A business plan of RO Purifiers manufacturing and

selling.

“Water Solutions Private Limited”

Submitted to
Mr. Sriranga Vishnu
By PGP Group 10
 Shivani
 Randhir
 Rashid
 Vishwanath
 I. Executive summary

Nearly one billion people all over the world do not have access to safe drinking “WATER Solutions
Ltd. It is estimated that around 37.7 million Indians are affected by waterborne diseases annually.
Our Team, comprising of students from Chandragupt Institute of Management, Patna aims
supplying of low cost RO-UV Systems to the households so that people of lower middle class and
upper middle class gets the opportunity of getting safe drinking water.
.
We intend to start the pilot program of “WATER Solutions at the city of Patna, nearby towns and
then spread to other locations across Bihar and then other parts of India. The Patna city has
houses around 100000 plus houses.. People consumed the contaminated water as only some of
them could afford purification techniques or were not aware of it. Also another group of people do
not feel the need of filtering the water. Hence we intend to address the issue by providing a low
cost water purification system using indigenous materials such that the system is easy to maintain
and use.

II. Management Team

The team consists of two students of management at Chandragupt institute of

management Patna.
 Shivani Narayan
 Rashid Hussain
 Randhi Kumar
 Vishwanath Shukla
We have done the delegations of work and also decided that the initial capital will be
brought from ourselves and if needed further we will be going for loan from banks and
initial funding amount will around 2lacs per person.

Need and Objective of our Startup:

According to the WHO report, around 37.7 million Indians are affected by waterborne diseases
annually, 1.5 million children are estimated to die of diarrhoea alone and 73 million working days
are lost due to waterborne disease each year.

The provision of clean drinking water has been given priority in the Constitution of India, with
Article 47 conferring the duty of providing clean drinking water and improving public health
standards to the State. To tackle these problem we are introducing this project so that every person
gets safe drinking water and there is huge opportunity for us as people are more conscious about
their health and many people are getting aware of it. Our advantages is that we are manufacturing
the plants so intermediary cos and whole profits are for us.
 Objective:
 To sell 1000 RO water purifiers
 To develop a sustainable in water purification industry
 Provide valuable services to our consumers
 Enhancing the business prospects by spreading the word among prospective buyers
 To create service based company whose primary goal is to exceed customers expectations
 The utilization of recourses available to the company

The process of Reverse Osmosis :

Reverse osmosis (RO) is a water purification technology that uses a semi permeable to remove
larger particles from drinking water. In reverse osmosis, an applied pressure is used to
overcome osmotic pressure, a colligative property,that is driven by chemical potential,
a thermodynamic parameter. Reverse osmosis can remove many types of molecules and ions from
solutions, including bacteria, and is used in both industrial processes and the production of potable
water.

Such systems typically include a number of steps:

 a sediment filter to trap particles, including rust and calcium carbonate

 optionally, a second sediment filter with smaller pores
 an activated carbon filter to trap organic chemicals and chlorine, which will attack and degrade thin
film reverse osmosis membranes
 a reverse osmosis filter, which is a thin film composite membrane
 optionally, a second carbon filter to capture those chemicals not removed by the reverse osmosis
membrane
 optionally an ultraviolet lamp for sterilizing any microbes that may escape filtering by the reverse
osmosis membrane
 latest developments in the sphere include nano materials and membranes
Market Analysis:

Water purifications is new market and is in developing phase and the major competitor is Eureka
Forbes, Pure it, TATA Swach, Philips, etc but these company are focusing on metro and some
metropolitan cities only and also to customer whose income is bit higher than average income of the
countries and concluding we can say that the company are targeting the higher end costumer only. Our
company will focus on lower middle class and middle class people in its first phase.
Key to success:

1. Sell each unit at profit

2. Continue to reduce overhead cost
3. Develop new product nd maintain high quality for existing products
4. Find and retain high value customer
5. Create and maintain high value of customer satisfaction

Type of ownership:

The company is a partnership firm and the capital is also same so the profit and contribution will be
equal to the company.

Sales and Marketing:

This will be headed Mr. Randhir Kumar who is also the partner in the firm and according to some
survey and market analysis he has decided the following method for marketing promotions.

1. Telemarketing: our receptionist will be given the lead collected by our sales team and he will be
calling to those costumers for and get their requirement.
2. Pamphlet: Pamphlet will be distributed across the city to each and every household, office.
3. Local magazines: Ads will be printed in local magazines

Products and Services:

 Simple R O Plant
 Manual R O Plant
 Auto R O Plant
 Compaq R O Plant

Pricing

Models Price
Simple R O Plant RS 3500

Manual R O Plant RS 3700

Auto R O Plant RS 4000

Dolphin R O Plant RS 5800

Compaq R O Plant RS 6000
Research and Development:

Our company has also planning to have R&D department this department is headed by Mr.
Rashid Hussain because we are planning to expand our company to fields like Tank Cleaning
services, industry purifiers systems, sludge treatment and other specialized field.

Operations of the Company:

The company’s operations are handled by Ms. Shivani Narayan the third partner all the
coordination between various departments, purchase of raw materials, after sales services and
other major operations will be under her only.

Finance Departments:

Finance matters are handled by Mr. Vishwanath Shukla he will be responsible for all taxes
pricing of product, legal matters like licensing and registrations, preparations of finals accounts
etc.

Sales Forecast:

The company is intended to sell on average 650 filters which comprises all the models in first
year of incorporation and then 30% growth in the next year so that it can earn decent revenue
and also able to make its mark in the society .

Sales Forecast For Three Years.

Second
Sr.No. Models Qty. Price First Year Year Third Year
Simple RO
1 Plant 175 3500 612500 796250 1035125
Manual R O
2 Plant 175 3700 647500 841750 1094275
Auto R O
3 Plant 150 4000 600000 780000 1014000
Compaq R
5 O Plant 125 6000 750000 975000 1267500
Total 625 2610000 3393000 4410900
 5000000
4500000
4000000
3500000
3000000
2500000 First Year
2000000
Second Year
1500000
1000000 Third Year
500000
0
Simple Manual Auto R O Dolphin Compaq Total
RO PlantR O Plant Plant R O PlantR O Plant
1 2 3 4 5

Initial Requirement for Funds:

Sr.
No. Particulars Cost
1 Office 10000
2 Raw materials 500000
3 Machinery 600000
4 Primary and Preliminary 120000
Total 1800000
 Raw Materials Required For First three year

Sr. Monthly
No. Details Requirements Year 1 year 2 Year 3
1 Candle Pump 33333.34 400000 520000 676000
2 Inline Candle Set 20833.34 250000 325000 422500
3 HC Adopter 12500 150000 195000 253500
4 Spanch 3333 39996 51994.8 67593.24
5 Auto Circuit 25000 300000 390000 507000
6 Bowl 25000 300000 390000 507000
7 Valve 13333 159996 207994.8 270393.2
8 Dampner 12500 150000 195000 253500
Total 145832.7 1749992 2274990 2957487

Funding of the Project:

The project will be partially funded by four partners and partially by loan by bank loan. The loan was
taken under government scheme hence the interest on loan is low .

Salaries and Wages:

The staffing will be done on contractual basis and the company will try to expand in first 3 years hence
the drawings by partners is not high hence they are only withdrawing required amount and the rest is
invested again in the business .

Financial Analysis:

Projected Profit and Loss Account

INCOME
Year 1 Year 2 Year 3 Year 4 Year 5

Revenue

Simple RO Plant 612,500.00 686,000.00 850,640.00 1,156,870.40 1,712,168.19

Manual R O Plant 647,500.00 725,200.00 899,248.00 1,222,977.28 1,810,006.37

Auto R O Plant 600,000.00 672,000.00 833,280.00 1,133,260.80 1,677,225.98

Compaq R O Plant 750,000.00 840,000.00 1,041,600.00 1,416,576.00 2,096,532.48

 Total revenue 2,610,000.00 2,923,200.00 3,624,768.00 4,929,684.48 7,295,933.03

Cost of Sales

Simple RO Plant 306,250.00 327,687.50 373,563.75 452,012.14 578,575.54

Manual R O Plant 226,625.00 242,488.75 276,437.18 334,488.98 428,145.90

Auto R O Plant 210,000.00 224,700.00 256,158.00 309,951.18 396,737.51

Compaq R O Plant 300,000.00 321,000.00 365,940.00 442,787.40 566,767.87

Cost of goods sold 1,042,875.00 1,115,876.25 1,272,098.93 1,539,239.70 1,970,226.82

Gross Profit 1,567,125.00 1,807,323.75 2,352,669.08 3,390,444.78 5,325,706.22

Non-Operation Income

Rental - - - - -

Interest income - - - - -
Loss (gain) on sale of
- - 1,000.00 - -
assets
Other income (specify) - - - - -

Total Non-Operation Income - - 1,000.00 - -

TOTAL INCOME 1,567,125.00 1,807,323.75 2,353,669.08 3,390,444.78 5,325,706.22

EXPENSES

Operating expenses

Sales and marketing 150,000.00 160,500.00 182,970.00 221,393.70 283,383.94

Depreciation 32,000.00 19,260.00 22,169.58 26,427.61 31,208.96

Insurance 7,500.00 8,025.00 9,148.50 11,069.69 14,169.20

Payroll and Payroll Tax 21,000.00 22,470.00 25,615.80 30,995.12 39,673.75

 Property taxes 2,500.00 2,675.00 3,049.50 3,689.90 4,723.07
Maintenance, repair, and
90,000.00 96,300.00 102,600.00 108,900.00 115,200.00
overhaul
Utilities 5,000.00 5,350.00 6,099.00 7,379.79 9,446.13

Administrative fees 3,000.00 3,210.00 3,659.40 4,427.87 5,667.68

Interest expense on long-
66,702.08 58,134.32 48,281.38 36,950.51 23,920.00
term debt
Other 1,000.00 1,070.00 1,219.80 1,475.96 1,889.23

Total operating expenses 378,702.08 376,994.32 404,812.96 452,710.14 529,281.95

Non-Recurring Expenses

Unexpected Expenses - - - -

Other expenses - - - - -

Total Non-Recurring
- - - - -
Expenses

TOTAL EXPENSES 378,702.08 376,994.32 404,812.96 452,710.14 529,281.95

TAXES

Income Tax 356,526.88 429,098.83 584,656.83 881,320.39 1,438,927.28

Other Tax (specify) - - - - -

TOTAL TAXES 356,526.88 429,098.83 584,656.83 881,320.39 1,438,927.28

NET PROFIT 831,896.04 1,001,230.60 1,364,199.28 2,056,414.25 3,357,496.99

 Forecasted Balance Sheet For Next Five Years:

ASSETS
Initial
Current Assets Year 1 Year 2 Year 3 Year 4 Year 5
balance

Cash and short-term

1,056,777.59 2,040,641.97 3,315,591.68 5,272,594.51 8,597,788.92
investments 250,000.00
Accounts receivable 10,000.00 10,000.00 7,235.00 6,205.00 7,059.00 5,350.00
Total inventory 54,000.00 54,000.00 54,000.00 54,000.00 54,000.00 54,000.00
Prepaid expenses - - - - - -
Deferred income tax - - - - - -
Other current assets 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00

Total current assets 1,125,777.59 2,106,876.97 3,380,796.68 5,338,653.51 8,662,138.92

319,000.00

Initial
Property and Equipment Year 1 Year 2 Year 3 Year 4 Year 5
balance

Buildings 20,000.00 20,000.00 27,235.00 39,205.00 51,910.00 65,350.00

Land 160,000.00 167,235.00 179,205.00 191,910.00 205,350.00
160,000.00
Capital improvements - - - - - -
Machinery and equipment 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00
300,000.00
Less Accumulated
32,000.00 51,260.00 73,429.58 99,857.19 131,066.15
depreciation expense

Total Property and Equipment 448,000.00 443,210.00 444,980.42 443,962.81 439,633.85

480,000.00

Initial
Other Assets Year 1 Year 2 Year 3 Year 4 Year 5
balance

Goodwill - - - - - -
Deferred income tax - - - - - -
Long-term investments - - - - - -
Deposits 3100 103000 64235 101205 163910 102350
 Other long-term assets - - - - - -

Total Other Assets 3,100.00 103,000.00 64,235.00 101,205.00 163,910.00 102,350.00

TOTAL ASSETS 802,100.00

1,676,777.59 2,614,321.97 3,926,982.10 5,946,526.32 9,204,122.77

LIABILITIES
Initial
Current Liabilities Year 1 Year 2 Year 3 Year 4 Year 5
balance

Accounts payable 2,000.00 2,000.00 11,235.00 23,205.00 35,910.00 49,350.00

Accrued expenses - - - - - -
Notes payable/short-term
- - - - - -
debt
Capital leases - - - - - -
Other current liabilities 100.00 100.00 100.00 100.00 100.00 100.00

Total Current Liabilities 2,100.00 2,100.00 11,335.00 23,305.00 36,010.00 49,450.00

Initial
Debt Year 1 Year 2 Year 3 Year 4 Year 5
balance

Long-term debt/loan 442,881.55 377,195.33 301,656.17 214,786.14 114,885.61

500,000.00
Other long-term debt - - - - - -

Total Debt 444,981.55 388,530.33 324,961.17 250,796.14 164,335.61

502,100.00

Initial
Other Liabilities Year 1 Year 2 Year 3 Year 4 Year 5
balance

Other liabilities (specify) - 99,900.00 92,665.00 80,695.00 67,990.00 54,550.00

Other liabilities (specify) - - - 24,000.00 74,000.00 74,000.00

Total Other Liabilities - 99,900.00 92,665.00 104,695.00 141,990.00 128,550.00

TOTAL LIABILITIES 502,100.00

544,881.55 481,195.33 429,656.17 392,786.14 292,885.61

EQUITY

Initial
Year 1 Year 2 Year 3 Year 4 Year 5
balance
Owner's equity (common) 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
Paid-in capital 250,000.00 250,000.00 250,000.00 250,000.00 250,000.00
250,000.00
Preferred equity - - - - - -
Retained earnings - 831,896.04 1,833,126.65 3,197,325.93 5,253,740.18 8,611,237.16
TOTAL EQUITY 300,000.00
1,131,896.04 2,133,126.65 3,497,325.93 5,553,740.18 8,911,237.16

TOTAL LIABILITIES AND

1,676,777.59 2,614,321.97 3,926,982.10 5,946,526.32 9,204,122.77
EQUITY 802,100.00

Cash Flow Statement:

Operating
year 2016 Year 2017 Year 2018 Year 2019 7/12/1905 Total
activities

Net
831,896.04 1,001,230.60 1,364,199.28 2,056,414.25 3,357,496.99 8,611,237.16
income
Depreciati
32,000.00 19,260.00 22,169.58 26,427.61 31,208.96 131,066.15
on
Accounts
- 2,765.00 1,030.00 - 854.00 1,709.00 4,650.00
receivable
Inventorie
- - - - - -
s
Accounts
- - 9,235.00 - 11,970.00 - 12,705.00 - 13,440.00 - 47,350.00
payable
Amortizat
- - - - - -
ion
Other
- - - - - -
liabilities
Other
operating cash - - - - - -
flow items

Total
operating 863,896.04 1,014,020.60 1,375,428.86 2,069,282.86 3,376,974.95 8,699,603.31
activities

Investing
Year 1 Year 2 Year 3 Year 4 Year 5 Total
activities
 Capital
- - 14,470.00 - 23,940.00 - 25,410.00 - 26,880.00 - 90,700.00
expenditures
Acquisitio
- - - - -
n of business
Sale of
- - - 1,000.00 - - - 1,000.00
fixed assets
Other
investing cash - - - - - -
flow items

Total
investing - - 14,470.00 - 24,940.00 - 25,410.00 - 26,880.00 - 91,700.00
activities

Financing
Year 1 Year 2 Year 3 Year 4 Year 5 Total
activities

Long-term
- 57,118.45 - 65,686.22 - 75,539.15 - 86,870.03 - 99,900.53 - 385,114.39
debt/financing
Preferred
- - - - - -
stock
Total cash
- - - - - -
dividends paid
Common
- - - - - -
stock
Other
financing cash - - - - - -
flow items

Total
financing - 57,118.45 - 65,686.22 - 75,539.15 - 86,870.03 - 99,900.53 - 385,114.39
activities

Cumulative
806,777.59 933,864.38 1,274,949.70 1,957,002.83 3,250,194.41 8,222,788.92
cash flow

Beginning
250,000.00 1,056,777.59 1,990,641.97 3,315,591.68 5,272,594.51
cash balance
 Ending cash
1,056,777.59 1,990,641.97 3,315,591.68 5,272,594.51 8,522,788.92
balance

Notes and Assumptions:

1. Notes supplier of raw materials is ready to give goods on three months credits
2. Our sales team is working on contractual basis and their salaries is calculated on day to day basis.
3. In second year we are trying to expand our work area to nearby towns and cities.
4. Loan is taken from bank and it is under a government scheme so the interest is very low.