INSTITUTE OF MANAGEMENT SCIENCES

Business Plan
Red ol Fun Ice cream Parlor

Submitted by:
Aqeel Khan

Submitted to:
Sir Nadir Magsi

Business Plan for Red ol Fun

Introduction
Red ol Fun
Bomanji Square
Cantt, Multan
0300-7648748

Description of venture
The venture is called Red ol Fun and it is an ice cream parlor that will serve ice
cream and ice cream desserts in a range of flavors. It is a medium sized business
that will provide not only delicious desserts but will also serve as an entertainment
spot for incoming customers by providing them a spacious and nicely decorated
sitting space.
Financing
The intial budget required is 21 lakhs, out of which 5 lakhs are being borrowed from
a bank and two investors are investing 5 lakhs each into the business. The rest of
the budget is being financed through personal savings with each owner bringing in
1 lakh.
Executive Summary
Red ol Fun is an ice cream parlor that aims to be the next hot spot in the city of
Multan. The basic concept is simple and it is so serve the best quality ice cream to
the citizens of Multan. Although the idea may seem like an old and rusty one, but
we strongly believe that this venture could be a huge success in this particular city
if we properly position it on some key strategic factors.
There are many outlets serving ice creams in Multan at this moment but none are
exactly like Red ol Fun. If you ever want to go out and have ice cream, the only
option u have is to either buy ice cream form some retail shop or from other ice
cream making spots and eat it either in your car or while standing on the road. The
old names like Chaman or Baba offer you only a limited number of chairs in a
congested environment which is not suitable for females or for families. The other
option is to go to the big brand name restaurants like Zanzibar or Bundu Khan but
again people do not prefer doing that unless they are also ordering a complete
meal.
Hence to fulfill this gap of providing ice cream in a unique and welcoming
environment that is suitable to teens and even families with young kids we are
launching the ice cream parlor with the name Red ol Fun.
Another gap created in the ice cream industry in Multan is through the quality
factor. For those who have consumed some top quality ice cream brands would
know that there are almost no spots that serve top quality ice cream that are rich in
flavor and taste. Moreover ice cream desserts are also lacking with only few spots
serving combination of ice cream and brownies like Pizza Hut or Indulge. Not a lot of
ice cream desserts are available. Hence we wish to exploit this gap as well through
Red ol Fun by hiring some professional chefs and investing in good quality
machines and content and in the end offering a range of flavors and ice cream
desserts to our customers.

Red ol Fun can be a great investment opportunity because any restaurant that has
good food and good environment to offer has rarely failed to this date in Multan.
Red ol Fun can capture a significant market share in a relatively short period of time
if we continue to aim for excellence in food quality and service quality.
The entrepreneurs who came up with this idea are six students who are fresh
graduates and are motivated to start their own venture and make use of the skills
they learned during their four year business administration bachelors. Due to the
fact that they lack practical skills, a manager with significant work experience in this
line of business is being hired to ensure smooth and successful running of the
business.
The capital is being financed through three sources; bank loan, investors and
personal savings. Each owner is investing one lakh of personal savings and two
investors are investing a total of 10 lakh. The bank loan is for a total of 5 lakhs. This
makes a total of 21 lakhs of initial budget and it can cover all the major initial
investment as well as running expenses for the first year of the venture. Our
projected income statement shows that the venture will be going into profit from
the very first year, although the cash flows may be negative. With this bright
projection, we believe that the payback period for the initial investment will be no
longer than a few years and the venture will soon be going into positive net cash
flows.
Environmental and Industry Analysis
Environmental Analysis
Environmental analysis is basically conducted to identify the trends and changes
occurring on domestic and international level that may impact the new venture. The
factors which are the part of environmental analysis are generally not under the
control of an entrepreneur but their consideration is altogether is very important for
the success of a business idea.
Main factors of an environmental analysis are as follow:
Economy
GDP: Trends in national GDP (Gross domestic product) is the primary indicator used
to gauge the countrys overall economy and Pakistans GDP has increased a little
even after it failed to achieve the target of 4.7% during fiscal year 2011-2012 and
stood at 3.7%. But this is not very discouraging as a recent survey showed that the
GDP was higher than last year. The figure below proves this statement:

This trend shows that the overall condition of the economy is somewhat improving
and the idea of an Ice-cream parlor will contribute to its betterment as the overall
economy is inclined towards new experiences.
Culture
Culture determines the interests of society and the culture around is rapidly
changing because more modernization is in focus now. The idea of an ice-cream
parlor is basically the result of changing needs and habits of our youth as they are
always in search of something new and vibrant. The trend is to be classier and be
identified with some known brand. This attitude was more found in college and
university students so there was a need to provide them with something that
matches their personalities as well as a proper setting for this. This radical change
became a driving force for us to introduce the idea of an ice-cream parlor.
Technology
As there is a change in cultural aspects of our society, this change has led us to use
newer technologies and leave behind the m and this is leading them to conventional
ways of doing things. As one of our potential competitors stated that they are still
using the old wooden machine for making ice-cream and this is leading them to
decreased sales so this shows the importance of technology. As stated in production
plan, we plan to use latest machines (purchased from Shangai Lisong Cold Machines
Co.) for providing quality to our customers.
Legal concerns
Our legal advisor Mr. Naveed Iqbal Rana (advocate) has helped us in acquiring
design patent which has protected our companys theme of colors and arrangement
from being copied. He has also helped us in getting our trade mark registered. Our

terms with suppliers are also regulated by law. The legal advisor will be paid Rs.40,
000 per month.
Industry Analysis
Industry analysis basically comprises of those factors which are generally under
control of the inventor and focuses on specific industry trends. They are:
Industry demand: During our visit of ice-cream market, we identified that although
there is a large market that can be captured for ice-cream lovers but our
competitors are somewhat neglecting important factors like proper sitting
arrangement which is entirely dedicated for ice-cream lovers. Our direct competitor,
Baba Ice-cream, is providing sitting arrangement but that is at the back of main
outlet and mostly customers dont get to know about that. So there is a need of a
full fledge ice-cream parlor which can provide the customers with a free and
relaxing atmosphere to enjoy what they want.
Competitors
In Multan, we are already faced with number of direct and indirect competitors. Our
nearest competitors are Baba and Chaman ice-cream and in indirect competitors we
have Shapes, Zanzibar, Bundu khan, LFC and Eat on. Baba and Chaman ice-cream
have a lead in all because they have ice-cream as their core product and also
providing the sitting arrangements. But their sitting arrangements do not match
with the rapidly changing trends in society and are somewhat conventional.
The indirect competitors are providing good sitting arrangements but they are
costly for the students or they provide very formal atmosphere where students, or
rightly called the youth, dont feel comfortable for their fun adventures. Keeping all
these factors in mind, we have designed something lively for our target market and
we aim to provide such arrangement and color theme which can rightly define their
ambitions into physical outlook.
Description of venture
Red ol Fun is an ice cream parlor that aims to cater to the needs of all types of ice
cream lovers. The business aims to provide its customers high quality ice cream in a
range of different flavors. Red ol Fun will set itself apart from all of its competitors
by offering not just the best quality of ice cream that the citizens of Multan city have
ever tasted but by also offering its customers a rich dine in experience by creating a
sophisticatedly designed and decorated restaurant.
Red ol Fun is targeting mostly the youth of Multan from the age group of teens and
20 to 35. The youth mostly comprise the single male and female who enjoy hanging
out in groups and for whom eating out is one of the major sources of entertainment.
As ice cream is a product that mostly individuals of all age groups prefer except the
above 70 age group; we believe that families will also be attracted to Red ol Fun.

For families, Red ol Fun will be a place where they can have some quality family
time without needing to spend a lot of money on buying a heavy meal.
Mission
The mission of Red ol Fun is to become the symbol of top quality ice cream in the
city of Multan and be the number one choice of all ice cream lovers. Our finely
decorated ice cream parlor aims to be an attraction for anyone who is looking to
spend some quality time outdoors and at the same time enjoy a sweet dessert in
the form of ice cream. Red ol Fun will not just be the place for eating ice cream but
will also be a spot for entertainment as it will offer an entire experience to its
customers. In the long term we plan to extend our business by including more
bakery items to our menu and by adding shakes, coffee and drinks as well.
However, our core product and the main specialty will always remain ice creams.
Products
Red ol Fun is offering ice cream in a variety of different flavors. These flavors will
range from the simple flavors served with no additional toppings such as vanilla,
chocolate, mango etc to more different and unique flavors such as blueberry,
cherries, mint chocolate chip and watermelon chocolate chip. We will also serve ice
cream by combining scoops of different flavors as per the customers choice.
Moreover, our ice creams will also be served with additional topics to make the
dessert more delicious, such as by serving it with cake pieces, syrup, waffles and
wafers. The customers have the choice of eating either simple ice cream or
purchasing the more fulfilling ice cream desserts.
Size of Business
Initially Red ol Fun will be a medium size business that offers an extensive range of
ice cream flavors. However, the business requires some heavy investment for start
up in the form of rent of building, equipment and interior decoration. The numbers
of employees needed are few as only three waiters are initially hired and two chefs
who specialize in making ice creams and can handle the kitchen work. One person
will be hired to work as a manager of the restaurant and to handle day to day
activities of the venture. The inflow of customers is expected to be heavy as Multan
does not yet have any ice cream parlor similar to Red ol Fun. Most ice cream
serving spots are take away; they do not offer an upscale and refreshing
environment where the customers can enjoy the ice creams. Those restaurant that
do offer ice creams such as Bundu Khan or Zanzibar focus more open the main
meals than on their dessert menu and offer only a limited flavors of ice cream.
Customers do not usually visit these restaurants to eat just ice creams.
Location

Red ol Fun will be set up in the Bomanji Square being constructed in the Bomanji
Chowk in the Cantonment Area. This particular location was chosen because it is
predicted to have a huge number of customers coming in on daily basis for
shopping. Even if customers do not spend a lot on shopping they still prefer to go to
such huge shopping malls just for window shopping and during that trip they could
easily stop at Red ol Fun for a sweet treat. Such shopping trips are always an
excuse to grab something delicious to eat along the way and Red ol Fun will be able
to cater to all customers coming in the Bomanji Square for shopping by offering
them a place to rest, eat and enjoy.

Equipment
The equipment needs majorly includes machinery for making ice creams in large
quantities and freezer space for storing that ice cream. Cutlery is also needed for
serving ice cream such as spoons and ice cream cups made of glass.
Personnel
A total of 6 employees are needed for running the venture. Three employees are
required to serve as waiters and two chefs are required for ice cream making and
decorating. One personal will be needed to act as manager and who has the skills
and expertise to successfully manage an ice cream parlor. Someone with a strong
educational and career background will be preferred for the job of a manager. The
chefs are also required to have a strong CV demonstrating their skills at ice cream
making so that they are able to make top quality ice cream.
History of the venture
Red ol Fun is being started to cater to those customers who want to eat ice cream
but would also prefer to have a proper place and environment where they could eat
and enjoy ice cream. For those who want to have ice cream they have the option of
Baba or Chaman or various other spots but what these ice cream outlets lacks is a
luxurious place where customers can relax and enjoy the surrounding environment.
Red ol Fun will fulfill this gap. Moreover, anyone who has consumed world class ice
cream for instance of Moven Pick or Baskin and Robbins would know that very few
ice cream sellers in Multan are able to touch that level of quality. Red ol Fun wishes
to provide world class quality to its customers.
Production Plan
Ice Cream Manufacture
The basic steps in the manufacturing of ice cream are generally as follows:

blending of the mix ingredients

pasteurization
homogenization
aging the mix
freezing
packaging
hardening

Blending
First the ingredients are selected based on the desired formulation and the
calculation of the recipe from the formulation and the ingredients chosen, and then
the ingredients are weighed and blended together to produce what is known as the
"ice-cream mix".
Pasteurization

The mix is then pasteurized. Pasteurization is the biological control point in the
system, designed for the destruction of pathogenic bacteria. In addition to this very
important function, pasteurization also reduces the number of spoilage organisms
such as psychrotrophs, and helps to hydrate some of the components (proteins,
stabilizers).
Homogenization
The mix is also homogenized which forms the fat emulsion by breaking down or
reducing the size of the fat globules found in milk or cream to less than 1 m. Two
stage homogenization is usually preferred for ice-cream mix. Clumping or clustering
of the fat is reduced thereby producing a thinner, more rapidly whipped mix. Meltdown is also improved. Homogenization provides the following functions in icecream manufacture:
Reduces size of fat globules
Increases surface area
Forms membrane
Makes possible the use of butter, frozen cream, etc
Ageing
The mix is then aged for at least four hours and usually overnight. This allows time
for the fat to cool down and crystallize, and for the proteins and polysaccharides to
fully hydrate. Aging provides the following functions:
Improves whipping qualities of mix and body and texture of ice-cream.
Providing time for fat crystallization
Allowing time for full protein and stabilizer hydration and a resulting slight viscosity
increase
Allowing time for membrane rearrangement and protein/emulsifier interaction, as
emulsifiers displace proteins from the fat globule surface, which allows for a
reduction in stabilization of the fat globules and enhanced partial coalescence
Freezing
Following mix processing, the mix is drawn into a flavor tank where any liquid
flavors, fruit purees, or colors are added. The mix then enters the dynamic freezing
process which both freezes a portion of the water and whips air into the frozen mix.
The barrel" freezer is a scraped-surface, tubular heat exchanger, which is jacketed
with a boiling refrigerant such as ammonia or Freon. Mix is pumped through this
freezer and is drawn off the other end in a matter of 30 seconds, (or 10 to 15

minutes in the case of batch freezers with about 50% of its water frozen. There are
rotating blades inside the barrel that keep the ice scraped off the surface of the
freezer and also dashers inside the machine which help to whip the mix and
incorporate air.
Hardening
After the particulates have been added, the ice-cream is packaged and is placed
into a blast freezer at -30 to -40 C where most of the remainder of the water is
frozen. Below about -25 C, ice-cream is stable for indefinite periods without danger
of ice crystal growth; however, above this temperature, ice crystal growth is
possible and the rate of crystal growth is dependent upon the temperature of
storage. This limits the shelf life of the ice-cream.

Life time
The most frequently occurring textural defect in ice-cream is the development of a
coarse, icy texture. Iciness is also the primary limitation to the shelf life of ice-cream
and probably also accounts for countless lost sales through customer dissatisfaction
with quality. There is no answer to the question "What is the shelf-life of ice-cream?
it depends entirely on its conditions of storage. It might be one year, or it might be
two weeks or less. Although the source of and the contributing factors to the
problem of iciness are well known, it is also one of the defects about which I am
most often asked. Processors have known for a long time how to prevent iciness and
the answer is still the same: formulate the ice-cream properly to begin with, freeze
the ice-cream quickly in a well-maintained barrel freezer, harden the ice-cream
rapidly, and avoid as much as possible temperature fluctuations during storage and
distribution. Ice crystals need to be numerous and of small, uniform size so they are
not detected when eaten. It is heat shock, large temperature fluctuations, which is
the greatest culprit to the loss of these small, uniform ice crystal size distributions
and resulting coarse, icy texture. Perhaps it is time another message was added to
the prevention of iciness and that is to educate the retailer's and the consumer
about the causes of iciness and preventative action to maintain a smooth-textured
ice-cream
Equipment Used for the Production for Ice Cream

Pasteurizer
Homogenizer
Ageing VAT
Batch freezer
Continuous Ice Cream freezer

Pasteurizer

The cost of pasteurizer is Rs. 95000/Unit.

Homogenizer

The cost of homogenizer is Rs. 85000/Unit.

Ageing VAT

The cost of ageing VAT is Rs. 150000/Unit.

Batch Freezer

The cost of batch freezer is Rs.75000/Unit.

Continuous Ice cream Freezer

The cost of continuous ice cream freezer is Rs.115000/unit.

Suppliers of Machinery
All the machinery has been purchased from Shangai Lisong Cold Machines Co.
whose distributors are based in Lahore, Hall Road.
Suppliers for ice cream ingredients
For the milk, we have a supplier from Shahrukn-e-Alam Milk Shop. He will provide
us the milk on daily basis to our employee. We will also check the quality of the
milk. Other than this another basic ingredient of ice cream is sugar, which we will
buy from a Utility store. For vegetable fat, essence, syrups, powdered milk, butter,
cream we will buy itfrom the Company FIMCO (Frozen Ice cream Manufacturing
Company)based in Karachi which also provide ingredients to Mc Donalds as well.
Operations plan
Red ol Fun operations will start from its purchase of raw material from its suppliers.
The raw material will include not just the ingredients required for making ice creams
but will also include items like napkins, table mats and new glassware from time to
time. For those items that can be stored for longer duration will be purchased in
bulk but for items like milk which perish soon, will be purchased on regular basis.
Since the location and space of Red ol Fun is not extensive enough to provide a
huge area for storage, supplies will be purchased in small quantities and when
needed. For this we will develop strong ties with our selected suppliers and a just-intime inventory system will be preferred. Close check on demand and inventory will
be needed to make sure that timely orders are placed and received.

Ice creams will be made in the kitchen of Red ol Fun. However, ingredients like cake
pieces or waffles will be purchased from our suppliers and served with ice cream.
Once made and placed in serving cups, the waiters of Red ol Fun will serve them to
the customers. The waiters are responsible for taking the orders of the customers
and serving it to them on their tables. Lastly, the waiters will collect the bill form the
customers at their tables.
When customers enter into the parlor, it is the waiters job to find them the right
table and to provide them top notch customer service. And when they leave, the
waiters are required to immediately clean the table and prep it for new customers.
For the operations of Red ol Fun, the technology requirement is first and foremost
in the equipment section as the most efficient and up to date machinery will be
needed to make good quality ice cream. The machinery also has to be big enough
to cater to the needs of all customers that come into the ice cream parlor in one day
so that ice cream does not have to be made repeatedly.
A good freezer section is also needed for storing ice cream. The freezer section
should be efficient enough to be able to maintain temperature at the required
settings in order to make sure that the ice cream does not melt or get too stiff.
A computer system with touch technology is also needed which will have the
required software installed in it. The system should help the waiters enter the order
of the customer and generate a receipt. Such software will also help the
management of Red ol Fun to track customer records, the demand and number of
customers coming into the outlet each day. It will also help in judging which ice
creams flavors are most popular.
Marketing Plan
As the old saying goes, If you dont know where youre going, you wont get there.
Just as a sailor needs to use a compass to navigate his/her way, so too must
entrepreneurs who must continually market their services to current and
prospective clients. This is particularly important in todays uncertain economy.
Marketing plan is an important part of the business plan since it describes how the
product or services will be distributed, priced, and promoted. The entrepreneur
should make every effort to prepare as comprehensive and detailed plan as possible
so that investors can be clear to what goals of the venture are and what strategies
are to be implemented to effectively achieve these goals. Marketing plan is an
annual requirement for an entrepreneur and should be regarded as the road map for
the short-term decision making. We have covered the folloeing things in the plan.
Situation Analysis
We are focusing yet only to the local market to affectively capture the local
customers. Currently we are having two direct competitors (Baba ice-cream and

Chamman Ice-cream parlors) and other restaurants are indirect competitors.

Although Bundu-Khan is offering their own manufactured ice-cream, but their core
product is not ice-cream. So, they are too our indirect competitors. There are
approximately 40-70 ice cream shops in Multan. The approximate population of
Multan is 6 million.
Trends of consumption
We have visited our direct competitors and Bundu-khan, Zanzibar and Caf Times
who are our indirect competitors. We try to gather different require information from
them. Almost 30% of the total population purchases their ice cream from the ice
cream shops. They told us that major percentage of their customers is youngsters
and families having small kids. From our competitors and from internet we have
made a profile of ice-cream consumers which somehow lies as follows:
25% are from 5-14 years of age
40% are 15-26 years of age
20% are from 26-40 years of age
15% are from 41+
Changing needs of customers
We have asked some of our class fellows and family members about what they want
to have in any ice cream parlour and they have rated quality to be on top, then
service and lastly price.
So, nowadays consumers perspective towards a product is changed. Now consumer
is more focused to factors like quality rather than the price. But still we cant by
pass the ratio of those consumers who are price conscious for all type of products or
may be their price factor is restricted to few product lines. Marketing plan of RED
OL FUN will answer to those factors which influences the consumers attitude
towards the ice cream and the strategies to change that attitude in the favorable
way as well.
The marketing strategies of RED OL FUN will be to:
Create awareness of the unique product and services at RED OL FUN
Establish RED OL FUN outlet is the # 1 choice of the consumers specifically
teenagers and office workers
Differentiate RED OL FUN outlet from the competitors through aggressive
integrated marketing plan
Size of market

There is a rough estimate that about 30% of the population purchases the ice cream
from the ice cream parlors. But our companys goal is to attract the other potential
consumers who have the purchasing power but they surpass the idea of purchasing
ice cream from the ice cream parlors. So the size of the market of RED OL FUN will
be 30% of the population at initial stage but there exists the growth opportunity
which this business will assess in the long run.
Segmentation of market
Who need our products?
Segmentation includes all those who needed our product. They are youngsters,
families, small children who are having income of 50,000 above per month. The
segmentation of the market for RED OL FUN is based on few factors like age,
income, social group and occasions.
Exact profile of our customers
Targeting includes the exact profile of our customers to whom we are going to
target in present. We are targeting the youngsters and young couples having
children. The brief description is as follows:
Age groups: Ice cream seems to be attractive for all the age groups but mostly it
targets the age group of 15-26, 26-35
Gender: Male, female
Income: Monthly income of 50000+
Social class: Upper-Upper class, Upper-Middle class and Middle-Middle class
Competitive Review
We have done the local market research and we are going to be best in two areas in
which our competitors are lacking:
First one is quality factor. We have visited the outlets and eat their ice-creams. The
quality of ice-cream is not at all good. They lack the good quality of flavours. At
baba ice-cream shop, more quantity of milk is used while there is no cream used at
all and flavours are not used in a good proportion. You feel like eating a freezed milf
somehow. The same problem is with chamman. The quality of flavours is not
adequate.
And other important thing is sitting arrangement. Youngsters especially group of
girls are not comfortable with the sitting arrangement. They usually like to take icecream and eat it in their cars.

But Red Ol Fun is bringing the concept of quality and funky outlet which is totally a
new concept in Multan.
Competitive advantages

Product quality
The concept of outlet as no other parlor is serving any better place to sit and
enjoy
Variety of products like ice cream, waffles etc
Unique flavors like blueberry, cherries, mint chocolate chip and watermelon
chocolate chip will be served
Friendly atmosphere of outlet
Funky colors and interior to attract the customers
Advertisement

Description of products (presently)

Red ol Fun is offering ice cream in a variety of different flavors. These flavors will
range from the simple flavors served with no additional toppings such as vanilla,
chocolate, mango etc to more different and unique flavors such as blueberry,
cherries, mint chocolate chip and watermelon chocolate chip. We will also serve ice
cream by combining scoops of different flavors as per the customers choice.
Future scope of products
In the long term we plan to extend our business by including more bakery items to
our menu and by adding shakes, coffee and drinks as well.
Sales goals and marketing objectives
We are having two goals regarding our venture.

Quantitative goal
Qualitative goal

Quantitative: The first one is quantitative. We are having the goal of projected sales
of R.s. 15, 00,000 in first year. We have made our projected sales very much limited
to keep us on safe side. We have estimated only 50 cups to be sold per day in the
start. But in actual there would be more sale of ice-cream.
Qualitative: The other one is qualitative. We are aiming at improving the quality of
ice-cream standard in Multan. We are also looking for adding the more visibility of
our product by making advertisement and billboards.
Brand positioning strategy
The positioning strategy of RED OL FUN will be that one trip to the outlet should
be fun and memorable. We are positioning in the minds of consumers as eating ice-

cream is fun. All communication of RED OL FUN will highlight this concept in this
tagline Where flavors come to you.
By focusing on the fun element the RED OL FUN can create a party atmosphere
which will resonate in the teenagers and college age young people. The basic
positioning of our product in the minds of consumers will be joy, fun and happiness,
so this will result in sales in the whole year.
Distribution Strategy
The distribution of ice cream will be directly from the outlet. The production will also
be at the same place through defined ingredients and equipments.

Promotion strategy
The primary goal of the promotion is to create awareness to the target market. This
is the basic and most important element of the marking plan as it includes how the
consumers will know about the product and it also answers that why consumers
should purchase your product- the features and benefits of the product. For RED OL
FUN promotion is one of the competitive advantages as there are lots of direct and
indirect competitors in the market which provide the low price ice cream to the
consumers but they have no defined mode of promotion except the word of mouth.
Paid, non-paid and non-traditional media
Redol Fun will use the paid media, non-paid media and non-traditional media for
the promotion of our brand.
Paid media
RED OL FUN promotional strategy in paid media includes the advertisement by
the means of print media initially. It includes the placement of hoardings at the
crucial places of Multan like Bosan road or near Flyover Cant to attract more and
more consumers. Besides, the other advertisement mode is hanging panaflexex in
the Cant, Gulgasht and ShahRukn-e-Alam to cater all the potential consumers from
everywhere from Multan.
Non-Paid media
In the non-paid media, we are looking forward to word of mouth and promotion in
the personal relations.
Non-Traditional Media
We are too going to make our website and page on Facebook for the promotion.
Marketing Budget

We are incurring the expenses as follows:

1. Promotional expense is of R.s. 43,000.
Billboard expenses are R.s 28,000 and we are using 100 panaflexex which is adding
a cost of R.s. 15,000.
2. There is no expense as far as distribution is concerned.
Timing of events
We have decided to rent the shops at Bomanji square as soon as the plan is
accepted. Moreover, we are going to design our billboard, panaflexex ourselves. The
design will be ready within 15 days and then well outsource the placement of
billboard and panaflexex. The time frame in which this activity will be done is two
months. Before two months, the place of billboard is not available. As we are having
all our investment, so we will start working on the interior of outlet and buying of
ice-cream production machines as soon as the plan is approved. So, at start, we will
be able to launch the outlet with all the promotional communication within three
months after the plan is accepted.
Evaluation techniques
We are going to evaluate our results by placing comment cards in the outlet.
Moreover we have a plan of conducting a survey quarterly in the start to check the
ideas and recommendations of customers.
Human Resource Plan
Human resource planning is a process that identifies current and future human
resources needs for an organization to achieve its goals. Human resources planning
should serve as a link between human resources management and the overall
strategic plan of an organization. The essence of Human Resource planning is to
ensure that the human resource requirements of an organization are identified and
plans are made for satisfying those requirements.
The HR planning of RED OL FUN includes the employees and other professional
experts. At the initial level, outlet needs 2 professional expert to make the ice cream
which is the very crucial chunk of HR planning because this is the main entity on
which firm is serving its consumers. Then the venture requires the basic
management team such as a manager, and near about 3 waiters at the initial level,
it may be increased with the increase demand of the market with respect of time. A
lawyer is also required to fulfill the legal requirements for the venture. The basic
needs of the employees will be furnished within the range of budget and employees
will also get the financial rewards and few awards like employee of the month to
motivate the employees in order to be more productive. The recruitment of
manager is very critical as the manager will be having strong interpersonal

communication and others. The total budget of the HR planning is 250,000 which is
distributed as: salary of manager and the chefs are 60,000 each and waiters will be
paid 10,000 each monthly and the lawyer will be facilitated by salary of 40,000
each.
Organizational Plan
Red ol Fun is a partnership between 6 individuals with each investing Rs 100,000 at
the beginning of the business.
The following are the partners of the business:
1.
2.
3.
4.
5.
6.

Afshan Qamar
Aroub Farooq
Saleha Ahmed
Saba Ashraf
Madiha Batool
Umair Sheikh

The terms of the agreement imply that each of the partners is required to invest Rs
100,000 at the onset of the venture. They will also be required to contribute through
expertise and skills. All six above listed partners will become shareholders of the
business and will not be allowed to sell their share of the shares to any other
individual without the consent of every other shareholder.
The board of directors will also be comprised of the above listed shareholders while
the management team will consist of one more hired individual who has a strong
background in managing restaurants. This person will be acting as manager of the
ice cream parlor and will also be accountable to the board of directors.
The above listed shareholders who will be playing an active role in running the
business are entrepreneurs who will little work experience in the line of hotel or
restaurant management. Hence for that purpose a manager is being hired.
The hired individual will be working as operations manager and will be headed by
Mr. Umair Sheikh. The operations department will be concerned with the day to day
running of the ice cream parlor and managing activities like contacting suppliers on
time, keeping check of the inventory, managing and forecasting demand, paying
employees and making sure that the venture runs smoothly.
The finance department is headed by Aroub Farooq, who will be responsible for
keeping a check on the cash flows of the business, managing and allocating
budgets, managing books of accounts, preparing financial statements and making
cash inflows forecasts. All financial analysis will be done under the finance
department.
The marketing department is headed by Afshan Qamar. All activities related to
managing and devising a strategy for the marketing of the ice cream parlor and

spreading positive word of mouth will be the responsibility of the marketing

department. This department will make sure that an effective marketing campaign
is launched for Red ol Fun.
Saba Ashraf is managing the department of human resource and will be responsible
for recruitment and hiring of skilled staff, managing the employees payroll,
providing them training and resolving any type of conflicts that may arise.
Madiha Batool is the head of the Public Relations Department and she is responsible
for creating a positive image of the venture in the eyes of the public. Any concerns
that may arise in the minds of the consumers will me immediately resolved by the
PR department. Projects categorized as corporate social responsibility will also be
handled by this department.
Lastly, the research and development department is also created to continuously
add new items to the menu after testing them for quality and taste. This
department will be headed by Saleha Ahmed.
Risk assessment
Even though ice cream is the kind of food that everyone, from kids to adults, love to
eat in the extreme summer temperatures of Multan, that still doesnt guarantee the
success of Red ol Fun. The risks that could be faced are a byproduct of a saturated
and mature market created in the ice cream industry. Although our competitive
advantage is a sitting place where ice creams are served in a welcoming
environment, but we are still competing with all those ice cream makers as well that
are selling their ice creams through retail shops and bicycles such as Walls, Yummy
and Omore. These ice cream makers continue to enjoy a large share of the market
because they are selling ice creams at a low price and making them readily
available on almost every small or big shop. Some consumers might prefer these
low cost ice creams over ours.
Secondly Red ol Fun is also competing on an equal footing with those restaurants
that target the upper middle class and the upper class with their expensive menus
such as Zanzibar and Bundu Khan. Although these restaurants serve ice creams in
only a few flavors and as a dessert, they still make a competitor of Red ol Fun. For
those individuals who go out for a complete meal would prefer to take ice cream as
dessert from the same restaurant in which they will eat their meal.
However we aim to overcome these risks by not just offering an exclusive
environment to our customers but by also compelling consumers to our parlor by
offering ice cream in a huge range of flavors that are bound to satisfy the flavor
priority of almost every ice cream eater. Multan is yet to offer an ice cream parlor
similar to Red ol Fun that focuses exclusively on ice creams and considering the
popularity of ice cream consumption in this city, we believe that Red ol Fun will be
a huge attraction for our target market.

Another possible risk that Red ol Fun could possibly face is in the form of financial
risk. The initial investment required is huge mainly due to interior decoration. The
payback period for the extensive initial investment could be long. However we do
strongly believe that this venture will be able to recover its initial investment in a
few years if it is able to create a strong appeal amongst the ice cream eaters.
We are positioning Red ol Fun on factors of high quality and environment. Quality
can only be provided to our customers if we are able to hire the best and most
professional ice cream makers in the market. We will not be able to occupy our
competitive advantage of high quality, taste and range of flavors if we fail to hire a
competent chef. Hence to overcome this risk, we need a strong human resource
search strategy. If we are not able to find a competent chef within Multan, we might
have to search on a national level as well, but to attract a chef from outside the city
we will have to offer a good pay and incentive package.
Location of Red ol Fun could also pose a risk. It is more suitable to those who are
resident in Cantt and nearby areas. It might not be very feasible for those who are
living in distant areas, for instance in Shah Rukh e Alam. To capture that
geographical market we might open a branch in another location as well but we will
only be able to do so if we strongly develop our first outlet and create a positive
worth of mouth.
The limited budget also puts some constraint on the marketing expenses that the
venture can afford at the initial stages. Ideally, the venture could use some
extensive advertising in the form of more than one billboards, advertisement and
brochures distributed through newspapers. However, the limited budget has forced
us to limit the marketing strategy to one billboard and a hundred panaflex. This
could result in lack of awareness and information to targeted customers that are
spread across the city. The only way this risk can be overcome is that as soon as our
monthly profits start increasing and we have overcome the initial investment, we
can continue the marketing campaign by using different other media options as
well.
Lastly, the inflationary pressures on the economy can also pose a threat to the
venture. Not many individuals will be able to afford our prices and might prefer
buying other cheaper ice creams available. Although we believe that our prices are
quite reasonable but if the venture is not able to attract as much customers, the
decreasing price strategy might have to be employed.
Financial Plan
Initially, a total of 21 lakh is being used as budget for startup costs and for some
expenses for the first year duration. This total investment of 21 lakhs is being
financed by each of the shareholders, bank loan, and two investors or venture
capitalists.

Each partner is investing 1 lakh into the business, totally 6 lakhs. 5 lakhs are being
contributed through bank loan and 10 lakhs are being invested by two venture
capitalists, each contributing 5 lakhs in return for a percentage of profit.
Initial expenses
The equipment or machinery needed for icecream production purposes costs a total
of Rs 520,000. One month rent for a good location in Bomanji Square on the second
floor costs Rs 35000 per month. The initial marketing expenses total Rs 43,000.
These marketing expenses include one billboard costing Rs 28,000 for one month
and 100 panaflex banners costing Rs 15,000.

Equipment = Rs 520,000
Marketing = Rs 43,000
Rent = Rs 35,000 per month
Interior decoration = Rs 500,000

Direct expenses
Almost Rs 600,000 is needed for raw materials per month.
Milk = Rs 288,000
Sugar = Rs 60,000
Rafhan Custard = Rs 60,000
Fruits = Rs 60,000
Syrups and flavors = Rs 60,000

Labor costs
The waiters will be paid Rs 10,000 per month. The manager will be paid Rs 60,000
per month and chefs will also be paid Rs 60,000 each. The lawyer will be paid Rs
40,000 per month.
Prices
A one scoop of basic ice cream flavors will cost Rs 70 and two scoops will cost Rs
130. The upscale unique flavors like mint chocolate chip or cherry flavor will cost Rs
90 for one scoop and Rs 150 for two scoops. The ice cream desserts with either
cake piece or waffles will cost Rs 250.
Projected sales

If 50 cups of one scoop of basic ice cream flavors are sold in one day, then a total of
Rs 750 will be earned in one day. Hence in one year Rs 127,75,00 (750 * 365) will be
earned. This estimate is made using the cheapest ice cream prices. Of course the
more expensive ice creams will also sell and hence revenue of Rs 1500,000 is being
estimated for the first year.
Income Statement
Sales
Cost of goods sold
Gross profit
Overhead costs
Utility bills
Rent
Labor costs
Depreciation expense
Marketing expense
Total overhead costs
Profit before interest and taxes
Interest (12%)
Net profit before tax
Tax (25%)
Net profit after tax

15,00,000
(600,000)
900,000
80,000
35,000
210,000
71,500
43,000
(439,500)
460,500
60,000
400,500
1,00,125
300,375

Balance Sheet
Assets
Current Assets
Cash
Fixed Assets
Equipment
Furniture
Less: depreciation
Total fixed assets
Liabilities
Bank loan

112,000
520,000
500,000
71,500
948,500
500,000

Total liabilities
Equity
Owners equity

620,150
600,000

Cash flow statement

Cash inflow
Cash outflow
Equipment
Interior decoration
Utility bills
Rent
Interest
Taxes
Marketing expenses
Labor costs
Total cash outflow
Net cash flow

15,00,000
520,000
500,000
80,000
35,000
60,000
1,00,125
43,000
210,000
1,548,125
(48,125)