Business Plan

Paper Furniture | Assessment 1 | Dhathri Bhupathi,Vani,Vaarshik,Pranav |
1/8/2013

Contents

1-INTRODUCTION………………………………….2

2-PRICE OF THE PRODUCTS……………………..3-4

3-MARKET…………………………………………….6

4-VIABILITY 4.1-FINANCIAL VIABILITY…………………………9
4.2-TECHNICAL VIABILITY…………………………10

5-SUMMARY…………………………………………….11

Paper furniture

1.Introduction
We have chosen this particular area to explore and develop a new market, basically for 2 main reasons.
1. Global warming: it has become one of the leading concerns for our world today and one of the major factors contributing to its rapid growth is deforestation. Thus saving a portion of trees which are being cut for making furniture may lead to lowering of the deforestation rate and at the same time paper waste can be re-used.
2. Poverty in India: poverty is widespread, with the nation estimated to have a third of the world's poor. In 2010, World Bank stated, 32.7% of the total Indian people fall below the international poverty line of US$1.25 per day (PPP) while 68.7% live on less than US$ 2 per day. In order to help improve the life style of these people who fall below the poverty line. Customer
In this project we are targeting the rural sector of India as it is the sector which stores many potential buyers for our products. The rural sector has less disposable income earners, the people are price sensitive hence they would only buy the products which are priced reasonably and have long life. In the recent years where the world has been hit with inflation the rural sector is one of the sector which has been badly affected and thus demands for products that are low priced and which could fulfil their needs up to an extent.
The following list shows the priority list of the rural sector regarding a product * Affordable price * Durability * Fulfil their needs * Easily available

After listing the needs of the rural sector we have come up with the idea of paper furniture as it is beneficial in the following ways 1. we can re-use the used paper 2. save trees 3. save the cost of producing furniture 4. create furniture which is cheap and which could last long 5. every Indian citizen can afford this furniture 6. it is eco-friendly

The consumers in this sector are highly price sensitive, thus we have made different products which range from Rs10 to Rs 2000 being the maximum.
The following are the products along with the price range.

2.Price of products

3. Market
The market for paper furniture has to be developed as paper furniture currently does not have any market which can be considered. Paper furniture are made only in few houses in the rural areas and they are produced only for personal use. Thus we have identified this gap in the market and considered it as an opportunity for creating a new market for a new product i.e paper furniture which is restricted within the four walls of a house.
We have estimated the market for this unique products will raise once the product is in the market as we produce paper related products for different purposes and we have planned on meeting all the requirements of the rural people with our products and we assure them satisfaction on their expenditure for the products.
About 70% of people live in the rural areas of India thus catering to them not only satisfies them and increases their standard of living but also there will be an economic growth.
In order to understand our market for paper furniture we conducted a survey. The survey covered most of the highly populated rural areas. We conducted the survey by grouping 15 to 20 people in each group, creating around 500 groups( around 10,000 people) across Indian villages. After grouping, we asked the following questions to them in order to get an overall opinion on paper furniture.

S.No | Questions | 1 | How much do you’ll spend on wooden furniture and decorations at your home? | 2 | What do you’ll do with out-dated newspapers? | 3 | Do you’ll prefer plastic furniture over wooden furniture? | 4 | Will you’ll prefer paper furniture if it has the same strength of wood and costs much less than wooden/plastic furniture? | 5 | Is there anyone in this group who use paper furniture? What is your opinion on it and how is it different. |

After collecting various responses from the people we have condensed it and briefed it as follows: * Most of the people like to decorate their homes with wooden furniture as it is considered as a prestigious aspect in the rural areas, as only the rich can afford the high charges of wooden furniture. The low income people have no other go as the only alternative for wooden furniture is plastic furniture and that too is not available at a low cost thus the low income people have to save money in order to a minimum purchase which causes pressure for them.

* Most of the people would sell the out-dated newspapers to shops which buys these newspapers in bulk (in terms of kgs).

* Most of the low income people opted for a “yes” to plastic furniture over wooden furniture as it was cheaper in comparison and they had no other go expect for buying the plastic furniture. On the other hand plastic furniture cannot created all the “furniture types” as wood does so they have to altimetry spend bulk amount on the wooden furniture.

* Most of the people opted for a “yes” and this showed a positive response for our project.

* Out of every group there were around 3 to 5 people who used paper furniture but at a domestic level (it was never commercial), but they complained about the fragile nature and its durability. We have noted these points as to work with them to produce paper furniture which is strong and has high durability.

Market size = number of customers x price of each product = 854140000 x 1000 = 8, 54,140,000,000

We have figured out after the survey that our competitors are the manufacturers of wooden and plastic furniture. The strategy which we could adopt in order to survive in the market could be “producing attractive and durable furniture with reasonable price”.

4. Viability
4.1Financial viability

Name | Quantity | Purpose | Cost | Rough balance | 1 | Measuring the old news papers | 200 | Measuring beaker(1 litre) | 1 litre | Measuring the water | 60 | Measuring cylinder(200 ml) | 200 ml | Measuring the favicol | 20 | Big containers | 10 | Mixing the glue and paper pulp | 500( 50 each) | Weighing balance | 1 | Measuring the paper pulp | 200 | Favicol | 10 kgs | Mixing with the pulp to make paste | 5000 | Big buckets | 5 | For soaking the out-dated newspapers | 300( 30 each) | grinding machine | 3 | for grinding the wet newspaper into a pulp | 12,000(4000 each) | Land | 400 sy | Land for producing paper furniture | 5,00,000 | Flooring(rough stone) | | | 25,000 | Compound wall and shed expenses | | For securing the place for production | 3,50,000 | Lighting and water supply | | | 25,000 | Sewage and maintenance | | | 75,000 | Labour | 30 | | 3,00,000 | Moulds | 3 different types | | 10,000 | Transport(3 mini vans) and communication( 4 landlines in the factory) | | | 25,000 | Miscellaneous expenses | | | 15,000 |

Total capital invested = 13, 43,280 approximately 14, 00,000
The estimated price for producing 1 kg of pulp would be Rs.50 to 70.
To being the production process we have to collect all the raw materials which are needed for the production .i.e. out-dated newspaper and favicol.
In order to get a continuous supply of bulk newspaper we have contacted the bulk purchasers of out-dated newspapers and signed an agreement for the supply of bulk out-dated newspapers every week and for favicol supply as well we signed an agreement with the company for the direct delivery to out factory every month.

4.2 Technical viability
The methodology of making paper furniture: 1. Collected old newspapers of 5 kgs (which can produce pulp of 10 kgs) 2. Fill the bucket with 3 litres of water(10 buckets) 3. Tear the old newspapers into small pieces and soaked them into the buckets filled with water. 4. Leave the buckets untouched for 48 hours. 5. Only collected the soaked paper from the buckets and poured out the left out water. 6. Grinded the wet newspapers by a grinding machine in order to get the pulp. 7. Measure 1.5 kg of pulp by using the rough balance and add 150 ml of favicol into the pulp and mix the pulp and favicol till the pulp and gets completely mixed and results in a paste. 8. The paste obtained should be smooth, fine and flexibility so that it can be moulded into many shapes and sizes. (The proportions of the pulp and favicol should be strictly maintained for good quality). 9. Place the paste in/on the moulds with desired shape and size, leave it to dry. When it is 25% dry press the paste harder in order to make the paper mould strong. 10. In order to increase the strength add powder wood as it can fill the any gaps in the paper furniture and it can be used to add design to the products.

5. Summary

The project not only looks at generating profits, in fact it takes a deeper look at increasing the standard of living of the people who are below the poverty line in the rural areas of India. Other the other hand one of the major aims of this project is to “save trees” in order to provide a healthy environment for our next generation. The products which are produced are eco-friendly, durable, attractive and strong. They have passed the water proof test and sound test. The results indicated that the products resisted water up to 12 hours without any change and produced much less noise pollution when compared to plastic or wooden furniture. While setting the prices we kept in mind the price sensitive consumers and designed our products which suit their lifestyle well. We gave an option of customisation to the rural people, through this option they can chose and design the product according to their wish but a charge of Rs.5 will be added to the products price. Our products range from the basic need to a luxury desire but with a promising low price.

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