BUSINESS PLAN

Submitted in partial fulfilment of the requirements

for the award of the degree of
BACHELOR OF COMMERCE
To
Guru Gobind Singh Indraprastha University, Delhi

Under the Guidance of Submitted by

Sakshi Bhawnani Kajol Kumari
Faculty, KCCILHE BCOM(H)-V
Enrollment No. 04127488819
Batch 2019-22

KCC Institute of Legal and Higher Education, Greater Noida

Affiliated to GGSIPU (Guru Gobind Singh Indraprastha University),
Dwarka, New Delhi – 110037
 Bizhive Presents ThinkTank

Contents
 Executive Summary
 Company Description
 Market Research
 Product/Service Line
 Marketing & Sales
 Finance
 Others
Executive Summary

Product/Service

The Art Sphere Gallery School of Art (Art Sphere) began its operations in September of this
year after expanding from its former back room into the full 787 square foot facility on the
corner of Main and 1st Streets in Birmingham, AL. Since September the business has grown
substantially, but in an unordered way. This business plan is being written to set a rational
framework for growth to maximize profit potential. Successful realization of this plan will
produce increasing profits annually by the end of the third year.

Customers
The targeted customer for this business will be from all age group as there is no age creating
art for the artists. The greatest opportunity for the Art Sphere is through the teaching of art to
paying customers. The capacity to do this is limited in size to approximately eight persons at
one time. The most important objective is to successfully penetrate the 9 A.M. to 3 P.M. day-
time market. This is the largest portion of Art Sphere’s teaching capacity (61%). This offers
without any doubt the most important element in the future development of profits. The
prime objective is to gradually increase penetration of this market sector from its present
near zero level to 90% of full capacity by the end of second year.

As the afternoon market sector (22% of total capacity) is already nearly fully booked, a
secondary objective is to fill the evening hours (Monday through Thursday) 7:30 P.M. to
9:30 P.M. These eight hours are easier to fill. This goal should be reached by the end of
Month 5.

A further objective is to separate art supplies from art lessons, so as to make the sale of art
supplies a separate profit centre.
Future of the Company
Keys to success and critical factors are, in order of importance:

 Penetration into the day-time market for art lessons.

 Completing some alterations to premises.
 Making changes to certain operational and pricing practices.
 Making sale of art supplies an additional profit source.
 Company Description

Mission Statement
Develop creative, critical and compassionate lifelong learners through innovative curriculum
and exemplary teaching that inspire self-discovery. Draw upon the collaborative research
strengths to create meaningful contributions that engage with and empower, individuals and
communities, locally and globally.

Founding/Principal Members
The company will be registered on the name of kajol and there will be other members for the
execution of the works of different field such as teachers who will be handling the learning
process for the students of the school, a person will be their to handle day to day operations
etc.

Legal Structure
The company will be operated as one person company in future.
 Market Research

Name of the industry-Indian art industry

Art is the process or product of intentionally arranging objects in ways that influence and affect the senses,
emotions, and/or intellect. Art includes an extensive scope of activities, creations, and forms of expression.
The art industry consists of art galleries as well as art auction houses that engage in the sale of limited
edition and original works of art. These companies buy artwork either from the artist or from an individual
owner and then proceed to sell the art to consumers of the product.
Scope & Impact of the Industry on Indian Economy
In-demand products include sculptures, drawings, photographs, original pictures, and prints. Popular
subjects in the art industry include marine life, wildlife, florals, landscapes, figures, and animals. Regardless
of the subjects, when handling original artwork several factors must be taken into consideration:
authenticity, quality, condition, and rarity. These characteristics are imperative when assessing the value of a
piece of art.

Dealers may also offer a variety of collectibles, books, artistic supplies, and additional services. These
services may include framing, delivery, and hanging. Certain companies may offer an appraisal of artwork,
and high-end dealers may assist museum curators and individual collectors in locating certain pieces of art
or developing collections.

Art dealers, galleries, and auction houses compete with many other retailers, including home décor stores
and mass merchandisers. As demand for art products is propelled by consumer spending and trends in
decorating, the profits these companies accrue rely on the merchandising and marketing strategies they use.
Larger companies dealing in art have an advantage, but smaller companies also effectively compete in the
art market by offering unique products, providing excellent service to their customers, or focusing on
specific local markets.

Detailed Description of Customers

The offerings by Art Sphere require, by their very nature, an investment of time on the part
of the purchaser. Three customer groups have been identified based on the availability of
time on their part:

 School-aged (over 10 yrs).

 Retired/non-working.
 Working/evening class.

This accounts for virtually everyone in Birmingham, AL older than 10 yet younger than 75.
It would be more accurate to state that these people will seek, during their respective free
hours, some hobby, some pleasant, time-filling activity, or other form of relaxation.
Market Segmentation

Market Group Time Slot Size of Market

3:30 P.M.
School-Aged (Over 10 years) to 5:30 1,666
P.M.

9 A.M. to 3
Retired/Non-Working 2,645
P.M.

7 P.M. to 9
Working/Evening Class 12,042
P.M.

All time
TOTAL 16,353
slots

The total figure of 16,353 accounts for virtually everyone in Birmingham, AL older than 10
yet younger than 75. Even though there are people older than 75 and younger than 10 who
actually take art lessons, the market analysis should not be taken to mean that 16,353 persons
in Birmingham, AL are in search of art instruction.

Market Analysis
Potential Customers Growth CAGR

School-aged 1% 1,666 1,683 1,700 1,717 1,734 1.01%

Retired/Non-work 7% 2,645 2,830 3,028 3,240 3,467 7.00%

Working/Evening 9% 12,042 13,126 14,307 15,595 16,999 9.00%

Class

Other 0% 0 0 0 0 0 0.00%

Total 7.94% 16,353 17,639 19,035 20,552 22,200 7.94%

 
Target Market Segment Strategy

Our ultimate goal is to fill all of our scheduled class offerings and fully utilize our newly
expanded teaching space. To do that we have looked at the daily time periods when we
wished to teach, and then identified the market segment most likely to seek art instruction
during those times. We then tailored our class offerings to appeal to the interests and life
styles of those people.

We then priced the classes competitively for adults and children and then grouped the
lessons into prepaid monthly blocks to fit peoples’ various budgetary needs
Main Competitors

College of Arts, Delhi University

College of Art is an institution that emphasizes practical work in the classroom or studio,
prescribed theory subjects and research in selected fields. The faculty that guide and train the
students include artists, painters, designers and sculptors of both national and international
stature. Their expertise and experience in the contemporary world of fine arts enrich the
students with knowledge in their respective fields of practice. The Annual Art Exhibition
held by the college witnesses the endeavour to educate the students on how to make the best
of their lives. The cultural events performed during the exhibition include contemporary as
well as traditional aspects of Fine Art. Visit Official website –

2. Faculty of Visual Arts, Banaras Hindu University

The Faculty of Visual Arts is one of the leading institutions in the university and offers
undergraduate, postgraduate and research programmes in various fields of the study. There
are five different Departments in the Faculty of Visual Arts that include Painting, Applied
Arts, Plastic arts, Pottery and ceramics, and textile designing. Reputable alumni of the
faculty who hold distinguished positions in fields of designing, painting and sculpting set an
example on how the institution cultivates the individual creativity of the students that are
directed to bring a change in the society. Visit Official website –

3. Faculty of Fine Arts, Maharaja Sayajirao University

The Faculty of Fine Arts of Maharaja Sayajirao University was established in 1950 and
focuses on developing the individuality of the students with knowledge of both Indian and
Western traditions and philosophies. The teachers strive to provide attention in accordance
with each of the student’s individual creative and cognitive abilities as well as methods of
expression. The department has its own specialised libraries, it arranges film shows and
visits to exhibitions and museums invites honourable artists, holds constructive workshops
and other innovative programmes. Its consistent mentoring aims at nurturing the students to
incorporate in them the best of knowledge and practices from cultures all over the world and
make responsive and perceptive individuals out of them. Visit Official website –

4. Faculty of Fine Arts, Jamia Millia Islamia University

When the Faculty was founded back in 1951, in the post-colonial scenario of the nation, it
was regarded as an imperative to study and train in arts and crafts which would help in
acquiring a deeper understanding of life in the contemporary world. By integrating modern
methods and techniques, education is imparted. Commitment is conferred upon the growth
of an individual by bringing coherence the diversity of both eastern and western traditions.
As of present, the faculty comprises the departments of Applied Art, Sculpture, Painting, Art
Education, Graphic Art and Art History and Appreciation. Amidst an atmosphere of
discovery, creativity and exploration, the departments offer a range of graduate and
postgraduate programmes, including the country’s first and only Master’s degree in Art
Education.

5. Chamarajendra Academy of Visual Arts, University of Mysore

University-of-Mysore. Mysore University established the exclusive college that would aim
to propagate the Fine Arts. The University of Fine Arts under the University of Mysore was
established in the year 1981 an academic institution focusing on performing arts. The college
has a library with a well-catalogued collection of about fifteen thousand books and journals,
which serves among the most valuable libraries in the state that pertains to the visual arts.As
the pivot of fine arts activities in the University of Mysore, the college protects the rich,
cultural heritage of Performing Arts. Academic courses offered include undergraduate,
postgraduate and PhD programmes in Visual Arts, namely Painting, Graphics, Sculpture,
Applied Arts, History of Arts and Photography and Photojournalism.
Company Advantages

Artists who teach classes

 To supplement or support their own fine art endeavours.

 Sideliner businesses.
 Poor setting, usually taught in “extra” or crowded space.
 Limited class offerings.
 Prices vary.
 Private tutors

 Very focused instruction for serious students.

 Expensive.

Arts associations/museums

 Offer classes to members or the general public.

 Limited offerings.
 Often taught by volunteers.
 Prices generally affordable. May vary with membership.

Galleries

 Employ artist instructors – classes are marketing tool.

 Sponsor classes by artists currently displayed.
 Class offerings often limited to gallery’s genre.
 Prices vary.

Schools and Colleges

 Classes may be academia focused.

 Travel may be necessary.
 Time slot offerings may be limited.
 Long term commitment to class.
 Prices may vary.
 Product/Service Line

Products and Services

The ArtSphere is expanding its offerings. Our primary focus is now on offering art
instruction classes. We will tailor our classes by market segment and time of day, providing
instructional opportunities during the morning and mid-day, after school sessions, and
evening classes. We will have a wide range of art supplies available to complement student
sessions as well as for sale to the general public. Additionally, the owners will continue to
show and sell their own work in the Gallery, as well as produce commission portraits and
other work.

6 Months Diploma in Sketching & Oil Painting - Regular/Part time

1 to 3 Months Certificate Hobby Course (Regular and Weekend)

One Year Diploma in Fine Arts-Regular/Part Time-Level-3

Two years Advance Diploma in Fine Arts - Regular/Part time

Pricing Structure
6 Months Diploma in Sketching & Oil Painting - Regular/Part time -30,000
1 to 3 Months Certificate Hobby Course (Regular and Weekend)-18,000
One Year Diploma in Fine Arts-Regular/Part Time-Level-30-45,000
Two years Advance Diploma in Fine Arts - Regular/Part time-60,000

Intellectual Property Rights

Your plans for Trademark/Patents/Copyright for Logo etc./ Domain name registration
 Marketing & Sales

Growth Strategy

The ArtSphere recognizes that the real product it sells is different from the art instruction
given. Helena Rubenstein is quoted as saying, “in the factory we manufacture cosmetics, but
the product we sell is called ‘hope.'”

This thinking holds true at the ArtSphere. The product sold is viewed differently by different
buyers. A serious young student with potential may need special help in compiling his
portfolio when applying to art school. A retired 70 year-old woman may be seeking a fun
way to fill up an otherwise empty day. A stress-ridden executive may be seeking solace and
relaxation. Encouragement, technical advice, stress-relief, escape from loneliness, self-
expression, etc are just some of the products sold by the ArtSphere. The owners of the
ArtSphere recognize that art lessons can be had at less than $5.00/hour in some state college
evening courses. The ArtSphere cannot attempt to compete with these prices. It is only by
tailoring the “real” product sought by customers that we will create and maintain a high level
of sales.

Competitive Edge

There are many facets of the ArtSphere which make it a top-notch competitor in
the art class business, a few are outlined below:

 All day multi-time slot schedule.

 Classes tailored to market segment.
 Two instructors.
 Dedicated instructional space
 Art supplies available on-site.
 Gallery venue for student artwork exhibits.
 High profile location.
Marketing Strategy

When comparing the market segment table below with ArtSphere’s available capacity, it is
evident which direction the marketing thrust should take:

Time Instruction
Market Group Capacity
Slot
Hours

3:30
88 (11 hrs X 8
School-Aged (Over 10 P.M. to
1,666
yrs.) 5:30 easels)
P.M.
9 A.M.
Retired/Non-Working to 3 2,645 240 (30 hrs X 8)
P.M.
7 P.M.
Working/Evening Class to 9 12,042 64 (8 hrs X 8)
P.M.

The school-age market group with its potential market size of 1,666 has within the space of a
couple months of operation taken up nearly all the limited 88 teaching hours of capacity for
that time slot with some spill-over into the smaller evening class time period. This latter time
period in the evening should be the easiest to fill considering its potential market of 12,042.

Clearly, the marketing strategy at ArtSphere needs to be concentrated on the biggest time
slot, the 9 A.M. to 3 P.M. period. As of this writing, nearly all of the 8 easels are unoccupied
Monday through Friday.

Sales Strategy

The ArtSphere has no sales force outside of its owners, Paul and Hannah, who will close the
deals with interested customers created by actions of the marketing strategy. Many of the
initial contacts will come via telephone inquiries responding to the offer of a free art lesson.
Whoever takes the call should draw out the calling party and jot down a brief profile.
Developing a sixth sense for the goals of the customer (stress relief, find new hobby, etc.) is
key. If a customer is looking for stress-relief, then peaceful surroundings are essential. That
potential customer should not be given his or her first free lesson during a crowded time slot,
but rather when things at the studio are quiet and less active. Someone looking to escape
boredom on the other hand should be scheduled when there are more people in the studio. A
conscious decision also needs to be made concerning which teacher the caller is likely to
relate to. If a caller does not come in for the offered free lesson, a follow-up call should be
made by one of the owners. There is a direct relationship between the number of free lessons
given and the number of people who will sign up.

Directly upon completion of the free lesson, an abrasive effort should be made to effect a
sign-up. If the person does not sign up, a follow-up call should be made. If Paul gave the free
lesson, Hannah should make the follow-up call. It could be that the potential customer will
respond better to the other teacher.

Walk-in inquiries should be handled in a similar fashion. Brochures containing particulars

and an up-to-date price schedule should be available in a box by the door. Because of the
studio’s high-profile location with large picture windows facing onto a busy pedestrian area,
it is common for passers-by to look in. Good salesmanship will result is developing an
ability to differentiate the interested from the merely curious. It is important not to be shy
with interested parties. If the same person is noticed frequently looking in the window, or
picks up a brochure and scans it, one of the owners must make a sales approach, even if it
means opening the door and inviting the person in. Offer a cup of coffee, try to form a rough
profile and offer to set up a time for a free lesson.

Communicate with the Customer

We will opt following ways to communicate with customer

 Classes will be offered in many time slots throughout the day and evening, with
instruction tailored to the customers.
 A wide variety of art supplies will be available for purchase by students during their
classes, and by the general public.
 Assigned volunteers will continue her commission portrait work and exhibit in the
gallery.
 Senior staff will continue to produce his artwork and exhibit and sell in the
gallery.Weekend gallery exhibitions of owners’ and students’ work will encourage the
sale of finished works and supplies and registration of new students.
 Financial Plan

The following subtopics present our financial plan.

Break-even Analysis

The following table and chart summarize our break-even analysis.

Break-even Analysis

Monthly Revenue Break-even $6,673

Assumptions:

Average Percent Variable Cost 11%

Estimated Monthly Fixed Cost $5,942

Projected Profit and Loss

Our projected profit and loss is shown in the following table and charts.
Pro Forma Profit and Loss

Sales $129,920 $232,048 $250,848

Direct Cost of Sales $14,230 $27,666 $29,766

Other $0 $0 $0

Total Cost of Sales $14,230 $27,666 $29,766

Gross Margin $115,690 $204,382 $221,082

Gross Margin % 89.05% 88.08% 88.13%

Expenses

Payroll $36,000 $52,800 $52,030

Sales and Marketing and Other $11,129 $21,626 $23,876

Expenses

Depreciation $1,892 $2,067 $2,067

Leased Equipment $0 $0 $0

Utilities (Gas & Elec.) $1,642 $1,642 $1,642

Insurance $540 $540 $540

Rent $14,700 $14,700 $14,700

Payroll Taxes $5,400 $7,920 $7,805

Other $0 $0 $0

Total Operating Expenses $71,303 $101,295 $102,660

Profit Before Interest and Taxes $44,387 $103,087 $118,423

EBITDA $46,279 $105,154 $120,490

Interest Expense $0 $0 $0
Taxes Incurred $15,508 $36,080 $40,954

Net Profit $28,879 $67,007 $77,468

Net Profit/Sales 22.23% 28.88% 30.88%

Projected Cash Flow

The following chart and table show our projected cash flow.

Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $129,920 $232,048 $250,848

Subtotal Cash from Operations $129,920 $232,048 $250,848

Additional Cash Received

Sales Tax, VAT, HST/GST $0 $0 $0

Received

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $129,920 $232,048 $250,848

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $36,000 $52,800 $52,030

Bill Payments $57,136 $111,363 $119,017

Subtotal Spent on Operations $93,136 $164,163 $171,047

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of Current $0 $0 $0

Borrowing

Other Liabilities Principal $0 $0 $0

Repayment

Long-term Liabilities Principal $0 $0 $0

Repayment

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $93,136 $164,163 $171,047

Net Cash Flow $36,784 $67,885 $79,801

Cash Balance $36,784 $104,669 $184,470

Projected Balance Sheet

The following table outlines our projected balance sheet.

Pro Forma Balance Sheet

Assets

Current Assets

Cash $36,784 $104,669 $184,470

Inventory $2,267 $4,407 $4,741

Other Current Assets $0 $0 $0

Total Current Assets $39,050 $109,076 $189,211

Long-term Assets

Long-term Assets $6,200 $6,200 $6,200

Accumulated Depreciation $1,892 $3,959 $6,026

Total Long-term Assets $4,308 $2,241 $174

Total Assets $43,358 $111,317 $189,385

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $8,280 $9,231 $9,832

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $8,280 $9,231 $9,832

Long-term Liabilities $0 $0 $0

Total Liabilities $8,280 $9,231 $9,832

Paid-in Capital $8,265 $8,265 $8,265

Retained Earnings ($2,065) $26,814 $93,820

Earnings $28,879 $67,007 $77,468

Total Capital $35,079 $102,085 $179,553

Total Liabilities and Capital $43,358 $111,317 $189,385

Net Worth $35,079 $102,085 $179,553

Business Ratios

Ratio Analysis

Sales Growth 0.00% 78.61% 8.10% 4.59%

Percent of Total Assets

Inventory 5.23% 3.96% 2.50% 2.25%

Other Current Assets 0.00% 0.00% 0.00% 36.99%

Total Current Assets 90.06% 97.99% 99.91% 44.98%

Long-term Assets 9.94% 2.01% 0.09% 55.02%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 19.10% 8.29% 5.19% 23.64%

Long-term Liabilities 0.00% 0.00% 0.00% 33.36%

Total Liabilities 19.10% 8.29% 5.19% 57.00%

Net Worth 80.90% 91.71% 94.81% 43.00%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 89.05% 88.08% 88.13% 100.00%

Selling, General & 66.84% 59.20% 57.45% 63.44%
Administrative Expenses

Advertising Expenses 2.10% 1.24% 1.15% 4.51%

Profit Before Interest and 34.16% 44.42% 47.21% 3.46%

Taxes

Main Ratios

Current 4.72 11.82 19.25 1.20

Quick 4.44 11.34 18.76 0.82

Total Debt to Total Assets 19.10% 8.29% 5.19% 59.16%

Pre-tax Return on Net Worth 126.54% 100.98% 65.95% 4.27%

Pre-tax Return on Assets 102.37% 92.61% 62.53% 10.46%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 22.23% 28.88% 30.88%

Return on Equity 82.33% 65.64% 43.14%

Activity Ratios

Inventory Turnover 9.47 8.29 6.51

Accounts Payable Turnover 7.90 12.17 12.17

Payment Days 27 28 29
Total Asset Turnover 3.00 2.08 1.32

Debt Ratios

Debt to Net Worth 0.24 0.09 0.05

Current Liab. to Liab. 1.00 1.00 1.00

Liquidity Ratios

Net Working Capital $30,771 $99,844 $179,379

Interest Coverage 0.00 0.00 0.00

Additional Ratios

Assets to Sales 0.33 0.48 0.75

Current Debt/Total Assets 19% 8% 5%

Acid Test 4.44 11.34 18.76

Sales/Net Worth 3.70 2.27 1.40

OTHER

logistics involved in running this business.

On-Time Shipping
A distribution centre’s primary objective is clear in its name: It must accurately and
efficiently distribute goods that are coming in and out of the warehouse. In other words, the
correct product must be placed on the correct transportation method at the appropriate time.
In order to complete this task, we must monitor late shipping departures to the warehouse
and early completion of freight loading time.
Warehouse Capacity
While there are measures out there to monitor inventory, it is essential that we complete
manual observation as well. A distribution centre needs to be aware of its ability to increase
or decrease its loading times, create more storage space, and accurately track inventory.
Currently, many distribution centres incorporate RFID measures to check inventory.
However, we should not underestimate the need for manual observation in order to
successfully analyse the listed criteria

Total and Individual Cycle Times

In order to be sure that your warehouse is running efficiently, we should be tracking the
cycle times. The total cycle time refers to the time needed to properly place the product in
inventory from its time of arrival and then ship it from the distribution center. Individually,
we can record the dock-to-load time, picking, packing, and preparing the freight for shipping
times. This will enable you to see whether or not a certain process is underperforming and
can be improved.

Damaged Products
We are bound to deal with damaged product at some point while either receiving inventory
or moving it. Thus, it is important to record whether or not the product was already damaged
upon arrival or if it was due to mishandling in the distribution center. Knowing this data and
taking proper action to reduce such mishaps will help improve the efficiency of your
warehouse

Accurate Tracking of Trailers

If our warehouse distribution center makes use of trailers for shipping product, it is essential
that you are aware of their location at all times. (For instance, Catch-Up Logistics utilizes
trailers for shipping.) A great method for tracking this information is through the use of a
GPS tracking system.