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Final Project Entrepreneurship

____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik

Final Project Entrepreneurship

Drivers Edge
A Business Plan April 17, 2006

Drivers Edge Plot no 3, Near line no 7 Peshawar Road, Rawalpindi. 03215115083 By Kashif Mushtaq Malik BBA VII 2044
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Final Project Entrepreneurship

____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik

Final Project Entrepreneurship

Copyright Kashif Mushtaq Malik Publications, 2006. All Rights Reserved. No Part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval system without written permission from the author except for inclusion of quotations in a review.

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LETTER OF TRANSMITTAL Mr. Nouman Shafi Iqra University, Islamabad Campus. Respected Sir; Today I am grateful to submit my report to you. The report covers the main aspects of entrepreneurship, which includes management, marketing, research, finance etc. I have tried my level best to come up to your mark by providing unique ideas, style and by providing elegant presentation. I am thankful to you, as you have given me an open opportunity to survey the market, meeting different kinds of people, visiting various organizations. It was wonderful experience to explore the market. Sincerely yours, Kashif Mushtaq Malik

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ACKNOWLEDGEMENT KNOWLEDGE IS A DOOR TO PROSPERITY Some time expressions are more reliable than words. Today I am short of words to express my deepest and numerous feelings to Allah Almighty (The most beneficial and merciful) who gave us the mind, ability and courage to perform in a creative way. For my bellowed parents, sincere, appreciation and prayers shall always be there, for showing their love, kindness, and support. As the last but not the least I am also thankful to my friends, classmates and teachers for their complete moral support, motivation and encouragement for the completion of this project. Kashif Mushtaq Malik

____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik

Final Project Entrepreneurship Table of Context Executive Summery....8 Anticipated Start Date......8 Brief Outline of Business Concept...8 Brief Description of Business Operation......8 Management Team Background and Experience.....9 Market...9 Financial....9 Business Plan..10 Business concept..10 Products and Services Plan..10 Mission and Vision..11 DE Philosophy.11 Keys to Success........11 Company Summary....12 Company overview.....12 The Concept....13 Marketing Plan..14 Market Needs.....14 Sales Strategy.....14 Competition and Buying Patterns and Inventor.14 Target Marketing16 Promotional Tactics16 Marketing Strategy.17 Marketing Mix17 Product & Services....17 Price ...17 Promotion...18 Peoples...18 Process...18 Physical evidence...18 ____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik 7

Final Project Entrepreneurship Place & Timing .19 Swot Analysis20 Strength...20 Weakness20 Opportunities..21 Tread..21 Management plan.22 The Management Team.22 Inventory controlling.23 Deciding who decides23 Description Of Operations Plans 23 Hierarchy of Organization...24 Financial Plan.25 Income Statement...25 Balance Sheet.26 Cash Flow...27 Cost of the project..28 Loan from Bank29 NPV, IRR, Payback29 Break even analysis30 Ratios30 Layout .31 Conclusion ..32

____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik

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Executive Summary: Business Name: Drivers Edge Address: Plot no 3, main Peshawar Road, near line 7, Rawalpindi Contact Person: Kashif Malik Business structure: Sole proprietorship Anticipated Start Date: Drivers Edge will undertake its starting in the region as soon as the financial resource will be complete Brief Outline of Business Concept: Drivers Edge is responding to the need for quality services in the community. DE will provide services on a part time or full time basis for royal customers. DE is a sole proprietorship and will be owned by Kashif Malik, with all business operations taking place at (old) Target Motors. DE will enhance the new way of the drive to peoples mind by making them more known towards their cars. Brief Description of Business Operation: All the operations will be taking place in the workshop from the controlling of the Inventory and other raw material. Day to day check in balance will be taking place.

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Management Team Background and Experience: Kashif Malik will be the owner, Administration manager as well as financial manager of the business. He will be responsible for recruiting clients, supervising staff, all aspects of administration, policy enforcement, program planning. Market: Drivers Edge will be the only Workshop that provides every thing under one roof, De will have strong relationship with all customers and DE will focus on Customer Orientation. DE employees focus on delivering what they promise. Drivers Edge aims to offer high-quality auto upgrade and repair services and a full range of auto parts that no one in the region provides. Honest reputation will be a major factor in repeat business and building a large base of regular, loyal customers. Financial: Drivers Edge has the potential room of the growth of 10% every year. DE will cover its breakeven all cost with in one year and four months.

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Business Plan

Business concept Type of business: Auto upgrading and repair services. Name of the business: Drivers Edge. Business Structure: Sole Proprietorship. Owners Name: Kashif Mushtaq Malik. Location: Plot no 5, near line 7, Main Peshawar Rood, Rawalpindi

Products and Services Plan: DE has the core competencies amongst its medium team to work on all makes and models of domestic and foreign vehicles. All employees focused on superior customer service, quick turnaround is always the standard at DE. DE strives to be accurate and honest with customers in terms of quoting cost estimates and repair completion time estimates. DE employees focus on delivering what they promise. This focus on building strong customer relationships based on trust and integrity will be the catalyst in establishing a strong regular customer base. DE utilizes the highest degree of technology in managing a full range of auto parts inventory. DE is the leading Manufacturer of high quality car body kits as well as the Door Conversions, Exterior Accessories, Fenders, Hoods, Lights and Spoilers. We use higher-grade materials to make all of our products to ensure the best possible fiberglass bumpers, fenders and wings. We dont cut corners when it comes to quality.

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Mission and Vision: Drivers Edge aims to offer high-quality auto upgrade and repair services and a full range of auto parts. DE focuses on personalized service to its customers by offering convenience and rapid service. Additionally, DE is technologically confidence with computerized monitoring of all parts inventory, to ensure that parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. Finally, DE has strong vendor relationships with the most service conscious vendors who are capable of rapidly major parts.

DE Philosophy. To Stay on Top in Our Businesses Line

Keys to Success Drivers Edge keys to success will include: 1. 2. 3. 4. 5. 6. Method and convenient auto upgrade and repair services. A wide range of auto parts inventory that is (nearly) never out of stock. Rapid order and delivery of major auto parts items. On time delivery of the car. Relationships with the customer on database. Fully computerized system of check and up grading of the car.

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Company Summary Drivers Edge is a new start-up built-in business. Two Managers represent sales/management, and one focuses on the finance/administration section of the business. The economic growth of the last several years has resulted in increased disposable income. Many people have chosen to spend part of their increased income on their automobiles. As a result, the need for reliable and convenient auto services has substantially risen as well. DE will position itself to capitalize on the growing need of the middle and upper class market for quality auto service in the Islamabad & Rawalpindi area. The company will be privately owned by me, with most of the additional funding coming from a five year bank loan.

Company overview Drivers Edge (DE) is a start-up organization that offers a complete domestic and foreign auto repair and car repair service as well as a full-featured retail parts store. DE will serve the local market as well as the domestic market of the country in future.

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The Concept The auto upgrade & repair market has a lot of competition; however, almost all only offer service. DE will differentiate themselves by not only offering a stress-free upgrading and repair service, but also a fully stocked parts store. Not only will this serve a wide range of customers for both service and parts, but also the parts department will support the service department by allowing the service department to turnaround jobs far faster than the competition with generally all of the needed parts in stock and on location. DE also differentiates them by having fully equipped upgrading on their car. This offers incredible value to customers who need their cars fixed right away. Waits for service and parts are ideas not entertained by DE. Lastly, DE offers unlimited shuttle service for repair customers making the entire service experience as painless and convenient as possible. DE will attract and maintain a loyal customer base through their customeroriented focus on business. All employees are trained and held responsible for providing superior service, developing a long lasting trust bond with customers. This is very important, especially in the auto upgrading and repair industry, where trust and honesty are not the image of repair facilities.

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Final Project Entrepreneurship Marketing Plan:

Market Needs. Between having a high level of commuting traffic, and an equally high level of tourism traffic on local highways, there is a constant significant demand for auto upgrade and repair services and auto parts. Convenience is a must for most middle and upper class consumers.

Sales Strategy DE will focus its sales strategy on effectively reaching the target customer segment of upper and middle class customers.

Competition and Buying Patterns and Inventor. DE faces over all auto upgrade and repairs and auto parts competitors in the local area. Only a quarter of these competitors offer both auto repair services and auto upgrade part inventories. Among these, only a few are major national chains. The remainders are small privately owned establishments. DE will compete well by focusing on convenience and offering a high level of customer service. Additionally, its honest reputation will be a major factor in repeat business and building a large base of regular, loyal customers. Primary competitors are engaged principally in the retail sale of automotive parts, tires and accessories, automotive maintenance and service and the installation of parts. Large competitors' stores typically carry the same basic product line, with variations based on the number and type of cars registered in the different markets. A full complement of inventory at a typical super center includes an average of approximately 25,000 items. Automotive product lines usually include:

Tires and Rims. Batteries.

New and remanufactured parts for domestic and imported cars, including: ____________________________________________________________________ 15 Drivers Edge By: Kashif Mushtaq Malik

Final Project Entrepreneurship


Suspension parts. Ignition parts and Seats cover. Exhaust systems. Engines and engine parts. Oil and air filters, belts, hoses, and air-conditioning parts. Lighting. Brake parts. Chemicals, including oil, antifreeze, polishes, additives, cleansers.. Paints and they other colors. Mobile electronics, including sound systems, alarms, and remote vehicle starters.

Car accessories, including seat covers, floor mats, and exterior accessories.

A selection of sport utility vehicle accessories. Car body kits as well as the Door Conversions, Exterior Accessories, Fenders, Hoods, Lights and Spoilers.

Additionally, a number of competitors have electronic work order systems available amongst their various service centers. This type of system creates a service history for each vehicle, provides customers with a comprehensive sales document, and enables the service center to maintain a service customer database. DE has also focused on the upgrading of the cars like they can modify in terms of car stereo, coloring of car, fiber bumper and many other things and that not only covers the one brand but other brands also domestic and foreign like Toyota, Honda, Hyundai, Suzuki, BMW, Nissan, Chevrolet, and others.

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Target Marketing: Target Market Segment Strategy DE will focus on its target market, the middle and upper class market, and establish a reputable image from that target market's perspective, by offering convenience, practical auto Upgrade and Repair Services and customer service excellence.

Drivers Edge will focus on the every one who had the car. Young blood

the people mature 18 to 30, who like to modify their cars and look hot on the road not the interior but also the exterior of the car.

Senior citizen

the peoples age of 30 and above, which wants that their car should be trouble free and from one place they can get every thing, they dont have to move from one place to another place for the search of the parts of their car. Because Drivers Edge provides every thing under one roof. Promotional Tactics: Before explaining the promotional style we are describing the tactics, which are being used by the center: In developing our marketing plan, we are aiming to position our self exactly and fix to that position over the long pull. Because we believe if we are going to change the strategy every year we will be on a very unstable ground. However, it simply does not mean that we will remain out of date but will bring acceptance changes. Maintain a consistent budget plan. During different financial crisis we would avoid the temptation to make the advertising budget the first to go. ____________________________________________________________________ Drivers Edge By: Kashif Mushtaq Malik 17

Final Project Entrepreneurship DE has decided to advertise through newspapers, cable and pamphlets. The reason for selecting cable is that now majority of the population watches cable very keenly. A strip going to move on the movie channel for 5-6 times daily. Drivers Edge will fallow the pull strategy; promotion is directed to the end customers, this will aim to the motivation of the customer and have brand loyalty

Marketing Strategy: Drivers Edge will adopt an aggressive marketing campaign that includes the following targeted marketing methods: Brochures. Cable networks. Newspapers. Pamphlets.

Marketing Mix: Product & Services. DE will offer the wide range of the products to its valuable customers in respect of upgrading or in repair the car. Basic products will be customization of the cars and all set of inventor of local and imported cars at the one roof in the allocated time. Price. The price of the most of the upgrading will be very from the wish of the customer but other parts of the inventory will be charge on the whole sale price and their will be service charges for every work 15% which will be total cost of the product and service that the customer gain the service

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Final Project Entrepreneurship

Promotion. Drivers Edge will promote it self in the web and in the start of the

business it will go for the paper add for one week in the local market of Rawalpindi and Islamabad. Peoples. Drivers Edge compulsory the direct, personal interaction between the customer and the employees for the service to be manufactured and delivered. These service influence customers perception of the service quality. It will help the Drivers Edge to form the loyalty of the customer my clients only know me but to them I am the organization and they trust me.

Process. Drivers Edge enable it self to deliver high-quality service. Because all the

process of the DE is interlinked with one another and the first computerized auto upgrading and repair work is it.

Physical evidence. Drivers Edge surrounding and other visible cues can have profound effect

on the impressions customers about the quality work which they receive.

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Place & Timing. Drivers Edge is placed in the heart of Rawalpindi and Islamabad. It will

provide all the facilities to the peoples of the local market. Timing is one of the major factors that play a vital role in the pleasure of the customer, DE will provide on time delivery of the cars.

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Final Project Entrepreneurship

Swot Analysis: This analysis is very important as it makes the picture clear where the Drivers Edge stands and How Drivers Edge can be move towards prosperity and profitability. It includes strengths, weaknesses, opportunities and threads. Details are as follows:

Strengths: DE has famous person, familiar, skilled managers having self-motivated exposure in the field. DE provides its customers every thing under one roof. DE doesnt compromise on the issues of the quality. DE provides its customers time delivery. DE has strong Data base for its customers. DE provides ideal location of the peoples of Islamabad and Rawalpindi.

Weaknesses: Must of the workshops have the loyal customers which are serving them for many years In auto repair and service customer goes to well alleged mechanic or painter. DE as the single owner, dont have sufficient fund to control complete inventory of all the cars in the same time.

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Opportunities: Young peoples like to drive cars in fashion and to make the cars more elegant there are less peoples in Islamabad and Rawalpindi. To make it possible DE gives every thing to make their drive a new look.

Threads: Additional indirect competitors are on the horizon, and we need to be prepared for their entry into the market. Many of our programs will be designed to build customer loyalty, and it is our hope that our quality service and up-scale ambiance wont be easily duplicated. As new in the business it will be hard to have the loyal customer at the start of the work. Some of the business of repair and upgrading are already working and they may get the roof for the improvement.

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Management Plan: The Management Team DE has a strong family management team that will allow them to execute on this exciting idea. DE has one title-holder, Kashif Malik. Malik Nisar has a background of automobile designing, 5 years at the Honda Atlas. He will be overlooking trough the designing and coloring of the cars. Malik Majad has a background of the regional manager of the bikes at the Fatah groups of industry; He will be overseeing the sales and marketing for the project. Malik Saeeds background is in management from automobile division at Suzuki, where he was a Manager overseeing a department of 100 people. Malik Iftikhar is also a person from product of the auto industry, specifically the auto repair and parts sales industry. He spent seven years at his own Auto Parts. The incredible breadth of skill sets and knowledge that the management team possesses will allow DE to accomplish their superior goals of million in sales. DE is an exciting business opportunity that addresses the unmet need of having a full service auto upgrade and repair facility that also has a complete retail parts center. DE will be led by a seasoned management team of six, all of whom have extensive industry experience. DE has forecasted that it will recover its all costs with in 1.44 years that will its break even point.

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Inventory controlling: Drivers Edge will have short relationship with all its vendors and they will supply or DE will take the inventory as per order from customer from vendors. DE will get the other material like fiber material form the local market of Gujrawala and Rawalpindi. We will get more inventors when 30% of the total will be left back, Deciding who decides: Drivers Edge will follow the traditional methods, the final responsibilities for making decisions belongs to managers.

DESCRIPTION OF OPERATIONS PLANS: DE will start operations as soon as funding is safe; however the current and future daily operations include the following: Providing the Full service for every one. DE will get the inventory from the local industry and then utilize it. DE will provide its best to every customer. DE will give new charm to your ride.

Future Operation: DE will move to Islamabad and other cities. DE gives new trend of drive to every one as they dream.

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Hierarchy of Organization: CEO

Administration Manager

Marketing and sales Manager

Finance Manager

Design Manager

Auto repair and upgrade manager

Inventory Manager

Painter

Mechanic

Technician

Denter

Help Boy Purchaser

Help Boy

Help Boy

Help Boy

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Final Project Entrepreneurship Financial Plan: DE will use the MYOB as the record keeping software

Driver's Edge Income statement For Ending Year 2006 2007 2008

Sales Revenues
Sales Less Cost of good sold Gross Profit Operating Expences Salaries $ $ $ 2,476,231.00 $ 2,723,854.10 $ 2,996,239.51 1,341,156.00 $ 1,475,271.60 $ 1,622,798.76 1,135,075.00 $ 1,248,582.50 $ 1,373,440.75

Marketing and Advertisements Entertainment Telephone Miscellaneous Total Fix Expenses


Operating Income Before Interest

$ $ $ $ $ $ $ $ $

846,000.00 17,500.00 6,000.00 15,000.00 10,000.00 894,500.00 240,575.00 294,000.00 (53,425.00) 0 -53425

$ $ $ $ $ $ $ $ $ $

913,680.00 18,025.00 6,060.00 16,500.00 10,100.00 964,365.00 284,217.50 249,522.00 34,695.50 5,204.33 29491

$ 959,364.00 $ 18,565.75 $ 6,120.60 $ 18,150.00 $ 10,201.00 $ 1,012,401.35 $ $ $ $ 361,039.40 198,818.44 162,220.96 40,555.24 121666

Financial Cost Operating Income After Interest


Income Tax Net Profit

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Driver's Edge Balance sheet

Assets Current Assets Cash & Bank Balance Accounts Recievables Advances, Deposits & Prepayments Stores, Spares, Loose Tools etc. Inventory Fixed Assets Equipment & Other Assets (Net) Total Assets Liabilities & Capital Current Liabilities Salaries Payable A/c payable Taxes Payable Lone Term Liabilities Loan Payable Capital & Reserves Capital Profit Drawings Total Liabilities & Capital

2006 $ $ $ $ $ $ 1,047,500 100,000 500,000 500,000 1,000,000 3,147,500 $ $ $ $ $ $

2007 1,047,500 150,000 500,000 520,000 1,000,000 3,217,500 $ $ $ $ $ $

2008 1,047,500 160,000 500,000 540,000 985,000 3,232,500

$ $

3,000,000 $ 6,147,500 $

3,030,000 $ 6,247,500 $

3,060,300 6,292,800

$ $ $ $ $ $ $ $ $ $

846,000 $ 540,000 $ $ 1,386,000 $ 317,695 $ 4,577,230 (53,425) (80,000) 4,443,805 $ $ $ $

913,680 $ 540,000 $ 5,204 $ 1,458,884 $ 362,173 $ 4,476,952 29,491 (80,000) 4,426,443 $ $ $ $

986,774 540,000 40,555 1,567,330 421,877 4,261,928 121,666 (80,000) 4,303,594 6,292,800

6,147,500 $

6,247,500 $

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Driver's Edge Projected cash flow statement Sales Net Profit Working Capital Salaries Paybles Taxes Payables Recievables $ $ $ $ $ 846,000 (100,000) 746,000 692,575 $ $ $ $ $ 913,680 (150,000) 763,680 793,171 $ $ $ $ $ 986,774 5,204 (160,000) 831,979 953,644 Year2006 $ $ 2,476,231 Year2007 $ 2,723,854 29,491 Year2008 $ $ 2,996,240 121,666

(53,425) $

Cash Flow from operating Activities

Purchase of fixed Assetes

(4,230,300)

Equity Investment Long Term Loan $

4,900,000 2,100,000 (317,695) $ (250,000) $ 6,432,305 $ 2,894,580 $ $ $ 2,894,580 $ (362,173) $ (250,000) $ (612,173) $ 180,998 2,894,580 3,075,578 $ $ $ (421,877) (250,000) (671,877) 281,767 3,075,578 3,357,346

Repayment of Installment $ Drawing $ Cash flow from financing $ Net Cash Flow Opening Balance Closing Balance $

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Driver's Edge Capital Cost & Financial Plan Cost of Project Investment for , Plant & Machinery Furniture, Fixture & Office Equipments Rs. 4,050,000 180,300

Grand Total Investment for Civil Works, Plant & Machinery Plant & Equipment Other Capital Cost CAR Grand Total Furniture, Fixture & Office Equipments

4,230,300

3,000,000 200,000 850,000 4,050,000

The expected required furniture and fixture for the office and plant is shown below: Description Tables Chairs Almirahs Calculators Fax Machine Water Cooler Air-Conditioner Computer System & Printer Grand Total Quantity 5 10 3 4 1 1 2 3 Rate (Rs.) 3,800 500 2,500 200 18,000 10,000 18,000 28,000 Amount (Rs.) 19,000 5,000 7,500 800 18,000 10,000 36,000 84,000 180,300

B - Project Financing The initial investment for plant, purchase of other furniture & fixtures, . The funds requirement for the investment is as follows: Description Capital Sponsors Contributions Term Financing Total Rs. 4,900,000

2,100,000 7,000,000

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Loan Discription Payments Date 6th april 2006 6th april 2007 6th april 2008 6th april 2009 6th april 2010

Beginning Balance Scheduled Payments 2,100,000 611,695 1,782,304 611,695 1,420,131 611,695 1,007,254 611,695 53,676 611,695

Ending Balance Total Payments Principal Interset 611,695 317,695 294,000 1,782,304 611,695 362,173 249,522 1,420,132 611,695 421,877 198,818 1,007,255 611,695 470,680 141,015 536,575 536,575 461,454 75,120 -

The DE will take the loan from SaudiPak Bank Pvt. as taking with the loan manager Mr. Atif
Salaries of Staff Manager Salary Manager Salary Manager Salary Manager Salary Help Boys Help Boy (painter) Help Boy (Mechanic) Help Boy (Denter) Help Boy (Technician Painter Mechanic Monthly $ $ $ $ Yearly $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ $ $ $ $ $ $ $ $ $ $ 48,000 48,000 48,000 48,000 66,000 66,000 66,000 66,000 30,000 846,000

7,500 7,500 7,500 7,500

Denter
Technician
Purchaser Total

$ $ $ $ $ $ $ $ $ $

4,000 4,000 4,000 4,000 5,500 5,500 5,500 5,500 2,500 70,500

Annaul salary will increase up to 8% @ annually

Calculation of NPV, IRR and Payback Period Years


0 1 2 3 4 5 $ $ $ $ $ $ Cash Flows PV Factor @ 15% (4,230,300) 1.000 2,894,580 0.870 3,075,578 0.756 3,357,346 0.658 3,813,086 0.572 4,522,374 0.497 $ $ $ $ $ $ $ Present Values (4,230,300) 2,517,026 2,325,579 2,207,509 2,180,145 2,248,419 7,248,378 70% 1.44

$ $ $ $ $

2,894,580 5,220,159 7,427,668 9,607,813 11,856,232

NPV
IRR

Pay Back Period

years

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Driver's Edge
Break Even Analaysis

Sales Revenues Cost of Sales Contribution Margin Contribution Margin Ratio Total Expenses Break Even Sales (Rupees)

$ $ $

2006 2,476,231.00 $ 1,341,156.00 $ 1,135,075.00 $ 46%

2007 2,723,854.10 $ 1,475,271.60 $ 1,248,582.50 $ 46% 964,365.00 $ 2,103,817.38 $

2008 2,996,239.51 1,622,798.76 1,373,440.75 46% 1,012,401.35 2,208,611.42

$ $

894,500.00 $ 1,951,402.88 $

Ratios GP Margin NP Margin sales Growth


46% -2% 46% 1% 10% 46% 4% 10%

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Lay Out Of The Building:

Glass

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Conclusion Drivers Edge expects to grow from the existing place. Its performance id positive and its prospects are clear. With the help of its enthusiastic, qualified personnel it hopes to achieve its objectives by the Grace of Allah.

However, it is emphasizing on quality that will give if the competitor edge and a positive growth in the future. Insha Allah

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