LeatherChi: Business Plan for Leather Goods in Australia

This report presents a comprehensive business plan for LeatherChi, a new venture aiming to sell leather goods and accessories in the Australian market. The plan outlines the company's mission, vision, short and long-term goals, and details its operations, which involve importing leather products from India. The report includes a thorough market analysis, segmentation, targeting strategies, and a competitive analysis. It also covers marketing and promotional strategies, a financial plan with profit and loss accounts, balance sheets, and cash flow statements, along with start-up requirements. The plan emphasizes the use of digital marketing strategies, particularly social media, for promotion. The market analysis highlights the increasing demand for leather goods in Australia and the opportunities for LeatherChi to establish a strong market position. The report also includes SWOT and PESTLE analyses to assess the business's strengths, weaknesses, opportunities, and threats, along with the political, economic, social, technological, legal, and environmental factors influencing the business. Competitive analysis identifies key players in the Australian leather market, and the financial plan provides detailed projections.

Running Head: Entrepreneurship
LeatherChi
Entrepreneurship

Entrepreneurship 1
Executive Summary
Business plan is said to be a blueprint for a future venture and it includes goals, objectives,
mission, vision and all necessary attributes required for starting a new business venture. Apart
from this, business plan also includes plans and methods through which the desired goals and
objectives could be accomplished. Before starting a venture, it is necessary to build up a business
plan and in this report; business plan will be developed in relation to a new venture which will be
soon set up in Australia. This business’ main operations will be selling leather goods and
accessories in Australian market which will be imported from Indian market. Leather is one of
the most traded commodities in the global market. Demand for the leather goods and accessories
have been increased due growth in fashion industry. Apart from the fashion industry, demand for
leather is also emerging in furniture and interior design and in automotive sector. Name of the
venture will be “LeatherChi” and it will mainly deal in leather shows, jackets, gloves, etc.
Product offerings will be expanded after reviewing the demand of the leather goods in the target
market (Armstrong, et. al., 2015).
Under this report, business plan in relation with LeatherChi will be discussed which will include
business’ primary operations, mission, vision, short term as well as longer terms goals.
Promotion of business will be done through trending digital strategies. Amongst those digital
strategies, mainly social media platforms will be used as a medium of promotion. Apart from
this, main attractions of this business plan will be market analysis, segmentation, targeting, and
competitive analysis. Further, the last part of the report will focus over marketing and
promotional plan in order to spread awareness amongst the target market regarding new business
venture.

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Table of Contents
Executive Summary.........................................................................................................................1
Business overview...........................................................................................................................3
Mission and vision of LeatherChi....................................................................................................3
Goals and Objectives.......................................................................................................................3
Segmentation and Targeting............................................................................................................4
Marketing analysis...........................................................................................................................4
Size of market..............................................................................................................................4
Micro analysis (SWOT)...............................................................................................................5
Macro Analysis (PESTLE)..........................................................................................................5
Political.....................................................................................................................................5
Economic..................................................................................................................................5
Social........................................................................................................................................6
Technological...........................................................................................................................6
Legal.........................................................................................................................................6
Environmental..........................................................................................................................6
Competitive Analysis.......................................................................................................................6
Marketing and promotional strategies.............................................................................................7
Financial plan...................................................................................................................................7
Profit and Loss Account...............................................................................................................9
Balance Sheet.............................................................................................................................10
Cash Flow Statement.................................................................................................................11
Start-Up requirements................................................................................................................11
References......................................................................................................................................13

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Business overview
Motive of LeatherChi is to fulfil Australian market’s needs in terms of leather. It will import raw
leather from India because India is one of the largest producers of raw leather, goods and
accessories. Idea of this business is originated from reviewing the demand of leather goods and
accessories in Australian market. Indian market has been chosen for importing leather because
Indian leather industry accounts for approximately 12.93% of global leather production of skins.
India stands on the second position in terms of producing leather footwear and leather garments
production in the world and accounts for 9.57 per cent of the world’s footwear production.
In order to import leather from India, organization will require being member of The Council of
Leather Exports (CLE). Almost 3500 leather manufacturing and exporting companies across the
globe are member of this council. Venture will start with seeking funding of $100,000 to add to
the existing funds of $100,000. In relevance to this, venture will be started at small level which
will be further expanded to the large scale in the domestic as well as in international market after
attaining success in the target market. The company will be private for initial period of time
which will be later on converted into a public limited company with the objective to expand its
operations in the international market (Abidi, et. al., 2015).
Mission and vision of LeatherChi
Mission statement for this start-up will be “Creating an Aura in Australia by delivering high
quality leather goods and accessories which will be imported all the way from India”.
Organizational mission is to establish its effective position in the target market and this could be
possible by delivering high quality goods through target audience’s needs could be satisfied.
LeatherChi’s ultimate desire is to spread extensive expertise and experience, inspiring new
creative applications of leather in a vast array of industries, environments and visual contexts in
the target market (Baker, 2014).
Vision of the organization is to attain leading or competing position in the target market in the
leather industry in Australia. Apart from this, LeatherChi’s vision is to acquire big portion of
overall market of leather goods in Australia in coming five years. In relation to this, major focus

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will be imposed over fulfilment of target audience’s needs and wants by delivering them high
quality leather goods and accessories (Chaffey, 2015).
Goals and Objectives
Short term goals:
 Development of effective image in the target market
 Developing effective relations with the exporters of leather
 Increasing demand of organizational products
 Spreading awareness amongst the target audience (Chang, 2016).
Long term goals:
 Acquiring large part of the target market
 Enhancing product offerings
 Gaining competitive advantage
 Maintaining quality of goods so that the customer base could be enhanced along with
uplifting organizational image in the target market.
Apart from this, new business venture also has responsibility towards society and environment.
Major source of leather is animal skin and in this manner, leather manufacturing and exporting
companies are required to contribute certain part of their earnings in order to enhance security to
reduce and mitigate animal skin smuggling. In relation with this, organization will outsource the
expert agencies to fulfil corporate social responsibilities and business ethics requirements
(Drummond, Ensor & Ashford, 2012). These will be outsourced with the objective of reducing
cost of production so that the target audience could get leather products and accessories at
reasonable prices.
Segmentation and Targeting
Segmentation is implemented with the objective of segregating a big and wide market into small
segments so that it could be easily targeted along with increasing the demand. Primary target
market for LeatherChi will be all types of segments because in the initial period, it will deal in
shoes, jackets and gloves which are used by all type of people (Farahmand, 2011). Apart from

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this, their major target segment will be people who love to use leather goods. In relation with
this, organization will execute a market research to analyse the demand of leather goods and
accessories in the target market to determine the most appropriate target market for the
organization. Leather products are bit expensive, thus people will high preaching power will be
able to afford LeatherChi’s goods. But in Australia, major segments of people have sufficient
purchasing power, thus, organization have a enough market area to target and approach with the
objective of enhancing demand of their products. Following are crucial segments which will be
targeted by LeatherChi:
 Demographic: LeatherChi will target audience in this segment on the basis of age,
income, etc.
 Geographic: All states of Australia will be targeted
 Psychographic: People are segregated on the basis of preferences, lifestyle, etc. in this
type of segmentation. This would be the perfect target market for LeatherChi because,
leather goods and accessories are included in luxurious goods, thus, people who loves to
maintain lifestyle would be approached by the organization in order to set up market
share (Glowik & Smyczek, 2011).
Marketing analysis
Size of market
Consumption of leather in Australia has been increased in past years. The major reason behind
increase in the consumption of leather is utilisation of leather in various sectors such as fashion,
automotive, furniture, etc. Emerging leather industry in Australia has generated sundry
opportunities for the new entrants to fulfil Aussies’ requirements in terms of leather. Revenue
from leather industry for Australian market expected to reach over $1000 million. These figures
show that the demand of leather goods and accessories will be increased in future years which
shows that there is a vast scope for the organization to attain its goals and objectives. Along with
this, LeatherChi will be able to set up its effective position in the target market with the help of
trending digital marketing strategies for promoting the business in the target market (Gruca &
Rego, 2009).

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Micro analysis (SWOT)
Strengths
 High quality leather goods such as
gloves, jackets, and shoes.
 Products will be imported all the way
from India (Lam & Harker, 2015).
 Adequate investment to set up an
effective position in the leather
industry.
 Outlet for LeatherChi will be opened at
centralised location.
 Genuine leather goods will be
delivered.
Weaknesses
 Lack of knowledge and experience in
leather industry.
 New to the market.
 Lack of experience regarding
competing with existing players of
leather industry.
Opportunities
 Development of effective and unique
image in the target market.
 Developing brand loyalty by
delivering qualitative products
(Renton, et. al., 2015).
 Fulfilling target audience’s demands in
terms of leather goods and accessories.
 Covering large part of market by
increasing product offering.
Threats
 Large existing players
 Aggressive promotional techniques
used by them.
 Failure of business idea
Macro Analysis (PESTLE)
Political
Australian government is concerned about the rights of employees, thus, in consideration to this,
Aussie government has developed certain rules, regulations and laws in relation with ensuring
safety, unfair treatment with employees, etc. which need to be followed and considered by every

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organization operating in Australia. Political factors have a great impact over every business and
as LeatherChi will deal in leather goods, all the regulations related to the production, import and
export of leather needs to be followed in order to avoid any type of glitch in the operations of
organization.
Economic
Australian economic is stable and in relation to this, purchasing power and financial condition of
Aussies is also good. As economic conditions also have a major impact over organizational
performance and as LeatherChi will deal in leather goods and accessories which are included in
luxurious goods category which is not affordable for all income group people. Thus, it is
necessary for the organization to consider economic policies of the country before setting up the
business (Scarborough, 2015).
Social
With the increasing demand of leather goods in the Australian market and other parts of the
globe, new venture in the name of LeatherChi has been planned which deliver high quality
leather goods in Australian will market with the objective to fulfil the needs of target audience.
Emerging trend and demand of leather goods are in various fields such as fashion, furniture as
well as automotive.
Technological
Technology also plays vital role in producing effective and attractive leather goods and
accessories from raw leather. Apart from the manufacturing field, technological impact is also
high over marketing and promotional activities, thus, organization should adopt flexible
strategies which could be able to welcome change in order to enhance productivity (Yoon, Lee &
Chang, 2017).
Legal
Leather goods are always been associated with high-end luxury and comfort but environmental,
animal as well as human impacts have never been noticed in the leather production. Leather
production is linked with negative environmental consequences and also affects human welfare
and leads to animal suffering. Organization should take care so that environment, human as well
as animal life does not get affected, otherwise organizational performance might get affected.

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Environmental
Leather production affects environment because mainly leather is extracted from animal skin
which leads to various negative consequences to environment. Regulations imposed by
Australian government in relation with procuring environment must be considered to avoid
glitches in the performance of the organization.
Competitive Analysis
This is the most crucial segment for a business plan. With the help of competitive analysis,
LeatherChi would be able to determine strengths and weaknesses of existing players in leather
industry. This analysis will help LeatherChi to develop and adopt effective and advanced
strategies in comparison with the existing players. Australian Leather Company and Oran
Leather Pty Ltd. will be the major competitors for LeatherChi and in order to compete well with
these existing companies in the target market, advanced measures, innovative techniques and
talented employees will be required. Both these companies are known as the large players of
leather industry in Australia and both has covered approximately 50% market share. In relation
to acquire market share in the competitive business environment, organization is required to
adopt adequate and advanced promotional and marketing strategies (Hill, Jones & Schilling,
2014).
Marketing and promotional strategies
With regards to promotion and advertisement of new business venture in the target market, most
appropriate techniques will be trending digital marketing strategies and certain effective
traditional mediums of advertisement and promotions.
Amongst the available options, major focus will be imposed over digital marketing strategies
such as social media platforms, email marketing, etc. These are essential elements for a new
business venture to spread awareness amongst the target audience along with increasing the
opportunities to gain positive outcomes.
Social media platform such as Facebook, Twitter, Instagram, etc. will be the major options for
organization to promote its business in the target market and it will help the organization to gain
positive outcomes along with the development of an effective position in the competitive

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business environment. Social media requires less investment in comparison with other mediums
of promotion and marketing along with huge market covering capacity (Czepiel & Kerin, 2012).
Apart from digital marketing strategies, television and radio marketing could also be included in
the marketing and promotional plan of the LeatherChi. In addition to this, event marketing could
also be used but it will be bit costly for a start-up, hence, it will be included in the marketing plan
after attaining success and growth in the target market.
Financial plan
Resource Requirements
Resource Amount ($)
Stores and Supplies
50,000.0
0
Machinery
75,000.0
0
Labor (5 workers*$3,000)
15,000.0
0
Office Staff (5 officials*$5,000)
25,000.0
0
Working capital
35,000.0
0
Total
200,000.0
0
LeatherChi: Sales Forecast
Product Units Average price Total
Leather Jackets 50 1,000.00 50,000.00
Leather gloves 100 250.00 25,000.00
Leather shoes 100 600.00 60,000.00
Accessories 200 150.00 30,000.00
Total 165,000.00

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Profit and Loss Account
LeatherChi
Profit & Loss Statement
Amount ($)
1st Year
Sales $165,000
Miscellaneous income $0
A. Total $165,000
B. Cost of Sales $66,000
C. Gross Profit (A-B) $99,000
D. Operating Expenses
Salary $40,000
Rent $12,000
Utilities $1,000
Insurance $500
Marketing $10,000
Maintenance & Repairs $5,000
Other $2,500
Total $71,000
Operating profit $28,000
Less: Interest $250
Profit before tax $27,750
Less: Tax @ 30% $8,325
Net Profit AT $19,425

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Balance Sheet
LeatherChi
Balance Sheet
Amount ($)
Assets 1 st Year
Current $100,000
Fixed $10,000
Other assets $10,000
Total Assets $120,000
Liabilities
Current $25,000
Non-Current
(Borrowings) $5,000
Total Liabilities $30,000
Equity $90,000
Total Liabilities & Equity $120,000

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Cash Flow Statement
Amount ($)
2018
Cash Flow from
Operating Activities
Cash sales 100,000.00
Realization from Debtors 40,000.00
Payment to Creditors 25,000.00
Expenses paid 50,000.00
Total 215,000.00
Cash Flow from
Investing Activities
Machinery Purchased -
Equipment Purchased -
Total -
Cash Flow from
Financing Activities
Equity capital
Borrowings 4,000.00
Total 4,000.00
Cash surplus/ deficit 219,000.00
Opening balance 2000
Closing balance 2000

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Start-Up requirements
Start-up Requirements
Start-up Expenses in $
Legal Expenses 1500
Import fees 2000
Accountant 1500
Rent 1700
Brochures 25000
Insurance 1000
Marketing & Promotion 40000
Other Expenses (Including trainers
salary) 800
R&D 6500
Total Start-up Expenses 80000
Start-up assets
Cash Needed 60000
Current assets 30000
Long Term assets 30000
Total Assets 120000
Total Requirements 200000

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References
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Entrepreneurship. Market Forces, 10(2).
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Pearson Education.
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Chaffey, D., 2015. Digital business and E-commerce management. Pearson Education
Limited.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
CRC Press.
Czepiel, J. A., & Kerin, R. A., 2012, Competitor Analysis. Venkatesh Shankar And Gregory
S. Carpenter, Handbook Of Marketing Strategy, Edward Elgar, Pp. 41-57.
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(4th) London: Palgrave Macmillan
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Value,” Journal of Marketing, 69, 115–30
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integrated approach. Cengage Learning.
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