Part One: Description and Analysis of the Business Situation

A. Introduction
This entrepreneur proposal involves a jewelry company called Creative Designs. Creative Designs specializes in the design and manufacture of necklaces, earrings, and bracelets using semi-precious stones, Czech glass, bone, and clay beads. Creative Designs provides the general public with high quality, durable, affordable jewelry, and will also custom design a piece of jewelry to a customer's specifications.

B. Self Analysis
I, J. Tindall, have been designing jewelry for several years. I originally started designing jewelry with seed beads in the fourth grade. I played the violin, and I wanted to purchase my own instrument. So, I started making seed-bead earrings and bookmarks, and began selling them to my classmates and teachers. Eventually, this brought in enough money for me to be able to buy my violin. Later, in the sixth grade, I became interested in making necklaces, earrings, and bracelets with semi-precious stones. In the summer of my sixth grade year, I bought a few different supplies and designed different necklaces and earrings with semi-precious stones. I sold some of what I made, and turned jewelry making into my major hobby.

Since the sixth grade, I have invested much time and money into my business, and at the present time have 60 different necklaces, and over 60 pairs of earrings for sale. I have applied for and received my tax, wholesale, and resale business licenses and identifications. I am presently participating in craft shows, doing custom orders, and working on placing my jewelry into consignment shops.

C. Analysis of the Trading Area
The biggest challenge for Creative Designs is to increase the marketing exposure for its jewelry products. The recent rapid growth and availability of the Internet has created an outstanding new opportunity for advertising and marketing for a smaller company like Creative Designs.

I plan on acquiring an Internet Web "home page" for my business and using it to display my various jewelry pieces and designs. I will create an "online product catalog" that can be viewed, or "browsed", by anyone in the world who has access to the Internet. I will include high quality, full color photographs and product descriptions for each of my designs. I will also include informative descriptions of the various types of stones (e.g., malachite, lapis, rhodonite, etc.) and other materials used in my designs.

Additionally, I will utilize a Web page software program that presents the product information along with an online "shopping cart", where a person can select items for purchase ("placing" the items in their cart), and then conclude the sale with a secure purchase transaction using a credit card. People could alternatively decide to pay for their purchases by mailing a check or money order, if they do not want to use their credit card on the Internet. As orders are placed, I will be notified of the transactions by e-mail, so that I can fill the orders and mail out packages to my clients.

Having my business on the Internet will allow me to reach a wide variety of ages, and ethnic and income groups that I will be able to sell to. I will feature products that will appeal to teenagers, as well as products for middle-aged and older people. My products will also feature jewelry for casual occasions, as well as jewelry for more formal occasions. I expect to be able to conduct business with people from several income levels, from fairly low to more affluent.

D. Proposed Organization
Creative Designs is a sole-proprietorship business, owned by J. Tindall. I have the required licenses to conduct business by myself, and at this point I do not have the need for additional help. This keeps my costs down, and allows me to sell my product at the lowest price possible. If my business volume grows so that I need additional sales or manufacturing help, I will probably hire someone through a temporary agency; particularly, if I only need assistance for a short time due to seasonal demands for my products. Hiring an employee through such an agency will allow me to keep costs down, because I do not have to pay a lot of extra benefit fees.

I have chosen a bank for my business accounts. It is large enough to handle the money amounts that I have right now and big enough for expansion. However, the bank is also small enough that I expect to receive excellent, prompt service, and will probably be able to conduct business with one banker for all of my business needs, allowing him to have an understanding of the needs of my business. As my business grows, I also plan on hiring a private attorney or business accountant to help me plan and manage the financial and legal aspects of my business.

Creative Designs obtains raw materials and supplies from three main wholesalers: TSI Incorporated, Globe Union International, and the Taj Company. I have selected and ordered supplies from all three of these companies, and I am always able to get the least expensive basic supplies that I need to create my jewelry. Having three wholesalers is an advantage for my business, because I can order different stones from different companies and get the least expensive prices. Having three wholesalers also provides stability for my product lines. If one wholesaler goes out of business, I will still be able to obtain my materials from one of the other suppliers.

As my business grows, I plan on purchasing insurance to protect my inventory against burglary, fire, and floods, as well as postal and UPS delivery insurance.

Proposed Marketing/Promotion Plan

A. Proposed Product or Service
Creative Designs is a jewelry business specializing in semi-precious stones. Creative Designs will also design jewelry made out of clay and bone. My variety of styles and product should enable a customer to find a necklace, earrings, or a bracelet that they want, and will enjoy. If a customer cannot find what they want, I will custom design a piece of jewelry to their specifications.

I plan on using an Internet Web page "on-line catalog" to market and sell my products.

B. Proposed Pricing Policy
The goal of Creative Designs is to design and produce high-quality jewelry that can be sold at a very low and competitive price. When I price my jewelry, I mark up my supply costs in order to protect myself against fluctuating marketing prices. In addition to material mark-ups, I also charge for my time. Creative Designs will not only have a low competitive price, but will also have fast, courteous customer service. I will promptly answer questions, allow my customer to select the company that delivers their purchase from (UPS, Federal Express), and deal with any customer complaints.

As far as competing with other companies, I should almost always be able to undersell traditional "retail store" competition. There are not very many shops that specialize in, or even carry semi-precious stone necklaces. Local stores that do carry some semi-precious stone jewelry are The Bon Marche, J. C. Penney, Nordstrom, and Mervyns. I can undersell the prices of actual stores because of the difference in overhead costs. I will also have prompt service, and design custom orders, something larger retail stores cannot accomplish.

My biggest competition will be other businesses like mine that conduct their business on the Internet. I have identified approximately 100 small Internet jewelry businesses similar to mine. I have surveyed and compared their prices for similar jewelry products with the prices that I would be selling my product for and I have always found that my prices are less expensive. I have contacted some of these businesses, and most of them said that they did jewelry as a hobby or sideline to their normal job. Most of them would not design custom orders and did not have very much inventory, which forced their prices up beyond what I sell my jewelry for. However, I plan on keeping a close watch on the prices of my competitors to be certain that my products remain competitive, as well as watching for new competitors that enter the market.

C. Personal Promotion
As the "designer" of the jewelry for Creative Designs, I am responsible for making sure that the product line offers a good variety of designs and styles for all age groups. I am also directly involved with clients who desire custom designs or materials, as well as in all follow-up interactions for repairs or additional sales.

I plan on doing most of the work in designing and implementing my Internet Web pages. I will be preparing digital photographs of all of my designs, together with the related narrative product descriptions and marketing information. I plan on purchasing the essential "Web Page Shopping" software, and then customizing it for my products.

D. Non-personal Promotion
The primary non-personal promotion for this business is the Internet Web Site itself. I believe that this form of advertising and marketing exposure will be an inexpensive, and yet highly visible and effective promotional technique. I predict that electronic commerce on the Internet will be an enormous growth industry in the next few years. I will advertise in "Internet Malls", which provide a direct connection to my actual jewelry site. I will also list several "keywords" for my business, such as the names of different stones and types of jewelry (bone, clay, glass) in order to maximize the number of people that visit my site.

I also plan on producing a quarterly newsletter that I will send to my current customers through e-mail. I will advertise what Creative Designs is, what my Web site address is, and the types of jewelry that I carry. I will also run quarterly specials on certain items or sets. I anticipate some traditional advertising in some local newspapers as my business grows.

E. Place
Creative Designs will operate initially out of my home, using the Internet as the primary sales contact with my customers. As one of the fastest growing technological items in today's society, the Internet is a great way to meet millions of potential customers. Many customers are also beginning to buy gifts and products through the Internet. With its easy ordering and delivery to your front door, people don't have to worry about fighting the crowd at malls and other stores where they might buy the item. Having my business through the Internet has some other advantages. A significant advantage is that my "store" is open all day every day. This allows customers to look at my online catalog at any time that they wish to. I will also have substantial information about my product, so that people know what quality that they are getting. This allows anybody to learn more about semiprecious stones, without feeling awkward about asking someone a question.

I will also have a business phone in my home, where people can call me to ask questions, or talk to me about custom orders, or customer complaints. I will have an e-mail account so that anyone who doesn't want to talk to me in person can still communicate with me.

Part Three: Proposed Financing Plan

A. Projected Income/Cash Flow

Click here for Financial Statement

B. Projected Three Year Plan
In the next three years, I plan to develop Creative Designs into a well-known company that offers high quality jewelry at a low price, as well as excellent service. I will produce a quarterly newsletter that I will send out to my customers. As my business grows, I will probably need to hire employees in order to keep up with the increased orders. I plan for my orders to increase 20 percent every year for at least two years. In order to increase my orders, I will increase my Internet advertising and I will also start advertising in local and national newspapers, as well as on local radio programs. This will allow me to reach a greater clientele, which will in turn increase my sales. I will also eventually develop a printed catalog that I will send out to customers, which should increase my sales. Therefore, my advertising costs will increase and so will my net profit from sales, leaving me with an increasing profit projection as shown in my three-year profit plan:

Click here for three-year profit plan

C. Personal Internal Capital
So far, I have invested $3,500 in making jewelry as an "on the side" business. At this piont, I have approximately $500 cash left to invest in my business.

D. External Capital
Being able to obtain a loan would give Creative Designs a chance to really succeed. I believe that the chance of my business succeeding is extremely high, due to the fact that my business and Internet marketing plan is really so unique. Since my business will be primarily over the Internet, I will achieve two separate loans for my business; a $13,350 term loan, and a $7,000 line of credit. The term loan will cover all of the items that I buy, such as the computer, furniture, camera, and other necessary items. The line of credit would be primarily to buy the starting supplies that I need, and the ongoing monthly expenses such as phone lines.

E. Repayment Plan
I plan on repaying my term loan over a period of three years. This allows me to stay on a good monthly repayment plan, while it also enables me to put more money from sales back into the business so that the business can support itself. If sales allow me to, I will also repay the loan before the three-year deadline.

On a term loan of $13,350 at approximately a 12 percent interest rate (the going rate for a jewelry business) over a period of three years, I will be repaying the original loan of $13,350 plus $2,610 of interest, paying back a total of $15,960 over three years.

For repaying the line of credit, I will need less than a year. In fact, after six months, I will be able to stop using the line of credit and have it balanced at $0, unless I run into a problem. This will allow me to handle ongoing business expenses off the "profits", while still allowing me some breathing room if sales aren't as good one month as I thought they should be, or if my computer needs to be upgraded.

At the end of the first year, after repaying one year of my term loan and assuming that the balance of my line of credit is $0, my business will have a profit of $12,572.