Footwear Retail Outlet Pre-Feasibility Study

Pre-Feasibility Study
(Footwear Retail Outlet Ladies & Children)
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 Complex, 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
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
3rd Floor, Building No. 3,

Aiwan-e-Iqbal Complex,
Egerton Road Lahore,
Tel: (042) 111-111-456
Fax: (042) 36304926-7
helpdesk.punjab@smeda.org.pk
5th Floor, Bahria

Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A

Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014
Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)
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 DESCRITION OF PROJECT & PRODUCT .......................................................................... 5
7 CRITICAL FACTORS ........................................................................................................................... 5
8 INSTALLED & OPERATIONAL CAPACITIES ................................................................................ 5
9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................................... 5
10 POTENTIAL TARGET MARKETS / CITIES .................................................................................... 6
11 PROJECT COST SUMMARY .............................................................................................................. 6
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
11.10
PROJECT ECONOMICS ...................................................................................................................... 6

PROJECT FINANCING........................................................................................................................ 6
PROJECT COST ................................................................................................................................. 7
SPACE REQUIREMENT ...................................................................................................................... 7
FURNITURE & FIXTURE ................................................................................................................... 8
OFFICE EQUIPMENT ......................................................................................................................... 8
RAW MATERIAL REQUIREMENTS .................................................................................................... 9
HUMAN RESOURCE REQUIREMENT.................................................................................................. 9
REVENUE GENERATION ..................................................................................................................10
OTHER COSTS ...............................................................................................................................10
12 CONTACT DETAILS OF GOVERNMENT INSTITUTIONS ........................................................ 11

13 ANNEXURE .......................................................................................................................................... 12
13.1
13.2
13.3
13.4
13.5
INCOME STATEMENT ......................................................................................................................12

BALANCE SHEET.............................................................................................................................13
CASH FLOW STATEMENT ................................................................................................................14
USEFUL PROJECT MANAGEMENT TIPS ............................................................................................15
USEFUL LINKS ................................................................................................................................15
14 KEY ASSUMPTIONS........................................................................................................................... 17
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said subject. 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
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
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, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Footwear
Retail Outlet (Ladies and Children) by providing them 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 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.
4 INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan 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 by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Small business loans up to Rs. 2 million with tenure up to 8 years, inclusive of
grace period of 1 year and a debt : equity of 90 : 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,
Balochistan, Gilgit Baltistan, Azad Jammu &Kashmir and Federally Administered
Tribal Areas (FATA).
5 EXECUTIVE SUMMARY
Footwear Retail Outlet is proposed to be set up in urban areas. The outlet would
cater to the demand for ladies and children footwear, belonging to middle and
upper middle income groups.
The demand for footwear is constantly rising and there are a number of local
manufacturers producing good quality footwear. The consumers are becoming
increasingly quality conscious and seek products offering value for money. This
trend has led to strong growth in retail footwear outlets all across Pakistan.
The focus of the business would be to provide casual, semi-formal and formal,
quality footwear at affordable prices. Shoes are assumed to be purchased from
different subcontracted manufacturers and sold at the retail outlet.
The total project cost for setting up a footwear retail outlet is estimated at Rs.
1.31 million out of which Rs. 0.62 million is capital cost and Rs. 0.69 million is
working capital. The project NPV is calculated to be around Rs 4.23 million, with
an IRR of 37% and payback period of 3.85 years. This business will provide
employment opportunity to 5 individuals including the owner/manager. The outlet
will remain operational for 12 hours per day, and with estimated sales of 9,200
pairs of shoes in the first year. The legal business status of this project is
proposed as Sole Proprietorship.
6 BRIEF DESCRITION OF PROJECT & PRODUCT

This document provides information for setting up a Footwear Retail Outlet for
ladies and children. It involves purchase of ladies and children shoes from any
local manufacturer and selling it through a retail outlet established in a rented
premise under a brand name, in any of the urban cities of Pakistan. The retail
outlet will have a covered area of 600 sq. ft. Shoes of the required quality and
quantity will be sourced from wholesale markets and small shoe manufacturers.
The product mix would include ladies and children shoes in all sizes. This
product mix is divided into further categories; casual, semi-formal and formal
footwear which includes pumps, heels, coat shoes, sandals, slippers, etc. made
of leather and other materials. The three categories among ladies and children
shoes are further classified by proposed selling prices, ranging between Rs. 700
Rs. 1,100 for ladies shoes and Rs. 325 Rs. 650 for children shoes.
7 CRITICAL FACTORS
Following factors are critical for the success of footwear retail business:
Develop strong linkages with suppliers for sourcing good quality products at
competitive prices.
Efficient management of stock to keep inventory cost at the minimum.
Selection of a central location keeping in mind the target market.
Knowledge about the latest market trends.
Induction of trained sales personnel for efficient customer handling.
Strong competition with similar shops in the same commercial area.
8 INSTALLED & OPERATIONAL CAPACITIES

Since the proposed venture is a trading business, there are no installed
capacities per se. The turnover will depend on seasonal sales and ability of the
venture to attract customers through quality and price incentives. Experienced
and efficient sales staff also plays a critical role in determining the sales revenue
of the business. The business is expected to have a capacity to sell 12,000
shoes in a year.
The proposed project assumes to have a stock of 9,600 pairs at 80% capacity,
out of which 400 pairs would be kept in inventory while remaining 9,200 pairs will
be sold during first year of operation. The outlet will operate for 12 hours daily.
9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

There is significant domestic demand for footwear in all the urban and semiurban areas, year round. Thus, the outlet can be opened in any urban location in
the country, where customers have an easy access to the outlet, like shopping
malls, busy markets or similar high traffic.
10 POTENTIAL TARGET MARKETS / CITIES

Most of the shoe manufacturing units and a number of shoe stores are present in
cities like Lahore, Karachi, Faisalabad, Quetta, Hyderabad, Peshawar, Sahiwal,
Gujranwala and Rawalpindi. Hence, these cities and other comparable cities in
the country are considered as a suitable option for setting up a footwear retail
outlet.
11 PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial
viability of Footwear Retail Outlet under the Prime Ministers Youth 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.
11.1 Project Economics
A target sale of 9,200 shoe pairs would be achieved by footwear retail outlet in
the first year. The following table shows internal rate of return, payback period
and NPV:
Table 1: Project Economics
Description
Internal Rate of Return (IRR)
Payback Period (yrs)
Net Present Value (NPV)
Details
37%
3.85
Rs. 4,231,339
Returns on the investment and its profitability are highly dependent on the
efficiency of the entrepreneur in selecting the appropriate business location,
hiring trained sales persons and maintaining good quality, in terms of shoe
designs and customer services.
11.2 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)
Grace Period (Years)
Details
Rs. 131,053
Rs.1,179,476
8%
8
1
11.3 Project Cost

Following requirements have been identified for operations of the proposed
business.
Furniture and fixture is required for display of shoes and storing of stock. Office
equipment such as computer, printer and air conditioner are essential for routine
business operations and for giving a professional outlook to attract customers
and achieve customer satisfaction.
Table 3: Capital Investment for the Project
Capital Investment
Furniture & fixtures
Office equipment
Pre-operating costs
Total Capital Costs
Working Capital
Equipment / Spare part inventory
Opening inventory
Upfront building rent
Cash
Total Working Capital
Total Investment
Rs.
560,500
46,000
18,270
624,770
3,065
426,400
120,000
136,295
685,760
1,310,529
11.4 Space Requirement

The area for the outlet has been calculated on the basis of space required for
display area, store, management space and washroom. Following table shows
calculations for project space requirement.
Table 4: Space Requirement
Space Requirement (in ft.)
Rs/Sq. Ft.
Shop
50
Area (Sq.
Ft.)
600
Amount (Rs.)
30,000
7
11.5 Furniture & Fixture

Following table shows costs such as furniture, interior designing and electrical
equipment etc.
Table 5: Furniture & Equipment Requirements
Description
Furniture
Executive Chairs
Counter
Seating for customers
Floor equipment (baskets, mirrors
etc.)
Interior Designing
Shoe Racks with glass material
False ceiling, front door & paint
Flooring 300 sq ft @ 175
Electrical equipment
Air conditioner (1.5 ton split)
Generator (3 KVA)
Electric wiring & lighting
Bracket fans
Shoe store
Shoe Racks with iron & Wood
Lighting & Wiring
Wooden Stools
Admin Office
Desks and Chairs
Total Furniture & Equipment
Quantity /
Area
Cost /
Rate
Amount / Other
1
1
5
5,000
20,000
3,000
5,000
20,000
15,000
15,000
15,000
500
400
175
150,000
120,000
52,500
1
1
50,000
40,000
2,500
50,000
40,000
30,000
10,000
300
300
300
150
200
1,500
15,000
30,000
5,000
3,000
15,000
560,500
11.6 Office Equipment

Computer and printer are required for routine office operations and record
maintenance. Similarly, barcode reader and inventory management software is
necessary for keeping track of inventory and for ease of reference for both
customer and owner.
Table 6: Office Equipment Costs
Description
Computers
UPS
Quantity / Area Cost / Rate Amount / Other

1
25,000
25,000
1
10,000
10,000
Computer printer (s)

Telephones
Total Office Equipment
1
1
10,000
1,000
10,000
1,000
46,000
Rental vehicle is proposed as a mode of transportation of goods.

11.7 Raw Material Requirements
Shoes will be purchased from manufacturers and wholesalers. Purchase price
per unit is depicted in the following below:
Table 7: Cost of Material
Purchase price per unit year 1 - Ladies
shoes
Pair A
Pair B
Pair C
Purchase price per unit in year 1 - Children
shoe
Pair A
Pair B
Pair C
Qty %age
Price (Rs)
20%
50%
30%
725
600
475
20%
50%
30%
425
325
225
11.8 Human Resource Requirement

Table 8: Human Resource Requirement
Description
Store manager/ Owner
Salesmen
Helper
Total
No. of Employees
1
2
2
5
Salary / Employee
/ Month
15,000
11,000
10,000
The above table provides details of human resource required in the 1st year to
run this project. Salaries of all employees are estimated to increase at 10%
annually.
11.9 Revenue Generation

Table 9: Revenue Generation in 1st Year of Operation*
Product
Ladies Shoes
Pair A
Pair B
Pair C
Sub-Total
Children Shoes
Pair A
Pair B
Pair C
Sub-Total
Total
Unit
Qty
Sales
Price
(Rs./Unit)
First Year
Sales
Revenue
(Rs)
No.
No.
No.
1,472
3,680
2,208
1,088
900
713
1,600,800
3,312,000
1,573,200
6,486,000
No.
No.
No.
368
920
552
638
488
338
234,600
448,500
186,300
869,400
7,355,400
* Figures are rounded off at zero decimal place.

11.10 Other Costs
Other costs include fixing and repairing material which is estimated at 0.50% of
sales revenue, transportation expenses 2.0% of cost of shoes purchased, sales
commission is estimated at 2.0% of revenue and lump sum monthly provision of
Rs. 10,000 for promotional expenses.
10
12 CONTACT DETAILS OF GOVERNMENT INSTITUTIONS

Principal
Govt. Institute of Leather
Technology, Gujranwala
P.O Anwar Industry G.T.Road,
Gujranwala
Phone, 055 9230056
Principal
Footwear Training Institute
Plot # 24, Phase 5, Hayatabad,
Peshawar
091 9217244
Principal
National College of Arts
4- Shahrah-E-Qaid-E-Azam, Lahore
Tel: +92 42 99210599, 99210601
Principal
Pakistan School of Fashion Design
51-J/3, Johar Town, Lahore
TEL: +92 42 3531 5401 08
11
13 ANNEXURE
13.1 Income Statement
Income Statement
Revenue
Year 1
7,355,400
Year 2
8,395,984
Year 3
9,569,225
Year 4
10,893,802
Year 5
12,386,396
Year 6
14,067,724
Year 7
15,964,909
Year 8
17,916,992
Year 9
19,708,691
Year 10
21,679,561
Cost of sales
Cost of purchasing shoes
Direct labor
Fixing and repair material
Direct Electricity
Transport rental expense
Generator expense
Total cost of sales
Gross Profit
5,116,800
504,000
36,777
257,040
102,336
148,500
6,165,453
1,189,947
5,840,560
554,400
41,980
282,744
116,811
163,350
6,999,845
1,396,139
6,656,815
609,840
47,846
311,018
133,136
179,685
7,938,341
1,630,884
7,577,849
670,824
54,469
342,120
151,557
197,654
8,994,473
1,899,330
8,616,595
737,906
61,932
376,332
172,332
217,419
10,182,516
2,203,880
9,785,781
811,697
70,339
413,965
195,716
239,161
11,516,658
2,551,066
11,105,916
892,867
79,825
455,362
222,118
263,077
13,019,164
2,945,745
12,463,995
982,153
89,585
500,898
249,280
289,384
14,575,296
3,341,697
13,710,394
1,080,369
98,543
550,988
274,208
318,323
16,032,825
3,675,866
15,081,433
1,188,406
108,398
606,087
301,629
350,155
17,636,108
4,043,453
General administration & selling expenses

Administration expense
Sales commission
Building rental 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
180,000
147,108
360,000
24,000
42,000
120,000
71,383
3,654
948,145
241,802
198,000
167,920
396,000
26,400
46,200
108,000
71,383
3,654
1,017,557
378,582
217,800
191,384
435,600
29,040
50,820
97,200
71,383
3,654
1,096,882
534,002
239,580
217,876
479,160
31,944
55,902
87,480
73,800
3,654
1,189,396
709,934
263,538
247,728
527,076
35,138
61,492
78,732
73,800
3,654
1,291,159
912,721
289,892
281,354
579,784
38,652
67,641
70,859
73,800
1,401,983
1,149,083
318,881
319,298
637,762
42,517
74,406
63,773
76,598
1,533,235
1,412,510
350,769
358,340
701,538
46,769
81,846
57,396
76,598
1,673,256
1,668,440
385,846
394,174
771,692
51,446
90,031
51,656
76,598
1,821,443
1,854,423
424,431
433,591
848,861
56,591
99,034
46,490
79,837
1,988,835
2,054,618
Gain / (loss) on sale of office equipment

Earnings Before Interest & Taxes
241,802
378,582
27,600
561,602
709,934
912,721
45,750
1,194,834
1,412,510
1,668,440
59,862
1,914,285
2,054,618
Interest expense on long term debt (Project Loan)

Interest expense on long term debt (Working Capital Loan)
Subtotal
Earnings Before Tax
97,896
97,896
143,906
89,625
89,625
288,957
78,754
78,754
482,848
66,980
66,980
642,953
54,230
54,230
858,492
40,421
40,421
1,154,413
25,466
25,466
1,387,044
9,269
9,269
1,659,171
1,914,285
2,054,618
143,906
288,957
8,285
474,563
24,295
618,658
51,274
807,218
95,662
1,058,751
130,556
1,256,487
179,334
1,479,837
230,357
1,683,928
258,423
1,796,195
Tax
NET PROFIT/(LOSS) AFTER TAX
12
13.2
Balance Sheet
Balance Sheet
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
136,295
3,065
426,400
120,000
685,760
199,526
268,063
3,673
535,385
132,000
1,138,647
282,067
304,341
4,396
671,229
145,200
1,407,232
451,882
345,145
5,255
840,510
159,720
1,802,511
767,502
391,064
6,273
1,051,296
175,692
2,391,828
1,207,138
442,718
7,481
1,313,341
193,261
3,163,940
1,754,732
500,724
8,914
1,639,567
212,587
4,116,525
2,490,514
566,051
10,505
2,024,067
233,846
5,324,982
3,391,638
633,709
12,133
2,449,121
257,231
6,743,831
4,548,318
697,079
14,013
2,963,436
282,954
8,505,800
9,549,433
766,787
10,316,220
560,500
46,000
606,500
504,450
30,667
535,117
448,400
15,333
463,733
392,350
53,251
445,601
336,300
35,501
371,801
280,250
17,750
298,000
224,200
61,644
285,844
168,150
41,096
209,246
112,100
20,548
132,648
56,050
71,361
127,411
47,574
47,574
18,270
18,270
1,310,529
14,616
14,616
1,688,379
10,962
10,962
1,881,928
7,308
7,308
2,255,420
3,654
3,654
2,767,282
3,461,940
4,402,369
5,534,228
6,876,479
8,633,211
10,363,794
233,944
233,944
269,514
269,514
310,291
310,291
357,119
357,119
410,932
410,932
472,792
472,792
543,300
543,300
617,048
617,048
689,852
689,852
624,240
624,240
1,179,476
1,179,476
1,048,498
1,048,498
906,649
906,649
753,026
753,026
586,653
586,653
406,471
406,471
211,334
211,334
131,053
143,906
274,959
1,688,379
131,053
432,863
563,916
1,881,928
131,053
907,426
1,038,479
2,255,420
131,053
1,526,084
1,657,137
2,767,282
131,053
2,333,302
2,464,355
3,461,940
131,053
3,392,054
3,523,107
4,402,369
131,053
4,648,541
4,779,594
5,534,228
Assets
Current assets
Cash & Bank
Closing stock
Equipment spare part inventory
Opening inventory
Pre-paid building rent
Total Current Assets
Fixed assets
Furniture & fixtures
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)
Long term debt (Working Capital Loan)
Total Long Term Liabilities
Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES
1,179,476
1,179,476
131,053
131,053
1,310,529
131,053
6,128,378
6,259,431
6,876,479
131,053
7,812,307
7,943,360
8,633,211
131,053
9,608,501
9,739,554
10,363,794
13
13.3 Cash Flow Statement

Cash Flow Statement
Year 0
Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Closing stock
Equipment inventory
Opening inventory
Pre-paid building rent
Accounts payable
Cash provided by operations
Financing activities
Project Loan - principal repayment
Additions to Project Loan
Issuance of shares
Cash provided by / (used for) financing activities
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing activities
NET CASH
(3,065)
(426,400)
(120,000)
(549,465)
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
143,906
71,383
3,654
(268,063)
(608)
(108,985)
(12,000)
233,944
63,231
288,957
71,383
3,654
(36,278)
(723)
(135,844)
(13,200)
35,570
213,519
474,563
71,383
3,654
(40,804)
(859)
(169,281)
(14,520)
40,778
364,915
618,658
73,800
3,654
(45,919)
(1,019)
(210,787)
(15,972)
46,827
469,243
807,218
73,800
3,654
(51,654)
(1,208)
(262,045)
(17,569)
53,813
606,010
1,058,751
73,800
(58,006)
(1,433)
(326,226)
(19,326)
61,860
789,420
1,256,487
76,598
(65,326)
(1,590)
(384,499)
(21,259)
70,509
930,920
1,479,837
76,598
(67,658)
(1,628)
(425,054)
(23,385)
73,747
1,112,458
1,683,928
76,598
(63,371)
(1,881)
(514,315)
(25,723)
72,804
1,228,040
1,796,195
79,837
(69,708)
14,013
2,963,436
282,954
(65,612)
5,001,115
(130,978)
(130,978)
(141,849)
(141,849)
(153,623)
(153,623)
(166,373)
(166,373)
(180,182)
(180,182)
(195,137)
(195,137)
(211,334)
(211,334)
1,179,476
131,053
1,310,529
(624,770)
(53,251)
(61,644)
(624,770)
(53,251)
(61,644)
136,295
63,231
82,541
169,815
315,621
439,636
547,593
735,782
(71,361)
(71,361)
901,124
1,156,679
5,001,115
14
13.4 Useful Project Management Tips

Marketing
Advertisement & Promotion: Business promotion and dissemination through

banners and launch events is highly recommended. Product brochures should
be developed from good quality service providers.
Sales & Distribution Network: Expert's advise and distribution agreements

are required with shoes manufacturers.
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should

never be allowed to compromise quality. Price during introductory phase may
be kept lower and used as a promotional tool. Product cost estimates should
be carefully documented before price setting
Human Resources
Adequacy & Competencies: Skilled and experienced staff should be hired.
Performance Based Remuneration: Efforts to manage human resource cost

should be focused through performance measurement and performance based
compensation.
Training and Skills Development: Training to staff should be provided in

areas of customer services and sales.
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 Jammu Kashmir, www.ajk.gov.pk
15
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Securities & Exchange 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
16
14 KEY ASSUMPTIONS
Table 10:Capacity Utilization Assumptions
Starting Capacity Utilization
Annual Growth Rate
Maximum Capacity Utilization for the project
80%
3%
100%
Table 11: Economy-Related Assumptions

Electricity price growth rate
Wage growth rate
10%
10%
Table 12: Cash Flow Assumptions

Accounts payable cycle
15 (Days)
Table 13: Financial Assumptions

Project life (Years)
Debt
Equity
Interest rate on long-term debt
Debt tenure (Years)
Grace Period (Years)
10
90%
10%
8%
8
1
Table 14: Revenue Related Assumptions

Sale price growth rate
Purchase price growth rate
Percentage of Ladies shoes
Percentage of children shoes
10%
10%
80%
20%
17

Footwear Retail Outlet Pre-Feasibility Study

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Pre-Feasibility Study

(Footwear Retail Outlet Ladies & Children)

Small and Medium Enterprises Development Authority

3rd Floor, Building No. 3,

5th Floor, Bahria

Bungalow No. 15-A

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

PROJECT ECONOMICS ...................................................................................................................... 6

12 CONTACT DETAILS OF GOVERNMENT INSTITUTIONS ........................................................ 11

INCOME STATEMENT ......................................................................................................................12

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

2 PURPOSE OF THE DOCUMENT

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

capacity building programs of different types in addition to business guidance

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

6 BRIEF DESCRITION OF PROJECT & PRODUCT

8 INSTALLED & OPERATIONAL CAPACITIES

9 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

10 POTENTIAL TARGET MARKETS / CITIES

11 PROJECT COST SUMMARY

11.2 Project Financing

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

Table 2: Project Financing

11.3 Project Cost

11.4 Space Requirement

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

11.5 Furniture & Fixture

11.6 Office Equipment

Quantity / Area Cost / Rate Amount / Other

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

Computer printer (s)

Rental vehicle is proposed as a mode of transportation of goods.

11.8 Human Resource Requirement

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

11.9 Revenue Generation

* Figures are rounded off at zero decimal place.

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

12 CONTACT DETAILS OF GOVERNMENT INSTITUTIONS

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

General administration & selling expenses

Gain / (loss) on sale of office equipment

Interest expense on long term debt (Project Loan)

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

13.3 Cash Flow Statement

Footwear Retail Outlet - Ladies and Children (Rs. 1.31 Million)

13.4 Useful Project Management Tips

Advertisement & Promotion: Business promotion and dissemination through

Sales & Distribution Network: Expert's advise and distribution agreements

Price - Bulk Discounts, Cost plus Introductory Discounts: Price should

Adequacy & Competencies: Skilled and experienced staff should be hired.

Performance Based Remuneration: Efforts to manage human resource cost

Training and Skills Development: Training to staff should be provided in

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,