Part II – Business Plan
2.1. The Concept
After graduating from IBA in 2011, our group of four persons is planning to open up a business
of men wear shirts suitable for office, wedding and all other occasions.
By the time we will be leaving the IBA in 2011 we will be able to complete all our market
research and expertise required to be gained which are currently being acquired by researching in
this field.
“There is just no other industry that combines all the things that people/professionals love so
much. It’s fast; it’s marketing; it’s a little bit of style.” This will be our passion for the business.
Our thought that in comparison with the garments industry, mail, electronic-order in
Pakistan specially in Karachi and especially for high-quality products, is underdeveloped. We
consider that there are plenty of opportunities for new firms to enter this industry in Pakistan.
From our short experiences in corporate world, we know that we have picked the type of product
that is usually found on the normal garments department stores but, in general, we are
introducing a new concept of ordering through electronic media, telephone, home delivery & etc.
and normally it is a high margin item, it has virtually zero return rate, and it’s an impulse buy.
Our core philosophy is to provide affordable, high quality and conveniently available men’s wear
to the people at their own convenience while being in the local market. We position ourselves as
friendly businessmen who will work with customers as understanding their needs and offer best
possible solutions to cater for their needs and remain associated with them.
Developing the Concept
When we are at IBA and having a course of entrepreneurial management, we have the best
chance to share our ideas for above mentioned business with the other students & teacher and
specially such a course in which we students had to develop business plan.
2.2. Vision
To be the best Infrastructure Solutions Provider and achieve our milestones in professional
manner
2.3. Mission
To excel in the business of Power and Security Systems and deliver best customer services
2.4. Market Pakistan 2010
Market conditions for Businessman in Pakistan have always been very challenging. Major
economic hubs of the country like Karachi, Lahore and Faisalabad etc have been severely
impacted by prevailing law and order situation as well as power crisis which not only impacts
new business but also increase cost of doing business. Therefore many startup companies face
difficult survival phases and most of the businesses do not successfully proceed to the growth
and maturity stages. However this country is full of opportunities. As an astute entrepreneur, we
have to consider every problem as an opportunity and provide solution to the problem as our
business opportunity.
Pakistani Market is a blend of diversified business arenas which go from manufacturing sector to
Services.
And specially coming up with a new idea using technology is very difficult to implement but it is
very encouraging that many people like to enter inot such things that provide them with
convenience and our goal will be to capture such people specially in initial phases.
2.5. State of Economy
Despite various economic and social challenges, with the passage of months, the country’s
macroeconomic environment has improved. Real GDP growth for FY11 is estimated at 4.1
percent against the annual target for 3.3 percent. The macroeconomic context remains difficult in
the near term with continuing challenges. The global economy remains in turmoil, with uncertain
prospects for demand for Pakistan’s exports. In addition, the energy and water shortage, and the
internal security situation, could constrain growth in 2010 - 11. However, the economy could
benefit from large initial productivity gains as capacity utilization begins to increase from a low
base. For the longer term, however, without a resolution of Pakistan’s perennial structural
challenges, such as raising the level of domestic resource mobilization or promoting higher
productivity in the economy, growth and investment will continue to be constrained, and the
growth prospects volatile.
2.6. Industry Selected
We have selected to start a business of men wear shirts in Karachi only for the first year. Feeling
of time shortage especially for working people in Karachi, Lahore and other busy cities has
spread like a disease, due to such situation people are not even able to go for shopping and they
feel this job to be hectic and time consuming. The rationale behind this industry is that current
business and domestic consumers really need some break and convenience with quality and time
saving which will be provided by us to them.
2.7. Business Deal
Since the business is in its survival stage we will not invest our own money in the business. We
will find out as much contacts with potential customers as we can. These include our close
relatives, friends, colleagues and contacts during our jobs, which can trust us and place orders
with advance payment.
During the survival stage of the business, we will focus on our local tailor and dealers and buy
the garments from them (in cash) and supply as it is to our tailor with all other necessary material
required to deliver the final product. We will be operating with 2 trained tailors and 2 material
suppliers who can deal with our customer’s customized requirements.
Once we get some market credibility with our customers and suppliers, we will move on to credit
terms with suppliers and then reach out to more customers.
After we will achieve market credibility as local dealers, we will try in other marketplaces such
as Lahore, Islamabad, etc. Lahore is also a giant collection of small to large business hub where
we can offer every product related to our business. Then we will focus on developing our
business in all over Pakistan.
We will book order from customers in advance via Purchase Orders and we will guarantee a 6 to
8 days delivery time. Once the order is book, we will arrange the material and ensure delivery to
the customer in due schedule by giving instructions to tailor and ensuring proper control. Once
the goods are imported, we will deliver them to the customer and issue invoice with the Delivery
of the material and get the payment as per terms and conditions of the Purchase order.
2.9. Our 4P’s
Product: Men’s Wear
Price Price ranges vary as per the type and quality of product
Promotion: We will use Internet Advertisers, Emails, SMS and Catalogues
Place: Major Cities of Pakistan
1.1 The Team
The team consists of four members
2.13. Risk
Since the market of UPS, Security Camera and Surveillance system is very competitive therefore
there are risks associated in this business. There are many small businesses in this industry. They
don’t use technology to manage their resources. There is high risk of producing low quality
products. Moreover how much quantity is needed and when it is also important. Providing the
technology is another issue since the industry is short of expertise in this area. There are some of
the risks which are given below:
2.13.1. Money Risk: Currently we have invested around Rs. 1,600,000 in our business. Since
we are new entrants in this business therefore there is risk that how much of our initial
investment will be recover and in how many years?
2.13.2. Country Risk: In countries like Pakistan where there is no political stability and
policies regarding business frequently changes. The risk associated law and regulation of the
country becomes too high. Entrepreneurs always prefer to invest in those projects which have
lesser payback period.
2.13.3. Competitor Risk: There is a lot of competition in the market of UPS, Generators and
security cameras. It is difficult to sell these items at a premium price. To earn profit in this
business we have differentiate our product with our competitors. Therefore we have decided to
improve the quality to make difference.
2.13.4. Reputation Risk: Any disruption in our supply process will deter us from establishing
credibility with our clients which is a crucial factor in this industry.
2.13.5. Family Life Risk: After establishing our business the initial few years will be critical.
We have to devote most of our time in our business. This can create family problems. Our
relatives may influence us to involve them in the business. A feeling of jealousy may arise.
2.13.6. Old Inventory Risk: Since we are using Just In Time inventory management. So there
is a risk associated with old inventory if our product is not purchased immediately than all our
operations can be effected. To tackle this we should have to use sophisticated software which can
manage inventory.
2.13.7. Credit Risk: We have planned that our capital structure will be composed of 50% Debt
and 50% Equity. After a year we will take loan from bank based on our credibility in the market.
If we could not establish our credibility in the first year then we may lose our credibility.
Moreover this can deter us to take loan from the bank.
2.13.7. Availability of Supplier: Availability of supplier in this industry is critical for our
growth. Since if we could not receive supply to meet our demand then we can lose customers.
Customer retention is really important since they have multiplier effect. Using word of mouth we
can create our customer base.
2.13.8. Limitations: In the beginning of our business, the main purpose of us will be to
survive. Therefore we will be unable to attract big businesses at the beginning, given our limited
workforce, budget and the short term goals of recognition. In the future, we intend to build long-
term and feasible relationships with our clients.
2.22. Operation and Control Plan
2.22.1. Managing Account Receivable:
We will use an aging at least monthly to track how much of our money is tied up in credit given
to customers and to alert us to slow payment problems.
We will have the following policy for dealing with slow-paying customers:
Make a phone call if payments are not received after 30 days.
Send a letter if payments are not received after 60 days
Get our attorney to threaten if payments are not received over 90 days
2.22.2. Managing Accounts Payable
We will also age accounts payable, what we owe to our suppliers. This helps us plan whom to
pay and when. Paying too early depletes our cash, but paying late can cost us valuable discounts
and can damage our credit.
