Submitted By: Nabila Tabassum Chowdhury

ID No. 20
Course Code - 101
Dept. of Management Information systems
5th Batch

Submitted To: Akram Hossain

Lecturer
Dept. of Management Information systems

Submission Date – 25/04/2010

 Business Plan
Friends Pharmacy
52, Shiddeswari Road
Dhaka – 1000

1. SUMMARY:

Friends Pharmacy is a business which is going to be formed by some

business students, include me and some of my friends. We want to
earn as much as possible during study period, and so generated the
idea. We considered the opportunities created by the following
conditions.

 The need for life drugs is a basic need

 The selected area has large number of people but one pharmacy
 The size and activities will be manageable for amateurs like us.

We come up with the idea because we want to earn more and gather
real experience of business. Moreover, the place we selected is very
much familiar to us. We feel the necessity of another pharmacy in that
area.

We will have the competitive advances because the place we got is

more favorable to reach for the majority of the dwellers. Moreover
near our Pharmacy we have Monowara Hospital, we will get
customers from here also.

2
2. THE INDUSTRY THE PARTNERSHIP
AND THE PRODUCTS

The Industry

Friends pharmacy is a retail shop which will buy life drugs and similar
type things and sold it retail to the consumers. It's a common small
business.

The Company

The opportunity of a pharmacy business in Siddeswari area, we, some

students are going to form a partnership business in May, 2010. Here,
the owners have no experience though we analyze the condition of
industry, need and convinced that there is a viable growth opportunity
for business of that type.

The customers of a business of that nature will be in need of

emergency life drugs or life drugs for maintaining good health.

It will be Friends Pharmacy philosophy to offer an attractive facility

to get drugs as early as possible and make it more attractive with
convincible behaviors. They will also be facilitated by the practicing
physician sitting in the attached room of Friends Pharmacy.

The Products

The following list represent the various product Friends Pharmacy

will provide-

Emergency Life Drug: It will provide emergency life drug for the

3
patients.

Exclusive Life Drugs: Friend Pharmacy will try to provide their

customer with lots of exclusive product which is generally
unavailable.

Other health product: Friends Pharmacy will also provide other

health product like oral saline, Zink, Calcium etc.

Entry and growth strategy

In order to gain foot hold in market place we need to devote time to

research the need and the growth potential of the Siddeshwari Market.
Our competitive advantage is the advantageous location will provide
us with the lure we require to entice clients to use our services.

Like the most new business, for Friends Pharmacy we except growth
during the first year to be slow. However, as more people become
aware of our business, we expect the sales volume triple within five
years. To promote our business the quality and the sales man behavior
will be most important. Decoration of the shop will be another
important matter.

3. THE MANAGEMENT TEAM

We don't have separate management team from the owners. We will

run
its activity by our own. Some time we will work together and some
time we will divide it between us. Such us we work together for
the liaison to collecting product from different organization, grading

4
the product, taking decision for important business matters etc. As we
are mainly students, we have employed an employee for sitting in the
pharmacy. But we decided that one of us will always try to be on
pharmacy. So, when we are going to sit there, in different time, we
divide the sales responsibility among us.

Qualifications

Nabila Tabassum Chowdhury - Enrolled to University of Dhaka in

the under graduate program in Business Administration & worked 3
years as a part time office staff in a Kinder Garten School.

Humaira Sadia - Enrolled to Brac University in the under graduate

program in Business Administration & worked 4 years as a part time
Data Entry Operator in CIDA Bangladesh.

Tanjina Khaleque - Enrolled to Dhaka Medical College for MBBS

program & have good knowledge in chemistry & biology.

4. MARKET RESEARCH AND ANALYSIS

Customers

Friends Pharmacy's potential customer base is enough large to make

it profitable. The major list represents the major groups we are
targeting for our marketing plan.

5
Patients of Near by Monowara Hospital: A large number of
customer will come from Monowara Hospital. People of
Shiddeswari, Mogbazar, Poribag, Baily road are admitted to that
hospital. They will frequently come to Friends Pharmacy.

Dwellers Of Shiddeswari Road: Dwellers of that area r supposed

to come to Friends pharmacy.

Customers of Near by area: Customer of near by travel trough

Shiddeswari, are also supposed to come in our pharmacy.

Market size

The market size for Friends Pharmacy is estimated to be 300 per day
at starting. As their 200 patients come or stay Monowara Hospitals
every day. We can expect to have 50 patients from there everyday.
Moreover, their 15,000 people live in Shiddeswari area. There the
probability of being ill and come to Friends Pharmacy is 1%. So we
supposed to have sale of 7000 approximately. And thus the monthly
sale is 2,00,000 taka approximately. And the probability of net profit
on sale is 15% thus we can have 10,000 taka per person of the 3
owners, as monthly income.

Competition

Our competition is limited. As in Shiddeswari area there is only one

other pharmacy except us, "The Modern Drugs".

Competition of our competitors' strengths is not severely difficult. But

we cannot expect them to sitting in home, without taking any
strategies. To we have to be careful with that. Further, our facility

6
will be designed to provide maximum flexibility to conform to
customers’ requirement.

5. MARKETING PLAN

The general marketing philosophy and strategy of Friends Pharmacy

is to create sale product as early and less costly as possible to the
customers.

Pricing

The pricing policy for the products provided by Friends Pharmacy

will of necessity be very flexible. We will establish standard rates for
each product base on the price charged by other pharmacies in Dhaka
city. We predict a gross margin of 20% to 31% which may fluctuate
based on competitive reasons.

Sales Tactics

Friends unlimited will sale its product directly through convincing

manner. Atleast one of the owners cum manager will be at store above
75% percent time. She/they will be assisted by the one employee.
When one of us cannot be present, our employee will sale the product
to the customers.

Advertising and Promotion

As the Bangladesh government’s low enforcement restricted any life

7
drug industry and shop in public media, so, we cannot go for it. But
we have to make people know about our business. And for that, in our
opening ceremony we will invite the people of locality to come by a
personal letter each. Thus they will come here and know about our
business. I they don't, they can also have ideas of our business from
our letters.

6. FINANCING THE BUSINESS

Financing the business will be challenging activity. We need atleast

500,000tk for starting the business.

The predicted expenses are ---

Fixed assets & Shop Decoration 140,000

Prepaid Rental expense 180,000
Purchasing Products 150,000
Licensing Fees 5,000 As we are
Promoting Fees 15,000 inexperienced &
student we don’t
Other Fees 10,000
have enough fund
Total 500,000 to finance the
business. So we requested our guardians for helping us to start our
business they agreed to help us. In spite of the money is not good
enough for financing it. So, we went to some banks who give SME
loans. We asses the conditions, interest rate and so many things and
finally decided to borrow from Brac Bank.

The table below shows the sources of capital—

Sources Taka
Our Fund & Parental Help 200,000
Loan from Brac Bank 300,000
8
7. ACCOUNTING SYSTEM TO BE
FOLLOWED

Accounting system to be followed by Friend Pharmacy---

Accounting for Initial Investments

Because ownership rights in a partnership are divided among two or
more partners, separate capital and drawing accounts are maintained
for each partner.

Investment of cash

When a partner will invest cash in a partnership, the Cash account of

the partnership will be debited, and the partner's capital account will
be for the invested amount.

Investment of assets other than cash

When a partner will invest an asset other than cash, an asset account
will be debited, and the partner's capital account will be credited for
the market value of the asset. When a certain amount of money will be
owed for the asset, the partnership may assume liability. In that case
an asset account will be debited, and the partner's capital account is
credited for the difference between the market value of the asset
invested and liabilities assumed.

Capital Interest

9
A capital interest is an interest that would give the holder a share of
the proceeds in either of the following situations:

• The owner withdraws from the partnership.

• The partnership liquidates.

The mere right to share in earnings and profits is not a capital interest
in the partnership. This determination generally is made at the time of
receipt of the partnership interest.

Capital account
Capital account of each partner represents his equity in the
partnership.

Capital account of a partner is increased in the following situations:

• The Partner made additional investments during the year.

• The Partner received guaranteed payments from the partnership.
• Partnership earned profits, and a share of profits was allocated
to the partner.
• The increased in the capital will record in credit side of the
capital account.

Capital account of a partner is decreased when the owner makes

withdrawals of cash or property

Compensation for Services and Capital

The partnership agreement may specify that partners should be
compensated for services they provide to the partnership and for
capital invested by partners.

When the partner makes a cash withdrawal of moneys he received as

an allowance, it is treated as a withdrawal, or drawing. At the end of
the accounting period the drawing account is closed to the capital
account of the partner. The capital account will be reduced by the
amount of drawing made by the partner during the accounting period.

10
Allocation of Net Income
Revenues - Expenses = Net income

If total revenues exceed total expenses of the period, the excess is the
net income of the partnership for the period. If expenses exceed
revenues of the period, the excess is a net loss of the partnership for
the period.

Net income or loss is allocated to the partners in accordance with the

partnership agreement. In the absence of any agreement between
partners, profits and losses must be shared equally regardless of the
ratio of the partners' investments. If the partnership agreement
specifies how profits are to be shared, losses must be shared on the
same basis as profits.

Closing Process
Closing process at the end of the accounting period includes closing
of all temporary accounts by making the following entries.

• Close all revenues accounts to Income Summary.

• Close all expenses accounts to Income Summary.
• Close Income Summary by allocating each partner's share of
net income or loss to the individual capital account.
• Close each partner's drawing account to the individual capital
accounts.

Statements for Partnerships

The allocation of net income and its impact on the partners' capital
balances must be disclosed in the financial statements. All three
financial statements are affected: the income statement, statement of
owners (partners') equity, and balance sheet. In addition, the statement
of partners' equity reflects the equity of each partner and summarizes
the allocation of net income for the year.

Statement of Partners' Equity

11
Statement of partners' equity starts with capital balances at the
beginning of the accounting period, and reflects additional
investments, made by the partners during the year, net income for the
period, and withdrawals.

Additional investments and allocated net income increase capital

accounts of the partners. All kind of allowances, like salary
allowances and capital allowances, are treated as withdrawals.
Withdrawals reduce capital accounts. The end result is capital
balances of the partners at the end of the accounting period.

A sample statement of partners' equity is shown below--

Partner A Partner B Partner C Total

Capital, Jan. 1, 2008 *** *** *** ***
Additional Investments *** *** *** ***
Capital plus investments *** *** *** ***
Net Income for the year *** *** *** ***
Balance *** *** *** ***
Withdrawals *** *** *** ***
Capital, Dec. 31, 2008 *** *** *** ***

Equity section of the balance sheet

The partners' equity section of the balance sheet reports the equity of
each partner.

As illustrated below --

Partner A, Capital ***

Partner B, Capital ***
Total partners' equity ***

12
Breakeven Chart
Based On our assessment, we hope that we will reach the breakeven
chart with in a half year.

Cost Control

Friends Unlimited will peg Board System to cash receipts and

disbursement on daily basis. This information will be compiled at the
end of month for the preparation of financial statements. Each month
this financial statement will be reviewed and action to adjust cost or
our budget.

At last we can hope that Friend Pharmacy will reach its goal and will
experience more & more growth in future….

……… … ………

13