Future Outlook and Trends

Bangladesh’s economy has been relatively resilient to the global

recession. It is expected to grow at 6% in the following fiscal year.
While we have seen negative effects in the garments industry and
amongst other exporters, the domestic consumption has largely
remained the unharmed. Since our primary market is the domestic
market, at least initially, the economic condition does give a positive
indication.

We have found that present customers are more fashion conscious

and more selective than ever before. This means that they are
harder to please but are also willing to pay for the extra effort. So,
as customers get more aware about what they choose to wear,
designer jewellery will meet the standards of the most selective
consumers.

Bangladesh has changed in many manners, but its culture, in

relation to weddings, has largely remained similar. The only
difference is that they are grander nowadays. In other words, the
potential market for traditional jewellery has only increased. We
know that the jewellery market of Bangladesh is primarily
dominated by gold jewellery. 22-carat gold is the most popular type
in Bangladesh, which is approximately 96% pure. Gold is important
in Bangladeshi culture for use as ornaments and also as a method of
saving wealth. In the jewellery market, there have been significant
changes in present market trends and future outlooks. The price of
gold has increased three-fold in the local markets within the last five
years. As a result, substitutes of gold are becoming more popular for
this very traditional part of Bangladeshi culture, creating an
excellent opportunity for Kyanite jewellery.
SWOT Analysis

Strength
1. Pioneer in the silver jewellery business
2. Brand image
3. Unique design.
4. cheaper alternative in the luxury ornament market

Weakness
1. New company
2. New concept of business, people not used to it

Opportunity
1. Growing trend of silver jewellery
2. price of gold is too high

Threats
1. Possible copy cats entering the market
2. established competitors with decades of experience
 Market Segmentation

Jewellery has traditionally been worn by women. Hence, our target

market is women. Since we will be selling trendy and modern
ornaments, we will aim our products to women within the age of 20
and 40, with some variations. As we can see from the pie chart,
about 32% of the entire Bangladeshi population is within our age
and sex group. Ofcourse, it should be remembered that not all of
them are our potential customers yet. Our products wilbe primarily
aimed at urban women with a sizeable disposable income. However,
the 32% shows prospects as the country develops and more women
enter the middle or upper middle class of the society.

MarketSegmentation
Females of other
age group
20%

Target Segment
32%

Male
48%
 Industry and Market
Forecasts

The jewellery market of Bangladesh is worth more than Tk. 3000

crore. Gold has been the most used precious metal in this industry.
However, its demand has dropped from 45 tonnes to 12 tonnes in
the last five years. The main reason has been the price of gold,
which has increased three-folds from 10,614 per bhori to 29,000 per
bhori. This change in the scenario has sent people looking for
cheaper alternatives. Our company will provide one of these
alternatives, placing it an optimum time to enter the market. It is
known the that potential customers are not less eager to purchase
jewellery, its simply the very high price of gold that has stopped
them.

In this turbulent time, our company will be able to establish itself in

a rather short time. It is known, that the price of gold has decreased
somewhat very recently in the world market (approximately Tk.
2000 per bhori) but it is no way near the price that most customers
are used to. It can be assumed that the price of gold may fall further
in the future taking away some of our competitive advantage, but, it
is safe to say that the price of silver will remain lower than that of
gold, giving us sufficient edge over our competitors.

Products
We feature designer jewelleries that are designed exclusively for
those women who prefer to indulge themselves in contemporary
fashion. These jewelries are aesthetically designed with entrancing
designs that defines tradition, style and beauty of a woman.
The bangles, earrings, anklets, bracelets, chains, etc, are provided
with prudent craftsmanship. They are provided in different materials
and designed for an ultra-attraction. Necklace is a renowned fashion
accessory crafted with multicolor precious stones and beads to
exude the class and elegance. Beads of precious stones or
gemstones such as ruby, sapphire, emeralds are used in these
necklaces for greater elegance.

Gemstone Pendants and Necklaces

Unique silver jewellery - Most of our pendants are gemstones set in

sterling silver and are unique and unusual silver jewellery.

We are constantly updating our sterling silver pendant range. If

customers are looking for a specific colour pendant or type of
pendant necklace they can also place an order.

We have red pendants, orange pendants, yellow pendants, green

pendants, blue pendants, pink pendants, purple pendants, brown
pendants, black pendants, white pendants and 925 Silver Chains
(ALL PICTURES ARE NOT TO SCALE, MEASUREMENTS ARE
APPROXIMATE AND COLOURS AND PATTERNS MAY VARY SLIGHTLY
FROM PICTURES AS THE PENDANTS ARE MADE FROM NATURAL
STONES / MATERIALS)

Earring

Stud earrings, Hoop earrings, Dangle earrings

We have a wide range of earrings in all styles and materials. We
feature pierced earrings in popular styles such as chandeliers and
dangles, buttons styles and others.

For teenage girls/ children

Huggy earrings - Huggies are a popular style of earring where the
setting actually 'hugs' your earlobe. These can come in different
shapes and sizes, from hearts to rectangles. Many custom jewelers
make huggy earrings because of the many varieties of setting that
can be used to make a good template for their craft. Most times,
stones are channel set in huggy earrings.

Sterling Rings
(Silver Rings, Silver Toe Rings)
We have a wide selection of costume jewelry rings - both designer
marked and unmarked. Materials include rhinestone, cubic zirconia,
faux pearl, moonstone, sterling silver, 18K HGE, enamel, glass, onyx
and cameo. Markings include Avon, Sarah Coventry, 18K HGE,
Sterling Silver,

Bracelets and bangles

Ankle Bracelets, Bangles, Bracelets/Charm Bracelets
We have a wide range of costume jewelry bracelets, including
bangles, cuff bracelets, designer bracelets, link bracelets, charm
bracelets and other styles. Materials include glass, rhinestone,
enamel, pearl, cloisonne, goldtone, silvertone, sterling silver and
pearls.

Bridal Jewelry

Kyanite jewelry is perfect for wedding and bridal party. It fits so well
with the saying "Something old, something new, something
borrowed and something blue." It is also ideal for gifts. We also,
feature pearl items. So romantic and feminine. It is always
considered perfect for brides. Make your wedding special and one of
a kind with KYANITE jewelry.

Sets

We feature a wide range of demi parures and sets in all

combinations.We have a wide range of brooches and earrings sets,
necklaces and bracelet sets, bracelets and earring sets and other
popular combinations.

Other

All sizes and styles of your favorite brooches are found here. We
feature a nice variety of brooches, necklaces pins, nose pins and
jewelry boxes.

There is sure to be a style for all tastes and budgets

Category Varity within product category Price
range
Pendants Sterling silver pendants 300-1800

Stone embedded pendants 1000-

4000
Earring Chandeliers and dangles 1200-
3500
Button style &other
200-1000
Ring Sterling Silver ring 400-1500

Stone embedded silver rings 1000-

3000
Silver toe ring
200-600
Bracelets & Bracelet 1000-
bangles 3000
Stone embedded bangles
2000-
5500
Bridal Jewelry Gold plated jewelry 5000-
15000
Gemstone silver jewelry
5000-
25000
Sets 1000-
Brooches and earrings sets 1500

Necklaces and bracelet sets 1000-

2500
Bracelets and earring sets
1000-
2500
Other Brooches, necklaces pins, and 500-3000
jewelry boxes

Services
Besides providing our customers with the substantial products, we
will try to make their experience of buying from Kyanite Designer
Jewelry remarkable by rendering intangible benefits through the
following services:
 The Kyanite Designer Jewelry website(www.kyanite.com) will
have several new features that will add to the company's
competitive advantage in silver jewelry business. For e.g.,
"Design Your Own Ring", etc.
 Customization services like ‘gold plating’ will be provided
 Customers can place orders with designs of their own choice to
be delivered within a specified quantity of time
 Jewelry repair service will be given (if within 6 months of
purchase =free of cost)
 Fancy wrapping will be arranged in case of gift items
 The sales girl will assist to help the customers choose their
products. Appointments with Kyanite Designer Jewelry designers
will be arranged to help a customer determine the appropriate
styles for her personality in case of Bridal Jewelry.
 For frequent buyers, a membership card will be introduced which
will provide discounts, free gifts, etc. A database of popular
customers will be created which will be used to send direct mails
to them on special occasions or to inform them about new
products.

Size of business
We will rent a 450 square feet area shop at Bashundhara City
shopping mall for displaying and selling our product. We will also
rent a 2000 square feet office at Bailey Road where our designers
will work besides other official staff in order to carry out support
activities.
 Office Equipment and
Personnel
Office equipment
To increase the utility of our office, we will be requiring the following
items:
 6 tables and 15 chairs
 2 Apple Mac personal computers,2 desktop personal
computers
 Stationary items
 Lights and fans
 3 air coolers
 Broadband internet connection
 Color laser printer and scanner
 TNT phone and fax machine
 Sofa
To decorate our showroom, we will need the following items:
 Showcases to display the products.
 Lights
 Cashier machine
 Sofa
 Dummies to display the jewelry
 Mirror
 Salesgirl tools
 Silver weighing machine
 Personnel

We will be hiring the following workers for the successful running

and maintenance of our business:

Employees
8
Sl. Craftsmen
Position Number 5 Of
9 Designer 2
10 Driver Employees
1
1 Manager Total Employees 1
19
2 Accountant 1
3 Supervisor 1
4 Sales Women 3
5 Showroom Coordinator 1
6 Security Guard 2
7 Cleaner 2
 Manufacturing Process
The manufacturing process of a silver jewelry can be divided into 11
parts. These are mentioned below:

Design: Fine jewelry begins with a commitment to artistic and

functional design, blended with technical know-how and
experience. This will be done by a designer.

 Wax Carving: Designs will be hand carved by our skilled

craftspersons using an assortment of tools to sculpt the idea
from a solid block of
wax, the same way a
sculptor creates a
statue from a solid block
of stone.
Rubber Molding: The process of rubber molding and wax injection
method will be used to accurately reproduce a wax cast from the
original design.
Casting Preparation: Wax originals and injected waxes will be
sprued to a “trunk” to create larger “trees” in preparation for
lost–wax casting.

Then, finished wax trees in the flask will be surrounded under

vacuum with investment, a plaster-like material. Once solidified
around the waxes, the flask will be placed in a furnace and the
wax completely burned out, leaving an exact negative void of
the original waxes.
Casting: Here, the flasks will be removed from the furnace, they
are ready for casting. Silver and other non-ferrous metals are
melted and poured using traditional as well as high-tech
methods.

Inspection: Cast trees will be cleaned then carefully inspected for

completeness and overall quality. The individual items will then
be removed from the tree in preparation for final finishing.
Rough Finishing: Our talented craftsmen will perform numerous
hand operations while using files, grinding wheels, and other
specialized tools, will refine the details in the rough casting.

Assembly: Many cast jewelry items require further assembly of

parts, such as prongs, findings and two-tone components.
Accurate assembly is only possible by precise brazing using a
jeweler’s torch.
Setting: Here, using skill, patience and judgment, our people will
places silver and other gemstones into the design, where they
are held in place by prongs, beads, channels, bezels, and other
forms of setting.

Finishing: Combining expertise and experience, the jewelry finisher

reveals the color and luster of precious metal, transforming the
original design into a finished piece of fine jewelry.
 Physical Plant
The physical plant is actually going to be our workshop where we
will craft the jewelry from silver. It will be located in Tatibazar, Old
Dhaka. It will be a 15ft by 12ft shop where all the craftspersons will
be making the jewelries for us.
The workshop will have specified space and place for each of the 5
highly skilled craftspersons. There will also be a place for the
supervisor of the workshop. Then, there will be cabinets for keeping
the tools and equipments of each craftsperson. There will be 5 sets
of tools and equipments for each craftsperson.

The lay-out of the workshop is shown below in the image:

Machinery and Equipment

Since, we will make hand-produced jewelry, the level of automation
is low and hence there are no machineries. However, we will require
some 5 tables for each craftsperson and some tools and
equipments. The following equipments will be bought from The
CONTENTI Company from USA.

 Adhesives
 Anvils and Stakes

 Bench Pins
 Brushes
 Dispensing

 Drills

 Gauges
 Hammers
 Knives

 Pliers

 Ring Tools

 Safety Equipment

 Stone Setting

 Soldering

 Tweezers

 Tool Kits

 Shears

Suppliers of Raw Silver

Materials
We will mainly import the raw silver materials from various
companies. We will also buy in bulk from wholesalers selling Silver
in Bangladesh. The companies from which we will buy are:
 • Reema Jewellers

Wholesale Suppliers of Gold and Silver Jewellery Etc.

Address : Mokorrom Hossain Khan Market, Galapotti,, Bogra,

Rajshahi

Harn Interprise Co Ltd

Thailand

Manufacturer

Phrakanong Bangkok 10260

(02)331 9031 (01)923 1937

(662) 3319030

• Specialty Metals Smelters & Refiners, LLC

2490 Black Rock Turnpike
Fairfield, CT 06825
Phone: 800-208-2608 or 203-366-2500
Fax: 800-884-7966
Email: sales@specialtymetals.com

• Falcon Corp.
FALCON METALS & MINERALS, FALCON FUEL LTD. OY
MANNERHEIMINTIE 15 A B,
Helsinki - 00260, Uusimaa, Finland
Phone:358-207-289320
Fax:358-207-289329

 Reema Jewellers
Wholesale Suppliers of Gold and Silver Jewellery Etc.
Address : Mokorrom Hossain Khan Market, Galapotti,, Bogra,
Rajshahi
 Description of Company’s
operation

The Kyanite Jewellery is a company that will design its own

products, manufacture them and sell to the consumers. In other
words, the domestic supply chain will be owned and controlled by
the company completely. On the other hand, the export market will
be dealt with in a different manner, which will be discussed a bit
later.

The operational process starts with the design of the ornaments

being produced at the head office by the designated designers.
After approval, they are sent to the workshop for production. It
should be noted that extensive customer feedback will be taken in
the approval stage. Customers can rate all the designs in the retail
shop and, hence, giving us an accurate feedback of customer
choice. Apart from the projected demand, personalized orders will
also be taken, which may slightly vary from the standard designs.
All these orders are processed and manufactured at the workshop.
The head office has a storage area where the inventory is kept.
When the orders are due, the products are transported to the retail
shop for delivery to the customers.

For international sales, the process is a little different. We do not

have the resources to open retail shops internationally. Hence, a
website will be maintained as a point of interaction with our
international clientele. Any orders made will be processed in a
similar manner as before but they will be shipped through
international carriers. Due to the costs involved, we will only sell in
bulk to retailers internationally and not to individual customers.

Flow of Orders for Goods

Much of the operational steps have already been described in detail
in the previous section. To make it clearer, we have created these
simple illustrations. As you can see, two different approaches are
taken to domestic and international sales. There is good reason as
we cannot apply the same strategies due to various reasons that
have already been explained. The first flowchart shows the chain of
operation in the domestic market while the second one shows the
international business process.

Technology Utilization

Kyanite Jewellery is a designer Jewellery store. We use highly skilled

labors to manufacture our ornaments. More scientifically, it is a
labor intensive procedure with minimum use of capital equipment.
The only equipments that will be used the tools that are needed to
make the Jewellery by highly skilled craftsmen. This will be done to
add the value of “hand-made” products. Tools like knives, hammers
and gauges will be used. Over the years, the technology utilization
is also expected to be the same.
Marketing
Plan
 Pricing

At Kyanite Designer Jewelry, we are very committed to bringing high

quality silver jewelry to women and the prices will reflect a
reasonable rate since we are new market entrants. We will be
following the “Market Penetration” pricing strategy in order to allure
our target customers. This strategy will help us build a large
customer base by acquiring new customers and diverting other
customers towards buying our brand rather than the rivals’. Later,
once the brand image is established, we will go for significant mark-
up pricing in our home country. On the other hand, for the export
items, we will charge a premium price since the costs incurred in
selling overseas will be much higher. The overall price range of
items begin from Tk.200 and end at around Tk.25,000 at Kyanite
Designer Jewelry.

Distribution
Place: Our company office will be at Bailey Road. We will be
launching Kyanite Designer Jewelry with one exclusive showroom at
Bashundhara City shopping mall.
We will employ use of conventional distribution channel as well as
direct channel distribution for our product circulation. Direct channel
distribution system will be utilized at home country while
conventional distribution channel (through overseas intermediaries
like wholesalers and retailers) will be used for the export ventures
abroad.
 Promotion
Based on extensive research conducted on women's shopping
behaviors as well as Kyanite Designer Jewelry’s own research
among Dhaka women, the following marketing strategies will be
employed:

 Build awareness of brand and services to exemplify strong

store reputation.
 Provide customers with a sense of access to "inside
information" and exploit the power of a woman's personal
network by leveraging marketing collateral designed for
sharing and encouraging referrals.
 Utilize personal referrals/word of mouth to assemble a large
share of customers.
 The following promotional tactics for generating buzz and
awareness about Kyanite Designer Jewelry will be
implemented:
 Word of mouth via networks of customers
 Unique visual displays in storefront on a weekly basis
 Public Relations
 Direct mail such as postcard notices that are targeted
specifically to those customers who have purchased at least
once from the store
 Sales Promotion such as store events and bi-annual sales
 Kyanite Designer Jewelry web site (www.kyanite.com)
 Print advertisements (in newspapers, billboards, leaflets and
magazines)
  Television advertisements

Other important marketing strategies, such as developing strong
customer relationships (retention), will utilize a different mix of
marketing programs.

Marketing does not necessarily mean forms of advertising of

products, but fully utilizing all of the company's resources into
getting the customers to buy our products. In this case, we will
explore the three marketing strategies that are involved in e-
commerce marketing, including posting and positioning, and
traditional marketing, including advertising and the combination of
all to satisfy consumer needs as effectively and efficiently as
possible.

Control
We will try to follow our set-up plan in order to establish a silver
jewelry store with a high value brand equity. We will constantly
monitor our tracks and take corrective measures if any adverse
situation arises.
Form of ownership
Partnership Business

Identification of partners
• Minhaj Isa Hossain
• Nadia Kader
• Fahima Pervin
• Farzana Kashem
• Shamin Ahmed Khan
• Inamul Bari
• Istiaq Ahmed Nishar

Terms of Agreements

• 3 Years agreement
• Have vision to expand the business
• 60% of profit earned in a year will be reinvested till further
notice.
• Responsibilities will be specific and realistic
• Any kind of loss or profit will be distributed among the
partners according to their contribution for that particular loss
or profit.
• Partners should have good understanding between each
other.
• Any kind of unethical behavior will not be accepted.
• Confidentiality of the firm must be reserved.
• All the partners should sit for a meeting to discuss future plan
and recent threat for once in month.
• No products will be sold on account to the customers
 • Any of the director can not argue about the terms or
agreement given above
•

Authority of Principals

Directors

Manager Supplier

Jewellery Designer Product

DAT Department
A

Jewellery Designing
Supervisor
Department
PROCESS

Jewellery Site
Officer Employee
Accountant

Here, in the business the manager will have the check signing
authority. Sometimes it is important to finance something instantly
and in that situation, if manager do not have the authority to sign
the check it we might loose any chance to be benefited!
.

Management will be totally decentralized. And he can command

his/her substitute to have the best output. We are putting emphasis
on decentralized management system because if we maintain chain
of command on the organization then it would be time consuming
and in a sense decision making will be a lengthy process.

Backgrounds of the
Management Employees
Our management employees should be experienced and good
communicator. As our shop is about selling jewellery to the people,
so sales person should be good in communication with the
customers. The officers who will work on site should be experienced
as well. We need experienced person here because to manage the
shop is not an easy task and to have cost efficiency and to control
any unexpected situation, an experienced person is much better
choice. An experienced person does not mean that the employees
must be educated. Any one who has deal with such event for long
time can be eligible for the
 Roles and Responsibilities

Manager
The manager in the firm will deal with all official and related issues
of the business. All kinds of official affairs will be reported to the
manager. Moreover, manager will possess the authority. The two
managers have to take all the responsibilities.

Job description
After the seven owners he is the second most important and
powerful position in the shop. The main responsibility of this post is
to carry out the policies issued by the owners. He also oversees the
present ongoing situation in the shop so that everything goes
towards shop’s prosperity.

Duties & Responsibilities

o Coordination and control all department.
o Always need to oversee the present ongoing situation in the
shop
o Implements policies for the sound growth of shop.
o Maintain a sound environment in the factory through
monitoring the people
o Resolve any critical issues related to HR or day to day
operations

Jewellery Designer:
Reports to: - Manager
Job Description
The two designer proofs their creativity through their unique, extra
ordinary and exclusive designs. After the design are made they are
send designing department and then the manufacturing department
where the jewellery is created.

Accountant:
Reports to: - Manager
Job Description
Keeping record of the inventory, deal with the employees’ salary,
financial support, and other issues. The accountant will report to the
manager about the financial condition of the firm on a daily basis.
There is only one accountant who looks after all transactions.
Duties and responsibilities
• Preparing the financial statement for the organization on each
six months.
• Recording inventory items, whether going out or in and how
much is there on the store etc.
• Recording daily sales and income on daily basis.

Jewellery Site Officer:

These are the group of employee who will be posted on the event
what we will organize. Their duty will be managing the
manufacturing site, monitoring the assigned task and reporting the
information to the manager. The recruitment of these people will be
on contractual basis.

Product supervisor and sales man:

Reports to: - Manager
Product supervisor will be in charge of managing the employees
who will show the products to the customer. He will be a supervisor
as well as sales man, will get bit higher salary and will report
manager about the daily sales and which product are sold. There
are two sales people who deal with the customer.

Job description
Since our customers will be both male and female, and because of
our culture, there are many customers who normally do not feel
comfortable to talk with an opposite sex, so we will keep sales man
and woman both.
Duties & Responsibilities
o Sales the products
o Behave such a way with customers so that they feel
comfortable to buy our products.

Cleaner:
Reports to: - Manager
Job description
He/she will be responsible to keep the shop environment neat and
clean. There are two cleaner.

Duties & Responsibilities

o Clean and sweep the shop floor.
o Maintain a neat and clear environment in the shop
Clean the shop equipments

Driver:
Reports to: - Manager
Job description
Driver’s duty is to carry jewellery from the manufacturing
department to the shops and for the use of the employee to travel.
Security Guard:
Two security guards will be recruited on shifting basis on our shop.
Their salary will be decided according to the typical salary rate on
the market.
Reports to: - Manager
Job description
He has the job of keeping the security system of the shop and helps
the Factory Manager to keep the shop secured.
Duties & Responsibilities
o Handle any awkward situation.
o Ensure shop security.
o Examines doors, windows, and gates to determine that they
are secure.

Payment Policies
Salaries
All the employees except site officers will get monthly salary for
their regular job. Their salary plan will be decided by the normal
salary rate of Bangladesh. In addition, if any change on pay scale is
required it would be decided by the discussion between director
board and employees. Beside this, the employees will get a
proportion of sales revenue if there are good profits in any time.

Manager

Basic allowance 15,000

Travel allowance (10% of the 5,000
basic salary)
Mobile bill (5% of the basic salary) 1,000
Others
o Yearly holy day 15 days without government declared holy
day.
 Two bonuses per year

Jewellery Designer:

Basic allowance 30,000

Travel allowance (10% of the 12,000
basic salary)
Mobile bill (5% of the basic salary) 3,000

Sales men/women:

Basic allowance 8,000

Travel Allowance( 10% of the 800

basic salary)
Others
 Maternity Leave: This is one type of leave that is given to
the female workers (sales women) who are expecting. But this
leave is given to the female workers during the first two
months of pregnancy and the last two months. In the
meantime, they will have to continue with their work.
 Yearly holy day 15 days without government declared holy
day.
 Two bonuses per year

Security Guard:

Basic allowance 3,000

Others

 Yearly holy day 15 days without government declared holy

day.
 Two bonuses per year.
Assessme
nt of Risk
 Evaluation of Weaknesses

Kyanite Jewellery is an absolutely new company entering a rather

old industry. That itself is a weakness for the company. There are
certain aspects of looking into this point. One would be that there
are existing competitors who are more experienced and with more
resources and influences. They are better connected and have
goodwill, which is vital for any type of business. As opposed to that
Kyanite has virtually no effective goodwill. This makes the
marketing plan of the company vital to its success, especially in this
scenario. Furthermore, Kyanite has limited amount resources as
opposed to the competitors who have been earning profits for a long
time. This situation makes it compulsory for the company to use its
initial resources very efficiently.

Also, it should be remembered that this company is introducing a

relatively new concept in the Bangladeshi market, which is, designer
silver jewellery. It might take a little time for potential consumers to
accept this concept. Another problem with the introduction of
something new is the possibility of others copying the idea. When
the established brands see that silver jewellery is lucrative, they will
most probably introduce this product as well, creating effective
competition almost immediately. These weaknesses will remain with
starting of this company and the only thing that can be done is
making contingency plans to tackle these issues.
 New Technologies

Kyanite Jewellery is a designer jewellery firm that uses craftsmen to

produce its products. As a result, it uses minimal technology to
make its products. It does not have any plans on using modern
technology to produce them. However, there is a chance that other
companies may use more advanced technology. But it should be
noted that currently most jewellery makers use relatively primitive
methods to manufacture their products. We have seen that
companies like OTOBI changed the furniture industry by introducing
assembly lines. There is a real threat that it may be repeated in our
industry. However, Kyanite will not change its method since it aims
to gain its competitive edge with the tag ‘hand-made’.

Contingency Plan

There is no guarantee that our proposed business will work out

properly. Hence, we have made a contingency business plan to use
most of our assets in a slightly different venture. We intend to use
the store in Bashundhara City shopping mall to open a gift shop. It
will carry miscellaneous products ranging from greeting cards to
stuffed animals, photograph frames etc. We will also have a section
of jewellery where our silver ornaments will be sold. This will allow
us to prevent the disposal of fixed assets related to the manufacture
of silver ornaments. Having a wide range of products will allow us to
slowly focus on the products that sell best.
Financial
Plan
 Assumptions

 Since we have many different types of designs which and all

has different costs, therefore we are assuming that on
average, the cost per unit would be Tk4750 which is deduced
below:

Silver Per Bhori (11.66 grams) – Tk450

Stone Per Unit Tk3,500

Wages Per Unit Tk800

Cost Per Unit Tk4,750

 We will set the price by adding 70% Mark-Up on the Cost

Per Unit, which means that the result per unit (according to
this cost) will be Tk8,075, having a contribution margin of
Tk3,325.
 Net Sales in the first year will be 50% of the third year and
Net Sales in the second year will be 75% of the third year.
 Interest Rate on Loan will be 15%.
 Depreciation will be 10%, calculated by the Straight Line
Method.
 Tax Rate on the taxable income will be 10% flat.
  The company will maintain its inventory in such a way that it
will always have an inventory level of 800 Bhori (9328 gm) of
silver and 215 Stones and this total costs around
Tk1,000,000.

Pro forma Income Statement

Items 1st Year 2nd Year 3rd Year

Tk Tk Tk Tk Tk Tk Tk Tk Tk

Net Sales 10,369,3 15,554,0 20,738,78

93 90 6
Less: Cost Of 6,099,64 9,149,46 12,198,00
Goods Sold 3 5 0
Gross Profit 4,269,75 6,404,62 8,540,786
0 5
Less:
Operation
Expenses:
Salaries 131,00 131,00 131,00
0 0 0
Rent 900,00 900,00 900,00
0 0 0
Stationary 60,000 60,000 60,000
Depreciation 290,00 290,00 290,00
0 0 0
Insurance 15,000 15,000 15,000
Premium
Miscellaneous 200,00 200,00 200,00
0 0 0
1,596,50 1,596,50 1,596,500
0 0
EBIT 2,673,25 4,808,12 6,944,286
0 5
Less: Interest 1,050,00 1,050,00 1,050,000
Expense 0 0
EBT 1,623,25 3,758,12 5,894,286
0 5
Tax 162,325 375,813 589,429
Net Income 1,461,42 3,382,81 5,305,357
5 2

Cash Flow Projections

Items 1st Year 2nd Year 3rd Year
Tk Tk Tk Tk Tk Tk Tk Tk Tk
Equity 14,000,0 19,851,4 23,524,23
(Cash) 00 25 7
Add: 7,000,00
Bank Loan 0
Starting 21,000,0
Cash 00
Less: 2,900,00
Capital 0
Expenditur
e
18,100,0
00
Less: 1,000,00 1,000,00 1,000,000
Inventory 0 0
Less: 7,000,000
Loan
Repayment
Add: 1,461,42 3,382,81 5,305,357
Net Income 5 2
Add: 290,000 290,000 290,000
Depreciatio
n
NET CASH 18,851,4 22,524,2 21,119,59
FLOW 25 37 4
 Pro Forma Balance Sheet
Items 1st Year 2nd Year 3rd Year
Tk Tk Tk Tk Tk Tk Tk Tk Tk
Fixed 2,900,00 2,900,00 2,900,00
Assets: 0 0 0
Less: 290,000 2,610,00 580,000 2,320,00 870,000 2,030,000
Depreciatio 0 0
n
Current 19,851,42 23,524,23 22,119,59
Assets 5 7 4
Less: - - -
Current
Liabilities
Working 19,851,4 23,524,2 22,119,59
Capital 25 37 4
Net Assets 2246142 25,844,2 24149594
5 37
Financed
By:
Equity 14,000,00 14,000,00 14,000,00
0 0 0
Bank loan 7,000,000 7,000,000
Net Profit 1,461,425 2246142 3,382,812 25,844,2 5,305,357 24149594
5 37

Break-Even Analysis
Break even in terms of Sales Unit = 2,846,500 x 3 / 3,325
= 2,568 Units
Break even in terms of Sales Revenue = Tk
2,568 x 8,075
=
Tk20,738,786