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Galleria D'arte Business Plan
Galleria D'arte Business Plan
Galleria D'arte Business Plan
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Galleria dArte
Presented to:
Mr.Ammar Haider
Presented By:
VITALS
Ayesha Anwar
1587
Muneeb ur Rehman
1627
Nouman Ahmad
1609
Submission Date:
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Introduction
Despite the popularity and high quality of machine-made products, handmade products have not
disappeared even in many product categories where machinal production is common. There are
numerous businesses offering a variety of products for customers to fulfill people needs. But
demand for handmade gift items is substantial. People like to purchase handmade items as gift
because when an item is handmade, a little part of the creator of that piece goes into it. Artists
put their ideas, personality, style, and often blood, sweat, and tears into their work which makes
that work unique. The fashion for handmade items as a gift is Evergreen. People prefer to
purchase handmade stuff as it provides them with a level of individuality which is not available
from mass market retailers. They prefer personalized gifts on lavish items. An informal survey of
Multan showed that there are many House girls who have keen interest in making different
handmade items. They duly create many innovative ideas but unfortunately most of them have
no platform to expose their talent and skills. Thus idea of Galleria dArte is to establish an outlet
that makes available a variety of handmade items under one roof and to provide a platform that
will facilitate both i-e talented house girls and customers. By offering a variety of handmade
products to customers having demand for them we will enable these homemade girls to earn
being at home. In order to check the demand and potential for our idea we conducted a survey in
our target market. We came to know that it is a good time to launch such a project as people
showed a high interest for it.
Name:
Address:
Contact:
info@Galleria dArte.com.pk
Website:
www.Galleria dArtetimes.pk
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Executive Summary:
Idea of Galleria dArte is to provide a large variety of innovative and Galleria dArte handmade
items under one roof. The name of our organization is Galleria dArte which is actually an effort
to provide exceptional items for special celebrations and occasions. It is basically a
manufacturing as well as merchandising business in which we are going to present a wide
assortment of handmade items. We have started our business as partnership business. We are five
partners who share equally in startup capital and hence are entitled to share equally in profits.
Any other need for capital will be entertained by respective bank.
Vision: To become the Galleria dArte house of first choice in our chosen areas by building
beneficial and lasting relationship with customer through a process of continuous improvement.
Mission: To convert the creativity into reality in hand!
Keys to Success:
To succeed in this business we must:
Sell products the customer desires and are of the highest quality.
Provide friendly customer service.
Establish excellent vendor/supplier relations that will facilitate quick shipment of orders.
Advertise and promote our store immediately to take advantage of the current shopping
season.
Continuously review our inventory and sales and adjust our inventory levels based on
detailed records.
Galleria darte will show modest profit from month one. Margins are forecasted to be at 50%.
Sales in the first full year will be slightly over $300,000. We are projecting conservatively a
growth rate of 5% the first three years and 20% thereafter, even though existing art supply stores
are reporting growth of over 30%. We budget conservatively, but have great vision.
Industry Analysis:
Future Outlook and Trends: . First of all we are going to launch it only in the Multan. In
future, in response to its scope we shall expand it throughout province of Punjab. After achieving
this long term object our intention is to enter into international market.
Objectives:
Main objective of Galleria dArte is to glorify the different occasions of our customers by
providing exclusive and quality products. Our modish style reflects a sense of taste that urges the
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customer to express his or her feelings by selecting a gift from a variety of innovative product for
their dear ones.
Short Term Objectives:
Competitive Analysis:
Competitive analysis involves a look on competitors of Galleria dArte and competitive position
of Galleria dArte. While discussing the competitive position of Galleria dArte following
factors can have greatly influence:
Rivalry among competitors is low for Galleria dArte as there are a few competitors in whole
industry .In target market no direct competitor exists so Galleria dArte has a golden opportunity
to capture maximum market share.
3. Substitutability (HIGH) :
Threat of substitute for Galleria dArte is very high. There are alot of substitutes available in
market for products of Galleria dArte. High prices of Galleria dArte than prices of readymade
items in market have lowered switching cost for Galleria dArtes products.
4. Bargaining power of buyer (HIGH):
Bargaining power of the buyer with Galleria dArte is high because of the availability of so many
substitutes in the market.
5. Bargaining power of the Supplier (LOW):
Bargaining power of the supplier is low. Because of availability of large number of suppliers in
the market, Galleria dArte is in better position to defend its interest. There is significant number
of home artisans who are willing to supply their products to Galleria dArte for sale. Galleria
dArtes power to negotiate with them in its own favor is high.
Market Segmentation: Galleria dArtes target segment are all the people of Multan, who love
creativity, which includes upper, middle and lower middle class. Along with this Galleria dArte
has segmented its target segment into the following category:
1. Geographical Segmentation:
Galleria dArte is a start up business; therefore it has geographically segmented its target market.
This geographical region is Multan.
2. Psychological Segmentation:
Psychologically targeting, Galleria dArte is concentrating its focus on Elite class, Middle Class
and Lower Middle class.
Real GDP grew by 4.3percent in 2009-10 as against 2.7 percent last year
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Consumer Price Index (CPI) inflation is estimated to have declined from 20.3 percent
in December 2009 to 13.60 percent in December 2010.
Pakistans per capita real income has risen by 0.4 percent in 2009-10 as against 0.3
percent last year. Per capita income in dollar term rose from $ 1046 last year to $ 1051
in2009-10, thereby showing marginal increase of 0.4 percent.
The industry of handmade items is mostly operated in local environment. And in this perspective
the rate of advancement is slow. However, there is possibility of high advancement in the market
because a big segment of market has psyche of been attracted by Galleria dArte handmade
talent much quickly. Due to that, industry contains more potential and depth to invest in that
business.
As per the rules and regulations of government of Pakistan, there is not any restriction on
establishing such business and the working. Our firm is established according to Partnership Act
1932.
Overall Market Analysis:
Market for different handmade items is widespread in Pakistan. Despite of presence of different
manufacturers that provide a large variety of readymade item, demand for handmade items is
substantial. People prefer handmade items for exchange of gifts or fashion wears because
they provide a sense of individuality and uniqueness. This tendency of people indicates
towards potential and depth to invest in this business.
Although the handmade items industry is spread in all over the country, it is mostly operated in
local environment. There are no big players in market of this industry .Most of operator in
markets are having their businesses as sole proprietorship or partnership. About 70% of players
in Market are sole proprietors. This trend in industry caused Galleria dArte to be a partnership
business. Due to advancement in technology and rapid adoptability of internet, this industry is
being promoted online. Major players in Market use the internet based promotional tools. They
have published their products online to attract the potential customers.
Specific Market Analysis
As mentioned earlier, handmade items industry is mostly operated in local environment so
Galleria dArte has also targeted a small local segment of Market i-e Multan city. Economic
condition of people living in Multan is a good signal for business. Per capita income of people
in Multan is 45000 PKR ,which indicates high purchasing power of residents. Such economic
condition supports skimming pricing strategy of Galleria dArte. Competitive position is also in
favor of our business in market. Although there are many players in the market offering same
products but no one is offering the same things in terms of handmade Galleria dArte ideas. As
there is no such business already existing in market so there is no direct competitor.
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A variety of hands made items are provided under one roof which include:
Services:
Galleria darte have also its Art school which will provide training or assisting services for
making better products for our customers.Any client who have a passion for creating their
products but have lack of skills,we provide expertise or training to them so that they can provide
outstanding quality to our end customers.By this, we will provide a pleasant facility that will
inspire and support our client.
Personnel and Office Equipment:
(JOB SPECIFICATION)
Galleria dArte will be run by the current team, composed of five members. Each of team
members has developed skills in specific areas that will help the firm to reach its goals. There
will not be involvement tremendous financial resources in the human resource field because the
firm intends to remain closely supervised for the first couple of year.
Finance manager
The manager alone looks after all jobs of accounts and approves all investment decisions on the
basis of their logical and analytical analysis.He alone is responsible of recording all revenues and
making all expenses accordingly. He has to maintain all financial statements of the firm, which
are required for auditing.
Marketing Manager
Manager of marketing department is mainly responsible for all advertisement and promotions of
business and to take feedback of the customers. Market surveys will be made by her and changes
according to the demand of customer will be made. The manager will be the final authority to
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take decision of all the matters of that department. The complaints of customers will be discussed
in monthly meeting and the manager is answerable to that.
Supply-chain Manager
Supply-chain manager has duty to deal with the suppliers and contractors for the raw material
and final products. He has authority to take the decision about the matters of that department. He
can change the suppliers and contractors according to the requirements of raw material and
products quality. Maintaining strong Relationships with house artisans who are providing their
products to our business is also her responsibility.
Production Manager
Manager of production department is responsible to supervise all the activities of production
process. He has the authority to evaluate the performance and quality of products being
produced. He is also responsible to approve new designs of products to be produced.
Operational Manager
Operational manager is mainly responsible for all operations that are performed on daily basis.
He is responsible to deal with Customers and the courier company for distribution of products
that are ordered by the customers in other cities. He is supposed to keep a deep eye on
production process by girls and all daily happenings in outlet.
OTHER Employees
Guard
Galleria dArte needs only one guard for its security. He will be responsible of providing
security for outlet during business. He must have training to use weapons and retired army men
will be preferred.
Sweeper
One sweeper will be hired. He is required to maintain the cleanliness of whole outlet.
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Office Boy
An office boy will assist operational manager in her routine business works especially for
performing outdoor tasks.
ORGANIZATIONAL PLAN
Form of Business:
Galleria dArte is a partnership business in which 5 partners are contributing towards capital and
sharing the proceeds of business. It has been established on base of Partnership act, 1932.
PARTNERSHIP DEED:
The partnership deed includes the basic agreement between the partner explaining their duties
and liabilities. It also explain the which function will be performed by whom.
Members
We are five main members of the partnership firm who shares equally in the capital and profit.
Duties and Responsibilities
Duties and responsibilities of each member are assigned according to the interest and
qualification of each of the member. Other criterion is that, if someone has specialized in some
field then he will be proffered. Additional benefits and remuneration will be paid on giving extra
services and performing additional work not included in the basic job specification.
Liability
Liability of all the members is unlimited. Personal property will also be held liable to pay the
debts. This clause is included to maximize the interest of all members in the venture. The more
the interest is the more the effort will be added by the members. All the members have the basic
right to point out the steps taken by other members in the meeting. And the others have to answer
in a reasonable manner.
Decision criteria
There is a decentralized approach in decision making. Every member is free to take decision in
his relevant department without the consent of others. But decision about the whole firm cant be
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taken without the consent of every member. Special meeting will be arranged and the majority
decision will be approved. The decision about working of the firm required the acceptance of
three out of five while the major decision about the firm like big investment, changing the form
of business required four out of five members acceptance.
Termination of partnership
If any partner wants to leave the firm she will also be held liable in the case of insolvency of the
firm for the year, if any. This clause is added to make strong the firm and to avoid any kind of
fraud.
Allocation of assets/ repayment
The payment of all invested capital will be paid in installments to leaving partner. The maximum
time for repaying all amounts will be six months. The will be no claims on the revenues and
profits from the date he left the firm. There will be revised partnership deed after one year.
PRODUCTION PLAN
Manufacturing:
Our products will be manufactured in our production outlet. There will be a separate portion
behind outlet that will serve as production area. We will produce the products our self. A joint
contribution will be made by all five members for production process. All of girls will work
directly under authority of operational manger. Galleria dArte ideas for innovative products will
be explored through brain storming sessions.
Production process of Galleria dArte involves following steps:
For making cards and shopping bag, chart paper is essential thing. Satin ribbons, shimmering
bows, Laces, glue and other material will also be needed to make glorious products. Including all
these, other necessary accessories will be purchased from our regular suppliers in bulk so that
cost minimization can be made. Necessary raw material required for making different types of
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Dough will also be purchased. To produce unique styles of candles, wax gel will be purchased
in bulk along moulds of different designs.
Other than above material, waste jewelry accessories will be acquired to be used as base for
handwork.
Production Process
Cards of inspiring designs, gift boxed of various sizes and unique wedding boxes will be made
through handwork and using appropriate stuff.
Dough will be kneaded in quantity enough for use in whole months. Once the dough is prepared,
it will be kept in special greased containers. Different jewelry items will be made using moulds
of various sizes. Artistic designing will be made on these items using dough flowers.
Using handwork and special techniques wax gel will be converted into candles of different
designs and will be embellished using different accessories.
Packing:
Different gift and jewelry items will be made available in striking packing. Galleria dArtes
monogram will be printed on each items packing going to be sold at outlet.
Merchandizing:
Galleria dArte has also planned to acquire finished products from house hold artisans and to sell
them on reasonable prices for earning profit for both parties. Thus Galleria dArte is not only
earning for itself but also serving as a platform for those innovators who want to commercialize
their handmade products. Supply Chain Manager is responsible to seek and develop good
relations with these suppliers.
Strategic Production Resources
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Designs and artistic techniques of production are the basic and primary assets of Galleria dArte.
With these two resources we will be able to develop the most unique and genuine variety of
products in the marketplace.
Firms Galleria dArte management is also a strategic resource for Galleria dArte. Management
team is required to be innovative and has a passion to pursue opportunities related to hand-made
items. As the business grows we will carry on developing new designs and will strive to hire
people who also possess the drive to continue the Galleria dArtes goal to develop the new
designs and bring innovation.
MARKETING PLAN
The most important plan for a new starting venture is a marketing plan because without the
marketing plan, a business can never exist. The marketing is a main portion, and the success of
any venture heavily relies on its market strategies.
Galleria dArte is going to make its customers aware through efficient marketing plan that we
value our customer at each and every point. Through effective marketing strategies it will be
realized to customers that if they want to add seven colors of rainbow in the precious moments of
their life then they must have the spell bound charm of Galleria dArte. "Galleria dArtes
marketing efforts focus on making its customers realize that:
We are offering variety of imaginative hand-made articles that can embellish their special
movements
Our ideas are Galleria dArte and innovative that is what others are lacking.
We are going to establish a new trend in that society by giving variety of handmade
ingenious items under one roof.
PRODUCT
A list of magnificent products of Galleria dArte involves following product lines:
Handmade Cards
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Handmade Candles
Handmade Jewelry
Handmade Bags
Handmade Rugs
Handmade Embroidered Clothes
Handmade Food items
Handmade Baskets
Handmade Cards
Handmade greeting cards in a variety of styles and sizes are offered for special occasions.
Unique ideas are used to embellish the cards for making special movements more special.
Birthday cards, wedding cards, anniversaries card, friendship cards and beautiful cards for many
other special events are offered.
Wedding Boxes
Gorgeous Boxes of different sizes to carry different things that are usually used in wedding
ceremonies as gifts are offered by Galleria dArte. Wedding gifts are always very appealing
when they come in adorable packaging. Our unique wedding gift boxes will surely do the job of
impressing customers while reflecting their unique style.
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Handmade Candles
Decorative candles are uniquely versatile decor items that add a new look and spark to our home
and our special events as well. Buying the Decorative candles for your home or for gifting to
someone special, is the best thing you can do to please yourself. Beautiful candles with
innovative designs are splendid offer by Galleria dArte.
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Handmade Jewelry
Flashy & filled with stylish & elegance designs, different items of jewelry are offered. Rings, ear
rings, bangles and necklaces are included in offered jewelry item. All these items are
manufactured using different moulds and dough flowers.
Handmade Baskets:
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Handmade Food:
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Handmade bags:
PRICE
Customers decision to purchase a product is greatly influenced by Price tag placed on it.
Galleria dArte has assigned reasonable and justified prices of its products which may realize the
customers that they have made their moments cherished in a unique way in very cheap prices.
Pricing Objectives
Galleria dArte is a new business in market with unique and innovative ideas. It wants to have
high growth rate hence it has to set that price for its product which gives maximum possible
profits in the initial couple of years.
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Galleria dArtes handmade products are more expensive than those from a factory assembly
line, but, for very good reasons. The extra time, effort, passion and expertise that goes into its
handmade products are what make them worth the extra price to buyers.
PRICING STRATEGIES
In pricing, Galleria dArte is focusing in the following strategies:
Market Skimming Strategy
Galleria dArte is using market skimming strategy in which it is offering high quality and
Galleria dArte products on slightly increased prices than prices factory assembly line products.
Galleria dArte want to have maximum possible profit through introduction of its Galleria dArte
and unique ideas.
Product Bundle Pricing
In order to move stock that is kept as unsold inventory, Galleria dArte will use Product bundle
pricing strategy. It will combine several products that have left behind in stock in the one
package and will offer them on reduced rates so that potential loss of unsold inventory can be
avoided.
Value Based Strategy
For the pricing of products, Galleria dArte is following the value based strategy. In order to
cover up the cost and to gain maximum possible profit, Galleria dArte has decided to take 40%
markup on cost price of each product. Such high rate of mark up is set on base of effective value
of the customer for handmade items.
PRICING STRUCTURE
Name of items
Greeting cards
Wedding Boxes
Gift Boxes
Candles
Decoration pieces
jewelry
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Shopping bags
Embroidered Clothes
Food Items
Bags
Price
100-150
200-250
150-200
350-400
500-2000
500-1000
100-150
2000-4000
500-1000
1000-1500
Mark Up
35%
35%
35%
35%
35%
35%
35%
45%
35%
35%
PLACE
Galleria dArte has planned to acquire a Shop on rent in Gulgasht, Multan. It is attracting
location of city. The main reason behind selecting this location is this, it is growing area for all
branded shops and it is now one of the best shopping place in Multan.
The shops like Warda, Diners, . Crossroads, Ideas, Sana Safinas and many other brands are by
side with our outlet. So there are many chances that people will visit our outlet along their
shopping.
Address:
Gulgasht Market ,Multan
Contact:
Email:
info@Galleria dArte.com.pk
Web site:
www.Galleria dArteitmes.pk
DISTRIBUTION CHANNELS
Initially Galleria dArte is operating only from one outlet, so it doesnt have any complicated
distribution channel right now. Galleria dArte is mainly using the following approaches for
distribution:
Direct Selling
Galleria dArte will directly sell its products to target consumers. First it takes the raw material
from the suppliers. Using that raw material a variety of innovative and appealing products will be
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produced on the outlet of it by its skilled staff. These products are sold to customer when he/she
visits the outlet. In direct selling following model is used by Galleria dArte:
Suppliers
Creative
End
consumers
Courier Service:
Galleria dArte will also conduct business online. Due to advancement in technology and rapid
adaptability of internet it has been crucial for it to expand its business activities over internet.
Online orders in response of effective electronic advertisement will be received and shipment of
these orders will be made through Courier Company.
Galleria dArte has following model for online trading:
Online
Orders
Shipment
End
consumer
s
Online
Receipt
PROMOTION
Galleria dArte will use Marketing communication strategy for promotion of its products. This
Strategy involves promoting heavily to potential customers which will create a demand that will
pull the products through the distribution channels. A handsome amount is set aside from
financial resources for heavy promotion of business in starting years. For promotional activities
unique logo and corporate colors will be used in all means communications.
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Following promotional tools will be used to build Brand image of Galleria dArte in mind of
customers:
ADVERTISING
Brochure
Brochures describing product specifications of Galleria dArte will be designed. Galleria
dArtes offering along with its unique logo will be printed on it. These brochures will be
distributed door to door with help of local news papers including:
Jang
Nawa e Waqt
Jazba
Hoardings
The location where well use hoardings for advertising of outlet along with estimated budget is
given bellow:
Hoarding Campaign for the First Month
LOCATION
QTY.
SIZE
RATE
Cantt
01
6024
(RS.)
10,000
Abdali road
01
6024
10,000
9 no.
01
6020
10,000
Total
03
30,000
Internet marketing
Today most effective way of advertisement is through internet. Galleria dArte has developed its
own Website at which products are published and online orders are taken. Other than developing
its own website, Galleria dArte has planned to promote its business through social networking
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sites. Recently there is a great trend of public to move towards these sites to establish social
networks.
Following are some a web point at which Galleria dArte has decided to promote business by
giving business ads.
Give Aways:
Other than giving ads, Galleria dArte has planned to manage different online contest so that
maximum people may be attracted to web page. Exclusive surprise gifts will be given to winners
of these contests.
Transport advertising:
Galleria dArte logo along its message will be promoted through transport advertising. Such
medium for promotion is selected for conveying message to far areas of target market.
Broadcast Advertisement:
These days use of radio has been increased in young generation. In order to convey business
message to them, Galleria dArte has decided to give an ad on FM Awaz 105. Other than radio
advertisement ads will also be given on local cable channels.
Exhibition:
For bringing our offerings into knowledge of potential customers, Galleria dArte has decided to
participate in Exhibitions which are managed by chamber of Commerce for support of SMEs.
Note:
Here it should be noted that any combination of the above mentioned promotional channels will
be used depending upon the promotion costs involved therein.
FINANCIAL PLAN
Galleria dArte being a new business needs a high capital investment to recover its expenses like
grand opening,Royal galleria darte Store,advertisements, salaries along with the cost of
production. Thus Galleria dArte is investing 625,000 PKR as its initial capital investment.
Sources of funds:
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Galleria dArte has five active partners, who are fulfilling the whole capital requirements to meet
its startup cost. Capital Structure of Galleria dArte includes only Equity. No debt is included to
raise funds because it has an extra burden of expenses as interest, which results in lower profits.
Equity Structure
Names
Partner 1
Partner 2
Partner 3
Partner 4
Partner 5
Capital Invested
1.25 lac
1.25 lac
1.25 lac
1.25 lac
1.25 lac
Sales
(Estimated)
+Ending
Inventory
Units
Available
For Sale
-Opening
Inventory
Units To Be
Produced
Material
Laces
FOH
Total
JA
N
FE
B
MA
R
AP
R
MAY
JU
N
JU
L
AU
G
SE
P
OCT
NO
V
DE
C
Total
100
130
140
145
145
155
160
165
175
185
190
200
1890
10
20
25
20
15
25
25
30
35
40
40
45
110
150
165
165
160
180
185
195
210
225
230
245
10
20
25
20
15
25
25
30
35
40
40
110
140
145
140
140
165
160
170
180
190
190
205
1935
Page | 25
FEB
2940
3360
6000
1230
MAR
3045
3480
6500
1302
APR
2940
3360
6000
1230
MAY
2940
3360
6000
1230
JUN
3465
3960
7000
1442
JUL
3360
3840
6500
1370
AUG
3570
4080
7000
1465
SEP
3780
4320
7000
1510
OCT
3990
4560
7500
1605
NOV
3990
4560
7500
1605
DEC
4305
4920
8000
1722
Total
40635
46440
80000
167075
167075
1935
86.34
Rent
Salaries
Dep
Advert
Courier
Total
JAN
20000
11500
5000
3000
500
40000
FEB
20000
11500
5000
5000
1500
43000
MAR
20000
11500
5000
6000
2000
44500
APR
20000
11500
5000
4500
1000
42000
MAY
20000
11500
5000
4500
1000
42000
JUN
20000
11500
5000
5500
1000
43000
JUL
20000
11500
5000
5000
1500
43000
AUG
20000
11500
5000
5500
2000
44000
SEP
20000
11500
5000
5500
1500
43500
OCT
20000
11500
5000
6000
2000
44500
NOV
20000
11500
5000
5000
2000
43500
DEC
20000
11500
5000
4500
2000
43000
Total
240000
138000
60000
60000
18000
516000
Rs 756000*
-CGS
163189
Gross profit
592810
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Rent
240000
Salaries
138000
Depreciation
60000
Advertisement
60000
Courier expenses
18000
76810
Page | 27
Amount
Rs
125,000
100,000
50,000
5000
25000
35000
340,000
60000
300000
60000
Liabilities
Amount
Rs
Owners Equity
Partner 1
Partner 2
Partner 3
Partner 4
Partner 5
Total Capital
125000
125000
125000
125000
125000
625000
Net Profit
76810
280,000
100,000
240,000
3,886
50,000
27,924
701810
701810
*Galleria darte dont have any account payable because we will pay cash on the daily basis.
PRO-FORMA CASH FLOW STATEMENT
CASH FLOWS STATMENT 3RD YEAR 2011-2012
76,810
60,000
Operating Profit
+Depreciation
Less cash flow from Operating activities
Stock
Bank
Building security
Cash flow from capital Expenditure
Gas generator
Fixtures
Equipment
Furniture
Digital camera
Computer
Cash flow from Financing
Share capital
Net cash in hand
(3,886)
(27,924)
(100,000)
(125,000)
(100,000)
(50,000)
(5,000)
(25,000)
(35,000)
625,000
50,000
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
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OPPORTUNITIES
THREATS
Decreasing purchasing power of people due to political instability in country.
Possibility of new entrants in the market due to low entry barriers.
Rapid use of readymade gift items in the society.
If any other outlet of handmade products is going to open then our market share will
reduce
Management Risks
Marketing Risks
Operational Risks
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Financial Risks
Management Risk:
In this risk we realize that there may be any dispute in the management team due to any
unforeseen reasons which may result to terminate any of the members.
Remedy:
In this case when any of the management team members leaves the firm she is not entitled to use
the name of the firm. She cannot start the same business with any other name. Such risk is
attempted to be controlled by including exclusive clauses in partnership deed.
Marketing Risk:
In case of marketing we realize that there may be any fault in our marketing plan due to which
business can suffer.
Remedy:
For the backup of this risk we have different marketing plans with flexibility, as if in any case
plan A does not work the plan B will be executed.
Operational Risk:
There may be a risk which can disturb the operations of the business such as production. There
may be load shedding problem etc
Remedy:
For minimizing this risk we have adopted proactive measures by having firms own own
generator.
Financial Risk:
We realize that in case of termination of any member there is a risk of finance that she may take
her equity away which causes the business to suffer. Moreover startup capital may be proved
insufficient to cope with un expectancies.
Remedy:
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To avoid this risk we have made certain clauses in our agreements that if any member decides to
leave the firm she will not take her equity out of the business immediately. The time period to
pay back the equity will be minimum 6 months. To meet unexpected financial needs, Galleria
dArte has asked for various sponsors.
EXIT STRATEGIES
Galleria dArte, after analyzing every risk and exit ways of the business, has devised an exit
strategy in case our idea of introducing handmade items does not work. The exit strategies of
Galleria dArte are as follow:
Legal documents of partnership will be signed by the partners that partnership will not be
resolved until 3 years.
After five years if any partner wants to exit then he has to inform to the organization at
least 6 months before.
If any partner exits from the business, she will get his or her share after 6 months
In case of losses every partner will be just liable for her share in organization.
In case of winding up the business amount received from sale of asset will be divided
among partners equally.
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