PREPARING A BUSINESS PLAN FOR QUILT FINISHING

Thank you for your interest in INNOVA Quilting Machines and Accomplish Quilting. If you are looking at buying your INNOVA Quilting Machine to start a business, or maybe you have an existing business, this email may contain some helpful information. Accomplish Quilting is interested in your business and we will do whatever we can to ensure your success.

To help you get started we are happy to provide you with this guide to writing your business plan.

Introduction: 
The purpose of a business plan is to educate a lender. This information includes:

• Information about the nature of your business.
• Your qualifications for the business.
• The assets you have or need.
• The market you are entering.
• The competition for your product or service.
• The costs and how you intend to meet them.

Lenders are used to seeing this information in a standardized format. This guide will help you put your plan into the format they understand.

This will help walk you through the process, not dictate your plan. We will try to help you find or determine pertinent information, find the answers you need and help organize your information into a plan.

Business Name: 
Business names can tell your customers about the products and services you offer. However, they don’t need to.

Business names need to be acceptable to the state in which you are doing business. The state’s Secretary of State controls the names of the businesses in the state. They generally have a website that will help you with this.

They also generally have a book that will help you start a business in your state. This book will guide you through the startup process.

You probably have a name in mind.

Business Objectives:
You should think about what you hope to do in your business. Businesses can have short term and long-term objectives.

Your long-term objective(s) should be more philosophical or ‘pie in the sky’.

Example:
We have as a long-term objective to provide quality long arm quilting services to quilters in our area. We see ourselves as the premier custom long arm quilter available.

We will provide custom design consulting and service for quilters of all age and skill groups.

Further, we will provide training and assistance for all so they can develop their skills as quilters and share in the joy we have found in this craft.

Your short term objective(s) should be more practical and operational. You should describe what you need to do to get the business up and running.

Example:
Short term, we will purchase an INNOVA quilting machine. This premier machine will allow us to provide custom and standard quilting service for all standard quilt sizes.

We will provide a wide range of standard designs suitable for area machine quilting.

We will perform outreach programs to develop a quilter base for this area.

History: 
You should describe your business very basically. Items to consider in this description are:

• Your name(s).
• Years in business (If you are already in business) If this is a startup, say so.
• Whether prior financing or debt exists.

Example:
(Your Business Name) is a startup enterprise. It is a privately held business offering long arm quilting services to the public.

The principal officers are (Your Name(s) here)

No prior financing has been applied for.

Key Personnel: 
You should identify here the people who will run your business. Take each person in turn and describe him/her as fully as you think appropriate. For each person, consider:

• Their name.
• Marital status (if appropriate)
• Education.
• Work experience.
• Relevant achievements.
• Quilting/management experience.
• Changes you see in the organization in the next few years.

If you need to hire someone to fill a position, identify what qualifications you are looking for and how you will find them.

Example:

(Your business name) is basically a 2-person operation.

We will share the operation and management functions. 

(Names) are a married couple. 

(Name 1) has 5 years quilting experience. Although she hasn't been quilting all her life, she took second place in ____ Show. 
(Name 1) is visually creative.
(Name 1) has many years’ experience in general office management. She is familiar with office operations and recordkeeping. 
(Name 1) has been an office manager and supervisor for both national and local companies.
She is highly skilled at customer service.
Denise is student at _____________ College.

(Name 2) has worked in retail for 10 years. His retail experience will compliment (Name 1)’s skills.
He has computer skills.

We see no changes in the organization within the next 2 years

Assets:
You should identify here the equipment and other things the business does or will own. Keep these relevant to the business needs. The lender will want to know that there will be collateral for the loan.

Example:

(Your Business Name) will have as its principal asset an INNOVA Long Arm Quilting Machine.

We will add equipment as demand requires.

Business Form: 
The type of business you will form should be identified here.
There are legal advantages and disadvantages to each form of business. You should consult the Secretary of State’s office other sources or a lawyer to decide what type of business suits your circumstances.

Example:

(Your Business Name) will be a Subchapter S Corporation under federal and (state) statutes.

Market Entry: 
Identify here when you think you will be ready to start business. Consider the lead time for the machine, training schedules and learning curve time when you decide this date.

Example:

(Your Business Name) will be operational on (Date). Training provided by Accomplish Quilting will ensure that we will be fully operational at that time.
Certain operations for custom work will require a short lead time, not greater than 1 week. We feel that our backlog will quickly grow to make this a moot point.

Value to Our Customers: 
Your business offers your customers a service or products that are valuable to them. Identify here what you can do that will set you apart to your customers. Consider your skills and values when you fill out this section.

Example:

We recognize that quilters have several choices in choosing a long arm quilting provider. However, we feel that our service and design assistance will make us stand out in this field.
Further, there is limited access to this service in this area, and our association with the local quilt shop will provide access to the community of quilters.

Cost To Produce: 
Obviously it costs something to produce quilts for customers. Understanding these costs will help you price your service. Along with this plan guide is a spreadsheet file that will help you understand your costs and profits. You may want to fill this out before answering this section.

Example:

Our basic business model passes the cost of supplies through to the customer. Our basic charge covers setup, labor and minimal thread supplies. All other supplies are estimated to the customer.

When we quote a quilt, we will include a standard amount of thread suitable for standard use in the quote. This thread will cost $5.00 per quilt. This includes:

3 Bobbins @ $1.00 ea. - $3.00
1/3 Cone Thread @ $6.00/cone - $2.00
Total Per Quilt - $5.00


Examples of these ala carte’ charges include:
Batting
Custom Thread
Custom Quilting
Requested Excessive Thread Usage
Embellishments
Repairs
Excessive Setup
Squaring the Quilt Top

Value Summary: 
Your business offers your customers a service or products that are valuable to them. Identify here what you can do that will set you apart to your customers. Consider your skills and values when you fill out this section.

Example:

We understand that a quilt is a labor of love. We know the effort a quilter puts into deciding on the pattern, choosing the fabric, cutting the pieces, agonizing over the sewing and the like.
Because we are quilters ourselves, we know the importance of every piece we service.
These quilts are destined to become family treasures. Many will be displayed proudly.
Because we understand these points, we know the trust invested in us by letting us do the quilting.
We also understand that quilters put stock in our availability according to their schedule and needs.

We will be the quilter of choice according to these concerns.

Promotion: 
Your business offers your customers a service or products that are valuable to them. Identify here what you can do that will set you apart to your customers. Consider your skills and values when you fill out this section.

Example:

We will use the "Pull Strategy" for our sales.

We will use social media to promote our business.

We are allied with the _______ Quilt Shop. We will provide classes and design assistance for their customers. Using this contact with the quilting community we will use word of mouth to promote our services.

In addition, we will use crafter's publications and store newsletters to advertise our presence.
We will use discount leaders to bring in startup business and develop a customer base.
We will also use special discounts for customers who refer us to their friends. 
We will also use the local consumer news advertisers to promote awareness.
We are going to use discount coupons to provide market penetration.

Pricing: 
You will have to decide what you will charge for your service. This will likely be a function of the local market. You will need to check your competition to see what they are charging.

You can set your pricing at whatever level you think you can get from your customers. However, if you intend to charge more than your competition, you should identify what it is about your business that will make your customers pay more to get your service.

Example:
Pricing in the immediate area is depressed from the state norm. Typically, long arm quilters charge $0.015 per square inch for these services. 

Our market is used to low cost providers. However, local providers are quickly raising prices from $0.0075 to $0.01 per square inch. We will continue that trend.

Our basic pricing will be $0.009 per square inch. We will initially use small discounts to penetrate; however, we will limit this to 2 months.

Competition: 
This is one of the most important sections of your plan.

You should check the phone book, local papers, craft newspapers you find in local shops, and all other sources of information to find others who do this service.

Check with local quilters to find out where they take their quilts.

Look for their websites, if they have one. Check what they offer and what they charge. Compare them to your own plans.

Have a friend call their shop(s). Find out:

• How do they handle customers?
• How much they charge?
• How long is their backlog?
• Are they taking new customers?
• What kind of machine do they have?

Use a separate section for each competitor.

Example:

___________ is a full-service long arm store. They have a website and appear to be using this site to bring in business.
Because of this, it appears that their major market segment is internet mail order customers. 
We were unable to find any of their customers in the local community.
They are using a lower entry price, charging more for add-ons. They list an ala carte pricing schedule that adds nearly $50 to each order.

_____________ is considered our strongest competition.

___________ is also a full-service long arm store. 
They are operating their business out of their home.
Their customers are quilters from our local community.
They are charging more than the average quilters. They are also charging more for add-ons. They list an ala carte pricing schedule that adds nearly $75 to each order.
They are the highest cost provider in our area.

_____________ is considered our second strongest competition.

____________ is a provider that is winding down her operation. She has been a long-time provider and is retiring. She has elected to service only friends and longtime customers.

_____________ is not considered an effective competitor.
_____________________________________________________________________

__________ is using a storefront in a downtown mall. However, the shop is virtually unattended and the answering machine is just her home phone with no hours, pricing or contact information.
While they too have a INNOVA, the model is unknown.
We know that their pricing on Crib and Queen quilts (the industry standard) is 50% higher than _______________.
Quality as expressed by customers is low. The experience level of the quilters providing the service here is also low.

_______________ is not considered an effective competitor.

We feel that our affiliation with the local master quilters and quilt shop will give us an edge over the competition.

Congratulations!! You are essentially done with the basic plan. 

Using the information above to give you a guideline on creating a business plan for your new venture. If you have any questions about your business, we here to help and answer questions. However for legal or financial advice please consult your accountant, attorney or tax advisor.