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BUSINESS

PLAN
AUTOSAVE
SWITCHES (PVT) LTD.

MADE BY ---
Anuj Kumar
Sec-B
Table Of Contents
Business Plan
(A) TEXT PART
1. Executive Summary
2. Company
4. Management
3. Market Information
4. Product
5. Product Development
6. Production Sales Forecast
7. Market Size
8. Sales forecast
9. Sales Plan
(B)CALCULATION PART
10. Projected Financial statements
A) Cost of project
B) Statement of Working Capital
C) Loan Repayment statement
D) Schedule of fixed Assets
E) P&L A/c
F) Balance sheet
G) Fund Flow Statement
H) Break Even Analysis

TEXT PART
1. Executive Summary
This business plan has been prepared to obtain financing in the
amount of Rs 5888750 to complete the product development, set up
manufacturing and implement an aggressive sales and marketing
program. Autosave Switches Pvt Ltd. is a new company which has
developed an automatic electronic light control product called Autosave
Switch for consumer, commercial and industrial applications with a
potential market of over ------ million over the next 5 years. The new
product, which is called "Autosave Switch" will automatically turn lights on
and off when the ambient light in a room reaches a predetermined level.
The increasing concerns about security, personal safety, energy
conservation and the general trend towards automation has created a
market for devices which reduce or eliminate the problems associated
with manual control of lighting systems. Homes, offices, factories,
hospitals, schools, public buildings and construction sites are only a few of
the more obvious applications. Autosave Switch will be particularly
valuable in remote or unattended locations.

Competition in Market

There are some competitors in India for products that are in the
process to develop the product that are also working on the technology,
similar to the proposed Autosave switches Pvt Ltd. product. Autosave
switches Pvt Ltd. combines newidea, low cost, high reliability and
adaptability to a wide range of applications. Autosave switches Pvt Ltd.will
also be sold through an effective distributor and dealer network and will
be adaptable to a wide range of industrial, commercial and consumer
needs.

2.Company
Autosave Switches Pvt Ltd. was incorporated in Meerut,
Industrial Area Partapur on March 1, 2009.
The Company's business address is:
786,E block,
Sadbhawna Building
Delhi Road
Partapur
Meerut
Telephone (0121-2681450)
Fax: (0121) 2681450
E-Mail: autosave @autosave.com

Autosave Switches Pvt Ltd. was established to develop and manufacture a


specialty electronic circuit control product. The product is still under
development. At present, the Company does not have any full time
employees. The Company is presently operating out of the residence of
one of the principals.
LOCATIONAL ADVANTAGE : Our manufacturing unit is located at industrial
area of Partapur Meerut (UP),its 24 hr electricity zone, no problem for
water supply, Near(around 50 km) to NOIDA from where we will purchase
Raw material ,and the land is comparatively cheaper than the high profile
industrial locations like NOIDA or Gurgaon

The two principals of the Company are:


Mr. Anuj Kumar, President and original developer of the product.
Mr.Arun Kumar, CEO of the Company, responsible for production.
The two principals each own 50% of Autosave switches Pvt Ltd. Any
questions relating to the business plan are to be directed to Mr. Anuj
Kumar.

3. Management Team
The current members of the management group are the principals of
Autosave Switches Pvt Ltd.
Mr. Anuj kumar is a Fresh Management graduate from the Master school
of Management. He has also served with Army for 5 years.
Mr. Arun Kumar is an engineer (Electronics and instrumentation)
graduated from the Shobhit Institute of Technology (Shobhit university,
Meerut) and completed his MBA in Operations Management from IIT
Kharagpur and has over 3 years industrial experience in electrical
components and electronics manufacturing. He is currently employed as
the production manager with the same electronics firm as Mr. Anuj Kumar.
Mr. Arun is responsible for technical development and Mr. Anuj kumar will
be responsible project management. Mr. Anuj and Mr.Anuj each own
50% of Autosave Switches Pvt Ltd.
The sales and marketing functions will be the responsibility of an
individual who is having over 15 years sales and marketing experience in
the home entertainment industry. Along with Mr Anuj kumar, Both
individuals are prepared to resign their present positions and make a full
time commitment to Autosave Switches Pvt Ltd. when financing has been
arranged.
Initially, the accounting and financial control functions will be handled on
a part-time basis by a senior member of a firm of chartered accountants.
The CA is prepared to work for modest compensation until the product has
been developed and is ready for manufacturing. Finance officer will also
be there after production is started.
Detailed resumes of the management team members are available to the
financers.

4. The Market of Autosave switches


The primary markets for Autosave Switches Pvt Ltd. at this time which
provide the greatest sales potential in a relatively short period of time are
in all over India where we can save a substantial amount of electricity by
using these switches but company will initially target only north India.
Consumer, commercial and industrial users are all prospective customers
for the product. The major potential market in the consumer sector will be
accessed through the large retailers of small appliances, brighting fixtures
and electrical hardware such as:
• Major department stores
• Hardware store chains
• Retail brighting outlets
• Government
The primary customers in the commercial and industrial sector will be
electrical engineering firms, electrical contractors, industrial plant and
commercial building maintenance departments, security companies and
public buildings, municipal corporations etc. The target markets are easily
accessible and identifiable.

5. The Product Information


Autosave Switch is an automatic electronic switch for controlling
electric lights.
The complete assembly is the same size and shape as a standard wall-
type electric light switch and is designed to replace the wall switch using
the same standard mounting screws and electrical wiring. No
modifications to the mounting or wiring is required.
Autosave Switches Pvt Ltd. consists of an optical sensor which detects the
amount of light in the room and an electronic circuit which operates a
sensitive relay for turning the lights on and off.
The sensitivity of the light detecting circuit can be set to one of three
preset levels depending upon the type of application (i.e. to maintain a
minimum acceptable light level for normal vision in an office; to turn the
lights on under partially subdued ambient light conditions; or to switch
the lights on only under extremely low light levels).
The adjustment control is easily accessible on the face plate of Autosave
Switch. A manually operated switch is also available on the face plate of
Autosave Switch to disable the automatic control and enable Autosave
Switch to be used as a standard manual on/off light switch.
A unique feature in Autosave Switch is the extremely sensitive and
reliable light sensing circuit. The Bright-Guard product is not patented.
However, a detailed description of the product and design drawings have
been witnessed and dated by a notary public and two independent electronic
engineers.

6. Product Development
An engineering prototype model of Autosave Switch has been
developed to prove the concept and basic design of the product. The
engineering prototype satisfactorily demonstrates the technical feasibility
and basic operation of the product.
The following is a list of additional engineering development work that is
required before the product is ready for mass production.
S No TASK

1. Refine design to improve operation and to reduce costs.

2. Build 2 engineering prototypes for tests and evaluation.

3. Conduct performance and reliability tests on the engineering


prototypes.

4. Modify design and repeat performance tests as required.

5. Prepare formal engineering drawings, design packaging and


establish projected manufacturing costs.

Special engineering test equipment will be required to conduct


performance and reliability tests. The test equipment will consist of
special light-sensing and measuring equipment and controlled light
sources. There are no major or critical risks that are anticipated to be able
to successfully complete the engineering development.
The technical feasibility has already been proven on the engineering
prototype. The balance of the engineering development program will
consist primarily of refining the design to optimize the performance and
reliability and to reduce manufacturing costs. No other special facilities
except the special test equipment mentioned above will be required to
complete the development.
A technician will be required to assist Mr. Arun Kumar with the
engineering development.

7. Production Process
Autosave Switch will be manufactured using standard electronic
assembly techniques and. All electronic circuitry will be mounted on a
printed circuit board which will be installed in a plastic moulded case.
The electronic printed circuit board will be manufactured under sub-
contract by a local electronics manufacturing company.
All materials and components for the product are readily available "off-
the-shelf" from at least three suppliers at NOIDA.
Autosave switches Ltd. will assemble the electronic printed circuit board in
the plastic case and test the product before shipping. A total of 7
assembly personnel, plus an assembly line supervisor, will be required to
assemble the product. Two test technicians will be required to inspect and
test the product before shipping.
Approximately 500 square yards of space will be required to store
inventory, assemble and test the product. Special semi-automated
equipment will be required to test the product after assembly. Each unit
will undergo 24 hours of continuous testing before shipping to a customer.

7. Market Size
✔ The existing market for the product in the market all over the India is
about 2 ,60, 000 units.
✔ The market is expected to grow at an annual rate of 40% over the
next 5 years.
✔ Estimated size of the total Indian market over the next 5 years:
20,00,000 units

8. Sales Forecast
The following sales forecast is considered to be an estimate based on the
responses from the Market. Additional sales can be anticipated with
increased market penetration and product recognition.
Unit Sales Average Unit Total Sales (Rs)
Selling Price (Rs)

Year 1 15,000 1500 Rs2,25,00,000


Year 2 28,000 1500 Rs4,20,00,000
Year 3 42,000 1500 Rs6,30,00,000
Note: Year 1 will commence approximately 5 months after financing has
been arranged. The sales over the first 3 year will be divided
approximately as follows:
60% to North India
30% to South India
10% to the East and West India
The above estimate of sales are considered to be extremely conservative
in view of the wide range of applications, the unique operating features
and the low selling price of the product.

9. Sales Plan
The sales program for the first year will concentrate on developing the
North Indian market. The North Indian sales program will commence
within six months after the finance is available .
The sales organization will be divided into two groups:
• Consumer sales
• Commercial/Industrial sales
➢ The consumer sales group will concentrate on developing
a dealer network (retailer) that will sell the product to the
consumer.
➢ The initial sales efforts will concentrate on the national
department store chains, national lighting outlets,
hardware store chains.
➢ In general, each of the above retailers uses a central
purchasing department for all outlets in India.
➢ The commercial/industrial sales group will also require two
full time sales people to concentrate initially on
developing a wholesale distributor network with a least 12
distributors in north India and 6 distributors in the south
India.
➢ The distributors will have access to the major electrical
contractors, engineering firms and electrical suppliers in
their respective areas.
➢ A secretary and a sales order clerk will provide sales
support for both the consumer sales group and the
commercial/industrial sales group.
➢ A simple but effective advertising campaign will be
implemented to support the sales efforts. Consumer
advertising will consist of monthly advertisements in
publications such as T.V. Guide, Business India and
Economic Times. Half page advertisements will be placed
in two monthly trade publications with a large circulation
to the electrical contracting and plant maintenance
markets in India.

CALCULATION PART
10. Financial Requirements
The following is a summary of the projected first year
financial statements.

SALES 22500000
(15000*1500)
Cost of Raw
Material
30 % of Sale 6700000
Manufacturing
Exp.
5 % of Sale 11
25000
Salary and
Wages
President 48
0000
CEO
480000
Finance 2
manager(1) 40000
Marketing 3
Executives (2) 60000
Supervisors (2)
240000
Administrative
Staff
Accountant(1) 96000
Clerk(1) 84000

Technical- 840000
worker(10)
Unskilled labour(5) 1
80000
Establishment
cost
3% of sales
675000

A)COST OF PROJECT
(Rs 000)
EXPENSES SOURCES OF FUND
LAND(500*5000)per sq 250 OWNER FUND 5202.917
yd 0
BUILDING(400*3000)(per 120 LONG TERM 3570.000
sq yd) 0 LOAN
PLANT &MACHINERY 200 WORKING 2318.750
0 CAPITAL
ELCTRICITY & 50 CREDITORS 558.333
INSTALLATION 0
FURNITURE 70
0
PATENTS AND 50
TRADEMARKS 0
OTHER FIXED ASSETS 20
0
WORKING CAPITAL REQD. 365
0
PRELIMINARY EXPENSES 40
0
TOTAL 116 11650
50

B)STATEMENT OF WORKING CAPITAL


(Rs-000)
CURRENT AMOUN HOLDIN MPBF OWNER’S
ASSETS T G (45%) FUND
PERIOD (25%)
SUNDRY 1875.00 1 MONTH 1406.250 468.750
DEBTERS 0
STOCK
RAW MATERIAL 279.167 15 DAYS 209.375 69.791
WIP 558.333 1 MONTH 418.750 139.584
FINISHED 937.500 15 DAYS 703.125 234.375
GOODS

TOTAL 3650.00 2737.500 912.500


0
CURRENT LIABILITY
SUNDRY 558.333 1 MONTH 418.750 139.583
CREDITORS
3091.6 2318.750 772.916
67

C)REPAYMENT OF LOAN (QUARTERLY12%


INTEREST RATE)

QUART Principle Intere


ER st
1 3570000
2 127500/344 142800
2500
3 127500/331 137700
5000
4 127500/318 132600
7500
5 127500/306 127500
000
D)SCHEDULE OF FIXED ASSETS
SCHEDULE OF FIXED (RS in
ASSETS "000")

FIRST YEAR GROSS RATE OF DEPRECIA NET


BLOCK DEP TION BLOC
K
PLANT& 2000 15% 300 1700
MACHINARY
LAND 2500 - - 2500
BUILDING 1200 10% 120 1080
ELECRTICITY 500 10% 50 450
FURNITURE 700 10% 70 630
PATENTS & 500 25% 120 380
TRADEMARK
OTHER FIXED 200 10% 20 180
ASSESTS
TOTAL 7600 685 6915

E)PROFIT AND LOSS STATEMENT


Profit and Loss First year (V:F)
Particular
Sales Revenue 22500000

Total 22500000
Less: Expenses
Excise duty 3150
100%exemption -3150 000
Cost of Raw Material 6700000
Establishment Expenses 675000
Manufacturing 1125000
Expenses(80:40)
Administrative costs (F) 2052000
Wages 1020000
Insurance(F) 800000
Other administrative cost(F) 2
00000
Audit fee(F) 400000
Packaging 225000
R&D(F) 300000
Selling & Distribution 1125000
costs(60:40)
Preliminary expenses Written 80000
off(F)
Depreciation 685000
Financing Cost(F) 540600
Total Cost 15927600

PBT 6572400
Less: Provision for Tax (34%) 2234616
PAT 4337748
F)BALANCE SHEET
BALANCE SHEET
Liability

Owner's Fund 5202917


Retained Profit 4337784
Long Term loan 3060000
Working capital Loan 2337500
Other current
Liability
Creditor 558333
Provision for Tax 2234616
Total 17738150

Assets

Net Fixed assets 6915000


working capital 3650000
cash 68
53150
Preliminary Exp 320000
Total 17738150
G)FUND FLOW STATEMENT

FUND FLOW STATEMENT


Sources of fund

owner's fund 5209917


working capital
loan 2337500

long term loan 3570000


creditors 558333
fund from 7337400
operation

Total 19013150

Application of
fund
fixed assets 7600000
preliminary ex. 400000
working capital 3650000
Cash 6853150
Repayment of 510000
loan

Total 19013150

H)FUND FROM OPERATION


Profit After tax 4337784
+Depreciation 685000
Provision For Tax 2234616
Pre. Expenses (written 80000
off)
TOTAL 7337400
I)BREAK EVEN ANALYSIS
Break even Point=FIXED COST/CONTRIBUTION PER
UNIT
=5642600/1500 - 450
=5373391
FIXED COSTS

1 Manufacturing cost 225000


2 Establishment cost 675000
3 Administrative cost 205200
4 Other administrative costs 200000
5 Selling and distribution 450000
6 Auditor fee 400000
7 R&D 300000
8 Insurance 800000
9 Financial cost 540600
Total 5642600