A FEASIBILITY REPORT ON

BEYOND BREAD BAKERY of BACHOLORS OF BUSINESS ADMINSTRATION by TWINKLE MALHOTRA (BBA/4510/10) AKSHITA CHAUHAN
(BBA/4528/10) PRIYA SAXENA (BBA/4530/10)

DEPARTMENT OF MANAGEMENT BIRLA INSTITUTE OF TECHNOLOGY MESRA-835215, RANCHI 2012

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DECLARATION CERTIFICATE

This is to certify that the work presented in the feasibility report on Beyond Bread Bakery entitled in partial fulfillment of the requirement for the award of Degree of Bachelors of Business Administration of Birla Institute of Technology Mesra, Ranchi is an authentic work carried out under my supervision and guidance. To the best of my knowledge, the content of this thesis does not form a basis for the award of any previous Degree to anyone else.

PROFESSOR: Meenakshi Sharma Department of Management Birla Institute of Technology Mesra, Ranchi

MEMBERS OF GROUP

S.No 1. 2. 3.

ROLL NO. 4510 4528 4530

NAME TWINKLE MALHOTRA AKSHITA CHAUHAN PRIYASAXENA

TABLE OF CONTENTS

S.No 1. 2 3 4 5 6 7 8. 9 10

PARTICUALAR Acknowledgment Preface Executive Summary Introduction to Beyond Bread Bakery Environmental Scanning Technical Feasibilty Marketing Feasibilty Financial Feasibilty Conclusion Bibliography/Webography

PAGE NUMBER 5 6 7 8 10 12 32 44 58 59

ACKNOWLEDGEMENT

Our sincere thanks to our teacher Mrs. Meenakshi Sharma, BIT Mesra, Noida extension Centre for extending all the support and for her ideas and knowledge which acted as preliminary information for all the project work. She was always ready with answers to all my doubts. Finally, I would thank my friends for their valuable suggestions and inputs that proved to be of invaluable assistance, and constantly motivated me to learn as much as possible.

PREFACE
Feasibility reports address things like where and how the business will operate. They provide in-depth details about the business to determine if and how it can succeed, and serve as a valuable tool for developing a winning business plans.

This project studies and analyses various parameters that decide the establishment of a Beyond Bread Bakery and whether the venture shall be feasible or not.

The project has been divided into four major branches of feasibility study, namely, technical, human resource, marketing and financial.

Our team has made an all out effort to present a comprehensive feasibility report and depict the feasibility of the project.

We hope that this project will receive a warm welcome from Birla Institute Of Technology. Valuable suggestions from the teachers and students are welcome for the improvement of the project.

EXECUTIVE SUMMARY
This project is a feasibility report for establishing a Beyond Bread Bakery. The name of our partnership firm has been decided as Beyond Bread Bakery. We will enter into the business with breads, buns, toasts, khari and cream rolls as our chief products. Legal, technical, marketing & financial feasibility have been covered in this project.

For the legal feasibility, we have shown laws that govern Beyond Bread Bakery production and products. Technical feasibility includes raw materials, machineries required for production and the production process for different products. These have been decided after visiting bakeries in Noida and conducting a small survey for dealers. Marketing feasibility covers the marketing mix for our firm, marketing strategy adopted and the market research conducted for consumers and dealers of Beyond Bread Bakery products. The analyses of these surveys show the customer trends

for Beyond Bread Bakery products and the pattern of demand and supply in the Beyond Bread Bakery industry. The workforce required by the firm is specified in human resource feasibility. Estimated costs, sales, profits make the financial feasibility. Ratio analysis and break even sales are also covered in this part.

INTRODUCTION TO BEYOND BREAD BAKERY

PROJECT AT A GLANCE BEYOND BREAD BAKERY

We bake memories!

Name: Beyond Bread Bakery Product: Breads, buns, Cream rolls, Tea cakes Status: Small Scale Address: shop no.-2, C block market, secConstitution: Partnership Firm Date of incorporation: 12th NOV 2012 Cost of project: Rs. 62, 18,180
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41, Noida 201301

Source of finance: Partners capital - Rs.30, 47,525 Bank Loan - Rs.31, 09,090

ENVIRONMENTAL SCANNING

SWOT ANALYSIS

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.
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The SWOT Analysis of our firm is

Strength
The prices of our products are very reasonable and less than our competitors. New and different varieties of breads have been introduced which shall give us the benefit of product differentiation. Our sales are through tie-ups with grocery stores and supermarkets across Noida. This gives us a wide consumer base and a chance to serve different levels of customers. The firm also gives a little more commission to its distributors to encourage dealership. The labour required does not need any specific qualification & skill and hence can be made easily available.

Weakness
Beyond Bread Bakery products are perishable items hence need to be sold as soon as possible to gain maximum benefit. The customers also prefer fresh products. But the far location of the factory can increase the time between baking and actual selling. Our Beyond Bread Bakery has introduced few Beyond Bread Bakery items from the possible product lines. We are not making cakes, pastries, chocolates and other various products. This limited menu can be seen as a weakness. We are not introducing our own outlets but are selling through tie-ups across the city. This delays our brand establishment time.

Opportunity
Expansion of the product line in the future with the introduction of biscuits and cakes and pastries. Scope for expansion with the establishment of our own outlets and Beyond Bread Bakery cafs Growing concern for health and multigrain food products shall become a reason for increase of our sales of food items such as brown breads, tomatospinach bread and white-coriander bread.

Threats
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 Severe competition in the industry with well-established players like Modern breads, Bakers Street,Bon-Bon,Top Breads,Bread Bakery etc.

TECHNICAL FEASIBILITY

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OUR PRODUCTS
BREADS

WHITE BREAD

BROWN BREAD

WHITE CORIANDER BREAD

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TOMATO SPINACH BREAD

BUNS

PAV

DABELI

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PIZZA

CREAM ROLLS

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TOASTS

KHARI

TEA CAKES
TUTTI FRUITY
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CHOCOLATE

PROCESS
BREAD:

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MIXING PRE-SHAPING

SHAPING
PROOFING BAKING COOLING SLICING PACKAGING
Starter Often referred to as sourdough, this is a pre-made mixture of flour water and naturally occurring yeast. A portion of the starter from the previous day is included in the next days starter. The starter is a continuous and dynamic mixture. It is allowed to develop until it has reached its maturity for many hours and then it is included in the mixing process. Starter imparts a sour flavor and develops a distinctive crust.

Mixing In the mixing step the ingredients of the recipe are incorporated into a homogeneous mixture and then developed. This is a two stage process. First everything (flour, water, salt and leavening) is mixed together and water is added gradually on a low speed. After the appropriate amount of water is added the second stage of gluten formation and development begins.
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In gluten development, or strength, the gluten is formed by the combining of the water and protein in the flour. The gluten is developed by the stretching and folding of the strands (or kneading). Gluten development becomes the foundation and structure for the bread. Here begins the first fermentation stage. (fermentation is the conversion of carbohydrates (sugars) to alcohol and CO2) At this point the dough will spring back when touched. Pre shape In this step the dough is given a shape and divided into proportional sizes

In our process we shape all loaves first into rounds. Here some of the developing gas is worked out by hand. Once rounded the dough is allowed to rest. Generally we cover the dough to keep from drying and crusting over. In our case the resting is usually 10-20 minutes. Shaping Once the dough is relaxed the final shape is given.

Here the excess gases are expelled very gently by pressing and squeezing the
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dough by hand. The expulsion of the gases makes for a more uniform loaf of bread and less air pockets. By expelling the gases the fermentation process is also rejuvenated and slightly accelerated. Once shaped, the dough is placed on flour lined pans or boards. Proofing At this point fermentation is allowed to take its course in a warm and humid atmosphere while the dough is covered. This type of proofing, combined with other details of the bread making process, gives our bread its uniqueness, depth of flavor and crispy crust. Here the dough ferments (or rises) to a desired volume and consistency. Ideally the dough should be soft and slightly pliable. If pushed with a finger it should leave an impression.

Baking During the initial baking there is a tremendous burst of gas that occurs called oven spring.

To allow for controlled tearing the bakers score (make cuts to) the loaves. The cuts create a weak area for the expansion to occur. This is where the final result can be experienced. The sight of warm fresh baked bread being pulled
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from the oven, the smell of freshly baked bread and the sound of the crackling crust is where the results of all the hard work are realized. Cooling The bread formed is then allowed to cool for some time. Packing The ready bread is then packed and wrapped. The seal and logo of the firm is imprinted on the packing. Thus the final product is ready to be sold.

TOAST:
The process for making toast starts with bread as the raw material. Cut the slices of bread in the desired shape of toasts. Butter it up liberally Add salt and pepper to taste Pour hot milk over the toast Let all that soak in.

The toasts are ready. After proper packing, they are ready to be sold

KHARI :
Rub solidified ghee into flour till crumbly. Make a well in center. Add salt in it. Add 1 cup of cold water and mix well till dough is formed. Use more water if required, to make a soft dough. Knead for 3-4 minutes till smooth. Keep aside covered for 10 minutes. Roll into a rectangle, of the desired size, with help of dry flour for dusting. Dust away excess flour. Spread fat over the rectangle keeping a 0.5 margin all around. Roll rectangle into a tight roll, pressing sides to keep ghee inside intact. Dust liberally with dough, place in freezer for 15 minutes. Remove, roll back to a rectangle. Brush with very little ghee. Fold one-third of the outer portion onto the central portion.
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Brush with flour, return to chiller for 15 minutes. Roll again, cut into desired shapes (rectangle, triangle, etc.). Place on a greased baking sheet, brush with ghee. Place in a preheated oven at 200 degree Celsius for 15 minutes. Reduce thereafter to minimum (50C or lower) for 10 minutes to allow drying out. Remove place on racks till fully cooled, before storing in airtight container.

PLANT LAYOUT
The plant layout of the factory building and the planned interior setup is depicted below:

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LOCATION ANALYSIS
The selection of location plays a vital role for the growth. We have decided to establish our production unit as well as the administrative office in our factory building in Noida. Factory & Administrative office address: Beyond Bread Bakery, Shop no.-2,C Block Market,Sector-41, Noida, U.P. Area: 3600 sq. feet Cost of land: 16, 42,000 including documentation charges and agents commission. Reason for selecting the site: Fast growing area Easy availability of land and building at reasonable rates. Easily accessible location Easy availability of raw materials and amenities like electricity and water as the whole area is an industrial site. Easy availability of the labour in industrial area.

PROCUREMENT OF RAW MATERIALS

The estimated daily requirement of ingredients is: S.NO 1. 2. 3. 4. 5. 6. 7. 8. 9. INGREDIENT Maida Wheat Flour Yeast Milk Vegetable Oil Sugar Butter Brown Sugar Baking Powder DAILY REQUIREMENT (in Kgs.) 400 50 12 57 12 23 15 4 2.5
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PRICE PER Kg./Ltr. 17 17 180 22 60 30 100 40 90

10. 11. 12. 13. 14. 15. 16. 17. 18.

Curd Salt Spinach leaves Tomato Cumin powder Red chili powder Cinnamon Coriander Ginger

8 10 5 5 0.2 0.2 0.2 0.7 0.350

50 5 17 30 100 250 100 100 75

Apart from the above mentioned ingredients, we shall also need the following ingredients on weekly basis. S.No. 1. 2. 3. INGREDIENT Tutti-Fruity Choc powder Cocoa powder WEEKLY REQUIREMENT 1.5 kg 300 gms 300 gms PRICE PER Kg/gms. 80 200 200

The ingredients will be purchased from local suppliers at Kundlimarkets.

SPECIFICATION OF MACHINERY
1.) DECK OVEN

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NAME QUANTITY PURCHASED SUPPLIER PRICE WEIGHT CAPACITY FUEL

Deck oven(in-built proofer) 1 Canon engineering industries Rs. 2,64,000 490 kg 9 trays Gas-fired

2.) DOUGH MIXER

NAME QUANTITY PURCHASED SUPPLIER PRICE PER UNIT WEIGHT CAPACITY FUEL

Dough Mixer 3 Canon Engineering Industries Rs. 46,500 285 kg 25 kg Electric fired

3.) DOUGH MOULDER

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NAME QUANTITY PURCHASED SUPPLIER PRICE PER UNIT WEIGHT CAPACITY FUEL

Dough moulder 2 Canon Engineering Industries Rs. 42,350 290 kgs 80 kg/hour Electric fired

4.) SUGAR GRINDER

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NAME QUANTITY PURCHASED SUPPLIER PRICE WEIGHT CAPACITY

Sugar Grinder 1 Kaps Engineers Rs. 35,000 250 kg 135 kg/hour

5.) PACKING MACHINE

NAME QUANTITY PURCHASED SUPPLIER PRICE WEIGHT

Packing Machine 2 Apple Beyond Bread Bakery Machinery Pvt. Ltd. Rs. 47,650 265 kgs

6.) BREAD/TOAST SLICER

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NAME QUANTITY PURCHASED SUPPLIER PRICE WEIGHT CAPACITY

Bread Slicer 2 Canon Engineering Industries Rs. 38,000 270 kgs 300 loaves per hour Capable of slicing bread upto 25 cm long

7.) FREEZER

NAME QUANTITY PURCHASED SUPPLIER

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Freezer 2 KPM Industries

PRICE WEIGHT

Rs. 16,400 300 kgs

8.) MIXER GRINDER

NAME QUANTITY PURCHASED SUPPLIER PRICE

Mixer Grinder 1 Local Shop Rs. 3,600

9.) ROLLING RACKS

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NAME QUANTITY PURCHASED SUPPLIER PRICE CAPACITY

Rolling Racks 6 KPM Industries Rs. 7500 7 storey

10.) TRAYS

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NAME QUANTITY PURCHASED SUPPLIER PRICE PER UNIT

Trays 100 KPM Industries Rs. 200

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11.) STAINLESS STEEL UTENSILS AND TOOLS

NAME SUPPLIER PRICE

Stainless steel utensils Local Shops Rs.83,400

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MARKETING FEASIBILITY

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MARKETING MIX

PRODUCT
The product is the heart of the marketing exchange. Customers buy product to solve problems or enhance their lives and thus the marketer has to ensure that the product can fully satisfy the customers, not just in functional terms but also in psychological terms. A product is physical good, service, idea, person or place that is capable of offering tangible and intangible attributes that individuals or organization regard as to necessary, worthwhile or satisfied that they are prepared to exchange money, patronage or some other unit of value in order to acquire it. In this report, our products are breads and buns, cream rolls, toasts and khari and tea cakes.

PRODUCT LEVEL

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POTENTIAL LEVEL AUGMENTED LEVEL EXPECTED LEVEL BASIC PRODUCT

CORE BENEFIT

PRODUCT LEVEL CHART FOR BEYOND BREAD BAKERY

CORE BENEFIT
Core benefit includes the benefit that the product provides to the customers to satisfy their needs. To satisfy hunger Beyond Bread Bakery products like Breads

BASIC PRODUCT

In the basic product the marketer has to turn the core benefit into a basic product. Toasts/ Khari This is the actual tangible item that Tea cakes people purchase. Cream rolls

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Good taste At this level, the marketer prepares an Good quality expected product, a set of attributes and Varieties conditions buyers normally expect when they purchase this product. Purity and no adulteration Attractive packaging This is the non tangible elements that are perhaps provided in addition to the physical parts. The marketer prepares an augmented product that exceeds customer expectations. Brand positioning & competition takes place at this level. Diet products Sugar free or low calorie products Free home delivery

EXPECTqED PRODUCT

AUGMENTED PRODUCT

POTENTIAL PRODUCT

Mix flavour bread having different flavours At this level, the potential product in the same slice encompasses all the possible augmentation and transformations. Breads and butterjam-cheese-chopped The product or offering might undergo vegetables-ketchup in future. the same packet

PRICE
The price is the only component in the mix that generates revenue, while other components generate costs. Price means consideration of any goods or services that a customer paid to the producer. To a manufacturer, price represents the quality of money received by the firm on sales of its products. To a customer, it represents monetary scarifies and hence his perception of the value of the products.
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Depending on the objective, the Beyond Bread Bakery can set the prices. As far as Beyond Bread Bakery is concerned, it has the objective of the selling its products to the consumer at reasonable price and offer good quality. In order to arrive at an acceptable price level, the manufacturer needs to have the information on the 3 Cs namely Customer, Competition and Cost structure of the firm.

COMPETITION

PRICE
CUSTOMER COST STRUCTURE OF THE FIRM

CUSTOMER
Every individual consumes Beyond Bread Bakery products. Hence, our firm has decided prices that suit everyone.

COMPETITION
The prices of some of our products have been kept lower than our competitors so as to penetrate the whole market and grasp the maximum benefits from the market.

COST STRUCTURE OF THE FIRM

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An optimum cost structure has been adopted that enables the firm to earn a reasonable profit and minimizes wastage of resources and losses. We have priced our product somewhere near the prices of the competitors considering the following objectives: Survival: As we shall face intense competition survival in the market is our short-term objective. In the long run, we shall work for new innovative varieties offering our customers wider choices. Maximization of market share: Our long-term objective is to become a role player in this market. We shall try to achieve this by charging less than our competitors price.

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ITEM

VARIETY WHITE BREAD Small Medium Large BROWN BREAD Small Medium

PRICE

09 15 25

10 20

BREADS

TOMATO SPINACH Small Medium WHITE CORIANDER Small Medium Pizza bread 8 Dabeli bun 12 20 09 08 12 20

BUNS

Pav Small Medium Milk 10 20 15 17 18 20 08 08

TOASTS KHARI CREAM ROLLS

Jeera Butter Jeera Vanilla Strawberry

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PLACE
The location of the plant is a very important aspect in economic analysis of any project as it plays a vital role in continuing life of the business as in future. The firm has to leverage the advertisement while operating with location of plant as the biggest constraint. Location of plant and industry means a specific site in the region where the business units is to be started for selecting location or the pertinent factors influencing the location have to be considered and weighted out very carefully.

Place: Noida Address:Shop no.-2,C block market,sector-41,

Noida.

Why have wechosen Noida?

Native place An emerging mega city Easy availability of building To create the brand image Easily accessible location.

Area: 3600 sq. feet.

DISTRIBUTION CHANNEL
It means the channel through which goods passed from source to destination that is from manufacture to retailer. Company should pay attention to how the product is distributed. They should have proper distribution channel so that consumers may get rid of the problems regarding unavailability of the product.

Our firm uses the following distribution channel :

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DEALERS FACTORY i.e. SUPERMARKETS AND GROCERY STORES CUSTOMERS

In order to have the seamless distribution of the finished goods to the Dealers i.e. Supermarkets and Grocery stores, we have also purchased two tempos and we solely have our own private medium of transportation. The ready Beyond Bread Bakery goods are distributed to grocery stores and supermarkets having our dealership. These stores then make the final sale to the consumers.

PROMOTION
Promotion is the part of the marketing mix that many people consider to be "marketing" but this is really the end result of all your hard work in defining products to satisfy needs and pricing it accordingly. Promotion decisions are those related to communicating and selling to potential consumers. The success of any business entity depends on how well it has been able to create awareness about its products or services in its target segment so as to induce its consumption by customers. Promotion is the marketing communication. There are traditionally 5 promotional tools: 1. 2. 3. 4. 5. Advertisement Sales Promotion Public relation Direct marketing Personal Selling
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Our firm is using advertisement tools to create awareness among the public, about our products and the Beyond Bread Bakery.

ADVERTISEMENT
Advertising is used to build up a long-term image for a product and can reach geographically dispersed buyers. Advertisement is an informal way of communication which induces customers to buy the product and services and which also creates awareness among consumers.

Types of advertisement:
(a) Informative advertisement: - Informative advertisement is that from which the consumer gets the necessary information about our products and other relevant details. Influential advertisement: -Influential advertisement shall influence the customers to buy our products.

(b)

5 Ms OF ADVERTISING

MONEY

MEASUR EMENT

MISSIO N
ADVERTI SING

MEDIA

MESSA GE

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1. MISSION: It is all about setting the advertisement goal in the initial stage. We have printed information brochures that includes list of our products and varieties, commission rates, terms of sale etc. These shall be distributed to the grocery stores and supermarkets to make them aware of our firm and products and generate their interest in dealership. Apart from these we shall also advertise by putting up floor signboards at banners at our distributor stores to catch the eye of the public and create awareness and interest about our products. 2. MONEY: Deciding on the advertising budget We have considered the following factors while deciding our advertising budget:

a) Stage in life cycle: In the initial stage, our advertising budget is high because
we want to introduce our product to the customers and dealers. Afterwards, it will be low compared to the first year. b) Market share and consumer base: When the firm covers enough market shares, it will require less marketing budget because it will have a set of loyal buyers and recognition in the market. c) Competition: in the initial stage, we shall face good competition from the well established players in the market, such as Modern breads, Bakers Street, Bon-Bon. Therefore, we shall have to advertise more in order to get some public attention. d) Advertising frequency: When advertising frequency is high, advertising budget will be high and when it is low, required money will be less. 3. MESSAGE: Our message is to give the customer such a delicious taste that they dont forget hence truly We bake memories 4. MEDIA: It includes the decision regarding media vehicles, deciding on media timings and deciding on geographical allocation. Major media types are print media which includes pamphlet, newspapers, hoardings, magazines and television media

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Our firm prints pamphlets 4 times in a year to be distributed along with the vernacular newspaper in the areas in which we have tie-ups with the stores. 5. MEASUREMENT Our company tries to measure the communication effect of an advertisement that is, its potential effect on awareness, knowledge or preference.

ANALYSIS OF PAST AND PRESENT DEMAND.

In the market, it has been observed that there is enough demand of all Beyond Bread Bakeryitems as per the sales of already running counters. According to marketing details there is continuous increase or growth in the number of customers from last few years so there is big scope for the firms to provide qualitative products to the increasing demand & establish it as successful firm.

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FINANCIAL FEASIBILITY

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A STATEMENT SHOWING COST OF PROJECT

SR. NO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. PARTICULAR Land Building Machinery Furniture & Fixtures Equipments Vehicles Preliminary expenses Pre-operative Expenses Working Capital Reserves for contingency TOTAL COST AMOUNT (in Rs.) 1642800 2340000 879300 122100 362900 494000 56800 120500 138215 61565 6218180

MEANS OF FINANCE
NO. 1. 2. 3. PARTICULAR Partners capital (50%) Secured loans (50%) Reserve and surplus TOTAL AMOUNT 3047525 3109090 61565 6218180

Note: 1 Cost of Land

No. 1. 2. 3. Particular Basic Cost of Land 1% Commission of Agent Stamp duty @ 10% TOTAL Amount 1480000 14800 148000 1642800

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Note: 2 Cost of Construction

No 1. 2. 3. 4. 5. 6. 7. 8. 9. Particular Production area Storage area Administrative office Water room & wash room Finished goods storage Loading Dock Parking space Security cabin Open land TOTAL Area(in sq. feet) 1813 300 375 244 300 168 150 56 194 3600 Amount 1313950 230500 321750 174600 237500 109700 52500 27400 102600 2340000

Note: 3 Machinery
No. 1 3 4 5 6 7 8 9 10 11 12 Particular Quantity Deck oven 1 Dough mixer 3 Dough molder 2 Sugar grinder 1 Packing machine 2 Toast slicer/bread slicer 2 Freezer 2 Mixer 1 Rolling racks 6 Trays 100 Stainless steel utensils/tools/equipment knives TOTAL Price 264000 46500 42350 35000 47650 38000 16400 3600 7500 200 Amount 264000 139500 84700 35000 95300 76000 32800 3600 45000 20000 83400 879300

Note: 4 Cost of Furniture

No. 1 2 3 4 5 6 7 Particular Sofa Set Revolved Chairs Comfort Chairs Office desk Office Cupboard Cabinet Working table Quantity 2 4 8 3 1 1 1
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Price 10400 1500 950 3000 8000 11300 9000

Amount 20800 6000 7600 9000 8000 11300 9000

8 9 10 11 12 13

Dustbin Air Conditioner Lights Fans Exhaust Fans Others TOTAL

4 1 50 10 4

100 25000 40 1200 1500

400 25000 2000 12000 6000 5000 122100

Note: 5 Cost Of equipments

No. 1 2 3 4 Particular Computer Telephone instruments Fire extinguisher equipment Generator TOTAL Quantity 3 2 3 1 Price 23900 600 5000 25000 Amount 71700 1200 15000 275000 362900

Note: 6 Cost Of Vehicle

No. 1 Particular Tempo TOTAL Quantity 2 Price 247000 Amount 494000 494000

Note: 7 Preliminary Exp.

No. 1 2 3. Particular Licence Fees Registration Fees (1%) Partnership deed TOTAL Amt. 35000 14800 7000 56800

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Note: 8 Pre-operatives Exp.

No. 1 2 Particular Market Survey Exp. Connection Charges 1) A.E.C. (Three phase) 2) Electricity connection charges 3) Plumbing 4) Telephone charges 5) Gas pipe line charges TOTAL Amount 2500 48000 18500 9000 2500 40000 120500

ESTIMATED COST SHEET

Particular Opening Stock of R.M. Add:- Purchases Less:- Cl. Stock of R.M. Cost Of R.M. Consumed Add:Direct Labour Bonus Prime Cost Add:Factory O.H. Total Factory Cost Add:Office O.H. Cost of Production Add:- Opening stock of FG Less:- Closing Stock of FG Cost of Sales Add:- Selling & Distribution Exp Cost of goods sold Add:- Profit TOTAL SALES 1st Year 0 4540510 30270 4510240 264000 22000 4796240 1146895 5722135 345230 6067365 25870 6041495 811390 6852885 908115 7761000

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ESTIMATED TRADINGAND PROFIT & LOSS A/C

Particulars INCOME:Cash Sales Credit Sales Total Sales Income Closing Stock of FG Less:- Opening Stock of FG Total Income Raw Material Consumed Direct Labour& Bonus Factory Cost Administrative Cost 1st Year 7114250 646750 7761000 25870 -----7786870 4510240 286000 781000 290000

Selling & Distribution Cost Preliminary Expenses Written Off

613790

35460

Interest on Partners' Capital Total Expenditure Gross Profit (PBDIT) Less:- Depreciation PBIT Interest - Long Term Loan @ 11% PBT Tax Paid @ 30% PAT
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182852 6699342 1087528 618725 468803

342000 126803 38041 88762

PROJECTED BALANCE SHEET

Particulars

Year 1 SOURCE OF FUNDS

Owners Funds Reserve & Surplus Bank Loan TOTAL SOURCE OF FUND APPLICATION OF FUNDS Fixed Assets Land Building Less: Depreciation Machinery Less: Depreciation Furniture Less: Depreciation Vehicle Less: Depreciation Computer Less: Depreciation Other equipment
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3136287 61565 2487272 5685124

1642800 2340000 234000 2106000 879300 131895 747405 122100 12210 109890 494000 197600 296400 71700 43020 28680 291200

TOTAL FIXED ASSETS CURRENT ASSETS, LOANS AND ADVANCE Inventory Raw Material Finished Goods Sundry Debtors Cash & Bank Balance TOTAL CURRENT ASSETS LESS : CURRENT LIABILITIES AND PROVISION Creditors Deferred Wages TOTAL CURRENT LIABILITY NET CURRENT ASSETS Miscellaneous Expenditure (To the extent not written off) TOTAL APPLICATION OF FUNDS

5222375

30270 25870 546750 307583 910473

567564 22000 589564

320909

141840

5685124

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CASH FLOW STATEMENT

Particular 1st year CASH FLOW FROM OPERATING ACTIVITIES PAT 88762 Interest 524852 Tax Provision 38041 Depreciation 618725 Preliminary Expenses 35460 CHANGES IN WORKING CAPITAL (13326) Tax Paid (38041) Net Cash Flow From Operating Activities 1254473 CASH FLOW FROM INVESTMENT ACTIVITIES Purchase of Assets (5841100) Preliminary Activities (177300) Net Cash Flow From Investing Activities (6018400) CASH FLOW FROM FINANCIAL ACTIVITIES Capital 3109090 Term Loan Taken 3109090 Repayment of Term Loan (621818) Interest on Loan (342000) Interest on Capital (182852) Net Cash Flow From Financial Activities 5071510 Total 307583 Add:- Opening Balance 0 Closing Balance 307583

WORKING CAPITAL
No. 1. A. B. C. Particular Current Assets Raw material requirement W.I.P requirement Finished Goods requirement
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Amount 30270 -----25870

Debtors Requirement

546750

D. 2. A. B.

Cash Balance Total Current Assets Current Liabilities Creditors Deferred Wages Total Current Liabilities TOTAL WORKING CAPITAL

124889 727779 567564 22000 589564 138215

RATIO ANALYSIS
PARTICULARS PROFITABILITY RATIO Net profit ratio (%) (Net profit/sales)100 Operating ratio (%) (PBIT/sales)*100 Cash profit ratio (%) [(PAT+depreciation)/sales]*100 EFFICIENCY RATIO Fixed assets turnover ratio Sales/fixed assets Total asset turnover ratio (Sales)/(total assets-misc.exp.) SOLVANCY RATIO Proprietor's ratio (%) Proprietor's fund/total asset-misc.exp*100 COVERAGE RATIO Interest coverage ratio
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1st year

1.14 6.04 9.12

1.49 1.27

52.14

PBIT/interest on debt LIQUIDITY RATIO Current ratio Current asset/current liabilities

1.37

1.54

CAPITAL BUDGETING
YE AR DEPREC IATION PRE. EXP. CF AT DISCOU NTING P V OF CASH FLOW DISCOU NTING P V OF CASH FLOW CUM CFAT

PAT

FACTO R 11% 1st Year 88 76 2 3546 0 742 947

FACTO R 1% 7429 47

618725

0.901

669395

0.990

735518

NET PRESENT VALUE

Particular Total Discounted Cash Inflow Less Total Cash Outflow NPV Amount 3904609 6218180 (2313571)

PROFITABILITY INDEX
Particular Total Cash Inflow Divide Total Cash Outflow P.I Amount 3904609 6218180 0.6279

INTERNAL RATE OF RETURN

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In case of IRR we require two NPV i.e. one negative and one positive at two different discounting factor. Hence in our project we have taken in to consideration two discounting factor i.e. 1 and 11% discount level and at both the levels NPV is negative so it is not feasible within the scope of five years.

ESTIMATED BREAK EVEN ANALYSIS

Particular Total Income Less : Variable Cost Direct Material Direct Labour Electricity Charges Repairs Maintenance Power and Fuel Commission on sales Total Variable Cost Contribution Less : Fixed Cost Salary & Wages Depreciation Insurance Telephone & Internet Stationery & Postage Advertisement interest on Partner's Capital Interest on Loan Preliminary Exp. Total Fixed Cost Profit PV Ratio =Contribution/Sales BES=Fixed cost/PV ratio (In Rupees) 1st Year 7786870 45,10,240 286000 311000 166330 180000 175800 56,29,370 2157500 767000 618725 35160 26000 5000 18500 182852 342000 35460 2030697 126803 27.71%

7328390

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ASSUMPTIONS
The number of working days is 25 in a month leading to a total of 300 days in a year. The registration charges and stamp duty for land is assumed at 1% and 10% respectively. Reserves for contingency is taken at 1% of the cost of project. The rates for insurance premium are: ITEM Machinery Building Vehicle RATE 1.5% 0.2% 3.5%

Repairs and maintenance is assumed at following rates throughout the project: ITEM Machinery Building RATE 1% 0.1%

Bank loan is taken at 11% rate of interest. Interest on partners capital is 6%. The number of utility workers varies throughout the project. YEAR First year Second year Third year Fourth year Fifth year
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NUMBER OF WORKERS 5 5 10 10 13

 An accountant is recruited from the second year. Depreciation is calculated as per Reducing balance method i.e. W.D.V Depreciation rate are taken as per Income Tax Act, 1961, for partnership firms. ITEM Machinery Building Computer Vehicle Furniture RATE 15% 10% 60% 40% 10%

Preliminary expenses are written off over a period of 5 years Telephone expenses, electricity charges and power expenses vary throughout the project. Their increase or decrease is not fixed at a certain rate. Closing stock of raw material is kept at 2 days on the total purchase. Closing stock of finished goods is kept at 1 day on total sales.

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CONCLUSION
We would finally like to conclude the project with a great feeling of having gained enormous knowledge about Beyond Bread Bakery industry. First of all we are thankful to our faculty members who gave us such a wonderful opportunity to learn about the practical aspects of knowledge. By conducting an extensive research on all the aspects of establishing a Beyond Bread Bakery, we conclude that the project is not feasible as per capital budgeting techniques. While making the project we learnt how to communicate or deal with people and how to maintain contacts with them. We saw all the marketing factors and were able to understand more about it because of seeing them practically. It has been said that practical knowledge is more important than theoretical knowledge. Lastly we are obliged to our co-ordinates who helped us from the beginning to the end for giving us an excellent experience of present scenario of market. Whatever we learnt from market research will definitely help in enhancing our academic career and come up as an efficient manager.

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BIBLIOGRAPHY
Marketing Management - A South Asian Perspective 13th edition - Philip Kotler - Kevin Lane Keller - Abraham Koshy - Mithileshwar Jha Brochures given by the dealers

WEBOGRAPHY
www.Beyond Bread Bakerybazaar.com www.wikipedia.org www.justdial.com www.fao.org www.blog.franchiseindia.com

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