Center for Entrepreneurship and Small Business Management Maharshi Dayanand Saraswati University, Ajmer

Business Plan Development On KHALSA COLLECTIONS- “SOMERTHING DIFFERENT AND AFFORDABLE”

Submitted To: Mr. Dushyant Bafna Tailor

Submitted By: Mohit Jadam Manish Gaurav

Mawar Amit Tak

BBA (E&FBM) Part-III (Sem-VI)

CONTENTS
 ACKNOWLEDGMENT  CONTENTS Introduction to Khalsa Collections • • • • • • • Mission Unique Features Objectives Production Time Material Labour Requirement Location

Market Analysis • • • Market Segmentation Marketing Mix Marketing Strategy

Operational Requirements • • Internal Working Criteria Transportation

Hemraj Sharma. Before we explain about our Business Plan. Who is the owner of HB. Maharshi Dayanand Sarswati University. Furniture House. Manish Tailor. Mohit Jadam. Ajmer.VI . We would express thanks from the core of our heart to Mr. Dushyant Bafna. Without there co-operation and help we wouldn’t have been in a position to complete our Business Plan. FIRST AND FORMOST. We would like to acknowledge Mr. Ajmer for suggesting and helping us in preparing this Business Plan. Faculty Member of Center for Entrepreneurship and Small Business Management. Gaurav Mawar & Amit Tak BBA (E&FBM) Part III Semester.Financial Analysis • Ratios and Depreciation Charged • Profit and Loss Account • Balance Sheet ACKNOWLEDGMENT It gives us immense pleasure in a submitting this Project of Business Plan Development (BPD) for the Semester VI As the part of BBA in ENTREPRENEURSHIP AND FAMILLY BUSINESS MANAGEMENT. Who has provided this opportunity and enabled us to gain this experience in a business area.

creative. artistic. Scientific and Cultural Organization/Information Technology Community (UNESCO/ITC) International Symposium on “Crafts and the International Market: Trade and Customs Codification”. October 1997: Handicrafts can be defined as products which are produced either completely by hand or with the help of tools. Various attempts have been made to define this broad and diversified industry. The Handicraft Industry is one of the important productive sectors. Manila. Philippines. The following definition strives to cover diversity and complexity of Handicraft Industry. . religiously and socially symbolic and significant.INTRODUCTION Handicrafts are unique expressions and represent a culture. aesthetic. Defining Handicrafts: Definition According to United Nations Educational. tradition and heritage of a country. Mechanical tools may be used as long as the direct manual contribution of the artisan remains the most substantial component of the finished product. Such products can be utilitarian. functional. Handicrafts are made from raw materials and can be produced in unlimited numbers. culturally attached. decorative. traditional.

of India: Handicraft can be defined. Today the people are more aware of furnishing and interiors of their houses. so they ask for a large rang of variety end excellent services which are the main aim of KHALSA COLLECTION.Definition according to Govt. Our unique selling preposition will target the customers with their unique demands. which is made by hand.“SOMETHING DIFFERENT AND AFFORDABLE. should have some artistic value. Dressing Tables.” This Business Plan Unit is a small retail business aimed at a big time in order to reach its lofty goals and stands for its quality and affordable prices in the markets of its product like Dinning Tables. MISSION‘Khalsa Collections’ will build its image as a quality first and then will begin earning higher profits. Wooden Toys. Show Piece. It will be providing the products which already exist in the market and will also provide a new breadth of air in the market through the availability of unique products and services. Antics. they may or may not have functional utility. . Single or Double Beds with different features. All over Furniture Goods are available in our Furniture Mart.

semi skilled and unskilled workers. So total requirements are as follows: . by focusing on getting customers from near by areas of Ajmer like nasirabad. PRODUCTION TIMEWood carving is a time consuming process. beawar. • Our Furniture Goods are also designed and shaped with the help of fully skilled carpenters. • The Furniture Goods are altered according to the order. The time needed by Indian craftsmen to create carved wooden handicrafts may range anywhere from a week (for small items) to a few months for large items which require elaborate carving techniques. • To provide different varieties of product to the customers by fulfilling their expectation and to achieve a good position in the market. OBJECTIVES• To capture its market share by 25%within a year.UNIQUE FEATURES• Different varieties and sizes of products are available under one roof with a unique customer’s service. LABOUR REQUIRMENTSHandicraft is a labour intensive product and it is all depend upon labour only and all kind of labour requirements are there like in this we need skilled.

of area 2. The rate of land is Rs 500sq meters (one side road plot).60.18.000 LOCATION AND SITE DEVELOPMENT The area for setting up a handicraft manufacturing unit is decided after surveying all the potential areas.500 2.Employees Production Supervisor Accountant Skilled Workers Semi skilled Workers Unskilled workers Peon Guard Total Number 1 1 5 8 3 1 1 20 Salary (Rs.500 Annually 60000 60000 54000*5 = 2.000 2.) Per day 150 125 100 Per month 5000 5000 4500 3750 3.000 30.000 9.000 36000*3 = 1.000 45000*8 = 3.08.000sq meters or 21529sq ft .000 30. Ajmer. The location of plant will be at Makarwali Road Vaishali Nagar.70.

. The rates of babool are Rs. This is available in Gujarat. Room Washrooms Office room Fire fitting Total 12”*10” 6”*8” 15”*12” 120 48 180 200 200 200 24000*5=120000 9600*5=48000 36000 39200 9.800 6”*8” 48 200 Size 30”*60” 18”*20” 8”*10” 8”*10” Area 1800 360 80 80 Rate 200 200 200 200 Amount 3. 10. No. The highest demand is of shisham made wooden handicraft.Structure and Civil works: S. 1 2 3 4 5 6 Particulars Factory shed 2 stock room Guard room Power room Boundary wall Washroom 5labour quarters 7 8 9.000 72000 16000 16000 220000 9600 MATERIALSBabool/Aakashiya: This is available in Rajasthan and some part of Gujarat.20 / sq ft Shisham: Most of wooden handicraft is made of shisham wood.60.36.

30/sq ft. Pine: Rs. & Bihar. EXPECTED ACCOMPLISHMENTSThe Business Unit expects to capture an additional 25% of the market share in the second year. Teak: Rs. 25 /sq ft Only Shisham will be used to manufacture wooden handicraft because it is more in demand and suitable for these type of handicrafts. These are less demanded. KEY TO SUCCESS“KHALSA COLLECTION”-‘SOMETHING DEFFERENT AND AFFORDABLE’ will build an impression in the mind of the customers because the punch line itself explains about the different variet of product. following this expansion and another 50% in the following year. This is made available by local wholesale timber merchant. 25 /sq ft. 80 /sq ft Mango: Rs. .U. The rates are Rs.P. This punch line will also be printed on every poly bag of KHALSA COLLECTIONS.

its competition.MARKET ANALYSIS- Geographical Area Makarwali Road Vaishali Nagar. customer preferences and their satisfaction level. Ajmer Objective of the survey • • To know about the market potential for the handicraft To analyze the handicraft manufacturing. • To find out the major players in the market Source of Information Primary (Market Survey) and Secondary data Methodology Adopted: Research plan was developed through conclusive research design using descriptive research analysis methods by survey as detailed below: .

Research Approach: 1. After deciding the research approach and instruments. Secondary data regarding world demand and supply positions. Primary data for gathering information regarding manufacturing requirements and facilities available at Ajmer region was collected by personal interview with different manufacturers selected on the basis of random sampling survey method. Indian Handicraft status and other relevant information were gathered from different websites. sampling plan was prepared Sampling Procedure: Simple random sampling method was used for survey on representative basis. Research Instruments: Collect the data on both the sensitivity of demand and supply. Sample Size: 20 handicraft units Contact Method: Personal interview with each of the manufacturer and raw material suppliers was conducted. 2. . customer preferences and to know the market potential and future growth.

Sometimes they just increase the commissions or the margins of these. some strategic marketing plan is necessary to be designed and implemented. . • Besides from these efforts e-commerce is also a promotional tool for marketing of this product. • Apart from good quality good designs are an important factor. So I will do online selling also in order to promote my product. so as such the manufacturers incur no promotional expenditure. These designs will be based on traditional pattern so that it can impress foreign customer. But in order to differentiate the product and capture the existing market and to develop strong customer base.STRATEGIC MARKETING PLANWooden handicraft is being an unbranded commodity. if the targets are achieved enormously. • So orders will also be taken online apart from fax and telephonically. Various strategies that will be used being a new entrant are:• Study supply with timely delivery to fulfill the demand of the domestic area as well as outside area and good quality would be one of the strategic strength of the marketing plan.

1 2 3 4 5 6 7 8 9 10 Particulars Chemical treatment plant Seasoning plant Surface planner Grinder(small) Grinder(big) Driller Band show machine) Gaze machine Ziksha machine Sanding machine Total: (aara No.OPERATIONAL REQUIRMENTMachinery Involved S. No. 1 1 9 5 5 2 1 3 1 1 Rate 200000 300000 30000 2500 7000 1500 25000 30000 3000 30000 Amount 200000 300000 270000 12500 35000 3000 25000 90000 3000 30000 968500 .

85.FINANCIAL ANALYSIS Cost of Project Particulars Land & Site development Building Plant & Machinery Other Fixed Assets Preoperative Expenses Preliminary Expenses Provision for Contingency WC Margin Total Means of Finance Particulars Promoter's Capital Long/ medium Term Loan from Banks Total Cost in Rs.648 .600 9.189 38.71.30.995 1.203 25.94.445 38.282 1.85.68.95.500 2.000 2.800 9.94.648 Cost in Rs 10.63.36.282 26.90. 12.

Administration expenses will be Rs 360000 per annum. of year 1.34% : 8% Miscellaneous Fixed assets : 5% . The expected capacity utilization will be 60% in first year. with the first installment due at the end starting of first operating year.) 2.) 7.) The company will start commercial production on July 1. 3. The company would work for 360 days per year on a 1 shift basis.) The depreciation rates for company law purposes are as owes: Building Plant and Machinery : 3. 8. The term loan will be repaid in 14 equal half-yearly installments. 65% in the second year. The installed capacity on this basis works out to 12000.) The construction period will last for one year. 5. 9.) 6. The interest rate on the outstanding term loan will be 12%.) Factory overheads expenses will be Rs 32880 for the first year.Basic Assumptions underlying Financial Projections The profitability and other projections may be prepared on the basis of following assumptions:1.) The bank finance for working capital will cost 12% interest rate.) Wages and salaries are expected to be Rs 918000. 4. and 70% for the third year and so on.

Annexure: 1 Questionnaire (Manufacturer) Name____________________________ Company Name___________________ Area of production_________________ Year of Establishment___________________ 1) Variety of handicraft item you manufacture? a) Chairs b) Tables c) Decorative items d) Any other 2) From where you acquire the raw material for wooden handicraft? a) Bihar b) c) Gujarat d) Import from other countries U. 3) At what frequency do you order the raw material stock? a) Weekly b) Fortnightly 4) Order size a) 400-500 units b) 500-700 units c) 700-1000 units d) 1000 units and above c) Monthly d) as required .P.

5) Who bears the transportation cost? a) Supplier b) Yourself 6) Which type of handicraft item is more in demand? a) Wooden c) Metal made 7) Which type of wood is maximum in demand for manufacturing? d) Teak e) Mango b) Glass made a) Babul/Aakashiya b) Shisham c) Pine 8) What level of Inventory you keep? a) 15 days b) 30 day c) 2 months d) 4 months 9) From where you get the skilled workers for the ornamental work? a) Saharanpur b) Barmer c) Jaisalmer d) Locally .

com • www.handicraftdpr.answers.com • www.htm .wikipedia.in • www.in • www.com • www.ori.yahoo.indianhandicraftexporter.co.Bibliography • www.nic.com • www.google.

90.445 will be paid .Annexure: 2 Interest Term Loan Yea r 1 2 3 4 5 6 7 14 Equal Instalments @ 12% per annum Loan Loan O/S at O/S at Interest the end the end Interest for the Loan O/S of 1st of 2nd for the 2nd at the half half 1st half half beginning year year year year 240541 222038 2590445 3 1 155426 144324 203534 185031 2220381 9 7 133222 122120 166528 148025 1850317 5 3 111019 99917 129522 111018 1480253 1 9 88815 77713 1110189 925157 740125 66611 55509 740125 555093 370061 44408 33306 370061 185029 0 22204 11102 Total interest for the term loan 299750 255342 210936 166528 122120 77714 33306 Note: term loan of 25.

Annexure: 3 Working Capital Requirements Items Raw materials Stock in process Finished goods Book debts Total Current Assets Less: Margin for WC from long term sources (25% of RM CAs) Less: Trade credit for raw materials Bank finance for WC Norms in days 30.00 1st year 62500 1837 14698 25722 104757 2nd year 67708 1990 15923 27866 113487 3rd year 72916 2143 17148 30009 122216 26189 62500 16068 INTREST @ 12 % 1928 28371 67708 17408 2088 30554 72916 18746 2249 .00 4.00 7.00 42.00 1.

34% 40702 Plant & machinery 8% 85868 Miscellaneous fixed assets 5% 114599 16. Depreciation schedule for company law purposes (SLM) Building 3.Annexure: 4 Depreciation A.34 Annual depreciation % 241169 C. Depreciation schedule for income tax purposes (WDV) Assets 1st yr 2nd yr 3rd yr Total 1218631 1073351 2291982 263525 3665177 . Asset Valuation for depreciation purpose Share of Share of Basic Preoperative Contingency Asset expenses cost cost margin 106360 Land 0 90435 64596 Building 936800 79655 56896 Plant & machinery 968500 82349 58821 Miscellaneous fixed assets 230000 19556 13969 319890 Total 0 271995 194282 B.

333 194282 991832.667 194282 1165670. Cost of production *Raw Materials *Power *Wages & Salaries *Factory Overheads C. Admn & Selling Expenses *Admn Expenses *Selling Expenses D.3%) Total 107335 96601 86941 851750 959085 567862 664463 378593 465534 Annexure: 5 Profitability Estimates (Estimates of Working Results) Installed Capacity Production Capacity Utilization A. Preliminary Expenses W/O I.Building Plant & machinery & Miscellaneous fixed assets (33.333 3rd yr 12000 8476 70 3836000 1543360 875000 70000 560000 38360 478333 420000 58333 1814307 213185.667 . Profit/ Loss Before 1st yr 12000 7200 60 3288000 1322880 750000 60000 480000 32880 410000 360000 50000 1555120 301678 299750 1928 241169 1012273 194282 817991 2nd yr 12000 7812 65 3562000 1433120 812500 65000 520000 35620 444167 390000 54167 1684713 257430. Sales Realization B. Total Financial Expenses *Interest on Term Loans *Interest on Bank Borrowings F. Operating Profit H. Depreciation G. Gross Profit Before interest E.000 255342 2088 241169 1186114.000 210936 2249 241169 1359952.

4 0 282391.933 821270.50 787968.50 241169 194282 1223419.50 787968.50 . Retained Profit M .933 241169 194282 1256721.50 170561.500 883279.400 821270. Net Cash Accruals 30022.50 170561.Add: *Depreciation *Preliminary Expenses W/O *N.Tax J. Provision for Tax K.167 Annexure: 6 Tax Calculation 1st yr Profit/ Loss Before Tax 817991 Add: Depreciation for company law purposes 241169 Total 1059160 Less: Depreciation for Tax purposes 959085 Gross Total Income 100075 Total Income 100075 Income Tax @ 30% of Total Income 2nd yr 991832 241169 1233001 664463 568538 568538 3rd yr 1165670 241169 1406839 465534 941305 941305 30022.167 883279.933 282391.167 241169 194282 1318730. Profit After Tax L.

50 2220381 16068 1365497.5 0 62500 5685131 3665177 241169 3424008 62500 1837 14698 2nd yr 1295203 1609238 1850317 17408 1555739 67708 6327918 3665177 482338 3182839 67708 1990 15923 3rd yr 1295203 2492517 1480253 18746 1745273 72916 7032005 3665177 723507 2941670 72916 2143 17148 3885661 3665177 3665177 .Annexure: 7 Projected Balance Sheet Construction Period End Liabilities Share Capital Reserve & Surplus *Term Loans * WC Adv Current Liabilities & Provisions * Trade Credit Total Assets Fixed Assets * Gross Block * Less: Accumulated Deprecation * Net FA Current Asset Loans & Adv * Raw Materials * Stock in Process * Finished Goods 1295203 2590445 1st yr 1295203 787968.

*Book Debts Cash & Bank Balances *Preliminary Expenses Total 25722 26189 194282 3885648 2059225 97141 5685131 27866 3031592 97141 6327918 30009 3968119 7032005 Annexure: 8 .

BREAK EVEN POINT FOR THE PROJECT Amount Amount Amount A Sales Realisation 3288000 3562000 3836000 B Variable Costs Raw Materials Interest On Working Capital Power & Water Selling & Distribution Expenses Total C Fixed Cost Wages And Salaries Repairs And Maintainance Depriciation Administrative Expenses Interest On Term Loan Total D Contribution(A-B) p/v ratio Break Even Point In Terms Of Volumes Of Sales Break Even Point In Terms Of Installed Capacity 750000 1928 60000 50000 861928 812500 875000 2088 2249 65000 70000 54167 58333 933755 1005582 480000 10000 241169 360000 299750 1390919 1390919 1390919 2426072 2628245 2830418 73.3321 4 .7856 4 1885081 57.

Break Even Point .

YEARS Fixed cost total cost Sales Realization Break Even Point In Terms Of Volumes Of Sales 2010 139091 9 225284 7 328800 0 188508 1 2011 2012 1390919 1390919 232467 239650 4 1 3562000 3836000 188508 188508 1 1 .

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