Business project

Of

Driving School

BBA-Hons 4th semester (morning) 2013-2017

Submitted by

Palwisha Taj (1021)

Faiza Bashir (1025)

Asad Ali (1036)

Submitted to

Mr. Abdul Manan

University of education okara (campus)

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 Table of contents
1: Executive Summary 4
2: Introduction
2.1: Purpose of Document 5

3: Project Profile
3.1: Critical Success Factors.. 5
3.2: Project Investment Cost 6

4: Legal Concerns 7
5: Business Operation
5.1: Inventory 7

6: Land and Building Requirement

6.1: Land and Construction Mode 7,8

7: Marketing Section
7.1: Target Market.. 9
7.2: Product Line and Mix.. 9,11
7.3: Price 12
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7.4: Place. 12
7.5: Promotion Mix 12,13

8: Human Resource Section.. 14

9: Finance Section. 14,15
9.1: Operational Assumptions. 15
9.2: Projected Income Statements 16
9.3: Projected Balance Sheet 17

10: SWOT Analysis.. 18, 19

11: PEST Analysis 20, 21
12: Instrument Analysis...22 to 27
13: References.. 27

Executive Summary
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This particular pre-feasibility is for starting Driving School. Driving is a
skilful task that needs proper training and knowledge of traffic laws and
regulations. There is a tremendous increase in the number of vehicles
particularly in the urban cities of Pakistan.

Moreover, the government has been taking steps towards effective

implementation of traffic regulations. This has created a demand
for formalized driver training and provision of road safety information,
thereby creating an opportunity for establishing a Driving School for a
prospective entrepreneur.

The project is proposed to be set-up in a suitable locality of any urban

city such as Lahore, Karachi, Sukkur, Hyderabad, Faisalabad, Sargodha, Multan,
Quetta, DI Khan, Nowshera and Peshawar. Keeping in view the nature of
services, there is a minimal requirement of establishing a formal office. The
facility will comprise of 5 vehicles and employs 7 individuals. The total
capacity of the training service center will be to train 720 drivers annually.

During the sessions, trainees shall be familiarized with the basic rules of
driving along with traffic signal system, awareness about traffic rules and
dealing with emergencies and accidents. Total investment in the project is Rs.
40 lakh.

Purpose of Business

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This document is provide/facilitate the potential Investors in driving school
business by providing a through guidance regarding each and every step
such as marketing,finance,HR operations etc.

The objective of the pre-feasibility study is primarily to facilitate potential

entrepreneurs in project identification for investment. The purpose of this
document is to facilitate potential investors in Driving School by providing
them with a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions.

Project profile
Critical success factor

Critical success factor is the term for an element that is necessary for an
organization or project to achieve its mission. It is a critical factor or
activity required for ensuring the success of a company or an organization.

The following significant factors may be taken into account while making

Investment decision.

Hiring of quality trainers / instructors with a special focus on engaging

female drivers.

Effective marketing / awareness of the driving school.

Competitive fee structure offering value for money.

Timely and cost effective repair and maintenance of vehicles due to

major / minor accidents during the training.

Project investment cost

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Following requirements have been identified for operations of the proposed

Business.

Total project cost is RS. 40 lakh.

Cash in hand and bank 1,011,000

Upfront building rent (per annum) 360,000
Prepaid land lease (Annually) 240,000
Total investment 4,000,000

Office equipment

Items No. of Unit cost Total

items
Laptop 1 50,000 50,000
Air conditions 2 100,000 100,000
Telephone sets 2 500 1,000
Chairs 20 15,000 15,000
Multi media 1 20,000 20,000
Tables 2 1,500 3,000
Total 189,000

Vehicle

Suzuki Mehran 5 2,200,000

Legal concerns
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The said project can be a sole proprietorship or a partnership and even it can be
registered under the companies ordinance 1984 with the securities &exchange
commission of Pakistan.

Partnership nature. According to partnership act 1932.

3 partners into this business.

Name of partners:

Palwisha Taj
Asad Ali
Faiza Bashir

Business operations
Inventory

The facility will consist of 5 mehran vehicles.

Tow will be air conditioned/heater faciltiy and three will be simple.

Land and building requirement

Land and construction mode

Land and building for the proposed business may be acquired on rent because
price price of land & construction cost are so high. But we purchase the rent.

Total 10 marla
1 marla for office
2 marla for geraj
7 marla for training ground

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8
Marketing section
Target market

We train doctors,teachers,youngsters, old mens, ladies, and old womens. We

dont train those people who less than 18 years old.

And Due to development andexpansion of roads and increase in the number of

vehicles, the Driving School can be started in any suitable area of a big city such
as Lahore, Karachi.

Product lines and mix

Product lines

Product line 1

In product line 1 we charge low amount and gave low level services.

Product line 2

In product line 2 we charge high amount and gave high level services. In which
we give air conditioned environment/heater facility as well as some refreshment.

Product lines mix

Product line 1

We charge low amount and gave low level

services.

Product line 2

In which we charge high amount and gave

high level services. In which we provide air
conditioned environment and meal.

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 Price
We will charge less then as compare to competitors. Because we are new in
business. We charge 1500 from the each student. Other driving schools like chand
driving school and siraj driving school charge 2000 and 2500.

Place
In driving school distribution channel is direct. Customers will visit the classic
driving school themselves directly. And there is no intermediary involved for
providing our services.

Classic driving school customers

Promotion mix
Promotion are through information related media such as the
web, teen magazines, TV, pamphlets etc. the other half is done through creating a
network of referrals and other relations to provide information to prospective
students.

Cable television will be utilized to aware the public of okara about the
classic driving school.
Pamphlet in Sunday newspaper (Express, Jang, Dawn).
Bill boards will be placed at Depalpur Chowk and at the enternsses to
Okara from Sahiwal and Lahore.

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Human resource section
13
Serial no Title of job No of Salary per Total salary
employee employee
1 Trainer 3 12000 24000
2 Accountant 1 10000 10000
3 Security 2 7000 14000
Guard
4 Tea boy 1 5000 5000

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 Finance section

Description Details
Total equity 100% 4,000,000

Operational assumption

No of working days in a year 288

in a month 24
in a week 6
Timing 9:am to
11:am
Holiday Friday

Income statement

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 Year 1 year 2 year 3 year 4 year
5
Revenue 3600000 4140000 4761000 5475150 6296423
Cost of sales
Cost of goods sold 720000 828000 952200 1095030 1259285

Total cost of sales 720000 828000 952200 1095030 1259285

gross profit 2880000 3312000 3808800 4380120 5037138
General administration & selling expenses
Administration expense 1080000 1242000 1428300 1642545 1888927
Communication expenses 108000 124200 142830 164255 188893
Promotional expenses 108000 124200 142830 164255 188893
Depreciation expenses 360000 414000 476100 547515 629642

Sub total 1656000 1904400 2190060 2518570 2896355

Operating income 1224000 1407600 1618740 1861550 2140783
Gain/loss on sale of office vehicles --------- ---------- ---------- ----------- ---------
EBIT 1224000 1407600 1618740 1861550
2140783
Interest expenses ---------- ---------- ------------ ---------- -----------
Sub total ---------- --------- ------------- ----------- -------------
EBT 122400 1407600 1618740 1861550 2140783
Tax 792000 910800 1047420 1204533 1385213
Net profit/loss 432000 496800 571320 657017
755570

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 Balance sheet

Assets YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Current
Assets
Cash 1011000 1443000 1939800 2511120 3168137 3923707
Upfront 360000 360000 360000 360000 360000 360000
building
rent
Prepaid 240000 240000 240000 240000 240000 240000
land lease
Total 1611000 2043000 2539800 3111120 3768137 4523707
current
assets
Furniture 118000 118000 118000 118000 118000 118000
Office 71000 71000 71000 71000 71000 71000
equipments
Vehicles 2200000 2200000 2200000 1906667 1906667 1906667
Total Fixed 2389000 2389000 2389000 2095667 2095667 2095667
assets
Owner 4000000 4000000 4432000 4928800 5206787 5863804
equity
Retained _________ 432000 496800 571320 657017 755570
earnings
Gain/Loss _________ _________ _________ (293333) ________ ________
on sale of
vehicles
Total 4000000 4432000 4928800 5206787 5863804 6619374
Equity

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 SWOT Analysis

Before making the decision, whether to invest in the driving school or not one
should carefully analyze the associated risk factors. A SWOT analysis can help in
analyzing these factors, which can play important role in making the decision.

Strengths

Location of the project is play a vital role in the successful running of

driving school. The location of our driving school is M.A Jinnah road.
This location finds our customer easily.
Our driving school is registered.
We less charge as compare to other driving schools.
Serving tough competition in the market through quality.
We conduct proper driving classes in which basic driving skill are taught.

Weaknesses

High risk of capital loss on repair and maintenance due to major and minor
accidents the cars during the training processes.
We are new in business thats why our driving school is not famous.
Expected loss at the initial stages of the project.
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 Opportunities
More people are attracting to our school due to promotions.
Since the government is taking positive steps towards the traffic laws and
has made it compulsory for a person to obtain a license for running school
of motoring.
Threats
The unregistered driving school also offers to provide driving license to the
trainees after paying additional charges.
In order to fulfill the requirements of the traffic rules the registered school
have to charge 1500/- to 4000/-per student while the un registered schools
are only charging RS 3000/- to 2000/- giving them the competitive edge.

PEST Analysis

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Political

Political instability.
The Government policy can influence that regulate your business, below 18
years with their willingness.

Economic

Basically based on natural resources. Sometimes decrease in resources

may cause of business recession.
Interest rate fluctuation also effect the business so they must also keep in
mind

Social

When there is change in the societal norms values and traditions it would be
hurdle for females to learn driving
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Technological

Supply issues are mostly influence the business directly because CNG is
more environment friendly as compare to petrol.
LPG is more environment friendly as compare to CNG.

Questionnaire

We are the students of BBA (HONS) 4th semester and have been assigned a
research project. It is purely an educational activity and no need to be worried.
Your nice co-operation will be highly appreciated.

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 Gender

MALE FEMALE

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Age Group

less than 15 years

15 years but less than 30
years
30 years but less than 45
years
45 years but less than 60

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Professsion

Banker
Lawyer
Doctor
Teacher
Student

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 You want to learn driving in 10 days.

Average =1.84

Interpretation
Regarding above mentioned question statement respondents have tendency toward
"neither agree nor disagree

You want to learn driving in 15 days.

Average =1.70

Interpretation
Regarding above mentioned question statement respondents have tendency
toward "neither agree nor disagree

You want to learn driving at morning.

Average =1.64

Interpretation
Regarding above mentioned question statement respondents have tendency
toward "neither agree nor disagree

You want to learn driving at evening time.

Average =2.14

Interpretation

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 Regarding above mentioned question statement respondents have
tendency toward disagree "

You want 30 minutes practice period.

Average =2.02

Interpretation

regarding above mentioned question statement respondents have tendency

toward " disagree "

you want driving should located M.A Jinnah road.

Average =2.22

Interpretation

Regarding above mentioned question statement respondents have tendency

toward " disagree "

You want driving school school should be located at tehcial road.

Average =2.62

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Interpretation

Regarding above mentioned question statement respondents have tendency toward

" disagree"

References

www.google.com

www.wikipedia.com

chand driving school

siraj driving school

Thank you!

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