A BUSINESS PROJECT (CODE: MGT-410) Manufacturing of Water Mist Electric Fan

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A Business Project submitted to the Faculty of Management and Administrative Sciences, University of Gujrat in partial fulfillment of the requirement for

The Degree of

Master in Commerce
By

Name M.com

Roll Number

University of Gujrat
2009 to 2011

Evening Program City Campus

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Approved By

---------------------------Supervisor

----------------------------Head of the Department

----------------------------External Examiner

Certification

It is certified that this business project entitled as Water Mist Electric Fan prepared by
Ali Ahmad Fazal Mehamod Tahir Tufail Ahmed Usman Ejaz Yasir Arfat

In M.Com (Evening) Program, has been approved for submission to University of Gujrat, Gujrat.

-----------------------------------Supervisor

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Table of Contents
Chap #
Dedication Executive Summary Introduction to project The Opportunity Market Research business model Target Market Management Team Description of what business needs Amount of Capital The Business Company History Vision & Mission Objectives Competitive advantage Current status and requirements Management Team Management experience Technical expertise Board of Directors Key Professional service providers Law firm Accounting firm Business Consultants Company Structure & Ownership Organizational Structure

Particulars
Acknowledgement

Page No.

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Organizational chart Description of org. structure Legal Structure Legal form of organization Intellectual property Industry Analysis Industry trend Industry size Industry attractiveness Description of target market Competitor Analysis Marketing Plan BCG matrix SWOT analysis PEST analysis Segmentation Concept testing Usability testing Channels of distribution Promotion & Advertising Operation Plan Method of Production Availability of qualified labor Financial Plan Sources of fund Income statement Balance Sheet Critical Risk factor Marketing risk Management risk Financial risk Operational risk

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Business Project Mgt-410

In the name of Allah the most Beneficent & Merciful

ACKNOWLEDGEMENT

All praise is to Allah, who gave us the strength and abilities to complete this project. We are highly thankful to Mr. Waseem Ullah (University of Gujrat), who kindly consented to supervise this project and provided valuable help and guidance in every stage of the project. We would also like to extend our gratitude to all other persons, who, either directly or indirectly contributed to the completion of this project. Especially our group members, who helped and encouraged us. This project is the result of full commitment and hard work of the group members who tried in their best to show the true picture of a newly formed soap and detergent manufacturing company in Gujrat. We are satisfied with our work.

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DEDICATION

First of all we are grateful to ALLAH the Almighty for giving us the courage to complete this project in a short span of time. We dedicate this business plan to the department of Commerce & Accountancy, Evening program, University of Gujrat, they have helped us a lot in making this project, especially to Prof. Waseem Ullah for his selfless efforts towards the completion of this business plan. This project is also dedicated to the group members & our supporters who have devoted their precious time for its preparation.

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EXECUTIVE SUMMARY:

Fan is a daily use item. Its utility increases, especially in the summer season as u know in hot summer season electric fan flow hot air due to high temperature so by keeping in this view we develop a new type of electric fan which include a water mist through which fan can flow cool air. There are lots of opportunities available in the Fan Industry because the growth rate is high due to increase in Global warming in Climate and increase in Population. In Pakistan many companies working in the domestic and international market, these companies are providing quality electric fans at very expensive rates. So we are entering to solve this problem by providing best quality of electric fan with a new innovation of water mist that is a very economical and provide the cool air which is a cheap substitute of water cooler and air conditioner, it also cover high degree of air flow with less energy consumption. We are able to get the first mover advantage in the market as there is no other competitor present in the all over Pakistan, so we initially target the market of Gujranwala division. The management team of any organization is of extreme importance and is crucial to the success and development of any organization. This applies to our venture as well so the management team in our business comprises of very able, efficient and talented people who have expertise in their related fields. Finance is the backbone of any organization. We start our business with the estimated cost of the venture is Rs 80000000. The finance for the said cost of venture is 60% debt & 40% equity. The name of lender is Faysal Bank Limited that the required loan @ 14.50% (12% KIBOR + 2.5% Bank Spread) per annum against the securities pledged & the personal assets of the partners. In exit strategy we windup that part of the business in which we are bearing loss and if the whole business is failure then we will dissolve the business and return will be distributed among partners according to the proportion of investment.

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Chapter no. 1

The Business
The Opportunity:
A perceived means of generating economic value (i.e., profit) that previously has not been exploited and is not currently being exploited by others. Three central characteristics of a viable opportunity: 1. Potential economic value (the capacity to generate profit) 2. Newness (something that did not exist previously) 3. Perceived desirability (moral and legal acceptability in society) Opportunities emerge from a complex pattern of changing conditions (RF1 Dr. Joseph C. Picken Executive Director The Institute for Innovation & Entrepreneurship at UTD URL: http://innovation.utdallas.edu/documents/OpportunityEvaluation.pdf)

There is great opportunity to invest in this type of business and gain a huge amount of profit through the domestic sale and as well as Export. It is forecasted the demand of electric fan is going to high day by day with the changes in environment and global warming is also a signal of electric fan demand. The result of Our market research shows that 90% respondent are strongly agree there should be water mist Electric fan in home and office and human life is unsustainable without the use of electric fan in a summer season and its help to reduce many diseases that caused by the mosquito bites. Pakistani manufactured fan have high air flow than Chinese manufactured fans so that with the new innovation of water mist with fan air make it a exceptional product for consumers, our results also support our product is life time product and have competitive advantage then other electric products. Our results also supports that electric fan is economical to purchase then the

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other products like Air Conditioner, we also ask about overall business of electric fan manufacturing which shows the positive response and fan manufacturing is profitable business industry, so that as overall results of our survey shows this business of water mist electric fan manufacturing is highly prospective sector and we select it for our business.

MARKET RESEARCH

RESEARCH OBJECTIVES In order to conduct the market research for this project the team members identified following research objectives: To find that is there any demand exists for the water mist electric fan in market? To check the customers preference for the new innovation in electric fan? To find the customer satisfaction level from the existing electric fan? Customer attitude & feeling toward the new technology in electric fan? To identify potential segment to be targeted To get the information about the customer preferences regarding mist fan?

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Our results in Statistical Percentage shows followings:

Do you think there should be water mist Electric fan in home or office? 60% respondent shows that human life do not sustain without electric fan in a hot summer season? 70% respondent Shows that electric fan reduce mosquito bites at night and u feel safe from many diseases or illness 60% respondent Shows that it is economical to purchase 90% respondent Shows that Pakistani manufactured electric fan provide better air flow than Chinese manufactured electric fan 80% respondent Shows that electric fan is a life time product 90% respondent Shows that water mist electric fan is the substitute of other cooling products 75% respondent Shows that electric fan is the basic need in hot summer season regions like Pakistan 50% respondent Shows that there should be hi-tech electric fans 10% respondent Shows that there is any Risk of Electric fan for consumer 36% respondent Shows that electric fan helps to reduce the temperature of other devices (refrigerator compressor temperature) 65% respondent Shows that water mister fan economical as Compare to Air Conditioner 100% respondent Shows that the electric fan business reduces the unemployment rate 60% respondent Shows that electric fan is affordable for all classes of our society 95% respondent Shows that electric fan have a competitive advantage over other electric devices (room cooler, cool wavier) 100% respondent Shows that electric fan manufacturing is the profitable sector in Pakistani electric industry

RESEARCH METHODOLGY:
On the basis of inquiry mode our research is quantitative and the study design is cross-sectional or oneshot studies. Our sampling technique is random sampling design. To collect the data regarding the customer interests, customers characteristics we focused upon the primary data from the target market and to serve this purpose a closed ended questionnaire has been used, consisting of 17 questions. And at the end to draw the inferences the data was processed through the statistical percentage. To have the awareness about the competitors, about the market trends and frequency of uses of electric fans we also conducted interviews.

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Results:
Based on the survey that we conducted having a sample size of 100 local respondents, to have a concrete assessment about the preferences, perceptions, expectations, interest, and acceptance level, we drew out some conclusions. A list of these conclusions is described above. The methodology adopted was random sampling from selective places like housing colonies, real state builders, construction agencies, contractors ,towns, and furniture market,. The places were assumed to be having people belonging to the demographics of our target market, so that we could rely on survey findings

Marketing Strategies
The decision of targeting should be thoroughly based on the best fit of product/service features and the attitude, characteristics of the customers.

Target Market
Our target market is limited to national boundary; our main focus will be on Gujranwala division which is consist of Gujranwala, Sialkot, Hafizabad, Gujrat, Mandibahawaldin, and Narowal, because that area is more populated and congested.

Description of Target Market

We divide the whole market on geographically basis in six areas. Gujranwala Gujrat Sialkot Narowal Mandibahawaldin Hafizabad

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Gujranwala division is geographically situated at very important place. The population of Gujranwala division is 2661360 according to the consensus of 24-june-2011. The area of the Gujranwala division is 3198(km2). It is bounded on the North by Jammu and Kashmir, on the west Mandibahawaldin, on the east Shakrgarh and in south Lahore. (Ref: http://en.wikipedia.org/wiki/Gujranwala) Gujranwala is also main city of Pakistan and situated at the south of Sialkot, on the north Wazirabad and Gujrat in the west Hafizabad, in the South-West Sheikhupora and in south Lahore. So a large number of customers can be attracted and retained in this target market because a large number of people are live in this area. Our organization will provide quality water mist electric fans to that whole market because our business targeted market is niche and the other reason behind entering this market is competition, no water mister fan manufacturing business and easy availability of raw material in these areas.

Competitive Position with Target Market:

We have a strong competitive position because we are the first mover in providing the innovation in electric fan with water mist which makes it an exceptional product to consumer.

How the Proposed Business Solves the Problem or Fills the Need:
R&D (Research and development) function of Crown water mist electric manufacturing business has identified multifarious opportunities to open new businesses in Gujrat city and got city Gujrat is a great place for installing industrial unit because of low labor wage and availability of skilled labor and Raw material for producing fan is economical and excellence. As it is identified that the major area of Pakistan has hot climate and the period of summer season is much long as compare to winter. The main problem that our company identifies is the air of electric fans become also warm in hot summer and benefit convert to harm, so our R&D develop an innovation in existing electric fans with water mist.

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Brief Introduction of Company:

In Gujranwala division there is not a single factory which is providing water mister electric fan, this is first time in Pakistan that our company is going to launch a new type of fan. Research of this kind has been launched to find out what kind of problems people are facing. This is a partnership business. We are five partners, who have strong academic achievements and plenty of good practical experience about this business. Another reason to start this business is to have one member in management team who has valuable experience in managing electric fan manufacturing business and also has been in charge of fan manufacturing company, We can best estimate our cost and projected sales because of these reasons. This experience and education must help us in achieving short term plans of company and also long term plans of the business

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Business Type: Electric Fan manufacturing with water mister Business Name: Crown water mist electric Fan Status of Business: Partnership Business
Product nature: Water mist Air flow Electric fan product for home and office use Product: Water Mister Pedestal Fan,

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Vision Statement: To become the premier company of the world by developing the core customer values and providing products of best quality. Mission Statement: We will provide value product above than customer perception, to give benefits and rewards to the employees as they deserve, to maximize the wealth of all partners, to make environmental friendly products

Core Values:
There are following core values of our business Management
We value management and leaders of high integrity, energy and passion who have the necessary executive, professional and people skills to inspire a group or an organization to set high goals and achieve them willingly.

Cooperation and team work:

We believe that high cooperation among team containing right diversity can achieve what individuals alone cannot.

Excellence and Continuous Improvements:

Excellence and strong commitment to continuous improvements are essential to our ongoing success.

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Ethics and honesty:

We do care how results are achieved and will demonstrate honest and ethical behavior in all our activities.

Open Communication
We value communications that are courteous and open and that enables to do our jobs more effectively by providing information that contributes to the quality of our judgment and decision making.

Adopting to change
Success requires us to continually strive to produce break through ideas and adopting to change that result in improved solutions and services to customers

Appraisal and growth:

Strive to create an organizational environment in which individuals are encouraged and empowered to contribute, grow and develop them.

Satisfaction and Entertaining:

Entertainment, satisfaction and recognition are essential elements of a healthy, creative and high performing work environment. Having fun in our work should be a normal experience for everyone

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Objective:
The main objectives of the fan industry business project are: Maximize on brilliant chance to take out utmost profits. To initiate the fan manufacturing unit with a greatly targeted advertising campaign To sustain hard control of costs, operations, and cash flow through efficient management To maintain a high standard of product and service provided. To take advantage of outstanding location opportunity at city Gujrat. To be the leading company that attains the goals of profit maximization and value maximization for all the stakeholders of the company.

Competitive advantage:
We will follow differentiation strategy as we will provide features according to our customers demands and needs. We performed marketing research to select new features for our product water mist fan and we will concentrate on this feature along with attractive price package to attract keep and grow our business customers. As you know in a warm environment your body sweats and perspiration forms on your skin. As the circulating air from the fan moves over your skin it disappear the perspiration. Energy is used in that process and the result is coolness on the skin. In addition, the moving air is more efficient at removing heat from your body.

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Description of the business model:

Our valuable product will include:
Misting Fan Kits Pedestal rod Copper wire Boll Bearing Nakkah Dome Pump Grill Foot stand Electric wiring

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Our Product: Water Mist Fan

Application of our product:

Home and Office Indoor, garden, hot summer season

Agribusiness Poultry farms, horse stables, greenhouses, hydroponics, tobacco farming, flowers, etc.

Food Restaurants, bakeries, supermarkets, fruit stands, fish markets, etc.

Industries Metal-mechanic, plastics, petrochemical, foundry, rotomolding, vacuum, forming, shoemaking, electric-electronic, furniture, textile, pharmaceutical, leather tanning, confined spaces, etc.

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Services Fitness centers, dry cleaners, print shops, schools, clubs, gymnasiums, saunas, pharmacies, parking lots, bars, night clubs, etc.

Specification of our product:

SPECIFICATION OF MIST SYSTEM PART

Mist System: Centrifugal mode. Mist Capacity: Adjustable to water valve Water Tank/Tab 36-40 liters unbreakable plastic tank Continuance misting: 6-8 hours Mist drop size: < 10m Available area: 40 Available distance: 8m Temperatures drop: 3oC-8oC

SPECIFICATION OF FAN PART

Fan size: 26(650mm) Stand type Material: metal (grill, housing, bracket, base) Height: Adjustable from 1700mm to 2000mm Fan motor protection: Water drop proof Speed: 3 Speeds Adjustable Fan blade: Aluminum Tilt adjustable: 30 degrees up and down Oscillation: 90 degrees automatically

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How the business will create a sustainable competitive advantage

Continues assessing the market needs through surveys and questionnaires. Our unique product will be providing us competitive advantage as compared to other fan manufacturer operating in the industry. The dynamic environment will also help us gain and sustain it.

The keys to success in achieving our goals are:

Be the first mover in the market to provide a water mist fan as an innovation in existing fans. Provide an exceptional product and quality that leaves a sense. . Managing our internal finances and cash flow to enable upward capital growth. Strict control of all costs at all times, without exception. The Company will be strategically located to maximize the revenue derived from the sales of the quality product. Creating demand through innovation High demand of such mist fan in the target market. Large distribution channel for the sale of fan in the urban and rural areas. The product would be focusing the price conscious segment of the market by providing different and improved quality product at lesser price as compare to other cooling devices. Stress on excellent service to the other wholesalers. Improving the packaging will increase the overall distribution and selling techniques. Selection and procurement of consistent quality raw material would be another contributing factor for carrying out winning operations. Competitive price of products. Rich and easy availability of raw material. Cost efficiency through better management. Advertising and promotion for the awakening of the retail customers. Availability of low cost specialized labor.
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Current Status and Requirement:

Crown water mist electric fan business will be established by partnership which is formed by us according to the needs of the time. Its location will be in Gujrat. High growth is expected in the beginning keeping in mind the market demand at the current time. If it gets the healthy response production units will be established in other locations of the country. The business needs extensive efforts in all the sectors to move forward. Like extensive marketing, excellent quality and services of the experts. Every business wants to accelerate in the market.

Market Analysis Summary:

In Pakistan there are no exact figures available as to what is the total number of units, how many are operational, what is the total installed capacity is, and what the operational capacity is. According to the industry sources (including manufacturers and vendors) there is a substantial demand for quality fans on a large scale. Also, there is room for new entrants who want to manufacture the quality products, using the latest technology but no one is producing the water mist electric fan. The fan industry is mainly clustered in four major cities namely, Gujrat, Gujranwala, Lahore and Karachi. However, 98% of the countries production is centered at Gujrat and Gujranwala. The sector comprises over 450 SMEs, of which 300 are based in Gujrat and the rest in Gujranwala. The industry produces on average 8 million fans a year with an estimated value of Rs 17 billion. Out of the total production, approximately 30% fans consist of pedestals, 7% brackets and the remaining 63% are ceiling fans1. The industry belongs to the light engineering industry category, and is one of the industries that existed at the time of independence.

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Besides small and medium units, a few units are quite large and have integrated system i.e. from motor winding to high-pressure dies casting. Sales are also fairly concentrated with five large firms in Gujrat and three in Gujranwala, accounting for 40% of total industry sales. Most of the raw materials used by the fan industry are directly or indirectly imported from different countries. Some of the raw materials used in the manufacturing of a fan are: electric steel sheets, aluminum, enameled copper wire, ball bearing, steel rod and PVC.

Indicator To GDP %

Value 0.27%

To Direct Employment (Numbers) 30,000 To Indirect Employment (Numbers) 90.000 To Exports (%) 0.2%

Global fan trade is classified on the basis of energy consumption. The fans that consume less than 125 watts of energy (SITC 74341; HS 8414.51) are generally referred to as domestic fans and the fans that consume over 125 watts (SITC 74343; HS 8414.59) are classified as industrial fans. Pakistans industry mainly dominates in production of fans which consume less than 125 watts of energy. (Source: PEFMA, Pakistan Economic Survey 2008-09 and UN Commodity Trade Data Base) The sector employs around 30,000 thousand workers. However, employment is seasonal as most factories operate for only five to six months during the year. Over the last four years the exports from the sector has increased by about 120% to around US$30 million. Currently only 10-15% of the industry is exporting whilst the remainder is only supplying in the local market.

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Exports make up only a small fraction of world trade in fans, which amounts to around $3 billion. Pakistans exports are mainly concentrated in low-income markets, such as Africa, Bangladesh and some Middle East countries. The average export price of Fans made in Gujrat and Gujranwala is around $23-25, which is much lower than some of the more sophisticated fans which sell for around US$400-500. The retail price of Pakistani fans in its export markets on the other hand varies between US$32-35. The sector, whereas, has shown high levels of growth in the recent years suffer from low levels of productivity, inadequate technology upgrade and shortage of skilled staff. Moreover, most of the companies operate under locally created brands with only a couple moving to international branding of their products. The industry also requires testing and certifications of their products mainly conducted or required for electrical safety. Certifications are normally required for export markets, whereas, general performance and safety testing are conducted regardless. As a result of the UNIDOs benchmarking exercise we have also identified that those firms which have large local market demand are better at innovation and new designs as compared to those firms which are solely focused on export markets. The reason for this could be that, the local consumer is demanding better quality and design products as compared to consumers of the current export markets. Additionally, the surveys conducted also suggest that current export markets usually offer lower margins as compared to local markets. (http://trtapakistan.org/sector-products/industrial-products/fan)

Market Segmentation
Our market has segmented is based upon the only geographic segmentation because the warm climate areas are the main segment where we can sold our product, our target market at first level is Gujranwala Division and it may expands if we got the healthy response from the customers.

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Market Size & trend:

Our market's needs are simple: people want to be relaxed and feel good; they want a comfort and cool environment with they live and work. We aim to please people who want this. It has been determined that our target markets are also interested in this type of innovation in electric fan which provide cool air without making wet and economical as compare to other cooling products like room cooler and Air Conditioner with a competitive edge because we are committed not only to the needs of the community, but its concerns as well. Gujranwala division population is approximately more than 2661360 according to june 2011. And construction work increases day by day so that the need and demand of this type of water mister fan become high, Life style of people has changed due to immense usage of technology. People now want to enjoy life, they want entertainment, but the global warming, environmental conditions of Gujranwala division are not good so that people want to remain cool by using this type of fan. Market size is quiet big and indirect competitors are very few to serve this market. Market is growing with the passage of time and new trends are being adopted by people of Gujranwala divisions. Our competitive edge is that we offer differentiated electric fan that creates a relaxing atmosphere that can refresh the mind, body, and soul with our special water mister technology.

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Chapter no 2 Management Team

Board of Members:
Chief Executive Officer. Purchase & Quality control manager. Marketing manager. Operation & production manager. Finance manager.

Details of senior management:

There are five members in senior management. Each member of management team is specialist in managing the activities relevant to its department. The names of five people forming board of members of the business are: 1. A CEOs responsibilities: everything, especially in a startup. The CEO is responsible for the success or failure of the company. Operations, marketing, strategy, financing, creation of company culture, human resources, hiring, firing, compliance with safety regulations, sales, PR, etc.it all falls on the CEOs shoulders.(http://www.steverrobbins.com/articles/ceojob) Mr. Ali Ahmad is the Chief Executive officer of the crown water mist electric fan manufacturing company and very much responsible in his all activities of the business in the selection of members of management and he has also experience in running fan manufacturing of electric fan of all kinds.

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2. Yasir Arfat marketing specialist having valuable experience in running and managing marketing company, he also has a experience of as a brand ambassador GN industries. 3. Usman Ejaz finance specialist having experience in accounts maintenance and book keeping in a Dawlance group of companies along with having masters degree in master of Commerce with specialization in Accountancy 4. Tufail Ahmed will serve as Operation & production manager with educational background in Commerce with specialization in Accountancy 5. Fazal Mehmood Tahir another board member with the educational background in Commerce and with specialization in Accountancy will serve the duty of purchase and quality control manager of the business.

All the members of the board are able enough to manage the activities of the business both technically and administratively in an efficient and effective manner.

HUMAN RESOURCE REQUIREMENT

Descriptions Designation CEO Finance Manager Marketing Manager Operations & Production Manager Purchase & Quality Control Manager Supervisors (03 x 15000) Technician ( 06x 12000) Security Guard(02x7000) Skilled Labour 10x10000 Helpers 05x5000 Sweepers 01 Electrician (06x9000) Salary/Month 40000 30000 30000 30000 30000 45000 72000 14000 100000 25000 7000 54000 477000

1st Year
Rs. 480000 360000 360000 360000 360000 540000 864000 168000 1200000 300000 84000 648000 5724000

Total Salaries (Rs.)

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Board of Directors:
The organizational chart describe here in this diagram. The all core decision of the organization will be taken by the Board of member. The CEO will be the representative of the Board of member in the organizations regular activities. All the functional head responsible for the performance of their function report to the CEO.

Board of Advisors:

Advisory board of the firm constitutes 4 members from different professions. The names of people and their valuable experience are mentioned below: 1. Mr. Saqib Fareed sheikh is a Coordinator in evening program and a prominent staff member of faculty of management and administrative sciences, and students project advisory officer, university of Gujrat city campus, Gujrat. 2. Mr. Waseem Ullah is key member of faculty of management and administrative sciences University of Gujrat City Campus, Gujrat 3. Mr. Yasir Aftab farooqi a faculty member of management and administrative sciences, University of Gujrat City Campus, Gujrat 4. Mr. Sajid Mahmood a board member and a key person in the management of the business.

How the advisory board will be used?

Mr. Yasir Aftab farooqi belongs to business family of Gujrat. Being part of a business family he got very good experience in managing both technical and administrative aspects of the business. No doubt his experience is not in the same industry as we are in but his valuable experience in the business can be a valuable source of information and ease for us to manage the business activities efficiently and effectively. His valuable and abundance assistance regarding different matters of the business will be used by the management of the business in managing day to day operations of the business as well as his assistance will be availed as and when needed.

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Mr Saqib Fareed Shaikh another member of our business advisory board will assist the management of the business in building, maintaining, and increasing long run customers relationship because of valuable interpersonal and communication skills. Third member of our board of advisory is Mr. Waseem ullah serving people in educational field.. We will be using his experience and expertise in the relevant business to assist the customers in enjoying their spare time along with refreshment always available at our business premises. Mr. Sajid mahmood expertise in finance will be utilized in monitoring day to day business along with business transition he is supposed to manage as his regular duty.

Selection of Advisory Board:

All the 4 members selected to facilitate the board members of the business have been hired with the mutual consent and close agreement of all the members of the board. These members of advisory board and the board members of the partnership are supposed to work in the best interest of the business.

Key professional service providers to our business:

To keep our business up and running we really need the professional assistance of following firms working in different areas.

Legal advisor:
To assist us in all upcoming and potential legal matters such as formation of partnership deed extending the business relationships among different partners of this business and advising and assisting us over evolving government rules and regulations regarding business matters we will be hiring the following Law firm: Name of the firm: Abdullah Law Associates District court Gujrat, Gujrat. Phone no: 0333-8446073 Location and address of the firm: Kachari Chowk Gujrat

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Accounting firm:
In order to assist business management in decision making regarding different matters of the business we will be preparing different types of accounts and reports of financial data such as journals, ledgers, trial balances, balance sheet and others like statement of changes in owners equity etc .reports such as cost and service delivery and timing reports will also be the part of our accounting records to assist management in projecting and forecasting the business activities. Such records will be maintained in manual as well as in electronic way to make our accounting system efficient and smooth and we also use accounting software for financial Reporting and for quick design making.

Business consultant:
In order to be a successful part of professionals will be there to assist us in learning and adopting existing and evolving techniques and practices essential to keep to our business up and running in an efficient and effective manner.

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Chapter.3
Organizational structure, intellectual property and ownership
Company Structure:
The entire business organization will be of manufacturing organization. Decision making will be decentralized so that organization can make a better decision after consulting low level employees, because low level employees will remain more close to the customers. There will be following characteristics of the Crown electric water mist fan manufacturing.

Organization type: manufacturing Decision Making: Decentralized Involvement of Employees: Maximum Pattern of Communications: Vertical and Horizontal
There will be full hierarchy within the organization which will define the span of control which rests with the top, middle and lower management. The hierarchy is given as under

Organizational Chart:

Marketing manager

Purchase & Quality control manager

Chief Executive Officer Operation & production manager

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Finance manager

Organizational structure description:

There will be the following duties and responsibilities of each member in the hierarchy and other lower level employees, and the detail about each job is given below:

Board of members of partnership:

There will be a Board of members of partnership consisting of five members that are the partners in business, every partner will be member of the board and will perform his duties when and where required. The eligibility of each member is as follows; Must be partner of the firm Should be talented and well mannered Must have a broad vision

All the members of the board will make the mutual decision which is best for the organization, there will be two meetings in a year for discussing the different matters of business and find the solutions of the different problems and issues faced by the business. There will be following responsibilities of Board of members of partnership;

Holding Two general meeting in a year Establishing objectives up to one year time span Defining long term objectives Making decision for the betterment of organization Consideration of draw backs of business and their proposed solutions

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General/HR Manager:

CEO is the also act as a general manager and perform the human resource functions of the Business. CEO consults the issue with the all partner for the best favor of business.

Responsibilities of a CEO as a General Manager:

A general manager will look at each and every matter in the organization and will have a power of making swift decisions. He will make a check on the working of each manager and every manager will report to general manager for his duties and work. There will be some duties and responsibilities of a general manager which are given as follows: Make a control check on each department. Work as a liaison. Check on the internal working of the organization. A supervisory body in the organization. Every manager will report to General Manager. Performs the duties as an HR manager also. Taking best decisions promptly. Recruitment & selection training & development Performance appraisal Employee retention Employee welfare

Manager Finance:
There will be finance manager and at start it will be Usman Ejaz.

Selection of a Finance Manager:

Finance manager will be selected by the Board of members of partnership with their mutual consultation, by examining the capabilities and experience of a person from the given board.

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Eligibility:
There should be following qualities and characteristics in a finance manager; Educated in relevant field Experienced in relevant field Selected by the Board of members of partnership

Responsibilities:
A finance manager has a lot of responsibilities regarding financial matters of the business, finance is a key department of any organization, so there are some following responsibilities of a finance manager; Prepare a Budget Plan for short and long duration Prepare and review the financial statements Reporting to other Departments and in Meetings Act as a supervisor on billing department (payable and receivable) Forecasting of future expenditures. Acting as a controller in the company

Responsibilities:
A HR manager is responsible for entire gamut of HR which includes Recruitment & selection training & development Performance appraisal Employee retention Employee welfare Statutory compliance Liaison with Government officials etc. Administration activities like housekeeping Estate maintenance Security travel & ticketing pantry etc.

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Looking after day to day office activities Record attendance and checking attendance register Recruitment process Salary increment Counseling employees preparing offer/appointment and various other letters and issuing them to employees Studying performance of the employees and motivate them Taking in-house training sessions Preparing various MIS

Manager Marketing:
There will be Marketing manager and at start it will be Mr. Yasir Arfat.

Selection of marketing manager:

Marketing manager will be selected by the board of members of partnership with their mutual consultation, by examining the capabilities and experience of a person from the partners.

Eligibility:
There should be following qualities and characteristics in a Marketing manager; Educated in relevant field Experienced in relevant field Selected by the Board of members of partnership

Responsibilities:
Marketing Manager will work within the Marketing Department of store. He will be responsible for establish and developing distribution networks for the stores product lines. Marketing managers will be responsible for quality services provided to all customers by marketing staffs.

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Marketing manager will initiate market researches or surveys and will be responsible for analyzing and advising toward new and better products, packaging and delivery of products.

Manager Operations and Production:

There will be an Operation manager and at start it will be Mr. Tufail Ahmed.

Selection of Manager Operations and Production:

Operation manager will be selected by the board of members of partnership with their mutual consultation, by examining the capabilities and experience of a person from the partners.

Eligibility:
There should be following qualities and characteristics in an Operation manager; Educated in relevant field Experienced in relevant field Selected by the Board of members of partnership

Responsibilities:
It is responsibility of operational and production manager to manage these assistant of each department. An operation manager will be responsible for running the day-to-day operations of the organization. His sole purpose is to find ways to make the manufacturing process more productive by providing effective methods in its business operations. An operations manager will prepare program budgets, facilitate several programs around the business, control inventory, handle logistics and supervise employees.

Assisting operation manager:

Assistant operation managers of the business will be managing the operations and production of their relevant departments. These managers will service the different operations of the business and report directly to the operational manager which is the head of the operations of the business.

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Professionals in the relevant field will be hired by the business management to serve the different operations of the business.

Legal Structure: Legal form of organization:

The Crown water mist electric Fan business organization will be working as a limited liability partnership firm under Partnership Act of 1932.

Ownership structure of the business:

The Partnership deed document will describe the ownership structure of the firm. Each partner among five partners will be sharing Rs.6400000 in Pakistani currency towards the total equity of the business. The total equity of the business is Rs.80000000 in Pakistani currency which includes 40% equity and 60% debt from bank at the interest rate of 14.5%. The total Profit and Loss from the business operations will be shared by the partners of the firm on equal basis. In managing the operations of the business board will be there to delegate authority to different partners of the business. Different partners of the business have the following rights and liabilities defined by the partnership deed of business.

Rights of the partners:

Every partner will have a ready access to the books of accounts Every partner has a complete right to use the business property in the best interest of the business Every partner have an equal chance to vote in the meetings of company Each and every decision regarding any matters of the business will be done with mutual consensus and every partner will have this right etc. etc.

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Liabilities and duties of the partners:

Every partner will be liable to the firm for his personal misconduct in business operations While using the property of the business for personal use any partner will compensate the business for this use This is the duty of every partner of the business to properly and timely communicate any thing which is critical in managing the operations of the business and never conceal any thing crucial regarding matter of the business This is the duty of every partner to use the property of the business in the best interest of the business And show full commitment towards duties and responsibilities delegated to him by the board etc. etc.

Intellectual property: Patents, Trademarks and copyrights approved Trade marks:

Trade mark of our business includes our value proposition statement or simply a set of values we promise to our customers. This statement is Not common but special.

Copyrights:
Copyright of our business is our logo which includes both value proposition statements plus the image that reflects what we promise to deliver is quality products and services.

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Chapter NO 4
INDUSTRY ANALYSIS

Industry description: Industry trends:

From few years the Trends in the fan industry has been very positive in our country pushed by the many factors like the change in climate, higher population growth. Pakistan has emerging markets for many new technologies and investor are in high potential to invest in this type of market so when foreign investment move to Pakistan and it also lead to the heavy civil work so that the fan demand will increase.

Industry size
The industry size of fan manufacturing business in Gujranwala division is a large and it is suitable for us that type of business due to industry size, so the by keeping in view the large industry size the supplier of raw material makes high investment in this area which also lead the competition between the supplier that become the cause of cheap raw material. In this area no one is producing the water mist electric fan so that its become the opportunity to fill the need of our customers

Industry attractiveness: (Growing or Mature)

The electric fan is one of the growing manufacturing businesses in Pakistan. Because rapid innovations are taking place in the furnishing in fan making, people show the positive attitude towards the innovation of water mist technology in electric fan, it is also a profitable sector for us.

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Profit Potential:
According to the findings of our research study we are able to know that the total population of Gujranwala division and its surrounding areas is about 26,61,360 represent about 90% of our targeted population, From all over the Division about 300000 people work overseas that contributes about Rs 3 billion every month. Gujranwala Division accommodates many different industries and industrialists of Gujranwala Division will form a necessary part of our targeted population. Besides all this research study shows that Gujranwala Division is famous for the consumption of its people. Keeping in view all these things we are hopeful to earn sufficient amount of profit for running and maintain of business.

Target market: Description of the target market:

Our target market is limited to national boundary; our main focus will be on Gujranwala division which is consist of Gujranwala, Sialkot, Hafizabad, Gujrat, Mandibahawaldin, and Narowal, because that area is more populated and congested.

Description of Target Market:

We divide the whole market on geographically basis in six areas. Gujranwala Gujrat Sialkot Narowal Mandibahawaldin Hafizabad Gujranwala division is geographically situated at very important place. The population of Gujranwala division is 2661360 according to the consensus of 24-june-2011. The area of the Gujranwala division is 3198(km2). It is bounded on the North by Jammu and Kashmir, on the west Mandibahawaldin, on the east Shakrgarh and in south Lahore.

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Gujranwala is also main city of Pakistan and situated at the south of Sialkot, on the north Wazirabad and Gujrat in the west Hafizabad, in the South-West Sheikhupora and in south Lahore. So a large number of customers can be attracted and retained in this target market because a large number of people are live in this area. Our organization will provide quality water mist electric fans to that whole market because our business targeted market is niche and the other reason behind entering this market is competition, no water mister fan manufacturing business and easy availability of raw material in these areas.

Competitive Position with Target Market:

We have a strong competitive position because we are the first mover in providing the innovation in electric fan with water mist which makes it an exceptional product to consumer.

Market Size & Trend:

Gujranwala division is a large and populous market in size and diverse in nature, enriched with the industrial and official people, large & small enterprises, a large number of institutions, good literacy rate, women empowerment, and high income level and so on. There are about 1,059 cottage-level and small to large-scale industrial units operating in the Division. Gujranwala division is also known for its clay with which Gujranwala division have for long produced quality pottery. All of the aspects mentioned above encourage our idea to establish a Mist fan in this region. Because Life style of people has changed due to usage of media and economic condition. They want improvement in living standards, changing in their life style and look unique, and thats what we want to provide them through our innovative product.

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Segmentation: Market Segmentation:

Our market has segmented is based upon the only geographic segmentation because the warm climate areas are the main segment where we can sold our product, our target market at first level is Gujranwala Division and it may expands if we got the healthy response from the customers.

Segmentation According to Geographical: Basis of Segmentation Geographics Country Area Density Pakistan Gujranwala Division Rural ,Urban Variable

This segmentation is based upon the observation and interview of managers of few manufacturers

Target Market:
The market research shows the following segment is the most potential segment to be targeted in order to gain profits. Geographic

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Competitive analysis: Direct competitors:

There is no direct competitor of water mist electric fan in our target market so that it is favorable for us to produce this type of fan in this region.

Indirect Competitors:
There is large number of indirect competitor of our product mostly running their production in Gujranwala and Gujrat cities, the raw material that use in the our product is mostly same as use in the other fan making business only water jet mist kit and pump are the main difference with our indirect competitor.

Chapter references
1. http://www.einfopedia.com/per-capita-income-of-pakistan.php

2.

Rural to Urban Migration in Pakistan: The Gender Perspective By; Shahnaz Hamid Pakistan Institute of Development Economics, Islamabad

3. www.forum.urduworld.com/109/gujrat-Pakistan-311454/ 4. Pakistan-cities.blogspot.com/2010/01/Gujrat.pakistan.htm

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Chapter no. 5 Marketing Plan

Marketing Objectives:
Our main objective is to develop positive words of mouth about Crown Water Mist Electric Fan by giving value to our customers which will ultimately help us in customer retention. We will create awareness about our products of Crown Water Mist Electric Fan through the use of different mediums. In this campaign we are focusing on our product, reasons that why we are launching this business, how we are different from others and how Crown Water Mist Electric Fan will use standard quality in its product. We use broachers, leaflet, billboards, print media and cable ads to make people aware about Crown Water Mist Electric Fan. We are focusing to attract people on the basis of our environment and the product. Marketing department will perform following activities to achieve these goals: To run a strong marketing campaign. To build and retain our customers. To act proactively regarding the marketing trends.

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BCG MATRIX:

The position of Crown Water Mist Electric Fan in the BCG matrix can be identified on the basis of following facts regarding our product: Industry growth is quite high low market share is there for the business mainly because of introductory stage the product has strong first mover advantage Marketing and quality assurance are required to make the product a star.

After considering all the above mentioned facts we can say that our product will be a QUESTION MARK (?).

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Competitive Grid:
Name of Features Crown Water Mist Electric Fan UNIQUE PRODUCT Crown Water Mist Electric Fan is offering unique product which is totally different from its competitors. Brand Name & Recognition Our brand name is completely understandable and customer can easily judge the nature of product. Specialty We have special product in form of mist fans. Environment Relaxing environment with traditional outlook along with the pure fan industry. Overall environment is good. Very tough environment. No special product No special product It has common name which is not understandable by customer. By the name of this company people only know about fans not mist fans. Offers many products that are common in market. Royal fans give its products in market at very high rate which is not affordable for customers. GFC FANs ROYAL FANs

PEST Analysis:
PEST analysis is used to asses the macro environment forces and their potential to influence the business. These forces either produce opportunities for a business or become a threat for it to operate successfully. It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning.
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Political & Legal Environment:

Political and the legal environment can affect any business a lot. Our business is also flourishing and in future our vision is to export fans that why political structure can effect our business as well. Although the political situation in Pakistan is established to some extent but it involves a lot of complexities and uncertainties.

Tax rates and tax policies involve many types of variation and challenges. Trade policy like tariff, quota or any other by the Govt. can affect the prices of raw

material.

Economic forces:
Economic forces are one of the major determinants of our business. The economic condition of the economy and market is as under; Per capita income of Pakistan is increased from 736$ to 1207$ from the year 2004 to

20111. So increased in the income means more money to spent on the luxuries and facilities of life. Income level in Gujrat is relatively higher as compare to the many other regions in

Pakistan. Because Gujrat is a home to the many industries and a large number of its labor force is working abroad2. Capital and finance is available at the interest rate 13 %. GDP growth rate in Pakistan has been 3.76% in 2009-2010 and it is expected to be 2.39%

2010-20113. Income tax rate is 20 %. Interest rate by the state Bank of Pakistan is 13.5% in the year 2010-2011, showing a Expected inflation in the country would remain at 16.50 percent in 20114.

tight monetary policy.

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Social:
Estimated population of Pakistan is 184,404,791 (July 2010 EST.). 0-14 years: 36.7% (male 33,037,943/female31, 092,572) 15-64 years: 59.1% (male 53,658,173/female 49,500,786). The population of Gujranwala division is 2661360 according to the consensus of 24june-2011. People are becoming more brand and status conscious. Publicity and advertisement responsiveness is increasing. Demonstration and ostentation plays an important role in the purchasing decision of consumers. People fall under our target customers show their desire to response positively for the fans. Believe there is a need for mist fans in Gujrat. Due to the increase in the literacy rate people are becoming more conscious that can generate more customers on the purchasing of facilities for life.

Technological:
According to the nature of our business technology and the technological factors can play a vital role in the development and progress of our business. These technological forces can be described as under; New technology for die casting has been introduced. New means to provide the beautiful and attractive designs can have a positive affect on the consumer satisfaction. As many of our respondents showed their dissatisfaction with the products of existing fans.

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SWOT Analysis

The SWOT analysis of the industry is as under:

Strength:
Extensive labor is available Produces at lower cost Capacity of Production Self Sufficient Machinery is available Special industrial zone is established

Weaknesses:

Ball bearing is an important part that ensures smooth running and noiseless working of an electric fan.

Like ball bearings, electric steel sheet (ESS) is also a major item in fan manufacturing. It determines the quality, performance, durability and electricity consumption of a fan .Due to ESS shortage and high prices, fan manufacturers are using Mild Steel Sheet (MSS) the motors manufactured from this material are not of good quality and use more electricity.

Lack of political framework: (no recognition at policy level). Resource mobilization was the major issue to get short-term wins.

Lack of articulation culture and empire building attitude at all levels.

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Too much high prices of import raw materials. Weak research and development Weak technology Cost of imported raw material is high Lack of policy framework Low capital-output ratios Unskilled labor

Opportunities:
Environmental changes WTO will allow to export more Potential markets could be explored Increase in demand with increase in population Industrial Fans could be focused

Threats:
No focus on industry Technological shifts Quality of Fans Shortage of energy Increase in prices of raw material Security threats Inflation Change in government policies Pressure of new entrance in market

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Porters Model
Threat Of New Entrant (HIGH)
Threat of new entrants for Crown Water Mist Electric Fan is high. This is because fan industry is a growing industry, with large numbers of competitors and profits. This attracts the new entrants to get enter into this industry.

Rivalry Among Competitors (HIGH)

Crown Water Mist Electric Fan has a high rivalry among its competitors because it has huge number of indirect and direct competitors in the industry, which creates an intense competition.

Substitutability (HIGH)
Substitutability for our business is also very high. Each fan company is the substitute of Crown Water Mist Electric Fan.

Bargaining Power Of Buyer (HIGH)

Bargaining power of the buyer with Crown Water Mist Electric Fan is not high because of the unavailability of this type of product in the industry.

Bargaining Power Of The Supplier (LOW)

Bargaining power of the supplier is low because of the availability of large number of suppliers in the market.

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PORTER COMPETITIVE FORCES

AFFECTS ON CROWN WATER MIST ELECTRIC FAN

Low Bargaining Power of supplier Bargaining Power of Buyer Threat of New Entrants Threat of Substitute Rivalry among competitors

Medium

High

Market Segmentation:
At Crown Water Mist Electric Fan we have done Market segmentation on the following basis:

Geographical:
Country: Pakistan Division: Gujranwala Density: Urban and Rural

Target Market:
Our target market for Crown Water Mist Electric Fan is: 1. Affluent local residents 2. New built colonies 3. Building contractors The benefit of this mix of customers is that it helps to maintain consistent business throughout the year. For example, the affluent local residents will provide us the business on on-going bases. Thus this target market may provide a consistent foundation all year long.

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Description of Target Market:

Affluent locals:
Gujranwala division is a region where most of the people are residing abroad, so people are enjoying healthy incomes. Moreover Gujranwala division is an industrial area where fan and furniture industry is the most prominent and there is enough potential for Fan industry to flourish.

New built colonies

New built colonies are our target market because there is potential for purchasing more facilities for home. Gujrat is being considered an industrial city and is famous for fan manufacturing in Pakistan. Crown Water Mist Electric Fan is quite near to the industrial area, where there are many banks and factories. Furthermore self employed people could be potential customers for Crown Water Mist Electric Fan.

Building contractors
Building contractors are our target customers by there help we can increase our sales. Crown Water Mist Electric Fan would be the best fans to purchase for the people who built new houses.

Positioning:

Crown Water Mist Electric Fan Image as Brand:

The image of Crown Water Mist Electric Fan as a brand will be shaped as a value added and different from the products that are already available in the market. For this, the marketing efforts will be done to take a special and different position among the targeted customers.

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Marketing Mix:

Product Strategy:
In product strategy Crown Water Mist Electric Fan will be focusing on promoting its product which is according to the needs of our customer we will provide these specifications in our product that you did not find in other competitor products. We are also using latest CNC technology in the production of our product.

Concept Testing:
In concept testing we have conducted a questionnaire survey which was filled by a sample. In that questionnaire we asked them different questions related to our project and got positive feedback from our target market. This questionnaire helps to understand the concept behind launching the idea about Crown Water Mist Electric Fan and after analyzing the idea through the response of our survey that we get through this questionnaire we have found that people are ready to purchase such fans. We get the positive response through this questionnaire regarding the launching of Crown Water Mist Electric Fan.

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Price:
We will be using value based pricing strategy due to the following reasons. We are highly relying on the customer perception about our product, thus as much customer will value our product, the more price they will be charged. We are ranging from high to lower side, so we will be charging more for the elegant products and vice versa.

Place:
As this location best suits our idea. While keeping in mind our target market, we have decided Small industrial estate G.T Road, Gujrat Zip 50700 as the location for Crown Water Mist Electric Fan.

Channels of distribution:
Initially Crown Water Mist Electric Fan is operating from dealers and sale agents. Those dealers and agents will supply our product to retailers and end users. It will go for zero level channel of distribution. Crown Water Mist Electric Fan is using the following approach in this session

Promotion:
Creating Awareness about the reason for launching Crown Water Mist Electric Fan

Type of campaign:
Our campaign for Crown Water Mist Electric Fan will be product differentiation long with quality focusing the USP (unique selling proposition) which aims at showing that how the products of Crown Water Mist Electric Fan is better than that of other brands available in the market by focusing on the key attributes of the Crown Water Mist Electric Fan. As USP is only effective when it has something for the customers so its the right campaign format for the Crown Water Mist Electric Fan.

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We will promote our product by using following methods. Initially we shall give cash discount which consist on 5% to 15% depends on quantity purchased. We will be giving surprise coupons to our customers.

People:
The people at Crown Water Mist Electric Fan are characteristically trained to be Pleasant, Polite and Positive..

Process:

Purchase of Raw Material

Final assembling and distribution

Die -casting

Motor winding

Granding and finishing

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The order process at Crown Water Mist Electric Fan is primarily based on nature of our product.

Physical Evidence: a) Logo, Colors, Images:

At Crown Water Mist Electric Fan, we look forward to use colors in its logo and images; to project a a fan with mist technology. Crown Water Mist Electric Fan will use some bright and eye catching colors which truly depicts the features of product.

Demand Forecasting:
Different demand forecasting procedures will be adopted by Crown Water Mist Electric Fan depending upon the type of the available data for the forecasting. These are as follows: Consumer survey Detailed questionnaire analysis Observation basis Need analysis Being a start up firm Crown Water Mist Electric Fan does not have any past data, so it has used its consumer survey in 1st forecasting. According to the results of questionnaire, we have analyzed that people really love to have such product.

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Marketing Budget:
We have decided initial marketing budget Rs. 70, 0000.

Advertising and Promotion:

An ideal promotional and advertisement mix is that which is effective as well as economical. The advertisement and promotional tools that support each other are called the integrated marketing program. Promotional and advertisement entirely depends upon the Nature of product Nature of customers Nature of market Availability of funds

Advertising Strategy:
The advertising strategy that we opted for is the combination of Above the Line (ATL) and Below the Line activities (BTL).

Above the Line activities:

Under ATL we use print as well as digital media. It is planned to advertise in magazines, news papers for the awareness of household and businesses. Advertisements on cable TV will be run especially on channels having a large no. of viewership by i.e. GEO news, star plus (local Cable) etc.

Advertising Objectives:
The ultimate and the basic objective of the promotion and advertisement campaign are to make the customer to purchase the product or services but the purchase is the result of a long process of decision making. And to make the customer to purchase our products the first step is to grab the attention of the customer, to develop interest and desire to use the mist fans technology.

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The advertising objective initially is to create maximum awareness of this new fans technology. The higher the awareness and recall, the greater number of buyers we expect. To create strong, favorable and unique associations in the minds of the customers to facilitate the purchase decision. To achieve a high level of brand equity by having a distinct position in the minds of the customers. To pursue the customers to use the mist fans and to have a look at the different products and to evaluate it. To develop the interest of potential customers for MIST FANS To create customer loyalty and to maintain it

Campaign theme:
MIST FANS message strategy will base on the following points, The best fans technology to newly constructed houses and offices and other buildings Improvement in existing builds Supply of fans to retailers other business and services providers

Media planning:
The basic function of media planning is to determine whom we are approaching, what are our objectives. And on the basis of these two we decide a media category, Media Vehicle and a media mix.

Media vehicle: Print:

Jazba a local newspaper of Gujrat city Gujranwala Times Din Gujranwala Gujrat Times Daily Daak

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Digital:
Star Plus (Local Cable) Ten sport (local cable) Geo news (local cable)

Radio:
FM105 FM102 FM106.6 FM 92.7

Cable TV Ads:
Being operated in the local and a concentrated market our primary objective is to advertise locally. So we will advertise on cable TV especially during the commercial breaks in Star plus, Geo News and Ten sports because majority of the people who watch the TV, mostly watch these channels regularly.

Ads Message:
In designing messages for our cable adds we have a different strategy. As we are going to communicate our message to customers we have the different product for them so in the ads launching at the different channels we will emphasize at the different aspects of MIST FANS. While in the ads launching on cables different channels will be given preferences to household and suppliers, and retailers. But it doesnt mean that the each message will be entirely different but the middle part will be slightly different.

FM Radio:
Our second choice for advertisement is FM AWAZ 105,106.6 and Dil FM 102 because the trend has shifted back towards the Radio. Because of the use of Radio in mobile phone and the clarity of F.M radio. Majority of business and house hold people listen F.M. So it can be considered as another attractive tool which we will choose for advertisements.

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Local newspapers:
The local newspapers are another option that can be used to approach those customers who are interested in our fans. Newspapers will not be focused much more because it has not too much reach to the large number of target customers.

Outdoor and Support media:

In the recent phenomenon the use of billboards has become too much popular. From a multinational company to a local hospital almost everyone relies on this tool. Six billboards will be hired at the different location in the city the first in Airport road sailkot, and , second on Service GTS chowk and the third on Gujranwala Bypass and lari ada Hafizabad, Mandibahawaldin more chowk. Narowal nonar road. These billboards will be hired for a specific time period. Besides the outdoor advertisement as the supporting advertisement the posters and handouts will be used. The posters will be placed outside the colonies, new housing schemes, existing shops in populous areas and in the streets. Especial handouts will be designed for the visitors.

Billboards placements:

GTS Chowk Airport Road Sailkot Gujranwala bypass Lari ada Hafizabad Mandibahawaldin more chowk Narowal Nonar Road.

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Proper Budget Allocation:

Type of Activity

Duration (Months)

Cost (Rs.)

Digital Advertising(TV) Radio POP Material Newspapers Billboards Total

3 4

180000 80000 129000

2 2

80000 480000 949000

Pull Strategy:
All the above and following mentioned advertisement and promotional strategy will create a pull from customers end. The purpose is to generate high level of brand awareness and positive associations so to create brand and customer equity. The brand building issues will be addressed by directing our advertising efforts towards the customers and delivering to the promises made. The higher level of conformance and performance quality will add to the brand image thereby backing up the media endeavors.

Frequency of usage:
Cable TV ads will be on air during the prime time of Geo and ten sport plays and it would be 6 pm to 11 pm and during every commercial break our ad would be displayed. Ads in FM will be on air during most popular programs and would be repeated in these times daily. We will use Radio advertisement only for the first month of the business starting, and banners will be used in major and popular parts of the cities.

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Promotional Material:
X-Stand Banners Posters Flyers

a) Cost of POS is included in construction expense. b) Participation in trade fairs And Exhibitions N/A POP Material Activity Posters Flyers Creative charges Total Rate 12 4 Quantity 2,000 15,000 Cost of Activity 24,000 60,000 45,000 129000

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Billboards placement Plan:

Location GTS Chowk Airport Road Sailkot Gujranwala bypass Lari ada Hafizabad Mandibahawaldin more chowk Narowal Nonar Road. Total

Size 10*20 10*20 10*20 10*20

No. 1 1 1 1

Duration Start-End date 2 2 2 2 Apr-Sep Apr-Sep Apr-Sep Apr-June

Rate/month Total Cost 50,000 40,000 40,000 30,000 100,000 80,000 80,000 60,000

10*20

Apr-June

50,000

100,000

10*20

Apr-June

30,000

60,000 480,000

Below the line:

We plan to go for a lot of BTL activities and for these purpose retailers, real state agencies and whole sellers site BTL activity is a major source of advertising. We will send our representatives to arrange a small on site demonstration of our product and will communicate the theme of our product offering. Where we will tell the service providers how we plan to give products.

Public Relations:
Public relations will be established by conducting seminars on the need of construction activities and innovative product and making them aware about use of the product. Another way of Public Relations building will be to contact businesses, service providers and real state builders and highlighting upon them the purpose and vision of MIST FANS. This will help establishing awareness among customers and suppliers. Our team will try to develop long term relation dealers and customer, by following a few lines;
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By establishing customer database management Oversee services management operation Provide instant help to dealers and customer when they need. Oversee and provide guidance for the scheduling of all constructing and furnishing facilities and also including the developing of a price structure and the procedures to bill and collect all fees charged

Desired image in the market:

Pricing has a certain message to deliver about the product and the business at large. Crown Water Mist Electric Fan will position itself as a specialized Fans producer in the market. The target market has all group of income. So pricing strategy here becomes a tricky matter if considered as a mean to achieve a particular image in the minds of the customers. The lack of innovation and R&D in the fan industry customers will be capitalized upon and MIST FANS will surely be in a position to charge a premium price. Product Strategy: According to kotler any product and service is basically consists of three basic levels.Core product level, Actual level and augmented level. We divide our product into these three levels to describe its category, to differentiate it from that of the competitors and to make it more affordable for the customers and to create customer loyalty. Core benefit level. Our core objective or the core function of business is to provide new mist fans for customers. Actual product level. The actual features of our product differentiate it from that of the competitors. Augmented level. Dealing of the management with the customers.

Chapter references 1. http://www.einfopedia.com/per-capita-income-of-pakistan.php 2. www.forum.urduworld.com/109/gujrat-Pakistan-311454/

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3. http://www.indexmundi.com/pakistan/gdp_real_growth_rate.html 4. http://www.dailytimes.com.pk/default.asp?page=2010\02\11\story_11-2-2010_pg5_2 5. http://www.indexmundi.com/pakistan/demographics_profile.html (CIA World Fact book) http://www.tradingeconomics.com/pakistan/gdp-growth http://www.tradingeconomics.com/pakistan/interest-rate

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Chapter no 6:

Operational plan
Method of production and Production process detail:
SILVER STRIPS

DIE-CASTING DEPT.

GRINDING & FINISHING DEPT.

ELECTRIC SHEET CUTTING

MOTOR WINDING DEPT.

FLOWER MAKING

VARNISHING DEPT.

DYING SECTION PAINT SHOP

WIRING SECTION

ASSEMBLING WITH WATER MIST KIT

MINOR PARTS, WATER PUMP & GALLON

SECTION TESTING & INSPECTION

PACKING SECTION MAKING

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The operation of producing water mist electric fan is not more complicated its almost same as a regular electric fan manufacturing, The process starts from the raw material like Aluminum, Pig iron, Plastic, cooper these are the main item that used to producing electric fan. Die-casting is the first in whole process and aluminum and pig iron firstly die-casted than it converted into the required shapes. Molded die casted pieces send to the grinding and finishing department on the other hand electric steel sheet cut in to require pieces and make motor armature through stamping press and it also sent to the cooper winding department

In the end of this department complete motor assembled and send to the next department in which other parts of water mist fan is attach with it. Other parts include
1) Steel protection grill

2) Air flow blades 3) Pedestal rod 4) Stand 5) Water jet nozzle 6) Water mist kit (water pump and gallon included)

After assembling all part with the electric fan motor the water mist fan send to the paint shop After paint shop process water mist fan send to the testing and inspection department. After complete quality assurance it will send to the packing department for packing. After packing the finished goods stored.

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Plant and Machinery:

Table of machinery required and their Cost

Machine
CNC Die-casting Machine Kent CNC Grinding Machine CNC Motor Winding Machine Armature Varnishing Machine CNC Packing & Stamping Machine CNC Steel sheet cutting & molding machine CNC Lathe machine CNC Surface Grinding polishing machine Total purchase price

No. of machine
2

Rate (Rs)
2595000

Total (Rs)
5190000

733520

1467040

605500

1211000

692000

692000

1297500

1297500

1 2

1047105 865000

1047105 1730000

1124413 8960038

1124413 13759058

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Installation Summary Installation Cost CNC Die-casting Machine Kent CNC Grinding Machine CNC Motor Winding Machine Armature Varnishing Machine CNC Packing & Stamping Machine CNC Steel sheet cutting & molding machine CNC Lathe machine CNC Surface Grinding polishing machine Total cost of machinery with Installation 73297

51900

43250

155000

75000

125000 250000

83000

14615505

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CNC Die-Costing:
This machine requires for process of die-cost the main body of electric fan.

CNC Motor Winding Machine:

Machine use for motor winding and it has a great accuracy in it functions and helpful in large production.

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CNC Surface grinding machine:

This machine is helpful to make a quality in motor of electric fan by grinding the surface of armature and other parts.

Armature Varnish Machine:

Manual varnishing process is harmful and there is large no. of accident case which happens through manual varnishing so that this machine is a great invention and very much use full for our production process.

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Steel sheet straightening and cutting machine:

Electric Sheet is a main item for electric motor so its straightening and cutting process done with this machine

CNC-Grinding-Machine:
For grinding different tools and little parts of motor body done through this machine

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Stamping Press Machine:

For combining to rotor armature of eclectic fan body this machine is highly recommended for quality work.

CNC Lathe Machine:

This is multipurpose machine, use for making different tools of other machines.
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Availability of Qualified Labor Pool:

Qualified labor pool is compulsory for the proper running of our business. Labor pool required for our business for different operations will include qualified and experienced managers for every department, technicians, electrician, fitter, painter, winder, supervisor, Technician, helper, guard, and sweepers etc. qualified labor will be preferred and Qualification criteria for labor will be defined by our CEO/HR department. Experienced technicians and electrician will be our major strength and consideration.

Management Team:
Crown Water Mist Electric Fan has quite an innovative and experienced management team in their related fields. Their names and qualifications are described below

Ali Ahmad (CEO/HR)

Ali Ahmad is the CEO of Crown water mist electric fan Qualification: CA from Institute of Chartered Accountant, Karachi Pakistan. Experience: Five years experience in running fan manufacturing of electric fan.

Yasir Arfat (Marketing Manager)

Yasir Arfat is marketing manager of Crown Water mist electric fan. Qualification: Masters in Business Administration with marketing from Comsat Lahore. Experience: Has 3 year experience of as a brand ambassador GN industry

Usman Ejaz (Finance Manager)

Usman Ejaz is Finance manager of Crown water mist electric fan. Qualification: Masters in commerce from University of Punjab Lahore campus

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Experience: Finance Manager in Dawlance Group of Companies for 2 years.

Tufail Ahmed (Operation and production manager)

Tufail Ahmed is operation and production manager of crown water mist electric fan. Qualification: Masters in commerce with specialization in accountancy. Experience: Operation and production manager in Josh Engineering Company from Two years.

Fazal Mahmood Tahir (Purchase and Quality control Manager)

Fazal Mahmood Tahir is Purchase and Quality Control Manager of Crown water mist electric fan. Qualification: Masters in commerce from University of Punjab, Lahore. Experience: Two years experience in procurement and quality control in rice mill.

Technician
Crown water mist electric fan needs 6 persons Required Qualification: He must have Diploma in Technology from recognized Institute. Required Experience: 3-4 years experience as a technician in any manufacturing firm

Electrician
Crown water mist electric fan needs 6 people for performing daily operations. Qualification: He must have a diploma in electrical Technology from recognized institute. Experience: 3-4 years

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Supervisor
Crown water mist electric fan need 3 people for supervision of labour. Qualification: intermediate Experience: 3-4 years

Skilled labour
Crown water mist electric fan need 10 persons which include fitter, winder, painter. Qualification: should have training in relevant field Experience: 2 years

Helper :
Crown water mist electric fan need 5 helper for its operations Qualification: Minimum Metric, training to inventory unloading and uploading

Guards :
Crown water mist electric fan need 2 guard for its security Qualification: Minimum Metric, training to use weapons and retired army men are preferred. Experience: 1 year.

Sweeper:
Crown water mist electric fan needs only one sweeper

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Qualification: Not specific Experience: Not specific

BUSINESS PARTNERSHIPS

Business Partnerships:
Crown water mist electric fan manufacturing is a partnership business, which is registered under partnership act of 1932.

Types Of Partnership
Crown water mist electric fan manufacturing is a partnership business having 5 partners: Partners have invested in the following ratio: Ali Ahmed Yasir Arfat Usman Ejaz Tufail Ahmed Fazal Mahmood Tahir 20% 20% 20% 20% 20%

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 Purposes of Partnership Business

Crown water mist electric fan manufacturing is a business launch by five partners who are experts in their specialized fields. Crown water mist electric fan manufacturing business partners are;
Ali Ahmed Yasir Arfat Usman Ejaz Tufail Ahmed Fazal Mahmood Tahir

Crown water mist electric fan manufacturing is the idea of its active partners without their mutual efforts it was impossible to start up. All the partners are contributing to the success of this business. Active partners are also involved in financial, human resource, marketing, accounts, and other operational activities to make it run more efficiently. Crown water mist electric fan manufacturing do not have any sort of partnership with anyone except discussed above.

Quality Control
Quality is a foremost part of any product or service. For the accomplishment of the objectives of any business quality control is imperative. As for as our business is concerned quality is the focus of our business, Turnaround time is the most important factor to measure whether or not we are satisfying with quality product to our customers. Pakistan is a manufacturer of good quality fans and certified with different International acceptable standards like ISO 9001, CE etc, our company is also a certified with different standard of ISOs and CE, energy star to ensure the both inside and out side quality of our product to the customer. Quality of products and services will be controlled by all of its partners.

Total Quality Management:

We are trying to provide the assurance of quality to the customer proactively rather to be reactive. Crown water mist electric fan manufacturing is using Total Quality Improvement and

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Management approach in which every employee of our business will be involved in quality control to provide its customers the best quality products through which customer can feel comfort.

Clean Environment, Safe product, Technical Tools and Procedures:

The product of our business will be made in a clean environment to make them safe to its customers. Along with we will use the technical tools and better procedures in the manufacturing of our product. Whole environment of our manufacturing entity will always be keep safe and healthier for employees.

Use of Raw Material:

Our business will get his whole raw material i.e Pig Iron, aluminum, cooper wire, Plastic of a high grade material and use it according to the industry standard.

Responsibility of Quality:
Quality of product is a responsibility of its five active members, who will confirm it through different ways continuously. Whether the product are of desired quality and standards or not. In this regard customers will be highly appreciated.

Customer Support Strategies:

We provide the product to the customer according to there need and their expectations. We are committed to provide excellent products to our customers. Quick response will be made sure and monitored regularly.

Customers are valuable to Crown water mist electric fan and thus Crown water mist electric fan will use the best strategies to gain customers interest and loyalty.

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Services:
Crown water mist electric fan is using the immense ways to satisfy its customers. When they purchase the product of Crown water mist electric fan they will get the lifetime guarantee, and after sale service.

Feedbacks:
Customers will be given a comment card in the pack of electric fan to get feedback from them. Their comments and suggestions will be highly appreciated.

Record Keeping:
Crown water mist electric fan will keep the record of its regular dealers, by providing them a card on which they can fill their names, contact numbers and business addresses. Operational manager will enter this information in the computer. It will help us to share our new products with our regular dealers.

Societal Ethical and Consumer Issues:

We are going to discuss the societal, ethical and consumer issues separately to clarify our strategies towards each of them.

Societal Responsibility Approaches:

We are discussing our responsibility approaches towards different sections of society as below:

Towards general public:

Community involvement Hiring unemployed Proper disposal of wasted materials Contribution to nonprofit making organizations

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Towards employees :
To ample internal communication Employee empowerment allowed Employee training about social issues

Towards owners:
Honest reporting and financial disclosure Publicity about company activities Detailed explanation of social issues Earning a reasonable profit

Corporate Social Responsibility:

Crown water mist electric fan is providing a healthy and people friendly environment to its customers, employees and surrounding areas. The cleanliness and safety will be made sure for everyone. The waste will be properly discarded. The Crown water mist electric fan accepts social responsibility of not harming anyone or natural environment.

Customer Support Obligations:

Crown water mist electric fans customer support obligations are: 1. in time production of customers orders. 2. Full satisfaction by fulfilling the required needs. 3. Good dealing with the customers in healthy environment 4. Fully accommodate the customers in all respects.

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Chapter no: 7 Financial Plan

Capital requirement for the next three to five years:

The purpose of the financial plan is to estimate start-up and ongoing costs; identify revenue streams; and forecast net cash flow and profits. The venture will be funded partners through paid-in capital provided by the owners and debt will be taken from the bank.

Financial Plan ensure that there are adequate funds available to acquire the resources needed to help the organization achieve its objective, ensure costs are controlled, ensure adequate cash flow, establish and control profitability levels .One of the major roles of the finance department is to identify appropriate financial information prior to communicating this information to managers and decision-makers, in order that they may make informed judgments and decisions. The three sole functions of the finance Department are to provide strategic financial support for business and operational planning and to provide day-to-day financial services to the investor, its departments. Meet external and internal financial reporting requirements. As Crown water mist electric fan is a start up firm so it needs high capital investment to recover its expenses like machinery expense, land and building, cost of production etc. for next three to five years. Thus Crown water mist electric fan initial capital investment is PKR. 8, 00 00,000

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The cost of project is as follow:

COST OF THE PROJECT Building land and Civil Work Plant and Machinery( Include Installation ) Furniture and fixture vehicles Raw- Material Generator Air Conditioner

(Rs) 35000000 14615505 476000 1775000 14300000 2500000 650000

TOTAL 35000000 14615505 476000 1775000 14300000 2500000 650000

Tools, Parts and Equipment Pre-production Expenses TOTAL FIXED COST: - Initial Net Working Capital TOTAL COST OF THE PROJECT:

3859189 3859189 2235000 75051198 4589306 80000000 *********** 2235000 75051198 4589306 80000000 **********

MEANS OF FINANCE Debt Faysal bank loan 14.5% TOTAL DEBT: Equity 48000000 48000000 48000000 48000000

Paid-up Capital (Sponsors) TOTAL EQUITY

32000000 32000000 32000000 32000000

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TOTAL DEBT & EQUITY

80000000

80000000

********** ***********

The means of finance and their ratio is as follow:

Source

Ratio

Amount (Rs)

Bank @14.5% Equity Total

60% 40% 100%

4,80,00000 3,20,00000 8,000,0000

All amounts are in the Local Currency (In Rupees). The sponsors stake is 40%.

Sources of Fund:

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Crown water mist electric fan has 5 partners who are investing the 40% equity of the capital requirement. Five partners of the Crown water mist electric fan contributed in the business. Following are the details of the finance provided by each partner.

Name Ali Ahmad Yasir Arfat Usman Ejaz Tufail Ahmed Fazal Mahmood Tahir

Percentage 20% 20% 20% 20% 20%

Contribution Rs 64,00,000 64,00,000 64,00,000 64,00,000 64,00,000

Uses of Funds:
Funds acquired from the above mentioned source will be used to purchase the assets, machinery installation, and raw material of Crown water mist electric fan. Following are the details of the costs incurred on starting up the business.

ESTIMATED INITIAL NET WORKING CAPITAL

CURRENT ASSETS Cash Accounts Receivable @5% of sales Raw materials Finished Goods Inventory 2.5% of production Stores & Spares

(Rs) 3557803 2975000 13101000 2900000 3062999

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Advances & deposits Total CURRENT LIABILITIES Accounts Payable Accrued Expenses Interest on Bank Borrowings from Faysal bank Paid Bank loan installment

1500000 27096802

5075000 2472496 6960000 8000000

INITIAL NET WORKING CAPITAL

4589306

Important Assumptions:
Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are: We assume the rate of Constant growth in the Fan Industry. We assume that climate changes to warm and fan demand increases. We assume that account receivables are 2.5% of total sale in each year. We assume that account payable is 5% of cost of goods sold in each year. We Assume efficiency moves 25% grow in first 3 year of business. We assume a rate of sale is 17.24% of Cost.
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Depreciation is according to the Straight Line Method. Preliminary Expenses will be written off in five years. We will pay our loan in 6 installments of Rs. 8000000 each plus Interest on remaining amount, Interest rate is 14.5% {12% Karachi interbank offered rates (KIBOR) + bank spread is 2.5% annually }

. Preliminary Expenses will be written off in five years in equal amounts. Operating Expenses will be 1% of annual Sale. We assume Tax Rate is a 45% on Pre-Tax Profit W assume per day production is 150 fans (efficiency 50%) and company work in a year 300 days so annual production of 1st year 45000 and in 2nd year efficiency 50% to 75% and per day production move from 150 to 225 fan per day and annual production is 67500 fans, In 3rd year efficiency move from 75% to 100% and per day production move from 225 to 300 fans per day and annual production of 3rd year 90000 fans. We assume deprecation rate for plant and machinery is 10%, for furniture and fixture rate is 5% vehicle rate 20% and building rate is 5% annually. We assume closing inventory at the end of year first is 5000 fan, at the end of 2nd year closing inventory is 4000 fan, at the end of 3rd year 2700 fan.

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PROJECTED

INCOME

STATEMENTS

ANNEXURE
( Rs ) I 50% II 75% III 100%

Detailing
For the year ending Dec. 31 Efficiency Assumed :

SALES COST OF GOODS SOLD : -Depreciation

136000000 116000000` 3590350

232900000 198650000 3590350

310420000 264770000 3590350

GROSS

PROFIT

16409650

30659650

42059650

OPERATING EXPENSES - Admin & General Expenses Total Operating Expenses 1190000 1190000 2329000 2329000 3104200 3104200

OPERATING PROFIT NON OPERATING EXPENSES Bank borrowing@ 14.5%. Amortization of preliminary exp. at 5 years Sub-Total PRE-TAX PROFIT 45%

15219650

28330650

38955450

6960000 447000 7407000 7812650 3515693 4296957 0 4296957

6960000 447000 7407000 20923650 9415643 11508007 0 11508007

5800000 447000 6247000 32708450 14718803 17989647 0 17989647

Provision for Taxes NET Dividend RETAINED EARNINGS PROFIT

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Projected Cash flows Statement Crown water mist electric fan Opening Balance of Cash: Paid up capital (Sponsors) Faysal Bank Loan
Total Source: Less: Investment in fixed assets Preliminary expenses amortized in 5 years Current Assets Total Application of Fund Surplus

Year 1

Year 2

Year 3

32000000 48000000 80000000 (51866505) (2235000) (12062999) (66164504) 13835496 15219650 3590350 1788000 20598000 28330650 3590350 1341000 33262000 38955450 3590350 894000 43439800 3557803 1779459

Operating Profit Add Depreciation Add Write-Off Preliminary expense in 5 years Cash Flows Before Working Capital Changes Operating Activities: Less: Inventory Less: Receivable Add: Creditors Cash Flows Generated from Operations Less: Interest paid Less: Tax paid Cash Flows From operating Activities Investing Activities: Increase in assets Cash flows from Investing activities Page Financing Activity:
91

(14500000) (2975000) 5075000 8198000 (6960000) (3515693) (2277693)

2900000 (5822500) 4857500 35197000 (6960000) (9415643) 18821357

3770000 (1938000) 3306000 48577800 (5800000) (14718803) 28058997

0 (2277693)

(9412201) 10473809

(4397593) 23661404

Repayment of loan Cash transferred to Contingencies Reserves Drawing Cash flows from Financing Activities Cash Flows Generated During the Years Cash & Cash Equivalents: Opening Cash Balance Add: Cash Flows Generated During the Year Ending Cash Balance

(8000000) 0 0 (8000000) (10277693)

(8000000) 0 (3187500) (11187500) (1778344)

(8000000) (3500000) (7000000) (18500000) 5161404

13835496 (10277693) 3557803

3557803 (1778344) 1779459

1779459 5161404 6940863

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Page 93

PROJECTED B A L A N C E Crown Water Mist Electric Fan ESTIMATED As on Dec. 31 ASSETS Cash Accounts Receivables Inventory: Finished Goods Inventory Raw Material Inventory Tools, Stores & Spares Advances & Deposits

SHEETS

BALANCE

SHEETS I II III

Rs.

3557803 2975000

1779459 5822500

6940863 7760500

14500000 13101000 3062999 1500000

11600000 1,7287500 5288700 4500000

7830000 1,9213225 6560568 5700000

Total Current Assets Other assets Fixed Assets at cost Less: Accumulated Depreciation Net Fixed Assets: Preliminary Expenses:

38696802 0 51866505 3590350 48276155 447000

46278159 0 51866505 7180700 44685805 447000

54005156 0 51866505 10771050 41095455 447000

Generator

2500000

2500000

2500000

Air conditioner Total Assets:

Page 94

650000 90569957 ======

650000 94560964 ======

650000 98697611 ======

LIABILITIES & EQUITY Current Liabilities - Accounts Payable - Accrued Expenses - Bank Borrowings Total Current Liabilities: Other liabilities Long-term Liabilities Faysal Bank loan Less: Installment paid Total Long-term Liabilities Contingencies Reserve EQUITY - Paid-up Capital (Sponsors) 32000000 32000000 32000000 48000000 (8000000) 40000000 0 40000000 (8000000) 32000000 0 32000000 (8000000) 24000000 3500000 5075000 2238000 6960000 14273000 0 9932500 5347957 6960000 22240457 0 13238500 9169464 5800000 28207964 0

- Un-appropriated Profit

4296957 36296957

11508007 43508007 (3187500) 40320507

17989647 49989647 (7000000) 42989647

Less: Drawing Total Equity:

0 36296957

Total Liabilities & Equity:

90569957 ======

94560964 ======

98697611 ======

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Product Cost Sheet:

Per Unit Cost:

Model PK-1000
Sr. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Water Mist power Particular Price 250 150 90 40 15 100 25 20 150 500 30 30 50 15 30 150 35 5 150 10 10 10 10 45 35 65 10 20 10 10 30

Roter stator 4/3/4x1/1/4 Body plate Blade set Copline Speed Control device Standing Rod steel Bearing set (1+1) Spring washal, verm set, choke machinal Gear box Enamel Copper wire Lock nut Roter making cost Poly Plastic Bag+packing paper+doori Check nut + Handle Capaster stand foot (pig iron wirth plastic tub Nakka Screws Different types Guard (plastic) Name plate ( platic golden, silver ) Grease +oil etc Leather head + sleving Cotton tape +warnush doori Wire two core + single core Paint, filer, petrol, reeg maar Dome) Kashte + keem Wastage Packing paper + doori + covering paper Loading unloading expenses Office expenses Electricity expense

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32 33 34 35 36 37 38 39 40 41

Publicity expenses Other expenses Labour expenses Vehicle Expenses Labour Welfare Money collecting expense Water mist Kit (China) Blade Cap

10 10 10 10 10 20 700 30

Taxes all kinds 42 Total cost 43 Profit 44 Sales Price

2900 500 3400

Salaries Structure of company:

Descriptions
Designation CEO Finance Manager Marketing Manager Operations & Production Manager Purchase & Quality Control Manager Supervisors (03 x 15000) Technician ( 06* 12000) Security Guard(02*7000) Skilled Labour 10*10000 Helpers 05*5000 Sweepers 01 Electrician (06*9000) Salary/Month 40000 30000 30000 30000 30000 45000 72000 14000 100000 25000 7000 54000 477000 Total Salaries (Rs.)

1st Year
Rs.
480000 360000 360000 360000 360000 540000 864000 168000 1200000 300000 84000 648000 5724000

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Plant and Machinery Cost : Table of machinery Cost

Machine CNC Die-casting Machine Kent CNC Grinding Machine CNC Motor Winding Machine Armature Varnishing Machine CNC Packing & Stamping Machine CNC Steel sheet cutting & molding machine CNC Lathe machine CNC Surface Grinding polishing machine Total purchase price

No. of machine 2 2 2 1

Rate (Rs) 2595000 733520 605500 692000

Total (Rs) 5190000 1467040 1211000 692000

1297500

1297500

1 2

1047105 865000

1047105 1730000

1124413 8960038

1124413 13759058

Installation Summary Installation Cost CNC Die-casting Machine Kent CNC Grinding Machine CNC Motor Winding Machine Armature Varnishing Machine CNC Packing & Stamping Machine CNC Steel sheet cutting & molding machine CNC Lathe machine 73297 51900 43250 155000

75000

125000 250000

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CNC Surface Grinding polishing machine Total cost of machinery with Installation

83000

14615505

Chapter no.9
CRITICAL RISK FACTOR
No organization around the globe operates in the vacuum rather it works in an environment which is impacted by the activities of the organization and in turn effects the operations of the organization. Like other organizations operating in this world our organization also faces several risks of micro and macro nature. The description of such risks faced by our organization from micro and macro environment in which it is operates are:

Management Risks
Management risks are caused by negligence or due to wrong decisions or unqualified and unskilled management team and staff etc.

Some of the reasons for such risks are\

Un-Estimated demand and forecasting decision by the management Future expansion of risks Incorrect Time Estimation, and consequently an incorrect schedule Improper Resource Allocation Underutilization of Resources

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Experienced staff are taken by the competitors Lack of commitment by the top management of the business Inexperienced staff hired by the management to run the operations of the business Incorrect decision making Failure to reach at consensus regarding any critical issue of the business etc.etc.

Marketing Risks:
Marketing is the part of our business that helps in transforms production activities into financial returns. However, many unanticipated forces, such as weather, market trends and government actions, can lead to uncertainty of costs, prices and demand in the market and, therefore, cause marketing risks. Similarly, our business faces following marketing risks like price risk and market availability. Price risk is related to the volatility of product or input prices. Market availability risk is related to loss of market access due to competition or loss of a major customer, and loss of marketing power due to the small size of sellers relative to buyers.

Operating Risks:
These are risks which are associated with the day-to-day operational activities of the our business;

These could be due to any of the below reasons

Improper Process Implementation employees injuries Damages of Equipment during operations Lack of conflict resolution / team spirit Lack of clarity in responsibilities Breakdown in communications Lack of sufficient training

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Inadequate quality of raw material

Financial Risks:
Financial risks are associated with the financial structure of our business, the transactions our business makes and the financial systems you already have in place. Financial risks also exist when there is unfavorable difference between forecasted and actual budget. Following are the monetary risks which are associated with budget overruns. Some of the reasons for such risks are

Improper Budget Estimation Improper recording of transactions. Delay payment from Debtor Default by Debtor Obsolesce or Decrease in the value of our business valuable assets Cost Overruns due to underutilization of resources Expansion of Project Scope Improper Tracking of Finances Increase in interest rate Further, unexpected expansion in business may lead to budget overruns as such expansions may not have been factored in to the original estimates.

Delay of daily business activities may also have certain penalty costs associated with it.

Intellectual Property Infringement

Intellectual Property theft is top risk to our business, our intellectual property include our business valuable management, our experienced staff, Trade secret, Trade Mark, copy right, our dealer lists etc.

Other Risks as Appropriate

Economic Risk Economic risk are also faced by our business, such risk are caused by increases in inflation rate, recession, depression in economy etc. Physical Risk
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Such risks caused by physical environment such as earthquake, Drought, flood, natural calamities etc. Project risk When our business next big initiative fails Customer Risk When customers abandon our services Transition Risk When unexpected changes in technology or business design undermine our business Brand Risk When our brand becomes irrelevant or unappealing Business/Industry Risk When our business/ industry becomes a no-profit zone Stagnation Risk When growth grinds to a halt

Other Unavoidable Risks

All the risks described above are those which can be anticipated to a certain extent and planned for in advance. However there are certain risks which are unavoidable in nature. The reasons for such unavoidable risks are described below.

Changes in government policy Obsolescence of our product/services due to new technology from a rival company Loss of contracts due to changes at customers end

Remarks Pages
Although these risks are broadly unavoidable, an organization may anticipate and thereby reduce the impact of such risks. In the very similar fashion we will be taking different things into consideration and also by taking the following precautionary measures. Such considerations will be included in our priority list:

keeping abreast with changes in government policy

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monitoring the competition catering to the needs of the customer and ensuring customer satisfaction keeping up our business operations according to the emerging needs and wants of the customers

updating technological changes

Different precautionary measures that can be taken to avoid or mitigate the impact of different risks are: Management of the business will ensure to run the operations of the business in compliance with the governmental rules and regulations to get the favor of the local, provincial and federal government. Similarly management will conduct continual market survey to abreast with the changing demands of our customers and also competitor intelligence technique will go a long way in helping us to know about the existing and changing strategies of the competitor . Insurance will be another tool for the management of the business to mitigate the impact of physical and mental loss to the personnel during operations and physical loss to property and other different assets of the business. Management will ensure high level of commitment in managing the operations of the business and staff will be selected on the basis of the fines they possess etc.etc.

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Appendix Questionnaire

University of Gujrat
Department of Commerce & Accountancy Evening program
Interview Schedule

MGT-410 Business Project

Purpose of Questionnaire:
This is Business Needs Assessment Survey to recognize the potential of Electric Fan Manufacturing Business in Pakistan and the need of Electric fan in our consumer market for home and office use only Business Project Supervisor: Sir Waseem Ullah Students: Ali Ahmad, Fazal Mehamod Tahir, Tufail Ahmed, Usman Ejaz, Yasir Arfat Serial No: _____________ Dear Respondent _________ Introductory Remarks We are students of M.Com. Presently we are doing Business Project MGT-410 of 3 Credit hrs for the completion of Masters Degree in Commerce. I need to collect information from your goodself on the topic of our business project which is the Electric Fan Manufacturing Business" You have been chosen as a respondent through random sampling procedure. I assure your information will be kept confidential and it will be used only for the Business Project purpose. Date: ____________________

Demographic profile 1. Name : _______________ 2. Age : _________ 3. Gender:

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Male

Female

Q# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Questions

Strongly Agree

Agree

Disagree

Strongly Disagree

Do you think there should be Electric fan in home or office? Do you think human life sustain without electric fan in a hot summer season?
Do you think electric fan reduce mosquito bites at night and u feel safe from many diseases or illness

O O O O O O O O O O O O O O O O O

O O O O O O O O O O O O O O O O O

O O O O O O O O O O O O O O O O O

O O O O O O O O O O O O O O O O O

Do you think it is economical to purchase? Do u think the Pakistani manufactured electric fan provide better air flow than Chinese manufactured electric fan? Do you think electric fan is a life time product? Do you think electric fan clean your room air through the exhaust fan air inflow and out flow option? Do you think electric fan is the basic need in hot summer season regions like Pakistan? Do you think there should be hi-tech electric fans? Do you think there should be only low-tech simple air flow fans? Do you think there is any Risk of Electric fan for consumer? Do you think electric fan helps to reduce the temperature of other devices? (refrigerator compressor temperature) Do think the fan provide cool air and economical through the use of Water Room Cooler as Compare to Air Conditioner? Do you think the electric fan business reduce the unemployment rate? Do you think electric fan is affordable for all classes of our society? Do you think electric fan have a competitive advantage over other electric devices (room cooler, cool wavier) Do you think electric fan manufacturing is the profitable sector in Pakistani electric industry

Page 105

Pictures:
Water Pump

Water Pump used in Water mist Electric Fan Pump Specification Model: PK-0002 Water pump: Size: 123 * 108 * 125mm Technical parameters: Voltage: 230V/120V Frequency: 50Hz/60Hz Power: 35W Flow: 1100L / h Head: 250 cm

Page 106

Model:Pk-0001 Water mist system kit: By forcing water through Centrifugal at high enough Rotation speed , a micro-fine mist is created, drifts in the air and then almost instantly evaporates. This evaporation process actually "uses" heat from the air, and the result is dramatic "flash-cooling" of the surrounding space. When the mist is blown with fans, the evaporative cooling happens quicker and the wind itself is cooled as well. You were feeling the evaporative cooling of water from your skin, combined with the convective cooling of wind. This is the effect of misting fans

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Temperature Reduction, Area Coverage and water Drop size Sketch

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