biskitta (pak) - marketing project

7/31/2019 Biskitta (PAK) - Marketing Project

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Startup Business Plan and new product launch

Ciit Sahiwal1

1. INTRODUCTION

Business Plan for a Startup Business

KING FOODS INDUSTRY Pvt. Ltd.

134-BIV Small Industry,

Sahiwal, Punjab,

Pakistan.

ZIP Code 57000

Telephone: +92-40-4240667

Fax: +92-40-4240667

E-Mail: [email protected]


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2. EXECUTIVE SUMMARYPlanning is a process that never ends for a business. It is extremely important in

the early stages of any new venture when the entrepreneur will need to prepare a

preliminary business plan. The business plan is a written document prepared by the

entrepreneur that describes all the relevant internal and external elements and strategies

for starting a new venture. It is an integration of functional plans such as marketing,

operations, finance, manufacturing, sales and human resources. As students of MBA we

have also created a business plan regarding biscuit industry.

Biskitto is a brand of KING FOODS Industry, in the partnership of four persons.

Its a newly established business which will start its operations from Jan 1st 2012. The

plan came to our mind because in Pakistan only old and traditional flavour biscuits are

available which being too low quality. Some local companies are manufacturing the

biscuits but they are not able to maintain the quality as well. The main product of the firm

will be biscuits named as Biskitto which is presented in three flavor; honey milk, salty

and black pepper.

Currently in Pakistan there is high trend of eating biscuits and cookies; however

the trend is continuously rising especially in the rural areas. This gives us a hope and

helps us to be optimistic. We can suppose that if our product is properly advertised and

awareness is created among the people, our firm will have a bright future. We will have

to adopt a marketing strategy which will not only make our product known to the

customers but also make them realize the importance and value of cookies and biscuits.

In this business plan, we start from introduction of biscuit sector and its future

outlook. Continental Biscuits Limited is one of the major competitors of this particular

sector. So its provide advantage to keep eye on its landmark strategies.

Description of our industry like its values, vision and mission statement can be

explain the reason that why we are here to start our business venture. Further our product

profile, its attributes and its brief specification also added. In production plan we explain

the production process, structure of production system like plant and machinery


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description and suppliers name are presented. Operational processes, flow of raw material

and all the daily activities are explained in this business plan as well.

In marketing plan chapter, all the marketing strategies like pricing, distribution,

promotions along with its budget and estimating future sales of our business are briefly

included. Our target customers would be the generation of 10 to 40 years of age without

any discrimination of the gender. The customers of big cities would be targeted belonging

to the upper and middle class. Biskitto is a consumer product so we will sell directly to

the retailers as initially business will operate on small scale. For distribution purpose own

vehicles would be purchased.

The overall supervision will be carried by the owners of the firm, however to

monitor the work of the employees effectively different managers are hired. Initially

three departments are established; production, marketing and finance. One manager is

hired for each department who would be held responsible for the performance of the

department. To avoid risk, the product is launched in the cities of Sahiwal Division. Our

plant is not running on full capacity however it has the capacity to fulfill the production

needs within different cities of Pakistan.

Without finance and investment our business will not be run on regular basis. So

the importance of funds and its circulation can be managed in every business plan. Thats

why financial strategies are adopted to make our business a profitable one. Projected

financial statements and its analysis are also added in this business plan.

Because of our endless efforts we are confident to achieve our vision and mission

as well as sales targets. We hope that this venture not only help us in future study patterns

but also beneficial in creating and developing our own business.


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3. BISCUIT INDUSTRY ANALYSISBiscuit Market:

Perhaps one of the most underrated, least talked about and low thrill industry, thebiscuit business has been making waves for the last few years. The biscuit market in

Pakistan currently has a number of players but is led largely by two main companies, one

of which CBL the manufacturers and marketers of the LU brand in Pakistan. Currently

the biscuit market stands at a staggering Rs. 10 billion and its growing potential has

attracted a number of companies with thousands of small-scale manufacturers functioning

along with other in the organized, large-scale sector.

Biscuits eating habit had been inculcated into the Pakistani frame work with

sipping of tea. The biscuit, a natural complement during evening tea or in large

receptions and parties has been a necessity at least in the upper income tier. The lower

tier though not as heavy in consumption could not abstain as well. The industry as

expected started growing at a fast pace. This led to the sprouting of the unbranded

neighborhood bakeries that made small quantities of large variety of irresistible snacks.

Market Forecast:

Following are the different factors that are analysis before we started our business

plan. They are the reasons behind our entrance in this biscuits industry.

Particulars Detail

Population growth rate 1.59% 2010est.

Total Industry production 1,75,000 tons (Rs. 10 billion)

Industry growth rate 23%

Market share of competitors 37% (CBL) & 30% (EBM)

Export production 10,000 tons ($ 1.5 million)

Consumption per person (per annum) 1.1 kg 2009est.

Following regulation and standards HACCP, GMP, ISO


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Future Outlook of Industry:

Food is the one of the most basic physiological needs of human beings. As we are

familiar with different food items like burgers, chips, breads and the most common item

is biscuit. So the current situation of food industry is rapidly growing. In biscuit industry,there are a lot of products are available in markets having different flavors like butter,

cream flavor, chocolate, zeera etc.

Now the basic question arise that what are the flavors that are not currently

provided in biscuit items. So we are here to fulfill that need. In future, this industry surely

has growth opportunities also have wide range of patterns that are currently uncovered.

Faster domestic changes in countrys economy, if we need any future change we

will do. It might be change in our marketing strategy or pricing and whatever the

requirement of the time.

Competitors Analysis:

In Pakistan with the increasing trends of cookies, there are many competitors that

are offering many biscuits brands, these companies are;

Continental Biscuits Limited English Biscuits Manufacturer Bisconni

But the CBL is our major competitor so we briefly analysis its history and others

business strategies.

ContinentalBiscuits Limited:

Company History:

Incorporated in 1984, the success story of LU in Pakistan began with the initiative

of Hassan Ali Khan (the founder of Continental Biscuits), who signed a joint venture

agreement with Generale Biscuits, the global manufacturers of the LU range, which was


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subsequently acquired by the Danone Group. CBL thus started its' operations in the

country since September 1986 with an initial strength of 200 employees.

The company first introduced its' innovative brands - TUC, Prince and Candi

which proved to be an instant success. With global merger of Generale Biscuit and the

Danone Group, a more comprehensive range of products and technical know-how

became available to CBL.

Corporate Overview:

Continental Biscuits Limited (CBL) was founded in 1984 following a Joint

Venture between the family of Hassan Ali Khan and the Group Danone, the French food

giants. In the year 2007 Danone sold their biscuits category to Kraft Foods of USA.

Today the company has a joint venture with Kraft Foods with a shareholding of 50.5%

and 49.5% respectively.

For more than two decades CBL is engaged in the manufacturing and marketing

of the brand LU. They have an array of products which are pre-eminent in the branded

biscuit business both in Pakistan and abroad. Their unrivalled portfolio of brands has

been meeting consumer needs for well over two decades and includes such favorites as

TUC, Candi, Prince and Tiger. They produce some of the best known crackers, cream

variants, plain and ingredient-based biscuits. Their manufacturing location based in

Sukhur is a centre of excellence which provides employment to 2200 people in the

region. Their marketing, sales, finance, commercial, IT and the human resources

functions are located in the head office in Karachi employing a total of 180 employees.

As a part of the leading FMCG their head office has close links both with the Regional

Offices of Kraft in UAE and their manufacturing plant in Sukkur.


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ContinentalBiscuits Products:

Biscuit name Biscuit packing Biscuit style

50-50

Bakeri

Candi

Gala

Prince

Tiger

Tuc

Wheatable

Zeera Plus


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Market Segmentation:

The market has been segmented primarily into adults and kids with further

segmentations in terms of taste profiles/Lifestyles and hence.

Loyalty in the category though medium to high has a high level of conjunctional

usage within households. Hence segmentation becomes more difficult in the true sense

with a two sets of presumably different audiences behaving in a similar way. Biscuits

traditionally have been positioned a in between meals snack with 80% consumption

coming from in home usage. Though strong innovations have come in to the industry

none of the big players have tried to move into new segments and or positioning.

Advertising and marketing in the industry has surpassed all other benchmarks in

the previous years with serious investments in brand building. Over Rs. 0.5 bn is

estimated to be electronic media spending in 2009 with a total marketing spending of no

less Rs. 1.0 bn; this has grown at estimated 25% per annum over the last few years.

However, the clarity in positioning and communication routes still fair below

international standards (reference India). We still strongly focus on the emotional, jingle

based, in home consumption family slice of life moments communications.

The prediction of the industry in next five years is of buoyant Rs. 35 bn with 4 to 5

key players (the remaining being edged out) with good margins and portfolio meeting

international quality and product standards.

Category products

Soft & Sweet Plain Sooper, Bakeri, Gala, Bravo, Treat

Cream Filling Prince, Rio, Cocomo, Jam Hearts

Salty Snacks TUC, Saltish

Indulgent/Sweet Candi, Chocolate Chip

Plain Glucose Munna, Gluco, Tiger

Ingredient Based Party, Zeera Plus

Healthy Wheat Slices, Wheatable


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4. OUR INDUSTRY DESCRIPTIONThe name of our firm is HATZ FOODS Industry Pvt. Ltd. that manufactures

biscuits and cookies. Our firm is the emerging biscuit manufacturing industry in Sahiwal

region. To continue to thrive as a business over the next ten years and beyond, we must

look ahead, understand the trends and forces that will shape our business in the future and

move swiftly to prepare for what's to come. We must get ready for tomorrow today.

Vision:

To provide a quality, cheap and state of the art products to

customers that not only satisfies their needs but also leads them

to superior.

Our vision serves as the framework for our Roadmap and guides every aspect of

our business by describing what we need to accomplish in order to continue achieving

sustainable, quality growth.

Mission:

To become premier biscuit manufacturing industry that focused on

constantly and categorically designing superior and convenient

products through contribution of ideas, enrichment the community.

We strive for honesty, fairness and integrity.

Values:

Excellence Integrity Passion Teamwork Commitment Proactive


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Industry Logo:

Product Profile:

Our product is a unique flavored also stylish, trendy and of high strength and

unique design, we are having flexible manufacturing facilities to produce biscuits as per

customer specification and needs. Our main product is Biskitto that is divided in three

flavors;

Biscuit name Biscuit packing Biscuit style

BiskittoHoney Milk

BiskittoSalty

BiskittoBlack Pepper

Competitive Advantage:

Major competitive advantage is our reasonable pricing along with best quality.

Secondly highly advertisement strategy at the local and national level will also help us to

gain a competitive advantage.


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Product Specifications:

We offer premium quality concentrates made entirely with natural ingredients that

are rich in Vitamins and energy. We used pure wheat flour, hydrogenated vegetable oil,

natural sugar, fresh honey, pure milk, invert syrup, salt, fresh eggs, natural black paper

and food color-caramel. Biskitto has the same energy and quality value as the standard

one does. Raw material is being purchased from selected reputed suppliers. The

packaging of the final goods is also considered.

Features and Benefits:

Biskitto may boost performance during working by activating the brain, removinguntimely food needs because it contains those natural and fresh ingredients thatare required after hard tasks like honey and pure milk.

We all know that when we work out, it's important to eat something. Sometimewe may not be so clear on is what exactly we should eat when we have no time.

So there is a need to fulfill it by providing Biskitto with a slogan HAR PAL

TASTE ZINDAGI KA.

Ordinary butter and milk biscuits, of course, are the classic choice. But with storeshelves everywhere full of biscuits, cookies of various flavored, what's an

exerciser to do?

Experts say it all depends on your taste -- as well as the length and intensity ofyour workouts. Here's a look at how the various biscuits measure up.


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5. PRODUCTION PLANProduction is a process of converting (In-put) raw material into (Out-put) finished

goods or services. Its like a back bone in any manufacturing organization. All the raw

material which is used in the production process is approved by the quality control

department. These materials should be according to the standards developed and fixed by

the quality assurance department. If in any case the material does not match with the

standards has a right to return it to the supplier.

Physical Plant:

The plant location for the manufacturing of Biskitto is at Small Industrial State,

Sahiwal.

Distance from Lahore is 178 kms.

Distance from Multan is 180 kms.

Size of land= 1800 Sq ft.

Approximate cost of land= Rs 22, 50,000 (Rs. 1250/ Sq Ft).

Approximate construction cost= Rs 10, 00,000.

Location Advantages:

Reasonable cost of land. Infrastructure facilities. Transportation facilities. Near to target market. Easy availability of skilled and unskilled labor. Availability of power


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Plant Machineries and Equipment:

Biscuit making plant have been designed to produce biscuits of various sizes and

shapes whether its cream or simple. Equipped with electric oven, biscuit dyes, cooling

system, stacker and several other accessories, our biscuit plant can easily produce varied

range of biscuits. Some of the features of our plant are as follows:

Easy usage

Low production cost Minimum wastage Long lasting Easy operation

Automatic Roller Machine

Number of machine= 1.

Cost of machine = Rs 40,000/-Size of machine= 6 x 8 x 6 (in feet).

Production capacity= 40,000 units/hr

Biscuit Plant Machine


Cost of machine = Rs 26,00,000/-

Size of machine= 12 x 16 x 5 (in

feet).

Production capacity= 50,000 units/ shift

(8 hrs).

Utilized capacity = 40,000 units/ shift


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Screen Printing Machine


Cost of each machine= Rs 22,000/- for

1 machine.

Size of machine= 4 x6 x 3 (in feet).

Production capacity = 20000 wrappers

per shift (8 hrs).

(Single machine)

Production Process:


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Suppliers:

The supplier plays an important role for supplying the raw materials on time, at

reasonable cost and at high quality. If the supplier fails then production of biscuits

becomes in danger so the industry have 3 suppliers to avoid the risk of falling short ofraw materials.

Name of Supplier---Premier Flour Mills Pvt. LtdA/341 Shadaab Colony,

Arifwala Road near By Pass, Sahiwal, Punjab, Pakistan.

Contact No: 092-40-xxxxxxx

E-mail: [email protected]

Name of Supplier---Ittifaq Honey House,582 Fish Market, Pakpatan Bazaar,

Sahiwal.

Phone No: +92-40-xxxxxxx

Name of Supplier---Mehboob Traders,659/A2 High Street, near Saddar Bazaar Chowk,

Sahiwal, Punjab, Pakistan.

Contact No: +92-40-xxxxxxx


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6. OPERATIONAL PLANFirm operational plan explain the daily operations of the business, its location,

equipment, people, processes, and surrounding environment.

Quality Control Department:

A system for ensuring the maintenance of proper standards in manufactured

goods, especially by periodic random inspection is known as quality control. Its used to

fulfill and verify requirements of quality.

Quality control is the basic organizational objective for Biskitto production.

Quality check is made from zero level to final products. For this purpose samples are

taken from the production to check the quality. This sampling is done after each an hour

or half an hour. These samples are tested according to the standards. Different lab test are

used to verify the quality standards.

In order to maintain the high quality the plant has a well equipped lab. Laboratory

is sufficient to measure the standards and to test mixture of different flavours. The well

equipped lab enables the smooth flow of production process.

Location:

We have purchased land and make a building in Small Industrial State, Sahiwal.

The building is located 3 Km Far From main the city of Sahiwal. Plant and machinery are

installed in it. All administrative departments and warehouse are in it. The building has

enough space for our operational activities. Due to present condition of the power system

of Pakistan we will have to arrange an alternative source of power like generator because

there are frequent break downs of power now a days in Pakistan which would severely

affect the production process. The use of alternative source of energy will be very

expensive and it will reduce our profit margin.

The location of the factory is very important for the suppliers and distributors.

The building hired by our firm is easily reachable by the suppliers. The factory has a lot

of parking area available.


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LegalEnvironment:

As such there are no special legal requirements to start up such a small business

like a partnership between to persons. We didnt find any requirements before starting

our operation anyways there are certain requirements we will have to fulfill after starting

our operational activities like we will have to produce biscuit and cookies according to

the standards established by the departments of health and environments.

Credit Policies:

For any business to run effectively credit selling or credit purchasing is very

important. There are very few businesses which can effectively be run without dealing in

credit. As our firm is in the introductory stage so we will have to sell on credit in order toenter into the market. Credit itself is not bad if proper credit policy is established and the

danger of bad debts is minimized.

We will make sales on credit for approximately 30 days. After 40 days if the debt

still remains unpaid we will remind the customer by giving him a phone call. After 55

days a letter is written to the debtor for the payment of the debt. After 75 days we will

contact our attorney to deliver a notice.

Flow of Raw Material:

Raw material can be transformed into finish goods by using many flows of

operations. Firstly if we make Biskitto Honey Milk, all required ingredients are put into

mixture machine. Then after mixing these ingredients its goes into oven machine, where

it bakes at 180 C. then its cut into roll shaped and packed. Then moved into warehouse

and in last distributed.

The flow chart is;


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7. MARKETING PLANWith Biskitto we would first target the big cities of Sahiwal Division like District

Sahiwal, Okara, Pakpattan, Arifwala and Chichawattni. Our plant location would be the

best place between city and rural areas and towns, which is a very big advantage for us

because our majority of customers reside in city area and around the city.

The current demand of the product in three cities is estimated around 40lakhs/year

and is expected to go high because the customers becoming more aware from Biskitto

and the effective advertisement strategies has been helping Biskitto to grow and strongly

compete with others products. Fashion and lifestyle of the customers are also changing

has been an important factor for the growth of Biskitto.

Consumer acceptance and brand recognition are the major barriers for us to enter

in the market. We are new in this industry we need to first build trust, develop

relationship with suppliers, develop our brand and win customer loyalty. Biskitto quality

is as good as our competitors but its price differentiates from others products, we operate

at low margin to build market share excellent network of transport help us to reach

customers at right time, at right place with right product.

We are ready to provide the higher credit than the existing supplier initially. We

are committed to excellent quality of high strength and flawless products. The key to

success would be excellent service, quality products at a reasonable price and sales force

capabilities.

Marketing Strategy

Marketing objective:Within three years we would like to expand our business to rest of the big cities of

Punjab and other provinces and will become important domestic player in terms of

market share. In the end of 5th year of our business we will try our level best to gain the

maximum market share of cookies industry and would go for backward integration.


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Target market:Our customers would be at supermarkets, mini marts, departmental stores, and

other retail outlets etc. Our target market is three cities in Sahiwal Division and we are

focusing primarily on Sahiwal and Okara but there are also plan for other cities and towntoo.

Price Strategies:Price may not be the only competitive factor but in our business plan it will

become the major competitive factor. Along price another major factor affecting the mind

of the customer is quality. We have chosen a price that will give us the main competitive

advantage if we are able to maintain quality. Low pricing strategy we are using because

of large number of competitors in the market. We are using market penetration strategy

by keeping low price we would enter in to the market and expand our customer base and

increase our market share.

Distribution Channels:Distribution (or place) is one of the four elements of marketing mix. An

organization involved in the process of making a product or service available for use or

consumption by a consumer or business user.

As in the introductory stage we will make sales only in Sahiwal and Okara, so we

can distribute directly to the retailers. For this purpose we have rented three new vehicles

(Shahzore). We can take orders from different channels like web, mail order, phone calls,

through marketing staff. Most important source will be the marketing staff. Afterwards

when we will operate in different cities like Lahore, Faisalabad, Multan different

independent distributers will be hired.

Promotion:Our main purpose is to provide Biskitto for everyone at everywhere so first of all

we have to launch our product in the market targeting all classes. Our promotion policy

includes the following advertising mediums.


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Cable Adds---this is one of the very common, effective and as well as very inexpensive

way to market our product in the each city of Pakistan.

FM Radio---its almost the same marketing technique but more effective comparatively,

because most of people are living in rural areas so FM station provide benefit to reachthere with our product.

Pos Material---Pos material mean point of sale material this includes: posters and

stickers display in the stores and in different areas. Biskitto posters are displayed at

different retail stores for awareness purpose.

Billboards and Holdings---Biskitto is very much conscious about their billboards and

holdings. They have so many sites in different locations for their billboards and they try

to use in different times.

Other ---other promotional strategies are also considered like;

Discounts, Salesperson incentives, Friends network, Commission to sale person, credit to customers, catalogs, Word of mouth. PromotionalBudget:

Initially we have to advertise very heavily because the general perception of

Pakistani people is that the new comer in food industry is not provided quality products

but we are here to change this myth. Thats why we have to make a huge marketing

expenditure at the start i.e. Rs.10, 00,000 on the different promotional activities described

above. This amount will be treated as Deferred Cost which will be covered when the

business starts to run smoothly. After that we will have to spend Rs.300, 000 as ongoing

marketing expenditures. This cost will be charged to the income statement. This cost is

also to be included while calculating the cost of the product.


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Sales Forecast:

Product will be launched in January on a trial basis in Sahiwal. In March it will be

launched in Okara. To avoid any disaster huge investment will not be made initially.

After 1 year we will have to do market research again and any modifications needed in

the product would be made. Year 2011 sales are estimated as below on monthly basis;

Controls:

Marketing department:

1 sales manager will be responsible for the sale in three cities.

5 salesmen; 2 for Sahiwal, 2 for Okara, 1 for Pakpattan [first year].

Month Sales (Rs.)

January 240000

February 280000

March 400000

April 400000

May 460000

June 500000

July 440000

August 450000

September 460000

October 380000

November 360000

December 300000Total Sales 4670000

Sahiwal,

2335000

Okara,

1401000

Pakpattan,

934000

Sales Forecast

Sahiwal

Okara

Pakpattan


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8. MANAGEMENT AND ORGANIZATIONAs the business is in partnership so the business would be supervised primarily by

the owners. The hierarchy of the organization is as follows;

For each department a manager is hired to supervise the work of the relative

department. These managers are qualified in their fields. These managers are given

sufficient authorities and are held responsible for any malfunctioning.

The production staff is required to be well skilled because our product is directly

related to the health of the consumers. Any minor mistake can cause major loss which

will affect the reputation of the industry. So no compromise will be made on this.

The duty of the marketing staff is also very challenging because there is highly

competitive products are available in the market. The marketing staff should promote the

product effectively otherwise there is quite a chance for the failure of the business.

Secondly the marketing staff should make sure that our product is available in the market

and it should be properly displayed on the shops i.e. visible to the customers.

The finance department requires highly qualified staff to ensure that there is no

shortage of funds and the sales forecasting and achieving break even point are highly

considered. Availability of finance and purchasing raw material timely, collecting cash

from debtors, payment to creditors before due date; all leads to effectiveness of finance

department.


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Human Resource Plan:

The most important asset of Biskitto is the workforce alleged in it. In our

organization, the human asset will be considered as profit centre, not as cost centre.

Organization structure of the company shows the line of authority and the work function

in the concerned organization. The organization structure of the company is stated as

below. The employees in an organization are differentiated as;

Administration workforce Manufacturing workforce

Administrative workforce

The administrative workforce will include the management which includes the

people which are not involved in production of the product directly but they play

important role in generating desired profit for industry. The administrative workforce will

deal with the business policy and strategies required for the growth of the organization.

The projected administrative workforce and their payment are stated as below;

Name ofPosition

1st Year 2nd Year 3rd Year

No. of

Positions

Salary/

month

(Rs.)

No. of

Positions

Salary/

month

(Rs.)

No. of

Positions

Salary/

month

(Rs.)

FinanceManager

1 16000 1 18000 1 20000

ProductionManager

1 16000 1 18000 1 20000

SalesManager

1 16000 1 18000 1 20000

Clerk 1 9000 1 10000 1 12000

Salesman 4 8000 6 9000 8 10000

Guard 1 6000 1 6000 2 7000

Asst. SalesManager

1 15000


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Manufacturing workforce:

The manufacturing workforce will be the people who are actually working on the

machine and they are related to the plant level processes. They are the people who are

actually producing the desired product. It includes the plant-level employees and deals

with daily functions in industry.

The manufacturing workforce and their payment are stated as below;

Various HR related issues:

Bonus

The bonus will be given as per the guidelines provided by the law. As the industry

is started newly, the rate of bonus will be minimum, i.e. 8.33% of the annual income. The

rate of bonus will be revised in coming years depending on the net profit of the industry.

AttendanceEvery employee is bound to present in the company premises during the working

hours. The employee is supposed to make an entry before entering in and leaving

industry premises.

Annualleave with wagesEmployees are liable to annual leave with wages if they complete 240 days in a

calendar year. So the employee will be entitled for one leave for 20 days actual working.

Name ofPosition

1st Year 2n Year 3

r Year

No. of

Positions

Salary/

month

(Rs.)

No. of

Positions

Salary/

month

(Rs.)

No. of

Positions

Salary/

month

(Rs.)Supervisor 1 10000 1 11000 2 12500

Skilled 1 8000 2 9000 2 10000

Unskilled 5 6000 6 7000 8 8000

Helper 2 4000 2 5000 3 6000


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HolidaysEvery employee will be entitled for holiday for 15 days (including National

holidays). It will be decided as per the list of holidays provided by Punjab state.

Working hoursThe minimum hour of working is 8 hours per day. There will be six working days

per week. If required, the employee can do overtime but the total no of working hours

should not exceed than 14 hours in a day.

Safety and healthAll the machinery will be properly fenced with safeguard. The machines which

are involved are so sophisticated and safe, that it reduced the probability of accidents in

industry. The industry will also pay attention to the guidelines for the safety and health

provided by Ministry of Labor.

BenefitsDifferent benefits such as disability benefit, sickness benefit, dependant benefits

and group insurance etc. will be provided by the company under the law.

Record MaintenanceThe record will be maintained related to the workforce such as time keeping and

attendance leaves, and other issues as well.

Measures for motivating our employeesAs we stated before, the human workforce is the highly-ranked source for the

INDUSTRY. Hence we are paying proper attention to this area of concern. We will be

handling the issues related to employees with great care.

At initial stage, we are planning to schedule a small meeting every Saturday

before leaving the premises. The meeting would be conducted in presence of every

employee of the industry. This session will be for open discussion. Here, the workman


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can discuss any important point related to working condition and such issues. This will

help in enhancing the communication between different departments of the organization

and help to reduce disputes. Also we are bound to maintain proper working environment

for our employees. The employees will be provided by safe and excellent working

condition, so the desired productivity can be achieved.

Professional and Advisory Support:

The business is under the ownership of four persons so the final decision making

authority is with the four partners. The legal matters are supervised by our attorney.

The firm is not operating on a very large scale yet we have established a proper

accounting system. The accounts department records the daily transactions, manage

account receivable and payables. All the important decisions are being taken with the

advice of all the three managers whose knowledge provides guide lines for the important

decisions to be taken. All the cash involved in the business is kept in Bank Alfalah

Limited.


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9. ASSESSMENT OF RISKProduct Market Risk:

Customer loss Competition Increases Product Demand Decreases

Financial Risk:

Inflation Default on debt Exchange rate changes

Legal Risk:

Shareholder lawsuits Employee discrimination lawsuits

Tax Risk:

Income tax increases VAT and Excise tax increases

Input risk:

Input price increases Labor strikes Key employees leave Supplier fails

Operational Risk:

Machinery breakdown Product defect increases Inventory Obsolescence


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SWOT analysis:

Strength

Low cost with high quality

Dedicated & punctual staff

On time delivery

Favorable access todistribution networks

Weakness

Entry

Inexperience

High cost structure

Limited area of operation

Not able to enjoy economy ofscale

Opportunities

Scope of export

Large market

Changing of lifestyle &fashion

Threats

Large number of competitors

Threats of substitute product

New regulation

SWOT

Analysis


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10.FINANCIAL PLANAssumptions:

Inflation rate may vary between 14%-20%. Sales target will be achieved according market research and production capacity. Capital cost may vary but marginally.

Financial policies:

The rate of depreciation of fixed assets is 10% per annum Purchases will be purchased on 45 days credit. Sales will be made on one month credit. Raw material will be in stock for 1 month for 1st year and for 15 days from 2nd

year onwards

Finished goods will be in stock for 15 days. Extra cash will be invested in treasury bills and government bonds. Profit margin will be 6 % on cost of capital

Startup Expenses and Capitalization:

Start-up Requirements Cash needed (Rs.)

Plant and Machinery cost 26,84,000


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Stationery 20,000

Land 22,50,000

Construction Cost 10,00,000

Computers 40,000

Consultants 10,000Furniture 3,00,000

Brochures 20,000

Utility 20,000

Cash Required 30,00,000

Total Requirements 93,44,000

Capitalsources:

Particulars Amount (Rs.)

Partners Contributions

75,00,000

Bank Loans 25,00,000

Total 100,00,000

KING FOODS Industry Pvt. Ltd.

Projected Income Statement


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Projected Balance Sheet

For the year ended ..Amount (Rs.)

Sales 63,53,400

Less: cost of goods sold 30,76,560

Gross margin

32,76,840

Less marketing and adman. Expenses

marketing expense 10,00,000

Salaries 8,10,000

Depreciation 80,000

Electricity 2,25,000

Telephone 60,000

Interest 16,000

Packaging 1,50,000

Less Total expenses 23,41,000

Earning Before Tax 9,35,840Less Taxes @ 30% 2,80,752

Net Profit 6,55,088


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For the year ended ..Amount (Rs.)

Liabilities & OwnersEquities

Share Capital 75,00,000

Bank Loans

25,00,000

Sundry Creditors 5,68,000

Net profit 6,55,088

TotalEquity 112,23,088

Assets

Fixed Assets

Furniture 12,00,000

Land & building 30,50,000

Machinery 26,84,000

(Depreciation) (80,000)

Net Fixed Assets 58,54,000Current Assets

Cash 5,30,468

Closing Stock 12,45,088

Sundry Debtors 6,66,284

Investment (short term) 29,27,248

Totalcurrent assets 53,69,088

Total assets 112,23,088


Projected Cash Flow Statement

For the year ended ..


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Particulars Amount (Rs.)

Inflows

Share capital 75,00,000

Loan from Banks 25,00,000

Sales 63,53,400

Total Inflows 163,53,400

Outflows

Fixed assets 58,54,000

Current assets 29,11,372

Purchases 24,76,560

Direct expenses 6,72,000

Indirect expenses 23,41,000

Current liabilities 1,56,000

Total outflows (158,22,932)

Netcash inflows 5,30,468

BreakEven Analysis:

A break even analysis predicts the sales volume, at a given price, required to

recover total costs. In other words, its the sales level that is the dividing line between

operating at a loss and operating at a profit.

BEP in Units = Fixed Cost / (Selling Price Variable Cost)

= 16, 30,433 units

BEP in Rupees = BEP in Units Selling Price per Unit= 16, 30,433 x 3

= Rs. 48, 91,300

Break Even Point will be achieved in 9.8Months.Appendix


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Market research data Price lists from suppliers.

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biskitta (pak) - marketing project

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