Submitted to: Sir Talat Manzoor

By: Muhammad Anas Nadeem-ul-haq khan Ahsan waseem khan

Nadeem, Ahsan and Anas are three business partners starting a new construction business named A & N Constructors. The company will be operating in the Karachi for both small and large scale construction, repair, and alteration projects focusing onresidential construction. With the business boom that is occurring in our local area and the desire to improve overall profit margins, the company is planning to target market from residential clients to the larger commercial customers. This business plan will lay out our goals and tasks to make this transition successfuland create enough market shares tosucceed in this highly competitive market.

As population is increasing day by day and people want their own residence at cheap rates with better residential facilities and healthy environment so we as company decided to acquire significant market share because there is enough room for growth in this industry, which will provide our firm growth opportunities.

The Karachi market is booming at this moment, overall business growthduring the past several years has raised and is expected to continue in upcoming years. This makes for a very attractive market for A & N Constructors. We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring residential building construction. This is the fastest growing segment of residential clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, and all other potential commercial clients.

First Project and its Costs:-

Our first project is to build 10 residential houses (a small community) in SARJANI TOWN near 4k bus stop. Because its the area where people are coming to live, the area has enough room for construction. Its near city and property is comparatively cheaper than other areas. Cost of property (land) per house is Rs.11, 00,000 (200 yards) Our equity financing will be of Rs.402, 00,000 Debt financing portion will be Rs. 268, 00,000 (loan from a bank @ 18%) Sale price per house Rs. 16,000,000 Estimated construction cost per house Rs. 6700000

Name of contractor: A & N constructors Address of site: Sarjani town near 4k north Karachi Covered area of each plot size: 50`-0=apprx 139 SQ yard Construction area of each plot: Foundation + ground floor covered area 1250SQFT 1st floor covered area approx 1500 SQ ft 2nd floor area approx 1500 SQ Ft

Total covered area: approx 4240 SQ ft (Ground floor + 1st floor +2nd floor) with foundation Construction rate: Rs.1250/= per SQ ft Total amount: 5300000(fifty three lac twelve thousand and five hundred) The Above rates are for complete structure to finishing work with material.

Year 1: 160000000 * 0.2 = 32000000 Year 2: 160000000 * 0.1 = 16000000 Year3: 160000000 * 0.1 = 16000000 Total: 64000000 The above is the yearly cash receipt by us from the customers. Where 20% is showing the down payment for the first year 10% is the yearly rather than monthly installments and 160000000 is indicating the selling price of the property.

160000000-64000000 = 96000000 It is the remaining amount after deducting yearly installments. 96000000/36 = 2666666.667 Per month inflow from monthly installments by the customers

Year 1: D+ 12 Installments = 32000000+32000000 = 64000000 Year2: Yi2+12 Installments= 16000000+32000000 = 48000000 Year3: Yi3+12 Installments = 16000000+32000000 = 48000000 Total: =160000000 These are the yearly inflows which the company will receive during 3 years

NPV:- 53994923.61 IRR:- 68.74% MIRR:-48.97%

Strengths :-

Low Cost/Good Value for Money Abundant Cheap Manpower Hard Working Plenty and Cheap Construction Materials Available Good Relationship with Government. Booming Home Market

Relatively Low Management Capacity Lack of Experience for Sophisticated Project Procurement Low Ability to Create Financial Solutions for Clients Relative Low Ability to Manage Sophisticated Projects Weak in Professional Services

Opportunities:Booming International Construction Market More Open Global Construction Market Chinese Construction Industrys Reform toward International Practice Increasing Collaboration and Partnering among International Competitors

Threats:Intense Competition in the Global Construction Market Sophistication of Management and Technologies Increasing Trend toward Providing Integral Service Intense Competition for Talented People

Expected profit will be much higher than market return and after the successful completion of the project and having fruitful results we will be able to expand our business and continuation of other projects will lead us to the economies of scale. It will also make us efficient in cost cutting, generating high profit and creating customers satisfaction. We should have to increase our revenues and we had to maintain high return because of high tax rates. NPV is positive and we are having high returns so we should have to go with the decision of starting this project. Its PBP is very less and we can recover the invested amount after 1 year. IRR and MIRR are also high which shows the high profitability with no unconventional cash flows. We have also saved tax on interest payment.