BUSINESS PLAN

MASHHAL HANDICRAFTS

PAKISTAN

Mashhal handicrafts Pakistan

12 Meena Bazar,Liberty Market

Gulberg,Lahore

Phone: +92 42 36677110

Email: mashhalhandicraftspk@gmail.com

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Prologue

Mashhal Handicrafts has a mission to provide a sense of belongingness to

personal aesthetics by providing the premier products of true

craftsmanship .With a strict adherence to this maxim, success will be

ensured; Our products will exceed the expectation of the customers.

“Premier Craftsmanship”

“We will change your view of beauty

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TABLE OF CONTENTS

1. Exec Summary

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2. General Description 7

3. Goals & Objectives 9

4. Product Market 11

5. Legal From of Ownership 12

6. Product & Services 14

7. Marketing Plan 17

8. Major Players

19

9. Economics 20

10. Product

22

11. Operational Plan 23

12. Management & Organization 25

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EXECUTIVE SUMMARY

Mashhal Handicrafts is a startup organization, the products in which Mashhal

is dealing are handicrafts. Mashhal is developing its network of supplies of

handicrafts from the different parts of the country .In conjunction with the

local handicrafts manufacturers Mashhal is dealing in the Textile handicrafts,

Clay, Metal and Jewellery, Hand knitted carpets ,Stone Crafts, Glass, Ceramic

and Onyx, Camel and Snake skin products, Pottery, Costume dolls, Shell and

bone products and woodwork. In contrary to that we are developing a market

plan for our organization to export our products to various regions in

collaboration of different NGOs. The market of handicrafts is on boom and

Pakistan share is very less existent in world markets. To fill that gap we are

concentrating on the premier hand made handicrafts, to compete with the

local competitors in Pakistan along with the big players in the market like

China. The Competition is fierce due to bulk of cheap machine made goods

by the competitors; the focus of crafts would be on pure craftsmanship and

value addition to the consumers. We will sell initially through the local

distribution network which includes, wholesalers, importers, under the

contract terms.

Mashhal Handicrafts is the newly born organization which deals in the

Textile handicrafts, Clay, Metal and Jewellery, Hand knitted carpets ,Stone

Crafts, Glass, Ceramic and Onyx, Camel and Snake skin products, Pottery,

Costume dolls, Shell and bone products and woodwork. The purpose of

building such an organization is due to the fact that the handicrafts market

has been largely ignored by the Pakistani traders. Our target market is not

restricted to Pakistan only, the products under the Mashhal Handicrafts

Signature would be totally customized to serve the whole likings and

standards. This would provide Mashhal Handicrafts with an extra ordinary

opportunity for market growth as handicrafts and decorative industry is on

boom in the world. The company has developed its market plan which is as

under. The farther need of exporting handicrafts in various markets arises by

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observing the worldwide trend of handicrafts markets and the share of

Pakistani handicrafts in the world markets. As per a report from Federal

Bureau of Statistics, handicrafts exports dropped 78 percent in the first half

of the 2006.Pakistani handicrafts are losing share in global markets. Export

of handicrafts between July and December 2005-2006 stood at Rs334million,

which has been reduced to Rs74 million in first half of 2006-2007. World

markets are flooded with artificial machine-made handicrafts instead of

handmade ones. Far East markets have been conquered by cheap Chinese

goods, while Italy is dominating the European markets owing to lesser prices.

The Export of Pakistani handicrafts is less to European markets. The Asian

manufacturing industry is highly diversified, comprising of several

establishments engaged in manufacturing of pottery, ceramics, clay pieces,

paintings, sculptures, metal craft, antique furniture, antique jewelry, gems

and stones, textiles, paper craft, toys, leather based products. These

industries provide additional employment opportunities to masses in a

respectable manner with handsome cash rewards.

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GENERAL COMPANY DESCRIPTION – MASHHAL HANDICRAFTS

The mission is to establish Mashhal Handicrafts to support the novel cause of

Internally Displaced People (IDPs) in Pakistan while adopting successful

business strategy. A handicraft is one of the key export segments of

Pakistan’s trade with significant contributions coming from various areas.

However, the handicrafts sector is faced with several problems such as

unorganised marketing and inadequate market information; inadequate

support mechanism for product development; power interruptions and other

infrastructural deficiencies; inadequacy of raw material at appropriate prices;

lack of mechanism for dispersal of technology for enhancing productivity;

final finishing and lack of investment for fulfilling international requirements

and a general poor image of the country as a supplier of quality goods with

consistency. The term ‘handicrafts’ encompasses a wide range of artifacts.

The informal sector, which includes handicrafts, has been described by the

International Labour Organization (ILO) as a part of economic activity

characterised by certain features like reliance on local available resources

and skills, family ownership, small scale operations, labour intensity,

traditional technology, skills generally acquired outside the formal school

system, unregulated and competitive markets. The programme objects the

requirement of establishment of a handicrafts shop, made by the IDPs,

initially at Lahore and then various outlets at the predestinated locations to

serve this noble cause in Pakistan in a befitting manner. The goal is not only

focused to display of the articles made by the IDPs but also provide the

insight on the matter itself in a detailed manner .The aim however clarifies

that it has to generate funds as well as awareness among the masses

through different activities and displays. The programme primarily consists

on setting up of state of the art handicraft shop equally equipped with items

made by IDPs of different geographical locations in a delicate manner. The

Mashhal Handicrafts has fully qualified team to run this shop in a prestigious

manner in the days to come. The initial amount involved in the programme

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would be estimated Rs. 2.5 Million. The program progress and success will be

evaluated regularly on monthly and quarterly basis through process of audit

and quality checks in details.

GOALS & OBJECTIVES

The goal to start up this business is to enable people at risk and their

families to earn handful amount by learning handicraft skills and selling their

products domestically and internationally through aggressive marketing.

The main objectives include:

Providing a measurable increase in financial status of the IDPs at remote

locations.

Enabling health and educational facilities at their places with quality and

dignity.

Providing a platform from where such folk can generate and raise their

voice to the whole society and world.

Helping the societies and governments in bridging the gap between IDPs

and developing a problem resolving mechanism.

PRODUCT MARKET

Mashhal Handicrafts possess a research on handicrafts and decorative market in

Pakistan. In the changing world scenario, craft products exported to various

countries form a part of lifestyle products in international market. The impact is

due to the changing consumer taste and trends. In view of this it is a high time

that the Pakistani handicraft industry should go into the details of changing

designs, patterns, product development, requisite change in production facilities

for a variety of materials, production techniques, related expertise to achieve a

leadership position in the fast growing competitiveness with other countries. The

rural craft persons of Pakistan who are the backbone of Pakistani Handicraft

Industry has God gifted with inherent skill, technique, traditional craftsmanship

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but that is quite sufficient for primary platform. However, in changing world

market these craft persons need an institutional support, at their places the

craftsmen use different media to express their originality. The diversity of the

handicrafts is expressed on textiles, metals – precious and semi-precious, wood,

precious and semi-precious stones, ceramics and glass.

TARGET MARKETS

House hold formation (New Home Builders)

Occasional (Christmas, Birthday, Marriages, Thanks giving)

Professional Men (Men in age range of 25 -50)

Professional Women (Women in age range of 35 and 50)

Baby Boomers (People with age 55 and above)

The target customer for the proposed project would be the Men, Women and

children of upper middle class and upper class. Handicrafts are one of the

key export segments of Pakistani trade with significant contributions coming

from rural & remote areas. However, the handicrafts sector of such areas is

faced with several problems such as unorganised marketing and inadequate

marketing formation; inadequate support mechanism for product

development; power interruptions and other infrastructural deficiencies;

inadequacy of raw material at appropriate prices; lack of mechanism for

dispersal of technology for enhancing productivity; final finishing and lack of

investment for fulfilling international requirements and a general poor image

of the country as a supplier of quality goods with consistency. The

handicrafts industry has been growing since 80’s. There has been a

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continuous increase in both production and purchase of Handicrafts in

Pakistan as well abroad till the year 1999. During the year 2000, a nominal

growth of 0.2% and 0.6% has been recorded in the production and purchase

of handicrafts respectively. The most important factor for the success of a

business project is quality of product provided to the customer. Customer

satisfaction will be the key success factor.

Retail store is full of opportunities for success, but that success is

reserved for those who are prepared to commit themselves to

everlasting change.

There should be regular and sustained marketing through fliers

distribution and Cable &TV.

To obtain a good average of profits it is necessary to provide state

of art facilities to customers.

Frequent discount policies used to enhance customer motivation.

The staff hired should be well mannered and well trained in dealing

with the customers.

LEGAL FORM OF OWNERSHIP

The Company is owned and run by a non profit organization namely Saviours

Social Organisation Pakistan(SSO) and its liability is limited, due to its

inceptive idea of business and growth in this particular industry. It is also

advised that a sole proprietorship/partnership is much better if such

businesses started at own because it requires less legal requirement to start

with than a company. Also the small and medium stores in existing industry

are sole proprietorships or partnerships. Similarly a lower income tax rate of

tax is applicable to sole proprietorship than that of companies

PRODUCTS AND SERVICES

In the range of products it comes from embroidery, stone & wood products,

Hand-knotted Carpets, Woven and Other Carpets and metal ware. These

products focus on the ultimate consumer. The ingenuity of the designer as

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well as the craftsman will enable traditional crafts to be viable in a

contemporary market. A strategy needs to be pursued to harness the

culture-market, where the craft in its original beauty can still sell and fetch

high prices. Even in the case of utilitarian craft market, innovative designs

can ensure preservation of the traditional beauty of crafts. This would help

retain the product uniqueness, and as pointed out earlier, handicrafts

business constitutes concept selling rather than mere product selling. Design

and development of products constitute the soul and substance for the

sector.

MARKETING PLAN

Mashhal Handicrafts in view of the wide range of products that could be

considered as giftware and handicrafts, it is difficult to name standards.

Compliance with EU standards and regulations is strongly suggested. There

are, however, only few product groups in the giftware and handicrafts field

that has to follow standards. It is essential that CE-labeling be observed

where required. The CE-mark (including conformity statement and technical

documentation).While the quality regulations for candles are obligatory

assuring a certain level of quality, the toy regulation and the electronic

standards have to be observed because of safety considerations: To ensure

these we are seeking forward to the following benefits that are important for

our customers.

The world trade in handicrafts is not basically a trade in ‘culture’ but a trade

in common people’s needs and tastes. The items which have to be produced

in bulk and, although, made by hand, need mechanical support for

processing and finishing. These items sometimes are required to be made in

shapes, colours and designs, which are not typical of traditional shapes,

colours, and designs of the exporting country. Developing countries, which

have captured the world market, are those that have adopted their

workmanship and technology to this requirement. As a rule, Pakistani

artifacts—ornamental, decorative or collectable—are handicraft. On the other

hand, an over whelming segment of hand-crafted, partly hand-crafted as well

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as machine-crafted goods pass in global market with a generic nomenclature

of gifts and decorative. Additionally, there is a market for ‘cultural’ crafts as

well, though limited. This segment of the market needs to be explored and

exploited for larger gains, among other things, to help improve Pakistan’s

general image as well. No doubt, a blind pursuit of export market has also its

dangers: loss of skill, besides slow and imperceptible mechanization may

finally endanger the craft and take away the unique quality of the craft.

Paper marketing is essential for attracting clients towards newly established

business. Once a reasonable clientele is established the stress on marketing

can be decreased, as it will be automatically done through word on mouth. In

Pakistan, the giftware and handicrafts are distributed through seven major

channels.

Wholesalers

Importers/distributors

Commission agents/sales representatives

Department stores

Mail-order

Internet sales

Tele-shopping

MAJOR PLAYERS – HANDICRAFT OUTLETS

Key Players Area of operations

Universal Creation, Karachi National

Al Hassan Group of Companies, Karachi International

KAAF Enterprises, Lahore National

Mark House, Lahore International

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The substantial supply of giftware and handicrafts has transformed the

Pakistani giftware and handicrafts market into a fiercely price-competitive

market place. Nevertheless, innovative and new to market giftware and

handicrafts items place still have good market prospects. It is essential for

the Pakistani giftware and handicrafts marketers to find new products to stay

competitive. Although Pakistani consumers may be willing to pay a high price

for exclusive items they are very price conscious and want value for money.

Among traditional gift items, candles, festive items, including Christmas

decoration, exclusive gift boxes and gift-wrap, ribbons, nostalgic calendars

and all types of scented items have best prospects. The Pakistani market

shows a strong demand for low-priced candles.Thusimports from Poland and

China have increased substantially. The average growth for the overall

giftware and handicrafts is estimated at 1-2 percent over the years.

“Seasonality” plays a major role in the buying patterns of gifts and

decorative articles, as a trend approximately two thirds of decorative articles

are sold in the second half of the year. This has much to do with the fact that

people spend more time within their homes in this period. Christmas and

New Year are also important sales drivers. The peak periods for the sales of

gifts generally revolve around special occasions, such as Christmas and New

Year, Valentine’s Day, Easter, Mother’s Day and Father’s Day. Different

consumers are generally not very familiar with the different brands of gifts

and decorative articles, as can be derived from the high market share for

private label products. Most consumers do not believe that famous brands

automatically mean better quality. Brand awareness, however, differs per

product group. In the Ceramic ware, and Glassware sectors, brand

awareness is generally higher than in the other segments, mainly due to the

marketing efforts of the manufacturers in these sectors. There is little data or

information available in respect of the competition in different product

sectors relevant to Pakistan and about the size of the market. The demand

pattern in international markets constantly evolves towards quality goods in

bulk quantities. The supply factor poses a serious problem. Competing

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countries like Taiwan, China, Thailand, Malaysia, Indonesia and the

Philippines have moved ahead in this regard. Major marketing is done

through advertisement. This includes giving advertisement in newspapers

and magazines. An effective marketing campaign plays a vital role in the

success of business. For a newly established outlet it is imperative to face a

competitive environment in the market as competition enhances a ability to

strive for continuous improvement. A concerted plan of action may be drawn

up to develop:

Craft tourism for domestic development of crafts by encouraging

the

establishment of craft villages, and organised tour packages to

craft centres

and museums;

Craft markets at various points of entry into the country; and

Display outlets for crafts, using artisan products in hotels and other

establishments.

An intensified awareness of cultural as well as tourism crafts in the

region

will help, promote new employment opportunities, and broadly

engender an

enthusiasm and pride, especially among the young, in local

craftsmanship.

Tourists are major consumers of craft goods. Foreign tourists

should be

able to have an easy access to non-exploitative avenues to source

their

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purchases. There are several untapped international market

channels, e.g.,

museum, boutiques and other niche markets.

There are proposals for organising programmes at various

established fairs &

exhibitions, which attract tourist and public at large. In addition,

certain

special festivals are proposed to be organised at various localities.

A concerted campaign, if launched to promote a ‘handmade in

Pakistan’ brand image based on certification and information on the

product, will help. In selected cases, special features of both, the

craft and the craft person can be explained, which will help

generate interest in the product and consequently earn a higher

unit value as well. The information can include that on the tradition,

technique, design and the artist behind the crafts. Certification

could also add that the product conforms to international safety as

well as environmental standards.

An innovative range can be prepared for children —to be a perfect

study-time companion for them. Children may be encouraged to

visit special workshops and stores, in fact, to take home some

material like which they can paint. The artwork, which they so

produce, can later be displayed at vantage locations. This will

generate interest among them; they will find expression to their

child-like fantasies through different medium.

ECONOMICS

The development of handicrafts in the country has been increasingly export

driven. Pakistan’s principal export sectors are indicated earlier. Although the

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share of handicrafts and hand-knotted carpets is just about 2.5per cent of

overall exports from the country, these sectors account for very high

employment potential, perhaps the highest among all product sectors, and

also value-added component as much as the net foreign exchange earnings.

As far as competition is concerned; for a newly established outlet it is

imperative to face a competitive environment in the market as competition

enhances a ability to strive for continuous improvement. The size of the

market for handicrafts in Pakistan in 2005-06 was about $ 79 million, of

which exports constituted about 59 per cent. The annual growth of market in

real terms (2005-06) aggregated 1.2 per cent (domestic) and 6 per cent

(exports).

There are certain barriers to entry may be like:-

High capital costs

High production costs

High marketing costs

Consumer acceptance and brand recognition

Training and skills

Unique technology and patents

A comprehensive strategy is being prepared to tackle such like issues in the

process of raising and developing Mashhal Handicrafts.

PRODUCT

In the range of products it comes from embroidery, stone & wood products,

Hand-knotted Carpets, Woven and Other Carpets Gabba, Namda, wicker

baskets, copper and engraved vases, papier ,mache, small lacquer tables,

wood trays, and embroidered pieces and metal ware. These products focus

on the ultimate consumer. There is no time specification for starting such a

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business because there is no seasonal impact. Product sold not only in

summer, winter but also on occasions like Eid, after summer vocation. So,

business can be start at any time.

TEXTILE BASED HANDICRAFTS

Hand printed textiles including block and screen printing, hand printing by

pen, tie and die are used in products ranging from bed-covers to sheets,

dress material to upholstery and tapestry. The famous embroidered articles

of silk and cotton often embellished with mirrors, shells, beads, and metallic

pieces.

CLAY, METAL AND JEWELLERY

Brass, copper, bronze, metal is used for a variety of wares and in a variety of

finishes. Scintillating ornaments are available in a wide range of patterns,

styles andcompositions.Made from precious metals, base metals, precious

and semi-precious stones; these ornaments have traditional as well as

modern styles.

WOODWORK

Wooden articles in Pakistan range from the orient ally carved to the

absolutely simple. One can find toys, furniture, decorative articles, etc.

bearing the art and individuality of the craftsman.

STONE CRAFT

The intricately carved stoneware made of marble, alabaster or soapstone

GLASS, CERAMIC AND ONYX

Glass, ceramic and onyx products are a fast upcoming segment in the

handicrafts from Pakistan.

STRENGTHS

Abundant and cheap labor hence can compete on price.

Low capital investment and high ratio of value addition.

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Aesthetic and functional qualities

Hand made and hence has few competitors.

Variety of products which are unique

Exporters willing to handle small orders.

Increasing emphasis on product development and design up

gradation.

WEAKNESSES

Inconsistent quality and Inadequate market study and marketing

strategy.

Lack of adequate infrastructure and communication facilities.

Capacity to handle limited orders.

Untimely delivery schedule.

Unawareness of international standards by many players in the

market.

OPPORTUNITIES

Rising appreciation for handicrafts by consumerism the developed

countries.

Widespread novelty seeking.

Large discretionary income at disposal of consumer from developed

countries.

Growth in search made by retail chains in major importing countries

for suitable products and reliable suppliers.

Opportune for agencies to promote marketing activities.

Use of e-commerce indirect marketing.

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THREATS

Tough Competition.

New entrants can easily share the business.

Handicraft export is very exacting and competitive and demands

high quality.

Decline in Pakistan share in international handicrafts markets due

to:

o Better quality products produced by competitors from Europe,

South Africa, South Asia, etc.

o Better terms of trade by competing countries Consistent quality and

increasing focus on R&D by competing countries

o Better packaging and Stricter international standards

FEATURES AND BENEFITS

Matching products and the product range is critical because a German

importer can select a suitable business partner if he/she knows exactly what

range we can offer. A precise review of the product range, therefore, aims at

identifying the most suitable candidates out of the many potential

customers. A product range consists of several product groups (range width),

each with several different products (range depth). One product can have

several variations. Handicrafts business is consumer product base and

relates not to the basic human needs. It is difficult to specify grade/type or

model. However, it can be treated as product, which can be made by picking

up one from each of the following areas/class. For example a ladies wear can

be of wool in a Chaddar form or it may be a silk robe. Artesian can produce

men’s wallets by using synthetic materials and so on. So, it is very difficult to

specify the product by grade, type or model. We can treat it only as a fashion

& style oriented consumer product & market. In all countries of the world,

the demand for handmade wears is high and in most developing countries it

is averagely growing. It is also estimated that about 20% of the world’s total

consumption consists of simple daily wear made entirely of different

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materials. The business is of trading nature and carries larger potential for

profit. Unfulfilled demand, change in fashion and good profit margins are few

incentives for a new entrants in this business, especially for those who are

committed to quality products.

CUSTOMERS

The target customers for the proposed project would be the Men, Women

and children of upper middle class and upper class throughout the region as

its been already spelled out. Its dual base business in nature as it is to sell to

other businesses and directly to consumers. As it is being consumer

products, it would be initially sold through one retail shop and later on a

channel of distributors, wholesalers, and retailers would be introduced. The

most important group is tourists and local & foreign NGOs of all the ages and

not basing on gender and locations.

COMPETITION

As far as range & nature of products are concerned there are different

companies to compete at Pakistan like:-

Universal Creation, Karachi.

Al Hassan Group of Companies, Karachi.

KAAF Enterprises, Lahore.

Mark House, Lahore.

Noreena International, Karachi.

Ghazali Handicrafts, Lahore.

Grey Apple, Lahore.

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NICHE

The key to marketing strategies is focusing on the delivery of premier hand

made articles to the consumers .Crafts International is the organization

which would serve the different segments depending upon their category

niche for us as we will target the group of people who are actively involved in

household formation, newly wed couples who would also be the part of

target market, as they are more interested in decorating their homes, Thirdly

we would be good option for youngsters in our jewelry category , to fulfill

their fashion needs , to serve all these markets we need to develop a

marketing strategy of positioning our products keeping in minds our market

objectives we have developed our marketing mix of price ,distribution which

is in the report.

STRATEGY

The key to marketing strategies is focusing on the delivery of premier hand

made articles to the consumers .Crafts International is the organization

which would serve the different segments depending upon their category.

PROMOTION

MARKETING MIX

Our Marketing mix consist of following categories

PRICE

The price of our products will be on the per unit basis, it will depend on the

category of the product, the type of work, the more precious craft work will

be charged higher in comparison to the other products.

DISTRIBUTION

In Pakistan, the giftware and handicrafts are distributed through seven major

channels.

Wholesalers

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Importers/distributors

Commission agents/sales representatives

Department stores

Mail-order

Internet sales

Tele-shopping

We will use these seven channels of our product distribution.

WHOLESALERS

Besides offering wide range of goods to retailers for direct sales, this channel

also supplies large quantities of individual articles. They are very particular in

maintaining consistency in the kind of products and their quality. One of the

distinguishing features of wholesalers is to provide distribution and storage

facilities. Specialized wholesalers deal in sales to retailers as well as to final

consumers. They maintain high quality standards and but have a narrower and

in-depth range of arts and crafts.

Importers/distributors most giftware and handicrafts companies use

importers/distributors to market and sell their giftware and handicrafts lines.

They buy and sell on their own account. Thus, the companies take advantage of

the distributor's expertise, his sales force and his existing distribution channels.

Distributors call on giftware and handicrafts retailers, purchasing groups and

supermarkets. The distributors' mark-up varies depending on the giftware and

handicrafts item, but at least 50 percent. Pakistan have more than 45,00

giftware and handicrafts retailers. Several retailers import directly from all over

the world and sell to the local customer. Usually these are small companies

looking for items new to the market and handling small orders only.

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COMMISSION AGENTS

Commission agents provide companies with direct access to the various

markets and direct control. Independent commercial agents are normally

working on a 15 percent commission and operate on a regional basis. They

concentrate on specialist retailers, purchasing groups and department

stores. Commission agent contracts are based on stringent various

regulations. In order to facilitate market entry efforts by the agents their

initial commission is often a few percent higher than the "usual" commission.

DEPARTMENT STORES

We are also interested in establishing business contacts with major

department stores. Department stores in particular, prefer to deal directly

with manufacturers. Their buyers are very specialized and only handle a

limited range of products. At some occasions department stores also buy

through independent commercial agents. Quite often they have their own

buyers as well as a few agents that usually work with them and who know

their assortments.

PROPOSED LOCATION

Location of outlet is of primary concern with any retail organization.

Spending time and money wisely in the process of site selection is of primary

importance. Keeping in view products offered it is recommended that outlet

must be in area like Defence, Gulberg and Fortress stadium etc. The

expansion is planned in various big cities with a single branch opened every

year.

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SALES FORECAST

Sales In $ 2009 2010 2011 2012

Textile Handicrafts 6000 7100 8500 11000

Clay, Metal &

Jewelry

8500 9400 10200 13000

Wood work 12000 15000 16000 17500

Stone craft 4000 4200 4800 5600

Glass, Ceramics 3000 3600 4000 5100

Camel & Snake

Skin

4000 5000 5300 6100

Pottery 2500 3000 3600 4200

Hand knitted

carpets

7000 8200 8800 9200

Costume dolls 3600 4000 4200 4900

Shell & bone

products

2000 2500 2600 3500

Gross Margin 2009 2010 2011 2012

Sales ($) 52600 62200 68000 80100

Direct cost of Goods($) 25774 29856 35360 38448

Other Costs($) 0 0 0 0

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Total Costs of Goods

Sold($)

25774 29856 35360 38448

Gross Margin($) 26826 23656 32640 41652

Gross Margin % 51 38 48 52

Now that you have described your products, services, customers, markets,

and marketing plans in detail, it’s time to attach some numbers to your plan.

Use a sales forecast spreadsheet to prepare a month-by-month projection.

The forecast should be based on your historical sales, the marketing

strategies that you have just described, your market research, and industry

data, if available.

You may want to do two forecasts:

a "best guess", which is what you really expect, and

a "worst case" low estimate that you are confident you can reach no

matter what happens.

OPERATIONAL PLAN

Handicraft is a product use to add value at any place. This can be

categorized on materials, style and usage. The generally used materials are

stone, man-made materials, rubber/canvas/synthetic and textile along

accessories. Further classification is “Men’s, Ladies, and children” items at

display. This can be further subdivided on the basis of style related to

fashion. The local industry also caters the special users like foreign tourists,

students, local visitors, and foreign delegations.

PRODUCTION

How and where are your products or services produced?

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Explain your methods of:

Production techniques and costs

Quality control

Customer service

Inventory control

Product development

LOCATION

Big cities are suitable location for such type of outlets. It is assumed in this

pre-feasibility that a single new outlet will be opened every year in a new

city. Location of outlet is of primary concern with any retail organization.

Spending time and money wisely in the process of site selection is of primary

importance. Keeping in view products offered it is recommended that outlet

must be in area like Defence, Gulberg and Fortress stadium etc. The

expansion is planned in various big cities with a single branch opened every

year. Today’s successful retailer is the one making the most profitable use of

every square foot of space in the store and in the warehouse. Because space

is costly, retailers need to take a strategic approach to its use. Floor

patterns, location of merchandise, amounts of merchandise and the

appropriate displays are all key factors in determining space. Misuse of

space can be as detrimental to success as poor Buying. It is very important

for every store to create a

suitable atmosphere and appealing presentations in order to trigger the

consumer’s buying decision. In a world where one can find identical

merchandise in more than one store, layout and presentation becomes a

key-differentiating factor. The proposed store should be air- conditioned.

There should be proper arrangement of lightening.

USE OF COMPUTERS

The computer is an invaluable aid in processing the large number of

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transactions and vast amounts of information involved in managing a retail

operation. The amount of data needed for merchandise planning for example

would require hundreds of man-hours to produce, whereas a well-designed

computer system can perform the task in seconds. Software for inventory

and sales recording and management should be used to have updated data

at all the times. This software not only records each and every sales

transaction but also updates stock and cash position after every transaction

INVENTORY

Stock of finished goods kept must be for 180 days by farseeing major

occasions, holidays, weather and Islamic events like Eid and other festivals.

Supply source would be outsourcing from leading manufacturers with own

developed brands. There must be well-known imported brand category and

other footwear accessories like socks polishes, laces and gifts for children.

AMOUNT OF SPACE

For the Purpose of this study it is recommended to start project in a rented

shop. The approximately area required is 30*30 feet. This space should be

available in Lahore at around Rs.60, 000 per month.

POWER AND OTHER UTILITIES

Telephone-2 lines, one for fax, one for telephone usage.

Electricity –3-phase commercial connection

Internet facility

TIME SCHEDULE

Time required for establishing a set up is six to eight weeks.

ACCESS

Liberty Market is in the heart of the city and one of the leading trading

markets.

PERSONNEL

Position Regd Salary Total

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Office Assistant 1 10,000 10,000

Store In Charge 1 10,000 10,000

Accounts Oficer 1 8500 8500

Office Boys 2 6000 6000

Total 5 40500 40500

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MANAGEMENT AND ORGANIZATION

The outlet will be managed by the volunteer experienced individuals of the

SSO along with hired human resource. Capacity building in human resource

is one of the key elements for continuous growth.

PROFESSIONAL AND ADVISORY SUPPORT

A Board of directors is composed of:-

Chairperson - President Punjab Women

Chamber of

Commerce

Financial Advisor - Senior Member of SSO

Marketing Director - Vice President of SSO

General Manager - Member of SSO

Attorney - Zia Tiwana Law Associates

Insurance agent - EFU Insurance

Banker - Standard Charted Bank Ltd

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KEY ASSUMPTIONS

Capacity Utilization AssumptionsStarting Capacity Utilization

Annual Growth Rate in Capacity Utilization

Maximum Capacity Utilization for the Project

Financial Projections

Debt

Equity

Interest on Long term Loan

Debt tenure (Years)

No. of installments per year

Amortization (years)

Income tax rateOperational Assumptions

No. of working days in a month

Working days in a year

Sales per annum (60 pairs per day) @ 100%

Product Mix

Imported

Branded 60 %

Non-Branded

Cash Flow Related Assumptions

Sales 100% cash based

Creditors

Inventory

Cash in Bank

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CONTROLS

The purpose of Crafts international marketing plan is to serve the purpose of

guide for the organization. The following areas will be monitored to gauge

the performances

Revenue monthly and annually.

Expenses monthly and annually.

Customer satisfaction.

New product development.

CONTINGENCY PLANNING

Difficulties and risk may be as:-

An entry of more cheap goods in the market by the established

competitors.

Worst case Risks Include.

Determining that the business cannot support itself on ongoing

basis.

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Having to liquidate equipments or intellectual capital to cover the

liabilities.

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