Bhavin Business Plan

8/2/2019 Bhavin Business Plan

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MY BUSINESS PLANOn

Paper Bagsprepare by

Parmar bhavinEnrollment num.-107360592029m.b.a sem III

n.R.v.i.b.m.sjunagadh

Guided by

Dr.rajesh patelAcademic year

2010-11


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INDEX

no SUBJECT Page no

1 Introduction

2 Aims & objective

3 Company profile

4 Technical aspect

5 Marketing aspect

6 Financial aspect

7 Future aspect

8 Competitors

9 Risk factor

10 Conclusion


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INTRODUCTION

The unemployment is increasing in our country. The large-scale

industries, which do not provide wide employment, because they are capital

intensive. So, the small-scale industries must be developing in our country

because they are labour intensive. So, they can provide more employment.

The SSI ensures more equitable distribution of the national income & they

facilitate an effective mobilization of resources of capital & skill. Small

industries are desirable because it is responsible for dispersal of production units

to small towns&villages.


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AIMS & OBJECTIVES

Business objective are very imp in an enterprise.it refesrs to the

purpose or goal for which the organization is performing.

1. Consumer Satisfaction:

Consumer here refers to the customer to whom this products will

be supplied for future processing and making ready for final consumption.The

primary objective of OM industries are to satisfy its customers and fulfilling

their expections.

2. Profit earning:

The second objective is to earn profit through satisfying the

customer as business cannot survive without earning profit.

3. Performing Social Responsibilities:

Performing the social responsibilities of business enterprise price

is also one of the basic moral responsibilities. Social responsibility will be

fulfilled by giving employment opportunities, providing good quality product at

reasonable rate.

VISSION OF THE COMPANY"

To be India's NO 1 Company in Writing Instruments and Office StationaryIndustry Dedicated to Quality and Consistent Performance"


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MISSION OF THE COMAPANY.Consistently make good Products at the friendliest Prices..

Constantly Grow in Volume and Value through New Ideas

And by Imbibing the World's Best Technologies, Continuing to remain

relevant to our customers in India and the World as a Brand that Stands for our

Quality and More Value for Money than any others..

COMPANY PROFILE

PROJECT AT A GLANCE

Name : OM INDUSTRY

Office Address : Plot No.41,42

Indusrial Area,sector-2Mundra road,Dist : Kutch

Type of Organization : Partnership

Name of Partners : Parmar bhavin

Paramar divyesh

Product : Paper Bag

Unit Size : Small scale industryAuditors : Jani & AssociatesBhuj

Bankers : IDBI,SBI

Website : www.omindustry.com

E mail : krishna [email protected]
mailto:krishna%[email protected]:krishna%[email protected]:krishna%[email protected]


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PARTNER 1

Name - BHAVIN A. PARMAR

Age - 22

Address - RAJHANS TRANSPORT, OPP, S.B.I. BANK

MANGROL-362225

Qualification - M.B.A.

Specialized subject - Marketing

Income - 1, 00,000

Financial contribution - 40%

Responsibility - Marketing Department

Experience - Fresh


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PARTNER2

Name - DIVYESH PARMAR

Age - 29

Address - Ambedkar Nagar,

Kalawad Road,

Rajkot.

Qualification - M.B.A.

Specialized subject - Financial management

Income - 1,50,000

Financial contribution - 30%

Responsibility - Production Engineer,Finance Dept. & HRM

Experience - 3 years


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IMPLEMENTATION SCHEDULE

The major activates in the implementation of the project have been listed& the average time for implementation is estimated at 8 months.

Sr. No. Particulars Months

1. Scheme preparation & approval 1

2. SSI provisional registration 1-2

3. Sanction of loan by financial institution 2-5

4. Installation of machinery 6-8

5. Procurement of raw material 1

6. Recruitment of technical personnel 1

7. Provision of other facilities like water,electricity, etc.

1

Trial & production will start from 8th

month onwards.


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ORGANIZATION STRUCTURE

Chairman

Production Personnel Marketing Finance

Worker Manager Salesman Accountant


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TECHNICAL

ASPECT


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PRODUCT DETAIL

0 Product:The people regularly use paper bag now a days. If we go to the shopping

center & purchase some goods, the shopkeeper gives the goods in the paper bag.Another option is also to use a polythene or plastic bag but they are harmful to

use because we can produce the plastic bag but we can destroyed it.

0 Products features:There are many features of paper bag amongst which some are as

follows:

i. It is very economicalPaper bags are very economic in nature. It is cheaply available in themarket.

ii. It is eco-friendly in natureIt is very easy to produce a paper bag and we can also easily destroy it.

So, it is less harmful to nature as compare to plastic bags.

0 Products uses:Paper bags are common packing material being used by bankers &

confectioners, grocers, textile & cloth merchant, dry cleaner, sweet shopkeeper

etc. due to lower prices, paper bags used even by hawkers & venders on thefootpath for packing fruits & vegetables etc.

0 Brand name:Brand also plays an important role in marketing. Good brand has to face

less competition in the increasing market.


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MARKETING

ASPECT


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MARKET POTENTIALThe introduction of shopping complexes & consumer stores in the semi-

urban & rural areas are creating additional demand for paper bags, paper bagsmanufacturer, therefore, it may be taken up as a profitable manufacturing

activity in selected areas.

A Market consists of all the potential customers sharing a particular need

or want who might be willing & able to engage in exchange to satisfy that need

or want.

Before some time people were using plastics bags. But now a days

people are realize that plastic bags are harmful to the nature. Because we canproduce plastic bags but we cannot destroy it. So, now-a-days people are

moving towards the use of paper bags rather than plastic bags. So it is highlydemanded & profitable product.


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DISTRIBUTION CHANNEL

In the field of marketing, channels of distribution indicates the routes of

pathway through which goods and services flow or move from producers toconsumers. The route of channels of distribution includes the manufacturer and

the consumer as well as all intermediaries. These components are linked in the

channel system by one or more of the marketing flows, such as transfer of titleof ownership, physical distribution of merchandise, transfer of title of

ownership, physical distribution of merchandise, transmission of marketing

information and the flow of money in the form of payment of prices and other

dues.

The channel of Paper Bags distribution of is as follows:

Manufacture

Agents

Distributors

Dealers & Retailers

Customers


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PHYSICAL DISTRIBUTION

The marketing process is not complete simply by creating superb product

and by creating the consumer through aggressive salesmanship. Delivering theproduct to the consumer at the right time and right place is equally important

function in marketing. In process of marketing, this vital function is called

physical distribution.

Physical distribution means the process of delivering the product to the user

or consumer promptly, safely and in time.

The major components of physical distribution of Paper Bags:

0 Warehousing0 Inventory0 Order processing


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ADVERTISINGIt is defined as any paid form of non-personal presentation and promotion

of ideas, goods and services by identified sponsor. It is impersonal salesmanship

for mass selling, a means of mass communication.

Paper Bags has used many media of advertising such as press media,

which includes newspapers and magazines; outdoors advertising that includes

posters, boards and electric display, multimedia including web site, etc.


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RAW MATERIALS

The raw material is the base for the production. The required raw material

is paper in roll, gum, printing ink & chemicals.The raw material of this unit is easily obtained from the market & from

the paper mills.


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MACHINES

0 Automatic paper bag machines3 nos.0 Stereo press2 nos.0 Stereo grinder2 nos.0 Roll slitter motorized with 2 HP packing machines2 nos.0 Testing equipments1 no.


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MANUFACTURING PROCESS

Raw material (paper roll)

Cutting through automatic machines

Stereo pressing with the help of gum & chemical

Grinding

Printing through ink

Testing

Packing


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Manufacturing Process in Detail

The required raw material is in the form of roll, the cutting of roll is done

through the automatic paper bag machine according to the size, & then pressingof required size is done through stereo pressing machine with the help of gum &

chemical. Then grinding of paper bag is done. The process of printing is done &

at the last they are tested for bursting pressure & packing is done.


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SALES PROMOTION

In the context of small scale industries, we have to say that in India such

industries are protected by the government, reserving more than 400 items thatto be supplied to the government department. But even though solely and

gradually with the growth of small scale industries, now it is high time to think

over the matter of promoting sales as product are becoming popular to the

national market as well as for international market.

The following are the different techniques used by the small scale

industries to increase the sales. Such techniques are:

0 Salesmanship0 Publicity0 Branding and packaging0 Market research0 After sales services0 Credit facilities0 Hire purchase scheme


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INSPECTION AND QUALITY

CONTROL

To survive in a competitive business environment organization make all

possible efforts to produce the products, which satisfy their customers to the

maximum extent.Quality cannot reliability. Quality is a consumer is the golden code the

existence of the product.

In a product like calculator, from raw material to finish goods inspection

& quality control is required. Usually it follows quality specifications as per BIS

standard IS1980. Simple devices & methods will be used to check the raw

material proportion & quality & every stage.


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PRODUCTION CAPACITY SCHEDULE

Production capacity 49,14,000 units

No. of working days in a month 25No. of working days in a year 300

No. of shifts per day 2

No. of working hours per shift 8


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STAFF & LABOUR

Sr. No. Staff & labour No.

1. Factory staff:0 skilled0 unskilled

25

2. Administrative officers 1

3. Clerk cum typist 1

4. Accountant 1

5. Peon cum watchman 1


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FINANCIAL

ASPECT


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FINANCIAL PLANNING

Finance is an important function of business. The application of planning

to the function is financial planning. It involves the policies, determination of

objectives and procedure relating to the finance function. Financial planning is

an important function of a financial manager whether a business is big or smallthis function has to be performed. It is necessary to do financial planning for an

existing as well as new business.

A financial plan is a statement estimating the amount of capital and

determining its compensation and another important aspect of financial plan is

to determine the pattern of financing.

0 Before raising finance it is essential to make estimates for long term as wellas short tern financial needs.

0 Long term financing is generally needed for fixed capital requirement i.e.purchase of fixed assets.

Short term finance is generally needed for working capital requirement

i.e. marketable securities, debtors, etc.

In Paper Bags, the financial planning is done for long tern or short term

financial requirements. Financial planning is necessary to reduce the cost offinance and all the long term and short term finances is raised through family

funds and overdrafts. The requirement of all the long term is also fulfilled

through bank as and when needed.


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FINANCIAL DETAILS

Balance sheet

LIABILITIES AMOUNT ASSETS AMOUNT

Working capital (3months)

Own capital

Borrowed capital:

(16%)

Creditors

23,18,10041,44,050

31,44,050

45,00,000

Land (250sqm @Rs.800)Building(250sqm

@Rs.1800)

Boundary wall & gate

Plant& machinery:

0 automatic paper bag0 stereo press & grinder0 roll slitter0 testing equipmentFurniture & fixtures

Electrification &installation charges

Computer & telephone

Current Assets

Raw material

Staff & labourOther expenses

Fixed Cost

2,80,0004,50,000

20,000

15,00,0005,00,000

7,00,000

2,00,000

1,50,000

40,000

50,000

62,35,500

4,08,000

3,

81,600

39,70,000

14885100 14885100


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0 Cost Of ProductionParticulars Rate per

kg.

Req. per

day

Req. per

month

Req. per tear

Paper In Roll 10 2000 50,000 6,00,000

Total 20,000 500,000 60,00,000Gum 8 20 500 6,000

Total 160 4,000 48,000

Printing Ink 60 10 250 3,000

Total 600 18,000 1,80,000

Misc.

Chemical

25 625 7,500

Net total - - 5,19,625 62,35,500


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BREAK EVEN ANALYSIS

Break-even point is the point of sale at which company makes neither

profit nor loss. The marginal costing technique is based on the idea that

difference of sales and variable cost of sales provides for a fund, which is

referred to as contribution. Contribution provides for fixed cost and profit. At

break-even point, the contribution is just enough to provide for fixed cost. If

actual sales level is above break-even point, the company will make profit. If

actual sales level is below break-even point, the company will incur loss. Whencost-volume-profit relationship is presented graphically, the point, at which total

cost line and total sales line intersect each other will be the break-even point.Break-even point is that point of achieving; where total revenue & total

expenses are equal. It is the point of zero profit. If the sales exceed BEP the

business will earn profit & if it decreases from BEP the business will incur loss.Thus, BEP can be defined as the minimum level of production & sales &

company must attain in order to be economically viable.

0 BEP (Rs.)= BEP * Sales price per unit

= 98,88,083 * 2= 1,97,76,166

0 BEP (%)= (Fixed cost/ (Fixed cost + Profit)) * 100

= (17,79,855 / (17,79,855 + 22,82,100)) * 100

= 43.82%

0 BEP (in units)= Fixed cost / Contribution per unit

= 17,79,855 / 0.18

= 98,88,083


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RATIO ANALYSIS

A comparative study of the relationship, between various items of

financial statements, expressed as ratios, reveals the profitability, liquidity,

solvency as well as the overall financial position of the enterprises.Ratio analysis helps to analyze and understand the financial health and

trend of a business, its past performance makes it possible to have forecast

about future state of the business. Inter-firm comparison and intra-firm

comparison becomes easier through the analysis. Past performance and futureprojections could be reviewed through ratio analysis easily.

The ratio analysis provides useful data to the management, which would

help them in taking important policy decisions. Diverse groups of people make

use of ratios, to determine a particular aspect of the financial position of the

company, in which they are interested.

0 Fixed cost per unit = Total fixed cost per unit= Total fixed cost / Total no. of units

= 17,79,855 / 49,14,000

= 0.36

0 Variable cost per unit = Total variable cost per unit= Total variable cost / Total no. of units

= 89,56,560 / 49,14,000

= 1.82

0 Contribution per unit= Sales price per unitVariable cost per unit

= 21.82= 0.18

0 Profit Volume Ratio= (Contribution per unit / Sales) * 100

= (0.18 / 2) * 100 = 9%

0 Return on investment= (EBIT / Total capital investment) * 100

= (22,82,100 / 62,88,100) * 100= 36.29%

0 Gross profit ratio= (Profit (EBIT) / Sales) * 100

= (22,82,100 / 98,28,000) * 100

= 23.22%

0 Net profit ratio= (Profit after tax / Sales) * 100

= (8,70,275 / 98,28,000) * 100

= 8.86%


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PROFITABILITY ANALYSIS

Profit planning is the planning of future operations to attain maximumprofit or to maintain a specific level of profit.Profit is not merely a result of enough financial investment but it is a

result of collective efforts of management, their decision capacity, proper

planning of production and marketing and proper use of professional skills.

Profit means excess of revenue after deducting all expenditures, inclusive

of all cost.

Particulars Amount

Sales

Less: cost of production

98,28,000

75,45,900

EBIT

Less: interest on capital

22,82,100

9,43,215

PBTLess: tax (35%)

13,38,8854,68,610

Net profit after tax 8,70,275

0 Return on investment= (EBIT / Total capital investment) * 100= (22,82,100 / 62,88,100) * 100 = 36.29%

0 Gross profit ratio= (Profit (EBIT) / Sales) * 100

= (22,82,100 / 98,28, 000) * 100 = 23.22%

0 Net profit ratio= (Profit after tax / Sales) * 100

= (8,70,275 / 98,28,000) * 100 = 8.86%


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NAME& ADDRESS OF ADDRESS OF

SUPPLIERS

0 Machineryi. M/S Industrial Paper M/C (P) Ltd., A-32, Phase-1, Naraina Industrial

area, New Delhi.

ii. M/S Sandhu Mechanical Engg. Work, Industrial Area - A, Plot No.32,Ludhiana.

iii. M/S Indo Europe Trading Co., 1980, Chandni Chowk, Delhi6.iv. M/S Irupal Industrial (Regd.), 728, Industrial Area - B, Ludhiana.v. M/S Kholi Industries, 29 - Sona Udyog Indl. Estate, Parsi Panchyat

Road, Andheri (E), Mumbai - 68.

Raw material

i. M/S Punalur Mills, Punalur, Kerala.ii. M/S Star Paper Mills Ltd., Saharanpur (UP).

iii. M/S Rohtas Industries Ltd., Dalmingar (Binar).iv. M/S Paper & Pulp Conversion Ltd., 376, Shukrawar Peth, Bihar.v. M/S Ballarpur paper Mills Ltd., Ballupur. Dist. Chanda, Maharashtra.

vi. M/S. Sirpur paper Mills Ltd., Sirpur, Kaghaznagar (AP).


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FUTURE

PLANS


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FUTURE PLANS

Paper Bags has specified future plans to follow. It has fixed goals to be

achieved in future. Certain future plans of this unit are as under.0 Company wants to increase its sales and profit and be a large scaleindustry.

0 Company wants to start the production of another ink like pen ink,making markers ink etc.

0 Company wants to wider its network in whole country. For it they aredeciding to establish branches in most of the state in India.

0 To increase the production capacity and thereby employing more andmore number of workers.

0 The risk of failure of the project is that initially the required amount ofsales will not be achievable & will result in loss.

0 Initially productive would be low but cost of production may be higher.0 The unit will operate in highly competitive market where already other

such products have gained important position.

0 It may take time to beat the competitors products.Thus, this company has bright future vision and it wants to extend its

coverage.


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Competitors


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COMPETITORS

Looking for the government for globalization in fast industrial

development liberalization and relaxation policy of Govt. has given very muchboosting up to the growth of industries small & big produces in India. But now-

a-days market competition has increased in all fields.

Particularly, for this product at small business concern the owner

should not fight out with the competition because there are no more than 15

small & tiny industries of paper products in Rajkot district. We can see that

there is keen competition for such small products among big industries. But

small scale industries are trying to develop their market all over India.


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RISK

FACTORS


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RISK FACTORS

Risk is an inseparable organ for entrepreneur. The risks that are

bearable are of various types and any kind of risk can occur at any time. Varioustypes of risk to be faced are as follows:

0 Technological risks0 Financial risks0 Social risks0 Environmental risks0 Anticipated risks0 Unanticipated risks

Every new business needs to determine risk factor that the business will

face. If risk factors are carefully determine than the entrepreneur can take bettermeasures to see that they have limited effect on the business. The following are

some of the risk that the new business will face.

0 The unit will operate in highly competitive market where already othercompany has gained important position.

0 The risk of failure of the project is that initially the required amount ofsales will not be achievable & will result in loss.

0 Initially productive would be low but cost of production may be higher.0 It may take time to beat the competitors products.


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CONCLUSION


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CONCLUSION

In the product project report on Paper Bags I have discussed all financial

data relevant information.The market of Paper Bags is expanding & demand for the product is

increasing day by day. The return in this business is also satisfactory.

At last it can be said that future of this product is very bright.

With the expectation of high profitability & good completing of high is

assumedThat it would be the perfect product to be manufactured in todays

environment.

Bhavin Business Plan

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