business plan dec 21-2013.docx

Synergy

Business Plan

Entrepreneurship MGT-430

Partners

Ahmad Mehmood [Manager Organization]Ansab Qureshi [Manager Finance]

Waqar Ahmad [Manager Marketing]Minha Malik [Manager Operations]

12/14/2013

COMSATS Institute of Information TechnologyManagement Sciences Department

Entrepreneurship MGT- 430Business Plan, 2014

Table of ContentsIntroductory Page..................................................................................................................................3

Business Name/Logo and Address.....................................................................................................3

Partners’ Names and Addresses........................................................................................................3

Nature of Business.............................................................................................................................3

Financing...........................................................................................................................................4

Executive Summary...............................................................................................................................5

Description of Venture..........................................................................................................................6

Business Description..........................................................................................................................6

Mission Statement.............................................................................................................................6

Strategic Goals...................................................................................................................................6

Product(s)..........................................................................................................................................7

Size of Business..................................................................................................................................7

Office Equipment and Personnel.......................................................................................................7

Background of Entrepreneurs............................................................................................................7

Marketing Plan......................................................................................................................................8

Defining the Target Market...............................................................................................................8

Opportunities....................................................................................................................................8

Threats...............................................................................................................................................8

Strengths...........................................................................................................................................8

Weaknesses.......................................................................................................................................9

Marketing Mix...................................................................................................................................9

Product Strategy............................................................................................................................9

Promotion Strategy........................................................................................................................9

Distribution Strategy......................................................................................................................9

Pricing Strategy............................................................................................................................10

Control and Review Procedures......................................................................................................10

Marketing Budget............................................................................................................................10

Organizational Plan..............................................................................................................................11

Legal Structure.................................................................................................................................11

Organizational Structure..................................................................................................................11

Management Team.........................................................................................................................12

Operational Strategy.......................................................................................................................141 | P a g e

COMSATS Institute of Information TechnologyManagement Sciences Department


Expansion Strategy..........................................................................................................................15

Exit Strategy.....................................................................................................................................15

Operational Plan..................................................................................................................................16

Location...........................................................................................................................................16

Procurement....................................................................................................................................16

Retailers...........................................................................................................................................17

Equipment.......................................................................................................................................17

Labor................................................................................................................................................17

Production / Service Process...........................................................................................................18

Financial Plan.......................................................................................................................................20

Capital Investment...........................................................................................................................20

Operating Budget............................................................................................................................20

Budgeting........................................................................................................................................20

Manufacturing Budget (First 3 Months)......................................................................................20

Operating Budget (First 3 Months)..............................................................................................21

Pro Forma Income Statement..........................................................................................................21

Generation of Funds........................................................................................................................21

Appendix 1...........................................................................................................................................23

2 | P a g eCOMSATS Institute of Information Technology

Management Sciences Department


Introductory Page

Business Name/Logo and Address

Synergy

193 E Block Nawab Town, Raiwind Road,

Lahore, Pakistan

Partners’ Names and AddressesName Roll # Address Contact NumberAhmad Mehmood CIIT/DDP-FA10-

BBA-004193 E-Block, Nawab Town, Lahore

0333-9767-119

Minha Malik CIIT/DDP-FA10-BBA-005

15/1-B, St. no. 49, Samnabad, Lahore

0300-4001-184

Ansab Qureshi CIIT/DDP-FA10-BBA-006

15-A/4,Engineers Town, Defense Road, Lahore

0331-4080-193

Waqar Ahmad CIIT/DDP-FA10-BBA-009

218 A Madina Block, Awan Town, Lahore

0345-4282-229

Nature of BusinessThis business will provide ready-made, packaged, and branded phenyl balls. Phenyl

balls are used by various different customers, including businesses as well as house hold consumers. Our services and operations will include: procuring manufactured phenyl balls from Akbari Mandi, which is a famous old hub for the raw materials near the Landa Bazaar based in Lahore, transporting them to our business operations base (see address above), packaging the phenyl balls into plastic pouches, sealing the pouches with a sealing machine, branding the packaged product with our brand stickers, packing the readied merchandise in




cartons bearing the business logo, and distributing the product to local retail stores according to their demand.

FinancingInitial financing required for first three months is Rs. 79,584.00. This financing (plus

some additional sum) will be provided by the four partners. These finances will cover rent, packaging, distribution, salaries, and other fixed and variable costs.

This report is confidential and is the property of the co=owners listed above. It is intended for use only by the persons to whom it is transmitted, and any reproduction or divulgence of any of its contents without the prior written consent of the company is prohibited.




Executive Summary

This business plan concerns the planning, birth, establishment, and development of the partnership called “Synergy” and Synergy’s new product offering called “Hygen”. The partnership is composed of four members who have invested equally in the venture and will manage the venture equally according to their respective specialized fields. The product being sold under the brand name “Hygen” is phenyl balls.

The plan begins with an overview of our company’s mission, goals, and industry. It then takes an in-depth look at the best marketing, operations, distribution, and packaging strategies.

Each of these strategies is addresses and explored in their own respective plans, and the relevant budgets are also included to provide a clear picture of the venture’s future prospects. All the finances and budgets are then merged cohesively and cogently in the finance plan, which also explains the calculations and computations of all the costs, revenues, and profits.




Description of Venture

Business DescriptionSynergy is a consumer based company that has been established considering the

vast market that exists in Pakistan for home care chemical products. The focus of this company is the provision of quality and affordable products, within arm’s reach, to its end users. The company will focus on a multi-dimensional approach where our products will be made available to end users (consumers) and also to other companies (customers).

Following this B2C and B2B strategy simultaneously will allow for quick returns. Considering the lack of sufficient data on demand trends from private retail store for phenyl balls, it will be in the company’s best interest to keep a broad market focus; targeting consumers and businesses alike.

The initial reach of our company’s product will be limited to a few selected areas in Lahore City. However, in the long run as the company will establish and develop, further expansions into new towns and societies, and even bordering cities, will be considered to increase the company’s profitability and market.

Should our company decide to engage in B2B dealings, bank loans will then be considered as a source for financial support for bringing operations at par with the partnering company’s demand orders.

Mission Statement

“Synergy aims to provide the best sanitary products within arm’s reach,

at competitive prices”

Strategic GoalsConveying our mission statement in our marketing campaign is crucial for our brand

image and reputation and our marketing mix will embody this statement.

Financial Goals

Obtain financing to expand manufacturing capabilities, increase distribution, and introduce new product lines such as liquid phenyl products when business starts giving considerable returns.

To generate and increase revenue as per expectations of the business plan.




Non-financial Goals

Enter new geographic markets outside Lahore. Establish strong brand image and communication channels.

Product(s)Initially, the product offering will primarily comprise of packaged and branded

phenyl balls. With time and experience, we will consider expanding our product line by also including phenyl floor cleaning chemicals as well.

Size of BusinessFor the first six months, the size of the business will be small. All the operations will

be managed and undertaken by the four partners. No additional labor will be employed in the initial phases of the business. The total projected productions required for the first three months will be 1,600 pouches of phenyl balls, each weighing 200 grams.

After the first six months, the projected sales is expected to increase to higher levels, and to cope with this increase, the business will hire additional labor. Distribution, procurement, and packaging will then be completed by the additional labor.

Once the sales volume rises sufficiently high, Synergy will outsource the distribution function to third party specialists. The loss of profit due to outsourcing distribution will be offset by the increased sales volumes which will only be possible if we employ large scale distribution.

Office Equipment and PersonnelFollowing will be the office equipment requirements:

Sealing machine (Quantity: 1) Gloves (2 pairs) Weighing machine (Quantity: 1) Face masks (Quantity: 4) No additional personnel required for initial stages (4 partners only)

Background of Entrepreneurs

The four entrepreneurs do not yet have any real hands on experience of the real world market. However, each partner is skilled in mutually exclusive specialized areas of business administration. According to their skills, the partners have distributed the various tasks among themselves.




Marketing Plan

Defining the Target Market

Opportunities The target market of our product is both household consumers and business

customers such as small hotels and restaurants etc. in the Lahore region. One of our opportunities is the relatively small number of competitive brands in this

product category which will ease our entrance into the market. Once such a link gets established, opportunity exists for becoming appealing to and,

inevitably, supplying to larger business customers with larger demand as well. Expanding our target market beyond Lahore region after successful establishment in

Lahore area. Directly target hospitals, clinics, restaurants and hotels etc.

Threats• Unstable economic environment.• Low demand.• Much older and well-established competitors.• Rising cost of petrol. Hence increase in transport expense. Change in consumer trend can sap the demand of our product. Lower purchase than anticipated in category ‘C’ retail stores.

Strengths • Few brands are competing in this product category. • The experience gained in launching our product in current geographical area will

help us expand into other cities as well with a better placement strategy.• Bringing the product within arms of our consumers. • The product is undifferentiated so the difference in product pricing will not be far

apart, thus providing us equal opportunity to capture market.




Weaknesses • The limited distribution channel by using rented vehicle or personal commute.• Limited availability of finance such as growth prospects.• Lack of experience and seasoning to operate in market.• Initial inability to target large scale whole sellers (e.g. Hyperstar)• Inability to gain good face value of brand over the period of time, unable to

retain the retailers due to unpredictability of market demand or low demand. Also,

• The market already has some well-established key players/movers (e.g. Benz chemicals), who have linkages with existing businesses.

Marketing Mix

Product StrategyOur aim is to provide finished quality phenyl ball products at competitive prices and

good import quality material. The product will be in the form of 200gm or 400gm plastic pouches with our brand logo on it.

Promotion StrategyOur primary marketing objective is to establish a brand image and secure retailers for

first time entry into the market. In order to achieve this objective, following courses of action regarding promotions can be taken

Make Brochures and Leaflets and distribute them to retail customers in our geographical market (In Lahore i.e. Iqbal Town, Awan Town, Samnabad, Nawab Town, Johar town etc.) to increase our brand awareness.

Raise awareness and establish a communication platform via Internet e.g. Facebook Page and E-mail. Also by making E-mail catalogues for business customers.

Word of mouth, that is, spread the word personally about our brand. Direct sales pitch to companies manufacturing phenyl balls and persuade them that

outsourcing this line of operations of the company will reduce their costs significantly.(Considered as a secondary marketing objective)

If the budget allows, probably make a small advertisement on local cable provider channels such as gulf cable providers in Awan town and Iqbal town region etc. The advertisements there are relatively cost effective and economical.




Distribution StrategySince we are operating locally and the end product is light (125 packets of 200gm

totaling 25kg), takes low volume, our end users are concentrated (direct) in the market. We could distribute the packaged goods with a small van on rent or via personal commute to further reduce cost thus using one distribution channel to retailers for one or multiple geographical market areas. In the beginning we could supply our product to local general stores categorized as ‘B’ stores and smaller anonymous local shops categorized as ‘C’ class stores.

Pricing StrategySuggested retail price for phenyl balls 200g pack will be Rs.80. Retailers will be

offered 10% margin which will be equivalent to Rs.8 per 200g pack.

Our aim is to offer highly competitive prices but not so low that it implies a poor quality product, as we are just starting. We shall try to keep our margin minimal as our primary focus right now is to build brand repute and awareness by persuading people to buy our product and sales pitch. Our product comes under the non-differentiated category where little room for price variation is available and can be done so only either by reducing our margins or our cost of production. We can offer discounts at big orders. When we raise substantial brand awareness and a position by proving the quality of our product in the market we can then raise our prices accordingly.

Control and Review ProceduresIn order to measure our performance some review procedures are required to

compare our progress vs. our plan. We can do periodic visits, say once a week, to retailers in our allocated vicinities to get feedback regarding our product sales and general product perception. Also new consumption trends of end consumers if any, thereby reevaluating and re-structuring are marketing activities accordingly.

Marketing Budget

Marketing Budget for first 3 months:

Promotional Cost Rate January February MarchLabel Rs.1.50 300Labels*Rs.1.5=

Rs. 450500Labels*Rs.1.5= Rs. 750

700Labels*Rs.1.5= Rs. 1,050

Brochures 5.00 1,000Brochures* Rs.5= Rs. 5,000

0 0

Flex Posters 8.00 1,000 0 0




(Dimensions: 15”x10”)

Posters*Rs.8.00=8,000

Total Cost Rs. 13, 450 Rs. 750 Rs. 1,050

Organizational Plan

Legal StructureThe legal structure of Synergy will be that of a partnership governed under the

partnership act, 1932 of Pakistan.

A partnership structure incurs limited establishment and registration costs, has comparatively a smaller tax percentage to pay than a limited company, the responsibilities can be better divided among partners; reducing the burden of running an entire company from a single person. Since each individual is an expert in his/her area of operations the decision made will be quick and effective. Finally, a partnership has more sources of capital where each partner contribute to the company’s operations and more partners can still be added to the company should such a need for it be sensed.

Organizational Structure




The organizational structure will be small as the company will only be in its introductory stages. A worker staff will not be required during the initial 6 months of operations, however, when our business will expand more worker staff will be hired to look after distribution and packaging of our product.

Management TeamThe responsibilities assigned to each individual are soundly based on their capability

to manage the area of expertise in the best possible fashion. A detailed description of the responsibilities each member has been assigned are as follows:

Partner: Ahmad Mehmood

Designation: Director Organization

Responsibilities:

Arrange regular meetings with all group members. Supervise production, financial and marketing activities. Establish monthly sales and production targets based on previous month

performance. Ensure favorable relations with retailers. Ensuring the availability of secured storage space for stocks. Cater to complaints received from retailers and consumers. Integration of work tasks. Approving financial plans and promotional activities.



Director Organization: Ahmad Mehmood

Manager Marketing: Waqar Ahmad

Manager Operations: Minha Malik

Worker Staff

Worker Staff

Manager Finance: Ansab Qureshi


Approve bonuses for extraordinary work.

Partner: Waqar Ahmad

Designation: Manager Marketing

Responsibilities:

Identifying and implementing viable marketing strategies and developing an effective marketing mix.

Identify relative target markets. Identify direct and indirect competitors along with consumer trends. Budgeting for marketing activities. Securing retailers for our product sales. Product packaging and labeling designs. Implementing product promotion techniques. Ensure customer satisfaction and acquire feedback from customers to ensure sales.

Partner: Minha Malik

Designation: Manager Operations

Responsibilities:

Improve the operational systems, processes and policies in support of organization's mission -specifically, support better management reporting, information flow and management, business process and organizational planning.

Ensuring that business operations are efficient and effective; Efficient in terms of using as few resources as needed, and effective in terms of meeting customer requirements.

Managing the process that converts inputs (in the forms of materials, labor, and energy) into outputs (in the form of goods and/or services).

Managing and directing the physical and/or technical functions of our organization, particularly those relating to production, manufacturing and transport.

Play a significant role in long-term planning, including an initiative geared toward operational excellence.

Maintaining favorable stock levels, sufficient to meet demands.




Making sure that stocks are purchased in the best of shape to maintain quality standard.

Making sure the costs incurred in purchasing stocks is kept minimum and maximum discounts are availed while purchasing stocks and raw material.

Keep up-to-date information on raw material and market price fluctuations for essential material required for production.

Ensuring production occurs with minimum wastage.

Partner: Ansab Qureshi

Designation: Manager Finance

Responsibilities:

Managing budgets. Preparing and interpreting reports, budgets, accounts and financial statements. Controlling income, cash flows and expenditure. Looking for cost reduction opportunities. Calculating risk and analyzing market change. Interpreting financial statements and predicting future trends. Develop a comprehensive and detailed business plan. Develop content themes based on the direction and creative brief provided by our

team members. Contribute ideas on improving existing messaging and content. Produce and edit documents using Word, including copy editing, rewriting, revising,

and formatting.

The duties and responsibilities of each member are interlinked with one another. Ever decision regarding operations, productions and marketing will need to be coordinated with the finance manager. Similarly the production department will have to coordinate its production plans with the marketing department, making cohesive plans on areas of interest in Pakistan, where our product must reach the customers.

Director organization will be responsible for managing and coordinating work activates among all departments. Also overlooking tax payments and making sure each member performs his/her responsibilities and receives rewards and bonuses accordingly.




Operational StrategySynergy’s aim will be the provision of quality packaged phenyl balls to the local

consumer market. The goal is to target retail store categorized as A, B and C ensuring the easy availability of our product.

The operations during the introductory stage of our business will be limited in terms of production capacity, distribution and reach. The focus for initiating our business will be primarily on category ‘A’ retail stores with a secondary emphasis on category ‘B’ retail stores. This will be done to ensure that our product is delivered on cash bases, rather than on credit terms. This will ensure timely recover of costs and minimize risks, which for a new business is crucial. The procurement, packaging and delivery will take place via personal transport means provided by partners. No additional labor will be hire in the initial 6 month period of operations.

Category ‘B’ store will be secondary preference, since their small operational capacity and limited revenue pool will restrict any on cash transactions from being accepted. However, by implementing the following strategy, we can increase on cash transactions with category ‘B’ stores. The strategy will be to offer an increase in the retailer’s margin, there by giving them an added incentive to enter into an agreement. The normal margin, which is 10%, will be increased to an incentivized 13% in return for cash transaction.

Expansion Strategy

The expansion strategy for Synergy will be defined in 4 steps and will be for the next 5-8 years:

1. The first step will be expanding our customer base from just targeting retail stores to bring our product to hospitals, restaurants and hotels.

2. The initial delivery requirement will be managed via personal transport means and the occasional use of for-hire transport vehicles. With the implementation of the first step procurement, production and delivery requirements will increase, thus requiring the hiring of additional labor force as well.

3. The third step will be expanding our operations to bordering cities. This in turn will require outsourcing distribution to third part specialists. Here distribution channels will be established. The loss in profits due to outsourcing distribution (incentives to distributors) will be off-set by the increase in unit sales by virtue of increase reach of our product.




4. The final step will be becoming our own distributors and introducing similar product lines.

Exit StrategyThe Partnership Agreement for Synergy will clearly state the procedure for wrapping up

the business. Should the business fail to continue profitably, the following steps will be follows as guideline:

1. All company owned assets; raw material, finished goods, equipment and other assets will be disposed of.

2. The resulting returns will be used to pay back debts and due owed by the company.3. Finally, in the event of any remaining capital, the sum will be distributed between all

legal partners equally.

The whole wrap-up procedure will be carried out and supervised by the Manager Organization-Ahmad Mehmood.

Operational Plan

LocationSynergy is based in Lahore, Pakistan. The exact location from where the operations

would be based at is 193 E Block, Nawab Town, Lahore (personal residence). The operations would commence from January 2014.

ProcurementSynergy is going to be procuring the phenyl balls from Akbari Mandi which is a

famous old hub for the raw materials near the Landa Bazaar based in Lahore. To meet the projected sales for the first month of January i.e 300 phenyl bags we need to purchase phenyl balls worth of Rs. 9000 in January by purchasing 3 bags of raw material, 25 kg each. See table below for the Feb and March.




Procurement Projection

January February March

Projected Production (units)

500 400 700

Raw Material Rs.3000 x 4 bags = Rs.12,000

Rs.3000 x 4 bags = Rs. 12,000

Rs. 3000 x 5 bags = Rs.15,000 (Plus 75 packets carried forward)

Idle Raw Material 0 100 packets worth Rs.2,400

25 packets worth Rs.600

Total Production Cost

Rs. 12,000 Rs. 12,000 Rs. 15,000

Note: 1 bag of raw material= 25kg = 125 packets 200g each.

The means to transport the raw material from Akbari Mandi to desired location would include two suitable options. One means is to use the personal transport that is the use of motorbikes this would be cost effective. On the other hand Synergy could use the services of a local transporter if required.

RetailersThe retailers that Synergy has identified are broadly divided in three categories A, B and

C.

Category A includes big stores like Alfatah and Jalal Sons. Category B includes medium sized stores that are popular in different societies for

instance Al-Buraq in Samanabad Society, Al-Hamd in Nawab Town, Bhai Bhai Medical and General Store in Awan Town and Rainbow Centre in Wapda Town.

Category C stores are the smaller anonymous stores located across societies for the convenient availability of products for daily use.

Category B and C will require the product in 200 gm packets, delivery of these packets is easier via motorbikes and hence helps reduce the transport cost.

Category A will require the product in cartons (carton capacity 96 units 200 gm packets) hence for the transportation of these cartons proper transport facilities need to be availed.




EquipmentThe equipment that is required for the packaging and sealing of these phenyl balls is

a sealing machine, this sealing machine would cost around Rs. 1500. Apart from this a weighing machine which costs Rs. 1200 is required. Also two sets of gloves that cost Rs. 50 each and masks at Rs. 10 each are to be purchased.

LaborSynergy does not require any technical skills in the packaging of the phenyl balls

hence any technical labor is not required for the business. Synergy will procure, package and deliver the product on its own.

Production / Service ProcessThis process explains the whole procedure through which the raw materials would

be transformed into finished products.

Raw material has to be purchased and then transported to the location for further processing. Now the phenyl balls will be sealed and packaged.

300 units is the production goal for the first month i.e. January. The weight of these 300 packets would be 60kg.

Labeling



Raw Material

Packaging

Transportation

Retailers


Phenyl balls that have been packaged need to be labeled now. For the purpose of labeling stickers of the product namely Hygen are to be purchased the price of this sticker is @ Rs. 1.5 / sticker. Hence a total of Rs. 2250 would be invested to label the 1500 packets for the term of first three months because the minimum order quantity for the stickers is 1000.

Production Material

Stickers @ Rs. 1.5 / sticker Cartons @ Rs. 36.5/ carton

Inventory

The inventory will be managed by storing the packaged phenyl balls in cartons. For January’s purpose the 300 packets will be stored in 3 cartons which will be placed temporarily at personal residence (read: financial plan).

Quality Assurance

Quantity: This explains if the said quantity is being delivered i.e whether or not a packet weighs 200gms.

Quality: Since our product is not differentiated from other similar products; maintenance and reliability of quality is difficult to achieve and of secondary importance. However we will ensure that the packaged balls are not crushed or cracked.

Waste Management: We need to ensure that the waste material is stored and once it reaches a certain amount of level we can sell if off. The waste majorly would include powdered or crushed phenyl balls.




Financial Plan

The finance plan will begin with an overview of the total and per unit costs of procurement, packaging, delivering, and other fixed costs. The plan will then proceed to calculating budgets of marketing, operations, and manufacturing. Capital investments of each partner, allocation, and calculations of salaries will also be made. Finally, the plan will produce a comprehensive Pro Forma Income statement.

Capital InvestmentFollowing is a list of financial contributions from each partner of Synergy. Equal

contributions mean all profits and losses will be shared equally by each partner.

Investors Capital InvestmentAhmad Mehmood Rs. 25,000Ansab Qureshi Rs. 25,000Waqar Ahmad Rs. 25,000Minha Malik Rs. 25,000

Operating Budget*(Following calculations are the operational expenses for the first 3 months, starting Jan. 2014)

Refer to Appendix 1 for calculation details in Excel print.




Budgeting

Manufacturing Budget (First 3 Months)January February March

Project Sales (Units) 300 500 700Desired Ending Inventory

200 100 100

Available for Sale 500 600 800Less: Beginning Inventory

0 200 100

Total Production Required

500 400 700

Operating Budget (First 3 Months)Expenses January February MarchSalaries* Rs. 2,835 Rs. 4,725 Rs. 6,615Rent 1,000 1,000 1,000Petrol 3,000 3,000 3,000Utilities (Electricity, Cellular)

1,400 1,400 1,400

Advertising/Promotion Rs. 13, 450 Rs. 750 Rs. 1,050Depreciation 250 250 250Stationary 500 500 500Total 22,435 11,625 13,815*Salaries are allocated according to percentage (25% for each partner) of capital invested by each member. Every month, 50% of overall profits will be reinvested while remaining will be paid out as salaries to each member.

Pro Forma Income StatementJanuary February March

Sales 24,000 40,000 56,000Less: Cost of Goods Sold

8,476.8 14,128 19,779.2

Gross Profit 15,523.2 25,872 36,220.8Operating Expenses:

Salaries* Rs. 2,835 Rs. 4,725 Rs. 6,615Rent 1,000 1,000 1,000

Petrol 3,000 3,000 3,000Utilities

(Electricity,Cellular)

1,400 1,400 1,400

Advertising/Promotion

Rs. 13, 450 Rs. 750 Rs. 1,050

Depreciation 250 250 250Stationary 500 500 500




Net Income (6,911.8) 14,247 22,405.8*Salaries are allocated according to percentage of capital invested by each member. Every month, 50% of overall profits will be reinvested while remaining will be paid out as salaries to each member.

Generation of FundsTwo avenues exist for generating additional funds. One route is to opt for a personal

loan, such as the Youth Loan Schemes being introduced by the government of Pakistan. The proposed amount of said loan is Rs. 1 million, with a payback of 7 years along with 1 year grace period. This loan scheme will be very beneficial for our business venture as its terms are friendly.

The second avenue is to add another business partner, who will contribute an estimated capital of Rs. 25,000.




Appendix 1

Excel File for Budgets, salaries, and breakeven analysis.

Raw Material: Rs.3000 25kg 125 PacketsRs.36000 300kg 1500 packets Rs. 36000

Stickers: Rs.1.5/packet 1500packets Rs.2250 Rs. 2250

Cartons: 1 carton at Rs. 36.5 for 96 packets Rs.0.38/packetFor 1500 packets Rs.570

16 Cartons at Rs.584 for 1500 packets Rs. 584

Sylicon Glue: Rs. 35/kg30kg bag of glue=Rs.35 x 30kg = Rs.1050Enough for 2000 cartons Rs. 1050

Pouches: Rs. 250/kg for 150 packetsRs. 2500 for 10kg for 1500 packets Rs.2500

Total: 42384

Per Unit Cost of Production: Rs. 42384/1500= Rs. 28.256/unit cost of production

Per Month Expenses

Petrol 3000Rent 1000Equipment (Laptop Depreciated Straight Line) 250Stationary 500Utilities: Electricity 1000

Cellular 400 14006150

Operating BudgetTarget: 1500 packets made

(First 3 months)




One Time Expenses

Machinery (Sealing Machine) 1500Accessories: Gloves (2 Pair) 100

Weighing Machine 1200Visiting Cards (100 cards per partner…Rs.2 each) 800Mask (Rs.10 each) 40 2140

3640

Marketing BudgetItem Rate Jan Feb MarchLabel Rs. 1.5 per label 300 labels= Rs.450 500 labels= Rs. 750 700 labels=Rs .1050

Brochures Rs. 5 per brochure1000 brochures= Rs.5000 0 0Flex P osters (15"x10") Rs. 8 per poster 1000poster= Rs. 8000 0 0Total: 13450 750 1050

Jan 13450Feb 750March 1050

15250

Total Expense (First 3 Months)

Operating Expenses per monthx3 18450One Time Operating Expenses 3500Operating Expenses for 3 months 42384Marketing Expenses 15250

79584

Total Expenses for 3 moths 79584Packets in 3 months 1500

Cost per Packet 79584/1500= Rs. 53.056

Cost Per packet




Proposed Price to Retailer Rs. 80

Revenue per Packet Rs. 72 (After deduction of 10% margine to retailer)

Rs. 79584/Rs.72= 1106 Packets to Break Even

Note: Must sell 1106 packets to break even

For January:

Revenue Rs.72x 300 packets= Rs.21600Expenses Rs.53.1x300 packets= Rs. 15930

Profit Over all Rs. 5670

Profit per PersonRs. 5670/4= Rs. 1417.5

50% of profit will be re invested50% of profit will be paid as salary to each partner

Therefore, salary per person for Jan = Rs. 1417.5/2 = Rs. 708.75

Total Salary for January = Rs. 2835

Partner Salary Calculation (Monthly)

Break Even Point (In Units)




For February:

Revenue Rs.72x 500 packets= Rs. 36000Expenses Rs.53.1x500 packets= Rs. 26550





Total Salary for February = Rs. 4725

For March:

Revenue Rs.72x 700packets= Rs. 50400Expenses Rs.53.1x700 packets= Rs. 37170





Total Salary for March = Rs. 6615



business plan dec 21-2013.docx

Documents

business logo

business operations

manufactured phenyl

branded phenyl balls

e block nawab town

engineers town

awan town

packaged product