the business plan-101

8/2/2019 The Business Plan-101

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Report on

The Business Plan

Prepared For:

Business Plan Competition

Prepared By:

Angelic Mind

Batch: 101

(Bachelor of Business Administration)

Submission Date:

20thFebruary, 2012.


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Business Plan Concept

Easy Recycling Process of Paper

(Re-Writeable Paper, Erasable Ink Pen, Easy Spray)

For Business Plan Competition

Primeasia University


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Index


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Executive Summary

A. Business Idea:Our business plan is a process to convert used paper to the new, re-

writeable paper. The process is known as easy recycling process.

B. Implementation Plan:In the initial stage, we will start with the establishment of

small/medium scale firm with support of Government in order to sustain in

case of initial losses. Well try to capture the market by different means of

marketing (Electronic, Print, Radio, TV etc). When our product captures

target proportion of market, well then

plan for the extension of the firm, either by expanding the plant size in the

same area or installation of new plant on new piece of land.

C. Financial Plan:Initial capital requirement for this processing will be around Tk.

50,00,000/-.

D. Social and Economic Benefits: This process can reduce water use in paper production by nearly

60% and energy consumption by 40%.

Air pollution can be decreased by 74% and water pollution. by35%.

Re-useable paper products are friendly to environment. Most of thepeople dont know about the concept of reusable paper. If

awareness is created amongst the individuals, this will lead to

increase in re-useable products demand.

Return on Investment:

We plan to a lot his percentage of return on investment to our investor.

However, if the net profit falls below the return value, we will then go for a

different percentage which will be based on not profit.


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General Company Description:

Company overview

Papyrus paper mills is situated at Rupgang in Naraengang. It was formed by

A.K. Khan in December 2010. It provides deluxe paper, erasable ink pen and

spray. Papyrus Paper mill will used raw materials of sugar cane waste and

jute pulp. If people encourage using our paper surely it will reduce the

cutting of trees.

Mission and Vision:

Mission: Papyrus Paper Mills Ltd. believes in achieving intact rate of growth &

being one of the best paper manufacturer organizations. Our aim is to keepour own position compact as well as to create national economic growth &value for our shareholders. Our primary objective of trade & commerce is tosatisfy customers, investors, shareholders & employees; and to develop thesociety. Overall, our program is directed for these purposes. Manufacture &distribution of quality grade papers at reasonable prices is our main focus.Business is directed through maintaining strong moral quality which enables us to createassets for the organization

Vision: To create social and environmental awareness against deforestation

and wastage of paper.

Products Overview

Papyrus Paper Mills will provide the following products:

Re-writeable paper Erasable ink pan Easy spray.

Erasable Inks (Blue):


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We provide a wide range of Erasable inks to our clients entire range of

erasable inks provided by our company is manufactured by using high grade

raw materials sourced from reliable vendors.

Paper Re-writeable process include the following main steps:

At first you have to write with erasable ink pan (blue) on the re-writeable paper.

Then apply erase spray over the particular paper.Within a few seconds ink of your paper will be vanished.

Now, your paper is ready to re-write.

Figure: Product Life Cycle

Benefits and features

There will be reduction of cost and wastage of paper. Rate of cutting of trees will be minimized. Our product is environment friendly and harmless.


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Strengths and core competencies

Experienced R & D department. High quality product in comparison to competitors. Environment eco-friendly and healthy products. Owners commitment and dedication towards anti-pollution.

Challenges:

Papyrus Paper Mills will face a challenging situation in creating its brand

image and attracting customers towards its products due to presence of

already established competitors in the local market.

Such as:

Bashundhara Paper Mills Khulna Newsprint Mills TK Papers Mills Karnaphuli Paper Mills.

Industry Analysis

A Paper mill can be described as a manufacturing facility that is intended to

provide convenience product with the help of special chemicals such as Si02,

C, ethanol ... etc. It normally serves the educated people specially students

and teachers.

In Bangladesh we have get a very large mill at Chandraghona in Rangamati

district. There is another paper mill at Pakshi in North Bengal. The Khulna

Newsprint Paper mill is also a large one.

Why do people buy our products?


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Paper is a thing which is used in our daily basis. it is used in schools,

colleges, offices, universities, courts etc. Huge amount of paper is needed to

fulfill the demand. Everyday huge amount of paper are used & wasted.

Students also buy paper for their writing purposes. If they buy our re-

writeable paper they will not only minimize their cost but also they will

contribute to save our environment. Because to make paper every year we

cut huge amount of trees. Papers is usually made from wood grasses,

bamboos and sugar cane wastes. For instance, the Karnaphully paper mill of

Chandroghona used bamboo and Khulna Newsprint Mill uses Gaowa as raw

materials.


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Market Analysis:

Industry life cycle:

Paper mill industry in Bangladesh still at growing stage. According to central

bank statistics, Tk. 29.0 billion was spent to produce imported pulp, weste

paper, finished and specialized paper during the 2008-9 fiscal year.

However, the countrys demand for industrial paper is around 250,000 tones,

writing paper around 250,000 tones, newsprint around 40,000 tones and

specialized paper around 10,000 tones, according to industry insiders.

Most of the leading paper manufacturers are now expanding their plants

aggressively.

The growth in demand for industrial and specialized paper including offset, A-

4, and carbon-less is rising by more than 10 percent annually while the

demand for writing paper remained almost static in recent years.

Double A of Thailand is supplying 63% of the computer and photocopy paper

and century of India has captured 12% of the countrys specialized category

paper market.

Industry insiders said Bashundhara Group, which had lunched paper

production on large scale in 1996-97 with a capacity of 100 tons a day in the

private sector, is the countrys market leader.

Earlier, there were four static owned paper mills. Khulna Newsprint Mills was

established in 1996 in Khulna based on Gewa wood is now closed. Another

government paper mill was in Pakshi and its raw materials was cane

bagasses but it is also closed now.

Only KPM is still in production and its capacity is 100 tons a day.


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SOWT Analysis

Strengths:

Management committed towards to a result oriented approach toattract and maintain customers in a highly competitive market.

Company will hire qualified, educated, and skilled chemist. We can patent our product. Science this is a non existing product in the market we dont have

direct competitors.

Weaknesses:

Since this is the first stage of our business initial cost are high. The marketing budget of our company is short to attract large

business clients.

Though it is a new category of paper in the market so customers donot know about our papers benefit. Thats why they are not

willingly to buy this products.

Opportunities:

In todays world people are more aware of the environment whichfits our product and its a positive side for us.

Though the expense is increasing in our daily life and if peoplerealize that our product will minimize their expense then they will

interested to buy our product.

We can easily capture the market because our product is unique.Threats:

Since we are lunching our product for the first time, we have to sellthe 3 products re-writeable paper, erasable ink and easy spray)

together at the same time.

Normal paper is a great invention in human civilization so wecannot ignore it if we want.

Threat of intense segment rivalry: Though there is a lot of aggressive

paper company in the market such as Bashundhara, TK, Karnaphuly etc but

there product is almost similar without any unique feature.


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Our most opportunity is that we have no close competitors. Double A,

Kornofuli paper are our indirect competitors. Although, our product is

different from our competitors product. So, in this segment our competitive

advantage is very high.

Threat of new entry: We get extra opportunity because we have no

nearest competitors and there is no possibility to enter a new company as

like us. We must patent our product so that no company can capture our

product feature.

To enter the market properly, try to good performing and in our business our

investment is not so high, because our production cost is comparatively low.

So, exit barrier is low.

Suppliers bargaining power: Our Paper industry uses sugarcane wasteand jute pulp as raw materials so we think suppliers bargaining power is very

low since Bangladesh is a land of golden fiver.

Buyers bargaining power: Though similar product is available in the

market but our product feature is absolutely unique. For these reason buyers

bargaining power is also low.

Threat of substitute: Normal paper can play a substitute role as an

alternative to our paper. Computers and paperless office also a good

substitution of our product but that is too much expensive.

The most influential analytical model for assessing the nature of competition

in an industry is Michael Porter's Five Forces Model, which is described

below:


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Porter explains that there are five forces that determine industryattractiveness and long-run industry profitability. These five "competitiveforces" are

- The threat of entry of new competitors (new entrants)- The threat of substitutes

- The bargaining power of buyers- The bargaining power of suppliers- The degree of rivalry between existing competitors


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Figure: Porters Five Forces

There is no near substitute for our product, because we are firstintroducer, though we have no competitors, which are why we get extraadvantages at this stage.Threat of buyers bargaining power:We offer a package for the consumer. If they will buy our product, theyalmost get extra benefit because it will reduce their cost as well as theyexpense, we think they will not bargaining to buy our product.

Figure: Graphical Presentation of SWOT


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Mass Supply / Mass sale

Papyrus Paper mill produces paper in its paper mill and it sell their products

in its own stationary named Papyrus stationeries. It also distributes its

products in other stationeries as well. By this process it can spread its

product all over the country.

Media Advertising:

Papyrus Paper Mill will use internet, newspaper, magazines, television and

radio as the medium of advertisement. In addition it will print 5000

brochures / leaflet for creating awareness in the market about their health

care services, it distributed in major social awareness seminars, book fairs,

education fairs and events where Papyrus Paper Mill will participate.

Product Execution Timeline:

Papyrus Paper Mill will follow this product execution model to enter in the

paper market

Task Execution Period

January February March April May June July

Choosing

location

Website

development

Hiring

training and

admin staff

Advertising

Lunching of

products

Location:

Papyrus Paper Mill will start its business at Rupgang area in Narayngang.


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Personnel:

Papyrus paper mill will start with a total of 200 initial staffs members,

laborersand owners as well.

Cyclical Trends in Industry:

Paper Industry is pretty much affected by our various cultural trends. Such

as book fairs, board examinations.

Market Demand:

Ease of product: People are looking for paper that is re-useable and less

expensive.

Effectiveness of product: It can be re-used multiple times and reduce

wastage of paper.

Eco-friendly: this paper works indirectly for anti-pollution.

Market Facts:

In Bangladesh there are many educational institutes that order tonsof paper for educational purposes.

News paper is still a huge source of entertainment in Bangladesh.As a result huge amount of paper is used in our print media.

Students of all ages use books, note books, diaries etc around thecountry.

Paper industry is cutting town a lot of trees in order to make paperevery year.

Bangladesh is way behind in technology. As a result it is not yetpossible to make a paperless office.

Facts about papers and paper waste:

Approximately 324 of water is used to produce 1 kg of paperSource: Environment Canada

Average worldwide annual paper consumption is 48 kg per person.


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Price

New-product Pricing Strategies:

Market Penetration Pricing:

Papyrus paper mills will face a challenging situation in highly competitive

market of Dhaka, Chittagong, Comilla, Rajshahi ,Khulna, Shylet and Barishal

all over the divisional city in Bangladesh. We target this divisional city for the

reason of highly reputed educational institution.Therefore, we will offer high

quality product at cost less than its benefits than existing market

competitors.

Rather them retting a high initial price to skim off small but profitable market

segments, we use market perpetration pricing. We set a low initial price in

order to penetrate the market quickly and deeply to attract a large number

of buyers quickly and win a large market share. The high sales volume

results in falling cost, allowing the companies to cut it prices even further and

it will be very helpful to receive a loan.

Figure: Pricing Strategies Matrix

Product Mix Pricing Strategies:

Product Bundle/Package Pricing:


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We will make a bundle of products (25 pieces A4 paper + erasable ink pan +

easy spray) and offer the bundle at a reduced price of Tk. 95 only.

Financial Plan

Start-up Expenses

The start-up expenditures for Papyras Paper mill are summarized below:

Start-up ExpensesPapyrus

Sources of capital:


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Investmentrequirement Tk.: 9,000,000

-_____________________Totalinvestment Tk: 9,000,000

_____________________

Start-up Expenses: Tk______________

________

Factory 2,000,000

Machines 15, 00,000Delivery Van 15, 00,000Capital Expenditures 5, 00,000Promotion 5, 00,000Labor cost 2,000,000

__________________

Total Start-upExpenses 8,000,000

_____________________


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Balance sheet (Projected)Papyrus Paper Mill

Assets:Current Assets:

Cash in BankAccount ReceivablePrepaid Expense

90,000-15,000

12,770,0001,00,000

15,000

105,000 12,885,000


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Fixed Assets:

FactoryMachinesDelivery van

Total fixed assets

Total Assets

Liabilities and Equity:

Current Liability:

Accounts payable

Long term Debt:

Bank Loans payableTotal Liabilities

2,000,00015,00,00015,00,000

-1,000,00015,00,000

5,000,000 25,00,000

5,105,000 15,385,000

-

-

6,00,000

9,000,000

0 96,00,000

Owners Equity:

Retained earnings beginning

Retained earnings current

Total owners equity

Total liabilities and equity

5,105,000

-

5,105,000

6,80,000

5,105,000 5,785,000

5,105,000 15,385,000


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Revenue Forest (3-year)

Sales forecast (3-year)Papyrus paper mill

Explanations Year-1 Year-2 Year-3

Year-1:50,000 Packages * Tk. 95

All packages (40 pcs): 40,000*tk. 50Erasable Ink Pen: 30,000 * tk.15Easy spray ( 300 ml): 20,000 *tk. 80

Year-2:60,000 Packages * Tk. 95All packages (40 pcs): 50,000*

tk. 50Erasable Ink Pen: 37,500 * tk.15Easy spray ( 300 ml): 25,000 *tk. 80

Year-3:

78,000 Packages * Tk. 95All packages (40 pcs): 75,000*tk. 50Erasable Ink Pen:48,000 * tk.15Easy spray ( 300 ml): 32,000 *tk. 80

47,50,000

2,000,0004,50,000

16,00,000

57,00,00025,00,0005,62,500

2,000,000

74,10,00037,50,0007,20,000

26,00,000

88,00,000 107,62,500 14,480,000


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Profit and loss projection (3 year)Papyrus paper mill


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Revenue:

Sales

Total Revenue

Operating cost:

FactoryMachinesDelivery vanCapital expendituresPromotionLabor cost

Total Operating Expenses

Profit before taxes

Taxes (15%)

Net profit

8,800,000 10,762,500 14,480,000

8,800,000

2,000,00015,00,00015,00,0005,00,0005,00,000

2,000,000

10,762,500

5,00,0006,00,000

25,00,000

14,480,000

5,00,0007,00,000

3,000,000

8,000,000

8,00,000

1,20,000

36,00,000

71,62,500

10,74,375

42,00,000

10,280,000

15,42,000

6,80,000 60,88,125 87,38,000

Pro forma Cash flowsPapyrus paper mill


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Cash Received:

Cash From Operations;

Cash Sales

Sub total cash from operations

Additional cash received:

New borrowing

Sub total cash Received

Expenditures:

PromotionLabor cost

Sub total spent on operations

Additional Cash Spent:

Taxes

Purchases of long term assets

Sub total cash spent

Net cash flow

8,800,000 10,762,500 10,762,500

8,800,000

9,000,000

10,762,500

-

10,762,500

-

17,800,000

5,00,0002,000,000

10,762,500

6,00,0002,500,000

14,480,000

7,00,0003,000,000

2,500,000

1,20,000

5,000,00025,00,000

31,00,000

10,74,375

-

37,00,000

15,42,000

-

51,20,000 41,74,375 52,42,000

12,680,000 19,358,125 28.596,125


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References:

http://www.ehow.com/list_7401309_chemicals-make-ink_.html

http://www.ehow.com/how_12217240_make-erasable-ink.html

http://www.paperonweb.com/chemical.htm

http://www.paperonweb.com/wood.htm#top1
http://www.ehow.com/list_7401309_chemicals-make-ink_.htmlhttp://www.ehow.com/how_12217240_make-erasable-ink.htmlhttp://www.paperonweb.com/chemical.htmhttp://www.paperonweb.com/wood.htm#top1http://www.paperonweb.com/wood.htm#top1http://www.paperonweb.com/chemical.htmhttp://www.ehow.com/how_12217240_make-erasable-ink.htmlhttp://www.ehow.com/list_7401309_chemicals-make-ink_.html


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http://www.id2.ca/downloads/eco-design-paper-facts.pdf

http://en.wikipedia.org/wiki/Paper_pollution

http://wiki.answers.com/Q/What_chemicals_are_used_to_make_writing_pap

er

http://en.wikipedia.org/wiki/Methanol

http://mpra.ub.uni-muenchen.de/17206/1/MPRA_paper_17206.pdf

http://www.ehow.com/how-does_5019302_ink-eraser-work.html

http://www.indiamart.com/rayudulaboratories/

http://www.indiamart.com/rayudulaboratories/erasable-inks.html

http://www.worldscrap.com/modules/news/article.php?aid=13501

www.thefinancialexpress-bd.com

http://en.wikipedia.org/wiki/Invisible_ink#Properties_of_an_.22ideal.22_invi

sible_ink

http://chemistry.about.com/library/weekly/aa121602a.htm

http://tutor2u.net/business/strategy/porter_five_forces.htm

http://www.netmba.com/marketing/product/lifecycle/

http://marketingteacher.com/lesson-store/answer-pricing.html

Principles of Marketing (13e)

By Philip Kotler and Gary Armstrong
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