Distribution Agency

Table of Contents

EXECUTIVE SUMMARY BRIEF DESCRIPTION OF PROJECT CRITICAL FACTORS INSTALLED AND OPERATIONAL CAPACITIES GEOGRAPHICAL POTENTIAL FOR INVESTMENT POTENTIAL TARGET MARKETS DISTRIBUTION PROCESS FLOW PROJECT COST SUMMARY Useful Project Management Tips

EXECUTIVE SUMMARY

Located at any densely populated city Fast Moving Consumer Goods (FMCG) Undertaken in all small 2nd tier towns 06 tonnes each of tea and powdered milk and 08 tonnes

each of biscuits and chocolate / toffees etc per month to the retailers.

capacity to distribute around 50 tonnes of product and initially they will be utilizing 56% of proposed capacity

Total Cost Estimate of the project is Rs. 1.249 million

EXECUTIVE SUMMARY

considerations or factors for success of the project are :

1.Product and Brands to be distributed

2. Negotiation and Marketing Skills

3. Credit Recovery

BRIEF DESCRIPTION OF PROJECT

Product Location Target Market Employment Generation

CRITICAL FACTORS

Products and Brand Background Experience Marketing Skill Strong Sub-distributor Skilled & Experienced Manpower

INSTALLED AND OPERATIONAL CAPACITIES

Total 05 persons will be justifying their job description . New brands and two of confectionery products . Potential and anticipated expansion Products are perishable, efficient distribution operations

would be necessary. Warehouse for more than 03 days

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Consumerism and increase in population Influx of rural population into urban Business can also be done in all small second tier towns Suburban towns

POTENTIAL TARGET MARKETS

Domestic market of above 185 million consumers Urbanization have led to demand of distribution agencies Consumerism and fuelled demand Target market for the proposed set-up is retail stores in

densely populated cities

DISTRIBUTION PROCESS FLOW

Companies evaluate following capabilities of the interested distributors :

Location of distributor’s business premises.

• Financial position and credit standing of the distributor.

• Knowledge and experience of the distributor.

• Storage and showroom facilities of the distributor.

• Ability of the distributor to secure adequate business and to cover the market.

• Capacity of the distributor to provide after sale service.

• General reputation of the distributor and his sales force.

• Willingness of the distributor to handle the entrepreneur’s products.

• Degree of co-operation and promotion service he is willing to provide.

PROJECT COST SUMMARY

Analyze the commercial viability of Distribution Agency Various cost and revenue related assumptions along with

results of the analysis Income Statement, Cash Flow Statement and Balance Sheet

Project Economics

Financial model have been calculated for distribution of 28 Tons / Month of Packed

Monthly Sales of these items based on certain assumptions such as Distributor’s price and quantity of sales are calculated to be Rs. 8.32 million.

Profitability are highly dependent on effective management of logistics, general reputation of distributor and its sales force.

Project Financing

Total Equity (10%)…………Rs.124,900

Bank Loan (90%) …………Rs.1,124,10

Total Project Cost………. 1,249,000

Space Requirement :

Space required for Distribution Agency is 2,000 Sq. ft. where 200 Sq. ft. will be used for Management Office and 1,800 Sq. ft. will be used as Godown.

Human Resource Requirement

Revenue Generation

The revenues are based on assumption of monthly Sale Proceeds of Rs. 8.32 Million of Branded Tea, Powdered Milk, Biscuits and Confectionary items with an annual sales volume growth rate of 5% and price growth rate of 7%. On an average distribution margin is 2% of total sale proceeds.

CONTACT DETAILS OF CONSULTANS / EXPERTS

Following are a few significant distributors with sub-distribution options:

• Universal Distributors Limited (UDL), www.universaldistribution.org/

• International Brands Limited (IBL), www.iblgrp.com/ • Burque Corporation, Premier Distributor,

www.burque.com.pk/ • Muller & Phipps (M & P), www.mulphico.pk/

Useful Project Management Tips

1.1 Technology • List of Machinery & Equipment • Computer & UPS • Printer • Fax & Telephone • UPS & Battery • Furniture • Energy Requirement: Should not be overlooked and alternate source of energy for critical operations be arranged in advance

1.2 Marketing

• Sales & Distribution Network: Expert's advice and distribution agreements are required with distributors & retailers. • Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be allowed to compromise on quality. Price during introductory phase may be lower and used as a promotional tool. Service cost estimates should be carefully documented before price setting. Government controlled prices should be displayed, where applicable.

1.3 Human Resources • List of Human Resource

• Owner

• Sales Staff / Outdoor Booking

• Manager Accounts & Store

• Driver / Loader

• Security Guard

• Adequacy & Competencies: Recruitment of skilled and experienced staff should be considered an investment.

• Performance Based Remuneration: Attempt to manage human resource cost should be focused through performance measurement and performance based compensation.

Training & Skill Development