Money&Market Business Report

8/11/2019 Money&Market Business Report

http://slidepdf.com/reader/full/moneymarket-business-report 1/69

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1. Executive Summary

Money & Market is a weekly business magazine. It will be published on every week‘s Thursday.

There will be also an online business available for our tabloid. Our printing press factory will

consist of different printing equipment. As we are going to produce 50,000 copies of magazine in

every week initially, we will require high-end equipment for Pre-press, Press & Post-press

activities. The publication is one of the major leaders in the industry and serves a highly targeted

niche. It has been reported to grab 30% of the market place within first two years of

commencement. The publication is considered for quality rather than quantity reached and is

positioned specifically in the upper class segment of the market. Throughout this business planwe tried to compile all the elements that are needed to be forecasted and planned accordingly.



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2. Profile of the Team

Figure: Company Profile

This will be our initial chain of command. As our business will go forth, capacity will increase

and thus we hope to include more employees in the future.

3. Industry overview

Bangladesh is a land of opportunity.About 150 million peoples are the bases of investment in any

commercial sector. Due to low readership and lower GDP there is massive challenge to establish

Newspaper Company but enormous peoples and 201 daily newspapers showing the positive sign

for gaining the success in this regards. The private sector is playing a gradually more active role

in the economic life of the country that will be a positive sign for the newspaper industry. In

short a solid average yearly GDP expansion of 5% over the last decade and exports have been

gradually shifted from usual goods to more value added items indicate the improvement of the

economy which ultimately increase the purchasing power of the peoples. Readership is the main

way of measuring success in the newspaper industry. Several editors agreed that readership is

one of the most important and vital points for newspaper industry. As the readership increases,

advertisers view the paper as an increasingly attractive spot and it increases the revenue of the

paper. (―Trends in Bangladesh Media‖, n.d.)



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4. Company Overview

The Business

Our plan is to publish a weekly business newspaper. We have given it a name-‗Money &

Market.‘ It will be published on every week‘s Thursday. Moreover, there will be also an online

business available for our tabloid. It is the first business related newspaper in Bangladesh.

4.1 Mission Statement

We will publish business magazine weekly. Our aim is to give latest information about the

business world to the readers.-they will be informed about latest market and economic condition

worldwide and Bangladesh-which will be very essential to them; to provide business school

students with vast resources for their projects, cases and preparing for admission to B-schools

and MBA programs. To make our aim successful we will employ highly skilled journalists and

business executives. Beside we will also earn a healthy amount of profit

4.2 Vision Statement:-

To make ‗Money & Market the most circulated business tabloid in world; the tabloid will

potential source of information for billions of business executives, business women/men and

business students around the world.



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4.3 Key Products/services:-

Initially, we will publish our magazine every week‘s Thursday. It will be available all around

Bangladesh. There will also be an online version available for our foreign customers. If we see

positive results from this we will sell a CD with our magazine. The CD will contain many

eBooks and business games which will be a great source of essential resources for B-Schools

students

Product : Magazine Cover Page Sample



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4.4 Overall Strategy

Objective:-Locally and internationally all daily newspapers are our indirect competitors. Only

internationally, business newspaper and magazines like the economist, Wall Street journal,

Bloomberg Business week etc. However, we have to grab at least 70% of the market share within

the first two years of our commencement.

Short-term goals:-

Create an excellent brand image locally. By local we mean our market is inside

Bangladesh. We will provide our customers with latest news about business news.

Corporate personalities will be greatly benefitted by this. Moreover we will provide manyguidelines for B-schools students about how to be successful in career, getting in to good

MBA schools in abroad etc. Thus, how we will create an excellent brand locality.

Gain consumer‘s trust by giving up to date business news about Bangladesh and the rest

of the world. we will provide many guidelines for B-schools students about how to be

successful in career, getting in to good MBA schools in abroad etc. Thus, how we will

create an excellent brand locality. All b this will definitely earn the trust of customers

and we will eventually become the no.1 business magazine in Bangladesh.

Become no.1 weekly business magazine of Bangladesh. We will provide our customers

with latest news about business news. Corporate personalities will be greatly benefitted

by this. Moreover we will provide many guidelines for B-schools students about how to

be successful in career, getting in to good MBA schools in abroad etc. Thus, how we will

create an excellent brand locality. All of this will definitely earn the trust of customers

and we will eventually become the no.1 business magazine in Bangladesh.



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Long term goals:-

Create an excellent brand image globally. When we will go global, we will provide extra

products like CD with our magazine. Our CD will contain games for training MBA

students. We will also sell an online version of our magazine. Thus we will create an

excellent global brand image. All of this will definitely earn the trust of customers and

we will eventually become the no.1 business magazine in world wide

When any business executive will think about getting information about any company

he/she will confidently search through our online magazine database. On the other hand,

our business magazine will become the best guide to getting admission into excellent B-

schools.

5. Industry overview and analysis

5.1 PEST

Every firm is affected by some external macro-environment. A PEST analysis is the analysis of

such macro-environment.P.E.S.T. is an acronym for the Political, Economic, Social, and

Technological factors of the external macro-environment. These external factors can be a threat

to a company and usually they are beyond firm‘s control. However, changes in the external

environment also create new opportunities-(Net MBA, 2002).

Below is the PEST analysis on the basis of our company.

Political Analysis:-

Our country is politically instable. Now and then there are political instability like strikes

in our country, which may greatly hamper our business. Moreover, we have to build

some political connections to run our business effectively.



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All companies in Bangladesh are subjected to a corporate tax. Accordingly, our company

is also subjected to a corporate tax rate of 37.5%.This corporate tax eventually effects our

net profit negatively. A corporate tax of 37.5% is high for a new business like ours.

There is no strict environment regulation. Well from business perspective this is a good

news for us. Because we don‘t have to think about recycling .As paper comes from wood,

so there is already a criticism going on against using paper. But we don‘t have to face any

kind of hassle due to weak environment regulation in Bangladesh.

There are some trade regulations that will not hamper our business. Like for starting up a

new business in Bangladesh, we have to obtain license from the government, which may

be lengthy. This may delay the starting of our business.

Economic Analysis:-

Bangladesh‘s GDP is rising which is positive for our business. A healthy GDP shows a

good sign of the economic condition of the country. This means the purchasing power of

consumers are increasing, which good for all business.

Inflation rate in Bangladesh is currently 10.43%.And it has a tendency to rise, which

may have negative impact on our sales.

The benchmark interest rate was last reported to be 7.75% for deposit and 13% for loan.

This means if we borrow from bank we have to pay a high interest to them in return.

Therefore, it‘s good to avoid bank loan as far as possible.

Social Analysis:-

Literacy rate is increasing. People are now more interested in achieving knowledge.

English proficiency in rising. This is obviously good for our business. Higher education

rate means, there are more customers for our product.

Population is high and increasing. So we will have a large sample of targeted customers.

This will help us in making a better and effective marketing research.Eventually,our

forecasting will be effective. This is obviously good for our business.



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Readers of magazine will be usually from age 18-60.We have many people in our

country within the age range of 18-29 but after within the age range of 30-60 population

is less. This data will help us in forecasting feasibility.

People who are somehow related to business are very much eager to increase their

knowledge of business world. They won‘t mind buying a business tabloid from their

monthly income. This is a great for our business.

Initially, our business magazine will be in English. But the lack of proficiency.In English

language may make our tabloid hard to capture market in many parts of Bangladesh. This

is a great for our business. This is obviously good for our business.

Technology analysis:-

Fast internet available in many parts of Bangladesh. Both we and our customers will be

benefited from this. We can get latest business news around the globe and or customers

can get business news updates from our websites.

5.2 Five forces

Figure:- The diagram above illustrates the

Porters Five Forces Model in general. It is used

to assess the nature of competition within an industry.

RIVALRY

Supplier power

Threat of

substitutes

Barriers to

entry

Buyer power



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Force 1-Degree of rivalry:- We don‘t have any direct competitors, as there are no other

business magazines available in our country. However, there are many newspapers circulating in

our country. They also publish business news. So they are our indirect competitors. Moreover,

much other business news providing websites ran by foreign companies is available. They are

also our indirect competitors. Switching costs for customers is moderate; as there is no tabloid

which will provide detailed business news and analysis with B-schools guidance with such low

cost compared to other business newspapers like Economist or the Wall Street journal which are

costly.

Force 2-Threat of new entrants: The threat of new entrants in this industry is high. By seeing

our success many other companies may start penetrate into such business.

Force 3-Bargaining power of buyers: Buyers are the people who create demand in the

industry. In our business, bargaining power of buyer is moderate. This is because buyers have

few options rather than our tabloid and we will also offer a standard price.

Force 4-Bargaining power of suppliers: In this industry, suppliers power is low. Our suppliers

are mainly paper industry. They will provide us with paper necessary to print our magazines.

There are many paper suppliers in Dhaka from where we can buy paper at low price.

Force 5-Threat of substitutes: The presence of substitute products can lower industry

attractiveness and profitability because they limit price levels. First of all it depends on the

buyers‘ willingness to substitute. If she/he happy with our tabloid, she won‘t switch easily. The

relative price and performance of substitutes (depends on the tabloid‘s quality) and the costs of

switching to substitutes(depends on the tabloid‘s quality) also influence the threat.



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5.3 Industries SWOT

It is a tool that identifies the strengths, weaknesses, o pportunities and threats of an organization.

Specifically, SWOT is a basic, straightforward model that assesses what an organization can and

cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to

take the information from an environmental analysis and separate it into internal (strengths and

weaknesses) and external issues (opportunities and threats). Once this is completed,

SWOT analysis determines what may assist the firm in accomplishing its objectives, and what

obstacles must be overcome or minimized to achieve desired results.-(I nvestopedia ,n .d.)

The SWOT analysis is shown below on the basis of external and internal analysis.

SWOT analysis

Strengths:

We will patent our brand name. It is very important that we patent our brand name.‖

Money and Market‖ will be the only business tabloid all over the world. By patent we

will ensure that our business projects, brand name everything remains safe from fraud.

Favorable access to distribution networks. Our distribution networks involve circulation

department to production department to agent, then to hawker and finally to readers.

Accessing to such distribution networks in flexible.

Skilled and cost effective labor force. In Bangladesh we have highly skilled workers from

many reputed universities. They are efficient enough to run our business most effectively.

Moreover we can hire those workers at a lower rate too, which is great for our business.

Weaknesses:

Initially we have a weak brand name. As our business is just going to start, so our brand

is not popular among customers. Our customers don‘t know whether our tabloid is

effective enough to fulfill their wants.



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High cost structure. It is very costly to start up a new business. High cost is associated

with the buying of a new factory, equipment and machinery. Therefore the ratio of fixed

assets to variable cost is obviously hu\igh.

Opportunities:

Our product will fulfill an unfulfilled customer need. Business is good way earning

money. And our customers know it very well. Our tabloid will provide the best processes

that can make a business very successful. Therefore it will fulfill customers wants.

Students are more interested in pursuing their business studies in reputed universities.Our tabloid will give invaluable knowledge about getting in to top business schools. So

we can target a huge base of customers who are mainly students

Threats:-

Penetration of new business magazine in the market. Already there are some business

magazines available in the market. They are our direct customers. Moreover, all the daily

newspapers are also providing business news weekly. We have to compete them too.

Finally, there is also chance of entry of new business tabloids in the market.

There are also many blogs were business news are published briefly.If people prefer

reading business news from blog/internet then our tabloid will not capture market

successfully. The threat of new entrants in this industry is high. By seeing our success

many other companies may start penetrate into such business.

The presence of substitute products can lower industry attractiveness and profitability

because they limit price levels. First of all it depends on the buyers‘ willingness to

substitute. If she/he happy with our tabloid, she won‘t switch easily. The relative price

and performance of substitutes (depends on the tabloid‘s quality) and the costs of

switching to substitutes(depends on the tabloid‘s quality) also influence the threat.



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5.4 Industry life cycle of our Tabloid

Figure:- The diagram above shows the industry life cycle of a product in general.

Industry life cycle is generally defined as the concept relating to the different stages an

industry will go through, from the first product entry to its eventual decline. There are

typically five stages in the industry lifecycle. Let‘s discuss the industr y life cycle of a Tabloid

that we are going to set-up.

We arecurrently

here

Our direct competitors areapproximately here - Locally:-Bangladesh Economic Digest&online business blogs like businessnews-bd.com

Our indirect competitors such as the Daily newspapers are here. Also,when we go international, we will have to face fierce competition fromdirect competitors like – The Economist, Bloomberg etc.-they are also at

Maturity stage.)

http://www.facebook.com/pages/Bangladesh-Economic-Digest/299295450116247

http://www.facebook.com/pages/Bangladesh-Economic-Digest/299295450116247



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1. Embryonic/Introduction Stage: At the embryonic stage, industry output will increase

gradually. High investment is needed. Profit will be less or there might be loss.

2. Growth: The TV channel gains popularity and grows. Proper advertising and marketing

plan is necessary for this.

3. Industry Shakeout: The Company settles on the "dominant design"; economies of scale

are achieved, forcing smaller players to be acquired or exit altogether. Barriers to entry

become very high, as large-scale consolidation occurs. Need to invest to attract customer

from weak companies to get market share.

4. Mature: Growth is no longer the main focus, market share and cash flow become the

primary goals of the companies left in the space. Reap rewards from previous investment

5. Decline: Usually, at this stage Revenues declining; the industry as a whole may be

supplanted by a new one. But if we maintain our quality thane new entrants won‘t be able to

compete with us and we will maintain a healthy market share.



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5.5 Strategic group analysis

The strategic group analysis according to PEST and 5 forces are as follows:-

Strengths:-

We will patent our brand

name.

Favorable access to

distribution networks. Skilled labor force.

Weaknesses:-

Initially we have a weak brand name.

High cost structure.

Opportunities:-

Our product will fulfill an

unfulfilled customer need

People are more interested

in keeping up-to-date

information about the

business world, so our

tabloid will be a good option

for them.

Threats:-

Penetration of new business magazine in the

market.

If people prefer reading business news from

blog/internet then our tabloid will not capture

market successfully.



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6. Internal Analysis

6.1 Company Value Chain Analysis

Our business will have a defined chain of activities that will help to produce one of the best

business weekly magazines in the world. The primary activities of our company will definitely

be human resources (HR), because we will collect the business news of the world from our

senior staff reporters. We may also publish works originally created by others for which we will

obtain the rights, and for this we also need our legal department as a primary activity. One of our

other primary activities will include technological assistance because our weekly business

magazines will be both printed and online media. We will store archives of our magazines online

and will also create a Smart Phone application which will give registered users continuous

updates of the business world. Our secondary activities will include finance and administration

department to oversee the business; we will also need building security to secure our sensitive

materials.

Primary activities (HR, legal, marketing, Finance, and technology)

Input Output

Secondary activities (Admin, security and machines operator)

FIG: A pictorial representation of value chain analysis:



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Operations Plan

The operations plan will be divided in to a series of activities and each individual will get a

distinct job for which he/she will be responsible. The first job is to collect business news around

the world, which will be done by various journalists and senior staff reporters. We will divide

this task into two parts namely: foreign business and local business news. All these news reports

are ultimately responsible to editors. Our magazines will have numerous editors, beginning with

an executive editor responsible for the news division. Immediately below the executive editor

will be the managing editor, the person who will oversee the day-to-day work of the news

division. Other editors -- sports, photo, state, national, features and obituary, for example -- will

also report to the managing editor. The copy editors will then be responsible for spell check,

errors of usage. They may also look for "holes" in the story that would confuse readers or leave

their questions unanswered.

While news is being collected on one hand, on the other hand the operation level workers will be

given raw materials to produce the sizable newspapers where the news is to be printed on. After

attaching all the news, photos and ads, the newspapers will be mass printed. This business

magazines will then be distributed to the local news-stands and then to the final customer.

6.2 Existing Core Competencies and Future Core Competencies

Our business will have some capabilities that will be critical in achieving competitive advantage

over other companies in the magazines publishing business. Firstly we will be the first to

introduce a ―scholar‘s analysis section‖ where different noted intellectuals in the business world

will be giving their opinion, analysis and research about our news reports. This will help

individuals to not only understand the news but also know how it affects the business world and

global trade economy. Secondly, we will create a Smart Phone application that will give

registered uses continuous news updates of the business world.

To show that we are ecologically aware we will initiate ―go green‖ policy which will be our

future competency. We will make sure that our news papers are made from recycled papers; this



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will give an insight to the people about our respect and love for Mother Nature. We are hoping

this will create more value to our brand image.

P↑ Qd↑

FIG: A pictorial representation of our existing core competencies

Efficiency Low

Quality High

Innovations High

Customer res High

Differentiation & high cost

Resource(capital,

technology)

Capabilities(Scholars,noted

Match To create

Core

Competencies (scholar‘s analysis

section, new

technology)



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6.3 Performance Based Analysis

Return on equity (ROE) focuses on the return to the shareholders. We are required to maintain a

steady Return on equity (ROE) in order to keep the investors happy. We look to increase our

debt leverage to make our ROE ratio look attractive. On the other hand, ROA explicitly takes

into account the assets used to support business activities. It determines whether the company is

able to generate an adequate return on these assets rather than simply showing robust return on

sales. Our company is an asset-heavy company which will need a higher level of net income to

support the business and show a healthy ROA ratio. So in order to increase our performance we

need to increase our net income. Also we will analyze our performance through Return on

invested capital (ROIC). If we can utilize our invested capital in the right areas then we can showa striking ROIC ratio which will help increase performance.

2012 2013 2014 2015 2016

ROA -8.16% -2.67% 1.00% 3.09% 4.75%

ROE -10.71% -3.22% 1.13% 3.36% 5.02%

ROIC -9.14% -2.93% 1.73% 5.26% 8.04%



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Graphical representation:

ROA is a measure of how much return we are getting by utilizing our assets. ROE is a measure

of how much we are earning by utilizing our equity money. And ROIC is the return that we get

by investing capital before tax level. Here we can see that our profitability ratios are suffering in

the initial stages but then after 2013, we have a gradual increase in the ratios which is good sign.

It shows that the company is utilizing its assets efficiently and making good investment choices

in the future.

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

2012 2013 2014 2015 2016

ROA

ROE

ROIC



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A pictorial representation of our performance based analysis is given below:

FIG: Performance based analysis

PERFORMANCE(negative at first)

OUR FOCUS

INCREASE ROE RATIO INCREASE ROA RATIO INCREASE ROIC RATIO

HOW TOINCREASE

INCREASE DEBT

LEVERAGE

INCREASE NET

INCOME

PROFITABLE

INVESVESTMENTS

HOW TOINCREASE

HOW TOINCREASE



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7. Market overview

7.1 Potential customers

Since our tabloid will contain information about the business news, so our potential customers

are categorized in to two segments:

Readers: who will buy the products for their personal information i.e. businessmenand

women, corporate executives, business school student and also for candidates looking

forward for admission in business school.

Advertiser: who will buy advertising space for their business use i.e. business buyers.

Our survey research is given in the appendix.

7.2 Size and growth of the market

There is a huge opportunity for tabloid in Bangladesh. According to India media entertainment,

at present Bangladesh print media markets already account for the entire State printing industry

60% market share. Advertising industry contribute to Bangladesh newspaper industry revenue

73%, contribution to turnover of the English-language newspaper 86%.(―Bangladesh Print

Media,‖n.d.). Also, although over 1,800 dailies and periodicals are published in the country, only

about 15% of the population read a newspaper/periodical once a week. The readership in the

urban areas is comparatively higher at about 32%, while the rate in the rural areas, especially

among rural women, is very low - only about 2%. (Rahman& Ahmed, n.d.). Therefore, utilizing

these market opportunity we have to grab 30% of the market within the first two years of our

commencement.

Forecasting the sales growth

A sales forecast is an essential tool for managing a business of any size. Most businesses draw up

a sales forecast once a year and include it in their business plan. A well-constructed sales plan,

combined with accurate sales forecasting, can allow us to spend more time developing our

business rather than responding to day-to-day developments in sales and marketing.



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Our market research and survey findings regarding sales growth: (Total sample size was

30).

1) Most of the populations are eager to go for a business tabloid for research rather than a

newspaper.

2) 80% of the population would like to advertise in our media.

3) Saptahik2000 is our closest competitor and one of the most successful magazines in

Bangladesh.

4) Our market research (appendix) shows that the Saptahik2000 circulated 3000 copies in

2009 and 5500 copies in 2012(the only two data we could find ).

5)

The price of the magazine of our closest competitor Shaptahik2000 is 65 taka.

Assumptions based on our findings:

1) We think that our business will show a similar trend of growth in sales like Saptahik2000.

2) Since our business is all over Bangladesh so we will produce a lot more units than

Shaptahik2000. We will produce 50000 units in the first year.

3) Since we are only focusing on business news and there are not many ‗business

magazines‘ in Bangladesh, ours will show a positive growth trend very quickly.



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Calculations for forecasted sales growth:

If we calculate the growth trend of our closest competitor Shaptahik2000 then we can have an

idea of our forecasted growth gate and the market:

Sales in the year 2009(appendix): 3000

Sales in the year 2012(appendix): 5500

By the formula of time value of money, we can find the rate. Here,

FV= 5500 PV=3000

N= 3,

Therefore, FV=PV(1+i)n

5500=3000(1+i)3

if we solve for i, we get i = 22.4%.

Final forecasted Sales growth rate of our business:

Since we having more capacity and more human resources than Shaptahik2000, so our business

should grow at a slightly higher than Shaptahik2000. Therefore our forecasted sales growth rate

each year will be 25%.



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7.3 Market segmentation

We will segment our market for two types of customers.

Readers, &

Advertisers

7.4 Marketing plan

Marketing Budget:

Start up:

Our start up marketing budget will be:

Newspaper Tk. 60,00,000

Radio 3,00,000

Direct mail 1,00,000

Total 64,00,000

Marketing Budget for year 2012:

Months

July (Tk.) August

(Tk.)

September

(Tk.)

October

(Tk.)

November

(Tk.)

December

(Tk.)

Newspaper 60,00,000 - 60,00,000 - 60,00,000 -

Television - 80,00,000 - 80,00,000 - 80,00,000

Renowned

corporate

executives

50,00,000 50,00,000 50,00,000 50,00,000 50,00,000 50,00,000

Radio 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000 3,00,000

Total 11,300,000 13,300,000 11,300,000 13,300,000 11,300,000 13,300,000



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Marketing Mix

Marketing mix is the set of controllable variables of marketing. In general it is expressed in 4 Ps:

product, price, place and promotion of a particular company (Kotler, 2003). The marketing mix

of our Tabloid, ―Money and Market‖ is described below:

Product

In a narrow sense, a product is a set of attributes assembled in an identifiable form. In marketing,

we need a broader definition of product to indicate that consumers are not really buying a set of

attributes, but rather benefits that satisfy their needs. Product is an umbrella term that covers

goods, services, places, persons, and ideas (Stanton 1994). Marketing offer is some combination

of products, services, information, or experiences offered to market to satisfy a need or want

(Kotler, 2003).

Level of products

A product planner must think about three levels of products and services (Kotler, 2003). Each

level adds more customer value. The most basic level is the core benefit that addresses the

problem solving benefit of the marketing offer. For ―Money and Market‖, the basic product is

information i. e. news & views. At the second level, marketers turn the core benefit into an

actual product. In this stage product features, design, quality level, brand name, and packaging

are developed. The actual product of ―Money and Market‖is the newspaper itself. In the third

stage, to differentiate their offers from competitors‘ a marketer offers some additional benefits

with core benefit and actual product, which is referred as the augmented product. ―Money and

Market‖offers different supplementary i.e. eBook in CDs as its augmented product.

Price

Price is the exchange value of product. Price is the amount of money and/or other items with

utility needed to acquire a product (Stanton 1994). Kotler (2003) explained price as the amount

of money charged for a product or services, or the sum of the values that consumers exchange for

the benefits of having or using the product or service. Pricing is a critical factor in the successful



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operation of for-profit and not-for-profit organizations. Setting prices for new and existing

products appears simple enough. To find out the selling price of a product, a marketer apparently

has to estimate the costs, add a margin for overhead and profit. Price is the primary element of

the marketing mix that generates revenue.The pricing strategy for newspaper industry is different

from other consumer products. ―Money and Market‖is following a special type of competition

based pricing approach to determine of the price of its product. The details of per unit production

cost of ―Money and Market‖are as follows:

(* sell ing 50000 units in the fi rst year)

Per unit production cost

Printing paper Tk. 15

Printing 5

Labor cost 10

Factory overhead 10

40

Indirect overhead 5

45

Per unit sales Revenue

Per unit sales price Tk. 50

Agent‘s commission (5)

(10%)

Total per unit sales revenue 45

Per unit marketing cost

Promotional expenditure Tk. 10,000,000Incentive to hawker 50,000

Trade promotion 5,000,000

170,000,000

Distribution cost 2,500,000

Production cost 2,000,000



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Total marketing cost 174,500,000

Per unit marketing cost 3,490 (yearly)

Per unit target for advertisement revenue

Per unit Cost of marketing Tk. 3490

Sales revenue per unit ( 45)

Advertisement target per unit 3,445

Place

A critical task for marketers in the new millennium is the efficient movement of goods and

services from the point of production to the points of consumption. There are hundreds of ways

in which goods and services can be distributed to consumers. There is no standard distribution

system that can satisfy the needs of every firm. Many organizations use several distribution

channels to reach different market segments. A distribution channel consists of the set of people

and firms involved in the transfer of title to a product as the products move from producer to

ultimate consumer or business user (Stanton 1994). In other words, channel of distribution is a

set of interdependent organizations involved in the process of making a product or service

available for use or consumption by the consumer and business user (Kotler, 2003).



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Money and Market’s channel of distribution

Circulation Department

Production Department

Distribution Department

Agent

Hawker

Reader



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8. Infrastructure

8.1 Facilities

Our printing press factory will consist of different printing equipments. As we are going to

produce 50,000 copies of magazine in every week initially, we will require high end equipments

for Pre-press, Press & Post-press activities. Our printing press factory will be the final place of

the output; the technical parts of this business will be here at the press.

8.2 Machineries and Equipments

Equipments are divided into three categories: Pre-press, Press & Post-press.

We plan to buy machineries in the third year of the business from which we expect to have the

potential to increase our capacity.

Pre-press Equipments

Equipments No.

Y1

No.

Y3

Price (BDT) Model Size

High-End Computer to Plate (CTP) Image

Plotter for Output of Digital Files Directly on

Offset Plates at 3600 DPI Laser Ready for Printing

with FM and Spekta Screening.

1 2 70,000 (Y1)

+ 70,000 (Y3)

PTR 8100 28" x 40"

Apple I Mac Computers for Digital Photo-

Retouching/Finishing.

2 3 3,00,000(Y1)

+ 1,50,000(Y3)

I Mac

High-End IBM Computers with Intel Core i5

Processor (3.2 GHz), 8 GB RAM with 22" Col.

Corrected LCD Monitor, DVD RW Drive and 1 GB

Graphic Card.

4 6 2,80,000(Y1)

+ 1,20,000(Y3)

IBMPC



31

High-End Colour Proofing System compatible

with CtP as above

1 1 1,00,000 9600 Pro 44" Width

Laser Printers for Text Print-Outs 1200 DPI 1 3 25,000(Y1)

+ 50,000(Y3)

Therefore, initial budget for our Pre-press equipments = BDT 7,75,000

As we will increase our capacity, budget for our new equipments on third year = BDT 3,90,000

Total = BDT 11,65,000



32

Press Equipment

Kodak NexPress SX3300 Digital Production Color Press

SRP:INA/

Domestic Intro Date: June 2011

Maximum Monthly Duty Cycle: 3,700,000 impressions

Standard/Maximum Paper Source(s):4/5

Standard/Maximum Paper Capacity: 11,000 sheets/17,350 sheets

Maximum Paper Size (W x L):14" x 36"

Paper Weights: 16-lb bond to 130-lb cover

Bypass (Capacity/Weights): Not applicable

Automatic Duplexing

Standard Networks Supported: Windows, Mac, TCP/IP

Printer Language: Adobe PostScript 3

Standard Interface(s):10/100/1000 M bit/sec

Ethernet Optional Interface(s):None Color

Capable: 5-color (retrieved from http://www.buyerslab.com/Advisor/Products/56451/Kodak/NexPress-SX3300-Digital-Production-Color-

Press)

This industrial printing machine will cost BDT 1,50,00,000 and as its maximum capacity reaches

our future expectation, within 5 years we will not be needing to buy a new one.



33

Post-press Equipments

Equipments No.

Y1

No.

Y3

Price (BDT) Model Size

Paper Cutting Machines 1 2 1,00,000(Y1)

+ 1,00,000(Y1)

Wire Stitching Machines 2 3 8,00,000(Y1)

+ 4,00,000(Y3)

Nipping Machine 1 2 1,00,000(Y1)

+ 1,00,000(Y3)

Fully Automatic Folding Machine 1 2 70,000(Y1)

+ 70,000(Y3)

STAHL 20 x 30 (4

Fold)

Paper Back Cover Perfect Binding Machine 1 2 50,000(Y1)

+ 50,000(Y3)

WELBOUN

D

17"

Sewing Machine 1 2 40,000(Y1)

+ 40,000(Y3)

12‖ x

12‖

Therefore, initial budget for our post-press equipments = BDT 11,50,000

As we will increase our capacity, budget for our new equipments on third year = BDT 7,50,000

Total = BDT 19,00,000



34

The Production and Manufacturing Process (simple flow chart)

Research

Team

Collect newsand Make

Draft

To theeditors

Approval ofeditors

GraphicDesign

DesignApproval

Send forOutput

Evaluate

Distribution



35

The Production Calendar

We plan to produce 50,000 copies per week. An

informal calendar will be maintained to ensure the

production is happening by the deadlines. The purpose

of the production calendar is to provide individual

deadlines for each phase of production.

The article tracking form/folder

The article tracking form and folder will ensure that

each phase of production is completed. It also provides

a means of communication between designers and

editors and a central place to keep production

documents.



36

Program Evaluation and Review Technique (PERT)

In order to maintain a proper flow of work we plan to use Program Evaluation and Review

Technique or PERT. To prepare a PERT chart for our production and manufacturing process, we

prepared a list of works that need to be done in one week in order to complete the production.

Event Activity Estimated Time in

Hours

Preceding Event

A Plan the stories 10 None

B Collect

news/photos/advertisements

96 A

C Assign full timer writers/find

freelance writers

5 B

D Write article draft 18 C

E Proof read 5 D

F Assign full time graphicdesigners/find freelance graphic

designers

3 A

G Graphic Design 10 F

H Track article 5 E, G

I Design approval/change 5 G, H

J Test print 1 I

K Final output 22 J



37

PERT Network

The following figure is the PERT network of all of our activities. As the previous list of works

shows the activities that has to be done to complete a week‘s production, this figure depicts the

proper sequence of the listed works. The critical paths are showing that those particular activities

will take longer time than others.



38

The Production Chart

The purpose of the production chart is to

provide an overview of where each article

stands in the production process for an entire

issue.

Use of Production Chart:

1. The managing editor writes the article

names into the template at the beginning of the

cycle.

2.

The managing editor writes the date in

the appropriate box as each stage of the

process is completed.

3. If work on an article is falling behind,

the managing editor checks to see what is

happening.



39

8.3 Research and Development

There will be editors and sub-editors with good experience in business related fields. Under their

guideline both full timer and freelancer will work. There will also be a head of graphic designers

and under his/her guideline freelancers and full timer will work.

After brainstorming a number of article ideas, designed a chart for the newspaper, and plugged

some of the ideas into a chart we will get it from planning to production. The newspaper will be

ready to send out for printing — by the deadline. There are two stages in this process — article

acquisition and production.

Article acquisition is the part of the process we will assign and collect articles. There will be a

system to assign, have already assigned, and have received. In addition, we will track the articles

that need to be rewritten, are in the process of being rewritten, or are ready to edit.

The production process will be a series of stages in which different steps are carried out at each

stage. In this way, responsibility for different stages can be assigned to different staff members

and deadlines can be given. As a result, the entire staff will be aware of the status of production

of any given article or newspaper issue.

The article acquisition process

Magazine Chart

1. The final deadline will be fixed.

2. The editors will give a deadline for the articles to be ready to edit.

3. Therefore, the writers‘ deadline for this issue will be before that, in order to allow for late

manuscripts, article approval, and rewrites.

Article status chart

1. Keep it in computer and update it daily.

2. Making it available to all of the editors through networked computers.



40

3. Watch for missed deadlines; in which case there will be a need to contact authors.

4. Watch for articles that have been stayed for several weeks that no one has read or

approved.

5. Continue to modify the format to meet the needs.

8.4 Quality Assurance

To ensure the quality of the content and the product itself there will be several people working.

Editors will be the ones who will ensure the contents of the newspaper are up to the standard. On

the other hand, the head of graphic designers will ensure whether the printing is being done in

proper manner or not.

9. Human resource strategy and planning of “Money & Market”

9.1 Key issues

Human resource management deals with the availability of human resources and the efficiency

of the personnel placement. There are several functional areas being associated with effective

human resource management:-Job analysis, HR planning, Recruitment and selection, Human

resource development, Compensation and benefits and downsizing.

The main purpose of human resource management is to create and to keep the balance between

the firm‘s goals and the interest of the employees.

HR planning is the process of systematically reviewing human resource requirements to ensure

that the required numbers of employees with the required skills are available when needed

(Skript Human Resource Management, n.d.)



41

9.2 Staff Requirements

Our staff requirement for the first year is as follows:-

Designation No Qualification Job responsibility

CEO 1 MBA graduate from IBA

with at least 10 years of

experience as a CEO in a

media firm is a must.

Strategic planning and control.

Senior and Junior

Journalists

5

and

10resp

ectiv

ely.

All employees working as

a journalist in our company

should possess a Masters inJournalism with a good

CGPA from a reputed

university. The candidate

must also be very fluent in

English and have excellent

knowledge about business.

The employees primary responsibility is to

gather and write about all the ongoing

business situations going aroundBangladesh. Besides they have to edit the

business news from other sources. Most

importantly these employees should also

be able to perform a good analysis of every

business situation.

Website

programmer/Desi

gner

1 Masters in Computer

Science preferably from

BUET. Candidates must beexpert in web

programming languages.

Create and maintain our webpage

efficiently.

Marketing

Executives

2 MBA from well reputed

university with major in

marketing. Experienced

Candidates are preferred.

Help the business level manager(CEO) in

marketing plan and execution.

General

Accountant

1 ACCA part 2 qualified

accountants with at least

3years of experience.

Responsible for creating all the necessary

accounting related documents.



42

Human Resource

manager and 2

Trainee.

1+2 MBA from well reputed

university with major in

HRM. Experienced

Candidates are preferred;

The trainee has to be a

Fresh BBA(HR) graduate

from a reputed university.

Manager is responsible for HR planning

and strategy.

The trainee is hired on contract of 1 year.

She/he is responsible for assisting the

manager with HR planning. If she/he can

show good performance, job will be made

permanent.

Front-Desk

Executive

1 A female candidate who is

smart and good looking.

She must be fluent in

English. The candidate is preferable A ‗level passed.

Welcome guests and hold inquires via

phone.

Factory

Supervisors

5 BBA from a reputed

university with at least 2

years of experience as a

production level managers.

-Work in the factory. Supervise and

control the publishing of our tabloid.

Workers 15 No educational

qualification. Must be at

least 21 years of age.

Run the factory equipment used for

publishing magazines.

Drivers 3 Must possess driving

experience of at least 10

years.

Undertake long journeys.

Hard working.

Guards 5 We will recruit guards

from external sources like

any Security company.

Security purpose.



43

Forecasted no. of Employees and their salary structure for the first 5 years(g=25%)

Designation Year 1 Year 2 Year 3 Year 4 Year 5

CEO(1) Annual Basic

salary=Tk.960,

000 Festival

bonus=Tk.10,0

00

Total annual

salary=970,000

New annual

basic

salary=Tk.1,2

00,000. New

Festival

bonus=Tk.12,

500

Total annual

salary=121250

0

New annual

basic

salary=Tk.

1500,000. New

Festival

bonus=Tk.15,6

25

Total annual

salary=1151562

5

New annual

basic salary=Tk..

1875000.New

Festival

bonus=Tk.19532

Total annual

salary=1894532

New annual

basic

salary=Tk..

2343750.New

Festival

bonus=24415

Total annual

salary=236816

5

Senior Journalists Number=2

Total annual

basic salary of

both=1,200,00

0 .Total

Festival bonus

for

both=Tk.20,00

0

Total annual

salary=12,020,

000

Number=2

Total annual

basic salary of

both=1,500,00

0 .Total

Festival bonus

for

both=Tk.25,00

0

Total annual

salary=152500

0

Number=2

Total annual

basic salary of

both=1,875,000

.Total Festival

bonus for

both=Tk.31250

Total annual

salary=1906250

No.=2,Total

annual basic

salary of

both=2,343,750.

Total Festival

bonus for

both=Tk39,063

Total annual

salary=382,813

No.=2,Total

annual basic

salary of

both=2929688

.Total Festival

bonus for

both=Tk48829

Total annual

salary=297851

6

Junior journalists Number=4,

Total annual

basic salary of

the

4=1,200,000

Festival bonus

for the 4

journalists=Tk.

20,000.

Number=4,

Total annual

basic salary of

the 4=1,500,00

Festival bonus

for the 4

journalists=Tk

.25,000

Number=4,

Total annual

basic salary of

the 4=1,875,00

0.Festival

bonus for the 4

journalists=Tk.

31,250

Number=4, Total

annual basic

salary of the

4=2,343,750.Fest

ival bonus for

the 4

journalists=Tk.3

9,063

Number=4,

Total annual

basic salary of

the

4=2,929,687.F

estival bonus

for the 4

journalists=Tk

.48,828



44

Total annual

salary for the

junior

journalists=1,2

20,000

Total annual

salary for the

junior

journalists=1,5

25,000

Total annual

salary for the

junior

journalists=1,1,

906,250

Total annual

salary for the

junior

journalists=1,1,2,

382,813

Total annual

salary for the

junior

journalists=2,9

78,515

Website

programmer/Designer

Number=1.T\a

nnual basic

salary=300,000

. Festival

bonus=Tk.5,00

0.Total annual

salary=305,000

Number=1.T\a

nnual basic

salary=375,00

0. Festival

bonus=Tk625

0Total annual

salary=381,25

0

Number=1.T\an

nual basic

salary=375,000.

Festival

bonus=Tk.5,00

0.Total annual

salary=476562

Number=1.T\ann

ual basic

salary=585,937.

Festival

bonus=Tk.9766.

Total annualsalary=595703.

Number=1.T\a

nnual basic

salary=732422

Festival

bonus=Tk.122

07Total annual

salary=732422

Marketing Executives Two marketing

executives

each receiving

a salary of

Tk.25,000/mon

th. The totalannual salary

is subjected to

a tax rate of

15%. Festival

bonus=Tk.5,00

0.

Same as year

1. The total

annual salary

is subjected to

a tax rate of

15%. Festival bonus=Tk.5,0

00.

Upon good

performance

,Increase salary

to 30,000. The

total annual

salary issubjected to a

tax rate of 15%.

Festival

bonus=Tk.5,00

0.

Same as year 3.

The total annual

salary is

subjected to a tax

rate of 15%.

Festival bonus=Tk.5,000.

Hire 2 more

marketing

executives.

Increase salary

to Tk.40,000.

The totalannual salary

is subjected to

a tax rate of

25%.Festival

bonus =

Tk.15,000

General Accountant(1) Number=1.Tot

al annual basic

salary=600,000

. Festival

bonus=Tk.100

00

Total=610,00

Total=381,250 Total=476562.5 Total=595703 Total=595703

Human Resource Number=1.tota Total=612500 Total=765,625 Total=957,031 Total=119628



45

manager l basic

salary=480,000

0. Festival

bonus=Tk.100

00

Total=490000

9

Management trainee Number=2

Total basic

salry annually

for

both=408,000

Total basic

salry annually

for

both=510,000

Total basic

salry annually

for

both=637,500

Total basic

salary annually

for

both=637,500.

Total basic

salary

annually for

both=637,500

Factory Supervisor Number=1

supervisors ,

total basic

salary=

Tk.240,000.

Festival

bonus=Tk.5,00

0.

Total salary

annualy=245,0

0

Total salary

annualy=306,2

50.

Total salary

annualy=306,25

0.

Total salary

annualy=382812

Total salary

annualy=4785

16

Gaurds(5),Drivers(3),

Workers(15).

Total basic

salary=276000

0. Festival

bonus=Tk.552,

000

Total salary

annualy for

all=3312000

Total salary

annualy for

all=4140000

Total salary

annualy for

all=5175000

Total salary

annualy for

all=6468750

Total salary

annualy for

all=8085937.5

Front Desk Executive Number=1.

Total basic

Total=302500 Total=375125 Total=472656 Total=590820



46

salary=240,000

Bonus=2000

Total=242000

Recruitment :-

Recruitment is the process of attracting sufficient individuals just in time with appropriate

qualification and encouraging them to apply for jobs. (Skript Human Resource Management,

n.d.)

Identifying productive sources of applicants and using suitable recruitments methods are

essentials to maximize recruiting effectiveness and efficiency. (Skript Human Resource

Management, n.d.)

There are alternatives to recruiting such as outsourcing but we will not go for it.

Recruitment sources:-

Initially we go for some internal recruitment sources. Internal recruitment sources consist of a

recommendation from a current employee regarding a job applicant. As we are five partners

from a good background each of us will recruit some potential employees by referrals.

If or internal search is not enough we will go for external searches. These efforts include:-

Advertisements:-We will advertise the search for our white collar employees in newspaper such

as The Daily Star, The Independent and all other English newspapers in Bangladesh. Such

newspaper is mainly read by educated persons. So we hope to get a good feedback from it.

Universities and colleges:-Universities are an excellent source of potential employees.Universities offer opportunities for recruiting recent graduates. We will hire fresh MBA and

Journalism graduates from reputed universities like NSU,IBA and DU.

Cyberspace Recruiting:-Now-a-days this is very important form of recruiting. People are

spending more time over the internet. Many potential candidates rely on internet job sites for

searching for their desired jobs. Facebook is also an essential source for adverting our job



47

vacancy over the internet. Therefore we will publish our vacant post over some reputed job

searching websites and also advertise via Facebook.

Selection:-

The purpose of the selection is to identify and employ the best qualified individuals.Selection is

the process of choosing from a group of applicants the individual best suited for a particular

position.

Figure:- The Selection Process. From:DeCenzo D.,Robins S.(2005). Fundamentals Of Human Resource

Management.

Initial

Completed

Em lo ment test

Comprehensive

Interview

Conditional job

offer

Background information ifrequired required

Medicalexamination(conditional

job offer made)

Permanent job offer

Reject Applicant



48

9.3 Organizational Structure

The pyramid above shows three levels of managers in our company.

The bottom line managers are the operational level managers. Their main purpose is to mainly

execute strategy. In our business operational level managers are front desk officer, factory

supervisors, junior journalists, & website programmer are the operational level managers.

Functional level managers are responsible for implementing the strategy in their own individual

units. In our business the functional level managers are the Marketing executives, General

accountant, Website programmer and HR manager.

The business level managers are the CEO‘s/president of the company. They are responsible for

strategy formulation. We won‘t hire any CEO for our business. As all of our partners have

excellent knowledge of business, so we will be working as the president of the company.

1. Business Level managers(strategy formulation)2.Functional level (strategy implement by individual

units)

3. Operational level(execution)



49

9.4 Compensation and benefits

Compensation is the total of all rewards which employees get in return for their services.

Direct financial compensation consists of the pay that a person receives in the form of wages,

salary, bonuses and commissions.

Indirect financial commissions are all financial rewards that are not included in direct

compensation. These are for example insurance and other programs for health,safety,security and

general welfare.

Nonfinancial compensation consists of the satisfaction that a person receives from the job itself

or from the psychological or physical environment in which the person works.

Figure:- The figure below illustrates the compensation and benefits process for our company.

Direct Financial compensation from our company includes wages, salaries and bonuses.

Indirect financial compensation from our company includes Health benefits.

Non-financial compensation in the job environment includes Appropriate Status, Comfortable

Working Conditions.

Com ensation

Financial Non-financial

Direct Indirect Job Environment



50

10. Risk analysis

Risk analysis helps to identify and manage potential problems that could undermine a business

project(Mind tools,n.d.).

Risk is made up of two things: the probability of something going wrong, and the negative

consequences that will happen if it does(Mind tools,n.d.).

The foreseeable barriers are:-

Financial – There might be stock market fluctuations, business failure interest rate

changes that will disrupt or business.

Project – Though we have forecasted our budget, yet we may go over it.Tasks may be

taken too long to complete, or we may experience issues with product or service quality.

Operational – A disruption to supplies and operations, loss of access to essential assets,or

failure in distribution may result in disruption in our project.

Reputational – Potential threat from loss of customer or employee confidence, or damage

to market reputation.

The unforeseeable barriers are:-

Political – Bangladesh is a politically unstable country. So a new government in the next

election can result in a change in tax rate and foreign influence, which may undermine

our project.

Technical – Technology is advancing fast. So a new emerge of technology may make us

behind competition. Moreover,cybercrimes are increasing in Bangladesh. Acyber-attack

in our computer systems may result in huge damage.

Natural - from weather, natural disasters, or disease.

Procedural - from failures of accountability, internal systems and controls; or from fraud.



51

Estimating risks:-

Once we have identified the risks we can calculate the estimated risk value by using the

following formula:-

Risk Value = Probability of Event x Cost of Event

Suppose the probability of high rate of strikes in year 2 is 0.70.And due to strikes the

estimated cost is Tk.1,000,000.

Therefore,

Risk value=0.70*1,000,000

=Tk.700,000

Managing risks:-

Once the risks are estimated, it is to be managed cost effectively. Sometimes it is sensible to

accept risks rather than using too many resources to eliminate it.

Risks can be managed in many ways. Some of the ways are mentioned below:-

According to the risk analysis, bring new resources to business if necessary.

If necessary reuse or deploy existing, improve existing methods and systems, changing

people's responsibilities, improving accountability and internal controls, , by improving

safety procedures or safety gear, or by adding a layer of security to your organization's IT

systems.



52

11. Financial Management Plan

11.1 Assumptions:

Assumptions regarding sales and costs:

1) The growth of the sales was assumed to be 25% from the year 2013.

2) We will be selling 50000 units @ 50 taka selling price per year

3) We have assumed 7% inflation in the years 2013, 2014, 2015, 2016.

4) The office rent will increase by 50,000 taka from the year 2014.

5)

We will increase our promotional expenditure 10% in each year.

6)

The hawker‘s incentive will be increased 5000 taka each year.

7) Trade promotion and distribution costs will be increased to 25000taka and 35000 taka

respectively in each year.

8) The agents‘ commission will be increased to 5000 taka each year.

Assumption regarding depreciation:

1) Depreciation is calculated on a straight line basis.

2) Depreciable life for office equipments is 5 years.

3) Depreciable life for printing press is 8 years

4) Depreciable life for factory is 50 years

Assumption regarding loan:

1) The amount of loan that will be taken is 3,802,500 (which is excess of our financing)

2) The interest rate charged will be 12%.

3) The loan will redeem in 5 years

4) Loan will be amortized in a straight line basis.



53

Assumption regarding initial investments:

1) Each partner will invest an amount of 8,000,000

2)

From the year 2014 the investors will receive some return based on the retained earnings.

11.2 The Financial Plan:

Our business will incur huge startup cost in the beginning for this reason it is better to safeguard

against all sorts of risks. The fixed assets like machinery and equipments will be the costliest and

we will make sure it is used effectively. Our main goal is to break even in at least 3 years. To

achieve this we will increase our sales to the maximum and we will promote our magazine

heavily in the beginning stages of the life cycle. Because we will incur huge costs in the

beginning year, we will not take a huge loan. We will take an optimal amount to finance our day

to day activities and we will keep some buffer cash at hand in case there is an emergency.

Though we do not have any eminent threat as our competitor in the local market; our main worry

is competitor threat in the international market, if we want to venture there. In order to sustain in

the long run we may strategically ally with other partners. We think that our ROA in the first two

years will not be very that attractive because of our staggering costs of assets; however in thelong run we are sure to be fruitful as our analysis shows that it is cash enriching investment

venture.



54

11.3 The Forecasted income Statement

Money & Market pro forma Income Statement

for the year ended Dec 31st 2012, 2013, 2014, 2015 Items 2012 2013 2014 2015 20

Sales revenue:

*Magazine sales 2,500,000 3125000 3906250 4882813 61035

Advertisement revenue (print media) 17,684,000 22105000 27631250 34539062.5 4317382

Advertisement revenue (online media) 1,300,000 1625000 2031250 2539063 31738

*Mobile subscription revenue (20tk weekly) 10,400,000 13000000 16250000 20312500 253906

Total Revenue: 31,884,000 39855000 49818750 62273438 778417

Cost Of Goods Sold (6.27%): 2,000,000 2498909 3123636 3904545 48806

Direct labor (1.57%) 500,000 625,724 782,154 977,693 1,222,1Direct material (3.13%) 1,000,000 1,247,462 1,559,327 1,949,159 2,436,4

Overhead (1.57%) 500,000 625,724 782,154 977,693 1,222,1

Gross Profit: 29,884,000 37,356,092 46,695,114 58,368,893 72,961,1

Operating expenses:

Administrating/salaries expenses (26.8%) 8546500 10681140 13351425 16689281.3 2086160

Office rent (3.8%) 1200000 1514490 1893112.5 2366391 29579

Promotional expenditure (31.4%) 10,000,000 12514470 15643088 19553859 244423

Incentive to Hawker (.157%) 50,000 62,572 78,215 97,769 122,2

Utility Expenses (16.3%) 5,200,000 6496365 8120456.25 10150570 126882

Trade Promotion 500,000 500,000 525,000 550,000 575,0

Distribution Cost 2,500,000 2,535,000 2,570,000 2,605,000 2,640,0

Agent Commission 260,000 265,000 270,000 275,000 280,0

*Depreciation Exp (machinery, equip.) 2,075,000 2,075,000 2,075,000 2,075,000 2,075,0

*Depreciation Exp(factory) 200,000 200,000 200,000 200,000 200,0

Total operating expense: 30,531,500 36,844,037 44,726,297 54,562,871 66,842,3

profit/loss from operations: -647,500 512,054 1,968,818 3,806,022 6,118,7

Interest expense (Loan Payment) 1340261 1340261 1340261 1340261 13402

Net profit/loss before tax -1,987,761 -828,207 628,557 2,465,761 4,778,5

Tax expense (37.5%) 0 0 235709 924660 17919

Net Profit After Tax -1,987,761 -828,207 392,848 1,541,101 2,986,5



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Operating Profit Margin:

The percentage of sales revenue that gets 'returned' to the company as net profits after all the

related costs of the activity are deducted is called operating profit margin. In our case, we are

having a negative OPM in the first year. because we have incurred some huge startup costs. If we

see the OPM from 2014 we can see a positive growth in the future which tells us that we have

successfully increased sales while increasing our gross profit as well.

Net Profit along the years:

Net profit margin is mostly used for internal comparison. Individual businesses' operating and

financing arrangements vary so much that different entities are bound to have different levels of

expenditure, so that comparison of one with another can have little meaning. A low profit margin

indicates a low margin of safety, higher risk that a decline in sales will erase profits and result ina net loss, or a negative margin. Profit margin is an indicator of a company's pricing strategies

and how well it controls costs. Due to our beginning years losses we are having a negative NPM,

which is not uncommon for business that are at first stage. We have successfully increased our

NPM from year 2014 showing that we are controlling our costs more efficiently.

-3000000

-2000000

-1000000

0

1000000

2000000

3000000

4000000

2012 2013 2014 2015 2016

Net profit

Net profit



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11.4 Our Forecasted Cash Flow Statements Money & market pro forma cash flow statement

For the year ended 2012, 2013, 2014, 2015

2012 2013 2014 2015

cash flow from operating activities

net profit -12458761 -485335 12349027 33116099 6699

add: depreciation 2275000 2275000 2275000 2275000 227

accrued expenses 223188 55797 69746 87183 10

accounts payable 159420 39855 49819 62273 7

wages payable 207246 51812 64764 80955 10

less: changes in inventory -398,550 -99638 -124547 -155684 -19

less: changes in A/R -3,188,400 -797,100 -996,375 -1,245,469 -1,55

Net cash form operating act -13,180,857 1,040,391 13,687,434 34,220,359 67,80

cash flow from investing activities

investment in fixed asset -23,000,000 -500,000 -500,000 -500,000 -50

Net cash provided by investing activities -23,000,000 -500,000 -500,000 -500,000 -50

cash flow from financing activities 10554790 17727619 15419999 12426094 1753

net increase or decrease in cash -25,626,067 18,268,010 28,607,433 46,146,453 84,83

cash at beginning period 0 56000 58000 65000 6

cash at end of period -25,626,067 18,324,010 28,665,433 46,211,453 84,90



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Yearly Cash outflow/inflow:

In year 1 we have cash out flow, due to plans for company growth or due to a planned increase in

receivables or inventories. In year 2, cash inflow is seen. Cash inflow rose gradually in year 3,4

and 5.In year 5 we see a healthy cash inflow-which shows positive trend. Positive trends in cash

flow may encourage owners to consider long-term financing as an aid to growth and increase

their comfort level concerning the company‘s ability to generate cash for repayment. Strong cash

flow will also make it easier to acquire financing and to negotiate with lenders from a position ofstrength.

-40,000,000

-20,000,000

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

2012 2013 2014 2015 2016

Cash flow

Cash flow



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11.5 Our Forecasted Balance Sheet

Money & market proforma balance sheet

for the year ended Dec 31st 2012, 2013, 2014, 2015, 2016

ASSETS 2012 2013 2014 2015 2016

Fixed Assets:

Factory (31.4%) 10,000,000 12,514,470 15,643,088 19,553,859 24,442,324

machinery (22%) 7000000 8768100 10960125 13700156.25 17125195.31

office equipment(18.81) 6000000 7496726 9370907 11713634 14642042

Less: accumulated depreciation 2,275,000 2,275,000 2,275,000 2,275,000 2,275,000

Total fixed assets 20,725,000 26,504,296 33,699,119 42,692,649 53,934,562

Current Assets:

Cash & cash equivalents (.175%) 56000 69746 87183 108979 136223

Accounts Receivables (10%) 3188400 3985500 4981875 6227344 7784180

Inventories (1.25%) 398550 498188 622734 778418 973022

total current assets: 3642950 4553434 5691792 7114740 8893425

Total Assets: 24,367,950 31,057,729 39,390,912 49,807,389 62,827,987

Liabilities & Owners equity: 1033739 1756896.25 2727656.313 4162681.641 5506778

current liabilities:A/P (.5%) 159420 199275 249094 311367 389209

Accrued expenses (.7%) 223188 278985 348731 435914 544893

Wages payable (.65%) 207246 259058 323822 404777 505972

Other liabilities 2019357 2059220 2042489 1800000 1946574

Total current Liabilities: 2609211 2796538 2964136 2952059 3386647

Long term Liabilities:

loan payable 3203949 2533572 1782750 941829 1345

Notes payable

Total Liabilities: 5813160 5330110 4746886 3893888 3387992

Owner's Equity:Share holder capital 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000

investment 10554790 17727619 15419999 12426094 17532448

retained earnings 0 0 11,224,027 25,487,407 33,908,892

Total Equity: 18,554,790 25,727,619 34,644,026 45,913,501 59,441,340

Total liabilities and owner's equity: 24,367,950 31,057,729 39,390,912 49,807,389 62,829,332



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Net Working Capital:

NWC is a measure of both a company's efficiency and its short-term financial health. Positive

working capital means that the company is able to pay off its short-term

liabilities. Negative working capital means that a company currently is unable to meet its short-

term liabilities with its current assets (cash, accounts receivable and inventory). In our case we

see a gradual growth of NWC which means that our business is highly solvent and aggressive in

the future.

-40,000,000

-20,000,000

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

2012 2013 2014 2015 2016

Cash flow

Cash flow



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11.6 Capital Budgeting Techniques for Feasibility

For any investment project the capital budgeting techniques ensures that the project we are doing

is feasible or not. We have calculated NPV, IRR and Profitability Index (PI) to make sure of our

feasibility.

WACC calculation:

WACC calculation:

2012 2013 2014 2015 2016

weight of debt(Wd) 0.13148209 0.081576 0.045258 0.018909 2.141E-05

cost of debt (Kd) 0.418315335 0.529001 0.751794 1.423041 996.47658

(1-T) 0.65 0.65 0.65 0.65 0.65

weight of equity (Wc) 0.86851791 0.918424 0.954742 0.981091 0.9999786

*cost of equity (Kc) 0.1485 0.1555 0.1625 0.1695 0.1765

WACC 0.164725543 0.170865 0.177262 0.183786 0.1903619

Average WACC value 18%

*cost of equity calculation

Kc=Rf+ B(Rm-Rf) Rf=.075 Rm=.18 B=.70

Kc 0.1485 0.1555 0.1625 0.1695 0.1765



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Free Cash flow Calculation:

FCF calculation:

2012 2013 2014 2015 20

EBIT 30,531,500 36,844,037 44,726,297 54,562,871 66,842,3

(1-.375) 0.625 0.625 0.625 0.625 0.6

EBIT(1-T) 19082187.5 23027523.34 27953935.43 34101794.29 41776461

add: Depreciation 2,275,000 2,275,000 2,275,000 2,275,000 2,275,0

less: capital

expenditure:

-23,000,000 -500,000 -500,000 -500,000 -500,0

less:changes in working

capital

0 -723157.25 -970760.0625 -1435025.328 -1344096

FCF -1,642,813 24,079,366 28,758,175 34,441,769 42,207,3

NPV calculation:

The difference between the present value of cash inflows and the present value of cash outflows.

NPV is used in capital budgeting to analyze the profitability of an investment or project. If the

NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the

project should probably be rejected because cash flows will also be negative

Initial Investment = 23,000,000 WACC: 18%

FCF1 -1,642,813

FCF2 24,079,366

FCF3 28,758,175

FCF4 34,441,769

FCF5 42,207,365



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PV of all cash flows are calculated as: 69,618,235

Therefore, NPV = PV of all cash flows- Initial Investment

= 69,618,235 – 23,000,000

= 46,618,235

Since the NPV is positive so the investment should be undertaken.

IRR calculation:

The discount rate often used in capital budgeting that makes the net present value of all cash

flows from a particular project equal to zero. IRR when greater than the opportunity cost of

investment (WACC), then the project should be undertaken.

Here, NPV = 0 = Ʃ cash flows/(1-IRR)n - initial cash outflow

Using EXCEL we have found out that the IRR is equal to 64%.

Since IRR 64%) is greater that WACC (18%) so the project is acceptable.

Profitability Index calculation:It is an important measure in determining the profitability of an investment.

PI = 69,618,235 / 23,000,000

= 3.02

Since PI is greater than 1, so we should accept this project



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Economic Value Added (EVA):

A measure of a company's financial performance based on the residual wealth calculated by deducting cost of capital from its operating profit (adjusted for taxes on a cash basis).

The formula for calculating EVA is as follows:

= Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital)

Economic value added(EVA)

2012 2013 2014 2015 2016

NOPAT -1987761 -828207 392847.9 1541101 2986572.9

invested capital 10554790 17727619 15419999 12426094 17532448

WACC 0.164725543 0.170865 0.177262 0.183786 0.1903619

EVA -3726405 -3857235 -2340526 -742637 -350937

Market Value Added (MVA):

A calculation that shows the difference between the market value of a company and the capital

contributed by investors (both bondholders and shareholders) is called MVA. In other words, it is

the sum of all capital claims held against the company plus the market value of debt and equity.

Calculated as: MVA = (Market Value of LT Debt + Market Value of Equity) - Invested Capital



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Breakeven Analysis:

An analysis to determine the point at which revenue received equals the costs associated with

receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the

amount that revenues exceed the break-even point. This is the amount that revenues can fall

while still staying above the break-even point.

This graph was formed using a break even calculator. (http://fast4cast.com/break-even-

calculator.aspx)



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12. Long Term Sustainability

Corporate sustainability is a business approach that creates long-term consumer and employee

value by not only creating a "green" strategy aimed towards the natural environment, but also

taking into consideration every dimension of how a business operates in the social, cultural, and

economic environment. Also formulating strategies to build a company that fosters longevity

through transparency and proper employee development.

Corporate sustainability is an evolution on more traditional phrases describing ethical corporate

practice. Phrases such as corporate social responsibility (CSR) or corporate citizenship continue

to be used but are increasingly superseded by the broader term, corporate sustainability. Unlike

the other phrases that focus on "added-on" policies, corporate sustainability describes business

practices built around social and environmental considerations. (Wikipedia, 2012)

Strategic Principles For Corporate Sustainable Development:

Transparency:

Deals with the idea that by having an engaging and open environment within the company as

well as the community will improve performance and increase profits. It is an open culture that

promotes employee involvement in regards to the innovation and creative processes. Reaching

out to the community creates a much bigger team, is extremely cheap, and provides evaluation

from all angles. We are looking inward and realizing changes that must be made to fulfill

environment needs such as energy efficiency, limiting product waste, and designing innovative

products.

Employee Development

People are the most important renewable resource and therefore, are the strongest asset to our

organization. A strong development program could be the underlying factor for a company's

success or failure. Employees are the concrete foundation for the company and must be

thoroughly analyzed and evaluated to tap into their true motivations and desires. Employees must

http://en.wikipedia.org/wiki/Corporate_transparency

http://en.wikipedia.org/wiki/Corporate_social_responsibility

http://en.wikipedia.org/wiki/Corporate_social_responsibility

http://en.wikipedia.org/wiki/Corporate_transparency



67

work towards improvement rather than perfection. Programs should be implemented that rewards

star performers, fosters the creative learning process, and provides comprehensive training and

evaluating.

Resource Efficiency

We must adapt to this rapidly changing environment by being prepared to change and implement

new creative ideas related to sustainability. We should not throw away old products and

materials, but rather be prepared with upgraded technology that can transform the product. New

solutions that improve recycling and waste redirecting can ultimately reduce costs and increase

profits.

13. CONCLUSION

Money & Market is one of the few business related newspapers in Bangladesh with its facilities

in Ganderia. We will produce 50,000 copies of magazine in every week initially. To meet our

project we will have Tk. 40,000,000 as our capital. Which was contributed by five partners with

Tk. 80,00,000 each. However, due to the purchase of factory and machinery we will incur loss in

the first two years of our commencement but we will eventually overcome this loss from the

third year as we will increase our revenue by 30%. we will tend to grab 30% of the market share

within two years of our commencing. Our startup-marketing budget is Tk. 64,00,000. Our ROA

ratio shows -55%, -1.9%, 41%, 90%, and 144%. In the first year we purchased machinery and

factory premises so the figure shows a drastic negative figure. However, this trends to a positive

figure in the following year. Our ROE ratio is -67%, -2.3%, 48%, 99%, and 158% in the

respective year. ROE ratio suggested that we could not generate profit in the first year and

second from the money shareholders have invested. However, from the third year we were able

to earn satisfactory profit. Our ROI ratio is -57%, -2.02%, 71%, 154%, and 253% respectively.

The ROI ratio suggested that the efficiency of our investment in the first year was not

satisfactory. However, we could overcome it in the following years. Since, we have very high

ROI from the third year we have considered this project to be successful.



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