Post on 24-Nov-2014
transcript
Business Plan on ‘Office Refernishers’
Executive SummaryThe business is based on establishing a office refurnishing and equipment supply. The purpose of this
Feasibility Study is to provide the reader with a comprehensive description of Quality Office Supply.
Quality Office Supply intends to commence business on AUGUST 1, 2010, and offer a wide selection of
quality office products, quick delivery within a limited area, and a small but knowledgeable and courteous
staff.
Quality Office Supply’s mission is to make the selection and purchase of office supplies a worry-free and
time-saving undertaking. The company plans to distinguish itself in this manner by putting the needs of
its customers first. This individual, Managing Director, we assume that, draws on years of industry-
specific experience for his solid knowledge of the world of office supplies, as well as the people who use
them. Ultimately, Quality Office Supply plans to become the office supply store of choice in Dhaka City
within its first two years by being the first to offer such a vision to the immediate vicinity.
Quality Office Supply plans to offer its clientele several unique selling features. First, the company plans
to offer special ordering services that track the supplies its institutional clients use most often, and it plans
to make certain that there are ample supplies of those products in stock at all times so customers won't
have to wait while the items are on order. Second, Quality Office Supply plans to offer the convenience
of a prime location in the midst of the Dhaka City offices, with delivery service in the immediate vicinity.
Third, the company plans to offer knowledgeable personnel to field questions about office supplies.
Quality Office Supply has set its marketing objective on a 25% market share within its first six months.
This will be achieved two ways. First, a highly visible location coupled with a gala grand opening will
yield substantial "off-the-shelf" sales by increasing word-of-mouth advertising and foot traffic. Second,
the company will aggressively court large institutional clients in Dhaka City, beginning with those with
whom the owner has ample connections. Quality Office Supply will aggressively market itself as the
most responsive and convenient office supply store for professional corporations doing business in Dhaka
City.
The company’s expected accomplishments are to draw in a total of 20% of the market share for delivery
business and 25% of the market share for walk-in business during its first year of operation in Dhaka
City.
In order for Quality Office Supply to successfully commence operations, an investment of 1000,000 will
be required. The owner will contribute 600,000 TK of his own funds and will require financing from an
outside investor in the amount of 400,000 TK .
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Business Plan on ‘Office Refernishers’
Organization’s ObjectivesQuality Office Supply has two long term objectives. Recognizing that the market is
bifurcated into small, "walk-in" purchases and large institutional accounts, Quality Office
Supply intends to meet the needs of both.
The first objective of Quality Office Supply will be to capture a 20% share of Dhaka
City's market for institutional business over the next year. It plans to meet this objective
through an aggressive sales effort focusing on the “Dependability” and “Quality”of
Qualtiy Office Supply.
This targeted sales effort will be facilitated four ways. First, its strategic location will
allow it to focus its sales efforts. These sales efforts should be substantially supported by
its visibility in Dhaka City and the reputation of its owner among these prospects.
Second, Managing Director will plan to capitalize on these existing relationships with
current clients in the market, using his influence with them to gain additional prospects
once Quality Office Supply has established itself in Dhaka City. The solid background
and proven track record of Managing Director will assist in meeting this objective.
Third, Quality Office Supply plans to sell their expertise in customized inventory
management, including the computerized system specially developed by efficiently,
which tracks trends in customers' orders and allows customer service representatives to
order according to the clients' projected needs. Fourth, Quality Office Supply will
kickoff its efforts at enhanced visibility in this market with a gala grand opening and
subsequent promotional advertising effort.
The company’s second objective will be to capture 25% of the Dhaka City market for
walk-in business over the next year. Here, Quality Office Supply plans to increase its
visibility in order to achieve this objective. The simple increased visibility in such a
heavily traveled area concentrated with professionals and executives virtually assure
Quality Office Supply that this goal can be met. Additionally, market surveys have
shown that promotional campaigns within the first three months of a grand opening are
particularly effective for retail stores in Dhaka City. Consequently, Quality Office
Supply plans to follow its grand opening with heavy promotional efforts in the immediate
vicinity, including glossy flyer distribution and a mass mailer. iness plan, and we are
hople about this Business Plan.
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Business Plan on ‘Office Refernishers’
FORM OF OWNERSHIP, SUPPORT SERVICES, PLAN
Form of Ownership
o Sole Proprietorship
In this form of ownership, the eye of law sees the “firm” and the “individual” as the same
entity. Because of this identification, the individual assumes all liability and debts.
The benefits of this form of ownership is the ease of setting up the business and allows the
business more simplified accounting, financial reporting, and tax handling.
o Partnership
Although a written agreement is not necessary for partnership business, it is recommended.
With the assistance of an attorney, the rights and duties of various partners should be
defined and included in the agreement. The main advantages of partnership are:
Ease of set up
Business earnings are taxed only once
On the other hand, partnership contains these disadvantages:
Unlimited liability for the business partners
If one partner quits or passes away, the partnership is dissolved
The issue of liability can be addressed with a “limited partnership” arrangement.
Limited partnership requires at least one general partner who would assume the full
liability for the company. The other partners of the business are called limited partners and
assume only limited liability. However, limited partners cannot take an active role in the
management of the business.
o Which Form Suits Us Best?
Our major concerns in selecting the most suitable form of ownership are liability exposure
and taxation. In our judgment, “Quality Office Supply” does not carry a lot of risk.
Therefore, a partnership seems an acceptable form of ownership. However, according to
theory, a Limited Liability Company (LLC) is easy to set up and shield us from liability.
Also, LLC avoids the double taxation of a corporation.
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Business Plan on ‘Office Refernishers’
Although we have chosen LLC as the form of business ownership, we may elect to becom
a corporation in the future. Corporation offers same liability protection as an LLC but
allows more access to raise working capital for future growth and expansion plan.
4.1.2 Support Services
o Accounting
At least once a year, “Quality Office Supply” will require the assistance of a CPA
accountant to prepare tax return and document. Accounting fee costs will be provided in
the “Financial Aspect”. In our financial projection (Financial Aspect), we have showed
annually.
In addition to CPA consultant, we also need a full-time bookkeeper to perform day-to-day
accounting tasks. A full-time bookkeeper salary is shown later on in monthly.
o Legal
A lawyer charges approximately charges more than any other specialist. Although legal
service is expensive, it is necessary for the long-term health of our business.
4.1.3 Management Plan
o 1st year (2010-2011); Goal: Establish the Business and Name Recognition:
The main focus is to inform the “Equipment Industry” of our existence and services that we
provide through the marketing plan as defined in “Market Section”. Partners take no salary
from the business.
o2nd/3rd year (2011-2012); Goal: Alliance & Expansion:
After establishing name recognition as an “Office Equipment Supplier”, we will seek
alliance with some reputable “Office Equipment Supply Companies” for exploiting
technology.
o 4th/5th year (2012-2013); Goal: Expansion in IT Consulting:
Based on market share, we will seek the way we start IT service (Data Mining) with Office
Equipment Selling. Assumption is that our equipment market adopted lots of high-tech
information system. And a liaison with corporate client will benefited us for this type
service.
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Business Plan on ‘Office Refernishers’
Organizational Structure
Quality Office Supply plans to start with twenty-six full-time employees and divide its
organization according to the classification of customers. The "front-line" (the terminology use
for those who have the initial and majority of contact with the customers) is organized based on
the manner with +which customers are typically interfaced. For example, Quality Office Supply
will have ten full-time "floor sales personnel," six of which will be on duty at any one time.
These individuals will be the persons one would encounter in the store. Typically, three will be
involved in checkout, while the other three will be answering questions about merchandise on
the floor. Two of these individuals will be a manager, and one of the two will normally be on
duty.
Quality Office Supply also will have five customer service representatives to assist institutional
clients. Most of their efforts will be concentrated on taking orders by phone, returning calls in
order to provide information to the clients, coordinating with inventory stockers to fill orders for
delivery, and managing account activity and collections. One of these five individuals will be a
manager, and another will be on a "management training" schedule. As is customary in the
industry, these representatives will be expected to be on duty from 7:30 - 4:30 Monday through
Friday, but many will probably work much longer hours.
Quality Office Supply will have a full-time staff of three delivery persons who will each work
five shifts per week. Two will normally be on duty during the day, and one will be on duty
during the evening. The drivers will be responsible for verifying that orders are filled correctly
and delivered to institutional clients. The delivery persons will not have a manager among them.
A member of the inventory stocking team will manage them.
Quality Office Supply will have five full-time inventory stockers. There will be one manager
among them, who also manages the drivers. The Manager will be responsible for maintaining
the inventory tracking system and for purchasing additional inventory.
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Business Plan on ‘Office Refernishers’
Organizational Structure(Quality Office Supply)
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Business Plan on ‘Office Refernishers’
INSURANCE
Here we tried to identify the potential risks of loss inherent to business. These risks form the
basis for our business insurance needs. Some of the typical types of business insurance are listed
below:
Workers Compensation
Fire or Structural Damage
Business Liability
Vehicle Coverage
Loss & Theft of Building Contents
Glass & Sign Breakage
Business Interruption
Dram Shop
Care, Custody & Control
After considering your insurance needs and regardless of whether you deal with independent
agents, insurance brokers or work directly with insurance companies, be certain that you've done
some comparison shopping before you sign up. Some sources of information on business
insurance are:
Illinois Department of Insurance – Maintains experience information on insurance
companies.
Best’s Key Rating Guide – Maintains financial strength information on insurance companies.
Local Insurance Agencies – Check yellow pages for listings.
LICENSES AND PERMITS
List of Required Licenses, Permits, and Registrations. Information on Required Special Licenses, Permits, and Registrations.
(Liquor License, EPA Permit, Vehicle Licensees.) Sample Copies of the Required Licenses/Permits/Registrations.
Permit/LicenseName
Issuing Agency Valid Time Period Start-up Costs(TK)
Recurring Costs (TK)
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Business Plan on ‘Office Refernishers’
Product Description:
When we talk about such a business, as like “Office Equipment Supply firm”, we observe
a product mix in the market, that is, the products can be divided into two categories,
namely, one is “Durable Goods” and another one is “Consumable Goods”. Durable
Goods basically indicate those products that exist for a longer period of time, may be
more than one year, the examples are like Computers, Copiers, Phones, Fax Machines,
Furnitures, Book Cases, Calculators, Cameras, Carpets, and Typewriters etc. And
Consumable Goods last for less than one year, as like pens, staples, papers, day planners,
pencils, notepads, scissors and glue sticks etc.
Buyer’s Criteria:
The size and type classifications are the key to understanding the client base in Dhaka
City. Large institutional clients in Dhaka City are typically professional corporations.
Many times they are satellite offices of a national or multinational corporation with
autonomous responsibility for office management, including an office supply budget.
Purchases are primarily delivery on credit. Purchasers are commonly the office managers
or their assistants. They typically have between twenty and two hundred employees and
order in bulk.
Smaller, walk-in type clients in Dhaka City also tend to be professional corporations.
They typically have just one office, with no specified budget for office supplies
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Business Plan on ‘Office Refernishers’
(it's usually a line item under operating expenses). Purchases are made in person at the
store, payable by check or major credit card. There are typically less than twenty
employees, and administrative support personnel usually make the purchases, but it is not
uncommon for the principal of the firm to make the purchases themselves, especially in
offices of under ten persons. Many are sole practitioners in suite arrangements, sharing a
common secretary or answering service.
Both types of clients tend to be store and brand loyal, returning to the same location to
purchase the same products in a regular fashion.Their repeat business is frequent, as the
consumables they purchase tend to be exhausted quickly. This is especially true for the
walk-in customers, who tend not to buy in bulk.
Seller’s Criteria:
We have witnessed several trends in the industry. First, the days of the "mom and pop"
office supply store seemed to be coming to an end, as large chain stores increasingly
bought them out or drove them out of business. Second, as the industry became
consolidated, two types of stores seemed to be emerging from which consumers could
choose. One of these options was office "superwarehouses" in low-rent areas which
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Business Plan on ‘Office Refernishers’
primarily serviced institutional clients through large deliveries and counted on their
reputation to entice smaller customers to drive to their store. The other option was small,
high-visibility stores which carried a much smaller range of goods with extremely high
markup and focused on immediate need from walk-in convenience traffic and urgent
deliveries within a very limited area.
The result of this two-tiered trend in office supply stores was a shearing of the market
into two categories: the large institutional account and the small business walk-in type
customers. Obviously, office superstores tended to place strong emphasis on the former,
relying on advertising and lower prices to attract the latter. Office convenience stores,
however, placed their emphasis on the small order and walk-in consumer, serving the
needs of larger institutional accounts on a limited basis with limited inventories and
limited delivery.
Products and Services
Quality Office Supply will provide its customers with a wide range of office supplies.
Shelf inventory will include everything from paper goods to peripherals for computers
(Some basic software packages such as Smart Business System Software, cables, ink and
toner cartridges, etc.). Inventory in stock will be focused on the needs of the large,
institutional clients with priority given to those placing the largest and most regular
orders. The company will hire a small but very competent staff of intelligent,
professional individuals. These individuals will service the large institutional accounts
arranged by Managing Director, as well as the steady stream of individuals who will
patronize the Quality Office Supply location in Dhaka City.
Quality Office Supply plans to service a few large institutional accounts, which will
comprise 65% of its sales. These accounts will be professional corporations such as law
firms, accounting firms, engineering firms, and management consulting firms. Most of
these accounts will be brought by Managing Director by his familiarity. At least many of
those accounts will be the customers of different organization, who left due to poor
service and encouraged to start “Quality Office Supply”. Almost all of these prospects
are located in Dhaka City.
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Business Plan on ‘Office Refernishers’
MARKET SEGMENTATION
There are two real sources for market research supporting the Quality Office Supply plans.
Primary Research from the experiences of us in the Dhaka City office supply market,
and Secondary Research from media and private institutions.
We have witnessed several trends in the industry. First, the days of the "mom and pop" office
supply store seemed to be coming to an end, as large chain stores increasingly bought them out
or drove them out of business. Second, as the industry became consolidated, two types of stores
seemed to be emerging from which consumers could choose. One of these options was office
"superwarehouses" in low-rent areas which primarily serviced institutional clients through large
deliveries and counted on their reputation to entice smaller customers to drive to their store.
The other option was small, high-visibility stores which carried a much smaller range of goods
with extremely high markup and focused on immediate need from walk-in convenience traffic
and urgent deliveries within a very limited area.
The result of this two-tiered trend in office supply stores was a shearing of the market into two
categories: the large institutional account and the small business walk-in type customers.
Obviously, office superstores tended to place strong emphasis on the former, relying on
advertising and lower prices to attract the latter. Office convenience stores, however, placed
their emphasis on the small order and walk-in consumer, serving the needs of larger institutional
accounts on a limited basis with limited inventories and limited delivery.
The following table (Market Segments) represents a projected market share by institutional and
walk-in customers for Dhaka City over the next five years:
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Business Plan on ‘Office Refernishers’
Market Segments
SegmentsYear Sep 2010 Year 2
Sep 2011Year 3
Sep 2012Year 4
Sep 2013
Institutional Order for Delivery 7,215,415TK
64% 7,754,110TK
64% 8,450,259TK
62% 8,999,850TK
p62%
Institutional Phone and Walk-in Order 2,107,589TK
18% 2,356,987TK
18% 2,689,998TK
20’% 2,954,115TK
20%
Small Business Phone and Walk-in Orders
1,652,410TK
15% 1,842,549TK
15% 2,115,840TK
15% 2,498,589TK
15%
Private Individual Walk-in Orders 385,410TK
3% 380,250TK
3% 378,954TK
3% 375,800TK
3%
Total Market 11,360,824TK
100% 12,333,896TK
100% 13,635,051TK
100% 14,828,354TK
100%
Market Growth Rate 10% 10% 10% 10%
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Business Plan on ‘Office Refernishers’
Target Market
The target market in office supply is viewed in either one of two ways: a large institutional
account or a small, point of sale purchase.
The demographics of business in the Dhaka City area justify this classification. The Dhaka City
Chamber of Commerce data shows that most of the businesses in Dhaka City are professional
corporations in the service industry. Well over half are law firms, accounting firms,
management consulting firms, and engineering firms. Most of the rest are corporate
headquarters for other businesses.
The table (Target Markets) depicts percentages of projected income from increasing market
share of the different sectors in Dhaka City. In this table markets are grouped into two
categories: walk-in/pickup and delivery.
Consumers' buying decisions are made at two levels in the office supply industry, according to a
informal suvey by us to several customers. The first level of purchase was the walk-in
customer.These customers made their decisions according to three criteria. The first and most
important was the simple aspect of convenience and visibility of the location. A second and also
weighty consideration was the availability of the items needed or their functional equivalents.
Consumers in this category tended not to be as brand loyal, so they were willing to substitute
other equivalent items. However, the survey revealed that over 27% of the time either the store
did not have the item they wanted or the customer could not locate it within a reasonable period
of time. The helpfulness and knowledge of the customer service staff available at that store was
the third buying criteria revealed by the survey. The strong implication of the target market
survey for the walk-in client was that this market was "ripe for the picking" for an office supply
store that had:
1) A Visible Location;
2) A Wide Range of Inventory; and
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Business Plan on ‘Office Refernishers’
3) A Helpful and Knowledgeable Staff.
The second level of purchasing decisions were those made by larger institutional clients.
Their first and most urgent priority appeared to be delivery service -- speed, accuracy, and
reliability. Their second priority was customer service. They depended on having account
representatives who were familiar with the items they purchased frequently, and who had
sufficient knowledge about the market to assist them in finding more obscure items, such as
audio-visual supply items or letter openers.
Finally, an extremely important criterion for placing their business was availability of a large
inventory of the items they ordered most frequently at bulk prices. While they tended not to be
as price sensitive, they were typically successful at bargaining a 15 - 20% discount over retail
prices depending on the quantity of their purchases. Like the walk-in customers, the research
indicated that current customer service efforts were in most cases inadequate in the three areas
mentioned above.
Quality Office Supply plans to access the target market and rapidly increase its market share and
competitiveness in the industry by exploiting customer dissatisfaction with current stores.The
company’s competitive advantage will develop out of their unique ability to service both
institutional clients on a delivery basis and individual or corporate clients from their retail
location. For walk-in customers, Quality Office Supply will provide a very visible location and
will also have the "right" options available and in stock. Finally, it will have the personnel ready
to assist with questions in order to help customers ascertain which items they need and where to
find them in the store.
Quality Office Supply Supply will also provide the type of service that institutional clients are
looking for. Quality Office Supply intends to use its grand opening and subsequen advertising,
coupled with the personal contacts of Managing Director, to make the following points:
1) Quality Office Supply understands and responds to the needs of institutional clients for
immediate, accurate delivery.
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Business Plan on ‘Office Refernishers’
2) Quality Office Supply has trained experts in office supply needs, not just minimum-wage
service clerks.
3) Quality Office Supply maintains a broad range of inventory, and tailors its ordering system to
its clients' needs using its customized inventory tracking and ordering system.
Target Markets
Segment% of
Targeted Population
% of SalesYear 1
Sep 2010
Year 2Sep 2011
Year 3 Sep 2012
Year 4Sep2013
Institutional Delivery 60% 63% 64% 64% 66%
Institutional Phone and Walk-in 25% 21% 22% 23% 23%
Small Business Phone and Walk-in
10% 14% 12% 11% 10%
Private Individual Walk-in 5% 2% 2% 2% 1%
Total100% 100% 100% 100%
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Business Plan on ‘Office Refernishers’
CUSTOMER’S PROFILE
The size and type classifications are the key to understanding the client base in Dhaka City.
Large institutional clients in Dhaka City are typically professional corporations.
Many times they are satellite offices of a national or multinational corporation with autonomous
responsibility for office management, including an office supply budget. Purchases are primarily
delivery on credit. Purchasers are commonly the office managers or their assistants.
They typically have between twenty and two hundred employees and order in bulk.
Smaller, walk-in type clients in Dhaka City also tend to be professional corporations.
They typically have just one office, with no specified budget for office supplies (it's usually a
line item under operating expenses). Purchases are made in person at the store, payable by check
or major credit card. There are typically less than twenty employees, and administrative support
personnel usually make the purchases, but it is not uncommon for the principal of the firm to
make the purchases themselves, especially in offices of under ten persons. Many are sole
practitioners in suite arrangements, sharing a common secretary or answering service.
Both types of clients tend to be store and brand loyal, returning to the same location to purchase
the same products in a regular fashion. Their repeat business is frequent, as the consumables
they purchase tend to be exhausted quickly. This is especially true for the walk-in customers,
who tend not to buy in bulk.
szData on the composition of the business community in Dhaka City is available from Dhaka
City News and is set forth in the table (Customer Profile) below:
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Business Plan on ‘Office Refernishers’
Customer’s Characteristics
The following is a general description of our customers. These characteristics assist us in designing our products / services and promotional / sales strategies:
o Corporate Clients:
1. Small to big size firms - both general and special type of business
2. Most operations are locally operated
3. Typically have 10 – 1000 employees on salary
4. Mostly in the competitive market
5. Time is the greatest and least-available resource
6. Conservative when it comes to new technology and ideas
7. Employees work long hours and usually take on multiple roles
8. While the job superintendents are knowledgeable in the construction business,
most lack the computer knowledge to perform even the simplest task on the
computer.
o Walkin Customers:
1. More than 18 years old in age.
2. Male and Female both are the potentials buyers.
3. The population outside of the “Dhaka City” is not applicable
4. “Income Level” starts from 10,000 TK to more
5. Falls into the category of “Middle Class” to “High Class” family
6. Occupation can be anything from students to teachers, engineers, doctors etc.
7. May be illiterate or literate, but we assume that most of them will be
“Literate”.
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Business Plan on ‘Office Refernishers’
COMPETITION
Based on a thorough industry analysis we has put together the table (Competitive
Analysis) which compares and contrasts the planned operations for Quality Office Supply
with its competitors.
Tanin, Autobi are the two closest existing competitors for the business of large
institutional clients. Their strengths include their advertising and reputation, large
selections, longer hours, and the services they provide (e.g., copying, binding, etc.).
There are several responses which Quality Office Supply plans to make to these
competitors. First, Quality Office Supply will offer a better location in the heart of Dhaka
City, making access to their inventory and personnel easier, and sharply reducing their
delivery times for emergencies. Second, Quality Office Supply will provide superior
customer service, with a staff of representatives who will pay close attention to the needs
of their clients, and with easy access to the “top echelon” . Third, Quality Office Supply
will tailor its inventory to meet the needs of its clients with its customized inventory
system and thereby, increasing the chances of providing the items a customer needs
immediately.
Mini Stationary Shop and Tiny Office Corner in the Dhaka City Mall and the Dhaka City
Entertainment Center provide Quality Office Supply with its competition for walk-in
customer. Their strengths are their location (next to and on the way to food courts), and
the illusion of a quick stop to pick up supplies.
The response to these competitors from Quality Office Supply is threefold. First, Quality
Office Supply will actually decrease the amount of time spent in the store. While Mini
and Tiny are smaller and a slight bit more convenient to the average Dhaka City shopper,
Quality Office Supply will still be very close, and, most importantly, has ample customer
service personnel available to handle questions of item location, return, and checkout.
The result will be a much quicker shopping trip on balance. As well, Quality Office
Supply will provide a wider inventory selection, reducing the risk that a shopper will not
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Business Plan on ‘Office Refernishers’
only spend more time in the store but will not find what he or she wants. Third, Quality
Office Supply will offer substantially lower prices than the inflated chain stores. While
market research shows that price sensitivity is not as high an issue in the office supply
world in Dhaka City, Quality Office Supply hopes to make it an issue by providing
walk-in customers with an alternative pricing structure they will notice and enjoy.
The goal of Quality Office Supply is to capture 20% of the institutional market in Dhaka
City, and 25% of the walk-in business within the first six months. It also hopes to
achieve a sales level of 5,000,000.00 TK in its first year in Dhaka City.
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Business Plan on ‘Office Refernishers’
COMPETITIVE STRATEGIES
This section analyzes the strong and weak areas of our business in the marketplace
(SWOT Analysis). The result of the SWOT analysis and the information presented above
are used to formulate our competitive strategies.
SWOT Analysis (Strength-Weakness-Opportunity-Threat)
STRENGTH
Staff knowledgeable of Office Equipments and Modern Technology
Provide services to small / medium size organizations
Our business does not require large investment and, therefore, is flexible to adjust our product/service to changing demand
WEAKNESS
Lack of name recognition
Difficult to expand geographically
Hard to recruit additional staff with BOTH Office Equipment and computer knowledge
OPPORTUNITY
Many office equipment companies are still in progress of transforming themselves into the high-tech information age companies
Many office equipment companies have little time or skills to become expert in computers
Software applications and services of project-specific-web-page providers (Bidcom or
THREATS
May be difficult for clients to see the full benefit of computer equipments
Slowdown in economy
New competitors entering the field
Software programs becoming more user-friendly
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Business Plan on ‘Office Refernishers’
Blueline.Online) become more and more diversified, and thus make it difficult for smaller companies to find out what an appropriate solution is for their needs
Needs of clients demand construction staff to be more computer literate (field report, equipment report, QC report)
Project specified software
Software producers to customize products to tailor the office equipment industry
As more young Business Graduates enter into business, more computer literacy in office Equipment companies
Competitive Strategy
According to Michael Porter, competitive strategies fall into three categories:
Price Leadership:
In this strategy, attract customers by having the lowest price. Profit is realized by
capturing large market share
Product Differentiation:
This strategy provides something different (not necessarily cheaper) from existing
competitors. Market share is captured by doing something no one else is doing.
Focused Method:
The last strategy provides same service as competitors but concentrate energy
only at certain area, market, or niche.
In light of these three strategies, we have concluded that “price leadership” is a
poor strategy for our business. “Office Equipment” is not a commodity product
(i.e. salt) but a value-adding service. Our customers purchase our services based
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Business Plan on ‘Office Refernishers’
upon perceived benefits, not on cost alone. Instead, we have developed
competitive strategy hybrids both the “differentiation” and the “focused”
elements. While other firms are just offering only “Durable Goods” like Chair,
Tables, Furniture's etc. we are offering “Consumable Goods” too like Pen, Paper,
and Ink etc.
Benefits vs. features
As business owners, we are naturally confident and enthusiastic about the features
of our product. Yet, in reality, the benefits of our services are what really matter
to our customers. The following table provides a comparison of the features and
benefits of our business:
FEATURES BENEFITS
Expertise in BOTH computer & office equipments
Flexible location and schedule
Services focus on applying technology to office equipment firm
Training & consulting relevant to our customers’ business & needs
Our services minimizes interference with our customers’ busy schedule
Allows our customers to apply our services to their business right away
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Business Plan on ‘Office Refernishers’
MARKETING STRATEGIES
Objectives and StrategiesQuality Office Supply has set its marketing objectives at capturing 20% of the Dhaka
City institutional client market share, and 25% of the Dhaka City walk-in market share
in the first twelve months. In order to support these objectives, Quality Office Supply
plans to use a marketing strategy which revolves around the "DEPENDABLE" theme,
and will make itself associated with dependability in delivery, customer service,
availability of items, availability of choices, and consistently reasonable prices.
There are plans to implement this strategy with an aggressive marketing campaign
targeted at the disgruntled Dhaka City office products customer. Also, Quality Office
Supply plans to concentrate sales efforts on a few very large institutional accounts, and
on attracting walk-in business from small, professional corporations in order to meet its
objectives.
Unique Selling Advantage
The most important unique selling advantage will be its customer service. The industry
trend toward consolidation has left consumers with the choice of either a large office
warehouse with minimum wage inventory personnel or a small, overpriced mall store
with minimum wage counter clerks. Quality Office Supply plans to offer career-oriented
customer service agents/salespeople for its large institutional clients.
Quality Office Supply will add to its customer service advantage by offering institutional
clients the fastest and most accurate delivery service possible. Its location in the heart of
Dhaka City coupled with its vast inventory assures customers that their best option to fill
an extensive delivery order rapidly is to rely on Quality Office Supply.
Customer service will also be elevated to higher standards by a customized inventory
system, which will allow the company’s employees to execute a proactive ordering
policy which tracks and projects customer ordering needs.
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Business Plan on ‘Office Refernishers’
As well, Quality Office Supply will offer the most knowledgeable and helpful customer
service representatives available. Both mall shops and office superstores rely on low-
wage workers who go through only a minimal training program. The company, on the
other hand, has a directive from the top -- we insist on hiring only well educated, caring
individuals who demonstrate an aptitude for understanding the office supply business.
The company’s customer service representative’s primary objective will be
responsiveness to the wants and needs of customers. Thus, Quality Office Supply can
assure clients that their questions will be answered in a correct and timely fashion and
their orders will be filled accurately.
This advantage will be heavily promoted in the advertising theme of “DEPENDABILITY.”
Sales Targets
Most sales for institutional clients will take place in two ways. First, Managing Director
will leverage his current contact base through referrals and networking in non-business
environments. He will employ direct selling methods and meets with each client
personally to close the deal. Second, customer service representatives will learn how to
emulate the leveraging tactics of Managing Director with their own clients, most of
whom will be delegated as accounts by Managing Direcotr. These representatives will
use referrals and telemarketing to establish additional institutional accounts. All sales for
walk-in clients will typically be acquired through word-of-mouth, yellow pages and print
advertisements, as well as location.
Future plans of expansion embrace additional selling tactics. Existence in a high profile
location is itself expected to be a powerful selling tactic. Additionally, Managing
Director will plan to provide a list of business names and numbers from among Dhaka
City small professional corporations to the customer service representatives to augment
their telemarketing efforts.
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Business Plan on ‘Office Refernishers’
CHANNELS OF DISTRIBUTION
Quality Office Supply will purchase its products primarily from manufacturers.
However, some items (such as computer peripherals) must be purchased from
wholesalers who have exclusive contracts with the manufacturers. The connections of
Managing Director will establish and maintain in the office supply world will help the
company take advantage of competing channels of distribution in order to find the lowest
wholesale prices available, especially for the most common items. Expert purchasers in
the inventory department, who will have been trained by “Expert” to know standard
margins in the wholesale office supply world, will negotiate for the best deals. When an
issue arises, Managing Director will intervene for direct negotiations.
Quality Office Supply will sell retail directly to the public through its store and its
customer service account representatives. The Quality Office Supply location will be its
secondary distribution channel, at least in terms of gross sales. The primary channel will
be through the deliveries to large institutional accounts. The company will use its
customer account representatives to stay in constant contact with its institutional clients.
These representatives will also be sales persons in charge of keeping the office managers
up to date on the latest sales and promotional items. As orders come in or are
successfully solicited, the delivery channel will go into effect.
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Business Plan on ‘Office Refernishers’
PRICING
The pricing structure of Quality Office Supply will be largely governed by industry
standards, but will remain quite competitive with the larger chain stores. The pricing
structure will be designed to encourage institutional clients to make bulk purchases --
progressive discounts are offered for these orders, and will also be divided according to
classes of product.
The pricing schedule will be roughly in line with competitors in this industry. The
following comparison reveals the differences between competitors in the industry.
Generally speaking, the larger chain stores tend to be more competitive in prices, and the
mall stores tend to be more inflated. The low ranges for Quality Office Supply in the
following table (Price Comparison) for the company assume the lowest prices the sales
representatives will be able to negotiate. Only Managing Director will be able to
authorize a departure from this structure:
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Business Plan on ‘Office Refernishers’
Price Comparison
Products / Services Company High End Markup
Low EndMarkup
Consumable Office Supplies
Tanin 22-75% 17-45%Autobi 20-65% 20-45%Mini Stationary Shop 28-102% Same
PricesTiny Office Corner 25-89 Same
PricesQuality Office Supply 25-68% 15-45%
Office Machines
Tanin 26-45% 20-45%Autobi 25-45% 20-45%Mini Stationary Shop 35-75% Same
PricesTiny Office Corner 33-75% Same
PricesQuality Office Supply 20-40% 15-40%
Office Furnishings
Tanin 15-35% 15-25%Autobi 20-40% 15-35%Mini Stationary Shop 15-35% 15-30%Quality Office Supply 20-40% 15-40%
MiscellaneousTanin 15-40% 15-25%Autobi 20-50% 15-40%Quality Office Supply 20-40% 15-30%
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Business Plan on ‘Office Refernishers’
PROMOTION
Advertising
Quality Office Supply will concentrate on advertising techniques found to be most
effective in the office supply industry. We insist on maintaining a visible presence in the
local print media, and will always have a small, straightforward ad in the weekly Dhaka
City News, as well as regular ads announcing special prices in the larger Metropolitan
Times. Quality Office Supply will also consistently advertise in the local yellow page
directories. Twice yearly, the company plans to use direct mail to advertise its semi-
annual sales. The advertising budget will amount to 7% of gross sales. The table
(Advertising) below represents the projected advertising efforts:
Advertisin
Advertising
- -
Medium YearTotal
Yellow Pages6400
Weekly Paper
20,500
Daily Paper30000
Direct Mail12,000
Total Spending68900
Gross Sales370,310
% of Gross Sales
28
Business Plan on ‘Office Refernishers’
Sales Promotions
Quality Office Supply will initiate a number of promotional offers in conjunction with its
grand opening in Dhaka City. A number of loss leader items will be advertised and sold
at cost in order to attract heavy foot traffic, stimulate initial demand for delivery orders,
and prompt persons who patronize competitors to try Quality Office Supply. The
company will also use a discount pricing structure for institutional clients in order to
induce heavier volumes of purchases and to be competitive with the large office supply
chains.
Quality Office Supply also plans to institute an incentive program for its sales force. A
profit sharing program has been designed for the sales force based on their total
commissions earned each year. The money will be paid out in mid-December in the form
of a holiday bonus. The estimated budget impact of this plan has been estimated and
included in the projected wages section of the financial statements.
Sales will also play an important part of promotional efforts. Quality Office Supply plans
to have semiannual sales during peak periods of business in Dhaka City -- late summer
(the Summer Clearance Sale), and December (the Holiday sale). The necessary
expenditures to promote these sales have been included in the advertising budget.
Publicity and Public Relations
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Business Plan on ‘Office Refernishers’
Quality Office Supply has taken the position that the most favorable public relations
strategy stems from efforts to make a positive impact on the local community. We
believe it will attract favorable attention from efforts to improve the community via an
employee volunteer force. Different firms, Managing Directors institute programs in
which employees volunteer time as a group at local community service events. The local
media used to carry story about this innovative program, and many of their clients will
ask them to assist their office managers in setting up the same program in their
companies.
As well, the company plans to use its grand opening to generate additional free publicity.
Managing Director will speak with several members of the local media, who will plan to
cover the event. Networking with members of the local chamber of commerce (of which
he is supposed to be a member for several years) Managing Director will arrange for
several chamber officials to attend the event. Wherever these officials go, many elite
members of the local business community also go, improving the odds that the grand
opening will generate additional revenue for the store. The budget for promotion of the
grand opening event is included in the advertising costs.
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Business Plan on ‘Office Refernishers’
FINANCIAL STRATEGIES
Sources and Uses of Capital
In order for Quality Office Supply to successfully commence operations, we invest
Tk.10, 00,000 in start-up funding. Each owner will contribute Tk.170000 of his own
money and require financing for Tk. 500,000 from a lender. The business requires a 6
years loan that will be repaid in monthly installments at an 8% rate of interest. The table
below (Sources and Uses of Capital) represents how the funds will be utilized in the
Company's first year in business:
Description Amount (In Taka)
Sources
Business Loan Tk.400,000
Owner Investment 600,000
TOTAL SOURCES 10,00,000
Uses
Office Equipment 100,000
Advertising 69,000
Salaries 150,000
Working Capital 200,000
Reserve for Contingencies 69,089
Building Lease 200000
TOTAL USES 788,089
Income Statement For 2010 (All the Amounts are in Taka)
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Business Plan on ‘Office Refernishers’
Description August September October November December Total Gross Sales 74,080 74,080 74,010 75,200 72,940 370310
COST OF GOODS SOLDBeginning Inventory
0 25,500 25,700 24,800 22,600 0
Purchase 20,900 20,900 20,320 18,950 37,300 118370
Less end of month inventory
25,700 25,700 24,800 22,600 50,500 149300
Cost of Goods Sold
20,700 20,700 21,220 21,150 9,400 93170
Gross Profit on Sales
53,380 53,380 52,790 54,050 63,540 277140
GENERAL & ADMINISTRATIVE EXPENSESAdvertising 10,100 10,100 10,300 10,400 28,000 68900
Capital Equipmen
210 180 180 150 138 858
Leasehold Depreciatio
50 50 50 50 85 285
Contrib. 0 0 0 0 0 0
Entertain. 1,622 1,622 1,622 1,622 1,622 8110
Insurance 3,142 3,142 3,142 3,142 4,290 16858
Legal Expenses 1,500 1,200 1,488 1,700 1,600 7488
Licenses 0 0 0 0 0 0
Rent 1,000 1,000 1,000 1000 1000 5000
Office Supplies 500 500 400 450 530 2380
Outside Services 800 1,200 2,000 1,255 1,540 6795
Postage 85 85 80 70 70 390
Taxes (Income) 10,150 11,000 10,310 10,920 0 42380
Telephone 1,600 1,500 1,550 1,600 1,700 7950
Selling Expenses 920 740 1,100 1,100 850 3610
Travel Expenses 0 480 485 0 0 965Wages 12,500 13,400 12,150 12,960 13,710 64720
Membership Dues
0 0 0 0 0 0
Other 1,700 1,800 1,700 1,600 1,800 8600Interest Paid 1,000 1,000 1,000 1,000 1,500 5500
TotalG. &Ad.Ex 46,879 48,974 48,562 49,029 58,435 251879
NET INCOME 4,191 4,406 4,228 5,021 5,105 22951
Balance sheet For End of the Year
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Business Plan on ‘Office Refernishers’
(All the Amounts are in Taka)
Description Year 2010 Year 2011 Year 2012 Year 2013
Cash – Checking 162,897 401,810 649,835 749,634
Accounts Receivable 180,031 128,788 134,339 42,195
Inventory 149300 210,765 225,678 220,654
Investment Accounts 55,982 96,547 98,562 110,215
Total Current Assets
548,210 837,910 1,108,414 1,122,698
Leasehold Improvements
23,098 25,870 26,910 30,181
LESS: Accum. Deprec.- Improvements
285 296 325 330
Furniture and Fixtures 35,744 48,525 52,236 53,698
LESS: Accum. Deprec.- Furniture/Fixtures
875 915 920 925
Vehicles 194,635 215,650 226,540 235,649
LESS: Accum. Deprec.-Vehicles
16,290 18,520 20,523 2,569
Total Fixed Assets
236,027 270,314 283,918 315,704
Organization Costs 2,569 3,159 3,569 3,785
LESS: Accum. Amortization-Orgn. Costs
643 660 685 690
Total Other Assets 1,926 2,499 2,884 3,095
TOTAL ASSETS
788089 1,110,723 1,395,216 1,441,497
LIABILITIES AND EQUITYAccounts Payable 41,460 28,650 33,160 49,920
TotalCurrent Liab.
204,373 268,324 235,365 224,309
Paid-in Capital 40619 91,709 172,701 170917
Retained Earnings 122951 206,392 429,109 569,672
Total Equity 320,146 444,289 558,086 576,599
Total Liabilities and Equities
788089 1,110,723 1,395,216 1,441,497
Cash Flow Statement
Description August September October November December Year End
R E C E I P T SBeginning
Cash Balance118,512 110,685 140,456 111,689 83,413 464755
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Business Plan on ‘Office Refernishers’
Cash Sales 43,715 44,510 43,560 44,290 44,950 221025
Accounts Receivable
13,668 14,785 13,425 13,455 13,995 69328
Owner Investment
50000 0 0 50000 100,000 200000
Loan Proceeds
50000 50000 50000 0 0 150000
Total Cash Available
275931 219,980 247441 219434 242,358 1205144
D I S B U R S E M E N T
Purchases (collateral material)
18,480 20,900 20,320 18,950 37,300 115950
Advertising 10,100 10,100 10,300 10,400 28,000 68900
Capital Equipment
4,110 4,280 5,600 5,500 5,338 24818
Leasehold Improvements
0 0 7650 7725 7723 23098
Contributions 5000 0 0 0 0 5000
Entertainment 1,622 1,622 1,622 1,622 1,622 8110
Insurance 3,142 3,142 3,142 3,142 4,290 16858
Legal Expenses
1,500 1,200 1,488 1,700 1,600 7488
Rent 1,000 1,000 1,000 1,000 1,000 5000
Office Supplies
500 500 400 450 530 2380
Outside Services
800 1,200 2,000 1,255 1,540 6795
Postage 85 60 85 80 70 380
Taxes (Fed., Sales, State)
6,150 6,000 6,310 6,920 15,500 40880
Telephone 1,600 1,500 1,550 1,600 1,700 7950
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Business Plan on ‘Office Refernishers’
Selling Expenses
920 740 1,100 1,100 850 4710
Travel Expenses
600 480 485 0 0 1565
Wages 12,500 13,400 12,150 12,960 13,710 64720
Membership Dues
500 0 0 0 0 500
Other 1,700 1,800 1,700 1,600 1,800 8600
Loan Payment 0 0 0 0 32,000 32000
Total Disbursement
64,209 78,524 84,752 85,021 162,850 475356
OPERATING CASH
111,685 141,456 112,689 84,413 79,508 529751
Interest Paid 1,000 1,000 1,000 1,000 1,500 5500
ENDING CASH
BALANCE
28728 -68924 -42237 -27004 -156073 -265510
Cost Containment
Quality Office Supply will initiate an aggressive cost-control strategy to prevent start-up
and operating costs from escalating throughout the company which could potentially
erode profit margins. This will prevent operating costs from escalating over projections
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Business Plan on ‘Office Refernishers’
throughout the company’s start-up efforts. The table (Cost Containment) is a basic
version of the timetable for the cost-control program.
The self-directed cost audit containment will be comprised of several programs which are
used for internal cost control purposes. Several of the programs are mentioned above.
The Cost Reduction Reward Program will be designed to enable employees to earn
bonuses based on projected cost savings of the suggestions they provide. Employees will
be encouraged to become aware of areas where inefficiencies exist. Managing Director
will evaluate their input and reward suggestions where the reductions in cost of
operations, as a result, have been substantial.
Managing Director will also conduct a complete analysis of the management structure of
the company periodically to determine if any alternative organization of that structure
could result in savings.
The Preliminary Logistics Cost Audit portion of the Cost Containment Strategy is the
area in which substantial savings have been realized, even before business operations
have commenced. Managing Director was initially weighing several inventory
management options, each of which appeared to satisfy the company’s needs. However,
upon the recommendation of Quality Office Supply will initiate an inventory
management strategy that takes advantage of a software program for the company. This
is expected to result in significant cost savings in the logistics area by providing for
greater efficiencies and enabling a greater ability to service customers appropriately.
Item Implementation Date Review Date
Cost Reduction
Shipping Cost Reduction 1/31/200X 2/15/200X
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Business Plan on ‘Office Refernishers’
Budgets
Employee wage and training budgets 3/1/200X 4/1/200X
Project Name
Inventory control measures 1/1/200X 2/15/200X
Assumptions
Quality Office Supply has used the following assumptions in the preparation of its
financial statements. All calculation methods adhere to Generally Accepted Accounting
Principles:
The method of inventory valuation was used on a last-in, first-out basis.
The cash method of accounting was used.
A straight line depreciation formula was used.
A 12% annual rate of interest was assumed for accounts payable and
accounts receivable unless otherwise noted.
Start-Up Costs
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Business Plan on ‘Office Refernishers’
An additional investment will be required in order for Quality Office Supply to commence
business. A budget of the company’s required resources has been compiled in the table (Start-Up
Costs) below:
U S E C O S T (Taka)
Cash 100,000
Salaries 50,000
Inventory (Collateral Material) 55,600
Furniture & Equipment 35744
Rent Deposits 30,000
Utilities /Telephone 3,000
Insurance 10,000
Legal & Professional Fees 22,000
Advertising & Promotion 30,300
Miscellaneous (supplies, etc.) 23,000
TOTAL START-UP COSTS 359644
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Business Plan on ‘Office Refernishers’
HUMAN RESOUECE MANAGEMENT
Requirement Posts, Labor and Personnel
For our office equipment firm, we estimated the following our requirements. This is not
the final for our operation, further need we will go for next step.
1. Administrative and Sales:
NAME OF THE POST NUMBER
Manager 1
Export officer 1
Accountant 1
Cashier 2
Computer operator 2
Peon 2
Guard 2
Sweeper 1
Total 12
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Business Plan on ‘Office Refernishers’
2. Managerial and Technical staff:
NAME OF THE POST NUMBER
Factory manager 1
Production manager 1
Assembly in charge 1
Quality Controller 1
Finishing supervisor 3
Mechanics 2
Store keeper 2
Line chief 2
Machine operator 25
Skilled labor (finishing) 5
Packers 5
Electrical skilled labor 2
Total 50
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Business Plan on ‘Office Refernishers’
Training, Other Qualifications, and Advancement:
Because of the diversity of operations and job requirements, there is no standard preparation for this occupation. However, a college degree is required, even for those who have worked their way up the ranks. Our production managers have a college degree in business administration, management, industrial technology, or industrial engineering. Others have a master's degree in industrial management or business administration (MBA). Some are former production-line supervisors who have been promoted. Although many employers prefer candidates with a business or engineering background, some companies hire well-rounded liberal arts graduates.
As production operations become more sophisticated, increasing numbers of employers are looking for candidates with graduate degrees in industrial management or business administration. Combined with an undergraduate degree in engineering, either of these graduate degrees is considered particularly good preparation. Managers who do not have graduate degrees often take courses in decision sciences, which provide them with techniques and mathematical formulas that can be used to maximize efficiency. Companies also are placing greater importance on a candidate's interpersonal skills. Because the job requires the ability to compromise, persuade, and negotiate, successful production managers must be well-rounded and have excellent communication skills.
Those who enter the field directly from college or graduate school often are unfamiliar with the firm's production process. As a result, they may spend their first few months on the job in the company's training program. These programs familiarize trainees with the production line, company policies, and the requirements of the job. In larger companies, they also may include assignments to other departments, such as purchasing and accounting. Our production managers have worked their way up the ranks, perhaps after having worked as first-line supervisors. These workers already have an intimate knowledge of the production process and the firm's organization. To be selected for promotion, however, they must obtain a college degree, must demonstrate leadership qualities, and usually must take company-sponsored courses in management skills and communication techniques. In addition to formal training, production managers must keep informed of new production technologies and management practices. Many belong to professional organizations and attend trade shows at which new equipment is displayed; they also attend industry conferences and conventions at which changes in production methods and technological advances are discussed.
Production managers with a proven record of superior performance may advance to plant manager or vice president. Others transfer to jobs with more responsibilities at larger firms.
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Business Plan on ‘Office Refernishers’
CONVERSION PROCESS
Our operational management system basically based on of our physical goods. As we are
establishing an office equipment firm, so the whole conversion process based on the input
as labor, capital and structural management process where as an output we delivered
good and services. Like an office equipment firm like ours the operation system is the
transformation that occurs when the operative personnel inputs (equipment, labor) are
converted into such as outputs as good and proper services.
Picture: IO Process
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Business Plan on ‘Office Refernishers’
9.1.1 Nature of the Work:
Our production managers coordinate the resources and activities required to produce
hundreds of goods every year in the Bangladesh. Although their duties vary from plant to
plant, firm’s production managers share many of the same major responsibilities. These
responsibilities include production scheduling, staffing, procurement and maintenance of
equipment, quality control, inventory control, and the coordination of production
activities with those of other departments.
The primary mission of firm production managers is planning the production schedule
within budgetary limitations and time constraints. They do this by analyzing the plant's
personnel and capital resources to select the best way of meeting the production quota.
Industrial production managers determine, often using mathematical formulas, which
machines will be used, whether new machines need to be purchased, whether overtime or
extra shifts are necessary, and what the sequence of production will be. They monitor the
production run to make sure that it stays on schedule and correct any problems that may
arise.
Firm’s production managers also must monitor product standards. When quality drops
below the established standard, they determine why standards are not being maintained
and how to improve the product. If the problem relates to the quality of work performed
in the plant, the manager implement better training programs reorganize the
manufacturing process, or institute employee suggestion or involvement programs. If the
cause is substandard materials, the manager works with the purchasing department to
improve the quality of the product's components.
Because the work of many departments is interrelated, managers work closely with heads
of other departments such as sales, procurement, and logistics to plan and implement
company goals, policies, and procedures. For example, the production manager works
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Business Plan on ‘Office Refernishers’
with the procurement department to ensure that plant inventories are maintained at their
optimal level.
This is vital to a firm's operation because maintaining the inventory of materials
necessary for production ties up the firm's financial resources, yet insufficient quantities
cause delays in production. Just-in-time production techniques have reduced inventory
levels, making constant communication among the manager, suppliers, and purchasing
departments even more important. Computers play an integral part in this coordination.
They also are used to provide up-to-date information on inventory, the status of work in
progress, and quality standards.
Production managers usually report to the plant manager or the vice president for
manufacturing, and may act as liaison between executives and first-line supervisors. In
many plants, one production manager is responsible for all aspects of production.
Working Condition:
Our production managers divide their time between production areas and their offices.
While in the production area, they must follow established health and safety practices and
wear the required protective clothing and equipment. The time in the office, which often
is located near production areas, usually is spent meeting with subordinates or other
department managers, analyzing production data, and writing and reviewing reports.
Our production managers work more than 40 hours a week, especially when production
deadlines must be met. In facilities that operate around-the-clock, managers often work
late shifts and may be called at any hour to deal with emergencies. This could mean
going to the plant to resolve the problem, regardless of the hour, and staying until the
situation is under control. Dealing with production workers as well as superiors when
working under the pressure of production deadlines or emergency situations can be
stressful. Restructuring has eliminated levels of management and support staff, thus
shifting more responsibilities to production managers and compounding this stress.
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Business Plan on ‘Office Refernishers’
Manufacturing Process:
According to manufacturing of products, as we are going to produce different types of
products, so its a little bit difference to follow all processes for all the products same. But
the main process will be same for all the products processing. First duty of our office
equipment firm will be collect raw materials from backward linkage. Electronics parts
will be assemble and placed on the table and fixing up and as per desired measurement by
electrical machine. The different parts of the equipments are then joined by another
machine to form a complete desire. Technical issue will be completed by the technical
engineer using checking machine. The equipments will then be check by the computer
and finally packed for sale. The flow diagram of the manufacturing process in given
below:
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Business Plan on ‘Office Refernishers’
Picture: The Conversion Process
Machinery and Equipment:
Machine and equipment are very important parts to setup an office equipment firm.
Because whole production is directly depend on its. So as our plan we also need
machinery and equipment to lunch our different kinds of product. According to our
product lay out we need some machines and equipments like Checking machine, package
machine, assembly machine with table and stand, electrification and other finishing and
packing equipments. Most of our machines and equipments will be imported from
different countries. These are China, Hong Kong, Taiwan and Japan. The list of
necessary machinery and equipments are given below:
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Business Plan on ‘Office Refernishers’
MACHINE AND EQUIPMENT QUANTITY (SETS)
Worker Dress 300
Anti Fire System 100
Hot water machine 4
Air cooler 20
Electronic parts machine 50
Assembly machine (Manual) 120
Assembly Machine (Automatic) 120
Voltage Guard 20
Generator 2
Fuel Container 20
Computer 50
Office Setup Equipments and Cost
Setup cost Quantity Per Unit Total Year Depreciation
Server 1 60000 60000 4 15000
Work Station 5 45000 225000 4 56250
Network Hub 1 2000 2000 4 500
Ups 7 8000 56000 6 9333.33333
Network Interface Card 6 800 4800 4 1200
Network Cable 100 24 2400 4 600
Modem 1 5000 5000 4 1250
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Business Plan on ‘Office Refernishers’
Scanner 1 6000 6000 4 1500
Printer (laser) 1 14500 14500 4 3625
Printer (Ink Jet) 1 4500 4500 4 1125
CD Writer 1 10000 10000 4 2500
Decoration Cost
Table (TD) 1 5000 5000 8 625
Table (Mkt. M) 1 5000 5000 8 625
Table (Developers) 3 4000 12000 8 1500
Table (Reception) 1 5000 5000 8 625
Chair (TD) 1 3000 3000 8 375
Chair (Mkt. M) 1 3000 3000 8 375
Chair (Employees) 4 2000 8000 8 1000
Sofa (Visitors) 1 10000 10000 8 1250
Book Shelf 1 4000 4000 8 500
Air Cooler 4 40000 160000 6 26666.6667
T&T Telephone Line 2 22000 44000
Mobile (GP-GP) 1 10000 10000
PABX 1 25000 25000 4 6250
Technical Service and Quality control
To setup those short of machinery and for other technical part of the production layout
we will hire some foreign technician those have enough knowledge on to setup garment
industry. Besides, skilled personnel will be required locally for smooth operation and
maintenance of machinery.
9.3.1 Different Essential Parts:
There are some parts which is mostly necessary to set up an office equipment firm. So
according to our office equipment firm, we also identified such as some essential task
which is give below:
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Business Plan on ‘Office Refernishers’
Water:
For cleaning and other domestic purpose water will be required. It is estimated that there
will be about 3500 gallons of water will be needed in the factory every working day. We
will arrange these amounts of water from the help of WASA and from our own water
pump. There will be also two reserve tanks in to the under ground. The capacity of every
tank will be 1000 gallons.
Power:
The connection load of the project will be 50 k.w. and maximum demand will be around
40 k.w. The power already available at the proposed location. The additional power will
be arranged by the owner of the building. There will be an arrangement of stand by
generator. But this will be setup into the next production year.
Fuel and Lubricants:
To run the firm, we will need different kinds of fuel and lubricants like patrol, diesel,
grease etc. The daily estimated of fuel and lubricants are given below:
1. Patrol 500 gallons
2. Diesel 300 gallons
3. Grease 250 lbs
Forecasting
A forecasting is an estimate of a future event achieved by systematically combining and
casting forward in a predetermined way data about the past.
And to forecast a particular thing, we must have to know some information about that
particular thing. Like for forecast a particular product we must have to know the demand
or the value of that product according to time which is called Time Series Analysis.
Now according to our plan, to forecast any product demand to compare with the actual
demand with that product, first we choose different office equipment firm and compare to
our sales.
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Business Plan on ‘Office Refernishers’
Now forecast product selling, we consider our varsity products say computer, laptop,
projector, photo copier etc. Some monthly information about products and monthly sales
of total products of our office equipment firm given below:
We have different personal of sells department. The sells department analyzes the market
demand and after that they will let us know the demand. Then the analyst works
according to the demand
(All Amounts in Lacs)
1. (August/10):
Total Cash : 3954 tk
Total Sales : 1396 tk
Total Profit : 185 tk
2. (September/10):
Total Cash : 3727 tk
Total Sales : 1448 tk
Total Profit : 176 tk
3. (October/10):
Total Cash : 2513 tk
Total Sales : 3287 tk
Total Profit : 488 tk
4. (November/10):
Total Cash : 3209 tk
Total Sales : 3025 tk
Total Profit : 496 tk
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Business Plan on ‘Office Refernishers’
5. (December/10):
Total Cash : 1556 tk
Total Sales : 3317 tk
Total Profit : 486 tk
6. (January/11):
Total Cash : 1934 tk
Total Sales : 3324 tk
Total Profit : 420 tk
7. (February/11):
Total Cash : 2449 tk
Total Sales : 1570 tk
Total Profit : 120 tk
Data from Survey:
TIME
August/10 September/10 October/10 November/10 December/10 January/11 February/11
DEMAND
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Business Plan on ‘Office Refernishers’
64 75 143 172 185 184 77
Time Series Analysis:
W.M.A (Weighted Moving Average):
In weight average method we can count seasonal rate, spike and individual biasness. But
here also a problem, that is individual biasness. To calculate W.M.A we have to put
weight on actual data. This weight will be between ‘0-1’ means ‘0<=W<=1’.
n
W.M.A formula is = ∑ Wi Di (Where Wi is weight and Di is actual demand)
i=1
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Business Plan on ‘Office Refernishers’
Time Actual Demand Weight
24-08-10 64 0.02
24-09-10 75 0.05
23-10-10 143 0.15
21-11-10 172 0.20
29-12-10 185 0.25
30-01-11 184 0.25
21-02-11 77 0.08
02-03-11 ?
So, we get: W.M.A02-03-11= (64*0.02 + 75*0.05 + 143*0.15 + 172*0.20 +
185*0.25 + 184*0.25 + 77*0.08)
= 159.29
Liner Trend Line:
In the liner trend line it calculates the relations of dependent and independent variable.
In our problem, we see that the demand of our product is changing during of different
days or time. In our survey we also observe that there are very less selling of our product
is January and June, very less sell in July and the rest of the month in the year sell is high.
All depend on the students’ availability in the varsity. So, here sell of our product is
dependant and time is independent variable. But the problem of liner trend line is all data
consider as a straight line, so that there may be an ambiguous result.
(x) Time Actual Demand (y) (xy) (x2 )
1 24-08-10 64 64 1
2 24-09-10 75 150 4
3 23-10-10 143 429 9
4 21-11-10 172 688 16
5 29-12-10 185 925 25
6 30-01-11 184 1104 36
7 21-02-11 77 539 49
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Business Plan on ‘Office Refernishers’
__________________________________________________________________
∑x = 28 ∑y = 900 ∑xy = 3899 ∑x2 = 140
_ _
x = ∑x/n = 4 and y = ∑y/n = 128.57
We know,
y = a+bx
_ _ _
b = ∑xy – n x y / ∑x2 – n x2 = 3899 – 7*4*128.57 / 140 – 7*(28)2 = - 0.055
_ _
a = y – bx = 128.57 – (-0.055)*28 = 130.11
y = 130.11 – 0.055x
F(02-02-02) = 130.11 – 0.055 (8)
= 129.67
if x = 0 then, y = 130.11
Forecasting Error:
Actually there are two kinds of error. One is over forecasting and other is under
forecasting. If the forecasted demand is greater than the actual demand then it called over
forecasting. The problems of over forecasting are ware house, maintenance, and
obsolescence. And if the forecasted demand is less than actual demand then it called
under forecasting. The problem of under forecasting is opportunity cost. There are four
different steps of measuring or finding errors of forecasted value. These are:
i) MAD (Mean Absolute Deviation)
ii) BIAS
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Business Plan on ‘Office Refernishers’
iii) MAPD (Mean Absolute Percentage Deviation)
iv) Cumulative Error Let, the forecasted value of our products in different months are:
Time AD FD
24-08-10 64 70
24-09-10 75 70
23-10-10 143 160
21-11-10 172 160
29-12-10 185 160
30-01-11 184 160
21-02-11 77 70
MAD (Mean Absolute Deviation):
n
MAD = ∑ | AD – FD |
i=1
= |64 - 70|+|75-70|+|143-160|+|172-160|+|185-160|+
|184-160|+|77-70| / 7
= 13.71
Bias:
n
Bias = ∑ ( AD – FD )
i=1
= (64–70)+(75-70)+(143-160)+(172-160)+(185-160)+
(184-160)+(77-70) / 7
= 7.14
(It is over forecasting error.)
MAPD (Mean Absolute Percentage Deviation):
n
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Business Plan on ‘Office Refernishers’
MAPD = ∑ | AD – FD | / ∑ AD
i-1
= |64 - 70|+|75-70|+|143-160|+|172-160|+|185-160|+
|184-160|+|77-70| / 900
= 10.66 %
Average percentage error is 10.66
When percentage is low then accuracy is high and vice versa
Cumulative Error:
n
CE = ∑ ( AD – FD )
i=1
= (64–70)+(75-70)+(143-160)+(172-160)+(185-160)+
(184-160)+(77-70)
= 50
Forecasted Result Analysis:
Our Actual Data Is:Month Actual
Demand
August/10 64
September/10 75
October/10 143
November/10 172
December/10 185
January/11 184
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Business Plan on ‘Office Refernishers’
February/11 77
March/06 ?
According to our analysis we get different types of forecasted value for the next August:
Simple Average Method: 128.57
Simple Moving Average Method: 148.66
W.M.A (Weighted Moving Average): 159.29
Exponential Smoothing: 129.18
Liner Trend Line: 129.67
As we compare our previous record’s data to our all forecasted value then we get a higher
distance between our forecasted value and our actual demand. According to forecast error
it’s an over forecasted error.
Our forecast value from all methods is over forecasted. Possibility reason could be
seasonal spike which depends on the dependent variable factor. For example, very less
selling of product is January and June because of seasonal trends and the rest of the
months in the year sell is high. So all selling is depends on time. Now our point of view,
though there is an over forecasted value, we prefer Liner Trend Line method because it
deals with independent and dependent variable.
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Business Plan on ‘Office Refernishers’
LOCATION PLANNING
In this section of “Location Planning”, we tried to show the aspects that are assumed to be important:
1. A description of the site location
2. A map showing the location
3. Information on the zoning of the location
4. A preliminary assessment of environmental risks
5. A description of the shop.
6. A copy of the proposed lease building
7. Provide information on the facility’s operational costs.
We decide to cover the whole Dhaka City Area, that’s why we choose the locations (four locations) in such a manner that we can fulfill out aim. And we have chosen the locations based on factors:
1. Dhanmondi
2. Gulshan
3. Uttra
4. Motijheel
Preliminary Screening:
It means required resources and local conditions for the resources are compared to take decisions. Primary selection will be considered under points:
1) Labor
2) Land Cost
3) Raw Materials
4) Transportations
5) Utility
6) Locality
7) Educational Standard
8) Religion
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Business Plan on ‘Office Refernishers’
Factor Rating
(Office Location Alternatives)
FACTORSFACTOR
MARKING
(10)
LOCATION RATING
(10)
Gulshan Uttara Dhanmandi Motijheel
CUSTOMER
(OFFICE PEOPLE) 9 7 5 6 9
LABOR 7 5 6 5 8
COST 8 5 8 6 5
SUPPLIER 9 7 6 6 8
UTILITIES 5 8 7 6 7
COMMUNITY 6 7 7 7 6
TRANSPOTATION 9 7 5 7 9
SECURITY 8 5 4 6 8
TOTAL 51 48 49 60
The factors rating are giving Motijheel the highest point. So according to the factor rating Motijheel would be the right place for starting the business from (Main Branch).
Zoning, Environmental Risks, Building Description
Indicate the property zoning. Include the current zoning status and if this is suitable for the proposed business type. Contact the Fire Marshall, Health Department, City Planner, or any other agency that could affect the usage of the building or site.
Provide a preliminary assessment of environmental risks. Include any environmental
risks that might affect the value and marketability of location, building, equipment,
and/or any other assets that will be pledged as collateral.
Describe the building(s). Include type of construction, square footage, special features,
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Business Plan on ‘Office Refernishers’
etc. Include a floor plan of the proposed layout
Site Selection in Motijheel
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Business Plan on ‘Office Refernishers’
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Business Plan on ‘Office Refernishers’
IMPORTANT LAWS FOR SMALL BUSINESS
It's virtually impossible to give a complete account of all the laws and loopholes that could affect the formation and operation of an emerging company. There are a number of legal issues, though, of which you should be aware. The most common types of laws that may apply to business fall into several categories.
Business Formation Laws. A variety of state laws govern what steps you need to take to properly form and operate the business entity (partnership, corporation or limited liability company, etc.) you choose to form.
Consumer Protection Laws. Many federal and state laws protect consumers from fraudulent business acts, misleading advertisements and defective products. These laws also mandate various credit rules and disclosures.
Contract Laws. A number of laws may affect the contents of your contracts. But many will purely be the subject of negotiations, so make sure you know the key issues when negotiating and preparing contracts.
Hiring Laws. A fair number of laws regulate hiring. Pay particular attention to laws forbidding discrimination based on sex, race, religion, age, etc.
Environmental Laws and Regulations. Many federal and state laws regulate emissions, asbestos, hazardous wastes, discharge of waste water and other items that affect the environment.
Intellectual Property Laws. Intellectual property laws generally apply to copyright, patents, trademarks and trade secrets. These laws protect your ideas and inventions, but they can also be used against you if you infringe on another company's rights.
License and Permit Laws. Many professions, businesses and occupations require licenses or permits to operate properly.
Employment Laws. A great number of laws deal with how you handle employees, workplace safety, and accommodations for the disabled. Many laws also limit when and how you can terminate employees.
Tax Laws. The myriad of federal, state and local tax laws applicable to small businesses may be the most complicated and vexing legal issues you face.
Zoning Laws. Local zoning ordinances may limit the uses of property you lease or buy. Zoning laws may also regulate parking, waste disposal, signage and the type of business that you conduct on the premises.
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Business Plan on ‘Office Refernishers’
Procedure for Import of Raw and Packing Materials and Share Parts By Industrial Units:
No permission is required for import of free list items. For items in the restricted list,
BOI, BEPZA and BSCIC are responsible for issuance of import entitlement. Import
Registration Certificate ( IRC )will be issued by the concerned authority in favour of
the industrial enterprises within 30 days of receiving applications. Items included in the
banned list cannot be imported unless otherwise specified. Interested parties may
communicate with BOI for details. In case of import of raw and packing materials of the
pharmaceutical industry, the Drugs Administration Directorate under Ministry of Health
& Family Welfare prepares Block Lists on half yearly basis. BOI/BEPZA/BSCIC
provides all other assistance relating to imports in the private sector in their respective
jurisdictions.
In this connection procedure followed by BOI is as under: On receipt of application in the
prescribed form along with copies of
(i)Tax Payer Identification Number (TIN) certificate, (ii) Trade License, (iii) Membership
Certificate of relevant trade association/ chamber, (iv) Certificate from the nominated
bank regarding opening of account, (v) Incorporation certificate, in case of limited
companies, and (vi) Letter of registration with BOI, necessary field inspection is done to
determine annual production capacity and half yearly/ yearly import entitlement of raw
and packing materials. The entrepreneur is then advised to deposit IRC fees ( on the basis
of annual import entitlement ) by Treasury Challan to the Bangladesh Bank/Treasury. On
receipt of the copy of the Treasury Challan, recommendation is referred to the Office of
the Chief Controller of Imports & Exports (CCI&E) for issuance of ad-hoc IRC.
The entrepreneur will then approach nominated bank for opening Letters of Credit for
import. After starting commercial production the entrepreneur may apply to BOI for
regularisation of the ad-hoc import entitlement. On receipt of application for
regularisation of the entitlement, utilization of the ad-hoc import entitlement is verified
through field inspection and if found satisfactory BOI recommends to CCI&E for
regularisation. Import entitlement may, however, be re-fixed on verification of the actual
requirement.
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Business Plan on ‘Office Refernishers’
TYPICAL LEGAL FEE ARRANGEMENTS
Knowing the ins and outs of fee arrangement with lawyer is extremely important. It can
help prevent surprises and save a great deal of aggravation down the road. There are four
basic legal fee categories: retainers, flat fees, hourly billing rates and contingent fees.
The right structure for situation depends on the legal market in area, lawyer's reputation
and experience, and specific matter or case. Be aware that almost everything concerning
fees is subject to negotiation.
Retainers:
A retainer is most often a lump sum payment to an attorney, made in advance of any
work performed on your behalf. Attorneys who use retainers often request a specific
amount before starting work; that amount is generally negotiable. The attorney then
deducts fees and costs from the retainer as they accrue during the course of the
representation. Don't be surprised how quickly you can run through even a substantial
retainer. And if you change lawyers during the course of your representation, you may
not get back any unused portion of the retainer
Flat Fees:
This arrangement is typically used for simple, well-defined matters such as preparing a
will, a simple bankruptcy filing, or an uncontested divorce. The lawyer generally knows
how much time and resources the task will require. In general, flat fee arrangements
benefit the client because fees are capped. Depending on the circumstances, you may be
able to negotiate flat fees for more complicated matters.
Hourly Billing Rates:
An hourly billing rate is a predetermined amount of money that attorneys charge for time
spent on a particular matter. The ultimate amount of your bill depends on how much time
your attorney spends working on your case. Hourly rates vary depending on the legal
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Business Plan on ‘Office Refernishers’
market and your attorney's level of expertise. Expect to pay anywhere from less than
$100 to more than $500 per hour for an extremely experienced or high-profile attorney.
Be aware, though, that a higher hourly rate doesn't always equal higher-quality work. If
you´re unsure, feel free to question the amount of time an attorney spends on a particular
aspect of your case. Even in hourly arrangements, you may want to ask for an estimate of
how much the bill is likely to be.
Contingency Fees:
Contingency fees most often are used in litigation by plaintiffs´ attorneys. They let
potential plaintiffs retain an attorney they otherwise could not afford. The attorney takes a
percentage of any settlement or recovery. Contingency fees are typically one-third of the
recovery, sometimes more if the attorney must try the case. Clients do not pay a
contingency fee unless or until they win money damages.
Keeping Track of Fees:
Many states require that fee agreements be in writing. Make sure you get a written
agreement, and don't use an attorney who is unwilling to provide you with one.
Additionally, if the attorney doesn't already do this, ask to receive regular (for example,
monthly) statements itemizing all charges you're expected to pay. You can also ask your
lawyer to get approval before accruing more than an agreed amount in fees and costs. If
you're an especially good negotiator, you might even be able to arrange a ceiling or limit
on fees.
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Business Plan on ‘Office Refernishers’
Conclusion
At present time, in Bangladesh, there are no perfect office equipment firms, only some
stationary shops, and some furniture shops are meeting the necessity. But are so many
problems in the existing way, because of the following reasons, according to the
information gathered by us from books:
1. Lower Quality
2. Problem in the Delivery System
3. Poor Customer Service
But our proposed model of establishing the business will resolve the problems, and we
tried to propose some ways that are highly technology oriented, and reflecting the latest
effective methods:
1. Remote Warehouse
2. E-commerce / On-line Model
3. Visual Quality Inspection
4. Customer Demand Analysis
5. Multiple Suppliers Arrangement
6. Reasonable Price
7. Knowledgeable and Trained Employees
So, our proposed model would create a new dimention to this retail distribution sector of
“Office Equipments”. It will take almost 4 or 5 months to start or implement this business
plan. But the most important thing is the problem of the “Bureaucracy”. It will be faced
that arranging of the some of the licenses will be delayed by the perspective authority
without having any proper reason. Still we are hopeful about the profit that the business
will income after a particular moment of time when it will well established and will have
a brand name, and will be able to meet the necessity or demand of the offices.
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Business Plan on ‘Office Refernishers’
We know that it’s a age of “Diversification”, if a business is not diversified, it is
possessing the risk of loosing its profit by the changing of the customer patterns and the
dynamic market place. As Quality Office Supply will continue its business by having a
liasion with the corporate clients and other offices, we suggest that it should do the
business of “Data Mining” in near future. This “Data Mining” business is now a
reputated sector for big amount investment in Technology Sector. But needs to arrange
data mining tasks from the “Corporate Clients”, which Quality Office Supply will be able
to well established in future 2 or three years, and within that time Bangladesh will be able
to get the benefit of the “Submarine Cable” , and Network Infrastructure will be well
developed. And one more important thing we should mention, that is, at the very
beginning Quality Office Supply will start its business as a “Partnership Business” and in
future time, for meeting the necessity of the cash or for arranging more capital, it is
suggestted to covert the business in Joint Venture for raising its capital up and cope up
with the demand of the time. It needs a proper long time planning , we have given in this
report, and we are hople about this Feasibility Study Report.
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Business Plan on ‘Office Refernishers’
Bibliography
1. Philip Kotler, Kevin Keller, Abraham Koshy, Mithileshwar Jha Marketing Management A South Asia Perspective 13th Edition
2. Goetsch, David L. and Davis, Stanley B. “Introduction to Total Quality”, USA, Prentice-Hall International, Inc.
3. Nazrul Islam and Muhammad Z Mamun “Entrepreneurship Development, An Operational Approach”.
4. Jiawei Han “Data Mining: Concepts and Techniques”
5. N. Logothetis “Managing for Total Quality”, Prentice-Hall International, Inc.
6. Robert Kritner. “Management”, 7th edition, A.I.T.B.S Publishers & Distributers.
7. Chellis, James “MCSE: Networking Essentials Study Guide”, BPB Publications
Websites
www.epbbd.com
www.office-equipment.biz
www.partex.com
www.otobibd.com
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