Entrepreneurship Final Project

7/30/2019 Entrepreneurship Final Project

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MG-365:ENTREPRENEURSHIP

PROGRAM:BBA

SECTION:A

FINAL PROJECT

BOIL OVER

Submitted to:

Mr. Dawood Ilyas Butt

Submitted by:

Usama Bin Shahid 094005-140

AitzazAmjad 083805-111

AnilaGoshi 094005-131

HaroonHameed 094005-035

Syed Salman Jafar 094005-147

DATE: 19/01/2013

REMARKS

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________________________________________________________________________

________________________________________________________________________

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Declaration

We students of University of Management and Technology,

hereby declare that all the work that we have done in this

business plan for our product Boil Over, under the guidance of

our resource person, Mr. Dawood Ilyas Butt, is a record of the

original work done by us and is not submitted anywhere else.

Usama Bin Shahid 094005-140

AitzazAmjad 083805-111

AnilaGoshi 094005-131

HaroonHameed 094005-035

Syed Salman Jafar 094005-147


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Acknowledgement

We like this opportunity to express our profound thankfulness, and deep regard to

our guide Mr. Dawood Ilyas Butt for his exemplary guidance, monitoring and

constant encouragement throughout the course of this project. His constant

guidance and willingness to share his vast knowledge made us understand this

project and his feelings in great depths helped us to complete the assigned tasks.

The Blessing, help, and guidance given by him time to time shall carry us a long

way in the journey of life on which we are about to embark.

We also take this opportunity to express a deep sense of thankfulness to all the

people, especially the owner if Mughal Electric for their support, valuable

information and guidance, which helped us in completing this task through various

stages. We are grateful for their cooperation during the time period of our project.


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Declaration .................................................................................................................................................... 2

Acknowledgement ........................................................................................................................................ 3

Executive Summary ....................................................................................................................................... 8

1. Business Description ............................................................................................................................. 9

Form of Business ....................................................................................................................................... 9

Partners ..................................................................................................................................................... 9

Name of Business ...................................................................................................................................... 9

Business Description ................................................................................................................................. 9

Product Description ................................................................................................................................ 10

Gap Identification ................................................................................................................................... 11

2. Research and Analysis ......................................................................................................................... 12

Porters Five Forces Model ..................................................................................................................... 12

Threat of substitute products ............................................................................................................. 12

Threat of new entrants ....................................................................................................................... 13

Industry Rivalry ................................................................................................................................... 13

Bargaining power of suppliers ............................................................................................................ 13

Bargaining power of Buyers ................................................................................................................ 13

PEST Analysis ........................................................................................................................................... 13

Political Environment .......................................................................................................................... 13

Economic Environment: ...................................................................................................................... 14

Social Environment ............................................................................................................................. 14


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Technological Environment ................................................................................................................ 14

SWOT Analysis......................................................................................................................................... 14

Strengths ............................................................................................................................................. 14

Weaknesses ........................................................................................................................................ 15

Opportunities ...................................................................................................................................... 15

Threats ................................................................................................................................................ 15

Key success factor ............................................................................................................................... 16

Internal Factor Evaluation (IFE) Matrix ............................................................................................... 17

External Factor Evaluation (EFE) Matrix ............................................................................................. 18

Market size and Growth ......................................................................................................................... 18

Key Market Trends .................................................................................................................................. 19

Barriers to growth ................................................................................................................................... 19

Competitor analysis ................................................................................................................................ 19

3. MARKET STRETEGY.............................................................................................................................. 20

SEGMENTATION ...................................................................................................................................... 20

Market segmentation ............................................................................................................................. 20

Demographic Segmentation ............................................................................................................... 20

Psychographics Segmentation: ............................................................................................................... 20

Behavioral Segmentation: ....................................................................................................................... 21

Benefit Segmentation: ............................................................................................................................ 21

Target Market: ........................................................................................................................................ 21


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Segmentation Strategy: .......................................................................................................................... 22

Pricing Strategies .................................................................................................................................... 22

Sales and distributions strategy .............................................................................................................. 22

Advertising and promotions strategy ..................................................................................................... 22

4. Operations .......................................................................................................................................... 23

Total Land Requirement ......................................................................................................................... 23

Equipment ............................................................................................................................................... 23

Supply Chain Management ..................................................................................................................... 24

Inventory Management .......................................................................................................................... 24

Suppliers .................................................................................................................................................. 25

Location ................................................................................................................................................... 25

Logistics: .................................................................................................................................................. 25

5. Management ....................................................................................................................................... 25

Legal Structure ........................................................................................................................................ 25

Board of Directors ............................................................................................................................... 25

Board of Advisors ................................................................................................................................ 26

Human resource Management ........................................................................................................... 26

Organogram ............................................................................................................................................ 27

Staffing Plan ............................................................................................................................................ 27

Salaries ................................................................................................................................................ 28

6. Financial Projections ........................................................................................................................... 28


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Estimated Sales ................................................................................................................................... 29

Cash Flow Statement .............................................................................................................................. 30

Balance Sheet .......................................................................................................................................... 31

7. Financial Analysis ................................................................................................................................ 32

Return on Equity ..................................................................................................................................... 32

Return on Investment ............................................................................................................................. 33

Payback Period ........................................................................................................................................ 34

Break-Even .............................................................................................................................................. 34

8. Critical Risks ........................................................................................................................................ 35

Potential problem ................................................................................................................................... 35

Obstacles and risks .................................................................................................................................. 35

Contingency plan .................................................................................................................................... 35

9. Exit Strategy ........................................................................................................................................ 36

10. Milestone Schedule ......................................................................................................................... 37

Making of prototype ............................................................................................................................... 37

Business Plan ........................................................................................................................................... 37

PERT ........................................................................................................................................................ 38

CPM ......................................................................................................................................................... 39

Man Power Loading ................................................................................................................................ 39

11. Conclusion ....................................................................................................................................... 40


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Executive Summary

This project is related to a business plan that has been developed for a new product that we were

supposed to invent as a part of our Entrepreneurship course. First of all we as group members

applied the basic part of the course that was related to finding a business idea, by looking in

between and around us and identifying the gap in the demand and supply.

Finally we came up an idea that was related to preventing milk over-boiling at homes. Keeping

this idea we have developed prototype of our product and have prepared a full business plan that

focuses onto all the major areas that are required in order to start a new business, measuring its

feasibility and defining the future of the business.

For this we have included in it business description, market research and analysis, marketing

strategies, operations and management details, projected financials, critical risks involved in this

business and final the exit strategy of the business. We have also included in it the milestone

schedule to provide information regarding our efforts and ways of developing a business plan.


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1. Business Description

Form of Business

The business that we are going to start will be in form ofpartnership.

Partners

Usama Bin Shahid

Aitzaz Amjad

Haroon Hameed

Salman Jafar

Aneela Goshi

Name of Business

Boil Over

Business Description

In everyday life we face many problems and think of the solutions for it but even after finding

solutions we fails to go for them because either the solutions are very critically structured or the

solutions are financially unaffordable.

This is a new business, by the name of Boil Over that will provide the solutions regarding the

problems related to heating and boiling of food items at both the domestic and commercial level.

Our products will be universal and could be easily fitted onto different sources of heat like

electricity and gas. Apart from just selling the devices we will also provide services to our

customers. Currently we are starting with focusing at the domestic level with a wide range of


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products with different specifications depending upon the requirement and affordability of

customers.

Product Description

One of the same problems, discussed above is related to the boiling of milk at homes. The

problem is mainly faced by the women who while boiling milk are involved in many other tasks

as well; due to which the milk is wasted by reaching temperature above the boiling level of milk.

So to avoid this problem of milk over boiling there are many solutions available but they are

quite expensive for middle class to be adopted although the middle class require them more as

compared to upper class in which this process is usually carried out by the servants. So to resolve

this problem, mainly for the middle class we have finally developed a device which is easier to

use; is quite efficient and very economical. One of the great features of this device is that it is an

attachment which is installed to the already fitted gas stove at houses; means there is no need to

change the whole system of the kitchen rather than to just add an additional economical device

onto it.

Before describing the device in depth I would like to share some of the benefits of the device.

First of all as mentioned above the device is economical and easy to use. The device saves

natural gas by cutting it off as soon as the milk reaches it boiling temperature and to tackle the

need of re-boiling milk certain times, the device resumes the gas supply as soon as the

temperature of the milk falls. Now coming towards the main structure of the device, the devicemainly consists of two parts, of which one is thermostat and the other is solenoid valve. Other

things are optional that includes a buzzer, light indicators and a timer that can be fitted upon the

requirement of the customer.

The thermostat functions as the temperature adjuster for the gas cutting point, providing an ease

to the users to adjust temperature accordingly. The solenoid valve plays a vital role in this device

by communicating with the thermostat and cutting and resuming the gas supply when needed.

Some additional things as mentioned above, that can be added to this device includes a buzzer

that starts as soon as the solenoid valve cut gas supply and stop when it resumes gas supply, a

timer that will allow the user to set time it requires the milk to be boiled, and the indicators inform of lights which will light up at different stages of the milk boiling process.

The device is independent and can be installed into or removed out of the stove and is workable

with all types of stoves and burners whether working onto natural gas, gas cylinder or electricity.

In case anyone wants that device to be fitted in to the stove than that is also possible but the stove


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needs to be of a standard size for it and there will be some adjustments needed to be made in the

stove. Secondly, after the removal of the equipment from the stove the stove will have the marks

remained on it of the installation.

Products

Sr# Features Budget Econo Premium Premium Plus

1 ThermostatDigital

Analog

2 Digital Timer

3 Buzzer

4 Light Indicators

Gap Identification

We identified a gap in this through our own daily life experiences as well as through carrying out

a research related to problems the people face in this regard.

As soon as we identified this gap, we start searching for the already available solutions which

could easily fulfill this gap. After searching we found out that the solutions were available but

that were not financially affordable by the people who required it. So the main thing that we

needed to focus onto was to provide an easy and economical solution.


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2. Research and Analysis

Porters Five Forces Model

There are five competitive forces that identify the competitive power in a business situation.

1. Threat of substitute products

2. Threat of new entrants

3. Intense rivalry among existing players

4. Bargaining power of suppliers

5. Bargaining power of Buyers

Threat of substitute products

Our product (Boil Over) will be new in the market. We may have indirect competitors but not

direct ones so the substitutes are not a threat to our company. Even those indirect competitors

cant affect our business because the products they are selling are quite expensive and are

targeting a completely different market.


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Threat of new entrants

A new entry of a competitor into the market can weaken our power, but the new entrants will

need time and efforts to compete us because we will not be going to stay at the same point from

where we will start the business and will keep on bringing changes in designs and especially

technology.

Industry Rivalry

Intensity of rivalry depends on the number of competitors and their capabilities but we are

offering new product which does not exist so the industry rivalry is not high. We have indirect

competitors which are offering their product with a high price.

Bargaining power of suppliers

The bargaining power of suppliers in our case will be low because there are a number ofsuppliers available so we have options and we can get raw materials from any supplier which is

economical and has good quality supplies.

Bargaining power of Buyers

Initially the bargaining power of buyers will be low because we have no direct competitors but

can be more in long run when new entrants may come in the market. To cater with even the long

term threats we are already planning to charge customers as less we can by reducing our

margins.

PEST Analysis

Political Environment

The political environment is not stable in Pakistan. In short run and long run we can face

problems. In short run it could be difficult for us to deliver products to our customers on time

and we may have to maintain some inventory also with us. In long run when we may focus on

importing raw material the problem we can face can be in form of imposition of taxes anddelayed deliveries


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Economic Environment:

Economic environment is a most critical environment for any industry. So if we analyze

Pakistans economy in the our economy is growing and if we see the GDP of Pakistan, it is

growing from last five years but negative point is this that inflation is also growing rapidly which

is not a good sign for our economy. For investment purpose Pakistans economy is not

impressive because inflation rate is very high so we can say economic environment is very risky

in Pakistan.

Social Environment

After considering the government rules and regulations the social environment of a country gives

a good idea about their product sale in a particular country. Pakistan has very different sort of

culture, there are many languages are being speak here and basically it is an Islamic country and97% are Muslims. Up to 40% people adopt new fashion and changes in industry.

Technological Environment

Todays era technology can play a back born role for any industry and if anyone do not

implement those changes that are occurring in the industry then we can simply say that it would

not survive and will get end very soon. Pakistan social trend has changed and people also want

fully quality product. Consumer here wants new products in lower cost which are easy to use andincrease their life standers; it cannot be possible without technology.

Our government is encouraging technology competition in local market. E-Commerce is growing

up and people buy their favorite product online and Government establishes a Hardware

Development Fund (HDF) to finance IT hardware related R&D and manufacturing activities.

SWOT Analysis

Strengths

Technology

Unique Products


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Cost Advantages

Pricing Power

Innovative Product

Weaknesses

Cost Structure

Lack of Skills

Competition

Opportunities

New Markets

New Products

New Technology

New Services

Innovation

Online Market

Threats

Substitute Products

Govt Regulations

Political Risk


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Change in structure of stoves

Mature Markets

Competition

Bad Economy

Intense Competition

Key success factor

Quality product

Lower cost differentiation

Quality and skilled employees

Advertisement /positioning according to the targeted customers

Easily accessible location


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Internal Factor Evaluation (IFE) Matrix

Key internal factor Weight Rating WeightedScore

Strengths

Technology 0.15 4 0.6

Unique Products 0.1 3 0.3

Cost Advantages 0.1 2 0.2

Pricing Power 0.1 2 0.2

Innovative Product 0.15 3 0.45

Weaknesses

Cost Structure 0.1 2.5 0.25

Lack of Skills 0.2 3 0.6

Competition 0.1 1 0.1

Total 1 2.7


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External Factor Evaluation (EFE) Matrix

Key External factor Weight Rating WeightedScore

Opportunities

New Markets 0.07 2 0.14

New Products 0.1 3 0.3

New Technology 0.1 4 0.4

New Services 0.05 2 0.1

Innovation 0.1 3 0.3

Online Market 0.05 2 0.1

Threats

Substitute Products 0.05 1 0.05

Govt Regulations 0.08 2 0.16

Political Risk 0.05 1.5 0.075

Change in structure of stoves 0.1 1 0.1

Mature Markets 0.1 3 0.3

Competition 0.05 1 0.05

Bad Economy 0.05 2 0.1

Intense Competition 0.05 1 0.05

Total 1 2.23

Market size and Growth

We are targeting the middle and upper middle class. The size of the Pakistani middle class, underprevailing economic conditions is estimated at 20 million, out of a population of 180 million.

Boil over is basically a new product so thats way over potential growth will be high, if no copy

version of the product will come. Electronic industry is basically a big industry. In market there

are many competitors offering different electronic products. When we look at the industry we

can see that there are a lot of electronic shops in Pakistan. In the modern age Pakistani people


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have become very advance especially the upper middle class people they prefer these new

technologies for their ease and time saving. This industry caters one of the basic needs of all the

people in the world.

Key Market Trends

Technology and Innovation

Consumer Awareness

Portable device

Low Price

Through the market analysis we can find the needs and wants of the customers. The availability

of the products is monitored as well as information about the competitors is gathered through thisanalysis. The image of the product in the minds of the customers is also judged and boil over

success depends on meeting the needs and expectations of our customer. Through listening and

understanding, it can make products that they will want to use all through their lives.

Barriers to growth

Initially there are no barriers to growth as we are starting a business from a very low level. So

what we need to do is just to get ourselves registered and start selling our products. In long run

we may face issues regarding growth if we face some pressures from big giants working in the

same field and if we lose our focus on product quality and improvement and any new entrants

tries to take place of us.

Competitor analysis

We have no direct competitors. We are offering new product in market. Our indirect competitors

are offering their product but to a different target market, in quite high prices.


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3. MARKET STRETEGY

SEGMENTATION

In this portion of project we will discuss that how many segments we are using for this product

and what strategy we are using for these segments.

Market segmentation

Demographic Segmentation

Age: People from all age groups

Gender: Female

Occupation: House wife or working women

Income: Rs. 25,000/- and above

Religion: every religion

Psychographics Segmentation:

The social class, which includes the target group of milk boiling device, is consumer from upper

middle class. They will buy this product because of their social set up and price of the product.

The consumer has large range of personalities from dynamic to interesting. From self-confident

to extra vested, from risk-taking to social able. The personality of a person makes a lot of

difference in buying power.

The lifestyle of consumer varies from flashy, broadminded modern too dull traditional andbackward. It is a very important factor which very much influences the buying pattern of the

consumer. People will be mostly influenced by high quality, new technology and branding of

product.


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Behavioral Segmentation:

The customer expects high quality in a new product to shift from existing one. Milk boiling

device is helpful for the females. Milk boiling device will be available in small (portable) size

and suitable for consumers that they can use it any time at home. It is very regularly consumed

product.

Benefit Segmentation:

The people groups (females) at the time of boiling the milk, womens can leaves the kitchen and

have a more time to do all the other activities.

Target Market:

A target market is defined as a group of customers (people) at whom seller specifically intends to

aim its marketing efforts. For this purpose we analyze three components:

Consumer Buying Power Social and psychological factors influencing buying patterns

Over target market is upper middle class people. Upper middle classes people those

people who are well educated. Mostly they use new products and new technology because of

comfortable incomes. milk boiling portal (new product) that can reflect over target market

(females) because it is a convenient product, she can leaves the kitchen and she have a more

time to do all the other activities.

The size of the Pakistani middle class, under prevailing economic conditions is estimated at 20

million, out of a population of 180 million. Middle class people those people who have a at leastone Bick at their home and somehow know about the new technologies.

Due to increased industrialization the income and the life standards are improving.


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Segmentation Strategy:

Milk boiling portal is targeting all above mentioned Segments. Target segment is getting benefit

from this product (milk boiling portal) like:

Females will prefer that technology for their ease and convenient. So there will be a strategy to target females, house women and working women

Pricing Strategies

We are using Markup price strategy. Our pricing strategy will not be more. We will set a low

initial price for their innovative new products when we enter the market. The lower or

affordable price can help to attract more customers.

Sales and distributions strategy

Exclusive distribution: we will open of our own shop on Hall Road.

Advertising and promotions strategy

For advertising we will use female magazines like female lifestyle magazine and female fashionmagazines etc. we will promote our product by using the websites, social media such as twitter,

face book page etc and through advertisements.


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4. Operations

Boil Over has 5 founders who are also going to be the partners for this new business. They

would have the voting power for any decision that has to be made. All the five founders of Boil

Over are Business Management Students with corporate experience. The founders are also going

to act as operational managers, Marketing Managers and Supply Chain Managers.

Total Land Requirement

Approximately 2 Marla covered area is required for the proposed Boil Over shop.

Equipment

Following equipment would be required for the proposed beauty clinic. Equipment is chosen

keeping in mind the kind of services we are going to offer at our clinic. Approximate prices are

also given along with the list.

Furniture & Fixture Required Cost per Unit Total Cost

Back rack 1 30500 30500

Reception & cash

counter 1 20000 20000

Display counter 1 14500 14500

Main door 1 35000 35000

Front Board 1 14000 14000

Counter chair 1 7000 7000

Assembly desk 2 10500 21000

Generator 1 120000 120000

Waiting area chairs 5 4000 20000

Waiting area sofa set 1 30000 30000

Air conditioners (4 ton) 1 125000 125000

Television 1 22000 22000

Lighting 1 6000 6000

Total 465000


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Equipment/Machines Required Cost Per Machine Total Cost

Computers 1 12000 12000

Assembly Equipment 3 5000 15000

Motor Bike 1 50000 50000

Telephones 1 1000 1000

Total 78000

Supply Chain Management

Inventory Management

Inventory management is not a big issue initially because the company has decided to purchase

raw materials from local suppliers. Later on after a year depending upon the business conditions

Raw

Material

Shop

OrderAssembly at

Shop

Dilevery

Assembly at

order Placed


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we could go for importing raw materials. So currently we can easily get any amount of raw

materials we need for operations in local market and dont need to maintain any inventory level.

Suppliers

There are many suppliers in Brandrath Road. But company has selected only three suppliers.

Mughal Equipments, Ahmed Equipments and Siddique Electric and gas works.

Location

We are going to take a 2 Marla shop on rent in Hall Road. Starting the business in a rented

building would significantly reduce the initial cost of the project. We have searched the market

and a 2 Marla shop can be easily found in approximately 60,000, in one of the busiest roads from

commercial point of view. This will cost us Rs.20, 000/month. Comparatively if a land is

purchased and a new building is constructed it would cost us in millions. This makes a huge

difference in project cost. This location itself has several of the advantages for new ventures and

the especially the kind of target market we have, it tends to be the ideal location.

Logistics:

Company only requires 1 motor bike initially which will used for placement of order or purchase

of products. Some of the Company Directors have their own cars which will also be used for

these purposes.

5. Management

Legal Structure

Board of Directors

The founders of Boil Over are also going to be the member of board of directors. Boil Over has 5

founders and each one would have 20% voting right. 80% of the vote should be in favor for any


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decision to pass. The board of directors is also going to responsible for HR activities (hiring &

Firing). All the 5 members are also going to serve as the operational managers who are going to

visit the Shop according to their fixed times.

Board of Advisors

Our resource person Mr. Dawood Ilyas Butt will assist us in implementing this project so he and

some of our other teachers will act as Board of Advisors as well. We will seek help and guidance

from them time to time. Other than there is a person, Mr.Ahsan who has been successfully

running his Business of Ovens and gadgets like these. He has helped us a lot in this project and

he will further assist us in implementation phase of our project.

Human resource Management

The company is owned by 5 founders who are equal stock holders of the Boil Over. The sister

concern of the board of directors is the board of advisors who advise the board on different

issues mostly when the board or the owners are facing any problem with the business. The Board

of directors perform the activities of HR Department themselves Operational manager, financial

manager and marketing manager. One of the Directors will purchase the Raw material and will

be marketing manager. Two will take the orders and perform the management job and other two

will place and assemble the order.


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Organogr

Staffing Plan

Ceo

HR ManagerMarketing

Manager

Financial

Manager

Supplychain

Manager

Staff

SweeperSecurity

GaurdElectrician Office Boy


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Salaries

Staff Required Salary/month

Guard 1 7000

Electrician 1 12000

Sweeper 1 5000Office Boy 1 7000

Total 4 31000

6. Financial Projections

Net sales 13100000 17775000 21190000

CGS

Purchases 10480000 14220000 16952000

Gross profit 2620000 3555000 4238000

Expenses

Depreciation Expense 201000 201000 201000

Salaries 372000 409200 450120

Rent of Shop 240000 264000 290400

Electricity Bills/Petrol 120000 132000 145200

Maintanance 50000 55000 60500Marketing and Advertisement 100000 1083000 110000 1171200 121000 1268220

Operational profits 1537000 2383800 2969780

Tax 99905 154947 193035.7

Profit after tax 1437095 2228853 2776744

20142013 2015

Projected Income statement


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Estimated Sales

Budget 5000 1000 5000000

Econo 2000 1300

2600000Premium 2000 1750 3500000

Premium Plus 1000 2000 2000000

Budget 7000 1000 7000000

Econo 3000 1300 3900000

Premium 2500 1750 4375000

Premium Plus 1250 2000 2500000

Budget 8000 1000 8000000

Econo 3800 1300 4940000

Premium 3000 1750 5250000

Premium Plus 1500 2000 3000000

2014

2015

2013


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Cash Flow Statement

Cash Flow Statement 2013 2014 2015

Cash Flow from Operations

Net income 1437095 2228853 2776744

Depreciation 201000 201000 201000

Increase in Account payables 51000 56100 61710

Increase in taxes payable 99905 154947 193036

Cash at the end of the year 1789000 2640900 3232490


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Balance Sheet

Total Assets Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Fixed Asse ts le ss Acumulated Depreciati Cost Acc.DepNet Cost Cost Acc.DepNet Cost Cost Acc.Dep Net Cost

Shop Advance 60000 20000 40000 60000 40000 20000 60000 60000 0Back rack 30500 10167 20333 30500 20333 10167 30500 30500 0

Reception & cash counter 20000 6667 13333 20000 13333 6667 20000 20000 0

Display counter 14500 4833 9667 14500 9667 4833 14500 14500 0

Main door 35000 11667 23333 35000 23333 11667 35000 35000 0

Front Board 14000 4667 9333 14000 9333 4667 14000 14000 0

Counter chair 7000 2333 4667 7000 4667 2333 7000 7000 0

Assembly desk 21000 7000 14000 21000 14000 7000 21000 21000 0

Generator 120000 40000 80000 120000 80000 40000 120000 120000 0

Waiting area chairs 20000 6667 13333 20000 13333 6667 20000 20000 0

Waiting area sofa set 30000 10000 20000 30000 20000 10000 30000 30000 0

Air conditioners (4 ton) 125000 41667 83333 125000 83333 41667 1 25000 1 25000 0

Television 22000 7333 14667 22000 14667 7333 22000 22000 0

Lighting 6000 2000 4000 6000 4000 2000 6000 6000 0

Computers 12000 4000 8000 12000 8000 4000 12000 12000 0

Assembly Equipment 15000 5000 10000 15000 10000 5000 15000 15000 0

Motor Bike 50000 16667 33333 50000 33333 16667 50000 50000 0

Telephones 1000 333 667 1000 667 333 1000 1000 0

Total Fixed Assets 402000 201000 0

Current Assets:

Cash 1789000 2640900 3230490

Inventory 0 0 0

Other current assets 0 0 0

Total Current Assets: 1789000 2640900 3230490

Total Assets 2191000 2841900 3230490

Liabilities and Capital:

Current Liabilities:

Rent Payable 20000 22000 24200

Salaries Payable 31000 34100 37510

Tax payable 99905 154947 193036

Long Term Liabilities: 0 0 0

Total Liabilities 150905 211047 254746

OE 603000 402000 201000

R.E 1437095 2228853 2776744

Total Capital 2040095 2630853 2977744

Total Liabilities and Capital 2191000 2841900 3232490

Year 1 Year 2 Year 3


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7. Financial Analysis

Return on Equity

Return on Equity Net Income Total Equity ROE2013 1437095 2040095 1.4195965

2014 2228853 2630853 1.1803618

2015 2776744.3 2977744 1.0723868


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Return on Investment

Return on Investment Gain from Investment Investment ROI

2013 1638095 603000 1.7165755

2014 2429853 603000 3.029607

2015 2977744.3 603000 3.9382161


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Payback Period

The payback period in our case is 3 years. We have estimated an investment of Rs. 603000/- and

have decided to depreciate it over 3 years.

Break-Even

Year Total Investment Dep. Charged Acc. Dep Investment Remaining

1 603000 201000 201000 402000

2 603000 201000 402000 201000

3 603000 201000 603000 0

Depreciation on start-up capital 3yrs Rs201,000

Salaries Rs372,000

Rent of shop Rs240,000

Electricity Bill/ Petrol Rs120,000Maintanance Rs50,000

Marketing Rs100,000

Total amount to be covered Rs1,083,000

Break-even sales (1083000/200)Assuming margin of Rs.200/unit

Break-Even Calculations

5415


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8. Critical Risks

Potential problem

As we are coming up with a new product that does not exist in the market and if it exists in the

market either the cost is high which is out of the range of many people or people are not properly

aware of this product so basically our potential problem is to give awareness of our product in

the market and to the end consumers. This product is used in house basically used by most of the

women so we have to market our product in such a way that the women sitting in the home

knows.

What the product is? How to use it? Basically we have to show them the importance of our

product and make them realized that they really that product. Most of women listen radio while

doing work so we have to give repetitive add on the radio and same case with the TV adds busy

women got less time to watch TV by giving repetitive adds we can aware them with the productand its usage. This process increases our advertising cost. In start we might have to go for direct

sale means hired people that go to the doorsteps and sell the product.

Obstacles and risks

As we are coming with a new product and we dont have any direct competitor so we dont have

to face much obstacles but the main thing is to change the perception and minds of the people

that we are offering a quality product at low cost because of Chinese cheap products our market

is spoiled and people perceive that cheap products as not durable. As we can observe that cheap

product with great deals one for one free are available but their quality is too low.

This is main obstacles other than that we are coming up with a new product that is very useful

for busy housewives. As risk is involved in every business, mostly at the start of new business

which has to face high factor of risk as compared to the running businesses so, at the starting of

our business the only risk that we could face is the acceptability of targeted customers and their

agreeableness to buy this product.

Contingency plan

A contingency is an unexpected event or situation that affects the financial health or marketshare of a company. It is usually a negative event, but can also be an unexpected windfall such as

a huge order. Anything companys expected operation can harm the company even if the

disruption is because of a windfall. That is why companies create contingency plans for many

possible situations, so company management has a pre-researched plan of action to immediately


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follow. Some threats usually covered in contingency plans are crisis management, business

continuity, mismanagement and reorganization. Contingency plan is like an option of plan B if

the ways u think are not going the same then what u have to do as we are launching a new

product so if it does not work so what should we do contingency planning is not just about major

disasters. On a smaller scale, it's about preparing for events such as the loss of data, people,

customers, and suppliers, and other disruptive unknowns. That's why it's important to make

contingency planning a normal part of your everyday business operations.

9. Exit Strategy

In our case exit strategy is not that difficult as we are launching a product for a middle class

which is not commonly used so we are starting it from very small scale by keeping that point in

our mind that ifproduct does not work well so we dont face a huge loss for huge investment as

our target market is middle class so we have to cut down our prices and have to earn reasonable

profit.

For defining a exit strategy we need to first focus on, What we really have at the start?

We will have at the start s shop which will be on rental basis and furniture and equipment for

which the details are provided above. All the raw materials as discussed above will be bought at

the time we require them, from the local suppliers. Keeping this in view the exit strategies we

can adopt are:

Let it run dry: This strategy well works in small business. We will run the business until and

unless it starts generating loses.

Selling share: This strategy well works in partnership business. We can sell our shares to any

partner who is willing to carry on with this business.

Merge: We can merge this business with another business of that type that has a brand name and

a high market share and reputation.

Sell: Selling outright can also allow for an easy exit. If partners agree we can take the moneyfrom the sale and distribute it.


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10. Milestone Schedule

Making of prototype

For our prototype we got help from many technicians and consulted many companies that are in

similar types of businesses. As this was a new idea so most of them were not even willing to try

it and many suggested us already manufactured full panel electrical and gas equipment which

were not easily understandable from technical point of view and were also much costly, both for

purchase and operation and had nothing unique in them other than their designs. At last after

number of meeting we learnt that the real manufacturers that are mostly at the back end in big

companies are separate from sellers, that are on front end and do not have any proper technical

knowledge of what they sell.

So we decided to stop wasting time over these types of companies and to start targeting small

businesses that are mostly operated by their owners, who have all knowledge of the product dueto their involvement in the manufacturing process as well. Finally we met the owner of Mughal

Electric and discussed this idea with him. After two to three meetings he was able to suggest us

the favorable solution to this. After that to further know about the technicalities of the product

we met their technicians and got some technical knowledge required to create a circuit of the

product from them.

The main part of our prototype is that we made it by our own. We made the circuit by ourselves

and even assembled it ourselves.

Business Plan

Coming towards the business plan, we all group members divided the parts of the business plan

among us, as shown in the PERT, below. After that we started working onto the business plan,

the description of which is provided in the CPM.


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PERT


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CPM

First of all as a basic step of the business plan or we can say the foundation of the plan we

discussed the product and the proposed business in depth with each other covering it through all

aspects, so that every group member must be clear of what we were actually focusing onto with

this product and business. This was important because if we wouldnt have practiced this than

our work may not have any relation with each others work.

After that, with the help of Microsoft Project we finally distributed different portions of the

project among us and started working onto it. We were in communication with all of our group

members and at any level we needed help we communicated with each other through mails, calls

or even conference calls where required. After completing the work we again had a meeting in

which we analyzed our work and then made corrections were needed.

In this way we finally came up with a business plan for our business.

Man Power Loading

We altogether are 5 group members. All of us were having efficiency in different fields so we

divided the work based on the level of efficiency every one could give on different parts of the

project. Almost all of us were given equal amount of work to be performed in this project and

tried our level best to do work as efficiently as we could.


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11. Conclusion

Finally we will like to conclude this business plan as a challenging and learning one. Its

challenging because it was not like other project in which we were focusing mainly onto theory

or doing the quality work by focusing onto the text only but we had to focus on the quality of the

practical work as well in this business plan. Its learning because in this business plan we were

required to apply whole our learning and knowledge that we gained in first 6 semesters of our

BBA program.

The product that we have developed by the name of Boil Over has itself made us learn a lot. It let

us to meet the people in industry, it let us to know how people feel when you have an idea, it let

us know who can be helpful for you and finally that until and unless we have the power to reach

our desired destination, we cant succeed.

All the work done in this plan has been tried to link to the practical information as much as

possible, but there are certain stages or areas where we need to make assumptions like in case of

financial. In case of a new business the assumptions are usually more because there is no

experience in behind that could guide us.

Finally we have decided that we will try to take this product to market and will try selling this.

The aim behind this may be not to earn money but to experience this and know about our

potential.

Documents

Entrepreneurship Final Project