Wooden furniture 2018

Background of the Project:

Quality furniture is a necessity that also adds value to the surroundings due to its decorative
aspect. This industry is a multidimensional,
comprising a multitude of trades and sub-
industries. The wood-work industry exists on
various scales i.e, large, medium or small all
across the country.

The wood used in furniture making generally

comprises of Sheesham, Chirh, Pine, Oak,
Burma Teak, Plywood, Kekar and Bamboos.
Recently, chipboard is also extensively used for this purpose. Another popular medium
nowadays is cane.

The proposed project is for setting up a

“Wooden Furniture Manufacturing Unit” in
Gwalior (Gole ka Mandir). This project will be
capable of integrated manufacturing of wooden
furniture starting from cutting of wood to
retailing of product to the customer. Auxiliary
processes like carving will be met through sub-
contracting. Furniture of all kinds either with or
without carving and including but not limited to
tables, chairs, dressing tables, beds, rock chairs, dining tables are to be manufactured in the Unit.

1
 Wooden furniture 2018

Introduction:

The demand for the furniture made up of woods is growing due to the increased standard of
living of people and outlook. On
occasions like wedding, it has become
customary to gift wooden furniture like
double bed, sofa, dressing table, dining
table to the daughter.

Items like Almirah Wardrobe, table

chairs stools and cots made out of
wooden material falls under the category
of wooden furniture. These are widely
used in houses / Office and commercial
establishments. These are made in
various designs and sizes according to the requirement.

My project is meant to setup a manufacturing unit of wooden furniture such as Chair, Coat,
windows and door etc .The unit will undertake the job work also. The unit envisages
manufacturing of wooden furniture on different designs out of quality wood like Teak, Anjili,
Rose wood etc. But mainly on teak wood.

As the furniture would not have any fixed brand or company name, therefore, there would be less
competition. The demand of wooden furniture and wooden building materials is increasing as
construction and housing industry expand. Attractive and genuine wooden furniture have good
access in market. The demand for the furniture made up of woods is growing due to the
increased standard of living of people and outlook.

2
 Wooden furniture 2018

Priority

I have screened my few ideas but I gave priority to the wooden furniture project. The first thing
which came into my mind is the Today’s environments require flexible solutions for a variety
of workplace strategies. With a coordinated suite of desks, benches, tables, and storage
units, Priority strikes a balance between individual and group activities in the workplace.
Each element integrates to create modern work environments enabling people to work
healthy, move freely and seamlessly between independent and interactive work modes.

Wooden Bedroom Furniture is Always the First Priority for Bedroom Decor bedroom interior
wooden bedroom furniture is always the first priority for bedroom interior design
hardwood bedroom furniture Wooden Bed room Furniture is Always the First Priority

Objectives

1. To make feel people relaxed and free from tension.

2. Enhance the structure and functioning of the furniture industry to benefit small-
scale producers.
3. increase of technological performance of wood from traditional wood species
4. improvement of manufacturing technologies of wooden finished products and furniture
5. Design and manufacturing of modular furniture
6. To provide best service to our customer.

3
 Wooden furniture 2018

SWOT Analysis:

Strengths:

 Skilled Labor Force.

 Wood seasoning facility Centre is available.
 Suppliers of raw material are available.
 Local tools available.
 Ability to sell products online.

Weaknesses:

 High cost of production due to high rate of raw material.

 Lack of educated, certified and professionally trained, work force.
 Unavailability of ready to use raw material.
 Competitors can offer similar products quickly.
 Fluctuating prices of the raw material.
 Maintenance problem.

Opportunities:

 Technical up gradation.
 Make Houses Decorated.
 Ability to develop additional store.
 Scope in future era.
 Existing of this project in market have a lot of scope and potential over there.

4
 Wooden furniture 2018

Threats:

 Raw material cost increase (shortage in the stock of Sheesham wood at any stage because
no further plantation as required).
 Competitor
 Economic pressures.
 Less funds available.
 Increasing Competition.
 Products are already sold by major competitors.

Marketing Analysis:

As the furniture would not have any fixed brand or company name, therefore, there would be less
competition. The demand of wooden furniture and wooden building materials is increasing as
construction and housing industry expand. Attractive and genuine wooden furniture have good access in
market. The demand for the furniture made up of woods is growing due to the increased standard of living
of people and outlook. On occasions like wedding, it has become customary to gift wooden furniture like
double bed, sofa, dressing table, dining table to the daughter. The finished products can also be sold
through furniture marts

Product: Product Marketing’s most important challenge is the problem of assembly and
packaging. I know I have the best product when I deliver it locally. That isn’t necessarily so I
will send it in boxes to be assembled. I have to make sure that the assembly is truly easy.

Our product marketing has to emphasize the benefits of our unique combination of technological
expertise, ergonomics, and fine furniture craftsmanship, and prestige. That has to come out in our
packaging, shipping, and collaterals.

My project product strategy is to give the best product to the customers. I also give my product
in many designs because I manufacture my wooden furniture so that I will make my furniture in
many designs.

5
 Wooden furniture 2018

Price: I will sale my product in all prices. I will sale my product for medium class and high
class family. The main aim of my project is to provide a best product in lowest price and without
any complaint by the customer. In first stage I will sale my wooden furniture in minimum prices
and in many designs.

Place: I will open my shop nearby the Sarfa Bazar Dabra. I will locate my shop in this area
because there is a less competition so that’s why I can easily serve with the customers. And now
a days we can see that there is a huge scope in the market of wooden furniture.

Promotion: Our promotion strategy is based mainly on making the right information available
to the right customer. We can’t afford to sell people on our expensive products, because most
don’t have the budget. What we really do is make sure that those who have the budget and
appreciate the product know that it exist, and know where to find it.

The marketing has to convey the sense of quality in every picture, every promotion and every
publication. We can’t afford to appear in second-rate catalogs with poor illustrations that make
the product look less than it is. And I will make some online sites for sale our wooden furniture
and I will also promote our own websites for consumers who want to buy our products.

Product Manufacturing Process:

Wood is cut into different sizes of blocks and slabs. If the wood purchased is not seasoned than
these blocks/slices are seasoned through different processes, namely:

 Condensation
 Boiler System
 Vacuum System
 Seasoning through putting the wood slices under normal environmental temperature for
considerable duration.

Before start of manufacturing of any furniture product a desired design is selected. Selection

6
 Wooden furniture 2018

of elegant design is important to ensure attractive finished product.

The seasoned wood blocks are cut into desired shape and slices according to the Requirement of
design. The slices of wood are molded into the desired shape according to the design. Carving
means different elegant pattern carved in the wood. Quality of carving depends on the skills of
the labor. Once the different pieces are carved & molded than these parts/pieces are assembled or
fixed together to give the shape to the final product.

Assembled product is grind to make the surface smooth. Once the surface is smooth, finishing
material is applied to make the surface ready for paint or polish. After the base is prepared final
finishing is applied depending on requirement in term of paint/polish. Upholstery of fabric is
carried out according requirement of demand.

Financial Analysis:

1. Fixed capital :-

Land and building:-

S.no. Particular Total Rate rs/sq Total value

sq.(mtr)
1 Total land 800 sq.mtr. 600 Rs 4,80,000
2 Construction 400 sq.mtr. 600 Rs 2,40,000
3 Construction material _ _ 20,000

Total 7,40,000

7
 Wooden furniture 2018

Machinery and Equipment:-

S.no. Particular Qty Price Total

1 Cutter slide 2 15,000 30,000

2 Cutter round 1 10,000 10,000

3 Saw 18” 1 30,000 30,000

4 Saw 27” 1 25,000 25,000

5 Saw 30” 1 30,000 30,000

6 Gauge 14” 1 20,000 20,000

7 Gauge 18” 1 30,000 30,000

8 Planer/Shaper 12” 1 50,000 50,000

9 Chapaka 2 15,000 30,000

10 Hand Chapaka (jug saw) 2 15,000 30,000

11 Grinder 1 6,500 6,500

12 Drill Machine 4 3,000 12,000

13 Compressor 1 15,000 15,000

14 Miscellaneous tools (hand 1 15,000 15,000

Tools, Paint Gun etc.)
15 Installation cost for 1 25,000 25,000
Machinery
Total 26 3,04,500 3,58,500

8
 Wooden furniture 2018

Total fixed assets:-

No. Particular Amount

1 Land and building 7,40,000

2 Machinery and equipment 3,58,500

3 Other fixed assets 1,70,000

Total 12,68,500

1. Working capital :-

Raw Material:-

No. particular Amount

1 Sheesham, Teak, Wood, etc. 25,000

2 Ply 6,000

3 Plane Glass of Thickness 5,000

4 Mirror 5,000

5 Cushions 5,000

6 Fevicol 2,000

7 Sunmaica 5,000

8. Other 500

Total 53,500

9
 Wooden furniture 2018

Wages &Salaries:-

S.no. Particular No. of Amount Amount

employees (monthly) (yearly)
1 Carpenter/Entrepreneur 2 5,000 60,000

2 Skilled Labour 2 12,000 1,44,000

3 Unskilled Labour 2 4,000 48,000

Total 2,52,000

Administration Expenses:-

No. Particular Amount Amount

(monthly) (yearly)
1 Printing and stationary 1,000 12,000

2 Repair and Maintenance 500 6,000

3 Conveyance Expenses 1,000 12,000

4 Insurance 500 6,000

5 Miscellaneous Expenses 500 6,000

Total 42,000

10
 Wooden furniture 2018

Selling expenses:-

No. Particular Amount Amount

(monthly) (yearly)
1 Selling expenses 4,000 48,000

2 Packaging expenses 3,000 36,000

3 Travelling expenses 1,000 12,000

Total 96,000

Total working capital:-

No. Particular Amount

1 Raw material 53,500

2 Wages & salaries 2,52,000

3 Administration expenses 42,000

4 Selling expenses 90,000

Total 4,37,500

11
 Wooden furniture 2018

Total cost of project:-

No. Particular Amount

1 Fixed capital 12,68,500

2 Working capital 4,37,500

Total 17,06,000

Means of finance:-

No. Particular Amount in %

1 Funds borrowed 70%

2 Owners contribution 30%

Total realization/estimated sales:

No. Particular Price in single Unit Amt./Yearly

1 Bed Set 15,000 120 18,00,000

2 Dining Tables 10,000 120 12,00,000

3 Sofa Sets 15,000 120 18,00,000

4 Wooden Almirah 8,000 120 9,60,000

5 Dressing Tables 5,000 120 6,00,000

Total 600 63,60,000

12
 Wooden furniture 2018

Allocation of investment of funds

To start our project we have to adjust capital, working capital to build up our project, we have
to arrange some finance some capital the cost of the project is very high. Bank of India is
providing 70% loan with rate of interest. So, owned capital is 30%.

Sources Of Finance % Cost of Our Project Estimated Interest Per Year

As Per Amount Taken Bank Charge on
Financed Amount

Long Term Loan 70 11,94,200 Base Rate+1.5%

from Oriental Bank
for five years 9+1.5=12%
of Commerce

Own Capital 30 511800

Repayment schedule:

70% of amount is taken as loan.

Bank loan is 11, 94,200 on which rate of interest is 12%

Loan amt. Installment Interest Total payment

11,94,200 2,38,840 1,43,304 15,76,344

9,55,360 2,38,840 1,14,643 13,08,843

7,16,520 2,38,840 85,982 10,41,342

4,77,680 2,38,840 57,322 7,73,842

2,38,840 2,38,840 28,661 5,06,341

13
 Wooden furniture 2018

Profitability estimation:

Total working days = 600 units

Total amt. (yearly) = 63,60,000

S. no. Particular 1st year 2nd year 3rd year

1. Capital utilization 70% 80% 90%

(A) Sales realization 44,52,000 50,88,000 57,24,000

(B) Cost of production:

Raw material 37,450 42,800 48,150

Wages & salaries 1,76,400 2,01,600 2,26,800

(C) Administration expenses 29,400 33,600 37,800

Selling expenses 63,000 72,000 81,000

(D) Gross profit before interest &

tax
(A-B-C) 41,45,750 47,38,000 53,30,250

14
 Wooden furniture 2018

(E) Financial charges:

Interest on term loan 1,00,313 1,14,643 1,28,974

Depreciation:

Building 5,18,000 5,92,000 6,66,000

Machinery & equipment 2,50,950 2,86,800 3,22,650

(F) Profit before tax

(D-E) 38,88,987 44,44,557 50,00,126

(G) Tax (33%) 12,83,366 14,66,704 16,50,042

(H) Profit after tax 26,05,621 29,77,853 33,50,084

(F-G)

(I) Depreciation 7,68,950 8,78,800 9,88,650

Net cash accrual

(H+Depreciation) 33,74,571 38,56,653 43,38,734

15
 Wooden furniture 2018

Conclusion:

I would like to suggest that, the furniture make up the houses clean and decorated and there is a
huge scope of furniture in the market. The furniture will be used, when we are giving something
to others.

I also make my furniture in many designs and in decorated structure. Customers are the one of
the opportunity for my project so that I make my product in many designs who’s attract the
customers to buy our product in many prices and in good quality.

This project will be capable of integrated manufacturing of wooden furniture starting from cutting of
wood to retailing of product to the customer. And I am using the 100% wood in my wooden
furniture.

16