Prodieta Business Plan

Title: Prodieta Ltd.

Submitted to: Ms. Maura O’Connell, Marketing, NUI, Galway

Dr. Rachel Hilliard, Management, NUI, Galway

Ms. Mary Cosgrove, Accountancy & Finance, NUI, Galway

Course: MG529: Introduction to Business

Submission Date: 20th November 2014

Programme: Postgraduate Diploma in Applied Microbiology

Group Members: Karen Duffy (Student No.10009841)

Kevin O’Dowd (Student No. 09535489)

Francis Higgins (Student No. 09542639)

Chyrl Coen (Student No. 09823549)

Statement of Authenthicity

We have read the University’s code of practice on plagiarism. We hereby certify this

material, which we submit for assessment on the programme of study leading to the award of

Postgraduate Diploma in Applied Microbiology is entirely our own work and has not been

taken from the work of others, except to the extent that such work has been appropriately

cited and acknowledged within the text of our work. Moreover, we recognize that as a group,

we are individually and jointly responsible for the submission of this project.

Name: Karen Duffy

Signature: ____________________________

Date: 20 November 2014

Name: Kevin O’Dowd

Signature: ____________________________


Name: Francis Higgins

Signature: ____________________________


Name: Chyrl Coen

Signature :____________________________


Acknowledgements

We would like to extend a great thanks to our course directors: Dr Cyril Carroll, Dr Ger

Fleming and Michael Coughlan, for their guidance during our undertaking of this project. We

would also like to thank our fellow course mates for their help and support during this

project.

EXECUTIVE SUMMARY

Prodieta Ltd. is a small Irish start-up company that manufactures and sells probiotic yogurt drinks throughout Ireland with the potential to eventually export internationally. Prodieta Ltd. was established by a group of students undertaking a postgraduate course in Applied Microbiology in the National University of Ireland, Galway. The idea behind Prodieta Ltd. came from research recently published in August 2014. It stated that the bacteria present in the human intestines were contributing to cravings for particular types of foods, containing sugars and fats. The research also suggested that these bacterial species present in the human intestines can also be responsible for excess consumption of foods. They produce compounds which are picked up by our nervous system as chemical signals. These chemical signals can cause the brain to desire particular types of foods, such as chocolate and fizzy drinks. Our product produces other compounds (e.g. tyrosine) which increases the feel good hormone dopamine, thus reducing the cravings for food. This product will be sold as a yogurt drink in 100ml biodegradable plastic bottles, in packs of four and eight. The price of our product is €1.80 for a pack of four and €3.50 for a pack of 8. Thus, the consumption of this product on a daily basis has the potential to reduce cravings with an added value of weight loss, as a part of a balanced dietary intake and exercise.

Initially, we aim to target 10% of the Irish population of men and women between the ages of 20-65. This company intends initially to target Irish consumers, but we plan on exporting to the UK and Europe after 3 years. Based on primary research, which included a marketing survey, we found that there is great interest in this product. The uniqueness and many beneficial properties of our product are what appeal to our consumers and what gives us an advantage over our competitors. Prodieta Ltd. will be the only producers of a probiotic drink that reduces cravings. We will face some challenges in our effort to break into the yogurt market. These include; acquiring adequate finances to launch the product, significant advertising costs to reach a national audience and poaching customers already loyal to other brands.

To launch our business we will require a High Potential Start-up (HPSU) grant from Enterprise Ireland of €50,000, and a long-term business loan from Bank of Ireland for €80,000. This will be adequate funding to begin our business venture.

SECTION 1 – CONTACT DETAILS

Promoter Details:

Name 1 & Team Lead: Kevin O’Dowd

Position in the Enterprise: Finance Director

Faculty & Year Postgraduate Diploma in Microbiology 2014-2015

Email: [email protected]

Name 2: Karen Duffy

Position in the Enterprise: Quality Director



Name 3: Francis Higgins

Position in the Enterprise: Production Director

Faculty & Year: Postgraduate Diploma in

Microbiology 2014-2015


Name 4: Chyrl Coen

Position in the Enterprise: Sales and Marketing

Director



SECTION 2- PRODUCT/SERVICE AND MARKETING:

Business Overview:

Prodieta Ltd. is an Irish company that is based in Unit 5 Addley Park, Liosban Industrial Estate, Galway City. It is a small indigenous start-up business which manufactures probiotic yogurt drinks. Prodieta is a probiotic yogurt drink that contains live cultures of microorganisms. It aids in reducing cravings for particular types of foods, such as sugars and fat. It will utilise a cocktail of bacterial cultures that each benefit the consumer individually. Prodieta Ltd. differentiates itself from other probiotic yogurt drinks in the market, such as Actimel and Yakult, through its unique effect. It is novel in its ability to stifle food cravings, which in turns helps with weight loss as well as being beneficial to the immune system. We offer far more benefits to the consumer than our competitors. Prodieta’s key resource is its unique strains of bacteria that reduce cravings and cannot be imitated.

We chose our premises as it has ample space, affordable rent and access to the Headford Road, Tuam Road and Dublin Road. Prodieta Ltd.’s key partner is Pallas Foods who will distribute our refrigerated product to various retailers as part of our distribution business model. Our key suppliers are Alibaba.com who will provide the majority of our production equipment, including our bottles and customized labels. Prodieta’s key activities will involve

mailto:[email protected]



the production and bottling of the probiotic drink, and the marketing of the product to our customer base. We intend to establish relationships with customers through media campaigns including radio advertisements, radio competitions, as well as social media and in local print media. Our most important customers are females. It is likely that they will buy the product for themselves but also for their families.

We aim to establish our customer base by selling our product cheaper than our competitors. . In our first year we will grow a large customer base and establish a strong company that will compete with the leading competitors in the Irish yogurt market. We will sell our product to a larger number of smaller stores locally instead of the larger chain retailers (which may be initially cost prohibitive). Prodieta Ltd. have currently identified a significant niche in the yogurt market, through extensive market research, and have a definitive product concept.

We intend on funding our start-up through a long-term business loan of €80,000 from Bank of Ireland. We will also be applying for a High Potential Start-up (HPSU) grant from Enterprise Ireland of €50,000. Prodieta Ltd. aim to purchase equipment for the manufacture of its yogurt drink using the secured funding in January 2015, and aim to have initial sales revenue by February 2015.

The Market Opportunity:

There has been a stigma surrounding the various ‘miracle diet’ products that have been concocted throughout the years, due to the lack of evidence suggesting their efficacy (Egras et al, 2011). Consumers will always be swayed to try these quick fix weight loss products due to their supposed validity and convenience and the hope for a fast solution to a problem that has plagued many men and women for generations. Our product is based on new research that shows our cravings are heavily influenced by our gut microbiome (Alcock et al. 2014). The gut microbiome can be loosely defined as those bacteria (either good or bad) that are living in our intestine. Obesity is a medical condition in which the body has considerable excess fat (Haslam, D, 2005). It is a major problem globally and leads to many diseases such as heart disease, cancer, liver problems, high cholesterol and Type 2 diabetes to name but a few. Obesity is the result of the continuous consumption of large amounts of food energy, along with the lack of physical activity (Duncan et al, 2008). It is the leading cause of death in the world that can be prevented, with between 120,000 – 365,000 deaths per year as a result (Barness et al, 2006). The rate of obesity in adults and children has been shown to be increasing every year. Our product could be a major development in the battle against the problem of obesity for our generation.

We have three main competitors which are Actimel, Yakult, and Irish yogurts. These are large well established companies that sell products throughout Ireland. They do not however, have a product on the market which has the potential to reduce the cravings for foodstuffs. They focus mainly on boosting the immune system, and aiding digestion. We have envisaged that these competitors will attempt to copy our product and thus out compete us from the market. To this end we have put in place a protocol during the course of our manufacturing process which will make it practically impossible for these competitors to imitate our product.

Market Solution:

Our product is a probiotic yogurt drink that contains a unique cocktail of eight bacterial species. The yogurt contains two strains of the yogurt-making bacteria Lactobacillus brevis; IOEB 9809 and ATCC 367, (Moreno-Arribas and Lonvaud-Funel, 1999) that utilise tyramine (which we introduce to our cultures from banana extract) to produce tyrosine. Tyrosine is an essential amino acid that gets converted to dopamine, which is an appetite suppressor and also a feel good hormone. (Daubner and Wang, 2011). A cocktail of six other strains are added which include L.acidophilus, L.Salivarius, L Plantarum, L Rhamnosus, B Lactis and B Bifidum (Custom Probiotics Inc, 2014). Each of these strains have many properties that are beneficial to the consumer. These include aiding digestion, boosting immune system, preventing food cravings and aiding with weight loss.

The two flavours we will produce will be strawberry and vanilla, as these were the most popular flavour choices on our market research survey. We are going to sell our product in packets of four and eight. We will sell the four pack for a price of €1.80, and we will sell the eight pack for €3.50. In our market survey (Appendix A). We asked people would they pay these prices for our product and the results showed the majority of the people thought our price range was ideal. These prices are cheaper than our competitors (Appendix C).

Future Plans:

We will build on our flagship product and develop a range of new products based on the same scientific research which launched our company. This is essential to grow our brand and allow the possibility of international distribution. Future products might include yogurt pots and frozen yogurts. We will launch new flavours for our yogurt drink, such as raspberry, and peach (as suggested by our market survey).

We aim to expand internationally in the future. There is a niche in the market for our yogurt drink, as no other yogurts have been previously developed to fight food cravings. This, coupled with the size of the market, suggests the potential for exporting beyond Ireland into Europe, USA and more. We may do this ourselves, or possibly through licencing out our product to other international companies and collecting royalties.

Market Research:

We carried out our primary market research through an online customer survey (Appendix AWe also performed SWOT analysis of our three main competitors (Actimel, Yakult and Irish Yogurt) and ourselves. (Competition section & Appendix A)

From our market research, we determined many key elements. The natural health segment includes products such as natural yogurt, organic and probiotic yogurts and yogurt drink. This segment accounts for 25% of the Irish yogurt market. In the diet segment, the consumers of these products look for products that contain low fat, or fat free. These include weight watchers yogurts. This segment accounts for 13% of the market. Yogurts targeted at the children market account for 21% of the overall sales. Yogurt drinks (including Yop) constitute 5% of the market. Yogurt Desserts account for 11% of the market. Full taste

http://www.ncbi.nlm.nih.gov/pubmed?term=Lonvaud-Funel%20A%5BAuthor%5D&cauthor=true&cauthor_uid=10547444

http://www.ncbi.nlm.nih.gov/pubmed?term=Moreno-Arribas%20V%5BAuthor%5D&cauthor=true&cauthor_uid=10547444

yogurts account for 10%, these include Müller Fruit Corners. We will be marketing our product as a natural healthy product, a diet product and also a yogurt drink. Thus, we will be occupying multiple markets (Business 2000, 2012).

Customers:

According to our online survey our main customers are females (Aged 18-29) followed by females (30+). Males (Aged 18-29) are the third highest market. Of 100 people surveyed, 90 were prepared to buy the product. Our customers are predominantly active (exercising 2+ times a week) and many said they have trouble losing weight/ food cravings.

Competitors:

Competitor Strengths Weaknesses

Danone (Actimel)

(probiotic yogurt drink & edible yogurts)

Well-known, global product Strong, highly skilled workforce Loyal customers Reputable products Claims to boost immune system Well-developed brand

Little scientific evidence that the product boosts the immune system.

Yakult

(probiotic yogurt drinks company)

Well-known brand Consumed around the world Aids digestion Large company

Their regular probiotic drink contains very high sugar content (higher than level defined by UK standards agency as high)

May make product less appealing to health conscious individuals/ families

Irish Yogurt

(homegrown yogurt company)

120 employees 50 million tubs per year Well-known Various flavours Now sold in UK Various types including diet options Also sells range of probiotic yogurts

Large market Many competitors

Promotion:

Promotional method How When Cost

Launch date To coincide with the most depressing Blue Monday of the year. Our yogurt, by stimulating the happy hormone, should give a feel-good factor

19th January 2015

0

Radio competition Galway Bay FM provides a package to run a competition every morning of a week coming to an end on the Friday.

Feb Year 1 July Year 2 June Year 3

€500 – package cost 5 1-month supplies ( 4 8-

packs) for winner of each day

€50 euro voucher for raffle draw winner on the Friday

Pallas foods sample merchandising

Pallas Foods offer this merchandising service as part of their fee.

April Year 1 March Year 2 October Year 3

Included in 15% cost-of- sales deal with Palace Foods

Place/channels of distribution:

Distribution Strategy:

Distribution is a huge challenge for small food and drink producers in developing a business. To sustain a competitive business advantage, distribution must be recognised as a key part of an integrated and well managed supply chain encompassing all stages of the process from production right through to the end consumer (Root, 2014). Due to our lack of expertise in this area we decided to work with an experienced distributer who possesses the expertise and knowledge to bring our product to the consumer and perhaps into Europe in future years.

Choosing a distributor:

We chose the distributor that best suited the needs of our product. We signed with Pallas Foods to distribute our product nationwide at a cost of 15%. It was decided to work with this distributor as they have many years’ experience in dealing with dairy products including probiotic drinks, namely Actimel. We can sell more through a distributor than if we attempted to distribute our product on our own (Bord Bia, 2014). Irish supermarkets, such as Tesco Ireland and Dunnes Stores, continue to be the most commonly used methods of distribution of probiotic drinks and account for the dominant share of the sales. It may prove difficult to get our new product into these stores and this is something that will be developed in later years (Bord Bia, 2008).

Pricing:

We will be using a market penetrating pricing strategy. We will set our prices lower than our eventual market price and promote our product widely to attract new customers (Business Hub, 2010). As we are entering a market that is already well-established it is in our best interest to undercut our main competitors in terms of pricing. Although this will decrease our initial short term profits it is required to increase our market share/ sales volume of our product. We will still be able to cover our costs, and eventually make a profit.

Our prices:

As part of our market research survey we asked how customers felt about paying for our

products. These are the prices we decided on based on our consumers’ opinion on them (from

100 survey responses):

1. 4 pack for €1.80

28% - Too expensive 66% - Ideal 6% - Cheap

See Appendix C for competitor pricing.

Marketing Activities:

TASKS DATE: Month/year

Market Analysis and Niche Identification

September 2014

Brand Name Conception October 2014

Market Pricing Strategies and Tactics October 2014

Market Research SurveyDistribution Channel Research

November 2014

Distribution Channel Selection December 2014

Product Launch and Advertisement Campaign (radio, print media, social

media)

January 2015~(Advertisements periodically during business

years)Radio Competitions February 2015

July 2016June 2017

Free Sample Displays April 2015March 2016

October 2017Social Media Interactions Weekly

2. 8 pack for €3.50

24% - Too expensive 69% - Ideal 7% - Cheap

SECTION 3 - INTELLECTUAL PROPERTY

We have not legally protected our product because we produce the yogurt in a certain way that prevents our competitors identifying our two primary bacterial strains. These two bacterial strains are added into the yogurt along with banana extract, which produces tyrosine. The yogurt is then heated to specified temperatures to eliminate these bacterial strains. The cocktail of six bacterial species is added to the yogurt at this point. Our competitors will not be able to culture our two primary strains, but will be able to detect the presence of tyrosine, and culture our six additional strains. This will protect our product without the need for immediate patenting. We will be copywriting our brand name and trademarking our logo.

SECTION 4 – PEOPLE

Initially we will have some employable positions available. On top of our four team members we will have 6 additional staff members. We will also be using an external distributor for deliveries for at least our first year in business. However as our business grows and opportunities for expansion present themselves we will be looking to upscale our production and thus, new job opportunities will become available to meet the increased demand in labour. Further down the line, we hope to begin distributing to countries other than Ireland. As well as a change in location/factory size this will also see a considerable increase in the number of employees we will require such as production workers, cleaners, stock and loading workers, personal delivery people, security etc.

SECTION 5 – FINANCE

The financial plan contains the projected accounts for Prodieta Ltd. for a three year period which includes the Trial Balances, Purchases, Depreciation, Sales projections, workings for accounts and the break-even analysis for each year.

Initial/start-up schedule of costs

Capital items owned

Amount €

Premises

Raw Materials

Equipment/tools

Fixtures & fittings

Office equipment

Training

Security & safety

Consulting fees

Legal fees

15,324.72

176,142.40

24212.05

4320.00

1230.00

1380.00

3000.00

13440.00

14026.32

Total 253.075.49

Financing Plan:

Long term loan: € 80,000 loan, repayed at 5% interest over 5 years (€ 1509.70 per month)

Grants: € 50,000 HPSU grant from Enterprise Ireland

See Appendix G for Cash Budgets for Year 1,2 and 3.

Projected Statements of Profit or Loss for the years ended 31 December 2015

2015 2016 2017€ € €

Sales585,750.0

0 1,278,000.00 1,917,000.00

Cost of Sales W1481,675.4

4 W1 847,992.22W1 1,021,873.91

Gross Profit104,074.5

6 430,007.78 895,126.09Other IncomeGrant 50,000.00 0.00 0.00Expenses

Administration Expenses W2 49,596.02 47,241.16W2 49,318.03

Selling and Distribution expenses W3 91,062.50 195,060.00W3 291,078.00

Finance Expense 14,444.42Net Profit/Loss -1,028.38 187,706.62 554,730.06

Projected Statements of Financial Position at 31 December 2015

Non-Current AssetsProperty, plant & Equipment 28,989.39 26,918.73 25,000.00Furniture & Fittings 3,528.00 2,664.00 1,800.00Total Non-Current Assets 32,517.39 29,582.73 26,800.00

Current AssetsInventory 17,261.95 34,078.75 50,895.55Cash & Bank 13,132.68 182,764.70 710,271.19Total Current Assets 30,394.63 216,843.45 761,166.74

Total Assets 62,912.02 246,426.18 761,166.74

EquityRetained Profits 187,706.62 554,730.06Total Equity 187,706.62 554,730.06

Non-current LiabilitiesLong term loans/debts 61,883.64 43,767.20 25,650.86Current LiabilitiesBank overdraft 1,028.38 0.00 0.00

Total Current Liabilities 1,028.38 0.00 0.00

Total Equity & Liabilities 62,912.02 246,426.18 761,166.74

Bibliography

Alcock, A., Maley, C.C., and Aktipis, A. (2014) ‘Is eating behaviour manipulated by the

gastrointestinal microbiota? Evolutionary pressures and potential mechanisms vol 36, pp 940-

949

Daubner, S.C. and Wang, S. (2011) Tyrosine hydroxylase and regulation of dopamine

synthesis; 505, 1-12

Egras, A.M., Hamilton, W.R., Lenz, T.L., and Monaghan, M.S. (2011) An Evidence-Based

Review of Fat Modifying Supplemental Weight Loss Products

Haslam, D, (2005) ‘Obesity’ The Lancet, 366, 1197-1207

Duncan, S., Lobley, G., Holtrop, G., Ince, J., Johnstone, A., Louis, P., Flint, H. (2008),

International Journal of Obesity, 32, p 1720-1724

Barness LA, Opitz JM and Gilbert-Barness E (December 2007). "Obesity: genetic, molecular,

and environmental aspects". American Journal of Medical Genetics 143A (24): 3016–34

Custom Probiotics Inc. (2014). Six Strain Probiotic Powder. Available at:

http://www.customprobiotics.com/custom-probiotics-six-cultures.htm [Accessed 20 October

2014]

Business 2000 (2012). ‘Growing and creating a new market’ Available at:

http://www.business2000.ie/pdf/pdf_6/danone_6th_ed.pdf

Bord Bia (2008) ‘Guide to Distribution for Food and Drink Producers in Ireland’. Available

at: http://www.bordbia.ie/industry/manufacturers/GrowingYourBusiness/DistributorSearch/

Documents/BordBia-DistributionGuide.pdf [Accessed 15 November 2014]

Bord Bia (2014) ‘Guide to Retail for Small Food Producers’. Available at:

http://www.bordbiavantage.ie/foodcommunity/Documents/BB-Retail-Guide-2014.pdf

[Accessed 15 November 2014]

Moreno-Arribas, V., Lonvaud-Funel, A. (1999) Tyrosine decarboxylase activity of

Lactobacillus brevis IOEB 9809 isolated from wine and L. brevis ATCC 367 FEMS

Microbiol Lett. 1999 Nov 1;180 (1):55-60.

http://www.ncbi.nlm.nih.gov/pubmed/10547444

http://www.ncbi.nlm.nih.gov/pubmed/10547444

http://www.ncbi.nlm.nih.gov/pubmed?term=Lonvaud-Funel%20A%5BAuthor%5D&cauthor=true&cauthor_uid=10547444

http://www.ncbi.nlm.nih.gov/pubmed?term=Moreno-Arribas%20V%5BAuthor%5D&cauthor=true&cauthor_uid=10547444

http://www.bordbiavantage.ie/foodcommunity/Documents/BB-Retail-Guide-2014.pdf

http://www.bordbia.ie/industry/manufacturers/GrowingYourBusiness/DistributorSearch/Documents/BordBia-DistributionGuide.pdf

http://www.bordbia.ie/industry/manufacturers/GrowingYourBusiness/DistributorSearch/Documents/BordBia-DistributionGuide.pdf

https://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCUQFjAB&url=http%3A%2F%2Fwww.business2000.ie%2Fpdf%2Fpdf_6%2Fdanone_6th_ed.pdf&ei=z-ttVJyIF4OiNpHxgpgE&usg=AFQjCNEr2eVFJ6r_89889i5fLFhF_5XlVw&sig2=NTzKIwEFqVCb2m2twECQ4w

http://www.customprobiotics.com/custom-probiotics-six-cultures.htm

Business Hub (2010) Market Penetration. Available at:

http://www.businessihub.com/penetration-pricing/ [Accessed 9 November 2014]

Chron (2014) ‘Keys to a Successful Distribution Business’ by Root, G. Available at:

http://smallbusiness.chron.com/keys-successful-distribution-business-21520.html

http://smallbusiness.chron.com/keys-successful-distribution-business-21520.html

Appendices: Appendix A – Market Research Survey

Appendix B: Unit 5 Addley Park, Liosban Industrial Estate, Galway City

Appendix C:

Competitors’ prices (as per Tesco website):

Actimel

Original 4 x 100g - €1.99 Original 8 x 100g - €3.89 Original 12 x 100g - €4.99

(Alternate flavours/ fat free options same prices)

Appendix D:

% trends in irish yogurt market

natural health segment diet segment childrens yogurt products yogurt drinksdesserts full taste fruit yogurts

Appendix E: SWOT Analysis for Prodieta

Strengths Weaknesses

Prodieta

Large market Unique product Reduces cravings Helps reduce obesity Novel product based on

new research – first of its kind

Hard to break into an established market

Better known products already exist

Must gain trust of customers as product is new

Opportunities Threats

Prodieta

Potential to expand out of Irish market into Europe and beyond

2 flavours initially but possible to develop new flavours and variations of the product

Expansion of company, job creation

3 main competitors; Danone, Yakult & Irish Yogurt

No patent on idea; idea could be copied in the future

Yakult

Fermented/ Light 7 x 65ml - €3.65

Appendix F:

Trial Balance from the books of Prodieta Ltd as at 31 December 2015

Sales 585,750.00Grant 50,000.00Capital 80,000.00Equipment Purchases 28,989.39Purchases of raw materials 176,142.40Insurance - Buildings 419.62Advertising 3,200.00Stationary 2,386.32Rent and Rates 15,324.72Salaries 300,000.00Training 1,380.00Electricity 2,115.72Office Telephones 3,034.98Mobile Phones 3,804.00Loan Repayments 18,116.38Interest on repayments 3,671.96Furniture and Fittings 3,528.00Office Equipment 1,230.00Security and safety 3,000.00Consulting fees 13,440.00Legal Fees 14,026.32Internet 414.72Postage 180.00Distribution 87,862.50Audit Fees 1,500.00Waste & Disposal 3,600.00Depreciation Equipment 2,070.66Depreciation Fittings 792.00Bank Balance 25520.31Total: 715,750.00 715,750.00


Sales 1,278,000.00Purchases (Equipment) 1,174.37Purchases (Raw Materials) 347,742.40Insurance 440.59Advertising 3,360.00Stationery 2,505.60Rent & Rates 15,324.72Wages/Salary 492,000.00Training 1,380.00Electricity 2,221.50Office Telephone 3,186.73Office Mobile 3,804.00Loan Repayment 18,116.38Interest on Repayment 2,932.96Consulting Fees 14,112.00Legal Fees 14,727.64Internet 414.72Postage 180.00Distribution 191,700.00Audit Fees 1,500.00Waste & Disposal 3,780.00Bank Balance 157,396.39Total 1,278,000.00 1,278,000.00


Sales 1,917,000.00Equipment Purchases 1,174.37Purchases of raw materials 519,342.40Insurance - Buildings 462.61Advertising 3,528.00Stationary 2,630.88Rent and Rates 15,324.72Salaries 492,000.00Training 1,380.00Electricity 2,332.58Office Telephones 3,346.08Mobile Phones 3,804.00Loan Repayments 18,116.38Interest on repayment 2,156.15Consulting fees 14,817.60Legal Fees 15,464.02Internet 414.72Postage 180.00Distribution 287,550.00Audit Fees 1,500.00Waste & Disposal 3,969.00Bank Balance 527,506.49Total: 1,917,000.00 1,917,000.00

Appendix GCash Budget Year 1

Receipts Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Income 0.00 43250.00 63250.00 53250.00 53250.00 73500.00 63250.00 63250.00 63250.00 33000.00 53250.00 23250.00 585750.00

Grant 50000.00 50000.00

Capital 80000.00 80000.00

Total Receipts 80000.00 43250.00 113250.00 53250.00 53250.00 73500.00 63250.00 63250.00 63250.00 33000.00 53250.00 23250.00 715750.00

Expenditure

Purchases (Equipment) 24212.05 24212.05

Purchases (Raw Materials) 88071.20 88071.20 176142.40

Insurance - Buildings 419.61 419.61

Advertising 800.00 300.00 300.00 162.50 162.50 500.00 162.50 162.50 162.50 162.50 162.50 162.50 3200.00

Stationery 198.86 198.86 198.86 198.86 198.86 198.86 198.86 198.86 198.86 198.86 198.86 198.86 2386.32

Rent & Rates 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 1000.00 15324.72

Wages/Salaries 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 25000.00 300000.00

Training 460.00 460.00 460.00 1380.00

Electricity 352.62 352.62 352.62 352.62 352.62 352.62 2115.72

Office Telephone 505.83 505.83 505.83 505.83 505.83 505.83 3034.98

Mobile Phones 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 3804.00

Loan Repayments 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 18116.38

Interest on Repayments 333.33 328.43 323.51 318.57 313.60 308.62 303.62 298.59 293.54 288.48 283.39 278.28 3671.96

Furniture & Fittings 4320.00 4320.00

Office Equipment 1230.00 1230.00

Security & Safety 3000.00 3000.00

Consulting Fees 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 1120.00 13440.00

Legal Fees 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 1168.86 14026.32

Internet 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 414.72

Postage 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 180.00

Distribution Costs 0.00 6487.50 9487.50 7987.50 7987.50 11025.00 9487.50 9487.50 9487.50 4950.00 7987.50 3487.50 87862.50

Shipping Freight In 7000.00 7000.00

Audit Fees 1500.00 1500.00

Waste & Disposal 1200.00 1200.00 1200.00 3600.00

Total Expenditure 154286.39 45924.50 40980.82 40385.17 39793.41 130621.42 42485.78 42325.19 40813.35 36117.58 39303.20 37344.88 690381.69

Net Income -74286.39 -2674.50 72269.18 12864.83 13456.59 -57121.42 20764.22 20924.81 22436.65 -3117.58 13946.80 -14094.88 25368.31

Cash Budget Year 2


Income 116500.00 106500.00 106500.00 76500.00 76500.00 166500.00 126500.00 116500.00 106500.00 116000.00 97000.00 66500.00 1278000.00

Grant 0.00

Capital 0.00

Total Receipts 116500.00 106500.00 106500.00 76500.00 76500.00 166500.00 126500.00 116500.00 106500.00 116000.00 97000.00 66500.00 1278000.00

Expenditure




Advertising 840.00 315.00 315.00 170.63 170.63 525.00 170.63 170.63 170.63 170.63 170.63 170.63 3360.00

Stationery 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 208.80 2505.60

Rent & Rates 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 1000.00 15324.72

Wages/Salaries 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 492000.00

Training 460.00 460.00 460.00 1380.00

Electricity 370.25 370.25 370.25 370.25 370.25 370.25 2221.51


Mobile Phones 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 3804.00

Loan Repayments 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 18116.38


Consulting Fees 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 1176.00 14112.00

Legal Fees 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 1227.30 14727.64

Internet 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 414.72

Postage 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 180.00


Audit Fees 1500.00 1500.00

Waste & Disposal 1260.00 1260.00 1260.00 3780.00


Net Income -124153.20 40520.44 42927.70 16478.14 17122.48 -79976.98 58430.62 50039.13 43103.57 51344.77 35039.24 6520.48 157396.39

Balance B/F 25368.31

Cash Flow 157396.39

Balance C/F 182764.70

Cash Budget Year 3


Income 169750.00 159750.00 159750.00 129750.00 129750.00 219750.00 179750.00 169750.00 159750.00 169750.00 150000.00 119500.00 1917000.00

Grant 0.00

Capital 0.00

Total Receipts 169750.00 159750.00 159750.00 129750.00 129750.00 219750.00 179750.00 169750.00 159750.00 169750.00 150000.00 119500.00 1917000.00

Expenditure




Advertising 882.00 330.75 330.75 179.16 179.16 551.25 179.16 179.16 179.16 179.16 179.16 179.16 3528.00

Stationery 219.24 219.24 219.24 219.24 219.24 219.24 219.24 219.24 219.24 219.24 219.24 219.24 2630.88

Rent & Rates 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 2662.36 1000.00 1000.00 1000.00 1000.00 1000.00 15324.72

Wages/Salaries 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 41000.00 492000.00

Training 460.00 460.00 460.00 1380.00

Electricity 388.76 388.76 388.76 388.76 388.76 388.76 2332.58


Mobile Phones 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 317.00 3804.00

Loan Repayments 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 1509.70 18116.38


Consulting Fees 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 1234.80 14817.60

Legal Fees 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 1288.67 15464.02

Internet 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 34.56 414.72

Postage 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 180.00


Audit Fees 1500.00 1500.00

Waste & Disposal 1323.00 1323.00 1323.00 3969.00


Net Income -164826.60 85659.58 88081.07 61584.05 62283.61 -120625.26 103592.29 95146.12 88265.78 96940.29 79989.50 51416.06 527506.49

Balance B/F 182764.70

Cash Flow 527506.49

Balance C/F 710271.19

Purchases for Prodieta

Ltd.

Purchases Year 1

PurchaseAmount Required

Price (€) Total Cost (€)

Equipment

Lab coats 6 19.00 114.00

Analytical Balance 1 781.37 781.37

Shake Flask 4 5.00 20.00

Shaking Incubator 1 4,000.00 4,000.00

Carboy (20L) 1 141.00 141.00

Fan Heater 1 18.00 18.00

Thermostat 1 100.00 100.00

500L Yogurt Fermentation Tank 3 1,598.43 4,795.29

Commercial Steam Generator 1 589.88 589.88

1500 x 1500 Cold Room 1 3,760.00 3,760.00

Filler, Capper & Labeller System 1 9,892.51 9,892.51

Total Equipment 24,212.05

Raw Material

Starter Cultures 2 150.00 300.00

25kg Skimmed Milk Powder 52 75.00 3,900.00

Banana Extract (1L) 1 24.00 24.00Assorted Fruit Juice Flavours (1L Conc.) 5 32.20 161.00

Zero Calorie Steetener (1kg) 2 40.20 80.40

Rhamnose Sugar 2 38.50 77.00

20,000 Labels 78 1,000.00 78,000.00

20,000 Plastic Bottles 78 1,200.00 93,600.00

Total Raw Material 176,142.40

Appendix H

Grand Total Purchases 200,354.45


Ltd.

Purchases Year 2



Equipment

Lab coats 6 19.00 114.00



Carboy (20L) 1 141.00 141.00

Fan Heater 1 18.00 18.00

Thermostat 1 100.00 100.00


Raw Material






20,000 Labels 156 1,000.00 156,000.00

20,000 Plastic Bottles 156 1,200.00 187,200.00Total Raw Material 347,742.40



Ltd.

Purchases Year 3



Equipment

Lab coats 6 19.00 114.00



Carboy (20L) 1 141.00 141.00

Fan Heater 1 18.00 18.00

Thermostat 1 100.00 100.00


Raw Material






20,000 Labels 234 1,000.00 234,000.00

20,000 Plastic Bottles 234 1,200.00 280,800.00Total Raw Material 519,342.40


Appendix I

Depreciation of Laboratory Equipment

Depreciation using straight line method over 15 years

Cost (€) Annual Depreciation (€)

Analytical balance 781.37 52.09

Shaking Incubator 4,000.00 266.66

Carboy (20L) 141.00 9.40

Thermostat 100.00 6.66

3 x 500L Yogurt Fermentation Tanks 4,795.29 319.69

Commercial Steam Generator 589.88 39.33

1500 x 1500 Cold Room 3,760.00 250.67

Filler, Capper & Labeller System 9,892.51 659.50

Shipping Freight In 7,000.00 466.66

Totals 31,060.05 2,070.66

NBV of Laboratory Equipment at end of Year 1 = (31,060.05 - 2,070.66) = €28,989.39



Depreciation of Furniture & Fittings

Depreciation using straight line method over 5 years

Cost (€) Annual Depreciation (€)

Furniture & Fittings 4320.00 864.00

Depreciation will be over 11 months in Year 1

Depreciation on Furniture & Fittings = 864 X 11

12 = 792.00

Depreciation Year 1 = 792.00



NBV of Furniture & fittings at end of Year 1 = 3528.00



Appendix J:

Workings for Accounts

Insurance – Building

Insurance for Year 1 is quoted at €419.61 the budget for this will be increased by 5% for each subsequent year.

Year 1 = €419.61

Year 2 = 419.61 + 5% = €440.59

Year 3 = 440.59 + 5% = €462.61

Advertising

The total advertising budget in Year 1 was €3,200.00 and will be increased by 5% for each successive year.

Year 1 = €3200.00

Year 2 = 3200.00 + 5% = €3360.00

Year 3 = 3360.00 + 5% = €3528.00

Stationery

The budget for stationery each month in Year 1 was €198.86 and will be subjected to a 5% annual rise in Year 2 and Year 3.

Year 1 = €198.86 per month

Year 2 = 198.86 + 5% = €208.80 per month

Year 3 = 208.80 + 5% = € 219.24 per month

Salaries

Salaries were to be paid at a rate of €300,000.00 annually in Year 1 and this was to be increased in Year 2 and Year 3 to €492,000.00

Salaries for Year 1 = €25,000.00 per month (10 Employees).

Salaries for Year 2 & 3 = €41,000.00 per month (16 Employees).

Electricity

Electricity was estimated at €352.62 on a bi-monthly basis, this is to be increased in Year 2 by 5% and in Year 3 by a further 5%.

Year 1 bi-monthly estimate = €352.62

Year 2 bi-monthly estimate = 352.62 + 5% = €370.25


Office Telephone

The office telephone bill was estimated at a bi-monthly cost of €505.83 in Year 1, this cost is to be increased by 5% in Year 2 and again in Year 3 by 5%.

Year 1 bi-monthly estimate = €505.83



Appendix K:

Year 1 – Break-Even Analysis

Fixed CostsInsurance - Buildings 419.61Advertising 3200.00Stationery 2386.32Rent & Rates 15324.72Wages/Salaries 300000.0

0Training 1380.00Office Telephone 3034.98Mobile Phones 3804.00Security & Safety 3000.00Internet 414.72Shipping Freight In 7000.00Audit Fees 1500.00Depreciation – Furniture & Fittings

792.00Depreciation – Equipment

2070.66344327.0

1

Variable Costs

Purchases 200354.50

Cost per unit 0.13

Sales price per unit

0.45

Total units Year 1 1,560,000

Cost per unit = Purchases ÷ Total units Year 1

Contribution = selling price less variable cost = 0.45-0.13 = 0.32

Break-Even point = Fixed costs ÷ Contribution per unit

Break-Even Point = 344327.01 ÷ 0.32 = 1,076,021.91 units



0Training 1380.00Office Telephone 3186.73Mobile Phones 3804.00Internet 414.72Audit Fees 1500.00Depreciation – Furniture & Fittings 864.00Depreciation – Equipment 2070.66

526851.02

Variable Costs

Purchases 348916.77

Cost per unit 0.11


0.45








0Training 1380.00Office Telephone 3346.08Mobile Phones 3804.00Internet 414.72Audit Fees 1500.00Depreciation – Furniture & Fittings 864.00Depreciation – Equipment 2070.66

527325.67

Variable Costs

Purchases 520516.77Cost per unit 0.11


0.45






Appendix L:

Sales Projections Prodieta Ltd.

Year 1:

Prodieta Ltd. aim to produce 30,000 units per week in Year 1.

15,000 units will be packaged and sold as a 4 pack = 3750 @ 0.45c per unit.

15,000 units will be packaged and sold as an 8 pack = 1875 @ 0.44c per unit.

A 4 pack will retail at €1.80 generating sales of €6750 per week (3750 x €1.80).

An 8 Pack will retail at €3.50 generating sales of €6562.50 per week (1875 x €3.50).

€6750 + €6562.50 = €13,312.50 estimated sales per week.

€13,312.50 x 4 weeks = €53,250 per month.

€53,250 x 12 months = €639,000 a year.

However, Prodieta will only producing for 11 months in Year 1

Therefore, €53,250 x 11 months = €585,750 Total Sales Estimate in Year 1.

Year 2:


30,000 units will be packaged and sold as a 4 pack = 7500 @ 0.45c per unit.


A 4 pack will retail at €1.80 generating sales of €13,500 per week (7500 x €1.80).

An 8 Pack will retail at €3.50 generating sales of €13,125 per week (3750 x €3.50).

€6750 + €6562.50 = €13,312.50 estimated sales per week.

€26,625 x 4 weeks = €106,500 per month.

€106,500 x 12 months = €1,278,000 Total Sales Estimate in Year 2.

Year 3:


45,000 units will be packaged and sold as a 4 pack = 11,250 @ 0.45c per unit.


A 4 pack will retail at €1.80 generating sales of €20,250 per week (11,250 x €1.80).

An 8 Pack will retail at €3.50 generating sales of €19,687.50 per week (5625 x €3.50).

€20,250 + €19,687.50 = €39937.50 estimated sales per week.

€39937.50 x 4 weeks = €159,750 per month.

€159,750 x 12 months = €1,917,000 Total Sales Estimate in Year 3.

Appendix M: Workings for Financial Statements

Prodieta Business Plan

Documents

galway course

postgraduate course

karen duffy student

francis higgins student

kevin odowd student

chyrl coen student

karen duffy signature

francis higgins signature