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EntrepreneurshipBusiness Proposal
A Product of Frito’
Enterprisez
BANANA CRAZEE
A Taste of Nature
A Presentation By
Falcon’s Group
Ali Raza Sahni
The Business
Our Opportunity
Business is name of profit in legal manners
For a business opportunity gap must be there because of tough competition
Banana fruit have great market at national level because of no alternative
international brand “Pringles” is present who provide caned banana chips at limited level at high price
Description of Business
“Frito’ Enterprisez” will provide fruit snakes at reasonable price and earn profit
Now a days people have potato chips, snakes, popcorns, chocolates, etc but we will provide them fruit snakes
We may not have direct competitors but a lot of indirect in the market who are price and trend setters
The first mover advantage goes to “Super Crisp” who is the king from 20- 30 years
Then 10 years ago, “Lays – A Product of Pepsi Co.” entered into the market and replaced the “Super Crisp” into “Lays
Due to huge network, extensive promotional activities Super Crisp lost their market share to Lays
We have a great threat from Lays but it will take at least 2 years to tackle our product because their strategies & policies
Pakistani consumers are price conscious so we’ll provide a reasonable price to take the value from them
As we have first mover advantage so have great chance of success
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 first 15- 20 years our objectives are:-
To present the “Frito‟ Enterprisez” at international level within next 6 years
To provide quality product at reasonable price
To loyal the customer and get response from them
To consider employee as assets who provide services at their best level
To change the customer mind from vegetables to fruits snakes
To attain at least 30% share of market in next 10 years
To compete the market on quality not on price
To provide sufficient return to investors
To maintain best relationship with suppliers
To nationalized our firm within next 10 years.
Competitive Advantage
We are offering a unique product to market with good quality, excellent taste & at reasonable price which will attract to consumer. We have a free market till next three years at least
Our main competitor is Lays but it will not be easy for them to catch us
In case of Lays we have national slogan of “Be Pakistani, Buy Pakistani” to capture the market.
And, we are offering “Halaal Food” to market under the Islamic Values.
Some years before we seen a crises about Pig oil in lays it will be our key to run in the market
Current Status We’ll launch our product in 3-4 cities
at early stages to check response from customer to avoid huge losses
As the first fruit snakes industry we may need high capital and to face high costs but it will be cover very soon
To get the competitor advantage we’ll use various promotional activities to promote our brand and product and by providing extra benefits to consumers, retailers and distributers
It is necessary for us to establish distribution channel at every level
Management Team
Management Designations
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
CEO/Chairman
It is top legal body of our organization. It is the most powerful person due to his authority and rights
A male or female with minimum 30 years of age with the experience of 3-5 years and education is minimum M.Com or M.BA
Specialization should be in accounting or finance with at least 80% marks
NOC from previous organization with the basic salary of Rs.35,000/-
Manage financial matter, act as head of finance department, provide forecasting about future, tackle bankers & bankers, provide briefing in meetings and having no concern with other department
Board of Directors Total five members as Executive Bodies of the “Frito’ Enterprisez”
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.
Rules & Regulation for the Organization Structure
The official head of the organization will be CEO/Chairman
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
Any majority decision by board of directors must have one vote by investor or banker
For the meeting to heads of departments, minimum three members should be present except Coordinator
The returns of investors & bankers will be determine by the Finance Department with the concern of CEO/Chairman & Coordinator
The HR Manager will be appointed by the mutual concentration of all heads & board of directors
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 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
Legal Company Structure
Frito’ Enterprisez
Our Firm –
Frito’ Enterprisez will be a Private Limited Co.
Association of at 2 – 50 members under the law
Restricted the right to transfer their invested part to another member
Prohibits to the public shares or debentures
Have the limited liability
Legal Status of Frito’ Enterprisez
Company involve various investors, bankers & skilled based persons who invested their money, time, experience & abilities on risk basis against high rate of returns
The investor will be members to board of directors on the investment basis
CEO/Chairman, Coordinator & Legal Advisor will be the members to board of directors on the skills & experiences basis
At the 5th of each month, firm will issue a special kind of document “Frito‟z Newsletter” – describes the firm news, policies, rules, strategies, plans & goals
Mention the duties & responsibilities of each staff member as increase or decrease on monthly basis
Confidential matters will not disclose because public document
A/L & H/O Addresses
Head Office (H/O)
Frito‟ Enterprisez, 73 / A, Century Plaza, Near Centre Point (Mini Golf), Lahore, Punjab – 35000
Assembly Line (A/L)
Frito’ Production Unit, Near Falcon Motor, Lahore Road, Sargodha - 40100
Ownership &
Intellectual
Property
Total Capital Investor # A – Rs. 26 Million – 26%
Investor # B – Rs. 20 Million – 20%
Investor # C – Rs. 15 Million – 15%
Banker # A – Rs. 13 Million – 13%
Banker # B – Rs. 11 Million – 11%
Banker # C – Rs. 7 Million – 7%
Legal Advisor – Rs. 4 Million – 4%
Total Investment Rs. 100 Million
Owners of the Business
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%
Intellectual Status
Our “Trade Mark” will be Firm's Monogram or Logo
Registration for our Assembly Line
(A/L) with the name of “Frito’ Assembly Line”
Industry Analysis
Industry Description
Pakistan have big potential for investment in the Snacks Industry because the Demand or Growth rate is very high
Annual Growth Rate is estimated at the rate of 20 % - 30 %
Most of the children, teenagers and young people are the target market-(use as a meal replacement).
Gap exist for Fruit Chips
Industry Size
The size is so large because each kind of person likes snacks. The present market
Segments Share % Quantity (Tons)
Branded 60 1,200
Unbranded 40 800
Total 100 2,000
Industry Attraction
Export prospects for the next decade and expansion ofthe Fast Food Industry abroad
Profit Potential A basic parameter to execute the
business
The sales trend of crisps and snacks is increased by 10% between 2000 and 2005
we are producing unique product ,So more chances of high profit
The competitor analysis for Snacks Industry of Pakistan
COMPANY NAME BRANDNAME
Standard Foods (Pvt.) Limited Golden Chips
Tripple EM (Pvt.) Limited Super Crisps
Kohinoor Smith (Pvt.) Limited Smiths
Consolidate Kolson
Trading Enterprises Krincles
All of these firms are operating in the vegetables snacks not in fruit snacks
It will be a competitive advantage for us to produced a unique product
Competitive Position
Marketing Plan & Strategie
s
Product Line Banana Crazee – the taste of nature
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
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
Product Feasibility
Product Taste WeightRP (For Mini
– Pack)
RP (For Midi –
Pack)
Banana
CrazeeSaltiest 30 Grams Rs. 20/= Rs. 35/=
Banana
CrazeeChill Up 65 Grams Rs. 20/= Rs. 35/=
Packing Feasibility
ProductWeights /
Quantity
TP of Each
Unit
Master
Packing
TP for
Master
Pack
Banana
Crazee –
Saltiest
30 Grams /
Mini – PackRs. 17/= 48 pieces Rs. 816/=
Banana
Crazee –
Chill Up
30 Grams /
Mini – PackRs. 17/= 48 pieces Rs. 816/=
Banana
Crazee –
Saltiest
65 Grams /
Midi – PackRs. 29/= 24 pieces Rs. 696/=
Banana
Crazee –
Chill Up
65 Grams /
Midi – PackRs. 29/= 24 pieces Rs. 696/=
Marketing
Strategies Following Marketing Strategies which will may valid for next 15 years of the business life:
Initial Launching Marketing Strategy
Phase Marketing Strategy
General Marketing Strategy
National Marketing Strategy
Marking Promotional Terms
Discount Package
Free Scheme
Extra – Benefits Allowance
Initial Launching Marketing Strategy
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
Under the Discount Package in this strategy (15% discount to our retailer)
Under the Free Scheme, (we offer 2 Free Carton with 10 Mini – Pack Cartons & 1 Free Carton with 10 Midi)
Under the Extra – Benefits Allowance (1 stand fro 3 cartons of anyone master packing ‘ will provide 1 banner and 100 pamphlets to each retailer) however every retailer must have 1 stand
Phase Marketing Strategy
after 30 days of launching
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
Under the Extra – Benefits Allowance, we will provide him 1 stand on the net or credit purchase of 3 cartons of anyone master packing
This strategy will be valid till the allocation & deal of any distributor in the specific area
General Marketing Strategy
In this strategy Under this Discount Package, we will provide Rs. 1.5/= on Mini – Pack & Rs. 3/= on Midi – Pack is just valid for Distribution Network
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
We will provide 1 Free Cartoons with 10 Mini – Pack Cartons & 1 Free Carton with 15 Midi – Pack Cartoons under Free Scheme
National Marketing Strategy Strategy valid for the national – level not for any specific area
Implement will be minimum after 8 years to the proper initial launching of our product
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 without any kind of carriage expenses
Under the Free Scheme, we will provide 2 Free Cartons with 20 Mini – Pack Cartons & 2 Free Cartoons with 25 Midi – Pack Cartoons to distributor except from the benefit of Discount Package
Under the Extra – Benefits Allowance
expenses of carriage till the delivery
advertisement expenses will be bear by the firm
Display Allowance
% extra discount to those distributor who will continue their working relations with us since from first day
Marketing Manager have ability to give 0.5% to 1.5% extra discount to any distributor
Product Pricing Strategy
Price / CostFor Mini – Pack (in
rupees)
For Midi – 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
Promotional Strategies
Promotional Activities since 10 days before to the initial launching in which we focus on Pamphlets, Banners , Voucher Billing Pads, Sign Board Flexes, FM Band Advertisement, Local Cable Advertisements
After three years on initial launching when we feel we will advertise our product through digital media
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.
Operational Plan
Method of Production
We have proper Assembly Line (A/L) for our production setup
with the name of “Frito’ Assembly Line” (A/L). 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
Production Capacity
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
1,250,000
Availability of Labor
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.
We required most skilled people for the plant operations in
following departments as:
Sterilizing Department
Frying Department
Masala’s Containers
Packing to Packets Department
Labor’s Conditions For the Frito’ Assembly Line, we are offering wages on daily
basis for the labor and salary + wages for the four Skillman.
LaborSalary
(monthly)Wage (daily)
Working
Hours
Worker - N/A - Rs. 250/= 9 Hours
Skillman Rs. 5000/= Rs. 150/= 9 Hours
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
A/L StaffLabor Quantity Work Arena
Production Manager 1 Incharge of A/L
Quality Inspector 1 Quaintly Checker
HR Manager 1Incharge 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
Management2 (Day & Night) Watch Man
Bottom Line
Management1 Sweeper
Bottom Line
Management1 Helper
Quality Control
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), for the elimination of the special cause variations and minimizing the natural cause variations on the continual basis improvements in the production process.
Financial Plan
Total Capital Requirements
Investor # A – Rs. 26 Million – 26%
Investor # B – Rs. 20 Million – 20%
Investor # C – Rs. 15 Million – 15%
Banker # A – Rs. 13 Million – 13%
Banker # B – Rs. 11 Million – 11%
Banker # C – Rs. 7 Million – 7%
Legal Advisor – Rs. 4 Million – 4%
Total Investment Rs. 100 Million
Initial Capital Requirement
First Year Requirement (Initial Costs)
Particulars Amt (in Rupees)
Plant & Equipments2,030,000
Office Equipments + Furniture1,163,000
Other Fixed Costs3,445,000
Annual Salaries Reserves7,872,000
Wages Reserve (Rs. 146,000 × 12)1,752,000
Promotional Budget5,000,000
Operating Expenses Reserves5,532,000
Raw Material Reserve18,000,000
Working Capital4,000,000
Preliminary Expenses1,206,000
Total Ist Year Capital Requirement50,000,000
Salaries Package - For Initial 5 YearsRemuneration 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
Wages & Commissions – for Years
Wages & Commission Schedule
Person NatureAmt (in Rupees)
Marketing Manager Commission 0.25/sold unit
Salespersons Commission 0.25/sold unit
Labor Wages 250/day
Skillman Wages 150/day
Fixed Assets Details
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
Con’tOffice 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
Con’tOther Fixed Assets Schedule
Particular Each Item Cost Quantity Total Cost
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
Operating ExpensesReserves 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
10 Years Capital FlowYear Capital Flow
First Year 50 Million
Second Year 36 Million
Third Year 36 Million
Fourth Year 35 Million
Fifth Year 36 Million
Sixth Year 88 Million
Seventh Year 77 Million
Eight Year 77 Million
Ninth Year 77 Million
Tenth Year 77 Million
Return on Investment (ROI) Policy
Owner Preference %age InvestmentReturn 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%
Projected Rate of Returns to Investors (figures in “000”)
ParticularRate of
Return
Year
- 1Year - 2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8
Year -
9
Year -
10
Investor # A14% - 200 608 913 1,578 1,847 3,054 4,136 5,924 6,064
Investor # B12% - 200 522 782 1,352 1,583 2,617 3,545 5,078 5,198
Investor # C8% - 200 313 521 902 1,056 1,745 2,363 3,385 3,465
Banker # A14% - 200 608 913 1,578 1,847 3,054 4,136 5,924 6,064
Banker # B12% - 200 522 782 1,352 1,583 2,617 3,545 5,078 5,198
Banker # C10% - 200 435 652 1,127 1,320 2,181 2,954 4,232 4,332
Legal Advisor3% - 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
Coordinator7% - 200 304 456 789 924 1,527 2,068 2,962 3,032
Savings10% - 200 435 652 1,127 1,320 2,181 2,954 4,232 4,332
Projected Income StatementParticular 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
Projected Balance SheetParticular 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 Value6,306 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 Reserve5,000 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
CVP AnalysisProduct 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
Total Variable Cost 7.35 14.15
Carriage Expenses 0.50 0.50
Selling Commission 0.50 0.50
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
Distributor Margin 1.50 3.00
Retailer Margin 1.50 3.00
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%
Break – Even Stage Break – Even @ 3,300,000 units
2.64 years – 32 Months
45% Average Profit on Each Unit
80 Millions – Fixed Expenses
1250,000 Units – Annual Productivity
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
Critical Risk
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
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
Overview on
AppendiX
Twice Production
StrategyProduction 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
Product Cost – For Next 5 YearsNew - 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
(All the given below ratios are calculated according to the (TP)
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%
Question & Quires
The End