Business Plan

Submitted By:

Shahid Nadeem

(RMBA Fall 12-025)

Submitted To:

Prof. Javeed Nayyar

1

Acknowledgement

I have the pearl of my eyes to admire blessing of compensate and omnipotent because words are bound,

knowledge is limited and time is short to express His dignity. It is the one of infinite blessings of

Almighty ALLAH that He bestowed me with potential and ability to complete this report and make the

material contribution toward the deep oceans of knowledge.

First avail this opportunity I bow my head before ALLAH Almighty in humility who give me the wisdom

and Perseverance to complete for completing this piece of report.

I invoke peace for Holy prophet Muhammad (P.B.U.H) who is forever torch. I feel highly privilege to

ascribe the most and ever burning flame of my gratitude and deep scene of devotion to the

Prof. Javeed Nayyar who taught us the Entrepreneurship with heart and also give guideline in this report.

April, 2014

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Table of Contents Executive Summary............................................................................................................................4

IDENTITY OF THE BUSINES ..................................................................................................................5

Introduction ...................................................................................................................................5

Names............................................................................................................................................6

History ...........................................................................................................................................7

Proposed Mission Statement ...........................................................................................................9

Proposed Vision Statement .............................................................................................................9

Legal Identity ..................................................................................................................................9

Professional Advisors ......................................................................................................................9

Marketing Mix ................................................................................................................................. 10

Product ........................................................................................................................................ 11

Price ............................................................................................................................................ 11

Place ............................................................................................................................................ 12

Promotion .................................................................................................................................... 14

Key Success Factors .......................................................................................................................... 15

Key Suppliers ................................................................................................................................... 15

Market and Customers ..................................................................................................................... 16

SWOT Analysis ................................................................................................................................. 17

Strength ....................................................................................................................................... 18

Weakness..................................................................................................................................... 18

Opportunities ............................................................................................................................... 19

Threats......................................................................................................................................... 19

Strategic Direction ........................................................................................................................... 20

General Objectives........................................................................................................................ 20

Specific Objectives ........................................................................................................................ 20

Financial Policies........................................................................................................................... 20

Management Policies .................................................................................................................... 21

Marketing Policies ........................................................................................................................ 21

Financial Analysis ............................................................................................................................. 22

A1. Start up Requirements ............................................................................................................ 22

3

A2. Start up Funding ..................................................................................................................... 23

A3. Income per day and Month...................................................................................................... 24

A4. Profit and Loss Account (projected).......................................................................................... 26

4

Executive Summary

The proposed feasibility report focuses on an introduction to fashion of Pakistan which has made

quite a lot progress in just a few years. Ten to fifteen years now, this industry was still unknown

to actually exist to the masses. Later with formation of fashion council and educational centers

under the enthusiastic few who wanted to make difference and promulgate this very institution of

fashion, did the very fashion industry took its concrete contour from the old tailor culture that

formerly existed. Today it is one of the most progressing industries in country.

The fashion industry too, is influenced by external forces be they social, political, economic,

technological or even competitive, which serve as a main driver foe this industry. Moreover,

relation with stakeholders-mainly supplier distributers and customers, and the strength and width

of its competitors also define activates in the business. However, the relative strength of the

impact of these external factors on the industry varies and is computed with analytical tools like

PEST analysis.

Nonetheless, fashion industry assures new arenas of growth and development, new opportunities

for employment. This industry promises a different national projection that is serene and

contemporary.

5

IDENTITY OF THE BUSINES

Introduction

I want to start the business of Jeans Pants; most Fashion Jeans manufacturers in Asia produce

jeans following their customer's specifications. Be it from samples, from patterns or from

sketches and images, in 98% of the cases they should be able to supply their customers with

the jeans they had in mind, on a first try.

Different styles of Jean are; Boot cut jeans are the perfect cut for any guy hoping to look

fashionable without looking outrageous. This slim cut fits closely (but not tightly) with a

slight flare towards the leg opening. Boot cut jeans make sense for most body shapes, too,

because they balance the body well. Relaxed, which are loosely cut from waist to leg

opening, are great for heavier men. The skinny jeans club is fairly exclusive, as this ultra-

tight fitting cut can make average-to-heavy body types look even larger. This cut should be

reserved for the twiggy body shape, which allows skinny jeans to flatter a thin figure. Slim-fit

jeans, is tapered in a similar style to skinny jeans but not to the form-fitting extreme.

With slim-fit jeans, you get the best of both worlds: fashion-forward looks and comfort.

Straight-leg jeans are the most common cut you'll find. Neither tapered nor excessively loose,

this conservative style is ideal for those who want their jeans to be simple and classic. High-

waisted jeans are a terrific choice for heavier men with fuller stomachs. The rise is enough to

conceal the extra pounds that would be exposed in low- and medium-rise jeans.

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Names

The name of the business and the people involved in business are as follows

Shop Name

NEXGEN JEANS

Trading Names

o Al Raza Garments, New Alamgir Market, Lahore

o Ambition Enterprises, Model Town, Lahore

o Aslam Garments, New Anarkali, Lahore

o Crest Garments International (Pvt) Ltd, Ferozpur Road, Lahore

Manager/Owner

o Shahid Nadeem

7

History

The term "jeans" refers to a particular style of pants, called "blue jeans" and invented by Jacob

Davis and Levi Strauss in 1873. Starting in the 1950s, jeans, originally designed for cowboys and

miners, became popular among teenagers, especially members of the greaser subculture. Historic

brands include Levi's, Lee, and Wrangler. Jeans come in various fits, including skinny, tapered,

slim, straight, boot cut, narrow bottom, low waist, anti-fit, and flare.

Jeans are now a very popular article of casual dress around the world. They come in many styles

and colors; however, blue jeans are particularly identified with American culture, especially the

American Old West. North America accounts for 39% of global purchases for jeans, followed by

Western Europe at 20%, Japan and Korea at 10% and the rest of the world at 31%. Americans

spent more than US$14 billion on jeans in 2004 and US$15 billion in 2005. Americans bought

US$13.8 billion of men's and women's jeans in the year which ended April 30, 2011, according

to market-research firm NPD Group.

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Jeans were introduced to the USSR in 1957, during the World Festival of Youth and Students.

Moscow and Leningrad were the first cities where jeans showed up, appearing before any

foreign students or tourists came along. (These two capitals have always been visited more often

by foreign delegations.) From here, jeans appeared in some port cities, such as Odessa and

Kaliningrad. It was in these cities that jeans began to appear in 1964 for the first time. In the

same timeframe, jeans started being mentioned in Vasily Aksenov's and Evgeny Evtushenko's

works. In 1962 during Khrushchev's famous meeting with some creative intellectuals,

Voznesensky gained some notoriety because he came to the meeting in jeans.

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Proposed Mission Statement

“To seek profitable and responsible commercial success through selling jeans for both men’s and

women’s”

Proposed Vision Statement

My vision is to one day become a brand so strong that it is mentioned around every corner. With

best marketing strategies and achieving customer satisfaction along socially responsible

activities, I hope to strive for excellence and beyond in the field of garments in Pakistan

Legal Identity

The NEXGEN Jeans would be solely owned by Shahid Nadeem and would thus be a sole

Proprietorship. The initial cost of opening up NEXGEN Jeans is Rs. 20,000 pkr which is taken as

Loan.

Professional Advisors

The professional Advisor is Sir javeed Nayyar from which the loan will be taken for the

investment in the project.

10

Marketing Mix

Marketing mix is the balancing and managing of product, price, promotion and distribution or

Place decisions, tactics and strategies. It is often associated with the four P’s; Product, Place

Price and Promotion

It is a business tool that is use in marketing by the marketers. It is often crucial when determining

a product or brand’s offer.

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Product

My product is Jeans for both boys and girls. Jeans are widely used all over the globe. In Pakistan

the trend of wearing Jeans among both genders is at peak. It is use in seasons, winter as well as

summer. My product has variety and is innovative; it is in sizes and is both for male and female.

It is also available in different styles. The young generation has strong liking of Jeans as it is

affordable and is easy to use.

Price

Price of Jeans range from Rs 700/- to Rs 2000/- approximate. In a country like Pakistan where

inflation rate is very high people look for cheaper opportunity. The best thing about my product

is that I am buying it at a rate of Rs 300/- per Jeans and determine to sell it at Rs 700/- per Jeans.

I will have to pay Rs 6000/- to the shopkeeper where I will display my product per month.

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Place

I select the place for my shop The University of Punjab Lahore near boy’s hostels STC (student

teacher corner) new campus. The purpose of selecting The University of Punjab is that because

there is large strength of the students and I know the liking trend of the students and their buying

habits. I know the opportunities which I can avail by starting my business here. There are 18

boys and 10 girls’ hostels and the strength of students in hostels is 16000 to 17000 approximate.

There is also a housing facilities include 89 houses for teachers and University officers and 249

houses for junior staff of the University. About 40 houses and 80 single accommodations are

available in the various student hostels that are occupied by Wardens.

The University of the Punjab established in 1882 at Lahore, It is the largest and the oldest seat of

higher learning in Pakistan. It is located in the historical and culturally alive city of Lahore; this

University has played a leading role in higher education in the country. The University

comprises over 73 Departments, Centers, Institutes; it has over 793 permanent faculty members

involved in teaching/research and over 33,000 on campus students.

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STC

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Promotion

The best and the difficult part are to market your product. I will make blog, Facebook page, and

will display prints in all departments and cafeteria and distribute the brochures. My online

advertisement will be free of cost and prints will also be of free cost as I am assigned 400 pages

per semester I will use prints from there.

My best advertisement will be of word of mouth. When students will wear it in hostels and in

university they will be advertising my product for free. I will make customers in every hostel and

will expand my business as per demand.

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Key Success Factors

Location plays the most important role for such a project to attract maximum customers.

Awareness amongst the general people would attract more customers therefore use of

proper marketing techniques is important.

Provide best Quality and different variety of Jeans.

Reasonable Price

Attractive and good behavioral shopkeeper to handle the customer

Attracting the Customer by giving some monthly promotions sales.

Key Suppliers

o Al Raza Garments, New Alamgir Market, Lahore

o Ambition Enterprises, Model Town, Lahore

o Aslam Garments, New Anarkali, Lahore

o Crest Garments International (Pvt) Ltd, Ferozpur Road, Lahore

16

Market and Customers

The total market size for my business is mostly the young generation/Student of The University

of the Punjab. Individual customers include students, young working people and middle aged

people. The target segment includes people of ages 18-30 and 31-45.They usually buy 2-4 times

a week. There are both types of customers who buy either randomly or at specific times in a

week. Two segments account for high percentage of purchases. The young generation (60%

approx.) and Others (40% approx.).

17

SWOT Analysis

A SWOT analysis is a structured planning method that is used to evaluate the strength,

weaknesses, opportunities and threats involved in a projects or a business venture.

A SWOT analysis can be carried out for a product, place, industry or person. It involves

specifying the objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieve that objective.

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Strength

My strength is my product. Jeans is a cash item for me because there is no other competitor in

the university and customer pool is in bulk.

No competitor

Customer pool

Cheaper product

Location

Weaknesses

My weakness is lack of previous experience. It may be difficult to handle or run such business.

Less capital

Less expansion

Limited area

Lack of experience

Summer Vocations

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Opportunities

There is great opportunity to expand my business. Besides Jeans I can start dealing in other

wearing as well. I can open my outlets in other universities and different marketplaces.

Expansion

New business

Capital increments

New outlets

Threats

The new business opening of similar kind is threat. Any loss may occur in business.

New business opening

Loss

Fraud

Administration restrictions

Student Strikes

20

Strategic Direction

General Objectives

To establish a solid foothold in the Garments Business

To provide the best quality in the garments sector

To establish a strong brand name in the society

To cover all the affiliated costs

To provide different variety and styles with cost efficiency

Specific Objectives

Increase sales and Increase profitability

Hire motivated workforce

To have at least 40-60% market share

Financial Policies

Special discounts will be offered to the regular customers

Price would be set according to market

I will introduce monthly sales packages

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Management Policies

Motivate the employee by giving bonuses

Provide the manuals for future reference to improve product knowledge

Develop an environment which is adaptable to change and invite innovation and the

customers.

Marketing Policies

The business will be advertised before and after the launch

Various discounts would be given to the customers

Extensive marketing tools would be implemented

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Financial Analysis

Appendix

A1. Start up Requirements

Start up Requirements Amount (Rs).

Start up Expenses

Rent 2,000/-

Transportation charges 500/-

Brochures 1,000/-

Others 500/-

Total Start up Expenses 4,000/

Start up Assets

Start up Inventory 16,000/

Total Assets 16,000/-

Total Requirements 20,000/-

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A2. Start up Funding Amount (Rs).

Start up Expenses to fund 4,000/

Start up Assets to fund 16,000/-

Total Funding Required 20,000/-

Assets

Non cash Assets from Start up 16,000/-

Total Assets 16,000/

Liabilities and Capital

Liabilities

Current borrowing 20,000/-

Total Liabilities 20,000/-

Capital

Planned Investment

Investor 1 20,000/-

Total Planned Investment 20,000/-

Loss at start up Expenses (4,000/-)

Total Capital 16,000/-

Total Funding 20,000/-

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A3. Income per day and Month

Particular Amounts (Rs)

Salary of shopkeeper at end of Month 6,000/

Rent in advance 2,000/

Purchasing cost of 42 pieces 16,000/

Transportation charges 600/

No. of students in hostels = 17,000 approx.

Boys hostel = 18

Girls hostel = 10

No. of students per hostel = 1000 approx.

Lowest no. of Jeans sold per day = 6

Earning per day = 6*700 = Rs 4,200/-

Profit per day (Earning per day– Direct cost) = 4200 – 2000 = Rs 2,200/-

Earning per month = 42, 00*30 = Rs 126,000/-

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Profit per month = EPM – Purchasing Cost– Salary of shopkeeper –Rent -

Transportation Charges– Others Charges

= 126,000-55,000-6,000-2,000– 2,500– 2,500=Rs 58,000/-

If 6 units sold per day then Earning per day is Rs.42, 00 and Earning per month is Rs.126, 000

26

A4. Profit and Loss Account (projected)

Income Year 1 Year 2 Year 3

Sales 1512,000 1632,960 1763,590

Total Cost of Sales (696,000) (730,800) (767,340)

Gross profit 816,000 902,160 996,250

Expenses Year 1 Year 2 Year 3

Sales and Marketing Expenses 12,400 12,400 12,400

Salaries 72,000 72,000 72,000

Rent 24,000 24,000 24,000

Others 40,000 35,000 33,000

Net Profit 667,600 758,760 854,850