I am looking to launch an interior infrastructure business based in Bangalore.
The average interior expenditure is approximately 7 – 10% of the flat cost, i.e. for a 35,00,000 INR (target customers) property, it is common to do interiors for 2,50,000 to 4,00,000 INR. Bangalore at any point in time has thousands of apartments upcoming, and all the apartments need interiors. In other words, the potential for Interior business is 10% of the cost of the total residential constructions happening in Bangalore itself (which is huge).
This is not ‘let’s try and see’ idea, this is a real opportunity, a ‘let’s put what we got to perform’ step.
Interiors and wood works are the most crucial parts of any building, ranging from doors, windows and fixture to aesthetic feeling, custom designed living rooms, etc. There is a large number of young people with high income who are willing to decorate their houses and to invest in interiors to feel better at home.
Apart from multi-storey buildings there are villas and luxury houses, where interiors play a key role adding glamour to the already highly priced structures. There is an upper middle-class to rich segment in Bangalore who invests in properties, which also means there is an opportunity to perform our services.
It’s the constructive industry with huge potential in residential space, need not to mention about commercial segment where companies and showrooms will make a huge investments for best designed interiors.
As a growing city, Bangalore will add thousands of square feet of office and residential space, which require interiors.
The market is mostly scattered, with local interior designers and carpenter designers, small scale business more concentrated on routine than on volume and variety. There is also second line interior designers who started as a company and are gaining markets. However, the market is big enough for all to grow as the housing sector itself is growing here.
After establishing the primary business and the human capital infrastructure, we will focus on market growth and rapid expansion to cover the whole city. As of now the market is simply big enough for all market players to grow without intensive competition. In the long run we will evaluate our strategy to acquire more customers. This strongly depends on how we handle our present customers, so our focus will be on customer satisfaction and building of a strong network.
Authentic approach is to advertise and wait for customers or wait for walk-ins. We will execute the most efficient ways to acquire customers through our network so at any point in time, projects in hand should be more than what we deliver: N (workers) = P (Projects) + 1.
As it is one of our core competencies*, we will keep that in our focus area and I am sure we will get more and more customer leads in our target segment. Gradually we will build contacts to reach other segments as well.
(*Open to discussion with potential investors.)
The ultimate aim is to acquire the talent and expertise to service the luxury segment where the business proposition and profitability is at highest.
Because, I feel that it has a great opportunity and a huge potential to un-tap, sort of hidden industry with less market players and enough space to grow as a business.
• Bangalore is one of the fastest growing cities in India with presence of strong IT and technology related companies with young population and increasing per capita income.
• The Forbes magazine considers the city as one of "The Next Decade's Fastest-Growing Cities". With a per capita income of 74,709 (US$1,352.23) in 2006–07, the city is the third largest hub for high net worth individuals and is home to over 10,000 dollar millionaires and about 60,000 super-rich people who have an investable surplus of 4.5 crore (US$1 million) and Rs. 50 lakh (US$ 90,500) respectively (Source: Wikipedia)
• Bengaluru is called the Silicon Valley of India because of the large number of information technology companies located in the city which contributed 33% of India's Rs. 144,214 crore (US$ 26 billion) IT exports in 2006–07
• The city is now filled with builders from every corner – from top level to C class builders constructing in all sides of city for the increasing housing demand.
• The city is expanding, There are lot of development projects which are underway to expand the city further e.g. relocation of airport is developing areas nearby, Expressway projects, Metro project will increase the property price in the areas it covers.
• Bangalore has young population with more liquid income and per capita expenditure. High literacy rate and employment opportunities to be noted.
• Smaller city compared to other major cities in India yet drives the economy by drawing huge FIIs.
• Due to its high elevation, Bangalore usually enjoys a more moderate climate throughout the year.
Why and how we do it:
There is a lack of professional reach for interiors for the middle class population in Bangalore, Offering interiors with professional design and construction will satisfy the need of customers.
We will build a team of organized professionals for identifying customers, designing and executing interiors in a professional way with lower TAT (Turnaround time).
Our main target customers are apartment buyers with flats costing 25,00,000 to 1,00,00,000 INR. On an average 4,00,000 INR of interiors will have a profit margin of above 50,000 INR. Over a period of time, we will gain competency in designing more creative ways and covering the villas and other luxury apartments which is a sub-segment with greater potential.
We also will cover commercial space by recruiting a specialist designer after gaining competency in construction and wood works. Finally we will also cover the industrial and companies space which requires great professional offering and Excellency and has the huge potential.
While we design interiors we always keep best designers who not only design in professional or creative ways but to see the psychological value to the customers after understanding them individually.
Developing and retaining the core competency is high priority, our competencies are excellent designing and reduced execution time.
The total budget for the business set up is 100, 00,000 INR ($196000). Given below are the initial investment requirement for initial setup amounting 56,70,000 INR, whereas the remaining investment will be used for monthly expenses for initial support of the operations. The breakeven point will be in max 2-3 years. We are enclosing an excel sheet with the monthly expenses and breakeven calculations.
Business Set-Up - Initial Investment:
Office Advance: 800000 INR
Interiors: 1650000 INR
Furniture: 250000 INR
Computers & Accessories: 550000 INR
Equipment: 1500000 INR
Software: 300000 INR
Incorporation Cost: 620000 INR
Total Cost: 5670000 INR
Profit to the investor: The percentage of profit share will be discussed with potential investors. Ideally it would be 20%.