Assignment

Of

Entrepreneurship

Actual Business Plan of

Swagat Pvt. Ltd.

An Online Business Organization

Registered Domain: www.swagat.com.np/byproducts

Based On Specimen of Actual Business Plan of Bhairav-Kumari Trading

Limited

BBA 6th Semester, SAMB

By: Rohan Byanjankar

Sainik Awasiya Mahavidyalaya

Sallaghari, Bhaktapur

1. Executive summary

Swagat Pvt. Ltd. is a newly established company that offers variety of products to the customer

through online medium and operates under a domain www.swagat.com.np/byproducts. The

company has an aim to promote ecommerce in Nepal and to flourish the concept of ecommerce

all over Nepal.

The newly established company is in the process of registration. However, the website has been

registered under Mercantile Pvt. Ltd., which is one of the reputed Information Technology

Company of Nepal. This company evolved from a partnership of its founders. The co-founder of

the company are Mr. Swagat Panta, Mr. Divya Jyoti Pokhrel and Mr. Rohan Byanjankar. Mr.

Swagat Panta holds Master’s Degree in IT, and he is a Java Instructor by profession. Mr. Divya

Jyoti Pokhrel holds Bachelor’s Degree in IT (BSCSCIT).

The founders have equity in the ratio 2:1:2, total 20 percent of the share valued Rs. 27000. The

primary objective of the company is to integrate the true essence of Ecommerce in Nepalese online

business practices. The true Essence of Ecommerce refers to the process of buying and selling of

products through online medium backed by online payment of products. In contrary, cash on

delivery is prevalent in Nepalese online market, which is not the true essence of ecommerce.

1.1. Product Summary

Ecommerce is flourishing in Nepal. The growing online commerce in neighboring nations India

and China propelled Nepalese business houses to go online. Online business is gearing up in

Nepal, but has not been able to grasp the true essence of ecommerce and settle in the mind of

customers. Customer have strongly deep-rooted distrust towards online stores due to poor delivery

of low quality products often by beguiling the customers and reluctance in providing after sale

services has obscured customers faith. Thus, the systematization of online business process and

clear integration of all the necessary elements of e-commerce website can improve the quality of

after sale service we deliver and helps in maintaining an optimum quality level of products, which

acts as a catalyst in gaining confidence and trust of customers towards our online store.

1.2. Market Characteristics

Ecommerce is quite new concept in Nepal. People in Nepal are not so familiar with online

transactions and do not believe online purchase of products as safe, reliable and trustworthy. The

growing online business in western countries primarily in the United States; and burgeoning

online transaction in India and China have captivated Nepalese customers to purchase online.

Thus, it is evident that potential for online store in Nepal is obviously great.

The company has focused on business to customer model of ecommerce. The online store focuses

on retail sales rather than bulk wholesale sales. The online store basically target youth generation

and intends to exclusively offer two products: electronics products and paper as well as e-books.

These products calls for adequate description and customers can easily get through the product

details through images and videos and requires less physical touch to make choices such as

clothes, shoes and so on.

2. Product Characteristics

Ecommerce is growing in Nepal but not in fast pace. People are substituting offline purchase of

products to online purchase of products. The online commerce in India is growing in the fastest

pace superseding rest of the nations of the world. So, Nepalese customers are also propelled

towards online purchase of products and eager to have huge shop in their hand. Basically, youth

are inclined towards online purchase and most of the online purchases are made by youth. Thus,

we have intended to offer two products: electronic products and paper as well as e-books, which

is demanded most often by youth.

3. Market Expectation

The company’s management envision the great prospect of online business in Nepal. The

company has focused on youth market segment and intended to offer electronic products and

eBooks. The traffic rate is expected to be much higher and conversion rate can be increased

through promotion in social media. Some of the features of market of our company are:

1. Our market consist of youth buyers.

2. The potential of each product is extremely high.

3. The demand forecast for Electronic products are prospectively high.

4. We have price comparison data, which we gathered from info-mediaries.

According to Internet Retailer, the conversion rate of electronic products and eBooks are high.

About 80 percent of visitors who seek for electronic products purchase the product online.

4. Strategic marketing Plan

The company has a very simple marketing strategy to identify primary niches for online

electronics customers and to create a network of competent distributors to service these niches.

4.1. Objective

There are ample of online store in Nepal. They are equally competent and also uses various

different info-mediaries to gather market information, compare prices, and products. Ecommerce

is quite new concept in Nepal, so the company that excels on providing better services and quality

products will be the market leader and a behemoth in the realm of Nepalese online business. Our

distinctive competency of having knowledge about competitors, market trend, and youth demand

gives us a daunting position and unique market strength. Consequently, one of the most important

objectives of our company is to be “The Brand of Customers”.

4.2. Pricing

The online business is quite new in Nepalese market. Customers prefer offline purchase of goods

instead of online purchase as customers perceive that online purchase is unsecure and think that

online businesses charge high prices. Thus, to enter in the market and capture significant market

share, penetrating pricing strategy is better. Moreover, we will maintain close intimacy with

marketing agencies and different info-mediaries. Our aim is to be The Brand of Customers, so in

initial stage we will provide free delivery of product but, orders must exceed five hundred rupees.

In addition, the customer who makes purchases of Rs. 20000 or more for ten times will be our

special customer and will get 2 percent discount on every purchases he/she make from 11th times.

4.3. Promotion

Promotion is the most important aspect of marketing strategy. According to research, the

advertisement that can makes viewer engage on it for seven seconds or more can turn him or her

into potential customer. Moreover, the research by Sophify, Facebook has a conversion rate of

1.85% while the conversion rate of Twitter stands at 0.77%. Thus, it’s important to promote in

Facebook and a Facebook business page will be created that can directly link customers to our

ecommerce website. Moreover, Google Ad Words are also key marketing tools in the internet that

transmits the advertisement in almost every Google products, which is just analogous to the

advertisement all over the internet. Thus, we will advertisement through Google Ad Words. There

are some of the established virtual stores in Nepal, we will maintain a virtual store on those

established store for promotion of our online store.

Some of the major promotion strategies adopted by online store are as follows:

1. Advertisement of our online store through Google Ad Words.

2. Facebook is the social networking powerhouse that connects millions of people. We will

create a Facebook business that can directly link customers to our ecommerce website.

3. We will also establish virtual store in established online stores.

4. We will maintain an email list that helps us to deliver information, products, and content into

customer’s personal mailboxes.

5. Organization

Swagat Pvt. Ltd. is the company formally started on 1st January, 2017. The corporate office is in

New Baneshwor (North of BICC), Kathmandu, Nepal. The key people of the Swagat Pvt. Ltd. are

Mr. Swagat Panta, Mr. Rohan Byanjankar and Mr. Divya Jyoti Pokhrel.

The founders of Swagat Pvt. Ltd. are also equally engaged in other fields too. The three people

are from different background and work in different companies.

Mr. Swagat Panta

Mr. Swagat Panta is one of the founding members of Swagat Pvt. Ltd. and he also works as a java

instructor in Super Brain, one of the reputed IT consultant that is the IT solution for different

corporate houses. He also works in Mercantile as part time employee.

Mr. Divya Jyoti Pokhrel

Mr. Divya Jyoti Pokhrel is the founding member of our company and is the fresh Bachelor’s

graduate. He did BSCCSIT from St. Xavier’s College, Maitighar, Kathmandu. He holds complete

knowledge on Website Designing, Java Programming, and Android Application Development.

Mr. Rohan Byanjankar

Mr. Rohan Byanjankar is the founder member of our company and is currently studying BBA

sixth semester at Sainik Awasiya Mahavidyalaya. He has a good educational background and is

also eager in programming. He attained Java classes in Super Brain, the IT consultant which is

located at New Baneshwor, Kathmandu.

6. SWOT analysis

SWOT analysis refers to the minute scanning of environment to extract information regarding

Strengths, Weaknesses, Opportunities, and Threats of the business organization. The Strength and

Weaknesses within us, and the opportunities we can grab and threat we can pose has been

discussed in the table below:

Environment Outcome

Internal

Strengths

1. We have more information about

market that we obtain for info-

mediaries.

2. The product we have intended to

focus on are mostly demanded by

youth.

3. Our target market is youth and

youths are the prime customers of

ecommerce.

Weaknesses

1. We are new to market so we have less

brand recognition.

2. Our core focus is on only two

products, which is very narrow in

scope.

3. We are new, so the grip of intimacy

with our marketing agencies is not so

tenacious.

External

Opportunities

1. Online business in Nepal is just in

Starting phase or first stage of

ecommerce, so we can better

penetrate into market more easily

now than in future.

2. We have focuses in Fast Moving

Consumer Goods (FMCG) such as

Electronics and eBooks that

generally lures youth, who are the

Threats

1. Information technology in Nepal is

not well developed, so we must

struggle to maintain our online

business to run smoothly.

2. Online payment system and

economic policies are not in

congruous to the online business and

IT policy has not be intensively

focused on flourish of ecommerce

intended customers of all Nepalese

online stores.

3. Most online business are not trusted

by customer as they provide poor

after sale service and deliver poor

quality products. Its prime

opportunity to gain customers

attention and be customer’s brand by

maintaining high quality after sale

service and quality products.

rather focused on extension of

banking system.

3. Many online businesses are

proliferating day by day, amongst

them ample of are bogus and intended

to beguile customers. This fraudulent

act will create negativity in customers

towards the online business leaving

severe threat to other genuine online

business.

Online business in Nepal is just in initial stage of ecommerce, so we can better penetrate into

market more easily now than in future. We have focuses in Fast Moving Consumer Goods

(FMCG) that generally have lower inventory cost and have intensively focused in electronics and

eBooks which is basically preferred by youth, who are the intended customers of all Nepalese

online stores. Moreover, most online business are not trusted by customer as they provide poor

after sale service and deliver poor quality products charging higher prices. Its prime opportunity

to gain customers attention and be customer’s brand by maintaining high quality after sale service

and quality products.

7. Financial Summary

Swagat Pvt. Ltd. is the online business company, so it does not require huge investment in

infrastructure development and outer decoration. The company has focused more on website

designing and content management.

However, with the onset of startup period, firm will have to make substantial expenses that

incudes inventory, market research, staff compensation and salary, promotional activities, legal,

accounting, and tax fees.

There are several set of pro forma financial statements that includes income statement, cash flow

statement, and comparative balance sheet.

APPENDIX A

Pro forma Income Statement

Description Amount

2017 2018 2019

1 Gross Sales 800000 1100000 1500000

2 Net Sales 800000 1100000 1500000

3 Gross Profit 800000 1100000 1500000

4 Total Operating Expenses 500000 650000 1100000

5 Depreciation and non-cash expenses 65000 65000 100000

5 Operating Income/Loss 235000 385000 300000

6 Other Income 50000 50000 50000

7 Other Expenses 100000 100000 100000

8 Profit Before Tax 185000 335000 250000

9 Tax 37000 67000 50000

10 Net Income 148000 268000 200000

Total operating expenses includes all the operating expenses such as salary, commission, rent,

shipping, promotional expenses, and other expenses including Depreciation.

APPENDIX B

Pro Forma Cash Flow Statement

Description Amount

2017 2018 2019

1 Total Cash Receipt 850000 1170000 1590000

2 Total cash Disbursement 600000 750000 1200000

3 Net Cash Flow 250000 420000 390000

4 Opening Cash Balance - - -

5 Loan - - -

6 Closing Cash Balance - - -

Total operating expenses includes all the operating expenses such as salary, commission, rent,

shipping, promotional expenses, and other expenses excluding Depreciation and other non-cash

expenses.

APPENDIX C

Pro forma Balance Sheet of first three years (2017, 2018, 2019)

Particular Dec. 2017 Dec. 2018 Dec. 2019

Current Assets

Cash 250000 420000 390000

Prepaid Expenses 56000 56000 34000

Inventory 94000 140000 105000

Total Fixed Assets

Computer 400000 400000 600000

Furniture 100000 100000 200000

Less: Accumulated Depreciation (65000) (65000) (100000)

Miscellaneous Expenses

Preliminary Expenses 10000 0 0

Total Assets 845000 1051000 1229000

Current Liabilities

Bills Payable 56000 40000 30000

Salary Payable 130000 120000 100000

Tax payable 0 10000 5000

Commission Payable 74000 13000 34000

Long Term Debts 300000 120000 240000

Owner's equity 30000 90000 200000

Common Stock 105000 400000 440000

Retained Earning 150000 258000 180000

Total Liabilities 845000 1051000 1229000