FinalFeasable.docx

8/10/2019 FinalFeasable.docx

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Entrepreneurship

Pre-Feasibility Study

Eminent Facilities Management and Maintenance Company, Lahore.

Submitted To:

Miss Afshan

Submitted By:

Yasir Ali MBPE14139

Muhammad Arslan MBPE14140Awais Akram MBPE14141

Naveed Hanif MBPE14146Usama Sajid MBPE14138


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Eminent Facilities Management and Maintenance, Lahore

Table of Contents

Executive Summary............................................................................................................ 3

Introduction........................................................................................................................ 4

Product\Service Desirability............................................................................................... 5

Product\Service Demand.................................................................................................... 8

Location Analysis............................................................................................................. 10

Quality Management Techniques...................................................................................... 12

Quality Assurance.......................................................................................................... 13

Demand forecasting for 5 Years........................................................................................ 14

Organization and Staffing................................................................................................. 15

Organizational Feasibility.............................................................................................. 15

Financial Projections......................................................................................................... 18

Income Statement............................................................................................................. 22

Balance Sheet................................................................................................................... 23

Cash Flow Statement........................................................................................................ 26

Graphical Representation of Profit.................................................................................... 27

Overall Feasibility: Summary and Conclusion.................................................................. 28


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Executive Summary

In a developing country like Pakistan where businesses are flourishing and markets

are evolving to meet the needs of the society, different sectors still need to be

addressed and gaps upon identification require urgent attention and potential plan

to bridge the gap. This is the way of creating opportunities and providing solutions

for the harmony of the society. Lahore is metropolitan city with population around

10 million. In this era of technology and development saturation exists in the

market since everybody is trying to take the lead and making huge profits. After

careful considering the day to day needs of people in a city like Lahore we have

observed certain basic needs of population of Lahore which cannot be left aside

rather they offer in return a potential business establishment. Facilitiesmanagement and maintenance is one of the business areas which requires

attention in order to fulfill the demands and can be evolved into successful

business. People like electricians, plumber, painters, pipe fitter, refrigeration

experts, welders etc. are always in demand to resolve customer issues in

concerned expertise but unfortunately they are separate entities and cannot be

found at one roof in a single shop. Our service organization, Eminent Facilities

management and maintenance will tend to produce high level of professional

service and standard to ensure companys mission thus it will follow professional

service process because of the high interaction with the customers. Initially posh

areas of Lahore are being targeted in order to capture the desired market as itoffers higher potential. Our service strategy not only allows capturing target

market rather offers future growth and development by covering more wider area

and giving solution to the needs of people nationwide. Apparently, our demand

forecasting allows us to develop sound strategic plan for marketing and service

design. Since our competitor doesnt exist so we have more chances of achieving

the required results and meeting our forecasted goals.


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Introduction

Company Name:-

Eminent Facilities Management and Maintenance, Lahore.

Founders:-

Yasir Ali

Muhammad Arslan

Awais Akram

Naveed Hanif

Usama Sajid

Summary:-Eminent Facilities management and maintenance will be service organization whose inception is purely linked withthe needs of the population of the Lahore. Facilities management organizational setup is rare in Pakistan, thereforeEminent Facilities Management and Maintenance will bridge the gap in order to address the issues and provide one

stop shop solution to the people of Lahore.

Mission Statement

Provide prompt professional service at doorstep and endeavor to constantly improve standards.

Vision

To become a leader in facilities management by quality work and efficient service.

Operations

Our operations are managed by a well-qualified team of engineers and experienced managers and

the task is executed by robust technical staff that are highly capable and experienced in their areas

of expertise.

The whole team is driven by the goal to provide the finest maintenance service and to live-up to

the standards of Eminent. At Eminent we do not compromise our clients sensitive requirements,they are our partners who trust us because they know that we deliver a cost effective facility

management services that exceed their expectations.


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Product\Service Desirability

Service Design Process:

In working environment of todays business the design of product or service has very important role due to

the globally competitive environment. It is a very important thing in any product or service because new

upcoming products or services contribute significantly to sales revenue. Design of a service has a significant

role regarding the success of service because design of a service makes it successful or cause to failure and

the reason is that it set many conditions as like performance of service, features and efficiency of service.

The main objective of making the design is to make a better service with the addition of good utility andappeal of sales on an appropriate cost. Services which will be preferable that will acceptable with high

quality and on low cost. Another factor which has core role will be competitive advantage with similar

service and service of the competitor.

Service Blue-Printing:

Our main building office will be situated in Model Town Lahore which has two floors and a basement forwarehouse. Our first line support team and technical staff will be present on first floor while the

administration will have their office on second floor. Customersfirst point of contact will be via phone with

our customer service representatives and later will be provided with our professional team for required

service, standard and solution. Quality assurance by our engineers will be in place to ensure customer

satisfaction, business development and nationwide progression.

The design strategy of our service will be according to following major factors:-

Cost:

Cost of our service will be offered less in the start because customers will be give attention to our new

services only in that case when we will offer them our service on low price as compared to other similar

services which will available in the market. In future whenever we will want to change the design of our

service at that time we will try to bring minor changes in design and the benefit of minor changes will be

that cost of our services will be not effect much because when we will bring major changes it will be the

cause to increase the cost of our services.


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Quality:

Changing in design will be also impact on the quality of the service. When we will change the design of our

service then we will also concentrate on quality of our service because some time it happen that changing in

design cause effect the quality due to the decrease in the quality of service design. Quality will be ourprimary and core objective on which we will not compromise because it will help us to retain our customers

for long duration of time.

Customers always demanded the quality services with good design of service so when we will maintain both

things then customers will give good response regarding service.

Industry Attractiveness Assessment Tool(Used to assess the broad industry, rather than the specific target market, you plan to enter)

Low Potential Moderate Potential High Potential

1. Number of competitors - - None

2. Age of industry - - Young

3. Growth rate of industry - - Strong growth

4. Average net income firms in the

industry

- - High

5. Degree of industry concentration - - Fragmented

6. Stage of industry life cycle - - Emergencephase

7. Importance of industrys products

and/or services to customers

- - Must have

8. Extent to which business andenvironment trends are moving in favor

- - High


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of the industry

9. Number of exciting new product and

services emerging from the industry

- - High

10. Long-term prospects - - Strong


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Product\Service Demand

Upon careful assessment and thorough research we have come up with the service demand in our desired

areas. Apparently, average shops available to address the needs of people in a particular area are 5. Workers

are 3, who usually perform 2 technical tasks on average in a day.

Shop Counts Worker Task Daily Orders

Monthly Orders

26 Working Days

5 3 2 30 780

Time To Market:

Time to market is also change with changing in the process of services we have provided to our customers.We will adopt that process of services which will be gives us less time to market. It means that we will try to

adopt that production process which will be involved less process. This will help us to send our service in

market on time and deliver to customers. Time to market depends on the process of services if service

process will be complex then it will take much time to market which will be make our bad reputation in the

market also on customers. It depends on resources.so we will adopt such a service which will be faraway

from the customer from one call. One will call our representative will come within that time which will be

decided on call.

Customer Satisfaction:

Customer satisfaction depends on also the design of service. So we will make design of our service different

from other our competitors to satisfy the customers. All facilities and services will be available on just a

phone call away at one stop shop.


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Market Timeliness:

Market Timeliness Assessment Tool


1. Buying mood of customers - - Customer are in

an aggressive

buying mood

2. Momentum of the market - - Rapidly gaining

momentum

3. Need for a new firm in the market with

your offerings or geographic location

- - High

4. Extent to which business and

environmental trends are moving in favor

of the target market

- - High

5. Recent or planned entrance of large

firms into the market

- - No larger firms

entered the

market or are

rumored to be

entering the

market


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Location Analysis

Location for business is very important

factor for a business and selection of

location is also important forestablishment of the business.

Regarding the selection of location we

have decided that we will establish our

office and warehouse in Model town

Lahore. The reason to select this

housing society is that the people living

in this society demand all the services

under one roof. As well as price of

purchase the place will be less and

reasonable as compared to other areas.

Another important thing is that cost oftransportation will be less. As well as

load shading of electricity will be less

as compared to other places.

Everybody knows in Pakistan about

Model town. The target of selling and buying can be achieved easily. There is the vicinity of Model town is

populated area. There is facility of Gas, Electricity, Petrol, School and College. Our employees and clients

can spend their leisure time in pleasant environment as there are parks near our office.

Another reason to select this location is that it will be a positive impact on people and attitude of people willbe positive because community of this area knows very well that what society is. So when we will start our

office in this society, attitude and behavior of people of this will not be negative. The location of our

company is very helpful and supportive for our business. The climate is moral excellence the weather of

Model town is providing assistance for our business transactions and also not interposes in our production

matters. We easily find everything for daily routine; also the work place is utile for business. We are capable

to acquire raw materials by roads and airport and it is also easy to commercial exchange for goods and

services. There is no problem of transportation so we with ease go one place to other with the purpose of

business or any other assistance.


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Industry Attractiveness Assessment Tool

(Used to assess the broad industry, rather than the specific target market, you plan to enter)


1. Number of competitors in target

market

- - None

2. Growth rate of firms in the target

market

- - Rapid growth

3. Average net income for firms in the

target market

- - High

4. Methods for generating revenue in the

industry

- - Clear

5. Ability to create barriers to entry for

potential competitors

- - Can create

6. Degree to which customers feelsatisfied by the current offerings in the

target arket

- - Unsatisfied

7. Potential to employ low cost guerrilla

and/or buzz marketing techniques to

promote the firms product or services

- - High

8. Excitement surrounding new

product/service offerings in the targetmarket

- - High


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Quality Management Techniques

To improve the quality of services there is always need that we apply some techniques regarding

management of quality. This quality will help us to increase the quality of our services and minimize the

failure point of our services.

The quality management techniques that we will use those will be following:

Quality control department will work during all the processes.

Quality of our services will be check and maintain through QC inspectors.

Quality of services of our organization after providing the services to the customers.

Our inspectors call to our customer and take feedback from the customer.

Quality of products will be check after providing the services by QC inspectors. They will check the every

step of production in quality control where quality will be match with standards. We take the feedback from

the customer about the services provided by our employee. So we ask from customer about the behavior ofour employee. We take feedback about the price we charging from customer.

We are also asking from the customer the techniques of our employee to check or repairing of things of the

customer so after the 2 or three days we also ask from the customer.

So the inspectors of quality management fulfill the questionnaire from the information given by the

customer about our services. We were compiled it and see the result then the if the most of customer give

good feedback then well and good and if bad then we check the problem of our services providing then we

improve it for next time.


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Quality Assurance

Our Quality Assurance Team will ensure our quality management system. This will include following steps.

1. Firstly our service man (Technician) will get the quality service slip filled by the client and hand it

over to quality assurance team.

2. The quality assurance team will then call the clients and verify the feedback given by them to our

service men.

3. In case of any deficiency in service quality, standard or any technical complaint, corrective steps will

be taken which may include goodwill gesture to cash payback to customers.


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Demand forecasting for 5 Years

As our business is new and we are unable to get past data for forecasting so we are unable to use quantities

forecasting technique. Here we are using Qualitative forecasting Technique.

We visited shops and met Electricians, Plumbers, Painters etc. for collection markets demand data.

Qualitative (Judgmental) Techniques:

Now we are going to discuss the judgmental techniques in detail:

Judgmental Techniques is defined as that which uses nature along with other resources to

forecast what may happen. Executive decisions can be made on the bases of these feelings.

Goes beyond simply statistical techniques and encompasses what people believe is going to

happen. It is in the area of instinct, interdepartmental committees, market research andexecutive opinion.

Judgmental forecasting technique based on opinion which we get from different people,

management, staff and also are the executive. By judgmental forecasting techniques we dont

need any type of past and future data.

The use of judgmental technique is that we going to start a new business because we have no

past data that we going to make forecasting on the bases of past data. When we have no past

data we get different type of opinion from different persons for our forecasting. In judgmental

forecasting we dont need any type of future data.

In judgmental forecasting techniques we get different opinion from different persons. In this

technique we get we get opinion from sales persons that how they going to sale in a month

and if they sell a maximum sale then this point going to increase the sale of the company by

targeting his maximum sale. Sometimes we get opinion from outsiders because they are also

doing the same work and they will give us a better feedback according to his field.

Beside this we also get opinion from our management and staff. Our executive also guides us

in a better way that how ever do in a proper way.


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Organization and Staffing

.Orders Forecasting Per Area:

Worker Task Daily Orders

Monthly Orders

26 Working Days

18 3 54 1404

Initially we will start business in five areas like DHA, Gulberg, Model town, Shadman, Cantonment, Garden

Town etc.

Monthly Orders

Total Orders

6 Areas

234 1404

Organizational Feasibility

Issues Addressed In this Part

1. Management Process

We have hired a very professional and agile team of management to ensure effective business

operation.

2. Resource Sufficiency

Besides management our technical staff is our core strength, therefore we have hired professional

Accredited technicians in order to deliver best service and highest standard. Our office and

warehouse exhibit the attributes to accommodate our team and clientsneeds.


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1. Passion for the business idea - - High

2. Relevant industry experience - - Extensive

3. Prior entrepreneurial experience - - Extensive

4. Depth of professional and social

networks

- - Strong

5. Creativity among management team

members

- - High

6. Experience and expertise in cash flow

management

- - High

7. Experience and expertise in cash flow

management

- - High

8. Excitement surrounding newproduct/service offerings in the target

market

- - High


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Ratings Resource Sufficiency

1 2 3 4 5 Office space

1 2 3 4 5 Lab space, manufacturing space, or space to launch a

service business

1 2 3 4 5 Contract manufacturers or outsource providers

1 2 3 4 5 Key management employees (now and in the future)

1 2 3 4 5 Key support personnel (now and in the future)

1 2 3 4 5 Key equipment needed to operate the business

(computers, machinery, delivery vehicles)

1 2 3 4 5 Ability to obtain intellectual property protection on key

aspects of the business

1 2 3 4 5 Support of local and state government if applicable forbusiness launch

1 2 3 4 5 Ability to form favorable business partnerships


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Financial Projections

Sales Estimation:

We shall take 54 orders daily out of 180 per day.

MONTH Avg. Daily Order Est. Monthly Order

Sales

Est. Rs. 500 per Order

JANUARY 54 1404 702000

FEBRUARY 54 1404 702000

MARCH 54 1404 702000

APRIL 54 1404 702000

MAY 72 1872 936000

JUNE 72 1872 936000

JULY 72 1872 936000

AUGUST 72 1872 936000

SEPTEMBER 72 1872 936000

OCTOBER 54 1404 702000

NOVEMBER 54 1404 702000

DECEMBER 54 1404 702000

Total 9594000
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Assets:

Assets Quantity Price Per Unit Total Cost

Office Advance 300000

U.P.S 2 50000 100000

Personal Computer 6 18000 108000

Office Tables 6 6000 36000

Revolving Chairs 7 5000 35000

Visiting Chairs 12 1000 12000

Ceiling Fans 6 5000 30000

Split A.C 3 60000 180000

Cupboards 2 30000 60000

Printer 2 15000 30000

Energy Saver (24W) 20 200 4000

Telephone Set 8 1500 12000

Telephone Exchange 1 20000 20000

Welding Machine 1 40000 40000

Tool Box 6 25000 150000

Fabricating Gun 2 6000 12000

Misc (10%) - 112900

1241900


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Payroll:

Positions

No of Persons

Required

Salary Per

Month

Total Per Month

Salary

Total Annual

Salary

Electrical Engineer 1 35000 35000 420000

Mechanical Engineer 1 35000 35000 420000

Electrition 6 20000 120000 1440000

Plumber 6 20000 120000 1440000

Refregration 6 20000 120000 1440000

Accountant 1 20000 20000 240000

Quality Assurance 2 20000 40000 480000

Customer RelationshipOfficer 2 15000 30000 360000

Security Guard 1 12000 12000 144000

Office Boy 1 12000 12000 144000

Cleaner 1 6000 6000 72000

Total 28 170000 550000 6600000

Legal Expenses:

Name Amount

Legal and Professional Fees

75000SECP Expense

Licenses Expense

Insurance Expense


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Utility Expenses:

Type Per Month Annual

Electricity Expenses 30000 360000

Drinking Water Charges 3000 36000

Repair & Maintenance Office 5000 60000

Entertainment Expenses 6000 72000

PTCL Landline Expenses 10000 120000

Printing & Stationary 4000 48000

Universal Access # 5000 60000

MISC Expense 5000 60000

Portal 25000

Total 68000 841000
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Income Statement

Projected Income Statement (Rs.) Year 1 Year 2 Year 3 Year 4 Year 5

Net Sales 9594000 10553400 11608740 12769614 14046575

Fuel 842400 926640 1019304 1121234 1233358

Cost of Sales 842400 926640 1019304 1121234 1233358

Gross Profit 8751600 9626760 10589436 11648380 12813218

General Administrative & Selling Expenses

Office Rent 360000 396000 435600 479160 527076

Marketing Expenses 360000 396000 435600 479160 527076

Legal Expenses 75000 50000 50000 50000 50000

Salaries & Wages 6600000 7260000 7986000 8784600 9663060

Utilities 841000 925100 1017610 1119371 1231308

Subtotal 8236000 9027100 9924810 10912291 11998520

Net Profit 515600 599660 664626 736089 814697

Tax 180460 209881 232619 257631 285144

Net Profit After Tax 335140 389779 432007 478458 529553
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Balance Sheet

Assets

Year 1 Year 2 Year 3 Year 4 Year 5

Rs Rs Rs Rs Rs

Current Assets:

Cash in Hand 500000 550000 605000 665500 732050

Office advance 300000 300000 300000 300000 300000

Fixed Assets:

U.P.S 100000 90000 81000 72900 65610

Depreciation 10% 10000 90000 9000 81000 8100 72900 7290 65610 6561 59049

Personal Computer 108000 97200 87480 78732 70858.8

Depreciation 10% 10800 97200 9720 87480 8748 78732 7873.2 70858.8 7085.88 63772.92

Office Tables 36000 32400 29160 26244 23619.6

Depreciation 10% 3600 32400 3240 29160 2916 26244 2624.4 23619.6 2361.96 21257.64

Revolving Chairs 35000 31500 28350 25515 22963.5

Depreciation 10% 3500 31500 3150 28350 2835 25515 2551.5 22963.5 2296.35 20667.15

Visiting Chairs 12000 10800 9720 8748 7873.2

Depreciation 10% 1200 10800 1080 9720 972 8748 874.8 7873.2 787.32 7085.88


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Ceiling Fans 30000 27000 24300 21870 19683

Depreciation 10% 3000 27000 2700 24300 2430 21870 2187 19683 1968.3 17714.7

Split A.C 180000 162000 145800 131220 118098

Depreciation 10% 18000 162000 16200 145800 14580 131220 13122 118098 11809.8 106288.2

Cupboards 60000 54000 48600 43740 39366

Depreciation 10% 6000 54000 5400 48600 4860 43740 4374 39366 3936.6 35429.4

Printer 30000 27000 24300 21870 19683

Depreciation 10% 3000 27000 2700 24300 2430 21870 2187 19683 1968.3 17714.7

Telephone Exchange 20000 18000 16200 14580 13122

Depreciation 10% 2000 18000 1800 16200 1620 14580 1458 13122 1312.2 11809.8

Welding Machine 40000 36000 32400 29160 26244

Depreciation 10% 4000 36000 3600 32400 3240 29160 2916 26244 2624.4 23619.6

Tool Box 150000 135000 121500 109350 98415

Depreciation 10% 15000 135000 13500 121500 12150 109350 10935 98415 9841.5 88573.5

Fabricating Gun 12000 10800 9720 8748 7873.2

Depreciation 10% 1200 10800 1080 9720 972 8748 874.8 7873.2 787.32 7085.88

Total 1531700 1508530 1497677 1498909 1512118


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Page | 25

Liabilities

Year 1 Year 2 Year 3 Year 4 Year 5

Rs Rs Rs Rs Rs

Owner's Equity 1196560 1118751 1065670 1020452 982565

Retained Earnings 335140 389779 432007 478458 529553

Total 1531700 1508530 1497677 1498909 1512118


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Page | 26

Cash Flow Statement

CASH FLOW Year 1 Year 2 Year 3 Year 4 Year 5

Profit after Tax 335,140 389,779 432,007 478,458 529,553

Add: Depriciation 81,300 73,170 65,853 59,268 53,341

Net cash Inflow 416,440 462,949 497,860 537,725 582,894

1,846,900 (1,430,460) (967,511) (469,651) 68,074 650,968

3.87 1.00 1.00 1.00 0.87 -

Cost Of Capital Cash Flow

OUT Flow (1,846,900)

Inflow For Year 416,440





IRR 10.35%


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Page | 27

Graphical Representation of Profit

5 Years Graphs

-

100,000

200,000

300,000

400,000

500,000

600,000

1 2 3 4 5

416,440462,949

497,860537,725

582,894

1 2 3 4 5

Profit 416,440 462,949 497,860 537,725 582,894

5 Years Analysis


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Overall Feasibility: Summary and Conclusion

Conclusion (report finding for each area)

A.Total startup cash needed.

Rs. 1.5 Millions.

B.

Financial feasibility

Not Feasible Unsure Feasible

C.

Suggestion for improving financial feasibility

Overall Feasibility of the Business Idea

Based on Each Part

Suggestion for improving the

Feasibility

Product/Market Feasibility

Not feasible

Unsure

Feasible

______________________

______________________

______________________

Industry/Market

Feasibility

Not feasible

Unsure

Feasible

______________________

______________________

______________________

Organizational Feasibility

Not feasible

Unsure

Feasible

______________________

______________________

______________________

Financial Feasibility

Not feasible

Unsure

Feasible

______________________

______________________

______________________

Overall Assessment

Not feasible

Unsure

Feasible

______________________

______________________

______________________

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