Entrepreneurship

THE BUSINESS PLAN

2

Do you often get confused when

you have to give someone a gift?

Yes…

Do you really want something

that can eliminate your

cOnFuSiOn?Of course, but how???

DreamZ Unlimited for the first

time n your own city Karachi

INTRODUCES!!!!!

3

4

Prepared for:

Mr. Arbab Naseebullah

Prepared by:

Syeda Dania Saeed Shah

MBA-B-4TH

Submission Date:

Dec 9th,2011

5

Table of Contents

Executive Summary....................................................................................................................x i i

Environmental and Industry Analysis........................................................................................13Market Segmentation.................................................................................................................13Target Market Segment Strategy................................................................................................13Industry Analysis........................................................................................................................14

Introduction (Description of Venture)........................................................................................15The Company.............................................................................................................................16The Market.................................................................................................................................16Financials....................................................................................................................................17Mission.......................................................................................................................................17Objectives...................................................................................................................................17Company Ownership..................................................................................................................17

Production Plan:...........................................................................................................................18Architecture:...............................................................................................................................19Internet Facilities:.......................................................................................................................19Money Transactions:..................................................................................................................19Setting Up a Website:.................................................................................................................19Develop a mailing list:...............................................................................................................21

Marketing Plan.............................................................................................................................22Marketing Goals.........................................................................................................................23Marketing Objectives.................................................................................................................23Size of Market............................................................................................................................23Product/Service..........................................................................................................................24Price............................................................................................................................................24Promotion...................................................................................................................................25Facilities Plan.............................................................................................................................25

Organizational Plan......................................................................................................................26Form of Ownership:...................................................................................................................27Liability of Owners:...................................................................................................................27Continuity of Business:..............................................................................................................27Transfer of Interests:..................................................................................................................27Management Control:.................................................................................................................27Distribution of Profits:................................................................................................................27The Management Team..............................................................................................................27Organizational Structure.............................................................................................................28

Assessment of Risk........................................................................................................................29Financial Plan................................................................................................................................30

Important Assumptions..............................................................................................................32Break-even Analysis...................................................................................................................32Projected Income Statement.......................................................................................................33Projected Cash Flow...................................................................................................................34Projected Balance Sheet.............................................................................................................35Business Ratios...........................................................................................................................36

6

Acknowledgements

All the praise to Almighty Allah the most beneficent and merciful who gave us

opportunity and strength to compile a “Business Plan for a new venture (Basket of

GoddieZ) launched as an entrepreneurial effort.

I am thankful to our parents.

My special thanks also go to our course instructor Mr. Arbab Naseebullah who provided

assistance regarding this project whenever I inquired. Under his guidance I am able to

prepare this project.

This report is a combination of lot of sincere hard work and dedication my side, my

valuable ideas and suggestions. My close friends were very co-operative and helpful

throughout this report work. All my mates have contributed equally well with lot of care

and authority.

7

Group Profile

I the student of Entrepreneurship presenting this business plan on, “Basket of GoddieZ”

are student of 4th semester, currently doing Master in Business Administration (MBA)

from BUITEMS. This report strengthens the concept of the subject and gives us a

practical touch to what we have learned in our course through out the semester.


8

Letter of Authorization

Dear Reader(s):

As the student of the course of Entrepreneurship we have been authorized by Mr. Arbab

Naseebullah for the preparation of this project on “Basket of GoddieZ” as a substantial

part of MBA during Spring Semester 2011 at Balochistan university of information

technology (BUITEMS). This report is mandatory for the course and is to be delivered on

Dec 9th,2011

Sincerely,


9

Letter of Transmittal

Mr. Arbab Naseebullah

Course Instructor

Faculty of Management Sciences

BUITEMS.

Date: Dec 9TH,2011

Respected Sir,

I hereby present my final project on “Basket of GoodieZ” as assigned by you as a

mandatory part of course.

This project gives you complete highlights of a business plan how it is written what are

the essential parts of a business plan gives you a brief overview of all aspects and tells

you what exactly is my product and what is the target market for this product and how I

am going to perform my business and what kind of sales am I expecting. This report also

provides the practical implications of the topics and subject under consideration i-e

Entrepreneurship.

Hopefully, my report will fulfill its purpose and prove to be beneficial for the students of

Entrepreneurship in its true essence. I also hope that the report will be up to your

expectations. Any information or queries regarding this report will be highly appreciated

by me.

Sincerely,


10

Statement of Contribution


Prepare the Financial Plan & Presentation of it, Printing, Binding of report.

Develop Venture Idea, Define venture, Documentation, Formatting of report, Prepare

presentation of her part, Printing, Binding of report.

Prepare Organizational Plan and presentation of it.

Prepare Marketing Plan and presentation of it.

Prepare the Production Plan and presentation of it.

11

Executive Summary

Basket of GoodieZ (BOG) is a premier gift basket retailer. BOG is concentrating on making

gourmet gift baskets out of a wide range of high-quality ingredients. BOG will be selling to

individuals as well as corporations. The primary gift baskets that will be offered are: smoked fish

basket, fruit basket, pasta dinner basket, and picnic basket that have crackers, fruit, soft drinks

and smoked fish etc. BOG also offers a custom basket which allows customers to pick items from

a list and BOG will assemble the basket with its custom ingredients.

The purchasing of gift baskets is very "seasonal." Higher quality products and service

will be provided at your door step.

Once up and running with some momentum, BOG will be steadily producing profits. It is

projected that BOG will be making a profit by August.

12

x i i

Environmental and Industry Analysis

BOG will be going after two distinct market segments, individuals and corporations. Both groups

buy gift baskets as a goodwill gesture, typically for different reasons. Individuals typically buy

the baskets as a present with over half of sales occur during holidays. Corporations buy the

baskets as presents as well, but usually for events unrelated to the holidays. By going after both of

these groups, sales will be less seasonal (relative to if only the individuals were targeted).

There are many different "gift basket" in market. BOG will differentiate themselves through the

use of premium ingredients in their baskets. The gourmet baskets, coupled with a custom option

and reasonable prices (attributed to low overhead) will spell success for BOG.

Market Segmentation

BOG's has two distinct groups of customers, individuals and corporate customers:

1. Individuals- The individuals are people who are looking to give a friend, relative,

colleague, etc., a gift basket as a gesture of goodwill. These customers typically do not have a

specific type of gift basket in mind when they look at BOG's product offerings, they just want

to give a gift.

2. Corporate- The corporate customer is typically buying the basket for a colleague at

work, either as a sign of appreciation, for a special event, or as a thank you for a

customer. The corporate market can be further broken down to banks, health care,

employment gifts, real estate, apartments, special events/promotions, corporate headquarters,

hotels/vacation resorts, and automobile dealerships.

Target Market Segment Strategy

BOG is focusing on individuals and corporate customers because they are the largest segments of

purchasers for gift baskets. Individuals are the target purchaser of gift baskets. They purchase

baskets typically as a thank you in response for something the recipient did or just to be nice. The

gift basket is un-mistakenly a gift so upon receipt there is no ambiguity why it was sent or at least

what it is trying to accomplish. Within the individual category, women are 69% more likely to be

the purchaser of a gift basket compared to men. This is not to say that women more often

purchase gifts, it just indicates women are more likely to buy gift baskets.

BOG is focusing on the corporate customers as they currently represent approximately a third of

the purchasers of gift baskets. The corporate customer could be buying the basket for someone

13

within their company, or they could be buying it for a customer, vendor, etc. The trend for the

corporation to purchase gifts is not a new phenomenon and therefore would appear to be a solid

market segment to pursue.

Industry Analysis

There are many different forms of competition in the gift basket business:

1. Similar gift basket type retail stores: There are several of these stores located in

Karachi. These competitors offer a wide range of gift baskets, however none of them are

concentrating on the higher end, gourmet product line.

2. Bath product gift basket companies: There is currently one gift basket company that

concentrates on bath products. Bath products have a slightly smaller population of people who

appreciate these products (as women predominately appreciate bath products more then men

do).

3. Regional gift basket: There is one retailer that sells gift baskets composed of local

products. These type of baskets tend to appeal to people that are buying gifts for people that

are not from this area.

4. Candy gift baskets: There are several candy stores that offer, as one on their products, a

candy gift basket. Similar to the bath products basket, candy typically appeals to women a bit

more so then men.

5. Florists: Flowers are a similar product that competes with gift baskets. Once again

flowers tend to appeal to women more so then men.

The purchasing of gift baskets is very "seasonal." More than half of the gift basket

purchasing occurs during a wide variety of holidays.

14

DESCRIPTION OF VENTURE

15

Introduction (Description of Venture)


gourmet gift baskets out of a wide range of high-quality ingredients. In addition to having several

flagship baskets, BOG will also offer the option of a custom basket allowing the customer to

choose the ingredients themselves. BOG will be selling to individuals as well as corporations.

Initially the bulk of BOG'z business will be generated by individuals from word-of-mouth

referrals, but as time passes, corporations will become a growing percentage of sales.

Once up and running with some momentum, BOG will be steadily producing profits. It is

projected that BOG will be making a profit by December. By the end of year three, it is projected

that BOG will be generating a net profit of approximately Rs. 100,000.

The Company

The Basket of GoodieZ' mission is to create the finest gift baskets available we will be hand

assembling our products out of premier ingredients, local when possible. The business will be

based at a group members place. Although this will be a home-based business, toward the end of

year one, we will have an employee(s).

The primary gift baskets that will be offered are: smoked fish basket, fruit basket, pasta dinner

basket, and picnic basket that have crackers, fruit, soft drinks and smoked fish etc. BOG also

offers a custom basket which allows customers to pick items from a list and BOG will assemble

the basket with its custom ingredients.

The Market

The purchasing of gift baskets is very "seasonal." More than half of the gift basket purchasing

occurs during a wide variety of holidays and occasions.

BOG'z competitive advantage will be based on two factors, low overhead which allows

reasonable prices, and an unrelenting desire for the highest quality product and service.

1. Low overhead.

2. Highest quality product and service.

16

BOG'z sales strategy will be targeted at obtaining both the individual and corporate clients

through word-of-mouth referrals. Customers will be able to place an order at the office, over the

phone or via the website.

Financials

BOG'z start-up costs will include all the equipment needed for the home-based office, legal fees,

website creation, and start-up advertising. The home office equipment will be the largest chunk of

the start-up expenses. This equipment includes a computer system, fax machine, office supplies,

cellular phone etc. Additionally, there will be the installation of a broadband connection, and

furniture for the home office. Total start-up expenses are expected to be Rs. 50,000(approx), all

of which will be contributed by all members equally.

Mission

The Basket of GoodieZ' mission is to create the finest gift baskets available. We exist to attract

and maintain customers. When we adhere to this maxim, everything else will fall into place. Our

products and services will exceed the expectations of our customers.

Objectives

The objectives for the first three years of operation include:

1. To create a home-based company whose primary goal is to exceed customer's

expectations

2. To increase the number of clients served by at least 20% per year through superior

performance and word-of-mouth referrals

3. To develop a sustainable home business, surviving off its own cash flow

Company Ownership

The Basket of Goodiez will be a partnership, owned by all group members.

Why Basket of GoodieZ:

1. This is a good opportunity because it’s first of its kind here in Pakistan.

2. No one else is offering such a unique gift basket.

17

PRODUCTION PLAN

18

Production Plan:

As our business is service business, merchandise and management of inventories will not play a

large role. We will be acting as commodities provider for product that is ordered by our clients.

The home office equipment will be computer system, fax machine, office supplies, cellular

phone, and pager.

Architecture:

The computer should have a 1 gigahertz Celeron/Pentium processor, 128 megabytes of RAM

(preferably 512), 80 gigabyte hard drive, and a rewritable CD-ROM for backing up the system.

Internet Facilities:

There will be the expense installation of a broadband connection. While a broadband connection

is necessary, it only costs between Rs. 800-900 per month for service and will make working on

the Internet significantly faster and easier.

Money Transactions:

E-commerce often requires setting up a merchant account as well as establishing a payment

gateway provider. A merchant account is a specialized bank account setup by a bank that allows

you to accept credit cards. A payment gateway charges your customers' credit cards via the

Internet and sends the funds to your merchant account. The payment gateway acts as the bridge

between the merchant's Web site and the financial institutions that process transactions. Payment

data is collected online from the shopper and submitted to the gateway for real-time

authorization.

Cash payments are less advanced but easier to set up. Funds are transferred from the buyer's bank

account or credit card to the seller's account. This is similar to writing someone a check but much

more secure and easier to track. Since no taxes or shipping costs are required, there is no need for

shopping carts to manage the information. We will use the more popular and well-known forms

of "cash payment" systems.

Setting Up a Website:

Registering Your Domain Name

19

Each Web site has its own unique name, such as Amazon.com or eBay.com. This is your

"Domain Name." It is a unique name that identifies you to all of the other computers on the

Internet. There are a number of companies known as "registrars" that will assist you in registering

your Web site's name, including Dotster.com, GoDaddy.com and NetworkSolutions.com. Once

you've registered and correctly set up your Domain Name Server, people who type

www.BasketofGoodieZ.com into their browsers will be taken directly to out Web site.

To completely secure a name we also buy .com extension for it. Once we have successfully

registered our domain name, it will remain in our name and control for as long as we pay to keep

it.

Our company name, trademarks, logos and artwork used on our site will require

appropriate trademark and copyright protection under intellectual property laws. Our

lawyer will be consulted on this issue in order to avoid unpleasant surprises (for example,

the possibility of being advised that our company slogan belongs to someone else.

Hosting Website

Our online business will need a place to reside. We may choose to buy (by having our

own network server) or lease (by having our site hosted by a Web-hosting service). We

people find it much easier to lease hosting space. For example at My Own Business, we

lease our hosting. For a monthly fee the Web host handles the technical details, and we

are free to spend our time developing content for your Web site. Hosting services can

also provide "user statistics," which track the number of visitors to our site.

Building Web site

We have members in our group, who have required skills and experience so we will make our

website by our group members because it will save our additional expense which we don’t give in

starting of our business.

Make our site easy to use:

While it might be tempting to have a cutting-edge Web site – we won’t forget the basics. We will

fail if a visitor can't navigate successfully through our site. Provide clear, easy-to-understand

20

http://www.networksolutions.com/

http://www.jdoqocy.com/click-2404372-10378406

http://www.tkqlhce.com/click-2404372-1099459

navigational tools on each page of our site. Make it easy for a visitor to find our contact

information on every page. In our website we will be providing exact and complete specification

of our product so our customer find it easier and useful for their transaction.

Develop a mailing list:

A far more appealing strategy is to develop a mailing list. Invite our customers to "opt in" to

receive a newsletter or notices of specials running at our business. Make this information relevant

and useful for our customer. Consider providing a "coupon" that will give them a discount on

their next purchase. And, always give the recipient an easy means to "opt out" of receiving future

e-mails.

21

MARKETING PLAN

22

Marketing Plan:

The marketing strategy was designed on the basis of personal interviews conducted with

individuals from different areas of KARACHI city. These interviews indicated the likeness of

BOG concept, thus providing us a large target market.


gourmet gift baskets out of a wide range of high-quality ingredients. BOG will be selling to

individuals as well as corporations. Initially the bulk of BoG’z business will be generated by

individuals (mostly upper class) from word-of-mouth referrals, but as time passes, corporations

and middle class will become a growing percentage of sales. Our office is located at ‘defense’

area which itself lends convenience services that we can provide for our primary target market.

Marketing Goals

To meet the growing needs of a target market defined on the basis of geography,

demographics, and lifestyle and buyer intentions.

BoG’z competitive advantage will be based on two factors, low overhead which allows

reasonable prices, and an unrelenting desire for the highest quality product and service.

To establish an effective and profitable marketing mix of service, place, price and

promotion.

Marketing Objectives

The objectives for the first three years of operation include:

1. To generate RS.100000 in profit by the end of third year.

2. To increase the number of clients served by at least 20% per year.

3. To develop a sustainable home business, surviving off its own cash flow

4. To expand to at least two new locations by the end of the first three year.

Size of Market

According to our research, there are about (approximate), 8000 people who pass our office every

day and according to our survey 85% of these individuals match our primary target market. This

23

would consist of individuals of any age, male/female and children as well, with high disposable

income, mostly from high and upper middle class.

There is also the potential to reach an additional customer, who may not directly pass by our

office on a regular basis. This secondary market may be penetrated through advertising literature.

On the basis of the above information, it is estimated that the potential market is between 12000

and 16000 people. Our objective is to reach 15% of the primary market and 5% of secondary

market. Thus in our first year the market would consist of about 1200 customers.

Product/Service

The Basket of GoodieZ' mission is to create the finest gift baskets available we will be hand

assembling our products out of premier ingredients, local when possible.

The primary gift baskets that will be offered are: smoked fish basket, fruit basket, pasta dinner

basket, and picnic basket that have crackers, fruit, soft drinks and smoked fish etc. BOG also

offers a custom basket which allows customers to pick items from a list and BOG will assemble

the basket with its custom ingredients.

The customer can place their order at the office, over the phone or via the website.

Price

The purchasing of gift baskets is very "seasonal." More than half of the gift basket purchasing

occurs during a wide variety of holidays and occasions.

BoG’z pricing strategy is based on the type and number of items, basket containing. The lowest

price of 1basket would be RS.1000. Price also depends on the distance between our office and

ordered place.

Prices of few items are indicated below.

Name of Basket Price

Fruits Basket RS.399/-

24

Smoked Fish Basket

Pasta Dinner Basket

Picnic Basket

Custom Basket

RS.599/-

RS.899/-

RS.1199/-

Depends on quantity and type of items

Promotion

BOG will rely extensively on word-of-mouth advertising. However, it will be important to create

an awareness of our services to the target market. To attract attention and to create awareness,

signs will display our name and describe our services to the many individuals, who actually pass

by the office. Pamphlets will also be distributed to office buildings in the target market and later

on advertising will be used to promote our business.

Facilities Plan

The business will be based at a group members place. So no rent applies. BoG’z start-up

costs will include all the equipment needed for the home-based office, legal fees, website

creation, start-up advertising, storage for hot and cold foods, storage for garments will be

used in making baskets, and groceries. The home office equipment will be the largest

chunk of the start-up expenses. This equipment includes a computer system, fax machine,

office supplies, cellular phone etc. Additionally, there will be the installation of a

broadband connection, and furniture for the home office. Along with that counters will be

set up in a small area at the front of office for conducting business with clients. Total

start-up expenses are expected to be Rs. 50,000(approx.).

25

26

ORGANIZATIONAL PLAN

27

Organizational Plan:

Form of Ownership:

Partnership

Liability of Owners:

Partners are liable for business liabilities

Continuity of Business:

After death of any partner, the ownership is transferred to his/her legal heirs.

Transfer of Interests:

Partner can transfer interest only after the consent of other partners

Management Control:

All Partners have equal management control as each of them is a head of a function of the

organization.

Distribution of Profits:

All profits are distributed equally as all partners invest equally in the venture

The Management Team

The management team consists of the following individuals:

Syeda Dania Shah, Head of Administration

Haseeb Hayat, Head of Research & Development

Sajida Younus, Head of Financial Department

Gulbano, Head of Marketing & PR

Fahad , Head of HR Department

28

Organizational Structure

Head of Administration

He/She is responsible for policy making and taking care of the legal, financial, HR and

administrative issues of the business. He will deal with the external environment. He/She is also

responsible for making or implementing major decisions and organizing people and resources

efficiently to achieve common goals and objectives.

Legal Consultant

A legal consultant is employed to look after the legal affairs of the organization, taxation issues,

preparing contracts and verifying legality of documents. He/She will report to the Head of

Administration.

29

HR Manager

He/She will report to the Head of Administration. The responsibilities are to deal with the HR

issues both internal (i.e., of our organization) and external. He/She is responsible for the

recruitment of the workers and maintains all records of employees to give those rewards and

compensation.

Head of Finance Department

He/She responsible for track sales, issue reports on sales, production costs, control capital for

expansion. He/She will report to the head of Administration Department.

Accounts Manager

He/She is placed at the Head Office and is responsible for maintaining proper book of accounts;

prepare salary invoices, yearly audit and financial allocations. He/She will report to the Head of

Finance department.

Head of Research & Development

He/She is responsible for the Research and development program and brings new ideas and fresh

food related research that consumers satisfy more by giving them more freshly and appetite food.

Head of Marketing & PR

He/She is responsible for making policies in areas of marketing and PR. He/ She work on

advertising, coupons, increase food services, promotion, and how we can increase our sales.

Security Guard

A security guard is responsible to make sure to check all entrants with a metal detector.

Peon

A peon is responsible for all the office chores, dusting and cleaning.

Assessment of Risk

The potential hazard to the company is the entry of a new competitor or the existing firms expand

there business and enter in this field.

30

FINANCIAL PLAN

31

Financial Plan:

Basically, the Basket of GoodieZ (BOG) financial plan consists of three financial statements, the

income statement, the cash flow projection and the balance sheet and a brief explanation/analysis

of these three statements.

Basket of GoodieZ (BOG) business expenses as broken into two categories; your start up

expenses and your operating expenses.

All the costs of getting your business up and running go into the start up expenses category.

These expenses may include:

Business registration fees

Business licensing and permits

Starting inventory

Rent deposits

Down payments on property

Down payments on equipment

Utility set up fees

This is just a sampling of start up expenses; your own list will probably expand as soon as you

start writing them down.

Operating expenses are the costs of keeping your business running. Think of these as the things

you're going to have to pay each month. Your list of operating expenses may include:

Salaries (yours and staff salaries)

Rent or mortgage payments

Telecommunications

Utilities

Raw materials

Storage

Distribution

Promotion

Loan payments

32

Office supplies

Maintenance

Once again, this is just a partial list to get you going. Once you have your operating expenses list

complete, the total will show you what it will cost you to keep your business running each year.

Multiply this number by 3, and you have a 3 years estimate of your operating expenses. Then add

this to the total of your start up expenses list, and you'll have a ballpark figure for your complete

start up costs.

Now let's look at putting some financial statements for your business plan together, starting with

the Income Statement.

Important Assumptions

The following table details important financial assumptions for BOG.

General Assumptions

2011 2012 2013

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

Break-even Analysis

The Break-even Analysis indicates BOG will need to sell approximately Rs.4,900 in

baskets per month to break even.

Break-even Analysis

Monthly Revenue Break-

evenRs.4,915

Assumptions:

Average Percent Variable

Cost34%

Estimated Monthly Fixed Rs.3,223

33

Cost

Projected Income Statement

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss

2011 2012 2013

Sales Rs.43,545 Rs.93,319 Rs.109,910

Direct Cost of Sales Rs.14,989 Rs.26,328 Rs.34,022

Other Rs.0 Rs.0 Rs.0

Total Cost of Sales Rs.14,989 Rs.26,328 Rs.34,022

Gross Margin Rs.28,556 Rs.66,991 Rs.75,888

Gross Margin % 65.58% 71.79% 69.05%

Expenses

Payroll Rs.31,500 Rs.39,000 Rs.39,000

Sales and Marketing and Other Expenses Rs.1,200 Rs.1,200 Rs.1,200

Depreciation Rs.655 Rs.672 Rs.672

Leased Equipment Rs.0 Rs.0 Rs.0

Utilities Rs.0 Rs.0 Rs.0

Insurance Rs.600 Rs.600 Rs.600

Rent Rs.0 Rs.0 Rs.0

Payroll Taxes Rs.4,725 Rs.5,850 Rs.5,850

Other Rs.0 Rs.0 Rs.0

Total Operating Expenses Rs.38,680 Rs.47,322 Rs.47,322

Profit Before Interest and Taxes (Rs.10,124) Rs.19,669 Rs.28,566

EBITDA (Rs.9,469) Rs.20,341 Rs.29,238

Interest Expense Rs.0 Rs.0 Rs.0

Taxes Incurred Rs.0 Rs.4,917 Rs.7,261

Net Profit (Rs.10,124) Rs.14,752 Rs.21,305

Net Profit/Sales -23.25% 15.81% 19.38%

34

Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow

2011 2012 2013

Cash Received

Cash from Operations

Cash Sales Rs.43,545 Rs.93,319 Rs.109,910

Subtotal Cash from Operations Rs.43,545 Rs.93,319 Rs.109,910

Additional Cash Received

Sales Tax, VAT, HST/GST Received Rs.0 Rs.0 Rs.0

New Current Borrowing Rs.0 Rs.0 Rs.0

New Other Liabilities (interest-free) Rs.0 Rs.0 Rs.0

New Long-term Liabilities Rs.0 Rs.0 Rs.0

Sales of Other Current Assets Rs.0 Rs.0 Rs.0

Sales of Long-term Assets Rs.0 Rs.0 Rs.0

New Investment Received Rs.0 Rs.0 Rs.0

Subtotal Cash Received Rs.43,545 Rs.93,319 Rs.109,910

Expenditures 2001 2002 2003

Expenditures from Operations

Cash Spending Rs.31,500 Rs.39,000 Rs.39,000

Bill Payments Rs.18,916 Rs.44,238 Rs.49,978

Subtotal Spent on Operations Rs.50,416 Rs.83,238 Rs.88,978

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out Rs.0 Rs.0 Rs.0

Principal Repayment of Current

BorrowingRs.0 Rs.0 Rs.0

Other Liabilities Principal Repayment Rs.0 Rs.0 Rs.0

Long-term Liabilities Principal

RepaymentRs.0 Rs.0 Rs.0

Purchase Other Current Assets Rs.0 Rs.0 Rs.0

Purchase Long-term Assets Rs.0 Rs.0 Rs.0

35

Dividends Rs.0 Rs.0 Rs.0

Subtotal Cash Spent Rs.50,416 Rs.83,238 Rs.88,978

Net Cash Flow (Rs.6,871) Rs.10,081 Rs.20,932

Cash Balance Rs.15,779 Rs.25,860 Rs.46,792

Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet

2011 2012 2013

Assets

Current Assets

Cash Rs.15,779 Rs.25,860 Rs.46,792

Inventory Rs.3,507 Rs.6,160 Rs.7,960

Other Current Assets Rs.0 Rs.0 Rs.0

Total Current Assets Rs.19,286 Rs.32,020 Rs.54,752

Long-term Assets

Long-term Assets Rs.2,000 Rs.2,000 Rs.2,000

Accumulated Depreciation Rs.655 Rs.1,327 Rs.1,999

Total Long-term Assets Rs.1,345 Rs.673 Rs.1

Total Assets Rs.20,631 Rs.32,693 Rs.54,753

Liabilities and Capital 2011 2012 2013

Current Liabilities

Accounts Payable Rs.6,105 Rs.3,415 Rs.4,170

Current Borrowing Rs.0 Rs.0 Rs.0

Other Current Liabilities Rs.0 Rs.0 Rs.0

Subtotal Current Liabilities Rs.6,105 Rs.3,415 Rs.4,170

Long-term Liabilities Rs.0 Rs.0 Rs.0

Total Liabilities Rs.6,105 Rs.3,415 Rs.4,170

36

Paid-in Capital Rs.28,000 Rs.28,000 Rs.28,000

Retained Earnings (Rs.3,350) (Rs.13,474) Rs.1,278

Earnings (Rs.10,124) Rs.14,752 Rs.21,305

Total Capital Rs.14,526 Rs.29,278 Rs.50,584

Total Liabilities and Capital Rs.20,631 Rs.32,693 Rs.54,753

Net Worth Rs.14,526 Rs.29,278 Rs.50,584

Business Ratios

The ratios table compares BOG's estimated growth, balance and profit ratios to the

industry standard for miscellaneous personal services.

Ratio Analysis

2011 2012 2013 Industry Profile

Sales Growth 0.00% 114.30% 17.78% 17.90%

Percent of Total Assets

Inventory 17.00% 18.84% 14.54% 4.60%

Other Current Assets 0.00% 0.00% 0.00% 37.10%

Total Current Assets 93.48% 97.94% 100.00% 52.80%

Long-term Assets 6.52% 2.06% 0.00% 47.20%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 29.59% 10.45% 7.62% 33.90%

Long-term Liabilities 0.00% 0.00% 0.00% 28.00%

Total Liabilities 29.59% 10.45% 7.62% 61.90%

Net Worth 70.41% 89.55% 92.38% 38.10%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 65.58% 71.79% 69.05% 0.00%

Selling, General & Administrative Expenses 88.87% 55.98% 49.55% 72.70%

Advertising Expenses 0.00% 0.00% 0.00% 2.20%

Profit Before Interest and Taxes -23.25% 21.08% 25.99% 4.00%

Main Ratios

Current 3.16 9.38 13.13 1.81

37

Quick 2.58 7.57 11.22 1.33

Total Debt to Total Assets 29.59% 10.45% 7.62% 61.90%

Pre-tax Return on Net Worth -69.69% 67.18% 56.47% 6.30%

Pre-tax Return on Assets -49.07% 60.16% 52.17% 16.60%

Additional Ratios 2011 2012 2013

Net Profit Margin -23.25% 15.81% 19.38% n.a

Return on Equity -69.69% 50.38% 42.12% n.a

Activity Ratios

Inventory Turnover 10.80 5.45 4.82 n.a

Accounts Payable Turnover 4.10 12.17 12.17 n.a

Payment Days 27 42 27 n.a

Total Asset Turnover 2.11 2.85 2.01 n.a

Debt Ratios

Debt to Net Worth 0.42 0.12 0.08 n.a

Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital Rs.13,181 Rs.28,605 Rs.50,582 n.a

Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.47 0.35 0.50 n.a

Current Debt/Total Assets 30% 10% 8% n.a

Acid Test 2.58 7.57 11.22 n.a

Sales/Net Worth 3.00 3.19 2.17 n.a

Dividend Payout 0.00 0.00 0.00 n.a

38

APPENDIX

39

Documents

Entrepreneurship