Business Plan Report

SUBMITTED TO:
Respectable Mr. Akhtar Abbass
SUBMITTED BY:
Iftikhar Virk 28S-635
Syed Tariq Hussain Shah 29S-632

E-MAIL : Iftikhar.search@gmail.com
CELL # : 0322-4469323
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O Allah!

Open . . .

Our Eyes to see what is dutiful,

Our minds to know what is true,

Our heart to know what is good.

My Effort

To words practical life,

Is dedicated to

My loving PARENTS,

All my Family member,

My TEACHERS,

And

All my Friends.

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Acknowledgement

Appreciation goes to those who have contributed in making of this Project.

These acknowledgements have a great importance for us. We know better
than any one that our parents, our teachers and class fellows made this report
possible.

Our instructor “Mr. Akhtar Abbass” being gracious by nature has always
been good and helpful to every student. His able-guidance and didactic
efforts always stand us in good stead.
We acknowledge the debt of gratitude from the citadel of our heart, because
without his valuable guidance and instruction our present academic pursuit
might not have been of much value.

We are, and shall remain extremely beholden to him for all the time to come

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Contents Page

Executive Summary

Objective 5

Mission Statement 6

Vision Statement 6

Goal 6

Strategy 6

Planning 7

SWOT Analysis 7

Project profile 8

Industrial Analysis 9

Physical resources 13

Project Costs 14

Annual Income report 15

Monthly expense Report 16

Organizational chart 18

Conclusion 19

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Executive Summary
The project is about preparation of mineral water or manufacturing
of healthy and fruitful water for public. This project tells us that
how we can start new venture the project objectives the venture
mission, vision, financial resources, SWOT analysis etc all will
come in under consideration. Most importantly what would be
project cost and what would be the preliminary expenses to start
new venture. What strategies and planning’s would be adopted to
make the business more profitable all will be discussed, how much
expenses occurred all the specific financial statements will be
presents. The organizational structure will be show, and what type
of tangible assets is required to start this venture.

Business Legal Status

During our study we got to know that manufacturing of
mineral water can be started as a sole proprietorship or a
partnership and even it can be registered under company law with
Securities and Exchange Commission of Pakistan (SECP).

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The objective of this project is primarily to put into practice what we have
learnt from the classroom lectures. The project forms the basis of an
important investment decision. In order to serve this objective, this study
covers various aspects of project concept development, start-up, marketing,
finance and business management. The study briefly discusses government
policies and international scenario, which have some bearing on the project.
The business we choose is a manufacturing of mineral water. We are a
Pakistan-based manufacturer that produces quality drinking water by the
brand name “ABSHAR”.

What is Mineral Water?

• Is not subjected to any chemical treatment.
• Is obtained directly from natural or drilled sources from underground
water.
• Is collected under conditions which guarantee the original natural
bacteriological purity.
• Is bottled at the point of emergence of the source with particular hygienic
precautions.

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“To be the benchmark for prestige, natural spring water in the

region helping to promote mineral water as the highest-quality,

and purest, in Pakistan”.

“To provide the highest quality and most natural water in the
region in a way that is cost-effective and convenient”.

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To become a best
manufacturer among the top
tenth at least in 5 years by the
help of providing best mineral
water to the end user.

Goal
STRATEGY

1. The qualitative and quantitative

point of view.
2. Get the best mineral water
manufacturer of the city.
3. Provide best and timely supply to
our end user.
4. Maximum coverage in an ethical
way.
5. Win to win situation for both(for
our and our customer)
6. Provide best facilities to
employees for their future

PLANNING
1. Office should be on center of the city(gulberg).

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2. Hire vehicles for distribution.

3. Provide quality products to compete our
competitors.

SWOT Analysis:
• Internal analysis
• External analysis
Internal analysis:
Strengths:
 100% balanced mineral water.
 A highly ethical environment.
 Sophisticated and trained staff.
Weakness:
 Distribution
 Market Price-Takers
 Customer Feedback
 Goodwill
 Strict competition in market.
External analysis:
Opportunities:

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• offering discounted rates

• Targeting under developed areas to increase volume.
• Clean water moving towards the need of today’s pollutant
environment.
• Have great demand.
Threats:
• Threat of new entrants.
• Discounted rates offer by competitors.
• Government Legislations on environmental Issues

PROJECT PROFILE

Opportunity Rationale
Lahore is a very populous city. Pakistan’s population has soared up to
149.50 Million (according to government sources), and at least one-third of
it is living below the poverty level. Majority of people have no access to
clean water to drink or proper sanitation facilities. These posses’ serious
threats to health of masses. Moreover the variable and harsh climate of
Pakistan causes major viral diseases through out the year. This creates a
great demand for clean water in Lahore. Due to these factors, a big
investment opportunity exists in this sector. Therefore we decided to start
with something which has increasing demand of clean water.

Products offered
 The product range we would like to offer
600 ml bottles (24 bottles per carton)
 1.5 liter bottles (12 bottles per carton)
 6 liter bottles with carrying handle (4 bottles per carton)
 20 liter bottle with stand

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Project Investment
The total cost of the project is Rs. 10 millions (one crore).

Project Location
The location will be Lahore gulberg area.

Key Success Factors

Some of the Key Success factors that will determine the success of this project include:
 Availability of regular supplies.
 A well trained technical staff.
 Availability of complete product range.
 Reasonable and competitive prices.(may be discounted rates)

INDUSTRY ANALYSIS

Sector Characteristics
The review of Pakistani Mineral water market shows that there are around 150
companies, which are registered with the Ministry of Health. Out of some 100
manufacturing units operating in the country include 10 multinational.
Multinational mineral water companies have played a vital role to provide the base for
the growth of the mineral water industry since the emergence of Pakistan. They have
been enjoying the bulk of the business and are still enjoying after so many years, though
their collective market share has dropped significantly.

Sub sector Information

The mineral water industry has experienced major growth in recent years. As per
an estimate this industry is growing at 18 % annually. The Pakistan’s harsh climate
provides more favorable business opportunities in this business.

Target customers
The Mineral Water industry is growing in Pakistan day by day.
Restaurants
Educational Institutions
Hospitals
Financial Institutions
Home Delivery (specific areas only)

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MAJOR COMPETITORS
 Nestle
 Aquafina
 Sufi
 Aqua Safe
 Gourmet

What is the competition in the

selected field?

 Competition in quality of product.

 Competition in supply.
 Competition in price.

Product
 100 % Pure Mineral Water
 Health Nutrient by Excellence
 Made on up-to-date technology
 To Maintain optimal levels of Hydration during exercise
Price
 Relatively lower prices than competitors
 Prices according to segments (Income)

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 Price schemes and patterns:

 according to competitor price changes

Placement
 Product Distribution through distributors
 Efficient mode for the promotion of the product

Factory Agents Retailers

Whole sellers Retailers

They are trying to promote their product through

 Paper
 Billboards
Paper Advertising:
We will advertise in the newspapers on Sundays. The newspapers
used are
 Nation
 News
 Dawn
 Jang

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Why client will buy products from you and not from your competitors?

The client will buy product from us not from our competitors because we
provide following facilities;
1. We work in ethical way.
2. Timely supply and daily booking.
3. Give one week credit facility on cheque to our valuable customer.
4. Provide cheque facility on full payment.
5. Return leakage.

PHYSICAL RESOURCES
LAND & BUILDING REQUIREMENT

Land Requirement
Approximately 3000 sq/ft. will be required for installing and erecting a water
plant. It is recommended that the land should be fully possessed. And the

Rs.
Cost of land 1,000,000
Cost of building 1,500,000.
Equipment
Details of Office Equipment

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Rs.
Furniture and fixture 2,00,000
Miscellaneous tools & equipments 3,00,000

Vehicles
Bought 5 vehicles (pick up Suzuki) and following is the detail expense of per vehicle;

Monthly Annually
Rs.
Cost per vehicle (300,000*5) --- Rs.1500000

Running & maintenance Rs. 80000 960,000

Utilities requirement
• Electricity
• Telephone

PROJECT COSTS
The breakdown of total project cost is in the table below:
Project Costs Rs.
Land & building 25, 00,000
Cost of vehicles 15, 00,000
Raw material (empty bottles) 300,000
Plant & machinery 1,500,000
Office Equipment 5, 00,000
Preliminary Expenses 50,000
Total Cost 6,350,000

FINANCIAL RESOURCES
Project Costs Rs.

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Plant & machinery 1,500,000

Land & building 2,500,000
Vehicles 1,500,000
Furniture & Fixture 200,000
Miscellaneous equipments 300,000
Raw material (empty bottles) 300,000
Marketing expenses 500,000
Advertisement expenses 500,000
Debts ------
73, 00,000
Preliminary Expenses 50,000

Total Project Cost 7,350,000

Cash at bank 26,50,000
Total 10,000,000

HUMAN RESOURCE
Human resource requirement for the proposed project is as under:
Positions Number Salary/month Annual salary
Rs. Rs
Administrative staff:
General Manager 1 40,000 40,000
Other Managers 4 20,000 9,60,000
Assistants & others 10 8,000 9,60,000
Technical staff 10 8,000 9,60,000
Other subordinates 4 5,000 240,000

Grand Total: 3,160,000

ABSHAR ENTERPRISES
Work sheet for estimated Annual income,
Expenses & profit (loss)

Units sold (liters)

8,00,000 9,00,000 10,00,000

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(000)
Rs. Rs. Rs. Rs. Rs. Rs.

Income 11200 12600 14000

Sales income (Rs. 14/ liter)
Cost of goods sold:
Production cost (Rs.4.5/ liter) 3600 4050 4500
Carriage 50 60 70
Depreciation 150 150 150
Total production expenses 3800 4260 4720
Gross profit 7400 8340 9280
Other operating expenses:
Salaries 3160 3160 3160
Telephone 300 360 380
Insurance 40 45 50
Office expenses 50 55 60
Sales promotion 400 450 500
Travel 50 60 70
Taxes and licenses 80 90 100
Miscellaneous
Total operating expenses 4080 4220 4320
Net profit 3320 4120 4960

ABSHAR ENTERPRISES
Estimated Monthly Expenses & Starting Costs
July 1st, 2008

Estimated Monthly Expenses

(1) (2)
Based on sales How much

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Cash
of Rs.8,00,000 needed to start
Item per year business

Rs. Rs.
Salary of managers 60000 120000
All other salaries and wages 21000 63000
Rent - -
Travel 4000 12000
Advertising 40000 40000
Delivery expenses 30000 90000
Supplies 80000 240000
Recurring inventory
and purchases - -
Telephone 10000 30000
Other utilities 25000 50000
Insurance 4000 8000
Taxes 5000 10000
Interest - -
Running and Maintenance 80000 160000
Legal and other professional
fees - -
Miscellaneous 10000 30000

Starting Cost Have to pay only Once

Rs.
Fixture and equipment:
Telephone, Rs.5000;
Computer,Rs.60000 65000
Decorating and remodeling 30000

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Installation of fixtures and equipment 15000

Starting inventory 100000
Legal and other professional fees -
License and permits 10000
Advertising and promotion for opening (Part of Advertising above)
Accounts receivable -
Cash 500000
Other 50000

Total estimated cash you need to start with 1,623,000

Organizational Chart

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CEO

General Manager

Marketing Production Store

HR Manager
Manager Manager Manager

Assistant Assistant Assistant

Supervisor
Manager Manager Manager

Technical
Subordinate Subordinate
Engineer
Juniors

Plant & Other technical

Machinery staff
Operator

Juniors

A Last Word

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Finally, it can be concluded that ABSHAR ENTERPRISES will be a profitable project,

because in this era of education people knows importance of clean water which avoids
hundreds of diseases. The sale of mineral water has
registered on average 200 percent annual growth in the
past five years in Pakistan, where the middle class is
also in a rush to join the corporate style of living which
still provides 60 percent revenue to water selling
companies and encourages them to maximize
commercialization of drinking water. The business is
growing in big cities like Lahore, Karachi, Islamabad,
and Peshawar.

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