finaled Marketing Report

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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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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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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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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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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Organizational Structure(Quality Office Supply)

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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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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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(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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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.

- -24


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.

- -25


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:

- -26


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%

- -27


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


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

- -29


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.

- -30


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)

- -31


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

- -32


(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

- -33


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

- -34


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

- -35


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

- -36


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

- -37


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

- -38


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

- -39


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

- -40


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.

- -41


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

- -42


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

- -43


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.

- -44


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:

- -45


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:

- -46


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

- -47


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:

- -48


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.

- -49


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):




3. (October/10):




4. (November/10):




- -50


5. (December/10):




6. (January/11):




7. (February/11):




Data from Survey:

TIME

August/10 September/10 October/10 November/10 December/10 January/11 February/11

DEMAND

- -51


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

- -52


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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__________________________________________________________________

∑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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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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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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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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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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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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etc. Include a floor plan of the proposed layout

Site Selection in Motijheel

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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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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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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

- -64


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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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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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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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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http://www.otobibd.com/

http://www.partex.com/

http://www.office-equipment.biz/

http://www.epbbd.com/

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