PRESENTATION

ON
BUSINESS PLAN
DEVELOPMENT
PRESENTED BY:
ARCHIE BANSAL
16411005
MBA (FYIC) SEM 6
THINGS TO BE DISCUSSED…
• INTRODUCTION TO THE IDEA
• FOUNDATION OF THE IDEA
• PROMOTORS OF THE PROJECT
• BUSINESS SERVICES
• MARKET ANALYSIS
• MARKET ANALYSIS USING PORTER’S FIVE FORCES MODEL
• TECHNICAL ANALYSIS
• FINANCIAL ANALYSIS
• CONCLUSION
 INTRODUCTION TO THE
IDEA
FINANCIAL CONSULTANCY SERVICES:
• Financial consultancy varies from consultancy in small investments to
providing valued services to large investors for investments in start- ups,
business activities, long term investments in shares, trading in commodities
and so on.
• In this assignment, an effort has been made for a business proposal
confining the consultancy services to investments through shares,
debentures, mutual funds and commodities. Keeping in view the location
the investment consultancy for start- ups and angel investors has not been
considered.
FOUNDATION OF THE IDEA
• Unlimited business opportunities available in every sphere.

• While doing my MBA in financial markets, I got the idea of utilising my

knowledge for providing financial consultancy services.

• Then I discussed with the experts that is Charted Accountants who

suggested to start financial consultancy services as no one is providing
such kind of services in the area. Also the investors in the area are
traditional and they lack knowledge on various modern investment
instruments.
 PROMOTORS OF THE
PROJECT
The promotors for the INDIAN FIANANCIAL SERVICES are
• Archie Bansal

• Shubham Garg

• Salouni Garg

Strengths of the promotors have been highlighted which includes the

qualifications and experience possessed by them.
 BUSINESS SERVICES
SECURITIES

MUTUAL FUNDS

DERIVATIVES

COMMODITIES
 MARKET ANALYSIS
OVERVIEW OF THE CAPITAL MARKET:
INVESTMENT AND SAVING SCENARIO:
MUTUAL FUNDS SCENARIO:

Growth of AUM in Mutual Funds

2359493
2500000

2000000

1500000
853167
1000000
402306
500000

0
Value in crores

Dec-08 Dec-13 Dec-18

 COMPETITIVE RIVALRY

MARKET SUPPLIERS’ POWER

ANALYSIS
USING
BARGAINING POWER OF BUYERS
PORTER’S FIVE
FORCES
MODEL THREAT OF SUBSTITUTION

THREAT OF NEW ENTRANT

MARKET POTENTIAL

• Financial sector: a key factor of stability in the

global economy
• Immense economic opportunities
• Fastest growing sector
• New products and instruments being introduced
• The entry of new players has led to existing
players upgrading their product offerings and
distribution channels.
 DEMAND FORECASTING

Keeping in view the large volumes under different segments

of securities it is expected that the monthly volume of Rs 25
crores for intraday and derivatives and Rs. 20 crores for
delivery based/ cash segment are quite conservative targets
which the organisation will be able to achieve easily.
 TECHNICAL ANALYSIS

• LAND AND BUILDING:

The promotors already have an office space at the proposed location
measuring about 2500 square feet. The office area is required to be developed
and furnishing to be carried out as per the requirements of the project.
• POWER AND ELECTRICITY:
15 kilowatts of power are required which will be arranged from the State
Electricity Board.
TECHNICAL AGREEMENT:

The financial consultancy will be run under the technical

agreement with ICICI Direct. The company will be
charging a lumpsum payment of Rs. 1,00,000. Under the
agreement, the company will also share its resources for
providing professional services. The company will also
provide various software developed by it, the cost of
which will be borne by this organisation.
TRAINING:

• Under the agreement, the company will also provide training of

three weeks at its Mumbai office. All the three promotors and
employees will undergo training turn by turn to get accustomed
to the various systems followed by the company.
• The company will also share its technical expertise by sending
their financial advisors to our office for short durations of 2- 3
days depending on the requirement. The expenditure incurred
towards their travelling and accommodation will be made by
our organisation.
EQUIPMENT:

The various equipment which are required for the running of the consultancy are as
follows:
Laptops
Tablets
Furniture
ACs
Generators
Printers
Photostat machine
MANPOWER:

Managers
Senior financial consultant
Research analyst
Data analyst
Financial consultants
Data entry operators
Marketing Representatives
Counsellors
Receptionist
Helpers
 FINANCIAL ANALYSIS

• In the financial analysis the following factors have been considered while making the calculations:

 The capacity utilisation (C.U.) for the first three years is at the rate of 60%, 75% and 90% respectively,
while the same has been considered at the full capacity utilisation from the 4th year onwards.

 The interest rate has been considered at the rate of 13% per annum compounded half yearly for the
purpose of term loan.

 The marketing representatives have been paid sale incentives at the rate of Rs. 4000 per month per
person.

 The electricity bill consumption has been considered at the current rates, with 5% increase towards the
rate hikes by the government.
 FINANCIAL ANALYSIS
 A depreciation of 15% has been considered for the various types of equipment to be procured by using written
down value method.

 The building has been charged at the rate of 10% depreciation per year.

 The land for the purpose of the organisation has been shown to be owned by the promotors for which the price of
the land has been accessed at the rate of Rs. 15. 72 lakhs.

 A nominal charge of Rs 500 will be charged towards the registration of the investor with the agency which will
also cover the opening of the Demat Account.

 In addition, the revenue will also be generated through the sale and purchase of various instruments by way of
the commission/ brokerages.

 A 10% increase has also been envisaged in the component pertaining to salaries happening due to the inflation,
career growth and promotion.
 FINANCIAL ANALYSIS

 The simple payback period is 3 years, while the discounted payback period is 4 years by taking the discount rate
as 10%.

 All the revenues generated on point 1 and 2 in the pricing of the services are paid by the companies as a part of
commission/ fee for the middle persons.

 Brokerage charges are as per the applicable rates which are to be paid by the traders/ investors towards buying and
selling of the securities in the secondary market.

 Average lot value of the securities is approximately Rs. 5 Lacs. The calculation has been made considering the
buying and selling of 20 lots in a single trading day including commodities in 22 working days.

 Delivery based trading has been proposed at Rs. 1 Lac per day while intraday trading is expected to be 10 times.

The difference of 0.01 lac has been ignored due to computer calculations.
S No Particulars Amount (In Lacs)

Cost of Project Proposed Total

1 Land Owned Owned

2 Building 22.35 22.35

3 Equipment 18.38 18.38

4 Technical Fees 1.00 1.00

41.73 41.73

Means of Finance Proposed Total

1 Own Contribution 15.72 15.72

2 Unsecured Loans 3.50 3.50

3 Term Loan from Bank 42.00 42.00

 M/S Indian Financial services

Details of Equipment Quantity Rate per unit Rs

1 Laptops 15 48000.00 720000

2 Tablets 15 25000.00 375000
3 Chairs 45 2000.00 90000
4 Tables 30 4000.00 120000
5 Genset 5 Kilowatt 1 28000
6 Lockers 30 5000.00 150000
7 Air Conditioners 1 Tonne 10 25000 250000
8 10-seater sofa set 1 50000
9 Round Table 1 25000
10 RO 1 10000
11 Tea/ Coffee Dispenser 1 20000
12 Printers 2 20000 40000
13 Photostat machine 1 50000 50000
 Details of Building Number Area Required in sq Rate/ square Rs.
ft feet

1 Cabins 10 100 1000 1000000

2 Research Labs 2 250 1000 500000

3 Committee Room 1 300 1000 300000
4 Reception 1 100 1000 100000
5 Waiting Hall 1 300 1000 300000
6 Washrooms 1 70 500 35000

Total 1120 2235000

Average monthly Advertisement Material and promotion related expenditure

Qty Rate Amount (Rs)

Pamphlets 50000 0.5 2083.33

Newspaper advertisements 0.3 1500 450.00

On line advertisement 1 10000 833.33

Website design and maintenance 1 6000 500.00

Sales incentives to the marketing representatives 8 4000 32000.00

Booklets of information 5000 2 10000.00

Total advertisement and promotional expenses (monthly) Rs. In Lacs 0.46

Total advertisement and promotional expenses (annual) Rs. In Lacs 5.504

 M/S Indian Financial services

Calculation of Salaries & Wages

S No Particulars Nos. Rate PM Amount

Salaries

1 Manager 1 30000 30000.00

2 Senior Financial Consultant 2 25000 50000.00

3 Research Analyst 2 22000 44000.00

4 Data Analyst 2 22000 44000.00

5 Financial consultants 5 20000 100000.00

6 Data Entry Operators 2 14000 28000.00

7 Marketing Representatives 8 8000 64000.00

8 Counsellors 5 8000 40000.00

9 Receptionist 1 6000 6000.00

10 Helpers 2 5000 10000.00

11 Watchman 1 5000 5000.00

M/S Indian Financial services
Calculation of power expenses
Connected Power load (HP) 15
Power factor 0.70
No. of working hour per day 8
No of working days per annum 300
No. of Units 25200
Rate per unit 6.00
Total cost of Power (Rs in Lacs) 1.51

At 100% Capacity utilisation 1.51

At 90% capacity utilisation 1.36
At 75% Capacity utilisation 1.13
At 60% Capacity utilsation 0.91
Pricing of the services Rs. Average Monthly
Revenue
Processing of each application of mutual fund 100 0.26
including NFO*
Processing of each application for shares* 100 0.25
Processing of each application for ETFs* 100 0.12
Opening of Demat Accounts 500 0.8
Brokerage Charges on sale and purchase of shares 1.4
@ .7% of the traded amount (for deliveries)
Brokerage charges on sale and purchase of shares 2.5
@ .1% of the traded amount (intraday and
derivatives)

Total 5.33
Annual amount 64.0
Depreciation Chart

Year Particulars Equipment Building Total

(15% Dep.) (10% Dep)

Cost 18.38 22.35 40.73

1st Year Depreciation 2.76 2.24 4.99

Written down value 15.62 20.12 35.74

2nd Year Depreciation 2.34 2.01 4.35

Written down value 13.28 18.10 31.37

3rd Year Depreciation 1.99 1.81 3.80

Written down value 11.29 16.29 27.59

4th Year Depreciation 1.69 1.63 3.32

Written down value 9.59 14.66 24.26

5th Year Depreciation 1.44 1.47 2.91

Written down value 8.16 13.20 21.35

6th Year Depreciation 1.22 1.32 2.54

 M/S Indian Financial services

Repayment Schedule & Interest Calculation

Interest on Interest on

Year Balance Sept.30 Repayment Mar,31 Repayment

1st Year 42.00 2.73 5.73 2.54 5.54

2nd Year 36.00 2.34 5.34 2.15 5.15

3rd Year 30.00 1.95 4.95 1.76 4.76

4th Year 24.00 1.56 4.56 1.37 4.37

5th Year 18.00 1.17 4.17 0.98 3.98

6th Year 12.00 0.78 3.78 0.59 3.59

 Principal Interest Total

Year Repayment Payment Payment

1st Year 6.00 5.27 11.27

2nd Year 6.00 4.49 10.49

3rd Year 6.00 3.71 9.71

4th Year 6.00 2.93 8.93

5th Year 6.00 2.15 8.15

6th Year 6.00 1.37 7.37

Projected Profitability Statement (Amount in Lacs)

Particulars/ Years 1st Year 2nd Year 3rd Year 4th year 5th Year 6th Year 7th Year

Consultancy Realisations 64.00 72.00 85.00 95.00 110.00 120.00 132.00

Total 64.00 72.00 85.00 95.00 110.00 120.00 132.00

Cost of Consultancy

Advertisement / promotion 3.30 4.13 4.95 5.50 5.77 6.06 6.37

Wages 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Power 0.91 1.13 1.36 1.51 1.59 1.67 1.75

Repair Exp 0.25 0.26 0.27 0.28 0.30 0.31 0.33

Depreciation 4.99 4.35 3.80 3.32 2.91 2.54 2.23

Total 9.45 9.87 10.38 10.61 10.56 10.58 10.67

Gross Profit 54.55 62.13 74.62 84.39 99.44 109.42 121.33

Adm. Selling & Other Exp

Salaries 30.31 37.89 45.47 50.52 55.57 61.13 67.24

Administration Expenses 2.30 2.53 2.78 3.06 3.37 3.70 4.07

Total 32.61 40.42 48.25 53.58 58.94 64.83 71.32

Interest on Term Loan 5.27 4.49 3.71 2.93 2.15 1.37 0.59

Net Profit before Tax 16.67 17.22 22.66 27.88 38.35 43.22 49.43

Income Tax 5.00 5.17 6.80 8.36 11.51 12.97 14.83

Projected Cash Flow Statement

(Amount in Lacs)

Particulars/ Years 1st Year 2nd Year 3rd Year 4th year 5th Year 6th Year 7th Year

Sources Of Fund

Own Capital 15.72 0.00 0.00 0.00 0.00 0.00 0.00

Unsecured Loans 3.50 0.00 0.00 0.00 0.00 0.00 0.00

Term Loan 42.00 0.00 0.00 0.00 0.00 0.00 0.00

Depreciation 4.99 4.35 3.80 3.32 2.91 2.54 2.23

Profit before Interest & Tax 21.94 21.71 26.36 30.80 40.50 44.58 50.01

Total 88.14 26.06 30.17 34.13 43.40 47.13 52.24

Application Of Funds

Increase In Fixed Assets 40.73 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Stock 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Increase in Sundry debtors 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Payment of Interest on Term Loan 5.27 4.49 3.71 2.93 2.15 1.37 0.59

Repayment of Term Loan 6.00 6.00 6.00 6.00 6.00 6.00 6.00

Payment of Taxes 5.00 5.17 6.80 8.36 11.51 12.97 14.83

Total 57.00 15.65 16.50 17.29 19.65 20.33 21.41

Opening Balance Nil 31.14 41.55 55.22 72.06 95.81 122.61

Surplus 31.14 10.41 13.66 16.84 23.75 26.80 30.83

 M/S Indian Financial services

Projected Balance Sheet

(Amount in Lacs)

Particulars/ Years 1st Year 2nd Year 3rd Year 4th year 5th Year 6th Year 7th Year

Liabilities

Capital 15.72 15.72 15.72 15.72 15.72 15.72 15.72

Unsecured Loans 3.50 3.50 3.50 3.50 3.50 3.50 3.50

Term Loan 36.00 30.00 24.00 18.00 12.00 6.00 0.00

Profit & Loss A/c 11.67 23.73 39.59 59.09 85.93 116.18 150.79

Total 66.89 72.95 82.81 96.31 117.16 141.41 170.02

Assets

Fixed Assets 35.74 31.37 27.59 24.26 21.35 18.81 16.58

Cash & Bank Balances 31.14 41.55 55.22 72.06 95.81 122.61 153.43

Stock in Hand 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Sundry Debtors 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 66.89 72.95 82.81 96.31 117.16 141.41 170.02

 CONCLUSION

• The project with an outlay of 61.22 lacs is likely to be profitable

from the first year onwards itself. The net profit by the third
year are expected to be in the range of 15 lacs which is showing
the return on capital employed to be 40%.
• The payback period of less than three years is making it an
attractive business proposal. Further the sustained and enhanced
profits even after the payback period suggest that the project is
going to be financially viable and will generate handsome
profits year after year.
THANK YOU