Report on

A business plan on “Green Thumb Private Ltd”

Submitted to:

Jannatun Naym

Lecturer

Department of Finance,

University of Dhaka

1

Course code: F-306

Course name: Entrepreneurship & Project Development

Date of Submission:

15 November 2014

Submitted By:

Serial no Name ID NO Remarks

01. Sanjida Rahman Liza 18-010

02. Rahima Nazat Ara 18-074

03. Fowziah Nahid Priya 18-096

04. Hamida Akter Hera 18-146

05. Sneharthi Ghosh 18-152

Section: B

B.B.A 18th Batch

Department of Finance

University of Dhaka

2

GROUP # 16

15th November 2014

Jannatun Naym

Lecturer

Department of Finance

University of Dhaka.

Subject: Submission of report on” A business plan of Green Thumb Private Ltd’’

Dear Madam,

We are obliged to submit the report entitled “A business plan of Green Thumb Private Ltd’’as a partial requirement of our course “Entrepreneurship and Project Development” (F-306) under your instruction.

The report includes the undertaking of a project by the students on “A business plan of Green Thumb Private Ltd’’ and thus enabling them to grab the mechanisms of a business plan. Having learnt about the business plan in our theoretical learning, we are now assigned to initiate a business plan.

We are extremely grateful to you for your valuable guidance, diligent effort and supervision. We have tried our best to follow your instructions, schedule and discipline obediently.

Sincerely,

Sanjida Rahman Liza

ID: 18-010

On behalf of the group members of group no-16

BBA 18th Batch

Department of Finance

University of Dhaka.

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LETTER OF TRANSMITTAL

At first, we would like to pay our thanks to the almighty Allah, for helping us to do all the works with perfection.

We would like to express our sincere gratitude and deepest thanks to our honorable course teacher Jannatun Naym who allowed us to perform the study and prepare the report, instructed us in the right way and gave us proper guidelines for preparing this report. Through preparing this report, we have gathered theoretical knowledge about a business plan to launch a new product along with practical knowledge regarding entrepreneurial environment in Bangladesh.

For the completion of this academic report with perfection, we cannot deserve all praise. There were many books, journals and websites, which helped us by providing valuable information, advice and proper guidance for the completion of this report in the scheduled time.

The preparation of this report is of a great expectation in our BBA program because we have learnt to develop a business plan. Therefore, we are quite happy to submit it.

So lastly, we would again like to express our heartfelt thanks to our course teacher for providing such scope to gain practical knowledge and enrich our study with realistic implication of knowledge.

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ACKNOWLEDGEMENT

Green Thumb Private ltd. is a terrarium manufacturing & distributing company. Our company’s motto is to enable people to stay with nature. This company is in its start-up stage. We will start with a small capital and loan. Company promoters conceive an idea of starting a joint stock company and work-up on it to develop the idea and finally form the joint stock company.

In terrarium construction business, almost all the production works are done manually. We would train our workers and employees properly about their respective tasks and arrange small workshops for them. These will increase their level of efficiency and effectiveness in making quality products.

We would use modern information technologies in our business. The manufacturing and service costs for terrariums are relatively lower than many other products. Some simple steps should be followed in preparing the terrarium.

In our country, terrarium business is a very new concept. A few aquarium businesses are producing aquarium with small capital. People will choose our product as our product needs less care. We see a great future of our business. Through our research, we find that we can have majority market share within 10 years.

Our target market will be the young generation who likes to spend on decorative uncommon things and enhancing their collection. The stay-home-moms are another target customer. Generally the like to decorate their homes in their own way and in free time they want to do something pleasurable.

Various financial analyses have been done for this project. Most of them bear a positive sign. These show that the project would be a profitable one both financially and socially. So, the potential investors should invest on the project.

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EXECUTIVE SUMMARY

Serial No.

Content Page No.

01. Chapter 01: Introduction Introduction: 08

Origin of the report: 08

Objective of the report: 08

Methodology: 08

Scope of the report: 08

Limitation of the report: 09

02. Chapter 02: Business Introduction General description 10

Goal/potential 11

Managerial aspect 11-12

Organizational structure 13

03. Chapter 03: Technical Aspect Production technology, utility, ICT

14-15

Manufacturing cost declaration

15-16

R&D plan 16-19

Production process 19-24

Sources of materials 24-25

04. Chapter 04: Marketing Aspect Current scenario 26

SWOT analysis 26-27Competitor analysis 27-29STP analysis 29-36

05. Chapter 05: Financial Aspect Cost of project 37Cost of production 37-40Working capital requirements

40

Projected income statement

40-41

Projected balance sheet 41Ratio Analysis 41-42

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TABLE OF CONTENT

Payback period, NPV, IRR

42-43

Scenario & sensitivity analysis

42-45

06. Chapter 06: Socio-economic Aspect Social & ethical impact 46Contribution to the economy

46

07. Chapter 07:Conclusion & Bibliography

Conclusion 47Bibliography 47

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1.1. ORIGIN OF THE REPORT:

This report is a part of a requirement of B.B.A for our ‘Entrepreneurship and Project Development’ course (F-306) & will be submitted at November 12, 2014. While preparing the report, we gave our best effort to emphasize on the practical implementation of the knowledge that we learned in our course.

1.2. OBJECTIVES OF THE REPORT:

By preparing this report we can understand how an entrepreneurial project can be undertaken and can be profitable from a business perspective.

Several objectives to conduct the study are:

To provide an overall overview about the entrepreneurial process in Bangladesh. To arrange a business program to fill a market gap. To introduce a completely new product concept in the market. To make the program profitable for our economy. To maintain a healthy environment.

1.3. METHODOLOGIES OF THE REPORT:

At first, we have made a working plan. Then we have made a discussion with all of our group members and our course teacher, made a list of task. Information for the report has been obtained both from primary and secondary sources.

1.4. SCOPE OF THE REPORT:

Everything has some advantage that helps that work to be completed thoroughly. We get some scope which helps us to make a standard report. Major of them are-

Enough Time: We have got enough time to prepare a report so that we could gather information with much tension free mind.

Easy access: We have a very smooth access to collect information by the guidelines of our honorable teacher, by using our text & by internet. So, we didn’t face any kind of trouble in this sector.

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INTRODUCTION OF THE REPORT

Chapter# 1

1.5. LIMITATIONS OF THE REPORT:

Every study has some limitations. We faced some usual constraints during the course of our preparation for the report. The major limitations are as follows:

Problems in collecting data: we have faced problems in collecting information for the estimation of budget for the project of building terrarium.

Lack of knowledge: we don’t have sophisticated knowledge about how to prepare a report on project development. So we have to face some problems by this side.

Many terms were unknown to us. No prior study has been done in any section, so very less number of documents is

available. The time was very short to do this report.

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C

Business introduction:

General description of the venture:

Green Thumb Private ltd. is a terrarium manufacturing & distributing company. Our company’s motto is to enable people to stay with nature. Terrarium is a mini indoor garden in a glass container. Inside the glass, the plants require low maintenance and are perfect for people who don't have the time to care for a garden and do not have enough space for a small garden at home but want to have one in their home. The company’s head office will be at elephant road and will have eight showrooms in Dhaka.

Industry background:

Terrarium business is a new business concept in our country A few aquarium businesses are producing aquarium with small capital. However, none of them is producing terrariums specifically. Therefore, there is no specific industry of this product.

Company background:

Company’s mission: Our mission is to be a leading company that delivers the different types of attractive terrariums to our customers of all classes.

Company’s vision:Our company is committed to the relentlessness pursuit of innovation in terrarium and creating, producing, and providing products that satisfies customers’ needs.

Company history:

Green Thumb Private ltd company is in its start-up stage. We will start with a small capital and loan. In addition, we do have planned to convert our business in private ltd within five years. After converting our business to private ltd, we would have a large amount of capital. Then our company will have a steady growth and we can provide a handsome amount of dividend.

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Chapter# 2

Business introduction

Goal/potential of the venture and milestone:Our goal is to become the leading terrarium manufacturing and distributing company in our country. We have already selected our company name and registered it. We have also established our legal entity. Our company is a private ltd. Company.

Uniqueness of the product:Terrarium is a very unique a new product concept in our country. It can be made in different shaped container and can be of different theme like a small desert, a jungle in containers.

Management aspect

TheoPromoters:

The person or a group of persons who takes necessary steps to give birth to a company form

of business organization are known as company promoters. Company promoters conceive an

idea of starting a joint stock company and work-up on it to develop the idea and finally form

the joint stock company. In other words, company promoters are those who discover the

opportunities to make money, investigate such proposition, assemble and finance them and

thereby give a shape of a joint stock company. Company promoters give not only the birth to

a joint stock company but also nourish it until it stands on its own feet.

FunctionsoOf0CompanyoPromoters:

*Conceive0an0idea0of0forming0a0company.

*Analyzeoprofitabilityoandfeasibility0ofotheoidea.

*Investigateotheoworkabilitoofotheoideaobyoconsultingoexperts.

* Decide the name and location of the company and the amount and form of its share capital.

* Prepare the Memorandum of Association, Prospectus and other necessary documents and

file them for incorporation.

In our company, the promoter’s list is given below:

Serial No. Names Capital contribution

1 Sanjida rahman liza 20%

2 Rahima najat ara heera 20%

3 Fowziah nahid priya 20%

4 Hamida akter hera 20%

5 Sneharthi ghosh 20%

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Summary of qualification management:

In our company, owners are enough qualified to start the business. This chart shows their

qualification briefly.

Serial no. Name Designation Educational qualifications

1. Mr X CEO B.B.A, M.B.A in Finance.

2. Mr Y Production and HR manager

B.B.A in Finance, M.B.A In management.

3. Mr Z Finance and marketing manager

BBA in finance, MBA in marketing.

Legal form:

According to the Commercial Code there are five forms of business entities, which are

created by entry into the Commercial Register:  private limited company, public limited

company, general partnership, limited partnership, or commercial association.

Private Limited Company:

Limited company is a company in which the liability of the members or subscribers of the

company is limited to what they have invested or guaranteed to the company. Limited

companies may be limited by shares or by guarantee. And the former of these, a limited

company limited by shares, may be further divided into public companies and private

companies. Business in Bangladesh may be carried on by a company formed and

incorporated locally or by a company incorporated abroad but registered in Bangladesh. The

incorporation or registration is done by the Registrar of Joint Stock Companies and Firms

under the provisions of the Company's Act 1994.

Private Limited Company:

Restricts the rights to transfer the shares;

Limits the number of its members to minimum 2 and maximum 50 excluding the persons

employed in the company;

Prohibits any invitation to the public to subscribe for the shares or debentures of the

company and

Entitles to commence business from the date of its incorporation

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Organizational structure:

The organizational structure of “Green thumb ltd Company” is described below.

Banks:

As we start the company, we have not enough money to continue all the process. We have to

take loan from the banks such as term loan.So we submit application in different banks to get

loan & DBBL & BRAC BANK are interested to sanction loan. In first year we took total

3500000 tk @ 16% from banks for 10 years.

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Chief executive officer

Production and HR manager

Finance and marketing manager

Supervisors

(2)

Labor

(15)

Showrooms

(8)

Salesperson

(8)

A terrarium is a mini indoor garden in a glass container. Inside the glass, the plants require low maintenance and are perfect for people who don't have the time to care for a garden or just don't have a "green thumb". We can use a wide variety of plants and place them in small glass containers that can go on desks, night tables, and other places where space is limited. A terrarium will add a bit of outdoor beauty and peace to any living space.

Production Technology:

In the simplest sense, production technology is the machinery that makes creating a tangible physical product possible for a business. To the small business, this means a workshop at the very least, with more elaborate operations making use of machines and assembly lines. Choosing a production scale model within a company's capital means is important; simpler workshops tend to lead to lower production volume but cost less to assemble, while higher output operations require more complex and costly machines, which are sometimes cost prohibitive.

In terrarium construction business, almost all the production works are done manually. No complicated or expensive machineries and technologies are used here. We would train our workers and employees properly about their respective tasks and arrange small workshops for them. These will increase their level of efficiency and effectiveness in making quality products.

Utilities:

The following materials can be used to make a terrarium. All of these materials are available to us and these are cheap also.

A clear glass jar, vase, bowl, glass, or whatever interesting glass container you have on hand

Rocks, pebbles or recycled glass chunks Activated charcoal (sometimes called activated carbon) Potting soil appropriate for your plants Moss (optional) Figurines, sticks or decorative items (optional) Various small plants A scoop, spoon or shovel Scissors Gloves

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TECHNICAL ASPECTS

Chapter# 3

Information and Communication technology:

Communication is essential to successful business operations and the technology of the twenty-first century has become completely integrated in business interaction. Company networks are faster, the internet has become a powerful force and wireless communications have transformed the way business is performed. Even the latest technologies such as cloud computing are being used to allow businesses to operate globally without sacrificing security or limiting user access. We would use modern information technologies in our business. These are described below.

Networking: Networking allows users to communicate through traditional voice and video in a secure system. It also allows collaboration on reports, programming and other document production, taking communications beyond conversational interaction and into virtual partnerships. The concept of nodes linked together is essential, whether it means connecting to a webpage, cell tower or using cloud-based applications.

The Internet: The internet allows communication in two ways: static communication through web pages, and dynamic communication through information being exchanged. We would post our data to a web page such as product specifications would allow instant access to the same data from anywhere in the world. We would accept online product orders. This technology also can alert employees of changes in costs or real-time chat between a customer service agent and a customer or field representative.

Wireless communications: Wireless devices are now capable of doing everything from making a phone or talking over a walkie-talkie to using the internet or company network to run applications and send memos.

Cloud computing: Cloud computing takes networking to a whole new level. Documents and programs can be stored in virtual drives or computers and can be accessed by any authorized user through ordinary internet connections. It eliminates data lost through system crashes, avoids problems with network downtime etc.

Manufacturing and Service Cost Declaration:

The manufacturing and service costs for terrariums are relatively lower than many other products. The main costs are:

Salary of personnel for maintenance Outlet rent Accessories costs Marketing and promotional cost After selling service costs R&D costs Transportation costs Raw materials costs

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Equipments costs Salary of managers

R&D Plan:

Research and development (R&D) is a valuable tool for growing and improving any business. R&D involves researching market and customer needs and developing new and improved products and services to fit these needs. Businesses that have an R&D strategy have a greater chance of success than businesses that don't. An R&D strategy can lead to innovation and increased productivity and can boost a business's competitive advantage.

Developing an R&D strategy

R&D strategy depends on the size of your business. In small businesses like ours, R&D tends to focus more on product improvement because of budget and cost limitations. Larger businesses may be able to dedicate more time and resources to R&D to introduce new products as well as improve existing ones. The benefits of R&D are often long-term, so it's important to remember that our investment in it may not result in short-term profits. As well as product development and improvement, R&D can help we develop more efficient processes and new ways of delivering services. We will have to consider following things for developing a successful R&D plan for our business.

Customer Needs:

We will assess the needs of our marketplace. Review sales of your existing product range. If sales are declining, it may be because our products no longer meet the needs of our customers or because competitors’ products offer a better alternative. Then we will ask your sales team to research other products that customers are buying. The market research will help identify opportunities and priorities for our research and development program.

Objectives

We will set objectives for research and development. The emphasis should be on developments that will deliver the most profitable return. Developing a new product that will enable us to enter growing market sectors or meet customer needs more effectively may

16

Customer Needs

Objectives

ProcesTeam

provide a more attractive return than updating existing products for sectors where demand is static or falling. We will set performance targets for the new versions.

Process:

We will set up a formal project management process with key review and launch dates to keep our research and development program on track and set a schedule that works back from the planned launch date. The research and development phase will end when the product is ready for production. In the later stages of the program, the emphasis is on manufacturing, distribution and marketing activities. A formal review process is essential throughout the program to ensure that the product meets its business, technical and financial objectives at each stage. We will hold project meetings to assess initial ideas, evaluate proposals, test concepts, prepare the business case monitor costs and review progress.

Team

We will appoint a research and development project team that includes staff with skills in engineering, manufacturing, marketing and finance and increase the opportunities for innovation and set up a forum on our website or intranet where employees can post or discuss ideas for improving existing products and suggest opportunities for new products.

Product and Service:

We would produce mainly four types of products. These products can be of three sizes; small, medium and large.

Types Ingredients DemonstrationType-1 product Small plants & accessories

Type-2 product Bonsai, accessories

Type-3 product Bonsai, plants, small animals & accessories

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Type-3 product Plants, small animals & accessories

* Bonsai: Bonsai means tiny trees which looks like a big tree but its size is like a small plant. It is also called miniature.

*Animals: Here small animals like lizards, butterflies, tortoises, etc would be used to make this tiny forest more natural and to beautify the terrarium.

Equipments:

There would be different equipments for the showrooms and for the head office and for the main factory.

For Showrooms:

Desks Shelves Computers Telephones Chairs Other equipments

For Head Office:

Desks Computers Chairs Telephones Projectors Photocopiers Other equipments

Location:

Our products are mainly for decorating houses or office desks to increase the natural beauty and to create a healthy environment in our residences. So our main customers those creative and artistic people who love to be with nature. They may be house wives, young generation or restaurant or office people who want to decorate their desks with tiny forests. So, our location of showrooms would be that places where these customers have easy access.

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The locations of our showrooms are:

1. Katabon (Main factory)2. New Market3. University areas4. Panthopath5. Elephant Road (Head Office)6. Gulshan area

Production process:

Making a terrarium is much easier than gardening. Some simple steps should be followed in preparing the terrariums. These steps are described below:

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Flow Chart:

STEP 1: Choosing and Preparing the Container:

At first we have to choose the appropriate glass jar for making terrarium. Glass jar may be of different sizes and shapes. Generally round shape and rectangular shape glass jars are popular in the market. Then we have to remove any price tags or stickers from the vessel and wash both the interior and exterior thoroughly to ensure that there are no unwanted residues that could affect the health of your plants. After that we have to envision how we want to arrange the plants inside the jar.

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Step 1. Choosing & preparing a glass container

Step 2. Adding Drainage Layers

Step 3. Adding Activated Charcoal

Step 4. Adding soil

Step 5. Planting plants

Step 6. Adding accessories

Step 7. Cleaning & watering

STEP 2: Adding the Drainage Layers:

Once the container is ready, we will fill the bottom with rocks or pebbles. This is to create a false drainage layer so water can settle and not flood the plant. The depth of the rocks totally depends on the size of the container, but aim for 1/2″ to 2″.

STEP 3: Adding the Activated Charcoal:

The charcoal looks exactly like what we would expect it to and it’s messy. Sometimes it comes as small granules and other times it comes as shards—either works. We don’t need much, just enough to cover the rocks. The charcoal will improve the quality of the little world including reducing bacteria, fungi and odors.

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STEP 4: Adding Soil:

Again, cactus and succulents need a special soil compared to most other plants, so we must be sure to get the appropriate bag depending on which plants we’re using. Then we would add enough soil so the plant roots will have plenty of room to fit and then grow. We would aim for a depth slightly greater than the height of the plant’s pot.

STEP 5: Planting the plants:

We will take the plants out of the pot and break up the hard soil ball until we get down to the roots. If we are breaking the plant into multiple parts, we should be gentle. We may also want to trim the roots if they are especially long; we don’t need to worry, they’ll grow back. Using a spoon, your fingers, the end of a brush, or even a pencil, we will dig a well to place the plants roots in. Then we will add more soil around the top and compact the soil down around the base of the plant. Continuing placing the little plants in the container we will try to keep them away from the edges. The leaves are likely to touch the sides but our aim is to keep them away as much as possible.

STEP 6: Adding Accessories:

After we’re done planting we can add little accessories like a blanket of moss (dried or living), little figurines, old toys, glass beads, shiny metal object, sticks, stones, or even a layer or rocks. This is our little world and we can put whatever we would like in there.

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STEP 7: Cleaning and Watering:

We will likely have dirt all over the sides of the container, so we must wipe them down so that we can enjoy the beautiful living world inside. Then we will give the terrarium a little bit of water. Unlike most of the house plants, a terrarium doesn’t need to be soaked. Just a couple of shots of water should be given to get it started.

Tips & Tricks followed in maintenance:

- Over time, we should monitor the terrariums’ water needs based on how dry the soil is. For terrariums with closed lids, if water is dripping down from the top, the lid should be opened to let some evaporate. Likewise, we may need to add more if it looks parched. We shouldn’t need to water them very often.

- If leaves die or wilt, we should remove them from the terrarium immediately to maintain the health of the little eco system. If an entire plant dies, we would take it out.

- We won’t place in direct sunlight. It should be remembered that these are essentially little greenhouses and direct sunlight through the glass will trap heat and scorch the plants. It should be placed in indirect light for best results.

Supplies and sources of raw materials:

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The main raw materials used in preparing a terrarium are the plants, glass jars, soils and rocks. All other materials are found in local markets easily and their costs are relatively cheap. Plants, soil, rocks etc. can be collected from various nurseries at a cheap price. We have also a plan for making our own nursery in future. Then we would be able to supply own plants for making terrarium. There are some glass manufacturing companies in Bangladesh. We can purchase glass jars from them.

Sources of plants, soils, rocks etc.

Nurseries Address

1. Garden Center House # 248, Road # 19, Dhanmondi R/A

2. Hortico 260/5Modhubazar,West Dhanmondi R/A

3. Shakh Nursery 1/14, ( 3rd floor), south Pllobi, section # 7

4. Torukunja Nursery (Pvt.) Ltd. Road # 9/A (New), Dhanmondi

5. Mitasha Screw Traders 247/1/17 Nurul Haque Market, Nawabpur

These nurseries are located at Dhaka City. As the number of suppliers is pretty large, the costs of the plants would be small.

Sources of glass jars:

Glass Manufacturers Address

1. The Bengal Glass Works Ltd. 139 Motijheel C/A (10th floor)

2. Nasir Glass Inds. Ltd. House # 16, Road # 09, Baridhara Socitety

3. J.M.S. Glass Industries Limited Siddirgonj, Narayangonj.

4. Padma Glass Ltd Barisal District Town.

Almost all of these suppliers are near to Dhaka City. We can purchase our glass jars from them.

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Structure and Civil Work:

Up to first five years of our business we have no plan for constructing any building and do any civil works. We would hire our show rooms, head office and the main factory. But we have a plan for purchasing land after five years and for making our own nursery.

Current scenario of terrarium business in Bangladesh:

In our country, terrarium business is a very new concept. A few aquarium businesses are producing aquarium with small capital. However, none of them is producing terrariums specifically.

Situation analysis:

Market summary:

We have mentioned earlier that there is no existing terrarium business in our country. So, no market exists for this business. We will be the first constructor and providers of terrariums in our country. We have a target market, which we will discuss later in the segmented market

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Marketing Aspect

Chapter# 4

part. We will open our showrooms in different parts of Dhaka city initially and then in other cities.

SWOT analysis:

SWOT Analysis is a useful technique for understanding Strengths and Weaknesses, and for identifying both the Opportunities open and the Threats faced by a business. Strengths, weakness, opportunities and threats faced by our organization are given below:

Strengths:

1) We will offer a unique product, which has not been offered by anyone else in our country.

2) We will provide our product at a cheaper price than the substitute products available in our country.

3) There will be enough demand of our product in the market because people are more aware of environment and nature now days in our country.

4) As the income of people in our country and their choice for natural products is growing, they are demanding more decorating products like that we are supplying.

5) We will provide after sale customer care, which will be valued to the customers importantly.

6)

Weakness:

1) Our company has little market presence or reputation.2) We have a small staff, with a shallow skills base in many areas.3) We are vulnerable to vital staff being sick, and leaving.4) Our cash flow will be unreliable in the early stages.5) As the concept is new, people will take time to actually know and have the product.

Opportunities:

1) Having a unique product concept is our greatest opportunity.

2) Technologies for construction of terrariums are available in our country.

3) There is a growing trend of home and office decoration in our society.

4) Government is emphasizing on planting trees and growing awareness of saving the nature.

Threats:

1) Though there is no direct competitors in the market of us but indirect competitors can also be harmful.

2) New technologies in aquarium business that will raise its demand can also be a threat.

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3) Power of suppliers of raw materials may be high.4) We can face problems collecting the raw materials for our product as most often we

have to collect different types of rare plants and small creatures.

Competitor analysis:

We can consider five key concepts to run the competitor analysis:

Our company's competitors:

We have already mentioned that aquarium producers are our main competitors. . These small business entrepreneurs have some show rooms in different parts of the country and they are mostly situated in the large towns like Dhaka, Chittagong, Mymensingh, shylet etc. In Dhaka the aquarium constructor and distributors can be seen in different large markets. As, our business concept is new we can take aquarium business as our competitor as they are providing substitute products for us.

Competitor product summaries:

Our competitors provide different types of aquariums of different size. Different types of colored fishes are their main raw materials. These fishes are kept in aquarium in different atmosphere.

Competitor strengths and weaknesses:

Strength:

1) Aquarium businesses are growing rapidly which can be a bad news for us.2) People are demanding more of their products.3) Fishes of different colors are the main attraction for the customers as they are

seen like pets.4) Some of our competitors already gained reputation as they have introduced

their business earlier.

Weakness:

1) Extreme care is needed for their products.2) The customers have to bear extra expenses and extra time for feeding the

fishes, changing the water etc.3) Fishes can die from any diseases.

The strategies used by each competitor to achieve their objectives:

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They follow different strategies to achieve their objectives. Their main objective is to hold the remaining customers and attract the new ones. Offering new technology products, offering products within most possible short time are also their strategies.

The market outlook:

However, people have demand for aquariums but they also face problems to feed the fishes, cleaning the aquariums and changing the water. As they face time shortage, they have no time for doing these works. Therefore, people will choose our product as our product needs less care. People can save their time and can decorate their home and office. So, we see a great future of our business. Through our research, we find that we can have majority market share within 10 years.

100%

Situation: current

Aquarium business

70%

30%

situation: 1-5 yearsAquarium

businessTerrurium business

40%

60%

situation: 5-10 years

Aquaruim businessterrarium business

Graph: market outlook

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STP Analysis:

Market Segmentation :

Segmentation refers to a process of dividing a large unit into various small units which have more or less similar or related characteristics

Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference.

A market segment is a small unit within a large market comprising of like-minded individuals.

One market segment is totally distinct from the other segment. A market segment comprises of individuals who think on the same lines and have

similar interests. The individuals from the same segment respond in a similar way to the fluctuations in

the market.

We will segment the market in the following way:

Psychographic segmentation

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The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude, interest, value help the marketers to classify them into small groups. It is the most crucial market segment for our company to target. Social class, lifestyle, personality characteristics will the most influential variables for our product. For example : Bonsai terrarium is costlier and its demand and sales will be depending on social class differences.

Behavioral Segmentation

The loyalties of the customers towards a particular product help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards a particular brand .Occasions, benefit sought, user status will be the variables affecting our product’s demand.

Geographic Segmentation

Geographic segmentation refers to the classification of market into various geographical areas. A marketer can’t have similar strategies for individuals living at different places. We can take lightly the geographical difference as its related to one’s hobby, taste and preferences. As we will be offering product though online we can make it easily available to people wanting it.

Basis for segmentation :

Gender :

People having willingness to keep a terrarium in their houses, offices and restaurants for decorating those places will be our target customer. But female customers will response more towards these product

Age:

Age group 20-30 years people will be more demanding the product. They will find this product as decorative much like a show piece.

Age group: 30-40 years people will keep this product to teach their children about the nature, trees, water cycle introducing their children with the environment. They will be also buying the product for decoration of the house.

Age group: Age limit 40 or more will be demanding the product to feel the beauty of nature which they missed during their busy working life. Also they can pass their free time by taking care of the terrariums. It will be beneficial for their body and mind.

30

Income group: people with high medium low income can afford the product, as we will offer different price for different feature of the product.

Target market:

With the current state of the economy, having a well-defined target market is more important than ever. No one can afford to target everyone. Small businesses or start up like us can effectively compete with large companies by targeting a niche market. Target marketing allows to focus marketing budget and brand message on a specific market that is more likely to buy from us than other markets. This is a much more affordable, efficient, and effective way to reach potential clients and generate business.

Our target market will be the young generation who likes to spend on decorative uncommon things and enhancing their collection. The stay-home-moms are another target customer. Generally the like to decorate their homes in their own way and in free time they want to do something pleasurable. Taking care of a terrarium is a great fun and refreshing. Terrarium will provide them the chance to spend their time joyfully people aged between 40 or above also will be our target customer. In front of parks we will be offering manly them who come for exercising, jogging.

Positioning:

Positioning outlines what a business should do to market its product or service to its customers. How it differentiates itself in the market place. For this, we have done a marketing mix analysis:

31

The Marketing Mix Analysis

“ Take a step to shelter the nature. Live in green! Feel like closer to the nature”

Successful marketing depends upon addressing a number of key issues. These includes what a company is going to produce, how much it is going to charge, how it is going to deliver its products or services to customers and how it is going to tell its customers about its products and services. That is it makes itself prepared to plan the details of its marketing mix.

A firm’s marketing mix is the set of controllable, tactical marketing tools that is used to produce the response it wants in the target market. Initially we have organized our marketing mix into four categories product, price, promotion, and place. Traditionally these tools or considerations were known as the 4Ps.But as marketing became a sophisticated discipline, 3 new ‘P’s were added namely people, physical evidence, process. These considerations are now known as 7Ps of Marketing. So we have included those additional three P’s into our marketing mix analysis for making it more up-to-date, understandable and acceptable to our potential customers

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Product identification:

A firm’s product is the good or service that is offered to the target market. It satisfies the customer’s demand and increases their utilities. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales fall. Determining the product to be sold is central to the firm’s entire marketing effort. A terrarium is a type of miniature ecosystem of plants. Terrariums are usually sealable glass containers that can be opened for maintenance and to access the plants inside. However, this is not essential, terrariums can also be made using other transparent materials and some are open to the atmosphere rather than being sealed. Terrariums are often kept as decorative or ornamental items in the same way as aquariums. Closed terrariums create a unique environment for plant growth, the transparent walls allow for both heat and light to enter the terrarium. The sealed container combined with the heat entering the terrarium allows for the creation of a small scale water cycle. Because of the different conditions within, terrariums can be classified into two types: closed and open.

Closed terrariums:

Tropical plant varieties, such as mosses, orchids, ferns and air plants, are generally kept within closed terrariums due to the conditions being similar to the humid and sheltered environment of the tropics.

Closed terrariums also require a special soil mix to ensure both good growing conditions and to reduce the risks of microbial damage.

33

Open Terrarium:

Open terrariums are better suited to dry plants such as succulents. Not all plants require or are suited to the moist environment of closed terrariums. So for plants adapted to dry climates, open, unsealed, terrariums are used to keep the air in the terrarium free from excess moisture.

Concept statement:

We have tried to provide the description of our selected product “Terrarium” which we are going to offer to our target market through a concept statement.

34

GREENTHUMB PUBLIC LTD COMPANY LTD

Concept statement

Product:

GREENTHUMB PUBLIC LTD COMPANY LTD will sell environment-friendly, mini-forest like terrarium to nature-loving people who like to stay close to nature but cannot because of the din and bustle of city life.A terrarium is an enclosed or partially enclosed structure made of glass or transparent plastic for growing plants and sometimes housing small animals. Often the plants and animals have specific needs that require carefully controlled conditionsThe product will be sold through small stores in various renowned areas of Dhaka City.

Target Market:

People who are the true lover of nature wanting to live in green environment and make their homes decorated with with something of different concept. Natural decorative product is truly gonn be eye catching. Many a people want to make a garden but cannot as space shortage or insufficient capital or lack of time. Young generation, stay home moms are our main target market.

Why keeping a terrarium:

Terrariums are mainly used for decorative purpose. They generate oxygen which vital for

our living.they help to improve the mental health of people.

Pricing policies:

Price is the amount of money customers pay to buy a product. The price is very important as it determines the firm’s earnings, profit and survival. When setting a price, we considered the perceived value of customer for the product. The price of a product sends a clear message to our target market. If the selling price of a product is set too high, a company may not achieve its sales volume targets. If it is set too low, volume targets may be by achieved, but no profit earned.’

We had several policies such as Cost –based pricing, Value-based pricing, Segmented pricing, Promotional pricing. When the question of determining the price per terrarium came, We have chosen cost –based pricing policies to determine the price which we shall be charging for our product. We set the price of our product at 300 to 25000 per piece of terrarium depending on the size, ingredients and maintenance cost.

Promotion:

Promotion is one of the market mix elements. Promotion refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty. Promotion is also found in the specification of five promotional mix or promotional plan. These elements are personal selling, advertising, sales promotion, direct marketing, and publicity. A promotional mix specifies how much attention to pay to each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. We will be using promotional tools like leaflet

35

GREENTHUMB PUBLIC LTD COMPANY LTD

Concept statement

Product:

GREENTHUMB PUBLIC LTD COMPANY LTD will sell environment-friendly, mini-forest like terrarium to nature-loving people who like to stay close to nature but cannot because of the din and bustle of city life.A terrarium is an enclosed or partially enclosed structure made of glass or transparent plastic for growing plants and sometimes housing small animals. Often the plants and animals have specific needs that require carefully controlled conditionsThe product will be sold through small stores in various renowned areas of Dhaka City.

Target Market:

People who are the true lover of nature wanting to live in green environment and make their homes decorated with with something of different concept. Natural decorative product is truly gonn be eye catching. Many a people want to make a garden but cannot as space shortage or insufficient capital or lack of time. Young generation, stay home moms are our main target market.

Why keeping a terrarium:

Terrariums are mainly used for decorative purpose. They generate oxygen which vital for

our living.they help to improve the mental health of people.

distribution, free samples, personal selling , fair to make customers aware of our product, make them interested in that. It will also help us to get their informed feedback and suggestion for and experience with the product.

Part 5 :Financial aspects

Cost of Project:

Land and site developmentBuilding and civil works

Plant and machinery ComputerTelephonePhotocopierVehicleOther office equipments and furniture

330000100000200001000000550000

Preoperative expense R & D costLegal feesMarketing cost

100000100000100000

36

FINANCIAL ASPECT

Chapter# 5

Total 2300000

Means of financing:

Funding from the shareholders Loan from banks

Cost of production:

Raw material costs

Unit Costs Type-1 Type-2 Type-3 Type-4Small Medium Large Small Mediu

mLarge Small Medium Large Small Medium Large

Glass Jar 100 500 1500 100 500 1500 100 500 1500 100 500 1500

Plants 20 50 100 20 50 100 20 50 100 20 50 100

Bonsai - - - 1000 2000 3000 1000 2000 3000 - - -

Soil, fertilizer & rocks

20 40 60 20 40 60 20 40 60 20 40 60

Accessories

10 20 40 10 20 40 10 20 40 10 20 40

Small animals

- - - - - - 20 100 550 20 100 550

Total material cost

150 610 1700 1150 2610 4700 1170 2710 5250 170 710 2250

Utilities costs:

Costs Costs per month Annual costsA scoop, spoon or shovel 1667 20000Scissors 667 8000Gloves 333 4000Hand wash 667 8000

37

Total costs 3333 40000

Labor costs

Costs Costs per labor No. of Labor

Cost per month

Annual costs

Labor costs

6000 15 90000 1080000

Factory overhead costs

Factory overhead costs refer to indirect factory-related costs that are incurred when a product is manufactured. Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment, factory supplies and factory equipment. Factory supplies and factory personnel (other than direct labor) are example of factory overhead costs.

Costs Costs per month Annual costs(Tk.)Utility costs 3333 40000Factory supervisors’ salary 20000 240000Factory rent 20000 240000Packaging costs 2500 30000Total costs 45833 549996

Projected Sales:

At the first year 2014 our projected sales will be Tk.6789500. at the second year it will grow at a rate of 8%. And it will continue to grow at the same rate up to the fifth year 2018.

Year 2014 2015 2016 2017 2018Projected Sales 6789500 7332660 7919273 8552815 9237040

The projected sales of five years are represented on the following graph:

38

2013 2014 2015 2016 2017 2018 20190

100000020000003000000

400000050000006000000

700000080000009000000

10000000

Projected Sales

Projected Sales

Learning Curve:

Learning curve is the premise that people and organizations get better and efficient at their tasks as the tasks are repeated. Here, our cost of labors is projected to be Tk.1080000. But as the time would pass the employees or labors of our organization would be efficient at their works. They would be able to produce the same product at lower cost and at minimum time. So, at the second year 3% efficiency would be achieved and the costs would be less. Finally, at the fifth year, 1% efficiency would be achieved. The number of labor needed would be less over time and labor related costs would also decrease.

Year 2014 2015 2016 2017 2018

labor cost 1080000 1047600 1026648 1011248 1001136

Efficiency achieved per year 3 2 1.5 1

The projected costs of goods sold of five years are represented on the following graph:

39

2013 2014 2015 2016 2017 2018 2019960000

980000

1000000

1020000

1040000

1060000

1080000

1100000

labor cost

labor cost

Working capital requirements and its financing:

Items Amount(Tk.)Raw material 1527400Salary 2928000Rent 1680000Utilities 40000Transportation cost 120000Marketing and promotional cost 30000After sales service cost 25000

Projected Income Statement

Income statement of a company incorporates the sales or revenues of the organizations and then the expenses of the same period are subtracted from the revenues. After that the net profit for the period is found. The projected income statements of our organization for the first five years are given below.

Income Statement 2014 2015 2016 2017 2018Net Sales 6789500 7332660 7919273 8552815 9237040cost of goods sold 3307400 3373548 3441019 3509839 3580036gross profit 3482100 3959112 4478254 5042975 5657004administrative expense 1450000 1450000 1450000 1450000 1450000selling expense 2023000 2033115 2043281 2053497 2063764profit from operation 9100 475997 984973.3 1539478 2143239finance cost 160000 160000 160000 160000 160000net profit before tax -150900 315997 824973.3 1379478 1983239income tax 0 118498.9 309365 517304.4 743714.7net profit after tax -150900 197498.1 515608.3 862173.9 1239525

40

Projected Balance Sheet

Balance sheet of an organization represents the financial position of an organization at a specific date. It includes assets, liabilities and stockholders’ equity of an organization. The balance sheets of the next five years of our organization are given below.

ASSETS 2014 2015 2016 2017 2018current assetscash and cash equivalents 129119 500012 834178 1189842 1568771accounts receivable, less allowance for doubtful accounts

678950 733266 791927.3 855281.5 923704

Inventories 339475 366633 395963.6 427640.7 461852total current assets 1147544 1599911 2022069 2472764 2954327property, plant and equipment 2000000 2000000 2000000 2000000 2000000accumulated depreciation 100000 200000 300000 400000 500000net property,plant and equipment 1900000 1800000 1700000 1600000 1500000total long term assets 1900000 1800000 1700000 1600000 1500000total assets 3047544 3399911 3722069 4072764 4454327

liabilities and shareholders equitycurrent liabilitiesaccounts payable 165370 168677.4 172050.9 175492 179001.8accrued expenses 33074 33735.48 34410.19 35098.39 35800.36total current liabilities 198444 202412.9 206461.1 210590.4 214802.2long term liabilities 1000000 1000000 1000000 1000000 1000000total liabilities 1198444 1202413 1206461 1210590 1214802shareholders equitycommon stock 2000000 2000000 2000000 2000000 2000000retained earnings -150900 197498.1 515608.3 862173.9 1239525total shareholders equity 1849100 2197498 2515608 2862174 3239525total liabilities nnd shareholders equity 3047544 3399911 3722069 4072764 4454327

RATIO ANALYSIS

Ratios Formula 2014 2015 2016 2017 2018Profitability RatiosReturn on Assets net income/total asset -0.049515282 0.0580892 0.1385273 0.211693 0.278274Return on Equity net income/total equity -0.081607268 0.08987408 0.2049637 0.30123 0.382625Profit margin netincome/sales -0.022225495 0.02693404 0.065108 0.100806 0.134191

Liquidity RatiosCurrent current asset/current

liability5.78270948 7.90419562 9.7939445 11.74206 13.75371

Quick current asset-inventory/current

4.072025357 6.09288302 7.8760841 9.711382 11.60358

41

liability

Overall financial stability ratiosDebt total debt/total asset 0.32813308 0.29412535 0.2686678 0.245533 0.224501Debt to Eeuity total debt/total equity 0.540803634 0.45506296 0.3975182 0.349385 0.308687

Payback period

Initial cash outflow

Year Cash inflows/outflows

Balace Payback period

2300000 2014 -2900000.00 -5200000.00

2015 -50899.87 -5250899.88

2016 297498.29 -4953401.58

2017 605607.94 -4347793.64

2018 962173.50 -3385620.14

2019 1116121.264 -2269498.88

2020 1294700.666 -974798.212021 1501852.773 527054.56 7.649063761

Net Present Value:

Calculation of discount rate:

We have calculated the wacc to determine our discount rate.

WACC=k e×w e+ k d(1-tc) ×wd

k e=r f+β (rm-r f)

=.06+1(.16-.06)

=.14

k d =rd(1-tc)

=.16 (1-.35)

=.104

Average capital=2000000

42

Average debt =1000000

Total = 3000000

w e=20000003000000

=.67

wd= 10000003000000

=.33

WACC = .16×.67 + .104×.33

=.141 or 14%

Scenario and Sensitivity analysis

Sensitivity analysis examines how sensitive a particular net present value calculation is to changes in one variable. This analysis is also called as what if analysis and bop (best, optimistic and pessimistic) analysis. And scenario analysis is the analysis of NPV by changing more than one variable. Some variables with their pessimistic, best and optimistic estimations are given below.

Variable Pessimistic Expected or Best OptimisticMarket size (per year)

1000 1350 1600

Market share 20% 30% 50%Price 80% 100% 120%Variable cost 3500000 3307400 3000000fixed cost (per year) 3800000 3633000 3400000investment 2500000 2000000 1500000

Our estimations about sales growth rate, tax rate, terminal growth rate, discount rate, depreciation rate are given below.

sales growth rate 8%

tax rate 38%terminal growth rate 2%discount rate 14%

43

depr,depl&amort. 5%capital expenditure growth

Variable

Base or best case

Particulars 2014 2015 2016 2017 2018 terminal value

NET SALES 6789500 7332660 7919272.8 8552814.62 9237039.794

Operating Profit (EBIT) 9100 475997 984973.265 1539478.31 2143239.205

depreciation,depletion&amortization

100000 100000 100000 100000 100000

Interest 160000 160000 160000 160000 160000pretax income(EBT) -150900 315997 824973.265 1379478.31 1983239.20

5net income -150900 197498.125 515608.291 862173.942 1239524.50

3depreciation,depletion&amortization

100000 100000 100000 100000 100000

Capex 2000000.00

change in NWC -949100 -448398 -418110 -456566 -477351after tax interest expense 100000 100000 100000 100000 100000

FCFF -2900000.00 -50899.87 297498.29 605607.94 962173.50 8178474.78

1 2 3 4 5 5discount factor 0.877192982 0.769467528 0.67497152 0.59208028 0.49096954

40.49096954

4pv of FCFF -2543859.65 -39165.80102 200802.872 358568.518 472397.886

44015382.03

4Firm value 2464125.86

less:LTD 1000000Equity value 1464125.86

Pessimistic case

Particulars 2014 2015 2016 2017 2018 terminal value

NET SALES 4023407 4345279.6 4692901.925

5068334.1

5473800.8

Operating Profit (EBIT) -4025421 -4347294.6 -4694917.92

5

-5070351 -5475819

depreciation,depletion&am 125000 125000 125000 125000 125000

44

ortizationInterest 160000 160000 160000 160000 160000pretax income(EBT) -35000 -35000 -35000 -35000 -35000

net income -35000 -35000 -35000 -35000 -35000depreciation,depletion&amortization

125000 125000 125000 125000 125000

Capex 2500000.00change in NWC -949100 -448398 -418110 -456566 -477351after tax interest expense 100000 100000 100000 100000 100000

FCFF -3259100.00 -258398.00 -228110.00 -266566.0

0

-287351.0

0

-2442483.50

1 2 3 4 5 5discount factor 0.87719298

20.7694675 0.67497151

60.592080

30.490969

50.49096954

4pv of FCFF -

2858859.649

-198828.87 -153967.752

6

-157828.5 -141080.6 -1199185.01

1Firm value -4709750.34less:LTD 1000000

Equity value -5709750.34

Optimistic case

Particulars 2014 2015 2016 2017 2018 terminal value

NET SALES 9656178 10428672.24 11262966 12164003.3 13137123.56Operating Profit (EBIT) 3256178 3968672.24 4741766.02 5580379.3 6489827.085depreciation,depletion&amortization

75000 75000 75000 75000 75000

Interest 160000 160000 160000 160000 160000pretax income(EBT) 3096178 3808672.24 4581766.02 5420379.3 6329827.085

net income 1935111.25 2380420.15 2863603.76

3387737.06 3956141.928

depreciation,depletion&amortization

75000 75000 75000 75000 75000

Capex 1500000.00change in NWC -949100 -448398 -418110 -456566 -477351after tax interest expense 100000 100000 100000 100000 100000

FCFF -338988.75 2107022.15 2620493.76 3106171.06 3653790.93 31057222.89

1 2 3 4 5 5discount factor 0.87719298

20.769467528 0.67497152 0.59208028 0.490969544 0.49096954

4pv of FCFF -

297358.5526

1621285.126 1768758.65 1839102.62 1793900.067 15248150.57

45

Firm value 21973838.48

less:LTD 1000000Equity value 20973838.4

8

Social and Ethical Impact:

1. This product will create awareness among the people of our country about tree plantation , the preservation of forest .

2. It will also help to the protection of wild animal. People will contribute towards making the earth worth living for them.

3. The product will generate oxygen in the house, which is vital for our lives.

4. it will help the youngster to learn about water-cycle.

5. It will helpful in feeling like close to the nature creating a green environment in the home.

6. It will help to improve the mental health of the people and wellbeing of the children.

Contribution to the economy:

1. Many people spend thousands in buying show pieces, art, painting from abroad to decorate their houses. By offering this product at cheaper rate, a lot of foreign currency can be saved.

2. This product will contribute to our GDP and per capita income will rise.

3. This will create employment opportunity in the economy thus removing the curse of unemployment from the society.

4. The idle and unused capital of the country can be utilized effectively. The savings can be converted into investment and thus earning can be multiplied.

46

Chapter# 6

SOCIO ECONOMIC ASPECTS

CONCLUSION

Terrarium construction business is new in our country. Our company is a private limited company. To introduce the product with the customers we have to conduct a promotional and marketing program. For the first five years the promotional costs would be more. After that the costs would be less. The capital given by the owners and loan borrowed would be the initial source of financing. After forecasting the sales and expenses and incorporating them in the financial statements, this business seems to be financially and socially profitable. After the functioning of first five years the company will be able to issue share. As the projected financial and social profitability of this business is satisfactory, the potential investors should invest in this business.

BIBLIOGRAPHY

Project Management, A Managerial Approach-by Jack R.Meredith, Samuel J.Mantel, Jr.

Entrepreneurship-by Bruce R. Barringer & R. Duane Ireland

Corporate Finance-by J.F.Ross

www.google.com.

47

Conclusion & Bibliography

Chapter# 7