1

2011
Batwa House Inc.
Table of Contents
Executive summary ....................................................................................................................................... 4
Company Overview ...................................................................................................................................... 4
Mission statement ......................................................................................................................................... 5
Current Status................................................................................................................................................ 5
Market and products ..................................................................................................................................... 6
Objectives ..................................................................................................................................................... 6
Product and service description .................................................................................................................... 7
Market analysis and comparison ................................................................................................................... 7
Industry Analysis .......................................................................................................................................... 8
Customer analysis ......................................................................................................................................... 8
Competitor Analysis ..................................................................................................................................... 8
Marketing strategy ........................................................................................................................................ 9
Product and service strategy ..................................................................................................................... 9
Pricing ..................................................................................................................................................... 10
Distribution ............................................................................................................................................. 11
Promotion ................................................................................................................................................ 11
Advertising .............................................................................................................................................. 12
Sales Assumptions ...................................................................................................................................... 12
Operations ................................................................................................................................................... 13
Scope of operations ................................................................................................................................. 13
Ongoing operations (Production Flow Chart) ......................................................................................... 14
Development expenses ............................................................................................................................ 14
Development strategy ............................................................................................................................. 15
Management ................................................................................................................................................ 15
Company organization ............................................................................................................................ 15
Batwa House Inc.
Organizational Structure ......................................................................................................................... 16
Organizational Chart ............................................................................................................................... 16
Administrative expenses ......................................................................................................................... 17
Summary of finances .................................................................................................................................. 17
Investment requirements ......................................................................................................................... 17
Total Projected Cost ................................................................................................................................ 17
Capital requirement ................................................................................................................................. 18
Financial Assumptions ............................................................................................................................ 18
Financial forecasts .................................................................................................................................. 19
Project Returns ........................................................................................................................................ 19
Financial risks ......................................................................................................................................... 20
Exit strategy ............................................................................................................................................ 20











Batwa House Inc.

Executive summary

This feasibility plan is deliberated for Batwa House Inc. which will be launched in Lahore.
Batwa House Inc. is a business that is engaged in the customized design, manufacturing and
marketing of leather wallets. Giving meaning and shape to leather wallets with embroidery of
colorful glasses, beads and threads is what we specialize. Our product range consists of different
size of personalized wallets for both males and females. In order to promote our product, we plan
to hire embroiders and designers from Southern Punjab (Bahawalpur, Multan) on commission
basis to use our products in their designs. Their specific expertise will help us create a
memorable and effective product that will be enjoyed by our customers. The prices of our
products will be based on two factors: size and complexity. Our target market is age group of
adults and above. We have tried to touch upon every pertinent aspect in as much thoroughness as
possible.

Company Overview

The Company is going to establish in summer of 2011. Batwa House Inc.is new in business. It is
a partnership between Sibghat Ali khan, Sara Asif, Saleha Noor, M. Shehryar Shahid and Ayesha
Naseer. The company will get registered by this years summer and will get its product line
patent in the end of year 2011. The urge to grow will make Batwa House Inc.the hot sellers in
the coming years. With the passage of time company will change its trends of designs to meet the
demand of customers.



Batwa House Inc.


Mission statement

To be best leather wallets designer in Pakistan, not in sheer size but in ways that are more
meaningful i.e. quality people, quality products, quality business plans, returns and innovation.
Batwa House Inc. want to understand customers needs and care about meeting them by doing
more than just selling leather wallets. We want to teach personalized regimen, using hand
embroidery on leather products according to specification given by our customers and providing
them unique, versatile and trendy leather products. We want to implement careful quality
assurance in our products and research about customers demands so that we can offer a hundred
percent satisfaction guarantee. We want to create an organization environment which stimulates
creativity, communication, and performance which results in personal satisfaction and high
productivity. This success oriented attitude based on discipline and determination will lead
everyone to new heights and greater achievements.

Current Status

As we are about to launch, therefore a lot of work is under development. Employees have been
recruited and production work has completed. Marketing and promotion needs maximum
attention at the moment. We are hoping that the exhibition will create much hype amongst
customers, and then sales at the outlet will benefit after the name of our company has been well-
established.



Batwa House Inc.



Market and products

Our market consists of adults, of both genders. We aim to target the market of teenagers as well
as adults. Our products consist of:
Wallets
Handbags
Souvenirs
Key chains
Mobile phone covers
Office items
Briefcase
Tablemats and coasters
Miscellaneous
But our main product is wallets, for which we wish to be known for.
Objectives
Providing quality goods and after-sales services
Satisfy customer wants in an efficient and effective way
Attain reasonable profits and maintain sustainable growth
Provide a friendly work environment for employees
Batwa House Inc.


Product and service description

Our leather wallets with embroidery of colorful glasses, beads and threads are what we specialize
in. Our product range consists of different size of personalized wallets for both males and
females. In order to promote our product, we plan to hire embroiders and designers from
Southern Punjab (Bahawalpur, Multan) on commission basis to use our products in their designs.
The designs will reflect Pakistani culture and traditional patterns. We also will provide after sales
service if customers are dissatisfied with the products. For example repair of a damaged piece or
repair of any item.

Market analysis and comparison

We have several local competitors such as:
HUB
Traditions
Jaffer Jees
Leather point
As these competitors have well established name in the market therefore they are a major threat,
but we have an edge over them in terms of design; our product will be completely according to
the specification of customers. We will have skilled employees for our business. Initially, we
have single outlet so it can be difficult for us to target our market easily. Though we have skilled
workers but still as we are new in the business and we have no experience. The major
opportunity that company looks forward is to expand its business by opening more outlets in the
Lahore and also in other major cities of the country. As the lifestyle of the people is changing
towards more customized products so it will be opportunity for us to fulfill the demand of
Batwa House Inc.
market. We aim to increasing the awareness among consumers about our product will be helpful
for the growth of our business. Intimation of our product in the market can decline our sales. And
an unexpected rise in the prices of raw material especially leather is a major threat to our
business.
Industry Analysis
As mentioned earlier there is a huge competition in the leather industry. Various foreign brands
have already captured bigger part of population and the competition between the local leather
products is also intensive. Our leather wallet products need to be taken under high consideration
and must not be ignored if we want to establish our particular market. We must highly focus on
the quality and designs to ensure good quality material, color combinations, variety and ease of
using. The basic threat from imported brands and our local markets are their low cost, variety,
and image. They sell new concepts in form of fashion. In order to avoid such uncertain rivalries
in the market, we must strongly focus on our core strengths. This way we will be able to
understand the nature of demand and what need to be served in more specified terms. This sort of
strategy will help us to improve our quality and designs with different product range, competitive
pricing, high flexibility and speed of delivery keeping in mind the total quality management
procedures to ensure quality products.
Customer analysis

Our ideal customer is men and women of age group 20 and above. As these individuals are
employed, they will be more interested in purchasing leather products that fall into our price
range. Moreover, we make products that are used on regular bases like household items, office
items and wallets and handbags. There is sufficient demand by the customers hence, making the
business profitable and promising in future.
Competitor Analysis
The leather industry is quite competitive as Pakistan has various local as well as foreign brands.
Some of these brands offer products at a lower price than we do, giving them a competitive edge.
Batwa House Inc.
Companies like HUB are selling at higher prices but our products infuse Pakistani culture and
tradition, something competitors do not offer.
In addition foreign branded wallets are also sold here and are preferred by customers that are
brand conscious. However, our main focus is on quality and our distinct point is our designing
which sets us apart from competition. We also offer our customers an opportunity to have
embroidery done according to specific preferences. These are attributes that competitors in the
industry do not possess.
Marketing strategy
Product and service strategy
Pure customer oriented: Batwa House Inc. is offering wide range of designs purely according to
the demand of the customer.
1. The customers at Batwa House Inc. can select the embroidery designs of their choice
from our design book or they might themselves give us the designs if they specially
want to imprint something on the wallets like their names or anything else.
2. The customers can select the leather wallet of their own choice (camel, elephant, and
ostrich) on which embroidery is to be done.
3. Designer consultancy: We have made a booklet in which the most demanded designs
of embroidery and leather wallets are placed for the convenience of the customers in
selection of designs.
4. Premium quality: Since quality is of utmost importance in any business, we check the
quality of our product on each and every step. From purchasing of the inventory to the
finishing of the product, quality check is implemented as an important measure. Even
the finished product is wasted if it lacks quality on any step of its production. If the
product finds any defect within the first month of sale we are responsible to replace or
fix the defect without any extra charges.
5. Unique, stylish and trendy leather wallets: We have a competitive advantage of such a
differentiated and unique product which has not been introduced before. Though
people have substitute products like other leather wallets but the kind of customization
Batwa House Inc.
and embroidery we are offering makes us only in the market. Gems, mirrors, and
colorful threads make our wallets stylish and trendy.
Pricing
Pricing products and services is a challenging process for all new entrepreneurial business. Often
entrepreneurs will underestimate the value of their time and expertise and find it difficult to believe
that customers will actually pay the price they need to charge to make a profit. The bottom line of
any business is profit. If a business is going to be successful and maximize profits, accurate pricing
is critical. Prices must be high enough to cover costs and earn a reasonable return; yet attractive
enough so customers will purchase the product or service. The primary purpose in operating a
business is to make a profit. We should establish our prices from an accurate accounting of direct
costs, labor, overhead expenses, and profit margin. In addition, we have to consider all the
psychological factors that may have an impact on the business as establishing a pricing strategy.
To be successful and profitable we have to continuously monitor our pricing strategy.
Our pricing decisions should be based on an orderly analysis rather than on an educated guess.
By taking a systematic, step-by-step approach, we can make pricing a simple task.
Costs
Profit
Retail pricing
Breakeven analysis
Other pricing strategy considerations
As every product or service has its price we often hear about the importance of price in
business world. Price of product or service leads to the profit of the business, behind the scene is
always the primary purpose of each profit oriented company. Understanding the market and what
customers will or will not pay directly impacts our pricing strategy.
Out of the four basic strategies i.e. Premium Price Strategy, Economy Price Strategy, Penetration
Pricing Strategy and Skimming Strategy we selected both Skimming and Premium Price
Strategies. The uniqueness we are giving in our product, as we are delivering the customer with
what he wants and giving a whole lot of the choices for customer and what we add value to the
customer can be benchmarked easily so we selected the skimming strategy. As we define quality
Batwa House Inc.
what actually customer demand nothing more is pure than this quality so we are focusing on the
Premium price. Price of our product will vary from size and complexity of the product depends on
leather and raw material used on it. To solve this problem we set different ranges of prices for
different category of designs. Minimum price of our customized leather wallet is Rs.1200.
Distribution

To start a new business the first and basic requirement is a place from where you are making or
selling your product and for this we need a shop where we make our product and as well we
display and sale.
For this we tried to search in markets first as per our partners we have a shop in a areas like
Gulberg, Defense, Model Town because our product is mostly bought by the customer who has
the affordability and mostly middle and upper class will buy this type of product so first we go to
Defence Y block market here we found shops starting from the rent of Rs.45000 and up to
Rs.150000 and some are even more than that. Then we go to Liberty market for finding the rent
rates. The rates of Liberty market and Defense Y block market rates are almost same. Then we
visited Main and Mini market of Gulberg here we found the rates starting from Rs.25000 and up
to Rs.70000. Based on the nature of our product we have selected to open our outlet in mini
market because it is linked to the famous M. M. Aalam road which is the most frequently visited
place of both middle and upper class society. The location we have selected is a convenient
location.
Promotion

For the promotion of our product we will use different means, like outdoor advertising, print
media, and electronic media. We will use percentage of sales method for promotion of our
product and dedicate 10 percent of our sale revenue to spend on advertising and promotional
purposes.
Batwa House Inc.
Advertising
To promote our wallets we will use a billboard, which will be in vicinity of our store. This will
help us in attracting customers quickly. Those people who are roaming around in the shopping
area will be attracted by the billboard and visit our shop to view our products. Due to limited
budget we are using only one billboard, with expansion in business we can use more billboards
also, but billboards will not be the preferred media and only few billboards at selected locations
will be used.
Our product is a customized product and to effectively persuade our customer to buy the product
we need an advertising media, that uses both sight and sound .So advertisement on television
will be the preferred mode of advertising. To advertise at mass scale we will use the cable
television advertising, due to our financial constraints, we will place our ads on world call cable.
We will broadcast our ads on their private channels, and also place our ads on their scrolls.
Traditionally, the local newspaper has been the medium that most advertisers rely on to get their
message across to customers. We believe our product will be of high interest to educated class,
and we can reach them through advertising over newspapers. Advertisement on newspaper will
be a good way of creating awareness about the product, although quality of ads in newspaper is
not good, but at this initial stage we believe informing our customers about our product is the
biggest priority. As our target market is middle and upper class so will give our product ads in
the DAWN, THE NEWS and JUNG newspapers.
These forms of advertising will be used in order to create awareness about our products; later on
we believe word of mouth will become a major source of promotion for our products. To
encourage this we will allow cash discounts and other benefits to those who refer others to our
store.



Sales Assumptions

Batwa House Inc.


Operations
As a procurator, the person has to be a bargain hunter and had a little know how about the
market. So we decided to do the various tasks on which we have to collect the data and finalize
the decision for buying raw material.
Go to different markets.
Check out the different rates of the product.
Check out the quality of a product.

Scope of operations

As we are offering customized wallets to our customers, for this we are getting our raw material
i.e. leather sheets from Chamra market Lahore and colorful gems, glasses, threads, and most
importantly leather wallets from Shah Almi market Lahore. Our customers will select the designs
and place orders. We will be printing that rough design on cloth and than imprint it on leather
sheets. Afterwards our employees will do the embroidery on these leather sheets and stick that
sheet with the wallet very artistically. Then the finishing touch will be given so that the quality is
checked and finally pack the product.
Particulars
No. of wallets sold per month 150 units
Per unit sale price Rs.1200
Monthly Sales (150 x Rs.1200) Rs.180,000
Monthly profit (150xRs.200) Rs.30,000
Total Sales (Year 1) (1800xRs.1200) Rs.21,60,000
Batwa House Inc.

Ongoing operations (Production Flow Chart)




Development expenses
Our two major variable costs will consist of raw materials and labor. As we increase output, we
will also need to hire a dedicated staff for the designing of leather wallets and open up new
outlets for our products. As our products market repute builds, we will also add a dedicated
Design printing on
Leather Sheet
Embroidery on leather
sheet using colorful
beads, glasses & threads
Customized Design
Rough design on cloth
Stitching on Wallet &
Finishing
Packing
Final Product

Batwa House Inc.
wing to market research which will be giving us timely information about the customers taste
and demand. Every rupee earned above the break even requirement will go into the companys
reserves for the above stated expansion projects.
Development strategy
Every business wants to grow with the passage of time. In prospect of Batwa House Inc., its
growth strategy is to focus on opening more outlets in other areas of Lahore, and other cities in
order to increase the size of our target market and uncovering more opportunities by finding out
more uses of our products, like we will add a dedicated wing to market research which will be
updating us with market demand and priorities. To achieve this, we need to aggressively position
and promote our product coming up with new designs and ideas.
Management
Company organization
Batwa House Inc. is a fresh business and yet willing to expand, but currently it comprises of
limited staff which is working efficiently to fulfill the needs of the market. This is a partnership
based business consisting of five partners; Ayesha Naseer, Sibghat Ali Khan, Sara Asif, Saleha
Noor and M. Shehryar Shahid. Each partner is investing equal share of capital i.e. Rs.200,000.
All the functions and operations of management have been divided among each partner who then
takes the responsibility of that work and is accountable to other partners for his work. These
functions and operations include marketing, accounts, finance, procurement and production that
are divided into different departments. Like:
Sibghat is managing marketing. He is responsible for identifying and satisfying the needs
of the customers, marketing plans, marketing research, how to get, maintain and increase
the customers.
Sara is managing production. He is responsible for designing and manufacturing of the
products. With the help of employees, he will make the quality products according to the
requirement of the customers.
Shehryar is managing procurement. He is responsible for all the purchases of the raw
materials that also include the selection of the suppliers.
Batwa House Inc.
Saleha is managing accounts & finance. He is responsible for recording the sales and along
with this he will also play a role of human resource manager & he is also responsible for
all the financial work e.g. making budgets, controlling the cash flow, income statements
and balance sheet.
Ayesha is the creative manager; who is responsible for making new designs for the
products. She chooses the innovative embroidery patterns and colors, and explains to the
workers how the final product is supposed to look like.

In such business type creative ideas, designs are the backbone bone of the business. Therefore,
brainstorming sessions and forced relationship methods are used to make sure that we are
providing promised values to our customers. These exercises allow us to design new concepts
and give them physical shape with the help of skilled employees. To assist the work load, House
of Batwa has hired three employees on monthly pay bases, one employee for packing the
products, one sales girl will sit on the counter and one employee for miscellaneous tasks. The
employees who will be doing embroidery and shape our products will be hired on daily wages
according to the demand of our products.

Organizational Structure

Batwa House Inc. has a de-centralized decision making structure. The company has a wide
structure where each partner is manager of different department. Strategic and tactical decisions
are made after holding a meeting consisting of all the partners.
Organizational Chart

Batwa House Inc. has a very simple organizational chart. It constitutes of the owners, each one is
the manager of the specific department.
Batwa House Inc.


Administrative expenses
Administrative salaries will consist of profit/loss sharing equally amongst the 5 partners.
Bonuses and commissions will be available according to further injection of capital and
investment by any partner.
Summary of finances
Investment requirements
Total Projected Cost
Description Cost (Rs.)
Purchases (simple wallets)150 units 22,500
Furniture & Fixture (Interior Decoration) 45,000
Security Deposits for Premises 60,000
Marketing
Manager
(Sibghat Ali
Khan)
Production
Manager
(Sara Asif)
Procurement
Manager (M.
Shehryar
Shahid)
Embroiders on daily
wages &
1 Employee for
Packaging
1 Sales Girl &
1 Employee
Perform Misc.
Tasks
Creative
Manager
(Ayesha
Naseer)
Batwa House Inc.
Finance & Account
Manager (Saleha
Noor)
Batwa House Inc.
Salaries 4,000
Promotional Expenses 300,000
Total Capital Cost 436,500
Raw material (Leather & Embroidery) 43,500
Prepaid Rent (Display Shop and Stitching Unit) 25,000
Project Cost 500,000


Capital requirement


Financial Assumptions

Financing Ratios% Amount (Rs.)

Equity

100%

500,000
Debt 0% 0
Initial (Year 1) Average cost per wallet (Rs.)
Cost of each wallet(simple) 150
Material (lather) 70
Accessories 50
Embroidery Cost 100
Direct Labor Cost 100
Administration & Rent expenses & Transportation Expense 500
Batwa House Inc.
Financial forecasts

Project Returns

Internal Rate of Return (IRR) 35.33 %
Payback Period (PBP) 3.08 Years
Net Present Value (NPV) Rs. 270,744





Fixed electricity 30
Unit cost per wallet (Rs.) 1,000
Profit (20%of cost) 200
Selling price 1,200
Particulars
No. of wallets sold per month 150 units
Per unit sale price Rs.1200
Monthly Sales (150 x Rs.1200) Rs.180,000
Monthly profit (150xRs.200) Rs.30,000
Total Sales (Year 1) (1800xRs.1200) Rs.21,60,000
Batwa House Inc.

Financial risks
We can face the following financial risks
External:
Economic instability and inflation: costs of raw material and production might fluctuate
and as a result pricing strategy will be affected
Competitive pricing: as our business will be newly established compared to competitors,
initially fixed costs cannot be covered by pricing. It will take some time to settle down
and make profits
Internal
Default/fraud: trust and loyalty is an essential business ethic. But cannot be promised,
uncertainty exists in any business, and such a risk is always present
Management conflicts: with the existence of several partners, there is always chance of
difference of opinion and conflicts arising due to this.
Bargaining power of suppliers: suppliers are an essential component and control supply.
They might misuse their power over the supply of raw material and endanger the smooth
flow of supply chain. This may result in loss or buffering. Both unfavorable outcomes for
any business
Exit strategy
We will initially be willing to bear loss or at least break even for a year. If we are still
unsuccessful, then we plan to sell the existing products at a reduced price and equally divide and
liquidate assets within the 5 partners.