FINAL PROJECT

Catalonian Bicycles

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Table of Contents

Executive summery

3-8

Introduction of company

3-5

The mission of the company

The proposed objectives

5-6

A brief description of the products

The people behind the business

Key of success

A profit forecast

An estimate of the funds necessary

A well-phrased request for funding

Company Description

9-12

Ownership

Company history & startup plan

9-12

Location detail

12

Product and Services

13-18

Brief description of products services

13-16

Competitiveness on the market

15

Technology

16-17

Prospect for new future product

18

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Market Analysis Components

18-21

Market demand

18-19

Market size, needs, trends

20

Market growth

20

Demographics

21

Culture

21

Barriers to entry

21

Marketing Strategy: Pricing, Promotion, Distribution

22-24

Management Team

24-26

Presentation

24

Personnel Plan

25

Expansion Plan

25-26

Financial Analysis

26-31

Break-even analysis

26-29

Cash flow forecast

30-31

Exit strategy

31

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Catalonian Bicycles
Executive summary

INTRODUCTION

Catalonian Bicycles is an established Bicycle specialty company, producing of new Bicycles,

spare parts and accessories and also offering an extensive range of baby items and toys. While
some of our additional and featured products are baby prams, baby walkers, tricycles and also
providing some exercise machines.
The primary market for Catalonian Bicycles are the students of town and as there no is
increasing so as the demand for Bicycles and its spare parts and accessories is increasing, and
the normal turnover/growth of students is approximately 25% each year. The secondary Target
market consists of laborers who need Bicycles for the completion of their daily work and also the
poor people who cant afford to buy Motor Bicycles and Cars for using in daily routine and the
tertiary market is the greater Rawalpindi and Islamabad Community.

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Ahmed Munir has been the assistant manager of Catalonian Bicycles for Three years, with an
additional seven years of Bicycle industry retail sales and service experience. Ahmed first began
investigating the ownership of a bike business Four years ago, however, the local Rawalpindi
market seemed saturated with company. Realizing that a more practical option would be to buy
an Existing origination, Ahmed Munir approached his current boss. The result of two years of
negotiations will be the sale of Catalonian Bicycle company to Ahmed Munir taking effect on
Jan 1, 2009. The goal will be a seamless transfer of ownership, with staff, bike lines, location,
and operations unchanged.
This Business Plan has been prepared to be presented to ALFALAH BANK Ltd and to the
suppliers of new Bicycles, accessories and spare parts etc. A substantial part of the past years
planning has been negotiations with these suppliers to maintain the current financial agreements
as the business has changed its owner. These negotiations benefited greatly by the good working
relationships Ahmed Munir had developed with the various suppliers' sales representatives, who
advocated on Ahmed's behalf. The suppliers have provisionally granted continuation of existing
terms and dating programs, pending review of this business plan. Names, proprietary
information, and some financials have been disguised in this sample plan.
A graph representing the highlights of the previous 3 years and all the results that were resulting
from it,

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Mission:The mission of the Catalonian Bicycle is that produce and supply more and more bicycle and get
as much profit as they can.

OBJECTIVES
Every business has its own vision and its own method for carrying on a business like that
Catalonian Bicycle Company has its own objectives and plans.

The objectives for Catalonian Bicycle company & Catalonian bicycle Shop are:
0
Continue to provide the high quality of production & sales and services that Catalonian
Bicycles & Catalonian bicycle Shop is known for.
1
Maintain a financially healthy business and validate the trust and advocacy of other
people in support of this business purchase.
2

Repay the start-up loan provided by FAMILY MEMBERS within the first year.

3
Achieve monthly and yearly sales equal to or better than the previous year under the
former owner.

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4
Aim to improve production & sales of Bicycle and baby items as it yields greater profit
with less investment.

Brief Description of the Product

0
Bicycles. We produce & sell new bicycles, predominantly in the mountain bike style and
sport/touring/racing road bikes a distant third. We also sell some used bikes which we take in on
trade as a service to our customers who are buying new bikes.
Accessories. We offer a wide variety of accessories. Locks, computer speedometers,
fenders, cargo racks, comfortable seats, headlights, helmets, water bottles, panniers/back
packs/messenger bags, child seats and trailers, bike storage racks, and auto roof rack systems all
fall in this category. And also we sell toys and bicycle spare parts.

People behind the business

Ahmed Munir.
Zia ur rehman.
Najeebullah.
Syed Zahid hussain.

KEY TO SUCCESS
One of the key to success is that Catalonian bicycles company has their own retail shop and
stores.
Our premier and high visibility location directly adjacent to SIR SYED PUBLIC SCHOOL in
Rawalpindi has been really a great support to our success as the Bicycle sales and service
purveyor of choice to the student community.
The continuance of established accounts payable, sales programs, and co-op advertising
resources by suppliers of Bicycles, accessories, and parts makes the financial plan reasonable
and attainable. Without this support, the purchase of the business would be unacceptably risky.

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Buying and continuing to use the recognized, well respected name Catalonian Bicycle
Company provides continuity for the customers, the owner, and the employees.
Retaining and promoting the current employees of the shop is as important as any other item
here. They are the life of Catalonian Bicycle Company. Long-term relationships with
customers have always been a hallmark of the Catalonian Bicycle Company experience. We
recognize and address our customers by name, and want to be part of their experience.

A profit Forecast
The Average Percent Variable Cost and Estimated Monthly Fixed Cost figures in the table and
chart below are drawn from data in the Profit and Loss and Sales Forecast tables. The table and
chart give us a rough estimate on how much product and service we need to sell each month to
cover all our expenses.

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An estimate of the fund necessary:The total estimate of Catalonian Bicyle company is $194,800. And for this our company need loans and
funds.

A Well Phrased request for Funding:We are requesting our family for funding because we have launched a new technology in bicycle that is a
type of machine that should be fit in a back wheel of bicycle through which a bicycle will move
automatically and this type of technology is not introduce by any other company so we are fully sure that
our business will be successfull and will get as much profit as we can.

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Company description
Company Summary (ownership)
Catalonian Bicycles Company was currently owned by Sheikh Wahid. Ahmed Munir,
was current assistant manager of Catalonian Bicycle Company, and ahmed purchased
Catalonian Bicycle Company from Wahid, acquiring existing inventory, and assuming
outstanding accounts payable and dating program debts to suppliers, location lease, customer
base and information, and Catalonian Bicycle Company' business name and goodwill. Exchange
of ownership will occur on Jan 1, of 2009.

Start-up Plan
The current owner was Sheikh Wahid, had sold the business to Ahmed Munir for
$140,000. To help determine this price, a business valuation specialist was hired. This
professional priced existing store fixtures, tools, and stock. These included Bicycle wall racks,
display cases, track lighting, repair and assembly tools, supply cabinets and storage shelving,
etc., and are part of the purchase price.
The value of the existing company, its reputation, assumption of the business name, existing
client base, etc. is recognized as part of the purchase. It appears as a start-up expense in the
following table. The balance appears as a long-term liability. Additional payments shall be made
monthly.
Inventory, accounts payable, and invoices were tracked for five months to determine an accurate
price of current inventory and amounts of accounts payable assumed.
A deposit equal to one month rent was required by the landlord as assurance in continuing the
current lease to the new owner.
Ahmed Munir is investing some of his own money, partially a home equity loan, in the company.
An additional amount is being invested, as short-term interest free loans, by family
members. This plan calls for these loans to be repaid in the first year.

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Start-up Requirements
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Promotional Materials
Consultants
Insurance
Down Payment
Total Start-up Expenses

$1,600
$250
$300
$800
$350
$10,000
$13,300

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$95,000
$17,000
$8,000
$61,500
$181,500

Total Requirements

$194,800

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$13,300
$181,500
$194,800

Assets
Non-cash Assets from Start-up

$86,500

Cash Requirements from Start-up

$95,000

Additional Cash Raised

$0

Cash Balance on Starting Date

$95,000

Total Assets

$181,500

Liabilities and Capital

Liabilities
Current Borrowing

$2,000

Long-term Liabilities

$130,000

Accounts Payable (Outstanding Bills)

$27,800

Other Current Liabilities (interest-free)

$10,000

Total Liabilities

$169,800

Capital

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Planned Investment
New Owner

$25,000

Investor 2

$0

Other

$0

Additional Investment Requirement

$0

Total Planned Investment

$25,000

Loss at Start-up (Start-up Expenses)

($13,300)

Total Capital

$11,700

Total Capital and Liabilities

$181,500

Total Funding

$194,800

Company Location
Catalonian Bicycle Company is located in Twin City, a major city in Pakistan. This is also the
capital of Pakistan. Outdoor recreation is very popular in the area; there are Bicycle friendly
country roads leading to parks and lakes, as well as an extensive array of mountain biking trails
for the more adventurous.
The shop is also located in pindi. The store is 2,000 sq. ft. of interior space with covered outside
space adjacent to the heavily trafficked sidewalk. Used Bicycles are displayed in this space. One
or two new bikes are displayed as well as a visual draw. All are secured with lock and cable. As a
service to all cyclists, a hose from the air compressor and a pressure gauge are present under the
overhang next to the sidewalk. This primes the pump for quite a bit of spontaneous walk-in
business.

Products and Services

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Brief descriptions of product and services

1
Bicycles. We sell new Bicycles, predominantly in the mountain bike style and
sport/touring/racing road bikes a distant third. We also sell some used bikes which we take in on
trade as a service to our customers who are buying new bikes.
2

3
Accessories. We offer a wide variety of accessories. Locks, computer speedometers,
fenders, cargo racks, comfortable seats, headlights, helmets, water bottles, panniers/back
packs/messenger bags, child seats and trailers, bike storage racks, and auto roof rack systems all
fall in this category. It is not possible to carry every possible accessory, so we try to carefully
chose those which will be most useful or desired by our target markets. When we receive special
requests for a new item, we'll often order several to test the local demand, and if adequate, will
add it to our regular stock.

4
Toys. We are also offering a complete range of different baby products such as baby
prams, baby tricycles, charge-able tricycles and cars and a lot more products.

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5
Parts. Parts generally refer to pieces or materials necessary to the basic functioning of
the Bicycle. Generally, parts are installed during service [see below] and are an additional charge
beyond the service fees. Some, like crank sets, pedals, tires, derailleurs or brakes, are both
integral parts and upgrade accessories. Others, such as headsets, bottom brackets, spokes, chains,
cables, and cable housings are strictly maintenance, though some will be sold to cyclists who
prefer to work on their bikes themselves.

Services
Catalonian Bicycle Shop is a full-service specialized Bicycle shop. Our service offering includes,
but is not limited to:

Free 30-day tune up with every new bike sold.

Free home delivery

Online purchasing option

Quick repairs for flat tires, broken chains, brake cables, etc.

Scheduled tune-ups, replacement of all bearing surfaces, repacking of lubricants, and

adjustments of derailleurs and brake systems.

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Free Installation of all accessories.

Authorized warranty repairs on the bikes.

Custom wheel allayment.

Main Competitors
Catalonian bicycles company has following competitors

BMX.
Phillips.

Chicago.

Chinese Phoenix Bicycle.

Setting aside the discount department stores, Catalonian Bicycle Shop has the following direct
competitors.

IQBAL CYCLE STORE.

IRSHAD CYCLR STORE

SHEIKHS & SONS BICYCLE STORE

ASIMALI CYCLE WORKS

PARACHA CYCLE WORKS

UMER CYCLE WORKS

Several garage mechanics offering repairing service only.

The two strongest competitors are the Oldest Shop in Town namely Iqbal Cycle Store and
Paracha Cycle Works which carries the cache of being the most stable, and most well known.
Our competitive differentiation from these stores is that they deal only in bicycles and their
targeted market is less vast then ours b/c we are offering a vast variety of bicycles of different
sizes and also many baby items and we are also providing some free services.
Competitive Differentiation
The foremost competitive advantage of Catalonian bicycle company is their shop and best
relation with retailer.

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The foremost competitive advantage of Catalonian Bicycle Shop is our location. Our Shop is
located near to some schools in a Major market of the Twin City where there is always a great no
of people present.
A part from that our products and services also differ from our competitors. We are offering a
huge variety of products and services under one roof and also providing some additional and free
services like tune up and free repairs for our sold products.
We are also offering Toys and Baby items which no one else has yet offered to people which
make our shop beautiful and attractive for new customers.

Technology:We have launched a new technology in Bicycle and that technology is a type of machine that
should be fit on the back wheel of bicycle and through which the bicycle can be ride
automatically. Like someone is ridding bicycle through paddles and when he get tired so at that
time , he can press the button through which the machine will start working and the bicycle will
start moving automatically and at that time there will be no need to push the paddles , at that time
only brakes will working and you will just use brakes to balance your bicycle or to reduce the
speed of bicycle. This machine will only start working at that time when the bicycle is on move ,
for instance, a person cant maintain a ride on a bicycle on a long or short journeys for as a long
as he can ( especially old ones ), so when they get tired after that they can hardly push paddle
for continuously or they might have to take a break so as they may need to gain a strength. In
that case when you are on bicycle and gets tired, all you need to do is just simply press a button
which is fitted on handle and it will start the motor automatically. So this motor will start pushing
the bicycle and it wont reduce any speed of your bicycle at the moment when tiredness is on your
feet. All you have to do is to be a controllable on your ride balance and your brakes (make sure
to check on brake everytime just before starting a ride) and by starting this machine it will stop
the force of paddles too. If the machine is fully charged, its range can go up to four hours (4
hours) and the most interesting part of this machine is that it can be charge while moving through
solar energy. The bicycle structure is just same as others, only modified in the back wheel by
adding a motor on it and the most important thing I does look expensive but it cost is just same
as normal bicycles costs.

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Prospects for new future products or services:-

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By seeing our product at the present time we are still looking to improve it more in order to
please our consumer expectations or needs. Our future prospects will be to improve its capacity
and its range and vice versa. We are willing to improve its battery range by adding additional
hours to it and also to reduce its noise in order to improve noise pollution. We also trying to
make the bicycle foldable so that it can be carry or can be taken into any type of places or it may
take less place in order to be kept safely. And we also targeting disable peoples by adding
additional dismental tyres on the back wheel which will be sided to prevent an balancing the
bicycle and also we will apply a brake plates ( just like as motor bike brakes ), so that it will be
much more helpful in situation of braking and controlling.

Market analysis component

Market Analysis
The predominant market segment for Catalonian Bicycle Shop is the student population in
town. We also cater to the local business employees and along with every other Bicycle shop in
town, the greater Twin City population.
In part the local market is driven by the lack of parking. Bicycle transportation is more
economical. Part of the market is PRICE constrained and another part is hooked on the latest
fad, be it frame style, number of gears, or portrayed image. As long as new students arrive each
year our market segment growth is assured.

Market demand

Students and Children are our main target market.

1. Students and Children are mostly interested in Bicycles and the turn over is about 25%
because of their growing age.
2. The lack of parking in the Institutional area and the general ease of bike mobility
throughout Twin City which motivates them to use Bicycles as inexpensive transport.
Athletic pursuits draw them, and the nearby areas for use of mountain and trail bikes
provides a great place to ride.

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3. There is a new enthusiasm for Cruiser bikes, and higher tech style bikes with multiple
gears, good brakes, etc. among the college age population.
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Also, main market for racks, locks, throughout, pannier/bags, fenders, rainwear, etc.

They want convenience for sales and service.

Employees and Labourers are another prime market segment.

Small growth and turnover, but on the whole, the group is pretty stable.

Are willing to commute by Bicycle to work.

They want a stable, comfortable bike and a full range of accessories.

3
When their bikes need service and maintenance, local drop off/pickup convenience is
important.
4
They have families who ride Bicycles also, and will patronize a shop that gives personal
service.

Greater Twin City population

This segment has a choice of going to any bike shop in Twin City, and will probably choose a
shop located closer to their home. They are not the main target market segment of Catalonian
Bicycle Shop, and we market to them casually, only as a collateral effect to our efforts.

MARKET ANALYSIS

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Target Market

Growth Year 1

Year 2

Year 3

Year 4

Year 5

CAGR

Students &
Children

4%

27,500

28,600

29,744

30,934

32,171

4.00%

Employees

1%

6,500

6,533

6,566

6,599

6,632

0.50%

City Population

2%

160,000 163,200 166,464 169,793 173,189 2.00%

Other

0%

2,000

Total

2.22%

196,000 200,333 204,774 209,326 213,992 2.22%

2,000

2,000

2,000

2,000

0.00%

Market size
We choose Rawalpindi as our target Market. Our Market size is not that much
large as we have chosen only one city. This target market seemed very
attractive to use as we saw that many people in Rawalpindi used bike for
traveling and for fun. We didnt increased our market size I.e. we didnt went
to other market segments because we wanted to achieve good amount of
profit level from our franchises in Rawalpindi. The Population of Rawalpindi
is very dense. There are a lot of people who rides Bicycle. Our Actual buyers
in this are more than our potential buyers. So our Market size as compared to
our competitors is more.

Market Trends
Trends in the Bicycle industry usually last for a time. Some of them have been:

1960s - Big rush on 10 speeds.

1970s - Touring bikes became popular.

1980s and 1990s - Huge growth of mountain bikes

1990s - The rumored but exaggerated death of "road bikes" and the unfulfilled prophesy
of a boom in the tandem market.

2000s - Popularity of retro 'cruisers.'

Market Needs

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Our market niche has several needs which we strive to meet:

1. Quality bikes at several price points.
2. Various styles and sizes of bikes, leaning heavily toward the styles most popular with the
student population.
3. Range of accessories most practical in the local setting, such as locks, fenders, lights,
tires, seats, rainwear, etc.
4. Plenty of replacement components and service parts.
5. Friendly personal relationships between cyclists and shop staff.
6. Prompt and convenient service from on-the-spot flat tire fix, to drop in repairs, to
scheduled major maintenance, where the rider can drop their bike off, head to class or
work, and be assured that their bike will be ready for the ride home.
Market Growth
There are many competitors but our service and the innovation is the main thing through which
our business become more famous because we are launching new technology in bicycle that is
(automatic moving bicycle) its a type of machine that should be fit in back wheel of bicycle and
that is the point through which our business become more growth able than others.

Demographics
By launching a machine able technology in bicycle, we have just launch this technology by
keeping eyes on old and young generation. For old people this technology is necessary because
old people cannot ride a bicycle for a long time because their bones are weak and they become
quickly tired, so for old people it is easiest way to travel on bicycle because when they get tired
then they just have to press the button and the bicycle will start moving automatically and in this
way the old people will not need a much power while traveling on bicycle. And for youngster its
a kind of entertainment, they will just use an automatically moving bicycle for fun or for going
here and there.

Culture:This type of technology (Automatic movable bicycle) can be used and understand by any type of
culture. In Pakistan mostly low rank people use bicycle for their self needs, thats why we are

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introducing our product in Pakistan in order to help them and satisfy their needs. At the present
time people are willing to get a best quality product as well as on affordable cost as we have seen
our product it can be used as a bicycle or it can move on its own just like a bike so its like 2 in 1
product. So the culture over here is that mostly low rank people use bicycle and for them an
automatic moving bicycle would become a precious thing.

Barriers to entry:In every new start up business, at the present time the biggest barrier is the inflation because of
inflation the material prices, labor prices and so on are gone so higher that it may take much
more investment than we budgeted about. Because nowadays its hard to be located cause of
higher prices land. So that in order to prevent a changement of places and so on to take upon a
competitive at this high cost, it may take time to attract consumers or we may stay in loss for a
long term in attracting them. At the present time the biggest barrier for opening any type of
bicycle company , china may be the biggest problem because they supply their product all over
Pakistan in order to compare to other bicycle companies e.g. , BMX , Phillips etc. A government
rules and regulations also affect it by introducing new law or by introducing a tax into it by
importing or exporting parts and so on, through which a business may become harder.

Market Strategy
Information on our sales and marketing efforts are discussed in the following sections.
Our marketing strategy seeks to optimize our advantage of prime location. We want the student
population to see us as their own bike shop. We want them to see us as part of their daily
experience, and a shop they can depend on for quick repair and maintenance service.
Marketing Programs
Our marketing programs are locally focused, where we can effect our main target market.
Advertising. Advertising is a major source of attracting customers and we have focused on that a
lot and our 30sec commercial will run on each Cable Network just for RS 4500 a month.

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Print advertising. We will keep a small 3 column inch ad appearing on a recurring schedule in
the Jang Newspaper. To boost citywide awareness of our sales specials we will also run slightly
larger ads in the Metro burg Bombast-Obfuscator during the weekends prior to the sale.
Back to school specials We are offering free locks and cables and also some attractive horns and
other complimentary goods for free to students.
Spring special. This coincides with the beginning of spring term, but we will direct some of our
advertising at the wider population as people hang up their skis and tune up their bikes.
Website. Our content site will also serve as a marketing medium. We offer downloadable maps
of the city bike routes, maps of rides outside the city area, give information about the store, and
announce sales. We believe that cyclists will regularly access our site for the valuable
information we will provide, and this will reinforce their of awareness of Catalonian Bicycle
Shop, and we will become their bike shop of choice.
Pricing Strategy
Retail
Pricing of Bicycles is very tight with a markup of between 20% and 30% depending upon the
brand and model. Many people believe that Bicycles are priced like automobiles and are open for
negotiation, and make almost insulting offers. The shops have little margins here.
Parts and baby items are generally offered at fixed prices. Some small items cost more in
handling and sales than they do to buy from supplier. These can be double and triple keystone,
because customers won't buy them if they don't have a minimum perceived value. On the plus
side, these are great "throw-in" items used to close the sale of a bike. When new technology
arrives in Bicycles, and if the supply is limited, almost any price can be demanded.
Other accessories, such as step-in pedals, pannier racks, helmets are sometimes heavily marketed
by the manufacturers. While this drives demand and brings people into the shop to get these
items, the suggested manufacturer's retail price may limit markup.

Service
Standard repairs are then priced based upon an average time for completion. Some repairs, such
as a flat tire, are limited by customer perception of difficulty. Examples:

Flat Tire 20.00

Install Fenders 25.00

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Brake Adjustment -- 25.00

Tune-up -- 100.00

Overhaul -- 100.00

All parts used in repairs are priced at keystone, and added to the labor service charge.
With several other Bicycle shops in the city, there are some price constraints based on
competition. Coupons and specials can balance price ceilings by drawing in customers.
Sales Strategy, promotion
Sales vary season to season and with the academic school year. Surprisingly, summer is the
slowest season because there are fewer students in town. Business picks up in August with the
return of the students and staff, and flourishes in September. Accessories and rainwear sales
increase in the autumn and early winter. Repairs and maintenance are steady. Holiday sales are
brisk, though generally leaning again to accessories, parts, rainwear, gloves, helmets, headlights,
etc. Winter sales are moderate, and then pick up in springtime as people put away their skies and
look forward to local outdoor activities, longer daylight hours, and drier weather.
We have three large sales promotions each year.
1. Back to school in August/September. This is our biggest sale of the year. New Bicycles,
locks, helmets, racks, fenders, backpacks. We always search for a special purchase of
good quality, but value priced bikes for this sale such as year end models, slow sellers,
new line looks to break into the market. These bikes will almost always sell out to
students seeking great values.
2. Year-end holidays. This also overlaps the beginning of Winter term. The retail market
demands some participation in this annual buying frenzy, yet, this sale produces lower
revenue than our other two events. We sell fewer bikes, and more accessories and
clothing.
3. Spring. This coincides with both the return of nice weather, and beginning of Spring
term. We feature new Bicycles, and repair/maintenance/tune-up specials. It is important
to us to have a good selection on hand at this time. When people decide they want that
new bike, they want it now. If we don't have the bike then, and make the sale
immediately, many riders will decide that they really can get another season out of their
old bike, and will spend their discretionary income on some other purchase.

Distribution:-

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Catalonian Bicycle is an organization that produce bicycles and they distributes through their
own shops. Catalonian bicycles have their own outlets like they produce their own bicycles and
sell them in their own shops. Catalonian bicycle sell their outlets to public through their shops.

Management
Management
The CEO of the Catalonian Bicycle company is Mr.Ahmed Munir and Vice President is Mr.Dj
Zia ur rehman and Sales Manager is Mr.Apocho Zahid Hussain and Financial Manager is Mr.
Najeeb Bangali and Plant Manager is Mr. Ali Nagri.
The current assistant manager, of Catalonian Bicycle Shop is Waseem Choosne, and will manage
the business. Waseem has a BBA degree in Management and His passion however has always
been cycling. He originally worked at his local bike shop when he was in college. After several
years trying to find suitable work in his degree field, Hub gave up chasing the chimera of these
fields and decided to work with something substantial, and returned to his youthful enjoyment of
Bicycles.
He attended two of the major Bicycle mechanic training programs. These courses covered
mechanical service and maintenance, frame building and repair, wheel building, and shop
organization, sales, and management. He has 12 years of progressively responsible experience in
Bicycle shops with the last five at Catalonian Bicycle Shop.
One of the other full-time employees, Hammad has expressed interest in learning more about the
bike industry and he will be promoted to be the new assistant manager. Asif lala has been with us
for three years. He loves to Bicycle, and has kept his contacts with the student active. His
knowledge and expertise draws many bicyclists to our store where they know they will get the
care and attention which is usually missing from traditionally male staffed shops.
Additional resources are:

Alfalah Bank Ltd.

Zia ur Reman, a partner who advised on the sale/purchase arrangements.

Personnel Plan

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The staff of Catalonian bicycle company is based on three managers (sales manager, financial
manager and plant manager), an CEO and vice president. There are many employees that are
working under that managerial group.
The staff of shop will consist of Waseem ahmed, the new assistant manager, Hammad shabbir,
and two other full-time employees Asim, and Awais.
To meet the need for additional help during the year, Catalonian Bicycle Shop hires two to four
part-time employees. We look for people who are enthusiastic about cycling, and who have a
mechanical aptitude. Some of these folks have worked for us throughout their life. Their hours
vary depending on the stores' needs and their schedules

Personnel Plan
Hub Freewheeler
Vel O'Cipede
Dee Raylure
Jean-Baptiste Kapsyze
Part-time Employees
Total People

$34,800
$27,000
$23,400
$19,800
$18,900
5

$36,540
$28,350
$24,570
$20,790
$25,200
7

$60,000
$30,000
$25,799
$21,830
$25,200
7

Total Payroll

$123,900

$135,450

$162,828

Expansion plan
If our business run successfully then our expansion plan is that we will open many more new
branches in other cities of Pakistan so we target following cities in Pakistan :

Lahore.

Multan.

Peshawar.

Karachi.

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Financial plan
Financial Plan
This financial plan was developed based upon previous years' data for the existing store, tracking
trends in revenues and expenses. A five-month track of sales, accounts receivables and payables,
and inventory from a year-end benchmark was made.
The seller, buyer, and the accountant worked together on the plan to balance optimism with
reality.
An attorney was consulted on specifics of the sale contract.

Break-even Analysis
The Average Percent Variable Cost and Estimated Monthly Fixed Cost figures in the break-even
table and chart below are drawn from data in the Profit and Loss and Sales Forecast tables. The
table and chart give us a rough estimate on how much product and service we need to sell each
month to cover all our expenses.

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Projected Profit and Loss

In negotiating the smooth transition in ownership, the landlord agreed with Waseem ahmed to
continue the current lease unchanged. As surety, one month's rent was required as a deposit at the
time of sale. This is shown in the Start-up table. Further, the landlord agreed that if, after 11
months operation the new company was solvent and current in lease payments, that the deposit
could be applied to the twelfth month's rent.
The mid-summer months of July and August are slow months when a large part of the student
population is gone on summer break. The mid-winter months are traditionally loss months. The
weather is the most inclement and discretionary income is at its lowest after the holiday binges.
However, we try to keep our entire staff on board to work on our own inventory, store
refurbishing, and staff training.

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Pro Forma Profit and Loss

Sales
Direct Cost of Sales
Other
Total Cost of Sales

Year 1
$501,200
$177,680
$0
$177,680

Year 2
$576,380
$204,332
$0
$204,332

Year 3
$662,837
$234,982
$0
$234,982

Gross Margin
Gross Margin %

$323,520
64.55%

$372,048
64.55%

$427,855
64.55%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$123,900
$24,866
$12,000
$1,800
$3,600
$4,200
$88,000
$30,975
$0

$135,450
$27,420
$13,500
$1,800
$3,600
$4,500
$88,000
$33,863
$0

$162,828
$30,521
$15,000
$1,800
$3,780
$4,725
$88,000
$40,707
$0

Total Operating Expenses

$289,341

$308,132

$347,361

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

$34,179
$46,179
$8,433
$6,445

$63,916
$77,416
$6,730
$14,296

$80,494
$95,494
$5,040
$19,178

Net Profit
Net Profit/Sales

$19,302
3.85%

$42,889
7.44%

$56,276
8.49%

Projected Cash Flow

The Cash Flow chart and table reflect the seasonality of Bicycle sales and the varying payment
programs. At times, the business is inventory heavy, stocking up for the beginning of school
rush, or specific sales. At other times, there is substantial negative cash flow as long-term
accounts payable, net 90, net 60 payments coincide with regular net 30 invoices.

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Pro Forma Cash Flow

Year 1

Year 2

Year 3

Cash from Operations

Cash Sales
Subtotal Cash from Operations

$501,200
$501,200

$576,380
$576,380

$662,837
$662,837

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$0
$0
$0
$8,000
$0
$0
$509,200

$0
$0
$0
$0
$0
$0
$0
$576,380

$0
$0
$0
$0
$0
$0
$0
$662,837

Expenditures

Year 1

Year 2

Year 3

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations

$123,900
$335,368
$459,268

$135,450
$377,512
$512,962

$162,828
$426,127
$588,955

$0

$0

$0

$1,800

$200

$0

$10,000

$0

$0

$22,000

$24,000

$24,000

$0
$1,200
$0
$494,268

$0
$0
$0
$537,162

$0
$0
$0
$612,955

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$14,932
$109,932

$39,218
$149,150

$49,882
$199,033

Cash Received

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current
Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

SWOT Analysis
Strength

The company have their own retailer shop.

They provide home delivery services.

They launch a unique technology.

They also provide online selling.

They give give donation and charity.

Weakness:

The company has only one branch.

Challenges of the seasonality of the business.

Opportunities

The company has to provide more branches.

Area is experiencing population growth.

Colleges are located near the retailer shop.

Threats

Price pressure as well as large discount change.

Fluctuation in the economy that effect discretionary spending.

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Exit Strategy
If our business goes down and doesnt work or we continuously get loss in it. So we will just sell
our business or our property and the money that we get by selling our shops will be divided
among partners. And we will consider other options that are open to us.

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