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PROJECT AT A GLANCE
1.2 OBJECTIVES
For operating and establishing “SunShine Internet Café”, we are having some
objectives.
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1.4 PROJECT RATIONALE
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Here in India there is 32.1 million peoples are internet users. So there is a great
opportunity for India. India's Internet population stands at 32.1 million and is all
set to grow to a 100 million by 2007-08. Internet Users in last few years in India:
Internet Users
70000000 60000000
60000000
60000000
50000000 60000000
Intrenet Users
40000000
30000000 18481000
20000000
7000000 18481000
10000000 4500000
7000000
0
2001 2002 2003 2004 2005 2006 2007 2008
Years
.
Source : http://www.indexmundi.com/g/g.aspx
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1.5 PROPOSED CAPACITY
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CHAPTER – 2
ORGANIZATIONAL STRUCTURE
A partnership firm can be registered by two or more persons but not exceeding
20 persons. There are some advantages of this form of organization such as:-
Partnership firms have a legal entity. It has perpetual succession & a common
seal. The profits of a partner ship firm are distributed in the form of profit all its
members, which reduces tax liability of a person. Had he been sole owner of the
Firm, he would have to pay tax on the entire profit.
The company is being promoted by Mr. Priyank Shah, Mr. Umang Shah & Miss
Parmar Jignasha
Mr. Priyank Shah has done B.com in Accounting & Financing. Then he
has done M.B.A. from one of the premier institute in North Gujarat i.e.
SVIM, MBA collage Ahmedabad. These competencies help him in
knowing the intricacies in Finance as in Administration Department &
Head of the Plant. He has extensive knowledge of the real business as
well as computer field. He knows computer software such as Capitaline,
Prowess, SPSS, Foxpro, DOS, Tally, Newsclips, Capitastocks, Adobe
software and many others software. He is the cogent and enthusiastic
personality
Mr. Umang Shah has done B.Com. After completing his graduation, he
has done M.C.A. from one of the premier institute. These competencies
help him in knowing the intricacies of this business in operator. He Knows
computer software and languages like C, C++, VB, Java, Oracle etc. . He
is the cogent and enthusiastic personality.
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financed by her also. She has done B.Com. after completing graduation,
she has done M.B.A with specialization of Marketing. She has been
responsible for successfully coordinating the activities.
Proximity to the majority of people living are from middle income group
Proximity to Private hostels setup in different areas of cities.
Low cost rent Rs. 4000/- per Marla
High visibility.
2.6 SERVICES
Proposed internet café will provide full access to the resources of internet and
other online services, printing, composing, scanning, fax. However or the sake of
innovation and differentiation there would be a unique services of Video/Audio
Chat. Just being a net café will not serve the purpose as business need to be
more than a value addition process rather than a traditional net café, that is why
after being operational for first two years there will be a facility added to the cart
i.e. Web developing. It will not only be the value addition but also a business
expansion tool.
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CHAPTER - 3
PROJECT BACKGROUND
The company will be incorporate to provide internet service, printing, faxing, net
to call etc.. The promoters have a considerable knowledge in this field. Besides
having technical and marketing set up, the promoters are financially sound to set
up a project of this scale. All these factors combined together resulted into
making this organization a reality.
CHAPTER - 4
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CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR
INVESTMENT
The common viability of this Internet café depends on the following factors:
Unique Services: Majority of the internet cafes are operating on a similar kind of
services. If the proposed setup is opened with a strategy of differentiation, it can
be more successful i.e. video/Audio chat facility, for value addition, web
development should also be started in the up coming years. In this feasibility web
development services are initiated after two years of operations of net café.
Quality of Service: The most important factor for the success of the project is
the quality of service provided to the customer, which includes customer’s
privacy, speed of internet and the atmosphere in the café.
4.2 OT ANALYSIS
OPPORTUNITIES
Growing population of daily Internet users. The importance of the Internet almost
equals that of the telephone. As the population of daily Internet users increases,
so will the need for the services of internet café.
THREATS
Rapidly falling cost of Internet access. The cost of access to the Internet for
home users is dropping rapidly. Internet access may become so cheap and
affordable that nobody will be willing to pay for access to it.
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Cost factor associated with keeping state-of-the-art hardware. Keeping up
with the technology of the Internet is an expensive undertaking. Internet café
needs to balance technology needs with the other needs of the business. One
aspect of the business can't be sacrificed for the other.
The commercial viability of this proposed Internet Café depends on the following
factors:
Majority of the Internet cafés are operating on a similar kind of services. If the
proposed setup is opened with a strategy of differentiation, it can be more
successful i.e. video chat facility, or a small snack café along with the Internet
service. With more services provided under the same roof, more traffic can be
generated in the Internet café.
The most important factor for the success of the project is the quality of service
provided to the customer, which includes customer’s privacy, speed of Internet
and the atmosphere in the café.
The proposed project intends to cater to students and middle income group
people Furthermore will be a magnet for local and traveling professionals who
desire to work or
check their e-mail massages in friendly environment.
Students
Business people
Middle Income Groups
Private Hostels
The large student population will become an important part of the Net Café
customer base. The student population continues to grow with the success of the
educational institutes. Evening entertainment, access to the Internet, and the up-
scale ambiance will attract the students. Business community is growing rapidly
with the addition of new companies day by day. Internet café will provide an
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opportunity to local and traveling professionals to check their e-mails
communications, this will be an attracting entity for the Middle income group and
for the residents of private hostels as they do not have ccess to the internet at
their living places.
More than 90 percent of visitors of these cafes and clubs are youngsters and
their sole objective to get to these is to get enjoyment.
Internet café is a service business. The success of the business depends upon
the quality of the service offer and delivering the service consistently. So a
knowledgeable friendly and eager to please staff, state-of-art computer hardware
and a clear vision of the market need will help it succeed.
The major cost of an Internet café is the Internet connection. For providing better
service,
the proposed project will use a High Band width connection for better speed as
the project is going to provide service of video chat. It is recommended that the
Internet connection should be taken from the best Internet service provider.
4.10 MARKETING
Marketing will play an important role in success of the project, as majority of the
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players in the industry are following the strategy of low price with no
differentiation, i.e., they are providing similar services and competing with each
other on the basis of lower prices. It is recommended to follow a different strategy
for the proposed project, which is the product differentiation. For this purpose, a
special service of video chat facility is going to be offered by the proposed
project. To build an image of a reliable and excellent Internet service, extensive
promotion in the locality near the project will be done by use of print media and
billboards.
CHAPTER – 5
TECHNICAL ANALYSIS
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5.1 EQUIPMENT REQUIREMENT
The project is based on Pentium-4 computer systems. Second hand systems are
also available in the market at much lower prices. The reason for using the latest
system is the new software coming in the market that requires more powerful
systems which will provide better service to the customer. The prices of computer
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systems vary with the introduction of new technology in the market.
The details of human resource requirement for the project are given in the
following table:
The details of the area required for the proposed project is given in the below
table:
Recommended Mode
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Electricity
Telephone
CHAPTER - 6
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FINANCIAL PROJECTIONS
The total outlay on the project works out to Rs. 918200 and the margin money for
working capital required to be brought in is Rs. 192000. Thus, the total cost of
project works out to Rs.1110200, the details of which are given as under: -
The working of the various major components of the cost estimates are based
upon quotations and estimates obtained from suppliers. The preliminary and pre-
operative expenses are taken on estimated basis.
Project Returns
For the purpose of this pre-feasibility study, it has been assumed that all the
funding required for this project would be provided by the investor himself.
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PARTICULAR RATIO AMOUNT
Equity Shareholder
Fund
Priyank 1/3 370067
Umang 1/3 370067
Jignasha 1/3 370067
FINANCIAL ASSUMPTIONS:
Project Life(Years) 5
Equity 100%
Discount Rate 20%
PRODUCTION ASSUMPTIONS :
NO. Of Computers 21
Total capacity per day(Hours) 240
Maximum Capacity Per Year 86400
Capacity Utilization (Year 1) % 70%
Capacity Utilization (Year 1) hours 60480
Capacity Growth Rate Per Year % 5%
Maximum capacity 100
Composing/pages/day
First year capacity 20%
Increase in composing capacity 5%
First year capacity Web Developing 5
/web/year
Increase in W.D.per Year 2
OPERATING ASSUMPTIONS:
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Electricity Growth Rate 10%
Wages Growth rate 10%
Equipment Maintenance Growth Rate 2%
EXPENSE ASSUMPTIONS
REVENUE ASSUMPTIONS
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Video / Audio Chat Price/hour 2
Internet Plain price/Hour 20
Plain internet Usage 60%
Video/Audio Usage 40%
Internet sales price decrease rate 0%
W.A sales price per hour 22
Printing revenue(%of internet sales) 10%
Fax revenue (% of internet sales) 3%
Composing price 20
Web price 10000
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6.4.1 PROJECTED INCOME STATEMENT
106298 131962
Gross Profit/Loss 924882 6 1198821 7 1440406
Operating Expenses
Payroll Admin 144000 158400 174240 191664 210830
Marketing&selling 26611 28512 30413 32314 34214
Amortization (Pre-
Operation) 5600 5600 5600 5600 5600
Depreciation 178040 178040 178040 178040 178040
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Profit Before Tax 316460 418941 519542 601976 680965
Tax 63292 83788 103909 120396 136193
Profit After Tax 253168 335153 415633 481580 544772
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Particular Year 0 2010 2011 2012 2013 2014
Assets
Cash 400678 875997 1425712 2034436 2698437
upfront Insurance 17804 14243 10682 7122 3561
Upfront Building Rent 192000 211200 232320 255552 281107 309218
Total Current
Assets 192000 629682 1122560 1691946 2322665 3011216
Total Intangible
Assets 28000 22400 16800 11200 5600 0
Liabilities
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Year O 2010 2011 2012 2013 2014
Operating Activities
Financing Activities
Investing Activities
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6.4.4 RATIO ANALYSIS
60
58
56.14
56
54
52
2010 2011 2012 2013 2014
Years
23
Net Profit Ratio(% )
25 23.57
22.42
20.95
20 18.71
Percentage
15.37
15
10
0
2010 2011 2012 2013 2014
Years
1.4 1.3
1.17
1.2
1.04
1 0.93
0.83
Percentage
0.8
0.6
0.4
0.2
0
2010 2011 2012 2013 2014
Years
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Year 2010 2011 2012 2013 2014
PAT 253168 335153 415633 481580 544772
Owner’s Equity 919288 1254440 1670075 2151657 2696427
Return on 27.54 26.72 24.89 22.38 20.20
Equity (%)
30 27.54 26.72
24.89
25 22.38
20.2
20
Percentage
15
10
0
2010 2011 2012 2013 2014
Years
25
Cash Ratio(%)
1000
857.22
900
800 700.95
700
Percentage 600 531.5
500
400 352.41
300
173.45
200
100
0
2010 2011 2012 2013 2014
Years
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CHAPTER – 7
CONCLUSION
After making this report we have faced real environment stress in real business.
This research work has enabled us to gather a lot of information about the café
business and we have been able to apply our classroom knowledge to the
practical life very effectively.
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