Entrepreneurship: Pre-Feasibility Study

Entrepreneurship
Pre-Feasibility Study
Eminent Facilities Management and Maintenance Company, Lahore.
Submitted To:
Miss Afshan
Submitted By:
Yasir Ali
Muhammad Arslan
Awais Akram
Naveed Hanif
Usama Sajid
MBPE14139
MBPE14140
MBPE14141
MBPE14146
MBPE14138
Eminent Facilities Management and Maintenance, Lahore
Table of Contents
Executive Summary ............................................................................................................ 3
Introduction ........................................................................................................................ 4
Product\Service Desirability ............................................................................................... 5
Product\Service Demand .................................................................................................... 8
Location Analysis ............................................................................................................. 10
Quality Management Techniques ...................................................................................... 12
Quality Assurance.......................................................................................................... 13
Demand forecasting for 5 Years........................................................................................ 14
Organization and Staffing ................................................................................................. 15
Organizational Feasibility .............................................................................................. 15
Financial Projections......................................................................................................... 18
Income Statement ............................................................................................................. 22
Balance Sheet ................................................................................................................... 23
Cash Flow Statement ........................................................................................................ 26
Graphical Representation of Profit .................................................................................... 27
Overall Feasibility: Summary and Conclusion .................................................................. 28
Page | 2
Executive Summary
In a developing country like Pakistan where businesses are flourishing and markets
are evolving to meet the needs of the society, different sectors still need to be
addressed and gaps upon identification require urgent attention and potential plan
to bridge the gap. This is the way of creating opportunities and providing solutions
for the harmony of the society. Lahore is metropolitan city with population around
10 million. In this era of technology and development saturation exists in the
market since everybody is trying to take the lead and making huge profits. After
careful considering the day to day needs of people in a city like Lahore we have
observed certain basic needs of population of Lahore which cannot be left aside
rather they offer in return a potential business establishment. Facilities
management and maintenance is one of the business areas which requires
attention in order to fulfill the demands and can be evolved into successful
business. People like electricians, plumber, painters, pipe fitter, refrigeration
experts, welders etc. are always in demand to resolve customer issues in
concerned expertise but unfortunately they are separate entities and cannot be
found at one roof in a single shop. Our service organization, Eminent Facilities
management and maintenance will tend to produce high level of professional
service and standard to ensure companys mission thus it will follow professional
service process because of the high interaction with the customers. Initially posh
areas of Lahore are being targeted in order to capture the desired market as it
offers higher potential. Our service strategy not only allows capturing target
market rather offers future growth and development by covering more wider area
and giving solution to the needs of people nationwide. Apparently, our demand
forecasting allows us to develop sound strategic plan for marketing and service
design. Since our competitor doesnt exist so we have more chances of achieving
the required results and meeting our forecasted goals.
Page | 3
Introduction
Company Name:Eminent Facilities Management and Maintenance, Lahore.
Founders:Yasir Ali
Muhammad Arslan
Awais Akram
Naveed Hanif
Usama Sajid
Summary:Eminent Facilities management and maintenance will be service organization whose inception is purely linked with
the needs of the population of the Lahore. Facilities management organizational setup is rare in Pakistan, therefore
Eminent Facilities Management and Maintenance will bridge the gap in order to address the issues and provide one
stop shop solution to the people of Lahore.
Mission Statement
Provide prompt professional service at doorstep and endeavor to constantly improve standards.
Vision
To become a leader in facilities management by quality work and efficient service.
Operations
Our operations are managed by a well-qualified team of engineers and experienced managers and
the task is executed by robust technical staff that are highly capable and experienced in their areas
of expertise.
The whole team is driven by the goal to provide the finest maintenance service and to live-up to
the standards of Eminent. At Eminent we do not compromise our clients sensitive requirements,
they are our partners who trust us because they know that we deliver a cost effective facility
management services that exceed their expectations.
Page | 4
Product\Service Desirability
Service Design Process:
In working environment of todays business the design of product or service has very important role due to
the globally competitive environment. It is a very important thing in any product or service because new
upcoming products or services contribute significantly to sales revenue. Design of a service has a significant
role regarding the success of service because design of a service makes it successful or cause to failure and
the reason is that it set many conditions as like performance of service, features and efficiency of service.
The main objective of making the design is to make a better service with the addition of good utility and
appeal of sales on an appropriate cost. Services which will be preferable that will acceptable with high
quality and on low cost. Another factor which has core role will be competitive advantage with similar
service and service of the competitor.
Service Blue-Printing:
Our main building office will be situated in Model Town Lahore which has two floors and a basement for
warehouse. Our first line support team and technical staff will be present on first floor while the
administration will have their office on second floor. Customers first point of contact will be via phone with
our customer service representatives and later will be provided with our professional team for required
service, standard and solution. Quality assurance by our engineers will be in place to ensure customer
satisfaction, business development and nationwide progression.
The design strategy of our service will be according to following major factors:-
Cost:
Cost of our service will be offered less in the start because customers will be give attention to our new
services only in that case when we will offer them our service on low price as compared to other similar
services which will available in the market. In future whenever we will want to change the design of our
service at that time we will try to bring minor changes in design and the benefit of minor changes will be
that cost of our services will be not effect much because when we will bring major changes it will be the
cause to increase the cost of our services.
Page | 5
Quality:
Changing in design will be also impact on the quality of the service. When we will change the design of our
service then we will also concentrate on quality of our service because some time it happen that changing in
design cause effect the quality due to the decrease in the quality of service design. Quality will be our
primary and core objective on which we will not compromise because it will help us to retain our customers
for long duration of time.
Customers always demanded the quality services with good design of service so when we will maintain both
things then customers will give good response regarding service.
Industry Attractiveness Assessment Tool

(Used to assess the broad industry, rather than the specific target market, you plan to enter)
Low Potential
Moderate Potential High Potential
1. Number of competitors
None
2. Age of industry
Young
3. Growth rate of industry
Strong growth
4. Average net income firms in the

industry
High
5. Degree of industry concentration
Fragmented
6. Stage of industry life cycle
Emergence
phase
7. Importance of industrys products

and/or services to customers
Must have
8. Extent to which business and

environment trends are moving in favor
High
Page | 6
of the industry
9. Number of exciting new product and
services emerging from the industry
High
10. Long-term prospects
Strong
Page | 7
Product\Service Demand
Upon careful assessment and thorough research we have come up with the service demand in our desired
areas. Apparently, average shops available to address the needs of people in a particular area are 5. Workers
are 3, who usually perform 2 technical tasks on average in a day.
Monthly Orders
Shop Counts
Worker
Task
Daily Orders
26 Working Days
30
780
Time To Market:
Time to market is also change with changing in the process of services we have provided to our customers.
We will adopt that process of services which will be gives us less time to market. It means that we will try to
adopt that production process which will be involved less process. This will help us to send our service in
market on time and deliver to customers. Time to market depends on the process of services if service
process will be complex then it will take much time to market which will be make our bad reputation in the
market also on customers. It depends on resources.so we will adopt such a service which will be faraway
from the customer from one call. One will call our representative will come within that time which will be
decided on call.
Customer Satisfaction:
Customer satisfaction depends on also the design of service. So we will make design of our service different
from other our competitors to satisfy the customers. All facilities and services will be available on just a
phone call away at one stop shop.
Page | 8
Market Timeliness:
Market Timeliness Assessment Tool
Low Potential
1. Buying mood of customers
Customer are in
an aggressive
buying mood
2. Momentum of the market
Rapidly gaining
momentum
3. Need for a new firm in the market with

your offerings or geographic location
High
4. Extent to which business and

environmental trends are moving in favor
of the target market
High
5. Recent or planned entrance of large

firms into the market
No larger firms
entered the
market or are
rumored to be
entering the
market
Page | 9
Location Analysis
Location for business is very important

factor for a business and selection of
location is also important for
establishment
of
the
business.
Regarding the selection of location we
have decided that we will establish our
office and warehouse in Model town
Lahore. The reason to select this
housing society is that the people living
in this society demand all the services
under one roof. As well as price of
purchase the place will be less and
reasonable as compared to other areas.
Another important thing is that cost of
transportation will be less. As well as
load shading of electricity will be less
as compared to other places.
Everybody knows in Pakistan about
Model town. The target of selling and buying can be achieved easily. There is the vicinity of Model town is
populated area. There is facility of Gas, Electricity, Petrol, School and College. Our employees and clients
can spend their leisure time in pleasant environment as there are parks near our office.
Another reason to select this location is that it will be a positive impact on people and attitude of people will
be positive because community of this area knows very well that what society is. So when we will start our
office in this society, attitude and behavior of people of this will not be negative. The location of our
company is very helpful and supportive for our business. The climate is moral excellence the weather of
Model town is providing assistance for our business transactions and also not interposes in our production
matters. We easily find everything for daily routine; also the work place is utile for business. We are capable
to acquire raw materials by roads and airport and it is also easy to commercial exchange for goods and
services. There is no problem of transportation so we with ease go one place to other with the purpose of
business or any other assistance.
Page | 10
Industry Attractiveness Assessment Tool

(Used to assess the broad industry, rather than the specific target market, you plan to enter)
Low Potential
1. Number of competitors in target

market
None
2. Growth rate of firms in the target

market
Rapid growth
3. Average net income for firms in the

target market
High
4. Methods for generating revenue in the

industry
Clear
5. Ability to create barriers to entry for

potential competitors
Can create
6. Degree to which customers feel

satisfied by the current offerings in the
target arket
Unsatisfied
7. Potential to employ low cost guerrilla

and/or buzz marketing techniques to
promote the firms product or services
High
8. Excitement surrounding new

product/service offerings in the target
market
High
Page | 11
Quality Management Techniques

To improve the quality of services there is always need that we apply some techniques regarding
management of quality. This quality will help us to increase the quality of our services and minimize the
failure point of our services.
The quality management techniques that we will use those will be following:
Quality control department will work during all the processes.

Quality of our services will be check and maintain through QC inspectors.
Quality of services of our organization after providing the services to the customers.
Our inspectors call to our customer and take feedback from the customer.
Quality of products will be check after providing the services by QC inspectors. They will check the every
step of production in quality control where quality will be match with standards. We take the feedback from
the customer about the services provided by our employee. So we ask from customer about the behavior of
our employee. We take feedback about the price we charging from customer.
We are also asking from the customer the techniques of our employee to check or repairing of things of the
customer so after the 2 or three days we also ask from the customer.
So the inspectors of quality management fulfill the questionnaire from the information given by the
customer about our services. We were compiled it and see the result then the if the most of customer give
good feedback then well and good and if bad then we check the problem of our services providing then we
improve it for next time.
Page | 12
Quality Assurance
Our Quality Assurance Team will ensure our quality management system. This will include following steps.
1. Firstly our service man (Technician) will get the quality service slip filled by the client and hand it
over to quality assurance team.
2. The quality assurance team will then call the clients and verify the feedback given by them to our
service men.
3. In case of any deficiency in service quality, standard or any technical complaint, corrective steps will
be taken which may include goodwill gesture to cash payback to customers.
Page | 13
Demand forecasting for 5 Years

As our business is new and we are unable to get past data for forecasting so we are unable to use quantities
forecasting technique. Here we are using Qualitative forecasting Technique.
We visited shops and met Electricians, Plumbers, Painters etc. for collection markets demand data.
Qualitative (Judgmental) Techniques:

Now we are going to discuss the judgmental techniques in detail:
Judgmental Techniques is defined as that which uses nature along with other resources to
forecast what may happen. Executive decisions can be made on the bases of these feelings.
Goes beyond simply statistical techniques and encompasses what people believe is going to
happen. It is in the area of instinct, interdepartmental committees, market research and
executive opinion.
Judgmental forecasting technique based on opinion which we get from different people,
management, staff and also are the executive. By judgmental forecasting techniques we dont
need any type of past and future data.
The use of judgmental technique is that we going to start a new business because we have no
past data that we going to make forecasting on the bases of past data. When we have no past
data we get different type of opinion from different persons for our forecasting. In judgmental
forecasting we dont need any type of future data.
In judgmental forecasting techniques we get different opinion from different persons. In this
technique we get we get opinion from sales persons that how they going to sale in a month
and if they sell a maximum sale then this point going to increase the sale of the company by
targeting his maximum sale. Sometimes we get opinion from outsiders because they are also
doing the same work and they will give us a better feedback according to his field.
Beside this we also get opinion from our management and staff. Our executive also guides us
in a better way that how ever do in a proper way.
Page | 14
Organization and Staffing

.Orders Forecasting Per Area:
Monthly Orders
Worker
Task
Daily Orders
26 Working Days
18
54
1404
Initially we will start business in five areas like DHA, Gulberg, Model town, Shadman, Cantonment, Garden
Town etc.
Total Orders
Monthly Orders
6 Areas
234
1404
Organizational Feasibility
Issues Addressed In this Part
1. Management Process
We have hired a very professional and agile team of management to ensure effective business
operation.
2. Resource Sufficiency
Besides management our technical staff is our core strength, therefore we have hired professional
Accredited technicians in order to deliver best service and highest standard. Our office and
warehouse exhibit the attributes to accommodate our team and clients needs.
Page | 15
Low Potential
1. Passion for the business idea
High
2. Relevant industry experience
Extensive
3. Prior entrepreneurial experience
Extensive
4. Depth of professional and social

networks
Strong
5. Creativity among management team

members
High
6. Experience and expertise in cash flow

management
High
7. Experience and expertise in cash flow

management
High
8. Excitement surrounding new

product/service offerings in the target
market
High
Page | 16
Ratings
Resource Sufficiency
Office space
Lab space, manufacturing space, or space to launch a

service business
Contract manufacturers or outsource providers
Key management employees (now and in the future)
Key support personnel (now and in the future)
Key equipment needed to operate the business

(computers, machinery, delivery vehicles)
Ability to obtain intellectual property protection on key

aspects of the business
Support of local and state government if applicable for

business launch
Ability to form favorable business partnerships
Page | 17
Financial Projections
Sales Estimation:
We shall take 54 orders daily out of 180 per day.
Sales
MONTH
Avg. Daily Order
Est. Monthly Order
Est. Rs. 500 per Order
JANUARY
54
1404
702000
FEBRUARY
54
1404
702000
MARCH
54
1404
702000
APRIL
54
1404
702000
MAY
72
1872
936000
JUNE
72
1872
936000
JULY
72
1872
936000
AUGUST
72
1872
936000
SEPTEMBER
72
1872
936000
OCTOBER
54
1404
702000
NOVEMBER
54
1404
702000
DECEMBER
54
1404
702000
Total
9594000
Page | 18
Assets:
Assets
Quantity
Price Per Unit
Office Advance
Total Cost
300000
U.P.S
50000
100000
Personal Computer
18000
108000
Office Tables
6000
36000
Revolving Chairs
5000
35000
Visiting Chairs
12
1000
12000
Ceiling Fans
5000
30000
Split A.C
60000
180000
Cupboards
30000
60000
Printer
15000
30000
Energy Saver (24W)
20
200
4000
Telephone Set
1500
12000
Telephone Exchange
20000
20000
Welding Machine
40000
40000
Tool Box
25000
150000
Fabricating Gun
6000
12000
Misc (10%)
112900
1241900
Page | 19
Payroll:
Positions
No of Persons
Required
Salary Per
Month
Total Per Month

Salary
Total Annual
Salary
Electrical Engineer
35000
35000
420000
Mechanical Engineer
35000
35000
420000
Electrition
20000
120000
1440000
Plumber
20000
120000
1440000
Refregration
20000
120000
1440000
Accountant
20000
20000
240000
Quality Assurance
20000
40000
480000
Customer Relationship
Officer
15000
30000
360000
Security Guard
12000
12000
144000
Office Boy
12000
12000
144000
Cleaner
6000
6000
72000
28
170000
550000
6600000
Total
Legal Expenses:
Name
Amount
Legal and Professional Fees

SECP Expense
75000
Licenses Expense
Insurance Expense
Page | 20
Utility Expenses:
Type
Per Month
Annual
Electricity Expenses
30000
360000
Drinking Water Charges
3000
36000
Repair & Maintenance Office
5000
60000
Entertainment Expenses
6000
72000
PTCL Landline Expenses
10000
120000
Printing & Stationary
4000
48000
Universal Access #
5000
60000
MISC Expense
5000
60000
Portal
25000
Total
68000
841000
Page | 21
Income Statement
Projected Income Statement (Rs.)
Year 1
Year 2
Year 3
Year 4
Year 5
Net Sales
9594000
10553400
11608740
12769614
14046575
842400
926640
1019304
1121234
1233358
Cost of Sales
842400
926640
1019304
1121234
1233358
Gross Profit
8751600
9626760
10589436
11648380
12813218
Office Rent
360000
396000
435600
479160
527076
Marketing Expenses
360000
396000
435600
479160
527076
Legal Expenses
75000
50000
50000
50000
50000
Salaries & Wages
6600000
7260000
7986000
8784600
9663060
Utilities
841000
925100
1017610
1119371
1231308
Subtotal
8236000
9027100
9924810
10912291
11998520
Net Profit
515600
599660
664626
736089
814697
Tax
180460
209881
232619
257631
285144
Net Profit After Tax
335140
389779
432007
478458
529553
Fuel
General Administrative & Selling Expenses
Page | 22
Balance Sheet
Assets
Year 1
Year 2
Year 3
Year 4
Year 5
Rs
Rs
Rs
Rs
Rs
Cash in Hand
500000
550000
605000
665500
732050
Office advance
300000
300000
300000
300000
300000
Current Assets:
Fixed Assets:
U.P.S
Depreciation 10%
Personal Computer
Depreciation 10%
Office Tables
Depreciation 10%
Revolving Chairs
Depreciation 10%
Visiting Chairs
Depreciation 10%
100000
10000
90000
90000
108000
10800
97200
32400
87480
3240
31500
3150
29160
1080
8748
2916
28350
2835
78732
972
65610
7873.2
26244
2624.4
70858.8
2551.5
23619.6
874.8
7085.88
63772.92
2361.96
21257.64
22963.5
22963.5
8748
8748
59049
23619.6
25515
25515
6561
70858.8
26244
9720
9720
7290
65610
78732
28350
10800
10800
72900
29160
31500
12000
1200
9720
8100
72900
87480
32400
35000
3500
81000
97200
36000
3600
9000
81000
2296.35
20667.15
7873.2
7873.2
787.32
7085.88
Page | 23

Ceiling Fans
Depreciation 10%
30000
3000
Split A.C
180000
Depreciation 10%
18000
Cupboards
Depreciation 10%
Printer
Depreciation 10%
Telephone Exchange
Depreciation 10%
Welding Machine
Depreciation 10%
6000
3000
4000
15000
54000
16200
5400
27000
2700
145800
1800
48600
3600
24300
13500
16200
1531700
1080
4860
2430
1620
32400
3240
43740
12150
21870
1508530
972
118098
4374
2187
14580
1458
39366
2916
19683
10935
13122
1497677
874.8
3936.6
35429.4
1968.3
17714.7
1312.2
11809.8
26244
26244
2624.4
23619.6
98415
98415
8748
8748
106288.2
13122
109350
109350
11809.8
19683
29160
29160
17714.7
39366
14580
9720
9720
13122
1968.3
118098
21870
121500
121500
19683
43740
32400
10800
10800
131220
16200
135000
135000
14580
2187
19683
131220
24300
36000
36000
21870
48600
18000
18000
2430
21870
145800
27000
12000
1200
24300
54000
40000
Depreciation 10%
Total
162000
20000
2000
2700
24300
162000
30000
150000
Depreciation 10%
27000
60000
Tool Box
Fabricating Gun
27000
9841.5
88573.5
7873.2
7873.2
1498909
787.32
7085.88
1512118
Page | 24
Liabilities
Year 1
Owner's Equity
Retained Earnings
Total
Year 2
Year 3
Year 4
Year 5
Rs
Rs
Rs
Rs
Rs
1196560
1118751
1065670
1020452
982565
335140
389779
432007
478458
529553
1531700
1508530
1497677
1498909
1512118
Page | 25
Cash Flow Statement
CASH FLOW
Year 1
Profit after Tax

Add: Depriciation
Net cash Inflow
1,846,900
3.87
Cost Of Capital
OUT Flow
Year 2
Year 4
Year 5
335,140
389,779
432,007
478,458
529,553
81,300
73,170
65,853
59,268
53,341
416,440
462,949
497,860
537,725
582,894
(1,430,460)
(967,511)
(469,651)
68,074
650,968
1.00
1.00
1.00
0.87
Cash Flow
(1,846,900)
Inflow For Year
416,440
Inflow For Year
462,949
Inflow For Year
497,860
Inflow For Year
537,725
Inflow For Year
582,894
IRR
Year 3
10.35%
Page | 26
Graphical Representation of Profit

5 Years Graphs
5 Years Analysis
582,894
600,000
462,949
500,000
497,860
537,725
416,440
400,000
300,000
200,000
100,000
-
1
Profit
1
416,440
2
2
462,949
3
3
497,860
4
4
537,725
5
5
582,894
Page | 27
Overall Feasibility: Summary and Conclusion

Conclusion (report finding for each area)
A. Total startup cash needed.
Rs. 1.5 Millions.
B. Financial feasibility
Not Feasible Unsure
Feasible
C. Suggestion for improving financial feasibility
Overall Feasibility of the Business Idea

Based on Each Part
Not feasible
Product/Market Feasibility Unsure
Industry/Market
Feasibility
Organizational Feasibility
Financial Feasibility
Overall Assessment
Suggestion for improving the

Feasibility
______________________
______________________
Feasible
______________________
Not feasible
______________________
Unsure
______________________
Feasible
______________________
Not feasible
______________________
Unsure
______________________
Feasible
______________________
Not feasible
______________________
Unsure
______________________
Feasible
______________________
Not feasible
______________________
Unsure
______________________
Feasible
______________________
Page | 28

Entrepreneurship: Pre-Feasibility Study

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Entrepreneurship

Eminent Facilities Management and Maintenance, Lahore

Eminent Facilities Management and Maintenance, Lahore

Eminent Facilities Management and Maintenance, Lahore

Eminent Facilities Management and Maintenance, Lahore

Service Design Process:

Eminent Facilities Management and Maintenance, Lahore

Industry Attractiveness Assessment Tool

Moderate Potential High Potential

3. Growth rate of industry

4. Average net income firms in the

5. Degree of industry concentration

6. Stage of industry life cycle

7. Importance of industrys products

8. Extent to which business and

Eminent Facilities Management and Maintenance, Lahore

10. Long-term prospects

Eminent Facilities Management and Maintenance, Lahore

Eminent Facilities Management and Maintenance, Lahore

Moderate Potential High Potential

1. Buying mood of customers

2. Momentum of the market

3. Need for a new firm in the market with

4. Extent to which business and

5. Recent or planned entrance of large

Eminent Facilities Management and Maintenance, Lahore

Location for business is very important

Eminent Facilities Management and Maintenance, Lahore

Industry Attractiveness Assessment Tool

Moderate Potential High Potential

1. Number of competitors in target

2. Growth rate of firms in the target

3. Average net income for firms in the

4. Methods for generating revenue in the

5. Ability to create barriers to entry for

6. Degree to which customers feel

7. Potential to employ low cost guerrilla

8. Excitement surrounding new

Eminent Facilities Management and Maintenance, Lahore

Quality Management Techniques

Quality control department will work during all the processes.

Eminent Facilities Management and Maintenance, Lahore

Eminent Facilities Management and Maintenance, Lahore

Demand forecasting for 5 Years

Qualitative (Judgmental) Techniques:

Eminent Facilities Management and Maintenance, Lahore

Organization and Staffing

Eminent Facilities Management and Maintenance, Lahore

Moderate Potential High Potential

1. Passion for the business idea

2. Relevant industry experience

3. Prior entrepreneurial experience

4. Depth of professional and social

5. Creativity among management team

6. Experience and expertise in cash flow

7. Experience and expertise in cash flow

8. Excitement surrounding new

Eminent Facilities Management and Maintenance, Lahore

Lab space, manufacturing space, or space to launch a

Contract manufacturers or outsource providers

Key management employees (now and in the future)

Key support personnel (now and in the future)

Key equipment needed to operate the business