Bananistic Fiber

Craft

Starting a Business in Banana Fiber Extraction & Weaving

Dedicated to

To our most honourable & respectable parents for your love, encouragement, and
support, and for demonstrating the value of education, hard work, and persistence.

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 Letter of Submission
27th January, 2023.
Md. Solaiman Hossain
Assistant Professor,
The Department of Accounting and Information Systems,
Bangabandhu Sheikh Mujibur Rahman Science & Technology University (BSMRSTU),
Gopalganj-8100.

Subject: Submission of report of Business Plan on “Bananistic Fiber Craft”.

Dear Sir,

It is our great pleasure to submit the report 0f Business Plan titled “Bananistic Fiber Craft”
under the course “Project on Business Plan” is assigned us as a partial requirement of BBA
course. We thankful to the department for allowing us the opportunity to do the formal
report on this topic. The paper has been completed by the knowledge that we have
gathered from the course “Project on Business Plan”. We are thankful to all those persons
who provided us important information and gave me valuable advices.

Finally, we are truly grateful to the department for giving me this nice opportunity to work
on this report, which we have considered as a great chance for us to develop our managerial
concepts. Although We have tried our best, certain mistakes and inconveniences may reside
and for this we seek pardon and hope the department will accept our apologies.

Yours obediently,
Soriful Islam
Student ID : 18AIS044
On Behalf of My Group “THE DREAMERS”
6th Batch, Year-3, Semester-2,
Session: 2018-19
Department of Accounting & Information Systems,
Bangabandhu Sheikh Mujibur Rahman Science & Technology University (BSMRSTU).

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 Letter of acceptance

27TH January, 2023.

Soriful Islam,
Department of Accounting & Information Systems,
Bangabandhu Sheikh Mujibur Rahman Science & Technology University (BSMRSTU).

Subject: Acceptance of report paper of business plan on “Bananistic Fiber Craft”

Dear Soriful Islam,

It is my pleasure to accept your work for preparing a seminar paper on the business plan of
“Bananistic Fiber Craft” I have gone through the whole paper. I think the paper is highly
informative & relevant. The paper is seemed original to me. I appreciate you for such a good
work.
I wish your group “THE DREAMERS” every success in life.

With thanks,

(Md. Solaiman Hossain)

Assistant Professor,
The Department of Accounting and Information Systems,
Bangabandhu Sheikh Mujibur Rahman Science & Technology University (BSMRSTU),
Gopalganj-8100.

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 Acknowledgement

First of all, we want to thank the immeasurable grace and profound kindness of
Almighty God, the supreme authority of the universe who bestowed us the capability
of successful completion of our assignment fairly.

“Project on Business Plan” is really an interesting course and attending a project like
this leaves me with a store of knowledge. This type of course will help us in our
future job. We are thankful to our course supervisor Md. Solaiman Hossain, our
Academic faculty from Bangabandhu Sheikh Mujibur Rahman Science & Technology
University. He is teaching us this interesting course so easily, that We can understand
properly. It is an important course for Business students. The versatile viewpoint and
teaching style of Md. Solaiman Hossain is very nice and examples given by him
throughout him lecture are very much realistic. So, it helped us to understand the
topics of this course easily.

At last, we would like to thank our seniors & family members for their nice
cooperation in preparing this assignment. Many of our friends and also many well-
wishers contributed ideas and made suggestions that greatly enhanced this
assignment. We would like to thank them all.

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Contents
Dedicated to...........................................................................................................................................1
To our most honourable & respectable parents for your love, encouragement, and support, and for
demonstrating the value of education, hard work, and persistence......................................................1
Letter of Submission...............................................................................................................................2
Letter of acceptance...............................................................................................................................3
Acknowledgement..................................................................................................................................4
Executive Summary............................................................................................................................6
Business Ownership...........................................................................................................................7
Location & Facilities............................................................................................................................7
RAW MATERIALS............................................................................................................................8
MACHINERY....................................................................................................................................8
INFRASTRUCTURE...........................................................................................................................9
TOTAL CAPITAL REQUIREMENT......................................................................................................9
Individual capital..............................................................................................................................10
Banana fibre emerging good business proposition......................................................................11
PROCESS.......................................................................................................................................11
Banana fibre Mats Making Process..............................................................................................14
Product.........................................................................................................................................15
Product Description......................................................................................................................15
Raw material and packing material..............................................................................................17
Water Requirement......................................................................................................................17
Work-in-Progress (WIP)................................................................................................................17
Storage.........................................................................................................................................17
Finished goods..............................................................................................................................18
Manpower Requirement..............................................................................................................18
Market Segmentation..........................................................................................................................19
Target market segment Strategy..........................................................................................................19
Competition.........................................................................................................................................20
Buying patterns....................................................................................................................................20
5.1 Marketing Strategy.....................................................................................................................21
Free Sample Marketing Strategy..................................................................................................21
Digital Marketing Strategy............................................................................................................21
Relationship Marketing................................................................................................................21
Content Marketing Strategy.........................................................................................................21
5.2 Pricing strategy...........................................................................................................................22
Economy Pricing...........................................................................................................................22
Premium Pricing...........................................................................................................................22

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 Penetration Pricing.......................................................................................................................22
Price Skimming.............................................................................................................................22
5.3 Promotion Strategy....................................................................................................................23
Message strategy..........................................................................................................................23
Media strategy.............................................................................................................................23
Promotion through the Internet...................................................................................................23
Promotion through the product life cycle....................................................................................23
5.4 Sales Strategy.............................................................................................................................23
5.5 Web Strategy..............................................................................................................................24
6.1 Management Team....................................................................................................................24
6.2 Organizational Structure.............................................................................................................25
Profit and loss A/c................................................................................................................................25
BALANCE SHEET................................................................................................................................26
Break-even point analysis.....................................................................................................................28
Exit Strategy.....................................................................................................................................29

Executive Summary
High quality banana fiber is used for making good quality paper, bag, mat and for making
warm cloth in textile industry. We can start a business of producing fiber & fabric
products from banana tree. This business requires skills and good networking.

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Goals & Objectives:
To deliver our product among the people of all classes at reasonable price.

Mission:
➢ To develop high quality banana fiber yarn suitable for producing different products
such as ropes, bags and mats.
➢ To develop efficient and automated equipment for banana-fiber extraction.
➢ To develop new industrial applications for the wastes from banana plants and their
by
➢ adding value for the benefit of the SMEs agricultural sector.
➢ To increase the competitiveness of SMEs with new cost effective eco-efficient
materials.

➢ To make fertilizer from leftovers

Vision:
• To have our product in every home in the country,
• To be the consumers’ preferred choice by leading in chosen markets with superior
products.

Values:
• Honesty integrity and professionalism.
• Friendship and enjoying life.
• Hard work, dedication and achievement.
• We are agile and flexible in our work, confidently taking bold decisions that
would be benefited our stakeholders.
• We work together as one, openly collaborating and sharing skills & knowledge to
enable our people to be the best.
• We are proud of the work we do, and strive for exceptional results.
• We earn respect by embracing fairness, trust and integrity in all our relationships.
• We are diligent in our work and consistently deliver the best quality in everything
we do.
• We are driven to improve our business every day and to maximize the creative
potential of our people.

Business Ownership
We will start our business as partnership as par rule of partnership act 1932. The number
of partners of this business will be four. Every partner will be active partner. Everyone
will provide their capital and contribution to the business. The remaining part of the

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capital will be collected from bank, relatives and money lender. We expect that our
business will run for a long period of time.

Location & Facilities

Our business location will be situated at Kurigram in the bank of Dharla River. Our
business plant will be in Kurigram. The price of land of that village is very low & per acre
lease price is 0.75 to 1 lakh. Our plant will be located beside the Kurigram-Rangpur-
Dhaka highway and our plant is on beside of Dharla River. So, it is very easy to
communicate both in road way and water way.

PLANT CAPACITY
Capacity utilization 75%
Average daily production
envisaged : 20 units
: 25 days in a month and 300 days in a
Working days/year
year.
Annual production :
- Ropes : 1300 Unit
- Floor covering : 1200 Unit
- Shoulder bags : 2000 Unit

RAW MATERIALS
The main raw material for the unit is banana tree which is abundantly available in the
State of Kurigram.

1. Cost of Banana Stem :1.50 lakhs

2. Misc. items :0.50 lakhs
Total: 2.00 lakhs.

MACHINERY
The major equipment required are:
Sl. No. Particulars Nos.

1. Banana fiber extractor 2

Loom complete with all

2. accessories 4

3. Bobbin circle 1

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 4. Charkha 1

5. Bobbin 100

6. Pirn 100

7. Shuttle 8

8. Misc. items L.S.

INFRASTRUCTURE

The major infrastructural requirement is

Covered area : 1200Sq.ft.
Power : 5 KW.

TOTAL CAPITAL REQUIREMENT

The total capital requirement including fixed capital and working capital is estimated at
Tk.1.70 lakhs as follows. Of this, the project cost comprising fixed capital and margin
money on working capital is Tk.1.55 lakhs.

A Fixed Capital:

Land and Building 1.00

Plant and Machinery 0.85
Misc. fixed assets & Preliminary & Pre-op. Expenses: 0.45
Total(A):
B. Working Capital:
Raw materials & Packing materials 15 days 0.10
Finished goods 15 days 0.15
Working Expenses 1 month 0.10
Receivables 15 days. 0.25
Total (B): 0.60

Total(A) + (B): 2.90

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Note: Working capital may be financed as:

Bank Finance (40%) TK. 24000

Margin Money (60%) TK. 36000

Total Tk: 60000
C. Capital Cost of Project

Fixed Cost : Tk 2.30 lakh

Margin Money for Working Capital: Tk.0.60lakh

Total: Tk 2.90lakh

Sources OF FINANCE

Promoter’s contribution (60%) : 156000tk.

Loan (40%) :104000tk.

Total: 260000TK.

Individual capital

As our business is partnership concern and the number of partners is four. Every
partner will provide capital. The amount of partners’ capital is given below in a
chart:

S/L No Name of the Partners Amount In TK

1 Soriful Islam 39000
2 Md. Rasel Rayhan 39000
3 Munna Dey 39000
4 Kazi Shovon 39000

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 Total 156000

CHART:

Investment

25% 25% Soriful

Rasel
Munna
Shovon

25% 25%

OPERATING EXPENSES
The annual operating expenses are estimated at Tk. 4.99 lakhs as given below:
(Tk.. in
lakhs)
1. Raw materials : 2.16

3.Utilities :
0.40
4. Wages & Salaries : 1.50
5. Rent, Insurance etc. : 0.30
6. Other overheads. : 0.35
8. Selling expenses @ 5% on annual
Sales. : 0.33
8. Interest on term loan @ 10% : 0.05
9. Interest on bank finance

0.110
for working capital @8%. : 28
10.Depreciation 10% : 0.23

Total : 4.99

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Banana fibre emerging good business proposition

Bananas fibre extraction is emerging as a good business proposition in Jessore

& Khulna following good demand for the fibre.

PROCESS

Banana Fibre Processing

The extraction of the natural fibre from the plant required certain care to
avoid damage. In the present experiments, initially the banana plant sections
were cut from the main stem of the plant and then rolled lightly to remove the
excess moisture. Impurities in the rolled fibres such as pigments, broken fibres,
coating of cellulose etc. were removed manually by means of comb, and then
the fibres were cleaned and dried.
This mechanical and manual extraction of banana fibres was tedious, time
consuming, and caused damage to the fibre. Consequently, this type of
technique cannot be recommended for industrial application. A special machine
was designed and developed for the extraction of banana fibres in a
mechanically automated manner. It consisted mainly of two horizontal beams
whereby a carriage with an attached and specially designed comb, could move
back and forth. The fibre extraction using this technique could be performed
simply by placing a cleaned part of the banana stem on the fixed platform of the
machine, and clamped at the ends by jaws. This eliminated relative movement
of the stem and avoided premature breakage of the fibres. This was followed by
cleaning and drying of the fibres in a chamber at 20oC for three hours. his fibres
were then labeled and ready for lamination process.
After extraction of fibre, weaving is done in the looms as per normal process
like any other material.

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Banana fibre bags making process

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Banana fibre Mats Making Process

Product
As our business or concern and our product is new in the market, we will start
our business by three product. The products name are “Bags , Ropes and mats”
We hope we’ll produce total 10 to 12 products at the production stage of our
business.

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Product Description
The Banana twine is first soaked in water so that the fiber becomes soft and
supple as it is flexible to make bags. The bag making process is very simple and
followed crochet weaving technique. Banana weaving technique is unique when
compared to other weaving techniques. The weaver uses their fingers to thread
the bags and other products. Base and body of the Banana bag is weaved first
and then weaving progress to increase the side walls of the bag. The handle of
the bag is weaved separately and then attached to the bag. The excess Banana
yarn after weaving is cut using scissors

Mats
The mat weaving process is similar to other weaving techniques. The bark is
first split into small strips and soaked in water. Due to water treatment, the bark
becomes smooth and soft. The strips are then hooked to the spinning wheel to
make the lengthy yarn. As the spinning wheel starts rotating, the artisan walks
backwards by adding the smaller strips of banana bark to form a long yarn. The
yarn is reeled into small bundles and sent to weaving section for making mats
and other eco-friendly decorative items. Minimum of 3 to 4 people required for
yarn making. One person for operating spinning wheel and remaining for
making twines.

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Rope construction involves twisting fibers together to form yarn. For twisted
rope, the yarn is then twisted into strands, and the strands twisted into rope.
Threestrand twisted rope is the most common construction. For braided rope,
the yarn is braided rather than being twisted into strands. Double-braided rope
has a braided core with a braided cover. Plaited rope is made by braiding
twisted strands. Other rope construction includes combinations of these three
techniques such as a three-strand twisted core with a braided cover. The concept
of forming fibers or filaments into yarn and yarn into strands or braids is
fundamental to the rope-making process.

Raw material and packing material

The raw material required would be banana tree, which are directly procured
from the farmers. Other inputs age generally available locally in general stores
Banana trees fibre are perishable in nature, raw material stock only for 7 days is
considered for assessment of working capital.

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Water Requirement
The total water requirement of such unit will be approximately 5000 litres per
day. Water is mostly required for washing and also in various unit operations
during processing. Apart from it, water will also be required for domestic
consumption purpose. The water should be clean and treated well for
hardness before use.

Work-in-Progress (WIP)
The raw materials need to be converted to semi-finished products and preserved
for processing in future. Therefore, the WIP has been considered for 30 days.

Storage
The product has to be separately stored in storage area. The entire products can
be stored at ambient temperature in dry place.

Salary Number Salary (Per Total Annual

Month) (tk)
Plant manager 1.00 8000 96000
Manager Technical 1.00 6000 72000
& Marketing
Supervisors 1.00 5000 60000
Labor 8.00 2000 24000
Accountant 1.00 4500 54000
Guard 1.00 1500 18000
Total 324000
Finished goods
Produced vegetable product can be stored for a period of 6-7 months at ambient
conditions. However, finished product storage for 15 days has been considered
to keep the inventory level under check.

Manpower Requirement
Febric goods processing is a highly labor intensive operation. Majority of labor
is engaged on contract basis during season. These laborers are skilled and mostly
women folk. In order to perform day to day work, manpower

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Market Segmentation
Market segmentation is the identification of portions of the market that are
different from one another. Segmentation allows the firm to better satisfy the
needs of its potential customers. There are some bases for Segmentation in
Consumer Markets and they are :
• Geographic
• Demographic
• Psychographic
• Behavioristic

From the mentioned market segment we will follow both Geographic and
demographic.

Geographic Segmentation:
Region: our market will be all local market of Bangladesh.

Population density: It will classified as urban, suburban, or rural.

Demographic Segmentation:
Age: As our product is nutritious, our market will be for all ages of people.

Gender: This product will be for all classes of both male & female.

Income: The price of our product price is reasonable for lower, medium and
upper class. So our product is all classes of income level.

Occupation: our product is for the people of all occupation.

Target market segment Strategy

A target market segment strategy is an essential plan of action for any
organization to adopt. Essentially, the strategy outlines our business's plans for
reaching our intended customers. It takes into account consumer demand, our
business response to that demand and its plan of action for delivering high-
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quality products coupled with solid customer service. The target market is
defined by the customer needs that create the market, the structural forces that
govern operation within the market, and the attractiveness of the market based
on strategic value, market size, market growth, and potential for profit. Each of
these areas is described below:

1. Strategic Value: The small business consulting market is a strategic, and

available, segment for our business. We will able to get customers to
associate a particular concept or idea with our firm.
2. Market Size: The size of the market is an important factor. While the large
number of small businesses starting each year will make it difficult to gain
significant share of the market in the near term, it does help to ensure that
there will be initial customers available to our enterprise.
3. Potential for Profit: The potential for profit in this segment is very high.
The operating costs required to address this segment are minimal, allowing
a majority of service revenue to be turned directly into profit. While the
barriers to competitive entry may be fairly low, no clear leader has gained
the mindshare of the potential client market. Additionally, based on the
overwhelming size of the market and the distributed nature of the potential
clients, it is unlikely that any competitor will be able to dominate the market
in the near future.

Competition
As our product will be new invented in the market, there will be a great demand.
There will be homogeneous product in the market. So there will be competition
and we will enjoy as monopoly market.

Buying patterns
Buying pattern refers to the typical way in which consumers buy goods or avail
services- encompassing frequency, quantity, duration, timing etc. In simple
words, buying patterns indicate how consumers purchase goods or services .
Marketers often try to understand buying pattern and its relation with
geographical, demographic and psychological characteristics of the consumer.
In order to understand the buying patterns, marketers conduct comprehensive
surveys. This along with demographic and psychological information including
age, gender, occupation, household income, household size, education level,
geographic location, hobbies, interests etc. could provide valuable insights.

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market segmentation, distribution and sales promotions. Understanding the
buying pattern allows the company to decide on strategies for

Strategy and
Implementation Summary

5.1 Marketing Strategy

A marketing strategy is a process or model to allow a company or organization
to focus limited resources on the best opportunities to increase sales and thereby
achieve a sustainable competitive advantage.
Free Sample Marketing Strategy

Unlike Freebie Marketing, this is not dependent on complimentary marketing,

but rather consists of giving away a free sample of the product to influence the
consumer to make the purchase.

Digital Marketing Strategy

This strategy uses various digital devices like smartphones, computers, tablets
or digital billboards to inform customers and business partners about its
products. Internet Marketing is a key element in Digital Marketing.

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Relationship Marketing

Marketing through creating, maintaining and enhancing strong long-term

relationships with customers in order to win his loyalty e.g. a restaurant can
build relationships with customers by sending him wishes and discount offers
on his birthdays.

Content Marketing Strategy

In this case, content is created and published on various platforms to give

information about a certain product or service to potential customers and to
influence them, without making a direct sales pitch.

Concentrated Marketing Strategy

A market-coverage strategy in which a firm focuses on only one or few markets.

5.2 Pricing strategy

Pricing is one of the four elements of the marketing mix, along with product,
place and promotion. Pricing strategy is important for our concern to achieve
success by finding the price point where they can maximize sales and profits.
We may use a variety of pricing strategies, depending on our own unique
marketing goals and objectives.

Economy Pricing
Economy pricing is a familiar pricing strategy for organizations. We will take a
very basic, low-cost approach to marketing-nothing fancy, just the bare
minimum to keep prices low and attract a specific segment of the market that is
very price sensitive.
Premium Pricing
Premium pricing strategy establishes a price higher than the competitors. It's a
strategy that can be effectively used when there is something unique about the
product or when the product is first to market and the business has a distinct
competitive advantage. Premium pricing can be a good strategy for companies
+-entering the market with a new market and hoping to maximize revenue
during the early stages of the product life cycle.
Bundle Pricing

With bundle pricing, small businesses sell multiple products for a lower rate
than consumers would face if they purchased each item individually. Not only is

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bundling goods an effective way of moving unsold items that are taking up
space in your facility, but it can also increase the value perception in the eyes of
your customers, since you’re essentially giving them something for free.
Penetration Pricing
A penetration pricing strategy is designed to capture market share by entering
the market with a low price relative to the competition to attract buyers. The
idea is that the business will be able to raise awareness and get people to try the
product.

Price Skimming

Designed to help businesses maximize sales on new products and services, price
skimming involves setting rates high during the introductory phase. The
company then lowers prices gradually as competitor goods appear on the
market. One of the benefits of price skimming is that it allows businesses to
maximize profits on early adopters before dropping prices to attract more price-
sensitive consumers.

5.3 Promotion Strategy

Promotion refers to raising customer awareness of a product or brand,
generating sales, and creating brand loyalty. It is one of the four basic elements
of the market mix, which includes the four P's: price, product, promotion, and
place
Message strategy
Firms need to carefully consider the message that their promotion strategy will
be conveying to their target audience. What message will promotion activity
send to the target audience and how will it impact on the firm's reputation
Media strategy
Media strategy refers to how the organisation is going to deliver its message.
What aspects of the promotional mix will the company use to deliver their
message strategy. Where will they promote it? Clearly the company must take
into account the readership and general behavior of their target audience before
they select their media strategy. What newspapers do their target market read?
What TV programmes do they watch? Targeting through effective media
campaigns could save the company valuable financial resources.

Promotion through the Internet

The development of the World Wide Web has changed the business
environment forever. Dot com fever has taken the industry and stock markets by
storm. The ecommerce revolution promises to deliver a more efficient way of

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conducting business. Shoppers can now purchase from the comfort of their
home 24 hours a day 7 days a week.

Promotion through the product life cycle

As products move through the four stages of the product life cycle different
promotional strategies should be employed at these stages to ensure the healthy
success and life of the product.

5.4 Sales Strategy

A sales strategy is a plan by a business or individual on how to go about selling
products and services and increasing profits. Sales strategies are typically
developed by a company’s administration, along with its sales, marketing and
advertising managers.

Understanding the buyers:

“When sales representative aren’t knowledgeable about your prospective

buyers, there’s little else other than price for them to rely on to get a conversion.
But when you understand your key targets—everything from their pain points to
their past purchasing behaviors—you can lead with a value-first sales strategy.

Recruiting the best trained, and experienced, sales team:

“Our sales team, which includes inside sales, outside sales, customer service and
management, must function as your ‘front line soldiers’ charged with increasing
market share and maximizing profitability. It should go without saying then that
we need to have as many ‘A List ‘players on our sales team as possible. Always
agree with the client:

“No matter what the buyer says, states or demands, you should, under no
circumstances, ever disagree or make the buyer wrong or suggest their request is
impossible. Once you perfect this simple strategy, it will save your sales.

Creating a sense of urgency:

Attach a deadline to the deal to help give the client an incentive to commit.
Whether it's a discount or something free, make them feel like they have the
upper hand. This does not mean rush the customer; it simply means try to give
them a little extra reason why your product or service is the right choice, and the
right choice right now.

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5.5 Web Strategy
Owning a website is a now a crucial ingredient to the marketing mix strategy of
an organization. Consumers can obtain instant information on products or
services to aid them in their crucial purchase decision. Sony Japan took
preorders of their popular Play Station 2 console over the net, which topped 1
million after a few days, European football stars issue press releases through the
internet and have websites registered under their names. Hit rates are
phenomenal.
Management Summary
6.1 Management Team
As our business is partnership, all the partners will active partner. Everyone will
take part in the business. All partners will be the board of directors. Besides,
they will run the business by taking the different post such as general manager,
production manager, marketing manager, accounts manager, and supervisor.

The names and posts of the management team are:

S/L no Name Post

1 Tamal Raihan General manager
2 Md. Mehedi Hasan Production manager
3 Md. Sobuj Molla Marketing manager
4 Employee A Accounting manager
5 Employee B Supervisor

Except this managers, there will be 20 labors, a electrician, a peon, and a guard.

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6.2 Organizational Structure
Board of
directors/own

General
Manager

Marketing Production Accounts

Manager Manager Manager

Supervisor

Figure: Organizational Structure

Profit and loss A/c

For the Year ended at 31st December ……

Particulars Year 1st Year 2nd Year 3rd

Sales revenue 820500 905000 1108500
Total income 820500 905000 1108500
Less:
Raw material 216000 240000 300000
Carriage (inward+ outward) 20000 25000 30000
Direct wages 24000 24000 24000
Power(electricity) 10000 10000 10000
Fuel 100000 120000 150000
Salary 300000 300000 300000
Administrative overheads 35000 39000 42000
Promotion and marketing 14500 12500 18000
Repair and maintenance 10000 12000 13000
Total expense 729500 782500 887000
Profit before tax, interest & 91000
Depreciation 122500 221500

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Less: Depreciation 23000 23000 23000
Profit before tax & interest 68000 99500 198500
Less: Interest on loan 16028 16028 16028
Profit before tax 51972 83472 182472
Less: tax@ 15% 7496 12521 27371
Net Profit after tax 44476 70951 155101

BALANCE SHEET
For the Year ended at 31st December…….
Assets Year 1st Year 2nd Year 3rd
Land and building 90000 81000 72900
Plant and Machinery 81000 72900 65610
Miscellaneous Fixed 27000 24300 21870
Assets
Preliminary and 9000 8100 7290
Preoperative Expenses
Net fixed assets 207000 186300 167670
Cash in hand 59000 242200 359830
Total Assets 266000 428500 527500
Capital & Liabilities
Capital 101150 141150 141150
Profit 44476 70951 155101
Bank loan 187850 187850 187850
Tax liability 7496 12521 27371
Interest on bank loan 16028 16028 16028
Total Capital & 266000 428500 527500
Liabilities

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180000

160000

140000

120000

100000

80000 profit

60000

40000

20000

0
1st year 2nd year 3rd year

600000

500000

400000

assets
300000
liabilities
0wners equity
200000

100000

0
1st year 2nd year 3rd year

Break-even point analysis

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To find out the break-even analysis, we may use the following formula
(Algebraic method): We have,
Sales=820500
Total produced unit=3600
Sales per unit=820500/3600=tk. 227.92
Fixed cost= tk. 230000
Variable cost= tk. 395500
Variable cost per unit=395500/3600=tk. 109.86

So, Break-even point (Unit)= Fixed cost/ Sales per unit- Variable cost
per unit
=230000/ 227.92-109.86
= 1948 units

Break-even point (tk.) =Fixed cost* Sales per unit / Sales per unit- Variable
cost per unit

=230000*227.92/ 227.92-109.86
= tk. 444025.07
Comment: From the above calculation, we may say that there is no profit and
loss in 1948 units and tk. 444025.07.

Exit Strategy

After three years, if we find that our business is not making profit or not being
sustained in the market and the customers start to lose their interest to use our
product, we will plan to sell our business.

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