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Executive Summery
The new furniture company is Pacific furniture. It will start in
2013 with quality full furniture in various designs. We take a big
plan which is for five year. And we hope we can establish our
brand within 3 years and till that time our profit will reach 1.5
crore tk. We hope we can earn 1.5 laks within one year. We
produce and sale five types of furniture like bed sheds, sofa,
dining table etc. We use a big amount for our establishment in
advertisement and promotion. We spent more than 10 lak taka
for advertisement. And for that we hope we can establish our
brand name within three year. Our advertisement main area is
tv and radio channels. We launch new product on 4.5 year later
when our company will stay in maturity stage of product life
cycle. Our main target area is Dhaka, but after this we will
cover our country. We promise that we will provide quality full
furniture for our customers.

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Description of Bangladesh Furniture

Industry
The Bangladesh furniture industry is one of the most promising
growth sectors with high export potential. According to a
Household Income and Expenditure Survey of 2005, the
domestic consumption growth rate is around 20% and export
markets are almost entirely untapped. There are approximately
40,000 furniture SMEs all over the country, employing around
180,000 people, turnover is in excess of BDT 100b (GBP 1b).
Currently dominated by thousands of small workshops, the
furniture
sector
is
in
a
transition
phase
towards
industrialization. Simultaneously, there is a small but growing
segment of larger firms who are gradually entering the export
market. Nevertheless, the furniture sector is struggling to reach
its full potential due to various factors in habiting its growth.
Inadequate supply of production technology and consultancy
services, limited access to quality inputs, absence of skilled
workforce and limitations in local and international marketing
are some of the main problem areas. The biggest challenges for
export include: government recognition as a potential export
sector, limited export order processing facilities, lack of
credibility in international markets, uncoordinated association
activities and absence of effective initiatives for facilitating
foreign direct investment.

Leading companies of Furniture

Industry
Bangladeshi leading furniture companies are given belowAkhtar furnishers ltd.
Aftab furnitures ltd.
Otobi ltd.
Hatil furniture ltd.

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Business Description
Pacific furniture will launch on year of 2013. Pacific Furniture
manufactures basic, durable home and office furnishings.
Principal among these is a line of hardwood desks, dressers,
bed sheds, dining tables, chairs, and home entertainment
centers. The company's typical retail and service customers
include upper-middle class residents of the residential area who
seek to maximize the purchasing power of the interior
decorating budget. These customers are attracted to Pacific
Furniture because it provides quality products, and many are
second generation clients. These loyal customers have
consistently provided Pacific Furniture with annual sales of over
30,00,000tk in each year. Pacific Furniture intends to expand its
customer base in the residential area by aggressively
promoting the Additional value of consulting services it now
provides and by capitalizing on its reputation more extensively.
A complete retraining of the sales force coupled with
significantly increased advertising expenditures will accomplish
this
objective.
COMPANY PROFILE

Name Adres
Websit
P
r
o
d
u
c
t
T
y
p
e
BPhysique randNme
CMuisltoren

FormfBusine

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Our logo

Our Slogan
Modern Living, Create your own fashion.

Company visiting card

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Nature of business
We form our business as a partnership business. The types
of our business are Manufacturing Furnitures, Distributor/
Wholesaler. There will be 7 partners in their respective posts.

Partners Visiting cards:

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Size of Business
This business will produce & provide consumer product and
organize medium size business. Initially we will cover the 1
division of the country but our prospect will be whole of the
country.

Statement of startup Finance

Initial financing requested of the company is 2, 00, 00,000 taka
loan to be paid off over five years from Dutch Bangla Bank Ltd.
This debt will cover office space, office equipment, and for
supplies two leased vans, advertising and selling cost. The
partners provided 3, 00, 00,000 taka jointly. So, the total cost of
the project estimated at 5, 00, 00,000 taka.

Objectives
Objectives of Pacific furnitures are given below1. Establish relationships with designers of unique, fine
furniture
2. Establish relationships with quality wholesale
suppliers of lumber and hardware.

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3. Establish our name and image in the community as a

specialty
manufacturer
of
custom
designed
furnishings within the next three years
4.

Focus our product in various way like advertising,

promotion, fair etc and increase our sales and make
profit to 1,50,000tk by year.

5. To increase sales at least 1,40,00,000tk by the third

year of operation.
6. To sell some different designs furnitures.

Keys of success
Keys of success are given below-

1. Business will be located on major city shopping malls,

residential areas, and college and university hostel
areas.

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2. We need to find the quality-conscious customer in the

right channels, and we need to make sure that
customer can find us.
3. We can't afford to ship fully-assembled desks, but
assembly must be so easy and automatic that it
makes the customer feel better about the quality, not
worse.
4. We committed to quality full wood, quality full
workmanship, quality full design for customers.
5. Pacific furniture will employ local craftsmen who have
plied their trade for decades.
6. By using only the finest hardwoods available, our
craftsmen ensure that our furniture will last for
generations to come.

Mission
Pacific furniture helps to decorate home in a very attractive
designs and it helps to create pleasant, productive office
environments with well-designed furniture that incorporates
new technology into the classic office mode, in which real
people can work happily. Also in home decoration pacific
furniture help to spent a happy moment with all family persons.
We are sensitive to the look and feel of good wood and fine
furniture as well as to high-powered personal computing. We
always provide the best possible value to our customers who
care about quality office environments, home decorations, and
we want you spent with us to be well spent.

Future outlook and trends

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We mainly want to produce furniture. It is a partnership

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business. Initially we prepare our business plan for five years.

Next five year we target that we capture 6% of total market
share. When our company will start, only one product available
in five types, we produce at that time. We wish to achieve a so
much customer and consumer response in 1 year. It wills our
betterment of our company. We get best wishes to our target
customer and also the mind of the customer will obviously
great beliefs of our products. Because we mention that, our
product is the best product in Bangladesh. We expect the sales
will be in next year approximately TK 1 corer. Our production
cost is TK 2, 70, 50,000. The return on investment is 20%
expected

Goals

Our main goal is to provide good and best quality furniture to

the customers. As Pacific is a new company, so our goal is
also to raise the brand value of Pacific and creating a good
number of loyal customers.

Focus
We concentrate on the continuous improvement of the product
according to the customer needs. So we specifically follow the
product concept.

Our product description

Bed sheds
Almira
Sofa
Dining table
Dressing table
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Our products list is given below-

Bed sheds:
Pacific furniture made Bed Sheds in various types and various
design. The Bed Sheds are very much attractive. See some
sample of Pacific furniture Bed Sheds in below-

Almira:
Pacific furniture produces Almira by pure wood which is collect
from forest. And the Almiras are very much attractive and nice
designed. Some samples are given below-

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Sofa:
The main and most used home decorates furniture is Sofa.
There are several designed sofa are also produced by Pacific
furniture. This sofas are used for office and home decoration.
Some designs are given below-

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Dining table:
Another main and most used home decorates furniture is
Dining table. There are several designed Dining table are also
produced by Pacific furniture. Some designs are given below-

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Dressing table:
Most used other furniture is Dressing Table. There are several
designed Dressing Tables are also produced by Pacific furniture.
This Tables are used for home decoration. Some designs are
given below-

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Product quality
Pacific Furniture brings quality in life. Their products contain
following qualities:

Performance. Will show well performance.

Features. Good features.
The Name. A name that contains quality
Reliability. Each person use will results in the same

satisfaction.
Serviceability. The service system efficient,
competent, convenient.

Market Analysis

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APM oc at eui na tl itMa i l a M lr k aM e r tka eSr tAik z sire zt ae A r e a

Market segmentation

Geographical Segmentation:
The market is segmented according to geographic criteria like,
Nations: Our
Bangladeshi.

customers

Regions:

Dhanmondi,

New Market,

Azimpur,

Panthopoth,

nation

will

be

Green road,

Farmgate,

Mirpur,

Jatrabari,

Motijhil and

Mohammedpur.

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Cities: At first we cover only Dhaka city after

that we cover other cities which is beside of
Dhaka. The other cities are

Narayanganj

Comilla

Chittagong

Sylhet

Bagherhat

Bogra

Maymensing

Khulna etc

Zip codes: The zip codes are

1205,1209,1000,1206, 1100, 1208 etc.

Demographical Segmentation:
Demographic segmentation consists of dividing the
market into groups based on variables such as
Age: The age range of the customers are

2-5year old,

20-30years old and

40-70years old people.

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Gender: The gender of the customers are

Male and
Female.
Family size: In Dhanmondi and its side areas
families are maximum small family. Our
targeted families are

Small family and

Big family

Income: The customers income level will be

10,000tk to 30,000tk per month

30,000tk to 50,000tk per month

50,000tk to 70,000tk per month

70,000tk to 1,00,000tk per month

Occupation: Occupation is not clearly defined

for the target market of our product. But the
customers are

Job holder and

Business person

Education: The education level of the target

customer is

HSC

Higher graduation like BBA & MBA

PHD and others.

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Religion: The religion of the most customers is

Muslim. There is also having some other religion
peoples. The religions of our customer are

Muslim

Hindu

Buddhist

Christian

And others

Nationality: Most customers nationality is

Bangladeshi but there have also some other
nationality people like

American

English

Nigerian etc.

We have targeted for the upper part of the lower

class, middle class, upper middle class, and
lower part of the upper class of the society.
Middle Class
Upper- Middle Class
Some portion Upper class

Psychographic Segmentation:
Psychographics is the science of using psychology and
demographics
to
better
understand
consumers.
By
Psychographic segmentation we segment our consumers
according to their lifestyle, personality, values. Aliens within the
same demographic group can exhibit very different
psychographic profiles.

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Target market
As a manufacturer supplying to distributors, our target market
would be furniture distributors of high quality product. The
income level of the average client seeking high quality furniture
will be in the middle and upper class range. Marital status will
not make a difference. Education level will be college
graduates, professionals, and some skilled trades. Many of
these customers are returning to Dhanmondi area after living
elsewhere and yearn for a simpler life for their family. Many
others are transferees with large corporations, having come
from more expensive living areas of the country. Therefore we
feel we can target this niche for our direct sales outlet.
As we expand into the office and industrial furniture markets,
we will target corporations, hospitals, and businesses of all
sizes. The end user for our product will be those who appreciate
fine workmanship, durability, quality craftsmanship and fine
wood; the discriminating buyer who is selective and does not
want a typical, mass-produced product. Our customers will not
hesitate to pay for top quality and workmanship that will last
for decades, even centuries that will become heirlooms.
Our initial primary market will be small independent furniture
retailers within a 250 mile radius of the Dhanmondi, which will
include such major markets as New Market, Azimpur,
Panthopoth, Green road, Farmgate, Mirpur, Jatrabari, Motijhil
and Mohammedpur. We will target them until we are able to
craft enough quality furniture to distribute to larger furniture
chains.
Target market by categories:
Age: The age range of the customers are

2-5year old,

20-30years old and

40-70years old people.

Gender: The gender of the customers are

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Male and
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Female.

Family size: In Dhanmondi and its side areas

families are maximum small family. Our
targeted families are

Small family and

Big family

Income: The customers income level will be

10,000tk to 30,000tk per month

30,000tk to 50,000tk per month

50,000tk to 70,000tk per month

70,000tk to 1,00,000tk per month

Occupation: Occupation is not clearly defined

for the target market of our product. But the
customers are

Job holder and

Business person

Education: The education level of the target

customer is

HSC

Higher graduation like BBA & MBA

PHD and others.

Religion: The religion of the most customers is

Muslim. There is also having some other religion
peoples. The religions of our customer are

Muslim

Hindu

Buddhist

Christian

And others

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Nationality: Most customers nationality is

Bangladeshi but there have also some other
nationality people like

American

English

Nigerian etc.

We have targeted for the upper part of the lower

class, middle class, upper middle class, and
lower part of the upper class of the society.
Middle Class
Upper- Middle Class
Some portion Upper class

Competitive comparison
Within our niche we have two significant competitors, Akhter
Furniture and Hatil Furniture. Akhter is a bigger company but
like us, operating mainly in our same niche, whose marketing is
better than its product quality. Akhter and Hatil furniture are
the market leader and we are the follower because we are new
in this market. But to stay in market we use our quality to
attract our consumers.

Competitors profile:
Our competitors profile are given below-

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1. Hatil Complex Ltd. is a leading doors and

furniture manufacturer in Bangladesh. Hatil has
been established in 1989 following the footsteps of
H.A. Timber Industries Ltd. - a company running
from 1966 with reputation in timber processing
sector.
Strengths: Good marketing, strong advertising budget,
relationships with distributors, strong direct sales.
Weaknesses: The product is more standardized, and of
lesser quality, with less sense of design and materials and
workmanship.
2. Akhtar Furnishers Ltd (AFL) started their
business in1976. Akhtar Furnishers Ltd (AFL)
has been committed to the ideal of creating
furniture of such impofessionals who sell and
deliver it.

Today, every employee feels it is a brand created by them,

and each of us is dedicated to earning your confidence
and building on this tradition of excellence.

Strengths: Financial backing, product quality.

Weaknesses: AFL has not seemed to understand our
niche, where to find the buyers, how to market as a
specialty niche instead of the more traditional furniture
channels.
Other competitors are Ahmed furnishers, anarkoli furnitures,
antara farnishers, anupam furniture, asha furnitures, aver green
furniture etc

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Overall Marketing Strategy

We focus on a special kind of customer, the person who wants

very high quality office furniture customized to work beautifully
with modern technology including personal computers,
scanners, internet connections, and other high-tech items. Our
customer might be in larger corporations, small or medium
business, or in a home office with or without a home-office
business. What is important to the customer is elegance, fine
workmanship, ease of use, ergonomics, and practicality.

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Our marketing strategy assumes that we need to go into

specialty channels to address our target customer's needs. The
tie-in with the high-end quality catalogs like Sharper Image is
perfect, because these catalogs cater to our kind of customers.
We position as the highest quality, offering status and prestige
levels of purchase.

The product strategy is also based on quality, in this case the

intersection of technical understanding with very high quality
woodworking and professional materials, and workmanship.
Our most important competitive edge is our assembly strategy,
which is based on interlocking wood pieces of such high quality
that assembly is not only a pleasure for our customers; it is
actually a feature that enhances the sense of quality.

Our marketing objectives

Maximize profit margin
Objective of the Pacific Furniture is to provide high quality
product and satisfy our customer by our product. We will take
premium price to our customer other than our competitors.
Thus we will try to maximize our product.
Quality leadership
The main objective of Pacific Furniture that its responsibility to
provided best quality what we will promise to our customers.
Pacific Furniture sets main objective to provide quality products

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that satisfy the customer need and their requirement. So Pacific

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Furniture will deliver the quality product.

Long relationships with customer
We will try to provide superior value to our customer what we
have

promised

through

advertising.

So

we

believe

the

customers will be loyal to our brand and build long term

relationships.
Communication objective
We will use different sources to attract their customer. The
objective of Pacific Furniture is to create awareness in our
customer about our new product. Pacific Furniture also tells
their customer that they provide pure wooden furniture to their
customers.
Strategy marketing objective
To build unique distribution system that provides
ubiquity at low cost.
To build high speed, efficient and vertical integrated
manufacturing capabilities to gain low cost advantage.
To increase advertisement activities.
To redesign packaging to a more attractive and familiar.
To make innovation in product so that it become more
portable and in convenience oriented form.
To improve product quality as ever provide
To maintain positive and steady growth each month.

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To experience an increase in new customers i.e. we

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have to ensure that our products have a high trial rate

which will help us to turn these new customers into long
term customers.
Generate brand equity at the markets we are catering
to as well as within the supplier and distribution
networks.

Positioning
Pacific Furniture handcrafts furniture from selected and custom
designs. By doing custom design work, we have the ability to
meet any special requirements of customers be it design, wood,
color or type of construction. Our personalized service provides
our customers with their own personal specialist. Our personal
specialist will maintain a database of their clients valuable
information such as client name, personal likes and dislikes,
wish list information, past purchases including dates, price, and
style, serial numbers and any other data which will assist our
customer in target their marketing efforts. We also keep a
photo inventory for insurance purposes as a part of our
customer service. Many of our customers have returned to a
smaller community and have purchased expensive homes and
wish to furnish them with exquisite furnishings which they can
pass on to their children, family and friends. They have a higher
education background and are employed by large companies.
They use the internet frequently and appreciate the
convenience of having access to shopping and personal records
online.
Our main retail competitor, Akhtar furnishers ltd, is located in
New Elephant road, 25 minutes away. We plan to beat this
competition by offering more variety and having a personal
service. Our other competition is from chain stores, some of
which we plan to supply as a wholesaler.

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Risk and Overcome

Our main risks are given below Raw material: Some time our supplier will not
capable to supply us raw material and its a big risk
for us. And for that we will buy it from our local wood
seller who are sale wood locally.
Strike: The workers will strike from their work. On
that time we will take an emergency action to cool
down them and back them to work.
Advertisement problem: Some time we will face
Advertisement problem and for that problem our
Marketing will slow down. On that time we will make
some campaign for recover that risk.
Poor management: Poor management also a risk for
our

business.

If

we

see

that

we

have

poor

management then we will recover it and increase our

management strength.
Natural disaster: For uncertainty of Natural disaster
we stock some wood for our future production and
recover this type risk.

Pricing

1. Bed sheds:

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Our products prices are given below by categorically:-

Single Bed sheds

9000tk

Semi double bed sheds

Double bed sheds

14000tk

20000tk

2. Almira :
Small

12000

Medium
Big

20000
25000

3. Sofa:
Single

8000

Long

18000

Set

40000

4. Dining table:
Table with 4 chares

13000

Table with 6 chares

20000

5. Dressing table:
Small
Medium
Large

8000
15000
23000

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Distribution
In the next five year we want to increase our sell 25.45%, for
this we have to increase our main distributors number in the
remote area of Bangladesh. We have to evaluate their capacity
and then try to sell our product in their distribution network
more frequently. We have a plan an action program for our
distributors sales persons.
We are new in this market but still we have already covered
Dhaka and some other districts by our strong distribution
network. We have divided Dhaka and other districts into some
operational zones and each zone has its separate distributor.
Beside this we are trying to cover all the districts and some of
the major Thanas by appointing new distributors.

Following is the flowchart of our distribution network:

Factory

Super Shops

Final consumer

Distributors

Final consumer

A distribution strategy defines how you are going to move

products from point of creation to points of consumption, in a
cost-effective manner. The effectiveness of distribution

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coverage and practice is of paramount importance in achieving

the desired furniture sales.

Location
Our companys factory will locate in Gazipur. And our outlets
are located in Dhanmondi, New Market, Azimpur, Panthopoth,
Green
road,
Farmgate,Mirpur,
Jatrabari,
Motijhil
and
Mohammedpur.

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o Raw materials:

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The advantage of this location are given below-

We collect our raw materials like wood from

various areas for the easy accessibility and less
barriers. The transport facility is good for truck and
Lorries. The areas are

Sundarban
Khagrachari
Chittagong
Bandorban

o Place of Factory establishment:

Our factory will locate in Gazipur because there
have easy and low cost labor accommodation, easy
transportation to Dhaka and easy transportation of raw
materials from Sundarban.
o Required skills with work force availability:
Gazipur is suitable for getting much labor in low
cost. And for that reason we will locate our factory to
Gazipur.
o Ecological requirement:
Gazipur is stay beyond the prohibition of ecological
disasters like flood, earthquake etc.
o Public utility:
The public utilities like Electricity, Gas, Water and
other security service are available here and also for
this reason we will locate our factory there.
o Transportation of finish goods:

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Gazipur is most popular for availability of delivery

vehicles. And for that reason we locate our factory for
easy transport of our finish goods.
o Scope for expansion of our factory:
Our head office will be locate in Mirpur and outlets
are locate in Dhanmondi, New Market, Azimpur,
Panthopoth, Green road, Farmgate,Mirpur, Jatrabari,
Motijhil and Mohammedpur. And we can expand our
factory to other area like Narayangonj, Savar etc.
because that areas also famous for transportation
affordability and customer convenience.

Advertising and promotion

Pacific Furniture will use different sources to communicate their
target marketing. We will use those sources on that the more
customer attract like Local Cable, Newspapers, Billboard and
when they lunch any scheme in Furniture they use pamphlets
to aware their customer. Pacific Furniture will use the channel to
attract the customer and give fully information about Furniture
through these Electronic media. As our target consumers are
middle and old age people, for this reason we promotion our
product to give advertise in television, radio. We also use
vehicle

writing

method

and

posturing

for

our

product

advertisement.

We choose some media for our products advertising. This are-

2. Television

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1. Internet
3. Radio
4. Newspaper

Internet:
We use internet based advertising like Facebook, Prothomalo.com, dailykalerkantha.com, bdpratidin.com etc. In facebook
and other daily newspapers website there have so much visitor
every day. And the total amount of visitor from those website is
more than 10,00,000 visitor every day. And this the most
effective advertising plot for us.

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Television:

Television is also a most popular media item. Every people of

our country use it for entertainment. And its our platform to
advertise our product. We use Channel I and Ekushey television
for our advertising.

CCF ro H e s qA t -u N e3 N n0 c0E y , L 0 - 0 CI 0 o n t i n u o u s - A l e r n a t i n g B a s i s
FFC
CE

rr o ee s qn t qu- 1 eu 0 ne 0 cn , y c0 -y 0 -C 0 Io n n t t e i nr m u o i t u t se d - A b l ae sr ni s a t i n g B a s i s
okH s u A t s- N 1 h 0 N e 0 Ey , 0 L T 0 IV0

Radio:
Radio also a most popular media item in Bangladesh. Many
people of our country use it for audio entertainment. And its
also our platform to advertise our product. We use Radio today,
ABC Radio, for our advertising.

CSRC
AAC
RCAS

aAoo mssD tt Ie-- O33 p00 T o,, O00 l i 00Dc 00yA Y

tBo sCS t o - R 3m A 0 rD, a0 I mO0 0e p o p u l a r P r o g
Aato msDS t oI -eO3m p0 Tr o, aO0 l mi 0Dc 0yeA Y p o p u l a r P r o g

Newspapers:Most people of Bangladesh read newspaper in

morning after wake up. And for that reason we use most
popular newspapers for our advertising. The newspapers are
Prothomalo.

5 t h P p R a O g Te -H O O n M c e A a L w O e e k
C o s t - 3 0 , 0 0 0
5 t h P p R a O g Te -H O O n M c e A a L w O e e k

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Sales promotion
Offering free samples:
To promote our product we give free samples to our customers
to understand our product quality. And its a popular promoting
policy in Bangladesh.

Coupons
Coupons are also given to our consumers when they are come
to buy our product. By that coupon a customer can win an
exclusive prize. And for that customer will increase.

Discount on sale:
We give some discount on our sale for getting more customer
easily.

Publicity:
Product launches:
On the time of product launches we arrange a meeting or
function for our product publicity. By this type action product
publicity is increased very much.

We arrange some special events including community

involvement with name of our brand. And also for that our
popularity will increase.

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By writing articles on newspapers or magazines we can

increase our publicity.
By sponsor on local festival fair we can gain publicity.
We can also increase publicity by attend on business fair.

Company website:
By our company website every one can know with us and our
products. And they also can buy products from there.

Sourcing
We work with three wood suppliers, all local. CTG Wooden
Complex supplies most of our oak and a bit of cherry and some
other specialty woods. CTG Wooden Complex has been in
business for as long as we have, and has given us good service
and good prices. This is a good, stable supplier. Golden aero
wooden manufacturing is a good second source, particularly
for cherry and specialty woods. We've used Dhaka wood for
filling in when either of our main two suppliers were short. We
also work with a number of specialty manufacturers for
furniture fittings, drawer accessories, glass, shelving
accessories, and related purchases. Although we aren't a major
player compared to the major furniture manufacturers, we are
one of the biggest buyers of the custom materials we need.

Product life cycle strategy

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Introduction:
The product life cycle is based use to interpret product and
market dynamics. At the introduction stage we launch our
product, Furniture. As we are new in the market thats why our
market is small, our sales is low, and our competition is also
low. For this reason we need to spend more for our product
promotion. For beginning a new business our cost per product
will be high. So our prices will also being high. For this reason
first year our profit will be low or we will face loss.

Growth: Pacific furniture is serve furniture product but in the

growth stage we think our seals will increase than the
introduction stage. For our strong marketing strategy people
will know about product rapidly and our sales will increase.
Here our product market is growing, our sales are high, and our

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40

competition is on moderate. To compete with our competitors

we have to decrease our cost how much we can. At the growth
stage our profit will increase day by day. Because in this stage
we can decrease all cost of our product. We will expenses more
money in advertising and promotion of our product and give
much importance in these two sectors. So that more customers
will be attract to our product. As our product will move toward
maturity stage, the number of competitors will increase day by
day. Then it will be challenge for us to stay in the market. In this
stage we can create awareness about our product. For this
reason we will be able to maximize our product share.

Maturity: In the maturity stage our product will reach top most
level of sales. At this time our production cost per unit will be
low. Number competitors will be falling in this stage. Here our
product market is large, our sales are flattening, and our
competition is high. In this stage our profit will me be at top
level because in maturity stage (4.6 years) we will reach break
event point. In this stage our market share will be increasing
and distributors will increase. To hold the market we will launch
new product.

Decline: In this stage our products sales will decrease day by

day. We will expend more for R & D. We will try to extend our
product. Different problems will be faced in this stage such as
old looks.

SWOT Analysis

41
Page

SWOT is the combination of 4 key words, which constitutes the

internal and external issues of a company.
Strength:
Strength refers to the competitive advantages and the
other distinctive Competencies that a company can exert in the
market place.
Weaknesses:
Weakness is constraints that hinder movements in certain
directions.
Opportunities:
A marketing opportunity is an area of buyer need in which
a company can perform profitable.
Threats:
A threat is challenge posed by an unfavorable tend or
development that would lead, in the absence of defensive
marketing action, to deterioration in sales or profit.

Innovative product
Competitive Pricing

Weaknesses

Page

Strengths

42

A Snapshot of SWOT Analysis:

Lack of Brand Awareness

Similarity of packaging

Strong Distribution Channels

Opportunities

Threats

Growing number of customers

Increased Competition

Creation of Loyal customers

Down-ward pricing pressure

Increasing customer awareness

Large
number
competitor

Cost efficient Technology

Rise of the brands value

of

indirect

Economic factor
Copyright threats

Duties and responsibilities of

partners
The responsibilities and duties of all partners are given belowManaging Director
Our companies managing director will be Zia-ur-Rahman Galib.
Managing Director (MD) of a company is the leader of an
organization. The position of our company will be held by MD.
This the highest position in an organization and have the
responsibility for the success or failure of that organization. The
main duties and responsibility of a MD is Welcome new employees in the organization.
Making the organization Effective -capable of doing the
right things.
Making the organization Innovative for doing new things.

43

of

incoming

and

outgoing

Page

Managing all forms

communication.

Responsibilities of Marketing Manager:

Md. Yeasin Khan is the Marketing manager of our company. The
Marketing departments works are operated by Marketing
Manager. Marketing managers major duties are Determine the eligibility of those wanting to sell at the
market based on the rules established by markets
governing body. Actively recruit new producers to
expand the variety or products for sale.
Collect rental fees from vendors and maintain accurate
records of payment. Many markets charge a flat daily
fee, while others collect fees based on a percentage of
a vendors sales (usually between 5 and 8%)
Assign selling spaces if they are not allocated on a first
come, firstserved basis. It is recommended to keep
vendors in the same space throughout the season to
avoid both vendor and shopper confusion.
Advertise and promote the market. Research suggests
that freshness is one of the main motivations for buying
local produce, and your image should project freshness,
quality, and value. Promotions may include special
events, banners, signage, radio spots, and free
coverage in local newspaper.
Responsibilities of R & D
Rafiqul Islam is the R & D manager of our company. The R & D
departments works are operated by R& D manager. R& D
managers major duties are-

Research for the new product idea or modify the existing

one.
Eliminating cost for producing by using different method.
Design of new product process and type.

Page

44

Focus on improvement, development, modification and

introduction of new product, features, process.
Be up to date with new technologies, approach.
Responsibilities of Production Manager
For this position we have selected Fahima Akter Aurin. She will
also organize the production/operation department of the
organization. The key responsibilities of this position are stated
below
Control the whole production process.
Ensuring raw material is providing timely and made into
finished goods effective.
Set standard and targets for each section for production
process.
Monitoring the quantity and quality of raw material
used and produced goods of a production line.
Strictly monitoring each stage of production.
Human Resource (HR) Manager
Arif Hossain is the HR manager of our company. The human
resource (HR) departments works are operated by HR
manager. HR managers major duties are Recruiting is the main duty of a HR manager.
Arrange training programs for those who are newly
selected to join the organization and also or existing
employee.
See the performance of the employee.
Post advertisement in printed media, Internet or
business magazines to hire new employee.
Identification of job, responsibility and duty of the
organization.

Page

45

The Responsibility of Finance Manager

Sarkar Rajibul Hasan is the Finance manager of our company.
The Finance departments works are operated by Finance
Manager. Finance managers major duties are-

Finance manager oversees the preparation of financial

reports, direct investment activities, and implement
cash management strategies.
Develop and implement accounting and internal control
systems, standard operating procedures.
To deliver accurate and timely finance transactional
processing in finance shared service centre.
A financial manager is responsible for providing
financial advice and support to elements.
Formulating strategies and long-term business plan.
Developing financial management mechanisms that
minimize financial risk.

Key Responsibilities of Accountants

Omar faruk is the Accounts manager of our company. The
Accounts departments works are operated by Accounts
manager. Account managers major duties are Prepare profit and loss statements and monthly closing
and cost accounting reports.
Compile and analyze financial information to prepare
entries to accounts, such as general ledger accounts,
and document business transactions.
Establish, maintain, and coordinate the implementation
of accounting and accounting control procedures.

46

Analyze and review budgets and expenditures for local,

grants.

Page

state, federal, and private funding, contracts, and

Monitor and review accounting and related system

reports for accuracy and completeness.
A
M
R
P
H
F
ra
ciu
r
o&
m
cn
k
oad
eg
D
n
u
cti
n
in
M
teR
g
seian
g
son
M
aon
M
D
gM
u
an
ei
arM
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r

Partnership Agreement
FORM OF OWNERSHIP
The form of the business is partnership business and all the
partners are responsible for the business. The partners are
jointly and severally liable for all debts of the firm.
Partnership Agreement

Page

47

1. The name of our business will be Pacific Furniture

Company. The factory address of the firm will be Gazipur,
Dhaka and the office will be in 72, Mirpur, Dhaka-1208
2. There are 7 Partners of this company. The partners name
and address is given belowZia-ur-rahman Galib

Md. Yeasin Khan

Managing Director

Marketing Manager

Phone: 02 8645781 (Ext- 08)

Phone: 02 8645781 (Ext- 07)

Mobile: 01558845845

Mobile: 01685485625

Email: md@pacificfurniture.com
mktg@pacificfurniture.com

Email:

Web: www.pacificfurniture.com
www.pacificfurniture.com

Web:

Fahima Akter Aurin

Arif Hossain

Production Manager

HR manager

Phone: 02 8645781 (Ext- 02)

Phone: 02 8645781 (Ext- 03)

Mobile: 01685485625

Mobile: 017215845865

Email: production@pacificfurniture.com
hr@pacificfurniture.com

Email:

Web: www.pacificfurniture.com
www.pacificfurniture.com

Web:

Rafiqul Islam

Sarkar Rajibul Hasan

R & D Manager

Finance Manager

Phone: 02 8645781 (Ext- 05)

Phone: 02 8645781 (Ext- 04)

Mobile: 01925452157

Mobile: 01723512458

Web: www.pacificfurniture.com
www.pacificfurniture.com

Page

48

Email: rd@pacificfurniture.com
finanace@pacificfurniture.com

Email:
Web:

Omar Faruk
Accounts Manager
Phone: 02 8645781 (Ext- 06)
Mobile: 01821454781
Email: accounts@pacificfurniture.com
Web: www.pacificfurniture.com

3. Its a furniture business. It will produce furniture and sale

them to the local market.
4. The investment amount of the each partner is same. Their
total investment is 3 crore tk. And every partner gives
42,85,715tk.
5. The partners will share profit and loss equally.
6. Every partner can withdraw not more than 50,000tk every
month.
7. The partners job description
responsibilities is given below:-

and

the

duties

and

Managing Director
Our companies managing director will be Zia-ur-Rahman Galib.
Managing Director (MD) of a company is the leader of an
organization. The position of our company will be held by MD.
This the highest position in an organization and have the
responsibility for the success or failure of that organization. The
main duties and responsibility of a MD is Welcome new
employees in the organization. Making the organization
Effective capable of doing the right things.
Making the

Page

49

organization Innovative for doing new things. Managing all

forms of incoming and outgoing communication.
Responsibilities of Marketing Manager:
Md. Yeasin Khan is the Marketing manager of our company. The
Marketing departments works are operated by Marketing
Manager. Marketing managers major duties are: Determine the
eligibility of those wanting to sell at the market based on the
rules established by markets governing body. Actively recruit
new producers to expand the variety or products for sale.
Collect rental fees from vendors and maintain accurate records
of payment. Many markets charge a flat daily fee, while others
collect fees based on a percentage of a vendors sales (usually
between 5 and 8%). Assign selling spaces if they are not
allocated on a firstcome, firstserved basis. It is recommended
to keep vendors in the same space throughout the season to
avoid both vendor and shopper confusion. Advertise and
promote the market. Research suggests that freshness is one of
the main motivations for buying local produce, and your image
should project freshness, quality, and value. Promotions may
include special events, banners, signage, radio spots, and free
coverage in local newspaper.
Responsibilities of R & D
Rafiqul Islam is the R & D manager of our company. The R & D
departments works are operated by R& D manager. R& D
managers major duties are: Research for the new product idea
or modify the existing one. Eliminating cost for producing by
using different method. Design of new product process and
type. Focus on improvement, development, modification and
introduction of new product, features, process. Be up to date
with new technologies, approach.
Responsibilities of Production Manager
For this position we have selected Fahima Akter Aurin. She will
also organize the production/operation department of the
organization. The key responsibilities of this position are stated

50

below: Control the whole production process. Ensuring raw

Page

material is providing timely and made into finished goods

effective. Set standard and targets for each section for
production process. Monitoring the quantity and quality of raw
material used and produced goods of a production line. Strictly
monitoring each stage of production.

Human Resource (HR) Manager

Arif Hossain is the HR manager of our company. The human
resource (HR) departments works are operated by HR
manager. HR managers major duties are: Recruiting is the
main duty of a HR manager. Arrange training programs for
those who are newly selected to join the organization and also
or existing employee. See the performance of the employee.
Post advertisement in printed media, Internet or business
magazines to hire new employee. Identification of job,
responsibility and duty of the organization.
The Responsibility of Finance Manager
Sarkar Rajibul Hasan is the Finance manager of our company.
The Finance departments works are operated by Finance
Manager. Finance managers major duties are: Finance
manager oversees the preparation of financial reports, direct
investment activities, and implement cash management
strategies. Develop and implement accounting and internal
control systems, standard operating procedures. To deliver
accurate and timely finance transactional processing in finance
shared service centre. A financial manager is responsible for
providing financial advice and support to elements. Formulating
strategies and long-term business plan. Developing financial
management mechanisms that minimize financial risk.

Page

51

Key Responsibilities of Accountants

Omar faruk is the Accounts manager of our company. The
Accounts departments works are operated by Accounts
manager. Account managers major duties are: Prepare profit
and loss statements and monthly closing and cost accounting
reports. Compile and analyze financial information to prepare
entries to accounts, such as general ledger accounts, and
document business transactions. Establish, maintain, and
coordinate the implementation of accounting and accounting
control procedures. Analyze and review budgets and
expenditures for local, state, federal, and private funding,
contracts, and grants. Monitor and review accounting and
related system reports for accuracy and completeness.
8. Conforming of all orders by all partners.
9. By board meeting of the partners will resolve the major
and minor problems.
10.When any partner will die or retire or insufficient to stay
with us then the partnership will dissolve. It not mean that
the company is switched off.
11.A partner may, after giving written notice to the other
partners, transfer his/her interest in the partnership to a
revocable living trust of which he/she is the grantor and
sole trustee.
12.When every partners want to disclose the business and if
government will find any unethical work on the business
then the business will closed.

Staffing plan
Strategic Staffing:
When we are hiring team members, we need to look at them a
little differently. Before, we looked for the ability to cover a

Page

52

shift, where now we look for people that can stretch two more
levels from where they are today. Delivering our customer
experience is not easy. We need to find people who are
passionate about Pacific Furniture and our culture Fun, Integrity,
Balance, Empower, and Respect."
It's not about getting a group of people to interview; it's about
getting the right people. To find these potential employees, we
will try new ways to attract and reach the new talent pool of
Generation. To support the general managers in the seasonal
swing in staffing their stores, the recruitment team had given
some stores access to online tools for their hourly team
members.
We can get help from many web site, University, Newspaper
and Business Magazine to find this more qualified talent pool.
Performance Management:
Performance Management including Individual Development
Plans (IDP), examines the employee as a whole, measuring
skills, behaviors, and results. The mindset will shifted once
again; before performance evaluations will be very tactical and
activity based, where as today, leaders are asked to dig deeper
into the behaviors that drive results.

The focus is more heavily weighed on assessing potential

correctly and then developing the plan based on their
strengths, weaknesses, or opportunities.
POSITION

Managing
Director

EDUCATIONAL

Experien

OTHER

BACKGROUND

ce

QUALIFICATION

MBA

7yrs

Excellent
interpersonal

(Major in HR)

communication
skill,

excellent

leadership.
HR Executive

BBA(Major

in 5 yrs

Managerial

Marketing

MBA(Major

Manager

Marketing)

Page

53

HR)

10yrs

Brand

M Sc / B Sc

4 yrs

Executive
Production

MBA

4 yrs

Manager

and

hard working
Good command in

Command

over

Production
Graduate

in 3 yrs

Marketing
Finance

Innovative

English

Manager
Executive

experience.

Command

over

Ms office

MBA, Major in 8 yrs

finance.

Experience as a
Decision provider,
financial analyst.

Accountant

BBa

or

MBA, 3 years

Major

in

Skill in accounting
terms.

Accounting.
National Sales MBA

7 yrs

manager

Excellent
interpersonal
communication
skill,

excellent

leadership.
Supervisors

Bachelor
Degree

3 years

Good

knowledge

about

Furniture

business.

Recruitment
This is the process of discovering potential candidates for
actual or anticipated organizational vacancies. Employees can
be recruited from internal search and/or from external search.
However, Pacific Furniture will be recruiting through external
search. External search can be done through advertisements in

54

newspapers, employment agencies, colleges and universities

Page

and from other professional organizations.

The recruitment process of Pacific Furniture will start by giving
advertisement in newspapers, where the applicant will be told
to collect application form from the main office in Mirpur. The
applicant will have to fill the application form and submit it
along with a cover letter and curriculum vitae.
The search for employees can also be done through online
employment agencies like bdjobs or in prothomalo jobs.
Circulation can also be done in colleges and universities.
Selection
Selection activities follow a standard pattern, beginning with
an initial screening interview and concluding with the final
employment decision. The selection process for Pacific Furniture
will follow the steps given below:
Preliminary Screening:
The first step in the selection process whereby job inquiries are
sorted. This will consist of two steps: screening inquiries, and
screening interviews. The applications will be screened and
sorted, and then the selected applicants will be called for an
interview, and the final applicants will be screened and selected
from the final interview.
Final Selection:
The final candidates selected will be therefore, be assigned
their work.

Page

55

Employment Test:
After the employees are selected, they will have to go through
an employment test. This is not applicable for the blue collar
workers but mandatory for the white collared employees and
for the sales assistants and the cashiers.

Sales Forecast
For the year 2013

Month/Produ
ct name

Bed shed

Almira

Sofa

Dining table

Dressing
table

January

50000

60000

120000

20000

20000

February

60000

40000

140000

90000

40000

March

80000

85000

70000

53000

35000

April

150000

65000

150000

85000

25000

May

140000

50000

65000

45000

50000

June

70000

90000

54000

65000

15000

July

90000

80000

65000

75000

5000

August

80000

65000

25000

64000

12000

September

170000

45000

50000

85000

65000

October

70000

30000

45000

45000

40000

November

75000

70000

65000

150000

38000

December

78000

55000

85000

60000

54000

Total

1113000

735000

934000

837000

399000

Net total

4018000

Page

56

Sales Forecast - 2013

Total Production
Total Sales

: 40,50,000
: 40,18,000

Explanation of sales forecasting:

By considering several factors we have estimated future sales
throughout the year of 2013. We are going to start production
and selling from the Jan of 2013. We are launching five
products.

1) January:

Bed sheds
Almira
Sofa
Dining table
Dressing table

Page

57

Our production and selling will be start from January. As

the market is unaware about the product, so we will produce 25
units.
2) February:
Considering cultural environment and our product capability,
we will increase our product 40 and sales will be 35 units.
3) March:
We will sustain of production level but the sales will increase 45
units because of increasing awareness.
4) April:
As summer started, the factor weather and easy availability of
material will increase our production to 75 as well as sales to
60.
5) May:
In this month both production and sales will increase due to
middle of the year.
6) June:
We will sustain the production level and sales will be in
acceptable level for weather factor the sales will down for some
unit.
7) July:
As Ramadan will start for end of July, it will affect our sales
positively, it will be 60 units.
8) August:
Because of Ramadan and biggest festival Eid-Ul-Fitar, our
sales will be the highest of the year, as we estimated.
9) September:
In these months, the sales will be in normal level.
10) October:
Two religious festivals will be occurring in this months EidUl-Azha and DurgaPoja. So, the sales will be second highest.

Page

58

11) November:
As because of weather and less material availability, the
sales will decrease.
12) December:
For some factors like weather and social forces, the sales
volume will decrease.

Sales Forecast for year 20132017

2013

2014

2015

2016

2017

Total Sales

4018000

9854000

1450000
0

2350000
0

3200000
0

Total
production

4050000

9953000

1500000
0

2360000
0

3220000
0

Bed shed

1113000

2854000

4200000

6500000

1000000
0

Almira

735000

1900000

3800000

4500000

7000000

Sofa

934000

1500000

2000000

3500000

5500000

Dining table

837000

2500000

3500000

6000000

6500000

Dressing table

399000

2100000

1000000

3000000

3000000

59
Page

Pacific Furniture
Cash flow statement 2013
Cash in

Januar
y

Febru
ary

March

Cash sales
Bed sheds

50000

60000

80000

Almira

60000

40000

85000

Sofa

12000
0
20000

14000
0
90000

70000

20000

Dining
table
Dressing
table
Total
Collection
from A/R
Term loan
processed
Sales fired
asset
Total cash
in
Cash out
Rent
Magi
Salaries
Other
Salaries

April

May

June

July

Augus
t

Septe
mber

15000
0
65000

14000
0
50000

70000

90000

80000

90000

80000

65000

17000
0
45000

65000

54000

65000

25000

50000

53000

15000
0
85000

45000

65000

75000

64000

85000

40000

35000

25000

50000

15000

5000

12000

65000

27000
0
400

37000
0
300

32300
0
400

47500
0
400

35000
0
80

29400
0
0

31500
0
400

24600
0
400

41500
0
20

10000
00

10000
00

10000
00

10000
00

10000
00

80000
0

13703
00

13234
00

14754
00

12940
00

80000
0
10000
00
21154
00

80000
0

12704
00

10000
00
20000
00
33500
80

10464
00

12150
20

30000
0
73200
0
19250
0

30000
0
73200
0
19250
0

30000
0
73200
0
19250
0

30000
00
73200
0
19250
0

30000
0
73200
0
19250
0

30000
0
73200
0
19250
0

35000
0
73200
0
19250
0

35000
0
80000
0
19300
0

35000
0
80000
0
19300
0

O
e

Utilities
Repair

60

Telephone

900

900

900

30000

30000

30000

1000

1000

1000

900

900

900

900

1000

900

30000

30000

40000

40000

40000

40000

2000

2000

2000

3000

3000

3000

Page

wage

License
municipal
Insurance

40000
10000

10000

10000

10000

10000

10000

10000

10000

10000

Other
Operation
Pay of
purchase
of
net asset

10000

10000

10000

5000

5000

7000

7000

7000

9000

10000
00

80000
0

50000
0

50000
0

30000
0

30000
0

30000
0

20000
0

25000
0

Pay of

50000

50000

50000

50000

50000

50000

50000

50000

50000

Income

50000
0
50000

50000
0
30000

60000

70000

60000

70000

80000

80000

80000

30000

20000

30000

30000

20000

30000

20000

25064
00
50000
000
12704
00
25064
00
48764
000

22064
00
30000
000
13703
00
22064
00
29163
900

19164
00
30000
000
13234
00
19164
00
29407
000

19124
00
30000
000
14754
00
19124
00
29563
000

17224
00
30000
000
33500
80
17224
00
31627
680

17344
00
25000
000
12940
00
17344
00
24559
600

17854
00
25000
000
21154
00
17854
00
25330
000

17640
00
25000
000
10464
00
17640
00
24282
400

18059
00
20000
000
12150
20
18059
00
19409
120

Pay of A/B
Total cash
out
Opining
balance
Add : Cash
in
(-) Cash
out
Surplus

Pacific Furniture
Cash Flow Statement- year 2013

61
Page

Cash flow statement 5 Years

Pacific Furniture Company
Cash Flow Statement- Year 2013-2017

Cash sales
Collect from A/R
Term loan Process

62

Cash In

2014

Page

2013

2015

2016

2017

4018000

9854000

14500000

23500000

32000000

30,000

50,000

60,000

80,000

2,00,000

11200000

8800000

10000000

1000000

8000000

5,58,000

10,00,000

20,00,000

30,00,000

66,00,00
0
1870400
0

60,00,000

80,00,000

1,00,000

24560000

24580000

40000000

41,00,000

45,00,000

50,00,000

98,00,000

10,00,000

28,00,000

30,00,000

1,30,00,0
00
50,00,000

11,200

40,00,00
0
95,30,00
0
25,00,00
0
20,000

30,000

35,000

50,000

4,41,500

6,00,000

7,00,000

8,00,000

10,00,000

1,20,000

1,20,000

1,20,000

2,20,000

4,00,000

45,50,000

60,00,000

70,00,000

1,00,000

6,00,000

50,00,00
0
6,00,000

6,00,000

12,00,000

1,20,00,0
00

3,50,000

4,50,000

5,00,000

5,50,000

5,00,000

2,25,32,20
00
32500000
0
15351720

23,34,00
0
3174345
20
2000000
0
2334000
0
3140945
20

2,61,80,0
00
31409452
0
28066400

2,88,35,0
00
31598092
0
30048000

3,84,50,0
00
31719392
0
36400000

26180000

28835000

38450000

31598092
0

31719392
0

31514392
0

Sales of fixed
Assets
Other Cash receive

40,50,000

Total Cash in

15351720

Cash Out
Rent

39,50,000

Mgt Salaries

91,24,000

Other Salaried wage

23,12,500

Telephone expense
Utilities
Repair and
maintenance
License and main.
Insurance
Other operating
expense
Pay of purchase of
fixed assets
Pay of long term
loan
Income tax payment
Pay of AIP
Total cash out
Opening Balance
Ad : Cash In
Less: Cash out

22917200

Sur plus

31743452
0

Pacific Furniture

Page

63

Cash Flow Statement- year 2013-2017

64
Page

Pacific Furniture Income Statement

Pacific Furniture
Income Statement
For the year 2013-2017
Year 2013
Sales
Less: Sale return
and allowance
Net Sales
Cost of goods sold
Gross margin

Year 2014

Year 2015

Year 2016

40180
00
-30,000

985400
0
-50,000

1450000
0
-60,000

235000

3,988,0
00
148500
0
2,503,0
00

9,804,0
00
215000
0
7,654,0
00

14,440,0
00
3250000

23,420,
0

11,190,0
00

19,520,
0

-80,00

390000

Less: Expenses
Selling Expense

90,000

Administrative
Expense
Depreciation
Expense
Utilities Expense

99,000

Miscellaneous
Expense
Advertising
Expense

Earnings Before
Income & Tax
Income Tax (15%)
Net Profit After Tax

10,00,0
00
20,000

1,10,00
0
1,20,00
0
12,00,0
00
30,000

1,50,00
0
1,60,00
0
13,50,0
00
50,000

2,00,00
0
2,60,00
0
16,00,0
00
80,000

50,000

50,000

80,000

10,00,0
00

10,00,0
00

15,00,0
00

1,50,00
0
15,00,0
00

225900
0
244,00
0
36,600
207,40
0

271000
0
4,944,0
00
741,60
0
4,202,
400

3290000
7,900,00
0
1,185,00
0
6,715,0
00

376000

15,760,
0
2,364,0

13,396
00

65
Page

Pacific Furniture
Balance Sheet
As for year 2013-2017
2013

2014

2015

2016

Asset
Current assets :
Cash
Accounts
Receivable
Total current
assets
Long term
Assets :
Land
Building
Machinery
Less:
Accumulate
Depreciation

4018000

9854000

80,000

120000
40,98,0
00

1450000
0
150000
9,974,0
00

2350000
0
200000
14,650,
000

23

7000000

7500000

8000000

9000000

1000000
0
1000000
0
-1096000

1200000
0
1100000
0
-6100000

1350000
0
1200000
0
-6700000

1500000
0
1350000
0
-7500000

Total long term

assets
Total assets

259040
00
30,002,
000

244000
00
34,374,
000

268000
00
41,450,
000

30

53

Liabilities :
Bank loan

4000000

4000000

4000000

4000000

Net worth

25,862,0
00

30,374,0
00

37,450,0
00

49,700,0
00

Total liability

30,002,
000

343740
00

414500
00

53

Page

66

Break even analysis

Break even analysis is a technique widely used by production
management and management accountants. It is based on
categorizing

production

costs

between

those

which

are

"variable" (costs that change when the production output

changes) and those that are "fixed" (costs not directly related
to the volume of production).
Total variable and fixed costs are compared with sales revenue
in order to determine the level of sales volume, sales value or
production at which the business makes neither a profit nor a
loss (the "break-even point"). For our business, it is very
necessary to do break-even analysis. After knowing our breakeven quantity, we will be able to make our business profitable.
Fixed Costs
Fixed costs are those business costs that are not directly
related to the level of production or output. In other words,
even if the business has a zero output or high

Total Fixed cost

Land
Building
Equipments
Vehicle
Machineries
Furniture
Insurance Ex.
License Ex.
Total Fixed cost

70,00,000
1,00,00,000
50,00,000
60,00,000
1,00,00,000
20,00,000
5,00,000
2,00,000
40700000

67
Page

Variable Costs
Variable costs are those costs which vary directly with the level
of output. They represent payment output-related inputs such
as raw materials, direct labor, fuel and revenue-related costs
such as commission. A distinction is often made between
"Direct" variable costs and "Indirect" variable costs.

Total variable cost :

Factory overhead
cost
Transportation Exp
Utility Bill
Production payroll
Telephone Bill
Advertisement
Administration
payroll
Total

80,000
50,000
1,50,000
10,00,000
11,200
10,00,000
12,00,000
34,91,200

Total cost

= 40700000

Total sales

= 4018000

Sales unit

= 300 unit

Sales per unit

= 4018000/300

= 13393.33
Variable cost per unit

= 3491200/300

= 11637.33

68

= 40700000 / (13393.33-11637.33)
= 40700000/ 1756

Page

BEQ

= 23177.68 unit

Total cost: Fixed cost + Total variable cost

Fixed cost

= 40700000

Total variable cost

269726310.8

(23177.68*11637.33) =

Total cost

= 310426310.8

Total Revenue

= 23177.68*13393.33 = 310426316.8

So, TOTAL COST= TOTAL REVENUE

Figure: Break-even point

Roles
Current ratio

Curren Asset/
Current Liabilities

Quick or
asset Ratio

current asset inventory - prepaid

expense/curent
liabilities

Debt equity
ration

debt/equity

Operating
expense
ration

Total operating
expense- interest
expense

Inventory
turnover ratio

1. Cost of good sold/

Avg inventory

Page

69

Ratio Analysis
2013

2014

2015

4098000/300020
00
0.14%
(4098000300000200000)/300020
00
0.12%
2000000/300000
0
0.67%
(2259000200000)/401800
0
0.51%
1485000/660000

14650000/414500
00
0.35%
(14650000700000200000)/4145000
0
0.33%
2000000/3000002

365/2.24

9974000/343740
00
0.29%
(9974000700000200000)/343740
00
0.26%
2000000/300000
1
0.67%
(1090000200000)/985400
0
0.09%
2150000 /
660000
3.25
365/3.25

365/4.92

365

162.22 days
(80000/4018000
) * 365

111.96 days
(120000/985400
0) * 365

74.04 days
(150000/1450000
0) * 365

(20
0) *

7.29 days
226000/3000200
0
0.01%
192100/7500000

4.46 days
1090000/343740
00
0.03%
926500/7500000

3.79 days
1900000/4145000
0
0.05%
1520000/7500000

0.03%

0.12%

0.20%

2.24
2. Avg days to
turnover
Average
collection
period

Accounts
receivable/Sales

Return on
total asset

operating
income/total asset

Return on
Equity on
investment

Net income/ Share

holder equity

237
00

(23
800
200
0

200

0.67%
(1900000200000) /
14500000

(27
200
0

0.12%
3250000/660000

390

4.92

276
0

220