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Venture concept structure
The venture concept structure and operation matter have been discussed with both accountants and lawyers resulting in several contributions that have been incorporated where appropriate. David and Anne will leave their present jobs when the organization and location of the new venture is prepared and devote their fulltime effort to the enterprise. Security protection equipment is already installed and insurance cover will be obtained.With the exception of the imported low end market stock the designer setting can be ordered by delivery within approximately 14 working days based on a deposit received form the customer. Retail and restaurant buyers expect to order ahead of a delivery with any large quantities e.g. a new restaurant taking up to 30 days for delivery. Arrangements with the designer / supplier are based on Janware 10% deposit with order and the balance ob acceptance of the entire shipment. Retail and restaurant customer will be extended 15 days net payment terms; shop customer will be offered selected credit card facilities and normal cash terms.
Product marketed through Janware will be subject to a mark up of the 100% on purchase price from the designer / supplier. Aside from the 30% discount extended to restaurant and retailers, no additional price reductions are considered. On the basic of the average estimated sales split between retail, restaurant and private customer the gross profit is calculated to be 41% on sales to provide an annual gross profit against forecast sales of $317,200 of approximately $130,000.
The promotional activity will be comprised of the advertising paralleling that of the shopping centre and mailing of the literature to both retailers and drops in selected area post boxes. Advertising in the local area newspaper can be done when seasonal buying period make it appropriate or if special events arise e.g. Design Fairs, shopping centre sales, etc.