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Multi pronged strategy: Retail Trading, Hiring out RO-Machines and Processing & selling RO-Purified Water EPGL to appoint franchisees all over India >250lph.

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Presentation on theme: "Multi pronged strategy: Retail Trading, Hiring out RO-Machines and Processing & selling RO-Purified Water EPGL to appoint franchisees all over India >250lph."— Presentation transcript:

1 Multi pronged strategy: Retail Trading, Hiring out RO-Machines and Processing & selling RO-Purified Water EPGL to appoint franchisees all over India >250lph machines machine manufacturing <250lph units importing from Puricom EPGL Forte: Appropriate technology, affordable terms Franchisee Model Up-scaling to Widen Network

2 Multiple Revenue Sources Franchisees Company Owned Company Operated (COCO) plants: Install, own and operate lph RO plants in housing societies, commercial complexes, and sell - Provides maximum net returns to capital over entire plant cycle. - Have higher social impact - High upfront capital investment - Have a long pay back period Hiring Out RO-Systems: Place 20-60lph RO-machines on rent /billing as per water meter to corporate clients presently buying liter RO-purified water in 20liter carboys daily and bill them 60-80p/liter without/ with cooler. - Better control on water quality as also raw water source - Cost effective to End user compared to buying water in carboys Retail Marketing of RO-systems: Retail market RO-machines to end users - Generates lesser margins per machine - Incomes come from high rotation of capital

3 Operation Plan Laid Out Start with 20franchisees nationwide each having a ft office & marketing/ office staff to hire out RO-units, sell machines and put up COCO plants Franchisee shall pay Rs on signing the agreement and buy 2units of each of currently offered 10-60lph units at franchisee price. Cost of these units at franchisee rates comes to Rs plus taxes ex Ahmedabad 10-60lph RO-units will be booked in lots of 50units against deposit of Rs.2000/ machine. For every hiring out machines, franchisee will pay Rs.3000/machine on delivery. On units taken for sale, he will pay franchisee price less Rs Franchisee will bear c ost of cooler/coldwater dispenser which becomes his asset while RO-machine placed on hire will remain Company asset Franchisee will have 2 ITI pass technicians and add one per 50 machines. Company will train free training to these technicians in machine installation & maintenance. For maintenance works all consumables will be provided by the company while manpower will be to Franchisees account Company will provide marketing literature including a 15min film on need for purified water. Franchisee will pay for conducting local marketing campaigns Franchisee will install one lph RO-plant independently or in partnership with EPGL within one month from signing the agreement

4 Revenue Sharing Between EPGL & Franchisee In machine hiring, Company will be retain 45% of monthly rental sum and pay 55% to the franchisee when water cooler is provided. In case, cooler is not to be provided, franchisee share will reduce to 40% while 60% will go to the Company. In case, franchisee chooses not to invest in water cooler, Company will provide the same and then the franchisee commission will reduce to 20% of the monthly rental sum. Hiring out rates are Rs.16 per 20liter including water cooler and Rs.12 per 20liter without the cooler. Company will provide 250/500/1000lph RO-plants against an interest free deposit of Rs.25000/Rs.50000/Rs respectively to be installed by franchisee in housing societies, commercial complexes, schools, colleges, villages, etc. on equal revenue sharing basis with operator salary and power bill borne by the franchisee and machine maintenance and consumables provided by EPGL. Space (plant room) and raw water will come free from the sponsors. Franchisee will get commission on basic machine for 250lph plants and 15% for 500 and 1000lph plants. Current end user price of these plants is Rs , and for raw water with TDS below 3000ppm

5 Operation Analysis: Trading of 10-60lph RO-machines Sl. Machine Type Output Carton Printed Minimum Franchisee Gross Minimum No. (lph) Retail Price End user Price Margin (Rs) Order size (Rs) Price (Rs) (Rs) (at minimum) (Nos.) GPD GPD GPD GPD Any part replacement under warranty will come from EPGL free Franchisee will be free to bill nominal installation charge from the end user EPGL shall soon introduce lph machines also. Their price structure will be worked out and duly intimated to the franchisee

6 Trade Names Machines will be sold/Hired out under brand name Golden RO-Doctors Choice. RO-purified water from the RO-plants owned and operated by an agency will be marketed under the name Shuddh Jal Mridul. Design layouts and contents of carboy stickers will be provided to each agency by EPGL and followed by agency.

7 Work Scopes: Franchisee Generate leads on prospects for RO-units on hire Follow up leads provided by the Company Close deals/sign Company/Client MOUs as per terms Raise monthly bills on clients and follow up payments Record client complaints and depute technicians Provide periodic maintenance visit to each installation Maintain inventory of spares to service hired out units Maintain record of service calls for each machine for quality monitoring

8 Work Scopes: Company Provide technical support & specifications To Provide RO-machines and equipment as per client/company contract Provide spares and components Provide leads to the Franchisee Provide national brand & media support

9 CAPEX/OPEX for Franchisee over 4years CAPEX/OPEX for the Franchisee: - Machine Hiring operations Sl.No. Description Years (Amounts in 000INRs) Marketing Manager (30% Sales Executives 3nos. 70% Technicians 3technicians on Traveling person day Receptionist, office boy, accountant: Rs.1.2lac/yr Office Space Rental incl. power Rs.1.5lac Miscellaneous Rs.50000/yr Total Out flows Interest on Deposit with the Company: Computations on minimal investment basis. Earnings may go up with additional investments. - Franchisee may own & operate a 500lph plant rather than share with the company. - Franchisee may opt to invest in water coolers & take away 55% rather than 20% computed here - We target to install 1000machines in 2years. Analysis is carried out considering this duration as 4yrs - Franchisee will have right to shift between machine hiring out and selling targets

10 OPEX - RO-Plants for Cluster Users CAPEX/OPEX for the Franchisee: - 5 RO-plants/year in clusters (housing societies, commercial complexes, restaurants, schools, colleges, hospitals, etc.) Marketing Manager (30% Sales Executives 10% of three technicians Supervisor with marketing manager Traveling Rs.1000 per person day Operators 6operators for Interest on Deposits with the Company [ ] Total Outflows:

11 OPEX – Trading of RO-Plants Marketing 50RO-plants/ year Marketing Manager (40% Sales Executives 3nos. 20% Traveling 150persondays / Total Outflows: * Entire traveling is within the state of operation and includes fare, boarding, lodging whenever applicable

12 Entrepreneurs Earnings from the Initiative Gross Outflows (Rs. In 000s) On Corporate Hiring For Cluster Plants On Marketing Operations Interest on TOTAL OUTFLOWS Deposit with the Company Revenue share of the franchisee from : Corporate Plants Cluster Plants (500lphX0.20X6) Direct sales Total Revenues Net Contribution Value of Company goods under the charge of the franchisee is much higher than the franchisee deposit sum such that franchisees money is fully secure. Franchisee will be free to buy franchisee price and be sole beneficiary of hired out / cluster plant operations

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