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Acknowledgements

First of all we would like to thank Almighty Allah upon the successful completion
of this report. We express sincere thanks and unbounded gratitude to Madam
Mona Javed for her direction, assistance, and guidance. Special Acknowledgment
should be given to our colleagues and friends, who were very kind and
encouraging, guided and provided help throughout the study. It was team effort
that made the work successful.
Pak Solar Energy Systems
Commercial Avenue, Khayaban-e-Itehad, DHA Phase-II,
Karachi.
Tel#+92320666778, 111-021-021
Email: PSES@yahoo.com
Web: www.pses.org.pk

Co-owners:
Sidrah jamil, Ibad-ur-Rehman, Khawaja zain Riffat, Syed Aslam Badshah, Haris Shoaib,
M.Jahangir Khan.

Description of the business:


Pak Solar Energy system is purely public interest oriented company, having its aims to take our
nation's life standard as good and comfortable as much possible. Our business is to provide
electricity to the citizens of Karachi, through solar energy products. Providing solar energy
electricity may results into saving of electricity which would help to wipe out load shedding and
reduces the cost of per unit of electricity. This will improve our country’s GDP by providing
employment opportunities not only through our business but also from other industries as
continuous electricity will be provided to the commerce sector. We import solar systems from
China and Germany and assembled them locally.

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Executive summary:
Pak solar energy system is small business located at commercial avenue DHA Phase II Karachi.
The founders of the Pak solar systems are friends who have earned their business undergraduate
degrees from Hamdard University in 2010. Since Pak solar energy system is a partnership firm,
all four partners will be contributing equal share of investment. They found a suitable location
for their business and they have the bank’s overdraft facility of Rs. 10 million from MCB Bank
Limited at 12.5% interest rate.

PRODUCT

 Solar mono silicon panel

 Solar Street Lights

 Solar Poly panel

 Solar Garden Lights

 Solar Lantern

 Solar Traffic Signal

 Solar Portable Power Generator 20W & 40W

SERVICES

 Installation Service
 Product Customization
 After Sales Service

CUSTOMERS

Basically our customers are segmented in to three groups

City Government

Corporate sector

Individuals

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COMPANY VISION:-

To make nation’s life standards as much good and comfortable as possible

COMPANY MISION:-

To provide electricity to the citizens of Karachi with the help of solar power; and to remove
problems faced by people due to load shedding.

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MANAGEMENT

P.S.E.S has assembled a creative management team who will be multitasking in the company.
We have a General Manager handling the functioning of the company. Another person will be
responsible for all of the finance and accounting functions. Haris Shoaib is the Purchasing
Manger, in-charge of keeping track of inventory control and coordinating with suppliers and also
the responsibility of recruitment of employees. IT/Marketing Manager who will be controlling
the marketing side of our products.

Most importantly is the financial success, which will be achieved through our strict financial
controls.

We are starting manufacturing solar product locally after three years for that purpose we hire
1000 sq yard place at Korangi Karachi. Equipments and machineries are purchased by taking
loan of Rs. 10 million from MCB bank Ltd.

Additionally, the success of the business will be ensured by offering high-quality service and
extremely automated system. P.S.E.S will also be making use of aggressive marketing
campaigns, the details of which can be found in Marketing Plan. Ongoing marketing efforts will
include newspaper ads, brochures and through cable operator.

P.S.E.S ensures fair and equal profit for its owners and is a rewarding place to work for its
employees. At P.S.E.S creativity is highly valued, and customers are encouraged to give in their
feedback after installation process. Thus P.S.E.S will be targeted as a unique energy system that
provides high quality service and extremely automated structure.

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TABLE OF CONTENT
Description

Acknowledgements

Introduction To Venture

Executive Summary

Company Vision

Company Mission

Industry Analysis

Future Outlook and Trends

Analysis of Competitors

Market Segmentation & Forecast.

Description of Venture

Products

Service

Make your Assessment

Give Knowledge To People How Solar Energy


Works

Size of Business

Office equipment & Personnel

Background of Entrepreneurs

Production Plan

Manufacturing

Physical Plant

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Equipments and machinery

Name of Supplier of Raw Material

Operation Plan

Description of Company’s’ Operation

Name of Suppliers

Flow of Order of Goods

Marketing Plan

Customer Analysis

Company Analysis

Competitive Analysis

Contextual Analysis

Target Market Selection

Product

Place

Promotion

Pricing

Organizational Plan

Form of Ownership

Terms of Agreement

Cost of Starting New Business

Capital Requirements

Management Team Background

Assessment of Risk

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Industry analysis:
The industry analysis through the secondary sources has revealed the following trends and
information in the following areas.

Future Outlook and Trends:


According to a survey done in Mar’10, the trend that has come up through polling results is:

The results of this polling clearly tell that majority of the people living in Karachi are facing a lot
of electricity problems and getting solar energy is the most preferred solution to get rid of this
major problem. This indicates the trend that is being followed and will continue in the future.

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ANALYSIS OF COMPETITIORS:
Following are our competitors who are engaging in the same business

 Qualitest international (price: High, Service: Average)

 Solar Strength Company(price: High, Service: Good)

 Azcon technical service(price: High, Service: Good)

 Vital power solution(price: Average, Service: Below Average)

 Benchmark technologies(price: High, Service: Average)

 Power tech international group(price: High, Service: Good)

 AL-Hassan Engineering & Construction Pvt. Ltd(price: Average, Service: Average)

All of these companies that have been listed above, providing different type of energy system in
Pakistan. An important consideration is that they have multiple products for their consumers.
Their importance to the consumers varies according to the customized preferences of the
consumers coming there. Some go for the quality of energy system, some prioritize safety and
some automation whereas, some consider pricing of the systems.

Market Segmentation and Forecasts:-

The analysis has shown that the largest market share is occupied by power tech international
group. The power tech internationals groups are having the major share in the market and are
playing the major role in providing solar energy system.

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Description of ventures:

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As solar power does not make sense for all locations in the world, the initial cost of installing
solar panels or other sources of solar energy is high, and that is not easy for most people to get
around. No matter how much some people would like to get involved in the movement to
independent energy, it is cost prohibitive. To achieve the highest level of efficiency, which is the
entire point of going solar in the first place, you need the proper amount of roof space to support
the panels your house may require.

Pakistan is most suitable for solar power:

If solar power is looked at through a long-term lens, you will eventually make back what you
originally spent, and possibly start saving money on your investment

Let’s not forget that solar energy increases the value of your home too. Solar power is not
subject supply and demand fluctuations in the way that gas is. Silicon, the primary component of
solar panels, is also being more widely produced, therefore, less and less expensive with each
passing year.

Solar power is independent. This is great because you can supply your home with electricity
during a power outage. Solar power can also be used in remote locations, places where
conventional power can’t be reached. On a larger scale, solar power also reduces our need to rely
on foreign sources for power.

And last, but certainly not least, it’s good for our planet! Solar energy is clean, renewable and
sustainable. It does not fill our atmosphere with carbon dioxide, nitrogen oxide, mercury or any
other pollutants. It is a free and unlimited source of power, unlike expensive and damaging fossil
fuels.

Products:

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Following products are offering by our company.

Solar mono silicon panel Solar Street Lights

Solar Poly panel Solar Garden Lights


Solar Lantern

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Solar Traffic Signal

Solar Portable
Power

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Generator

SERVICE:

We are providing following type of services to our customer

 Installation Service
 Product Customization
 After Sales Service

Installation Service:

Installation of our solar product will be done by our own specialized technician on a reasonable
rate. According to our marketing strategy, initially our installation charges will be 50% less than
the actual.

Product customization:

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P.S.E.S is also offering product customization for its customers. Our sales man will also provide
guidelines to a customer regarding customization facility. According to our market strategy
customization charges will be off 25% initially.

After sales service:

After sales service will also be provided by our company, Customers who have any problem
from our product can register their complaints on our toll free number.

Size of the Business:

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The size of the business is going to be small initially. We shall be serving through just one
outlet. There will be a special delivery system for those who make their orders online and also
for those customers who are outside Karachi.

Office Equipment and Personnel:


The list of the office equipment that will be utilized for the purpose of serving the customers is
as follows:

Splits, Chairs, Tables, Wood Cladding, Lights, Fans, Computer, Telephone and Stationary Items

All these items would be purchased.

Background of Entrepreneurs:
All the partners of the business are business graduates.

Ibad-ur-Rehman BBA(H) Marketing.

Syed Aslam Badshah BBA(H) Management

Haris Shoaib BBA(H) Finance

Sidrah Jamil BBA(H) HR

M.Jahangir khan BBA(H) Marketing

Khawaja zain Riffat BBA(H) IT

All the partners will be contributing financial resources towards the establishment of the
business. All are equally liable for the business.

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PRODUCTION PLAN:

Manufacturing:
Initially we will import solar product from China and Germany and assemble them locally for a
period of 3years then we will start manufacturing locally. We will see the demand of product and
according to them we will manufacture product.

Physical Plant:

We decided to hire a place of 1000 sq yard at Korangi road Karachi to start our factory there,
reason for choosing Korangi is that it would be less costly as we are paying RS. 960,000 per year
rent comparatively less as compare to other places.

Machinery and Equipment:

We will take loan from bank of RS. 1,000,000 and purchase equipments from China and fix
them in our factory. It would cost cheap as we are purchasing equipments and machinery from
China.

Names of Suppliers of Raw Materials:

The name of the suppliers of the raw materials will be decided when we start manufacturing
solar products locally. But we will also import raw material from China and Germany.

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Operational Plan:

Description of Company’s Operations:

The main company operation is to assemble the parts of solar energy products. Installation of
these solar energy products is also provided by our company.

We will make imports according to the demand of the solar energy product. We do not want to
have a large inventory that will tied our capital so product that have high demand will import
frequently and there is a small inventory hold by the company to cushion the variability in
demand.

Name of Supplier:
China: Zhejiang Hurras Solar Energy Technology Co Ltd

We will import solar product from these supplier as they are providing solar product on the low
cost with high quality. We will import parts of the solar products from the above listed suppliers
and assemble them locally at the customer’s place.

Flow of Order:
We will utilize technology to save customer time so with that our customers can place their
orders through our toll free number and our website. We contact them first by calling them to
confirm the order and if the order is confirmed then we will deliver them the product within five
days.

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Marketing Plan:
Marketing strategies will play a key role in the development and success of our company. We
aim to initiate our marketing plan with the analysis of 5 C’s i.e.:

 Customers Analysis
 Company Skills
 Competition
 Collaborators
 Context

Customers Analysis:
There are many companies in Karachi but it is evident from our industrial analysis that only few
companies are catering such needs of customers.

We discovered the following findings relating to our potential customers:

 The customer buying the product looks for price, quality, reliability and warranty.

 They seek the above information from word of mouth, and various IT magazines and
corporate magazines.

So according to the customer analysis we have to focus on the price and quality attributes.

Company Analysis:
The focus of the company analysis is on its strengths and weaknesses:

Strengths:
 Availability of skills in all the entrepreneurs as all of the five partners are business
graduates and professionals.

 Ideal location it provides high viewership frequency.

 Coming in the market with low cost and good quality solar energy products along with
providing the best service.

 Proper marketing of product.

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Weaknesses:
 Limited Financial Resources.
 Limited space available for inventory.
 High start up cost of business.
 Limited marketing budget.

Competitive Analysis:
The solar product industry in Karachi is rich in competition. There are some companies who
already capture ample amount of market share. It will be challenge for a pak solar energy system
to make its place in market but with low cost and high quality advantage it will be easy to
capture market share.

On our research the important aspect that arises is that many competitors do not promote their
product so there is an opportunity for us to promote our product and make people aware of that
product from that we can capture a lot of market share in no time. Secondly, we are also giving
opportunity of customization to our customers which give us a competitive edge also helps us to
get more market share.

Contextual Analysis:
The contextual analysis is concerned with the opportunities and threats relating to environment:

Opportunities:
 We can capture huge market share based on promotion of the product.

 Opportunity that in the coming year load shedding will increase so there will be huge
demand.

 Government is not focusing to cater the demand of electricity in long term by building
dams and hydro power project instead they are hiring electricity on rent from other
country which increase the per unit cost so there is opportunity for us to capture the
market.

 To induce customer to visit, an opportunity also exists to participate ourselves in every


exhibition at expo centre and let people know about our products.
 Government is also planning to increase the cost per unit of the electricity up to 19%,
which will create a negative impression of the general public against normal electricity

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and they will divert towards long term benefit products and that is only solar energy
systems.

Threats:
 Chances that idea can be imitate
 Chances that Economic recession can further be deepened which leads to rise in fixed
cost
 Threats that political influences can affect our business.
 As we are dealing in foreign currency appreciation and depreciation of currency should
affect our business.
 High interest rates are causing many hurdles in the cost reduction process.
 Threats that if input prices increased our cost will also be increased.

Target Market Selection and Product Positioning:


The segmentation part in industrial analysis has confirmed that opportunity exists in the industry.
So our firm will attempt to serve those potential buyers who are:

 Middle class and above


 Corporate World
 City Government

Our firm aims to customize its services based on the needs and wants of above mentioned
market segments

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The marketing mix strategy
Product
Product:
 We will not just providing the above mentioned product but product is customized
according to the need of customer.

 Customization is part of our service and it is recognized as add on service.

 Service time for installation is 4 hour. But it varies with the no of orders or sizes of the
orders.

 Quality and efficiency of services will be ensured.

Product Line Length:


We have identified our product line breadth into 7 distinct categories:

 Solar mono silicon panel

 Solar Street Lights

 Solar Poly panel

 Solar Garden Lights

 Solar Lantern

 Solar Traffic Signal

 Solar Portable Power Generator 20W & 40W

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Product Line Depth:
Product Line Length

 Solar Mono Silicon Panel  Customized option

 Solar Street Light  Customized option

 Solar Poly Panel  Customized option

 Solar Garden Light  Customized option

 Solar Lantern  Customized option

 Solar Traffic Signal  Customized option

 Solar Portable Power Generators  Customized option

Service Line Length:


We have identified our service line breadth into 3 distinct categories:

 Installation Service
 Product Customization
 After Sales Service

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New Product Development Process

Opportunity Identification:
Whenever we introduce new product in market, we will analyze if that product can bring value
to customers as well the organization.

Design:
The idea is then discussed with the customers, and their feedback is considered to be critical in
decision making.

Testing:
Testing will be done in a mock environment by inviting some loyal customers on whom actual
results would be drawn.

Product Introduction:
The product will be formally introduced in the company product list along sheer promotion in
the company.

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Product Life Cycle Management:
It will done by studying constant reaction of customers towards the product and the strategies
will be formulated accordingly or repositioning new product will be done accordingly

PLACE:
MARKETING CHANNEL:
There are two ways of marketing channel we are utilizing to make our product reachable to the
customer. First one our channel design will have a direct distribution system is that we are
serving customer from our show room located at DHA phase II, commercial area. Other is that
we are delivering product to the customer at their desired location but we will charge for this
service.

From the perspective of channel management, our network to distribute product is very simple.
The only thing that we have to manage is to maintain service i.e. to provide ordered Products on
time.

PROMOTION
Marketing Communications:
To persuade the customers to approach our company, we will be adapting both personal selling
efforts and non-personal selling efforts.

 Personal Selling Efforts means representatives of the company are directly involved to
communicate about the company.

 Non personal selling efforts means to take services of third party for the marketing
communication purposes.

Task and Tools:


For the task and tools decisions in promotion purposes we will be adopting the 6 M’s model:

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 Market: Our communication targets will be to focus on the segments that we have
defined i.e. Middle class and above, corporate world and City Government.
Mission: The objective of our communication is to successfully penetrate in the market
by creating awareness among our target markets

Message: Following are points that are to be communicated in our promotion strategy:

 To convey that Pak solar energy system is a unique company that provides different solar
energy products.

 To communicate about quality services and product that we provide

 To convey that the ambience of PSES is no bills no load shading.

 To convey about the strategic integrations that we have planned to make with our
supplier.

Media: Following are the vehicles that we will use for our communication plan:

 Home Express Magazine, which is distributed in more than 40000 homes.

 Brochure in Newspaper.

 Advertisement in corporate newspaper such as business recorder and Dawn.

 Web blogs and personal e-mails

 Money: The consensus among partners has been made allocate Rs. 100,000 on
promotional effort.

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 Measurement: The impact of the campaign will be assessed through the response
provided by the customers and additionally marketing research will be used if the optimal
funds are available.

Non-Personal Vehicles:
We will be adopting combination of two approaches:

 Advertising.

 Sales Promotion
Advertising:
Following are the tools that we will use advertising:

 Magazine
 Newspaper
 Brochures
 Web blogs
 TV Advertising

Following are reasons that we have selected these tools:

 Home express will serve cheaper medium to create awareness

 The readership of Business Recorder and Dawn is on higher side almost every
businessman read these newspapers on regular basis.

 Brochures will be used because of the cost minimization, which would be distributed
along different news papers in different areas of Karachi, where we think our potential
customers exits.

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 Today 90% of the world is aware of the internet, so it is the cheapest and the most
effective way to communicate a large numbers of the customers around the globe by
advertising on web blogs, or personal e-mailing

Sales Promotion:
We would be using sales promotion if your order is greater than amount RS 200,000 then we
will give you discount of 20% in our services.

We would have amendments in our sales promotion plans if response of the customer is not up
to mark.

Personal Selling:
In personal selling we would be participating in major events in Karachi and
let people to see our product benefits.

Communication Mix:
Now it’s the time to decide whether we would be adapting ‘push’ strategy or ‘pull’ strategy.
Whatever the strategies that we have discussed earlier form the basis of push strategy and this
strategy is appropriate for the kind of industry in which we are dealing. We have to capture
potential customer by personal selling effort by going to customers on regular basis and make
sure they know the exact benefit of our product. But once they know the benefit of our product
we shift toward the strategy of pull that is promoting ourselves in a way that we will create
desire in the mind of potential customer that they show their insistence towards our Product.

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PRICING:
The previous 3P’s strategy has framed the target customers’ perception about the value of our
products and this value represents the maximum price that the customers are willing to pay.

Pricing Basis and Objectives:


 Pricing will be done on the basis of costing; cost will serve as flooring.

 Pricing should be done on the basis that it should cover operating expenses

 As our objective is to successfully penetrate in the market, we would be opting for long
term profits, for which we would be charging prices at par with our competitors.

 The minimum price to be charged is to be based on industry trend that we need to be


more cost oriented

 At the start we have to adopt penetrating strategy because of Strong competitors but once
we start producing locally and proper brand image is established we adopt the skim
strategy.

Price Customization:
Price customization can only be served in a condition:

If customer wants to buy skimmed version of our products items (i.e. only core product) then it
will be served in accordance to their customized order. In this case some price advantage will be
passed on to those customers.

Break Even Analysis:


The break even is achieved at the sales of RS. 58,938,000 and these sales are generated by
selling a quantity of 1551 units/100 watts overall which includes the entire solar product. Their
individual ratios vary according to their prices, quantity served and the nature of the product.

This break even is achieved in the third year of the business. This indicates that we recover our
operating expenses along with our cost from the sales we generate in the first three years.

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ORGANIZATIONAL PLAN:
Form of Ownership:
Pak solar energy system is the brainchild of five friends who decided to pool in their resources
and launch a new company that will cater to the need of providing electricity in Karachi. The
business will be a partnership owned by 4 BBA graduates, namely:

 Syed Aslam Badshah

 M.Jahangir khan

 Ibad-Ur-Rehman

 Haris Shoaib

 khawaja Zain Riffat

 Sidrah Jamil

The business will be having general partners; all partners will be liable for all business liabilities
and debts, they would share management control, share the right to use partnership property, and
share the profits of the firm in predefined proportions.

Terms of Agreement:

 All the partners in this business will share equal profit and will have equal contribution in
the losses.

 Initially partners can withdraw 5% of their profit on yearly basis for their personal uses.

 All rights and obligation rest with every individual partner.

 Liabilities are share between all the partners.

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 A partner cannot transfer his/her share to any other person without the consent of the
other partners.

 Every partner must be just and faithful, and observe utmost good faith towards every
other partner of the firm.

 Every partner has a right to take part in the decision making of the firm and give his
opinion about any matter but nature of business cannot be change without the consent of
all the partners.

Costs of Starting New Business:

The total cost of starting this new business is estimated to be around 9 million, the purchase of
all the fixed and current assets, and to handle the routine operating expenses related to the
business. The total cost increase as we start manufacturing locally because of annual rent of RS
960,000 and we are taking loan from bank around RS 10 Million to purchase equipments and
machinery therefore total fixed cost for the fourth year is RS 16,711,726.

Capital Requirements:

Rs300, 000 will be contributed by each partner and remaining financial assistance will be
acquired through loan from MCB Bank Limited.

Management Team Background:

The 6 partners will be playing different managerial roles in the operation of P.S.E.S Company.

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Roles and Responsibilities of Management Team

Managers:

General Manager- Syed Aslam Badshah,

IT/Marketing Manager- Zain Riffat, Ibad-ur-Rehman

HR Administration/Purchasing Manager-Sidrah Jamil, Jahangir khan

Finance Control- Haris Shoaib

Staff:

Supervisor- will be hired.

5 people are hired for Personal team selling.

4 technicians will be hired.

Guard- will be hired.

In future we will increase our labor force according to the demand of our products.

Employee Reward and Incentive Plan:

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At the initial stage our organization would be cost oriented, so we will be more towards the
intrinsic rewards. The reward scheme is given below:

 Employee of the month. The criteria are highest sales level achieves by employee.

 Picnic parties will be arranged to maintain their productivity.

In future, the rewards of intrinsic and extrinsic nature would be given to our
prospective employees e.g. Bonuses

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ASSESSMENT OF RISK:

 Acceptance of idea whether this idea will be accepted by the target market or not.
 Due to unstable political conditions and unrest prevailing within the country our business
may face some losses.
 If our competitors copy our idea than our business will be a complete failure.
 Customer preferences’ may change regarding service and product quality.

New Technology:
It is likely that wind energy system may introduce in our country in coming year that would
affect our business badly because wind energy system is less costly as compare to solar products.

Contingency Plan:
The contingency plan for our firm if the wind energy system is incorporated is we will reduce
our profit margin to make sure that our product will cost less or equal to wind energy system but
this process will cut our profit so we have to control our expenses as well to our come reduction
in profit. Moreover, we shall always have a competitive edge over our competitor because
sometimes winds may not even blow, on the contrary the sun never stops shining, thus giving us
an edge always.

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