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Development of a Business

Development of a Business

Executive summary

The proposed business will be a Production business named as “Sangay Tissue” in production and sales of tissue papers under sole proprietorship. The business is to be set up at Bjimina in Thimphu at Bjimina as the location for main production and supply site for the business and there are more population and ease of transportation and communication to other regions. The business will produce soft tissue which is durable compared to the existing tissue and which is not yet produced by anyone in the country. SANGAY TISSUE will provide quality tissue at a very reasonable price than the existing tissue, which is imported from India and Thailand. The proposed business is to provide full satisfaction to the customers and meet their needs by providing high quality, and cost-effective product. The mission of the business is to have “Continuous improvement in products and services to meet the customers’ needs”.

Generally the customers are divided into three categories and they are heavy users like hotels, restaurants, resorts and canteen which will be mainly focused by the business. Light users like high income earners will also be focused as they use it in their residents. The business will also target and encourage remote people to use the product but not forgetting the individual customers who use tissue. Being a monopoly firm, almost all the Dzongkhag where there are more numbers of hotels, restaurants, resorts and canteen are targeted. However, initially, Thimphu, Paro, Punakha and Phuntsholing will be the most targeted areas to sell the product, since large number of hotels and restaurants are running well in these places. Marketing strategy of the proposed business is to emphasize the quality of tissue paper and to keep the price as much as low to increase the sales volume and receive repeated customers.

To get into international market and to use the resources available is the firm’s target, working towards achieving it is the firm’s patience, gaining fame and goodwill for the business is the firm’s destiny and keeping up with the same or in fact better, is the firm’s continuous vision.With the business philosophy, given integration of inputs, the first priority, taking into account is the customers satisfaction and with continuous innovations, SANGAY TISSUE hopes to establish long term and steady business relations with most purchaser from home and abroad and seek mutual development.

Project Profile
Proposed Business Name SANGAY TISSUE
Proposed Business Type Production(sole proprietorship)
Proposed Financing Nu. 20,00,000/-

Sangay tissue’s Vision

To get into international market and to use the resources available is the firm’s target, working towards achieving it is the firm’s patience, gaining fame and goodwill for the business is the firm’s destiny and keeping up with the same or in fact better, is the firm’s continuous vision.

Mission

The proposed business is to provide full satisfaction to the customers and meet their needs by providing high quality, and cost-effective product. The business mission is to have “Continuous improvement in products and services to meet the customers’ needs.” The following are also the missions of the business beside the mentioned one:

  • After the few years from the day of the establishment, to produce different sizes of tissue in different design as per the desire of the customers, to meet their requirements.
  • To make efficient and effective use of the resources available without causing any harm to the environment.

Objectives

The main objective of the project will be aimed towards self-sufficiency and independent which is one of the pillar of GNH and rather than relying and depending on other country for such a small product like tissue.

Besides there are objectives as follows:

Human objectives:

  • To create employment opportunity for those who are unemployed.
  • To help employees in gaining experiences and skills.

Economic objectives:

  • To reduce import in the country, this is likely to make the balance of trade favorable, thereby increasing the national income in the economy.
  • To mobilize the available resources.
  • Keys to Success

1. Project location

Since it is located in the capital of Bhutan, it is expected to be very suitable for the business where the business can have easy and direct access to get the raw materials. The chosen location is also expected to bear the following advantages to run the business efficiently and successfully:

  • The business can get the Bhutanese laborers easily at cheaper rate since there are many local places where there are many native people who are unemployed.

2. Competition

There is no existing tissue company in the country till now but import of the similar product from the nearby countries is in fact a competition. So the competitor as such allows the business to upgrade or improve the product.

3. Availability of resources

The resources for the tissue making are unwanted waste of books or paper from offices and schools and the forest (woods) which are easily available in the country. So the business need not worry about the availability of the resources (raw materials). It can be obtained easily at cheaper rate. Since the TEE PEE business is more focusing on recycling the paper waste, this can be the competitive advantage of the business.

4. Availability of labor

As the proposed business firm will be located at the capital it will be easy to get labor at a cheaper rate since there are many constructions taking place in Thimphu so it will be easy to get labor.

5. Low selling price

The business is planning to sell its product at a low price compared to the competitors since the business don’t spent more money on the raw materials because the materials for the tissue production are easily achieved and the labor are also easily available in the capital (business location).

SWOT ANALYSIS

Strengths

  • Advanced tools, equipments and

Machine.

  • Location of the Business.
Weaknesses

  • Lack of sufficient business information and research.
  • Difficult to familiarize the brand name of the product.
  • Initially, the business cannot produce variety of tissues in terms of style and design.
Opportunities

  • Can sell the product throughout the country.
  • Can easily find the regular customer.
  • Good labor supply.
  • No competition.
  • Availability of resources at cheaper price.
Threats

  • Competitor may arise.
  • May lead to price war after existence of competitor.
  • Forest rule and regulation.

1. Strengths

  • Advanced tools, equipments and machine.

Since the production is comprised of quite long procedure for which each machine is allocated for doing each work, these will make task easier and job gets done quickly and efficiently which will reduce manual work. Following such quality process will not only lead to mass production but it will also lead to division of work and so possibility of specialization, which will increase workers productivity.

 

  • Location of Our Business.
  • As the location is going to be located at the capital, the working atmosphere will be suitable since there will be ease of raw material and consumer. The place is very suitable because we can get raw materials nearby where the business need not have to bear much transporting charges. The business can get skillful labors from that region since people of that region have already got work experience.

2. Weaknesses

  • Lack of sufficient business information and research.

Since the proposed business is the first firm producing tissue in the country, the business doesn’t have any reference to look at the existing firm’s experience. Lack of information and experience can makes the business less confident in decision making and investment. Therefore, the business has to do lots of research to test itself which requires some investment, involving higher risk in leading to unproductive result.

  • Difficult to familiarize brand name of our product.

Even though the business is a monopoly in producing tissue, the business cannot differentiate the product from existing firm, since the business has to use same machine. Initially, the business cannot produce variety of tissue in terms of design and style.

3. Opportunities

  • Can sell our product throughout the country.

Being a monopoly business, the firm can sell its product throughout the country. And in every Part of the country where there are restaurants and hotels, where the business can supply the product to them. The business can easily find regular customers.

  • No competitors.

Being a monopoly firm there will be no competition in the market unless new firm arises. So the business can win over the full share of the market for the product, therefore continuous mass production is possible.

4. Threats

  • Competitors may arise.

Since resources are available and after studying the firm’s new competitors may arise with new innovative and improve product and compete with the business in the market.

Operational Plan for SANGAY TISSUE is as follows:

1. Equipment

Si. No. Description
1 Pulper
2 Breaker
3 Beater / refiner
4 Washer
5 Refining equipment
6 De-flaking equipment
7 Screen
8 Cleaners
9 Four drainer machine
10 Head box or flow-box
11 Press
12 Dryer
13 Reeling, winding and sheeting equipment,
14 Handling equipment
15 Size press Machine
16 Cutting machine
17 Laboratory equipment
18 Auxiliary equipment
19 Boiler
Capital items Cost in Nu.
Machine Set (15,00,000+20% tax) 18,00,000
Computer and printer 20,000
Furniture, fittings and fixture
-Table (3) 3000
-Chair (6) 4200
-Curtains 3000
Telephone (2) 4000
Modem 2000
Total 18,36,200

3. Tissue paper production process

The raw materials (waste paper, waste cartoon, recycled paper) can be easily obtained from everywhere within Thimphu or other Dzongkhags. The intended business can obtain the waste paper or books from schools and offices, waste cartoon and other papers (Kuensel, newspaper, etc) from shops or resident.

In order to convert the raw material into finished product a set of tissue paper machine is required which is the main and the basic asset of the business. So the proposed business will import all the materials needed from china as china deals in these tissue making machineries at an affordable price. The glue and the chemical needed will be purchased from India. As the proposed business is a partnership business with 5 partners, each partner will contribute some amounts and the rest will be taken loan from the bank.

So basically the key supplier of all the machineries required will be China, India and the supplier of finance will be the five partners and the bank. Whereas the suppliers of raw materials would be the schools, shops, households and offices.

The whole set of tissue production machineries will be purchased from Zhengzhou city Henam, China. One of the company officials can either go there or buy machineries or the company will deliver the machine within 30 days after fulfilling certain criteria which is much cheaper compared to the first option. About the glue and the chemical, it can be easily purchased from India.

Diagrammatic representation of the whole process

  1. Firstly the raw materials for the proposed business are paper waste which will be easily available from schools, shops, household and offices. Paper waste includes books (text books, note books, magazines, etc), papers (newspapers, Kuensels, etc) and cartoon boxes which are useless.
  2. The second process is to collect them from the places mentioned above. These materials are also transported from different Dzongkhags to help keep environment clean and then the materials collected will be sorted out.
  3. The third process would be to clean the materials and recycle them to use for the next process.
  4. The fourth process will be to make the cleaned and recycled materials into pulp by using the chemicals and the glue.
  5. In the next process the pulp will be the raw material for the production process and it will go through various machines. There will be some more process namely, coloring the tissue into various colors and then the tissue will be cut into different sizes (refer appendix 1.ii) and this process will give the final output.
  6. SANGAY TISSUE will be produced as the finished good.
  7. After achieving the final product the tissue paper will be distributed to the customers such as shops, restaurants, hotels and individuals. It will be made known to the customers through advertisement on local channels, newspaper and internet where the business will create its own account or web page.

Market analysis for SANGAY TISSUE

  1. Product description.
  • Types of tissues.

The types of tissues that SANGAY TISSUE will be producing are:

  • Napkin (which will be mostly used by hotels and canteens)
  • Toilet paper roll.
  • Wet tissue (which will be produced in future)
Types of packaging. Colour. Description/quantity
Small Pink, White, Light blue, Yellow. The small package will contain 6 Number of toilet paper roll.(3 ply roll)
Medium Pink, White, Light blue, Yellow. The medium package will contain 12 Numbers of toilet paper roll.(3 ply roll)
Large Pink, white, Light blue, Yellow. The large package will contain 24 Numbers of toilet paper roll.(3 ply roll)
  • The reason behind producing this particular product are:
  • To use the waste paper in an efficient way.
  • To reduce import and increase the export.
  • To give value addition to the waste papers.
  • To maintain healthy environment.

2) Target market

SANGAY TISSUE production firm will be focusing 30% on hotels and 30% on restaurant as well. It is because more number of tissue paper is used by these two sectors. At present there are more number of hotels and restaurants in different Dzongkhags, in future there seem to be more restaurants and hotels coming up so that is why the business will sell 60% of its total product to restaurants and hotels. Another reason for selling more than half of the product to restaurants and hotels is that the amount of tissue is imported more by these sectors and the business’s target sectors are restaurants and hotels.

25% of the product will be available in the shops particularly in those Dzongkhags where there are more restaurants and hotels. From the shop anyone who wants to buy tissue paper can easily get it. Shops would be one of the channels of the proposed business to sell its product to the customers.

3) Competitive analysis

The proposed business has many indirect competitors of tissue product that are imported from different countries (such as India, Thailand, China and etc) with price ranging from 25 to 55 and it is also available in different colors.

The raw materials used by SANGAY TISSUE is the waste papers so therefore another indirect competitor can be the use of waste papers by the shopkeeper for the purpose of raping doma, the rural people using waste paper for sanitary purpose and the Greenery way using the waste materials for the recycling purposes.

Marketing strategies

1. Product

SANGAY TISSUE’s tissue paper will be eco-friendly tissue paper. This product will have no harm on the eco system since it will be entirely made by using waste paper so there is no cutting down of forest and moreover the raw materials used are the waste papers. There will be reduction in environment pollution because the proposed business will be making good use of all the waste papers.

2. Promotion

In order to make SANGAY TEE PEE’s tissue paper known to the general public, the business will be distributing pamphlets to the people and the business will hire some dancers from the dance academy and attract many people through this process. At the end of the dance the employees of the business will distribute free samples to the people. The business will even advertise its product in the local channels. There will be a website created under the business’s name so that if anyone is interested in buying online, they can just contact the concerned people through it and get the product. There will also be free gifts provided when buying in bulk such as if anyone buys the large packet there will be a small packet free with it.

3. Place

The product will be available from the retailers, wholesalers and shops. It will be available online on the company’s web site if the company generates sufficient revenue to diversify its operations efficiency. The business will also be selling the product directly to the customers.

4. Price

The business will be demand oriented and competition oriented. The business will give more importance to the customer and focus on consumer taste and preferences. The business will use other competitors as a bench mark to fix the price of the product and will follow the pricing strategy of the competitors.

5. Exit strategy

There is no guarantee that a business will be a success. If ever the proposed business fails or is not successful then the business will be liquidated in order to pay back the suppliers and the banks. The machineries will be sold to other production company who are carrying out the same production or the company will give the machineries in rent on monthly or yearly basis.

The proposed business’s slogan

Conclusion

Since the intended business is operating within the country there will be creation of job opportunities for the Bhutanese people. By setting up of such business there will be reduction of import and the business can supply the product to the border area of India, which will help the government to generate the revenue.

The resources for making tissues are unwanted waste of books or paper from offices and schools. There will be reduction in environment pollution because the proposed business will be making good use of all the waste papers. The business is focusing on recycling the waste paper and giving additional value to the waste which can be the competitive advantage for the business. The Product will have no harm on the eco system since it will be entirely made by using waste paper and won’t cut a single tree. So therefore due to this there are chances that the government may support the intended business like greener way company.

The intended business has every opportunity to grow and expand in the future the company will tend to continue and expand with the team spirit and loyalty to customers with the quality product that the business is launching in the market. The product will give full satisfaction as it will satisfy the customers in matters of color, size, brand, technology and quality.


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