Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 1

Satyajit Sinha: Business plan for a Paper Plate manufacturing

unit

Query Resolution

16th March, 2011

WWW.365BUSINESSDAYS.COM

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 2

Contents

Query Summary ........................................................................................................................................ 3

Resolution ................................................................................................................................................. 3

Next Steps ................................................................................................................................................. 6

About Us ................................................................................................................................................... 7

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 3

Query Summary

Client Name: Satyajit Sinha Client Delivery Manager: 91-02-4

Query Date: 10/03/2011 Query Type: Free, SMEToolkit India

Business Result Area: Business Planning SLA*: Not Applicable

*SLA (Service Level Assurance) is only applicable for our premium members

Query Description:

“I want to start paper plate manufacturing unit. I want to know about the steps to be taken to

make this a successful venture”.

Resolution

Our understanding of your current status:

1. You want to establish a paper plate manufacturing unit.

Your Query / Queries to Us & Their Resolution:

1. Components of a sound business plan for a paper plate manufacturing unit

a. Opportunity assessment and capacity planning – You should first determine the demand

for paper plate in the geographical area which you wish to serve. You should identify the

major customer segments which need paper plates for their business. Some of the

major customer segments can be:

Caterers (who are hired for catering food in wedding and parties) who serve

snacks in paper plates

Restaurants

Hawkers which sell food items on the roadside

Manufacturers of decorative items which need paper plates

You should get a ballpark estimate for demand of paper plates from all these segments.

For example, you can count the number of caterers in your geographical area. Then you

can identify the number of parties/ wedding ceremony served by them in a month. Then

you can estimate the average number of guests in a party, and paper plate needed per

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 4

guest. By multiplying these figures, you can estimate the demand for paper plates from

caterers. You can similarly estimate the demand from other segments.

After that you need to find out the current supply of paper plates in the market, and

consequently demand supply gap. Then you should decide what percentage of this

demand supply gap, and the percentage of current market you wish to serve. This will

help you in estimating the manufacturing capacity of your unit.

b. Location analysis – You need to select a suitable location for the proposed

manufacturing unit. You can use specific criteria to support the location. The location

should be closer to the intended customers. It should be closer to the suppliers of raw

materials required in the plant. It should have good infrastructure in terms of

connectivity, and power supplies. It should be located in an area, where you can easily

source, attract, and recruit people for your plant.

c. Manpower resource planning – Estimate the manpower required for the manufacturing

plant on the basis of capacity of the plant. Estimate the manpower in both the

administrative and managerial role.

d. Competition analysis – You should analyze strategies followed by the established

manufacturers across following functions:

Sourcing of raw materials

Ensuring quality of the product

Pricing Policy

Branding & marketing strategy

Customer relationship management

Financing Strategy

You should determine which of the above strategy/ practices you can follow without

incurring too much cost.

e. Supply chain management – Paper, and aluminum foil are the main raw materials used

in the paper plate manufacturing. Identify the suppliers of these raw materials on the

basis of specific criteria such as reputation, lead time in supplying the material, credit

term extended etc. You should try to negotiate better pricing with your suppliers by

promising them prompt payment. Also, you should have a strict quality check on the

quality of paper used at the time of receipt of raw material from the suppliers.

f. Customer acquisition strategy – Since you will be a new player in the market, you will

need to have a strong value proposition to create a market for yourself. For that you

first need to identify the target segment for your product. You should determine the

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 5

attributes of your target segments (such as who need paper plates in bulk, who make

prompt payment etc). Then you will need to make marketing strategy for each customer

segment. To establish your identity, you can enter into an arrangement with the buyers,

where you can sell your paper plates at lower prices (as compared to competitors) at

the start. Once the buyer is assured of your higher quality, you can then raise the price

of paper plates. Also you can enter into long term arrangement with your customers by

offering plates at discounted price.

g. Quality assurance – Quality of the paper plate is very important for ensuring your

success in the market. You need to ensure the quality control at all points of your value

chain. You can take following measures to ensure quality

Quality of raw materials

Best practices in manufacturing to ensure quality

Training and sensitizing your employees towards the need to ensure quality

Ensuring quality during the transport of final products to the customers

Taking quality certifications (in long term)

h. Financial Analysis –

Capital expenditure required for the plant – for the land, machinery, installation

of plant

Operating expenditure for the plant – Salary, electricity, fuel, transportation

Initial working capital requirement

Debt- equity ratio for funding the capital expenditure and initial working capital

requirement

Source of debt and equity

Profit and loss statement, and balance sheet for the manufacturing plant for the

life of the plant

Profit, and return on equity

This resolution is provided basis the limited information we have about you. To know more

about different aspects of an effective business plan, please visit the following link:

http://365businessdays.com/PublicSite/Advisory.aspx?AdvisoryID=3

If you need our support to help you develop the business plan, it will require us to understand

the level of support you need, and your previous expertise in the sector. We always begin our

relationship in an extremely cost efficient online method and then depending upon the need of

the client; deepen the relationship to offline engagement with considerable advantages of cost

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 6

and turnaround time for delivery over comparable services. You could get to know more about

our services by visiting

http://365businessdays.com/PublicSite/takeatour.aspx

Next Steps

We wish you success in your desire to establish a paper plate manufacturing unit,

and will be extremely willing to provide you all the support that we can to help you

achieve this aspiration. We are committed to providing skill based research and

analytics support to our Premium Members to help them drive their business.

When you sign up as a Premium Member and we engage with you to support you

for developing and implementing your marketing plan and support you in the

content development process, you can be assured of access to a pool of high

quality business management professionals with deep expertise in 80 skill areas

that drive any business.

http://www.365businessdays.com/PublicSite/BusinessConcept.aspx

As for example, we will help you

In opportunity assessment, and the capacity planning for the unit

Developing a model for choosing the location for the plant

Deciding criteria for selecting suppliers, and recommending a suitable

supplier for the raw material required in the plant

Customer acquisition strategy

Quality assurance strategy

Financial analysis, and calculation of financial return from the plant

Raising funds from different sources

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 7

About Us

SME ToolKit

The SME Toolkit is a joint project of IFC (International Finance Corporation), a member of the

World Bank Group and ICICI Bank. The Toolkit website has been created as an online resource

centre to empower Indian SMEs and help them become globally competitive

http://india.smetoolkit.org/india/en

365BusinessDays

365BusinessDays provides high quality, well researched, relevant and neutral external skill

support in a cost efficient manner to our customers. We provide this service through a secure

and easy to use proprietary online platform. To know more about our services please visit our

Take a Tour section. Please click here to Sign up for our Business Advisory Services.

DISCLAIMER:

All due care has been taken in the preparation of this report to ensure that the information, estimates,

opinions, suppositions, suggestions, and recommendations contained here-in are factually correct and

accurate to the best of our knowledge, at the time of generating and publishing this report. In particular as

our Query Resolution service is not based on any Primary Data collection and analysis, there can be inherent

challenges in the depth and scope of the issues it can address. We, at 365BusinessDays, accept no liability for

any loss or damage or unforeseen consequential loss or damage that may arise from the use of the

information contained within this report. The information, estimates, opinions, suppositions, suggestions, and

recommendations within this report cannot be guaranteed, and readers are advised to use this information

and the implications there-in at their own discretion and risk. The information published in this report may

be subject to change without notice at any time, and we accept no liability or obligation to inform the readers

or users of this report of such changes.

Company Confidential ©2010-11 Qcaliber-India Services Pvt. Ltd. Page | 8

365BusinessDays offers management consulting and business advisory services in the

form of business query resolution based on deep industry and functional expertise,

delivered through a convenient and cost-effective online business model. Our service

aids entrepreneurs, business owners, and senior management in critical decision-making

process when faced with complex business challenges, thereby helping them select the

most relevant business solution from amongst multiple choices potentially available,

supported by our knowledge and experience in Business Planning, Sales Enhancement,

Cost Reduction, and Operational Management.

WWW.365BUSINESSDAYS.COM