The Richmond Community Development Foundation

Business Plan
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Table of Contents
Business Overview
Description of foundation’s business 2
Major demographic, economic, social and cultural factors 2
Major players (suppliers, distributors, clients) 3
Nature of the industry 3
Trends in the industry 3
Government Regulations 3
Market segment 3
Products & services 3
Pricing and distribution 3
Market Trends 4
Implications or risk factors 4
Competitors and type of competition 4
Competitors' strengths and weaknesses 4
Competitive advantage 5
Sales & Marketing Plan
Customers 5
Pricing & distribution 5
Suppliers 5
Customer service policy 5
Advertising & promotion 5
Operating Plan
Business location & requirements / advantages / lease details 6
Equipment / technology / R&D / environmental aspects 6
Human Resources Plan
Key employees 6
Policies & procedures 7
Action Plan
Action plan & timetable 7

ANNEX:
A] Executive Summary
A brief description of The Richmond Community Development Foundation,

B] Financial Plan

C] Funding Proposal

D] Motivation for Pottery Project

E] Programme of Action

F] Constitution
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Business Overview

LEGAL NAME: The Richmond Community Development Foundation.

TRADING NAME: The Richmond Community Development Foundation (RCDF).

BUSINESS ADDRESS: 1 Walker Street

Richmond
Northern Cape
South Africa

PHONE: 073-476-1746

E-MAIL: richmond@pakedi.co.za

Description of the Richmond Community Development Foundation

The Richmond Community Development Foundation is a community development project established to improve
the lives of the unskilled and impoverished community of Richmond in the Karoo. The Richmond community
Development Foundation not only works at the social upliftment of the community but is a skills provider that will
establish small cooperative industries in the town of Richmond Northern cape, where there is currently no existing
industry or opportunity for employment.

The Foundation has as its focus a pottery & ceramics project, to produce quality ceramics and tableware, with a
focus on the art of ceramics, using local clay from the Karoo, it is the easiest skill to teach and with a little practice
members of the project can be producing items for re-sale within 2 weeks of starting the project, thus ensuring an
almost immediate income generation.

The Foundation is comprised of a sewing project which is the second income generation focus, [the RCDF sewing
project will be producing high end bed-linen (Using Traditional African "Batik" techniques and embroidery), a
handbag production line, and quilting project.

The third income generation focus points are a carpentry project, where the foundation will restore old period
furniture and produce furniture from old wood. The foundation would eventually have a trained team to do
renovations and restorations - eg plumber, painter, builder, plasterer, and electrician.

The foundation has started a food gardens project which has received kick-start funding from the Nama Karoo
Foundation, half an acre is already under seed, with a half acre orchard (Quinces, peaches, apricots, figs, pears
and table grapes) a further half acre has been planted with “Kanker Bossie” an indigenous herbal bush (Proven in
the treatment of HIV/AIDS),and also train a team to do property maintenance and gardening, etc. The social
aspect of the foundation is the food gardens project to supplement the local soup kitchen (feeding between 100 to
200 children on a daily basis) and produce vegetables for resale. Supplementing the feeding scheme with our
food gardens project is a priority for the foundation. With canning and preservatives production from the extensive
orchard (Peaches, apricots, quinces, and figs) and vineyard on the property. Sour figs (Carpobrotus edulis) will
also be propagated for the delicate wild fruit they produce and made into sour fig preserve.

The Richmond Community Development Foundation will produce products using locally sourced natural
resources: 100% cottons, local clay and wood, and angora wool.

It has been proven worldwide that dumping of aid into communities has no benefit without creating sustainable
development and skills transfer to the local community. Thus the foundation needs to not only get the community
involved in growing the produce for the feeding scheme (Soup Kitchen], but also has to place a major focus on
skills training and development of a sustainable community based industry.

MAJOR DEMOGRAPHIC, ECONOMIC, SOCIAL AND CULTURAL FACTORS

Our products fit the foundation into overall social and economic trends. Renovation investment has continued to
increase as the population ages: people tend to stay more at home and invest in their comfort (cocooning). In
addition, our market niche fits into current lifestyle trends in that people are continually buying articles to improve
their living space: high-quality linens, soft furnishings and tableware add aesthetic value and comfort.

Home comforts account for a large portion of household spending. Further, the appeal of home ware products
made from natural resources remains strong in today's markets, with current trends pointing to reduction of our
carbon footprint. Their warmth, artistic look and natural feel are intangible factors favouring our specialized
products.
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In addition our products have the added value that they are manufactured by a community development project
whose sole purpose is community upliftment through skills training and empowerment of the local community.
Even though the products produced will be manufactured by the community the products for sale will be of the
highest quality with no compromise on production techniques, thus making the “Ag shame” factor a usable
product and marketing benefit to The Richmond Community Development Foundation.

MAJOR PLAYERS
The manufacturing of products made from natural fibres and resources is very concentrated, with a few
manufacturers occupying 75% of the market. However, the natural fibre markets have traditionally been very
fragmented, with a large number of small operators, both for clients and suppliers. The only other true natural fibre
manufacturing is the hemp industry, which is also very small and fragmented. The natural products market is
growing and with suppliers still highly concentrated and minimal, it is a niche that The Richmond Community
Development Foundation can easily fill.

NATURE OF THE INDUSTRY

The Crafts market is stable and mature and represents a large part of the manufacturing sector; the majority of
craft work is taken up by traditional African beadwork, which has become quite saturated. The Richmond
Community Development Foundation will be taking up the smaller sector of the crafts industry, namely, pottery,
linen, soft furnishings and wood products, the sector of the industry with the greatest potential for growth. It is a
niche market which is significant and to date it has not been exploited.

TRENDS IN THE INDUSTRY

While the crafts industry is a large one, trends show that it is one with the largest potential, worldwide industries
are going “Green” and people are tending towards green products and things organic. Reducing the carbon
footprint is the new buzzword, with The Richmond Community Development Foundation subscribing to this new
global trend. The fashion, home and décor industry is also tending towards the African theme, The market for
custom products such as those from The Richmond Community Development Foundation tends to be better
protected from fluctuations in the market and The Richmond Community Development Foundation is ideally
placed.

GOVERNMENT REGULATIONS
The Richmond Community Development Foundation is registered as a Non-profit organisation, with registration to
be completed with the Receiver of Revenue so as to comply with tax directives. The Richmond Community
Development Foundation will also be registered with the department of Trade and Industry in order to comply with
all existing legislation and fundraising requirements. As each group of trainees from the community complete their
training they too will be individually registered as co-operatives with the department of Trade and Industry.
The Richmond Community Development Foundation will comply with dept. of Labour regulations concerning UIF
& Workmen’s Compensation. The Richmond Community Development Foundation will also be registered with the
SETA (Sector education and training authority) and SAQA (South African qualifications authority), so as to comply
and fulfil all requirements required of skills training providers.

THE MARKET

MARKET SEGMENT
The informal trading sectors (the cottage industry), has become a large segment of the economy and has
numerous incentives from government to accelerate growth. The cottage industry is an attractive alternative for
the consumer in that it is the sector of the economy where the consumer is able to deal directly with the supplier
and find the alternative products not readily available in the formal trading sector.

PRODUCTS & SERVICES

The Richmond Community Development Foundation provides superior quality custom-made bed linen, soft
furnishings, pottery and ceramics and furniture, with the professional restoration of period furniture and antique
books as a n additional service. Our products target the mid-to-high-end of the market.

In South Africa, The Richmond Community Development Foundation has only minor competition for our product
lines from small manufacturers in the cottage industry. In the ceramics industry our only competition comes from
Ardmore ceramics but there is no reason that we cannot compete with them for a share of the market as they
currently have no competition. With the advent of craft markets, The Richmond Community Development
Foundation must compete for floor space and point-of-sale advertising.
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PRICING AND DISTRIBUTION
Compared to its competitors, our pricing is in the top 30% of the industry. Products are available through standard
retailers in the industry, to curio stores, specialist boutiques and to craft markets. In the case of standard retailers
The Richmond Community Development Foundation couriers to the retailers' central warehouses, thus
capitalizing on existing distribution channels. Marketing efforts are concentrated on the worldwide web and in
fashion and décor magazines where an existing system of submitting a single product can be done for free, with
contact details listed on a page of suppliers.

MARKET TRENDS
In 2008 (latest statistics available), 3 out of 4 households spent money on renovation and interior comfort; this
percentage has been fairly constant since 1989. Customers have become increasingly sophisticated and are
seeking higher-quality materials and workmanship.

The demand for interior decor is expected to increase over the next five years as the renovation and home
comforts market continues to grow. Interior home comfort in particular is forecast to see fast growth, especially in
South Africa where interior design and renovation is becoming more upmarket. The trends over the past 10 years
have shown that it is basic human nature to continue to improve ones living environment, and the trend is going to
continue.

IMPLICATIONS OR RISK FACTORS

The Richmond Community Development Foundation will initially rely more heavily on direct consumer purchases
than sales to major retailers. The location of Richmond, situated in the heart of the Karoo, has forced us to look at
our marketing strategy and thus:

The Richmond Community Development Foundation has to rely on its basic strengths, which are:
1. Superior quality products; unique ceramics, tableware, linen, soft furnishings, and furniture.
2. Excellent service; customized "made to order" fit; our ability to produce smaller orders which the large
manufacturers cannot do.
3. Access to distribution networks; Situated on the N1 highway between Cape Town and Johannesburg
4. Have the advantage of being a community development project, which adds to our “Green” appeal.

PLANNED RESPONSE
Our marketing approach has shifted to address the mid to high-end customer with a concentration on specialist
retailers, art galleries, specialist trade fairs, (Design indaba, Hobby-X, Beadex, The Rand Show, Tourism Trade
Fairs, National Parks Retail Outlets, etc.), community craft markets, and interior designers and export markets.
The Richmond Community Development Foundation have promotional literature, a web-site and will place
signposts at 5km distances from the town in both directions to attract the passing tourists to our on-site retail
outlets.

The Richmond Community Development Foundation will employ a full time sales and marketing specialist on a
commission basis to liaise with clients and potential clients so as to, not only facilitate a steady growth in sales,
but also to sell the community development project as a successful initiative and community regeneration.

The emphasis will be on our products’ quality over mass-manufactured goods and our focus remains on the
interior design market. Our price advantage over U.S. and European products positions us extremely favourably
for exporting with the current favourable foreign exchange rate and the absence of significant competitors can
facilitate expansion of The Richmond Community Development Foundation.

OUR COMPETITION
COMPETITORS AND TYPE OF COMPETITION
There are few specialist craft manufacturers producing high end ceramics, linen, furniture & furnishings and as
such we can be assured of capturing a segment of the industry. Several local operations make up the local
marketplace with competition arising from artisan ceramicists and carpenters making heavy furniture (kitchen
cabinets etc).

COMPETITORS' STRENGTHS AND WEAKNESSES

Major strengths of large competitors lie in the economies of scale given by their broad brush approach to the
marketplace. The large size of these companies allows them better access to retailers across South Africa and
concentrates their efforts in large scale commercial production. As such, they are not positioned to enter the
specialist small scale market without significant losses incurred by small scale production (factory floor has to be
reconfigured for each new product, which is extremely time consuming, and a large portion of equipment and staff
stand idle while only a section of the production floor is being used to produce smaller quantities). They therefore
offer a service and product that we as a small scale specialist operator cannot fulfil but we on the other hand are
ideally geared to fill the niche that they cannot.
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The Foundation has decided to concentrate on the manufacture of specialist individual made-to-order products,
which fills the gap opened by the weakness of the large scale operators. Large manufacturers and operators offer
products on a large scale (not at all similar to ours) and they generally have close relationships with retail
superstores as they are able to supply the larger retailers because of their size and less specialized nature of their
products.

COMPETITIVE ADVANTAGE
The Richmond Community Development Foundation's advantage resides in its niche: the Richmond Community
Development Foundation are big enough to supply large retailers, yet offer high-quality products that respond
directly to the tastes of the mid to high-end market segment. Even The Foundation’s higher quality products and
customized production, has a distinctive advantage over the "one-size-fits-all" approach of the competition that
allows ample room for smaller specialized competitors such as The Foundation to thrive. The Foundation intends
to continue positioning our products in the higher end of the market.
In superstores, where our products are at the greatest disadvantage beside Large Scale manufacturers, our point-
of-sale marketing efforts will pay off and our sales will continue to strengthen.

CUSTOMERS
1 Onsite sales at The Richmond Community Development Foundation to passing tourists travelling the N1
highway between
Johannesburg and Cape Town
2 Bookstores and curio shops, in Richmond Northern Cape.
3 Craft Markets in Cape Town, Johannesburg and Durban.
4 Trade fairs such as Hobby-X, Tourism Indaba, Interior design fairs, the Rand Show, Royal natal show
5 Curio Shops & National Parks retail outlets.
6 Specialist home ware stores countrywide
7 Interior designers
8 International Exports
9 Period furniture dealers
10 Art Galleries
11 Specialist delicatessen’s
ADDITIONAL INFORMATION
The purchasing decision for The Richmond Community Development Foundation's products rests with the
individual buyer. The Richmond Community Development Foundation will be supplying individuals, contractors
and retailers. This improves access to our customers, allows us to better assess and satisfy their needs and
allows us to compete easily in the superstore market. But across all our product ranges we will continue to assess
the needs of our clients and adapt accordingly.

SUPPLIERS
The Richmond Community Development Foundation's production process uses primarily natural products which
are readily available on the market from numerous sources. This flexibility enables us to obtain products that meet
our exact requirements at very competitive prices.

ADVERTISING AND PROMOTION

Communications efforts consist mainly of our web-site, product brochures & flyers and word of mouth. Direct-to-
customer advertising is rare in this industry and, aside from customer satisfaction surveys, none is planned, but
we will make use of all the home & décor magazines free advertising resources as we possibly can. In conjunction
with this, we will produce a monthly newsletter that will be e-mailed to all the retailers and specialist stores.

PRICING AND DISTRIBUTION

The Richmond Community Development Foundation has access to a central warehouse in Johannesburg and, as
the N1 Highway passes the town, products for distribution will be sent by road to the Johannesburg warehouse
which will be the central distribution and collection point. Delivery to a central warehouse has still to be
established in Cape Town. Pricing is in the top third of the market.

CUSTOMER SERVICE POLICY

Customer service is enhanced by a website and inquiry line, quarterly meetings with main distributors and unique
product packaging which includes customer feedback surveys. The aim of the Richmond Community
Development Foundation is to empower the impoverished community of Richmond and, as such, the customers
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and donors who support the community development project will are entitled to not only the best quality products
but also the best in customer service. We aim to see every customer a satisfied one.

LOCATION
The Richmond Community Development Foundation operates out of a stand-alone plant, at no 1 Walker Street,
Richmond Northern Cape.

SIZE AND CAPACITY

The building houses three production lines: sewing, ceramics and carpentry. Only 5% of the building is used as
office space. The Richmond Community Development Foundation are planning to add an additional property to
this building for which an application to secure the property on a 99 year lease at a reduced rental has been
submitted.

ADVANTAGES OR DISADVANTAGES
The facilities are conveniently located close to the centre of Richmond and are just off of the N1 Highway.
However, the building lacks display/sales space, which will be addressed by the acquisition of the additional
property. The planned addition would allow us to almost double our plant facilities to meet increased production.

LEASE OR OWNERSHIP DETAILS

The existing building belongs to Dr. Peter Baker a founding member of The Richmond Community Development
Foundation and a driving force behind the regeneration of Richmond, who has given the Richmond Community
Development Foundation occupation of the property rent free. The second building belongs to the Richmond
Town Council and has been unoccupied for the past ten years. We are currently trying to secure a lease and
should this not happen another property is available for which we will need to raise the funds for an outright
purchase from a corporate donor.

EQUIPMENT, FURNITURE AND FIXTURES

All equipment will need to be purchased, or donated by corporate sponsors as the whole business is a community
development project, with its main aim being sustainable income generation for the unskilled and unemployable
impoverished community of Richmond. Some equipment has already been donated by corporate sponsors.

CURRENT EXPENDITURES / EQUIPMENT REQUIREMENTS

While the foundation has put a focus on equipment being donated, should the equipment not be donated the
foundation will need to raise R 1,485,995.00 which is earmarked for equipment to the community development
projects.

RESEARCH AND DEVELOPMENT

Our R & D efforts have centred on market studies and consumers, determining changes in their tastes and buying
habits and responding to them. R & D will form an ongoing process and be a key part of the Richmond
Community Development Foundation’s policy.

ENVIRONMENTAL COMPLIANCE
Most of our activities consist of assembly work. Only the staining process is subject to environmental regulations,
where the Richmond Community Development Foundation fully complies with used material disposal regulations.
The Richmond Community Development Foundation has instigated a strict recycling program.

ADDITIONAL INFORMATION
There are two boreholes on the property which will be used for the food gardens project as well as for the felting
process, water will be used by The Richmond Community Development Foundation in accordance with current
worldwide “green” initiatives and policies, our aim will be to conserve and recycle water.

HUMAN RESOURCES

KEY EMPLOYEES
QUALIFICATIONS
1 Project Facilitators (2)
Furniture Restoration and carpentry projects and food gardens
Sewing and Ceramics projects
2 Project Administrator (1)
Administration of all projects
Web-site and financial control, liaison with sales & marketing and project fascilitators
3 Sales & marketing Specialist (1)
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Client liaison, sales & marketing
Liaison with Administrator and project facilitators

Beneficiaries of the Richmond Community Development Foundation & Project Employees

1 Carpenters (10)
Furniture Restoration and carpentry
To be trained in carpentry skills, reliability
2 Gardeners (6)
Planting, maintenance and harvest of food products
Low skills, reliability
3 Sewing Project (10)
Production of Linen, soft furnishings and tableware
To be trained in the technical and artistic aspects, reliability
4 Ceramicists & potters (10)
Pottery, tableware and ceramics, reliability
5 Book binding & Book preservation (6)

ADDITIONAL INFORMATION
The Richmond Community Development Foundation plans to add training and income generating positions as
and when additional funds become available.

POLICIES & PROCEDURES

HOURS OF OPERATIONS
8AM-5PM, usually 5 days/week, sometimes 6 if orders are due Flexibility necessary – particularly at harvest
time, say 6.30/7 am

NUMBER OF EMPLOYEES
29 full-time and 4 principals

VACATION PROGRAM
Each employee has a 3-week vacation yearly. Skills development projects will be closed last 2 weeks of the year
at Christmas and first week of January. The exception to this will be the food gardens program where the
community members working on this project will take their leave on a rota system during the winter
months when it is too cold to work out of doors.

PERFORMANCE ASSESSMENT
Performance assessment is done yearly in mid-January. Productivity and quality are our two main criteria.

TRAINING AND DEVELOPMENT

The Richmond Community Development Foundation is a non-profit organisation with its sole purpose for
existence being skills training. Each staff member undergoes an initial 6 month period of intense skills training,
with an additional production/training phase of 18 months, in which members are able to acquire working
experience in the various processes. In the final 12 months of the three year training period, training in
entrepreneurship is given with members being taught how to run a small business.

During this period the members are organised into co-operatives and are assisted with registration of their co-
operatives and with obtaining funding to establish their co-operatives.

The Richmond Community Development Foundation will then transfer production orders from the beginning of the
fourth year to the co-operatives and begin training a new group of skills learners. The Richmond Community
Development Foundation will remain a marketing arm of the co-operatives and give management assistance
where it is needed.

REMUNERATION AND BENEFITS

Benefits and salaries are comparable to those in the industry and overtime hours are sometimes required. A profit
sharing incentive plan is planned for the future.
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ACTION PLAN

A1 Premises have been secured to start the project

February 2009
1 Raise Equipment and Finance to start the project
June 2010
2 Set up Training & Production facility at 1 Walker Street Richmond
Complete except for equipment
3 Identify Skills learners from the community and do an Induction to the Community development project
Completed
4 Begin Training and begin planning product range for production
July 2010
5 Develop sales support material and brochures; plan all marketing and sales systems, Ensure participation
at National Home & decor shows
January 2011 + following months
6 Sign retail agreements with 1 major retailer and 5 specialist retailers
July 2011
7 Begin Production of product orders for re-sale
February 2011

8 Begin entrepreneurship training and identify and start registration process of co-operatives
July 2011

9 Begin Identifying new group of learners, and start the training process afresh, Assist the new co-operatives
with production difficulties
January 2012

ADDITIONAL INFORMATION
For the coming 2-3 years, all our major activities involve training, market development or product launching.

OBJECTIVES / DESCRIPTION OF THE PROJECT

Our general goal over the next 5 years is to improve the lives of the community of Richmond by empowering them
with skills and creating an industry from which they will be able to achieve a sustainable income with our
developing a market and increasing sales, primarily in the local market with steps into the export market (Europe
and the United States of America). The ultimate goal is to achieve 50% of gross sales from exports while
developing domestic sales.

BUSINESS HISTORY / NATURE OF OPERATIONS

The Food Gardens project was started with kick-start capital of R 2,000.00 from the Nama Karoo Foundation, the
first planting is in, with the first harvest due in January 2010. Despite the shortage of implements, and the non-
operational irrigation dams the food gardens will be able to achieve a remarkable harvest for this it’s first season,
The vineyard is carrying well and ensures a good grape harvest (180kg’s harvested this season), while the fruit
trees which had been neglected for several years are recovering well and will be ready for next year (Harvested
48kg’s of figs), RCDF has also planted 8 new Peach trees and 10 new Quince trees.

The business will be starting skills based operations in January 2010 9Depending on the acquisition of finance for
equipment) as a partnership, run by highly skilled and experienced artisans and project managers concerned
about the decline of the local community due to poverty. At the start, the foundation will focus on training and then
develop the foundation into a business able to sustain the local community. The foundation has been constituted
and plans to meet this desperate need. As the skills base and market for our products grows and conditions in the
community improve. The foundation aims to spread its skills base to neighbouring towns suffering from the same
lack of skills and lack of industry to employ them.

PRODUCTS AND SERVICES

The foundation is a training institution manufacturing linens, soft furnishings, tableware and ceramics, with period
furniture restoration and furniture manufacture. Products are of a high quality and target the mid to high-end
segment of the market.
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PROJECT FINANCING
Financing for the project will be raised from the corporate sector for equipment and the initial training phase of the
project. Funds are also required for the product development and marketing phases of the project, at the end of
the initial 3 year period the project will be self sustaining. Funding is required only for the start-up and the first two
years of the project.
• Capital Equipment, property upgrade & security R 270,000.00
• Administration Expenses R 591,461.50
• Running Costs R 136,660.00
• Project equipment & training tools R 474,595.00
• Project Materials (raw material) R 190,839.00
• Training fees for learners in the first year R 378,480.00
• Training fees for educators/trainers R 46,000.00

Total required R 2,088,035.50

MANAGEMENT / ADVISORS
Michael Drysdale
Age: 46
Skills: Fashion & Interior Designer, Pattern maker, Potter & Sculptor, Web Designer, Photographer
Equine Veterinary Nurse South African National Defence Force
1981-1984
Game Ranger Mabula Game Lodge
1985-1986
Designer – Sole Proprietor (Couture Fashion Business) Michael Franklinson Couture
1986-1996
Missionary Dutch Reformed Church Missions
1996-1998
Project Manager/Founder Under Grace (Community Development Project)
1998-2002
Project Manager AIDSLINK South Africa
2002-2003
Project facilitator – Job Creation Sparrow Schools
2003-2008

RISK ASSESSMENT AND CONTINGENCY PLAN

The Richmond Community Development Foundation is seeking to finance skills development and income
generation project from corporate donors through their corporate social investment budgets.
The Richmond Community Development Foundation has already begun talks and tentative requests to the
corporate community to assist in empowering this desperate community who through no fault of their own have
ended up in dire straits. Undertaking community development projects is always a risk, but with strict controls and
firm management, with the highly experienced facilitators that are currently involved in the project, risks are
minimised. Should the project fail, which at this point doesn’t seem likely, donors will be offered the opportunity of
placing donated equipment, or equipment purchased with donations, in other projects that they support.

FINANCIAL INSTITUTION
Name: Standard Bank
Branch: Richmond
Branch Code: 050608
Account Number: 083152288
Address: 129 Pienaar Street
City: Richmond
Province: Northern Cape
Postal Code: 7090
Telephone : 0860-101-341 / +27 11 898 4200
Fax : +27 (0)53 693-0265
Name & Title of Contact : Ina Fourie – Branch Manager

SUPPORTING DOCUMENTS
This business plan was prepared by Mr. Michael Drysdale, Project Management Consultant and facilitator of the
Richmond Community Development Foundation
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APPENDIX
A] EXECUTIVE SUMMARY
B] BUSINESS PLAN
C] CONSTITUTION
D] FUNDING PROPOSAL
E] FOUNDATION BUDGET