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East West University

“Business Plan of Bottling Honey”

Course Title: Strategic Management

Course Code: MGT 480

Submitted To:

Engr. Kamrul Hassan

Assistant Professor, Department of Business Administration

East West University.

Submitted By:

Estiak Ahmed Onim (2012-2-10-109)

Utkal Banik (2012-2-10-129)

Maruf Hasan Faruk (2012-2-10-105)

MD. Jewel Khan (2012-2-10-072)

Date of Submission: 9th

April, 2016

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April 9, 2016

To,

Engr. Kamrul Hassan

Assistant Professor

Department of Business Administration

East West University.

SUBJECT: SUBMISSION OF THE REPORT.

Dear Sir,

With due respect, we would like to submit the Report on “Business Plan of Bottling Honey”

We found the research program very interesting which was assigned on me along with other

group members as a requirement for the MGT480 (Strategic Management) course. We are pretty

much optimistic that the preparation of this report would enrich our practical knowledge as well

as helpful to be an entrepreneur.

We have devoted our best effort to make the report an informative and realistic. We shall remain

ever grateful to you for rendering us the opportunity of working on such an interesting field. If

you need any clarification regarding this report, we shall be available for this.

Yours sincerely,

Estiak Ahmed Onim

Utkal Banik

Maruf Hasan Faruk

MD. Jewel Khan

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Maples Food Firm is a product oriented organization. Our business will provide bottled honey. In

Bangladesh there is no separate honey industry. Many companies are selling bottled honey but

honey is not their prime product, there are selling it with other food products.

Our businesses mainly involves in honey selling are Raw Honey and 100% Natural Honey.

Maples Food Firm is a partnership business where the partners will be liable for success and loss

in the business. By the end of 2016 we are planning to launch our business firm. As it is a

partnership firm after collecting capital from partners and collecting loan from different sources

the firm will go for full fledge production of bottled honey. Our business philosophy is

improving the future of food industry especially in honey. Maples Food Firm is going to produce

two types of products-bottled honey. As there is no company in the market the products will be

unique compared to the competitor’s products and customers will be definitely enjoyed our both

of the products. After analyzing the customer’s information the target market for bottled honey is

selected by using location and age of customers. In order to take appropriate decision about the

market size market research will helps our business firm a lot. Market research helps our Maples

Food Firm in ascertaining and understanding competitor information such as their identity,

marketing network, customer focus and scale of operations. We are estimating that in the first

year of business we will have 15% of market share in the honey. Marketing research tells us

about the businesses which are controlling the honey sectors. As we will launch a new business

so by SWOT analysis, objectives and marketing strategy were selected. Analyzing current

market situation includes analyzing market situation, product situation, competition situation,

distribution situation, macro environmental situation. Before entering into the market it is very

important for the Maples Food Firm to understand the market situation. After analyzing the

market situation, Maples Food Firm has found that for bottled honey the market is new and

stable for it. Maples Food Firm will be run by the following Organization Structure: General

Manager, Marketing Manager, Production Manager, Finance & Account Manager, HR Manager

and different levels of employees (Labors & others). Since Maples Food Firm is a partnership

business it will face least government regulation in its formation. As we will launch a new

product we will try to increase strength of our business to capture the market share.

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Serial Number Topics Page Number

1. Business description 7 1.1 General description of the venture 7

1.2 Industry background 7

1.3 Company history 8

1.4 Vision of the business 8

1.5 Mission of the business 8

1.6 Business Philosophy 8

1.7 Form of ownership 9

1.8 Uniqueness of the product 9

2. Marketing segment 9

2.1 Marketing research 9

2.1.1 Target market 10

2.1.2 Demand analysis 10

2.1.3 Market size 10

2.1.4 Competition 11

2.1.5 Estimated market share 11

2.1.6 Control 11

2.2 Marketing plan 11

2.2.1 Current market situation 12

2.2.2 SWOT analysis 13

2.2.3 Objectives 14

2.2.4 Marketing strategy 15

2.2.5 Action program 17

3. Research, Design and Development 17

3.1 Development and Design Plans 17

3.2 Technical Research Result 18

3.3 Research Assistance Needs 18

4. Manufacturing 18

4.1 Location Analysis 18

4.1.1 Location Analysis for Factory 19

4.1.2 Location Analysis for Retailing 21

4.2 Production needs Facilities, Utilities and Equipment 21

4.3 Source of Raw materials and Suppliers 21

4.4 Labor supply 22

4.5 Classification of Manufacturing Product 23

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Serial Number Topics Page Number

5. Management Segment 23 5.1 Management team key personnel 24

5.2 Legal Structure 25

5.3 Consultants & Professional Support Resources 26

6. Critical Risks Segment 26 6.1 Potential Problems 26

6.2 Major challenges and difficulties 26

6.3 Alternative Course of Action 27

7. Financial Management Segment 28

8. Schedule Segment 34

9. Conclusion 35

10. Bibliography 36

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1.1 General description of the venture:

Maples Food Firm is a product oriented organization. It is a small business which is only in the

beginning stage. Our business will provide bottled honey. In the very beginning of our business

we will target only the market of Dhaka area. If this business becomes successful and profitable

then we will expand our territory in the future. Maples Food firm is a partnership firm and the

partners are Estiak Ahmed Onim, Utkal Banik, Maruf Hasan Faruk and MD.Juwel Khan. As

establishing of a new business is pretty expensive so we are going to finance our own funds

through partnership and the rest of the amount will be taken as loan from banks and other

sources. We believe our plan will bring lucrative profit for the business and customer will

appreciate the way we doing business.

1.2 Industry background:

In Bangladesh there is no separate honey industry. Many companies are selling bottled honey but

honey is not their prime product, there are selling it with other food products. As honey is not

their prime products they just collect it from the suppliers and suppliers usually collect raw

honey from the farmers. Some of the businesses involve in honey selling are –

Afzal Honey: Afzal Honey is owned by Shimu Enterprise. With some bee keepers in

2000 this business was started.

Malam International: Malam Int.exports 100% natural honey to Europe, Japan, Canada

and USA market. It operates its business from Dhaka.

Satkhria Consulting Firm Ltd.: It is dealing with Bees honey and collecting directly

from the Garden, Sundarban Mangrove and Mastered Flower.

Natural Honey: Bluebell International supplies natural honey, it may be refined or non-

refined, primarily it wants to supply 2 to 5 ton and wants to go for big quantity.

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Proshika Honey: Proshika produced over 57 tons of honey from 500 mellifera colonies.

Besides, another such 600 colonies are now engaged in extracting honey from mustered

flower and other sources in Sunderban areas.

Pure Fresh Honey: It supplies Pure & fresh Box Honey from its own firm, It assured

that it is 100% Natural & pure Box Honey, No chemical or preservative added.

These are some of the names those are involved in honey business.

1.3 Company Background:

Maples Food Firm is a product oriented organization. It is a small business which is only in the

beginning stage and yet now it is not established. By the end of 2016 we are planning to launch

our business firm. As it is a partnership firm after collecting capital from partners and collecting

loan from different sources the firm will go for full fledge production of bottled honey. We

believe that our products are different from our competitor’s products so customers will prefer

our products. As a result our firm will get competitive advantage over competitors.

1.4 Vision of the business:

To become the pioneer in food industry for ensuring expected quality and fitness especially for

the people of Bangladesh.

1.5 Mission of the business:

To create customer satisfaction and contentment with the best quality of bottled honey through

proper use of technological tools and highly motivated employees in an innovative, friendly

environment, flexible and profitable manner.

1.6 Business Philosophy:

Our business is not only for money making profit but also for providing better quality food

products to the society. Our business philosophy is improving the future of food industry

especially in honey sectors.

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1.7 Form of ownership:

Maples Food firm is a partnership firm and the partners are Estiak Ahmed Onim, Utkal Banik,

Maruf Hasan Faruk and MD.Juwel Khan. As it is a partnership business, the partners will be

liable for success and loss in the business.

1.8 Uniqueness of the product:

Maples Food Firm is going to produce two types of products-bottled honey. Our firm will

produce two types of bottled honey-one will be normal honey and another will be medicated

honey for children, for aged people and for those who have diabetes. Since there is no company

in the market that is producing honey particularly for children and diabetes patients, so our

medicated honey will be completely unique from our competitor’s bottled honey and its unique

feature will definitely attract the customers.

2.1 Marketing research:

Whenever a company is going to launch a new business or new product it is very important for it

to do a marketing research. Marketing research is a process of gathering, recording and analyzing

the data related to certain products and services. Marketing research is very important for a

company to understand the needs and wants of the target audience as well as to effectively

meeting them. There are two methods of marketing research- primary research and secondary

2. Marketing segment

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market research. To start our business firm and to launch our two products-bottled honey we use

both primary research and secondary research to identify the target market, to analysis the

demand, market size, trends and competition.

2.1.1 Target market:

Marketing research helps us by providing customer information in terms of their location, age,

buying behavior and gender. After analyzing the customer information we select the target

market for bottled honey by using location and age variables. As we are going to launch our

retail shop in Dhaka so we are targeting only the customers of Dhaka for both normal honey and

medicated bottled honey. Normal honey will be targeted to the mass customers and medicated

bottled honey will be targeted to the children, diabetes patients and aged people.

2.1.2 Demand analysis:

After doing the marketing research we have found that our products will have adequate demand

in the market. We have also found from the marketing research is that some customers really

want our business firm to come in the market as soon as possible because our both of the

products will provide some unique features to them as well as these products will ensure proper

quality and fitness.

2.1.3 Market size:

In order to take appropriate decision about the market size marketing research helps our business

firm a lot. We are going to launch a new business, so primarily our market size focus will be on

Dhaka. If this business becomes successful and profitable then we will expand our market size in

other areas in the future.

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2.1.4 Competition:

Marketing research helps our Maples Food Firm in ascertaining and understanding competitor

information such as their identity, marketing network, customer focus and scale of operations. So

it will help the firm in surviving and even some cases leaving behind the competition. After

analyzing the information we have found that for bottled normal honey we will have to face

some competition but for bottled medicated honey there will be no competition in the market and

for there will be any competition until any company brings the same product in the market.

2.1.5 Estimated market share:

We are estimating that in the first year of business we will have 15% of market share in the

honey industry. Many people might think that for a new business to achieve 15% of market share

in the first year would be impossible however we believe that as our products will offer some

unique features and benefits to the customers so they will be satisfied by our products. As a

result Maples Food Firm will get competitive advantage over other competitors. Eventually it

will not be impossible for the firm to achieve 15% of market share in the first year of doing

business.

2.1.6 Control:

Marketing research tells us about the businesses which are controlling the honey sectors. So it

will help us to the take the appropriate action in order to compete with those businesses and to

understand how those businesses are controlling these two sectors.

2.2 Marketing plan:

When an entrepreneur is just starting the business, one of the biggest questions he probably may

have is how to attract new customers? Creating a marketing plan can help a business to focus on

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those high-priority activities that will likely generate more clients quickly. As we will also

launch a new business so we also have a marketing plan which deals with current market

situation, SWOT analysis, objectives and marketing strategy.

2.2.1 Current market situation:

Understanding the situation of current market is essential to developing analysis of it and the

appropriate, creative recommendations that flow from it in the Marketing Plan. Analyzing

current market situation includes analyzing market situation, product situation, competition

situation, distribution situation, macro environmental situation.

Market situation: Before entering into the market it is very important for the Maples

Food Firm to understand the market situation. After analyzing the market situation,

Maples Food Firm has found that for bottled honey the market is new and stable for it.

Product situation: The products that Maples Food Firm will produce are bottled honey.

Competition situation: Maples Food Firm has to face competition for bottled normal

honey and the competitors are Afzal Honey, Malam International, Satkhria natural honey,

Proshika Honey, Pure fresh honey and others. But for bottled medicated honey the firm

may not face competition until any other business introduces the products in the market.

Distribution situation: Maples Food Firm will sell the products through retail shop

however retail shop will be established by the firm itself.

Macro environmental situation: Macro environmental situations of Maples Food Firm are

given below-

Social-cultural situation: This area will help Maples Food Firm to

understand what is happening. As a food firm we must have to deal with

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people who worry about the amount of sugars, calories, fat and other

ingredients in the products. This is an extremely volatile area for our food

firm which is why we need to watch it closely.

Technological Issues: If our food firm ignores the technological issues then

it will be in trouble. So we will use the latest technologies available in

Bangladesh to produce the bottled honey.

Economic Issues: This area deals with things like interest rates, exchange

rates, the stage of the economic cycle and broad economic trends. As we

will take loan from different sources so we have to very much carefully

consider the current economic condition of Bangladesh.

Political-Legal Issues: This is a huge issue for our Maples Food Firm. We

will have to consider this situation very carefully.

2.2.2 SWOT analysis:

Strength:

Our organization’s strengths are as follows:

Unique products.

First mover advantage in bottled

medicated honey sectors.

Direct involvement with customers.

Affordable products.

Weakness:

Our organization’s weaknesses are as follows:

New product.

High fixed costs.

Difficulties in covering fixed costs.

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Opportunities:

Our organization’s opportunities are as follows:

Less costly.

The other competitors have no

specialized target market segment.

Possibility of expanding demand as

there is no better alternative for the

customers.

Getting attention of target market.

Covering effective media as

promotional tool.

Threats:

Our organization’s threats are as follows:

Risk of facing loss.

Existence of different competitors.

Competitors may imitate the strategies

quickly.

No market share yet.

2.2.3 Objectives:

Objectives are the specific performance that our Maples Food Firm wants to achieve. In order to

set the marketing plan we will have to set objectives in few areas which are sales, profits, return

on investment or market share. By having a sales target, we will know about how much we need

to produce, we will have something to compare our actual performance against and we will have

a clear picture of where we want to be. The objectives will be settled by considering the

SMART-

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Specific: The more precise we can be, the more useful will be our

objectives. Our objective is specific that we will attract the customers and

increase the sales of bottled honey.

Measurable: We will set the objectives that are measurable.

Attainable: Maples Food Firm sets the objectives that will be achievable.

Realistic: The objectives that we will set must have to be realistic but yet

challenging.

Timely: Bearing in mind that we will want to evaluate how well we are

meeting our objectives, we need time frames. These also help us along the

way, as we can see if we are on track.

The objectives of Maples Food Firm are-

o Ensure proper quality and fitness

o Establish our production factory name as Maples Food Firm

o Establish our retail store name as Maples retail store

o Gain profit

o Achieve 15% of market share in the first year of doing business

2.2.4 Marketing strategy:

Maples Food Firm’s marketing strategy is based on positioning of products by ensuring quality

and fitness. Our main target is the market of Dhaka area. Primary business target is selling our

product in our selected area.

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Figure: Marketing strategy

Quality product and price:

Place: Primarily Maples Food Firm will target only the customers of Dhaka area.

Promotion: In order to promote the firm as well as the products Maples Food Firm will

use newspaper ad, publicity and personal selling.

Quantity product

Marketing

Strategy

Reasonable price

Place Promotion

Bottled honey Healthy Honey Tk 50-100

Medicated Healthy HoneyTk-70-200

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2.2.5 Action program:

Action program is the most critical level of the marketing plan. In this stage we will execute our

marketing strategy that will lead us towards the achievement of our marketing plan objectives.

We try to deliver the following messages:

Weight management: A Spoon of honey taken with warm water in the morning is

traditionally known to be useful in weight management.

Sugar substitute: Honey is a healthier substitute to sugar when looking to reduce weight

as it has lesser calories than sugar and contains vitamins, minerals and antioxidants which

are good for health.

Weight management: Honey is known to be a good source of energy as its natural sugar

and carbohydrates are easily digested by the body.

Source of energy: A Spoon of honey taken with warm water in the morning is

traditionally known to be useful in weight management.

Aids Digestion: Honey when used in your diet is known to aid in digestion.

Cough and cold: Honey is known to help in cough and throat irritation.

Beautiful Skin: Honey is known to be useful for the skin because of its moisturizing and

nourishing properties.

3.1 development and Design Plans:

Before working on a business plan we will do a research in every aspect of our business plan.

Our research will cover from selecting the final location of the factory and the office place to

where and how the ultimate consumer will get the product .We will start our research to select

3. Research, Design and Development

SegmentssSSSSegmentSegment

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our factory location and the locations we have chosen to do research on that’s are Narayanganj,

Savar, Gazipur, Norshindhi.

After chosen the location we will go for research about product type, processing method and who

will be our supplier, what will be our raw materials and from where it will come. So these things

cover the research on production.

3.2 Technical Research Result:

After doing the research on location we will select that, two locations are suitable for our

business that are Narayanganj and Gazipur. Our raw materials for the products will be Honey.

The sources of production area for honey is not specific that’s why we select suppliers from

different areas in Bangladesh.

3.3 Research Assistance Needs:

As we are doing new business that’s why for taking appropriate decision we require proper

research. By doing the research we find out where will be our target area for factory, retail shop,

who will be our supplier, what will be our product type, raw materials and from where it will

come etc.

4.1 Location Analysis:

After doing the research we have selected Gazipur as our factory location because it is the right

site in the Dhaka City. For choosing the location the other factors are:

4. Manufacturing

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4.1.1 Location Analysis for Factory:

Transportation facility: It is near of the Dhaka. So transportation facilities are very

suitable. Logistics supports are available. That is why we have chosen this place as our

factory location.

Police and Fire Protection: Our factory location is nearby the police station and fire

service office. If any unavoidable circumstances will occur then this facilities will help

us.

Local Laws and Regulation: As Gazipur is an industrial area, so local laws and

regulations are appropriate with our factory site and location.

Utilities Facility: Although our Government is not giving the new connection of

electricity and gas .Though we are now just doing the plan, when we will start our

business by that time Government might be give permission of that connections. If it will

not happen then we will do especial request because our business has great potential and

it is a new business in Bangladesh market. We may store honey like following picture

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Here the imaginary factory’s design which is also used for a juice manufacturing firm.

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4.1.2 Location Analysis for Retailing:

Location of the shop: The shop will be located at Uttara and Puran Dhaka.

Retail Shop Size: The size of the retail shop will be approximately 500 square feet.

Degree of competition: For honey there will some competition.

Transportation network: The transportation facility from the factory to retail shop

is convenient.

Political Barriers: The political barriers are less relatively in these two areas that is

why we select these locations.

Room for Expansion: We select our shop in such way that we can expand the shop

in the future.

Visibility: The shop will be visible .As a result customer access will be more and the

appearance will create the proper image in the customer’s eye.

4.2 Production needs Facilities, Utilities and Equipment:

For honey bottling we need gas, water, electricity facilities and for processing other necessary

equipment are required in the factory. Although our Government is not giving the new

connection of electricity and gas .Though we are now just doing the plan, when we will start our

business by that time Government might be give permission of that connections. If it will not

happen then we will do especial request because our business has great potential and it is a new

business in Bangladesh market.

4.3 Source of Raw materials and Suppliers:

The sources of raw material for honey is not specific that’s why we select raw material and

suppliers from different parts in Bangladesh.

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4.4 Labor supply:

Gazipur is an industrial as well as residential area. So, the labor supplies are available in the

Gazipur. So the labor cost per head will be less. For this reason overhead cost will low. As a

result our product cost will be less.

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4.5 Classification of Manufacturing Product:

Here the imaginary design of our products -

In order to carry out numerous business and human resources processes, one needs an

organizational plan. Maples Food Firm also has a simple and straight organizational plan

consisting of General Manager, Production Manager, Marketing Manager, Finance & Account

manager, HR Manager, employee, supervisor and worker.

Raw Honey

Medicated Honey

Bottling

Honey Bottling

5. Management Segment

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Maples Food Firm Organization Structure

As our business is a partnership business, all of our partners are act as a head of different

department. One of our partners supervises all the activities of our organization by acting as a

General Manager.

5.1 Management team key personnel

General Manager:

Here key activity of general manager is to develop short and long-term strategies that grow

revenue and position for the firm. Translate and communicate strategy for managers, staff, and

throughout the organization to ensure that product meets or exceeds all quality standards,

competitive benchmarks, and performance metrics.

General Manager

Marketing Manager

Employees

Production Manager

Employees

Supervisors

Workers

Finance & Account manager

Employees

HR Manager

Employees

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Marketing Manager:

Here the key activity of marketing manager is to identify progress and brings to market those

areas of new product development consistent with the firm’s strategy. Develop and execute

consumer communication and promotional programs as part of national or key account activity

in line with the marketing plan.

Production Manager:

Here the key activity of production manager is to manage efficiently and effectively the key

activities related to the Production Department, in order to meet our firm and customer

requirements. Ensure observance to schedule in order to meet customer delivery deadlines, in

full and on time.

Finance & Account Manager:

Here the key activity of finance and account manager is to overall management of finance and

financial procedures for our firm, manage day to day accounting functions including regular cash

verification, bank and balance sheet accounts reconciliations, defining and managing financial

needs and resources to ensure sufficient cash-flow and accountability of the firm’s project during

its whole life span.

HR Manager:

Here the key activity of HR manager is to recruit the employees for our firm, arrange training

and development program, plan compensation and benefits for the employee, maintain employee

relations and measures the performance of employees.

Employees:

Employees will be appointed through proper recruitment process consisting of interview, test etc.

5.2 Legal Structure:

Since Maples Food Firm is a partnership business it will face least government regulation in its

formation. It will simply need to make a written contract between the partners regarding the

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business activities and registered the business to avoid the further possible conflict among the

partners.

5.3 Consultants & Professional Support Resources:

At the present, no outside consultants have been retained, it is in further concentration.

6.1 Potential Problems:

To starting this business, we face some risks related the cost, promotion, production and

financing requirements. Like:

New product.

High fixed costs.

Difficulties in covering fixed costs.

6.2 Major challenges and difficulties:

For starting and operating the new food firm, our business organization may face the following

major challenges and difficulties:

The organization is totally a new organization. Though we already have an enough

number of customers for selling our product, if any other firm starts providing the same

6. Critical Risks Segment

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products for the segment, we may lose our future potential customers. So, this kind of

situation may become a big challenge for our business in near future.

To capture the whole market or make the whole market aware and interested to accept

the products is not an easy task. The business might have to face difficulties in handling

the whole customer group and to make them motivated.

Besides, as a new comer in this sector, to become profitable in the short-run is

impossible. It will take a long time period to reach in the break even, because the

business has a huge fixed cost which includes purchase of new equipments. So, before

reaching the break-even, the business needs a huge capital to run and maintain its

operations. Therefore, it will not be cost-effect for the business at least for the first 5

years.

6.3 Alternative Course of Action:

As our business is new, so must follow some guidelines to minimize our possible risk:

The number-one risk for most small businesses is improper cash-flow management,

so calculate every month how much money on hand and how long it will last if our

income dries up. Also evaluate monthly total accounts payable and the number of

days accounts are outstanding because a slowdown in accounts payable will lead to

cash-flow crunches.

To ensure that our products design, process not imitated by the other firms.

We shouldn’t promise any kind of activity that we don’t fulfill to our customer and

investors.

We must retain our portion of profit earning for promotional activities and further

expansion of our business.

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Try to increase strength of our business to capture the market share.

Try to increase the volume of our production and at the same try to reduce the cost to

achieve economies of scale.

Try to create differentiations that make our products more appealing over the

competitors.

Sources of Fund:

As it is a partnership business, all of the partners equally contribute in financing. Each of the

partners invests TK18.75. Lakh in business. Our business has so much growing potentiality in

Bangladesh economic sectors. So our business is eligible to get government subsidiary as a form

of loan at a low interest TK.50 lakh. This in total our capital stands at TK.12500000.

Budgeted plans for Honey:

Fixed costs for first year

1. Cost of Land and Factory acquisition: BDT. 1500000

2. Cost of Retail Store acquisition: BDT. 500000

3. Erection & electrification: BDT. 50000

4. Office furniture & fixtures: BDT. 50000

7. Financial Management Segment

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3. Cost of Machinery: For Honey Bottling:

• Thermostatic control blower

• Heating equipment

• Extractor

• Labeling machine

• Utensils

• Blender, tanks etc.

Total Cost= BDT. 160000

Total Fixed Cost: BDT. 2760000

Recurring employee expenses per annum

Designation No. Salary Amount

Factory Manager 1 6000 72000 (6000*12)

Supervisor 1 4000 48000 (4000*12)

Office Assistant 1 4000 48000 (4000*12)

Boiler man 1 4000 48000 (4000*12)

Skilled worker 2 2000 48000 (2000*12*2)

Unskilled workers(8

months)

35 1500 420000 (35*8*1500)

Attendant 1 1500 8000 (1500*12)

Perquisites @10% 31700

Total : 692000

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Raw Material including packaging material

Particular Quantity Rate per quantity Amount(TK)

Honey: Miscellaneous

( Kgs )

10000 400 4,000,000

Empty bottles 20000 1.5 30,000

Additives 20,000

Labels 20000 0.1 2,000

Total 4,052,000

Utilities Amount (Tk.)

Power 70,000

Water 20,000

Coal 41,000

Total 131,000

Other Contingent Expenses Amount Tk.

Repairs and maintenance 50,000

Advertisement 500,000

Others 87,000

Insurance 11,000

Depreciation 24,000

Interest 100,000

Rent 18,000

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Other Salaries & Wages 50,000

Other Expenses incl. Utilities 16,800

Postage & Stationery Expenses 50,000

Transportation Expenses 100,000

Miscellaneous Expenses 15,000

Total 1,021,800

Profit/ Loss Analysis

Net Profit per year

= Sales - Cost of production

= 1605000 – 12, 248, 46

= BDT. 380154

Net Profit Ratio

= Net profit X 100

Sales

= 380154X 100

16, 050, 00

= 23.7%

Rate of Return on Investment

= Net profit X 100

Capital Investment

= 3801540 X 100

7,500,000

= 50.68%

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Break Even Analysis

Breakeven Point for Honey:

Sales revenue= Total cost

Average price is 295* Number of bottles= 5330400

So, Breakeven point= 18069 bottle of Honey

Financial Forecast

Based on the above information and calculations, a brief financial forecast is given below:

Total Equity Capital= BDT. 7500000

Total Debt Capital= BDT. 5000000

Total Capital Invested= BDT. 12000000

Total Working Capital= BDT. 500000

Sale of Honey= BDT. 5,900,000

Sale of by products = BDT. 150000

Cost of Honey= BDT. 5330400

NPV:

Net Present Value (NPV) is the difference between the present value of cash inflows and the

present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of a

projected investment or project. For the firm NPV is given below:

NPV= (12500000) + 3801540 + 400000 + 420000 + 560000+ 620000 +70000 + 820000 +

900000 + 1300000 + 1800000 + 1900000.

33 | P a g e

At the maturity of 11 year the NPV becomes positive. That means we will able to return the total

amount that we invest within 11 years. So, according to the financial terms and condition we

should accept the project.

Imaginary “Balance Sheet” for the first year:

Assets Amount ( taka) Equity and Liabilities Amount ( taka)

Land

Retail store

Furniture

Plant & Machinery:

Thermostatic control blower

Heating equipment

Extractor

Labeling machine

Utensils

Blender, tanks

Total

Cash

Market Research & Product

development

1500000

500000

50000

160000

10000000

290000

Investment by the owners

Loan

7500000

5000000

Grand Total 12500000 Grand Total 12500000

34 | P a g e

Maples Food Firm will follow this execution model to enter in food industry:

TASK Execution Period (Year 2016)

January February March April May June

Choosing

location

Hiring

training and

admin staff

Purchase of

Equipment

Advertising

Establishment

of firm

8. Schedule Segment

35 | P a g e

Maples Food Firm is a product oriented organization. Our business will provide bottled honey.

Maples Food Firm is a partnership business where the partners will be liable for success and loss

in the business. Our business philosophy is improving the future of food industry especially in

honey sectors. Maples Food Firm is going to produce two types of products-bottled honey. Our

firm will produce two types of bottled honey-one will be normal honey and another will be

medicated honey for children, for aged people and for those who have diabetes. We do Market

research which helps us by providing customer information in terms of their location, age,

buying behavior and gender. After analyzing the customer information we select the target

market for bottled honey by using location and age variables. As we are going to launch our

retail shop in Dhaka so we are targeting only the customers of Dhaka for both normal honey and

medicated bottled honey. Maples Food Firm will sell the products through retail shop however

retail shop will be established by the firm itself. By SOWT analysis we find the strength,

opportunity, weakness and threats of the Maples Food Firm. Maples Food Firm’s marketing

strategy is based on positioning of products by ensuring quality and fitness. Since Maples Food

Firm is a partnership business it will face least government regulation in its formation. As we

will launch a new product we will try to increase strength of our business to capture the market

share.

9. Conclusion

36 | P a g e

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