business proposal - banana chips

UNIVERSITY OF SARGODHA

Department of Commerce

Entrepreneurship Business Proposal of

BANANA CRAZEE By

A Business Proposal by “Falcon Group” – Entrepreneurship

BANANA CRAZEE = A Product by “Frito’ Enterprisez” I

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Subject: Entrepreneurship

Course Instructor: Sir. Mohsin Altaf

Subject Credit Hours: 3 Hours

Following Students are the participants to prepare & finalize this

Feasibility Analysis…!

Ali Raza Sahni B.Com (HONS)

VIth Semester / REGULAR


BANANA CRAZEE = A Product by “Frito’ Enterprisez” II

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BEST REGARDS

TO

OUR PARENTS

WHO LOVE, AFFECTION & PRAYERS HAVE BEEN A

SOURCE OF INSPIRATION AND ENCOURAGEMENT

FOR US…!


BANANA CRAZEE = A Product by “Frito’ Enterprisez” III

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Table of Contents

Section No:

Section Page No:

01 Executive Summary 01

02 The Business 04

03 Management Team 08

04 Legal Company Structure 24

05 Ownership & Intellectual Property 26

06 Industry Analysis 29

07 Marketing Plan 33

08 Operational Plan 41

09 Financial Plan 46

10 Critical Risks Factors 54

11 Appendix 56


BANANA CRAZEE = A Product by “Frito’ Enterprisez” IV

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Acknowledgment

With the name of ALLAH who is the most beneficial & merciful and He enable us to complete this business proposal to overcome our semester requirement.

Then we thanks to our Entrepreneur Mr. Mohsin Altaf who guide us in very beautiful & nice way. The supervision of Sir Mohsin has provided us a lot of experience to get the view of actual market.

We are very thankful to Sir Mutee, Sir Haroon, Ma’m Imrana Asad, Sir Mubashar & all other honorable teachers who share their experience & knowledge with us to complete this project in very efficient manner.

In last, we are much respected for those students who provide us encouragement to complete this business feasibility report.

Ali Raza Sahni

Group Incharge

May 27th / 2011

Section – 01: Executive Summary

BANANA CRAZEE = A Product by “Frito’ Enterprisez” ~ 1 ~

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Section – 01:

Executive Summary

Our company “Frito‟ Enterprisez” will produce a unique and different product for the

market to change the trend of the people from vegetable snakes to fruit snakes. We will provide

specific unique products to our targeted customers for their maximum level of satisfaction. There is

no any firm who produce “Fruit Snacks” till now in our national market. We will offer these new

trended products at moderate prices for the customer benefit.

The Opportunity

Pakistani Market exports & demands fruits in huge quantity, but there is no any firm is

present at here for the manufacturing of „Fruit Snacks”. We will provide to him fruits in various

tastes, like apple, banana, orange, etc in roasted, snakes & chips form.

If we will proper launch this business, then we may be in condition to change the market

trends within the 10 years. If we will change the trend of the market then we will consider as

“Trend – Maker” for the Snacks Industry.

Competitive Advantage

There is huge gap is present in the market for the fruit snacks. We have no any direct

competitor at local & national competition till now. Our product will be unique in the market; we

will easily achieve economies of scale with the next 12 years who provide us least cost with

maximum profit. Following are our major indirect competitors in the snacks industry but all of them

producing vegetable snakes as:

Lays

Golden Chips

Smiths

Kolson

Super Crisps

Krincles

Pringles



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All of these firms are the heavy weights of the market and have the great influence on the

behavior of the market. All of these are our indirect or may be future competitor for us. Most of

these firms have a great market share, but not like Lays who is the leader in the Snacks Industry.

Target Market

If we offer this product in the market then our basic target market will be youngsters of

colleges & universities who enjoy these kinds of product. When we will get a successful response

then we launch this product of specific city where college or university exists. In our first attempt,

we will target three cities within the 7 months to the first launching.

In general sense, we have comprehensive market because every aged person has a

reasonable demand of the chips. If we will target maximum colleges & universities of the Punjab

within our first three years of launching then we will achieve a reasonable & stable place in the

Snacks Market.

Management Team

For the managerial affairs of Frito‟ Enterprisez, we have to choose best one management

personalities from the market who will supervise us. For the effective management, we have

following managerial posts as:

CEO/Chairman

Board of Directors

Finance Manager

Accountant

Marketing Manager

Production Manager

Quality Inspector

Coordinator

HR Manager

Asst. Cost Manager

Other Staff Members



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This will be our best try to choose well – experienced & well – qualified management team

in the larger interest of the business success. But our major focus is finance & marketing heads that

provide value & brand equity in the market. We will provide sufficient benefits to our employees

because we believe that firm‟s employees are our assets.

Financial Projections

According to the Snacks Industry, we are unable to demand a huge capital from the market.

But for the proper launching of business, the total required capital of business is Rs. 100 Millions.

According to our analysis we have to require 7 investors which will act as the owner of the “Frito‟

Enterprisez”. For the operations of firm, we will demand Rs. 50 Million as initial investment to

startup the business and Rs. 25 Million in IInd year & also Rs. 25 Million in IIIrd year.

For the return on investment, we plan a strategy as ROI Policy; we will provide maximum

return to our investor. We will distribute 3% to 14% return on the net profit to our 7 investors who

will act as the owner of our business. We will distribute return on investment in 2nd year to the

establishment of business. According to the ROI Policy, we will divide “Net Profit” of the firm

after taxation & other expenses among the whole investors.

After the achievement of the breakeven within 2.64 years (32 months), we will make huge

profit for our investors. The profit generation in this business is not difficult due to less cost on all

inputs of the production, especially raw material. We have 45% ratio of Gross Profit on the sale of

each unit with respect to their Sales Price.

Exit Strategy

Success is not always the fate of any business. For the exit strategy to our stakeholders, we

will apply following strategies as:

Sale of Business to any Heavy Weight of Snacks Industry with Product Formula

To merge “Frito‟ Enterprisez” with any other Industry related Firm

Bank – Raptly Slip to our all stakeholders

Section – 02: The Business (Description)


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Section – 02:

The Business - Description

Our Opportunity

Business is the name of profit earning through legal activities. The most important

parameter towards profit making is the presence of an opportunity gap in the market because

homogenous products have a great sense of competition as compared to heterogeneous.

For the Fruit Snakes, we have a great opportunity in the national market because there is no

any producer is present here who provide this trend to the people & earn sufficient revenue. The

international brand “Pringles” is present who provide caned banana chips at the limited level with

very high price.

Description of Business

We “Frito‟ Enterprisez” will facilitate to people by fruit

snakes in packets at the reasonable prices and obtain sufficient

value from them. Now, people enjoy their life with potato

chips, snakes, popcorns, chocolates, etc. but we will provide them

a concept of “Fruit Chips” or “Fruit Snakes” which will be better for

their health.

Our initial product will be “Banana Crazee – A Taste of

Nature” (banana chips) in the market to get an overall response of people towards Fruit Snakes.

There is no any direct competitor is present in the market but a lot of indirect competitors are also

present who are the price makers & trend changers.

The first mover advantage in the Snakes Industry goes to “Super Crisp” who was the king of

this industry for 25 – 30 years. Then 10 years ago, “Lays – A Product of Pepsi Co.” entered into the

market and replaced the “Super Crisp” into “Lays – French Cheese”. Due to huge network,

extensive promotional activities & international brand equity Super Crisp lost their market share to

Lays.



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We have a great threat of take over & market crash from Lays as multinational brand. If the

Lays want to tackle our product then 2 years time period minimum will be required due to their

policy matters. For any multinational brand, it is not easy to launch a new product in the specific

market within the few days or months because their strategies & policies recommended by their

higher authorities which is time consuming task.

Pakistan is a consumer market and our consumer is price conscious not quality or product

conscious. Frito‟ Enterprisez will provide our products at reasonable prices to capture the sufficient

value from our customers. We will consider as “First Mover Advantage” in the snakes industry

relevant to fruit snakes. There are so many broad chances towards the success of this product.

Vision Statement

“We want to satisfy our customers by the taste of nature”

Mission Statement

“We want to offer our dedicated and innovated products to customers for their

maximum satisfaction as our ultimate goal. We want the growth along with our customers,

staff, employees, suppliers and all other business associates by greater value”

Major Objectives

For the 15 – 20 years in the future, our firm “Frito‟ Enterprisez” will achieve following

major objectives from the target market as:

To known their brand as “Frito‟ Enterprisez” within the next 6 years at national level

To provide a quality product to consumer at reasonable price

To loyal the customers towards brand & capture brand equity from them

To consider that employees are our assets who provide us their services in honest way

To change the mind of people from vegetable snakes towards fruity snakes in the snakes

industry with in next 10 years

To attain at least 30% market share of snakes industry within the next 10 years

To compete in the market on quality behaviors, not on price strategies



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To earn minimum 30% profit on each unit from the day first

To establish their own national distribution network within next 12 – 15 years

To nationalize our firm at least 20 years to their existence

To maintain the harmonic relationships with their suppliers for the quality concerns

To provide a sufficient return to investor from our net profit

Competitive Advantage

We are offering a unique product to market with good quality,

excellent taste & at reasonable price which will attract to consumer.

We are fully free in this segment of the snakes industry till next two

years minimum. And two years is enough time to grasp the huge

market value. The major threat to our product is take over from

Lays, but it will be not easy for Lays. Because multinational

brands never want to lose their reputation in the host market through

negative propaganda towards other home product.

In the case of Lays threat, we have national slogan of “Be Pakistani, Buy Pakistani”, which

will provide us way to capture the market share. And, we are offering “Halaal Food” to market

under the Islamic Values. It is in our common observation that some years before, Lays had a blame

of “Pig Fatty Oil” in their chips, and Lays faced huge financial crises due to this unethical activity

in the Pakistan‟s Market. These will be ours strong bases to walk in the snakes industry.

Another competition strategy is also present that we will merge themselves into Super

Crisps. This merger will provide us low fixed cost, national distribution network, brand name of

Super Crisp, etc. due to this merger Super Crisp may will be again attain the huge market share like

in past.



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Current Status

Now, if we launch our product to 3 – 4 major cities of Pakistan which provide us the actual

behavior of our product towards people. Due to this limited launching strategy, we will prevent

ourselves from the huge loss which may occur in big launching. As the first mover in the fruity

snakes industry, may we will face various initial costs but all of these costs will be cover within

very small next period because our profitability on each unit is so much for the investor.

For the marketing concerns with respect to our competitors, we will promote our brand and

products by various promotional activities and extra benefits to distributors, retailers and also to

ultimate consumers. But it will be necessary for us to establish strong & solid distribution network

for the consumption of our product on each & every level.

Section – 03: Management Team


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Section – 03:

Management Team

For any organization, management is a first and last pyramid to handle the various

operations & matters of the organization. We, Frito‟ Enterprisez is familiar with this important

aspect of the business. For the managerial affairs we will choose best one management personalities

from the market who will supervise to our business. The well – trained & well – qualified staff of

the organization is the responsible for their success. On the other hand, loser‟s persons of the

management staff may responsible for the failure of the organization. For the effective

management, we have following managerial posts as:

CEO/Chairman

Board of Directors

Finance Manager

Accountant

Marketing Manager

Production Manager

Quality Inspector

Coordinator

HR Manager

Asst. Cost Manager

Salesperson

Other Staff Members



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CEO/Chairman

The CEO/Chairman of the organization is the top executive body who is the legal head of

the business. The CEO is the most powerful person in the organization by their powers &

authorities.

Eligibility Criteria:

We have to require:

A Male or Female, everyone is eligible without any kind of discrimination

Age of candidate must be minimum 37 years

A person with experience of 5 – 7 years in the Public Listed Company as Executive

Head

His qualification should be minimum M. Phil or PhD in the field of Economics,

Business & Commerce, Management, Marketing, & Finance

He should have NOC (Non – Objection Certificate) from previous organization where

he get experiences

He will be a appointed as CEO/Chairman by mutual concern of all members to board of

director

He will be work with us on skill – based partnership

His rate of return will be 10% when the firm will achieve their breakeven stage

From the day one to till breakeven achievement, his allowance will be Rs. 15,000

monthly

Responsibilities:

He will be responsible in organization to:

He will be the official head of the whole organization

Will be responsible for each & every affair of the business

Have a control on all employees of the business except all board of directors but not

Coordinator included in it, he will be under the order of CEO/Chairmen

He will entertain with full protocol from the entire workforce of the organization



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Board of Directors

There are total five members as Executive Bodies of the “Frito‟ Enterprisez” which ca lled

Board of Directors and these members will consists of:

CEO/Chairman

One Investor

One Banker

Coordinator

Advisor

All of the members to Board of Directors will entertain with specific amount from firm in

the sense of “Allowance” for their personal involvement in the firm‟s affairs.

CEO/Chairman: The head of the whole organization and work on skill – based partnership

from the business as neutral body for the organization. He will be the official head of the

whole organization & responsible for each & every activity of the firm.

Investor: A person except Banker who has at least 22% to the total investment will be

eligible for the member to board of directors.

Banker: A representative of Bank not Investor who has at least 12% to the total investment

will be eligible for the member to board of directors. This person will be act as the

representative of the specific bank.

Coordinator: The inside person from the organization who will be responsible for the

instructions & information‟s distribution towards the entire workforce of the organization.

Advisor: A person rather than investor or banker who has technical, legal & analytical skills

towards the business affairs with at least 3% to the total investment. This person will be act

as advisor for our organization in every activity of the business.



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Finance Manager

The post of “Finance Manager: or “Chief Financial Officer (CFO)” is the most important in

any organization because finance is the blood of the business and without it business never exists.


We have to require:



A person with experience of 3 – 5 years in the Public Listed Company

His qualification should be minimum M.Com or MBA (Finance)

His subject of specialization must be Finance with at least 80% marks

He should have strong grip on Finance & Accounting principles


he get experiences

Various kinds of appreciation certificates will also be preferable towards the job

The basic salary for this post will be Rs. 35,000

Responsibilities:


Manage all the financial matters

Act as the head of Finance Department

Provide us projected & forecasted data for future concerns

Provide us helps in investment plans

Tackle the investors & bankers

Have no any concern with other department

Provide briefing to board of directors regarding the financial position of the firm

Directly work under the instructions of coordinator



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Accountant

The “Accountant” or “Accounts Manager” is a person in the business who maintains all the

accounts (real & nominal) with the specific evidences as mentioned in the laws & regulations.


We have to require:


A person with no experience or fresh candidate is eligible

His qualification should be minimum 16 years in the field of commerce

His subject of specialization must be Accounting (not Finance) with at least 75% marks

He should have grip of handling the Accounting matters

He should have NOC (Non – Objection Certificate)

o For Experienced Candidate – from the organization where he get experiences

o For Fresh candidate – from their educational institute


He should have grip to utilize Quick Book, Peach Tree, etc


Responsibilities:


Manage all the accounts of the whole business which will specified in Frito‟z Newsletter

( a monthly published document by firm)

Act as the head of Accounts Department

Maintain all the records with specific evidence


Petty Cash Affairs will be present under this post




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Marketing Manager

The “Marketing Manager” of “Marketer” is another most important post in the organization

to plan & implement various strategies according to the market situation.


We have to require:

A Male with the age of minimum 35 years

A person with the minimum experience of 5 – 7 years in Marketing Department of any

prominent firm of Food Industry

He should have repute certification from three marketing weights

His qualification should be at least MBA (Marketing) with at least 65% marks

He should have strong grip on marketing & sales allocation


he get experiences



His commission of Rs. 0.25 on the sale of each unit will also be allocated

Responsibilities:


Act as the head of Marketing Department

Supervise to their salesman force & also responsible for their behavior

Fully free & isolate in making & implementing the marketing strategies under the

specific instructions from the board of directors & coordinator

Manage & achieve various sales target for profit generation towards the firm

The repeat sales or change in trends (fad) marketing behavior also under their shadow

Have no any concern with other department except Production at limited extent

Provide briefing to board of directors regarding the sales pattern in the market



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Production Manager

The “Production Manager” or “Manufacturing Supervisor” is a person in the business who

responsible for all the manufacturing or production concerns of the basic product or service. He

manage whole assembly line for efficient production process.


We have to require:



His qualification should be minimum 14 years in the field of commerce & business

He should have grip to handle various production affairs


For Experienced Candidate – from the organization where he get experiences

For Fresh candidate – from their educational institute


He should have ability to tackle the human resource


Responsibilities:


Act as the head of Production Department also Production Assembly Line

Maintain all the records of raw material & finish goods



Responsible for the labor affairs except their salaries/wages

Responsible for the raw material usage, finish stock warehousing & wastage during the

production process



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Quality Inspector

The “Quality Incharge” or “Quality Inspector” is the most important person in the

production process to verify the quality of the product or their design. We are quality conscious for

the customer satisfaction that why we have well – qualified quality inspector for the betterment of

our product.


We have to require:


A person with minimum experience of 2 – 3 years in any quality conscious food

industry

His qualification should be minimum MBA or M.Com with 70% marks at all

His subject of specialization must be TQM or OPM with at least 80% marks

He should have NOC (Non – Objection Certificate) form previous organization where

he get experiences


He should have grip to utilize various quality techniques


Responsibilities:


Act as the head of Quality Department

Inspects the quality pattern during the production process

Have no any concern with other department except Production will full extent

Choose suppliers under the specific instruction from top level management & also

responsible for the behavior of these suppliers

Responsible for any kind of defect in the product regarding the quality concern




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Coordinator

The “Coordinator” or “Vice Chairman” of the organization is the executive body who

controls all the affairs of the business & provides coordination among the various departments &

staff members in the larger interest of the firm.


We have to require:



A person with experience of 4 – 5 years in the Public Listed Organization as the

coordinator or acting coordinator

His qualification should be minimum MBA (HR), not any other is required


he get experiences


His behavior towards the organization should be multi – dimensional


He will be a appointed as Coordinator by mutual concern of all members to board of

director

He will be work with us on skill – based partnership



monthly

Responsibilities:


Responsible to monitor all the internal & external affairs of the organization

His behavior towards departments should be linen ant & positive



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To coordinate all the affairs of the business to each & every level with specific

limitations

Act as a “Supervisor” towards all the departments

Responsible to provide briefing to board of directors regarding the overall situation of

the business

Responsible to convey each & every information to their related person in written way

Directly work under the instructions of Chairman & Board of Directors

Legal Advisor

The “Legal Advisor” or “Attorney” of the business should be well – experienced & well –

capable person who tackle all the legal procedures which are mention by Govt. of Pakistan in their

various laws regarding the corporations & their affairs.


We have to require:



A person with experience of 3 – 5 years in the any law firm

His qualification should be minimum L.L.B. (HONS), not any other is required


he get experiences


He should have technical skills to manage the legal proceedings

He will be a appointed as Legal Advisor by mutual concern of all members to board of

director

He will invest in our business minimum 3% of the total investment

He will be work with us on skill – based partnership as well as invest – based

partnership



monthly



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Responsibilities:


Responsible to monitor all internal & external legal affairs of the organization

He will hire the law firm to help us to fulfilling various formalities of the business

organization

He will be responsible to convey each & every legal or lawful information to their

related person in written way

Directly work under the instructions of Chairman & Board of Directors

HR Manager

The “HR Manager” or “Human Resource Supervisor” is a person who will ma nage bottom

level management in all departments of the firm. For Example: Engineering Affairs, Warehousing,

Safe & Secure Storage of Stock, Production Line Errors, etc.


We have to require:


A person with experience of 5 – 7 years in any organization

His qualification should be minimum Intermediate with 75% marks


he get experiences


His ability of handle small matters of the business must be sharp & confidential

Person will be selected by the mutual concentration of Heads & Board of Directors




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Responsibilities:


Responsible to monitor & handle to tackle all the minor problems in the organization

He should maintain all the team work to work out in the organization

Directly work under the instructions of Coordinator & Board of Directors

He should have access to each & every department according to their work

Will be the supervisor of the bottom level management


Asst. Cost Manager

The “Assistant Cost Manager” or “Finance Coordinator” is a person in our organization who

will personally assist the Finance & Accounts Department.


We have to require:



His qualification should be minimum 16 years in the field of commerce

His subject of specialization must be Accounting or Finance with at least 60% marks

He should have grip of handling the Accounting & Financial Matters


For Experienced Candidate – from the organization where he get

experiences

For Fresh candidate – from their educational institute


He should have grip to utilize Quick Book, Peach Tree, etc

Person will be selected by the mutual concentration of Heads & Board of Directors




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Responsibilities:


Manage & Assist to Finance & Accounts Departments

Have concerns with all other department

Responsible to lose down the per unit cost with maximize profit for business


Salesperson

The asset of the organization is “Salesperson” or “Sales Promoter” who sale down the

product or service of the business in the market. This is most important person in the organization

who maintains the goodwill of organization in the market.


We have to require:


A person with the minimum experience of 3 – 5 years in Market of the Food Industry

He should have repute certification from one marketing weight

His qualification should be at least 14 years of commerce or business education

His subject of specialization must be Marketing with at least 75% marks

He should have strong grip on marketing & sales promotion activities


he get experiences


He should be the resident of the specific area where our product will be launch


His commission of Rs. 0.25 on the sale of each unit will also be allocated



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Responsibilities:


He should be responsible for the allocated tasks by the Marketing Department

He must be responsible for the goodwill of the firm in the market

He will directly work under the instructions of Marketing Manager

He have no any special permission to work with another organization of any kind

He should be the trail able for any fraudulent behavior in the market on the behalf of

organization

Key Professional Service Providers

We will allocate various firms & consultants to manage & monitor our business activities

with the concern of specific fees.

Business Consultant Agency: Any firm who will provide help to us in every activity of the

business according to our requirement. We will pay him on monthly basis and get their

suggestions & consultancy for the betterment of our business.

Audit Firm: Any firm who will conduct the audit on bi–annually basis and submit their

report to board of director as twice time in the year. This audit will be helpful for the

taxation department formalities & also provide an internal picture of our business regarding

the utilization of resources.

Law Firm: Any firm who act as “Attorney” for our business in each & every aspect in the

legal matters. All the legal procedures of the business will be the responsibility of this firm.

Whenever, our organization will face any kind of legal problem from any side this firm will

tackle this case.

Rules & Regulation for the Organization Structure

The official head of the organization will be CEO/Chairman

All the members of board of directors will under the CEO/Chairman

Any decision by board of directors will be base on majority except CEO/Chairman‟s vote

Any majority decision by board of directors must have one vote by investor or banker



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One Member One Vote, policy will be implemented in the whole organization at each &

every level

CEO have special authority to remove any head & other staff member anytime without any

mutual concentration with any other official on the behalf of some reason

For the meeting to board of directors, minimum three members should be present except

CEO/Chairman

For the meeting to heads of departments, minimum three members should be present except

Coordinator

The HR Manager will be appointed by the mutual concentration of all heads & board of

directors

The Business Consultant Agency, Law Firm & Audit Firm will be appointed by the majority

decision of the board of directors

The returns of investors & bankers will be determine by the Finance Department with the

concern of CEO/Chairman & Coordinator

The Coordinator will be the supervisor of all the departments & all heads will be under their

instructions directly or indirectly

All of the orders & information in the organization will circulate in the written &

confidential way for the record of each & every activity

The HR Manager & Production Manager will be responsible for the appointment of labor &

skills men for the manufacturing process

The bottom level staff of the entire organization will be under the shadow of HR Manager

Any kind of changes in organizational structure will be implemented by all the members to

board of directors & heads of departments

Any kind of special authorities & powers will be delegated to any staff member will be valid

by the instructions of board of directors

Any increment in the salaries & wages for the entire organization will be passed by the

board of directors & Finance Manager

Each & every person will be responsible towards their duties within the organization

without any kind of relaxation & nepotism



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Organizational Structure

Frito’ Enterprisez – Organizational Structure

CEO / Chairman

Investor Banker Coordinator Advisor

Business Consultant

HR Manager

Law Firm

Audit Firm

Finance

Manager

Marketing

Manager Production

Manager Accountant Quality Inspector

Asst. Cost

Manager

Complainant

Officer Salesperson

Labor +

Skillman

Section – 04: Legal Company Structure


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Section – 04:

Legal Company Structure

Our Firm – Frito’ Enterprisez

Our firm “Frito‟ Enterprisez” will be a “Private Limited Company” under the Companies

Ordinance, 1984. According to the law, a private limited company is an association of at least 2 but

may not exceed 50 members. This form of firm is restricted from the r ight of its members to

transfer their invested part within the company. It also prohibits to any invitation to the public to

subscribe their shares or debentures. It will be registered under the Companies Ordinance, 1984 and

corporate taxation law. All the members will entertain with the limited liability.

All the members especially investor & bankers join this organization under the Partnership

Act, 1932. Under this law, partnership is a voluntary association of two or more persons, who

contribute their money, property, time, skills knowledge, energy, ability & experience to carry on

business for the profit/loss sharing among each other. The partnership itself have no any legal

separate entity, all of members will partners under the head of some specific voluntary kind of firm,

which is registered by any law.

Legal Status of Frito’ Enterprisez

The legal structure of our firm “Frito‟ Enterprisez” will be a company as private business of

various investors, bankers & skilled based persons who invested their money, time, experience &

abilities on risk basis & demand high rate of returns against them. The investor with 35% to the

total investment & banker with 25% of the total investment will be the members to board of

directors without any kind of eligibility criteria. And, CEO/Chairman, Coordinator & Legal

Advisor will invest their skills & experiences with the specific selection criteria. Our firm has

skilled based investment & money investment portfolio at the time with the different rate of returns

on the total invested money & abilities.

Section – 04: Legal Company Structure


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In our partnership relationship, we have a lot of partnership deeds. All the partnership deeds

(agreements) should be disclosed in the first or statutory meeting of the board of directors. The

partnership deeds regarding CEO/Chairman, Coordinator & Legal Advisor will be discussed in this

meeting.

At the 5th of each month, firm will issue a special kind of document “Frito‟z Newsletter” – a

letter which will describes the firm news, policies, rules, regulations, strategies, plans, goals,

objectives & achievements of the whole organization. The duties & responsibilities of each staff

member will be mention in it which may increase or decrease on monthly basis. The confidential

matters will never to be disclosing in this document. This is a public document for our inner

structure of Frito‟ Enterprisez.

Frito’ Enterprisez

Head Office Address:

Frito‟ Enterprisez,

73 / A, Century Plaza,

Near Centre Point (Mini Golf),

Lahore, Punjab – 35000

Assembly Line:

Frito‟ Production Unit,

Near Falcon Motor,

Lahore Road, Sargodha

Section – 05: Ownership & Intellectual Property


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Section – 05:

Ownership / Intellectual Property

Total Capital Requirement

Our firm “Frito‟ Enterprisez” will be work under the status of “Private Limited Company”

who has various partners which may invest their money and skills. The ownership title of this

organization will be goes to various personalities who invested their money & experiences with us.

But the general partners & owner of our business will be our investors & bankers who provide us

huge money to startup this business. Following are the investors & bankers are willing to invest

their money in our business as:

Investor # A – Rs. 26 Million – 26% to the total investment

Investor # B – Rs. 20 Million – 20% to the total investment

Investor # C – Rs. 15 Million – 15% to the total investment

Banker # A – Rs. 13 Million – 13% to the total investment

Banker # B – Rs. 11 Million – 11% to the total investment

Banker # C – Rs. 7 Million – 7% to the total investment

Legal Advisor – Rs. 4 Million – 4% to the total investment

Total Investment Rs. 100 Million 100% to the total investment

For the investment requirement, we will prefer to get total amount investments from our

kind investors within the time period of 2 – 3 years to launching a business. At initially, we will

demand a lame – some amount to fulfill our initial costs & other heavy expenses which are consider

as basic requirement for any startup unit.

The amount of Rs. 100 Million is not enough for 7 investors to contribute in any business

when the 95% chances of success are present with heavy profit generation after the achievement of

breakeven stage of the business.



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Owners of the Business

According to the Investment Portfolio, the Investor A & Banker A will be included in the

members to Board of Directors due to their highest investment. All other owners of the Frito‟

Enterprisez will be categorized according to their part of investment in the total invested amount.

Any owner has no any legal role to operate the business except members to Board of Directors.

When any kind of special decision will take in the interest of the business, then “Owner‟s

Conference” – (all specified above owners) will call & get their point of views about specific

matter. In routine matters, no any owner has their influence on management & board of directors.

In the case of liquidation of firm, each & every owner will be responsible for their invested

amount in the Frito‟ Enterprisez according to their share in the total investment, as mentioned

above. The return on investments is applicable on the “Net Profit” of the firm, not another margin.

Owner Preference %age Investment Return on

Investment (%)

Investor # A 26% 14%

Investor # B 20% 12%

Banker # A 15% 14%

Investor # C 13% 08%

Banker # B 11% 12%

Banker # C 7% 10%

Legal Advisor 4% 3%

CEO/Chairman Skilled Base 10%

Coordinator Skilled Base 7%

Company Savings (for future

concerns) 10%

Total 100% + Skills 100%



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Intellectual Property

Our firm, Frito‟ Enterprisez have no

legal status till now, but we will register

themselves as soon as possible in the first

aspect of the business.

When we will register ourselves, then

we will use this monogram as the identification logo of the firm. On each & every product or

service offer by us will have the mono. This monogram is the “Trade Mark” for us as the legal

status of the firm. It will be our first preference that we will show this trade mark on every offer

product in the market.

After the launching of product, we will give legal status to our production process as patent.

In general sense, we will register our assembly line with the name of “Frito‟ Assembly Line”. The

purpose to get legal status for our production process is to eliminate the competitor role towards the

copy us. Our production process is the basic secret for our firm.

Section – 06: Industry Analysis


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Section – 06:

Industry Analysis

Industry Description

People demand the product according to their intuitions & preferences. We know that the 3 rd

World Countries are very habitual to adopt the Western Culture. Likewise, Pakistan is also in line

with those countries which have big potential do exist for investment in the Snacks Industry in

Pakistan as the Demand or Growth rate is very high. Annual Growth Rate of Snacks Industry is

estimated at the rate of 20 % - 30 % per annum.

Most of the children, teenagers and young people are the target market of the product and

we have the experience that the eating habits of the target market is rapidly changing and they like

to have snacks all the time. Further potato and corn snacks are labeled as a meal replacement and

being a light fast food is becoming popular. The life style is improving and going to be changed and

also because of satellite invasion the demand is bound to register a considerable boost.

Now, people are enjoying with the potatoes & corn chips in so many flavor but we want to

change the trend of nation from vegetable to fruit chips which are better for health. The opportunity

for our new trend product is present in the market. We want to get benefit from this gap and make a

profit.

Industry Size

In common practice, there are

four phases present in the market

regarding the Product Life Cycle,

Introduction, Growth, Maturity & Decline.

Every sector of the economy is based on this

principle. The size of our industry is so large

because each kind of person likes snacks. There are

few firms who fulfill this demand ay national level. We have a golden opportunity to enter in this

market with some heavy investment & take over the trend.



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The demand of the present market is met by the mix of Branded and Unbranded Chips

available in the Market. There is 60% of the population which is Brand Loyal. However remaining

40% of the Un-branded Market can be attracted through heavy Advertisement Campaign.

On the basis of data collected and present survey of the market, current total market is

estimated at 2,000 Tons of Chips which is segregated as follows:

Industry Attraction

The Snacks Industry of Pakistan is on growing phase and has a lot of potential to absorb

firms easily. The window of opportunity is open for us with the high growth rate. The Annual

Growth Rate of Snacks Industry is estimated at the rate of 20 % - 30 % per annum.

Under the export prospects for the next decade are very promising given the sustained and

continued expansion of the Fast Food Industry abroad. Further Tariff cuts under Trade Agreements

are anticipated. Low per Capita consumption of Fries in the overseas market is a strong indication

of future demand. These upcoming symptoms have a great potential to make huge profit.

Profit Potential

Profit generation is the basic parameter to execute the business. The sales trend of crisps and

snacks is increased by 10% between 2000 and 2005 to at their peak at £ 2,386 million. A decline of

3.5% in 2004, however, took retail sales to £ 2,303 million due to the implementation of taxation

structure of retailers.

According to our analysis, we are producing unique product which will provide us a huge

profit after the achievement of our breakeven with in maximum 4 years to their execution. The

behavior of Pakistan‟s Market towards the unique products is so attractive. So, there are so many

chances to the generation of profit from this sector.

Segments Share % Quantity (Tons)

Branded 60 1,200

Unbranded 40 800

Total 100 2,000



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Target Market

Targeting a market is a critical factor in the marketing strategy of a

company. The target market should be in accordance with the company‟s goals

and objectives. The target market for Snacks Industry is comprehensive by

nature because the children, teenagers and young people are the target for our

industry. Home, rather than school, is the most popular destination for eating

crisps and savory snacks, with seven in ten children (70%) consuming them at

home, against around half (48%) who eat such snacks at school.

According to our marketing strategy, we will target first of all to colleges & universities of

major three cities. After the possible response from these cities we will take next step towards other

cities. After one to spot launching, we will start our work for the establishment of national

distribution network. We will establish this network within next 10 – 12 years, which include each

& every street of the Pakistan.

Competitive Position

The competitor analysis for Snacks Industry of Pakistan regarding marketing affairs is easily

understandable by this table, which provide segmented percentages as,

Super Crisp – Super Crisp is the market leader with maximum market share of almost near

40%. Now they are in big threat due to lays. The age segment for Super Crisp ranges from 5 – 20.

Golden Chips – The sale price of golden chips is Rs. 5. They are targeting to Sec B & C.

Kolson Chips – Kolson successful products include Slanty. They have chips but they are not

successful and usually not regularly available.

Pringles – Pringles is imported from other countries by P&G. They are hygienic, best

quality crisps and they are quite expensive. Pringles are targeting to Sec A1 & Sec A2.



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Chips Manufacturing Plants Currently in Operation

Following are the major and leading Producers of Potato Chips (Crisps) in Pakistan. The

Crisps are being produced by direct Potato Cuts/slices and also by Extrusion Process. However,

there is not a single Frozen French-Fries Producing Company / facility in Pakistan.

We know that all of these firms are operating in the vegetables snacks not in fruit snacks

like us. It will be a competitive advantage for us to produced a unique product for the market and

generate heavy profits. All of our competitors are strong but in condition to change the trend of the

market due to their brand reorganization at the national or international level.

Sr. No: COMPANY NAME BRAND

NAME

1- Standard Foods (Pvt.) Limited Golden Chips

2- Tripple EM (Pvt.) Limited Super Crisps

3- Kohinoor Smith (Pvt.) Limited Smiths

4- Consolidate Kolson

5- Trading Enterprises Krincles

Section – 07: Marketing Plan


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Section – 07:

Marketing Plan

We are producing “Consumer Goods” which are purchased by ultimate user from retailer

outlets for their own personal usage. Within the head of consumer goods, we are producing

“Convenience Goods” – most of the time these goods are purchased in small quantit ies and have a

low unit value. The profit margin on convenience goods is not so much as like other kinds of goods.

According to the term Marketing Research – the systematic design, collection, analysis &

reporting of data relevant to a specific marketing situation facing an organization. We have

conducted marketing research through questionnaires in our target market.

Survey Research – the most widely used method for primary

data collection, is the approach best suited for gathering descriptive

information. A company that wants to know about people‟s

knowledge, attitudes, preferences or buying behavior can often find

out by asking them directly. The questionnaire of our marketing

research is attached in the Appendix.

Product Feasibility & Strategy

Our product “Banana Crazee”, the modified form of “Banana Chips” in the national market

of Snacks Industry will may change the trend of people from vegetable snacks towards the fruit

snacks. That‟s why the slogan of our product is “Banana Crazee – the taste of nature”.

In our initial launching, we are introducing two products of “Banana Crazee” with different

tastes to understand the behavior of the market & customer towards the fruit snacks as,

BANANA CRAZEE – Saltiest

BANANA CRAZEE – Chill Up

Banana Crazee – Saltiest: The salty flavor of snacks especially for kids & health

conscious people who avoid from the high fats & sugar. The neutralized iodized (0.025%) salt will

be added in this product for the taste & ultimate flavor.



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Banana Crazee – Chill Up: The chilly flavors of snacks for young people especially

for girls who demand something chill in their food. Various kinds of masala‟s and magnesium salts

will be added in this product for the taste.

We are introducing two packing for both flavors as,

Mini – Pack Banana Crazee = 30 Grams with Rs. 20/= for consumer

Midi – Pack Banana Crazee = 65 Grams with Rs. 35/= for consumer

* RP = Retail Price – price for ultimate consumer

* The Firm‟s Profit + Distribution Channels Profit = Retail Price (RP)

The product analysis regarding their ingredients will be shown on the product design

(prototype) which is attached in the Appendix. The analysis of ingredients is determined by the

Forensic Department of Pakistan. The report of Forensic Department provides a satisfaction to our

product regarding the reverse engineering matters of our product, which are impossible due to their

unique kinds of tastes & items in it.

According to our price analysis, which is shown on next pages, we are in condition to

generate a great profit from each unit sold down in the market. The Trade Price (firm‟s price for

their customers) is shown in this table as:

* TP = Trade Price – firm‟s price for their customers

* Master Packing = Cartons

Product Taste Weight RP (For Mini – Pack) RP (For Midi – Pack)

Banana Crazee Saltiest 30 Grams Rs. 20/= Rs. 35/=

Banana Crazee Chill Up 65 Grams Rs. 20/= Rs. 35/=

Product Weights / Quantity TP of Each Unit Master

Packing

TP for Master

Pack

Banana Crazee –

Saltiest

30 Grams / Min i –

Pack Rs. 17/= 48 pieces Rs. 816/=

Banana Crazee –

Chill Up

30 Grams / Min i –


Banana Crazee –

Saltiest

65 Grams / Mid i –


Banana Crazee –

Chill Up

65 Grams / Mid i –




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* Mini Master Packing = (Rs. 17 × 48 pieces) = Rs. 816/=

* Midi Master Packing = (Rs. 29 × 24 pieces) = Rs. 696/=

Marketing Strategies

We are discussing four marketing strategies which will may valid for next 15 years of the

business life. All of these strategies are based on the time period to launching the product in any

city or part of the Pakistan.

Initial Launching Marketing Strategy

Phase Marketing Strategy

General Marketing Strategy

National Marketing Strategy (Appendix)

All of these strategies have following terms which are used by “Frito‟ Enterprisez” for their

marketing plans & promotions as:

Discount Package Free Scheme

Extra – Benefits Allowance

Discount Package – under this sales promotional package, we are giving various kinds of discounts

to distributors, retailers & also consumers for attract their attention towards us. The discount range

in this package is 2% - 15% according to time & situation.

Free Scheme – under this sales promotional package, we are giving free units (in master packing)

on the master packing sales of cartons in big quantity. This scheme is valid only for distributors &

retailers. The range of master packing is varies from 1 carton – 7 cartons.

Extra – Benefits Allowance – under this promotional package, we are offering so many kinds of

various things which will provide benefits to retailers & consumers not to distributors. Following

things are giving under this package as:

Product Display Stands

Publicity & Advertisement Material

Display Allowances

Discount Cards to Loyal Customers

Extra – Discount to Anyone (0.5% - 3.0%)



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Initial Launching Marketing Strategy

When we want to launch our product in any area of the Pakistan, then this initial strategy for

marketing & promotion will be implement for the penetration into the market as soon as possible.

Before 10 days to launching the product in any area, we will start our promotional activity which

includes, pamphlets, Banners, FM Adz, Cable Adz and Sign Boards Flexes. The quantity for this

promotional budget will vary with respect to the specific area & our promotional budget. All of this

promotional campaign will manage by Marketing Manager.

When we launch our product into the market, then we will never target to the distribution

network of this specific area, we will directly target to retailers & consumers who provide us value.

This penetration strategy wills breakdown the monopoly of distributor regarding our product. We

will introduce our product at initial level to colleges & universities of the specific area. The

canteens of these institutions will provide us demand in students & also in local market.

Under the Discount Package, we will provide 15% discount to our retailer or canteen owner

on retail price (RP) of each master packing for either (Mini- or Midi Pack). Under the Free Scheme,

we will offer him 2 Free Carton with 10 Mini – Pack Cartons & 1 Free Carton with 10 Midi – Pack

Cartons. It is the fully choice of retailer or canteen owner either he select Discount Package or Free

Scheme but not both.

Under the Extra – Benefits Allowance, we will provide him 1 stand on the net purchase of 3

cartons of anyone master packing. If he wants to purchase more than 3 cartons, then we will

provide him 2 stands on the net purchase of 5 cartons. At least one stands is compulsory for each

retailer or canteen owner. We will provide one banner to each retailer and 100 pamphlets without

any kind of cost for their counter display on each delivery.

If we conduct any “Spot Activity” for consumers then we will provide him 40% discount on

the retail price. This spot activity must be sponsor by Frito‟ Enterprisez may on the behalf of some

retailer or any other entity. For the conduction of spot activity, our Marketing Manager will manage

whole campaign.

This strategy will be valid till after 30 days to the introduction of the product in the market.

After 30 days, we will move towards the next scheme.



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Phase Marketing Strategy

After the 30 days to the launching of product, we will implement the “Phase Marketing

Strategy”. Under this strategy, we will provide 10% discount to each retailer on retail price (RP)

under the activity of Discount Package. If he want to enjoy with the Free Scheme, then 2 Free

Cartoons with 10 Mini – Pack Cartons & 1 Free Carton with 10 Midi – Pack Cartoons. This scheme

is same as like in previous strategy. Like previous strategy, it will be the fully choice of retailer or

canteen owner either he select Discount Package or Free Scheme but not both.

Under the Extra – Benefits Allowance, we will provide him 1 stand on the net or credit

purchase of 3 cartons of anyone master packing. If he wants to purchase more than 5 cartons, then

we will provide him their demanded number of stands. At least one stands is compulsory for each

retailer or canteen owner. We will provide one banner to each retailer and 100 pamphlets as

promotional activity to their counter display on each & every delivery.

If we conduct any “Spot Activity” under the Phase Marketing Strategy for consumers then

we will provide him 40% discount on the retail price. This spot activity must be sponsor by Frito‟

Enterprisez may on the behalf of some retailer or any other entity. For the conduction of spot

activity, our Marketing Manager will manage whole campaign.

This strategy will be valid till the allocation & deal of any distributor in the specific area.

Under our projection analysis, we will get no more time to the allocation of any distributor for our

product. According to Market Analysis, we demand just maximum 5 months for the execution of

any distribution in specific area, where we already has launched our product.

General Marketing Strategy

When we have our own distributor in the specific area where we have already launched our

product, then we will implement our “General marketing Strategy”. This strategy is just valid for

Distribution Network, if in any case the distribution network will may not establish in the specific

area within 5 months to launching of our product. Then we will continue the previous strategy till

we establish our sole in this area.



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Under this Discount Package, we will provide Rs. 1.5/= on Mini – Pack & Rs. 3/= on Midi –

Pack, on each unit without any kind of carriage expenses. And, distributor will provide Rs. 1.5/= on

Mini – Pack & Rs. 3/= on Midi – Pack, on each unit to retailer, all carriage expenses of distributor

will less from this profit margin of retailer. Except from this profit margin on each unit, we will

provide 1 Free Cartoons with 10 Mini – Pack Cartons & 1 Free Carton with 15 Midi – Pack

Cartoons under Free Scheme.

Under the Extra – Benefits Allowance, we will offer following this to each distributor as our

authorized dealer in the specific area, which jurisdiction is allocated by our Marketing Manager.

All the expenses of carriage till the delivery in the hands of the distributor

He have ability to demand sufficient stands according to their requirement

He have ability to demand enough promotional material as their requirement

All the advertisement expenses will be bear by the firm

Firm will allocate a sufficient balance for the retailers as their Display Allowance which

given on the behalf of the distributor

The Usage of Display Allowance is in the hands of distributor with specific evidence

The Marketing Manager have ability to give 0.5% to 3.0% extra discount to any

distributor on the behalf of their huge delivery & repeat sales behavior

If we conduct any “Spot Activity” under the General Marketing Strategy for consumers then

we will provide him 35% discount on the retail price. This spot activity must be sponsor by Frito‟

Enterprisez just on the behalf of our distributor who gain the profit 5% of the total sales in this spot

activity as their profit margin. For the conduction of spot activity, our Marketing Manager will

manage whole campaign.

This strategy will be valid for the implementation of new strategy for any distributor.



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Pricing Strategies

We knew that price competition is the core element in the free economy. For setting prices

of products various kinds of supply & demand forces shows their behavior in the general market.

The companies are not freely independent to charge their p rices from customers according to their

demand.

We allocate our prices or customers & consumers on the following basis according to this

given below pattern as:

* Total Variable Cost = represents the cost of product which firm bear to produce a product which will be discussed in the Ap pendix

* Carriage Expenses = all the expenses which firm will bear to transport the product in the hands of distributor or retailer

* Selling Commission = Rs. 0.50 or each unit will be equally divided into the Marketing Manager & specific Salesperson who so ld this unit

* Fixed Reserve Cost = a reserve which may used for any affair of the firm may be for the recovery of Fixed Cost by the instr uctions of

CEO/Chairman

* Firm Profit = This is the Gross Profit Margin of the firm which will used to pay various kinds of expenses & fixed costs to the operations

of the Frito‟ Enterprisez

* Trade Price = a firm price for their customers but not for their retailers

* Distributor Margin = a gross profit for the distributor to operate their business

* Retailer Margin = a gross profit for the retailer which may includes the carriage expenses from distributor

* Retail Price = a price for the ultimate consumer who purchase our product from the retailer elsewhere in the Pakistan

Price / Cost For Min i – Pack (in rupees) For Mid i – Pack (in rupees)

Total Variable Cost 7.35 14.15

Carriage Expenses 0.50 0.50

Selling Commission 0.50 0.50

Total Cost Per Unit 8.35 15.15

Fixed Cost Reserve 1.00 1.00

Firm Profit 7.65 12.85

Trade Price (TP) 17/= 29/=

Distributor Margin 1.50 3.00

Retailer Margin 1.50 3.00

Retail Price (RP) Rs. 20/= Rs. 35/=

Weights (in grams) 30 Grams 65 Grams



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Promotional Strategies

Most of the promotional strategies are discussed in the product feasibility & strategy but for

more common practice, we also discuss various modes of promotional activities which choose by

our firm for themselves under the limitations of their budget.

We will start our various promotional activities since 10 days before to the initial launching

of our product in the specific area market. In our first 3 years, we will use following promotional

modes to convey our message towards the general public as:

Pamphlets

Banners

Voucher Billing Pads

Sign Board Flexes

FM Band Advertisement

Local Cable Advertisement

After the 3 years to the launching of our product, when we feel we are in better condition to

handle our brand value then we will target National Media for our promotional advertisements. We

will target PTV, Geo Network, Express Network and Duniya Network in possible time. Our first

preference for the national advertisement will be the prime time.

For the day first to next 5 years, we will provide following promotional activities &

customers behaviors activities for the loyalty of our brands as:

Toll Free Number on backside to product – design

E – Mail ID + Web link on the product – design

Complaint Officer in the Head Office, Lahore

Garments with labeled promotional adz (as t – shirts, bands, etc)

Shopping Bags

Calendars

Key Chains, etc.

Section – 08: Operational Plan


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Section – 08:

Operational Plan

The concept of production refers to the transformation of inputs or resources into outputs of

goods & services. The Inputs are the resources which used in the production of goods & services.

There are two kinds of inputs as Fixed Inputs & Variable Inputs. The term Fixed Inputs refers that

inputs or resources which cannot change be readily changed during the time period under

consideration, except perhaps at very great expenses. And, the Variable Inputs refers that inputs or

resources which can easily varied and on very short notice.

The concept of Short – Rum Time Period & Long – Run Time period is mostly used in the

production concept. For the Short – Rum Time Period, we refers the time period during which at

least one input act as fixed. And for the Long – Run Time Period, we refers the time period when

all the inputs are variables.

Method of Production

We have proper Assembly Line (A/L) for our production setup with the name of “Frito‟

Assembly Line” (A/L) which has control on each & every operation of the production. Our

Assembly Line has following characteristics as:

This Line provide 1250,000 units production per year

Daily 9 Hours working time

This Production Capacity will may be enhance by the induction of more plants

Quality Output

Efficient use of inputs or resources

Low or no wastage

Minimum ratio of Natural Variation in the Final Output

Labor & Machinery Oriented Assembly Line

Have complete control on cost behavior of product cost

No Extra – Qualified & Experienced Labor is required



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For the operational practice of the Frito‟ Assembly Line, we required a huge capital &

manpower but all of these costs will be no more when we get huge production with very low cost

from this production process with minimum ratio of variation.

Production Capacity

The Production Analysis for first 5 years with relevant plant & machinery as shown in

Appendix, our Frito‟ A/L has the following production capacity to fulfill the demand of the market

in very easy & convenient way.

Availability of Labor

In the “Frito‟ Assembly Line” (A/L) for the Production Capacity of 1250,000 units

annually, we have to require just 4 skilled persons without any kind of skilled labor who manage

the whole Assembly Line, our production process is so simple. There is no any need to get

experienced & extra – skilled labor for the production operations. We required most skilled people

for the plant operations in following departments as:

Sterilizing Department

Frying Department

Masala‟s Containers

Packing to Packets Department

Production Capacity Analysis

Particulars

Produced Units

Per Hour Production - 440

Daily Production (440 × 9 hrs) 3,960

Monthly Production (3,960 × 26 days) 102,960

Bi - Annually Production (102,960 × 6 months) 617,760

Annually Production (102,960 × 12 months) 1,235,520

(with limitations)

Annually Production (Estimated) 1,250,000



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For the Frito‟ Assembly Line, we are offering wages on daily basis for the labor and salary

+ wages for the four Skillman. We are providing sufficient pays to our labor for their benefits on

daily basis to raise their living standards.

Labor Wages & Salaries Portfolio

We are providing some extra ratio wages on daily basis to or labor. It is just because we

want to get work from them at their maximum level. The working hours are 9 for our production

day. The A/L working timing will be fixed for each & every worker & employee as:

From 8:00 am to 1:00 pm

1 Hour Breakdown

From 2:00 pm to 6:00 pm

All kind of labor affairs will be discussed in the “Frito‟s Newsletter” according to the

specific time & situation. The Incharge for the Assembly Line (A/L) will be Production Manager &

HR Manager who also responsible for each & every aspect of the A/L.

For the proper working on the Assembly Line (A/L) following staff will be present on this

deck in the working timing as:

Labor Salary (monthly) Wage (daily) Working Hours

Worker - N/A - Rs. 250/= 9 Hours

Skillman Rs. 5000/= Rs. 150/= 9 Hours

Labor Quantity Work Arena

Production Manager 1 Incharge of A/L

Quality Inspector 1 Quaintly Checker

HR Manager 1 Incharge for Human Resource

Asst. HR Manager 1 Assistant for Hr Manager

Clerical Staff 1 For A/C based matters

Skillman 4 Skill – Person for A/L

Worker 15 Labor for A/L

Worker 5 Helper for A/L

Bottom Line Management 2 (Day & Night) Watch Man

Bottom Line Management 1 Sweeper

Bottom Line Management 1 Helper



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Production Assembly Line

Raw Material Stock Banana Cutting Deptt. Sterilizing Deptt.

Drying Deptt.

Frying Deptt.

Evaporating Deptt.

Stock Outside to Firm Masala’s Containers

- Saltiest

- Chill Up

Packing to Packets

Company Stock Warehouse

Master Packing

All the plants in this

Assembly Line have the

Production Capacity of

1250,000 units per year



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Quality Control

Frito‟ Enterprisez is “Quality Conscious” organization, for the proper allocation of quality

affairs in our production process we are hiring a Food Quality Inspector for our own organizational

quality affairs. He will be responsible for the quality techniques which may implement on the

production operations. It is our first preference to produce minimum variation output for our

customer. For the quality enhancement program, we follow those techniques which are less costly

& greater beneficial for us.

Quality Statement

“The quality is an integral part of our commitment to world – class products. Our aim is to

provide zero defected and zero variation products to our consumers”

For the Quality Enhancement Program in the Frito‟ Enterprisez, we will use the Statistical

Process Control (SPC). According to SPC, we will use a statistical method for separating variations

from the special cause to natural cause, for the elimination of the special cause variations and

minimizing the natural cause variations on the continual basis improvements in the production

process.

Section – 09: Financial Plan


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Section – 09:

Financial Plan & Analysis

Finance is the most important aspect of the business regardless to their qualified product or

service. Without it the startup & survival of the business is impossible. The invention, discovery &

execution of idea into practical are not as so much important as the Finance is important to

commercialize anything. According to the Howard & Upton,

“Finance may be defined as that administrative area or set of administrative functions in an

organization which relate to the objectives as satisfactory as possible”

For the proper execution of Frito‟ Enterprisez, Finance is the most important aspect to

startup the firm and also has working capital for next 3 – 4 years to operate various matters of the

business. Our total capital requirement is Rs. 225 Million with 90% return on Net Profit of the Firm

to all Stakeholders. And the remaining 10% will be act as the “Saving Reserve” for the Frito‟

Enterprisez.

Total Capital Requirement

Our firm “Frito‟ Enterprisez” will be work under the status of “Private Limited Company”

who has various partners which may invest their money and skills. The ownership title of this

organization will be goes to various personalities who invested their money & experiences with us.

But the general partners & owner of our business will be our investors & bankers who provide us

huge money to startup this business. Following are the investors & bankers are willing to invest

their money in our business as:

- Investor # A – Rs. 26 Million – 26% to the total investment

- Investor # B – Rs. 20 Million – 20% to the total investment

- Investor # C – Rs. 15 Million – 15% to the total investment

- Banker # A – Rs. 13 Million – 13% to the total investment

- Banker # B – Rs. 11 Million – 11% to the total investment

- Banker # C – Rs. 7 Million – 7% to the total investment

- Legal Advisor – Rs. 4 Million – 4% to the total investment

Total Investment Rs. 100 Million 100% to the total investment



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Initial Capital Requirement

For the proper operations of the Frito‟ Enterprisez, we will demand capital in various 5

stages, means we will tackle the capital from all investors & bankers within 5 years to startup the

business. And, within these 5 years we will also achieve our breakeven point and provide some

return to our investors.

All the details for the utilization of this funding is given below here, but also see the

Appendix for the proper understanding each & every transaction.

First Year Requirement (Initial Costs)

Particulars Amt (in Rupees)

Plant & Equipments 2,030,000

Office Equipments + Furniture 1,163,000

Other Fixed Costs 3,445,000

Annual Salaries Reserves 7,872,000

Wages Reserve (Rs. 146,000 × 12) 1,752,000

Promotional Budget 5,000,000

Operating Expenses Reserves 5,532,000

Raw Material Reserve 18,000,000

Working Capital 4,000,000

Preliminary Expenses 1,206,000

Total Ist Year Capital Requirement 50,000,000



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Return on Investment (ROI) Policy

According to our Return on Investment (ROI) Policy, we will give following returns to all

investors on the “Net Profit” of the firm, by deducting all the expenses & costs of the business.

These returns are calculated on the investment basis of each investor/banker.

According to our project data, we will give possible returns to our investors in the following

manner as:

Projected Rate of Returns to Investors (figures in “000”)

Particular Rate of

Return Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8

Year -

9

Year

- 10

Investor # A 14% - 200 608 913 1,578 1,847 3,054 4,136 5,924 6,064

Investor # B 12% - 200 522 782 1,352 1,583 2,617 3,545 5,078 5,198

Investor # C 8% - 200 313 521 902 1,056 1,745 2,363 3,385 3,465

Banker # A 14% - 200 608 913 1,578 1,847 3,054 4,136 5,924 6,064

Banker # B 12% - 200 522 782 1,352 1,583 2,617 3,545 5,078 5,198

Banker # C 10% - 200 435 652 1,127 1,320 2,181 2,954 4,232 4,332

Legal Advisor 3% - 200 130 196 338 396 654 886 1,269 1,299

CEO/Chairman 10% - 200 435 652 1,127 1,320 2,181 2,954 4,232 4,332

Coordinator 7% - 200 304 456 789 924 1,527 2,068 2,962 3,032

Savings 10% - 200 435 652 1,127 1,320 2,181 2,954 4,232 4,332

Owner Preference %age Investment Return on Investment

(%)

Investor # A 26% 14%

Investor # B 20% 12%

Banker # A 15% 14%

Investor # C 13% 08%

Banker # B 11% 12%

Banker # C 7% 10%

Legal Advisor 4% 3%

CEO/Chairman Skilled Base 10%

Coordinator Skilled Base 7%

Company Savings (for future concerns) 10%

Total 100% + Skills 100%



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CVP Analysis

According to the Cost, Volume & Profit (CVP) Analysis, we will achieve our breakeven

point within the time period of 3 – 4 years. After the achievement of breakeven point, our each unit

has the profitability margin of 45%. When we will exclude all expenses from this ratio then may we

will have 30% for the distribution of return to investors. And we also has 5% as “Saving Reserve”

for the Frito‟ Enterprisez as “Ploughing – Back Profit” which refers the use of business profit for its

development. This is the best one strategy to expand the business without any kind of debt or

external financing.

Product Variable Cost Schedule

Particular For Mini - Pack For Midi - Pack

Weight 30 Grams 65 Grams

Basic Raw Material 1.75 3.70

Banana Cutter Deptt. 0.00 0.00

Sterilizing Deptt. 0.70 1.90

Drying Deptt. 0.00 0.00

Frying Deptt. 1.00 1.70

Evaporating Deptt. 0.15 0.50

Masala's Deptt. 0.75 1.60

Packing to Packets 2.50 3.75

Master Packing 0.50 1.00




Fixed Cost Reserve - FCR 1.00 1.00

Total Cost / per unit 9.35 16.15

Firm's Profit 7.65 12.85

Trade Price (TP) 17.00 29.00



Retail Price (RP) 20.00 35.00

(All the given below ratios are calculated according to the (TP)

Total Cost Ratio 43.24% 48.79%

Contribution Margin Ratio 56.76% 51.21%

Profitability Ratio 45.00% 44.31%



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For the achievement of breakeven, we have,

Break – Even Units = 3,265,307 units

Break – Even Units = 3,300,000 units (EST.)

According to Frito‟ Assembly Line (A/L), the breakeven point will be achieve very soon

due to our high production capacity with low per unit cost as:

Break – Even Time Period = 2.64 years (32 months)

According to our CVP Analysis, we will achieve our breakeven after 32 months from the

sale of first unit, if we sale 1,250,000 units each year estimated. In our common practice, we will

achieve the breakeven easily maximum in 3 years because we have unique trend product for the

market with reasonable price which have high profitability margin for us.

In our common observation, we have 45% average profit on each unit which sale down in

the market after the achievement of the breakeven stage of the business. This is investor attracting

calculations which are easily possible in the Food Industry.



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Projected Income Statement

(Figures in “000”)

Particular Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10

Sales 25,900 33,300 42,550 48,100 57,350 74,800 94,600 113,300 143,264 145,596

CGS 7,525 9,675 12,363 13,975 16,663 25,840 32,680 39,140 49,491 50,297

Gross Profit Margin 18,375 23,625 30,188 34,125 40,688 48,960 61,920 74,160 93,773 95,299

Selling Commission 350 450 575 650 775 850 1,075 1,288 1,628 1,655

Selling Expenses 350 450 575 650 775 850 1,075 1,288 1,628 1,655

FCR 800 1,200 1,500 1,400 1,300 1,600 1,800 2,575 3,256 3,300

Net Operating

Income 16,875 21,525 27,538 31,425 37,838 45,660 57,970 69,010 87,261 88,690

Salaries 7,872 7,872 7,872 7,872 7,872 16,404 16,404 16,404 16,404 16,404

Operating Expenses 5,532 5,532 5,532 5,532 5,532 7,236 7,236 7,236 7,236 7,236

Promotional

Expenses 5,000 2,500 2,500 1,700 2,061 8,000 8,000 8,000 8,000 8,000

Depreciation 332 315 300 285 270 1,045 1,045 1,045 1,045 1,045

Financial Charges 10,125 12,125 10,125 10,125 10,125 10,125 10,125 10,125 10,125 10,125

Net Profit (before

Tax) (1,986) (1,819) 6,209 9,311 16,099 18,850 31,160 42,200 60,451 61,880

Excise Duty (298) (273) 931 1,397 2,415 2,828 4,674 6,330 9,068 9,282

Sales Tax (298) (273) 931 1,397 2,415 2,828 4,674 6,330 9,068 9,282

Net Profit (1,390) (1,274) 4,346 6,518 11,269 13,195 21,812 29,540 42,316 43,316

Investor Returns (1,251) (1,146) 3,912 5,866 10,142 11,876 19,631 26,586 38,084 38,985

Saving Reserve (139) (127) 435 652 1,127 1,320 2,181 2,954 4,232 4,332



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Projected Balance Sheet

(Figures in “000”)

Particular Year - 1 Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year -

10

Fixed Assets

Total Fixed Assets 6,638 6,306 5,991 5,691 5,406 14,595 13,550 12,505 11,460 10,415

Less - Deprecation (5%) 332 315 300 285 270 1,045 1,045 1,045 1,045 1,045

Total Fixed Assets

Value 6,306 5,991 5,691 5,406 5,136 13,550 12,505 11,460 10,415 9,370

Current Assets

Operating Expenses 5,532 5,532 5,532 5,532 5,532 7,236 7,236 7,236 7,236 7,236

Promotional Budget

Reserve 5,000 2,500 2,500 1,700 2,061 8,000 8,000 8,000 8,000 8,000

Salaries Reserve 7,872 7,872 7,872 7,872 7,872 16,404 16,404 16,404 16,404 16,404

Wages Reserve 1,752 1,752 1,752 1,752 1,752 5,340 5,340 5,340 5,340 5,340

Working Capital 4,000 344 844 144 783 1,561 200 200 200 200

Raw Material Reserve 18,000 18,000 18,000 18,000 18,000 40,000 40,000 40,000 40,000 40,000

Stock & Spares 9,913 12,675 15,750 10,213 6,988 22,952 29,184 28,956 18,377 6,992

A/C Receivables 16,835 21,645 27,658 36,265 47,278 57,620 71,490 83,645 93,122 94,638

Banked Cash 20,938 35,109 63,511 143,095 185,009 157,548 233,627 299,213 391,117 470,775

Goodwill 852 580 890 1,021 1,589 1,789 2,014 2,546 2,789 3,045

Total Assets 97,000 112,000 150,000 231,000 282,000 332,000 426,000 503,000 593,000 662,000

Capital Equity:

Induced Capital 60,000 96,000 132,000 167,000 203,000 291,000 368,000 445,000 522,000 599,000

Profit for the Year (1,390) (1,274) 4,346 6,518 11,269 13,195 21,812 29,540 42,316 43,316

Business Draws - (2,000) (2,100) (2,500) (2,400) (2,300) (2,100) (2,400) (2,500) (2,100)

Current Liabilities

Long - Term Loans 35,000 15,000 10,000 50,000 62,000 18,000 24,000 13,000 10,000 16,000

A/C Payables 2,634 3,386 4,327 7,891 5,832 9,044 11,438 13,699 17,322 1,764

Various Provisions 756 888 1,427 2,091 2,299 3,061 2,850 4,161 3,862 4,020

Total Owner's Equity 97,000 112,000 150,000 231,000 282,000 332,000 426,000 503,000 593,000 662,000



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Exit Strategy

If our business will never proceed towards the profit generation then we will provide an exit

way to our all stakeholders to leave the organization in reasonable & respected way in the better

interest of the business community. Following some strategies are shown which we will provide in

case of loss in the business as:

Sale of Business to any Heavy Weight of Snacks Industry with Product Formula

To merge “Frito‟ Enterprisez” with any other Industry related Firm

Bank – Raptly Slip to our all stakeholders

Section – 10: Critical Risks Factors


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Section – 10:

Critical Risks Factors

Management Risks

Production Wastage

Labor Conflicts

Low Coordination

Leg Pooling Environment

Conflicts in Board of Directors

Conflicts in Directors & Investor/Banker

Low Level Management Problems

Marketing Risks

The Market – Breakdown

Any Market Crash

Lays – As Competitor

Conflicts with Distributors

Decline in the Industry

Sudden Change in Trend

Operating Risks

Wastage During the Production

Low Quality of Banana‟s

Conflicts with Suppliers

Less Coordination in A/L

Less Working Environment in A/L

Conflicts b/w A/L Staff

Section – 10: Critical Risks Factors


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Financial Risks

Less Capacity for Fulfill the Demand in first 5 years

Financial Crack Down in Market

Political Instability

Law & Order Instability

Extra Money Utilize for Quality Enhancement

High Wastage Dumping Cost

Energy Crisis

Lays – Financial Take Over

Intellectual Property

Govt. Banned Policies

Decline in Goodwill by Competitor

Stolen of Trade Secrets

Legal Copy of Copyrights

Public Rules & Regulations

Other Risks

High Taxation

Inflation Trends in the Market

Decline in the Value of Money

Rising Prices of Raw Material

Govt. Food Department Conflicts

Appendix

10 Years Capital Requirements

Section – 11: AppendiX


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Section – 11:

AppendiX

Consumer Segmentation

We get many advantages from this survey research as its flexibility – which we can use our research & their

results in producing so many other products which will may provide us much value in the future. The market

segmentation in our market is like this:

National Marketing Strategy

This strategy will be implemented by the mutual concerns of all the members to board of directors & other

heads of various departments, according to the larger interest of the Frito‟ Enterprisez. This strategy will be valid for the

national – level not for any specific area like others.

The implementation time for this marketing plan will be minimum 8 years to the proper initial launching of our

product in any specific area. Before to the time period of 8 years, this strategy will never be implementable.

Under this strategy, we will target to our distributors not retailers because the profit marg in fo r retailers will be

same as like in previous “General Marketing Strategy”. According to the Discount Package, we will provide Rs. 1.5/=

on Mini – Pack & Rs. 3/= on Midi – Pack, on each unit without any kind of carriage expenses. And, distributor will

provide Rs. 1.5/= on Mini – Pack & Rs. 3/= on Mid i – Pack, on each unit to retailer without any kind of carriage

expenses. All the distributors & retailers carriage expenses will be bear by Frito‟ Enterprisez.

Under the Free Scheme, we will provide 2 Free Cartons with 20 Min i – Pack Cartons & 2 Free Cartoons with

25 Midi – Pack Cartoons to distributor except from the benefit of Discount Package. Under the Extra – Benefits

Allowance, we will offer following this to each distributor as our authorized dealer in the specific area, which re –

jurisdiction is allocated by our Marketing Manager.

All the expenses of carriage t ill the delivery in the hands of the distributor & retailer

He have ability to demand sufficient stands according to their requirement

He have ability to demand enough promotional material as their requirement

All the advertisement expenses will be bear by the firm

Geographic Launched in all main cities of Pakistan

Demographics

Age

Gender

Family Life-

Cycle

Income

Occupation

Education

5 – 25 as core target market

Male, Female.

Young, Single, Children, New couples.

Pak Rs. 25000

College and School going students.

Prep – Masters

Psychographics

Social Class

Life-Style

Personality

Middle, Middle Upper, Upper class.

Social, Food Lover , Sporty

Extrovert, Complaint

Behavioral

Benefits

User Rates

Loyalty Status

Readiness Stage.

More material, Instant gratification, Good

taste

Light, Medium and heavy users.

None, medium and strong as well.

Unaware, informed, present user.



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Firm will allocate a sufficient balance for the retailers as their Display Allowance which given on the

behalf of the distributor

The Usage of Display Allowance is in the hands of distributor with specific ev idence

The Firm will provide 2% extra d iscount to those distributor who will continue their working relat ions

with us since from first day to the establishment of d istribution network in the specific jurisdictions.

The Marketing Manager have ability to give 0.5% to 1.5% extra discount to any distributor on the behalf

of their huge delivery & repeat sales behavior

If we conduct any “Spot Activity” under the National Marketing Strategy for consumers then we will provide

him 25% d iscount on the retail price. Th is spot activity must be sponsor by Frito‟ Enterprisez just on the behalf of our

distributor who gain the profit 5% of the total sales in this spot activity as their profit margin. For the conduction of spot

activity, our Marketing Manager will manage whole campaign.

This strategy will be valid for min imum 10 years after their first day to implementation, and after this time

period, Firm‟s officials have ability to change this strategy according to the new trends of the market.

Future Prospects

For the future concerns, we are very familiar that our production capacity should enhance to capture the market

under “Twice Production Strategy”. For this purpose, we will enhance our production capacity till double after 5 years

to launching a product. Our plant & machinery equipments are not costly as like other firms, so due to this benefit we

will easily double our production within next 6 years.

Now we will in condition to produce 1250,000 un its annually, but with the twice enhancement in production

capacity, we will produce 2500,000 units annually under the program of “Twice Production Strategy”. This figure will

also generate our profit margin at high level without any kind of high fixed cost on the firms‟ profitability because for

this purpose, we have the reserve of “Fixed Cost Reserve” (FCR).

By Twice Production Strategy, our resources & labor cost will also raise up. For this production concern, we

have high profitability marg in and also the reserve of expenses / operations of factory. We are very hopeful that our

finance will never create any problem in our business.

Production Capacity Analysis

Particulars

Produced Units

Per Hour Production - 900

Daily Production (900 × 9 hrs) 8,100

Monthly Production (8,100 × 26 days) 210,600

Bi - Annually Production (210,600 × 6 months) 1,263,600

Annually Production (210,600 × 12 months) 25,527,200

(with limitations)

Annually Production (Estimated) 2,560,000



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Capital Requirement / Capital Flow of Ten Years

First Year Requirement (Initial Costs)






Wages Reserve (Rs. 146,000 × 12) 1,752,000





Preliminary Expenses 1,206,000


Second Year Requirement



Wages Reserve (Rs. 146,000 × 12) 1,752,000




Working Capital 344,000


Third Year Requirement



Wages Reserve (Rs. 146,000 × 12) 1,752,000








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Fourth Year Requirement



Wages Reserve (Rs. 146,000 × 12) 1,752,000






Fifth Year Requirement



Wages Reserve (Rs. 146,000 × 12) 1,752,000






Sixth Year Requirement (New - Initial Costs)






Wages Reserve (Rs. 445,000 × 12) 5,340,000








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Seventh Year Requirement



Wages Reserve (Rs. 445,000 × 12) 5,340,000






Eight Year Requirement



Wages Reserve (Rs. 445,000 × 12) 5,340,000






Ninth Year Requirement



Wages Reserve (Rs. 445,000 × 12) 5,340,000






Tenth Year Requirement



Wages Reserve (Rs. 445,000 × 12) 5,340,000








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Total Fixed Costs Details for Initial 5 Years

Remuneration Schedule (Monthly)

Person Nature Quantity Amt (in Rupees)

CEO/Chairman Allowance 1 10,000

Investor Allowance 1 10,000

Banker Allowance 1 10,000

Coordinator Allowance 1 10,000

Legal Advisor Allowance 1 10,000

Finance Manager Salary 1 35,000

Marketing Manager Basic Salary 1 30,000

Accountant Salary 1 20,000

Production Manager Salary 1 25,000

Quality Inspector Salary 1 20,000

HR Manager Salary 1 30,000

Asst. HR Manager Salary 1 20,000

Business Consultant Agency Fixed Fee 1 20,000

Law Firm Fixed Fee 1 10,000

Audit Firm Fixed Fee 1 8,000

Asst. Cost Manager Salary 1 17,000

Complaint Officer Salary 1 13,000

Salespersons Basic Salary 15 × Rs. 15,000 225,000

A/L - Labor * Wages 20 N/A

A/L - Skillman Basic Salary 4 × Rs. 5,000 20,000

H/O - Bottom Line Staff Salary 6 × Rs. 8,000 48,000

A/L - Bottom Line Staff Salary 4 × Rs. 8,000 32,000

Clerical Staff Salary 3 × Rs. 11,000 33,000

Total Monthly Salaries - - 656,000

Annual Salaries - - 7,872,000



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Plant & Equipment Schedule

Plant/Machine Each Item Cost Quantity Total Cost

Banana Cutter 50,000 2 100,000

Sterilizer 170,000 1 170,000

Drying Machine 100,000 2 200,000

Frying Plant 180,000 2 360,000

Evaporator 120,000 2 240,000

Maslala 35,000 2 70,000

Packing Machine 220,000 2 440,000

Racks to Stock 6,000 75 450,000

Total Plant & Machinery Cost - - 2,030,000

Office Equipments & Furniture Schedule

Particular Each Item Cost Quantity Total Cost

Computers 20,000 10 200,000

Laser Printers 7,500 3 22,500

Lockers & Cupboards 5,000 20 100,000

Tables (for H/O) 1,700 15 25,500

Tables (for A/L) 2,700 20 54,000

Chairs (for H/O) 1,000 60 60,000

Chairs (for A/L) 650 40 26,000

Fixture (for H/O) - - 350,000

Fixture (for A/L) - - 150,000

Electric Equipments - - 25,000

Misc A/C (for H/O) - - 100,000

Misc A/C (for A/L) - - 50,000

Total Equipment Cost

1,163,000

Wages & Commission Schedule

Person Nature Amt (in Rupees)

Marketing Manager Commission 0.25/sold unit

Salespersons Commission 0.25/sold unit

Labor Wages 250/day

Skillman Wages 150/day



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Other Fixed Assets Schedule


Mini Trucks 870,000 1 870,000

Cultus Cars 870,000 2 1,740,000

A/L Generator 250,000 2 500,000

H/O Generator 250,000 1 250,000

Stock Carrier 8,500 10 85,000

Total Cost - - 3,445,000

Reserves for Operating Expenses Schedule (monthly)

Particular Amt (in Rupees)

A/L - Electricity Charges 120,000

A/L - Gas Charges 70,000

H/O - Electricity Charges 30,000

A/L - Generator Reserve 20,000

H/O - Generator Reserve 15,000

A/L - Building Rent 40,000

H/O - Building Rent 120,000

Office Maintenance Reserve 7,000

Plant Maintenance Reserve 5,000

Engineering Maintenance Reserve 1,500

Transportation Reserve 30,000

Admin Operating Reserve 2,500

Total Operating Costs 461,000

Annual Operating Costs 5,532,000



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Promotional Budget (for 5 years)

Particular Each Item Cost Times Total Cost

Radio - Ad Making Expenses 3,000 2 6,000

Cable - Ad Making Expenses 50,000 2 100,000

Radio - Regular Ad 7,000 60 420,000

Cable - Regular Ad 5,000 60 300,000

Pamphlets 5 500,000 2,500,000

Cloth Banners 30 2,000 60,000

Sign Board Flexes 1,500 250 375,000

Publicity - Bill / Vouchers 14 200,000 2,800,000

Calendars 35 50,000 1,750,000

Shopping Bags (printed) 5 500,000 2,500,000

Shirts 100 5,000 500,000

Spot Activity 15,000 50 750,000

Marketing Reserve - - 1,200,000

Total Budget

13,261,000



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Total Fixed Costs Details for Next Five Years

Remuneration Schedule (Monthly)

Person Nature Quantity Amt (in Rupees)

CEO/Chairman Allowance 1 12,000

Investor Allowance 1 12,000

Banker Allowance 1 12,000

Coordinator Allowance 1 12,000

Legal Advisor Allowance 1 12,000

Finance Manager Salary 1 45,000

Marketing Manager Basic Salary 1 35,000

Accountant Salary 1 22,000

Production Manager Salary 1 45,000

Quality Inspector Salary 1 25,000

HR Manager Salary 1 35,000

Asst. HR Manager Salary 2 × Rs. 25,000 50,000

Business Consultant Agency Fixed Fee 1 25,000

Law Firm Fixed Fee 1 15,000

Audit Firm Fixed Fee 1 10,000

Asst. Cost Manager Salary 1 20,000

Complaint Officer Salary 1 15,000

Salespersons Basic Salary 30 × Rs. 20,000 600,000

A/L - Labor * Wages 50 N/A

A/L - Skillman Basic Salary 10 × Rs. 6,000 60,000

H/O - Bottom Line Staff Salary 10 × Rs. 10,000 100,000

A/L - Bottom Line Staff Salary 10 × Rs. 10,000 100,000

Clerical Staff Salary 7 × Rs. 15,000 105,000

Total Monthly Salaries - - 1,367,000

Annual Salaries - - 16,404,000

New - Plant & Equipment Schedule

Plant/Machine Each Item Cost Quantity Total Cost

Banana Cutter 60,000 2 120,000

Sterilizer 180,000 1 180,000

Drying Machine 120,000 2 240,000

Frying Plant 200,000 3 600,000

Evaporator 130,000 2 260,000

Maslala 30,000 4 120,000

Packing Machine 230,000 4 920,000

Racks to Stock 7,500 100 750,000

Total Plant & Machinery Cost - - 3,190,000



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New - Office Equipments & Furniture Schedule


Computers 18,000 15 270,000

Laser Printers 8,000 7 56,000

Lockers & Cupboards 5,500 25 137,500

Tables (for H/O) 2,000 10 20,000

Tables (for A/L) 3,000 50 150,000

Chairs (for H/O) 1,000 15 15,000

Chairs (for A/L) 700 80 56,000

Fixture (for H/O) - - 200,000

Fixture (for A/L) - - 150,000

Electric Equipments - - 25,000

Misc A/C (for H/O) - - 100,000

Misc A/C (for A/L) - - 50,000

Total Equipment Cost

1,229,500

Wages & Commission Schedule

Person Nature Amt (in Rupees)

Marketing Manager Commission 0.25/sold unit

Salespersons Commission 0.25/sold unit

Labor Wages 300/day

Skillman Wages 200/day

Other Fixed Assets Schedule


Mini Trucks 900,000 2 1,800,000

Cultus Cars 830,000 3 2,490,000

A/L Generator 300,000 2 600,000

Stock Career 10,000 15 150,000

Total Cost - - 5,040,000



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New - Reserves for Operating Expenses Schedule

(monthly)

Particular Amt (in Rupees)

A/L - Electricity Charges 150,000

A/L - Gas Charges 90,000

H/O - Electricity Charges 40,000

A/L - Generator Reserve 25,000

H/O - Generator Reserve 20,000

A/L - Building Rent 50,000

H/O - Building Rent 140,000

Office Maintenance Reserve 10,000

Plant Maintenance Reserve 12,000

Engineering Maintenance Reserve 2,500

Transportation Reserve 60,000

Admin Operating Reserve 3,500

Total Operating Costs 603,000

Annual Operating Costs 7,236,000

Promotional Budget (for 5 years)

Particular Each Item Cost Times Total Cost

Radio - Ad Making Expenses 17,000 2 34,000

Cable - Ad Making Expenses 1,050,000 1 1,050,000

Radio - Regular Ad 10,000 60 600,000

Cable - Regular Ad 6,500 60 390,000

Pamphlets 6 900,000 5,400,000

Cloth Banners 30 2,500 75,000

Sign Board Flexes 2,000 350 700,000

Publicity - Bill / Vouchers 17 500,000 8,500,000

Calendars 40 100,000 4,000,000

Shopping Bags (printed) 6 700,000 4,200,000

Shirts 120 7,500 900,000

Spot Activity 17,000 100 1,700,000

Marketing Reserve - - 12,451,000

Total Budget

40,000,000



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Total Product Cost for Initial Five Years

Product Variable Cost Schedule

Particular For Mini - Pack For Midi - Pack

Weight 30 Grams 65 Grams

Basic Raw Material 1.75 3.70

Banana Cutter Deptt. 0.00 0.00

Sterilizing Deptt. 0.70 1.90

Drying Deptt. 0.00 0.00

Frying Deptt. 1.00 1.70

Evaporating Deptt. 0.15 0.50

Masala's Deptt. 0.75 1.60

Packing to Packets 2.50 3.75

Master Packing 0.50 1.00




Fixed Cost Reserve - FCR 1.00 1.00

Total Cost / per unit 9.35 16.15

Firm's Profit 7.65 12.85

Trade Price (TP) 17.00 29.00



Retail Price (RP) 20.00 35.00


Total Cost Ratio 43.24% 48.79%

Contribution Margin Ratio 56.76% 51.21%

Profitability Ratio 45.00% 44.31%



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Total Product Cost for Next Five Years

New - Product Variable Cost Schedule

Particular For Mini - Pack For Midi - Pack For Bigi - Pack

Weight 30 Grams 65 Grams 100 Grams

Basic Raw Material 2.00 4.00 6.00

Banana Cutter Deptt. 0.00 0.00 0.00

Sterilizing Deptt. 0.50 1.75 2.00

Drying Deptt. 0.00 0.00 0.00

Frying Deptt. 1.15 2.15 2.75

Evaporating Deptt. 0.12 1.35 1.75

Masala's Deptt. 0.85 1.75 2.10

Packing to Packets 2.75 3.95 4.75

Master Packing 0.65 1.15 2.15

Total Variable Cost 8.02 16.10 21.50

Carriage Expenses 0.50 0.50 0.50

Selling Commission 0.50 0.50 0.50

Fixed Cost Reserve - FCR 1.00 1.00 1.00

Total Cost / per unit 10.02 18.10 23.50

Firm's Profit 6.98 10.90 18.50

Trade Price (TP) 17.00 29.00 42.00

Distributor Margin 1.50 3.00 4.00

Retailer Margin 1.50 3.00 4.00

Retail Price (RP) 20.00 35.00 50.00


Total Cost Ratio 47.18% 55.52% 51.19%

Contribution Margin Ratio 52.82% 44.48% 48.81%

Profitability Ratio 41.06% 37.59% 44.05%



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Questionnaire for the Concept Testing

A Concept Testing Survey’s by…

Frito’ Enterprisez

(Banana Crazee – A Taste of Nature)

- Are you student at which level…?

School – Level

College – Level

University – Level

- The Age Interval…?

10 years – 20 years 20 years – 30 years

30 years – 40 years More _______ (in years)

- Gender Male

Female

- Are you…?

Quality Conscious Price Conscious

Brand Conscious

- Are you mentally prepared to adopt new trends of the market…?

Yes No

- Are you mentally prepared to adopt new tastes / flavors which are available in the market…?

Yes No

- Yours behavior towards the banana flavor is…? Positive

Neutral Negative



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- If we will provide Banana in the shape of “CHIPS” to you, what will be yours response…?

Positive Neutral

Negative

- If the general market provides you “Banana Chips” you will purchase it…? Yes

No

- How many grams “Banana Chips” you will eat within a day…?

25 grams 50 grams

75 grams 100 grams

- If we will provide “Banana Chips” to you on the reasonable prices, then what will be yours purchasing behavior…?

Rarely Purchase Frequently Purchase

Mostly Purchase

- You will provide feedback to us by tasting the product of “Banana Chips”…?

Yes No

Thanks for yours kind co-operation…?

THE END……..!

business proposal - banana chips

Documents