1.

COMPANY OVERVIEW

Lunch Box is one of the first companies of its kind in Nepal; in India it has already been started.
As more and more people are moving into the workforce, people rarely have enough time to
cook food at home. In such a situation, they need to depend on outside food that would be
healthy, hygienic and tasty as at home. As most of the working people have limited time, they
would prefer their food to be delivered at the workplace in time. And, Lunch Box is what exactly
they need; healthy, hygienic, tasty and exactly on time.

Instead of going home for lunch or paying for a meal in a cafeteria, office workers will have a
cooked meal that is delivered to them packed in lunch boxes. The meal is cooked in the morning
and sent in lunch boxes.

1.1 Vision

To provide hygienic food and services.

1.2 Mission

To be a local brand that best understands and satisfies its consumers' needs; making
food an easier, healthier.

1.3 Objective
To provide exceptional quality, service, cleanliness, and value, that makes every
customer smile

To provide lunch boxes to our customers at their desk in at office.

Punctuality will be our key to success in building trust.

Create a local brand that can compete with international brands in every aspect of the
services.

To become a profitable business with expansion potential in terms of revenue collections.

1.4 Values
Commitment with the customers

Punctuality

Availability

Team Work

 Social responsibility

Integrity

1.5 Business Philosophy

Lunch Boxs main business philosophy is to serve fresh and healthy as well as quality lunch
to its customers. Our core business value is quality of our product and our major concern is
the health of our customers.

1.6 Legal form of ownership

Lunch Box is a private firm run by the owner Sagar KC. Since it a sole business, the financial as
well as management responsibilities will be under the owner. Hence, the owner will have
unlimited liabilities in case of loss.

2. PRODUCTS AND SERVICES
2.1 Product
Lunch Box is a complete lunch package that people want to buy. Lunch Box will be the brand
that everyone will trust for its taste and hygiene as well as quality. Our goal is to be a destination
for health concerned food lovers, seeking a taste and nutrition.

In order to maintain the hygiene every person in kitchen will be provided with gloves, and chefs
cap that will be washed every day. The cooking utensils will be washed with best possible soaps
and detergents. Any customer would be allowed to visit the kitchen during operation in order to
ensure the hygiene and quality.

As far as the food is concerned, there will be two types of lunch boxes:

Vegetarian

Non-vegetarian

Vegetarian food will include pure vegetarian food while the non-vegetarian would include egg,
fish, chicken and mutton. Both the products will include different varieties each day so that the
customers would not be tired of the same menu. The menu will be designed initially and will be
revised regularly in every 6 months.

2.2 Services
Lunch Box will incorporate the service of preparing lunch in the Lunch Boxs kitchen every day.
The vegetables, meat, milk, curd etc will be contracted with wholesalers who will deliver them
fresh to the office every morning. Other raw materials such as rice, wheat, spices will be
purchased once every a month.

The menu and varieties will be the sole responsibilities of the company though regular feedback
will be taken from customers and incorporated into the service. This would help to gain the
customers Trustworthiness. Lunch Box will consult with nutritionists and specialists to create a
menu of healthy food that are free of preservatives, artificial flavors and colors. The people will
be trained regularly in order to ensure the quality.

Each lunch box will delivered at the customers address exactly at 2 p.m. every day. Delivery
would be so punctual that the company would try to establish the brand image with not only its
products taste and hygiene but also with punctuality.

3. MARKET RESEARCH AND ANALYSIS
3.1 Market Analysis
However, there are restaurants, which receive the orders and deliver food at the pre-informed
addresses. The service offered by Lunch Box is unique in its own. It delivers cooked lunch at the
customers place and the customer need not order the food too. Once subscribed, Lunch Box
would take care of all the necessities of its customers. Till date, there is no similar business in the
market thus providing Lunch Box a first mover advantage. However, there would be threats of
new entrants as the restaurant businesses may add similar service emulating the business concept
of Lunch Boxes.

3.2 Market size

As per the latest census, the total population of Kathmandu is 1,744,977. Besides, there are 30
commercial banks. Several other private firms and financial institutions other than banks are also
prevalent in the capital. Assuming a very employees figure, we have calculated the market size
of 15000. We aim to cater to only 1% of the market in the 1st year of operation that comes out to
be around 150. The target number from different financial and other institutions has been
calculated as 300 for now as attached in the Annex. 150 is 50% of 300 so our target subscriber of
1st year is easily achievable We expect to increase our market size by 100 every year till 4 years
and cater to maximum 500 customer everyday in 5th year.

Market Size

Year 1 Year 2 Year 3 Year 4 Year 5

Potential customers 150 250 350 450 500

3.3 SWOT Analysis

Strength

Good, tasty and hygienic food as well as qualitative

Reasonable price

Delivery of food at workplace

Punctuality

Good customer service

Weakness

Transportation

Unpredictable Market

Opportunity

More and more people joining workforce

High demand for good food

Threat

Existing and new restaurants

Possibility of new rivalry

3.4 PESTLE Analysis

Political

Political factors influence organizations in many ways. These factors can create advantages and
disadvantages for organizations. Currently, political situation of Nepal is not so stable. Frequent
strikes and interruptions would cause business institutions to be closed. Hence, political factors
would seriously hamper this business.

Economic

All businesses are affected by national and global economic factors. National and global interest
rate and fiscal policy will be set around economic conditions. The climate of the economy
dictates how consumers, suppliers and other organizational stakeholders such as suppliers and
creditors behave within society.

In context of Nepal, the economic status of people is still very poor which we need to aware of.
So, the pricing of our lunch boxes will matter a lot. Hence, we need to employ strategies that
protect and promote our business through economic conditions throughout the world.

Social

Social forces such as family, friends, colleagues, neighbors and the media affect our attitudes,
interests and opinions. In summary, organizations must be able to offer products and services
that aim to compliment and benefit peoples lifestyle and behavior.

Since, the younger generation is getting busier with little or no time for cooking, a healthy and
nutritious offer is likely to be appreciated.

Technological

Technological advances have greatly changed the manner in which businesses

operate. Technology infrastructures such as the Internet, telephone, mobile phones, laptops,
desktops that transmit and record information, have changed the way businesses operate.

In our business also, we will be using Internet and computers to transmit and record information.
We will create our own websites and make information easily accessible to our customers.
Besides, the orders will also be taken through web, phones and SMS.

Legal

Since there are no any fixed rules and regulations in the country, legal procedures are quite
difficult. The frequent changes in the legal bodies and the procedures make the business
unpredictable.

Environmental

Nowadays, people prefer to buy the products and services that affect the environment less. Since
lunch box will also have large amount of wastage, we need to be conscious about managing
these factors and keeping the environment clean, green and healthy.

3.5 Competitor Analysis

There are no any organizations offering the similar services in Nepal. We are unique in terms of
products and services. However, several indirect competitors have been identified; most
importantly the restaurants and hotels providing the home pack services.

3.6 Porters five forces Analysis

Michael Porter's famous Five Forces of Competitive Position model provides a simple
perspective for assessing and analyzing the competitive strength and position of a corporation or
business organization. The five forces are as follows:

Porter's five forces is a framework for the industry analysis and business strategy development.

Intensity of Rivalry

The intensity of rivalry helps determine the extent to which the value created by an industry will
be dissipated through head-to-head competition. Since we are unique in the market, we do not
have any direct competitors till date. So, we have less intense rivalry during startup; though large
number of small and large hotels and restaurants offering home pack services can be expected to
create strong rivalry in later stages.

Threat of Entrants

Both potential and existing competitors influence average industry profitability. The threat of
new entrants is usually based on the market entry barriers. Since, the concept of the business is
simple and easily affordable; others can see better prospects in this business. So, we can expect
several new entrants. New entrants will also raise the level of competition.

Threat of Substitutes

The threat that substitute products pose to an industry's profitability depends on the relative
price-to-performance ratios of the different types of products or services to which customers can
turn to satisfy the same basic need. Though there are large number of hotels and restaurants,
there are no any companies that will bring the lunch box to everyones desk.

Bargaining power of Suppliers

The ability to charge customers different prices in line with differences in the value created for
each of those buyers usually indicates that the market is characterized by high supplier power
and at the same time by low buyer power. The main raw materials for this business are mainly
rice, wheat, vegetables, cereals, meat, oil, spices etc. there will be several local suppliers offering
these raw materials. So the bargaining power of the suppliers will be low.

Bargaining power of Buyers

The most important determinants of buyer power are the size and the concentration of customers.
Other factors are the extent to which the buyers are informed and the concentration or
differentiation of the competitors. The bargaining power of buyers is high in this business as
there are several alternatives for the customers. We would have to focus in Differentiation and
Cost Leadership strategies.

3.7 Competitive Advantage

A competitive advantage is an advantage over competitors gained by offering consumers greater
value, either by means of lower prices or by providing greater benefits and service that justifies
higher prices.

Since, we do not have any other company offering the similar service; absence of direct rivalry is
a competitive advantage. Besides, we will be offering high quality food that would be tasty,
healthy and hygienic. In addition, the punctuality of the service and availability of food at the
employees desk will be a remarkable value that we will focus on.

Attempt will be done to penetrate the target market from the very beginning and also capturing a
larger market share. For a new similar company to come out it would take time and by the time
competitors come out, Lunch Box will already capture its target market.

4. MARKETING STRATEGIES
4.1 Market Growth Strategy
Market growth strategy helps in determining a business attempts to grow depend on whether it
markets new or existing products in new or existing markets.

Product Development Strategy

Since, Lunch Box is a new product that will be introduced in the existing market; our market
growth strategy would be Product Development strategy. There are many hotels and restaurants
however; the food and the service that would be offered by the Lunch Box would be very new to
the existing market.

4.2 Sales Forecast

The sales forecast is as shown in the tables below. There will be sales of 2 types of Lunch Boxes:
Vegetarian Set and Non-Vegetarian set. The final selling price of the boxes has been calculated
as Rs. 90 and Rs.120 for vegetarian set and non-vegetarian set respectively as per the market
trend. Profit margin in each box is 25%, 40% will be for direct cost and rest will cover the
indirect costs.

Since the business is an everyday business, every day forecast has been done initially. Then, the
monthly forecast is calculated from which an every year forecast has been done assuming there
will be rise in the sales revenue as illustrated in the table below:
Sales Forecast per Month

No. of No. of
Products Products Price Per Profit Selling Sales
Products Produced Sold Unit Margin Price (Rs.)
Veg. Set 60 54 68 25% 90 4860
Non-Veg Set 90 86 90 25% 120 10320
Total Per Day Sales 150 140 15180
Total Per Month Sales 379500

Sales Forecast per Year

Year 1 Year2 Year3 Year4 Year5
Growth 10% 15% 20% 25%
Sales Revenue per month 379,500 417,450 480,068 576,081 720,101
Month of Operation 12 12 12 12 12
Sales Revenue per year 4,554,000 5,009,400 5,760,810 6,912,972 8,641,215

4.3 Segmentation
The purpose of segmentation is, firstly, to identify people who are likely to be responsive and secondly, to
develop rich descriptions in order to better understand them, create marketing mixes for them and reach
them with meaningful advertising or other communications. The basis of segmentation will be as
follows:

4.3.1 Behavioristic Segmentation

One of the best ways to segment markets is to group consumers by purchase behavior because
each has a different need and prefer to buy products mainly on the basis of their behavior. Lunch
Box is planning to use the following parameters of segmentation:

User Status: Regular

Usage Rate: Once per day.

Purchase Occasion: Payment would be collected only once a month from a subscribed
customer. The minimum package would be three month.

Benefits Sought: Our main promotional base would be health, hygiene and punctuality.

4.3.2 Demographic Segmentation

Demographic segmentation is a way to define population by their statistical characteristics: sex,

age, education, occupation, income and other quantifiable factors. Since, our target market is
basically a working class people our focus would be:

Status: Working

Income: Fairly good

Age: Above 25 years

Occupation: Working in private financial institutions and big corporate houses.

4.4 Targeting to the Customers

Once the market segmentation process is complete, we can target our customers. This will
determine the content, look and feel of our advertising, too.

There are lots of business houses those employ hundreds of people. We cannot target each of
them while some may not even require such services and products. Lunch Box is basically
targeted for working people segments where both the husband and wife are working and have
very less time for cooking meal at home. Due to this reason, they would be looking for a good
lunch that would be healthy, nutritious and hygienic.

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Since, the average price is pretty high for an average Nepali; the target group would be
preferably upper middle class. Though initially, the target group is mainly large banks and some
other big corporate houses, the company foresees the potential of expansion to quite a big market
that includes corporate houses of all sizes and types.

4.5 Positioning
Products may be positioned in many different ways. Generally, the way they are differentiated,
the benefits they offer, the particular market segment to which they appeal, or the way they are
classified ranks them. Following positioning strategies would be adopted for Lunch Box.

Product Attributes: The basic goal of positioning strategy is to own a word that ranks the product
in prospects mind and for Lunch Box, it would be Hygiene. We would equip our workers with
disposable gloves, which they would be wearing strictly during cooking, packing and delivering
as well.

Benefits: Lunch Box would be the tastiest and healthiest food that would reach the customers
exactly at Lunchtime i.e. 1 p.m.

Usage Occasion: Usage time for Lunch box as the name points is Lunch time. So, Lunch Box
would be positioned as food of 1 i.e. Lunch time.

4.6 Marketing Mix (7Ps)

Since, Lunch Box is a service business, the marketing mix principles used by our business would
be 7Ps, which have to be carefully managed in order to meet the needs of the defined target
group.

Product

Lunch Box is a complete lunch package that would be healthy, hygienic and tasty. As far as the
food is concerned, there will be two types of lunch vegetarian and non-vegetarian. The
sentiments of people in both the cases would be very well taken care of.

Promotion

Customers have to be made aware of the product. Leaflets, billboards, advertisements in local
newspapers will be the preferred cost effective Medias and word of mouth will be most
preferred. Availability at desk and the punctuality of the service will be the main focus of the
promotion.

Price

The price must be high enough to cover costs and make a profit however low enough to attract
customers and prevent them from looking for other cheaper options. The unit price of each set
has been placed on the basis of market trend; however, a calculation has been done in order to

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verify if our price is sufficient to meet our expected profit as attached in annex. The pricing
strategy is:

No. of No. of
Products Products Price Per Profit Selling
Products Produced Sold Unit Margin Price
Veg. Set 60 54 68 25% 90
Non-Veg Set 90 86 90 25% 120
Total Per Day Sales 150 140
Total Per Month Sales

Place

The business must have a location that is convenient and suitable for customers and any supplier.
Initially, the plan is to rent a flat at Anamnagar. The reasons to select the area are:

It will be at the heart of the city and easily accessible to most of the business areas of Kathmandu
such as New Baneshwor, Old Baneshwor, New Road, Kings Way, Thapathali etc. Even during
traffic jam or other problems, the lunch boxes can be delivered to the business areas.

People

Lunch Box is basically targeted for working people where both the husband and wife are
working and have very less time for cooking meal at home. Due to this reason, they would be
looking for a good lunch that would be tasty, healthy, nutritious and hygienic.

Process

Buying of raw materials, preparing them and cooking and finally packing them into boxes would
be the basic process followed in Lunch Box.

Physical Evidence

The food, packaging, the brand name, logo would be the physical evidences of the service.

4.7 Product Branding

Lunch Box is trying to create recognition and identification through branding. We would also
promise consistent, reliable standards of quality, taste, and even psychological satisfaction which
add value to the customers and us as well. Our branding will focus on high quality food and
outstanding service, which would help us, get brand loyal customers ultimately increasing our
brand equity. The various brand elements would be:

Brand Name: Lunch Box

Slogan: ...knows what you need!!!

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4.8 Product Packaging
Packaging is an important identification device that gives differential advantage to the brand.
Lunch Box package would serve the purpose and will be exciting, appealing and at the same
time functional, too. In our case, lunch would be kept in disposable boxes which would be then
put into recyclable paper bags.

4.9 Promotion
Promotional marketing is a business marketing strategy designed to stimulate a customer to take
action towards a buying decision. Lunch Box would make use of combination strategy i.e. using
both push and pull strategies. Push strategy will be used initially when the product is new in the
market. The company is targeting to adopt this strategy during first three months. Then after, the
target would be to make the customers ask for the products i.e. pull strategy

4.10 Elements of Marketing Communications Mix

A simple adage is very popular in Marketing. Advertising can create an image, but a reputation
must be earned. In order to earn the reputation, we need use combination of different
communications strategies such as Advertising, Personal Selling, Public Relations, Direct
Marketing and Sales Promotion.

As we are going for combination strategy, we plan to generate the demand through Advertising and
Direct Marketing and increase the supply through Sales Promotion. Through Integrated Marketing
Communication (IMC), we would make sure that all forms of communications and messages are carefully
linked together as we are fully aware that good IMC can create competitive advantage, boost sales and
profits, while saving money, time and stress. Budget allocations for different communications mix
elements are:
Promotional tools Percentage Amount (Rs)
Advertisement 55% 33,000
Sales Promotion 25% 15,000
Direct Marketing 15% 9,000
Flexible Budgeting 5% 3,000
Total Budget in 1st Year 100% 60,000

4.11 Media Strategy

As already mentioned in Communications Mix, as per the consumer behavior of the target
market, TV and radio will be our lesser priority while newspaper and magazines would be our
primary media. Then, second priority will be for Bill boards/ Hoarding
boards/Pamphlets/Brochures/Leaflets near the target areas. As this is the Internet era, Internet
will also be a key media for publicity. Creating websites, sending emails to the prospective
clients will be done as well.

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5. Production and Operational Plan
5.1 Product and Product Requirement
The finished products of the company are:

Vegetarian Sets: With due respect to its customers feelings, we will make sure that there will not
be any type of mix up in the dishes. Vegetarian dishes will be cooked and packed in a separate
kitchen. These will be finally put into white colored recyclable boxes.

Non-Vegetarian Sets: Lunch Box will take care of the choices of its customers. We will order the
uncooked non-vegetarian items from a local wholesaler. These will be cooked and packed along
with other items and finally packed in the red and black box.

Since Lunch Box is an everyday product and is served fresh, there would be no inventories as
such. The necessary stuffs in the day-to-day business operation are:

Rations: The rations, such as rice, wheat, cereals, vegetables, spices etc. are the basic raw
materials for a catering business and a major cost-determining factor. These rations will be
obtained from the wholesalers in the local market.

Lunch Boxes: Disposable Lunch Boxes and spoon and fork will be used for Lunch Box. These
lunch boxes will then be put into paper bags in order to ensure the dishes do not get messed up.
These lunch boxes and bags will be of two different colors for two different lunch sets.

The same red bag will also be ordered in orange color too. The Red bag will contain vegetarian
set while Orange will be for non-vegetarian set of lunch box.

Labels, tags and packaging: The labels and tags would include the logo, brand name and slogan
that would be eye catching, attracting and appealing, too.

5.2 Service and Service Requirement

Lunch Box is basically a service business. The food cooked in the kitchen of the company will
be delivered to the customers requested addresses. Right delivery at right place and Punctuality
will be the challenge of the company.

The requirements of the services are as follows:

Ordering Raw Materials: Different wholesalers will be contacted for the delivery of raw
materials. The rations such as rice, wheat, cereals will be ordered once in a week or two. Other
fresh materials such as vegetables, milk, meat etc. will be ordered daily.

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Delivering Cooked Food: Once the food is cooked and packed, the other challenge is to deliver
right boxes to the right addresses at right time. The boxes of one institution would be tied into
one bundle in order to minimize the confusion during delivery.

5.3 Production Process Flow

The production involves the process of converting rations into a well packed lunch box. The
process flows as:

Design: During the design phase, the menus will be designed. An experienced chef will be hired
who will develop 10-14 options each month. In both the sets, we will try to include as much
variety as we can so that the customers can enjoy different varieties every day.

The menu for next day will be finalized 1 day prior so that the Operations Manager would be
able to manage the requirements for the next day. Since wholesalers supply the vegetables and
other requirements, they would be informed on the preceding day.

Preparing: The preparing team will check the requirements and cut the vegetables and prepare
other ration and as per the requirements put by the chefs. Preparing team will also be responsible
for assisting the cooks and finally packing them.

Cooking: The cooking team will be responsible for cooking the food. The head chef will prepare
the menu and arrange the cooking tasks among three of them.

Finishing: Once the dishes are cooked, the preparation team will pack the dishes in the respective
packages and make them ready for delivery.

Delivery: After the Lunch boxes are ready for delivery; they will be put in the different
motorbikes and vans arranged for different locations. The shortest alternate routes instead of
main roads will be chosen to avoid the probable traffic jam.

Cleaning: Cleaning team will be responsible for the cleaning of the kitchen and the utensils as
required.

5.4 Quality Factors and its Management

The different factors that would determine the quality of Lunch Box and ultimately prove to be
our key success factors are:

Hygiene: Lunch Box is one of the most hygienic foods that would be available in the market. In
the current scenario, market foods have lost their trust in terms of cleanliness. Lunch Box will
make use of gloves, apron and caps compulsory in kitchen. Cooking utensils and kitchen will be
kept very much clean.

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In order to respect the emotions of vegetarians, we will prepare vegetarian dishes first. After
completing all those items, will non-vegetarian food be prepared.

Health: For good health, the cooking methods would be such that it will preserve the nutritional
factor of the dishes. Fresh vegetables and raw materials will be used in the dishes.

Taste: Until and unless taste is not good, a food business will not be successful. Hence, the food
will have to be tasty to attract the customers. Head chef will be responsible for maintain the
tastiness of the food.

Reliability: Since lunch is a food of 1 p.m. and most of the business houses have their lunchtime
at 1 p.m., it will be our challenge to deliver food before lunch. However, it should not be too
early too. Hence, the food will be ready by 12 p.m. and delivered by 12:30 p.m. The delivery
priority will be given to longer routes first.

Quality Management
At the end of each month, feedback will be taken from the customers. Certain questionnaires will
be asked to be filled up. On the basis of these feedbacks, our strength and weaknesses will be
rectified. A comparative study will be done with the prior feedbacks and this feedback. Thus, the
company will benchmark its service with itself and the competitors. As the business grows, we
will even try to implement Six-sigma concept for quality management that will be focused in
reducing customer dissatisfaction and complaints.

5.5 Layout Strategy

One flat of approximately 900 sq. ft containing 4 rooms will be rented at Anamnagar for Lunch
Box office at the 1st or 2nd story of the building. First room near the staircase will be used for
official/administrative purpose. 2nd room will be for storage of rations and extra equipments. 3rd
room will be used for packing lunch boxes. 4th will be a big room at the centre for Kitchen. The
kitchen will be of approx. 500 sq.ft that can cater upto 300 people. Till 500 customers, we can
use the same flat. In case of more than 500 customers, we will need to arrange another kitchen.

If we get a flat as per requirement we will contract for rental, else we will rent an empty flat and
partition by ourselves.

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5.6 Scheduling
Since the business has time boundary, it is important to schedule all the activities so that lunch
can be delivered on time. The scheduling of different activities is:
Time Activities
Before 7 a.m. All the requirements should have arrived the kitchen
7 a.m. Office hour begins
7-8 a.m. Preparation time
8 a.m.-11:45 a.m. Cooking time
11:45 a.m. - 12:15 p.m. Packing time
12:15 p.m. Vehicles stand by for delivery
12:15 p.m. - 12:30 p.m. Lunch Boxes already inside vehicles
12:30 p.m. -12:55 p.m. Travelling time/ Kitchen cleaning time
13:55 p.m. - 13:00 p.m. Delivery
Next Day's menu finalization/Kitchen equipments cleaning/
13:00 p.m. - 14:00 p.m. Order placement to wholesalers
14:00 p.m. Close of Business day

5.7 Distribution Strategy

For service-focused companies, establishing the most appropriate distribution strategies is a
major key to success, defined as maximizing sales and profits. Since, punctuality is one of the
key success factors of Lunch Box, distribution strategy will be an utmost important factor.

Lunch Box is planning to distribute the product from the company kitchen to the customers
address. We are planning to outsource the distribution part to an efficient and trustworthy
delivery agent that would help us reduce the additional vehicle costs and enhance our brand
image of punctuality as well. The office will be situated at Baneshwor which is central to all our
target locations. These lunch boxes will then be transported to customers using different
outsourced vehicles such as bicycles, motorbikes and vans as required by the nature of the road
and the volume of the supply.

5.8 Outsourcing Plan

Since the distribution part is only a few hours job, we would ask the outsourcing company to
provide us the manpower only for about 1 hour. They have to come at the Lunch Box kitchen at
12:00 p.m. sharp. Once they finish distribution at 1 p.m., they can report the operation manager
by phone. So the salary of each of the person has been assumed t be Rs. 1000 only.

So, a total of 4 bikes and 4 cycles will be hired. Cycles will be expected to cover up to 3 kms i.e.
the nearer places from the office while the motorbikes will be delivering from more than 3 Kms
up to 8-10 Kms. For more than 10 kms, if it needs more than 30 mins, either the assignment will
not be taken or if it the area has high demand at least above 150 boxes, a new kitchen can be
opened.

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Outsourcing Plan
Cycle Bike
Salary Expense per month 1000 1000
Service Charge/month 1000 2000
Fuel Cost/month 0 2750

Total
Hired Total labor Service Fuel
Vehicle Number cost/month Charge Cost/Month Total Cost
Cycle 4 4000 4000 0 8000
Scooter 4 4000 8000 11000 23000
Outsourcing Cost/Month 31000
Outsourcing Cost/Year 372000

5.9 Pre-operating Activities

We are planning to start the business approximately 2 months before actually starting the project
formally. The following activities have been listed that need to be undertaken before operating
the business:
Duration in
S. N. Activities weeks
1 Registering the business 1 week
2 Preparing the business plan 2 weeks
3 Contacting the equipment suppliers and wholesalers 2 weeks
4 Booking a flat 1 week
5 Hiring Manpower 2 weeks
6 Installing equipments 1 week

Gantt chart of Lunch Box

Duration in weeks
S. N. Activities 1 2 3 4 5 6 7 8
1 Registering the business
2 Preparing the business plan
3 Contacting the equipment suppliers
and wholesalers
4 Booking a flat
5 Hiring Manpower
6 Installing equipments

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6. Organizations and Management
Lunch Box is a private firm owned by Mr. Sagar kc. This is a family business so the owner has
unlimited liabilities.

6.1 Organization Structure

In the initial stage, there will be few staff. The owner will take the leadership role and will be
responsible for managing marketing and other legal duties.

General M anager
Sagar kc

Production manager Marketing m anager Financial manager

Sapana kc Anita K.C
Amrit khadka

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7. Financial Plan
Key Assumptions

Cash Flow Assumption

Sales Cash
Purchase Cash

Operating Assumption
Hours Operational per day 8
Days Operational per month 25

Expense Assumption
Raw Material Price growth 10% in 1st and 2nd year and 15% in 3rd and
rate 4th year
10% in 2nd year then after by additional 5%
Sales Revenue growth rate every year till 5th year
Payroll growth rate 10%
Rent growth rate 10%
Depreciation SLM
Tax Rate 25%

Capital Requirement

Total capital requirement for Lunch Box will be Rs. 800,000 which has been calculated as:
Amount
Particulars (Rs)
Fixed Assets Requirements 700,000
Working Capital
Requirement 90,000
Startup Cost 10,000
Total Cost 800,000

Source of Capital

Since Lunch Box is a single owner business with less capital requirement, all the capital
will be sourced through equity. The capital investment will be Rs. 800,000.
Capital Structure
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 Sources Proportion Amount
Equity 100% 800000

Fixed Assets Requirement

The fixed assets requirement for Lunch Box is Rs. 700,000. Depreciation for the asset is
Rs.100, 000 assuming the life of fixed assets to be 7 years.

Fixed Assets Cost Depreciation

Furniture and Fixtures 150,000 21428.57
Shelf and Cabinets 200,000 28571.43
Cooking Utensils 80,000 11428.57
Chimney 100,000 14285.71
Refrigerator 38,000 5428.57
Weighing Machine 2000 285.71
Oven 50,000 7142.86
Gas Stove 60,000 8571.43
Setup Cost 10,000 1428.57
Telephone Cost 10,000 1428.57
Total 700,000 100,000

Fixed Assets Calculations for 5 years

Particulars Year-1 Year-2 Year-3 Year-4 Year-5

Fixed Assets 700,000 600000 500000 400000 300000

Less Depreciation 100,000 100000 100000 100000 100000

Balance at the end 600000 500000 400000 300000 200000

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Operating Expenses
i. Administrative Expenses
Administrative Cost Year 1 Year 2 Year 3 Year 4 Year 5

Advertisement Expenses 60,000 66,000 75,900 91,080 113,850

Telephone and Internet Expenses 30,000 33,000 37,950 45,540 56,925

Electricity and Water Expenses 30,000 33,000 37,950 45,540 56,925

Package 50,000 55,000 63,250 75,900 94,875

Stationary Expenses 20,000 22,000 25,300 30,360 37,950

Fuel 100,000 110,000 126,500 151,800 189,750

Repair and Maintenance 10,000 11,000 12,650 15,180 18,975

Outsourcing Plan 372,000 409,200 450,120 495,132 544,645

Rent (10% inc per year) 150,000 165,000 181,500 199,650 219,615

Total Admin Expenses 822,000 904,200 1,011,120 1,150,182 1,333,510

ii. Personnel Expenses

Salary per Month

Salary
Head Count Rate Monthly Salary
M.D./Administrator 1 20000 20000
Operational Manager 1 20000 20000
Preparing team 2 8000 16000
Cleaning team 2 6000 12000
Cooking team
Head chef 1 18000 18000
Other cooks 3 12000 36000
Total 10 84000 122000

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 Salary per Year
Year 1 Year 2 Year 3 Year 4 Year 5
Growth, % 10% 10% 10% 10%
Salary per month 122,000 134,200 147,620 162,382 178,620
Month of Operation 13 13 13 13 13
Salary per year 1,586,000 1,744,600 1,919,060 2,110,966 2,322,063

Income Statement
Lunch Box will generate profit of Rs. 160,800 in the first year of operation. For the next four
years, profit will be increasing.

Income Statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Total Revenue 4,554,000 5,009,400 5,760,810 6,912,972 8,641,215
Less Expenses:
Direct Cost 1,821,600 2,003,760 2,204,136 2,534,756 2,914,970

Personnel Expenses 1,586,000 1,744,600 1,919,060 2,110,966 2,322,063

Administrative Expenses 822,000 904,200 1,011,120 1,150,182 1,333,510

Pre-operating Expenses 10,000

Total Cash Expenses 4,239,600 4,652,560 5,134,316 5,795,904 6,570,543

Profit Before Depreciation

and tax 314,400 356,840 626,494 1,117,068 2,070,672

Less Depreciation 100,000 100,000 100,000 100,000 100,000

Profit Before Tax 214,400 256,840 526,494 1,017,068 1,970,672

Tax @ 25% 53,600.00 64,210.00 131,623.50 254,266.90 492,668.09

Net Profit After Tax 160,800.00 192,630.00 394,870.50 762,800.70 1,478,004.26

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 Statement of Retained
Earnings
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Beginning R.E. 0 80,400.00 176,715.00 374,150.25 755,550.60
Net Profit 160,800.00 192,630.00 394,870.50 762,800.70 1,478,004.26
Total 160,800.00 273,030.00 571,585.50 1,136,950.95 2,233,554.86
Dividend Paid (50%) 80400 96315 197435.25 381400.35 739002.1275
Closing Retained
Earnings of the year 80,400.00 96,315.00 197,435.25 381,400.35 739,002.13
Accumulated Retained
Earnings 80,400.00 176,715.00 374,150.25 755,550.60 1,494,552.73

Cash Flow Statement

Particular Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
A. Cash Inflow
Equity - Capital 800000
Sales Revenue 0 4,554,000 5009400.00 5760810.00 6912972.00 8641215.00
Total Cash Inflow (A) 800000 4554000 5009400.00 5760810.00 6912972.00 8641215.00

B. Cash Outflow
Fixed Assets 700000 0 0.00 0.00 0.00 0.00
Direct Cost 1821600.00 2003760.00 2204136.00 2534756.40 2914969.86
Personnel Expenses 1586000 1744600.00 1919060.00 2110966.00 2322062.60
Administrative Expenses 822000 904200.00 1011120.00 1150182.00 1333510.20
Pre operating Expenses 10000.00
Tax Expense 0.00 53600.00 64210.00 131623.50 254266.90 492668.09
Total Cash Outflow (B) 700000.00 4293200.00 4716770.00 5265939.50 6050171.30 7063210.75

Surplus/Deficit (A-B) 100000.00 260800.00 292630.00 494870.50 862800.70 1578004.26

Less: Accumulated
Dividend 0.00 80400 96315 197435.25 381400.35 739002.128
Add: Beginning Balance 0 100000 280400.00 476715.00 774150.25 1255550.60
Ending Balance 100000.00 280400.00 476715.00 774150.25 1255550.60 2094552.73

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Balance Sheet

Particulars Year-0 Year-1 Year-2 Year-3 Year-4 Year-5

A. Current Assets
Cash 100000.00 280400.00 476715.00 774150.25 1255550.60 2094552.73
Pre operating
Expenses
Total Current Assets 100000.00 280400.00 476715.00 774150.25 1255550.60 2094552.73
B. Fixed Assets
Fixed Assets 700000 600,000 500000 400000 300000 200000
Total Fixed Assets 700000 600000 500000 400000 300000 200000

Total
Assets(A+B+C) 800000.00 880400.00 976715.00 1174150.25 1555550.60 2294552.73
C. Liabilities
Equity 800000 800000 800000 800000 800000 800000
Retained Earnings
(accumulated) 0 80400 176715 374150.25 755550.6 1494552.73
Total Liabilities &
Equity(C+D) 800000 880400.00 976715.00 1174150.25 1555550.60 2294552.73
Difference 0.00 0.00 0.00 0.00 0.00 0.00

Financial Ratios

Calculation Year 1 Year 2 Year 3 Year 4 Year 5
Net Profit Margin 3.53% 3.85% 6.85% 11.03% 17.10%
ROI 20.10% 24.08% 49.36% 95.35% 184.75%
ROA 20.10% 21.88% 40.43% 64.97% 95.01%

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 8. Future Plans
Since, the company will be generating enough revenue as the period increases; we are
aiming to get the first mover advantage in the industry in future. The future plan of Lunch
Box is to increase the capacity for service to large number of customers. We plan to
establish our own chain and open the kitchens in several core areas of Kathmandu valley
and outside the valley as well. We even aim to start a small lunch package for kids in
schools too and later in airlines industry too.

With lunch Box, we will be trying to introduce the practice of breakfast lunch and dinner
in the working community of Nepal rather than two meals at home and a high tea in the
afternoon.

Also, we are planning to start up new restaurant as well nearby Baneshwor.

9. Exit Strategy

Lunch Box is very less prone to risk of failure as its raw materials and fixed assets can be
readily used for a normal restaurant business. Since food is a must for everyone, Lunch
Box foresees a bright future provided it is very highly committed to its mission, vision.
Hence, Lunch Box can be converted into a normal restaurant or sold without incurring
much loss also, it requires lesser amount of initial capital. So the organization will suffer
lesser loss in terms of capital.

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Bibliography:
Heizer and Render (2008), Operations Management , Eight Edition, Singapore, Pearson
Education.
Kotler and Keller (2007), Marketing Management, Twelfth Edition, New Delhi, Prentice
Hall of India.

Norton and Porter (2007), Financial Reporting and Analysis, Third Edition, New Delhi,
Prentice Hall of India.

www.wikipedia.com
www.google.com
www.scribd.com

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