BUSINESS PLAN on

SUBMITTED TO:-

S IR HAFIZ GUFRAN ALI

Submitted By:-
1- Zohaib Asghar
2- Umer ejaz
3- Rashid Ali
4- Hafiz Muhammad Iqbal
5- Farman Siddique
Table of Contents
Executive Summary

General Company Description  Mission Statement

 Goals and Objective
 Strength
 Legal Form

Services  Competitive Advantages

 Dues Structure

Marketing Plan  Market Research

 Questionnaire
 Economics
 Barriers
 Feature and Benefits
 Customer
 Competition
 Strategy
 Promotion
 Pricing
 Proposed Business Location
 Sales Forecast

Operational plan  Production Cost

 Quality Control
 Inventory Control
 Location
 Cost
 Personal

Management plan

Financial plan

Forecasted financial statements  Income statements

 Balance sheets
 Cash flow

Break even analysis

2
Appendices

3
 Sec: 1 Executive summary:-
It is a proper time to start a hostel business as there is a growing demand for boys
hostel in Islamabad because the number of students and working people are coming to
Islamabad from different cities of Pakistan are increasing day by day. The Shimmlians
hostel for boys which is located at G-6 near aabpara market in the center of the is started
with the ambition to provide a quality accommodation with facilities like, transportation,
internet, cable, medical, library, food and laundry.

Our customer is students of different institutes and people working in different

organizations. They have some specific needs which are kept in mind by Shimmlians
hostel while working on the business plan. There are different private hostels working in
the vicinity but they fail to cater needs of hostilities. After detailed study of their services
and management we very carefully worked out this plan. We done proper research of our
targeted customers through personal interviews and questionnaire to have complete idea
about the business and its problems so that we are properly equipped once business is
started.

The project of Shimmlians hostel is jointly started by five people namely zohaib
asghar, Rashid Ali, umer Ejaz Farman Siddique Hafiz M Iqbal. They have started the
business with the vision of great future. Their utmost effort is to provide best facilities
rather than of earning huge profit. All members has an experience of 2 years in living in
private hostel. From where we got the idea of starting our own business. The capital is
shared on the basis of 20 % share by each partner. Rashid Ali family has the well
reputation in the Islamabad and their repute helps the business in getting loan from bank.

Total project costs 2 crore approximately.75 % has been shared by partners.25% is

taken by Askari commercial Bank at the interest rate of 16%. The loan is to be repaid in 5
years with the equal installments by strictly following financial plan. The entire financial
plan is made for efficient allocation and use of resources. Management will strictly
follow its marketing strategy to make positive image of hostel in minds of customer.

4
 Sec 2: General Business Description:-
We have decided to start the business of boys hostel in Islamabad. As the demand
of residence for working in other organization is increasing. We are very much sure to
have the success in hostel business. It is partnership business comprising of five partners.
The hostel is located in the area of G-6 near Aabpara. This hostel is unlike other hostel
currently running in Islamabad which only provide the basic facilities but the Shimmlians
hostel is the one which is going to provide all the facilities that any hostelite requires.

Mission statement:_

“To meet and exceed the standard for

quality, comfort and convenience while providing
the students and working boys with low budget
accommodation at unbeatable value.”
 GOALS AND OBJECTIVES:
To provide a safe, secure, well controlled and respectful environment for staff and
boarders.

To encourage positive working relationships between hostel staff and hostel

Management.

To get the satisfaction of most of the students in university from other cities.

Attract more boys by providing more facilities.

Get more profit by increasing our customers.

We are providing the accommodation to both the students & working people. Presently
there are many boys hostels in twin cities but the fact is that the 51% of Pakistan’s
population consist of boys.70% of population is comprises of youth.
In Islamabad there are 17 universities with good number of male students from different
cities of Pakistan. Many universities in Pakistan have facility of hostel for students of
university who are come from other cities. In Islamabad people especially boys facing
accommodation problems due to shortage of boy’s hostels and housing schemes like
international Islamic university. There should be need to setting up more boys’ hostels in
Islamabad which gives relief to students and working boys came here from distant areas
of the country in search of jobs and education.

5
Uniqueness
Most of the hostels in the twin cities are just providing accommodation and the basic
facilities like food, internet and laundry. But demands are now changing so we focus to
provide all those facilities which give us an advantage on our competitors. We will try to
maintain long term and loyal relation with our customer by providing them extra facilities
and better environment according to their needs. As one of the partner in business has
been living in different hostels of Rawalpindi and Islamabad far four years. He is well
aware of the problems and demand of the hostelites.His experience will surely help us in
understanding the needs of hostilities. And keeping in mind these needs we will be able
to cater them in better way.
SERVICES:

 We are providing luxury rooms to boys.

 We are providing them with transport facility.
 There is canteen with stationary & eatables facilities in the building.
 The Wi-Fi net facility to the hostilities.
 Good quality food in the hostel mess.
 The attach washroom with each room.
 The complete educational environment in the hostel.
 First aid facility in any emergency.
 Not more than three boys in one room.
 Separate rooms for students than working boys.
 Very co-operative staff.
 Complete security to the boys.
 UPS facility in case of load shading.
 There is limited library in the building. It includes both course as well as
magazine and general knowledge books.
 Study table and chair for each boy.
 Heating facility in winters.
 TV lounge for recreation.
 Doctor is available in case of any emergency.
 A table tennis and badminton court.
 The hostilities are allowed to use the electric appliances i.e. iron, A.C (Only in
Summers)
 Facility of laundry.
 Daily room cleaning.
 There is a vast lawn in building.

Feature and benefits of our Services for customer.

We are providing following major services to our valued customers:

 Transport facility helps the hostilities to reach their universities.
 Medical facility ensures the better health of hostilities. It helps them in any case
of emergency.

6
  The library comprises of general knowledge books and daily English as well as
Urdu newspaper which helps to keep them up to date.
 Internet facility keeps them in contact with the global world .it also helps the
students in their studies.
 Indoor games help them in recreation in their free times.
Sec 3 Marketing
(a) Market Research and analysis:-
We conduct a survey of different university students living in hostels. A questionnaire is
distributed to them which contain important questions necessary to develop our
marketing strategy. Following was the questionnaire which was distributed in students.
1. Are you satisfied with your existing residence?
a. Yes
b. Not

2. Why you did not avail the university hostel facility?

A. university does not have the hostel
B. lack of accommodation in university hostel
C-lack of facilities in university hostel
D. any other reason

3. Are you provided with the following facilities:-

Sr.n Facilities Options

o

1. Transport YES NO

2. Medical YES NO

3. Laundry YES NO

4. Internet YES NO

5. Indoor games YES NO

6. Quality mess YES NO

7. UPS Facility YES NO

8. Security YES NO

9. Heater/A.C in rooms YES NO

7
4. Rank the facilities given below:
r.no Facility More Less
Preferable Preferable Preferable
1. Transport

2. Medical

3. Laundry

4. Internet

5. Indoor games

6. Quality mess

7. UPS Facility

8. Security

9. Heater/A.C in
rooms
10. Canteen inside
the building
We analyze in our marketing research that students who are living in their hostels
were not fully satisfied by the facilities given by their hostels so we conclude that we
should include these facilities in our business.
Following was the questionnaire which was distributed in students.

Target market
Our target market is student of different institutes working people of different
organizations
Market size:
Our customers are students as well as working boys who come from distant areas of
Pakistan to study or to work in Islamabad. Students who come from other cities generally
have following common characteristics.
 Age between 17-30
 Females
 Students or working in organization
 Belongs to economically sound families
 Require peaceful environment
 Needs secure environment
 Necessity items are easily available

Competition

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 The main competitor is the university hostels. They provide the accommodation at
low dues but we they have less facilities than our hostel.
There are many private also in Islamabad which are the main competitors.
Following are some of the competitor:-

Sr.n Name of hostel Addresses

o
1. Green view Hostel Double Road Rawalpindi

2. La raib hostel Shamas Abad Rawalpindi

3. Al-noor boys hostel I-10/2,Islamabad

4. Friends hostel I-10 Islamabad

5. International Islamic H-10

university Islamabad hostels
6. Working boys hostel G-6/3,Islamabad

(b)Marketing plan

Marketing Strategy:-
As the admissions in universities opened twice a year in the months of July, august and
December, January. As we are going to start the new business, so we shall be doing
heavy marketing of our hostel in these months of the year. Large number of students from
distant areas of country comes to study here. They are always in search of best and
affordable residence.
The marketing strategy is based on the demand of the costumers. With the help of
questionnaire we come to know the more and less preferences of the customers. Most of
the student faces the problem of transport which is being provided by us.
The dues are easily affordable by the costumers in other words; the business is providing
many facilities in very reasonable dues.
The medical facility is also much preferable which is being provided.
The location is also very suitable.

PROMOTION:-

The promotion is done by following means:

 By meeting the students in universities.

 Advertisement on local cable network.
 Distribution of brochures in universities at the time of entry tests.
 Making contract with the universities without their own hostels.

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  The banners outside the universities.
 Distributing the visiting cards in universities & organizations with employee from
other cities.
 Advertisement on local radio.

PRICING:-
The monthly dues are set by keeping in view the cost and suitable profit
margin. As compared to the facilities provided the dues are not much higher.
Some of our competitor has approximately the same dues as of us. Some of them have
low dues than our hostel. Hostel with low dues has less facility so our high due does not
affect our customers.
The dues are obviously always preferred by customer but our facilities make the
customer satisfy while paying the dues.

DUES STRUCTURE:-
Sr.n Particulars Amount
o
2. Security (refundable) 9000
3. Room Charges (per month) 5000
4. Library charges (per month) 100
5. Mess charges (per month) 3000
6. Medical charges (per month) 100
7. Transport charges (as per distance) 50/K.M
8. Heater / A.C/Electric appliances charges 500
9. Other charges 1000

The total charges of a month for an individual will be 9700/- without transport facility. If
anyone is willing in transport facility, he has to pay charges 50/K.M.

COMPETITIVE ADVANTAGE;-
We are providing with facilities that others are no providing with. Following are our
competitive advantages;

 Facility of library
 Facility of UPS.
 Quality mess.
 First aid facility.
 Transport facility

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DUES STRUCTURE:-
Sr.n Particulars Amount
o
2. Security (refundable) 9000
3. Room Charges (per month) 5000
4. Library charges (per month) 100
5. Mess charges (per month) 3000
6. Medical charges (per month) 100
7. Transport charges (as per distance) 50/K.M
8. Heater / A.C/Electric appliances charges 500
9. Other charges 1000

The total charges of a month for an individual will be 9700/- without transport facility. If
anyone is willing in transport facility, he has to pay charges 50/K.M.
6-OPERATIONAL PLAN:-

Following operational plan is being there in hostel:-

PRODUCTION COSTS;-
The daily costs includes mess expenses, newspapers
e.t.c.however there are list of costs at the end of month like utilities bill, rental
expences,employee pays, repairs, transport expenses e.t.c.

Quality control:-
As quality maintenance is very important for any organization to retain
their customers. The quality is maintained very efficiently. The complaints are welcomed
by the hostilities
.
Inventory control:-
There is store made in building in which all the inventories are kept. Its
record is strictly maintained and checked.

LOCATION:-
In our selected buildings we divided its space according to our needs.
We allot rooms to students of same universities on same floor.

 There are total of 60 bed rooms with 140 beds

 20 are double bed rooms and 40 are triple bed rooms
 1 office room
 1 library and medical room
 1 TV lounge and dinning room

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  1 kitchen and store
 1 staff room
 1 warden room
 1 canteen

COST:-
The building is taken on rent. The contract is made for 3 years. The rent of
building is 150000/month.6 month rent is given as Advance. R.S 900000 is given as
security. .
The maintenance of the building will also cost a lot. The repairs in furniture e.t.c.

PERSONAL:-
Number of Employees:-
The number of employees will be 18.

Type of Employee:-
1 warden,2 cook,2.secuirity guard,3 helpers in kischen,2 sweepers,1
accounts & library incharge,4 drivers.

Quality of staff:-
The staff is well trained at their work. The loyalty of staff is our strong
point. Warden has the experience of 10 years; she was working as the warden in
government hostel. The drivers are having their driving license. The cook had the
experience of making traditional food.

7-MANAGEMENT AND ORGANIZATIONAL

PLAN:-
As mentioned above, the business on the basis of Partnership and comprises of five
partners. The partner takes active part in management of the hostel. Frequent visits are
made by partners.
There are 18 employees in the hostel. Each having their duties.

Following table shows the distribution of duties & no of employee for each task:-

Sr.N Type of Job No of

o Employees

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 1. Warden 1

2. Cook 2

3. Security guard 2

4. Helpers in kitchen 3
5. Sweepers 2

6. Accountant & librarian 1

7. Transport drivers 4

8 Operational Manager 1

LEGAL FORM:
We are going to have partnership. We are five partners in this business. It helps us in not
only raising funds but also to get benefit of each others personal skill.

RULES & REGULATIONS;-

For smooth functioning and maintenance of educative and
cordial atmosphere the hostel wants the individuals to following rules and regulation as
below:-
 Guests are not allowed to visit or stay overnight in the room, without prior
permission.
 The members are expected to take good care of the hostel property, incase of
deliberate breakage full cost will be charged.
 Mess shall run as per schedule, however, the hostel management can change the
menu as per required.
 The food will be served in timings, nobody will be entertained after that.
 Severe action will be taken on any misbehave with any any servant or
management.
 Hostel administration is not responsible for any theft, loss or damage of hostel
resident particular.

8-FINANCIAL PLAN:-

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SALES FORECAST:-
The hostel consists of 60 bed rooms. If all the rooms are
accommodated then there would be 140 boys in hostel. Each one is paying the dues. R.S
9000/month which is compulsory and the A.C rooms will be charged 500 extra in the
months of summer. If they are availing the transport facility they have to pay extra
charges. After all calculation the 120 boys would be paying RS 9700/month on average.
The sales forecast for a month will be approximately RS 11, 40,000.

OPENING BALANCE SHEET

ASSETS AMOUNT LIABILITIES AMOUNT

Current asset:- Current liabilities:-

Cash in bank 30,00,000 Accounts payable 15,00,000
Cash in hand 20,00,000 Notes Payable ------
Inventory 2,00,000 Long term liability:-
Prepaid rent 15,00,000 Bank loan 50,00,000
Prepaid insurance 3,52,000
security 900,000 Net worth.-
Other 2,00,000 Shoaib”s equity 65,84,800
Fixed assets:- Farrukh”s equity 65,84,800
Machinery &
equipment 10,00,000
Furniture & fixtures 17,17,600
Transport 88,00,000

Total Assets 19669600 Total Liabilities & Net 19669600

Worth

9-FORECASTED FINANCIAL STATEMENTS-

INCOME STATEMENTS

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Sr.N PARTICULARS AMOUNTS
o
1st YEAR 2nd YEAR 3rdYEAR 4th YEAR

EXPENSES;-

1 Utility bills 367800 401700 410,000 422480

2 Salaries 1716000 1750000 1840000 1975000
3 Maintenance charges 96000 100,000 130000 122000
4 Kitchen expenses 1584000 1610000 1630000 1655000
5 Transport expense 288000 350000 380000 355000
6 Advertising 100000 100000 100000 100000
7 Rent expense 3000000 3300000 3630000 3993000
8 Insurance expense 352000 352000 352000 352000
9 Telephone charges 72000 84000 86000 87000
10 Interest expenses 8,00,000 640000 480000 320,000
11 Depreciation 1151760 2303520 3455280 4607040
12 Loan 10,00,000 10,00,000 1000000 10,00,000
13 Other expenses 50000 90,000 100,000 95000
14 Registration fee 15000 ---- ----- ------
15 Patent 2250 ----- ----- -----
16 Tax paid 597659 621036 765293 782639

REVENUES;-
1 Revenue from transport 840000 950000 1130000 1240000
2 Dues from customers 12630000 14000000 15500000 16704000
3 Revenue from canteen 120000 180000 300000 420000
4 Admission fee 420000 500000 800000 950000

EARNINGS:-
Revenue:- 14010000 15630000 17730000 19314000
( Expenses):- 11192469

Net Profit 2817531 2927744 3371427 3447841

BALANCE SHEETS:-

AMOUNTS

15
Sr.N PARTICULARS 1st YEAR 2ndYEAR 3rdYEAR 4th YEAR
O

ASSETS:-

1 Cash in hand 1651627 18,00,000 30,00,000 19,50,000

2 Cash at bank 4517664 7500555 11527262 81,00,000
3 Goodwill 3,00,000 280,000 360,000 380,000
4 A/R 650,000 10,00,000 12,00,000 700,000
5 Inventory 350,000 8,00,000 11,00,000 373881
6 Fixed asset 11517600 11517600 11517600 11517600
-depreciation (1151760) (2303520) (3455280) (4607040)
7 Other asset 3168037 250,000 248,000 268,000

TOTAL ASSETS 21003168 20844635 25497582 18682441

LIABILITES:-

1 A/P 5,00,000 2,00,000 100,000 560,000

2 Loan payable 40,00,000 30,00,000 20,00,000 10,00,000
3 Security 516037 8,00,000 10,00,000 5,05,000
4 Capital 1,31,69,600 1,31,69,600 1,31,69,600 1,31,69,600
5 Earning 2817531 2927744 3371427 3447841
6 Other liabilities ----- 747291 58,56,555

21003168 20844635 25497582 18682441

T0TAL LIABILITIES

CASH FLOWS……..1ST,2ND,3RD

PARTICULARS AMOUNTS AMOUNT AMOUNTS

16
 S

OPERTING
ACTIVITIES;-
Net income 2817531 2927744 3371427
Depreciation 1151760 2303520 3455280
Change in A/R (650,000) (350,000) (200,000)
Change in inventory (150,000) (450,000) (300,000)
Change in A/P (10,00,000) (300,000) (100,000)

INVESTING
ACTIVITIES;-
Short term investment //////// ///////// //////////
Change in gross fixed asset //////// ///////// /////////

FINANCING
ACTIVITIES;-
Long term debt (10,00,000) (10,00,000) (10,00,000)

Net change in cash 1169291 3131264 5226707

Cash at beginning 50,0000 61,69,291 9300555

Cash at end of year 61,69,291 9300555 14527262

BREAK EVEN ANALYSIS:-

A break-even analysis predicts the sales volume, at a given price, required to
recover total costs. In other words, it’s the sales level that is the dividing line between
operating at a loss and operating at a profit.
Expressed as a formula, break-even is
Break even in unit == Total Fixed Cost .
Selling Price-Variable Cost

18385600 . =3342

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 10000-4500
If in hostel we have 65 boys on average in one month. Then we have 780 boys in a year.

Break Even Point=3342/780

=4.2 year

Critical risk .
1. Bad security situation in Islamabad.
2. Universities all ready providing hostels on less dues.
3. Difficult to arrange capital due to lack of confidence of financial institutions on new
entrepreneur.
4. High interest rates due to economic situation.
5. Increasing costs of utilities.
6. Private hostels already working.
Alternative course of action
Considering all the barriers we very carefully work to overcome these barriers and
arrange our financing after proper research of all the options available to us and get the
loan at very reasonable rate. Proper security arrangements are made and rules and
regulations are implemented. We are giving same facilities as provided by university
hostels at very competitive.
Harvest strategy:
Actually harvest strategy is use for providing the insights that will be facing in
future. It is important to plan the orderly transition of the venture as it grow and develop.
This section is deal with the management and investor or partner exit strategy. It is
helpful if ownership of the business is transfer means that how the company is transfer its
assets. In this case the good entrepreneur continue the business strategy and provide the
fully security to the partners. For this reason harvest strategy is vital for the new business.

In case of hostel, harvest strategy plays an important role for example our hostel
contains five partners and if any partner is leaving the business then all partner will be
ready for any compensation.

We are also focusing on internal satisfaction the remaining partners benefits and provide
the fully assurance of their ownership.

Milestone schedule segment:

Milestone schedule provide partners a timetable for the various activities. The
timetable may be in quarter, in month or on the week basis. It is important however is
coordinate the time frame for the development, sales projects, establishment of

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management activities etc. for example in case of hostel the timetable activities are as
follows;
1) meeting of partners ( at the end of year )

2) Arrangement of supervisor

3) Distribution of profit between partners ( at the last five day of every month)

4) Collection of receipts in time ( first 10 days of every month)

5) Strategy regarding to maintenance of hostel (check the maintenance in every

month)

6) Managing the payments like utilities bill (fulfill the payments in required date)

7) Timetable of mess (3 hours for every mess)

8) Opening and closing of main gate (7am-12pm)

9) Mention the days for laundry services (Wednesday and Saturday)

Proposed Business location:-

Hostel should be located in a area which is accessible both for students and
working boys and also it is located in a area which is near to market. After keeping in
mind our customers needs we consider many options regarding the location. After
analyzing all these options financially and according to convenience for us and for our
customers we finally selected a location near aabpara market.
This location has following advantages.

 It is almost center of the Shimmlians

 Market is very near
 Access of universities transport is easy
 Availability of building at low rent as compared to other areas of Islamabad
 Peaceful environment
 Parking space
 Easily approachable for distributors

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 11-Appendices:-
List of assets used for business:-
 Furniture(beds, dinning table, study tables and chairs, office furniture, other
furniture)
 Television
 Deep freezers
 Crockery
 Air conditioners
 Toyota Hiace
 Water coolers
 UPS

Legal requirement for partnership:-

Partnership deed contains all the essentials rules and regulations about the functioning of
partnership.
2 stamp papers of RS 2000

Procedure & Legal requirement for loan:-

Feasibility report
It is the basic requirement to pledge the property against loan. The banks prefer
residential property in urban areas.
Banks offer loan equals to 70% of the pledged property’s total value.
Partnership deed

Market Research:-
We conduct a survey of different university students living in
hostels. A questionnaire is distributed to them which contain important questions
necessary to develop our marketing strategy.
Following are the information gathered through market research.
1. Are you satisfied with your existing residence?
a. Yes
b. Not

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2. Why you did not avail the university hostel facility?
A. university does not have the hostel
B. lack of accommodation in university hostel
C-lack of facilities in university hostel
D. any other reason

3. Are you provided with the following facilities:-

Sr.n Facilities Options

o

1. Transport YES NO

2. Medical YES NO

3. Laundry YES NO

4. Internet YES NO

5. Indoor games YES NO

6. Quality mess YES NO

7. UPS Facility YES NO

8. Security YES NO

9. Heater/A.C in rooms YES NO

10. Canteen inside the YES NO

building

21
4. Rank the facilities given below:
Sr.n Facility More Less
o Preferable Preferable Preferable
1. Transport

2. Medical

3. Laundry

4. Internet

5. Indoor games

6. Quality mess

7. UPS Facility

8. Security

9. Heater/A.C in
rooms
10. Canteen inside
the building

22