New Business Idea

ENTREPRENURSHIP

Classic Jersey and Sweaters(Business Plan)

Submitted By:

Muhammad Umair Muneeb 2131075

Junaid Siddique 2131098

Hafiz Ebad-ul-Haq 2131102

M.Imran 2131093

Submitted To:

Sir Basit Afzal

NATIONAL COLLEGE OF BUSINESS ADMINISTRATION & ECONOMICS

Table of Contents

Executive Summary ………………………………………………………………3

Mission……………………………………………………………………………4

Business Introduction………………………………………………………….…4

Product……………………………………………………………………………4

Target market ……………………………………………………………………5

Distributional Channel……………………………………………………………5

Location……………………………………………………………………………6

Location of production……………………………………………………………7

Management …………………………………………………………………..…7

Market trends…………………………………………………………………..…7

Personnel…………………………………………………………………………8

Record Keeping………………………………………………………….………8

Insurance…………………………………………………………………………9

Marketing……………………………………………………………………...…9

Competition……………………………………………………………..………10

Advertisement…………………………………………………………..………12

Pricing………………………………………………………………………..…12

Product Design…………………………………………………………………13

Timing of entry…………………………………………………………………13

Industry trends…………………………………………………………….……13

SWOT analysis…………………………………………………………………14

Financial Documents……………………………………………………………16

Cash flow statement ……………………………………………………………17

Income statement……………………………………………….………………18

Balance Sheet………………………………………………………………..…20

Executive Summary:

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‘Classic Sweater’ is a jersey and sweater brand which is established by:

Muhammad Umair Muneeb

Junaid Siddique

Hafiz Ebad-ul-Haq

Muhammad Imran

The basic objective of this brand is to provide customization services in jersey and sweaters

in Pakistan. It is first of its kind in Pakistan. Brand will be launched in Lahore market at the

end of September 2015. The purpose of the brand is to provide people with the service to

design their own jersey and sweaters and get them ready to wear in different colors and sizes.

The brand will be first launched in Pakistan in September of this year and then after some

years it be launched in other cities of Punjab. The brand initially has 10lac as capitals.

Initially the outlet would be open in Karim Block near Multan road and Wahdat road Lahore.

Their people would be given with different design samples and albums to choose from and

order them in different style and different designs. Classic Sweaters will not only provide

customization service but also will manufacture fashionable and trendy designs in sweaters

for display and sale at retail outlet at Karim Block.

Initially, Classic sweaters will target the youth of the society because still no company is

targeting the youth with sweaters and jersey whether it is read-made or customized due to

which youngster prefer to wear hoodies and jackets. And also this segment spends more

money on fancy items like clothes, shoes, glasses and watches. We will market the brand

with the help of social media and print ads. We will cover different university community

pages and other youngster’s groups on Facebook from where the brand will market itself and

try to cover the untouched market.

The projected sale of first year is 600 pieces in whole season including customized and

readymade sweaters which will overall earn about 17 lac, from which half would be the raw

material expense and remaining half would be the gross profit.

Mission statement:

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To provide people with the service to customize jersey and sweaters of their favorite design

and color.

Business Introduction:

From last 2 years I Muhammad Umair Muneeb am in hosiery business with my father and my

brother. We provide knitting services to different local and international companies like

Shahkam industries, I.T garments and White Gold garments. We receive string from these

customers and then convert that into fabric in any design of their desire which they give us in

form of any physical design or any picture. Now I have decided to use my business

experience and resources in any new business form. So I have decided to start a

customization service business with my friends. In this, we would provide customization

service in high quality woolen jersey and sweaters. Beside customization, we would prepare

jersey and sweaters of trendy and fashionable designs for sale and display at showroom.

Product:

We will provide customization services in high quality woolen jersey and sweaters to male of

different ages. Besides we will also provide readymade jersey and sweaters. Our products

will be of high quality, trendy and highly fashionable.

With our product we will provide different support and after sale services like warranty,

alteration services, product follow-up, and refund policy.

We will get raw material for jersey and sweaters from local dealer of Lahore in Shah Alam

market. Raw materials of different kinds are available in that market. We can get high quality

woolen strings of different shades from there. We have our links with some of the dealer in

that market from which we can get our raw material on credit basis and will pay them on the

end of winters. If ever happens that we can’t get raw material from one supplier then we can

get material from other supplier with whom we have source. Average price of woolen string

in kg is Rs.500 and one bag of woolen of single shade cost Rs.15000. At the start of our

business we will order 30 bags of 10 shades. From which 20 bags will be used for readymade

jersey and sweaters and remaining will be available form customization service.

Target market:

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Our major target market will be youth of middle and upper class who spends time and

resources on fashionable and trendy items. Besides this, we will also target males of different

occupational background and of age from 17 to 45. Our target market is basically youth

because it is the age when people are more style and brand conscious and search for the item

what they want from different places. They now prefer online buying of shoes and clothes.

On Eid and other festivals, they get services of boutiques and designers to customize their

dressings. Similarly they also want trendy and fashionable outfits in winter. No other retailers

and brands are giving customized services now days in jersey and sweater so we think that it

will be a good idea to enter in it and make money through satisfying the customers. Secondly

we would also target the customers who don’t want to wait or spend time on waiting for the

customized jersey and sweater to come. People often don’t have time to first go and give

order for the sweater and then make a second round to the shop and collect the item. So we

would also provide readymade jersey and sweater for these kinds of people. Secondly, to

cope with the problem of visiting outlet or showroom again and again, we would give free

home delivery service.

Distributional Channel:

We will sell our product through different sources like social media and through own sale

points. Firstly we would open a showroom at crowded and elite class area of Lahore city like

fortress or Model town market or DHA or Kreme Block. Most probably it would be Kreme

block because it is a crowded area of Lahore and has easy access from different areas. We

will open a showroom there on the front lane where people would come to buy our

readymade jersey and sweater, and also to customize it.

Secondly we would use social media for this purpose as social media has gain a reputation as

big trade market for almost every item in the world. Youngster prefers to surf on internet and

buy and sell product through internet using their mobiles and laptops. So we would make a

Facebook page and a website for our brand where people can see any of our products in detail

and get the latest prices. People would also be able to place orders for customization of jersey

and sweaters from these sites. They can design their own sample and place that design for

order in different shades.

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Location:

Location is important in our business as we are targeting the people through services then our

location should be something that is easily accessible and reachable. In any product business,

one can place an order by simply ordering through online pages but in services people first

prefer to visit the place to see whether they have experience in what they are doing? Is it safe

for me? Etc. So we have finalized Kreme Block as our final place for our location of the

showroom. Kreme block is a crowded place and youngsters like to visit that place because of

the availability of variety of shoes and clothes and also for different restaurants there. Almost

every brand of clothing and shoes have store there and also it is an affordable place for rent.

Location analysis for Kreme Block:

Kreme Block Market

25*60 ft.

It is an old market and has many brands outlets there so people prefer to come there

and it’s a crowded place.

It is a preferable place because it has access from many different areas like Model

town, Johar Town, Garden Town, Wahdat Road, Multan road, Multan road, Iqbal

town etc.

It has its own parking area so people don’t have to worry about rides.

It is busy area of Pakistan so often police mobile vehicles round the areas and at night

the market have their own private guards to protect the shops from thieves.

Location of production:

Our unit of production is at Band road Lahore. It is opposite to new Khan Adda near Gulshan

Ravi road. We have four machines there which are recently imported from Japan; these

machines cost around 40 lac. Through this production area we are giving knitting services to

local and international garments brands. So we would us these machines in our business. We

would use them for readymade jersey and sweaters and also for customization services.

Management:

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In our business, we will be 4 managing partners who would look the daily activities and

operations. We will divide our work into parts like production, handling of cash, dealing with

customers and managing customers through social media.

I have chosen my friends as my partners for business because we are together for about 3

years and I trust them. They are loyal and honest to their works and also they have knowledge

of the business we are going to start. They are innovative and input unique ideas in any

matter so I think it would be good for our business because this kind of line of business need

continuous innovation. Also they are ready to start contribute financially in our business. So I

would prefer to work with them as a partner in business rather to get finance from

government or someone else because then it would be whole my responsibility for

production, handling cash, dealing customers, managing customers through social media and

most importantly customization service which would need great attention.

Personnel:

All four partners have basic educational knowledge of the business studies and all have done

some work in practical field, so all four partners will divide the work like written above.

Muhammad Umair Muneeb would be handling the production because I have experience of

doing this and currently doing it with my father. Muhammad Umair Muneeb knows where to

get raw material and where to knit them and where to stitch them, I have sources and

connections where I can get all done. Secondly Mr. Junaid Dar would be dealing with our

online pages and website because he has experience in this particular field. He himself used

to order for the stuff online before so he knows how to cope with the customers. Mr. Ebad ul

Haq would be dealing with customers at shop because he is good at customers dealing and

Mr. Imran will be dealing with handling of cash and inventory system. All these work have

divided keeping in mind the expertise and experience of each partner.

Record Keeping:

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We would perform record keeping function on PC system. We would buy record keeping

software for it from any software house or get it developed from our friend who is specialized

in software. We would handle inventory records and sales record in that system. Besides we

will also be printing records weekly for saving record in physical files so if anything happen

and we lose our record from system we will then use these files to rerecord all the data in

system plus we will we be saving all the data on Google drive by connecting record keeping

software to our Google account so if we ever lose our data we can recover it in seconds. Mr.

Imran who is one of our partners will be performing record keeping function because he is

good in accounting and also he is qualified person for this place.

Insurance:

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We will be not be needing any insurance because our most of inventory will be at

manufacturing point and only for display and sale material will be at shop so we will not be

using insurance services.

Marketing:

Marketing will be very important for our business because it is first of its kind in Hosiery and

no one is really in business of customization of jersey and sweaters. So we have to think

critically for the marketing of our product and business. We would invest in billboard

marketing in different shopping areas like Kreme Block, model town market, DHA and

panorama.

But most importantly, we would be marketing on social media through Facebook pages

because our target market is youth and they don’t watch TV much. Youngsters surf on

Facebook and open different links form these pages. It is very common and important source

of advertising now. We would use help of our friends in different universities and ask them to

promote our page on their universities community pages and official pages so more people

would like our pages and receive our regular posts. Through these pages we will be providing

different information about promotions and campaigns to youngsters.

Competition:

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Currently there are only few national level brands in jersey and sweaters in Lahore. Mostly

there are local retailers who sell hosiery items in Anarkali, Panorama and Kreme block under

local brand names. Quality of local dealers is very poor and one can’t use one jersey for than

one season because its color gets fade, it gets rough and also it lose its original look. But

national level brands are doing good in this line, their item quality is really good and lasts for

more than 3 years.

Competitors profile sheet:

No of major competitors:

3

Name of competitors:

Cambridge, Oxford and Bonanza

Products offered by them:

Jersey jackets and sweaters

Pricing structures:

They normally cost minimum Rs.3500 per piece off jersey and sweater. And jackets cost

minimum Rs.9000 on normal price.

Methods of distribution:

They sell their products through sale points and do not manage their customers through

online or delivery services. They have number of retail stores at different markets, malls and

famous roads. For example, Fortress, Pace, Model Town, DHA, Kreme Block etc.

Image:

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They all have a developed image in consumers mind for their quality and worth but they

mostly focus on middle age people or business class people. No one of them are really

focusing on youngster or design which youth like.

Performance:

For past years Bonanza and Oxford has done very good in their business they know the basic

needs of its customers and try their best to fulfill them and in return they provide high quality

sweaters and jersey in descent designs.

Market share:

Bonanza leads in market share of selling winter garments. People recognize their name for

the quality and value.

Strengths:

Strengths of all three brands are their well-known names in the market. They are operating in

the market for more than 5 years and have done many marketing campaigns to attract people

in the past so people recognize their names now for winter garments choices.

Weakness:

Weakness which we have seen in their brands is that market’s most recognized brand

Bonanza do not attract youngsters and their target market is mainly middle age people. Plus

they do not manage their customers through social media and also they have stopped their

advertisement and promotional campaigns because they think that they have done much in

advertising and now their name/word of mouth is their advertisement.

Advertisement:

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Our major focus in respect of advertising will be on social media. It is because our target

market is mainly youth and youth love to spend time on internet. They surf through different

websites, they open different Facebook pages and use many apps, everywhere they see ads

that lasts a splashing image about that product in their minds. It is more useful advertisement

source than anything else today because its fast and extremely cheap.

We would make our own Facebook page and website. We will be posting upcoming designs

and in-stock items on these pages and customers would be able to check all the information

about any product like sizes, shades, quality and quantity available. Also we would provide

our customer with service to design their own product design of their choice and shade and

can place order for that design which will be delivered to them within a week. We would be

using our page and website for promotions and sales. We would be first promoting our page

through different university community pages and entertainment pages.

Secondly, we would also use billboard marketing in some markets of Lahore for people who

don’t want to/ spend much of their time on Facebook and other social sites.

Pricing:

Pricing is important for our business because besides customization service people need

something to choose whether they want to try you or not? So we would be adjusting our

prices lesser than our competitors but not that much that people would think or perceive us as

low quality brands. It’s a price-quality relationship in consumer behavior.

Our one piece of woolen jersey would be costing us around Rs.1000-1400 if we use good

quality material of woolen and stitch it. So including all our expense we would be offering it

to our customers in about Rs.2500. And sweater would cost us around 1000-1200 in

manufacturing so we would be offering it in around Rs.2200. This would include all our

expenses of raw material, stitching, embroidery, washing, packing, delivery, displaying and

shop expenses etc.

We would use good quality wool from local market of Lahore which is Shah Alam market.

Normally in hosiery business we calculate price of a piece of jersey or sweater through

weight of that piece. For example if it weighs 750grams then we can calculate its raw

materials cost by multiplying .75kg with 600/kg rupees. Which give us an idea about how

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much it costs us plus 100 rupees will be added in pressing, stitching, knitting etc. So a single

piece will cost us around 1000 rupees.

But for customization service which is our major, we will charge an extra 600-1000 rupee

because it needs time and have to make design especially for that design. So a customized

piece of jersey and sweater would be costing around 3000 to 3500 rupees.

Product Design:

Our product designs will simple and descent. We will use card boxes for ready to go but at

showroom we will decently display them. For customized product we will use attractive card

box packing and product information and instruction will be added in that box for customers.

Timing of entry:

Timing for entrance in any business is important. As our product is for winters so we have

decided to enter into business someday before winter so people would not be in hustle of

buying garments urgently and they can test our customization service. We would start our

advertising campaigns and promotions 1 month before winters and 2 weeks before we enter

into business. We would start our social media campaigns and sales promotions on university

pages in month of October so we would have much time to attract youngster as we can.

Industry Trends:

Industry trend in hosiery business is no different than others. Old brands are still focusing in

their old strategies and they are still focusing their current target market which is youth who

does not like jersey and sweaters style and they prefer to wear different zipper and hoodies

rather than jersey and sweaters. Brands try to launch mature styles in garments which do not

attract youth but middle age and old age people. So we would come to target this area of the

market as it is an untouched market.

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SWOT analysis:

SWOT analysis is an important meter to measure the strengths and weaknesses of business

and the surrounding in which it is operating.

Strength:

Strength of our business is that we are providing services which are first of its kind in

Pakistan and no other business is providing customization service in hosiery or jersey and

sweaters. Anyone can make his design his own jersey and sweater for their own style, shade

and we would provide customized product to our product on the prices which our competitors

will provide for a readymade product.

Secondly, we are targeting young customers of the society who are mostly university students

therefore it is an untouched market. No other competitor is targeting youngster as their target

market and focusing solely on middle age people with their decent designs which youngsters

do not like that’s why youngster mostly prefer to wear hoodies and jackets in winters.

Weakness:

Our weakness in our business is that we stepping as a new brand in the market and we don’t

have any list of customers. So we have to develop our own customers from zero which would

be very difficult because there are many direct and in-direct competitors in the market such as

Bonanza, Gul Ahmad, Oxford and Cambridge, and in in-indirect competitors there Levis,

Adidas and many other local competitors of hoodie manufacturers.

Opportunity:

Opportunity exists for us in the market as we are targeting the untouched market. We are

targeting youngsters on whom no other competitor has focused before. University students

like to wear jersey and sweaters only with Shalwar Kamiz but not with the formal clothing of

the university, they prefer wearing hoodies and jacket because of its unfashionable and

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untrendy styles. So we have decided to target youngsters with our products as it is an

untouched market.

Threat:

Threat lies for our line of business, because we are trying to reach untouched market which

could be disaster. Because it is not assured that we would get expected response from people.

Bran which is already in business they must had tried to achieve and reach youngster through

jersey and sweaters but there could be difference between thinking of both. So we have to

think critically about our tactics and strategies before moving in because all our input

depends upon it.

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Financial Documents:

This section contains following documents:

Summary of Financial Needs

Cash Flow Statement (Budget)

Break-even Analysis

Actual Performance Statements:

o Balance Sheet

o Income (Profit and Loss) Statement

Summary of Financial needs:

For the capital to start our business, we all members will contribute in our business equally to

make it equal about to 8-10 lac.

This capital will be used to buy the raw material for the production and paying the expenses

of its knitting, stitching, embroidery expenses and marketing, rent of shop, payment of bills

and expenses for transport of products.

Uses of Funds statement:

We will use about 450,000 from our capital to purchase the raw material for the sweaters.

1 lac will be given as advance to the place for rent at Karim Block.

1 lac will be used for buying furniture for the shop and for interior decoration of the shop.

For first month 40 thousand will be given as rent of the shop.

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Cash Flow Statement (Budget)We are preparing the cash flow statement for the one year of 2015. After spending our capital income on different raw material and expenses we will have total of 350,000 in hand.

SOURCES OF CASH WORKSHEET

Cash in hand 1000,000Sales Revenue Sales Service Income Deposits on sales or services

1700,00000

Interest income 0Sale of long term assets 0Liabilities 0Equity 0

Total cash available 2700,000

CASH TO BE PAID OUT WORKSHEET

Startup costBusiness license 0

Inventory purchasesCash out for items for resale or services 450,000

Variable expenses (controllable)Advertising

FreightPackaging costs

Parts and suppliesTotal Indirect expense

100,00030,00020,0005,00020,000

195,000Cash to be withdrawn by owner 0Total cash to be paid out 645,000

INCOME STATEMENT

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(Profit and Loss Statement)

INCOME: 2015-16 2016-17 2017-181. Net Sales 1700,000 2000,000 2400,000

2. Cost of Sales 450,000 500,000 700,000

3. Gross profit 1350,000 1500,000 1700,000

EXPENSES:1. Variable exp. (controllable) 50,000 60,000 70,000

a. Advertising 30,000 40,000 40,000

b. Freight 20,000 30,000 40,000

c. Packaging costs 5,000 15,000 20,000

d. Parts & supplies 10,000 10,000 15,000

e. Sales salaries 0 0 0

f. Misc. direct expenses 20,000 25,000 30,000

g. Legal fees 0 0 0

2. Fixed expenses (overhead) 5,000 15,000 20,000

a. Insurance 0 0 0

b. Licenses & permits 0 0 0

c. Office salaries 0 0 0

d. Rent 600,000 600,000 800,000

e. Utilities 5,000 15,000 15,000

TOTAL EXPENSES 745,000 810,0001050,000

INCOME FROM OPERATIONS:

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OTHER INCOMES (interest) 0 0 0

OTHER EXPENSES (interest) 0 0 0

INCOME BEFORE TAXES 0 0 0

INCOME TAXES 0 0 0

NET INCOME 605,000 690,000 650,000

Balance Sheet

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Assets 2015 2016 2017

Current Assets:

Total current asset 450,000 500,000 570,000

Cash and Bank 350,000 400,000 450,000Account receivable 0 0 0Raw material inventory 100,000 100,000 120,000prepaid building rent 0 0 0

Fixed Assets:

Office equipment 10,000 0 15,000Furniture and fixtures 30,000 15,000 15,000

Total Fixed assets 40,000 15,000 30,000

Total Assets 490,000 515,000 600,000

Liability and shareholder equity

Current Liabilities:

Accounts payable 0 0 0

Total current liabilities 0 0 0

Other Liabilities:

Long term debt 0 0 0Differed tax 0 0 0

Total Liability 0 0 0

Shareholder equity:

Owner’s investment 1,000,000 0 0

Total capital and Liability 1,000,00 0 0

Break Even point:

From given formula we can calculate the breakeven point of our business:

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Break even sale revenue= ¿Cost

(1− variable cost per tonsale price per ton )

And the breakeven point for our business is 333 units of products.

As the price of the single product is 3000 rupees. And brand will achieve its breakeven point in about 3 months.

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