Business Plan (SBM Project)

8/12/2019 Business Plan (SBM Project)

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Small Business Management Project

Submitted to:

Prof. M. Gulraiz Qadri

Contributed by:

Muhammad Awais (6618)

Zishan Hashmi (6621)

Fareed Ali (6624)

Noman Haseeb (6637)

Babar Hussain (6649)

Asad Abbas (6773)

DEPARTMENT OF BUSINESS ADMINISTRATION

Govt. MAO College

93-R, Lower Mall Road, Lahore


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Pals Auto Dealers

and Services(A Partnership company)

riendship is the most treasured thing in the

domain it could even be magnified when we become

perpetual partner of each other and we are going to

avail this opportunity


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Acknowledgment

First of all we would like to thank ALLAH Almighty who gives us

courage and resources to complete this project. Many people have

contributed in the successful completion of this project. Our great

appreciation goes to Prof. Gulraiz, who helped us in every way to learn

and understand Small Business Management. He provided us with every

generous help in the accomplishment of our blue ideas and molding

them into an achievable business plan. We are thankful to our teacher

for the knowledge he has imparted and his guidance in every field. Last

but not the least we would like to thank our families and parents who

provided us love, support, patience & good knowledge.


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The Business Profile

Executive Summary:

Transport Vehicles are always very demanding at all places. So, we plan to start a business of

motor cycles with Friends Auto dealers and Commission Agent is a dealing place located on

Lytton road in Lahore. It occurs at the center of the market. Where daily a lot of buyers come

and purchase their own vehicle.

We will hold true to its vision of being a new and confidential face of market feel in order to

become a trustable spot for customers. Lytton Road is an old market of trading of auto motors,

and here main focus of businessman is to give a vehicle to its customer at low price withsatisfactory of customers. We will also hope to become the important and most trustable dealers

than any other in market. We want that when a customer entered in market than he firstly comes

at our shop. We will try to deal according to him.

Targeted Market and Customers:

Our target market will be adult citizens. The youth especially mature persons must need a motor

vehicle for their daily routine work. We shall plan for our customers what they want and how we

provide them, as our basic aim will be customers satisfaction.

Over the age of 18, every man required a motorcycle for his need. We open our business at

market, so we can easily deal so many buyers in daily routine.

Segmentation:

I will segment the market demographically, which include age, for the business of dealers I will

go for age wise, although everyone required motorcycle weather he is rich or poor, but my main

focus on the customers aged between 15 to 40, because people of these ages like to use bikes for

their personal use than the aged people. Another fact is that most of aged people ignore bikes

because they like to drive a car then motorcycles.


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Sec 1: Business Profile

Pricing Power:

Our plan would be profitable because everyone need a motorcycles at lower cost than market

price and we shall make sure to sell the bikes by lowering the price which will gives us the

competitive edge on our rivals or competitors. We choose low commission rate especially for our

honorable customers as compare to other dealers in market. In market a PAKHERO bike is

selling at the price of 44,000 R/s with registration, we offer this bike at 43,000 R/s and same in

the case of other bikes like United, Road Prince, and Metro motorcycles.

Sec 2: The Vision and the People:

In next few years Friends Auto dealers and commission agent would be the favorite seller in

market. The trust of our customers will be more increase then recent. Also Increase the trust with

our suppliers for take goods on credit basis easily. The customers prime shop for buy bikes will

be us than others dealers in market.

Mission Statement:

We will intend to make enough profit to generate a fair return and to finance continued growth

and development in quality goods. We will also maintain a friendly, fair, and creative work

environment, which respects diversity, new ideas, and hard work. Increasing the savings more

than more. Dominant our business name in market.

Slogan of our Organization will be;

We believe matching our words with reality. We dont want to keep our customers in

darkness


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As our slogan shows our commitment toward our customers, because we shall provide our

customer high quality of goods by lowering the price and our company slogan helps to make it

more authentic.

Product & Services:

1. Main types of goods of our business are Local brand of bikes like

PAKHERO, UNITED, METRO, ROADPRICE, STAR ASIA, SUPERSTAR and

BML.

2.

We also sell a special tiny scooter for less than 18 years old.3. Spare parts and accessories of bikes.

4. Extended plan for the service stores of our product.

Sec 3: Organization

Business Organization:

Friends Auto Dealers and Commission Agents is a partnership business of Motorcycles Among a

group of college friends( Babar Ali, Zeshan Hashmi, Fareed Ali, Noman Haseeb M. Awais, and

Asad Abbas). They all have potential to apply their business skills and abilities to enhance

business growth with diversified nature in business field. One of our partners have business

history in family background. Having strong motivational abilities and back-support of our

families.


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Human Resource Requirements:

Manager:

CEO will personally manage business and perform the duties of manager, it will help CEO to

reduce the salaries expenses, and it will also help us to put an eye on managing operations and

personally supervise the operations.

Dealing person

We will need a dealing person. He will deal with the customers. He is also liable to listen the

customers.

Assistant

One assistant worker will be one of our partner to assist the business operations, his main duties

will be help to dealing person in case of more than 2 customers. He also helps to manager in

financial sector.

External worker

One of our partner will be our external worker. He will deal with the banks affairs, registration

office, and delivery reports etc.

Peon

We will require a peon who will remove dust from shop and also give us and our customers

some refreshments like tea, coffee, biscuits etc.


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License to run a business:

Certificate of Incorporation is required to run such type of private business. Every person can

start its business on receipt of certificate of incorporation. Thus Friends Auto Dealers and

Commission Agent will also commence their business after fulfilling the requirements of

certificate of incorporation. The legal fee to obtain a certificate is up to 5000 R/s at time of get

license and 3000 R/s annually fee.

Sec 4: Insurance

Insurance:I took an insurance quote from many companies and finally I choose EFU Insurance Company.

Because they give us the best insurance policy on balanced price, they insured our business

approximately Rs. 100000/-

Sec 5: Premises

Location Criteria:

Zoning: - Location of organization would be preferred where tax incentives given to

certain zone and located in market because a large number of customers come here daily.

The attraction of people who has interest in purchasing bikes is also more here than other

markets in Lahore.

Initially exact place of our business is not confirmed; however it would be decided

according to the competitive edge of the place and customers flexibility.

Sec 6: Marketing:The marketing cost is estimated initially only from 43000 R/s. Our plan is to promote our

business by leafleting, for this purpose we will spend approximately 1000 to 1200 R/s yearly,

and spend more money in start of the business.


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Advertising and Promotion Plans;

At the beginning advertising and promotion plan will need higher budget to attract customers,

thus company need heavy advertisement to attract customers and providing them the sales

services. Advertisement would be according to the culture of the country which makes it more

effective to create and retain customers.

We will use Introductory board, Banners, Cable Slides, key rings, Calendars and wall clock as

our major source of advertising,


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How to gain a competitive edge?

We will sell our bikes less than 1000 R/s from market price. Our competitors goods price is

greater we shall compete them by lowering our price of goods. We can also compete them by

low monthly installments rates and lowering the price that can be possible by hiring of skilled

and qualified staff at balanced salaries.

We will also give helmets with bikes and many other gifts like watch, water cooler, wall clock

etc. So by using low pricing technique and by providing gifts to customers, it will give us the

competitive advantage.

Section 7: Growth Program

Expansion:

Initially we will open the business with the product line of 6 customers favorite products, but in

future I will increase my product line and add HONDA, YAMAHA, in our product line. With

the passage of time, we have program to diversify our business, we are aiming to introduce oil

and service stations along with our outlets, and this decision depends upon the accomplishment

of our goals and objectives.

If all the plans are going well and we will be succeeded in our dealers business and if we will get

the satisfactory profit then our plan is to expand our business in next few years and our future

plan is to open another business in another city.

Section 8: SWOT Analysis:

Strengths:

Self-motivated team

Offering low prices as compared to Competitors.


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Low monthly installment rate.

Give a friendly atmosphere.

Weaknesses:

Initially the product line is very small with only 6 products.

Not enough knowledge about market because of new business.

Limited capital

Lack of experience

Lack of dealing knowledge

Limited Items

Opportunities:

Population of country people are increasing day by day.

Increasing demand in cheaply transport products.

Suppliers are easily available for vehicle products.

Time save due to Occurrence in market.

Specialized marketing skills as compared to rivals.

Threats:

Threats of new entrants.

Effect of Government policies.

Increasing inflation.


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Section 9: Startup Expenses

Startup expenses are those expenses that are required for starting the new business, we need

satisfactory amount of money to meet our business financial requirements. According to our

calculations we need sum of money of about 2800000 R/s, this include purchase of computers

and equipment, furniture for shop, legal expenses, advertisement expenses and it also include

e the cash in hand need to meet the day to day requirements. Sufficient level of inventory is

required to meet the daily requirements.

0

500000

1000000

1500000

2000000

2500000

3000000

ExpensesAssets

InvestmentLoan

Start-Up

Start-Up


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Table: Start-up

Start-up Expenses

Requirements

Office Equipments Rs.1020

Computers Rs.10000

Furniture Rs.28200

Telecom & DSL Setup Rs.5000

Logo Design Rs.2000

Legal Certificate Rs.8000

Advertisement Rs.47000

Security Deposit of Property Rs.10000

Total Start-up Expenses Rs.111220

Start-up Asset Needed

Cash balance on starting date Rs.2688780

Start-up Inventory Rs.0

Total Short-term Assets Rs.2688780

Total Long-term Assets Rs.0

Total Assets Rs.2688780

Total Requirements Rs.2800000

Funding

Total Investment Rs.2800000

Total Long-term Liabilities Rs.0

`Loss at start-up (Rs.111220)

Total Capital Rs.2688780

Total Capital & Liabilities Rs.2688780


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Section 10: Financial analysis

We need total investment for starting this business is about Rs.2800000 and it would be totally

financed by our personal source. We will never prefer to take loan from bank or any other

financial institution.

According to our Estimate, Total Sales after 1.5 years is Rs.3410000 and on which we earn net

profit Rs.838180. Cost of Goods Sold will be Rs.2424000.

We will purchase 60 bikes from different companies from which 10 bikes will be sell on cash

basis and 50 bikes will be on installments. We will receive bike from companies at cost of

Rs.38000 and including registration fees Rs.2400. On cash basis, we will sell each bike forRs.43000 and On installments, Rs.59600 per bike. In installments, Per installment of month is

2500 and this will carry through 18 months (1.5 Years). Rs.10000 receive as advance payment

and 2000 bike profit for FADCA, 2000 processing fees and 600 from bikes documentation for

registered as remuneration.

Pro-Forma Profit & Loss

1.5 Years

Sales 3410000

CGS 2424000

Gross profit 986000

Selling and Admin Expense

Advertisement expense 47000

Depreciation on furniture 2820

Depreciation on Computer 1000

Salaries 90000

Misc. Expenses 4 000


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Legal Certificate 3000

Net Profit 838180


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Balance Sheet

Assets

Current Assets Rs

Cash at hand 3530780

Fixed Assets

Office Equipments 1020

Computers 9000

Furniture 25380

Telecom & DSL Setup 2000

Logo Design 5000

Legal Certificate 8000

Advertisement(Deferred Cost) 47000

Security Deposit of Property 10000

Total Assets 3638180

Liabilities & Capital Rs.

Owner's Equity

Paid-up-Capital 2800000

Net Profit838180

Equity 3638180

Liabilities 0


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Total Liabilities & Capital 3638180

Documents

Business Plan (SBM Project)