Product design and development plan
Bangladesh has very huge demand for exporting products to other countries.So, it has a very high market growth rate which will flourish our economic sector and increase market share.
- Prototype: Prototype which is the first physical depiction of a new product, will be produced.For a new product, a prototype is needed to test the merits of the product and get substantive feedback.
- Virtual prototype: This a computer generated 3-D image of an idea.It displays an invention as a 3-D model that can be viewed from all sides and rotated 360 degrees.
- Availability of labor at lower costs: As there is an abundance of availability of labor, the organization can use this to its advantage and employ workers at low costs.
- physical plant: As we are in the initial stage of our business, we could not afford for establishing our own plant.If we somehow even manage to establish that, It will increase our risk as we will not have sufficient capital to run the business.But as the business will grow, we will definitely make our plant to process our products and unique designing.
Challenges and risks
Company management is responsible for constantly evaluating risks and taking corrective actions to provide adequate prevention, control and risk reserves.We have identified several risks that are associated with our business project.There are many possible classifications of risks but for the purpose of this plan.We have chosen to group them as follow:
1. External risks
2. Internal risks
- External risks: These risks come from outside the company as well as are more difficult to prevent and control.
* Economic depression: Current trends indicate that the economic downturn is reaching the bottom and chances are that the recovery process will begin soon.However, It is likely to be a slow process and it will probably take several years until complete recovery and full growth are achieved.We assess the risk of a major depression to be low.
* Competition and Buying patterns changes: There is a high risk that new competitors will arrive in the relevant market place.Our continuous improvement management strategy and cost control techniques will help us to stay on top of customer preference.Magic ball customer buying patterns are not likely to significantly change over the next five years.
* Suppliers: Our company’s purchases do not depend on a single or a limited group of suppliers.There is a large supply of materials.The risk of face supply constrictions is low.
* Technology: New and more efficient magic ball preparation equipment is expected to become available.We believe to have reduced this risk over the next five years.
* Location: The chosen location will be leased for minimum five years with the possibility to extend the lease over another similar period.There are no other contraction developments foreseen in this highly dense population area of local bay.
* Inflation: According to experts estimates, the inflation rate is likely to remain under control over the next five years.We have accounted for a five percent annual inflation rate.
2. Internal risks: These risks came inside the company and can be batter prevented or controlled.
* Cash flow deficiency: Our main concern will be to have sufficient cash on hand to meet our payment obligations and be prepared for unexpected needs of cash.
* Business continuity: Over the next five years.In the event something happens to one of the company’s managers and co-owners, the other will have the skills and experience required to take over and continue operations.
* Personnel: There are many skilled employees in the local area.We will be able to select the best new members from a large number of valuable applicants.Our personnel strategy includes modern management techniques that will be applied to select, hire, motivate and reward the employees.
Sources and uses of funds statement
In the initial phase of the business, the organization aims to take the loan from a bank.This will add further costs to the business which is the interest rate the bank will charge.However, the organization is confident enough about its strategies and policies which will make the organization into a successful one and will pay back the amount to the bank with interest in due time.
Sources and uses of funds statement which is a document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for.
After spending several month searching for a convenient location, we decided to lease a commercial space in a densely populated area of local bay.The start up capital will be used for legal expenses, packing and other materials, insurance, rent, promotion, business sign and inventory on hand at start up as detailed in the company summary section of this plan.We have estimated total start up cost 131,500.The number in the start up and start up funding tables are meant to reflect these estimates.The company capital will be 101,500.We will provide the bulk of start up financing in the amount 72,000.Approximately 59,500 additional funding is needed.The purpose of this business plan is to secure financing for that amount.
And investor is welcome to participate in the company’s capital for the amount 29,500 and could be offered a portion of 29.06% ownership of the 101,500 company capital.The funds provided by the investor will be used to buy equipment and to cover part of the start up expenses.The company plans to receive a five year term commercial loan facility which will meet the cash flow requirements.
Written by Saiful Islam
Comilla University (Marketing department)