PROJECT OF ENTREPRENEURSHIP

BUSINESS PLAN OF A START-UP

GROUP MEMBERS

BILAL AHMAD MUGHAL 17136191

MUHAMMAD SAAD 17136147
MUNEEB HUSSAIN 17136045
ABDUL MATEEN 17136102
HUMA IRSHAD 17136107

SESSION: FALL-2017
SECTION: BBA (A)
SEMESTER: 7TH
PROJECT OF ENTREPRENEURSHIP
Submitted to GIFT University, Gujranwala

In partial fulfillment of the requirement for Seventh semester.

Bachelor of business administration (BBA)

SUBMITTED TO:

DR. AMEER ABDUL BASIT

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DECLARATION

We, the members of a group and students at GIFT University Gujranwala,

session 2017-2021, hereby declared that the material printed in the project is our
own work based on the marketing topics studied during the lectures. It is self-made
and not copied from any web site or any helping material. We ourselves made this
report.

ACKNOWLADGEMENT

We are grateful to our respectable teacher, “DR. AMEER ABDUL BASIT”

whose insightful leadership and knowledge benefitted us to steer this project
successfully, Thanks for your continuing support for our important work in this
field.

We should also like to underscore dynamic efforts of the Teamwork and their
expert advice and contributions to the preparation of this report.

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Regards!

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TABLE OF CONTENT

DETAIL PAGE NO

Executive Summary 6

Industry Analysis 7,8,9

Company Description 10,11

Marketing Analysis 11,12,13,14

The Economics of Business 14,15,16,17,18

Marketing Plan 18,19,20

Design and development plan 20,21,22,23,24

Operations Plan 24,25,26,27

Management structure 27,28,29

Overall schedule 29,30

Financial Projections 30,31,32,33,34,35

References 36

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Appendix 37

Company Registration Documents 38-54

CV of group members 55,56,57,58,59

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1. Executive Summary
OCTA Technologies is a startup company who intends to produce silicon chips for electronic devices
and enter the flourishing semiconductor industry. The semiconductor industry size is growing remarkably
over passing years. The industry has a little competition in Pakistan. We have identified the key factors
which will make us excel in this industry. The long-term future of the industry looks bright as industry
have long term practical applications.

We are a private limited company who will be serving direct to other companies, making us a B2B firm.
We are manufacturing only one type of silicon wafer of size 3 inches as a diameter. A wafer can serve
different market segments, and for our product we have selected the data processing segment which is the
second biggest segment in semiconductor industry. Our initial target market would be mobile phone
manufacturing companies, with whom will be our key partnerships of the business as it is very important
to have good relationships with the clients in B2B business. Positive relation with them will make them
our long-time customers which will improve our sales. We have some competitors QUALCOMM, Kirin
etc. but we can outshine them by keeping our profit margin low and giving less prices. Also, these
companies are not manufacturing in Pakistan so buying from us will be cost saving for our clients.

We have only one revenue driver which is the income from the sales of our product. We have carefully
calculated our fixed, variable and startup costs, so that we can manage our finances efficiently. We are a
low operating leverage firm which increases our probability to reach the break-even point. Developing a
market plan is very important in driving up our sales. We have developed a sequential process for our
overall marketing strategy in which we will determine our goal, conduct research and implement the
solutions. Marketing mix (4 Ps) is the core of the marketing plan which we have planned thoroughly on
how to execute them. We have developed some sales tactics which we will use to acquire more clients.
We have designed our silicon chip after proper research and development. We hired expertise and
engineers of our concerning field to develop a quality product. We have developed a virtual model for our
product which shows how the structure of our product will be. There are some challenges associated with
manufacturing of the silicon chips. We have identified these risks and developed plans and procedures to
deal with them efficiently. To secure our intellectual properties we have trademarked our logo and name,
so we can be distinctive in the industry.

The manufacturing of the silicon chips will be done in one canal factory situated at Mor Aimanabad,
Gujranwala. The building will be made air tight and have proper clean rooms. Manufacturing will be
done by high-tech machinery in the clean rooms by the operators. Whole supply chain of business is
identified, from buying of the raw materials to delivering of the product. The board of directors are the
five founding members, who will also run marketing, finance and production departments. Also, the
organizational chart has been developed so everyone can know their roles properly. We will have two
members in board of advisors to guide us effectively in different aspects of the business. To highlight the
key activities of our business we have prepared a schedule with dates telling the details. In the last section
we have projected the financial of our business including how much money we will need and how we will
get that money. We have prepared pro forma financial statements of next 3 years and analyzed these
statements using financial ratios to elaborate key financial information of our business.

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2. Industry analysis

Industry size:
The semiconductor industry is the engagement of different companies who are designed or
fabricate the semiconductors. The success of the semiconductor industry depends on the creating
the smaller, faster products. The benefit of this tiny product is that more power can be placed on
the same chips. Semiconductors are the 20% of the total value of the electronic goods. Industry
market experts have agreed that market size of will grow even more in next decades. The Market
Size in Asia & Pacific region is valued at almost 295 Billion USD. Market size is expected to
grow steadily in the coming years.

Growth rate & sales projection:

The high growth rate of semiconductor industry is due to increase market of electronic devices in
which semiconductor is a key input. The semiconductor industry is relatively young and it is
global brand and it is growing rapidly in the coming years. The annual growth of semiconductor
industry is 15% with prominent cycles around the trends. It is predicted that semiconductor
sales are expected to grow $469 billion from $433 billion worldwide in 2021 showing increase
rate of 8.4%. Semiconductor is the crucial component of electronic devices and this make the
industry a highly competitive. Increasing sales in an important for the chip companies because
the higher sale will absorb the fixed cost of the company. Many semiconductors companies
supply silicon to the cooperate market to earn their revenues. In 2000 semiconductor revenue
surpassed $200 billion. As the increase use of electronic devices like mobile phones, PCs etc
manufacturing of semiconductor are also increases and its revenue exceeds toward the $400
billion in 2017.

Industry structure:

There is little development of semiconductor industry in Pakistan. In Pakistan there is no any

company that manufactures the silicon chips for mobiles and we are willing to be the first
entrants, so the industry will be receptive. In recent analysis only three firms are able to
manufacture the most advanced semiconductors. The details of the industry structure can be seen
by applying Porter’s five forces model. The competition in this industry is very low as this
industry is under developed in Pakistan. In the near future, there will be no or very few potential
entrants in this industry, but as Pakistan is developing in its technological area so there might be
new entrants later, but the huge investment needed for the startup will still be the barrier. Silicon
has a semiconductor nature, which means it has the ability to pass and block the electricity when
required which makes it ideal for the chips. No other metal has these ideal characteristics. Apart
from that, there is no new innovation which can store more data than silicon chips, so there are
almost no substitutes. Power of suppliers is little bit higher in this industry because there are

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only few reliable sellers which provide top quality raw materials in Pakistan. Power of buyers is
lower as there are only few sellers which can drive the costs of raw materials. To demonstrate
more clearly, let’s demonstrate each force on a rating scale 1 to 5.

Chart Title
4

3.5

2.5

1.5

0.5

0
Competition Threat of Entrants Threat of Power of Suppliers Power of Buyers
Substitutes

Threat of Entrants Competition Threat of Substitutes

Power of Suppliers Power of Buyers

Nature of participants:

The global semiconductors industry is dominated by companies from China, Japan, Singapore,
South Korea and Taiwan. There are only three firms that are capable of producing chips in the
recent analysis. These are TSMC, Samsung, and Intel. Global foundries it is an American firm
who produces the 12nm process for its more advanced chips. These are the common players in
the semiconductor industry. The largest markets for semiconductors are U.S. they are followed
by Japan, Europe and South East Asia. Japan semiconductor market still relies on the consumer
electronic industry. Semiconductors companies are multinational companies that is scattered
around the world.

Key success factors:

To be a profitable firm in this industry, a firm should be highly innovative and creative because
there is being continuous development in the semiconductor industry and a firm should match

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that level. The world is spending more and more money on Research and Development. As
semiconductor is a sensitive product, another factor for success is to have high quality
equipment and machinery to develop a high-quality product. All the manufacturing of
semiconductors is done through machinery, only very few tasks are done manually.

Industry trends:

Industry trends are anything that alters the market where your company operates. The world has
experienced societal, economic, and technological challenges that are tried to be refining nearly
every aspect of our lives. The dependency that is created between the global economy and
technology is greater in today’s world and this dependency is creating the sustained demand of
semiconductor, which is the reason for increase of growth rate in semiconductor industry.
Among all the emerging technology AI (artificial intelligence) has major implication in the
semiconductor ecosystem. We are moving in that world where almost all data will be generated
by machine. Internet of things produces the large amount of data that are used to make real
decisions. The semiconductor industry continuous increase in R&D of new chip, material and
silicon that will enhance IoT data processing capabilities and stability. Semiconductors will
continuous to be a key driver in successful development of fully autonomous vehicle. The
advances in technology needed to increase the speed of AI and digital economy create more
opportunities for applied resources.

Long term prospective:

The future of this industry looks bright as industry is expected grow double in 10 years as it is
now. Overall sales and market size have been increasing steadily over the years. The demand of
electronic devices is becoming more and more and the silicon chips are the core of these devices
as these chips tell the devices how to perform functions. The competition in the industry is not
very high and there are no alternatives at the moment. With the continuous development in
technological gadgets and the increase in usage of artificial intelligence, the need for these chips
will rise in future.

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3. Company Description
Our company name is OCTA Technologies (Private) Limitied and our business plan is to
manufacture silicon chips for electronic devices, mainly for smart phones, which are prepared by
sand. Currently there is no other company which is manufacturing this product in Pakistan.
These chips currently are being imported in Pakistan. With the coming of mobile manufacturing
companies in the country, we want to grab this golden opportunity and capitalize on it by
providing them our silicon chips. Our company will be B2B (Business to business) as we are not
selling directly to the customers.

Company History:
We are class fellows in a university doing a project for our course. Our project is to develop a
business plan from scratch to end. To generate ideas, our whole team conducted a brain
storming session and selected best 5 ideas among which were presented in the discussion out of
which one was selected by our instructor and that was the manufacturing of silicon chips and
wafers.

Mission Statement:
Our Mission at OCTA Technologies is delivering finest technological components with
ingenuity, innovation and imagination.

Products and services:

Our company is manufacturing a single product which is silicon chip for mobiles which is
prepared by sand. The chip is made up of a number of layers built-up on one side of the silicon
rectangle. The lower layers interact to form the active components, usually transistors. The upper
layers form the passive components, usually wires. Around the edges of the chip are pads large
areas of metal, used to connect to the outside world. The silicon itself simply acts as a base on
which the chip is built but in most it plays some part in the electrical operation of the device. At
the start we will manufacture only one type of chip. The chip is built on the surface of the silicon
wafer. The chip will be of square shape and size 4 mm and the diameter of wafer will be 3
inches. The chips are etched onto the wafers. The number of chips that can be place on the
surface of wafer is calculated by this formula

N = π (R-√A)2 / A

N = Number of chips per wafer

R = Effective radius of the wafer

A = Area of the chip

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Current status:
We are currently developing our business plan for this company. It is the initial phase of
planning and once it is done, the business will begin to operate.

Legal status and Ownership:

Currently, there is no legal status of our company but we will register it with SECP in the future.
We will register our company legally and select Private Limited incorporation type for our
company. The main reason to choose this type was that it has limited liability for the
shareholders. The company is a separate legal entity and each shareholder is liable only for the
investment he has made and in case of financial crisis the personal assets of the shareholders
will not be sold. As it is a startup and business may need more funds in future, so it will be
easier to raise funds with a private limited company.

Key Partnerships:
In our business, it is very necessary to have healthy and successful partnerships because we are a
B2B company. As we are producing silicon chips for another business, which are mobile
manufacturing companies. We will have an agreement with them and this will be our main
partnership because they are our primary clients. Another important partnership will be with our
suppliers. We are manufacturing a very sensitive product in which there is no margin of error, so
it is very necessary to have finest raw materials at our disposal.

4. Market Analysis

Market analysis:
As our product is the silicon chips so the production and distribution of these silicon chips falls
in semiconductor industry. So, the semiconductor industry is the sum or collection of the
companies which are engaged in designing or manufacturing semiconductors. It was formed
around 1960, once the fabrication of semiconductor devices became a viable business. The
industry's annual semiconductor sales revenue has since grown to over $433 billion, as of 2020.
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So, these industries are so big and profitable that’s why we should enter in this industry. This
industry is divided into different market based upon end use or geographically etc.

Market Segmentation and

Segmentation/Market share of
semiconductors Target Market Selection:
Networking &
Communication

13%
3%
Data Processing Main segments are:
32% Industrial devices
13%
Consumer Electronics
10% 1. Data processing
Automotive
29%
Military&civil aerospace
2. Network and communication
3. Industrial devices
4. Consumer electronic
5. Automotive
6. Military & civil aerospace

These are the main segments for which silicon chips are used. As we are in data processing
market segment and this segment is covering 29% of market share. We will be manufacturing
silicon chips which will be used for data processing in mobiles at first. We are manufacturing
silicon chip which will be use in mobile devices and it will act as a raw material, hence we can’t
give our product directly to the end consumer, but we can do B2B instead B2C.

B2B:

As we are doing B2B business so here some of the challenges in segmenting B2B:

1. B2B markets have a more complex decision-making unit so it takes time to decide
whether to buy these products or not.
2. B2B buyers are more “rational”. so, they will search for alternative or for someone from
whom they can get that product cheaper than us.
3. B2B target audiences are smaller than B2C so it’s very difficult to engage them or do
business with them

Market selection:

We will select the market with respect to size of the company. In segmentation by size, we will
see how big a company is and what are company’s sales revenue or the number of employees. As
the nature of our product, we must only sell our product to the big companies like Samsung,

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Huawei, and other mobile manufacturing companies which are coming to Pakistan. They will
buy our silicon chips in bulk which will give us proper profit and hence, we can meet our
expenses. Among them Samsung will be our first target as they are coming before anyone else to
Pakistan

Buyer Behavior:
Our business is B2B, and in this style of business relationship with the client is very important.
Clients buying from B2B business, tend to buy from same suppliers in long term as they want to
run operations smoothly without any interruption. So, once we have acquired a client he will
continue to buy us from long time without showing any buying changes.

Competitor Analysis:
A competitor analysis is a detailed evaluation of a firm’s competitors. so, once we decide to enter
an industry and chooses a market in which we must compete, we must gain an understanding
about our competitive environment.

Identifying Competitors:

There could be three kind of competitors for our company which are:

 Direct: Businesses Offering identical or similar products.

 Indirect: Businesses offering close substitute products.
 Future: Businesses that are not yet direct or indirect competitors but could be at any
time.
Further list of our possible competitors:

Direct Indirect Future

KIRIN ORACLE GIGABYTE
EXYNOS IBM RAZER
QUALCOMM TOSHIBA ASUS

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Competitive Analysis Grid for OCTA:

Here’s the competitive analysis grid for OCTA.

NAME OCTA QUALCOMM EXYNOS Kirin

Price low high medium medium

Functionality
medium high medium medium
Heating high Very high high High

Estimation of Annual Sales:

As mentioned above that we will make around 700 chips in starting moths for like 8 months then
we will increase it to 800 for next 4 months. As our cost is 9500 and we ll sale it on 10600 with a
profit of 1100.

So total of our sales will be:

 No of chips produced: 700*8=8400

 total number of chips produced:8400
 Per chips sale price:10600
 Total sales generated:8400*10600= 8,90,40,000 Rs

So, our total annual sales would be: 8,90,40,000 Rs.

5. The Economics of the Business

Revenue Drivers and Profit Margins:

Revenue drivers are the sources through which a business earns its money. Our company has one major
revenue driver, which is the sales from our product silicon chip. In order to determine the revenue of the
company it is very necessary to determine the cost of goods sold. Costs of goods sold is measured by
analyzing direct and indirect costs. After analyzing all the costs, the silicon wafer will cost us Rs 9300 per
piece and the price of the silicon wafer will depend upon the number of silicon chips on that wafer. The
price we will charge for per chip is Rs 10,600 and profit margin will be Rs 1300 per chip. The

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manufacturing process is very delicate and involves expertise so this profit margin will be attainable and
justifiable. When our business will start to grow, we will increase our production numbers.

Fixed and Variable Costs:

Fixed cost is the cost which is independent of the amount of products a company produces. These will be
the fixed costs of our business

1. Rent of the property

2. Salaries of the employees

3. Depreciation of the machinery

4. Internet bill

Here is the valuation of these fixed costs:

Type of cost Amount (PKR)

Rent of property 75,000

Salaries 3,00,000

Depreciation (per month) 83,500

Internet Bill 3,500

Total 4,62,000

The rent of the property is determined by obtaining the market rent rate of the 1 canal property. The
salary is the total amount of 10 employees’ salary. Depreciation is determined through straight line
depreciation method.

Variable cost is the cost which is in proportion of the amount of products a company produces. These will
be the variable costs for our company

1. Cost of manufacturing (Purchasing of raw material to finished product)

2. Transportation cost (while delivering the product)

3. Maintenance cost

4. Bunny suits and safety equipment

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5. Electricity bill

6. Gas bill

Here is the estimation of variable cost

Type of cost Amount (PKR)

Cost of manufacturing 65,10,000

Transportation Cost 50,000

Maintenance Cost 30,000

Bunny Suits and Safety Equipment 50,000

Electricity Bill 1,20,000

Gas Bill 80,000

Total 68,40,000

We have considered electricity and gas bill as a variable cost because our business is new and the demand
is not steady at the start. So, after some time when demand will be study these will become our fixed
costs as they will have little fluctuations.

Fixed Cost 4,62,000

Variable Cost 68,40,000

Total Cost 73,02,000

All of these are per month costs.

Operating leverage and its implications:

Operating leverage is analysis of the fixed and variable cost. A firm which has lower fixed cost than its
variable cost has lower operating leverage. A company with higher operating leverage has a higher break-

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even point than the company with low operating leverage. The variable cost of our company is 93% of
the total cost, which means our company has lower operating leverage. Also, it will require us to sell
lesser number of units to reach our break-even point.

Startup Costs:

These are the one-time costs that a business occurs at their start. Our business involves latest and high-
level technology so these will be higher. These are the startup costs which we will have to occur:

1. Equipment purchasing

2. Making the building airtight

3. Security deposit for building

4. Research and Development cost

5. Registration of the company

Type of cost Amount (PKR)

Equipment 1,00,00,000

Air tightness of building 6,00,000

Rent Security for building 1,50,000

Research and Development 8,00,000

Registration of the company 41,200

Total 1,15,91,200

Break-even Analysis:
Break-even is the point where total revenue and total cost of the business are of same value. It is the
minimum revenue a company must earn to cover its costs. The formula to calculate break-even quantity is

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Break-even quantity = Total cost per month / Sales price of the product

Break-even quantity = 73,02,000 / 10600

Break-even quantity (monthly) = 689 units

Break-even quantity (yearly) = 693 * 12 = 8267 units

We are manufacturing 700 units per month and by sale of 689 units we will be able to cover our
monthly costs. The yearly production will be 8400 units and selling of 8267 units among them
will be our break-even quantity of the year.

6.Marketing Plan

Overall Marketing Strategy:

Marketing plan is a part of an overall business plan. So, a marketing plan is the process of
organizing and defining the marketing aims of a company and what will be further strategies and
tactics to achieve them. So how we will do our marketing and what is our marketing plan all this
will be discussed next. We will do all this in around 7 to 8 steps which would be

1. Set our marketing goal

2. Conduct market research
3. Analyze the research
4. Identify our target companies
5. Determine our budget
6. Develop marketing strategy
7. Implementation
8. Feedback or check the result
Setting our marketing goal:

We will firstly list our marketing goals that what we are wants to do some of our goals are

 Going to differentiate our firm from competitors

 Best known company of Pakistan in manufacturing chipsets
 we want to rank number one for the name chipset manufacturer
Conduct market research:

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we will then conduct a market research so that we could get critical information about our market
in which we are falling. It will help us determining who and where our customers are, and which
customers are most likely to do business with you.

Analyze the research:

We will then analyze our research so that we can get the data we want from our whole research.

Identify our target companies:

After analyzing the research, we will find out to whom we should do business like Samsung is
coming to Pakistan and establishing their manufacturing unit in Pakistan so this could be our
customers.

Determining our budget:

Then for approaching these companies we defiantly need some resources or some money and for
approaching other companies.

Developing marketing strategy:

We will further develop our marketing strategy that how we can approach them and make deal
with them.

Implementation:

In this step we will implement our strategy to grab Samsung or other customers.

Feedback or checking of result:

We will lastly check whether our strategy work properly or not.

4p’s of marketing:
4p’s of marketing for our business are

 Product: we will manufacture silicon chips which are used in mobile phones.
 Price: price of our silicon chips will be 10,600 Rs.
 Promotion: promotion will be mostly depending upon personal relation or by mailing to
companies and personal visiting.
 Placement: we will manufacture our silicon chip and then deliver our product to our
customer through pickups or containers.

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Sales process and tactics:
Sales process of any busines is basically the cycle which includes:

 Prospecting: Prospecting is
Prospecting Preparation
the finding of potential
customers.so we do research
and we can come to know that,
for example Samsung could be
Follow-up Approach
our customer.
 Preperation: it’s about the
preparing for the initial contact
so for this we will do some
mail to Samsung and on Closing Presentation
demand send them our
quotation. Handling
 Approach: it’s the first face-
to-face interaction with
Samsung in which we will go to Samsung’s office on their invitation.
 Presentation: we will then present our product to them and give them a detail
information regarding our product.
 Handling objection: after presenting company will do some objection regarding our
products but we will handle them and let them believe that buying our product is the best
option for them.
 Closing: now it’s the decision time for the Samsung whether to buys silicon chips from
us or not.
 Follow-up: after accepting our offer and closing the deal with us it’s the time for us to
build strong relationship with Samsung. So, for this we will contact them after buying or
product is it is good or not or if changes needed to be done.

7.Design and development plan

Development status and tasks:

Semiconductor becomes smaller and they are more tightly packed with transistors. Silicon is the
most widely used based material which is used in fabrication of semiconductor. Development of
semiconductor have many steps which is followed by design, fabrication, assembly, testing and
then packaging semiconductor.

 Front end fabrication

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In this step, fabrication is used to manufacture semiconductors by etching electronic circuit onto
wafer of silicon. Semiconductor production include the front-end manufacturing process. This is
the capital-intensive operation. High capital creates the restriction to enter into the new markets.
There is a challenge for the industry to rapid production of chips in inventory with the improved
design that replace the existing products. The size of chip is 4mm which will be made on the 3-
inch wafer. A wafer contains many chips. In this process design are placed on wafer of silicon in
a sequence of chemical processing process using equipment with small number of manufacturers.

Prototype of wafer

 Bank end assembly, testing and packaging

In this wafer are sliced into individual semiconductor, encased in plastic and put them
into the quality control process. In this step chips are assembled into finished
semiconductor components and tested to verify that they perform their function very well
as we planned, former to assembly and packaging into finished product like smart
phones. This stage is related to the more intensive towards labor and it perform on those
area which has low wages.
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Preparation of wafer into different steps

Challenges and risk:

The challenges and risk are in every business and especially in new ventures the challenges
while or after when our product is made are follows:

When our product is made the first challenge occur is Fabrication and Testing.

Making a silicon chip is a complex process requiring hundreds of precisely controlled steps that
result in patterned layers of various materials built one on top of another. Hundreds of identical
processors are created in batches on a single silicon wafer. Once all the layers are completed, a
computer performs a process called wafer sort test. The testing ensures that the chips perform to
design specifications. This test ensure that the chip is ready to use for the purpose it is made.
There are the challenges for the industry to improve design of the old-fashioned chips in
inventory with the replace of existing product, potentially leaving producers with non-sale
inventories and financial losses as well as the cost of research and development associated with
the development of next generation chip.

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Power consumption and electrical risk:

Another major risk during functional testing, especially facing lower design technology. It is
very narrow and lean product so the power dissipation occurring in the chip due to leakage will
become very significant. In order to reduce the loss of power, several leakage power
minimization techniques will be developed in our company.

Clean Room or Air tight building:

Chips are fabricated in batches of wafers in clean rooms that are thousands of times cleaner than
hospital operating rooms. And to make this we will set up our manufacturing plant in a low
polluted area as near as possible to the assembling plant for mobiles. We will make our building
air tight as much as possible and use vacuum packing’s for silicon chips so that dust particles
won’t affect our product.

Because manufacturing silicon chips as these are highly sensitive to dust particles and won’t
work optimally if it gets affected with dust

Projected development cost:

Development cost is those cost that we incur from researching, growing and then launching of a
new product. For semiconductor manufacturing, firstly we will hire the engineers and experts for
the manufacturing of chips. Their duty is to create and redefine the process and design of the
wafer according to the market trends. Then we will design the virtual model of semiconductor
from designer on graphics and we will manufacture these chips according to their design.
Manufacturing cost of per wafer is Rs 9500 and we manufacture 700 wafers in per month.

Proprietary Issues:
For the protection of our intellectual property, we will be having trade mark of our company’s
name and logo design. The trademark will guarantee us that no other person or company will use
this name and logo design for its own products. Here is the design of our logo:

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We are not going for
patent or copyright because we are not inventing anything. We will make product as per the

8. Operations Plan

General approach to operations:

The operations involve how our business will run and product will be produced. First let’s
discuss the back stage activities which clients or customers don’t see. Beginning with
manufacturing process, the main raw materials used are silica sand and carbon. These two
materials are heated together in a furnace to from a silicon ingot, which has a mono crystalline
structure. The ingot is then sliced into circular wafers using the wafer scriber machine. These
wafers are basic building blocks for subsequent chip production. The wafer is then polished to
remove roughness of the surface. After polishing, the wafer is then fabricated in a clean room
through photolithography, ion implantation and etching process. The wafer then becomes
ready for transistors building on it and then it is tested using probing machine to ensure its
quality. After doing all these process on it, the wafer has now become a chip. We plan to
manufacture 700 of these wafers per month.

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All the raw materials required to make our product will be purchased from Gujranwala, as it will
save our time and costs. We originate from this city, so we can find reliable suppliers who will
give us top quality raw materials. Our employees will be ten in number in the startup comprising
of machine operators, security guard and cleaning staff but when our company will grow in the
future, we will increase our team accordingly. Before running our operations completely, we will
hire an expert or engineer of this industry for the research and development of our product.
He will guide and train us how to make the perfect and full of quality product.

Now let’s discuss the front-end activities, these are the activities which the customer sees or
experiences. As we are B2B company, so we have a few front-end activities because front end
activities are mainly designed to attract more customers. The first one is the quality of the chip
we produced for our client and the second one is the distribution of that chip from us to them.
The manufactured chips will be packed carefully and will be delivered to the assembling plant of
the smart phones.

The summary of our business supply chain is that we will buy our raw materials from the local
suppliers, then we will manufacture our product using them in our workplace and then these
chips will be transported to the assembling plants. Here’s its visual representation (next page)

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Suppliers

Raw materials

OCTA

(Manufacturing)

Finished product

Clients

Supply Chain of OCTA

Business Location:
We will take a building of one canal in Gujranwala. The location will be Mor Aimanabad,
which is situated between Chan da qila and Kamoki. We have chosen this place because it is at a
side from the city. Our business requires the least dust and pollution possible so it is a clear area
comparative to other places.

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Facilities and Equipment:
In order to perform the operations of the business effectively and efficiently it is very necessary
to have proper equipment and facilities. To manufacture the silicon chips, we will need high tech
and advanced machinery, as this product requires care and precision. The equipment will be
bought from China and then shipped to our country. We will look for used machinery for
startup as these machines. The machinery include furnace, scribing machine, polishing machine,
dicing machine and probing machines. While manufacturing safety equipment will be needed
which include bunny suits (safety uniforms), goggles and gloves. To distribute the product, we
will use local vehicles like vans which transport sensitive products. Also, we will use air tight
packing for our products.

The facility we have is that we will have airtight building with proper air circulation to have dust
free environment. Also, we will have a clean room which is ideal for fabrication of the chips.

Here is the complete list of our equipment and facilities:

 Manufacturing Machinery
 Bunny Suits
 Gloves
 Goggles
 Air tight building
 Clean room

9. Management structure
Our company has flat structure with decentralized decision making. We hire 10 employees out of
which 2 are engineer or expert. We have three departments in our company who perform their
work very well. These are marketing department, operation management department and finance
department.

Marketing team
Bilal Mughal

Abdul Mateen Rathore

Their duty and responsibility are to manage the promotion and maintain the positioning of our
company. Their main focus is to attract more clients to buy from our company and to raise the
more understanding about our company through the formation of marketing campaign.

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Operation management team
Saad Intizar

Muneeb Mughal

Their duty is to formulate the strategy and to implement these strategies in the company. They
are responsible for managing activities that are the part of the production of our product,
improving performance. They have direct focus on operation process, approval of design,
planning, controlling of company’s activities.

Head of financial department

Huma Awan

Her duty is to help in the preparation of budget in the company, preparing balance sheet,
managing the records of company and develop the knowledge about the product and process of
company. Her responsibility is to reconciling daily, weekly or monthly transactions.

Our company has no HR department because in our new startup there are only 10 employees in
addition to the management team. As our company grows in the market then we will focus on the
hiring and recruitment of new employees and then develop the HR department in the company.

Board of directors
The founders of the company are the board of director in which we supervise or evaluate the
process and provide direction and oversee the management of the company.

 Bilal Mughal
 Abdul Mateen Rathore
 Muneeb Mughal
 Saad Intizar
 Huma Awan

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Board of advisor
Our board of advisors will have 2 members:

1. Muhammad Tahir (Taxation Lawyer)

2. Muhammad Nadeem Mughal (CEO of H.R. Cookware and H.R. Engineering)

Organizational chart

board of
director s

operation finance marketing

team department team

formulating managing improve preparation managing promotion

strategy activities performance of budget records management

reconciling create brand

transactions awareness

10. Overall schedule

First of all, we will start with the research and development of our product. It takes time of 10-15
days. We will hire the engineer or expert, who will guide us in making the chips. A graphic
designer will prepare our virtual model of chip and wafer. Then we will move toward funding so
we can buy our assets which are necessary to run our operations. After ordering the machinery, it
will take one month for shipping and in the meanwhile we will get our company registered with

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SECP. When machinery arrives, it will take 2 to 3 days for calibration and setting of it. When all
the resource are ready to run the operations, we will start producing and deliver our first batch
within a month.

Activities Time frame

Research and development (10-15 days) until 20 March 2021

Virtual model of chip and wafer (2 days) 22 March 2021

Funding/ ordering the machinery/ registration (2 months) until 22 May 2021

through SECP
Arrival of machinery (within 1 month) 22 June 2021

Settlement of machinery (2-3 days) 25 June 2021

Production of chip and wafer (within 1 week) 1 July 2021

First sale of our chip (After a month) 1 August 2021

11. Financial Projections

Sources and uses of funds statement:

While starting up it is very necessary to determine how much money the firm will need and how it will be
used. As we are manufacturing silicon chips for smartphone companies. In its manufacturing it is very
necessary to have advanced and high-tech machinery so our main cost will be of equipment buying and
installation. The machinery includes furnace, wafer scribing machine, polishing machine, dicing machine
and probing machines. The total money required to buy and import them will be around 1,00,00,000. At
the start we will require almost 10 workers. The average salary as calculated by seeing workers getting
paid in the industry is 30000 which means total 300000 worth of salaries per month.

Next expense is of the rent for the building. We require 1 canal of building size for which security
deposit has to be paid which is rent of 2 months. The per month rent for 1 canal at our business location in
Gujranwala City is 75000 and security deposit will be 150000, which is equivalent to 2 months’ rent. The

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raw materials required for silicon chips manufacturing includes silica sand, carbon and different chemical
solvents and materials. For the first purchase we plan to buy raw materials of worth 2,00,000. As we are
manufacturing a dust sensitive product so it is necessary to make the building air tight as much as
possible and use precautionary measures like clean room, gloves, clean uniforms etc. and to do such we
will require 6,00,000. To develop our product, we have to spend on the Research and Development and it
will cost us 8,00,000. The next cost is of the registration of the company to give us the legal status of the
company and its expense will be 41,200. To run day to day operations we have decided to allocate
10,00,000 as cash in hand. Total money needed is 1,30,91,200.

Type of Expense Amount (PKR)

Equipment 1,00,00,000
Rent 1,50,000
Airtightness and Precaution 6,00,000
Research and Development 8,00,000
Registration of the company 41,200
Running Finance 18,00,000

Total 1,33,91,200

We will use the method of funding by investing our personal funds in initial stage. First of all, every
member will contribute 6 lacs individually from their parents or elder brother to invest and we will have
the total investment of 30 lacs initially.

For the remaining amount, we will pitch our plan to the different incubators of Pakistan like Plan 9 to
persuade them to invest in our business. If we are not accepted by any incubator, then our backup plan
would be to get funding from angel investors. In Pakistan, such platform is available in form of a website
(angleinvestornetwork.com) where we can find a list of angel investors who are looking to invest in
startup businesses in return for equity. Also, the business has the potential to grow quickly in a short time
which is an attractive thing for the angel investors. We are not going for financing because banks are risk
averse and they very rarely give loan to the startups. They give loans only after they do complete
checking of financial statements and past records of a company. That’s why we are not going to the bank.
Here’s a breakdown of how we are getting our funds:

Individual investment Rs 6,00,000

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Total investment of the founding members Rs 30,00,000

Investment from incubators/investors Rs 1,03,91,200

Assumptions:
These are some assumptions on which our financial statements are based. These are not guessed
assumptions as these are made by proper research:

Semiconductor industry is expected to grow more than double in next 10 years.

 The growth rate of this industry will be 8.4% in 2021.
 We will manufacture 700 silicon wafers per month in first year, 750 per month in second year
and 8000 in 3rd year.
 We will manufacture only one type of silicon wafer (3 inches).
 Cost of one wafer will be 9500 Rs and its selling price will be 10600 in 1 st year, 10700 in 2nd year
and 10800 in 3rd year.
 Operators will work on multiple machines.
 More equipment will be bought after 2 years.
 5% income tax will be applied.
 Very little competition in the industry.
 The selling will be done on cash basis only.
 Suppliers will be paid after 2 weeks.
 There will be no stock at the end of the month.
 We will always have a backup of raw materials of worth 2,00,000 in first 2 years and 2,50,000 in
3rd year.
 All expenses will be paid at the end of the month.
 All of the retained earnings will be kept in business.

Pro forma Income Statement:

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The statement is prepared for time span of 1 year starting from the date when we will start our operations.

Income Statement of 3 years for OCTA (Pvt) Ltd.

Year 1 Year 2 Year 3

Sales 8,90,40,000 9,63,00,000 10,36,80,000

Cost of goods sold (7,81,20,000) (8,37,00,000) 8,92,80,000

Gross profit 1,09,20,000 1,26,00,000 1,44,00,000

Rent expense (9,00,000) (10,00,000) (10,80,000)

Salaries expense (36,00,000) (38,00,000) (41,00,000)

Depreciation expense (10,02,000) (10,02,000) (12,02,000)

Utility Expense (24,00,000) (27,00,000) (30,10,000)

Other Expenses (16,02,000) (16,80,000) (17,30,000)

EBIT 14, 16,000 24,18,000 32,78,000

Income tax expense (70,800) (1,20,900) (1,63,900)

Net income 13,45,200 22,97,100 31,14,100

Pro forma Balance Sheet:

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The statement is prepared for time span of 1 year starting from the date when we will start our operations.

Balance Sheet of 3 years for OCTA (Pvt) Ltd.

Year 1 Year 2 Year 3

Assets:
Current Assets:

Cash 25,45,200 38,97,100 43,55,000

Raw materials Inventory 2,00,000 2,00,000 2,50,000

Total Current Assets 27,45,200 40,97,100 46,05,000

Fixed Assets:

Equipment 1,00,00,000 1,00,00,000 1,20,00,000

Accumulated Depreciation (10,02,000) (20,04,000) (32,06,000)

Total Fixed Assets: 89,98,000 79,96,000 87,94,000

Total Assets: 1,17,43,200 1,20,93,100 1,33,99,000

Liabilities:

Current Liabilities:

Accounts Payable 2,00,000 2,00,000 2,50,000

Stockholders’ Equity:

Owners’ Equity 1,15,43,200 1,18,93,100 1,31,49,00

Total Liabilities & Owners’ equity: 1,17,43,200 1,20,93,100 1,33,99,000

Ratio Analysis:

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Year 1 Year 2 Year 3

Current Ratio 13.73 20.47 18.42

Profit Margin 1. 5% 2.4% 3.0%

Assets Turnover 7.58 8.08 8.13

Return on Assets 11.4% 19.2% 24.43%

Return on Equity 11.65% 19.6% 24.9%

Debt to Equity Ratio 1.73% 1.68% 1.9%

References
1. Industry analysis:
 https://www.eib.org/attachments/pj/semiconductor_industry_en.pdf

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 https://www.investors.com/news/technology/semiconductor-industry-preps-for-accelerating-
growth-2021/
 https://anysilicon.com/semiconductor-market-size-history-forecast/
 en-semi-semiconductor-industry-impacting-trends-survey.pdf
 https://www.fortunebusinessinsights.com/semiconductor-market-102365

2. Economics of the business:

 https://core.ac.uk/download/pdf/230456504.pdf

3. Market analysis and Market plan:

 https://www.fortunebusinessinsights.com/semiconductor-market-102365
 https://www.b2binternational.com/publications/b2b-segmentation-research/
 https://study.com/academy/lesson/what-is-the-sales-process-steps-example-quiz.html

4. Design and development plan:

 https://www.intel.com/content/www/us/en/history/museum-making-silicon.html#:~:text=To
%20make%20wafers%2C%20silicon%20is,fabrication%20facility%20or%20%E2%80%9Cfab.
%E2%80%9D
 https://www.youtube.com/watch?v=_VMYPLXnd7E

5. Operations plan:
 https://www.youtube.com/watch?v=bor0qLifjz4

Appendix

Lean Canvas OCTA Technologies 7/3/21

Page | 37
Problem Solution Unique Value Proposition Unfair Advantage Customer Segments
Silicon chip is not being Manufacturing Easily accessible to every Personal authority Mobile device
manufactured in of silicon chip manufacturer. The right “expert” manufacturing
Pakistan. which is endorsement companies
Silicon chip is imported prepared by Economies of scale
from foreign countries sand.
and it is a costly method.
The silicon
simply act as a
base on which
chip is built.

Existing alternatives Key Metrics High level concept Channels Early adopter
Import from foreign Productivity Silicon chip for mobiles Direct meeting with Samsung
countries mobile
Cost of manufacturing
production companies
Emails
Manufacturing

Sales revenue

Cost Structure Revenue Structure

Research and development cost Earning from our product sales (silicon chip)
Manufacturing cost
Administration cost
Taxes

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Company Registration Documents:

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3. Articles of Association:

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4. Form 1:

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5. Form 21:

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6. Form 29:

CV of group members:

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Huma Awan
Address: street # 2 house# 2 people colony

Gujranwala

Phone: 0306 9855991

Email: [email protected]

WORK Social integration program

EXPERIENCE

I have completed my social internship program in Gujranwala. It is an

unpaid internship but it was a great experience.

EDUCATIO (2017 – 2021)

N Bachelor degree of business administration , Gift university
Gujranwala
I am doing BBA (hons) from gift university obtaining a CGPA 3.95
out 4.
(2015 – 2017)
Intermediate degree of FSC (pre-medical), Punjab group of
colleges Gujranwala
I have done FSC (pre medical) from Punjab group of college Gujranwala with
960 marks out of 1100.
(2013-2015)
Degree of matriculation , Royal genius Cambridge high school
Gujranwala
I have done matriculation in science with the marks of 1007 out of 1100.

ADDITIONAL Microsoft Office package: Microsoft Word, Excel, PowerPoint

SKILLS

Page | 55
MUNEEB HUSSAIN
+923000808130
[email protected].

Sales Manager equipped with extensive experience in

Manufacturing Industries sales management. Employs excellent
leadership skills and multi-tasking strengths. Demonstrated
ability to improve Overall operations, increase top line sales
and reduce costs.

Experience Highlights
 Results-oriented
Office management (Part Time Job)  Revenue generation
Habib Techno Industries, (Pvt.) Ltd  Business development
Gujranwala.  Effective marketing
 Motivate and coach employees to  Organizational capacity
meet service, sales, and repair  Operability and commitment
goals of Sugar Mill’s Parts.  Ability to motivate staff and maintain good
 Create and modify employee relations
schedules with service levels in
mind.
 Maintain detailed logs and reports
of services performed, profit, and
budget information. Education
 Help out in sales and repair areas as
needed and maintain  Bachelor of Business Administration in Marketing
comprehensive current knowledge – (In progress)
of operations. Gift University Gujranwala
 DAE in Mechanical From Christian Technical
Training Centre Gujranwala (PBTE-Lahore)
Internship
Internship in PHA Gujranwala (6 Months)
 I have completed my social Hobbies
Internship program from PHA
(Parks and Horticultural Authority)  Playing Badminton - great way to unwind,
Gujranwala. It has gain lot of distress, and keep the mind sharp.
experience by this internship
program.

Page | 56
Abdul Mateen Address:

Satellite Town Gujrawala

Rathore Phone:

03036816962

Email:
About me:
[email protected]
I work with full sincerity and devotion in an organization which I will be serving and there I will utilize
and prove my knowledge ,skills and academic efficiently and effectively to achieve goals and attain
career growth.
Skill Highlights

 Microsoft Word,Excel,Powerpoint  Service-focused

 Complex problem solver  Ability to produce best results in
pressure situation.

Experience

Social Internship (6 Months)

I have complete my social internship from PHA.It was an unpaid internship but although it was a great
experience.
Education

Gift University (2017-2021)

I am currently doing my graduation BBA Hons with the major of marketing from gift university
obtaining a CGPA 3.56 out of 4.

Punjab Group of Collges (2015-2017)

I have completed my intermediate in I.C.S (Physics).

Quaid-e-Azam Public College(2013-2015)

I have completed in my matriculation level in computer science.
Extra Activities

Playing and watching cricket.

Going to gym.
References

Will be provided on demand.

Page | 57
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s
Muhammad Saad
Street No. 4, Block-A Shaheenabad,
Gujranwala, Pakistan.
Phone: + (92) 335 8252425
Email: [email protected]

 E d u c a ti o n :
G I F T U n i v e r s i t y ( 2 0 1 7 – 2 0 21 )
I am doing my BBA (hons.) from GIFT University Obtaining a CGPA
3.37 out of 4.

ABOUT ME Punjab Group of Colleges (2015 – 2017)

I have completed My Fs.c (pre Engg.) from PCS 2 Gujranwala by
obtaining 718 Marks out of 1100. I have been awarded the best
I prefer to learn things and implement attendance award.
them on my daily life. I am striving to get
as much experience as it is possible and I Future Vision School (2013 – 2015)
definitely want to put the maximum efforts I have completed my matric (sci) from future vision school system
I can in an organization which I will be Gujranwala by obtaining 842 marks out of 1100. I have been award
serving. I always perform tasks with all my as the student of the year based upon my attendance, behaviour and
focus and if I have to do something, I try to potential.
do it as better as I can.  Experience:
Social Internship (6months)
I have completed my social internship program from PHA (Parks and
Horticulture Authority) Gujranwala. It was an unpaid internship but
although it was a great experience.
F a tt a F a tt a H o m e D e l i v e r y S e r v i c e s
Skills I am currently working in FattaFatt Home Delivery Services in
Gujranwala. As this is my Uncle’s company so I am with this
Microsoft Word: company since it was started and gained a lot of experience about
starting a new venture.
PowerPoint:
Prezi:
 E x t r a - A c ti v i ti e s :
Microsoft Excel: Love to play Badminton

Paraphrasing:
Computer related
software:

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