Business Plan

BUSINESS PLAN

SHALIMAR FOOD INDUSTRYANUJ SHARMA 2010MBE04AYESHA BHAT2010MBE06

SHALIMAR FOOD INDUSTRY

SECTION 1: THE BUSINESS PROFILE

Shalimar Food Industry is about to begin its business in the local market by launching its first ever product in the market in the form of a mouth freshener named “SHALIMAR”. It is the first product of this company and it will be launched in the niche market firstly. The company Shalimar Food Industry has a single proprietor. It is basically a company which will deals in the eatables like Mouth Freshener firstly and then it will expand its business by entering into the other segments of product. The technology in making mouth freshener is based on science and art of manipulating various Ingredients, particularly to achieve special textural effects. Targeted Market and Customers

This kind of mouth freshener is a unique mouth freshener with specific flavor is being extended to new variants. There will be few flavors available in the market i.e. mint, pan and strawberry and it will have a good demand among children and adults. The variants are being available in pillow packs priced Re.1. In addition it will also available in the jars of 50 and 60 units each and it will be the wholesale package. This product has been initiated in a few selected markets, and will be extended domestically.

Growth Trends In This Business

The market of this product in this state is a growing market. As in J&K we the residents are enjoying the benefits of Article 370 so no national product manufacturer could set up its manufacturing plant here in this state and there are hardly 1 or 2 other products. So the market is in growing stage. There is a big market to be covered yet.

Pricing Power(Session 1): Explain the unique qualities or circumstances concerning your product or service that will enable you to maintain profitable pricing.

SECTION 2: THE VISION AND THE PEOPLE

(Session 2): Describe convincingly that you are passionately committed to your new business and have the realism to make inevitable hard choices.

THE PEOPLE

Work Experience Related to My Intended Business(Session 2): Describe your work experience in the business you plan to start including a list of your skills and knowledge, which will be required in your business.

Personal Background and Education Credentials(Session 2): Describe yourself, including your education.


SECTION 3: HOME BASED BUSINESS ISSUES

1. Factors in Selecting the Business

(Session 3): Describe your considerations for selecting your home business and list:

1. Your experience in the business 2. Why appropriate for home based 3. Your utilization of Internet and communications tools 4. Home based zoning and licensing required 5. Your competition

2. The Home Based Business Format

(Session 3): Describe if the business is part-time (moonlighting) or full time.

1. If a full time business describe your preparations before quitting your job (see check list in session)

3. Operating personnel

(Session 3: Describe the personnel who will be involved in operating the business including any family members. Describe participation and responsibilities.


SECTION 4: FINANCING

Financing Aspects

(A) Fixed Assets Land and Building(own)

(B) Machinery and equipmentS.No. Description Quantity Value1

2

3

4

5

6

Oven

FFS

Mixer

Heater

Installation Cost

Cost of Office Equipment and other Production Equipments etc.

1

1

1

1

-

-

1,85,000

1,80,000

3,10,000

16,000

1,00,000

50,000

Total cost of Machinery and Equipments Rs. 8,41,000

(C) Pre Operative Expenses: Rs. 30,000

Total Fixed Capital Rs. 8,71,000



(1) Staff and LaborS.No. Description Number Salary Total Value(a) Administrative

& Supervisory

Manager

Accountant

Salesman

One

One

Two

8,000

6,000

3,500

8,000

6,000

7,000(b) Technical

Skilled & Unskilled

Skilled

Semi-Skilled

Helpers/Packager

Two

Two

Four

5,000

4,000

2,500

10,000

8,000

10,000

Total 49,000

(2) Raw Material( Per Month)S.No. Description Quantity Rate Value

Sugar

Dry Dates

Other Materials

10 tons

5 tons

-

30/- k.g

20/-k.g

-

30,000

10,000

20,000



like ChemicalsEssence, Saunf etc

Packaging Materials

- - 60,000

Total Rs.1,20,000

(3) Utilities(per month)Electricity Rs. 20,000Water Rs. 1,000Total Rs. 21,000

(4) Other Expenses Postage and Stationary Rs. 1000 Advertising Rs. 5000 Telephone Rs. 1000 Repair and Maintenance Rs. 1000 Transportation Rs. 1000 Consumable Rs. 1000 Sales Expenses Rs. 5000 Insurance Rs. 1000 Misc. Expenses Rs. 2000

Total Rs. 18,000Total Recurring Expenses

Salary and Wages Rs. 49,000 Raw Material Rs.1,20,000 Utilities Rs. 21,000



Other Contingent Liabilities Rs. 18,000Total Rs.2,08,000

Working Capital for 3 Months Rs.6,24,000

Total Capital InvestmentFixed Assets Rs.8,71,000Working Capital for 3 months Rs.6,24,000Total Rs.14,95,000

Machinery Utilization:-

It is expected that during first year machine utilization will be 70% and during second year 85% and 100% in subsequent years.

Financial Analysis:- Cost of Production(per annum)

Total Recurring cost per year Rs.24,96,000Depreciation on Plant and Equipment@10% Rs. 70,000

Total Interest on capital@ 12% Rs. 1,79,400 Total Rs.27,45,400

Turnover per MonthDescription Qty. Per

JarRate per Jar

Total

Flavored Mouth Freshener

6000/- Month

Rs.55 Rs.3,30,000



Less:- Sales Expenses @ 15% Rs. 49,500Net Sales Realization Per Month Rs.2,80,500Net Sales Realization Per Year Rs.33,66,000

Net Profit per annum before Income Tax:- Rs.6,20,600(Sales-Cost of Production)

Net Profit Ratio:-Net Profitx100 6,20,600x100 18.43%

Turnover = 33,66,000 =

Rate of Return:-Net Profitx100= 6,20,600 x 100 = 41.51% Total Investment 14,95,000

BREAK EVEN ANALYSIS:-(1) Fixed Cost per annum

Total Depreciation on Plant Rs. 70,000Rent -Interest on Borrowings( Investment) Rs1,79,400Insurance Rs. 3,00040% Salary Rs. 19,60040% Utilities Rs. 8,40040% Other Contingent Expenses Rs. 7,200Total Rs.2,87,600

(2) B.E.P

Fixed Cost x 100 = 2,87,600 x 100 = 31.66%Fixed cost + profit 9,08,200


SECTION 5: ORGANIZATION

Business Organization(Session 5): Explain the form of business organization you intend to use and why it is best for your business.

Professional Consultants(Session 5): List the names of your lawyer, accountant, insurance agent and any other professionals.

Licenses(Session 5): List what licenses you will require to go into business.


SECTION 6: LICENSES, PERMITS AND BUSINESS NAMES

DBA: The Business we intend to do is of Manufacturing of Mouth Freshener.

Licenses: Licenses to be needed for the initiation of this manufacturing business at local and state level are:-

Weights and Measurement Packaging (Municipality) ISI certificate DIC Labor department Provident Fund if labor > 6 Pollution certificate Certificate of electric department Certificate of water department Sales Tax department Police Trade mark registration

Federal: No federal licensing will be required.


SECTION 7: INSURANCE

Insurance(Session 7): List the forms of insurance coverage including costs are anticipated.


SECTION 8: COMMUNICATIONS

Resource Requirements:

CommunicationsEnter a description and budget of all communications equipment.

FacsimileEnter a description and budget for all fax equipment.

ComputersEnter a description and budget for all computer equipment.

InternetEnter a description and budget for necessary Internet access and providers.



SECTION 11: ACCOUNTING AND CASH FLOW

Accounting(Session 11): Furnish, as a separate exhibit of your starting balance sheet and projected income statements for the first six months to one year.

Cash Flow Planning(Session 11): Provide a separate exhibit of your one year cash flow analysis including estimated sales, all costs and capital investments.

Provide a checklist of all expense items for input into your cash flow projection.

Analysis of Costs(Session 11): What are all of my costs: fixed, variable, product, delivery, etc.

Internal Controls(Session 11): Explain your: Intended internal controls and cash controls, check signing policy, strategy for controlling shrinkage and dishonesty and control of incoming merchandise.



SECTION 13: MARKETING

Marketing Plan(Session 13): Describe your overall marketing and sales strategy including how you plan to get and retain customers.

Advertising and Promotion Plans(Session 13): Describe your plans and budgets for advertising and promotions.

Purchasing and Inventory Control(Session 13): See “how to buy” checklist.


SECTION 13: MARKETING

Training Policies(Session 13): Describe your plans for hiring and training your sales associates.

The CompetitionChewgum market,local product competitors (Kashmir khas, ,pogo,shanai),national products competitors (pass-pass,chutki,methamaza) .


(Session 14): Include copies of job descriptions for all employees you intend to hire.

(Session 14): Include a copy of the job application form and screening procedures you intend to use.

(Session 14): Provide a copy of your intended benefits package.



SECTION 15: GROWTH PROGRAM

Expansion(Session 15): Describe your growth: You might include development of profitable pilot operation, sources of financing, cash flow, accounting system in place, incentive compensation plan for managers, benefits package and policies, economics of scale.

Documents

Business Plan