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EXECUTIVE SUMMARAY
Tea is the second most popular drink in the world, after water. Therefore itt is proposed to establish a business entity M/S Ideal Enterprises to deal with the packing and supply of high quality tea in Hazara Division and adjacent areas on economical prices. A research proved that tea is Anti Oxidation, Cancer Preventive,. Our aim is to increase the local share then the market with good quality and low price tea. The firm will formally start its operations from 1st of January, 2012.

CURRENT MARKET SITUATION

Pakistani tea market is pre-dominated by two major companies Unilever and Tapal. Uniliver is a British company which as 3 tea brands in the market Lipton, Brooke Bond A1 and Brooke Bond Supreme, while Tapal is 100% Pakistani owned company. At present, the major percentage of market is covered by Lipton Yellow Lable, Tapal and Tatly. Lipton has 60% share in the market of black tea. Tapal has 25% and Tatly has 15% share in sales volume of Black Tea Market.

SWOT ANALYSIS
SWOT Analysis is a situational analysis conducted to see the position of Ideal Tea relative to those of its competitors. The internal analysis is done on two aspects: Strenth and Weaknesses. The external analysis is done considering the opportunities and threats facing Ideal Tea.

STRENGTHS
Enhance Packing Tea will be packed in beautiful colored and water proof packing. Price Price of Ideal Tea will be low as compared to other brands, like Lipton, Tapal etc.

2 Extra Nutritional As compared to our competing product Ideal Tea provides extra nutrients in the form of natural extracts. These extracts provide additional vitamins, calcium, iron, carbohydrates etc. It will not consist of any artificial flavor or color. Eeasy Distribution Ideal Tea will be delivered to the customer as soon as possible according to customer demand. Promotion All local promoting agencies (i.e. Bill Boards, Local Cable Operator) will be hired to aware the people about Ideal Tea.

WEAKNESS
Strong Competition There is strong competition in the industry due to presence of Lipton, Tapal etc. who currently a large percentage of share in the market. Import of Tea The climate of Hazara Division is not supportive of high quality tea plantation. We, therefore need to import tea leaves from Karachi and Peshawar( where it is imported from Sri Lanka and China) to maintain quality standards. Aspect of Brand Loyalty Ideal Tea is entering in a market where the leaders have already been able to make a mark for themselves in due course of time and wit the help of massive and series of successful advertising campaigns. The image of these product is deeply embedded in the minds of the consumers and most of them are fiercely loyal to a set of particular brands. Therefore Ideal Tea has to work har to come up with an image which would encourage the people to switch from their brand and induce the element of loyalty for Ideal Tea in the consumers. Devaluation of Pakistani Rupee:

3 As the tea is important from foreign countries, so the change in the value of Pakistani currency with other countries currencies will have a great impact on the price of tea in local market.

OPPORTUNITIES
Increasing Market Share By achieving good will it will be possible to increase the supply of Ideal Tea in the market. Hence market share will be increased. Economic Factors: Economic growth is prospective in terms of living standards and purchasing power, which may help Ideal Teas growth. Apart from this Ideal Tea faces a growing marketing terms of population.

THREATS
Government Policies: Government Policies like GST, which has been levied upon all consumer products, is a threat to us as to fulfill this criterion and to cover our costs we have to set our prices higher than we initially hoped for. Apart from this the discouraging policies regarding the import of tea leaves is another threat for us. Competitors Brands of tea in the market is also a threat to our product. The fact is that Ideal Tea has to compete against big names like Lever Brothers and Tapal, these have already a good name in the market and are threat for our product. Black Market Another threat that Ideal Tea faces id competition in terms of smuggled product of the same product category through the black market.

OBJECTIVES

4 While formulating the financial forecasts the following assumption are considered. All the sales are on cash basis Inventory is purchased on cash basis as per market demand, and no bulk inventories are maintained. Expenses are paid in cash as and when accrued Salaries are paid on the last day of each month Gradual increase of 20%, 30% and 40% is estimated in sales during the 2nd , 3rd and 4th quarters respectively.

FINANCING
Initially a capital of 2 millions will be invested for starting the operations. Once the business is established, debt financing will be availed if needed. Packing Sizes Product will be launched in pack sizes of 250gms, 500gms and 1 Kg. good quality polythene (water proof) packets will be used, which will be printed with the company monogram and brand name.

Estimated Sales
Pack Size 250 gm 500 gm 1 kg 1st Qtr
3000 1500 1500

2nd Qtr
3600 1800 1800

3rd Qtr
4680 2340 2340

4th Qtr
6552 3276 3276

Total
17832 8916 8916

The marketing efforts will be targeted mainly on the whole sellers of the area, however, the product will also be promoted on the retail stores, shops and hotels etc. promotion of the product on door to door basis can also be started if required.

Cost Estimation
As per the initial survey, main markets for the purchase of tea in bulk are Karachi and Peshawar, where the imported tea is packed in bags of denomination of 40 Kg. the order for

5 purchase can be directly placed with the local agents of main market who are responsible for the delivery of bulk at our ware house. The freight is included in the price and approximate time of delivery after placement of order is three days. The cost price of best quality tea is Rs. 400/- per kg including freight. Packing cost per unit for 250 gm, 500 gm and 1 kg pack sizes is Rs.2/-, Rs.3/- and Rs.4/- respectively which includes the cost of polythene packet and printing. Price is fixed at Rs.500/- per kg keeping a gross margin of 25% on cost. The per unit price for different pack sizes is as under. Per Unit Price

Pack Size 250 gm 500 gm 1 Kg

Price in Rupees
125 250 500

MARKETING STRATEGY
BUSINESS REQUIREMENTS BUILDING AND WAREHOUSES: Rented building will be used as office, packing center and warehouse. Suitable building in Abbottabad near Sarban Chowk that is said heart of Hazara Division. Initially building

6 will be comprised of one office, one hall for packing, two ware houses, one for finished product and one for unpacked lot of tea. MANPOWER REQUIREMENT Initially the following manpower is required. Admin and accounts Executive Packing Staff Marketing and Sales staff Helper Watchman One Two Two One One

Marketing staff will cover the whole target area on the scheduled days. The duty schedule will be adjusted as per requirement. The manpower will be increased if required with increase in business with time. PICK UP VAN A Suzuki pickup van will be purchased the delivery of product in the market. MATERIAL The unpacked tea will be purchased in bulk from the whole sale markets of Peshawar and Karachi through their local agents in Abbottabad who are responsible for delivering the product of required quality and quantity at the spot against cash payment.

ACTION PROGRAM The tea will be packed in their corresponding packets and then sent to warehouses. This tea will delivered to distributors, wholesalers, retailer and some reputed hotels. These people will be awared through marketing staff, and advertising agencies. Initially it is proposed to give some benefit/prize to the people e.g. scholarship to the students, one time meal at a

7 reputed restaurant, on drawing coupon from the tea packet or prize of tea spoon, dinner set etc.

FORECASTED FINAL ACCOUNTS AFTER ONE YEAR OF OPERATION IDEAL ENTERPRISES PROJECTED INCOME STATEMENT FOR THE YEAR ENDED 31-12-2012 Sales Less Cost of 1ST Qtr 1500000 1216500 2nd Qtr 1800000 1459800 3rd Qtr 2340000 1897740 4th Qtr 3276000 2656836 Total 8916000 7230876

8 Sales Gross Profit 283500 340200 442260 619164 1685124

Operating Expenses Salaries Rent of Building Electricity Telephone Depreciation Total Expenses Net Profit -26750 29950 132010 308914 444124 225000 45000 15000 6000 19250 310250 225000 45000 15000 6000 19250 310250 225000 45000 15000 6000 19250 310250 225000 45000 15000 6000 19250 310250 900000 180000 60000 24000 77000 1241000

IDEAL ENTERPRISES Pro-Forma Balance Sheet as at 30-06-2011

Capital & Liabilities
Capital Add Profit Total 2000000 444,124 2444124 0 0 2444124 Rs

Liabilities
Salaries Payable Account Payable

Total Capital &

Liabilites Asset
Fixed Asset Current Asset Cash at Bank Accounts receivables 693000

1751124 0 2444124

Total Asset

QUARTER WISE SALES FOR THE YEAR

1ST QUARTER
QTY SALES 250 gm 500 gm 1 kg 3000 1500 1500 RATE 125 250 500 VALUE 375000 375000 75000 TOTAL

1500000

2nd QUARTER
QTY SALES 250 gm 500 gm 1 kg 3600 1800 1800 RATE 125 250 500 VALUE 450000 450000 90000 TOTAL

1800000

3RD QUARTER
QTY SALES 250 gm 500 gm 1 kg 4680 2340 2340 RATE 125 250 500 VALUE 585000 585000 1170000 TOTAL

2340000

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4TH QUARTER
QTY SALES 250 gm 500 gm 1 kg 6552 3276 3276 RATE 125 250 500 VALUE 819000 819000 1638000 TOTAL TOTAL

TOTAL SALES FOR THE YEAR QTY RATE VALUE SALES 250 gm 500 gm 1 kg 17832 8916 8916 125 250 500 2229000 2229000 4458000

8916,000

CONTROLS
We will be using a computer-based financial management system. With this system we can review our sales and marketing activities on a regular basis. Thus we will be able to reward staff on the basis of profit achieved rather than just on sales. Break even analysis is the point of sales at which sales of product is equal to the cost of good sold. A quarterly/monthly Break Even analysis will be chalk out to see whether our business is in loss or achieving the cost of good sold. If there is any fault then the process of business will be review with new target and work implementation. Monthly feedback for the product will be collected to see the response of customers and hence the product will be innovated according to customers whishes/demand. The wastage of open tea and packing material will be minimized through a strict check balance system.