Contents

Executive Summary....................................................................................................................................... 4
1.Introduction ................................................................................................................................................ 5
a. Name and address of the business: ...................................................................................................... 5
b. Name(s) and address(s) of the principal(s): .......................................................................................... 5
c. Nature of the business: ......................................................................................................................... 5
e. Statement of confidentiality of report: ................................................................................................. 6
2. Business Model ......................................................................................................................................... 7
a. Business model canvas.......................................................................................................................... 7
Business Canvas Model Template........................................................................................................... 10
3. Business Environment Analysis ............................................................................................................... 13
PESTEL Analysis ....................................................................................................................................... 13
Political ................................................................................................................................................ 13
Economical .......................................................................................................................................... 14
Social ................................................................................................................................................... 15
Technological ...................................................................................................................................... 15
Environment........................................................................................................................................ 16
Legal .................................................................................................................................................... 16
Porter's Five Forces ................................................................................................................................. 17
1. Supplier Power ................................................................................................................................ 18
2. Buyer Power .................................................................................................................................... 18
3. Competitive Rivalry ......................................................................................................................... 18
4. Threat of Substitution: .................................................................................................................... 19
5. Threat of New Entry ....................................................................................................................... 19
SWOT Analysis......................................................................................................................................... 20
Strengths ............................................................................................................................................. 20
Weakness ............................................................................................................................................ 21
Opportunities ...................................................................................................................................... 21
Threats ................................................................................................................................................ 22
Stakeholder Analysis ............................................................................................................................... 23
Growth and trend of the industry ........................................................................................................... 25

1|Page
 Business Operation ................................................................................................................................. 26
4.Description of the venture ....................................................................................................................... 26
Mission of the Venture ........................................................................................................................... 26
Product .................................................................................................................................................... 27
Location of the business ......................................................................................................................... 27
Equipment and Personnel....................................................................................................................... 27
Size of the business ................................................................................................................................. 28
Background of the Entrepreneurs .......................................................................................................... 29
5.Production and Service Delivery Model................................................................................................... 30
Installation Process ................................................................................................................................. 30
Machinery and Equipment...................................................................................................................... 31
Suppliers.................................................................................................................................................. 32
6.Operational Plan ...................................................................................................................................... 35
Company Operation & Flow of order of Yi Cycle .................................................................................... 35
Business Process Map ............................................................................................................................. 35
7. Marketing Plan ........................................................................................................................................ 35
Product .................................................................................................................................................... 36
Pricing...................................................................................................................................................... 36
Promotion ............................................................................................................................................... 36
Place ........................................................................................................................................................ 36
Packaging ................................................................................................................................................ 37
Positioning .............................................................................................................................................. 37
People ..................................................................................................................................................... 37
8. Organization Plan.................................................................................................................................... 38
Form of Ownership: ................................................................................................................................ 38
Identification of Partners: ....................................................................................................................... 38
Authority of Principals: ........................................................................................................................... 39
Management Team Background:............................................................................................................ 40
Roles and Responsibilities of Members: ................................................................................................. 41
9. Assessment of Risk .................................................................................................................................. 43
a) Evaluate Weaknesses of Business:.................................................................................................. 43
b) New Technologies: .......................................................................................................................... 43

2|Page
 c) Contingency Plans: .......................................................................................................................... 43
10. Financial Plan ........................................................................................................................................ 44
Assumptions............................................................................................................................................ 44
Pro forma income statement showing month by month for the first year 2017. .................................. 45
Pro forma cash flow month by month for the first year 2017................................................................ 46
Income statement for the next three years............................................................................................ 47
Pro Form Cash flow for the next 3 years ................................................................................................ 48
Pro Forma Balance Sheet for the 4th year 2020..................................................................................... 49
Break Even Analysis ................................................................................................................................ 50
Sources and applications of funds .......................................................................................................... 51
11. Appendix ............................................................................................................................................... 52

3|Page
Executive Summary

The report consist of a business plan regarding bicycles. The name of the company will be "Yi
Cycles". It will be a small scale business started by funding from personal saving of the five
entrepreneurs. The business plan explains the venture in details. It fits the venture into the
business canvas model and explains every segment of the venture. It analyzes the venture
through PESTEL analysis, Porter's five forces, SWOT and Stakeholder Analysis. It also
describes the whole venture in details and also describes the operational process. It also includes
the major suppliers and also describes the strengths and weaknesses of the major competitors.
The major portion of the plan describes the marketing planning and strategies to be undertaken
by the venture in order to increase the market share. The marketing strategy is planned around
the 7P's of marketing. The business plan also describes about certain risks associated with the
venture and possible approaches to overcome those risks. The financial plan is described in the
form of pro forma income statement, cash flow statement and balance sheet. The business plan
describes how the venture will carry its operation in the foreseeable future.

4|Page
1.Introduction

a. Name and address of the business: Yi Cycles

b. Name(s) and address(s) of the principal(s):

Address of the store - Shop no. 60, Chamelibagh, Jainul Abedin Sharak, Shantinagar, Dhaka.

Address of the owners -

Name of the owner Address

Sadnam Abeer Showmik Flat 4C, Paribagh WAPDA Officers Quater, Shahbagh, Dhaka
Sabit Rafat Reevu 44, R. K. Mission Road, Motijheel, Dhaka
Abdullah Mashroor Ahmed Road-3, House no-160, Mohammadia Housing Ltd,
Mohammadpur, Dhaka
Rukshinda Akhter Billah 18 East Rayer Bazar Dhaka
Ananna
Syed Tafsir Mohammad 74/1, Shantinagar. Dhaka

c. Nature of the business: The business plan we are suggesting is to assemble and sell bicycles.
We will not manufacture bicycles but we will buy the parts and assemble them in our own store.
The parts will include: a. Frame b. Brakes and Gear Set c. Tires d. Other accessories.
Services will be delivered in Dhaka primarily.. The place we will take will be used for
assembling purposes and showroom purposes, which will be taken on rent. This sector is
typically controlled privately in our country thus very less or no government interventions can be
noticed.

d. Statement of the financing need: Initial funding will be from self, family and friends. Since
this is a very small scale enterprise it will require small amount of capital. Please refer to the
respective sections for in depth details about the financial statements. Below here is the table
indicating all the possible items and activities that need financing and also their current market

5|Page
values:

Activity/Asset Required Budget ( in BDT)

Floor Space Payment Advance 100000
Legal costs for TIN and Trade License 15000
Interior designing and fittings 300000
Equipments 6000

TOTAL 421000

The initial start up cost shown above.

The individual entrepreneur of the business will contribute a capital amounting to TK. 150000
each with a totalcapitalofTK.750000.

e. Statement of confidentiality of report: This report is confidential, containing the plans,

strategies and other confidential information, and is the sole property of the co-owners and is
intended for use only by the persons to whom it is transmitted, and any reproduction or
divulgence of any of its content without prior written consent of the authorized is prohibited.
Recipients also agree on returning this copy of business plan upon request by the company.

6|Page
2. Business Model
a. Business model canvas

Customer segments

We are going to target the mass market as the number of bicycle users are increasing day by
day. Cycle prices would differ based on the type and quality and thus mid to high and middle
level income customers are targeted. Mainly students, newspaper delivery men, peons, postmen,
cycle racers etc. categories of people are our targeted customers.

Value proposition

Customers would value our product because of customization, design, performance and price.
We are going to come up with some unique designs for our bicycles which would be attractive
and new to the usual customers and we are going to set the price at a range affordable for our
customer segment. Also, we are going to ensure great performance of our bicycles as we will not
compromise on quality. The most important among our value proposition will be customization
of our product.

Channels

We are going to sell through our own store directly to our customers and we will give a warranty
card to our customers so that they can enjoy after sale service during this time limit. We will also
have our sales force to market and deliver our products.

Customer relationships

Customers would be maintained through personal interactions and we will acquire customers by
word of mouth in exchange of coupons and redeems and promotional strategies, retain them by
giving discounts to frequent sellers, give benefits such as gift hampers to long term customers,
and upselling by upgrading products after a certain time.

7|Page
Revenue streams

Our main revenue stream is going to come from asset sale. The bicycles and its parts are our
assets and we would gain mark up on the products, and our advertising cost would be higher in
the first year to accommodate the additional marketing activities described in the marketing
strategy.

Key resources

Physical: Office Floor

Financial: Financing with own money
Intellectual: Customer databases, brands, online page
Human: Knowledge industry, creative capacity, sales force

Key activities

Our key activity is assembling bicycles and selling them. We will gather raw materials from
suppliers bring them to our store. We will assemble all the parts and sell them.

Key partnerships

Local bicycle parts shops. Meghna Tyres from whom we will purchase the tyres. The store
owner who will rent us the store for our operational purposes.

8|Page
Cost structure An estimated cost structure for our business for the first month is given below:

Fixed Cost :

The fixed cost will be comprised of the monthly rent to be paid for the floor space which is Tk.
35000. The salary of two staffs with each having a salary of Tk.10000 per month. The electricity
bill may vary but we have allocated Tk. 5000 for every month. Miscellaneous expenses are
covered as Tk. 5000. Advertising costs are estimated to be TK. 6000 monthly. Lubricating oil,
fork oil, brake oil and chain oil would cost Tk. 5000 per month.

Variable Cost:
Variable cost mainly includes the parts necessary for our product.
Rotator - Tk. 500 ( 2 pieces) - Used in wheel for mechanical disk braking
purpose.
Brake Set and Gear set - Tk. 1500 - The whole mechanical disk brake set and gear
set.
Chain and plate - Tk. 1000.
Frame (26 inches) - Tk. 5000 - The main body of the bicycle.
Tyre tube rim and seat - Tk. 1200.
Color - Tk. 100
The variable costs are applied to each bicycle.

Total cost:

Title of the cost Amount ( in BDT)

Total fixed cost 76000
Total variable cost 9300
TOTAL

9|Page
Business Canvas Model Template

Personal
Suppliers in Assembling Customizat Interaction
ion.
Serve
Bangshal Acquisiton
Design specific
Meghna Retention
Performan customer
Tyres Upselling
ce segment.
Store
Price Young
Owner
people aged
15-30.
Newspaper
delivery
men

Floor Space
Direct
Sales Force
Technical selling
Knowledge Own
Own store
money
financing

Mostly comprised of asset sale i.e. sale

Calculate variable cost and
of bicycle.
fixed cost

10 | P a g e
b. Pricing model

We are planning to offer fixed pricing model because it is a start up business and we will decide
upon a price based on the market available competitors. The cost of the product will be
calculated and we will add a markup to the cost.

c. Social goal

Our business model and its goals are aligned with social and societal goals such as giving
healthcare services to employees, encouraging proper working conditions, remaining ethical,
abiding by the laws and refraining from exploiting the environment.

Financial stability

Increase in sales: Financial stability would be difficult to get if the business fails to increase its
sales. Thus to do so, the business will offer quality products, good service and focus on
executing successful marketing plan.
Managing stakeholders properly: Stakeholder engagement boosts the company to run effectively.
The business would definitely take clients suggestions by observing the nature of buying, open
dialogue, feedback- as they are our ultimate consumer. The employees, suppliers and investors
would involve in decision making process together. Therefore the company would have smooth
supply chain and customer relation which tends to have good positive impact on the financial
performance of the company in the long run.
Economic balance: Due to the strike and blockades in Bangladesh, the whole company might
stop to grow and delivery service might seem impossible to take place. Therefore, company
would recruit delivery person locally, as well as local suppliers, from the beginning to keep
future circumstances under control.

11 | P a g e
d. Sustainability

Emphasizing long term perspective of the business: To sustain in the competitive market, long
term perspective is necessary. Short term and long term goals need to be categorized so that
employee-investor-owners can enjoy the net result of their efforts.
Enhancing operational efficiency: Improving operational efficiency leads to competitive
advantage and innovation, so that the business can get customer loyalty by proper time
management and just-in-time order placement.
Product line: Adding new items can make the business gain sustainability.

e. Eco-friendly

The business is an eco-friendly venture as bicycles are eco-friendly vehicles itself. Thus no
harmful gases emitted to the environment. We would have most of our technical works done on
our laptops and save them online, so less use of papers.

f. Ethical

The business would be ethical in the sense that we, the partners would commit to each others
help and give the suppliers the price that they deserve for the parts. Fair policy would be applied
in the recruitment process as we do not believe in nepotism and skills-qualification would be
highly valued.

12 | P a g e
3. Business Environment Analysis

PESTEL Analysis

PESTEL analysis is in effect an audit of an organization's environmental influences with the

purpose of using this information to guide strategic decision-making. It is very important to
make PESTEL analysis to understand, make decisions and plan for future events, organizations
need to understand the wider meso-economic and macro-economic environments in which
they operate. A PESTEL analysis is a useful tool for understanding the big picture of the
business taking into account the environment in which an organization is operating. Specifically
a PESTLE analysis is a useful tool for understanding risks associated with market (the need for a
product or service) growth or decline, and as such the position, potential and direction for an
individual business or organization. The PESTEL analysis with help guide the business into a
future growth stage and show the position at which point the business is and at which point the
business can be.

The PESTEL Analysis of the bicycle business is important to understand as there are certain
factors which may directly influence operational decision making and organization's revenue.

Political

These factors determine the extent to which a government may influence the economy and
bicycle business environment to a great extent. Any changes in the trading policies, rules and
regulations, changes in taxation policy, import and export restriction can affect our business.

In Bangladesh, the political condition is very unstable. The change of government and
government leadership changes the whole policies. None of the parties are agreed with the ruling
party and thus conflicts, strikes and road blockage occurs. As a result, the whole businesses get
affected to a certain extent. To handle the certain shut down of our business, we should develop
some strategies to cope up with the crisis situation.

During these turmoil situations businesses go through a tough situation. The consumer demand
for bicycles would naturally fall. As businesses would make less profit and households

13 | P a g e
purchasing power would fall and its chain effect is likely to also effect the purchasing power of
the potential bicycle consumers.

Economical

The economy of Bangladesh plays an important role in our business. The economical changes
can create a long term effects on our business. The rise in the inflation rate of Bangladeshi
economy would affect the way we are pricing our products. It can affect the purchasing power of
a consumer and change demand/supply models for that economy. Economic factors include
various sides.

The disposable income and unemployment level can affect our product demand. Recently, the
government has increased the pay rate which is a positive side for our business. The buying
power of the people has increased and more people and population is like to come under our
target customer segment.

Business loan is one of the sources of capital in our business. If the interest rate decreases, it is
very beneficial for the business to sustain and operate. On the other hand, high interest rate will
not motivate to take loan and expand the business in a broader version.

After every budget year, the taxation on different products changes. So, changes in taxes can
affect the price of our product and affect the demand of our products. In future if we try to
expand the market from Bangladesh to any other country then the foreign economic trends can
play a vital role. Local economic situation and trends can affect the supply and demand of our
products.

Bangladesh has a GDP of around $ 173 billion (est. 2014) and a GDP growth rate of 6.2% ( est.
2014). These figures are prominent for the growth of our business. Inflation is currently stagnant
at the rate of 6.2%.

14 | P a g e
Social

These factors scrutinize the social environment of the market, and gauge determinants like
cultural trends, demographics, population analytics etc. In Bangladesh, the social environment is
consisting of our local culture, dressing pattern, holidays, religious events and so on.

In Bangladesh, majority of the population is Muslim and Eid is the most important religious
occasion. During Ramadan everyone gets bonus and children specially get bonuses from their
elders more widely known as "salami" and they buy necessary things for themselves . So the
demand of our products during Eid will be higher.

Dhaka is the capital of Bangladesh and is densely populated. The location of our store at
Shantinagar will cover the area for a large target market.

The weather of Bangladesh is very humid and the temperature is also very high. But due to the
heavy traffic conditions recently in the city more and more people are shifting towards cycle.
The young generation specially are the mass users for going to schools and coachings. The
culture of Bangladesh is highly specially in an urban city like Dhaka is highly influenced by
western culture. The use of bicycles is becoming more accepted to everyone.

Technological

In this era of technology, the changes and development in technology is very high. These factors
pertain to innovations in technology that may affect the operations of the industry and the market
favorably or unfavorably. The technological changes are changing the process of our business.

We will have a research and development department. The responsibilities of the department are
to make the bicycles more comfortable and better in terms of quality. They are also responsible
for adopting the technological changes and apply them in our operational system.

Another trend in this era is the use of internet and Social Medias. So, for promotion and
advertisement purpose we are going to use the internet and other Social Medias. We are also
going to sell our product through different online pages specially through Facebook. We will

15 | P a g e
manage our customer relationship through our facebook page. Customers will provide feedback
about our products and will be able to tell us immediately about any problem regarding the
product.

In future expansion process we have a plan to establish our own website.

Environment

Environmental issues are a big factor internationally. But in Bangladesh, these things can be
ignored and bribery can help to tackle these issues. Generally it is observed that every store have
to pay certain money to some local authorities as a part of protection money. This is a common
practice in Bangladesh and we are well aware of these facts. We also have to consider suitable
working environment for our staffs and take care of their health and hygiene factors. All medical
facilities should be provided too.

Legal

To operate in Bangladesh, we need to obtain the law provided by The Constitution of

Bangladesh and Bangladesh Labor Law 2006. These legal factors have both external and internal
sides. There are certain laws that affect the business environment in a certain country while there
are certain policies that companies maintain for themselves. Legal analysis takes into account
both of these angles and then charts out the strategies in light of these legislations. These factors
include employment law. The employment law is of 2006 and the last amendment is on 2013.
We have to maintain the health and safety of the employees according to it. Moreover, we have
to pay salaries and leaves according to it and to solve any employee related issues we have to
follow Bangladesh Labor Law 2006. We would require a trade license and TIN (tax
identification number) to begin our operation.

In the future, we have a plan to go for export and for that we have to get different certificates and
awards and ensure the best quality. We also have to maintain environmental laws and regulations

16 | P a g e
to prevent from any malpractices and getting penalized for that. Though consumer protection is
not established in our country but for further expansion in the foreign market we have to
maintain consumer usage safety and product quality assurance policies.

To operate in Bangladesh, the regulatory bodies will be BGMEA and their processes have to be
maintained by us to sustain and operate in Bangladeshi land.

Porter's Five Forces

Porter's Five Forces is a tool that analyzes the business framework to understand the level of
competition within an industry. Before starting up a new venture it is always important to find
and analyze the existing level of competition in the industry.

There are several ways in which we can explain the business through Porter's Five Forces. A
diagram below explains the model and a few factors that influence the factors.

17 | P a g e
1. Supplier Power

The number of suppliers of our raw materials is high. Bangshal is a place where numerous small
enterprises are engaged in selling the raw materials we need. There is not limited options for
supplier of raw materials indeed there are numerous. The bargaining power of the supplier is
more limited by the fact that most of the suppliers are small scale enterprises and in Bangshal
most of them sell almost the similar kind of product, we carried out a market research and hence
found out that the prices of the raw materials we will need are of similar type and similar price
range. The switching cost from one supplier to another is significantly low. These small
enterprises have limited bargain power because of availability of options and they are not able to
charge us with higher price. Under such circumstances we possess the ability to switch to other
suppliers.

2. Buyer Power

The location of "Yi Cycles" will make the buyers limited in bargaining power. The number of customers in
the area of Shantinagar, Malibagh, Kakrail, Motijheel, Khilgao and others are expected to be high. Since
there will be a high number of customers, their bargaining power will be limited. The size of each order
is expected to be limited to one cycle each customer and thus we will face little threat from the
customer side. Considering the location of our shop it will be difficult and costly for buyers to switch to
the competitors.

3. Competitive Rivalry

Though we are launching a new product, but it is not difficult for the competitors to copy our
product. At the beginning, we have to create a market for our product. In the later stages, the
competitors will enter the market with the same products and forcing to reduce the price as they
are offering. Then, most likely we will have little power in the situation, because suppliers and
buyers will go elsewhere if they don't get a good deal from us. High number of competitors will
shift the market shares and profit margin.

18 | P a g e
On the other hand, if no-one else can do what you do, then you can often have tremendous
strength.

4. Threat of Substitution:

The regular cycles available at Bangshal and other stores can be considered to be a substitute of
our products. As we are introducing a customized option with the regular bicycles, the chances
of people accepting the newness are high. The target market will be mostly composed of the
young generation who are always ready to try new things and in certain reports it is observed that
young people have lack of brand loyalty. Even if they are attached to a certain brand of bicycle
they will be ready to accept our product without any hesitation. It is expected that the unique
features of our products will be appreciated by the target market.

5. Threat of New Entry

The ability of people to enter into our market is very high. Since the time and cost to enter the
industry is very limited and the process is very easy.

In Bangladesh, we dont have strong and durable barriers to entry. So, they can take the
advantage to enter into the market.

Bangladesh has recently seen young entrepreneurs engaging in small scale businesses.

19 | P a g e
SWOT Analysis

The SWOT (strengths, weaknesses, opportunities and threats) provides us the picture about the
abilities and potentials of the venture. It also tells us how the market is going and where it is
going. It also warns about the things that the venture needs to avoid. SWOT Analysis is another
tool through which the business can take operational decisions.

The chart below briefly explains the SWOT analysis dimension:

Strengths Weaknesses
Innovative marketing. Store only limited in one specific location.
Customizing the bicycle as per required by Delivery service not available.
the particular buyer. Limited amount of space for assembling and
Reduced labor costs. showroom activities.
Management with good technical knowledge In ability to expand within few years and
about the product and its needs. gain economies of scale.
Roadside Store.

Opportunities
Bicycle is currently an ongoing trend in the
country.
Due to increase in traffic in Dhaka City most
of the people in our target group are
switching to bicycles.
Purchasing power of individuals increasing as
a result of growing economy.
Threats
Failure to establish brand awareness among
already recognized brands in the same
market.
Rising cost of raw materials.
Increase in labor costs due to inflation.
Growing competition and lower profitability
as new competitors enters as a result of low
entry barrier.

Strengths

Marketing for "Yi Cycles" will be an innovative one as such marketing policies are not rendered
by existing companies making bicycles. The marketing plan is a key function for our new venture
to catch the eye of the consumer. Once the customers know about the product the business will be
a successful one.
The existing companies like Cycle Life, Lion Cycle etc. are not engaged in providing a
customized bicycle required by the buyer. In many cases buyers have a color preference for the
bicycle he or she is looking to purchase and the existing leaders in the market are not able to
provide the customers with this service. This is where "Yi Cycles" will play its most important
role. We will provide our customers with the color they want within two business days of time we

20 | P a g e
 will make that particular colored product available in our store and the customer can pick up the
product. The unique feature of customizing the color of the bicycle will provide an unique
experience for the customers and one of the biggest strengths of our venture.
Since the five of us will look after the business and one will be assembling the product we will
need just two labors to work and this would significantly reduce our labor cost compared to our
competitors.
The entrepreneurs carrying out the business have a good technical knowledge about the product
and customer needs since they also belong from the same demographic groups as the target
market is. They also have a good understanding of the product and its feature. They know where
the product needs to improve and where things can go wrong and be extra careful in those steps.
The shop is located just beside the main road leading to Shantinagar and is at a very prime
location and can easily catch the eye of the people going by the road.

Weakness

There will be only one store of "Yi Cycles" and it will be difficult for people to from places like
Uttara and Gulshan to come here and visit the shop.
Since this is the only the startup and delivering a bicycle to our customers will incur a high
transportation cost so we will avoid the customer delivery service and only engage in direct
selling.
The showroom and assembling point are located together in the same floor space just divided by a
single partition and sometimes it might get difficult during the peak selling hours.
The expansion of the business within the first few years is infeasible and thus the business will be
unable to gain economies of scale.

Opportunities

21 | P a g e
 Bicycle is currently an ongoing trend in Bangladesh. The young generation are engaged in rallies
on several occasions and even bicycle racing. Young people going to school and coachings are
using bicycle.
Dhaka is one of the most crowded cities in Dhaka. The traffic condition of Dhaka is worsening
day by day and more and more people are using bicycles are a solution to this problem.
Bicycles worth such prices are not easily affordable by individuals as a result of the growing
economy. Bangladesh has been declared as lower-middle income country. Purchasing power of
households increasing exposes them with the ability to bear a bicycle with such prices.

Threats

The first threat is composed of the competitors. There are already established brands like Lion
Cycle and Cycle Life in the industry. For a small scale business like "Yi Cycles" it will be
difficult for us to compete with such recognized brands in the market.
The cost of raw materials are rising day by day due to inflationary pressure and these are factors
that are out of the reach of the venture.
The inflation rate would particularly put pressure on the labor costs.
The market of bicycles is very vulnerable to new entrants and because of the low entry to barriers
it is relatively easy for firms to enter this industry.

22 | P a g e
Stakeholder Analysis

Our stakeholders are the person, group or organization that has interest or concern in our
organization. Stakeholders can affect or be affected by our organization's actions. The major
stakeholders of our organization are:

Customers

Customer interaction is vital for this business as the motive has to be diverting loyal customers
from the existing sellers to us. After sales services has to be provided with optimum care. Long
term relationship is important in this business as customers do go word of mouth which is most
effective in bicycle industry. Our sales team will be most hospital in handling customers and
building long term relationships.

Suppliers

Outmost communication has to be maintained with the suppliers to ensure just in time supply of
goods. Negotiations need to be well handled in maintaining a profit incentive for both parties. As
said before big manufacturers may be difficult to negotiate with as they have quite an upper hand
but it can be bypassed by diplomatic solutions.

Employees

We are going to have different only two employees and it will be our goal to build a good
employee relationship with them and make them loyal to our company. Hiring new employees

23 | P a g e
frequently would cause inefficiency as new employees would need more time in understanding
the nature of the business and technical knowledge about the product and the market.

Government

In our organization, we have to pay taxes and vat to the government. The government interval
can also affect the process of our business. So, to maintain a good relationship with the
government bodies such as National Board of Revenue (NBR) is very important.

Prospective customers

To attract the prospective customer is very important. So, our promotional activities and
attractive packaging should be able to create awareness among the prospective customers. To
increase our market share, prospective customers are very important. The major segment of the
customers to attract are young people who need bicycles on regular basis.

Competitors

It is also important for us to pay attention to the activities of our competitors. The strategies of
the competitors will also be taken into account. The pricing policies as well as the customer
relationship management. The major competitors of our venture will be Lion Cycle and Cycle
Life.

Lion Cycle

Lion Cycle have started operation in Bangladesh with an extensive selling motive. They have
shops in prime locations in Dhaka City. They import some bicycles from outside Bangladesh and
they even manufacture their own two brands Core and Nekro.

However Lion Cycle constantly receives complaints from customers about their value delivery
process. There are numerous complains about customer relationship and mistreatment of their
is a common issue. They do not provide customized color for their product.

24 | P a g e
 Cycle Life

Cycle Life is another major operator of bicycle business in Bangladesh. They also have extensive
selling units. They have loyal customers and it is been observed that many well known faces in
the cycling world prefer to buy their products from Cycle Life. This emerges their sales growth
and it is likely to increase. They also import another well known brand known as Upland.

However Cycle Life also suffers from customer relationship management problems. They are
well organized in serving the existing loyal customers but are not bothered about acquiring new
customers. They also do not provide customization services. Their sales is more likely to be
steady rather than growing under such circumstances.

Growth and trend of the industry

The bicycle industry has experienced tremendous growth in the recent years. This expansion can
be traced to two factors. Firstly, bicycles provide a quick and easy way around the unbearable
traffic jam in Dhaka city. Secondly, the rise of some community groups, like BD Cyclists, has
specially contributed to transforming riding a bicycle into a trend.

The needs of the cyclists are met by some major local retailers who are shaping the bicycle
demand of this generation. Lion Cycle Store sells its own brands like Core and Nekro. Cycle Life
is another big player in the market, they are a subsidiary of Meghna Group. These are the two
major companies that have entered the industry in recent years and had a huge impact on the
bicycle market. Most cyclists would like new cycles after at least 12 months, and most would
have a budget between BDT 10,000 and BDT 50,000 at the time of purchase. Many cyclists are
part of cycling groups. The biggest cycling community BD Cyclists has promoted bicycles
impact on creating an unpolluted environment and their contribution toward the riders
maintaining sound health. Currently, their Facebook page has almost 55,000 members which it
gained in less than 5 years, and they actively take part in rallies and weekly rides. Local bicycle
industry shows promising opportunities for entrants to successfully capture market share within
shorter time via effective marketing schemes aimed towards the target population.

25 | P a g e
Business Operation

The business operation of "Yi Cycles" would be better than that of its competitors in terms of
customizing and marketing the product. The major competitors are unable to provide the
customization option for their customers and if we apply such a technique under the current
market situation it will be definitely delivering high value to the customers. Such offerings will
make our venture different than our major competitors.

4.Description of the venture

Mission of the Venture

The mission of "Yi Cycles" is to promote the current trend of young generation and establish
themselves as a promising new business venture providing customers with what they need. The
goal of our company is to establish themselves as the market leader and create a brand value so
that whenever someone wants to buy or thinks of bicycles "Yi Cycles" would be the first thing to
come in their mind. The company would establish itself by setting the model for providing
customized bicycles for customers.

The reason for going in to the business of bicycle is mainly because it is a profitable business
since bicycle has become a trend for most of the young generation of the country. Secondly the
entrepreneurs starting the business have a good technical knowledge about the product and
market. They understand the customer need better as they represent the same demographic
group of the target customer segment. Other reasons include
Informally monitoring potential needs.
Formally arranged for consumers to express their opinions .
Analyze and uncovers way to improve offerings that resulted in a new ways to present
the product or add value to the product.

26 | P a g e
Product

"Yi Cycles" would provide MTB bicycles to the market. These bicycles are compromised of
extensive gear system and mechanical braking system. The differentiation that will be made by
us is that we will customize the color of the bicycles as required by the customers.

Location of the business

The business store will be located in Shantinagar. The building is new and needs minimum
rennovations as previously it was used by Ecstacy one of the top clothing brand in Bangladesh.

The costs of interior designing and fitting will worth a total of Tk. 300000. An advance payment
of Tk. 100000 has to be made to acquire the shop. The location for the shop is perfect for our
venture. The target market which is the young people are heavily scattered around the area. This
location is considered as a central zone to certain school and colleges nearby and since it is just
beside the road it will easily catch the eye of the people.

Equipment and Personnel

For assembling purposes very minimum equipment is required. The main equipment will be
toolkit for bicycles. The toolkit will be purchased since it has a lower cost. The total cost of the
toolkit would be Tk. 6000.

27 | P a g e
The necessary items and their costs included in the toolkit are given below

ITEMS COST in TK.

Spoke catcher 400
Bearing Cotton gauge 300
Chain Checker 200
Valve Maintenance 500
Multi tool anchor 1200
Chain Rivet tool 600
Bike chain cutter 1400
Wrench screwdriver 750
Tyre lever 50
Hex Key 250
Hex tarx key 350

Size of the business

Initially the business would be started on a small scale basis using limited finance from all the
individual entrepreneurs.

The five owners will be taking different parts in the business alongside the five owners there will
be two employees needed for assembling purposes.

28 | P a g e
Background of the Entrepreneurs

1. Sadnam Abeer Showmik

A level and O level from Willes Little Flower School.

Currently enrolled in North South University.

2. Sabit Rafat Reevu

S.S.C from St. Joseph School and H.S.C from Notre Dame College.
Currently enrolled in North South University.

3. Abdullah Mashroor Ahmed

S.S.C from St. Joseph School and H.S.C from Notre Dame College.
Currently enrolled in North South University.

4. Rukshinda Akhter Billah Ananna

A level and O level from Maple Leaf School
Currently enrolled in North South University.

5. Syed Tafsir Mohammad

A level and O level from Willes Little Flower School.
Currently enrolled in North South University

29 | P a g e
5.Production and Service Delivery Model

Installation of Yi cycle is not a hard job but we are taking a big responsibility as it deals with
soul, people often said that two wheels moves a soul. It need to be 100% checked so that it does
not malfunction during ride. At first we collect the raw materials from our suppliers and inspect
those materials. During inspection we basically see weight height and length of the frame and
relates it with the diameter and circumference of tire tube and rim. The measurement is that a
26inch frame height can have a rim of diameter up to 29inch. How we begin? Usually we have
five cycles displayed, when a customer comes and select and confirm a model, we take out that
model from the inventory and install the cycle parts in front of the customer.

Installation Process

A cycle consists of 10 components, which are tires, brakes, pedals, saddle, wheels (rim + tube),
Bars, Chain, Derailleurs (gear + disk) and axles.

1. Chronologically we start with the frame first and check alignment for frame and fork
dropouts. The front and rear wheels fit inside frame axle dropouts. These dropouts should
be aligned so the inside faces are parallel to one another and square to the axis of the hub
axle.Once dropouts are aligned, they tend to not require constant rechecking. When the
hub is clamped in place, the system is quite strong. Even extreme riding and smashing the
wheel is unlikely to bend the dropouts. Procedure for dropout alignment are as follows
a. First, install dished wheel in frame, and pull axle to screws.
b. Check that wheel is centered, adjust screws as necessary
2. After the tires are adjusted with the frame, the second is to adjust the brackets, brackets
are a kind of bearing which holds the pedal, basically which holds the force that you give
in pedaling. Bracket will convert your energy into movement.
a. Install Bracket first and then aligned the disk with bracket. Basically a cycle has four
disk, two are used in brake and the one used in bracket and the other used in back
wheel. The chain moves upon two disks.
b. Install Pedals.
3. Install bars into stem

30 | P a g e
 4. Install head set and install fork into the head tube.
5. Install front wheel and back wheel and adjust bearings.
6. Install rear and front derailleur
7. Install break and shift levers. This the complex part of the bike, because your speed
depends upon gear and to control that speed you need breaks. At this point you need to
install the disk with the brake and shifter with the disk. You need to adjust the break and
tune it with the handle bar.
8. Install sized chain
9. Install saddle on seat post.
10. Install reflectors and lights if customer purchase those item.

And now you are ready to ride in Yi. We test ride bike and readjust as necessary. Before
delivering it to customer we recheck all the screws and bolts and axles.

Machinery and Equipment.

Various kinds of tools are required during installation process. Spoke Catcher, Bearing and
cotter gauge, chain checker, valve maintenance, multi tool actor, chain rivet tool, chain
cutter, wrench, plus, screw driver, tire lever, hex key and pump machine.

Spoke Catcher: It keeps the bladed spokes in position when adjusting your wheel setup for a
more efficient ride.

Bearing and cotter gauge: This handy shop aid is ideal for sizing spokes, ball bearings and
crank cotters.

Chain checker: It will determine whether your chain needs to be replaced. TK 200

Valve maintenance tool. Adjuster used while you pump.

31 | P a g e
 Multi tool actor: You can do multiple functions with a single tool, as it compromised with
many important things.

Chain Rivet Tool: It is a kind of plus which tighten the chain.

Chain Cutter: With the help of it we cut the access chain.

Wrench: it is used to tighten the bearing and screws.

Plus and Screwdriver: Plus is used when you readjust the chain.

Tire Lever: It is used to insert the tube into the tire.

Hex Key:A hex key or Allen key is a tool of hexagonal cross-section used to drive bolts and
screws that have a hexagonal socket in the head.

Pump Machine: it is used to pump the tires.

These are the essential elements that we will use while installing Yi Cycle.

Suppliers

Suppliers are the key sources in any business.There is one thing businesses are prone to
neglect: supplier management. The natural focus of companies is on fostering customer
loyalty but thats not the only relationship you should be nurturing. A good relationship with
your suppliers is just as important. In fact, it is so crucial not having one can make running
your business similar to driving off road in a family car.In order to optimize operation and
reduce risk a god supplier relationship is needed.

As we are operating in small scale thus we have to maintain a good relationship with our
suppliers. We have two suppliers one is MaerDoa Enterprise and the other is Aslam Cycle
Store. Before we proceed the raw materials that we need are listed below. This raw materials
are divided into two sets and each set of raw materials are bought from two different stores.
32 | P a g e
 Maer Doa Enterprise Price (BDT)

Tire 2800 (20pcs)

Tube 120 each

Rim 300 each

Seat 100 each

Aslam Cycle Store Price (BDT)

Rotator 500

Brake Set 1500

Chain 600

Chain Plate 400

Frame* 5100

*Gear Shifter and coloring costs are included with the frame.

Our production is in small scale for which we do not have to think much about inventory but
usually we keep seven sets of complete Yi-Cycle. We will reorder inventory when we have
two sets of cycle left and it takes only one business working day to receive the ordered items.
However it will be quite difficult to run with only two suppliers in the future, in that case we
will contract with other suppliers presented in the market.

33 | P a g e
 Steps Involved in Business Transaction

1. Checking my Inventory level

2. Ordering Inventory at months end
3. Receiving Inventory from suppliers
4. Payment is disbursed after receiving Inventory
5. Customer order Yi-Cycle
6. Installation Process take place
7. Delivery and Payment is received simultaneously

As we are a small scale seller, we usually maintain customer database, and inventory levels using
the Quick Book software. Transactions are recorded and month end inventory balance is checked
with physical inventory.

34 | P a g e
6.Operational Plan

Company Operation & Flow of order of Yi Cycle

Operation process stars from by going to the supplier and placing order on the required
components. We buy the raw materials from our suppliers and keep them as inventory in our
stall. When customer visit our store and wants to purchase a cycle, we bring the components and
install the components in front of the customer. How we install Yi-Cycle is described earlier.
Our main costs are purchasing the inventory and paying employee salaries, rent and utilities.
Other than this we have advertising and oil cost. The selling price of each cycle is BDT 1500.

Business Process Map

Customer
Inventory Installation
receive Yi
Process
Cycle

Going to
Supplier/ Custo
Order mer
Yi Database order

Payment of Payment
RM Received

Financial
Department

7. Marketing Plan

35 | P a g e
Product

We will provide consumers with the opportunity to be able to buy the bicycle of their choice. We
will also assemble the cycles in our store for the customers. The consumers will have complete
freedom to choose the model of the bike we will procure and assemble it for them so that they
can ride the cycle right from our store.

Pricing

We are going to have a flexible pricing method. We will charge customers according to the
brand and model of the cycle as well as the costs associated to import it. The price will also
depends on the availability of the model in the market. As for assembly we will charge a fixed
amount for all our consumers.

Promotion

For promotional purposes we are going to advertise our venue through newspapers and online.
We would also offer a promotional price after starting our venture. We will rely heavily on social
media marketing for our promotion. We would also try the viral marketing approach. We would
give a few cycles to friends and family who are active in social media and give them challenges
to complete with their cycles and share it on their individual social media accounts. We will also
have our own website through which customers can access necessary information

Place

The place of our showroom will be in Shantinagar. The reason we choose Shantinagar is because
there is no cycle stores there so we have to worry less about competition. Also there is a lot of
demand for bicycles in this area as there are quite a number of educational institutions around
and it is a residential area.

36 | P a g e
Packaging

There is nothing much to our product packaging as we will assemble the cycles and the
consumers will take away the end product. But if they want an unassembled cycle they will be
provided with the original box carton in which the parts came in.

But we will decorate our store with relevant pictures and designs to make the environment in
harmony with our products and services.

Positioning

Our target customers are all sort of people so will add price ranges for all sorts of cycles in our
information page. We will also provide the description about our available models and also
describe why the customers should choose us. But we will concentrate more on the youth. Our
position would be a cool yet reliable brand. We will do such as we have several educational
institutions around our store location. Our website will be very active and rich in content like
photographs and pricing and costs.

People

It is very important for our business. We will highly trained mechanics for the assembly of our
products and will have state of the art facilities accessible to them. We will also train employees
on sales techniques and customer relationship management.

37 | P a g e
8. Organization Plan

Form of Ownership:

The form of the ownership of this business has been kept simple since it falls between small
andmid-range businesses. We are planning on going for a limited partnership business where the
equity shareholders will possess the authority to play commanding roles in the day to day
operations of the business while the debt partners will get their due interests with zero control
over the operations. However, there are opportunities for the creditors to become a partner of the
business if an equity approach is taken by the creditor.

Identification of Partners:

Even though the number of partners according to this business plan is fixed but in case there is a
possibility of adding a new partner or multiple new partners the key things that will be brought
under consideration are:

Amount of investment.
Level of commitment towards the business.
Previous positive experience in the same or similar field of business.
Ability to manage (if needed).
Degree of risk aversion.

38 | P a g e
Members of the board of directors of our company have been enlisted below:

1. Name: Sabit Rafat Reevu

Address: La Cassandra, Flat C7-E7, 44, R. K. Mission Road, Motijheel, Dhaka-1203

2. Name: SadnamAbeerShowmik
Address: Flat 4CParibagh WAPDA Officers Quarter Shahbagh Dhaka

3. Name: Rukshinda Akhter BillahAnanna

Address: 118 East Rayer Bazar Dhaka-1209

4. Name: Abdullah Mashroor Ahmed

Address: Road-3, House no-160, Mohammadia Housing Ltd, Mohammadpur, Dhaka-
1207
5. Name: Syed Tafsir Mohammad
Address: 74/1, Shantinagar. Dhaka- 1217

Authority of Principals:

Since our business is primarily a private business, we do not have any issued stocks in stock
exchange, which also means that we currently do not have any voting and non-voting stocks as
we are planning to go for a participative management style which includes all the board
members.

In terms of power and control all the members of the board will be given equal rights to make
crucial management and signing decision. Any sort of official paper work and document must
contain signature of all the members of our board.

Entire business shares will be distributed equally among the shareholders/board members as
initial investment will be split equally when the capital will be raised. It is, however, crucial to
keep in mind that the respective positions held by the board of directors (e.g. CEO, CFO and so
forth) will have their own responsibilities and authorities.

39 | P a g e
Management Team Background:

For this section, refer back to the Identification of Partners section. A brief description about
each and every member of our board has been given below:

I. Name: Sabit Rafat Reevu

Position: Chief Executive Officer (CEO)

Mr. Sabit has experience in managing several small businesses in the past. He also has
expertise in integrating the business components together and execute them efficiently.

II. Name: Sadnam Abeer Showmik

Position: Chief Finance Officer (CFO)

Mr. Sadnam has a substantial experience in the finance sectors of the businesses. As a
finance officer he has managed to get several of his financial plans and research papers
approved by the respective authorities. He has a very strong academic background as
well.

III. Name: Rukshinda Akhter Billah Ananna

Position: Chief Marketing Officer (CMO)

Ms. Rukshinda has a much enriched background in marketing. She has worked with
several marketing firms in the past. She has also proved herself to be an efficient and
creative marketer during Bangladeshs biggest entrepreneurship simulation event, Haat
Bazar.

IV. Name: Abdullah Mashroor Ahmed

Position: Head of Logistics

40 | P a g e
 Mr. Mashroor has previous records in managing a huge number of data and carrying out
researches. He has a reputation for building new contacts and managing. Furthermore, he
has experience in analyzing and finding patterns from the data received in order to make
decision based on the trend.

V. Name: Syed Tafsir Mohammad

Position: Head of Operations

Mr. Syed has previous experience in managing people and evaluating the overall strategy.
He has also proved himself to be a worthy strategic planner.

Roles and Responsibilities of Members:

a. Chief Executive Officer:

Implementing businesss long and short term plans.

Making daily management decisions.
Keeping track of the various departments and their progresses.
Finding out potential problems in the goals of the organization and solving them
strategically.
Making new and profitable strategies for the organization.

b. Chief Financial Officer:

Developing financial and tax strategies.

Managing capital and budgeting processes.
Managing accounting, human resource, taxation and the treasury departments.
Administering negotiation acquisitions.
Administering the issuance of financial data.

41 | P a g e
 Reporting financial budgeting and results to the stockholders.

c. Chief Marketing Officer:

Implementing and overseeing marketing budget.

Developing and implementing risk mitigation strategies.
Forecasting sales.
Reporting sales data to board members and stockholders.
Overseeing the development of new products.
Developing target markets and segmenting.
Building different strategies for different market segments.
d. Head of Logistics:

Building contacts with potential customers and suppliers.

Using IT systems to improve quality and performance of the business.
Maintaining relationship with the suppliers.
Keeping track of the prices offered by the suppliers.
Finding alternative solutions to current supply chain constrains.
Keeping records of inventory and transportation costs.

e. Head of Operations:

Managing budgeting decisions in coordination with the chief executive officer.

Improving the manufacturing and administrative operations and processes.
Developing long-term strategies by coordinating with CEO.
Monitoring data from different departments and finding out the inefficiencies.
Ensuring proper distribution of financing and employee payroll.
Supervising the chief financial officer.

42 | P a g e
9. Assessment of Risk

a) Evaluate Weaknesses of Business:

The model could easily be copied. While Yi Cycle could race to patent some of its
processes, competitors could easily adapt this to the many markets where the service is
currently unavailable.

Market reach: Currently Dhaka city customers have many options to choose from.
There are already established competitors in the market such as, Lions Cycle, Meghna
Cycles etc. Since Yi Cycle is a new business with a lot of competition, it will be difficult
to understand how to manage the business properly and effectively.

b) New Technologies:

If we install new technological things such as,computerized tuner, automated servicing

machine and more we will be incurring a lot of cost.
Another problem is that the employees and staffs who will use it will need proper training
on how to use it. Moreover, it happens many times that in spite of having prior training
on how to operate these electrical devices the employees end up breaking them.

c) Contingency Plans:

A contingency plan regarding this business will be opening up only a bicycle accessories
and servicing shop in the area. There are a lot of cycle users already existing in
Shantinagar who require frequent checkups and maintenance. Either the owners do it
themselves or they travel all the way to Bangshal for these services. We will save them
the hassle as well as do good business.

43 | P a g e
10. Financial Plan

Assumptions

In preparing the financial plan there are certain things that needs to be assumed. It is difficult to
predict the future and thus in preparing the plan we have assumed the sales to go up by 5 units
per month every year. The total expenses will go up by 10% every year.

Since we are a start up venture and starting on a small scale it will be difficult for us to acquire
long term credit purchase from our suppliers. Assumptions will be made that sales will be made
on cash basis and suppliers will be paid on the following month. We will also maintain minimum
amount of inventory as we are limited by space and we cannot afford warehouse facilities. If we
sell out the existing capacity and still receive order in that case we will provide the customer
with 1 day free delivery services from our company. The repairing costs and store maintenance
cost is included in the miscellaneous expenses part. Electricity bill will be paid in the following
month.

44 | P a g e
 Pro forma income statement showing month by month for the first year 2017.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Units 5 5 5 10 10 10 15 15 15 20 20 20
Price 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000

Revenue 75000 75000 75000 150000 150000 150000 225000 225000 225000 300000 300000 300000

COGS 46500 46500 46500 93000 93000 93000 139500 139500 139500 186000 186000 186000
Pucrhase cost per unit 9300 9300 9300 9300 9300 9300 9300 9300 9300 9300 9300 9300
units purchased 7 7 7 12 12 12 17 17 17 20 20 20

Closing inventory 18600 18600 18600 18600 18600 18600 18600 18600 18600 18600 18600 18600

Gross Profit 28500 28500 28500 57000 57000 57000 85500 85500 85500 114000 114000 114000

Expenses
Rent 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000
Salary 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000
Electricity Bill 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Miscellaneous 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Expense
Advertising cost 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
Oil cost 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Total Expenses 76000 76000 76000 76000 76000 76000 76000 76000 76000 76000 76000 76000

Net profit -47500 -47500 -47500 -19000 -19000 -19000 9500 9500 9500 38000 38000 38000

45 | P a g e
Pro forma cash flow month by month for the first year 2017

Receipts from Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
customers
Revenue 75000 75000 75000 150000 150000 150000 225000 225000 225000 300000 300000 300000
Reserve cash at 329000
bank
Payments

Floor space advance 100000

Legal costs 15000
Interior and fittings 300000
Equipment 6000
Suppliers of raw 65100 65100 65100 111600 111600 111600 158100 158100 158100 186000 186000
materials
Rent 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000 35000
Salary 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000
Miscellaneous 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Expenses
Advertising 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
Oil cost 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Electiricity bill 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000

Total out flow 492000 141100 141100 141100 187600 187600 187600 234100 234100 234100 262000 262000

Net cash -88000 -66100 -66100 8900 -37600 -37600 37400 -9100 -9100 65900 38000 38000

46 | P a g e
Income statement for the next three years

Year 2018 Year 2019 Year 2020

Price 15000 15000 15000
Units 240 300 360

Revenue 3600000 4500000 5400000

COGS 2232000 2790000 3348000

Opeing Stock 18600 18600 18600
Purchase 2232000 2790000 3348000
Closing stock 18600 18600 18600

Gross Profit 1368000 1710000 2052000

Expenses
Rent 462000 508200 559020
Advertising 79200 87120 95832
Electricity Bill 66000 72600 79860
Miscellaneous Expense 66000 72600 79860
Oil cost 66000 72600 79860
Salary 132000 145200 159720

Total expense 871200 958320 1054152

Net income 496800 751680 997848

47 | P a g e
Pro Form Cash flow for the next 3 years

Year 2018 Year 2019 Year 2020

Receipts 3600000 4500000 5400000

Payments
Suplliers 2455200 2966700 3524700
Electricity Bill 60500 66550 73205
Rent 462000 508200 559020
Advertisign expense 79200 87120 95832
Miscellnous Expense 66000 72600 79860
Oil Cost 66000 72600 79860
Salary 132000 145200 159720

Total outflow 3320900 3918970 4572197

Net Cash 279100 581030 827803

48 | P a g e
Pro Forma Balance Sheet for the 4th year 2020

Fixed Assets
Interiors and fittings 300000
Equipment 6000

Current Assets
Inventory 18600
Bank 827803
Debtors 100000

Total Assets 2052103

Owner's Equity
Capital 750000
Net Income 997848

Total Liabilites
Creditors 297600
Electricity bill outstanding 6655

Total Equity and Liabilites 2052103

49 | P a g e
Break Even Analysis

The break even analysis would accurately tell us how many units we need to sell in order to
cover our cost.

It is calculated using the formula

Contribution Margin = Selling price - Variable Cost

= 15000 - 9300

= 5700

Break even Point = Fixed Cost / Contribution Margin

2017 2018 2019 2020

Selling Price 15000 15000 15000 15000
Variable cost 9300 9300 9300 9300
Comtribution Margin 5700 5700 5700 5700
Fixed Cost 852000 871200 958320 1054152
Break even point 149.4737 152.8421 168.1263 184.9389

50 | P a g e
Sources and applications of funds

The primary and only source of fund will be from the personal savings and personal borrowings
of entrepreneurs. Each would be contributing a total of TK. 150000 leading to a total investment
of Tk. 750000.

The funds would be initially used to acquire the shop as advance payments are required. The
funds would be used to decorate and buy fittings for the shop. Toolkit as an equipment would be
purchased. Salaries and bills will be paid. Advertising expenses will be covered.

51 | P a g e
11. Appendix

52 | P a g e