Transcript
A Business Plan
On
Sugar Free Sweets
Submitted To:
Dr. Rajesh Patel
(Director-MBA Department)
Submitted By:
Gadhvi Nikhil
MBA-SEM-III
Roll no-21
Declaration
I undersigned Gadhvi Nikhil, the student of M.B.A.(SEM-3) of N.R.
VEKARIA INSTITUTE OF BUSINESS MANAGEMENT STUDIES,
JUNAGADH. Declare that the project work present in this report is my own
work and has been carried out under the supervision guidance of Dr. Rajesh
Patel.
This business plan is a part of the subject “New Enterprise &
Innovation management” This project work is not submitted to any other
university for any other examination purpose. I have tried my level best to
include all information in this report.
Date : November 25, 2010 Student signature
Place : JUNAGADH (Gadhvi Nikhil)
Table of Contents
Sr. No. ParticularsPage No.
1. Introduction To SSI
2. Project At A Glance
3. Bio data Of Partners
4. Basis & Presumptions
5. Organization Structure
6. Implementation Schedule
7. Location Justification
8. Portrait Of Products
9. Details Of Raw Materials
10.Marketing Exercise
11.Production Process
12.Financial Aspects
13.Profitability Analysis
14.Break Even Analysis
15.Computation Of Ratios
16.Risk Factor
17.Future Prospects
18.List Of Suppliers
19.Conclusion
Introduction to SSI
Small scale industry has place of pride in our economy. It is
the base for medium and large scale industry helps in earning
foreign exchange, helps generating employment opportunities, and
many more benefits are available to the economy.
Hence, the govt. has introduced the Small & Medium
Enterprise Development Bill 2005 in the Lok Sabha, seeking to
enhance the investment cap for small scale units from Rs. 1 crore
to rs. 5 crore. The bill aims to consolidate the laws governing small
& medium enterprises. It also seeks to extend progressive credit
facilities to SME’s in line with the guidelines laid out by the RBI.
In a move to enable small enterprises to grow, the bill
provides that more than 50 employees can be freed from the
purview of Labour laws including the Employer’s Liability Act,
1938.
This report is made within the boundaries of SSI with the
intense to acquaint the students with the functions of entrepreneur.
Project at a Glance
Name of the unit:-1 Gokul Dairy Farm
Address for communication:- Gokul dairy Farm”
Near post office road,
Gandhi gram Society
Junagadh-362001
Type of the Unit Partnership firm
Location of the unit:- “Gokul dairy farm”
Gandhi gram society road,
Junagadh-362001
Name of the Product:- Sugar free sweets
Partner’s name:- Gadhvi Nikhil N
Avalani Bhavin R
Brand name:- Gokul Sweets
Biodata of Partners
Biodata of Partner:-1
Name:- Gadhvi Nikhil N
Address:- New police quarters B-6/96
Near F.M.tower ,
Bilkha road
Junagadh-362001
,
Education qualification:- BBA with marketing
Age:- 22 years
Finance contribution:- 50%
Role in Unit:- Managing finance and marketing
Biodata of Partner: - 2
Name:- Avalani Bhavin R
Address:- Akshar Residency,B-206
Giriraj Main Road
Junagadh-362001"
Education qualification:- B.B.A. in marketing
Age:- 22 years
Experience:- 2 years
Finance contribution:- 50%
Present activity:- Management and study for C.A.
Role in the unit:- Managing production and human resource
department
Basis & Presumption:-
1. It had been taken into consideration that the unit will work
for 8 hours a day for 300 days in a year. In case of emergency
the overtime will be carried out as the production is based on
orders.
2.To achieve full plant capacity the trial production will be
carried out for 15 to 20 days and by taking 6 to 7 samples.
3.Labor and wages mentioned as per the prescribed minimum
requirement of them
4. Interest rate at 9% for fixed and 13% for working capital is
considered in the project profile
5.Margin of money will very from 30 to 35% depending upon
the labor and raw material available to the firm.
6.The costs of land, construction, charges, machinery and
equipments, raw materials and consumables, other expenses
etc indicated in the profile are based on those prevailing at
the time of preparation therefore they are subject to necessary
changes from time to time based on local conditions.
Organization Structure
Organization is a group of people working together cooperatively
under authority toward achieving and objectives that manually
benefit the participants and organization.
The superior subordinate relationships are defined by organization
charts, which are formal documents that indicate the chain of
command and titles that have been assigned to the managers and
other personnel.
Implementation Schedule
Implementation schedule means actual time required to start the
production process. The major activities in the implementation of
the project have been listed & systematic implementation of
project may take around 11 to 12 months for completion.
Sr. No. Activities Time Period1 Survey for collection of data in
respect of demand, raw material, including power and fuel availability of technology, pollution control
2 months
2 Arrangement for margin money 1 month3 Preparation of project document
and registration1 month
4 Financial assistance 2 months5 Selection of site & development of
land2 months
6 Make shift office 12 months 7 Electricity, fuel and water tying up
for availability2 months
8 Selection of machines and procurement
1 month
9 Selection of raw material and procurement
8 days
10 Recruitment of staff and labor 15 days11 Registration for SSI 15 days12 trial production 20 days
Location Justification
In recent years the concept of industrial location has received much
importance & closer attention for any newly started manufacturing
business. Location of any industry pays a dominant role in success
for failure of the company.
Only best selected location on one side can earn variety of benefit
and any mistake in selection of location on the other side can result
into a great loss. Therefore before selection of the plant location
promoters have to check the various have to check the various
alternative locations in terms of loss contribution and environment
too.
Availability Of Raw Material
All the required raw materials are easily available locally at
market rate for preparing sugar free sweets at proposed location.
Proximity To The Market :
Proximity to the market means nearness to the market. From
marketing point of view, we have very enriched and expanding
market for our products. The most important benefit of nearness to
the market is you can closely be attached with the current market
position of demand, products, competitors, price, consumer beliefs
and attitudes towards the products and many more: we have
selected our location on Gandhi gram main road where the
penetration of dairy products is lesser and only competitors of
sugar-free sweets in Junagadh. So we have a very good market as
rJunagadh is the centre for saurashtra and a highly developing city.
We have a highly developing city. We can create, maintain and
develop the demand easily and profitably. Many hotels are also
consuming the sweets so, the large and beneficial potential is
found out
Availability Of Manpower
Manpower is the heart to run any kind of activities. For effective
running of any firm and activating maximum production & to have
at least cost, labor is required. All skilled and unskilled manpower
can easily be obtained near by the area at cheaper rate and also
with the basic required knowledge to operate.
Availability Of Manufacturing Services
Manufacturing services are the core necessity for efficient and
effective production. Water electricity and other infrastructure
facilities are included in it. As for as our location is concerned
water and electricity is easily available for 24 hours at very
economical rate and other facilities are also available easily as it is
inclusive in the city.
Transportation Facilities:-
By selecting this plant location for sweets will be beneficial more
for transportation mode rate and way we won’t have our own
transportation vehicles, the distribution of sweet will be carried out
through transportation contract will private companies. Which are
easily available at economic rate.
Personal Factor
We have selected this unit because of above all reasons and in
addition, our personal influence for the selection, as we want to
develop this area by anyway if we can society the society in our
earlier stage of business.
Other Ancillary Services:
Other ancillary services like banking, insurance, technically
assistance, warehousing etc are easily available at feasible rate.
Thus viewing all phases of the location, it seems to be most
appropriate location for the firm so we considered it as very
favorable & ideal location for us.
Portrait of Products
“Sugar free sweets”, the name itself suggests that they give
sweetness to those people whom sweets are for away to reach the
products is made for diabetics and diet conscious people.
The concept of sugar-free sweets comes into the Junagadh before
3 years. This is the segment where only a few competitors and
great potential for expansion. We have done search and surveys for
check in the demand and trend of the people towards sweets and
from them sugar-free sweets and we came to know that only 20%
consumers prefer sugar-free sweets in the general time or in
occasions. But by considering today increased number of diabetic
patients and the awareness among the people, we found and larger
& great market for the same.
We want to start sugar-free sweets for diabetic patients with the
motto of serving society and better and profitable way than the
competitors. We have entered in riche market the initial launching
strategy of use will itself our products quality i.e. delicious test
convenient packaging, superior quality, and nutrition, affordable
price on time delivery or quick delivery.
We will produce many products based on & main ingredients i.e.
dahi, fig and black raisins. The various products are made from it
and other in gradients like cashew coconut powder, pista, almond
and many more each product changes comparatively high price
than the general & common sweets before all are made from dry
fruits.
The products produced & their rate of each product given below
Items
Items Rate (per kg.)
Dry Fruits Roll Cut 400
Angier Cassata 320
Angier Dry Fruit Halva 160
Angier Roll 400Cayce Anger Roll 300Manpasand 320Sangam Slice 150Angir Slice 160Angir Badam Halva 220
Details Of Raw Material
Raw material is the precondition for production function.
Qualitative raw material effective processing and proper
maintenance are milestones for efficient production.
The main raw materials required for preparing sugar free
sweets are as follows
1.fate
2.Ghee
3. Cashew
4.Almond
5.Fig
6.Pista
7.Black raisins
8.Coconut powder
And other required materials are
1 Paper boxes
2 Plastic packets
3 Plastic papers
Containers (for loose selling)
Marketing Exercise
Demand Analysis
The demand of the sugar free sweets in current market specially
in saurashtra is 12 % where demand of the general sweet is larger
than it but the future potentially is grater in terms of demand.
Specially diabetic people will consume occasionally as well as
generally.
Supportive Basis For Growth Is Demand:
Increase the number of diabetic patients & diet conscious people in
the society growth rate 10 %
Current Consumption Pattern
Product are being consumed on routine basis and also occasionally
consumption Size
Consumption size for sugar free sweets is comparatively small
than general sweets
Pick Points With Reference To Demand
Festivals time
marriage seasons.
Segmentation
The market segmentation of sugar free sweet may be classified as under:
Geographical Segmentations:
As sugar free sweet made mainly from the dry fruit and pure materials having very high prices so they are consumed by the class people living in Jalaram society Road, M.G. Road, Azad Chowk, Circle with special reference to Junagadh only and other regions where the rich people are living
Demographic Segmentation:
1 Age group – above 30 years2 Income – high earn3 Personalities- rich & aristocrat personalities4 Social class- higher middle & upper class5 Education- highly educated and well awarded6 Behavioral – well awarded
Psychological Segmentation:
Beliefs & attitudes – favorable, positive
Pricing Decision
Objectives
1 To earn desirable profit2 To society the society3 To fight with competitors4 To create brand equity
Influencing Factor
1 Cost of raw materials 2 Cost of production3 Prevailing demand 4 Competitors price
Pricing Method
1 Cost plus pricing
Distribution Decision
Channel
2 Distributors – retailers- end users3 Hotels & restaurants 4 Wedding planners5 Event managers
Positioning
Product positioning]
(Note: * The product sugar free sweets are expensive and nutritious for the end users.)
By doing comparative study of the above map, we can make out our close competitors are sugar free sweets chemical based and sugar free ice scream.
Brand PositioningThe brand positioning map of the Gokul brand is as follows:
Analysis of Competitors
The main competitors of Gokul sugar free sweets are…
1 Shiv Shakti Sweets2 Sweet Palace3 Bengal Sweets
These are the main competitors providing suger free as well as general sweets the concept of suger free sweets came on Junagadh before 3 years so there is not keen competition but oligopolistic market competition
Competitive strategyTo compete with the existing competitors company will create awarness among the people that such kind of qualitative taylor made and nutritious products are available. Effective advertising through sign boards hoardings and print ads in various materials effective distribution strategy is being adopted
Competitive advantage
1 The quality of the sweets, 2 It’s delicious taste, 3 Effective pricing policy,4 Efficient distribution channels.
Promotion Decision
Objective
1 Create awareness among mass for sugar free sweet & specially among patients
2 Brands awareness3 Brand preference4 Brand loyalty
Budget
5 Rs. 10,000 per month
Tools
6 Signboards, 7 Hoardings, 8 Printed materials, 9 Catalogs, 10 Local magazines, 11 Other materials of social groups.
Production Process:
For making up of sugar free sweets mainly 3 dry fruits are used for a base i.e. Date, fig & Black grapes
Preparation Method
To prepare date based sugar free sweets firstly make it seed less then to crush it in mava maker and to fry it on gas stove with pure ghee. Then after to cut and sliced the dry fruits according to their name and given specification like cashew almond pista and coconut powder etc add to the fried date and again fried it in maska machine then give them different shapes according to their name & specifications give to them. To freeze the mis refrigerator for 3 to 4 hours now date based any item is ready to eat or serve.
Date BasedThe items which are made from the date are:-
1 Dry fruit roll cut2 Manpasand3 Sangam slice
The other fig based and black raisins based items also require the same process as date based
Fig Based
The main items made from fig based are:
1 Angir kasata2 Angir Roll3 Angir Dryfruit halva4 Kaju Angir Roll5 Man pasand6 Angir slice7 Angir badam halva
Black Raisins Based
8 Dry fruit roll cut9 Kishmis kamal10 Kishmis kasata11 Kishmis roll12 Manpasand13 Sangam katri14 Badam kishmis15 Kaju kishmis etc
Financial Aspects:
Fixed capital Details (Section - I)
(a) Land And Building
Sr. No. Particulars Amount (Rs.)
1 Land :500 sq. mtrs. @ Rs. 5000 per sq. mtr.
2,500,000
2 Building:Work shed: 200 sq. mtr. @ Rs. 7500Storage: for raw material 20 sq. mtrs. And for finished goods 20 sq. mtrs.
1,500,000
3 Furniture:Electrification and fixtures
250,000150,000
Total 4,400,000
(b) Machineries & Equipments
Sr. no. Description Qty Price (per unit)
Total Price (Rs.)
1 Mava Maker 4 80,000 320,0002 Dry Fruit Cutter 2 15,000 30,0003 Maska Machine 1 25,000 25,0004 Slice Machine 2 20,000 40,0005 Refrigerator 2 110,000 220,000
Total 11 250,000 635,000
(c) Statement Showing Total Fixed Cost
Sr. No. Particular Cost (Rs.)1 Land building and furniture 4,400,0002 Machineries and equipments 635,000
Total 5,035,000
Land Building Machine & Equip.
Working capital details (Section – II)
(a). Personnel (Per month)Sr. No.
Designation No.s Salary Total
1 Manager 1 7,000 7,0002 Supervisor 2 5,000 10,0003 Accountant 1 4,500 4,5004 Stock Keeper 1 2,500 2,5005 Counter Person 1 3,000 3,0006 Skilled Workers 4 2,200 8,8007 Unskilled Workers 6 1,800 1,800
Total 16 46,600
(b) Raw materials
Sr. No. Particular Qty (kg.) Rate (per kg) Total1 Ghee 30 140 4,2002 Cashew 100 240 24,0003 Almond 70 480 33,6004 Fig 50 280 14,0005 Date 70 35 2,4506 Black
Grapes40 140 5,600
7 Coconut Powder
20 75 1,500
8 Pista 20 280 5,600Total 400 90,950
(c). Utilities (per month)
Sr. No.(Rs.)
Particular Total Value
1. Power – per unit Rs. 4 70002. Water 5000 ltrs 20003. Gas 125 bottles @ 320 (aprx.) per
no.40000
Total 49000
(d) Other expenses (per month)
Sr. No. Particulars Value (Rs.)1 Postage & Stationary 5002 Telephone 30003 Repair & Maintenance 20004 Transportation Charges 150005 Advertisement 200006 Insurance 20007 Miscellaneous Expenses 5000
Total 47500
(e). Statement showing total working capital (monthly)Sr. NO. Particulars Cost1 Personnel 466002 Raw Materials 909503 Other Expenses 475004 Utilities 49000
Grand Total 234050
(f) Working capital Requirement (for 3 months)
Rs. 2 34 050 X 3 Months = Rs. 7, 02, 150
Total Capital investment
Sr. No. Particulars Value (Rs.)1 Fixed Capital 50350002 Working Capital 702150
Total 5737150
Sources of Finance
Sr. No. Particulars Contribution Value1 Owned Capital 35% 2008002
2 Borrowed Capital 65% 3729147Grand Total 5737150
0500000
1000000150000020000002500000300000035000004000000
OwnedCapital
BorrowedCapital
Contribution
Value
Contribution Value
Interest On Capital
Sr no. Particulars Rate Value (Rs.)1 Owned Capital 9% 1807202 Bank loan 12% 447498
Total Interest 628218
Depreciation Details
Sr no
Particular Gross block
Rate Depreciation
Net Block
1 Building 1500000 10% 150000 13500002 Furniture 250000 8% 20000 2300003 Machines
& Equipments
635000 10% 63500 571000
Total 2385000 233500 2151500
Cost Of Production
SR NO. Particulars Value (Rs.) 1 Total requirement of working
capital2808600
2 Depreciation on Building 1500003 Depreciation on machinery 635004 Depreciation on Furniture 200005 Interest on Bank Loan 4474986 Interest on owned Capital 180720
Total cost 3670318
Sales Turnover (Monthly):
Yearly Sales Turn over
Sr. no. Particular Qty Rate Amt
1 Date Based 300 500 150000
2 Black Raisins Based
250 600 150000
3 Fig Based 400 550 220000 Total 950 1500 520000
Sales =520000 X 12 Months= Rs. 62,40,000
Fixed Cost
Sr. No. Particulars Value (Rs.)1 Depreciation on building 150,0002 Depreciation on furniture 20,0003 Depreciation on machinery 63,5004 Interest on bank loan 447,4985 Interest on owned loan 180,7206 Insurance 10,0007 40% Salary & wages 18,6408 40% Other Expenses 19,000
Total 909,358
Profitability Analysis
Particulars Amount (Rs.) Sales volumeLess: Cost of production [Excluding interest]
62400003,042,000
Earning before Interest & Tax Less: interest on Capital
3198000628,218
Earning before TaxLess: income tax at 35% (assumed)
2569782899424
Profit After Tax 1670358 Profit
Profitability = ---------- X 100 Sales
936577 = ---------- X 100 = 15%
6240000
Break Even Analysis
Break even analysis is widely used technique to study cost volume
profit relationship. The narrow interpretation of the term break even analysis refers to a system of determination of that level of activity where total cost actual total selling price.
In nut-shall, BEP means like level of output of sales at which no profit no loss is activated.
Break even point for sugar free sweets
Fixed CostBEP = ------------------- X 100 Fixed Cost + profit
909,358= ---------------------- X 100 909,358 + 936577
= 49.26 %
Computation Of Ratios
Return on Investment
Net Profit 936577x 100ROI = ----------------- X 100 = ---------------
Total Investment 2,737,150
= 34.21%
Return on Fixed Assets
Profit 936577 X 100= ----------- X 100 = ----------------Total Fixed Assets 5,035,000
= 18.60%
Risk Factors
For inception of any activity, the risk factor is involved with itself. Risk factor is like living without being born. So, before starting any organization or unit the entrepreneurs have to keep in mind the weak as well as threatening feets of the firm.
The risk factors involved with Utsav Dairy Farm may as follows:
1 The demand of the products may not be generated as
predicted.
2 The firm will have to face strong competition.
3 The promoters of the firm are not much experienced in the
field of entrepreneurship and in the food items.
4 Consumers will not be got much well aware about the
products.
5 In the very first year the company may face loss.
Future Prospects
The modern world is fast growing, it is expanding considerably in food habits. New innovation of yesterday is old for today, it is a past and tomorrow is a present.
The following are the future prospects of my unit:
1 Expansion in existing tem with different flavors and
ingredients
2 Expansion in existing market and cover the entire Gujarat.
3 Diversifying in other sugar free food items.
4 Development of various branches whole over the Gujarat.
List Of Suppliers
1.Ambika machines,
Rajkot Highway,
Saverkundala.
2.Rathod machines
6 Mavdi Plot,
Rajkot.
3.Gayatri Refrigerator
Kalawad Road,
Kotecha Chowk,
Rajkot.
4.GAS
Gujarat Essence.
Rajkot.
P&l account for 3 years
Particular 1st Year 2nd Year 3rd YearSales 6240000 6864000 7550400Net Sales / Income (A)
6240000 6864000 7550400
Manufacturing Exp.:
Raw Materials 1091400 1200540 1320594direct wages 265200 291720 320892Utilities 588000 646800 711480Repairs & Maintenance
24,000 26400 29040
Total Manu. Exp. (B).
1968600 2165460 2382006
Gross Profit (A-B) (C)
4271400 4698540 5168394
Adm. Selling Exp .
Telephone 36,000 39,600 43,560Postage & Stamp Duty
6,000 6,600 7,260
Miscellaneous Exp.
60,000 66,000 72,600
transport exp. 15,000 16,500 18,150Salary 294000 323,400 355,740Depreciation 2151500 2,366,650 2,603,315Insurance 24,000 36,000 36,000Interest Own Capital 190720 190720 190720Borrowed Capital
447498 447498 447498
Total Adm. Ex. (D)
3,224,718 3,492,968 3,774,843
Operating Profit (C-D)
1,046,682 1,205,572 1,393,551
(Less) Tax 110,105 421,950 487,743
Balancesheet for 3 years
Particulars 1st Year 2nd Year 3rd Year
Capital Liability
Own Capital 2008002 2008002 2008002(+) Int. on Capital 688218 688218 688218(+) Net Profit 936577 783622 905808 3632797 3479842 3602028Borrowed Loans
3729147 3729148 3729149
Creditors 250000 270000 260000Total 7611944 7478990 7591177
Property Assets
Fixed Assets
land & Building Less Dep.
1500000 1350000 1215000
Machine Less Dep.
635000 571500 514350
other fixed assests less dep.
250000 230000 211600
debtors 702150 1167665 1167665Cash and
bank4,524,794 4,159,825 4,482,562
Total 7611944 7478990 7591177
Cost sheet for 3 years
Particulars 1st year 2nd year 3rd yearRaw Material Consumed
Op. Stock of Raw Material
-
Purchase 1091400 1200540 1320594Cost of R.M. Consumed
1091400 1200540 1320594
Direct Wages 265200 291720 320892Utilizes 588000 646800 711480Prime Cost 3036000 2139060 2352966Factory Overhead
Salaries 294000 323400 355740Dep. On Building & Machine
150000 165000 181500
Maint. & Repairs of Machine
24000 26400 29040
Work Cost. 3504000 2653860 2919246Office / Adm. Overhead
Telephone 36,000 39600 43560Postage & Stamp Duty
6,000 6600 7260
Insurance 24,000 26400 29040Mis. Expenses
5,000 5500 6050
Interest on Cap.
688218 757039.8 832743.78
Depre. On other fixed Asset.
20000 18400
Cost of Production
4,283,218 3,507,400 3,837,900
Selling & Dist. Overheads
transport exp. 15000 16500 18150Cost of Sales. 5,888,814 6,377,852 6,922,277Sales 6270000 6897000 7586700Profit 381,186 519,148 664,423
Conclusion
To end up the discussion, since the starting of the project with the selection of the sugar free sweets for a new segment of consumers with the greater potentially.
This is my pleasure to put this report before the University for launching the “sugar free sweet”. As a promoter of this unit, I have made all the required efforts for the successful launching of all products. I hope that the sugar free sweets will be successes in the market and specially my brand, “GOKUL Sugar free sweets”. The main aim of mine for launching this kind of product is just to society the society by providing best quality products for the diet conscious and diabetic patients.
Govt. should support these kinds of small scale units to serve the public with qualitative food items. I also want to help in generation of employment opportunities and to raise standard of living. At least I am again very thankful to all of the concerned people who helped me in preparing this report. This is also true for me as I thought my report could express my thoughts & researches for sugar free sweets. It was a great experience that I might want to deal in future. That’s all it will be great opportunity for every student.
Disclosure of significant accounting policy.
1) We take double entry system in book keeping area.
2) Method of depreciation = Written down method
3) Valuation of Inventory=Cost price or market price
which ever is less.
Accounting Year = 1st April to 31st March.
top related