American International University - Bangladesh

(AIUB)
Entrepreneurship Development

GROUP – 4

Project – Old Age Home

Prepared for:
Sayeed Nayeem Emran

Prepared by,

Akter Halima
01-02635-3 (4)
Salma Akter
01-02388-2 (31)
Parvin Farhana
01-02691–3 (25)
Mumtaz Shaheen
01-02693-3 (45)
Section – B
Date of submission
9/5/2005
 Table Of Content

Page number

1)Acknowledgement. 1

2) Executive Summery. 2

3)Project Description segment. 4

3.1.Introduction
3.2.Entrepreneurship Development Factors. 7
3.4. Factors of business plan 9
3.5. Uses of business plan 10
3.6.Project plan Element
3.7. Project Life Cycle
3.8. Project Organization

4) Objectives
14
5)Location 15

6)Feasibility study of a business plan

17
. 7) Marketing Aspects

7.1. Survey questionnaires result 36

7.2. Key steps for analysis 25
7.3. Characterization of market 25
7.4. Marketing plan 28
7.4.1 Pricing 28
7.4.2 Promotion 28
7.4.3 Services

8) Financial Aspects 17
8.1. Source of cash 17
8.2. Uses of the Cash 18
8.3. Cost of the Project 20
8.4. Income Statement 21
 8.5. Balance Sheet 22

29

9) Organization & Management Aspect

9.1. Management 30
9.2. Description of management

: 31

10) Technical Aspect

10.1. Gant Chart 33

11) Weakness 34

12Findings 34

12) Conclusion 35

13) References 42
 1. Acknowledgement

We would like to thanks Mr. Sayeed Nayeem Emran, instructor of the

course of Entrepreneurship Development Because of giving the opportunity
to work for a real project of old age home, this project give a real concept of
financial, marketing, organization &management. We had some barriers and
time and information.
Our honorable teacher helped us a lot of idea to create a new idea of a
business plan that is Old Age Home for purpose of social weal fear with
profit.

We had some barriers and time limitation to do project of old age home;
otherwise we probably could do more accurate analysis.

We are,

Salma Akter 1-02388-2 (31) ___________________

Akter Halima 1-02635-3 (4) ___________________

Parvin Farhana 01-02691-3 (26) ___________________

Mumtaz Shaheen 01-02693-3 (45) ___________________

 2. EXECUTIVE SUMMARY

OLD AGE HOME

Old age home is a new concept of Bangladesh .As our social economic
cultures are going to be change people are going to busy day to day, and
they couldn’t properly give the impression of being after their partners. The
concept is worked for them and those purpose. The concept is worked for
them. Many people of our country are stayed in abroad and there is no one to
give the impression of being after their parents appropriately.

This is our social welfare foundation to assist the old people. But not for
those people who went to sent their parents criminally means they have time
to look after parents but they doesn’t want to keep their parents with them.

The overall objective of this project are to remove loneliness, to proper

nursing, to take care of them, to remove the mentally torture.

Our location will be Uttara and this a service center and partnership
Organization and operation time hours 24 and no competition is accessible
in Bangladesh up to this period but in the future it its demand will be high.

Facilities provided by the old home are Proper food service; Provide the best
accommodation, Gymnasium facilities, Treatment, Staff, Entertainment,
Internet facilities.
We collect the data by Primary survey and secondary survey. Survey areas
are Uttara, Dhanmondi, Gulshan, Baridhara, and Banani

Project Cost - 98,00000

Sources of Cash – Bank loan and Owen investment.

Pricing strategy of our business plan is that, final price for per person is
10,000TK per month. Discounts are also given to those clients who pay their
amounts yearly basis.
According to government’s policy, the authority will have to pay 15% taxes
and duties upon their overall yearly profit

Management is getting things done working with other through planning,

organization, directing and controlling in order to achieve pre ermined goals
and objectives.

There is one marketing officer under whom one assistant marketing

officer works for different purposes like advertisement for our
organization whether it is by advertising in newspapers or by personnel
selling.
This is our profitable organization having profit in the very first year.
People of our society didn’t take our idea negatively. As social culture of
Bangladesh has been changed a lot. People ’s thoughts have been developed
a lot also. People who are living abroad, who work for daylong cant take
care of their parents. This type of organization is very much helpful for
them.
People living abroad appreciated our idea very much.
According to our primary survey. This is a very innovative idea while
starting a center for old –age people.
Government policy was not that much strong while starting this project.
 3) Project Description Segment.

3.1.Introduction

Old home center is a new concept of Bangladesh .As our social economic
culture are going to be change people are going to busy day to day, and they
couldn’t properly give the impression of being after their partners. The
concept is worked for them and those purpose. Basically in our urban area
people are generally work (both husband and wife) all the day long and
principally service couple couldn’t take care their parents properly .The
concept is worked for them. Many people of our country are stayed in
abroad and there is no one to give the impression of being after their parents
appropriately .We want to work with those parents to start our old age home
center business and that’s why obovsly our target customer is higher class of
up to 50 years old people or parents.

This is our social welfare foundation to assist the old people. But not for
those people who went to sent their parents criminally means they have time
to look after their parents but they doesn’t want to keep their parents with
them.
 3.6.Project plan element

• Overview:

It is directed to top management and contains a statement of the goals of

the project, a brief explanation of their relationship to the farm’s
objective, a description of the managerial structure that will be used for
the project, and a list of the major milestones in the project schedule.

• General Approach:

This section describes both the managerial and the technical approaches
to the work. The technical discussion describes the relationship of the
project to available technologies.

• Contractual Aspects:

This critical section of the plan includes a complete list and description of
all reporting requirements, customer-supplied resources, liaison
arrangements, advisory committees, project review and cancellation
procedures, proprietary requirements, any specific management
agreements (e, g., use of subcontractors), as well as the technical
deliverables and their specifications, delivery schedules, and a specific
procedure for changing any of the above.

• Schedules:

This section outlines the various schedules and lists all milestone events.
Each task is listed, and the estimated time for each task should be
obtained from those who well do the work.
• Resources:

There are two primary aspects to this section. The first is the budget.
Both capital and expense requirements are detailed by task, which makes
this project budget. One-time costs are separated from recurring project
costs. Second, cost monitoring and control procedures should be
described. In addition to the usual routine elements, the monitoring and
control procedures must be designed to cover special resource
requirements for the project.

• Personnel:

This section lists the expected personnel requirements of the project.

Special skills, types of training needed, possible recruiting problems,
legal or policy restrictions on work force composition, and any other
special requirements, such as security clearances.

• Evaluation Methods:

Every project should be evaluated against standards and by methods

established at the project’s inception.
 3. 7) More on the Project Life Cycle:

Dames and Brandt also break the project life cycle into four stages:
conceptualization planning, execution, and termination.

1. Old age home Formation

First, the technical objectives of the business must be specified to a

degree that will allow the detailed planning of the buildup stage to be

Accomplished. Second, commitment of resources to the business must be

forthcoming from senior management and from functional managers.
Third, the priority of the old age home, relative to the priorities of the
parent organization’s other business, must be set and communicated.
Fourth, the organizational structure of the business must be established to
an extent sufficient for the WBS and a linear responsibility chart, or its
equivalent, to be prepared during the next stage of the life cycle.

2.Old age home Buildup:

As the project’s plans become detailed, conflicts over technical issues

build again, conflicts between the PM and the functional areas tend to
predominate. Usually, the functional departments can claim more
technical expertise than the PM, who is a “generalist.” On occasion,
however, the PM is also a specialist. In such situations, discussions
between the functional manager and the project manager about the best
technical approach often result in conflict. The total level of conflict is at
its highest in this transition period.

3.Main Program:

Technical conflicts are frequent & serious during

the main program stage . Also like schedule conflicts, the source of
technical conflict is somewhat different than in earlier stages.
4. Project Phaseout : In the main program stage, schedule is the major
source of conflict during business phaseout. If schedule slippage has
occurred in the main program stage , the consequences will surely
be felt in this final stage. Technical problems are comparatively rare
during phaseout because most have been solved or bypassed
earlier.

In our business plan is based on yearly basis. After each year the
project is calculated then the activities are done again for the
coming year as like the previous year and so on .

3.7. Project organization:

Pure Project Organization

1) The business owners have full authority over the project.

2) Structures are simple and flexible this type of organization

3) Motivation and commitment are high in this pure project organization.

 4) Objectives:

The overall objectives of this report are given below:

• To remove loneliness of that parents whom children live in abroad

and they live here alone.

• To proper nursing or treatment that stayed in long-term sickness.

• Couples who are doing job and their parents live alone in the home
and not available servant to take care of them, from this reason to give
proper treatment of them (Parents), we are going to open or start the
Oldage Home Center.

• To remove the mentally torture of those parents whom children can’t

• Look after them, and feel as like problem of them.

5) Location:
Our location will be Uttata, sector 3.

Reason for select the location:

1. Environment

2. Transportation facilities

3. Lower house rent

4. Survey result find that Uttara will be our best location to start our
business.

Schedule:

1.Financial aspects 21-3 –05

2.Marketing aspects 30 – 3 – 05

3.Technical aspects 6 -4– 05

4.Organizayion & management aspects 20 – 4 – 05

5. Final project 9 – 5– 05

Description:

Type of business : Service center.

Business form : Partnership organization.

Operation time : 24hours.

Competition : No competition.
Facilities provide of them:

• Proper food service: Service them on accurate time and food quality
will be balance with their physical demands. Not only to give them
accurate time and balance diet food but also to take care with nurse by
standing on them to look after properly.
• Provide the best accommodation: Air conditioned facilities, TV,
attached toilet, corridor, veranda, phone facilities, care facilities,
garden etc.
• Gymnasium facilities- there will be a physician or gymnasium person
to guide them properly and all equipments are available.
• Treatment: There will be 2 doctors, and 5 nurse for giving them
proper treatment.
• Staff: Staff provide for them. Four women there will be maidservant
and man servant for man.
• Entertainment: Prayer room for Namaz. If any one who want to paint /
singing / play have those facilities. There will be also have Internet
facilities to communicate with their children whereever they wants
any time.

Area of the survey / data collection:

We selected to survey in Uttara, Dhanmondi, Gulshan, Baridhara,
Banani areas both of Parents & children where fifteen were parents
& rest of twenty were children whom parents live with them . The
total thirty five parents & children we surveyed in those areas .

16

6) Feasibility Study of business plan:

1) Financial Aspects

2) Marketing Aspects

3) Organization & Management Aspects

 Marketing Analysis

8.1 Key steps for analysis:

Situational Analysis and Specification of objectives: The marketing concept
means that on organization aims all its efforts at satisfying its customs at a
profit. Our objectives are to provide better living standard to the old people
while having a good and healthy profit.

8.2 Characterization of Market

Effective demand in the past and present: According to our primary and
secondary information. Our concept becomes very clear that in past,
there was no existing of old age home in Bangladesh. But in recent few
years, it is being accepted in our society by basically those people whose
children are of their old parents. Couples both work are also have the
opportunities for their parents to give a better living standard by
providing not only food and clothing but also by

• We have decided to establish an old age home in Uttara. Based on the

location and expenses over therefore rent servicing, nursing,
transportation, food, entertaining then. clothing, medical and
entertainment facilities, We have first of all calculated the cost and
then we have fixed up a reasonable price to become a client there so
that from that price we have some amount of healthy profit.

• Consumers:
Basically, old people are the targeted customer of our business plan.

• Competition: According to our survey, there is no competition in the

market based on old age home.
 • Government Policy: There is no government restriction which
starting such this kind of organization. There is a specific percentage
of tax we will have to pay for our business.

8.3.) MARKETING PLAN:

8.3.1) PRICING:

• Pricing strategy of our business plan is that , final price for per
person is 10,000TK per month .

• Special discounts are given to those clients who are related or came
through our organization’s employees. Discounts are also given to
those clients who pay their amounts yearly basis .

• According to government’s policy, the authority will have to pay 15%

taxes and duties upon their overall yearly profit.
 8.3.2.PROMOTION:

• Advertising: For advertising purpose, we have gone through

loading

• Newspapers: to attract customers both in our nation & in abroad

whom parents live in the country alone & couldn’t anyone to
take care of them properly, we want to know about us of those
children so that they can come to know about what is old age home
and the facilities we are providing here.

• Web Page:

We have advertised through our web-page of our organization to

reach quickly to our real customers & communicate with them
more faster than other communication levels. People basically who
living in abroad ,our main customer to attract & come to know
about us & contact more faster with us & to response through this
way.

• TV Channels:

We have gone through TV advertisements locally as well as in

abroad by the Bengali TV channels like ATN Bangla, NTV , BTV
World , & in UK the channel moved “Sonar Bangla”.

• Personal selling:

Employee, Partner, all most every related to this organization hearty

tried to go to persons who are familiar to them and tried to make them
understand what the old age home is and how they can be facilities by
this organization.

8.4.3.SERVICES:

• User education:
There are different education service programs for the clients of this
organization like the authority provides physician for proper healthy
education psychetist for their mental growth. Computer teacher to teach
them basic computer learning and so on.

• After sales service:

The organization provides such as after leaving the old age home, if any
client wants to come here they can, they can join in different educational
service provided by the organization services provided by the
organization they can come here for refreshment purpose etc.

7)
Financial Aspects :

1.sources and uses of cash.

2.capital equipments list

3.Balance sheet

4.Project income statement

5.Pro-forma and cash flow by month

7.1. SOURCE OF CASH:

1.Personal investment (4*Tk 17.5 lakh) Tk.70 lakh

2.BankLoan:

Long term loan Tk.20 lakh

Mortgage loan Tk.8 lakh

Total Tk.98 lakh

7.2
.
USES OF CASH:

(1)House rent Tk19, 20,000

(2)Decoration Tk.60,000
(3)Furniture Tk.14,84,000
(4)Kitchen appliances Tk.2,67,500
(5 )Working capital Tk.5,73,500
( 6) Car Tk.40,00,000
(7)Fast Aid Tk.20,000
(8)Jim Tk.5,00,000
(9)Entertainment Tk.80,000
(10).Advertisement Tk.1,00,000
(11)Cash Tk.6,00,000
(12)Library Tk.50,000

Total Cost: Tk.98,00,000

Expenses/Month:

1) Rent of the House: Tk. 120,000/Month

2) Food
Breakfast: Tk. 56,100/Month
Lunch: Tk 135,000/Month
Tea break: Tk. 42,000/Month
Dinner: Tk. 84,000/Month

3)Physician/Consulting:

Per Person : Tk.50,000/Month

Doctor fees: Tk. 35,000
(20,000 + 15,000)
Nurse: Tk.25,000 (5 Nurse)
Staff: Tk.35,000
(35 Staff * 1,000)
Guard: Tk.4,000 (2,000 * 2 )

Driver: Tk. 25,000

(5 Drivers, 5 Microbus)

4) Entertainment

Spécial évents (Pahela Baishak, Eid etc.) Tk.20,000

5)Furniture :

TV: Tk.1,00000
AC: Tk.15,00,000
Bed: Tk.2,88,000
Dining Table: Tk.80,000
Chair: Tk.80,000
Fan: Tk.66,000
Sofa: Tk.110,000

6)Others :

WASA : Tk.2500
Eletricity : Tk.10000
Gas : Tk.1400
Telephone Bill : Tk.3000
 Inter Net : Tk.1500
Dish Charge : Tk.500

Total Tk. 50,000

PROJECT COST

1. Advance (house rent ) Tk19,20000 ( 80,000*24 month )

2. Decoration Tk.1,00,000
3.Furnitures Tk.14,84,000
a)Bed Tk.28,8000 ( 6000tk * 96person)
b)Dining table Tk.80,000 ( 1Table & 40 chair )
c)Sofa (drawingroom ) Tk.1,00000 (10000tk *10 set sofa)
d)TV Tk.1,00000 (1 home theater )
e)AC TK.15,00000 (30,000tk*50pieces)
f)Fan Tk.66000 (55fan* 12000 )
g)Almira Tk.250000 (5000tk*50 )
h)Reading table Tk.165000 (55table *3000 )
i)Computer Tk. 175000 (35000tk *5computer
j) Sofa ( Single sofa ) Tk.110000 (55sofa *2000 )
4.kitchen Tk.2,67,500
a)freeze (Deep & Normal ) Tk.100000 (2deepF.*30000+2norF.*20000 )
b)Oven Tk.20000
c) Toaster Tk.7500 (1500*5 )
d) Washing machine Tk.40000 (2*20000)
e) Others Tk.100000
5.Working capital Tk5,73,500
a)doctor Tk 25000 (2doctor)
b Nurse Tk25000 ( 5nurse)
c)Cleaner Tk.7500 (1500*5)
d)guard Tk.6000 (3*2000)
e)Gim instructor Tk.10000 (5000*2)
f)Manager Tk10000 ( 10000*1)
g)MD Tk.100000 (25000*4 )
h)Driver Tk.25000 (5*5000)
i)Wasa Tk2500
j)cooker Tk.25000 (5*5000 )
k)Installment charge Tk.4000 (2* 2000)
l)food cost Tk.3,17,100
Breakfast Tk56100
Lunch Tk 135000
Tea break Tk 42000
Dinner Tk 84000
m)Electricity Tk.10000
n)Gas Tk.1400 ( 350 *4)
o) telephone bill Tk.3000
p)Internetbill Tk .1500
q)dishcharge Tk .500

6.Car (micro) tk4000000 (5*800000)

7.First aid Tk.100,000
8.Jim Tk.5,00000
9.Entertainment(specialevents Tk.80,000
10. Advertisement Tk1,00,000
11.Cash Tk.6,00000
12.Library Tk.50000
Total project cost 98,00,000
7.4. INCOME STATEMENT

Income statement

Revenue 5400,000
Less cost of good served 2858,000
Gross profit 2542000
2502,
Selling And administration expanse 000
Depreciation 0
Operating Profit (EBIT) 40,000
Interest Expanse 20,000
EBT 20,000
Tax
(15%) 3,000
Net
profit
or loss 17,000

Pro Forma
Statement

Suppose Sales increase by 20% and also 20% percent increase in cost
.and the pro forma income statement would thus be :
 Income statement

Revenue 6480000
Less cost of good served 3429600
Gross profit 3050400
Selling And administration expanse 3010400
Depreciation 0
Operating Profit (EBIT) 40,000
Interest Expanse 24000
EBT 16,000
Tax
(15%) 2,400
Net
profit
or loss 13,600

7.5. BALANCE SHEET

Balance Sheet

Current asset
Cash TK.5, 00,000
Accounts receivable 0
Inventory 0
Prepaid expenses TK.19, 20,000
Other TK.16, 28,500
TOTAL TK.24, 20,000

Fixed asset
Furniture& fittings Tk. 1751500
Vehicle Tk.40, 00000
Machinery Tk .5,00,000
Improvements 0
Building & land (net) Tk19, 20000
Total fixed assets
Total assets Tk.98, 00,000

Liabilities& net worth

Accounts Payable 0
Current portion
Total current liabilities TK.8, 00,000
Bank loan TK.20, 00,000
Total liabilities TK.40, 00,000
Net worth :
Owners equity TK.70, 00,000
Total liabilities & net worth. TK98, 00,000

Break event, Projected cash flow, Degree of financial leverage

Payback period, NPV (project), Ratio Analysis.

1)At BE; EBIT = 0

TR=TC
P * Q = TVC +TFC
Q=TC / (P-VC) unit
Here Q = 45person.
Price/ person = 10,000 /=, V. cost =6,000/=

TFC = 19,20,000
Q = 19,20000 / 4000

= 41 person.

2) Projected cash flow:

EBIT- = 40,000
+ Dep =0 (Because very first year)
-Tax (15%) = - 3000

Projected C.F = 37,000

3) Degree of financial leverage (DFL) :=EBIT / EBIT – Interest

= 40,000/40,000-20,000

=2

4) Payback period:

Pay back = 70,00,000 / 14,00,000

= 5 Years

6) NPV (project) = - 70,00,000 + 70896316

= 89316

7) Ratio Analysis

7 .1) Current ratio = Current Asset /Current liabilities

= 24,20,000 /20,00,000
 = 1.21

7.2) Debt to Total Asset = 28,00000/9800000

= 0.28 * 100

= 28%

7.3) Dept to Equity = 28,00,000 / 70,00000

= 04 *100

= 40%

7.4) Profit Margin = 17,000 / 54,00000

= 0.00315
= 0.315 %

ROA (Return on Asset) = Net income / total Asset

= 17,000/ 98,00000
=0.0017
= 0.17%

ROE (Return on Equity) = Net income / Total Equity

= 17,000/ 70,00,000
= 0.0024
= 0.24%

Dupont Analysis

ROA = Profit Margin * Asset Turn over

= 0.315 %*
 Table of Financial Analysis

No
1 Q = 19,20000 / 4000 41 persons
2 Projected cash flow: Tk 37,000
3 Degree of financial 2
leverage
4 Pay Back period 5 Years
5 NPV (project) 89316
6 Current ratio 1.21
7 Debt to Total Asset 28%
8 Dept to Equity 40%
9 Profit Margin .315 %
10
11
12
13

9) Organization & Management Aspects

9.1.Management :

Management is getting things done working with other through planning,

organization, directing and controlling in order to achieve predermined goals
and objectives .

9.2.Description of management and organization structure:

Graph

• Managing director :

Managing director is hired by the top most authority that is by the

investors. He acts like the top most person of this organization .
 • Directors:

There are three directors in this organization. Three investors are

working as directors. One investor here is just sleeping partner.

• Manager:

The directors of the organizations hire one responsible person for this
post. Under this person four different departments i.e. Health, Education,
Marketing, Finance departments work.

• Health department:

There are two health or medical officers under whom several nurses and
medical attendances work . Health officers work on hour basis . One
person is for general health care facilities and another is specialist on
different medical cases.

• Education department:

There is one education supporting officer under whom a person works as

a Liberian as well as internet operator . The education officer helps the
clients who are old at their age by providing them different educational
support .

• Marketing department:

There is one marketing officer under whom one assistant marketing

officer works for different purposes like advertisement for our organization
whether it is by advertising in newspapers or by personnel selling
.Activities for retaining our clients are also done by these people like
encouraging them by promoting new facilities and by convincing them.

• Finance department:

There is a single accountant who handles the overall financial

department and report to the manager.
 10) Technical aspects

10.1) Gantt chart

Activities 1 2 3 4 5 6 7 8 9 1 1 1 1 14 15 16
0 1 2 3
1) Survey

2) Site Selection Started

3) Site Selection
Competed

4) Financial Analysis

5) Marketing Analysis

6) Time for rent Building

7) Legal procedure

8) Complete management
And organization

9) Arrival of machinery at
the site
10) 90% decoration
completed

11) Weakness:
 This was a very sensitive issue to the people of the society. So we were
that much aware about this so that our idea wouldn’t hurt the mentally of
the people.

Marketing cost was higher than expected earlier because we advertised in

such a way that it wouldn’t create any harmful situation for our business
and our target was to convince people in a position way.

12. Findings:

• This is our profitable organization having profit in the very first

year.

• People of our society didn’t take our idea negatively. As social culture
of Bangladesh has been changed a lot. People ’s thoughts have been
developed a lot also. People who are living abroad, who work for
daylong cant take care of their parents. This type of organization is
very much helpful for them.

• People living abroad appreciated our idea very much.

• According to our primary survey. This is a very innovative idea while

starting a center for old –age people.

• Government policy was not that much strong while starting this
project.
 13) Conclusion:

We have worked on establishing an old age home, which is a very

innovative idea at present time. As it was a very sensitive issue we were
supposed to work very carefully. People have accepted our idea
positively. There were demands for this type of organization in past, but
nobody came up with such a kind of idea. Government policies were
favorable while working. We should step forward in such a way that we
can convince people about this issue while providing supportive facilities
as well as a healthy amount of profit.
 15) References

- Entrepreneurship Development
Nazrul Islam & Mohmmad Z Mamun .

- Project Management
Jack R. Meredith & Samuel J, Mantel, JR.

- Cost Accounting
Horngner Datar Fastern.

- Foundation Of Financial Management

Stanley B.Block
Geoffrey A. Hirt

- www.old home center .com

-

- www.old age home .com

- Principal of Management
Robert Kreitner

- Human Resource Management

David A. Decenzo &Stephen P. Robbins
-Capital Investment & financial decisions
Ahim Levys & Marshall Sarnat
-
42