LUCKNOW UNIVERSITY

IMS

(2017~2018)

BUSSINESS PLAN
ON

“ Creative Handmade Greeting Card”

Presented to: Presented By:

Dr. Smita Singh Sushmita

Sonwani

MBA HR/IR, 4thsem

Roll no- 17216009803

1
 ACKNOWLEDGEMENT

First of all we are thankful to my Project Guidance, Miss Smita Singh for
providing necessary guidance concerning projects implementation. This project
consumed huge amount of work, research and dedication.

Still, implementation would not have been possible if we did not have a support
of many individuals and organizations. Therefore we would like to extend our
sincere gratitude to all of them.

We are also grateful to lucknow University, IMS for provision of expertise, and
technical support in the implementation. Without their superior knowledge and
experience, the Project would like in quality of outcomes, and thus their support
has been essential.

We would like to express our sincere thanks towards volunteer researchers who
devoted their time and knowledge in the implementation of this project.

Nevertheless, we express our gratitude toward our families and

colleagues for their kind co-operation and encouragement which help us
in completion of this project

2
 TABLE OF CONTENTS
CONTENTS Page No.

Acknowledgment
Table of Contents
Executive Summary
Introduction 1
Business description 2
Vision 3
Mission 4
Over All Objectives 5
Strategic Goals 7
Segmentation 8
Industry Analysis 9
 Economic Analysis 9
 Specific Market analysis 10
 Competitive Analysis 10
 Macro Environment 12
Production Plan 13
 Manufacturing 13
 Merchandising 14
 Strategic Production Resources 14
Marketing Plan 15
 Product 15
 Price 20
 Pricing strategies 20
 Pricing structure 21
 Place 22
 Distribution Channels 23
 Promotion 24
Financial Plan 32
SWOT Analysis 35
Critical Risk Factors 37
Exit Strategies 38
Annexure
 References 39

3
 INTRODUCTION
A wedding, the birth of a child, a new home, an important birthday… All of these are events
that mark our lives forever and should be celebrated with a gift you can cherish for a lifetime.
Every person is in search of attractive and innovative products for purpose of exchanging
gifts. There are numerous businesses offering a variety of products for customers to fulfill
their needs. But demand for handmade gift items is substantial. People like to purchase
handmade items as gift because when an item is handmade, a little part of the creator of that
piece goes into it. Artists put their ideas, personality, style, and often blood, sweat, and tears
into their work which makes that work unique.
The fashion for handmade items as a gift is Evergreen. People prefer to purchase handmade
stuff as it provides them with a level of individuality which is not available from mass market
retailers. They prefer personalized gifts on lavish items.

Thus idea of “Creative” is to establish an outlet that makes available a variety of handmade
items under one roof and to provide a platform that will facilitate both i-e talented house girls
and customers. By offering a variety of handmade products to customers having demand for
them we will enable these homemade girls to earn being at home.
In order to check the demand and potential for our idea we conducted a survey in our target
market. We came to know that it is a good time to launch such a project as people showed a
high interest for it.

4
 BUSINESS DESCRIPTION
Idea of “Creative” is to provide a large variety of innovative and creative handmade items
under one roof. The name of our organization is “Creative” which is actually an effort to
provide exceptional items for special celebrations and occasions. It is basically a
manufacturing as well as merchandising business in which we are going to present a wide
assortment of handmade items.

Point Of Uniqueness:

All the things and the services we are providing may not be unique according to the range of
things now days. Present businesses may be providing a large variety of gift items But the
difference is there that the things provided by us are purely handmade. Creative ideas are
used to turn a rubbish and useless stuff into innovative design. There is no such business
prevailing in our target market. This is the point of uniqueness in the particular geographical
area in which our business lies.

Products:

A variety of hands made items are provided under one roof which include:

 Handmade Gift boxes

 Handmade Wedding boxes
 Handmade Cards
 Handmade Baskets
 Jewellerys
 Handmade decoration pieces

5
 VISION OF CREATIVE

To become the creative house of first choice in our chosen areas

by building beneficial and lasting relationship with customer

through a process of continuous improvement.

6
 MISSION STATEMENT

To convert the creativity into reality in hand!

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 OVER ALL OBJECTIVES

Main Objectives:

Main objective of Creative is to glorify the different occasions of our customers by providing
exclusive and quality products. Our modish style reflects a sense of taste that urges the
customer to express his or her feelings by selecting a gift from a variety of innovative product
for their dear ones.
Commitment To Well-Being

We believe well-being is the cornerstone of personal and professional growth.

Without personal and professional well-being our mission cannot be achieved.

Commitment To The Team Objective

We believe in total commitment to the team. The team objective is a guide for us to
follow in our service to our clients, support of each other, and team growth.

Commitment To Goal Attainment

We believe every individual should have personal and economic goals. A joint effort
will be put forward to identify and achieve our long-term objectives.

Commitment To Our Time Management System

We believe our time management system should be utilized in all business activities
to provide maximum efficiency and effectiveness for our customers. We will move
towards managing our time and setting specific goals within that time.

Commitment To Excellence In All We Do

our philosophy is to achieve excellence in all that we do. All efforts of our team are
directed towards achievement of maximum quality.

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Commitment To Incredible, Outstanding, Unbelievable customer Service

We believe in extending such incredible service to all customers that they feel real
sense of creativity in our establishment. We constantly anticipate, meet, and exceed
our customers' expectations.

Commitment To Value-Added Service

Value-added means doing and giving more than what is expected. We believe each of
us needs to go above and beyond the call of duty. By developing creative ideas value
addition will be ensured in our products.

Commitment To Innovation

We believe our strength lies in our passion to implement new ideas and embrace
change. We realize that innovation involves risk of failure, but we choose to face risk
of failure in our pursuit of success rather than fail passively

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 STRATEGIC GOALS

Through strong commitment and efficient strategic goals, “Creative” will be first choice of
customers and be recognized as a business leader. We feel very confident that the goals can
be reached. These Strategic goals include following:

Customer satisfaction
Building strong customer relationships
Making contracts with different stakeholders (Suppliers)
Maximize the switch over Cost
Capturing Maximum Market Share

Plans To Achieve Those Goals

The very first result that a customer wants is that, satisfaction and contentment from the
product. Customer will only visit for second time, if he was satisfied fully the first time. By
providing innovative and quality products Creative can build strong relationships with
customers.

Keeping our suppliers with us for a long period of time is a challenging task. Contracts will
be made to home-artisans to provide their products only to “Creative”.

After building relationship with customers and suppliers, our main focus is to maximize the
switch over cost of the customer. By issuing annual, semiannual and quarterly discount offers
we will bind the customer to carry with us. When we are successful to retain the old customer
for the maximum period of time it will be easy for Creative to focus and spend more in
attracting the new customers and to capture the maximum share of the market.

10
 SEGMENTATION
Creative target segment are all the people of Lucknow who love creativity, which includes
upper, middle and lower middle class. Along with this Creative has segmented its target
segment into the following category:

Geographical Segmentation

Creative is a start up business; therefore it has geographically segmented its target market.
This geographical region is Lucknow.

Psychological Segmentation

Psychologically targeting, Creative is concentrating its focus on Elite class, Middle Class and
Lower Middle class.

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 INDUSTRY ANALYSIS
Economic Analysis:

The economic position of the country as well as the people allows this industry to flourish
and grow. A quick view on main glimpse on economic position is as follow:

Real GDP grew by 7.4 percent in 2017 & 2018 as against 7.1% last year i.e 2017-18.
Consumer Price Index (CPI) in india increased to 136.50.
India’s per capita real income has risen by 8.3 percent in 2017-18 as against 9.7
percent last year 2016-17.
The industry of handmade items is mostly operated in local environment. And in this
perspective the rate of advancement is slow. However, there is possibility of high
advancement in the market because a big segment of market has psyche of been attracted by
creative handmade talent much quickly. Due to that, industry contains more potential and
depth to invest in that business.

As per the rules and regulations of the government of India, there is not any restriction on
establishing such business and the working.

Overall Market Analysis

Market for different handmade items is widespread in India. Despite of presence of different
manufacturers that provide a large variety of readymade item, demand for handmade items is
substantial. People prefer handmade items for exchange of gifts or fashion wears because
they provide a sense of individuality and uniqueness. This tendency of people indicates
towards potential and depth to invest in this business. Although the handmade items industry
is spread in all over the country, it is mostly operated in local environment.

There are no big players in market of this industry .Most of operator in markets are having
their businesses as sole proprietorship or partnership. About 70% of players in Market are
sole proprietors. This trend in industry caused “Creative” to be a sole proprietorship business.

Due to advancement in technology and rapid adoptability of internet, this industry is being
promoted online. Major players in Market use the internet based promotional tools. They
have published their products online to attract the potential customers.

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Specific Market Analysis

As mentioned earlier, handmade items industry is mostly operated in local environment so

“Creative” has also targeted a small local segment of Market i-e Luck now city.

Economic condition of people living in Lucknow is a good signal for business. Per capita
income of people in Lucknow is 48584, which indicates high purchasing power of residents.
Such economic condition supports skimming pricing strategy of “Creative”.

Competitive position is also in favor of our business in market. Although there are many
players in the market offering same products but no one is offering the same things in terms
of handmade creative ideas. As there is no such business already existing in market so there
is no direct competitor.

Competitive Analysis:

Competitive analysis involves a look on competitors of Creative and competitive position of

creative. While discussing the competitive position of “Creative” following factors can have
greatly influence:

Threat of new entrants

Bargaining power of buyer
Bargaining power of supplier
Rivalry among competitors
Substitutability
Threat Of New Entrant (HIGH)

Threat of new entrants for Creative is high. This is because trend for use of handmade items
is evergreen. Startup cost is also low which shows that there are low entry barriers. This
attracts the new entrants to get enter into this business.

This threat can be lowered by maintaining a sustainable competitive advantage of providing

quality products and innovative designs.

Rivalry Among Competitors (LOW)

Rivalry among competitors is low for Creative as there are a few competitors in whole
industry. In target market no direct competitor exists so Creative has a golden opportunity to
capture maximum market share.

13
 Substitutability (HIGH)

Threat of substitute for Creative is very high. There are a lot of substitutes available in market
for products of Creative. High prices of Creative than prices of readymade items in market
have lowered switching cost for Creative products.

Bargaining power of Buyer (HIGH)

Bargaining power of the buyer with Creative is high because of the availability of so many
substitutes in the market.

Bargaining Power Of The Supplier (LOW)

Bargaining power of the supplier is low. Because of availability of large number of suppliers
in the market, Creative is in better position to defend its interest. There is significant number
of home artisans who are willing to supply their products to Creative for sale. Creative power
to negotiate with them in its own favor is high

14
 MACRO ENVIRONMENT
Macro environment of Creative includes the following factors:

Political Forces

Legal & political forces can highly influence any business. In India, there is so much political
instability which directly affects economy because purchasing power of people will be
reduced.It can highly influence Creative to operate. Coping with this threat is a challenge for
Creative.

Technological Forces

Technological factor is involved in this project in a way that customers can order products
online for ceremonies. No rocket science will be adopted by Creative for production
process.Basically, idea is providing handmade items, so creative ways of utilizing waste
material will be explored.

Social Forces

Social forces of any country show how the values, needs and culture of that country’s people
can affect the organization. In case of Creative this factor is highly in favor of organization
because people have great tendency to like hand work for gifts and fashion wears.

Economic Forces

Economic forces of any country can affect the availability, production and distribution of
resources among competing users. Now a day in India inflation is prevailing and it can affect
Creative to a great extent. Cost of doing business can be increased. However this threat is
minimized by adopting boot strapping strategy.

15
 PRODUCTION PLAN

Manufacturing
Our products will be manufactured in our production outlet. There will be a separate portion
behind outlet that will serve as production area, All of girls will work directly under authority
of operational manger. Creative ideas for innovative products will be explored through brain
storming sessions.

Production process of Creative involves following steps:

Purchase of material and accessories

For making cards and shopping bag,chart paper is essential thing. Satin ribbons, shimmering
bows,Laces, glue and other material will also be needed to make glorious products. Including
all these, other necessary accessories will be purchased from our regular suppliers in bulk so
that cost minimization can be made. Necessary raw material required for making different
types of “Dough“ will also be purchased.

Other than above material, waste jewelry accessorieswill be acquired to be used as base for
handwork.

Production Process

Cards of inspiring designs, gift boxed of various sizes and unique wedding boxes will be
made through handwork and using appropriate stuff.

Dough will be kneaded in quantity enough for use in whole months. Once the dough is
prepared, it will be kept in special greased containers. Different jewelry items will be made
using moulds of various sizes. Artistic designing will be made on these items using dough
flowers.

Using handwork and special techniques wax gel will be converted into candles of different
designs and will be embellished using different accessories.

16
 Packing:

Different gift and jewelry items will be made available in striking packing.Creative’s
monogram will be printed on each item’s packing going to be sold at outlet.

Merchandizing:
Creative has also planned to acquire finished products from house hold artisans and to sell
them on reasonable prices for earning profit for both parties. Thus Creative is not only
earning for itself but also serving as a platform for those innovators who want to
commercialize their handmade products. Supply Chain Manager is responsible to seek and
develop good relations with these suppliers.

Strategic Production Resources

Designs and artistic techniques of production are the basic and primary assets of creative.
With these two resources we will be able to develop the most unique and genuine variety of
products in the marketplace.

Firm’s creative management is also a strategic resource for Creative. Management team is
required to be innovative and has a passion to pursue opportunities related to hand-made
items. As the business grows we will carry on developing new designs and will strive to hire
people who also possess the drive to continue the Creative ‘goal to develop the new designs
and bring innovation.

17
 MARKETING PLAN

The most important plan for a new starting venture is a marketing plan because without the
marketing plan, a business can never exist. The marketing is a main portion, and the success
of any venture heavily relies on its market strategies.

Creative is going to make its customers aware through efficient marketing plan that we value
our customer at each and every point. Through effective marketing strategies it will be
realized to customers that if they want to add seven colors of rainbow in the precious
moments of their life then they must have the spell bound charm of Creative. "Creative”
marketing efforts focus on making its customers realize that:

We are offering variety of imaginative hand-made articles that can embellish their
special movements
Our ideas are creative and innovative that is what others are lacking.
We are going to establish a new trend in that society by giving variety of handmade
ingenious items under one roof.

PRODUCT
A list of magnificent products of creative involves following product lines:
Handmade Cards
Handmade Gift boxes
Handmade Wedding boxes
Handmade Shopping Bags
Jewelry
Handmade decoration pieces

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 Handmade Cards
Handmade greeting cards in a variety of styles and sizes are offered for special occasions.
Unique ideas are used to embellish the cards for making special movements more special.
Birthday cards, wedding cards, anniversaries card, friendship cards and beautiful cards for
many other special events are offered.

19
Wedding Boxes
Gorgeous Boxes of different sizes to carry different things that are usually used in wedding
ceremonies as gifts are offered by creative. Wedding gifts are always very appealing when
they come in adorable packaging. Our unique wedding gift boxes will surely do the job of
impressing customers while reflecting their unique style.

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Handmade Shopping Bags
Our talented and creative team members have poured their heart out to create the exotic
collection of handmade shopping bags. These handmade paper shopping bags are made with
durable and strong card papers that combine both utility and aesthetics. All these handmade
paper bags are flawlessly designed with beautiful papers and meet the demands of diverse
clients.

21
Handmade Decoration Pieces

Different decoration pieces ornamented with beautiful work of handmade dough flowers to
decorate the houses and even for offices, are also included in creative’s offerings.

22
 PRICE
Customer’s decision to purchase a product is greatly influenced by Price tag placed on it.
Creative has assigned reasonable and justified prices of its products which may realize the
customers that they have made their moments cherished in a unique way in very cheap prices.

Pricing Objectives
Creative is a new business in market with unique and innovative ideas. It wants to have high
growth rate hence it has to set that price for its product which gives maximum possible profits
in the initial couple of years.

Creative handmade products are not that much expensive than those from a factory assembly
line, but, for very good reasons. The extra time, effort, passion and expertise that goes into its
handmade products are what make them worth the extra price to buyers.

PRICING STRATEGIES
In pricing, Creative is focusing in the following strategies:

Market Skimming Strategy

Creative is using market skimming strategy in which it is offering high quality and creative
products on slightly increased prices than prices factory assembly line products. Creative
want to have maximum possible profit through introduction of its creative and unique ideas.

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 Product Bundle Pricing

In order to move stock that is kept as unsold inventory, Creative will use Product bundle
pricing strategy. It will combine several products that have left behind in stock in the one
package and will offer them on reduced rates so that potential loss of unsold inventory can be
avoided.

Value Based Strategy

For the pricing of products, Creative is following the value based strategy. In order to cover
up the cost and to gain maximum possible profit, Creative has decided to take 40% markup
on cost price of each product. Such high rate of markup is set on base of effective value of the
customer for handmade items.

Name of items Price Mark Up

Greeting cards 100-150 35%
Wedding Boxes 200-250 35%
Gift Boxes 150-200 35%
Candles 350-400 35%
Decoration pieces 500-2000 35%
jewelry 500-1000 35%
Shopping bags 100-150 35%

PRICING STRUCTURE

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 PLACE

Creative has planned to acquire a Shop on rent in Khayaliganj, Aminabad,Lucknow. It is

situated at center of city. The main reason behind selecting this location is this, it is growing
area for all branded shops and it is now one of the best shopping place in Luck now.
The shops like Jai Shree cards, New Universal Gift Shop, NOVELTYCARDS, Greeting
Cards, R K Archives Cards & Gift Palace and many other brands are by side with our outlet.
So there are many chances that people will visit our outlet along their shopping.

Address:
“CREATIVE” Khayaliganj
Amina bad
Lucknow,226018

Contact:
Email: info@creative.com.pk
Phone: 8127033454
0331-5832183
Web site:www.creativeitmes.pk

25
 DISTRIBUTION CHANNELS

Initially Creative is operating only from one outlet, so it doesn’t have any complicated
distribution channel right now. Creative is mainly using the following approaches for
distribution:

Direct Selling

Creative will directly sell its products to target consumers. First it takes the raw material from
the suppliers. Using that raw material a variety of innovative and appealing products will be
produced on the outlet of it by its skilled staff. These products are sold to customer when
he/she visits the outlet. In direct selling following model is used by Creative:

Suppliers Creative End consumers

Courier Service:
Creative will also conduct business online. Due to advancement in technology and rapid
adaptability of internet it has been crucial for it to expand its business activities over internet.
Online orders in response of effective electronic advertisement will be received and shipment
of these orders will be made through Courier Company.
Creative has following model for online trading:

Online
Shipment End Online
Orders consumers Receipt

26
 PROMOTION

Creative will use Marketing communication strategy for promotion of its products. This
Strategy involves promoting heavily to potential customers which will create a demand that
will pull the products through the distribution channels. A handsome amount is set aside from
financial resources for heavy promotion of business in starting years. For promotional
activities unique logo and corporate colors will be used in all means communications.
Following promotional tools will be used to build Brand image of creative in mind of
customers:

ADVERTISING

Brochure
Brochures describing product specifications of Creative will be designed. Creative offering
along with its unique logo will be printed on it. These brochures will be distributed door to
door with help of local news papers including:

 Lucknow times
 Hindustan Times
 Youth choice newspaper
 Patrika Lucknow

27
 Hoardings
The location where we’ll use hoardings for advertising of outlet along with estimated budget
is given bellow:

Hoarding Campaign forthe First Month

LOCATION QTY. SIZE RATE

(RS.)
Chowk 01 60×24 10,000
IT 01 60×24 10,000
Chauraha
Aminabad 01 60×20 10,000

Total 03 - 30,000

Press Advertisement:
Press advertisements will be released in newspapers to which potential customers in target
market have easy access. Newspapers in which ads will be given are mentioned below along
their estimated cost:

Newspaper No. Cost/Ad

Lucknow Times 1 35000
Hindustan Times 1 30000

Youth choice 1 10000

newspaper

PatrikaLucknow 1 8000

Total 4 83,000

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 Internet marketing

Today most effective way of advertisement is through internet. Creative has developed its
own Website at which products are published and online orders are taken. Other than
developing its own website, Creative has planned to promote its business through social
networking sites. Recently there is a great trend of public to move towards these sites to
establish social networks.
Following are some a web point at which creative has decided to promote business by giving
business ads.
Web Point No Cost/Ad

Face Book 1 9000

Linked In 1 5000
Instagram 1 6000

Total 3 20,000

Give Aways:
Other than giving ads, Creative has planned to manage different online contest so that
maximum people may be attracted to web page. Exclusive surprise gifts will be given to
winners of these contests.

Transport advertising:

Creative logo along its message will be promoted through transport advertising. Such
medium for promotion is selected for conveying message to far areas of target market.

Broadcast Advertisement:
These days use of radio has been increased in young generation. In order to convey business
message to them, Creative has decided to give an ad on FM 98.5. Other than radio
advertisement ads will also be given on local cable channels.

Exhibition:
For bringing our offerings into knowledge of potential customers, Creative has decided to
participate in Exhibitions which are managed by chamber of Commerce for support of SMEs

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 FINANCIAL PLAN
Creative being a new business needs a high capital investment to recover its expenses like
advertisements, salaries along with the cost of production. Thus Creative is investing

Rs 623190 as its initial capital investment.

Sources of funds:

Creative has five active partners, who are fulfilling the whole capital requirements to meet its
startup cost. Capital Structure of Creative includes only Equity. No debt is included to raise
funds because it has an extra burden of expenses as interest, which results in lower profits.

Equity Structure

Capital Structure (in Rs.)

Owner’s Equity 400,000

Bank Loan 223190

Total 623190

Budget for production of units:

JA FE MA AP MA JU JU AU SE OC NO DE Tota
N B R R Y N L G P T V C l
Sales 100 130 140 145 145 155 160 165 175 185 190 200 189
(Estimated 0
)
+Ending 10 20 25 20 15 25 25 30 35 40 40 45 -
Inventory
Units 110 150 165 165 160 180 185 195 210 225 230 245 -
Available
For Sale
-Opening 0 10 20 25 20 15 25 25 30 35 40 40 -
Inventory
Units To 110 140 145 140 140 165 160 170 180 190 190 205 193
Be 5
Produced

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 Estimated Production Cost

JA FEB MA APR MA JUN JUL AUG SEP OCT NOV DEC Total

N R Y

Materia 231 2940 3045 2940 2940 3465 3360 3570 3780 3990 3990 4305 40635

l 0

Laces 264 3360 3480 3360 3360 3960 3840 4080 4320 4560 4560 4920 46440

FOH 500 6000 6500 6000 6000 7000 6500 7000 7000 7500 7500 8000 80000

Total 995 1230 1302 1230 1230 1442 1370 1465 1510 1605 1605 1722 16707

0 0 5 0 0 5 0 0 0 0 0 5 5

Per Unit Cost

= Cost of units produced

Number of units produced
= 167075
1935

=86.34

Estimated Operating Cost of Creative

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Total

Rent 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000

Salaries 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 11500 138000

Dep 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000

Advert 3000 5000 6000 4500 4500 5500 5000 5500 5500 6000 5000 4500 60000

Courier 500 1500 2000 1000 1000 1000 1500 2000 1500 2000 2000 2000 18000

Total 40000 43000 44500 42000 42000 43000 43000 44000 43500 44500 43500 43000 516000

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 PRO-FORMA INCOME STATEMENT

Following is Creative’s projected income statement based on estimated operating expenses.

Projected net profit is calculated from projected revenues less projected costs and expenses.

Pro-Forma Income Statement

Creative
For the period 2017-2018
Sales Rs 756000*
-CGS 163189
Gross profit 592810
Less Operating Expenses:
Rent 240000
Salaries 138000
Depreciation 60000
Advertisement 60000
Courier expenses 18000
Net profit transferred to B/S 76810

*Sales amount = Average sale prices x Estimated number of units sold

= 400x1890
= 756,000

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 PRO-FORMA BALANCE SHEET

A summary of a Creative’s financial position at end of year 2018 shows projected

assets, liabilities, and net worth of it. Pro Forma Balance Sheet of Creative is as
follow:

Pro-Forma Balance sheet

Creative
As on 31st march, 2018
Assets Amount Liabilities Amount
Rs Rs
Fixed Assets Owner’s Equity
Gas generator 125,000 4000000
Fixtures 100,000 Bank loan 223190
Equipment 50,000
Furniture 5000
Digital camera 25000
Computer 35000 Total Capital 623190
Total fixed assets 340,000
less Net Profit 76810
Depreciation 60000 280,000
Building security 100,000
Preliminary expenses
Advertisement 300000
Less amortization 60000 240,000
Current assets
Closing stock 3,886
Cash in hand 50,000
Bank Account 27,924
701810 701810

*Creative don’t have any account payable because we will pay cash on the daily basis.

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 PRO-FORMA CASH FLOW STATEMENT

CASH FLOWS STATMENT 3RD YEAR 2017-2018

Operating Profit 76,810

+Depreciation 60,000

Less cash flow from Operating activities

Stock (3,886)

Bank (27,924)

Building security (100,000)

Cash flow from capital Expenditure

Gas generator (125,000)
Fixtures (100,000)
Equipment (50,000)
Furniture (5,000)
Digital camera (25,000)
Computer (35,000)
Cash flow from Financing
Share capital 623190

Net cash in hand 151380

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 SWOT ANALYSIS
STRENGTHS

Innovative and Passionate partner

Huge Profit Margin
Strong market research before entry in the market.
First mover advantage to provide handmade unique item in targeted market
Operators have completed degree in Business Administration
Not necessary to rely on banks for startup finance
Provides discount for the regular customer.
Customer oriented.
Waste recourses are utilized in the best way.
Availability of significant sponsors.
On line handmade item purchasing facilities.

WEAKNESSES
Lack of practical experience in mass production of stock
Low profits in the early stages of the business.
Lack of awareness among public regarding the business.
Uncertainty about the business success.

OPPORTUNITIES

Level of the demand of cultural items is increasing day by day.

Drive away of Consumers from lavish items toward more personalized gifts.
No Direct Competitor in Gujrat market
Easy availability suppliers providing innovative products
People are fed up with consistency so handmade products can give them uniqueness.
Serving the under-served markets

THREATS

Decreasing purchasing power of people due to political instability in country.

Possibility of new entrants in the market due to low entry barriers.
Rapid use of readymade gift items in the society.

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 CRITICAL RISK FACTORS

Risk Management:

The objective of risk management is to reduce different risks related to business. It may refer
to numerous types of threats caused by environment, technology, humans, organizations and
politics.

Critical Risks Analysis

For startup business there are many risks involved that are caused by different factors. The
risks which are analyzed by Creative are as follow:

 Management Risks
 Marketing Risks
 Operational Risks

Management Risk:
In this risk we realize that there may be any dispute in the management team due to any
unforeseen reasons which may result to terminate any of the members.

Remedy:

In this case when any of the management team members leaves the firmshe is not entitled to
use the name of the firm. She cannot start the same business with any other name. Such risk
is attempted to be controlled by including exclusive clauses in partnership deed.

Marketing Risk:

In case of marketing we realize that there may be any fault in our marketing plan due to
which business can suffer.

Remedy:

For the backup of this risk we have different marketing plans with flexibility, as if in any case
plan A does not work the plan B will be executed.

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Operational Risk:

There may be a risk which can disturb the operations of the business such as production.
There may be load shedding problem etc

Remedy:

For minimizing this risk we have adopted proactive measures by having firm’s own
generator.

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 EXIT STRATEGIES

Creative, after analyzing every risk and exit ways of the business, has devised an exit strategy
incase our idea of introducing handmade items does not work. The exit strategies of Creative
areas follow:

Legal documents of partnership will be signed by the partners that partnership will not
be resolved until 3 years.
After five years if any partner wants to exit then he has to inform to the organization
at least6months before.
If any partner exits from the business, she will get his or her share after 6 months
In case of losses every partner will be just liable for her share in organization.
In case of winding up the business amount received from sale of asset will be divided
among partners equally.

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 References:
Robert D. Hisrich, Michael P. Peters, Dean A. Shepherd, Entrepreneurship, 7th
edition, page 209-219, 233-255, 289-305
http://www.craftexpert.co.uk
http://www.thespruce.com
www.creative.com
Discussions with respected teachers and seniors.

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