entrepreneurial finance business plan
DESCRIPTION
ENTREPRENEURAL BUSINESS PLAN RELATED TO EYE SHADOW STICKERS, BY MUHAMMAD ADNANTRANSCRIPT
BUSINESS PLAN eye shades stickers
NATURE OF COMPANYINTRODUCTION:
“self adhesive label, Eye Shadows stickers”
›Company Name
EYESHE
›Industry
Cosmetic industry
›Product
Eye Shadow Sticker
Continue…….
Nature of Company
LEGAL STRUCTURE:› Partnership (5 partners)
Continue……….
Facilities
›Location
Maymar industrial area, near super high way (200 Sq yards)›Machinery:
Flexographic machine: Flexographic printing machine, also called aniline press which uses photosensitive resin plate as the printing plate of printing machine. It adopts environmental ink and has advantage of low edition-producing cost, this is an ideal machine for mass lots, large variety production manufacturer It is also suitable for printing HDPE, LDPE, PP, cellophane paper, rolling paper etc
Machine Specification:
Printing speed 60m/minPrinting color 10colorMax web width 330mmMax printing width 320mmMax unwind diameter 700mmMax rewind diameter 700mmTotal power 10.5kwPrinting girth 175-355mmOverprint precision ±0.1mmDimensions(L*W*H) 3730*1150*2550MM
Universal High Speed FlexoPrinting Machine (RY_320_10_label_flexo_printing_press)
Operating plans
WORKING DAYS AND TIMINGS OF MACHINE
4 hours a day 5 days a week 80 hours a month
PURCHASING:
We make sure that all of our material is best in quality.
This involves purchasing of: Paper Roll Water Fluid ink
SUPPLIERSFor Machinery:
Ruian City, Henyue Printing Machinery Co., Ltd.
URL: http://henyue.en.alibaba.comRaw Material information: ROHS Paper: Restriction of Hazardous Substances:($180)
http://www.alibaba.com/productgs/510972076/ISO9001_2000_Rohs_CE_Ceramic_Fiber.html
http://suindustry.en.alibaba.com/
Water Fluid Ink ($15 per liter) http://www.alibaba.com/productgs/6990
56579/sticker_printer_solvent_ink.html http://fyprinter.en.alibaba.com
PAYMENT:
Payment is made through Banks in US $(DOLLAR)
MANAGEMENT TEAM & RESPONSIBILITIES:
› Salary StructureOut of the total net income a certain portion
will be general partner remuneration which will be divided equally divided among the partners. The remaining will be held as Reserves.
Names Experience Skills Functional Responsibility
Muhammad Adnan Fresh Graduate Communication Skills, Networking. Good at numbers
Finance Manager
Zaid Wajid Fresh Graduate Analyzing and development skills
Business Analyst, Marketing Manager
Imran afsar Fresh Graduate Communication and Problem solving Skills
Hr Manager
Muhammad Shoaib
Anwer
Fresh Graduate Market Researcher R&D Manager
IHSAN Fresh Graduate Communication, Problem Solving skills
Operation Manger
Potential Risks
Political and economical instability Resist in buying new product & brand: Price Sensitivity: Problems with suppliers: A potential strike or labor stoppage:
MARKETING OBJECTIVES:Qualitative Objectives: To create awareness of our product: through using mass media, print
ads & billboards. To make customer-oriented company: by delivering maximum quality
and new design & also educate customers regarding changing trend in cosmetic and the fashion industry
Quantitative Objectives: To achieve the desired level of sales: for this we have made
allies with the retailers giving them high commission to sell our product & also informing the customers about the benefits of our product.
Sales growth: To achieve 10% increase in market share annually Product line extension: We plan to increase our product line by
introducing a wide variety of new flavors and variation. Growth in market share: After acceptance of our product in
Karachi, we will launch our product to other cities of Pakistan.
Marketing Plans:
USP
Easy to use Have a longer life of 24 hours Easy to erase Skin friendly (Water fluid ink) less viscosity (that enable it to dry
quickly)
TARGET MARKET:
•Female of Karachi• age above 14•Professional women•School going girls •Teachers, lawyer, doctors, And SO ON…
Competition:
Direct competition: We will not be facing any direct competition with the cosmetic
industry in Pakistan International cosmetic companies include S.nail, H.S, Avon eye
shadow stickers
Indirect competition: Medora Etude Revlon
4P’S OF MARKETINGPRODUCT:“self adhesive label, Eye Shadows stickersPRICE:75 AveragePROMOTION: through newspapers and promotional activities.PLACE: Karachi, Pakistan
FINANCIAL
PROJECT Implementation Period
Purchase of land
Building construction
0 4 5321 6
Machinery order
Hiring of technical
Machinery
deliver
Trial run
6 months
SOURCE OF FINANCING EQUITY :
20% contributed by each of the 5 partners. Its mean each partner will contribute Rs.1,389,800
DEBT:
Is Use for the financing of Machinery and Initial Working Capital.
Machinery & Equipment* ($10000*96.5) Rs.1,447,500
Installation (7% of cost of machine) Rs.101,325
Initial Working Capital Rs. 13,045,369
Capital Structure:
Equity 32%
Debt 68%
Debt Rs.14,594,194 Equity Rs. 6,949,000
Total Project Cost RS 21,543,194
Capital Structure, Total Project Cost:
SOURCES OF DEBT FINANCING
PICIC :For the financing of machinery @12%
*Kibor 9.5%+2.5%=12%
Mudarba Bank (KASB Bank)for the financing of working capital @14%
*Kibor 9.5%+4.5%=14%
loan repayment schedule (for the fixed asset)
year Begning balance interest 12% payment total remaining balance
- 1,548,825
-
-
-
1,548,825
1 1,548,825
185,859
309,765
495,624
1,239,060
2 1,239,060
148,687
309,765
458,452
929,295
3 929,295
111,515
309,765
421,280
619,530
4 619,530
74,344
309,765
384,109
309,765
PICIC 2,098,825Total Loan Amount Required 309,765Interest Rate 12.0%Constant Payment 309,765
Loan repayment schedule (for working capital)
year Begning balance interest 12% payment total remaining balance
- 13,045,369
-
-
-
13,045,369
1 13,045,369
1,826,352
13,045,369
14,871,720
-
Cost Elements No of Employees
Per month salary
Security guards 2 8000 96000
Peon 2 6000 72000
Legal advisor fee 1 20000 120000
Company formation fee
N/A - 50000
Advertising & Marketing Exp
N/A - 300000
TOTAL - - 638000
Implementation period
6 month
Preliminary Expenses Break Up
Explanation: how did we establish this capacity?
We have calculate the capacity by keeping the following assumption in mind, these are
Daily hours the machinery operate 4 Per week the machinery operate hours 20.00 Per month the machinery operate in hours 80.00 1 paper roll can be printed by 10 liter of water fluid ink Waste of 40% exist
Establishing capacity
Machine can print 60metar/minute 1 paper roll length is equal to 600 meter and the width is equal to .7 mmThe Area of one Paper Roll = 672000 Sq inches*
Calculation*:one meter =39.37 inches =40 inches
Covert the date into inches 600meter=40inch *600 = 24,000 inch
.7 millimeter =40*.7 = 28 inch
The Total Area of the Roller = 672,000 Sq inchContinue…….
Calculation of the Total Number of Stickers by the one Paper roller:
Calculation of the total number of stickers by the one roller is to set the standard of the eye shades stickers
That the sticker is 1 inch in height and 1.5 inch In length
Now, the total sticker we can print is equal to 448,000
Waste of 40 % is equal to 179,200 Now the total sticker left after the waste
deduction is equal to 268,800 Now covert it to pairs 268,800/2 which is
equal to 134,400 pairs of stickers which can be produce by the one paper roll
Hence the capacity means, the total number of sticker in pairs made each month is equal to 134400*80 which is equal to 10,752,000
PAPE
R R
OLL
ER
Length of the roller 600
meter =24000 inch
Height of the roller is .7mm =28 inches
Continue………
Capacity
The capacity of the project if operate at the full capacity (100%) is equal to 10,752,000 Pair of stickers each month.
During trial run period (2 month) the capacity of the project is 5% which is equal to 537,600 pair of eye shadow stickers.
Capacity of the Project during trial run period per month
=actual output/actual capacity
Capacity = 537,600 / 10,752,000Capacity=5%
Project Cost break up:
land (200 sq yards) 2,500,000
Building 1,800,000
vehicles 400,000
Interiors 700,000
Machinery & Equipment* (15000*96.5) 1,447,500
Installation (7% of cost of machine) 101,325
Generator (45 Kva / 37 kva ISUZU) 550,000
Contingencies 200,000
Office Equipment 161,000
Preliminary Expenses 638,000
Initial Working Capital 13,045,369
Total Project Cost 21,543,194
PRODUCT RANGE:
product range 2 20% 20% 20% 20% 20%
trial run Period YR 1 YR 2 YR 3 YR 4 YR 5
Product Range # of eye shades
bridal eye shades
322,560
2,322,432
2,786,918 3,344,302 4,013,162 4,815,795
casual eye shades
322,560
2,322,432
2,786,918 3,344,302 4,013,162 4,815,795
party Eye shades
430,080
3,096,576
3,715,891 4,459,069 5,350,883 6,421,060
Total Designs 1,075,200
7,741,440
9,289,728
11,147,674 13,377,208 16,052,650
DM COST OF INK PER PAIR 0.91
DM COST OF PAPER PER PAIR 1.09
DIRECT MATERIAL COSTING:
DM COSTING
DM cost pair
water fluid ink 0.91
976,077
2,108,326
2,529,991 3,035,989 3,643,187 4,371,824
ROHS Paper 1.09
1,171,292
2,529,991
3,035,989 3,643,187 4,371,824 5,246,189
Total DM Cost 2,147,369
4,638,316
5,565,980 6,679,176 8,015,011 9,618,013
DIRECT LABOUR COST:
DL COSTING
Months 2
trial run Period YR 1 YR 2 YR 3 YR 4 YR 5
Workers (technicians)
2
2
2
3 3 4
Workers 10,000
40,000
240,000
240,000
360,000 360,000 480,000
Total DL Cost 40,000
240,000
240,000
360,000 360,000 480,000
DL COST PER PAIR
0.0039156721
FOH COSTING
Trial Run Period YR 1 YR 2 YR 3 YR 4 YR 5
Monthly Cost
Transportation 10,000
20,000
120,000
120,000
120,000 120,000 120,000
Maintenance cost per year N/A
144,750
144,750
144,750 144,750 144,750
Utilities
Electricity 25,000
50,000
315,000
360,000
360,000 360,000 360,000
Telphone/ Internet
4,000
8,000
48,000
48,000
48,000 48,000 48,000
Depreciation:
Interiors & Equipment
214,750
214,750
214,750 214,750 214,750
machinery
289,500
289,500
289,500 289,500 289,500
Generator & Office Equipment
142,200
142,200
142,200 142,200 142,200
Other Expenses:
packaging (outsource)
10,752,000
64,512,000
64,512,000
64,512,000 64,512,000 64,512,000
Security Guards 8,000
16,000
96,000
96,000
96,000 96,000 96,000
Peon 6,000
12,000
72,000
72,000
72,000 72,000 72,000
Total FOH 10,858,000
65,954,200
65,999,200
65,999,200 65,999,200 65,999,200
FOH per piece 2.13
30.67067
30.69159
30.69159 30.69159 30.69159
Cost of eye shadow stickers:
COST OF EYE SHADOW STICKERS
Trial Run Period YR 1 YR 2 YR 3 YR 4 YR 5
Total DM Cost
2,147,369
4,638,316
5,565,980
6,679,176 8,015,011 9,618,013
Total DL Cost
40,000
240,000
240,000
360,000 360,000 480,000
Total FOH
10,858,000
65,954,200
65,999,200
65,999,200 65,999,200 65,999,200
TOTAL COST
13,045,369
70,832,516
71,805,180
73,038,376 74,374,211 76,097,213
Price Based on market researsh:
Product type s Prices
Bridle eye shades 80
casual eye shades 70
party Eye shades 70
Summary of Profit and Loss Account INCOME STATEMENT
Trial run period YR 1 YR 2 YR 3 YR 4 YR 5
sales Revenue 78,489,600
565,125,120
678,150,144 813,780,173
976,536,207 1,171,843,449
COGS 13,045,369 70,832,516 71,805,180 73,038,376 74,374,211 76,097,213
Gross Profit 65,444,231
494,292,604
606,344,964 740,741,797
902,161,997 1,095,746,236
LESS: Depreciation
plant, machinery - 289,500 289,500 289,500 289,500 289,500
interior - 214,750 214,750 214,750 214,750 214,750
office equipment - 142,200 142,200 142,200 142,200 142,200
EBIT 65,444,231
494,225,154
605,698,514 740,095,347
901,515,547 1,095,099,786
Interest (working capital
- 1,826,352 - - - -
Interest (Machinery)
- 185,859 148,687 111,515 74,344 37,172
EBT 65,444,231
492,212,943
605,549,827 739,983,832
901,441,203 1,095,062,614
Taxes 26,177,693
196,885,177
242,219,931 295,993,533
360,576,481 438,025,046
Net Income 39,266,539
295,327,766
363,329,896 443,990,299
540,864,722 657,037,568
REVENUE SCHEDULE:
REVENUE SCHEDULE
Revenue Increase 20% 20% 20% 20%
Trial Run Period YR 1 YR 2 YR 3 YR 4
# OF CUSTOMERS
Bridle eye shades
322,560 2,322,432 2,786,918 3,344,302 4,013,162
casual eye shades
322,560 2,322,432 2,786,918 3,344,302 4,013,162
party Eye shades
430,080 3,096,576 3,715,891 4,459,069 5,350,883
Total buyers 1,075,200 7,741,440 9,289,728 11,147,674 13,377,208
price per piece
Bridle eye shades
80
25,804,800 185,794,560 222,953,472 267,544,166 321,053,000
casual eye shades
70
22,579,200 162,570,240 195,084,288 234,101,146 280,921,375
party Eye shades
70
30,105,600 216,760,320 260,112,384 312,134,861 374,561,833
Total Revenue (Rs) 78,489,600 565,125,120 678,150,144 813,780,173 976,536,207
SWOT ANALYSIS:
STRENGTHS
First to market in Karachi. A practical, efficient way to
have a Makeover, minimizing costs.
Easy to use, can use by large population
WEAKNESSES:
The company lacks visibility, because of large number of competitor.
The whole industry is so cutting edge it lacks consumer awareness.
less awareness.
Continue…….
THREATS
Conservatism and Traditionalism.
Competition may arise soon.
OPPORTUNITIES
Similar companies in other countries have seen explosive growth.
Rationality (reasonableness).
-
THANK YOU…..
ANY QUESTION….
?