INDEX
TOPICPAGE NO.
Acknowledgement 2Executive Summary 4
SWOT Analysis 5Joints Detail 7
Partnership Deed 8Joints Location, Layout &
Employees 9Marketing Plan 10
Financial Documents 13Projected Profit 21
Project Feasibility 22Market Survey 24Questionnaire 26Interpretation 27
1
ACKNOWLEDGEMENT
First and foremost, I would like to thank our Professor to provide me with such an excellent opportunity to bring my idea alive on paper and providing her guidance in completing this project.
I would also like to thanks the library of ------ for providing the books and internet facility which were essential to complete this project.
At the end I would like to thank my friends for their support and ideas in finishing this project.
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An elderly patron of an establishment in Turkey describes the advantages of the hookah lounge as follows:
"Smoking a hookah is nothing like smoking a cigarette...cigarettes are for nervous people, competitive people, people on the run...when you smoke a hookah, you have time to think. It teaches you patience and tolerance, and gives you an appreciation of good company."
A younger customer adds:
"The important thing is not what you put in the pipe, but who is with you while you're smoking...it's a complete experience...in a cafe like this one, you find the good people, the old people, the interesting people. As long as there is a need for company and friendship, as long as people want to stop and think, there will be narghile cafes."
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Executive Summary
Hookah Dhaba (Babua just chilllllllll) is a proposed hookah lounge in the main town of Patna in the most famous shopping complex. The concept of hookah originated In India, once the province of the wealthy; it was tremendously popular especially during Mughal rule. The use of hookahs from ancient times in India was not only a custom, but a matter of prestige. Rich and landed classes would smoke hookahs. Tobacco is smoked in hookahs in many villages as per traditional customs. Smoking molasses in a hookah is now becoming popular amongst the youth in India. It is a growing trend amongst youngsters and adolescents. The new trends emerging are that of non-tobacco hookahs with herbal flavors.
Hookah Dhaba is bringing this concept to Patna in a new flavor. Hookah Dhaba will be a place for friends and families to sit and enjoy their non-tobacco hookah along with exotic coffee in an ambience of true Indian Dhaba.
Patna along with its youngsters is very lucrative markets for this business as a large number of young students go outside Patna for their education to cities like Delhi, Bangalore, Pune, Kolkata etc. where these hookah joints are already in full swing. Hookah Dhaba would be the first of its kind in Patna which would capitalize on these students when they come back to their home and bring the culture back which will be followed by their friends in Patna. Also lack of any other coffee joint will also be a plus point for Hookah Dhaba.
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SWOT Analysis
STRENGTH
First of its kind in Patna.
Nominal rates to attract youngsters.
Situated in the most famous shopping complex in Patna thus the footfall would be enormous.
Word to mouth promotion through young sources like Orkut and Facebook used by the youngsters.
A wide range of hookah flavors will be available.
First Coffee Joint in the city.
WEAKNESS
Limited set of customers
Social problems.
OPPURTUNITY
First Movers advantage in starting the business.
The age group of 18-25 can be easily attracted.
The brand name can be expanded in coming years.
There is no competition in the market.
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THREATS
Different new competitors may enter the market to share the Market Profit
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JOINT's DETAILS
Joint's name Hookah Dhaba
Tag line Babua just chilllllllll
Address Shop no. 32/B Maurya Lok
Patna 800024
Contact No. 0940001502
Email [email protected]
Partners details
NAME QUALIFICATION KEY RESPONSIBILITY
Aditya Ranjan Chatterjee
BBA (Marketing) Customer service, Front Office, and
over all management
Sourav Shekhar B.Com (H) Cash and fund management
Abhyuday Das HOTEL MGT. Management with supplier and
creditors
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Partnership DeedFollowing are the agreements made between the Partners:
1) Profit Sharing Ratio has been fixed to be 1:1:1
2) Partners Fixed Capital
Partners Name Fixed Capital (Rs.)
Aditya Ranjan Chatterjee 2,00,000
Sourav Shekhar 2,00,000
Abhyuday Das 2,00,000
3) Interest on Capital will be given @ 5% p.a. on Fixed Capital of the partners.
4) Salary of Rs. 5000 p.m. will be given to all the partners for their help in running the business.
5) Operation of Bank A/c will be done by Aditya Ranjan Chatterjee & Sourav Shekhar jointly.
6) Admission & Retirement – Admission of a new partner would only be allowed by the consent of all existing partners.
7) Commencement of business – 1st June 2010
8) A general reserve out of net profit will be created @ 25%.
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Joint’s Location, Layout and Employees
LOCATION
The location of the joint has been selected in the most famous shopping complex in Patna i.e. Mauraya Lok. The place is the usual hangout area for the youngsters thus is suitable for the joint. The shop has been taken on rent on an agreed amount of Rs. 15000 p.m.
LAYOUT
The layout of the plan has been planed by professional designers. The shop has been divided into two zones i.e. smoking and non-smoking zone. People who only wish to have coffee and chill can find themselves comfortable in the non-smoking zone.
EMPLOYEES
The joint will be run by a total of 5 employees. The salary for their service would be Rs. 3500 p.m. The employees would be selected by the method of interview. They would be supervised by any one of the Partners at a time.
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MARKETING PLANThe success and failure of any project depends largely upon its marketing. The marketing for Hookah Dhaba would be done in an aggressive way trying to target the targeted customer. The marketing for the joint has been planned in the following ways.
A) Newspaper Ads
B) Hoardings
C) Pamphlets
D) Local Cable TV
Targeting
Our target segment will be
The youth
Specifically the age group of 18 – 26.
College going crowd.
Student coming back home from other metro cities.
Brand Name
Hookah Dhaba: The name has been chosen to attract the attention of the potential customers. The name has a “desi” touch to it which will attract the attention of the Bihari crowd.
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Tag Line
Babua just chilllllllll is a cheesy line selected as a tag line for the joint. It is mixture of desi with videsi. The tag line specifies that the person entering the joint will forget all his/her worries and enjoy the time spent there.
Product
The Hookah Dhaba serves 25 different flavors of hookah along with a variety of coffee and sandwiches.
The sandwiches are outsourced from SWEET HOME one of the best bakery shops in Patna.
Price
The normal hookahs have been priced at Rs. 150 and the deluxe Hookah at Rs. 180. Bothe the prices are inclusive of a change of coal and VAT.
The coffees and Sandwiches have been priced at the following rates
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Product Price(Rs.)Coffee Espresso 40 Macchiato 65 Cappuccino 45 Cafe Latte 50 Chococinno 40 Cafe Frappe 75Sandwiches
Veg masala sandwich 40
Veg mushroom sandwich 50
Veg paneer sandwich 50
Non-veg Sandwich 40
Non-veg Mutton Sandwich 50
Non-veg Mixed Sandwich 65
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Financial Documents
Opening Balance Sheet as on 1 June 2010
Liabilities Ant.(Rs.) Assets Amt.(Rs.)Capital Furniture & Fixtures 78,500
Aditya 2,00,000 AC 85,000Sourav 2,00,000 Music System 17,500
Abhyuday 2,00,000 Kitchen Equipments 56,500 Cash Register 5,000Loan 1,00,000 Cash in Hand 5,000 Bank Balance 45,000 Security Deposit 1,57,500 Preliminary Expenses 2,75,000 7,00,000 7,00,000
Schedule 1 – Furniture & Fittings
Product Qty. Price TotalSingle Set Sofa 7 6,000 42,000
Tables 13 1,000 13,000Chairs 15 700 10,500Lights 5,000
Hookah Stand 8 1,000 8,000 78,500
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Schedule 2 – Kitchen Equipments
Product Qty. Price TotalCoffee Machine 2 1,000 2,000
AquaGuard 1 12,000 12,000Micro Oven 1 12,500 12,500Refrigerator 2 20,000 20,000
Utensils 10,000 10,000 56,500
Schedule 3 – Preliminary Expenses
Particulars PricePainting 80,000Interior 1,00,000
Advertisement 70,0002,50,000
Schedule 4 – Security Deposit
Particulars CostShop 1,50,000
Telephone 5,000Electricity 2,500
1,57,500
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Profit Loss Statement
Particular Amt(Rs.) Particular Amt(Rs.)To Opening Stock - By Sales A/c 3762120To Purchase A/c 1601250 By Closing Stock A/c 2000To Gross Profit A/c 2162870 3764120 3764120
Particular Amt(Rs.) Particular Amt(Rs.)To Salary 175000 By Gross Profit 2162870To Newspaper & periodicals 500 To Rent 150000 To Electricity 50000 To Telephone 7800 To Insurance 1164 To Conveyance 2500 To Interest On loan @ 8% 6667 To General Expenses 7200 To Rates & Duties 470265 To Preliminary Exp. Written off @25% 68750 To Depreciation 20300 To Printing & Stationeries 7500 To Provision for Income Tax 369324To Net Profit 825900 2162870 2162870
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Particular Amt(Rs.) Particular Amt(Rs.)To Partners Salary By Net Profit 825900
Aditya 75000 Sourav 75000
Abhyuday 75000 To Interest on Capital
Aditya 8333 Sourav 8333
Abhyuday 8333 To General Reserve 206475 To Partners A/c
Aditya 123142 Sourav 123142
Abhyuday 123142 825900 825900
Schedule 1:
Calculation of Sales
The average sale of the one day in the first month is calculated in the following table:
Item Unit Sold M.P. (Rs.) Total(Rs.)Normal Hookah 25 150 3750Deluxe Hookah 10 180 1800
Coffee 50 52.5 2625Sandwich 30 313.46 1229
9404
The price of Coffee and Sandwich has been taken as a sum average. And the unit sold is an assumption taken rationally.
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Thus the Sale for the month of June is Rs. 9404 * 30 = Rs. 282120
The Sale for the consecutive months is assumed rationally in the following table:
Month Sale(Rs.)June 282120July 350000August 400000September 400000October 425000November 415000December 450000January 425000February 415000March 400000 3962120
Schedule 2:
Calculation of Purchase
The Cost Price of products is given below:
Item Unit sold C.P TotalNormal Hookah 25 35 875Deluxe Hookah 10 50 500
Coffee 50 35 1750Sandwich 30 25 750
3875
The Cost Price of Coffee and Sandwich has been taken as a sum average.
Thus the Cost for the month of June is Rs.3875 * 30 = Rs.116250
The Cost for the consecutive months is assumed rationally in the following table:
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Month Sale(Rs.)June 116250July 135000August 165000September 165000October 170000November 167500December 180000January 170000February 167500March 165000 1601250
Schedule 3:
Calculation of Depreciation:
Fixed Assets Rate(%) Depreciation(Rs.)Furniture & Fixtures 10 7850
AC 10 8500Music System 5 875
Kitchen Equipments 5 2825Cash Register 5 250
20300
Schedule 4:
Calculation of Tax
Net profit 1195224Income tax @ 30% 358567.2Education Cess @ 2% 7171.344Secondary & higher secondary cess @ 1 % 3585.672total tax 369324.216Net profit after Tax 825899.784
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Balance Sheet as on 31st march 2010
Liabilities Amt.(Rs.) Assets Amt.(Rs.)Current Liability Furniture & Fixtures 70650
Provision for tax 369324 AC 76500General Reserve 206475 Music System 16625Capital Kitchen Equipments 53975
Aditya 200000 Cash Register 4750Sourav 200000 Cash in Hand 12549
Abhyuday 200000 Bank Balance 650000Loan 75000 Security Deposit 157500
Preliminary Expenses 206250Closing Stock 2000
1250799 1250799
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Cash and Bank A/c
Particular Amt.(Rs.) Particular Amt.(Rs.)To Balance b/d 50000 By Purchase 1601250To Sales 3762120 By Loan 25000 By Salary 175000 By Newspaper & periodicals 500 By Rent 150000 By Electricity 50000 By Telephone 7800 By Insurance 1164 By Conveyance 2500 By Interest On loan @ 8% 6667 By General Expenses 7200 By Rates & Duties 470265 By Printing & Stationeries 7500 By Partners Salary Aditya 75000 Sourav 75000 Abhyuday 75000 By Interest on Capital Aditya 8333 Sourav 8333 Abhyuday 8333 By Partners A/c Aditya 123142 Sourav 123142 Abhyuday 123142
By Balance c/d 662549
3812120 3812120
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PROJECTED PROFIT
Year % increase Estimated Profit Cumulative2010-11 825900 8259002011-12 15 949785 17756852012-13 20 1139742 29154272013-14 22 1390485 43059122014-15 25 1738107 6044019
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Project Feasibility
By feasibility analysis we mean appraising the project. Project appraisal is critical as it calls for a multi dimensional analysis of the project.
In our case the feasibility pertains to Commercial Feasibility, Financial Feasibility and Social Cost Benefit Feasibility.
COMMERCIAL FEASIBILITY
The survivability, sustainability and profitability of any venture depend on its commercial success. The various parameters that commercial feasibility are:
Demand for the Service Patna till date has no coffee joint or a hookah joint. HOOKAH DHABA will club the demand for these both services. It will provide a place for the youngsters to hangout or as our tag line says take a chill.
Pricing of the service The price for the products has been fixed according to the customer feedback obtained.
The prices have been kept at the very minimum level to ensure minimum profitability. The profits can be increased by increasing the prices but it was the intention of the partners to
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ensure the product does not become unreachable to the targeted customer.
Moreover a Hookah is usually shared between 3 people bringing the cost per head much lower than it is.
Competitive edge There is no competition currently in the market thus a certain degree of monopoly can be exercised.
FINANCIAL FEASIBILITY
As the cost incurred in undertaking such a project is not very large, funds can easily be contributed due to its small nature. All the partners in this venture are contributing in equal proportions. The loan taken is of very small in nature and can be repaid very easily in four years.
The return on investment in the first year of operation is expected to be 118%.
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Market SurveySCOPE OF THE SURVEY
For any survey there is a workable area defined both for collection of data and for using the data for making decision. It is due to many constraints in our case the main constraint was time and at the same time the survey could be conducted in a limited geographical area.
The survey made by us was mainly being conducted in Patna as well as the method adopted was to visit various places where youngsters hang out and ask them to fill up the questionnaire.
TIME SCOPE
Our project study was restricted to a time period of one and half week during the month of September-October.
METHODLOGY
SOURCE OF DATA
There are two sources of collecting data:1. Primary Source2. Secondary Source
The survey conducted has been limited to the Market areas of Patna.
Primary data was collected in the form of survey through the markets by asking some close and open ended questions which
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helped in analyzing the changing trends and its effect on already existing ones.
Secondary data was collected through the Internet and past data.
TYPE OF SAMPLING
Simple random sampling
SIZE OF SAMPLING A total of 125 people were surveyed.
DATA COLLECTION INSTRUMENT
Questionnaire & Internet
RESEARCH LIMITATION
The study could suffer from the following limitation:1. Project is based upon data collected from Patna therefore
result may not be generalized for whole of Bihar & India.
2. Correctness of survey is subjected to the correctness of the respondents.
3. This project was to be completed within a short span of time.
4. Study is based on a sample survey therefore it has some inherent shortcoming of a sample study.
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5. Some people had some personal reasons for not responding to some of the questions.
QUESTIONNAIRE
1.) Name:
2.) Age: 3.) Gender : Male/Female
4.) Profession: Student/Self Employed/Service/Other 5.) Avg. Monthly Expenditure on Entertainment (movies, pizza, burger, disco, pub, sheeshaa etc.)
0-500 500-750 750-1000 1000-1500 1500-above
6.) Have you heard about Hookah Pubs: Yes No
7.) Have you smoke Hookah: Yes No
8.) What makes your Hookah experience special : (Multiple Choice)
Ambience Food Mock tails Coffee Friends Music 9.) Which flavours do you like the most :
10.) Do you consider smoking Hookah safe (comment)
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INTERPRETATION
1) Average age = 23
2) Avg. Monthly Expenditure on Entertainment (movies, pizza, burger, disco, pub, sheeshaa etc.)
0-500 500-750 750-1000 1000-1500 1500-above
0-500
500-750
750-1000
1000-1500 <1500
Interpretation
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The people spending money on these services are price conscious and charging high price on the products will be injurious for the health of the business.3) Have you heard about Hookah Pubs: Yes No
80%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Series1
Series1 80% 20%
Yes No
InterpretationA lot of people have heard about Hookah Bars. Thus it would be beneficial for the business.
4) Have you smoked Hookah: Yes No
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40%
60%
0%
10%
20%
30%
40%
50%
60%
70%
Series1
Series1 40% 60%
Yes No
Interpretation
It shows that not many people have actually ever tasted hookah, thus the joint would attract people due to their curiosity.
5) What makes your Hookah experience special : (Multiple Choice)
Ambience Food Mock tails Coffee Friends Music
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40%
20%
10%
70%
85%
65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Ambience Food Mock tails Coffee Friends Music
Series1
Interpretation
The above data shows that customers need good company for spending their time at the joint along with it coffee came out as a important choice.
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