Auto Fresh Company

8/2/2019 Auto Fresh Company

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AUTO FRESH COMPANY

Muhammad Awais

Hamza Raheel

Auto Fresh Company. Barkat Market Near HBL

Kalma Chowk Road. Lahore

111-888-246


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Take the feeling of easy freshness

Auto Fresh Company

Subject: Entrepreneurship

Submitted to: Kashif-u-Din


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Submitted By:

Muhammad Awais BA01083-037

Hammad Ahmed BA010830-61

Hamza Raheel BA010830-81

Hafiz Talha Akhtar BA010830-86

Ali Anwar BA010830-71


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Table of Contents

1 Executive Summary 32 History 43 Marketing Plan 9

Industry Description and Outlook 9

Competition 11

Location Analysis 12

Price Determination 13

Market Approach 13

4 Management Plan and Operational Plan 145 Management Team 14

Operation Controls 17

6 Financial Plan 18Financial Analysis 22

Balance Sheet 25

Income Statement 27

7 Strategic Plan 28


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Executive Summary

Business Opportunity with an Innovative Product

Paste Toothbrush is the next step in toothbrush sector health field. Its innovative concept is the

best solution that provides the most effective and healthy cleaning. In the following years, we

believe that this new concept will replace the current toothbrushes and cover the market

shelves.

Considering the overall market size of current toothbrushes, our product has a huge business

opportunity. Being protected by a patent, we will be only player in this emerging market.

Even if we could not obtain a patent, being the first initiative, this business idea still embodies

an important business opportunity.

We will introduce toothbrush which will refillable with the paste. It is especially design for

people away from home but still everyone can use it. It will good image on buyers in term of

quality too and also because of no substitute. It total manufacturing cost is 25 and retail price

will 50 with paste. If we grow at the rate of 15% then the net sales will be 9307531.8 R.S. at the

end of two years. Through it buyers no need to carry paste with it they put paste at the back of

container and can easily carry it is specially made for people away from home. As, we are the

only company to introduce this type of product which make us unique from our competitors.

Also its low cost makes us different form competitors.


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History:

Product Idea

The best and the suggested way of cleaning your teeth:

Teeth care and health are one of the important parts of our health. People all around the world

become more aware of teeth care and as a result tooth brush industry is getting bigger by the

time. From there we decided to make unique toothbrush

The idea in the simplest form:

Paste toothbrush is toothbrush which contains paste in the brush and can be used easily. The

brush can be refill and allow adults and children use different size of brushes.


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Vision

Auto fresh company is vision to expand the business throughout the Pakistan, become a well

company in next five years and build a strong customer relationship.

Mission

Company mission is to expand the business in Punjab and create strong brand image in

customer mind


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Product Description:

(Paste will come out

From this hole) (Refillable Place for paste) (Rotator which twists)

Auto Fresh is the newest innovation in portable dental care. Capable of easily refilling from the

screw-opening at the middle, the toothbrush can hold up to 20 to 30 brushings. Simply push

wind the bottom cap and up comes the toothpaste through a channel and out through the soft

bristles.

Features:

Use your favorite toothpaste and save on costly travel sizes. Refillable so you can place your own favorite toothpaste brand within. Soft bristles in a quality toothbrush. Plastic.


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Marketing Plan:

A. Industry Description and Outlook

Toothbrush industry is one of the broadest sectors whose market consists of the entire world.No matter how different the cultures of different countries or which race they belong to,

toothbrushes have customers all around the world.

Therefore, if we want to give a number for the size of targeted customers of toothbrush

industry, we say the size of around 6 billion people which is the population of the World.

However, it is very difficult to operate so much globally even for the most advanced companies.

So we will start our business to just restrict to Pakistan (Punjab) with some of big cities like

Lahore Islamabad Multan Faisalabad

Primary Industry:

Auto fresh company has 2 year manufacture contract with Bruce lee trader (Gorey Brand)

International. Bruce lee trader (Gorey Brand) International is reputed name in the field of

toothbrush, Toothpastes and Personal care Products. Company are operating from Pakistan,

and have regional offices all major cities in Pakistan also company have regional international

offices, in Singapore, Malaysia, Philippine and UK.( A-1/40 Awami Colony Kornagi Industrial

Area) After 2 years Auto Fresh company make own production plant and produce themselves.

Size of the Industry:

No of employees of Auto fresh company are 25, 16 employees of different department, 3 office

boy. The total investment is round about 2954772. Target market of company is lower middle

or above.


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Total expected market volume:

We will try to target 35% of the population of the cities mentioned above. While our expected

sales volume at the end second year will be 9307531.8 R.S.

Growth potential:

In five year company potential to expand network throughout in Pakistan. Company will make

the warehouse and office all the major cities in Pakistan and build a strong supply chain

management and distribution network and make strong relationship with customer.

Characteristics and Trends of the industry:

Productive service satisfaction

Company first time lunch toothpaste and brush combine with premium price and high quality

our product definitely satisfy the customer need customer will not buy toothbrush and paste

separately because it expense. It should also benefit for tourist persons and solider. The most

important thing after shape its refillable consumer does not have to buy a whole new product

consumer can refill it.

Industrys life cycle:

Our product life cycle is one year after success the air fresh product we lunch for kids who is

below 12yr and modify the current product in form of feature taste, design, and color etc

Future potential:

In future potential company tries to expand the awareness throughout the Pakistan and also

sell. After two company setup own plant and produce themselves and make long term

relationship with customers. Introduce toothbrush and paste for kids and modify the current

product in form of feature taste, design, and color etc


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Target Market:

Since our product is use by everyone so there is no age limit in using the product nor in term

sex. However, our target market in term of income level will be minimum lower middle

income people or above. There will be no educational barrier as everyone can easily use this

product. However our product will also specially target Travelers. Buying that product will be

very helpful for them. Our target market will also be the small children who find it difficult to

put paste on toothbrush. While there is no buying habit involve in it as this product came in

regular use. Our all we will target whole population belong to lower middle income or above

because this can also be use at home.

B. Competition:

Product quality and innovation, brand recognition, marketing capability and acceptance of new

product largely determine success in the Companys business segments. Product quality is very

important to differentiate their products from other competitors. Our main competitors are:

Colgate Shield Oral Toothbrush

All the above competitors are successful, because they have built strong brand image after a lot

of struggle. They are able to do this because of following reasons:

Strong marketing campaign Financially Strong Strong Brand Image, because of multinational tag Strong R & D department Strong strategic policies Proper monitoring system


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As such, there is no substitute available in the market for auto fresh tooth brush, but we can

call above three companies over indirect competitors. While, there are number of things which

separated us from our competitors.

No substitute available in the market Specially design for people away from home You dont have to carry paste separately Its unique design also separated product from the competitors

There are number of reasons, why people should by this reason:

Cost affective Easy to carry Refillable with paste Comfortable Reliable Long lasting

C. Location Analysis:

Our company will be operated from a head office in Lahore (Barkat Market). To control and

manage the business in other cities easily, we plan to establish another small office in Multan in

future which only includes sales and marketing employees.Main area of the Lahore and everyone is

aware of this place. Customer can easily approach us at barket market. Company can easily control all

distribution networks in Lahore. It is also almost at center of the Lahore.

At neighbor business HBL bank is located. Building have need little bit maintenance butnot that much it will cost about 3000 to 4000. Customer can easily access their as it is

well known place while parking is also not a big issue.


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D. Price Determination:

Pricing

As stated in product idea section, our product consists of two parts; a body part with paste, and a brush

part. Different pricing strategies can be applied for those different parts of the product. In the following

paragraphs, we introduce different concerns and our proposed strategy.

We assume the average lifetime of the toothbrushes is to be few months, say 5 months. That means a

customer will buy our product twice in a year. Container at the back of the brush will have capacity to

store paste of 15 to 17 days.

As, our brush has manufacturing cost of 25 rupees. So, we have decided that our brush total price will be

Rs. 50, as the 20g toothpaste will also be included in it. At the other, if a customer buy only toothbrush

of other company with 20g paste separately, total cost will be 70 to 80 rupees.

While, if we compare our price with the competitors, it is clear that our target is pretty much

achievable. As, the price is pretty much low. So, it will put good image as it is affordable attractive.

E. Marketing Approach:

We have a new type of product and people are not aware of it. Putting it on shelves doesn't sell

it since people don't know about it, they must hear about our product first.

TV advertisements are the most effective but expensive advertisement way however it will

definitely compensate its cost.

The pricing of TV commercials changes very much depending on the time, the length and

popularity of the channel. To get the best value of advertisement, careful research must be

done to select the advertisement strategy.

Instead of expensive prime time commercials, we think that the morning period is more

efficient for our product. Firstly, commercials in morning time are cheaper than the evening.

Secondly, morning programmers are watched by women, especially by housewives who usually

decide what to buy and shop for home. Women are also careful to their health than men.

Therefore, showing the advertisements in morning will be cheaper and more effective.


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In addition to the digital advertisements, promotions in shopping malls will also bring us a quick

entrance to the market. Selling with very small revenue for the first month can help us to make

use of word-of-mouth. People buying our product for the first time, will definitely tell their

friends about it since it is new in the market.

Management Plan or Operational Plan:

Organization:

A. Management Team:

The Management team will be comprises of six people with shared mission, goals, vision and

mile stones. Members of the management team will come from different backgrounds and

possess multiple skills. The management team will be young, motivated, energetic, and

focused. The management Team has been working together for last few years and team

members have excellent understanding and knows each other strengths. The company will

have a CEO and four executive heads of different departments, CEO will also be head of one of

the department.

Owner

CEO

Distributio

MarketingFinance HRM Accounts R & D


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Hammad Ahmed: CEO & Head of Finance

PROFILE: Mr. Hammad Ahmed will be CEO and executive head of finance department. He has

done master in Finance. The courses in the degree are management courses including

accounting and economics. After completing the graduation he will work as CEO of the

company.

Hafiz Talha Akhter: Head of Marketing and Advertisement Department

Profile: Mr. Hafiz Talha Akhter has done Marketing. He has been working on several research

projects both in industry and study projects. In Bachelor he has been worked on CRM

application a customer focused Business strategy designed to optimize revenue, profitability

and customer loyalty as a final project. While currently he is doing job in Brain Tel. He will be

the head of marketing department of Auto Fresh Company.

Hamza Raheel: Human Resource Management Department

Profile: Mr. Hamza Raheel will be the head of Human Resource Department. He has done

master in Human Resource Management Department. In the past, he has participated in a

number of project research and development, and accumulated a rich experience; he has the

ability to lead the Research & Development of project. He will deal withal the issues like hiring,

training, then motivating the employs etc and he will be nominated head of the Human

Resource Management Department. While he will also be responsible to pass company policies

to he employs.

M. Awais: Distribution Department

Profile: Mr. Awais will be the head of Distribution Department. Currently he has done master in

Finance but still he will work in Distribution department.


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Haseeb Ahmed: Head of Research & Development Department

Profile: Mr. Haseeb will be the head of Research & Development. He has degree of computer

science and technology from PU. He has the ability to lead the Research & Development of

project and he will be nominated head of the Research and development department.

Ali Anwer: Accounts Department

Profile: Ali will be the head of Accounts Department while has worked in accounts department

for few years.. He will deal with the salaries and benefit issues.

Legal status:

PartnershipAuto fresh company will form partnership to establish themselves in the market. In our

business, there will two owners namely Muhammad Awais (Land lord) and Hamza Raheel

(already running small business). These two will invest 5 million each in the business. While,

there will be three share holder (investors namely Hammad Ahmed, Hafiz Talha Akhtar and

Haseeb Ahmed) who will invest 3 million collectively. Remaining, 2.5 million will be taken as

loan from the bank by showing our asset (land worth 1.5 million and 1 million each). 30%

profit will be taken by M. Awais while 20% profit will be taken by Hamza Raheel. Remaining

50% profit will be divided equally between 4 heads of department.

Business System:

The company will focus on building flexible and innovative toothbrushes. The first design and

model to work on will be an Auto Fresh toothbrush. The mission of the company is to provide

customers a complete protection and a product which is smart, light weight, flexible and much

economical. The company will operate its services from a central head office, which will be

setup in Lahore. The company head office will be comprised of six major departments which all

should be integrated and interlinked closely to work as a single unit. The head office will be

responsible for organizing, controlling and managing all the internal and external organizational

functions and business activities including manufacturing of the product and launching it. The


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Business system will be designed to run following activities through the life cycle of the

product, the figure shows the business model of our company.

The company will set up policies in order to eliminate the time wastage, making process more

effective and efficient, improve productivity, sales and will continuously work on improving the

market campaigns by effective means. The business will adapt a sustainable business model

which will organize and manage all organs of the company as single unit.

B. Operational Controls:

Control and Monitoring:

R&D department will within insure that the entire above key factor are being achieved by the

company along with this marketing department will also help R&D to achieved above factor.

Marketing department will manage a monitoring team which will check the performance

periodically. We will arrange a general body meeting by inviting different departments like

Marketing, Finance, R &D managers in which we will see that have they achieved their desired

target. And we will also try to figure out our mistakes. The monitoring team will also check that

is the plan working or not if not then what should be done. There could be two possibilities,

first one that the firm may switch to plan B or may they update their plan.

Research

and

develop

Industrial

Design

Company

Manufact

uring

company

Raw material

approval

from R&D

Marketin

g

Departme

Distribut

ors

Services


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Financial Plan:

A. Current Funding Requirement:

Auto fresh company will form partnership to establish themselves in the market. In our

business, there will two owners namely Muhammad Awais (Land lord) and Hamza Raheel

(already running small business). These two will invest 5 million each in the business. While,

there will be three share holder (investors namely Hammad Ahmed, Hafiz Talha Akhtar and

Haseeb Ahmed) who will invest 3 million collectively. Remaining, 2.5 million will be taken as

loan from the bank by showing our asset (land worth 1.5 million and 1 million each). 30%

profit will be taken by M. Awais while 20% profit will be taken by Hamza Raheel. Remaining

50% profit will be divided equally between 4 heads of department.

Positions to be filled:

The head office of the company will be set up in Lahore. The company Head office will be

comprised of six major departments; every department will have an executive heads and will

posses many skilled professional from their fields. The salaries to hired professional will be

given according to their professional and technical skills and experiences. The job postings will

be announced and interested personal will be interviewed by CEO and all executive heads of

the departments.

Finance Department:CEO of the company will be the head of finance department. The department will hire

two financial professionals with good experience and highly qualified skills and

professional background in accounts and auditing. Department responsibilities include

keeping all financial records including budgets, salaries, investments, profit, loss, and

income, tax, auditing and managing all of them in an organized fashion.

Marketing and Advertisement Department:The department will be responsible for setting up the marketing strategy for the

product, implementation and proper commercialization of the product in the market


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through various means. The department will have an executive head who will set up the

marketing and advertisement policies. Two professionals will be hired for the marketing

purpose and media controllers for controlling advertisement and promotion of the

product.

Human Resource Management Department :The department will be supervised by executive head and will hire three professionals in

order to hire employs, give them training, deal with the issues of employ and

transferring the policies of the company to the employs. During the hiring and

recruitment process all head of departments will also involve.

Distribution Department:This department will again be run by the head and 5 people will be hire for Distribution

department 5 people will work distributor for department while. Distribution policies

will be set up by the Production Department.

Research & Development Department:The department in start will have a contract with industrial design company for the

initial designs of the Auto Fresh toothbrush. The department will also be responsible for

setting up an R&D LAB and infrastructure inside the company, building and developing

innovative and advanced designs and models and also works on the feasibility study of

the product, the department will be controlled by Executive head and further more

department will hire two professional personal for R&D activities throughout the

product life-cycle.The department will also be responsible for the coordination between industrial design

company and the production department throughout the life cycle of the toothbrush.


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Accounts Department:This department will hire two more people who will deal with employs salaries and will

also their benefits like fridge benefits.

Name of Department Number of people Hired Offered and Proposed

Salary per month

1 Finance Department 2 will be decided according

to professional skills and

experience

2 Marketing Department 2 will be decided accordingto professional skills and

experience

3 Human Resource

Department

3 will be decided according


experience

4

5

6

Distribution Department

Research and development

department

Accounts Department

5

2

2

will be decided according


experience



experience



experience


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Growth Estimation

Initial few years are crucial for newly established companies. Many companies go bankruptcy

because of bad planning in their early lifetimes. In order to be sure about success of our new

business, we will pay much attention to our first two years. We intend to make a reasonablegrowth for first two years that is to reach 10% of toothbrush market of previously mentioned

cities. Considering the confidence that our patent provides us, 10% is not much optimistic.

Following figure shows our quarter based expectation for first two years and will guide the

management team that where they should be after every quarter.

.

According to our estimates and plans, we aim to take over 10% of overall market after two

years in the listed cities.

0

1

2

3

4

5

6

7

8

9

10

Year 1 Year 2

Quarter 1

Quarter 2

Quarter 3

Quarter 4


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Financial Analysis:

Cost & Income Analysis:

Toothbrush project is a global project and requires huge amount of money for the first year but

we are operating in only major cities of Pakistan so this will reduce our budget. In starting year

we might face loss but after one year, it will get a positive cash flow and after two years, it will

generate profit.

In this section, we breakdown the significant costs and make an analysis of investment versus

revenue.

The most important cost items are;

Research & development cost (including design) Advertisement cost Production cost Operating cost

Among those, research & development cost is fixed and cannot be reduced too much.

However, advertisement and production costs are flexible and can be modified according to the

invested capital. Before we continue with our detailed cost analysis, we want to present the

expected trends in different cost items first.


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As seen from the graphics, research development and advertisement costs are expected to be

declined in second year as our product design is finished and the customers become aware of

our product. However production cost we remain same while operational cost will increase.

Research & Development:

We have a research & development team of 3 people. However the task of this team is not the

initial design and development. We plan to buy support from an industrial company for the

initial design. The cost for this item only includes price of the design support. The salary of the

employees is included in operational cost.

Advertisement:

How much amount we can spend on advertisement very much depends on the invested money

we have. However, different levels of advertisement have different effects. The optimal

advertisement level must provide awareness for 60% of targeted customers. We think that one

month of TV advertisements and longer ongoing Internet advertisements will provide the

desired awareness. Although, the price for TV commercials differs too much, we assumed the

cost of one TV channel for one month as to be 34000.


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Production

The manufacturing of Auto Fresh toothbrush will be 23 per unit. So if we produce 1000 brushes

per month then the total manufacturing cost will be 23000.

Operation

We plan to hire 16 employees. Assuming the average salary of one employee to be 4683, total

employee cost will be 15000 quarterly for hired employees. Manufacturing plant will require

150000 which will be building after 2 years. Distribution cost is based on the product amount.


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In the following table, we present total expected cost for the mentioned items.

Year

1

Year

1

Year

1

Year1 T.C

for

Year

1

Year

2

Year

2

Year

2

Year2 T.C

for

Year

2

T.C

for

two

years

Quar

ter 1

Quar

ter 2

Quar

ter 3

Quarte

r 4

Quar

ter 1

Quar

ter 2

Quar

ter 3

Quarte

r 4

R&D

Departm

ent

Designin

g and

Develop

ment

cost

5000

00

5000

0

1000

00

1000

00

Advertis

ement

TV

advertise

ment

1000

00

1000

00

5000

0

50000 3000

00

5000

0

5000

0

2500

0

25000 1500

00

3570

00

Producti

on

Manufac

turing

cost

3450

0

6900

0

1035

00

6900

0

6900

0

6900

0

69000 2760

00

3795

00

Operatio

nal


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Salaries 2247

84

2247

84

2247

84

22478

4

8991

36

2247

84

2247

84

2247

84

22478

4

8991

36

1798

272

Manufac

turingplant

and

office

0 0 0 0 0 0 0 0 0 0 0

Distributi

on cost

4000

0

4000

0

4000

0

40000 1600

00

4000

0

4000

0

4000

0

40000 1600

00

3200

00

Totals 1020

000

6715

00

1365

00

15750

0

9600

00

1575

00

1575

00

15750

0Total

cumul

ative

cost

for 1

year

1562

636

Total

cumul

ative

cost

for

2nd

year

1485

136

Total

cumul

ative

2954

772

R.S

Total expected cost for two years, as seen from the table, is 2954772 R.S


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Estimated Per Year Profit:

If we get 15% profit per month then we expected to earn estimated 2109558 Rs. at the end of

1st

year and 2nd

year profit will be 2673244.8 Rs.

Profit Loss Statement:

If we get 15% profit per month then we expected to earn estimated 2954772 Rs. at the end of

2nd

year.

Revenue

Total Income 9307531.8

_______________________________________________________________________

Costs

Research & development 100000

Advertisement 357000

Production 379500

Operational 2118272

_______________________________________________________________________

Total Cost 2954772

_________________________________________________________________________

Net Income (Profit) 6352759.8 Rs.

The salaries of heads of departments will be given from profit we earn according the contract

we will sign when we start our business.


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Production capacity:

Company order to bruce company to produce 1000 units per month and deliver the main area

of the Lahore, Faislabad and Multan like retail store metro etc

Operating advantage

Auto fresh company do not produce themselves they give the two year production contract to

the other company which have also manufacturing plant, raw material and other resources

which help in production process .The advantage of auto fresh company to overcome the plant

cost, production cost which is maintains of machinery and labor cost. Furthermore the land

expenses and electricity charges do not bear the auto fresh company.

Success indicators:

Highly skilled and experienced employees Cost effective Product Differentiation Refillable with paste

Strategic Plan

SWOT ANALYSIS:

Strengths

First mover Flexibility product Attracting for investors Refillable with paste Cost effective Product Differentiation

Weaknesses


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Low brand image Lack of resources Lack of awareness to customers

Opportunities

Joint venture Growing global market of Toothbrush Capture more investors because of product uniqueness.

Threats

Political Instability Increasing number of Competitors Chances of failure Many follower exist in market Economic Instability

Strategies:

Strategic AllianceAs, we are the first mover and no other substitute available in the market so strategic

alliance will be easy for us or joint venture. We will also become financially strong too

and brand image will also build and with it we will be able to fulfill our resources.

Investor can also be attract easily then.

Intellectual Property RightWe will patent our idea to avoid from market follower.


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Low cost StrategyDue to economical instability, buying power of customers can reduce. For this purpose

we make refillable brush so that customer can afford it also we can reduce

advertisement cost to reduce its cost.

Documents

Auto Fresh Company