eps analayis assignment

ENTREPRENEURSHIPBUSINESS PLAN

Group Members: (BBA-6A)Ahmed SaeedAhsen Ehsan

Syed Umair AsifAhmed Akhtar

Ahmed AliAli Syed

Ahtesham KhanHassan Shahzad Mughal

Submitted to:Ms. Amna Sadaf

ENTREPRENEURSHIPBusiness Plan


Table of Contents

Executive Summary...................................................................................................- 1 -DESCRITION OF THE VENTURE.........................................................................- 2 -Product and Services.................................................................................................- 3 -

Products.................................................................................................................- 3 -Services..................................................................................................................- 4 -

INDUSTRY ANALYSIS..........................................................................................- 6 -Market Analysis.....................................................................................................- 6 -Competitive Analysis............................................................................................- 6 -

Market Segmentation.................................................................................................- 8 -PRODUCTION PLAN............................................................................................- 10 -Suppliers..................................................................................................................- 10 -

Urdu Bazaar.....................................................................................................- 10 -Waseem Stationers..........................................................................................- 10 -

Physical Plant showroom cum gallery.....................................................................- 11 -The Interior Décor...........................................................................................- 11 -

MARKETING PLAN..............................................................................................- 13 -Situation Analysis................................................................................................- 13 -Price.....................................................................................................................- 13 -

Promotion................................................................................................................- 15 -Cradle SWOT Analyses...........................................................................................- 18 -Location...................................................................................................................- 20 -Address....................................................................................................................- 21 -ORGANIZATIONAL PLAN..................................................................................- 21 -

Designation And Responsibilities.......................................................................- 22 -Salary Package.....................................................................................................- 24 -

Organizational Structure..........................................................................................- 25 -Timings................................................................................................................- 25 -

OPERATIONAL PLAN..........................................................................................- 25 -Quotation For The Outlet....................................................................................- 25 -Day To Day Activity...........................................................................................- 26 -

Inventory Control....................................................................................................- 28 -FINANCIAL PLAN................................................................................................- 30 -

Payback Period....................................................................................................- 31 -Internal Rate Of Return.......................................................................................- 31 -

CRADLE IN The Future.........................................................................................- 33 -


GROUP MEMBERS’ EVALUATION

Group Leader: Ahmed Saeed (Came up with the idea, logo and strategies to implement in

each part of the Market Plan, Management Plan, Operational and Financial Plan. In the end did the final compilation of the business plan after getting the data from the team members).

Associates: Ali Syed (Worked on the Marketing Plan) Ahmed Akhtar (Worked on the Management Plan and helped me come up

with the logo design) Ahtesham Khan (Worked on the Operational and Financial Plan)

Followers: Syed Umair Asif (Worked with Ali on the Swot Analysis and Competitive

Analysis by Analyizing our Market i.e. both consumers and producers). Ahsen Ehsan (Worked with the group leader Ahmed Saeed on the Marketing

Mix Strategies on Promotion, Price, Products and Services, and Place) Ahmed Ali (Worked with Ahmed Akhtar to come up with our Management

Plan and to structure our organization). Hassan Shahzad Mughal (Helped Ahtesham in the operational aspects of the

company by highlighting the vendors and the inventory levels of day to day activities).


The history of the craft of hand made paper echoes in many ways the story of civilization, yet its actual development is conjecture.

A civilized world is inconceivable without paper. The uses of paper as a medium for storing and conveying information go far

beyond the dreams of its inventors.

The artistic aspect; paper as a mean of self expression, from notebook, diaries to other forms of fine arts, from the exciting

decorative uses of lampshades to picture frames.

We at Cradle believe in caring & enhancing of this centuries old ancient craft of paper making.


Executive Summary

Cradle is a small outlet for paper products and an Art Gallery providing an exposure

to display their talents. Owned by a zealous artist, Cradle was a vision that was

developed in 2006, and took a physical shape in may 2009. Dealing with customized

cards, paper products, packing services and supporting an art gallery, this shop is one

of its kinds in an evolving market of Islamabad. The market of Islamabad provides

multi audience who want to experiment with new ideas. Starting from teenagers to

elders Cradle offers its services to everyone. Supporting a classical medieval interior

giving it a unique and feminine nature, females would be more interested. Cradle,

being in F-7/2, can cash up on its location with Jinnah Super right around the corner

and the street having an official importance attached to it due to the WHO office.

Cradle has a management staff consisting of six dedicated employees, who work

together to make it a successful business by providing customized services to

everyone alike.

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Description of the venture

Cradle a small business set up by a zealous and an aspiring artist. The business is

setup in pursuance of a hobby that became a passion i.e. Arts. Although this passion

is now a small business setup in the shape of a retail outlet, its main objective is to

share, inspire and to give others with the opportunity to grow.

The concept of Cradle generated in 2006 with the first greeting cards being supplied

to different shops such as Feelings in F-10 Markaz. Due to the academic obligations

and rawness in the business field, we were unable to act upon the idea of owing an

outlet for these unique thoughts. In 2009, an opportunity arose when a young and

bright architect who also had a vision for such an activity, Mr. Ali Syed (a Graduate

from Indus Valley) encouraged opening up an Art Gallery in the district of Islamabad.

Cradle would be made functional on the 1st of May 2009, by holding an exhibition

and inviting friends and family. It would start its function from the first of May, with

an accounting cycle starting from that very date. Cradle offers a variety of products

to its clients, mainly operating on a personal basis. The main product offered by the

business is hand made cards; these are usually made to the requirement of the

clients, even though a variety of cards are already made to suit different taste for

different occasions, personalized cards is always recommended.

Other products offered by cradle include hand made diaries, note pads and other

paper related products using usually recycled papers or hand made papers, designed

and available in different colors and styles.

A number of services are also offered by the business that includes an art gallery to

upcoming and young amateur artists. As this is a passion of the owner, who wants to

provide a platform and to promote arts, these artists will display their work at

minimal cost. Finally a unique service offered by cradle is a gift wrapping service.

This is the first of its kind in Pakistan. The service deals with providing a packaging

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service using different forms of papers in all styles according to the customers wishes

and would be based on themes such as for weddings, special occasions such as

valentines.

The customers for Cradle include all the art lovers from teenagers to elders from all

classes and gender. But due to personalized services, the costs would evidently be

high, making the privileged class providing the target clientele to Cradle. Cradle

would also be offering their Gallery services to the needy artists who can’t afford to

rent a place but have the talent to prove them.

At the moment it is a sole proprietorship with the sponsorship from Mr.Ali Syed. The

entrepreneur Ahmed Saeed would be handling the operations for the initial period in

the capital. They plan to open outlets in Karachi and Lahore upon the Islamabad’s

success which may be handled by the entrepreneur himself backed by the funding

provided by Mr. Ali Syed. The business due to its nature of operations has no

intention of becoming a publicly owned business venture at any stage of time.

Product and Services

Cradle is a unique concept dealing with paper and its products. Also the services

offered are a one of its kinds in Islamabad. A number of product and services offered

by Cradle as listed below

PRODUCTS

1. Cards: all customized made for special occasions

2. Chart Papers: (used to make cards, wrapping material and for selling

purposes)

a. Fabric Sheets (local and imported)

b. Pastel Sheets (local and imported)

c. Every Card (white, pink, light green, blue, yellow)

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d. Graph Sheets

e. Crepe Paper (local and imported)

f. Kite Paper

g. Corrugated Paper (imported)

h. Color Card (imported)

3. Hand made diaries

4. Paper Mache

5. Paper Boxes: used to pack different things such as shirts, clothes, any gift

items

6. Jewellery Boxes

Cradle has a conscious approach towards the environment and works with 100%

wood free recycled natural fiber. Handmade paper are made from the waste scraps

of cotton fabric, waste paper and agriculture waste turning into exquisite sheets of

paper. Submitting to a social responsibility to care of environment, this paper is

biodegradable; therefore using handmade paper is the simple way to protect the

environment.

SERVICES

1. Gallery

The art gallery is a small room where the potential artists would be displaying their

creations to either hold exhibitions or use it to work on their projects. The art gallery

would be providing the amateur artists with an opening into their own private world

to work on their creations and in turn giving them a haven for their talents to

cultivate in a nestled environment. Also after the initial period is over and the

company produces a name in the market, different lectures would be held inviting

different artists from Pakistan to give their input to the amateur artist new in this

field.

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2. Wrapping and packing

The trend for packing gifts in a tasteful fashion has become “in” classified by the

fashion gurus. Fashion stricken people who are cautious about presentation have

become aware about getting their purchases packed in chic ways for their loved

ones. This practice is common when it comes to birthday gifts, valentines (where

girls spend hours packing small gifts to give them a personalized as well as an

impressive touch to it) or in the corporate world if the companies want to get their

packages designed. Through its packaging, the outer look, the value of the gift

changes all together. Taking care of the needs of the people Cradle has introduced

its services for packing gifts to make them more meaningful and memorable.

The elaboration of weddings has exceeded all limits, and people take care of very

minutest details. In consideration of this fact, Cradle provides it services to the

people involved in getting married to pack their gifts bought for exchanging (dowry)

purposes pack according to the clients desire and the theme set up for the wedding

day. The packaging services are customized according to the customers’ wishes, thus

giving the presents a personalized touch. The tradition of giving sweets on occasions

can be fancied by Cradle offering Sweet baskets for the customers on joyous

occasions such as weddings. Along with the packed gifts the customers can also buy

cards or other paper product at a discounted rate.

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INDUSTRY ANALYSIS

MARKET ANALYSIS

The market in which Cradle would function is an evolving market, which holds a lot

of opportunities for new businesses to flourish. The trend in similar products such as

hand made products have seen a favorable attitude by customers. Such items have

been seen by the customers as stylish and in fashion products hence their demand

has increased creditably.

The city of Islamabad is as mentioned above going through a phase of evolving, as

new trends and many fashion gurus have focused their attention to the city. The

demographic changes and the incline towards celebrating different occasions such

as, ‘valentines’ and ‘mother days’ also show positive trait for Cradle. Similar trends

like that of Cradle, coming from other cities alike or being successful in other cities,

such as Papier-mâché in Lahore, has already created a mind set in the residents of

Islamabad, who now are starving for new innovative and creative ideas; especially in

hand made products.

The current business environment is very favorable for a business like Cradle to be

introduced; the customers are willing to try and become in vogue with the new

trends and styles so to experience unique and creative things. Yet the fact that the

not so bright success rate of business in Islamabad is always a risk is kept in mind.

The trend in Islamabad is very unpredictable; if the business ‘clicks’ in the initial

stages it is sure to be a success, otherwise a closure is guaranteed.

COMPETITIVE ANALYSIS

Cradle is a business offering a combination of one of its kind, unique products and

services. The company faces every little competition in the city as there is no other

shop or designer specializing in similar product or services.

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Cradle is expected to face some competition from different shops selling cards and

similar products at the time of launch and the initial stages, till it establishes a fair

footing and builds a name for it self. The competition is considered more of an in-

direct competition rather than direct as these bookshops and other shop sell cards

and other paper products as a part of their retail mix. They do not specialize in any of

these products or hold a wide variety. While Cradle specializes in its product offering

a wide variety of personalized and unique products, rather than the generic products

offered by these shops.

Some of the competitors (in-direct) for Cradle identified are:

Illusions

Haroon’s

Saeed Book Bank

Book Nook

Durrani’s

Waseem Stationers

And main bookshops

Nomad Gallery

While Cradle faces some indirect competition in its product range there is no

competition for its service side. Again if other schools or academies such as Nomad,

Hunerkada are studied, they provide indirect competition to Cradle. All in all their

services are quite different from that of Cradle. Nomad supports an Art gallery but its

target market is completely different from that of Cardle; while Nomad supports

established artist, Cradle has its door open to amateur artists seeking their way in to

success. There are other galleries in Islamabad but as Cradle offers its different

services alongside the gallery, it is safe from competition. While the wrapping papers

and packing service is a unique service which has no competition until now.

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Market Segmentation

The nature of the product and service makes it hard but also impractical to be

segmented; hence Cradle does not limit its clientele to specific groups. But keeping

in line with the nature of the business and the product and service offered certain

segments would be more attracted towards the business, making them the segment

for the business.

The concept of the business is considered as a very stylish and fashionable setup,

hence, would build a perception in the eyes of the customer to be an expensive

shop. Although our cost is low it will still be high in some cases compared to many

products offered by our competitors and other retailers, most of our products would

be at reasonable cost justifying the service and products. This would attract a certain

segment that is willing to spend more than usual.

The main audience would be the people who would want to go a step further in

what they do and how they do it. Making personal cards and other services would

initially attract art lovers or people who really want to make an impact or who just

want to be different.

As the business establishes it self, the market would increase attracting more

segments. Although Cradle’s services would not attract the young customers but the

main audience identified at this point would be the segment aged between the ages

of 16 to 50 or above. At the initial stages and for some services such as packaging

gifts, higher income clients are expected, those who dare to be different or are

scarce in time. This can also be predicted as the gallery would attract a more

sophisticated and higher class audience, who like to spend on such luxuries products

or have a passion for arts.

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The cards on the other hand would cater for a broader segment in terms of income

as many customers are expected to be in late teens or young adults. Keeping this

segment in mind, prices of all products especially cards would be set. The music

session would also attract these segments.

Another segment that is expected to be attracted in the initial launch stage is gender

related. Females are expected to be more inclined towards Cradle in terms of its

products and services offered as compared to men. Hence many designs and styles

would directly target them.

The segment of the gallery includes the students who want to launch themselves.

Also different corporations such as Chen One or restaurants such as Civil Junction,

Blue Lagoon, or interior designers would be catered to. The people involved in the

restaurant business are looking for creative pictures usually buying from the

students at a cheaper price when they refurnish their outlet. They would be given

invitations to visit Cradle if they wish to redecorate. Cradle would also target interior

decorators that are in constant search for finding nice things for a lesser price and

buy them from students.

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Production PlanSUPPLIERS

The inventory for Cradle is all the paper and paper material involved in the packing

services. The inventory would be bought from either Urdu Bazaar or Waseem

Stationers. The transportation would be borne by Cradle itself for the initial

purchase. Deals will be made by some suppliers sitting in Urdu Bazaar to deliver

themselves. The costs for transportation include the fuel expense which comes down

to Rs. 250 on gas for one trip. The re-order quantity would depend on the level of

sales and demand for that product. The distributors for paints are Wamiq and Pablo.

The key suppliers of paper would be from:

URDU BAZAAR

There are different suppliers sitting in Urdu Bazaar, Rawalpindi, who deal with paper

products. They would be bought from there and would be brought to the outlet. The

transportation cost would be Rs. 250 on gas and the things would be ordered twice a

month depending on the level of sales and the demands of the customers.

WASEEM STATIONERS

Waseem Stationers is a stationary shop in Jinnah Super market F-7 Islamabad. It has

a wide variety of paper and other products. The pens and paints would be bought

from here for the cards and the packing services at the convenience of the owner

and the number of orders. Waseem Stationers due to its ideal location is a back up

supplier for Cradle in case of emergency of meeting the deadline for the order.

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Physical Plant showroom cum galleryThe annex is a 2 room house which has two halls. It requires little renovation; the

layout can be easily and effectively used to suit Cradle’s needs.

THE INTERIOR DÉCOR

The outlet is a small setup consisting of two rooms; one devoted to the gallery with

an office and the other one handling the cards and the paper products. The office is

for the entrepreneur where the clients would be discussing their demands of how to

make the cards or themes for packing service.

The interior follows an ancient medieval European setup with heavy draperies. The

only modern touch comes in the color scheme of the gallery. Not following a

traditional red color associated with medieval times, Cradle follows an oceanic

theme blended in with the chic touch of classical times.

The walls of the gallery would be painted a nice soft cream color so as to make the

paintings stand out during an exhibition. The sofas on the left side placed in an L

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shape, are blue leather couches. The office is decorated in combination of blue and

oceanic green, which is the theme for the outlet.

The card section is furnished with wood (dark oak) dominating the room due to the

lining of the shelves placed on all three walls. A centre table made of dark oak wood

is placed for displaying the paper products such as diaries, notebooks, albums,

frames etc.

To fill up the gaps and make the place lively the walls of the card shop would be

painted dark blue contrasting against the deep brown of the wood, and blended by

the green of the plants that will be placed on all the corners in a symmetrical way.

The dark colors, representing the medieval times, would be accentuated by the use

of spot lights and lamps. The use of lamps would soften the touch and would

highlight all the paintings displayed in the gallery section.

The gallery would also be made lively due to the plants used. Lamps would be used

to give the required lighting making it give an elegant look. Spotlights would be

placed in a way that draws attention to the paintings.

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Marketing Plan

SITUATION ANALYSIS

It is important to understand the environment Cradle would function in. Although

the sole purpose of the business is not to be a commercial venture, different aspects

have to be taken in mind to attract clients and attention to the business.

PRICE

The price per month for each item is included in the chart along with its selling price.

(The quantity of the products is listed down in ranges so as to be flexible to demand.)

Item

No.

Products Quantity

Ordered

Price (Rs.)

Purchased

Price

Price (Rs.)

Total Sale

Price

Suppliers

00001 Chart papers(Local)

All Colors

150-200 1200-1600

(Rs. 8 each)

1500-2000

(Rs. 10

each)

Urdu

Bazaar

Waseem

Stationer

s

00002 Papyrus Paper 50-100 2000-4000

(Rs. 40 each)

2500-5000

(Rs. 50

each)

00003 Glaze Paper(Local) 20-50 100-250

(Rs. 5 each)

240-600

(Rs. 12

each)

00004

00004a

Fabric Sheets(local)

(Imported)

15-30

15-30

300-600

375-750

(Rs. 20 local

Rs. 25

imported)

375-750

450-900

(Rs. 25 local

Rs. 30

imported)

00005 Pastel Sheets

(Imported)

15-30 750-1500

(Rs. 50 each)

825-1650

(Rs. 55

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each)

00006 Every Card (white,

pink, light green,

blue, yellow)

20-50 100-250

(Rs. 5 each)

200-500

(Rs. 10

each)

00007 Graph Sheets 20-50 100-250

(Rs. 5 each)

200-500

(Rs. 10

each)

00008

00008a

Crepe Paper (local)

(Imported)

15-30

15-30

75-150

1650-3300

(Rs. 5 local ,

Rs. 110

imported)

150-300

1875-3750

(Rs. 10 local

Rs. 125

imported)

00009 Kite Paper 20-30 20-30

(Re. 1 each)

40-60

(Rs 2 each)

00010 Corrugated Paper

(imported)

15-30 1650-3300

(Rs. 110

each)

1875-3750

(Rs. 125

each)

00011 Color Card

(imported)

15-30 600-1200

(Rs. 40 each)

750-1500

(Rs. 50

each)

00012

00013

00014

00015

00016

00017

00018

Accessories for

making cards and

packing services:

Paints(WaterColors)

(Glass Paints)

(Fabric Paints)

Crayons Sets

Glitter Pens Sets

Pastels

Ribbons

100-150

100-150

100-150

20

10

10

50

3000-4500

2000-3000

2500-3750

2000

3000

4000

100-250

Urdu

Bazaar

00019 Paper Diaries 20-50 Rs. 150-550 Rs. 250-650

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China

Market

00020 Notebooks 20-50 Rs. 200-450 Rs. 250-500

00021 Photo Albums 15-30 Rs. 150-1200 Rs. 250-

1500

00022 Photo Frames 10-30 Rs. 150-550 Rs. 250-800

00023 Paper Mache 15-30 Rs. 200-1000 Rs 350-1500

00024 Paper Boxes 50-100 Rs. 20-250 Rs. 50-500

00025 Jewellery Box 50-100 Rs. 20-250 Rs. 50-500

The above table fives an estimate of how much would be bought in one month at

the initial stage for Cradle to equip itself. In the coming months, the inventory stock

would either increase or decrease depending on how much would be sold. This

would also determine which product is sold the most and so according to that the

inventory would be bought.

PromotionCradle as it is a new concept in a developing market; it needs to promote itself to a

higher level. Targeting artists, the elite class who are willing to pay higher prices for

the unique idea, Cradle needs to promote at that level. Different procedures would

be undertaken for promoting this new idea.

Cradle needs to promote effectively. For launching itself first in the market, Cradle

would be putting up banners all over Islamabad, especially in the vicinity of F-6, F-7,

F-8 and F-10 where more of its clients reside. Hype has to be created in order to

attract the market, so teasers would be used to advertise. In order to do so banners

with just one word such as “Cradle--- For the Artist Inside You” can be put up for the

initial period that would arose a desire and a curiosity about the whole product.

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Advertisements would be printed in the local Newspapers and magazines. This

method of advertisements is comparatively cheaper but would be giving a regional

coverage, the detail of the product and the services can be provided and also the

readers can refer back to the advertisements. Advertisements in magazines such as

Home and Décor, Brides, Asian Brides, In Vogue, Wedding Affair can run color

advertisements targeting a specific market segment, women, and these ads may be

referred to at a later stage.

Also brochures would be circulated in the locality of F-7 and F-8 where more of the

target audience resides. In order to lobby diplomats, invitation cards would be sent

to them in order to gain their support and invite them to visit the gallery.

After a few months’ intervals, this process would be repeated in other localities. The

entrepreneur’s friends working as DJs on FM 99, 101 would be asked to talk about

this shop on their shows so as to cover up a larger audience and to inform them of

the latest happenings of the shop.

Cradle’s operations are such that it requires support form its clientele. For this

purpose it depends on positive word of mouth to be the biggest form of promotion.

Once a customer is satisfied with its service and becomes loyal, he would be

providing us with more clients. Positive word of mouth would be providing Cradle

with the base for establishing itself as a brand. In order to keep a service unique,

personalized yet public is very important for a business like Cradle to do in order to

build up a positive perception about the outlet. So word of mouth is an important

tool for Cradle as art feeds on appreciation, and Cradle needs appreciation and

criticism to improve itself and emerge as a brand.

There would be exhibitions held at the Gallery by known artists. Local artists who

have established a name for themselves would be invited to launch the shop and an

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exhibition would be held. The costs associated with advertisements, refreshments

and invitations would be borne by Cradle but the price of the package would include

all these costs. Cards and other products would also be displayed in order to get the

customers know about these products. These exhibitions by known artists would be

held on a quarterly basis per year in order to keep the audiences know about the

happenings of Cradle and keep them in constant touch with its procedures.

At the inception, Cradle plans to make contracts with certain universities like Iqra

(for students who have graduated and want a base to display their standings in

market) to use the premises of Cradle to hold their students exhibitions at a 10%

discount. This would give Cradle a boost from the students’ side as well as to them,

as they would be allowed to expose their creations in front of the masses.

Direct marketing would also be used to promote Cradle. Invitation letters would be

sending to many different people with mini samples for the exhibitions. When going

to different universities and academies, the entrepreneur would be advertising

personally.

Alongside the exhibition a party would also be arranged where the diplomats and

dignitaries from different corporations would be invited as in Islamabad, they are the

biggest potential buyers for art work.

The following table shows the rates and the time intervals for the different promotions

used:

Type of Promotion Time Interval Rate

Banners (12’ by 4’,

Multicolor, 30)

2 weeks before initial

launch

Rs. 75000

(Rs. 2500 each)

Newspaper Advertisements

The News (Banner on top of

the page - 5cm x 8col)

Initial launch and then

after 4 months for telling

customers about new

Rs. 25000

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2cm x 4col.Leisure Page Banner

The Post (Banner)

Three Months

Strips on Regular pages

(Section A, page 1) Color

products Rs. 5000

Rs. 22500

Rs. 20000

Magazine Advertisements

The Post (Red) Front inside

(Angels)Ordinary

Full Page Advertisements

Interval of 5 months

Rs. 40000

Rs. 18000

Exhibition cum Party Launch Rs. 100,000

Cradle SWOT Analyses

To clearly understand Cradles standing against its competitors, it is vital to

understand the strengths, weakness, opportunities and threat of the company.

Analyzing these vital areas for the businesses would also help in better

understanding the market situation faced by Cradle.

STRENGTHS WEAKNESS

Wide Variety of paper products and

services

Avoiding direct competition

Profit not the main aim

Unique and personal service and

products

Art gallery

Strong social network

A socially responsible company

Working to preserve art and culture

High Costs

Slow growth

Not well known

Limited budget

A new concept of packing service for

which a market has to be created:

idea to be accepted by a large crowd

Art is appreciated but without

compensation

OPPORTUNITIES THREATS

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To grow the business and product

line

New line of business, new idea of

packing service so would create a

monopoly in the market

Opening the gallery for membership

services for the clients who exhibit in

a routine

Indirect competition

New stores opening up

Well known stores increasing

product range (clay works)

Lobbies and groupings of Artists who

have their own galleries

Cradle’s strengths come in the shape of personalized services that creates a sense of

belonging for the clients as they know that their needs would be taken care of. This

is the first shop of its kind that offers paper made products. It is a socially responsible

company working to promote art culture. The students are given maximum

opportunity to display their talents and get a solid foundation.

Cradle would be focusing on enlarging its products so as to cater to all the segments

of the market. Due to its unique nature, it enjoys a monopoly in the market due to

its services. Even though it is faced with the threat of new stores opening up and the

previous ones increasing their product range, but still Cradle has its uniqueness in

the packaging service. Another threat faced by Cradle as an Art Gallery is that in

Islamabad there are different groupings of people who own a gallery. They avoid

competition to come in the market and thus don’t support such an activity which

could take their sales away. In order to avoid such lobbyists, Cradle would

concentrate more on its products and services of providing packing services until it

establishes a name for itself. In the meantime, it would be holding exhibitions for

students and running its operations without getting into competition. Cradle’s art

gallery in order to become a brand would be needing support from influential

people. Mr. Iftikhar, the Director of Media Visibility at KISP an Ngo, former founder

of Takshila, an Ngo working for cultural preservation, would be an influential support

for Cradle.

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The initial period of setting up would be costly and maintaining it would require

additional costs. Also an Art gallery would be used by students mostly who would

not be able to pay up a heavy amount. Nevertheless once Cradle starts providing

membership services, a subscription fee would be charged on a monthly basis. The

growth in such an industry is usually slow, with a few people getting to know about

it. It would be functioning on word of mouth mostly so that would be a slower

process.

Location

Location is a very important and vital point for Cradle. It is important to select the

right location that would help build customer perception and attract the customers

to Cradle, while being easily accessible. Finance is a hindering factor in the business

and network and social circle a strong point.

Keeping these facts in mind, the entrepreneur decided to utilize the space of in the

annexe of his own house to be used as the shop cum gallery for the business. The

annexe is located in sector F-7 in a busy street with the WHO office at the corner

end. At the back of the house is the Egyptian Embassy, providing this area an official

importance and openings for diplomats to come in. the house is built on a 100’ to 90’

plot area, having a value of fourteen crore. The Annexe has 10 by 12, two rooms

with a bathroom attached with a rental value of Rs. 20000.

This sector and the location is the prime location for Cradle as it can set the

perception plus being in house gives it a different atmosphere than a shop, which

was vital to create. The open-end street with Jinnah Supper right around the corner

makes it accessible and an attractive location for the business.

This annexe, separate from the house, is a two room setup which was previously

used as a servants quarter. With the servants shifting to the backside of the house,

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this space provides ideal utilization for Cradle to set up. The two rooms are being

renovated and painted to provide the right set up. At this moment, the renovating

work for Cradle is taking place which is fixing spot lights on all the right places for the

gallery and the shop. The shop has a separate gate making it easily accessible for the

clients to walk in.

AddressCradle

House No. 17, Street No. 20, F-7/2, Islamabad

Organizational Plan

Working in a creative environment demands freedom, with no chains of structure

tying anyone in its hold. In order to keep the ideas following for all the artists

working, Cradle does not have any hierarchical structure. But for the state of affairs

to run smoothly the employees would be given designations but only to identify

their roles and level of responsibility. The main responsibility for all the employees

would be to build strong customer relationships by providing exceptional customer

service and ensuring quality results.

DESIGNATION AND RESPONSIBILITIES

The following management team would be functional:

Owner and Entrepreneur: Ahmed Saeed

Ahmed would be the owner of the small outlet in Islamabad, handling the main

functions of managing the shop in the initial stages. He would be the head

coordinator for designing the layout of the shop and thus putting the foundation of

the art gallery, as well as decorating the interior to make it functional. He is also the

brains behind making the cards in his own unique way that stand different from his

competitor. Also he would be involved in providing all the services and working

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through it himself, such as for packing or for holding exhibitions, he would be

managing them along with his other staff.

Manager: Ahmed Akhtar

The owner would be running most of the operations with the help of a friend Ahmed

Akhar who would be the acting Manager of the company. Both the owner and the

manager would work together through the initial stages of setting up the outlet.

Hiring of the staff would be done on a mutual consensus wanting two helpers

preferably having some creative background. Ahmed Akhtar, possessing a creative

mind, one who finds inspirations in small things is an ideal person to manage the

operations of the gallery. He will take a full time role as an administrative manager,

from maintaining the books to taking care of the inventories.

Creative Designer: Ali Syed

An Indus Valley Graduate, who at the current moment is an architect, would be

helping in designing the layout of the outlet along with helping in interior décor of

the outlet. The Creative Designer is supposed to keep the shop updated at all the

times, keeping it changing with the current trends of the market. Also designing the

cards and assisting the packing service. The Creative Director would also be looking

after the gallery section when an exhibition is held.

Creative Designers

As for helping with every day operations, two assistants would be hired, one

maintaining the Gallery section while the other overlooking the other services;

taking care of card orders and the daily sales of chart papers and paper made

products. The following is the Job Description designed for the Assistants:

Designation

o Creative Directors/ Assistants

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Roles and Responsibilities

o Would be responsible for maintaining day to day operations of the

outlet.

o Taking care of the clients and fulfilling their orders.

o Looking after the gallery, keeping it up to date, changing décor from

time to time

o Helping in designing cards, paper products and packing processes

o Taking care of the accounts for every day transaction and orders

Qualifications

o Preferable art students (amateur artists) who have a knack fro

creativity

o Holding a bachelors degree, either in Fine Arts or should have done

(diploma) courses in Arts

Opportunities

Cradle would be providing an opportunity to the students looking for internships

during summers to combine their creativity with the management side of the

business by taking care of handling and maintaining records. Also they would benefit

by holding exhibitions in the Gallery for their own creations. Lectures from famous

artists would benefit them with their growth. Also the students would be given the

opportunity to go for courses through the sponsorship of Cradle to different

institutions in Islamabad for example Nomad. This in turn would be training them for

the future and would provide more creative ideas to Cradle for its growth too.

Supporting Staff (Sweeper and Guard)

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The basic job for the sweeper would be to keep the outlet clean at all times. A local

cleaning lady would be hired for this purpose. A guard from the company Gabor Knot

would be hired on a full day and night basis. The food, shelter would be provided by

Cradle.

SALARY PACKAGE

Designation Salary/ Compensation Package (monthly basis)

Manager Rs. 28000 Creative Director Rs. 30000Creative Designers Rs.10000 each

If they apply for courses under training, the Company would be taking care of the expenses

5% commission on every exhibition held if they bring in the clients

Sweeper Rs. 2000Guard Rs. 5000

Organizational Structure

Even though Cradle doesn’t function on any form of hierarchy, but for reference

purposes, the following is the organizational structure. The clerical staff comes under

the creative assistants but they are directly under the supervision of the

entrepreneur.

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TIMINGS

The working hours for Cradle are as follows:

Weekdays: 11:00 am to 8:00 pm

Fridays: 11:00 am to 8:00 pm, but would be closed for 2 hours for Prayers

Operations Plan

At first the outlet needs to be renovated to make it functional. As already

mentioned, the walls ate being painted and purchasing the furniture has started. The

quotations from different furniture shops were taken in order to determine which

ones were the best and most suitable for Cradle.

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QUOTATION FOR THE OUTLET

Description of Furniture Quantity

Furnishing Pavilion

Fine Furniture Wood Art

Unit Price

Total Price

Unit Price

Total Price

Unit Price

Total Price

Reception Counter

1 18000 18000 24000 24000 22000 22000

Revolving Chairs 2 6000 12000 8000 16000 7200 14400Office Table 1 14500 14500 14500 14500 14500 14500Card Shelf 4 14000 56000 18500 74000 17500 70000Couch (5 Seats) 1 15000 15000 12000 12000 12000 12000Centre Table 1 45000 45000 44000 44000 50000 46000Total 160500 184500 178900

The furniture would be acquired from Furnishing Pavilion as they are offering the

most compatible rates. The fittings and fixtures would be acquired from Hanman

Fittings on Murree Road Rawalpindi from where the spotlights would be purchased

costing Rs. 300 each for a set of three spotlights. 10 sets of spotlights would be

ordered costing Rs. 3000.

Two Split Conditioners would be ordered of the company Super National of one and

a half ton costing Rs. 23000 each.

The car used for transportation purposes is a City 99 model with a cost of Rs. 6 lakhs.

The car is owned by the entrepreneur and would be used for Cradle’s purposes,

following a 5% depreciation rate per year using the reducing net balance method.

DAY TO DAY ACTIVITY

The day to day activity in Cradle would start from inventory counting and finish with

taking another round of inventory checking. All the sales and the material used

would be recorded in the accounting ledger under different headings of sales of

cards and paper products and the other account for the material used in packing

service. The assistants would be maintaining those accounts which will be checked

by the manager.

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All the orders would be taken by any of the three; manager, or the assistants in

charge there. These orders will be discussed with the entrepreneur and the work

would be done by the collaboration of all four people involved in the operations.

The exhibitions would be handled by the entrepreneur with the assistance from the

manager and the assistants. The media, advertisements and refreshments would be

handled by them in the initial stages. Then with the business moving along, a

specialized staff would be hired to arrange the exhibitions.

Cradle would be working for establishing itself as a brand. It provides personalized

services due to which its prices would be higher than the normal outlets. The prices

offered at Cradle are as follows:

Products and Services Price Offered

Cards (normal) Rs. 25

Cards for special occasions that are fancy

with wordings

Rs.50

Hand made diaries (depending on size) Rs. 250-650

Notebooks Rs. 250-500

Photo Albums Rs. 250-1500

Photo Frames Rs. 250-800

Paper Mache Rs 350-1500

Gift Box Rs. 50-500

Jewellery Box Rs. 50-500

Packing Service (small gift item along

with box)

Rs. 100-250

Packing gift for weddings Rs. 1000-2500

Art Gallery (exhibition held for one day

on regular working hours including the

cost for advertisements, refreshments

Rs. 15000-25000

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and invitations)

Inventory Control

Cradle operations are based on strict inventory control system. In order to maintain

strict control and total quality maintenance, the Manager, Mr. Ahsan is responsible

for maintaining records of each inventory purchased, used and remaining left at the

end of each day. Thus maintaining a record of daily sales and being kept informed of

when to re-order. As the inventory includes office supplies, chart papers, other

accessories, each have to be kept in order as these are very intricate dealings that

tend to be of high maintenance such as paints, pastels.

Also inventory control is important in order to determine how many cards are made

out of one chart paper so as to keep a monthly check for forecasting before

reordering. Also the packing service requires a lot of little stuff, it should be noted

how much it is used so as to estimate its quantities used and by keeping that into

consideration, a price for the package would be determined.

The following table shows how the inventory would be counted at the closing time.

Item No. Description Quantity

Purchased

Quantity

Used

Quantity

Remaining

Total Amount

Consumed

00001 Chart Papers 12 rolls 6 rolls 6 rolls Rs. 60

00002 Papyrus Paper

00003 Glaze Paper

00004 Fabric Sheets

00005 Pastel Sheets

00006 Every Card

00007 Graph Sheets

00008 Crepe Paper

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00009 Kite Paper

00010 Corrugated

Paper

00011 Color Card

00019 Hand made

diaries

00020 Notebooks

00021 Photo Album

00022 Photo Frames

00023 Paper Mache

00024 Paper Boxes

00025 Jewellery Boxes

00012 Watercolor

Paints

00013 Glass Paints

00014 Fabric Paints

00015 Crayon sets

00016 Glitter Pens

00017 Pastels

00018 Ribbons

01000 Office Supplies

such as Pens,

Pencils,

Notebooks

02000

02000a

Cards (Normal

Fancy

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Financial Plan

The business would be financed by the owner and would be functioning on loan

from the bank. A 70:30 debt ratio is determined for the loan. The bank chosen for

such a purpose is NIB where the entrepreneur holds a fixed deposit account termed

for five years. On this a fixed rate of 10.5% is the profit given to the account holder.

1% would be the deferential pay point which adds up to an 11.5% markup paid on

that loan. The bank would be adjusting the loan itself by giving 10.5 % from the fixed

term deposit and 1% from the entrepreneur’s pocket.

As this loan is for an individual business the following documents have to be given:

1. Basic Borrowers Bank Sheet

2. Identity Card of the entrepreneur and two references

3. Reason to meet Working Capital Requirement

4. Balance Sheet for 6 months or a year

5. Income Statement

6. Cash Flow Statements

The payback period initiated by NIB is for 365 days whereas the markup is paid on a

quarterly basis.

The list of assets, liabilities and equity for the business is as follows:

Fixed Assets:

1. Furniture

Reception Counter Rs. 18,000 Revolving Chairs Rs. 12,000 Office Table Rs. 14,500 Card Shelf Rs. 56,000 Couch (5 Seats) Rs. 15,000 Centre Table Rs. 45,000 Total Rs. 160,500

2. Computer and Equipment Rs. 45,0003. Car Rs. 6,00,000

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4. Premises Rs. 1,866,000

Current Assets1. Cash Rs. 4,90,3502. Inventory Rs. 38,6303. Accounts Receivables -

Current Liabilities

1. Accounts Payable -

Long Term Loans

Loan from Bank (30%) Rs. 941019

Equity Rs. 2195711

PAYBACK PERIOD

Initial Investment: Rs. 3136730

Years Cash Flows (Rs.) Payback (Rs.)

2009 2497032 2497032

2010 1907903 4704935

2012 1316745 6021680

2013 723458 6745136

2014 127935 6873071

The payback period is 1 year and 3 months.

INTERNAL RATE OF RETURN

Years Cash

Flows

Discounted

Cash Flows

12%

Net Cash

Flows

Discounted

Cash Flows

Net Cash

Flows

2009 2497032 0.893 0.869

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2010 1907903 0.797 0.756

2011 1316745 0.711 0.657

2012 723458 0.635 0.571

2013 127935 0.567 0.497

Internal Rate of Return= lower rate+ (difference between two rates*NPV with lower)

Difference between 2 rates

= 12% + [23% (2081858)

1543051

= 12%+31%

IRR = 43%

NET PRESENT VALUE

INITIAL INVESTMENT: RS. 3136730

Years Cash Flows Discounted Cash Flows

43%

Net Cash Flows

2009 24970320.699 1745425

2010 19079030.489 932964.6

2011 13167450.314 413457.9

2012 7234580.239 172906.5

2013 1279350.167 21365.15

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CRADLE IN The Future

Cradle would be looking for opportunities to expand once it has established its

standings in the Islamabad market. The future as Cradle predicts is bright for such a

venture as people would be more acceptable and reciprocate to such an idea. The

following are some of the things Cradle would look into after three years of

operations:

Start its membership for the Gallery as it would have established some key

and regular customers

Keep a record of all their customers’ data that have been regular so as to

make cards for them before any special occasions such as keeping track of

their birthdays. This would personalize the service and show that Cradle cares

for its customers more

Expand the outlet and go into F-11 area which is an upcoming market

segment

Expand the paper products providing more customized products for the

customers

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eps analayis assignment

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