MOMENTS

Where the fragrance says it all...

SUBMITTED BY : Zeeshan Asghar

SUBMITTED To: SIR Shabeer

SUBMISSION DATE: 29TH APRIL,2005-06-28

FLORAL SHOP IN SECTOR E-8, NAVAL

COMPLEX

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TABE OF CONTENTS
Introduction………………………………………………………..4

Executive summary………………………………………………5

Vision & mission statement………………………………..6-7

Company overview……………………………………………….8

Product plan………………………………………………………12

Marketing plan……………………………………………………13

Management plan……………………………………………….16

Operating plan……………………………………………………18

Financial plan…………………………………………………….23

Layout…………...
…………………………………………………...32

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INTRODUCTION:
NAME:

MOMENTS

BUSINESS:

FLORAL SHOP

PRODUCT:

FLOWERS

LOCATION:

5
NAVAL MARKET, E-8 MARKAZ

NAME OF THE OWNER:

Ahmed Raza Khan

ADDRESS:

F-22 SHAHJAHAN ROAD, SECTOR E-8 NAVAL COMPLEX ISLAMABAD.

PHONE NO:
0333-65601342

EXECUTIVE SUMMARY:

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This business plan is written with an idea to open up a floral shop in
the territory of Islamabad. The business I have chosen is floral
shop situated in sector E-8, naval complex, Islamabad. I believe
that the location of the shop can make or break the florist
business. The shop must be situated in an area conveniently
located for the customers.

It the shop that aims to bring a difference to Islamabad’s floral

market. It will offer all types of flowers at a very reasonable price.
Since it will be in sector E-8 and there is no any other floral shop
in this sector and also in sector E-9 and E-7 so in this way it has
got competitive edge. Strengths have been recognized to make its
opportunities productive and worthwhile. Weaknesses and threats
will be dealt with on these bases. Even if they cannot be
countered, moments will try to use its strengths and opportunities
so that it can overcome these. For example, it has strength in the
sense that its owner would be a business professional and it can
avail the opportunity that it’s located in quite a central location
and in a location where there is no any floral shop. Floral shop will
market extensively, using flyers, banners, discount coupons etc
so as to attract a lot of people. Launch would be important, as it
would be supposed to create a lot of hype. Prices will be kept
reasonable and negotiable with bigger clients.

It will know how to deal with the customers. This is a customer-

oriented business and it will be facing public all the time. Quality
would be an important part of moments. Quality and freshness
would be stressed upon. The decision regarding which sources of
supply to use would depend on quality and not so much on costs.
Employees would be provided with proper requirement. Freshness
and durability instructions would be put all around.

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 MISSION:

To provide products of superior quality and value that will leave a

pleasant and soothing effect on our customers.

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 VISION:
Moments is committed to provide product quality and service
excellence. It aims to operate around the concept of surpassing
expectations of customers by providing them the fresh and
fragrant flowers.

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COMPANY OVERVIEW:

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As I have innate artistic ability in creating wonderful floral
arrangements that’s why I consider starting a florist shop
business. Moments is a floral shop situated in E-8, naval complex
and it’s a product organization. So the type of a company is
retailing.

Flowers are a big part of people’s lives. Every occasion is celebrated

with flowers. A florist business goes beyond selling flowers. The
key element in this floral business is the knowledge and skills in
the floral design.

The firm is committed to provide quality service to its customer at

affordable price.

There would be about two employees initially who would work as a

team and will be trained and ultimately rewarded to cooperate
and work for company benefit. Moments will aim to look after
them as well as it can, providing them benefits and other
incentives. A system of internal control would be devised for
efficient and effective management.

Assets would be purchased and other sources of finance to the

business would be equity and a loan from SME Bank. A major part
of the profit would be ploughed back into the business for growth
in accordance with its vision.
The firm is committed to provide quality service to its customer at
affordable price. To ease our customer by providing them quality
service. The layout will be simple but attractive, gives an ever-
lasting impression to the customers. On both the sides there will
be arrangement of flowers and in front there would be reception
and on one side of reception there would be freezer and the other
side would be necessities to cut down the flowers.

The company’s focused on:

♦ Quality product
♦ Offered at affordable price
♦ Present with innovative ideas

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The current status of the business is start up. It still has to establish
itself in the market. It might face some problems too, but
extensive planning is being done to deal with that sort of
uncertainty and risk.

OBJECTIVES:

To develop a new strategy to enhance the image of the product into

minds of the consumers.
To serve quality features the customers.
To provide an opportunity to grow to whomever works for the business
To cater for the demands of the price and quality conscious people.
To achieve the position of a market leader and retain it.
To satisfy the needs of the customers.
To gain an edge over competition.

The location it chooses must have sufficient drive-by and walk-by

traffic. It needs to Check its budget and then try to find best
possible location that it can afford. The location of the shop can
make or break the florist business. The shop must be situated in
an area conveniently located for the customers.

Aside from cost other factors that you must consider in finding the
best location for your floral business are:

Proximity to primary customers

Availability of parking facilities
Opportunities for future expansion
Neighborhood quality
Personal convenience

The income of a floral business depends on local need, competition,

skills, and most importantly location.

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IMPORTANCE OF BUSINESS PLAN:

Every Business needs a good business plan. Business Planning is one

of the most important and sometimes most difficult challenges
that most entrepreneurs face.

A business plan is a road map of your business. It outlines where you

are, where you want to go and how you will get there.

The objectives of writing a business plan could be, to raise capital or to

understand and control you business more effectively. Most
professional companies continue to create business plans
(quarterly/annually etc.) throughout the life of the business. The
process of creating a business plan gives you great insight into
the financial viability of your business besides setting a timetable
for your operations.

ESSENCE OF A FLORAL SHOP:

As a florist (floral designer or flower shop owner), you will be

surrounded by beauty every day and have a career that is fun and
interesting. You will have a hands-on job that gives you a sense
of satisfaction with the results of your work. If you start your own
florist business you can enjoy the freedom and financial rewards
of being your own boss.

As a florist you will be involved with some of the most significant

moments in people’s lives. From birthdays to bar mitzvahs to just
because, florists help people show they care.
No matter what the occasion, there are flowers to go with it.
The flower business is more than arranging flowers. You need to know
how business runs from buying, selling, keeping records, planning
profits, managing costs, and attracting customers. You need to
balance the creative side of the florist business with the business
management side.

A pleasant personality is must. Repeat business normally accounts for

a high percentage of florist sales, so it is imperative that you
know how to cultivate customer relationship.

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PRODUCT PLAN:
The product of moments mainly includes flowers and in flowers it got
bouquet, bunch, flower basket, and buds. It gives the option to
customer whether to have bunch, bouquet, or make arrangement
of flowers by their own choice.
Flowers are a big part of people’s lives. Every occasion is celebrated
with flowers. A florist business goes beyond selling flowers. The
key element in the floral business is the knowledge and skills in
the floral design.

People will buy flowers to:

Express love with an elegant box of long-stemmed roses for

Valentine’s Day
Welcome a new baby into the world with arrangements of delicate pink
and blue flowers
Honor mom with a beautiful bouquet on Mother's Day
Celebrate a wedding with custom-designed bouquets and other flowers
Enjoy holiday occasions with items such as poinsettia plants and pine
wreaths at Christmas
Brighten someone's stay in a hospital
Add the perfect touch to parties and other events
Remember loved ones with beautiful floral funeral tributes

Preparing for Your Florist Career

Essential skills for florists and how to develop them

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Educational programs for florists (no degree or certificate is required)
Ways to teach yourself floral design
Information about dozens of the most commonly used flowers, greens
and household plants you need to know, with:
Description
A list of tools, equipment and supplies you'll need in your flower shop,
and where to get them.
Setting up your flower shop (including how to create displays to
promote sales)
How to find and work with growers and wholesalers that can supply
you with flowers
Managing your flower shop
Setting your prices
Hiring employees
How to organize the day's orders
What to do when a shipment of flowers arrives
Options for delivering flowers to customers

The material you will need for florist services include:

A store or sales location

A refrigeration system
Flowers
Plants
Floral suppliers

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MARKETING PLAN:
The societal marketing holds that the organization should determine
the needs, wants and interests of the target market. It should
even deliver superior value to the customers in a way that
maintains or improves the customers well being. Moments target
market will be the people who have got the strong emotions and
feelings and who try to show there and express their feeling in-
terms of flowers. However, special emphasis will be lid on the
youth, while planning and implementing the marketing strategy.
The target market of moments will be E-8, E-9 and F-8. This is
because there is no floral shop in these sectors, except in F-8,
which is also not on big scale. Thus the firm is targeting the mass
market i.e. people form all age groups and any income level will
include in a firm target market.
As it will be only shop in sector E-8, which is a full fledge market and
people do come there very frequently for shopping. And even in
sector E-9 and sector E-7 there is no any floral shop also in sector
F-8 the shop there exist is on very small scale. So in this way
floral shop in sector E-8 has got competitive edge. At the same
time the pricing strategies would be a competitive advantage as
the customers can have the flowers at a very reasonable rate
within an easy approach.
The flowers will be brought from the main head of flowers where the
employees go and collect them in huge amount. The reason for
this is that in Islamabad there is no as such proper place for
getting flowers. There is only one place where we can get flowers,
sihala end even there, there is no any variety of flowers.
Therefore I would like to prefer to bring up flowers from:

Patooki
chakree

Profile of the average customers to moments

Income group above RS 20000.

Residing in or around E- 8.
Quality conscious.
Who love fresh flower
People with strong emotions and deep feelings
Who cant express through words but through flowers

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COMPETITOR:

The major competitor of moments includes the flower shop of F-8. The
reason behind is that there is no flower shop in E-8, E-9. Also the
shop in F-8 is not exactly a good shop. But as far as F-7 sector is
concerned, obviously it will face a competition.

MARKETING STRATEGY: 4PS

PRODUCT AND PLACE:

The mainly product offered by moments would be purely related with

flowers. It includes all the arrangements of flowers like making
bouquet, arranging buds, cutting flowers, making bunch and
flower baskets.

Place would be E-8 Markaz. There is a big parking lot and good enough
road, plus it is a commercial area. All these advantages summed
up mean that the place is good and all that moments has to do is
exploit it to its advantage. Also the site of shop is in the best
location as it’s the corner shop so the approach of the shop is
very easy and accessible.

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PROMOTION:

Flyers and brochures will, play an important role for boosting up the
sales of flowers. Print media would be used extensively. Flyers
and advertisements in the newspapers would be a weekly feature,
especially every time a new item is introduced. Other than that,
there would be buy one get one offer in the very start. However,
in the first month there would be special discount on every type of
flowers. . These would help in attracting customers, especially
younger ones.

Terms and conditions could be altered to suit their needs at flexible

rates. They would be provided menus so that they can call
whenever they want, and order any item.

PRICE:
Historically price has been the major factor affecting buyer choice.
Basically price is the amount of money charged for a product or
services or the sum of values that consumer’s exchange for the
benefits of having or using the product and services.

Price is the only element in the marketing mix that produces revenues,
all other elements represents costs. I will have to ensure that the
price of my flowers is not cost oriented rather customer oriented.

As low price make the customer loyal. I will prefer to set my price low
to prevent more competitors from entering the market. Price is
going to be the only marketing tool that we’ll use to attain our
marketing objectives. The price decisions would have to be
coordinated with product design, distribution, and promotion
decisions to form a consistent and effective marketing program.
The decisions made for other marketing variable may affect
pricing decisions.

We will support our price positioning strategies with a concept known

as target costing. In this case we started out by deciding that our
product’s price lower than that of our competitors.

Prices would be somewhat based on cost basis, but mostly it would be

based on what the competitors are charging.

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19
MANAGEMENT PLAN:
The objective of management system is to provide solutions for all
technology-related services.

In order to manage the operations and to run a business, a firm needs

a trained and appropriate human resource. The employees
needed for moments will be two. One will purely deal with
customers and the other will be responsible for arranging flowers
and decor setup for the people who will like to make flower
bouquet bunch or basket by their own choice. And third person
would be me my self who monitors all the activities of the firm.
The employees will be responsible to control, manage and look
after all the aspects of the industry. And keep records of day-to-
day operations.

Functions include:

Record of day to day transaction

Maintenance (e.g. start/end of day activities, report printing, back ups,
etc)
Communication within organization
Telephone services
Serving customers in the best possible way
Concerned with any innovative item in the shop

The management system is responsible for all application development

within moments. It develops customized solutions for all the
various business areas within the organization; this leads to
improve productivity and better process management.

The management plan would be a fairly flexible aspect of the business.

Policies would be altered to suit environments. However, the
owner, I will do most of the planning and decision-making. The
owner’s degree in Business Administration, supplemented by
organizational experiences will provide for the lack of prior
experience of starting a business. Furthermore, for effective
management and effective opportunities, business consultants will
be approached.

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All the employees would be required to work with the consideration
that competence and contribution as the basis for job security.
Appreciation and incentives would come along fairly frequently.
Listening and two-way interaction would be important.
Furthermore, cooperation, support, teamwork, integrity, dignity
and respect would regulate behavior patterns.

RECRUITMENT:

Hiring would be mostly reference based. A minimum education level

would be required. Proper job descriptions and qualifications
would be written down, and a proper document bearing all the
details signed. For example, the following are a list of basic
qualifications for all the jobs in moments.

Essential skills and abilities

Managing flower efficiently and effectively
Have enough Information regarding every type of flowers
Pleasant personality
Have a strong sense of creativity.

Other qualifying factors would be no criminal record, sense of

responsibility, team worker, obedience and willingness to learn
will also be observed.

TRAINING:

Initially, orientation would be important a little overview about the

company and its mission and setting down the basic principles of
work. Some training would also be given as regards the manners
of serving and behaving in the presence of customers. Also, in
less busy days, like in June and July employees can be given
training, not with the objective of replacing the present employee
but allowing other workers to understand the work and be able to
assist them effectively whenever possible.

MOTIVATION:

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As motivation is an important aspect in order to boost up your
company. The HR at moments would not only be recruited and
trained, but would also be motivated to perform its best. One way
would be to provide employee benefits and incentives, which at
times do not motivate much but certainly they are a guard
against de-motivation. Moments would have an employee of the
month, based on the contribution by any worker, the cooperation
effort and good behavior for the general good of the business.
Another, motivation technique would be a reward-based
technique, whereby good performers would given a limited
amount of profit sharing rights for the month.

OPERATING PLAN:

LOCATION & LAYOUT:

Moments will be open between 11AM to 11 PM, 7 days a week.

Located in E-8 Markaz in naval market, with quite a spacious
parking lot. The location is good as it is near a residential as well
as a commercial area. The location can ensure its sale. Plus, the
approach of its location is very easy and approachable.

From the outside, moments will give a very traditional and simple look,
done mostly in clay. Since it will have no seating arrangement
inside as such, the inside will be kept simple, modern, and
complete with supporting facilities.

Moments will have freezers, work counters, shelves, salafeen paper,

packing etc all placed so as to ensure free movement, safety of
workers and healthy arrangement of flowers. The set up of
moments shows the entire important features the customer can
look for so that it make them easy to have what exactly they
want or depending on the demand for each product by the
customer.

The materials you will need for florist services include:

A store or sales location

A refrigeration system
Flowers

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Plants
Floral suppliers
Secondary products you want to sell.
Packing
Salafeen paper, silver and printed sheets
Greenery
Tape
Ribbons
Fence
Glitters
Chairs
Fans
Tube lights
Telephone

INTERNAL CONTROL:

A proper system would be maintained and some form of internal

control. All kinds of receipts, invoices, memos etc would be
recorded. Entries would have to be recorded so as to keep
accounts and books up-to-date. The inventory control system
would be maintained efficiently and effectively.

HUMAN RESOURCE:

The objective of the human resource management is to identify,

recognize and develop human potentials. To provide equal
opportunities to each employee to work competitively and to
create an environment where each individual is motivated to
contribute to the progress of the organization.
Its functions include:

Recruitment
Performance appraisals
Staff benefits and compensation
Training and development

MARKETING RESEARCH:

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The objective of conducting marketing research is to find out the
needs of the consumers for identifying product opportunities,
developing strategies and taking business initiatives.
The marketing research shows that there exist a good enough scope
for a floral shop to run successfully in sector E-8 as there is no
any flower shop in this sector. Also there is no any shop in E-9
and E-7. Also the shop in F-8 is not that proper shop and not on a
big scale. Its function includes researching whether product will
fail or run in the market according to needs and demands of the
customers.

Other functions include:

Idea generation for new product development

Volume forecasting / gathering data from various sources to produce
volume forecasts on which critical decisions are made.
Data analysis and interpretation.

It is essential to keep ever-changing of customer need, wants and

desires in mind and for this purpose I continue to use my
research in the best possible way to satisfy them. The marketing
research allows us where to generate new and innovative ideas
for the improvement in the flower arrangement.

LEGAL FORM OF ORGANIZATION:

Legal form of organization would be proprietorship. I will prefer doing

business on the basis of sole proprietorship. As small business can
done very well, if its run on proprietorship base. The legal form of
the business will be that of a sole proprietorship where all
decision-making will be by the owner and all profits and losses will
be borne by the owner.

RISKS:

No doubt risk is a close part of almost every type of business. The

current status of the business is start up. It still has to establish
itself in the market. It might face some problems too, but
extensive planning is being done to deal with that sort of
uncertainty and risk.
In my business of a floral shop there can be risk include like:

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Unforeseen risk:
For the unforeseen events there is a risk for
my business. As in summers due to sunny days the flowers can
went dead. In summers the life of flowers become very short. The
flowers, which will be left couldn’t sell on the next day.

Economical risk:
Economical risk is there, as due to inflation,
rent can increase, transportation cost can increase, and also it can
effect on cost of flowers, which eventually decrease the sales and
lowers the profit overall.

Competition risk:
As there definitely a great risk of competition
would be there. The location of my business is in E-8, where there
is no flower shop. But within a year may be another competitor
will come.

CREDIT POLICY:

There would be no credit policy as everything will be sold on cash basis

and will be given on the spot. The credit policy of the business
would be clean. As the nature of my business don’t let me to
collect collateral from the customers. Customers don’t need to
pledge any type of collateral. And there would be no written
agreement between he customers and the sellers in my type of
business.

PURCHASES AND INVENTORY:

There will be purchases of flowers on alternative basis. In normal

routine Like one of the employees will be responsible for going to
patooki and buy stock of flowers from there. He will buy flowers
for two days so that he will again go after next day. Then from
patooki he will brings flowers for two good days. In case of special
occasions and in winters he can bring flower from chakree, which
is on the Peshawar road, to meet the excessive demand of the
customers. Like on valentine’s on both the EIDS, on Christmas,
mother day occasions like that there would be more demand of
flowers so in order to meet that demand employee will prefer to
go to chakree and buy from there.

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Or the other way would be that in winter season and on special
occasion employee buy flowers more than its normal routine from
pakooti and then have a stock of these flowers in advance. So
there is a inventory control system which maintain the life of a
flowers. The stock of flowers is very important aspect as in
winters and on special occasion the price of flowers would
increase. So it would be beneficial to buy flowers in advance and
get them stock so that it wouldn’t face the difficulty of meeting
the demand of flowers and earning the sufficient money.

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SALES FORCE:

There would be two employees who will work for the shop. On of the
employee will be purely responsible for bringing flowers form
patooki, and may be sometimes form chakree. Then after bringing
flowers he will need to maintain the inventory control system like
when there is a need to bring flowers again, where and how to
store them properly, how to face the need of excessive demand,
when to purchase for two days, or when for the week, accordance
with earning profits. The other employee will deal with customers
only. He will be responsible to stay in the shop to deal with
customers, accept their orders, and make bouquet for them, in
the form of bunch, or basket and all that stuff regarding satisfying
the customers.
Another person would be me my self who will keep check and balance
on these employees and who is responsible for an overall
efficiency and effectiveness of the shop. I will be keep check and
balance in an overall way like whether employees are doing well,
demands of customers are fulfilling, inventory system is efficient.

One employee would be:

Responsible for bringing flowers form pakooti when not to purchase,
when buy in stocks but in
Make purchases from pakooti
Managing the life of flowers

Other employee who will be in the shop will:

Take payments
Take orders from customers
Deal with customers’ concerns
Serve customers

Me my self, will ensure that all employees are performing their duties,
abiding by the timings and the contract. Ensure that instructions
for quality management are being followed.

SEASONAL VARIATIONS:

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In my type of business plan there would definitely be seasonal
variations, as the sales of flowers will mainly depend on seasons
like in winter no doubt the sales would increase but in summers
the sales would go down. So in winters the prices of flowers will
go up but in summers the price will decrease. The sales will
increase in the months of December, January, and February, and
sales will go down in May, June and July. In the rest of the
months the sales will remain stable.

FINANCIAL PLAN

STATEMENT OF ASSETS:

Cash RS.720,000
Prepaid rent 18,000
Freezer 4,000
Furniture and fixtures 8,000
Inventory 45,000
Accessories 5,000

OPEN DAY BALANCE SHEET:

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ASSETS AMOUNT LIABLITIE
S +
EQUIT
Y
CASH NOTE 1 720,000 DEBT 4,00,000
PREPAID RENT NOTE 2 18,000 SME LOAN
FURNITURE NOTE3 8,000
AND
FIXTURES
INVENTORY NOTE 4 45,000 EQITY
FREEZER 4,000 MASOOMA’S 4,00,000
CAPITA
L
ACCESSORIES 5,000

TOTAL 8,00,000 8,00,000

NOTE 1:
CASH IN HAND AT FIRST DAY RS. 720,000

NOTE 2:

PREPAID RENT Rs.18000

FOR ONE MONTH 1500
(1500 *12)

NOTE 3:
FURNITURE AND FIXTURES: 8,000
FURNITURE : 6000
TWO CHAIRS 1000
TWO FANS 2500
TWO TUBE LIGHTS 500
TELEPHONE 2000
FIXTURES: 2000

NOTE 4: 45,000
INVENTORY
STOCK FOR ONE DAY WORTH 1500
(1500*30)

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END DAY BALANCE SHEET:

ASSETS AMOUNT LIABLITIES

+
EQUITY
CASH NOTE 5 1440000 NOTE 9 2,64,000
DEBT
SME LOAN
PREPAID RENT NOTE 6 24000
FURNITURE NOTE 7 10000
AND
FIXTURES
INVENTORY SAME 45000 EQITY
FREEZER 4000 MASOOMA’S 7,68,000
CAPITAL
ACCESSORIES NOTE 8 5000 RETAINED 4,96,000
EARNING

TOTAL 1,528,000 1,528,000

NOTE 5:
AT THE END OF YEAR CASH RECEIPT WILL BE
FLOWER BOUQUET OR BASKET (20*100) = 2000
ONLY FLOWERS =2000
TOTAL = 4000
CASH RECEIVED DURING THE WHOLE YEAR (4000*360)=1440,000

NOTE 6:
PREPAID RENT RS. 24000
(2000*12)

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NOTE 7:
ADDITION IN FURNITURE AND FIXTURES 2,000

NOTE 8: 5,000
ACCESSORIES INCLUDE:
FLOWER SILVER AND PRINTED PAPER
TAPE
RIBBONS
BUDS
SALAFEEN PAPER

NOTE9:
DEBT: 2,64,000
DEBT – INTEREST EXPENSE
(400000-56000)=344000
DEBT –LOAN INSTALLMENT
(344000-80,000)=2,64,000

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PROJECTED INCOME STATEMENT FOR THE YEAR END:

AMOUNT
SALES NOTE 1 1,260,000
- COST OF SALES NOTE 2 5,40,000
GROSS PROFIT 7,20,000

LESS OTHER
EXPENSES
SALARIES EXPENSE NOTE 3 72000
RENT EXPENCE (2000 *12) 24000
MAINTAINCE (1000*12) 12000
EXPENCE
TELEPHONE EXPENSE (1500*12) 18000
ELECTRICITY (1000*12) 12000
EXPENCE
ADVERTISING 10000
EXPENSE
LOAN INSTALLMENTS NOTE 4 80,000
TRANSPORTATION (1000 * 12) 12000
EXPENSE
EARNING BEFORE 552000
INCOME TAXES EBIT
LESS INTEREST NOTE 5 56000
EXPENSE
NET PROFIT RS. 4,96,000

THE AMOUNT 4,04,000 WILL GO TO REATINED EARNING AT THE

YEAR-END BALANCE SHEET.

NOTE 1:
SALES RS.1260000
AVERAGE DAILY SALES
(3500*360)

NOTE 2:

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AVERAGE COST OF FLOWER 5,40,000
(1500*360)

NOTE 3:
SALARIES EXPENSE: RS.72000
SALARY OF ONE EMPLOYEE: 3000
(3000*2) 6000
(6000*12) FOR THE WHOLE YEAR

NOTE 4:

INSTALLMENTS 145000
DEBT AMOUNT 400,000/5
=80,000

NOTE 5

INTERSET PAYABLE 56000

DEBT AMOUNT=400,000
SME LOAN INTEREST=14%
14% OF 400,000
=56000

BREAK-EVEN:
FOR A MONTH

FIXED COSTS:

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RENT RS. 2000
SALARIES PAYABLE 6000
TELEPHONE BILL 1500
ELECTRICITY BILL 1000
TRANSPORTATION COSTS 1000
MAINTENANCE COSTS 1000
ACCESSORIES 5000

TOTAL 17,500

VARIABLE COSTS:

COST OF FLOWER 1500

INVENTORY 3750
(45000/12)

TOTAL 5,750

PRICE OR SALES: 45,000

(3000*15)

BREAKEVEN FORMULA:

FIXED COST

PRICE-VARIABLE COST

17500
=
45000-5750

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 17500
=
39250

=0.44

=OR 44.58%

CASH FLOWS STATEMENT:

INFLOWS:

CASH RECEIPT RS.1260000

AS NO SALE ON CREDIT THEREFORE
NO ACCOUNT RECEIVABLES

TOTAL INFLOWS 1,260,000

OUT FLOWS:

SALARIES PAYABLE 72,000

SALARY OF ONE EMPLOYEE: 3000
(3000*2) 6000
(6000*12) FOR THE WHOLE YEAR

COST OF FLOWERS
AVERAGE COST OF FLOWER 5,40,000
(1500*360)

ELECTRICITY BILL 12000

(1000*12)

TELEPHONE BILL 18000

(1500*12)

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INSTALLMET PAYMENTS 80,000
(400,000/5)

INTEREST EXPENSE 56000

(14% OF 4,00,000)

TARNPORTAION PAYMENT 12,000

(1000*12)

MAINTAINCE COST 12000

(1000*12)

RENT PAYABLE 24,000

(2000*12)

ADVERTISING 10,000

TOTAL OUTFLOWS 8,36,000

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