Meat Shop Business in Pakistan PDF

Pre-Feasibility Study
(Meat Shop)
Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE
Punjab Sindh Khyber Pakhtunkhwa Balochistan
3rd Floor, Building No. 3, 5th Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 111-111-456 Tel: (081) 2831623, 2831702
Fax: (042) 36304926-7 Fax: (021) 35610572 Fax: (091) 5286908 Fax: (081) 2831922
helpdesk.punjab@smeda.org.pk helpdesk-khi@smeda.org.pk helpdesk-pew@smeda.org.pk helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014
Table of Contents
1. DISCLAIMER...................................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ................................................................................................... 3
3. INTRODUCTION TO SMEDA .......................................................................................................... 3
4. INTRODUCTION TO SCHEME ....................................................................................................... 4
5. EXECUTIVE SUMMARY .................................................................................................................. 4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ................................................................... 4
7. CRITICAL FACTORS ....................................................................................................................... 5
8. INSTALLED & OPERATIONAL CAPACITIES ............................................................................. 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................................. 5
10. POTENTIAL TARGET MARKETS .................................................................................................. 6
11. PROJECT COST SUMMARY .......................................................................................................... 6
11.1 PROJECT ECONOMICS ................................................................................................................... 6
11.2 PROJECT COST ............................................................................................................................. 7
11.3 SPACE REQUIREMENT .................................................................................................................. 7
11.4 MACHINERY AND EQUIPMENT...................................................................................................... 8
11.5 OFFICE EQUIPMENT ...................................................................................................................... 8
11.6 FURNITURE AND FIXTURE ............................................................................................................. 9
11.7 RAW MATERIAL REQUIREMENTS ................................................................................................. 9
11.8 HUMAN RESOURCE REQUIREMENT .............................................................................................. 9
11.9 REVENUE GENERATION...............................................................................................................10
11.10 OTHER COSTS .........................................................................................................................10
12. CONTACTS OF SUPPLIERS AND CONSULTANTS ...............................................................11
13. ANNEXURE .......................................................................................................................................12
13.1 INCOME STATEMENT ............................................................................................................12
13.2 BALANCE SHEET ....................................................................................................................13
13.3 CASH FLOW STATEMENT .....................................................................................................14
13.4 USEFUL PROJECT MANAGEMENT TIPS .............................................................................15
13.5 USEFUL LINKS.............................................................................................................................16
14. KEY ASSUMPTION..........................................................................................................................18
Pre-Feasibility Study (Meat Shop – Rs.1.24 Million)
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the subject. Although, the material included in
this document is based on data/information gathered from various reliable
sources; however, it is based upon certain assumptions which may differ from
case to case. The information has been provided on as is where is basis without
any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been exercised to compile this document,
the contained information may vary due to any change in any of the concerned
factors, and the actual results may differ substantially from the presented
information. SMEDA, its employees or agents do not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to
carry out additional diligence and gather any information which is necessary for
making an informed decision, including taking professional advice from a
qualified consultant/technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 2
2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document/study covers various aspects of project concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in meat shop
business by providing them with a general understanding of the business with the
intention of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and it’s successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any investment decision.
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs" , SMEDA has carried out
‘sectoral research’ to identify policy, access to finance, business development
services, strategic initiatives, institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
4. INTRODUCTION TO SCHEME
Prime Minister’s ‘Small Business Loans Scheme’, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of
01 year grace period, and a debt : equity of 90 : 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,
Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).
5. EXECUTIVE SUMMARY
The demand for meat is rising with growing population. A number of small shops
are operating in almost every residential and commercial area. However, these
shops seldom follow required cleanliness standards; except for those few
recently introduced in high-income group residential areas. With increasing public
awareness of hygiene, the trend is shifting towards neat / clean hygienically
maintained shops. The proposed outlet is expected to cash on this new trend.
The proposed meat shop would supply hygienically processed, quality mutton
and beef. The shop is proposed to be located in a commercial market of
residential area belonging to middle or upper middle-income group. The
projected products available in the shop will include mutton and beef (with bone
and boneless) minced meat, supplied according to the customers requirement.
The total initial project cost for setting up an outlet is estimated at Rs.1.24 million.
The project is proposed to be financed through 90% debt and 10% equity. The
Net Present Value (NPV) is projected around Rs. 1.10 million with Internal Rate
of Return (IRR) of 42% and payback period of 3.11years. The legal business
status of this project will be ‘Sole Proprietorship’.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

In this pre-feasibility study, a meat shop is proposed to sell processed mutton
and beef. Growing health concerns among consumers to purchase hygienic
processed meat has opened up new vistas of opportunities for meat shops
offering hygienic meat.
This business involves purchase of carcass of slaughtered animals from a
slaughterhouse. Contract procurement of animal carcass from reliable suppliers
can be an economical alternative. Mutton is bought on ‘number of animal’
(carcass) basis; each assumed to have weight of around 12 kgs. Beef is

purchased in multiples of 40 kg units. Particular attention would be paid on the
quality of meat purchased. The meat is then cut into pieces or minced in the shop
according to the customer’s demand. It is assumed that 85% of beef would be
sold as beef with bones and 15% would be sold as boneless; however, there
would be reduction in weight of meat due to natural phenomenon of water
content evaporation (2% for mutton and 5% for beef). The shop will operate for 8
hours a day for 350 days per annum. The legal status of the proposed project is
recommended to be sole proprietorship.
7. CRITICAL FACTORS
To establish meat shop business successfully, following critical factors must be
considered:
• Location of shop, preferably in commercial markets of populated areas.
• Ensure good quality of service & supply of clean meat from healthy
animals.
• Carcass should have stamps of authorized veterinarians.
• Shop should be neat and clean with standard tools and equipment.
• The sale of products must be according to the prevailing market price.
8. INSTALLED & OPERATIONAL CAPACITIES

Generally, in this business, installed capacity is reflected by turnover potential in
a given locality, while the shop should be able to store two day’s inventory
requirement. The inventory requirement is based on bulk purchase orders to
cover transportation cost.
In the proposed business, it is assumed that it would have installed capacity to
sale 4,200 mutton carcass (average 12 kg per mutton carcass) and 1,050
maunds of beef per annum (or daily sale of 12 mutton carcass and 3 maunds of
beef in 350 operational days per annum). However, it would be able to start at 65
% capacity in year one. With the 5% annual increase in capacity, the project
would be able to attain the maximum capacity of 95% in year 10.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The location of the shop recommended in this pre-feasibility is in a commercial
market of middle or upper middle-income group residential area. For example in
Lahore, localities such as Model Town, Defence, Cavalry, Gulberg, Johar Town,
Garden Town, WAPDA Town, Faisal Town etc. may be considered for setting up
a meat shop. Similarly any major city of Pakistan including Peshawar,
Rawalpindi, Quetta, Karachi and Faisalabad with similar demography is suitable

for this business.
10. POTENTIAL TARGET MARKETS

The target market is middle and upper middle-income group households,
specifically health conscious individuals, who are particular about purchasing
processed meat from hygienic shops.
11. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial
viability of meat shop under the ‘Prime Minister’s Youth Business Loan’ scheme.
Various cost and revenue related assumptions along with results of the analysis
are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendix
11.1 PROJECT ECONOMICS
The following table shows Internal Rate of Return and payback period;
Table 1: Project Economics

Description Details
Internal Rate of Return (IRR) 42%
Payback Period (yrs) 3.11
Net Present Value (NPV) Rs. 1,108,560
Following table provides details of the equity required and variables related to
bank loan;
Table 2: Project Financing
Description Details
Total Equity (10%) Rs. 123,980
Bank Loan (90%) Rs. 1,115,817
Mark-up to the Borrower (%age/annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Years) 1
11.2 PROJECT COST
Following requirements have been identified for operations of the proposed

business.
Table 3: Capital Investment

Description Amount in Rs.
Building Renovation 169,000
Machinery and Equipment 420,800
Furniture and Fixture 89,200
Office Equipment (Incl. Gen set) 66,000
Pre-operating Costs 24,273
Total Capital Cost 769,273
Upfront Building Rent (6 months) 243,000
Cash 68,443
Raw Material Inventory (2 days) 159,080
Total Working Capital 470,523
Total Investment 1,239,796
11.3 SPACE REQUIREMENT
Following table shows project space requirements and monthly rent;

Table 4: Space Requirement
Space Rent Monthly
Description
(sq. ft) (Rs./ Sq. ft) Rent(Rs.)
Building rental cost / month 180 225 40,500
The shop is required to be renovated at the following cost;
Table 5: Building Renovation Cost
Space Cost per unit

Description Total Cost (Rs.)
(sq. ft.) (Rs.)
Shop renovation cost 180 800 144,000
Neon sign board 25,000 25,000
Total 169,000
11.4 MACHINERY AND EQUIPMENT
Following table provides list of machinery and equipment for the proposed meat
shop;
Table 6: List of Machinery and Equipment
Rate per Unit Total Amount

Description Units
(Rs.) (Rs.)
Cutting Tools and Equipment Lump sum 20,000 20,000
Stainless Steel Meat Chopper 2 2400 4,800
(mutton)
Stainless Steel Meat Chopper 2 3,000 6,000
(beef)
Bone Saw Machine (electric) 1 80,000 80,000
Mincing Machine with Hopper 1 55,000 55,000
(electric)
Weighing Scale 1 10,000 10,000
Display Counter Chiller 1 200,000 200,000
(2 meter front with 16 display
trays at 4 C temperature)
Freezer (medium size) 1 45,000 45,000
Total 420,800
11.5 OFFICE EQUIPMENT
Following office equipment is required;
Table 7: Office Equipment
Units Rate per Unit Total Amount

Description
Required (Rs.) (Rs.)
Telephones 1 1,000 1,000
UPS 1 30,000 30,000
Generator Set (2.5 KVA) 1 35,000 35,000
Total Office Equipment 66,000
11.6 FURNITURE AND FIXTURE
Table 8: Furniture and Fixture

Total
Cost per Unit
Description Units Amount
(Rs.)
(Rs.)
Bracket fans 2 2,500 5,000
Lights 12 350 4,200
Benches for customers 2 5,000 10,000
Air-conditioners (2 ton split) 1 70,600 70,600
Total 89,800
11.7 RAW MATERIAL REQUIREMENTS
Raw material required for meat shop in first year of project is as follow;
Table 9: Raw Material Requirements in Year 1

Weight Meat per Total
Quantity Rate
Description per unit Annum Amount
(Kg) (Rs./Kg)
(Kg) (Kg) (Rs.)
Mutton procurement
12 2,730 32,760 580 19,000,800
(in carcass)
Beef procurement
40 682.5 27,300 300 8,190,000
(in maund)
Total 27,190,800
11.8 HUMAN RESOURCE REQUIREMENT
Following trained human resources are required to run a meat shop;

Table 10: Human Resource Requirement
Description No. of Employees Monthly Salary (Rs.)

Owner/ Manager 1 20,000
Butchers *2 18,000
Total 3
*It is assumed that one trained butcher would handle and process average 100 kgs of meat per
day 35,000 kgs per annum per person.
11.9 REVENUE GENERATION
Table11: Revenue Generation
Sale Price Revenue in First

Description *Quantity (Kg)
(Rs. / Kg) Year (Rs.)
*Mutton sale 650 32,104.80 20,868,120
*Beef boneless sale
380 3,890.25 1,478,295
(15% of total beef)
*Beef with bone sale
320 22,044.75 7,054,320
(85% of total beef)
Total 29,400,735
* The reduction in weight of meat due to water evaporation and loss is assumed to be
2% for mutton and 5% for beef.
The sale price growth rate is assumed to be 10% per annum.
11.10 OTHER COSTS
The essential cost to be borne by the shop is direct electricity and water which is
assumed to be Rs. 420,000 and Rs. 12,000 per annum respectively. The per
annum expense for transportation, communication and promotion is assumed to
be Rs 175,000, Rs. 18,000 and Rs. 14,700 respectively in first year of project.
The expense for maintenance of machinery is assumed to be Rs. 36,000 per
annum.
For miscellaneous (incl. repair and maintenance of tools) and packaging
(polythene bags) expenses, Rs. 36,000 and Rs. 58,040 per annum are allocated
in project.
12. CONTACTS OF SUPPLIERS AND CONSULTANTS
Table 12: Contacts of Suppliers and Consultants
Experts Experts
Dr. Muhammad Abdullah Prof. Dr. Muhammad Younas
Dean, Faculty of Animal Production Department of Livestock Management
University of Veterinary & Animal Faculty of Animal Husbandry
Sciences, Lahore University of Agriculture
Ph: 042 - 99211374 Faisalabad, Pakistan
Ph: 041-9200161-170
Mr. M. Younus Qureshi Director General (Extension)
Red Cow Meat Training Institute Livestock & Dairy Development
125/13-B1, Township, Lahore Department (L&DD), Govt. Of Punjab, 16-
Ph: 042-35112603 Cooper Road, Lahore,
Ph: 042-99201117
Punjab Agriculture and Meat Company
(PAMCO), 5/8 Shaheen Complex,
Egerton Road Lahore
Ph: 042-36370661
Pre-feasibility Study (Meat Shop – Rs.1.24 Million)
13. ANNEXURE
13.1 INCOME STATEMENT
Statement Summaries SMEDA

Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 29,400,735 33,957,849 39,221,316 45,300,619 52,322,215 60,432,159 69,799,143 80,618,011 92,110,665 101,321,731
Cost of goods sold 27,839,040 32,164,830 37,163,218 42,938,813 49,612,497 57,323,956 66,234,599 76,530,945 87,498,804 96,331,279
Gross Profit 1,561,695 1,793,019 2,058,098 2,361,807 2,709,718 3,108,203 3,564,544 4,087,066 4,611,860 4,990,453
General administration & selling expenses

Administration expense 240,000 276,000 317,400 365,010 419,762 482,726 555,135 638,405 734,165 844,290
Rental expense 486,000 534,600 588,060 646,866 711,553 782,708 860,979 947,077 1,041,784 1,145,963
Utilities expense 420,000 462,000 508,200 559,020 614,922 676,414 744,056 818,461 900,307 990,338
Travelling & Comm. expense (phone, fax, etc.) 18,000 19,800 21,780 23,958 26,354 28,989 31,888 35,077 38,585 42,443
Office expenses (stationary, etc.) - - - - - - - - - -
Promotional expense 14,700 16,979 19,611 22,650 26,161 30,216 34,900 40,309 46,055 50,661
Depreciation expense 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050
Amortization expense 4,855 4,855 4,855 4,855 4,855 - - - - -
Miscellaneous expense 36,000 39,600 43,560 47,916 52,708 57,978 63,776 70,154 77,169 84,886
Subtotal 1,285,605 1,419,884 1,569,515 1,736,325 1,922,363 2,125,081 2,356,783 2,615,532 2,904,116 3,224,631
Operating Income 276,090 373,135 488,583 625,482 787,355 983,122 1,207,761 1,471,534 1,707,744 1,765,822
Other income - - - - - - - - - -
Earnings Before Interest & Taxes 276,090 373,135 488,583 625,482 787,355 983,122 1,207,761 1,471,534 1,707,744 1,765,822
Interest expense 92,612 84,787 74,503 63,365 51,303 38,239 24,091 8,769 - -
Earnings Before Tax 183,478 288,348 414,080 562,117 736,052 944,882 1,183,670 1,462,765 1,707,744 1,765,822
Tax - - 1,408 16,212 33,605 64,232 100,050 141,915 189,049 200,664

NET PROFIT/(LOSS) AFTER TAX 183,478 288,348 412,672 545,905 702,447 880,650 1,083,620 1,320,850 1,518,696 1,565,158
Balance brought forward 183,478 471,826 884,497 1,430,402 2,132,849 3,013,500 4,097,119 5,417,970 6,936,665
Total profit available for appropriation 183,478 471,826 884,497 1,430,402 2,132,849 3,013,500 4,097,119 5,417,970 6,936,665 8,501,823
Balance carried forward 183,478 471,826 884,497 1,430,402 2,132,849 3,013,500 4,097,119 5,417,970 6,936,665 8,501,823
13.2 BALANCE SHEET

Balance Sheet
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current assets
Cash & Bank 274,647 482,950 660,441 937,081 1,316,975 1,817,495 2,448,084 3,229,208 4,195,071 5,552,008 8,541,303
Pre-paid building rent 40,500 44,550 49,005 53,906 59,296 65,226 71,748 78,923 86,815 95,497 -
Total Current Assets 470,523 724,906 960,249 1,309,632 1,781,111 2,397,069 3,173,312 4,138,376 5,325,349 6,910,095 8,541,303
Fixed assets
Building/Infrastructure 169,000 160,550 152,100 143,650 135,200 126,750 118,300 109,850 101,400 92,950 84,500
Furniture & fixtures 89,200 80,280 71,360 62,440 53,520 44,600 35,680 26,760 17,840 8,920 -
Office equipment 66,000 59,400 52,800 46,200 39,600 33,000 26,400 19,800 13,200 6,600 -
Total Fixed Assets 745,000 678,950 612,900 546,850 480,800 414,750 348,700 282,650 216,600 150,550 84,500
Intangible assets
Pre-operation costs 24,273 19,419 14,564 9,709 4,855 - - - - - -
Total Intangible Assets 24,273 19,419 14,564 9,709 4,855 - - - - - -
TOTAL ASSETS 1,239,796 1,423,274 1,587,713 1,866,192 2,266,765 2,811,819 3,522,012 4,421,026 5,541,949 7,060,645 8,625,803
Liabilities & Shareholders' Equity

Current liabilities
Short term debt - - - - - - - - - - -
Total Current Liabilities - - - - - - - - - - -
Other liabilities
Deferred tax - - - - - - - - - - -
Long term debt 1,115,817 1,115,817 991,908 857,715 712,383 554,990 384,532 199,927 - - -
Total Long Term Liabilities 1,115,817 1,115,817 991,908 857,715 712,383 554,990 384,532 199,927 - - -
Shareholders' equity
Paid-up capital 123,980 123,980 123,980 123,980 123,980 123,980 123,980 123,980 123,980 123,980 123,980
Retained earnings - 183,478 471,826 884,497 1,430,402 2,132,849 3,013,500 4,097,119 5,417,970 6,936,665 8,501,823
Total Equity 123,980 307,458 595,805 1,008,477 1,554,382 2,256,829 3,137,479 4,221,099 5,541,949 7,060,645 8,625,803
TOTAL CAPITAL AND LIABILITI 1,239,796 1,423,274 1,587,713 1,866,192 2,266,765 2,811,819 3,522,012 4,421,026 5,541,949 7,060,645 8,625,803
Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0
- - - - - - - - - - -
13.3 CASH FLOW STATEMENT

- - - - - - - - - - -

Cash Flow Statement
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit - 183,478 288,348 412,672 545,905 702,447 880,650 1,083,620 1,320,850 1,518,696 1,565,158
Add: depreciation expense - 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050 66,050
amortization expense - 4,855 4,855 4,855 4,855 4,855 - - - - -
Deferred income tax - - - - - - - - - - -
Pre-paid building rent (40,500) (4,050) (4,455) (4,901) (5,391) (5,930) (6,523) (7,175) (7,892) (8,682) 95,497
Cash provided by operations (195,876) 208,303 301,400 410,834 525,225 657,913 801,046 965,729 1,165,790 1,356,937 2,989,295
Financing activities
Change in long term debt 1,115,817 - (123,909) (134,193) (145,331) (157,394) (170,457) (184,605) (199,927) - -
Change in short term debt - - - - - - - - - - -
Issuance of shares 123,980 - - - - - - - - - -
Cash provided by / (used for) financ 1,239,796 - (123,909) (134,193) (145,331) (157,394) (170,457) (184,605) (199,927) - -
Investing activities
Capital expenditure (769,273) - - - - - - - - - -
Cash (used for) / provided by invest (769,273) - - - - - - - - - -
NET CASH 274,647 208,303 177,491 276,640 379,894 500,519 630,589 781,124 965,863 1,356,937 2,989,295
Cash balance brought forward 274,647 482,950 660,441 937,081 1,316,975 1,817,495 2,448,084 3,229,208 4,195,071 5,552,008
Cash available for appropriation 274,647 482,950 660,441 937,081 1,316,975 1,817,495 2,448,084 3,229,208 4,195,071 5,552,008 8,541,303
Cash carried forward 274,647 482,950 660,441 937,081 1,316,975 1,817,495 2,448,084 3,229,208 4,195,071 5,552,008 8,541,303
13.4 USEFUL PROJECT MANAGEMENT TIPS
Technology
• List of Machinery &Equipment (As per Section 11.4)
• List of Office Equipment(As per section 11.5)
• Required spare parts & consumables: Suppliers credit agreements and
availability as per schedule of maintenance should be ensured before start of
operations
• Energy Requirement: Should not be overestimated or installed in excess and
alternate source of energy for critical operations be arranged in advance
• Machinery Suppliers: Should be asked for training and after sales services
under the contract
• Quality Assurance Equipment & Standards: Quality standards need to be
defined and a mechanism to check them should be developed for improving
quality
Marketing
• Product Development & Packaging: Experts’ help may be sought for product /
service and design & development
• Advertisement & Promotion: Business promotion and dissemination through
banners and launch events is highly recommended. Product brochures should be
developed from good quality service providers.
• Sales & Distribution Network: Experts’ advice and distribution agreements
should be sought for developing the sales and distribution network.
• Price / Bulk Discounts, Cost Plus Introductory Discounts: Pricing decisions
should never compromise quality of the products. Price during introductory phase
may be kept lower and used as promotional tool. Product cost estimates should
be carefully documented before price setting. Government controlled prices need
to be displayed, as required.
Human Resources
• List of Human Resource Required (As per section 11.8)
• Adequacy & Competencies: Skilled and experienced staff should be considered
an as assets of the business and investments should be made in developing and
motivating them through various means and incentives.
• Performance Based Remuneration: Efforts to manage human resource cost
should be focused through performance measurement and performance based
compensation.
• Training & Skill Development: Encouraging training and skill development of

self & employees through experts and exposure to best practices helps in
continuous improvement in the business. Least cost options for Training and Skill
Development (T&SD) should be developed and linked with compensation benefits
and awards.
13.5 USEFUL LINKS
• Prime Minister’s Office, www.pmo.gov.pk

• Small & Medium Enterprises Development Authority (SMEDA),
www.smeda.org.pk
• Government of Pakistan, www.pakistan.gov.pk
• Ministry of Industries & Production, www.moip.gov.pk
• Ministry of National Food Security & Research, www.mnfsr.gov.pk
• Ministry of Education, Training & Standards in Higher Education,
www.moptt.gov.pk
• Government of Punjab, www.punjab.gov.pk
• Government of Sindh, www.sindh.gov.pk
• Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
• Government of Balochistan, www.balochistan.gov.pk
• Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
• Government of Azad Jammu & Kashmir, www.ajk.gov.pk
• Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
• Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk
• Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
www.fpcci.com.pk
• Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, www.pbit.gop.pk
• Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center,
Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk
• State Bank of Pakistan (SBP), www.sbp.org.pk
• National Bank of Pakistan (NBP), www.nbp.com.pk
• First Women Bank Limited (FWBL), www.fwbl.com.pk
• All Pakistan Meat Exporters and Processors Association, Lahore,
www.apmepa.com
• National Vocational and Technical Training Commission (NAVTTC) Head
Quarter, Islamabad, www.navttc.org
• Red Cow Meat Training Institute, www.rcmti.edu.pk
• Halal Research Council, 192- Ahmad Block, New Garden Town, Lahore, Tel:
0423-5913227-8, www.halalrc.org
• Punjab Agriculture and Meat Company (PAMCO), Lahore, www.pamco.bz
• Pakistan Agricultural Research Council (PARC), Islamabad Tel. 051-9203966

www.parc.gov.pk
• National Agricultural Research Centre (NARC), Islamabad Tel. 051-9255061,
www.parc.gov.pk
• University of Agriculture, Faisalabad, www.uaf.edu.pk
• Lasbela University of Agriculture, Water & Marine Sciences,
Lasbelawww.luawms.edu.pk
• Sindh Agriculture University, Tondojam, www.sau.edu.pk
• Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk
• KPK Agricultural University, Peshawar, www.aup.edu.pk
• PirMehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk
• University College of Veterinary & Animal Sciences, Islamia University
Bahawalpur (IUB), www.iub.edu.pk
• University of Veterinary & Animal Sciences (UVAS), Lahore, www.uvas.edu.pk
• BahauddinZakariya University (BZU), Multan, www.bzu.edu.pk
• Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
• Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7
• Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
• Agriculture & Livestock Department, Government of KPK,
www.khyberpakhtunkhwa.gov.pk
• Livestock & Dairy Development, Government of Balochistan,
www.balochistan.gov.pk
14. KEY ASSUMPTION
Table 13: Operational Assumptions

Mutton
Mutton (Maximum number of carcass) 4,200
Average meat per carcass (kgs) 12
Beef
Beef – in maund 1,050
No. of kg per maund 40
% of boneless beef in total beef 15%
% of with bone beef in total beef 85%
Days operational per year 350
Capacity utilization in first year 65%
Production capacity utilization growth rate per annum 5%
Maximum capacity utilization (year 10) 95%
Table 14: Revenue Assumptions
Sales price
Mutton Rs. 650
Boneless beef Rs. 380
Beef with bone Rs. 320
Sales price growth rate 10%
Table 15: Expense Assumptions
Communication expense (per month) Rs. 1,500
Miscellaneous expense (per month) Rs. 3,000
Transportation expense (per day) Rs. 500
Promotional expense (% of revenue) 0.05%

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Pre-Feasibility Study

Small and Medium Enterprises Development Authority

2. PURPOSE OF THE DOCUMENT

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

(carcass) basis; each assumed to have weight of around 12 kgs. Beef is

8. INSTALLED & OPERATIONAL CAPACITIES

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Rawalpindi, Quetta, Karachi and Faisalabad with similar demography is suitable

10. POTENTIAL TARGET MARKETS

11. PROJECT COST SUMMARY

11.1 PROJECT ECONOMICS

Table 1: Project Economics

11.2 PROJECT COST

Following requirements have been identified for operations of the proposed

Table 3: Capital Investment

11.3 SPACE REQUIREMENT

Following table shows project space requirements and monthly rent;

The shop is required to be renovated at the following cost;

Table 5: Building Renovation Cost

Space Cost per unit

11.4 MACHINERY AND EQUIPMENT

Rate per Unit Total Amount

11.5 OFFICE EQUIPMENT

Following office equipment is required;

Table 7: Office Equipment

Units Rate per Unit Total Amount

11.6 FURNITURE AND FIXTURE

Table 8: Furniture and Fixture

11.7 RAW MATERIAL REQUIREMENTS

Table 9: Raw Material Requirements in Year 1

11.8 HUMAN RESOURCE REQUIREMENT

Following trained human resources are required to run a meat shop;

Description No. of Employees Monthly Salary (Rs.)

11.9 REVENUE GENERATION

Table11: Revenue Generation

Sale Price Revenue in First

11.10 OTHER COSTS

12. CONTACTS OF SUPPLIERS AND CONSULTANTS

Table 12: Contacts of Suppliers and Consultants

13.1 INCOME STATEMENT

Statement Summaries SMEDA

General administration & selling expenses

Tax - - 1,408 16,212 33,605 64,232 100,050 141,915 189,049 200,664

13.2 BALANCE SHEET

Statement Summaries SMEDA

Liabilities & Shareholders' Equity

13.3 CASH FLOW STATEMENT

Statement Summaries SMEDA

13.4 USEFUL PROJECT MANAGEMENT TIPS

• Training & Skill Development: Encouraging training and skill development of

13.5 USEFUL LINKS

• Prime Minister’s Office, www.pmo.gov.pk

• Pakistan Agricultural Research Council (PARC), Islamabad Tel. 051-9203966

14. KEY ASSUMPTION

Table 13: Operational Assumptions

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