individual project_business plan

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MAC Individual Project : Submitted by Shrikant Kejriwal

Individual Project: Business Plan and Cost Creation

Unique Juice Parlor:

The juice parlor, located in the upcoming district market of in the Greater Noida

area will boast of variety of juices and shakes. The parlor will provide a hangout

zone for youngsters. In few years down the line the unique juice parlor will be

expand to different areas in and around Delhi.

Executive Summary




The unique juice parlor will initially start with mainly three different product lines ie. Mix

fruit juice, Vegetable juice and mango shake. In due course of time new product lines

such as salads and other shakes will be added. After opening the first juice corner in

Greater Noida, I plan to expand the juice corner to other parts of the National Capital

Region.

Vision

To become No. 1 juice and salad provider in National Capital Region by 2016

Mission- To provide best in class juices and salads to all sections of society and to

enable people to attain their health goals.

Product Strategy – Being a first generation entrepreneur, I will adopt a focused

strategy and differentiate my offering from the run of mill juice corners.. To start with

there will be three different product lines ie. Mix fruit juice, Vegetable juice and mango

shake. In due course of time new product lines such as salads and other shakes will be

added. Mix fruit juice will be available round the year while the other two being

seasonal.

Market Strategy – Product mix involves product, price, promotion and placement. I

plan to position the unique juice corner as a health hangout zone. My target

customers will be youngsters who are health conscious. My juice corner will be air

conditioned complex providing an ambience where youngsters can spend time together

over a glass of juice. The Greater Noida Area has upcoming schools, colleges and

multinational companies that provide an adequate market potential for my business. In

afternoon hours, I will have the facility of happy hours when the price of the products

will be sufficient to recover just the variable costs. Happy hour will primarily focus on

school students. To promote the product, I will advertize through local newspapers,

magazines and television channels.

Human resource strategy – The human resource will comprise of a combination of

skilled and unskilled workers for the day to day operations. Gradually as expansion will

take place, I will hire English speaking college interns both full time and part time.

Financial Plan




The financial plan depicted below consists of sales forecast for a year, cash flowstatement, income statement and balance sheet for a year. I have aggressiveexpansion plans for next 5 years when I plan to open a new juice corner every yearincreasing the sales five fold in five years.Expected Sales are based on my interactions with the local juice corners in

my area. I plan to open up a similar juice corner in Greater Noida shoppingcomplex. The area has similar target population size.

The detailed financial plan in shown below:




Expected SalesVolume

Apr'12May'12

June'12

July'12

Aug'12 Sep'12 Oct'12

Nov'12

Dec'12

Jan'13

Feb'13

Ma13

Mix Fruit Juice

No. of Glasses 12000 15000

18000

21000

21000 21000 21000

21000 21000

21000 21000 2

SalesRevenue

420000

525000

630000

735000

735000

735000

735000

735000

735000

735000

735000 73

Vegetable Juice

No. of Glasses 0 0 0 0 0 0 9000 9000 9000 9000 9000SalesRevenue 0 0 0 0 0 0

315000

315000

315000

315000

315000 31

MangoShake

No. of Glasses 6000 7500 9000 9000 9000 9000 0 0 0 0 0

SalesRevenue

240000

300000

360000

360000

360000

360000 0 0 0 0 0

The shop will run from 6 am to 10 pm daily.




Costing per glass(Rupees per glass) - concise data

MangoShake

Mix fruit Juice

Vegetable juice

Sale Price 40 35 35DirectMaterial Cost 24 19 16

Direct Costing per glass(Rupees per glass) - Detailedinformation

MangoShake

Mix fruit Juice

Vegetable juice

Sugar 1 0 0

Mango 9 0 0

Milk 12 0 0

Plastic Glass 1 1 1

Orange 0 5 0

Carrot 0 0 5

Othervegetables 0 0 8.8

Lemon 0 1 1

Masala 0 0.2 0.2

Pineapple 0 6 0

Pomegrenade 0 5.8 0

Kaju-Pista 1 0 0 Total DirectMaterial 24 19 16




• Ingredients in different types of juices along with their costs per glass

Expected Monthly Cash FlowStatement

Apr'12 May'12 June'1

2 July'12 Aug'12 Sep'12 Oct'12 Nov'12 Dec'12 Jan'13 Feb'13

March'1

3

Sales 660000 82500099000

0109500

0109500

0109500

0105000

0105000

0105000

0105000

0105000

0105000

0

Direct Material-

372000-

465000

-55800

0

-615000

-615000

-615000

-543000

-543000

-543000

-543000

-543000

-543000

Wages&Salaries -40000 -40000-

40000-40000 -40000 -40000 -40000 -40000 -40000 -40000 -40000 -40000

Equipment -50000 0 0 0 0 0 0 0 0 0 0 0

Owner Capital120000

00 0 0 0 0 0 0 0 0 0 0

Loan200000

00 0 0 0 0 0 0 0 0 0 0

Shop investment-

3000000

0 0 0 0 0 0 0 0 0 0 0

License cost-

1000000 0 0 0 0 0 0 0 0 0 0

Advertising -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000 -1000

Electricity -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000 -5000

Maintenance &Repair

0 0 -1000 0 0 0 0 0 -1000 0 0 -1000

Monthly Cash Flow 292000 31400038500

0434000 434000 434000 461000 461000 460000 461000 461000 460000

Yearly installmentpaid

-317000

Cum. Balance -25000 31400038500

0434000 434000 434000 461000 461000 460000 461000 461000 460000




Took 20 lakh from the bank at 10% per annum payable in 10 equal yearly installments and hence paid the first installment in April 2012Spending Rs 1000 every month on advertisingSpending Rs. 5000 on electricity every month




Annual Cash Flow FY13

Sales 12060000

Direct Material -6498000

Wages&Salaries -480000

Equipment -50000

Owner Capital 1200000

Long TermDebt 2000000

Shopinvestment -3000000

License cost -100000

Advertising -12000

Electricity -60000

Maintenance &Repair -3000

Yearly Cash

Flow 5057000

Yearlyinstallment -317000

Cum. Balance 4740000




Projected Incomestatement

FY13 FY14 FY15

Sales 12060000

144720

00

173664

00

Cost of goodssold -6498000

-779760

0

-935712

0Wages&Salaries -480000

-576000

-691200

Advertising -12000 -14400 -17280

Electricity -60000 -72000 -86400

Maintenance &

Repair -3000 -3600 -4320Depreciation -5000 -6000 -7200Long TermDebtRepayment -317000

-380400

-456480

Net Profitbefore tax 4685000

5622000

6746400

Income Tax 937000112440

0134928

0

profit after tax 3748000449760

0539712

0




Balance Sheet at the end March2013

Assets

LiabilitiesFixedAssets

Shop 3000000OwnersEquity

1200000

License 100000Long TermDebt

1877316

Equiplessdeprec 45000

RetainedEarnings

3748000

Total 3145000

CurrentAssets

Total

Cash 3680316

6825316 Total682531

6




Cost Creation/Process Improvement techniques

Since it is a start up business there are a number of areas where I can apply

different optimization and process improvement techniques. To start with I will try

to implement Six Sigma and Just-in Time (JIT) techniques.

Both are famous techniques so I am just explaining where in value chain I willimplement these techniques.

JIT – Raw materials for my juices are mostly fruits and vegetables. I have to

ensure that customers get juices from fresh fruits rather than 2-3 days old fruits.

So I want that every day I order a specific quantity of fruits so that I do not have to

keep them for the next day. This will also reduce my inventory costs. The supplier

will also be aware of my demand and can plan accordingly.

Six Sigma – For me the Mumbai Dubbawala is the role model when it comes toerror free and on time delivery. I will implement Six Sigma quality process so that

each customer is taken care of. No customer should complain that he had ordered

Mango juice but I served him mixed fruit juice. Moreover, waiting time for

customers will be minimal.

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