entrepreneurships assignment

8/10/2019 Entrepreneurships Assignment

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ContentsDISCLAIMER ................................................................................................................................ 2

EXECUTIVE SUMMARY ............................................................................................................ 2

PURPOSE OF THE DOCUMENT ................................................................................................ 2INTRODUCTION: ......................................................................................................................... 3

Proposed Business Legal Status ................................................................................................. 4

NAME OF THE FOUNDERS ........................................................................................................ 4

Customers: ...................................................................................................................................... 6

Distribution Channels ..................................................................................................................... 6

PRODUCT AND SERVICE FEASIBILITY ................................................................................. 6

BRIEF DESCRIPTION OF PRODUCT .................................................................................... 6

Marble ..................................................................................................................................... 6Onyx ........................................................................................................................................ 6

Key Success Factors ....................................................................................................................... 7

Significant number of mines and processing units ...................................................................... 7

DEMAND FOR OUR NEW PRODUCTS ..................................................................................... 7

TARGET MARKETS / CITIES ..................................................................................................... 8

Project Competitors: ....................................................................................................................... 8

Promotion and Advertising ............................................................................................................. 9

Management and Organization ..................................................................................................... 13

Process Flow Chart ................................................................................................................... 13

FINANCIAL FEASIBILITY ........................................................................................................ 14

Total Startup Cash Needed (to Make First Sale) ...................................................................... 14

Financial Plan................................................................................................................................ 15

Income Statement of Pakistan Marble Products ....................................................................... 15

Cash Flow Statement of Pakistan Marble Products .................................................................. 16

Balance Sheet of Pakistan Marble Products ............................................................................. 17

Conclusion: ................................................................................................................................... 18

REMARKS: .................................................................................................................................. 19

REFRENCES: ............................................................................................................................... 20


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DISCLAIMER

The purpose and scope of this information memorandum is to introduce the subject matter

and provide a general idea and information on the said area. All the material included in this

document is based on data/information gathered from various sources and is based on certain

assumptions. Although, due care and diligence has been taken to compile this document, thecontained information may vary due to any change in any of the concerned factors, and the

actual results may differ substantially from the presented information. Pakistan Marble Productsdoes not assume any liability for any financial or other loss resulting from this memorandum in

consequence of undertaking this activity. Therefore, the content of this memorandum should not

be relied upon for making any decision, investment or otherwise. The prospective user of thismemorandum is encouraged to carry out his/her own due diligence and gather any information

he/she considers necessary for making an informed decision. The content of the information

memorandum does not bind Pakistan Marble Products in any legal or other form.

EXECUTIVE SUMMARY

Marble & Onyx Products Manufacturing Unit is proposed to be located at Quetta. Product(s)include Marble & onyx Flower Vases, Jar, Chess Boards, Animal Shapes, Cigarette Ash Trays

and Photo Frames. Installed capacity of the project is to process12,060 sq.ft of Marble with

initial utilization of 6,030 sq.ft in year 1., at 50% capacity utilization. Total cost estimate is Rs.

4.98 million with fixed investment of Rs.3.40 million and working capital of Rs. 1.59 million.Given the cost assumptions, the Internal Rate of Return and Payback period are 51% and 02

years respectively.

The mean purpose to this study is to encourage the local marble distributors and to facilitate the

local masses of Balochistan the luxurious product at an economy prices. These all will be

achievable after taking loan from banks.

Quetta has a lot of potential to address and support the new investors and entrepreneurs to start

their business and to try their luck, As per in our case the feasibility analysis shows a positive

and profitable sign.

PURPOSE OF THE DOCUMENT

The objective of the business plan study is primarily to facilitate potential Investors to releasefund in our project. The project business plan may form the basis of an important investment

decision and in order to serve this objective, the study covers various aspects of project concept

development, start-up, and production, finance and business management.


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INTRODUCTION:

Pakistan is one of the growing economies of the world and there are a lot of businesses

that are growing very rapidly in Pakistan. Pakistan has four provinces namely Balochistan,

Punjab, Sindh and Khyber-Pakhtunkhwa, out of these four provinces Balochistan is the largest

province with respect to Area and Punjab is the largest with respect to Population. Pakistan is

basically an agricultural country so thats why its major exports are agricultural products but in

the beginning of the 21th

century many of other businesses are growing in Pakistan including first

in the row Telecommunication and others as well.

Marble manufacturing business in Pakistan is also increasing day by day therefore more

and more factories are being open in different parts of the country and professionalism is

increasing in Marble businesses. The policy of Innovation is being adopted in marble business

more and more new products are being introduced of national and international quality, as we

can also say that in this fast moving world where people have no time for anyone except their

duties restaurants are creating a chain for the people to meet in mean time have their meals.

Many of the Marble business in the world have grown internationally including like

Carrara marble company & Best Marble & Granite, Co which have earn respectful names in this

field.

Baluchistan is also popular because of different local cuisines which are being liked wide

in the country. Because of high rates of Marble products in the region and people have a limited

capacity to enjoy new design so people mostly attract towards the Pakistan Marble Products

which provide quality and as well as affordable prices to the people to spend their precious time

therefore marble businesses is increasing day by day and competition is also increasing with

respect to quality and price.

The biggest cities of Pakistan have a lot of national and international products to serve for

the people according to their needs and satisfy them. Although the mining industry is very

competitive, the lifestyle changes created by modern world are increasing the trend of enjoying

new design.

The need of better quality products has increased quality concerns in most parts of the

country as the people are being educated people are avoiding the traditional items like business


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which provide low quality products to the people which in return they do not go to use marble

products.

One of the major problem in the country is that most of the marble business are

unlicensed and operate on their own will if all these businesess be registered with the concern

departments there should be a proper check and balance system and their be less quality concerns

and a reputable amount of tax can be earned from this small industry.

Marble and Granite is the sixth largest mineral extracted after coal, rock salt, lime stone and

china clay in Pakistan. According to the industry estimates nearly 1225 quarries and 3000

processors along with 30,000 workforce constitutes the sector. The marble processing units in

Pakistan use manual and outdated techniques with locally fabricated equipment to cut and

process the stone, limiting efficiency and accuracy. These results in inability to capture the fairvalue of products produced. The construction activity in Pakistan witnessed a boom in last

fifteen years and as a result demands for dimensional stones such as marble and granite used inflooring, sanitation, outer walls has also increased. This demand is currently being met with local

and imported stones by individual and institutional buyers. Marble product users are relying

more and more on imported stones due to inefficiencies (e.g. quality and consistency) of marble

processors to meet the local demand.

One of the objectives of our business is to develop dynamic, internationally competitive

firms/enterprises/business units to accelerate sales, investment and job growth. Feasibilityanalysis is being designed to support the Marble and Granite sector of Pakistan with strategic

objective of increasing marble processors efficiency and product quality with up-gradation ofprocessing infrastructure, workforce development program and increasing market linkages. Keybeneficiaries will be marble tile and slab processors SMEs and mosaic manufacturers.

Proposed Business Legal Status

The business can be started as sole proprietorship or partnership because of great potentialinvolved. Furthermore, comparatively fewer complications are involved in forming,administering and running the sole proprietorship or partnership businesses. So, in our case we

partner are reliable to work with each other.

NAME OF THE FOUNDERS1. Sanam Khair

2. Iftikhar Ahmed Sanjrani

The idea was suggested by Iftikhar Ahmed Sanjrani and further it was more organized and

polished by Sanam Khair. The Profit and loss will be equal among the partner and so as perPakistan partnership act. The initial investment will be half-half between these two patners. And

the remaining investment will be achieved by taking loans from bank.


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Customers:Our product customers are households, government and private constuctors, builders.

Distribution ChannelsAs per our distribution channel, we are not bond to intermediaries because we will sale our

products direct to end users. So we have no any threat from intermediaries.

PRODUCT AND SERVICE FEASIBILITY

BRIEF DESCRIPTION OF PRODUCT

Marble

Marble is a crystalline, compact variety of metamorphosed limestone, consisting primarily of

calcite (CaCO3), dolomite (CaMg (CO3)6) or a combination of both minerals. Pure calcite is

white, but mineral impurities add color in variegated patterns. Extensive deposits are located inItaly, India, Pakistan, Spain, Greece, Brazil, China, Afghanistan, Turkey, Great Britain, and in

the United States. Commercially the term Marble is extended to include any rock composed ofcalcium carbonate that takes polish including ordinary limestone. The term is further extended in

the loose designation of stones such as alabaster, serpentine and other soft rocks. Specific gravity

of Marble ranges between 2.68 to 2.72, determining the density of the stone.Marble is a durable stone in dry atmosphere only when protected from rain. The surface of

Marble crumbles readily when exposed to moist or acidic environment. Purest form of Marble is

statuary Marble, which is white with visible crystalline structure. The distinctive luster of

statuary. Marble is caused by the reflection of penetrated light from the surfaces of inner crystals.

Onyx

Similar to most of the other forms of Marble, it is composed of compact rocks of carbonatenature of sedimentary origin formed through chemical precipitation usually in underground

cavities.

Generally found in the form of big lenses and patches with a low relief. If the crystals are

particularly large (some centimeter) and visible to the naked eye, these rocks are known asalabaster. Specific gravity of Onyx ranges between 2.6 to 2.8. Onyx is mostly green in color with

fine texture, nevertheless bands and patches of red, brown, and white are common, with rare

patches of golden. Green variety is more valuable because it is used for special works in many

parts of the world. Major deposits are located in Mexico, Iran and Turkey with best green variety

in Afghanistan and Pakistan.

Technology: The proposed unit will comprise processing machines including 12 & 18 inchcutters and 5 ft Lathe machine to produce different types of marble handicrafts.

Location: The Unit would be located at Quetta or near marble processing clusters for easy

transportation of raw material and finished goods.


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Product:Handicrafts including Flower Vases, Cigarette Ashtray, Chess Boards, Photo Framesand Eggs/Oval Shapes etc.

Target Market: Main buyers would be domestic consumers, corporate customers, foreignvisitors and companies / individuals dealing in local and export orders.

Employment Generation:The proposed project will provide direct employment to 10 (ten)people.

Profitability:The Financial Analysis shows that the unit will be profitable from the very firstyear.

Key Success Factors Vast range and variety of Marble, Granite and Onyx colors in Balochistan.

Large deposits of superior quality Marble, Granite and Onyx in the country.

General accessibility to major Marble and Onyx deposits.

Rehabilitation in Afghanistan.

Large and established world markets.

Improved technological changes available.

Ample opportunity for exports.

Internationally accepted cutting services with respect to dimensions.

Significant number of mines and processing units

DEMAND FOR OUR NEW PRODUCTSThe marble and granite sector, which is mostly dependent on Exports, is growing almost at

par with the Italy and China construction sector, according to a recent report published by

Emirates Industrial Bank.

Demand for granite and marble products has been growing at a considerable pace of about six

per cent per annum between 1995 and 1999. Growth is higher for unfinished/crude material,

indicating a slight increase in cutting/processing activity.


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Exports of Pakistan Marble have equally increased in value terms, but have grown at a smaller

rate than growth by volume, averaging a mere 2.7 per cent in the last four years, against anaverage 5.6 per cent rise in volume. This confirms the opinion of industry sources that there has

been an increase in the import of low grade marble in recent years.

The price of marble and granite products varies greatly depending on the quality of the material,thickness, finish, colour source, among others.

Demand for granite and marble products in the country is entirely met through exports. Bothmarble and granite products are exported in large uncut blocks or rocks and slabs cut from blocks

and their surface polished for final use and finished tiles, namely slabs cut to required sizes.

Exports in blocks and slabs accounts for only about 12 per cent of total imports.

Meanwhile, demand for flooring stone in the UAE is the highest in the entire Gulf region. It is

significantly higher than the marble and granite imports in Saudi Arabia and Kuwait, which can

only be attributed to the higher level of construction activity in the country in both quantitativeand qualitative terms.

In Pakistan especially in Balochistan Construction companies prefer to purchase the material

locally, rather than import directly which has given rise to a large trade.

TARGET MARKETS / CITIESThe marble & onyx products are famous worldwide for their uniqueness and are used as

decorative and gift items. Major export markets for these marble & onyx handicrafts are Central

Asian Republics, United States of America and Australia. The domestic market also carries a

great untapped potential for these handicrafts, catering to tourists, handicraft shops, antiquesshops and hotel industry. Our target market is within the Balochistan and surroundings.

Project Competitors:Our main Business competitors are

1: Name: New Khan Marbles

Location: Zarghoon Road Quetta

2: Name: Karachi Marbles


3: Name: Ahmed & Sons

Location: Sirki Road Quetta

4: Name: Janan Marbles and Tiles

Location: Sirki Road Quetta


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5: Balochistan Marbles


Promotion and Advertising

For promotion and Advertisement we have plan to spend PRs. 25,000 each year. After firstyear we will increase our Promotion and Advertisement budget. Because now a days the success

of the business depend on the promotion and advertisement

Concept StatementAfter distributing the Concept Statement Test Survey paper, the feedback from our respondent

was positive and they responded 100%. We distributed the paper among 5 people. First of all

majority among them suggested that Quetta has a lot of potential to accept new business. They

recommended that the name of our firm is attractive Pakistan Marble Products (PMP) they

suggested that the weather of Quetta suits such kind of business. On the answer of our Questionsabout location of our firm they further recommended that Sirki Road is appropriate for such a

business. They suggested dont compromise the quality of the products. They concept statementtest show that the majority among them supported our idea, and they suggested to do more

advertisement and hire well skilled manpower. They said that they probably would buy our

products. 3/5 said that the product is feasible and it will be successful. So, the result was positiveand finished our concept statement test and proceed one step forward towards Buying Intention

Survey.

Buying Intention SurveyThey feasibility survey shows that the positive feedback from 10 people towards our new

product is attractive and feasible. We asked about their first visit in any marble shop, they replied

and said that it was memorable but it was in other cities not in Quetta. Quetta there is no any firmwhich they manufacture Marble & Onyx Flower Vases, Jar, Chess Boards, Animal Shapes,

Cigarette Ash Trays and Photo Frames. They said that they wish to buy the local products with

high quality and at a cheaper cost.

Industry/Market Feasibility

Global demand for marble and onyx products largely depend on the tourism industry aroundthe world so as the local industry which is export oriented due to low profit margins on such

products in the local market. Based on our study with the existing players who are exporting

such items, Quetta is the new emerging market and growing very fast. Therefore, Quetta may bea permanent market. Seasonal demand of Marble and Onyx products largely depend on religious

and cultural and seasonal occasions round the world. Its demand increases particularly during

March beginning.


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Low Potential Moderate Potential High Potential

1. Number of competitors None

2. Age of industry Old

3. Growth rate of industry Moderate growth

4. Average net income forfirms in the industry

High

5. Degree of industry

concentrationNeither

concentrated nor

fragmented

6. Stage of industry life

cycleGrowth phase

7. Importance of industrys

products and/or servicesto customers

Must have

8. Extent to which businessand environmental

trends are moving in

favor of the industry

Medium

9. Number of exciting newproduct and services

emerging from the

industry

High

10. Long-term prospects Strong

Target Market AttractivenessThe purpose of this whole discussion is to analysis target market attractiveness. The Pakistan

Marble Products (PMP) has chosen its Target market as whole Balochistan by opening a marble

manufacturing firm at Sirki Road, Quetta. In addition, In the case of PMP, there could potentially

be an opportunity to develop quality products for masses of Balochistan.

After that by this study of feasibility we have understood the size of our market segment. Wedo sure that the cost of developing and launching the product will deliver an acceptable rate of

return. Though the market is medium, and there are enough people in the segment, they are too

difficult to attract them, the market is attractive enough to justify investment.

Low Potential Moderate Potential High Potential

Number of competitorsin target market

None

Growth rate of firms in

the target marketSlow growth

Average net income forfirms in the target

market

Medium

Methods for generating Clear


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revenue in the industry

Ability to create

barriers to entry for

potential competitors

Can create

Degree to which

customers feel satisfiedby the current offerings

in the target market

Neither satisfied

or dissatisfied

Potential to employ low

cost guerrilla and/orbuzz marketing

techniques to promote

the firms product or

services

Moderate

Excitement surrounding

new product/service

offerings in the targetmarket

High

The new product which we are going to offer has no competitors, so we have an edge toachieve our goals. Our firm also has potential to create barrier to entrance of new competitors.

Even the people are excitement to see such products in Quetta

Market Timeliness Assessment ToolLow Potential Moderate

Potential

High Potential

1. Buying mood ofcustomers

Customers arein a moderate

buying mood

2. Momentum of themarket

Slowly gaining

momentum

3. Need for a new firm in

the market with your

offerings or geographic

location

High

4. Extent to which business

and environmental

trends are moving infavor of the target

market

Medium

5. Recent or planned

entrance of large firmsinto the market

No larger firms

entered the

market or are

rumored to be

entering the


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market

ORGANIZATIONAL FEASIBILITY

The marble products as a whole depends on the quality of the products. Pakistan MarbleProducts divides its operations into two basic categories: administrative and manufacturing

operations. Administrative personnel handle the entire black and white work of the Organization,where the manufacturing operations focused on the productivity of the firm.

Assessment ToolLow Potential Moderate Potential High Potential

1. Passion for the business

idea

Low Moderate High

2. Relevant industry

experienceModerate

3. Prior entrepreneurialexperience

Moderate

4. Depth of professional

and social networksStrong

5. Creativity among

management team

members

High

6. Experience and expertise

in cash flowmanagement

Moderate

7. College graduate Some college

education but notcurrently in

college

Resource Sufficiency Assessment ToolRatings Resource Sufficiency

1 2 3 4 5 Office space

1 2 3 4 5 Lab space, manufacturing space, or space to launch aservice business

1 2 3 4 5 Contract manufacturers or outsource providers

1 2 3 4 5 Key management employees (now and in the future)

1 2 3 4 5 Key support personnel (now and in the future)

1 2 3 4 5 Key equipment needed to operate the business(computers, machinery, delivery vehicles)

1 2 3 4 5 Ability to obtain intellectual property protection on keyaspects of the business


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1 2 3 4 5 Support of local and state government if applicable forbusiness launch

1 2 3 4 5 Ability to form favorable business partnerships

Ratings: Strong, Neutral,or Weak

Neutral Proximity to similar firms (for the purpose of knowledgesharing)

Strong Proximity to suppliers

Strong Proximity to customers

Neutral Proximity to a major research university (if applicable)

Management and Organization

As per management matter is concern, we have an experienced manager. We will appoint himand I my self be there to see the manufacturing process. In the case of confusion I have one ofmy friend in Italy who is expert in this field and he promised to supervise my business from

Italy.

Process Flow Chart


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FINANCIAL FEASIBILITY

Total Startup Cash Needed (to Make First Sale)

Capital Investments Amount

Property 1,200,000

Furniture and fixtures 282,600

Computer equipment 300,000

Other equipment 815,000

Vehicles 950,000

Operating Expenses Amount

Legal, accounting, and professional services 300,000

Advertising and promotions 20,000

Deposits for utilities 25,000

Licenses and permits 52,000Prepaid insurance 30,000

Lease payments 200,000

Salary and wages 250,000

Payroll taxes 30,000

Travel 65,000

Signs 18,000

Tools and supplies 45,000

Starting inventory 50,000

Cash (working capital) 200,000

Total Startup Cash Needed = 4,832,600


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Financial Plan

Income Statement of Pakistan Marble Products

Pakistan Marble Products

INCOME STATEMENT

For the Year..

Year 1st Year 2nd Year 3rd Year 4th

Sales 2,500,000 3,500,000 4,000,000 4,500,000

Less: Cost of Goods Sold 800,000 1,100,000 1,200,000 1,400,000

Gross Profit 1,700,000 2,400,000 2,800,000 3,100,000

Less: Selling, Admin and General expenditure.

Salaries 250,000 300,000 300,000 330,000

Utilities 20,000 22,000 22,000 25,000Insurance 30,000 30,000 30,000 30,000

Advertisements 15,000 20,000 25,000 30,000

Depreciations 30,000 30,000 30,000 30,000

Other Office Expenditures 10,000 12,000 15,000 15,000

Other Expenditures 10,000 15,000 20,000 25,000

Interest on Loan 25,000 25,000 25,000 25,000

Sub Total 390,000 454,000 467,000 510,000

Operating Income 1,310,000 1,946,000 2,333,000 2,590,000

Less: Taxes 10,000 15,000 20,000 25,000

Net Income 1,300,000 1,931,000 2,313,000 2,565,000


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Cash Flow Statement of Pakistan Marble Products

Year 0 Year 1st Year 2nd Year 3rd

Net Profit 1,300,000 1,931,000 2,313,000

Depreciations 30,000 30,000 30,000

Interst Expense 25,000 25,000 25,000

Account Receivables (100,000) (150,000) (200,000)

Inventory (80,000) (200,000) (230,000) (250,000)

Account Payable (190,000) (220,000) (260,000)

Other Liabilities (1,795,000) (2,195,000) (2,495,000) (2,995,000)

Cash from Operations (1,875,000) (1,330,000) (1,109,000) (1,337,000)

Markup Paid 390,000 454,000 467,000 510,000

Net Cash from Operations (2,265,000) (1,784,000) (1,576,000) (1,847,000)

Long Term & Short Term Debts 2,500,000 2,000,000 1,200,000 600,000

Capital 2,600,000 2,600,000 2,600,000 2,600,000

Net Cash 2,835,000 2,816,000 2,224,000 1,353,000


Cash Flow Statement

For the Period.


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Balance Sheet of Pakistan Marble Products


Balance Sheet Statement

For the Year.

Year 0 Year 1st Year 2nd Year 3rdCurrent Assets:

Cash 1,500,000 2,542,600 4,023,600 6,096,600

Accounts Receivables 100,000 150,000 200,000

Inventories 80,000 200,000 230,000 250,000

Total Current Assets 1,580,000 2,842,600 4,403,600 6,546,600

Fixed Assets:

Land and Building 1,200,000 1,200,000 1,200,000 1,200,000

Mechinery 815,000 700,000 500,000 300,000

Furnitures 282,600 250,000 200,000 150,000

Office Vehicle 950,000 900,000 800,000 710,000

Office Equipment 300,000 250,000 200,000 150,000Total Fixed Assets 3,547,600 3,300,000 2,900,000 2,510,000

Total Assets 5,127,600 6,142,600 7,303,600 9,056,600

Liabilities:

Accounts Payable 190,000 220,000 260,000

Long & Short Term Debts 2,500,000 2,000,000 1,200,000 600,000

Tax 25,000 25,000 25,000

Other Liabilities 27,600 27,600 27,600 27,600

Toatal Liabilities 2,527,600 2,242,600 1,472,600 912,600

Owners Equity:

Capital 2,600,000 2,600,000 2,600,000 2,600,000

Retained Earning 1,300,000 3,231,000 5,544,000

Total Owners Equity 2,600,000 3,900,000 5,831,000 8,144,000

Total Liabilities & Equity 5,127,600 6,142,600 7,303,600 9,056,600


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Conclusion:

Marble & Onyx Products Manufacturing Unit is proposed to be located at Quetta. Product(s)

include Marble & onyx Flower Vases, Jar, Chess Boards, Animal Shapes, Cigarette Ash Trays

and Photo Frames. The mean purpose to this study is to encourage the local marble distributors

and to facilitate the local masses of Balochistan the luxurious product at an economy prices.These all will achievable after taking loan from banks. Marble and Granite is the sixth largest

mineral extracted after coal, rock salt, lime stone and china clay in Pakistan.The marble & onyx products are famous worldwide for their uniqueness and are used as

decorative and gift items. Major export markets for these marble & onyx handicrafts are Central

Asian Republics, United States of America and Australia. The domestic market also carries agreat untapped potential for these handicrafts, catering to tourists, handicraft shops, antiques

shops and hotel industry. Our target market is within the Balochistan and surroundings.

Quetta may be a permanent market. Seasonal demand of Marble and Onyx products largely

depend on religious and cultural and seasonal occasions round the world. Its demand increasesparticularly during March beginning.

The Pakistan Marble Products (PMP) has chosen its Target market as whole Balochistan byopening a marble manufacturing firm at Sirki Road, Quetta. In addition, In the case of PMP,

there could potentially be an opportunity to develop quality products for masses of Balochistan.In short, as per concept statement test and buying intention survey, we were so good to start

this business in Quetta. The idea is attractive and people will enjoy our product of high quality

with range able prices.


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REMARKS:


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REFRENCES:

entrepreneurships assignment

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