Terracotta Water Carriers Business Plan

Terracotta Water Carriers © 2015
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Business Plan
Date: 24/04/15
Contact: Ciaran Gethings, Luke Martin, Rob Kavanagh or Veena Arulmozhi
Email: TCWC@gmail.ie
Tel: +353 86 123 4567
The Terracotta Water Carrier’s Business Plan is confidential and contains proprietary information including trade secrets.
Neither the Plan nor any of the information contained in the Plan may be reproduced or disclosed to any person under any
circumstances without expressed written permission.

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Contents
1. Executive Summary.........................................................................................................................4
Description of the Business Concept and the Business......................................................................4
Management Team.............................................................................................................................4
The Opportunity and Strategy ............................................................................................................5
The Target Market and Projections ....................................................................................................5
Research and Development................................................................................................................6
Financial Projections...........................................................................................................................6
Funding Requirements........................................................................................................................6
2. Management Team.........................................................................................................................7
3. Industry and the Product................................................................................................................8
The Industry........................................................................................................................................8
The Company and the Concept...........................................................................................................8
The Product.........................................................................................................................................9
Entry and Growth Strategy ...............................................................................................................11
4. Market Research...........................................................................................................................12
Target Market and Trends ................................................................................................................12
Competition and Competitive Advantage ........................................................................................13
Customers and Estimated Market Share..........................................................................................15
5. Marketing and Sales Plan..............................................................................................................16
Overall Marketing Strategy...............................................................................................................16
Sales Strategy....................................................................................................................................18
Advertising and Promotion...............................................................................................................18
6. Research and Development..........................................................................................................20
Development Status and Tasks.........................................................................................................20
Difficulties and Risks .........................................................................................................................20
Product Improvement and New Products ........................................................................................20
Costs..................................................................................................................................................21
Sole Distributorship ..........................................................................................................................22
7. Operating and Staffing Plan..........................................................................................................23
Location and Facilities.......................................................................................................................23
Strategy and Plans.............................................................................................................................23
Regulatory and Legal Issues..............................................................................................................23

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Staffing..............................................................................................................................................24
8. Financial Plan ................................................................................................................................25
Pricing strategy: ................................................................................................................................25
Key Assumptions...............................................................................................................................26
Profit and Loss Accounts...................................................................................................................27
Balance Sheets..................................................................................................................................29
Cash Flow..........................................................................................................................................30
Summary...........................................................................................................................................30
9. Critical Risks and Problems ...........................................................................................................33
10. Funding Requirements..............................................................................................................34
11. Appendices................................................................................................................................35
Appendix 1: Company Website.........................................................................................................35
Appendix 2: Prototype......................................................................................................................37
Appendix 3: Company Brochure .......................................................................................................38
References ............................................................................................................................................39

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1. Executive Summary
The concept of paying for water doesn’t sit well with the Irish psyche. Spoiled by a naturally
wet climate, combined with an inherent mistrust in the governing bodies of this country; the
recent introduction of water charges is a bitter pill to swallow for the Irish people. While we
at Terracotta Water Carriers do not agree with ripping off the Irish public, we do believe in
the idea of conserving this valuable and precious resource. With the installation of one of
our beautifully designed rainwater harvesters, a terracotta water carrier can provide a
practical solution to household cleaning and irrigation needs.
Description of the Business Concept and the Business
The key to this business is simplicity. This company is in the business of water conservation
and by extension, saving our customers money (i.e. water charges). We intend to enter the
market with the following three styles of terracotta rainwater harvesters pictured in
figure.1.1.
Figure 1.1: Three styles offered by Terracotta Water Carriers
The function of these devices is to offset mains water usage for a variety of household tasks
such as watering the garden, washing the car and providing drinking water for pets. To put
this in perspective, a hose uses more water in an hour than an entire Irish family does in one
day (Tap Tips.ie, 2015). We estimate that an investment in our 210 litre harvester costing
145€ will be paid back within two summers; based on the assumtion that it offsets hose-use
by 30 hours and current estimates of water charges fixed at €3.70 per 1000 litres.
Management Team
The four founding members met whilst studying their respective master’s courses at UCD.
What started out as a class project for an entrepreneurship module; turned into the
inception of a real business idea. Building upon their shared passion for sustainability and
the environment, Ciaran, Luke, Rob and Veena decided to take their idea to market. This
lead to a scenario where all four stakeholders each invested a 25% stake in the business
hence it was in all their interests ensure maximum profitability of the product. Pre-market
responsibilities such as market research, financial forecasts, commercialisation routes and

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product design were delegated according to each stakeholder’s previous experience. The
responsibility of selling and distributing the product is to be shared equally.
The Opportunity and Strategy
With the heavily disputed introduction of water charges in Ireland it is inevitable that people
will be looking for ways to conserve their water usage. In the second half of 2014, sales of
water butts at Woodies have more than doubled while google searches for such products
have quadrupled in the same period (The Journal, 2014). With the incorporation of
Terracotta Water Carriers, it is our intention to enter this relatively new market with our
beautiful selection of rainwater harvesters.
The idea of rainwater harvesting is not a new one; however the existing models on the
market are rather crude in design and predominantly moulded from composite plastic. Our
product is designed to be practical but also to be aesthetically pleasing, composed of
terracotta clay, giving it that must-have garden feature appeal for the summer of 2015.
The quest of getting this product to market will start off with hard work and simplicity. Our
distributor is willing to provide us with three different designs available in four size variants.
The minimum order is 1000 units at 3.50€ - 4.00€ each. Between three of our board
members there is sufficient storage space to handle this amount of stock.
Throughout spring, summer and early autumn, there are an abundance of garden orientated
events and farmers markets which are most likely to be attended by our desired customer
base. We intend to roll out a B2C and a direct marketing strategy by attending these events
and demonstrating our products. There will also be brochures provided with images
showing our product in designer gardens. These brochures will also act as coupons with a
code and a link to our website where customers who attended the event can avail of a 20%
discount.
A Terracotta Water Carriers website has been created which will provide customers with
information on our business, shareholders and most importantly, our company ethos. There
will be also a section where customers can place orders for our products.
Provided we reach our sales targets 2015, we will seek sole distributorship for the
terracotta-designed rainwater harvesters and expand our marketing resources throughout
the entire country. The prospect of investing in additional design features such as an
attachable power-hose will also be considered at that point.
The Target Market and Projections
Due to the company’s limited resources upon start-up the main focus will be on the Dublin
region. There are approximately 470,000 households within the greater Dublin area (Central
Statistics Office, 2011). The company needs only to engage with 0.7% of this market to meet

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its financial predictions by the end of year three. In order to avoid meeting competitors
head on, the company will target a niche market of middle to high income home owners
initially and expand in due course.
Research and Development
At present no research and development is required to penetrate the market. Upon
establishing a steady cash flow after year three, the company intends to improve our
products and expand the business to include additional features such as rainwater attic
tanks, power hoses and a filtration system.
Financial Projections
The projected cash flow and profit/loss statement of Terracotta Water Carriers is
summarised in tables.1 and 2. The price range varies with the capacity of the harvesters.
The business is a lean start-up with high profit margins.
50 Litres 100 Litres 210 Litres 350 Litres
Sales Pricing €49 €99 €119 €149
Cost of Sales YEAR 1 €23.00 €26.00 €28.00 €30.00
Volume YEAR 1 145 86 79 51
Volume YEAR 2 271 190 145 92
Volume YEAR 3 281 187 162 107
Sales Cost of Sales Gross Profit Profit margin
Year 1 €32,619 9,313 €23,306 71%
Year 2 €63,052 18,251 €44,801 71%
Year 3 €67,503 19,670 €47,833 71%
Funding Requirements
To facilitate start-up the four co-owners have contributed €250 each and have availed of a
€4000 bank loan from Allied Irish Bank at an interest rate of 12.99%. The €800 deposit for
Bloom is required by May 16th
and we intend to start trading from the beginning of this
month. The cost of inventory will be €3750 including shipping which will be payable by the
middle of April. The revenue generated by year 1 sales will be reinvested to cover the
equivalent costs in year 2.

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2. Management Team
Ciaran Gethings: Ciaran has a degree in Natural Sciences,
majoring in Botany from Trinity College Dublin and a Masters of
Science in Plant Biology from University College Dublin. Ciaran is
responsible for product research, operations and staffing; and
securing finiancial assitance business start-up.
Luke Martin: Luke has a degree in Natural Sciences, majoring in
Geography from Trinity College Dublin and a Master’s of Science
in Sustainable Energy and Green Technology from University
College Dublin. Having gained product-marketing experience
during his internship at OMI Industries, an odour-solutions
company; Luke’s main role in the company is determining the
commercialisation route to get the product to market.
Rob Kavanagh: Rob has a degree in Natural Sciences majoring in
Botany from Trinity College Dublin and a Master’s of Science in
Plant Biology from University College Dublin. Rob intends to
capitalise on several years’ experience within the retail sector
and apply his expertise to the logistics of shipping, storing and
distributing the product. Rob also played a major role in the
design and manufacture of the prototype created for
demonstration purposes.
Veena Arulmozhi: Veena has an undergraduate degree in
Engineering from Dr. M.G.R Educational and Research Institute,
Chennai, India and a Master’s of Science in Sustainable Energy
and Crops from University College Dublin. Drawing on her
engineering background, Veena is responsible for the product
design, sourcing the materials and calculating the financial
forecasts.

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3. Industry and the Product
The Industry
Due to a monetary value being assigned to the resource, the past year has witnessed
increased public awareness about conserving water. With the water charges coming in,
people are looking out for options to invest in products that can help them save water and
money. Looking at the present scenario, the future of the industry seems to be quite bright
and very optimistic. The market survey results have confirmed that the scope of rainwater
harvesting industry is huge (74% saying they would buy a rainwater harvester). Presently the
market is populated by large retailers offering garden water butts with plastic as the
material base and small companies specialising in rainwater harvesters. Looking at the
finance projections, it can be concluded that retailing garden water butts would yield
desirable profits. The finances also point out that the start-up capital is also low. The future
of investing in rainwater harvester is bright and the industry which now is the growth stage
will mature soon. During the growth stage the demand is higher in comparison to the
supply, hence low competition. Since the market is vulnerable at present to such a product,
industry maturity is expected soon.
The Company and the Concept
This company is in the business of water conservation and by extension saving its customers
money considering the introduction of water charges will put a monetary value on water. It
is our ambition to eventually become the market leader for all our customers water
conservation needs. Prior to realising this ambition it is necessary for our company to raise
sufficient capital to invest in such an enterprise. In order to penetrate the Irish market the
business will revolve around selling terracotta rainwater harvesters as opposed to plastic
models. These products have exceptionally high profit margins, allowing the company to
generate enough revenue to facilitate the desired expansion into other areas of the market.
Although a lot of effort is put in by the market competitors to create water butts which
mimic the appearance of terracotta, very few actually use this material. Upon realising that
it is financially feasible, this business offers its customers garden water butts in a varied
choice of styles, capacity and colour using terracotta as the base material as shown in figure
3.1. A lot of emphasis is laid on aesthetics and sustainability of this product, which gives the
business an upper hand against its potential competitors.
The four co-owners are expected to have an equal, hands-on approach with the initially
business approach based on a business-to-consumer and direct marketing strategy. Upon
meeting the projected sales targets, the plan is to expand the business over a wider area,
developing new products and improving on the existing products. This will require more
staff and resources to come on board.

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The Product
From a practical standpoint the function of these products is to offset mains water usage for
a variety of household activities such as watering the garden, washing the car or to act as a
source of drinking water for pets. To put this in perspective, a garden hose uses
approximately 600 - 750 litres of water in one hour.
This company believes that the aesthetic quality of these devices must also be of a high
standard to justify them as garden features. Figure 3.1 shows the three terracotta styles of
water carriers offered by the company. The use of terracotta as a base material gives our
products a unique selling point over our competitors who prefer to manufacture their
materials out of plastic. This material change will be promoted as most environmentally
sustainable as it offsets hydrocarbon usage while the aesthetic superiority of terracotta will
also be highlighted to our customers.
Helena
For those with a classical taste, this roman-style water carrier would
look beautiful against a white background, amongst some Laurel
bushes.
Beehive
For zoological enthusiasts, this beehive mould could compliment an
intricate floral arrangement which attract those buzzing, black and
yellow, pollen-collecting insects.
Cascata
This mould is designed to appeal to the botanists out there with a
compartment built into the lid for potting plants.
Each of these designs will be available in four sizes; 50, 100, 210 and 350 litres and are
priced according to these capacities. The main disadvantage associated with this product is
the brittle nature of terracotta. Following installation this product is just as sturdy as its
plastic alternatives however this vulnerability is exposed during transit. As we intend to
Figure 2: Terracotta Water Carrier styles

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establish ourselves as a reputable brand in the market, a one year warranty will be applied
to all products sold where customers will be offered a replacement product free of charge.
Pending on the timely delivery of the product inventory, the company is ready to enter the
market and commence trading and requires no further development of the product at this
point. Opportunities for expansion of the business are discussed in subsequent sections.

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Entry and Growth Strategy
The key to successful a market entry is approaching the target market directly to:
1. Catch their attention with a captivating sales pitch,
2. Demonstrate the products unique selling point and most importantly,
3. Establish the Terracotta Water Carriers brand name.
These objectives will be achieved by attending some of Ireland’s premiere gardening
festivals such as the National Ploughing Championships, Bloom and the Flavours of Fingal, to
name a few. This will afford the company the opportunity to engage their target market and
put the aforementioned objectives into action.
Pessimistically, the first three years will be considered the growth phase of the business and
the four co-owners have agreed not to take a wage during this period and reinvest any
revenue generated into the business. By limiting ourselves to the Dublin market initially and
enlisting in the use of a courier service to deliver our product, this should allow us to
operate the business on a part-time basis hence allowing us to earn a living in the
meantime.
The emphasis will be to provide stellar customer service so, as the business grows
customers will associate the Terracotta brand as reliable and trustworthy. The company has
created a chic and stylish website to facilitate online sales. There are also plans to maintain
a strong social media presence to reinforce the brand and entice new customers to by the
products.
Finally, the whole point of this business venture is to become the number one water
conservation company in Ireland. Upon raising sufficient capital, the company will stock a
variety of additional products associated with water conservation such as:
1. Rainwater collector for attic storage to offset bath and shower mains water usage.
2. Power hose adaption for garden models.
3. Filtration system to upgrade collected rainwater to a standard suitable for human
consumption.

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4. Market Research
Target Market and Trends
The concept of rainwater harvesting is not a new idea by any stretch. In many countries with
drier climates, the issue of water conservation is much more prevalent than it is in Ireland
and rainwater harvesting devices are commonly used as mitigation measures in these
situations. It is only since society has become more environmentally conscious that a
demand for such devices came about in Ireland. With the introduction of water charges it is
anticipated that the demand for water conservation devices will increase rapidly. In the
second half of 2014, sales of water butts at Woodies have more than doubled while google
searches for such products have quadrupled in the same period (The Journal, 2014).
With many companies already established in this market, each with greater resources at
their disposal than this company, it is necessary for “Terracotta Rainwater Harvesters” to
narrow its focus initially to gain a foothold in a niche market. This way the company is
avoiding head-on competition from its financially superior rivals. According to the Central
Statistics Office (2011) there are approximately 470,000 households in Dublin. Of these
households approximately 28% are apartments and are unlikely to have garden space.
Deducting these housing types, that yields a potential target market of 338,400 households.
This company intends to enter the high-end market in Co. Dublin initially, targeting middle
to high income households, refining the potential number of households even further to
approximately 140,000. Looking at things from the supply side, the company plans to buy
stock of 1000 units so it only needs to engage with 0.7% of this market to reach its sales
targets for year one. By focusing on this high-end market, it facilitates the high pricing of the
product resulting in favourable profit margins whilst allowing the company the opportunity
to develop a reputation of providing excellent products and services.
Upon achieving year one targets, any profit will be reinvested into the company to buy more
stock and potentially a company vehicle which would allow for expansion of the business
beyond the Dublin region. Although the target region may expand in year one, the target
market will remain the same, allowing for a high-priced product. Upon demonstrating its
ability to sell stock and run a good business, the company will seek sole distributorship for
the product in Ireland. At this stage there should be enough profits to employ an extra
delivery person or sales representative.

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Competition and Competitive Advantage
As previously mentioned there are a number of competing companies in this market.
Although massive retailers such as Woodies and B&Q stock a range of rain water harvesters
they are not considered competition in this instance as they do not specialize in these
products hence are not focusing specifically on the desired target market. Therefore the
companies which may offer this company some competition are those which specialize in
rainwater harvesting products and distribution.
Irish Water Butts <http://www.irish-water-butts.com/>
Strengths
 Selling products at a low price.
 Trading on a national scale.
Weaknesses
 Dated Website.
 No company brand.
 Products not aesthetically pleasing.
Opportunity
 Centre the company on a product of
superior aesthetic quality.
 Create a modern, user-friendly
website to facilitate online sales.
Threats
 Company is trading on a national
scale; would be difficult to compete
on this scale upon initial start-up.
 By centring the business on a product
of superior quality, it would be
difficult to compete with this
company’s price points.
Rain Barrels <http://www.rainbarrels.ie/>
Strengths
 Offers a wide range of rainwater
harvesting products varying in price
and quality.
 Emphasises importance of aesthetic
appeal of the product.
Weaknesses
 No company brand
Opportunity
 Build a brand as well as a business.
Impress early customers with
excellent customer service, a
personable sales pitch and prompt
delivery of the product. Upon
successfully achieving these
standards, customers can associate
the brand with reliability and value.
Threats
 Company is targeting a number of
different markets by offering a wide
variety of products as well as the high
end market terracotta water carriers
intends to target. If a superior quality
of service cannot be delivered, it
would be difficult to compete with
this company.

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Saving Water Ireland <http://www.savingwaterireland.com/>
Strengths
 An expanded product range to
provide water conservation solutions
all around the household as opposed
to focusing just on rain water
harvesting.
 Attempts to establish a brand.
 Trading nationally.
Weaknesses
 Website not very engaging.
 Emphasis is on cheap and practical
solutions, a strength in some markets
but a disadvantage in the high end
market.
 No emphasis on aesthetics.
Opportunity
 Build a more impressive, eye-
catching, personable brand than this
company’s one.
Threats
 Given that this company’s business
model is based on bargain basement
tactics, it would be difficult to lower
the price of terracotta products to
the price of these plastic ones. Not a
threat initially, but may become one
upon company expansion
From this SWOT analysis of the water conservation market, the stand-out strength the
competition has over “Terracotta Rainwater Carriers” is their ability to trade nationally,
extended product ranges and ability to undercut our disruptive pricing strategy should they
need to. However there are also some inherent weaknesses associated with most of the
competitors;
 Lack of an established brand,
 Dated/poorly maintained websites along with minimal social media presence,
 No emphasis on aesthetics or when there is, the product is severely over-priced.
In order to gain a significant competitive advantage, this company intends to pick up on all
these weaknesses and make them the core strength of the organisation. The methods
applied to achieve this are outlined in the marketing section.

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Customers and Estimated Market Share
As stated previously, the initial target market is middle to high income householders. This
niche market has been targeted for a number of reasons;
 Avoid head-on competition with other rainwater harvesting companies, and prevent
spreading the company’s resources too thin.
 This demographic is less likely to be off-put by our prices as long as the quality is
good and are readily accessible at a number of summer festivals and farmers
markets.
 Intend to play on the “keeping up with the Joneses” aspect associated with this
demographic, prompting word of mouth promotion of our products.
With an estimate of approximately 140,000 middle to high income households in the
greater Dublin region, the company only needs to sell to 0.7% of this market to achieve its
year 3 sales targets. Upon establishing the Terracotta Water Carrier brand, a more
ambitious share of this market will be targeted. In addition, using the revenues gained from
early sales, new resources will be invested in to facilitate the penetration into other
markets.

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5. Marketing and Sales Plan
Overall Marketing Strategy
In order to differentiate this company from the range of competitors and achieve the
projected sales targets, it is important to begin building a brand as well as a business. As
discussed in the market research section, a key weakness in all of the competitor rainwater
harvest companies was the lack of one brand within the market which consumers can trust
to provide an excellent service. Terracotta Water Carriers intends to fill this void in the
market by first targeting a niche market to establish the brand and then following up with
some marketing techniques.
Market Entry
Initially, the main objective is to get the company and the brand established. A high end
niche market will be targeted at first because customers within this category are likely to
have an interest in gardening hence are more likely to invest in an innovative and aesthetic
garden feature such as a terracotta water carrier. In addition, it allows for a high pricing of
the product, widening the potential profit margins at the early stages of the business.
In order to generate sales in this market, an emphatic launch strategy will be applied. The
company will attend a number of garden-orientated events and farmers markets
throughout 2015 such as those shown in figure.3.
Figure 3: Festivals Terracotta Water Carriers will be attending in 2015
These events will offer the co-owners an excellent opportunity to interact with the target
market directly. Bloom (2015) for example, is frequented by approximately 11,000 people
per day. Upon successful interaction with a potential client, a brochure (Appendix.3) with a
discount up to 20% off the products will be offered to the customer should they wish to buy
a harvester from the company website. These coupons are intended to stimulate word-of-
mouth interest by two methods;
I. The coupon can be activated only after the consumer likes and shares the company’s
page on social media outlets such as Facebook, Twitter or Instagram.
II. The unique code on the voucher can be used be used twice, prompting people to tell
their friends.

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This is intended to generate awareness about the company and more specifically, the
“Terracotta Water Carriers” brand for when it expands into larger markets. The main focus
at this early stage of the company is to provide a high-quality and efficient range of products
and services to solidify the company’s reputation.
Company Name
“Terracotta Water Carriers” is a play on the words from the infamous discovery of the
“Terracotta Warriors” in China. This discovery was made in 1974 by a couple of farmers in
China who were searching for a water-well. These impressive sculptures are depicted as
protectors to an ancient Chinese emperor in his afterlife. The rainwater harvesters in the
same vein are products of sustainability and can be viewed as contributors to the protection
of the future generation’s environment. The resulting name of the company is intended to
roll of the tongue easily and when customers ask the meaning behind the name, the
terracotta warrior story can direct the conversation to sustainability.
Company Logo
The Terracotta Water Carriers logo depicted in figure.4 portrays the concept of water
conservation through the water droplet icon depicted to be dropping into the “Terracotta
Water Carrier” font beneath. Additionally the entire logo is watermarked to reinforce this
concept further. The “Terracotta” typeface is enlarged and centralised to emphasise the
material in which all the company’s products are made from. It is also envisaged that by
giving this word a prevalent position in the logo, it will prompt customers to the enquire
about the origin of the name giving the sales team an opportunity to open their sales pitch
and link the product to sustainability as discussed in the previous paragraph.
Figure 4: Terracotta Water Carriers company logo

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Sales Strategy
The company will rely on a combination of direct sales at the aforementioned summer
festivals and on retrospective online sales facilitated through the company website
(Appendix.1). This approach is ideal during the initial stages as the cost of renting premises
is avoided. The rental of spaces at the festivals is more likely to give a return on investment
as there are high volumes of people anticipated at these events.
Upon placing an order, the product will be sent via courier service to the customer, the cost
of which is already included in the price of the customer pays for the product. This cuts out
the need of distributors or sales people at the early stages of business however upon
achieving successful establishment of the brand, investment in sales reps will be made and
avenues into stocking our product in retail outlets will be pursued.
Advertising and Promotion
Direct B2C Marketing
As the key market-entry plan is centred on direct sales at various gardening festivals, the
aim is to market the products primarily by interacting with the customer base and
demonstrating the product features. It is envisaged that the Terracotta Water Carrier team
member’s overwhelming passion and exuberance for the business, coupled with the unique
range of products will generate considerable interest in company at these events.
Inbound Marketing
Inbound marketing is the promotion of a company through blogs, social media and e-
newsletters, winning the attention of customers and directing them to the website. By
publishing the right content in the right place at the right time, our marketing becomes
relevant and helpful to our customers, instead of being a nuisance (Hubspot, 2015).
Although this form of marketing is unlikely to generate a significant amount of business
initially, it is ideal at the early stages of the business as it costs virtually nothing to carry out
and will undoubtedly raise awareness of the brand.
More specifically, this technique will involve creating a Facebook page, an Instagram
account and various other social media accounts, designed to promote and market the
company and its products. For example, the Instagram account could be used to take
pictures of the product in various designer garden settings to stimulate interest in the
product. These images can then be posted at scheduled peak usage times such as in the
morning to capture commuters or at lunch time when people are likely to be looking at their
social media profiles.
Company Website
A fresh and exuberant website has been created to facilitate online sales and give customers
an opportunity to find out more about the company and its background. This website,

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visible in appendix.1 was created via squarespace.com is far superior to any of the
company’s potential competitors operating out of Ireland. Customers have the opportunity
to place orders through a pay-pal account using a credit or debit card. Goods will be
delivered within a week via courier service.

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6. Research and Development
Development Status and Tasks
The outsourcing of the production of our terracotta water carriers is invaluable towards the
cash flow of the business at the start. Sufficient quantities of water carriers can be produced
and delivered to us for a relatively small price per individual unit. This strategy allows more
of the financial and intellectual resources of the company to be assigned to other areas of
the business other than manufacturing. Many opportunities will arise in the future for
further development of the company through our existing terracotta water carrier range
and new products ideas. With the future development of the company may come increased
sales and revenue. This may allow the company to produce the water carriers ourselves, if
financially worthwhile, or avail of discounts through economies of scale in production. Our
young, vibrant and passionate management team have many insightful ideas to be further
developed in line with our sustainable and environmentally conscious company values.
Difficulties and Risks
There will always be substantial risks associated with starting up a new business. This
business plan developed by our company will help to alleviate the uncertainties associated
with our business venture.
Raising capital for the business’ initial costs will require a loan to be approved and each
member of management contributing their own respective finances into the business.
Essential to our product purchasing power and marketing strategy is the securing of capital
in the form of a €4,000 loan from AIB (2015). The market research conducted by the
company and the associated positive feedback with our products shows that the public are
willing to spend money on high-quality terracotta water carriers.
Legislation dealing with the registration, compliance with taxes and employment laws of
start-up companies has been fully adhered to and is elaborated upon within the Regulatory
and Legal Issues section of this business plan.
The main risks to our business from a competitor standpoint would come from cheaper,
plastic alternatives to our terracotta water carriers. However, we aim to market our much
superior product towards a particular niche market consisting of avid gardeners and
members of the public with higher disposable income. This market, our research has found,
would not be discouraged by paying more for their water carrier if it was of a higher quality
and being sold to them by a company with company ethos and values such as ours.
Product Improvement and New Products
From the marketing research conducted by the company, it was revealed that there does
exist, a potential market for our product through consumer surveys. The investment in a
terracotta water carrier, by our customers, comes with the onus on our company to provide

21
aesthetically yet functional and durable products. Product improvements, in the future of
this company, will certainly place emphasis on the aesthetics of our products. As a business,
we want our terracotta water carriers to be focal points of the gardens in which they stand.
Thus, acting as a marketing device in themselves, whether being seen as a contemporary
sculpture in the garden or a conversational piece with our customer’s house guests or
neighbours.
The dimensions and shape or structure of the water carriers along with their capacities can
be altered to provide additional products for our company to sell in the future. The
company could potentially commission one-off unique terracotta water carriers to be aimed
at a niche market. Further accessories can also be included with our water carriers. These
may consist of ornamental power-hose pipes to help with watering plants, compartments
along the side of the water carriers that will directly feed water to grow water-loving plants
or the addition of a filtration mechanism to our water carriers to provide clean and
drinkable water. Some of these features are shown in figure.5. The filtration mechanism
addition would be mostly marketed at the more environmentally aware consumer who may
wish to save on further water charges or to one-off houses in the countryside which could
be termed “off the grid”.
Figure 5: Additional products to be added to the company's inventory upon successful market penetration
Further products which may be under research and development in the future could include
water mains tanks being fed through a rainwater harvesting mechanism similar to our
terracotta water carrier products. However, feasibility studies must be done first on the
financial viability to the company of such a venture.
Costs
Currently, the company has accrued no costs from our research and development activities.
This is due to our outsourcing of production of our water carriers. The research and
development conducted into the marketplace, competitors and future company ventures
has been undertaken by our management. Hence, minimal costs have been associated with
these activities.
Further along the lifetime of our company, it is expected that negotiations will be conducted
with our distributor of water carriers to get a discount on our bulk purchasing of their

22
products. Hence, this will give more money to invest back into our future production
facilities or the development of our new product ideas.
The initial costs of setting up a Research & Development department can be quite
substantial. Although this establishment may be feasible in the future, it is not part of our
short to medium-term planning and finance strategies. This department will need to wait
until the company is fully established and financially stable until it warrants further thought
and analysis.
Sole Distributorship
An important milestone for the company will be ensuring that we convince our distributor
of our terracotta water carriers to only supply our company in Ireland with their products.
This distributor currently produces these water carriers for the cheapest prices and any of
our competitors would find it difficult to produce these products themselves as cheaply or
to source such inexpensive water carriers.
This licensing agreement would help our company to “corner the market” in Ireland on the
sale of high-quality terracotta water carriers, if found to be in compliance with EU
Competition law. This means that our pricing structure could be altered to maximise our
company’s profits. This development would help with the raising of finance capital from
banks and help to further establish our brand on the Irish market for the roll-out of further
products.

23
7. Operating and Staffing Plan
Location and Facilities
Location
As a new start-up company, our business believes in placing our financial resources towards
supplying superior quality products and customer service. From this regard, Terracotta
Water Carriers does not currently have a fixed premises to conduct our business operations.
This strategy will save the company money on leasing office space. All business activities will
initially be conducted by our staff through the use of the company’s website, e-mail address
and landline telephone numbers. Communication and accommodation costs are elaborated
on further in the Financial Plan. As the business expands over time, this cost saving strategy
will be reviewed in regard to the lease or purchase of office space.
Facilities
Storage facilities for unsold or damaged stock are required for the business as the water
carriers themselves will take up substantial amounts of space. These storage facilities will
initially be provided by the use of warehouse storage space personally owned by a staff
member. This warehouse facility will be provided free of charge initially. A review of the
company’s storage facility requirements will occur after the demand for our product has
been truly gauged through initial water carrier sales.
Strategy and Plans
The operating strategy implemented by the company will involve outsourcing of production
of our terracotta water carriers. These water carriers will be produced in line with the
design, dimensions and capacities specified by the company. The completed products will
be transported via shipping to Ireland. The production and transport costs of these water
carriers will be further elaborated upon under our Financial Plan.
Unforeseen events which may halt production of our water carriers have also been taken
into account and a number of different production facilities have been identified as
potential suitors to take on our production requirements if needed.
The company will review over time whether future savings can be made through developing
our own terracotta water carrier production facilities in Ireland. Currently, the company is
content to progress with the strategy of outsourcing production and subsequent
importation of these finished products.
Regulatory and Legal Issues
The company will be run as a private limited company. The shareholders of the business will
consist of the management team with each owning a 25% stake in the company. This

24
business ownership strategy will allow limited liability on the shareholders if any debts are
accrued by the company. Therefore, Terracotta water carriers will be registered with
Companies Registration Office (CRO, 2015). Reports and accounts from our company will be
filed to the CRO every year.
As the company will be incorporated, it shall liable for corporation tax at a rate of 12.5% in
the Republic of Ireland and will be registered for tax purposes with the Office of the
Revenue Commissioners. Though as a newly incorporated company, tax relief may be
available for the first 3 years of operation.
The Health and Safety Authority (HSA, 2015) legislation on health and safety will be fully
complied with by the company with a risk assessment of our storage facility to be
comprehensively completed. Manual handling training will also be required for all
employees of the company. Employment of additional staff in the future will require the
company to ensure basic legal requirements for employees are in place in line with current
Employment Laws.
The shipping, storage and/or damage of the water carriers in transport will be covered by a
fully comprehensive insurance policy. The courier services used for transport of the
individually sold water carriers are also fully comprehensively insured against damage and
theft of their products being delivered.
Staffing
The management team does not currently envision the need for staffing levels to be any
higher than the four management members themselves until Year 2. The management team
will oversee all aspects of the company from finance, sales, R & D and I.T through to
marketing strategies for our product until extra staff are employed to deal with these tasks.
Further staff may be employed if the workload is deemed too much for management to
undertake, thereby, affecting customer service. These initial low staffing levels in Year 1 will
initially allow the new company to save money. Staffing needs will be constantly reviewed
by the company. Outsourcing of delivery of the water carriers themselves will be employed
by courier service as this service is seen as being relatively cheap and allows management to
concentrate on other aspects of the business.

25
8. Financial Plan
A financial report is a formal record of the financial activities taking place in the business.
The report encompasses the study of assets, liabilities, profits, loss, and flow of cash over a
period of time. These values depend on the capital invested and the returns on investment.
The company focuses on selling rain water harvesters. These harvesters are placed in the
garden and the products vary in style and capacity. The capacity of the water butts sold by
the company varies from 50 litres, being the minimum to 350 litres. The prices of the
harvesters are dependent on the capacity, while the company provides varied styled
products for the customers to choose from, for absolutely no charge extra. The prices of the
water butts are fixed by the management only after a through market research. This finance
report has the details of all the costs involved in running the business. Every industry goes
through a life cycle, which begins from the development and ideation stage and reaches a
decline state. The rain harvesting industry in Ireland is on the growth stage.
Figure 6: Industry life cycle.
The water charges introduced by the Irish Government has encouraged the public to explore
eco-friendly and economical options to conserve water.
Pricing strategy:
The company has analysed the market properly and the research suggests that the rain
harvester market is soon going to mature and as a precautionary measure the start-up has
adopted smart marketing strategies.
Disruptive Pricing:
Generally in a mature market, the major investors tend to lower the price in order to
capture the market. Since the company’s marketing research team believes that the market

26
might mature soon, we have adopted disruptive pricing strategy in order to penetrate the
market. The price range begins from €49 to €149.
Deviation from existing material used in the market:
The material used in the water butts is terracotta, which is completely recyclable and eco-
friendly in nature. The varying capacity, styles and colours are designed to attract more
customers.
Marketing techniques:
The company has adopted a direct marketing strategy to convince and explain the features
and positives of investing in our products. Since business is all about dealing with people,
direct marketing and face to face interaction has been adopted.
Figure 7: Market penetration strategy
Key Assumptions
The report is prepared after a thorough study of the costs involved in purchasing the
products, transport, packaging etc. The product is purchased in bulk from Quanzhou,
Kainuosen Import & Export Co., Ltd. This company is based in China and all the products are
shipped from Xiamen port in China. The cost of sales is assumed to be between 2 Euros to
3.50 Euros (assuming that dollar is equal to euro). This cost is inclusive of shipping charges
from China to Dublin. Since in year one the sales volume is not very high, the profits are also
not very commendable. In the first couple of months the business may experience a bit of a
loss, but as the marketing and advertising campaign improves over the time, the business
could break-even and optimistically, could start making profits by the end of august. The
sales volumes are assumed based on the water butts sold by other competitors (mentioned

27
in their online store website.) As observed by a popular press report, the sale of water
harvesters has increased dramatically (Journal.ie, 2014). The water tax has encouraged
people to invest in water butts. The water collected in them could be used for watering the
plants in the garden or cleaning their cars. The sales volumes are expected to pick up after
our promotion of the products at Bloom festival. The expenditures involved are calculated
using data acquired from researching on the market prices of the quantities. The product
prices are fixed comparing them with the other competitors. Unlike other competitors, the
packaging and delivery charges are borne by the company and the customers only pay for
the product and the company delivers the product all over Ireland at completely free of
charge to the customer.
The next step was to find out the expenditure of the company on monthly bases. Since the
company has borrowed a loan of Euros 4,000, a monthly repayment of 356 Euros including
the interest rates. The major expense included cost of sales, packaging and delivery. The list
of expenses is included in the summary.
Profit and Loss Accounts
For understanding the profit loss statements let us take a look at the product pricing and
sales volume for the 3 years. The table illustrates the related information.
Table.2: Product Pricing and volume
Capacity 50 L Capacity 100 L Capacity 210 L Capacity 350 L Capacity
Sales Pricing €49 €99 €119 €149
Volume YEAR 1 145 86 79 51
Volume YEAR 2 271 190 145 92
Volume YEAR 3 281 187 162 107
The business is a high profit margin one with minimal amount of energy, capital and time
invested. The expected profit margin is around 71%.

28
Table.3: 3 year Profit statement
PROFIT STATEMENT YEAR1 YEAR2 YEAR3
Revenues 41,418 80,060 85,771
Cost of Sales 11.825 23,174 24,976
Gross Profit/(Loss) 29.593 56,886 60,735
Expenses 20.688 57,108 65,592
Operating profit and
loss
8,905 -222 -4,857
Other Income 0 0 0
Net Profit/(Loss) 8,905 -222 -4,857
(2,000)
0
2,000
4,000
6,000
8,000
10,000
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
Value
Months
3 Year Profit Forecast
Revenues Gross Profit/(Loss) Net Profit/(Loss)

29
Balance Sheets
The balance sheets are a summary of the finance statement. The table below is a short
description of the finance of the company.
YEAR 1:
Product
Name
SALES
VOLUME
COST OF
SALES
SALES
PRICING
TOTAL PROFIT (EXCLUDING OVER
HEADS)
Product A 145 3,335 7,105 3,770
Product B 86 2,236 8,514 6,278
Product C 79 2,212 9,401 7,189
Product D 51 1,530 7,599 6,069
YEAR 2:
Product
Name
SALES
VOLUME
COST OF
SALES
SALES
PRICING
HEADS)
Product A 271 6,287 13,279 6,992
Product B 190 5,016 18,810 13,794
Product C 145 4,133 17,255 13,123
Product D 92 2,815 13,708 10,893
YEAR 3:
Product
Name
SALES
VOLUME
COST OF
SALES
SALES
PRICING
HEADS)
Product A 281 6,604 13,769 7,166
Product B 187 5,030 18,513 13,483
Product C 162 4,698 19,278 14,580
Product D 107 3,338 15,943 12,605

30
Cash Flow
Three year cash flow graph:
Summary
The capital invested in the business is 5000 Euros out of which 4000 Euros has been
borrowed as personal loan for small business from Allied Irish Bank. The rate of interest for
the loan amount is 12.99 %.p.a. The management team has invested 250 Euros each and
the stock is brought in bulk shipped from (Xiamen) China. The order was placed for 1000
pieces consisting of 250 pieces of each product. As mentioned earlier the products differ in
terms of capacity and style. The table below gives information about all the finance
involved in the business for the first three years. This is a summary of all the cost of sales,
expenditures incurred by the company and the sales pricing. The profits gained at the end of
each year has been calculated and mentioned in the table.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
06/04/2015
06/06/2015
06/08/2015
06/10/2015
06/12/2015
06/02/2016
06/04/2016
06/06/2016
06/08/2016
06/10/2016
06/12/2016
06/02/2017
06/04/2017
06/06/2017
06/08/2017
06/10/2017
06/12/2017
06/02/2018
06/04/2018
CASHBALANCE(EUR)
MONTH
3 Year Cashflow Forecast
Cash Balance

31
Table.4: Finance Summary
Capital invested: Euro 5,000
Bank loan Euro 4,000
Interest rate 12.99%
Year 1
Cost of sales (Year 1) Euro 921
Sales Pricing (Year 1) Euro 32,619
List of expenditures: (Year 1)
Stocks and Inventory Euro 1,836
Phone bills Office Euro 360
Mobile Phone bills Euro 300
Internet Bills Euro 240
Post Euro 300
Couriers Euro 5,201
Packaging Euro 4,000
Transport Euro 504
Interest Term Debt Euro 264
Insurance (Aviva) Euro 528
Stationary Euro 60
Copy Euro 24
Print Euro 72
Accommodation Euro 1,068
Advertising Euro 180
Promotion Euro 2,952
Website Euro 240
Total expenditure (Year 1) Euro 18,129
Loan Repayment Euro 4,000
Year 2
Cost of sales (Year 2) Euro 2,013
Salaries and Wages Euro 19,200
Employer’s Payroll Tax Euro 2,304
Stocks and Inventory Euro 3,036
Post Euro 300

32
Couriers Euro 9,529
Transport Euro 504
Interest Term Debt 0
Stationary Euro 85
Copy Euro 24
Print Euro 72
Website Euro 240
Loan Repayment 0
Year 3
Cost of sales (Year 3) Euro 2,572
Salaries and Wages Euro 24,600
Employer’s Payroll Tax Euro 2,952
Post Euro 300
Couriers Euro 9,698
Transport Euro 504
Interest Term Debt 0
Stationary Euro 120
Copy Euro 24
Print Euro 72
Website Euro 240
Loan Repayment 0

33
9. Critical Risks and Problems
There are several different risks that could be encountered in the future of the business and
here some of these potential risks will be discussed with regarded to “Terracotta Water
Carriers”.
Firstly in the context of the Irish market one risk is that with the impending general elections
in a year’s time, which the new government may decide on abolishing water charges. This
would make our product less desirable to the general population as they wouldn’t be
concerned with conserving water anymore and thus our potential revenues would decrease
as a result of this potential loss off customers.
Another highly probable risk is that if and when we become established within the market
place competitor companies will offer the same or similar products at a more cost effective
price than we will be offering. As a small start-up this would prove highly problematic to
overcome as large companies or retail stores i.e. B&Q etc. as we would not be able to
absorb the financial hit as effectively as large companies who have other revenue streams.
Perhaps the greatest risk is a problem with our supplier i.e. if our supplier where to go out
of business we would be working off the stock that we have in storage without the
possibility of replenishing said stock again, also if another company where to approach our
supplier and offer them a more lucrative deal for the purchase of the product financially we
would probably not be in a position to compete, if it were a company competing against us.
Transportation costs also come into play especially with the rising costs of oil around the
world. This would affect our company in our ability to ship our supply to Ireland and also in
being able to deliver our stock around the country if we were to use our transportation and
also would add extra cost if we were to use a courier.
Several of the above risks all play into the financial security of the company and this is a
major risk in terms of our ability to pay back our creditors and debtors. This would have
wide scale ramifications as an inability to pay back creditors and debtors would ultimately
lead to the winding up of the company and also as founders of the company the four of us
would then probably have to be declared bankrupt as well as losing the business.
Stock loss, damage of stock in transit and also work related accidents are also other risks but
these can be largely absorbed by taking our insurance in the case of work related accidents
and ordering sufficient numbers of stock with the knowledge that some of the stock may be
damaged or stolen.

34
10. Funding Requirements
To facilitate start-up the four co-owners have contributed €250 each and have availed of a
€4000 bank loan from Allied Irish Bank at an interest rate of 12.99%. The €800 deposit for
Bloom is required by May 16th
and we intend to start trading from the beginning of this
month. The cost of inventory will be €3750 including shipping which will be payable by the
middle of April. The revenue generated by year 1 sales will be reinvested to cover the
equivalent costs in year 2.

35
11. Appendices
Appendix 1: Company Website

36

37
Appendix 2: Prototype

38
Appendix 3: Company Brochure

39
References
Allied Irish Bank. (2015) aib.ie. Available from: http://business.aib.ie/products/finance-and-
loans/sme-loans [Accessed 20 March 2015].
Bloom. (2015) Bloom.ie. Available from: http://bloominthepark.com/facts/ [Accessed 7 March
2015].
Central Statistics Office. (2013) CSO.ie. Available from:
http://www.cso.ie/quicktables/GetQuickTables.aspx?FileName=CNA33.asp&TableName=Nu
mber+of+private+households+and+persons+in+private+households+in+each+Province+,+Co
unty+and+City&StatisticalProduct=DB_CN [Accessed 26 March 2015].
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March 2015].
Citizens Information. (2015) Citizensinformation.ie. Available from:
http://www.citizensinformation.ie/en/environment/water_services/water_charges.html
[Accessed 12 March 2015].
Companies Registration Office. (2015) cro.ie. Available From: https://search.cro.ie/company/
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company [Accessed 2 March 2015].
Health and Safety Authority. (2015) hsa.ie. Available from:
http://www.hsa.ie/eng/Your_Industry/Retail/ [Accessed 14 March 2015].
Irish-Water-Butts. (2012) Irish-water-butts.com. Available from: http://www.irish-water-
butts.com/prices.htm [Accessed 9 March 2015].
The Journal. (2014) Thejournal.ie. Available from: http://www.thejournal.ie/water-butt-sales-
woodies-1754100-Nov2014/ [Accessed 6 March 2015].
Rain Barrels. (2015) rainbarrels.ie. Available from:
http://www.rainbarrels.ie/?slug=index&cPath=100 [Accessed 9 March 2015].
Saving Water Ireland. (2015) savingwaterireland.com. Available from:
http://www.savingwaterireland.com/services.html [Accessed 9 March 2015].
Squarespace. (2015) squarespace.com. Available from: https://www.squarespace.com/login
[Accessed 4 April, 2015].
Tap Tips. (2015) Taptips.ie. Available from: http://www.taptips.ie/house-and-garden.htm [Accessed
6 March 2015].
UCD. (2015) UCD.ie/nova. Available from:
http://www.ucd.ie/nova/sussedcompetition/businessplantemplate/ [Accessed 1 March
2015].

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