Feasibility Report Word

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FEASIBILITY REPORT

ON

³RESTURANT´

Feasibility Report as a part of partial fulfilment of PGDM

degree.

Submitted by: NITENDRA SINGH

Enrolment no: 1074

Under the Supervision of: MR. Y.P.SINGH

Faculty of Management Department.

Submitted to:

Department of Management, IISE, LUCKNOW

INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION

KANCHANA BIHARI MARG, KALYANPUR, LUCKNOW, PIN -226022



Acknowledgement:

Before I embark upon the details of this project, let me take this opportunity to

express my heartiest gratitude towards the people who have provided invaluable

help & support through the entire duration the project. It gives me immense

pleasure to express my deep sense of gratitude to Mr.Y.P.SINGH, FACULTY

OF MANAGEMENT, for his valuable guidance and consistent supervision

throughout the course and providing me an opportunity to present a Feasibility

report of ³RESTURENT´. I would like to thank him for giving us excellent

suggestion and affectionate, encouraging through development of project a nd

for devoting their precious time. I offer thanks to them for co-ordination and

grateful to all our well-wishers who extended their support and to the entire

friends for their valuable help throughout the work. It was an indeed a learning

experience for me.

Nitendra singh

DATE:

PLACE:



PREFACE:

This project is made mainly with a concern so as to know the practical

knowledge of financial Feasibility Report related to establishment of any

business. This project made me aware of the importance of the preparation of

feasibility report related to the ³RESTURENT´. This report will talk about the

owner capital, Market analysis related to competitors, Estimate of income and

expenditure, Source of income and many more things. This helped me to

understand the company view point related to this feasibility concepts.



TABLE OF CONTENT

TOPIC COVERED PAGE NO.

PROJECT AT A GLANCE

WORKING ASSUMPTION

MARKET ANALYSIS

FINANCIAL ANALYSIS

PROJECT APPRAISAL

RISK ANALYSIS OF PROPOSED PROJECT

CONCLUSION



PROJECT AT AGLANCE:

NAME OF THE PROMOTER : NITENDRA SINGH

ADDRESS : IISE CAMPUS, KALYANPUR, LKO.

CONTACT NO : 9956866981

EMAIL ID : [email protected]

COST OF PROJECT : Rs.699280

MEANS OF FINANCE : Owner¶s capital-349280

Loan- 350000

ARR = 68.77

NPV = 13149.42

PBP = 2YEARS, 2MONTHS

IRR = 41%



y WORKING ASSUMPTIONS:

1. It is assumed that the life of project is five years.

2. It is assumed that the salvage value is equal to its book value.

3. Working capital margin: It is assumed that the w.c.m will be recovered on its

Book value.

4. written down method: It is assumed that the depreciation will be charged as

written down value method throughout the life of project.

5. It is assume that there will be no tax liability.

6. WCM will be maintaining equivalent to next six months operating expenses.

7. The number of working days in a year will be 300.

8. Assumed that the revenue will increase by 15% every year.

9. The price will be based on prevailing market rates.

10. All the revenue expenses will be charged at prevailing market rates.

11. The expenses will increase by 5 -7%.

12. It is assume that the depreciation will be charged at 20% every year.





f) Geography: The location is geographically suitable for hotel and restaurantand the project will not be disturbed by climatic and other geographical

condition.

k) Sensitive area: The location does not have any sensitive area.

l) Power: The power would be sourced from State Electricity Board from near by sub station.

Parking AreaParking is the important issue for any business. I will be providing the parking

area for any kind of vehicle. The customer will not have to worry about their

important assets. There will not be any charge for parking.



y FINANCIAL ANALYSIS

WORKING CAPITAL MARGIN

SL.NO PERTICULERS NUMBERS SALARY TOTAL

1. MANAGER 1 7000 7000

2. HEAD COOK 1 5000 5000

3. COOK HELPER 3 2500 7500

4. SERVICE MAN 4 1500 6000

5. MASALCHI 3 1000 1000

CASH AT BANK: Rs. 2,00,000

STOCK: Rs. 2,53,680

Total working capital margin: Rs.6,12,680



CAPITAL ASSETS:

SL.NO PARTICULERS QUANTITY COST PER PIECES

TOTAL COST

1. RECEPTION 1Table+2Chair 5000 5,000

2. THREE BURNER BHATTI SET

1 9000 9,000

3. TWO BURNER

BHATTI SET

1 6000 6,000

4. TANDOOR 1 2500 2,500

5. TABLES 8 1100 8,800

6. CHAIRS(PLASTIC) 32 250 8,0007. CHARPAI 10 700 7,000

8. CROCKERY 75 200 15,000

9. BHAGAUNA 10 500 5,000

10. COOKINGAPPLIANCES

3 1000 3,000

11. MIXER GRINDER 1 3100 3,100

12. REFRIGERATOR 2 7000 14,000

13. GLASSESS(FOR TEA)

50 4 200

TOTAL 86,600



EXPENSES:

S.NO PARTICULARS QTY COST/QTY

RAW MATERIALS(MONTHLY) KG(UNIT)/LITRES

1 RICE 50 18

2 FLOUR 50 18

3 PULSES 25 60

4 SPICES 10 300

5 SUJII 5 20

6 TEA 5 150

7 MAIDA 30 25

8 SUGAR 35 42

9 GRAM FLOUR 10 45

10 RAJMA 20 40

11 NUTRELA 10 70

12 MUSTARD OIL 30 60

13 REFINED OIL 40 50

14 VANASPATI GHEE 20 40

15 DESI GHEE 10 250

16 POTATO 100 10

17 ONION 50 30

18 EGG 20 75

19 PICKLES 4 40

20 CYLINDER 8 500

21 COAL 75 20

RAW MATERIALS(DAILY)

22 VEGETABLES(SEASONAL) «« ««

23 PANEER 20 150

24 MILK 25 16

25 CHICKEN 40 150

26 MUTTON 15 200

27 FISH 10 80

42280

The monthly expenses = Rs. 42280

So the yearly expenses will be = Rs.42280*12

=Rs. 507360





REVENUE:

Number of customers visit per day (average) is 75.Revenue earned from one customer per day (average) is 30.

So the per day revenue earned (average) is 75*30 = 2250 .

Yearly revenue earned (average) is 2250*300 = 675000.

DEPRECIATION SCHEDULE:

YEAR GROSS VALUE DEPRECIATION

VALUE

BOOK VALUE

1 75900 15180 60720

2 60720 12144 48576

3 48576 9715.2 38860.8

4 38860.8 7772.16 31088.64

5 31088.64 6217.728 24870.912

NOTE: I have charged depreciation on the furniture, Three burner bhatti set,

Two burner bhatti set, Fridge and mixer grinder.



LOAN REPAYMENT SCHUDLE:

LOAN AMOUNT 350000

TIME PERIOD 5

RATE OF INTEREST(P.A) 15%

EMI -8,326.48

PERIOD OB INTEREST EMI PRINCIPAL REPAYMENT CB YRS 12 MONTH

1 350000 4375

-

8,326.48 -3,951.48 3,46,048.52 1 49100

2 3,46,048.52 4326

-

8,326.48 -4,000.87 3,42,047.66

3 3,42,047.66 4276

-

8,326.48 -4,050.88 3,37,996.78 2 40931

4 3,37,996.78 4225

-

8,326.48 -4,101.52 3,33,895.26

5 3,33,895.26 4174

-

8,326.48 -4,152.78 3,29,742.48 3 31449

6 3,29,742.48 4122

-

8,326.48 -4,204.69 3,25,537.78

7 3,25,537.78 4069

-

8,326.48 -4,257.25 3,21,280.53 4 20442

8 3,21,280.53 4016

-

8,326.48 -4,310.47 3,16,970.06

9 3,16,970.06 3962

-

8,326.48 -4,364.35 3,12,605.71 5 7666

10 3,12,605.71 3908

-

8,326.48 -4,418.90 3,08,186.80

11 3,08,186.80 3852

-

8,326.48 -4,474.14 3,03,712.66

12 3,03,712.66 3796

-

8,326.48 -4,530.07 2,99,182.60

13 2,99,182.60 3740

-

8,326.48 -4,586.69 2,94,595.90

14 2,94,595.90 3682

-

8,326.48 -4,644.03 2,89,951.88

15 2,89,951.88 3624

-

8,326.48 -4,702.08 2,85,249.80

16 2,85,249.80 3566

-

8,326.48 -4,760.85 2,80,488.95

17 2,80,488.95 3506

-

8,326.48 -4,820.36 2,75,668.58

18 2,75,668.58 3446

-

8,326.48 -4,880.62 2,70,787.96

19 2,70,787.96 3385

-

8,326.48 -4,941.63 2,65,846.34

20 2,65,846.34 3323

-

8,326.48 -5,003.40 2,60,842.94



21 2,60,842.94 3261

-

8,326.48 -5,065.94 2,55,777.00

22 2,55,777.00 3197

-

8,326.48 -5,129.26 2,50,647.74

23 2,50,647.74 3133

-

8,326.48 -5,193.38 2,45,454.36

24 2,45,454.36 3068

-

8,326.48 -5,258.30 2,40,196.07

25 2,40,196.07 3002

-

8,326.48 -5,324.02 2,34,872.04

26 2,34,872.04 2936

-

8,326.48 -5,390.58 2,29,481.47

27 2,29,481.47 2869

-

8,326.48 -5,457.96 2,24,023.51

28 2,24,023.51 2800

-

8,326.48 -5,526.18 2,18,497.33

29 2,18,497.33 2731

-

8,326.48 -5,595.26 2,12,902.07

30 2,12,902.07 2661

-

8,326.48 -5,665.20 2,07,236.87

31 2,07,236.87 2590

-

8,326.48 -5,736.01 2,01,500.85

32 2,01,500.85 2519

-

8,326.48 -5,807.71 1,95,693.14

33 1,95,693.14 2446

-

8,326.48 -5,880.31 1,89,812.83

34 1,89,812.83 2373

-

8,326.48 -5,953.82 1,83,859.01

35 1,83,859.01 2298

-

8,326.48 -6,028.24 1,77,830.77

36 1,77,830.77 2223

-

8,326.48 -6,103.59 1,71,727.18

37 1,71,727.18 2147

-

8,326.48 -6,179.89 1,65,547.30

38 1,65,547.30 2069

-

8,326.48 -6,257.13 1,59,290.16

39 1,59,290.16 1991

-

8,326.48 -6,335.35 1,52,954.82

40 1,52,954.82 1912

-

8,326.48 -6,414.54 1,46,540.28

41 1,46,540.28 1832

-

8,326.48 -6,494.72 1,40,045.55

42 1,40,045.55 1751

-

8,326.48 -6,575.91 1,33,469.65

43 1,33,469.65 1668

-

8,326.48 -6,658.10 1,26,811.54

44 1,26,811.54 1585

-

8,326.48 -6,741.33 1,20,070.21

45 1,20,070.21 1501

-

8,326.48 -6,825.60 1,13,244.61

46 1,13,244.61 1416

-

8,326.48 -6,910.92 1,06,333.69

47 1,06,333.69 1329

-

8,326.48 -6,997.30 99,336.39

48 99,336.39 1242

-

8,326.48 -7,084.77 92,251.62

49 92,251.62 1153

-

8,326.48 -7,173.33 85,078.29

50 85,078.29 1063

-

8,326.48 -7,263.00 77,815.29



51 77,815.29 973

-

8,326.48 -7,353.78 70,461.51

52 70,461.51 881

-

8,326.48 -7,445.71 63,015.80

53 63,015.80 788

-

8,326.48 -7,538.78 55,477.02

54 55,477.02 693

-

8,326.48 -7,633.01 47,844.01

55 47,844.01 598

-

8,326.48 -7,728.43 40,115.59

56 40,115.59 501

-

8,326.48 -7,825.03 32,290.55

57 32,290.55 404

-

8,326.48 -7,922.84 24,367.71

58 24,367.71 305

-

8,326.48 -8,021.88 16,345.83

59 16,345.83 204

-

8,326.48 -8,122.15 8,223.68

60 8,223.68 103

-

8,326.48 -8,223.68 -0.00





MASTER SHEET

SL.NO PERTICULERS 0 1 2 3 4 5

1 PRELIMANERY AND

PREOPERATING

EXPENSES

2 CAPITAL ASSETS 86600

3 WCM 612680

4 REVENUE 675000 776250 892687.5 1026590.63 1180579.23

5 OPERATING EXP.EXCLUDING DEP.

507360 532728 559364.4 587332.62 616699.25

6 DEPERICIATION 15180 12144 9715.2 7772.16 6217.728

7 OPERATING PROFIT

{4-(5+6)}

152460 231378 343038.3 431485.85 557662.26

9 EBIT(7+8) 152460 231378 343038.3 431485.85 557662.26

10 INTEREST 49100 40931 31449 20442 7666

11 EBT(9-10) 103360 190447 311589.3 411043.85 549996.26

13 PAT(11-12) 103360 190447 311589.3 411043.85 549996.26

14 SOLVAGE VALUE - - - - 24870.912

15 RECOVERY OF WCM - - - - 612680

16 INITIAL

INVESTMENT(1+2+3)

699280 - - - - -

17 OPERATIONALCASH INFLOW{6+10+13(1-T)}

167640 243522 352753.5 439258.01 563879.988

18 TERMINAL CASHINFLOW (14+15)

- - - - 637550.912

19 PROJECTCASHFLOW

(16+17+18)

699280 167640 243522 352753.5 439258.01 1201430.9



y PROJECT APPRAISAL

PROJECT CASH FLOW

AVERAGE RATE OF RETURN (ARR) = ----------------------------------* 100

INITIAL INVESTMENT

= 68.77

NET PRESENT VALUE (NPV) = PVIF(r%, 1year)+PVIF(r%, 2year)+---

- INITIAL INVESTMENT

= 13149.42

INTERNAL RATE OF RETURN (IRR) = 41%

PAY BACK PERIOD (PBP) = 2years, 2 months.



y RISK ANALYSIS OF PROPOSED PROJECT:

This project helped a lot to understand the risk analysis related to thecompetitor. The competitors are there in the way but their concept is not very

much stronger. They generally targeted the track drivers. They provide the

facility which is not very much accepted by the family and young and students.

As I have targeted my target customers this will be providing the good revenue

and profitability. The customer wants high level of satisfaction. I will be

providing the satisfaction level of customer.

The dhabawala¶s do not provide the parking facility for their customers but I

will be providing the parking facility for my customers. The level of satisfaction

can be increased by this.The risk from others competitor are less. I can easily establish my busine ss in

purposed location. In an introduction I will be getting something less revenue

but as the awareness will be created the revenue will increase.

Risk from political issues, social issues, environmental issues are not there

because I have gone through with all the formalities.

All types of risk are analysed and it is said that the purposed project are good

and can be established in desired location. This project is fully free with any

type of risk.



CONCLUSION:

In a conclusion part it can be said that this project is feasible from the financial,marketing and technical point of view. From this project I found that the

business of Restaurant is profitable as well as feasible from all aspect of

business line.

From this purposed project good revenue can be earned and profitability can be

generated. This project is very much profitable in long term.

Feasibility Report Word

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