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1. Introduction
Executive Summary
1.1 Background
Indonesia has potential in becoming a great tourism site in Asia - 80440000 International Tourist Arrival has been recorded by World Bank. It has thousands of beaches, islands, and tourism site (ex Bali, Bunaken National Marine Part, etc.) approx. 13466 islands have been approved by UN. According to the National Statistics Department, there are thousands of 3 to 5 stars hotels and culinary services (ex. cafes, restaurants, and hypermarket) to support is - 11004 hotels are registered as tourism facilities. These hotel and culinary services need pastry, bread, and cakes - which they currently produce either manually with a help of patissiers, or automatically with the help of lots of equipment and production managers. They can sometimes buy it in a bulk amount from big bakeries. There are problems which are all cost and efficiency related to these methods, though.
The Eiffel is a factory of frozen dough - we provide and specialize in pastry, bread, and cake. We create this factory to solve the problems that our customer face, with a fair profit gain, cheaper price, and a higher quality.
1.2 Company Overview
The Eiffel has been established on 25 May 2010 by the owner, Ms. Stephanie Angela S.T. MEngSc. with her solid management team. The backgrounds are vary through many sources, depend on the role of the staffs. The production team are mostly chemical engineers, food production engineers, patissiers, and bakers. Ms. Stephanie Angela is the Chairwoman of the company, she is a Chemical Engineers - Food production specialist and in charged of most of the process on the factory. Our proud head production team manager is Mr. Dianata Sjahbana - got his patissier title from Le Cordon Bleu and was a former Patissier in Shangrila Hotels, Jakarta, Indonesia. We choose the best to serve the best.
The Eiffel is a company that produces frozen bakery products - pastry, bread, and cakes. We supply the hotels and culinary service needs. The products range from RTB (Ready to Bake), RTP (Ready to Proof) to RTE (Ready to Eat) , with a ranging quality from silver, gold, and platinum. The quality range is based on the ingredients quality and different textures. The Eiffel uses the best ingredients that is acknowledged by our loyal customers, which most are 3 to 5 stars hotel and 3 to 5 starred Michelin cafe. To satisfy the diverse range of need, The Eiffel produce the gold level of products to serve the average market - with a fine, fair quality of the product.
Objectives
The Eiffel gather all of the production cost in one place - to provide the easy, high quality, high profit, and ready products to the customer. We aim to gain high profits by saving the customers from the complicated process, financial loss, and BEP ( Break Event Point) hardship.
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1.3 Summary of The Eiffel Financial Report
The initial capital is $130.000 and the Break Event Point is after 82 days. The business has to reach to $143.908 - which is the first 23% of this business year to cover the cost and reach the BEP. The ownership is 100% of a kind - with capital cost of $130.000, the company value on the 3rd year is $683.389 which means that the annual investor return is 140%. The nett profit after tax for these years are consecutively $177.472 , $186.004, and $189.912 with total of $553.390 for 3 years. The running cost of the company is $86.184 annually with $ 43.333 of yearly depreciation cost.
2. Market Overview
"It's easy, consistent, high class, and profitable. So, why not?"
Crystal Sugiwara; the heirs of The Meritus Hotel, Surabaya, Indonesia.
2.1 Market Environment and Competitor Analysis - with Marketing Strategies
Our market are mostly hotels, cafes, restaurants/catering services, hypermarket, and supermarket. They are divided to some categories.
A. ) Hotels, Cafes, and Restaurants
A1.They are the most loyal and regular customers which is hard to get. These type of customers are being really careful and making lots of demands, as once they use the product, they should use it continually so that their customers will always get the same quality and same taste of products. This condition apply to especially starred hotels and restaurants. Their research towards the ingredients and processes is thorough, as they usually have their own specialist and product buyers.
A2. Their payments methods are vary , however, these types of customers tend to credit the payment for weeks, or months. The bigger their order is, the longer they will pay. As an example, Meritus Hotel can actually take 4 months to pay their orders. This can cause a struck to the cash flow, however, as this cycle continuously goes by, the other sales can help with the production cost - which is affordable (will be discussed on the other parts of this plan).
A3. They usually have their on suppliers - such as bakeries and factories, however, there are only 2 factories in Indonesia that exist and qualify to supply them, and they take about 300%-400% profits, which cause their price to be extremely expensive. The served price on the hotels or cafes is indeed expensive too, however, there are not much profit left for them. Moreover, one of this factory (on in Bali called The Rainbow) is not profesionally made, they are home industry paced - though the customers are huge and massive. The other one is in the capital city, which is called Gold F. Gold F is professionally operated, however, their price reach to the top and their profit is up to 300-400% which cause them being overprice - however, still can sell because there are no other factory that can provide them. The Eiffel is actually providing the exact same thing - same ingredients, same process, same recipe -, with lower prices and better services.
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Price ComparisonPs. The Eiffel has the exact sampe process and recipe as Gold F
Name COGS Price
(no GST)Price
(no GST)Price
(no GST)
Platinum PPS $12,00 $40,00 $42,00 $50,00Gold PPS $10,50 $35,00 $38,00 $42,50Silver PPS $8,25 $27,50 $29,50 $35,00Platinum DPS $13,50 $45,00 $50,00 $54,00Gold DPS $10,50 $35,00 $38,00 $40,00Silver DPS $8,55 $28,50 $30,00 $35,00
The Eiffel The Rainbow Gold FSurabaya Bali Jakarta
A4. The marketing target is their buyers, chefs, purchasing manager, or sometimes the owner. They are the decision taker whether their restaurant, cafe, of hotel are gonna use our products or not. There are several things to pay attention, such as their percentage expense, thorough data, and sales-customer relationships.
A5. Strategy
- To maintain the good relationship with the marketing target - knowing the situation and the percentage expense map of the competitors.
- To be able to present the product and the data perfectly , we need the specialist to do this, hence, it usually is the head of production team's job to accompany the marketing team.
- To map the level of the customers. The low level customers will "run away" if the first product presentation is about the platinum products. Vice versa, the high level customers will immediately reject the proposal if the first presentation presented to them are about the silver products.
B.) Supermarket and Hypermarket
B1. Supermarket and Hypermarket are loyal and regular type of customer, however, it is not always like that. Being different from restaurant and hotel, it is common if products sold in the supermarket / hypermarket are changing by the season - unless they label the product using their own brand. (ie. coles bread). Then, it is a whole different story. The taste and the quality must always be the same. The challenge is to make cheap-constant-exactly the same-good quality-products. The contract can vary from months to years, depends on what they are after. Whether it is a temporary brand selling, or products supply for their own brand.
B2. Their other sources are pretty much the same with the customer type A (see A3)
B3. The payments methods are vary , however, these types of customers tend to credit the payment for weeks, or months. Supermarket and Hypermarket average credit inquiries are 2 weeks to 2 months - depend on the type of the contract and how much they are going to order. This kind of fast payment methods can help to cover the production cost for the customer A type's bulk-long-paid order.
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B4. The marketing target will always be the purchasing manager who’s in charge to fill in the rack. The purchasing manager is someone who decides what products to be stocked inside and what products to be sold. The second marketing target is the marketing team of the supermarket. They have to be convinced that our products can be sold, since they will have to sign a continuous contract or a bulk-buy-one time-contract. If the products can not be sold, than it will be a big loss for the supermarket as the products will be wasted in the inventory, or worse, rot.
B5. Strategy
- To understand the market of those supermarkets and hypermarkets by doing market research of market mapping. Even in supermarkets and hypermarkets, there are different classes of the customers. Some markets are made for the average class customers(ex. Coles, Woolworth – they sells average quality bread), and some markets are made for the high class customers (selling imported things or extraordinary thing such as truffle or caviar or Japanese products only – this kind of markets in Indonesia always has café inside, which sell croissant, cake, pies, and etc.) The market mapping is important to decide which marketing strategy and which positive points of The Eiffel are needed to be emphasized in the proposal by the marketing team.
- To be able to produce the constant-exact as demanded-standardized products. It is very important, especially for the 2nd type of contract (the products supply for the supermarkets brand (ex. For Coles or Woolworths Homebrand bread) or for their café – Indonesian supermarkets usually have café or little stands that sells bread for a place to hang out too)
2.2 Marketing Plan
The Eiffel operates in Surabaya - and still expanding. Our first goal is to market our products to all of the market in Surabaya. Next goal is to market our products to the main tourism site in Indonesia, which is close (30 mins by plane) to Surabaya - Bali. We will open an office and a frozen warehouse in Bali to supply a lot of customers there - competing with The Rainbow company, as we have collected the data of their sales and marketing strategy by doing market research. We mostly serve type A and C customers in Surabaya and Bali.
3. Company Social Responsibility - Benefits to the Community
3.1 Economic Development
A1. Job Opportunities
The Eiffel provide job opportunities in various ways as a processed food company. We support the society by giving job opportunities and training alongside. Especially, for those who have particular skills that we need, energy, and determination, we provide training facility to develop their skills - so that they can have a good job and a better life. We also accept those who want to practice their skill , ex. university internship to give real experience to the student , especially for engineers and business student.
A2. Customer's Profit
The Eiffel helps its customers to reduce production cost and the COGS - which helps them to increase their profit and avoids them from reaching BEP hardship. As the first example, if a supermarket or cafe pay 1,5-2$ for a bread from a bakery in bulk prices, or produce it by themselves for 1-2$ per bread (calculating all of the cost from the patissier cost, electricity, workers, and
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packaging) and they can sell it up to 2-2,5$. However, if they're buying from The Eiffel, it can cost up to 0,3-0,8$ per bread - frozen, means it can be kept for longer time, and add a little cost for reheat it / bake it and that's it. They do not have to pay for too much helper, nor buy expensive bakery equipment. It is also risk free, since factory products should be standardized - it has to be baked perfectly without risk failing. Even in some cases when the products fail to rise / to be baked, we have provided our production team to come immediately to check whether our products fail, the baking method is wrong, or the oven's standard is different.
A3. New Business Opportunity - Personal Help
The Eiffel provides easy starts of a business - we also sell retail boxes consisting sheets or RTE or RTP or RTB products. Hence, to help people establish new business, we help them with the products and the training of how to use it. For example, a housewife can actually open a small pie stands or cafe in the mall or market using our pastry sheets. All she has to do is to try our products and our training (how to make a beautiful looking danish from the pastry sheet) - we provide a patissier to teach her. We also gives idea about the variety of dish that she can sell - ex. sausage brood, chocolate danish, millefeuille, and etc. In that way, we help people to establish new business.
3.2 Human Development
The company wants the best staffs to serve the customer best - and in order to achieve that, we train our staffs really well. Each division will be mentored by the Chairwoman about what they should do and how they are going to use that skill - especially the marketing team and the production team. We also called a skillful and distinguished patissier to help to train our production workers. The staffs will be able to gain valuable experience, skills, and knowledge while working for us. The training will also helps to balance the skills of the staffs - to set the standard of the skill that our staff should have.
4. Company Analysis
4.1 Form of Business Ownership
Our business is a sole proprietorship company - an independent business.
The licence or permits are vary , there are 3 of them that has been permitted in order to establish the company :
BPOM (Badan Pengawas Obat dan Makanan - The Supervisor of Drugs and Food)The company must registered their products before it can be produced or sold. BPOM also checks the label of the food-whether there are really those ingredients inside the food.
Halal CertificateIndonesian people are mostly Moslem, therefore, it is very important to be able to get a Halal Certificate. The Eiffel do not use any of non-Halal ingredients, therefore, it is not hard to achieve this certificate.
PIRT (The Industrial License)This is the license to declare that The Eiffel is indeed an industry in PIRT level. There are several level of this license. The level determines the price of the electricity, water, profit permitted, and gross revenue permitted
4.2 Behind the Scene of The Eiffel - Business Team
Our VIP(Very Important Person) Business Team
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The business team of the Eiffel is solid. It consist of sections which are divided into three sections. The insider business team, the marketing team, and the production team. The content will be explained by the organizational chart. We need small amount of people with high dedication and knowledge to rise The Eiffel to the higher level of company - to be able to help other local business that is our precious customers.
The leadership style is a mix of Transformation, Democratic and Transactional style -consecutively . In short, the leader always want the company to grow further to a better way, by giving everyone chances to speak up (while giving training to increase their ability of critical and logical thinking) ,chances to do better and both rewards and punishment for those who succeed or fail. The rewards could be percentage and awards - the punishment could be SP ("Surat Peringatan" - Warning Letter). Normally, Indonesian company would give maximum 3 SP before they decide to fire the staff. The team works are based on win-win solution theory - it happens between the Chairwoman, the staffs, and the customer. We also try our best to maintain a healthy competition and a nice working atmosphere to support everyone's performance .
5.Manufacturing and Operations Plan
5.1 Location and Space Requirements
The location of the factory is located on the 66 Manyar St, Surabaya, East Java, Indonesia
Space Requirements : 15m x 15m = 225m2
Manyar St. is a really strategic location. It cost 5 minutes driving from the factory to cafes restaurants, and hotels. It is located in the east side of the city - and it takes only 15 minutes drive to
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the main city. The positive points about this factory is that it is not noisy, it operates for 60-70 db sound collected - which is still tolerable by the other houses. We also have an agreement with them before we opened this factory.
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The requirements for the location is only about the noise and the garage. No one is allowed to park anything on the street - therefore we built a garage inside our land. The noise should be tolerable - which is maximum 75 db, arranged by Keputusan Menteri Negara Lingkungan Hidup (The Decision of The Minister of Environment) No. Kep 48/MENLH/11/1996.
Utility costs of this factory follow the standard of PIRT as the obtained industry license. It is two level higher the normal household utility cost - since the electricity cost in Indonesia is based on the use. If the normal household uses 1000-6600kWH , this company needs 16000KWH which costs 0,1524$ per KWH - stated by PLN (National Electricity Company) commencing from June 2015.
All properties are private owned property - All equipments are private owned equipments.
5.2 Labor Force
The Eiffel uses appropriate amount of labor - not too much and not too small. Supported by this facts, the probability of unionization inside factory is pretty small.
Position Full/Part Amount Wages (per month)Standard Wages
(per month)Qualification Special Requirement
CEO Full 1 Profit 271$ Master of Chemical Engineering Leadership Skill
General Manager Full 2 $1500 271$3 Years exp. of food processing factory Bachelor of Engineering / Process Management
Honest, Discipline, Creative, and Influential
Head of Production Full 1 $1200 271$2 Years exp. of food processing production Patisserie Diplome -
Creative, Passionate, and Skillful
Accountant Full 1 $500 271$ Bachelor of Accounting - Taxation specialistSkillfull, Honest, and Good communication skill
Marketing Manager Full 1 $400 271$ Bachelor of MarketingHigh skill of communication and socialization
Mechanical Engineer Part - 2x-3x/month 1 $200/session 271$Bachelor of Mechanical Engineering / Mechanical Vocational High School Graduate
Skillful in bakery machinery
R&D Staffs Full 3 $350 271$Bachelor of Food Engineering / Food Tech. Patisserie Diplome / Bakers with Reputation
Lots of experience and High Creativity - Have patience to Customer's Demands and Complaint
Production Workers Full 8 $271 271$Patisserie Diplome / Culinary Vocational High School Graduate
Discipline, Neat, and Loyal
HRD Full 1 $310 271$Bachelor of Communication / Bachelor of Psychology
High skill of communication and socialization
PRD Full 1 $310 271$Bachelor of Communication / Bachelor of Psychology
High skill of communication and socialization
Drivers Full 4 $271 271$ Driver License B1 Skillful Truck Drivers - Honest and Discipline
Sales Person Full 3 150$ + 3% comission 271$1 Year of Marketing experience - psychology test and interview
High skill of communication, socialization, and presentation - not stubborn
27 - - - -Total
Standard Wages are besed on UMR (Upah Minimum Regional) - Regional Minimum Wages - Stated by Indonesian GovernmentRegulation of Transmigration and Labour Minister No. 7 year 2015 about the Minimum Wages* 271$ is Surabaya's UMR
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Resignation of the employee will cost nothing to the company. The employee, however, can ask for a recommendation letter from the company which will be made fairly based on his of her performance while working. Employee with SP2 and above will not get any letter from the company.
5.3 Inventory and Utilities Control
Inventory Control will be done by production workers. There are some forms to be completed each day - to control the stock of ingredients and inventory (the packaging stuffs and also the ready products). Here are the sample :
Electricity Daily Report - Date : ________________________
No. EquipmentWatt spec.
HoursTotal Watt
(kWh)
1 Mixer 2 Dough Sheeter 3 Storage Frezeer 4 Working Freezer 5 All Lamps 6 Air Con 7 8
Total KwH
Type : ____Meses_________________ For : _____________________
Quantity Amount Quantity Amount U Quantity Amount1 12-Sep-14 C/1/-/280-10 28000 10 280000 3 84000 7 1960002 13-Sep-14 7 196000 1 28000 6 1680003 14-Sep-14 C/1/-/280-10 6 168000 6 168000 0 0
C/2/-/300-10 30000 10 300000 3 90000 7 2100004 15-Sep-14 C/2/-/300-10 30000 7 210000 0 0 7 210000
C/3/-/280-8 28000 8 224000 0 0 8 2240000 0
No.
Stock Card (a l l quantity @kg)
Stock Used TotalDate
Packaging Code
Price/kg
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The Eiffel Daily Report DPSPl ---- Total Box @ Storage : _________________
Quantity Amount Amount U Quantity Amount
Dough = _____________kg Dough + Butter = _____________kgSheets =_____sheets to box_____sheets left _____to products
Rework Dough = _____________kg Box (new) = _____________box Box (sold out) = _____________box
7. Bau
Total
5. Imp
6. Gr
3. MP
4. DIY
1. T
2. Gl
Daily Report - DPS Platinum
Date :____________________________
No. Stock Code Packaging
Code Full Price
Stock Used Total Stock
Quantity
5.4 Subcontractors
The Eiffel main subcontractors are PT. Dianjaya Saputra. They are the main food suppliers distributor in Surabaya. They buy a bulk amount of products and they will distribute the products throughout the city. Besides that, we also have our own marketing team to help with the sales.
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6. Financial Plan
6.1 Startup and Operating Needs
Amount Price @ Cost DetailsDepreciation
AmountCapitalised
Land and Buildings 1 $0,00 $0,00 Private Owned $0,00Motor Vehicles - Frozen Truck 4 $20.000,00 $80.000,00 Mitsubishi Dealer $26.666,67Mixer 2 $3.000,00 $6.000,00 Five Star Taiwan Machine $2.000,00Dough Sheeter 2 $3.500,00 $7.000,00 Five Star Taiwan Machine $2.333,33Stainless Working Table 3 $300,00 $900,00 Five Star Taiwan Machine $300,00Assorted Cutter 3 $350,00 $1.050,00 Master Kitchen Pty Ltd $350,00Packaging Area 1 $500,00 $500,00 Master Kitchen Pty Ltd $166,67Storage Freezer 2 $1.800,00 $3.600,00 Master Kitchen Pty Ltd $1.200,00Ezperiment Freezer 1 $1.200,00 $1.200,00 House of Machine Indonesia Pty Ltd $400,00Blast Chiller 1 $2.500,00 $2.500,00 House of Machine Indonesia Pty Ltd $833,33Sample batch Freezer 1 $1.200,00 $1.200,00 House of Machine Indonesia Pty Ltd $400,00Offi ce Cabinet 1 $100,00 $100,00 ACE Hardware Pty Ltd $33,33Ochairwoman Desk 1 $500,00 $500,00 ACE Hardware Pty Ltd $166,67Staff Pantry 1 $300,00 $300,00 ACE Hardware Pty Ltd $100,00Offi ce Desk 1 $500,00 $500,00 ACE Hardware Pty Ltd $166,67Sofa Entertainment Area 1 $800,00 $800,00 ACE Hardware Pty Ltd $266,67Rolling Door 3 $7.000,00 $21.000,00 Aluminium Victory Pty Ltd $7.000,00Storage Cabinet 10 $250,00 $2.500,00 Eco Design Pty Ltd $833,33Promotion and Advertising 1000 $0,35 $350,00 Assets Digital Printing Pty Ltd $116,67
$130.000,00 Yearly Depreciation $43.333,33
SET-UP COSTS
Total
Monthly ExpensesAmount (no GST)
MonthsAnnual
TotalDetails
Electricity $1.300 12 $15.600 PLN ( National Electricity Company) Indonesia Pty. LtdWater $20 12 $240 PDAM Indonesia Pty LtdTelephone $120 12 $1.440 Telkom IndonesiaInternet $30 12 $360 First Media Pty LtdTransportation $400 12 $4.800 The average kilometres expected Vs. gasoline rateWages $5.312 12 $63.744 The Sum of Wages in the Wages Table
$86.184Total Required per Year
RUNNING COST
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The Electricity cost equation
No. Equipment Qt. Watt spec. HoursTota l Watt
(kWh)1 Mixer 2 1200 3,5 8,4
2 Dough Sheeter 2 750 4 6
3 Storage Frezeer 4 1000 24 96
4 Working Freezer 2 600 24 28,8
5 Al l Lamps 40 20 8 6,4
6 Air Con 10 1900 10 190
7
8
335,6
Electricity Average Cost $1.278 per month1$ AUD = Rp. 11.000Electricity Cost per KwH = Rp.1524Storage Freezer and Working Freezer is on 24/7The other appliances are working only at working day (26 days/month)Formula : ((((I10+I11+I14+I15)*26)+((I12+I13)*30))*1524)/11000
Electrici ty Dai ly Report - Date : ________________________
Tota l KwH / day
Sales ReportThe Eiffel Salex Mix
NamePrice
(no GST) Initial Sales Annual Growth%COGS
(no GST) PPS = Puff Pastry SheetPlatinum PPS $40,00 283 3% 10% DPS = Danish Pastry SheetGold PPS $35,00 220 3% 10%Silver PPS $27,50 120 3% 10%Platinum DPS $45,00 82 3% 10%Gold DPS $35,00 200 3% 10%Silver DPS $28,50 65 3% 10%
JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN TotalPlatinum PPS
Number per month 283 284 285 286 287 288 289 290 291 292 293 294 3462Total sales $11.320 $11.360 $11.400 $11.440 $11.480 $11.520 $11.560 $11.600 $11.640 $11.680 $11.720 $11.760 $138.480COGS $1.132 $1.136 $1.140 $1.144 $1.148 $1.152 $1.156 $1.160 $1.164 $1.168 $1.172 $1.176 $13.848Gross Profit $10.188 $10.224 $10.260 $10.296 $10.332 $10.368 $10.404 $10.440 $10.476 $10.512 $10.548 $10.584 $124.632
Gold PPSNumber per month 220 221 222 223 224 225 226 227 228 229 230 231 2706Total sales $7.700 $7.735 $7.770 $7.805 $7.840 $7.875 $7.910 $7.945 $7.980 $8.015 $8.050 $8.085 $94.710COGS $770 $774 $777 $781 $784 $788 $791 $795 $798 $802 $805 $809 $9.471Gross Profit $6.930 $6.962 $6.993 $7.025 $7.056 $7.088 $7.119 $7.151 $7.182 $7.214 $7.245 $7.277 $85.239
Silver PPSNumber per month 120 120 120 120 120 120 120 120 120 120 120 120 1440Total sales $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $39.600COGS $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $3.960Gross Profit $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $2.970 $35.640
Platinum DPSNumber per month 82 82 82 82 82 82 82 82 82 82 82 82 984COGS 369 369 369 369 369 369 369 369 369 369 369 369 4428Total sales $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $44.280
Gold DPSNumber per month 200 201 202 203 204 205 206 207 208 209 210 211 2466COGS 700 704 707 711 714 718 721 725 728 732 735 739 8631Total sales $7.000 $7.035 $7.070 $7.105 $7.140 $7.175 $7.210 $7.245 $7.280 $7.315 $7.350 $7.385 $86.310
Silver DPSNumber per month 65 65 65 65 65 65 65 65 65 65 65 65 780COGS 185 185 185 185 185 185 185 185 185 185 185 185 2223Total sales $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $22.230
TOTAL SALES $34.863 $34.973 $35.083 $35.193 $35.303 $35.413 $35.523 $35.633 $35.743 $35.853 $35.963 $36.073 $425.610
SALES MIX
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Financial Statements
CASH RECEIPTS
START-UP JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL YEAR 2 YEAR 3Initial Investment $130.000 $130.000Platinum PPS $11.320 $11.360 $11.400 $11.440 $11.480 $11.520 $11.560 $11.600 $11.640 $11.680 $11.720 $11.760 $138.480 145.354 149.714Gold PPS $7.700 $7.735 $7.770 $7.805 $7.840 $7.875 $7.910 $7.945 $7.980 $8.015 $8.050 $8.085 $94.710 99.931 102.929Silver PPS $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $3.300 $39.600 40.788 42.012Platinum DPS $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $3.690 $44.280 45.608 46.977Gold DPS $7.000 $7.035 $7.070 $7.105 $7.140 $7.175 $7.210 $7.245 $7.280 $7.315 $7.350 $7.385 $86.310 91.279 94.017Silver DPS $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $1.853 $22.230 22.897 23.584TOTAL INFLOWS $130.000 $34.863 $34.973 $35.083 $35.193 $35.303 $35.413 $35.523 $35.633 $35.743 $35.853 $35.963 $36.073 $555.610 $445.856 $459.232
CASH PAYMENTSSet-up Costs $130.000 $130.000COGSPlatinum PPS $1.132 $1.136 $1.140 $1.144 $1.148 $1.152 $1.156 $1.160 $1.164 $1.168 $1.172 $1.176 $13.848 14.535 14.971Gold PPS $770 $774 $777 $781 $784 $788 $791 $795 $798 $802 $805 $809 $9.471 9.993 10.293Silver PPS $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $330 $3.960 4.079 4.201Platinum DPS $369 $369 $369 $369 $369 $369 $369 $369 $369 $369 $369 $369 $4.428 4.561 4.698Gold DPS $700 $704 $707 $711 $714 $718 $721 $725 $728 $732 $735 $739 $8.631 9.128 9.402Silver DPS $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $185 $2.223 2.290 2.358ExpensesElectricity $1.300 1.300 1.300 1.300 1.300 1.300 1.300 1.300 1.300 1.300 1.300 1.300 15.600 16.692 17.860Water $20 20 20 20 20 20 20 20 20 20 20 20 240 257 275Interest $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Telephone $120 120 120 120 120 120 120 120 120 120 120 120 1.440 1.541 1.649Internet $30 30 30 30 30 30 30 30 30 30 30 30 360 385 412Transportation $400 400 400 400 400 400 400 400 400 400 400 400 4.800 5.136 5.496Wages $5.312 5.312 5.312 5.312 5.312 5.312 5.312 5.312 5.312 5.312 5.312 5.312 63.744 68.206 72.981
TOTAL OUTFLOWS $130.000 $10.668 $10.679 $10.690 $10.701 $10.712 $10.723 $10.734 $10.745 $10.756 $10.767 $10.778 $10.789 $258.745 $136.802 $144.595
Net Operating Cash Flow $0 $24.194 $24.293 $24.392 $24.491 $24.590 $24.689 $24.788 $24.887 $24.986 $25.085 $25.184 $25.283 $296.865 $309.054 $314.637Opening Balance $0 $0 $24.194 $48.488 $72.880 $97.371 $121.961 $146.651 $171.439 $196.326 $221.312 $246.398 $271.582 220.805 450.143Tax Paid $76.060 $79.716 $81.391Closing Balance $0 $24.194 $48.488 $72.880 $97.371 $121.961 $146.651 $171.439 $196.326 $221.312 $246.398 $271.582 $296.865 $220.805 $450.143 $683.389
THE EIFFEL CASH FLOW
6.2 THE EIFFEL BALANCE SHEET
Equity $130.000 Total Required (cash flow sheet)
$130.000
Loan Required $0
ASSETSCurrent Assets
Cash $220.805,00 $450.143,00 $683.389,00Other Current Assets $0,00 $0,00 $0,00Total Current Assets $220.805,00 $450.143,00 $683.389,00
Non-Current Assets
Land and Buildings $0,00 $0,00 $0,00Less accumulated depreciation
$0,00 $0,00 $0,00
Book Value $0,00 $0,00 $0,00
Frozen Trucks $ 80.000,00
$80.000,00 $80.000,00
Less accumulated depreciation
$ 26.666,67
$53.333,33 $80.000,00
Book Value $ 53.333,33
$26.666,67 $0,00
Mixer $ 6.000,00
$ 6.000,00
$ 6.000,00
Less accumulated $ $4.000,00 $6.000,00
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depreciation 2.000,00
Book Value $ 4.000,00
$2.000,00 $0,00
Dough Sheeter $ 7.000,00
$ 7.000,00
$ 7.000,00
Less accumulated depreciation
$ 2.333,33
$4.666,67 $7.000,00
Book Value $ 4.666,67
$2.333,33 $0,00
Stainless Working Table $ 900,00
$ 900,00
$ 900,00
Less accumulated depreciation
$ 300,00
$600,00 $900,00
Book Value $ 600,00
$300,00 $0,00
Assorted Cutter $ 1.050,00
$ 1.050,00
$ 1.050,00
Less accumulated depreciation
$ 350,00
$700,00 $1.050,00
Book Value $ 700,00
$350,00 $0,00
Packaging Area $ 500,00
$ 500,00
$ 500,00
Less accumulated depreciation
$ 166,67
$333,33 $500,00
Book Value $ 333,33
$166,67 $0,00
Storage Freezer $ 3.600,00
$ 3.600,00
$ 3.600,00
Less accumulated depreciation
$ 1.200,00
$2.400,00 $3.600,00
Book Value $ 2.400,00
$1.200,00 $0,00
Experiment Freezer $ 1.200,00
$ 1.200,00
$ 1.200,00
Less accumulated depreciation
$ 400,00
$800,00 $1.200,00
Book Value $ 800,00
$400,00 $0,00
Blast Chiller $ 2.500,00
$ 2.500,00
$ 2.500,00
Less accumulated depreciation
$ 833,33
$1.666,67 $2.500,00
Book Value $ 1.666,67
$833,33 $0,00
Sample Batch Freezer $ 1.200,00
$ 1.200,00
$ 1.200,00
Less accumulated $ $800,00 $1.200,00
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depreciation 400,00
Book Value $ 800,00
$400,00 $0,00
Office Cabinet $ 100,00
$ 100,00
$ 100,00
Less accumulated depreciation
$ 33,33
$66,67 $100,00
Book Value $ 66,67
$33,33 $0,00
Chairwoman Desk $ 500,00
$ 500,00
$ 500,00
Less accumulated depreciation
$ 166,67
$333,33 $500,00
Book Value $ 333,33
$166,67 $0,00
Staff Pantry $ 300,00
$ 300,00
$ 300,00
Less accumulated depreciation
$ 100,00
$200,00 $300,00
Book Value $ 200,00
$100,00 $0,00
Office Desk $ 500,00
$ 500,00
$ 500,00
Less accumulated depreciation
$ 166,67
$333,33 $500,00
Book Value $ 333,33
$166,67 $0,00
Sofa Entertainment Area $ 800,00
$ 800,00
$ 800,00
Less accumulated depreciation
$ 266,67
$533,33 $800,00
Book Value $ 533,33
$266,67 $0,00
Rolling Door $ 21.000,00
$ 21.000,00
$ 21.000,00
Less accumulated depreciation
$ 7.000,00
$14.000,00 $21.000,00
Book Value $ 14.000,00
$7.000,00 $0,00
Storage Cabinet $ 2.500,00
$ 2.500,00
$ 2.500,00
Less accumulated depreciation
$ 833,33
$1.666,67 $2.500,00
Book Value $ 1.666,67
$833,33 $0,00
Promotion and Advertising $ 350,00
$ 350,00
$ 350,00
Less accumulated $ $233,33 $350,00
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depreciation 116,67
Book Value $ 233,33
$116,67 $0,00
TOTAL NON CURRENT ASSETS
$ 86.666,67
$43.333,33 $0,00
TOTAL ASSETS $ 307.472
$ 493.476
$ 683.389
LIABILITIESCurrent Liabilities
Other Current Liabilities $0,00 $0,00 $0,00Total Current Liabilities $0,00 $0,00 $0,00
Non-Current Liabilities
Loans $0,00 $0,00 $0,00Other long term liabilities $0,00 $0,00 $0,00Total Current Liabilities $0,00 $0,00 $0,00
TOTAL LIABILITIES $0,00 $0,00 $0,00EQUITY
Share Capital $130.000,00 $130.000,00 $130.000,00Retained Earnings $177.472,00 $363.477,00 $553.389,00
TOTAL EQUITY $307.472,00 $493.477,00 $683.389,00
LIABILITIES PLUS EQUITY
$307.472,00 $493.477,00 $683.389,00
BALANCED $0,00 $0,00 $0,00
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YEAR 1 YEAR 2 YEAR 3 TOTAL
INCOMETotal Income $425.610 100,0% $445.856 100,0% $459.232 100,0% $1.330.700Cost of goods sold $42.561 10,0% $44.586 10,0% $45.923 10,0% $133.070
Gross Profit $383.049 90,0% $401.270 90,0% $413.309 90,0% $1.197.630EXPENSES
Expensed start up costs $0 0,0% $0Electricity $15.600 3,7% $15.600 3,5% $15.600 3,4% $46.800Water $240 0,1% $240 0,1% $240 0,1% $720Telephone $1.440 0,3% $1.440 0,3% $1.440 0,3% $4.320Internet $360 0,1% $360 0,1% $360 0,1% $1.080Transportation $4.800 1,1% $4.800 1,1% $4.800 1,0% $14.400Wages $63.744 15,0% $63.744 14,3% $63.744 13,9% $191.232Depreciation Cost $43.333 10,2% $49.366 11,1% $55.822 12,2% $148.521
Total Expenses $129.517 30,4% $135.550 30,4% $142.006 30,9% $407.074
Net Profit Before Tax $253.532 59,6% $265.720 59,6% $271.303 59,1% $790.556
Tax (nominal) $76.060 $79.716 $81.391 $237.167
Tax paid $76.060 $79.716 $81.391 $237.167
Net Profit After Tax $177.472 $186.004 $189.912 $553.390
PROFIT AND LOSS STATEMENT
6.3 Break Even Point Analysis - BEP Analysis
Raw Data - excerpt from Income statement
Annual Sales Turnover 425.610 100,00%Cost of Goods Sold 42.561 10,00%
Gross Profit 383.049 90,00%Overheads 129.517 30,43%
Earnings Before Interest & Tax (EBIT) 253.532 59,57%
0 638.415Sales 0 638.415Total costs 129.517 193.359Variable costs 0 63.842Breakeven 143.908 143.908 Fixed costs 129.517 129.517
Graph values This business will have to reach$143.908before it makes any profit
The first 23%of this business year is covering costs, or82days
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$0 $100,000$200,000$300,000$400,000$500,000$600,000$700,000$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000Break Even Point
Sales
Total costs
Variable costs
Breakeven
Sales
Tota
l Rev
enue
/ C
osts
Investor Return
% of ownership100%
Initial Investment $130.000Value of company at end of year 3 $683.389Annual Investor return 140%
INPUT AREA
INVESTOR RETURN
6.4 Key Financial Ratios
RATIOSYEAR 3
Profitability Ratios
Gross profit margin gross profit / sales 90,0% Profitability compared with cost of goods
Net profit margin net profit before tax / sales 59,1% Overall profitability ratio
Return on assets net profit before tax / assets 39,7% Efficient use of company's resources
Return on equity net profit after tax / owners equity 27,8% Efficient use of shareholder's funds
Liquidity Ratios
Current ratio current assets / current liabilities simplified Short term equity to debt
Quick ratio (current assets - stock) / current liabilities simplified Refer to text book
Net working capital current assets - current liabilities simplified Amount used in the day to day running of my business.
Times interest earned net profit before tax / interest 1130,43 How many times can my profit cover my interest obligations
Fixed payment coverage net profit before tax / (interest + lease 17,13 How many times can my profit cover my fixed obligations
lean & loan payment (Interest, Lease payments & loan repayments)
Efficiency Ratios
Total asset turnover sales / total assets 0,67 Refer to text book
Debt ratio total liabilities / assets 0,00 How much debt does the business have compared to my assets
Debt to equity external debts / owners equity 0,00 Leverage of owners funds
Stock turnover annual COGS / average inventory simplify Refer to text book
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7. Exit Strategy
The Eiffel is internally funds and it does not prepared to be a public company - we do not sell shares for now.
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8. Critical Risks and Assumptions
No. Risk Outline Risk Mitigation
1
The Competitors realize that The Eiffel take only 200% of profit and they try to trash the price
Both of their factory is twice bigger than The Eiffel, means that their operational cost is twice then the Eiffel. As trash as their price can be, the calculation shows that they can't take lower than 180% of profit. The Eiffel still can take the 170% profit to compete with the price.
2There is not enough share left to be given to the distributors
The main point is to give percentage fee to the marketing target. If have to, The Eiffel can cut the deal with PT Dianjaya Saputra temporarily - and continue when we have a better market condition.
3There is a traitor among the labour
The CEO control the factory everyday and take full charge of the production process - she keeps every single secret on her hand. The R&D staffs create new ideas, that can't be stopped for being leaked, however, the main recipe for PPS and DPS will always be CEO's confidential data.
4The Market move slower than The Eiffel expect
The Eiffel should change the labour system into part-time / casual job contract - therefore the only production costs to pay are only the freezer's electricity, telephone, internet, and COGS of the inventory.
5The Market move faster than The Eiffel expect
The Eiffel can put more money into the business - expand quickly and pour the profit into the develompent of the company. We will try to take over the Bali market first, as stated on the marketing strategy.
CRITICAL RISK AND ASSUMPTIONS
References
World Statistics of International Tourist Arrival in Indonesia (2012) Retrieved from http://world-statistics.org/result.php?code=ST.INT.ARVL?name=International%20tourism,%20number%20of%20arrivals
The Listed Hotel in Indonesia Tourism (2015) Retrieved from http://www.agoda.com/pages/agoda/default/page_textSearchResult.aspx?asq=7ylWkWYo99jpLRsOqDXpOpGXQ0GJg8tbKUhexgSL7xB0JEcdm7uHXyMmZ%2fZsofbEf8sDuB5RAPA28ZanVIdqw%2fclbERdOhCFh5vF%2bdgZZh2cSjeKj%2b1yn44KFf4a29OW
The Province Minimum Salary Standard according to the Official National Newspaper (2015) Retrieved from http://www.koran-sindo.com/read/925752/149/ump-dki-diputuskan-rp2-7-juta-1416292029
IRRI (International Rice Research Institute) (18 February 2015) Retrieved from http://irri.org/news/media-releases/rice-is-key-to-indonesia-s-food-security-officials-say
Official Website of Rondo and Torng Yuen (2015) http://www.torng-yuen.com/ (2015) http://www.rondo-online.com/
Star Hotels Standard According to European Hotelstars Union (HOTREC (Hotels, Restaurants & Cafés in Europe) http://en.wikipedia.org/wiki/Hotel_rating#European_Hotelstars_Union
Standard Price for Basic Needs http://www.tegalkab.go.id/bahanpokok.php
Appendix
-Advertising Sample- Resume of our Head Production Manager -
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Dianata SjahbanaSous Chef - Patissier - Baker - Unit Production -
Hospitality-------------------------------------------------------------------
-------------------------------------------------------------Personal StatementThe reliable hands in on the kitchen. 7 years experience as the Patissier, Sous Chef, and Unit Production in the France Bakery, Indonesia Cafe, Shangrila and Sheraton Hotel worldwide. Has been working in the bakery, production kitchen (mass party and mass dining - breakfast, high tea, lunch, and dinner) - from the hand kitchen to the senior chef of the kitchen. Used to work with pastry and bread machines. Creative and innovative thinking - used to create new products for bakeries and cafe.
--------------------------------------------------------------------------------------------------------------------------------Education Background1999-2000 Culinary Vocational High School - Jakarta, Indonesia2003 Bachelor of Patisserie Arts , Le Cordon Bleu, France2004 Diplome of Culinary Arts, Le Cordon Bleu, FranceCareer History2004-2005 Chef de Party - Shangrila Barr al Jissah Muscat Oman2005-2007 Senior Chef de Party - Shangrila Vilingilli Maldives2007-2008 Sous Chef - Shangrila Surabaya Indonesia2008-2010 Chef de Cuisine - Sheraton Surabaya Hotel & TowersDuties
To create menu and products for bakery - fulfill the 2 months cycle hotels demand To create 3 kinds of menu for breakfast , high tea, lunch, and dinner for 3 months cycle To produce savoury and sweet desserts To manage the mass production of food at the party To serve guests at the party buffet To train the new trainee of the kitchen / trainee from culinary school - hospitality management student
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To make decision of hiring and firing the kitchen team To keep the standard (hygiene-quality-machine condition-working atmosphere) of the kitchen stays the same. To take care of the food supplies - make sure everything's always ready and in place To be the QC (Quality Control) of the products outing from the kitchen to the guest To be able to control any of the situation and condition happening in the kitchen and in the hotel - especially for party and events
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