1. 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
2. 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)
3. Table of Contents
Page
Sr. No. Particulars
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
4. 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.
5. 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
6. 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
7. 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
8. 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.
9. 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.
10. 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 Period
1 Survey for collection of data in 2 months
respect of demand, raw material,
including power and fuel
availability of technology,
pollution control
2 Arrangement for margin money 1 month
3 Preparation of project document 1 month
and registration
4 Financial assistance 2 months
5 Selection of site & development of 2 months
land
6 Make shift office 12 months
7 Electricity, fuel and water tying up 2 months
for availability
8 Selection of machines and 1 month
procurement
9 Selection of raw material and 8 days
procurement
10 Recruitment of staff and labor 15 days
11 Registration for SSI 15 days
12 trial production 20 days
11. 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.
12. 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
13. 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.
14. 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.
15. 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
16. 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 400
Cayce Anger Roll 300
Manpasand 320
Sangam Slice 150
Angir Slice 160
Angir Badam Halva 220
17. 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
1Paper boxes
2Plastic packets
3Plastic papers
Containers (for loose selling)
18. 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.
19. 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:
1Age group – above 30 years
2Income – high earn
3Personalities- rich & aristocrat personalities
4Social class- higher middle & upper class
5Education- highly educated and well awarded
6Behavioral – well awarded
Psychological Segmentation:
Beliefs & attitudes – favorable, positive
20. Pricing Decision
Objectives
1To earn desirable profit
2To society the society
3To fight with competitors
4To create brand equity
Influencing Factor
1Cost of raw materials
2Cost of production
3Prevailing demand
4Competitors price
Pricing Method
1Cost plus pricing
Distribution Decision
Channel
2Distributors – retailers- end users
3Hotels & restaurants
4Wedding planners
5Event managers
21. 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 Positioning
The brand positioning map of the Gokul brand is as follows:
22. Analysis of Competitors
The main competitors of Gokul sugar free sweets are…
1Shiv Shakti Sweets
2Sweet Palace
3Bengal 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 strategy
To 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
1The quality of the sweets,
2It’s delicious taste,
3Effective pricing policy,
4Efficient distribution channels.
23. Promotion Decision
Objective
1Createawareness among mass for sugar free sweet & specially
among patients
2Brands awareness
3Brand preference
4Brand loyalty
Budget
5Rs. 10,000 per month
Tools
6Signboards,
7Hoardings,
8Printed materials,
9Catalogs,
10Local magazines,
11Other materials of social groups.
24. 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 Based
The items which are made from the date are:-
1Dry fruit roll cut
2Manpasand
3Sangam slice
The other fig based and black raisins based items also require the
same process as date based
25. Fig Based
The main items made from fig based are:
1Angir kasata
2Angir Roll
3Angir Dryfruit halva
4Kaju Angir Roll
5Man pasand
6Angir slice
7Angir badam halva
Black Raisins Based
8Dry fruit roll cut
9Kishmis kamal
10Kishmis kasata
11Kishmis roll
12Manpasand
13Sangam katri
14Badam kishmis
15Kaju kishmis etc
26. Financial Aspects:
Fixed capital Details
(Section - I)
(a) Land And Building
Sr. No. Particulars Amount
(Rs.)
1 Land : 2,500,000
500 sq. mtrs. @ Rs. 5000 per sq. mtr.
2 Building: 1,500,000
Work shed: 200 sq. mtr. @ Rs. 7500
Storage: for raw material 20 sq. mtrs.
And for finished goods 20 sq. mtrs.
3 Furniture: 250,000
Electrification and fixtures 150,000
Total 4,400,000
(b) Machineries & Equipments
Sr. no. Description Qty Price (per Total Price
unit) (Rs.)
1 Mava Maker 4 80,000 320,000
2 Dry Fruit Cutter 2 15,000 30,000
3 Maska Machine 1 25,000 25,000
4 Slice Machine 2 20,000 40,000
5 Refrigerator 2 110,000 220,000
Total 11 250,000 635,000
(c) Statement Showing Total Fixed Cost
27. Sr. No. Particular Cost (Rs.)
1 Land building and furniture 4,400,000
2 Machineries and equipments 635,000
Total 5,035,000
Land Building M achine & Equip.
Working capital details (Section – II)
(a). Personnel (Per month)
Sr. Designation No.s Salary Total
No.
1 Manager 1 7,000 7,000
2 Supervisor 2 5,000 10,000
3 Accountant 1 4,500 4,500
4 Stock Keeper 1 2,500 2,500
5 Counter Person 1 3,000 3,000
6 Skilled Workers 4 2,200 8,800
7 Unskilled Workers 6 1,800 1,800
Total 16 46,600
28. (b) Raw materials
Sr. No. Particular Qty (kg.) Rate (per kg) Total
1 Ghee 30 140 4,200
2 Cashew 100 240 24,000
3 Almond 70 480 33,600
4 Fig 50 280 14,000
5 Date 70 35 2,450
6 Black 40 140 5,600
Grapes
7 Coconut 20 75 1,500
Powder
8 Pista 20 280 5,600
Total 400 90,950
(c). Utilities (per month)
Sr. Particular Total Value
No.
(Rs.)
1. Power – per unit Rs. 4 7000
2. Water 5000 ltrs 2000
3. Gas 125 bottles @ 320 (aprx.) per 40000
no.
Total 49000
29. (d) Other expenses (per month)
Sr. No. Particulars Value (Rs.)
1 Postage & Stationary 500
2 Telephone 3000
3 Repair & Maintenance 2000
4 Transportation Charges 15000
5 Advertisement 20000
6 Insurance 2000
7 Miscellaneous Expenses 5000
Total 47500
(e). Statement showing total working capital (monthly)
Sr. NO. Particulars Cost
1 Personnel 46600
2 Raw Materials 90950
3 Other Expenses 47500
4 Utilities 49000
Grand Total 234050
(f) Working capital Requirement
(for 3 months)
Rs. 2 34 050 X 3 Months = Rs. 7, 02, 150
30. Total Capital investment
Sr. No. Particulars Value (Rs.)
1 Fixed Capital 5035000
2 Working Capital 702150
Total 5737150
31. Sources of Finance
Sr. No. Particulars Contribution Value
1 Owned Capital 35% 2008002
2 Borrowed Capital 65% 3729147
Grand Total 5737150
4000000
3500000
3000000
2500000
2000000
1500000 Value
1000000
500000 Contribution
0
Owned Borr ow ed
Capital Capital
Contribution Value
Interest On Capital
Sr no. Particulars Rate Value (Rs.)
1 Owned Capital 9% 180720
2 Bank loan 12% 447498
Total Interest 628218
Depreciation Details
32. Sr Particular Gross Rate Depreciatio Net Block
no block n
1 Building 1500000 10% 150000 1350000
2 Furniture 250000 8% 20000 230000
3 Machines 635000 10% 63500 571000
&
Equipment
s
Total 2385000 233500 2151500
Cost Of Production
SR NO. Particulars Value (Rs.)
1 Total requirement of working 2808600
capital
2 Depreciation on Building 150000
3 Depreciation on machinery 63500
4 Depreciation on Furniture 20000
5 Interest on Bank Loan 447498
6 Interest on owned Capital 180720
Total cost 3670318
Sales Turnover (Monthly):
Yearly Sales Turn over
Sr. no. Particular Qty Rate Amt
33. 1 Date Based 300 500 150000
2 Black 250 600 150000
Raisins
Based
3 Fig Based 400 550 220000
Total 950 1500 520000
Sales =520000 X 12 Months
= Rs. 62,40,000
34. Fixed Cost
Sr. No. Particulars Value (Rs.)
1 Depreciation on building 150,000
2 Depreciation on furniture 20,000
3 Depreciation on machinery 63,500
4 Interest on bank loan 447,498
5 Interest on owned loan 180,720
6 Insurance 10,000
7 40% Salary & wages 18,640
8 40% Other Expenses 19,000
Total 909,358
Profitability Analysis
Particulars Amount (Rs.)
Sales volume 6240000
Less: Cost of production [Excluding 3,042,000
interest]
Earning before Interest & Tax 3198000
Less: interest on Capital 628,218
Earning before Tax 2569782
Less: income tax at 35% (assumed) 899424
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
35. 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 Cost
BEP = ------------------- X 100
Fixed Cost + profit
909,358
= ---------------------- X 100
909,358 + 936577
= 49.26 %
36. Computation Of Ratios
Return on Investment
Net Profit 936577x 100
ROI = ----------------- 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%
37. 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:
1The demand of the products may not be generated as predicted.
2The firm will have to face strong competition.
3The promoters of the firm are not much experienced in the
field of entrepreneurship and in the food items.
4Consumers will not be got much well aware about the
products.
5In the very first year the company may face loss.
38. 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:
1Expansion in existing tem with different flavors and ingredients
2Expansion in existing market and cover the entire Gujarat.
3Diversifying in other sugar free food items.
4Development of various branches whole over the Gujarat.
40. P&l account for 3 years
Particular 1st Year 2nd Year 3rd Year
Sales 6240000 6864000 7550400
Net Sales / 6240000 6864000 7550400
Income (A)
Manufacturing
Exp.:
Raw Materials 1091400 1200540 1320594
direct wages 265200 291720 320892
Utilities 588000 646800 711480
Repairs & 24,000 26400 29040
Maintenance
Total Manu. 1968600 2165460 2382006
Exp. (B).
Gross Profit (A- 4271400 4698540 5168394
B) (C)
Adm. Selling
Exp.
Telephone 36,000 39,600 43,560
Postage & Stamp 6,000 6,600 7,260
Duty
Miscellaneous 60,000 66,000 72,600
Exp.
transport exp. 15,000 16,500 18,150
Salary 294000 323,400 355,740
Depreciation 2151500 2,366,650 2,603,315
Insurance 24,000 36,000 36,000
Interest
Own Capital 190720 190720 190720
Borrowed 447498 447498 447498
Capital
Total Adm. Ex. 3,224,718 3,492,968 3,774,843
(D)
Operating 1,046,682 1,205,572 1,393,551
Profit (C-D)
(Less) Tax 110,105 421,950 487,743
41. 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 3602028
Borrowed 3729147 3729148 3729149
Loans
Creditors 250000 270000 260000
Total 7611944 7478990 7591177
Property
Assets
Fixed
Assets
land & 1500000 1350000 1215000
Building
Less Dep.
Machine 635000 571500 514350
Less Dep.
other fixed 250000 230000 211600
assests less
dep.
debtors 702150 1167665 1167665
Cash and 4,524,79 4,159,825 4,482,562
bank 4
Total 7611944 7478990 7591177
42. Cost sheet for 3 years
Particulars 1st year 2nd year 3rd year
Raw
Material
Consumed
Op. Stock of -
Raw Material
Purchase 1091400 1200540 1320594
Cost of R.M. 1091400 1200540 1320594
Consumed
Direct Wages 265200 291720 320892
Utilizes 588000 646800 711480
Prime Cost 3036000 2139060 2352966
Factory
Overhead
Salaries 294000 323400 355740
Dep. On 150000 165000 181500
Building &
Machine
Maint. & 24000 26400 29040
Repairs of
Machine
Work Cost. 3504000 2653860 2919246
Office /
Adm.
Overhead
Telephone 36,000 39600 43560
Postage & 6,000 6600 7260
Stamp Duty
Insurance 24,000 26400 29040
Mis. 5,000 5500 6050
Expenses
43. Interest on 688218 757039.8 832743.78
Cap.
Depre. On 20000 18400
other fixed
Asset.
Cost of 4,283,21 3,507,40 3,837,900
Production 8 0
Selling &
Dist.
Overheads
transport exp. 15000 16500 18150
5,888,81 6,377,85 6,922,277
Cost of Sales. 4 2
Sales 6270000 6897000 7586700
Profit 381,186 519,148 664,423
44. 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.
45. 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.
