Sme tool kit_queryresolution_paperplatemanufacturing

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Satyajit Sinha: Business plan for a Paper Plate manufacturing
unit
Query Resolution

16th March, 2011
Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 1

Contents

Query Summary ........................................................................................................................................ 3
Resolution ................................................................................................................................................. 3
Next Steps ................................................................................................................................................. 6
About Us ................................................................................................................................................... 7


Query Summary

Client Name: Satyajit Sinha Client Delivery Manager: 91-02-4

Query Date: 10/03/2011 Query Type: Free, SMEToolkit India

Business Result Area: Business Planning SLA*: Not Applicable

*SLA (Service Level Assurance) is only applicable for our premium members

Query Description:

“I want to start paper plate manufacturing unit. I want to know about the steps to be taken to
make this a successful venture”.

Resolution
Our understanding of your current status:

1. You want to establish a paper plate manufacturing unit.

Your Query / Queries to Us & Their Resolution:

1. Components of a sound business plan for a paper plate manufacturing unit

a. Opportunity assessment and capacity planning – You should first determine the demand
for paper plate in the geographical area which you wish to serve. You should identify the
major customer segments which need paper plates for their business. Some of the
major customer segments can be:
 Caterers (who are hired for catering food in wedding and parties) who serve
snacks in paper plates
 Restaurants
 Hawkers which sell food items on the roadside
 Manufacturers of decorative items which need paper plates

You should get a ballpark estimate for demand of paper plates from all these segments.
For example, you can count the number of caterers in your geographical area. Then you
can identify the number of parties/ wedding ceremony served by them in a month. Then
you can estimate the average number of guests in a party, and paper plate needed per


guest. By multiplying these figures, you can estimate the demand for paper plates from
caterers. You can similarly estimate the demand from other segments.

After that you need to find out the current supply of paper plates in the market, and
consequently demand supply gap. Then you should decide what percentage of this
demand supply gap, and the percentage of current market you wish to serve. This will
help you in estimating the manufacturing capacity of your unit.
b. Location analysis – You need to select a suitable location for the proposed
manufacturing unit. You can use specific criteria to support the location. The location
should be closer to the intended customers. It should be closer to the suppliers of raw
materials required in the plant. It should have good infrastructure in terms of
connectivity, and power supplies. It should be located in an area, where you can easily
source, attract, and recruit people for your plant.
c. Manpower resource planning – Estimate the manpower required for the manufacturing
plant on the basis of capacity of the plant. Estimate the manpower in both the
administrative and managerial role.
d. Competition analysis – You should analyze strategies followed by the established
manufacturers across following functions:
 Sourcing of raw materials
 Ensuring quality of the product
 Pricing Policy
 Branding & marketing strategy
 Customer relationship management
 Financing Strategy

You should determine which of the above strategy/ practices you can follow without
incurring too much cost.

e. Supply chain management – Paper, and aluminum foil are the main raw materials used
in the paper plate manufacturing. Identify the suppliers of these raw materials on the
basis of specific criteria such as reputation, lead time in supplying the material, credit
term extended etc. You should try to negotiate better pricing with your suppliers by
promising them prompt payment. Also, you should have a strict quality check on the
quality of paper used at the time of receipt of raw material from the suppliers.
f. Customer acquisition strategy – Since you will be a new player in the market, you will
need to have a strong value proposition to create a market for yourself. For that you
first need to identify the target segment for your product. You should determine the


attributes of your target segments (such as who need paper plates in bulk, who make
prompt payment etc). Then you will need to make marketing strategy for each customer
segment. To establish your identity, you can enter into an arrangement with the buyers,
where you can sell your paper plates at lower prices (as compared to competitors) at
the start. Once the buyer is assured of your higher quality, you can then raise the price
of paper plates. Also you can enter into long term arrangement with your customers by
offering plates at discounted price.
g. Quality assurance – Quality of the paper plate is very important for ensuring your
success in the market. You need to ensure the quality control at all points of your value
chain. You can take following measures to ensure quality
 Quality of raw materials
 Best practices in manufacturing to ensure quality
 Training and sensitizing your employees towards the need to ensure quality
 Ensuring quality during the transport of final products to the customers
 Taking quality certifications (in long term)
h. Financial Analysis –
 Capital expenditure required for the plant – for the land, machinery, installation
of plant
 Operating expenditure for the plant – Salary, electricity, fuel, transportation
 Initial working capital requirement
 Debt- equity ratio for funding the capital expenditure and initial working capital
requirement
 Source of debt and equity
 Profit and loss statement, and balance sheet for the manufacturing plant for the
life of the plant
 Profit, and return on equity

This resolution is provided basis the limited information we have about you. To know more
about different aspects of an effective business plan, please visit the following link:

http://365businessdays.com/PublicSite/Advisory.aspx?AdvisoryID=3

If you need our support to help you develop the business plan, it will require us to understand
the level of support you need, and your previous expertise in the sector. We always begin our
relationship in an extremely cost efficient online method and then depending upon the need of
the client; deepen the relationship to offline engagement with considerable advantages of cost


and turnaround time for delivery over comparable services. You could get to know more about
our services by visiting

http://365businessdays.com/PublicSite/takeatour.aspx

Next Steps
We wish you success in your desire to establish a paper plate manufacturing unit,
and will be extremely willing to provide you all the support that we can to help you
achieve this aspiration. We are committed to providing skill based research and
analytics support to our Premium Members to help them drive their business.

When you sign up as a Premium Member and we engage with you to support you
for developing and implementing your marketing plan and support you in the
content development process, you can be assured of access to a pool of high
quality business management professionals with deep expertise in 80 skill areas
that drive any business.

http://www.365businessdays.com/PublicSite/BusinessConcept.aspx

As for example, we will help you

 In opportunity assessment, and the capacity planning for the unit
 Developing a model for choosing the location for the plant
 Deciding criteria for selecting suppliers, and recommending a suitable
supplier for the raw material required in the plant
 Customer acquisition strategy
 Quality assurance strategy
 Financial analysis, and calculation of financial return from the plant
 Raising funds from different sources


About Us
 SME ToolKit
The SME Toolkit is a joint project of IFC (International Finance Corporation), a member of the
World Bank Group and ICICI Bank. The Toolkit website has been created as an online resource
centre to empower Indian SMEs and help them become globally competitive

http://india.smetoolkit.org/india/en

 365BusinessDays
365BusinessDays provides high quality, well researched, relevant and neutral external skill
support in a cost efficient manner to our customers. We provide this service through a secure
and easy to use proprietary online platform. To know more about our services please visit our
Take a Tour section. Please click here to Sign up for our Business Advisory Services.

DISCLAIMER:
All due care has been taken in the preparation of this report to ensure that the information, estimates,
opinions, suppositions, suggestions, and recommendations contained here-in are factually correct and
accurate to the best of our knowledge, at the time of generating and publishing this report. In particular as
our Query Resolution service is not based on any Primary Data collection and analysis, there can be inherent
challenges in the depth and scope of the issues it can address. We, at 365BusinessDays, accept no liability for
any loss or damage or unforeseen consequential loss or damage that may arise from the use of the
information contained within this report. The information, estimates, opinions, suppositions, suggestions, and
recommendations within this report cannot be guaranteed, and readers are advised to use this information
and the implications there-in at their own discretion and risk. The information published in this report may
be subject to change without notice at any time, and we accept no liability or obligation to inform the readers
or users of this report of such changes.


WWW.365BUSINESSDAYS.COM

365BusinessDays offers management consulting and business advisory services in the
form of business query resolution based on deep industry and functional expertise,
delivered through a convenient and cost-effective online business model. Our service
aids entrepreneurs, business owners, and senior management in critical decision-making
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Sme tool kit_queryresolution_paperplatemanufacturing

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