business plan herbal

8/3/2019 Business Plan Herbal

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EXPERT

(Organic Anti-aging Health Guard)

Business Plan

MBA (Reg) 4th SEMESTER

2010

DEPARTMENT OF BUSINESS MANAGEMENT SCIENCES

UNIVERSITY OF AGRICULTURE FAISALABAD

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ACKNOWLEDGEMENT

I pay my thanks to Almighty Allah the Most Merciful and Most Beneficent, who is

the entire source of knowledge and wisdom. The creator of this universe who gave

birth to human who gave us knowledge to explore the world that enables us to

complete our project successfully. The words are bound. Knowledge is limited and

time is short to express His dignity. He gives us the opportunity to get the knowledge

and we are not able for this. It is one of infinite blessings of Allah that he bestowed us

with the potential and ability to contribution towards the deep ocean of knowledge

already existing.

We also offer thank from the deeper core our heart to the Holy prophet HazratMuhammad (PBUH) who is forever a torch of guidance and knowledge for humanity

as a whole.

And now we would like to express our heartiest and sincerest words of thanks

to my worthy teacher Mr. Muzzamil Waheed Kamboh for their skillful guidance un

failing patience, inspiring attitude and invaluable suggestion to improve the script of

this report.

At the end it is necessary to pay thanks to our parents for that without their prayers.

We could not make all this possible.

Finally we cannot work without the help of the our department of business

management sciences, University of Agriculture Faisalabad.

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This Business Plan has been submitted in the partial fulfillment of MBA degree

requirement.

SUBMITTED TO,

SIR MUZZAMIL WAHEED

SUBMITTED BY,

NAMES Reg. #

Jamal Rasheed 2009-ag-95

Sohail Tariq 2009-ag-182Mujtaba Subhani 2007-ag-462

Umar Farooq 2009-ag-225

Hafeez Ullah Khan 2009-ag-207

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DEDICATION

This effort by me is dedicated to my beloved Parents who have done

much for me, what I do not even deserve. May God provide me the

opportunity to serve them as much as possible And also dedicated to my

Teachers who always guide me and give the chance to explore my vision

in practical life.

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TABLE OF CONTENTS

SR

#

CONTENTS PAGE #

1 Executive Summary 7

2 Vision, Mission, Statement and Objectives 8

3 Situation Analysis 9

4 Pest Analysis 10

5 Operational Flow Chart 12

6 Marketing Plan 13

6.1 Market Segmentation 14

6.2 Marketing Mix 156.3 Product, Price, Place, Promotion 16-26

7 Organizational Plan 28

7.1 Human Resource Plan 29

7.2 Organo-gram 29

7.3 Job Descriptions 30-32

8 Financial Plan 33

8.1 Start up Summary 34-35

8.2 Break even Analysis 36

8.3 Profit and Lose Statement 37

8.4 Balance Sheet 388.5 Monthly projected sale 40

EXECUTIVE SUMMARY

The Sewil is established at University of Agriculture Faisalabad. The product

which we provide to market is Natural form with the brand name because it is an

innovative idea and there is no competitor in the market. So we are the first to availthe opportunity.

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It is a partnership-oriented firm in which eight partners are involved. The total capital

is required to start the business is 12 million out of which 7 million is contributed by

the partners and the rest of capital is taken as a loan from a bank at 13%, Payable in

five years in equal installments.

Our future planning is to export our product to foreign countries. We are alsoplanning after ten years to make unrelated diversification. Out profits goes on

increasing ever year so we make best use of these cash flows to expand our product

line.

Our marketing goals are harmony with organization goals, customer satisfaction with

Natural products and be a innovative in market. We have segmented our market on

two basis; customer base and business base segmentation. In customer base

segmentation we used the segmentation tools like demographic, geographic,

psychographics, behavioristic. In business base segmentation we select the fast food

industry because they use Mushroom in their foods.

Our target customers are all demographics. Our positioning is to provide high quality,

hygienic product maintaining its features to our customers. In marketing mix we have

used the differentiation strategy.

We will pack our product in Syrups. As our focusing on high quality so we adopt the

premium strategy, which is high quality and high price.

We will use zero level and one level Distribution channel to promote our product we

will use both pull and push strategy. We will spend Rs.20000 to create awareness

about our product and to be successful in market.

VISION STATEMENT

Our aim to be the market leaders of Natural Industry of the Nation

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MISION STATEMENT

SEWILS mission is to provide high quality Antioxidant natural products, focused on

providing effective herbs, In do so SEWIL will meet customer expectation in terms of

leading technology, individual and company accountability, opportunity and growthof our employees and society.

Objectives:

The objectives for SEWIL LABORATRIES OF PAKISTAN are as follows:

Achieve sales goal of Rs.120,000/- during first year of operation.

Achieve a regular customer base of 10 companies.

Increase sales by 30% during the second year of operation.

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SITUATIONAL ANALYSIS

Strengths

First one to initiate this venture

Production cost is very low

Chance of becoming market leader

No Intermediary Available

No Direct Competitor

Strong Liaison with our loyal customers

Weakness:

Small Target Market

No Heavy Investment

Lack of Industry Information

Business Expansion

Opportunities:

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No Strong Competitors Environment.

Growing consumer concern regarding the manufacturing natural products.

Increased segmentation.

Threats:

Substitutes availability.

New Entrant.

No awareness for anti oxidant in our community.

PEST Analysis:

Political:

Political factors consist of laws, Govt. agencies and pressure groups, which

influence limit the company in competitive market. Company adopts all these

policies, which are according to law and trying to serve our customer in a better way.

Tax policies.

Environmental regulations.

Trade restrictions and tariffs.

Political stability.

Licensing issues.

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Economical:

As economic condition of people improves then they become more conscious

about their health. We can say that economy as such has no significant influence on

our business but the study of economy can help us in forecasting.

Social-o-culture

Culture is an important factor in understanding an industry, because for any

organization to operate effectively it must for some extent have a general set of

believe and assumptions on how culture will influence the productivity and the

success or failure of any company Social segment has major influence on our business

due to emerging health care trend. People are very much conscious about their health.

Technological:

The complexities of achieving business success through increased efficiency,

effectiveness and competitiveness, combined with innovative applications of modern

technology, has heightened the awareness of both Technology and business managers

towards more strategically oriented approaches for planning and management of any

industry. We have to develop effective R&D department for improvement of our

organization

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Honey,

Vinegar

Ginger

, Garlic

Lemon

PROCUREMEN

T(Collection of

Items)

PACKAGING

Production

processExtraction ofherbs

We get extracts

from the herbs

products

Sales

(Through

distribution

channel) Feed

BackResponse Center

Receives feedback

from customers

Syrups

Boxes,

cartons,

It Provides Physical

Protection & Labels AreAct As Information

transmission.

Operational Flow Chart

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Marketing Plan

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Marketing Plan:

Marketing goals:

Harmony with organizational goal

Market share up to 30% in next 5 years

Our first and foremost objective is to manage and integrate all the marketing

activities in our venture.

To get market share and enhance organizational revenue.

We want to enhance our business so that it prevail all over the country not

only Faisalabad.

To make our business image and reputation glow in the mind of our target

market as we are new and only in the market.

To create awareness among those who are unaware of our quality of various

kinds of services and products.

We want to get success in our business.

Market Segmentation:

Demographic:

The characteristics of human populations for purposes of social studies

Age: 10-45

Gender: male and female

Family size: 2 to more

Family life cycle: single and married

Income level: Rs. 10000 and above

Occupation: any kind of occupation

Education: educated and uneducated

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Geographic:

Geographic segmentation is about dividing the market into various

geographical units in relation of our customer.

Region: All areas of Faisalabad, Chiniot, Jaranwala, Samundari

and rural areas.

City: Faisalabad

Density: Mostly customer located in Faisalabad

Psychographics

Psychographic segment has demonstrated its use as a practical in

consumer market. Our target customers are health conscious, opinion leaders,

extroverts, opinion leader, and status conscious and early adopter.

Behavioral:

Our customer will be Moderate users of the Antioxidant.

MARKETING MIX:

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Product:

The product, service, or program includes both tangible and intangible

elements. The tangible, of course, are those things that the customer can see, touch,

feel, taste, or smell. The intangible include such things as the image of the offering ...

which includes the image of the organization making the offering, the psychological

aspects of pricing (high price to many customers is equated with high quality - and

vice versa). Product decisions include aspects such as function, appearance,

packaging, service, warranty labeling, etc.

Packaging:

Packaging can be defined as the activities of designing and producing the

whole packaging of your product. It is a means by which you communicate your

positioning statement and product information to the consumer. Many marketing

experts consider packaging to be the fifth P in the product mix of product, price,

place, and promotion. Packaging is your silent salesperson, make it clear, concise,and appealing.

Labeling:

Labels must convey the necessary information and remain visually pleasing.

Labels must be accurate. They should not mislead the customers or fail to include

pertinent information.

Distribution Strategy:

We will use one level distribution strategy.

Manufacturer_______________ Retailer ______________ consumer

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Promotion Strategy:

To sell our offering are we will effectively promote and advertise it. There are two

basic promotion strategies, PUSH and PULL.

BY PUSH STRATEGY: well be able to maximize the use of all available

channels of distribution to "push" the offering into the marketplace. For this we

require providing generous discounts to achieve the objective of giving the

channels incentive to promote the offering, thus minimizing our need for

advertising.

BY PULL STRATEGY: well have direct interface with the end user of the

offering. We are minimizing the use of channels of distribution during the first

stages of promotion and a major commitment to advertising is required. The

objective is to "pull" the prospects into the various channel outlets creating a

demand the channels cannot ignore.

Price:

In initial stages of marketing entrance we will adopt skimming strategy to

maximize our profit margins. As we are offering innovative organic product, which

currently doesnt hold any competitors in this current industry. We hold the existence

on account of expandable and flexible organization that keeps on innovating the

industry with natural advantageous edible products.

Our offering has enough differentiation to justify a high price and desire for quick

cash and have minimal desires for significant market penetration and control, and then

set your prices high. Such pricing strategy which refers to skimming pricing strategy

helps to generate market value with brand recognition of quality oriented products and

an organization with virtues of high quality services and delivery

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ORGANIZATIONAL

PLAN:18


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Human Resource Plan:

Organo-grame

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Employees of the organization:

o CEO

o Vice President

o 1 Finance manager

VICE

PRESIDENT

PRODUCTION

& QUALITY

MANAGER

HR

MANAGER

MARKETIIN

GMANAGER

MANAGER

SALES

Clerical staff-

ACCOUNTANTS,

TYPIST, CLERKS

& ASSISTANTS

R&D

MANAGER

CHIEF

EXECUTIVE

OFFICER

FINANCE

MANAGER

IT

MANAGER

Non-Clerical staff:

GURADS,

MESSENGERS

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o 1 HR manager

o 1 Sales manager

o 1 Marketing manager

o 1 R&D Manager

o 1 Production & Quality Manager

o 1 IT Manager

o 5 Salesmen

o 1 Cost Accountant

o 2 Drivers

o 2 Guards

o 2 Sweepers

o 12 Labors

o 2 Peon

Total Employees= 35

Job Description:-

C.E.O:

MR. Hafeez ullha khan will have the higher authority.

Education:-

M.B.A from University of Agriculture, Faisalabad

Salary:-

As every partner gets

Duties:-

To deal with all kinds of issue

strong connection between the employees of a company and its

board of directors

Use their management team as advisers and to assist in planning

the company's future. It's up to the CEO is make final decisions on

the company and how to keep it profitable

Create an efficient, positive environment for all employees

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Set a budget for the company and investment planning

G.M:-

Mr. Jamal Rashid will have the authority of G.MEducation:-

M.B.A from University of Agriculture, Faisalabad

Salary:-


Duties:

Develop an annual operating budget

Develop the strategic vision for the Companys Establish the technology platform and tools required for

Employees

Marketing Manager:

Mr. Sohail Tariq will be the manager of Marketing

Education:

M.B.A (Marketing) From University of Agriculture, Faisalabad

Salary:


Duties:

Responsible for planning and executing marketing initiatives

Build awareness and drive business growth

Working with other sales, marketing and business development

Share knowledge of competitors and their offerings and use it to

develop targeted marketing plans and communications.

C.F.O:

Mr. Faisla Shakor will be working as CFO

Education:

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M.B.A (finance) From University of Agriculture, Faisalabad

Salary:


Duties:-

Prepares financial reports and presents findings and

recommendations to senior management as requested.

Protects the company's interest in relation to expenditure of

restricted funds,

Prepares and/or reviews the annual tax reports and government

Maintains appropriate licensure for pet care center as needed

H.R.M:-

Mr. Mujtaba Subhani will lead the H.R department of Pet care

Education:

M.B.A (H.R.M) From University of Agriculture, Faisalabad

Salary:


Duties:-

o Work with all employees issues such as progressive discipline, leaves

of absence

o Recruiting

o Training

o Compensation

o Benefits

I.T MANGER

Mr. Rana Waqas Ahmed will lead the I.T department.

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Education:

M.B.A (IT) From University ofAgriculture, Faisalabad

Salary

As every par

Duties:-

Maintain I.T structure

Preparing reports

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Financial Plan

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Start-up Summary:

The start-up expense for the SEWIL LABORATRIES OF PAKISTAN is

focused primarily on production of Herbal products All share holders will invest

Rs.1,200, 000. In addition, they will get Rs.300, 000 as loan.

Start-up Requirements

Start-up Expenses

Preliminary Expenses Rs.41,600

Start-up Assets

Cash Required Rs.148,400

Start-up Inventory Rs.610,000

Other Current Assets Rs.50,000

Long-term Assets Rs.650,000

Total Assets Rs.1500,000

Total Requirements Rs.1500,000

.

Break-Even Analysis

Break Even Sales = [Fixed Cost / 1 (Variable Cost / Sales)]

Break Even Point = [741,600 / 1 (50 / 100)]

= 741,600 / 1 0.2

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= 741,600 / 0.8

= Rs: 927,000

Profit & Loss Statement

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales Rs.1,200,000 Rs.1,500,000 Rs.2,000,000

Direct Cost of Production &

Sales600,000 750,000 900,000

Total Cost of Sales 600,000 750,000 900,000

Gross Profit 600,000 750,000 1,100,000

Gross Margin % 50.00% 50.00% 55.00%

Expenses

Selling & Distribution

Expenses270,000 344,050 503,550

Others 6,500 8,800 10,100

Total Operating Expenses 276,500 352,850 513,650

Profit Before Interest and

Taxes323,500 397,150 586,350

Interest Expense 14,000 12,050 13,100

Taxes Incurred 9,500 10,100 Rs.13,250

Net Profit 300,000 375,000 560,000

Net Profit/Sales 25% 25% 28%

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Balance Sheet

Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash 148,400 200,300 225,025

Accounts Receivable 355,000 465,000 540,000

Inventory 541,600 302,200 188,525

Other Current Assets 5,000 7,500 7,900

Total Current Assets 1,050,000 975,000 961,450

Total Long-term Assets 750,000 750,000 820,000

Total Assets 1,800,000 1,725,000 1,781,450

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities - 30,000 45,100

Long-term Liabilities 300,000 320,000 350,000

Total Liabilities 300,000 350,000 395,100

Paid-in Capital 1,200,000 1,200,000 1,200,000

Retained Earnings 300,000 175,000 186,350

Capital 1,200,000 1,375,000 1,386,350

Total Liabilities & Capital 1,800,000 1,725,000 1,781,450

Dividends

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In first year, dividend will not be paid and all the profits will be

reinvested.

In preceding year, dividend of Rs: 25,000 to each partner will be paid.

Total of Rs: 400,000 dividend will be paid at the end of third year ofoperations.

Cash Flow Statement

Cash Flow StatementFor the year Ended_________.

Cash Receipts year 1 year 2 year 3Sales Rs.1,200,000 Rs.1,500,000 Rs.2,000,000

Loans Rs.300,000 Rs.320,000 Rs.350,000

Investments - - -

Total Receipts Rs.1,500,000 Rs.1,820,000 Rs.2,350,000

Disbursements

Salaries Rs.180,000 Rs. 188,000 Rs. 205,000

Advertising Rs. 50,000 Rs. 55,000 Rs. 62,000

Insurance Rs. 13,000 Rs. 15,000 Rs. 21,000

Other Rs. 6,000 Rs. 6,200 Rs, 6,550

Total Disbursements Rs. 249,000 Rs. 320,000 Rs. 294,550

Net Receipts (Disbursements)Rs.

1,251,000

Rs.

1,500,000

Rs.

2,055,450

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