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ENTREPRENERIAL FINANCE - BUSINESS PLAN

NUTROLOGIC
The organic way to a healthier you
The food you eat can either be the safest and most powerful form of medicine or the slowest form of poison. Ann Wigmore

BUSINESS PLAN NUTROLOGIC

The organic way to a healthier you

Submitted By: Nighat Zahra Salman Sikander Memoona Altaf Rehan Ejaz MBA - V - B Submitted To: Mr. Burki

Table of Contents
EXECUTIVE SUMMARY .......................................................................................................................... 4 1. BUSINESS OVERVIEW ......................................................................................................................... 5 1.1. Business Description .......................................................................................................................... 5 1.2. Need for Nutrologic Why Focus on Nutrition?............................................................................... 5 1.3. Business Vision/History..................................................................................................................... 6 1.4. Ownership structure ........................................................................................................................... 7 2. PRODUCT/SERVICES ............................................................................................................................ 8 2.1. Description ......................................................................................................................................... 8 2.2. Research and Development ................................................................................................................ 9 2.3. Service Quality................................................................................................................................... 9 3. INDUSTRY /MARKET OVERVIEW ............................................................................................................. 10 3.1. Market Size Growth & Trends ......................................................................................................... 10 3.2. Customer Segments ......................................................................................................................... 11 Nutrologic will target following groups or segments of potential customers: ........................................ 11 3.3. Consumer Demographics ................................................................................................................. 11 3.4. Industry Participants / Competition ................................................................................................. 11 3.5. Marketing & Promotion Strategy..................................................................................................... 12 3.6. Pricing Strategy ................................................................................................................................ 13 4. OPERATIONS & PERSONNEL PLAN ................................................................................................ 14 4.1. Office Location & Monthly Rent ..................................................................................................... 14 4.2. Equipment Required & Office Dcor .............................................................................................. 14 4.3. Personnel Required/Expenses .......................................................................................................... 15 5. FINANCIAL PROJECTIONS ........................................................................................................................ 16 5.1. Start-up Financing............................................................................................................................ 16 5.2. Profit & Loss Statement ................................................................................................................... 18 5.3. Balance Sheet ................................................................................................................................... 19 APPENDIX ................................................................................................................................................. 21

EXECUTIVE SUMMARY
Nutrologic will be provide complete consultancy in areas of nutrition and assist clients in making healthy eating choices. It will be located in Blue Area Islamabad. Nutrologic will provide services such as total client assessment, identification of eating pattern, cooking patterns, assistance in weight loss regime, guidance to diabetic, Heart related patients etc. who have specialized food requirement. It will focus on helping and guiding our clients to adopt a healthier lifestyle rather than focus on Fad diets that have less impact on our overall health in the longterm. In recent years there has been focus on organic food and healthier eating choices worldwide, moreover, there is a rising trend of heart related diseases in Pakistan owing to the fact that our dietary choices leave much to be desired. So keeping in view the current scenario and prevalence of dining out especially at fast-food joint sin urbanites is an open invitation to future Heart risks and other health complications, So there is need for services like Nutrologic that brings healthier eating options to people while bring a balance in their eating preferences. It will be co-owned as a partnership by following members: It will be started with Rs. 400,000 seed financing obtained through family and friends. Nighat Zahra Salman Sikander Rehan Ejaz Memoona Altaf 25% 25% 25% 25%

This plan includes sections on business overview, Nutrologics services, Industry/Market Overview, Operations/Personnel overview & Financial Projection.

1. BUSINESS OVERVIEW
1.1. Business Description
Nutrologics focus is on helping our potential customers in making the right choices when it comes to nutrition. The business focuses on providing professional consultation and teaching of healthy cooking techniques and recipes to our customers. To accomplish this purpose only PNDC (Pakistan nutrition and dietetic society) certified nutritionist will be hired, moreover for cooking, in-house cooks will be hired and trained with help of our nutritionists and number generic recipes will be developed to everyday nutritional purpose. For special individual cases person specific menu will be created based on the needs of the customer or patient.

1.2. Need for Nutrologic Why Focus on Nutrition?

Diet plays an important role in the maintenance of good health, stamina, prevention and cure of diseases. Good health can be preserved and promoted only by the right kind of food and on the flip side wrong nutritional choices are an open invitation to disease. Thus, therein lay our opportunity to provide services that helps our customers to not only maintain body weight, health and prevent future diseases such as cardiovascular diseases. According to Dr Sania Nishtar (President and Founder of Heartfile, Pakistan) - To prevent cardiovascular disease, countries need adequate health systems. But adequate health systems do not just appear out of nowhere; they require a lot of inputs. One important prerequisite is adequate health information. In other words, countries first must know what is ailing their people. Are they too heavy? Are they too physically inactive? Do they smoke too much? Nutrologic focuses on bridging this gap by developing individual profiles of its customers and guiding them in making right choices that do not jeopardize their health or their familys health by and large. According to the national nutrition survey (2011), around 60% of Pakistans total population is facing food insecurity. The results of the survey are termed by health experts as alarming, and indicate a significant decline in the nutritional status of the people of the country over the past decade. The survey took a sample of 30,000 households nationwide covering all the provinces and found that around 57% of the households face food insecurity. Furthermore, 50% of the women and children are found to be malnourished. The report states that iron deficiency

(anemia) and vitamin A deficiency remains widespread in the country; however, iodine deficiency rate had reduced during the last decade. These statistics are indicative of the underlying fact that various nutrients are essential to build up and maintenance of healthy cell tissues, glands and organs in the human body. Without lack of specific nutrients the body is not able to perform any of its functions, be they metabolic, mental physical or chemical. Furthermore, there is strong need to not only create smart health solutions for our community at large but also balance the need for making adequate revenues to survive as a business venture.

1.3. Business Vision/History

Nutrologic (Nutrition + Logic) is a business idea that aims to guide and help customers and community at large in making healthy nutritional choices. Our Vision is to provide the services in a professional manner by a unique focus on the atmospherics of our consultation place as well. The consultation area will be designed keeping in mind the natural and organic trend such as use of light white colors on walls, full of natural lighting, potted plants to give it an appropriate feel that matches with the business itself. Our mission is to:

Give guidance, clarity and inspiration to people to listen to their bodies

1.4. Ownership structure

Nutrologic will operate as a partnership. It comprises of four members or partners who will provide seed financing for the business. Business will be financed at developmental stage with the help of equity provided by the members via friends and family contacts. Profit/Loss will be shared according to capital invested and the range of services provided to the business. The partnership deed will be prepared with the legal aid of Advocate High Court, Mr. Imran Mumtaz Malik (contact # 0300 52060181 & 0315 5206181).Details of ownership share is given below: Nighat Zahra Salman Sikander Rehan Ejaz Memoona Altaf 20% 30% 35% 15%

2. PRODUCT/SERVICES
2.1. Description
Nutrologics services work off the idea that food can be used to help the body fight disease. Our focus will be on considering the quality of food, clients likes and dislikes, their eating habits and the availability of food; as well as we will also take into consideration the lifestyle factors. Our Philosophy is:

We really ARE what we eat, so isnt it worthwhile to take a look at what we are putting into our body?
2.2. Initial Appointments & Follow-up Appointments: Initial appointments are 60 minutes and follow-up appointments are 30 minutes. The initial assessment will cover following basic areas but it can vary according to clients questions:

Dietary assessment Weight and height measurements and Body Mass Index calculation Assessment of how clients lifestyle, including meal planning, shopping, cooking habits and other factors influence their eating behaviour

Development of a personal diet plan with SMART* goals

Further consultations of 30 minutes will offer continuing support and ongoing advice to help the client to achieve the previously set goals. Our nutritionist will be able to help our clients in:

Identifying dangerous dietary behaviors that may contribute to the development of an eating disorder.

Maintaining a healthy, balanced eating pattern while coping with the pressures of life ( student life, work life, stress of running household etc)

Designing a nutritious meal plan within limited financial resources

Making healthy food selections while dining at a restaurant.

2.3. Menu designing & Healthy Shopping Assistance: The menu will be designed keeping in mind the nutrition and dietary needs of the client but also to create a generic menu which is based on healthy cooking techniques such as steaming, grilling etc. Moreover, inclusion of multi-nutrients in diet so that the clients have a healthy health. Our focus will be on helping the clients adopt a healthy lifestyle rather than adopt a Fad diet for a small period of time. To make things easier for our clients, recipe cards will be given to the clients, which will give detailed directions for making the particular recipe. Furthermore, our nutritionist will also help (as per the client needs) in making healthy choices while shopping. For that purpose, clients will be given directions as to what products or brands to buy that will not compromise their health.

2.2. Research and Development

In recent years, there has been steady rise of Fast Food eateries in Pakistan and especially major cities of Pakistan. These eateries provide calorie ridden food that is deep fried and is also linked to cardiovascular and many other health problems. Furthermore, even in Pakistan Heart diseases and stress related diseases are on rise and are also linked to bad food choices. Therefore, there is need for creating awareness of healthy food in our community. In order to understand the public reaction to such a business idea, we conducted a small survey of following areas for introducing our business. The surveyed area is: F-sectors, G-sectors, BahriaTown, and Sadder area in Rawalpindi.

2.3. Service Quality

As Nutrologic is concerned with providing services by and large, service quality becomes imperative to ensure the satisfaction of our clientele. In order to do that our reception staff and management staff will be trained to help our clients in professional manner and our values will be:

Be honest, be courteous and kind to customers and respond to their problems as if they are your problems

3. INDUSTRY /MARKET OVERVIEW

3.1. Market Size Growth & Trends
According to a survey known as Global trends in Healthy eating, conducted by Nielsen Company in 2010, it is stated that in Middle East, Africa & Pakistan, time and expense associated with healthy eating pose the lowest barriers to this region in which consumers find themselves short on healthy eating options (31%) and are confused as to which foods are really healthy (30%). As a result, they are the least likely of any other regions to select organics because they are healthy, to avoid toxins and bypass genetically modified organisms. However, consumers in this region are the most likely to select organics because they taste better (59% vs. global average of 45%). They are also the most likely of consumers in any other region (29%) to select products that come from farmers markets when grocery shopping. The survey highlights the need for not only creating awareness for healthy food options but also providing a proper service that helps the clients in their everyday decisions regarding eating, food preparation etc. In Pakistan, by and large very little emphasis is paid on nutrition and the general trend is on the taste of food. The challenge over here is to come up with menus that are healthy but at the same time are not high on calorie side. Furthermore, the taste needs to appeal to our customers and it is general myth that healthy food tastes bad and it is boiled food all the time. Since, this healthy food market is not aggressively targeted from commercial perspective, our focus is to not only educate our clients but also help them in achieving a healthy lifestyle. Our clientele will be from Rawalpindi and Islamabad especially more upscale sectors and areas as these are the clients that can afford such services. All it needs is to create fun, healthy menus that nicely fit in with consumers eating preferences. According to the 1998 census, population of Islamabad was 800,000 but up till now it has more than doubled according Dawn news, 2011. Moreover, there is insignificant increase in the number of houses in developed resident sectors like F-6, F-7, F-8, G-6, G-7, G-8, and G-9. It pinpoints to the fact that there is considerable market potential, if proper awareness can be raised through effective marketing program.

3.2. Customer Segments

Nutrologic will target following groups or segments of potential customers:

Seniors:

They have several health issues like, diabetes, heart risk etc.

Housewives/Working wives:

As they usually making family nutritional decisions

Executives (25 to 60 years):

Lifestyle of working people is usually busy and full of stress that also leads to eating Fast food and unhealthy dining choices.

3.3. Consumer Demographics

Initially, our clientele will be those people who are health conscious and living in upscale areas of twin cities as these individuals have income level that allows them to avail such services and secondly it is more fashionable in these socioeconomic strata to be more health conscious. It is evident from the spa services, aerobics services that these segments consume. So, it makes logical sense to target this clientele.

3.4. Industry Participants / Competition

In both cities, nutritionist services are not that common even in Hospitals, such as in Shifa Hospital there is a separate department for Nutrition, which is run by Consultant, Ms. Rezzan Khan. Many other Hospitals do not have a separate department for it and not certified nutritionist on panel. If there are such services they are more in the form of private clinics about which not much is known to general public at large. There is therefore need to create such just like in western countries where nutritionist and dieticians run private practice or in the form of LLCs. In this case one such organization that is working in Pakistan is PNDC (Pakistan nutrition and dietetic society) and other is NHC (Nutritional health consultants, Karachi). NHC focus on individual consultations and also works in creating awareness. They also help in clinical setups and hiring professionals. Our focus will be to have those nutritionists in panel who have an

experience and also are certified members of PNDC so that proper professional guidance could be provided to our clients.

3.5. Marketing & Promotion Strategy

Advertisement is always compulsory for every kind of business and as well as we also need to advertise in our project.

Radio

We talked to Mr. Najib Ahmed (Director) Power Radio FM 99 he told us advertisement cost in his station is PKR.600 per minute. If advertisement time is less then minute then there would be fewer charges. Our advertisement duration approximately would be 20 second they agreed to charge PKR 200 per 20 seconds, no minimum required, and flat rate is same all over the year. For City Fm89 the contact info is: (051) 2606121 to 23.The budget we have set for this purpose is around 700 1000 Rs at both radio stations per single advertisement. Newspapers

Thirdly we will advertise through The News & Dawn Newspaper as these are the most widely read newspaper and also carries a local edition. We will give the code of advertisement in jang newspaper For 468 x 60 (Full Banner) ad format. The single ad costs will range from 500 Rs 1000 Rs. We have kept a margin so that rate fluctuations will cover any changes. For placing ads in dawn Newspaper: DAWN NEWSPAPER ISLAMABAD Mr. Asim Effendi, Senior Manager Marketing Tel: (051) 2202701 5, 2891506 Email: asimeffendi@dawn.com

THE NEWS - ISLAMABAD Mr. Najib Ahmed Tel: 051-2102899; Cell: 0345-5299999

Banners

We will order banners from Shafiq Sign Services. The cost of 2 x 4 feet banners is Rs150 per banner. And we ordered 200 banners. The cost of banners is Rs 30,000. Contact detail is as follow: Muhammad Shafiq Butt Ph # 5550948 Cell # 03005019090

3.6. Pricing Strategy

Our services are primarily based on consultations, menu preparation, shopping guidance and tips and other nutritional blood tests, Lipid tests, Vitamins tests (Individuals will have them carried out in private labs like BIOCARE labs, Islamabad). Our Basic Consultation fee per single session will vary from 1500 Rs 2000 Rs. If additional services are availed than charges can vary from 2500 Rs 3000Rs. These consultation rates are based on standard rates in other Hospitals such as in Ali Medical Consultation fees. Our pricing strategy will be based on standard market rates.

4. OPERATIONS & PERSONNEL PLAN

4.1. Office Location & Monthly Rent
As most of our clientele is located in Islamabad, our office will also be located in Islamabad. Our office will be at following location at Rs 150,000 per month:

4.2. Equipment Required & Office Dcor

The equipment required is the standard equipment as any office requires, but since our services are related to lifestyle factors the office dcor will also exhibit that aspect of our venture. The minimum criterion is:

Office Desks Reception area Telephone lines Lighting Equipment Split AC Heating Equipment for Winters Chairs for waiting area Office Chairs Cupboards for Books and Client information Computers ( For our panel Nutritionist and reception area) Kitchen utensils & cutlery etc. Refrigerator Wall Painting etc. Potted Plants & watering Buckets Stationeries TV in reception area Cable TV Charges

For office dcor, professional services will be hired:

Mr. Imran Rathore - Wallgrace Trading Company Off. # 3, 3rd floor Paris Plaza Commercial Market, Rawalpindi. Phone: 051-7152848; Cell: 0333-5111724, 0321-5111724

4.3. Personnel Required/Expenses

Following Personnel will be required to run the business: Nutritionist Initially, one nutritionist will be hired by placing an ad in newspaper or preferably through using personal contacts of the business partners. Care will be taken to make sure that they are PNDC certified nutritionist and moreover their degrees will also be verified. Business operations will be carried out by all partners: Marketing & operations - Ms Nighat & Rehan Ejaz Account Services Mr. Salman Sikander Human Resource & Reception Area Ms. Memoona Altaf Office Boy & Janitor One office boy & Janitor will be hired using newspaper. Guard one guard will be hired using the following agency:

Zim Security Company 3rd Floor, dosal plaza, Blue Area, Islamabad Tel: 0334-5302728 Expenses : Nutritionist Salary per month Rs. 160,000 (80,000x2) Guard Salary Rs. 10,000 Office boy Salary Rs. 8,000 Office Janitor Rs. 5,000

5. FINANCIAL PROJECTIONS
Our start-up costs cover the renovation of the occupied office space, professional fees, and expenses associated with opening our first location. The start-up costs are to be financed by direct owner investment. The financial picture is quite encouraging. We will be slow to take on debt and heavily investing our own assets, but with our increase in sales we do expect to apply for a credit line with the bank, to a limit of Rs. 500,000/-. The credit line is supported by assets.

5.1. Start-up Financing

Table: Start-up Financing Start-up Financing Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Owner 1 Owner 2 Owner 3 Owner 4 Other Additional Investment Requirement Total Planned Investment 100,000 100,000 100,000 100,000 0 0 400,000 Rupees 85,000 579,000 664,000 519,000 60,000 0 60,000 579,000

0 0 145,000 119,000 264,000

Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding

(85,000) 315,000 579,000 664,000

600000 500000 400000 300000 200000 100000 0 Start-up Expenses to Fund Total Assets Total Liabilities Total Planned Investment

Start-up Expense Table Start-up Requirements Start-up Expenses Legal Stationery etc. Other Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements

Rupees

35,000 30,000 20,000 85,000

60,000 369000 150,000 579,000 664,000

5.2. Profit & Loss Statement

Pro Forma Profit and Loss 1st Quarter Revenue Direct Cost Other expenses Total Cost of Sales Gross Margin Gross Margin % 790,000 0 30800 30,800 759,200 96.10 2nd Quarter 1,230,000 0 25600 25,600 1,204,400 97.92

Expenses Payroll Sales and Marketing and Other Expenses Utilities Insurance Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales 549000 45000 25800 0 4500 624300 134,900 134,900 0 3750 131,150 16.60 549000 20000 30740 0 7300 607040 597,360 597,360 0 3750 593,610 48.26

5.3. Balance Sheet

Pro Forma Balance Sheet 1st Quarter Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings 526,480 145,880 672,360 672,360 400,000 (10,510) 131,150 583,200 74,700 657,900 657,900 400,000 (199,010) 593,610 185,000 420,000 23,000 628,000 565,000 565,000 1,193,000 310,000 533,000 44,500 887,500 565,000 565,000 1,452,500 2nd Quarter

Total Capital Total Liabilities and Capital Net Worth

520,640 1,193,000 520,640

794,600 1,452,500 794,600

APPENDIX GENERIC MENU PREVIEW