Pre-Feasibility Study Prime Ministers Small Business Loan Scheme

(Florist Shop)

Small and Medium Enterprises Development Authority Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan e Iqbal, Egerton Road, Lahore Tel 92 42 111 111 456, Fax 92 42 36304926-7 helpdesk@smeda.org.pk

REGIONAL OFFICE PUNJAB

REGIONAL OFFICE SINDH

REGIONAL OFFICE KPK

REGIONAL OFFICE BALOCHISTAN

3rd Floor, Building No. 3, Aiwan e Iqbal, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042)6304926-7 helpdesk.punjab@smeda.org.pk

5th Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 helpdesk-khi@smeda.org.pk

Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 helpdesk-pew@smeda.org.pk

Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 helpdesk-qta@smeda.org.pk

September 2013

Pre-Feasibility Study

Florist Shop

Table of Contents
1. DISCLAIMER ............................................................................................................................... 2 2. PURPOSE OF THE DOCUMENT ................................................................................................ 3 3. INTRODUCTION TO SMEDA ...................................................................................................... 3 4. INTRODUCTION TO SCHEME ................................................................................................... 4 5. EXECUTIVE SUMMARY ............................................................................................................. 4 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT .................................................................. 4 7. CRITICAL FACTORS .................................................................................................................. 5 8. INSTALLED & OPERATIONAL CAPACITIES ........................................................................... 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT AND POTENTIAL TARGET MARKETS ........................................................................................................................................ 5 10. 11. 12. 12.1. 12.2. 12.3. 12.4. 12.5. 12.6. 12.7. 12.8. 12.9. 12.10. 13. 13.1. 13.2. 13.3. 13.4. 13.5. 14. POTENTIAL TARGET MARKETS / CITIES .......................................................................... 5 RODUCTION PROCESS FLOW............................................................................................ 6 PROJECT COST SUMMARY ................................................................................................ 7 PROJECT ECONOMICS ...................................................................................................... 7 PROJECT FINANCING ........................................................................................................ 8 PROJECT COST ................................................................................................................ 8 SPACE REQUIREMENT ...................................................................................................... 8 FURNITURE & EQUIPMENT FOR THE SHOP AND W AREHOUSE .............................................. 9 COMMERCIAL VEHICLE REQUIREMENT ............................................................................. 10 RAW MATERIAL REQUIREMENTS...................................................................................... 10 HUMAN RESOURCE REQUIREMENT .................................................................................. 11 REVENUE GENERATION .................................................................................................. 11 OTHER COSTS ........................................................................................................... 12

ANNEXURE.......................................................................................................................... 13 INCOME STATEMENT ....................................................................................................... 13 CASH FLOW STATEMENT ................................................................................................ 14 BALANCE SHEET............................................................................................................. 15 USEFUL PROJECT MANAGEMENT TIPS ............................................................................. 16 USEFUL LINKS ................................................................................................................ 18 KEY ASSUMPTION ............................................................................................................. 19

Pre-Feasibility Study

Florist Shop

1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea and information on the said matter. Although, the material included in this document is based on data/information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision, including taking professional advice from a qualified consultant/technical expert before taking any decision to act upon the information. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

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2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document/study covers various aspects of project concept development, start-up, and production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in Florist Shop business by providing them with a general understanding of the business with the intention of supporting potential investors in crucial investment decisions. The need to come up with pre-feasibility reports for undocumented or minimally documented sectors attains greater imminence as the research that precedes such reports reveal certain thumb rules; best practices developed by existing enterprises by trial and error, and certain industrial norms that become a guiding source regarding various aspects of business set-up and its successful management. Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any Investment Decision.

3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs). With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives. Preparation and dissemination of prefeasibility studies in key areas of investment has been a successful hallmark of SME facilitation by SMEDA. Concurrent to the prefeasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services.

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4. INTRODUCTION TO SCHEME
Prime Ministers Small Business Loans Scheme, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially through National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL). Small business loans with tenure upto 7 years, and a debt : equity of 90 : 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).

5. EXECUTIVE SUMMARY
The pre-feasibility study is about Florist Shop business in the floriculture sector. The project Florist Shop is a retail outlet having warehouse with in-house living facility for workers to deal in a variety of fresh flowers, flower baskets, bouquets, event decoration and car decoration for weddings. The shop will be located in the developed urban areas of the region and cater to the needs of local customers as well as customers from outside of that particular location. The cost for setting up the proposed project is estimated at Rs. 1.58 million and will provide employment to eight (08) individuals. The project is proposed to be financed under Prime Minister Small Business Loan Scheme through 90% debt and 10% equity. The NPV is projected around Rs. 2.63 million, with an IRR of 50% and a payback period of 2.46 years. The estimated yield potential of the project varies according to the selected business dimensions including but not limited to business model, marketability, investment size, availability of raw material, HR skills & competencies and location. However, the estimated revenue of the proposed model would be Rs. 4.41 million in the first year. It is proposed that the status of this business should be a sole proprietorship.

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

The proposed business model is about a florist retail outlet with rental premises of 350 sq. ft. for retail operations and 1,125 sq. ft. for the purpose of warehouse with in-house living facility. The florist shop is assumed to achieve a sale target of 121,465 flowers/units in the first year of its commencement at 85% of its total capacity. However, the capacity utilization is assumed to be increased at the rate of five percent (5%) whereas, the prices of shop items will be increased at the rate of 10% per annum.

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A total funding of Rs. 1.58 million inclusive of the equity would be required to finance the main activities including furniture & fixture, shop equipment, vehicle and initial working capital for establishing florist shop business in the developed localities of the prospective region.

7. CRITICAL FACTORS
The key success factors of the proposed business model are as under: 1) Location and decor of the shop 2) Differential designs 3) Management of events 4) Availability of fresh flowers 5) Promotional activities

8. INSTALLED & OPERATIONAL CAPACITIES

A normal sized shop of 350 sq. ft. and warehouse / workers living facility of 1,125 sq. ft. primarily used for decoration stands, wreaths, stage arrangement etc. is proposed at a suitable location in the city to achieve the proposed sale target of 142,900 units (Roses, Glad, Tube Rose, Tulip, Basket & Bouquet, Events and Car Decorations), whereby, it is assumed that 121,465 units will be sold in year 1 at 85% of its capacity.

9. GEOGRAPHICAL POTENTIAL POTENTIAL TARGET MARKETS

FOR

INVESTMENT

AND

In line with the business nature, florist shop is proposed to be established in urban areas nearby event complexes, shopping malls and designated commercial areas for such purpose.

10.

POTENTIAL TARGET MARKETS / CITIES

All major commercial centers of medium and large cities of Pakistan in addition to following; Banquet Halls Commercial / Corporate Areas and Offices Main hotels / Restaurants Direct buyers of basket, bouquets and flowers. Direct event decoration orders. Party decorators, event organizer, and offices.

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11.

RODUCTION PROCESS FLOW

Contract Procurement of fresh flowers

Delivery / Packing

Transportation

Consumer sales, events supply, party/car decorators

Sorting of flowers, removal of leaves and making of flower baskets, bouquets & bunch

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12.

PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability of Florist Shop under the Prime Ministers Small Business Loan Scheme. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as appendix. 12.1. Project Economics

All the figures in this financial model have been calculated for a target of 142,900 units (Roses, Glad, Tube Rose, Tulip, Basket & Bouquet, Events and Car Decorations), whereby, it is assumed that 121,465 units will be sold in year one at 85% of its capacity. The following table shows internal rates of return and payback period.
Table 1: Project Economics

Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV)

Details 50% 2.46 Rs. 2,626,134

Returns on the shop and its profitability are highly dependent on the efficiency of differential designs, proper management of events, availability of fresh flowers, skilled work force and location of the shop. In case management of the shop is not efficient, they will not be able to cover the potential market and recover payments; hence cost of operating the business will increase. Similarly, using good quality flowers will be a better option for this investment.

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12.2.

Project Financing

Following table provides details of the equity required and variables related to bank loan;
Table 2: Project Financing

Description Total Equity (10%) Bank Loan (90%) Markup to the Borrower (%age/annum) Tenure of the Loan (Years)

Details Rs. 158,359 Rs. 1,425,235 8% 7

12.3.

Project Cost

Following requirements have been identified for operations of the proposed business;
Table 3: Capital Investment for the Project

Capital Investment Equipment for the Shop Furniture & Fixtures Pre-operating Cost Vehicle Total Capital Costs Initial Working Capital Total Project Cost

Amount (Rs.) 141,000 285,500 90,000 550,000 1,066,500 517,094 1,583,594

12.4.

Space Requirement

The area for shop has been calculated on the basis of space requirement for display of flowers and area for ware house/workers residence is calculated as per workers/ware house requirements. In this pre-feasibility study we assume to take shop and ware house/workers residence on rent. However, the shops operating in the industry do not follow any set pattern. Following table shows calculations for project space requirement.

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Table 4: Space Requirement

Space Requirement Shop Ware house/Workers residence Total Area

Area Required in Sq. ft 350 1,125

Rent / Sq.ft 86 10

Rent per Month (Rs.) 30,000 11,250 41,250

12.5.

Furniture & Equipment for the Shop and Warehouse

Following table provides list of equipment required for an average florist shop.
Table 5: List of Machinery and Equipment

Quantity Laptop (Used / New) Printer Telephone Set Furniture Set Interior Decoration for the Shop Refrigerator for Shop Air conditioner Fans and Lightening for Shop and Ware House Frame for decoration of events Generator for Outlet (3.8 KW) Total 5 1 1 1 1 1 1

Cost / Unit (Rs.) 40,000 15,000 1,000

Amount (Rs.) 40,000 15,000 1,000 75,600 92,500

40,000 50,000

40,000 50,000 27,400

6,000 55,000 61,000

30,000 55,000 426,500

These costs are based on the assumption that a setup will be required to establish a florist shop in a well organized way. Main cost for the shop is its interior designing cost, furniture set, designing frames; in this pre-feasibility study, 5 frames of different designs will be purchased for the decoration in events, although market practices is to take these frames on rent. Generator (3.8

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Florist Shop

KW) is required for the shop as flowers are highly perishable items and need low temperature therefore an air conditioner is also required for the shop.

12.6.

Commercial Vehicle Requirement

Office Vehicles required for the project are as follows:

Table 6: Office Vehicles Number Cost (Rs.) Amount (Rs.)

Suzuki Pickup (Used)

550,000

550,000

It is assumed that the used vehicle will be purchased from the market. One Suzuki pickup is sufficient for the access to Flower Mandi for fresh flowers and events management. 12.7. Raw Material Requirements

In florist shop business, the most critical inputs are fresh flowers. In this pre feasibility study, it is assumed that contract procurement would be made from the whole sale market. Following are the cost analysis of critical raw materials.
Table 7: Cost of Material

Unit Rose Glad Tube Rose Statice Tulip Baskets & Bouquet Events Car Decoration Total No No No No No No No No

Cost/Unit 2 20 2 3 5 100 5,000 750

Qty 51,000 17,000 34,000 17,000 17,000 6,800 40 60 142,900

Rs. 102,000 340,000 68,000 42,500 85,000 680,000 200,000 45,000 1,562,500

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12.8.

Human Resource Requirement

Table 8: Human Resource Requirement

Description Owner Manager Flower Decorator / Sales Men Helper Driver Total

No. of Employees 1 4 2 1 8

Salary per month 30,000 13,000 10,000 12,000 114,000

The table above provides details of human resource required to run a florist shop. Owner will perform the duties of procurement & marketing for the proposed business. Sales men are skilled flower decorators who would perform the duties at different events for decoration services and also work as sales-men on Florist Shop. Helper will provide support services to flowers decorators in events and also in sales at shop. A driver is compulsory for florist shop as flowers are procured from whole sale market and own transportation is economical in this case. Beside this in case of any event, driver will be responsible for logistics arrangement (Flowers, Frames etc.) and pick and drop for flower decorators. Salaries of all employees are estimated to increase at 10% annually. 12.9. Revenue Generation
Table 9: Revenue Generation

Product Rose Glad Tube Rose Statice Tulip Baskets & Bouquet Events Car Decoration Total Sales

Unit No No No No No No No No

Sales Price (Rs./Unit) 15 30 15 20 20 300 15,000 2,000 -

Units available for Sale 51,000 17,000 34,000 17,000 17,000 6,800 40 60 142,900

Units for Sale at Year 1 43,350 14,450 28,900 14,450 14,450 5,780 34 51 121,465

First Year Sales Revenue (Rs) 650,250 433,500 433,500 289,000 289,000 1,734,000 510,000 102,000 4,441,250

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The above table shows the details regarding sales / revenue of florist Shop for year 1 at a capacity of 85%. Major income of florist shop is from Basket and Bouquet and selling of single flowers. The capacity utilization will be increased at a rate of 5% while the price increase rate is assumed at 10%. Maximum 2 days inventory as finished goods proposed in this document.

12.10.

Other Costs

Other cost includes the cost of Rent of Shop & Ware house and commercial Vehicle running cost. Rental expense for florist shop is estimated at Rs. 495,003 per annum. Total running cost of official vehicle is estimated at Rs. 309,160 per annum.

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13.

ANNEXURE
Income Statement

13.1.
Income Statement

Revenue Cost of sales Cost of goods sold 1 Operation costs 1 (direct labor) Operating costs 3 (direct electricity) Total cost of sales Gross Profit General administration & selling expenses Administration expense Administration benefits expense Building rental expense Electricity expense (Worker's Residence) Decorated Cloths and Foam Expenses Travelling expense Communications expense (phone, fax, mail, internet, etc.) Office expenses (stationary, entertainment, janitorial services, etc.) Promotional expense Depreciation expense Amortization of pre-operating costs Subtotal Operating Income Gain / (loss) on sale of office equipment Earnings Before Interest & Taxes Interest expense on long term debt (Project Loan) Interest expense on long term debt (Working Capital Loan) Subtotal Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX

Year 1 4,416,576 1,320,747 859,200 288,000 2,467,947 1,948,630

Year 2 5,171,153 1,546,398 947,828 316,800 2,811,025 2,360,128

Year 3 6,004,381 1,795,569 1,040,126 348,480 3,184,175 2,820,206

Year 4 6,606,751 1,975,703 1,141,728 383,328 3,500,760 3,105,992

Year 5 7,267,426 2,173,273 1,252,889 421,661 3,847,823 3,419,603

Year 6 7,994,169 2,390,601 1,374,872 463,827 4,229,299 3,764,870

Year 7 8,793,586 2,629,661 1,508,731 510,210 4,648,602 4,144,984

Year 8 9,672,945 2,892,627 1,655,623 561,231 5,109,481 4,563,464

Year 9 10,640,239 3,181,890 1,816,817 617,354 5,616,060 5,024,179

Year 10 11,704,263 3,500,079 1,993,705 679,089 6,172,873 5,531,390

504,000 50,400 495,003 60,000 10,000 309,160 10,080 5,040 22,083 103,250 9,000 1,578,016 370,614 370,614 108,299 108,299 262,314 262,314

553,070 55,307 544,503 66,000 11,000 361,981 11,061 5,531 25,856 103,250 9,000 1,746,559 613,569 613,569 95,163 95,163 518,406 11,841 506,566

606,918 60,692 598,954 72,600 12,100 420,307 12,138 6,069 30,022 103,250 9,000 1,932,049 888,157 888,157 80,936 80,936 807,221 43,583 763,638

666,008 66,601 658,849 79,860 13,310 462,473 13,320 6,660 33,034 103,250 9,000 2,112,365 993,627 993,627 65,529 65,529 928,098 61,715 866,384

730,852 73,085 724,734 87,846 14,641 508,720 14,617 7,309 36,337 103,250 9,000 2,310,390 1,109,213 22,400 1,131,613 48,843 48,843 1,082,770 84,915 997,855

802,008 80,201 797,207 96,631 16,105 559,592 16,040 8,020 39,971 106,344 9,000 2,531,120 1,233,750 1,233,750 30,772 30,772 1,202,978 102,947 1,100,032

880,093 88,009 876,928 106,294 17,716 615,551 17,602 8,801 43,968 106,344 9,000 2,770,306 1,374,679 1,374,679 11,201 11,201 1,363,478 127,022 1,236,456

965,780 96,578 964,621 116,923 19,487 677,106 19,316 9,658 48,365 106,344 9,000 3,033,178 1,530,286 1,530,286 1,530,286 153,557 1,376,729

1,059,810 105,981 1,061,083 128,615 21,436 744,817 21,196 10,598 53,201 106,344 9,000 3,322,082 1,702,097 1,702,097 1,702,097 187,919 1,514,178

1,162,995 116,299 1,167,191 141,477 23,579 819,298 23,260 11,630 58,521 106,344 9,000 3,639,595 1,891,795 1,891,795 1,891,795 225,859 1,665,936

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13.2.
Cash Flow Statement

Cash Flow Statement

Year 0 Year 1 262,314 103,250 9,000 (36,301) (13,787) (5,282) (12,375) 18,416 325,236 (158,269) (158,269) Year 2 506,566 103,250 9,000 11,841 (3,101) (1,834) (6,550) (13,613) 3,181 608,739 (171,405) (171,405) Year 3 763,638 103,250 9,000 43,583 (6,525) (2,073) (6,348) (14,974) 3,500 893,051 (185,632) (185,632) Year 4 866,384 103,250 9,000 61,715 (5,900) (1,754) (7,670) (16,471) 2,573 1,011,126 (201,039) (201,039) Year 5 997,855 103,250 9,000 84,915 (5,191) (1,928) (9,281) (18,118) 2,834 1,163,336 (217,725) 71,472 (146,254) Year 6 1,100,032 106,344 9,000 102,947 (5,702) (2,119) (11,229) (19,930) 3,131 1,282,473 (235,797) (235,797) Year 7 1,236,456 106,344 9,000 127,022 (6,272) (2,329) (13,588) (21,923) 3,461 1,438,171 (255,368) (255,368) Year 8 1,376,729 106,344 9,000 153,557 (6,899) (2,560) (16,441) (24,116) 3,827 1,599,442 Year 9 1,514,178 106,344 9,000 187,919 (7,589) (2,814) (19,894) (26,527) 4,235 1,764,852 Year 10 1,665,936 106,344 9,000 225,859 (8,348) (3,093) 114,625 291,798 2,789 2,404,909 -

Operating activities Net profit Add: depreciation expense amortization of pre-operating costs Deferred income tax Accounts receivable Finished goods inventory Equipment inventory Raw material inventory Pre-paid building rent Accounts payable Cash provided by operations Financing activities Project Loan - principal repayment Additions to Project Loan Additions to Working Capital Loan Issuance of shares Purchase of (treasury) shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Acquisitions Cash (used for) / provided by investing activities NET CASH

(18,344) (123,751) (142,094)

1,425,235 158,359 1,583,594

(1,066,500) (1,066,500) 375,000

166,967

437,334

707,419

810,087

(71,472) (71,472) 945,611

1,046,676

1,182,803

1,599,442

1,764,852

2,404,909

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13.3.
Balance Sheet

Balance Sheet

Year 0 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Raw material inventory Pre-paid annual land lease Pre-paid building rent Total Current Assets Fixed assets Machinery & equipment Furniture & fixtures Office vehicles Office equipment Total Fixed Assets Intangible assets Pre-operation costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Deferred tax Long term debt (Project Loan) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES 375,000

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

18,344 123,751 517,094 85,000 285,500 550,000 56,000 976,500 90,000 90,000 1,583,594

541,967 36,301 13,787 23,626 136,126 751,806 76,500 256,950 495,000 44,800 873,250 81,000 81,000 1,706,056

979,301 39,402 15,622 30,176 149,738 1,214,238 68,000 228,400 440,000 33,600 770,000 72,000 72,000 2,056,238

1,686,720 45,927 17,695 36,523 164,712 1,951,577 59,500 199,850 385,000 22,400 666,750 63,000 63,000 2,681,327

2,496,807 51,827 19,449 44,193 181,183 2,793,458 51,000 171,300 330,000 11,200 563,500 54,000 54,000 3,410,958

3,442,418 57,017 21,377 53,473 199,302 3,773,587 42,500 142,750 275,000 71,472 531,722 45,000 45,000 4,350,309

4,489,094 62,719 23,496 64,703 219,232 4,859,244 34,000 114,200 220,000 57,177 425,377 36,000 36,000 5,320,621

5,671,897 68,991 25,826 78,290 241,155 6,086,159 25,500 85,650 165,000 42,883 319,033 27,000 27,000 6,432,193

7,271,339 75,890 28,386 94,731 265,271 7,735,617 17,000 57,100 110,000 28,589 212,689 18,000 18,000 7,966,306

9,036,191 83,479 31,200 114,625 291,798 9,557,293 8,500 28,550 55,000 14,294 106,344 9,000 9,000 9,672,638

11,441,101 91,827 34,294 11,567,221 11,567,221

18,416 18,416

21,597 21,597

25,097 25,097

27,670 27,670

30,503 30,503

33,634 33,634

37,095 37,095

40,923 40,923

45,158 45,158

47,946 47,946

1,425,235 1,425,235

1,266,966 1,266,966

11,841 1,095,561 1,107,401

55,424 909,929 965,352

117,138 708,889 826,028

202,054 491,164 693,218

305,000 255,368 560,368

432,022 432,022

585,579 585,579

773,498 773,498

999,357 999,357

158,359 158,359 1,583,594

158,359 262,314 420,674 1,706,056

158,359 768,880 927,240 2,056,238

158,359 1,532,518 1,690,877 2,681,327

158,359 2,398,901 2,557,261 3,410,958

229,831 3,396,756 3,626,588 4,350,309

229,831 4,496,788 4,726,619 5,320,621

229,831 5,733,244 5,963,076 6,432,193

229,831 7,109,973 7,339,804 7,966,306

229,831 8,624,151 8,853,982 9,672,638

229,831 10,290,087 10,519,918 11,567,221

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13.4. Technology

Useful Project Management Tips

List of Machinery & Equipment Required spare parts & consumables: Suppliers credit agreements and availability as per schedule of maintenance be ensured before start of operations Energy Requirement: Should not be overestimated or installed in excess and alternate source of energy for critical operations be arranged in advance Machinery Suppliers: Should be asked for training and after sales services under the contract with the machinery suppliers Quality Assurance Equipment & Standards: Whatever means required products quality standards need to be defined on the packaging and a system to check them instituted, this improves credibility

Marketing Product Development & Packaging: Expert's help may be engaged for product/service and packaging design & development Ads & Point of Sale Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product broachers from good quality service providers Sales & Distribution Network: agreements are required with. Expert's advise and distribution

Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be allowed to compromise quality. Price during introductory phase may be lower and used as promotional tool. Product cost estimates should be carefully documented before price setting. Government controlled prices shall be displayed.

Human Resources List of Human Resource Adequacy & Competencies: Skilled and experienced staff should be considered an investment even to the extent of offering share in business profit.

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Performance Based Remuneration: Attempt to manage human resource cost should be focused through performance measurement and performance based compensation. Training & Skill Development: Encouraging training and skill of self & employees through experts and exposure of best practices is route to success. Least cost options for Training and Skill Development (T&SD) may be linked with compensation benefits and awards.

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13.5.

Useful Links

Prime Ministers Office, www.pmo.gov.pk Small and Medium Enterprise Development Authority, www.smeda.org.pk National Bank of Pakistan (NBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Ministry of Education, Training & Standards in Higher Education, http://moptt.gov.pk Government of Punjab, www.punjab.gov.pk Government of Sindh, www.sindh.gov.pk Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk Government of Balochistan, www.balochistan.gov.pk Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk Government of Azad Jamu Kashmir, www.ajk.gov.pk Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Security Commission of Pakistan (SECP), www.secp.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.fpcci.com.pk State Bank of Pakistan (SBP), www.sbp.org.pk Pakistan Institute of Fashion Design (PIFD), www.pifd.edu.pk Pakistan Fashion Design Council (PFDC), www.pfdc.org

18

Pre-Feasibility Study

Florist Shop

14.

KEY ASSUMPTION
Table 10: Operating Assumptions

Days Operational per Year (Days) Accounts Payable (Days) Accounts Receivable (Days)

340 5 3

Table 11: Expense Assumptions

Admin Benefit Expenses Travelling Expenses Promotional Expenses

1% of Admin Salaries 7% of Sales 0.5 % of Revenue

19