EXECUTIVE SUMMARY 
Distribution Agency is proposed to be located at any densely populated city such as Karachi, Lahore, Rawalpindi, Peshawar or Quetta to distribute Fast Moving Consumer Goods (FMCG) such as Branded Tea, Powdered Milk and Confectionary Items to the Local market. This business can also be undertaken in all small 2nd tier towns, in addition to suburban towns of large cities.  This proposed distribution agency will distribute around 10 tonnes each of tea, powdered milk, biscuits and chocolate / toffees etc per month to the retailers. The assumed sales force has the capacity to distribute around 60 tonnes of product and initially they will be utilizing 67% of proposed capacity. Total Cost Estimate of the project is Rs. 2.17 million. The most critical considerations or factors for success of the project are 1. Product and Brands to be distributed 2. Negotiation and Marketing Skills 3. Credit Recovery
BRIEF DESCRIPTION OF PROJECT  
• Product: It has been suggested that for the proposed distribution business, the company would act as a main institutional distributor for Fast Moving Consumer Goods (FMCG) products. The business would distribute; one established tea brand, any one of packaged Milk, as new brands are growing in the market and any two of confectionery products i.e. biscuits & toffees etc.  
• Location:  Distribution Agency can be set-up in any major city with significant population such as Karachi, Lahore, Rawalpindi, Peshawar and Quetta. This business can also be done in all small second tier towns in addition to suburban towns of large cities. 
• Target Market: The demand of distribution service providers is increasing which is directly proportionate to the increase in FMCG manufacturing companies which are expanding substantially with the current economic growth and consumerism. Therefore the potential target market for the proposed distribution agency setup is retail stores in densely populated cities such as Karachi, Lahore, Peshawar, Quetta, Rawalpindi, Islamabad and all second and third tier cities / towns of Pakistan. 
• Employment Generation: The proposed project will provide direct employment to 15 people. Financial analysis shows the unit shall be  profitable from the very first year of operation
CRITICAL FACTORS 
Critical success factors that affect the decision to invest in the proposed business are: 
i) Products and Brand Product and Brands to be distributed would act as a key success factor for the proposed distribution business. Greater the brand awareness in the market, higher would be the chances of business success. It is suggested that prospective entrepreneur should obtain distribution agreement for at least one successful brand.  
ii) Background Experience Background experience plays an important role in operating a small to medium scale Distribution Agency, especially when dealing with customers, deciding the business development activities to be carried out and negotiating on commercial terms and conditions, etc.  
iii) Marketing Skill The entrepreneur must have effective PR & marketing skills. These marketing skills should enable the entrepreneur to carryout business development activities to target potential customers and also to maintain existing client base.  
iv) Strong Sub-distributor A strong sub-distributor network also plays an important role in generating additional business. Such a network is imperative in developing a strong customer base which might remain restricted if operated alone.  
v) Skilled & Experienced Manpower The knowledge and experience of the entrepreneur is not sufficient to run the business smoothly. A major proportion of business development activities and accounts receivables are managed by sales personnel employed by the agency.  Therefore, it is crucial for the distribution agency to hire experienced and skilled sales staff that can bring in new business and retain existing customer base.
INSTALLED AND OPERATIONAL CAPACITIES   
For the proposed project it is assumed that 480 tonnes / annum of various consumer goods will be distributed across the city where the distribution company is set-up with 5% sales volume growth assumption. For this purpose a staff of total 15 persons will be justifying their job description in various capacities. 
It has been suggested that for the proposed distribution business, the company would act as a main institutional distributor for Fast Moving Consumer Goods (FMCG) products. The business would distribute; one established tea brand, any one of packaged Milk, as new brands are growing in the market and any two of confectionery products i.e. biscuits & toffees etc.  
Products for distribution have been selected for the proposed business by foreseeing their high potential and anticipated expansion in the manufacturing of these products. However, as these products are perishable, efficient distribution operations would be necessary. In order to leverage the opportunity for further business expansion, intensive distribution practice would be followed which means that the business would place its products and services in as many outlets as possible, employing the First in First Out method. 
It is proposed that Milk should not be stored in the warehouse for more than 03 days, whereas, tea and confectionery may remain in stock for 07 days at most. However, it is suggested that time for a product to leave the warehouse and be distributed should be as minimum as possible.
GEOGRAPHICAL POTENTIAL FOR INVESTMENT 
The growing trend of consumerism and increase in population has increased opportunities for the FMCG distribution business in Pakistan. The influx of rural population into urban areas has also increased the demand of consumer goods, therefore, proposed Distribution Agency can be set-up in any major city with significant population such as Karachi, Lahore, Rawalpindi, Peshawar and Quetta. This business can also be done in all small second tier towns, in addition to suburban towns of large cities. 
POTENTIAL TARGET MARKETS  
Pakistan has a domestic market of above 185 million consumers with growing incomes & changing consumption habits. Population growth, increase in per capita income, and urbanization have led to demand of distribution agencies. Consumerism and introduction of new products have fuelled demand. The target market for the proposed set-up is retail stores in densely populated cities such as Karachi, Lahore, Peshawar, Quetta, Rawalpindi, Islamabad & all second and third tier cities / towns of Pakistan.