Small Business Financial Survey Course: Fin 440, Sec: 04 Semester: Fall 2011 Group Field Assignment # 01 Submitted

by: 0910622030, 0910997030, 0920629030, 0920630030

Executive Summary
The purpose of our survey was to get idea about a particular small business, how they finance their businesses and how they run. For that we took interview of four Jhalmuri-wala and tried to know inner concern about their businesses. The main objective of these businesses is to earn daily profit on daily investment. We found that these Jhalmuri selling businesses are so easy to start. Planning, financing, start operating, generate sales and get profit can be done even within a day. They normally start with Tk.200 Tk. 1200. And all of it is 100% equity. Risk of the business is really low and it can be predict before. The return of these businesses are limited. Because the product they sell that is made through manual labor instantly at the time of sales. So they have a limitation about total volume of sales quantity because of their manual labor. Automatically their net income has a limit; they cannot earn more than Tk.250 Tk.400 a day. Because of its investment limitation, the business doesnt have any growth even they have more money to invest in business. In the long run the business will not sustain, because there is no chance to earn more from the business and most of the jhalmuriwala is already tired about the same daily routine. So they want to move to a new business by using their savings.

Collected Data currency (Taka)

Jhalmuri wala 1 Business Length Initial Investment Todays investment Equity Fund Debt Fund Daily Starting Time of The Business Daily Investment in Morning Daily Initial Cash in Hand at morning Why they 5 years 300 1700 - 1800 100% 0% 10 am 500 - 600 50-60 Jhalmuri wala 2 8years 200 1500 1600 100% 0% 4 pm 400 500 40-50 Jhalmuri wala 3 10 years 100 1600 - 1700 100% 0% 10 am 600 - 700 30-40 Jhalmuri wala 4 8years 1000 1500 - 1600 100% 0% 10 am 550 - 650 40-50

To give change to To give change to To give change to To give change to

Date Of Submission: October13, 2011

Small Business Financial Survey Course: Fin 440, Sec: 04 Semester: Fall 2011 Group Field Assignment # 01 Submitted by: 0910622030, 0910997030, 0920629030, 0920630030 Carry Cash Sales Location their customers. Bashundhara their customers and their customers. for personal cost. Wari Laxmibazar their customers and for transportation cost. Banani,Kamal Ataturk Road.

Reason for choosing the location Pricing of The Goods Time to recover the Daily Invested Cash. Business Risk

He targets the Reason behind He target the area student of NSU as choosing this area as because there are 3 his prime customer. he lives there. big school located where he sells. Depends on costing He follow others Depends on costing jhalmuriwalas price. 6 PM 9 PM 4:30 PM

There are few private university and some office over there. Depends on costing 7 PM

Political Risk Risk of Criminals Daily Sales Daily Profit Monthly Savings (Depending on the family size) Business Expansion Plan Is this the Only Business The Business is Sufficient to Provide Living Support

Cant sell enough in heavy rain, government holiday and Ramadan. None None 800-9000 250 - 300 Around 2500

Cant sell enough in heavy rain, government holiday and Ramadan. None None 700-800 200 - 250 Around 2000

Cant sell enough in heavy rain, government holiday and Ramadan. None None 1000-1200 300 - 350 Around 3000

Cant sell enough in heavy rain, government holiday and Ramadan. None He has to pay 15tk daily to police. 800 -1000 250 - 300 Around 2500

Saving money to No plane to expand Saving money start a tea stall at the business or start a tea stall. baridhara. switch to other business. Yes yes Yes He needs monthly He is saving money 4000tk for his family for future and he is but its not enough. satisfied.

to No plane to expand the business or switch to other business. yes

He is satisfied with He doesnt have any his business. family so he is satisfied with his income.

Sample Income Statement for Jhalmuri Business

Date Of Submission: October13, 2011

Small Business Financial Survey Course: Fin 440, Sec: 04 Semester: Fall 2011 Group Field Assignment # 01 Submitted by: 0910622030, 0910997030, 0920629030, 0920630030

Income Statement Jhalmuri-wala For a day Sales Tk. 850 Cost of Goods Sold (500) Gross Profit 350 Others Expenses (50) Net Income Tk. 300 Sample Statement of Owners Equity

Statement of Owner's Equity Jhalmuriwala For a day Owner'sEquity, Tk. 1500 beginning Add: Net income Less: Dividend Owner's Equity, ending 300 (300) Tk. 1500

Expenses in carrying out their business (Least, most, and averages a) Business expenses daily or weekly or periodic.
Jhalmuri Seller 1 2 3 4 Least Tk 400.00 Tk 700.00 Tk 350.00 Tk 550.00 Most Tk 500 Tk 800 Tk 400 Tk 650 Average Tk 450 Tk 750 Tk 375 Tk 600

b) Personal expenses - daily or weekly or periodic in carrying out the business.

Jhalmuri Seller 1 2 3 4 Least ( In Tk) 30 35 40 35 Most ( In Tk) 100 120 100 110 Average ( In Tk) 40 50 60 50

Date Of Submission: October13, 2011

Small Business Financial Survey Course: Fin 440, Sec: 04 Semester: Fall 2011 Group Field Assignment # 01 Submitted by: 0910622030, 0910997030, 0920629030, 0920630030

2) Earnings net income daily or weekly or periodic. Least, most, average, losses
Jhalmuri Seller 1 2 3 4 Least ( In Tk) 200 300 150 250 Most ( In Tk) 250 400 200 350 Average ( In Tk) 225 350 175 300

Short Business Description

The business, we are considering is specifically day to day business which is called Sales of Jhalmuri. The Businessman (jhalmuri-wala) has to invest in some fixed assets to start his operation. Those fixed assets are a big bowl, a tool, a bucket, a mug, a knife & spoons. The current assets are muri (Puffed Rice) & different spices, oil, lemon & some others. Jhalmuriwala runs his business with his assets & sales jhalmuri all over the day. They dont have any extra cost except few transportation cost.

Analysis of Jhalmuri Selling Business

Investment Pattern After analyzing the collected data, we have found that Tk. 1000 Tk.1200 is enough for starting this kind of business. So there is no need to take a loan. All jhalmuri-walas start their business with their self-financing. Within this Tk.1000 Tk.1200, Tk.800 Tk.900 is needed for purchasing fixed assets and Tk.200 Tk.300 is invested for daily inventory. Cost for purchasing inventory is their prime cost. At the very first stage of this business, the jhalmuriwalas dont buy fixed assets but purchase inventories or raw materials. At this level of this business some jhalmuri-walas use their household tools as fixed asset. If they face loss in the beginning, they incur it for that day. So in the next morning it will be their choice to do reinvest or walk away for another business. Without having or buying the fixed asset is low risky rather than starting the business with new fixed asset. After being adjusted with the business within 20 -30 days, they increase their investment. They start to buy more inventory worth of Tk.400 Tk. 800 and also buy fixed assets. Risk of the Business Risk of this business is easily predictable such as heavy rainy days, cold days and especially in Ramadan month. At those time their sales goes down. Predicting the risk, the jhalmuri-

Date Of Submission: October13, 2011

Small Business Financial Survey Course: Fin 440, Sec: 04 Semester: Fall 2011 Group Field Assignment # 01 Submitted by: 0910622030, 0910997030, 0920629030, 0920630030

wala can take some steps or other solutions to overcome this situation. Normally they stop reinvesting on that day or buy less inventory. Returns of the Business The main theme of this business is daily investment to get daily return. The profit margin of this business is more or less constant. Its a manual labor based business and they made their product at the time of sales. So their production has a limitation based on their manual labor. So they have a limitation about net income. They normally can earn Tk.250 Tk.400, not more than that. We can assume that a return of this business is limited. But the return is not bad compare to their investment. Every jhalmuri-wala can save around Tk.2000- Tk.7000 at the end of each month. Growth The interesting part of this business is sellers total sales volume is same all over the time. In details, a jhalmuri-wala sells Tk.700 - Tk.800 at 5 year ago he also sells Tk.700 Tk.800 today. From this scenario, we can say that there is no growth for this business. If we consider Inflation for the same scenario, we can say that the business growth is negative. But this business can have a little growth when it is the first 1 or 2 month. Advantages of the Business The business is flexible. Jhalmuri-wala can leave his business whenever he wants. And another advantage is that sellers can get back his invested cash with profit very fast. Shortcomings of the Business In a word, this business is not expandable. There is no growth or almost negative growth in the business. Sales rate of this business is limited. Thats why the income is also limited. If any jhalmuri-wala wants to increase his income he just cant do with this business even he has enough cash or resource in hand. He needs to divert to another business to raise his income. Jhalmuri-walas also feel boring with this business. So he may leave it.

Date Of Submission: October13, 2011