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Assignment On
Entrepreneurship
Prepared for - BA5







Prepared By

Joheb Jahangir

ID: 0009msms0212
Date of Submission: 2, May, 2014




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Contents

Introduction _______________________________________________________________ 3
OBJECTIVES of the report _________________________________________________________ 3
Mission _______________________________________________________ Error! Bookmark not defined.
Vision ________________________________________________________ Error! Bookmark not defined.
Objective _____________________________________________________ Error! Bookmark not defined.
Project Cost __________________________________________________________________________ 5
Source of Finance ______________________________________________________________________ 5

Company Ownership ________________________________________________________ 6
Key to success __________________________________________________________________ 6
Competitive Edge _______________________________________________________________ 6
Critical Issues ___________________________________________________________________ 7
Leverage ________________________________________________________________ 7-8
Growth Strategy ______________________________________________________________ 8-9
Organizational Plan __________________________________________________________ 10,11
Human Resrouce ____________________________________________________________ 12-13
CRM ______________________________________________________________________ 13-14
Risk Assesment ________________________________________________________________ 14
Financial Plan __________________________________________________________________ 15
Sales Forecast _________________________________________________________________ 16
Conclusion _______________________________________________________________ 16
Refernce ______________________________________________________________________ 17
Appendix _______________________________________________ Error! Bookmark not defined.






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Vanity Private Limited is herbal henna based shampoo company. This is a private limited company
registered under government rules and our focus on just only two products natural henna shampoo and
natural henna hair color. The company has a logo and a copyright material and its a small company
hoping to go big in future. The report speaks about growth, organizational structure, HR, mission, vision,
objective and financial reports. Previous repot has been about all the marketing strategies and analysis
to succeed. The activities will be operated from the main branch in Gulshan a office of 2000sqf and a
factory located on Savar. Primary activities like collecting raw material will be collected from Pakistan.
Secondary activities like HR and distribution all are given on the report.




The purpose of this study is to provide greater understanding about a Business plan with business idea.
Now the some other objectives of the report are as follows-
1. To understand about business plan.
2. All of the procedure of business.
3. To gather some experience about business plan.
4. To identify profit and loss situation.
5. To identify the key features of business plan.




Objectives of the report #2

Introduction
#1



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Mission
Vanitys mission is to offer the quality goods as well as services to the customers with a affordable price
range. Its important to understand the demand of customers and Vanity understands their customers
demand so we are keeping the price in range of general populations purchasing power along with
quality goods. This Henna based product actually will look after hair based problems.
Vision
Our vision is to gain the trust of the customers in this era of competitive trade. To the trade perspective
the only vision of Vanity is to earn profit however we are influential to tag along the business ethics in
our trade plus we ought to try to uphold the environment as well as social responsibilities.
Objective
Our objective is to expand the business and launch new branches all over the country at the same time
we would like to go global to establish the brand name Vanity.




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Vanity Private Ltd will start with an initial TK. 14,900,000 investment to get the company going. Our
project cost is given below:
Particulars Taka
Land and land development

4,000,000
Factory Building

4,000,000
Machine

4,000,000
Furniture

1,000,000
IT Equipment

500,000
Pre-operating Expenses

1,000,000
Contingency

400,000

Total Cost 14,900,000







Owner Equity 50,000,000
Bank Loan 10% 20,000,000
Total 70,000,000
Project Cost #3

Source of Finance #4

Source Taka



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Vanity is a Private limited company, will be founded by maintaining the Company act 1994. There will
be number of seven board of directors.



The key to success of this product are-
Experienced as well as attention-grabbing advertisement on most part of the country
Appropriate distribution channel.
Suitable Customer Relationship Management (CRM).
Generating average sales in excess of Tk80, 000 per business day.
Online News and Advertisement.



Competitive edge is our knack to market successfully and ingeniously to fetch in the clients in
addition to back that up with the best service and products in the business. Additionally,
our amalgamation of exclusive services, excellent location and our communication with the clients
are setting us up for massive success.



Company Ownership #5

#6

Keys to Success

#7

Competitive Edge



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The henna based shampoo and hair color is totally new innovative product in the market for these
reason Vanity private limited needs to look up into some Critical Issues and they are as follows.
In the very first year of the operation it seems that the sales growth of these products will be
slow for the first half year and for this reason the company needs to grip the position of the
product for six months or so which is acceptable.
Seeing that this is a new product in the market, it might take a bit of time for the customers to
adopt the products and those whore going to try the product in the beginning will be
innovators. Therefore Vanity Ltd should go for powerful and attractive marketing to grow and
retain the customer base.


A satisfied customer, they say, is a company's best advertisement. But advertising only works if people
see it.
Increases Customer engagement
An engaged customer will prefer the brand over other brands because of the affinity that gets
created by engagement programs
Generates incremental business
An engaged customer will provide more business than a regular customer for a simple reason,
an engaged customer always feel closer to the brand and will tend to prefer the brand over
others.
Customer Reference
Satisfied customers are often willing to serve as a reference for you to new prospects and in
proposals. Document their story briefly in proposals in the event the prospect never contacts
them.



#8

Critical Issues

Leverage existing customer base to increase business #9




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According Scott and Bruce (1987) SMEs come crosses internal along with external catastrophes
alongside the phases of (1) Inception, (2) Survival, (3) Growth, (4) Expansion and (5)
Maturity. This framework stands on a several characteristics in illustrating the phrase that a
expected company is in at a particular time. These consist of: nature of industry, key managerial
concerns,, organizational formation, the strength of product, the erudition of structures/controls,
the key basis of funding, cash flow status and the position of the product.
1. Inception Phase
Goal: Get monthly cash flow to the point of consistent breakeven.
During the Inception Phase, to shift from a plan to a company acquires customers, cash and
stamina and everything which are in reach. At this phrase consumers are your needs. Youre the
principal basis of investment and vigor; furthermore if you get assistance, you take charge of
them straightforwardly. The only purpose is to survive and continue to exist. proper arrangement
is infrequently a component of the procedure.
2. Survival Phase
Goal: Consistently achieve owner established profit requirements.
If you have done well in the Inception phase and have established a product which people are
willing to buy, then at that point of time survival turns out into a main concern. Then you need to
make enough money to plaster your expenses and financial growth should run on the system. Its
not unusual when you grow broke at this survival phrase. Then you run out of money to cover up
the expenses of recruiting new staffs, creating new products and services and this is the time you
should replace someone and bring in a person how expert in managing the business.


Growth Strategy of Vanity Private Limited #10




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3. Growth Phase
Goal: One of two possible choices exists. It is based on the owners desire grow or just sustain
the business success created to this point.
When you see that your business stands strong financially and obtaining higher revenue to the
success then the company can afford to stay on this phase for an indefinite period. At this phase
you must decide whether you should go for growth or you going to disengage. Entrepreneurs
frequently come up with innovative business plans they want to try out new stuffs and makes
new business leadership after survival they go through political links to extend the growth phase.
When you decide to grow your business you must focus on utilizing the cash and using the
political power to grow.
4. Expansion Phase
Goal: To effectively manage finances to assure growth does not outpace the financial resources.
Expansion phase is the crucial time here you have to come to a decision if you want to develop
into a big company or sell the business at a noteworthy profit. Distinguishing your own
boundaries is critical. Just because you had a successful stint I business it doesnt mean you
have the attributes to expand the business further. A stint of success can make you feel invincible
which can show the way to brisk expansion.
5. Maturity Phrase
Goal: To diversify into other markets or find related products to sell to the existing customer base.
Companies in this phase repeatedly cannot respond to foremost changes in the market and die
accordingly. In this stage company reinvents itself in a new way. Perhaps with a new product
line or an totally new core focus. No organization will be on top forever. They should renovate and
reinvent entire business before contentment or decline steps in.







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Form of Ownership
Vanity is a partnership venture formed under the Partnership Act 1932. All the associates will
uniformly contribute the venture capital & the revenue will moreover be distributed equally proportion.
Any two partners of the six will have the signing authority to sign in the company checks. The decision of
who will be the Chief Executive Officer (CEO) is taken annually by the five partners and it rotates after
every year. For details, Please follow the contract deed.











Managing Director
Director of Finance & MIS
Director of Accounting
Director of HRM
Director of Marketing
Director of Operation Manager
#11 Organizational Plan
Designation



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Managing
Director
Director of
Accounting
Director of HRM
Security
labours
Director of
Marketing
Marketing
manager
Director of
Finance & MIS
Director of
Operation
Manager



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Human Resource: Human resource director controls the man power of the company. Basically his duty
is to operate the store manager of the shops. Store managers are responsible to manage the floor staffs
and the other necessary workers like labors and security guards of the shops and we will recruit
specialist and experienced head to run the entire operation.
Personnel Recruitment
There will be five departments are Accounting & Finance, Human Resource Management, Marketing &
Sales, Management Information System and Management & Security department and people will be
recruited to work in our Vanity.



Finance & MIS No Human Resource No
Director 1 Director 1
Executive 2 Executive 2
Assistant 3 Staff 3
Subtotal 6 Subtotal 6

Marketing & Sales No Accounting No
Director 1 Director 1
Executive 3 Executive 2
Assistant 3 Staff 2
Sales Man 4 Assistant 5
Sub total 11 Sub total 10
Personnel Requirement Chart

Human Resource Management #12




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Management & Security No
Director 1
Security Head 3
Staff 5
Sub total 9





Approaches to CRM

There are numerous different approaches to CRM, with diverse software packages highlighting
on different aspects:
Operational CRM
Provides supports on Front Office business procedure (e.g. sales, marketing etc).
Any communication with clients is store up in computers contact histories, which the
employees can recover as required.
Gives employees access to imperative information regarding the client, eradicating
necessitate for individually attaining it from the purchasers.


Benefits of CRM
drawing new client
faster and more proficient reply to purchaser guides and consumers information
generalization of advertising and marketing procedures
Understanding needs of customer
enhanced consumer service
construction consumer loyalty




Customer Relationship Management (CRM) #13



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Demonstrating product features reveals a limited market driven functionality after scaling product
production.
Action Plan:
Develop production prototype.
Determine production process
Select equipment Design field support system
Demo product features



The reality of the market is rarely as planned. Market acceptance and competitor response may be
different than anticipated. Limited repeat business can cause uncertainty


Action Plan:
Establish market relationships
Conduct limited sales
Analyze sales
Survey customers
Refine marketing plan


# 14 Risk Assessment
14.1 Low Risk Strategy
14.2 Market Risk



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The following table and chart display the Projected Cash Flow.



















Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash Received




Cash from Operations


Cash Sales

$36,584

$132,665

$211,443

Subtotal Cash from Operations

$36,584

$132,665

$211,443


Additional Cash Received


Sales Tax, VAT, HST/GST Received

$0

$0

$0

New Current Borrowing

$0

$0

$0

New Other Liabilities (interest-free)

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

New Investment Received

$0

$0

$0

Subtotal Cash Received

$36,584

$132,665

$211,443


Expenditures

Year 1

Year 2

Year 3


Expenditures from Operations


Cash Spending

$58,800

$75,600

$87,600

Bill Payments

$31,112

$49,195

$77,871

Subtotal Spent on Operations

$89,912

$124,795

$165,471




#15 Financial Plan



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Our aim is sale the product directly to vendors. We believe through direct sale our growth right will get a
boost. Ever since its an era of internet buyers can get our product through internet shopping based
sites and which will increase the sales forecast.



To conclude its quite clear that the henna based product has a very bright future and we
can go ahead with this business proposal. Clients going to appreciate our product we can
assume as it is an innovative product and very new in the market. It looks like our venture
will be a commercially profitable for us over and above for our consumers too. We consider
recruiting a number of students for the first 6months. And again it depends on
managements operation how they boost the feasibility. The advertising is huge factor if we
fail it will create a big issue and we have plan to increase the business in all corners of the
Dhaka city. We will provide service in a best possible manner so that no other competitive
retailer can come anywhere near us. This is our greatest strength and points of
differentiation. Insight, ideas, inspiration, and fun are the goal. Repeat, high dollar
purchases from loyal customers are the desired end product.



Conclusion

# 16
#15 Sales Forecast



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Bibliography and Reference

Carter and Jones-Evans (2006) Enterprise and Small Business, Chapter 6
Greiner, L.E., 1972. Evolution and Revolution as Organizations Grow. Harvard Business
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Churchill, N.C., & Lewis, V.L., 1983. The Five Stages of Small Business Growth.Harvard
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Chandler Jr, A.D., 1986. The Evolution of Modern Global Competition. In M.E. Porter,ed.
1986 Competition in Global Industries, Boston: Harvard Business School Press. Ch.13.
Churchill and Lewis (1983), The 5 stages of small business growth, Havard Business
Review
Greiner, Larry E., (1972), Evolution and Revolution as Organizations Grow, Harvard
Business Review
The Wall Street Journal, (March 2008) Facebook CEO Seeks Help as Site Grows Up
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Storey, D (1994), Understanding the Small Business Sector, International Thomson
Business Press, London
Buckley, P.J. & Casson, M., 1976. The Future of the Multinational Enterprise. 25
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anniversary ed.
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Wired (09/06/07), How Mark Zuckerberg Turned Facebook Into the Web's Hottest
Platform
http://www.wired.com/techbiz/startups/news/2007/09/ff_facebook?currentPage=2

Hisrich, R, Peters, M, and Shepherd, D.A. (2006). Entrepreneurship: Starting, Developing, and
Managing a New Enterprise. McGraw-Hill Seventh Edition. (Paperback 2007).

Schaper, M & Volery, T 2007, Entrepreneurship an Small Business, John Wiley & Sons, Milton



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Stokes, D., and Wilson, N., (2006) Small business management and entrepreneurship (5th ed)
London : Thomson Learning


Wickham, P. A. (2004) Strategic Entrepreneurship (3rd edn). Harlow: Pearson Education.

Balanko-Dickson, G., (2007) Tips and traps for writing an effective business plan. New York
McGraw-Hill

Coulter, M (2002) Entrepreneurship in Prentice Hall
Mariotti,S (2003) the young entrepreneur's guide to Starting and Running a Business. New York,
NY: Random House, Inc
Beaver, G. (2002) Small Business, Entrepreneurship and Enterprise Development. Harlow:
Pearson Education.
Burns, P. (2001) Entrepreneurship and Small Business. Basingstoke. Palgrave.
Craig, Tom; Campbell, David (2012). Organisations and the Business Environment. Retrieved
from http://www.eblib.com
Bryman, A., & Bell, E., 2003. Business Research Methods. 2nd ed. Oxford: Oxford University
Press.
Kazanjian, R.K, & Drazin, R., 1990a. A Stage-contingent Model of Design and Growth for
Technology Based New Ventures. Journal of Business Venturing
Kazanjian, R.K, and Drazin, R. 1990b. An Empirical Test of a Stage of Growth Progression Model.
Management Science, 35 (12), pp.1489-1503.
Knight, G.A. & Cavusgil, S.T., 2004. Innovation, Organizational Capabilities, and the Born-global
Firm. Journal of International Business Studies.
Kotler, P., 2003. Marketing Management. 11th ed. Engelwood Cliffs: Prentice-Hall
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Appendix

Projected Balance Sheet
The following table highlights the projected balance sheet for three years.
Table: Balance Sheet

Pro Forma Balance Sheet


Year 1 Year 2 Year 3
Assets


Current Assets

Cash $21,436 $32,103 $59,233
Accounts Receivable $50,200 $60,525 $74,766
Inventory $19,800 $19,394 $22,264
Other Current Assets $5,000 $5,000 $5,000
Total Current Assets $96,436 $117,022 $161,263

Long-term Assets

Long-term Assets $15,000 $15,000 $15,000
Accumulated Depreciation $4,800 $9,600 $14,400
Total Long-term Assets $10,200 $5,400 $600
Total Assets $106,636 $122,422 $161,863

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $24,738 $18,257 $21,848
Current Borrowing $9,000 $3,000 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $33,738 $21,257 $21,848

Long-term Liabilities $41,600 $33,200 $24,800
Total Liabilities $75,338 $54,457 $46,648

Paid-in Capital $50,000 $50,000 $50,000
Retained Earnings ($41,600) ($18,701) $17,965
Earnings $22,899 $36,666 $47,250
Total Capital $31,299 $67,965 $115,215
Total Liabilities and Capital $106,636 $122,422 $161,863

Net Worth $31,299 $67,965 $115,215

7.5 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based
on the Standard Industrial Classification (SIC) code 5122, Drug, Proprietaries, and
Sundries, are shown for comparison.



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Table: Ratios

Ratio Analysis


Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 20.57% 23.53% 16.90%

Percent of Total Assets

Accounts Receivable 47.08% 49.44% 46.19% 28.90%
Inventory 18.57% 15.84% 13.75% 31.30%
Other Current Assets 4.69% 4.08% 3.09% 28.80%
Total Current Assets 90.43% 95.59% 99.63% 89.00%
Long-term Assets 9.57% 4.41% 0.37% 11.00%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 31.64% 17.36% 13.50% 49.00%
Long-term Liabilities 39.01% 27.12% 15.32% 12.60%
Total Liabilities 70.65% 44.48% 28.82% 61.60%
Net Worth 29.35% 55.52% 71.18% 38.40%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 52.38% 25.20%
Selling, General & Administrative Expenses 41.73% 39.09% 41.11% 15.50%
Advertising Expenses 0.85% 0.88% 0.95% 1.00%
Profit Before Interest and Taxes 13.43% 16.68% 16.80% 1.80%

Main Ratios

Current 2.86 5.51 7.38 1.67
Quick 2.27 4.59 6.36 0.86
Total Debt to Total Assets 70.65% 44.48% 28.82% 61.60%
Pre-tax Return on Net Worth 104.52% 77.07% 58.59% 5.70%
Pre-tax Return on Assets 30.68% 42.79% 41.70% 14.90%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 8.12% 10.78% 11.25% n.a
Return on Equity 73.16% 53.95% 41.01% n.a

Activity Ratios

Accounts Receivable Turnover 4.21 4.21 4.21 n.a
Collection Days 56 79 78 n.a
Inventory Turnover 10.57 8.67 9.60 n.a
Accounts Payable Turnover 8.02 12.17 12.17 n.a
Payment Days 27 35 28 n.a
Total Asset Turnover 2.64 2.78 2.59 n.a

Debt Ratios

Debt to Net Worth 2.41 0.80 0.40 n.a
Current Liab. to Liab. 0.45 0.39 0.47 n.a

Liquidity Ratios

Net Working Capital $62,699 $95,765 $139,415 n.a
Interest Coverage 7.34 13.07 23.13 n.a

Additional Ratios

Assets to Sales 0.38 0.36 0.39 n.a
Current Debt/Total Assets 32% 17% 13% n.a
Acid Test 0.78 1.75 2.94 n.a
Sales/Net Worth 9.01 5.00 3.65 n.a
Dividend Payout 0.00 0.00 0.00 n.a




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