Group Name: TEESTA

Entrepreneurship
MGT368
Section: 15
Semester: Fall 2019

Business Plan: Leatherville

Submitted to
Md. Mokhles ur Rahman, (MPA Harvard)
Faculty Member

Submitted by

Class Serial No: 18 Name: Zarin Tasnim Autoshi ID: 1620465030 Signature:

Class Serial No: 23 Name: Abdullah Al Mabsur Rafid ID: 1631046630 Signature:

Class Serial No: 28 Name: Md. Ainul Haque Bishal ID: 1711401030 Signature:

Class Serial No: 30 Name: Robin Rahman (Group Leader) ID: 1711948030 Signature:

Class Serial No: 41 Name: Shadman Shahriar ID: 1721750030 Signature:

Class Serial No: 42 Name: Syeda Ramisa Anjum (Editor) ID: 1721885030 Signature:
Acknowledgement
In the name of Allah, the most Gracious, and the most Merciful, we can state that we have
finally been able to draw a conclusion to the assigned task which was to create a Business Plan,
and is of grave importance in our Entrepreneurship (MGT368) course. Every one of us would
like to express our heartiest gratitude and recognition to our respectable lecturer, Mr. Md.
Mokhles ur Rahman, who gave his all for us to get a clear understanding of our course and
which will hopefully reflect on this amazing business plan he permitted us the chance to work
on. This plan gave us the opportunity to go far and beyond in researches which will prove
useful in our upcoming further education and other major courses. And we cannot thank him
enough for the extensive guiding and mentoring that he has provided to us throughout the entire
course which will surely help us all in paving the way for our degree to complete our Bachelor
of Business Administration (BBA). Though we faced some inconvenience but at very last we
finished our business plan as our course in a wanted structure. We believe our course instructor
will be compassionate enough to accept this positively.
Letter of Transmittal
December 5th, 2019

MD. Mokhles Ur Rahman (MPA,Harvard)

Lecturer, Department of Management

North South University

Dear Sir,

We humbly present to you our business plan on Leather Ville. We found this business plan
very much challenging and as well as interesting. This project has helped us to get accustomed
with plenty of understanding regarding the leather and accessories industry of Bangladesh.

We express our gratitude for providing us the opportunity to work on this business plan. This
business plan has helped us learn new experiences in the field of entrepreneurship. With all
sincerity, we hope that you will find this report useful and detailed enough. Having provided
all the information, if there are any further queries, we will be grateful to answer them.

Sincerely,

Zarin Tasnim Autoshi 1620465030

Abdullah Al Mabsur Rafid 1631046630

Md. Ainul Haque Bishal 1711401030

Robin Rahman 1711948030

Shadman Shahriar 1721750030

Syeda Ramisa Anjum 1721885030

Table of Contents
Executive Summary ........................................................................................................................... 1
Introduction ...................................................................................................................................... 2
Name and address of the business ................................................................................................. 3
Partners name and address ........................................................................................................... 3
Nature of the business ................................................................................................................... 4
Statement of the financing needed ................................................................................................ 4
Statement of confidentiality .......................................................................................................... 4
Business Model Canvas ..................................................................................................................... 5
Key activities: ................................................................................................................................ 6
Value proposition: ......................................................................................................................... 6
Customers’ relationship: ................................................................................................................ 6
Customers segment: ...................................................................................................................... 6
Key resources: ............................................................................................................................... 6
Channels:....................................................................................................................................... 7
Cost structure: ............................................................................................................................... 7
Revenue stream: ........................................................................................................................... 7
Mission.............................................................................................................................................. 7
Vision ................................................................................................................................................ 7
Porter's five forces ............................................................................................................................ 7
SOWT analysis ................................................................................................................................... 8
Strengths ....................................................................................................................................... 8
Weakness ...................................................................................................................................... 8
Opportunities ................................................................................................................................ 9
Threats .......................................................................................................................................... 9
Marketing........................................................................................................................................ 10
Customer Analysis ....................................................................................................................... 10
Products ...................................................................................................................................... 10
Pricing ......................................................................................................................................... 10
Men’s products: ....................................................................................................................... 10
Female’s products: .................................................................................................................. 11
Generic Products: .................................................................................................................... 11
Advertising & Promotion ............................................................................................................. 11
 1. Advertising: ...................................................................................................................... 11
2. Digital marketing .............................................................................................................. 11
3. Sales Promotion ............................................................................................................... 12
Placements .................................................................................................................................. 12
1. DIRECT CHANNEL STRATEGY ............................................................................................ 12
2. INDIRECT CHANNEL STRATEGY ......................................................................................... 13
PACKAGING ................................................................................................................................. 13
PEOPLE ........................................................................................................................................ 14
Customer service policy ............................................................................................................... 14
Production Plant Service .................................................................................................................. 15
Manufacturing Process ................................................................................................................ 15
Physical Plant & Outlet ................................................................................................................ 15
Machineries & Equipment ........................................................................................................... 16
Operational plan and organizational plan ........................................................................................ 17
Operational plan ............................................................................................................................. 17
Facility Layout.............................................................................................................................. 17
Description of company’s operation ............................................................................................ 18
Flow of order goods ..................................................................................................................... 19
Collecting raw materials .............................................................................................................. 21
Storing ......................................................................................................................................... 22
Producing .................................................................................................................................... 23
Assuring quality ........................................................................................................................... 24
Delivery ....................................................................................................................................... 26
Business location and requirements ............................................................................................ 26
Organizational plan ......................................................................................................................... 26
Form of ownership ...................................................................................................................... 26
TERMS OF AGREEMENT ............................................................................................................... 26
Reason behind choosing this form of business ............................................................................. 27
Partnership form ......................................................................................................................... 27
Identification of partners or principal shareholders: .................................................................... 27
Human resource Management plan................................................................................................. 32
Functions of HR ........................................................................................................................... 32
Recruitment and Selection........................................................................................................... 32
Orientation .................................................................................................................................. 33
 Maintaining Good Working Conditions ........................................................................................ 33
Managing Employee Relations ..................................................................................................... 33
Training and development ........................................................................................................... 33
Risk Management............................................................................................................................ 34
Product Risk ................................................................................................................................ 34
Poor performances of the technology ...................................................................................... 34
Late Product Development ...................................................................................................... 34
Core technology becomes obsolescent .................................................................................... 34
High products failure rates ....................................................................................................... 35
Operational Risk .......................................................................................................................... 35
Key Staff .................................................................................................................................. 35
Product delivery dates are missed ........................................................................................... 35
It system fail ............................................................................................................................ 35
Market Risk ................................................................................................................................. 36
Competitors release superior earlier products ......................................................................... 36
Competitor gain control of the target customers ..................................................................... 36
Financial Risk ............................................................................................................................... 36
Takes longer to raise funds than expected ............................................................................... 36
Operational cash burn is higher than budgeted ........................................................................ 36
Revenues stay too long in receivables ...................................................................................... 36
Core technology prices increase............................................................................................... 37
Risk Prevention............................................................................................................................ 37
Financial Management .................................................................................................................... 38
Estimated Project cost ................................................................................................................. 38
Assumptions ................................................................................................................................ 39
FINANCE SOURCING .................................................................................................................... 40
Bank Loan .................................................................................................................................... 40
Sales forecast .............................................................................................................................. 40
Pro Forma Income Statement ...................................................................................................... 41
Pro Forma Cash flow statement ................................................................................................... 42
Pro Forma Balance Sheet ............................................................................................................. 43
Payback Period Analysis............................................................................................................... 43
Ratio Analysis .............................................................................................................................. 44
Appendix ......................................................................................................................................... 45
Group Members .......................................................................................................................... 45
Cost Breakdown .......................................................................................................................... 47
Executive Summary
This plan is about a business plan of the designable leather goods manufacturing company.
“Leatherville”. It’s a company that wants to contribute to the respect of the patriotism every
Bangladeshi living outside Bangladesh bears in his heart. Our greatest strength is the raw
materials availability and skilled worker conditions of Bangladesh Thus “Leatherville”
decided to fill up the market gap and fulfill the needs, wants and demands of this mass market.
Leatherville customized designs. Leatherville customers will be able to customize their
products with different types of leather (Full Grain Leather, Top Grain Leather, Corrected
Grain Leather, and Bonded Leather). The additional benefit that Leatherville will provide is
the home delivery service of the products. Thus the objective of Leatherville is to let its users
feel like home even if they are not. We are a group of six individuals that will be owning and
operating this business and our ultimate goal will be making money. Hence, we have focused
on several areas in this business. One of those areas is Operations Management. This is an
area where we will design, operate and improve the systems that will deliver our business’s
products. We have emphasized the Finance department in this business. This is the department
that will plan, organize, audit, account for and control the business’s finances. As we have
already mentioned, there are already many individuals with the same idea. As a result, we
intend to enter the market through what is known as market penetration pricing. We will set
low initial prices for our products and raise the prices later on. As for promotion of our
products, we will be doing that by newspaper advertisements, banner advertisements, social
media advertisements, etc. As for financing, we will rely on both internal and external sources
of financing. 60percent of the capital will be contributed by the business owners, whereas 40
percent of the financing will be collected from the investors as a loan. After conducting
thorough research and feasibility tests, we hope that we can succeed from owning and
operating this business. Lastly this plan shows the projections and forecasts how this business
might turn in future.

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Introduction
Leather Industry has been one of the traditional industries operating at present. The hides and
skins of animals are the source of leather and preserving hides and tanning them into leather
has become an important industry. Leather making is now a scientifically based industry, but
still retains some of the charm and mystery of the original craft. Animal skin that has been
processed to retain its flexibility, toughness, and waterproof nature is known as leather.
"Leather tanning" is a general term for the numerous processing steps involved in converting
animal hides or skins into finished leather.

Tanning is the final process in turning hides and skins into leather. Tanning involves a complex
combination of mechanical and chemical processes. The heart of the process is the tanning
operation itself in which organic or inorganic materials become chemically bound to the
protein structure of the hide and preserve it from deterioration. The main chemical processes
carried out by the tanner are the UN hiring, liming, tanning, neutralizing and dyeing.

In the tanning process, animal hides and skins are treated to remove hair and non-structured
proteins and fats, leaving an essentially pure collagen matrix. The hides are then preserved by
impregnation with tanning agents. Leather production usually involves three distinct phases:
preparation (in the beam house); tanning (in the tan yard); and finishing, including dyeing and
surface treatment. A wide range of processes and chemicals, including chrome salts, is used
in the tanning and finishing processes.

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Name and address of the business
Name: “LEATHERVILLE”

Address: Plot no: 88, 89, 90 Tannery industrial park, Hemayetpur, Savar, Dhaka,
Dhaka1340, Bangladesh (Factory) Outlet: House: 121/B Sher-e BanglaRoad, Hazaribag,
Dhaka 1205.

Company Official Logo

Partners name and address

SL NAME ADDRESS

1 Zarin Tasnim Autoshi 189, Azimpur, Lalbag, Dhaka 1205

2 Abdullah Al Mabsur Rafid 698, west Shawrapara ,Mirpur, Dhaka
1216
3 Robin Rahman H#52/A,R,#9/A,Dhanmondi Dhaka
1209
4 Syeda Ramisa Anjum H#68,R,#08,Block#B,Bashundhara
Dhaka 1229
5 Sadman Shahriar 29/A Isha Khan R/A, Fuller Road,
University of Dhaka 1217
6 Md. Aninul Haque Bishal H#13,Ward no 08,West Rasulpur,
Zinzira, Dhaka 1310

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Nature of the business
Our business will be based on the partnership of us six people. There will be 2 core
activities in our business. One is manufacturing and another one is selling. Goods such as
leather footwear, leather bags, leather wallet, leather belt, leather garments. Basically, we will
sell our products inside our country and export our products outside also. Our main raw
materials will be skin, hides and wet-blue (half processed leather). Leather products in recent
time is considered to be one of the most well-known and profitable sector in Bangladesh for
carrying out business operation. So, this is the reason we have decided to invest in this sector
and make the best use of it.

Moreover, the demand for goods like leather footwear, leather bags, leather wallet, leather
belt, leather garments increasing in a rapid pace with the increase of environment pollution.
Mainly in our company we will be starting with one factory and 100 workers. And if the
venture turns out to be a profitable and successful one, we will be able to reach our break even
within a time span of 3-4 years.

Statement of the financing needed

Quite a certain capital is needed to establish the business successfully, and run its operations.
First of all, the owners will be required to sign a contract of ownership, since there will be few
legal requirements which must be met, and formalities to fulfill in order to establish the
business. In order to cover all the fixed costs, and to complete the legal paper works, the
owners will need a significant amount. We plan to meet our finance requirements through
personal sources including our friends, relatives, and our respective parents and also we will
consider a loan from Bank. Later once, we start generating profits through our business, we
will be able to repay all our debts, and as well as meet other expenses incurred by the business,
such as the salaries.

Statement of confidentiality
Information and data provided in this business plan are strictly confidential and are
supplied on the understanding that they will be held confidentially and not disclosed to
third parties without the prior written consent of the owners. The information and analysis
contained herein are the confidential and proprietary materials of “Leather Ville”
Company. No part of this publication may be reproduced in any form or for any purpose
without the express written permission of “Leather Ville” Company. The information
contained herein may be changed without prior notice. It is also accepted by the reader of
this business plan that the information furnished in this business plan, other than

Page | 4
information that is in the public domain, may cause serious harm or damage and will be
kept in the strictest confidence.

Business Model Canvas

Key Partners Key Activities Value Customer Customer

Proposition Relationships Segments
 Suppliers  Manufacturing of
the accessories 
 Designers
 Distribution of the
Newness  Promotional  Mass
and incentives market
 Labors products to  Exhibitions
 Sales man
customers
superior
design  Social  Middle
Media and
 Customized Higher
Group
product middle
 Assurance
 In low price of quality
class
standard  Boosting
quality Sales
product.
 Offering
similar
value at a
Key Resources lower price Channels
for price
 Building sensitive  Wholesaler
customers.  Delivery
 Vehicle, Machine
 Online
 selling
 Distributing  Physical
network(Facebook store
, Instagram  Evaluation
pages)  Awareness

 Human resources
After sales
service
 Logo and brand
value
 Financial
guarantees

Cost Structure Revenue Streams

 Factory setup  Finished good sales

 Machineries  Renting
 Wages and salaries
 Production cost
 Development cost
 Promotion campaign

Page | 5
Key partners:
The Key Partnerships Building Block describes the network of suppliers and partners that
make the business model work Companies forge partnerships for many reasons, and
partnerships are becoming a cornerstone of many business models. Companies create alliances
to optimize their business models, reduce risk, or acquire resources. So our main key partners
will be suppliers, Designer, Labor, and Sales Executive.

Key activities:
The Key Activities Building Block describes the most important things a company must do to
make its business model work Every business model calls for a number of Key Activities.
These are the most important actions a company must take to operate successfully. Our main
key activities are divided two parts one is production and another one is selling. All of other
activities are correlated with this part.

Value proposition:
The Value Proposition is the reason why customers turn to one company over another. It solves
a customer problem or satisfies a customer need. Our customers will get some special value
like Newness and superior design in products, Customized product, Quality full product in
low price.

Customers’ relationship:
The Customer Relationships Building Block describes the types of relationships a company
establishes with specific Customer Segments A company should clarify the type of
relationship it wants to establish with each Customer Segment. Relationships can range from
personal to automate. We will follow some steps for maintain good customer relationship like
promotion incentive, personal contact with customer, assurance of quality, boosting sales,
Exhibitions etc.

Customers segment:
Customers comprise the heart of any business model. Without (profitable) customers, no
company can survive for long. In order to better satisfy customers, a company may group them
into distinct segments with common needs, common behaviors, or other attributes. A business
model may define one or several large or small Customer Segments. An organization must
make a conscious decision about which segments to serve and which segments to ignore. Our
main target will be mass market and also target middle and higher middle class.

Key resources:
The Key Resources Building Block describes the most important assets required to make a
business model work every business model requires Key Resources. These resources allow
an enterprise to create and offer a Value Proposition, reach markets, maintain relationships
with Customer Segments, and earn revenues.

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Channels:
The Channels Building Block describes how a company communicates with and reaches its
Customer Segments to deliver a Value Proposition Communication, distribution, and sales
Channels comprise a company's interface with customers. Channels are customer touch points
that play an important role in the customer experience. We will use different channels to
deliver value proposition like Wholesaler, Delivery Online selling, Physical store, Evaluation,
and Awareness after sales service.

Cost structure:
Cost structure Creating and delivering value, maintaining Customer Relationships, and
generating revenue all incur costs. Our big cost will be for factory setup, Machineries. Then
our regular or monthly cost will be employees’ salaries production cost, maintenance cost.

Revenue stream:
The Revenue Streams Building Block represents the cash a company generates from each
Customer Segment (costs must be subtracted from revenues to create earnings) our revenue
will come from selling finish goods and renting.

Mission
Our mission is to establish world class leather processing company that in our own capacity
will favorably compete with leaders in the leather tanning and finishing industry. We want to
build a business that will be listed amongst the top 10 leather processing brands in the
Bangladesh

Vision
Our vision is to establish standard leather processing company whose products will not only
be sold in Bangladesh, but also throughout the International market and other countries of the
world.

Porter's five forces

Michael Eugene Porter has developed the idea to aid firs for analyzing the competitive forces
in any industrial environment. He also stated that the stronger is each of these forces, the more
limited is the ability of establishing companies to increase prices and gain higher profits
(Porter, M.E.).The leather and tannery industry in Bangladesh have limited entry for new
entrants, due to huge capital requirements. Moreover, the government of Bangladesh has
recently set restrictions about introducing new leather and tannery industry, making it dearer
for the infants. The foreign buyers hold stronger powers, as they have the opportunity to switch
between competitors – like India, Pakistan, etc. The suppliers’ power within the country is
very high, due to collection of basic raw hides and skins. Leather industry itself has huge

Page | 7
substitutes, like – jute, the golden fiber of Bangladesh for bags, textile industry, which has
huge prospects in fashion industry. The rivalry between industries, is very strong, they hold
strong ties with the government. Other countries, expertizing in this industry, are focusing at
the 8 research and development including the environment friendly tanning process, which is
higher in other nations compared that of Bangladesh.

SOWT analysis
SWOT analysis (alternatively SWOT matrix) is a structured planning method used to evaluate
the strengths, weaknesses, opportunities and threats involved in a project or in a business
venture.

Strengths
The leather goods producing enterprises only a few in number ( 15-20 units) with product lines
relating to travel goods, suitcases, briefcases and fashion accessories, along with belts, wallets,
hand bags, case holders etc. for overseas export. Export of leather goods made of Ostrich bird
leather, is an unique collection amongst many other exciting products made of goatskins, cow
calf, Buff-Calf etc.. Articles made of ostrich bird leather are exported to Australia (ostrich bird
leather is imported from South Africa and Australia). Bangladesh has also entered the field of
Leather fashion garments with items of distinction. The leather goods manufacturing firms use
basically finished leather and lining leather as raw materials and all are collected from local
sources.

About 95% of leather and leather products of Bangladesh market is abroad, mostly in the form
of crushed leather, finished leather, leather garments, and footwear. Most leather and leather
goods go to Germany, Italy, France, Netherlands, Spain, Russia, Brazil, Japan, China,
Singapore and Taiwan. Value addition in these exports averages 85% local and 15% foreign.
About 100 modern tannery units are now in operation in the industry. These are located mostly
in the Savar area of Dhaka division. In 1998, the sector exported 178 million sq. ft of leather
and earned $160 million. The country`s share in the world leather market is 2%. The export
of finished products such as shoes, slippers, leather jackets, hand gloves, bags, purses, wallets
and belts also earn a sizeable amount of leather products to penetrate new market segments.

Weakness
The industry is now heavily concentrated at Savar in Dhaka, with three-quarters of the total
number of registered tanneries located here. Besides, a large number of tanneries at the cottage
level, estimated at over 100, are located at Savar. Such a concentration is likely to offer a

Page | 8
number of benefits in the form of sharing knowledge, raw materials, spare parts by the
investors, and also helping a rapid development of vertical and horizontal integrations of the
industry centering on the locality. Firstly, the area was originally developed as a residential
locality and, consequently, its narrow street and limited sewerage facilities are highly
inadequate to meet the needs of a growing Industry like leather manufacturing. Secondly, the
unplanned growth of the industry at Hemayetpur and the limited land area available in the
locality has not made it possible to make any provision for the much needed effluent treatment.

Opportunities
There is an enormous scope for entrepreneurs and investors. The sector is still catering to the
low-end export market. In order to advance it must move to the next levels. Business friendly
policy: The sector needs business friendly policy by Government to increase the investment.
Need more skilled workers and managers: Although there are unskilled competitive labor
forces, there is shortage of skilled workforces, managers and entrepreneurs. Limited access to
market - Bangladesh has a limited or small share (~0.56%) in the global business, so there is
a tremendous opportunity to grow to capture more market share around the world. Vietnam
can be a benchmark for Bangladesh who imports 70% of raw materials and exports Shoes and
footwear products: USD 6.549b, Bags & leather handbags: USD 1.289b

Threats
Limited access to market information: A deeper, more widely held understanding of market
trend in terms of quality, fashion, leather product prices, competitors, importers and
consumers’ preferences, and anticipated regulations and restrictions needs to be developed in
Bangladesh. Poor cooperation between firms/ stakeholders: strong connections between value
chain members for a strong sector position, the stakeholders should hold their hands together
for mutual benefits. Unfortunately this is still not the case. Low product quality and
productivity: Product quality and overall productivity is always a concern for this sector. The
product quality means the reliability and aesthetics of the finished products. It stems from the
quality of basic raw materials including flayed hide/skin and chemicals, the overall
workmanship and the machines/process used in the industry, so the sector still today target 12
mostly the low end product market. Outdated Machineries - Traditional status quo mind set of
the owners; they lack information on appropriate machineries, sources, prices etc. They also
lack awareness on incentives for product / productivity improvements, are using traditional
tanning and manufacturing methods and process

Page | 9
Marketing
Customer Analysis
For Leatherville, the entrepreneurs have targeted the young adults. Leather lovers can have
affordable leather products starting from wallet, belt, shoes, bags and jackets. As young adults
are more into fashion and leathers, so the entrepreneurs will be targeting them and will produce
the latest designs for the target group.

Products
Leatherville is going to offer leather accessories for both men and women. The products are
categorized into 3 parts; Men, women and generic. For men, there are going to be wallets,
belts, jackets and shoes. For women, there are going to be purse, wallets, jackets and shoes as
well. There will also be passport holders, card holders and duffle bags. Every product will
have different design and will be of different color as well.

Pricing
Based on the total cost of the individual product that the entrepreneurs have incurred they
would put the least amount of mark-up possible so that they can provide the accessories at a
reasonable and affordable price. Following their philosophy the prices are as follows:

Men’s products:
Items Cost per unit in Percentage Mark- Price Tag in BDT
BDT up
Wallets 450 78% 800
Shoes 1800 67% 3,000
Jacket 6500 54% 10,000
Belts 350 71% 600

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Female’s products:
Items Cost per unit in Percentage Mark- Price Tag in BDT
BDT up
Wallets 650 78% 1,150
Shoes 1800 67% 3,000
Jacket 5500 54% 8,500
Bags 1400 71% 2,400

Generic Products:
Items Cost per unit in Percentage Mark- Price Tag in BDT
BDT up
Card Holder 400 77% 710
Passport Holder 550 67% 920
Office Bag 1200 54% 2,040
Travel Bag 2400 67% 4,000

Advertising & Promotion

1. Advertising: Leatherville will develop print advertisement for local magazines such as
Noksha, mirror and also use them for leaflets.

2. Digital marketing: As Leatherville will provide its products throughout Nation, it’s
very necessary to capture people’s attention. So, leatherville will invest a huge portion
in digital marketing. The types of digital marketing will be followed are;

 Display advertisement: display advertisements in the form of

banner advertisements of Leatherville products will be posted in
different Dhaka based website which are related to fashion.
 Search engine optimization: Leatherville will have a presence in
different social media sites such as Facebook, instagram, snapchat
and will have its own website. It will regularly post contents in all
the sites to stay active which will also help them to stay in the first
page of popular search engine Google Inc.

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  Social media marketing: There will be a facebook page of
Leatherville where on a regular basis the contents will be posted.
Along with the prices, people can see every design of leatherville. It
will also develop an Instagram account where the pictures of the
products will be posted. The brand will also have a snapchat account
where sneak peeks of the products will be shown.
 Referral marketing: The products will be promoted through
different social media influencers and there will also be a referral
code given by the influencers.
15% discounts will be given on Leatherville products by using
the referral code.
 Website: A website will be developed for Leatherville so that it will
be easier for the people to learn more and see more varieties of
products from Leatherville.
3. Sales Promotion: In order to attract the customers, the entrepreneurs of leatherville will
conduct the following sales promotional activities ;
 Coupons: the entrepreneurs of leatherville will provide them a
coupon on their first purchase and they can use their coupon on their
second purchase and get 10%. There will also be a QR code in the
physical store through which the customers can avail 5% discount
upon scanning the code. Through this the retention of the customers
will be assured.
 Price-offs: During black Friday, 11/11 customers will get a big
discount on some of the products as well.

Placements

Leatherville will use both direct channel strategy as well as indirect channel strategy to deliver its
products to its customers.

1. DIRECT CHANNEL STRATEGY: Leatherville will use a direct channel strategy to

deliver its products to its customers. The following 2 types of direct channel strategies
will be used to deliver its products to the customers

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  Company Owned Store: Leatherville will have its own physical store where
the customers can visit and buy the products.

 E-Commerce: As it was mentioned above, Leatherville will have its own
facebook page, instagram account as well as website through which the
customers will be able to stay connected and up to date with the new products.
The website and facebook page will have all the relevant information and
contacts of the manager.

2. INDIRECT CHANNEL STRATEGY: As mentioned earlier, the

entrepreneurs of Leatherville will partner with Pathao to deliver its
product throughout Bangladesh so that people from different
districts can order products from leatherville.

PACKAGING

Leather Ville uses eco-friendly products for attractive packaging. We use non-woven
materials for our packaging. It helps us to minimize our costs and at the same time it
helps to maintain best quality of packaging.

The purpose of product packaging is to protect the product from damage. Product packaging
not only protects the product during transit from the manufacturer to the retailer, but it also
prevents damage while the product sits on retail shelves. Leather Ville packaging has an extra
layer in it to protect our product from any kind of damages.

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How a product is packaged may be what attracts the consumer to take a look on the product as
is sits on store shelves. For this reason, we keep our package design so simple and very quality
products are used for our packaging.

Packaging also plays an important role for portraying information about the product. We added
a thankyou note and the origin story of our company with our products.

PEOPLE
For the physical store, Leatherville will have 2 sales representative and one store manager.
The sales representative will work full time and will have a good amount of knowledge
regarding the products. The store manager will look after the accounts as well. There also will
be 2 page managers for handling social media platforms.

 Induction Training: First of all, the entrepreneurs will provide induction training to
all of its employees, so that the employees are aware of the business’s goals and
objectives.

Customer service policy

Customers will get full benefits from the entrepreneurs as fulfilling their satisfaction
will be their foremost goal. There will be return policy for the customers if there is any
defect in the products. Also, there will be polish service for the products if the product
looks fade. 

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Production Plant Service
Manufacturing Process
Leatherville is a manufacturing and retail oriented business which will focus on the production
of handcrafted leather accessories and also selling them through their distribution channel.
The key activities during the manufacturing stage would require certain raw materials such as
finished leather for production. This raw material is secured from suppliers located in
Hemayatpur in Savar. The suppliers being located in the same area makes it easier to maintain
the supply chain also follow just in time production. The workers work in two shifts during
the day. The first shift starts at 10am in the morning where the workers start the day by cutting
patterns of the design allocated for production. After the patterns are done in accordance of
the accessories that is to be made manufactured, finished leather is shaped into those patterns
to start off the process. The cuts pieces of leather is brought to shape with stitching them
together and all other necessary accessories is added to the product and then moved to the
finishing and coloring department which takes care of the finishing touches and glaze of the
product. The final procedure is to put the product through quality check to look for any defects
in the products. Defected products are send back to the production center and the quality check
passed products go to finished goods storage

Physical Plant & Outlet

Since Leather Ville would be engaged in both manufacturing and retailing of their products
both physical plant and an outlet would be required.The factory is to be set up at Hemayetpur
as it is now the center hub of tannery. The factory space is to be subdivide so that it can
accommodate the various machineries and storage space along with the production space.
For the location of the outlet we choose Hazaribagh, as the rent is comparatively cheaper than
commercial spaces in other areas.

Page | 15
Machineries & Equipment
The following machines and equipment would be required to carry out production procedure:
Item Units purchased Cost in BDT
X-acto/Industrial Knife 20 4,000
Scissors 15 7,350
Adjustable V-gouge 10 21,000
Rotary Punches 10 25,000
Mallet 5 3,000
Quartz slab & poundo 5 30,000
board
Cutting Mat 2 11,000
Hammer 10 6,000
Wire Cutter 5 7,500
Clamps 20 20,000
Rulers 15 5,700
Pencils 36 360
Skiving Machine 5 220,000
Sewing Machine 20 150,000
Stamping Machine 2 40,000
Needle 5 sets 22,500
Thread 11 sets 5,400
Rivet Setter 5 21,500
Cutting wheel 15 24,000
Computer 4 800,000
Total cost 1,401,810

The total cost required to purchase the necessary equipment and machines is Tk 1,401,810.

Page | 16
Operational plan and organizational plan
Operational plan
Facility Layout

Page | 17
For an organization it is important to have an effective and efficient manufacturing unit.
Special attention should be given while designing facility layout. Facility layout considers
available space, final product, safety of users and facility and convenience of operations.

A good and effective facility layout ensures that there is a smooth and steady flow of
production material, equipment and manpower at minimum cost. Facility layout looks at
physical allocation of space for economic activity in the plant. Therefore, main objective of
the facility layout planning is to design effective workflow as to make equipment and workers
more productive.

A facility layout should have less movement of work and should not have cross functional
process in it. Leather Ville keep these things in mind and design their facility layout
accordingly.

In our facility we ensure less movement of work and setup our plant accordingly. From
collecting to shipping our product we maintain a flow of work. No center should interrupt
other center.

To maintain all of these centers us and supervisors and a set of engineers to ensure a smooth
flow of work between facilities.

We have very worker friendly facility. For Leather Ville workers we left enough space into
our facility. We have prayer, recreation, and lunch room for our employees. We have a garden
into our facility.

Description of company’s operation

Leather Ville’s primary target is to provide their customers a very good quality of product with
a very reasonable price. So, we keep that in mind and try to cut down our costs as much as
possible. We designed our facility layout for an efficient workflow. Firstly, we have dockyard
for receiving our raw material. A group of expert members from Leather Ville check the raw
material and ensure its quality. We have a storage for raw materials. Then we process the raw
material in our working unit. Then the processed leather goes to Designing unit. Designing
unit has its leaser cutting machine. According to our customers need we outline our leather.
The designing center’s main purpose is to make design according to recent trend. Designing
unit make and improve design and come up with new, stylish and trendy up to date design for
their target customer.

Page | 18
Cutting center then cut those leather with a great care and send it to the production center.
Production center will check the cut out of leather and give it a shape. We currently produce
shoes, jacket, bags, wallet and belts. So, we have specialists of all these field in our production
center. Then those halve processed leather cut out make their way to stitching center. A team
of expert will stich those products.

Color and burnishing unit will color and give those products a finishing touch. A special coat
of color is applied to increase our product’s life span.

Then finished products are shipped into the quality center. Three quality control officers
ensure highest quality of our product.

Then after packaging our product we keep them into our inventory. With the help of shipping
dock, we deliver or products to our showroom and customers.

Flow of order goods

To ensure a smooth flow of order good Leather Ville is depend on its IT (information
technology) sector. To maintain and record of our products we use our website, Facebook
page, phone center and google form.

We have an order taking team. They collect orders from the whole country. We also accept
orders from abroad. With the help of Leather Ville Website, Facebook page, call center and
google form out team combine all our orders into a excel file and send it to the factory to
process customer’s orders accordingly.

With the help of our efficient facility we try our best to maintain a minimum lead tine.
Customer can track their order through our website.

Page | 19
Leather Ville Website

Leather Ville Facebook Page

Page | 20
 Ordering Process of Leather Ville

Collecting raw materials

We collect raw materials from Hamayetpur. We order our raw material in square fit basis. Our
supply chain manager maintains all of the supply process. After raw material reached at our
factory quality control manager check all of the products and we store raw materials into our
raw material storage.

The other accessories for making belts, bags, and jacket come from bongshal. We maintain a
good relation with our suppliers. It will help us to get our desired products in time.

Leather Ville try to collect the best quality of leather at the lowest rate. Our good maintenance
helps us a smooth flow of raw materials. In our facility we have a storage for leather which
help us to run our production process in crisis moment.

Raw leather needs a room with proper ventilation. In our storage center we ensure twenty-four
hours of continuous air flow to maintain a good quality of leather.

Raw materials Use of raw material Supplier’s location

Leather Jacket, wallet, belt, card Hemayetpur
holder,bags,shoe
Chain, button, belt Bag, jacket, belt Bongshal, Dhaka
buckles
Shoe sole Shoe Bongshal, Dhaka

Page | 21
Storing
In order to avoid damage, storage must be carried out properly. Leather Ville has storage in
their facility. We collect raw materials from our suppliers and we have storage to reserve these
raw materials. The store should be well ventilated. We ensure twenty-four hours of air
ventilation. We reserve a certain amount of our raw materials in our inventory for hedge
against crisis moment. Leather is usually stored in shelves, on racks or left hanging

The leather properties of elasticity and softness are in relation to a certain moisture content.
Therefore, leather needs to be stored in well-ventilated areas that are not too dry, at a uniform
temperature of 15 - 20 ° C and a relative humidity between 50 - 70%. Higher temperatures
should be avoided, lower temperatures up to 10 ° C are not a problem. But fluctuating
temperatures and constant changes in humidity should be avoided as far as possible as this
promotes aging of the leather.

The finished goods make their way to finished good storage unit after passing quality control
criteria. After proper quality control process and packaging our products are ready for
shipping. In the meantime, processed products are kept in the storage room. For processed
goods storage the room should be dry and well ventilated. Leather Ville keep these matters in
mind and make their storage accordingly.

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Producing
Product Name Producing capability per day
Wallet 100 Pieces
Jacket 15-20 (depends on design)
Bag 300 pieces
Shoe 30 Pairs
Belt 200 Pieces
Passport Holder 200 pieces
Card Holder 200 Pieces

This table show the highest capability of producing an individual item. According to orders
we schedule our process time. The smooth flow of communication between the factories
ensure the highest production per day. To maintain all of this operation we have a very skilled
work force.

The table below illustrates the total number of employees Leather Ville has appointed:

Designation Number of workers

Quality Control officer 4
Supervisor 4
Processing unit worker 25
Designer 4
Cutting center operator 10
Production center 20
Stitching center 15
Color and finishing 4
Packaging 3
Store Manager 1
Salesman 2
Facebook & Instagram page manager 2
Guards 4

Page | 23
The salary scale of the employees are as follows

Designation Number of workers Salaries & Wages

(Monthly) in BDT
Quality Control officer 4 9,000
Supervisor 4 11,000
Processing unit worker 25 3,500
Designer 4 15,000
Cutting center operator 10 3,500
Production center 20 4,000
Stitching center 15 4,500
Color and finishing 4 3,000
Packaging 3 3,000
Store Manager 1 12,000
Salesman 2 8,000
Facebook & Instagram 2 5,000
page manager
Guards 4 6,500
Total 490,000

Assuring quality
This is the followed phases of quality assurance by Leather Ville.

Page | 24
For maintaining best quality of product, we need good inspection. But at the same time, it is
costly to inspect all of our products. To maintain best quality of products and minimize the
cost at the same time we follow this diagram.

We emphasis inspection before/after these actions:

 Raw materials and purchased parts

 Finished products

 Before a costly operation

 Before an irreversible process

 Before a covering process (painting/Brushing/final assembly)

These inspection helps us to assure best quality of product.

As, Leather Ville’s primary target is to provide their customer with a very high quality of
product at a cheap rate. So, we take special care to maintain best possible quality of product.

We have four quality control officers. They ensure the best quality of processed product for
shipping. They thoroughly check the product if any defect is found they send those products
for recycling.

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Delivery
We always try to minimize our lead time. For making our delivery faster we use third party
delivery agency Pathao. Moreover, we have two delivery trucks for smooth flow of delivery
system.

Business location and requirements

The business location plays a vital role in the day to day running of the operations. Therefore
the entrepreneurs decided to set up the in Hemayetpur since the tannery industry has shifted
over there. A lease would be taken for the factory space as setting up costs would be too much
to bear. The space required for the factory would be 12,000 square feet. The operations would
be divided so that the factory space can be utilized to its maximum capacity.

The shop outlet is located in Hazaribagh due to rent convenience and easy transportation of
the goods from the factory to the outlet. The store would be 2400 square feet in size. This
would help to accommodate all the products in a sophisticated manner.

Organizational plan
Form of ownership
The entrepreneurs of Leather Ville will operate the business in partnership, where profits and
losses will be equally distributed among the partners. The restaurant is basically going to be a
Small and Medium Enterprise (SME) where capital is going to be contributed by each partner,
and all the partners are going to enjoy unlimited liability.

TERMS OF AGREEMENT
Percentage of ownership and division of profit and loss: As mentioned earlier, each partner of
the business venture will be enjoying equal amount of profit and loss, and therefore, each
partner will be bearing 16.67% of profits or loss incurred by the business.

Length of Partnership: The length of partnership is undetermined, since the business will
continue to run till a date which has not yet been determined.

Decision Making Process: Each partner of the business will have equal right to make a
decision, however, the implementation of the decision will rely on votes to avoid any conflict.
Votes will be raised in case partners have distinctive views; otherwise mutual decisions will
be made.

Dissolution: The business venture will be dissolved only with the mutual consent of all
partners.
Page | 26
Reason behind choosing this form of business
The entrepreneurs had conducted a survey which lead to the conclusion that the demand for
leather accessories in the market was increasing. To exploit this opportunity and also the fact
that there aren’t much domestic companies dominating in this sector. Therefore eventually the
entrepreneurs all agreed upon the fact that they are going to establish a domestic brand that is
going to lead the market in the near future and meet the unmet needs of the customer base.

Partnership form
The same amount of capital is to be share among the six entrepreneurs therefore sharing profits
in equal proportions. The business is based on the manufacturing and retailing of leather
accessories. The other principles and laws would be followed accordingly to Partnership act
1932. The partnership form is handwritten and registered.

Identification of partners or principal shareholders:

ABDULLAH AL MABSUR RAFID

Designation Chief Executive Officer

Education Bachelor of Business Administration, North

South University

Very innovative and hard working person.

Background Good skills about any type of organization
related Problem solving. Personal experience
about leather industry last 5 years.

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 SHADMAN SHAHRIAR

Position Chief Operation Officer

Education Bachelor of Business Administration, North
South University
Background Shadman shahriar is a very sincere and a
very hard-working person, who is willing to
give his all to what he places a
commitment. At present, he is studying in
North South University to complete His
Bachelors of Business Administration in
management. However, it is his dream to
become an entrepreneur at a very early age.
He is willing to start a business in which he
has keen interest in, and the leather industry
is a field with which he is very passionate
about.

Page | 28
 ROBIN RAHMAN

Position Vice President of Finance

Education Bachelors of Business Administration,
North South University
Background A very studious, and hard-working person
who is currently studying in North South
University to complete his Bachelors of
Business Administration in Finance. He is
very passionate about his work life, and has
keen interest in the field of finance.
He likes to play with numbers, solve
arithmetic problems, and draw financial
statements. He has 2 years of experience in
preparing financial statements, as he had
worked as an accountant at his relative’s
office few years back.

Page | 29
 AINUL HAQUE BISHAL

Position Chief Risk Officer

Education Bachelor of Business Administration, North
South University

Background A current student of North South

University. Before even completing his
higher secondary education, he has been
involved with numerous amount of small
businesses such as workshops of mobile
phones, watches etc. His primary job was to
find out the efficiency and effectiveness of
significant risks and related opportunities to
these businesses. Thus making him the
perfect choice for the position of CRO.

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 SYEDA RAMISA ANJUM

Position Vice President of Marketing

Education Bachelor of Business Administration, North
South University
Background A highly motivated and diligent
undergraduate marketing
Student, looking forward to meet the needs,
wants, and demands of the target audience
of the business plan, while being able to
meet her business goals and objectives at
the same time.
Apart from studies, she has keen interest in
Marketing, and has learnt to be proficient in
developing interesting contents such as
print advertisements, Quick Response (QR)
Codes, and GIFs.

Page | 31
 ZARIN TASNIM AUTOSHI

Designation Vice President of HR

Education Bachelor of Business Administration, North

South University
Good communication skill & analytical
Background ability in HRM. Now she is studying Human
Resource Management in North South
University for her professional degree.

Human resource Management plan

Functions of HR
Since every organization is made of people, HRM is all about acquiring services of people,
developing their skills, motivating them to the foremost level and making sure that they
continue to maintain their commitment towards the organization.

Leather Ville’s HRM is concerned with the management of employees from requirement to
retirement. There are many functions that Leather Ville’s HRM is doing to maintain a good
human resource in our company.

Recruitment and Selection

Recruitment is the process of captivating, screening, and selecting potential and qualified
candidates based on objective criteria for a particular job.

Before starting the process of recruitment, Leather Ville execute proper staffing plans and
grade the number of employees they are going to need. Forecasting of the employees should
depend upon the annual budget of the organization and short-term and long-term goals of the
organization.

Page | 32
Recruitment and selection process are very important to every organization because it reduces
the costs of mistakes and maintain a proper flow of work with a minimum cost.

Orientation
Leather Ville provide a thorough orientation to the new employees. This is the fundamental
step to help a new employee to adjust himself with the employer and with his new job.
Employee orientation program includes the objectives and goals of the Leather Ville and how
the employee can help to achieve the long-term and short-term goals of this organization.

Maintaining Good Working Conditions

It is the responsibility of the human resource management to provide good working conditions
to the employee so that they may like the workplace and the work environment. It is the
fundamental duty of the HR department to motivate the employees. Our HRM try to motivate
our employees with Financial and non-financial benefits.

Managing Employee Relations

Employees are the pillars of any organization. Employee relationship is a very broad concept
and it is one of the crucial functions of human resource management

Our HRM Organize activities which will help to know an employee at the personal and
professional level. Well-planned employee relations will promote a healthy and balanced
relation between the employee and the employer. It is the key for our organization to be
successful.

Training and development

Training and development are the indispensable functions of human resource management. It
is the attempt to improve the current or future performance of an employee by increasing the
ability of an employee through educating and increasing one’s skills or knowledge in the
particular subject. Leather Ville try to arrange training season for their employee in every year.
We need a set of good skilled of employee to run our business properly. HRM ensure yearly
effective training season for their employees

Page | 33
Risk Management
Every business has risk. There is not even a single business which doesn't have risk. There is
a relationship between risk and return. Business that contains high risk should also provide
higher return. Here we are discussing 4 types of risk related to our company

 Product Risk
 Market Risk
 Operational risk
 Financial risk

Each and every risk has its own nature. Risk can be diversified through some action except
some risks. The discussion of every risk is given blow. And which risk is effecting our business
how much that is also shown in the table. Later on we have discussed how we can prevent
those risks.

Product Risk
Product Risk Probability
Poor performances of the technology Low
Late product development Low
Core technology becomes obsolescent Low
High products failure rates Medium

Poor performances of the technology

We are going to make hand crafted leather products so there is very less involvement of
technology. The technology is being used only to design the product and in some operational
sector rather that we don’t have much involvement of technology. So the risk related to the
technology we are considering it low.

Late Product Development

We are going to operate whole business by ourselves from manufacturing to sell. Here we are
using third party in only delivery sector except that product designing manufacturing each and
everything is going to handle by our own crew. So there is very slim chance to late product
development.

Core technology becomes obsolescent

As we already discussed that in our business we don’t have much involvement of technology
so being obsolescent of core technology risk is very low. Use of technology in core sector, for

Page | 34
cutting raw leather we are using technology and for designing we are using technology rather
than that we don’t have much use of technology here.

High products failure rates

Since there are lot of companies in this sector and there also have some reputed leather
accessories brand as well. So they have experienced designer established goodwill in the
market already. So there have some chance that people might not like our product design.
People might prefer to buy the established companies product rather than ours.

Operational Risk
Operational Risk Probability
Key staff leave Medium
Product delivery dates are missed Low
It system fail Low

Key Staff
Here we are making hand craft products. So, our key staff (who is making the product) might
leave, and in this market the amount of skilled staff/labor have very crisis. Sometimes they
demand high wage rate or sometime they don’t want to work. Technological development is
also another main factor to make them leave the industry.

Product delivery dates are missed

To deliver our product we are using third party. Like Pathao or other courier services. If a
customer places an order we are not going to deliver our product we will hand over this to the
delivery agency and rest of the part is their duty. The delivery agency might delay the delivery
and because of that our product might not reached to our customer on time. But the chances
of happening this is very low.

It system fail
Our business will be both online and off line based. Though our main focus is in online. For
online we are going to do business through Facebook and a Website but our main focus is in
Facebook. So there is a very few chance to fail the Facebook system. And through website we
are not going to do business in a very large extent. So we are not considering this as a very big
risk.

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Market Risk
Market Risk Probability
Competitors release superior earlier products High
Competitor gain control of the target High
customers

Competitors release superior earlier products

Since the threats of new entry and the competition is very high so there is very high chance
that competitor may release new product earlier and catch the market. Our business is all about
choice if people like their (competitors) product design then it’s easy to the capture the market
for the competitors. The designing cost is not that much high so competitors can release so
many designs and can get the benefit of taking control the market.

Competitor gain control of the target customers

Our accessories is all about comfort and choice. If our a consumer choice our competitor's
product and found comfort on that then there is high chance that the customer wont switch to
another brands. And most important since the market is very high so no one wants to
compromise their product quality or after sale service. Competition can gain the control of
target customer.

Financial Risk
Financial Risk Probability
Takes longer to raise funds than expected High
Operational cash burn is higher than budgeted High
Revenues stay too long in receivables Low
Core technology prices increase Low

Takes longer to raise funds than expected

Since we are new in the market we don’t have that much market value or goodwill. And here
we are only 6 partners in our business. From inside we cannot raise our funds.

Operational cash burn is higher than budgeted

Here we are going to do everything on a cash basis. Here we have make payment to our staff
on time otherwise we might lose them. We cannot take long time from our raw materials
supplier we have to clear their payment on time.

Revenues stay too long in receivables

We are not going to do any credit sell. Every sell is going to take place through cash and
through advance payment. So there is no chance to create receivable and that is why the risk
of revenue stays to long as receivable is low.

Page | 36
Core technology prices increase
The technology involvement is very low in our business. We are using technological stuff in
cutting and designing only. Since the technological involvement is low so rising technology
price wont effect that much.

Risk Prevention
Here we may take some steps to prevent our risks here in our product risk we have 4 points
and among them 3 we have low probability and we have medium probability in product failure
rate to prevent this we have to be updated with the trend. We have to focus on the fashion and
most important as soon as possible have to make a goodwill in the market. Next in the
operational risk we can see that we have medium risk in the key staff leaving. So we can go
with a contract with them that before a certain period of time they cannot leave our company
and also we can provide those good incentives both financial and non-financial. In the market
risk we got two high probability risks one is competitor release superior earlier products and
another is gaining control of the target customer. Both risk is related to each other. To remove
this risk we have to be updated with the fashion trend to get the market earlier. And to gain
the target customer some services should add like return policy if they don’t like the product
they can return within 7 days. Color guarantee and longevity guarantee should provide. In the
financial risk we see that fund raising time is high. Here we can take the help of loan otherwise
we have the sell the company’s share to raise the fund. Another problem in financial risk that
is operational cash burn is higher. We have to provide more incentives to hold the staffs and
another problem is supplier is not providing long term credit purchase opportunity. To hold
the staffs we should take some other steps like make the working place more flexible. For the
supplier issue we should find the other alternatives.

Page | 37
Financial Management
Estimated Project cost
There are various cost related to the project that are based on certain assumptions. First of all
let’s state those assumptions.

 Since leather accessories demand is on the rise the entrepreneurs look to capitalize on
the opportunity and grab good amount of the market share.
 To create awareness and knowledge among the brand’s target audience, aggressive
spending on promotions has to be done. However, the entrepreneurs do not have
sufficient budget to afford such a huge spending. Therefore they have to rely more on
the word of mouth promotion.

 After successfully acquiring the customers the main key challenge is to retain them, In
order to retain them. Retention plans can include investing heavily on sales
promotional activities, which may again cause a decrease in their profits.

 There will always be a risk of new entrants since the cost of entering leather accessories
industry is also low compared to other advanced industries. A new company may enter the
industry copying Leather Ville’s product designs. This may cause customers to shift to
competitors.
Therefore, the entrepreneurs must also invest in brand development.

 Since Leather Ville is charging lower price for its products, compared to others in the
market, it might require a longer period of time than the usual to reach the breakeven
point.
 The entrepreneurs have assumed that their revenue will grow by 10% in their second
year, and grow by 15% in their third year, and thereby grow by 20% in their fourth
year and 25% in the fifth year.

 The entrepreneurs hold 10% straight line depreciation on their fixed assets.

Page | 38
Assumptions

DETAILS MONTHLY YEARLY TOTAL AMOUNT (BDT)

FIXED EXPENSES:
Company Registration 28,000
Trade License 5,000
Trademark 5,000
Bank Account Opening 1,000
Equipment & Tools 1,401,810
TOTAL FIXED EXPENSE 1,440,810
ADMINISTRATIVE COST:
Petty Cash Fund 18,000 216,000 216,000
Salaries & Wages 490,000 5,880,000 5,880,000
Rent 276,000 3,312,000 3,312,000
Utility 50,000 600,000 600,000
Maintenance Costs 35,000 420,000 420,000
Transportation Costs 10,000 120,000 120,000
Marketing Costs 100,000 100,000
Mobile Phone Bill 5,000 60,000 60,000
TOTAL ADMINISTRATIVE 10,708,000
EXPENSE
OPERATIONAL COST:
Renovation Cost 500,000
TOTAL OPERATIONAL 500,000
COST
TOTAL FINANCING NEEDED 12,648,810

Page | 39
FINANCE SOURCING

Bank Loan 40% 12,648,810 BDT 5,059,524

Owners’ Contributions: 60%
Robin Rahman 10% 12,648,810 BDT 1,264,881
Syeda Ramisa Anjum 10% 12,648,810 BDT 1,264,881
Ainun Haque Bishal 10% 12,648,810 BDT 1,264,881
Shadman Shahriar 10% 12,648,810 BDT 1,264,881
Zarin Tasnim Autoshi 10% 12,648,810 BDT 1,264,881
Abdullah Al Mabsur Rafid 10% 12,648,810 BDT 1,264,881
TOTAL BDT 12,648,810.00

Bank Loan

Amount of loan BDT 5,059,524.00

Interest Rate 12%
Number of Years 5
TOTAL OF 60 PAYMENTS BDT 5,666,666.88
Sales forecast

UNITS
Item 2020 2021 2022 2023 2024
Shoes 9500 9700 9800 9600 9750
Bags 88000 90000 93000 91000 95000
Jacket 4400 4550 4700 4300 4450
Belts 55000 58000 56000 59000 60000
Wallets 28000 29000 27000 30000 32000
Card Holder 45000 48000 52000 49000 54000
Passport Holder 48000 53000 55000 54000 57000

Page | 40
 Pro Forma Income Statement

2020 2021 2022 2023 2024

REVENUE 15,000,000.00 16,500,000.00 18,480,000.00 21,252,000.00 24,864,840.00
COST OF GOODS SOLD -920,000.00 -1,104,000.00 -1,324,800.00 -1,854,720.00 - 2,782,080.00
GROSS PROFIT 14,080,000.00 15,396,000.00 17,155,200.00 19,397,280.00 22,082,760.00
LESS: OPERATING EXPENSES
Petty Cash Fund 216,000.00 240,000.00 260,000.00 280,000.00 300,000.00
Salaries & Wages 5,880,000.00 5,880,000.00 5,880,000.00 5,880,000.00 5,880,000.00
Rent 3,312,000.00 3,312,000.00 3,312,000.00 3,312,000.00 3,312,000.00
Utility 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Maintenance Costs 420,000.00 440,000.00 460,000.00 470,000.00 480,000.00
Transportation Costs 120,000.00 140,000.00 160,000.00 170,000.00 180,000.00
Marketing Costs 100,000.00 110,000.00 90,000.00 80,000.00 60,000.00
Mobile Phone Bill 60,000.00 66,000.00 66,000.00 65,000.00 64,000.00
Renovation Cost 1,100,000.00 - - - -
Interest Expense & Loan Payment 1,133,333.38 1,061,653.38 1,061,653.38 1,061,653.38 1,061,653.38
Depreciation Expense - 140,181.00 -126,162.90 -113,546.61 -102,191.95 - 91,972.75
TOTAL OPERATING EXPENSE -12,801,152.38 -11,723,490.48 -11,776,106.77 -11,816,461.43 - 11,845,680.62
NET PROFIT 1,278,847.62 3,672,509.52 5,379,093.23 7,580,818.57 10,237,079.38

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 Pro Forma Cash flow statement

2020 2021 2022 2023 2024

RECEIPTS:
Revenue 15,000,000.00 16,500,000.00 18,480,000.00 21,252,000.00 24,864,840.00
Loan 5,059,524.00
DISBURSEMENTS:
Company Registration 28,000.00 - - - -
Trade License 5,000.00 - - - -
Trademark 5,000.00 - - - -
Bank Account Opening 1,000.00 - - - -
Equipment & Tools 1,401,810.00 - - - -
Cost of Goods Sold 920,000.00 1,104,000.00 1,324,800.00 1,854,720.00 2,782,080.00
Petty Cash Fund 216,000.00 240,000.00 260,000.00 280,000.00 300,000.00
Salaries & Wages 5,880,000.00 5,880,000.00 5,880,000.00 5,880,000.00 5,880,000.00
Rent 3,312,000.00 3,312,000.00 3,312,000.00 3,312,000.00 3,312,000.00
Utility 600,000.00 600,000.00 600,000.00 600,000.00 600,000.00
Maintenance Costs 420,000.00 440,000.00 460,000.00 470,000.00 480,000.00
Transportation Costs 120,000.00 140,000.00 160,000.00 170,000.00 180,000.00
Marketing Costs 100,000.00 110,000.00 90,000.00 80,000.00 60,000.00
Mobile Phone Bill 60,000.00 66,000.00 66,000.00 65,000.00 64,000.00
Renovation Cost 1,100,000.00 - - - -
Interest Expense & Loan Payment 1,133,333.38 1,133,333.38 1,133,333.38 1,133,333.38 1,133,333.38
TOTAL Disbursements 15,302,143.38 13,025,333.38 13,286,133.38 13,845,053.38 14,791,413.38
CASHFLOW 4,757,380.62 3,474,666.62 5,193,866.62 7,406,946.62 10,073,426.62
BEGINNING BALANCE 12,648,810.00 17,406,190.62 20,880,857.25 26,074,723.87 33,481,670.50
ENDING BALANCE 17,406,190.62 20,880,857.25 26,074,723.87 33,481,670.50 43,555,097.12

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 Pro Forma Balance Sheet
2020 2021 2022 2023 2024

DETAILS:
ASSETS:
CURRENT ASSETS:
Cash 4,757,380.62 3,474,666.62 5,193,866.62 7,406,946.62 10,073,426.62
Inventory 4,507,000.00 4,916,696.90 2,284,190.25 1,508,782.48 1,032,673.00
Non-Tangible Asstes
Patent 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
Goodwill 2,200,685.14 2,305,897.95 2,441,756.21 2,450,765.53 2,533,678.78
NON-CURRENT
ASSETS:
Equipment & Tools 1,401,810.00 1,261,629.00 1,135,466.10 1,021,919.49 919,727.54
Less: Depreciation -140,181.00 -126,162.90 -113,546.61 -102,191.95 -91,972.75
1,261,629.00 1,135,466.10 1,021,919.49 919,727.54 827,754.79
TOTAL ASSETS 12,776,694.76 11,882,727.57 10,991,732.57 10,150,251.73 14,517,533.19
LIABILITIES:
CURRENT LIABILITIES
Short-term Loan 0 0 0 0 5,163,309
NON-CURRENT LIABILITIES
Bank Loan 5,059,524.00 3,926,190.62 2,864,537.25 1,802,883.87 741,230.50
TOTAL LIABILITIES 5,059,524.00 3,926,190.62 2,864,537.25 1,802,883.87 5,904,539.26
OWNERS’ EQUITY
Owners’ Equity 7,589,286.00 7,589,286.00 7,589,286.00 7,589,286.00 7,589,286.00
Retained Earnings 127,884.76 367,250.95 537,909.32 758,081.86 1,023,707.94
TOTAL OWNERS’ EQUITY 7,717,170.76 7,956,536.95 8,127,195.32 8,347,367.86 8,612,993.94
TOTAL LIABILITIES & OWNERS' EQUITY 12,776,694.76 11,882,727.58 10,991,732.57 10,150,251.73 14,517,533.19

Payback Period Analysis

The initial investment for the venture is BDT 12,648,810. In the first year the entrepreneurs
approximately will make a profit of BDT. 1,278,847.62, while in the second year, the
entrepreneurs estimated that their profit will turn to become BDT. 3,672,509.52. In the third
year, the entrepreneurs are expecting to incur a profit of BDT. 5,379,093.23, and in year 4th,
which is in the year 2023, the entrepreneurs will be getting a profit of BDT. 7,580,818.57,
which will be the year of their break even time. So the payback period is approximately 3years
few months.

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 To sum up, in the year 2020, the entrepreneurs will make a profit of BDT. 1,278,847.62, in
the year 2021, the entrepreneurs will make a profit of BDT. 3,672,509.52, in the year 2022,
the entrepreneurs will make a profit of BDT. 5,379,093.23. So, the total profit for 3 years will
be BDT. 10,019,348.57. In the year 2023, the entrepreneurs will make a profit of BDT.
7,580,818.57. Therefore, in the fourth year, the total profit will be: BDT. 10,019,348.57+
BDT. 7,580,818.57= BDT. 17,600,167.14.

Initial investment = BDT, 12,648,810

3 years Profit= BDT 10,019,348.57

Remaining amount= BDT 2,629,461.43

2629461.43
Payback Period=3 +7,580,818.57= 3years 4months

Hence, the breakeven time is in the 3rd year 4th moth.

Ratio Analysis

2020 2021 2022 2023 2024

Net Profit Margin 8.53% 22.26% 29.11% 35.67% 41.17%
Asset Turnover 1.17 1.39 1.68 2.09 1.71
Inventory Turnover 0.20 0.22 0.58 1.23 2.69
Return on Equity 16.85% 48.39% 70.88% 99.89% 134.89%
Return on Asset 10.01% 30.91% 48.94% 74.69% 70.52%
Return on Investment 10.11% 29.03% 42.53% 59.93% 80.93%
Debt-Equity Ratio 0.66 0.49 0.35 0.22 0.69
Debt to Total Asset 0.40 0.33 0.26 0.18 0.41

From the ratio analysis we can state that the firm is in good condition both profitability and
liquidity. The returns on equity asset and investment shows that the entrepreneurs would be
happy with the venture.

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Appendix
Group Members

Zarin Tasnim Autoshi

Class serial: 18

ID: 1620465030

Abdullah Al Mabsur Rafid

Class serial: 23

ID: 1631046630

Md Ainul Haque Bishal

Class serial: 28

ID: 1711401030

Robin Rahman

Class serial: 30

ID: 1711948030

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Shadman Shahriar

Class serial: 41

ID : 1721750630

Syeda Ramisa Anjum

Class serial: 42

ID : 172885030

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Cost Breakdown

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