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UNIVERSITY OF CENTRAL PUNJAB

FALL 2020

ENTREPRENEURSHIP
Final Project
SECTION: B
Submitted to:
Prof. Sidra Nasreem
Submitted by:
Asma Fatima L1f18mcom7133
Rubeyah javed L1f18mcom7002
Abeera saeed L1f18mcom7024
Amna shaban L1f18mcom7010
Kashaf tanveer L1f18mcom7158
Hifza shehzad L1f18mcom7005
Rehman ali L1f18mcom7037
TOPIC:
“Business Plan of Handicrafts”
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BUSINESS PLAN
 Name of venture:

“Crafts World”

 Location:

Section 3, Gullberg, Lahore

 Legal partners:
 Asma Fatima
 Kashaf Tanveer
 Abeera Saeed
 Contact number of team leader:
Our contact number is:
 0333-9427882
 (042)35228879

Executive summary:
A handicraft, sometimes more precisely expressed as artisanal handicraft, is any of a wide
variety of types of work where useful and decorative objects are made completely by hand or
by using only simple tools. The demand of handicraft is rising day by day because of its
attractiveness. People are seeking more toward handicraft items. Secondary data were
collected form company prospectus, internet, books, blogs, and different publications. There
are also some limitations such as privacy or reluctance to disclose confidential data was
another important problem, cost constraints, lack of experiences. The name of the company is
“Craft world” with a slogan “We value our traditions, we design the skills”. The main
objective of it is to improve the handicraft industry. Craft world will be established in 2020 as
a partnership business. We will use bamboo, crane, and wood such type of things as raw
material to produce the products. Thus our operational activity will be environment friendly.

Idea Generation:
Primary Search
 Market Size
One of the most important factors when evaluating a business opportunity is market
size. Before you move forward, you want to be sure the demand is there. You don’t
need to appeal to a massive market, but it does help if you understand the market.
Additionally, knowing how engaged the market is and how likely they are to pay for
what’s being sold can help.
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 Relationships
The business opportunity come with some relationships .When you have more
relationships, the opportunity is likely to run smoother.
 Management Skill sets
What are the skill sets of those involved? If you are evaluating your own business
opportunity, you need to be honest about what you bring to the table, and what you
need to make up for. When looking for a business opportunity to invest in, or expand
into, look at the management.
 Passion and Persistence
Once you’re done evaluating the business opportunity, it’s time to decide whether it’s
a good idea to make a move. Sometimes, the answer is no. Going through the exercise
can help you make these decisions faster — before you waste too much time on
“opportunities” that really aren’t.
Secondary Data
 Business Concept
Recycled handicraft is a small, group business that will be soon launch and have its
debut in market. It will offer services and different kind of products in the community
and hopefully discovers in a next level of marketing their unique products. We’ll be
using recycled materials as a scrap to make a craft combining our ability and skill plus
our creativity to make decorative material
 Rationale
One of the biggest problems that the Pakistan is now facing is the problem in waste
materials. Like what happened in the past few years where the different typhoon came
and due to heavy rainfall some of the cities are heavily affected. The effect of not
realizing where to put such a trash in a right place might be the danger of our lives.
Recycling is the process of separating, collecting and manufacturing or converting
used or waste products into new materials.
 Introduction
The cooperatives encourage the community to segregate the waste and recycle
materials. Through this the cooperative will able to help the conservation of the
environment.
 Promotion
The group is a new business so there are no existing marketing activities in place.
There is no brand awareness in the crafts market. Since the group is in the
community, we will be having a community program where the interested people
gathered and want to learn about crafts. A graphic designer has developed a logo,
business cards and letterheads ready to promote the business
 Place
The group will have a showroom for people to visit. This will allow some
demonstration to work. However, the premise of the business is in the community
where there is no business like ours, so that’s the group advantage
 Legal census
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For promotion and finances .We will be taking the help from ’handicraft association’
by becoming their member

BUSINESS DESCRIPTION
Craft global is a new SMI (Small and Medium Industry) investing in an existing however rich
sector of Pakistan. In Pakistan there are masses of individuals who are looking for different
forms of Handicraft merchandise. But one won't find all the handicraft products from one
place. On the other we are the best handicraft keep having both online and regular Product
selling system. Besides, we're growing jobs for the urban individuals who are presently
unemployed due to now not having any proper guiding principle to reach their merchandise
to the customer.
We know handicraft shops are nothing new but why our company is different from others.
Because we have designed operating our product channels system in such a unique way so
that we can reach and give after sales service of the product within company rules.

FEASIBILITY ANALYSIS
BUSINESS OPERATIONS, PRODUCT & SERVICES
Product analysis
We use Bamboo, Cane, Cloth, Jute, Spin, Clay & many extra to supply our product. We’ve
decided to set our business at Lahore in Gullberg section 3. Here the transportation and all
other sources are available. The surrounding environment is pretty good. We can shipping
our manufactured gadgets easily. We have to keep a few experienced employee in advertising
and marketing aspect to convince the customer.
Services analysis
We are going to release a brand new handicraft company; via our corporation we will
promote almost each district quality handicraft merchandise of Lahore. We would promote
them via the suppliers where achieving to the client without delay impossible.

 Taking Custom design orders for handicrafts items.

 We will give 3 days’ loose product changing opportunity.
 We will take product orders from on line and also going to provide free home
delivery.
 We will provide 1 month replacement guarantee for any sort of factory fault.
 Environment-friendly products.
 Highly professional exceptional manipulate team.
 Modern warehouse facilities, with moisture
 Regular technique of product improvement detector and moisture control system.
 Well geared up workplace with modern communication facilities
 Self-sustaining organization, without any external dependency.
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INDUSTRY ANALYSIS AND MARKET ANALYSIS

Competitive Analysis

For Pakistan that is a brand new impression and hence there may be rarely and industrial
competition. That’s why it holds aggressive advantage. The market is rather new and has a
high boom potential. Since it has no foremost competitor, it's miles simpler for Craft world to
invest within the industry. The reality that we invested in this new industry is in itself
innovative.

Market Analysis

A target market is a group of customers towards which a business has decided to aim its
marketing efforts and ultimately its merchandise.

 Demographically

For our handicrafts product we will need to target customer as their need want & demand.
Our craft world target markets are high class and middle class. Men & women both are
wanted to decorate their home. Those types of customer are front line customer for our
product. Demographics can be segmented into several markets to help us to target our
consumers more accurately.

 Geographically

The geographical location of our products is all over Lahore. Mainly Gullberg because there
are mostly upper class residents and middle class.

 Identify Target Customer:

 Age: Above 12
 Gender: Both male & Female.
 Income level: Middle & higher class people.
 Education level: Minimum knowledge about handicrafts
 Marital or family status: Single, married, Unmarried.
 Occupation: Housewives, corporate worker, Student.

We can identify our target market psychologically. For this segmentation we will see:

 Lifestyle: Fashionable man & women.

 Belief: Know & understand our culture and traditions

ORGANIZATIONAL ANALYSIS
The organizational plan is the part of the business plan that described the ventures form of
Ownership. This business will start out as a general partnership.
 Human Resource
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We’ve a CEO who have a very good skills about Handicrafts. He’s highly educative
and experienced in this area. Under him there are two managers. They are also
experienced. We’ve a General Manager. We also have accountants, marketing
manager and others administrative manager who have lots of experiences. The each
engineer has 10 workers and technicians. There are also supervisors under each
departmental manager.
 Political factors:
Political forces can distinctly impact any business. In Pakistan, there's a lot political
instability which directly influences impacts economy because purchasing strength of
people might be reduced.
 Economic factors
Economic forces of any country can have an effect on the availability, production and
distribution of assets among aggressive users. Now an afternoon in Pakistan inflation
is prevailing and it may affect Craft world to an amazing extent.
 Social factors
Social forces of any country display the values, wishes and lifestyle of that country’s
human beings can affect the corporation. In case of Craft world this thing is
exceedingly in favor of company because human beings have superb tendency to love
handicraft items.
 Technological factor
Technological factor in this project in a way that consumers can order products
online. No rocket science will be adopted by Craft world for production process.
 Environmental Factors
Environmental forces includes changes in weather, global climate, natural calamities
etc. We assume that this category would not significantly affect our business in near
future.

 Legal forces
Legal forces deals with the legal environment in which our firm would be operational.
Legislative change made by the government might impact the organizations behavior.

FINANCIAL ANALYSIS
As we are starting a handicrafts company, we have a huge financial budget plan... At first we
are intending to buy land for setting our business.
For getting a land and making building structure of our handicrafts Company. We’ll buy our
all accessories and machineries. For our plant we will have to pay Machine settlement cost,
Transportation cost, Engineer cost etc. For our product’s promotion we are taking more
budgets in marketing than advertising. Management cost is including with salary, we also
categorize employer’s salary with their skills. Here is a huge expense to buy, transportations,
maintenance etc.

BUSINESS MODEL FOR OUR VENTURE

Type of Business Model:
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We use brick and click business model.

Business mission:
“We value our traditions, we design the skills”
Vision:

 To grow to be the first preference of the customers in the chosen regions

 To build useful and lasting courting with clients
 To continuous development of the goods and services.

Business differentiation:
The design & technology factors play a very crucial element in marketing the
handicrafts and in an effort to compete in the target market it is essential to promote
the organizations involved in export of handicrafts for development of latest and
innovative items. In order to satisfy out this requirement as in line with converting
taste, style of the consumers inside the goal markets, it is proposed to provide
economic assistance for development of exportable products, by way of choosing or
regarding reputed designers from overseas who will help to increase the items/range
of objects as according to requirement of market so that you can enable the exporters
to compete within the market
Target market:
We can identify our target market psychologically. Market is upper class and middle
class both. For this segmentation we will see:
 Lifestyle: Fashionable man & women.
 Belief: Know & understand our culture and traditions
Product/ service scope:
 Word of mouth strategy
 Advertisement through electronic and print media
 Commission to the selling agent
 For our special customers, who purchase bulk quantity, we offer 10% discount
on sale.
Core competencies:
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 Diversification: Handicrafts has a various product line. So, it has a large market &
capturing the potential market.
 Cheap labor: Many people interested to do handicrafts work. So, labor are cheap in
this business.
 Low barriers: Actually there have no major barriers to enter handicrafts market. Only
need a trade license & need capital through our plan.
 Innovative and Passionate Partner: All the partners are very much energetic,
innovative and has a great passion to the work.
 Strong market research before entry in the market: To make entry in a new market,
strong market research will be conducted
 Rising Demand: Demands of handicrafts are rising day by day in developing
countries. This is a positive side for this business.
 Developing Fashion Industry: Now people are interested on fashion. Fashionable
product has huge demand on today’s market.
 Tourism Sector: Our country are developing in tourism sector. Tourist have interest
on this type of products.
 No direct competitor: No direct competitor in Bangladesh Market.
 Availability of supplier: Easy availability of supplier providing innovative products.
Revenue stream:
Repairs as a revenue stream can generate low revenue. However it can link to other
areas of a business model such as personal service and environmental impact. Loved
and up cycled offers a repair service fixing products at no cost to customers as part of
its life time guarantee.
Cost structure:
Licensing intellectual property is generally based on very strong successful content.
However it should be kept in mind as a potential revenue stream.
Financing/ funding:

 Promote capital
 Medium term loans
 sales

Production:
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Our products will be manufactured at the production outlet. There will be a separate
portion behind outlet that will serve as production area. We will produce the products
ourselves. A joint production will be made by all the members for production process.
Creative ideas for innovative products will be explored through brain storming
sessions.
Production process includes:
 Purchase of material and accessories
 Production process
 Packing
Channels of distribution:
All decisions, goals & future plans are taking in our meeting. Then give direction to
our worker where we manufacture our product. Then final goods are shifted to our
showroom & finally sold to our customers. So we will use direct channel of
distribution.

Industry Size:
 Structure:
Although there are many firm working allover in Pakistan. There are 137 with small
medium and large firms working on handicrafts in Lahore.
Our competitors are large in numbers but one of big competitor is Paradise Estate
and Construction Company they are with construction also working on handicrafts
of Pakistan.
 Key success factors:

 Strengths:

The analysis reveals that the handicrafts sector possesses very unique strengths, which are
categorized below:

o Availability of skilled persons,

o Easy and cheap availability of labour and raw materials,
o Demand in both the domestic and foreign markets for the handicrafts of Pakistan.
o Rich craft heritage
o Willingness among women to work.

Five forces analysis

 Bargaining power of customers
o Less bargaining power in terms of supermarket.
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o Fixed price paid by customers.

o Consumers choose different product freely.
 Competitive rivalry within an industry
o High competitors.
o More competitor that offer similar kind of products.
o Competitors compete by reducing prices in order to maximize their sales volume
o Other competitors are compel to follow such kind of strategy
 Threats of entrants
o It is high in the present scenario.
o FDI is very favorable which encourage the supermarket to open their business.
o The government policy is liberal that allow the entry of new super market.
o The access to distribution channel is also very easy.

 Bargaining power of supplier

o It varies depending upon the target segments.
o The unorganized sector has a dominant position.
o There are few players who have a slight edge over others on account of being
established players enjoying brand distinction.
 Threat of substitute product
o They are competitive product.
o It will certainly affect sales volume and ultimately the profit margin.
o They has unorganized retail.

COMPANY DESCRIPTION
 Brief History:
Though the philosophy behind establishing “CRAFTS WORLD” is reviving our
traditional heritage with a modern touch that makes this brand exclusive. This rare
combination of blending tradition is itself innovative and astonishingly amazing. We
are working day by day to further enhancement in quality and design. Our online
gallery provides you a maximum variety of handicraft at one place.
 Mission statement
“We value our traditions, we design the skills”
 Objectives
 Main objective
Main objective of craft world is to glorify the different occasions of our
customers by providing exclusive and quality products.
 Commitment to well being
We believe wellbeing is the cornerstone of personal and professional growth.
Without personal and professional wellbeing our mission cannot be achieved.
 Commitment to goal attainment
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We believe every individual should have economic and personal goals. A joint
effort will be put forward to identify and achieve our long term objectives.
 Commitment to the team objective
We believe in total commitment to the team. The team is a guide for us to
follow in our service to our clients, support of each other, and team growth.
 Commitment to innovation
We believe our strength lies in our passion to implement new ideas and
embrace change. We realize that innovation involves risk of failure, but we
choose to face risk of failure in our pursuit of success rather than fail
passively.
 Commitment to excellence
Our philosophy is to achieve excellence in all that we do. All efforts of our
team are directed towards achievement of maximum quality
 Commitment to Value added service
Value added service means doing and giving more than what is expected. We
believe each of us needs to go beyond the call of duty.
 Commitment to incredible, outstanding, unbelievable customer service
We believe in extending such incredible service to all customers that they feel
real sense of creativity in our establishment.
 Long term objectives
o To expand business activities in other cities
o To satisfy the customers who uses our products and services every time.
o To be socially responsible by utilizing the waste materials for making new
and innovative products.

FINANCIAL ANALYSIS
As we are starting a handicrafts company, we have a huge financial budget plan... At first we
are intending to buy land for setting our business.
For getting a land and making building structure of our handicrafts Company. We’ll buy our
all accessories and machineries from China. For our plant we will have to pay Machine
settlement cost, Transportation cost, Engineer cost etc. For our product’s promotion we are
taking more budgets in marketing than advertising.
Management cost is including with salary; we also categorize employer’s salary with their
skills. Here is a huge expense to buy, transportations, maintenance etc.

General Assumptions Amounts

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Rs.
Receipts:
Sales 50,00,000
Disbursements
Land 15,00,000
Structure 9,70,000
Plant 10,00,000
Setting (Machine & Transportations Cost ) 10,00,000
Raw Materials 13,00,000
Advertising 15,00,000
Marketing 15,00,000
Management 40,00,000

Pro-forma for income statement

Particulars Amount

Sales 16,05,00,000
Less: cost of goods sold 2,00,00,000

Gross profit 14,05,00,000

Gross profit % 87.54%

Less: operating cash

Sales & marketing exp.
20,00,000
Administrative exp. 50,00,000
Depreciation exp. 1,45,00,000
Maintenance exp. 5,00,000
Utilities exp. 1,00,000

Total operating cost 2,21,00,000

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Profit before interest and tax 11,84,00,000

Less: interest expense 35,00,000

Profit before tax 8,34,00,000

Less: tax 0

Net profit after tax 8,34,00,000

Net profit% 51.96%

(Note: All those costs and revenues are rough estimates. Actual may vary)

Pro-forma Cash Flow Statement

Particulars Amount
Cash Received:
Cash Received from Operations:
Cash Sales 6,00,00,000
Cash from receivables 10,00,00,000
Subtotal Cash from Operations 16,00,00,000
Additional Cash Received:
New long term liability 70,00,00,000
New investment received 80,00,00,000
Subtotal Additional Cash received 150,00,00,000
Total cash received 1,66,00,00,000
Cash disbursement:
Cash spending for operations:
Cash spending 76,00,000
Payment of accounts payable 20,000,000
Subtotal cash spending for operations 27,600,000
Additional cash spent:
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Purchase of land 600,000,000

Purchase of building 200,000,000
Purchase of machinery 300,000,000
Purchase of other fixed assets 100,000,000
Interest payment 35,00,000

Subtotal additional cash spent 1,235,000,000

Total cash spent 1,262,600,000

Net cash flow 397,400,000

(Note: All those costs and revenues are rough estimates. Actual may vary)

Pro-forma for Balance Sheet

Particulars Amount

Assets:

Current Assets:
Cash 7,400,000
Bank 390,000,000
Account Receivables 500,000

Total Current Assets 397,900,000

Fixed Assets (land, building, machinery & Other fixed Assets) 1,200,000,000
Less : Accumulated depreciation 14,500,000

Total Fixed Assets 1,185,500,000

Total Assets 1,583,400,000

Liabilities & Capital:

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Current Liabilities 0

Long term liabilities 700,000,000

Total liabilities 700,000,000

Paid-up Capital 800,000,000

Retained Earnings 83,400,000

Total Capital 883,400,000

Total Liabilities & Capital 1,583,400,000

(Note: All those costs and revenues are rough estimates. Actual may vary)

Pro-forma for sources &application of funds

Particulars Amount Amount
Sources of funds:
Long term loan 700,000,000
Personal funds 800,000,000
Net income from operations 83,400,000
Add: depreciation 14,500,000
Total funds provided 1,597,900,000

Application of funds
Purchase of land 600,000,000
Purchase of building 200,000,000
Purchase of machinery 300,000,000
Purchase of other fixed assets 100,000,000
Interest payment 35,000,000

Total funds expended 1,235,000,000

Net increase in working capital 362,900,000

1,597,900,000

(Note: All those costs and revenues are rough estimates. Actual may vary)
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