Business Plan

Entrepreneurship

Submitted To

Sir.Fakhr-e-AlamSubmitted by: Adnan Rais Khan [32]

Moiz Mustufa [32]

Muhmmad Aizaz Ullah Khan [32]

Muhmmad Ali [32]

Khizer Bin Saad [32]

Class: BS – VI Morning

Date of Submission: 15th October 2014

Acknowledgment

ALL praise to Almighty ALLAH, our creator who bestowed on us the meaning of life, and helped us in all possible ways and gave us strength to complete this report in the given allotment of time. We would like to dedicate this report to our parents with greatest gratitude whose love and prayers have always been a source of strength for us.

We would like to take this opportunity and convey our sincere gratitude towards our mentor and coach instructor Sir.Fakhr-e-Alam for his effort to give his proper guidance and advice throughout the duration of our business plan.

Ultimately, special thanks to our group members for their full co-operation and sacrifice their time to implement the job. We feel grateful that with their spirit of co-operation and dedication our project can be completed within this period.

Nevertheless, we are deeply indebted to our seniors for their encouragement, lending hands and support which produces more efforts to finish our report successfully without any delay during the progress of the project.

Furthermore, we are most impressed with their attitude of willingness to share their own ideas and experiences at any time. This made us gain a lot of knowledge from this course and it had deeply enhanced our understanding about Entrepreneurship and gave us more exposure to the real world of business.

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Executive Summary

Multiline Textilien, established as a partnership, is a clothing and apparel business with Head office located in Zam-Zama Commercial area, Karachi, Pakistan and second principal office located in Schillerstraße, Frankfurt, Germany. The company sells home apparel, such as casual and towel, bed sheets, comforter, pillow cover, cover lets, mattress cover, bathrobe in Germany.

Multiline Textilien has recently started its operations in Frankfurt, Germany. The company is dedicated to providing the highest quality workmanship, meeting the agreed delivery dates, and executing the custom work exactly in accordance with the market requirements. The focus of this business plan is to identify its future target clients, explain its marketing strategy, and to improve its internal procedures so it can substantially increase profitability.

The Company

Multiline Textilien is registered in Karachi, Pakistan. The major share of the company's production comprises of home apparel textile. The total market for home apparel, which the company target is approximately $350,000 for its first fiscal year. The company is a partnership and started its operations in 12th October, 2013. The founding members of this firm are; Adnan Rais Khan, Khizer Bin Saad, Muhammad Aizaz Ullah Khan, Muhammad Ali and Moiz Mustafa.

The Products

Multiline Textilien provides intermediary services in the distribution of high quality towel, bed sheets, comforter, pillow cover, cover lets, mattress cover, bathrobe, etc. The firm could be considered as a main exporter of drapery in Germany.

The Market

The population residing in close proximity to Multiline Textilien distribution office in Frankfurt is estimated at 691,518. Roughly, this would mean that this area comprises a total home apparel market in excess of $3.2 million annually. The firm expectation to grab share of this nearby market is approximately 10% by its first fiscal year.

The company is in the process of exploring potential clients and opportunities in the German market. Firm’s current market strategies will improve profitability levels since the Multiline’s products hold.

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Prospective Financial Summary

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Business Description

Company Location and Facility

Multiline textilien is a service oriented textile exporter in Europe. With the office located in main Zam Zama Lane 4 near ZamZama Park with one of our office is located in Germany in Frankfurt. Our Ware house for holding Stocks is in Korangi, Karachi. We are offering competitive prices with high quality home apparels. Our main objective is to export high quality textiles of all kind at a price that is globally competitive while remaining responsible corporate citizen globally and socially responsible. We provide e-booking facility. We cover all phases of apparels buying and distribution and are full vertically integrated, covering each stage of our supply chain from buying of textiles and other home apparels to sell to the end consumers-from the warehouse, all the way to European buyers.

Our business is equally divided in 5 partners, and being led by different departmental heads.

Product and Service Description

Our business offers the following products.

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Bed sheet

Jersey: We offer best quality jersey bed sheet which are in demand in European market

Cotton: We provide cotton bed sheet from well renowned manufacturer in Pakistan.

Mattress Covers

Coverlets

Comforter

Cotton comforter: We offer best quality comforter from best manufacturer in Pakistan

Synthetic: We are the major exporter of synthetic made comforter from Pakistan

Pillow Cover

Cotton: We buy top quality cotton covers from different suppliers of Asia.

Decorative Pillow: Several different decorative pillow covers of European designs are offered to our customers.

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Towels

Turkish Cotton Towel: Growing exclusively among Turkish community in Germany, it is a premium cotton featuring an extra-long staple. This long staple crates a towel with a high level of comfort, absorbency and durability.

Microcotton: A trademark for a high-quality, long-staple cotton fiber developed in Pakistan. Its soft and plush fibers create a fluffy towel with a suede- like texture and excellent absorbency.

Pima (or trademarked Supima) cotton often grown in the warm, dry climate of the United States. Pima cotton is knon for its rich, Extra-king staple fibers prized for their strength and absorbency. Pima is considered to be a superior blend of cotton.

Bath Robes

Hooded Bath Robes: extra-large hood for the ultimate in warmth double belt loops for adjustable belt height generous pockets hanger loop for easy storage

Knit Waffle Bathrobe 45% feather-soft modal fibers double belt loops for adjustable belt height generous pockets hanger loop for easy storage self-color piping around cuffs and front cozy roll-up collar and cuffs (shawl collar only)

Industry Background

Textile industry means which produces all types of fabrics, yarns, combs, boffins etc.. it also includes all ready made garments, blankets (woollen / acrylic). Pakistan is leading country of cotton and wollen fabrics, and cotton durries. The textile industry is one of the most important sectors of Pakistan.

It contributes significantly to the country’s GDP, exports as well as employment. It is, in fact, the backbone of the Pakistani economy.To start a textile business a huge amount is required and it is around 1 - 2.5 crores of rupees.After the issue of capital is settled second comes the problem of land and machines. When we select a location for our business we need to have certain things in our mind like the location should be best suited to the business and environment.

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Then we have to register that location so that we will not be facing any problem regarding its ownership and authorization. After we have settled all the above issues we have to decide the channels from where would we importfinished products and through which we would distribute finished goods.

We are importing raw materials for the woolen, acrylic blankets , knitted garments from different textile manufacturers of Pakistan and Bangladesh and The raw cotton from south Africa. As presently they are the largest producers in there respective field.

The govt of Pakistan is also helping us to establish our business by giving us incentives by way of establishing special economic zones where we can establish our own unit. Under special economic zone the rate of land is very concessional on monthly basis. Our Most of the inferior unit is situated at Karachi.

So in my opinion the textile industry is the best sector which provides jobs to unskilled labores and profits to the owner of the unit.

To set up a business we have to apply to the commerce ministry for license, the application will be made on the payment of fees prescribed by the government of Pakistan.

Goals and Potentials of the Business

OUR GOAL:

The Goal of Multiline Textilien is to provide fine home apparels in a European Market. And to have a bountiful, successful company that is a leader in customer service and that has a loyal customer following.

Multiline Textlinen' management recognizes that the company must establish concrete goals that assist management in determining whether or not the company is achieving corporate objectives. Chance of implementing those goals depends upon management's ability to track progress toward goals and to measure results in conjunction with those goals. To ensure implementation of the company's goals, management has established the following corporate objectives:

BUSINESS OBJECTIVES

To change the existing trends related to home Apparels exports. To primarily focus over the customer satisfaction. to provide quality products plus customer satisfaction to our clients. To offer superior, fast and friendly delivery to customers. To become established as a leading textile exporter at all times.

FINANCIAL OBJECTIVES

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Securing start-up funding and subsequent funding through a combination of investment and debt strategies.

Establishing marketing and sales initiatives to expand the company's clothing line and capture 10% of the branded Home apparel industry.

Based upon market growth projections, generating very healthy sales revenues in Years 1, 2 and 3.

Reinvesting corporate profits for market share growth in the international apparelIndustry.

MARKETING OBJECTIVES

To maintain strong marketing efforts through advertising and sales promotion. Build the client database by 15% each year. Increase the efficiency of the marketing campaign by 5% each quarter. Generate a 30% increase in click-through traffic for the website. Create brand recognition.

Vision & Mission Statement

Mission

The mission of multi-line textitien is to introduce new home apparels into Germany, Switzerland and Austria. Multi-line Textilein is devoted to achieve consistent improvement in the system of providing products & services to the customers through On Time Delivery & Enhancing Customers Satisfaction by means of Quality and Value."

Vision

To reconstruct the textile industry of Pakistan and gain a reputable market share in textile industry of European market. Our stringent commitment to Global standards of Quality should be seen us grow gradually, to create a niche of our own, in the highly competitive world markets.

"To attain market leadership through unmatched quality, a diverse and unique product mix, world-class systems, and the highest ethical and professional standards."

Uniqueness of Products and Service

Multi-line textilien products arrangement will be original work of art. The company is committed to making each arrangement unique and custom based on each customer's needs. All sample arrangements in the store will be available for purchase. We will select and offer distinctive

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vases for the discretionary buyer or for a special occasion, as well as affordable options for routine purchases.Multi-line textilien provide quality products and serves with close relation with suppliers, designing skills, provides a range of premium, exclusive and unique textile services to the clients.

Contribution to Exporters

According to recent figures, the Pakistan textile industry contributes more than 60% to the country’s total exports, which amounts to around 5.2 billion US dollars. The industry contributes around 46% to the total output produced in the country. 

In Asia, Pakistan is the 8th largest exporter of textile products. Contribution to GDP and Employment The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of the work force in the country, which amounts to a figure of 15 million. However, the proportion of skilled labor is very less as compared to that of unskilled labor. 

Customer profile:

The following are groups or segments of potential customers:

Corporate business Textile houses Departmental stores. Branded stores

SWOT Analysis:

Multiline textilien is uniquely positioned to combine the Asian and European textiles and bring

the best of both worlds to its customers. Through our extensive market research, competitive

analysis and customer surveys we have compiled the list of our strengths and weaknesses and

identified potential opportunities and threats to the business. The table below provides summary

of SWOT analysis.

Strength

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1. Raw Material Base

Pakistan has high self sufficiency in raw material and is the fourth largest producer of cotton. Abundant use of cotton resources has made the Textile industry of Pakistan move towards the area of industrialization. Therefore we can buy products on lower price to export it to generate high profits from European markets.

2. Labor

Cheap labor has always been the backbone of the economy of Pakistan. Cheap and ample supply of labor strengthens the industrial and agriculture sector of the country. Around 39% of the labor force works in the textile sector. As Karl Marx said, that we have to use the “army of labor” present in the country for productive means. Thus cheap and abundant labor means low cost of production.

3. Rich Heritage

Due to cultural diversity and rich heritage, designers come up with new different and attractive designs which are appreciated worldwide. Also we are also influenced by the Indian culture through the media exposure. This varied culture and fusion among these two neighbors gives inspiration to the designers to give their best in terms of styles, creativity and fashion.

4. International Buyer Market

The recent increase in the demand of textile Products in Germany from Pakistan , Due to cheap labor and handling cost, increased international demand. This means more factories more manufacturing units, more supply and more labor.

Weaknesses

1. High Competition

Due to large number of textile suppliers from all over the world there is a high competition and one quote cheap and competitive prices.

2. Develop Image in European Market

Due to very high competition it is very difficult to adjust in European textile industry.

3. Poor Infrastructure

The important resources and infrastructure, such as efficient logistics and transportation, tax structure, raw material supply are all basic requirements for the development of an industrial base. However, on the other hand, the industry is faced with rising charges of the energy sector, which increases the cost of production, making it difficult to compete with the other regional rivals.

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4. Unstable Political Situation

Political unrest, strikes and terrorism have critically affected the economy of Pakistan. Frequent changing of the government has adversely maligned the policies of the textile sector. According to the World Trade Review Pakistan has failed to take necessary steps needed to meet post Multi-Fiber Agreement (MFA) challenges for its textile industry owing to lack of political will by the successive governments.

5. System Orientation and Supply Chain

Nowadays, customers are very systematic in their work and they expect the same professionalism from their vendors. Unfortunately, we lack this capability and are not competent to struggle in the international business, thus losing many opportunities.

On the other hand supply chain management is rarely implemented. We are disorganized, disconnected and distorted. Time management is very much important aspect in the business and buyers expect on time delivery to match the retail launch of the Spring/ Summer or Autumn/Winter seasonal collections on time . Delayed delivery of export orders result increase in cost due to fines by the buyers and at times losing business altogether due to the breach the order contract.

Opportunities

1. Pakistan Textile City

Pakistan Textile City in Port Qasim, Karachi with an area of 1250 acres, will be completed in 2011 as a private public sector joint venture. The main purpose of the textile city is to provide the textile industry with the world class infrastructure to meet the global competitiveness and challenges and as to provide value added textile industrial zone.

2. Marketing

Targeting the unexplored export markets with the help of aggressive sales and marketing will pave the way for the textile growth. It’s all about hunting your opportunities with the handful of colorful lollipops. If we make investment in our sales force and train them in the fine art of marketing textile products, we can capture a much bigger market share from other smaller competitors.

3. Collaboration with foreign companies

By working partners with the foreign companies, we will be able to learn a lot from them in terms system orientation and supply chain. We can also reduce our costs, comply with the international standards, add value to our services, easiness in marketing our retail

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services in different German speaking regions. , and thus catching up with our regional competitors.

4. Image building of Pakistan to attract FDI

Security measures should be taken to facilitate the buyers and investors to visit Pakistan for buying. Secure business environment must be needed to attract golden sparrows to facilitate business dealings and building positive image of Pakistan that they can rely upon.

5. Reducing the cost of business.

China and India are much cheaper in labor, raw material and utilities as compared with Pakistan. Rising inflation also increase the cost of production. We have to control these unnecessary costs if we have to survive in the middle of the two giants of the textile sector in the world.

Threats

1. New competitors

Pakistan is facing new competitors in textile sector such as Bangladesh, Vietnam and Turkey. Though we cannot avoid competition but we can always stay ahead of them by reforming our strategies and educating our entrepreneurs so as to move one step forward in every aspect.

2. Phasing out of quota system

As the quota system is ruled out by WTO, there is a threat by the Chinese and Indian manufacturers to gain most of the market share. We have high costs, low labor productivity and inefficient production processes.

3. Fashion life cycle

Fashion changes day by day these days. Media has so much penetrated in our daily lives that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus increasing the fashion risk.

Now the buyer does not want to wait long for his consignment because he is insecure that by the

time it will reach to him he will lost its demand due to change in fashion. Therefore, they prefer

to buy from neighboring countries even at higher cost to get their products instantly rather than

to wait weeks or months for their consignments to reach them.

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Conclusion

Textile industry is the backbone of the Pakistan’s economy. We have to seriously analyze its strengths

and weakness so as to make the textile industry more competent among its rivals. What we really need

here is to work out the plan and to implement it accordingly and although much work has to be done by

Government of Pakistan, it also the responsibility of the entrepreneurs to cooperate and foresee the

challenges and opportunities ahead. We can always win the race as it is never too late to safeguard and

grow this vital and promising sector of our economy.

Competition

Following are the competitors already have entered in to German textile market to provide their low cost services.

Competitor Name Country Name Core Product

Afroze Textile PakistanBedding, pillows, bed

spreads, garments

Hitex Group Pakistan Bed linen & towels

Huma textiles Pakistan Bed linen, garments

HOUSE STYLE India Bed sheets & pillows

FASHION-B2B Bangladesh Pillows,towels,bedsheets

AVALON TEXTILE HOME

Turkey Bed linen, coverlets, towels, blankets, pillows, mattress

covers, tableclothsVaibhav Overseas India Towels,blanket,rugs,carpets,

bath mats

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MARKETING

Sales and Distribution

Multiline Textilien has always considered its clients to be the prime priority. Our aim is not only to distribute our products and services but to distribute them with full effectiveness and efficiency in order to satisfy all the desires and needs of our client so as to gain their maximum values. We have guaranteed to entertain different people possessing different taste of life, which include;

Hotels who want to demonstrate their exquisite settlement. Brands who want to manifest their innovative and creative art. Retailers who want to capture greater share in market. Families who want to nourish their households with cultural adornments.

In contrast with the related Multiline we have managed our sales and distribution in a more systematic way in order to survive in a long run successfully and efficiently. Our targeted customers are well defined, and our staffs are well trained to serve them the best. Multiline has also focused over the sales point of view so as to be more innovative and successful in some future date and to meet its goals and objectives.

The sales are to be made on the cheapest and pre-determined manner to the targeted customers. Different customers are entertained with different offers and schemes. Just to provide the best location and facilities luxury and comfort Multiline is up holding the responsibility for its customers depending upon their choice and taste.

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The Multiline Textilien have inter linked the concept of Sales and Distribution, that is it will focus over the sales under its specific distribution. Distribution will determine the amount of sales of Multiline Textilien.

Pricing Strategy

Multiline Textilien has always considered the other relative distributors, and considering them Multiline Textilien proudly serves its customers with the cheapest rates. Not only this, but Multiline Textilien has also entertained its customers with various packaging offers which will be more feasible and cheaper. The offers were formulated after a detailed survey from the customers just with the purpose to provide them with what they desire within their range.

Multiline Textilien provides you the best quality apparel with the cheapest rates. Since we can compromise over the price but we can never compromise over the quality. Multiline Textilien also introduces its clients with the online order placement and swift delivery offers. Multiline Textilien has not only focused the elite class but also have wide range of products for middle and lower class buyers. We also provide our special client with significant schemes and for our dealers we offer three valuable membership deals i.e. Platinum, Gold, and Silver membership, which will allow greater discount for their commitment to us.

Advertising and PromotionMultiline Textilien has been working over the marketing of its brand on a broader scale. In order to create greater recognition among our dealers and capture greater market share, we propose aggressive marketing campaign in our initial stage.

Multiline Textilien initial marketing strategy includes:

Personal SellingExhibitions AdvertisementSponsorship

1. Personal Selling

Personal Selling will be the gateway for our products into the market. As our first step, we will offer our products to well verse home apparel brands directly. The core objective of this activity is to go into long term contract with the various brands and convince them on our products for ongoing business agreement.Following are the targeted brands we plan to go into business with:

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Moreover we have also targeted few retailers in different parts of Germany. This will help us capture market in other parts of Germany than Frankfurt too. Currently we are targeting retailers from Weisbaden, Mainz, Darmstadt and Innenstadt.

1. Exhibitions

The second step involves conducting exhibitions in partnership with local brands to introduce our product to public consumers. It will also help us create our product recognition and attract more clients.

Exhibiting will give us outstanding exposure to a highly influential audience with significant industry buying power. This will provide us the opportunity to communicate our message to both existing and potential new business partners in Germany and show our commitment to the growing sustainable textiles industry.

Our First initiative in this regard is an exhibition i.e. Behaglichkeit 14’, in partnership with Comfort Zone on 13th March, 2014 which will held at Heimtextil. This will be the first time our product will be made public in Germany. The event will welcome 4,000 people from various groups i.e. general public, retailers, exporters, hotel management, brand owners etc.

2. Advertisement

In order to promote more aggressively in the market we have also planned to advertise our product through magazines and newspapers.

We will conduct photo shoots of our products and place the pictures in weekly magazines. We will acquire two pages (in middle) from Bild am Sonntag (famous weekly German magazine), which is read by no less than 2.1 million people in Germany every Sunday. This will help us create greater recognition of our product.

Moreover we will also place advertisements in the newspaper with after every two week interval for our company recognition attracting dealers and retailers for B2B offers.

3. Sponsorship

Moreover, we will sponsor various events related to home apparel textile to increase our PR in the industry. Events like “Yarn Expo Spring” attract huge audience from textile industry and consumers. Sponsoring such events will brighten our prospects in the textile market and create more opportunities within the market.

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Operations

Location

Our head office will be located in Zam-Zama, Khi. The location provides centralized position to our office. It will also be closer to our warehouse which will make it easier for us to keep a check on our inventory and dispatching our product via sea-port.

Our second office will be located in Schillerstraße, Frankfurt, Germany. The location was chosen after a thoughtful survey in reconciliation with our marketing team, so as to provide close and convenient pick-point for our dealers. Our office is also surrounded by various shopping malls.The following picture gives clear view of our location in Germany.

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Advantages of Location

Our head office is situated in main Zam-Zama commercial area in Karachi, which will give us close proximity to our warehouse and help us keep a close check on our inventory. The office is also close to our suppliers, thus making it easier to stay in touch with them over our supplies. Another key advantage of our location is that it provides secure area for our office and employees thus reducing hindrances to our ongoing operations.

Cost Analysis of Our Offices and Warehouse

Pakistan, Zam-Zama Head Office

The place we have acquired in Zam-Zama for head office is on rent. The total rental expenses for our head office amount to $8,000 per annum. The man power is easily approachable thus helping us compensating the employees handsomely.

Office in Germany

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The place we have acquired in Germany is also on rent. The total rental expenses for our office in Germany amount to $ 10,000 per annum. The closer proximity to various malls helps dealers to reach us in a convenient and an easy way.

Korangi Warehouse

We have chosen Korangi , S.I.T.E area for our warehouse. The building is acquired on rent which amounts to $ 17,000 on a yearly basis. The location is close to our suppliers and also to the sea-port thus reducing our transportation costs.

Management

Management Team

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Organizational Structure

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MANAGEMENT TEAM BACKGROUND

Finance Manager has done MBA in Finance as a major field, and clean to the industry and has no encounter of industry, but truly faithful and certainly skilled.

Marketing Manager has done MBA in Marketing main core field, and fresh to the market having no recognized experience, but extremely devotee and creative.

Operations Manager has done MBA in Supply Chain as a main core field and also has command over the managerial aspect, fresh to the market and has no experience, but clever enough to recognize the faulty goods and quick enough to solve the problems at instance

ROLES AND RESPONSIBILITIES OF MEMBERS OF ORGANIZATION

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Finance Manager will be assigned with the works of bookkeeping of accounts, cash transactions, loan movements, financial statements and salaries issuance.

Marketing Manager will be dealing with the Multiline Textilien promotional activities, making innovations and creativity with regards to publicizing products.

Operations Manager will be responsible for keeping a perfect check and balance of operations and giving directions to Supply Chain Officer, and Labor force. He will be responsible for day to day task and performances.

Financial

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Multiline TextilienProfit and Loss Statement

FOR THE YEAR ENDED, 2014

Proforma Profit and loss Unit Sold 80000 150000 215000Price per Unit 1.8 2.2 2.3Selling Price 4 3.7 3.6 Year 1 Year 2 Year 3 $ $ $Sales 320000 555000 774000Direct cost of sales 144000 330000 494500Other production expenses 0 0 0Total cost of sales 144000 330000 494500 Gross margin 176000 225000 279500Gross margin in % 55.00% 40.54% 36.11% EXPENSES Payroll 18000 21000 22500sales and marketing and other expenses 30000 28000 25000Depreciation 2500 2800 3200Travel expenses 12000 10500 9500Transportation expnse 25000 29000 33000Insurance 29500 32000 35000Payroll taxes 2700 3150 3375Rent 35000 35000 35000Utilities 10000 11500 11900Misc exp 3500 4000 4300 Total Operating Expenses 168200 176950 182775 Profit before intrest and taxes 7800 48050 96725 EBITDA 10300 50850 99925Intrest Expenses 15000 12000 10000Taxes incurred 1030 5085 9992.5

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Net Profit/loss -8230 30965 76732.5Net Profit/loss in % -2.572% 5.579% 9.914% Taxes @ 10% Intrest Expense @ 10%

Projected Balance sheetThe following table displays the balance sheet for three years.

MULTI-LINE TEXTILENPROFORMA BALANCE SHEET

AS ON DECEMBER, 2014

Proforma Balance sheet $ $ $ Year 1 Year 2 Year 3Assets Current Assets Cash 7800 55850 152575Bank 97200 1200 500Prepaid Inc 29500 32000 35000Inventory 190000 200150 155400Accounts Receivables 25000 35000 39325 Total current assets 349500 324200 382800 Long-term assets Fixture and Furniture 9000 8000 7000Vehicle 35000 34000 33000Packaging Machine 8000 7500 6700Accumulated depriciation -2500 -2800 -3200Total long term Asset 49500 46700 43500Total Asset 399000 370900 426300 Liabilities & owner's equity Current liability Accounts Payabale 7500 14300 17400

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current borrowing 0 0 0Intrest Payable 15000 12000 10000 Longterm Liabilities Loan @10% 150000 120000 100000 Total Liabilities 172500 146300 127400Paid in Capital 245000 245000 245000Retained Earning -10270 -51365 -22832.5 Earnings -8230 30965 76732.5 Total Capital 226500 224600 298900 Total liabilites and capital 399000 370900 426300 Net Worth 226500 224600 298900

MULTI-LINE TEXTILENPROFORMA CASH FLOWAS ON DECEMBER, 2014

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Estimated Cashflow statement

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Year 1 Year 2 Year 3 $ $ $Opening Balance 0 7800 55850Sales 320000 555000 774000Total Income 320000 562800 829850 Cash Outflow from Operations Product Purche cost 144000 330000 494500Payroll 18000 21000 22500sales and marketing and other expenses 30000 28000 25000Depreciation 2500 2800 3200Travel expenses 12000 10500 9500Transportation expnse 25000 29000 33000Insurance 29500 32000 35000Payroll taxes 2700 3150 3375Rent 35000 35000 35000Utilities 10000 11500 11900Misc exp 3500 4000 4300 Total outgoing 312200 506950 677275 Yearly cash balances 7800 55850 152575

MULTI-LINE TEXTILENPROFORMA BREAK-EVEN ANALYSIS

AS ON DECEMBER, 2013

Contribution Margin Ratio 0.298438

Break-Even sales 285486.9

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Variable Cost 224500

*Break-Even = Fixed expenses/Contribution margin ratio*Variable Cost=Cost of goods sold+ registration+ utility connections+ marketing and advertising

Year 1 Break-even analysis

in ratio

Sales 320000 100%

Veriable cost 224500 70%

Contirbution margin 95500 30%

Fixed cost 85200

Pbit 10300 3%

Break-even is a situation where we have neither profit nor loss. It is represented on the chart below by the intersection of the two lines

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MULTI-LINE TEXTILEN BUDGETING

Product types cost selling price

No. of Selling Quantity

Amount of Selling Quantity

$ $ $

Bed sheet

Jersey 2.35 2.5 50000 125000 Cotton 2.25 2.6 35000 91000 Mattress Covers 4.75 5 12000 60000

  Coverlets 3.65 3.95 15000 59250

Comforter

Cotton comforter 5.95 6.45 10000 64500 Synthetic 6.12 6.55 8000 52400

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Pillow Cover

Turkish Cotton Towel

4.2 5.85 13000 76050

Microcotton 4.26 4.6 25000 115000 Pima 4.1 4.3 9200 39560

Bath Robes

Hooded Bath Robes

3.1 3.3 5000 16500

Knit Waffle 3.3 3.6 6000 21600

Towels

Turkish Cotton Towel

3.5 3.9 8200 31980

Microcotton 3 3.4 6100 20740 Pima 2.4 2.7 5400 14580

CRITICAL RISK

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POTENTIAL RISKS AND OBSTACLE AND THEIR ALTERNATE COURSE OF ACTIONS

Poor Market Response

Poor market response from the target market. This can be

dealt with by doing a thorough market research on what

appeals to the target market. Then these research verdicts can

be employed in marketing strategies for the products.

Multiline Textilien will make use of marketing tools that

apply over the targeted customers.

Existing Competition

To survive in a highly competitive environment that includes

AVALON TEXTILE HOME, HITEX GROUP, HOUSE

STYLE. Survival can be made possible by introducing and

promoting a total innovative and new product in market

Hooded Bathrobes, Designed Pillows, Towels, and

Comforters and other mentioned specialties, that are highly

attention grabbing and Brand crafting factor. Moreover we

can grab edge by keeping price lower than our competitors

and introducing new designs and varieities.

Threats of substitutes or new product/service occur when the

competitors have the potential to replace those being offered

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Threats Of Substitute Or

New Product In Market

by the newly innovative product/service. In order to overcome

this risk Multiline Textilien will be conducting an ongoing

research work, and shall be enriched with the relative

information.

Company Recognition

The Company will be new in the market; it may not have a

strong image to fall back on. Therefore, positive marketing

will be very much vital and shall be highly considered.

Legal Restrictions

Trade restrictions, tax laws and other various legal obligations

can prove hinder our business. In order to overcome we will

need legal advisor.

Privacy

Competitors could copy the concept or recipe and gain mileage

over the Cafe. Privacy must be kept maintained to be remained

unique and distinctive.

Transportation And Storage

Another risk that should be considered is transportation and storage. The transportation shall be monitored at every step, from factory to warehouse, warehouse to Frankfurt office and from Frankfurt office to client to ensure efficient and effective service to our clients. Moreover precautionary measures are required to prevent any damage to inventories in warehouse and packages being moved.

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HARVESTING STRATEGY

The Multiline Textilien after accomplishing its goal might seek to an exit strategy which is also

known as harvesting strategy. Here all the partners will be given the equal shares of outcomes

from the business after it has become successful, and will also deal with related strategy in

determining how much money is expected to be given to each partner.

TRANSFER OF ASSETS

The law recognizes that persons are generally entitled to transfer their assets to whomever they

wish and for whatever reason. The most common means of transfer which shall be considered by

Multiline Textilien are mentioned below;

CONTINUITY OF BUSINESS

Multiline Textilien will work hard in utilizing its maximum efforts for achieving the prescribed

goals and objectives with its effectiveness and efficiency, but if any uncertainty occurs

unexpectedly, and the sales began to decline drastically against the expectation, so the first

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attempt will be made to overcome the downfall of business by practicing different strategies like

lowering the prices, lowering down our expenses, but if the business is still going downhill,

ultimately the business will be shut off by implying certain and related strategies.

IDENTIFYING THE SUCCESSOR

The business of Multiline Textilien can be passed over to anyone depending upon the will of all

its partners. But it is to be stated that the successor must bear the following qualities;

Motivated and Dedicated Financially able Highly skilled Experienced Ability to grow the business even further Task Oriented Ability to handle pressure Can work in rigorous environment

The main purpose of stating the qualities of successor is that, Multiline Textilien is established to

serve its client always, maintaining its good will and maximizing the Client’s value will always

be its primary objective.

2014 Milestones

The Multiline Textilien aims to achieve the following eight milestones in 2014:

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1. Complete research, develop effective business model, consider recommendations and seek in principle response.

2. Use the Researchers in Business Program, research hubs and other Multiline research opportunities to create stronger linkages between Multiline businesses, suppliers, dealers, brands and other research organizations for practical business outcomes.

3. Work collaboratively with the Suppliers Advocate to help Multiline generate increased domestic and international business opportunities.

4. Finalize textile industry capability map and identify capability vulnerabilities.

5. Consider the impact of enabling technology and the National Broadband Network on the current and future needs of the Multiline.

6. Achieve projected sales of 80000 units by the end of 2014, and grab 10% of market shares in Frankfurt.

7. Influence government procurement policy and practice to support Multiline Textilien development.

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