This project report summarizes a new business idea to launch an online delivery platform for handicraft products in India. The business, called HANDICRAFT, will focus on providing an e-commerce platform to list unique handicraft products from small businesses across India. This will help artisans grow their business and provide customers with a wide variety of hard to find products. The report outlines the business model, target market, financial projections, and strategic plan. It estimates sales, expenses, cash flows, and determines key financial metrics like payback period, internal rate of return, and net present value to evaluate the viability of the new business idea.

1. Project report of financial
management
Topic: - New business idea
Submitted by: -
Names: -
1.Surbhi (37)
2.Ankit kumar (43)
3.Sakchi suman (46)
4.Kanishk sahadeo (48)
XAVIER INSTITUTE OF SOCIAL SERVICE
DR. CAMIL BULCKE PATH, RANCHI
Session: 2022-2024

2. Table of contents
Sl. No. Contents
1. New business idea.
2. Screening of the business idea (SWOT analysis of the idea).
3. Capital budgeting including estimated investment cost and
evaluation criteria to evaluate the project, PBP, ARR, and NPV.
4. Projected cash inflows and cash outflows.
5. Projected cost and revenue model.
6. Sources of raising funds.
7. Strategic Plan

3. 1) Introduction of new business idea
Entrepreneurship is the major innovation form, in which drives the business
towards success. However, opening up a business is not easy task to perform,
as it requires various steps to be taken and to be researched, before opening
up the business.
The major aim of the report is to provide in depth analysis of a newly
developed business idea, while taking steps to launch the developed idea.
The newly developed business idea was to launch an online delivery platform
to provide cratered customer the unique handicrafts products, since majority
of customers are in the need of customized personalized items and products,
and the trend is changing so fast towards made to order orientation. Thus,
the online platform named, HANDICRAFT will be focusing highly on its e-
commerce platform in terms of providing online ordering and delivering
services to cater with the target customers. The target market of the business
is identified as cooperates age between 20-45.
Handicrafts constitute an important segment of the
decentralized/unorganized sector of our economy. Originally, started as a
part time activity in rural areas, it has now transformed into flourishing
economic activity due to significant market demand over the years.
Handicrafts have big potential as they hold the key for sustaining not only
the existing set of millions of artisans spread over length and breadth of the
country, but also to increasingly large number of new entrants in the crafts
activity. Presently, handicrafts are contributing substantially in employment
generation, and export. The sector, which is highly dispersed and
unorganized, offers tremendous opportunities for sustainable employment,
particularly in the rural areas. However, they lack access to the much-needed
capital as well as suffer from absence of any governmental support for their
welfare and wellbeing.
• New business
The idea of this business is to help handicraft business to growing their
business online by listing their products on our ecommerce website where
they can get more and more orders from the customers all over India.

4. Since majority of customers are today looking for unique and beautiful
products, connecting the small business all over India will not only help the
small players but also the customers in finding the right products at the ease
of customer doorstep.
India is a very rich culture country and there are lots and lots beautiful
products that are not available in national markets.
• Customers can find varieties of product from different region and different
markets on our ecommerce store at minimal cost.
This online store will be launched all over India and will connect every small
player from across the country.
• These products can include handicraft items, home decor items which are
not readily available in local markets.
This ecommerce platform will list the product and create a catalogue of the
seller on our website along with price at which they want sell the products
plus the commission for the platform and delivery and handling charge.
Suppose if the seller is selling a product for Rs 500 we will add our
commission to it i.e. Rs 250 (40% of Price which may vary from product to
product),10% will the marketing cost, the packaging charge Rs 30 Plus
Delivery Charge which will be Rs 120 so the total cost will be Rs 900.
We will partner with various partners of different locations for hassle free
delivery also these delivery partners will be picking up the package from the
seller and delivering it the customer who ordered the product.

5. New business model canvas: -
• Small
Vendors/Busine
ssman
• Manufacturers
• Suppliers of
boxes for
packaging
• Delivering the
products on time
for customers
• Delivering quality
product
• Providing
customers with
best and unique
options/varieties
• Maintain good
reputations with
customer
• Retain and
attract more
customers
• Experience
arcticians,
vendors
• Providing best
quality product
• Highly
trustworthy and
other staff
• Providing
unique products
• Customised
product (in
future)
• Online ordering
and service
provider.
• Social media
platforms to
keep in touch
with customers
for creating
product
awareness
• Loyalty cards
have been given
for customers in
which provides
discounts for
their next
purchases.
• B2C business
will utilize a
Direct Marketing
Channel
approach where
there are no
intermediary
levels.
• B2C direct
distributional
channel can be
utilized.
• E-Commerce
• The age
group of 20-
45 can be
identified as
most
effective
target group
• Purchase
power and
busy
lifestyle
customer
segment

6. 3) Capital budgeting
Year Cash Flow Cumulative Cash
Flow
1 150000 -850000
2 250000 -600000
3 420000 -180000
4 550000 -370000
5 700000
(a) PBP
PBP= 3+ 180000/550000*12
PBP=3yrs 4months

7. NPV=[ C1/(1+k)1
+ C2/(1+k)2
+C3/(1+k)3
+C4/(1+k)4
+C5/(1+k)5
]-C0
NPV=[ 150000/(1+0.10)1
+ 250000/(1+0.10)2
+420000/(1+0.10)3
+550000/(1+0.10)4
+700000/(1+0.10)5
]-1000000
NPV=[(150000/1.10+250000/1.21+420000/1.33+550000/1.46+700000/1.6
1)-1000000]
NPV=136363.63+206611.57+315789.47+376712.32+434782.60
NPV=1470259.59
(b) ARR
Total Inflow= (150000+250000+420000+550000+700000)/5
Avg Invert= (1000000+0)/2=500000
ARR= 2070000/5=414000
ARR=414000/1000000=414%
(c) NPV
NPV=[ C1/(1+k)1
+ C2/(1+k)2
+C3/(1+k)3
+C4/(1+k)4
+C5/(1+k)5
]-C0
NPV=[ 150000/(1+0.10)1
+ 250000/(1+0.10)2
+420000/(1+0.10)3
+550000/(1+0.10)4
+700000/(1+0.10)5
]-1000000
NPV=[(150000/1.10+250000/1.21+420000/1.33+550000/1.46+700000/1.6
1)-1000000]
NPV=136363.63+206611.57+315789.47+376712.32+434782.60
NPV=1470259.59
4) Projected cash inflows and outflows
(a) Cash inflow

8. (b) Cash outflow
Expenses 1st
year 2nd
year 3rd
year 4th
year 5th
year
Accountant
fees
5000 8000 15000 20000 20000
Advertising and
marketing
40000 50000 80000 100000 120000
Bank fees and
charges
5000 6000 8000 8000 10000
Bank interest 5000 5000 8000 8000 8000
Utilities
(electricity, gas,
water)
5000 5000 10000 10000 10000
Lease/loan
payments
20000 25000 30000 35000 40000
Rent and rates 20000 20000 25000 25000 30000
Stationary and
printing
2000 2000 4000 5000 6000
Income tax 20000 25000 30000 32000 40000
Wages
(including
PAYG)
2000 2500 4000 4500 6000
Total expenses 124000 148500 214000 247500 290000

9. 5) Projected cost and revenue model
1. Estimation of how much product we are going to sell
The first step is we will decide how much product and services we are going
to sell within 1 year of time period. For this we will need to have a strong
understanding of market in which our company is operating.
So our company is operating in e-commerce market. We need to know about
how different e-commerce companies operate in the market in different
seasons and how they are currently doing the business and selling overall.
Year No. Of items sold Percentage change
%
1st
300 0%
2nd
500 66.66%
3rd
840 68%
4th
1100 30.95%
5th
1400 27.27%
Calculation of projected income
Once we have estimated how much we are going to sell we will figure out
how much each product is going to cost
Year Estimated
sales
Average
price of
each
product
Projected
Income

10. 1st
300 500 150000
2nd
500 500 250000
3rd
840 500 420000
4th
1100 500 550000
5th
1400 500 700000
Calculation of projected expenses
After calculating the estimated income, we will calculate projected expenses
to find out how much our company is spending to provide services to the
customers.
Expenses 1st
year 2nd
year 3rd
year 4th
year 5th
year
Accountant
fees
5000 8000 15000 20000 20000
Advertising and
marketing
40000 50000 80000 100000 120000
Bank fees and
charges
5000 6000 8000 8000 10000
Bank interest 5000 5000 8000 8000 8000
Utilities
(electricity, gas,
water)
5000 5000 10000 10000 10000
Lease/loan
payments
20000 25000 30000 35000 40000

11. Rent and rates 20000 20000 25000 25000 30000
Stationary and
printing
2000 2000 4000 5000 6000
Income tax 20000 25000 30000 32000 40000
Wages
(including
PAYG)
2000 2500 4000 4500 6000
Total expenses 124000 148500 214000 247500 290000
Revenue projections
Now we have projected our estimated income and expenses, now we will
calculate estimated revenue.
Estimated revenue= expenses-income
Year Estimated
expenses
Estimated
Income
Estimated
revenue
1st
124000 150000 26000
2nd
148500 250000 101500
3rd
214000 420000 206000
4th
247500 550000 302500
5th
290000 700000 410000

12. 6) sources of raising funds
(a) Business incubators
Business incubators (or "accelerators") generally focus on the high-tech
sector by providing support for new businesses in various stages of
development. However, there are also local economic development
incubators, which are focused on areas such as job creation, revitalization
and hosting and sharing services.
Commonly, incubators will invite future businesses and other fledgling
companies to share their premises, as well as their administrative, logistical,
and technical resources. For example, an incubator might share the use of its
laboratories so that a new business can develop and test its products more
cheaply before beginning production.
Generally, the incubation phase can last up to two years. Once the product is
ready, the business usually leaves the incubator’s premises to enter its
industrial production phase and is on its own.
Businesses that receive this kind of support often operate within state-of-the-
art sectors such as biotechnology, information technology, multimedia, or
industrial technology. Businesses that were supported by an incubator have
a better success rate over five years.
(b) Bank loans
Loans are the most commonly used source of funding for small and medium
sized businesses. Consider the fact that all lenders offer different advantages,
whether it’s personalized service or customized repayment. It's a good idea
to shop around and find the lender that meets your specific needs.

13. In general, start-ups have a harder time accessing loans than do established
businesses. Entrepreneurs with a solid business plan and a good credit rating
are more likely to be able to access loans.
(c) Government grants
Technically, a grant is a sum of money conditionally given to your business
that you don’t have to repay. However, you’re bound legally to use it under
the terms of the grant, or otherwise you may be asked to repay it. As well,
once you are granted money from one government source, it is not
uncommon to receive further funding from the source if you meet program
requirements.
it’s not always easy to bring innovations to light so the Indian government
agencies provide aid to Indian companies. You may have access to this
funding to help cover expenses, such as research and development,
marketing, salaries, equipment and productivity improvement.
(d) Croudfundings
crowdfunding is a form of fundraising where a business asks the public for a
contribution, usually in exchange for equity in the company.
It usually entails a private company asking large numbers of people for small
contributions. This differs from the more conventional practice of raising
money through angel investors or venture capitalists, where a handful of
actors inject larger sums into your business.
In return for investing in your business, supporters will receive equity, albeit
with less liquidity than what do would get with public stocks. There are also
more relaxed rules governing crowdfunding than IPOs.
There are various forms of crowdfunding, including:

14. Equity crowdfunding, where, in exchange for their money, investors receive
shares in a company or the right to a portion of revenues or profits from a
specific product.
Debt crowdfunding, where investors lend their money to a company at
relatively high interest rates, thus mitigating their overall lending risk by
spreading a large amount of money in small increments across a large
number of loans.
Donation/rewards-based crowdfunding, where a company sets a fundraising
target and asks for donations—in exchange for some kind of token or receipt
of the eventual product or service to be developed.
(e) Venture capital
The first thing to keep in mind is that this funding source is not necessarily
for all entrepreneurs. Right from the start, you should be aware that venture
capitalists are looking for technology-driven businesses and companies with
high-growth potential in sectors such as information technology,
communications, and biotechnology.
Venture capitalists take an equity position in the company to help it carry out
a promising but higher risk project. This involves giving up some ownership
or equity in your business to an external party. Venture capitalists also expect
a healthy return on their investment, often generated when the business starts
selling shares to the public. Be sure to look for investors who bring relevant
experience and knowledge to your business.
BDC has a venture capital team that supports leading-edge companies
strategically positioned in a promising market. Like most other venture
capital companies, it gets involved in start-ups with high-growth potential,
preferring to focus on major interventions when a company needs a large
amount of financing to get established in its market.

15. Strategic Plan
Location – We have chosen online platform as it can be accessed anywhere in India and
anyone can order any handicraft item listed on our website to their location.
Maintaining an online platform is much cheaper in comparison to a physical store.
We also don’t have inventory as of now which will save cost for us but in future when we
will expand to international handicraft items we will keep an inventory.
Even for delivery we have partnered with various other delivery partners.
Promotion – For promotion we will do social media marketing on a large scale so that
we can make consumer aware about our website . Social media marketing can be tracked
easily and changed according to the result of last promotion.
We will give ads in newspaper and women’s magazines as woman’s are the first mover
in making a purchase
Price
We have kept the price very nominal as there are large website which keep a large
percentage of a product. We will also be having product as low as 300-400 to 10000+.
How will we bring sellers/vendors on our platform?
• We will make the sellers/vendors aware about our platform and help them to
understand that they can earn large profits from our platform.
• We will provide them training and development session how to work on our platform.
• We will help them in listing product on our platform.
• They can also list product on our platform using their own smartphone.
• Subscription based model - We will also offer a service where everything will be done
by us right from beginning to end with a just a minimal cost of Rs 2000 month.

16. Financials
Description Amount (₹)
Managing Directors Personal Funding 7,00,000
Bank Loan 3,00,000
Total Startup Capital 10,00,000
Sales Volume and Suggested Price
Estimated Sales (per month) 300 orders
Total Cost 1,50,000
+Mark Up 40% 60,000
Total Sales Revenue (Both Service) 60,000
Average Price 500
Start-up Costing for Indicraft.in
Start Up Costs Cost (₹) Equipment Capital
Cost
Cost (₹)
Registrations Cost Business purchase
price
Business name 2,000 Franchise fees
Licences 5,000 Start-up capital 15000
Permits 2,500 Plant & equipment
Domain names 500 Vehicles
Trade marks/designs/patents 4,500 Computer equipment 56000

17. Computer software 4500
Phones 2000
Accountant fees 5,000 Fax machine
Solicitor fees 10,000 Security system 8000
Rental lease cost (Rent
advance/deposit)
20,000 Office equipment
Utility connections & bonds
(Electricity, gas, water)
5,000 Furniture 19000
Phone connection 2,000
Internet connection 5,000
Computer software 10,000
Training 15000
Wage 2000
Insurance
Building & contents
Vehicle
Public liability
Professional indemnity
Product liability
Workers’ compensation 10,000
Business assets 50000
Business revenue 1,50,000

18. Printing 5000
Stationery & office supplies 1000
Marketing & advertising 50000
Total start-up costs 3,54,500 Total
equipment/capital
costs
1,04,500
Assumptions:
All figures are GST exclusive.
Profit & Loss for Indicraft.in
Profit
And
Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sales 1,50,000 2,50,000 4,20,000 5,50,000 7,00,000
Less
cost of
Goods
sold
90000 150000 252000 330000 420000
More
Gross profit/net sales
Expenses

19. Accountant fees 5000 8000 15000 20000 20000
Advertising &
marketing
40000 50000 80000 100000 120000
Bank fees & charges 5000 6000 8000 8000 10000
Bank interest 5000 5000 8000 8000 8000
Credit card fees
Utilities (electricity,
gas, water)
5000 5000 10000 10000 10000
Lease/loan payments 20000 25000 30000 35000 40000
Rent & rates 20000 20000 25000 25000 30000
Motor vehicle
expenses
Repairs &
maintenance
Stationery &
printing
2000 2000 4000 5000 6000
Insurance
Superannuation
Income tax 20000 25000 30000 32000 40000
Wages (including
PAYG)
2000 2500 4000 4500 6000
More…
Total expenses 1,24,00
0
1,48,50
0
2,14,00
0
2,47,500 290000

20. NET PROFIT (Net
Income)
49,600 59400 85600 99000 116000
Assumptions:
All figures are GST inclusive.