Industree Bplan New

8/12/2019 Industree Bplan New

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industree craftsbusiness plan


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IndusTree Crafts Business Plan

CONTENTS

1. Executive Summary 1

2. Organization Overview 2

2.1 Vision 2

2.2 Mission 2

2.3 Core Values 2

3. Target Markets 3

3.1 The Retail Customer 3

3.2 The Beneficiary 4

4. Institutional Assessment & Strategic Environment 54.1 SWOT Analysis 5

5. Business Model 9

5.1 Retail Company 9

5.2 Production Company 105.3 IndusTree Crafts Foundation 11

5.4 Revenue Fish Bone 11

5.5 Expense Fish Bone 12

5.6 Value Proposition 12

5.7 Objects of Scaling 12

6. Detailed BusinessPlan for Retail CompanyIndusTree Crafts Pvt. Ltd/Mother Earth 13

6.1 Marketing Plan 13

6.2 Operational Plan 13

6.3 Human Resource Plan 15

6.4 Financial Plan 16

7. Detailed Business Plan of production company - IndustreeTransform 17




7.4 Financial Plan 22

8. Detailed business plan of Industree Crafts Foundation Non profit 23

8.1 Executive Summary 23




8.5 Finance Plan 26

Annexure I List of producer groups

Annexure I - Case Study on IndusTree Crafts prepared by International Trade Centre, Geneva

Annexure II - CVs of Gita Ram, Neelam Chhiber, Raminder Singh Reikhi, Arun Raste


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IndusTree Crafts Business Plan Page 1 of 26

CHAPTER - 1

EXECUTIVE SUMMARY

For thousands of artisans and farmers in India with low incomes and partial employment,

Industree provides market opportunities, backed by design inputs, skill and organizationaltraining to enable artisans to work in groups, producing products saleable in urban and globalmarkets. This brings much needed livelihood opportunities, increasing income, enabling them toraise their nutrition and childrens education standards. This is achieved not by a top down, but bya bottom up approach, wherein they are encouraged to invest their savings in and become ownersof their production units, in ways which increase productivity and profits for them.

Rural artisanal and local economy, value addition skills are significant as rural income providersin India. India is estimated to have anything between 6 million to 40 million artisans. Thisincludes what has so far been called the handicraft and handloom sector. The prospectivenumbers involved in value added organic food in India, would increase these estimationsconsiderably. Industrees focus will be on raising the level of rural involvement in modern Indianorganized retail which is growing at a scorching pace. The value-added production that ruralIndia provides to this organised sector will currently be a small percentage, of the total volumeand will mostly be in the sector of food. India is witnessing an unprecedented domestic retailboom, with expansion in home, food and apparel markets, being tapped by mostly importedgoods in furniture and home, and easily accessible urban producers with larger productionsystems in place. These production units are built on a rural workforce which migrates to urbancenters. This indicates a huge market opportunity for the millions of under compensatedhandloom weavers, handicraft artisans, and poor farmers who represent a large traditionallyskilled rural workforce, which is unorganized and unadapted, suffering from poor productioninfrastructure, access to working capital, and contemporary entrepreneurial skills.

As a company Industree hopes to set benchmarks for sharing urban prosperity with rural Indiathrough mainstream business. It visualizes a large opportunity in linking micro finance with thedevelopment of these producers into production units, which when provided with appropriatemarkets, designs, production infrastructure and appropriate management tools, can help bridgethe urban rural divide. Urban Indian economy is growing in double digits while the ruralagricultural economy lags behind in the lower single digit. India has the largest number of poorpeople in the world. Industrees approach, as differentiated from a typical micro financeapproach, is that individuals in a group save, towards a group livelihood activity. Ruralproduction can come of age, if it moves towards group enterprise, wherein a group ofartisans/farmers or a collection of groups come together, pool theirs savings into working capitaland towards overhead expenditure, such as rental of a common work shed, maintenance of theirproduction center, their manager, their transportation costs, etc. For this Industree will provide themarket pull, by establishing new brands and the supply chain to support the same. It will tapsupply chains being set up as well as existing supply chains, and its very presence will catalyse

the creation of more such supply chains.

Rural India, not getting the opportunities, is migrating to urban India. A crucial link between thetwo needs to be established. Urban consumption needs can be well-served by rural Indian skills,for essentially more and more urban consumers are rising from small town and semi-ruralbackgrounds and their roots and tastes are thus very Indian. It is a question of narrowing the tastedivide, by adapting the vast pool of traditional skills and production methods that exist inabundance.


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CHAPTER - 2

ORGANIZATION OVERVIEW

Industree so far has been a hybrid model, with the for-profit involved in retail, design, sourcingand warehousing as well as direct artisanal production enhancement, with direct work in four

rural village centers across Tamil Nadu and Karnataka. The not for profit is engaged in capacitydevelopment and skill training for rural artisanal groups. For Industree the customer is theconsumer who purchases the artisanal product and the client or beneficiary is the producer orartisan.

The company is ably mentored by Mrs. Gita Ram, who has 30 years voluntary experience in theartisanal sector. Neelam Chhiber, the Executive Director, oversees the day to day operations. Anable team of dedicated staff, is in place for the last 12 years. Design, merchandising, account,production and warehousing heads are in place. Currently the organisation directly employs 160people in Bangalore. It has four stores under the Mother Earth brand in Delhi, Bangalore, andKolkata and Mumbai. It has been networking effectively with some of the leading retailers inIndia such as Shoppers Stop, Future Group, Fabindia, Ebony as well as small boutique buyers,

large global companies such as IKEA, Interface, Crate and Barrel. It is a member of IFAT, andhas a Fair Trade certification. It networks with the related government departments, and theOffice of DC Handicrafts, Ministry of Textiles, has awarded the prestigious AHVY, Natural FiberTheme Cluster project to the non-profit, wherein the GOI will invest upto 10 million USD on thetraining and production facilities for 7,500 producers across India.

2.1 VisionConnecting rural livelihood skills to urban markets in an equitable way.

2.2 Mission

To enhance and create rural artisanal livelihoods through marketing of contemporary designedartisanal produce, such as food, apparel and home products, for urban markets, wherein producersown equity, in the production and retail brands.

2.3 Core valuesTransform the lives of rural producer communities, by integrating them sustainably into the largerconsumption economy through a for profit institutional model of ownership integrated withdesign, production and marketing, thereby ensuring-1.Improved earning capacities of rural families, thereby bringing them into the consumingeconomy2.Reduced pressure on cities and urban centers, by creating opportunity to improve ones life inrural settings3.Redution of environmental load of economic activities and Increase in sustainable economicpractises such as organic farming, use of natural materials ,dyes, and proper disposal of effluents,survival of traditional production practices and sensitivities,( in contemporary forms) energyefficient and low carbon footprint manufacturing processes,4.Servicing customers who through their purchase, provide markets and are chief enablers of theabove.


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CHAPTER - 3

TARGET MARKETS

Industrees customer is the retail consumer buying artisanal and organic products, while itsprimary clients are producers. These producers have to manage their business in buyer-driven

value chains, of which national high and middle value markets and export markets represent thehighest earning potential for artisans in developing economies. India currently exports 17,000crores of handicraft merchandise alone, but this is just 3% of existing global markets. Minorportions of the same trickle down to the rural artisan. This sector has thrived because of theinfrastructure and capital infusion provided by urban, mostly North and West India basedexporters, in towns and cities. There is very little data available on domestic markets for theseartisanal products.

In order to access these markets and to improve their income situation, small producers need toupgrade their value chains. Upgrading basically means that clients will earn higher returns whenthey value-add their contribution to the value chain.

Higher returns can be obtained: By changing production processes or techniques (process upgrading); By producing new products and designs that respond to changing trends (product upgrading); By taking on additional functions or tasks that are performed by other actors in the chain

(functional upgrading); self managing the enterprise, self checking and supervision, and

By entering a new market channel of the value chain.eg, building a brand, investing in retailand the brand.

3.1 The Retail Customer

The 2 main markets for client producers are mainstream and fair trade markets. Industree has thusfar catered only to mainstream markets, believing that thereby it has honed its knowledge andexperience base to handle fair trade markets that are relatively simpler. The concept of a Fair

trade market, so far is a western concept, which has not taken root in India. Industree believes thatthere is huge potential in establishing an Indianised version of Fair trade, which is what thebrands it will establish will stand for. This basically is the mainstream market. Mainstreammarkets can further be distinguished into high-volumemainstream markets, mostly global buyersand high-valuemainstream markets, currently mainly symbolized in India by the designer/highfashion market which depend a lot on traditional artisanal skills. The fourth is the tourism market,which has high growth potential. This is partly served by government retail outlets, stores within5 star hotels, and the like.

Industree currently markets out of 4 of its own brand stores- Mother Earth in Bangalore, Delhi,Kolkata and Mumbai. These stores are located in malls and prime retail locations. In addition itmarkets product lines through shop in shops with leading chains such as Shoppers Stop, Home

Stop, Centrals & Home Towns across metros in India. It supplies to smaller stores in over 12cities in the country. It has supported its growth through tapping export markets, participating insome of the leading International fairs, trying to access global markets. It has received access tosome of the most difficult fairs to participate in, due to the unique flavour of its product line, suchas Heimtextile, Ambiente and Tendence. It has participated in Sources New York and has beensupplying to global retailers such as Pier Europe, Ikea, Crate and Barrel.


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3.2 The BeneficiarySmall producers in developing economies either work self-employed in the informal sector orhave ongoing or short-term contracts with aggregators. In such a manual system of production,small producers typically need a bundle of specific business services. Industree ensures that theright services are provided. It needs to build up cost-effective ways of providing these services,and manage the overall organization of the service provision. In other words, it organizes

complex small producer supply chains to meet sophisticated client needs.

Industree provides the essential bridging services between small producers (becoming a valueadding and problem solving distributor) and retailers/importers in the value chain. Smallproducers who want to access higher value markets generally need the following key services

Marketing and market access; Design and product development; Supply chain management & quality control; Access to infrastructure and updated/appropriate production techniques Financing.

Industree thus far has been very successful at the first two, moderately successful at the third &lags behind in the last two.

Small producers in India generally do not have the resources to afford fee-based businessservices. In addition, producers living in remote and rural areas are not an attractive target groupfor professional business providers operating from urban centres. Consequently, small producershave little experience in seeking and contracting for such services. Thus those not geographicallyplaced suitably to become part of market pulled value chains get totally ignored by this marketsystem. Secondly the largest weakness in the role of the above intermediaries is that mostly noneof the incomes or profits generated by their services is ploughed back into the supply chain,enabling any substantial increase in the wages of those right at the bottom of the value chain.Industree has so far impacted this, and it hopes to scale up this impact. This is its mission.


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CHAPTER - 4

INSTITUTIONAL ASSESSMENT & STRATEGIC ENVIRONMENT

4.1 SWOT Analysis (Strengths, weaknesses, opportunities, threats & barriers)

4.1.1 Strengths

Traditionally developing economies have not had strong domestic markets to create strong marketpulls. Exports have played this role so far. Export customers have been under no pressure toeffect change down the value chain, initiating more investment of profits into increasing incomesat the bottom of the pyramid. India is currently poised at an interesting threshold, where itsdomestic markets are growing, enabling the establishment of market pulls, which if backed bysuitably thought and planned production linkages, could substantially increase rural incomes.

Example- Viravannalur.In Viravannalur, Arikesavannalur, Patamadai cluster of villages in Tirunelveli district ofTamilnadu, Industree Foundation has mobilized 600 women into self help groups and works with200 of them currently on livelihood. These 200 are traditional Muslim grass mat weavers.In its three years of work with this cluster, it has raised the average income of half of these

weavers to three times their original income. Through this activity its chief conclusions havebeen, that1)Producers must invest in their own working capital. Ownership in the enterprise is key for longterm sustainability and the reduction of in between layers of supervison, that actually stand in theway of further increase in their incomes.2)This will also make the entire value chain, more inclusive such as creating supervisory,managerial and even design positions open to people from within community resources, ensuringlong term sustainability and pride in traditional occupations.3)To enable producer ownership, steady markets are required, which is possible through retaildomestic sales initially and eventual scale up of these producer organizations can then beachieved through global markets.

Example- BangaloreSeeing huge gaps in the value chain, in the production of products that were essential forincreasing markets for producers it has been working with, Industree experimentally set up someproduction facilities in Bangalore. Learning through this activity over the last two years has beeninstrumental in its conclusions that such enhanced value chains need to be created in rural hubs,for farmers/artisans to be able to access, so as to service sophisticated markets, better. It hasthrough this experience, enough data to show, how incomes of producers go up substantiallywhen they are moved up the value chain.

4.1.2 WeaknessesExample-Manapad Palm Leaf Society, Tamil NaduThis 50 year old society in the deep south of Tamil Nadu is a village of 7000 inhabitants whosesole source of income is fishing and palm leaf craft. The local Society, with 300 members isindeed an honest and disciplined one. But it is totally dependent on external investment to movethem up the value chain, in terms of capacity building the members towards effective use of ICT,equipment enhancement towards skill diversification. Most critical of all, being a cooperativesociety weakens any external capacity building measures as societies in Tamil Nadu are quasigovernment managed. The solution here is to set up a strong private entrepreneur who will fill inthe production gaps and outsource to the local society.Example- Viravannalur


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Mother Earth here has noticed the problems when producers and their decision makers becometoo dependant on a captive market. They lose alertness and complacency sets in. This is to beavoided at all costs.

4.1.3 OpportunityAccording to a McInsey report, the Indian consumer of the year 2025, does not even exist today.

Looking at Global trends, this consumer will be an educated, aware, green consumer, concernedwith Indias social divides and the environment. Because of the technology and ICT, job boom inIndia, the modern consumer is well traveled and exposed to the concept of Fair trade andenvironmental issues. Hence a large market potential for the establishment of an organic, natural,green, socially aware brand exists. Traditional livelihoods are intrinsically largely green in nature,taking inspiration from nature, and need to be projected as such.

With the huge growth in micro finance, in India, opportunities for partnerships with ruralorganizations looking towards workable livelihood intervention models, are also growing.

4.1.4 Barriers and ThreatsCosts of retail are growing in India. Very few retailers are actually showing profits, and are in for

the long haul. Industree too needs partnerships prepared for the same. The supply side though hasgreat potential, but actualizing this potential is going to be a challenge.

Excerpt(Connecting artisans to Markets draft report by ITC, Geneva) The review of the JOBSprojects in Bangladesh (Field and Knopp, p. 16 ff.) discovered for example that intermediarydevelopment can have a negative impact on small producer development if:

The intermediaries developed are not behaving like private sector businesses or cannotaccess different market channels and pursue multiple buyers in order to exploit thecapacity of the small producers.

Only one intermediary is developed and linked to the producers (hence creating a servicemonopoly and buyer dependency).

Embedded business services are not based on commercial terms (they have to make goodbusiness sense for the intermediaries, meaning they can either reach higher valuemarkets by providing embedded business services (EBS) to producers, or in general getmore business).

4.1.5 Strategic GoalsAs a starting point for every intervention, a value chain analysis, identifying the social relationsand inter-business dynamics, leads us to the following structure. In this case, all actors in thevalue chain have to be integrated in order to access higher value markets for small producers.

Industrees scaling strategy involves a hybrid organizational approach. Key to its approach is itsbelief in producer owner ship in the retail brand, as well as their investments in production.Producer ownership in the brand comes from its belief that there is a cultural IPR involved in

merchandise that bases itself on heritage. Producer investment in production is necessary torevitalize the bottom of the pyramid, since this will ensure growth of producers towardsbecoming owners of their enterprises. To achieve this 3 organisations are needed, one thatprimarily drives retail and marketing, to the ultimate consumer in urban areas, another thatfocuses on production issues with producer groups, builds up the supply chain and accessesglobal markets. These 2 are for profit enterprises . On matters of artisanal capacity building,towards productivity and community owned enterprises a third entity, a not for profit is essential.

Excerpt Connecting artisans to Markets draft report by ITC, Geneva


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Specific demand was the most common stated success factor in all reports and case studiesidentified in this research. If there are concrete buyers and orders for handicrafts that can be

produced by artisans, then there is an immediate incentive for all value chain actors to make thenecessary efforts to fulfil the order. Intermediaries will provide embedded business services;

NGOs will provide technical assistance; and small producers will make some extra efforts tomeet requirements.

Riordan (p. 48 ff) stresses in his article that demand-driven means a concrete interest of aspecific buyer in the products that can be produced by small producers. Demand-driven does not

mean:

Demand of the value chain actors (what they would like to get from a developmentproject);

General demand established by market analysis (e.g. in the European Union there is a 50 million demand for ethnic rugs).

Industrees current development strategy, is to establish a producer owned brand within thebooming domestic retail economy, to enable direct access to markets, entails the setting up of achain of retail stores, and shop in shops. This involves the scaling up of the existing for profit,

through 43% divestment of equity, to an investor and 14% of the shares being put into a MutuallyBeneficial Trust enabling producers to buy shares in Industree at par. This organization is retailconsumer oriented.

It needs to set up a second for profit. This for the moment can be called Industree Transform. Itwould need the relevant skills and experience to provide design, product development services,supply chain management and quality control. It would focus on channeling existing individualproduct making skills, towards, group enterprise, emphasizing on the advantages of the economicbenefits of a certain minimum scale, and the advantages of working in collectives. The approachwould be more through the intervention of external supervisory skills, with external investmentsin infrastructure, and improved work methods. Here too external social equity and access to debtat lower rates of interest is required. Here 26% would be set aside for producers to buy at par and

26% would be opened out for equity investment.

The non-profit, Industree Crafts Foundation, will arrange with existing mfis (if any) in thearea to develop microloan packages to enable the above infrastructure and working capitalcreation. This will include basic capacity development of its beneficiaries to manage their ownenterprises better, and build up their personal business, quality control and supply chainmanagement skills. In areas with existing MFIs in operation this would be a little simpler.Obviously Mother Earth would not be able to limit its sourcing only to areas where existingMFIs operate, and needs to have a multi faceted approach on being able to achieve its aims evenin areas where MFIs do not operate.

ICF would operate on a BDS(business development services) model, with the add-on of capacity

building producers towards group savings, and investing in working capital. It could have a partpaid for and part subsidized service. It would work on connecting producers to suitableinfrastructure connects, being worked on by other agencies, or towards these entities being able toestablish these facilities by themselves.


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4.1.6 Growth model

Category No. of artisans

Fashion / soft furnishings 5000 x 2.5=12,500

Personal accessories 1000 x 2.5= 2,500

Natural fibre 1000 x 2.5= 2,500

Home textiles 1000 x 2.5= 2,500

Craft based lifestyle dcor 5000 x 2.5=12,500

Furniture wood 3000 x 2.5 = 7,500

Food 4000 x 2.5=10,000Total no. of artisans 50,000

CUSTOMERS

Industree Retail Sales in 5 yrs Rs. 150 Crores /US$ 31.25 Million

Producer ownership 14%

Industree Transform sales in 5 yrs thru ME Rs.60

crores, thru other retailers, direct sales and globalMarkets- 90 crores- Total Rs. 150 crores/

US$ 31.25 Million

Producer ownership 36%

Industree

Transform

Industree Crafts Foundation

PRODUCERS


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CHAPTER - 5

BUSINESS MODEL

SIS- Shop in ShopsICF- Industree Crafts Foundation

SHG- Self Help GroupsCFC- Common facility CentersBDS Business Development Services

Industree Crafts Pvt. Ltd(ICPL) / Mother Earth is

the Retail Company

Industree Transform

large format

retail stores

small

standalone

stores

SIS

shopsTrading

Own value

addition

Producer owned

enterprises with

Industree

Transform

equity

participation

Capacity

Building

BDS

Organisation

Building

Training +

Consultancy

Federation of

SHGS withCFC

ICF

Social Investor

Retail Investor

MI large

rmat retailores

Future Group


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5.1 Retail CompanyKey to developing rural production is strong and consistent market pull. For this it is essentialthat domestic retail operations be strengthened. Once this strengthens the production base, globalsales will be less of a challenge. For successful domestic retail, a clear consumer oriented focus isnecessary. This entails specific organizational strengths, product mix and investments. Thedomestic retail brand, which is to be established is envisioned to be a natural, organic,

environmentally as well as socially sustainable brand. Here it is intended that domestic revenuesgrow from the existing Rs5 crore/ 1.2million dollars to Rs 160 crores in the the next 5 years, bybroadening the product offering. Currently Industree through the brand Mother Earth operates 4stores with a maximum size of 10,000 sq ft,(one store) but needs to expand to 12 stores with aminimum size of 10,000 sq. ft and 25 stores of beween 1000-2000 sq. ft.

In this it is crucial that Industree has an alliance with a successful retailer in India, which has beensecured. Mr. Kishore Biyani, heading Indias largest retail chain, Future Group, is personallymentoring Industree in it venture, and has invested in Industree Crafts Pvt. ltd, through, FutureVentures. Mr. R.S. Rekhi has joined as an extremely capable CEO, who shares Mother Earthscore values, has significant mainstream retail experience, with shares in the venture, to managethe company.

Industree will now invest in Industree Transform, holding 48% of the same, and opening 26% ofthis to equity investment from value adding partners, while 26% is kept for producers to buy.

Once the market pull is assured the challenge to create the equitable supply chain lies withIndustree Transform and Industree Crafts Foundation. Industree Crafts Foundation is going torequire funds to achieve this. Industree Foundation currently only provides consultancy andtraining to producer groups and government projects. It has 12A , 80G and FCRA. Thefoundation would be the interface between grass roots producer entities and social loans. It wouldencourage individual producers to get involved in group savings and leverage the same towardsworking capital loans.

5.2 Industree TransformIndustree has over the years, become involved in direct artisanal production due to the gaps in thesupply chain. In annexure 1 a list of over 100 producer groups that it has worked with over thelast 12 years is attached. These are generally ngos, societies, cooperatives. With experience it hasnoticed critical gaps with specific regard to market oriented livelihood development and theinability amongst most organizations to raise working capital and production infrastructure toachieve long term production goals.

It has over the years managed to surmount these difficulties through direct intervention in certainkey aspects of production crucial to its market survival. For a scale up it is essential that theseproduction, hence artisanal oriented activities become part of a separate for profit organization.To improve artisanal incomes it is essential to move them up the value chain. To enable artisansto reach paying markets, constant design, hence technical upgradation, hence infrastructuredevelopment at grass root producer level is essential. Annexure 2 contains the case study on ` byITC, Geneva.

Business plan preparations for grass roots production activities, production planning, formation ofrural production entities, would be part of its mandate. It would with the help of IndustreeFoundation establish community owned enterprises, that are professionally and commerciallyviable. This production organization would hand hold and provide the necessary technical inputs


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to local ngos, interested in setting up such enterprises with the primary stakeholders- artisans andrural communities.

5.3 Industree Crafts FoundationThis not for profit is currently, largely self sustainable working with various government bodiessuch as Ministry of Textiles, Ministry of Rural Development, IL&FS Cluster Development

Initiative on artisanal owned, market oriented design and technical upgradation initiatives,through a consultancy model

It needs to work actively with local communities, self governance bodies, govt. organizations thatwork with handicraft and handlooms, to access local level infrastructure and funds whereverpossible. Building relationships with existing ngos, working with micro finance organizations,facilitating their clients towards suitable artisanal group enterprise production will be itsresponsibility.

5.4 Revenue Fish Bone

Total

Revenue

Large format brand

retail stores 60%

Small format brand

retail stores 20%

Brand cut ins, 10%Shop in shops

Wholesalers 5%

Exports 5%

RetailcompanyFor Profit.

Industree

Capable individualartisans, groups, privateaggregators 40%

Production Co.Industree

Transform- Forprofit

Medium capableartisans, N. India, W.

India 30%

Under capable artisans,S. India, E. India, C.

India 30%

Industree CraftsFoundation, Nonprofit

RevenuesBDS fees fromBeneficiariesGrants for capacitybuilding, group

formation forenterprisedevelopmentConsultancy Fees from

NGO / MFIs


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5.5 Expenses Fish Bone

5.6 Value PropositionFor millions of artisans and farmers in India with low incomes and partial employment, Industreehopes to provide market opportunities, backed by design inputs, skill and organizational trainingto enable artisans to work in groups, producing products saleable in urban and global markets.This brings much needed livelihood opportunities, increasing incomes. This is achieved byestablishing a market pull, backed with the capacity to empower producers, wherein they areencouraged to invest their savings in and become owners of their production units, in ways whichincrease productivity and profits for them.

The combination of the seamless cycle of access to markets, overall production upgradation(including access to finance), capacity building artisanal producers to involve their savings in

working capital and part owning their enterprises, is what is unique to Industrees model, as isownership in the brand which is to be provided for.

5.7 Objectives of Scaling

Industree aims to target 10,000 artisans/farmers per year, for the first 2 years, after which itshould be able to enhance this figure to 15,000 artisans/farmers per year. Through ownership inthe brand it is envisioned that through internal trading of shares, after three years, when the retailcompany goes in for valuation, artisanal/farmer shareholders will be able to have returns of morethan 10 times their investment.

Total

costs

Retail Co.Mother Earth

Capacitybuilding, Skillupgradation

Industree

Foundation

Production Co.

Industree

Transform

Head Office

Expenses

Retail Store

Expenses

Group Enterprise Driverfor small co-ops.

Rents, utilities 1.00%Payroll 3.88%Travel 0.35%

Marketing 2.28%Financial ex ense 0.68%

Rents, utilities .47%Travel .35%Payroll 1.1%Inventory 1.74%Advances 2.56%Financial ex ense .7%

Production machines 2.9%Raw material WagesInventory 3.38%

Rents, Utilities .43%Financial expense .87%

Head OfficeExpenses

Production centerexpenses

Consultancy to NGOsMFIs, skill training.

Training Module 1.00%dev costTrainers Fees .52%Travel .35%Simple machine .6%tech develo ment

Rents , utilities .52%Payroll 1.4%Travel, .52%

Marketing .52%Communication .35%

Rents, utilities 21%Payroll 4.28%Inventory 12%Store Interiors 18.5%Store Rent deposits 13.2%Financial ex ense .26%


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CHAPTER - 6

DETAILED BUSINESS PLAN FOR RETAIL COMPANY INDUSTREE CRAFTS PVT.

LTD.

6.1 Marketing Plan

The brand to be launched by the Retail company, is a social, natural/organic holistic food, homeand fashion brand. This will be a national brand, which will sell out of its own stand alone stores,either in malls or high street locations. There will be 2 versions of these stores. Larger ones,which are 10,000 sq ft in size, others that are 1000 sq ft, and also the cut in, or shop in shopmodel can be explored. In the financials, cut ins and small format stores are clubbed under cutins, for the preliminary outlines.

Keeping inputs from the retail experienced investors in mind, and also from its own 10 yearsexperience in Indian retail, Industree-as Mother Earth sees the need to widen its product mix, intoapparel, home textiles, value added organic and cultural food (specifically things not currentlymarketed by others) and mixed material handicraft home accessories. Mother Earth has alreadycompleted a market survey, merchandise mix analysis on these new categories. The stores will

stock existing social brands, whose merchandise fit into the brands seasonal planning. It willgive shop in shop floor space to leading social brands such as SEWA, SASHA, Sahaj, Dharametc.

Projected financials attached have been done on an extremely conservative scale, on the marketanalysis basis, of 1000 rs sq ft average return per sq ft of retail space. An analysis of majorcompetition in this sector has shown, on an average almost Rs3,000 sales per sq ft of retail space.Mother Earth, currently with just its own natural fiber merchandise which is extremely niche, lowvalue and high volume shows a return of Rs.800 a square foot, in its mall locations.

Exports will not be completely wound down, though there will be no active export marketingcosts. This organization would be involved in operating stores, brand building, marketing,merchandise planning, design and production initiation. It could source directly from mainstreamproducers, till socially oriented production is in place with enough and appropriate merchandisemix, and will actively develop production from its production company partners.

6.2 Operational Plan

6.2.1 BrandingBranding is the emotional connection between the customer and the product/ service beingoffered. In the growing retail economy of India, Industree through its retail experience hasrealized the potential that lies in the creation of a relevant brand to service the farmer/artisanal/rural value chain sector. The Indian customer takes pride in his/her Indian ness. Indiaslarge, young, educated buying population is keen to explore the concept of Indian-ness, not somuch in the form of tradition but contemporarily packaged in holistic, forward looking culturalattitudes. Industree will establish a new brand Mother Earth to achieve this customer connect.Branding will need to be backed by relevant merchandise, store design and communication.Industree is affiliated to fair trade associations and is officially recognized as a fair tradeorganization. It has to Indianise the concept of sustainability- both environmental and social.

Successful brands, Amul, Safal, FabIndia


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6.2.2 Design and product development

Key to successful retail operations is merchandise. Product categories that encapsulate needs ofthe contemporary Indian shopper, need to be established.

Consistently across projects, product design is what entices buyers to take a risk on a newartisan supplier. ATA Lessons Learned in 20 Years, refreport

Based on a profound understanding of the target market, new designs have to be developed tomeet changing client tastes. Design is the leading competitive advantage in the sector, butevidently needs to be translated into cost-effective business operations.

6.2.3 Retail OperationsKey to successful retail, are strong retail operations. This entails ensuring operational profits atretail locations, movement of merchandise to stores, store management.Coordinating Store design/interiorsRetail softwareSales staff trainingStore displaysStore operations

6.2.4 Supply chain management and quality control

The basic operational problems for artisan/farmer micro-entrepreneurs who want to access highervalue markets, lie in the nature of dispersed and/or remotely located small-scale production. Thisleads to higher transaction costs with regard to maintaining consistent quality and achieving thenecessary scale. The higher costs arise because of the time dedicated to ensuring thatspecifications are met, negotiating with many individuals, and collecting the product fromdispersed or remote collection points.

Industree-Mother Earths(retail company) involvement with supply chain management will lieupto, providing information in terms of orders, specifications to producers on merchandise thatsells. Comprehensive supply chain management services depending on the organizationalcapabilities of small producers will be provided by Industree Transforms that it will set up. It hasin the past organized these tasks by subcontracting1larger orders to a number of small producersand then aggregating the supply for delivery to the client. This will now fall within the purview ofthe production company that is being set up. It will comprise the management of the flow ofinformation and materials needed to produce the goods in accordance with its specifications. Insome locations Industree Transform may need to provide services such as purchasing inputsupplies, materials management, provision of finished product specifications, production planningand costing, quality control, bundling and finishing of products (to ensure standardization),packaging, warehousing, local transportation. Industree Transforms mandate that ICF will helpfulfill will be to initiate and develop producer working capital participation in an increasingfashion, first in some, ultimately working towards all of these activities.

With under capacity developed producers, supplier management and supply chain managementhave to be performed extremely well by Industree Transform to be able to deliver the demandedquality and quantity on time and reliably for every order. Mother Earth is well aware of this as acustomer, and needs to perform a market pull function, most necessary for producer upgradation,remembering that as a brand, it will be hollow in nature and merchandise, and hence basicallyunsuccessful unless it works towards a strong Industree Transform and ICF.


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Mother Earth has noticed that managing the flow of information from customers, over severalintermediaries to the small producers and then the materials and goods back from the inputsuppliers over producers and intermediaries to the final customers demands a soundorganizational set-up and clear but simple procedures i.e. a management system. This is also thereason that Industree Transform is being set up, so that at least part of the supply will be managedby just one intermediary, thereby cutting through several layers. The ISO 9000 series quality

management systems logic as also more bottom up, self actualized methodologies will beinvoked to achieve streamlining in the supply chain.

With regard to quality control, although handmade, these products still need to conform with thestandardized product specification ordered by the customer and the product finishing has tocomply with market requirements (e.g. health, safety, environmental and social standards).Quality control or more sophisticated quality assurance methods are extremely important forIndustree Transform and other intermediaries who will bundle deliveries from a large number ofproducers who operate individually and have different levels of education and technical skills.

Mother Earth is affiliated to fair trade associations and is officially recognized as a fair tradeorganization, which entails some auditing according to set criteria.

6.2.5 ICT and communicationMother Earth will have to communicate effectively with forward linkages in the value chain = itsretail stores and shop in shop operation. Communication has to take place regularly betweencustomer and producer. As, visible and successful exporters in the fair trade marketcommunicate their story to the public, so will Mother Earth need to do the same, with its retailcustomer. It should have television screens in each store that is playing videos of its activities invillages. Customers should be encouraged to connect with their producers in innovative ways.Industree Transforms mandate should be to link production centers through webcams withstores, so that customers are able to talk to producers, whose goods they are purchasing, givingthem feedback.

Depending on the target market, Mother Earth will need to develop and use state-of-the-artinformation and communication products to communicate effectively using online catalogues, oronline marketplaces. For this it may be effective eventually for it to tie up with a leading Indianonline seller, as Target did with Amazon.(Connecting artisans to Markets draft report by ITC,Geneva)


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6.3 Human Resource Plan

Branding, Store design will be outsourced, but an in-house brand custodian is necessary to ensuresmooth communication from consultant to organization. Similarly, senior merchandisers will beresponsible for inventory, but a separate person, to focus on this is important. The personresponsible for administration, will also look into HR, travel, stay, issues for the first year.Warehousing and dispatch salaries have not been addressed separately in the Financial plan, butthese costs will be included in cost of goods.

6.4 Financial Plan

CEO

Head

FOOD

Head

HOME

Head

APPAREL

Merchandiser

Designer Designer

CFO

CustodianBrandingStore design 1

Accountants

2

Inventory 1

Jr Merchandiser

1

Merchandiser Merchandiser

Jr Accts,

1

Jr Merchandiser

1

Jr Merchandiser

1

Warehousing

Despatch1+10

ICT, WEB

Comm 1


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Retail Concept - Mother Earth Profit & Loss Account

Profit & Loss Account

(All figures are in Rupees Lacs.)

Particular's

Total No of Store 6 14 23 32 41

Standalone Stores 1 4 8 12 16

Cut-ins 5 10 15 20 25

Standard Area (Chargeable) in Sq Ft 16,500 53,000 99,500 146,000 192,500

Standalone Stores 10,000 40,000 80,000 120,000 160,000

Cut-ins 6,500 13,000 19,500 26,000 32,500

Standard Area (Carpet) in Sq Ft 12,375 39,750 74,625 109,500 144,375

Standalone Stores 7,500 30,000 60,000 90,000 120,000

Cut-ins 4,875 9,750 14,625 19,500 24,375Sales Per Sq Ft

Standalone Stores 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%

Cut-ins 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%

Sales Per Sq Ft (Growth Rate %)

Standalone Stores 15.00% 15.00% 10.00% 10.00%

Cut-ins 15.00% 15.00% 10.00% 10.00%

No of Months of Operation

Standalone Stores 7 7 8 8 9

Cut-ins 7 7 8 8 9

Particular's Amt % Amt % Amt % Amt % Amt %

Sales Turnover 798.88 106.22% 2,951.00 106.22% 7,281.24 106.22% 11,752.44 106.22% 19,175.70 106.22%

Standalone Stores 484.17 1 06.22% 2,227.17 106.22% 5,854.27 106.22% 9,659.54 106.22% 15,938.24 106.22%Cut-ins 314.71 106.22% 723.83 106.22% 1,426.98 106.22% 2,092.90 106.22% 3,237.46 106.22%

Less: Sales Tax / VAT 46.78 6.22% 172.79 6.22% 426.35 6.22% 688.15 6.22% 1,122.82 6.22%

Standalone Stores 28.35 6.22% 130.41 6.22% 342.79 6.22% 565.61 6.22% 933.25 6.22%

Cut-ins 18.43 4.04% 42.38 6.22% 83.56 6.22% 122.55 6.22% 189.57 6.22%

Total Net Sales 752.10 100.00% 2,778.20 100.00% 6,854.90 100.00% 11,064.29 100.00% 18,052.88 100.00%

Standalone Stores 455.82 1 00.00% 2,096.76 100.00% 5,511.47 100.00% 9,093.93 100.00% 15,004.99 100.00%

Cut-ins 296.28 65.00% 681.45 100.00% 1,343.42 100.00% 1,970.35 100.00% 3,047.89 100.00%

Cost of Goods Sold 457.19 60.79% 1,661.04 59.79% 4,029.88 58.79% 6,449.19 58.29% 10,477.59 58.04%

Standalone Stores 277.08 60.79% 1,253.62 59.79% 3,240.10 58.79% 5,300.70 58.29% 8,708.65 58.04%

Cut-ins 180.10 60.79% 407.43 59.79% 789.78 58.79% 1,148.49 58.29% 1,768.94 58.04%

Total Gross Margin 294.91 39.21% 1,117.16 40.21% 2,825.02 41.21% 4,615.10 41.71% 7,575.29 41.96%

Standalone Stores 178.73 39.21% 843.14 40.21% 2,271.37 41.21% 3,793.23 41.71% 6,296.34 41.96%

Cut-ins 116.18 39.21% 274.02 40.21% 553.65 41.21% 821.87 41.71% 1,278.94 41.96%

Occupation Cost 152.08 20.22% 473.55 17.05% 1,046.43 15.27% 1,600.83 14.47% 2,484.06 13.76%

Energy Costs 14.91 1.98% 51.16 1.84% 115.89 1.69% 178.92 1.62% 278.96 1.55%

Staff Costs 25.20 3.35% 91.51 3.29% 211.02 3.08% 327.84 2.96% 512.79 2.84%Security & House Keeping 4.52 0.60% 15.33 0.55% 33.48 0.49% 49.44 0.45% 73.58 0.41%

Shrinkage 2.34 0.31% 9.04 0.33% 22.65 0.33% 36.75 0.33% 60.14 0.33%

Credit Card Commission Charges 2.86 0.38% 10.77 0.39% 26.75 0.39% 43.27 0.39% 70.69 0.39%

Packing Charges 7.52 1.00% 22.23 0.80% 51.41 0.75% 82.98 0.75% 126.37 0.70%

Staff Travelling & Conveyance 0.88 0.12% 2.45 0.09% 5.00 0.07% 7.20 0.07% 10.58 0.06%

Printing & Stationery 0.88 0.12% 2.45 0.09% 5.00 0.07% 7.20 0.07% 10.58 0.06%

Warehousing Cost - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%

Legal & Prof 0.60 0.08% 2.44 0.09% 6.18 0.09% 10.08 0.09% 16.53 0.09%

Insurance Premium 0.89 0.12% 3.41 0.12% 7.96 0.12% 12.88 0.12% 18.05 0.10%

Communication Expenses 0.98 0.13% 2.87 0.10% 5.96 0.09% 8.64 0.08% 12.74 0.07%

Repairs & Maint Others 0.60 0.08% 2.44 0.09% 7.84 0.11% 10.99 0.10% 18.03 0.10%

Misc Expenses 0.26 0.03% 1.12 0.04% 2.89 0.04% 4.74 0.04% 7.81 0.04%

Other Overheads-Share of Cut-ins - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%

Total Store Overheads 214.50 28.52% 690.75 24.86% 1,548.46 22.59% 2,381.78 21.53% 3,700.88 20.50%

Markeing Cost 24.00 3.19% 51.78 1.86% 131.36 1.92% 214.12 1.94% 351.14 1.95%

Total Store EBITDA 56.41 7.50% 374.63 13.48% 1,145.20 16.71% 2,019.20 18.25% 3,523.27 19.52%

Total Head Office Expenses 158.04 21.01% 219.79 7.91% 304.16 4.44% 409.97 3.71% 600.24 3.32%Headoffice Rent 8.00 1.06% 18.00 0.65% 19.80 0.29% 19.80 0.18% 19.80 0.11%

Salaries & Welfare 135.38 18.00% 166.69 6.00% 222.78 3.25% 304.27 2.75% 451.32 2.50%

Printing & Stationery 1.50 0.20% 5.56 0.20% 6.85 0.10% 8.30 0.08% 13.54 0.08%

Staff Travelling & Conv 3.76 0.50% 9.72 0.35% 20.56 0.30% 33.19 0.30% 54.16 0.30%

Legal & Prof 1.88 0.25% 4.17 0.15% 6.85 0.10% 5.53 0.05% 9.03 0.05%

Communication 2.63 0.35% 6.95 0.25% 13.71 0.20% 18.81 0.17% 21.66 0.12%

Misc Expenses 1.88 0.25% 5.56 0.20% 10.28 0.15% 16.60 0.15% 27.08 0.15%

Electricity Expenses 3.00 0.40% 3.15 0.11% 3.31 0.05% 3.47 0.03% 3.65 0.02%

Total Company EBITDA (101.63) -13.51% 154.84 5.57% 841.05 12.27% 1,609.23 14.54% 2,923.03 16.19%

Interest Cost 20.90 2.78% 58.78 2.12% 96.80 1.41% 134.07 1.21% 134.39 0.74%

Depreciation Cost 10.39 1.38% 33.96 1.22% 73.81 1.08% 116.98 1.06% 164.28 0.91%

Total PBT (132.92) -17.67% 62.10 2.24% 670.43 9.78% 1,358.17 12.28% 2,624.36 14.54%

Tax - 0.00% 20.70 0.75% 223.46 3.26% 452.68 4.09% 874.70 4.85%

Deferred Tax - 0.00% 0.00% 0.00% 0.00% 0.00%

Total PAT (132.92) -17.67% 41.40 1.49% 446.98 6.52% 905.50 8.18% 1,749.66 9.69%

Year 5

Year 5

Year 4Year 1 Year 2 Year 3

Year 1 Year 2 Year 3 Year 4


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PARTICULARS Year 1 Year 2 Year 3 Year 4 Year 5

I SOURCES OF FUNDS

1 SHAREHOLDERS FUNDS

Share Capital 600.00 600.00 600.00 600.00 600.00

Share application Money -

Reserves & Surplus (132.92) (91.52) 355.46 1,260.96 3,010.62

2 LOAN FUNDS

Secured Loans-Term Loan 156.00 396.30 693.30 801.90 481.70

Secured Loans-Working Capital Loan 102.69 222.38 313.86 354.87 414.75

3 DEFERRED TAX LIABILITY

4 Inter Unit Balance

725.77 1,127.16 1,962.62 3,017.72 4,507.06

II APPLICATION OF FUNDS :

1 FIXED ASSETS

Gross Block 208.00 570.00 1,080.00 1,616.00 2,148.00

Less : Depreciation 10.39 44.35 118.16 235.14 399.42

Net Block 197.61 525.65 961.84 1,380.86 1,748.58

Capital work-in-progress including advances

2 INVESTMENTS - - - -

3 CURRENT ASSETS, LOANS & ADVANCES

Inventories 76.20 276.84 671.65 1,074.86 1,746.26

Sundry Debtors 6.57 24.25 59.85 96.60 157.61

Cash & Bank Balances 372.19 105.45 11.79 133.76 631.14

Loans & Advances

Deposits 130.35 402.60 761.23 1,137.79 1,533.17

LESS : CURRENT LIABILITIES & PROVISIONS

Current Liabilities & Creditors 57.15 207.63 503.73 806.15 1,309.70

Provisions - - - -

NET CURRENT ASSETS 528.16 601.51 1,000.77 1,636.86 2,758.49

4 MISCELLANEOUS EXPENDITURE

(To the extent not written off or adjusted)

Preliminary expenses

Capital issue expenses - - - -

Deferred Revenue expenses - - - -

725.77 1,127.16 1,962.62 3,017.72 4,507.06

Dif if any - - - - -

25.62 93 228 365 594

PROJECTED BALANCE SHEET


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Retail Concept - Mother Earth

Profit & Loss Account

(All figures are in Rupees Lacs.)

Particular's

Total No of Store 5 10 15 20 25

Standalone Stores

Cut-ins 5 10 15 20 25

Standard Area (Chargeable) in Sq Ft 6,500 13,000 100% 19,500 50% 26,000 33% 32,500 25%

Standalone Stores

Cut-ins 6,500 13,000 19,500 26,000 32,500

Standard Area (Carpet) in Sq Ft 4,875 9,750 14,625 19,500 24,375

Standalone Stores

Cut-ins 4,875 9,750 100% 14,625 50% 19,500 33% 24,375 25%

Sales Per Sq Ft

Standalone Stores

Cut-ins 11,067 12,727 15% 14,636 15% 16,099 10% 17,709 10%

Sales Per Sq Ft (Growth Rate %)

Standalone Stores

Cut-ins 0.00% 15.00% 15.00% 10.00% 10.00%No of Months of Operation

Standalone Stores

Cut-ins 7 7 8 8 9

Particular's Amt

% of

Sales Amt

% of

Sales Amt

% of

Sales Amt

% of

Sales Amt

% of

Sales

Sales Turnover 314.71 106.22% 723.83 106.22% 1,426.98 106.22% 2,092.90 106.22% 3,237.46 106.22%

Less: Sales Tax / VAT 18.43 6.22% 42.38 6.22% 83.56 6.22% 122.55 6.22% 189.57 6.22%

Total Net Sales 296.28 100.00% 681.45 100.00% 1,343.42 100.00% 1,970.35 100.00% 3,047.89 100.00%

Product 171.22 57.79% 388.69 57.04% 756.19 56.29% 1,099.23 55.79% 1,692.75 55.54%

SCM Cost 8.89 3.00% 18.74 2.75% 33.59 2.50% 49.26 2.50% 76.20 2.50%

COGS 180.10 60.79% 407.43 59.79% 789.78 58.79% 1,148.49 58.29% 1,768.94 58.04%

Total Gross Margin 116.18 39.21% 274.02 40.21% 553.65 41.21% 821.87 41.71% 1,278.94 41.96%

Occupation Cost 75.08 25.34% 165 150.15 22.03% 165 270.27 20.12% 173 378.38 19.20% 182 558.70 18.33% 191

Energy Costs 5.46 1.84% 16 11.47 1.68% 17 20.64 1.54% 18 28.89 1.47% 19 42.66 1.40% 19Staff Costs 6.83 2.30% 20 14.33 2.10% 21 25.80 1.92% 22 36.12 1.83% 23 53.33 1.75% 24

Security & House Keeping 1.37 0.46% 3 2.73 0.40% 3 4.68 0.35% 3 6.24 0.32% 3 8.78 0.29% 3

Shrinkage 0.74 0.25% 1.70 0.25% 3.36 0.25% 4.93 0.25% 7.62 0.25%

Credit Card Commission Charges 1.04 0.35% 2.39 0.35% 4.70 0.35% 6.90 0.35% 10.67 0.35%

Packing Charges 2.96 1.00% 5.45 0.80% 10.08 0.75% 14.78 0.75% 21.34 0.70%

Staff Travelling & Conveyance 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500

Printing & Stationery 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500

Warehousing Cost - - - - -

Legal & Prof 0.15 0.05% 0.34 0.05% 0.67 0.05% 0.99 0.05% 1.52 0.05%

Insurance Premium 0.30 0.10% 0.68 0.10% 1.34 0.10% 1.97 0.10% 3.05 0.10%

Communication Expenses 0.53 0.18% 1,500 1.05 0.15% 1,500 1.80 0.13% 1,500 2.40 0.12% 1,500 3.38 0.11% 1,500

Repairs & Maint Others 0.15 0.05% 0.34 0.05% 0.67 0.05% 0.99 0.05% 1.52 0.05%

Misc Expenses 0.03 0.01% 0.07 0.01% 0.13 0.01% 0.20 0.01% 0.30 0.01%

Other Overheads-Share of Cut-ins - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%

Total Store Overheads 95.66 32.29% 192.80 28.29% 347.74 25.88% 487.57 24.75% 719.62 23.61%

Markeing Cost 3.15 1.06% 7.24 1.06% 14.27 1.06% 20.93 1.06% 32.37 1.06%

Total Store EBITDA 17.37 5.86% 73.98 10.86% 191.63 14.26% 313.37 15.90% 526.95 17.29%

Year 5

Year 5Year 1 Year 2 Year 3 Year 4

Year 1 Year 2 Year 3 Year 4


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Capital Expenditure PlanYear 1 Year 2 Year 3 Year 4 Year 5

Area(Large Format) 10,000 40,000 80,000 120,000 160,000

Capex Rate 1,200 1175 1150 1150 1150Capex (Large Format) 120.00 470.00 920.00 1,380.00 1,840.00

Area(Large Format) 6,500 13,000 19,500 26,000 32,500

Capex Rate 1,200 1175 1150 1150 1150

Capex (Small Format) 78.00 80.00 140.00 216.00 288.00Total 198.00 550.00 1,060.00 1,596.00 2,128.00

Head Office Capex

Area 5,000

Capex Rate 200

Cumulative Capex 10.00 20.00 20.00 20.00 20.00

Grand Total 208.00 570 1080 1616 2148

Additional Capex 208.00 362.00 510.00 536.00 532.00

Deposits

Rent/sqft

Large Format 110 116 121 127 134

Small Format 165 165 173 182 191

Incremental Area

Large Format 10,000 30,000 40,000 40,000 40,000

Small Format 6,500 6,500 6,500 6,500 6,500

No Of months 6 6 6 6 6

Total Deposits 130 272 359 377 395

Cumulative 130 403 761 1138 1533


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Year 1 Year 2 Year 3 Year 4 Year 5

Debt Outstanding 156.00 396.30 693.30 801.90

New Loan (% of additional Capex) 75% 75% 75% 60% 0%

Additional Capex 156.00 271.50 382.50 321.60 -

Debt Repaid - 31.20 85.50 213.00 320.20

Net Amount 156.00 396.30 693.30 801.90 481.70

Interest Rate 11% 11% 11% 11% 11%

Interest Amount 8.58 32.09 64.63 93.95 88.21

No. of Months of New Loan 6 6 6 6 6

Tenure (in years) 5 5 3 3 3

Repayment for new Loan per month 2.6 4.5 10.6 8.9 0.0

Loan Repayment

Period Of repayment

Amt taken Year 1 Year 2 Year 3 Year 4 Year 5

Year of taken

Year 1 156.00 31.20 31.20 31.20 31.20

Year 2 271.50 54.30 54.30 54.30

Year 3 382.50 127.50 127.50

Year 4 321.60 107.20

Year 5 -

Total Repayment - 31.20 85.50 213.00 320.20

TERM LOAN


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30-Mar Rate Year 1 Year 2 Year 3 Year 4 Year 5

Working Capital Requirement

Retail Sales 798.88 2,951.00 7,281.24 11,752.44 19,175.70Cost of goods Sold 457.19 1,661.04 4,029.88 6,449.19 10,477.59

Inventories

-Finished goods 60 76.20 276.84 671.65 1,074.86 1,746.26

Sundry Debtors 3 6.57 24.25 59.85 96.60 157.61

Cash & Bank Balances (days of sales)

Loans & Advances/Lease Deposits 130.35 272.25 358.63 376.56 395.39

Gross Current Assets 213.11 573.34 1,090.12 1,548.02 2,299.26

Creditors 45 57.15 207.63 503.73 806.15 1,309.70

Provisions

Total Current Liability 57.15 207.63 503.73 806.15 1,309.70

Net Current Assets (1) 155.97 365.71 586.38 741.87 989.56

bank borrowing

75% of Current Assets (excl cash & bank balance) 159.84 430.01 817.59 1,161.01 1,724.45

Net Current Assets -25% of Gross Current Asset 102.69 222.38 313.86 354.87 414.75

Maximum bank Finance 102.69 222.38 313.86 354.87 414.75

Working Capital Borrowings 102.69 222.38 313.86 354.87 414.75

Interest On Working Capital Loans 12% 12.32 26.69 32.17 40.12 46.18

Bank Charges 0% 0.000 0.000 0.000 0.000 0.000

Interest On Working Capital 12.32 26.69 32.17 40.12 46.18

Schedule of Working Capital Requirements


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Margin Model :-

CONCEPT Rs./Lacs % of Net SaleRs./Sq.Ft. Rs./Lacs % of Net SaleRs./Sq.Ft.

Line ref. Description Unit

1 .0 0 STORE I NFO

1.01 Store Area Chargable sq ft 10,000 1,300

1.02 Store Area Carpet sq ft 7,500 975

1.03 Store Type Mall & Standalone (Large Format) Small Format

1.04 Total Staff nos. 31 4

1.05 Own Staff nos. 31 4

2 .00 INVESTMENT

2.01 Capex Rs. / sq ft 140.00 1,867 18.20 1,867

2.02 Deposit (Rent & Maint.) Months 33.00 3 440 6.44 3 660

2.03 Inventory days 78.08 60 1,041 10.15 60 1,041

2.04 Net Working Capital days 83.27 45 1,110 11.57 45 1,187

Capital Employed 256.27 3,417 36.21 3,714

3 .00 MARGIN MODEL

3.01 Retail Sales 830.00 1 06.2% 11,067 107.90 106.2% 11,067

3.02 Less : Sales Tax 48.60 6.2% 648 6.32 6.2% 6483.03 Net Sales 781.40 1 00.0% 10,419 101.58 100.0% 10,419

3.04 COGS 475.00 60.8% 6,333 61.75 60.8% 6,333

3.05 Gross Margin 306.40 39.2% 4,085 39.83 39.2% 4,085

3.06 Occupation Cost 132.00 16.9% 1,760 25.74 25.3% 2,640

3.07 Energy Costs 16.20 2.1% 216 1.87 1.8% 192

3.08 Staff Costs 31.50 4.0% 420 2.34 2.3% 240

3.09 Store Overheads 20.75 2.7% 277 2.16 2.1% 221

3.10 Retail Operating Cost 200.45 25.7% 2,673 32.11 31.6% 3,293

3.11 Marketing Cost 16.60 2.1% 221 1.08 1.1% 111

3.12 Store EBITDA 89.35 11.4% 1,191 6.64 6.5% 681

Corporate Overhead 37.35 4.8% 498 0.81 0.8% 83

Company EBITDA 52.00 6.7% 693 5.83 5.7% 598

4.00 RATIOS

4.01 GMROL Rs. 980,480 995,800

4.02 GMROF Rs. 4,085 4,085

4.03 GMROI % 119.6% 110.0%

4.04 Gross Sales / Capital Employed no. 3.2 3.0

4.05 Gross Sales / Fixed Capital Employed no. 5.9

4.06 Inventory Turn no. 6.08 6.08

4.07 EBITDA / Capital Employed % 20.3% 16.1%

4.08 ROCE % 12.1% 8.6%

Stand Alone Store

Scalability Unit Year1 Year2 Year3 Year4 Year 5

No.Stores Nos 1 6 12 20 30

Retail Space Sq Ft (Carpet Area) 7,500 45000 90000 150000 225000

Capital Investment Rs./Lacs 140 840 1,680 2,800 4,200

Capital Employed Rs./Lacs 256 1,538 3,075 5,125 7,688

Retail Sales Rs./Lacs 830 4,980 9,960 16,600 24,900

EBIDITA - Store Rs./Lacs 89 536 1,072 1,787 2,681

EBIDITA - Company Rs./Lacs 52 312 624 1,040 1,560

Cut Ins




Capital Investment Rs./Lacs 91.00 182.00 273.00 364.00 455.00

Capital Employed Rs./Lacs 181 362 543 724 905Retail Sales Rs./Lacs 540 1,079 1,619 2,158 2,698

EBIDITA - Store Rs./Lacs 33 66 100 133 166

EBIDITA - Company Rs./Lacs 29 58 88 117 146

Combined




Capital Investment Rs./Lacs 231 1,022 1,953 3,164 4,655

Capital Employed Rs./Lacs 437 1,900 3,618 5,850 8,593

Retail Sales Rs./Lacs 1,370 6,059 11,579 18,758 27,598

EBIDITA - Store Rs./Lacs 123 603 1,172 1,920 2,847

EBIDITA - Company Rs./Lacs 81 370 712 1,157 1,706

EBIDTA % % 5.93% 6.11% 6.15% 6.17% 6.18%

Mother Earth Stand Alone Store Mother Earth Cut In

Annual Plan Annual Plan


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CHAPTER 7

DETAILED BUSINESS PLAN OF PRODUCTION COMPANY - Industree Transform

7.1 Marketing PlanINDUSTREE TRANSFORM will market its merchandise to Mother Earth, as per Mother Earths

market requirement. Its growth would happen through 60% of its sale to Mother Earth whilst thebalance could be exports, supply to other retailers.(designs and ranges that do not conflict withMother Earth sales) Producer groups it has helped develop will be encouraged to take shares in itas also in Mother Earth. These groups will be aware of the importance of the markets MotherEarth provides. If they have surplus production capacity, they will be encouraged to supply toexternal markets, for which Industree Transform could act as an agent and receive the agentscommission for the same. Industree Transform would look at global sales, in a latent fashion, forthe first few years primarily focusing on fair trade markets,but the potential scaleup in globalmarkets is gigantic.

The beneficiaries it needs to market itself with are producer groups, who are involved inproduction of merchandise that Mother Earth is interested in marketing, or sees potential in

developing. At the same time it would create market potential for producers who request for it,through design, skill training, infrastructural and internal group management/working capitalcreation inputs. For these it would take the assistance of the nonprofit, as well as use its marginon the product cost. It would bear the costs of design, skill training, production management fromits margins and depend on the non profit for inputs on infrastructural enhancement, internalworking /capital generation, group work. The break up of expenditure on these elements wouldvary from location to location and the 2, Industree Transform and the non profit would need toplan expenditure such that, it would be viable for both entities from the point of view of theirindividual resource models.

Target markets-Phase 1

STATE District

Bihar

Purnia

Gaya

Nawada

Orissa

Puri

Bargarh

Sambhalpur

Bolangir

West Bengal

Nadia

E Midinapore

Cooch Behar

Purulia

STATE District

Tamil Nadu

Krishnagiri

Dharmapuri

Erode

Tirunelveli

Tuticorin

Kanyakumari

Andhra Pradesh

Prakasam

Guntur

East Godavari

Rajasthan

Alwar

Dausa

Baran

Uttar Pradesh

FirozabadLucknow

Sitapur

Varanasi

Bhadohi


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Phase -3

Increase no of people per location, increase no of locations per state, increase no. of partners,increase no. of MFI partners, etc.

7.2 Operational Plan of Industree Transform

7.2.1 Design and Product DevelopmentThe themes, product specifications, color ways, motif requirements, packaging requirements, etc.will be placed with Industree Transform or direct vendors, by Mother Earth. Comprehensivesupply chain management services depending on the organizational capabilities of smallproducers will be provided by Industree Transform for the enterprises that it will help set up orselect for expansion. It will comprise the management of the flow of information and materialsneeded to produce the goods in accordance with its specifications. In some locations IndustreeTransform may need to provide services such as purchasing input supplies, materialsmanagement, provision of finished product specifications, production planning and costing,quality control, bundling and finishing of products (to ensure standardization), packaging,

warehousing, local transportation. Industree Transforms mandate that ICF will help fulfil will beto initiate and develop producer working capital participation in an increasing fashion, first insome, ultimately working towards all of these activities.

Its key activity will be enabling production of craft skill mix, such as leather with wood, textilewith leather, wood with ceramic and other market led innovations not currently available in themarket, which existing vendors do not make it their business to deal with.

INDUSTREE , has mobilized all its existing hand skilled members in Bangalore involved indirect production, into self help groups. These groups will be capacity built to invest in someworking capital for their production. Industree Transform will purchase from these groups. Thisis the way, it is functioning in Viravannalur, and it will expand this strategy to its expansion inBangalore/Rural Bangalore production. The key areas of production it will address first will be

INDUSTREE

TRANSFORM

food

Home +

gifts

Apparel

Exports,

Nat fiber

Natural Fiber,

Metal, Textile

Wood,

Metal

Personal

accessories

Jewellery

Clothes


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the ones that are most crucial for its branding. Currently these are apparel, fashion bags (personalaccessories), Home accessories/gifts and furniture. Food packaging, additionally will be a keyarea, which it envisages quite a direct role in initially. In Year one it projects that it will supplyupto 20% of the revenues of Mother Earth, 30% in Year 2, 40% in Year 3, 60%% in Year 4 and80% in year 5.

INDUSTREE TRANSFORM will have to communicate effectively with

Forward linkages in the value chain = buyers, clients. Communication has to take placeregularly and create trust among potential business partners. Additionally, it will have tocommunicate its story to the public, other stake holders, as well as potential partners. Itwill need to build alliances with a number of NGOs, donors and other supporters in thefield (Ashoka, the Skoll Foundation, the Schwab Foundation, Aid to Artisans, UnitedNations agencies, bilateral donors, ministries, exporter associations, chambers, etc.).

Backward linkages = material suppliers, producers and other service providers. Thesebusiness partners have to be coordinated constantly.

It will need a powerful website, as well as continuous recording of its social impact.

7.2.2 Types of business modelsIndustree Transform will work in various models with producers. Just for clarity it has taken the4 typical business models, studied in this sector, in the ITC draft report. Connecting artisans to

Markets draft report by ITC, Geneva.

7.2.2.1 Vendor ModelIndustree Transform enters business relations with producers/aggregaters but does not influencethem actively or enter into any longer-term contractual relationships. It basically does notinfluence the production processes of these vendors. It ensures that they adhere to double bottomline issues and follow Fair trade procedures. With this target market INDUSTREE

TRANSFORM will not demand constant and managed production innovation. In the simplestform of the vendor model, it visits the producers/aggregators regularly to buy or order existingproduct designs that seem suitable for its collections. For this it requires a base of well qualifiedrural based aggregators that are willing to sell to it

7.2.2.2 Sourcing Model

The sourcing model is workable if it reduces the high transaction costs involved in identifyingsmall producers, unique skills with a wide geographical dispersal, essential for marketpenetration. This is going to be applicable to the food/ gift/souvenir business, that IndustreeTransform will get involved in. Industree Transform will receive concrete market requirementsfrom Mother Earth, whether in the form of requests for changes to products proposed by theproducer or in the form of product specifications drawn up by it. In a simple version of the

sourcing model, Industree Transform will propose selected products developed by producers toMother Earth, which then may then propose certain changes. These are then communicated to thesmall producers. If additional production training is needed by these producers, then IndustreeTransform uses local representatives or staff to do the training and to monitor production. In amore complex version (which comes close to the subcontracting model), Industree Transformwill develop new designs/products together with master artisans/core food producer. If the newidea sells, Industree Transform will launch training and monitoring activities with selectedproducer groups. Similarly, retail customers often provide inputs on new product ideas and


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specifications, which will be communicated by Mother Earth, to Industree Transform which willthen identify and train suitable producer groups.

INDUSTREE TRANSFORM needs to have access to working capital in order to pay smallsuppliers in advance for such concrete orders (most case studies report an advance payment of50%).Retail being a capital intensive business its likely Mother Earth will not be able to afford

this and hence the emphasis of the entire model on producers participation in working capitalgeneration.

7.2.2.3 Sub Contract ModelThe subcontracting model will be mainly applied by Industree Transform for the high-volumebusiness. Here a certain scale of production, following fashion trends, buying seasons withfrequent product innovations and developments is required. Industree Transform will organizeand manage a vast and often dispersed supply base of small producers to meet the sophisticatedexpectations of its clients. In this model it is essential that Industree Transform has access toproduct development in-house. Thus if its producers have spare capacity it develops productswith them, that it markets to Mother Earth, other clients, domestic or global. Besides developingand proposing its own designs, Industree Transform will prototype designs for high volume

production developed by Mother Earth.

In this model, Industree Transform mostly invests in capital expenditure of production facilitiesand encourages producer ownership in working capital. In addition it subcontracts certain worksand orders to its supply base of small-scale producers. Industree Transform needs to have amanagement system in place (e.g. adapted from ISO 9000) in order to manage the flow ofinformation from Mother Earth to the suppliers and back as well as the flow of goods involved inproducing the merchandise. Industree Transform brings a difference to this model by pushingthese facilities to rural environments, in partnerships with producer groups in those areas/individual small entrepreneurs/local ngo, whichever is the most suitable in the location, or acombination of these.

Given the high expectations of its end customers Industree Transform has to use quality assurancemethods in order to manage these complex supply chains efficiently. Industree Transform willhave quality monitoring staff who visit the producers regularly and who train producerrepresentatives in basic quality assurance. Furthermore, Industree Transform may decide forreasons of quality assurance and design protection to assemble and finish products in-house. Thisgives it the added benefit of having the final control over which goods leave the premises for itsclients. The incentives for producer groups to work with Industree Transform will lie in theincome derived from the number of orders provided over the year, favourable financing andpayment conditions, as well as further training provision and special social schemes provided byIndustree Transform/ICF. Once again the introduction of ownership in the enterprise not only ofthe small suppliers to the Industree Transform managed value added units, but also of themembers of the value adding units, will enable smother functioning of the entire value chain.

Industree Transform will link its producers to working capital in order to enable them to producethe merchandise properly and on time. Due to the scale of the operations, Industree Transformwill need to have access to working capital and trade financing based upon the professionalsupport of a commercial bank or finance institution

7.2.2.4 Social Model

In this and the other 2 preceding models Industree Transform will seek to empower smallproducers and to increase their income with the help of commercially viable business operations,encouraging them to invest their earnings in working capital of their enterprises. This approach


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will be in different stages of development in all Industree Transforms models. In this model, theapproach would be in an advanced stage with special emphasis on producer empowerment, andthe fulfilment of social goals as an additional benefit to producers. To enable Industree Transformand ICF to attain success with this model especially, Mother Earth needs to be very professionalwhen it comes to public relations and communication. Their customers want to buy a story they want to know whom their spending will benefit.

Mother Earths extra effort into branding, the development of promotional materials andpackaging, will create better markets for Industree Transform. Products might for example belabelled with a special tag telling the story of the individual artisan who produced the item.Another typical example is specific promotions, such as every product sold resulting in adonation of Rs 50 for the building of a school in the producer village.

A necessity in this model will be for Industree Transform to monitor and communicate this valueto stakeholders, meaning that it will need to publish evaluation reports and success stories.Often, Industree Transform/ICF will look for ongoing support for its social activities and thuswill have to know how to become visible in the development community and how to write projectproposals for different national and international agencies. These activities demand specific skills

and extra time on the part of the management of Industree Transform. Industree Transform willhave to prospect the various big alternative trading organizations, some of which havesubsidiaries or partner organizations in developing countries. Online marketing is important inthis market segment, too. It would eventually have to register with different fair trade onlineshops and set up its own web presence to foster credibility among global fair trade clients.

This model is very similar to the subcontract model. Here Industree Transform will manage thefull range of services in the area of supply chain management with greater involvement of the nonprofit. This comprises organizing the supply of input materials, inbound logistics, productiontraining, quality monitoring, warehousing. The difference lies in the characteristics of the smallproducers who will usually need more support and development than in the case of the previoussubcontract model. Often, in this model Industree Transform trains unskilled workers to become

artisans capable of producing certain merchandise. The development effort is thus considerableand Industree Transform cannot expect to get everything right first time. Case studies and reportsindicate that it takes about five years to set up valid global operations. Hence the huge need for analliance with the non profit.

Small producers are often organized into groups with leaders who are trained by IndustreeTransform/non profit, to organize the workflow and to communicate on behalf of the group.Cooperatives and other participatory business models can become vast operations with severalthousand suppliers being grouped into hundreds of teams or sections. The supply chainmanagement operations will become quite complex and expensive to manage. These overheadswill have to be covered by Industree Transforms sales margin.

Financing for this model is usually a mixture of donor and development project support for socialactivities and commercial bank or client financing support. Profits will often be completelyreinvested into this model.


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7.3 Human Resource PlanThe Industree Transform CEO, is envisaged as a person with one hand in productivity issues andthe other in capacity building, with a well rounded healthy balanced view on market requirementsvs producer limitations. This leader has to be backed by staff with experience in productionoperations, the setting up of production standards, and a focus on productivity issues in hardgoods, apparel and food. This could not possibly be found in one person and would necessitate at

least having three or more, since experience in apparel/accessory production is going to bedifferent from hard goods and food. Currently these three are being designated as aggregators astheir view cannot be limited purely by production issues of a single unit, but a series of diverseunits, spread out geographically.

7.4 Financial Plan

Industree TransformCEO

Food

Aggregator

Home + Gifts

Aggregator

Apparel

Aggregator

Exports,

Nat fiber

Natural Fiber,

Textile, Ceramic.

Wood,Metal, Horn..

Personal

accessoriesJewellery Clothes

Jr

Merchandiser

Jr

Merchandiser

Jr

Merchandiser

JR

Merchandiser

Accounts,Inventory

ICT


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Profit & Loss Summary (Rs. lakh.)

2005 2006 2007 2008 2009 2010 2011 2012 2013

Net Sales 309 364 382 426 347 1,350 3,943 7,413 13,300

COGS 190 180 177 251 251 710 2,044 3,814 6,772

Gross margin 119 184 205 175 97 640 1,899 3,599 6,527

Other Operating Income 8 6 4 2 9 0 0 0 0

Operating Cost 104 144 176 150 345 754 1,581 2,510 3,943

EBITDA 23 46 32 27 (240) (114) 318 1,089 2,584

Less:

Interest (2) (4) (11) (13) (39) (42) (83) (174) (210)

Depreciation (3) (7) (11) (9) (14) (20) (48) (78) (97)

Profit before Tax 18 35 10 5 (293) (176) 187 836 2,277

Net Profit after Tax 10 21 3 4 (293) (176) 187 836 2,277

Balance Sheet Summary (Rs. Lakh.)

2005 2006 2007 2008 2009 2010 2011 2012 2013

SOURCES OF FUNDS

Shareholder's Funds 37 60 77 91 461 284 622 1,458 3,735

Loan Funds 16 54 129 100 81 384 1,010 1,708 1,509

Deferred Tax Liabilities 0 (0) (4) (4) 0 0 0 0 0

Total 53 114 202 186 542 669 1,632 3,166 5,244

APPLICATION OF FUNDS

Fixed Assets 13 60 72 77 184 298 699 1,110 1,314

Investment 0 0 0 0 0 0 0 0 0

Net Current Assets- excl cash 31 50 125 86 243 292 884 1,644 2,732

Cash 8 4 5 23 116 78 49 411 1,198

Misc. Expenditure 0 0 0 0 0 0 0 0 0

Total 53 114 202 186 542 669 1,631 3,166 5,244

Summary-Operational Page 1 of 2


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CHAPTER - 8

DETAILED BUSINESS PLAN OF INDUSTREE CRAFTS FOUNDATION - NON PROFIT

8.1 Executive SummaryRural unorganized production intermediaries have to understand the value chain(s) that servetheir target market(s) in order to be able to develop suitable business models.

Such an exercise was reported from AFE in Ghana when a group of Ghanaian exporters visitedViet Nam in order to understand their competitors value chains and business models. After

returning from the study tour they concluded that they could not compete on mass production ofstandard products because of the more efficient labour force in Viet Nam (the Vietnameseexporters used a business model similar to theirs). Ghanaian exporters needed to put more effort

into product development. Their new target market would be the high-end mainstream markets.(Connecting Artisans to Markets - )

In the triumvirate of retail co, production co and non profit, the non profit needs to position itselfas the innovator, incubator and includer, its aim being to facilitate inclusive growth, whichactually can be achieved through the other two.

8.2 Marketing Plan

8.2.1 Value chain analysis

The usefulness of understanding the specific merchandise value chains in a given region orproduct area, will be the foundation of the non profit. In order to understand how small producersmight best access markets, one first needs to know the processes and actors involved in gettingorders and delivering them to the final client. The value chain settings define the framework fordeveloping market linkages for small producers

Rural Artisans/value adding producers inIndia

Size Needs

All India 40 M Employment, Stable/increased Income,

awareness of the value of their skills, Selfmanagement of their micro enterprises.

Easily accessible artisanal clusters, neartowns, connected to already establishedNGOs/ MFIs/

10 M Employment, Stable/increased Income,awareness of the value of their skills,Selfmanagement of their micro enterprises.

already catering to urban markets.

Easily accessible being women

.25M

.75M

Stable/increased Income, awareness of thevalue of their skills, Self management oftheir micro enterprises.

Description: Masses of artisanal hand skilled people in rural India. Many with a skill and culturalproduct heritage going back thousands of years.

Characteristics: Most from the landless class, lower classes, minority community (Muslim),women and tribals.

Needs: To relearn to work in groups rather than as individuals, as some traditional communitiesdid as guilds, to hone their skills and productivity to meet contemporary urban market needs, toearn better and continuous incomes

How needs met: Suitable domestic urban market created for their skills, through theestablishment of a new artisanal owned social brand. Suitable micro organizational, production


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and working capital facilities created to enable supply to the new brand.

Estimate of size: Rural artisanship is the second largest rural income provider after agriculture*.No accurate data available on size. Definitely the 4thor 5thlargest rural income provider.** Indianartisanal skills, were the basis for all production in the Indian economy pre industrialization, amere 100 years ago. *Basis for the estimation: Office of Development Commissioner

Handicrafts, Ministry of Textiles, Govt. of India. **Sample Survey on Rural livelihoodsconducted by Basix, for their Rural Livelihoods School started in 2004.

8.2.2 Market Positioning:

Alternative Characteristics Size Positioning

Piece ratework fortraders

Sell directly invillage/localmarkets

Traders provide poor wages, individualsnot able to negotiate rates as a groupcould, part time employment, poor familyincomes, often children and womeninvolved in the labor, costs of which notcalculated.

Invest their individual limited working

capital/time, use local natural resourcesand raw materials, make traditionalproducts, for local needs.

9M

1M

Convenient to work fromthe house. No riskinvolved. Irregular work.

Convenient to work in theirtraditional surroundings. If

incomes reasonable,healthy livingenvironments.Dwindling markets,irregular work.

Non-consumptionAgriculturallabor

Village/road/irrigation

works in ruralemploymentschemes

Unemployed

Part time employment, Hard manuallabor, poor family incomes, malnutrition,no education for children

Part time employment, Hard manuallabor, poor family incomes, malnutrition,no education for children

Migrate to towns and cities,live in unhygienic conditions in slums.

Families with single incomes in place,(women) do not strive for a double income,thus depriving overall improvement infamily income.

10M

10M

10M

Part time job security untilthere is crop failure.

Part time job security ifscheme effective in theparticular village

Mother Earth Local production centers, working withknown NGOs whom they have trust andrelationships with.

10,000per year,increasingto 20,000

per yearafter 2years

Striving towards full timework either in localproduction center or athome, 3 times the current

wages, accessible, strivingtowards artisanal selfgovernance


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8.3 Operational Plan8.3.1 Market Segment Analysis

SegmentDefinition

Compelling Reason forAdoption

Reasons for Non-adoption of Product or Service

1.

Traditionalartisans, those

who have beenworking on theircraft

Easily pick up skill upgradation,Incomes substantially increase,

faster

No access to marketsNo access to improved product knowledge

No access to better production facilitiesNo access to working capitalNo access to organized group enterprise

2.

First generationartisans, thosewho have notactively pursuedhand work

Easily learnable skills, such asnatural fiber skills, tailoringskills, food packaging, organicpickles, preserves, etc.Substantial increase in incomes

No access to marketsNo access to improved product knowledgeNo access to better production facilitiesNo access to working capitalNo access to group enterprise

Successful intermediari

Documents

Industree Bplan New