Furniture Industry of Bangladesh: One of the Fastest Growing Sector
November 29, 2021
Updated On : May 28, 2023
Furniture is one of the essential products for our home or office use. Besides being a necessity for everyday usage, furniture is also used for decoration purposes. In many ways, furniture portrays the customer’s taste of aristocracy. With time changing and keeping pace with the evolving tastes and needs of the customers, the furniture industry of Bangladesh has developed. According to a report by The Business Standard, the revenue of the country’s furniture industry exceeds 10,000 crores every year. At present, along with meeting the demand of local customers, manufacturers are also exporting to other countries, which has created new possibilities in Bangladesh’s export trade. With the increase in furniture exports of Bangladesh, domestic brands are also expanding their activities abroad. In this article, we will shed light on the history and emergence of Bangladesh’s furniture business.
Furniture Industry Overview
In the Indian subcontinent, the furniture industry has a long history and tradition. Prior to independence, several small traditional furniture businesses were operating in Bangladesh, but most of the big furniture brands have been operating in the country since independence. As demand increased in the early ‘90s, the industry transformed into a mass-production-oriented industry and gradually became one of the major economic contributors in the country. The country’s furniture exports began in the mid-1990s.
The furniture sector in Bangladesh can be divided into two types; organized and unorganized. These two types can also be called branded and non-branded. However, non-branded or unorganized industries are dominating 65% of the country’s furniture market. Based on brand value, brands can be further subdivided into three levels. According to Databd, brands like Hatil , Otobi, Navana, and Akhtar Furnitures are known as high-end brands. And, brands like Partex and Brothers Furniture are known as mid-tier brands, and Legacy and Homes Furniture are known as low-end brands.
Founded in 1975, Otobi Furniture was once the market leader of the furniture industry in our country. The company started exporting in the mid-90s. However, in the last few years, the company has lost its position due to several reasons, including wrong business strategy. According to TBS, Otobi currently holds 5% of the market share. On the other hand, Akhtar Furnishers, established in 1976, is currently occupying the second position. Starting their journey as Hatil Doors in 1989 at Badda, Dhaka. Hatil Furniture has now become the market leader with a 10 percent market share. Partex, meanwhile, began its journey in 1962, but they only produced particle boards. Later in 1999, they started manufacturing furniture. Navana Furniture, another giant in the country’s furniture industry, started its operations in 2002 and now holds a market share of 5%.
In the last 50 years, more than 100 medium and large furniture factories have been set up in the country. Among the types of furniture produced in the country are solid wood furniture, processed wood furniture, metal furniture, cane furniture, etc. According to a report by The Business Standard, 93% of manufactured furniture is sold in the local market. At present, more than 2.5 million workers are employed in the furniture industry. The Bangladesh government has declared the furniture industry as a “thrust sector.” The thrust sector generally refers to those industries or sub-sectors that significantly contribute to a country’s GDP growth, create employment opportunities, and export income growth.
Besides, in the 2015-2018 export policy, the furniture industry of Bangladesh has been included among the top priority sectors. According to a January 2020 article of The Business Standard, Bangladeshi furniture is exported to the United States, Canada, Australia, the United Kingdom, some countries of the Middle East, and Europe. India and some other countries in South Asia are also included in this list. Although the export target for the fiscal year 2019-2020 was 90 million, the total amount was 76.41 million, which was more than 2 percent (2.03%) of the previous year.
According to Statista 2019 data, China is the world’s largest furniture exporter. In 2019, China’s total furniture exports amounted to about 63.78 billion dollars. On the other hand, Poland and Germany were in 2nd and 3rd place with about 13.17 billion and 13.11 billion dollars respectively. According to Statista data, the market value of the worldwide furniture industry in 2020 was about 509.8 billion. The market is expected to reach 650.7 billion by 2026.
The Bangladesh Furniture Export Association and the Bangladesh Furniture Industries Owners Association ( BFIOA ) are constantly working on the potential and growth of the country’s furniture industry. According to a January 2020 report by Business Standard, Bangladesh’s furniture industry was growing at an annual rate of 18 to 20 percent.
However, the covid-19 epidemic has had a significant impact on the furniture manufacturers in Bangladesh. Especially the small and non branded markets were more affected. According to a report from The Financial Express in September 2020, almost 600,000 workers lost their jobs in the furniture sector due to the epidemic. This number was expected to increase further by the end of the year. However, now that the situation has become normal, the industry is turning around a lot.
Automation in production.
Reviewing the current state of the furniture industry in Bangladesh, several trends can be noticed. Presently, Robotics and automation are now becoming more popular in factory production. According to The Independent BD, Hatil Furniture added automatic machinery and automated robotics systems to their factory in Savar and has invested over 200 crore BDT in renovating their factory.
Rise of E-commerce and Online-based Furniture Sales
With the increase in e-commerce and f-commerce platforms, online sales of furniture have also increased. According to the popular e-commerce platform Daraz’s statistics , among their top ten best-selling products in 2020, two were furniture products.
Some online based furniture shops have recently gained popularity. One of which is ISHO. Launched in 2017, ISHO mainly manufactures trendy and modern furniture targeting the young generation. In this context, furniture brands like Hatil are also trying to enrich their shopping experience by using e-commerce platforms, virtual showrooms, smartphone apps, and Augmented Reality for their customers.
Minimalistic, Convertible and Knock-down Furniture Concept
Presently, many customers are turning to simple and minimalist furniture instead of traditional ornamental designs. Although the trend of minimal furniture has been prevalent globally for a long time now, its market is still in a growing stage in Bangladesh. Inspired by IKEA, Otobi Furniture was the first in Bangladesh to introduce a simple design of minimalistic particle board furniture. However, at that time, customers preferred furniture made of solid wood over boards. Currently, ISHO and several other companies are offering minimalistic furniture, and the popularity of this type of furniture is increasing gradually. At the same time, convertible furniture is currently gaining popularity for its multi-purpose and space-saving features.
The Demand of Steel Furniture is Decreasing.
At one time, steel cupboards, file cabinets, steel racks, show-cases, chairs, tables, etc., made of steel furniture were in high demand in Bangladesh. However, in recent times the steel furniture market has fallen. According to the English Road Steel Furniture Multipurpose Cooperative Society, there are about 70 to 80 thousand steel furniture manufacturers in the country. The total investment in this industry is about 10 thousand crore BDT. But as the demand continues to decline, various corporations in this industry are slowly closing down. As a result, about 60% of the industry’s 3 million employees have already lost their jobs.
The Reason Behind the Growth
After the RMG sector in Bangladesh , the furniture industry is one of the major contributors to the country’s employment. It also contributes to the country’s GDP, exports. And there are several notable reasons behind this.
Low Labour Costs & Woodworking Skills
Low-cost labor is one of the vital reason behind any major industrial growth in Bangladesh. The furniture industry is no exception, where the opportunity to hire skilled workers at lower wages is taking the industry further. Also, the woodworker’s exceptional woodworking skills are helping to bring aesthetic products to the market.
Increase in Export
One of the major reasons behind the rapid growth of the country’s furniture industry is the increasing demand of Bangladeshi manufactured furniture in the foreign market. The main reason for this is its diverse and international standard product line. According to the Export Promotion Bureau, Bangladesh’s furniture exports have increased by about 267% in the last decade. In the fiscal year 2011-2012, the country’s furniture exports amounted to 27.14 million USD, which increased to 76.41 million in Fiscal Year 2019-2020.
Rising Demand in Corporate Sector
Another major reason behind the rapid growth of the country’s furniture industry is the increase in the demand for furniture in the corporate sector. According to various stakeholders in the last 20 years, the country has witnessed tremendous growth in the corporate sector and with it the demand for office furniture has also increased. According to a 2019 report by DataBD, 70% of the furniture produced in the country is home furniture and the remaining 30% is office furniture.
Growing Consumer’s Spending Capacity
Currently, with the rising of the country’s GDP, the consumer’s spending capacity has also increased. According to the Household Income and Expenditure Survey of the Bangladesh Bureau of Statistics, the per capita monthly income of the country in 2005 was Tk. 7,203, which increased to Tk 11479 in 2010 and to tk 15988 in 2016 respectively. Which means, per household monthly income has more than doubled (* 2.22) in a decade.
In addition, the amount of Expenditure per household in 2005 was tk 6134, but by 2016 it has increased to tk 15715. Furniture sales, like many other things, have grown as a result of the improved quality of living.
Challenges to Overcome
Although the furniture industry is growing fast, there are still many challenges to overcome.
Dependency on Imported Raw Materials
Because Bangladesh lacked the required amount of forest land, cutting of trees in some protected forest regions was banned in 1990. According to a report by The Business Standard , among the 14 million hectares of total land area, currently, 1.2 million hectares is protected forest land. Other than that, due to the scarcity of other sources, it is not possible to supply sufficient raw materials from the country. As a result, an average of 60% of the raw materials currently used in the furniture sector are imported from other countries. In addition, Myanmar, one of the major timber import sources of Bangladesh, banned timber exports in 2014. The banning of timber export had a huge impact on the country’s furniture industry.
Scarcity of Technical Skilled Manpower
Most of the factories in Bangladesh, being in the unorganized sector, have more traditional work. As most of the furniture factories in Bangladesh belong to the unorganized sector, there is still a lot of traditional and manual work in the factories. In this context, the lack of technically skilled workers in the country is tied to modern equipment management and innovation.
Lack of Government Incentives
The lack of proper government incentives for various developments in the furniture industry is also creating challenges for the industry. According to industry leaders, the furniture industry is likely to reach the level of ready-made garments if an adequate supply of raw materials and government subsidies are available. In addition, government incentives are also important to promote locally produced artificial wood products.
Excessive Business Operation Costs
Excessive cost is another big challenge for this industry in conducting business in Bangladesh. Poor port infrastructure, poor internal transportation etc, are increasing the overall cost a lot. Also, the additional cost of cross-border trading has become an issue for import-export.
While some people prefer minimalistic branded furniture, a large customer base still feels more comfortable using non-branded, traditional, heavily designed furniture. Some customers make furniture locally by copying designs from popular brands. Which, in turn, serves as a drawback for branded furniture companies.
Future Opportunities and Suggestions
Huge Export Market
As a result of global industrialization, the demand for home furniture as well as office furniture in the foreign market is constantly increasing. According to DataBD, there is a huge market for office furniture in various countries, including the United States and Japan, along with all the other major countries. Bangladeshi manufacturers can utilize this opportunity to capture the global market for office furniture. At present, Hatil Furniture has 15 showrooms in India and 2 in Bhutan. However, since wooden furniture is not environmentally friendly, it faces a lot of criticism in the global market. Therefore, while manufacturing furniture, particleboards made from unused wood powder and bark are being used in different combinations rather than direct wood. As well as being environmentally friendly, such boards are quite cost-effective, making the price of the product quite reasonable. Also, this type of furniture is very easy to transport due to its lightweight. At present, companies like Hatil, Akhtar, and Akij in Bangladesh have factories for making in-house particle board furniture. As a result, there is an opportunity to export particle board as well as furniture in the future.
Quality up-gradation and Positive Branding
It is necessary to upgrade Product quality to fight global competition and attract international buyers, investors. Bangladeshi brands can further promote their diversified product line internationally through proper branding.
Although there are many skilled laborers in the furniture industry of Bangladesh, the use of automated technology machinery in furniture manufacturing is increasing. For this, technical training facilities should be extended to enhance the technical skills of the existing and upcoming workers. Ideas like equipment management, high-quality products, and global standard designing can be easily implemented when an efficient workforce is available.
Solidifying Backward Linkage
Reliance on imported raw materials of Bangladesh’s furniture industry is a major issue in the growth of the industry. According to the Export Promotion Bureau, furniture export earnings declined by 8.5 percent in 2014 after Myanmar imposed a ban on timber exports. To avoid such problems, the government should work with private companies to import raw materials at competitive prices with neighboring countries for nail, varnish, and other material sourcing to strengthen the backward linkages.
Provide Stimulus to the Steel Furniture Industry
According to a report by Allied Market Research , the market size of the world’s metal furniture industry reached 141 billion dollars in 2020 and is expected to increase to 191 billion dollars by 2026. Despite the declining demand for steel furniture in Bangladesh, this market is growing globally, and there is a lot of potential for export for the country’s steel furniture manufacturers. To export steel furniture to the international market, the government should provide stimulation to Bangladeshi manufacturers and create a favorable environment for export.
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How to Start a Furniture Business in Bangladesh
Start a Furniture Business in Bangladesh
If you’re a furniture designer and wanting to your own designs then you should consider knowing how to start your own custom furniture business in Bangladesh. Whether you have a degree in furniture design and manufacturing or have taught yourself how to design and manufacture unique pieces doesn’t matter.
Also, you have the foundation for starting your own custom design furniture business if you have a good eye for what customers want and can tailor your designs to their needs.
Moreover, you’ll also need to know how to manage a business in order to make your start-up profitable being a skilled furniture designer and manufacturer. Besides, selling furniture is a lucrative business not only in Bangladesh but also worldwide as we know. This is because there is furniture in every home or business.
Why Start a Furniture Business in Bangladesh
The first reason is Bangladeshi people like to furniture much, especially the wooden furniture. They like to decorate their house with various types of furniture from their cots to dressing tables and dining table. That’s why there are so many furniture shops already running across the country.
You can have your own successful custom design furniture business as long as you have the eye for what customers want irrespective of the fact whether you own a degree in furniture design or manufacturing. Also, the demands of furniture are getting increased as the growing economy and people are making more residents.
Moreover, the builders are also making more houses for the purpose of selling where there are great demands for furniture. These all imply that it’s the better time to start a furniture business in Bangladesh rather than any previous time.
Steps to Start a Furniture Business in Bangladesh
As the customers with modest incomes are expected to make half of the metro population, the furniture business in Bangladesh is growing and is expected to grow more and mere.
Although this article right here will throw light not only on how one can start his/her own furniture business, it will also provide important tips on how to manage the business to make it profitable.
Well, let’s get an in-depth sample furniture in-depth sample furniture making business steps. Therefore put on your entrepreneurial hat so that you can get proceed.
First Step: Business Plan
A business plan should be created by every entrepreneur. A business plan provides a roadmap to success aside from committing your ideas and plans to write. There are many things that can be planned which can make a new furniture business run smoothly while it’s impossible to plan for some eventualities, hiccups happen, and things can end up costing.
And many companies struggle with their finances in those first few years and can find it extremely stressful as a new business just starting out. If you do a thorough and well-researched business plan, it will help you manage cash flow successfully in the early stages. That’s why you should have a good business plan for your furniture business in Bangladesh and that will include:
- Marketing strategies
- Develop financial projections
- Define your organizational structure
- Business processes
- Potential challenges and their solutions
- Market research and many more
Second Step: Business Location
Location is incredibly important as with almost any business when you’re intending to open a physical store. And choosing a store location based only on the cheapest rent is a common mistake. As an alternative, choose the best location that you can afford where you can showcase your furniture and can conveniently accommodate your customers. You’ll only need a warehouse location if you choose an online business.
However, you’ll need a location in a commercial and high traffic area if you want a storefront and showroom. Keep in mind that if people won’t ever drive by it then a fantastic furniture showroom would be a waste. Also, it’s considerable that whether space is large enough for them to easily pick up and drop off small and large items. Some other things that should consider strongly below:
- Traffic quantity the location
- Transport costs
- Transport facility
- Labor cost and availability
- The premises space etc
Third Step: Find Your Niche
You need to narrow down your initial inventory to have a good shot at success. Furniture is considered a basic item that everyone needs to buy whether you cater to the residential market only or the commercial market. So, essentially decide what kind of furniture and accessories you want to sell.
You should be dictated by your own tastes and interests. On the other hand, its field is not fulfilled by other furniture stores; you can fill the need in your area. And while creating a strong furniture business of your own requires, you’ll find a lot of high street competitors out there. These are some points that you should decide about your niche:
- Identify the exact kind of furniture
- Indicate the style of furniture
- Describe the types of materials
- Selling office or commercial furniture
- Specializing in high-end home furniture or other etc
Related Article: Start a Wooden Door Making Business in Bangladesh
Fourth Step: Marketing Strategies
You should be focusing on reaching out to local bloggers and media in your area to gain interest for your company, as well as making sure you fully optimize local SEO as a new furniture business. Also, simply by accessing social media channels such as Facebook, Instagram, and Twitter, or by appearing at local craft fairs and events, you can do these.
They still have a way to contact you for a commission at a later date if people do not want to commit to a piece of furniture straight away. That’s why it’s important to make sure you have business cards handy.
Fifth Step: Business Expenses
Before starting your furniture business in Bangladesh, you should forecast your start-up expenses. And it’s crucial to making your business successful by making an accurate budget of your business. So, if you want to make it easier to communicate with banks and investors then precisely itemizing your start-up expenses.
Moreover, in the first year of your business, it helps you to correctly forecast your profitability. That’s why it’s essential to estimate your business expenses at least for one year.
Some Other Steps to Follow to Start a Furniture Business in Bangladesh
- Consider an excellent online presence
- Get legal entities
- Learn more about the furniture industry
- Identify your target market
- Register as a business
- Obtain licenses and permits
- Find funding sources
- Equip your shop
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Global Furniture Business From Bangladesh
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Home Décor - Bangladesh
- Revenue in the Home Décor market amounts to US$354.40m in 2023. The market is expected to grow annually by 8.49% (CAGR 2023-2028).
- In global comparison, most revenue is generated in the United States (US$32,320.00m in 2023).
- In relation to total population figures, per person revenues of US$2.23 are generated in 2023.
Key regions: Germany , Brazil , United Kingdom , India , Canada
The Home Decor segment includes a variety of accessories and furnishings used to make a space more aesthetically appealing. Items in this segment can be found in virtually every room within the home and are typically used to showcase one’s unique style and creativity.
The Home Decor segment is divided into four subsegments:
- The Decorations subsegment refers to a variety of decorative items that are used to enhance the aesthetics of indoor spaces, such as wall art, decorative objects, vases, and sculptures
- The Carpets & Rugs subsegment refers to products designed to cover and enhance the flooring of indoor spaces. These products range from large area rugs to small accent rugs, and are available in a variety of materials, colors, patterns, and textures, providing both functional and aesthetic value to the space.
- The Candles subsegment covers decorative and aromatic wax-based products that are commonly used to provide mood lighting and fragrance to indoor spaces.
- The Curtains & Blinds subsegment includes products designed to cover windows and regulate the amount of light that enters a room. This segment encompasses a wide range of styles and materials, from traditional drapes and blinds to modern shades and screens.
The Home Decor segment consists of revenue and average revenue per capita data. Per capita figures consider the whole population. This segment includes only business to consumer (B2C) sales. Business to business (B2B) sales (e. g., furniture for coffee shops, offices, etc.) are excluded in the figures shown. For more information on the displayed data, click the info button on the right-hand side of each box. In terms of key players in the furniture market, IKEA is the leading furniture company; however, with the rise of eCommerce, players such as Wayfair are gaining ground.
- Carpets & Rugs
- Decorative Accessories
- Flameless & Floating Candles
- Shower Curtains
- Smart Blinds
- Seats & Sofas
- Cabinets, TV Stands & Side Tables
- Closets, Nightstands & Dressers
- Dining Tables, Kitchen Islands & Pantries
- Outdoor Furniture
- Desks & Chairs
- Bookcases & Filing Cabinets
- Table & Floor Lamps
- Ceiling Lights & Chandeliers
- Light Bulbs & Fittings
- Curtains & Blinds
- Carpets & Rugs
- Analyst Opinion
In 2021, the Furniture market continued to experience significant growth, which can, in large part, be attributed to COVID-19 restrictions that required many people to stay home. This was reflected in their buying behavior: As people began to make their living and home office more comfortable, furniture sales increased.
In 2022, we expect the easing COVID-19 restrictions, rising inflation, and increasing energy prices to put downward pressure on the growth of the Furniture market. However, we are moderately optimistic that these roadblocks will not significantly impede the market’s growth. One area that we foresee contributing to its long-term growth is the millions of millennials who are preparing to buy their first home in the next three to five years. In order to capitalize on this powerful market driver, retailers should pay close attention to the buying behaviors of millennial consumers and make the necessary adjustments to capture market share.
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Furniture Business Plan Template
Do you want to start furniture business?
Are you planning to start a furniture business ? Well the furniture manufacturing industry requires a lot of capital, manpower and related knowledge but the rate of return you get after investing in this business is simply worth the efforts. The biggest advantage in starting this business is that furniture is one of the basic necessities of people hence it is a widespread market which keeps blooming throughout the year. And many outclass people also don’t mind to change or update their furniture every now and then. The first thing before starting any business is to write a comprehensive business plan which establishes the basis of your company’s future operations and decisions, in this will help business consultants . It also provides detailed guidelines about everything you will be doing in the next few years. If you are wondering how to write an effective business plan then here we are providing you the business plan of a furniture startup named ‘The Wood House’.
2.1 the business.
The Wood House will be an American furniture manufacturing company located at the outskirts of Wesley Chapel, a village in Caldwell County of North Carolina. The company will be licensed to buy wood from the authorized wood suppliers from the Croatan National Forest, North Carolina and hence we are strategically located at the best available site for a furniture production factory. The business will be owned and operated by Rick Doug. Rick did his Bachelors in Industrial Engineering from the University of Michigan. After his studies he worked in several furniture companies in the US and has been serving as the director operations at IKEA-US for the last 5 years.
The Wood House will be primarily a supreme-class furniture producer. Rick has already acquired license to procure Beech, Oak and Mahogany wood from the Croatan National Forest and some other sources. The company will be initially launched as a small business furniture mainly operating in two units, a major production facility in Wesley Chapel and a small company office in Charlotte, North Carolina which will be overseeing the distribution of products. Other than these two main units, the Wood House will also open three display centers located in Washington, Chicago and Houston.
The company aims to serve the residential and commercial zones of the cities containing its outlets along with exporting its products to other major cities as well.
2.4 Target of the Company
The company aims to provide latest and innovative supreme-class furniture to its customers. Rick’s target is to become one of the leading furniture manufacturers of the US within next ten years of the launch.
3.1 company owner.
The Wood House will be owned and operated by Rick Doug who has been in furniture industry for the last 20 years. Rick has been planning this startup for the last couple of years and, thus, has all resources including the right knowledge for starting a furniture company .
3.2 Why the Business is being started
Rick has always wanted to bring innovations in the traditional furniture products being used everywhere. He had some amazing innovative ideas in his mind which could not be applied by working in some other company, though holding an executive position. That’s why Rick had been planning his own business for the last couple of years. He aims to revolutionize the world of furniture by introducing foldable compact furniture products to minimize their space usage in homes.
3.3 How the Business will be started
Rick has planned everything about his business. He hired professional experts from various fields to help him craft a detailed map about his business. The financial experts have forecasted following costs for expenses, assets, investment, and loans for the Start-up.
The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, is given below:
Services for customers
The Wood House will be manufacturing following supreme-class furniture products for its customers:
- Single and double beds
- Sofas and luxury wooden chairs
- Study and dining tables
- Drawers and chests
- Desks and office chairs
- Bookcases and cabinets
Rick has started the furniture business to introduce space-efficient foldable furniture products for minimizing space usage along with the commercial production of usual furniture products. The company will also offer repair and maintenance services like polishing and glazing of old furniture.
Marketing Analysis of furniture business
The most important part in developing an effective furniture business plan sample is its marketing analysis that’s why Rick hired the services of marketing experts to help him develop a good furniture business plan . He also went through various plans before making his own plan of starting furniture business .
5.1 Marketing Segmentation
The Wood House’s target customers vary from individual buyers to multinational retail stores. We have identified following type of target audience which can become the future customers of our products.
The detailed marketing segmentation of our target audience is as follows:
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5.1.1 Individual Buyers:
The Wood House will open three display centers, initially, in the first year of its startup in Washington, Chicago and Houston. The purpose of these showrooms is to attract individual buyers residing in these areas. All of these cities are well established and comprise of well-off people that’s why they can easily buy our products. We have specifically design luxurious products to target this wealthy community. These individual buyers are expected to buy the biggest portion of our projects.
We will directly supply our furniture products mainly chair, cabinets, and desks to various educational institutions along with courts, churches, hospitals, municipal authorities and other institutions located in our three targeted cities.
5.1.3 Departmental Stores:
The wood House will also supply its products to various departmental stores and mega malls located in the major cities of America. These departmental stores will also display our products along with the products of various competitors and will be our second-biggest consumer after the individual buyers.
We will supply office furniture to various companies, offices, and businesses based in our three target cities especially Washington.
5.1.5 Maintenance Services:
We will offer repair and maintenance services like polishing and glazing of old furniture to our various customers. For this purpose we will allocate a special staff in our display centers located in targeted cities. The detailed market analysis of our potential customers is given in the following table:
5.2 Business Target
We aim to revolutionize the traditional designs of furniture products by introducing foldable compact furniture concept. Our target is to become one of the leading furniture producing companies of America within next 10 years by providing highest-quality wooden products within affordable prices. At our company, we will provide a top-notch customer service. Our every employee and salesperson will treat our customers with utmost respect so as to build a long-lasting relationship with them.
5.3 Product Pricing
Setting the prices of products is the most challenging part of any startup because it is very difficult to achieve the MARR (minimum attractive rate of return) while also attracting the customers towards it. Considering all restraints and aspects, we have priced our products in the similar ranges as of our competitors except the compact furniture which include foldable desks, tables, and chairs. These products are slightly expensive because they cost more to produce.
Rick carried out an extensive research and also hired financial experts to help him develop an effective sales strategy for the company. Although he knew how to start a furniture business yet he took help of experts from various fields so as to make this venture successful. The sales strategy of The Wood House developed by our experts is as follows:
6.1 Competitive Analysis:
We have a really tough competition ahead of us because there are hundreds of other established furniture companies in the United States. That’s why Rick has thought through everything to make his company stand out among others. Although we will produce supreme-quality furniture with latest design but our main competitive edge is our concept of space-efficient foldable furniture, designed to fit in the limited space available in compact American homes. We believe that if marketed properly this concept can revolutionize the world of furniture and give us unparalleled superiority in this business.
6.2 Sales Strategy
We will introduce our startup to our target customers and stake holders by sending brochures and introductory letters about us. We will carry out a large-scale social media campaign for our advertisement. We will offer discounts and gifts on our products present in several retail stores to encourage sales.
6.3 Sales Forecast
We believe that people will use our products for the rest of their lives, if they try them even for one. Considering the market demand and the quality of our products, our sales pattern is expected to increase with years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on yearly basis which are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following table:
Rick hired a Human Resource Manager for helping him develop a personnel plan for starting a furniture making business . He developed the following personnel plan for the staff needed for the company along with their average salaries with the help of experts.
7.1 Company Staff
Rick will act as the Chief Operating Officer of the company. The company will initially hire following people:
- 1 General Manager to manage the operations in the production unit.
- 2 Administrators / Accountants to maintain financial records.
- 2 Engineers responsible for operating and maintaining production unit.
- 4 Sales and Marketing Executives responsible for delivering products to retailers and discover new ventures.
- 3 Mangers to operate display centers.
- 30 Field Employees for operating the production unit and display centers.
- 10 Drivers to transport furniture to display centers, departmental stores, institutions and companies.
- 1 Front Desk Officer to act as a receptionist in the company Charlotte office.
To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.
7.2 Average Salary of Employees
The following table shows the forecasted data about employees and their salaries for next three years.
Rick has developed the following financial plan for starting a custom furniture business with the help of financial experts. The plan outlines the financial development of The Wood House over the next three years. Rick had been saving up for this business for the last couple of years. That’s why the company will be solely financed by him and he will also control the direction of business to make sure that it is expanding at the forecasted rate. No equity funding or outside loan will be required unless the company expands faster than forecasted.
8.1 Important Assumptions
The company’s financial projections are forecasted on the basis of following assumptions. These assumptions are quite conservative and are also expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.
8.2 Brake-even Analysis
The following graph shows the company’s Brake-even Analysis.
The following table shows the company’s Brake-even Analysis.
8.3 Projected Profit and Losss
The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
The following table shows detailed information about profit and loss, and total cost of sales.
8.4 Projected Cash Flow
The following column diagram shows the projected cash flow.
The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.
8.5 Projected Balance Sheet
The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.
8.6 Business Ratios
The following table shows data about business ratios, ratio analysis, total assets, net worth.
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Wagner boss Yevgeny Prigozhin listed in Russian plane crash with no survivors
- Plane crashes north of Moscow
- Wagner's Prigozhin on board and no survivors - authorities
- Telegram channel linked to Wagner says Prigozhin dead
- He led mutiny against army top brass in June
MOSCOW, Aug 24 (Reuters) - Russia's most powerful mercenary Yevgeny Prigozhin was on board a plane which crashed on Wednesday evening north of Moscow with no survivors, the Russian authorities said, two months to the day after he led an abortive mutiny against the army top brass.
There was no official comment from the Kremlin or the Defence Ministry on the fate of Prigozhin, head of the Wagner mercenary group and a self-declared enemy of the army's leadership over what he argued was its incompetent prosecution of Russia's war in Ukraine.
A Telegram channel linked to Wagner, Grey Zone, pronounced him dead, however, and hailed him as a hero and a patriot who it said had died at the hands of unidentified people it called "traitors to Russia."
A Reuters reporter at the crash site at first light on Thursday morning saw men stretchering black body bags. Part of the plane's tail and other fragments lay on the ground near a wooded area where forensic investigators had erected a tent. Mourners left flowers and lit candles near Wagner's offices in St Petersburg early on Thursday.
Amid fevered speculation and an absence of verifiable facts, some of his supporters have pointed the finger of blame at the Russian state, others at Ukraine which was due to mark its Independence Day on Thursday.
Whoever or whatever was behind the crash, his death would rid Putin of someone who had mounted the most serious challenge to the Russian leader's authority since he came to power in 1999.
Others who have opposed President Vladimir Putin or his interests have also died under unclear circumstances or come close to death, including outspoken political leaders and journalists. The Kremlin has always denied any state involvement in such incidents.
Prigozhin's death would also leave the Wagner Group, which incurred Putin's wrath in June by staging an abortive armed mutiny against the army's top brass, leaderless and raise questions about its future operations in Africa and elsewhere.
The Brazilian Embraer (EMBR3.SA) Legacy 600 model of executive jet that crashed has only recorded one accident in over 20 years of service, according to website International Aviation HQ, and it was not due to mechanical failure.
Embraer said it has complied with international sanctions imposed on Russia and had not provided maintenance for the aircraft since 2019.
The plane showed no sign of a problem until a precipitous drop in its final 30 seconds, according to flight-tracking data.
WAGNER CO-FOUNDER ALSO ON PLANE
Rosaviatsia, Russia's aviation agency, published the names of all 10 people on board the downed plane, including Prigozhin and that of Dmitry Utkin, his right-hand man who helped found the mercenary group and bore the call sign "Wagner".
Russian investigators said they had opened a criminal investigation. Some unnamed sources told Russian media they believed the plane had been shot down by one or more surface-to-air missiles. Reuters could not confirm that.
The aircraft, which had been travelling from Moscow to St. Petersburg, crashed near the village of Kuzhenkino in the Tver Region, Russia's emergency situations ministry said.
Abbas Gallyamov, a former Putin speech writer turned critic whom the Russian authorities have branded a "foreign agent", suggested, without evidence, that the Russian leader, who is expected to run for another term in office next year, was behind the crash and had strengthened his authority in the process.
Wagner mercenary chief Yevgeny Prigozhin leaves the headquarters of the Southern Military District amid the group's pullout from the city of Rostov-on-Don, Russia, June 24, 2023. REUTERS/Alexander Ermochenko/File Photo Acquire Licensing Rights
"The establishment is now convinced that it will not be possible to oppose Putin," Gallyamov wrote on Telegram. "Putin is strong enough and capable of revenge."
Bill Browder, a businessman with years of experience in Russia and another Kremlin critic, agreed.
"Putin never forgives and never forgets. He looked like a humiliated weakling with Prigozhin running around without a care in the world (after the mutiny). This will cement his authority," Browder wrote on X, formerly known as Twitter.
On a visit to California, U.S. President Joe Biden told reporters he did not know what had happened .
"But I’m not surprised," Biden said. "There is not much that happens in Russia that Putin is not behind."
SECOND PLANE LINKED TO PRIGOZHIN
Flightradar24 online tracker showed that the Embraer plane (registration number RA-02795) carrying Prigozhin had dropped off the radar at 6:11 p.m. (1511 GMT). An unverified video clip posted to social media showed a plane resembling a private jet falling out of the sky.
Another unverified clip showed the burning wreckage of the plane on the ground. Rescuers had recovered all 10 bodies or what was left of them from the scene, Russian news agencies reported.
Soon after the plane crashed, a second private jet thought linked to Prigozhin which also appeared to be heading to St. Petersburg, Prigozhin's home base, turned back to Moscow, flight tracking data showed, and later landed.
Prigozhin, 62, spearheaded the mutiny against Russia's top army brass on June 23-24 which Putin said could have tipped Russia into civil war. Wagner fighters shot down Russian attack helicopters during the revolt, killing an unconfirmed number of pilots, infuriating the military.
He had also spent months criticising Russia's war in Ukraine, something Moscow calls a "special military operation", and had tried to topple Defence Minister Sergei Shoigu and Valery Gerasimov, the chief of the General Staff.
Many Russians had wondered how he was able to get away with such brazen criticism without consequence.
The mutiny was ended by an apparent Kremlin deal which saw Prigozhin agree to relocate to neighbouring Belarus. But in practice he had appeared to move freely inside Russia after the agreement which had reportedly guaranteed his personal safety.
Prigozhin posted a video address on Monday which he suggested was made in Africa. He turned up at a Russia-Africa summit in St Petersburg in July.
Unconfirmed Russian media reports said that Prigozhin and his associates had attended a meeting on Wednesday with officials from the Russian Defence Ministry. Reuters could not confirm that.
Reporting by Andrew Osborn, Max Rodionov, Mark Trevelyan; Writing by Andrew Osborn; Editing by Grant McCool and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
As Russia Chief Political Correspondent, and former Moscow bureau chief, Andrew helps lead coverage of the world's largest country, whose political, economic and social transformation under President Vladimir Putin he has reported on for much of the last two decades, along with its growing confrontation with the West and wars in Georgia and Ukraine. Andrew was part of a Wall Street Journal reporting team short-listed for a Pulitzer Prize for international reporting. He has also reported from Moscow for two British newspapers, The Telegraph and The Independent.
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