Business Plan On Hand Made Items

Creative, We Make Your Special for You!
We Make Your Special for You!
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MBA 3RD - ENTREPRENEUR PROJECT
For
“ Creative”
Presented to:
Ms Qurat-ul-Ail
Presented By:
VITALS
Shaher Bano Hashmi 09041020-010
Syeda Anam Rehna 09041020-034
Nayaab Zafar 09041020-002
Anam Naz 09041020-017
Shamma Noreen 09041020-016
Submission Date: January 17, 2010
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DEDICATION
“Dedicated to the hope

that is still alive in our hearts
for the better future of
our beloved homeland—PAKISTAN”
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ACKNOWLEDGEMENT
All the acclamation and appreciation is for Almighty Allah the most merciful, gracious and
beneficent who is entire source of all the knowledge and wisdom endowed to mankind. All the
prayers are forever in the name of Almighty Allah, who helped us in setting goals and objectives
and blessed us to reach the destination. Without His assistance none is capable of
accomplishment.
We would like to thank The Business Administration Department for giving us the opportunity
and providing us with a platform to prove our mettle. We would be doing injustice without
mentioning the name of the person who helped us throughout the semester and made us
understand the major concepts of Entrepreneurship. So our special thanks go to Ms Qurat-ul-Ain.
Heartiest gratitude and compliments to our Parents, without their continuous love and
encouragement we could not complete this task and in the end we would like to thank our worthy
teachers without them we won’t be able to complete this task.
The Project in hand is the collection of our observation and research. The sources of
information for the preparation of project include a thorough research conducted on the internet,
information obtained from the Gujrat Chamber of Commerce, prestigious help by well known
business “Eventive” involved in handmade items.
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TABLE OF CONTENTS
CONTENTS Page No.
Dedication iii
Acknowledgment iv
Table of Contents v
Executive Summary vii
Introduction 1
Business description 2
Vision 3
Mission 4
Over All Objectives 5
Specific Objectives 6
Strategic Goals 7
Segmentation 8
Industry Analysis 8
 Economic Analysis 8
 Over All Market Analysis 9
 Specific Market analysis 9
 Competitive Analysis 10
 Competitive Grid 11
 Macro Environment 12
Organizational Plan 13
 Form of Business 13
 Partnership deed 13
 Organizational Hierarchy 14
 Authorities and Responsibilities 15
Production Plan 17
 Manufacturing 17
 Merchandising 18
 Strategic Production Resources 18
Marketing Plan 19
 Product 19
 Price 22
 Pricing strategies 22
 Pricing structure 23
 Place 23
 Distribution Channels 24
 Promotion 25
Financial Plan 28
SWOT Analysis 33
Critical Risk Factors 34
Exit Strategies 36
Annexure
 References 37
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INTRODUCTION
A wedding, the birth of a child, a new home, an important birthday… All of these are events that
mark our lives forever and should be celebrated with a gift you can cherish for a lifetime. Every
person is in search of attractive and innovative products for purpose of exchanging gifts. There
are numerous businesses offering a variety of products for customers to fulfill their needs. But
demand for handmade gift items is substantial. People like to purchase handmade items as gift
because when an item is handmade, a little part of the creator of that piece goes into it. Artists
put their ideas, personality, style, and often blood, sweat, and tears into their work which makes
that work unique.
The fashion for handmade items as a gift is Evergreen. People prefer to purchase handmade stuff
as it provides them with a level of individuality which is not available from mass market
retailers. They prefer personalized gifts on lavish items.
An informal survey of Gujrat showed that there are many House girls who have keen interest in
making different handmade items. They duly create many innovative ideas but unfortunately
most of them have no platform to expose their talent and skills.
Thus idea of “Creative” is to establish an outlet that makes available a variety of handmade items
under one roof and to provide a platform that will facilitate both i-e talented house girls and
customers. By offering a variety of handmade products to customers having demand for them we
will enable these homemade girls to earn being at home.
In order to check the demand and potential for our idea we conducted a survey in our target
market. We came to know that it is a good time to launch such a project as people showed a high
interest for it. First of all we are going to launch it only in the Gujrat. In future, in response to its
scope we shall expand it throughout province of Punjab. After achieving this long term object
our intention is to enter into international market.
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BUSINESS DESCRIPTION
Idea of “Creative” is to provide a large variety of innovative and creative handmade items under
one roof. The name of our organization is “Creative” which is actually an effort to provide
exceptional items for special celebrations and occasions. It is basically a manufacturing as well
as merchandising business in which we are going to present a wide assortment of handmade
items.
We have started our business as partnership business. We are five partners who share equally in
startup capital and hence are entitled to share equally in profits. Any other need for capital will
be entertained by respective bank.
Point Of Uniqueness:
All the things and the services we are providing may not be unique according to the range of
things now days. Present businesses may be providing a large variety of gift items But the
difference is there that the things provided by us are purely handmade. Creative ideas are used to
turn a rubbish and useless stuff into innovative design. There is no such business prevailing in
our target market. This is the point of uniqueness in the particular geographical area in which our
business lies.
Products:
A variety of hands made items are provided under one roof which include:
 Handmade Gift boxes

 Handmade Wedding boxes
 Handmade Cards
 Handmade Baskets
 Handmade Candles
 Handmade Jewelry
 Handmade decoration pieces
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VISION OF CREATIVE
To become the creative house of first choice in our chosen areas
by building beneficial and lasting relationship with customer
through a process of continuous improvement.
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MISSION STATEMENT
To convert the creativity into reality in hand!
OVER ALL OBJECTIVES

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Main Objectives:
Main objective of Creative is to glorify the different occasions of our customers by providing
exclusive and quality products. Our modish style reflects a sense of taste that urges the customer
to express his or her feelings by selecting a gift from a variety of innovative product for their
dear ones.
Commitment To Well-Being
We believe well-being is the cornerstone of personal and professional growth. Without

personal and professional well-being our mission cannot be achieved.
Commitment To The Team Objective
We believe in total commitment to the team. The team objective is a guide for us to
follow in our service to our clients, support of each other, and team growth.
Commitment To Goal Attainment
We believe every individual should have personal and economic goals. A joint effort will
be put forward to identify and achieve our long-term objectives.
Commitment To Our Time Management System
We believe our time management system should be utilized in all business activities to
provide maximum efficiency and effectiveness for our customers. We will move towards
managing our time and setting specific goals within that time.
Commitment To Excellence In All We Do
our philosophy is to achieve excellence in all that we do. All efforts of our team are
directed towards achievement of maximum quality.
Commitment To Incredible, Outstanding, Unbelievable customer Service
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We believe in extending such incredible service to all customers that they feel real sense
of creativity in our establishment. We constantly anticipate, meet, and exceed our
customers' expectations.
Commitment To Value-Added Service
Value-added means doing and giving more than what is expected. We believe each of us
needs to go above and beyond the call of duty. By developing creative ideas value
addition will be ensured in our products.
Commitment To Innovation
We believe our strength lies in our passion to implement new ideas and embrace change.
We realize that innovation involves risk of failure, but we choose to face risk of failure in
our pursuit of success rather than fail passively
Specific Objectives:
Short Term Objectives:

To make successful entry in Gujrat market
To provide a wide range of Innovative and creative products
To Act as a team
Long Term Objectives:

To expand business in other cities of Punjab especially in Lahore, Gujranwala and
Sialkot.
To satisfy customers who use our products and services every time
To provide a Commercial plate form to young Home-Artisans
To be socially responsible by utilizing the waste materials for making new and
innovative products
STRATEGIC GOALS
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Through strong commitment and efficient strategic goals, “Creative” will be first choice of
customers and be recognized as a business leader. We feel very confident that the goals can be
reached. These Strategic goals include following:
Customer satisfaction
Building strong customer relationships
Making contracts with different stakeholders (Suppliers)
Maximize the switch over Cost
Capturing Maximum Market Share
Plans To Achieve Those Goals
The very first result that a customer wants is that, satisfaction and contentment from the product.
Customer will only visit for second time, if he was satisfied fully the first time. By providing
innovative and quality products Creative can build strong relationships with customers.
Keeping our suppliers with us for a long period of time is a challenging task. Contracts will be
made to home-artisans to provide their products only to “Creative”.
After building relationship with customers and suppliers, our main focus is to maximize the
switch over cost of the customer. By issuing annual, semiannual and quarterly discount offers we
will bind the customer to carry with us. When we are successful to retain the old customer for the
maximum period of time it will be easy for Creative to focus and spend more in attracting the
new customers and to capture the maximum share of the market.
SEGMENTATION
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Creative’s target segment are all the people of Gujrat, who love creativity, which includes upper,
middle and lower middle class. Along with this Creative has segmented its target segment into
the following category:
Geographical Segmentation
Creative is a start up business; therefore it has geographically segmented its target market. This
geographical region is Gujrat.
Psychological Segmentation
Psychologically targeting, Creative is concentrating its focus on Elite class, Middle Class and
Lower Middle class.
INDUSTRY ANALYSIS
Economic Analysis:
The economic position of the country as well as the people allows this industry to flourish and
grow. A quick view on main glimpse on economic position is as follow:
Real GDP grew by 4.3percent in 2009-10 as against 2.7percent last year

Consumer Price Index (CPI) inflation is estimated to have declined from 20.3 percent
in December 2009 to 13.60 percent in December 2010.
Pakistan’s per capita real income has risen by 0.4 percent in 2009-10 as against 0.3
percent last year. Per capita income in dollar term rose from $ 1046 last year to $ 1051 in
2009-10, thereby showing marginal increase of 0.4 percent.
The industry of handmade items is mostly operated in local environment. And in this perspective
the rate of advancement is slow. However, there is possibility of high advancement in the market
because a big segment of market has psyche of been attracted by creative handmade talent much
quickly. Due to that, industry contains more potential and depth to invest in that business.
As per the rules and regulations of the government of Pakistan, there is not any restriction on
establishing such business and the working. Our firm is established according to Partnership act
1932.
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Overall Market Analysis
Market for different handmade items is widespread in Pakistan. Despite of presence of different
manufacturers that provide a large variety of readymade item, demand for handmade items is
substantial. People prefer handmade items for exchange of gifts or fashion wears because they
provide a sense of individuality and uniqueness. This tendency of people indicates towards
potential and depth to invest in this business. Although the handmade items industry is spread in
all over the country, it is mostly operated in local environment.
There are no big players in market of this industry .Most of operator in markets are having their
businesses as sole proprietorship or partnership. About 70% of players in Market are sole
proprietors. This trend in industry caused “Creative” to be a partnership business.
Due to advancement in technology and rapid adoptability of internet, this industry is being
promoted online. Major players in Market use the internet based promotional tools. They have
published their products online to attract the potential customers.
Specific Market Analysis
As mentioned earlier, handmade items industry is mostly operated in local environment so

“Creative” has also targeted a small local segment of Market i-e Gujrat city.
Economic condition of people living in Gujrat is a good signal for business. Per capita income of
people in Gujrat is 45000 PKR ,which indicates high purchasing power of residents. Such
economic condition supports skimming pricing strategy of “Creative”.
Competitive position is also in favor of our business in market. Although there are many players
in the market offering same products but no one is offering the same things in terms of
handmade creative ideas. As there is no such business already existing in market so there is no
direct competitor.
Competitive Analysis:
Competitive analysis involves a look on competitors of Creative and competitive position of

creative. While discussing the competitive position of “Creative” following factors can have
greatly influence:
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Threat of new entrants
Bargaining power of buyer
Bargaining power of supplier
Rivalry among competitors
Substitutability
Threat Of New Entrant (HIGH)
Threat of new entrants for Creative is high. This is because trend for use of handmade items is
evergreen. Start up cost is also low which shows that there are low entry barriers. This attracts
the new entrants to get enter into this business.
This threat can be lowered by maintaining a sustainable competitive advantage of providing

quality products and innovative designs.
Rivalry Among Competitors (LOW)
Rivalry among competitors is low for Creative as there are a few competitors in whole industry.
In target market no direct competitor exists so Creative has a golden opportunity to capture
maximum market share.
Substitutability (HIGH)
Threat of substitute for Creative is very high. There are a lot of substitutes available in market for
products of Creative. High prices of Creative than prices of readymade items in market have
lowered switching cost for Creative’s products.
Bargaining power of Buyer (HIGH)
Bargaining power of the buyer with Creative is high because of the availability of so many
substitutes in the market.
Bargaining Power Of The Supplier (LOW)
Bargaining power of the supplier is low. Because of availability of large number of suppliers in
the market, Creative is in better position to defend its interest. There is significant number of
home artisans who are willing to supply their products to Creative for sale. Creative’s power to
negotiate with them in its own favor is high.
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COMPETITIVE GRID
COMPETITIVE FORCES THREAT TO INDUSTRY PROFITABILITY

LOW MEDIUM HIGH
THREATS OF NEW 
ENTRANTS
BARGAINING POWER OF 
BUYER
BARGAINIG POWER OF 
SUPPLIER
RIVILARY AMONG 
COMPETITORS
THREATS OF SUBSTITUES 
MACRO ENVIRONMENT
Macro environment of Creative includes the following factors:
Political Forces
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Legal & political forces can highly influence any business. In Pakistan, there is so much political
instability which directly affects economy because purchasing power of people will be reduced.
It can highly influence Creative to operate. Coping with this threat is a challenge for Creative.
Technological Forces
Technological factor is involved in this project in a way that customers can order products online
for ceremonies. No rocket science will be adopted by Creative for production process. Basically,
idea is providing handmade items, so creative ways of utilizing waste material will be explored.
Social Forces
Social forces of any country show how the values, needs and culture of that country’s people can
affect the organization. In case of Creative this factor is highly in favor of organization because
people have great tendency to like hand work for gifts and fashion wears.
Economic Forces
Economic forces of any country can affect the availability, production and distribution of
resources among competing users. Now a day in Pakistan inflation is prevailing and it can affect
Creative to a great extent. Cost of doing business can be increased. However this threat is
minimized by adopting boot strapping strategy.
ORGANIZATIONAL PLAN
Form of Business:
Creative is a partnership business in which 5 partners are contributing towards capital and
sharing the proceeds of business. It has been established on base of Partnership act, 1932.
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PARTNERSHIP DEED:
The partnership deed includes the basic agreement between the partner explaining their duties
and liabilities. It also explain the which function will be performed by whom.
Members
We are five main members of the partnership firm who shares equally in the capital and profit.
These members include:
Names Capital Invested

Shaher Bano Hashmi 1.25 lac
Anam Naz 1.25lac
Anam Rahna 1.25lac
Nayab Zafar 1.25 lac
Shamma Noreen 1.5 lac
Duties and Responsibilities
Duties and responsibilities of each member are assigned according to the interest and
qualification of each of the member. Other criterion is that, if someone has specialized in some
field then he will be proffered. Additional benefits and remuneration will be paid on giving extra
services and performing additional work not included in the basic job specification.
Liability
Liability of all the members is unlimited. Personal property will also be held liable to pay the
debts. This clause is included to maximize the interest of all members in the venture. The more
the interest is the more the effort will be added by the members. All the members have the basic
right to point out the steps taken by other members in the meeting. And the others have to answer
in a reasonable manner.
Decision criteria
There is a decentralized approach in decision making. Every member is free to take decision in
his relevant department without the consent of others. But decision about the whole firm can’t be
taken without the consent of every member. Special meeting will be arranged and the majority
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decision will be approved. The decision about working of the firm required the acceptance of
three out of five while the major decision about the firm like big investment, changing the form
of business required four out of five members acceptance.
Termination of partnership
If any partner wants to leave the firm she will also be held liable in the case of insolvency of the
firm for the year, if any. This clause is added to make strong the firm and to avoid any kind of
fraud.
Allocation of assets/ repayment
The payment of all invested capital will be paid in installments to leaving partner. The
maximum time for repaying all amounts will be six months. The will be no claims on the
revenues and profits from the date he left the firm. There will be revised partnership deed after
one year.
ORGANIZATIONAL HIRARCHY
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Manager AUTHORITIES AND RESPONSIBILITIES
(JOB SPECIFICATION)
Creative will be run by the current team, composed of five members. Each of team members has
developed skills in specific areas that will help the firm to reach its goals. There will not be
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involvement tremendous financial resources in the human resource field because the firm intends
to remain closely supervised for the first couple of year.
Shaher Bano
Finance manager
The manager alone looks after all jobs of accounts and approves all investment decisions on the
basis of their logical and analytical analysis. She alone is responsible of recording all revenues
and making all expenses accordingly. He has to maintain all financial statements of the firm,
which are required for auditing.
Nayab Zafer
Marketing Manager
Manager of marketing department is mainly responsible for all advertisement and promotions of
business and to take feedback of the customers. Market surveys will be made by her and changes
according to the demand of customer will be made. The manager will be the final authority to
take decision of all the matters of that department. The complaints of customers will be discussed
in monthly meeting and the manager is answerable to that.
Anam Rehna
Supply-chain Manager
Supply-chain manager has duty to deal with the suppliers and contractors for the raw material
and final products. She has authority to take the decision about the matters of that department.
She can change the suppliers and contractors according to the requirements of raw material and
products quality. Maintaining strong Relationships with house artisans who are providing their
products to our business is also her responsibility.
Shama Noureen
Production Manager
Manager of production department is responsible to supervise all the activities of production
process. She has the authority to evaluate the performance and quality of products being
produced. She is also responsible to approve new designs of products to be produced.
Anam Naz
Operational Manager
Operational manager is mainly responsible for all operations that are performed on daily basis.
She is responsible to deal with Customers and the courier company for distribution of products
that are ordered by the customers in other cities. She is supposed to keep a deep eye on
production process by girls and all daily happenings in outlet.
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OTHER JOBS
Guard
“Creative” needs only one guard for its security. He will be responsible of providing security for
outlet during business. He must have training to use weapons and retired army men will be
preferred.
Sweeper
One sweeper will be hired. He is required to maintain the cleanliness of whole outlet.
Office Boy
An office boy will assist operational manager in her routine business works especially for
performing outdoor tasks.
PRODUCTION PLAN
Manufacturing
Our products will be manufactured in our production outlet. There will be a separate portion
behind outlet that will serve as production area. We will produce the products our self. A joint
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contribution will be made by all five members for production process. All of girls will work
directly under authority of operational manger. Creative ideas for innovative products will be
explored through brain storming sessions.
Production process of Creative involves following steps:
Purchase of material and accessories
For making cards and shopping bag, chart paper is essential thing. Satin ribbons, shimmering
bows, Laces, glue and other material will also be needed to make glorious products. Including all
these, other necessary accessories will be purchased from our regular suppliers in bulk so that
cost minimization can be made. Necessary raw material required for making different types of
“Dough“ will also be purchased. To produce unique styles of candles, wax gel will be purchased
in bulk along moulds of different designs.
Other than above material, waste jewelry accessories will be acquired to be used as base for
handwork.
Production Process
Cards of inspiring designs, gift boxed of various sizes and unique wedding boxes will be made
through handwork and using appropriate stuff.
Dough will be kneaded in quantity enough for use in whole months. Once the dough is prepared,
it will be kept in special greased containers. Different jewelry items will be made using moulds
of various sizes. Artistic designing will be made on these items using dough flowers.
Using handwork and special techniques wax gel will be converted into candles of different
designs and will be embellished using different accessories.
Packing:
Different gift and jewelry items will be made available in striking packing. Creative’s monogram
will be printed on each item’s packing going to be sold at outlet.
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Merchandizing:
Creative has also planned to acquire finished products from house hold artisans and to sell them
on reasonable prices for earning profit for both parties. Thus Creative is not only earning for
itself but also serving as a platform for those innovators who want to commercialize their
handmade products. Supply Chain Manager is responsible to seek and develop good relations
with these suppliers.
Strategic Production Resources
Designs and artistic techniques of production are the basic and primary assets of creative. With
these two resources we will be able to develop the most unique and genuine variety of products
in the marketplace.
Firm’s creative management is also a strategic resource for Creative. Management team is
required to be innovative and has a passion to pursue opportunities related to hand-made items.
As the business grows we will carry on developing new designs and will strive to hire people
who also possess the drive to continue the Creative’s goal to develop the new designs and bring
innovation.
MARKETING PLAN
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The most important plan for a new starting venture is a marketing plan because without the
marketing plan, a business can never exist. The marketing is a main portion, and the success of
any venture heavily relies on its market strategies.
Creative is going to make its customers aware through efficient marketing plan that we value our
customer at each and every point. Through effective marketing strategies it will be realized to
customers that if they want to add seven colors of rainbow in the precious moments of their life
then they must have the spell bound charm of Creative. "Creative’s marketing efforts focus on
making its customers realize that:
We are offering variety of imaginative hand-made articles that can embellish their special
movements
Our ideas are creative and innovative that is what others are lacking.
We are going to establish a new trend in that society by giving variety of handmade
ingenious items under one roof.
PRODUCT
A list of magnificent products of creative involves following product lines:
Handmade Cards
Handmade Gift boxes
Handmade Wedding boxes
Handmade Shopping Bags
Handmade Candles
Handmade Jewelry
Handmade decoration pieces
Handmade Cards
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Handmade greeting cards in a variety of styles and sizes are offered for special occasions.
Unique ideas are used to embellish the cards for making special movements more special.
Birthday cards, wedding cards, anniversaries card, friendship cards and beautiful cards for many
other special events are offered.
Wedding Boxes
Gorgeous Boxes of different sizes to carry different things that are usually used in wedding
ceremonies as gifts are offered by creative. Wedding gifts are always very appealing when they
come in adorable packaging. Our unique wedding gift boxes will surely do the job of impressing
customers while reflecting their unique style.
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Handmade Shopping Bags
Our talented and creative team members have poured their
heart out to create the exotic collection of handmade
shopping bags. These handmade paper shopping bags are
made with durable and strong card papers that combine both
utility and aesthetics. All these handmade paper bags are
flawlessly designed with beautiful papers and meet the
demands of diverse clients.
Handmade Candles
Decorative candles are uniquely versatile decor items that
add a new look and spark to our home and our special events
as well. Buying the Decorative candles for your home or for
gifting to someone special, is the best thing you can do to
please yourself. Beautiful candles with innovative designs
are splendid offer by Creative.
Handmade Decoration Pieces
Different decoration pieces ornamented with beautiful work of handmade dough flowers to
decorate the houses and even for offices, are also included in creative’s offerings
Handmade Jewelry
Flashy & filled with stylish & elegance designs, different items of jewelry are offered. Rings, ear
rings, bangles and necklaces are included in offered jewelry item. All these items are
manufactured using different moulds and dough flowers.
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PRICE
Customer’s decision to purchase a product is greatly influenced by Price tag placed on it.
Creative has assigned reasonable and justified prices of its products which may realize the
customers that they have made their moments cherished in a unique way in very cheap prices.
Pricing Objectives
Creative is a new business in market with unique and innovative ideas. It wants to have high
growth rate hence it has to set that price for its product which gives maximum possible profits in
the initial couple of years.
Creative’s handmade products are more expensive than those from a factory assembly line, but,
for very good reasons. The extra time, effort, passion and expertise that goes into its handmade
products are what make them worth the extra price to buyers.
PRICING STRATEGIES
In pricing, Creative is focusing in the following strategies:
Market Skimming Strategy
Creative is using market skimming strategy in which it is offering high quality and creative
products on slightly increased prices than prices factory assembly line products. Creative want to
have maximum possible profit through introduction of its creative and unique ideas.
Product Bundle Pricing
In order to move stock that is kept as unsold inventory, Creative will use Product bundle pricing
strategy. It will combine several products that have left behind in stock in the one package and
will offer them on reduced rates so that potential loss of unsold inventory can be avoided.
Value Based Strategy
For the pricing of products, Creative is following the value based strategy. In order to cover up
the cost and to gain maximum possible profit, Creative has decided to take 40% markup on cost
price of each product. Such high rate of mark up is set on base of effective value of the customer
for handmade items.
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PRICING STRUCTURE
Name of items Price Mark Up

Greeting cards 100-150 35%
Wedding Boxes 200-250 35%
Gift Boxes 150-200 35%
Candles 350-400 35%
Decoration pieces 500-2000 35%
jewelry 500-1000 35%
Shopping bags 100-150 35%
PLACE
Creative has planned to acquire a Shop on rent in Sarwar Gold Plaza, Gujrat. It is situated at
centre of city. The main reason behind selecting this location is this, it is growing area for all
branded shops and it is now one of the best shopping place in Gujrat.
The shops like Breeze’s, Beeji’s, sStylo, Mother Care. Cash & carry, Adrees Cloth house,
Service and many other brands are by side with our outlet. So there are many chances that people
will visit our outlet along their shopping.
Address:
Sarwar Gold Plaza
Khawajgan road
Gujrat
Contact:
Email: info@creative.com.pk
Phone: 0333-8445025
0331-5832183
Web site:
www.creativeitmes.pk
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DISTRIBUTION CHANNELS
Initially Creative is operating only from one outlet, so it doesn’t have any complicated
distribution channel right now. Creative is mainly using the following approaches for
distribution:
Direct Selling
Creative will directly sell its products to target consumers. First it takes the raw material from the
suppliers. Using that raw material a variety of innovative and appealing products will be
produced on the outlet of it by its skilled staff. These products are sold to customer when he/she
visits the outlet. In direct selling following model is used by Creative:
Courier Service:
Creative will also conduct business online. Due to advancement in technology and rapid
adaptability of internet it has been crucial for it to expand its business activities over internet.
Online orders in response of effective electronic advertisement will be received and shipment of
these orders will be made through Courier Company.
Creative has following model for online trading:
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PROMOTION
Creative will use Marketing communication strategy for promotion of its products. This Strategy
involves promoting heavily to potential customers which will create a demand that will pull the
products through the distribution channels. A handsome amount is set aside from financial
resources for heavy promotion of business in starting years. For promotional activities unique
logo and corporate colors will be used in all means communications.
Following promotional tools will be used to build Brand image of creative in mind of customers:
ADVERTISING
Brochure
Brochures describing product specifications of Creative will be designed. Creative’s offering
along with its unique logo will be printed on it. These brochures will be distributed door to
door with help of local news papers including:
 Jang
 Nawa e Waqt
 Jazba
 Shana Bashana
Hoardings
The location where we’ll use hoardings for advertising of outlet along with estimated budget is
given bellow:
Hoarding Campaign for the First Month
LOCATION QTY. SIZE RATE

(RS.)
Fawara 01 60×24 10,000
Chowk
GTS Chowk 01 60×24 10,000
Jail Chowk 01 60×20 10,000
Total 03 - 30,000
30
Press Advertisement:
Press advertisements will be released in newspapers to which potential customers in target
market have easy access. Newspapers in which ads will be given are mentioned below along
their estimated cost:
Newspaper No. Cost/Ad

Daily Jang 1 35000
Daily N.Waqt 1 30000
Jazba 1 10000
Shana Bashana 1 8000
Total 4 83,000
Internet marketing
Today most effective way of advertisement is through internet. Creative has developed its own
Website at which products are published and online orders are taken. Other than developing its
own website, Creative has planned to promote its business through social networking sites.
Recently there is a great trend of public to move towards these sites to establish social networks.
Following are some a web point at which creative has decided to promote business by giving
business ads.
Web Point No Cost/Ad
Face Book 1 9000
Linked In 1 5000
Tagged 1 6000
Total 3 20,000
Give Aways:
Other than giving ads, Creative has planned to manage different online contest so that maximum
people may be attracted to web page. Exclusive surprise gifts will be given to winners of these
contests.
Transport advertising:
31
Creative logo along its message will be promoted through transport advertising. Such medium
for promotion is selected for conveying message to far areas of target market.
Broadcast Advertisement:
These days use of radio has been increased in young generation. In order to convey business
message to them, Creative has decided to give an ad on FM Awaz 105. Other than radio
advertisement ads will also be given on local cable channels.
Exhibition:
For bringing our offerings into knowledge of potential customers, Creative has decided to
participate in Exhibitions which are managed by chamber of Commerce for support of SMEs.
Note:
Here it should be noted that any combination of the above mentioned promotional channels will
be used depending upon the promotion costs involved therein.
FINANCIAL PLAN
32
Creative being a new business needs a high capital investment to recover its expenses like
advertisements, salaries along with the cost of production. Thus Creative is investing 625,000
PKR as its initial capital investment.
Sources of funds:
Creative has five active partners, who are fulfilling the whole capital requirements to meet its
startup cost. Capital Structure of Creative includes only Equity. No debt is included to raise
funds because it has an extra burden of expenses as interest, which results in lower profits.
Equity Structure
Names Capital Invested

Shaher Bano Hashmi 1.25 lac
Anam Naz 1.25 lac
Anam Rahna 1.25 lac
Nayab Zafar 1.25 lac
Shamma Noreen 1.25 lac
Budget for production of units:
JA FE MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total
N B
Sales 100 130 140 145 145 155 160 165 175 185 190 200 1890
(Estimated)
+Ending 10 20 25 20 15 25 25 30 35 40 40 45 -
Inventory
Units 110 150 165 165 160 180 185 195 210 225 230 245 -
Available
For Sale
-Opening 0 10 20 25 20 15 25 25 30 35 40 40 -
Inventory
Units To Be 110 140 145 140 140 165 160 170 180 190 190 205 1935
Produced
Estimated Production Cost
33
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total
Material 2310 2940 3045 2940 2940 3465 3360 3570 3780 3990 3990 4305 40635
Laces 2640 3360 3480 3360 3360 3960 3840 4080 4320 4560 4560 4920 46440
FOH 5000 6000 6500 6000 6000 7000 6500 7000 7000 7500 7500 8000 80000
Total 9950 1230 13025 12300 1230 14425 13700 1465 15100 16050 1605 17225 167075
0 0 0 0
Per Unit Cost
= Cost of units produced

Number of units produced
= 167075
1935
= 86.34
Estimated Operating Cost of Creative
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total
Rent 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000
Salaries 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 138000
Dep 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Advert 3000 5000 6000 4500 4500 5500 5000 5500 5500 6000 5000 4500 60000
Courier 500 1500 2000 1000 1000 1000 1500 2000 1500 2000 2000 2000 18000
Total 40000 43000 44500 42000 42000 43000 43000 44000 43500 44500 43500 43000 516000
PRO-FORMA INCOME STATEMENT
Following is Creative’s projected income statement based on estimated operating expenses.

Projected net profit is calculated from projected revenues less projected costs and expenses.
Pro-Forma Income Statement
34
Creative
For the period 2010-2011
Sales Rs 756000*
-CGS 163189
Gross profit 592810
Less Operating Expenses:
Rent 240000
Salaries 138000
Depreciation 60000
Advertisement 60000
Courier expenses 18000
Net profit transferred to B/S 76810
*Sales amount = Average sale prices x Estimated number of units sold
= 400 x 1890
= 756,000
PRO-FORMA BALANCE SHEET
A summary of a Creative’s financial position at end of year 2011 shows projected

assets, liabilities, and net worth of it. Pro Forma Balance Sheet of Creative is as follow:
Pro-Forma Balance sheet

Creative
35
As on 31st Dec, 2011
Assets Amount Liabilities Amount
Rs Rs
Fixed Assets Owner’s Equity
Gas generator 125,000 Sheher Bano 125000
Fixtures 100,000 Anam Naz 125000
Equipment 50,000 Anam Rehna 125000
Furniture 5000 Nayab zafer 125000
Digital camera 25000 Shama Noureen 125000
Computer 35000 Total Capital 625000
Total fixed assets 340,000
less Net Profit 76810
Depreciation 60000 280,000
Building security 100,000
Preliminary expenses
Advertisement 300000
Less amortization 60000 240,000
Current assets
Closing stock 3,886
Cash in hand 50,000
Bank Account 27,924
701810 701810
*Creative don’t have any account payable because we will pay cash on the daily basis.
PRO-FORMA CASH FLOW STATEMENT
CASH FLOWS STATMENT 3RD YEAR 2011-2012

Operating Profit 76,810
+Depreciation 60,000
Less cash flow from Operating activities
Stock (3,886)
Bank (27,924)
Building security (100,000)
Cash flow from capital Expenditure
36
Gas generator (125,000)
Fixtures (100,000)
Equipment (50,000)
Furniture (5,000)
Digital camera (25,000)
Computer (35,000)
Cash flow from Financing
Share capital 625,000
Net cash in hand 50,000
SWOT ANALYSIS
STRENGTHS
Innovative and Passionate partner

Huge Profit Margin
Strong market research before entry in the market.
First mover advantage to provide handmade unique item in targeted market
Operators have completed degree in Business Administration
Not necessary to rely on banks for startup finance
Provides discount for the regular customer.
37
Customer oriented.
Waste recourses are utilized in the best way.
Availability of significant sponsors.
On line handmade item purchasing facilities.
WEAKNESSES
Lack of practical experience in mass production of stock
Low profits in the early stages of the business.
Lack of awareness among public regarding the business.
Uncertainty about the business success.
OPPORTUNITIES
Level of the demand of cultural items is increasing day by day.

Drive away of Consumers from lavish items toward more personalized gifts.
No Direct Competitor in Gujrat market
Easy availability suppliers providing innovative products
People are fed up with consistency so handmade products can give them uniqueness.
Serving the under-served markets
THREATS
Decreasing purchasing power of people due to political instability in country.

Possibility of new entrants in the market due to low entry barriers.
Rapid use of readymade gift items in the society.
If any other outlet of handmade products is going to open then our market share will
reduce
CRITICAL RISK FACTORS

Risk Management:
The objective of risk management is to reduce different risks related to business. It may refer to
numerous types of threats caused by environment, technology, humans, organizations and
politics.
38
Critical Risks Analysis
For startup business there are many risks involved that are caused by different factors. The risks
which are analyzed by Creative are as follow:
 Management Risks
 Marketing Risks
 Operational Risks
 Financial Risks
Management Risk:
In this risk we realize that there may be any dispute in the management team due to any
unforeseen reasons which may result to terminate any of the members.
Remedy:
In this case when any of the management team members leaves the firm she is not entitled to use
the name of the firm. She cannot start the same business with any other name. Such risk is
attempted to be controlled by including exclusive clauses in partnership deed.
Marketing Risk:
In case of marketing we realize that there may be any fault in our marketing plan due to which
business can suffer.
Remedy:
For the backup of this risk we have different marketing plans with flexibility, as if in any case
plan A does not work the plan B will be executed.
Operational Risk:
There may be a risk which can disturb the operations of the business such as production. There
may be load shedding problem etc
Remedy:
39
For minimizing this risk we have adopted proactive measures by having firm’s own own
generator.
Financial Risk:
We realize that in case of termination of any member there is a risk of finance that she may take
her equity away which causes the business to suffer. Moreover startup capital may be proved
insufficient to cope with un expectancies.
Remedy:
To avoid this risk we have made certain clauses in our agreements that if any member decides to
leave the firm she will not take her equity out of the business immediately. The time period to
pay back the equity will be minimum 6 months. To meet unexpected financial needs, Creative
has asked for various sponsors.
EXIT STRATEGIES
Creative, after analyzing every risk and exit ways of the business, has devised an exit strategy in
case our idea of introducing handmade items does not work. The exit strategies of Creative are as
follow:
Legal documents of partnership will be signed by the partners that partnership will not be
resolved until 3 years.
After five years if any partner wants to exit then he has to inform to the organization at
least 6 months before.
40
If any partner exits from the business, she will get his or her share after 6 months
In case of losses every partner will be just liable for her share in organization.
In case of winding up the business amount received from sale of asset will be divided
among partners equally.
References:
Robert D. Hisrich, Michael P. Peters, Dean A. Shepherd, Entrepreneurship, 7th edition,

page 209-219, 233-255, 289-305
http://www.indexmundi.com/pakistan/gdp_real_growth_rate.html
http://www.ranchodelarte.com/articles/why-handmade-gifts-rock
www.Eventive.com
Personal Visit in fields
Discussions with respected teachers and seniors.
41
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Business Plan On Hand Made Items

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Business Plan On Hand Made Items

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Creative, We Make Your Special for You!

We Make Your Special for You!

Submission Date: January 17, 2010

“Dedicated to the hope

 Handmade Gift boxes

To become the creative house of first choice in our chosen areas

by building beneficial and lasting relationship with customer

through a process of continuous improvement.

To convert the creativity into reality in hand!

OVER ALL OBJECTIVES

We believe well-being is the cornerstone of personal and professional growth. Without

Commitment To The Team Objective

Commitment To Goal Attainment

Commitment To Our Time Management System

Commitment To Excellence In All We Do

Commitment To Incredible, Outstanding, Unbelievable customer Service

Commitment To Value-Added Service

Short Term Objectives:

Long Term Objectives:

Plans To Achieve Those Goals

Real GDP grew by 4.3percent in 2009-10 as against 2.7percent last year

Specific Market Analysis

As mentioned earlier, handmade items industry is mostly operated in local environment so

Competitive analysis involves a look on competitors of Creative and competitive position of

This threat can be lowered by maintaining a sustainable competitive advantage of providing

Rivalry Among Competitors (LOW)

Bargaining power of Buyer (HIGH)

Bargaining Power Of The Supplier (LOW)

COMPETITIVE FORCES THREAT TO INDUSTRY PROFITABILITY

Macro environment of Creative includes the following factors:

Names Capital Invested

Duties and Responsibilities

Allocation of assets/ repayment

Production process of Creative involves following steps:

Purchase of material and accessories

Strategic Production Resources

Handmade Decoration Pieces

Market Skimming Strategy

Product Bundle Pricing

Value Based Strategy

Name of items Price Mark Up

Hoarding Campaign for the First Month

LOCATION QTY. SIZE RATE

Jail Chowk 01 60×20 10,000

Newspaper No. Cost/Ad

Names Capital Invested

Budget for production of units:

Estimated Production Cost

Per Unit Cost

= Cost of units produced

Estimated Operating Cost of Creative

PRO-FORMA INCOME STATEMENT

Following is Creative’s projected income statement based on estimated operating expenses.

Pro-Forma Income Statement

*Sales amount = Average sale prices x Estimated number of units sold

PRO-FORMA BALANCE SHEET

A summary of a Creative’s financial position at end of year 2011 shows projected

Pro-Forma Balance sheet

PRO-FORMA CASH FLOW STATEMENT

CASH FLOWS STATMENT 3RD YEAR 2011-2012

Innovative and Passionate partner

Level of the demand of cultural items is increasing day by day.

Decreasing purchasing power of people due to political instability in country.