CED 300

GROUP PROJECT

FEASABILITY STUDY ON A PRINTING PRESS BUSINESS

PLAN

BY

GROUP 2

DEPARTMENT OF ELECTRICAL AND ELECTRONICS

ENGINEERING

UNIVERSITY OF BENIN

10TH FEBRUARY 2016

 CED PROJECT

DEPARTMENT OF ELECTRICAL AND ELECTRONICS ENGINEERING

GROUP 2

PROJECT TITLE: PRINTING PRESS

GROUP MEMBERS:

AKPOMUETATA Oghenefejiro M ENG1202932

ADAROJE Paul Keno ENG1202922

AGOFURE Blessing ENG1202928

AIGBOHIOSE Omono Susan ENG1202929

ALIKA Lucky Kinz ENG1202934

ANYADIKE Chukwuebuka Promise ENG1202936

ASHAMA Eyanye ENG1202937

ASIADIACHI Chukwuka Joseph ENG1202938

ATOR Osahon Tony ENG1202939

AYENI Olohije Valerie ENG1202941

BROSSA Jacob ENG1202942

CHIEJINI Innocent Ifeanyi ENG1202943

CHIMODO Ekene ENG1202944

EHIGHAOKO UNEMHIN ENG1102392

ONWUMERE CHIDOZIE MARTIN ENG1105516

 TABLE OF CONTENT

1. INTRODUCTION

2. BUSINESS BACKGROUND

3. VISION

4. MISSION

5. OBJECTIVES

6. PRODUCT AND SERVICES DESCRIPTION

7. REPORT ON BUSINESS AND ENVIRONMENTAL ANALYSIS

8. MARKET PLAN

9. MARKET STRATEGY

10.TECHNICAL ANALYSIS

11.FINANCIAL PLAN

12.SUMMARY OF PROJECT COST

13.CONCLUSION
 INTRODUCTION

A business that is well planned will have a greater chance of success and

help you avoid common pitfalls such as unrealistic prediction of expenses and

revenue. In other to reduce the risk of failure and losing money, potential

entrepreneur go through the different aspects of running their business in

sharing business ideas with friends, families and business expert before they

bring out funds or try to obtain a loan.

Establishing a printing press business requires you to consider many

elements, such as where to get quality machines, where to get quality printing

materials, where or how to get good graphics designer, how and where to

publicize your products.

The products/services offered is a top notch printing/branding service in

which we brand any type of material with any design the customer choses. The

expected market is majorly the Benin City and its environ.

BUSINESS BACKGROUND

BUSINESS NAME: CROWNSTAR printing press

LOCATION OF BUSINESS: No. 45 20th street BDPA, Benin City, Edo state

REGISTRATION NAME OF THE BUSINESS: CROWNSTAR printing press

REGISTRATION PROCESS:

It is a requirement of the legal environment in Nigeria to register with the

corporate affairs commission (CAC). The CAC is responsible for the regulation
and supervision of the formation, incorporation, registration, management and

winding up of companies in Nigeria.

In line with this requirement, the business owners went to the corporate affairs

commission in Benin located at No. 44 Godwin Abbey way off Sapele road

GRA Benin city to register the business name and then, after paying the filling

fee of 500, they were given an application form to fill containing the following

details

Name of the business: CROWNSTAR printing pre

Address: No. 45 20th street BDPA, Benin City

Proposed date of commencement:16th march, 2016.

Nature of business proposed business: printing press

As it is a business of 3 partners, they were asked to submit their names,

nationality, sex, occupation, age and passport size photographs of all the

partners of the business.

They were asked to return 2weeks later to confirm that the business name

is not being used by another business. They were asked to pay a registration fee

of 10,000 and then they were issued a certificate and the go-ahead to open

business.

VISION: It vision is to become printer and employer of choice.

MISSION:

- To provide people with services under a comfortable and approachable

environment
 - To show case quality in branding

- To offer a variety of beautiful and aesthetic design unique to each

customer

KEY TO SUCCESS

- Outstanding customer success

- Stable finance

- Good location

OBJECTIVES

- To maintain profit margin at 25-35% through close attention to expenses

and branding costs

- To create awareness and build a large base through advertisement

(informative, persuasive, reminder advertising)

PRODUCT AND SERVICES DESCRIPTION:

CROWNSTAR Printing Press will offer full service typesetting and

design and a wide range of printing options such as digital and offset printing.

DESIGN: Graphic designing, we will provide such services as, creation of

corporate identity; logo design; update of corporate look or logo; marketing ad

layouts; design of brochures, marketing pieces, annual reports, banners,

customizing of t-shirts, polos, bags, umbrella and general branding etc.

PRINTING: Printers have only used offset printing for their production

needs in catalogue printing or magazine printing. We tend to offer new

advance technology, a new printing solution-digital printing.

 COSTING: The cost of printing depends on the major cost items, they

are;

- Machine

- Colour

MACHINE: There are different machines used for running an impression, for

instance, anybody who want to produce a magazine or a newspaper will use the

cord machine and not impression machines and the cost of these machines

varies.

COLOUR: To run an impression, black is the major and the cost of using two

colours will increase. Also the cost of running an impression with colour

separation that is four colours differs from single and double colour

REPORT ON BUSINESS AND ENVIRONMENTAL ANALYSIS

ENVIRONMENTAL ANALYSIS:

Crownstar printing press is located in an environment where the demand

for quality printed products is high. We will work with the local publications,

university of Benin, to generate public relations in the area. We hope to cater for

the needs of students, student bodies, firms etc. who wish to get their products

branded.

MARKET ANALYSIS:
Printing press has exciting business opportunities since there is a demand for it

in Benin and its environs. There is an increase in population which is as a result

of many people moving into the city due to its commercial growth.

CROWNSTAR Printing Press is privileged to business opportunities because

of the enormous printing press services available to them. The increase in

demand for printing press services alongside literacy will help to boom the

business. Anticipated Customers These are the list of the targeted customers;

- Schools, Primary, Secondary, and tertiary

- Political parties

- Churches

- Companies

- Firms

- Societies

- Organizations

- Government agencies

- Private individuals, etc

MARKET PLAN:

We intend to price our services and products just below or equal to our

competition. The goal is to accomplish this while maintaining superior service

over our competitors. We can accomplish this through efficiency, company

training sessions, and by concentrating on quality control. We will emphasize

our perceived competitive advantage of service, quality, and price, to penetrate

the market. To accomplish this, our promotion plan will include:

PUBLIC RELATIONS: We intend to have periodic meetings and training

sessions teaching employees how to communicate effectively with customers on

the phone, and in person. One of our aims, in hopes of satisfying our customers,

is to demonstrate alternative ways to do their printing. This should, in many

cases, save them time and money.

ADVERTISING AND SALES INCENTIVES: we will develop a series of

radio commercials that will be effective in exposing companies to our market

areas. We plan to have periodic promotions offering discounts or specials on

various printing items (i.e. business cards, envelopes, letterheads, etc.). We will

be able to determine what means of advertising will be most effective for our

companies by utilizing these promotions at different intervals on various types

of media.

SURVEYS: We will survey present customers and potential customers in an

effort to find the weak and strong areas of our products and services. Through

this survey, we should be able to gain valuable information giving us a

competitive edge over our competitors.

PROMOTION STRATEGY: CROWNSTAR printing press will be a

technology-driven business, exploring new developments in document

production. The business will develop a reputation for thorough, innovative

work in graphic design and takes pride in quality of the relationships it will
forge with its clients. Not only will it design, typeset and print leaflets, booklets,

flyers and any other literature needed by her customers, it will also liaise with

printers on behalf of its clients in other to obtain competitive printing quotes. It

will also advise its customers on the most effective, efficient and economical

way to proceed. It will ensure that the corporate identity is taken into account as

well as making our customers aware of issues relating to copyright,

confidentiality and data protection. Finally, on time delivery of booked works of

customers will be strictly adhered to.

MARKET STRATEGY:

To retain our old customer and attract new ones, CROWNSTAR Printing

Press has decided to reduce its cost of printing at the early stage of production.

It will strive to produce bright and quality printed works for our customers.

Discounts will also be offered to our initial customers.

MARKET POSITIONING

The understated is how the firm will want the customers, competitors and

general public to view it;

- As a printing press with the interest of its customer at heart, both on

pricing and delivery.

- A trustworthy provider of consistent service with the best quality.

- As the best graphic designer.

TECHNICAL ANALYSIS

MANAGEMENT AND ORGANIZATION TECHNICAL ANALYSIS

 Digital printing has been the wave of the future for todays printers,

opening the door to a whole new way of doing business and giving the unique

opportunity to save money on their printing projects in a way they never have

before. Because offset printing projects are printed in such high volume, digital

printing offers the printer the opportunity to print in a reduced quantity. Each

has its own advantages, but CROWNSTAR printing press will utilize their

advantages, offset printing will be used in large quantity printing while digital

will be used in reduced publication.

SCHEDULE OF OPERATION:

The customer places the order. The employee taking the order should get

as much information from the customer as possible (filling out the job

worksheet should be sufficient). Also, at the time the employee receives the

order a reasonable time should be determined for completing the job. The

customer should be notified of any changes occurring with the order. The job

ticket with all the information should be completed and documented in the job

log book. The typesetter should be notified if typesetting is needed or the job

should be taken directly to layout if all of the information is camera-ready. If the

job is a repeal order, it should also be taken to layout. The typesetter should

typeset any required copy as specified by the customer. Questions or problems

should be directed to the person who took the order. No work should leave the

typesetter until it has been properly proofed by two or more employees. Every

time typesetting is done for a customer, the customer must see a proof before
printing is done. Therefore, the client is to be called in for proofing and they

should sign a proof slip after reviewing the completed work. A customer who is

proofing the typesetting that we have done should be encouraged to check

spelling, phone numbers, etc. for accuracy. It is a good idea, and should be a

regular practice, for an employee to go over the proofing process with the

customer and review the printing specifications as they are printed on the job

ticket. Take nothing for granted and never assume anything. After the proofing

and correction stage, the job should go to layout, where logos and art work are

added, an original is made, and a plate is prepared for printing. The plate is

taken to a pressman. The pressmans job is to pull the stock required for the job

and then print it to the specifications on the ticket. Again, the pressman should

not assume anything. If there is any question or doubt as to the specifications of

printing the job, the pressman should take the questions to the shop foreman for

clarification. The job is printed and then goes to the bindery for any bindery

work needed (i.e. collating, numbering, padding, cutting, gathering, packaging,

etc.). When all bindery work is done and the job is complete, it should either be

delivered or taken to the front office for pick-up. The delivery person or the

front office employee should get a signed delivery receipt and/or a signed in

voice when the job is picked-up. The delivery receipt should then be placed in

the job envelope and the envelope filed in the completed box. The invoice also

has its assigned place and should be filed there without fail. Personnel in each

department should be aware of the delivery dates requested by customers. The

work schedules should ensure that these dates are met. Should a job be held up

in a department that will affect the delivery dates, the customer should be

notified to help maintain proper public relations. Also, it is the responsibility of

the bookkeeper to make sure that all customers are invoiced weekly and those

statements are in the mail at the proper time. Any time an invoice can be

delivered with the job, it should be, as this will eliminate unnecessary postage

and work load in the front office.

OWNER/MANAGER

CROWNSTAR Printing Press is a partnership investment. It is jointly

owned by three persons who developed the idea. They will serve also as the

staff to the enterprise that manages the affairs of the printing press. One of the

owners is a stockbroker and as such has enough basic knowledge of financial

management which is expected help the firm utilize in running the printing

press. Some people will be employed to help in the day-to-day management of

the printing press.

FINANCE

This project will need a start-up capital of N1, 800, 000.00, constituting N1,

300, 000.00 for fixed assets and N500, 000.00 for working capital.

The financial projections show that the project will be financially stable

as it progresses. By the end of the first year the expected earnings from
production is N1, 918, 500 and this is expected to grow to N2, 776, 000 in the

second year while by the end of our third working year the business will be

realizing N5, 362, 500.

Table 1: The profitable measures are shown below:

Year 1 Year 2 Year 3

Total sales N1, 918, 500 N2, 776, 000 N5, 362, 500
Profit after tax 86% 101,910 737,450 2,224,390

PROJECTED ANNUAL DEMAND OF PRINTING, DESIGN AND

TYPESETTING SERVICES IN BENIN AND ITS ENVIRONS (2015-2017)

With the growing rate of companies, schools, firms, increase in political parties

in the country, churches, festivals, weddings, burials, etc. The existing limited

printing presses meet up to 45% of the demands of published works. Possibly,

about 400 works are needed to be published daily within Benin City and its

environs. As the rate of the demand by the customers increases it is rational to

expect comply from the printers. For instance, political parties in the country

increased from 50 to 62 in the past four years; therefore, it is not an

exaggeration to say that production rate hovers around 2.5% to 3.0% possibly

for about 5 years presently. It seems considerate to state that the demand for

printing will at least grow at the rate of 0.5% for the next 3 years.
PROJECTED ANNUAL DEMAND FOR PRINTING PRESS SERVICES

(2015-2017) 365 days = 1 year, 400 works = a day, 365 days 400 works =

146, 000 annually

Table 2: Projected Annual Demand for Printing Press Service in Benin and its

Environs (2012-2014)

s/n Years Annual Growth Rate Projected demand

Base year 2016 0.5% 140, 000
1 2017 0.5% 140, 700
2 2013 0.5% 141, 400
3 2014 0.5% 142, 100
Total 2% 564, 200
Average 0.5% 141, 050

This projected average annual demand for printing press services in

Benin City and its environs is about 141, 050 yearly. Therefore, its expected

that this level of demand will subsist for the next years.

PROJECTED DEMAND-SUPPLY GAP OF PRINTING PRESS SERVICES IN

BENIN AND ITS ENVIRONS: 45% of the total demand figures of printing

press services are met by the already established printing presses in Benin city

Project Demand-Supply Gap of Printing Press Service Adjustment Demand-

Supply Gap Estimated average annual demand Less 45% of supplies by existing

printing presses 141, 050

63, 473 Less 20% due to expansion of existing printing presses and

establishment of new ones 77, 577

15, 515 Less 5% estimate error 62,062 3,105 Estimated demand-supply gap

anticipated annual service of customers 58, 957 1,475

This plan is to provide approximately 1, 475 printing press services yearly. This

is 2.5% of the total demand-supply gap of printing press services. In other

words, it is obvious that the business will not be out of service from the time of

start-up.

Table 3: Management and Labour Compliments

s/n Positions No of staff Annual salary Total(N)

per staff (N)

1 Manager 1 180,000 180,000
2 Machine operators 3 120,000 360,000
3 Graphic designer 1 120,000 120,000
4 Cashier/secretary 1 96,000 96,000
5 Security 1 84,000 84,000
6 5% fringe benefits 5,000 5,000
7 Grand total 902,000

SUMMARY OF PROJECT COST:

The total cost of the project is estimated around N1, 800, 000.00. N1, 300,

000.00 constitute the fixed capital and N500, 000.000 will be used for the

working capital.

FIXED CAPITAL INVESTMENTS:

CROWNSTAR printing press is situated at No. 45 20 th street BDPA, Benin City

in a large store. The building is conducive to accommodate the type of

machinery it will house.

Table 4: Fixed Capital Investment

s/n Detail Unit price Qty Total (N)

(N)
1 Building Apartment 200,000 1 200,000
2 Water tank 50,000 1 50,000
3 Cord machine 400,000 1 400,000
4 Impression machine 180,000 1 180,000
5 Polar machine 85,000 1 85,000
6 Printer 20,000 1 20,000
7 Generator 195,000 1 195,000
8 Desktop computer 75,000 1 75,000
9 Platographic machine 95,000 1 95,000
GRAND TOTAL 1,300,000

UTILITIES:

The project will be making use of electricity and water in the course of

production.

Table 5: Expenses on Utilities:

Projected Utilities Year 1 (N) Year 2 (N) Year 3 (N)

Electricity 12, 000 12, 240 12, 480
Water 12, 000 12, 240 12, 480
Total 24, 000 24, 480 24, 960

OTHER EXPENSES:

There are other expenses expected to be incurred during production.

Table 6: Other Operating Expenses

Type of expenses Year 1 (N) Year 2(N) Year 3(N)

Machine maintenance 90, 000 94, 500 99, 000
Advertisement 70, 000 73, 500 77, 000
Ink 50, 000 52, 500 55, 000
Re-fuelling (both diesel and 75, 000 78, 750 82, 500

kerosene)
Miscellaneous 35, 000 36, 750 38, 500
Total 320, 000 336, 000 352, 000

SOURCE OF FUND: In order to carry out this project, plans on how to raise the

venture capital are stated below.

Table 7: source of capital

Financing Plan Source Amount (N)

Equity contribution 300, 000
Bank loan 1, 500, 000
Total 1, 800, 000

LOAN REPAYMENT SCHEDULE AND INTEREST PAID:

Normally, the bank does not give out its money for nothing. Therefore the

money borrowed should attract 10% interest within the space of 3years. The

mode of repayment is stated below.

Table 8: Interest and Repayment Schedule

Year Loan Repayment (N) Interests (N) Loan balance (N)

1 1, 500, 000 Nil 51, 000 1, 500, 000
2 1, 500, 000 400, 000 124, 000 1, 100, 000
3 1, 100, 000 1, 100, 000 26, 000 Nil
 It is worthy of note that a month moratorium period is required of the

loan. Productions start by the 3rd month, therefore, interest will be starting from

the 3rd month.

DEPRECIATION:

The annual depreciation is calculated using the straight line method.

Table 9: Schedule of Annual Depreciation

s/n Capital items LS IV SV Depreciatio

n
1 Cord machines 10 400,000 250,000 25,500
2 201 impression machine 10 180,000 110, 000 11, 000
3 Generator 10 195, 000 140,000 14, 000
4 Platographic machine 5 75, 000 70,000 15,000
5 Printer 5 20, 000 10, 000 2, 000
6 Polar machine 10 85, 000 45, 000 4, 500
7 Computer 5 75, 000 35, 000 7, 000
8 Water tank 5 50, 000 45, 000 9, 000
Total 89, 500
 Table 10: FORECAST OF PROFIT AND LOSS

Particulars Year 1 (N) Year 2 (N) Year 3 (N)

Expected sales 1,918,500 2,776,000 5,162,500

Less 1% discount 19,185 27,760 52,000

Net sales 1,899,315 2,748,240 5,110,500
EXPENSES
Lease building 90,000 90,000 90,000
Cost of printing 450,000 505,000 550, 000
Utilities 24,000 24,480 24,960
Salaries 320,000 336,000 325,000
wages 902,000 902,000 902,000
Total expenses 1,789,000 1, 857,480 1,918,960
Profit before int. 110,315 890,760 3,191,540

tax Less interest 12,910 153,310 26,000

Profit before tax 97,405 737,450 3,165,540

Less 10% tax Nil 56,852 316,554

Profit after tax 97,405 737,450 2,848,986

Less depreciation 20,000 20,000

Net profit 77,405 717,450 2,848,986
Retained earnings 77,405 717,450 2,000,000
Dividend Nil Nil 848, 986
CASH FLOW PROJECTION: Precisely by the second year of service the

business would have fully advanced. The cash flow position is displayed below.

Year 2: N2,748,240

Year 3: N5,110,500

Basically, it illustrates that the business will be generating funds to carry out its

necessary obligations.

CONCLUSION:
 Through its findings this project is highly recommended for

implementation. The projects commercial viability is very obvious in such a

way it can be understood from its projections, an impressive publication, profits

and cash flow positions.

Not only will this create wealth and benefits to it promoters, there is an

angle from which it will provide jobs to alleviate unemployment rate it the

country. From our study and analysis of the findings made, the project will fetch

its entrepreneur good financial resources.