Steps In Project Planning

1) Discovery of Business Opportunity.

2) Preliminary Investigation of the Project.

3)

Feasibility Study.

Executive Summary
The proposed project consists in establishing a pastry shop in South Mumbai (Thakurdwar Area). The pastry shop will produce three categories of sweets: Chocolates, Ice Creams and Pastries. The pastry shop will have two major target markets. First, it will target restaurants, hotels and other pastry shops. The second aim consists in catering for special occasions such as weddings, birthdays and religious events. The targeted region is South Mumbai, which includes the areas of Thakurdwar, C. P. Tank, Bhuleshwar, Sickanagar, Prathna-Samaj. Based on our market study, we found that there are only two pastry shops in this region. However, the pastry shop will produce a variety of products in order to circumvent seasonality associated with specific products. The total investment amounts to Rs.1,50,000; it includes equipment with a total value of Rs. 80,000 other fixed assets (fixtures, furniture, office equipment and computers) amounting to Rs. 20,000, and working capital needs of Rs. 15,000. The main financial assumptions take into consideration the socio-economic conditions in South Mumbai, and are, therefore, relatively conservative. There is a very important gap between the sales expected in the summer versus those expected during the nine other months. The projections are taken over a period of 5 years. We expect net income to be around Rs. 18,000 the first year and to reach Rs. 28,000 by the 5th year of production. These results clearly show that this project is feasible. According to our study, the project will provide good returns to the investors. More important, however, is the socio-economic impact of such a project. It will create 10 decent jobs with respectable wages. Moreover, the fact that certain jobs are reserved for women will contribute in women empowerment in a region where huge gaps subsist between male and female unemployment. Furthermore, the staff that needs specific skills will be thoroughly trained; as a result their output will have a concrete value added.

Discovery of Business Opportunity!!!

Developing or introducing a new product can be quite scary, risky, demanding, even a rollercoaster ride. Often, what began as a great new product idea becomes unrecognizable when that oncegreat idea gets to store shelves. It is very well understood that every new Idea arises when an Individual sees an opportunity. The opportunity I saw was that I could come up with my very own PASRTY SHOP that would even serve a few more confectionaries like Coffee, Homemade Chocolates, etc items at affordable rates and the best quality in town. The plan is not to serve a Niche Market but the whole market in general. There would be everything that ranges from Chocolate to Coffee for kids as well as adults. Sugar free products are an added advantage in todays health conscious market. The area I have selected does not have many Pastry Shops. Its a big area with just two shops with serving Egg Less Products this rules them out of my competition. As I plan to serve The Young Generation is as it looking for better quality cakes. I came to know about this when I myself went to one of the shops and didnt find the quality of the product in par to the rates that he was charging for it. It struck me then and there that a new shop in this area with better quality would prove to be a nice and successful business opportunity. The other motivating factor was that the customer didnt mind paying the high cost, so the rating of the cakes or any other items would not be a problem. More over the Pastry business comes with the following advantages 1) The demand for cakes and other sweet items never go down, people are looking to celebrate every occasion that comes to them in cases of happiness. 2) Cakes are considered the foremost option for Birthdays, Anniversaries, etc occasions. These days come thought the year so the demand is either constant or on the rise. It never goes down. 3) The cost of making sweets is relatively lower in comparison to the rates at which they are sold. The profit margin is always higher.

Preliminary Investigation of the Project...!!!

Pastry Shops are not a new concept in any market today. It was very vital that a detailed SWOT Analysis of the concept be carried out with precision that no angels
are left out to be scrutinised.

The following are the findings of the SWOT Analysis.

1) STRENGTHS:The pastry shop will offer high quality goods. A quality team will supervise the production; one of the major strengths will be the ability to build a solid and loyal relationship with both local customers (individuals, restaurants) and expatriates who might ask for western standards. The price per quality will be very attractive; the pastry shop will offer discounts to key clients. The production unit will produce a diversified range of products, which can help smooth out seasonality factors. There are a number of special occasions and holidays that the pastry shop would benefit from: Eid al Fitr Ramadan Independence Day Christmas Valentine Weddings Birthdays 2) WEAKNESSES:Inhabitants of the area are more used to Local Sweets than Pastries or Chocolates and may not consider these products as valid substitutes. Serving International Standard Item might be a task as these range of sweets are not yet introduced in the local market of the specific area. Given that the majority of people have limited income, pastries and decorated chocolate might be considered a luxurious item, only a few of the upper class of upper middle class group might opt of the said products.

3) OPPORTUNITIES:Labor, which is the main factor of production of decorated chocolate, is cheaper than compared to the major cities. Hence, the expected price difference between chocolate produced in other areas and those in main cities could open up new opportunities to contract deals with chocolate distributors in South Mumbai or other cities. Another opportunity is possible by establishing contracts with clients such as hotels and restaurants. The pastry shop will take advantage of the fact that during the summer months the number of residents increases considerably, especially to sell ice cream. 4) THREATS:There is a risk that the turnover achieved does not reach expectations and therefore, the business would not be able to cover its operating expenses. In addition, there is a risk that the economic condition in the region does not improve, or even gets worse; this would definitely impede the profitability of the business.

Marketing plan
The pastry shop will capitalize on several advantages in order to build up a solid, loyal and diversified network of clients. It will therefore focus on the following objectives: Cleanness and high quality of inputs used, as well as high quality standards of production. Competitive pricing Attractive decorations for chocolates to please different tastes Delivery of Chocolates, Pastries, and Ice cream to various points of sales and pastry shops. Pricing The prices the pastry shop will charge are determined by the standards of living of the targeted regions, by the production costs, and by the competition. Pricing Rates Items 1kg of normally decorated chocolate 1kg of extra decorated chocolate 1kg of ice cream (Sancha Made) 1kg of ice cream (Machine / Outsourced) Pastries Rates Rs: 225.00 Rs: 275.00 Rs: 129.00 Rs: 99.00 Rs: 65-75

The pastry shop will offer differentiated pricing according to the quantities purchased by the customers. The price list above is applied for retail selling.

Sales channels The production unit will establish strategic alliances with the hotels, restaurants, supermarkets, municipalities and other key clients to be the exclusive distributor of sweets for special occasions. This requires good quality services including timely delivery, freshness of goods etc to be competitive in order to attract and retain a large base of clients.

Financial Plan
This section details the calculations, assumptions and methodology used as a basis for the projection of the expected financial performance of the pastry shop.

Initial Investment
Equipment costs
Items Refrigerated Room Tempering Machine for Chocolate Shaker for Chocolate Cream Machine Mixture Slimmer (Chocolate & Ice Cream) Convention Oven Baking Oven Decoration Equipments Thermometer Moulds Pasteurizer Freezer Total Investment Quantity 2 1 1 2 1 1 2 1 Box 1 1 Set 1 1 Cost per Item (Rs.) 15000.00 12850.00 4000.00 2500.00 4000.00 7000.00 15000.00 2500.00 130.00 2000.00 13500.00 15000.00 Total Cost (Rs.) 30000.00 12850.00 4000.00 5000.00 4000.00 7000.00 30000.00 2500.00 130.00 2000.00 13500.00 15000.00 125980.00

Other fixed assets

Fittings & Installation Charges Furniture Refrigerated Pick-Up & Delivery Van Computer & Stationery Rs: 5000 (Approx) Rs: 12000 (Approx) Rs: 300000 (Approx) Rs: 35000 (Approx)

Total fixed assets: Rs: 477980.00 Working capital needs Rs: 15000.00 Total initial investment Rs: 492980.00

Beginning inventory Description Chocolate Cake Bread Chocolate Cream White Cream Fresh Fruits Dry Fruits Mix Packet Packing Material Chocolate Decoration Plates and Trays Total Cost Quantity 10 Kg 20 Units 2 Kg 2 Kg 1 Basket 5 kg 25 Units 5 Units 100 Units Unit Cost 125.00 70.00 210.00 160.00 300.00 100.00 3.00 75.00 1.00 Amount (Rs.) 1250.00 1400.00 420.00 320.00 300.00 500.00 75.00 375.00 100.00 4740.00

Total beginning inventory Rs: 4740.00

The pastry shop will have various products to sell with the following pricing:
Items 1KG Normally Decorated Chocolate 1KG Extra Decorated Chocolate 1KG Hand-Made Ice Cream 1KG Machine-Made Ice Cream Cream Base Pastry Normal Pastry Special Chocolate Pastry Prices (Rs.) 350.00 450.00 260.00 210.00 75.00 65.00 85.00

Staff structure: Regarding the administrative staff, the pastry shop will hire a Manager and Cashier with substantive skills, and a presentable and friendly delivery boy. On the production side, the pastry shop will have a Chief. Chef, an Asst Chef, and 3 crafts women, which will receive a serious training in order to acquire the required skills. Staff selection and training is crucial; the team must be as efficient and motivated as possible in order to ensure high quality products and services. The total number of employees is 10 all year round. The monthly salaries including other miscellaneous allowances are around Rs. 41,200.00
STAFF STRUCTURE Number of Monthly Total Total Monthly
Manager Cashier Craft Women Chief. Chef Asst. Chef Delivery Boy No. Of Employees 1 1 3 1 2 2 Monthly Salary 7000.00 4000.00 3000.00 5000.00 3000.00 2000.00 Total Salary 7000.00 4000.00 9000.00 5000.00 6000.00 4000.00 Misc. Allowances 1000.00 800.00 600.00 X 3 1000.00 500.00 X 2 300.00 X 2 Monthly Total 8000.00 4800.00 10800.00 6000.00 7000.00 4600.00

Recommendations and key success factors In order to achieve satisfactory results, there are some key success factors that should be highlighted: All the personnel of the pastry shop must be very qualified. The craft women, the chef, the cook and the sales person will receive all the necessary training in order to perform according to high standards. The managerial personnel and the chef will be selected according to their merits and previous experience. As a first stage the pastry shop should follow a policy of market penetration, trying to seize any opportunity in order to get a wide array of clients. The pastry shop will make full use of its marketing resources in order to market itself as a destination and as the most competent chocolate, ice cream and pastry shop producer in the region. After a certain period of functioning, the pastry shop would have acquired some key clients, on which it will focus as the primary target market. The pastry shop should try to differentiate itself from other French pastries building up on its main assets: quality, cleanness and affordable prices. Regarding the decorated chocolate, the manager should take into consideration the life cycle of certain models, and will make sure to introduce new models once the market for specific products has attained the maturity stage. The shop seating area ought to be as pleasant as possible, in order to attract visiting expatriates and tourists. Finally, let us stress one more time the importance of cleanness, high standards of production and good quality of inputs.

Economic impact Evaluation Establishing this pastry shop in the Thakurdwar area will have several positive repercussions on the socio- economic state of the region: Building up such a craft shop will allow for an economic diversification in a region where low-skilled jobs are predominant. The pastry shop will create 10 full-time jobs; it will offer new career opportunities to young people, especially women in the area. Creating jobs for women will empower them; it will help them to increase the household income in a very positive and comfortable way. Furthermore, the creation of these jobs will ensure to employees respectable wages and thus helps to lift up the standard of living of the concerned households. The production of pastries and especially chocolates has backward linkages that will be beneficial to the whole region, mainly through the use of fresh fruits, milk, and flour, produced in the area. Moreover, the training the employees will have received will equip them with valuable skills for future job opportunities. Finally, the pastry shop will be seen as a new attraction, and as one of the reasons to spend some additional time.

Feasibility Study
Technological Feasibility Study:

In this study I have examined the Technical requirement for the Pastry Shop in terms of Technology and Personnel. The machinery required for making pastries & chocolates is easily available at premium costs. The required training will be provided on hand (if required). The operations will be same and that will help the chef to gain mastery over it with time. Thus enhancing the quality further. The Chief. Chef will solely be responsible for training the individuals in terms of making Decorated Chocolates and Pastries of International Standard. One of the problems would be the technical advancement already gained by the competitors, a possible solution to this would be professional training for the employees (this shall be handled by the Chief Chef) Another Problem area will be serving the Highly Decorated Chocolates & International Flavor Pastries. A possible solution would be gradually introducing them in the market once the Brand name gets recognized in the area and adjacent locality.

Financial Feasibility Study:

In case of a new project, financial viability can be judged on the following parameters: Acquiring the land for shop will not be much of a problem in case of legality as it is funded by my father for the business operation. This will save a lot of initial investment. A total 700 Sq. ft area for Shop and the Kitchen is enough for smooth operations. Total estimated cost of the project is within the affordable range as it is viable enough to Invest around Rs. 500000 at the first stage and working capital requirement is also not a problem. Depending upon the Preliminary Study the cash flow will start at the early stage on the final operations.

Economical Feasibility Study:

Cost/Benefit Analysis: The Initial investment of Rs. 400000 and the additional Rs. 100000 required at the end of the month will be recovered in the first year itself depending on the projected sales and the growth that will be achieved with passing months. The project is economically feasible. Cost-based study: It is important to identify cost and benefit factors, which can be categorized as follows: 1. Development costs; and 2. Operating costs. The cost for starting the business is minimal and lucrative returns is an added motivation to start the business.

Legal Feasibility Study:

The proposed business does not fault any of the laws. The business does not incur any heavy legal expenditure and paper-work as much registration is not required. The work timings are also in accordance to the permissible time per individual.

Market Feasibility Study:

South Mumbai is among the most fast growing regions out of the various parts of Mumbai, Tall Buildings with lavish facilities, better standard of living will give the pastry shop an added advantage. The population density of the younger generation is high is the area, it will give an edge for better and higher sales. The willingness of this generation to pay higher for a better quality product will help in costing of products as well as in sales.

The adjacent areas of Sickanagar, C. P. Tank & Bhuleshwar are populated areas and they are always on the lookout for something new.

The expected sales for one year are expected to be as follows: Because there exists a seasonality associated with the goods produced, and the region targeted is much more populated in summer than in winter, the assumptions are split in summer and winter season sales: 9,000 kgs of normally decorated chocolate with an average of 30 kgs per day for 300 days a year. 3,000 kgs of extra decorated chocolate with an average of 10 kgs per day for 300 days a year. 4,170 kgs of ice cream distributed as follows: 33 kgs per day for the 90 days of summer (June, July, and August), and 10 kgs per day for the months of April, May, September and October. 8,100 cones of Mary cream distributed as follows: 70 cones per day for the 90 days of summer, and an average of 20 cones per day for the 90 days that precede and follow the three summer months. Approximately 16,000 pieces of pastries will be sold annually with an average of 50 pieces per day over 320 days. Approximately 320 kgs of petits fours will be sold annually with an average of 10 kgs per day over 320 days. 8,600 cups of coffee are expected to be sold: 40 cups per day during 85 days in the summer and 20 cups per day for the remaining 260 days. As for fresh orange juice, it is estimated that 20 glasses will be sold daily during the 85 days of summer, and that only 10 glasses will be consumed daily for the remaining 270 days. Finally, it is estimated that 65 bottles of canned juice and sodas will be sold during the 85 days of summer and that 40 will be sold for the remaining 260 days. It is assumed that sales will increase by 5% during the 2nd and 3rd year of exercise, by 2% during the 4th, and at 1% during the 5th year. The following table shows the main assumptions for the income statement. It is assumed that general expenses will grow by 2% annually and maintenance expenses of equipment, fixtures and installations will increase by 2% annually. On the personnel side, wages are expected to increase by 2% annually and the income tax rate is 15%.

Contents Of A Project Report

1. General Information: Information on product profile and project details 2. Promoters: His / her educational qualification, work expertise, project related

experience 3. Location: Exact location of the project, lease or freehold, locational advantages 4. Land and Building: Land area, construction area, type of construction, cost of construction, detailed plan and estimate along with plant layout 5. Plant and Machinery: Details of machinery required, capacity, suppliers, cost, various alternatives available, cost of miscellaneous assets 6. Production / Process: Description of production process, process chart, technical know-how, technology alternatives available, production program 7. Utilities: Water, power, steam, compressed air requirements, cost estimates, source of utilities 8. Transport and Communication: Mode, possibility of getting, costs 9. Raw Material: List of raw material required by quality and quantity, sources of procurement, cost of raw material, tie-up arrangements, if any, for procurement of raw material, alternative raw material, if any 10. Manpower: Manpower requirement by skilled and semi-skilled, sources of manpower supply, cost of procurement, requirement for training and its cost 11. Products: Product mix, estimated sales, distribution channels, competitions and the capacities, product standard, input-output ratio, product substitute 12. Market: End-users of product, distribution of market as local, national, international trade practices, sales promotion devices, proposed market research 13. Requirement of Working Capital: Working capital required, sources of working capital, need for collateral security, nature and extent of credit facilities offered and available 14. Requirement of Funds: Break-up of project cost in terms of costs of land, building, machinery, miscellaneous assets, preliminary expenses, contingencies and margin money for working capital, arrangements for meeting the cost of setting up of the project 15. Cost of Production and Profitability of first ten years: 16. Break-Even Analysis: 17. Schedule of Implementation: