Business Development Plan

Prepared for:
Muhan Drinking Water Pvt. Ltd.
Pokhara 19, Puranchaur

Prepared By:
Ms. Shristi Poudel
MBA (FT), 4th Trimester
Roll no: 21221171

Submitted To:
Associate. Prof. Bal Ram Bhattarai
Pokhara University, SOB
(For the partial fulfillment of the requirement for the degree of MBA
curriculum)
July 2023
 Table of Content
ACKNOWLEDGEMENT ................................................................................................................. iv
DECLARATION ................................................................................................................................ v
EXECUTIVE SUMMARY ............................................................................................................... vi

1. BUSINESS AND ORGANIZATION STRUCTURE ................................ 1

1.1 BACKGROUND OF THE STUDY ....................................................................................... 1
1.2 BACKGROUND OF THE ORGANIZATION ...................................................................... 1
1.3 MISSION STATEMENT ....................................................................................................... 1
1.4 OBJECTIVES AND GOALS OF THE ORGANIZATION ................................................... 2
1.5 FORM OF THE ORGANIZATION ....................................................................................... 2
1.7 LOCATION ............................................................................................................................ 3
1.8 HUMAN RESOURCE MANAGEMENT .............................................................................. 3

2. PRODUCTS AND SERVICES.................................................................... 4

2.1 THE PRODUCT AND SERVICES .............................................................................................. 4
2.2 PLANT / OFFICE LOCATION AND ITS LAYOUT ................................................................. 4
2.3 PRODUCTION EQUIPMENT AND MATERIALS ................................................................... 5
2.4 ENTERPRISE RESOURCE PLANNING.................................................................................... 5
2.5 PRODUCTION AND OPERATION PLAN ................................................................................ 5

3. ENVIRONMENTAL ANALYSIS............................................................... 7
3.1 BUSINESS SCENARIO ANALYSIS .......................................................................................... 7
3.2 SWOT ANALYSIS ...................................................................................................................... 8
3.3 FIVE FORCES ANALYSIS ......................................................................................................... 8

4. MARKETING PLAN ................................................................................. 10

4.1 MARKET ANALYSIS ............................................................................................................... 10
4.2 COMPETITOR ANALYSIS ...................................................................................................... 10
4.3 PRICING STRATEGY ............................................................................................................... 11
4.4 PROMOTIONAL STRATEGY.................................................................................................. 11
4.5 SUPPLY CHAIN MANAGEMENT .......................................................................................... 11
4.6 SALES FORECAST ................................................................................................................... 12

5. FINANCIAL PLAN .................................................................................... 13

5.1 INVESTMENT PLAN................................................................................................................ 13
5.2 FINANCIAL PLANNING.......................................................................................................... 13
5.3 EXPENDITURE AND OVERHEAD ANALYSIS .................................................................... 14

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 5.4 PROJECTED INCOME STATEMENT ..................................................................................... 14
5.5 PROJECTED BALANCE SHEET ............................................................................................. 14
5.6 PROJECTED WORKING CAPITAL REQUIREMENTS. ....................................................... 15
5.7 PROJECTED CASH FLOW ...................................................................................................... 15

6. RISK MANAGEMENT AND ASSUMPTION .......................................... 16

6.1 RISK ANALYSIS ....................................................................................................................... 16
6.2 ASSUMPTIONS FOR BUSINESS OPERATION ..................................................................... 17

7. CONCLUSION ........................................................................................... 18
7.1 SUMMARY ................................................................................................................................ 18
7.2 CONCLUSION ........................................................................................................................... 19
7.3 RECOMMENDATION .............................................................................................................. 19

REFERENCE .................................................................................................... 20
ANNEXURE ...................................................................................................... 21
Annex 1: Projected Income Statement .............................................................................................. 21
Annex 2: Projected Balance sheet ..................................................................................................... 22
Annex 3: Projected Cash Flow.......................................................................................................... 23

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 ACKNOWLEDGEMENT

This report is to fulfill the requirement of the 'Business Development Plan' report writing
section for the 'Feasibility Study' of projected business in the 4th Trimester of MBA. This
report portrays our interactions with the natives of the particular businessman. Moreover, the
information depicted is true to my knowledge. It encourages the students to have their
venture and give something new to society. Therefore, the information is not fictitious and is
simply an approximate study of a Water Distillery Company.

I would like to express sincere gratitude towards Associate Prof. Bal Ram Bhattarai who
provides this opportunity and continuously guides and help in every step of this report.
Without his coordination and support, this work would be incomplete.

I am very much grateful to all those who directly/indirectly helped in preparing this business
plan. I always believe that there is always room for improvement and accordingly we will be
looking forward to receiving suggestions for further enriching the quality of tasks that we
perform. This business plan is the result of continuous effort and hard work. I would like to
furnish my trustworthiness to all our friends for support in my report writing process.

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 DECLARATION

This is to certify that I have completed my Business Development Project for my "Muhan
Drinking Water Pvt. Ltd." under the guidance and supervision of Associate Prof. Bal Ram
Bhattarai, in the partial fulfillment of the requirements for the degree in Masters of Business
Administration from Pokhara University. This is my original work and I have not submitted it
elsewhere.

Date: 31/7/2023
Shristi Poudel

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 EXECUTIVE SUMMARY

Muhan Drinking Water is a drinking water processing company. Its main motive is to provide
pure and clean water through using water treatment technology. There are different methods
to purify water and, in this report, the company is using Reverse-osmosis (RO) technology to
purify the water. The company is focused on processed drinking bottled water and jar water
for general consumers. So, the product of the company is to produce drinking bottled water in
two categories and they are 1ltr bottle, which is easy to carry while traveling, and 20ltr jar for
household use.
Nowadays, we are facing the problem of clean drinking water shortage. Water supplied from
Nepal Khanepani Sansthan is not suited for drinking without any treatment. This kind of
problem can be seen mostly in city areas. There is a huge demand for purified drinking water
in the market. Not only this, but while traveling we also face the problem of drinking water.
While traveling we can’t find a good and pure source of water which is drinkable so, in that
case, also bottled water is the best option. By seeing the problem of water, we can say that
there is good opportunity for a drinking water processing company in Nepal. There are many
other water processing companies in the market, that’s why we will study how to compete
with them and what will be marketing plan to gain market position.
We will be marketing on the B2B model which means business to a business model. Due to
the nature of the company, we will be doing the B2B model. This report will explain how the
company competes with other existing companies and what type of marketing plan will be
implemented to gain a competitive position. The report will present how the product will be
introduced in the market with the help of various promotional displays, electronic media,
print media, and advertisements. This report includes detailed descriptions of the processing
of the water, the materials that will be required, the manufacturing process, the training and
recruitment process of employees, and the financials.
For this purpose, we have analyzed the market and found out current market opportunities.
We also tried to find out the market segmentation, target market, and market positioning
strategy. Then we conducted a SWOT analysis of the company to see the company’s
strengths, weaknesses, opportunities, and threats. Continuous development in future helps us
to know the opinion of the public about our product and developed it according to the
customers changing needs and demands.

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 1. BUSINESS AND ORGANIZATION STRUCTURE

1.1 BACKGROUND OF THE STUDY

Our business idea is to establish a local factory in Pokhara to process drinking water from boring
water extracted from the well. The main target is to capture the bottled water market. There is a
huge use of processed drinking water in the city areas and mostly in traveling areas. With the
new concept of printing the hotels' logos and name in the packaging, we are applying a unique
type of marketing strategy in the market. Not only this, we are reusing the used bottle, that’s why
we are eco-friendly to nature. Through the concept of a new marketing style and eco-friendly
nature, we are competing in the market.

1.2 BACKGROUND OF THE ORGANIZATION

Muhan Drinking Water Pvt. Ltd will engage in the production and selling of purified water. The
basic function will include giving the client the processed water in two different packed bottles
and are 800 ml bottle and 20 liters jar. We will be using some old material i.e. reusing the used
jar by cleaning them again to reduce our cost. The outer cover will be of good quality and
presentable thus delivering our clients with attractive packaging. We provide a solution to the
problem of pollution due to disposing of plastic wastage by reusing used bottles. We plan to
reduce the plastic bottle problem by rewarding our patrons who submit used water bottles with
discounts on purchase of our product. Our motive is to provide pure drinking water and on the
other hand, eco-friendly by reusing the used bottles.

1.3 MISSION STATEMENT

Muhan Drinking Water Company is committed to producing and marketing purified and clean
drinking water to customers around Pokhara valley and some portions outside the valley. We
focus on providing a better service to the customer and in addition easy availability of our
product. The use of a computerized inventory management system is done to help the company
increase its efficiency. Unlike other water plants, we establish and maintain long-term mutually
rewarding relationships with our customers. The mission statement is:
"Ensuring water as pure as gold."

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1.4 OBJECTIVES AND GOALS OF THE ORGANIZATION
The following are the objective of the company:
 Become a leader in the premium drinking water category.
 To provide job opportunities to the local people.
 Motivating people and companies to become eco-friendly and save the environment.
 To provide products at lower cost and better quality.
The following are the goals of the company:
 To make clean drinking water available to every Nepalese.
 To expand our operations to Pan-Nepal scale.
 To become the best bottled drinking water brand in Nepal.

1.5 FORM OF THE ORGANIZATION

We plan to incorporate our business as a private limited company registered under Companies
Act, 2063. This will enable easy onboarding of prospective investors and will ease the future
expansion plans of the business. All business decisions will be taken by the CEO, Ms. Shristi
Poudel, in consultation with the Board of Directors.

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1.6 ORGANIZATIONAL STRUCTURE
As our business is fairly new, we need a simple organizational structure. The company will have
a board of directors who will appoint a CEO. The CEO will be incharge of all business and
financial Decisions. There will be three departments directly supervised by the CEO, namely
administration, marketing, and production department. In this way, our company will be having
simple organizational structure. For a better understanding we can see the chart below:

Board of
Directors

CEO

Administration Marketing Operations

Department Departmant Department

Fig 1: Organizational Hierarchy

1.7 LOCATION
Our company will be located at Puranchaur, Pokhara-19 which is well connected to approach
road. The easy access of road will help for timely delivery of our products and can get the
needed resources for the company easily. The company will be on 2 Ropani of land. Electricity is
easily available there. The main resource for our company is water and we are close to natural
springs and Seti River so, boring the water would be fruitful for us. We won’t face any problems
in the case of water extraction.

1.8 HUMAN RESOURCE MANAGEMENT

Human resource is the major pillar of the organization and an organization must make its pillars
strong enough to hold the company. The right person for the right job will be there and we will
work as a team and treat every member equally. Especially, our company is labor intensive. We
need four persons in the purification and packaging plant, one administrative staff, two drivers,
three marketers, and one security personnel. In total, we need 11 employees in our company.

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 2. PRODUCTS AND SERVICES

2.1 THE PRODUCT AND SERVICES

There is not much uniqueness in the design of the product. As water is our main product so there
not much effort. The thing we need to focus on is to design or shape of the bottle. Generally,
most companies have round molding for the 800 ml bottle. We plan on using square molding for
bottles which gives us a unique look from others. Square molding is more efficient because its
base is more stable than a round one. Not only this, because of the square shape it consumes less
space for stores while storing them in the store room. We also provide customized labeling for
bottles which gives us a unique identity in the market. As there is less number of squared bottles
in the market, our product will easily recognizable in the market.
Though 20 L jar sizes are standard, we plan to have embossed jars that will result in our jars
standing out from the competition and not being mixed with others.

2.2 PLANT / OFFICE LOCATION AND ITS LAYOUT

Our company will be located at Puranchaur, Pokhara-19, far from the human residents and a
place where natural water is enough for the company to run. The location will be selected far
from the residence so that people don't get troubled by the noise. The company will be located in
a place that has a good facility for road, transportation, electricity, water, etc.
Good security will be provided in the company and only the authorized person will be allowed to
get in. Best qualities of water bottle are brought and clean working environment will be
maintained. Good working conditions maintained, and wide windows for summer and a heater
for winter are made available. Safety measures will be followed for the health of employees and
consumers. There will be one storeroom where keep stocks of new and empty plastic bottles.

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2.3 PRODUCTION EQUIPMENT AND MATERIALS
The company needs various kinds of materials and equipment. Some necessary materials and
equipment that are needed are as follows:
 Industrial Water Purifier
 Water filling machine
 Labeling machine
 Packaging machine
 Land and building
 Vehicles
 Human resources
 Water and electricity
 Office Supplies
 Other necessary tools and equipment

2.4 ENTERPRISE RESOURCE PLANNING

We plan to use Tally.ERP for our business. It will be able to meet our need in the early days. The
company plans to use ERP for inventory management, quality assurance, financial management,
HR and payroll management, so that it makes our everyday activities simpler and more
productive allowing us to screen, manage and optimize quality, staff execution, and cost control.
It will be designed to record all transactions and activities involved in processing and packaging
and delivering functions such as Purchases, Sales, Expenses, Advertisements, Production, and
Accounting. . The use of all these make our business more successful.

2.5 PRODUCTION AND OPERATION PLAN

Though the crucial part of our operations is performed by machines, we need machine operators
to monitor the performance of the machines. Machines automatically clean and fill the bottle.
Only one person is required to operate one machine. The packing and quality control is done
manually. Only 2 persons are required to pack the bottles. We plan to be working in one, eight-
hour shift per day. Quality check will be conducted on every production batch. We must check

5
the leakage on seals and any mix on the water. The manpower and machinery taken in this plan
are based on the production target requirement and on the time taken for each process. At initial,
we plan to operate at 50% capacity. As we start acquiring market share, we will gradually
increase our operations. We will run the machine in two phases. One phase is for 800 ml bottle
and the second phase is for a 20-liter jar. According to the market demand, we plan to allocate
the production phases.
Operation is based on the order in the market. The operational activities in the organization are
order processing, manufacturing, and delivery.

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 3. ENVIRONMENTAL ANALYSIS

Environmental analysis is the part where we analyze the market situation under the external
environment. In this part, we study the industry analysis, marketplace analysis, customer
analysis, and competitor analysis.

3.1 BUSINESS SCENARIO ANALYSIS

Some business scenarios and its analysis are described below:
 Political factor: The political condition of our country is not good and due to the
frequently changing government it is difficult for the new business to start. It delays
documentation works or registration for the new venture. Corruption and bribery is seen
everywhere.
 Technology: Our company is using high technology for inventory management and for
other works within the firm which will be the increasing quality of our products. It will
also provide job opportunities for the local people nearby the firm. The use of modern
technology and human resource will enhance the quality. The latest technology is being
used in our company, but there has frequently innovation of machinery that our machine
may be old fashioned in a short time.
 Economy: Though the economic condition of our country is not good the firm seems to
be doing good because customers who consume our products are high in number in the
market and the existing competitors are also not able to fulfill the demand of the
customers.

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3.2 SWOT ANALYSIS
In SWOT analysis we analyze the strength, weaknesses, opportunities, and threats to our
organization. It analyzes the internal and external environment of the organization. The below
table shows the SWOT analysis for our business:

Strengths Weaknesses
 Optimized machine able to process  Lack of experience
more bottles per minute  Small Equity Capital Capacity
 In-house label printing machine
enabling customization of bottle labels
to meet consumer’s needs.
Opportunities Threats
 With the rising population, need for  Production process can be easily
clean drinking water is increasing. replicated
 People are getting more health  Established competitors can use
conscious predatory pricing strategies.
 Technological advancements.
Fig 2. SWOT Analysis

3.3 FIVE FORCES ANALYSIS

In the industrial environment, there are a set of factors that directly influence a firm and its
competitive actions and competitive response. These industry environments are composed of the
threat of new entrants, power of suppliers, power of buyers, threats of product substitutes, and
rivalry among competitors. The interactions among these five factors determine an industry's
profit potential.

Threats of new entrants:

The threats of new entrants in the purified drinking water industry are very high. Whenever any
new entrant is seen in the market, they result in reduce the revenue and lower the return for the
existing firm. There is no restriction by the government of Nepal for the new entry into the

8
market. The market does not require high infrastructure, and large capital, only needs the
experience to manage the project efficiently. There is no possibility of product differentiation
because of the product they provide in the industry, the only differentiation can be done through
the presentation of product and service.

Threats of substitute:
The threats of substitutes are low in purified drinking water industry because there is no direct
substitute for water. The indirect substitutes are aerated beverages and juices but they can’t
replace the water. The level of thirst only can be fulfilled by the water. Corresponding
competitors are only the main problem.

Bargaining power of buyers:

The bargaining power of the buyer is lower than that of the sellers. Almost every manufacturer
provides the product at the same level price. There is not a much bigger gap in offered price to
supplier or retailer. Similarly, there is a lack of product differentiation and it provides a kind of
power to manufacturers.

Bargaining power of supplier:

The bargaining power of suppliers is extremely high in the water distillery field. In this field,
there is a huge competition and fewer suppliers of raw materials like bottle caps, bottle tubes,
etc. The substitutes of the products are also low which further increases the bargaining power of
the supplier.

Competitive Rivalry:
This business is highly competitive. Because of the large number of competitions, balance
among the competitors, and lack of product differentiation due to the nature of products, a high
degree of rivalry exists in the market. The demand for the products is high, the market is too high
and the competition is also high.

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 4. MARKETING PLAN

4.1 MARKET ANALYSIS

Due to the lack of pure drinking water supply in Nepal, a huge opportunity for a packaged
drinking water has cropped up. Most of the people living in the city area don’t have access to
water taps or natural wells. People are facing a problem of unhygienic water supply, through taps
or water supply systems in Nepal. At the time of the monsoon, muddy water came through the
water pipeline. There is a high demand for water in Pokhara city as well as every city in Nepal.
That’s why there is a huge opportunity in the water purified drinking water industry.
Even though there is high demand, there many purified drinking water companies in Pokhara. It
is really difficult to compete with them. There are more than 15 water processing companies
within the Pokhara Metropolitan city. So, we must try differentiating ourselves by having unique
characteristics. The additional benefit we have is the new machine which produces bottles more
efficiently than any other existing machines in the market.

4.2 COMPETITOR ANALYSIS

When it comes to parts of competitors, it is tough to tackle with them. There are more than 15
water distillery companies within Pokhara. Not only this, much other water came from the
outside of Pokhara valley. There are several water companies in the market that we have to
compete with. It is really hard to gain a competitive advantage in the market. We must
aggressively act in the market and keep more contact with the dealers. We must be able to
provide more commission to dealers than other companies provided. Since we have a new and
efficient machine we can do so. And we have a new label printing machine where we can print
any logo or name of the hotels in packaging. Because of the new machine and additional printing
capacity we can gain a competitive position in the market. The crucial factor is the good
relationship that we have to maintain with the dealers. Through regularly meeting, additional
incentives to dealers, bonuses, commissions, and many more we can build a strong relationship
with dealers.

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4.3 PRICING STRATEGY
The price of our product is market driven. So the pricing strategy used for our business is market
pricing. The price for 800 ml/1L water bottle is Rs. 20 and Rs. 50 for the 20-liter jar for the retail
price. While the dealer pays Rs. 12 for 800 ml and Rs. 40 for a 20-liter jar at wholesale price. In
the case of pricing strategy, we don’t need to worry as it is fixed in the market.

4.4 PROMOTIONAL STRATEGY

Promotion simply means boosting the product through different means of media and aware
people of the existence of our product in the market. Even though having enough market
coverage sometimes we need to promote our product because every day new corresponding
products are being produced so they might keep our product in shadow by their heavy
advertisement. Timely, we must catch the attention of the consumers towards our product
through promotion. Consumers might feel absent if we stay silent in the market so we must have
an effective promotional strategy so that we always stay in the mind of the consumers. Some of
the promotional strategies that might boost our product are as follows:
 Giving advertisements on the local radio station, newspaper, and TV station.
 Using hoarding boards with attractive designs in tourist destinations.
 Become active on social media to promote the business.
 Sponsoring regional and national level programs and games.
 Contracting with a bigger organization like banks, hotels, restaurants, etc because these
are the place where the frequency people visit daily is high.

4.5 SUPPLY CHAIN MANAGEMENT

Distribution is one of the most important activities for any manufacturing company. Deciding the
place and distribution channel is crucial. There are different types of distribution channels in a
marketing system. Our channel must be widely expandable so that consumers can use a product
from different places. Our product must widely spread in the market. Only spreading the product
is not sufficient, it must reach the right market. Selling products in the village area doesn’t seem
to be effective because there is nominal use of bottled water. So deciding the right market and

11
 distribution channel is crucial for the profitability of the organization. The distribution channel
consists of producers, wholesalers, retailers, and finally the consumer. The sales team will deal
with the delivery of the orders received and follow up to check on reordering the stock from the
clients. We choose personnel selling as having a distribution network will not be a viable option
for the company. The right place and right distribution channel must be selected for increasing
demand in the market.

4.6 SALES FORECAST

For the Muhan Drinking Water Pvt Ltd, I have forecasted the following sales:
Years Year 1 Year 2 Year 3
1-liter bottle 2500000 2625000 2760000
20-liter bottle 200000 210000 225000
Table 1: Estimated sales in unit

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 5. FINANCIAL PLAN

5.1 INVESTMENT PLAN

Sources of the fund will be managed in the following percentage:
 50% raised as equity capital
 50% from bank loan

5.2 FINANCIAL PLANNING

Name of the equipment Quantity Rate Amount(Rs)

Boring / Drilling for water extraction 1 120000 120000

Water filling machine 2 1200000 2400000

Labeling machine 1 1100000 1100000

Water purifier machine(RO) 1 1300000 1300000

Furniture and fixtures 200000

Office Supplies 50000

Factory Shed 3000000

Computer 2 20000 40000

Start-up and legal expenses 130000
Miscellaneous cost 200000
TOTAL 8540000
Table2: Estimated cost

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5.3 EXPENDITURE AND OVERHEAD ANALYSIS

Particulars Year-1 Year-2 Year-3

Raw materials 500000 510000 520000
Labor cost 500000 600000 650000
Salaries and admin. expenses 500000 510000 520000
Telephone and internet 20000 22000 25000
Electricity 180000 190000 200000
Insurance 10000 10000 10000
Legal and Auditing fees 6000 6500 6000
Marketing expenses 200000 100000 50000
Depreciation 663000 663000 663000
Maintenance cost 50000 57000 55000
Miscellaneous expenses 30000 35000 25000
Interest expenses 380000 380000 380000
Total 3039000 3083500 3104000
Table 3: Estimated overhead and expenses

5.4 PROJECTED INCOME STATEMENT

Refer Annex 1.

5.5 PROJECTED BALANCE SHEET

Refer Annex 2.

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5.6 PROJECTED WORKING CAPITAL REQUIREMENTS.
S.No Particulars Year-1 Year-2 Year-3
1 Cash 2000000 1800000 1900000
2 Account Receivable 1000000 800000 900000
3 Inventory 500000 300000 300000
A. Total Current Assets 3500000 2900000 3100000
1 Account payable 250000 260000 270000
B. Total Current 250000 260000 270000
Liabilities
C. Working Capital 3750000 3160000 3370000
Table 4: Projected Working Capital

5.7 PROJECTED CASH FLOW

Refer Annex 3.

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 6. RISK MANAGEMENT AND ASSUMPTION

6.1 RISK ANALYSIS

Within the organization different types of risks exist and these risks must be identified properly
by the firm so that proper actions can be taken to mitigate them. Generally, we categorize
business risk into two types of risk and they are mentioned below:

A. Internal Risk
The risk within the firm is known as internal risk and these risks are controllable by the
firm. The various probable internal risks can be:
 Fund utilization
 Ineffective marketing strategy
 Lack of skilled human resources
 Inexperience

B. External Risk
The risk outside the firm is known as external risk and these risks are not under the
control of the firm. It includes:
 Changes in governmental laws
 Inflation
 Political instability
 Technological obsolesce
 Price fluctuations
 Competitive environment

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6.2 ASSUMPTIONS FOR BUSINESS OPERATION
Assumptions are the things that are accepted as true or as certain to happen. For any business
development plan, different assumptions are done regarding the level of sales, planning, and
decision-making. Some of the assumptions of our water company are as follows:

 Consumers will purchase our products and will be willing to buy them.
 The level of sales will increase every year.
 The political and economic conditions of the country will be stable.
 Easy availability of suppliers and distributors will be there.
 Key talents in the firm will be available
 The market price will remain stable
 Interest will remain constant i.e. 12%.
 The tax rate is assumed to be 25%.

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 7. CONCLUSION

7.1 SUMMARY
Water is one of the most important needs that are necessary for survival. Without water, we can’t
imagine life on Earth. In today’s era, it is really difficult to find pure drinking water. There is a
shortage of purified drinking water in city areas. By seeing the necessity of water, we came into
the market to compete. Although there are many already existing purified drinking water
companies, we have come into the market intending to capture the market. But we are in a
market with some distinctive square bottles. Because of the square shape, bottles are easy to
carry and store too. With the idea of customization and unique design in bottles, we are trying to
penetrate the water market. Customers always want something new, and we are offering them
that newness through a new shape and easy customization. Not only this, with the idea of saving
nature, we are providing cash discounts to customers who deposit used bottles. By showing
respect to nature, we are awaking people about saving nature.
We have tried to do something different and offer something new to the customers. We have
provided them by changing the traditional shape of the bottle and offering the customization on
labeling of the bottle. By this, we are offering the market with unique design and customization
of the bottle with the hope of market penetration. To exist in the market, we must come up with
new ideas. Blindly following the trend doesn’t boost the business. We always need to try
something new and unique so that we can offer a better product to the consumers. Instead of
following the trend, we must create the trend.

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7.2 CONCLUSION
The Business Development Plan shows that the company will perform very well. After
conducting a thorough study, we found that the market for purified drinking water companies is
still growing. There is still more opportunity in the field of water purification. Some of the
conclusions that we have recognized from the plan are as follows:
 The capital of the proposed project is comprised of 50% raised as equity Capital and 50%
from bank loans.
 The market for the product is ever-growing so, there is low risk in investing in the
company.
 The company plans to penetrate the market through new design of product and
customization.
 The cash flow statement also shows that the company will be able to maintain cash
availability throughout the year.

From the above points, we can conclude that our company is needed in Pokhara and the financial
analysis is also in favor of the operating company. Thus, it is feasible to establish “Muhan
Drinking Water Company” in Pokhara.

7.3 RECOMMENDATION
Based on the analysis made and the conclusion drawn above, some important recommendations
have been made here which will be beneficial for investors who are willing to invest in bee farms
to overcome the problems and inefficiencies. If applied, it will help Muhan Drinking Water
Company to improve its future performance. It is profitable to invest in this type of company.

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REFERENCE
1. K., Philip Kotler and Keller. Marketing Management 14th Edition. USA: Pearson, 2012.
2. https://www.made-in-china.com
3. https://www.wikipedia.com
4. https://www.bisleri.com

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ANNEXURE

Annex 1: Projected Income Statement

Particulars Year 1 Year 2 Year 3
Sales:
800-ml bottle 2500000 2625000 2760000
20-liter bottle 600000 630000 662000
Net sales 3100000 3255000 3422000
Less: Cost of sales
Raw material 500000 510000 520000
Labor cost 500000 600000 650000
Gross Profit 2100000 2145000 2252000
Less: Operating expenses
Start-up cost 300000
Salaries and administrative expenses 500000 550000 572000
Telephone and internet 20000 22000 25000
Electricity 180000 190000 200000
Insurance 10000 10000 10000
Legal and auditing fees 16000 17000 18000
Marketing expenses 200000 100000 50000
Depreciation 560000 560000 560000
Maintenance cost 50000 57000 55000
Miscellaneous expenses 30000 35000 25000
Operating profit 234000 604000 737000
Less: Interest 380000 380000 380000
Net profit before tax (146000) 224000 357000
Less: Tax (25%) - 56000 89250
Net Profit (146000) 168000 267750

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 Annex 2: Projected Balance sheet
Particulars Year-1 Year-2 Year-3
Current Assets
Cash 2000000 1800000 1900000
Account receivables 1000000 800000 900000
Inventories 500000 300000 300000
Total C.A 3500000 2900000 3100000
Fixed assets 8400000 7840000 7280000
Less: Depreciation 560000 560000 560000
Total F.A 7840000 7280000 6720000
Total Assets 11340000 10180000 9820000
Current Liabilities and Equity
Current Liabilities
Account payable 250000 260000 270000
Total Current Liabilities 250000 260000 270000
Equity and Capital
Long term loan 5000000 3830000 3460000
Equity and capital 6090000 6090000 6090000
Total equity and capital 11090000 9920000 9550000
Total liabilities and equity 11340000 10180000 9820000
*Note: Depreciation has been imposed on machinery and equipment and building. The
straight-line depreciation method has been used and estimated life of 15 years.

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 Annex 3: Projected Cash Flow
Particulars Year-1 Year-2 Year-3
A.Cash Flow From Operating Activities
Net Profit/Loss after tax (146000) 168000 267750
Adjustment for: Depreciation 560000 560000 560000
Operating Profit Before Changes 414000 728000 827750
Working Capital
(Increase/Decrease) Current assets (1500000) 400000 (100000)
(Increase/Decrease) Current liabilities 250000 10000 10000
Cash Generated from an operation (1250000) 1138000 737750
B.Cash flow from investing activities
Purchase of machinery and equipment (8400000) - -
Net cash from investing activities (8400000) - -
C.Cash Flow from financing activities
Long term borrowing 5000000 - -
Payment of loan - (1170000) (370000)
Issue of common stock 6090000 - -
Net cash from financing activities 11090000 (1170000) (370000)
Net increase/decrease in cash or equivalent 1440000 32000 367750
Opening cash - 1440000 1472000
Closing cash 1440000 1472000 1839750

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