Entrepreneurship and SME Management

Final Project:

Participants:

Name Roll Number

Muhammad Ali Haider 0948-BH-BAF-19
Usman Qayyum 0932-BH-BAF-19
Anees Ahmed 0964-BH-BAF-19

Course Code: BAF-4209

Semester: 8th

Section: Morning

Name of the Business plan: AQA Sports Shop

Submitted To: Sir Waqar Ashraf

 Executive Summary:

The sports industry in Lahore, Pakistan is growing at a fast pace, with an increasing number of
people participating in various sports activities. To cater to this growing demand, we are launching a
sports shop in Lahore, Pakistan that will offer a wide range of sports equipment and accessories.

Our sports shop will be located in a prime location in Lahore, easily accessible to sports enthusiasts
from all parts of the city. We will stock a variety of sports equipment and accessories, including but
not limited to cricket bats, footballs, basketballs, tennis rackets, badminton rackets, and gym
equipment.

Our shop will differentiate itself from the competition by offering a personalized shopping
experience to our customers. We will have knowledgeable staff on hand to assist customers in
selecting the right sports equipment for their needs. Additionally, we will offer customization
services such as customizing cricket bats with personalized names and logos.

To promote our sports shop, we will use a variety of marketing channels, including social media
advertising, influencer marketing, and local sports events sponsorship. Our pricing strategy will be
competitive, offering high-quality sports equipment and accessories at affordable prices.

In conclusion, we believe that our sports shop will be a valuable addition to the sports industry in
Lahore, Pakistan. With our personalized approach to customer service and competitive pricing
strategy, we are confident that we will attract a loyal customer base and become a leading player in
the sports equipment market.

Chapter: 1

Introduction:

Welcome to our sports shop, the one-stop destination for all your sports equipment needs in Lahore,
Pakistan. Our shop is founded with a vision to provide high-quality sports equipment and accessories
to sports enthusiasts at affordable prices. We understand that sports have a significant impact on an
individual's physical and mental well-being, and we are committed to making sports accessible to
everyone in Lahore.

At our sports shop, we offer a diverse range of sports equipment and accessories, including cricket
bats, footballs, basketballs, tennis rackets, badminton rackets, gym equipment, and more. Our
products are sourced from some of the most reputable brands in the industry, ensuring the highest
quality and durability.
We take pride in providing our customers with a personalized shopping experience, where our
knowledgeable staff will assist you in selecting the right sports equipment for your needs. Whether
you are a beginner or a professional athlete, we have something for everyone.

Furthermore, we understand that every customer has different preferences and requirements,
which is why we offer customization services such as personalizing cricket bats with names and
logos. We believe that such personalized services add value to our customers' shopping experience
and sets us apart from our competitors.

Our sports shop is located in a prime location in Lahore, easily accessible to sports enthusiasts from
all parts of the city. We are open seven days a week, ensuring that you never miss out on your
favorite sports equipment and accessories.

In conclusion, we are passionate about sports and believe that it plays a vital role in promoting a
healthy lifestyle. We are committed to providing our customers with the best sports equipment and
accessories at affordable prices. We invite you to visit our sports shop and experience our
personalized approach to customer service.

Background:

The sports industry in Lahore, Pakistan, has seen significant growth in recent years, with an
increasing number of people participating in various sports activities. From cricket to football to
badminton, sports have become an essential part of daily life for many individuals in Lahore. With
the rise of social media and increased awareness of the benefits of sports, the demand for high-
quality sports equipment and accessories has also increased.

However, despite the growing demand, the sports equipment market in Lahore is highly fragmented,
with a limited number of organized retail outlets offering a wide range of sports equipment and
accessories. Many of the existing shops are small, with limited product offerings, making it
challenging for customers to find what they need.

This gap in the market presents an excellent opportunity for a sports shop that can offer a diverse
range of sports equipment and accessories and provide a personalized shopping experience to its
customers. This is where our sports shop comes in. We aim to fill this gap by offering high-quality
sports equipment and accessories at affordable prices and providing a personalized shopping
experience to our customers.

Our sports shop has been founded by a team of sports enthusiasts who understand the importance
of sports in promoting a healthy lifestyle. We are passionate about sports and believe that everyone
should have access to high-quality sports equipment and accessories. With our experience and
expertise in the sports industry, we are confident that our sports shop will become a leading player
in the sports equipment market in Lahore, Pakistan.

Motivation & Challenges:

Motivation:

Our motivation for starting a sports shop in Lahore, Pakistan, stems from our passion for sports and
the desire to provide high-quality sports equipment and accessories to sports enthusiasts at
affordable prices. We believe that sports have a positive impact on an individual's physical and
mental well-being and should be accessible to everyone.

We are motivated to provide a personalized shopping experience to our customers, where they can
find the right sports equipment for their needs and preferences. We understand that every customer
has different requirements, and we are committed to providing a tailored shopping experience to
each of our customers.

Furthermore, we are motivated to make a positive contribution to the sports industry in Lahore,
Pakistan. By offering a diverse range of sports equipment and accessories, we aim to promote sports
and encourage more individuals to participate in various sports activities.

Challenges:

Starting a sports shop in Lahore, Pakistan, also comes with its fair share of challenges. Some of the
challenges we anticipate include:

1. Competition: The sports equipment market in Lahore is highly fragmented, with many
existing shops offering a limited range of products. To stand out from the competition, we
need to differentiate ourselves by offering unique products and services.
2. Supply Chain Management: Sourcing high-quality sports equipment and accessories can be
challenging, especially from reputable brands. We need to establish strong relationships
with our suppliers and ensure that we have a robust supply chain management system in
place to ensure that we always have the products our customers need.
3. Marketing: As a new player in the sports equipment market, we need to establish brand
awareness and attract customers to our shop. We need to develop a robust marketing
strategy that will effectively reach our target audience and differentiate ourselves from our
competitors.
4. Economic Instability: The economic instability in Pakistan can impact our business
operations, including the supply chain, pricing, and demand for our products. We need to
monitor the economic situation and adapt our strategies accordingly.

Despite these challenges, we are confident in our ability to overcome them and provide high-quality
sports equipment and accessories to sports enthusiasts in Lahore, Pakistan. We are committed to
providing a personalized shopping experience and making a positive contribution to the sports
industry in Lahore.

Goals & Objectives:

Our sports shop in Lahore, Pakistan, has the following goals and objectives:

1. Provide high-quality sports equipment and accessories: Our primary goal is to provide sports
enthusiasts in Lahore, Pakistan, with high-quality sports equipment and accessories that
meet their needs and preferences.
 2. Offer a diverse range of products: We aim to offer a diverse range of sports equipment and
accessories that cover a wide range of sports activities, from cricket to football to badminton
and more.
3. Provide a personalized shopping experience: We are committed to providing a personalized
shopping experience to our customers, where our knowledgeable staff will assist them in
selecting the right sports equipment for their needs.
4. Establish a strong brand presence: We aim to establish a strong brand presence in Lahore,
Pakistan, and become a leading player in the sports equipment market.
5. Promote sports and healthy lifestyles: We believe that sports play a vital role in promoting a
healthy lifestyle, and we aim to promote sports and encourage more individuals to
participate in various sports activities.
6. Expand our customer base: We aim to expand our customer base by attracting new
customers and retaining existing ones through exceptional customer service and high-quality
products.
7. Increase revenue and profitability: We aim to increase our revenue and profitability by
achieving a sustainable growth rate and optimizing our cost structure.

To achieve these goals and objectives, we will focus on providing high-quality products and services,
establishing strong relationships with our suppliers, developing a robust marketing strategy, and
continuously improving our operations and customer service. We will regularly review our progress
and adapt our strategies accordingly to ensure that we meet our goals and objectives.

Gap Analysis:

Current State:

 Our sports shop offers a limited range of sports equipment and accessories.
 The customer service experience could be improved, and customers may not always receive
personalized attention or assistance when selecting products.
 Our brand is not well-known in the market, and we have limited brand awareness and
customer base.
 Our marketing strategy needs to be more effective in reaching our target audience and
differentiating ourselves from our competitors.
 Our supply chain management process needs improvement, and we may experience
challenges in sourcing high-quality sports equipment and accessories.

Desired State:

 Our sports shop will offer a diverse range of high-quality sports equipment and accessories
to meet the needs and preferences of sports enthusiasts in Lahore, Pakistan.
 We will provide a personalized shopping experience to our customers, where our
knowledgeable staff will assist them in selecting the right sports equipment for their needs.
 Our brand will be well-known in the market, and we will have a strong brand presence in
Lahore, Pakistan.
 Our marketing strategy will effectively reach our target audience and differentiate ourselves
from our competitors.
  Our supply chain management process will be optimized, and we will establish strong
relationships with our suppliers to ensure a steady supply of high-quality sports equipment
and accessories.

Gap Analysis:

1. Product Range: The current state has a limited range of products, while the desired state is
to offer a diverse range of high-quality products. We need to expand our product range by
sourcing products from more suppliers and stocking more variety of products.
2. Customer Service: The current state lacks personalized attention, while the desired state is
to provide a personalized shopping experience to our customers. We need to train our staff
to provide better customer service, actively engage with customers, and offer guidance and
support when selecting products.
3. Brand Awareness: The current state has limited brand awareness, while the desired state is
to have a strong brand presence in the market. We need to develop a comprehensive
marketing strategy that includes advertising, social media, and promotions to build brand
awareness and attract new customers.
4. Marketing Strategy: The current state has an ineffective marketing strategy, while the
desired state is to differentiate ourselves from our competitors. We need to refine our
marketing strategy to effectively communicate our unique selling points and highlight our
competitive advantages.
5. Supply Chain Management: The current state has supply chain management challenges,
while the desired state is to have a steady supply of high-quality products. We need to
optimize our supply chain management process, establish strong relationships with our
suppliers, and explore alternative sourcing options.

By addressing these gaps, we can move towards our desired state and achieve our goals and
objectives for our sports shop in Lahore, Pakistan.

Proposed Solution:

To address the gaps identified in our gap analysis, we propose the following solutions:

1. Expand our product range: We will expand our product range by sourcing products from
more suppliers and stocking a wider variety of products to meet the diverse needs of sports
enthusiasts in Lahore, Pakistan.
2. Improve customer service: We will train our staff to provide better customer service, actively
engage with customers, and offer guidance and support when selecting products. We will
also implement a feedback system to continuously improve our customer service.
3. Enhance brand awareness: We will develop a comprehensive marketing strategy that
includes advertising, social media, and promotions to build brand awareness and attract new
customers. We will also participate in sports events and sponsor local teams to increase our
visibility in the market.
4. Refine our marketing strategy: We will refine our marketing strategy to effectively
communicate our unique selling points and highlight our competitive advantages. We will
also conduct market research to better understand the needs and preferences of our target
audience and tailor our marketing messages accordingly.
 5. Optimize supply chain management: We will optimize our supply chain management process
by establishing strong relationships with our suppliers, exploring alternative sourcing
options, and implementing a quality control system to ensure that we only source high-
quality sports equipment and accessories.

By implementing these solutions, we will be able to provide a diverse range of high-quality sports
equipment and accessories, offer a personalized shopping experience to our customers, establish a
strong brand presence in Lahore, Pakistan, and attract new customers while retaining existing ones.
Additionally, by optimizing our supply chain management process and refining our marketing
strategy, we will increase our revenue and profitability, achieve a sustainable growth rate, and
become a leading player in the sports equipment market in Lahore, Pakistan.

Project Plan:

Phase 1: Research and Planning

 Conduct market research to better understand the needs and preferences of our target
audience
 Develop a comprehensive marketing strategy that includes advertising, social media, and
promotions
 Define project scope and objectives
 Establish project team and allocate resources
 Develop project timeline and budget

Phase 2: Product Range Expansion

 Identify and source products from more suppliers

 Stock a wider variety of products to meet the diverse needs of sports enthusiasts
 Implement a quality control system to ensure that we only source high-quality sports
equipment and accessories

Phase 3: Customer Service Improvement

 Train our staff to provide better customer service

 Implement a feedback system to continuously improve our customer service
 Install new equipment and technologies to enhance the shopping experience

Phase 4: Brand Awareness Enhancement

 Launch advertising campaigns and promotions to build brand awareness

 Establish a strong social media presence and interact with customers online
 Participate in sports events and sponsor local teams to increase our visibility in the market

Phase 5: Marketing Strategy Refinement

 Refine our marketing strategy to effectively communicate our unique selling points
 Conduct A/B testing and adjust marketing messages accordingly
 Continuously analyze and optimize our marketing campaigns
Phase 6: Supply Chain Management Optimization

 Establish strong relationships with our suppliers

 Explore alternative sourcing options
 Implement a quality control system to ensure that we only source high-quality sports
equipment and accessories

Phase 7: Monitoring and Evaluation

 Monitor project progress and evaluate the effectiveness of our solutions

 Make necessary adjustments to ensure project success and achieve desired outcomes

By following this project plan, we will be able to implement the solutions identified in our gap
analysis and proposed solution, improve our product range, customer service, brand awareness,
marketing strategy, and supply chain management process, and achieve our goals and objectives for
our sports shop in Lahore, Pakistan.

Roles and Responsibility Matrix:

This sports shop is going to be a startup business conducted by three students who are friends. The
responsibilities would be equally divided for each individual and the each individual’s role towards
the business would be to ensure growth, prosperity and making profit.

Hence the roles and responsibility matrix is drafted below:

Roles: Responsibility:
Founders Oversee overall business operations and growth
Marketing Manager Develop and execute marketing strategies and
campaigns
Sales Manager Oversee sales operations and customer service
Product Manager Source and manage inventory
Finance Manager Manage financial planning and budgeting
Operations Manager Oversee day-to-day operations of the business
Customer Service Manager Handle customer inquiries and complaints
Social Media Coordinator Manage the business's social media presence
Website Developer Develop and maintain the business website
Store Manager Oversee the physical store and its employees
Human Resource Manager Manage recruitment, training, and employee
relations

It is important to note that as startup founders; the three university friends may wear multiple hats
and take on multiple roles in the early stages of the business. As the business grows, they can then
delegate responsibilities and hire additional staff to manage specific functions. It is also important to
regularly reassess the roles and responsibilities matrix to ensure that it aligns with the needs of the
business and its goals.

Chapter 2: Business Analysis

Company Profile:
Our sports shop is a newly established retail store located in Lahore, Pakistan. Founded by three
university friends who share a passion for sports, our shop aims to provide high-quality sports
equipment and accessories to sports enthusiasts across Lahore.

Our product range includes a diverse selection of sports equipment and accessories, including soccer
balls, cricket bats, tennis rackets, basketballs, fitness equipment, and more. We source our products
from reputable suppliers to ensure that we only offer high-quality and durable products to our
customers.

Our team is composed of passionate sports enthusiasts who are committed to providing exceptional
customer service. Our staff are knowledgeable about our products and provide personalized
guidance and support to customers to help them select the best equipment and accessories for their
needs.

We are also dedicated to building strong relationships with our customers and the wider sports
community in Lahore. We sponsor local sports teams and participate in sports events to increase our
visibility and establish ourselves as a trusted and reputable sports equipment retailer in the region.

Our mission is to provide sports enthusiasts with access to high-quality and affordable sports
equipment and accessories, while also promoting an active and healthy lifestyle. We strive to
achieve this mission by continuously improving our product range, customer service, and marketing
strategies, and by building strong relationships with our customers and the wider sports community
in Lahore.

At our sports shop, we are committed to providing a one-stop-shop for all sports enthusiasts in
Lahore, and we are excited to continue serving the community with our passion for sports and
commitment to excellence.

Company’s Name:

The name of the shop / enterprise is AQA Sports. The name if an abbreviation of the 3 names
combined which are Ali, Qayyum and Anees, Who are the founding personnel of the business.

Physical Address:

64 Q block commercial plaza, DHA Phase 2, Lahore

Email Address:

For inquiries the following emails could be used:

m.ali.haider1347@gmail.com

Usman@aol.com

AhmedAnees2002@gmail.com

Vision & Mission:

Vision:

Our vision is to become the leading sports equipment and accessories retailer in Lahore, Pakistan,
and to inspire people to pursue an active and healthy lifestyle through our products and services.

Mission:

Our mission is to provide sports enthusiasts in Lahore with access to high-quality and affordable
sports equipment and accessories, while also promoting an active and healthy lifestyle. We strive to
achieve this mission by continuously improving our product range, customer service, and marketing
strategies, and by building strong relationships with our customers and the wider sports community
in Lahore. We are committed to delivering an exceptional customer experience and supporting our
customers in their pursuit of their sports goals and aspirations.

Product Description:

Our sports shop offers a wide range of high-quality sports equipment and accessories to meet the
needs of sports enthusiasts across Lahore, Pakistan. Our products are carefully selected from
reputable suppliers and brands, ensuring that we only offer the best and most durable products to
our customers.

 Our product range includes:

 Soccer Equipment: We offer a wide range of soccer equipment, including soccer balls, soccer
shoes, shin guards, goalkeeping gloves, and training cones.
 Cricket Equipment: We offer high-quality cricket equipment, including cricket bats, cricket
balls, cricket helmets, cricket pads, and cricket gloves.
 Tennis Equipment: We offer a range of tennis equipment, including tennis rackets, tennis
balls, tennis bags, and tennis shoes.
 Basketball Equipment: Our basketball equipment range includes basketballs, basketball
hoops, and basketball shoes.
 Fitness Equipment: We offer a range of fitness equipment, including treadmills, exercise
bikes, dumbbells, resistance bands, and yoga mats.
 Other Sports Equipment: We also offer equipment and accessories for other sports, such as
badminton, squash, and table tennis.

At our sports shop, we are committed to providing high-quality products that meet the needs of
sports enthusiasts of all ages and skill levels. Our knowledgeable and experienced staff are always on
hand to offer personalized guidance and support to help our customers find the right equipment for
their needs.

Customer Profile:

Our sports shop caters to a diverse range of customers in Lahore, Pakistan, who are passionate
about sports and leading an active and healthy lifestyle. Our customer profile includes:

 Sports Enthusiasts: Our primary customers are sports enthusiasts of all ages and skill levels,
including recreational and professional athletes who are looking for high-quality sports
equipment and accessories to help them improve their performance and achieve their goals.
  Fitness Enthusiasts: We also cater to fitness enthusiasts who are looking for a wide range of
fitness equipment and accessories to help them achieve their health and fitness goals.
 Parents and Children: We offer a range of sports equipment and accessories for children,
including soccer balls, cricket bats, and basketballs, as well as fitness equipment suitable for
kids.
 Sports Teams and Clubs: We offer bulk purchasing options for sports teams and clubs in
Lahore, including soccer, cricket, and basketball teams, to help them access high-quality
sports equipment at competitive prices.
 Coaches and Trainers: We also cater to coaches and trainers who are looking for sports
equipment and accessories to support their coaching and training programs.

Our customers value high-quality, durable sports equipment and accessories, as well as personalized
guidance and support from knowledgeable and experienced staff. They are committed to leading an
active and healthy lifestyle, and are passionate about sports and fitness. We strive to provide
exceptional customer service and support to all our customers, regardless of their age, skill level, or
sporting interests.

Chapter3: Market Analysis

Market Size and Growth:

The sports equipment market in Pakistan has experienced significant growth in recent years due to
increased participation in sports and fitness activities across the country. In Lahore, as one of the
largest cities in Pakistan, there is a growing demand for high-quality sports equipment and
accessories.

Competitor Analysis:

There are several sports equipment retailers in Lahore, ranging from small, independent stores to
larger, established chain stores. The larger chain stores generally offer a wider range of products at
competitive prices, while smaller stores often focus on providing personalized service and guidance
to their customers.

SWOT Analysis:

Strengths:

 Our sports shop offers a wide range of high-quality sports equipment and accessories,
carefully selected from reputable suppliers and brands.
 We provide personalized guidance and support to our customers, helping them to find the
right equipment for their needs.
 Our competitive pricing strategy ensures that our products are accessible to a wide range of
customers.

Weaknesses:

 As a new business, we may face challenges in building brand awareness and customer
loyalty in a competitive market.
  Our product range may not be as extensive as some of the larger chain stores.

Opportunities:

 With the growing popularity of sports and fitness activities in Lahore, there is a significant
opportunity to expand our customer base.
 We can explore online sales channels to reach customers beyond the Lahore region.

Threats:

 Competition from larger chain stores with established brand recognition and larger
marketing budgets.
 Economic uncertainty and fluctuations in the Pakistani currency may affect consumer
spending and purchasing power.

Overall, the sports equipment market in Lahore presents a significant opportunity for our business,
and we believe that our focus on high-quality products and personalized service will enable us to
compete effectively in this market.

Chapter 4A: Marketing Segmentation:

The marketing mix, also known as the 4Ps of marketing, is a framework that businesses use to
develop a cohesive and effective marketing strategy. The 4Ps represent Product, Price, Place, and
Promotion, and each element plays a critical role in influencing consumer behavior and driving sales.

Product: This element of the marketing mix refers to the sports equipment and accessories that our
store offers to customers. Our product strategy should focus on offering high-quality, durable, and
innovative products that meet the needs and preferences of our target audience.

Price: The pricing strategy for our products should be competitive and aligned with market
standards. We need to consider factors such as production costs, competitor pricing, and customer
demand when setting our prices. We can also offer promotions and discounts to incentivize
customers to make a purchase.

Place: The distribution strategy for our products should consider the most effective channels to
reach our target audience. Our physical store location should be easily accessible and visible to
potential customers. Additionally, we can explore online sales channels to expand our reach beyond
the Lahore region.

Promotion: The promotion strategy for our products should focus on increasing brand awareness
and driving sales. We can use a variety of tactics such as advertising, public relations, social media
marketing, and email marketing to reach our target audience. We can also use in-store promotions
and events to incentivize customers to make a purchase.

By carefully considering each element of the marketing mix, we can develop a cohesive and effective
marketing strategy that helps us to reach our target audience and drive sales. This framework can
also be used to regularly evaluate and adjust our marketing strategy based on changing market
conditions and customer preferences.

Chapter 4B: Marketing Strategy

Our marketing strategy will focus on promoting our sports shop to our target audience in Lahore,
Pakistan. Our unique selling proposition (USP) is that we offer high-quality, durable, and innovative
sports equipment and accessories at affordable prices.

To implement our marketing strategy, we will use a variety of tactics, including:

 Pricing Techniques: We will use a cost-plus pricing strategy to ensure that our products are
priced competitively and aligned with market standards. We will also offer promotions and
discounts to incentivize customers to make a purchase. For example, we can offer a discount
to customers who purchase multiple items or who refer their friends and family to our store.

 Digital Marketing: We will use social media platforms such as Facebook, Instagram, and
Twitter to promote our products and engage with our target audience. We will create
engaging content such as product reviews, sports tips, and tutorials, and run targeted
advertising campaigns to reach potential customers. We will also use email marketing to
send promotional offers, product updates, and newsletters to our customers.

 In-Store Promotions: We will offer in-store promotions such as discounts, buy-one-get-one-

free offers, and free gifts to encourage customers to make a purchase. We will also
participate in local sports events and set up booths to showcase our products and offer
special promotions to attendees.

 Unique Selling Proposition: Our USP will be to offer high-quality, durable, and innovative
sports equipment and accessories at affordable prices. This will differentiate us from our
competitors and attract customers who are looking for value for money.

By implementing these marketing tactics, we aim to increase brand awareness, drive new business,
and encourage repeat purchases from our target audience in Lahore, Pakistan. Our competitive
pricing strategy and USP will help us to stand out from our competitors and attract customers who
are looking for high-quality sports equipment and accessories at affordable prices.

Chapter 5: Financial Feasibility

Start-up costs:

 Rent and Security Deposit: 150,000 PKR (for a small storefront in a busy commercial area)
 Renovation and Fixtures: 100,000 PKR (for basic store fixtures, painting, and signage)
 Inventory: 250,000 PKR (for initial stock of sports equipment and accessories)
 Point of Sale System: 50,000 PKR (for a basic POS system)
 Marketing and Advertising: 50,000 PKR (for initial marketing and advertising expenses)
  Miscellaneous Expenses: 50,000 PKR (for legal fees, utilities, and other expenses)

Total Start-up Costs: 600,000 PKR

Monthly Expenses:

 Rent and Utilities: 50,000 PKR

 Employee Salaries: 60,000 PKR (for 3 part-time employees)
 Inventory Costs: 100,000 PKR (for restocking inventory)
 Marketing and Advertising: 10,000 PKR (for ongoing marketing and advertising expenses)
 Miscellaneous Expenses: 30,000 PKR (for insurance, maintenance, and other expenses)

Total Monthly Expenses: 250,000 PKR

Revenue Projection:

 Average Revenue per Sale: 3,000 PKR (based on estimated sales of sports equipment and
accessories)
 Estimated Monthly Sales: 100 sales per month
 Estimated Monthly Revenue: 300,000 PKR

Profit and Loss:

 Monthly Revenue: 300,000 PKR

 Monthly Expenses: 250,000 PKR
 Monthly Net Profit: 50,000 PKR

Based on this financial feasibility plan, the sports shop has the potential to generate a monthly net
profit of 50,000 PKR. However, it's important to note that this is just an estimate and actual results
may vary depending on factors such as sales volume, pricing strategy, and market conditions. It's
also important to regularly review and adjust the financial plan as the business grows and evolves.

The financial feasibility plan is presented in a tabular form:

Category Amount
Start-up Costs 600000 PKR
Monthly Expenses 250000 PKR
Estimated Monthly 300000 PKR
Revenue
Estimated Monthly Net 50000 PKR
Profit

Revenue Breakdown (Monthly):

Football Equipment: 35%

Revenue: 105,000 PKR

Cricket Equipment: 25%

Revenue: 75,000 PKR

Tennis Equipment: 15%

Revenue: 45,000 PKR

Badminton Equipment: 10%

Revenue: 30,000 PKR

Fitness Equipment: 10%

Revenue: 30,000 PKR

Other Sports Equipment: 5%

Revenue: 15,000 PKR

Start-up Costs:

Category Amount
Rent & Security Deposit 150000 PKR
Renovation & Fixtures 100000 PKR
Inventory 250000 PKR
POS System 50000 PKR
Marketing & Advertising 50000 PKR
Miscellaneous Expenses 50000 PKR

Monthly Expenses:

Category Amount
Rent & Utilities 50000 PKR
Employee Salaries 60000 PKR
Inventory Cost 100000 PKR
Marketing & Advertising 10000 PKR
Miscellaneous Expenses 30000 PKR

Break-Even Analysis:
Calculate the Contribution Margin:

The contribution margin is the amount by which revenue exceeds variable costs. In this case, the
variable costs include the cost of goods sold and any variable expenses such as sales commissions.

Average Revenue per Sale: 3,000 PKR

Cost of Goods Sold per Sale: 1,500 PKR

Variable Expenses per Sale: 500 PKR (10% of the revenue)

Contribution Margin per Sale: 1,000 PKR

Calculate the Fixed Costs:

Fixed costs are the expenses that do not vary with the level of sales, such as rent, salaries, and
utilities.

Monthly Fixed Costs: 250,000 PKR (rent and utilities + employee salaries + inventory costs +
miscellaneous expenses)

Calculate the Break-Even Point:

The break-even point is the level of sales at which the business will neither make a profit nor incur a
loss.

Break-Even Point in Units: 250 (fixed costs ÷ contribution margin per unit)

Break-Even Point in Revenue: 750,000 PKR (break-even point in units x average revenue per sale)

This means that the sports shop needs to sell 250 units of sports equipment and accessories or
generate 750,000 PKR in monthly revenue to break even. Since the estimated monthly revenue is
300,000 PKR, the shop will incur a loss of 50,000 PKR per month. In order to increase the revenue
and reach the break-even point, the shop needs to increase the sales volume, implement cost-
cutting measures, or raise the prices.

Forecasted Income statement:

Year 1 Year 2 Year 3

Revenue 3600000 PKR 4320000 PKR 5184000 PKR
Cost of Goods Sold 1800000 PKR 2160000 PKR 2592000 PKR
Gross Profit 1800000 PKR 2160000 PKR 2592000 PKR
Operating Expenses 2400000 PKR 2400000 PKR 2400000 PKR
Net Profit (600000) PKR (240000) PKR 192000 PKR

Notes:

Gross Profit = Revenue - Cost of Goods Sold

Net Profit = Gross Profit - Operating Expenses

The forecasted income statement assumes a constant gross profit margin of 50%, which may change
based on the business's performance and market conditions.

The operating expenses are assumed to be constant at 200,000 PKR per month for the first three
years.

The net profit is negative in the first year due to the initial investment of 600,000 PKR. The net profit
is positive in the second and third years, indicating that the business is generating a profit.

The income statement does not include any taxes or interest expenses.

Forecasted Financial Position:

Assumptions:

 Starting budget: 600,000 PKR

 Monthly revenue: 300,000 PKR
 Gross profit margin: 50%
 Operating expenses: 200,000 PKR per month
 Fixed assets: 500,000 PKR
 Depreciation rate: 20% per year
 Interest rate: 10% per year
Notes:

The financial position includes the current and long-term assets and liabilities, as well as the equity
of the business.

The current assets include cash and cash equivalents and inventory, which are expected to increase
with the growth of the business.

The fixed assets include property, plant, and equipment, which are assumed to depreciate at a rate
of 20% per year.

The bank loan is assumed to be paid off by the end of the second year, resulting in zero long-term
liabilities in the third year.

End