1

feasibility report-GET A ONLINE HANDICRAFTS

: E-Entrepreneurship:
Pre-Feasibility Study GET A ONLINE HANDICRAFTS
Small and Medium Enterprise Company PVT.Limtd

Nadia Mushtaq-CEO Company Amina Shafi Nazia Amjad Seemal Imtiaz

Semester 8thSection (B)

Submitted to

Mr.Salman

Dept. Computer Science, G.C.U Lahore.

DATE:12-04-10
1 INTRODUCTION

feasibility report-GET A ONLINE HANDICRAFTS

1.1 Project Brief Business idea is to sale t-shirts, caps/hats, mugs/cups and cultural handicrafts online through a website by adding some more value on them. The thing is that the t-shirts, trousers, mugs and hats would be having some special quotations or images/pictures or nick names or logos of any company or any slogan offered by our website. User would be selecting the options from given on the website or could be requesting his own desired saying or nick name or would upload his/her own favorite picture to print on his/her selected item. Client will need not go for searching a lot in the market or on e-shops rather he/she would get it home via TCS. Categories of handicraft products will be as following Wooden handicrafts Marble handicrafts Traditional embroideries Traditional clothes Metal handicrafts Leather handicrafts Clay decoration pieces Marbles and precious metal ornaments

Categories of customized products are as following T-shirts Mugs\cups Trousers Hats\caps

SWOT Analysis: (Assumption) Strengths:

Large, diversified and potential market. There is large product variety and range is available because of diversified culture. It has strong, diversified and supportive retail infrastructure.

feasibility report-GET A ONLINE HANDICRAFTS

Diversified product range that service different market. Cheap labor rates that result to competitive price. Need low capital investment. There is flexible production flexibility. Low barriers of new entry.

Weaknesses:

Lack of infrastructure and communication facilities. Unawareness about international requirements and market. Lack of co-ordination between government bodies and private players. Inadequate information of new technology. Inadequate information of current market trends. Less interest of young people in craft industry.

Opportunities:

Rising demand for handicraft products in developed countries such as USA, Canada, Britain, France, Germany, Italy etc. Developing fashion industry requires handicrafts products. Development of sectors like Retail, Real Estate that offers great requirements of handicrafts products. Development of domestic and international tourism sector. E-Commerce and Internet are emerged as promissory distribution channels to market and sell the craft products.

Threats: Competition in domestic market. Balance between high demand and supply. Quality products produced by competing countries like China, India. Better Trade terms offered by competing countries. Increased and better technological support and facility in competing countries.

1.2 Opportunity Rationale Pakistan is fortunate enough for its fine handicrafts in all over the world, many private enterprises import the cultural handicrafts at international level and earn alot, where the other countries use their own stamps for selling those products,

feasibility report-GET A ONLINE HANDICRAFTS

sometimes precious handicrafts like metal works and wooden products are smuggled from here which has high demand in international market. We have a great opportunity to promote the label of our own country with our special products as well as we have opportunity to produce such king of precious ornaments and handicrafts at low labor cost in our country, as well as it will pay a part in poverty reduction somehow, similarly providing own desired designing on users selected items is an innovation in Pakistan, online t-shirts and the other related things would be designed by outsources.

1.3 Total Project Cost The total estimated cost for this project is 10 lacks rupees. Out of the total 7 lacks will be used for purchasing ready made handicrafts from different areas of Pakistan and the rest will be used to meet the working capital requirement. 1.4 Process Flow
Purchasing Ready made Handicrafts And ornaments Displaying on website along with prices in dollars and rupeees

stamping and labeling

Photography of products

Delivery of ordered products Purchasing plane products I.e. T-shirts/mugs/ hats Photography and unlinking images Printing and designing the products on Order stamping and labeling

Customization

2 Current Industry Structures 2.1 Existing Split of Industry

feasibility report-GET A ONLINE HANDICRAFTS

Most of the enterprises directly exports handicrafts at low cost, moreover some websites are doing this work but not at that large scale, but they are offering high rates of cheap products, similarly some of them dont offer single pieces for sale. 2.2 Market analysis

3- Marketing We shall do marketing through online advertisement, through broachers and placing placards on the handicrafts related stores. Category Online advertisement Broachers Placards\charts\banners 3.1 Total market size and growth Due to Pakistans fine quality handicrafts production and high demand over the country and outside the country this market is getting broader day by day. but the online market for such kind of precious handicrafts is not that large and there is a gap in market, we need to improve our quality along with the quantity of these products. Estimated cost 25000 2000 5000

Market Analysis (Assumption) Market Entry Time: Handicrafts are considered to be more of an article than a commodity and treated delicately and carefully. Therefore, demand for handicrafts remains almost consistent throughout the year, largely depending on the conduct of exhibitions and trade shows where traders display their products particularly in the foreign markets i.e. Europe and

feasibility report-GET A ONLINE HANDICRAFTS

USA. As handicrafts is considered to be a costly item, its demand generally increases during seasonal, cultural and religious occasions i.e. Eid, Christmas, New Year arrival. Target Markets: The target markets are divided into following types 1-House hold formation (New Home Builders) 2-Occasional (Christmas, Birthday, Eid, Marriages, Thanks giving) 3-Professional Men and women (Men in age range of 25 -50)

House hold: The increasing household formation will increase the target markets. Occasional : The sales of crafts generally revolve around special occasions Professional men and women: They spend lot of money on house hold decorative items .They will be the part of our target market. Marketing Trends The substantial supply of handicrafts has transformed the Pakistani handicrafts market into a fiercely price-competitive market place. Nevertheless, innovative and new to market , handicrafts items place still have good market prospects. It is essential for the handicrafts marketers to find new products to stay competitive. Although Pakistani consumers may be willing to pay a high price for exclusive items they are very price conscious and want value for money. Among traditional items, candles, festive items, including decoration, and all types of scented items have best prospects. The average growth for the overall handicrafts is estimated at 1-2 percent over the years Market Information: There are thousands of small and large scale manufacturing setups working in the industry. Baluchistan, NWFP, Punjab, Sindh and Azad Jammu and Kashmir have their own unique specialties in handicrafts and are famous for different crafts.

feasibility report-GET A ONLINE HANDICRAFTS

Market Strategies: http://www.scribd.com/doc/3162177/International-Marketing-Plan Strategy for Development: We will use the following strategies: Pricing: The price of our products will be on the per unit basis, it will depend on the category of the product, the type of work, the more precious craft work will be charged higher in comparison to the other products. Departmental store : We will place our products in some departmental stores so that they will sell it on 10% commission. And people or say consumer will come across our products . Social Media Marketing: We will place our product info along with prices on some social media web sites, like facebook, twitter, orkut etc . a large number of viewers will come across our product, and will get to know about our products. Broachers: We will print interactive and eye catching broachers to attract our buyers.

Export of Handicrafts: (Smeda Website)

Pakistan exported about USD 14m of handicrafts in 2001-2002. An estimate of about USD 20m has been placed for the year 2002-2003. However Pakistan as compared to India lags behinds in the handicrafts industry. In India, the total value of goods produced in the handicrafts sector is about USD 58m. Such figures are hard to calculate for the Pakistani handicrafts.

feasibility report-GET A ONLINE HANDICRAFTS

4- Human Resource Requirements The human resource requirement is given as Positions CEO Managers Accountant Delivery human resources Number 1 3 1 3 Monthly pay 18000 15000 each 13000 10000 each

5- ASSETS DETAILS Category Offices Furniture Sofas Fans Air-conditioners Wall clocks Carpets Computers Vehicles 6- Raw Material Readymade handicrafts would be sold as well as the plane products like t-shirts, mugs etc would be purchased and value will be added through outsourcing, we need not using our own machines for designing and no need hiring labour,because according to analysis it would be costly to adding value by our own. 7.Land and Building: 3Outlets: Lahore Karachi Islamabad Stock room120sq.ft Customer service corner120sq.ft Garage for office vehicle120sq.ft Number 3 4 chairs and 3 tables(for 3 offices) 3 3 3 3 3 6 3 bikes+3 pickups

feasibility report-GET A ONLINE HANDICRAFTS

Total=360sq.ft

Operational cost: Fuel consumption cost of Traveling for getting suppliers.5000\month Fuel consumption cost of traveling for home delivery.10,000\month Rent per outlet.5000\month Rent of 3outlets.15000\month Electricity bill.700\month Total=30,700\month

Capital cost: Online site registration on trading portal.1000\year Cost of buying domain for uploading site.5000\year Cost of one motor bike.25, 0000/RS Cost of buying 3 motor bicycles for home delivery purposes.75000/RS Site development cost.5000/RS Total Furniture cost includes 3fan, 3tables, 6chairs, 3sofas.9000/RS Total=122500\RS

Product development cost: Raw material cost.

Categories: Wooden handicrafts Marble handicrafts

500\per10items 500\per10items

10

feasibility report-GET A ONLINE HANDICRAFTS

Traditional embroideries 200\per10items Traditional clothes 200\per10items Metal handicrafts 200\per10items Leather handicrafts 300\per10items Clay decoration pieces 100\per10items Marbles and precious metal 50\per10items ornaments T-shirts 200\per10items Mugs\cups 200\per10items Trousers 400\per10items Hats\caps 200\per10items Total=5000+10,000+1000+2000+2000+2000+3000+1000+500+4000+2000=2750 0\RS

Designing cost incase of customization order.1000\order Total=28500\RS

Cost of sale: Shipping cost of using services of cargo international company.5000\order Total=5000\order

Human Resource cost: 1employee for managerial post.15000\month 3employee for customer services in outlets.30000\month 3employee for home delivery purposes.30000\month Total=75000\month

Marketing cost: Online advertisement to get max targeted audience.25,000\month Rent of Bin board for outlets publicity.5000\month

11

feasibility report-GET A ONLINE HANDICRAFTS

Brochers .7000 Total=30000\month

8. Financial Analysis:

8.1.Project Cost: Capital investment: Capital cost: 122500\RS Product development cost: 28500\RS Marketing cost: 15000\month Total=166000 Working Capital: Operational cost: 30,700\month Cost of sale: 5000\order Human Resource cost: 75000\month Total=110700\RS

Total Investment:306700\RS

8.2.Financing Arrangement: The project is assumed to be solely based on equity

8.3.Project Economics:

12

feasibility report-GET A ONLINE HANDICRAFTS

A comprehensive financial analysis & projections of the project show that the project has a potential to bring healthy positive returns to the investors. All estimates are conservative with minimal number of sales in the initial phase. Project IRR 44% Payback Period (yrs) 4.17 9. Key Success factor: To create an enabling environment for the targeted poor producer groups in non farm sector, particularly in rural and peri-urban areas, enabling them to help themselves become vibrant and competitive entities in the economic growth of Pakistan And establish a common platform /giant store of hand made crafts from all over country. Where not only local people served but also foreign market gap of represent ting seat of Pakistanis products is fulfilled via online web portal. Also we provide a new feature of customizing cloths that customers attraction. 10. Financial Statement: Capital investment: Working Capital: Initial Financing:

WORK Distribution: Allmembers did work on whole document individualy.These points specified to person shows the focus of domain. Nadia Mushtaq:Financial Analysis Seemal Imtiaz & Nazia Amjad:Market Analysis Amina shafi:Process Analysis