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Entrepreneurial Project

“ ”

IDEA
About “WHEAT & SMANAK Production, Processing
and Supply”
(MULTAN & Arifwala & Sahiwal)

Submitted to:
HAROON RASHEED
(Assistant Professor)
(Management Sciences)

Submitted by:
Muhammad Arbab Jehangir (0
Tauaha Naseem (019)
Muhammad Binyameen (041)
Mbasp09-A-B4
th
4 Semester in Finance and Marketing

COMSATS INSTITUE OF INFORMATION TECHNOLOGYSAHIWAL

The Most Merciful

All praise Is For Allah, The Lord Of The

Universe.

The Most Beneficial, The Most

Merciful.

The Master of the Day of Judgment.

(Al-Fatiha; verse:
1-4)

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In the Name of Allah, Most Gracious, Most Merciful
To see what is beautiful, our mind to know what is true; our heart to love what
is good.

Dedicated to
Holly Prophet Muhammad [PBUH]
The Greatest Social Reformer

To

Our Beloved
Parents & Family
Who taught us?
The first word to speak
The first alphabet to write

And first, step to take


Our Friends who helped us in our
All problems and stayed in touch with us

And Dedicated to

OUR HONOURABLE TEACHERS


Who always remain in our hearts?

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And are nearest, dearest and
deepest to us

Thanks

Table of Contents
About “WHEAT & SMANAK Production, Processing and Supply”..............................1
HAROON RASHEED..................................................................................................1
Table of Contents.............................................................................................................4
ACKNOWLEDGEMENT................................................................................................5
EXECUTIVE SUMMARY..............................................................................................6
The OPPORTUNITY ..................................................................................................6
PROJECT SCOPE........................................................................................................6
SOLVING A PROBLEM.................................................................................................7
Nature of Business............................................................................................................7
Statement of Confidentiality.............................................................................................8
Future out Look and Trends.............................................................................................9
Purpose of Partnership....................................................................................................10
Management team..........................................................................................................10
ORGANIZATIONAL STRUCTURE............................................................................10
Roles and Responsibilities..............................................................................................12
INDUSTRY TRENDS...................................................................................................15
INDUSTRY ANALYSIS...............................................................................................16
SWOT Analysis..............................................................................................................17
COMPETITORS ANALYSIS........................................................................................18
Target market..................................................................................................................22
Distribution channels......................................................................................................26
Channels of distribution............................................................................................26
FINANCIAL PLAN.......................................................................................................28
Brief Summary of Financial Projections....................................................................29
PAYBACK AND EXIT STRATEGY...........................................................................34
CRITICAL RISK FACTOR...........................................................................................35
Marketing risk............................................................................................................36
Operating risk.............................................................................................................36
FINANCIAL RISKS..................................................................................................36

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ACKNOWLEDGEMENT

Firstly, of all we are thankful to Allah Almighty for giving us the strength and
courage to complete this project.
Secondly, we would like to thank our course instructor, Mr. Haroon Rasheed,
for schooling us and for providing encouragement and much needed moral
support.
With the blessing of ALLAH ALMIGHTY we are able to complete our project the
business plan of Wheat supply and processing to provide Smanak that is very
difficult work for us but with the help of precious advices, encouragement and
valuable guidelines. We also give a lot of thanks to each and every person who
put his effort to make this project possible especially. It is also our duty to pay
thanks to our parents for the moral and financial support.

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EXECUTIVE SUMMARY

The OPPORTUNITY

The proposed project is Production of Wheat & SMANAK and supply. The
purpose of this proposed project is to meet the demand of SMANAK as well as
Wheat in many main cities where there is no proper platform which provides
Smanak. So for this shortage of suppliers the prices of SMANAK are much
more than in average cities and also not good quality. Basically SMANAK is a
form of Wheat which after processing used to produce a sweet “SOHN
HALWA”. This proposal reflects to understand the needs of a platform which
provide a good quality Smanak in lead time with low prices.
“SMANAK & Wheat Production and Supply” will greatly enhance the
opportunities for all the retailers and Wholesalers Sweat shops. We surveyed in
main cities where production of SMANAK is numberless but supply is from rural
areas and at high cost price and no any specific suppliers but individually poor
families produce average 2 or 3 mounds. So we have an opportunity to
produce and Supply in main cities sweets markets with low prices and good
quality.

PROJECT SCOPE

The planning horizon of the “Wheat and SMANAK production & supply” is for
next week. Key project scope out comes are as follows:
Production capacity: 60 mounds monthly
Supply capacity: 55 mounds monthly
Staffing: 04 members

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SOLVING A PROBLEM
Arbab Jehangir, Is General manager of “Wheat and SMANAK Production &
Supply” project to find the Solution of the Problem in a following manner.
We will be providing a neat, good quality Smanak in main cities Sweat market
where there is lack ness of Suppliers and also large prices.

Name of Business
The business which we are going to held is by the name of the “PURE
SMANAK”. It is situated in 141-A Shuja-abad Road near railway station
Multan.

Nature of Business
“PURE SMANAK” business model explains its strategic action plan to cope up
and sustain in corporate market in realized and smart way. PURE SMANAK"
planting infrastructure consist of its abilities,competencies, skilss,culture,
values, and management and operation style.

Company Mission Statement


The mission statement of “PURE SMANAK” firm is to meet the future demand
of Wheat and lack of Supply of SMANAK with quality and low prices.

COMPANY OBJECTIVES
The company objectives are as follows:
• To meet the demand of Sweets shops in main cities included main as well
as local.

• To increase the supply of SMANAK in main cities market.

• To boost up the economy due to innovate trend in the industry.

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Statement of Confidentiality
We expect honesty, openness and courtesy from all colleagues in their
business dealings. Our business respects creativity and innovation in routine
matters. This is to motivate everyone in the business to act in an ethical way
at his own discretion to protect the company and its reputation. We
communicate openly, directly and accurately with the public. We will not give
special treatment to any individual or institution. Confidential business
information must not be shared with others. Colleagues of the company work
best for the interest of company. They provide their full attention in business
activities. The use of company assets must be appropriate. We expect
Colleagues to use our resources in a responsible and ethical manner.
Colleagues must not take advantage of personal opportunities that may arise
through the use of corporate property, information or position. And at the end,
we are committed to free and open competition.
If you know or have knowledge of any legal violation in work-related issues of
these principles, you should report to manager so that we can take action. We
will make all proper efforts to protect the confidentiality.
I acknowledged that I have read and understand the above statement.

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Future out Look and Trends
As people knowledge and awareness going to be increase .and world
is going to be more globalizing the trends, tastes, and fashion is
continuously changing. People are more health conscious now .and
they are not ready to compromise on invaluable and unhealthy foods.
As we are going to provide “PURE SMANAK” which is specifically used
in making of Sohn Halwa. Now a days we also see that concept of
sweet shops and bakeries are increasing .and all companies
specifically prefer to provide the valuable products to customers. To
attract the customers to make them more loyal, to get more revenue
we specifically focus on this factor. After analysis we also find that
Alkhair bakeries, Iqbal sweets, freshco sweets, food festivals
bakeries, decent bakeries etc also have more focus on quality of
products. As the economical condition of Pakistan is fluctuating and
not stable .so in this environment it’s very difficult to maintain and
sustain the business and to earn profit. For this purpose companies
are striving to provide the valuable services to the customers .at
start we are focusing on some specific markets but after penetrate in
to the market we will increase our services and will provide services
to the more customers.
To make our services more efficient we will make special forums to
contact immediately to customers and suppliers for products. And
within passage of time we will convert our services on the internet to
the fast and direct access to customers. As start we are focusing on
some national and more on local shops that’s why our resources are
limited and our local customers also don’t have access to internet.
But within time as we will target more national or famous brands like
Gourmet, Rahat bakers, etc we will also provide more facilities on the
internet.
And also our future outlook towards establish the more warehouses
in the cities where our more customers are present. Like in Sahiwal,

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Faisalabad, Arifwala, Lahore etc. in this way we can manage all our
inventory system on internet.

Form of Ownership

The business is purely on partnership basis.

Purpose of Partnership

The purpose of partnership is to pool of resources for the expansion of


business. By this cooperation the expertise will enhance for the best
achievement of goals. And our organization will be privately owned. Because
the members will be less then 15.

Management team
Our business is on partnership. Our management team will be consisting on 4
members. The duties and responsibilities will be dividing among them. New
venture’s success depends upon its team member, their abilities, their working
ways and their relevant experiences

ORGANIZATIONAL STRUCTURE

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Arbab Jehangir

General Manager

Saima Zafar M.Binyameen


Marketing &
Tauha Naseem
Operation & Warehouse
Finance Manager
procurement Manager. Manager

Back Ground of the Partners

Management Rank Qualification Work Responsibilities


Team Level Experience

General Masters In
Arbab Manger Business No Specified Below
Jehangir with Finance
Specialization

Marketing & Masters in


Procurement Business
Saima Zafar Manager with No Specified Below
Marketing
Specialization

Operational Masters In
M.Binyameen & Business No Specified Below
warehouse with Finance
Manager Specialization

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Tauha Finance Masters In
Naseem Manger Business No Specified Below
with Finance
specialization

Roles and Responsibilities


General Manager
Muhammad Arbab Jehangir (MBA-A-003)
 Assigning the task to the team member
 Make sure every member of the team working according to the
requirement
 Solving the work related problems
 Creating good relationships among the managers
 Work as a liaison in and out side the team
 Creating supportive work environment
 Creating collaboration among the different departments
 Identifying the training needs
 Designing training and development programs
 Create the linkage between all team members
 Designing the compensation plan

Marketing & Procurement Manager


Saima Zafar (MBA-B4-011)
 Identifying the market

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 Designing packaging
 Making marketing plan of the product development
 Executing the marketing plan
 Identifying the segments according to the attributes of the product
 Making promotional plan including Advertisement and packaging
 Close coordination with distribution manager for the selection of place
 Setting price with the collaboration of finance and Admin. Head
 Any additional work assign by the administrator
 Insure the availability of raw material on time
 Insure the quality of raw material
 Manage the transportation for raw material
 Maintain the stock level of raw material

Operations & Ware house Manager


Muhammad Binyameen (MBA-B4-41)
 Designing the manufacturing process
 Making sure the proper working of manufacturing process
 Plant maintenance and overhauling
 Stock maintenance
 Achieving the production targets
 Managing the production activates
 Making sure the product quality according to set standers
 Solving the worker issues at production area

Finance manager
Tuaha Naseem (MBA-B4-19)
Tasks and duties
 Costing
 Arranging the funds
 Maintaining records

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 Assets handling
 Making payments
 Wages
 Raw material purchase
 FOH
 Finding the ways to reduces the expenses
 Any additional work assign by the supervisor

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INDUSTRY TRENDS
Sweets are the main and important part of out culture from decades of
decades. it is our cultural heritage. People in our culture have different tastes in
sweets as compared to west. People in west eat Chocolates mostly as sweets
but in our culture these called Mithai. In Mithai mostly include Rusgullah,
gulabjamen, barfi; Sohn Halwa, etc. so as our part of culture sweets shops are
situated in every city and in every part of city. Sohn Halwa is the most famous
sweet among all sweets and also are using from decades. The main hub of
Sohn Halwa is Multan. The main dealers which are providing the Sohn Halwa
are Hafiz Halwa, Abdul Wadood in Multan. It is made by boiling a mixture of
water, sugar, milk and corn flour until it becomes solid. Saffron is used for
flavoring. Ghee is used to prevent it from sticking to the pan. Almonds,
pistachios and cardamom seeds are added. As awareness among people is
going to be increase they are more focused towards the quality and value able
products. as according to the different survey in Multan, in Arifwala, in Sahiwal,
in Pakpattan, in Lahore we examine that the Raw material which are used in
making the Sohn Halwa are not prepared according to the quality levels .Corn
flour which is made by the wheat processing called SAMANNK specially not
prepared with level of quality .our Company as name present PURE SAMANK
are going to provide SAMANK purely quality able. As QUALITY IS NOT
COMPROMIZED. Different shops like Iqbal sweets, Decent bakers in Sahiwal
take SAMANK from different suppliers specially from Pakpattan. To provide the
full nutritious products to customers is very important because as demographic
factors are going to be changed people tastes are continuously changing. As
first they prefer to use the sweets in happy occasions specially like on Eid,
wedding ceremonies, to give as gifts, to celebrate any happy and success
events. But now as environment is going on changing many other industries
have been made their entrance. Now day’s people more prefer to use the fast
foods like Burger, pizzas, etc. in this way to compete among all those industries
sweets industry have to provide the more value able and full nutritional
products. So our enterprise focusing on this to cover the gap of environment.
Different enterprises are trying more to attract their customers.

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Business size
The industry size of the our company “PURE SMANAK “ is currently small in
size but in future there is great expectation to expand it.

Industry Attractiveness
“PURE SMANAK” is in its growing stage. So at start its attractiveness can be
low due to face different situations and different competitions and to gin a
market share .but once its establish it will be very attractive because the
demand of sweets can never be ended from Pakistan.

Profit Potential
As we are going to enter in market by providing the services of backward and
forward integration to our customers so it will be our strong point than our
competitors on the basis of this the potential profit is very high because our
national and international competitors have indirect relation with their suppliers

INDUSTRY ANALYSIS

Pest Analysis

SOCIAL FACTORS
Social factors like people community ,events, culture all ill
support our business .because the use of sweets are included in our culture
,what ever the event people prefer sweets. And especially in Multan Sohn
Halwa is the most famous and delicious sweet .so all social factors will support
our business. As Wheat is a basic food of Pakistani People. We will provide the
same wheat as well as in form of Smanak to Sweat shops and surplus Wheat
will sale out to the people in that area.

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POLITICAL FACTORS
Here the political factor can interfere in our dealings .as
government increased or decreased the wheat prices. As we are going to do
the backward integration by our company itself. so it will be a positive point for
us that at time of shortage and prices fluctuation we can utilize our own
production.

ECONOMICAL FACTORS
As the economical condition is going to in rescission so the
fluctuation in prices is very simple and common factor in these days. to cover
and avoid the economical loss we are going to produce and deliver our wheat
field according to our requirement.

TECHNOLOGICAL FACTORS
At start w are not going to use any advance technology. Except the basic
machinery for wheat production and also to provide the internet facilities up to
some extant. after penetrate well in market then we will deliver our services by
using the internet with value added services like EDI and EFT.

SWOT Analysis

STRENGTHS

A firm’s strengths are its resources and capabilities that can be used as
a basis for developing a competitive advantage. Examples of such strengths
include:
• Lower cost and selling price

• No direct competitors in the local market

• Quality plants

• Efficient delivery to customer according to demand and requirements.

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WEAKNESSES
The absence of certain strengths may be viewed as a weakness. For
example, each of following may be considered weaknesses:
• Our direct competitors can be great risk for us.

OPPORTUNITY
The external environmental analysis may reveal certain new
opportunities for profit and growth. Some examples of such opportunities
include:
• Attractive market and industry

• Good profit by good quality and lower prices

• Opportunity to enter into different segments in future.

• To target the national brands also.

THREATS
Changes in external environmental also may present threats to the
firm.
Some examples of threats include:
• Emergence of substitute products
• Indirect competitors

• Poor economic and political conditions in Pakistan

• Customer tastes is continuously changing .like chocolates, pastries etc


give the tough time to desi sweets.

COMPETITORS ANALYSIS
For rivalry competition Michel Potter give five forces model. which
enable us to understand the competitors in every aspect of market.

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Bargaining Power of Suppliers
As we are new entrants and sweets bakeries already working so to
provide them services more valuable and make our trust on them the
bargaining power

of suppliers are less then customers. At first this will be our strong
point to give customers our confidence.

Bargaining Power of Customers


Here the bargaining power of customers will be more. Because they
are operating in market from last duration. But to attract them, to
provide them our
Services, to give them assurance about our services and products we
have to fulfill some of their requirements related to discounts, prices
etc.

Rivalry among Competitors


We have little competition on local levels but comparatively on
famous brands we have intense competition. As local bakeries ready
to take services from us but to target the famous brands we have a
strong competition because they have their own contracted suppliers
.So to compete to them we have to provide our best services. And
these can occur to cover the small market first.

Barriers to entry
As there is ever growing demand of sweets especially of Sohn Halwa
in Multan and other cities too. So entry into market where always
growing demand is present barriers is lower. Also we are entering by
lower price strategy to avoid the direct competition.

Substitutes

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All other sweets other then the Sohn Halwa are the substitutes of our
product.

Market Segmentation
 Market research will show that a particular product appeals to a
specific group of people. Producers need this information to
identify groups with similar needs.

 Breaking down a market into sub-groups is called market


segmentation.

 A market segment is a subgroup of people or organizations


sharing one or more characteristics that cause them to have
similar product needs.

 It is distinct from other segments (heterogeneity across


segments)

 It is homogeneous within the segment (exhibits common


attributes)

 It responds similarly to a market stimuli

 It can be reached by a market intervention

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The segment which we are going to serve our services should be
large enough to provide the profits to company. And it should be
measured carefully related to the purchasing power of the customer,
size, and their buying behavior. Our segment should be served well.
That the market to whom we are going to target should be served
well according to their requirements and needs. And it should be
attracted well by different packages.
We are going to target the subgroup of sweets .in which we will only
focus on the Sohn Halwa Sweets. We are not going to target the
mass market.

Bases for Segmentation in Consumer Markets

Consumer markets can be segmented on the following customer


characteristics.

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• Geographic
• Demographic
• Behavioralistic

Geographic Segmentation
The following are some geographic factors of our products.

• Region: Punjab, Pakistan


• Size of metropolitan area: Multan, Sahiwal, Arifwala, Kabirwala &
Khanewal.
• Population density: urban, suburban, or rural.
• Climate: in all weather.

Demographic Segmentation

Some demographic segmentation variables include:

• Age: above 5 years and all


• Gender: male, female both
• Income: lower, Middle, Higher income classes
• Social class: all

Behavioral Segmentation

Behavioral segmentation is based on actual customer behavior toward


products. Some behavioral variables include:

• Usage rate: specially on occasion, events etc,


• User status: potential, first-time, regular.

Target market
As PURE SAMANK is providing services in B2B. Different sweets shops and
bakeries .like Gourmet, Nirala bakers, decent bakery, Iqbal sweets, cakes and

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bakes, united bakers, Rahat bakers ,Al Khair bakers Freshco bakers ,food
festival sweets shop, etc. these shops are those which are providing different
sweets to customers in Multan, Sahiwal. Among these markets our main focus
will be on local shops like Alkhair bakers, freshco bakers, food festival sweets
shop, and Iqbal sweets. The main to target these shops is that these shops are
targeting the all income classes groups .these markets are trying to penetrate
well in market. And as we are new entrants in market so providing our services
to these markets we can establish our market well.

Product Feasibility and Strategy

Marketing mix of any company is consist of 4p, s.

Providers Customers
Product
Solutions

Price Represents Customer Cost

Place Provide Convenience

Promotions Enable two ways


Communication

Product

As we are going to provide the “Product SAMANK ” which is specifically used


for making the Sohn Halwa as an important ingredient. The specialty of our

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SAMANK than the other suppliers is the Quality based. As according to survey
the supplier does not have the concern about the cleaning process of wheat
processing. So the quality is the main focus as Our Tag line Present that
“QUALITY IS NOT COMPROMISED”.

Packing
We will provide SAMANAK in special packets to maintain the level of quality
and cleanses .as our main targets markets also focusing on providing the best
products to customers. So it will be our specialty.

Price
Price is the value that customers give up to obtain desired product.

Pricing Strategy
When company starts they used pricing strategy keeping in A key
advantage of maintaining a strong brand image in a competitive market is a
degree of flexibility in the pricing strategy. It is a common characteristic of
imperfectly competitive markets for producers to concentrate on non-price
competition view the competitor price.
This will help him to take the maximum market share. We will
charged our price according to estimate all direct and indirect cost.
But our main focus will be on penetration strategy.

Penetration Strategy
That as we are new entrants so first we will enter to compete the
other suppliers of Samank by lower prices. After than given the
confidence about out quality level than we will go towards charge the
price high.

Place

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As Multan is the main hub of Sohn Halwa manufacturing. So we re
going to make the ware house for SAMANK there. And we will provide
the SAMANK according to the requirements and need to our target
market. To make any product successful it’s essential to provide at
right time and according to customer Demand.

Promotion
Promotion is a communication process that takes place between a business
and its various publics while advertising is making people aware of a product or
service in hopes of persuading them to buy it.
As we want to give knowledge to our customers about our product.
We will use different promotional tools. Like we will use different Print
Media, electronic Media.

Direct Marketing
Is that in which organization communicate directly with the target
customers to generate a response and a transaction. So we will use
this tool to direct access to our customers to provide information
about our product to customers .we will do direct marketing by
perform different activities like by mail ,internet. This tool is also
plays a very important in business to business marketers. It is helpful
to convince the consumer. We also deliver the customized message
to the customers. And by using this tool we can easily measure the
effectiveness of the response of customers.

Personal Selling
A form of the person to person communication in which a seller
attempts to assist buyers to purchase the company products. So to
promote our product we will use this by communication with
customers .this will be done by either by face to face communication
or by using the telecommunications such as Telephone .this
promotional tool will help to make communication more flexible with
customers .this promotional tool is very help full to make the

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understandable about our product to customers. This will also help to
get the immediate response of the customer.

Print Media
To promote our enterprise we will also used the print media in which
we will make our calnaders, different pamphlets to give knowledge
and awareness about our product features, and specialty.

Distribution channels
As we are going to make our warehouse at the Multan and to provide the
services to the customers in Multan and In Sahiwal and to Arifwala we will use
direct distribution channel. We have our self-selling so we have direct
distribution channel and no partnership with distribution channel.

Channels of distribution

Distribution encompasses all the activities that move a firm’s product from its
place of origin to the consumer.

“PURE SMANAK” will use direct selling that is a dynamic, vibrant and rapidly
expanding channel of distribution for the marketing of products and services
directly to consumers being able to control the process of moving their products
from their place of origin to the end user instead of relying on third parties is a
major advantage of selling direct.

Take wheat Bring to ware Processing


from fields house

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Distribute to
customers

Production Plan
The method of production of Smanak is given as follow:
There are some steps involved in Smanak production process, given below;
• The production period of Smanak will be start from January 15, 2011.

• There are 8 – 10 days required to complete specific quantity.

• Firstly we will spread 20 mounds wheat in open land, which we hired on


rent with boundary.

• Then cover by jutes all wheat and watering by labor when required.

• After 3or 5 days there will start putting out greenery from wheat and
gather hardly.

• The 6th day, workers start work to uncover all wheat and open the wheat
packs which hardly gather and spread in sunny land.

• After 2 to 3 days there will be complete Smanak to use in further


grinding and for making Sohan halva.

• Then Smanak packs in packets and send to grinding machine room for
grinding.

• Then packs in 20 kg and 40 kg jutes as per required.

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Operational Plan

1. We hired land on rent from our Partner father

2. We have taken 1acre land for processing on Wheat to finished product.

3. We have purchase 325 mounds wheat is this season at fix rate from
Relative farmer.

4. We will purchase another 325 mounds in next season of this year in June
for next six month production.

5. Our future plan is to start backward integration approach, as to produce


wheat our self on rent land and producing wheat for our Smanak
production.

6. We will work it as side business in first year as hire employees there for
supervision and to process on wheat.

7. Our marketing manager visit markets every 15 days to check out market
demand and situation etc.

FINANCIAL PLAN

Capital requirement of “Pure Smanak” for 1 year


The required capital for our business plan, named as “Pure Smanak”, which will
be supplied by our management team. The capital requirement for the first year
is given below in the table marked as initial resources.

Sources of funds
Sources of fund categorized as:
1. The capital provided by our management team

Uses of funds

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The funds will be use for acquiring the Rent land, purchase inventory,
purchase of rickshaw, purchase of machinery and other material, plastic and
salary of labor.

Budget Contribution
The followings amounts have been contributed by company partners the
amounts are in Pak rupees.

Muhammad Arbab Jehangir 200,000

Saima Zafar 200,000

Tuaha Naseem 200,000

Muhammad Binyameen 200,000

Total Contribution 800,000

Brief Summary of Financial Projections

As Smanak production and supply is an entrepreneurial business that why we


have no any past financial data. So with the help our analysis and results of our
survey that shows the projected sales, income statements, balance sheets and
cash flow statements for first year initially.

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“Pure Smanak” has four active partners, who are fulfilling capital requirements
for setup the business venture in Multan, up to some extend but we need
investors to meet its startup cost.

Pure Smanak
Projected income statement
For the year ended December, 2011

Sales (600*3200) 19, 80000


Rent of Land 25,000
Direct expanses 10,000
Cost of sales (600*1100) 6, 60,000 6, 95,000
Gross profit 12, 85,000

Admin. Expense
Salary of partners (15000*4*12) 7, 20,000
Salary of employees (2*5000*12) 1, 20000
(1*8000*12) 96,000
Selling expenses (2000*12) 24,000
General expanses
Utility Bills (3000*12) 36,000
Dep. Of Rickshaw (60000/12) 5,000
Dep. Of Machinery (50000/12) 4,167
Polithen bags, sheets, jutes 20,000
Total admin & General Expanses 10, 25,167
Net income 2, 59,833

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PURE SMANAK
Projected Cash flows statement

Cash flows from operating activities


Cash received from customers 19, 80,000
Cash paid to employees (9, 36,000)
Rent paid (25,000)
Paid selling expense (24,000)
Net cash flows from operating activities 9, 95,000

Cash flows from investing activities


Inventory purchase (650*1100) (7, 15000)
Purchased jutes etc (20,000)
Net cash flow form investing activities (7, 35,000)

Net increase in cash 2, 62,000

PURE SMANAK
Projected Balance Sheet
As on 31 December, 2011

Assets
Current Assets:
Cash 2, 62,000
Inventory (50*1100) 55,000
Machinery (60000-4167) 55,833
Rickshaw (60000-5000) 55,000
Total assets 4, 27,833

Liabilities & Owner’s Equity

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Owner equity 1, 68,000
Net income 2, 59,833
Total liabilities & equity 4, 27,833

Cost Analysis
Produce 200 kg of Smanak per month.
Average price of Smanak is Rs.3300 per 40 kg.

Running cost annually


Items Weight Price (Rs.) Total (Rs.)
Wheat 600 kg 1100/mn 6,60000
Diesel 10 L 73 18,250
Petroleum 60 L 75/L 4500
Labor 2 workers 5000 120000
1 worker1 8000 96,000
Rent2 1 acre ----------- 25,000
Packaging3 5,000
Promotional 10,000
expenses
Total cost 938,750

If we increase our production from 10,000 kg to 20,000 kg then we need just


Rs.88, 800. Which approximately increase the running per month cost Rs.524,
750 to Rs.800,000.

1
One worker also work as security guard so we are paying Rs. 2000 extra
2
Per year rent of 43,529 sq,ft is approximately Rs.15,000 so per month expense 15,000/12=1,250
3
Cost on 1 kg pack ≈ Rs.2 and total cost of 2500 pack x 2 Rs. = Rs. 5000 for our elite class,
cost on 20 kg pack ≈ Rs.10 and total cost of 375 pack x 10 Rs. = Rs. 3750, so the total cost of 10,00kg
is 5000+3750= Rs.8750

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Initial investment required
Fixed cost (for 6 month) Rs. 357,500
Running cost (for 6 month) Rs. 512,583
Total investment requires Rs. 870,083

With single manufacturing unit, we will be able to produced 325 mounds at the
cost of Rs. 512,583 for first six month. After six month we will start decreasing

our promotional expense. After 6 month we will also able to enter next main
market like Faisalabad and other to supply.

Expected revenue (for 1st six month)


50% sales @ Rs. 3200/mn Rs. 6, 30,000
Total sales 6, 30,000

Production cost (5, 12,583)


Expected profit Rs. 117,417

Expected revenue (after one year)


100% sales @ Rs. 3200/mn Rs. 19, 20,000
Total sales 19, 20,000

Production cost (17, 20,167)


Expected profit Rs. 199,833

With this calculation our profit will increase as we increase Smanak per
mounds because we increase cost.

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PAYBACK AND EXIT STRATEGY
As Pure Smanak is an entrepreneurial business so there is lot of risks and
hurdles in the way of fully establishment business. After analyzing our
opportunities and risks we develop a strategy for leaving the Pure Smanak and
make the ways to exit from the business.
The exit strategy of zephyrs as follows:
• If any partner exits from the business he or she cannot start the similar
nature of business in next five years after his or her exit.

• Legal documents of partnership will be signed by the partners that


partnership will not be resolve until 5 years.

• After five years if any partner wants to exit then he has to inform to the
firm at least 1 year before.

• If any partner exits from the business, he or she will get his or her share
after 3 years.

• In case of losses every partner will be just liable for their share in
organization.

• In case of winding up the organization amount received from sale of


asset will be divided among partners and investors according to their
shares.

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CRITICAL RISK FACTOR

There is no business in the world from which we can eliminate the risk factor. A
business can face the risk from different fronts;
• Management risk

• Marketing risks

• Operating risks

• Financial risks

The risk cannot be eliminated but it can be minimize by proper measures at


proper time.

Management risks
There are no any specific suppliers in the market which efficiently supply
Smanak but individually people make it at very small level and not at all time,
so, in our computation that’s why we are pioneer in our field or you can say first
mover.
There will be any dispute among the management team.
Human capital is the main key resource now a day so if there is any dispute
there in the management risk so that there can be a problem for the business.

Solution

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There is no problem in the world which cannot be solved.
We have the legal documents that no one of us can start new business with
same name or same nature.

Marketing risk

Marketing in now days is a challenge for the companies and a big risk is there
that: Where to position our product?
What are the financial problems for marketing?

Solution
• We will positions our product to these place where there is huge
demand

• Give add in FM radios at suitable timings.

• We have a plan to adjust the marketing plan in a given financials

Operating risk

The security risk is the main factor now a day for any business.
For Pure Smanak there will always a security risk.
Quality control is also a risk for our business.

FINANCIAL RISKS

Financials are the major risk factor for any business. Same is the case with our
business. There is recession in the economy. That’s why we are not expecting
lot of profit in first years because we focus firstly on low price at same quality.

Conclusion and Recommendations:

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As per market analysis, it is sure that our project will be successful because of
no specific supplier in main market, so we have good opportunity to enter this
business venture.

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