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helpdesk@smeda.org.pk
REGIONAL OFFICE
Punjab
REGIONAL OFFICE
Sindh
REGIONAL OFFICE
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014
Pre-Feasibility Study
Table of Contents
1. DISCLAIMER......................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ......................................................................................... 3
3. INTRODUCTION TO SMEDA ............................................................................................. 3
4. INTRODUCTION TO SCHEME ........................................................................................... 4
5. EXECUTIVE SUMMARY ..................................................................................................... 4
6. BRIEF DESCRIPTION OF PROJECT................................................................................... 4
7. CRITICAL FACTORS............................................................................................................ 5
8. INSTALLED AND OPERATIONAL CAPACITIES ............................................................ 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT........................................................ 6
10. POTENTIAL TARGET MARKETS ...................................................................................... 6
11. PROCESS FLOW ................................................................................................................... 6
12. PROJECT COST SUMMARY ............................................................................................... 6
12.1
Project Economics ......................................................................................................7
12.2
Project Financing ........................................................................................................7
12.3
Project Cost .................................................................................................................7
12.4
Space Requirement ....................................................................................................8
12.5
Machinery and Equipment .........................................................................................8
12.6
Human Resource Requirement ................................................................................9
12.7
Revenue Generation ..................................................................................................9
12.8
Other Costs ..................................................................................................................9
13. CONTACTS - SUPPLIERS .................................................................................................. 10
14. ANNEXURES ....................................................................................................................... 11
14.1
Annexure 1 Income Statement ............................................................................11
14.2
Annexure 2 Balance Sheet ..................................................................................12
14.3
Annexure 3 Cash Flow Statement ......................................................................13
14.4
Useful Project Management Tips ..........................................................................14
14.5
Useful Links ..............................................................................................................15
15. KEY ASSUMPTIONS .......................................................................................................... 16
Pre-Feasibility Study
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general
idea and information on the subject. Although, the material included in this document is
based on data / information gathered from various reliable sources; however, it is based
upon certain assumptions which may differ from case to case. The information has been
provided on as is where is basis without any warranties or assertions as to the
correctness or soundness thereof. Although, due care and diligence has been exercised
to compile this document, the contained information may vary due to any change in any
of the concerned factors, and the actual results may differ substantially from the
presented information. SMEDA, its employees or agents do not assume any liability for
any financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to carry
out additional diligence and gather any information which is necessary for making an
informed decision, including taking professional advice from a qualified consultant /
technical expert before taking any decision to act upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in
October 1998 with an objective to provide fresh impetus to the economy through
development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the national
income, through development of the SME sector, by helping increase the number, scale
and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify
policy, access to finance, business development services, strategic initiatives, and
institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment has
been a hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business development
services is also offered to the SMEs by SMEDA. These services include identification of
experts and consultants and delivery of need based capacity building programs of
different types in addition to business guidance through help desk services.
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
4. INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan program, for young entrepreneurs, with an
allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand (100,000)
beneficiaries, through designated financial institutions, initially by the National Bank of
Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of 01
year grace period and a debt: equity of 90:10 will be disbursed to SME beneficiaries
across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit
Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).
5. EXECUTIVE SUMMARY
Catering and Decoration Services Business is proposed to be located in a middle
income area in cities like Karachi, Lahore, Rawalpindi, Hyderabad, Faisalabad, Multan
etc.
Services include catering of food & services to events such as weddings, mehndi &
mayun, corporate Events etc and decoration of event site (this service is to be
outsourced).
Capacity: Maximum 100 events per year and initial utilization upto 50%
Total Cost Estimates is Rs. 1.22 million with fixed investment of Rs. 0.92 million and
working capital of Rs. 0.304 million
Given the cost assumptions IRR and payback are 27 % and 3.8 years respectively
The most critical considerations or factors for success of the project are:
1. Procurement of Raw material
2. Location- proximity to marriage halls, business hubs etc
3. Quality Food
Location: The recommended area for the proposed catering and decorating
service business is the middle income locality in cities like Karachi, Lahore,
Rawalpindi, Hyderabad, Faisalabad, Multan, Peshawar and Quetta etc. This
business can also be undertaken in all small 2nd tier towns in addition to
suburban towns of large cities.
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
Product: The proposed project will offer high quality food & catering services to
events such as weddings, anniversaries and corporate events etc.
7. CRITICAL FACTORS
Events
Weddings
Mehndi & Mayun
Anniversaries
Corporate Events
Others
Total
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
%
30
30
10
07
23
100
Pre-Feasibility Study
10.
The recommended areas for the proposed business will be cities like Karachi, Lahore,
Rawalpindi, Hyderabad, Faisalabad, Multan, Peshawar and Quetta etc. This business
can also be done in all small 2nd tier towns in addition to suburban towns of large cities.
Target customers for the said business would be Corporate and Individual clients, Event
Management Companies, Marriage Halls & Lawns etc.
11.
PROCESS FLOW
12.
A detailed financial model has been developed to analyze the commercial viability of
Catering & Decoration Service Business under the Prime Ministers Youth Business
Loan program. Various cost and revenue related assumptions along with results of the
analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendix
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
Details
27%
3.8
3,026,629
Returns and profitability are highly dependent on regular occurrence of events, good
marketing practices, quality of services and more importantly good quality and taste of
food.
12.2 Project Financing
Following table provides details of the equity required and variables related to bank
loan;
Table 3: Project Financing
Description
Total Equity (10%)
Bank Loan (90%.)
Markup to the Borrower (%age/annum)
Tenure of the Loan including Grace Period (Years)
Grace Period (Years)
Details
Rs.122,200
Rs.1,099,800
8%
08
01
Capital Investment
Construction & Renovation
Machinery & Equipment
Office Equipment & Furniture
Advance Rent (Deposit)
Vehicles
Preliminary Expenses
Amount (Rs.)
135,000
150,000
83,000
150,000
350,000
50,000
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
918,000
304,000
1,222,000
Area Required
For Office & Storage
Total Rent
Area
(Sq. ft.)
Monthly Rent
Charges (Rs.)
750
25,000
25,000
Yearly
Rent(Rs.)
300,000
300,000
Total
Rs.
Description
Burners / Fittings / Others
Daigs / Kadhai / Others
Storage Racks
Deep Freezers
Other Kitchen Utensils
Total
25,000
20,000
15,000
60,000
30,000
150,000
Quantity
Computer & UPS
Printer
Tables
Chairs
Sofa Set
Others
Total
Cost
1
1
2
6
1
1
Amount
25,000
10,000
8,000
2,000
10,000
10,000
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
25,000
10,000
16,000
12,000
10,000
10,000
83,000
Pre-Feasibility Study
12.6
Description
Nos.
Owner
Head Cook
Cook / Karigar
Helper
Driver
Total Staff
01
01
02
01
01
06
Salary per
employee per
month (Rs.)
20,000
18,000
12,000
10,000
10,000
Total monthly
Salary (Rs.)
20,000
18,000
24,000
10,000
10,000
82,000
The table above provides detail of human resources required to run a Catering and
Decoration Services Business. Salaries of all employees are estimated to increase at
10% annually.
12.7 Revenue Generation
The revenues are based on assumption that 50 events/year with an average of 400
guests will be organized. The standard menu will be of two items only.
Table 9: Revenue Generation
Events
Banquet Arrangement (Per Head)
Shamiana / Kanats (Per Head)
Marquee Set up (Per Head)
Stage
Water (Per Head)
Food Standard Menu (Per Head)
Total Sales Revenue per event
Total Sales Revenue in a Year
Nos.
400
400
400
1
16
400
Sales
Price (Rs.)
90
15
90
20,000
250
225
Revenue (Rs.)
36,000
6,000
36,000
20,000
4,000
90,000
192,000
9,600,000
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
Pre-Feasibility Study
Utilities
Salaries
Rent
Total
13.
Months
02
02
02
CONTACTS - SUPPLIERS
KITCHEN 'N' RESTAURANT SYSTEMS
102-A, Allama Iqbal Road Butt Lane, Garhi Shahu, Lahore, Punjab, Pakistan
Phone: +92-42-36366590 / 36305989
Fax: +92-42-36305989
KITCHEN CARE
PRESTIGE KITCHENS
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
10
Pre-Feasibility Study
14.
ANNEXURES
14.1 Annexure 1 Income Statement
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11
Pre-Feasibility Study
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
12
Pre-Feasibility Study
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
13
Pre-Feasibility Study
14.4
Technology
List of Equipment
Burners / Fittings / Others
Daigs / Kadhai / Others
Storage Racks
Deep Freezers
Other Kitchen Utensils
Marketing
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never
be allowed to compromise on quality. Price during introductory phase may be lower
and used as a promotional tool. Product cost estimates should be carefully
documented before price setting.
Human Resources
Owner
Head Cook
Cook / Karigar
Helpers
Driver
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
14
Pre-Feasibility Study
Government of Pakistan
www.pakistan.gov.pk
Government of Punjab
www.punjab.gov.pk
Government of Sindh
www.sindh.gov.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
15
Pre-Feasibility Study
Government of Balochistan
www.balochistan.gov.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
90:10
8%
8 Years
10%
10%
9.2%
6 Months
10%
10%
16