Opening a Furniture Business: Manufacturing and Selling Ergonomic Chairs in Australia

In this report we will discuss about entrepreneurship and below are the summaries point:- The report focuses on opening a furniture business in Australia, specifically manufacturing and selling ergonomically designed chairs for business executives and computer users. It covers various aspects of the business, including customer segments, channels, customer relationships, key partners, revenue structure, and key activities. The introduction highlights the founders' experience, the target market, and the key features of the chairs, emphasizing their ergonomic effectiveness and customization options.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Name of the student
Name of the university
Student ID
Author note

1ENTREPRENEURSHIP
Executive summary
The report will focus on opening the new business in Australia. The report will concentrate
on opening the furniture business that will manufacture and sell special quality ergonomically
designed chair for the business executives and the people using computers. The report will
focus on some of the contexts of business like customers segments, channels, customer’s
relationships, key partners, revenue structure and key activities. Further, it will highlight the
planning including market feasibility, human resources, finances and operations and
techmology.

2ENTREPRENEURSHIP
Table of Contents
Introduction................................................................................................................................3
Business model canvas...............................................................................................................3
Planning......................................................................................................................................8
Reference..................................................................................................................................11

3ENTREPRENEURSHIP
Introduction
Break-Wood Furniture will be Australia based furniture shop that will concentrate on
selling special type of chair that will be exclusively used by the computer users in office as
well as homes. Majorly the customers of the business are expected to be from all the business
level those are in the position to afford the high quality chairs for its employees. The business
will be started by 2 friends Johnson McKenzie and Mary Cinthia who have over 8 years of
experience in furniture business (Baker 2014). The company’s registered office will be at 335
Collins Street, Melbourne where large numbers of officers are there. Initially the business
will be started with one shop only, however, the company has future plan to expand its
business all over Australia and in addition selling the product through online. The key feature
of the chairs is it will be ergonomically effective and at the same time it will fulfil the
requirements of all the people using computers be it in offices or in homes (McKenzie 2015).
Various versions of the chair will be offered to the customers that will be elegant and
ideal for the users of computers. Main advantage of the chair is that it can be adjusted as per
the requirement of height and can be revolved around 360º. Further, the company will also
take orders for customised design as per the exact requirement of customers (Hill 2017).
Business model canvas
Key
Partner
-investors
Key
Activities
-manufacturing
and selling
Value
Proposition
- providing
ergonomic
seating
arrangement for
computer users
-helping people
to work in
healthier way
Customer
Relationship
-e-mail, phone
calls and
official website
-surveys
Customer
Segment
- Corporate
executives
- Small
business
owners
- Home offices
and domestic
users
Key
Resources
-specialist
carpenter and
designer for
manufacturing
- suppliers for
the raw
materials
Channels
-on line
- shops
Cost structure
-Start-up cost
- Equipment and capital cost
- Cost of goods sold
- Advertising and marketing
- taxes
Revenue stream
1. Sales

4ENTREPRENEURSHIP
1. Customer segments
Corporate executives – it is identified from the market survey carried out by the entity that
there are 3 million potential customers from directors and managers of different companies.
Hence, target customers from corporate sector are expected to be high as they have high level
of demand for executive chairs (Scarborough 2016).
Small business owners - it is identified from the market survey that large number of small
business houses like 500 approximately are there who have less than 100 employees each.
Most of these businesses are concerned regarding the comfort of their employees and hence,
are expected to have great demand for this type of chairs.
Home offices and domestic uses – after 1995, demand for executive chairs in home offices
and the domestic computer users have been increased significantly. Further, people those are
working outside also have facility of working from home requires comfortable environment
while working from home. The home office market in Australia is quite big as significant
amount of revenues can be generated from this sector (Titman, Keown and Martin 2017).
2. Value proposition
Ergonomic office chairs supports the good posture and the well being of employees
through comfort and innovative design. Various value propositions of this type of chairs are
as follows –
Reduces pains – Ergonomic chairs are designed for supporting the employees while they are
working. While the employees are not working on their computer system that worsen the
form and postures, they may experience the pain reduction ergonomic chairs to fix their
postures, prevent arthritis, realign their spine, and reduce the overall injuries related to works
(Ismail et al. 2017).
Boosts the productivity – while the employees will be in comfortable position, their
productivity will be increased. Further, the employees with good health will have lower level
of distractions which in turn will help them performing at their best and generating high
quality of work.
Improves wellness of the employees – major advantage of ergonomic office chairs is it is able
to improve the wellness of the employee. Wellness of the employee is not just physical
wellbeing of the workers however it is also associated with the mental health of the

5ENTREPRENEURSHIP
employees. While the employer invests for their employee’s health and wellness through
providing them with ergonomic chairs, one message is send to them that the employer cares
about its employees. This is turn, will lead to well being and happiness in the workplace
(Lestari and Ozarska 2016).
3. Customer relationships
E-mail, phone calls and official website – customers and potential customers will be
contacted trough e-mail, phone calls on regular basis. The company will inform the existing
customers regarding launch of any new kind of chairs and any ongoing offer. Further, the
official website will publish all the information that may be required by the existing as well
as potential customers. Further, under customer feedback section the customers can report
regarding any complain they have for the product of the company. Further, the customers will
be able to provide suggestions regarding the product and sales, if any (Ng and
Kanagasundaram 2017).
Surveys – on regular basis the company will conduct survey for its customers on alternate
basis as it will assist them to improve their product. Employees using the chairs will be
included in the survey that will enable the company in getting reviews regarding the chairs.
4. Channels
Break-Wood Furniture will supply the product through 2 channels that is online sales
and retail sales from physical stores. Initially the company will sell through one shop only in
335 Collins Street, Melbourne. However, the company will expand its business all over
Australia in next 3 years period and in addition to that will sell the product through online
from next year that is after completing one year of business. However, only light weight
chairs and associated accessories will be sold through online. Expected time for delivery will
be 15-20 days for small orders. However, for customised order or big order based on the
order size delivery time may be 30-45 days
5. Key activities
Manufacturing and selling – the company will apply the latest ergonomic technology while
designing the chairs and it will be combined with the classic and fine design of furniture.
Further, the company will ensure that the designs of the chairs will use top technology with
regard to display and comfort. Further, the assembly patents of Break-Wood Furniture will be

6ENTREPRENEURSHIP
its competitive advantages. None of its competitor will be able matching the technology that
will be used by it for assembling the product. Further, it is identified that the customers will
prefer the interlocking system in assembling as it will improve the quality sense.
6. Key resources
Specialist carpenter and designer - Designer for the chairs and carpenters for the same will be
selected from those who have at least 10 years of experience in the same field and are known
for their superior work level. Further, the raw material for the product that is better quality of
oak and cherry will be obtained from various suppliers who are well known for providing
high quality wood that can be used as raw material for manufacturing the chairs. The
suppliers those will be used for obtaining the raw material are Fox hay Timber & Hardware,
Quality Discount Timber Melbourne and Australian Forest Products (Klettner, Clarke and
Boersma 2014).
7. Key partners
Investors – as the business will be started by 2 friends Johnson McKenzie and Mary Cinthia
who will contribute 60% of the required capital that is ($54,59,000 * 60%) = $32,75,400.
Rest of the amount that is ($54,59,000 * 40%) = $ 21,83,600 will be obtained through
borrowing from banks and financial institutions. The company will obtain borrowing from
Suncorp Banking and Members Equity bank.
8. Revenue structure
Sales – Main source of revenue for the company will be from sales. Sales of the entity for the
1st year is expected to be $50,00,00 and it is expected that the sales in 2nd year will be
increased by 12% and in 3rd year it will be increased by 14%. The cost of goods sold for the
1st years will be 60% of revenue and for 2nd and 3rd year the COGS will be reduced by 2%.
After spending all the operating and financing and tax expenses it is expected that the net
profit available with the company for 1st year will be 3.53% that will be increased to 9.82% in
2nd year and 12.55% in 3rd year.
9. Cost structure
 Start-up cost – start up cost of the company will include various costs like registration
expenses including business name, permits, licenses, trade-marks and vehicle
registration for delivery trucks. Other costs will include membership fees, solicitor’s

7ENTREPRENEURSHIP
fees, accountant fees, utilities, insurance costs, marketing and advertising costs. Total
costs required for starting-up will be $21,09,000.
 Equipment and capital cost – these costs will include the costs for plant and
equipment that will include the cost of vehicles, computer equipment, fax machines,
phones and security system. Further, cost of office equipment will include the cost of
shop fit-out and furniture. Total cost of equipment and capital will be $33,50,000.
 Cost of goods sold - The cost of goods sold for the 1st years will be 60% of revenue
and for 2nd and 3rd day the COGS will be reduced by 2%. COGS for the 1st year is
expected to be $30,00,000, for 2nd year is expected to be $32,48,000 and for 3rd year it
is expected to be $37,02,720.
 Advertising and marketing - The cost of goods sold for the 1st year is expected to be
$120,000. However in 2nd year the advertising and marketing cost is expected to be
lower by $20,000 and in 3rd year by further $20,000.
 Taxes – the taxable income of the company will be taxed at 30% for all the 3 years.
Hence, the expected sales based on the projected sales and net profit is $75,600 for 1st
year, $235,680 for 2nd year and $343,441.50 for 3rd year.
Planning
Market feasibility – based on the survey carried on by the business it is found that 3 million
potential customers are there from directors and managers of different big companies, 50,000
employees from small businesses and millions of domestic users those uses computers at
home for various purposes will be interested in buying the ergonomically manufactured chair
for working comfortably. Hence, it can be stated that the business will be feasible for earning
profit and it seems to b sustainable over long term (Jones and Allen 2014).
Operation and technology – the company will have its own manufacturing unit that will
manufacture the product with its own design and then will sell it to the market. The raw
material for the product that is better quality of oak and cherry will be obtained from various
suppliers who are well known for providing high quality wood. However, initially the factory
for manufacturing unit will be taken on rent, the rent for which will be $60,000 per year for
1st and 2nd year and will be increased by 10% in 3rd year. Factory will be just 5 minute away
from the shop that will help the company to display the product to the customers (Leighton
2016.).

8ENTREPRENEURSHIP
Human resources – Designer for the chairs and carpenters for the same will be selected from
those who have at least 10 years of experience in the same field and are known for their
superior work level. Other employees will include the accountant who has 10 years of
experience in the same field and sales and marketing manager who was the sale and
marketing head for one well known furniture company for 10 years (Andersen, Ashton and
Colley 2015).
Finances – average price for each unit will be $1500 where 60% that is $900 will be COGS
per unit. Further, it is expected that if the fixed cost per month is $450,000, the company will
be required 750 units to be sold for starting earning the profit. Further, the company is
expected to generate cash flow amounting to $43,69,900 for the 1st year of business (Rackley
2015).
Income statement –
Cash flow statement –

9ENTREPRENEURSHIP
Balance sheet –
Break-even unit –

10ENTREPRENEURSHIP

11ENTREPRENEURSHIP
Reference
Andersen, L., Ashton, P. and Colley, L., 2015. Creative Business in Australia Learnings from
the Creative Industries Innovation Centre, 2009 to 2015.
Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher
Education
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing
function. Macmillan International Higher Education.
Ismail, S., Rahman, A.A.A., Ismail, A.R., Daud, K.A.M. and Khidzir, N.Z., 2017. Internet
marketing strategy for furniture industry: A research based ergonomics sofa. In Advances in
Human Factors, Business Management, Training and Education (pp. 571-579). Springer,
Cham.
Jones, L.M. and Allen, P.S., 2014. Beginnings of interior environments. Pearson
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics, 122(1), pp.145-165.
Leighton, S.L.N.S.W., 2016. 116 Furniture. Douglas Snelling: Pan-Pacific Modern Design
and Architecture, p.115.
Lestari, R.Y. and Ozarska, B., 2016. Assessment of Reusing and Recycling Wood Waste for
Production of Furniture and Furniture Components in Victoria, Australia. First published in
March 2016 by:© Faculty of Mathematics and Natural Sciences, Banjarbaru 2016 All rights
reserved Compiled by Aprida Siska Lestia and Rani Sasmita Edited by Sasi Gendro Sari,
p.311.
McKenzie, D., 2015. Identifying and spurring high-growth entrepreneurship: experimental
evidence from a business plan competition. The World Bank.
Ng, B.K. and Kanagasundaram, T., 2017. Sectoral innovation systems in low-tech
manufacturing: Types, sources, drivers and barriers of innovation in Malaysia’s wooden
furniture industry. Institutions and Economies, pp.549-574.

12ENTREPRENEURSHIP
Rackley, J., 2015. Return on Investment. In Marketing Analytics Roadmap (pp. 71-85).
Apress, Berkeley, CA.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Titman, S., Keown, A. J., and Martin, J. D., 2017. Financial management: Principles and
applications. Pearson.