You are on page 1of 21

Pre-Feasibility Study

(Veterinary Clinic)

Small and Medium Enterprises Development Authority Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7

helpdesk@smeda.org.pk
REGIONAL OFFICE Punjab 3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 111-111-456 Fax: (091) 5286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 2831623, 2831702 Fax: (081) 2831922 helpdesk-qta@smeda.org.pk

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013

Pre-Feasibility Study

Veterinary Clinic

Table of Contents
1. DISCLAIMER........................................................................................................................................... 2 2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3 3. INTRODUCTION TO SMEDA .............................................................................................................. 3 4. INTRODUCTION TO SCHEME............................................................................................................ 3 5. EXECUTIVE SUMMARY....................................................................................................................... 4 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ......................................................................... 4 7. CRITICAL FACTORS ............................................................................................................................ 5 8. INSTALLED & OPERATIONAL CAPACITIES ................................................................................. 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ...................................................................... 5 10. PROJECT COST SUMMARY ......................................................................................................... 5 10.1. PROJECT ECONOMICS ............................................................................................................................ 6 10.2. PROJECT FINANCING ............................................................................................................................. 6 10.3. PROJECT COST ....................................................................................................................................... 7 10.4. SPACE REQUIREMENT............................................................................................................................ 7 10.5. MACHINERY AND EQUIPMENT ............................................................................................................... 8 10.6. OFFICE EQUIPMENT ............................................................................................................................... 9 10.7. RAW MATERIAL REQUIREMENTS .......................................................................................................... 9 10.8. HUMAN RESOURCE REQUIREMENT ....................................................................................................... 9 10.9. REVENUE GENERATION ....................................................................................................................... 10 10.10. OTHER COSTS...................................................................................................................................... 10 11. 12. 12.1. 12.2. 12.3. 12.4. 12.5. 13. CONTACTS OF SUPPLIERS AND EXPERTS ............................................................................ 11 ANNEXURE ..................................................................................................................................... 13 INCOME STATEMENT ........................................................................................................................... 13 STATEMENT OF CASH FLOW ................................................................................................................ 14 BALANCE SHEET ................................................................................................................................. 15 USEFUL PROJECT MANAGEMENT TIPS................................................................................................. 16 USEFUL LINKS ..................................................................................................................................... 17 KEY ASSUMPTIONS ...................................................................................................................... 20

1. DISCLAIMER This information memorandum is to introduce the subject matter and provide a general idea and information on the subject. Although, the material included in this document is based on data / information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been exercised to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision, including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

2. PURPOSE OF THE DOCUMENT The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document/study covers various aspects of project concept development, start-up, operations, marketing, finance and business management. The purpose of this document is to facilitate potential investors in veterinary clinic by providing them with a general understanding of the business with the intention of supporting potential investors in crucial investment decisions. The need to come up with pre-feasibility reports for undocumented or minimally documented sectors attains greater imminence as the research that precedes such reports reveal certain thumb rules; best practices developed by existing enterprises by trial and error, and certain industrial norms that become a guiding source regarding various aspects of business set-up and its successful management. Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any investment decision. 3. INTRODUCTION TO SMEDA The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs). With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify policy, access to finance, business development services, strategic initiatives, institutional collaboration and networking initiatives. Preparation and dissemination of prefeasibility studies in key areas of investment has been a hallmark of SME facilitation by SMEDA. Concurrent to the prefeasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services. 4. INTRODUCTION TO SCHEME Prime Ministers Youth Business Loan scheme, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially by the National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years including grace period of 01 year and a debt: equity of 90: 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA). SMEDA has been tasked with an advisory role in the implementation of PMs scheme by providing pre-feasibilities for referencing by SME beneficiaries and participating banks to optimally utilize their financial resources. 5. EXECUTIVE SUMMARY This particular Pre-feasibility is for setting up Veterinary Clinic. Veterinary medicine is the branch of science that deals with the prevention, diagnosis and treatment of disease, disorder and injury in animals. Infectious diseases in animals pose a major threat to animal health and productivity, thereby leading to overall economic loss. The most common diseases are Foot and Mouth Disease (FMD), diarrhea, fever, respiratory inspections like pneumonia etc. However, these diseases can be cured through an early diagnosis and proper treatment. As compared to animal population, the ratio of veterinary clinics is far less in Pakistan. This creates an opportunity for setting up a Veterinary Clinic. The project will provide medical facilities such as health check, vaccination, and major & minor surgeries to livestock. The clinic shall have its own laboratory and pharmacy run by a licensed veterinary compounder. The total project cost for Veterinary Clinic is estimated at Rs. 1.77 million, out of which capital cost is Rs. 1.41 million and working capital Rs. 0.35 million. The project is proposed to be financed through 90% debt and 10% equity. The project NPV is calculated to be around Rs. 2.27 million, with an IRR of 30% and Payback period of 3.35 years. It is assumed that the clinic shall handle 4,500 cases per year. The total staff requirement for the project will be 07 persons. The proposed location for project depends upon sizeable population of livestock such as, Sahiwal, Pakpattan, Okara, D.I. Khan, Lasbela, Sukkur etc. 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT This particular project is for establishing veterinary clinics as a large number of animals die due to infectious ailments annually, causing economic losses to the farmers. However, it is pertinent to mention that most of these diseases are curable through appropriate diagnosis and timely treatment. The clinic can be established in rented premises having a covered area of around 3,000 sq. ft. It will provide veterinary health care services such as health check, vaccination, treatment and minor and major surgeries for livestock. The services will be

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

extended not only to the farmers bringing in their animals to the clinic, but field visits will also be carried out to provide on-site diagnosis and medication. Since, an early diagnosis usually leads to accurate and successful treatment of the diseased animal, clinics diagnostic laboratory will be established to render necessary tests. The project shall have a fully equipped surgical suite and welltrained staff to perform surgeries. A fully equipped pharmacy will also be operated by a licensed veterinary compounder. The project will employ 7 individuals including the owner manager for providing standardized animal healthcare and support services. 7. CRITICAL FACTORS Background knowledge, experience and technical qualification of the entrepreneur. Appropriate project location with catchment area having sizeable livestock population. Hiring of qualified staff to meet client requirements. Retention of staff through incentives to ensure smooth and regular services. Coverage of maximum area of operation and capturing the market through field visits and quality of service. Competition with non-qualified vets through competitive fee structure and standardized services.

8. INSTALLED & OPERATIONAL CAPACITIES There are no installed capacities since the proposed business is a service based venture. Based on 300 operational days per year, the clinic would have the capacity to manage 4,500 cases per year. The project will handle around 3,600 cases by operating at 80% of capacity utilization in first year. 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT The proposed location should be near an area where population of animals is significant. Thus location for the veterinary clinic is suggested to be at Sahiwal, Pak Pattan, Okara, Sargodha, Sheikhupura, Faislabad, Jhang, Sialkot, Peshawar, D. I. Khan, Sukkur, Lasbela, Qilla Saifullah and other similar cities/areas. 10. PROJECT COST SUMMARY A detailed financial model has been developed to analyze the commercial viability of Veterinary Clinic project under the Prime Ministers Youth Business Loan scheme. Various cost and revenue related assumptions along with results of the analysis are outlined in this section.

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as annexure. 10.1. Project Economics

All the figures in this financial model have been calculated for rendering services to the livestock farmers. The following table shows internal rate of return and payback period. Table 1: Project Economics Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV) Details 30% 3.35 Rs. 2,270,659

Returns on the scheme and its profitability are highly dependent on the availability and efficiency of qualified veterinary doctors and trained staff, provision of accurate and quality service on time and ability to handle emergency cases by accurate diagnosis and successful treatment. In case veterinary clinic project is not very efficient, it will not be able to cover the potential market. Hence, cost of operating the business will increase. 10.2. Project Financing

Following table provides details of the equity required and variables related to bank loan; Table 2: Project Financing Description Details Total Equity (10%) Rs. 176,846 Bank Loan (90 %) Rs. 1,591,614 Markup to the Borrower (percent/annum) 8% Tenure of the Loan (Years) 8 Grace Period (Years) 1

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

10.3.

Project Cost

Following requirements have been identified for operations of the proposed business. Table 3: Capital Investment Capital Investment Machinery & equipment Furniture & fixtures Office vehicles Office equipment Pre-operating costs Training costs Total Capital Cost Raw material inventory Upfront building rent Cash Total Working Capital Total Project Cost 10.4. Space Requirement Amount (Rs.) 695,000 258,500 120,000 73,600 217,241 50,000 1,414,341 64,119 90,000 200,000 354,119 1,768,460

The area has been calculated on the basis of space requirement for management office, pharmacy, animal shed, operation theatre, laboratory, veterinary doctors office, assistants room, kitchen, washrooms, waiting area and some open area. Following table shows calculations for project space requirement. Table 4: Space Requirement Requirement Animal Sheds/ Animal Holding Area Operation Theater Management Office Pharmacy Vet. Doctors Office Veterinary Assistants' Room Laboratory Kitchen Wash Rooms Waiting Room/Reception Open Area Total Space Required Space (Sq. ft) 500 500 400 120 240 100 350 80 108 100 500 2,998

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

The veterinary clinic is assumed to be established at rented property. The monthly rent is estimated to be Rs. 30,000 per month. 10.5. Machinery and Equipment Following table provides list of machinery and equipment required for veterinary clinic. Table 5: Machinery & Equipment Description Surgical Kit Dystocia Kit Refrigerator Lab Equipment - Micro Scope (Binocular) - Blood Analyzer - Centrifugal Machine - Autoclave Machine Other Lab equipment Total No. 1 2 1 1 1 1 1 Unit cost (Rs.) 15,000 10,000 30,000 60,000 450,000 50,000 20,000 50,000 Total (Rs.) 15,000 20,000 30,000 60,000 450,000 50,000 20,000 50,000 695,000

Following office furniture and equipments are required for proposed veterinary clinic. Table 6: Furniture & Fixture Description Doctors' Room Table Doctors' Room Chair Visitors' Chairs Veterinary Assistants' Room Table Veterinary Assistants' Room Chair Visitors' Chairs Pharmacy Table Pharmacy Chair Laboratory Table Laboratory Chairs Operation Theatre - Steel Table Computer Table Computer Chair Reception Table Bench for visitors Pharmacy Cabins Air Conditioners No. 1 1 3 1 1 2 1 1 1 2 2 1 1 1 4 Unit Cost (Rs.) 15,000 3,500 2,500 10,000 2,000 2,500 10,000 2,000 10,000 2,000 20,000 10,000 2,000 7,500 5,000 55,000 Total (Rs.) 15,000 3,500 7,500 10,000 2,000 5,000 10,000 2,000 10,000 4,000 40,000 10,000 2,000 7,500 20,000 30,000 55,000

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

Electric Installations Total 10.6. Office Equipment

25,000 258,500

These costs are based on the assumption that a setup will be required to carry on the activities at veterinary clinic. Following office equipment is required. Table 7: Office Equipment Description Computer Printer Fax Machine Telephone Sets Total No. 1 1 1 3 Unit Cost (Rs.) 45,000 15,000 10,000 1,200 Total (Rs.) 45,000 15,000 10,000 3,600 73,600

Office Vehicles required for the project are as follows: Table 8: Office Vehicle Motor Cycles Total Number 2 Cost / Unit 60,000 Amount (Rs.) 120,000 120,000

The proposed project will be using two motor cycles costing Rs. 60,000/- each to cover outdoor cases. 10.7. Raw Material Requirements It is assumed that 25% of the revenues would be spent on the purchase of stock of veterinary medicines. Sales margin on medicines is 15%. 10.8. Human Resource Requirement Table 9: Human Resource Rquirement No. of Employees Admin. & Accounts Officer 1 Veterinary Doctor 1 Veterinary Assistant 1 AI Technicians 1 Receptionist / Operator 1 Security Guard, Gate Keeper 1 Office Boy cum sweeper 1 Total 7 Description Monthly Salary (Rs.) 15,000 30,000 10,000 10,000 10,000 10,000 10,000 Annual Salary (Rs.) 180,000 360,000 120,000 120,000 120,000 120,000 120,000 1,140,000

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

The table above provides details of human resource required for the project. Salaries of all employees are estimated to increase at 10% annually. 10.9. Revenue Generation Table 10: Revenue Generation Particulars Expected No. of Patients/ Year Fee (Rs.) 300 5,000 300 500 200 5,000 200 300 100 200 100 Revenue in Year 1 33,000 275,000 210,000 200,000 20,000 1,500,000 32,000 33,000 100,000 35,000 50,000 2,488,000 280,000 309,693 3,077,693 The table below shows revenue generation from the proposed business:

Large Ruminants (cattle, buffaloes, camels, horses etc.) Soft Tissue Surgery Minor 110 Soft Tissue Surgery Major 55 Out Door Animals 700 Artificial Insemination 400 Castration 100 Parturition Cases 300 Small Ruminants (goats and sheep etc.) Soft Tissue Surgery Minor 160 Soft Tissue Surgery Major 110 Out Door Fee per Animal 1,000 Indoor patients - Admission 175 Castration 500 Sub Total 3,610 Income from Farm visits Sale of Medicine Total Revenue 10.10. Other Costs

An essential cost to be borne by the clinic is the fuel cost incurred by staff during their outdoor visits to deliver the services. It is estimated that each motorcycle would be used for travelling of 100 km per day for 280 working days annually. In year one, therefore, fuel cost amounts to Rs. 94,769 for two motor cycles. Similarly, electricity expense is estimated to be about 12,000 per month. Communication during field visits is very necessary to keep the staff informed about the cases. Communication charges are estimated to be Rs. 3,000 per month. The other office expenses related to stationery, entertainment and janitorial services are expected to be Rs. 36,000 per annum. It is estimated that marketing would be done to promote the services of veterinary clinic through local media resources such as newspapers and cable networks. These promotional expenses are expected to be Rs. 40,000 per annum.

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

10

11. CONTACTS OF SUPPLIERS AND EXPERTS Pakistan Veterinary Medical Council (PVMC) Government of Pakistan House# 850, St.No. 26, G-9/1, Islamabad Ph: +92-51-9262108 A&K Pharmaceuticals 94-A,Punjab Small Industrial Estate, Sargodha Road, Faisalabad Ph: 041-8869076 Web. www.aandkpharma.com Attabak Pharmaceuticals Plot 5-C, Sector I-10/3, Service Road, Industrial Area, Islamabad Ph: 051-4434125 Web. www.attabak.com Pfizer Laboratories Ltd. 12-Dockyard Road, West Wharf, Karachi Ph: 021-2310051, 2310053 Web. www.pfizer.com.pk Prix Pharmaceutical 26-Abbot Road, Lahore Ph: 042-36312582, 36316499 Web. www.prixpharma.com Saadat International 117 - Habitat Apartment, Shadman II, Jail Road, Lahore Ph: 042-37550143-5, 37522528 - 30 Web. www.saadatinternational.com UM Enterprises 786 - Sharjah Centre, 3rd Floor, 62 Shadman Market, Lahore Ph: 042-37566937-8 Delta Chemical & Machinery Corporation 28/2 Taj Arcade, 73-Jail Road, Lahore Tel. 042-7568704 Web. www.deltachemcorp.com

ICI Pakistan Ltd. 63 Mozang Road, Lahore Ph: 042-36302685, Web. www.akzonobel.com/pk Agriprom Pakistan (Pvt) Ltd 80-A Judicial Colony, Thokar Niaz Baig, Lahore Ph: 042-35310854, 35063332 Web www.agriprom.pk Ghazi Brothers Ghazi House, D-35, K.D.A Scheme No. 1, Miran Muhammad Shah Road, Karachi, Ph: 021-111250365 212- Defence Road, Lahore Ph: 042-35341260-61 Naseem Traders International 12, Satellite Plaza, 6th Road, Rawalpindi, Ph: 051-4421339 Web. www.naseemtraders.com Orient Animal Health Suiete No. M-16, Falak Niaz Tower, Opp. Jinnah Airport, Shahrah-e-Faisal, Karachi, Ph: 021-34494555 Web. www.oah.com.pk Selmore Pharmaceuticals (Pvt.) Ltd. 36 Km, Multan Road, Lahore Ph: 042-35380381 Web. www.selmorepharma.com Star Laboratories (Pvt) Ltd. 23, K.M. Multan Road, Lahore Ph: 042-7511331 Web. www.starlabs.com.pk Symans Pharmaceuticals (Pvt.) Ltd. 1st Floor Symans Tower 25-Lower Mall, Lahore Tel: 042-37248226 Web. www.symans.org

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

11

Selmore Pharmaceuticals (Pvt.) Ltd. 36 Km, Multan Road, Lahore Ph: 042-35380381 Web. www.selmorepharma.com

Bio- Labs Plot # 145, Kahuta Industrial Triangle. Kahuta Road. Islamabad Ph: 051 4491742 & 3 Web. www.bio-labs.net

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

12

Pre-Feasibility Study

Veterinary Clinic

12.

ANNEXURE Income Statement


Year 1 3,077,693 769,423 600,000 94,769 12,000 144,000 1,620,192 1,457,500 540,000 360,000 27,000 36,000 36,000 40,000 15,388 131,638 43,448 10,000 1,239,475 218,026 218,026 132,103 132,103 85,922 85,922 Year 2 3,589,132 897,283 660,000 104,246 12,600 158,400 1,832,529 1,756,603 594,000 396,000 29,700 37,800 37,800 41,200 17,946 131,638 43,448 10,000 1,339,532 417,071 417,071 120,942 120,942 296,130 296,130 Year 3 4,117,503 1,029,376 726,000 114,671 13,230 174,240 2,057,516 2,059,986 653,400 435,600 32,670 39,690 39,690 42,436 20,588 131,638 43,448 10,000 1,449,160 610,827 610,827 106,272 106,272 504,555 10,455 494,099 Year 4 4,405,728 1,101,432 798,600 126,138 13,892 191,664 2,231,725 2,174,003 718,740 479,160 35,937 41,675 41,675 43,709 22,029 108,086 43,448 10,000 1,544,458 629,545 629,545 90,385 90,385 539,160 13,916 525,244 Year 5 4,714,129 1,178,532 878,460 138,752 14,586 210,830 2,421,160 2,292,969 790,614 527,076 39,531 43,758 43,758 45,020 23,571 107,350 43,448 10,000 1,674,126 618,842 618,842 73,179 73,179 545,663 14,566 531,097 Year 6 5,044,118 1,261,029 966,306 152,627 15,315 231,913 2,627,191 2,416,927 869,675 579,784 43,484 45,946 45,946 46,371 25,221 107,350 1,763,777 653,150 653,150 54,545 54,545 598,606 19,861 578,745 Year 7 5,397,206 1,349,302 1,062,937 167,889 16,081 255,105 2,851,314 2,545,893 956,643 637,762 47,832 48,243 48,243 47,762 26,986 107,350 1,920,822 625,071 625,071 34,364 34,364 590,707 19,071 571,636 Year 8 5,775,011 1,443,753 1,169,230 184,678 16,885 280,615 3,095,162 2,679,849 1,052,307 701,538 52,615 50,656 50,656 49,195 28,875 107,350 2,093,192 586,657 586,657 12,508 12,508 574,149 17,415 556,734 Year 9 6,179,261 1,544,815 1,286,153 203,146 17,729 308,677 3,360,521 2,818,740 1,157,538 771,692 57,877 53,188 53,188 50,671 30,896 107,350 2,282,401 536,339 536,339 536,339 13,634 522,706 Year 10 6,611,810 1,652,952 1,414,769 223,461 18,616 339,544 3,649,342 2,962,467 1,273,292 848,861 63,665 55,848 55,848 52,191 33,059 107,350 2,490,113 472,354 472,354 472,354 7,235 465,119

12.1.
Income Statement

Revenue Cost of sales Purchase of medicines for use and sale Direct labor Office vehicles running expense Vehicle maintenance Operating costs 3 (direct electricity) Total cost of sales Gross Profit General administration & selling expenses Administrative Salaries expense Building rental expense Travelling expense Communications expense (phone, fax, mail, internet, etc.) Office expenses (stationary, entertainment, janitorial services, etc Promotional expense Professional fees (legal, audit, consultants, etc.) Depreciation expense Amortization of pre-operating costs Amortization of legal, licensing, and training costs Subtotal Operating Income Earnings Before Interest & Taxes Interest expense on long term debt (Project Loan) Subtotal Earnings Before Tax Tax NET PROFIT/(LOSS) AFTER TAX

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

13

Pre-Feasibility Study

Veterinary Clinic

12.2.

Statement of Cash Flow


Year 0 Year 1 85,922 131,638 43,448 10,000 (252,961) (14,394) (9,000) 70,680 65,334 65,334 Year 2 296,130 131,638 43,448 10,000 (21,018) (16,062) (9,900) 11,878 446,115 (176,745) (176,745) 269,369 Year 3 494,099 131,638 43,448 10,000 10,455 (42,732) (11,680) (10,890) 11,869 636,208 (191,415) (191,415) 444,793 Year 4 525,244 108,086 43,448 10,000 13,916 (33,559) (13,122) (11,979) 7,055 649,090 (207,302) (207,302) 441,787 Year 5 531,097 107,350 43,448 10,000 14,566 (24,519) (14,743) (13,177) 7,606 661,629 (224,508) (224,508) 437,121 Year 6 578,745 107,350 19,861 (26,235) (16,564) (14,495) 8,202 656,864 (243,142) (243,142) 413,722 Year 7 571,636 107,350 19,071 (28,072) (18,609) (15,944) 8,848 644,279 (263,323) (263,323) 380,956 Year 8 556,734 107,350 17,415 (30,037) (20,908) (17,538) 9,548 622,563 (285,179) (285,179) 337,385 Year 9 522,706 107,350 13,634 (32,139) (23,490) (19,292) 10,307 579,075 579,075 Year 10 465,119 107,350 7,235 (34,389) 213,689 212,215 (8,603) 962,617 962,617

Cash Flow Statement

Operating activities Net profit Add: depreciation expense amortization of pre-operating costs amortization of training costs Deferred income tax Accounts receivable Raw material inventory Pre-paid building rent Accounts payable Cash provided by operations Financing activities Project Loan - principal repayment Additions to Project Loan Issuance of shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Cash (used for) / provided by investing activities NET CASH

(64,119) (90,000) (154,119)

1,591,614 176,846 1,768,460 (1,414,341) (1,414,341) 200,000

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

14

12.3.
Balance Sheet

Balance Sheet
Year 0 Assets Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Current assets Cash & Bank Accounts receivable Equipment spare part inventory Raw material inventory Pre-paid annual land lease Pre-paid building rent Total Current Assets Fixed assets Machinery & equipment Furniture & fixtures Office vehicles Office equipment Total Fixed Assets Intangible assets Pre-operation costs Legal, licensing, & training costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Deferred tax Long term debt (Project Loan) Long term debt (Working Capital Loan) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES

200,000 64,119 90,000 354,119 695,000 258,500 120,000 73,600 1,147,100 217,241 50,000 267,241 1,768,460

265,334 252,961 78,512 99,000 695,807 625,500 232,650 108,000 49,312 1,015,462 173,793 40,000 213,793 1,925,062

534,703 273,979 94,574 108,900 1,012,156 556,000 206,800 96,000 25,024 883,824 130,345 30,000 160,345 2,056,325

979,496 316,711 106,254 119,790 1,522,251 486,500 180,950 84,000 736 752,186 86,897 20,000 106,897 2,381,333

1,421,283 350,270 119,376 131,769 2,022,698 417,000 155,100 72,000 644,100 43,448 10,000 53,448 2,720,247

1,858,404 374,789 134,119 144,946 2,512,258 347,500 129,250 60,000 536,750 3,049,008

2,272,126 401,024 150,683 159,440 2,983,273 278,000 103,400 48,000 429,400 3,412,673

2,653,082 429,096 169,292 175,385 3,426,854 208,500 77,550 36,000 322,050 3,748,904

2,990,467 459,132 190,200 192,923 3,832,722 139,000 51,700 24,000 214,700 4,047,422

3,569,542 491,271 213,689 212,215 4,486,718 69,500 25,850 12,000 107,350 4,594,068

4,532,159 525,660 5,057,820 5,057,820

70,680 70,680 1,591,614 1,591,614 176,846 85,922 262,768 1,925,062

82,558 82,558 1,414,869 1,414,869 176,846 382,052 558,898 2,056,325

94,427 94,427 10,455 1,223,454 1,233,909 176,846 876,151 1,052,997 2,381,333

101,482 101,482 24,371 1,016,152 1,040,523 176,846 1,401,395 1,578,241 2,720,247

109,088 109,088 38,938 791,644 830,581 176,846 1,932,492 2,109,338 3,049,008

117,290 117,290 58,798 548,501 607,300 176,846 2,511,237 2,688,083 3,412,673

126,138 126,138 77,869 285,179 363,048 176,846 3,082,873 3,259,719 3,748,904

135,685 135,685 95,284 95,284 176,846 3,639,607 3,816,453 4,047,422

145,992 145,992 108,918 108,918 176,846 4,162,313 4,339,159 4,594,068

137,389 137,389 116,153 116,153 176,846 4,627,431 4,804,277 5,057,820

1,591,614 1,591,614 176,846 176,846 1,768,460

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

15

Pre-Feasibility Study

Veterinary Clinic

12.4. Technology

Useful Project Management Tips

Required spare parts & consumables: Suppliers credit agreements and availability as per schedule of maintenance should be ensured before start of operations Energy Requirement: Should not be overestimated or installed in excess and alternate source of energy for critical operations be arranged in advance Machinery Suppliers: Should be asked for training and after sales services under the contract Quality Assurance Equipment & Standards: Quality standards need to be defined and a mechanism to check them should be developed for improving quality

Marketing Product Development & Packaging: Experts help may be sought for product / service and design & development Advertisement & Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product brochures should be developed from good quality service providers. Sales & Distribution Network: Experts advice and distribution agreements should be sought for developing the sales and distribution network. Price / Bulk Discounts, Cost Plus Introductory Discounts: Pricing decisions should never compromise quality of the products. Price during introductory phase may be kept lower and used as promotional tool. Product cost estimates should be carefully documented before price setting. Government controlled prices need to be displayed, as required.

Human Resources Adequacy & Competencies: Skilled and experienced staff should be considered an as assets of the business and investments should be made in developing and motivating them through various means and incentives. Performance Based Remuneration: Efforts to manage human resource cost should be focused through performance measurement and performance based compensation. Training & Skill Development: Encouraging training and skill development of self & employees through experts and exposure to best practices helps in

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

16

Pre-Feasibility Study

Veterinary Clinic

continuous improvement in the business. Least cost options for Training and Skill Development (T&SD) should be developed and linked with compensation benefits and awards. 12.5.

Useful Links

Prime Ministers Office, www.pmo.gov.pk Small and Medium Enterprises Development Authority, www.smeda.org.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Ministry of Education, Training & Standards in Higher Education, www.moptt.gov.pk Government of Punjab, www.punjab.gov.pk Government of Sindh, www.sindh.gov.pk Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk Government of Balochistan, www.balochistan.gov.pk Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk Government of Azad Jammu & Kashmir, www.ajk.gov.pk Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Security Commission of Pakistan (SECP), www.secp.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.fpcci.com.pk Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore Tel. 042-99205201, www.pbit.gop.pk Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahra-e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk State Bank of Pakistan (SBP), www.sbp.org.pk National Bank of Pakistan (NBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk

Pakistan Veterinary Medical Council (PVMC), Islamabad, www.pvmcregistration.net National Vocational and Technical Training Commission (NAVTTC) Head Quarter, Islamabad, www.navttc.org
Pakistan Agricultural Research Council (PARC), Islamabad Tel. 051-9203966, www.parc.gov.pk National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061, www.parc.gov.pk National Veterinary Laboratory, NARC, Park Road, Islamabad Tel. 051-9255108

Balochistan Agricultural Research Centre (BARC), Quetta, Tel: 0819213286-7, www.parc.gov.pk Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: 02199261661, 99261561, www.parc.gov.pk

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

17

Pre-Feasibility Study

Veterinary Clinic

Arid Zone Research Institute (AZRI), Bahawalpur, Tel: 0622-876833, www.parc.gov.pk


Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore Cantt. Tel. 042-36676821, www.plddb.pk Faculty of Animal Husbandry, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary Sciences, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture, Water & Marine Sciences, Lasbela, www.luawms.edu.pk Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture University, Tondojam, www.sau.edu.pk Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk KPK Agricultural University, Peshawar, www.aup.edu.pk Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk University College of Veterinary & Animal Sciences, Islamia University Bahawalpur (IUB), www.iub.edu.pk University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore, www.uvas.edu.pk College of Veterinary & Animal Sciences, Jhang, ww.uvas.edu.pk/other_campuses Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk Nestle Sarsabz Training Institute, Renala Khurd, Okara c/o Nestle Lahore, Tel: 0423-111-637-853 Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 0912960109, 9210309 Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 04299220140 Al - Haiwan Sires Training Institute, Jogi Chowk, Sahiwal, Tel. 040-4227196, 4221486, 061-6775708, Cell. 0321-8695054, 0300-9695054 Altaf & Co Livestock Training Institute, Altaf & Co Plaza,16/1,Out Fall Road, Lahore, Tel: 042-35763411-4, www.altafandco.com Solve Agri Dairy Institute, F-6/2, Main Link Road, Model Town, Lahore, www.solveagripak.com Dairy & Rural Development Foundation (DRDF), Lahore, www.dairyproject.org.pk Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk Directorate of Animal Health, L&DD, Punjab, Tel: 042-99201115 Directorate of Animal Disease Reporting and Surveillance, L&DD, Punjab, Tel: 042-99201116 Foot and Mouth Disease (FMD) Research Centre, L&DD, Lahore, Tel: 04299201115 Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7 Directorate of Small Holder Dairy Development, Gujranwala Tel: 055-9200410-11, 9200194

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

18

Pre-Feasibility Study

Veterinary Clinic

Buffalo Research Institute Bhunikey, District Pattoki, Tel: 049-4421887, 4420072 Directorate of Small Ruminants, Multan, L&DD, Punjab, Tel: 061-9201311 Research Centre for Conservation Sahiwal Cattle (RCCSC), Jhang, Tel: 0479200329, 9200371, www.rccsc.com.pk Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: 0442661393 Livestock Training Centre (LSTC), Sheikhupura, Tel: 056-9200056 Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk Agriculture & Livestock Department, Government of KPK, www.khyberpakhtunkhwa.gov.pk Cattle Breeding & Dairy Farm, Harichand, District Charsadda, KPK, Tel: 0916640187 Buffalo Breeding & Dairy Farm, D.I.Khan, KPK, Tel: 0966-923150 Livestock & Dairy Development, Government of Balochistan, www.balochistan.gov.pk Directorate of Animal Health and Production Extension, L&DD, Quetta, Tel 0819202564 Para Veterinary Training Institute, L&DD, Quetta, Tel: 081-9202564

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

19

Pre-Feasibility Study

Veterinary Clinic

13. KEY ASSUMPTIONS Table 11: Project Assumptions Projected Life of The Project in Years Sponsors' Equity Debt Financing Annual Mark Up Rate (Short Term & Long Term) Debt Tenure in Years Grace Period (Year) General Inflation Rate No of Working Days in One Year Table 12: Depreciation Rate Assumptions Tools & Equipment Fittings & Installations Office Equipments Furniture & Fixtures Stock of Medicines Accounts Payable Salaries, Wages & other benefits Inflation Rate for Salaries & Wages Vehicle Repair & Maintenance Traveling & Conveyance Description Medicines Consumed and kept for Sale Qty Type Consumption of petrol (Km/liter) 65 Rate Rs. /Ltr 110 10% 10% 33% 10% of the Written Down Value of the Written Down Value of the Written Down Value of the Written Down Value 10 10% 90% 8% 8 1 10% 300

Table 13: Working Capital Assumptions 30 Days Medicines Consumption 30 Days of Total Annual Purchases Table 14: Expenditures 10% 10% of the cost. 5% of admin expanses Cost / Rate 25% Rationale % of revenue Annual Tours 280 Total cost (Rs.) 94,769

Table 15: Expense Assumptions

Table 16: Vehicle Running Expenses Traveling/ Day (km) 100

Motor cycle

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -

20

You might also like