START- UP SAMPLE BUSINESS PLAN OF

STATIONERY MANUFACTURING UNIT.

Submitted in Partial Fulfillment for the award of the Degree of

Master of Business administration

Batch – 2020-2022

SUBMITTED TO: SUBMITTED BY:

Prof. Mansi singh Deepika kumari

INSTITUTE OF TECHNOLGY & SCIENCE, MOHAN NAGAR,

GHAZIABAD

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 DECLARATION

I am DEEPIKA KUMARI pursuing Master of Business Administration (MBA) 1 st

year from ITS, Mohan Nagar, Ghaziabad in the session 2020-21 I hereby declare
that this Mini project report titled “Start-UP Sample Business Plan of Stationery
Manufacturing Ltd.” is the outcome of my own effort under the guidance of
Prof.Mansi singh, designation. The entire project is my original creation. In case of
any discrepancy, I will be solely responsible for it and institute has the right to
cancel my project.

Date: ………………… Deepika kumari

Place: ITS, Ghaziabad Roll. No:12

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 ACKNOWLEDGEMENT

Mini project is a bridge connecting the educational qualification and professional use. It

is the path leading to success by innovative ideas and experienced practical knowledge without

fear and failure.

It gives me immense pleasure to take the opportunity to remember and thanks the

personalities who have involved with this project work. I express my sincere thanks and deep

gratitude who are directly and indirectly associated in completion of this project.

I would like to thank to Prof MANSI SINGH Faculty of organization for assigning an

extremely challenging project thereby giving unique opportunity to meaningful contribution of

such growing and vibrant organization, guiding throughout the project, without his/her help the

project would have not added enough value. I am extremely grateful for the time he/she spent

from his/her busy schedule.

Deepika kumari

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 Table of contents
1.0 Executive summary
1.1 Objectives
1.2 Mission and vision
1.3 Keys to success
1.4 Start-up costs and funding
1.5 Company ownership
1.6 Products and services
1.7 Market
1.8 Strategy
1.9 Management
1.10 Financials
1.11 Investor considerations
1.12 Disclaimer

2.0 Company summary

2.1 Start-up Summary
2.2 Start- up Funding
2.3 Company ownership

3.0 Product and services

3.1 business model
3.1.1 Competitive Landscape

4.0 Market Analysis Summary

4.1 Market Segmentation
4.2 Target Market Segment Strategy

5.0 Strategy and Implementation Summary

5.1 SWOT Analysis
5.1.1 Strengths
5.1.2 Weaknesses
5.1.3 Opportunities
5.1.4 Threats

5.2 Competitive Edge

5.3 Sales Strategy
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 5.3.1 Sales Forecast
5.4 Marketing Strategy
5.5 Pricing Strategy
5.6 Sourcing Strategy
5.7 Location and Facilities

6.0 Management Summary

6.1 Personnel Plan

7.0 Financial Plan

7.1 Break-even analysis
7.2 Projected Profit and Loss
7.3 Projected Balance Sheet
7.4 Long- Term Plan

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1.0Executive Summary

This business plan will show how a total investment of only ₹20,00,000 could generate a
revenue of about ₹60,00,000 lakhs in a year, working at 60% utilization and 300 days in a year.
Cost of production for such a revenue would be around ₹46,00,000, providing the business with
a profit of ₹14,00,000 per year and average monthly sales of ₹1,16,000, while maintaining
adequate levels of liquidity.

The purpose of this plan is to secure additional funding from a bank (₹10,00,000 five- year term
business loan), to cover the start-up costs.

Mittal LTD., is a start-up business dedicated to providing excellent quality notebooks to the
residents of India, in a manner that generates fair and equitable returns for present and future
owners, and superior value to our users. We will be specializedin creating and producing a
variety of notebooks and other stationery items for our customers.

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India has experienced explosive growth over the past few years. Over past years’ population of
India has increased rapidly and so the education and literacy level has also increased. We are
catching up with this opportunity. We are opening a manufacturing unit that will focus on the
good quality notebooks and papers.

Currently, there are many other players in the market for the same. Mittal LTD. will offer a
better product, at a reasonable price. We will offer customized product and other stationery
product at reasonable price and better quality.

1.1 Objectives

1) To manufacture a minimum of 600 notebooks per day for distributing in different parts of
India, in the first year of operations.
2) To offer our customers excellent paper quality and stationery items, at a reasonable price,
and provide outstanding user experience, measured by minimum 5 percent yearly sales
growth.
3) To generate positive cash flow from operations, and at least 10 percent net profits to sales.

1.2 Mission and Vision

Mittal LTD.’s mission is to offer users of India the best quality stationery in the area. We are
committed to providing the service quality and value that our users expect.

Mittal LTD. will use its strategy, staff, and systems to provide each customer with a seamless
three- part customer experience – service product (variety of stationery items), service
environment, and service quality – each part of which will meet or exceed our customers’
expectations.

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Our vision is to become the first choice of stationery in India, and a respected company – as
measured by our users, our employees, our stakeholders and the community we live in.

Our values are critical to our success. They are the strong foundation of Mittal LTD. define who
we are, and set us apart from our competitors. They underlie our vision of the future. These
values include:

1) Performance excellence. We act like responsible owners, always seeking to meet or

exceed expectations.
2) Teamwork. We act as a team, committed to each other, and bound by trust and loyalty.
3) Integrity. We treat one another, and all our stakeholders with dignity and respect.
Honestly, ethical behavior, and integrity are fundamental characteristics of our
business conduct.

1.3 Keys to Success

Our keys to success are:

1) Excellent product and service that will build and maintain customer loyalty.
2) A business location that will assure high company visibility and a high flow of
customers.
3) Proven management ability to successfully run a similar business.
4) Our commitment to continuous improvement and total quality services.

1.4 Start- up costs and funding

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After spending several months searching for a convenient location, the owners decided to lease a
building in the industrial area of Ghaziabad, U.P. The start- up capital will be used for legal
expenses, manufacturing inventory and equipment, machinery, packing and other materials,

insurance, rent, promotion, business sign, and inventory on hand at start-up as detailed in the
company summary section of this plan.

We have estimated total start-up costs of 26,00,000. The numbers in the start-up and the start-up
funding tables are meant to reflect these estimates. The company capital will be 20,00,000.

Sonika, as owner, will provide the bulk of start-up financing in the amount of 8,00,000 and 32
percent ownership.

Raj, as co-owner, will provide the bulk of start-up financing in the amount of 8,00,000 and 32
percent ownership. Approximately 10,00,000 additional funding is needed. The purpose of this
business plan is to secure financing for that amount.

For the remaining 10,00,000 additional financing needed to cover the start-ups costs, the
company plans to receive a five- year term commercial loan facility which will meet the cash
flow requirements. The borrowed funds will be used exclusively to but equipment, based on the
list that will be made available to the lending institution. The loan could be repaid in equal
monthly installments over a five- year period.

Our cash- flow analysis demonstrates the company’s ability to repay the loan and meet the
interest payment obligations, while maintaining adequate liquidity and generating positive cash
flow, and sufficient cash reserves for unforeseen future events.

1.5 Company Ownership

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Mittal LTD., will be a privately held corporation owned in majority by Sonika and Raj.

1.6 Products and Services

Mittal LTD. will offer a wide variety of stationery items, such as notebooks, notepads, diary,
pens, colored A-4 sheets, customized pens and notepads.

1.7 Market
India is a growing populated area, counting as the world’s second population. The average
income for Indian is 1,13,000.

With continued growth in the country, opportunities to serve the users will increase. The
company will sell to small distributors and to their own personal outlets, and it will also
customize pens and notepads as per the choice of customers. If any institute want notepads with
their name on it, we will print it for them.

The main market segments are: a) students, accounting for more than 90 percent of our sales, b)
corporate business which, in terms of purchase orders, purchases notepads for their meetings c)
industry for marking records d) notebooks are basically used in all the areas and working of the
country.

Employees, students, companies, shopkeepers etc. everyone uses registers and notebooks and
every stationery items for their work.

1.8 Strategy
Our strategy is based on serving a strong customer value proposition in all the market. We are
looking to offer the country and on international basis, a new quality of papers, notebooks and

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other stationery items for working in every field. Students to fall in study again by writing on the
amazing quality of paper of notebooks.

We are building our marketing infrastructure so that we can eventually reach more retailers. We
focus on satisfying the needs of every students and business class and companies located inside
or outside the country.

1.9 Management
Our management is expected to use resources wisely, operate profitably, pay debts, and abide by
laws and regulations. Our management philosophy is based on team work, responsibility, and
mutual respect. People who work at Mittal LTD. would want to be part of our team because we
operate in an environment that encourages creativity, diversity, growth, and performance.

Raj will be the manager of Mittal LTD. He has successfully owned and operated a similar
business in New York. He is having more than three years’ relevant experience in the industry,
and hold various degrees and certificates in management.

1.10 Financials
According to our conservative estimates, Mittal LTD. is expected to maintain a healthy financial
position over the next ten years. Our company is expected to break even in the sixth month of
operations.

We also expect to be profitable in the first year of operations, with profits increasing over the
next four years, as we establish and increase our customer base.

Our main concern will be to have sufficient cash on hand to meet our payment obligations and be
prepared for unexpected needs of cash. Our conservative projections indicate that our business is
able to generate positive cash flows and sufficient reserves.

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The ratio analysis clearly shows that Mittal LTD., financial position is expected to remain strong,
as measured by its liquidity, long-term solvency and cash flow adequacy ratios.

The company’s profitability, as measured by its profitability ratios, is excellent, and will
gradually increase over the next ten years. This performance will probably be rewarded by a
higher market price when the company decided to go public.

1.12 Disclaimer

The current unfavorable economic conditions and prospects are carefully considered, and the
estimates included in the plan are conservative. However, investors are advised to exercise
caution when considering investment alternatives because actual data almost always differ from
projections.

This business plan is designed to help investors better understand the potential risks, costs and
benefits of this business project, but it is not intended, and is not to be considered in itself or any
part of it, as an investment offer or solicitation, as regulated by law. It was developed for sample
purposes, and any resemblance to real situations, people, or data would be purely coincidental.

2.0Company Summary

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 Mittal LTD., is a new manufacturing industry started in India. It is a new start-up business.
(managed by Sonika and her colleague Raj)
Sonika, owner of Mittal LTD., has two years’ experience in the management industry. Her
colleague Raj, co-owner of the company, has more than three years’ experience as a
manager. He has successfully operated a similar business in New York, which he left for
family reasons, to move to his motherland India back.
Our focus is to meet or exceed the customer expectations for an exceptional quality paper,
notebooks and stationery items. The company will serve in almost all the part of the country
to their local vendors and corporates. The company’s product quality is very favorable,
providing high visibility and a large flow of customers. Accordingly, the rent was accounted
for in this plan is higher than in other areas of the city.
Mittal LTD., prices will beat the competition. We are aware that we cannot compete on
prices only. That is why we prefer to focus on assessing customer’s expectations, and our
core competencies, decide which expectations we can reasonable meet, then make sure to
constantly exceed them wholeheartedly. Thus, we will be able to maintain and increase the
level of customer satisfaction, as a strong foundation for future growth.
The entire manufacturing and distribution process will be conducted though main online
services that have excellent references in India, and we can choose to be one of their
participating suppliers. In this way, we are able to save on delivery costs and logistics, and
simultaneously use the internet exposure of our partners. In addition, delivery people will
use their own vehicles, so the business will not have to purchase delivery vehicles or hire
drivers.
We will directly supply our products to the retailers and eliminate the middlemen and reduce
the cost of the product. Moreover, we are looking for opening our own retail stores in
different part of the country so that we can reduce the cost of our products and stationery
items.

2.1Start-up Summary

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After spending several months searching for a convenient location, the owners decided to lease a
building in the industrial area of Ghaziabad, U.P. the start-up capital will be used for legal
expenses, manufacturing inventory and equipment, machinery, packaging and other materials,
insurance, rent, promotions, business sign, and inventory on hand at start-up, as shown in the
table below.

Rent-The manufacturing property will be leased in June, 2019 for a minimum of ten years, with
the option to extend lease for another five years after that.

Manufacturing inventory- It will include specific tools and accessories that are typically needed
for stationery items production and service facility and includes:

1) Notebook preparation- white paper, outer cover, stitching wire, jute, twin and gum.
2) Pen manufacturing- ball pen making machines
3) Other manufacturing- stationery related machines, machines for printing names and
customized items.

Manufacturing equipment includes mainly machines for paper cutting, pasting machine, printing
machine, ball pen making machines, cover printing machines, other machines for related work,
other assets like tables, chairs etc.

Approximately fifteen lakhs rupees’ worth of equipment (long term assets) will be expensed over
the next ten years, using the straight line depreciation method. A complete list of the equipment
to be purchased, including prices and acquisition terms, will be made available for both the
investor and the bank’s consideration.

Our company policy is to purchase only new, state-of-the-art, energy-efficient equipment from
reliable suppliers in the manufacturing industry.

Other expensed equipment- consists of tables and chairs, coffee makers, water dispensers, small
pare parts, etc.

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Inventory on hand at start-up includes specific machines for notebook manufacturing, papers and
cutting machines, printing machines, pasting machines, and different stationery items that can be
manufactured along with the main items. It also includes supplies that are used during the
packing, sale, and delivery process, and miscellaneous supplies.

Insurance premium- for a business risk coverage is initially established at 70,000 for the first two
months, and will be further negotiated with the insurance company. It will be paid by direct debit
on a monthly basis.

Promotion expenses are initially estimated at 90,000 and will be used for various marketing
information materials and advertisements.

Legal expenses include business formation, advice and assistance, basic contracts reviews, and
general business advice.

Office supplies include desks, files, tape, record rooms, forms, etc.

Permits expenses are additional costs incurred to operate legally in India.

There are several India based manufacturers and suppliers of manufacturing machines. The
specific vendors will be chosen soon, based on competitive bidding process. All the selected
manufacturersproduce and supply high- quality, energy-efficient kitchen and restaurant
equipment and they compete primarily on price.

2.2 Start-up Funding

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We have estimated total start-up costs of 25,00,000. The numbers in the start-up and the start-up
funding tables are meant to reflect these estimates. The company capital will be 20,00,000.

Sonika, as owner of the company, will provide the bulk of start-up financing in the amount of
8,00,000 and 32 percent ownership

Raj, as co-owner, will provide the bulk of start-up financing in the amount of 8,00,000 and 32
percent ownership. Approximately 10,00,000 additional funding is needed. The purpose of this
business plan is to secure financing for that amount.

For the remaining 10,00,000 additional financing needed to cover the start-up costs, the company
plan to receive three- year term commercial loan facility which will meet the cash flow
requirements. The borrowed funds will be used exclusively to buy equipment, based on the list
that will be made available to the lending institution. The loan could be repaid in equal monthly
installments over a three- year period.

Our cash-flow analysis demonstrates the company’s ability to repay the loan and meet the
interest payment obligations, while maintaining adequate liquidity and generating positive cash
flow and sufficient cash reserves for unforeseen future events.

For conservative purposes, the annual interest rate has been estimated at 12 percent. The actual
interest rate and borrowing terms will be negotiated with the participating bank. Strong collateral
could be provided by any guarantee, and by the owners’ personal assets (for example, cash
collateral in the form of certificates of deposit, to cover the remaining collateral requirements in
addition to the guarantee).

2.3 Company ownership

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Mittal LTD., will be privately held corporation held in majority by Sonika and Raj. A new
investor will be invited to participate in the company’s capital.

Their total contributed capital would be 16,00,000.

3.0Products and Services

Mittal LTD., will produce a wide variety of notebooks, as well as customized pens, paper
sheets and other stationery items.
According to Wikipedia.com, the market for exercise notebooks in India has been
traditionally dominated by the unorganized segment. From the endpoint of marginal retailers
to independent sellers, all have dependent on imports from China. However, the market has
developed to achieve a substantial valuation which was not there until 2000. The evolvement
of organized brands as ITC classmate, Navneet and others have added premium to the
market, discerned by the fact that the prices of exercise notebooks have grown 5-6 folds and
even more than that in some cases in the last decade. The exercise notebook market in India
has been

expanding at a decent pace in the wake of growing economy, high literacy levels,
burgeoning middle-class and enhanced scale of initiatives in the education sector. There has
been a marked shift in the preference from cheap local brands to quality products.
The notebooks and other manufacturing items if Mittal LTD. will be distributed on different
retail outlets with offers to attract the customers, and to create awareness among the
customers about our company.

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Delivery of products will be done in various parts of the country. The notebooks will be
manufactured and will be packed in a box so that when it reaches its customers, it should look
neat and clean and can attract customers for using this brand more.

3.1Business Model

Mittal Ltd., is a manufacturing unit where different types of notebooks, notepads,

customized notebooks and pens and all other stationery items will be manufactured.
As explained in the previous section, our main products are a variety of stationery
items that will be distributed in various parts of India and online portal also to
purchase the product.
To manufacture notebook, raw materials used are white paper, outer cover, stitching
wire, jute, twin and gum. Machines for manufacturing the notebooks and other
stationer items will be installed in the manufacturing unit, as we plan to invest our
capital in valuable long- term assets.
Notebooks and other stationery items will be delivered in various parts of the country
on different stationery shops.
The entire delivery process will be conducted after doing all the research work and
find out the demand of our product in the market.

3.1.1 Competitive landscape

Currently, there are many competitors with same products are there in the
market. Mittal LTD., will offer a better product, at a reasonable price, and
will always make the product available for their customers.

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 However, there are many manufacturers in India, that also manufacture
notebooks and other stationery items.
Though their quality is also good and they are the old players in the
market and have well established identities, but still it’s good to have
healthy competition in order to make yourself on the top of the things.
Other main competitors that we have identified in India are:
Classmate(ITC), Navneet Publications, Repro India, Camlin etc.
According to our market survey, we distinguish ourselves from them by
providing better products at reasonable prices, and will make them
available all time in the market.
Basically what, we have that others don’t have will definitely be better and
wide range of products at reasonable price.

4.0Market Analysis Summary

India is a growing populated area, counting as the world’s second largest population. The
average income for Indian is 1,13,000.

With continued growth in the country, opportunities to serve the users will increase. The
company will sell to small distributors and to their own personal outlets. The company will
sell to small retailers and will also accept orders for customized notebooks, notepads and
pens.
We estimate that over 90 percent of our sales will go to individuals (retail customers) and
the remaining balance to corporate business which in terms of purchase orders, purchases

notepads for their meetings, industry for making records and as we know that notebooks are
basically used in all the areas and working of the country.

4.1Market Segmentation
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 As explained above, the main segments are: a) individuals (retail customers)
accounting for more than 90 percent of our sales, and b) corporate business which, in
terms of purchase orders, purchase notepads for their meetings c) industry for
making records d) notebooks are basically used in all the areas and working of the
country.
Employees, students, companies, shopkeepers etc. everyone uses registers and
notebooks and every stationery items for their work.

Market Analysis (Pie)

corporate
customer other
9% 1%

retail customers
corporate customer
other

retail
customers
90%

4.2Target Market Segment Strategy

Mittal LTD., will focus on its market, to all the users in the area, along with local
retailers that are located in different parts of India.

Typically, according to our own market survey, the target individual customers
prefer to purchase notebooks as per their needs, as an alternative sale will usually
increase at

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 the time of summer vacations or at the exams. Businesses prefer to purchase
notepads usually at the end of the financial year when there are meetings in the
company.

We will strive to establish a reputable image from that target market’s perspective, by offering
excellent quality product, convenience, availability of products in the market, reasonable price,
and by partnering with local retailers and other interested organization our community.

By always focusing on customers’ needs, wants and expectations, we will be able to

build customer loyalty and word-of-mouth sales that many of our competitors are
lacking.
Target Market share. The estimated total market share in India is more than 45
percent, and our target market would be 8 percent. We believe this target market
share to be reasonable and achievable. See more details in the sales forecast section
of this plan.

5.0Strategy and Implementation Summary

Our strategy is based on delivering a strong customer value proposition in all over the
market. We are looking to offer the India a new variety and quality of stationery items.
We are building our market infrastructure so that we can eventually reach more customers
with the same level of satisfaction. We focus on satisfying the needs all the users located in
the India.
We intend to use various forms of marketing communication as an efficient way to reach our
target market and raise their awareness of Mittal LTD., and their product offering.
In addition, Mittal LTD., will use effective advertising tools to promote the business.
Advertisement in newspaper and television is a common way to advertise in India.
Adequate funding has been accounted for when projecting the promotion expenses. We
intend to spend the money in the most cost-effective way. Therefore, many other advertising

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options will be evaluated during the project implementation, to make sure that we achieve
best results.

5.1SWOT Analysis

The SWOT analysis provides us with an excellent opportunity to examine and

evaluate the internal strengths and weaknesses of Mittal LTD. it also allows us to
focus on the external opportunities presented by the business environment as well as
potential threats.
Next section explains major strengths, weaknesses, opportunities, and threats that
Mittal LTD., should be aware of.

5.1.1 Strengths

Mittal LTD., has a valuable inventory that would help it to be successful.

These strengths include:
1) Good quality at lower price.
2) Paper which can be recycled are used.
3) Management’s proven experience in successfully running a similar
business in New York.
4) Clear vision of the market needs: we know the customer’s needs.

5.1.2 Weakness

Strengths are valuable, but it is useful to realize the weaknesses. We have

identified some of our weaknesses:
1) We are new in country.
2) Start-up challenges

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 3) Limited operating capacity during peak sales periods.

5.1.3 Opportunities
Mittal LTD., strengths and the awareness of its weaknesses will help it
capitalize on emerging opportunities. These opportunities include, but are
not limited to:
1) Fast growing population in India
2) No other competitors are providing at such reasonable rate.

5.1.4 Threats

Threats the Mittal Ltd., should be aware of include:

1) Changes in the business environment that might reduce our sales
2) Higher taxes in the future
3) The commercial property is leased, no owned by our company.
4) Too many existing competitors.

5.2Competitive Edge

Manufacturing competitive edge is:

1) Location: Mittal LTD., is located in the industrial area of Ghaziabad. All the raw
material, labor and other facilities are easily available in this area which makes
easy for the company to reduce the price.
2) Low operating cost and reasonable price: Since Mittal LTD., policy is to
purchase latest machinery and technology, and will be operating with a team of
several skilled and semi-skilled employees, it will be able to offer reasonable

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 prices for a high quality notebooks and other stationery items, but it will be
impossible to compete on price only.
3) Excellent products, timely availability of products.

5.3Sales Strategy

Because Mittal LTD., is a new entity, we recognize that we will need to prove our
company’s worth to Indian customers, in order to earn respect and business.
Most important, we need to sell our company, not necessarily our products and
services, and create positive word-of-mouth. We will have to push our products.
Our sales strategy is based on the belief that there will be a regular flow of first-time
customers. The real sales effort will be to focus on the conversion of each first-time
customer into a long-term customer relationship, where these customers come
regularly to buy our product, and also bring or recommend new friends to share
experience of great stationery items.
This focus recognizes that it would cost our company less money to convert a new
customer into a long-term relationship, than it does to attract a new customer. With
this in mind, our sales activities will concentrate on keeping existing customers
happy, and always meet or exceed their expectations.
Consistent, customer needs product is the absolute requirement in the manufacturing
industry.

5.3.1 Sales Forecast

The following table and charts illustrate the sales forecast for five years.
The first few months will be slower, a consequence of being a start-up
business, struggling to become more visible within the community, going
from nothing to achieve a regular clientele. A steady growth cycle will

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occur as the month pass. Profitability is projected to occur during the first
half of the first year.

The increasing sales forecast suggest an important potential growth. Our

projected sales are actually net sales, which consist of the gross proceeds
from sales of merchandise – gross sales – less returns and allowances.

The projected average monthly sales are approximately 1,16,000.

Considering average price of 3,500 per item, Mittal LTD., would need to
sell on average 25,000 each day (1,16,000 average monthly sales / 3500
per day/ 26 business days per month).
Two months are reserved each year for pay vacation, when the
manufacturing unit will be closed, but important maintenance works are
scheduled for the equipment and facilities during this break period.
Using our equipment and machinery we will be able to produce maximum
12,000 per day in two shifts. However, the normal operating capacity,
which takes into account the usual breaks and the idle periods, is 10,000
per day, or 83 percent (usually 20 hours working hours per day). That
means that the average projected 4,500 items per day would be reached at
only 37 percent of normal operating capacity (4,500 notebook / 12,000
notebooks=.37), which is reasonable target.
In periods of peak sales, the normal operating capacity could be extended
by working more than 20 hours per day. Therefore, we believe that, from
the operating point of view, our sales forecast is feasible.
The question remains, will we be able to attract and maintain at least the
minimum number of customers required to order 4,500 notebooks per
day? If each customer would order one notebook it would means a total of
10,000 per month. This figure is disputable because the companies
typically purchase notepads for their meeting and boxes of pens, and the
individuals usually buy notebooks and less quantity of pen, or sometimes

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 full packet or box of pen. However, it is a good starting point for our
analysis.

According to recent study, notebook sales account for 45 percent of all

stationery sales. Our own market survey shows that one in five purchase
interviewed use to buy 3 notebooks at least once a month.
The population in India is second largest of world’s population and the
world is growing towards more education India which means there is
ample amount of demand in the market for notebooks and stationery
items.

Sales forecast FY 2020 FY 2021 FY 2022

Unit Sales
Notebooks 1,00,000 1,25,000 1,30,000
Pens 60,000 66,000 70,000
Notepads 80,000 85,000 86,000
Other stationery 50,000 60,000 65,000
items
Total unit sales 2,90,000 3,36,000 3,51,000

Unit prices FY 2020 FY 2021 FY 2022

Notebooks 25 26 30
Pens 5 5 5
Notepads 15 16 18
Other stationery 15 18 20
items

Sales
Notebooks 25,00,000 32,50,000 39,00,000
Pens 3,00,000 3,30,000 3,50,000
Notepads 12,00,000 13,60,000 15,40,800
Other stationery 7,50,000 10,80,000 13,00,000
items
Total sales 47,50,000 60,20,000 70,98,000

Direct unit cost FY 2020 FY 2021 FY 2022

Notebooks 20 20.5 21

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 Pens 3 3 3
Notepads 7 7.65 8
Other stationery 6 7 7.8
items

Direct cost of
sales
Notebooks 20,00,000 20,50,000 27,30,000
Pens 1,80,000 1,98,000 2,10,000
Notepads 5,60,000 6,12,000 6,88,000
Other stationery 3,00,000 3,50,000 5,07,000
items
Subtotal direct 30,40,000 31,92,000 41,35,000
cost of sales

Chart Title

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY 2020 FY 2021 FY 2022

notebooks pens notepads other items

5.4Marketing strategy

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 The marketing strategy of Mittal LTD., centers on creating and developing a
corporate identity that clearly defines our market niche in terms that benefit our retail
and corporate customers.
Market needs and trends. Since our target market includes two major segments to all
segments to country.
One of the key points of Mittal LTD., strategy is to focus on these target segments
that know and understand these needs, and are willing to pay a reasonable price to
have them fulfilled.
Factors such as current local trends and historical sales data of similar businesses in
the area, ensure that the high demand for notebooks and other stationery items will
continue over the next five years Trends are in our favor: the last study we saw was
published in the Hindustan Times has a rapid growth in educational industry.
To reach our potential customers, a combination of marketing techniques will be
utilized:
1) Local media (newspaper is most effective in India, followed by radio).
Newspaper and radio advertising will include our core positioning message, and
products we offer, in order to differentiate our products.
2) Sales literature. To drive sales initially, Mittal LTD., will utilize a four color
catalog with a different cover including the company logo and contact address.
We have developed a price sheet to be enclosed with each catalog.

Upon release of a new catalog, we will need to check into the financial feasibility of utilizing
direct mail for bulk distribution. Certainly, the main task will be to clearly define the message of
our sales literature to make certain that we are selling the company, rather than the products.

 Direct mail
 Grand opening
 Industry specific trade shows and other local business events

 Internet marketing word of mouth

All marketing decisions with regard to specific media choices, frequency, size and costs will be
conducted on an ongoing basis with careful consideration of results (generated returns).

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5.5Pricing strategy

Our retail and corporate customers are especially sensitive to service value. Mittal
LTD., must ensure that price and products are perceived to be a good value to our
customers. High quality products will be offered at a reasonable price, but the price
will certainly not be the lowest in the country.
Therefore, our pricing strategy will be competitive within the various product range,
but will not rely on the selling price to overshadow other advantages of doing
business with our company, such as diverse line of high quality products, that are
readily available, reasonable priced, and backed by service excellence and on-time
delivery.

5.6Sourcing strategy

There are several India based manufacturers and suppliers of notebooks, notepads,
pens and other stationery items.
All the selected manufacturers produce and supply high- quality, energy-efficient
machinery and materials for producing the products and they compete primarily on
price.
Maintaining low levels of inventory will help to reduce the cost of financing,
handling and storage. However, too low inventory levels may also result in lost sales
and unhappy customers. Therefore, we will strive to implement the just-in-time
operating environment. This will be achieved by working closely with our suppliers
to coordinate and schedule shipments so that goods and materials arrive just at the
time they are needed.

We will purchase our inventory both from local wholesalers and direct from
manufacturers. Because of our past work experience in purchasing materials and

29
 equipment, we have a vast number of suppliers contacts within the industry.
Ultimately, these suppliers will help us to achieve lower cost-of-goods and reach our
financial performance objectives.

5.7Location and facilities

The company’s location is very favorable, providing easy availability from raw
materials, electricity, labors. Accordingly, the rent that was accounted for in this plan
is lower than in other areas of city.
The advantages of the chosen location include:

 Plenty of space for constructing warehouse.

 Excellent central location with easy access to major destinations.
 Easy availability of electricity, and other transport facilities.
 Easy availability of raw materials at low cost.
 All utilities required for operating a restaurant are available.

All these characteristics of the location are consistent with Mittal LTD. goal of providing
excellent products.

As the company gains community recognition, and our country is developed, further expansion
to one or more city will be considered as a possible second stage capital investment option.

6.0Management summary

Our management is expected to use resources wisely, operate profitably, pay debts, and
abide by laws and regulations. Our management philosophy is based on team work,
responsibility, and mutual respect. People who work at Mittal LTD., would want to be part

30
 of our team because we operate in an environment that encourages creativity, diversity,
growth, and performance.
Sonika will be the manager of Mittal LTD., assisted by her co-owner Raj. Raj has
successfully owned and operated a similar business in New York and have more than three
years’ relevant experience in the industry.

6.1Personnel Plan

The personal plan reflects the need to bolster our capabilities to match our
positioning. Mittal LTD., will have the following staff:
 Manager
 Employees
 Skilled staff
 Semi-skilled staff
 Unskilled staff

In our experience, a team of multi skilled employees works best for our kind of business.
Working as a team is critical to our success. We recognize that human resources are Mittal LTD.,
most valuable assets. Our personnel strategy focuses on selecting, training, rewarding, and
stimulating all employees in order to build employee loyalty, and increase performance.

It will be easy to find and select the best new members of our team.

As our manufacturing industry will open on all the days from 8:00 to 11:00 pm, the team of
employees can operate effectively only by using alternative work schedules that take into
account the busiest periods of day.

In addition to salaries, important bonuses and incentives are included in the personnel table, that
will be used to reward employee performance, on a pay-for-performance basis. The comerstone
of our personnel plan is to maximize productivity and minimize labor burden of the company’s
operating expenses, while maintaining strong employee commitment to the success of
operations.
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Employees that perform well are eligible for various types of performance-based pay, such as
cash bonuses, awards, etc.

The ultimate goal of all our employees is to meet or exceed our customers’ expectations.

Our continuous improvement policy encourages all our employees to continually look for ways
to keep updated with the latest technology, to improve processes, reduce costs and save time.
This approach serves the goal of reducing costs and delivery times, and increasing the service
quality and customer satisfaction.

Personnel
Plan
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Manager 10,00,000 10,20,000 10,50,000 11,00,000 11,20,000
Skilled 3,00,000 3,05,000 3,25,000 3,45,000 3,50,000
workers
Unskilled 1,50,000 1,58,000 1,70,000 1,85,000 1,90,000
workers
Other 0 0 0 0 0
Total people 4 4 4 4 4
Total Payroll 14,50,000 14,83,000 15,45,000 16,30,000 16,60,000

7.0Financial Plan

According to our conservative estimates, Mittal LTD., is expected to maintain a healthy

financial position over the next five years. The following plan outlines the financial
development of our company. The business will be initially financed by a 4,00,000 five-year
term loan and a total capital investment of 8,00,000 by Sonika and Raj plus 6,00,000
investments from an investor.
The source of repay the loan will be cash flow generated from operations. The company will
also finance growth through cash flow. After an initial period of five years, the company will

32
be able to make a further expansion. At that time, it is envisioned that and bank loan or
equity funding will be sought to finance the new development, in addition to retained
earnings.
The projected financial statements have been prepared in accordance with the general
accounting principles, and necessarily include some amounts that are based on reasonable
estimates and judgement. For accounting purposes, the long-term assets are expensed using
the straight-line depreciation method, and inventory is accounted for based on the First-In,
First-Out(FIFO) method.
The following section outline important financial information.

7.1Break-even Analysis

For our break-even analysis, we assume running costs of approximately 3,00,000 per
month, which include payroll, utilities, insurance, rent and other fixed costs. We need
to sell about 12,000 notebooks for minimum 25 per month to break even, based on
our assumptions.
Mittal LTD., is expected to break even in the sixth month of operations.

7.2Projected Profit and Loss

We expect to be profitable in the first year of operations, with profits increasing over
the next four years, as we establish and increase our customer base.
The following table and charts show the projected profit and loss for five years.

Pro Forma FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Profit and
loss
Sales 47,50,000 60,20,000 70,98,000 71,00,000 72,00,000
Direct cost of 30,40,000 31,92,000 41,35,000 43,00,000 43,00,000
goods
Other 15,000 16,000 18,000 18,500 19,750

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production
expenses
Cost of goods 30,55,000 32,08,000 41,53,000 43,18,000 43,19,750
sold

Gross 16,95,000 28,12,000 29,45,000 27,82,000 28,80,250

margin
Gross 35% 46% 41% 39% 40%
margin %

Expenses
Payroll 14,50,000 14,83,000 15,45,000 16,30,000 16,60,000
Sales and 22,000 15,000 12,000 10,000 10,000
marketing
and other
expenses
Rent 60,000 66,000 68,000 --------- ---------
Other 5,000 6,000 6,900 5,000 10,000
Total 15,37,000 15,70,000 16,31,900 16,45,000 16,70,000
operating
expenses

Profit before 1,58,000 12,42,000 13,13,100 11,37,000 12,10,250

interest and
taxes
interest 72,000 64,800 57,600 50,400 43,200
expenses
Taxes ---------- 3,72,600 3,93,930 3,41,100 3,63,075
incurred
Net profit 86000 8,04,600 8,61,570 7,45,500 8,03,975
Net 1.81% 13.3% 12.14% 10.5% 11.16%
profit/sales

34
 YEARLY PROFIT
900000
800000
700000
600000
500000 861570
804600 803975
400000 745500

300000
200000
100000 86000
0
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

GROSS MARGIN

3000000

2500000

2000000

2812000 2945000 2880250

1500000 2782000

1000000 1695000

500000

0
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

7.3Projected Balance Sheet

35
We expect a healthy growth in net worth and a healthy financial position. We do not
project any real trouble meeting our debt obligations, as long as we achieve our
specific objectives.
The following table is the projected balance sheet for five years.

FY 2020 FY 2021 FY 2022 FY 2023 FY 2023

Assets
Current
assets
Cash 50,000 80,000 60,000 70,000 1,00,000
Accounts 1,00,000 75,000 80,000 70,000 80,000
receivable
Inventory 60,000 70,000 80,000 90,000 80,000
Other 30,000 35,000 28,000 30,000 30,000
current
assets
Total 2,40,000 2,60,000 2,48,000 2,60,000 2,90,000
current
assets

Long term
assets
Total Long 20,00,000 18,00,000 20,52,000 18,00,000 21,00,000
term assets
Total assets 22,40,000 20,60,000 23,00,000 20,60,000 23,90,000

Liabilities FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

and capital

Current
liabilities
Accounts 4,00,000 3,60,000 4,00,000 3,00,000 3,50,000
payable
Current 5,00,000 5,50,000 6,50,000 6,00,000 5,00,000

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 borrowing
Other 60,000 50,000 50,000 40,000 60,000
current
liabilities
Subtotal 9,60,000 9,60,000 11,00,000 9,40,000 9,10,000
current
liabilities

Long term 10,00,000 9,00,000 11,00,000 9,40,000 9,10,000

liabilities
Total 19,60,000 20,10,000 21,25,000 18,35,000 19,90,000
liabilities

Total capital 2,80,000 2,00,000 1,75,000 2,25,000 4,00,000

Total 22,40,000 20,60,000 23,00,000 20,60,000 23,90,000

liabilities
and capital

7.4 Long-term plan

This is a five-year plan. Projections for further periods are not considered relevant at
this time

7.5 Important Points

1) The sales growth is assumed, there is no such definite percentage for sales
growth.
2) The Profit & Loss A/C and Balance Sheet of this company is prepared by
assuming the amount of profit and assets and liabilities of the company.
3) There is no fixed amount or fixed percentage of growth rate.
4) It is been assumed that business may have ups and down in the real scenario.

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