BUSINESS PLAN ON

PREPARED BY :- Baldha Vishal k.CLASS :- MBA 3RD SEMYEAR :- 2010 – 2011ROLL NO. :- 06.

C O L L E G E -

N R VEKARIYA INSTITUTE OF BUSINESS MANGEMENT STUDIEIS JUNAGADH

S U B M I T T E D T O -

DR. RAJESH PATEL

Page 1 of 39

DECLARATION

I, the undersigned “BALDHA VISHAL K.” the student of MBA

3RD SEM. hear by declare the business plan presented in this report is

my own work.

To the best of my knowledge, this work has not been

previously submitted to any other university for any examination.

Date:- Signature

Place: - junagadh (Baldha Vishal k)

Page 2 of 39

ACKNOWLEDGMENT

It is really a matter of gratification for me to prepare a

business plan. At this stage project report is an essential part of learning

and entrepreneur prepares it before he starts his actual firm, project

report is very helpful developing entrepreneurial skill. It makes the

entrepreneur aware about the aspects, which are to be considered, and

giving important when starting a new firm. It considers all aspects from

registration of the firm to the forecasting of future profit and allocation

of resources.

And also I heartily thanks towards to my Director Dr Rajesh

Patel, my project guide, and my almightily my god, parents and my

classmate for providing me the moral support to complete the project

work successfully.

Date:- Signature

Place: - junagadh (Baldha Vishal)

Page 3 of 39

PREFACE

As a part of MBA., syllabus we have to prepare a business

plan of any product, which is under small-scale industry. The aim of

preparing such a Report is to make aware each and every aspect, which

has to be considering while commencing a firm. This work of making

report provide us the guideline that, what are the essential featured to be

considered while studying a small business and it is also useful for the

students who want small unit after completion of MBA and it is also

urgent need for substituting the rational management techniques by

specific system of management.

I have selected Wafer Biscuit because I think there is a good

market for Wafer Biscuit and there are also future prospects of

exploiting the market.

Signature

(Baldha Vishal K)

Page 4 of 39

INDEX

SR. PARTICULARS PG.NO.

1 Project at Glance 5

2 Justification Of Location 10

3 Manufacturing Process 15

4 Financial Detail 17

Page 5 of 39

PROJECT AT GLANCE

Name of the unit :- GOPAL wafer biscuit

Address : - 2, Metoda G.I.D.C., Phase no. 11 Gate no: - 3, Metoda. Dist. Rajkot Ph.- (02827) 257222/23. Fax (02827) 257326. E-mail- GOPAL@yahoo.com

Type of the unit :- Partnership firm register under Partnership act. 1932

Partners :- 1) Baldha Vishal 2) Rohit Savaliya

SSI Registration no. :- Application has been made

Subsidy Registration No. :- Application has been made

Type of industry :- Food industry

Production :- 400 Tones

Fixed capital :- 31,71,000

Total capital :- 54,58,440

Working capital :- 19,87,440

Return on capital :- 34.17%

Break-even point :- 49.18%

Page 6 of 39

PARTNER’S BACKGROUND

PARTNER - 1

Name :- Baldha Vishal K

Age :- 24 years

Address :- “Shree Hari”

5-Punchvati Soc. ,

Kalawad Road,

Rajkot 360 005

Qualification :- MBA (Fresher)

Specialization :- Finance

Financial contribution :- 50 %

Page 7 of 39

PARTNER - 2

Name :- Savaliya Rohit C

Age :- 24 Years.

Address :- “Sagar”

2-Geetanjali Park,

Rajkot-360002.

Qualification :- MBA (Fresher)

Specialization :- Finance

Financial contribution :- 50 %

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Organisation structure

Page 9 of 39

proprietorproprietor

ProductionDepartmentProductionDepartment

MarketingDepartmentMarketing

Department

Material managerMaterial manager

Inspector and workers

Inspector and workers

AgentsAgents SalesmenSalesmen

PRODUCT & its USES

Wafer Biscuits are made from wheat flour and some other ingredients are

added depending upon the variety to be produced. They are of many sizes,

varieties and flavors. Wafer biscuits would have two wafers - like layers and

cream will be stuffed between these two layers to form a sandwich-like biscuit.

This is a versatile product with good market prospects.

Today the production of wafer biscuit in the country is estimated 15 lakh

tones of which organization sector accounts for 1.75 lakh tones and the balance of

small scale has played a dominant role in meeting the increasing demand as the

manufacturing of wafer biscuit is reserved for the small sector.

Wafer biscuit are used as snack breakfast and it continues considerable

share in ice cream cones and also many other ways. The wafer biscuit are

produced in large amount.

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MARKET POTENTIAL

The consumption rate of wafer biscuits is increasing considerably and also

the popularity of the snake food is growing day by day wafer biscuits have

emerged as potential snack food. It also has become part of breakfast and ice

cream. There is no. of organization as well as unorganized groups are already there

is in market catering to the need of the house, railway and canteen cinema, airport

etc. and the many other places still there is huge amount of the demand for this

product. In interior and remote placed in different parts of country.

The data and its analysis revels that wafer biscuit have good market and

there are further possibilities of expanding and exploiting market.

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JUSTIFICATION OF LOCATION

Location is the prime factor to be considering for starting a new business.

The location should be decided by considering all factors and making independent

analysis of each variable separately through cost benefits. It is also said that

looking to the product and its use the district headquarters will be ideal for the

location of this project.

Rajkot is proper in all this aspect. The actual place of the location is quite

suitable and appropriate in all respect for our product. Following are the reason for

selecting the location.

Market :-

From marketing point of view, we have best and encouraging market

for our product. Market for wafer biscuits is increasing day by day

and it is also used by different people different time and different

places and it is also available for very reasonable cost.

Labor:-

Labor is prime important foe any business. In Rajkot, there is no

problem about labor because as skilled and unskilled labor is easily

available and also available at cheaper rate.

Transportation :-

Transportation is also necessary for any business. As we know Rajkot

is big city so transportation facilities available easily. We have the

hired some vehicles for delivery of biscuits.

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Raw material :-

There is no problem of raw material for wafer biscuits. The main raw

material for wafer biscuits are maida and sugar, which is easily

available for all places.

Availability of infrastructure Facilities :-

All I facilities like water, electricity, telephone, telegraph, postage etc

are easily available is for this location.

Other facilities :-

Large number of facilities can be easily available here such as

subsidy, loans at cheaper rates and many more facilities this

developing area.

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Pricing PolicyPrice is an important factor affecting the success of a firm. Pricing decision and

policy have direct influence on sales volume and profit of the business. Price

fundamental to all marketing efforts, pricing is the process or service in monetary

terms.

Pricing is an important decision that every company has to high price or low price

may create a bad reputation of the company. The price of a product is a crucial

decision.

My pricing policy will be cost + profit. Whatever expenses have incurred during

the manufacturing of the product is considered plus profit is too included,

competitors’ price will also be considered.

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Channel Of Distribution

The channel of distribution plays an important role in market activity in the

movement of flow of funds.

Channel of Distribution

The firm can use one level distribution channel

Producer

Agent

Consumer

OR

The firm may use zero level distribution channel.

Producer

Consumer

MARKETING STRATEGY

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Thus, the market is very vast and scattered. Yet another

positive aspect is increasing rural and semi-urban markets. Some of the

national brands are very well established but there are hundreds of local

or regional brands catering to the vast market and a new entrant would

have to ace this local competition. Good quality and competitive price

coupled with well-organized marketing network shall be the critical

aspects.

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Quality Commitment

Quality is the central theme of our business model. It binds

together all our activities with the final goal of providing our consumers

the benefit they expect from our brands at most affordable prices. We

establish exacting standards to define acceptability of material inputs

and end products. These standards are strictly met via exclusive dealings

with vendors and service providers with proven capabilities to meet our

stringent expectations.

These are managed by highly proficient, motivated and

empowered quality vigilance teams who ensure that stipulated quality

goals are routinely met.

Quality programmers at our principal manufacturing locations

conform to the ISO 9000 code. These have been evaluated and validated

by independent accreditation agencies. As a conscious step to further

refine our quality capabilities and enhance results, we have adopted

detailed TQM practices.

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MANUFACTURING PROCESS

It is conventional and simple. Various ingredients like wheat flour, starch,

sugar, salt, soda, vanaspati, preservatives, flavors and colors etc. can be procured

from sources. Initially, wheat flour, starch, salt, soda etc. are mixed with water in a

mixer and paste is formed. This paste is poured into pre-heated moulds and wafer-

like sheets are baked. Simultaneously cream is prepared in the planetary mixer by

mixing sugar, vanaspati, essence, colors and flavors and this cream is spread on

baked sheets to make sandwiches. Finally, they are cut into required size and

packed. The process flow chart is as follows:

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Mixing of Ingredients

Formation of Paste

Baking

Cooler

Preparation & spreading of cream

Cutting

Packing

TENTATIVE IMPLEMENTATION SCHEDULE

ActivityPeriod (in months)

Application and sanction of loan 2

Site selection and commencement of civil work 1

Completion of civil work and placement of orders for machinery

3

Erection, installation and trial runs 1

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MACHINERIES & EQUIPMENTS

SR. NAME OF MACHINERY QTY. RATE COST

1 Flour suffer 3 10,000 30,000

2Planetary type mixer(Cap. 100Kg. / Hr.)

3 12,00036,000

3Automatic Biscuit cutting &Punching Machine Fitting with Totally molder

2 60,000 1,20,000

4 Electronic Banking oven conveyer 2 45,000 90,000

5 Machine for sweet cream biscuit 1 19,500 19,500

6 Cooking conveyer 1 45,000 45,000

7 Oil spray 1 20,000 20,000

8Try trolleys and other accessories etc.

2 8,00016,000

9 Packing machine 1 23,500 23,500

Total 4,00,000

Add electrocution,Installment etc. 25,000

Total 4,25,000

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PRELIMINARY AND PRE-OPERATIVE EXPENSES

SR.Particulars

COST

1 Lab. Equipment 50,000

2 Electrification and installment 78,500

3 Cost of tools / Fixtures 30,500

4 Cost of office equipments 12,000

5 Legal expenses 10,000

Total 1,81,000

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FIXED CAPITAL STATEMENT

SR.Particulars

COST

1 Land & Building 25,00,000

2Machinery & Equipments

4,25,000

3Preliminary Expenses

1,81,000

4Computer with printer

65,000

Total31,71,000

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REQUIRED OF RAW MATERIAL (Per Month)

SR. Particulars

Qty. (In Rs.)

Rate(Kg.)

Total

1 Maida Flour 12,000 18 2,16,000

2 Sugar 3,000 15 45,000

3 Vegetable flat 4,000 14 56,000

4 Misc. item 4,000 25 1,00,000

- Milk powder

- Salt

- Yeast

- Edible color

- Flavor

- Golden system

- Chemicals

5 Packing material 40,000

Total 4,57,000

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MAN POWER REQUIREMENT (Per Month)

SR. Particulars No. Rate Amount(Rs.)

(A) Administrative Staff 1 Factor Manager 1 12,000 12,000

2 Sales Manger 1 9,000 9,000

3 Accountant 2 7,000 14,000

4 Store keeper 1 3,500 3,500

5 Clerk Cum Typist0 2 2,250 4,500

6 Sales Man 3 2,500 7,500

7 Peon 3 1,800 5,400

(B) Technical staff

1 Production Manager 1 5,000 5,000

2 Production Supervisor 2 4,000 8,000

3 Lab. Assistant 1 3,500 3,500

4 Skilled worker 5 3,000 15,000

5Plant Maintenancessupervisor cum chemist

1 3,5003,500

6 Unskilled workers 15 2,500 37,500

7 Sweeper 2 1000 2,000

Total 1,30,400

Add.:- perquisite @ 25% 26,080

Total 1,56,480

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OTHER EXPENSES

SR. Particulars Amt.(Rs.)

1 Electricity 12,500

2 Fuel 3,000

3 Postage & Stationary 1,000

4 Telephones 4,500

5 Consumable stores 3,500

6 Advertisement & Publicity 14,000

7 Transportation Charges 7,000

8 Repairs & Maintenance 3,500

Total 49,000

\

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WORKING CAPITAL REQUIRED (Per Month)

SR.Particulars

COST

1Raw Material ( 4,57,500 * 3 )

13,71,000

2 Salary (1,56,480 * 3) 4,69,440

3 Other Expenses ( 49,000 * 3 ) 1,47,000

Total19,87,440

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TOTAL CAPITAL INVESTMENT

SR.Particulars

COST

1 Land 10,00,000

2 Building 15,00,000

3 Furniture 3,00,000

4 Machinery & Tools 4,25,000

5 Preliminary Exp. 1,81,000

6 Computer with Printer 65,000

7 Working Capital (For 3 months) 19,87,440

Total 54,58,440

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OPERATIONAL SALES EXPENSES

SR. Particulars

Monthly cost

Yearly cost

1 Advertising & Display 5,000 60,000

2 Samples 1,200 14,400

3 Traveling Exp. 1,500 18,000

Total92,400

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SOURCES OF FINANCE (Per Month)

SR.

Particulars

COST

1 Owners Contribution 25,00,000

2 Long Term Loan ( IDBI ) 10,00,000

3 Bank Loan 8,00,000

Total43,00,000

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DEPRECIATION

SR. ParticularsValue Rate of

Dep. Cost

1 Plant & Machinery4,25,000 12%

51,000

2 Land10,00,000 10%

1,00,000

3 Building15,00,000 10%

1,50,000

4 Furniture3,00,000 7.5%

22,500

Total3,23,500

Depreciation will be charge at straight-line method. Pre expense will be written by1/10th portion every year.

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COST OF PRODUCTION (Yearly)

SR.Particulars

COST

1Yearly Requirement of working capital (19,87,440 * 3) 59,62,320

2 Total Depreciation 3,23,500

3 Int. on fixed capital

On owners capital @ 10% 2,50,000

On loan from IDBI @ 12.5% 1,25,000

On Bank Loan @ 15% 1,20,000

Total 67,80,820

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ANNUAL FIXED COST

SR. Particulars COST

1 Int. on fixed capital 4,95,000

2 Total Depreciation 3,23,500

3 40% of salaries (43,250 * 12 ) 7,51,104

4 40% of other expenses (17,240 * 12 ) 2,35,200

Total

18,04,804

PROFITABILITY (Annually)Page 32 of 39

SR.Particulars

COST

1Income from sales 400 tones @ 25000 P.T.

100,00,000

2 Less : cost of production 67,80,820

Gross Profit 32,19,180

3Less: operational sales expenses

92,400

31,26,780

4Less : writes off portion of preliminary exp.

18,100

Profit before tax31,08,680

5Less : Income tax @ 40%

12,43,472

Total18,65,208

IMPORTANT RATIO

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1. Break even point (BEP):- = Fixed costX 100

Fixed cost + Profit

= 18,04,804X 100

36,70,012

= 49.18%49.18%

2. Return on Capital Investment:-

Profit after tax= X 100

Total capital inv.

= 18,65,208X 100

54,58,440

= 34.17 %34.17 %

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3. Gross profit Ratio: - Gross profit = X 100

Sales

= 32,19,180X 100

100,00,000

= 32.19 %32.19 %

4. Net profit Ratio: - = Net profit X 100

Sales

18,65,208 = X 100

100,00,000

= 18.65%18.65%

5. Return on sale: - = Net profit X 100

Sales

18,65,208 = X 100

100,00,000

= 18.65%18.65%

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NAME & ADDRESS OF MACHINARY SUPPLIERS

1. M/s Pelicon Metal works,121, Ballasis Road,Mumbai 400 008

2. M/s Jyoti Machinery Corporation Ltd.Boiler factory,R&D exchange palace,Calcutta

3. M/s UNIVERSAL Metal Works,J.B. Nagar post office,Andheri,Mumbai

4. M/s Sangsung corporation,6, Dr. lane,Gole MarketNew Delhi.

5. India Techno Ltd.5-35/44, plot No. 145Prashanthi Nagar I.E. KukatpallyHyderabad

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NAME & ADDRESS OF RAW MATERIAL SUPPLERS

The raw material required for product of wafer biscuit is maida &

sugar and the other salt, chemicals, vegetable flat….

The raw material is easily available from local market.

1. M/s. Dry & Dry Food Ltd. (MUMBAI)

2. M/s. Popcorn India Pvt. Ltd. (AHMEDABAD)

3. M/s. Matry Foods Co.(BANGLORE)

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RISK FACTORS

The risk factors for the unit of wafer biscuits are as follows:

The product being of daily use, directly affected by the changes in

taste & preference of customers.

The firm has to introduce day by day new quality; flavor and

shape of the product for attract the consumer.

The unit face competition from existing new unit as it is common

and prevalent for any unit.

Change of government policy may affect the profitability of the

unit.

Change in environment may also affect the materials.

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CONCLUSION

Preparation of Business plan provides should platform from

which to start the actual production by small entrepreneurs. In short, the

efficiency and effectiveness have its own role to play in the success of

small –scale unit.

I have found that market for the bakery items is very

much wide and it is also need for all types of people and profit is also

good in this industry.

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