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Where the fragrance says it all...
SUBMITTED BY : Zeeshan Asghar SUBMITTED To: SIR Shabeer SUBMISSION DATE: 29TH APRIL,2005-06-28 FLORAL SHOP COMPLEX IN SECTOR E-8, NAVAL
TABE OF CONTENTS
Introduction………………………………………………………..4 Executive summary………………………………………………5 Vision & mission statement………………………………..6-7 Company overview……………………………………………….8 Product plan………………………………………………………12 Marketing plan……………………………………………………13 Management plan……………………………………………….16 Operating plan……………………………………………………18 Financial plan…………………………………………………….23 Layout…………... …………………………………………………...32
NAME: MOMENTS BUSINESS: FLORAL SHOP PRODUCT: FLOWERS LOCATION:
NAVAL MARKET, E-8 MARKAZ NAME OF THE OWNER: Ahmed Raza Khan ADDRESS: F-22 SHAHJAHAN ROAD, SECTOR E-8 NAVAL COMPLEX ISLAMABAD. PHONE NO: 0333-65601342
This business plan is written with an idea to open up a floral shop in the territory of Islamabad. The business I have chosen is floral shop situated in sector E-8, naval complex, Islamabad. I believe that the location of the shop can make or break the florist business. The shop must be situated in an area conveniently located for the customers. It the shop that aims to bring a difference to Islamabad’s floral market. It will offer all types of flowers at a very reasonable price. Since it will be in sector E-8 and there is no any other floral shop in this sector and also in sector E-9 and E-7 so in this way it has got competitive edge. Strengths have been recognized to make its opportunities productive and worthwhile. Weaknesses and threats will be dealt with on these bases. Even if they cannot be countered, moments will try to use its strengths and opportunities so that it can overcome these. For example, it has strength in the sense that its owner would be a business professional and it can avail the opportunity that it’s located in quite a central location and in a location where there is no any floral shop. Floral shop will market extensively, using flyers, banners, discount coupons etc so as to attract a lot of people. Launch would be important, as it would be supposed to create a lot of hype. Prices will be kept reasonable and negotiable with bigger clients. It will know how to deal with the customers. This is a customeroriented business and it will be facing public all the time. Quality would be an important part of moments. Quality and freshness would be stressed upon. The decision regarding which sources of supply to use would depend on quality and not so much on costs. Employees would be provided with proper requirement. Freshness and durability instructions would be put all around.
To provide products of superior quality and value that will leave a pleasant and soothing effect on our customers.
Moments is committed to provide product quality and service excellence. It aims to operate around the concept of surpassing expectations of customers by providing them the fresh and fragrant flowers.
I have innate artistic ability in creating wonderful floral arrangements that’s why I consider starting a florist shop business. Moments is a floral shop situated in E-8, naval complex and it’s a product organization. So the type of a company is retailing.
Flowers are a big part of people’s lives. Every occasion is celebrated with flowers. A florist business goes beyond selling flowers. The key element in this floral business is the knowledge and skills in the floral design. The firm is committed to provide quality service to its customer at affordable price. There would be about two employees initially who would work as a team and will be trained and ultimately rewarded to cooperate and work for company benefit. Moments will aim to look after them as well as it can, providing them benefits and other incentives. A system of internal control would be devised for efficient and effective management. Assets would be purchased and other sources of finance to the business would be equity and a loan from SME Bank. A major part of the profit would be ploughed back into the business for growth in accordance with its vision. The firm is committed to provide quality service to its customer at affordable price. To ease our customer by providing them quality service. The layout will be simple but attractive, gives an everlasting impression to the customers. On both the sides there will be arrangement of flowers and in front there would be reception and on one side of reception there would be freezer and the other side would be necessities to cut down the flowers. The company’s focused on: ♦ Quality product ♦ Offered at affordable price ♦ Present with innovative ideas
The current status of the business is start up. It still has to establish itself in the market. It might face some problems too, but extensive planning is being done to deal with that sort of uncertainty and risk. OBJECTIVES: To develop a new strategy to enhance the image of the product into minds of the consumers. To serve quality features the customers. To provide an opportunity to grow to whomever works for the business To cater for the demands of the price and quality conscious people. To achieve the position of a market leader and retain it. To satisfy the needs of the customers. To gain an edge over competition. The location it chooses must have sufficient drive-by and walk-by traffic. It needs to Check its budget and then try to find best possible location that it can afford. The location of the shop can make or break the florist business. The shop must be situated in an area conveniently located for the customers. Aside from cost other factors that you must consider in finding the best location for your floral business are: Proximity to primary customers Availability of parking facilities Opportunities for future expansion Neighborhood quality Personal convenience The income of a floral business depends on local need, competition, skills, and most importantly location.
IMPORTANCE OF BUSINESS PLAN: Every Business needs a good business plan. Business Planning is one of the most important and sometimes most difficult challenges that most entrepreneurs face. A business plan is a road map of your business. It outlines where you are, where you want to go and how you will get there. The objectives of writing a business plan could be, to raise capital or to understand and control you business more effectively. Most professional companies continue to create business plans (quarterly/annually etc.) throughout the life of the business. The process of creating a business plan gives you great insight into the financial viability of your business besides setting a timetable for your operations. ESSENCE OF A FLORAL SHOP: As a florist (floral designer or flower shop owner), you will be surrounded by beauty every day and have a career that is fun and interesting. You will have a hands-on job that gives you a sense of satisfaction with the results of your work. If you start your own florist business you can enjoy the freedom and financial rewards of being your own boss. As a florist you will be involved with some of the most significant moments in people’s lives. From birthdays to bar mitzvahs to just because, florists help people show they care. No matter what the occasion, there are flowers to go with it. The flower business is more than arranging flowers. You need to know how business runs from buying, selling, keeping records, planning profits, managing costs, and attracting customers. You need to balance the creative side of the florist business with the business management side. A pleasant personality is must. Repeat business normally accounts for a high percentage of florist sales, so it is imperative that you know how to cultivate customer relationship.
The product of moments mainly includes flowers and in flowers it got bouquet, bunch, flower basket, and buds. It gives the option to customer whether to have bunch, bouquet, or make arrangement of flowers by their own choice. Flowers are a big part of people’s lives. Every occasion is celebrated with flowers. A florist business goes beyond selling flowers. The key element in the floral business is the knowledge and skills in the floral design. People will buy flowers to: Express love with an elegant box of long-stemmed roses for Valentine’s Day Welcome a new baby into the world with arrangements of delicate pink and blue flowers Honor mom with a beautiful bouquet on Mother's Day Celebrate a wedding with custom-designed bouquets and other flowers Enjoy holiday occasions with items such as poinsettia plants and pine wreaths at Christmas Brighten someone's stay in a hospital Add the perfect touch to parties and other events Remember loved ones with beautiful floral funeral tributes Preparing for Your Florist Career Essential skills for florists and how to develop them
Educational programs for florists (no degree or certificate is required) Ways to teach yourself floral design Information about dozens of the most commonly used flowers, greens and household plants you need to know, with: Description A list of tools, equipment and supplies you'll need in your flower shop, and where to get them. Setting up your flower shop (including how to create displays to promote sales) How to find and work with growers and wholesalers that can supply you with flowers Managing your flower shop Setting your prices Hiring employees How to organize the day's orders What to do when a shipment of flowers arrives Options for delivering flowers to customers The material you will need for florist services include: A store or sales location A refrigeration system Flowers Plants Floral suppliers
The societal marketing holds that the organization should determine the needs, wants and interests of the target market. It should even deliver superior value to the customers in a way that maintains or improves the customers well being. Moments target market will be the people who have got the strong emotions and feelings and who try to show there and express their feeling interms of flowers. However, special emphasis will be lid on the youth, while planning and implementing the marketing strategy. The target market of moments will be E-8, E-9 and F-8. This is because there is no floral shop in these sectors, except in F-8, which is also not on big scale. Thus the firm is targeting the mass market i.e. people form all age groups and any income level will include in a firm target market. As it will be only shop in sector E-8, which is a full fledge market and people do come there very frequently for shopping. And even in sector E-9 and sector E-7 there is no any floral shop also in sector F-8 the shop there exist is on very small scale. So in this way floral shop in sector E-8 has got competitive edge. At the same time the pricing strategies would be a competitive advantage as the customers can have the flowers at a very reasonable rate within an easy approach. The flowers will be brought from the main head of flowers where the employees go and collect them in huge amount. The reason for this is that in Islamabad there is no as such proper place for getting flowers. There is only one place where we can get flowers, sihala end even there, there is no any variety of flowers. Therefore I would like to prefer to bring up flowers from: Patooki chakree Profile of the average customers to moments Income group above RS 20000. Residing in or around E- 8. Quality conscious. Who love fresh flower People with strong emotions and deep feelings Who cant express through words but through flowers
The major competitor of moments includes the flower shop of F-8. The reason behind is that there is no flower shop in E-8, E-9. Also the shop in F-8 is not exactly a good shop. But as far as F-7 sector is concerned, obviously it will face a competition.
MARKETING STRATEGY: 4PS
PRODUCT AND PLACE:
The mainly product offered by moments would be purely related with flowers. It includes all the arrangements of flowers like making bouquet, arranging buds, cutting flowers, making bunch and flower baskets. Place would be E-8 Markaz. There is a big parking lot and good enough road, plus it is a commercial area. All these advantages summed up mean that the place is good and all that moments has to do is exploit it to its advantage. Also the site of shop is in the best location as it’s the corner shop so the approach of the shop is very easy and accessible.
Flyers and brochures will, play an important role for boosting up the sales of flowers. Print media would be used extensively. Flyers and advertisements in the newspapers would be a weekly feature, especially every time a new item is introduced. Other than that, there would be buy one get one offer in the very start. However, in the first month there would be special discount on every type of flowers. . These would help in attracting customers, especially younger ones. Terms and conditions could be altered to suit their needs at flexible rates. They would be provided menus so that they can call whenever they want, and order any item.
Historically price has been the major factor affecting buyer choice. Basically price is the amount of money charged for a product or services or the sum of values that consumer’s exchange for the benefits of having or using the product and services. Price is the only element in the marketing mix that produces revenues, all other elements represents costs. I will have to ensure that the price of my flowers is not cost oriented rather customer oriented. As low price make the customer loyal. I will prefer to set my price low to prevent more competitors from entering the market. Price is going to be the only marketing tool that we’ll use to attain our marketing objectives. The price decisions would have to be coordinated with product design, distribution, and promotion decisions to form a consistent and effective marketing program. The decisions made for other marketing variable may affect pricing decisions. We will support our price positioning strategies with a concept known as target costing. In this case we started out by deciding that our product’s price lower than that of our competitors. Prices would be somewhat based on cost basis, but mostly it would be based on what the competitors are charging.
The objective of management system is to provide solutions for all technology-related services. In order to manage the operations and to run a business, a firm needs a trained and appropriate human resource. The employees needed for moments will be two. One will purely deal with customers and the other will be responsible for arranging flowers and decor setup for the people who will like to make flower bouquet bunch or basket by their own choice. And third person would be me my self who monitors all the activities of the firm. The employees will be responsible to control, manage and look after all the aspects of the industry. And keep records of day-today operations.
Functions include: Record of day to day transaction Maintenance (e.g. start/end of day activities, report printing, back ups, etc) Communication within organization Telephone services Serving customers in the best possible way Concerned with any innovative item in the shop The management system is responsible for all application development within moments. It develops customized solutions for all the various business areas within the organization; this leads to improve productivity and better process management. The management plan would be a fairly flexible aspect of the business. Policies would be altered to suit environments. However, the owner, I will do most of the planning and decision-making. The owner’s degree in Business Administration, supplemented by organizational experiences will provide for the lack of prior experience of starting a business. Furthermore, for effective management and effective opportunities, business consultants will be approached.
All the employees would be required to work with the consideration that competence and contribution as the basis for job security. Appreciation and incentives would come along fairly frequently. Listening and two-way interaction would be important. Furthermore, cooperation, support, teamwork, integrity, dignity and respect would regulate behavior patterns.
Hiring would be mostly reference based. A minimum education level would be required. Proper job descriptions and qualifications would be written down, and a proper document bearing all the details signed. For example, the following are a list of basic qualifications for all the jobs in moments. Essential skills and abilities Managing flower efficiently and effectively Have enough Information regarding every type of flowers Pleasant personality Have a strong sense of creativity. Other qualifying factors would be no criminal record, sense of responsibility, team worker, obedience and willingness to learn will also be observed.
Initially, orientation would be important a little overview about the company and its mission and setting down the basic principles of work. Some training would also be given as regards the manners of serving and behaving in the presence of customers. Also, in less busy days, like in June and July employees can be given training, not with the objective of replacing the present employee but allowing other workers to understand the work and be able to assist them effectively whenever possible.
As motivation is an important aspect in order to boost up your company. The HR at moments would not only be recruited and trained, but would also be motivated to perform its best. One way would be to provide employee benefits and incentives, which at times do not motivate much but certainly they are a guard against de-motivation. Moments would have an employee of the month, based on the contribution by any worker, the cooperation effort and good behavior for the general good of the business. Another, motivation technique would be a reward-based technique, whereby good performers would given a limited amount of profit sharing rights for the month.
LOCATION & LAYOUT:
Moments will be open between 11AM to 11 PM, 7 days a week. Located in E-8 Markaz in naval market, with quite a spacious parking lot. The location is good as it is near a residential as well as a commercial area. The location can ensure its sale. Plus, the approach of its location is very easy and approachable. From the outside, moments will give a very traditional and simple look, done mostly in clay. Since it will have no seating arrangement inside as such, the inside will be kept simple, modern, and complete with supporting facilities. Moments will have freezers, work counters, shelves, salafeen paper, packing etc all placed so as to ensure free movement, safety of workers and healthy arrangement of flowers. The set up of moments shows the entire important features the customer can look for so that it make them easy to have what exactly they want or depending on the demand for each product by the customer. The materials you will need for florist services include: A store or sales location A refrigeration system Flowers
Plants Floral suppliers Secondary products you want to sell. Packing Salafeen paper, silver and printed sheets Greenery Tape Ribbons Fence Glitters Chairs Fans Tube lights Telephone
A proper system would be maintained and some form of internal control. All kinds of receipts, invoices, memos etc would be recorded. Entries would have to be recorded so as to keep accounts and books up-to-date. The inventory control system would be maintained efficiently and effectively.
The objective of the human resource management is to identify, recognize and develop human potentials. To provide equal opportunities to each employee to work competitively and to create an environment where each individual is motivated to contribute to the progress of the organization. Its functions include: Recruitment Performance appraisals Staff benefits and compensation Training and development
The objective of conducting marketing research is to find out the needs of the consumers for identifying product opportunities, developing strategies and taking business initiatives. The marketing research shows that there exist a good enough scope for a floral shop to run successfully in sector E-8 as there is no any flower shop in this sector. Also there is no any shop in E-9 and E-7. Also the shop in F-8 is not that proper shop and not on a big scale. Its function includes researching whether product will fail or run in the market according to needs and demands of the customers. Other functions include: Idea generation for new product development Volume forecasting / gathering data from various sources to produce volume forecasts on which critical decisions are made. Data analysis and interpretation. It is essential to keep ever-changing of customer need, wants and desires in mind and for this purpose I continue to use my research in the best possible way to satisfy them. The marketing research allows us where to generate new and innovative ideas for the improvement in the flower arrangement.
LEGAL FORM OF ORGANIZATION:
Legal form of organization would be proprietorship. I will prefer doing business on the basis of sole proprietorship. As small business can done very well, if its run on proprietorship base. The legal form of the business will be that of a sole proprietorship where all decision-making will be by the owner and all profits and losses will be borne by the owner.
No doubt risk is a close part of almost every type of business. The current status of the business is start up. It still has to establish itself in the market. It might face some problems too, but extensive planning is being done to deal with that sort of uncertainty and risk. In my business of a floral shop there can be risk include like:
Unforeseen risk: For the unforeseen events there is a risk for my business. As in summers due to sunny days the flowers can went dead. In summers the life of flowers become very short. The flowers, which will be left couldn’t sell on the next day. Economical risk: Economical risk is there, as due to inflation, rent can increase, transportation cost can increase, and also it can effect on cost of flowers, which eventually decrease the sales and lowers the profit overall. Competition risk: As there definitely a great risk of competition would be there. The location of my business is in E-8, where there is no flower shop. But within a year may be another competitor will come.
There would be no credit policy as everything will be sold on cash basis and will be given on the spot. The credit policy of the business would be clean. As the nature of my business don’t let me to collect collateral from the customers. Customers don’t need to pledge any type of collateral. And there would be no written agreement between he customers and the sellers in my type of business.
PURCHASES AND INVENTORY:
There will be purchases of flowers on alternative basis. In normal routine Like one of the employees will be responsible for going to patooki and buy stock of flowers from there. He will buy flowers for two days so that he will again go after next day. Then from patooki he will brings flowers for two good days. In case of special occasions and in winters he can bring flower from chakree, which is on the Peshawar road, to meet the excessive demand of the customers. Like on valentine’s on both the EIDS, on Christmas, mother day occasions like that there would be more demand of flowers so in order to meet that demand employee will prefer to go to chakree and buy from there.
Or the other way would be that in winter season and on special occasion employee buy flowers more than its normal routine from pakooti and then have a stock of these flowers in advance. So there is a inventory control system which maintain the life of a flowers. The stock of flowers is very important aspect as in winters and on special occasion the price of flowers would increase. So it would be beneficial to buy flowers in advance and get them stock so that it wouldn’t face the difficulty of meeting the demand of flowers and earning the sufficient money.
There would be two employees who will work for the shop. On of the employee will be purely responsible for bringing flowers form patooki, and may be sometimes form chakree. Then after bringing flowers he will need to maintain the inventory control system like when there is a need to bring flowers again, where and how to store them properly, how to face the need of excessive demand, when to purchase for two days, or when for the week, accordance with earning profits. The other employee will deal with customers only. He will be responsible to stay in the shop to deal with customers, accept their orders, and make bouquet for them, in the form of bunch, or basket and all that stuff regarding satisfying the customers. Another person would be me my self who will keep check and balance on these employees and who is responsible for an overall efficiency and effectiveness of the shop. I will be keep check and balance in an overall way like whether employees are doing well, demands of customers are fulfilling, inventory system is efficient. One employee would be: Responsible for bringing flowers form pakooti when not to purchase, when buy in stocks but in Make purchases from pakooti Managing the life of flowers Other employee who will be in the shop will: Take payments Take orders from customers Deal with customers’ concerns Serve customers Me my self, will ensure that all employees are performing their duties, abiding by the timings and the contract. Ensure that instructions for quality management are being followed.
In my type of business plan there would definitely be seasonal variations, as the sales of flowers will mainly depend on seasons like in winter no doubt the sales would increase but in summers the sales would go down. So in winters the prices of flowers will go up but in summers the price will decrease. The sales will increase in the months of December, January, and February, and sales will go down in May, June and July. In the rest of the months the sales will remain stable.
STATEMENT OF ASSETS:
Cash Prepaid rent Freezer Furniture and fixtures Inventory Accessories RS.720,000 18,000 4,000 8,000 45,000 5,000
OPEN DAY BALANCE SHEET:
CASH PREPAID RENT FURNITURE AND FIXTURES INVENTORY FREEZER ACCESSORIES TOTAL
NOTE 1 NOTE 2 NOTE3 NOTE 4
720,000 18,000 8,000 45,000 4,000 5,000 8,00,000
LIABLITIE S + EQUIT Y DEBT 4,00,000 SME LOAN
EQITY MASOOMA’S CAPITA L
NOTE 1: CASH IN HAND AT FIRST DAY
NOTE 2: PREPAID RENT FOR ONE MONTH 1500 (1500 *12) NOTE 3: FURNITURE AND FIXTURES: FURNITURE : TWO CHAIRS 1000 TWO FANS 2500 TWO TUBE LIGHTS 500 TELEPHONE 2000 FIXTURES: NOTE 4: INVENTORY STOCK FOR ONE DAY WORTH 1500 (1500*30) Rs.18000
END DAY BALANCE SHEET:
ASSETS CASH PREPAID RENT FURNITURE AND FIXTURES INVENTORY FREEZER ACCESSORIES NOTE 5 NOTE 6 NOTE 7 SAME AMOUNT 1440000 24000 10000 45000 4000 5000 EQITY MASOOMA’S CAPITAL RETAINED EARNING LIABLITIES + EQUITY DEBT SME LOAN NOTE 9 2,64,000
NOTE 5: AT THE END OF YEAR CASH RECEIPT WILL BE FLOWER BOUQUET OR BASKET (20*100) = 2000 ONLY FLOWERS =2000 TOTAL = 4000 CASH RECEIVED DURING THE WHOLE YEAR (4000*360)=1440,000 NOTE 6: PREPAID RENT (2000*12)
NOTE 7: ADDITION IN FURNITURE AND FIXTURES NOTE 8: ACCESSORIES INCLUDE: FLOWER SILVER AND PRINTED PAPER TAPE RIBBONS BUDS SALAFEEN PAPER NOTE9: DEBT: DEBT – INTEREST EXPENSE (400000-56000)=344000 DEBT –LOAN INSTALLMENT (344000-80,000)=2,64,000
PROJECTED INCOME STATEMENT FOR THE YEAR END:
SALES - COST OF SALES GROSS PROFIT LESS OTHER EXPENSES SALARIES EXPENSE RENT EXPENCE MAINTAINCE EXPENCE TELEPHONE EXPENSE ELECTRICITY EXPENCE ADVERTISING EXPENSE LOAN INSTALLMENTS TRANSPORTATION EXPENSE EARNING BEFORE INCOME TAXES EBIT LESS INTEREST EXPENSE NET PROFIT
NOTE 1 NOTE 2
AMOUNT 1,260,000 5,40,000 7,20,000
NOTE 3 (2000 *12) (1000*12) (1500*12) (1000*12)
72000 24000 12000 18000 12000 10000
NOTE 4 (1000 * 12)
80,000 12000 552000
56000 RS. 4,96,000
THE AMOUNT 4,04,000 WILL GO TO REATINED EARNING AT THE YEAR-END BALANCE SHEET.
NOTE 1: SALES AVERAGE DAILY SALES (3500*360) NOTE 2: RS.1260000
AVERAGE COST OF FLOWER (1500*360) NOTE 3: SALARIES EXPENSE: SALARY OF ONE EMPLOYEE: 3000 (3000*2) (6000*12) FOR THE WHOLE YEAR NOTE 4: INSTALLMENTS DEBT AMOUNT 400,000/5 =80,000 NOTE 5 INTERSET PAYABLE DEBT AMOUNT=400,000 SME LOAN INTEREST=14% 14% OF 400,000 =56000 6000
FOR A MONTH FIXED COSTS:
SALARIES PAYABLE TELEPHONE BILL ELECTRICITY BILL TRANSPORTATION COSTS MAINTENANCE COSTS ACCESSORIES TOTAL VARIABLE COSTS: COST OF FLOWER INVENTORY (45000/12)
6000 1500 1000 1000 1000 5000 17,500
PRICE OR SALES:
FIXED COST PRICE-VARIABLE COST 17500 = 45000-5750
17500 = 39250 =0.44
CASH FLOWS STATEMENT:
INFLOWS: CASH RECEIPT AS NO SALE ON CREDIT THEREFORE NO ACCOUNT RECEIVABLES TOTAL INFLOWS OUT FLOWS: SALARIES PAYABLE SALARY OF ONE EMPLOYEE: 3000 (3000*2) (6000*12) FOR THE WHOLE YEAR COST OF FLOWERS AVERAGE COST OF FLOWER (1500*360) 6000 72,000 RS.1260000
ELECTRICITY BILL (1000*12) TELEPHONE BILL (1500*12)
INSTALLMET PAYMENTS (400,000/5) INTEREST EXPENSE (14% OF 4,00,000) TARNPORTAION PAYMENT (1000*12) MAINTAINCE COST (1000*12) RENT PAYABLE (2000*12) ADVERTISING TOTAL OUTFLOWS
80,000 56000 12,000 12000 24,000 10,000 8,36,000
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