INTRODUCTORY PAGE

Name of the business: Deep Diamonds Pvt. Ltd.

Address: The business will be located in the Zaveri Bazaar of Mumbai City as that area is a manufacturing hub for jewellery industry and is a great location to interact with potential customers and suppliers. The proper address is yet to be decided, but the area has been narrowed down upon.

Nature of the business: The objective of this enterprise will be to manufacture jewellery and wholesale it to retailers all over India. It will be a sole proprietorship with a total team of 30 employees. 20 people will be dedicated on the manufacturing aspects of the business whereas the rest will concentrate on marketing the company.

Name of the sole proprietor: Nilesh D Solanki

Contact details: D/32A Damodar Bhavan, VP Road, Vile Parle West, Mumbai (400056), Maharashtra. 8879309650 nileshsolanki141@gmail.com

In a market like India,

ENVIRONMENTAL AND INDUSTRY ANALYSIS

Opportunities:

a) In a country such as India, jewellery is always a safe bet. Consumers abroad are more brand conscious but in India wealth is measured according to the jewellery a person owns. The consumer psyche is such that diamond is always considered a good investment. Therefore, the mind-set of the average Indian consumer is a very big opportunity which must be exploited.

b) Furthermore, the market which has been targeted is not a niche one. It is a very wide market hence the customer base will be very vast. Since the business is not restricted to a particular region, the entire country can supply potential customers.

c) A major advantage for the business is an emerging new trend. Consumers now prefer diamond jewellery because it is in vogue internationally. Since consumers are more aware because of technology and social media they demand diamond products which are the primary focus of this firm.

d) If foreign trends can emerge in India, the opposite is also possible. As tourism increases in India, there is more awareness about Indian tastes and cultures abroad. This pattern has created a demand for Indian products internationally which is a huge benefit if utilised effectively. Therefore, the business can also expand by exporting goods. There are no excess tariffs or trade embargos in India which makes it an amiable country for foreign exchange.

e) Labour is cheaper than other countries which gives the business a competitive edge in foreign markets as a substantial cost of production has been reduced.

f) Marketing and branding can be done through social media channels.

Threats:

a) Although there are many opportunities available, there are considerable threats as well which cannot be overlooked. Competition is the biggest threat to this business. There are many jewellery wholesalers who have been in this business since decades and have a monopoly with customers. Moreover, these companies have an established brand loyalty which would be very hard to earn in a short time.

b) Fast fashion is an emerging trend in India which will affect this business. People are less inclined towards purchasing heavy jewellery and would rather spend on a known brand than fine jewellery which they would rarely use.

c) Although, labour is cheap there is a scarcity of skilled labourers. d) Emergence of China as a competitor. e) There has also been an unusual increase in gold and rough diamonds. f) India’s currency’s standing in the foreign market is very week which

increases cost. Overall, India’s economic scenario is poor because of the looming recession.

Critical issues for industry and environmental analysis

What are the total industry sales over the past five years? The value of diamond jewellery sold each year is approximately US$72 billion, which includes the cost of the diamonds, precious metals and other gems. The USA represents the largest market (50%), followed by Japan (15%), Italy (5%), India (3%), China (2%), The Gulf (2%) and other countries (23%).

What is the anticipated growth in this industry? The rough-diamond market is expected to remain balanced from 2013 through 2017. From 2018 onward, as existing mines get depleted and no major new deposits come online, supply is expected to decline, falling behind expected demand growth that will be driven by China, India and the US. Over the next 10-year period, supply and demand are expected to grow at a compound annual rate of 2.0% and 5.1%, respectively. The supply-demand outlook carries different implications for industry players at different points along the value chain, and it will impact the way they manage their business activities over the next four years and in the longer run.

DESCRIPTION OF THE VENTURE

Mission Statement – To successfully enter the Indian Diamond market and have customer bases in all regions of the country.

Vision Statement – To be a leader in diamond jewellery export and establish great consumer loyalty.

Products and Services offered: Products: Diamond rings, diamond necklace, diamond bracelets, diamond earrings, diamond watches and other diamond accessories.

Services: -Wholesaler and manufacturer of diamond jewellery - An outsourcing station for other wholesalers and resellers

Size of the workforce: 30 employees

Marketing personnel – 10 employees Manufacturing workers – 20 employees

Equipment

Factory equipment: -casting machine-polishing machine-Wax pulling machine -CAD/CAM

Office equipment: -5 laptops -Desks-Stationary -Wi-fi connection -Safe room (Godrej)

Background of the entrepreneur

A student of Mithibai College who is currently studying Masters in Commerce (Management). At an undergraduate level he studied business management studies from Ritumbara college.

He has a family business background of diamond jewellery retailing since last 40 years.

Rationale for starting this venture: - Strong family background in the industry -Changing consumer trends is a challenge.

Why will you be successful in this venture? –

The entrepreneur has an inclination towards diamonds because they are unique and exquisite. -Family history has given him a lot of exposure which will be a competitive advantage against other young entrepreneurs in the same industry.-Manufacturing was also a part of the family business which has provided a good network.

PRODUCTION PLAN

Jewellery manufacturing process includes most advance technologies and

dedicated research. Jewellery making is a very composite process undergoing a

long and slow procedure making it tough from the initial point to the

concluding point. Each product undergoes a series of procedures before we get

the net product as a beautiful jewellery product.

The natural components of jewellery (stones, metal, and accessories) will

undergo multiple processes. These jewelleries are unique and involve a lot of

time and skill. Except for personalised jewellery which are hand crafted most of

jewelleries are executed by casting machines. Following is a brief description of

all the process involve in the manufacturing chain

DESIGN MAKING:

Order to produce a unique piece , the very initial step is to create a dezign , this

is the point from where the magic begins! And idea of the end product by very

talented designers who then makes a sketch of the design . this process of blue

print designing is carried out by proficient craftsmen using techniques and

methods handed.

Each piece of jewellery starts off with a concept. A concept is basically a rough

desgn in the the mind of the designer and coastland giving art object a real

hand crafted origin the designers concept and drawings are used by the model

maker to create the original piece of jewellery .

MOULDING

Once the master piece of jewellery is complete it is used to make a high

technology mould ,which in turn is used to make wax reproduction of the

jewellery

After the sketch is complete with all the fine details, it is passed on to the

moulding section. In the moulding department the very experienced

professional moulders then turns the sketch into a master mould which sets

the base for the total procedure from the master mould is very complex level

of crafting as the final outcome rests on the master mould.

CASTING

Casting again is a very complex process and requires utmost skilled and

experienced casters for the desired final product The wax replicas are placed in

steel containers which are then occupied with the invest ment powder and the

containers are heated in a chamber to 550 degree which solidifies the the

powder and melts the wax leaving behind a perfect effect. Liquefied metal is

then poured into the flask , allowed to cool then demolished to reveal the

jewellery in casting form Filing is an essential technique in jewel.

FILLING

Filing is an essential technique in jewellery making, and although simple in

concept following proven practices combined with the right equipment and

tools, ensures the job becomes a breeze. Filing is used in jewellery to remove

excess metal, even out surfaces, smooth or to shape, form and texture pieces.

POLISHING

Polishing is another integral part in the process of jewellery making. Every part

must be while the mount is carefully made clean and polished to the highest

degree of smoothness so that each each and every part is attractively polishes

off. After stage setting, the polisher is credit worthy for giving the jewellery a

concluding polish compounds and ‘rouge’ must be meticulously got rid of

either careful washing by hand, or by use of supersonic cle aning baths.

EMBELLISHMENTS

Embellishments/Decorative processes: After the product has passed from the

polishing and finishing departments it has to undergo embellishment

processes. When the products get casted and foiled, the requires decorative

stones of the correct sizes and weight are cut and made with extreme

precision and are then assorted for the final setting which is done once the

products leave the foiling and finishing department. It requires immense patience and skill to

make the master-model and to produce an exquisitely casting free from defects which needs

minimum chasing to make it perfect.

FINISHING:

Once the casting process is over and caster delvers the product to the following department, they are then foiled with extreme attention for a smooth and soft finish. These castings are then hand finished in order to meet high standards.

QUALITY CHECKING:

After plating process, the product is brought to the checking department for

quality checks. Each employee is highly skilled to detect defects and if spots a

defect, sends it back immediately to the respective department for correction.

Marketing plan

Product – the business will focus primarily on the specialization of diamond products. Rather than varying the product range, importance will be placed on manufacturing and distributing diamond Jewellery . This gives then firm a competitive edge since consumers will perceive it as a highly specialized brand with great expertise in the area of diamonds. Broadly, the products will be divided in categories according to their function. The core products would include rings, earrings, necklaces, bracelets and watches.

Place –South india, (chennai Bangalore Hyderabad) north India (delhi, Chandigarh) west (Mumbai Pune Nagpur Ahmedabad, Jaipur)

Price The pricing strategy would vary from product product because it would depend on the karats of each product. However, here is a general overview:

-38,000-43,000 per Carat.

Promotion - Physically talking to retailers: since the firm is a 'B2B' model, it is imperative to build a good rapport with future customers. They need to feel a sense of security and comfort because a lot of trust will be required to take such a considerable risk. Also, this is a tried and trusted formula which has been effective every time in this industry especially. Approaching these retailers and getting an appointment would be a real challenge but given the

family background, there would be quite a few shops who would be willing to invest their time and money.

Gems and jewelry exhibition - not only is this is a great place for networking and socializing but also a hotbed for gathering information on new and trending designs. This is also a great place for strategic branding

Social media - with growing consumer awareness and a boom in e commerce, social media will be a great beneficiary on the ladder of success. It's not that just youngsters are akin to the Internet, even older women are actively found on platforms such as Facebook, Instagram and Whatsapp. The growing connectivity in the business world is mainly due to social media.

Word of mouth - since family was strongly present in this industry, there will already be some loyal customers. They can help spread the word which would lead to a snowball effect

Main potential risk elements

The Company may face the following risks during development:

Market risks: In spite of the good marketing performance in early operation of the Company, there will be competition with the existing famous retailers and subsequent components after entering the retail market. It is hard to predict accurately the final market share achieved in competition, therefore uncertainty exists in the development perspective.

Financial risks: Continuous input of great deal of capital is required for the series of purchasing plans, retail business and scale expansion of the processing factory afterwards. In current situation, equity financing is needed to solve the capital problem; otherwise the implementation of the above plans will be influenced.

Risks of raw materials: Though the raw materials of the Company are mainly from first-grade foreign jewelry suppliers and the good relationship with them are maintained, loose stones as non-renewable resource has growing price in the long run, which will have unfavourable influence on production cost and sales volume of diamonds the Company.

Risks of operation modes: During the promotion of chain business, capital shortage restricts the development of the main business and it is big challenge of the Company to guarantee the increase of operation efficiency and profiting capacity during continuous business expansion, as with increasing competition, the expansion of chain business may have the risk of reduction of the gross profit rate and net profit rate. Force majeure and unpredictable incidents may cause investment loss of the Company.

Countermeasures for risks

For market risks: Ameliorate the feedback system of market consumption information while enhancing marketing and set reasonable product prices to increase the profiting capacity of the Company. Accelerate product design and supply, enhance market strain capacity, adjust duly product structure and increase the output of popular goods. Further improve product quality and reduce cost, increase the comprehensive competitive capacity and market adaptation capacity of products.

For financial risks: The Company will implement financing in multiple channels and cooperate with famous financial institutions in a long term for uniform operation and planning of capital and to enhance routine management. Meanwhile, communication with the finance circle will be maintained for active capital operation for maximum payback for investors. In case of financing failure, the current situation of the Company enables operation with a slower speed.

For risks of raw materials: From a long-term perspective, the increase of prices shows investment value of this project in certain degree, which can be taken as a sales point of product marketing. To avoid the operational risk, the Company will in one hand continue to reinforce the cooperative relationship with suppliers to stabilize the prices of raw materials, and in the other hand will implement the strategy of brand creation during development, maintaining customers and prices through high-quality products and eliminating the influence of market prices fluctuation on the product prices of the Company. Meanwhile, after successful of this financing, the Company will purchase rough diamond factories and seats of Shanghai Diamond Exchange to further stabilize raw material supply.

For risks of operation modes: The main reasons for the profit loss of current enterprises of jewelry chain business are incomplete industry chain resulting in excessive product cost, or not high standard of designing and processing and not strong product originality, or not enough understanding of the market and consumption trends resulting in unbalance of profit and loss of sales volume. The risks are controllable for this project unlike the chain business of other enterprises since raw material procurement, feedback and collection of market information, its own processing and design capacities and good relationship in the industry chain are favourable conditions for chain business.

FINANCIAL PLAN

SOURCES OF FUND

EQUITY CONTRIBUITON AMOUNT

PERSONAL CAPITAL 1,00,00,000

BANK LOAN 50,00,000

LENDERS 50,00,000

TOTAL INVESTMENT 2,00,00,000

PROFIT AND LOSS STATEMENT

YEAR 1ST YEAR 2ND YEAR 3RD YEARsales 19200000 24000000 30000000COST OF GOOD SOLD 13440000 16800000 21000000GROSS PROFIT 30% 30% 30% 30%OPERTAING INCOME 5760000 720000 9000000

EXPENSEA) SALARYB) PROFESSIONAL FEELSC) TRAVELD) RENTE) INSUARANCEF) MARKETINGG) MISC COSTTOTAL OPERATING COSTINTREST EXPENSEDEPRICIATIONTOTAL EXPENSE

3600000300000200000300000500001000002500045750005400001000005215000

3600000300000200000300000500001000002500047500005400001000005215000

36000003000002000003000005000010000002500047500005400001000005215000

NET PROFIT 545000 2075000 3785000