Case
Supplementary Resources
Abstract
The case primarily deals with an enterprising young entrepreneur who faces an unexpected situation. He has recently launched a startup which produces gifts using calligraphic art. He receives an offer of investment of Pakistani Rupees (PKR) 3 million for his new business; however, he does not know how much money he actually needs to take his startup to a whole new level against how much ownership he is willing to give up. The decision revolves around the issue of control and business ownership versus being rich.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1. The Products
| Current Product Offerings: | |
| Calligraphy | |
| Tughra | Calligraphic rendering of a person, or an organization’s name, in the traditional Ottoman Empire style. |
| Expected Line of Products (2015 onwards): | |
| Calligraphy | |
| Tughra | Calligraphic rendering of a person, or an organization’s name, in the traditional style of the Ottoman Empire. |
| Quranic Verses | Calligraphic writing of Quranic verses used for decoration. |
| Tiles | |
| Historical Tiles | Hand-painted replicas of tiles from historical places of Pakistan, for example, tiles from the Badshahi Mosque, Wazir Khan Mosque, Multani and Sindhi designs, etc. |
| Mughal Miniature Tiles | Hand-painted Mughal paintings on tiles. |
| Customized Tiles | Tiles with a border of historical design with a tughra in the centre. |
| Ceramics | |
| Mugs | Hand-painted mugs with a tughra on one side and the gift giver’s name and logo on the other. |
| Plates | Hand-painted plates with a tughra in the centre and the sides decorated with traditional designs. |
| Paintings | |
| Oil Paintings | Replicas of Mughal paintings done in oil paints. |
| Mughal Miniatures | Replicas of Mughal paintings done in traditional miniature watercolours. |
| Fabric | |
| T-shirts | Shirts with Tughras and Mughal designs. |
| Wood | |
| Paintings | Traditional Mughal designs hand painted onto wood. |
| Metal, Stone, Glass, etc. | |
| Memorabilia | Pendants, coins, trophies, etc. |
Source: Company documents.
Exhibit 2. Current Products
10 × 12 tughra made on hand-made paper with shamsa. This is a tughra of Iqra Saad Sahil.
20 × 20 tughra made on white paper.
Source: Company documents.
Exhibit 3. Future Products
Source: Company documents.
Exhibit 4. Organization’s Structure
Source: Company documents.
Exhibit 5. Financials
| Revenues | ||||||
| Sales in Units | Sep. 2014 | Oct. 2014 | Nov. 2014 | Dec. 2014 | Jan. 2015 | Feb. 2015 |
| Tughra – small | 0 | 0 | 0 | 1 | 5 | 5 |
| Tughra | 6 | 7 | 11 | 12 | 13 | 20 |
| Tughra – big | 0 | 0 | 0 | 0 | 0 | 5 |
| Sales in PKR | Sep. 2014 | Oct. 2014 | Nov. 2014 | Dec. 2014 | Jan. 2015 | Feb. 2015 |
| Tughra – small | – | – | – | 1,500 | 7,500 | 7,500 |
| Tughra | 12,000 | 14,000 | 22,000 | 24,000 | 26,000 | 40,000 |
| Tughra – big | – | – | – | – | – | 25,000 |
| Total Revenue | 12,000 | 14,000 | 22,000 | 25,500 | 33,500 | 72,500 |
| Costs | ||||||
| Units Produced | Sep. 2014 | Oct. 2014 | Nov. 2014 | Dec. 2014 | Jan. 2015 | Feb. 2015 |
| Tughra – small | 0 | 0 | 0 | 1 | 5 | 5 |
| Tughra | 6 | 7 | 11 | 12 | 13 | 20 |
| Tughra – big | 0 | 0 | 0 | 0 | 0 | 5 |
| Cost in PKR | Sep. 2014 | Oct. 2014 | Nov. 2014 | Dec. 2014 | Jan. 2015 | Feb. 2015 |
| Tughra – small | – | – | – | 1,200 | 6,000 | 6,000 |
| Tughra | 10,200 | 11,900 | 18,700 | 20,400 | 22,100 | 34,000 |
| Tughra – big | – | – | – | – | – | 20,000 |
| Total Costs | 10,200 | 11,900 | 18,700 | 21,600 | 28,100 | 60,000 |
| Cost-Price Matrix | Size | Price | Cost of Writing | Materials | Framing | Margin |
| Tughra – small | 6 x 6 | 1,500 | 800 | 200 | 200 | 20.00% |
| Tughra | 8 x 10 | 2,000 | 1,000 | 350 | 350 | 15.00% |
| Tughra – big | 20 x 20 | 5,000 | 2,500 | 500 | 1,000 | 20.00% |
Source: Company documents.
Forecast Assumptions:
The projected revenue and cost will be 1.3 times the average historical revenue growth rate.
Exhibit 6. Financials (Cash Flows)
| Cash Flows | ||||||
| Sep-14 | Oct-14 | Nov-14 | Dec-14 | Jan-15 | Feb-15 | |
| Sales | 12,000 | 14,000 | 22,000 | 25,500 | 33,500 | 72,500 |
| COGS | 10,200 | 11,900 | 18,700 | 21,600 | 28,100 | 60,000 |
| Gross Margin Expenses | 1,800 | 2,100 | 3,300 | 3,900 | 5,400 | 12,500 |
| Advertisement | – | – | 800 | 1,300 | 2,000 | – |
| Fuel and Transport | – | 1,000 | 1,000 | 2,000 | 3,000 | 3,000 |
| Communication | 500 | 500 | 500 | 500 | 500 | 500 |
| R&D | 20,000 | 10,000 | 5,000 | 5,000 | 5,000 | 5,000 |
| Total Expenses | 20,500 | 11,500 | 7,300 | 8,800 | 10,500 | 8,500 |
| Net Profit | (18,700) | (9,400) | (4,000) | (4,900) | (5,100) | 4,000 |
| Inventory Frames | 5,000 | 5,000 | 5,000 | 25,000 | 50,000 | 50,000 |
| Papers, Ink, etc. | 20,000 | 20,000 | 20,000 | 20,000 | 50,000 | 50,000 |
| Expenditure | (25,000) | (25,000) | (25,000) | (45,000) | (100,000) | (100,000) |
| Total Outflow | (43,700) | (34,400) | (29,000) | (49,900) | (105,100) | (96,000) |
Source: Company documents.
Forecast Assumptions:
- First, the respective expense is taken in proportion to the sales revenue in that period. It is assumed that the proportional share of respective expense will remain the same over the entire forecast period.
Advertisement: 0.05% of the sales revenue
Fuel and Transport: 1.50% of the sales revenue
Communication: 0.05% of the sales revenue
R&D: 2.00% of the sales revenue
- Inventory: The Frames and Paper will be the target of 10% of the sales until the end of year, that is, 2015. The inventories will be further targeted to 3% of the Sales from 2016 to 2019.
Exhibit 7. Business Cycle
Pakistan’s Business Cycle Phases (HP Filter)
| Date | Partial Cycle | Full Cycle | Average GDP Growth (LCU) | Business Cycle Component | Phase | Max/Min |
| 1961–1972 | 11 Years | 6.23 | 0.09 | Recession | Trough (1972) | |
| 1973–1983 | 10 Years | } 22 Years | 5.93 | –0.05 | Expansion | Peak (1983) |
| 1984–1996 | 12 Years | 5.05 | –0.01 | Recession | Trough (1996) | |
| 1997–2005 | 08 Years | } 12 Years | 4.64 | 0.37 | Expansion | Peak (2005) |
| 2006–2010 | 4 Years | 3.48 | –0.57 | Recession | Trough (2010) | |
| 2011 Onwards | 4.16 | 0.23 | Expansion | – | ||
Note: *Long -run discount rate is 12% (State Bank of Pakistan).
Source: GDP Growth Data, World Bank. (Business Cycle Calculations by the Author).
Exhibit 8. Curriculum Vitae
| SAAD SAHIL | |
| Lahore University of Management Sciences | May 2015 |
| MBA | |
| Lahore School of Economics | 2013 |
| BBA (Hons.) | |
| EXPERIENCE | |
| Growth Consultants | |
| Consultant-General Management | Jan 15 – To Date |
| |
| Kalam Cultural Arts | Sep 14 – To Date |
| Co-Founder-CEO
| |
| Tetra Pak Pakistan | Jun 14 – Jul 14 |
| Intern-Procurement and Finance
| |
| Naqsh School of Arts | Dec 12 – Jul 13 |
| Teacher-Education
| |
| Ali Institute of Education | Nov 12 – May 13 |
| Teaching and Research Assistant – CPDC
| |
| Lahore University of Management Sciences | Aug 12 – Aug 12 |
| Intern-Marketing and Alumni Affairs
| |
| Tetra Pak Pakistan | Jul 11 – Aug 11 |
| Intern-Marketing and Environment
| |
| Packages Lanka (Pvt.) Ltd. | Jun 08 – Jul 08 |
| Foreign Intern-Marketing, Finance, Sales and HR
| |
| Together Strategic & Development Consultants | Aug 07 – Aug 07 |
| Intern-Development
| |
| PROJECTS | |
| Business Plan for ‘Modern School System’
| |
| Implementation of International Baccalaureate in Pakistan
| |
| ADDITIONAL SKILL AND EXPERIENCE | |
| Director Finance of LUMS MBA HR Club 2014-2015 Government Primary School Hera Singh Wala (April 2011 – May 2012) Operated and Managed the whole school. | |
| INTERESTS | |
| Teaching, Writing Articles and Stories, Playing Table Tennis, Horse Riding | |
Exhibit 9. Curriculum Vitae
| IQRA NOMAN | |
| EDUCATION: | BACHELORS IN SCIENCE (BSc) from University of Karachi, 2012 Majors: Biochemistry, Chemistry, and Bio-Statistics Subsidiaries: English, Urdu, Islamic Studies, Pakistan Studies INTERMEDIATE IN SCIENCE (Pre-Medical) from Board of Higher Education, Karachi, 2010 Majors: Chemistry, Physics, Biology Subsidiaries: English, Urdu, Pakistan Studies. MATRICULATION (Science) from Board of Secondary Education, Karachi, 2008 Majors: Physics, Chemistry, Biology Subsidiaries: English, Urdu, Maths, Islamic Studies |
| EXPERIENCE: | Naqsh School of Arts, Lahore, 2014 In-charge of Naqsh Gurmani Centre, located in Gulberg. I was responsible for their intakes, marketing and the day-to-day running of the art school. Liaqat National Hospital, Karachi, 2013 Intern in Haematology and Microbiology departments. Intek Education System, Karachi, 2010 Taught children of Grade 5, for 3 months at Intek Education System |
| HOBBIES: | Sketching, Drawing, Painting |
| AWARDS: | Received the ‘Pakistan Day Celebration’ Award, 2012. |
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
