7/29/2019 pfr on bakery
1/61
1
A
FEASIBILITY REPORT
ON
BEYOND BREAD BAKERY
of
BACHOLORS OF BUSINESS ADMINSTRATION
by
TWINKLE MALHOTRA
(BBA/4510/10)
AKSHITA CHAUHAN
(BBA/4528/10)
PRIYA SAXENA
(BBA/4530/10)
DEPARTMENT OF MANAGEMENT
BIRLA INSTITUTE OF TECHNOLOGY
MESRA-835215, RANCHI
2012
7/29/2019 pfr on bakery
2/61
2
DECLARATION CERTIFICATE
This is to certify that the work presented in the feasibility report onBeyond
Bread Bakeryentitled in partial fulfillment of the requirement for the award of
Degree of Bachelors of Business Administration of Birla Institute of
Technology Mesra, Ranchi is an authentic work carried out under my
supervision and guidance.
To the best of my knowledge, the content of this thesis does not form a basis
for the award of any previous Degree to anyone else.
PROFESSOR: Meenakshi Sharma
Department of Management
Birla Institute of Technology
Mesra, Ranchi
7/29/2019 pfr on bakery
3/61
3
MEMBERS OF GROUP
S.No ROLL NO. NAME
1. 4510 TWINKLE MALHOTRA
2. 4528 AKSHITA CHAUHAN
3. 4530 PRIYASAXENA
7/29/2019 pfr on bakery
4/61
4
TABLE OF CONTENTS
S.No PARTICUALAR PAGE
NUMBER
1. Acknowledgment 52 Preface 63 Executive Summary 74 Introduction to Beyond
Bread Bakery8
5 Environmental Scanning 10
6 Technical Feasibilty 127 Marketing Feasibilty 328. Financial Feasibilty 449 Conclusion 58
10 Bibliography/Webography 59
7/29/2019 pfr on bakery
5/61
5
ACKNOWLEDGEMENT
Our sincere thanks to our teacher Mrs. Meenakshi Sharma, BIT Mesra, Noidaextension Centre for extending all the support and for her ideas and
knowledge which acted as preliminary information for all the project work.
She was always ready with answers to all my doubts. Finally, I would
thank my friends for their valuable suggestions and inputs that proved to
be of invaluable assistance, and constantly motivated me to learn as much as
possible.
7/29/2019 pfr on bakery
6/61
6
PREFACE
Feasibility reports address things like where and how the business will operate.
They provide in-depth details about the business to determine if and how it can
succeed, and serve as a valuable tool for developing a winning business plans.
This project studies and analyses various parameters that decide the establishment
of a Beyond Bread Bakery and whether the venture shall be feasible or not.
The project has been divided into four major branches of feasibility study, namely,
technical, human resource, marketing and financial.
Our team has made an all out effort to present a comprehensive feasibility report
and depict the feasibility of the project.
We hope that this project will receive a warm welcome from Birla Institute Of
Technology.
Valuable suggestions from the teachers and students are welcome for the
improvement of the project.
7/29/2019 pfr on bakery
7/61
7
EXECUTIVE SUMMARY
This project is a feasibility report for establishing a Beyond Bread Bakery. Thename of our partnership firm has been decided as Beyond Bread Bakery. We will
enter into the business with breads, buns, toasts, khari and cream rolls as our chief
products. Legal, technical, marketing & financial feasibility have been covered in
this project.
For the legal feasibility, we have shown laws that govern Beyond Bread Bakery
production and products.
Technical feasibility includes raw materials, machineries required for production
and the production process for different products. These have been decided after
visiting bakeries in Noida and conducting a small survey for dealers.
Marketing feasibility covers the marketing mix for our firm, marketing strategy
adopted and the market research conducted for consumers and dealers of Beyond
Bread Bakery products. The analyses of these surveys show the customer trends
7/29/2019 pfr on bakery
8/61
8
for Beyond Bread Bakery products and the pattern of demand and supply in the
Beyond Bread Bakery industry.
The workforce required by the firm is specified in human resource feasibility.
Estimated costs, sales, profits make the financial feasibility. Ratio analysis and
break even sales are also covered in this part.
7/29/2019 pfr on bakery
9/61
9
INTRODUCTION TO
BEYOND BREAD BAKERY
7/29/2019 pfr on bakery
10/61
10
PROJECT AT A GLANCE
BEYOND BREAD BAKERY
Name: Beyond Bread Bakery
Product: Breads, buns, Cream rolls, Tea cakes
Status: Small Scale
Address: shop no.-2, C block market, sec- 41, Noida 201301
Constitution: Partnership Firm
Date of incorporation: 12th NOV 2012
Cost of project: Rs. 62, 18,180
7/29/2019 pfr on bakery
11/61
11
Source of finance: Partners capital - Rs.30, 47,525
Bank Loan - Rs.31, 09,090
ENVIRONMENTAL
SCANNING
SWOT ANALYSIS
A scan of the internal and external environment is an important part of the strategicplanning process. Environmental factors internal to the firm usually can beclassified as strengths (S) or weaknesses (W), and those external to the firm canbe classified as opportunities (O) or threats (T). Such an analysis of the strategicenvironment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates. Assuch, it is instrumental in strategy formulation and selection.
7/29/2019 pfr on bakery
12/61
12
The SWOT Analysis of our firm is
The prices of our products are very reasonable and less than ourcompetitors.
New and different varieties of breads have been introduced which shall giveus the benefit of product differentiation.
Our sales are through tie-ups with grocery stores and supermarkets across
Noida. This gives us a wide consumer base and a chance to serve different
levels of customers.
The firm also gives a little more commission to its distributors to encouragedealership.
The labour required does not need any specific qualification & skill and
hence can be made easily available.
Beyond Bread Bakery products are perishable items hence need to be soldas soon as possible to gain maximum benefit. The customers also prefer
fresh products. But the far location of the factory can increase the timebetween baking and actual selling.
Our Beyond Bread Bakery has introduced few Beyond Bread Bakery itemsfrom the possible product lines. We are not making cakes, pastries,chocolates and other various products. This limited menu can be seen as aweakness.
We are not introducing our own outlets but are selling through tie-ups acrossthe city. This delays our brand establishment time.
Expansion of the product line in the future with the introduction of biscuitsand cakes and pastries.
Scope for expansion with the establishment of our own outlets and BeyondBread Bakery cafs
Growing concern for health and multigrain food products shall become areason for increase of our sales of food items such as brown breads, tomato-spinach bread and white-coriander bread.
7/29/2019 pfr on bakery
13/61
13
Severe competition in the industry with well-established players like Modernbreads, Bakers Street,Bon-Bon,Top Breads,Bread Bakery etc.
TECHNICAL FEASIBILITY
7/29/2019 pfr on bakery
14/61
14
OUR PRODUCTS
WHITE BREAD
BROWN BREAD
WHITE CORIANDER BREAD
7/29/2019 pfr on bakery
15/61
15
TOMATO SPINACH BREAD
PAV
DABELI
7/29/2019 pfr on bakery
16/61
16
7/29/2019 pfr on bakery
17/61
17
TUTTI FRUITY
7/29/2019 pfr on bakery
18/61
18
CHOCOLATE
7/29/2019 pfr on bakery
19/61
19
StarterOften referred to as sourdough, this is a pre-made mixture of flour water and
naturally occurring yeast. A portion of the starter from the previous day is included
in the next days starter.
The starter is a continuous and dynamic mixture. It is
allowed to develop until it has reached its
maturity for many hours and then it is included in themixing process.
Starter imparts a sour flavor and develops a distinctivecrust.
MixingIn the mixing step the ingredients of the recipe are incorporated into a
homogeneous mixture and then developed. This is a two stage process.
First everything (flour, water, salt and leavening) is mixed together and water is
added gradually on a low speed. After the appropriate amount of water is added thesecond stage of gluten formation and development begins.
PACKAGING
SLICING
COOLING
BAKING
PROOFING
SHAPING
PRE-SHAPING
MIXING
7/29/2019 pfr on bakery
20/61
20
In gluten development, or strength, the gluten is formedby the combining of the water and protein in the flour.The gluten is developed by the stretching and folding ofthe strands (or kneading). Gluten developmentbecomes the foundation and structure for the bread.Here begins the first fermentation stage. (fermentationis the conversion of carbohydrates (sugars) to alcohol
and CO2) At this point the dough will spring back when touched.
Pre shape
In this step the dough is given a shape and divided into proportional sizes
In our process we shape all loaves first into rounds.
Here some of the developing gas is worked out by hand.Once rounded the dough is allowed to rest. Generally wecover the dough to keep from drying and crusting over. In ourcase the resting is usually 10-20 minutes.
ShapingOnce the dough is relaxed the final shape is given.
Here the excess gases are expelled very gently by pressing and squeezing the
7/29/2019 pfr on bakery
21/61
21
dough by hand. The expulsion of the gases makes for a more uniform loaf of breadand less air pockets. By expelling the gases the fermentation process is also
rejuvenated and slightly accelerated. Once shaped, the dough is placed on flourlined pans or boards.
ProofingAt this point fermentation is allowed to take its course in a warm and humidatmosphere while the dough is covered.
This type of proofing, combined with other details of the bread making process,gives our bread its uniqueness, depth of flavor and crispy crust. Here the doughferments (or rises) to a desired volume and consistency. Ideally the dough should
be soft and slightly pliable. If pushed with a finger it should leave an impression.
BakingDuring the initial baking there is a tremendous burst of gas that occurs called ovenspring.
To allow for controlled tearing the bakers score(make cuts to) the loaves. The cuts create aweak area for the expansion to occur. This iswhere the final result can be experienced. Thesight of warm fresh baked bread being pulled
7/29/2019 pfr on bakery
22/61
22
from the oven, the smell of freshly baked bread and the sound of the cracklingcrust is where the results of all the hard work are realized.
CoolingThe bread formed is then allowed to cool for some time.
PackingThe ready bread is then packed and wrapped. The seal and logo of the firm isimprinted on the packing. Thus the final product is ready to be sold.
The process for making toast starts with bread as the raw material.
Cut the slices of bread in the desired shape of toasts.
Butter it up liberally
Add salt and pepper to taste
Pour hot milk over the toast
Let all that soak in.
The toasts are ready. After proper packing, they are ready
to be sold
Rub solidified ghee into flour till crumbly.
Make a well in center. Add salt in it. Add 1 cup of cold water and mix well till dough is formed. Use more water ifrequired, to make a soft dough.
Knead for 3-4 minutes till smooth. Keep aside covered for 10 minutes. Roll into a rectangle, of the desired size, with help of dry flour for dusting. Dust
away excess flour. Spread fat over the rectangle keeping a 0.5 margin all around. Roll rectangle into a tight roll, pressing sides to keep ghee inside intact. Dust liberally with dough, place in freezer for 15 minutes. Remove, roll back to a
rectangle. Brush with very little ghee. Fold one-third of the outer portion onto the central portion.
7/29/2019 pfr on bakery
23/61
23
Brush with flour, return to chiller for 15 minutes. Roll again, cut into desired shapes (rectangle, triangle, etc.).
Place on a greased baking sheet, brush with ghee. Place in a preheated oven at 200 degree Celsius for 15 minutes. Reduce thereafter to minimum (50C or lower) for 10 minutes to allow drying out. Remove place on racks till fully cooled, before storing in airtight container.
PLANT LAYOUT
The plant layout of the factory building and the planned interior setup is
depicted below:
7/29/2019 pfr on bakery
24/61
24
LOCATION ANALYSIS
The selection of location plays a vital role for the growth. We have decided to
establish our production unit as well as the administrative office in our factory
building in Noida.
Factory & Administrative office address:
Beyond Bread Bakery,
Shop no.-2,C Block Market,Sector-41,
Noida, U.P.
Area: 3600 sq. feet
Cost of land: 16, 42,000 including documentation charges and agents
commission.
Reason for selecting the site:
Fast growing area
Easy availability of land and building at reasonable rates.
Easily accessible location
Easy availability of raw materials and amenities like electricity and
water as the whole area is an industrial site.
Easy availability of the labour in industrial area.
PROCUREMENT OF RAW MATERIALS
The estimated daily requirement of ingredients is:
S.NO INGREDIENTDAILY REQUIREMENT
(in Kgs.)
PRICE PERKg./Ltr.
1. Maida 400 17
2. Wheat Flour 50 17
3. Yeast 12 180
4. Milk 57 22
5. Vegetable Oil 12 60
6. Sugar 23 30
7. Butter 15 1008. Brown Sugar 4 409. Baking Powder 2.5 90
7/29/2019 pfr on bakery
25/61
25
10. Curd 8 5011. Salt 10 5
12. Spinach leaves 5 1713. Tomato 5 30
14. Cumin powder 0.2 100
15. Red chili powder 0.2 250
16. Cinnamon 0.2 10017. Coriander 0.7 100
18. Ginger 0.350 75
Apart from the above mentioned ingredients, we shall also need the following
ingredients on weekly basis.
S.No. INGREDIENT WEEKLYREQUIREMENT
PRICE PERKg/gms.
1. Tutti-Fruity 1.5 kg 80
2. Choc powder 300 gms 200
3. Cocoa powder 300 gms 200
The ingredients will be purchased from local suppliers at Kundlimarkets.
SPECIFICATION OF MACHINERY
7/29/2019 pfr on bakery
26/61
26
NAME Deck oven(in-built proofer)
QUANTITY PURCHASED 1
SUPPLIER Canon engineering industries
PRICE Rs. 2,64,000
WEIGHT 490 kg
CAPACITY 9 trays
FUEL Gas-fired
NAME Dough Mixer
QUANTITY PURCHASED 3
SUPPLIER Canon Engineering Industries
PRICE PER UNIT Rs. 46,500
WEIGHT 285 kg
CAPACITY 25 kg
FUEL Electric fired
7/29/2019 pfr on bakery
27/61
27
NAME Dough moulder
QUANTITY PURCHASED 2
SUPPLIER Canon Engineering Industries
PRICE PER UNIT Rs. 42,350
WEIGHT 290 kgs
CAPACITY 80 kg/hour
FUEL Electric fired
7/29/2019 pfr on bakery
28/61
28
NAME Sugar Grinder
QUANTITY PURCHASED 1
SUPPLIER Kaps Engineers
PRICE Rs. 35,000
WEIGHT 250 kg
CAPACITY 135 kg/hour
NAME Packing Machine
QUANTITY PURCHASED 2
SUPPLIER Apple Beyond Bread BakeryMachinery Pvt. Ltd.
PRICE Rs. 47,650
WEIGHT 265 kgs
7/29/2019 pfr on bakery
29/61
29
NAME Bread Slicer
QUANTITY PURCHASED 2
SUPPLIER Canon Engineering Industries
PRICE Rs. 38,000
WEIGHT 270 kgs
CAPACITY 300 loaves per hour
Capable of slicing bread upto 25 cm long
NAME Freezer
QUANTITY PURCHASED 2
SUPPLIER KPM Industries
7/29/2019 pfr on bakery
30/61
30
PRICE Rs. 16,400
WEIGHT 300 kgs
NAME Mixer Grinder
QUANTITY PURCHASED 1
SUPPLIER Local Shop
PRICE Rs. 3,600
7/29/2019 pfr on bakery
31/61
31
NAME Rolling Racks
QUANTITY PURCHASED 6
SUPPLIER KPM Industries
PRICE Rs. 7500
CAPACITY 7 storey
7/29/2019 pfr on bakery
32/61
32
NAME Trays
QUANTITY PURCHASED 100
SUPPLIER KPM Industries
PRICE PER UNIT Rs. 200
7/29/2019 pfr on bakery
33/61
33
NAME Stainless steel utensils
SUPPLIER Local Shops
PRICE Rs.83,400
7/29/2019 pfr on bakery
34/61
34
MARKETING FEASIBILITY
7/29/2019 pfr on bakery
35/61
35
MARKETING MIX
PRODUCT
The product is the heart of the marketing exchange. Customers buy product to
solve problems or enhance their lives and thus the marketer has to ensure that the
product can fully satisfy the customers, not just in functional terms but also in
psychological terms.
A product is physical good, service, idea, person or place that is capable of
offering tangible and intangible attributes that individuals or organization regard as
to necessary, worthwhile or satisfied that they are prepared to exchange money,
patronage or some other unit of value in order to acquire it.
In this report, our products are breads and buns, cream rolls, toasts and khari and
tea cakes.
PRODUCT LEVEL
7/29/2019 pfr on bakery
36/61
36
PRODUCT LEVEL CHART FOR BEYOND BREAD
BAKERY
Core benefit includes the benefit that the
product provides to the customers to
satisfy their needs.To satisfy hunger
In the basic product the marketer has to
turn the core benefit into a basic product.
This is the actual tangible item thatpeople purchase.
Beyond Bread Bakery
products like Breads
Toasts/ Khari
Tea cakes
Cream rolls
POTENTIAL
LEVEL
AUGMENTED
LEVEL
EXPECTED
LEVEL
BASIC
PRODUCT
CORE
BENEFIT
7/29/2019 pfr on bakery
37/61
37
At this level, the marketer prepares anexpected product, a set of attributes and
conditions buyers normally expect when
they purchase this product.
Good taste
Good quality
Varieties
Purity and no
adulteration
Attractive packaging
This is the non tangible elements that
are perhaps provided in addition to thephysical parts. The marketer prepares an
augmented product that exceeds
customer expectations. Brand
positioning & competition takes place at
this level.
Diet products
Sugar free or low
calorie products
Free home delivery
At this level, the potential product
encompasses all the possible
augmentation and transformations.
The product or offering might undergo
future.
Mix flavour bread
having different flavours
in the same slice
Breads and butter-
jam-cheese-chopped
vegetables-ketchup in
the same packet
PRICE
The price is the only component in the mix that generates revenue, while other
components generate costs.
Price means consideration of any goods or services that a customer paid to the
producer.
To a manufacturer, price represents the quality of money received by the firm on
sales of its products. To a customer, it represents monetary scarifies and hence his
perception of the value of the products.
7/29/2019 pfr on bakery
38/61
38
Depending on the objective, the Beyond Bread Bakery can set the prices. As far as
Beyond Bread Bakery is concerned, it has the objective of the selling its products to
the consumer at reasonable price and offer good quality.
In order to arrive at an acceptable price level, the manufacturer needs to have the
information on the 3 Cs namely Customer, Competition and Cost structure of the
firm.
Every individual consumes Beyond Bread Bakery products. Hence, our firm has
decided prices that suit everyone.
The prices of some of our products have been kept lower than our competitors so
as to penetrate the whole market and grasp the maximum benefits from the market.
PRICE
COMPETITION
COST
STRUCTURE
OF THE
FIRM
CUSTOMER
7/29/2019 pfr on bakery
39/61
39
An optimum cost structure has been adopted that enables the firm to earn a
reasonable profit and minimizes wastage of resources and losses. We have priced
our product somewhere near the prices of the competitors considering the following
objectives:
Survival:
As we shall face intense competition survival in the market is our short-term
objective. In the long run, we shall work for new innovative varieties offering our
customers wider choices.
Maximization of market share:
Our long-term objective is to become a role player in this market. We shall try toachieve this by charging less than our competitors price.
7/29/2019 pfr on bakery
40/61
40
ITEM VARIETY PRICE
WHITE BREAD
Small
Medium
Large
09
15
25
BROWN BREAD
Small
Medium
10
20
TOMATO SPINACH
Small
Medium
12
20
WHITE CORIANDER
Small
Medium
12
20
Pizza bread 8 09
Dabeli bun 08
Pav
Small
Medium
10
20
Milk
Jeera
15
17
Butter
Jeera
18
20
Vanilla
Strawberry
08
08
7/29/2019 pfr on bakery
41/61
41
PLACE
The location of the plant is a very important aspect in economic analysis of any
project as it plays a vital role in continuing life of the business as in future. The firm
has to leverage the advertisement while operating with location of plant as the
biggest constraint.Location of plant and industry means a specific site in the region where the
business units is to be started for selecting location or the pertinent factors
influencing the location have to be considered and weighted out very carefully.
Place: Noida
Address:Shop no.-2,C block market,sector-41,
Noida.
Why have wechosen Noida?
Native place
An emerging mega city
Easy availability of building
To create the brand image
Easily accessible location.
Area: 3600 sq. feet.
DISTRIBUTION CHANNEL
It means the channel through which goods passed from source to destination that
is from manufacture to retailer.
Company should pay attention to how the product is distributed. They should have
proper distribution channel so that consumers may get rid of the problems
regarding unavailability of the product.
Our firm uses the following distribution channel :
7/29/2019 pfr on bakery
42/61
42
In order to have the seamless distribution of the finished goods to the Dealers i.e.
Supermarkets and Grocery stores, we have also purchased two tempos and we
solely have our own private medium of transportation.
The ready Beyond Bread Bakery goods are distributed to grocery stores and
supermarkets having our dealership. These stores then make the final sale to the
consumers.
PROMOTION
Promotion is the part of the marketing mix that many people consider to be
"marketing" but this is really the end result of all your hard work in defining products
to satisfy needs and pricing it accordingly.
Promotion decisions are those related to communicating and selling to potential
consumers.
The success of any business entity depends on how well it has been able to createawareness about its products or services in its target segment so as to induce itsconsumption by customers.
Promotion is the marketing communication.
There are traditionally 5 promotional tools:
1. Advertisement
2. Sales Promotion
3. Public relation
4. Direct marketing
5. Personal Selling
FACTORY
DEALERS
i.e.
SUPERMARKETS
AND GROCERY
STORES
CUSTOMERS
7/29/2019 pfr on bakery
43/61
43
Our firm is using advertisement tools to create awareness among the public, about
our products and the Beyond Bread Bakery.
Advertising is used to build up a long-term image for a product and can reachgeographically dispersed buyers.
Advertisement is an informal way of communication which induces customers tobuy the product and services and which also creates awareness amongconsumers.
Types of advertisement:
(a) Informative advertisement: - Informative advertisement is that from which
the consumer gets the necessary information about our products and
other relevant details.
(b) Influential advertisement: -Influential advertisement shall influence the
customers to buy our products.
ADVERTI
SING
MONEY
MISSIO
N
MESSA
GEMEDIA
MEASUR
EMENT
7/29/2019 pfr on bakery
44/61
44
1. MISSION:
It is all about setting the advertisement goal in the initial stage.
We have printed information brochures that includes list of our products andvarieties, commission rates, terms of sale etc. These shall be distributed to thegrocery stores and supermarkets to make them aware of our firm and products andgenerate their interest in dealership.
Apart from these we shall also advertise by putting up floor signboards at bannersat our distributor stores to catch the eye of the public and create awareness and
interest about our products.
2. MONEY:
Deciding on the advertising budget
We have considered the following factors while deciding our advertising budget:
a) Stage in life cycle: In the initial stage, our advertising budget is high becausewe want to introduce our product to the customers and dealers. Afterwards, it
will be low compared to the first year.b) Market share and consumer base: When the firm covers enough marketshares, it will require less marketing budget because it will have a set of loyalbuyers and recognition in the market.
c) Competition: in the initial stage, we shall face good competition from the wellestablished players in the market, such as Modern breads, Bakers Street,Bon-Bon. Therefore, we shall have to advertise more in order to get somepublic attention.
d) Advertising frequency: When advertising frequency is high, advertisingbudget will be high and when it is low, required money will be less.
3. MESSAGE:
Our message is to give the customer such a delicious taste that they dont forgethence truly We bake memories
4. MEDIA:
It includes the decision regarding media vehicles, deciding on media timings anddeciding on geographical allocation. Major media types are print media which
includes pamphlet, newspapers, hoardings, magazines and television media
7/29/2019 pfr on bakery
45/61
45
Our firm prints pamphlets 4 times in a year to be distributed along with thevernacular newspaper in the areas in which we have tie-ups with the stores.
5. MEASUREMENT
Our company tries to measure the communication effect of an advertisement thatis, its potential effect on awareness, knowledge or preference.
ANALYSIS OF PAST AND PRESENT DEMAND.
In the market, it has been observed that there is enough demand of all Beyond Bread Bakeryitemsas per the sales of already running counters.
According to marketing details there is continuous increase or growth in the number of customers
from last few years so there is big scope for the firms to provide qualitative products to the
increasing demand & establish it as successful firm.
7/29/2019 pfr on bakery
46/61
46
FINANCIAL
FEASIBILITY
7/29/2019 pfr on bakery
47/61
47
SR. NO PARTICULAR AMOUNT (in Rs.)
1. Land 1642800
2. Building 2340000
3. Machinery 879300
4. Furniture & Fixtures 122100
5. Equipments 362900
6. Vehicles 494000
7. Preliminary expenses 56800
8. Pre-operative Expenses 120500
9. Working Capital 138215
10. Reserves for contingency 61565
TOTAL COST 6218180
NO. PARTICULAR AMOUNT
1. Partners capital (50%) 3047525
2. Secured loans (50%) 31090903. Reserve and surplus 61565
TOTAL 6218180
Note: 1 Cost of Land
No. Particular Amount
1. Basic Cost of Land 1480000
2. 1% Commission of Agent 14800
3. Stamp duty @ 10% 148000
TOTAL 1642800
7/29/2019 pfr on bakery
48/61
48
Note: 2 Cost of Construction
No Particular Area(in sq. feet) Amount1. Production area 1813 1313950
2. Storage area 300 230500
3. Administrative office 375 321750
4. Water room & wash room 244 174600
5. Finished goods storage 300 237500
6. Loading Dock 168 109700
7. Parking space 150 52500
8. Security cabin 56 27400
9. Open land 194 102600TOTAL 3600 2340000
Note: 3 Machinery
No. Particular Quantity Price Amount
1 Deck oven 1 264000 264000
3 Dough mixer 3 46500 1395004 Dough molder 2 42350 84700
5 Sugar grinder 1 35000 350006 Packing machine 2 47650 953007 Toast slicer/bread slicer 2 38000 76000
8 Freezer 2 16400 32800
9 Mixer 1 3600 3600
10 Rolling racks 6 7500 45000
11 Trays 100 200 20000
12 Stainless steelutensils/tools/equipment knives
- - 83400
TOTAL 879300
Note: 4 Cost of Furniture
No. Particular Quantity Price Amount1 Sofa Set 2 10400 20800
2 Revolved Chairs 4 1500 6000
3 Comfort Chairs 8 950 7600
4 Office desk 3 3000 90005 Office Cupboard 1 8000 8000
6 Cabinet 1 11300 11300
7 Working table 1 9000 9000
7/29/2019 pfr on bakery
49/61
49
8 Dustbin 4 100 4009 Air Conditioner 1 25000 25000
10 Lights 50 40 200011 Fans 10 1200 12000
12 Exhaust Fans 4 1500 600013 Others 5000
TOTAL 122100
Note: 5 Cost Of equipments
No. Particular Quantity Price Amount
1 Computer 3 23900 717002 Telephone instruments 2 600 1200
3 Fire extinguisher equipment 3 5000 15000
4 Generator 1 25000 275000TOTAL 362900
Note: 6 Cost Of Vehicle
No. Particular Quantity Price Amount
1 Tempo 2 247000 494000
TOTAL 494000
Note: 7 Preliminary Exp.
No. Particular Amt.
1 Licence Fees 350002 Registration Fees (1%) 14800
3. Partnership deed 7000
TOTAL 56800
7/29/2019 pfr on bakery
50/61
50
Note: 8 Pre-operatives Exp.
No. Particular Amount1 Market Survey Exp. 2500
2 Connection Charges1) A.E.C. (Three phase)
2) Electricity connection charges3) Plumbing
4) Telephone charges5) Gas pipe line charges
480001850090002500
40000
TOTAL 120500
Particular 1st Year
Opening Stock of R.M. 0
Add:- Purchases 4540510Less:- Cl. Stock of R.M. 30270Cost Of R.M. Consumed 4510240
Add:-Direct Labour 264000
Bonus 22000Prime Cost 4796240
Add:-Factory O.H. 1146895
Total Factory Cost 5722135
Add:- Office O.H. 345230Cost of Production 6067365
Add:- Opening stock of FG -Less:- Closing Stock of FG 25870
Cost of Sales 6041495Add:- Selling & Distribution
Exp 811390Cost of goods sold 6852885
Add:- Profit 908115TOTAL SALES 7761000
7/29/2019 pfr on bakery
51/61
51
Particulars 1st YearINCOME:-Cash Sales 7114250
Credit Sales 646750
Total Sales Income 7761000
Closing Stock of FG 25870
Less:- Opening Stock of FG ------Total Income 7786870
Raw Material Consumed 4510240
Direct Labour& Bonus 286000
Factory Cost 781000
Administrative Cost 290000
Selling & Distribution Cost 613790
Preliminary Expenses WrittenOff 35460
Interest on Partners' Capital 182852
Total Expenditure 6699342
Gross Profit(PBDIT) 1087528
Less:- Depreciation 618725
PBIT 468803
Interest- Long Term Loan @ 11% 342000PBT 126803
Tax Paid @ 30% 38041PAT 88762
7/29/2019 pfr on bakery
52/61
52
Particulars Year 1
SOURCE OF FUNDS
Owners Funds 3136287
Reserve &
Surplus
61565
Bank Loan 2487272TOTALSOURCE OFFUND
5685124
APPLICATION OF FUNDS
Fixed AssetsLand 1642800Building 2340000Less:Depreciation
234000
2106000Machinery 879300Less:Depreciation
131895
747405Furniture 122100Less:
Depreciation
12210
109890Vehicle 494000Less:Depreciation
197600
296400Computer 71700Less:Depreciation
43020
28680
Otherequipment
291200
7/29/2019 pfr on bakery
53/61
53
TOTAL FIXEDASSETS
5222375
CURRENT ASSETS, LOANS AND ADVANCEInventoryRaw Material 30270
FinishedGoods
25870
Sundry Debtors 546750
Cash & BankBalance 307583
TOTALCURRENTASSETS
910473
LESS : CURRENT LIABILITIES AND PROVISION
Creditors 567564
DeferredWages
22000
TOTALCURRENTLIABILITY
589564
NETCURRENTASSETS
320909
MiscellaneousExpenditure(To the extent
not written off)
141840
TOTALAPPLICATIONOF FUNDS
5685124
7/29/2019 pfr on bakery
54/61
54
Particular 1st year
CASH FLOW FROM OPERATING ACTIVITIES
PAT 88762
Interest 524852
Tax Provision 38041
Depreciation 618725
Preliminary Expenses 35460CHANGES IN WORKINGCAPITAL (13326)Tax Paid (38041)
Net Cash Flow FromOperating Activities 1254473
CASH FLOW FROM INVESTMENT ACTIVITIES
Purchase of Assets (5841100)
Preliminary Activities (177300)Net Cash Flow FromInvesting Activities (6018400)
CASH FLOW FROM FINANCIAL ACTIVITIESCapital 3109090Term Loan Taken 3109090
Repayment of Term Loan (621818)
Interest on Loan (342000)Interest on Capital (182852)
Net Cash Flow FromFinancial Activities 5071510
Total 307583
Add:- Opening Balance 0
Closing Balance 307583
No. Particular Amount
1. Current Assets
A. Raw material requirement 30270
B. W.I.P requirement ------
C. Finished Goods requirement 25870
7/29/2019 pfr on bakery
55/61
55
Debtors Requirement 546750
D. Cash Balance 124889
Total Current Assets 727779
2. Current Liabilities
A. Creditors 567564
B. Deferred Wages 22000
Total Current Liabilities 589564
TOTAL WORKING CAPITAL 138215
PARTICULARS 1st year
PROFITABILITY RATIO
Net profit ratio (%)
(Net profit/sales)100 1.14
Operating ratio (%)
(PBIT/sales)*100 6.04
Cash profit ratio (%)
[(PAT+depreciation)/sales]*100 9.12
EFFICIENCY RATIOFixed assets turnover ratio
Sales/fixed assets 1.49
Total asset turnover ratio
(Sales)/(total assets-misc.exp.) 1.27
SOLVANCY RATIO
Proprietor's ratio (%)
Proprietor's fund/total asset-misc.exp*100 52.14
COVERAGE RATIO
Interest coverage ratio
7/29/2019 pfr on bakery
56/61
56
PBIT/interest on debt 1.37
LIQUIDITY RATIO
Current ratio
Current asset/current liabilities 1.54
YEAR PAT
DEPRECIATION
PRE.EXP.
CFAT
DISCOUNTING
P V OFCASHFLOW
DISCOUNTING
P V OFCASHFLOW
CUMCFAT
FACTOR 11%
FACTOR 1%
1stYear
88762 618725
35460
742947 0.901 669395 0.990 735518
742947
Particular Amount
Total Discounted Cash Inflow 3904609
Less
Total Cash Outflow 6218180NPV (2313571)
PROFITABILITY INDEX
Particular Amount
Total Cash Inflow 3904609
Divide
Total Cash Outflow 6218180P.I 0.6279
INTERNAL RATE OF RETURN
7/29/2019 pfr on bakery
57/61
57
In case of IRR we require two NPV i.e. one negative and one positive at two
different discounting factor. Hence in our project we have taken in to consideration
two discounting factor i.e. 1 and 11% discount level and at both the levels NPV is
negative so it is not feasible within the scope of five years.
Particular 1st Year
Total Income 7786870
Less : Variable Cost
Direct Material 45,10,240Direct Labour 286000
Electricity Charges 311000
Repairs Maintenance 166330
Power and Fuel 180000Commission on sales 175800
Total Variable Cost 56,29,370Contribution 2157500
Less : Fixed Cost
Salary & Wages 767000Depreciation 618725
Insurance 35160
Telephone & Internet 26000
Stationery & Postage 5000Advertisement 18500
interest on Partner's Capital 182852Interest on Loan 342000
Preliminary Exp. 35460Total Fixed Cost 2030697
Profit126803
PV Ratio=Contribution/Sales
27.71%
BES=Fixed cost/PV ratio(In Rupees)
7328390
7/29/2019 pfr on bakery
58/61
58
ASSUMPTIONS
The number of working days is 25 in a month leading to a total of 300
days in a year.
The registration charges and stamp duty for land is assumed at 1% and
10% respectively.
Reserves for contingency is taken at 1% of the cost of project.
The rates for insurance premium are:
ITEM RATE
Machinery 1.5%
Building 0.2%
Vehicle 3.5%
Repairs and maintenance is assumed at following rates throughout the
project:
ITEM RATE
Machinery 1%
Building 0.1%
Bank loan is taken at 11% rate of interest.
Interest on partners capital is 6%.
The number of utility workers varies throughout the project.
YEAR NUMBER OF WORKERS
First year 5
Second year 5
Third year 10
Fourth year 10
Fifth year 13
7/29/2019 pfr on bakery
59/61
59
An accountant is recruited from the second year.
Depreciation is calculated as per Reducing balance method i.e. W.D.V
Depreciation rate are taken as per Income Tax Act, 1961, for partnership
firms.
ITEM RATE
Machinery 15%
Building 10%
Computer 60%
Vehicle 40%
Furniture 10%
Preliminary expenses are written off over a period of 5 years
Telephone expenses, electricity charges and power expenses vary
throughout the project. Their increase or decrease is not fixed at a certain
rate.
Closing stock of raw material is kept at 2 days on the total purchase.
Closing stock of finished goods is kept at 1 day on total sales.
7/29/2019 pfr on bakery
60/61
60
CONCLUSION
We would finally like to conclude the project with a great feeling of having gained
enormous knowledge about Beyond Bread Bakery industry. First of all we are
thankful to our faculty members who gave us such a wonderful opportunity to learn
about the practical aspects of knowledge.
By conducting an extensive research on all the aspects of establishing a
Beyond Bread Bakery, we conclude that the project is not feasible as per capital
budgeting techniques.
While making the project we learnt how to communicate or deal with people and
how to maintain contacts with them. We saw all the marketing factors and were
able to understand more about it because of seeing them practically. It has been
said that practical knowledge is more important than theoretical knowledge.
Lastly we are obliged to our co-ordinates who helped us from the beginning to the
end for giving us an excellent experience of present scenario of market. Whatever
we learnt from market research will definitely help in enhancing our academic
career and come up as an efficient manager.
7/29/2019 pfr on bakery
61/61
BIBLIOGRAPHY
Marketing Management - A South Asian Perspective
13th edition
- Philip Kotler
- Kevin Lane Keller
- Abraham Koshy
- Mithileshwar Jha
Brochures given by the dealers
WEBOGRAPHY
www.Beyond Bread Bakerybazaar.com
www.wikipedia.org
www.justdial.com
www.fao.org
www.blog.franchiseindia.com
http://www.bakerybazaar.com/http://www.wikipedia.org/http://www.justdial.com/http://www.fao.org/http://www.blog.franchiseindia.com/http://www.blog.franchiseindia.com/http://www.fao.org/http://www.justdial.com/http://www.wikipedia.org/http://www.bakerybazaar.com/