand recognition
Minimal local competition Major part of industry is unrecognized
Near Monopoly structure Niche supplier
Never Outdated Low threshold for new entrant
Utilization of fine quality product and skilled
master workers

21. Business Concept
 The Leather Werkz Mission and Vision
 With the Justification of the business concept
 The Leather Werkz motto is “The Brand is You”
 Aimed at providing our customers the unique experience of
creating their own branded leather bags.

22. Marketing Plan

23. Marketing
 Marketing Objective for 5 years
 Establish a customer awareness of our product / service and to
clearly distinguish ourselves from our competitors
 Focused on the waterfall strategy
 After 2-3 years we could open another outlet in a different part in
Singapore

24. Marketing
 Summary of the 7Ps
 Product :
 Selling high quality, customized leather bags
 Wide selection of Product design

25. Marketing
 Summary of the 7Ps
 Price:
 180 S$ (proof: research) justified by quality
 Launch promotional price of 10% discount

26. Marketing
 Summary of the 7Ps
 Place: Marina Square
 Near MRT, SMU
 Near attractions, hotel, SMU, Suntec Offices
 Huge crowd
 Easy to spot

27. Marketing
 Summary of the 7Ps
 Promotion:
 traditional media through Word of mouth, Flyers, Brochures, Magazines
 Social media through social networks including Facebook, Youtube.
 Special initiation perk collaboration with nearby offices aiming at fresh
graduates looking for jobs.

28. Marketing
 Summary of the 7Ps
 People:
 Founders must continuously improve on product attributes to create
sustainable comparative advantage.
 Detailed training plans for craftsmen and managers
 Customer Service

29. Marketing
 Summary of the 7Ps
 Physical Evidence:
 Mainly through word of mouth, user stories and recommendation

30. Marketing
 Summary of the 7Ps
 Processes:
 2 hours until bag is finished,
 Swift reactions to complaints. TAT 2 days

31. Marketing
Competitors Analysis
Isn’t there somebody doing this already?
 Very expensive high end customization from branded names
 Most suppliers are for industrial use, not commercial use
 Singapore still doesn’t have well recognized concept store
that focuses on leather crafting

32. The potential shop spaces in Marina Square

33. Operations Plan

34. Operations
 Prototype from Leather Bag Manufacturer (different type and
colour)
 Handbag Accessories from Wholesalers
 Example: straps, hooks,

35. Operations
 Daily operations
 4 Workstations, Hand sewn at our shop in Marina square
 Walk-in Customers on Weekend and Public Holidays
 Appointments on Weekdays
 Max Customers in Shop per hour? on Weekends: 12

36. Value Chain Diagram
Import multiple Customer comes in
Craftsmen assembles
designs and and chooses the
the initial bag with
accessories and inner design outlook for the
accessories
sleeve first stage
Next Craftsmen Same customer move on
Customer pays
finishes the to next stage and choose
at the cashier
customization and the
for the bag
frees up the earlier customization/embossing
craftsmen slot
Customer leaves Customer comes
satisfied with a back for in-house
new hand sewn cleaning and
custom made repair, or to trade
leather bag in for another bag

37. Post Purchase Customer Service
 Seal of proof for authentic leather included in every bag
 Leather Care Products are sold in store
 Furture: Inhouse Cleaning

38. Human Resource Plan

39. Human Resource
Organization Chart
12 Employees in Total at the Start-Up
CEO
Logistics Operation
Sales Director
Director Director
2 Store 2 Master
Managers Craftsmen
4 Assistants 4 Junior
Craftsman

40. Human Resource
 Role of owners
 CEO Ho Fengkai
 in charge of the entire management
 keeping company profitable and planning the company future
 Overseeing Investment
 Setting Budget
 Evaluation of Projects

41. Human Resource
 Role of owners
 Sales Director Jujhar Sidhu
 Responsible for reviewing current trends
 Establishing sales quotas for store managers
 Blueprinting the future market expansion in terms of planning
promotions, collaborations with the other companies or the
organizations
 Generate more publicity and awareness of our workshops and
the services.

42. Human Resource
 Role of owners
 Logistic Director Lisa Pang Chih Pei
 Works directly with transportation companies to ensure the best
pricing on shipping of our import goods
 Time communicating with the sales director and the operation
director to maintain supply and demand equilibrium
 Optimize resources utilization and the productivity
maximization.

43. Human Resource
 Role of owners
 Operations Director Sven Rischka
 Supervising and assuring the smooth run of the whole operation
process
 Ensuring that the business policy and imperative created by the
CEO are being implemented and accomplished
 Manage subordinate heads
 Coordinate with sales and logistic directors to make sure that all
the goals are being met

44. Human Resource
Training Program
• Consistency Training
Managers→ Shop assistant : ∆ Sales Ability
∆ Communication Skill
Master craftsmen → Junior craftsmen :
∆ Quality Assurance
• Weekly reflection based on weekly performance

45. Human Resource
Weekdays Working Shifts • 1 Manager
• 2 Shop Assistants
Increased manpower • 1 Master Craftsman
shall be allocated during
• 2 Junior Craftsmen
weekend and holiday based on
the day traffic
Salary Monthly
Store manager Master craftsman Junior craftsman Shop assistant
SGD 2,200 SGD 2,000 SGD 1,700 SGD 1,200

46. Financial Plan

47. The Finances
 Total amount we need to start is $144,450
 Includes Rent deposit of 6 months, taken at 800sqft, $19 per sqft
Startup Cost of business
Direct Materials
Cost of bag imported $3,100
Cost of accessories imported $200
Cost of inner bags $1,850
Direct Labour
Mangers 2 $4,400
Craftsmen 6 $10,800
Assistants 4 $4,800
Overhead
Rent deposit for 6 months $91,200
Renovation costs $10,000
advertising costs for 6 months $17,100
Equipment Purchase $1,000
Total Startup cost $144,450

48. The Finances
 Break even point under different scenarios
 Break even bag per day, average at ~9 bags a day
 Per month cost of $40,350
Per month basis for 500 bags
Direct Materials
Cost of bag imported $3,100
Cost of accessories imported $200
Cost of inner bags $1,850
Direct Labour
Mangers 2 $4,400
Craftsmen 6 $10,800
Servers 4 $4,800
Overhead
Rent deposit per month $15,200
Total Monthly cost $40,350

49. The Finances
 Break even point under different scenarios
 Break even bag per day, average at ~6.9 bags a day
 Per month cost of $45,300
Per month basis for 1000 bags
Direct Materials
Cost of bag imported $6,200
Cost of accessories imported $200
Cost of inner bags $3,700
Direct Labour
Mangers 2 $4,400
Craftsmen 6 $10,800
Servers 4 $4,800
Overhead
Rent deposit per month $15,200
Total Monthly cost $45,300

50. The Finances
End of Year Cash Flow
$7,000,000.00
$6,597,694.97
$6,000,000.00 $6,108,976.83
$5,272,722.96
$5,000,000.00
$4,000,000.00
$3,000,000.00
$2,730,424.61
$2,000,000.00
$1,000,000.00 $1,131,124.61
$0.00
1 2 3 4 5
Cost of Capital 10%
Net Present Value = $129,814.70 (positive NPV)

51. Conclusion

52. Conclusion
 There is a market for customized leather handbags
 Our business proposal can fill this gap in the market
 Overall project is feasible

53. Thank You