Basundhara Departmental Store

Bashundhara Departmental Store

Executive Summary:

Bashundhara Departmental Store is going to be a dynamic departmental store for the

young people, students of NSU and IUB including Baridhara-Bashundhara community. It

will be located near Bashundhara gate for the convenience of our customer. We extremely

hope that our business premises will become a center point for the younger generation of

Bashundhara.

Retail business is very common type of business in Dhaka city. It has enjoyed steady

growth so far. It will do well in next 10-15 years if some special and unique types of

services are provided to the customer. Thus we came up with some innovative ideas that

younger generation will like to spend their time in our business premises if they get Wi-Fi

connection and device charging facilities just buying some food items sitting in a warm

environment.

Our business will offer each and every types of food that can be found in a retailer or

confectionary shop. Besides that there will be book shop for IUB-NSU students, cosmetic

and household corner for general people.We are going to invest 10 million Taka in our

business. This huge amount of money will be connected from 3 main sources. The sources

are owners, bank loan and outside investors. Every owner will invest 1 million taka. 1

million will be collected from investors. And a bank loan will be made for 2 million taka.

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3. The Business Description:History:

5 friends Saif, Hasib, Mehedi, Nafia, Giasuddin and Habib were dreaming about starting a

new business of their own. Once they came up with an idea to open a departmental store

near Bashundhara gate for the Baridhara-Bashundhara community.

The Business:

Our business will start-up with four departments such as food court, book shop, cosmetics

and household corner near Bashundhara gate that will provide interesting merchandise

options at bargain prices. 70 percentage of total financing will come from the private

investments of 7 owners. Rest of the amount will be collected from bank or any interested

investors. They will be given interests. Net income will be distributed equally among the

owners.

Our large capital investment is going to provide a unique and modern service to the

Baridhara-Bashundhara community. We are hopeful that our customers such as

households, local businesses, employees and large no of students are going to made us

successful.

The Market:

This business will serve as a departmental store with a variety of products. So it will be a

retailer. And its primary customer will be the students of NSU and IUB and GP employees.

Therefore, we will try to extend our business towards the Baridhara-Bashundhara

community. Moreover, we will look forward to open more outlets in Dhaka city.

Objectives & Goals:

1. To provide a variety of products at reasonable prices.

2. To earn a handsome profit margin.

3. To achieve a healthy net profit in next year.

4. To sell 20,000 Tk per day by 2nd month.

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Keys to Success

To succeed in this business we must:

Sell a broad range of products.

Provide for the satisfaction of 100% of our customers.

Be an active member of the community.

Encourage customer input.

Financial Status:

Total investment will be Tk 10 million. Seven owners will invest 1 million each. The rest of

the amount will be collected from banks or interested investors. Most probably we will

take a loan of 2 million from bank at a rate of 15%. And the rest 1 million will be invested

by an investor who will receive 10% of net profit. Lastly, owners will distribute rest of the

income equally.

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4. Products & Services:Our food court and stationary shop will sell a variety of quality merchandise products. At

start up various types of merchandise will be offered such as food court, stationary items

and NSU-IUB books. In future we would like to include dishware, household goods, toys,

cosmetics, mobiles & computer accessories, and a list of items too exhaustive to list here.

A dedicated staff is committed to providing excellent customer service.

Products will be purchased from a variety of well-known manufacturers such as Procter &

Gamble, Pran, Apex as well as a number of other popular branded companies.

Moreover,we will continue to find new product lines that can be added to our inventory.

We are able to sell products at very low prices, because we will purchase items from

discontinued lines, seconds, over runs, etc., that cannot be sold to a manufacturer's usual

retail customers.

On the other hand, we will provide some unique services to attract our customer. There

will be 50 sits in our shop for our customer so that they can eat food. Besides that we will

set a Wi-Fi connection in our shop. And our customers will be able to charge their mobile

or laptops there.

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Business Environment Analysis:Industry Analysis

In an ever changing economy the departmental store model is becoming more popular

with the consumer. Providing a large selection of bargain-priced items is our intended

goal. Our business involved in retail industry. It is one of the fragmented industries in the

Bangladesh. Every time new retail or super shops are coming in the industry. Population

are increasing very rapidly, these people need extra foods, so retail business have great

opportunities. The degree of competition and Buying Patterns is changing day by day.

Consumers demand quality customer service, fair pricing, and a convenient location could

be our keys to success.

Competition:

Competition is very tough with customer service and location key components. The

selection of merchandise a store provides is also very important. It is very competitive

business. New-new retail shops are coming to the industry with whom we have to

compete. In which area we are planning to set up our business, two super shops already

have there who provide similar types of products as we are planning to provide. So we will

face very high competition. Popular are increasing on that area, these additional

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population need additional items, so we have great opportunities. Our main target

customers are the students of IUB& NSU, who have to go Nilkheet to buy their books at a

low costs or they have to buy from their universities book store at a high price. We will try

give them at a minimum costs.

Industry Background:Retail business is one of the most common businesses of Bangladesh as well as in

Bashundhara. Its expansion is keeping pace with population growth and changes in

consumption patterns, which are consistent with the growth of the economy. Bashundhara

is one of the busiest places in Dhaka city. So there is a chance that more people will start

living here in future resulting in an expansion of retail business in that community area.

But this expansion has not been structurally organized, because retailing had never been

perceived as an industry in Bangladesh.

Generally retail business is perceived as an individual or family business entity with a very

limited scope of organized expansion. So that very little information is available in the

market on the retail sector, but secondary sources indicate that the size of the food retail

sector in Bangladesh could be US$12-14 billion, and the number of retail grocery shops

could be around 1 million. Retail is also one of the biggest sources of employment (12

percent), and it contributed 13 percent (wholesale and retail trading) to Bangladesh’s

GDP.

There are almost 30 companies with more than 200 outlets in Bangladesh where the sales

growth rate is getting 15-20% sales growth every year and annual turnover of retail store

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at around 15 billion(1500 core) according to Bangladesh supermarket owner

association(BSOA).

But an important fact is that retail trades are organizing day by day and creating huge

opportunity for enterprises. Retailers though sell other companies products work out their

own marketing strategies fixing their own target market towards providing customer

satisfaction separately. Various types of retail stores do exist in the market. They differ in

shape, sizes and services they offer such as Specialty stores, Department stores,

Supermarkets, Superstore, Convenience stores, Discount stores and so on.

Now we are going to establish such a departmental store that will distribute products to

the ultimate customers situating near to them for efficient distribution. We expect that we

will be able to run our business at a growth rate of 20% per year. Our competitive

advantages might contribute to future growth because we are going to set a Wi-Fi network

in our shop where customers will be able to browse internet or charge their mobile and

laptops sitting in a warm environment. Moreover, retailing business is operating in a

fragmented industry. No firm has a large enough market share in the total market of

Bashundhara. But there are some firms who will be our direct competitors.

Competitive analysis:

We are going to open a departmental store in Bashundhara gate. In this case we will face

tough competition among the retail firms that are operating in Bashundhara. We have

categorize our competitors into two broad categories such as-

Direct Competitors

Indirect Competitors

Here we are going to discuss about them.

Direct competitors:

There are many firms that will compete with us directly. But we are mainly focusing on

two organizations such as Genius and Nonstop Mega Shop.

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Genius: It will be our main competitor. They are operating their business quite

successfully in Baridhara-Bashundhara community offering a wide variety of products to

their customer. Their products include foods, cosmetics, clothes, gaming instruments,

toys, electronic items and so on. They are also selling grocery items for households.

Nonstop Mega Shop: It is our direct competitor. They also sale products like Genius.

They sell mainly confectionary items. In electronics department they sale many types of

electronics products like speakers, multi plug and also sale CDs of movies, games etc. In

gaming product sectors they sale many types of gaming gun, doll, gaming cars for

children. They also sell vegetables, fruits, meat in one department. In cosmetics sector

they sale perfume, shampoos, nail police, lipstick etc.

Indirect competitors:

There are some small stores that are operating in the roadside near the Bashundhara

gate. We have to take them seriously because they will compete with us indirectly. They

sale different product individually, like grocery shop with grocery products, books store,

small hotel etc.

Jalil Shop &Cresent library will also be our competitors. So that we sell university books at

a cheaper price than them to compete in the market.

Strengths of the competitors:

All of them are providing wonderful customer’s services and also they have committed

workforce who give the best services. Their strength is they are doing their business for a

long period and they have huge number of customers specially Genius.

Weakness of the competitors:

Most the stores are very near to the gate but it is a residential area which people are living

inside the area they will look for their near option which we are will try to provide them,so

location is the weakness of them.

Marketing strategies:

Both the direct and indirect competitors use paper advertising and dish channel

advertising for their products.Our store consists of several department, a) books

department b) food zone c) household chores d) cosmetics. And our main target

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customers are the students of NSU and IUB. There will be also Wi-Fi connection in our

store at food zone area where will also 50-60 chair for our customers where they can take

their foods.

Our business wills the great threat to our competitors. Most of them don’t provide these

services in their stores. The customers also enjoy the strong brand recognitions of our

products. In some cases the existing stores will try to block the entrance of a new rival like

us but it is very difficult in these sectors. They can recognize our services and products

and they can include these with their products but it will not be so much easy to them,

because it’s required more space which is be difficult to them to get new space.

Market analysis:Market analysis is very important element for business. As if investor don’t have any

knowledge on market then how their product and service will reach to customer. It is

necessary to evaluate market analysis and there are some key points which are our target

customer and what is unique service from other competitors we are providing. This kind of

question has to know the answer or it is difficult to run the business. I am going to explain

key points such as target customer, market size and vale proposition and etcetera below:

The market’s size and growth:

Total population of Bashundhara is around 50,000 people. Bashundhara is a residential

area and it is situated near Baridhara in Dhaka. The name of our business is Bashundhara

departmental retail store. There are some departmental stores here and also lot

competitors here. It is busy area like others area such as Gulshan, Banani. There are

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bangle and English medium school and college and there are two reputed private

university is situated and also another private university’s construction is going on. It has

a really huge market for departmental store. Our retail department store has some

different category such as confectionary item, cosmetics, household and stationary shop.

There is a huge demand of those things. I believe that our retail department store will be

able to expand through those product and services in the market. Departmental stores are

going up rapidly.

Market segment:

Geographical area: only Bashundhara in Dhaka

Demographical area

Age: 5-15, 16-25, 26-40

We have chosen Dhaka city to segment our market. That’s why we have chosen city area.

We have chosen demographical segmentation. There are different types of items such as

age, gender, race and income level, occupation etc. under this segmentation. We have

targeted age and occupation. Basically this area is residential area and there are different

types of age consumer live here. That’s why we think this kind of segmentation will be

effective to achieve the goal. We have targeted different types of age group so that it is

easy to get the goal. First age group is basically children who love chocolate, chips and

etc. we have targeted these items for this age group. This is the very important age group

for our business and there are a lot of student lives here. There are two private

universities and bangle and English medium schools for this targeted group and we are

offering books and fast food item for this targeted customer. The last target customers are

employees who are doing job. They need to buy goods such biscuits, fast foods for

providing this group people.

Target market:

Basically our target customers are young people more specifically who are student. There

are lots of school, college, and university. And also lots of students lead to their life

Bashundhara area to study. They have come from different district of Bangladesh. It is

also mixed type customer. It is really difficult to serve them. It is challenge and also

business means challenge. We have four different segments to target customer. Whole

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students of Bashundhara area are confectionary food and same target customer for

stationary shop. As student need book and other book a related material that’s why we

target whole student for this area for stationary shop. Other item we are going to offer

cosmetics it is basically targeted for female student. As a large number of female student

s are studying in different kinds of school, college and university. They try to use

cosmetics to beautify themselves more. In that sense we chose the customer based

segmentation for female students. As a whole it is our target market.

Value proposition:

Our retail department store is creating some value propositions on our product and

service. Our departmental store room capacity will be large where over 50 sites will be

there to sit. And it is really different thing from other competitors. Bashundhara place is

very costly where we are going to give this kind of facility. And also we are giving Wi-Fi

connection since most of the university students are using smart phone and they use

internet to use browsing such as Facebook and others. And other facilities are being

offered by retail departmental store which is mobile/laptop charge system. I think most of

our competitors is not giving this kind of facility it is really innovative. And we are giving

this facility related to target customer so that they can enjoy this kind of facility. It will

effective to increase our sales.

Sales and marketing plan:

Sales and marketing are important parts for our business. We cannot run our businessif we

cannot sell our product and service. We have to make a plan for selling our product. It is

called marketing plan. This plan is essential for business plan. We want to increase 15 to

20% market share within 2 years.

Objectives:

We will try to deliver best quality All products are available

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Reasonable price Retain

Goals: Within 10 years we want to reach top departmental store in Dhaka city.

Marketing Mix:

Product line

There are so many product lines are available in our department store.

NAME CATEGORY TARGET MARKET

Food items and drinks Fast foods, soft drinks, energy drinks etc.

Young people

Chips, Chocolates, Ice-creams etc.

Children

Stationary Books, magazine, paper, pen, spiral bindings, photocopy, print etc.

Employee, student

others Cosmetics, lotion, soup, brush etc.

All people

Place: Bashundhara residential area, Dhaka -1212

Price:

Promotion

Promotional strategy:

• Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm.Our total budget 5, 00000 taka for promotional activities. We want to customer awareness by promotional activities within our

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proposed budget. We know that promotion will play a big role to retain our customers.

Promotional Objectives:

• Increase sales

• Stimulate impulse and reminder buying

• Raise customer traffic

• Get leads for sales personnel

• Present and reinforce the retailer image

• Inform customers about goods and services

• Popularize new stores and Web sites

• Capitalize on manufacturer support

• Enhance customer relations

• Maintain customer loyalty

• Have consumers pass along positive information to friends and others

Promotional elements:

Advertising—cable TV

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Improve Long-Run

Performance

Improve Short-Run

Performance

Store Image and

Positioning

PublicService

Increase Existing

Customer Patronage

Attract New

Customers

From Existing

Trade Area

ExpandTrade Area


Billboard Print media Magazine

Budgets for promotional activities: our total budget for promotional activities 500,000 taka. We will expense our budget for following criteria

Advertising – cable TV 100,000 (TAKA)Billboard 50,000 (TAKA)Print media 50,000 (TAKA)magazine 200,000 (TAKA)

Special offer to motivate our customer:

We are offering Wi-Fi connection to our customer Mobile and laptop charge system Seasonal discount Low price books

Operational Plan:Operational plan is the work of the business; it is the transforming of the ideas or the raw materials into the final products or services to be sold to the customers.

As our business is a departmental store most of our products will be bought from the outside suppliers. Some of our products will be made by us. As there will be a food department, that’s why some food items will be produced in our store. For produce these item we will use stove. We are looking for operating our business through this way. Another important part of every business is to find out the breakeven point. It is very helpful for a business for long time surviving. Breakeven point is the situation where your combination of fixed and variable cost is equal to your revenues. As we are looking for retail business and our budget is ten million. Our store will be allocated around 2000 square feet area.

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Our business is a retail shop, so technological innovations are not so important for us but distribution process is very important for our business. We are operating our business in Bashundhara residential area and our first target customers are the students of NSU and IUB, so it is geographically favorable for us. But in this area there are two others retail shop and near this area there is retail so it is not very favorable for us in the view point of competitors. As we set up business in the capital city suppliers are easily available and the labor forces are easily available in this area. Though it is one of the expensive areas in the Dhaka city it is very tough to find out inexpensive labor for our business but we’ll try to find out. We will provide them some intensives like bonus, good job environment etc. to select labor. We will allow part job searchers also.

We will try to adjust pricing to the needs of the individual market segments. In case of our own product we will try to provide them at a very minimum level.

Flow Chart:

11. Management Summary:Bashundhara Departmental Store will be maintained directly by its owners. Five owners

will be the head of five different departments. Following chart entails this thing-

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Readymade Products

Suppliers

Pricing Level

Customers

Own Products

Raw Materials

Value Adding

Customers


Financial Plan:The financial plan is very crucial for our business plan. It will translate all other parts of the

business --- the opportunity, the operating plan, the marketing plan, the management plan

--- into probable financial results.

Capital Required:16 | P a g e

Owners

Neloy

Finance & Accounting

Azizur

Inventory Control

Cosmetics & Households

Hasan

Inventory Control

Food Court & Book Shop

Zahir

Sales & Marketing

Lukman

Personnel Management

8 Salesmans 4 Security Gurds


As we stated before that we are going to establish a business of a retail store will be open

near Bashundhara Gate for the Baridhara-Bashundhara community. This business will

need an investment of 10 million Tk. More detailed information about estimated capital is

given below-

Capital

Needed:Taka

Trade License 50,000

Inventory 5,000,000

Equipment 450,000

Building

Position2,000,000

Furniture 1,000,000

Cash in Hand 1,500,000

Total10,000,00

0

Sources of Funding:

Pro Forma Income Statements:

Forecasted income statements for five year is given below---

2014 2015 2016 2017 2018 Comment

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Total Capital10 million Tk

Owners5 million

Bank Loan3 million

Investor2 million


Revenue:

Sales Revenue7,200,0

008,640,0

0010,368,0

0012,441,6

0014,929,9

20 increase at 20%

Cost of Goods Sold6,120,0

007,344,0

008,812,80

010,575,3

6012,690,4

32 85% of Revenue

Gross Profit1,080,0

001,296,0

001,555,20

01,866,24

02,239,48

8

Expenses:

Salaries & Wages 100,000 100,000 100,000 100,000 100,000

Rent 50,000 50,000 50,000 50,000 50,000

Advertising 500,000 400,000 320,000 256,000 204,800 decrease at 20%

Utilities 50,000 55,000 60,500 66,550 73,205 increase at 10%

Depreciation 10% 145,000 145,000 145,000 145,000 145,000straight line method

Total Expenses 845,000 750,000 675,500 617,550 573,005

EBIT 235,000 546,000 879,7001,248,69

01,666,48

3

Less: Interests (15%) 450,000 450,000 450,000 450,000 450,000 Bank Loan

Earnings Before Taxes(215,00

0) 96,000 429,700 798,6901,216,48

3

Less: Taxes 30% (64,500) 28,800 128,910 239,607 364,945

Earnings After Taxes(150,50

0) 67,200 300,790 559,083 851,538

Less: Investors Earnings (10%) (30,100) 13,440 60,158 111,817 170,308

Earnings Available to Owners

(120,400) 53,760 240,632 447,266 681,230

Earnings Per Owner (24,080) 10,752 48,126 89,453 136,246

Balance Sheet:

2014 (Jan)Assets:

Cash 1,500,00

0Inventory 5,000,00

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0

Equipment 450,00

0

Furniture 1,000,00

0

Building Position 2,000,00

0

License 50,00

0

Total Assets 10,000,00

0

Equity 5,000,00

0Liabilities

Bank Loan 3,000,00

0

Investors Investment 2,000,00

0Total Equity & Liabilities

10,000,000

Projected Cash Flow:

Net cash flow = Net income + Depreciation

2014 2015 2016 2017 2018

Net Cash Flow

(5,500) 212,200 445,790 704,083

996,538

Key Dimensions:

2014 2015 2016 2017 2018ROE -3.01% 1.34% 6.02% 11.18% 17.03%ROI -1.51% 0.67% 3.01% 5.59% 8.52%Net Margin -2.09% 0.78% 2.90% 4.49% 5.70%Net Cash Flow (5,500) 212,200 445,790 704,083 996,538

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Risk management plan:Risk is the part and parcel of every business. There is a proverb’’ there is no risk no gain.’’ In our business we’ll also face some risks. In our business we will face rivalry risk, credit risk etc.

Rivalry risk: We are going to set up our business at Bashundhara area where there is already a retail shop. We have to compete with this established shop. Retail industry is very fragmented industry, everyday new- new retail shop are coming in the industry with the same types of products and services. So in this case our rivalry risk is very high. To get some competitive advantages over the shop we planned to provide some additional services for the customers, like wifi connection in our department, free ATM booth service of two banks and a huge parking space.

Payment risk: We will start our business with loan amount getting from a bank, so we will face payment risks. Payment risk arises when anyone unable to pay his loaning amount. As we will take loan, we have to pay this loan otherwise we will lose our business.

Substitute products: There is already a shop in this area that provides same items for their customers, so we’ll face very high substitute products risks.

Supplier’s risk: In case of suppliers bargaining power of suppliers is very high because there are other customers or retailers are available.

Bargaining power of buyers: Here bargaining power of buyers is very high in some case. As there are other direct and indirect competitors on that area.

Loan Proposal:Uses of Loans:

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Conclusion:People are getting dependent on time-consuming services. Bashundhara Departmental

Store will be bound to provide such technologies to keep clean appearance of its

customer’s cars. At the starting point it may not be profitable or well known. But it will be

the quality leader in retail industry in the nearest future through its technological

advantage, efficiency, quality and customer care.

Bangladesh's food retail sector is dominated by traditional shops. It has shown growth

and modernization, keeping pace with overall economic growth, the increase in middle-

class consumers, and changes in consumption patterns. The organized retail sector,

including supermarkets and departmental store, remains relatively small, but consumes

increasing volumes of imported food products and exhibits the fastest growth.

Besides our mission is within 5 years we are going to start another departmental store in

northern part of Bashundhara. And our vision is to be the best departmental store not only

in bashndhara but also in the whole town. Because we are opting to open more branches

in other parts of the city by establishing good branding of our organization.

So we hope that our business will meet customer’s demands according to our expectation.

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Bank Loan2 million Taka

Purchase of Position

1.5 million Taka

Furniture.5 million Taka

Basundhara Departmental Store

Documents

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