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Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 1 of 21
Term Project
Social Enterprise
A New Dimension of Entrepr...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 2 of 21
Social Enterprise
A New Dimension of Entrepreneurship
The...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 3 of 21
founder of Ashoka Innovators for the Public and others su...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 4 of 21
presence of the systematic retreat of the governments fro...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 5 of 21
inventing new approaches, and creating solutions to chang...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 6 of 21
Development of Business Incubator Company
Introduction:
T...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 7 of 21
Table of Contents
 Executive Summary
 The Business Conc...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 8 of 21
Executive Summary
It gives indeed pleasure to pen down th...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 9 of 21
Business Concept
This business incubator company will wor...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 10 of 21
us but will also help us to maintain the quality of the ...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 11 of 21
Weaknesses:
 A unique idea and cause without adequate e...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 12 of 21
Local Markets:
The local market will comprise on the mar...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 13 of 21
I. Managing and Looking after the outsourced orders and ...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 14 of 21
 Selection of the high potential individuals those who ...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 15 of 21
Cooperative Decision Making:
 We believe in collective ...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 16 of 21
Arrangement of Seed Capital for the Venture:
Finance is ...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 17 of 21
Financial Analytics:
Projected Sales Forecast
(All amoun...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 18 of 21
Proforma Balance Sheet
(Amount in Million Rupees)
Base Y...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 19 of 21
Proforma Income Statement
Proforma Income Statement
(All...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 20 of 21
Time Line
If we get the required finance to commence the...
Entrepreneurship (94255)
Muhammad Asif Khan (51271) Page 21 of 21
To attain this objective we will be closely in correlati...
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Term project entrepreneurship (94255)-fall 2016-social entrepreneurship-a new dimension-entrepreneurs development incubator company-paf-kiet (city campus)

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Social Entrepreneurship-A new Dimension of Entrepreneurship and Proposed Plan of Entrepreneurial Development Incubator Company

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Term project entrepreneurship (94255)-fall 2016-social entrepreneurship-a new dimension-entrepreneurs development incubator company-paf-kiet (city campus)

  1. 1. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 1 of 21 Term Project Social Enterprise A New Dimension of Entrepreneurship And Entrepreneurial Development Incubator Company Submitted To: Course Instructor: Mr. Naeem Bhojani Curse Title: Entrepreneurship Course ID: 94255 Submitted By: Name of Student: Muhammad Asif Khan Student ID: MB-2-05-51271 Program: MBA-Regular Semester: Fall 2016 Campus: PAF-Karachi Institute of Economics & Technology (KIET)-City Campus Submission Date: November 27, 2016
  2. 2. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 2 of 21 Social Enterprise A New Dimension of Entrepreneurship The idea of Social Entrepreneurship has got increasing attention of scholars as social problems in our complex modern society have grown tremendously. The objective is to bring out the development of the field over a period of time and the contribution of higher and technical education institutions to the field. This effort focuses on the opportunities and challenges involved in social entrepreneurship and the emergence of a social enterprise as an effective tool towards addressing social problems. Social Entrepreneurship seeks to exploit the practical dynamism of the successful businessmen to enrich and help society, especially in developing countries which are overwhelmed with problems of dire poverty and lack of opportunities. As are business entrepreneurs to the economy, so are the social entrepreneurs to the society. They may, like any other business entrepreneurs, be interested in profit, but their emphasis is on social change. They are often driven, creative individuals who exploit new opportunities, question accepted norms, and refuse to give up until they have remade the world for the better. Social entrepreneurs have the same core temperament as their business peers but use their talents to solve global social problems. Origin And Growth Of Social Entrepreneurship Although the terms - social entrepreneurs and social entrepreneurship- seem relatively new, the practices related to the field can be found throughout the history. Several business entrepreneurs had become the most successful social entrepreneurs by combining effectively the civic, governmental and business worlds during 19 and 20 centuries and promoted mainstream public services in welfare, schools, and health care. A few of them to mention are:  Vinoba Bhave, founder of India's Land Gift Movement,  Florence Nightingale, founder of the first nursing school and developer of modern nursing practices,  Robert Owen, founder of the cooperative movement etc. Social Entrepreneurs and social enterprises have been in existence for many centuries, but became prominent in recent decades after the word “social entrepreneurship”, was deliberately used by Ashoka, a non-profit institution. However, even before Ashoka was founded in 1981 and subsequently popularized the term, history had witnessed numerous social entrepreneurs responsible for the many social innovations. The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s to describe Robert Owen. The widespread use came during 1980s and 1990s and promoted by Bill Drayton, the
  3. 3. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 3 of 21 founder of Ashoka Innovators for the Public and others such as Charles Lead beater. From the 1950s to the 1990s Michael Young was a leading promoter of social enterprise. Professor Daniel Bell of Harvard was the world's most successful entrepreneur of social enterprises during 1980s as he created more than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE) which supports individuals to realize their own potential and to establish social enterprises and social businesses. Muhammad Yunus, founder of Grameen Bank, is well known contemporary social entrepreneur, who was awarded a Nobel Peace Prize in 2006. The work of Yunus and Grameen emphasize the enormous synergies and benefits when business principles are unified with social ventures. Today, nonprofits and non-governmental organizations, foundations, governments, and individuals also play the significant role to promote, fund, and advise social entrepreneurs around the planet. J. Gregory Dees, popularly known as the “Father of Social Entrepreneurship Education”, and Beth Anderson categorize the plurality of Social Enterprise definitions into two main types namely Social Enterprise and Social Innovation. A great variety of definitions of social entrepreneurship and social entrepreneurs have been provided for the past three decades. But according to some authors like Austin et al. (2006), Mair and Mart (2006), Weerawardena and Mort (2005), the theoretical underpinnings of social entrepreneurship have not yet been adequately explored. Authors such as Neck, Brush and Allen (2009, p. 15), suggest that “a lack of agreement on what defines social entrepreneurship or a social entrepreneur may not be important”, what really matters is, understanding the landscape of the sector. Careful analysis of the growing literature reveals a perceived risk that the term social entrepreneurship could become very inclusive and, as a result, represent an immense tent into which all kinds of socially beneficial activities fit (Martin and Osberg, 2007). William Drayton, founder of the world’s first organization to promote social entrepreneurship, Ashoka‟, is credited with coining the phrase “Social Entrepreneur”, to describe a person who recognizes logjams in society and finds ways to free them. In spite of the varying definitions of social entrepreneurship, one prominent commonality emerges in almost all descriptions is the problem-solving nature‟ of social entrepreneurship”. Opportunities And Challenges The market and the state cannot, on their own, regulate and solve all problems. New approaches are required to tackle major social issues, “most especially in the
  4. 4. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 4 of 21 presence of the systematic retreat of the governments from the provision of public goods in the face of new political ideologies that stress citizens ‟self-sufficiency and give primacy to market-driven models of welfare” (Nichols, 2006, p. 1). If economic globalization offers opportunities to improve living conditions, it also implies substantial and continuous restructuring and change and a renewed or new approach, not only to the new social challenges but also to the old ones that have not yet been met successfully. Keeping in view the increasing competition, all fields have to engage more strongly in innovation, both technological and social, and in entrepreneurship, both commercial and social objectives. The most urgent challenge for national governments, local authorities, policy makers and economic stakeholders is to promote sustainable economic and social development so that once the economy has recovered; the benefits can be widely diffused. Social entrepreneurship and social innovation are part of the solution, as they both explicitly aim at providing innovative solutions to unsolved social problems. Social value creation should be at the heart of their mission in order to improve individuals‟ and communities‟ lives and increase their well-being. Significant changes occur in the field of social enterprise, including major developments in the flow of funding, growing but often untapped philanthropic resources, and a shift in the role of government. All of these changes occur against a large backdrop of demographic and economic challenges, as boundaries blur among the traditional nonprofit, for-profit, and public-sector silos. Currently, the sector remains on the verge of several possible futures, including consolidation, entrepreneurial growth, and expressive experimentation. The scenario that unfolds over the next 20 years will depend largely on the ability of social enterprise leaders to make a leap forward in thought and action to capitalize on the abundant potential for social change. Social Entrepreneur A social entrepreneur identifies practical solutions to social problems by combining new processes, services and products to address complex social problems. Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps. Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate the practical implementation of their vision above all else. Just as entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems,
  5. 5. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 5 of 21 inventing new approaches, and creating solutions to change society for the better. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale Social Entrepreneurship And Higher Education A growing number of colleges and universities are establishing programs focused on educating entrepreneurs. As a scholarly field of inquiry, social entrepreneurship is in its embryonic stage of development. Social entrepreneurship has been a topic of academic inquiry for nearly 20 years, yet relatively little scholarly output has appeared in mainstream management and entrepreneurship journals. Future research would benefit from the incorporation of multivariate methods to complement the case study techniques that have dominated previous efforts. Social Entrepreneurship Characteristics: Among the innate characteristics or psychological factors in the case of social entrepreneurs, Nga and Shamuganathan (2010: 260-261) highlight as main characteristics:  The ability to make good contacts and express own beliefs or feelings with ease (extroversion);  A natural position of openness to the surrounding environment or exterior phenomena (openness);  Being easily accepted through being pleasant and friendly (agreeableness);  The tendency to obsess about things considered important (neuroticism); and  Reliability and conscientious and thorough development of the task itself (conscientiousness). As for the practices that characterize social entrepreneurs, social entrepreneurship includes those that deepen the company's corporate social responsibility and those that refer to the variations in company executives' concerns with social problems. Some of these practices are: o Taking ethical components into account when formulating the strategy; o Maintaining management commitment to surrounding social problems; o Some company or management objectives of a social, rather than merely an economic nature; o Seeking information on business projects that can also have a social benefit; and o The company dedicates part of its budget and its activity to obtaining economically viable goods and services that also benefit the neediest sectors of society.
  6. 6. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 6 of 21 Development of Business Incubator Company Introduction: The basic purpose to develop the company is to provide workspace, coaching, and support services to potential entrepreneurs at early-stage of their entrepreneurial careers. Our core objective is to encourage and support the rural area population male and female (domestic women) to take initiative and commence their own venture though effectively utilizing the available resources and their skills. For the attainment of this objective at initial I have decided to develop an organization in individual capacity which serves as a business incubator for the upcoming and tentative entrepreneurs. The secondary purpose if the company will be to carry out the trading activity and earn profit through outsourcing the orders from the Local and Foreign buyers at highly affordable prices. Our primary purpose to form this organization is to develop to Business Incubator, which will not only educate and train the entrepreneurs but will help them to continue their ventures through continually assisting them in their entrepreneurial life. We are committed to create a diversified value chain through effectively developing the Micro Level Enterprises with the help of these entrepreneurs and provide value to our customer with affordable price and the pride to contribute toward a social cause. This success of the venture will allow us to transform it in to the: “Entrepreneurial Development Incubator Company”
  7. 7. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 7 of 21 Table of Contents  Executive Summary  The Business Concept  Industry / Market Analysis  Management Team  Product / Service Development Plan  Financial Plan  Time Line  Bibliography
  8. 8. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 8 of 21 Executive Summary It gives indeed pleasure to pen down the idea and to introduce one of its own kinds the Entrepreneurial Development Incubator Company. This company will be formed and developed to materialize the concept of Social Entrepreneurship in its true spirit. The purpose is not to run a business and to earn profit but to passionately participate in the socio-economic development of the country through developing entrepreneurs at micro level. It will not only help the country to move towards the economic growth & sustainability and will also help us to bring the economic prosperity among the neglected class of the society. The basic purpose is to form the company is to develop the entrepreneurs in the diversified area. Most of the people in the third world countries are unable to capitalize their potential in a very true manner due to lack of proper guidance and the availability of the financial resources. This company has been formed to identify those individuals which have an ability to create some value for the people through their exceptional skills and they are motivated towards forming a venture in their respective area of skill. Our main focus is to encourage the individuals of the rural areas and the specifically the women to come forward and commence their own business ventures at small and medium level. Our focus will be on the rural area’s population and we will struggle to facilitate those individuals who have potential and courage to do something for themselves and others. We will not only help them to initiate their own venture and create employment opportunities for others, but will also educate and train them in their respective area of interest before commencing their own doing business and will continually support them throughout their entrepreneurial journey. For this we will intend to design a comprehensive training program namely the Entrepreneurial Development Program. Our secondary objective but key to success is to explore local and global market and develop the contacts and fetch the orders in the diversified product line. At initial our strategy is to get manufactured and dispatch these orders to our valued customers via outsource the orders. But with the passage of time we will be able to develop a value chain through developing the Micro Level Enterprises.
  9. 9. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 9 of 21 Business Concept This business incubator company will work in diversified business areas. First and foremost objective is to formalize a strong marketing activity and bring the orders from the local and foreign buyers in the following product categories:  Livestock (Meat Products)  Fish  Honey & Allied Products  Gem & Jewelries Including the Precious Stones  Handy Crafts  Apparel Products (Knitted / Woven) At initial stages we will be focusing to fulfill our customers’ requirements in the given product categories through outsourcing at low profit level. With the passage of time all the future orders will be fulfilled through the entrepreneurs developed by our company under the entrepreneurial development program. Revenue Sources In the beginning we will be marketing ourselves as one of the reliable supplier and trader of the following products: 1) Edible Products i) Meat Products ii) Grains / Wheat / Rice / Pulse iii) Fruits iv) Sea Food Products 2) Apparel Merchandises i) Knitted / Hosiery ii) Woven 3) Antiques and Valuable Handy Crafts 4) Gems & Jewelry Products i) Artificial ii) Original As defined we will be fulfilling all the orders through outsourcing at competitive prices. But our ultimate aim will be to develop a value stream through successfully developing the Micro Level Enterprises in the same product categories. This value stream will not only be the cost effective for
  10. 10. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 10 of 21 us but will also help us to maintain the quality of the goods supplied by us to the customers. Competitor Analysis We are trying to enter in to the markets which possess a high competition, where already manufacturer and traders are dealing in the same product categories. They are not successfully serving the markets but they are already penetrated. We are going to face a lot of resistance and competition from global and local in markets. Our focal challenge is to develop our credibility among the potential buyers of the products and gain their confidence. It can be done through differentiating ourselves from others not only in terms of quality and price but we have to prove ourselves as one of the committed suppliers of goods in term on time delivery of the products. TOWS Analysis Threats:  Improper infrastructure of the rural areas and the availability of insufficient resources.  Lack of coordination among the different governmental organizations.  Resistance from the external environment.  Financial constraints that can limit the required pace of growth.  Depending on human capabilities rather on technological equipments.  A threat of quick imitation of the strategy.  Logistics Cost will be the vital. Opportunities:  Availability of sufficient human resource with the right attitude which can lead us towards attainment of our goals & objective.  No direct competition in the global market and we can capitalize the idea through effective planning.  We can achieve rapid growth with effective utilization of diversified workforce.  Our effective public relation activities will help us to develop effective relationship with the governmental organization and other relevant non- government which can help us to effectively implement and our entrepreneurial development program.  If we will be able to effectively serve our primary purpose of the foundation then foreign buyers will definitely extend their cooperation for further expansion of business.
  11. 11. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 11 of 21 Weaknesses:  A unique idea and cause without adequate experience.  If persistency will not be shown the failure is evident.  Time constraint is the factor which will limit the rapid expansion.  There are very vital chances that Initial working years will be with low profit margins or without profits.  We have to imitate every project from the basics under our Entrepreneurial Development Program.  In past it has been observed that the Micro Level Enterprise has short span of life.  Mushroom growth of the Micro Level Enterprise will be harmful for the progress. Strengths:  We are confident that our steering team has an ability to produce results.  Self-driven policies for the attainment of objectives.  Rather acquiring we are focusing to develop.  Our efficient marketing team can transform the idea into reality through effectively enhancing the global customers’ network. Marketing Strategy We have decided to segment our market on the basis of geographical location and further we have segregated them into two broader categories Local and Global.
  12. 12. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 12 of 21 Local Markets: The local market will comprise on the markets which will be similar to our markets in terms of culture, traditions and behaviors. Initially we have included the following regions into this category:  South Asian  Middle East  Far East Global Markets: All potential markets existing other than the above define local markets will be considered as Global Market. We can distinguish this market into following regions:  European o Western Europe o Eastern Europe  North America  Africa  Asia Our marketing department will comprise on two different teams which will work separately on each market segments. In beginning our aim will be to introduce ourselves as one of the reliable suppliers of the above define product categories and get the orders from the buyers. Our focus will be to become a reliable business partner of our valued customers. Business Operations Our operational activities can be divided as follows: Marketing: I. Marketing will be the core activity of our business process and our all success will be depending on the success of marketing department. Operations: Our operations department will carry out the following activities:
  13. 13. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 13 of 21 I. Managing and Looking after the outsourced orders and make sure that all the orders will be completed and shipped to our customers with in the defined time limits with the specified quality and quantity. II. They will be closely liaison with the marketing department and continually update them about the status of the production of the each order. III. They will be in cooperation with the Human Resource Department for the successful implementation of the Entrepreneurial Development Program. IV. They will be responsible to provide all the necessary information for the feasibility of each newly stated business under this training program. V. They will continually monitor the performance of the newly develop Micro Level Enterprises and will provide all the necessary technical assistance whenever required. Finance & Accounts Department: I. They are responsible to manage all the necessary financial records of the company. II. Coordinate with the Human Resource Department for the preparation of financial feasibility of each the new venture under the Entrepreneurial Development Program. III. They will be continually assisting the trained entrepreneurs for the maintenance of their accounts records. Human Resource Department: I. They are responsible to successfully plan and run the Entrepreneurial Development Program. II. They are responsible to develop to carry put effective public relationship activities with different organizations at government and non-government level and seek cooperation from them for the success of the said program. III. They will closely work with the Marketing, Finance and Operations departments to synchronize the activities in relation to the EDP. Entrepreneurial Development Program:
  14. 14. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 14 of 21  Selection of the high potential individuals those who has an ability and they keen to commence their professional career as an entrepreneur.  They must be hard working and able to interact with the people highly social can work under stress.  They must be able to develop and lead team.  A comprehensive education and training program will be inaugurate to fully equip them with the appropriate knowledge skills and abilities to run their own venture in their respective area of interest and ease to doing business in their respective locality.  They will be continually monitored and all the necessary assistance will be provided to them whenever required.  They will encourage supporting others for the development of their own ventures.  All the new ventures (Micro Level Enterprises) will be develop on the basis of BOTT (Built Operate Train & Transfer). Management Our management philosophy will reflect the basis of the formation of the company. We are closely baton with our social cause and our motto: To re-shape the world We do not believe in individuality and wants every ones contribution in the process of growth and prosperity. We do not want to indulge ourselves into the hierarchical structure burden, in order to avoid the communication gap and unnecessary waste of time in decisions making and approvals, we will follow the flat hierarchical structure. The basic structure of our management will be as follows: Our management practices will be based on the following principles: Chief Executive Human Resource Department Marketing Department Operations Department Finance & Accounts Department
  15. 15. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 15 of 21 Cooperative Decision Making:  We believe in collective wisdom and well come all the suggestions and criticism for the betterment and improvement. Employee Empowerment:  We believe that our employees should be motivated towards the cause and empower them to take initiative for the cause. Innovation:  We welcome and encourage the input from our employees and from those who have been directly associated with us and provide them opportunity to materialize their creative ideas and innovation. Sympathy:  We believe that our all acts will be towards the betterment of the society and our actions will reflect the sympathy and affection toward others. Ownership:  We believe that our employees will take the responsibility of their decisions and face the outcomes as an owner. Revenue Model The below mention model will define our value stream: Acquisition of the Orders from the local and foreign buyers in the defined product Categories Outsourcing of orders for manufacturing Developing value chain through EDP Order fulfillment through effectively maintaining the specified quality level by the customers Organizati on Growth and Profitability through expanding customers network
  16. 16. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 16 of 21 Arrangement of Seed Capital for the Venture: Finance is the running blood of every organization and the new venture cannot be successful without sufficient availability of the finance or if the venture unable to generate enough finances to effectively run the venture. The guaranteed success of this venture is also subject to the availability of the planned finances. Initially I cannot finance the venture individually so I have decided to opt the following propositions of the finance for the venture: 1. Angel Funding: I am intended to present the idea to the existing entrepreneurs to finance the venture on the basis of profit sharing which will be the fifty percent of the net profit. And their initial investment on the venture will be reverting back to them within a specified time period. Or they will have an opportunity to get the shares of the company at the end of five years. 2. Financial Institutions Funding: Our second option is to arrange the finance for the venture from financial institutions and from Banks. We are emphasizing to avail the finances on the basis of gain sharing and the seed capital will be return back to them within the agreed period of time. The equity will also be offer to them upon successful completion of venture against the seed capital. If the above criterion of the finance will not be available then we will opt for the debt financing at affordable and realistic payback charges. Before this all the possible options will be discuss before finalizing the decision. 3. Donor Agencies & Governmental Institutions: We will be continually in coordination with the International & local Organizations those who have been working on the poverty alleviation programs and struggling for the socio-economic empowerment of the less privileged classes including Asian Development Bank (ADB), UNDP, European Union, etc. We will also be closely liaison with the Governmental organizations and intuitions those who has been working for the same cause and struggling to eliminate poverty from the country.
  17. 17. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 17 of 21 Financial Analytics: Projected Sales Forecast (All amounts are in million rupees) Product Categories Base Year Year 2 Year 3 Year 4 Year 5 G L T G L T G L T G L T G L T R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. R s. 1) Apparel Merchandise 6 2 8 7 2 9 9 2 11 10 3 13 12 3 16 2) Edible Products 5 3 7 5 3 8 6 4 10 8 4 12 9 5 15 3) Antiques & Handy Crafts 1 0 1 1 0 1 1 0 1 1 0 1 2 0 2 4) Gems & Jewellery Products 2 0 3 3 1 3 3 1 4 4 1 5 5 1 6 5) Miscellaneous Goods 2 1 2 2 1 2 2 1 3 3 1 3 3 1 4 Total Sales 15 5 20 18 6 24 22 7 29 26 9 35 31 10 41 0 5 10 15 20 25 30 35 40 45 Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Global Local Total Global Local Total Global Local Total Global Local Total Global Local Total Base Year Year2 Year 3 Year4 Year 5 ProejctedSalesForecast 1) Apparel Merchandise 2) Edible Products 3) Antiques & Handy Crafts 4) Gems & Jewellery Products 5) Micelaaneuous Goods Total Sales
  18. 18. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 18 of 21 Proforma Balance Sheet (Amount in Million Rupees) Base Year Year 2 Year 3 Year 4 Year 5 Assets Fixed Assets: Furniture And Fixtures 0.50 0.50 0.50 0.50 0.50 Less: Accumulated Depreciation 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38 Vehicle 0.50 0.50 0.50 0.50 0.50 Less: Accumulated Depreciation 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38 Total Fixed Assets 0.95 0.90 0.85 0.80 0.75 Current Assets: Cash 3.82 4.86 4.76 5.00 4.38 Prepaid Rent of Warehouse and Office 0.70 0.70 1.00 1.00 1.00 Accounts Receivable (5% of Sales) 0.90 5.42 1.20 6.76 1.44 7.20 1.73 7.73 2.07 7.45 Total Current Assets 5.42 6.76 7.20 7.73 7.45 Total Assets 6.37 7.66 8.05 8.53 8.20 Equities Liabilities Long Term liabilities: Loan Payable 5.00 5.00 5.00 5.00 5.00 Less: Loan Installment 0.50 4.50 1.00 4.00 1.50 3.50 2.00 3.00 0.50 4.50 Long Term liabilities 4.50 4.00 3.50 3.00 4.50 Short Term Liabilities: Accounts Payable (10% of Sales) 1.05 2.40 2.88 3.47 4.15 Total Short Term Liabilities 1.05 2.40 2.88 3.47 1.05 Owner's Equity: Personal Contribution 0.50 0.50 0.50 0.50 0.50 Add: Net Profit 0.52 0.86 1.27 1.76 2.35 Less: Personal Drawings 0.20 0.10 0.10 0.20 0.20 Total Owner's Equity 0.82 1.26 1.67 2.06 2.65 Total Equities 6.37 7.66 8.05 8.53 8.20
  19. 19. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 19 of 21 Proforma Income Statement Proforma Income Statement (All Amounts Are in Million Rupees) Base Year Year 2 Year 3 Year 4 Year 5 Sales 20.00 24.00 28.80 34.56 41.47 Less: Cost of Goods Sold Procurement Cost (70 % of Sales) 14.0 16.8 20.16 24.2 29.03 Direct Logistics (3% of Sales) 0.6 0.72 0.86 1.04 1.244 Direst Support Services (3% of Sales) 0.6 0.72 0.86 1.04 1.244 Ware Housing Cost (3% of the sales) 0.6 15.8 0.72 19 0.86 22.75 1.04 27.3 1.244 32.76 Gross Profit 4.2 5.04 6.05 7.26 8.71 Less: Marketing Expenses (2.5 % of Sales) 0.50 0.60 0.72 0.86 1.04 Human Resources Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04 Operational Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04 Utility Charges (3% of Sales) 0.60 0.72 0.86 1.04 1.24 Rent Expenses (1 % of Sales) 0.20 0.24 0.29 0.35 0.41 Loan Reimbursement 0.50 0.50 0.50 0.50 0.50 Depreciation Expenses 0.05 2.85 0.05 3.31 0.05 3.86 0.05 4.52 0.05 5.32 Earnings Before Interest & Taxes 1.35 1.73 2.19 2.73 3.39 Less: Interest Expense 0.70 0.70 0.70 0.70 0.70 Estimated Income Tax 0.14 0.17 0.22 0.27 0.34 Earning After Interest & Taxes 0.52 0.86 1.27 1.76 2.35
  20. 20. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 20 of 21 Time Line If we get the required finance to commence the venture then I am confident that the venture will be fully operative and striving towards its goals within the initial three years. Our venture will be transform into the public limited company at the end of the fifth year. It is evident that we will be able to develop an effective value chain with the through developing the Micro Level Enterprises under our Entrepreneurial Developing Program. Harvest Strategy Initial Public Offering (IPO): As I have earlier mentioned that the venture will be transform into the Public Limited Company and the equity offering will be as followed:  The 25 % shares will be offer to the angle financers / financial institutions  The 24 % will be offer to the public and in case of the debt financing of the 49% shares will be offer publicly.  The 51% shares will be owned and retained by the company. Critical Risk  Unable to get finance for the venture.  Marketing Department will unable to produce desired results.  Global Business Environment will be affected due to unavoidable circumstances.  Unable to develop value stream through Micro Level Enterprise Development. Conclusion Under the entrepreneurial development program, the interested and the capable individuals will be selected from different rural areas and they will be trained in their respective area in accordance with the conditions, ease to do business and the resources available in their locality.
  21. 21. Entrepreneurship (94255) Muhammad Asif Khan (51271) Page 21 of 21 To attain this objective we will be closely in correlation with governmental departments those who have been already responsible to provide training the individuals in different meadows.

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