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MAR.03, 2021

Pottery Studio Business Plan Example

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Pottery Studio Business Plan Example

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    Pottery studio business plan for starting your own business

    Do you want to start a pottery business? Well, this business is quite a perfect choice if you possess an artistic mind or if you can hire experts in this domain. The pottery business can be run in two forms. You can choose to just provide manufacturing services and sell pottery products. And you can choose to also allow people to come to your studio and enjoy doing pottery under your guidance.

    In terms of yielding profits, both aspects can serve the purpose. However, what you should choose to offer from the above-mentioned options entirely depends on your resources and management skills.

    In either case, the first step would be to create a pottery painting studio business plan. If you don’t know how to develop an accurate business plan for pottery studio, you can take help from here. In this sample business plan pottery studio we are providing the business plan of Ceramic Land, a startup that decided to offer both types of services to its customers.

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    Ceramic Studio Business Plan Summary

    2.1 The Business

    Ceramic Land will be a registered and licensed pottery studio business based in Austin. The business aims at providing pottery tools and space for people who may want to practice their art. Besides, the business also sells some pottery items that are in-demand in the vicinity.

    2.2 Management of Pottery Studio Business

    To manage a pottery studio, you will need a skilled and responsible team along with a lot of space. Moreover, you will need to make arrangements for preparing clay, heating the ceramics, and drying the sample.

    To make sure that all aspects of your business are taken care of, you should develop a business plan for pottery studio. In your business plan ceramic studio, you should include the human and financial resources you’ll need to manage your business.

    If you don’t know how to manage a pottery studio you can learn a lot from this sample business plan for custom pottery studio.

    2.3 Customers of Pottery Studio Business

    Ceramic Land identifies the following group of people as its target customers:

    • Young & Adults
    • Senior Citizens
    • Children & Teens
    • Home Decoration Stores
    • Ceramic Cutlery Stores

    2.4 Business Target

    Our target is to become the most visited and successful pottery studio in the whole of Austin within two years of our launch. We also aim at earning a profitability margin of $28k per month by the end of the third year of our launch.

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    Company Summary

    3.1 Company Owner

    Emma Markel will be the owner of Ceramic Land. Emma is a graduate of Fine Arts. She is a talented woman who has 8-year-experience of working as a pottery instructor. She has got an artistic mind and is best-suited to efficiently run a pottery studio.

    3.2 Why the pottery studio business is being started

    Emma has always been interested in ceramic designs. When she thought of starting her own business, she couldn’t think of a more suitable option than opening a pottery studio. Through entering this venture she will be able to make profits while also serving society by engaging them in positive activity.

    3.3 How the pottery studio business will be started

    Step1: Create Ceramic Painting Studio Business Plan

    Note

    Firstly, you will have to study some business plans ceramic studios to identify the important components of custom pottery painting studio business plan. You can take help from this pottery studio business plan example to learn how to make an accurate business plan.

    Step2: Define your Brand

    The next step is to establish your workplace and workforce. This will include major steps like setting up your pottery studio and starting the recruitment process.

    After this, you will be able to brand your company’s values and the talent of your employees. So that people can understand how you stand out in the market competition.

    Step3: Establish a Web Presence

    The next you have to do is making a user-friendly website to help your target customers get an insight into what you do. Complying with the newer trends, your website should also be able to process online transactions and bookings.

    Step4: Promote & Market

    The last thing before launching your company is to develop your advertisement plan. The advertisement or sales strategy must be created with extreme consideration about the mindset of your target customers. So that it can influence the interests of your target people.

    The costs involved in all of the above-mentioned steps are listed below:

    Pottery Studio Business Plan - 3 Years Profit Forecast

     

    Start-up Expenses  
    Legal $242,000
    Consultants $0
    Insurance $27,000
    Rent $26,000
    Research and Development $27,000
    Expensed Equipment $49,000
    Signs $4,000
    TOTAL START-UP EXPENSES $375,000
    Start-up Assets $320,000
    Cash Required $345,000
    Start-up Inventory $51,000
    Other Current Assets $256,000
    Long-term Assets $280,000
    TOTAL ASSETS $1,252,000
    Total Requirements $1,627,000
    START-UP FUNDING
    Start-up Expenses to Fund $375,000
    Start-up Assets to Fund $1,252,000
    TOTAL FUNDING REQUIRED $1,627,000
    Assets
    Non-cash Assets from Start-up $1,623,000
    Cash Requirements from Start-up $358,000
    Additional Cash Raised $53,000
    Cash Balance on Starting Date $30,100
    TOTAL ASSETS $2,064,100
    Liabilities and Capital
    Liabilities $30,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $37,000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $67,000
    Capital
    Planned Investment $1,627,000
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,627,000
    Loss at Start-up (Start-up Expenses) $370,100
    TOTAL CAPITAL $1,997,100
    TOTAL CAPITAL AND LIABILITIES $2,064,100
    Total Funding $1,627,000
    Any questions? Get in Touch!

    Services of Ceramic Studio

    Before starting a pottery painting business you should decide which services you’ll offer to your customers. Your services and the requirements to conduct those services must be clearly stated in your business plan for custom pottery studio. So that you can have a systematic structure to follow.

    • Hand Thrown Stoneware Pottery Classes
      We’ll offer stoneware pottery classes to enthusiasts who may want to learn and practice their art under guided supervision. Stoneware is durable so we will instruct our clients to learn to make mugs, plates, bowls, and other forms of cutleries using this approach.
    • Hand Thrown Earthenware Pottery Classes
      We’ll also offer pottery classes to help people in learning earthenware pottery creating skills. Since earthenware needs to be glazed, we’ll hire certified experts to teach glazing techniques.
    • Manufacturing Ceramics Cutlery
      We’ll manufacture several types of ceramic cutleries to be sold in the market. Our main products in this domain will include:
      • Mugs
      • Plates
      • Bowls
      • Knives
      • Saucers
      • Egg pots
      • Planters
      • Jars
      • Teapot Set
    • Manufacturing Ceramics Decoration Pieces
      Lastly, we’ll offer ceramic-made decoration pieces. Our decoration pieces will include:
      • Sculptors
      • Artistic jars
      • Porcelains
      • Painted Vases
      • Ceramic Wall Art Sculpture
      • Ceramic Candle Holders
      • Ceramic Lanterns
      • And other novelty décor items.

    Marketing Analysis of Pottery Studio

    Before starting a pottery studio it is essential to carry out a detailed marketing analysis. The marketing analysis studies your target marketplace to identify the competition and the groups of your target customers. This will eventually guide you in setting your pricing strategy. Moreover, this will also assist you in estimating your monthly and yearly sales and thus profits.

    In this ceramic art studio business plan on how to start a pottery studio we’re providing the marketing analysis of Ceramic Land. Keep in mind that the market trends and analytics we’ll be providing are general. It is recommended for you to also study the market ups and downs specific to your service area before entering this venture.

    5.1 Market Trends

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    These days, pottery studios are high in demand due to the valuable products they can produce. According to IBISWorld, the current market size of the ceramics manufacturing business is $2.4 billion in the United States. The business has seen a growth rate of 0.9% during the last five years i.e. from 2016 to 2021. Moreover, the same source has predicted a 3.1% growth in this business during this year i.e. 2021.

    All the above-mentioned stats are highly satisfactory and ensure that it is the right for setting up pottery studio.

    5.2 Marketing Segmentation

    Ceramic Land identifies the following groups of people as its target customers.

    Pottery Studio Business Plan - Marketing Segmentation

    5.2.1 Young & Adults

    Our major customers will be young people. They are expected to purchase ceramic products from us. Moreover, they are also expected to make the most of our trainees of pottery classes.

    5.2.2 Senior Citizens

    Our second target group will comprise senior citizens. Elderly people always look forward to positive activities that also require some physical effort. Therefore, we believe them to come to us for learning or practicing pottery.

    Any questions? Get in Touch

    5.2.3 Children & Teens

    Our third category includes children and teens. Teens usually tend to do things for fun. Therefore, they are expected to visit us mostly to learn and enjoy doing pottery.

    5.2.4 Home Decoration Stores

    The stores that sell ceramic decoration pieces will also be our target customers. Due to their work nature, this group is expected to purchase in bulk from us.

    5.2.5 Ceramic Cutlery Stores

    Lastly, the stores that sell ceramic cutlery will also be our target customers. They are expected to make big purchases from us.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Young & Adults 27% 34,000 36,000 37,000 39,000 40,000 10.00%
    Senior Citizens 20% 22,000 24,000 25,000 26,000 28,000 10.00%
    Children & Teens 9% 6,000 7,000 9,000 10,000 11,000 10.00%
    Home Decoration Stores 24% 25,000 27,000 29,000 31,000 33,000 10.00%
    Ceramic Cutlery Stores 20% 22,000 25,000 27,000 29,000 31,000 11.00%
    Total 100% 109,000 119,000 127,000 135,000 143,000 10%

    5.3 Business Target

    The economic, social, and human targets of our business are listed below:

    • To become the most successful pottery studio in our city by achieving and maintaining an average ranking above 4.9 within a year of the launch.
    • To earn a CSAT score above 90% within six months of our launch.
    • To ensure a customer repeat rate of 60% by the end of the first year of our launch.
    • To earn a net profit margin of $28k per month by the end of the third year.

    5.4 Product Pricing

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    Our prices are a little higher than our competitors. It is because we’re providing many additional services and perks as compared to our competitors. Our competitive advantages, through which we will be able to attract more customers despite the high prices, will be listed in detail in the upcoming sections.

    Marketing Strategy of Ceramic Studio Business

    After you have explored every aspect regarding how to create pottery studio business plan, you should start developing your marketing business strategy. Your ceramic painting studio marketing plan should explain how you are better than your competitors. Moreover, it should also cover your advertisement policies.

    6.1 Competitive Analysis

    Ceramic Land will come up with the following competitive advantages:

    • We are the largest pottery studio in the whole of Austin. Due to more space, we’re able to provide an extremely comfy and creative environment to our pottery trainers.
    • We value our customers and always attach special regard to elderly and senior people. For them, we’ll ensure high collaboration and cooperation from our side.
    • Our assortment of decoration pieces is quite large. We are offering many types of novel ceramic pieces.
    • Last, our sales strategy is very effective. Through it, we expect to get more customers than our competitors.

    6.2 Sales Strategy

    • We’ll carry out a social media campaign to let our target customers know about us.
    • We’ll advertise our services through local magazines, posters, local newspapers, and Google Local Ads services.
    • We’ll offer a 60% discount to our first 20 customers of stoneware and earthenware pottery classes.
    • We’ll offer a 40% discount on our decoration pieces for the first month of our launch.
    • We’ll offer a 20% discount on our pottery classes for people aged above 60.

    6.3 Sales Monthly

    Pottery Studio Business Plan - Sales Monthly

    6.4 Sales Yearly

    Pottery Studio Business Plan - Sales Yearly

    6.5 Sales Forecast

    Pottery Studio Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Hand Thrown Stoneware Pottery Classes 44,000 46,640 49,438
    Hand Thrown Earthenware Pottery Classes 40,000 42,400 44,944
    Manufacturing Ceramics Cutlery 31,000 32,860 34,832
    Manufacturing Ceramics Decoration Pieces 29,000 30,740 32,584
    TOTAL UNIT SALES 144,000 152,640 161,798
    Unit Prices Year 1 Year 2 Year 3
    Hand Thrown Stoneware Pottery Classes $48.00 $55.68 $64.59
    Hand Thrown Earthenware Pottery Classes $48.00 $55.68 $64.59
    Manufacturing Ceramics Cutlery $54.00 $62.64 $72.66
    Manufacturing Ceramics Decoration Pieces $52.00 $60.32 $69.97
    Sales
    Hand Thrown Stoneware Pottery Classes $2,112,000.00 $2,596,915.20 $3,193,166.93
    Hand Thrown Earthenware Pottery Classes $1,920,000.00 $2,360,832.00 $2,902,879.03
    Manufacturing Ceramics Cutlery $1,674,000.00 $2,058,350.40 $2,530,947.65
    Manufacturing Ceramics Decoration Pieces $1,508,000.00 $1,854,236.80 $2,279,969.57
    TOTAL SALES $7,214,000.00 $8,870,334.40 $10,906,963.18
    Direct Unit Costs Year 1 Year 2 Year 3
    Hand Thrown Stoneware Pottery Classes $45.00 $51.00 $59.00
    Hand Thrown Earthenware Pottery Classes $45.00 $51.00 $59.00
    Manufacturing Ceramics Cutlery $52.00 $59.00 $68.00
    Manufacturing Ceramics Decoration Pieces $49.00 $57.00 $65.00
    Direct Cost of Sales
    Hand Thrown Stoneware Pottery Classes $1,980,000.00 $2,378,640.00 $2,916,865.60
    Hand Thrown Earthenware Pottery Classes $1,800,000.00 $2,162,400.00 $2,651,696.00
    Manufacturing Ceramics Cutlery $1,612,000.00 $1,938,740.00 $2,368,548.80
    Manufacturing Ceramics Decoration Pieces $1,421,000.00 $1,752,180.00 $2,117,986.00
    Subtotal Direct Cost of Sales $6,813,000.00 $8,231,960.00 $10,055,096.40

    Personnel plan

    Any questions? Get in Touch!

    Your employees’ behaviors and performance hugely impact the success of your business. To make sure that all of your employees are well-trained and competent, you should make a personnel plan. Your personnel plan must suggest on which basis and pay scale you will be hiring your workers. And through which criteria, you will be judging their performance from time to time.

    For your reference, we’re providing the personnel plan of Ceramic Land in this sample business plan for pottery studio.

    7.1 Company Staff

    Emma will hire the following people to run her business:

    • 1 Manager to help manage the business
    • 4 Ceramic Artists to manufacture the products
    • 3 Pottery Instructors to conduct training classes
    • 1 Website & App Developer to manage the online presence
    • 1 Accountant to manage financial records
    • 1 Sales Executive to execute company’s sales strategies
    • 2 General Assistants for routine tasks
    • 1 Receptionist/ Call Operator

    7.2 Average Salary of Employees

     

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $14,000 $15,400 $16,940
    Ceramic Artists $72,000 $79,200 $87,120
    Pottery Instructors $58,000 $63,800 $70,180
    Website & App Developer $8,200 $9,020 $9,922
    Accountant $9,000 $9,900 $10,890
    Sales Executive $8,500 $9,350 $10,285
    General Assistants $15,000 $16,500 $18,150
    Receptionist/ Call Operator $7,000 $7,700 $8,470
    Total Salaries $191,700 $210,870 $231,957

    Financial Plan

    To make sure that your financial flow is the same as you wanted, you need to prepare a financial plan. A financial plan analyzes your expenses, fixed and variable costs, and your profitability goals. After an accurate analysis, the financial plan suggests a safe trajectory for your business. For example, you can learn how much to put in reserve to cater to any financial risks. Moreover, you can get an idea of how much money is safe to invest at a specific time.

    As a financial plan is an extremely important component of a business, it must be developed by a professional financial expert. To give you an idea of how a perfect financial plan should look like, we’re providing the financial plan of Ceramic Land in this pottery studio business plan example.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.17% 8.23% 8.26%
    Long-term Interest Rate 8.28% 8.35% 8.41%
    Tax Rate 23.09% 23.34% 23.88%
    Other 0 0 0

    8.2 Break-even Analysis

    Pottery Studio Business Plan - Break-even Analysis

     Break-Even Analysis  
    Monthly Units Break-even 5341
    Monthly Revenue Break-even $133,900
    Assumptions:
    Average Per-Unit Revenue $235.00
    Average Per-Unit Variable Cost $0.63
    Estimated Monthly Fixed Cost $166,400

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $7,214,000 $8,870,334 $10,906,963
    Direct Cost of Sales $6,813,000 $8,231,960 $10,055,096
    Other $0 $0 $0
    TOTAL COST OF SALES $6,813,000 $8,231,960 $10,055,096
    Gross Margin $401,000 $638,374 $851,867
    Gross Margin % 5.56% 7.20% 7.81%
    Expenses
    Payroll $191,700 $210,870 $231,957
    Sales and Marketing and Other Expenses $129,000 $130,000 $132,000
    Depreciation $2,200 $2,245 $2,310
    Leased Equipment $0 $0 $0
    Utilities $2,500 $2,600 $2,700
    Insurance $1,900 $2,000 $2,100
    Rent $29,000 $30,000 $31,000
    Payroll Taxes $26,000 $27,000 $28,000
    Other $0 $0 $0
    Total Operating Expenses $382,300 $404,715 $430,067
    Profit Before Interest and Taxes $18,700 $233,659 $421,800
    EBITDA $18,700 $233,659 $421,800
    Interest Expense $0 $0 $0
    Taxes Incurred $3,740 $46,732 $84,360
    Net Profit $14,960 $186,928 $337,440
    Net Profit/Sales 0.21% 2.11% 3.09%

    8.3.1 Profit Monthly

    Pottery Studio Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Pottery Studio Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Pottery Studio Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Pottery Studio Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Pottery Studio Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $49,000 $52,920 $57,154
    Cash from Receivables $20,000 $21,600 $23,328
    SUBTOTAL CASH FROM OPERATIONS $69,000 $75,210 $81,227
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $70,000 $76,000 $82,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $31,000 $32,000 $33,000
    Bill Payments $14,000 $15,000 $16,000
    SUBTOTAL SPENT ON OPERATIONS $45,000 $47,000 $49,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $45,000 $48,600 $52,488
    Net Cash Flow $14,000 $15,000 $16,300
    Cash Balance $23,000 $24,000 $25,000

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $259,000 $290,080 $319,088
    Accounts Receivable $24,400 $27,328 $30,717
    Inventory $4,100 $4,592 $5,143
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $273,000 $305,760 $343,674
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $18,000 $20,160 $22,680
    TOTAL LONG-TERM ASSETS $23,900 $26,768 $30,114
    TOTAL ASSETS $284,000 $318,080 $357,840
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $19,800 $22,176 $24,926
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $17,200 $19,264 $21,653
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $15,500 $17,360 $19,513
    Paid-in Capital $29,000 $30,000 $31,000
    Retained Earnings $53,000 $57,770 $63,547
    Earnings $191,000 $208,190 $229,009
    TOTAL CAPITAL $274,000 $298,660 $328,526
    TOTAL LIABILITIES AND CAPITAL $289,500 $318,080 $357,840
    Net Worth $290,100 $316,209 $347,830

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.31% 8.10% 8.97% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.25% 10.25% 11.36% 9.80%
    Inventory 5.48% 6.07% 6.73% 9.90%
    Other Current Assets 2.24% 2.48% 2.75% 2.40%
    Total Current Assets 150.10% 151.80% 152.00% 158.00%
    Long-term Assets 11.42% 11.45% 12.00% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.85% 4.89% 4.93% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.74% 7.80% 7.87% 7.38%
    NET WORTH 100.56% 101.36% 102.30% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 95.24% 97.81% 100.55% 99.00%
    Selling, General & Administrative Expenses 95.70% 98.28% 101.04% 97.80%
    Advertising Expenses 1.62% 1.66% 1.71% 1.40%
    Profit Before Interest and Taxes 40.92% 42.02% 43.20% 33.90%
    Main Ratios
    Current 33 34 35 32
    Quick 32 33.4 34.235 33
    Total Debt to Total Assets 0.17% 0.17% 0.16% 0.40%
    Pre-tax Return on Net Worth 73.00% 73.70% 74.20% 75.00%
    Pre-tax Return on Assets 95.80% 100.59% 105.62% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.81% 34.86% 35.94% N.A.
    Return on Equity 55.55% 57.27% 59.05% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.7 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32.6 34.23 35 N.A.
    Accounts Payable Turnover 15.9 16.1 16.2 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.4 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.03 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $244,000 $257,664 $272,093 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.84 0.86 0.87 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 26.8 28.1 28.7 N.A.
    Sales/Net Worth 2.1 2.2 2.3 N.A.
    Dividend Payout 0 0 0 N.A.

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